War And Economics For Dummies

by Margaret Wyles

January 14, 2002

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With 9-11 being the end of the world as we knew it – nothing will ever be like before, and the like (you know, what you see on TV day in and day out...) – and the unrelenting message that the evil was up to get us, I confess to have been kind of uneasy lately. Actually, it got me to thinking, assuming a low life like myself could ever use such a loathsome function. What really is going on here, I asked? Will 2002 be the year of WAR? Just a few months ago we were discussing stock tips, now the bets are on who will be bombed next: Saddam? Sudan? I don't know about you, but I like to understand WHY things happen, not like a Divine Plan or anything, but some way of holding lots of information in one place with not too many annoying loose ends hanging, or, worse yet, threatening to unravel the whole ball of wax. Must be all that diagramming and catechism and everything-neatly-in-its-place kind of education I had.

In any case, I came up with the following theory of how the world works. Yes, it's full of conspiracy stuff and no, I didn't figure this all out myself, and no, I don't have all kinds of "proof to support this idea." I'm writing with an EXTREMELY broad stroke; so don't crucify me with contradictory minutia, demanding footnotes, references and tables of contents. The disclaimer from the get-go is that this is a THEORY, not a treatise that would hold up in a court of law or some such thing. As I have been told periodically, I am an idiot about certain matters political and economic, so I am forced to write in a manner even a dummy could understand in that great American literary tradition of "Whatever for Dummies" series.

Let's start with some simple facts. The economy is the shits. We all know that. In most mild recessions, the solution for the corporate types is relatively simple. Lay off some of the least productive employees and wait for the "consumers" to run out of whatever it is you're stuck with in excess inventory, and wait for the "correction." Or cut your losses, offer good deals with special bonus incentives, put up big balloons and get that crap off the lot. This is called "streamlining" or "cutting the fat."

Bad as it may seem there is an UPside to this DOWNside. The corporate types can take pleasure in the knowledge that the remaining employees will be SO grateful to have a job that they're not going to demand much more than they already have. As for the poor schmucks out there without a job, the good news is they will work for next to nothing when, and IF, there is finally something for them to do. How many times have I heard "I'm lucky to have a job?" (Do millionaires ever really say "I'm so lucky to be a millionaire?")

Now, THEY (and by "they" I mean those big corporate fat cats and their legislative flunkies known as "elected officials") will always couch this tragedy for real workers and their families in such pleasant and innocuous terms. Kinda like "collateral damage" instead of "dead people." HINT: Whenever you see these MBA type words instead of what normal people would say, it's because they don't want you to see this in REAL terms, or begin to identify with the folks lining up at the food bank or out there in the field with their arms blown off.

But suppose, just for a moment, this is NOT a mild recession (I know they told you it was and that the hard part was almost over, but let's just play along for a moment) but a HUGE BIG FUCKING CRISIS!!! Now THIS would be big fucking news, so you might THINK they'd interrupt these stations for an important message or that The Wall Street Journal would break the story with a headline like "World Economy on Verge of Complete Collapse." But truth is, such truth is NOT GOOD FOR BUSINESS. Sorry. No, what is needed is some good press to camouflage and obscure the situation until someone can figure a way out of the mess. So you have these reasoned discussions and articles by multi-Ph.D. types in expensive suits using $100 words, speaking and writing in authoritative tones, in serious and confident ways. You listen (or read). Your mind goes into a tailspin. Your eyes glaze over. You get bored. Finally, realizing you have a million things you COULD be doing, you put down the paper or switch off the TV and figure THEY must know what they're talking about cuz you sure as hell don't, and you don't even OWN a suit. Best to leave these matters to the experts, who tell you this is just a mild recession.

BIG MISTAKE!!!! Remember my first warning. Those $100 words have added up to millions and the rat I smell is so big he must have been on steroids. NO, WE are left to figure this out for ourselves. Our lives and futures depend on it, or at least mine does because I just work for a living, you know. So I pose the question: How BIG is this mess anyway? By mess, I am referring to the whole world economy. Not to worry. I'll lay this out in very simple terms. The ONLY way I know how to understand things myself.

Well, Japan (the second largest economy in the world) is a patient on life support, sorry to say. They had their days, though, didn't they? You know, when Tokyo real estate was going for a million bucks a square inch and we feared the Japanese economic invasion as they bought up a bunch of prestigious "golfu" courses, among other things ("golfu" is Japanese for golf). Everyone was making money and the sake flowed like water. Unfortunately, matters took a turn for the worse a few years back when suddenly properties DEvalued, (oops!) which means, simply, the prices went down. But it wasn't just the real estate speculators that got screwed - the ones with the misfortune to enter the market "too late," the banks were in this party too, you know, fueling the boom by extending credit on the basis of a never ending stairway to heaven.

Now we have a problem and a pretty damned big one because a million dollars per inch is a lot of money. Let's say I have a property that yesterday was worth $20,000,000 and today is worth $10,000,000 and I owe the bank $15,000,000. Simple math will tell you I'm shit outa luck. I can't SELL the property, but it seems pretty stupid to pay out 15 mill on a property only worth 10 mill. The bank sure as hell doesn't want it either. Your choice: rock or hard place.

Meantime businesses that were making beaucoup bucks on all that techie stuff the Japanese are so good at making (but damn, everyone else is making them now!) are into debt to their eyeballs. Everyone who wants one has one of whatever it was they didn't want or need in the first place, and they can't GIVE the shit away. And it couldn't have come at a worse time too, because, having made SO much money, they (naturally) wanted to make MO money and MO money so they maxed out on their credit cards with the bank and now they can't even make the minimum payment, cuz they had counted on the profits from THIS year and -- guess what? -- there ain't no profit. That's what you call a "bummer." Sound familiar? How many of us have wound up "a little" in debt, counting on next year's salary increase or performance bonus?

This "contagion" (I like that word) spread throughout Asia and was called the Asian Flu (not to be confused with the one that makes you throw up and/or die, though not a few Japanese DID die, as they resorted to the honorable way out of the whole bloody economic mess, known as seppuku or, in real terms, taking a big sword and ripping your guts out). But GOOD NEWS! The U.S. economy is still strong. A plane can fly on one engine (or so they say) and fly we did, with great confidence that we could pull the rest of the world up with us. After all, they don't call us the SUPERpower for nothing.

The 90's were pretty exciting, weren't they? People betting it all on the No. 7 dot.com....making thousands overnight, standing in line to outbid the next guy on some real estate in Silicon Valley. Let it roll, baby. I must admit, I took no small pleasure in checking nearly daily on my 401K. How smart was I? I was making MORE money doing nothing than I was working for a living. Capitalism is great, ain't it?

In the ensuing years, Japan awoke briefly from its coma. But there were some disturbing crises along the way....not enough to spoil the party, mind you. But you may recall reading about currency crises in Mexico and Brazil. The U.S. had the cash to bail them out. After all, what are friends for? Frankly I never really understood the situation all that much, but again, I recall hearing "them" tell me one day that the crisis was over and that was good enough for me.

BUT, WHAT'S THIS? It's the year 2000 and after 10 great and glorious years, Engine No. 2 appears to be failing. The U.S. economy is "faltering," they say. We are reassured, again by people in suits that this is NOT, I repeat, this is NOT a recession. They consult, say some mantras, cast some spells, call an ambulance, call the fire department, and finally, they call....Alan Greenspan!!!!

NOW we can "interrupt these stations" to see the old financial wizard get in his limousine and arrive with due pomp and circumstance in Washington D. C., the center of the universe, the place where all important and wise decisions are made to improve the lives of each and everyone of us. As photographers vie for just a glimpse of the great man, the attention of the entire world is focused, anxiously awaiting a revelation from the Oracle. He speaks carefully and deliberately, knowing that every word, every intonation, will be interpreted in detail in the morning papers, like reading the entrails of a donkey. There's a hush in the crowd. Whispers... How much THIS time? How do you think the market will respond? We are nervous but confident. He made us rich in the 90s so surely HE can save us! After all, HE IS SUPERMAN.

The world waits as he discloses "It's the heart" (a sigh!). But what's the prognosis, Herr Docktor? He is "cautiously optimistic" (which is kind of like answering yes/no). The cure? With laser like precision he has determined that a 50-point cut will allow just enough adrenaline into the patient without over-stimulating the heart, causing it to fail for completely different reasons. "We have a pulse." The market responds. The Dow is up 100 points. We breathe a sigh of relief. It is the miracle of modern medicine!

But weeks later a small voice is heard; the Dow dips back, more layoffs are announced. "Mr. Greenspan, sir....the patient is failing." Again, the call for MORE ADRENALINE.... and so on and so forth, until we begin to feel uneasy. Is there really a superman, mommy?

At some point THEY recognize the patient is failing, but they can't tell US. That would put THEM in a very bad light (or worse!). What to do? Poor capitalists... They pour through all the dusty books from the past searching for some secret formula that might have been forgotten with the passage of time. Hmm....1930s. The GREAT Depression. Now THAT was big time trouble! The patient was clearly near dead then. But he came back to life stronger than ever. How DID we get out of that mess?

Before we get into the "WAY BACK" machine with our friends to visit this time in history which was kind of like a modern economic bubonic plague - at least from "their" perspective - we need to diverge just briefly into the world of economics. My apologies. This is the part where the idiot attempts an explanation. The good news is that the wealth of my knowledge will take less than a minute to articulate.

First, what drives capitalism? Answer: Profits.

How do you make profits? Answer: You buy a piece of wood for $2.00, pay a guy $4.00 to make it into something you can sell for $10.00. Allowing for maybe $1.00 for transportation and advertising and "what not" or "whatever," THEY have now made a profit of $3.00. Pretty sweet deal... That's called letting your money work for YOU.

But if the guy only makes $4.00, how is he (I'm talking collectively here so the "he" includes all the "hes" and "shes" that work) going to buy that thing for $10.00? Answer: Good question. Tell him to buy it on credit. We'll worry about how he can pay it back later.

But what if some other guy can make the same thing and decides he only needs $2.00 profit: Answer. Ain't that a bitch! As a wealthy friend bemoaned, "The only thing wrong with capitalism is competition." Profit margins continuously go down. Sorry.

But if there's only so many people who want one of these things, what happens when EVERYone has one. Answer: Make it disposable, make sure it doesn't last (called "planned obsolescence"), sell replacement parts that are REALLY expensive, and when all else fails, sell it below cost.

But then there are no profits. Answer: Do you know how to type?

Lesson over. Let's get into the way back machine where we'll spend just a few minutes in the 1930s and 40s. The world capitalist economy was in a HUGE crisis (I distinguish the capitalist economy from the total world economy because, FYI, the newly formed Soviet Union was booming, but most of us don't know that because that's nothing we really NEED to know about). You know the story. It was a tough time for THEM. Not a few took the American way out (displaying the cultural difference between Americans and the Japanese)....and leapt out of buildings. Consider the situation and by all means shed a tear for them under these sad circumstances.

Masses of angry unemployed, some of them even "communists" for crying out loud, are threatening to break through the palace gates; prices are falling; lines of unemployed so long you can't see the end. There's talk of "revolution." Workers are banding together, listening to impassioned speeches on street corners, as large crowds gather. Now this is a really frightening situation for THEY are outnumbered by about 100,000 to one by US, the so-called morons. They call out the police on horseback. They don't have teargas yet, so they use batons and bullets, but still the crowds swell. They try lots of things to "stimulate" the economy, which we won't go into because they didn't work or worked only to put a band aid on a gaping wound. Remember, we are only interested in what DID work. And what worked - BIG TIME - was WWII.

FDR hit the jackpot with that one! But timing is everything and he and his friends, the Rockefellers and the other rich asses, watched from the sidelines for some time, though not a small amount of support was given to Hitler and Mussolini "on the sly." Of course, that was before we knew they were "really" bad guys. And they waited until they were really needed, when it was clear who the winner would be, just in time to cash in on the spoils without having to inflict TOO much damage on our military or themselves. Besides, they didn't want to handicap the Germans who were doing a right fine job of crippling the commies in the Soviet Union (29 million of the 50-60 million who died in WWII were Soviets). From the beginning, after the Bolshevik revolution and the European and American imperialists sent in troops to defeat the revolutionaries, it was clear who their real enemy was. WWII was really a family feud, the kind that ensues when someone dies and the heirs squabble over who gets what.

Now, despite hard times, the American people don't want war. First off, most people, even under rotten circumstances, prefer to LIVE, fools that they are. Secondly, most Americans, being rather provincial and short sighted apparently thought that all this hullabaloo and unpleasantness seemed not to have much to do with us on THIS continent. Remember, we didn't have TV or 747s back then, so Europe was really a land far, far away. Capitalists have no end to problems, do they? But they are resourceful when backed against the wall. So a plot is hatched. What if we provoke the Japanese (not in an obvious way, of course) and then ALLOW them to attack? Won't that piss off enough people to get them to fight and die in the trenches for god and country? Thus we have Pearl Harbor. You don't have to believe ME about this. Any number of sources will show that FDR allowed this to happen. In his defense, it was a small price to pay for a whole lot of real estate and a chance at world domination.

So, the U.S. enters the war. And from their perspective, this was a damn good deal. Look at what they got in exchange for a few dead soldiers, I mean "limited collateral damage." Quite impressive....FULL and immediate employment, the opportunity to show our muscle and take advantage of the now weakened European empires, and that generous Marshall Plan which allowed us to "help" Europe rebuild on terms they could pay back, no money down, easy credit terms.

War over, bad times behind, and we are OFF to the races. The factories are humming again. GM can't MAKE cars fast enough. (Hard to believe that now with the 0% down, 2% financing they keep slogging on the tube to lure customers into showrooms). My dad told me that on a trip to California in 1949, some stranger actually stopped him and asked to buy his car, right there on the spot. Cash, no questions asked. Take a look at some of the footage from the 50s. Unbridled optimism in the future ruled the day. Michael Moore's film "Roger and Me" paints the picture quite effectively, with footage of Flint, Michigan in its days of glory. I took a drive through a couple of summers ago - I recommend you keep your doors locked. Sadly, the party wound down in about 1974, and, frankly, it hasn't been the same ever since. I doubt that you could find 10 people in this part of the country that would express unbridled optimism about the future. Or ANY that would imagine robots cleaning the house while you enjoyed endless leisure time - that was a big thing in the 50s.

So are Bush the Younger and his various dons, consiglieries and hitmen acting rationally (albeit treacherously) and is there some logic (however diabolic) behind what is happening? Based on the history I outlined and my brief and pathetic attempt at economics, I would suggest that we are facing a situation similar to that of 1929. There's no end to the economic problems. I didn't even mention Argentina! You know, the country where they name a new president every day? I guess that way, everyone will get a chance, eh? And there's that troublesome matter of the "anti globalization" movement that won't go away, the one that forces them to build fortresses, use tear gas and generally look bad. AND, if it weren't troublesome enough to have a bunch of wild-eyed neo-hippies on the streets ruining THEIR meetings with giant stupid puppets and pathetic street theatre, there were UNION members in Seattle and Quebec. The rank and file, the steel workers and construction workers; the guys with muscles, the ones that hunt and watch football, raise families and are quite serious when need be. Warning bells go off! They have been here before, they've seen the scenario unfold, and they don't like it one bit.

Now, let's just assume that capitalism is in crisis and "the people" have been awakened and THEY know that. Despite their best efforts (tear gas, beatings, arrests without cause) the "movement" seems to be growing stronger. And what's worse, the groups that they had effectively kept separate until now (like students and workers, or undocumented workers and "legitimate" citizens) are getting together. Deja vu all over again. They are in really treacherous water now. Because if all the little groups get together and form one BIG group, and find they have more in common with each other than with THEM, the game is over. Truth is WE have all the cards, and they are merely bluffing, but we've been so disoriented and propagandized, we haven't quite realized it yet.

Now, I'm no military strategist, but in my simple way, it seems to me that the logical response, if you know (and fear) your enemy is getting stronger, is to ACT NOW, decisively and in a big way, hoping you can deal the death blow to cripple them once and for all - or at least until the next big crisis, but, god willing, you'll be dead by then and that will be someone else's problem. Though WE have not yet recognized our own power, THEY sure do. Why would they wait for matters to get even more out of hand? Why not create a preemptive strike BEFORE the world sinks into a complete depression and do the ONLY thing that got them out of the first GREAT depression? The answer is infinitely simple. GO TO WAR -- the more protracted and unlimited the better!

But why, you ask, is war good for the economy? Let's go back to how profits are made. Sorry, I know I said we were done, but this is REALLY short. Profits are made when the worker creates $4 worth of value and you only pay him $2. But even when profits are falling because of increased competition and excess inventory, you can only squeeze the worker so much. They're an unwieldy commodity, prone to demand more and altogether too unpredictable, and they've already felt the ominous stirring of an awakened workforce. You have to tread very carefully here.

But, if we can't squeeze the worker, how else are we gonna make money, you ask? Now here's the genius of it. Get the worker to PAY for the defense budget - a HUGE one, one so big, GOD couldn't afford it. Of course, this is money you've already paid him and now you can take it back! AND you can keep any amount of profit you make because there is no competition and no cost to you! It's really nothing more than a two-bit con game which they cloak in so much posturing and obfuscation at a cost of $100 per word. The taxpayer (that's YOU and ME!) bears the cost of making this stuff and THEY keep the profit. In the meantime, should they in their military meandering encounter a goldmine or an oil field, it's theirs, baby. Who's gonna stop them?

There are some problems, however. But as I always say, there's no problem SO big, it doesn't have a solution. Taxpayers DO have to see SOME reason for spending so much of their money on billion dollar planes and budgets in the trillions, rather than on schools and parks and things they could use and enjoy. (Of course, they convulse at the prospect of paying the medical costs of the Gulf War Syndrome to our once great brave soldiers, now that their usefulness is over. So it's important to distinguish between weapons where money can be made and paying soldiers which is a cost they'd like to keep down.) But, again, the answer is really quite simple. Scare the stupid fools (that's you and me) with a boogieman - a boogieman SO powerful, so devious, so downright EVIL (did I say Satan?), we'll pay any amount of protection money to keep him away. Now, the Soviet Union was a great, and perhaps the ALL-TIME greatest boogieman. Shit, I remember air raid drills, jumping under desks and living under the threat of the world wide communist conspiracy. As an aside, I must relate that I recently saw a clip of an early Nixon who apparently had been asked whether or not communists were rats. He hedged for a bit and finally said, well, hell yeah, they're rats! Ya gotta love the guy! Reminds me of Dubya being asked recently whether Osama was evil. Same hedging. Same affirmative response. And apparently same script writers.

In retrospect, it was ludicrous to think that a fledgling country, devastated by war such as the Soviet Union was, could pose a threat to the United States. Let's face it, we had ALL the aces. They had maybe a couple of jacks. In case they had any idea of challenging the U.S., there was Hiroshima and Nagasaki to show we had the guns and weren't afraid to use them. Truth is, most people trust their leaders, believe them to be like themselves, flawed but basically honest and hardworking. They believe what they read - especially in reputable papers such as The New York Times - and who could NOT trust those nice guys that come into your living room every night on the news, eh? I feel particularly warm and fuzzy when Tom Brokaw says to me personally every night "See ya tomorrow night!" (Is there a two-way camera or something inside these TVs?)

Besides, an arms race with the Soviet Union (one which they could NEVER win) would have the additional benefit of eventually bankrupting them, and proving once and for all time that socialism will NEVER work and capitalism is the ONLY alternative. Thank you Margaret Thatcher.

But a complete defeat of "the enemy" creates the embarrassment of having no enemy to justify a bloated defense budget and the constant and reoccurring need to create new bad guys to scare the bejezus out of us. So we are presented with a string of bad guys (or good guys turned bad, as is the case with the current Enemy No. 1 and numerous others) that single-handedly threaten to destroy the world. Dr. EVIL is REAL you know. I particularly like Osama because we have NO idea where that fucker is or even IF he is, so THEY can look for him anywhere they damn well please. They'd better hope no one ever accidentally "finds" him. It would require real genius to top THIS showstopper.

Meantime, there's no reason to limit the show to one single scam --we all know the value of diversification, don't we? They use many other ways to make good money and cut costs to "stimulate" the economy, all the while keeping OUR eyes off the prize - which is their bulging wallets. Then there are the "favors" that need to be called upon in the form of lucrative and/or prestigious appointments for the friends who brought them to power. My particular favorite is an appointment for Justice Scalia's son. In point of fact, Dubya's debt to that jerk can never really be repaid, can it? So here are some suggestions on obtaining and maintaining total global domination and control over your own population as you rob them of whatever you can, should you ever be presented with this opportunity.

•   Don't give away ANYthing for free. If you have, demand it back. Free things are those things that provide US benefit, but frankly don't make good business sense, like Public Access TV, public housing, aid to the mentally ill, wetland reserves, to mention a few.

•   Encourage people to run up their credit cards as their "patriotic" duty. It'll boost the economy AND indenture US forever to THEM.

•   If a corporation can't outright take away benefits like health care, suggest they ask that the workers "participate" in the cost. Eventually they may even forget they ever HAD benefits, at which point you can wipe them out entirely.

•   Get rid of any legislation that costs the corporation money, with special attention to those persistently annoying calls for workers' rights and a safe working environment. An anxious worker is a cheap worker.

•   Keep the attention OFF the economy. War is, of course, good for that, as is Survivor.

•   There's no money in preserving the environment. That is a COST, stupid, and it cuts into corporation profits, remember? Besides, you can always get the taxpayer to pay the clean up costs of any disaster that might result and create jobs for some of those college grads that can't find work anywhere else.

•   Prepare for social unrest. Create laws ahead of time that are vague enough as to be applicable to the general population at a later date. Mr. Ashcroft is doing a mighty fine job of that.

•   Vilify anyone who opposes the New World Order and create a linkage between them and the terrorists. You can do that really easily by putting "terrorist" and "activist" together in the same sentence. Repeat the sentence frequently. Look serious and straight into the camera.

•   Constantly point to the violence of those who protest as proof that "the movement" is made up of delinquents and troublemakers. This will allow you to sidestep any real grievances raised, put them on the defensive, and cause many in the movement to see the rabble-rousers as the enemy rather than YOU.

•   Pay homage to those who sought change through peaceful means. Gandhi or MLK will do, though don't delve too much into MLK. He was more of a revolutionary than most people know.

•   Suggest that the people place their trust in GOD. That will cause them to blame GOD (or themselves, or bad karma, or original sin) for their misfortune rather than YOU, and provide them comfort and docility during leaner times when they might get other ideas into their heads. And by all means, create the linkage between GOD and nation state. I know it's lame, but trust me, they fall for it EVERY time! Three little words: God Bless America. A little can go a long way.

Conspiratorial? Far fetched? Overly simplistic? Fantasy?

Consider the fantasy THEY would have us believe: that a lone gunman with a serious kidney disease, possibly on dialysis, from a cave in a backward country outwitted the most sophisticated and well-funded intelligence service on the planet with the genius idea of using a fully fueled jet as a bomb. So brilliant in its conception, that NO one in all these years of trying to outwit the KGB, Saddam, Kaddafi, with OUR money, mind you, had ever even thought of it. Damn, those Al Qaedas are smart!

Right! Just remember what our friend Mr. Goebbels (many of whose goose-stepping friends found employment in the CIA after the war) said: The bigger the lie, the easier (and harder) they fall.

I don't know about you, but I ain't falling for it.


       Margaret Wyles is a Northern California activist and occasional contributor.


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Published January 14, 2002
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