101 ways to get rich without doing anything socially useful
Why do we have this thing called a “financial crisis”? Why have we had such a crisis periodically ever since the United States was created? What changes occur or what happens each time to bring on the crisis? Do we forget how to make things that people need? Do the factories burn down? Are our tools lost? Do the blueprints disappear? Do we run out of people to work in the factories and offices? Are all the services that people need for a happy life so well taken care of that there’s hardly any more need for the services? In other words: What changes take place in the real world to cause the crisis? Nothing, necessarily. The crisis is usually caused by changes in the make-believe world of financial capitalism.
All these grown men playing their boys’ games. They create an assortment of financial entities, documents, and packages that go by names like hedge funds, derivatives, collateralized debt obligations, index funds, credit default swaps, structured investment vehicles, subprime mortgages, and dozens of other exotic monetary vehicles. They create all manner of commercial pieces of paper, of no known real or inherent value, backed up by few if any standards. Then they sell these various pieces of paper to the public and to each other. They slice and dice mortgages into arcane and risky instruments, then bundle them together, and sell the packages to those higher up in the pyramid scheme. And some of those engaged in this Wild West buying and selling become millionaires. Some become billionaires. They get Christmas bonuses greater than what most Americans earn the entire year. Is all this not remarkable?
And much of the buying is not done with the buyer’s own money, but with borrowed funds; “leveraged”, they call it. The pieces of paper sometimes represent commodities, but the actual commodities are not seen, may not even exist; if the seller demanded the buyer’s own funds, or the buyer wanted to see the goods, the whole transaction would freeze. They sell “long”, expecting the price to rise; they sell “short”, expecting the price to fall; they sell “naked short”, which means they neither possess nor own what they’re selling; a name for each gimmick. They take ever-greater risks buying and selling increasingly-esoteric pieces of paper. It’s a glorified Las Vegas, casino capitalism.
These pieces of paper can be so complex that many of those buying and selling them do not fully understand them; no problem, they just resell the pieces of paper to someone else at a higher price, even when one or both parties know that the paper, while pretending to be payable debt, is virtually worthless. The government, even when it tries to moderately regulate this Monopoly board, can at times also be confused by the complexities of the pieces of paper, compounded by the less-than-transparent practices that envelop the transactions; a potpourri including speculation, manipulation, fraud. Billionaire financier Warren Buffett has called the pieces of paper “weapons of mass financial destruction.”
The boys of finance have been playing their games for years, and so at each stage of the process there are insurance policies allowing the players to hedge their bets; they insure, and they re-insure; hopefully covering themselves against the many risks of the game, often knowing that they’re trading in questionable debts; the giant corporation AIG, a major player in the insurance game, has just been taken over by the federal government. And with each transaction, at each level, someone earns a commission or a fee. There are also other firms whose purpose in life is to go around rating various players and their pieces of paper and their credit worthiness and giving seals of approval which are relied upon by investors. Some of these rating firms, we’re now learning, have been surprisingly incompetent, when not simply dishonest.
President Roosevelt, confronted in the 1930s with similar players, called them “banksters”.
It’s all built on faith, as fragile as the religious kind, the belief that something is worth something because it comes with a piece of paper with reassuring words and numbers written on it, because it’s traded, rated, and insured, because someone will sell it and someone will buy it. The same market psychology, the same herd mentality, that went into constructing this house of cards built on pillars of greed can cause the house to collapse in a heap. But the Monopoly players keep their bonuses, and bow out with multimillion-dollar golden parachutes; while tent cities are springing up all over America.
Is this any way to run a society of human beings?
And the government is in the process of trying to bail out these reckless traders, these parasites, rescuing them and their system from their own nonsense. With our money; without a major restructuring of the Alice-in-Wonderland rules of the financial games, without instituting the toughest of regulations, oversight, and transparency, and with no guarantee that the spoiled-little-brat Masters of the Universe will act in any way other than their own narrow self interest, the rest of us be damned.
Capitalism is the theory that the worst people, acting from their worst motives, will somehow produce the most good.
There is perhaps some consolation. The libertarian and neo-conservative true believers will have a harder time selling their snake oil of privatization of Social Security or any other social program. Government regulation of matters vital to the public’s welfare may be taken more seriously. We may hear less of that old bromide that markets are inherently self-correcting. It may even give a boost to the idea of national health insurance.
And the libertarians and neo-conservatives are hurting and defensive, albeit not yet admitting to any new-found wisdom. A Washington Post interview with some true believers at the Cato Institute, where Ayn Rand’s picture prominently hangs, produced these quotations: “Too much regulation got us where we are” … “The biggest emotion we’re feeling right now is frustration that the media narrative is that this is a crisis of the free market, a crisis of capitalism, a crisis of under-regulation. In fact it’s a crisis of subsidization and intervention.” … “Capitalism without losses is like religion without hell.”
And just think: Cuba has been tormented without mercy for 50 years because it refuses to live under such a financial system.
Why I never watch presidential debates
During their September 26 debate, John McCain criticized Barack Obama for saying that, as president, he’d be willing to meet President Mahmoud Ahmadinejad of Iran. McCain stated: “Now here is Ahmadinejad, who is now in New York talking about the extermination of the State of Israel, of wiping Israel off the map … and we’re going to sit down without precondition across the table to legitimize and give a propaganda platform to a person that is espousing the extermination of the State of Israel … “
First it must be noted that Ahmadinejad, speaking at the UN earlier in the week, used no threatening language at all against Israel. What he said was that Iran was submitting to the UN “its humane solution based on a free referendum in Palestine for determining and establishing the type of state in the entire Palestinian lands.” So John McCain just made up a story and Barack Obama said not a word in contradiction to anything McCain said or implied about Ahmadinejad. And that’s it, America. That’s all you get. You’ve heard a Republican saying some awful things about an ODE (Officially Designated Enemy) and you’ve heard a Democrat who has no problems with a word of that. That equals truth, doesn’t it?
This matter of Ahmadinejad and “wiping Israel off the map” has been a heated issue for three years now. However, according to people who know Farsi, the Iranian leader has never said anything of the kind. In his October 29, 2005 speech, when he reportedly first made the remark, the word “map” does not even appear. According to the translation of Juan Cole, American professor of Modern Middle East and South Asian History, Ahmadinejad said that “the regime occupying Jerusalem must vanish from the page of time.” His remark, said Cole, “does not imply military action or killing anyone at all”. It’s the distortion of this to imply some sort of extreme violence on the part of Iran that has made the remark sound threatening.
Cole added that the quote comes from an old speech of Ayatollah Khomeini, leader of the 1979 Iranian Revolution, and “is just an inexact translation. The phrase is almost metaphysical. [Ahmadinejad] quoted Khomeini that ‘the occupation regime over Jerusalem should vanish from the page of time.’ It is in fact probably a reference to some phrase in a medieval Persian poem. It is not about tanks.”
At a December 2006 conference in Teheran, the Iranian president said: “The Zionist regime will be wiped out soon, the same way the Soviet Union was, and humanity will achieve freedom.” Obviously, the man is not calling for any kind of violent attack upon Israel, for the dissolution of the Soviet Union took place peacefully.
For a word-by-word breakdown of Ahmadinejad’s remark, in Farsi and English, see here:
Moreover, in June 2006, subsequent to Ahmadinejad’s controversial speech, Iran’s supreme leader, Ayatollah Ali Khamenei, stated: “We have no problem with the world. We are not a threat whatsoever to the world, and the world knows it. We will never start a war. We have no intention of going to war with any state.”
What’s the proper term to use to categorize a person who is … blindly patriotic, jingoist, an evangelical Christian creationist, gun and hunting enthusiast, National Rifle Association supporter; denies the science behind global warming, with a philosophy of “dig, dig, dig”, and in foreign policy: “bomb”, “bomb”, “bomb”; untraveled, uneducated, ignorant, a devoted book-banner, racist, opposed to equal rights for gays, fanatically anti-abortion, anti-feminist, and has a 17-year-old daughter pregnant and unmarried?
The proper American term is “white trash”. Or, as the honorable governor of Alaska apparently prefers, “redneck” — “Rouge cou” is what she called a business she registered.
And what do you call the person if on top of all that she declares in the year 2008 that Saddam Hussein had something to do with 9-11 and that “a surge in Afghanistan also will lead us to victory there as it has proven to have done in Iraq”? The proper term is “scary”, or perhaps “scary moron”.
And what do you think of this person when you learn that she believes that the war in Iraq is a “task that is from God”? I think this is actually a form of insanity. There are people in institutions all over the world charged with killing others, who insist that they were acting under God’s command.
And if the above is not enough to make you fall in love with the woman, consider that she believes that humans coexisted with dinosaurs 6,000 years ago; and have a look at a video of the vice-president/president-to-be undergoing an exorcism performed by a minister to free her body from “witches”. When we consider the flak that Barack Obama received because his minister is not in love with US foreign policy, imagine what Palin will get for having a minister who performs witch exorcism. Nothing.
So, have we forgotten anything about her charming belief system? Santa Claus? The Easter Bunny? Oh, she must have been kidnaped by a space alien. I hope some day to meet her and have her read my palms, my tea leaves, my aura, my horoscope, and my tarot.
When is a holocaust not a holocaust? When the perpetrators call it a victory.
Although the “surge” has failed as policy, it appears to be succeeding as propaganda. It seems to be the only thing that supporters of the war have to point to, and so they point, and they point, and they point. Allow me to point out that while there has been a reduction in violence in Iraq — now down to a level that virtually any other society in the world would find horrible and intolerable, including Iraqi society before the US invasion and occupation — we must keep in mind that thanks to this lovely little war more than half the population of Iraq is either dead, crippled, traumatized, confined in overflowing American and Iraqi prisons, internally displaced, or in foreign exile. Thus, the number of people available for being killers or victims is markedly reduced. Moreover, extensive ethnic cleansing has taken place in the country (another good indication of progress, n’est-ce pas? nicht wahr?) — Sunnis and Shiites are now living more in their own special enclaves than before, none of those stinking mixed communities with their unholy mixed marriages, so violence of the sectarian type has also gone down; and the powerful movement of Shiite leader Muqtada al-Sadr has had a cease-fire in effect for many months, unconnected to the surge. On top of all this, US soldiers, in the face of numerous “improvised explosive devices” on the roads, have been venturing out a lot less (for fear of things like … well, dying), so the violence against our noble lads is also down. Remember that insurgent attacks on American forces is how the Iraqi violence all began in the first place.
Just imagine — If the entire Iraqi population over the age of 10 is killed, disabled, imprisoned or forced into exile there will probably be no violence at all. Now that would really be victory.
No American should be allowed to forget that Iraqi society has been destroyed. The people of that unhappy land have lost everything — their homes, their schools, their neighborhoods, their mosques, their jobs, their careers, their professionals, their health care, their legal system, their women’s rights, their religious tolerance, their security, their past, their present, their future, their lives. But they do have their surge.
Politicizing and militarizing sports
A few years ago I wrote in this report:
A TV ad for Anheuser-Busch shown during the recent Super Bowl: An airport, a contingent of US soldiers in uniform is passing through, presumably on the way to or just returning from Iraq; the people in the terminal one by one look up, and slowly realize who’s walking by — It’s (choke) … Can it (gasp) be? … Yes! HEROES!! Real honest-to-God heroes!! The faces of the onlookers are filled with deep gratitude and pride. The soldiers begin to realize what’s happening as the waves of adulation sweep over them, their faces are bursting with matching gratitude and matching pride, their faces say “Thanks.” The screen says “Thanks.” Not a dry eye in the whole damn terminal. In the Soviet Union they might have been a group of Stakhanovite hero workers on the way to the factory.
Last month at the United States Tennis Open women’s final in New York, a woman comes out to sing “America the Beautiful”. Pretty common of course at sporting events in beautiful America. If it’s not that, it’s another well-known hymn to athleticism like “God Bless America” or “The Star Spangled Banner”. But this time, as she finishes singing, dozens of marines in full uniform march out and unfurl an American flag a mile long. The crowd eats it up. Two days later, at the men’s final, same thing plus four jet planes roar past above the stadium.
I wish I had been there. So I could have yelled out: “What the fuck does this have to do with tennis?” Hardly anyone would have heard me above the din of the patriotic orgy, but if anyone did, I would not be surprised if they reported me to the nearest authorities (and in present-day America one is never too far from authorities), and I’d be asked to accompany the authorities to the security office (and in present-day America one is never too far from a security office).
Norman Mailer wrote in 2003, a few weeks before the US invasion of Iraq: “My guess is that, like it or not, or want it or not, we are going to go to war because that is the only solution Bush and his people can see. The dire prospect that opens, therefore, is that America is going to become a mega-banana republic where the army will have more and more importance in our lives. … And before it is all over, democracy, noble and delicate as it is, may give way. … Indeed, democracy is the special condition … we will be called upon to defend in the coming years. That will be enormously difficult because the combination of the corporation, the military and the complete investiture of the flag with mass spectator sports has set up a pre-fascistic atmosphere in America already.”
Für meine deutschen Leser
My book Rogue State has a new German edition. This is an updated version of the previous German edition, with a much better translation. You can read about it at:
 Washington Post. September 25, 2008
 “Informed Comment”, Cole’s blog, May 3, 2006; www.juancole.com/2006/05/hitchens-hacker-and-hitchens.html
 Associated Press, December 12, 2006
 Global Research, January 20, 2007, http://www.globalresearch.ca/index.php?context=viewArticle&code=NOR20070120&articleId=4527)
 Letter to Washington Post from M.A. Mohammadi, Press Officer, Iranian Mission to the United Nations, June 12, 2006
 http://www.youtube.com/watch?v=pNvemHKXZFs. Also see Associated Press, September 25, 2008
 International Herald Tribune, February 25, 2003