I've been meaning to get around to the Wall Street topic; what has been going on there for the past three decades is a central theme for my ultimate, decline of America, topic. So I watched "Wall Street: Money Never Sleeps" a few nights ago and that prompted me to get on with it. We'll get things rolling with a brief review of the movie.
The first "Wall Street" movie from 1987 was a good one. I remember going to it on a date and coming out of the theater wanting to make some money, lots of it. The plot was easy to follow with the main theme being insider trading, greed, and corruption at the New York Stock Exchange. It was all about being sneaky and making enough money to buy the Sharper Image catalog in its entirety. The new one is a much more convoluted affair. Oliver Stone is heavy-handed to the point where you wonder if Michael Moore wasn't involved in the writing of the script. I love Michael Moore and I admire his work but I was looking for story.
I already know how insane the whole Wall Street thing is. The main drag on the script though is that insider trading is incredibly easy to understand. Somebody with insider knowledge gives you a tip and you act on it to your gain. These days? It's all credit default swaps and packaged derivatives and leverage and, well, you know the deal; nobody even knows what's being done in the current financial market. Ultimately though the new Wall Street movie is about get back, revenge, and that works as a story to a point. As a movie it's just okay; as a documentary it's overacted. It does serve as a valuable reminder that our country got screwed and the screwing is still going on. Like a woman who has been slipped a date-rape drug, we're still being raped but we're dozing while the deed is being done.
Even after the $700 billion bailout of this country's largest financial institutions, things are going full steam in Manhattan. In the past year these same firms paid out a record $160 billion in bonuses. Seriously, these are the people who took our economy to the brink of complete collapse and the machine is just rolling along like nothing ever happened. They've paid off our politicians and absolutely nothing of note has been done to dampen that good old Wall Street spirit. No regulations worth mentioning, no real consequence to their actions, nothing but a bailout at the public expense.
One thing I do like about "Wall Street: Money Never Sleeps" is that Gordon Gekko keeps mentioning how people have been "drinking the Kool-Aid". I use this expression all the time but I think it's lost on some younger people and those who are rather inattentive to the news. It refers to the Jonestown cult in Guyana who committed mass suicide by drinking poisoned Kool-Aid (actually the generic Flavor Aid but that doesn't sound as cool). The followers of Jim Jones had fallen for his doomsday scenario hook, line, and sinker and thus the phrase has come into modern usage for any instance where people believe something despite obvious evidence against their belief.
I remember vividly back in 2002 when my wife and I were moving to the Atlanta area and looking for a place to live; you'd drive along a street and see a neighborhood where half the houses had "for sale" signs out front while two new subdivisions were being built across the street. I realized at the time that the situation was obviously untenable. It's just basic economics that, if you are having trouble selling your widgets, you don't increase production by a factor of ten to make up for demand you only hope will come. At the time the belief that real estate NEVER lost value was like the Ten Commandments. It was well-understood that real estate was the most solid investment you could make. The people doing the house buying that was going on were people who couldn't afford it being backed by sub-prime mortgages and speculators looking to do some flipping. The real demand was just a ghost.
After 9/11, when interest rates had bottomed out, it got cheaper to finance the building of new homes. An increase in housing starts was the barometer of a strong economy. The main cost associated with building was labor and we started to see a huge wave of illegal immigrants from Mexico and Central America being brought in to take care of that. Houses and subdivisions were going up at an absurd and unjustified rate. Well, at least it was absurd and unjustified unless you were drinking the real estate Kool-Aid; I wasn't. Not that I'm beating myself up for not speaking out; I did. But, I don't have a degree and know little about economics. All I could do was tell you that, for a fact, 2+2 does not equal 5. Easy sell, that argument, right? Not so. It went on, unabated, for years. As lending institutions leveraged themselves to unheard of ratios and mortgages and sub-prime mortgages were rolled up into neat little balls and sold all over the place like chewing gum, it went on until it could go on no longer.
America is currently littered with completed, half-finished, and barely started subdivisions that are like ghost towns. I mean literally, it's like the old westerns where you come across a little town and nobody lives there; tumbleweeds are blowing down the street. We still have a homeless problem in this country but that's another topic for another day. What I mean to illustrate is what happens when we're sold a bill of goods by Wall Street and it's backed by nothing, when our country and our government drinks the Kool-Aid. It's not like we have a choice, mind you. With our system in its current state, the gentlemen serving the Kool-Aid are the ones writing the laws on how it should be dispensed. They're the ones lobbying and putting money behind candidates from the Tea Party to the progressives. It's like choosing which street corner at which you'll be robbed. You'll be robbed either way you go but maybe the scenery is better at Main and Maple.
I personally don't think there's a way out. The big banks and financial institutions will keep going until it's gone, in this country in its current form at least. For conservatives, regulation is a dirty word and for liberals who favor regulation we keep being given candidates like Obama and Clinton who can't afford or are unwilling to go up against the money; maybe they're even in collusion with the money like a Manchurian candidate. The average person is simply given a false choice to vote for "change" or vote for "change" since both parties run on that word at face value. Yet we keep getting the status quo.
I honestly hope, for the future of our country, that Sarah Palin wins the election in 2012 and Republicans and Tea Partiers are firmly in charge of both houses of congress. When nothing happens to change the system and nothing gets better and we don't get trickled down upon, maybe, maybe then people will really start to wake up to the darkness behind our current system. For that to happen though, they'll have to start drinking coffee, not Kool-Aid.
Unfortunately, I think the only thing that could bring this rape to a halt is an actual revolution on the order of the French Revolution of 1789, not the American Revolution where a landed gentry wrote the rules. But money doesn't really go away, and, as is obvious in modern day France, the oil rises back to the top. It's just a matter of keeping the electorate high on promises and diversions.
I'm guessing that war with Iran or North Korea will be our next little diversion. Works like a charm as history tells us. The problem is that Iran and North Korea are not legitimate threats, China is. But the companies and banks who run our government have much invested in China and they're not terribly patriotic anyway.
I have no idea what the New America will look like but, I promise you, it will be dramatically different in less than fifty years. The rate at which we're being sold off is rapid, unabated, and, unless something truly dramatic happens to rein it in, this car will driven until the wheels fall off.
I'll predict that the American public will be asked to make some painful cut-backs in the coming months in order to whittle away at the huge deficit we're currently facing. We'll be asked to tighten our belts while Wall Street continues on its merry way. They're not willing to make any changes to the way they do business and won't be expected to.
I'll continue this topic in my next or in a future blog; there's still much I'd like to say about the housing market, how the stock market works, and regarding capitalism in general. For now, I would recommend "Wall Street: Money Never Sleeps" as an urgent reminder.
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