Establishment mouthpieces in media and academia have been writing off mistrust of “elites” as kooky for years. Now that plague is running rampant we can all see the stakes. Who do you think will fare better than others surviving the present pandemic? Whether or not the least vulnerable came by their financial, and physical, seclusion honestly is boiling down to a grim question. What is the value of one human life over another? Just how does anyone go about making themselves “worth” more?
Fifteen years ago President Bush was taking heat for sluggish mismanagement of the catastrophe Hurricane Katrina left in its wake. The Mad-Men in charge of photo-ops at 1600 Penn were on it. The Air Force One crew was told to plot a course toward the ravaged bayous of Louisiana. Deep in crawdad country, Bush II was butted onto Jimmy Carter’s Habitat for Humanity bandwagon. The prez was hard-hatted, handed a framing hammer and set loose to work the two by fours and plywood… It turned out the image wonks had jumped the gun. W’s carpentry skills didn’t quite stack up to the homey, good-ole-boy role he flaunted. It was instantly clear the 59-year-old had never held a hand tool before. The PR lumps weren’t quite as vicious as the ones Dukakis got for riding in that tank, but the chief did not come out entirely unscathed.
Somebody in damage control could have shown him how to hold and swing a hammer. Why weren’t they using nail guns anyway? (Were they afraid he might impale himself?). In any case, David Letterman wasted no time getting some yuks out of the spectacle. The camera revealed a POTUS even less adept in the mechanical realm than he was in the grammatical one. The big ears at headquarters must have heard the laughs coming from Late Night. The next day 43 was shown bareheaded, joining studs to the plate a little less awkwardly. Still, as the new improved press photo revealed, every single nail had already been started for the man. It’s a safe bet presidential assistance didn’t exactly speed up completion of the structure.
Left of Bang: How the ...
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Two years later the Western world went through the recession now known as the Sub-prime Mortgage Crisis. Single-family home listings had gone through the roof simultaneous to a massive housing construction boom. Prices were vastly out of whack with supply in light of the number of incomes matching amortization schedules. The blame game over what demographics or institutions were at fault still hasn’t been settled. In 2018 former Trump economic adviser Gary Cohn was busy telling Reuters:
“Who broke the law? I just want to know who you think broke the law,” said Cohn. “Was the waitress in Las Vegas who had six houses leveraged at 100 percent with no income, was she reckless and stupid? Or was the banker reckless and stupid?”
It isn’t necessarily uncommon to meet a waitress with more sense than a banker. We can only speculate on comparative moral probity. Nobody, in major media, has answered Cohn directly so far. We do know that loan officers take their cuts upfront. Should this have remained the legal process in the days of mortgage-backed securities when agent banks were only liable in the short term? Were borrowers responsible for vetting their own qualification? A bigger question lies untouched in the background. Financial markets ostensibly exist for purposes of liquidity and efficiency. Is this the actual mission they filled in events leading to the millennial housing boom? What role they played facilitating the means of production overall is also unclear.
Prior to tax deferment legislation of the 70’s, revenue flow onto Wall Street markets depended largely upon investors’ perception of opportunity there. When baby boomers began to pour into the bidding for financial products, through intermediaries like mutual funds, opportunity was not necessarily expanding accordingly. A salesman, however, cannot keep his job while telling the mark the time is not right. Meanwhile, the three highest spikes of the P/E ratio in S & P history happened in a space of 10 years. The most recent was in 2009. It’s not certain there is any definitive significance in these events. But the last one produced multiples 5 times higher than were ever known prior to 1999 and nearly 3 times that mark. Was it merely luck a major selloff failed to occur or are there, in fact, secretive market movements unknown to the mass of us shoring up common stock prices? Call it conspiratorial but can it be ruled out? There are people in Washington who will see the Fed audited over their dead bodies. Perusing the literature available on the topic provides little assurance published experts have greater understanding than many laymen.
When 40 to 85 billion per month got pumped into the economy over a 60 month period, as in QE3, it accrued to about 3 trillion. Most of this sum was generated into the system through financial markets in South Manhattan. It is beyond naiveté to believe that numerous private entities on the street don’t profit on these financial moves. Every high-school student is taught how demand drives up price. Aside from that, any lift of toxic assets from a bank’s balance sheets, by a quasi-public entity, should provide no relief to individual bankers, or dealers in financial securities, who played fast and loose in an overheated housing market. Any Wall Street player who went bust prior to QE 3 and bailouts had no business riding those waves back to a Hampton’s shore after. These FED and government maneuvers were, in theory at least, intended to maintain market liquidity and not to rescue the riches of any particular parties. As far as value creation is concerned an insolvent beneficiary of the scheme is just another a grifter. It was the medical equivalent of rewarding the disease. Are there any journalists covering fiscal matters in this country detailing such developments or should we buy the notion such people don’t exist?
The yardsticks of description lose accuracy in the higher fiscal planes, (and meta-fiscal might be a better rhetorical fit), here’s a relevant example. If you go to Wikipedia’s article on credit default swaps you’ll be provided with a plethora of algebra and abstract jargon to assist your understanding. But why is any necessary? Every single thing you need to know about a credit default swap is contained in this simple illustration: Your neighbor likes to spend, while you are busy saving. Your credit rating is good and his, understandably, is flagging. Here’s a bright idea, he’ll pay you x a month to borrow your credit rating.
Now, this scheme may sound crackpot to Joe Six-Pack, but that’s because he didn’t go to Wharton. Joe says he’ll think about it, sends the boy home with a beer and busts out laughing once crazy is out the door. MBAs were far too sophisticated for that. They’d rent out the investors triple-A credit rating, peruse A.I.G. history if you doubt that, and shout the impertinent down at stockholders meetings too. What do rank and file shareholders know? They didn’t go to Wharton.
What’s bizarre about the people of the US, a country founded upturning authority—which was a criminal conspiracy by every established law of God and man at the time–is they will fall right back into the habit of deferring to Wall Street authority as soon as the street sharpies are done counting the last take.
Against the Left: A Ro...
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Oxfam, for what it’s worth, says that 8 men now own as much as half of the world’s population. That’s down from 62 one year earlier and likely something of an exaggeration. But the concentration of real assets into fewer hands all the time isn’t disputed by any stats or “experts.”
The eight are Bill Gates, Amancio Ortega, Warren Buffet, Carlos Slim, Jeff Bezos, Mark Zuckerberg, Larry Ellison and Michael Bloomberg. It’s hard to say how much different our lives might be without them. Their actual fortunes may be placed in ranges of dollars and cents but, in reality, these figures lack the exactitude that applies to poorer men. How much actual value is created by vast, and thriving, sectors of the economy is a far more elusive matter to examine.
Media figures who express concern about wealth disparities seldom, if ever, take note of how many parasites and parasitical practices are prevalent in today’s economy. Isn’t it far past time we attempted to shed light on which demographics enjoy comfortable incomes and rates of consumption while failing to create commensurate value in the economy? At this point, it’s well beyond who gets steak and who gets ground chuck.
We often see a crew of able-bodied blue collars put a single-family dwelling, fully partitioned, under roof and tar paper in little over a week. There’s no doubt such industry adds considerable value to a community. In urban areas, where rents are procrustean, such a contribution is more precious. The most essential necessities to human ease and comfort are provided by people whose production is measurable. The suited-up areas of commerce are more inclined to defy the ruler. George Walker Bush’s pre-political career provides a salient example.
The history of the Walker Bush scion’s ascent in the business world is an ugly one. W specialized in attracting funds to his petroleum exploration firm. He was good enough at it so as not to have to get hung up over actually finding a lot of oil. Much of this financial backing came from canny investors. It is none too clear what they were buying…or, maybe, all too clear. One investor in W’s original oil exploration company Arbusto, Russel Reynolds Jr., put it this way: “The bottom line is it didn’t work out very well with Arbusto, I think we got maybe twenty cents on the dollar.” Yet, investors, who were ordinarily quite successful, kept pouring money in. Arbusto averted bankruptcy merging with Spectrum 7…who then made the failing firm’s principal their CEO and chairman? Head scratching laymen who looked on, and were not MBAs like W, apparently had no head for business…if that’s what they call it these days.
After a decade of wheeling and dealing, while producing paper profit that failed to jibe with much created value, the future president decided the dry hole racket might be too closely resembling a Ponzi scheme. His next move was to parlay his scores playing dowser into a chunk of Harken Energy. His sale of that stock preceded a 20% drop in the common share price by 60 days. The Center for Public Integrity characterized the transaction this way:
“One of the questions the SEC didn’t answer was who bought Bush’s stock.
In his statement of intent to sell, which Bush also had to file with the SEC, he said he was putting his 212,140 shares on the open market. That was nearly twenty times the daily volume of stock that traded on average during June 1990; without a buyer willing to absorb such a large block of stock, the share price would have plummeted.”
It didn’t though and Georgie Boy landed on his feet again leaving a wake of financial carnage behind. He hit the ground running.
W used most of this grubstake of $848,000 to partner in the purchase of the Texas Rangers. The next “investor” into future 43 was the greater Arlington, Texas public. They paid for more than two-thirds of a new stadium and then signed the deed over to Ranger owners. You don’t have to be an Obamaite to safely say he didn’t build that. Going by the manual aptitude that’s been publicly displayed, he’d have been lucky to get a single bleacher seat assembled successfully. An original investment of $600,000 or so cashed out to nearly 15 million. That’s not counting his salary and bonuses in the meantime.
The only reason this became national news at all is that W entered politics. There remains, without a doubt, a legion of other high society lapdogs feeding at the same kinds of troughs.
Meanwhile, the unconnected masses are under the gun to create value daily. Some years back, between jobs, I chose not to stay idle and did temp work. One day we were assigned to a large tract of land primed for industrial development. A large transformer on a concrete pad and streetlights were the only things there. The transformer had been placed awkwardly on the site and required a ditch for conduit across a steep but mushy incline. Otherwise, nothing, including the lights, got power. The spot was impossible to reach with a backhoe. The task required 4 hours of grueling work from me and one other man. No one unfamiliar with a mattock and spade could have accomplished it in that time frame. We were paid about $35 each. Far from financially desperate at the time, I could have walked away. My partner’s story was quite different.
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I drove the 55-year-old man back to a hotel room he rented weekly with his disabled wife. Both of them remained constantly on the lookout for income. He had lost a small business in Ohio after being wiped out in medical expenses. That $35 was a necessary link that kept two people off the street. It’s doubtful that many people at the top of the food chain created as much value as he had that day for ten times the money.
At a time like this comparing our current president’s contributions to the economy, as opposed to what he has taken out of it, is a worthwhile equation. And that goes for a teeming mass of the US population…not all of them rich. Still, the question, of just how many parasites presently enjoy island, or island like, isolation from exposure to the coronavirus is an unknown our 4th estate should have been focusing on—since 2007 at least. It’s a little late to sort those details out now.
It would be interesting to learn how much real value is created by people promoting “white privilege” and other pop culture resentments. Wittingly or not the hate industry generates an enormous distraction that diverts attention from the economic realities that are actually what’s riling so many people. And where, do you suppose, their funding is coming from? The leeches have gotten so fat they’ve begun hosting bloodsuckers of their own.
Honest toilers know what they get handed for their sweat doesn’t square with its buying power. How could it? The Big Easy has moved from New Orleans to Washington, D.C., South Manhattan and urban centers coast to coast. The swindlers don’t operate out of cheap hotel rooms. They have offices on Wall, Broad and K Streets or Connecticut Avenue. The first place the marks get burned is in keeping a roof overhead. Who do you think brought housing to that point? Was it the man who gets a solid 2000 square foot structure ready for drywall in ten days? Or was it some cocky MBA from Ivydom whose tentacles have spread from Gotham into the turnkey retailers on Main Street? Elite bankers might be making you sick in more ways than one. And, when this is over, they might own that house you paid too much for…if they don’t already.
It would be ridiculous to suggest a socialist, or “democratic socialist,” resolution here. Government overall is closing down on absorbing nearly 40% of GDP already. The Federal debt alone is over $70,000 per living human in the US…and it’s far from unlikely that the books aren’t cooked to keep the numbers that low. Does anyone expect federal, state and municipal employees to be missing checks in this shutdown? What also might not be missed, much, is the “value” they create. Still, their retirements, unlike everybody else’s, are never in peril. Are they really putting ingredients into the pie that can justify the slice they take out? How can we measure the actual value this cumbersome investment creates? Monthly rents in urban space did not go from 5 days’ pay to 12 during any governments—federal, state or municipal—retrenchment.
As wealth crumbles and evaporates around us the trail of the rip-off always leads back to the commuter corridor between D.C. and South Manhattan. Crony “capitalism” is an oxymoron. Special interest relationships with government always stand in the way of other willing producers. It’s dangerous to think that more legislation and public programs hold an answer. In the US the hyper-concentration of wealth has been symbiotic with government burrowing its way deeper and deeper into the economy.
We all really know that just because something toxic doesn’t kill us—it rarely makes us stronger. The survivors from demographics bearing the brunt of this blight won’t come out whole. The ones likely to be strengthened out of the ordeal will be those with the means to minimize their exposure…and move on the weakened.
Magnanimous maneuvers by the Fed and government never ease burdens at the grindstone. They always pan out to fewer choices, less housing and less bread for the grinders. That way elite experts can precisely bleed their hosts to a shade of pale that suits them.
