A Giant among Giants

Dear George,

Three past presidents have cast a large shadow over America’s history (at least for those who are aware that America has a history). They are Washington, Lincoln and FDR. You are the fourth. However, your legacy is a closet legacy that can never be properly appreciated by future historians.

The creative ineptitude of your administration has made it a lightening rod that will be blamed for all of the sins of previous administrations.

The seeds of our White Elephant of a military-industrial-media-finance complex were sown in the closing days of World War II when our governing kleptocrats decided that the only way to insure America’s prosperity was to keep our economy on a permanent war footing. So, they created a Communist threat, which morphed into your GWOT after the Soviets fell. As a result, the Pentagon continues to suck us dry sixty-three years after World War II ended.

The Clinton administration sowed the seeds of our economic meltdown when it deregulated the banking industry and allowed greed to turn Wall Street’s financial wizards into village idiots.

Fortunately, you will probably be out of office when the real economic time bomb explodes: the collapse of the derivatives market.

Derivatives are difficult to wrap your brain around, even when stoned. One article compared derivatives to being allowed to take out an insurance policy on a house you don’t own from an insurance company that doesn’t have the money to pay the loss in case the house burns to the ground.

The article goes on to explain that:

They are difficult to understand, ignored by regulators and poorly reported on balance sheets. In simplest terms, CDS [Credit Default Swaps] are insurance policies on things like bonds, loans and corporate debts. But there are two big differences: the seller of a CDS doesn’t need to have the money to cover losses if the security defaults, and the buyer doesn’t need to own the asset it wants to protect.

Now, a rational person would ask why anyone would be insane enough to enter into such an arrangement, which goes to show that sanity is not a factor in the world of finance capitalism. The short answer is that the investment firms that traded in these derivatives collected a cool $2 billion in fees each and every quarter.

Madness pays.

Nobody is sure of the total value of these derivatives. Estimates range from a quadrillion to $54.6 trillion. What is certain is that the bulk of these derivatives are held by the few banking giants that are still standing. JP Morgan, Citigroup Inc and Bank of America hold 92 percent of the disclosed derivatives.

With luck, this market will collapse after you’ve returned to Crawford to clear some more brush.

So it is that your place in history as a giant among giants is assured. From McKinley on, our president wore a velvet glove over their iron fists. You took the glove off and showed the world an iron fist rotted through with corrosion.

The beauty of it all is that after you leave office, the country will assume that it will return to a golden age of rational sanity when, in fact, things will go on as they always have. The only difference being that the bullshit will be repackaged and rebranded.

Your admirer,
Belacqua Jones