Slave rant prompts fall from grace; conservatives see red over inequality claims; superannuation funds cheer buried treasures. By Hamish McDonald.

Rebel rancher Cliven Bundy no longer right’s hero

Cliven Bundy at his ranch house in Nevada just before his “freedom of speech” fall from grace.
Credit: AFP

Premature it was a few weeks ago to note that at least one of the right-wing billionaires backing the Republican Party, Las Vegas casino tycoon Sheldon Adelson, was trying to bring American conservatism back from the “crazy” zone.  

One of the non-invitees to Adelson’s “primary” for the 2016 presidential nomination was the libertarian senator Rand Paul (named after Ayn Rand, of course), who is still immensely popular among Republican voters, according to opinion polls. Paul was one of the conservatives who leapt to the defence of a new hero of freedom, a rogue Nevada cattle rancher named Cliven Bundy. 

Bundy had spent years grazing his herd in publicly owned wilderness without paying any of the fees forfeited by most of the other 18,000 permit holders. Along the way he racked up nearly $US1 million in unpaid dues and fines. But when unarmed rangers of the federal government’s Bureau of Land Management turned up with a court order to impound Bundy’s cattle, hundreds of vigilantes, Tea Party figures and survivalists poured out of the hills, putting a protective cordon around Bundy’s ranch. Surrounded by men in camouflage gear toting semi-automatic rifles, the federal agents withdrew. 

Bundy became an instant symbol of resistance to oppressive government, feeding the media with such statements as: “I don’t recognise the United States government as even existing.” A senator, a state governor and a congressman called to express support. Commentators, such as Sean Hannity on Rupert Murdoch’s Fox News, egged him on with “How far are you willing to take this?” questions. Freedom melted away, however, when 200 troopers turned up armed with more firepower, Tasers and dogs. More cause for outrage on the right, with Hannity spluttering: “All right, maybe he owes grazing fees money. Do you surround his property with snipers and shooters, sharp shooters and Tasers and dogs and 200 agents? Is that the way to handle it?”

Unfortunately Bundy blew it a week ago in his new role as “folk hero” (as Fox News called him). Musing aloud about a drive past a public-housing estate, he suggested African-Americans were being spoiled by welfare and subsidies, and could be “better off as slaves, picking cotton and having a family life”. He then argued on CNN that his remarks were about freedom of speech: “If I say negro or black boy or slave, if those people cannot take those kind of words and not be [offended], then Martin Luther King hasn’t got his job done yet.”

Australia’s Attorney-General, George Brandis, and the claque of Fox counterparts at News Corp would no doubt agree. But in America, Hannity and Rand Paul couldn’t distance themselves from Bundy fast enough. Hannity is still arguing that the seizure of Bundy’s cattle is the issue: government out of control. Odd to think of Rupert veering to anarchism.

Seeing red over inequality claims

Untrammelled freedom to make money is part of the libertarian cause, even as income inequality deepens across the capitalist world (and many spots under state capitalism, such as China).

It will be one of the defining issues of the mid-term elections in America this November and the presidential race two years later. Barack Obama’s opening move has been a push to raise America’s miserable $8-an-hour minimum wage. Others such as economists Paul Krugman and Joseph Stiglitz are pointing out the perks of the rich. 

A surprising manifesto for this debate has been the 500-plus page tome titled Capital in the Twenty-First Century, by a hitherto little-known French professor Thomas Piketty. He upturns the notion that happy income equality and a large middle class are signs of an advanced economy. Piketty argues from a mass of data that progressive inequality is inherent in modern capitalism, and the mid-20th-century spell of a compressed income range was a result of the fiscal and political demands of World War I and the Great Depression. His remedy is a return to steep progressive taxation and taxes on capital through inheritance taxes and so on. 

Conservatives are gathering their thoughts for the fight, with commentators at The Wall Street Journal (R. Murdoch, Prop.) calling Piketty a neo-Marxist. Which perhaps he is, but the arguments need to be refuted, if they can be, rather than daubed with the red brush. However, it’s worked in the past, along with liberal doses of patriotism and religion to obscure from the white middle class they are being rooked, and rule changes to prevent or discourage the growing black, Asian and Latino populations from voting. 

Buried treasures

Australia’s superannuation funds are meanwhile cheering on the early demise of the American rich. 

According to a Washington lawyer involved in the trade, who wishes to be unnamed, some of our super funds, including those representing Victorian public servants and teachers, have been avid investors in a type of US insurance policy known as “universal life”. 

These policies were a fad some decades ago when salesmen persuaded rich clients that the heavy premiums would yield a healthy cash-in value later in life, as well as affording millions, sometimes tens of millions of dollars, in life insurance cover. The investment returns rarely matched the hype, and many policyholders found the premiums increasingly onerous as age made calls on current income. Enter a sub-breed of investment known as “viatical settlement”, whereby investors offer to pay the policyholder a lump of cash to take over the policy, pay the premiums and collect the payout when the policyholder dies. Of course, the new investor is hoping the policyholders meet an unfortunate early accident or grave illness. 

Viatical settlements had a peak in the 1990s when the AIDS epidemic brought sufferers a need to pay for expensive treatment, and offered the investors a jump on the normal actuarial odds. Now the field concentrates on the 5000 or so top-income households, offering, say, $2 million upfront for a policy worth up to $40 million. Scenario for a crime thriller here, of a crazed fund manager stalking the lush retirement haunts of Palm Springs and Florida to improve his investment yield.

This article was first published in the print edition of The Saturday Paper on May 3, 2014 as "Rebel rancher no longer right’s hero". Subscribe here.

Hamish McDonald
is The Saturday Paper’s world editor.