An Exploration of What it Means to be a “Big Bank”

I want to talk politics a little bit.  I had a revelation the other night when I was up too late and I had one of those serious conversations with and old friend.

As a liberal, one of the things that you wouldn’t expect from me is a defense of the bank bailouts.  And you aren’t likely to either.  My parents (very conservative folks, mind you) raised me to accept the consequences of my actions.  Of course, like any good American, I say that I believe in accepting consequences, but often resent it when I screw up and someone calls me on it.  Usually, afterward, I can acknowledge the justice of the situation, but I still have that good old American sense of entitlement.

That said, let’s look at the bailouts in as objective a light as possible.  Bear in mind that most of this is based on information that I got from a friend who is far more informed about things like this than I am.  I am not an economist.  He is.  I don’t trade on the stock market.  He does.  I asked him what he thought of the bank bailouts because, let’s face it, like many Americans, I am all too aware of my lack of true understanding of the nature of this issue.  I will talk a big talk about how “too big to fail” is bullshit and people should accept consequences.

The first thing he told me–and my fact-checking seems to support this claim–is that the vast majority of the bailout loans have actually been repaid.  The big banks and the big auto companies in particular have already paid off their bailout loans and, indeed, the government seems to have made money on the deal.  This was a shock to me.  I thought we, as the taxpayers, had just given them a bunch of money without expecting anything in return.  Weird.  I think this is a crucial point that neither Obama nor anyone else has really brought up yet.  In fact, I don’t understand why Obama hasn’t stressed this fact.  An often very potent defense of a questionable action is to say, “See?  Look how it all turned out!  It’s like we didn’t spend that money at all!”

Let’s keep this point in mind as we continue here.  I think next we want to look at the very idea of “too big to fail.”  What exactly does that mean?  A lot of people called bullshit on this phrase, but just how big are these companies?  Well, a quick web search might tell us that Goldman Sachs, one of the biggest investment banks in the world has 33,000 employees (that’s 33,000 people who likely would have lost their jobs had they been allowed to buckle under).  They have $923 billion in assets.  And they’re nothing compared to the size of a behemoth like JP Morgan Chase, with total assets of $2.3 trillion and 260,000 employees.

Note: To be fair, JP Morgan did not need TARP money and was the first bank to pay back the bailout dollars.  In fact, they were browbeaten into accepting the $25 billion that they did receive–honestly, this makes me wonder where they’d be as a corporation had the TARP never happened.  But still, plenty of other banks did need TARP money to stay afloat.

Let’s ignore for the moment the question of whether these banks deserved the money–we’ll return to it shortly.  And let’s just consider the possible consequences of one or more of them failing.  Entertain with me the question of what would happen if a huge Wall Street bank just up and vanished.  First and foremost, thousands of people would lose their jobs.  Possibly hundreds of thousands.  Those are, for the most part, just working Americans.  Bank tellers, check processors, maintenance workers, janitors.  Not to mention the small businesses like restaurants that would all fail when a huge chunk of their clientelle (bank employees often go out to lunch at local nearby restaurants–I know this from personal experience).  Lots of smaller businesses depend on those banks being around for their well being, a fact that is not often considered.

But there’s more to this than just that.  Consider, my friends, what these banks actually do.  In the big scheme of things, what does a financial services/investment bank do for America?  The most important piece of information that people seem to neglect to take into account is the fact that the US is not an insular country.  It’s not just the American economy that would be affected.  Goldman Sachs is a global bank.  It’s based in New York, sure, but it’s got assets and works on a global scale.  The economy isn’t just the American economy (and this is something that is very important to think about whenever you talk about the economy).  America can do everything right, but if the world economy falters, there isn’t much we can do.  The fact of the matter is, these banks facilitate the flow of money world-wide.  For good or ill.

And not only that, but you remember the ongoing housing crisis?  All those people losing their homes because they lost their jobs and the housing market sucks?  Consider the phenomenon of  toxic assets.  Your small town bank couldn’t afford your loan so they sold it to a bigger bank.  This was happening for years before the bubble popped–this happened because for all of human history, American real estate never did anything but go up, so that shit was worth lots of money.  If huge banks started failing, the question of who owned your house would become very complex very quickly.  The housing bubble pop might just have been even more violent had those stable–if mind-bogglingly corrupt–banks hadn’t been there to facilitate all those foreclosures.

If Goldman Sachs or JP Morgan Chase or Wells Fargo ceased to exist, or indeed collapsed violently, the entire world economy would be upset.  These entities are very integral to the way the global economy works.  If the Obama administration had allowed those banks to die, if the Fed hadn’t infused them with trillions of dollars–and honestly this was a WAY bigger deal than TARP anyway–just think of what might have happened.  Objectively.  The idea might very well appeal to you.  You might say, “Fuck ’em.  I say take the consequences.”  But really consider what that would mean.  I don’t think anyone knows exactly what would happen, but I think we can make some educated guesses.  If our big banks were allowed to fail, like dominoes, so would many other banks in Europe.  The global economy would grind to a halt.  Unprecedented unemployment rates would likely be seen.  For several years, the entire world would be…just fucked.  There would literally be NO economy.  Perhaps it would bounce back.  Maybe.  But how many people would suffer as a result?  China’s economy is doing just fine, so they would likely become the super power, and the US would flop around like a dying fish for a while, still trying to convince itself that it’s number one, when sadly that’s no longer (and never again will be) the case.

How many might just die as a result?  Unrest, unemployment, starvation, riots.  Maybe I’m being alarmist here, but isn’t it feasible?

So okay, the global economy–as it’s currently structured!–does, in fact, depend on these organizations to a certain extent.  Let’s concede that fact.  Maybe they do have too much power.  But I ask you, who controls that bulk?  Who steers the inertia that these corporations have?  Are these just a few bloated, wealthy individuals?  Or is there something else going on here?

Okay, let’s put together a picture, shall we, of corporate life at a huge investment bank.  Of the major officeholders at Goldman Sachs, only 3 men have had their jobs for more than like six years (since 1999, actually).  Like half of their top-tier executives have been there since barely 2008.  Several have only been there for a year.  Think about that for a moment and ask yourself who controls Goldman Sachs.  The turnover rate for top-tier executives is very high.  This is an absolutely vital fact to consider.

The career of your typical Wall Street bank executive is a constant Darwinian struggle to the top.  Any individual executive will take any and every opportunity to rise through the ranks.  They will throw anyone under the bus.  The person who makes it to CEO or CFO or President or Chairman of the Board is a person who is ruthless, intelligent, and has not the slightest amount of empathy for other people.  And the thing we all have to realize is that Goldman Sachs is kind of like a factory producing an endless stream of sociopaths.  Does the CEO of G-S have any real power to direct the corporation?  Nope.  If the board put him in that office and he showed even the slightest inclination toward morality, toward doing “the right thing,” you can bet your ass that he would be gone quicker than you can say, “corporate responsibility.”  The only reason this never happens is the fact that the corporate ladder is really a corporate filter, destroying the humanity of the people that rise to its peak.  By the time you hit the board of directors of a huge investment bank, you either have no humanity left or there was none in you to begin with.

A few people with morals sometimes manage to slip through the cracks, get fairly high in the hierarchy, and then become disgraced and write a book about corporate greed and corruption, but selling a few books is really just a consolation prize as you try to make your millions as quickly as possible before retiring at 40.

The simple fact of the matter is, however, that no one controls these companies.  An executive’s lifespan, if he’s really, super lucky, is to rise through the ranks, display a ruthless efficiency, make it as far as possible, socking away as much money as possible in the meantime, and eventually getting booted out the other side, hopefully with a fat severance package to retire on.  These companies aren’t family businesses.  They are uncontrollable entities of such massive bulk that they cannot be steered.  They have their own inertia and it is enormous.

Many executives talk big, but have no more control over the future direction of the corporation than a snail.  Their only hope is to perform adequately and efficiently and make a whole lot of money before being replaced.  That’s the simple fact of the matter.  Goldman Sachs doesn’t have an identity as a company.  It’s  a…thing.  A force.  It doesn’t have a face or a conscience.  It’s like a hurricane.  It cannot be controlled by anyone.

The take-away lesson here: global banking companies are very large and very powerful, but ultimately completely uncontrolled and uncontrollable.

Also, I would like to point out that these companies wield their power very differently than privately own corporations like Koch Industries and their ilk.  I think they are beyond the scope of this particular essay.

And this situation is never going to change either.  At least, not from within the system.  The government can’t break up these banking monopolies because unlike Ma Bell, these are global companies.  It’s almost impossible to regulate a global corporation.  How would you do it?  One of the reasons the governments of the world don’t do anything about these monopolies is the fact that they literally don’t know what can be done.  The other reason is much more obvious, however: corruption.

People talk about big government and how much they hate it.  Nobody likes the government, but think for just a second about what a government–or at least a democratic one–is supposed to be.  “Of the People, by the People, and for the People.”  It’s the social contract.  We are going to give up some of our freedoms in exchange for security and stability.  The government is supposed to represent the will of the people.  The government is supposed to be us.  That’s an important thing to consider when one thinks about governments.

But what does it take to become a major political player in one of the only two potent political parties in America?  What does it take to be the CEO of Goldman Sachs?

The same sort of sociopaths are the people who manage to rise through the ranks of political parties as corporations.  And let’s face it, political parties are where the real government lies.  These compromised entities, these monopolizers of politics, control this country.  I’m not sure what their eventual goals are, but I really don’t believe that Republicans and Democrats actually have different goals.  They both exist to create a false conflict in American politics.  They exist to give us the illusion of choice.  If we look back far enough, it wouldn’t surprise me in the least to discover that it’s the same sorts of people pulling the strings of both parties, profiting on the fact that half of America hates the other half and vice versa.

We do have to consider that some politicians are actually decent.  But this is only because government is not nearly as efficient a filter for ruthless sociopathic tendencies as corporate culture is.

So let’s put it all together.  The too big to fail companies were bailed out because if they hadn’t been, the consequences may very well have been disastrous.  I don’t like it, but Obama just might have had no other option when it came to the TARP.  Those same companies ARE immoral and sadistic forces of nature, entities of uncontrollable power but there’s neither the will nor the ability on the part of US government to do anything about it.

We are stuck in a very tricky situation here, folks.  It’s almost an unsolvable problem.  You might be inclined to say, “Revolution!” as I was when I was talking to my friend.  But always remember: we live in a global society.  If the people of the US did manage to rise up, overthrow its government, and dismantle Goldman Sachs and the other bloated, malignant, cancerous entities that call themselves banks, what would happen next?  Once you take it all apart, you’ve got to put something useful back together again.  A new social contract needs to be established.  Who’s going to take responsibility for that?  When America had its first revolution, it was the rich people who did that (granted they were almost all romantics at heart and many were philosophers themselves).  It’s safe to say that whoever has the resources to do so is going to be in charge of that whole process.

And then remember one other thing:  if the US government falls, its military will likely dismantle itself (if no one’s paying them, they’re probably going to go home).  We will have no military power and if the US dollar is backed by anything, it’s back by missiles and drones and bullets.  If the US dollar ceases to have value, consider what other countries will do.  We owe a lot of countries a lot of money.  Are they going to idly sit there while we figure out how to rebuild our country?  Are they going to sit there and watch us, defenseless, and let us get back on our feet?

Will China?

It’s a very tricky situation.

“Macht ist sie, diese neue Tugend; ein herrschender Gedanke ist sie und um ihn eine kluge Seele: eine goldene Sonne und um sie die Schlange der Erkenntniss.”
                -Friedrich Nietszche

Why I am a Socialist.

I cannot tell you how many times I’ve argued for communism, socialism, anarchism, science, evolution, global warming, beards, men wearing earrings, etc. I cannot tell you because I don’t know the number myself. It is probably somewhere between hundreds and a gajillion. Perhaps even as many as a zillion. (gajillion < zillion?)

I am a committed socialist. And that is what this essay will be about. It is interesting that there are people in this world who look at any socialist that is around my age and assume that it’s some sort of “phase” or passing fancy. “Oh, he’s just in college. They all explore those ideas. He’ll come around.” Now that I’m thirty, multiple degrees in hand, I am only more firmly committed, however.

It is probably important, at this point, to explain just what I think a socialist is, since there are so many misconceptions of what a socialist actually is and is not. So here goes: I am convinced beyond a reasonable doubt that societies function much more effectively when people work cooperatively and wealth is distributed, more or less, evenly. This also means that I am convinced that the more polarized and consolidated wealth becomes, the more unjust, and less coherently, a society will function.

Why do I think this? There’s a part of me that screams that it is self-evident. But I know that is the least effective way to argue for it. Believe me. When I was a freshman in college, it was an instinct. I knew it because it just seemed right. A part of me smelled it and my subconscious evaluated it and it just made sense. As I aged, and read more books, the arguments for it coalesced in my higher brain. Perhaps I’m hardwired for it. As a humanist (another topic entirely) I do believe that if everyone gives the idea of socialism a fair chance, they will see its merits. Socialism is a philosophy of cooperation rather than competition. It’s a philosophy of justice for the many rather than the few.

For instance, it is profoundly unfair that even a misdemeanor violation, which carries the smallest fine, can be a nearly insurmountable obstacle to a working-class family and yet for a wealthy teenager, it’s an undetectable bump. The solution is so simple it’s idiotic: sliding-scale fines.

This is not to say that I do not believe in some meritocratic ideas. It seems to me that there is nothing inconsistent with being a socialist and feeling that certain privileges ought to come for those who contribute the most to society. Those who share of themselves in the best ways. But this ought to be within reason. Yachts, for instance, are ridiculous unless communally owned. Learjets even moreso.

Which brings me to the crux of the issue: wealth and income distribution as it currently stands. Some statistics, bulleted for ease of absorption (2007 numbers):

  • the top 1% of Americans possess about 35% of all the total net worth in the US.
  • the next 19% of Americans posses a further 50%.
  • combined, the top 20% possess 85% of the total net worth of this country.
  • elementary school mathematics tells us that the bottom 80% of Americans possess but 15% of the pie.
  • for more (including the fact that the bottom 90% possess 75% of the debt) click here.

And so I ask you, whoever possesses the eyes reading these words: do the top 20% of Americans deserve it? Do not answer right away (even if your answer is no). Really think about it. Look at a CEO of a multinational corporation whose annual compensation might very well be millions of dollars or more. Does he work harder than a bus driver? Than a factory worker? Than a teacher? Is there something about this CEO that makes him more deserving of such a ridiculously humongous piece of the pie?

There are arguments that might say yes. For instance, the CEO of GE, Jeff Immelt, has been compensated to the tune of $25,413,891 since he took the job in 2001 (as of 2009). It is, perhaps, interesting to note that 44% of that was from ’08 and ’09. He has earned almost half of his fortune in the years after the housing bubbled exploded all of its sub-prime juices over America’s middle class like an over-ripe zit. It can be argued that, since he is the CEO of the largest corporation in the world, and that it employs 287,000 employees (as of 2007), that perhaps there is some justification for it. Having to head up such a monolithic corporation has got to be a difficult and challenging task. (All numbers compliments of Wikipedia)

There are some reasons why I feel this logic is flawed, however. Consider that the median income (the income that splits the country so that half earn more and half earn less) is around $44,000 per year (as of 2004; I’m certain it must be lower by now). In 2009, Jeff I. was compensated 5.5 million. He made 12,500% more than a teacher (since teachers are typically paid based on the median income of their region). Put another way, a teacher makes eight tenths of one percent of what Jeffy made in 2009. Does he deserve to make 12,500% more than a teacher? Does he work 12,500% harder? Are his responsibilities 12,500% more important than educating 35 students at a time every year?

Don’t say no yet. Consider what it takes to run GE. He is the CEO, the figurehead of the largest corporation in the world. Does he actually have a hand in managing those 287,000 employees? Hell no. He doesn’t know 99% of their names. He doesn’t interact with any of them. His job is to deal with big-picture stuff. Mergers and acquisitions and such and very rarely does he deal directly with the workaday employees of the company. What I mean is (and this is just an estimate) 99% of the real work that GE does is performed by the other 99.999999% of the company (estimate). And so does he deserve it?

Consider also that he is a human being. Take away the charimanship, the learjet, the mansion(s), limos, sports cars, exotic pets, and you have a biological entity, an animal, a beast that is no better or worse than my 5th grade teacher (yo, Mrs. Putnam!). He does a job, a hard job, I don’t doubt, but there is no fucking way that it is harder, more challenging, or more important than a teacher’s job. At the very least, it is not 12,500% harder, more challenging, or important. Indeed, it is absurd to even consider such an idea.

And Jeffy-poo is just a multi-millionaire. A billionaire is (and this is just a guess) about a thousand times more wealthy than a millionaire. Mark Zuckerberg has a net worth of over 5 billion dollars. The average net worth of an American family is about 93,000 dollars (yeah, just that). He’s worth 5,376,300% more than you if you are a normal American.

Remember, Mark Zuckerberg is just made of meat. There’s nothing special about him except that he had an above-average intelligence and computer programming skill and one very clever idea. That’s it. And yet, somehow, he is worth 5 million percent more than you.

Okay, so the other argument against socialism is basically two things: USSR and China. Well I have one response to that argument: The USSR and China are not and were never actual socialist countries. They were dictatorships right from the start. Lenin screwed up. He silenced the press and set the stage for Stalin. Mao was…smart, but flawed as well. They did not actually ever make the real transition to communism that Marx spoke of.

What I espouse is a transition to socialism that does not have to be problematic or painful. And here goes: in theory, there’s nothing intrinsically wrong with a debt-based fiat currency like the US dollar. It just has to be utilized properly. Consider the Brazillian Real. In the United States, we don’t even have to transition completely from a capitalistic system.

The problem with the US economy has nothing to do with the country being broke. There are tons of dollars. It is just locked up in personal fortunes where it just sits there. These wealthy people at the top make money faster than they can spend it, and so they hoard it. It’s just numbers that sit there. The fact of the matter is, the US economy only actually functions when people are spending money. Right now, nobody is spending money. The wealthy aren’t spending it because they are hoarding it and everybody else just simply doesn’t have any money.

Solution and transition to a socialist economy:

  • Raise taxes (a lot, like all the way up to 80%-ish) on individuals who make more than a million dollars a year
  • Close tax loopholes on corporations so they can’t get away with paying no taxes.
  • Expand the Earned Income Credit to include middle-class families
  • Spend, spend, spend on social programs, grants for entrepreneurs, public safety net, education, education, and education.

Better yet, levy a huge tax on wealthy people, take all that money that you get a result, and then burn it (or in the case of the US dollar, which is really a digital currency, hit delete). It amounts the same thing and sends a better message.

And so there it is. I am a socialist. Here is my reasoning. It is perhaps true that I wrote this more for myself than for you, but I hope you liked it.

ihr habt noch Chaos in euch

Is Humanity Screwed?

I have some problems with CNN. Not all of them involve Morning Express with Robin Meade. But many of them do. Her show is insipid and juvenile and irrelevant. I am willing to entertain the notion that there is a sort of cosmic radiation that alters our chemical processes at around the dawn hour which makes it impossible for a morning news show to be intelligent but also makes viewers continue to watch them despite this fact.

Anyway, the world is coming to an end. Update your twitter feeds accordingly.

I want to look at the state of the world in very general terms. Let me know if I’m missing some crucial detail (I may or may not tell you to piss of, but it’s worth a try). The conclusion is, of course, that we are fucked. Or maybe not.

What I want to do is lay out, in as simple a matter as possible, some of the problems that the world is facing. I will not defend any particular claim with any sort of argumentation. Instead, I am going to assume that at least the majority of them are actual, real problems and then explore the possible ramifications. To do this, I will adjust my normal paragraph chunking into a more direct, list-like form of communication. Behold, my bullet points of doom!

Shit that’s wrong with the world:

  • Economic turmoil
  • High unemployment
  • Loss of public safety net (by and large)
  • Political upheaval on huge scale
  • Human rights and social justice compromised daily
  • Environmental catastrophe
  • Slow degradation of ecosystems reaching critical point
  • Carbon levels at historic high (in human reckoning)
  • Record corporate profits
  • Corporate ethics is an oxymoron
  • Massive corruption in the highest places
  • Compromised political elite
  • Looney toons taking over congress
  • Peak oil looming
  • Peak water looming
  • Massive food shortages
  • Droughts and famine causing widespread food shortage
  • Food already in short supply
  • Disturbingly high rates of natural disaster
  • Extreme weather no longer extreme
  • Diseases cropping up faster than cures can be discovered
  • Pollution causing a whole slew of problems
  • Bees going extinct
  • Population skyrocketing, exacerbating all of the above
  • Blindness and apathy to all of the above on the part of huge portions of the electorate

Any one of these items would not be such a big deal. Humans are highly intelligent, resourceful, and generally reasonable and the problem would likely be like a fun little puzzle in one of the first few levels of a video game. Instead, we have a situation akin to playing Civilization V on the highest difficulty level.

Notice that I did not include global warming, opting instead for the more general term “pollution.” I must reiterate that I am making no real attempt to justify any particular point on the list. I’m not writing a goddamned book here. I am merely trying to make it next to impossible to dismiss the list outright without considerable difficulty. I am trying, as it were, to make the whole of the situation that humanity is facing, as undeniable as possible.

And so let’s assume that, in general, the list is correct. What does it mean for humanity? Are we, as I prematurely concluded, basically done? Have we screwed things up beyond recognition? Well, that depends. There are a couple of things yet to consider.

There is this whole idea amongst liberals like myself that we are in really deep trouble but if we act now, there is a chance that we can turn this supertanker around. We’ve been saying this for years. Basically, the idea that the situation (the environment, the economy, the state of social justice in this country, etc) can be fixed if people start doing something now. We are always talking about how much better the world could be if only we could get our acts together. NOW! And so, how strong is the force of social inertia? This is a question that may already have been answered and it is somewhere in the vicinity of very strong. Maybe not black-hole-gravity strong, but still really quite strong. Liberals must always hold fast to the notion that immediate action will yield results or else we are prone to fantastic bouts of depression, or worse, throwing up our hands and changing sides.

But let’s assume that our social inertia is too great and cannot be overcome (which is very possibly true). Our society is the Titanic, and we are about the collide with a glacier of our own creation. What are the consequences? Well, each item on the list becomes considerably worse. What does that mean?

Let’s just assume that it means the end of our civilization. Does that mean the end of the world? Hell no. The planet is fine. Cockroaches and lichens will survive the apocalypse with little trouble. Life as a thing is not in danger. The risk of our planet being sterilized is inconceivable. What about humans? Are we an endangered species? I don’t think so. Humans as a species will most likely survive the apocalypse as well. How many rungs down the socio/technological ladder we fall is a matter of some debate.

Is my family in danger? I should think almost certainly. You see, the only reason there are so many humans on this planet is the fact that we have a huge global support system which (more or less) feeds them all and keeps them alive just long enough to reproduce. When that collapses, there will be a brief (somewhere between months and a couple of years) period of complete and utter chaos. Disease will spike. Massive famine. Starvation. Cities will likely be hit the hardest. Rural communities will not be unaffected, however. They have largely forgotten how to perform subsistence farming to feed themselves through winter, relying mostly on the high-tech infrastructure which gives them iceberg lettuce in January.

So, there will be a massive die-off. Perhaps the world population of humans might level off at about a billion. I only say that because the thought of five billion humans dying in a short period of time is almost too much for me to comprehend. Hell, it might even be far worse than that. But it seems reasonable. The turn of the twentieth century saw a population of about 1.4 billion and best case scenario is a return to about a Victorian level of technology.

And so literally, five sixths of the world’s human population is likely to die if things get any worse. Since we are living in the middle of the greatest extinction event the world has ever seen I think it’s safe to say that there are many animal and plant species the will also suffer.

Indeed, the loss of the honeybee would likely drive humanity down to fewer than a million people (if not completely extinct), though I’d like to think that the bees will bounce back if humans die back a bit.

My dad tells me that I complain a lot. That I point out problems but never offer up solutions. Perhaps this is true. It’s a lot easier to spot a problem than to fix it. Anyone can tell you a radio is broken. Few could actually tell you how to fix it beyond buying a new one. But we can’t buy a new planet, can we? Can we?

But there are solutions to this problem. And most of them are not pretty, because most of them are necessary to turn the supertanker:

  • End our dependence on fossil fuels
  • End the drive toward nuclear power (beyond pure research)
  • Dramatically ramp public funding for renewable energy
  • Stop having so damned many babies
  • Stop destroying biodiversity in our food supply
  • Stop letting corporations determine public policy
  • Stop the “buy a new one” culture
  • End intolerance and bigotry
  • Embrace a socially liberal ideology

Granted, I am deliberately going for a utopian vision of the future here. I would even settle for, say, half of these things coming to pass. But what are the odds of even that happening? If we are completely honest with ourselves, what chance does our current civilization really have? In the long term? Zero. None at all.

But what about now? What about the near future? What about the next century? Is it still statistically different from zero? I really need someone out there to say yes and convince me that it’s true.

quelq’un m’a dit

Scott Walker has sold us out to Cthulhu

In light of shameful recent events, it has come to my attention that there is a much deeper and more disturbing situation going on here.

I was discussing this situation with a friend last night (likely about the time that the GOP senators in WI were illegally passing their sociopathic bill) and he made the claim that people like the Koch (Cock) Brothers are most likely satanists. He made it very clear that he was not joking. The Koch Brothers (and indeed, much of the Tea Party libertarian movement) do not, if you look at the evidence, exhibit a sincere desire to help America get back on its feet. Indeed, almost everything that they have attempted to do has been a direct attack on people with little or not hope of balancing budgets or getting the economy on track. Let me rephrase: Everything that they have done has been designed to hurt people. They have done nothing whatsoever to help people get back on their feet and make this country a better place to live.

Not very christian of them. Indeed, as my friend argued, this is exactly the sort of behavior that a satanist would engage in. A real satanist would go to church every Sunday. They would couch almost all of their rhetoric in almost the exact same ways that Scott Walker has, and respond to prank phone calls in the same way as well.

And so, I must politely disagree with my friend. You see, I think that this whole thing is a deviously subtle plot from the Old One, Dread Cthulhu! Think about it. Koch Industries has a long record of ecological disregard. They want to destroy people’s spirits, take away their rights, and sell them toilet paper and napkins.

Isn’t this exactly the sort of behavior that you’d expect from a cult to Cthulhu? Look at it from a strategic standpoint. Do they honestly expect this whole ploy to strip collective bargaining rights is going to work? The political climate is not quite right for it. Indeed, public opinion is just conservative enough that this whole thing is guaranteed only to sow the seeds of chaos and dissent and create unrest. That’s not the sort of New World Order that a satanic cult would endorse. No, no. Either this is a serious tactical blunder (I refuse to believe they are that stupid), or their intention was to create chaos and disorder all along! Think about it, the Koch Brothers are up in their castle keep, chanting dissonant, vulgar prayers to their god of destruction, glorying in the cries of the protesters. This is what they want! The state troopers are moving into the capital and forcefully removing protesters.

Is it only a matter of time before riots break out? Chaos and disorder, my friends, is all that this whole thing has managed to create. And so you have to ask yourself. What’s more likely? That Scott Walker, Rupert Murdoch, and the Koch Brothers are part of a vast cult to Cthulhu, which has successfully managed to deflect the very real and justified anger of the Tea Party at public unions and social programs in order to create widespread panic, confusion, chaos and the death of the American dream? Or that people are actually this evil, nasty, bigoted, disturbed, sociopathic, and (in the Tea Party’s case) stupid, that they would deliberately target public unions, NPR, and Planned Parenthood in a misguided effort to create a society governed by paternal ethics and a corporate oligarchy/police state?

Which is more likely? Hmmm?

Ph’nglui mglw’nafh Cthulhu R’lyeh wgah’nagl fhtagn

The US Dollar is proof that Americans are Stupid

bernanke

There was a time, long ago, that people knew the value of a dollar. And this is not in some “pulling yourself up by your bootstraps” sense. I mean, they literally knew what a dollar was worth. For most of 1975, a dollar had a specific value such that one troy ounce of gold was worth $42.22. Exactly. There was a time when banks had to make sure that they had enough gold in their vaults to fund all of the paper money that they had issued. Since the Federal Reserve was established in 1913, that meant that all of this gold was kept in the same place. Safe and sound, and ready to be exchanged at a flat rate for paper currency.

You might remember me mentioning gold and its relative value vis-à-vis anything else. I talked about how Nietzsche spoke of gold’s relative worthlessness. Of course, today we have tons of industrial purposes for it but by and large, most of the gold in the world today is socked away in various hoards because gold’s real value is its exchange value. This is what Nietzsche was talking about. We value it because it’s very, very shiny and has little or no use outside of this fact. So for time immemorial we’ve used gold as a currency itself. Gold (and silver) coins were the most common form of currency. You can’t forge a gold coin because no matter what, you still need freaking gold in order to make the coins. So gold always has intrinsic value.

A friend of mine says that gold used to be backed by grain. Which is an interesting idea that I haven’t backed up with any formal research. Anyone with any further insight into this would be repaid handsomely in honor and accolades.

The problem with gold, of course, is that it is also very, very heavy. So carrying chests of it around is awfully inconvenient and requires carts and wagons (or trucks in today’s world) and a security detail (who must all be paid well in order to make sure they don’t rob you themselves). So paper currency, pegged to the value of such-and-such amount of gold was invented. But this paper currency (usually issued by a private bank) had to be backed up by that gold and had the promise of such an amount of gold upon presenting it at the issuing bank. This is what builds confidence in a currency.

During World War II, the Japanese hoarded tons and tons of gold as part of their plan to create a new, stable currency that would become the standard currency for their entire Pacific empire. As terribly as they lost the war, they knew that if they won, they would need to have the confidence of the consumers in their currency or there’d by no way in hell that it would maintain any sort of real value.

But many, many currencies are off the gold standard now. In particular, the US dollar (the third most valuable and by far the most pervasive currency) is not pegged to any specific value of gold. To make this point really clear, consider that gold no longer has value but instead has a price. What I mean is, gold used to, essentially, be our currency, though it was abstracted through the use of paper banknotes. Now, gold is just another commodity with a price and not a particularly standard price either. It’s continually fluctuating. At the time of this writing, the price of gold is 942.80 USD per troy ounce. The gold itself isn’t changing, however. It’s only the standard price that people would be willing to pay in American dollars.

Here’s the thing. Paper money is worthless. It’s even more worthless than gold (and gold is essentially worthless; I mean, you can’t eat it). Paper money only has value insofar as everyone involved in its distribution can agree that it has value. That’s it. If nobody can agree that it has value, then it has no value whatsoever.

Take for instance, the scene in the novel The Restaurant at the End of the Universe where a bunch of morons (modern humans) have crash-landed on a primitive planet Earth. They quickly decide to adopt the leaf as their standard currency and all assume that they are rich since there are so many trees. But of course this leads to rampant inflation and even simple transactions require the exchange of, say, an entire deciduous forest.

So why is the US Dollar proof that Americans are stupid? Because somehow they have decided to trust the US government and the federal reserve enough to allow them to back the US dollar with–get this–nothing at all. There is nothing backing our currency. It has zero real exchange value. Zilch. Nada. Absolutely nothing.

They have essentially adopted the leaf as a national currency. When the Fed decides we need more, they just print more goddamned money and there’s nothing in the vaults to back it up. They create this crap out of thin air and Americans accept it!

It’s traded on currency exchange markets. It supposedly has an exchange value (and technically does, since people are still willing to exchange it for goods and services) but this isn’t guaranteed by anything except the Fed’s word that the dollar will maintain its value. But what is it worth? We don’t know because it isn’t pegged to anything!

The biggest and most profound evidence of human stupidity is the fact that other countries love the dollar. In a sense, it’s a pretty remarkable currency because, despite its utter worthlessness, it has managed to remain stable (the most important property for a currency to possess) for decades. There has been steady, but not uncontrolled inflation over the years, but it really hasn’t been a huge problem. Most Americans live pretty comfortably in their absurd little fantasies about the stability of the greenback.

Is it going to come around and bite us in the ass? Probably. Is it going to become necessary to peg the US dollar to some precious metal in the future? I have no idea. I’m not an economist. It just seems absurd that people are willing to trust a currency that has absolutely nothing supporting it whatsoever except, what, credit?

QED

Alles dass Glitzern