Monday, September 22, 2008
The Invisible Hand
Adam Smith (1723 - 1790) and his Magical Pen.
PSAYINGS.5A.19. Thank God we can trust the government to look out for us, you know? It wasn't always this way. Here's something of a prophecy from nearly 20 years ago. It's from The Boomer Bible. Which continues to be right about a lot of things.
And so it will come to pass that the American Capitalists will invent industries that nobody ever heard of before,
2 Called management consulting,
3 And public relations,
4 And life insurance,
5 Not to mention advertising,
6 Which won't make anything at all,
7 But they'll be very well paid for not making anything at all,
8 Just like banks.
And since they've come up, it's important for you to know that banks will be an incredibly important part of Capitalist societies like America,
2 Because every Capitalist nation will always need a whole bunch of boring avaricious people in blue suits to watch everybody's money,
3 Because the most important principle in every Capitalist Nation is the principle that nobody can be trusted,
5 Except for banks, of course,
6 Which are extremely trustworthy,
7 Or why would they have so many boring drones in blue suits to watch over your money all the time?
8 Besides, if banks weren't trustworthy, why would people give them money and let them lend it to other people,
9 Without even asking the people who gave it to them in the first place?
10 Not to mention the fact that if bankers weren't trustworthy, they'd probably get involved in a lot of risky financial speculation that could cause a huge depression someday,
11 Which wouldn't do Capitalism any good at all.
That's why it will be such a good thing that banks will always lend money to the people who deserve it,
2 And will always use impeccable business judgment,
3 Because who could possibly know more about business than a know-it-all in a blue suit who thinks you earn money by lending other people's money to still other people who will do all the work and take all the risks,
4 While he sits in a giant office upstairs at the bank thinking up ways to get more money?
Eventually, there will be so many great bankers that they will build a city all for themselves,
2 Called New York,
3 Which nobody will be allowed into who actually makes things,
4 Except skyscrapers, that is,
5 Because the banks and life insurance companies and brokerage houses who deal strictly in money will all need their own skyscrapers,
6 With their names on them in giant letters,
7 Just so everyone will know that they really do make things,
8 Even though they really don't,
9 Which has a lot to do with the appearance of value,
10 And everything in the world to do with American Capitalism,
11 Which will have its headquarters in New York,
12 On Wall Street.
In fact, Wall Street will become the world capital of Capitalism,Here endeth today's lesson. Unless you're prepared to consider even more evidence that InstaPunk is always right. Nah. You don't want to do that. Think about Hope and Change instead.
2 And will become so fantastically successful that the people who work there will eventually forget practically everything you ever said,
3 Because they will know better than you,
4 About everything.
Chapter 38For example, they will forget about all your quaint definitions,
2 Because Capitalism isn't about creating wealth by creating value that didn't exist before;
3 Instead, it's about getting rich by getting hold of more money than other people,
4 Which is why value doesn't matter,
5 Since what really matters is being the swiftest,
6 And the fittest,
7 And getting up earlier than the other guy,
8 So that you can take his money while he's still asleep,
9 And use it to buy stocks on margin,
10 In the kinds of companies that can't help but succeed,
11 Which you can always identify because their stock prices keep going up,
12 Which is why everybody else is buying their stocks on margin too,
13 And so it's a good idea to buy yours earlier than the other guy,
14 So that you'll make higher profits,
15 And more money.
Chapter 39Actually (said the pen),
2 I have some not very good news for you,
3 Because when I told you the bad news about your ideas before,
4 I overlooked some,
5 Which I have been suddenly reminded of,
6 Because Capitalism will also lead to something really awful that people will blame on you,
7 Something called the Great Depression,
8 Which will start on Wall Street,
9 With a tremendous noise,
10 Which will sound like a single gigantic crash,
11 Even though it will consist of thousands and thousands of little crashes,
12 Made by thousands and thousands of phones slipping from terror-stricken fingers,
13 All over America,
15 Because the call they all got,
17 Was a margin call.
Chapter 40During the Great Depression, it will become obvious to everyone that Capitalism doesn't work,
2 Because millions and millions of people will be out of work,
3 And even worse than that, it will be discovered that there isn't any money at all in the Most Chosen Nation,
4 Except for the money that the richest of the fat-cat Capitalists still have squirreled away, of course,
5 Because all the money everybody else had before the Great Depression was borrowed from somebody else,
6 Who had also borrowed it from somebody else,
7 And so forth,
8 And so on,
9 So that there's only one thing left to do,
10 Namely, have the government step in,
11 And print up a whole bunch of money,
12 And start giving it away,
13 Which doesn't have much to do with Capitalism exactly,
14 But has a great deal to do with putting some food on the table,
15 For all the millions and millions of people who aren't fit enought to survive on their own.
Chapter 41In fact, this new idea of giving money away to the people who need it will catch on,
2 In a big way,
3 And become very very popular,
4 Because the politicans will look very statesmanlike giving away millions,
5 While the philanthropists will look miserly giving away their dimes,
6 Which is why the government will be delighted to discover how easy it is to take more and more millions away from the philanthropists,
7 So that they can have their picture taken giving it away,
8 Until lots and lots of people in the Most Chosen Nation on Earth will one day decide that they were wrong for all the years they thought it was the government who couldn't be trusted the most,
9 Because the ones who can't be trusted the most are the greedy Capitalists,
10 Who borrowed all that money,
11 And then threw it all away.
P.S. Time capsule moment. If you follow the "InstaPunk is always right" link, note that while I anticipated a Hillary nomination, I also suggested the electorate might be in the mood for a "super-smart" candidate. Isn't that really the basis of the Obama campaign? No experience. No accomplishments. No plans to speak of. But he's just "super-smart." Newt would have taken him apart in three debates. (And I mean absolutely nothing left moving on the field of battle larger than a toe...) But read the comments on that post. Everyone telling me I was wrong because they just knew conservatives had to bend their principles this time for the sake of getting elected. And the commenters weren't alone. Somewhat later in the day I crossed swords with Weekly Standard wunderkind Dean Barnett, who still hasn't regained any credibility after his long infatuation with Mitt Romney. When you look at just how nasty this campaign is getting, does anyone really think Mitt's sunny banality would play with the negative ads he'd have to be running by now?
So there's a second lesson of the day. Conservatives blew it this time, Because they had no guts. Their convictions and principles weren't proof against their fears and their media-induced anxiousness to compromise on issues that -- as I predicted -- would no longer be the determining factors in the 2008 election. The bad news? We may very well get ZERObama for president. That's an outcome that could have been avoided with a show of character by all you 'pragmatic' Romney, Giuliani, Thompson, and McCain supporters. (Peter: Don't you dare. Ron Paul was never a candidate; he was always only a badly written fictional character, Eugene McCarthy rewritten as a graphic novel for for the solipsistic I-pod set.)
Disgusted. Yeah, I'm voting McCain. But I'm still d-i-s-g-u-s-t-e-d.