Monday, January 10, 2011

The Golden Calf

Alas, this people has committed a great sin, and they have made a god of gold for themselves.

I might as well confess now, I’m reading All the Devils Are Here: The Hidden History of the Financial Crisis by Joe Nocera and Bethany McLean. I’m not even halfway through it. It’s ugly. Even worse (for me), is that I’m currently reading how much of the blame for our current financial crisis can be laid at the feet of Democrats.

The basic story hasn’t changed much. Men are greedy. The people that warn of the danger are a pain. Men need to idolize something. The people that warn of that danger are even bigger pains. Laissez les bons temps rouler. There were some good times. And let them roll we did. But the day of reckoning is upon us.

I hope all the religious references and language makes you uncomfortable. That is my intent. For what I find in all my readings old as sin. I am struck by our callousness towards the poor. The flip side of this is the idolatry of the rich. I want you to think about a simple truth you can discern in today’s world without any help from me, the media or any book.

Who did the sub-prime mortgages target? That’s right, they didn’t target the rich. As a matter of fact, they were designed by the rich to target the poor.

Likewise, think about China. What is making China rich? How is it that China has become the banker of the world? They’ve done it by harnessing the power of a billion peasants, i.e. poor people. Ditto India. In sweatshops. By the way, that’s an English term -- sweatshop. We’ve been down this road before. Back when a “contractor” had a more appropriate name -- sweater.

I see this on a micro level also. My wife runs a charity that helps pay the utility bills of the poor. She once made a comment about how much some of the bills were. Some are more than what we pay to heat our big, suburban home. It got me to thinkin’...

What causes a heating bill to be so high? Inefficient heating and lack of insulation. That pretty well describes most rental houses. How can we solve this problem? Well, poor people can’t afford to insulate their home. Besides, it’s not even their home. It’s a rental. So I guess the landlord needs to insulate it. But why should he? That’s a lot of money to invest. What’s in it for him? He doesn’t pay the heating bill. The tenants do. So the house remains uninsulated.

That’s the cold logic of “The Market”. That is naked capitalism. But we take it a step further. We demonize the solution and profit from the non-solution.

The obvious solution is to require a certain level of insulation in the building codes. In other words, regulation. The government needs to “meddle” in “The Market”. The local government needs to generate some “red tape”. Okay, we can’t win that battle of words so we “incentivize” (anytime you see a word like that created you know it isn’t to help poor people) the process. Oh, wait a minute. That “expands” government spending so it must be bad too. Seriously, you can’t make this stuff up.

”“It’s just more of the same kind of wasteful spending that we have seen in the past,” said U.S. Rep. John Boehner, (R-Ohio), Jan. 15, on PBS NewsHour.”

So the poor stay poor. And they continue to enrich the wealthy. Skeptical are you? Hyperbole you say?

Where does the money the poor pay for utilities go? Natural gas, propane or electricity?

AGL is paying 44¢ a share.
APU is paying 71¢ a share.
SO is paying 46¢ a share.

And just in case I didn’t make the point, we extract the wealth from the poor’s labor just a surely as we extract coal from the Earth.

Most of you (who aren’t poor, by the way) have no idea who these companies are until you click on the links. Do you think any of the folks standing in line at a charity own any shares in them? These stocks are called “widows and orphans” stock. Isn’t that cute? Notice it doesn’t say “rich widows and orphans” stock. But labeling it “widows and orphans” somehow makes it feel charitable doesn’t it? Language is such a funny thing -- especially in the hands of those that are trying to “sell” you something.

The reason I know about those stocks is because I’m looking for some place to put my money. Somebody said something about a golden calf.

Maybe some guy will show up with a few regulations to set us straight soon.

Don Brown
January 10, 2011

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