I am on assignment at the World Economic Forum in Davos, Switzerland. Unfortunately, my previous commentaries irked the organizers so profoundly that I was not allowed the intimate access usually accorded friendly members of the media. No matter, I am staying at a pleasant bed and breakfast about an hour and half outside of Davos….but I digress, back to the Forum.
I am eagerly awaiting the pronouncements of the economic and financial Gods who attend the forum… (Dear readers, do not despair at my exclusion from the inner circle of attendees as, truthfully, I could not afford the $250,000 ticket price to attend) each year to discuss unemployment, deficits, austerity, money printing, taxes and the 50 Trillion dollars in global government debt at a tax payer subsidized party…
In order to enhance my ability to offer cogent and relevant economic commentary to you, my dear readers, it occurred to me that it would be a good idea to read an economics textbook to enhance my knowledge of the topics that are central to my remarks. (Little did I know that my foray into the world of economics would prove to be more humorous than Montreal’s ‘Just for Laughs’ festival.)
I selected the book, “Everything You Need to Know About Today’s Economics” written by my good friend Gustavo Laframboise-Pierre, the Director of Statistical Creation at the European Central Bank (ECB). My friendship with Gustavo traced its roots to that period in his life when he was my main bookie.
Some Background Nonsense!
Gustavo’s ascension to his lofty position at the ECB was not so much the result of a diligent work ethic coupled with academic credentials and work experience but, rather, it was the result of a senior member of the ECB management team making an extremely large and incorrect wager on the result of the most recent World Cup. The magnitude of the debt was so great that the only way the debt could be settled was by offering Gustavo a lifetime, highly paid sinecure at the ECB. (Please curb your cynicism, dear reader, in answer to your question “Are not all jobs at the ECB or any central bank, ‘highly paid sinecures’? I would assure you that some – well, three to be exact – employees at the ECB make less than €500,000 per year.) This is the result of the Central Bank Wage Parity Treaty that was signed at the G-20 summit in 2008 (and you thought they were talking about the Global Financial Crisis!). The treaty was to ensure that Central Banks were able to attract the alleged best and brightest financial minds to guide us through the crisis. It also ensured that the same bright minds that had caused their respective banks and countries to implode were able to find employment and maintain their gilded lifestyles.
(Forgive me, dear readers, for again, I digress!) Let me assure that I took my desire to learn about economics seriously. As I leafed through the pages of my chosen economics textbook I steeled myself for what lay ahead. I even refused to sweeten my morning coffee with my usual hit of Jack Daniels to ensure my powers of concentration were at their peak.
As I read through Gustavo’s weighty tome (well 48 pages if you include the glossary, foreword, afterword, table of contents, dedication and note from the author) on economics I was stunned by the information it provided. Rather than the anticipated discussion of various schools of economic thought such as Keynesian, Austrian, Saltwater and Freshwater et cetera, Gustavo had chosen to focus on the more avant-garde schools of economics. There was no debate about the merits of trickle down, supply side, or Voodoo economics. Keynes, Freidman, Krugman, or Hayek did not even rate a mention.
Gustavo had chosen to focus on those great economists whose theories were currently being strictly adhered to by governments and central banks around the world. I am of course referring to Charles Ponzi, Bernard Madoff, Kenneth Lay, Victor Lustig (of selling the Eiffel Tower fame) and the most revered of all economists, John Law. John Law, of course was the Scottish economist who almost bankrupted France in 1720 when they adopted his notion of perpetually creating wealth by printing money. (Dear reader, like you, I was shocked and appalled that my good friend Gustavo would insult the noble science of economics by referencing the world’s most notorious and infamous fraudsters as if they represented the most relevant examples of modern economic thinking.)
I immediately picked up my Huawei Smartphone and took advantage of its Android operating system and called Gustavo. (Yes, dear reader, I admit I am trying to boost revenue from my writing by incorporating product placements in my commentary. While Huawei, Android and Jack Daniels have not agreed to pay me yet – or even respond to my emails – I am sure if you all go out and buy their products they will see the benefit of being mentioned in my articles. Thank you in advance for your support and understanding on this delicate matter.)
Gustavo answered impatiently: “David, this is not a good time to speak. I am at a Bunga-Bunga party that was arranged for the bankers by the Italian government”. (Dear reader, I will not offend your sensibilities by telling you what a Bunga- Bunga party is. You can do a google search if you are curious – and you should be curious. Suffice to say that Bunga-Bunga parties rarely result in solutions to global economic problems. It is no wonder that outraged women are demonstrating topless outside the venue to protest the mindless male domination of the event.) “Please be brief, David. My ECB team is next in the pool after the American delegation.”
I said astonishingly: “Gustavo, I have read your book and it is as if you believed that our modern economic system is nothing but a fraud perpetrated by brilliant minds whose sole motivation is the preservation of their positions of power and the accumulation of personal wealth.”
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Gustavo said laughing: “David, I want to thank you for reading the book. You are first person to read it. The book was written with the sole purpose of discretely being compensated for doing favors for friends and governments.”
I said with surprise: “Gustavo, how does that work?” and Gustavo said amazingly: “You are so naïve, David. For many years, politicians and people of influence have published introspective drivel using a Vanity Press. Once published, the books are purchased by whatever government or interest group is trying to gain their favour. As a published author the politician or individual appears cerebral to the public, and makes a fortune on the book, the personal financial gain and profit appears legitimate to the public so no nasty accusations of bribery or influence peddling occur. The government or interest group gets the disposition that is most favorable to their cause. I sold 1 million copies of my book to a European government who did not want me to publish a report that indicated that they would be bankrupt in two years. I pocketed $4,000,000 on that deal. The report was buried and my books are sitting in a warehouse in Marseille.”
I replied firmly: “So, you do not believe that Madoff and Ponzi and other assorted fraudsters are representative of our current economic system?”
Gustavo’s response was classic: “David, of course I do. Yesterday at the Forum we were enlightened by a video conference call from Bernie Madoff on the topic of sustainability. He very kindly took time from his busy day in prison to help us understand how to keep a fraud going for much longer than one would think is reasonably possible. His key take away was that one should always remember that people desperately want to believe” (or, as PT Barnum famously said, ‘There is a sucker born every minute.’)
I said beggingly: “Gustavo, please tell me that the illuminati of global economic thought are not becoming acolytes of Bernie Madoff.”
Gustavo replied smirkingly: “That ship sailed a long time ago. Leaders around the world worship Mr. Madoff’s ability to keep the illusion of wealth active in the minds of his clients for so many years. Only Kenneth Lay of Enron notoriety is held in higher regard by today’s leaders for his ability to create the illusion of wealth. How do you think the leadership of the United States is able to wake up in the morning without retching at the thought of their unfunded liabilities for various entitlement programs? Like a Ponzi scheme, the U.S. dollar and all entitlements will only evaporate when people no longer believe or if some anarchist has the temerity to say that ‘the emperor has no clothes’.
Tomorrow is our annual ‘Salute to John Law’ Dinner. All attendees at the dinner will be given a one dollar bill in the morning prior to the dinner. Whoever can photocopy and produce the most bogus one dollar bills by 6 p.m. and thus create wealth will win the coveted John Law Award. The Greek contingent used to win the award all the time but for the last five years the U.S. Federal Reserve chairman has blown away the competition. Mario Draghi, though, has indicated that he has a cunning plan to ensure his victory in this year’s competition. He is a 5 to 1 favorite this year.
By the way, David, I am making book on the competition for the ‘John Law Award’ and your credit is still good with me if you want to place a bet. The minimum bet is $10,000 dollars. The bankers have placed over $10 million in wagers so far. I am going to make a fortune. (I thought to myself, Gustavo always was an entrepreneur at heart. Like the innkeeper in Les Mis, Gustavo was always master of the house wherever that house might be, even at the World Economic Forum.)
All the money printed by the competitors will be used to pay the professionals who provided their services at the Bunga-Bunga party. Needless to say the organizers of the Bunga-Bunga party will be ‘Getting the hell out of Dodge’ faster than a central bank printing press after making the payment. The professionals who worked the Bunga-Bunga party will not be amused when they discover they have been paid in bogus dollars.”
I felt as if I was going to cry as I realized that our global economic order was being directed by the philosophies of Bernie Madoff, Ken Lay and John Law. Then I realized one should not cry, one could only laugh at the absurdity of our situation. My laughter was loud, long and not influenced by the giant doobie I had fired up while speaking with Gustavo. (Malawi Gold if you must know.)
Our global economic system seemed to have become a pyramid/Ponzi/shell game. I told Gustavo as much and was stunned by his reaction.
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Gustavo responded pompously, his voice affected by the snorkel he was adjusting for his turn in the Bunga-Bunga pool: “David, you seem to be confused. The largest employers in the world are governments, the banking industry and the defense industry. None of these sectors produce growth or value. The purpose of this meeting in Davos is to discern and implement new ways to convince the public that giving these sectors perpetual and eternal supply of money is the path to financial salvation. If not, the money:
- might find its way to entrepreneurs and small business owner who would surely end the reign of the Davos attendees as global arbiters of wealth distribution….[and, moreover,] the money
- might be wasted on education, infrastructure and silly projects to make the world a better place.
If we educated the public they would never allow us to spend billions of dollars on aircraft carriers, jet fighters, money printing and Global Economic Summits that are highlighted by Bunga-Bunga parties. David, I will call you in a couple of days and we can do lunch”. He hung up abruptly.
I was left to ponder how I was going to assimilate all that I had learned during my conversation with Gustavo regarding the current state of Global Economics into my commentary. Charles Dickens described deplorable conditions in the workhouses of his time in his novel ‘Oliver Twist’. However, even he was afraid to accurately describe the true depravity and horror of those workhouses due to a fear that no one would read his book. I can imagine how he felt. (Dear reader, please, get real. I am NOT comparing myself to Dickens.)
Were I to report the true state of our global economic system,
- the money printing,
- the runaway debt,
- the shell game of swapping debt from one pocket to another,
- the egregious spending of treasure on bigger faster more expensive and absurd Weapons of Mass Destruction,
- the looting of government coffers by hugely over-priced dubious, disastrous projects…
- the income inequality,
I would risk being labeled an anarchist or a Cassandra. My work would be deemed irrelevant. (Therefore, I want to report to you, dear reader, that my attendance at the World Economic Forum has taught me, as the Frank Drebin of economic commentators, that there is ‘Nothing to see here, move along, nothing to see here’ as this highlighted clip from the movie Police Squad demonstrates.)
Let me just conclude this missive by saying, instead, “All is all good!”
Editor’s Note: The above excerpts from the original article by David Hague have been edited ([ ]) and abridged (…) for the sake of clarity and brevity. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.
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