Regardless how many analyses I read, how many explanations, I remain convinced that our financial crisis traces back to a fiscal proposition which is logically absurd: It is possible to generate wealth without in any way increasing the value of the instruments and products in play.
Aha! You will say. You are wrong. SOG. Consider the collective wisdom, experience, and expertise of all those money-changers. They should also have been able to see this profound truth which you — monumentally maladroit, by your own admission — claim to have seen. And if they saw it, how could they rationally continue on what would clearly have been a disastrous course?
What enabled them to continue was the IBG attitude. That’s “I’ll be gone.” When the whirlwind arrives, when the chickens come home, at the day of reckoning, I will no longer be here. Someone else — forgive the indelicacy of the phrase — will have to catch the shit.
A drab re-working of Louis XV (or Madame de Pompadour): “Après moi, le déluge.” The French are much better at this sort of thing.
That is what was going on in all the banking and insuring manipulations. A piece of paper representing a fixed asset was re-named, re-packaged, or re-structured, whereupon it was represented (nudge-nudge, wink-wink) to have increased in value. Notice that it was the paper which was advertised as having increased in value, not the reality which it represented.
Later, I will ramble at inexcusable length about metaphors and reality. Have a cup of strong coffee ready to hand.
Once again, you will say, Aha! You are wrong again, SOG. Look at all the wealth that was created, look at all the millionaires and billionaires. They have money. Where did that come from if not from the revaluation of these pieces of paper, which you so casually dismiss?
Please be seated when you read the answer, and wearing a sturdy helmet.
Yes, there are millionaires and billionaires. They do have money. They got that money from you. In short: they robbed you.
They did not directly rob you, of course. They all were gentlemen (and some ladies, I believe, as well). Gentlefolk do not rob others, not even the hired help, except in times of direst emergency. No, what they did was rob the public till — in this case, the banking system.
Now, the banking system (and its ugly step-sisters, the insurance companies) must be reimbursed, else they will cave in, crumble, and collapse. In fact, they already have done so, and because the rest of us are so dependent upon them, all members of society are required to pitch in and push them back into their original upright positions.
And all are pitching in. Equally. Which is to say, you, who gained nothing in the debacle and very likely lost something, will be required to make restitution. However, those who caused the debacle and profited handsomely thereby will also be required to make restitution. They will pay back into the system — through our tax authority — at the same rate you do.
Which is to say, having pilfered ten million, they will pay back one thousand. You, who pilfered nothing and lost perhaps a hundred, perhaps many thousand, will also pay back one thousand. That seems fair enough, does it not?