“The true face of socialism isn’t Alexandria Ocasio-Cortez; it’s Joseph Stalin.”
That was my response to a subscriber’s great question during our recent subscriber-only “Ask us Anything” teleconference, held by myself and my Fast Money Alert co-editor and fellow free-market warrior Dr. Mark Skousen. The question posed was essentially: What can be done about the rise of socialism in America?
First off, it’s an alarming question to have to address. I mean, you would think that after countless historical examples of failed socialist states; widespread deprivation, corruption, state-inflicted violence, gulags, death camps and killing fields, socialism and its corollary political ideologies fascism and dictatorship would be relegated to the philosophic crematory of necrotic ideas.
Yet that’s where we are in 21st century America, an America where Democrats are running as fast as they can to the left to embrace the “progressive” ideas penned some 150 years ago in Karl Marx’s “Das Kapital.”
Perhaps those who think it a feel-good notion that government should be in control of the economy via restrictions on how we consume energy, how much of our lives we must forfeit through taxes, and how we get our medicine, should stop and read another influential book on government.
That book’s title is “1984.”
In that dystopian warning beacon, George Orwell created the depraved vision of a socialist future through use of the Stalin-like “Big Brother,” complete with a push broom mustache and all. Yet more importantly, the collectivist essence of government control is expressed in the following line by the novel’s antagonist, O’Brien: “If you want a vision of the future, imagine a boot stamping on a human face — forever.”
Alexandria Ocasio-Cortez (left), Joseph Stalin statue (right)
This is the stuff of nightmares, but sadly, the ideas at the base of America’s new socialists are, in essence, the stuff of Big Brother.
That brings us back to my answer to the subscriber’s question regarding what we are going to do about the rise of socialism in our country.
Well, the answer actually is simple, because it’s the only solution to any issue of public concern, and here it is: The only way to combat bad ideas is with good ideas.
Moreover, the only way to combat the encroachment of bad ideas is to engage those bad ideas on a philosophic level with better, more persuasive arguments.
This is by no means an easy task, because those of us who believe intensely in the virtue of free markets, liberty and capitalism are often painted with a black-hearted brush. That’s why we need to approach this issue in terms of morality, not just practicality.
Capitalism isn’t just a better social system for humans because it provides more goods to more people. Yes, it does that, but that’s not its essence.
Capitalism is moral because it’s a social system based on the veneration of individual rights. Those rights include the right to your own life, your own liberty, and perhaps most importantly, your own property.
Practically speaking, this translates into a society where the government’s only legitimate function is to protect individual rights.
If you argue the morality of capitalism and not just its practicality, you will be arguing on the same playing field that the current American socialist darlings such as Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders occupy.
You see, the left argues that it’s “immoral” to be too rich and that it’s moral for the successful to be compelled to pay for everything in society via taxation. They also argue that it’s moral to make sure every citizen is his brother’s keeper.
The moral counterpunch to this line of thinking is that it’s immoral for the state to violate an individual’s right to his life, liberty and property.
So now, we who love liberty, freedom and capitalism must engage in an epic battle of ideas, one that takes place on the playing field of not only rational discourse, but also the playing field of moral virtue.
Finally, remember always that the only antidote to bad ideas are good ideas.
P.S. Next week, I will have more on how to arm yourself with the philosophic knowledge necessary to argue rationally in defense of capitalism, liberty, freedom and a rational morality that fiercely defends these sacred concepts.
ETF Talk: This Fund Seeks Out Disruptive Stocks
The Ark Innovation ETF (ARKK) is an actively managed exchange-traded fund (ETF) that targets companies poised to benefit from disruptive innovation in one of three areas: industrial innovations, genomics or Web x.0.
ETF.com’s 2017 ETF of Year, ARKK launched in 2014 and currently has a market cap of $1.36 billion. Ark Innovation is up almost 25 percent year-to-date, more than double the 11 percent average on the S&P 500.
The fund follows an active, all-of-the-above approach. Investing over 99 percent of its assets in stocks (78 percent of which are based in the United States), ARKK is full of cutting-edge firms, such as Tesla (NASDAQ:TSLA), Twitter (NYSE:TWTR) and Alibaba (NYSE:BABA) ripped from the headlines. That said, ARKK’s mandate is so broad that it includes almost any company that might benefit from new technologies, such as Disney (NYSE:DIS) and Charles Schwab (NYSE:SCHW).
Its top 10 holdings include Tesla Inc. (NASDAQ: TSLA), 8.67%; Stratasys Ltd. (NASDAQ: SSYS), 7.55%; Invitae Corp. (NYSE: NVTA), 5.48%; NVIDIA Corp. (NASDAQ: NVDA), 5.48%; Square Inc. A (NYSE: SQ), 5.20%; Baidu Inc. ADR (NASDAQ: BIDU), 4.86%; Illumina Inc. (NASDAQ: ILMN), 4.55%; Intellia Therapeutics Inc. (NASDAQ: NTLA), 4.48%; Twitter Inc. (NYSE: TWTR), 4.42%; and Teradyne Inc. (NASDAQ: TER), 4.13%.
Chart courtesy of StockCharts.com
ARKK’s top holding, Tesla Motors, is poised to potentially become a $4,000 stock, according to the “bull” case CEO and CIO Cathie Wood shared in an interview on CNBC.
“This is a five-year time horizon,” Wood said on CNBC’s “ETF Edge” on Monday. “Four-thousand dollars is the bull case, $700 is the bear case. It’s rare for us to a have a stock that meets our minimum hurdle rate of return in the bear case, so it’s north of 15 percent compound annual rate of return to get to our bear case target.”
The Ark Innovation ETF (ARKK) was a recent addition to my Successful Investing growth portfolio, which you can subscribe to here. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.
It’s Time to Let Freedom Out of Its ‘Penn’
As you likely know, one of the core principles of The Deep Woods is freedom in all of its forms. Freedom of thought, speech, exchange, commerce, association and the freedom that states the unequivocal autonomy of the individual, is a concept that underpins my worldview.
And to perhaps no one’s surprise, my favorite event each year celebrates freedom in all its forms, and it also happens to be the brainchild of my friend and Fast Money Alert co-editor, Dr. Mark Skousen. Yes, it is the annual FreedomFest conference, and this year, it’s going to be extra special.
This year, Mark and his FreedomFest team have scored the great Penn Jillette of “Penn & Teller” fame, as one of the featured speakers. In this special FreedomFest talk, Penn will reveal the “sleight of hand” behind the dangerous new “socialist” agenda in America. His presentation is not to be missed!
He will speak on Friday, July 19, 2019, on “The Magic of Liberty.” After his evening talk, Mark will interview Penn about his incredible career, followed by Q&A from the audience and a private reception (including photo and autograph opportunities) with attendees and speakers (limited to 100 attendees).
Between Penn Jillette, Kevin O’Leary of “Shark Tank” fame, and yours truly, this year’s FreedomFest is going to be awesome. I recommend watching the three-minute video about this year’s big show at https://vimeo.com/311525927. Password: eastwood
And, for The Deep Woods readers, I am proud to offer a special “early bird” discount, which ends March 29. Just go to https://www.freedomfest.com/eagle?utm_source=EaglePromo&utm_medium=Digital&utm_campaign=EagleEB or call 1-855-850-3733, ext. 202.
You will save $200 off the retail price, which means you pay only $495 per person or $795 per couple. Be a part of “the greatest libertarian show on earth,” including our three-day financial seminar sponsored again this year by Eagle Publishing and the Deep Woods.
So, come celebrate freedom with me in Las Vegas. I guarantee you’ll love it!
The Folly of Forgetting Phenomenal Fortune
Good fortune is a gift that deserves reverence. The writer Eckhart Tolle once said, “Acknowledging the good that you already have in your life is the foundation for all abundance.” Unfortunately, the sad and curious case of musician, actor and “Empire” star Jussie Smollett reminds us of the folly of forgetting phenomenal fortune.
If you know anyone in the entertainment industry, and I know many, making it in that competitive arena is no easy task. To stand out among the throngs of aspirants, you need to have talent and a determined work ethic.
If you’re a musician, or an actor, or a writer, you need to spend years learning, studying and practicing your craft. You also have to work hard to cultivate the right connections. Perhaps most importantly, you need a whole lot of good fortune that puts you in the right place at the right time.
It is this sort of combination of hard work and good fortune that I assume helped Mr. Smollett land a supporting role on the successful, long-running network television show. That role reportedly paid him $125,000 per episode. And because there are 18 episodes per season, that puts Smollett’s annual salary at $2.25 million.
The median household income in the United States last year was $59,055.
In addition to his “Empire” success, in March of last year Mr. Smollett released his debut album, “Sum of My Music.” Now, by any objective measure, being paid more than $2 million per year as an actor and also having numerous top-rated R&B songs as ranked by “Billboard” would qualify to me as phenomenal fortune.
Yet for Smollett, it appears this phenomenal fortune wasn’t enough.
By now I suspect you are at least somewhat familiar with the details of the Jussie Smollett case. Indeed, it has been one of the biggest, most talked about news stories in recent memory.
That’s why today I am not going to spend time reiterating the details of the alleged hoax and staged hate crime for which Mr. Smollett has been charged by Cook County, Illinois, prosecutors. Nor am I going to go into detail on the cultural issues surrounding racism (Mr. Smollett is black), homophobia (Mr. Smollett is gay), the prevalence of hate crimes in America or the toxic history of bigotry in the country. Jason Riley of The Wall Street Journal has already written a great piece on those issues.
What I want to highlight here is the motivation of the alleged faked assault, and how it feeds into the all-too-common failing of ignoring profound good fortune.
According to many accounts, the reason Smollett allegedly staged the hate-crime hoax was to up his public profile and to get even greater compensation from his employers at 20th Century Fox Television (the producers of “Empire”). On Friday, Smollett was suspended from the show.
Now, there has been some pushback on the thesis that Smollett allegedly staged the incident to get a higher salary. The entertainment industry website TMZ has reported that “none of the brass — producers or executive producers — heard even a whisper from Jussie grousing he was underpaid.”
I certainly am not in a position to make a judgement on all of the facts or the motives in this case, but I am sure they will come out in due time. But assuming the reports are accurate that Mr. Smollett is guilty of the allegations, and he did it as a ploy to get more money, or to gain a high-profile victim status that would up his monetary value, then I can only be forced to conclude that he was a man who stared his phenomenal fortune squarely in the face — and spat on it.
I guess the blessings of good looks, a great singing voice, acting skills, a major-label record deal and a $2.25 million salary weren’t enough good fortune for Mr. Smollett. Apparently, he just had to have more.
While the Smollett case appears to be an extreme example of not acknowledging life’s good fortune, we all are guilty at times of failing to put in perspective just how lucky we are.
Whenever my thoughts descend into this ungrateful realm, I stop to consider that by nearly every metric that matters — health, life span, inequality, environment, knowledge, safety, quality of life, happiness and especially wealth — the world has never been better than it is right now. If you don’t believe me, read Steven Pinker’s brilliant work, “Enlightenment Now: The Case for Reason, Science, Humanism, and Progress.”
As thoughtful humans, we owe it to ourselves to keep firmly in mind the extreme good fortune we have. If Mr. Smollett had done so, this whole sordid stain on society may never have occurred.
Equal Misery for All
“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
As he did so well, the great British leader’s succinctly delivered wisdom burrows down to the core of an issue. And when it comes to socialism, its true core is misery for all.
Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.
In the name of the best within us,