Economics - In One Easy Lesson

(or, "The Inmates Run The Asylum")

(This will probably be my last piece on the economic situation in America.   Frankly, it's gotten too goddamn depressing to chronicle the sorry demise of a sorry group of people too uneducated, too timid, and too dependent to put an end to the mess we're in.)

I was asked quite a few questions the other day, as well as hearing some folks weigh-in on the current economic situation.   What I'm about to tell you, in point of fact, won't be new - but I'm hoping it'll be in a manner that'll help you understand a thing or two about a thing or two about the state of things.

Economics and religion have a helluva lot in common.   They're practiced in places where the ordinary Great Unwashed can never go (try getting a tour of 11 Wall Street - the trading-floor doesn't admit mere civilians); the practitioners wear funny clothes (when CNN is favored by the admission of a cameraman, take a gander at those oh-so-seventies colored jackets); they speak in riddles which would put the most-arcane priest to shame - everything is intended to keep most of us in a form of awe.

In fact, it's pretty simple.  I grow beans; you need 'em.  We trade for something I need, like fertilizer.   That's what they call a 'subsistence' or 'barter' economy - and there are some, even one of our own congressional representatives, who think it might be a good idea today - she suggested trading chickens for medical care -but that's another tale.

A medium of exchange was needed as things became more specialized - and we started trading bits of precious metals, because they were convenient to carry.   Buying and selling gave rise to the merchant-economies of the ancient world.

Nowadays, economists sort things out into primary, secondary, and tertiary markets - or, if you will, the land, labor (work), and money.   The land provides; labor changes it to something different, and money is used to exchange for it all.

The cocksuckers who run the money-systems are the linchpin here.

Fully three-quarters of the value of the world's economic system is natural - stuff we take from the land.   Ask any Neocon, and he/she will tell you that the supply of natural products is limitless, and we don't need to limit in turn our use thereof, our own reproduction, or anything else which impacts the natural world - but that's another story, too.

Work - or labor - is the secondary economy, and figures for about 20% of the value of a product - the amount needed to turn iron ore, say, into a Prius.   To a finance jerk, labor is a 'factor' - and in truth, finance people and other capitalists detest the idea of paying to have anything done at all - people are messy; they take breaks, maternity leaves, go to their kids' soccer games, need medical care and retirement programs, and are a Pain in the Ass, Generally, when it comes to Making Stuff and Selling It.   In their world, robots are cheaper - this is why they can say the words "jobless recovery" with a straight face and never blink an eye.  The day they can make a robot to give 'em a blowjob, they'll do it, believe me, because relating to anything in the natural world, including themselves, is against their grain.

The third leg of the economic stool is money.   While in reality money only takes around 5% of the productive cycle  -  the amount it takes to finance something and bring it to market - the 'money economy' is now around 40-45% of our GDP and rising.   Most of this is in the so-called 'service' economy - which is a lot more than flipping burgers and cleaning houses.

It's a 'service', for example, to send you a bill for something - or to collect it, or to do any of the things which bilk people by degrees for providing something in the first place.   Miss a cell-phone payment and find out just how well these 'services' work.

Now, if you've looked at all this, read this far, and scratched your ass over what I've just written, you're saying, "Wait!   There's no way this can work in the long run!   Trading little pieces of cotton-rag with ink on them for things we really need just won't work forever!  We can't be ripping things out of the ground forever without some sort of - well - payback."   And, y'know what?  You'd be right.

No tree grows to the sky.   Civilization has been eating-out Ma Nature for several hundred years - mainly through the miracle of cheap energy in the past hundred, which has made possible everything from heating and air-conditioning, cheap transportation, the Popeil Pocket Fisherman and endless reruns of "Sabado Gigante".   The sheer volume of crap we've produced has failed to slow; capitalists are and remain unimpressed by things like the concept of global warming and resource-depletion - and courtesy of the Gulf oil-spill, we now have a new term:  Ecocide.

This 'let's-shit-in-our-own-bed' approach to life is nowhere more prominent than it is right here in America.  We're somewhere around 5% of the world's population, and consume upward of 33-35% of its resources.  So far, the peoples of places like China and India have simply industrialized, made their endemic corruption a part of things, and now the Chinese and Indian laborer is being held up by the capitalist thugs on Wall Street as a hero of sorts, riding his 50-pound, iron-frame bicycle with the fat tires and longhorn handlebars ten miles or more through air that's more toxic-soup than anything else, to get to a job with no benefits that pays the equivalent of $2.00/hour.  The moment his Chinese or Indian masters can create a robot that says "Mee-suckee-suckee-no-cost-to-you", he'll do it - because there's one thing capitalists have in common - and that's the love of money over the value of people.

Now, all that money really can take on two forms - one is a type that's backed by something tangible, like gold, silver, platinum, or something else - and stuff called 'fiat' money (that means 'substitute' in Latin; it has nothing to do with the cheap cars Italy's been foisting on the world for nearly a hundred years).

Fiat money is what we have today.  It's backed by the collective GDP of a nation, plus a fair amount of good will (that's the temporary-suspension-of-reality which says, "I believe you'll keep honoring your money at a given rate, so I'll keep taking it, because if everyone else does, we can all pretend it has value.")

We continued to print this stuff, pretend it had value, continue ripping things out of the ground in disproportionate volumes, and went on our merry way - in essence, screwing everyone in the world in the process. 

By the way, this did not go unnoticed.

Now, in 2001, a group of people took it upon themselves to avenge the treatment of an oppressed people of a place called Palestine, which had all but been taken-over by a group of thugs who said "I have an old book that says this place belongs to me."   We here in the U.S. had supported said-thugs for some decades, and when the people who organized themselves to avenge said Palestinians finally figured out how to get to us, it shook the world's confidence in America's economic system straight to the core.  We lost about a trillion dollars the day that the World Trade Center came down, and there was no way this was not going to affect the nation's economy. 

Within a couple of months, we were in a recession (that's when the process of ripping things out of the ground, turning them into Something Else, and selling them for more than they're worth actually goes backward, rather than forward). 

Now, the president (a sleazy prick named Bush, who was part-and-parcel of the capitalist machine) decided that we didn't need a recession.   He told the fellow in charge of the nation's money supply to print more, and in a hurry.   He did, by way of lowering the interest rates and increasing the money supply (here's where we and they differ - they have a license from the government to print money.  If we do that, we go to jail.  This is where the 'inmates running the asylum' thing comes in).  All that money went looking for a place to 'be', and the cheapest and easiest way to put it all in circulation was to convince people that they needed a house.

Soon, people who had no business owning a house were plopped right next door to people who'd worked pretty hard to build value in their own homes.   In fact, buying houses and selling them to other people and calling it 'wealth' became a business (plus the subject of a whole lot of dreadful TV shows).

Cletus and DaisyMae Sixpack took their four snot-nosed kids, their motor-home, their motorcycles, ATV's, camping-gear and shotguns and moved next door to the town doctor, because they all of a sudden 'qualified' for a loan they could have never gotten before.  Now, I'll allow it wasn't their fault - they trusted the Guy With The Suit who said it was, after all, all right - everyone was doing it.

All this cheap money ruined neighborhoods by the thousands all across America.   It put people in homes they couldn't keep - and when they started to miss payments, the bankers gathered up all those contracts, created a new class of 'security' called a derivative, and sold 'em to unsuspecting mutual-fund and 401K managers all over the country.   Suddenly, Cletus and DaisyMae were getting calls from someone they'd never heard of, acquainting them with the word 'foreclosure.'  

We were told that debt equaled wealth, and it worked for a few months - until the credit markets seized up like the guts of a guy who's sat at a bar eating cheese and crackers for a week.

Overnight, the nation's credit markets ceased to be.  Small businesses couldn't get loans to keep running.   They failed - in droves, all over America.  Cletus?  He lost his house - but the paper that funded his home still went on with a life of its own, sort of like that Jason-fellow in all those movies.

The banks came crying to the government, saying 'bail us out!' - all the while engineering the collective unemployment of damn near fifteen million people.

By this time, in rough figures, nearly 80% of the nation's wealth was in the hands of around 1% of the people living here.  Collectively, it's around $80 trillion dollars.   The bankers managed, in five years or less, to package up enough raw deceit and sell it to other people to demolish the world's biggest economy.

There's an old joke about loans.   It goes like this:  "If you borrow $1,000, the bank owns you.   If you borrow $1,000,000, you own the bank".  This is, in essence, what happened - the government, through thirty years of systematic deregulation of the banking and securities systems, essentially gave the keys of the asylum to the inmates and said, "go play!"   By the time it was done, they owned the government -because they were, literally, Too Big To Fail.

The only real answer was a bailout - because the alternative was revolution - the kind where bankers and securities brokers and other people who traded paper and made money from nothing wind up swinging from lampposts with an "I-Fucked-Everyone" sign around their collective necks - and as most of these people were friends of the aforementioned Sleazy Prick named Bush, he went ahead and forked over the cash.

Now, what did they do with it?

They turned around and said, "We don't believe this is getting any better any time soon.  Let's park it all offshore so if the whole thing really does collapse, we have ours, and fuck-all for everyone else."   This, by the way, is precisely what they did - the intent was that the money would be used to jump start the economy - but human nature being what it is, the cocksuckers who run the banks had other ideas.

Guess what else?

All those bad loan-instruments called 'derivatives'?  They're still out there, gathering dust, to the tune of over a quadrillion dollars. 

Now, if the collective wealth of America is around $80 trillion, and there's a quadrillion dollars of bad paper in circulation, it doesn't take a rocket scientist - or an economist - to figure out that there's never going to be enough money to cover all this bad paper.  Hell, there's not enough wealth in the WORLD to cover this.

You might say, "Gee - Will's really down on unregulated capitalism", and you'd be right.   Smarter people than me have seen for centuries that it's at fundamentall odds with any form of representative democracy, and usually works against people who want to live peaceful lives.

Capitalism was always about theft.  Any other definition is just apologetics (that's the art of convincing someone that something which is really either indefensible, evil, unprovable, or all three is actually true).

Because lobbyists really run the halls of our legislative bodies, the recent 'reform' is going to serve the bankers and other folks who hold your money supply hostage.  They write the rules.  And the rules serve them.

As the whole sorry mess implodes into what they're going to call a 'double-dip recession' (I love that term - it's like ordering up a shit-flavored ice-cream cone - Two Girls; One Cup, gone global) most of us won't be smart enough to look for the exits - that is, if we're capable of living life outside the money-economy at all.  We're going to have to take it on the chin, yet again, in what will finally be called a Depression. 

And before you say, "What about a straight-up revolution?", I'll say this - the average American is still a moron.  The permanent uneducated, skill-less underclass, about 60% of the population, wouldn't have the first clue what to do - and the government will be there to lock the borders down and prevent anyone from leaving who might be interested in so-doing - because they need a permanent supply of cannon-fodder for their empire, and cheap labor for the mines.

The good news is that, for good or ill, the show's about over.  We've destroyed our capacity for production, having handed it over to a cabal of assholes who've not only convinced us that it's right - they've convinced most of us that we actually want and like it.  These same cocksuckers have also convinced most of us that the only thing better for Cletus than popping open a generic brew, then watching DaisyMae take off her top, get on her knees and work up a sweat givin' him a blowjob on a Friday night is turning on the wide-screen while she's down there working, so he can watch his kid kick some raghead-ass in a town whose name none of them can pronounce.

That he's paying twice as much for the beer as he did in 1985 doesn't concern him - neither does the fact that DaisyMae had to work at Wal-Mart all day before coming home and fulfilling his weekly fantasy.  He also doesn't care that he's being bled white come tax time for the privilege of watching his son on TV over in the Sandbox.

Because life is good for Cletus.   He's got his beer, his blowjob, and his boy on TV to show him why God, guts, guns - and thirty years of Neocon misrule - made America the Greatest Nation on Earth.



Source: http://astranavigo.blogspot.com/2010/07/economics-in-one-easy-lesson.html