Saturday, December 31, 2011

The Economic Patronization of Middle America’s Currency

Cash, the buck, currency, the greenback, and dead presidents are first derivative of the US economy and the American dream.  It’s the dollar, stupid.

The dollar is first derivative and first level of patronization of the American dream.  That is to say, it has no value except backing and support by middle America.  It’s paper.  It’s a promise.  It can be massively printed, duplicated, and devalued.  The dollar is slippery that way.  First derivatives are always slippery.  The only thing, in the universe, more slippery and slimy than a first derivative, is a second, third, fourth, or fifth derivative.

A person buys a house using the dollar, the first derivative of the US economy and the American dream.   The house is paid for by a stream of dollars.  In the meantime, the house is purchased by a banker, a middleman, using federal reserve dollars (middle America’s dollars).  This is called a mortgage.  A mortgage is paper, a second promise, a second derivative of the US economy and the American dream. 

The mortgage derivative is definitely slimier than the dollar derivative.  It’s a second level promise.  It has more fine print and complexity.  A mortgage is a first derivative on the dollar, a derivative itself, and second derivative on middle America and the American dream.

Enter wallstreet.  Wallstreet bundles up mortgages into “financial instruments”.  These instruments have their own fine print and complexity.  As “bundles” are bundled, the dollar is leveraged as highly as possible to any level derivative, third, fourth, fifth, etc.   The limit is determined by the willingness of buyers (sucker born every minute capitalism) to exchange a dollar for third, fourth, or fifth level “financial instruments”.  This is free market derivative trading.

The dollar, the first derivative of value for the American dream, is owned by middle America.  This is because middle America is final backup for the dollar’s value.  Wallstreet, easily overcome by trading insanity, quickly forgets that all the “financial instruments”, making them so much money, are but higher derivative to the dollar, middle America’s responsibility.  As the wealthy elite “milk” dollars from the economy by trading “financial instruments” it is very convenient to forget the foundation supporting all trading schemes is the dollar and middle America.

Economic patronization of America and the American dream increases with each derivative level of “financial instrument” invented and traded.  Each derivative level, starting with a mortgage, is higher level of patronization of middle America and the American dream.  At third and fourth levels, the patronization of middle America quickly becomes extreme (radical).  What works on paper (derivatives) doesn’t equal reality.

It is particularly galling (radical) to middle America when wallstreet “derivative casino game” failures require bailing out.  It is unconscionable when these failures threaten the stability of the economy.  Wallstreet must understand.  It’s the dollar, stupid.  No one likes to be patronized.

Wallstreet must also understand there are limits to wallstreet derivative invention and practice, just as there are limits to casino gaming and practice in Nevada.  No one cries “socialism” every time a gaming law is passed in Nevada.

Today, middle America is particularly galled when “milked” wallstreet dollars are invested in out-manning, out-moneying, and out-lawyering middle America’s democratic representatives in Washington.

When service in a restaurant suffers, more waiters are needed. When fire breaks out everywhere, more fire fighters are needed.  When crime becomes rampant, more police are needed. When democracy morphs to elected oligarchy and America lacks governance, send help to the few surviving democratic representatives.  More representatives are needed.  More presidents are needed.  The antidote to corruption of power is to disperse power.  Step it up, America.  Be proactive. Check out plan-b.

Citizen is coach to team democracy.  Coach is responsible for success. 
Seeking presidential candidate (for one of 9 elected executive branch presidents) 2016

No comments:

Post a Comment

MART is a Democracy Marathon

MART is a Democracy Marathon
It's your call, Coach