In “The Secret of Directional Investing,” longtime political columnist and former White House staffer James Pinkerton offers a guide to making money. By spotting and shaping future economic and political trends, Pinkerton argues that you can leave Warren Buffett’s investing magic in the dust—for example, by investing in personalized healthcare made possible by AI.
As the Danish proverb says, “it is difficult to make predictions, especially about the future.” Historians have predicted many turning points in history that have not come to pass. After Hiroshima, Nagasaki, and “the atom for peace,” Atomic Energy Commission Chairman Lewis Strauss predicted in 1954 that the future would see unlimited nuclear power and an end to famine: “It is not too much to hope that our children will enjoy at home an electrical power too cheap to be measured, and that they will know the great periodic regional famines in the world only as historical facts…”
We are still waiting for the president’s utopia.
Pinkerton is much more than a modern-day Nostradamus. With his insight and the light of his experience, he offers many interesting opportunities to become ultra-rich. But his investment picture for the future seems incomplete.
He overlooks the role of the multi-trillion dollar military-industrial-security complex and the surveillance state in tomorrow’s investment landscape. Both are growing by leaps and bounds each year, with overwhelming bipartisan support, to fortify the American empire in its quest for a risk-free existence. Former Vice President Dick Cheney’s “1% Doctrine” is now orthodoxy: that every 1% risk must be preemptively attacked and destroyed.
The annual national security budget in the United States now exceeds $1 trillion, and developing more effective ways to kill human beings is a growing and global industry. Defense companies like Boeing, Northrop Grumman, Lockheed Martin, and General Dynamics are too big and important to fail. Just look at how the Nixon administration bailed out Lockheed in 1971 with a $250 million loan guarantee. Today, Lockheed’s F-35 program is expected to cost the United States more than $2 trillion. With government support and limited controls on spending on state secrets, there will never be a recession in the military-industrial-security complex.
The same is true of the surveillance state. The American empire pursues a policy of unlimited spying and data collection, both at home and abroad. Its goal is to reduce the risk of another 9/11 to zero, even if that means targeting an infinite number of “not yet guilty” targets subject to government surveillance.
Commercial data centers designed to meet the surveillance state’s thirst for data are booming, with major companies like Google, Amazon, and Facebook leading the way. By 2023, the U.S. data center construction market was estimated to over $24 billion, and is expected to reach over $47 billion by 2029. In the digital age, everyone leaves endless digital footprints that can be collected and evaluated by commercial companies for targeted advertising purposes.
Aside from Pinkerton’s neglect of these giant industries, I have only a few reservations about him. One is his prediction that the federal government will be eclipsed by the states. The former’s annual budget has exploded to more than $6 trillion, more than a fifth of the gross domestic product. The national debt has reached nearly $35 trillion and is climbing. Federal lawmakers treat a reduction in the rate of spending as if it were a budget cut. The administrative state is growing like bamboo. The Code of Federal Regulations runs to 200,000 pages, with thousands more in the works.
As Ronald Reagan once observed, “Nothing lasts longer than a temporary government program.” Our leaders have little desire to reduce the size of government and diminish their own power and celebrity.
That said, “The Secret of Directional Investing” is a must-read for those who want to see the future of money and prosperity. But wasn’t America born of nobler things, a quest for justice and a celebration of the march of the spirit? The Founding Fathers knew the fate of the 3,000 idolaters who prayed before the golden calf while Moses conversed with God on Mount Sinai, and the money changers driven from the Temple by Jesus. James Madison taught in Federalist No. 51: “Justice is the end of government. It is the end of civil society.”
I encourage Pinkerton, who has a considerable and unique talent, to consider a sequel, “The Secret of Freedom,” to complement “The Secret of Directional Investing.” Both books will shine brightly on the shelves.
Bruce Fein (X: @brucefeinesq; www.lawofficesofbrucefein.com) was an associate deputy attorney general under President Ronald Reagan and is the author of “American Empire Before the Fall.”
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