Rising Tides, Sinking Boats

It's virtually impossible to imagine anyone being surprised by the report that 85 individuals now possess as much as half of humanity. Now, there are qualifiers of sorts -- if you're even an average schmuck in the US or Europe, chances are that in terms of assets and income, you're ahead of a healthy chunk of folks who live on a dollar or two a day, and don't own a pot to piss in. The average American frequently forgets (or doesn't even know) that 1 in 3 people live in either China or India, and 1 in 2 -- half of all human beings -- live in Asia.

Still, as the Krugster points out in what has become more or less a weekly homily to be ignored by our betters (or bettors), inequality is increasing everywhere, here as much or more than anywhere else. This seems to be mathematically at odds with the supply-side mythos, the Reaganauts who spoke wistfully of "trickling down" and a "rising tide lifting all boats." There is only so much stuff even magnificently wealthy people can buy and own and use, so it gets hoarded or "invested," usually overseas in both cases so's to avoid paying even a percentage point or two on their precious.

I politely suggest that if you find yourself on the short end of the stick, your options are few and far between. You can bend over and take it for the rest of your life; you can talk about how much it sucks, as if Barry O or Elizabeth Warren will actually do anything about it. Sooner or later someone, or some group, will choose the violent insurrection option, but the problem there is that usually an ineffectual or flat-out wrong target is chosen. Political figures operate at the behest of their owners; they have little choice but to dance with them that brung 'em.

Which leaves identifying properly the operators of these collectively ruinous enterprises, the soulless bastards who would rather dump a kajillionty dollars into astroturf teabagger propaganda efforts, than to put the same money -- or even less -- into something that benefits someone other than themselves. The animals Krugman describes, the smug, vile pricks who want to be Leo DiCaprio in The Wolf of Wall Street, always get away with it, leaving their rented dogsbodies in DC to take the abuse and hyperbole, while they scuttle off to the Hamptons or the Bahamas and hoard their pelf.

Obviously, not every single wealthy person is a shiftless douche who inherited every dime they have. But many of them are, and act like it, or act like they're the only ones who have ever worked for anything, and everyone else is just some worthless combination of dumb and lazy. Worse yet, even among those that earned every cent they got with no help from anyone at any point in their lives, they mostly (Warren Buffett being a notable exception) persist in avoiding any and all taxes if they can help it.

As we always say, this is not politics, it's math. Increasing inequality by definition means reduced opportunities and mobility for everyone else. To the people who refuse to say anything bad about them because they hope to be them someday (just read the LA Times comments, if you can stomach it), all you can tell those folks is, good luck with that. They might as well spend their entire next paycheck on Powerball tickets, for all it'll get them.

So let's get after these assholes, once and for all. Properly identified, one then has the option of bringing out the tumbrels and guillotines, or better yet, developing ways to disintermediate them. Their worst nightmare, the unproductive rich, is for their rackets to no longer work, the idea that they might actually have to work for a living. Refuse to participate in their system. This is why Bitcoin is starting to attract so much scrutiny, as is Silk Road, Kim Dotcom, and other players and aspects of the parallel system. They can't stand the idea that one day, enough of us might come to the realization that we can do just fine without them, that we never really needed them in the first place.

Money and value are, after all, simply tacit agreements on what things are "worth" for trading. What would happen if enough people decided that they no longer agreed with that collective understanding? As the Orlov article points out, even a 10% hit would cripple them. It would cascade downstream -- but it already has been, and will only get worse anyway. Might as well have at least some control over our fates, right?

Stockholm Syndrome; Or, Serfs Up

I swear to the Flying Spaghetti Monster that at first glance, I thought this was an Onion parody. Nope, just a grotesque, sloppy blowjob to the takers who pretend to be makers. Apparently the line forms to the right and extends around the world to orally gratify the fine upstanding rentier thieves. (Fantastic takedown of the article here as well.)

And that's really what these assholes are -- they're bookmakers, racketeers. They don't produce, or even truly invest, in anything. They take bets and skim the vig, regardless of the outcome of said bets. They borrow money from the government interest-free, and lend it to the peons at three, or six, or ten percent. That's not industry, it's usury.

It's bad enough that animals like Blankfein and Dimon are allowed to plunder at will in this wretched, Rubinized clusterfuck of an economy, this teetering wigwam of rackets and machinations, undue political influence and hyper-disparity. It's somehow even worse when someone is so lacking in self-awareness, or even basic human decency, that they can so shamelessly defend them, and shit on people who actually work for a living.

As long as working-class mutts continue to be willing to be gulled into voting against their own rational self-interest, as long as they're content to be the proverbial chickens voting for Colonel Sanders, it's going to be like this. One holds out hope for the tumbrels and guillotines, for the thieves and their soulless propagandists, but it won't happen, not until things crash and get too far beyond repair, if then.

As I've become fond of saying more and more lately, I hear Costa Rica is nice. Life is simply too short to waste in fighting the few who own everything, and their highly-aid dogsbodies. Somehow this bullshit system has bamboozled otherwise intelligent people into cutting their own throats, miring themselves in perpetual debt and wage slavery. At this rate, I'll probably spend the rest of my life paying interest on $200 textbooks, in exchange for a worthless degree.

Maybe living in a hut on the beach, swimming, surfing, playing guitar, is the way forward from the worker's paradise we've created here, where people spend most of their time sending each other silly meme generators and tweeting racist babble. There's no better day than today, no better time than now. It's a worthwhile goal. Let's all check out, see how the masters' spreadsheet-diddling works out for them.

I Wept Because I Had No Titanium Drivers, Until I Met a Man Who Had No Top Flight Balls; Or, Going John Golf

In which a man who has made mid-eight figures (including nearly $50M last year) income for hitting a ball around giant lawns across the planet informs us of his most sorrowful plight. Not only might he have to flee the slums of La Jolla, not only will he no longer be able to buy the Padres, he may have to retire, at the ripe old age of 42. Talk about going John Golf. (See what I did there?)

I hope you takers are happy now. Keep poor ol' Phil's fate-worse-than-death in mind next time you're trying to figure out how to pay your utility bill and buy groceries at the same time. That's what you get for going to (snicker) college, instead of learning how to whack a fucking ball real well. Suckaz.

Me Too, Part 2: This Time It's Hilarious

Guess I'm just in a me-too mood ths afternoon, or maybe I'm just trying to avoid working on the e-book projects I've committed to. Whatever. This "fuck you" response to the high-horse teabillies is one of the most eloquent ass-poundings I've come across lately. Enjoy.

Electile Dysfunction, Reverse Galt's Gulch Version

What if the 99% pulled up stakes, left for the emerging economies -- where the bloody jobs are at, mind you -- and left it for Sheldon Adelson and the Koch Brothers and the rest of that lot? They're buying the election anyway, so maybe just getting the hell out, and letting them sell shit to each other, would just resolve the problem all the way around.

They already own everything anyway, and more is never enough, and they won't stop until they have it all, and all those icky poor people learn their damned place. So what's our place -- here, taking shit from these soulless humps for the rest of our lives, hoping for a scrap from the table from Obama and his sold-out friends, or escaping to Brazil, Costa Rica, Slovenia, somewhere with, ahem, a slightly lower disparity of income, affordable health care, a political system not completely in thrall to the Scrooge McDuck class of endless money-grubbing and people-collecting? Is that too much to ask? Why yes, yes it is.

No doubt most of us will still go and vote between Team Horseshit and Team Cowshit, if only to maintain the pretense that it still counts, that it won't get lost in the shuffle of pelf and stupidity, that it doesn't smell to high heaven.

But deep down we know the truth. We'll go back to the Sands and give Shelly Adelson more of our credit-card advances, and guzzle more ten-dollar Red-Bull-and-vodkas to try to forget that Lucy always, always yanks that football. When it comes to voting to pick our own pockets and cut our own throats, nobody does it better than us.

Hamsters on a Wheel

Let's cut the proverbial shiznit, a'ight? The "downturn" does not affect everyone, only almost everyone. But not anyone who matters. Have you checked the Dow lately?

The rentiers and grifters and credit default swap scumbags who lawn-darted the economy in the first place are making just as much money as they ever were. And fuckin' A if they don't practically seethe with pure contempt at the peons who dare question their deeds, their judgment, the consequences of their noble actions.

They get all bent about how hard they slave for what they earn, as if 70-hour weeks in an air-conditioned skyscraper with a supply of The Macallan and Ketel One and on-demand blowjobs from the secretary is such a tough ride compared to some unlucky schmuck who has to work three menial, stultifying jobs just to make rent. It does not seem to even occur to them how fucking galling that is to people who are not quite lucky or clever enough to have mastered the black art of corporate bookmaking, and therefore must actually work for a living.

The, ahem, "philanthrocapitalism" is all well and good, but perhaps doing things that actually have impact on this nation's most persistent economic affliction -- its banana republic level of income disparity -- might alleviate the resentment that troubles them so. Failing that, they could always make good on their threats to go Galt on us. Really, I just don't know how the rest of us would manage without being forced to bankroll their collateralized debt obligations.

Dirty Rotten Scoundrels

Perhaps you recall Paul Sullivan's mewling plaint a couple weeks ago about how the rich are barely able to eke their way through life these days. Well, he's back, posturing and pouting at the response he received, as if he truly expected something else. "Gosh, thanks for opening my eyes, Paul! I mean, I got laid off from my job six months ago and haven't been able to find anything, and my ARM just went haywire so I'll probably be living under a bridge by Christmas. But just knowing that somewhere out there is a hard-luck family in Greenwich that might have to keep a more watchful eye on how the trust funds are distributed, that has to hedge their commercial real estate investments because taxes might go up a few points, that's just wrong." Is that what people were supposed to say after wading through that self-serving piffle?

Apparently so, and certainly Steve has already conjured up a perfectly good roaring-populist response, so I won't go there right now. There are a few things worth pointing out, such as the individuals whom Sullivan chose to interview for his follow-up:

Eric Dammann, a Manhattan psychoanalyst

Brad Klontz, a financial psychologist in Hawaii and a co-author of the forthcoming book, “Mind Over Money: Overcoming the Money Disorders That Threaten Our Financial Health”

Robert Clarfeld, president of the wealth management firm Clarfeld Financial Advisors

William Woodson, managing director at the Family Wealth Management group at Credit Suisse

Lyle LaMothe, head of wealth management in the United States at Merrill Lynch Wealth Management

Quite a topical cross-section, no? To put it in Simpsons terms, this is like profiling Homer's mindset by interviewing Mr. Burns, Smithers, Rich Texan, and Rainier Wolfcastle. And of course Sullivan, and the bookmaking lackeys he interviews, would rather blame the victims for their unhealthy outlook than admit the possibility that there's a deeper cause for resentment here.

There are millions of people who work at least as hard as the wealthy, and not even get by, much less get ahead. But that's part of life, and most of them, unfortunately, accept that lot. What the peons resent is the lack of accountability on the part of the banksters and their henchmen, the refusal to accept any responsibility for what they've done, and what they expect everyone else to pay for. They played with other people's money (OPM), made stupid bets with it that didn't even work on paper, and then got more OPM to cover those losses and more OPM to play with again. And no new jobs are coming of it, and all they're doing now is re-inflating the previous bubble.

The line from my last column that prompted the most responses was about how the wealthy weren’t sleeping well either. The vitriol in the e-mail showed just how deep the anger against the rich is.

Yet put simply, this is not healthy. After all, if you’re wealthy and no one likes you, you still have lots of money. But if you spend your free time obsessing about the rich, you could end up in worse shape emotionally, personally and financially.

Ah, no. You're the one writing tedious mash notes about the rich, sporto. It just never occurred to you that, in a country where 1% of the population already controls over 40% of the assets, that a majority of the people out there who hear nothing but a giant swirling sound creeping up on their lives don't give a shit about a bunch of trust-fund babies and hedge-fund profiteers.

These swells expect to be absolved because they fund symphonies and scholarships, but the symphonies are basically for themselves, and scholarships just underline the fact that higher education (not to mention textbook publication) is increasingly a scam on par with the health-care system. The implicit threat is that they'll take their ball and go home if the plebes don't give them sufficient respect, and they're bound to do it anyway, if only to preserve their toehold in the vertically-integrated economic strata. The main thing is that they prove to everyone else that they feel no guilt about their XKR, even if it was earned merely by percentage-point diddling and spreadsheet manipulation.

When Paul Sullivan bothers to talk to someone who makes less than $100K/year, then maybe the bewildered herd will take him seriously. I think we all get that (apologies to Upton Sinclair) it is in his interest not to understand that rather obvious idea. But he is being deliberately obtuse if he can't see why his toadying and cheerleading is received with hostility.

Future Schlock

Really interesting post and discussion over at The Oil Drum, just to get the ol' futurism juices flowing (ewwwwww). I have no value judgments as to whether it's true or plausible, fair or foul, moral or indefensible, or merely the natural by-product of getting one's swerve on whilst reading World War Z and watching Children of Men. But it's certainly provocative.

I would, in fact, submit that many of us are living out a similar scenario, to a much smaller scale and degree, obviously. And if we're not, perhaps we should consider doing so. But think about it -- half the world lives on a dollar a day, which means that pretty much every American and European at the very least is subconsciously protecting their nut. Just making a token effort at the notional advantages of upward mobility is a form of socioeconomic self-stratification.

And for every case where that may be a "bad" or "unfair" thing to do, you can make an equally (or perhaps even more) valid case for it being the most rational thing to do. Let's say, just to pick a random example, that you are an idealistic sort of person, or at least would like to be. You endured the last eight years of Cheneyism, and the previous eight years of Republican witch-hunts and Clintonian triangulations and debaucheries. You may even be old enough to recall the predations of Reaganbush. You are battle-scarred and war-weary, in the political sense. You realize that they're all full of shit, and that said realization is every bit as much a part of growing up as realizing the truth about Santa Claus and the Easter Bunny.

So when you cast your sacred lot not just against the least-offensive douchebag, but actually for someone who finally tickles that funny bone of idealism a bit, someone who not only promises Hopenchange, but more importantly accountability, it will harsh your mellow even more to find out that you have once again been rolled. Worse yet, you see that stupid people have somehow managed to become stupider, and more vitriolic.

Suddenly we're in a bad movie where idiots are strapping themselves with assault rifles to attend health-care rallies, and recipients of government largesse have decided it is their sacred mission to disrupt said debates with moronic invocations against the same government beast that keeps them alive. (It is almost a mathematical axiom that these idiots also have the highest percentage of family members who are on some other part of the dole, because they're too fucking dumb and/or lazy to go to Planned Parenthood.) The media's role is to give the screamers a radically outsized voice in the debate, and the governing party's role is waver and cater to that stupidity. Maybe when they get that eightieth Senate seat, they'll come through with all that Change they promised.

So really, faced with all that, friends 'n' neighbors, why wouldn't anyone who had the means set about backing slowly away from the toxic retardation of their fellow citizens and the dickless incrementalism of their elected representatives? Doesn't necessarily mean heading for the rammed-earth bunker in the hills with the raincatchers and solar panels and a few Saigas (though there are days where that sounds better and better), but it does mean judiciously assessing the situation and planning accordingly. You cannot get out of a debt-leverage financial crisis by leveraging more debt; you cannot have an equitable recovery by only bailing out the few hundred people who caused the problem in the first place. That's not politics, that's just arithmetic. What they're doing is not going to "work", except in the short term, and except for their own immediate interests.

The important thing is the basic realization that nobody, not Barack Obama, and certainly not the vipers at Goldman Sachs, give a shit what happens to you. The Republicans, vile as they are and unencumbered by facts or intellectual honesty, are at least more honest about their sociopathy. But in the meantime, I dunno. Be idealistic about individuals, but cynical about people. Be skeptical of people who promise to "help", or at least be aware of what's in it for them. Stop watching the network news, and stop voting (except, of course, when the Republitards offer up their inevitable Sarah Palin/Lonesome Rhodes ticket in 2012) -- the best way to disempower liars is to ignore them. That goes for the health-care nazi protesters as well; those animals need to kindly fuck off and die already.

It's been a while since I've had a good, solid rant on, and damn it feels good to be a gangsta. But I do seriously think that we do not necessarily have to be wealthy to have our own "separate peace". We just have to pay attention and plan ahead, live within our means, keep our skills sharp and keep learning new ones, be nice to those in our lives (and on our teevee screens) who deserve it and rid ourselves of those who just bring toxic baggage with them. Be our own mercenaries, basically, rather than worrying about the bloated plutocrats who think they should rent some to save their own sorry hides from the seething masses they helped perpetuate.

The Reckoning

Although I'm not quite ready to give up on what's left of civilization and hide out in a mountain cabin with a couple of SKS rifles and a few hundred pounds of lentils and beef jerky, it's still very difficult not to agree with the alarmists' possibly overwrought prognostications, rather than the too-rosy views of the triumphalists. Jim Cramer clearly has not learned anything from his week of public contrition and puling excuse-making for Jon Stewart's mighty wrath; already Cramer is publicly assuming that things have bottomed out sufficiently, are on their way back up, and is doing something called a "bull dance".

I guess I haven't really sat through the man's show to any meaningful extent, but has he always been that schticky? I mean, I get that he's trying to make an inherently dry subject more "entertaining", but seriously, what sort of person takes their financial cues from someone who straps on clown shoes in the morning? No wonder everyone's going broke. One should assume these periodic upward spasms of the Dow are either an indication that another half-million people are out of work, or another scheme has been dumped on the backs of future taxpayers, or that the short-selling is continuing apace, and the uptick will be offset by a corresponding drop in a few days.

It's not class warfare to assert the obvious -- that what benefits Wall Street the most these days is more likely than not intrinsically poisonous to the average American's well-being. The past six months -- and more importantly, the next six months and more -- have made and will continue to make that abundantly clear. Instead of a sound-effect and sound-bite wielding finance teevee clown, perhaps an actual serious economist can shed more light:

Our future could be one in which continued tumult feeds the looting of the financial system, and we talk more and more about exactly how our oligarchs became bandits and how the economy just can’t seem to get into gear.

....

The conventional wisdom among the elite is still that the current slump “cannot be as bad as the Great Depression.” This view is wrong. What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.

Profit is only profit if value or wealth is created in the process; otherwise, it is merely the creation and redistribution of debt. The average American's wages are about what they were thirty-five years ago, despite productivity gains, despite comprehensive changes in workplace management and process design, because the geniuses at the top decided that they could better manage the gains than we could, by shoveling it into a financial system whose primary feature -- again, rather than creating actual, physical wealth -- was to facilitate capital mobility.

Creating a billion cheap shirts in a Chinese sweatshop, or a million shitty grocery schooners in Detroit, is at least the generation of tangible products; credit default swaps and derivatives are merely assholes playing poker with everyone else's money, expecting to be handsomely rewarded in the process, while everyone else figures out how to get by on a little less every year. It has resulted in an unconscionable level of disparity, especially for an industrialized nation.

So as I've reiterated probably too many times already (but as long as we persist in absolving incompetent flunkies of their past crimes, and abetting them in future ones, it bears repeating), the likely scenario is not some cataclysmic Mad Max potboiler, it's something more like this:

America is devolving into a third-world nation. And if we do not immediately halt our elite's rapacious looting of the public treasury we will be left with trillions in debts, which can never be repaid, and widespread human misery which we will be helpless to ameliorate. Our anemic democracy will be replaced with a robust national police state. The elite will withdraw into heavily guarded gated communities where they will have access to security, goods and services that cannot be afforded by the rest of us. Tens of millions of people, brutally controlled, will live in perpetual poverty. This is the inevitable result of unchecked corporate capitalism. The stimulus and bailout plans are not about saving us. They are about saving them. We can resist, which means street protests, disruptions of the system and demonstrations, or become serfs.

And we'll go along with enhanced security measures to ameliorate our fears, as a substitute for real investment in local communities. Better security would make some sense as a complementary measure, but not as a replacement for fostering local solutions. The state continues to step over dollars to pick up dimes, as the saying goes, because there's no disincentive.

And it's becoming clearer by the day that all the happy talk about "change", regardless of Obama's possibly nobler intentions, will be just that. He's too constrained by the entities who put him there to enact any significant change. He's already overcommitted to rebooting a failed system, hoping to jumpstart the patient's heart. His main advantage is that his ideological, political, and (ahem) intellectual opponents are mostly borderline retarded, where his putative allies are merely craven cynics and buffoons.

The conservatard bellowing over whether Obama is a socialist/fascist/floor wax/ dessert topping is entertaining, no doubt, but one rule of thumb these dipshits might consider is this (at the risk of sounding like Yakov Smirnoff): in a socialist system the government controls the banks; here the banks are controlling the government. Obviously, they're too busy congratulating one another over their revolutionary teabagging prowess to get this simple and obvious idea. But maybe the rest of us -- you know, the actual majority, as this cadre of loudmouths consistently polls under 25%, and most of them are either doddering morons who can't die off too soon, or people who are too intellectually dishonest or simply too stupid to bother with -- can find ways to disengage from this system of what is essentially debt slavery.

This is where it starts and ends. The only reason Wells Fargo is looking at record profits is because it has figured out another way to fuck honest people, either by jacking their credit card rates (and if you have credit cards and have not yet been told that your interest rates are about to double, regardless of perfect payment history, don't worry, you will), or picking their pockets directly through this bailout scam. This is the biggest fucking heist in history, period, and we are abetting it through our avatars of change. And the network media are never going to talk about it, not in real terms; when they're not cheerleading their corporate owners and financial decision-makers, they're thumbing their collective dicks over vital issues such as what kind of dog the Obamas will get. This is the kind of thing people have to start working around, if they are going to see any real change.

Or not, if one uses cultural artifacts as a barometer of a nation's mentality. The two biggest movies in the first third of this year are Paul Blart: Mall Cop (and I like Kevin James, but jeezus) and the third Fast and Furious sequel. The most-read books are usually either sob-sister mopes bearing Oprah's imprimatur, or ridiculous self-help tracts. Did anyone really need to plunk down twenty bucks for The Secret to figure out that thought and action motivated by "positive" rather than "negative" emotions tends to produce more "positive" results (aside, of course, from the ancillary anodyne effects)? Does anyone really need diet advice beyond "eat less, exercise more"? Yet there are entire industries built around the lack of taste, intellect, motivation, and willpower. No wonder we keep getting rolled by these cheap grifters so thoroughly and so regularly.

Idle Threats

The more these morons threaten to go Galt on the rest of us parasites, the more details they proffer, the more hilarious it becomes. Keep in mind that this (bowel) movement is all a reaction to having to pay three percent more in taxes when your income is over $250K, and there's no way the three panelists in the Speedos Media vlog make half that combined.

Now, I've no doubt that there absolutely are people out there who are stockpiling food, water, ammo, gold, etc., waiting for the grand collapse which, since we're refunding the bozos that started the mess, is not entirely out of the question. But these clearly aren't those people, and the difference is that the guys who are hoarding 55-gallon drums of rolled oats in the shipping container out in the back field aren't holding playtime conference-vlogs discussing it, nor do they pretend that quitting smoking is a way of sticking it to The Man (not to mention, of course, the symbology that smoking carries in Atlas Shrugged, assuming the dingbat actually read it).

Cafeteria Catholics are bad enough, but cafeteria Randroids somehow manage to be even more insufferable than the real kind. They might have less time to fritter away on crude philosophizing that they don't quite apprehend in the first place, if they could just get laid. Failing that, quit talking about going Galt and please just do it already.