Editor’s Note: Why does government exist? 

What is it for? 

In today’s Weekend Edition, excerpted from Bill’s new book, Hormegedddon, you’ll find the answer. 

As Bill writes: “All democratic governments owe their legitimacy to the same thing: the decisions of misled voters, based on fraudulent representations by dishonest leaders.” 

Source: Flickr

What Is the Point of Government? 
By Bill Bonner, Chairman, Bonner & Partners

Poor Chuck Hagel. 

In early 2013, hardly a day went by without a good walloping from the Wall Street Journal. Bret Stephens called him a coward, a flip-flopper, a political opportunist, a bigot, and worst of all, a bad friend to Israel. 

Dorothy Rabinowitz whirled herself into such a frenzy over what a buffoon he was, it became hard to understand the words coming out of her frothing laptop. 

At the same time, over on Capitol Hill, Senators John McCain and Lindsey Graham went to work on him in a particularly clumsy and disgraceful manner, like a pair of goons trying to break kneecaps in the dark. 

It was a bit of Kabuki theater that was at once both distasteful and absolutely necessary. Those who would presume to meddle should have their own mettle tested first. In addition to getting roughly handled by the press and the politicians, candidates for any post – elected or appointed – should be subjected to certain ordeals. 

The object will not be to reveal weaknesses or shortcomings, but merely to allow the candidates an opportunity to demean themselves in petty and irrelevant ways. 

For example, a candidate for the secretary of Treasury might have to fish a wedding ring from the bottom of a Manhattan sewer. A mayoral candidate might be locked out of his house, stark naked, just to see how he handled the situation. 

Situations like that build character. They are also a tremendous source of humiliation and discouragement. And if we’re lucky these ordeals will help to eliminate candidates altogether. 

Anyone with so little dignity as to submit to them isn’t worthy of the office. And if he refuses, he should be denied the office too – because he hasn’t been willing to comply with the requirements. 

Getting in the Way

The world needs a lot fewer leaders than it has. Most of the time, people go about their business with no need for the expense and distraction of leadership. That is true in business as well as government. A leader just gets in the way, wasting everyone’s time and energy. 

Think about what you really want. Fixing the crack in the swimming pool before warm weather. Getting your father-in-law into a rest home or a casket. You want to figure out how to play “All of Me” on the guitar and how to make beef bourguignon on the stove. None of this requires leadership. 

Most businesses probably work best without leadership. People work out how to get things done. They don’t need interference from the top. Besides, the “leaders” often have no idea how the business really works. This is especially true of celebrity CEOs whose real job is to goose up the stock price. 

Often, a business will go along plausibly well, with the lower- and middle-level employees innovating as necessary. Then a strong leader will take over, pulling the whole business down some dead-end road, typically by grandstanding with a large merger or acquisition. The CEO gets headline fame; later, the business goes broke. 

The secretary of state is meant to lead America’s foreign policy. The secretary of defense is meant to lead America’s military. But what need is there? Who needs them? Each American can perfectly well decide for himself where he will travel and with whom he will trade. He needs no leadership. 

Many of the bruises on Chuck Hagel’s face came from his claim that Iran’s government was “legitimate.” But who cares? Everyone knows perfectly well that Iran’s government is as legitimate as any other, including the government of the United States of America. 

All democratic governments owe their legitimacy to the same thing: the decisions of misled voters, based on fraudulent representations by dishonest leaders. 

Faux Pas

Another faux pas that brought the blows down on Hagel was a years-old comment about a powerful “Jewish lobby.” 

There isn’t supposed to be a “Jewish lobby.” And the one there isn’t supposed to be isn’t supposed to be powerful. Of course, everyone knows there is a powerful lobby, composed largely of Jews, whose main focus is to protect the interests, as they see them, of a foreign nation: Israel. Leaders are just not supposed to say so. That was Hagel’s big mistake. He slipped up. 

That’s what leadership is all about: solemn and pompous lying. It’s about pretending you know something you really don’t… and asserting that your desires for other people are more important than their own desires for themselves. The greatest leaders are those who do it most grandly. 

Abraham Lincoln, for example. Without his leadership, the US would have probably split apart, which is to say the Southern states would have been permitted to exercise their right to self-determination – laid out in the Declaration of Independence and later on in the United Nations Charter. 

They merely demanded to do what the 13 colonies had done before them – to badly misgovern themselves rather than to be misgoverned by some foreign entity. (Lincoln received not a single Southern electoral vote.) 

No Faster Path to Disaster

There is no faster path to disaster than enthusiastic leadership. Exhibit A: World War I. Exhibit B came next: the disaster known as the Great Depression. In the previous depression, 1920-21, President Harding and Treasury Secretary Andrew Mellon simply ignored it. No leadership required. Two years later the depression was over. 

But in 1929, when the next one came, President Hoover and then President Roosevelt met it with aggressive leadership. Advancing the preposterous notion that they knew better than business people and investors, they promised to mitigate the Depression with “countercyclical policies.” They blocked the markets from making necessary (but painful) adjustments, thereby stretching out the Depression for almost an entire decade. 

Recently, the US has been the victim of two leadership whoppers. After terrorists brought down the World Trade Center in 2001, President George W. Bush led the country in an attack on Iraq, based on the fraud of “weapons of mass destruction” that a team of inspectors said, subsequently, the Iraqis didn’t have. 

Then, after the financial crisis of 2008-09, the Obama administration provided leadership, with the now-familiar lie that bankrupt institutions need to be kept alive at all costs and that a slowdown caused by too much debt could be remedied by adding even more debt. 

If President Bush had shown a little less leadership in military matters, the world would have saved 157,000 lives and as much as $6 trillion. If President Obama had shown a little less leadership in economic matters, the liquidity crisis would have swept away incompetent managers and overpaid CEOs, bad debts would have been flushed out quickly, and the economic crisis would have ended in 2010. 

So why do we let other people tell us what to do; are we not all equal? In many cases, are we not better

What is the point of government then? 

P.S. If you enjoyed this essay, then you have to get your hands on a copy of Bill’s new book,Hormegeddon: How Too Much of a Good Thing Leads to Disaster

But keep in mind that at midnight on Wednesday, September 3, we’re ending our offer to get a hardback copy of Hormegeddon, a yearlong subscription to Bill’s new monthly newsletter,The Bill Bonner Letter, and a special pack of valuable research reports for just $49. 

So, act right now… or risk missing out for good. Click here to order now.