The Grandest Ponzi Scheme of All:
Good Morning all of your hard working brain cells out there in the real world; your King of Simple News is on the air.
Michael Crabtree has never caught an NFL football in his life. After all, the young Crabtree just completed college. However, Michael does not believe that $23.4 million is enough for him to attempt to catch a ball for the 49ers, who drafted him. Crabtree is now threatening to sit out the season and re-enter the draft next year unless the Niners’ pony up some additional green!
So what do foolish young football rookies have to do with American economics? Plenty I’m afraid. How can our entire country be floundering in near economic collapse while at the same time a young man whose total claim to fame is being good at playing a college ball game be offered such a ludicrous sum and turn it down? I’m afraid it boils down to nothing more than ignorance, greed, and profits with the poor continuing to support the rich. It’s a psychological thing; a fool and his money soon part.
The truth of the situation seems to reveal that two parallel world’s exist simultaneously in the same country, where in one sector, all is right and playing a game is the most important aspect of our society, while the reality of the other world is that millions of Americans are losing their jobs, homes, and retirement security at the same moment. How can that be?
I have been perplexed by the seemingly impossible imbalance of our economic system for most of my adult life. In New York City a small apartment can rent for $2700 per month and in other parts of these same United States that space could be had for $270. How can that be?
We use the same money, operate under the same tax laws, have the same federal government, have access to the same education, markets, goods, and services. . . and yet, there are vast differences in both living costs and average compensation for performing the same work. On the surface, such an economic conundrum should prove arithmetically impossible and would experience an automatic leveling process, but it hasn’t; yet.
When I look at the past 39 years of American debt creation that has gone beyond any semblance of real growth and viable production, the answer to some of my most perplexing questions regarding this seemingly impossible imbalance begin to unfold. When debt is created, there are benefactors of that debt, and then there are the equally disadvantaged who shoulder the responsibility of repayment plus interest and fees. The spoils of the greatest Ponzi scheme in world history were purposely passed out to precious few. Those few represent those who were passing out the spoils of federally created debt.
However, as in all pyramid and Ponzi schemes that exist in a finite world, there is an end to the illusion. The U.S. has gone from our last balanced debt vs. growth year of 1969 to a total public and private debt level that is greater than all combined American wealth making it necessary to pass that debt on to future generations who had no hand in the creation of the same.
In the financial centers, such as New York City, the imbalance of those who have benefited from this massive and false debt creation have for years given the illusion that a parallel world of great disparity is possible within the confines of the same nation; it isn’t.
Like young Michael Crabtree who wants more than $23.4 Million to catch a football, reality could come to such false markets as Los Angeles and New York City on the same day that Michael gets the news that football is a game supported by viable employment rather than viable employment being supported by football.
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I hear continued talk recently about Americans planning travel to many other planets in our universe in the future. These folks really seem to believe this will be a possibility.
If Americans would have paid attention to the congressional hearing in 1974, when M. King Hubbert took congressman Morris K. Udal to task and we all finally understood the truth about peak oil, we may have been able to contemplate space travel to extravagant places in the future. Since however, we did not act aggressively to find a replacement for the energy oil provides our planet, this will not be possible; not ever. It is mathematically and physically impossible due to that lack of action those many years ago. Add to that our insistence on embracing exponential growth and we see the death of our nation.
As with your story today, many, many other things will be gathered into this category as we continue to deny and aggressively move rapidly in the complete opposite direction of our only salvation. I find this very perplexing to say the least…but I do not for a moment deny it exists. -bb
Billyb,
Perplexing? I can’t agree more. The line “Hiding in plain sight,” comes to my mind as I view the winners and the losers of the world’s largest Ponzi scheme; America’s Central Bank and Bailout System.
As the stimulus and bailouts provide the borrowed money from current and future generations of strapped tax payers in order to repay the gambling losses of those at the top, each and every day we grow closer to an impenetrable impasse from which there is no recovery.
I recall one writer who said we passed the point of being able to recover as soon as we took the first barrel of oil out of the ground!
If you think about it for a minute, he was probably right. As an energy source oil is unsurpassed in almost every respect. Oil is a gift humans couldn’t possibly refuse. Combine that with our overwhelming predisposition for being short-term oriented and the rest is history. We shouldn’t be surprised that it turned out this way. Only in our fantasies are we wise and proactive. The reality is that as a species we are greedy, lazy, short-timers with an unlimited capacity for being delusional.
Yet another writer says we should expect failure and plan accordingly. Since most of us subscribe to Murphy’s Law, that shouldn’t be too hard to do, at least in theory.
Greg,
The corporate turnaround artist “Chainsaw” Al Dunlap, said, “Show me a five year plan and I’ll show you a plan that won’t work.”
Dunlap’s meaning was that we have precious little control of the long term future in a world that changes daily. Starbucks business plan comes to mind as a perfect example.
Blatant ignorance allows a population to be ruled by those who are less ignorant. A large percentage of Americans believe that Thermodynamics refers to a new home heating system. How surprised will they be?
There are no words that will describe their surprise. There will be no solace that will comfort them. There will be no embrace that will extinguish their anguish and pain. -bb
Michael Crabtree is correct to believe that $23.4 million is chump change. After all congress just approved an appropriation bill to purchase eight corporate jets to provide transportation to our so called representatives. Cost a cool $550 million.
http://online.wsj.com/article/SB124960404730212955.html
We are at the point our representatives will not travel on an commercial aircraft with those that voted them into office, nor will they hold any public town hall meetings. Have they forgot that they represent us? Seems like you may as well call them the House of Lords.
But I digress. $550 million is chump change! Fannie Mae is seeking $10.7 billion in additional aid after posting a $15.2 billion second-quarter loss. The total bailouts for Fannie and Freddie so far is nearly $96 billion.
But that is just a drop in the pan as the total to date in government bailouts is coming very close to $12 Trillion dollars!!
But that just 20% of our unfunded liabilities of over $58 Trillion dollars.
George,
As you are pointing out, money today is nothing more than worthless numbers that are in no way linked to reality. The Federal Reserve has completed its dastardly work and only “crazy old Ron Paul” has the guts to stand up against them.
When any government creates money out of thin air and then spends that borrowed money on their follies; someone is getting rich beyond belief from those spoils. But, we must remember WHO the money was borrowed from!!!
The main problem with our society today is that people are used and things are loved.
The coming events, sponsored by our government will help to reverse this attitude. This is one of the very few good things to come out of our present mess. -bb
I have a couple of observations regarding the football player’s avarice. One is that it’s a natural progression to brazen excess along the path we’ve been on for a while now, which is that instead of working hard and diligently, people seek instant wealth, whether through gambling, including state-run lotteries, celebrity (e.g. American Idol) or sports. The other, contrary to Mike’s implication, is that “entertainment” – and I regard professional sports as just that – may be one of the last ramparts to feel the bite of reality, if for no other reason than the powers-that-be need entertainment to keep the masses amused and placated (you know, “bread and circuses”), and never more so than during dire times such as we’re entering. The PTB will probably go to any lengths to subsidize entertainment in general – they already subsidize the building of sports stadiums – in order to keep supplying it to the masses, that is, until the PTB can no longer afford to do so themselves.
Dave - Erstwhile Urban Wanderer
Dave,
I actually agree that entertainment will one of the last to bite the dust. The depression era saw an increase in movie goers and the Hollywood elite lived like kings as people attempted to escape reality if only for a couple of hours.
The Roman bread and circus is another outstanding example…but, as in my final analysis, there is a limit to the exponential false debt creation which supports the great spectacles of the modern coliseum.
“entertainment” I tend to make my own. It may be out with my dogs and a couple of good friends, catfishing until 4 am. It may be out at the gun range in a high power rifle match or Cowboy Action event. It may be a week out in the West Elk Mountain hunting, fishing, camping, and riding horses. It may be just sitting around a camp fire in my back yard having a cigar and a sip out of my flask trading stories with my neighbors and friends.
I canceled my satellite TV when I got laid off and now I make a weekly trip to the used book store and the library. Both a good places to mingle with friends about town and share a coffee. There’s also all the farm’s markets, fairs, and other events showcasing our local craftsmen and women.
Now that’s what I call living the dream, and I will defend it with my life.
George,
You have the hang of this live simple, live well thing! After a week in the comparable solitude of the mountains, I can attest that the greatest form of entertainment is Mother Nature and free for the viewing.
With an unemployment rate of 1.5 - 2 million by December 2009, your football player may have to look for a second job come Super Bowl Sunday in February 2010, huh. Maybe he should ask for more. This may be a one or two season shot for him. -bb
Maybe, Michael Crabtree can get his millions from Uncle Ben Bernanke. It seems he’s lost track of over $550 Billion!
Here’s a 5 minute video from C-Span that you best be sitting down to watch as Bernanke is asked by a congressman about his accounting practices.
http://www.youtube.com/watch?v=00ECLxK2YTs
George,
If the general public truly understood the perverseness of the Federal Reserve and the relationship that that organization has with foreign nations, there would be a march on Washington beginning within hours.
Jack Anderson may have said it best, “The incestuous relationship between government and big business thrives in the dark.”