Wiley
Coyote would today make a fine professor of economics. W.C. understood quite well that it is
possible to walk on air – until you look down.
This is
the virtual world of economics in which we live. It is a system of exchange
based on smoke and mirrors, words, opinions, breaking news and high speed
computers trading on the crest of every wave.
It is a system in which the mere possibility that a country with .17% of
the world’s population might abandon one form of virtual money (the euro) for
another (the drachma) sends the “value” of North American companies plummeting
or skyrocketing.
The
word “value” in the previous sentence is in quotations because the only thing
that changes about these companies during these brief, dramatic rises and falls
is their virtual value in virtual markets. Exxon doesn’t sell any more or less
oil; Walmart doesn’t sell any more or less Chinese plastic during these brief
ups and downs, but if the “downs” prevail, wage slaves across the land might
see the “value” of 10 years or more of 401K contributions vanish into thin air.
That’s
the beauty of virtual money. As easily as it vanishes from one location, it can
reappear in another. Between 2007 and 2010, the Federal Reserve secretly
conjured over $16 trillion from thin air and gave it to the largest banks in
the world. It was arguably the largest transfer of wealth in human history.
Some
people (banks, presidents and Congressmen) view the actions of the Fed as a
necessary measure to stabilize the world economy. Some of us view it as theft. A good example
of this latter point of view can be gained by including the virtual board game,
Monopoly, played by over 750 million people around the world, in our
discussion. Suppose the banker simply handed out monopoly money to a select few
players when they needed to pay a bill or make a purchase. The price of everything from Boardwalk to
Baltic Avenue would go up as the players flush with cash bid up the prices. The
players not included in the “stimulus” would soon find it hard to purchase
anything at all and some would go bankrupt very quickly. Before long, most of
the board would be owned by the players with the most play-money.
In the
virtual world of economics, this is precisely what has happened over time.
Witness the remarkable transfer of wealth to a very small percentage of the
population over the last two decades.
There is a reason for this transfer, and it is not because 1% of the
population worked harder or smarter than the rest. This transfer occurred because the “banker”
in our virtual game is cheating.
Unfortunately,
this is not a game for anyone who must buy gas to drive to work so that they
can earn money to buy groceries to feed the kids before they buy more gas to
drive to work. It is not a game for the unemployed. It is not a game for the
elderly beginning to discover that what remains of their life savings buys much
less than it did last year or the year before.
As I
scanned the headlines this morning, headlines provided by the 6 major
corporations who own what we see and hear in media, I witnessed a remarkable
discordance of opinion. I have never been to Greece, but I feel like I now know
much more about the tiny nation than I ever cared to know. The euro survives, but cash is evaporating.
Storm clouds are gathering, but the Dow could skyrocket before the end of the
year, if the world doesn’t end in December. I believe I can begin to understand the
message behind the biblical story of the Tower of Babel.
It is
easy to switch it all off. A single click on the computer; a press of a button
on the remote and the sun still shines, the earth still spins its way through
the heavens and the birds still sing. The corn in my garden needs hoeing, and
the world is peaceful and green again in our beloved mountain home. It would be
very easy to leave it all switched off, but an ostrich with his head in the
sand will soon find that he can’t afford to keep his little plot of sand.
Sadly, the noise, the drama, the irritating, nauseating incessant flow of
opinion – is our medium of exchange.
Once we had gold as a measure of value. Now we have glitter and gloom. If
we sincerely want to change things, there would be a good place to start.
