“Privatize the profits and socialize the losses.”
For the evening meal around the bonfire, Chef Lua had prepared a light tofu salad with broccoli and pineapple. She also brought out canned tuna and resealable containers of beef jerky, chips, and a great variety of cheese and crackers for those passengers who would not consider her nutritious meat-free salad a complete meal. We each found a place around the bonfire, cast and crew all mixed together, and enjoyed some quiet time staring at the mesmerizing dance of flames before us. Tucker had brought along his own private stash of rum for such occasions, generously offering some to everyone. Jan and Captain Bob were the only ones to take him up on it, the others satisfied with water, coffee, and tea.
We were enjoying a simple meal together on a pristine island beach all to ourselves under a clear night bursting with stars. I was lightly strumming some islandy music on my guitar, as one would expect to hear around a beach campfire with friends. And then, about a half-hour into our calm, carefree time together, a mildly inebriated Captain Bob lit the fuse.
“Well, seems like many of us honest, hard-working people got toasted royally in our pursuit of the good ol’ American Dream from that financial crisis. Gotta love those fat-cat ‘banksta playas’ on Wall Street pulling all them puppet strings and making out like bandits, huh Paul? Privatize the profits and socialize the losses. Sweet deal, eh?”
It is an economic reality today, after all, that in ‘advanced’ economies any substantial economic activity must always be matched by a financial transaction. If the financial system fails to provide the means for such transactions, primarily through credit, the real economy cannot function. When asset values drop precipitously, as they did in 2007-2008 — and credit dries up — the system goes badly awry, resulting in a sharp decline in real economic output.
Not helping matters, ‘fractional-reserve banking’ allows ‘alchemical creation’ of money out of thin air by private banks as interest-bearing debt. But debt is not wealth. Real wealth, like a healthy forest, has a physical dimension to it that limits its growth, which places obvious limits on real overall wealth — while debt can theoretically grow — forever! And modern banking requires just that: perpetual expansion.
Combining the necessity of financial transactions in all major economic activity with fractional-reserve banking, unchecked growth in interest-bearing debt (to place bets with), and a bevy of ethically bankrupt and greedy Wall Street ‘banksters,’ was it so surprising that sleazy financial shenanigans eventually resulted in severe economic pain for millions on ‘Main Street’ — and for one ‘Captain Bob’? He wanted some answers.
Bob knew about Paul’s career on Wall Street and decided to do a little needling to get him going. But Paul’s response was not what he expected. Paul calmly responded,
“Well, captain, I have to say there was a time when I was ‘all in’ with the Wall Street culture and proud to be there. We were respected financial wizards once — raising money for big projects of great genuine worth to society. Twenty years ago, I would have had a very different reaction to that characterization you just made about my professional life. But slowly, over the years, I got to see how my colleagues became ever more addicted to making easy money, gambling with any and every manner of complex ‘financial product’ they could come up with — and they could never get enough. It had become a game of rising and falling digits and graphs on a computer screen — a virtual-wealth casino economy — with little connection to reality or providing any genuine value to society. But it was the drug culture on The Street that really did me in. And now I’m kinda glad it did. I had been pulled in too deep. I had lost my way.”
Paul wasn’t proud of the years he had spent competing hard for commissions and pushing fishy fanciful financial products on gullible investors — products he knew were of very dubious value. His description of a virtual-wealth casino economy resonated with Julie. She added,
“Our whole culture now reinforces this strange new model of success today, Paul. We don’t talk of 'earning' money these days, we talk of 'making' it. Somehow the notion of earning a living by offering products or services of genuine value to others has gone out of fashion. I just don’t get that. When did that happen? It’s like we’re just trying to dupe each other all the time; and we take pride in our ability to get away with it. We have definitely lost our way.”
Tucker chimed in. He’d already had a few hits of rum and was juiced up nicely for some good verbal sparring,
“That is all such nonsense. The free market determines the genuine value of things quite efficiently and does a pretty good job sorting out winners and losers. People buy whatever they think will improve their lives — including ‘financial products.’ Some people make bad decisions — too bad. And by the way, the less government interference in this self-correcting process, the better. Leave Wall Street alone; the free market will iron out any wrinkles. Survival of the fittest, that is all.”
Bob knew where to cast his next bait,
“Yeah, less government would be great, since all that the politicians do these days anyway is just take soft bribes in the form of campaign donations to tilt the playing field in favor of the rich, huh Clara?”
Clara responded emphatically,
“Politicians are simply looking after the best interests of their constituents. We do what we need to do to improve our communities. We lead!”
Julie wasn’t buying it,
“Is that so. It seems quite obvious to me that politicians only care about getting re-elected, and that means listening to their wealthy campaign contributors. If that weren’t the case, we would be taking far more aggressive actions on climate change and other threats to the environment and moving away as fast as possible from dirty fossil fuels. This two hundred year old fossil-carbon energy experiment has got to stop or it’s game over for ecological stability on this planet. We are already experiencing a sixth great extinction from our collective impact on the natural world. Don’t politicians have a responsibility to do something about this unchecked, reckless behavior and push back on what is becoming a naked corporate takeover of the federal government by Big Oil, Big Ag, Big Pharma? Isn’t that what we should demand from our political leaders?”
Jan offered her opinion,
“The free market will tell us when it is time to make a change, and that includes telling us when it is time to move away from fossil fuels. Politicians should not get involved. The free market process is naturally self-correcting. Leave it be.”
Jack jumped in, assertively,
“Magic it is, alright — black magic! If the market told the truth, it would be telling the whole ecological truth, not just a feel-good, endless-growth, prosperity-for-all myth. Let’s get real here, folks! It is a profound market failure — criminal negligence, I would submit — not to include the pollution-related health care and climate-changing costs of a ‘petroculture economy’ built almost entirely on the continuous burning — for over two hundred years now — of massive quantities of fossil fuels.”