pickpocket2My lawyer friends tell me that to perpetrate a fraud there must be intent. The mere fact that someone misleads another and the result is a catastrophic reversal of fortune for the person mislead does not constitute fraud on the part of the leader. Even if the person doing the misleading ends up profiting wildly from the poor leadership offered the schmuck, absent intent to defraud, there is no crime. Even if the one doing the misleading does lose his shirt and the schmucks, and the schmucks’ children, grandchildren and great grandchildren, are made to contribute to covering the leader’s loses, thus exacerbating the schmuck’s own loses, absent intent, there is no crime.

The paragraph above describes why the massive transfer of wealth from the middle class in the United States to the wealthy leaders of the world’s financial, not just the nation’s but the entire world’s, leaders and investors is not a crime. The financial leadership did not, and I believe this is true, mean to impoverish the nation. They did intend to get wealthier than they already were. However, they allowed themselves to believe enough crumbs would fall from the deal tables to make all the rest of us a bit wealthier as well.

Of course, once these geniuses saw the train wreck coming they quickly devised a plan to save their collective ass. Except for Lehman. Apparently nobody liked Lehman.

All of a sudden, these “free trader, libertarian, government can’t be trusted to pour piss from a boot” guys, these “clear eyed, no nonsense private enterprise” guys, these “no regulation is good regulation” guys, all of a sudden they turn to the only group of saps who were both scared enough and, collectively, still rich enough to bail them out. They turned to you and to me, and all the rest of the great American schmuck population. The great collective “WE,” of whom it was once said, “there’s one born every minute.”

They took advantage of our fear and stampeded “our elected Representatives” and “our Senators” into notions such as “too big to fail” and “securing the integrity of the financial system” and, my favorite, “avoiding another Great depression.”

So we did it. We gave them, outright, over two trillion dollars and we have issued guarantees for another twenty-one trillion dollars of long tail, unknown future liabilities.

They rewarded us by returning, almost immediately, to profitability and rewarding the geniuses in charge with more and more bonus money. They rewarded us by fighting any meaningful reform that might prevent something like this from happening again. They rewarded us by claiming that the only thing wrong in this economy is the workers are greedy, demanding too much in wages and benefits. They rewarded us by pointing out that we simply don’t work hard enough or smart enough.

They, the conservative, serious thinking leaders of our financial institutions cannot be burdened by interference from the government. The government simply gets in the way of the innovation, innovations like sub-prime mortgages and the securitization of the same, like debt swap instruments and the securitization of the same. Without innovation, like these brilliant financial instruments, progress will slow. The really bright actors will go to other countries and other financial centers elsewhere in the world and take all the money with them.

They can take all the money with them because, as part of free trade, the dogma that may not be denied, the leaders of governments all over the world decided there should be no restrictions on the free movement of capital. For, don’t you see, capital must be free to move to wherever it can be most efficiently deployed and utilized. “Efficiency” being defined as whatever they say it is.

2009_0620_lagc_financial_fraud_580x290It is just the breaks of the game that the capital they can, and, if forced, will, freely move is the money we gave them. It is also the money we guaranteed them they can have if things don’t work out as planned and they need more.

There is nothing to be done about this. Ask any of your Congresspersons or Senators. They will tell you that any attack upon free trade, the word “attack” be defined as any question or statement that may be interpreted as less than full and complete submission to dogma, is tantamount to class warfare. It is an open invitation to the destruction of comity and civil society. Any suggestion that such an accusation of class warfare is merely a con man’s cover, is libelous and calculated to loose the furies upon the peaceful nation. “On your head be it,” you will be told.

And, of course, if enough people take up this flawed attitude, they, the brilliant, innovative, hard working financial geniuses, will be forced to take the money and move to Britain or Singapore or Bahrain or some other locale. They will move where there is still comity between the classes and persons of all rank recognize superiority when they see it and do not resent privilege.

So, my fellow schmucks, they have us by the very shortest of our short hairs. We must either learn to seek pleasure from the pain or shave. Anybody got a razor?

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Mike Copeland

Mike Copeland

I am old enough to know better. I have a B. A. from Birmingham Southern College and a Master's in City Planning from Georgia Tech. I have worked in SC State government for over a decade leaving as the Deputy Executive Director of the State Budget and Control Board, the state's administrative agency. I have owned the Fontaine Company since 1984 and am the managing member of viscerality.com.llc a management, marketing and consulting company.

I am the author of several novels, some of which you may buy and read if you are of a mind to do so.