Survival__ Structuring Prosperity for Yourself and the Nation - Charles George Smith [111]
Stocks
Stocks were bound to fall as well, since they were being inflated by a number of factors related to the outright greed and entitlement created by this "new era" thinking. First, many companies who once only manufactured products decided to financialize themselves, i.e. GM, which went from only manufacturing cars to providing GMAC financing. Second, chief executives found their huge bonuses tied to stock prices, so they found ways to manipulate demand/value, and thus stock prices, by buying up their own stock, or better yet by leveraging their assets 30 to 1 to expand business, merge with other companies in huge multi-billion dollar deals. Great paper profits mean great bonuses even when you are cannibalizing stability.
Third, housing and other irrationally inflated sectors provided stockpiles of illusory consumer equity and short-term job growth, encouraging a consumer spending orgy on a range of goods and services that buoyed the economy. Fourth, for eight years a presidential administration and its entire executive branch allowed industries to write environmental laws allowing for indiscriminant toxification of the environment, waste in energy, and pliant, absentee oversight in agencies like the Security and Exchange Commission. We are now coming to terms with the fact that environmental and economic limits are and will continue to force a decline in manufacturing and sales. Those cut GM dealerships and factories are not coming back.
Conclusion:
Believe it or not, the exposure of these falsehoods and a return to real economy should be the basis for optimism not pessimism. I, for one, am only too eager to leave behind the anxiety mixed with empty hedonism of a debt-driven economy. We now have a pressing need to commit to creativity, transparency, honesty, accountability, and real prosperity.
Our Greek tragedy lies not only in the economic hole our irrational bingeing has left us with, but the moral, physical, environmental, and character hole. It is no surprise to me that skyrocketing obesity, approval of torture, toxic products from China, the burying of a perfectly functioning electric car (GM’s EV-1), and the out-of-control cost of sick profiteering (mistakenly called health care) all happened to attend this delusional phase of our economy.
Thank you, Zeus. I would like to end this chapter by noting that Zeus' explication of the Quadrillion Dollar Scam implicitly included several key features of the State/Plutocracy partnership which are covered in other chapters:
1. The existence of a parallel, formal "shadow system" of banking and finance which is essentially State-sanctioned fraud and looting.
2. State sponsorship of private Financial Elites' risk-taking via guarantees, backstopping and bailouts.
3. Information asymmetry: the State and Financial Elites have knowledge of the "shadow system" which is not available to citizens or non-Elite investors.
4. The "stability" of the State/Plutocracy financial system is entirely illusory.
As illusions of stability give way to devolution, we turn next to Models of Transformation.
New concepts in this chapter:
Paradox of plenty
Counterfeit value
Parallel, formal "shadow system" of banking and finance
Information asymmetry
Chapter Seventeen: Models of Transformation
Given the inevitability of some fundamental transition within the next decade or two, it is equally inevitable that the human mind seeks some pattern, model or cycle that will help predict the coming Transformation.
There is an inherent (ontological) uncertainty in the human future because our own choices and actions shape that future. Thus any attempt to model or predict the future is in essence predicting human behaviors--a highly uncertain enterprise.
Nonetheless it is instructive to outline several models of "system