Of Bananas and Oligarchs: It's a Mad, Mad, Mad, Mad, World
People are flawed, in fact pretty much everybody is completely fucked up in one way or another. It's human nature, it's always been that way, and it will always be that way - not a goddamn thing we can do to change it. But there are things that, as a society we can do to make lives better. For example, I'm all for a broad social safety net, and I think that Social Security and Medicare are, for the most part good programs.
But there is one function of government that it even more important: standing against the forces of oligarchy and their attempts to skim, steal, or otherwise plunder the national wealth. Teddy Roosevelt knew that, so did Franklin Roosevelt. But for decades, the United States has not had anybody pulling the levers of political power on behalf of the real lower and middle classes - which I define as about the bottom 95% of the income distribution. Instead, the goal of the political elites has been to increase the "financialization" of the economy - which is just a cute term for blowing debt-financed asset bubbles and increasing household leverage (aka debt).
Have no illusions, that is real and vicious class warfare against the poor and the middle class. While what's been going on is obvious to those paying attention, Wall Street's utter contempt for real people now has been put to paper (or pixel) in an angry little screed that's making the rounds on Wall Street:
We are Wall Street. It's our job to make money. Whether it's a commodity, stock, bond, or some hypothetical piece of fake paper, it doesn't matter. We would trade baseball cards if it were profitable. I didn't hear America complaining when the market was roaring to 14,000 and everyone's 401k doubled every 3 years. Just like gambling, its not a problem until you lose. I've never heard of anyone going to Gamblers Anonymous because they won too much in Vegas.
Well now the market crapped out, & even though it has come back somewhat, the government and the average Joes are still looking for a scapegoat. God knows there has to be one for everything. Well, here we are.
Go ahead and continue to take us down, but you're only going to hurt yourselves. What's going to happen when we can't find jobs on the Street anymore? Guess what: We're going to take yours. We get up at 5am & work till 10pm or later. We're used to not getting up to pee when we have a position. We don't take an hour or more for a lunch break. We don't demand a union. We don't retire at 50 with a pension. We eat what we kill, and when the only thing left to eat is on your dinner plates, we'll eat that.
For years teachers and other unionized labor have had us fooled. We were too busy working to notice. Do you really think that we are incapable of teaching 3rd graders and doing landscaping? We're going to take your cushy jobs with tenure and 4 months off a year and whine just like you that we are so-o-o-o underpaid for building the youth of America. Say goodbye to your overtime and double time and a half. I'll be hitting grounders to the high school baseball team for $5k extra a summer, thank you very much.
So now that we're going to be making $85k a year without upside, Joe Mainstreet is going to have his revenge, right? Wrong! Guess what: we're going to stop buying the new 80k car, we aren't going to leave the 35 percent tip at our business dinners anymore. No more free rides on our backs. We're going to landscape our own back yards, wash our cars with a garden hose in our driveways. Our money was your money. You spent it. When our money dries up, so does yours.
The difference is, you lived off of it, we rejoiced in it. The Obama administration and the Democratic National Committee might get their way and knock us off the top of the pyramid, but it's really going to hurt like hell for them when our fat a**es land directly on the middle class of America and knock them to the bottom.
We aren't dinosaurs. We are smarter and more vicious than that, and we are going to survive. The question is, now that Obama & his administration are making Joe Mainstreet our food supply…will he? and will they?
This isn't some trader "going rogue," these guys actually believe this shit. Read, and then re-read this email, it's all here, the "we work so much harder than you mentality," "we make your summers off and landscape businesses possible," "we push up the value of your 401k," the fundamental misunderstanding of what real people make, I mean seriously, does anyone get double time and a half? In the real world 85k is a hell of a lot of money, or at least it would be if serial killer Alan Greenspan hadn't caused household debt levels to spike to unheard of levels. That's what made Wall Street's go-go years possible. Robert Reich get's to the heart of the problem:
The paper entrepreneurs are winning out over the product entrepreneurs.
Paper entrepreneurs — trained in law, finance, accountancy — manipulate complex systems of rules and numbers. They innovate by using the systems in novel ways: establishing joint ventures, consortiums, holding companies, mutual funds; finding companies to acquire, “white knights” to be acquired by, commodity futures to invest in, tax shelters to hide in; engaging in proxy fights, tender offers, antitrust suits, stock splits, spinoffs, divestitures; buying and selling notes, bonds, convertible debentures, sinking-fund debentures; obtaining government subsidies, loan guarantees, tax breaks, contracts, licenses, quottas, price supports, bailouts; going private, going public, going bankrupt.
Product entrepreneurs — engineers, inventors, production managers, marketers, owners of small businesses — produce goods and services people want. They innovate by creating better products at less cost.
Our economic system needs both. Paper entrepreneurs ensure that capital is allocated efficienctly among product enrepreneurs. But paper entrepreneurs do not directly enlarge the economic pie. They only arrange and divide the slices. They provide nothing of tangible use. For an economy to maintain its health, entrepreneurial rewards should flow primarily to product, not paper.
And our public policy, for decades, has been committed to ensuring that the pushers of paper, not the developers of products, are not only able, but actually entitled to skim an increasing percentage of the income and wealth of the nation. Not only is the government failing in its most fundamental role of stopping this, it has been enabling and actively encouraging it for decades. Take a look at this chart which shows that the profits of the financial sector versus the non-financial sector began diverging in the mid-80s, accelerated radically around 2000, crashed back to Earth during 2008, and under Obama's guidance, spiked back up during 2009.
It is fundamentally backward. Finance serves one, and only one, purpose and that is to allocate capital in the real economy. But protecting the finance industry, and encouraging people to leverage themselves and increase household debt levels has become an end in itself, as if there is no real economy, just pushing debt around. Hey, here's an $8,000 tax credit so you can overpay for some piece of shit exurban tract house! Praise be consumer credit is finally ticking upward!
So to help the banks, the government encourages as much household debt as possible, but then turns around and doubly fucks us when things go bad. We have to make it a huge and expensive pain in the ass for consumers to discharge their debt is bankruptcy because otherwise it would be bad for the finance companies! Much better to allow them to garnish 25% of the wages to pay off the collection companies, even if the supposed "debt" was (miraculously) discharged in bankruptcy, or, hell, never existed in the first place!
Despite owning Congress, getting absolutely every legislative and regulatory blow job possible for 3 decades, these guys pitch a hissy fit at even the most trivial and ultimately useless attempt to reign in some of the worst abuses. I mean, Jesus fucking Christ, if there was any justice in this country 90%+ of the executives on Wall Street would be sitting in prison sleeping with one eye open, but instead we get weak tea "reform" proposals, and another wholesale screw job for the bottom 95% of the income distribution.
With Obama as President (or Bush I and II, Clinton, and Reagan for that matter) you don't need to imagine what it's like to live in a banana republic ruled by a handful of oligarchs. You're living it.
Original version posted at http://angryfutureexpat.wordpress.com/