Binary Party

What’s that?  Populist outrage against the bankocracy and the plutocracy, was expressed in this week's E.U. elections?

Of course, you could have learned about this, blowback, and Newton’s Third Law of physics, two years ago…. By reading J.M.H.

Binary Party

By J.M. Hamilton (5-18-12)

“Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.”  – Baron Acton

Far too many years to count now, or maybe its just vanity that prohibits me from counting, a boss called me into his office.

He pointed his finger at me, and half serious, half in jest, said in a stentorian tone:

“Mr. Hamilton, are you and your job of any intrinsic or extrinsic value to society?”

It had the feel of a “Dickensonian” moment:  “I pay my taxes, sir.  I try.”

And of course, I believe that my job adds value to society and I am fortunate enough to work for a company that provides a meaningful and valuable service, particularly in times of want and need.

Which is a lot more than I can say for your typical Wall Street Bank.

Wall Street Banks gamble, bet, and speculate (i.e. “make markets”) for the possible enrichment of a few and to the detriment of the many.  Sometimes there’s a crash, and at other times there’s merely a bailout, but the path always leads to what the one percent like to refer to as “creative destruction.”

For the ninety-nine “creative destruction” is code for another round of socialism and redistribution of wealth from the many to the few, a wrecked economy, unemployment, inflation, and our government – and at least one political party – becoming more binary and extreme to rationalize, justify and prop up a failed financial elite.

Their products are the products of any casino, binary bets:  derivatives, synthetic derivatives, repos, collateralized debt, and in most instances are highly illiquid.

One wonders if the financial elite that rule us will ever swear off boom and bust cycles, in favor of a more mundane glide path to economic harmony and prosperity?

It can be done, but at the expense of the wolves.

But is Mr. Dimon listening?

That is to say, many of JP Morgan’s services and products are of no intrinsic or extrinsic worth to society.  And the only product banking does provide that is esteemed by society (the ninety-nine), JP Morgan largely abandoned sometime ago….  Ordinary lending at non-usurious rates, where the bank actually underwrites the prospective client, and retains the loan on its books.  How quaint.   Or put another way, how did society function for the last two millennium without CDOs, MBS, and derivatives and swaps, which are reinsured and underwritten by the American taxpayer?

What will we ever do without financial products that lever up the riches, and entitlements, for the one percent, but enslave the ninety-nine in an never-ending stream of ruinous bank bailouts?

If Wall Street doesn’t get the message this time, perhaps it time to elect officials who will nationalize, smash, and sell off the leviathan: as non-threatening commercial banks (non-speculative – backed by the Fed and the Treasury); and investment houses (free to gamble with theirs and their clients money, and not reinsured by the American people).   These reconfigured institutions might be retained by the government, particularly staid commercial banking, or released back into the wilds of the free market.

As it stands, Wall Street is a threat to the American people and to our national security.

I know…  quite radical stuff, right?

I’m going to hazard a guess.   Everything is relative, even the extrinsic and intrinsic values of society and her politics.  And while JMH may sound left of center today, say in ten to twenty years, if the nation and her elite continue upon its present course, this blog may, possibly, read like the notes of a reactionary right winger, and a slave to the bourgeoisie.

Newton’s third law of motion is that for every action there’s a reaction.

The Republican Party and the Chicago School of Economics, and their laissez faire ideology (both owned and manipulated by the financial elite), have ruled this country for more than three decades, and their hegemony over political and economic discourse has – one would hope – reached its zenith.  Enter Baron Acton, above, and his famous quote.  And enter a few famous Republicans and their quotes:

“I would remind you, extremism in the defense of Liberty is no vice.” – Mr. Barry Goldwater.

“Either you are with us, or you are with the terrorist.”  – Mr. George W. Bush

“I fought against long odds in a deep blue state, but I was a severely conservative Republican governor.” – Mr. Romney

Nothing but the extreme here.  No room for polite discourse here?   No nuance or shades of grey here?   Ronald Reagan and Richard Nixon need not apply to today’s – shoot from the hip – kill you now, check the facts later  –Republican Party.

Besides thinking requires energy, and darn it… thought and time.

It’s so much easier to keep doing what we are doing, except the speculative bubbles, crashes and financial hangover’s are occurring with greater and greater frequency, and the public is beginning to wake up and take notice.  The crashes are no longer isolated but global in nature…. Indeed, the world is very small.

And finally the true right wing extremist in today’s Republican Party are unleashing, as Mr. Newton forecast, a virulent and no longer dormant response from the true Left.  A socialist head of state in France, resurgent communist and fascist political parties in Europe, and elected officials in Greece that are perhaps willing to tell both the IMF and the E.U. central bank to “go to hell.”  Potentially setting off contagion and the euro’s collapse, a veritable masochist’s party.

So please allow me to let you in on a little secret.  Come closer because I want to whisper this in your ear:

“The Republican Party, with it’s severe economic and financial ideology, just might want to tone it down a little and rejoin the human race; because you’re a breeding ground for revolution, the poster child of anarchy, and your extremism is unleashing forces beyond your control.”  

The GOP would be terribly naïve to think their policies do not have global impact.

Check out the Arab Spring, and please – by all means – check out Europe.  It’s not too late.

And above all, don’t shoot the messenger.  Please.

P.S.

A business model that is based upon unmitigated greed, rabid speculation, and offers no redeeming product or service to society, and in fact is detrimental and dangerous to society, must be relegated to the dustbin of history.  Just ask Mr. Jamie Dimon.  And so must politicians who support same.  Monolithic banking institutions, gambling and earning lousy returns on equity, are failed monuments to the egos that manage them.

Not so ironically, the Tea Bag movement has already been co-opted and absorbed by the Robber Barons — moreover, the mainstream media has reported that the militants within the party have accepted large sums of money from the Cartel they were elected to end.

“If a free society cannot help the many who are poor, it cannot save the few who are rich.”  – President John F. Kennedy 1-20-1961

Copyright JM Hamilton Publishing 2014