Mourning in America: The Rule of Law Is Dead

Andy Snyder|July 2, 2021

The words of our nation’s founders are on our mind this morning.

They offer a fitting tribute as we head into this holiday weekend and muse about some of the latest threats to our money and our markets.

In the Massachusetts Constitution, John Adams called for “a government of laws and not of men.”

He wanted the good of the people – all of them – to come before the good of any individual man.

We fear he’d be weeping today.

Let us continue, and we’ll show you why. The words of James Madison bring the scene to life…

It will be of little avail to the people that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood… or undergo such incessant changes that no man who knows what the law is today can guess what it will be tomorrow.

With that in mind, we turn to the news of the week…

Former President Trump’s company was indicted for tax fraud.

Bill Cosby is free for good.

Crime is surging across the country.

And poor, poor Britney Spears must still answer to her dad.

The law is an odd thing these days. But in the world of money, it gets even worse.

For You, Not Us

Surely you’ve heard about the G7’s agreement on a global minimum tax rate. We wrote about it here.

What a lark it has been.

It took less than a month for the “good for you, not for me” crowd to have their way with the idea.

We learned this week that Britain is set to carve out a huge exemption from the rule for itself. The country’s big banks won’t have to worry about the tax.

They already pay enough, the decision makers said.

Again, we point to Madison’s words above…

Or undergo such incessant changes that no man who knows what the law is today can guess what it will be tomorrow.

Stealing From Tomorrow

We sighed this week when the headline writers touted a new plan from the White House to gut a tax provision that, in their words, “the richest 0.1% use to avoid taxes.”

The plan will finally give Washington the money it deserves, the folks in charge say. The tax code change will stop uber-rich families from “hiding” their wealth.

We disagree… vehemently.

Plain and simple… it’s theft.

These trusts are not loopholes. They’re not secret cheats used only by the rich and famous. They’re used by everyday farmers, small business owners and anybody else who’s managed to somehow make a buck or two.

They’re not used just by the 0.1%. That’s a lie.

But now Washington has spent beyond its means and needs money it doesn’t have – or deserve. So it will change the law and steal money from the folks who do.

Our forefathers would cry. And so should we.

Countless Americans work hard in this life so that those who follow them won’t have to.

That idea is quickly becoming impossible to realize. Uncle Sam will soon be the grand recipient of all that hard work.

Hail the Communists

The Founding Fathers feared such things in the early days of this country.

Daring to read a history book, we learn that Madison and Alexander Hamilton studied the fall of Athens with great curiosity. They saw that its leaders canceled debts and debased the currency… a trend Madison saw being repeated in the actions of his own countrymen following the nation’s independence.

That’s when he wrote of the new nation’s “rage for paper money, for abolition of debts, for an equal division of property.”

He’d be saddened by the headlines du jour… but he wouldn’t be shocked.

Even the capitalist greats are hinting at the red coats in their closet.

Earlier this week, Charlie Munger – the down-home American investor who has long walked beside Warren Buffett – stunned us with his praise for China.

His words are downright scary.

“The communists did the right thing,” he said of Beijing’s smackdown on Jack Ma and his big IPO. “They just called in Jack Ma and told him, ‘You aren’t gonna do it, sonny.'”

Munger praised the government for halting speculation. He wants Washington to make the same bold moves and to “step in preemptively to stop speculation.”

They’re bold words from a billionaire who made his fortune buying low and selling high.

But there is hope.

There are plenty of reasons for us to light a fuse, cover our ears and send shock waves through the sky this weekend.

Adams feared the ideas we’ve discussed today would bring our nation to its knees in its first four years. Madison took such worries to his deathbed.

We’ve made it 245 years.

There’s hope this whole mess won’t fall apart tomorrow.

Until we get the rule of law back… and until the law is more important than the man (or what the man believes in)… that’s the best we can hope for.

We must plan for a fall, but it must not paralyze our minds or our actions.