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"To Big to Fail"

some analysis

To Big to Fail

We live in the age of mega-saurus, the age of enormous globe trotting corporations.

Now according to the internal logic of capitalism, what is supposed to be happening is that each one of those megasaurus are to be found plotting to compete with the other megasaurus, and with any luck, will be able to rob the other megasaurus of market share, thus being very successful at doing that sort of thing, which would be good for everyone, especially when that one megasaurus cuts the price on vegetable slicers to 29.99, which is real deal, and much cheaper than vegetable slicers were just ten years ago, when you might have had to pay at least 99.99 to get one things. You go back ten years before that and I paid six hundred, yes, that's right, six hundred bucks for a microwave oven, and now you can get those things for as little as 60 bucks.

Ah, yes, the miracle of competition, as one megasaurus carries out a plan to castrate another megasaurus, When you stop to think about it, you have to wonder why anyone in their right mind with their sanity intact would want to consider doing such a thing, for while it may be possible to rob a megasaurus of market share this might not be something someone might want to be doing at this point in history, for fear that you might be sucessful.

I have heard this deluded sounding chatter in recent times which makes a distinction between our so- called 'healthy corporations' and those that are unhealthy, as though making such a distinction were somehow meanginful, in that there now exists a real difference between the two in our day and in our time. For while a healthy corporation might be a healthy corporation today, once that unhealthy giant megasaurus gets eviscerated and spills its guts onto the ground, the ruinous economic contraction that will result, not to mention all that ruinous price deflation, would be enough to make even the healthiest of our corporations start to feel a little under the weather.


The Wall Street Casino

You might have heard about the casinos of Wall Street where apparently there are something like one quadrillion dollars of outstanding derivatives in play. You could bet that the price of tea in China will rise or fall or you could place a bet that the rain in Spain falls mainly on the plains, and that therefore it still will or then again maybe in sudden surprising turn of events, maybe it won't, which no doubt would result in an extraordinarily good pay off for anyone lucky enough to place such chips down on the table to make that bet with precise timing, helped out no doubt by all those complex statistical models that run on computers around the world these days.

Now a casino contributes nothing productive to the world economy, and therefore you might be wondering why Wall Street would want to compete with Las Vegas to attract the business of a bunch of gamblers. Now one interpretation you so often hear is that due to a tragic lack of liberals a whirlwind of greedy piggery has been unleashed on our tragically under-regulated planet, with all that gambling being just one more result of a planet suffering from a lack of liberals.

An alternative explanation would be that while gambling fulfills no productive social function, it nevertheless can fulfill a useful social function, particularly in those cases where a corporation might have a hole in a spreadsheet that required a number but didn't have a number and therefore needed one. As you would know corporations around the world now have hired traders who work down in the basement, whose job it is to raise a little spare cash for corporations by doing all that gambling. Once in a while what is known as a rogue trader will go on the loose, and instead of hedging his gambling bets made with that corporations money by gambling on both heads and tails, while just gambling slightly more on heads, that rogue trader will give in the urge to make a big score on what was supposed to be a sure thing, and just dump the whole pile of money down on heads, only to wind up taking that big corporation to the cleaners, instead of having the big corporation taking some gamblers to the cleaners, which is how that was supposed to work out.

Now traders get huge bonuses, for example, last year their Christmas bonuses came in at 40 billion dollars. It makes sense for Wall Street to pay those traders that cut of the winnings from the Wall Street Casino, since that money does not come from normal business, but rather from the Casino, and therefore is just found money, and can be paid out even if the actual business of that corporation isn't doing so great, for you see, corporations do want to encourage those gamblers to bring in more of that found money. If 40 billion was just the cut of that gambling money made by those traders down in the basement, this gives you some idea of just how damned much money corporations must be making in the Casino, and just how much their quarterly earnings reports must depend upon the padding of those numbers with that free gambling money. If only ten million gamblers got taken to the cleaners to the tune of 4,000 dollars each, that alone would be enough to pay for all those bonuses paid to those traders, and if they got cleaned out to the tune of 20 or 30 thousand each, that would be enough to maintain the cut earned by the corporations who supply the traders with the pool of money they have available to use for gambling.


The End of History

You may have heard that bit about how when the old Soviet Union collapsed, that marked 'the end of history' and that from now on history would consist of endless centuries of capitalism. Apparently some philosophers have somehow drawn the erroneous conclusion that one century is pretty much like another century, and that when it comes right down to it, all centuries are the same.

The problems we are experiencing today appear to be directly related to the continuing widespread belief in this particular philosophy. The end result is to have far to many Neolithic Neanderthals who somehow time teleported from the Fred Flintstone era of capitalism only to find themselves transplanted in what is now the twenty first century, at which time they promptly got down to the business of attempting to disembowel a megasaurus.

Now let us assume that they were successful. All the signs would indicate that they were successful, although the lack of transparency makes it hard to know for sure just how successful they were, which is itself another one of those signs that they must have been successful, for it looks for all the world like another one of those dead canaries. One cannot help thinking such things when considering the sight of a megasaurus wearing a truss because apparently it was suffering from a rupture of some sort.

As long as a megasaurus is wearing a truss, and its condition does not worsen and require hospitalization in the intensive care ward, things will remain relatively calm, the problems only becoming more and more severe when a megasaurus requires payments from Medicare. SWe must then ask if it would be possible for the governments of the world to come up with all those untold trillions of dollars that would be required to pay the medical expenses to stitch up the belly of some unfortunate eviscerated megasaurus. Perhaps the Federal Reserve could crank up the printing presses and just print up trillions and trillions of dollars of funny money, but somehow that doesn't seem like much of a solution.


The Logic of Devouring

It therefore becomes obvious that we have reached a great historical turning point, and that now the logic of capitalism can no longer and never again be the logic of competition, but rather this era marks not the 'end of history' but rather the beginning of some new history, and that the logic of capitalism must become the logic of devouring (mergers) for the failure of one is the downfall of all, or perhaps the logic of uneasy cartels, with the planet being carved up like a chicken. I use the term 'uneasy cartel' for a cartel can only last until an opportune moment for more devouring comes along, and we must also consider the unsettling prospect of one very corporation getting stuck with a wing or a neck bone instead of getting a thigh or a breast. As well one must always worry about the neighbors, who might be thinking of moving up in the world, thus making them a strategic competitor while at the same time making them an ally and a member of some very uneasy and thus perpetually unstable cartel.


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