I speak, write and comment frequently on economic issues using the perspective of both history and economic fundamentals as a compass for repairing the U.S. Economy. I believe this method is the most valuable way to approach the subject particularly when looking at the economic conflicts and financial challenges that surround most Americans. Let’s take a quick look at one of these perspectives:
Studying the last three centuries of political and economic history I discovered a keen awareness of two distinct economic engines; one I refer to as the Native Economy and the other I refer to as the Über Economy. The Native Economy is the fundamental engine that drives free-market capitalism and the initial driving force behind our past economic successes. Its toxic enemy is the Über Economy which is the opposing force and parasitic by nature.
In an essay by Oscar Wilde, he intimates that “Life imitates art far more than art imitates life.” Whatever degree of accuracy this statement might hold is subject to further scrutiny particularly when one observes some of the more provocative excerpts from the movie Wall Street (Written/Directed by: Oliver Stone. Co-written by: Stanley Weiser); more specific being those by Gordon Gecko. Whatever the outcome of Mr. Wilde’s critique I do believe that the following excerpts nicely depict the pure essence of the Über Economy. Life and art are imitating each other; an extraordinary parody.
- “I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you’re not naive enough to think we’re living in a democracy, are you buddy? It’s the free market.”
- “It’s not a question of enough, pal. It’s a zero sum game, somebody wins, somebody loses. Money itself isn’t lost or made, it’s simply transferred from one perception to another.”
- “Ever wonder why fund managers can’t beat the S&P 500? ‘Cause they’re sheep, and sheep get slaughtered.”
- “The new law of evolution in corporate America seems to be survival of the unfittest.”
One might think these excerpts are only literary license and not at all the abstract of “art imitating life….” however I assure you such is not the case. What follows is A View to Economic Predation, not in Art but in Real Life, the very essence and image of the Über Economy in action:
- On Thursday, November 25th, 2010 Del Monte Foods (SFO) announced that it had reached a buy-out agreement with KKR, a global private equity firm and two additional “named” global capital firms as partners, at $19/share; 40% more than Del Monte Foods closing stock price of the preceding three months. An economic event creating nothing while extracting value and wealth from the Native Economy! The process only transfers the control of a publicly owned and productive enterprise to interest that have no vested commitment to domestic wealth creation and fueling the revitalization of the U.S. Economy.
Here’s another:
- On Friday, November 25th, 2010 General Motors marketed the largest Initial Public Offering (IPO) in history ($23.1 Billion). It is important to know of three critical points: (1.) For GM to cover the taxpayer funded bailout the price per share must be no less than $51/share; the initial sales price has not moved past $33.80/share. (2.) The entities underwriting (bringing to market) the GM IPO are none other than B of A, Merrill Lynch, Morgan Stanley, JPMorgan Chase & Co., Citigroup Inc., Goldman, Sachs & Co., Barclays Capital, Credit Suisse, Deutsche Bank Securities, RBC Capital Markets and UBS Investment Bank. And lastly, (3.) Consider that many of these entities have direct access to FED funds. Further, consider the rather curious (coincidental?) timing of the FED’s Quantitative Easing (infusion) of 600 Billion Dollars in to the so-called markets? This is not an IPO, it is a taxpayer funded “buy-out”, the only problem is you have not equity-interest, your only reward is in the Debt created to fund it.
This is a mighty fine time to review Mr. Gecko’s outlook (quotes above) on the policy and practices of the Über Economy!
If one is prone to wonder why the judiciary and politicians are unfit for managing any economic function then consider that it is their enabling of events like these that is the cause of our Nations bleak economic outlook. This Country’s Native Economy has been smothered by the over-burden of incompetence at all levels of government and exhausted by the practices of the Über Elite.
Fixable? Absolutely! However, it is going to take far more than simply leaning on the hope of political machinery to perform the required functions. It will take the many of different minds converging upon a common ideal. The practices of the Über Elite must end!
“Man must be Free for Independence to be at Liberty to be Expressed!”
Like or not, that’s just the way it is.
Curtis C. Greco, Founder
