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 …


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 …

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Sascha Matuszak
Sascha Matuszak

3 thoughts on “Live and Let Die?

  1. I am in step with you 100% on this. The fathers and acolytes of this problem are standing side-by-side squabbling over which father is going to lose most. They take a break every now and then to shoot their head out the door for a “god bless america” and a “what’s right for the people”, to just head back inside and sweat through their wallets.

    If you were making 6 figures, you think you’d make reason that it was american to consolidate your finances “for the people”… and if 20 million of the nation’s elite sold a boat, you’d have your 700 billion right there, instead of pulling it from Jake that works at the in-and-out burger or jose that works in the back of the kitchen, Marquita-sweepin the floors of elderly homes. Its the acolyte that wants resolution and fair tax breaks. And they will get it. Somehow there was fear instilled into the meetings this week to trigger an unsuccessful vote for the administration, which proves the weakness of the group to pass it again. However, rich men in a sinking boat will find a way out. And in time we’ll all be pluckin cabbage…

  2. TF in ‘Rescue the Rescue”: “Well, you say, “I don’t own any stocks – let those greedy monsters on Wall Street suffer.” You may not own any stocks, but your pension fund owned some Lehman Brothers commercial paper and your regional bank held subprime mortgage bonds, which is why you were able refinance your house two years ago. And your local airport was insured by AIG, and your local municipality sold municipal bonds on Wall Street to finance your street’s new sewer system, and your local car company depended on the credit marks to finance your auto loan – and now that the credit market has dried up, Wachovia bank went bust and your neighbor lost her secretarial job there.

    We’re all connected. As others have pointed out, you can’t save Main Street and punish Wall Street anymore than you can be in a row boat with someone you hate and think that the leak in the bottom of the boat at his end is not going to sink you, too.”

  3. SIGH. I actually agree with both of you (and TF I suppose), which demonstrates either my powers of empathy, my schizophrenia or both.

    It is immutable fact that we are all tied together and anything that happens to one man affects another — not just in the metaphysical For Whom the Bell Tolls sense — but obviously in real terms, in the wallet.

    But ole TF should realize that a bailout does nothing to help us. Our system is based upon an acceptance of flux and flow. SInce the creation of the Fed, American economists have tried to eliminate the flux and just enjoy the flow. This leads — always — to large scale crises like this one. In which people dont just see a bit of flux, but end up on the street.

    So i guess when i put the ? on the end of the title, i am asking: can we handle the consequences?

    and i know we can’t, thus the palpable anger in the post.

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