Saturday, March 28, 2009

Greek Drama and the Halls of Congress

If nothing else, the Beltway is a real turn-on. Where else can you see American enterprise etched out in such dramatic detail? It is here that egos and ideologies clash in the epic struggles that are hallmarks of a democratic society hard at work.

Tucked inside the cracked cocoon of my neocon ideology run amok, I am given a unique perspective on the epic clashes, confrontations and crusades that rattle the marbled halls of power. And I can tell you this…

It’s all an act; it’s fucking theater played out for the benefit of the masses to give the impression that policies that have already been decided on are still being vigorously debated. (The reason Hamlet didn’t kill his stepfather in Act III had nothing to do with his neurosis or lack of resolve; it had everything to do with the fact that Shakespeare had two more acts to fill.)

I stumbled across a prime example of this in yesterday’s Times. It seems good ol’ Tim is going to shake up financial capitalism with a set of draconian reforms. He wants to regulate derivatives and bring the shadow banking system under SEC control. He wants Treasury to have the power to takeover any institution that threatens our fragile economy.

And the finance industry is rending its garments and rubbing ashes in their hair as they beg Tim to regulate the hell out of them, for they have sinned and must be made whole again.


…and this is one of those big buts that keeps the Beltway from overreacting to a real crisis, the Times reassures us that, “…industry groups are already mobilizing to block restrictions they oppose and win new protections they have wanted for years.”

Yes, it’s another carefully choreographed Greek drama complete with a congressional chorus that will chant its scripted strophes, antistrophes and epodes as it moves across the stage. Even now you can hear the sound of industry lobbyists sharpening their gelding knives as Congress prepares to do the “peoples’” business.

To give you one example of this democracy at work, the Times tells us that one of the “reforms” the American Banking Association is pushing for is to allow banks to mark their toxic assets to book instead of being forced to mark them to market.

Say a bank is holding a piece of toxic paper with a book value of $100. In today’s market it could be worth anything from $10 to $30, and this is how the banks must carry it on their books. The banks complaint is that it weakens their financial position by being forced to value assets for what they are actually worth rather than valuing them as they might be worth someday in Never-Never Land.

I am four-square behind this reform. As a matter of fact, I’d like to see this reform expanded to cover us all, so that when I am forced back into the job market, exercising my unique skill set of collecting shopping carts from a supermarket parking lot, my salary won’t be marked to market (the minimum wage) but will be marked to my potential earnings (book) once I have my MBA from Harvard and am running my own hedge fund. (What the hell, with the dollar as a fiat currency, prosperity is but an illusion.)

What tickles me is that all of this drama is taking place over a 250-year-old industrial and financial bubble that, on a geological timeline, will barely amount to a cosmic fart.

I suppose its redeeming quality is that it keeps all the nuts holed up in the Beltway. God knows what would happen if they were allowed to run wild.

--Belacqua Jones

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