Should We Ask Oprah To Rescue The Economy?

Point well made, friend! If foreign investors lose confidence in the dollar, then the U.S. government must look elsewhere to fund the continuous rollover in treasury bills, notes and bonds. Eventually, deep pockets will be needed if the government is to meet its Social Security obligations (a prospect within ten years). But it will take much bigger money than Oprah can marshal to pull off this bailout. Anyway, the really big money is out of the public’s sight, not tracked by Forbes.

The money that will be used to entice the U.S. to give up its birthright in exchange for daily soup is being moved into hedge funds, Swiss bank accounts and paper assets (various derivatives) where the power of the capital cannot be adequately mapped by public interest watchdogs. But this begs a question: Is there enough of that kind of money to “save” (or capture) the nation? Probably not. A scheme will have to be hatched by which the bailout money can be leveraged up to adequate size. Perhaps the recent exercises of the U.S. Treasury secretary and FED chief are tiny trial balloons to see how such endeavors might play out.

When the time comes, the U.S. government may allow the most viable segment of the investment banking industry to borrow from the FED to “bailout” the nation. And what will be used as collateral? U.S. government securities.

Absurd! Yes. But not much different than the exercises currently underway. Just larger, bolder and more cumulatively consequential in terms of economics trumping politics in the governance of the nation (and world). Frankly, all of this is not so much different than the shell games going on in the investment banking industry for the last couple decades. Simply illustrated, the strategy is not so different from the way in which the U.S. government publicizes an on-budget deficit while running a much larger off-budget deficit. (You see the results in the accumulating total national debt.) Our pseudo-government accomplishes this as the Social Security Administration loans its trust funds to the federal government for ongoing operations.

Anything is possible now. If “eyeballs” (internet pages viewed) could have become a surrogate valuation measure for justifying heavily leveraged market cap for Internet companies in the 1998-2001 Internet bubble, just think of the possibilities for a bubble big enough to bail out the U.S. when it can’t pay its debt! Guess who will profit from that bubble? (Not you.) Guess who will pay for it? (You and your family.) This is where public ignorance, greed, an addiction to entertainment, and laissez-faire market principles have brought us.

Want to tie in a couple related concepts? Just look at the way the unregulated stealth diamond trade in Amsterdam funnels untracked capital to new generations of emerging elites in London, Paris and NYC. These Ivy League educated young elites, many now working on Wall Street, will carry on their fathers' finance capitalism – and then receive (as the emerging generation of plutocrats) the untaxed wealth of their parents’ estates. This assumes, of course, that U.S. voters can be manipulated into putting a permanent end to the death tax on estates valued at over $2,000,000 U.S.

Would you like an up-to-date lucid explanation of the psychology and culture underneath our current model of ‘finance capitalism’? Read a widely noted book by a former Russian, now teaching at UC Berkeley in the history department. His name is Yuri Slezkine. He will explain to you why Mercurians (with cunning intelligence) win and Apollonians, cosmopolitan or not, lose. When the majority of Apollonians lose – in the sense conceived by Slezkine – “America loses.” The last two words are mine.

Don’t lose hope: Mercurians have over-reached before. Americans may be slow coming to their senses, but when they finally realize they’ve been duped, some will not forfeit the American dream without a struggle. What a struggle that will be. We must hope that the U.S. Constitution still stands in those days, and that the struggle can be carried out primarily in educational venues and at the ballot box!