Make A Run For The Money

October 11, 2008

It’s quite understandable that most individuals are freaking out about the current economic disaster. While few people actually directly buy stocks—thought plenty of people have dormant Ameritrade accounts for when they thought they were going to be crackerjack day traders back in 1998 but gave up after one week of taking a bath on internet pet food companies and incorporated European “tanning” salon chains—many people have 401(k) accounts. And these retirement accounts have not exactly responded how imminent retirees want them to—namely, up. It’s rather understandable that a nation of reluctant investors has suddenly realized how distant pages in the financial section of the local paper now officially matter to them beyond checking the potential interest rate on a loan for that sailboat they will never buy.

Thank goodness that people are reacting rationally about this, such as thirty year olds waiting all of four hours until they get home from work to accept the tax penalty and pull all their money from their retirement accounts and stuffing it under their mattress, causing most financial advisors to fall over in pain after listening to small parts of their soul die. While the market is being unpredictable, there are certain rules of finance that are immutable, one of them being reckless changes in your financial spending are the equivalent of the cross between a women two weeks before the announces she wants a divorce and…every other woman.

Well, at least journalists are being reasonable. Such as Time magazine, which ran a cover story entitled “How We’re Going To Be Sipping Bone Marrow Soup And Eating Crabgrass Clippings For Breakfast For The Next Three Decades.” For style, they put a stock picture of a soup line from the Depression on the cover; stock photos being necessary since there aren’t exactly any modern soup lines to snap pictures of, a fact no doubt quickly ascertained by the crack objective journalists at Time. One assumes that journalists study to become journalists because they already understand everything there is to know about finance and economics (cough, cough).

So at least television financial advisors are acting like reasonable human beings, right? Such as Jim Cramer, the host of Mad Money, declaring that anyone who hasn’t converted all of their shares into gold bullion being stored in small compounds in the Pacific Northwest is going to be first up against the wall when the revolution comes. Most financial advisors try to avoid such broad-based panic-generating statement, though in Cramer’s defense he is certifiably insane.

While it’s certainly possible the economy will spiral out of control and falling stockbrokers will force the creation of a new task force within FEMA, things are a lot different than they were in the 1930’s. The banking system now resembles what happens to my DVD player after the power goes out and comes back on during a storm—it’s a lot of interconnected wires and signals that create a lot of flash and activity that doesn’t really show that anything productive is happening. But tinker with it for a few scary minutes and it will still play Suburban Commando like a champ like it always has, at least until a power surge destroys the whole thing.

Of course, there is one unfortunate similarity between now and then, and that’s bank failures. Bank failures have been virtually nonexistent for the past sixty decades or so (the legal system delineating the different types of banks in such a way as to make Andy Warhol a beacon of sense and clarity), owing in part to the fact that, unlike now, most banking CEOs aren’t complete amoral idiots. An elaborate system of balances has been set up in the financial industry for years effectively guaranteeing that banks won’t fail. They mostly do this by forcing banks to hold on to a certain level of assets in relation to the money they are holding, a concept so simple that no one ever followed it.

During the savings and loan crisis in the late 80’s and early 90’s, financial institutions were using any and all random items to claim as assets—everything from artwork with deliberately overinflated worth to all the crap they could find in their grandmother’s attic—and in many cases would simply declare their grandmother’s attic to be worth what it theoretically would be worth if anyone wanted to actually go root around and inventory the place while she prattled on about a sale at the Hallmark store and meat rationing, which of course no one ever did. Because of the resulting financial mess from this scandal, many regulations we see today being flaunted were initiated—and the reaction, alas, seems to be much the same.

Unfortunately, new regulations didn’t help, since banks went ahead and used mortgages on homes that had highly inflated prices to begin with as assets, and the exact same story started over again—when the depositors knocked on the door, the bank found nothing but a burned out DVD player in granny’s attic. So it may be a while before we see any part of a recovery. If only there was a way to make embarrassingly clunky metaphors a solid asset, we could finally get ourselves out of this mess.


Fifth Avenue Bailout

October 1, 2008

I don’t think anyone knows what to think about this economic bailout.

The presidential candidates aren’t sure of what to make of the failure of the bailout to pass. Of course, the candidate’s position on the bailout package can be summed up pretty nicely:

Barack Obama: “I will take a tentative position on the bill until the House votes it down, so they can get all the heat for its defeat. I’ll then have an internal poll taken to see whether I want to be for it or against it regardless of its content. Once it’s voted down, I can then come out against it with little repercussion.”

John McCain: “I have no idea what is in this bill because I pretty much know jack about the economy. I would defer to my vice presidential candidate, since she is set up to complement me on my weaknesses, but it turns out she doesn’t know jack about the economy either. Even though this is the case, we still know more about the economy than Fannie Mae, Lehman Brothers, and the Treasury Department combined.”

Of course, even though the House of Representatives voted on it, which necessitates them specifically stating “Yes” or “No,” they don’t know what to think about it, either. Almost immediately as the last ballot hit the bottom of the box (or I assume as such; I have no practical way of knowing how votes are actually, physically tabulated on the House floor. It’s probably some pussy method like swiping an ID card, but I like to imagine they have to text their vote to number 67773 (standard text messaging rates apply) or at the very least auction off a part of their soul every time they cast a vote), representatives took to the airwaves doubting their vote cast. Some seem genuinely confused, given that Treasury Secretary Henry Paulson gave lawmakers approximately fifteen minutes between the time they received the plan and had to vote on it, forcing legislators to use the “find” function on Adobe Acrobat to look for—depending on their political philosophy and geographical location—“tax cuts for the same people who got us in this mess in the first place,” “education grants that have somehow been tangentially related to the financial crisis,” “energy investment credits, otherwise known and handing out burlap sacks of cash to the oil companies so folks from Texas and Alaska might actually sallow this piece of tripe law,” “contractual obligation to saw off California so it drifts out into the sea,” or “Britney Spears Sex Tape” (the latter, one presumes, is simply out of habit).

The American population isn’t sure what to think about it, either. It’s one of the finest balancing acts in modern politics. People hate bailing out with massive amounts of taxpayer cash the obviously boneheaded mistakes made by rich Wall Street tycoons who, when it’s all said and done, will still be driving their Porsches around Rodeo Drive while eating foie gras and drinking Château Latour and buying tickets to the Eagles concert afterwards. On the other hand, not bailing them out will spell if not total disaster a pretty unfortunate downturn in the economy causing many consumers to stand in bread lines reading the want ads while talking on one of their three cell phones.

And, it turns out, Wall Street doesn’t know what to think about it, either. The stock market has been incredibly volatile, which is saying something in a year of an increasingly large number of ups and downs. Investors can’t quite decide if they want to jump off of buildings, throwing worthless stock certificates of AIG like confetti as they fall, or whether they want to crouch behind their office chair, salivating while holding a fork in one hand and a knife in the other, waiting for the right time to jump and carve out a huge chunk of the mortgage business at dirt cheap prices during the Great Huge Federal Government Fire Sale Of Assets From Incredibly Greedy And Stupid Companies Whose Board Of Directors Are Still Somehow Going To Make As Assload Of Money.

And—heavens to Betsy—I don’t know what to make of it, either. My rather theoretical libertarian heart wants so badly for the government to shrug their shoulders and extend a middle finger of sympathy to these failed companies who failed because they failed to realize that they were greedy and stupid. And I want people who bought houses worth about three times outside of their pay scale to suddenly realize that it isn’t just cocaine, Amway, that Ron Paul contribution you made one night you were drunk, and a nasty Starbucks habit that can lead to financial distress; sometimes overextending yourself does, too, and you shouldn’t expect the government to bail you out. On the other hand, it was government interference that sort of precipitated this in the first place, with both unrealistic tax credit encouragement and regulations effectively forcing bad loans to be guaranteed. And while I think it’s bad policy, stabilizing the economy while letting the government make a dime off the deal maybe isn’t the worst thing in the world. The blame is easy to spread around because everyone is to blame. About 13 people out of 433 are still trying to figure out the most politically expedient way to assign it for the record.


Welcome To The House of Cards

September 28, 2008

With the looming economic crisis soon to splash down on the American and global financial systems, maybe normal citizens are concerned about how this will affect them. Will I lose my house? Is my 401(k) solid? Does this mean more news about FDIC and subprime loans and less about Lindsay Lohan’s hoo-ha? These are all very important questions, so perhaps it’s time to clarify a few things about what’s happening:

Q: So…am I up the creek or what?
A: Probably. But maybe not. The extent of the financial crisis had yet to be known. So far, few consumer banks—the kind that give away free toasters when your order checks with cows and puppies printed on them—have been adversely affected. It’s the financial banks that are getting tugged on the short ones. How bad the situation will get depends on how much of the financial bank crisis trickles down to the consumer side.

Q: Will the government be supplying me a paddle, then?
A: It depends. If the paddle companies made years of lousy mistakes compounded with excessive indifference to market conditions, then, yes, the government will probably reward them by giving them a boatload of cold cash.

Q: How did we get in this mess in the first place?
A: Well, it depends on your political philosophy. If you’re a liberal, then this is all part of George W. Bush’s plan from January 20th, 2001, to nationalize the United States economy, personally pilot the planes into the World Trade Center, monopolize the oil supply so he can freely drink a quart of it every day for breakfast, and spend the waning days of the American empire circle jerking with Dick Cheney, T. Boone Pickens, and Rupert Murdoch. If you are a conservative, you blame this on irresponsible consumers buying $500,000 houses with a steady income solely from the fry cook line at the local Jack in the Box and whining when it turns out they can’t make their mortgage payment on time. If you’re a libertarian, you shake your election-losing fist at Richard Nixon for ever getting us off the gold standard in the first place. If you’re religious, blame it on the gays.

Q: None of that involves any financial or economic rationale at all.
A: Your point? It’s an election year, you know.

Q: Right.
A: Right.

Q: So what really happened?
A: You will probably sleep better at night if you don’t know.

Q: Try me.
A: Fair enough. While there are multitudes of reasons why—high commodity prices, a cyclical recession, declining value of the dollar, Ben Bernanke wore a blue tie instead of a red one last Monday—it all focuses on the housing market. For the past decade or so, easy credit—encouraged by the government for citizens (read: voters) to buy houses on the cheap—inflated housing prices well above the market price. Banks were even encouraged to loan to individuals whose credit rating was not exactly what one would call totally awesome. To compensate, many of these mortgages had triggers that would cause the interest rate to rise once payments were missed or even simply due to economic conditions. With more demand for housing, then, prices shot up. Since these were individuals who couldn’t normally buy a house in the first place, the rise in prices were artificially increased.

Q: OK. Tell me why I should care.
A: Economists have been sounding the property value bubble bell for around five or six years now, but no one listened. (Though, to be fair, this is mostly because economists have been ringing that particular bell every year since approximately 1776.) This was foolishly exacerbated solely by HGTV, whose entire program lineup consisted of reruns of “Flip This House,” where average, ordinary Americans would buy some shack, invest $2000 of paint and duct tape, and resell it for a cool million all within a matter of three or four business days. When some investors had an epiphany, or got knocked on the head, or simply got drunk enough to understand the current economic system, they finally realized the entire house of cards was about to tumble down quite ungracefully and make the Nigerian Treasury Department look like it had a comparatively solid foundation. When the bubble finally burst and the mortgage rates skyrocketed, maybe people found themselves paying mortgages for houses that were a fraction of their original value, and simply found it to be easier to chuck the house keys at the bank, tell them to sit and spin, and run away.

Q: So Johnny Lunchbucket and Jill Sensible Shoes overextended and have to buy generic Hot Pockets and crank their laundry for a while. Why do the banks care?
Because the mortgages they gave out were licenses to print money. At least they were, until the payments stopped coming in. Of course, that would be the case if the actual bank that gave you the actual loan was the one collecting the actual money. In most cases, these mortgages, once awarded, were immediately bundled up and sold to the highest bidder. These were originally thought to be nice, safe investments, since they involved solid assets largely guaranteed by the government.

Q: So they weren’t?
A: Kind of. The lending institutions responsible for all this—mostly Fannie Mae and Freddie Mac—were acting like a combination of Tom Cruise in Risky Business, Weekend At Bernie’s, and large portions of Caligula. In case you’re keeping score at home, they were effectively nationalized as well.

Q: Wait, what? I thought Fannie Mae and Freddie Mac weren’t owned by the government.
A: Right. And Vladimir Putin isn’t running Russia, soccer will take off in America any year now, and Clay Aiken is straight.

Q: Clay Aiken came out.
A: I know. Exactly.

Q: Oh.
A: And pretty much all of the bank and other financial institutions that have failed are related in some way to all this.

Q: None of this sounds illegal. Stupid, but not illegal.
A: Exactly. All of this was bad decision-making, encouraged by the government. No illegality at all.

Q: Wait. So why the bailout? It seems like the government is rewarding bad decision making.
A: It would seem that way, yes.

Q: Funny how that happens.
A: Funny is not the adjective I was thinking of.

Q: I need a drink.
A: I would not disagree.


Viva la Barista!

July 20, 2008

Starbucks is in trouble, and for the first time it’s not because of WTO rioters or a Brazilian frost.

Recently, Starbucks announces a corporate restructuring to try and reverse a negative slide in profit. The reasons for this are varied and unimaginative, and alas are unlikely to involve such exciting scancals as executives being taped using racial slurs, Enron-style financial shenanigans, or Hepatitis A.

I’ve always been kind of ambivalent towards coffee shops. On the minus side, they sell overpriced, overburnt drinks that are one part legitimate coffee and nine parts dessert. Their clientele is a mix of pretentious college students dividing their time pretending to study and trying to get into the pants of each other, or, alternately, businessmen and women who decide to take a half-hour meeting and stretch it into a three-hour coffee-drinking social gathering where they hash out their executive plans and try to get into the pants of each other. They have ridiculous music which is marketed as “world” and “independent” music, as if they were produced in a Kenyan jungle by rogue pirate sound engineers instead of in Los Angeles in conjunction with an advertising deal with Clear Channel Communications and RCA. They make a pretty big deal about how they purchase fair trade coffee, as if a majority of the profits weren’t still going to the United Fruit Company and the descendents of Chase & Sanborn, and offer health insurance to their workers, for those teenagers who might get carpal tunnel syndrome while burning the lattes.

On the plus side, their stuff is pretty good, even though I feel like doing penance afterwards. And sometimes the baristas are pretty hot. As in attractive hot, not standing in front of an espresso machine all day long on a sticky summer afternoon hot.

Starbucks’s current financial woes stem from several different issues. One of them is competition. No one is going to ever accuse Starbucks from undercutting the competition; their product line has always been pretty expensive, and mom and pop stores usually carve out a fairly large market share by being slightly cheaper but still maintaining a sinful markup that would make the cigarette and textile companies blush with shame and green with envy.

But part of it may be Starbucks’s corporate image. Coffee shops tend to attract exactly the sort of young, progressive, idealistic customer that likes to bring marble mocha macchiatos to the protest rally. And yet one can’t quite shake the fact that Starbucks is a huge corporation, with bottom lines, suit-wearing executives, and quarterly earnings statements just like every other corporation. Unlike local shops, there is little identity in a Starbucks; going into one Starbucks is just like going into any Starbucks, with pretty much the same appearance, products, and color schemes. It’s eerily close to that episode of Star Trek when DeForest Kelley wakes up every morning with a groundhog and some Asian dude in a rabbit suit riding a phone booth, then he accidentally steps on his glasses as the bank vault locks shut.

Another issue is the saturation of store locations. Starbucks is notorious for cramming storefronts in every possibly corner, side shop, big box chain bookstore, and cardboard box under the bridge possible. Several malls have two or more locations, and those unaware of this fact sometimes feel disoriented, as if the streets they walk down have been looped like the background of some ‘60’s-era Hanna Barbera cartoon.

As such, Starbucks is changing their market strategy. They are going to close around 600 stores throughout the United States, and drastically roll back expansion plans, a curious decision since as far as I can tell the only places that aren’t already saturated with Starbucks stores are North Korea, Cuba, and Antarctica, and I’m not so sure about North Korea. I hear Kim Jong Il loves their Strawberry Frappachinos. So apparently their plans for a new store at the Olathe, Kansas Great Plains Mall has been scrapped for now.

So what can the company do to turn their business around? Well, here is my comprehensive plan to save Starbucks.

For one thing, they should stop pushing ridiculously obscure flavors as specials. I understand the desire to have people try new things, but as with all irritable middle-aged people like me, trying new things is an evil plot to completely destroy our lives for the balance of our existence, making us charred husks of our former selves. So when I walk into a Starbucks I want a mocha latte to be on sale, not a pomegranate iced tea with an asparagus flavor shot.

Secondly, I think Starbucks should give in and start encouraging all the silly things college kids today like to do. Mostly, I’m talking about trivia about arcane knowledge with the reward of ten cents off of a four dollar coffee. If possible, these trivia questions should be somehow relevant to any current classes being taken by the students, if for no other reason than to foster a false sense of exactly how productive their Master’s degree in Comparative Art History will be in the real world, and the crushing realization that $60,000 in debt will be paid off a dime at a time. That’s a lot of cups of coffee to sell.

Third, and most important—it’s small, medium, and large. Get over it.


The R Word

April 7, 2008

It’s time! It looks like we’re headed for the Big R.

No one really wants to think about a recession, since recessions are inherently disruptive forces in the economy—people lose jobs, the purchase of popular large-ticket items are postponed, and people have gut-wrenching decisions to make as to which group of immigrants to blame for it.

Of course, recessions aren’t wholly bad things, either. They tend to stabilize prices and force companies to become more efficient. Unfortunately, these two specific things are just those things that are currently spiraling out of control: inflation is creeping up, and the mortgage industry has, to put it diplomatically, screwed the ugliest underage pooch bareback at the church picnic.

While there are plenty of reasons for the recession—not the least of which is that we have a recession approximately every eight to ten years or so since the beginning of the republic so it’s hardly an unmitigated surprise—the crystallizing factor is the mortgage situation. Mortgage companies have been offering deals that no one in their right mind would take, unless the person taking the terms of the loan 1) didn’t bother to read the terms of the loan, and 2) assumed that if anything bad happened they could just close their eyes and wish really really hard that maybe the mortgage company would let them off the hook and not have to pay them for a few years. These are otherwise known as subprime loans, or ARMs, or “adjustable rate mortgages,” or “loans for people who spend five bucks a day buying nasty breakfast sandwiches at the gas station but still bitch when their electric bill goes up twenty bucks a month” or “I can’t possibly imagine anyone thinking these are a great deal loans nor can I believe these are anything except borderline legal,” or would be if the acronym fit. Of course, lending companies aren’t exactly blameless, either.

Mortgage Lender: And here’s the paperwork. Sign here.
New House Owner: Wow. There’s a lot of stuff to read here.
Mortgage Lender: Don’t worry. You only need to read the part that says “If I Don’t Take This Amazing Offer And Sign Here, I Will Be Clinically Declared A Complete Idiot.”
New House Owner: Uh…is there anything I need to know? The rates won’t change if there is a shift in the interest rates or anything, right?
Mortgage Lender: I will pay you one thousand dollars cold if you just sign that damn paper.
New House Owner: Deal.

As should be a surprise to absolutely no one, the interest rate hikes were triggered and people started to default on their mortgages. The reason for the hike can be debated—the weak dollar, the moral hazard brought about by government regulations, the Freemasons and UFOs working together for once—the important thing to remember is that it isn’t anybody’s fault except the oil companies.

Of course, anyone expecting the government to do anything about it is going to be sorely disappointed. Of course, government intervention in the economy is kind of what got us here in the first place, so anyone expect the government to do nothing about it is going to be sorely disappointed.

The President, for his part, is going to great lengths assuring the American public that we are not, and never will be, in a recession. However, just in case, he and Congress have approved an economic stimulus plan which consists of 1) rewarding both the people who took loans they couldn’t repay and the lenders who foolishly gave it to them, and 2) bribed—I mean, gave a tax rebate—to anyone who files a tax return this year. Just like after 9/11 when George W. Bush advised people that the best way to stop terrorism was to make a trip to the mall to buy slutty clothes and wacky wall walkers and Simon Cowell Talking Dolls, he’s encouraging people to not pay down credit cards but to buy other pieces of junk they don’t need. Where on earth Bush got the idea that spending immense amounts of money you don’t have is a fiscally sound idea I’ll never know.

Of course, those looking to the Democrats for a workable plan to stimulate the economy will be disheartened. Though, really, anyone paying attention for the past two hundred years shouldn’t expect anything radically different. The Democrat’s plan has been, essentially, to send everyone in the lower-middle-class or less a check for a bajillion dollars. They will offset this by instituting a windfall tax on the rich, with the “rich” defined as “anything greater than the wage of the highest-paid union contract that contributed to our campaign” and “windfall” being defined as “pretty much anything you make this year.”

Economists seem to be mixed as to how bad the recession will get. For every report about massive layoffs, there is another report with an uptick in consumer spending. And many of the normal indicators of a recession—people spending less on luxury items, tightening of food budgets, decreasing our placidyl intake—aren’t indicating in the normal way that they should be. Most people seem content to take the recession in stride, so long as it means they don’t have to buy more efficient cars, buy less gas, change their spending habits, look closer at their household budget, or actually do anything at all that could make any difference whatsoever. Besides that, most consumers will be fine.

Anyway, with politicians unable to come up with a workable plan, companies holding their cards close to their chest, and consumers reluctant to alter their lifestyle, the best option seems to be to just close their eyes and wish really really hard that everything will be fine. It’s worked so well before, I can’t possibly imagine why it won’t work now.


Chinese Fire Squad

July 16, 2007

In America, we throw around baseless and selective accusations against established, well-entrenched institutions and frequently are then awarded Academy Awards for Best Documentary Feature.

In Italy, they frequently elect street criminals to parliament and consider political corruption a check against an overreaching government, but still have the national pride to put all of the faith in the Catholic Church.

In China, they shoot Food and Drug administrators.

To each, as they say, their own.

China has awoken, and found itself capitalist. Okay, it’s not capitalist in the capital-C, Adam Smith-worshipping, unsolicited-fellation-from-the-Heritage-Foundation manner; let’s just say that the People’s Paradise seems to have a lot more clothing boutiques and upscale coffee shops than Mao cooked up in a five-year plan. Note that “capitalist” doesn’t also mean “democracy,” since the Chinese version of participatory government is that most citizens are permitted to grumble approvingly in lieu of actual votes.

Many in America are fearful of the Celestial Empire. Not because of the fact that they probably have nukes or that their army is approximately 5 billion people strong or that any day now they’re going to invade Formosa and trigger World War Five, it’s because they may be able to undercut us by pricing generic-brand detergent and chew bones below cost.

Me, personally, I am concerned about the Chinese military. I mean, the guys invented fireworks about eight hundred years ago and haven’t done much with it since. I strongly suspect they’ve invented something cool and/or insanely destructive, and are just waiting for Hong Kong to misplace a decimal point or Taiwan to forget to pick up the kinds on Sunday before they drop the big one, as it were, which I can only assume will explode in the air and appear above the sky as a red, white, and blue eagle before it rains hellfire down upon the battlefield. Their other invention, paper, I’m much less impressed with.

There’s been a recent scare of trade woes from China where the product quality is somewhat wanting:

·There was toothpaste that turned out to have traces of an antifreeze thickening agent, an additive not found to have a significant impact on dental care, though it does have the side effect of irreversible weight loss.
·Pet food was found to have contaminated wheat gluten in doses strong enough to pass through human gastronomical systems but not for Fido and Peachtree, a rather odd oversight considering that “crab” Rangoon I ate last week.
·Certain items in the Thomas the Symbol of Capitalist Repression Through Bourgeoisie Transportation Methods catalog was found to contain trace amounts of lead in the decorative paint. This is doubly unfortunate, since anyone who has ever watched a child under the age of four for more than two seconds knows that, if handed an item the size of Thomas the Tank Engine, the child will immediately determine whether this is something that can be placed and held inside of their mouth by immediately trying to swallow it.

Americans take a lot of crap from foreigners, whether it be diplomatic rebuffs, holier-than-thou self-satisfaction, or Jude Law. But mess with our teeth, pets, or child’s chance of getting into a good preschool without drooling all over the entrance exam, and it’s time to take the gloves off.

China is trying to improve its reputation for a number of reasons. Firstly, it’s an emerging power and despite its autocratic government and patchy progression levels, the Chinese know a bad PR move when they see one. Without selling plastic Naruto dolls and novelty cake decorations to distracted Yanquis trying to find something to spend their greenbacks on before they throw it into a big pile of burning garbage, so long as they don’t accidentally pay off more than the minimum mortgage payment, the Chinese economy would crumble like a deck of cards and they’d have to go back to trying to melt steel in their back yard. And by “back yard” I mean “Japan.”

Most importantly, though, the Olympics are set to begin in Beijing in 2008. Cracking open China to all of the reporters of the world is going to be a first. Certainly, the press in China has been freer than it has in the past—investigative reporters are only having their children threatened to be shot instead of actually being shot—for many this will be the first time reporters are allowed relatively free access to an area that engages in a foreign, baffling, and ultimately mysterious culture unseen since Salt Lake City.

All of these factors, alas, coincide rather unhappily with poor ex-FDA-or-whatever-they-call-it-in-China chief Zheng Xiaoyu. To fill the pharmaceutical company’s coffers, he repeatedly granted approval for several types of drugs that turned out to be fictitious. Although how that’s any different than marketing Xanax I’ll never know. He was lax in enforcing existing food regulations, and dozens of people from around the world became ill and in some cases died from subpar rice cakes, drinking water, and heart medication.

Some nations will publicly execute a traitor as an example to others. Some citizens will string up a tinpot dictator to send a message that liberty is worth fighting for. Some nations pin their hopes and dreams on fruitless brushfire wars and unmistakably immoral terror strikes. And some government choose to execute their bureaucrats to send a forceful message about misappropriating the regulation of diethylene glycol, so that all others who wish to disregard the growing menace of trace amounts of diethylene glycol in exported goods should learn.

To each, as they say, their own.


The Bottom Redline

April 4, 2007

Recently, comedian Eddie Griffin wrecked a Ferrari during a charity event. He didn’t wreck it in the politely-exchange-insurance, call-you-at-the-office manner; rather, it was in a full-fledged, grade A class 1 totaling beyond repair manner. He walked away without a scratch, thank goodness. This rather unfortunate even would perhaps only merit a vague mention in two months’ time in the Celebrity Poop inside jacket column in the Sunday supplement, except that this particular make of Ferrari was worth $1.5 million dollars. Perhaps I should have bolded that. $1.5 million dollars. Three things should be apparent at this point:

1) A rich person’s idea of charity is to race cars worth over a million dollars, despite the overwhelming evidence that the only point in racing cars is hoping that at some point someone is going to wreck.
2) The charity was in the form of a car race, since car races are a traditional form of fundraising, oh, and, by the way, Redline, a movie about rich men who race expensive cars for kicks and wagers, starring Eddie Griffin, comes out April 13th.
3) The car was being driven by someone whose sole experience in racing is limited to driving Undercover Brother to the cheap bin at the Wal Mart.

The entire episode is strangely ingratiating. The movie they were promoting was about bored rich billionaires who race their expensive cars around, and there was a wreck because…a bunch of bored billionaires were racing their cars around. It’s life imitating art, though in this case it’s more like staged Hollywood produced media event imitating a staged Hollywood produced media event. Though in real life, I’m assuming Nadia Bjorlin went home alone that night.

Charity or no, there is something fetchingly alarming about rich people pissing their money away. Now, I fancy myself a pretty hardcore off-the-chart free marketeer, one who equates the celestial paradise somewhere along the lines of a rather sadomasochistic Ayn Randian eBaying of commerce and government services. What people do with the money they earn is of no business of mine. But some days, surveying what rich people do with their money makes me want to rally the masses, grab a Spanish double-loaded rifle, and march the proletariat straight to Tiananmen Square, with me in the tank sitting on a crate full of little red books and bread vouchers.

Stories of the nouveau riche’s pecuniary excesses are hardly a new phenomenon. Tales of ancient Rome are rife with decadent Senators, libertines, and future members of Harvard School of Business. And the media absolutely loves to report on these stories because people love to listen to them, and think, “Yeah, I might not make the mortgage payment this month, and I may be doing a criminally negligent job saving for my daughter’s college education, but at least I didn’t spend eight thousand dollars on a Hungarian swan display for my nephew’s bar mitzvah.”

Recent displays of conspicuous consumption aren’t all that hard to find. Probably the most recent tale of excess was that of convicted Tyco CEO Dennis Kozlowki. He was convicted, in part, due to his wife’s week-long birthday party, cleverly disguised as a “shareholder meeting.” Among an embarrassingly long list of crimes, one of them was somehow hornswaggling the company into paying for half of what can charitably be called the single greatest depraved orgy even organized by mankind in the last ten centuries. The party itself was an almost picture perfect demonstration of decadence at its best, rife with hired oily gladiators, ice sculptures peeing vodka, cakes formed into the shape of a set of breasts (along with a festive set of strategically placed sparklers!), and a rather cavalier attitude towards the Greek jurisdictional interpretation of adultery. (I got a $20 gift certificate to the Eat ‘N’ Park on my birthday, by the way.)

There doesn’t seem to be a considerable difference in the behavior of businessmen versus celebrities in this particular regard. One might plausibly expect celebrities to acquire money, then find new and creative ways to blow it out their honeyhole. Businessmen, on the other hand, tend to at least pick up some of the financial lessons necessary to get rich in the first place, such as “buying pastries in the shape of barnyard animals may be a fun diversion, but if the markup is 60,000%, perhaps there is a better allocation of funds to be found.” But apparently not necessarily. For every Michael Jackson who buys giraffes like most people buy DVDs, there’s a package on the doorstep of Tyco International with a $6,000 shower curtain in it.

Sometimes, the amount of wealth wasted is subtler. Or, rather, they waste it with “good intentions,” which is code words for “they don’t know what the hell they’re doing.” Donald Trump routinely throws money away every few years in an established money trap known as “marriage.” And George Soros’s own extravagance should not go passed unnoticed, since he contributed around $23 million in the political equivalent of a fantasy sports league.

Griffin’s limited foray into expensive waste seems doubly distressing. His wealth is closer to the Andy Richter There-By-the-Grace-of-God-Go-I end of the scale as opposed to the Warren Buffet end. But one has to think about the super rich in this world. If someone of Griffin’s modest wealth is out wrecking million dollar cars…what exactly are they going to destroy?