Is AI Coming How to Survive The Upside to Get You? the Bear Market of Dystopia Jumping on Opportunities Despite (or Because of!) Down Markets CLICK HERE Make sure you subscribe by clicking here. We’ll send you valuable updates and always send an alert when the next issue is published. When you subscribe, you’ll be the first to know when future issues are published. SUBSCRIBE NOW! JUNE 2019 : ISSUE 25 CLICK CONTENTS LOST? HERE Second Anniversary Issue 16 32 40 46 58 36 4 Inside This Issue 46 Toledo, Ohio: BY STEVEN LONGENECKER A Lesson in Successful Failure AMERICAN BY P.J. O'ROURKE CONSEQUENCES 6 Letter From the Editor BY P.J. O'ROURKE 54 Predicting the Next Stock Market Editor in Chief: P.J. O’Rourke "Flash Crash" 10 What Could Possibly Go Right? BY ROMESH SAIGAL AND Editorial Director: Carli Flippen ABDULLAH ALSHELAHI Publisher: Steven Longenecker 12 From Our Inbox 58 The U.S. Economy's Dirty Secret Assistant Managing Editors: 16 Is AI Coming to Get You? Chris Gaarde, Laura Greaver BY JOHN TIERNEY BY TODD G. BUCHHOLZ Creative Director: Erica Wood 62 How Inflation Could Return 22 More Than a Home Contributing Editors: BY MOHAMED A. EL-ERIAN BY DR. DAVID EIFRIG Abdullah AlShelahi, Todd G. Buchholz, Dr. David Eifrig, Mohamed A. El-Erian, Paperback Pollyana 26 Small Fortune With Collectible Cars 66 Andrew Ferguson, John Phillips III, Austin Root, Romesh Saigal, Buck Sexton, John Tierney BY JOHN PHILLIPS III 68 Read This COMPILED BY P.J. O’ROURKE NewsWire Editors: 32 The Bright Side of Bad Situations AND LAURA GREAVER C. Scott Garliss, John Gillin, Greg Diamond BY CHRIS GAARDE 70 The Final Word Cartoon Director: Frank Stansberry 36 The Upside of Dystopia BY BUCK SEXTON General Manager: Jamison Miller BY ANDREW FERGUSON 86 Featured Contributors Advertising: Ricky D'Andrea, Jill Peterson 40 The Bear Market Survival Guide Editorial feedback: feedback@ BY AUSTIN ROOT americanconsequences.com American Consequences 3 INSIDE THIS ISSUE his month, our magazine turns two years you survive the coming bear market. Auto Told... Bringing you news that few others in writer John Phillips shows the upside, the tired old know-it-all media would publish... downside, and hype of investing in classic collectible cars. And Dr. David Eifrig shows American Consequences is meant to be unlike how your home can be more than simply a anything else you might read – an unfiltered place to live... it can be one of the biggest no- collection of ideas that matter... brainer investments ever. Each month, we’ve tackled a big issue that Contrarian journalist and author John affects your money (and typically, one that Tierney asks who of us is afraid of artificial common wisdom was wrong about). We hope intelligence... and has a solution for when AI we’ve helped you go “against the grain” of most goes bad. Meanwhile, former White House American financial pundits. After all, that’s speechwriter Andrew Ferguson details the where the money is usually made. upside in dystopia. And we want to say thank you to the nearly Plus, don’t miss... 300,000 of you who read our words. • American Consequences editor Chris Gaarde If you have a friend, family member, or shows us the bright side of three potential colleague who might be interested in joining “bust” scenarios that could start soon. us, please forward them this issue. They can • Top economic adviser Mohamed A. El- sign up to read for free by clicking right here. Erian shows how inflation could return. • Two Michigan engineers think they’ve And this month, following last month’s “Up in figured out how to predict the next flash Flames” issue on a potential market crash (not crash. bad timing considering May was the worst • And former White House director of month for the market so far this year), we’re economic policy Todd G. Buchholz pleased to bring you some good news – about shares the dirty secret of the U.S. economy. the “silver lining” of disasters... And our resident anonymous Book Grump Editor in Chief P.J. O’Rourke starts us off turns his frown upside down for a very with a look at why creative destruction is limited time in this issue... while former CIA one of the most powerful forces in capitalism. analyst Buck Sexton finishes out our issue And P.J. has also penned an incredible with a look at the current border crisis. article on Toledo, Ohio – tracing the Tell us what you think of our magazine at history and future of a city that is a lesson in [email protected]. “successful failure” and the grit that makes America great. Regards, Seasoned portfolio manager Austin Root Steven Longenecker shows three dead-simple ways that can help Publisher, American Consequences 4 June 2019 limited time offer: Watch now for Free. Click here. Watch now for free! From Editor in Chief P.J. O’Rourke SCHUMPETER’S CREATIVE DESTRUCTION 6 June 2019 LETTER FROM THE EDITOR The amazing thing about free-market capitalism is that it gets rid of stuff that doesn’t work. You say, “Amazing? When stuff doesn’t work,of course you get rid of it!” If you’ve got a washing machine and – no Of these systems, the biggest is big matter how many times the supposedly lonely government, with its ethos of “If it works, tax Maytag Man has been to your house – it it... If it doesn’t work, subsidize it.” just can’t be fixed... do you keep piling dirty When the government has a broken washing clothes into it? You’ll run out of things to CLICK machine, it breaks the dryer to ensure job wear. HERE security for the Maytag Man, then funds a TO READ No, you haul the old appliance to the dump grant program for free clean t-shirts. THE WEB VERSION and acquire a new one. This is what free- Or, to take an actual example, there’s the War market capitalism does with businesses. When on Poverty. The federal government has spent a business is no longer profitable, investors hundreds of billions of dollars on poverty dispose of it and put their investment capital programs. (It’s currently spending more than into another business that does (or will, $668 billion a year, according to the Cato investors hope) make a profit. Institute.) (Which is pretty much what happened to Maytag – the brand name bought by Whirlpool and practically everybody at the When the government has a Maytag company fired.) “ broken washing machine, it This is – sorry, Maytag employees – common breaks the dryer to ensure job sense. And common sense is really all there is security for the Maytag Man, to the free-market capitalist system. then funds a grant program But there are other systems... systems that don’t involve common sense in the use of for free clean t-shirts. capital, systems that spend money in strange and silly ways. American Consequences 7 LETTER FROM THE EDITOR ADVERTORIAL The War on Poverty began with LBJ’s Great Capitalism... is by nature a form or Society initiative in 1964. For a while it method of economic change and not only worked. The U.S. poverty rate was 19% in never is but never can be stationary... The 1964. By 1974, it was 11.2%. But over the fundamental impulse that sets and keeps next 45 years, the poverty rate had... a poor the capitalist engine in motion comes run. In the midst of the present economic from the new consumers’ goods, the new boom, in 2017 (the latest figures available), methods of production or transportation, the U.S. poverty rate was 12.3%. the new markets... The process of industrial mutation that incessantly If poverty were a business, we’d all be broke. revolutionizes the economic structure from This common sense of the free-market within, incessantly destroying the old one, capitalist system is obvious. So, obviously, it incessantly creating a new one. 00:08:01 was the first thing economic theorists noticed Schumpeter thought that creative destruction about free markets when they began studying was so creatively destructive that it would, in VIDEO: capitalism in the late 18th century. the end, create the destruction of capitalism itself by undermining capitalism’s institutional Not. framework, that framework being common It wasn’t until the brilliant Austrian economist sense. If we allow common sense to be Joseph Schumpeter (1883-1950) published undermined – and big government is down in that mine working hard with picks and New 5G Video his book Capitalism, Socialism and Democracy in 1942 that economists’ attention was drawn shovels – Schumpeter’s point will have been to the common-sense fact that abandoning proven. what doesn’t work is what makes what works But the real lesson of Schumpeter is that Going Viral… work. uncommonly brilliant economists are not You have got to see this video that’s from $0 to nearly $100 billion in sales — Schumpeter called this process “creative uncommonly sensible. They are odd men going viral… this year. destruction.” It’s been a catch phrase to who can see the inside intricacies of an describe business cycles ever since. He made it economy but take more than 175 years to One of the world’s top angel investors He’s been successful on 95.3% of his look that economy in the face – watchmakers sound more complicated than it is: — a tech genius named Jeff Brown — own tech investments… who understand every spring and gear of unveils a brand-new 5G device… clockwork but who can’t tell time.