A Rich Life

The Old Ideas on Saving & Investing Don't Work -- Here's What Does

Buy-and-Hold Goon to Rob: “We Already Know How Stock Investing Works. It Really Is No Mystery.” Rob’s Response: “If We Already Knew Everything That We Will Ever Know About Stock Investing, We Would Not Be Handing Out New Ph.D.’s Every Year.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

“There are no two sides when it comes to learning how stock investing works in the real world.”

We already know how it works. It really is no mystery.

If you were confident in what you think you know, we never would have seen a death threat.

If we already knew everything that we will ever know about stock investing, we would not be handing out new Ph.D.’s every year. If we already knew everything that we will ever know about stock investing, there would be no journals publishing new peer-reviewed research. If we already knew everything that we will ever know about stock investing, investing discussion boards would not permit new posts — they would just advise any interested readers to read the posts put up until the day when every last thing about the subject became known.

You are kidding yourself. We don’t know it all today and we never will. Discussion boards are for learning. And, following the next price crash, we are going to unite as a nation and have you Goons sent to prison so that they can be used for that purpose once again.

My sincere take.

Rob

“We Are All in This Together. I Can’t Lose Without You Losing Too. You Can’t Win Without Me Winning Too. There Are No Two Sides When It Comes to Learning How Stock Investing Works in the Real World.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

So, if a story comes out in The New York Times, giving Wade Pfau credit, but you get no recognition whatsoever and nothing ever happens to the goons, you would be okay with that.

I would be thrilled.

The only issue I have re you Goons is that I want the American people to overcome you. If there is a story in the New York Times giving Wade credit for Valuation-Informed Indexing, then there is a story in the New York Times on Valuation-Informed Indexing and we have overcome you. That’s victory for all of us.

If we all win, we all win. I’m one of us, you know? So, if we all win, I win. I can live with that.

The only way you Goons can win is if we all lose. Which would be unfortunate for you because, if we all lose, you lose.
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If our economic system collapses, we all lose. You Goons will probably be jumping up and down about that one because it will mean that I lose. Your hate blinds you to the fact that it means that you lose too.

We are all in this together, Anonymous. I can’t lose without you losing too. You can’t win without me winning too. There are no two sides when it comes to learning how stock investing works in the real world.

Fight harder, team-mate!

Rob

“There Is Only So Far That We Can Go Until the Story Has Been Written Up on the Front Page of the New York Times. People Are Afraid to Have Their Careers Destroyed. People Are Afraid to Have You Goons Come After Them. People Feel Funny About Noting That the Biggest Names in the Field Are Involved in a Massive Act of Financial Fraud.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Is Bengen, Kitces or a Pfau holding you back from posting in their comments section? Have they made death threats or job threats? What is holding you back from having this conversation with them that you seem to desperately want?

I’ve had conversations with all three of them, Anonymous. Some of those conversations were highly productive. I have reported on many of them at the blog here.

I certainly don’t rule out having additional conversations with them. I expect that I will. Certainly in the days following the next crash. And probably at times in the days prior to the crash.

But there is only so far that we can go until the story has been written up on the front page of the New York Times. People are afraid to have their careers destroyed. People are afraid to have you Goons come after them. People feel funny about noting that the biggest names in the field are involved in a massive act of financial fraud. The ordinary thing is to seek the support of the biggest names in the field because those people can help one advance one’s own career. We are in a weird situation where the biggest names in the field are involved in a massive act of financial fraud. No?

It’s all going to come out in time. Can it come out now? That’s the question. If there is something that I can say that will help get us all to a better place, I obviously want to say that thing. But I have said a lot of things at a lot of places already. I think it might be more helpful if some others got involved.

Are you willing to come out with a clear statement in OPPOSITION to the massive act of financial fraud? That would help.

Rob

“Anytime That Anyone Writes Honestly About What the Last 36 Years of Peer-Reviewed Research Teaches Us All About How Stock Investing Works, It Benefits Each and Every One of Us Who Is Trying to Do the Same.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Yes, I get that you are now 100% fixated on punishing me, rather than pursuing your own goals. If Wade’s paper gets written up in the New York Times, he gets all the glory and rewards. The first step is getting recognized experts like Bengen to acknowledge that he was the first. And that step is checked off.

Of course, Wade could wave his hands and say “Shucks no, all this glory belongs to Rob Bennett. He’s the real brains behind any CAPE-based timing strategy.” Yes, that’s the ticket. That’s what will happen.

Or you could take two minutes right now to set Bengen straight. Nope, you said that’s not an option.

Anytime that anyone writes honestly about what the last 36 years of peer-reviewed research teaches us all about how stock investing works, it benefits each and every one of us who is trying to do the same. There is no limit on the credit that can be handed out. Millions of investors need access to accurate information. Thousands of investment advisers want to give it to them. The thing that is standing in their way is a Wall of Ignorance. People cannot believe the realities — that we now know of a way to invest in stocks that is far less risky and that allows people to retire far earlier in life — because they just sound too good to be true. Anyone who does anything to knock down that wall is helping all of us in a big way.

Say that Wade does as you say. I am not saying that I think he would — I do not. But just say for purposes of discussion that he did. That would be an absolute boon for me. If the study that Wade and I prepared gets publicized — regardless of who gets the credit for it — it instantly becomes easier to tell the truth about stock investing at hundreds of different sites. So all of my stuff — I’ve developed a lot of it over the years — gets out. How does that hurt me?

You always talk as if the key to getting credit is being smarter than other people. That’s not the reality here. Most Buy-and-Holders possess more than enough intellectual capacity to do everything that I have done. So why am I 15 years ahead of most Buy-and-Holders? They are not willing to stand up to the crowd. So they play dumb. It’s not that they ARE dumb, it’s that they play dumb because they want to be popular at a time when the key to being popular is encouraging people’s Buy-and-Hold fantasies. I haven’t been playing dumb for 15 years now. So I have a mountain of material with my name on it that is real and research-based. Anything that helps me get that material out — and anything that breaks down the Wall of Ignorance does that — helps me.

I cannot lose, Anonymous. I placed myself on the side of the American people. The only way that I lose is if the American people lose. And, if the American people lose, we all go down. Getting credit for my investing ideas will be the least of my concerns in that event. I lose if the entire economic system goes down. I have taken a bet that we are going to pull through this thing. But, if we pull through, there is no way that I can lose. I have too much material. It is too good (not because I am so smart, because Shiller really did achieve something “revolutionary” in scope and I devoted 15 years of my life to mining the insights that he opened to us all). I am going to get all the credit that I could possibly want presuming that the entire economic system does not collapse, which is the one real risk that I am facing. But of course that one gets all of us if a black card comes up.

I don’t have any concerns at all about who gets credit. Do you know who is going to get credit after the New York Times story comes out? You Goons! You Goons have helped me lots of times, dozens of times. I am going to tell that story. I think it is a very cool reality that Shiller’s work is so amazing that even the sworn enemies of the last 36 years of peer-reviewed research cannot help but bring out points in connection with it that help us all. That’s amazing. You Goons don’t want to help. But the reality is that you have. On numerous occasions. And there is no reason in the world why I should be reluctant to give you credit for the good that you have done. When you do good, you help people understand how stock investing works. When you help people understand how stock investing works, you help people see the value of my work. You have helped me. I am grateful to you. I am happy to give you credit. So be it, you know?

I have taken a bet on the future of this country. I love this country. I think we are going to pull through. If we do, I make out like a bandit. Good for me, you know? That’s how it is supposed to go in this country. People help us all out and they are rewarded for it. That’s the wonderful system. That’s what keeps the wheels spinning in a forward direction. I love the way it works and I love being a part of all the magic in this particular case. You can’t beat the feeling. It’s a thrill. Doing well by doing good.

Wade is going to get a mountain of credit on the other side. He deserves it. I think it will be fantastic to see him get the credit he deserves. And Shiller is going to get lots of credit. And Kitces. And Bogle. And Bernstein. And Swedroe. And you Goons. There is going to be credit coming out of our ears.

No worries.

Except for the deepening of the economic crisis and the possible Second Great Depression. I don’t want to come off as glib re that aspect of the question. That one truly worries me. All the credit in the world won’t help me if our economic system collapses. So I want to do everything in my power to help us out re that one. But of course there is only so much I can do in that department and I have been working that one hard for a long, long time now.

But no worries whatsoever re the credit thing. We all are going to do just fine re that particular matter. I am 100 percent sure.

My best wishes to you.

Rob

Bill Bengen: ” For Those Who Wait for a Low Enough CAPE to Invest Fully in Stocks, It Has Been a Frustrating 25 Years, As CAPE Has Been Below its Average of About 16 Only About 25% of the Time During That Span (If That Much). Today, of Course, CAPE Stands at More Than Twice its Long-Term Average. It Will Be Interesting to See If It Does Indeed “Mean Revert”, and Even Drop Below its Long Term Average.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Uh oh, Rob. Bill Bengen points out the research and data that says you are wrong and that VII is a failure:

“I have not studied in great detail the correlation between Shiller CAPE and withdrawal rate. However, Michael Kitces, a celebrated financial planner who has also done some important research in the area of withdrawal rates, produced an interesting chart some years ago. It showed a strong negative correlation between CAPE and each year’s safe withdrawal rates. So, I am not surprised at the conclusion that Wade reached, although I believe he may have been the first to quantify the “boost” to SAFEMAX by using a timing strategy.

However, for those who wait for a low enough CAPE to invest fully in stocks, it has been a frustrating 25 years, as CAPE has been below its average of about 16 only about 25% of the time during that span (if that much). Today, of course, CAPE stands at more than twice its long-term average. It will be interesting to see if it does indeed “mean revert”, and even drop below its long term average. The only time that has happened in the last 25 years was for a few weeks in 2009. ”

That last paragraph is power-packed stuff, Anonymous. I am grateful to you for sharing it with us.

The claim that the last 25 years have been “frustrating” for Valuation-Informed Indexers is true only from the perspective of a Buy-and-Holder. Yes, if we have missed out on gains, then it could be viewed as frustrating. But the entire question in dispute is the question he puts on the table two sentences later when he questions whether prices will eventually mean revert or even drop below their long-term average. If that happens, the math shows that the Valuation-Informed Indexers will be far, far ahead of the Buy-and-Holders, too far ahead for the Buy-and-Holders to entertain any realistic expectations of ever catching up.

Do I believe that prices are going to mean revert? 100 percent. I have never been more sure of anything in my life. Could I be wrong? 100 percent. I am one of those darn humans. We get them wrong all the time. All of us do. That includes me.

We should be having a national debate re these questions, Anonymous. I can believe that Bengen truly believes that prices are NOT going to mean-revert. I think that he would pass a lie detector test on that question. But I know that I would fail a lie detector test if I said that I believe that we are not going to mean-revert. I am going to continue to post honestly. I am going to continue to say that I believe that prices are going to mean-revert and that Valuation-Informed Indexing is going to show itself superior to Buy-and-Hold one more time, just as it has been doing for 150 years of U.S. stock market history now.

I don’t think that Michael Kitces shares my views 100 percent. But I don’t think that Micheal Kitces shares Bill Bengens’s views 100 percent either.

I don’t believe that Wade Pfau shares my views 100 percent. But I don’t think that Wade Pfau shares Bill Bengens views 100 percent either.

I don’t believe that Robert Shiller shares my views 100 percent. But I don’t think that Robert Shiller shares Bill Bengens views 100 percent either.

Each of these people should be sharing his views precisely as he holds them. That’s how we learn together over time. For that learning together process to work, we all need to speak out in clear and firm and uncompromising terms re the financial fraud stuff. No death threats. Not ever again. No demands for unjustified board bannings. Not ever again. No thousands of acts of defamation. Not ever again. No threats to get academic researchers fired from their jobs. Not ever again. Re that one, there should be 100 percent unity.

This is my sincere take re these terribly important matters, in any event.

My best and warmest wishes to you and yours, old friend.

Rob

Valuation-Informed Indexing #376: How Many Bull/Bear Cycles Are Required to Prove That Valuations Matter?

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I’ve posted Entry #376 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called How Many Bull/Bear Cycles Are Required to Prove That Valuations Matter?

Juicy Excerpt: I sometimes make the claim that 100 percent of the evidence available to us today supports Shiller’s view of how stock investing works and 0 percent supports Fama’s view. I of course understand that the statement strikes most Buy-and-Holders as extreme and absurd. But I advance the claim sincerely. It’s that hill-and-valley graphic showing how valuations play out in the long term that persuades me that the case is so strong. The hill-and-valley graphic applies for the entire history of the stock market. And it is logically incompatible with a belief in Buy-and-Hold.

A visitor to my website asked me the other day how many times the hill-and-valley pattern has played out. The answer is four times. We came to the end of one bull/bear cycle in the early years of the 20th Century. We came to the end of a second at the onset of the Great Depression. The third ended with the stagflation of the 1970s. And we are presumably nearing the end of the fourth bull/bear cycle in our nation’s history today. Four completions of the cycle was not enough evidence to make the case for my friend. He asked me to get back to him when I can say that the same basic cycle has played out not four times but thirty times.

“We’ll All Be Working Together in the Days Following the Next Price Crash. The Only Difference Is That There Will Be More Human Misery If We Wait.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Hi Rob. Come join us.

Love,

Robert, Wade, Bill and Michael

We’ll all be working together in the days following the next price crash, Anonymous.

The only difference is that there will be more human misery if we wait.

I vote for us all pulling together today.

But you know what? I only get one vote. Others get to decide what others do.

So we will have to wait a bit to see how things play out.

I naturally wish you all the best that this life has to offer a person.

Rob

” By the Time Shiller Showed That Valuations Affect Long-Term Returns, We Already Had an Entire Industry Built Around Buy-and-Hold. All of the Powerful and Wealthy People Who Were Making Their Living Promoting Buy-and-Hold Did Not Want Their Clients and Readers and Friends to Realize That They Had Made a Mistake. So They Kept Quiet About the Far-Reaching Implications of What Shiller Had Done. It’s Now Been 36 Years. It’s Now Not Just Hard to Admit the Mistake, As It Would Have Been in 1981. It’s Now Very, Very, Very, Very Hard.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

http://www.aaii.com/journal/article/insights-on-using-the-withdrawal-rule-from-its-creator#comments

Bengen is asked about and comments about Wade, Shiller, Michael Kitces, FIRECalc, CAPE. There’s even a link to one of Wade’s papers (sadly, not the one you wrote.) This is an active comment thread, so there’s no excuse for you not jumping in.

But you don’t. How can you just sit on the sidelines? You say you have the most important job in the world. This is right in your freakin wheelhouse. If you stay silent now, then obviously nothing will ever rouse you from your hibernation.

I’m grateful for the link, Anonymous.

I have commented at hundreds of places. The problem is certainly not that I have not commented enough.

We have a problem as a society. Shiller provided us the last piece of the stock investing puzzle in 1981. Had he published his “revolutionary” (his word) research findings in 1961, there never would have been any Buy-and-Hold. But it didn’t happen that way. By the time Shiller showed that valuations affect long-term returns, we already had an entire industry built around Buy-and-Hold. All of the powerful and wealthy people who were making their living promoting Buy-and-Hold did not want their clients and readers and friends to realize that they had made a mistake. So they kept quiet about the far-reaching implications of what Shiller had done. They praised him, they patted him on the head, they patronized him, down the road a piece they even awarded him a Nobel prize. But they didn’t change any of their strategic recommendations to reflect his research findings. And, as time passed, it became harder and harder for them to acknowledge their mistake and thereby bring the cover-up to an end. It’s now been 36 years. It’s now not just hard to admit the mistake, as it would have been in 1981. It’s now very, very, very, very hard.

I did not cause any of this. I came along in 2002, when I saw that Greaney got the numbers wrong in his retirement study and told my friends at the Motley Fool’s Retire Early board. Hundreds of them saw right away how important that post was. They said that I had started the most important discussion ever held in that board’s history. Greaney threatened to kill family members of anyone who continued to post honestly and eventually he got the discussion shut down. Motley Fool made clear that they would not do anything to Greaney or any of his Goon supporters but that they would ban anyone who got on his bad side. So everyone who cared about the subject of early retirement left the board and a board that was once the pride of the site became a wasteland of nonsense. Similar things happened at lots of different places. And here we are.

I don’t think that we have any choice but to open the entire internet to honest posting re safe withdrawal rates and lots of other critically important investment-related topics. Shiller predicted in his book that the continued promotion of Buy-and-Hold strategies would lead to an economic crisis late in the first decade of the new Century, and, sure enough, we saw one. The economic crisis stirred up political frictions on both the left and the right that we still are suffering from today. Stocks are still priced at two times fair value. So we are still looking at a 50 percent price drop or more than that in the event that stocks continue in the future to perform anything at all as they always have in the past (every other bull/bear cycle in our nation’s history did not end until valuations dropped to one-half fair value). So we have a situation on our hands. We stand on the threshold of the biggest economic advance in our nation’s history. The peer-reviewed research that I co-authored with Wade Pfau shows that we can reduce the risk of stock investing by 70 percent just by permitting honest posting on the last 36 years of peer-reviewed research in this field.

I’ll tell you what. Go over to that thread and ask the people there if they would like Rob Bennett to come over and share his thoughts about how safe withdrawal rates work in a world in which valuations affect long-term returns. If Wade Pfau or Robert Shiller or Bill Bengen or Michael Kitces asks me to come over and join the discussion, I will be there in a jiffy. I love my country and I love all those friends of mine and I am 100 percent happy to help. I am not going to go over there uninvited so that you Goons can engage in your trickery and stir up trouble one more time. It serves no constructive purpose. Every person alive on Planet Earth benefits if we all learn how stock investing works in the real world. Show that you want to advance the discussion and that the other people participating in the discussion want to generate a learning experience for everyone involved and I am 100 percent in. I am not inclined at this moment in time to get involved without some assurances along those lines.

We are all in the same boat. We all benefit from learning about the new research. How about you show that in your posts? How about these experts that you refer to show that they want to see responsible behavior on the part of the people participating in the discussion and make clear that they will not tolerate death threats or demands for unjustified board bannings or thousands of acts of defamation or threats to get academic researchers fired from their jobs? When we begin doing this the right way, we will make more progress in 15 hours than we have made in 15 years of letting you Goons run wild with your hate. We need civil and reasoned discussions for the discussions to bear good fruit. There are rules of civility that are followed in every field of human endeavor other than stock investing and that are reflected in our laws against financial fraud. Those rules are going to need to be given recognition in our discussions of what the last 36 years of peer-reviewed research teach us about stock investing if our discussions are to bear good fruit in this area.

I am 100 percent confident that we will all pull together in the days following the next price crash. The people who you name love their country and, when they see the human misery caused by a deepening of the economic crisis, they are going to do what needs to be done. I wish they would do it today. It would be a huge plus for everyone concerned if they did it today. But you know what? I cannot make good things happen unless the laws of the United States are followed in the discussions that are held. That’s a necessary part of the equation. Show me that there has been a change of heart on the part of these people and I am in in two seconds. If there has not yet been a change of heart the best that I can promise you is that I will do the very best that I can do as soon as it appears to me that there has been a change in heart.

I hope that helps a small bit.

Rob

 

“These Events Demand an Explanation”

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Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

“But they have not emotionally taken in the knowledge that they possess so that they can make productive use of it. …The knowledge that they possess sits in their brains but they have not integrated it with their other thoughts”

And don’t you think it’s a wee bit presumptuous to claim you know the inner working of the minds of thousands of people you’ve never met, many of whom you agree are far more intelligent and experienced than you are?

I’m intelligent enough to see that there is no valuation adjustment in the retirement study posted at Greaney’s site, Anonymous. And I am intelligent enough to know that Shiller’s research showing that valuations affect long-term returns must be legitimate research or else he would mot have been awarded a Nobel prize for it.

I am intelligent enough to know that there is no place for death threats in discussions of stock investing. And that there is no place for demands for unjustified board bannings. And that there is no place for thousands of acts of defamation. And that there is no place for threats to get an academic researcher fired from his job.

If you have a better explanation for the events that we have seen transpire over the past 15 years, I would be happy to hear it. Neither you nor anyone else has even tried to put forward a better explanation. So, no, I don’t think it’s presumptuous at all. These events demand an explanation. And there is an explanation available in the psychological literature — cognitive dissonance. So that’s the one that I am going with until I hear something better.

You don’t have to accept my explanation if you don’t care to. You asked me a question and I gave you an honest response. My explanation is 100 percent sincere. I am as intelligent as I am, no more and no less. And that’s what I have come up with at this point in the proceedings. I look for new insights every day. So perhaps down the road a bit I will be able to add some detail to it.

My best wishes.

Rob

“All of These People on Wall Street ‘Know’ What It Means to Say That Stocks Are Priced at Two Times Fair Value. But Their Emotions — Their Need Not to Defy the Tribe — Cancels Out the Effect of Their Mental Processes.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

“Stocks are today priced at two times fair value.”

To be clear, this is a fact Wall Street is not aware of – otherwise they would immediately dump stocks. Is that fair to say?

You are making a great point here, Anonymous. If you would reflect on this point a bit, the entire matter would click for you.

Just about everybody on Wall Street is aware intellectually of what the P/E10 level is today. You see it mentioned all the time in articles. These people are obviously not dumb. So on an intellectual level, they know what they need to know.

But they have not emotionally taken in the knowledge that they possess so that they can make productive use of it. They rationalize away this knowledge that they possess. They tell themselves “oh, nobody knows when the crash is coming and I cannot afford to miss out on gains in the meantime” or whatever. The knowledge that they possess sits in their brains but they have not integrated it with their other thoughts on all of the various strategic questions and so it is as if the knowledge did not exist. It is passive knowledge. It is not being put to productive use.

It helps to remember what happened in the famous psychology experiment from the 1950s, the Asch experiment. People were put in a room and asked to identify which of two lines — a 12-inch line and an 18-inch line — were longer. Their brains possessed all the knowledge needed to supply the correct answer. It was obvious to them that the 18-inch line was longer. But the four people who were plants and who spoke before them all identified the 12-inch line as longer. This psychological reality neutralized the knowledge they possessed. Humans are social creatures. Evolution put something within us that tells us “don’t go against the tribe no matter what your brain tells you.” So they told the person conducting the experiment that they “thought” the 12-inch line was the longer one. Their emotions cancelled out the product of their mental processes.

All of these people on Wall Street “know” what it means to say that stocks are priced at two times fair value, Anonymous. But their emotions — their need not to defy the tribe — cancels out the effect of their mental processes. So they don’t give voice to what they “know.” They say: “timing doesn’t work” or repeat some other mind-numbing marketing slogan.

Prior to 1981, we were as a people largely ignorant of the effect of valuations on long-term returns. Shiller was awarded a Nobel prize because he published research in 1981 that in an intellectual sense dispelled that ignorance. Now we “know” how stock investing works. But it doesn’t do us any good to possess this “knowledge” if we cannot act on it. I am trying to take things to the next step, to win for us the ability to DISCUSS what we now know so that we can integrate it with our other thoughts on the subject of investing and thereby become able to make better strategic decisions.

That’s the story here. Do we begin to make collective use of the last 36 years of peer-reviewed research in this field or do we elect to remain in effective ignorance and suffer the consequences of doing so? I of course say that we need to move forward, that all of our social norms favor open discussion of peer-reviewed research and that there is no way to hold back the tide of history re these matters indefinitely.

If we all talked openly about the overvaluation problem, the overvaluation problem would go away. Shiller SOLVED the one big problem of stock investing — the risk attached to it. The peer-reviewed research that I co-authored with Wade Pfau shows that the risk that has always been associated with stock investing pretty much goes away once people are permitted to take the findings of the last 36 years of peer-reviewed research into consideration when making allocation decisions.

But people do need to be able to discuss these matters to be able to gain the power to overcome their unfortunate emotional inclination in favor of Get Rich Quick thinking. It is only by opening every discussion board and blog on the internet to honest posting re the last 36 years of peer-reviewed research that we can put those research findings to good use, that we can at last come to truly “know” what Shiller showed us 36 years ago. We need to enforce our laws against financial fraud. Those are good and necessary laws. They are a key part of the system that permits the American Experiment as a whole to work its magic.

Good question.

Rob