Canonizing the Lie

Lying is a sin; therefore, the only Christian way to deal with the lie is to declare it true. Lies are too important to consign our corporate plutocrats to Hell for mouthing them. If, however, every lie they utter is true, then their place in Paradise is assured.

The lie has increased in importance as America has transitioned from manufacturing capitalism to finance capitalism. As writer Julian Delasantellis explains it:

[I]f it’s harder to lie with actual product, it’s probably easier to lie with paper…[C]orporate finance has become devilishly complex, with entries for arcane and esoteric corporate practices whose place on the balance sheet sometimes belongs in between, or shift, from the cost to the revenue side of the ledger.

In other words, since it’s all smoke and mirrors, anyway, who can tell the difference between a lie and a truth.

Now that we understand that, we understand the cause of our current economic collapse. It's all the fault of a simple accounting rule, FAS 157, which insists that financial institutions tell the truth about their assets by valuing them at what they would actually fetch in a free and open marketplace.

The rule simply reeks of free enterprise, which is anathema to finance capitalism. As Delasantellis explains it, the problem is that:

[T]he value of everything is not determined, or at least should not be determined, by what the owner thinks they are worth, but by what competitive bidders in an informed free market are willing to put up in cold hard cash. Anything else is just some manner of fantasy.

This is bad news for an industry based on fantasy.

Well, our Masters of the Universe couldn’t allow this sorry state of affairs to continue. Especially since our zombie banks had become warehouses for toxic toilet paper nobody wanted. Since they were forced to value this paper to what it would fetch in the market (damn little) they appeared to be insolvent, and you can’t run a Ponzi scheme with insolvent banks.

So, our oligarchs prevailed on the Financial Accounting Standards Board (FASB) to tweak FAS 157, and in doing so, they canonized the lie and raised it to sainthood. Instead of marking to market, our financial institutions will now be allowed to mark their toilet paper to “model”. Delasantellis explains it:

Market to model implies the replacement of mark-to-market prices with valuations derived from proprietary mathematical models used by the company.

The key word, here, is “proprietary”. This means that not only will these mathematical models be the creations of the company using them, but being proprietary, they will not be subject to peer review.

There you are! With a stroke of the pen, our financial crisis is over, and the lie that once hugged the back alleys of Wall Street has been cleaned up and now sits upon our financial kingdom’s paper throne.

This is why America is an economic powerhouse!

--Belacqua Jones