Live and Let Die?

Imagine you are at a Texas Hold-Em table and a very rich banker steps up with a collection of cash from all corners of his derivative-laced empire. He bets hard on a 6-3 unsuited (bad bad hand) and loses it ALL.

And then, because his losses would mean he can't play anymore, he asks everyone else at the table to bail him out. Would anyone do it?

Imagine for a second that Company X is facing some liquidity issues and needs to tighten its belt for a while to get things flowing again. What is the very first thing Company X would do? Lay off workers. Company X would not think twice about putting 25 year vets of the company out on the street to fend for themselves in order to "keep the company competitive." It hurts to be on the other end of things ...

Now all of these big investors and bankers are telling the average Joe that, if he doesn't pony up for the Wall Street gamblers that lost their cash, then credit flows will halt, bringing the economy to a standstill. Because bankers are too scared to lend in a dangerous environment. Not because there is no credit, or because they are forbidden or unable to lend, but because it is TOO RISKY for them to lend in this volatile environment.

ie it is too risky for the thief to rob when the cops are out and about, but it wasn't too risky to lend when the cops were absent. Now that the bankers have been "caught" they don't want to lend. But they were happy to when risk was "someone else's responsibility."

An economist, naturally, will tell me I am simple minded and don't understand the intricacies of finance, or the global implications of Wall Street's collapse.

Well I actually have read a bit of Adam Smith and Max Weber and, according to these pillars of our so-called free market capitalist system, Wall Street must die. In a free economy, the Fed has no place, bailouts are anathema and those who gamble on unsuited 6-3 hands are doomed to fall by the wayside AND BE BOUGHT UP by those who did not bet on crazy risky ridiculous hands.

And the taxpayer who bet hard that his credit card would always be there for him, that his double mortgage on a house WAY out of his league would be -- eventually -- paid for by the magic hand of appreciation must also suffer the consequences.

It is easy for me to say all of this, because i don't have a credit card and i have earned my pithy cash on a freelance basis for most of my life. But i don't buy expensive things and i always have enough to get by, because i know that a bad bet on my part means homelessness. So i watch my ass. And i guess i believe that medicine that works probably tastes like shit. In the end, a live and let die approach to the US economy would result in a stronger economy. And the years in between -- well I moved here because i am ready to grow cabbage in my backyard with all the rest of the Americans. I could have easily stayed in China and avoided all of this ...

Anyway.

An economy such as ours today is not unprecedented. Read people, and see that the 1920s only had different fashion, different toys, different slang ... for years people have been telling us that living above our means, charging everything and so on will come back to bite us. And now it has. But no one -- least of all the bankers and traders and financiers who made it all possible -- wants to bite the bullet.

Chinese are known for saving their cash and living way BELOW their means (well most of them anyway, of course the whole nouveau rich dont apply). Here in Portland Intel has a big R&D center staffed with a grip of Indians. These kids make 100k a year, live four to a room, eat at home, drive Civics and send their money home to mama. Not too cool, right? but pretty damn smart, no?

China sent a planeload of cash -- a plane load of cash -- to Seattle to buy planes and another to South Africa to buy a stake in a bank. When is the last time a business in the US paid for something with a big pile of cash? Economists say business aint possible unless you have credit ... true, cuz ya aint got no money in the bank ...

Now i see late night scam-ads telling people: sell yer "worthless" gold and get cold hard cash. HAHAHAHA. oh jesus. sell gold for "cold hard cash."

This happened once before, when FDR told everyone in the US to hand over their gold. The only difference between the 1920s and 1930s and now is the slang, the medium and the face ...

History is meaningless to those who pay no attention to it, it holds all meaning for those who do ...

Three God's Village and The Hakka - lil Update

I have gotten a glimpse of the historical record of the Hakka that settled in Three Gods Village where I live. They arrived in Sichuan during the reign of Kangxi -- first in Longquan (not far from where I am) then eventually in this village. The trip took 4 months from Guangdong where they are from and the original Li Clan is now split amongst 12 generations and "middle names."

The generation that has children now -- the adults of the village -- are Clan Li, middle name "Guang." My neighbors are Li Guang Wen and Li Guang Xi. Their older brother is Li Guang Cuan.

But the middle name only extends to the male heir, so any girls are "exempt" ... so Li Guang Wen's daughter is Li Tian Tian. And Li Guang Xi's younger brother eschews the whole thing altogether and named is son Li Chun Tao. They barely speak the old language -- they might claim to to impress visitors and emphasize being unique -- but the truth is that after 1949 the culture began dying and as of 1980 it was almost completely dead.

In 2007 one of the elders put together a description of the family history and laid out a map of their travels and pointed out the location of the grave of their common ancestor, near the Technical College in Chengdu.

I will meet him tomorrow and give you a transcript of his essay and a pic or two.