“Frankly my dear I don’t give a damn”
Saving Wall Street and letting a civilisation go bankrupt
“There is much more money to be made in the destruction of civilization than in building it up”, Rhett Butler quipped in Margaret Mitchell’s southern epic Gone with the Wind. In a world post-financial holocaust, subprime battlefields, CDOs, toxic credit default swaps and growing national debt crisis, the statement of the suave Southern gentleman, blockade runner and war profiteer oddly enough ring true.
When in 1864 the siege of Atlanta began, the retreating Confederated Troops burned down all public buildings; as the Yankees marched in, the city was almost raised to the ground. Today, those areas that had seen the highest growth rate, like Georgia, have regained their post-civil war chic as entire neighbourhoods, city streets and residential areas are left abandoned and vandalized. Those that still have a roof over their heads are left wondering how long will this neighbourhood last? How did the community dissolve so quickly? The burned out ruins in post-financial crisis chic with the broken white picket fences, the wild growing front lawns and the splintered pastel paint on the walls stand as silent monuments for the death of the American Dream with their shadows looming large in the evening sun, not large enough to reach Wall Street. Most people around here will never understand or even question the economic theory behind those fancy sounding terms, most people in the industry didn’t either, but they understand the frustrating pain of personal loss and the nagging question of how long do we have to pay for the billion dollar packages those greedy money-grubbing bankers on Wall Street bundled? The greedy north wind did not beat through Wall Street, it hit Main Street. Down and South. Goldman Sachs took up Rhett’s catchphrase as their motto, using the housing crisis as just another a profitable way of making big bucks, betting against their own clients even after the housing bubble had burst. In a globally interconnected banking system the laissez-faire approach of Greenspan & Co was a failure. Today, four years after Lehman brothers went belly up causing a global meltdown, many feel nothing has changed and Wall Street got away with robbing its clients off their life savings, destroying an estimated amount of $ 11 Trillion dollars and 8,5 Million jobs in the recession. And imagine the 2012 Republican ticket with its market-will-regulate-itself philosophy of ultra-conservative millionaires conveniently ignores the fact that the financial meltdown was caused by those haves and have mores who just got a bit too greedy in the end, fighting against government intervention, transparency and regulations.
While the Occupy Wall Street movement spread across the globe, bankers went back to business as usual, and even though the economy has yet to recover, banks are back making big money and by autumn 2012 Occupy Wall Street is not even a newsworthy footnote in the media.
Disgruntled protesters have only a limited entertainment value these days. Unless a strike or protest costs somebody high up the food chain a lot of money like the Lufthansa strike today, that will quite possibly cost millions of euro, or turns violent like in Syria, news reports forget about it quite quickly. Especially in times of crisis protesters are unfortunately a common occurrence and simply yesterday’s news. Mario Draghi’s announcement, on the other hand, is big new stating boldly, the European Central Bank is buying an unlimited amount of debts from countries within the single currency market, and the investors, speculators and gamblers all over the world rejoiced. Maybe even the threat of being downgraded by Moody’s from AAA has been contained. But on a side note it was also rating agencies like Moody’s that stamped AAA on the subprime lending market. So how much do these people really understand of their job? Now, the Europeans like the Americans before can simply print more money, thus opening the floodgates wide for what could turn out to be an unprecedented inflation. The question everyone seems to ignore these days is what happens if a Central Bank turns into a bad bank? The taxpayers bailed out banks, now they bail out countries. What happens afterwards? We bail out continents by invoking some abstruse feudal law in order to return to an economic colonialism turning debtor states into fiefdoms beneath the waving blue flag of the European Union all in the name of a single currency market? Ultra-right wing polemic in Italy and Greece already accuses Germany of having national-socialist plans to rule the world, trying to secure their place at the sun. And the disgruntled German population grows ever more weary of new obligations to finance the waning economy in Southern Europe.
Those poor sods who are walking up and down Wall Street are lost in the political gamble between economic might and the political interests of governors, senators, presidents etc. of being re-elected. The chastised bankers on the other hand profess they could never have known what kind of monster their greed would create. Others would argue, it’d common sense people. a) You don’t spend money you don’t have. b) We live in a post-modern world, where intellectuals have explained to us, that grand narratives of eternal progress have been overcome as cultural myth. What happens when bankers cling to tall tales of eternal growth and progress cost us dearly so much so that our great-grandchildren thrice over will have to work on paying off that debt. c) No matter in how many different packages you wrap it, slice and dice it only to resell it, according to Adam Ries the sum of two negatives (-1 +(-1) can never ever, not even in terms of profit, equal +2 . Every second grader could do this kind of mathematical operation, even without a fancy calculator.
Around New Year, when it’s time for those great annual recaps, people might look back and say 2012 was a brutal year, but the spectre of 2013 is looming ever more imminent over Europe. If the next financial bubble bursts, there won’t be any government funds available to bail out the banks. That fall will not be cushioned. That fall will be epic. But tomorrow, is another day.
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