Tuesday, October 7, 2008

Chips in the Casino

It doesn’t matter what color the chips in the casino are. The house always wins.

That principle continuously eludes people. Consider the simple narrative:

1) The Wall Street/Congressional elites worked together to relax lending and capital reserve standards to make money off financial crisis;
2) Financial markets crash. Wall Street/Congressional elites lose money;
3) Wall Street/Congressional elites come up with ridiculous “bailout plan” to steal $700 billion from the taxpayers;
4) They steal the $700 billion, but the market continues to drop, the economy slides into recession, and the $700 billion does not cover the full amount lost anyway.

If you accept the concept of money, this runaround makes only partial sense. Yes, the elites got away with the housing theft, the “bailout” theft, and all that, but with the huge losses the markets have suffered, their collective net worths’ have certainly gone down, right? I mean, if your $15 million trust fund is invested in the DOW, your mortgage-and-bailout plan just cost you several million dollars--right?

What is missing from this narrative is the understanding that money, per se, does not actually matter. Like the Democratic and Republican parties, it is part of the Stasis Charade: the process whereby the American aristocrats put on grand displays of process in order to maintain their hold on power. Money, credit and debt are just a distracting game, like the presidential debates or the Special Bulletin About A Missing White Woman, that give people something to focus on; something to play at while the elites run the world.

That is the answer: money--and all the numbers, counting, ups and downs that come with it--is irrelevant.

The riddle that this solves is: “Why do the elites do things that appear to harm the stock market, world finance, and the economy, thereby hurting themselves?”

Think about it: if the Wall Street bankers are so clever and evil that they could come up with this entire scheme, why would they be so dumb as to blow apart the stock market in the process?

The answer is that it doesn’t really matter to them what the stock market says, or what their bank account says. They control all those numbers; they fabricated them in the first place, and anything substantial that they do is planned.

The real game is power and control. Money is just an expression of it. If a wealthy family sees its net worth “drop” from fifty million to twenty-five million, what is the change? Absolutely nothing.

Here are the lives the elites lead, regardless of what the numbers say:

They will never have to do real work.
They will never have to get up in the morning unless they want to.
They will always eat the best food, and have the best medical care. They will always wear the best clothes, enjoy the best furnishings, and have numerous mansions.
They will always be able to travel the world, and buy whatever they want.
They have their choice of mates. They can buy dates or escorts domestically and abroad.
They can meet celebrities, influence important thinkers and artists, and become “part” of anything through donations. They get a voice, and can buy “immortality,” also through donations.

This is their life. They have it regardless of whether their net worth is twenty million or twenty billion. No matter how many “chips” of whatever “color” are in their pile, they get what really matters to them. No matter what. As long as their “numbers” stay above a certain range--fifteen million or whatever it is at any given level of “inflation”--they will always possess so much wealth that they can live the lives described above. Using the system of “numbers,” though, makes things seem fair to the masses, who will rationalize their own lack of “numbers” to their own lack of value. And so, in pursuit of numbers, they will be tricked into spending their lives working at things of actual value. They will produce the food that the elites eat, the services the elites consume, the children the elites date and buy, etc. And their numbers will always stay in an acceptable low range that qualifies them for “sustenance” and little else (or in many cases, does not even qualify them for sustenance).

That is the whole purpose of the numbers game. Because the human race can only provide extravagant lifestyles for so many parasites (elites, who produce nothing of value), the numbers game is necessary to keep the human race doing the providing, and at the same time, to limit the numbers of allowable parasites. The parasites are clever, and they do not want to be unseated.

How would they get unseated? Well, the big problem with the numbers game is that, by investing in all these rules in order to create an endless board game that keeps most people running like hamsters on wheels, the rules can occasionally result in a little bit of victory for someone. These someones are the American middle class--who, by providing cunning enough services in the whole game, and scrupulously saving, can bring their numbers up into dangerous levels. Say, they can accumulate two or five or seven million by midlife or retirement, and suddenly, they or their heirs threaten to become more elites. This would upset the elite balance, and cannot be allowed.

Now, you can’t do anything about the suddenly-rich. Those people have to be indoctrinated into the parasite system because it happens so rapidly there’s no way to stop it. But they are very rare, and can be balanced out by dying elites.

The rising middle class, though, is a regular, big problem to the established elite. Though the numbers game is cunning and very good at keeping most people on the hamster wheel, every couple decades or so, the upper part of the middle class can threaten to rise into the ranks of the truly wealthy, and become non-producers with the rest of the elites. I.e., they can use their savings to establish a family line that does nothing but consume, passing on wealth through businesses and trusts, and exit the ranks of the producers.

Society, though, cannot take this. If the numbers game allowed more people to become part of the “elites,” the cycle would not be able to perpetuate. As mentioned earlier, the human race can only bear the burden of so many parasites leading extravagant lives, before it breaks. And when it breaks, the parasites’ wonderous, star-studded lives will end. They will be thrown down with the rest of humanity, and forced to produce something useful to survive. And they already know that they can’t do that.

So, they need to protect the exclusivity of the parasite class. They need to guard the numbers game against the by-products of its own rules.

They do this by regularly “washing out” the rising middle class. Here is where inflation and financial crises come into play: by manipulating the game to cause periodic crises, those who have almost attained the heights of elite status can be knocked back down to the peasantry. Then the cycle can begin anew.

To understand this, imagine a society on the slopes of a mountain. Above five hundred meters elevation the elites have built their mansions. Most peasants have their houses at one hundred meters. As time passes, wealthier middle-class peasants begin building houses higher and higher.

When they get to four hundred meters, the elites release the dams, and flood the hills. All houses below five hundred meters are wiped out. The elites endure a minor reduction in their quality of life, but in return, everyone below four hundred meters has to start from scratch. And the cycle begins again.

This can initially sound like lunacy (and indeed, it is), but that is the narrative of the numbers game--the narrative that rests upon a blind faith in the value of money, credit and debt. But money, credit and debt are imaginary concepts, given meaning only by those who believe in them. They are not food, land, buildings, etc.

The reason the “washing out” scheme works is because at a certain point on the metaphorical hill (say, five hundred meters, or fifteen million dollars net worth, however you like it), you have enough resources to weather a crisis. You have enough resources to live without producing--enough resources to be a parasite/elite.

Secondly, at another point on the metaphorical hill (say, one hundred meters, or no real net worth), you have no real resources, and you have to produce in order to live.

“Washing out” means reducing to zero (or just washing a good ways lower) all people below the five hundred meter line. Everyone above the line will have the resources to survive the washing out, but almost no one below the line will.

And here’s the most important part: those people with almost, but not quite, enough resources to have reached the elite mark will be reduced to the beginning of the game.

That is how to understand the “bailout” and the “financial crisis.” The elites were not really hurting themselves; they were protecting themselves.

Think about who the stock market “drop” will hurt. The elites will go from thirty million to twenty million, or two hundred million to a hundred and ten. Oooh, frightening. Are they still eating at $80/entrée restaurants? Yes. Are they still traveling to the Bahamas every year? Yes. Are they still buying $50,000 worth of Christmas gifts for their spouses? Yes. Do they still own four houses? Yes. Flying first class or private jet everywhere? Driving an S500? Sending their kiddies to Harvard? Yes, yes and yes.

How are the elites hurt by this? They’re not.

Now, consider the middle class family with, say, a million and a half in savings earned over two working lifetimes of scrimping. The stock market drops, and their $900K retirement fund goes down to $500K. The real estate market crashes, and their house goes from $600K to $350K. All of a sudden, their retirement just got a little less easy. Instead of passing on a large sum to their heirs, they use most of what they have left up. Maybe they keep working longer.

Or the family with $5 million, drops to $3. Suddenly, they can’t afford that extra property. They’re not starving, but there’s a world of difference in investment income and future planning. Their ascent toward the top has just been stopped. In a generation or two (or less), they’re off the radar. Their holdings have been dispersed, and are no longer large enough to grow to something meaningful.

Here’s a better narrative of what happened with the “bailout” situation:

1) The 90s tech boom and stock-market rise created dangerous levels of wealth in the American middle class;
2) The Wall Street/Congressional elites worked together to relax lending and capital reserve standards to create mortgage crises and financial market crash;
3) Financial markets crash. American stockholders lose a substantial amount of money;
4) Wall Street/Congressional elites come up with a “bailout plan” to steal $700 billion more from the taxpayers, thereby perpetuating the crisis and harming the financial markets further;
5) They steal the $700 billion, the market continues to drop, the economy slides into recession, and the rising American middle class is further segregated from the elites;
6) Elites party worldwide! Life is good!

It doesn’t matter what color the chips in the casino are. The house always wins.


Anonymous said...

I think most people sense what you write but are caught up in the so-called crisis unable to articulate the underlying sinister deeds of these thieves.
Thank you for this much needed analysis.

SourDove said...

"That principal continuously eludes people."

I wish I'd typed that, and I will yet.

Manitor said...