This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence - economic, political, and even spiritual - is felt in every city, every statehouse, every office of the Federal Government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications...
In the councils of government we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
We must never let the weight of this combination endanger our liberties of democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.
Dwight D. Eisenhower
January 17, 1961
I normally try to limit my comments solely to financial markets and not politics, but the more I think about the markets, the more I believe the two have become inextricably intertwined. I am not describing a relationship of cause and effect, I am describing direct control. The title illustrates the degree to which I believe this has become the case.
After watching President Bush on 'Meet the Press' I became uneasy. I went out and bought a new book that I had heard about called "American Dynasty" by Kevin Phillips. The cover's synopsis reads: "Phillips demonstrates how the Bush family has perfectly exemplified many of the growing trends in American political life - policy favoritism to the top 1 percent, paper entrepreneurialism, and crony capitalism a la Enron (the Bush's dealings with Enron go back to 1986). Far more than any previous political family, it represents an interlock between the hitherto temporary presidency and the permanent government. As such, the family has threaded its way through political and armaments scandals and, since the 1980's, faint hints of acts that might in another climate have led to presidential impeachment."
My personal ideas about current government intervention have left me predisposed to be open minded about this book. Skimming the material left me impressed enough to mention it to you.
I fear we are falling asleep. I believe that the Federal Government is too big and controlling and that "terrorism" has softened the populace to allow it to be so. Ultimately I believe that this will prove to be very bad for financial markets that are, or at least were, based on the collective decisions of millions of investors. Instead investors now seem to be overly dependent on the macro machinations of the Federal Reserve and their counterparts in Japan.
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