The Paranoid Style in American Politics

It had been around a long time before the Radical Right discovered it—and its targets have ranged from “the international bankers” to Masons, Jesuits, and munitions makers.

American politics has often been an arena for angry minds. In recent years we have seen angry minds at work mainly among extreme right-wingers, who have now demonstrated in the Goldwater movement how much political leverage can be got out of the animosities and passions of a small minority. But behind this I believe there is a style of stylemind that is far from new and that is not necessarily right-wing. I call it the paranoid style simply because no other word adequately evokes the sense of heated exaggeration, suspiciousness, and conspiratorial fantasy that I have in mind. In using the expression “paranoid style” I am not speaking in a clinical sense, but borrowing a clinical term for other purposes. I have neither the competence nor the desire to classify any figures of the past or present as certifiable lunatics. In fact, the idea of the paranoid style as a force in politics would have little contemporary relevance or historical value if it were applied only to men with profoundly disturbed minds. It is the use of paranoid modes of expression by more or less normal people that makes the phenomenon significant.

Of course this term is pejorative, and it is meant to be; the paranoid style has a greater affinity for bad causes than good. But nothing really prevents a sound program or demand from being advocated in the paranoid style. Style has more to do with the way in which ideas are believed than with the truth or falsity of their content. I am interested here in getting at our political psychology through our political rhetoric. The paranoid style is an old and recurrent phenomenon in our public life which has been frequently linked with movements of suspicious discontent.

Here is Senator McCarthy, speaking in June 1951 about the parlous situation of the United States:

How can we account for our present situation unless we believe that men high in this government are concerting to deliver us to disaster? This must be the product of a great conspiracy on a scale so immense as to dwarf any previous such venture in the history of man. A conspiracy of infamy so black that, which it is finally exposed, its principals shall be forever deserving of the maledictions of all honest men. . . . What can be made of this unbroken series of decisions and acts contributing to the strategy of defeat? They cannot be attributed to incompetence. . . . The laws of probability would dictate that part of . . . [the] decisions would serve the country’s interest.

Now turn back fifty years to a manifesto signed in 1895 by a number of leaders of the Populist party:

As early as 1865–66 a conspiracy was entered into between the gold gamblers of Europe and America. . . . For nearly thirty years these conspirators have kept the people quarreling over less important matters while they have pursued with unrelenting zeal their one central purpose. . . . Every device of treachery, every resource of statecraft, and every artifice known to the secret cabals of the international gold ring are being used to deal a blow to the prosperity of the people and the financial and commercial independence of the country.

Next, a Texas newspaper article of 1855:

 . . . It is a notorious fact that the Monarchs of Europe and the Pope of Rome are at this very moment plotting our destruction and threatening the extinction of our political, civil, and religious institutions. We have the best reasons for believing that corruption has found its way into our Executive Chamber, and that our Executive head is tainted with the infectious venom of Catholicism. . . . The Pope has recently sent his ambassador of state to this country on a secret commission, the effect of which is an extraordinary boldness of the Catholic church throughout the United States. . . . These minions of the Pope are boldly insulting our Senators; reprimanding our Statesmen; propagating the adulterous union of Church and State; abusing with foul calumny all governments but Catholic, and spewing out the bitterest execrations on all Protestantism. The Catholics in the United States receive from abroad more than $200,000 annually for the propagation of their creed. Add to this the vast revenues collected here. . . .

These quotations give the keynote of the style. In the history of the United States one find it, for example, in the anti-Masonic movement, the nativist and anti-Catholic movement, in certain spokesmen of abolitionism who regarded the United States as being in the grip of a slaveholders’ conspiracy, in many alarmists about the Mormons, in some Greenback and Populist writers who constructed a great conspiracy of international bankers, in the exposure of a munitions makers’ conspiracy of World War I, in the popular left-wing press, in the contemporary American right wing, and on both sides of the race controversy today, among White Citizens’ Councils and Black Muslims. I do not propose to try to trace the variations of the paranoid style that can be found in all these movements, but will confine myself to a few leading episodes in our past history in which the style emerged in full and archetypal splendor.

Illuminism and Masonry

I begin with a particularly revealing episode—the panic that broke out in some quarters at the end of the eighteenth century over the allegedly subversive activities of the Bavarian Illuminati. This panic was a part of the general reaction to the French Revolution. In the United States it was heightened by the response of certain men, mostly in New England and among the established clergy, to the rise of Jeffersonian democracy. Illuminism had been started in 1776 by Adam Weishaupt, a professor of law at the University of Ingolstadt. Its teachings today seem to be no more than another version of Enlightenment rationalism, spiced with the anticlerical atmosphere of eighteenth-century Bavaria. It was a somewhat naïve and utopian movement which aspired ultimately to bring the human race under the rules of reason. Its humanitarian rationalism appears to have acquired a fairly wide influence in Masonic lodges.

Americans first learned of Illuminism in 1797, from a volume published in Edinburgh (later reprinted in New York) under the title, Proofs of a Conspiracy Against All the Religions and Governments of Europe, Carried on in the Secret Meetings of Free Masons, Illuminati, and Reading Societies. Its author was a well-known Scottish scientist, John Robison, who had himself been a somewhat casual adherent of Masonry in Britain, but whose imagination had been inflamed by what he considered to be the far less innocent Masonic movement on the Continent. Robison seems to have made his work as factual as he could, but when he came to estimating the moral character and the political influence of Illuminism, he made the characteristic paranoid leap into fantasy. The association, he thought, was formed “for the express purpose of rooting out all religious establishments, and overturning all the existing governments of Europe.” It had become “one great and wicked project fermenting and working all over Europe.” And to it he attributed a central role in bringing about the French Revolution. He saw it as a libertine, anti-Christian movement, given to the corruption of women, the cultivation of sensual pleasures, and the violation of property rights. Its members had plans for making a tea that caused abortion—a secret substance that “blinds or kills when spurted in the face,” and a device that sounds like a stench bomb—a “method for filling a bedchamber with pestilential vapours.”

These notions were quick to make themselves felt in America. In May 1798, a minister of the Massachusetts Congregational establishment in Boston, Jedidiah Morse, delivered a timely sermon to the young country, which was then sharply divided between Jeffersonians and Federalists, Francophiles and Anglomen. Having read Robison, Morse was convinced of a Jacobinical plot touched off by Illuminism, and that the country should be rallied to defend itself. His warnings were heeded throughout New England wherever Federalists brooded about the rising tide of religious infidelity or Jeffersonian democracy. Timothy Dwight, the president of Yale, followed Morse’s sermon with a Fourth-of-July discourse on The Duty of Americans in the Present Crisis, in which he held forth against the Antichrist in his own glowing rhetoric. Soon the pulpits of New England were ringing with denunciations of the Illuminati, as though the country were swarming with them.

The anti-Masonic movement of the late 1820s and the 1830s took up and extended the obsession with conspiracy. At first, this movement may seem to be no more than an extension or repetition of the anti-Masonic theme sounded in the outcry against the Bavarian Illuminati. But whereas the panic of the 1790s was confined mainly to New England and linked to an ultraconservative point of view, the later anti-Masonic movement affected many parts of the northern United States, and was intimately linked with popular democracy and rural egalitarianism. Although anti-Masonry happened to be anti-Jacksonian (Jackson was a Mason), it manifested the same animus against the closure of opportunity for the common man and against aristocratic institutions that one finds in the Jacksonian crusade against the Bank of the United States.

The anti-Masonic movement was a product not merely of natural enthusiasm but also of the vicissitudes of party politics. It was joined and used by a great many men who did not fully share its original anti-Masonic feelings. It attracted the support of several reputable statemen who had only mild sympathy with its fundamental bias, but who as politicians could not afford to ignore it. Still, it was a folk movement of considerable power, and the rural enthusiasts who provided its real impetus believed in it wholeheartedly.

The Paranoid Style in ActionThe John Birch Society is attempting to suppress a television series about the United Nations by means of a mass letter-writing campaign to the sponsor, . . . The Xerox Corporation. The corporation, however, intends to go ahead with the programs. . . .

The July issue of the John Birch Society Bulletin . . . said an “avalanche of mail ought to convince them of the unwisdom of their proposed action—just as United Air Lines was persuaded to back down and take the U.N. insignia off their planes.” (A United Air Lines spokesman confirmed that the U.N. emblem was removed from its planes, following “considerable public reaction against it.”)

Birch official John Rousselot said, “We hate to see a corporation of this country promote the U.N. when we know that it is an instrument of the Soviet Communist conspiracy.”

—San Francisco Chronicle, July 31, 1964

As a secret society, Masonry was considered to be a standing conspiracy against republican government. It was held to be particularly liable to treason—for example, Aaron Burr’s famous conspiracy was alleged to have been conducted by Masons. Masonry was accused of constituting a separate system of loyalty, a separate imperium within the framework of federal and state governments, which was inconsistent with loyalty to them. Quite plausibly it was argued that the Masons had set up a jurisdiction of their own, with their own obligations and punishments, liable to enforcement even by the penalty of death. So basic was the conflict felt to be between secrecy and democracy that other, more innocent societies such as Phi Beta Kappa came under attack.

Since Masons were pledged to come to each other’s aid under circumstances of distress, and to extend fraternal indulgence at all times, it was held that the order nullified the enforcement of regular law. Masonic constables, sheriffs, juries, and judges must all be in league with Masonic criminals and fugitives. The press was believed to have been so “muzzled” by Masonic editors and proprietors that news of Masonic malfeasance could be suppressed. At a moment when almost every alleged citadel of privilege in America was under democratic assault, Masonry was attacked as a fraternity of the privileged, closing business opportunities and nearly monopolizing political offices.

Certain elements of truth and reality there may have been in these views of Masonry. What must be emphasized here, however, is the apocalyptic and absolutistic framework in which this hostility was commonly expressed. Anti-Masons were not content simply to say that secret societies were rather a bad idea. The author of the standard exposition of anti-Masonry declared that Freemasonry was “not only the most abominable but also the most dangerous institution that ever was imposed on man. . . . It may truly be said to be Hell’s master piece.”

The Jesuit Threat

Fear of a Masonic plot had hardly been quieted when the rumors arose of a Catholic plot against American values. One meets here again the same frame of mind, but a different villain. The anti-Catholic movement converged with a growing nativism, and while they were not identical, together they cut such a wide swath in American life that they were bound to embrace many moderates to whom the paranoid style, in its full glory, did not appeal. Moreover, we need not dismiss out of hand as totally parochial or mean-spirited the desire of Yankee Americans to maintain an ethnically and religiously homogeneous society nor the particular Protestant commitments to individualism and freedom that were brought into play. But the movement had a large paranoid infusion, and the most influential anti-Catholic militants certainly had a strong affinity for the paranoid style.

Two books which appeared in 1835 described the new danger to the American way of life and may be taken as expressions of the anti-Catholic mentality. One, Foreign Conspiracies against the Liberties of the United States, was from the hand of the celebrated painter and inventor of the telegraph, S.F.B. Morse.A conspiracy exists,” Morse proclaimed , and “its plans are already in operation . . . we are attacked in a vulnerable quarter which cannot be defended by our ships, our forts, or our armies.” The main source of the conspiracy Morse found in Metternich’s government: “Austria is now acting in this country. She has devised a grand scheme. She has organized a great plan for doing something here. . . . She has her Jesuit missionaries traveling through the land; she has supplied them with money, and has furnished a fountain for a regular supply.” Were the plot successful, Morse said, some scion of the House of Hapsburg would soon be installed as Emperor of the United States.

“It is an ascertained fact,” wrote another Protestant militant,

that Jesuits are prowling about all parts of the United States in every possible disguise, expressly to ascertain the advantageous situations and modes to disseminate Popery. A minister of the Gospel from Ohio has informed us that he discovered one carrying on his devices in his congregation; and he says that the western country swarms with them under the name of puppet show men, dancing masters, music teachers, peddlers of images and ornaments, barrel organ players, and similar practitioners.

Lyman Beecher, the elder of a famous family and the father of Harriet Beecher Stowe, wrote in the same year his Plea for the West, in which he considered the possibility that the Christian millennium might come in the American states. Everything depended, in his judgment, upon what influences dominated the great West, where the future of the country lay. There Protestantism was engaged in a life-or-death struggle with Catholicism. “Whatever we do, it must be done quickly. . . . ” A great tide of immigration, hostile to free institutions, was sweeping in upon the country, subsidized and sent by “the potentates of Europe,” multiplying tumult and violence, filling jails, crowding poorhouses, quadrupling taxation, and sending increasing thousands of voters to “lay their inexperienced hand upon the helm of our power.”

[1] Many anti-Masons had been fascinated by the penalties involved if Masons failed to live up to their obligations. My own favorite is the oath attributed to a royal archmason who invited “having my skull smote off and my brains exposed to the scorching rays of the sun.”

Anti-Catholicism has always been the pornography of the Puritan. Whereas the anti-Masons had envisaged drinking bouts and had entertained themselves with sado-masochistic fantasies about the actual enforcement of grisly Masonic oaths,[1] the anti-Catholics invented an immense lore about libertine priests, the confessional as an opportunity for seduction, licentious convents and monasteries. Probably the most widely read contemporary book in the United States before Uncle Tom’s Cabin was a work supposedly written by one Maria Monk, entitled Awful Disclosures, which appeared in 1836. The author, who purported to have escaped from the Hotel Dieu nunnery in Montreal after five years there as novice and nun, reported her convent life in elaborate and circumstantial detail. She reported having been told by the Mother Superior that she must “obey the priests in all things”; to her “utter astonishment and horror,” she soon found what the nature of such obedience was. Infants born of convent liaisons were baptized and then killed, she said, so that they might ascend at once to heaven. Her book, hotly attacked and defended , continued to be read and believed even after her mother gave testimony that Maria had been somewhat addled ever since childhood after she had rammed a pencil into her head. Maria died in prison in 1849, after having been arrested in a brothel as a pickpocket.

Anti-Catholicism, like anti-Masonry, mixed its fortunes with American party politics, and it became an enduring factor in American politics. The American Protective Association of the 1890s revived it with ideological variations more suitable to the times—the depression of 1893, for example, was alleged to be an international creation of the Catholics who began it by starting a run on the banks. Some spokesmen of the movement circulated a bogus encyclical attributed to Leo XIII instructing American Catholics on a certain date in 1893 to exterminate all heretics, and a great many anti-Catholics daily expected a nationwide uprising. The myth of an impending Catholic war of mutilation and extermination of heretics persisted into the twentieth century.

Why They Feel Dispossessed

If, after our historically discontinuous examples of the paranoid style, we now take the long jump to the contemporary right wing, we find some rather important differences from the nineteenth-century movements. The spokesmen of those earlier movements felt that they stood for causes and personal types that were still in possession of their country—that they were fending off threats to a still established way of life. But the modern right wing, as Daniel Bell has put it, feels dispossessed: America has been largely taken away from them and their kind, though they are determined to try to repossess it and to prevent the final destructive act of subversion. The old American virtues have already been eaten away by cosmopolitans and intellectuals; the old competitive capitalism has been gradually undermined by socialistic and communistic schemers; the old national security and independence have been destroyed by treasonous plots, having as their most powerful agents not merely outsiders and foreigners as of old but major statesmen who are at the very centers of American power. Their predecessors had discovered conspiracies; the modern radical right finds conspiracy to be betrayal from on high.

Important changes may also be traced to the effects of the mass media. The villains of the modern right are much more vivid than those of their paranoid predecessors, much better known to the public; the literature of the paranoid style is by the same token richer and more circumstantial in personal description and personal invective. For the vaguely delineated villains of the anti-Masons, for the obscure and disguised Jesuit agents, the little-known papal delegates of the anti-Catholics, for the shadowy international bankers of the monetary conspiracies, we may now substitute eminent public figures like Presidents Roosevelt, Truman, and Eisenhower, secretaries of State like Marshall, Acheson, and Dulles, Justices of the Supreme Court like Frankfurter and Warren, and the whole battery of lesser but still famous and vivid alleged conspirators headed by Alger Hiss.

Events since 1939 have given the contemporary right-wing paranoid a vast theatre for his imagination, full of rich and proliferating detail, replete with realistic cues and undeniable proofs of the validity of his suspicions. The theatre of action is now the entire world, and he can draw not only on the events of World War II, but also on those of the Korean War and the Cold War. Any historian of warfare knows it is in good part a comedy of errors and a museum of incompetence; but if for every error and every act of incompetence one can substitute an act of treason, many points of fascinating interpretation are open to the paranoid imagination. In the end, the real mystery, for one who reads the primary works of paranoid scholarship, is not how the United States has been brought to its present dangerous position but how it has managed to survive at all.

The basic elements of contemporary right-wing thought can be reduced to three: First, there has been the now-familiar sustained conspiracy, running over more than a generation, and reaching its climax in Roosevelt’s New Deal, to undermine free capitalism, to bring the economy under the direction of the federal government, and to pave the way for socialism or communism. A great many right-wingers would agree with Frank Chodorov, the author of The Income Tax: The Root of All Evil, that this campaign began with the passage of the income-tax amendment to the Constitution in 1913.

The second contention is that top government officialdom has been so infiltrated by Communists that American policy, at least since the days leading up to Pearl Harbor, has been dominated by men who were shrewdly and consistently selling out American national interests.

Finally, the country is infused with a network of Communist agents, just as in the old days it was infiltrated by Jesuit agents, so that the whole apparatus of education, religion, the press, and the mass media is engaged in a common effort to paralyze the resistance of loyal Americans.

Perhaps the most representative document of the McCarthyist phase was a long indictment of Secretary of State George C. Marshall, delivered in 1951 in the Senate by senator McCarthy, and later published in a somewhat different form. McCarthy pictured Marshall as the focal figure in a betrayal of American interests stretching in time from the strategic plans for World War II to the formulation of the Marshall Plan. Marshal was associated with practically every American failure or defeat, McCarthy insisted, and none of this was either accident or incompetence. There was a “baffling pattern” of Marshall’s interventions in the war, which always conduced to the well-being of the Kremlin. The sharp decline in America’s relative strength from 1945 to 1951 did not “just happen”; it was “brought about, step by step, by will and intention,” the consequence not of mistakes but of a treasonous conspiracy, “a conspiracy on a scale so immense as to dwarf any previous such venture in the history of man.”

Today, the mantle of McCarthy has fallen on a retired candy manufacturer, Robert H. Welch, Jr., who is less strategically placed and has a much smaller but better organized following than the Senator. A few years ago Welch proclaimed that “Communist influences are now in almost complete control of our government”—note the care and scrupulousness of that “almost.” He has offered a full scale interpretation of our recent history in which Communists figure at every turn: They started a run on American banks in 1933 that forced their closure; they contrived the recognition of the Soviet Union by the United States in the same year, just in time to save the Soviets from economic collapse; they have stirred up the fuss over segregation in the South; they have taken over the Supreme Court and made it “one of the most important agencies of Communism.”

Close attention to history wins for Mr. Welch an insight into affairs that is given to few of us. “For many reasons and after a lot of study,” he wrote some years ago, “I personally believe [John Foster] Dulles to be a Communist agent.” The job of Professor Arthur F. Burns as head of Eisenhower’s Council of Economic Advisors was “merely a cover-up for Burns’s liaison work between Eisenhower and some of his Communist bosses.” Eisenhower’s brother Milton was “actually [his] superior and boss within the Communist party.” As for Eisenhower himself, Welch characterized him, in words that have made the candy manufacturer famous, as “a dedicated, conscious agent of the Communist conspiracy”—a conclusion, he added, “based on an accumulation of detailed evidence so extensive and so palpable that it seems to put this conviction beyond any reasonable doubt.”

Emulating the Enemy

The paranoid spokesman sees the fate of conspiracy in apocalyptic terms—he traffics in the birth and death of whole worlds, whole political orders, whole systems of human values. He is always manning the barricades of civilization. He constantly lives at a turning point. Like religious millennialists he expresses the anxiety of those who are living through the last days and he is sometimes disposed to set a date fort the apocalypse. (“Time is running out,” said Welch in 1951. “Evidence is piling up on many sides and from many sources that October 1952 is the fatal month when Stalin will attack.”)

As a member of the avant-garde who is capable of perceiving the conspiracy before it is fully obvious to an as yet unaroused public, the paranoid is a militant leader. He does not see social conflict as something to be mediated and compromised, in the manner of the working politician. Since what is at stake is always a conflict between absolute good and absolute evil, what is necessary is not compromise but the will to fight things out to a finish. Since the enemy is thought of as being totally evil and totally unappeasable, he must be totally eliminated—if not from the world, at least from the theatre of operations to which the paranoid directs his attention. This demand for total triumph leads to the formulation of hopelessly unrealistic goals, and since these goals are not even remotely attainable, failure constantly heightens the paranoid’s sense of frustration. Even partial success leaves him with the same feeling of powerlessness with which he began, and this in turn only strengthens his awareness of the vast and terrifying quality of the enemy he opposes.

The enemy is clearly delineated: he is a perfect model of malice, a kind of amoral supermansinister, ubiquitous, powerful, cruel, sensual, luxury-loving. Unlike the rest of us, the enemy is not caught in the toils of the vast mechanism of history, himself a victim of his past, his desires, his limitations. He wills, indeed he manufactures, the mechanism of history, or tries to deflect the normal course of history in an evil way. He makes crises, starts runs on banks, causes depressions, manufactures disasters, and then enjoys and profits from the misery he has produced. The paranoid’s interpretation of history is distinctly personal: decisive events are not taken as part of the stream of history, but as the consequences of someone’s will. Very often the enemy is held to possess some especially effective source of power: he controls the press; he has unlimited funds; he has a new secret for influencing the mind (brainwashing); he has a special technique for seduction (the Catholic confessional).

It is hard to resist the conclusion that this enemy is on many counts the projection of the self; both the ideal and the unacceptable aspects of the self are attributed to him. The enemy may be the cosmopolitan intellectual, but the paranoid will outdo him in the apparatus of scholarship, even of pedantry. Secret organizations set up to combat secret organizations give the same flattery. The Ku Klux Klan imitated Catholicism to the point of donning priestly vestments, developing an elaborate ritual and an equally elaborate hierarchy. The John Birch Society emulates Communist cells and quasi-secret operation through “front” groups, and preaches a ruthless prosecution of the ideological war along lines very similar to those it finds in the Communist enemy.[2] Spokesmen of the various fundamentalist anti-Communist “crusades” openly express their admiration for the dedication and discipline the Communist cause calls forth.


 In his recent book, How to Win an Election, Stephen C. Shadegg cites a statement attributed to Mao Tse-tung: “Give me just two or three men in a village and I will take the village.” Shadegg comments: “ In the Goldwater campaigns of 1952 and 1958 and in all other campaigns where I have served as consultant I have followed the advice of Mao Tse-tung.” “I would suggest,” writes senator Goldwater in Why Not Victory? “that we analyze and copy the strategy of the enemy; theirs has worked and ours has not.

On the other hand, the sexual freedom often attributed to the enemy, his lack of moral inhibition, his possession of especially effective techniques for fulfilling his desires, give exponents of the paranoid style an opportunity to project and express unacknowledgeable aspects of their own psychological concerns. Catholics and Mormons—later, Negroes and Jews—have lent themselves to a preoccupation with illicit sex. Very often the fantasies of true believers reveal strong sadomasochistic outlets, vividly expressed, for example, in the delight of anti-Masons with the cruelty of Masonic punishments.

Renegades and Pedants

A special significance attaches to the figure of the renegade from the enemy cause. The anti-Masonic movement seemed at times to be the creation of ex-Masons; certainly the highest significance was attributed to their revelations, and every word they said was believed. Anti-Catholicism used the runaway nun and the apostate priest; the place of ex-Communists in the avant-garde anti-Communist movements of our time is well known. In some part, the special authority accorded the renegade derives from the obsession with secrecy so characteristics of such movements: the renegade is the man or woman who has been in the Arcanum, and brings forth with him or her the final verification of suspicions which might otherwise have been doubted by a skeptical world. But I think there is a deeper eschatological significance that attaches to the person of the renegade: in the spiritual wrestling match between good and evil which is the paranoid’s archetypal model of the world, the renegade is living proof that all the conversions are not made by the wrong side. He brings with him the promise of redemption and victory.

A final characteristic of the paranoid style is related to the quality of its pedantry. One of the impressive things about paranoid literature is the contrast between its fantasied conclusions and the almost touching concern with factuality it invariably shows. It produces heroic strivings for evidence to prove that the unbelievable is the only thing that can be believed. Of course, there are highbrow, lowbrow, and middlebrow paranoids, as there are likely to be in any political tendency. But respectable paranoid literature not only starts from certain moral commitments that can indeed be justified but also carefully and all but obsessively accumulates “evidence.” The difference between this “evidence” and that commonly employed by others is that it seems less a means of entering into normal political controversy than a means of warding off the profane intrusion of the secular political world. The paranoid seems to have little expectation of actually convincing a hostile world, but he can accumulate evidence in order to protect his cherished convictions from it.

Paranoid writing begins with certain broad defensible judgments. There was something to be said for the anti-Masons. After all, a secret society composed of influential men bound by special obligations could conceivable pose some kind of threat to the civil order in which they were suspended. There was also something to be said for the Protestant principles of individuality and freedom, as well as for the nativist desire to develop in North America a homogeneous civilization. Again, in our time an actual laxity in security allowed some Communists to find a place in governmental circles, and innumerable decisions of World War II and the Cold War could be faulted.

The higher paranoid scholarship is nothing if not coherent—in fact the paranoid mind is far more coherent than the real world. It is nothing if not scholarly in technique. McCarthy’s 96-page pamphlet, McCarthyism, contains no less than 313 footnote references, and Mr. Welch’s incredible assault on Eisenhower, The Politician, has one hundred pages of bibliography and notes. The entire right-wing movement of our time is a parade of experts, study groups, monographs, footnotes, and bibliographies. Sometimes the right-wing striving for scholarly depth and an inclusive world view has startling consequences: Mr. Welch, for example, has charged that the popularity of Arnold Toynbee’s historical work is the consequence of a plot on the part of Fabians, “Labour party bosses in England,” and various members of the Anglo-American “liberal establishment” to overshadow the much more truthful and illuminating work of Oswald Spengler.

The Double Sufferer

The paranoid style is not confined to our own country and time; it is an international phenomenon. Studying the millennial sects of Europe from the eleventh to the sixteenth century, Norman Cohn believed he found a persistent psychic complex that corresponds broadly with what I have been considering—a style made up of certain preoccupations and fantasies:

  • “the megalomaniac view of oneself as the Elect,
  • wholly good, abominably persecuted, yet
  • assured of ultimate triumph; the
  • attribution of gigantic and demonic powers to the adversary;
  • the refusal to accept the ineluctable limitations and imperfections of human existence, such as transience, dissention, conflict, fallibility whether intellectual or moral;
  • the obsession with inerrable prophecies . . . systematized misinterpretations, always gross and often grotesque.”

This glimpse across a long span of time emboldens me to make the conjecture—it is no more than that—that a mentality disposed to see the world in this way may be a persistent psychic phenomenon, more or less constantly affecting a modest minority of the population. But certain religious traditions, certain social structures and national inheritances, certain historical catastrophes or frustrations may be conducive to the release of such psychic energies, and to situations in which they can more readily be built into mass movements or political parties. In American experience ethnic and religious conflict have plainly been a major focus for militant and suspicious minds of this sort, but class conflicts also can mobilize such energies. Perhaps the central situation conducive to the diffusion of the paranoid tendency is a confrontation of opposed interests which are (or are felt to be) totally irreconcilable, and thus by nature not susceptible to the normal political processes of bargain and compromise. The situation becomes worse when the representatives of a particular social interest—perhaps because of the very unrealistic and unrealizable nature of its demands—are shut out of the political process. Having no access to political bargaining or the making of decisions, they find their original conception that the world of power is sinister and malicious fully confirmed. They see only the consequences of power—and this through distorting lenses—and have no chance to observe its actual machinery. A distinguished historian has said that one of the most valuable things about history is that it teaches us how things do not happen. It is precisely this kind of awareness that the paranoid fails to develop. He has a special resistance of his own, of course, to developing such awareness, but circumstances often deprive him of exposure to events that might enlighten him—and in any case he resists enlightenment.

We are all sufferers from history, but the paranoid is a double sufferer, since he is afflicted not only by the real world, with the rest of us, but by his fantasies as well.

was DeWitt Clinton Professor of American History at Columbia University. His book “Anti-intellectualism in American Life” was awarded the Pulitzer Prize for General Nonfiction in 1964. This essay was adapted from the Herbert Spencer Lecture, delivered at Oxford University in November 1963.

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said go before I’ll take you I want to
see it film it when you go send it to
IMAX and I’m gonna go in and experience
it like right over here at the New
Jersey Science Center it’s close enough
for me US equity futures at this hour I
guess I’m going up 77 points back up we
were just unchanged her down again been
all over the map this morning
the SP indicated up about 12 Nasdaq
rebounding a little bit this morning of
32 maybe the most important thing to
watch is that 10-year and earlier we
were down under 135 and now our 137 as
that goes up it’s kind of a fear gauge
of for Believe It or Not for the
pandemic and the coronavirus there the
more the yield goes down to all-time
lows the more you worry about global
growth slowing because of a possible
pandemic okay let’s show you how we got
here right now markets began the day
yesterday in the green socks are
positive out of the gate if you recall
at 9:30 with the dow up nearly 200
points at one time then fortunes changed
and indexes fell throughout the day with
investors nervous about the coronavirus
cases in new countries and then the cdc
came in and coming out and saying the
global spread of the illness suggesting
a pandemic was likely and that everybody
should get prepared the taliban ended
down 879 points add that to monday’s
thousand point to call it a rout now and
we’ve now seen the Dow’s biggest two-day
point drop ever with one
point seven trillion dollars in market
cap just wiped straight off the sp500
that index down now more than six
percent for the week the only two thirds
of stocks in the S&P are now in
correction territory the tech sector now
in correction territory is well down
more than ten percent in just the last
week and of course bond yields as Joe
was mentioning continuing their own
slide the 10-year note hitting an
all-time low of just one point three
percent the 30-year bond hitting an
all-time low under 1.8 percent that’s
more than a full percentage point lower
than last Friday’s close and we are
looking up at the moment but we’ll see
where things are the four Chema the most
yeah the most recent stuff is the Virgin
Galactic the the report don’t on
earnings in and where things are headed
but we’ve got to just we all have
feelings about coronavirus and you’ve
got a lot of investments all over the
world all over the world in a lot of
different areas so I got to ask you
about our guest OSes Tomas probably –
Tia founder and CEO of social capital
also chairman of Virgin Galactic but a
social capital has tentacles in a lot of
different yeah places and and this is on
everyone’s mind obviously when the
market goes down almost 2000 points in
two days yeah what do you make of it you
know I think that we are at a really
important inflection point the thing
that we don’t know quite honestly is
what is the real denominator in China
like this is the very complicated thing
that nobody knows we’ve been told it’s
in the tens of thousands but the reality
is this number could be in the hundreds
of thousands and it could be in the
millions and then you have to account
for all the people that are latent ly
carrying coronavirus not just within
China but all over the world so if you
ask me the deaths are hard to hide so
there’s been several thousand of those
but but the denominator probably tells
me that if if it’s in the hundreds of
thousands or Millions
then what we’re really dealing with is
something that’s akin to a flu right now
that’s much more of a tractable thing
because we know how to deal with flus
although what if it’s two to five times
the mortality rate as we’ve had some
people to die this is why I think it’s
really important to understand what the
denominator is hardly the denominator is
high enough it’s the flu if the
denominator is as low as it is but then
the viral spread and
viral coefficient is as fast as we’re
being told this is a really serious
problem too late right and it’s it’s
it’s not a question of too late but I
mean it’s going to it’s gonna shut down
not just how you know countries work
cities work but borders and it’s going
to be something that we haven’t really
seen in a very long time and that’s
going to be the only thing that a
responsible government should do to
react so is a responsible investor what
do you do well it’s a really complicated
question so you know the problem is I
have billions of dollars a private
company equity I can’t do anything about
it you know just kind of holding you
know billions of dollars of no wonder
you dress like that you’re you you of
billions of dollars of equity there’s
nothing I can do about that so how do I
hedge how do you hedge
how would you head you have some public
marketing I have I have a fair amount of
concentrated public market exposure and
increasingly I’m trying to find
opportunities where I can just short
broad base indices and just get some
hopefully relief and then the rest of it
is I come back and I ask myself as long
as I can re underwrite the things that I
own just remember that I’m not owning
stocks you know kind of the Buffett
thing I own companies and as long as I
can maintain some semblance of normalcy
this will take eight to nine months I
think to roll its way through the
markets and for the markets to rewrite
and probably at the tail end of this a
net buyer and right now if I can just
you know manage my own psychology for
the next five or six months by not
losing as much as I think I’m going to
lose I think it’ll feel like a it means
don’t be leveraged right

I’ve never wrong I mean this is the
thing by the way can I just say
something I I’ve been meeting a lot of
great folks the last three days here
every time I come to New York I meet
some of the best hedge funds and one of
the things that really struck out to me
this time around is how levered
everybody is I mean folks are running
five six seven eight nine turns
they’re actually running something
that’s more liquid like a you know
typical macro strategy they’re running
12 13 14 15 times levered
that song I
have never run an iota of leverage and
I’ve always felt like I’ve been on the
when I see people printing these
enormous gains and I thought to myself
why am I being so conservative but in
moments like this I feel really really
cost math you’re the first person that’s
kind of said that on this set that there
are a lot of hedge funds that are super
levered up out there
and that caught you
off guard that to me sounds like a
potential problem when you see activity
like we’ve seen the last couple of days
I mean you know that this is a much
bigger problem because I think just the
hedge fund industry has a completely you
know misaligned upside down business
model so they try to have very very
small exposures but then they lever the
whole thing up to make the whole thing
work they’re not necessarily hedged to
begin with there’s a ton of correlation
and when things like this happen and
everything rewrites and you’re you know
running five six seven eight times then
the selling gets exacerbated so the
thing that we haven’t seen is what if
that happens because I think it’s fair
to say that you can oh you’ll go risk
off and people will take money out of
the market that’ll represent you know
the first maybe eight hundred points in
the Dow or the first thousand points in
the Dow but then if this thing moves
another two or three thousand points
it’s just forced sellers
okay let’s I
want talk space because it’s so exciting
by the way I see space we Eddie news the
President Trump is going to hold a news
conference about about coronavirus at
6:00 p.m. this evening I did ask him
about that great for it was a so glimmer
in our eyes in Davos and that was my
first question that’s a man I know I’ve
been worried and he said Larry coming
about to say he’s not worried obviously
the CDC has a very different view of
that but well a lot of people get
focused on what the president has to say
so choo-choo moth you’ve taken companies
from you know again a glimmer in
someone’s eyes all the way to where
they’re their major companies so you
know about how things get valued is
space ahead of it as is verging ahead of
itself if you’ve been surprised at
what’s happened based on the
fundamentals and where the market cap is
right now is it a story stock in your
view well can I take a step back and
actually just give you the set up so and
I think this set up not it doesn’t just
apply to virgin but it also applies to
Tesla and those two things are actually
the most similar stories and the set up
goes along the following lines first
let’s look at the fixed income markets
for the last ten years
everything that is look like a nail has
been dealt with the following hammer
which is print money cut rates you know
the Patriots when the Superbowl print
money cut rates Trump tweets print money
cut rates coronavirus print money cut
rates and while that’s happened rates
have gone to zero and there’s trillions
of excess capacity just sloshing around
in the fixed income side then on the
equity side the number of companies you
can invest in has shrank by 1/3
there’s really no growth outside of
multiple expansion and there’s no growth
outside of buybacks
so everybody crowds into the 5
technology companies right the fang
stocks which represent 20% of the market
cap of the S&P so when you put those two
things together there’s a set up where
there’s no real growth there’s no unique
stories and there’s nothing that can
give you long term outlook so then when
a company comes along that has a unique
narrative and is trying to do something
that is differentiated high margin and
could theoretically grow for 10 years
where there’s an enormous amount of
consumer demand these things get
repriced in ways that are
non-traditional sounds to me like you’re
saying yes it’s a story stock but that
doesn’t mean that it’s not gonna turn
into something huge I I really believe
in virgin I mean I didn’t invest the
amount of money that I did or put myself
on the line to do this deal because I
did the ones that first like of it’s not
gonna be June anymore right well the the
goal is to fly Richard on a commercial
flight this year this year
yeah we’re no longer do yeah I think the
point is that you know setting an
arbitrary date for something like
spaceflight is not the right thing to do
I think you want to move forward in a
plan not move backwards from a date and
give that team who are you know the best
scientists from NASA JPL gives them the
chance and the opportunity to just build
an exceptionally beautiful experience
the thing for you and you just said it
is we want you to not say you want to be
the millionth customer that you want to
be the ten thousandth customer or the
thousandth customer did you say Sorkin
what you said ten thousands of customers
I said a multiple of lata no over 8,000
because you said we think that we said
yeah okay so you’re the hey by the way
guys like and what George suggested is
they’re making amazing progress like you
know working through the FAA working
through the technical capabilities
flying the machines back down to
New Mexico and then on top of that all
this demand keeps piling up 124 percent
increase in the number of people that
want to buy tickets we’ve now started to
accept pre reservations or if those
8,000 people just those 8,000 people
doesn’t seem like a lot but when you
think that the price could be around 300
that’s 2.4 billion of pipeline a real
quick question is there an insurance
program ya know for individuals I
believe there will be yeah so if
something tragic were to happen do you
know what the payout would be relative
to a regular airliner and I just curious
because I think that’s actually I mean I
don’t know what people think about it
like that I don’t know but I do know
that there will be a really robust
insurance very quickly Mike Santoli
brings up a good question to just point
out that when you bought the into the
SPAC it was at half the valuation of
like one and a half billion now it’s a
lot harder did you take Richard Branson
to the cleaners or is this current
valuation overdone or did things just
change that drastically no neither I
think that I think Richard and I found a
way for us to do a deal we give to
remember like you know we put 800
million dollars into the business I mean
between secondary and primary so you
know there aren’t a lot of people that
can are walking around with 800 million
dollars burning a hole in their pocket
so we found a fair valuation for him and
for me I think the the other thing
though Becky that happened is when you
take these things that I just talked
about you know the dearth of
opportunities and the fact that there’s
so much money on the sidelines and then
apply it to a unique story I think what
happened in the fall was people finally
woke up to Tesla and then people started
to say what else
Kim looks very similar to this I mean
you have to remember you people missed
out on a 75 X on Tesla over the last
decade I didn’t I was a proponent of the
Tesla converts I’ve been shredded on
Twitter for years and years being a
supporter of Elon in that company we
turned out to be right the shorts turned
out to be wrong and I feel just as
emotionally invested and intellectually
invested in virgin Leon what do you say
to like the 50 million plus people that
believe that if you read the policies
and take the label of socialism aside he
really looks more like a social democrat
that’s akin to a politician in the noir
country’s than he does to you know Fidel
Castro 2.0 I don’t know that’s not how
Bernie Sanders sounds to me my main
hang-up has been all along the the
constant attacking of wealthy people
the villainizing of the billionaire
class now I luckily got into the
billionaire class but I’m one of these
guys I’m gonna give it all the way I
don’t care much about money okay I don’t
I don’t get it you know I look at a Mike
Bloomberg the way he’s treated in these
debates whether he’s attacked Mike
Bloomberg new unemployment he was lost
out in a power struggle with linguas his
mid-30s he had this vision of building a
machine he built a ubiquitous machine
that you need if you’re in the
investment business he’s built the 60
billion dollar at worth he gave away
nine billion dollars to charity on his
own well before he became a PO you know
and involved in a big political way he
did a fabulous job as mayor of New York
okay in the biggest city in the world
and they’re attacking him and he had a
great line in the last night last night
where he said I’m the only guy in this
platform that built the business and he
oh they all looked at each other
blank Bernie more Bernie Sanders is not
worth his life EE and I just think at
the end of the day look i-i’ve been
equally blessed as you so I’m in the
same fortunate position urine but at the
end of the day if the worst thing that
happens is people name call us a little
bit and call us billionaires and detach
that’s not such a it’s not the worst
thing in the world if it allows us to
wake up to the reality that a lot of
people haven’t been able to participate
in what has really been you know an
equity market expansion where you know
folks like you and I who can be you know
long equities in a massive way levered
up you know access to certain products
can do well to a degree that everybody
else can it’s so it’s got people let’s
just acknowledge that that’s happened
and you know it’s it’s it’s it’s not an
easy it goes beyond it goes beyond that
it goes beyond that I believe in the
progressive income tax structure I
believe rich people should pay more okay
what we have to do as a nation is agree
upon what to the maximum marginal tax
rate be on wealthy people that will
define the revenue yield to the
government and we have to saw
the government to that revenue the yield
now I’m prepared to work six months a
year for the government the six months
of myself that’s a fifty percent
marginal tax rate unfortunately
depending on what state you live in you
already passed there between state and
federal income taxes and as it gets to
be confessor Kotori there’s a great
comment that I read recently by Thomas
Sowell he said since this is an era when
many people are concerned about fairness
and social justice
what is your fair share of what someone
else has worked for okay I’m willing to
give pay a 50% mark okay I have no
problem with that
okay I just think that the dialogue is
destructive it’s not inclusive so I give
you a perfect example I spoke at the
delivering alpha conferences number of
months ago nothing whatsoever was said
about politics the moderator Scott
Wapner the question after I gave my
formal presentation he said what do I
think the marker would do if the
Elizabeth Warren was elected president
and I said who go down 25% I think you
had a different view I’ve heard you were
previously okay and the next day she
tweets Leon I’m only looking for 2% give
others a chance of the American dream
she has no clue about anything about me
okay I’ve given away 700 million dollars
in less three years to charity that’s
why Rick it let me finish please if I
may I yeah I said firing kids to college
in Newark New Jersey I pay their their
tuition okay
and basically I decide to take the high
road okay Michelle Obama said when they
go low we go high I said they’re rather
well written letter very respectful very
conciliatory with a closing paragraph
that always has to work together deal
with the issues but there are issues I
don’t deny that there are issues my
approach to resolving the issues is to
education and hopefully faster economic
growth what does she do she puts out a
you know excuse me common
insider trader and own stock in navien
very constructive The Wall Street
Journal wrote an editorial page coming
that day she said that said mr. Koopman
won the case what is Sheik accusing them
them but it was nothing constructive she
was a politician in the worst sense of
the word
okay and that we need people that see
the issues I like the fact that certain
Mike Bloomberg was a Republican and
certain respects as a Democrat these
voting issues okay we have to avoid the
labels we have to work together in a
cooperative manner and all this income
differentiation it’s been really the
result of monetary policy response but I
want to add one other piece to it and
I’ll speak not for you but but I’ll add
another element to this which is
assuming that a Bernie Sanders or an
Elizabeth Warren were put into office
and and and I know that you’re you’re
okay with maybe some of the the
criticism that the vocal criticism that
they have about built the billionaire
class but the question is from a policy
perspective are you okay or encouraging
of that policy and to the extent that
you can appoint the head of the
Department of Justice and and say you
know please go look at these individuals
if you could say you know if you can
appoint the head of the SEC who is going
to maybe look into various companies in
a more aggressive way I’m not saying
they shouldn’t I’m just I’m just raising
the issues even if you have a completely
divided Congress how you see this
playing itself out if it doesn’t matter who gets elected
in my opinion it does I I have sort of
generally lost faith in the power and
the impact of the presidency in domestic
policy for years it is generally been
the case that the President of the
United States is given one hall pass to
do one meaningful piece of legislation
in the first two years of their term at
which point the American population
either flips the house or flips the
Senate and create stasis and it has
happened relatively predictably now and
I think that it will continue to happen
and so the question is what do we think
is the most likely thing to happen when
Trump came into office the only thing
that they were able to get done in which
Republicans were able to corral the
wagons was tax cuts and tax change but
everything else basically just came to a
grinding halt Obama was the same thing I
don’t agree with that I think that the
wouldn’t Trump I’m not a Trump fan okay
but I believe the man deserves
a certain amount of credit for what was
going on you know I don’t like his style
and so at the end of the day you have to
decide you vote your values you vote
your pocketbook I’m gonna stage in my
life where I want to vote my values my
values tell me that it is wrong to call
Mitt Romney a jackass it is wrong to
tell reptillus and he’s dumb as a rock
it’s wrong to denigrate John McCain who
was a true war hero it’s wrong basically
to say John Dingell is looking up and
not down even though I had totally
different political views to him okay
but the president deserves credit okay
when he came in it was like they took
the foot off to throw the economy the
economy and the stock market is at
record high unemployment for the
minorities is a record low overall
employment economy is at record high
we’ve opened up a long overdue
constructive dialogue and trade with
China we focus attention or illegal
immigration all this is good stuff the
problem with it is his deportment and I
analogize him to Ronald Reagan Ronald
Reagan was very beloved president okay
when Ronald Reagan ran for office he
said I had a three-prong program prong
one get the government off the backs of
people and I do that reducing taxes and
regulations you know for Trump you said
I’m going to restore the lost prestige
United States after the Carter years and
I do that by rebuilding our defense
ditto for Trump the crux of the matter
is even if you Softsoap Bernie Sanders
policies and say it’s a Nordic style
democratic socialism it would still
reverse a lot of these positive things
that has happened it’s that simple 60
trillion degree New Deal or 50 trillion
dollars on Medicare for all is not just
having a conversation about non that has
not dissipated a lot of young people
talking about we don’t need about a
gridlock in government we don’t
understand economics anymore to not
understand the capitalism got us where
we are so you can have these great
high-minded Nordic social democratic
conversations but it’s a dangerous place
you’re trying to take
you say we can’t get there so just have
the conversation but why not acknowledge
that it’s capitalism and it’s free more
time somebody taught us where we are
exact we’re a lot to have a diversity of
opinions okay that’s an entire cohort of
young people you’ve got Bernie Sanders
leading the pack in the Democratic field
and that is a problem for Democrats my
my that’s okay that he’s going to get
the nomination that’s fine I think you
dig Doug Doug or I take a lot of energy
in learning about what’s happening I
take a lot of energy reframe is stuck
with Bernie versus Trump that could be
the end result of all this happen let me
do this we weren’t gonna talk about it
basically when Bob first got the job
people thought of him dare I say as a
suit they did not think of him as some
kind of creative genius they thought of
him as a business person so to some
degree che Peck has that same kind of
reputation how important do you think it
is for a CEO of a media company or media
entertainment company in this day and
age to be both a the the numbers
business guy if you will and also a sort
of left-brain right-brain situation
well what’s particularly interesting in
this transition is Bob Iger saying he’s
going to spend the next year and a half
or however long it is being an executive
chairman ‘those focused mainly on
creative because as you say he came in
as not as the creative person he came in
as a business suit so to speak in the in
the Hollywood jargon I think Bob Meyer
has great taste he has great great
fingertip feel you know for both
television and stars but he’s not one of
these Hollywood people who is known as
let me be the creative product person so
it’ll be interesting to see that he
decided to cast himself in that role for
the next year and a half all right
samatha you’re making faces what are you
thinking I mean Bezos has this term
called narrative fallacy which is after
something works you look backwards and
you kind of
invent whatever you want to say to make
yourself seem amazing you know that’s a
business that I think frankly more than
anything else has proved the value of
really good M&A by using the highly
levered security that’s what they’ve
done because when you look at Pixar
Pixar was moderately successful
the stock was just kind of flat for
three years once they tagged Marvel then
it was a game changer and so that single
acquisition was I think the
transformational event and so in my mind
what it proves was the value of M&A and
so if you have a balance sheet like
Disney I would kind of think why not put
somebody who has an eye more towards a
transactional impetus than an
operational focus and so you have to get
you give him credit for for I mean you
got people set us way too much to pay
for Pixar I mean you have to give Agri
credit for doing the M&A deals it’s an
incredibly successful in the M&A guy and
now wants everyone bows to but even
Spielberg and I think Britain betrays
what he’s really good at but that’s
brilliant but if the new guy is an
Operations guy you’ve built up this huge
company now you need somebody who knows
how to run it well well I don’t say next
step or you think it’s no I think Disney
isn’t he is it’s such an excellent
exceptional example of what an old-line
industry company needs to do which is
you need to find where the puck is going
and then aggressively acquire it not do
it organically
you can’t do it organically it’s not
possible even Facebook can’t do it
organically they need to acquire so
facebook can’t do it if Google can’t do
it and their requirement why do you and
if you listen to the words of Bob Iger
yesterday he said look we have now all
of our assets in place in fact I thought
the suggestion that he was making was
definitely though a difficulty the
domore M&A know the difficulty is now
what they’re finding and this was
Netflix that’s going to do this is
Netflix has transformed the court
cutting streaming business into a
consumer surplus business it’s going to
basically take margins to zero and as
they do that and as they fight for
subscribers the only way to survive for
somebody like Disney is to acquire and
to bolt on acquisitions over and over
and over again so I think you probably
need someone who has the wherewithal the
risk tolerance and the vision to take
that risk
this our tamale Hypatia Virgin Galactic
chairman and social capital CEO got a
couple quick questions for you one this
was a SPAC that you did do you believe
and we talked about this used to talk
about this as being the IPO 22.0 yeah do
you think this is actually changing the
game in terms of how a company to grow
publicly yeah completely I think that
what we showed was that there’s a lot of
high-growth companies in Silicon Valley
and increasingly as well in Europe and
in China where this is actually a much
better way to go public it’s better than
the traditional IPO and it’s better than
a direct listing even though it looks
like mr. Branson may have given you a
lot for this I think that what you’re
gonna see is like back to you the price
action right has been nothing but
positive like what you don’t want to
have happen is a complete miss pricing
on the front end where people are locked
up volatility moves and the people that
make the money are the people that
entered in at the point of the IPO
because of relationship with ranks and
otherwise we unlocked
everybody from day one and we allowed
everybody to participate up to you know
42 bucks a share wherever it went to um
let me ask a couple other questions we
you’ve talked about Tesla briefly but
not really which is how high do you
think you can go since I know you’re
long yeah I mean I you know I bought
these converts a long time ago I was it
was kind of like my big picot zone you
know three years ago
I really believe in this business
because what they’re now moving into is
beyond cars and transportation but
sustainability and I think that you know
strip away whether you believe in
climate change or not it doesn’t matter
what they offer is a set of products
that I think will be increasingly in
demand how much are your convertibles
worth what’s the stake you have right
now good it’s a large number are you
surprised to see the stock run so
so fast this year yeah you know that’s
why I actually started to put together a
framework of like what is actually
happening and this is what I said before
with rates at zero with trillions of
dollars of printed money with no
investable equities companies that are
unique in and of one Tesla Virgin
Galactic are going to have a bid and
then if you do something that really
captures consumer imagination retail is
now going to be a huge part of it ESG
rila marketing it’s a complete fraud
complete fraud it’s so ridiculous
governance has been a
that’s useful but you know this idea
that you’re gonna get a stamp that says
oh listen like you know my supplier you
know I’ve offset their carbon credits
and now I understand my AM it’s a joke
it’s jargon and I think what people are
doing right now is using it as a way to
you know for example like if you can
paint yourself as ESG in Europe you can
essentially borrow money from the ECB at
negative rates I’m gonna come over but
but I I personally believe in climate
change I know we need to do something
and so the problem with the SG is it’s
gonna take years for this over this
alone you hear JP Morgan yesterday says
no they’re not gonna finance fossil
fuels or you hear at Bastion at Delta
say he’s gonna spend 100 million dollars
of real money by the way effectively
buying carbon offsets and investing in
new biofuels every year you say two
JP Morgan by saying what they said will
be able to borrow billions of dollars
from the ECB at negative rates you think
that’s what that is
it’s obviously what it is it doesn’t
have to work they don’t need to do
anything they are now getting free money
from Europe and basically being able to
say this and you don’t think they would
get that money otherwise no cuz Europe
basically has this condition where you
can issue green bonds and you have all
of this you know
checks and balances at the– so that’s
one thing okay it’s going to be very
important for you to really be able to
diligence the supply chain all the way
down to the supplier and the supplier
supply Microsoft is very large in for
example these are these are useful
statements it’s great marketing but
again it’s a lot of sizzle no steak I
think that what we need to do is invest
in actual companies that can go and
count right and can go and you know
legitimize the actual impact that
companies have so that you can do the
right amount of carbon offsets and then
you have to have a legitimate exchange
where you can actually trade them you
really believe in climate change you got
to do some hard work now by the way
Virgin Galactic is gonna be throwing up
a lot of carbon do you buy offsets
collective yeah we have a plan to sort
of get to what you do why if it’s
important he believe he just said he
believes it the other stuff was great
I’d need a cigarette in fact
after that it was so good for me but God
tell me how crypto does that ever become
a an actual means of transacting yeah it
does still everything I said crypto am I
allowed to say crypto I hope I’m allowed
to say crypto can I bring it up I would
really like Bloomberg to take this
article that I wrote for them into 2013
out of their pay wall but basically you
know my view at the time which I’ve held
since today haven’t changed is that
everybody should problem have 1% of
their assets in Bitcoin specifically I
still believe that today and I think it
is just a fantastic hedge so if you go
ack to the conversation this morning
when you see the amount of leverage the
financial industry is running and you
think about all these dislocations and
all these exhaustion as things that are
happening that you can’t predict there’s
a lot of risk to the downside and it
would be great that an an average
individual citizen of any country in the
world has an uncorrelated hedge and I’ve
said this repeatedly at nauseam on the
show every financial instrument is
correlated but money but except bit but
Jomon uncorrelated hedge it that Warren
Buffett says has zero value 0 in here
III unless someone pays more I think
he’s an exceptional person I’ve learned
an enormous amount both from afar and
the few interactions I’ve had with him
he is completely wrong and operated on
student the prices have gone up during
this career most a few issued Haven went
down like gold if it was really digital
gold I think that you have to look more
at volumes these are not necessarily
strategies meaning you don’t you don’t
want all the digital gold no you didn’t
say that
no he didn’t that’s that’s that’s the
people say I don’t think you buy I don’t
think when you know you wake up and you
see a coronavirus care in the Dow down
mm you should not be going in and buying
Bitcoin that is an idiotic strategy I
think a reasonable strategy is to say
one percent of my net worth should be in
something that is completely
uncorrelated to the world and how the
world works you quietly and quick you
know over some number at a time
accumulate a position and then you just
never look at it again and hope that
that insurance under the mattress never
has to come due right but if it does it
will protect you because then that thing
will be hundreds of thousands or million
dollars a coin okay and when we get we
got to go but Fang stocks do you like
them or hate them
I’m a net seller you’re a net seller of
tech companies other than Amazon because
I think Facebook gets regulated I think
Google will have to go through a bunch
of divestitures to avoid regulation I
think Netflix has turned into a consumer
surplus business and their their
viability to cash flow is de minimis and
Amazon just keeps growing by 25% every
year like clockwork it’s an incredible
incredible business okay
Thank You Tomas appreciate that thanks


Seniors disrespecting the younger generation

Boris Johnson and the Coming Trump Victory in 2020

In the postindustrial wasteland, the working class embraced an old Etonian mouthing about unleashed British potential.

Donald Trump, in his telling, could have shot somebody on Fifth Avenue and won. Boris Johnson could mislead the queen. He could break his promise to get Britain out of Europe by Oct. 31. He could lie about Turks invading Britain and the cost of European Union membership. He could make up stories about building 40 new hospitals. He could double down on the phantom $460 million a week that Brexit would deliver to the National Health Service — and still win a landslide Tory electoral victory not seen since Margaret Thatcher’s triumph in 1987.

The British, or at least the English, did not care. Truth is so 20th century. They wanted Brexit done; and, formally speaking, Johnson will now take Britain out of Europe by Jan. 31, 2020, even if all the tough decisions on relations with the union will remain. Johnson was lucky. In the pathetic, emetic Jeremy Corbyn, the soon-to-depart Labour Party leader, he faced perhaps the worst opposition candidate ever. In the Tory press, he had a ferocious friend prepared to overlook every failing. In Brexit-weary British subjects, whiplashed since the 2016 referendum, he had the perfect receptacle for his “get Brexit done.”

Johnson was also skillful, blunting Nigel Farage’s far-right Brexit Party, which stood down in many seats, took a lot of Labour votes in the seats where it did run, and ended up with nothing. The British working classconcentrated in the Midlands and the North, abandoned Labour and Corbyn’s socialism for the Tories and Johnson’s nationalism.

In the depressed provinces of institutionalized precariousness, workers embraced an old Etonian mouthing about unleashed British potential. Not a million miles from blue-collar heartland Democrats migrating to Trump the millionaire and America First demagogy.

That’s not the only parallel with American politics less than 11 months from the election. Johnson concentrated all the Brexit votes. By contrast, the pro-Remain vote was split between Corbyn’s internally divided Labour Party, the hapless Liberal Democrats, and the Scottish National Party. For anybody contemplating the divisions of the Democratic Party as compared with the Trump movement’s fanatical singleness of purpose, now reinforced by the impeachment proceedings, this can only be worrying.

The clear rejection of Labour’s big-government socialism also looks ominous for Democrats who believe the party can lurch left and win. The British working class did not buy nationalized railways, electricity distribution and water utilities when they could stick it to some faceless bureaucrat in Brussels and — in that phrase as immortal as it is meaningless — take back their country.

It’s a whole new world. To win, liberals have to touch people’s emotions rather than give earnest lessons. They have to cease being arid. They have to refresh and connect. It’s not easy.

Facebook reaches about one-third of humanity. It is more powerful than any political party — and it’s full of untruths, bigotry and nonsense. As Sacha Baron Cohen, the British actor, said last month of the social media behemoths: “The truth is that these companies won’t fundamentally change because their entire business model relies on generating more engagement, and nothing generates more engagement than lies, fear and outrage.”

That’s the story of Brexit, a national tragedy. That’s the story of Johnson, the man of no convictions. That’s the story of Trump, who makes puppets of people through manipulation of outrage and disregard for truth. That’s the story of our times. Johnson gets and fits those times better than most. He’s a natural.

“Brexit and Trump were inextricably linked in 2016, and they are inextricably linked today,” Steve Bannon told me. “Johnson foreshadows a big Trump win. Working-class people are tired of their ‘betters’ in New York, London, Brussels telling them how to live and what to do. Corbyn the socialist program, not Corbyn the man, got crushed. If Democrats don’t take the lesson, Trump is headed for a Reagan-like ’84 victory.”

I still think Trump can be beaten, but not from way out left and not without recognition that, as Hugo Dixon, a leader of the now defeated fight for a second British referendum, put it: “There is a crisis of liberalism because we have not found a way to connect to the lives of people in the small towns of the postindustrial wasteland whose traditional culture has been torn away.”

Johnson, even with his 80-seat majority, has problems. His victory reconciled the irreconcilable.

  • His moneyed coterie wants to turn Britain into free-market Singapore on the Thames. His new
  • working-class constituency wants rule-Britannia greatness combined with state-funded support. That’s a delicate balancing act. The breakup of Britain has become more likely. The strong Scottish National Party showing portends a possible second Scottish referendum on independence.

This time I would bet on the Scots bidding farewell to little England. And then there’s the small matter of what Brexit actually means. Johnson will need all his luck with that.

As my readers know, I am a passionate European patriot who sees the union as the greatest achievement of the second half of the 20th century, and Britain’s exit as an appalling act of self-harm. But I also believe in democracy. Johnson took the decision back to the people and won. His victory must be respected. The fight for freedom, pluralism, the rule of law, human rights, a free press, independent judiciaries, breathable air, peace, decency and humanity continues — and has only become more critical now that Britain has marginalized itself irreversibly in a fit of nationalist delusion.

Trump calls for unity, stands firm on wall, leaves Socialist Dems on defensive at State of Union

An economic miracle is taking place in the United States — and the only thing that can stop it are foolish wars, politics or ridiculous partisan investigations,” Trump said, in an apparent reference to Democratic congressional probes of his administration and possibly to Special Counsel Robert Mueller’s Russia investigation. “If there is going to be peace and legislation, there cannot be war and investigation. It just doesn’t work that way.”

At the same time, the president did not back down from his insistence that Congress fund a border wall, which was at the center of a 35-day government shutdown that ended only a few weeks ago and could fuel another shutdown on Feb. 15. Tolerance for illegal immigration, Trump said, is “not compassionate,” but “cruel.” “Simply put, walls work and walls save lives,” Trump said. “So let’s work together, compromise and reach a deal that will truly make America safe.” However, top Democrats signaled that Trump’s State of the Union address did little to convince them that a legislative compromise to construct his proposed border wall is possible.

Read: Trump’s State of the Union speech

TRUMP AND AOC FEELING ‘SOCIAL’: President Trump vowed during his State of the Union address on Tuesday that “America will never be a socialist country,” in an apparent rebuke to self-described Democratic socialist Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders that drew loud cheers and a standing ovation from Republicans in the House chamber — as well as supportive applause from House Speaker Nancy Pelosi … In response, after the speech, Ocasio-Cortez told Fox News: “I thought it was great. I think he’s scared.”

The progressive firebrand pointedly did not applaud as Trump condemned human trafficking and illegal immigration in his address. In an interview later Tuesday night, Ocasio-Cortez said she was asking herself, “Is this a campaign stop or is this a State of the Union?” She is set to unveil a massive “Green New Deal” with Massachusetts Democratic Sen. Ed Markey next week.

Peggy Noonan: AOC had ‘rare bad night’ – and the rookie lawmaker responds