Jacapo: It’s difficult for us in 2072 to imagine what it must have been like to live in a country where accountability didn’t exist.
Esteban: Oh yes. The United States was a country which invaded Iraq in 2003 simply because it thought it could remake the Middle East in its own image.
Jacopo: But that was a mere eighteen months after the world watched the tallest buildings in its largest city destroyed.
Esteban: Precisely. When the idea to invade Iraq occurred, 70% of the country supported it. For fifty years, Americans were told that they were the world’s dominant nation on a daily basis. After the plane attacks of 2001, or 9/11 as we used to call it, Americans desperately needed to hold onto the notion that we were invincible. That kind of hubris takes a lifetime to build up, and the ramifications of being showed that they weren’t took another lifetime to recover from.
Jacopo: But didn’t the United States already have the experience of Vietnam to show them that they were not invincible?
Esteban: Vietnam is one of the most contested episodes in American history, now as then. Some Americans, mostly conservatives, thought America lost because it was not committed enough and should have sent millions of troops into the country. Others, mostly liberals, thought America lost because it had no business there at all. It was ultimately the dividing issue that caused the fissure that led to the USA’s dissolution a half-century after the war ended.
Jacopo: How did my greycer Zaydie and Bubbie feel about it.
Esteban: Vietnam was a routinely debated issue in my family. My mother was very much what the turn of the century used to call a neo-conservative, so she always advocated the hardest possible line against Communism, Islamism, and crime. But my father got a PhD to avoid the draft. He was a moderate-to-liberal Democrat who marched with Civil Rights and against Vietnam.
Jacopo: Wasn’t he a Republican?
Esteban: He registered purely as a joke. We lived in an area where the Republican party hardly existed, so I suppose he did it purely to shock people. My mother, on the other hand, registered as a Democrat because no Republicans were ever elected to anything in our area. So she registered as a Democrat purely so she could vote for the most Conservative candidate.
Jacopo: Sounds like an interesting family to grow up in.
Esteban: You don’t know the half of it....In any event, let’s get back to the topic.
Jacopo: Indeed.
Esteban: Everyone accepted that boom and bust were inevitable, but over a period of 30 years, bank lobbyists persuaded government to lift regulations.
Jacopo: What kind of regulations?
Esteban: The kind that separated investment banks from commercial banks.
Jacopo: For those who don’t know, what does that mean?
Esteban: Many things. But there are two that are especially worth noting. The first is that the ultimate difference between a commercial bank and investment bank is that a commercial bank must have a certain level of money in reserve so that people’s deposits can be a safe investment.
Jacopo: But didn’t America of your youth not require commercial banks to have that reserve?
Esteban: Yes. In 1999, the Glass Steagall act was repealed.
Jacopo: What is the Glass Steagall act?
Esteban: The act that separated commercial banks from investment banks. And that brings us to the second point. When the Glass Steagall act passed in 1932, the major investment firms were banks in which deposits could be made, and the banks could invest the entirety of your money in any way they saw fit. So when the stock market tanked, the banks lost most of their money.
Jacopo: Which caused a run on banks.
Esteban: Exactly. If people wanted to ever see their money again, they had to withdraw their savings from banks immediately. So the Glass Steagal Act ensured an unprecedented level of economic stability in world history. By keeping a certain amount of money of reserve, commercial banks would be a safe investment: low reward but low risk. And with the high rewards of investment banking came high risk, a fact that banks now had to make people realize.
Jacopo: What made them repeal it?
Esteban: The usual: hubris, utopian thinking, libertarian economics...People had forgotten the simple rule that high reward leads to high risk.
Jacopo: What were the arguments against keeping Glass Steagal?
Esteban: The exact same arguments that Republicans from Reagan onward used for lowering taxes. The regulations were too confusing.
Jacopo: Were they confusing?
Esteban: Of course. Interpreting laws always is.
Jacopo: So what was the real reason?
Esteban: Well,...I hate to reduce it so terribly, but.....greed.
Jacopo: That was predictable.
Esteban: But they didn’t view it as greed. Again, the whole point of the libertarian philosophy was to provide a religion for businessmen which assures them that greed is a virtuous sentiment. And their high priest was a man named Alan Greenspan.
Jacopo: Who’s Alan Greenspan?
Esteban: The late-20th century just cried.
Jacopo: Seriously, who is he?
Esteban: He was the Chairman of the Federal Reserve for 20 years.
Jacopo: What’s the Federal Reserve?
Esteban: It was America’s national banking system, in charge of printing money to decide how many dollars will be in circulation at any given time.
Jacopo: How was he the high priest of libertarians?
Esteban: Well, firstly, he learned his personal brand of economics at the feet of Ayn Rand, the founder of libertarianism herself. But more importantly, his policy was generally that there was no such thing as accountability when it came to prosperity. As a libertarian, he technically did not even believe in the necessity of the Federal Reserve. But once he became the Federal Reserve Chair, his solution to every problem was to flood the United States with dollars.
Jacopo: Isn’t that a direct contradiction from his beliefs?
Esteban: Yes. But no moreso than neoconservatives of the time who believed that democracy should be put into practice everywhere, except in places where people would vote against America’s interests.
Jacopo: Libertarianism and Neoconservatism sound very much alike.
Esteban: They were very much alike. And at the turn of the century, they were virtually interchangeable philosophies on different playing fields. Libertarians believed in the absolute goodness of the free market against all evidence, neo-conservatives believed in the absolute goodness of democracy against all evidence.The result of Libertarianism was the second great depression that nearly became a superdepression. The end result of Neoconservatism was the backslide of Russia and Iraq into authoritarianism.
Jacopo: That reminds me, I wanted to ask you what would have happened if the Arab Spring occurred while George W. Bush was president rather than Obama?
Esteban: I have no idea except that World War III would have turned into the destruction of the world.
Jacopo: (laughs uncomfortably) If you’d allow me, I’d like to take things in a slightly different direction. My next question is, how close did the US come to a run on the banks like in the great depression?
Esteban: Countless times they were on the precipice. They were on the ledge after the 2008 housing crisis with Lehman Brothers. They were on the ledge again after the debt ceiling collapse in 2011. They were on the ledge in 2018 when President Bachman threatened military action against China because the Central Committee would not allow for the import of American products. In response, China and Russia placed economic sanctions on the United States and placed trade blockades around their coasts and said that the sanctions would not be lifted if America did not start paying its debts.
Jacopo: Didn’t Obama and Romney pay off the debt?
Esteban: Hardly. After five years, the end result of Obama’s emergency austerity measures was to resurrect the American economy, balance the budget, and pay off a couple trillion from the debt. But there still was well more than 10 trillion dollars outstanding and US citizens held more than 35 trillion dollars of private debt.
Jacopo: So during that period, America had to make its own products again?
Esteban: For about a month, yes it did. There were all sorts of pundits, particularly a journalist named Thomas Friedman, who said that the sanctions were a blessing in disguise that would reignite American industry. But what Friedman never factored in was that no company had the money to pay even a minimum wage to the amount of workers that required. It’s not like our era when we have Second Geneva Convention to mandate a minimum wage throughout the globe that’s generally well-upheld. It’s a shame those sanctions didn’t happen ten years earlier when Americans still had unlimited access to capital. It might have saved the country.
Jacopo: Also, let’s go back to Greenspan for a moment. When he flooded the market with dollars for twenty years, how did that not lead to stagflation?
Esteban: You have to view the Greenspan approach a bit like an arms-race. Every time there was a new liquidity crisis, Greenspan would raise the interest rate, thereby creating more money. When the crisis was over, people would stand to make that much more money because the rate would stay at its new level. Until there was another crisis, at which point Greenspan would raise the rate again to stimulate the economy. The stimulation worked, and there seemed to be no need to put it back to the old level because we were out of the economic crisis and the growth of money was simply the new reality.
Jacopo: So paradoxically, we’d put so much money into the economy as to be stagflation-proof. But since there was now too much money in the economy, everything becomes too easily bought even when the prices are ludicrously high. So it was only a matter of time...
Esteban: ….Before deflation sets in. Yes, deflation can be still more terrible than inflation. In inflation, the value of money goes down, so people want to spend because their money while it’s worth something. And by spending it, eventually the money is turned into foreign currency and the supply of dollars corrects itself. In deflation, the value of money goes up, so nobody wants to spend money because the price of goods will be less at a later date. Once that spiral starts, there is no known way of getting out of it.
Jacopo: Y’know...this discussion is becoming very dry.
Esteban: Indeed it is. The Ravens are playing the Steelers so I think I’m going to watch a bit of that.
Showing posts with label The Weekend America was Young. Show all posts
Showing posts with label The Weekend America was Young. Show all posts
Sunday, November 6, 2011
Sunday, September 18, 2011
800 Words: The Weekend America was Young - Too Big To Fail - Part I
Jacopo: How was it that the Double Dip Depression was not as large as every indication says that it should have been?
Esteban: Would that it could have been. It would have saved the United States and perhaps prevented the entirety of World War III. Two billion lives could have been spared and America might have emerged from it with a second century as a world superpower.
Jacopo: What made the Double Dip so short?
Esteban: Well, we should probably specify that it wasn’t all that short. By the standards of our era when the United Nations regulates the world's banks, it's a long recession. But by the standards of that time, August 2011 seemed like an instantaneous crash that looked to be far more pernicious than anything in the Great Depression. After the collapse of the debt ceiling in 2011, President Obama knew that America had to go into depression in order to avert a superdepression.
Jacopo: I’ve never heard of that term.
Esteban: It was invented by a famous economist of my youth named Paul Krugman. To put it very succinctly, a superdepression is when money becomes so inert that it no longer has a rational function in society. In a superdepression, credit and liquidity fall to such short supply that the entire world can no longer operate according to the basic rules of currency. Hyper-inflation becomes such that there is neither cash nor credit to pay for basic items. In such an environment, the basic items themselves become currency.
Jacopo: Well, what about more solid currencies like gold?
Esteban: In a world without purchasing power, gold is every bit as worthless as every other currency. You can neither eat, drink nor grow gold. What would matter in a super-depression is the material for life itself. Krugman used the example of the Warsaw Ghetto to explain how this would work. People who have access to raw materials like crops, wood, fabric would be considered the new wealthy class. Everyone else would have to pawn and ration what they had.
Jacopo: This sounds almost like a return to medieval economy from the very beginnings of capitalism.
Esteban: A return to the Middle Ages is exactly what it would have been.
Jacopo: What about luxury items? Why couldn’t computers, cars or furniture be used as capital?
Esteban: Luxury items would have had no more use in such an economy than they did in ours. The value of luxury is in buying it, not selling it. It’s not material that’s necessary for life. In any event, Krugman very much had the ear of the President. He was the dominant liberal intellectual of that era which we now call the American Endgame. Other economic intellectuals like Lawrence Summers and Ben Bernancke were in government, and they were very gifted officials who in retrospect kept the United States out of an almost certain superdepression. But after President Obama could not get Congress to pass his jobs bill in October 2011, advisors like Bernancke and Alan Krueger simply seemed too accommodating. So even though the establishmentarian Timothy Geithner remained Secretary of the Treasury throughout Obama’s first term, Paul Krugman became the unofficial economic policy czar for President Obama during his final year. There was not a single decision Obama made without Krugman’s consultaion. After the Republicans defeated Obama job plan, he realized that he barely had a prayer for re-election. And since he had done everything he could to balance the need for re-election with the necessity of change, he saw that change was the only option left and that he could do far more good for the country if he exploded any little chance he still had for re-election.
Jacopo: Was Krugman really that powerful?
Esteban: Oh yes. A more charitable Republican writer called him “The Shadow Secretary of the Treasury.” A less forgiving one called him “An American Rasputin.”
Jacopo: So it was Krugman who pushed Obama to pass the International Emergency Economic Powers Act we detailed last month?
Esteban: Absolutely it was. Krugman basically wrote it in his New York Times column.
Jacopo: How did he acquire the credibility for that?
Esteban: Krugman was the most controversial columnist of his time. But he was controversial because he was uncannily correct about so many things. But none moreso than the fact that he seemed to be the only person in America who predicted the housing crisis almost five years before it happened.
Jacopo: But didn’t the Scottish historian, Niall Ferguson, also predict it?
Esteban: Yes he did. Which is especially ironic considering that Ferguson was a dyed-in-the-wool conservative and a bitter enemy of Krugman with whom he disagreed on almost everything. But when the housing bubble burst, it was Krugman who was vindicated because while Ferguson had called the bubble, he had supported every policy that led to it.
Jacopo: How did the economy recover after that?
Esteban: The economy did not recover immediately. But the government accrued enough capital from Krugman’s plan that President Romney could inject the cash that was necessary to refloat the American economy. And since President Obama had taken such drastic - conservatives might say undemocratic - measures to save the American economy, Wall Street agreed to Romney’s insistence on iron regulations and constant cash injections. They were simply relieved that Obama was no longer president.
Jacopo: What is a cash injection?
Esteban: It’s when the Federal Government makes an offer to buy a percentage of a company which the company cannot refuse.
Jacopo: So it’s basically nationalization?
Esteban: Not quite. Nationalization would be to take over the whole company. But cash injections are the most direct form of government oversight, because the government then has a stake in the way which the bank is run.
Jacopo: But how would that be any different than government officials alternating between working in banks and in government?
Esteban: Well, you’re absolutely right to ask that question. It didn’t work because the practices continued exactly as they did before. When the government and private industry have the same interests, there is no chance for regulation. But you might remember that we talked about how when President Obama was elected to his second term in 2020, he immediately proposed legislation prohibiting any finance person who’d ever held so much as a consultancy with a bank or insurance company from holding a political appointment to an economic position.
Jacopo: To go back to Krugman for a bit, when did rational people first realize that Krugman couldn’t be ignored?
Esteban: When 70 different mortgage companies went bankrupt around Christmas 2007 and a bank called Bear Stearns was stuck with most of the bad mortgages.
Jacopo: And wasn’t the result of that a merger with JP Morgan Chase?
Esteban: Yes. The solution to the profligate spending of big banks was to simply make them bigger so that they could not fail. It was a very odd period of history. We should have known that we were a dead country walking.
Jacopo: How could you have?
Esteban: Because we knew exactly what was needed to solve all our problems. Yet the solutions were impossible to be enacted - on everything from banking reform to energy reform to even health reform.
Jacopo: But wasn’t health reform successful?
Esteban: Indeed it was, and it was easily the most feasible of the three projects to tackle. But when you’re in a country that has neither an economy nor the liquidity to create an economy, what reason is there to live longer?
Jacopo: You almost sound regretful about Obama having taken on healthcare.
Esteban: Not quite regretful. Though I certainly thought Obama had chosen the wrong project at the time. But when health care proved as difficult as it was, I realized that he chose healthcare over energy and banking because it was the only one that had a prayer in hell of being enacted.
Jacopo: Was financial reform truly impossible?
Esteban: Yes.
Jacopo: Can you explain why?
Esteban: There could be all sorts of economic explanations to give, but ultimately it came down to America’s culture of entitlement.
Jacopo: As in they were entitled to freedom of speech?
Esteban: No. America was wrong about many things, but on freedom of speech they were as close to absolutely right as any country has ever been about anything. I don’t care how many arguments are made about World Wars II and III being caused by incitements to hatred. There are moral choices which every individual must make, and for those unable to act morally, the courts must assess them.
Jacopo: There are a lot of people in my generation who would disagree.
Esteban: And they may yet lead us to World War IV.
Jacopo: So what was America’s culture of entitlement?
Esteban: In order to understand the America of this period, you had to understand both the nobility of what we called The American Dream, and also its fragility. It was so easily corrupted that it could be mistaken for something terrible.
Jacopo: Well if I’m not mistaken, the American Dream was the concept every person could work hard, become their own master, and be free from fear and want.
Esteban: Absolutely correct. But the meaning of that dream is very difficult to understand for many people. All too many Americans worked far too hard to never see it a reality, and all too many did not work hard enough.
Jacopo: Does that have something to do with regional differences?
Esteban: That’s surprisingly insightful for someone who’d never lived in America. Yes, it absolutely was. In the American midwest, around what we now call Chicagoland and what was in my time called the ‘rust belt,’ many Americans were worked long long hours in factories to guarantee their children better lives.
Jacopo: But when the factories left America...
Esteban: Precisely. What we used to call the ‘blue-collar’ workers had no guaranteed means of income and became the progenitors of a seemingly permanent underclass. Chicagoland is one of the largest of America’s descendants, it’s also one of the poorest.
Jacopo: It’s still less poor than Deep Southland.
Esteban: Indeed. If the rust belt worked too hard, the ‘Sun Belt’ didn’t work hard enough.
Jacopo: What’s the Sun Belt?
Esteban: It’s the area of American land where the climate was warm for almost all 12 months of the year, stretching from southern Virginia all the way over to southern California.
Jacopo: Wasn’t this also called the Bible Belt?
Esteban: Yes it was. It was, and in many cases still is, a land of fundamentalism. They believed in the absoluteness of The American Dream so fervently that free speech came have a whole collection of meanings.
Jacopo: Most particularly money.
Esteban: Right again. The Sun Belt’s industry was service. Corporations may have taken their manufacturing jobs overseas, but the factories were supervised from the American south. In the south, taxes were low as a matter of principle, and money was the God-given right of those who had enough money to have more.
Jacopo: How did they come to believe this?
Esteban: Two reasons. One was, of course, religion. Which was always extremely important to the life of the American south. Once a person has been indoctrinated with enough credulousness, they can be convinced to believe anything. And that leads us to the second reason. The people who were best able to exploit this credulousness were corporate boards. They could employ hundreds of thousands of people in middle management. And rather than grant true benefits to their workers which would have limited bottom line profits, they advised their workers to patronize banks that would allow them unlimited credit. And because they believed in the rightness of everything they were told, they believed that they would have an unlimited line of credit with no accountability.
Jacopo: And so these were the people who...
Esteban: ...Bought houses on credit, bought boats on credit, bought cars on credit. And because they believed that a line of credit could expand forever, they never felt the need to pay their bills.
Jacopo: It’s difficult to believe that people could be that stupid.
Esteban: It was the culture of the time. This was a culture that assigned moral righteousness to the accumulation of wealth. Americans did not think of their wealth as something greedy, they thought of it as something virtuous. And because everybody could make money, average people convinced themselves they were doing something virtuous by buying things they could never pay for. Enterprising businessmen convinced themselves they were doing something virtuous by selling mortgages people could never pay for. Banks convinced themselves they were doing something virtuous by granting loans people could never pay for.
Jacopo: Why did other countries not simply pull out of their American market when they saw how badly America was managing it?
Esteban: Well they did, at least China and Russia did, but not until the late 2010’s when President Bachmann tried to strong-arm China to accept American terms on trade.
Jacopo: But why not then? Didn’t Vladimir Putin call American finance a cancer on the world?
Esteban: It was a worry. It isn’t like today when China and India can spend on par with their savings. The China of the early 21st century was entirely dependent on American purchasing power. If China had withdrawn their money in American banks, the American economy would have sunk like stone and China would’ve had no one to make products for.
Jacopo: You look tired.
Esteban: I certainly am. I think it’s extremely important that we get to the collapse of the American banking industry in 2024. But I think that will be something for tomorrow.
Jacopo: Sounds good.
Esteban: Would that it could have been. It would have saved the United States and perhaps prevented the entirety of World War III. Two billion lives could have been spared and America might have emerged from it with a second century as a world superpower.
Jacopo: What made the Double Dip so short?
Esteban: Well, we should probably specify that it wasn’t all that short. By the standards of our era when the United Nations regulates the world's banks, it's a long recession. But by the standards of that time, August 2011 seemed like an instantaneous crash that looked to be far more pernicious than anything in the Great Depression. After the collapse of the debt ceiling in 2011, President Obama knew that America had to go into depression in order to avert a superdepression.
Jacopo: I’ve never heard of that term.
Esteban: It was invented by a famous economist of my youth named Paul Krugman. To put it very succinctly, a superdepression is when money becomes so inert that it no longer has a rational function in society. In a superdepression, credit and liquidity fall to such short supply that the entire world can no longer operate according to the basic rules of currency. Hyper-inflation becomes such that there is neither cash nor credit to pay for basic items. In such an environment, the basic items themselves become currency.
Jacopo: Well, what about more solid currencies like gold?
Esteban: In a world without purchasing power, gold is every bit as worthless as every other currency. You can neither eat, drink nor grow gold. What would matter in a super-depression is the material for life itself. Krugman used the example of the Warsaw Ghetto to explain how this would work. People who have access to raw materials like crops, wood, fabric would be considered the new wealthy class. Everyone else would have to pawn and ration what they had.
Jacopo: This sounds almost like a return to medieval economy from the very beginnings of capitalism.
Esteban: A return to the Middle Ages is exactly what it would have been.
Jacopo: What about luxury items? Why couldn’t computers, cars or furniture be used as capital?
Esteban: Luxury items would have had no more use in such an economy than they did in ours. The value of luxury is in buying it, not selling it. It’s not material that’s necessary for life. In any event, Krugman very much had the ear of the President. He was the dominant liberal intellectual of that era which we now call the American Endgame. Other economic intellectuals like Lawrence Summers and Ben Bernancke were in government, and they were very gifted officials who in retrospect kept the United States out of an almost certain superdepression. But after President Obama could not get Congress to pass his jobs bill in October 2011, advisors like Bernancke and Alan Krueger simply seemed too accommodating. So even though the establishmentarian Timothy Geithner remained Secretary of the Treasury throughout Obama’s first term, Paul Krugman became the unofficial economic policy czar for President Obama during his final year. There was not a single decision Obama made without Krugman’s consultaion. After the Republicans defeated Obama job plan, he realized that he barely had a prayer for re-election. And since he had done everything he could to balance the need for re-election with the necessity of change, he saw that change was the only option left and that he could do far more good for the country if he exploded any little chance he still had for re-election.
Jacopo: Was Krugman really that powerful?
Esteban: Oh yes. A more charitable Republican writer called him “The Shadow Secretary of the Treasury.” A less forgiving one called him “An American Rasputin.”
Jacopo: So it was Krugman who pushed Obama to pass the International Emergency Economic Powers Act we detailed last month?
Esteban: Absolutely it was. Krugman basically wrote it in his New York Times column.
Jacopo: How did he acquire the credibility for that?
Esteban: Krugman was the most controversial columnist of his time. But he was controversial because he was uncannily correct about so many things. But none moreso than the fact that he seemed to be the only person in America who predicted the housing crisis almost five years before it happened.
Jacopo: But didn’t the Scottish historian, Niall Ferguson, also predict it?
Esteban: Yes he did. Which is especially ironic considering that Ferguson was a dyed-in-the-wool conservative and a bitter enemy of Krugman with whom he disagreed on almost everything. But when the housing bubble burst, it was Krugman who was vindicated because while Ferguson had called the bubble, he had supported every policy that led to it.
Jacopo: How did the economy recover after that?
Esteban: The economy did not recover immediately. But the government accrued enough capital from Krugman’s plan that President Romney could inject the cash that was necessary to refloat the American economy. And since President Obama had taken such drastic - conservatives might say undemocratic - measures to save the American economy, Wall Street agreed to Romney’s insistence on iron regulations and constant cash injections. They were simply relieved that Obama was no longer president.
Jacopo: What is a cash injection?
Esteban: It’s when the Federal Government makes an offer to buy a percentage of a company which the company cannot refuse.
Jacopo: So it’s basically nationalization?
Esteban: Not quite. Nationalization would be to take over the whole company. But cash injections are the most direct form of government oversight, because the government then has a stake in the way which the bank is run.
Jacopo: But how would that be any different than government officials alternating between working in banks and in government?
Esteban: Well, you’re absolutely right to ask that question. It didn’t work because the practices continued exactly as they did before. When the government and private industry have the same interests, there is no chance for regulation. But you might remember that we talked about how when President Obama was elected to his second term in 2020, he immediately proposed legislation prohibiting any finance person who’d ever held so much as a consultancy with a bank or insurance company from holding a political appointment to an economic position.
Jacopo: To go back to Krugman for a bit, when did rational people first realize that Krugman couldn’t be ignored?
Esteban: When 70 different mortgage companies went bankrupt around Christmas 2007 and a bank called Bear Stearns was stuck with most of the bad mortgages.
Jacopo: And wasn’t the result of that a merger with JP Morgan Chase?
Esteban: Yes. The solution to the profligate spending of big banks was to simply make them bigger so that they could not fail. It was a very odd period of history. We should have known that we were a dead country walking.
Jacopo: How could you have?
Esteban: Because we knew exactly what was needed to solve all our problems. Yet the solutions were impossible to be enacted - on everything from banking reform to energy reform to even health reform.
Jacopo: But wasn’t health reform successful?
Esteban: Indeed it was, and it was easily the most feasible of the three projects to tackle. But when you’re in a country that has neither an economy nor the liquidity to create an economy, what reason is there to live longer?
Jacopo: You almost sound regretful about Obama having taken on healthcare.
Esteban: Not quite regretful. Though I certainly thought Obama had chosen the wrong project at the time. But when health care proved as difficult as it was, I realized that he chose healthcare over energy and banking because it was the only one that had a prayer in hell of being enacted.
Jacopo: Was financial reform truly impossible?
Esteban: Yes.
Jacopo: Can you explain why?
Esteban: There could be all sorts of economic explanations to give, but ultimately it came down to America’s culture of entitlement.
Jacopo: As in they were entitled to freedom of speech?
Esteban: No. America was wrong about many things, but on freedom of speech they were as close to absolutely right as any country has ever been about anything. I don’t care how many arguments are made about World Wars II and III being caused by incitements to hatred. There are moral choices which every individual must make, and for those unable to act morally, the courts must assess them.
Jacopo: There are a lot of people in my generation who would disagree.
Esteban: And they may yet lead us to World War IV.
Jacopo: So what was America’s culture of entitlement?
Esteban: In order to understand the America of this period, you had to understand both the nobility of what we called The American Dream, and also its fragility. It was so easily corrupted that it could be mistaken for something terrible.
Jacopo: Well if I’m not mistaken, the American Dream was the concept every person could work hard, become their own master, and be free from fear and want.
Esteban: Absolutely correct. But the meaning of that dream is very difficult to understand for many people. All too many Americans worked far too hard to never see it a reality, and all too many did not work hard enough.
Jacopo: Does that have something to do with regional differences?
Esteban: That’s surprisingly insightful for someone who’d never lived in America. Yes, it absolutely was. In the American midwest, around what we now call Chicagoland and what was in my time called the ‘rust belt,’ many Americans were worked long long hours in factories to guarantee their children better lives.
Jacopo: But when the factories left America...
Esteban: Precisely. What we used to call the ‘blue-collar’ workers had no guaranteed means of income and became the progenitors of a seemingly permanent underclass. Chicagoland is one of the largest of America’s descendants, it’s also one of the poorest.
Jacopo: It’s still less poor than Deep Southland.
Esteban: Indeed. If the rust belt worked too hard, the ‘Sun Belt’ didn’t work hard enough.
Jacopo: What’s the Sun Belt?
Esteban: It’s the area of American land where the climate was warm for almost all 12 months of the year, stretching from southern Virginia all the way over to southern California.
Jacopo: Wasn’t this also called the Bible Belt?
Esteban: Yes it was. It was, and in many cases still is, a land of fundamentalism. They believed in the absoluteness of The American Dream so fervently that free speech came have a whole collection of meanings.
Jacopo: Most particularly money.
Esteban: Right again. The Sun Belt’s industry was service. Corporations may have taken their manufacturing jobs overseas, but the factories were supervised from the American south. In the south, taxes were low as a matter of principle, and money was the God-given right of those who had enough money to have more.
Jacopo: How did they come to believe this?
Esteban: Two reasons. One was, of course, religion. Which was always extremely important to the life of the American south. Once a person has been indoctrinated with enough credulousness, they can be convinced to believe anything. And that leads us to the second reason. The people who were best able to exploit this credulousness were corporate boards. They could employ hundreds of thousands of people in middle management. And rather than grant true benefits to their workers which would have limited bottom line profits, they advised their workers to patronize banks that would allow them unlimited credit. And because they believed in the rightness of everything they were told, they believed that they would have an unlimited line of credit with no accountability.
Jacopo: And so these were the people who...
Esteban: ...Bought houses on credit, bought boats on credit, bought cars on credit. And because they believed that a line of credit could expand forever, they never felt the need to pay their bills.
Jacopo: It’s difficult to believe that people could be that stupid.
Esteban: It was the culture of the time. This was a culture that assigned moral righteousness to the accumulation of wealth. Americans did not think of their wealth as something greedy, they thought of it as something virtuous. And because everybody could make money, average people convinced themselves they were doing something virtuous by buying things they could never pay for. Enterprising businessmen convinced themselves they were doing something virtuous by selling mortgages people could never pay for. Banks convinced themselves they were doing something virtuous by granting loans people could never pay for.
Jacopo: Why did other countries not simply pull out of their American market when they saw how badly America was managing it?
Esteban: Well they did, at least China and Russia did, but not until the late 2010’s when President Bachmann tried to strong-arm China to accept American terms on trade.
Jacopo: But why not then? Didn’t Vladimir Putin call American finance a cancer on the world?
Esteban: It was a worry. It isn’t like today when China and India can spend on par with their savings. The China of the early 21st century was entirely dependent on American purchasing power. If China had withdrawn their money in American banks, the American economy would have sunk like stone and China would’ve had no one to make products for.
Jacopo: You look tired.
Esteban: I certainly am. I think it’s extremely important that we get to the collapse of the American banking industry in 2024. But I think that will be something for tomorrow.
Jacopo: Sounds good.
Wednesday, August 17, 2011
800 Words: The Weekend America was Young: The Year Esteban Was a Rock Star 1
Jacopo: So we haven’t done one of these in a while.
Esteban: Indeed. It’s been about a fortnight now.
Jacopo: I was willing to do it the whole time.
Esteban: I just wasn’t feeling up to it.
Jacopo: Why not? You were certainly up to visiting your old landsmann in Washingtonia.
Esteban: Isn’t that enough of a reason?
Jacopo: Not in 2072 when you can beam between places.
Esteban: You can’t beam anywhere. You like that Star Trek revival show too much.
Jacopo: I know that. But haven’t you ever used Skype?
Esteban: I hated Skype when I was your age. I still hate it.
Jacopo: What’s wrong with Skype.
Esteban: If you think facebook chat was bad, try having to communicate by voice with people you never want to talk to again.
Jacopo: Can’t you just ignore them?
Esteban: Why even ignore them when I can just avoid them?
Jacopo: You’re crotchety.
Esteban: That’s hereditary.
Jacopo: Touche.
Esteban: Anyhow, so today I’d like to talk about the year I was a famous rock star.
Jacopo: You weren’t that famous Zaydie.
Esteban: You weren’t there. How do you know?
Jacopo: Bubbie says you weren’t.
Esteban: She’s just pissed we got married.
Jacopo: Bubbie always said that she married you because you looked like you were going to be more famous than you really were.
Esteban: We got married because your Bubbie was pregnant with your Papi.
Jacopo: Ah yes. la Inmaculada Concepción
Esteban: Precisely.
Jacopo: So were you decadent like a rock star?
Esteban: If I had the social skills to know how to party I certainly would have been.
Jacopo: Fortunately for Bubbie, you didn’t?
Esteban: I’m sure she’d have rather I had. It would have been a great excuse for divorce.
Jacopo: Is marriage really that hard?
Esteban: When we were first married I thought your Bubbie was going to kill me.
Jacopo: I’m glad she didn’t.
Esteban: She’s not. She’d be free now.
Jacopo: Does she know this?
Esteban: She’s thought it every day. It’s been fifty-seven years. Probably eighteen good ones. I’d say that makes us better than 90% of married couples.
Jacopo: Is that what I have to look forward to?
Esteban: You can always die younger. Frankly I’m amazed I didn’t.
Jacopo: So you were a rock star.
Esteban: I still am. Apparently all you have to cut is an album-and-a-half and music students travel halfway across the world to convince you to perform more.
Jacopo: Why didn’t you?
Esteban: Oh you know perfectly well how much stress performing is.
Jacopo: I do. Just signing autographs can be a horrible experience.
Esteban: Don’t say I didn’t warn you.
Jacopo: Well, I can’t quit now.
Esteban: You were the one with dreams of being the world’s biggest tango-triphop fusion artist. I tried to discourage you.
Jacopo: I should have been a realtor.
Esteban: Probably. I got out of it before I got too big. I didn’t mean to but it turned out to be the best thing I ever did. I didn’t need the money and I was much happier writing songs for other people to perform.
Jacopo: So what then stopped you from becoming an American rock star?
Esteban: The fact that I was convinced there would soon be no America in which there could be rock stars.
Jacopo: And you were right.
Esteban: I was. The problem was that I got out twelve years too early. I probably could have done another ten albums by then.
Jacopo: You’re one of the world’s great songwriters. “A Time to Defecate” is a song that will live forever.
Esteban: That was a good song. But I still have a terrible regret about not continuing my performing career.
Jacopo: I thought you hated everything about performing.
Esteban: I did. But I was so scared for the life of my son that I missed the Golden Age of American Culture. Your Bubbie never forgave me for that, and half the time I don’t forgive myself either.
Jacopo: But you still accumulated quite a respectable oeuvre, and you only were a part-time musician.
Esteban: It was nothing compared to what I might have done if I had moved to Brooklyn or Hollywood. I might have become nothing. But I’d like to think I might have also fallen in with the All Music movement or the AV Order.
Jacopo: But you were completely settled in Baltimore by the time you turned thirty. When could you possibly have moved there?
Esteban: When I was twenty-five.
Jacopo: But then you’d have never written Voices of Washingtonia. It’s a classic of third-stream new wave alternative classical. Hell, they named the whole friggin’ country after your album!
Esteban: Well I suppose you’re right about that. To this day, that album is the one act of my life for which I never had a moment of regret. But I still feel like it’s a small part of what I could have done.
Jacopo: Greycer Bubbie always said that you were born in the wrong century. You should have been born a hundred years earlier so you could have been another Mahler.
Esteban: I could have never been anything close to another Mahler. Though I could have been another Ernst Toch or Egon Wellesz.
Jacopo: Who’re Erns....
Esteban: Exactly.
Jacopo: Oh.
Esteban: You have to understand, even in America I wrote in isolation. I neither came from a particularly cultural place nor was I a good student. When I came to Brazil and Argentina it was still worse because I didn’t speak the language. But no matter where I went, virtually all my friends were all professionals. So I wrote my stuff part-time in comparative isolation from most of the other musical currents that were developing. So instead of being the American version of a Mieczeslaw Weinberg or a Leo Weiner I had to settle for being a mere Berthold Goldschmidt.
Jacopo: Ouch.
Esteban: Well at least I wasn’t a Pavel Haas or Viktor Ullmann.
Jacopo: I think this joke is already getting old.
Esteban: No doubt. Though all these musicians were fine enough composers.
Jacopo: Is there a reason that you’re choosing composers that were all of the post-Mahler generation?
Esteban: Absolutely. Though Weinberg was Soviet and post-Shostakovich. But we were at the exact same point in American cultural history which Austria-Hungary was a century earlier. We were a dysfunctional, decaying imperial power living on borrowed time and charged with a dominance which was impossible to sustain.
Jacopo: But it was also the United States’s cultural Golden Age.
Esteban: America had at least four cultural Golden Ages, maybe seven or eight. But yes, that was the last of them.
Jacopo: But everyone refers to the End-Of-The-American Century as the “Great Flowering.”
Esteban: That’s because it’s the era which did the most to shape the world as we currently know it. That phrase comes from Simon Schama. He actually called it the ‘Great and Final Flowering.’
Jacopo: He must have been at least ninety when he wrote that.
Esteban: “Cultural History of the American Experiment” came out in 2040. I remember the year it was released because I had your Uncle Koosh ship me an English copy from New England. Schama must have been at least ninety-five at the time it was published, but a historian is one of the few professions in which you get better as you age.
Jacopo: It was obviously a landmark book.
Esteban: Indeed. It was probably the book which helped the world lay America to rest. Until 2040, there was all sorts of talk about reunification - still more wars threatening to break out in what was once America to preserve the union. I don’t think it’s exaggeration to say that it was that book which helped the world realize that America was over and that it had the greatest run of any country in history.
Jacopo: Well, let’s talk about that run. What would you define as the America’s Cultural Golden Ages?
Esteban: Well, it’s difficult to pin them all down, but all throughout American history we see cycles in which culture flowers only to be beaten down by the forces of reaction. I suppose that is true of every great civilization. But America was unique in how repetitive that process was. There was never a time in American history when the culture was as miraculous as the fin-de-siecle culture in Paris or Vienna or Berlin, though I suppose the Great Flowering came quite close. Instead, America had two-and-a-half centuries of reasonably steady achievement in all the arts, and the sum of achievements in all those mini-Golden Ages surpassed any cultural work in any other country at any point in history. Achievement in one artform or place would weaken only for great achievements to spring up in another artform somewhere else. And because there was two-hundred-fifty years of reasonably steady creation, the destruction had to be that much more lethal to destroy what was built.
Jacopo: Well, what were the most significant of those mini-Golden Ages.
Esteban: Ah. Well that’s an easier question. Though it will still take a while to explain.
Jacopo: We have time.
Esteban: Well...Schama would say that there are no less than eight which are particularly important. But he would also say that you have to consider American History as a game two halves, like soccer.
Jacopo: Football.
Esteban: Whatever. The first half of American History is the story of a Young Titan. America was a relative cultural backwater isolated from the great European civilizations and whose growth was completely unimpeded by competing powers. During this period, America grew a completely independent culture from Europe in almost complete isolation. The second half is America is the Old Giant which dominates the world and grows lazy from being so accustomed to power. America was no longer the backwater, it was the cultural Emperor. And, according to Schama, within each of these halves there are four seasons. There’s spring, when America is in love with the possibilities of its future. There is summer, when America enjoys the fruits of its growth. There is fall, when America reaps the punishment of its growth. And there is winter, when America must mourn what it once was.
Jacopo: Is there any chance at all that America is in a third period?
Esteban: I doubt it. The ultimate reason that Obama should be viewed as the great leader of the 21st century was that he created the conditions that allowed America to be dismantled rather than allow it to become a modern Roman Empire. Even in the midst of financial collapse, it would have been all too easy for America to turn itself into a military dictatorship that ruled the entire world by force. The Third World War cost two billion lives. But it ended with a relatively peaceful era in which lots of liberal democracies could flourish. An American Emperor might have killed at least as many worldwide in as little time and ruled the entire world in a totalitarian empire that could only run itself by spilling more blood every year.
Jacopo: There’s still talk of unification between some of the countries.
Esteban: For all I know, what was once the United States could reunite into two countries in another fifty years. But whatever what was once the United States of America becomes, it would be entirely different from what it once was. Texas, Nuevo Mexico and Deep Southland are semi-democracies with whites who still disenfranchise whatever of the hispanic and black population that hasn’t moved either north or south. All the other countries belong to NALA - the North American Liberal Alliance, which exists to isolate the Southern Countries.
Jacopo: So if American History has only two basic periods, what happens in them?
Esteban: Well, Schama’s history ran two volumes and each was divided into four parts. In each part, he took a representative figure of the era and built the history around them. If I remember correctly, the eight representative figures were Thomas Jefferson, Walt Whitman, Mark Twain, T.S. Eliot, Louis Armstrong, Orson Welles, Bob Dylan and Matt Groening.
Jacopo: What made them representative?
Esteban: Each of them represented a particular period in American History and what they meant to America’s development.
Jacopo: But weren’t Eliot, Armstrong and Welles all roughly contemporaries?
Esteban: Yes, but no society changed as quickly as America during that period. In fact, if you wanted to make a case for a true cultural Golden Age, I would still argue for the period between the two world wars.
Jacopo: Why?
Esteban: It was the Golden Age of Movies and Jazz. And even if they weren’t Golden Ages America still produced wonderful literature, poetry and popular music during those periods.
Jacopo: Also, why were the first figures all writers?
Esteban: It was an odd thing about Early America. It had a fantastic literary culture, which I suppose they inherited as a vestige of being a British colony. But there were few great painters and fewer composers. In fact, almost all of the great music of Early America was written anonymously for use in the Church or the Tavern.
Jacopo: But why these four in particular?
Esteban: Because they represented the four most basic strands of writers: Jefferson the philosopher, Whitman the poet, Twain the novelist and Eliot the critic.
Jacopo: But wasn’t Eliot primarily a poet?
Esteban: Indeed he was, but Eliot’s poetry would have been impossible without the encyclopedic knowledge that only a critic can accumulate. In any event, we have a long drive ahead of us. Why don’t we stop at least until we get to the beach.
Jacopo: Sounds good.
Esteban: Indeed. It’s been about a fortnight now.
Jacopo: I was willing to do it the whole time.
Esteban: I just wasn’t feeling up to it.
Jacopo: Why not? You were certainly up to visiting your old landsmann in Washingtonia.
Esteban: Isn’t that enough of a reason?
Jacopo: Not in 2072 when you can beam between places.
Esteban: You can’t beam anywhere. You like that Star Trek revival show too much.
Jacopo: I know that. But haven’t you ever used Skype?
Esteban: I hated Skype when I was your age. I still hate it.
Jacopo: What’s wrong with Skype.
Esteban: If you think facebook chat was bad, try having to communicate by voice with people you never want to talk to again.
Jacopo: Can’t you just ignore them?
Esteban: Why even ignore them when I can just avoid them?
Jacopo: You’re crotchety.
Esteban: That’s hereditary.
Jacopo: Touche.
Esteban: Anyhow, so today I’d like to talk about the year I was a famous rock star.
Jacopo: You weren’t that famous Zaydie.
Esteban: You weren’t there. How do you know?
Jacopo: Bubbie says you weren’t.
Esteban: She’s just pissed we got married.
Jacopo: Bubbie always said that she married you because you looked like you were going to be more famous than you really were.
Esteban: We got married because your Bubbie was pregnant with your Papi.
Jacopo: Ah yes. la Inmaculada Concepción
Esteban: Precisely.
Jacopo: So were you decadent like a rock star?
Esteban: If I had the social skills to know how to party I certainly would have been.
Jacopo: Fortunately for Bubbie, you didn’t?
Esteban: I’m sure she’d have rather I had. It would have been a great excuse for divorce.
Jacopo: Is marriage really that hard?
Esteban: When we were first married I thought your Bubbie was going to kill me.
Jacopo: I’m glad she didn’t.
Esteban: She’s not. She’d be free now.
Jacopo: Does she know this?
Esteban: She’s thought it every day. It’s been fifty-seven years. Probably eighteen good ones. I’d say that makes us better than 90% of married couples.
Jacopo: Is that what I have to look forward to?
Esteban: You can always die younger. Frankly I’m amazed I didn’t.
Jacopo: So you were a rock star.
Esteban: I still am. Apparently all you have to cut is an album-and-a-half and music students travel halfway across the world to convince you to perform more.
Jacopo: Why didn’t you?
Esteban: Oh you know perfectly well how much stress performing is.
Jacopo: I do. Just signing autographs can be a horrible experience.
Esteban: Don’t say I didn’t warn you.
Jacopo: Well, I can’t quit now.
Esteban: You were the one with dreams of being the world’s biggest tango-triphop fusion artist. I tried to discourage you.
Jacopo: I should have been a realtor.
Esteban: Probably. I got out of it before I got too big. I didn’t mean to but it turned out to be the best thing I ever did. I didn’t need the money and I was much happier writing songs for other people to perform.
Jacopo: So what then stopped you from becoming an American rock star?
Esteban: The fact that I was convinced there would soon be no America in which there could be rock stars.
Jacopo: And you were right.
Esteban: I was. The problem was that I got out twelve years too early. I probably could have done another ten albums by then.
Jacopo: You’re one of the world’s great songwriters. “A Time to Defecate” is a song that will live forever.
Esteban: That was a good song. But I still have a terrible regret about not continuing my performing career.
Jacopo: I thought you hated everything about performing.
Esteban: I did. But I was so scared for the life of my son that I missed the Golden Age of American Culture. Your Bubbie never forgave me for that, and half the time I don’t forgive myself either.
Jacopo: But you still accumulated quite a respectable oeuvre, and you only were a part-time musician.
Esteban: It was nothing compared to what I might have done if I had moved to Brooklyn or Hollywood. I might have become nothing. But I’d like to think I might have also fallen in with the All Music movement or the AV Order.
Jacopo: But you were completely settled in Baltimore by the time you turned thirty. When could you possibly have moved there?
Esteban: When I was twenty-five.
Jacopo: But then you’d have never written Voices of Washingtonia. It’s a classic of third-stream new wave alternative classical. Hell, they named the whole friggin’ country after your album!
Esteban: Well I suppose you’re right about that. To this day, that album is the one act of my life for which I never had a moment of regret. But I still feel like it’s a small part of what I could have done.
Jacopo: Greycer Bubbie always said that you were born in the wrong century. You should have been born a hundred years earlier so you could have been another Mahler.
Esteban: I could have never been anything close to another Mahler. Though I could have been another Ernst Toch or Egon Wellesz.
Jacopo: Who’re Erns....
Esteban: Exactly.
Jacopo: Oh.
Esteban: You have to understand, even in America I wrote in isolation. I neither came from a particularly cultural place nor was I a good student. When I came to Brazil and Argentina it was still worse because I didn’t speak the language. But no matter where I went, virtually all my friends were all professionals. So I wrote my stuff part-time in comparative isolation from most of the other musical currents that were developing. So instead of being the American version of a Mieczeslaw Weinberg or a Leo Weiner I had to settle for being a mere Berthold Goldschmidt.
Jacopo: Ouch.
Esteban: Well at least I wasn’t a Pavel Haas or Viktor Ullmann.
Jacopo: I think this joke is already getting old.
Esteban: No doubt. Though all these musicians were fine enough composers.
Jacopo: Is there a reason that you’re choosing composers that were all of the post-Mahler generation?
Esteban: Absolutely. Though Weinberg was Soviet and post-Shostakovich. But we were at the exact same point in American cultural history which Austria-Hungary was a century earlier. We were a dysfunctional, decaying imperial power living on borrowed time and charged with a dominance which was impossible to sustain.
Jacopo: But it was also the United States’s cultural Golden Age.
Esteban: America had at least four cultural Golden Ages, maybe seven or eight. But yes, that was the last of them.
Jacopo: But everyone refers to the End-Of-The-American Century as the “Great Flowering.”
Esteban: That’s because it’s the era which did the most to shape the world as we currently know it. That phrase comes from Simon Schama. He actually called it the ‘Great and Final Flowering.’
Jacopo: He must have been at least ninety when he wrote that.
Esteban: “Cultural History of the American Experiment” came out in 2040. I remember the year it was released because I had your Uncle Koosh ship me an English copy from New England. Schama must have been at least ninety-five at the time it was published, but a historian is one of the few professions in which you get better as you age.
Jacopo: It was obviously a landmark book.
Esteban: Indeed. It was probably the book which helped the world lay America to rest. Until 2040, there was all sorts of talk about reunification - still more wars threatening to break out in what was once America to preserve the union. I don’t think it’s exaggeration to say that it was that book which helped the world realize that America was over and that it had the greatest run of any country in history.
Jacopo: Well, let’s talk about that run. What would you define as the America’s Cultural Golden Ages?
Esteban: Well, it’s difficult to pin them all down, but all throughout American history we see cycles in which culture flowers only to be beaten down by the forces of reaction. I suppose that is true of every great civilization. But America was unique in how repetitive that process was. There was never a time in American history when the culture was as miraculous as the fin-de-siecle culture in Paris or Vienna or Berlin, though I suppose the Great Flowering came quite close. Instead, America had two-and-a-half centuries of reasonably steady achievement in all the arts, and the sum of achievements in all those mini-Golden Ages surpassed any cultural work in any other country at any point in history. Achievement in one artform or place would weaken only for great achievements to spring up in another artform somewhere else. And because there was two-hundred-fifty years of reasonably steady creation, the destruction had to be that much more lethal to destroy what was built.
Jacopo: Well, what were the most significant of those mini-Golden Ages.
Esteban: Ah. Well that’s an easier question. Though it will still take a while to explain.
Jacopo: We have time.
Esteban: Well...Schama would say that there are no less than eight which are particularly important. But he would also say that you have to consider American History as a game two halves, like soccer.
Jacopo: Football.
Esteban: Whatever. The first half of American History is the story of a Young Titan. America was a relative cultural backwater isolated from the great European civilizations and whose growth was completely unimpeded by competing powers. During this period, America grew a completely independent culture from Europe in almost complete isolation. The second half is America is the Old Giant which dominates the world and grows lazy from being so accustomed to power. America was no longer the backwater, it was the cultural Emperor. And, according to Schama, within each of these halves there are four seasons. There’s spring, when America is in love with the possibilities of its future. There is summer, when America enjoys the fruits of its growth. There is fall, when America reaps the punishment of its growth. And there is winter, when America must mourn what it once was.
Jacopo: Is there any chance at all that America is in a third period?
Esteban: I doubt it. The ultimate reason that Obama should be viewed as the great leader of the 21st century was that he created the conditions that allowed America to be dismantled rather than allow it to become a modern Roman Empire. Even in the midst of financial collapse, it would have been all too easy for America to turn itself into a military dictatorship that ruled the entire world by force. The Third World War cost two billion lives. But it ended with a relatively peaceful era in which lots of liberal democracies could flourish. An American Emperor might have killed at least as many worldwide in as little time and ruled the entire world in a totalitarian empire that could only run itself by spilling more blood every year.
Jacopo: There’s still talk of unification between some of the countries.
Esteban: For all I know, what was once the United States could reunite into two countries in another fifty years. But whatever what was once the United States of America becomes, it would be entirely different from what it once was. Texas, Nuevo Mexico and Deep Southland are semi-democracies with whites who still disenfranchise whatever of the hispanic and black population that hasn’t moved either north or south. All the other countries belong to NALA - the North American Liberal Alliance, which exists to isolate the Southern Countries.
Jacopo: So if American History has only two basic periods, what happens in them?
Esteban: Well, Schama’s history ran two volumes and each was divided into four parts. In each part, he took a representative figure of the era and built the history around them. If I remember correctly, the eight representative figures were Thomas Jefferson, Walt Whitman, Mark Twain, T.S. Eliot, Louis Armstrong, Orson Welles, Bob Dylan and Matt Groening.
Jacopo: What made them representative?
Esteban: Each of them represented a particular period in American History and what they meant to America’s development.
Jacopo: But weren’t Eliot, Armstrong and Welles all roughly contemporaries?
Esteban: Yes, but no society changed as quickly as America during that period. In fact, if you wanted to make a case for a true cultural Golden Age, I would still argue for the period between the two world wars.
Jacopo: Why?
Esteban: It was the Golden Age of Movies and Jazz. And even if they weren’t Golden Ages America still produced wonderful literature, poetry and popular music during those periods.
Jacopo: Also, why were the first figures all writers?
Esteban: It was an odd thing about Early America. It had a fantastic literary culture, which I suppose they inherited as a vestige of being a British colony. But there were few great painters and fewer composers. In fact, almost all of the great music of Early America was written anonymously for use in the Church or the Tavern.
Jacopo: But why these four in particular?
Esteban: Because they represented the four most basic strands of writers: Jefferson the philosopher, Whitman the poet, Twain the novelist and Eliot the critic.
Jacopo: But wasn’t Eliot primarily a poet?
Esteban: Indeed he was, but Eliot’s poetry would have been impossible without the encyclopedic knowledge that only a critic can accumulate. In any event, we have a long drive ahead of us. Why don’t we stop at least until we get to the beach.
Jacopo: Sounds good.
Monday, August 8, 2011
800 Words: The Weekend America was Young Part 6 (Part 1)
Jacopo: Do you think the legalization of marijuana was the reason for the United States’ final descent?
Esteban: Hardly. But it did lead to the Mexican Civil War. And I think most historians would agree that the Mexican Civil War was a point of no return. It was the moment when America definitively crossed the boundary from a flawed democracy into an authoritarian police state. That moment was coming, regardless of how it happened. But in that way, I suppose marijuana legalization was a trigger.
Jacopo: Ironically, that threshold was crossed when United States appeared to be in the midst of the strongest recovery since World War II.
Esteban: It’s not as ironic as all that. Americans was in the midst of a recovery so unlikely that they’d have acceded to far worse to keep their country from the chaos that loomed.
Jacopo: How did marijuana legalization go so quickly from the bottom of legislative priorities to the top?
Esteban: We began to hear rumors of this around Labor Day 2012. President Obama and the congressional Democrats, realizing that there was no chance of either incurring anything but a colossal loss after the austerity package described in our interruption, began to talk in secret about a hastily arranged bill to legalize marijuana.
Jacopo: How was it a secret to the world if it was passed by October?
Esteban: How is it ever? It was a secret until it was leaked.
Jacopo: Why was it leaked?
Esteban: Because a measure like this can be so politically damaging that if it weren’t presented hastily, cautious people would never agree to it.
Jacopo: Who leaked it?
Esteban: Once again, it doesn’t really matter. It could have been a Republican who wanted to sink the Democrats even further. Or it could have been the President himself since he knew that he had only until Election Day to get it passed before Republicans would block it completely. But by October 1st, it was clearly on the table.
Jacopo: How could the President get it passed with a Republican congress?
Esteban: Because the Republicans knew that if enough moderates voted for it, it could pass they could still blame the Democrats for another policy for whose success they could steal credit. Until Election Day, the argument could still be made that President Obama was not a lame duck.
Jacopo: But weren’t the Republicans of this era notorious for unanimous voting?
Esteban: That’s precisely why Republicans could coordinate an effort to help Obama pass it. Some moderate Republicans were instructed by their operatives to vote for the bill. Other Republican moderates were defeated in primaries by the Tea Party, so they simply voted their consciences.
Jacopo: Obviously Obama and the Democrats were expecting to be trounced.
Esteban: Indeed they were. But this also presented an opportunity for Democrats. Obama realized that for Congress’s sake, he needed to energize the Left and the youth vote. The Left was still as furious at him for his austerity measures as the Right was. If I might use an antiquated term from what was once called American Football, marijuana legalization was the Democrats’ “Hail Mary”: a final ploy for votes concocted in desperation. The move worked at least a bit. It only saved three senate seats, which gave the Republicans 63 Senators rather than 66. But in the house, the number of Republican congressmen was only 350, in a year when the Republicans were expected to carry more than 400 seats.
Jacopo: How was legalization sold to the larger public?
Esteban: As a way to pay off the remaining debt. Marijuana could be taxed at virtually the price it cost to buy, and those who wanted Marijuana would still buy it. It was much safer than buying illegally. And it came in varying strengths; so people could get more potent varieties than what they usually bought under the high school bleachers.
Jacopo: But it still must have been illegal for high schoolers.
Esteban: Indeed it was. And that was at least a sliver of what contributed to its backfiring.
Jacopo: Why did marijuana legalization backfire?
Esteban: Many reasons. But they boil down to this: It was thought that part of why the plan would be effective was because of a provision to gradually release prisoners who went to jail for marijuana possession. One out of every eight drug prisoners were there for nothing larger than marijuana. But releasing the prisoners saved no more than $1 billion a year and prison had hardened most of these released prisoners. When they were released, they still were former felons who had no skills. Out of desperation, many of them turned to violent crime and dealing harder drugs. And since acquiring harder drugs was easier than ever, there were far more people who became addicted to harder drugs.
Jacopo: So not only did marajuana make more money for the government and pharmaceutical companies, but it also strengthened the drug trade and forced the government to put most of the money saved from legalization into police protection.
Esteban: Yes it did. Something like 150% of the projected savings were used for more policemen, border patrol, intelligence gathering, intelligence analysis, mass surveilence, pre-emptive neutralization operations, non-military preventive action - which we used to called ‘Nation Building’ - rehabilitation centers, prison expansions and target hardening. The illegal drug trade became more dangerous than ever because it was no longer grounded in a harmless substance. And as much as we did not want to believe in marijuana as a gateway drug, it proved to be so in enough cases that we have to wonder if legalization was worth the effort.
Jacopo: I take it that since the projected savings from marijuana legalization was quite high, the amount of people affected by the drug trade was much higher after legalization.
Esteban: Oh yes. It was expected that over time the projected earnings from marijuana legalization would be in the hundreds of billions. But all of these complications cost America nearly a trillion dollars.
Jacopo: How did it affect the Mexican Drug Trade?
Esteban: It’s almost impossible to describe in detail, simply because there’s so much of it. The Mexican Drug War was already a byzantine network of double-crosses, shifting alliances and indiscriminate killing. But when the drug war grew into the Mexican Civil War, it could often seem like a war of everyone against everyone. But I’ll do what I can to give this some nuance.
Jacopo: Is it worth explaining?
Esteban: Absolutely, but in order to talk about it, you have to go back to at least to 1929. From 1929 until 1982, Mexico was a one-party system which gave the appearance of a democracy. Every election would end with the Institutional Revolutionary Party (or in your language - Partido Revolucionario Institucional) accumulating 70% of the vote - a tally which they would achieve through massive electoral fraud. The fraud allowed them to maintain every senate seat, every regional governorship, and nearly every seat in the Chamber of Deputies. After six years, the President would handpick his successor; a process known as the ‘Tap of the Finger’ (or El Dedazo). The famous Peruvian writer, Mario Vargas Llosa called Mexico the ‘The Perfect Dictatorship.’ It preserved all the forms of democracy meanwhile gutting all of democracy’s mechanics.
Jacopo: A process which prefigured some of the developments of the early 21st century.
Esteban: Authoritarian Democracy. All you have to do is to look at the Russia of Vladimir Putin or the Fujimoris in Peru to see a similar process.
Jacopo: How did the one-party system collapse?
Esteban: The PRI was not only a one-party system but also a Socialist party. Being a neighbor to the United States, it could never ally itself with the Soviet Union. So the PRI installed a full welfare system in Mexico by borrowing from the United States Government. By the 70’s the Mexican government had so over-borrowed from the US that the peso went into hyper-inflation. In order to combat inflation, Mexico became the fourth-largest producer of oil in the world. Over the next ten years, so much oil was produced that the price of oil dipped and investors almost entirely pulled out of Mexico. The PRI was powerless against the change in price and in 1986 the left-wing bolted the party because the PRI cut social spending to pay their debts.
Jacopo: So after that Mexico was a two-socialist-party system?
Esteban: No, there was always the National Action Party - a token conservative party deliberately kept in opposition. It was not until 2000 when the National Action Party became the first party to defeat the PRI for high office.
Jacopo: That must have been considered a huge step forward for democracy.
Esteban: In many ways, it was. The election was fundamentally clean, and the PRI accepted the results with no complaint.
Jacopo: It must have seemed ironic that true trouble began after Mexico became a democracy.
Esteban: Democracy is just as easy to exploit as a dictatorship. It depends on its citizens acting in good faith and solid institutions which can fight corruption effectively. A successful democracy is the exception, not the rule, and its success is usually fleeting. In the case of Mexico, it’s success lasted six years.
Jacopo: That’s more than five years longer than the American Restoration lasted.
Esteban: Indeed. Y’know, I’m not sure I can finish this today. As you know, today was a terrible day on the markets and our portfolio took an enormous hit before we got out altogether. Why don’t we continue this later and I’ll start with the presidential election and end with how Mitt Romney turned the United States authoritarian.
Esteban: Hardly. But it did lead to the Mexican Civil War. And I think most historians would agree that the Mexican Civil War was a point of no return. It was the moment when America definitively crossed the boundary from a flawed democracy into an authoritarian police state. That moment was coming, regardless of how it happened. But in that way, I suppose marijuana legalization was a trigger.
Jacopo: Ironically, that threshold was crossed when United States appeared to be in the midst of the strongest recovery since World War II.
Esteban: It’s not as ironic as all that. Americans was in the midst of a recovery so unlikely that they’d have acceded to far worse to keep their country from the chaos that loomed.
Jacopo: How did marijuana legalization go so quickly from the bottom of legislative priorities to the top?
Esteban: We began to hear rumors of this around Labor Day 2012. President Obama and the congressional Democrats, realizing that there was no chance of either incurring anything but a colossal loss after the austerity package described in our interruption, began to talk in secret about a hastily arranged bill to legalize marijuana.
Jacopo: How was it a secret to the world if it was passed by October?
Esteban: How is it ever? It was a secret until it was leaked.
Jacopo: Why was it leaked?
Esteban: Because a measure like this can be so politically damaging that if it weren’t presented hastily, cautious people would never agree to it.
Jacopo: Who leaked it?
Esteban: Once again, it doesn’t really matter. It could have been a Republican who wanted to sink the Democrats even further. Or it could have been the President himself since he knew that he had only until Election Day to get it passed before Republicans would block it completely. But by October 1st, it was clearly on the table.
Jacopo: How could the President get it passed with a Republican congress?
Esteban: Because the Republicans knew that if enough moderates voted for it, it could pass they could still blame the Democrats for another policy for whose success they could steal credit. Until Election Day, the argument could still be made that President Obama was not a lame duck.
Jacopo: But weren’t the Republicans of this era notorious for unanimous voting?
Esteban: That’s precisely why Republicans could coordinate an effort to help Obama pass it. Some moderate Republicans were instructed by their operatives to vote for the bill. Other Republican moderates were defeated in primaries by the Tea Party, so they simply voted their consciences.
Jacopo: Obviously Obama and the Democrats were expecting to be trounced.
Esteban: Indeed they were. But this also presented an opportunity for Democrats. Obama realized that for Congress’s sake, he needed to energize the Left and the youth vote. The Left was still as furious at him for his austerity measures as the Right was. If I might use an antiquated term from what was once called American Football, marijuana legalization was the Democrats’ “Hail Mary”: a final ploy for votes concocted in desperation. The move worked at least a bit. It only saved three senate seats, which gave the Republicans 63 Senators rather than 66. But in the house, the number of Republican congressmen was only 350, in a year when the Republicans were expected to carry more than 400 seats.
Jacopo: How was legalization sold to the larger public?
Esteban: As a way to pay off the remaining debt. Marijuana could be taxed at virtually the price it cost to buy, and those who wanted Marijuana would still buy it. It was much safer than buying illegally. And it came in varying strengths; so people could get more potent varieties than what they usually bought under the high school bleachers.
Jacopo: But it still must have been illegal for high schoolers.
Esteban: Indeed it was. And that was at least a sliver of what contributed to its backfiring.
Jacopo: Why did marijuana legalization backfire?
Esteban: Many reasons. But they boil down to this: It was thought that part of why the plan would be effective was because of a provision to gradually release prisoners who went to jail for marijuana possession. One out of every eight drug prisoners were there for nothing larger than marijuana. But releasing the prisoners saved no more than $1 billion a year and prison had hardened most of these released prisoners. When they were released, they still were former felons who had no skills. Out of desperation, many of them turned to violent crime and dealing harder drugs. And since acquiring harder drugs was easier than ever, there were far more people who became addicted to harder drugs.
Jacopo: So not only did marajuana make more money for the government and pharmaceutical companies, but it also strengthened the drug trade and forced the government to put most of the money saved from legalization into police protection.
Esteban: Yes it did. Something like 150% of the projected savings were used for more policemen, border patrol, intelligence gathering, intelligence analysis, mass surveilence, pre-emptive neutralization operations, non-military preventive action - which we used to called ‘Nation Building’ - rehabilitation centers, prison expansions and target hardening. The illegal drug trade became more dangerous than ever because it was no longer grounded in a harmless substance. And as much as we did not want to believe in marijuana as a gateway drug, it proved to be so in enough cases that we have to wonder if legalization was worth the effort.
Jacopo: I take it that since the projected savings from marijuana legalization was quite high, the amount of people affected by the drug trade was much higher after legalization.
Esteban: Oh yes. It was expected that over time the projected earnings from marijuana legalization would be in the hundreds of billions. But all of these complications cost America nearly a trillion dollars.
Jacopo: How did it affect the Mexican Drug Trade?
Esteban: It’s almost impossible to describe in detail, simply because there’s so much of it. The Mexican Drug War was already a byzantine network of double-crosses, shifting alliances and indiscriminate killing. But when the drug war grew into the Mexican Civil War, it could often seem like a war of everyone against everyone. But I’ll do what I can to give this some nuance.
Jacopo: Is it worth explaining?
Esteban: Absolutely, but in order to talk about it, you have to go back to at least to 1929. From 1929 until 1982, Mexico was a one-party system which gave the appearance of a democracy. Every election would end with the Institutional Revolutionary Party (or in your language - Partido Revolucionario Institucional) accumulating 70% of the vote - a tally which they would achieve through massive electoral fraud. The fraud allowed them to maintain every senate seat, every regional governorship, and nearly every seat in the Chamber of Deputies. After six years, the President would handpick his successor; a process known as the ‘Tap of the Finger’ (or El Dedazo). The famous Peruvian writer, Mario Vargas Llosa called Mexico the ‘The Perfect Dictatorship.’ It preserved all the forms of democracy meanwhile gutting all of democracy’s mechanics.
Jacopo: A process which prefigured some of the developments of the early 21st century.
Esteban: Authoritarian Democracy. All you have to do is to look at the Russia of Vladimir Putin or the Fujimoris in Peru to see a similar process.
Jacopo: How did the one-party system collapse?
Esteban: The PRI was not only a one-party system but also a Socialist party. Being a neighbor to the United States, it could never ally itself with the Soviet Union. So the PRI installed a full welfare system in Mexico by borrowing from the United States Government. By the 70’s the Mexican government had so over-borrowed from the US that the peso went into hyper-inflation. In order to combat inflation, Mexico became the fourth-largest producer of oil in the world. Over the next ten years, so much oil was produced that the price of oil dipped and investors almost entirely pulled out of Mexico. The PRI was powerless against the change in price and in 1986 the left-wing bolted the party because the PRI cut social spending to pay their debts.
Jacopo: So after that Mexico was a two-socialist-party system?
Esteban: No, there was always the National Action Party - a token conservative party deliberately kept in opposition. It was not until 2000 when the National Action Party became the first party to defeat the PRI for high office.
Jacopo: That must have been considered a huge step forward for democracy.
Esteban: In many ways, it was. The election was fundamentally clean, and the PRI accepted the results with no complaint.
Jacopo: It must have seemed ironic that true trouble began after Mexico became a democracy.
Esteban: Democracy is just as easy to exploit as a dictatorship. It depends on its citizens acting in good faith and solid institutions which can fight corruption effectively. A successful democracy is the exception, not the rule, and its success is usually fleeting. In the case of Mexico, it’s success lasted six years.
Jacopo: That’s more than five years longer than the American Restoration lasted.
Esteban: Indeed. Y’know, I’m not sure I can finish this today. As you know, today was a terrible day on the markets and our portfolio took an enormous hit before we got out altogether. Why don’t we continue this later and I’ll start with the presidential election and end with how Mitt Romney turned the United States authoritarian.
Saturday, August 6, 2011
800 Words: The Weekend America was Young - Interruption 1: The Destruction of Delaware
Jacopo: So which Civil War would you like to tackle now?
Esteban: It doesn’t matter to me. I could go on at length about all of them.
Jacopo: Well, we have nothing but time...
Esteban: I’m not sure I do, but that’s the great thing about working in stocks and real estate, isn’t it?
Jacopo: Indeed. I can see why our family’s kept this job.
Esteban: If you can live with the thought of getting fat on other people’s labor, it can be a rather enjoyable life. Other people have no time to remember what they’ve lived. You have the time to live everything you remember.
Jacopo: That can be quite a curse.
Esteban: Indeed it can. Which is why I’m coming to love doing these interviews.
Jacopo: Well, now that you and Bubbie are fully settled in Buenos Aires, I honestly wouldn’t mind doing a lot more of these.
Esteban: I have from now until whenever my time comes.
Jacopo: We can do a lot more. You’re in astonishingly good health.
Esteban: No worse than I was at 30.
Jacopo: And probably better than you were at 25. I can’t believe those pictures of you.
Esteban: I was quite the chazzer at that point.
Jacopo: What changed?
Esteban: I spent the second half of my twenties thinking I was doomed to an early grave. I don’t doubt I’d have ended up there had I continued in music.
Jacopo: What did your music-making sound like?
Esteban: Given the amount of talent I had, pretty abysmal.
Jacopo: Why abysmal?
Esteban: The usual reason. I hated practicing.
Jacopo: Why did you give it up?
Esteban: Because I was abysmal.
Jacopo: Why do you think you were abysmal?
Esteban: Because I didn’t practice.
Jacopo: No, really....
Esteban: Really. As a violinist I would never have been able to hold my own in a fourth-rate professional orchestra.
Jacopo: But you could have conducted it.
Esteban: Not after they heard me play violin.
Jacopo: Does that matter?
Esteban: After a certain point, it certainly does. I could write out most of the great music of the nineteenth century in full score by memory, I probably still can. But I couldn’t memorize the names of their root chords, I could never understand a Schenkerian analysis chart, and I could never play more than a single line at a time on the piano.
Jacopo: How about as a singer?
Esteban: I might have been decent had I not smoked for seven years.
Jacopo: You smoked???
Esteban: So did your Bubbie.
Jacopo: ….I can’t believe what I’m hearing.
Esteban: We were young.
Jacopo: It wasn’t like today when cigarettes are just tea leaves ingested through steam.
Esteban: Shreklekh! Who would ever want to smoke that?
Jacopo: Wait, so you weren’t just addicted? You enjoyed nicotine cigarettes?
Esteban: I loved them. If I wasn’t worried that I’d drop dead of a heart attack at the age of 26, I’d have probably kept going until something real killed me.
Jacopo: How could you be worried about dying of a heart attack at 26?
Esteban: I was a fat smoker who had chest pains. What would you have done?
Jacopo: Not have started smoking.
Esteban: Well, let’s say you were as dumb as I was.
Jacopo: Gone to the doctor?
Esteban: That’s what I did. I went to two different cardiologists who told me that my heart was completely fine.
Jacopo: So you kept smoking?
Esteban: Hell no. That just made me more certain I’d drop dead.
Jacopo: So that was when you lost weight?
Esteban: No. What happened then was that your cousin David Cordova diagnosed me with an ulcer over instant messenger.
Jacopo: Was he even a medical student yet?
Esteban: No.
Jacopo: Was he right?
Esteban: He must have been. I stopped drinking seltzer water for a few months and I was fine.
Jacopo: It’s difficult to imagine you without a bottle of seltzer.
Esteban: Then imagine how difficult it must have been for me.
Jacopo: So how did you lose the weight?
Esteban: My father bought us a house in Bethany Beach, Delaware.
Jacopo: Isn’t Delaware the state that Pennsylvania nuked over a dispute about toll fees?
Esteban: Exactly. But this was still in the period when Delaware was in the peak of its influence.
Jacopo: Delaware was an influential state?
Esteban: Oh, very. In fact, from a certain vantage point, one might be able to blame the entire fall of America on Delaware. Delaware had hardly any usury laws.
Jacopo: What’s usury?
Esteban: The lending of money at a rate of interest.
Jacopo: I should have known that.
Esteban: That’s alright. At your age I was at least as incompetent with money. You’ll do fine....So anyway, Delaware was the only state in the union that would allow banks and credit card companies no limit in the amount of interest it could charge on its loans. As a result, tens of millions of Americans had to file for personal bankruptcy because they could not pay for loans on houses which banks operating out of Delaware would grant them.
Jacopo: If the borrowers couldn’t pay back the banks, what would the banks do to get the money back?
Esteban: The only thing they could do. They would simply instruct their customers to take out a larger loan.
Jacopo: But if the borrowers couldn’t pay back the smaller loan, how could they pay back the larger one.
Esteban: That’s precisely the point. These banks knew that they couldn’t be paid back, so they would simply wait for the United States Federal Government to bail them out.
Jacopo: So this was all one big scheme to extort money from the Federal Government?
Esteban: Not quite, though that might make for a more entertaining story. What it really was was just another humdrum society-gone-wrong story. At every level, the bank employees had to prove their worth, so at no point was there an incentive for any worker to say “These are terrible loans.”
Jacopo: So it’s a bit like a dictatorship in the corporate sphere.
Esteban: Only a bit. You’d get fired instead of incinerated. But yes, it’s the same basic idea.
Jacopo: Was there any way to break this cycle without the banks being destroyed completely?
Esteban: Well, no. Not without the banks being regulated.
Jacopo: That doesn’t sound hard at all. Why couldn’t the United States government simply have done that?
Esteban: Because the United States government was regulated by the banks. Every congressman who lost an election would become either a Wall Street banker or lawyer, where they could make more money. Most every congressional staffer would be expected to spend as much of their career in a Washington DC lobbying firm as in a congressional office, so they could make more money. Every Secretary of the Treasury from Bill Clinton’s second - Robert Rubin - until Michelle Bachmann’s only Secretary - David H. Koch - was an appointment made because he came with extraordinarily deep Wall Street connections, so the President could raise more money. It was only when Barack Obama was re-elected in 2020 that any president attempted to brake this cycle. Within three months of taking office, Obama had banned congressional staffers from working at lobbying firms, banned all private financing of political campaigns, and appointed Robert Reich - a former secretary of Labor and Brandeis professor who avoided all Wall Street connections - as Secretary of the Treasury. And just in case there was any doubt as to Obama’s intention to do things differently, it was the leaked private memo to Reich from Obama’s Chief of Staff, David Axelrod, which contained that now-famous maxim:“Rule them like a Czar.”
Jacopo: How did Delaware fare in all those economic collapses?
Esteban: They were the last state in the union to be hit. But when they were, they were hit with a vengeance. There were far less people in Delaware than most states. But a far larger portion of them were corporate executives.
Jacopo: So while normal Americans were getting poorer by the month, the government would be writing checks to the executives in the form of corporate bailouts?
Esteban: Not exactly. After the debt crisis of August 2011, it became clear that the bailouts of 2009 failed to keep the United States economy from depression, or from bad credit and a debt crisis. So President Obama decided that he must stop the bailouts and put all of his efforts into paying the United States debt. And then came the most daring act, by degrees of magnitude, which a President had ever attempted. To describe it as the largest austerity measure in the history of the world would be to understate it terribly. Based the International Emergency Economic Powers Act, Obama bypassed congress to freeze the assets of every major bank in the country and used 20% of the money in the coffers of banks like Bank of America, J.P.Morgan Chase, Citigroup, Wells Fargo and Goldman Sachs to pay off as much of the debt as the United States could handle with that. He then raised the age of Social Security to 75, raised the gas tax to 25 cents per gallon, raised every income tax bracket by no less than 8%, raised the marginal tax rate - tax on every dollar over $250,000 - to 90% and included all capital gains as marginal income. He banned all off-shore accounts and banned all state loopholes for corporate tax havens. And just when the world thought he was done, he issued the most radical decrees of all. He cut the military budget by 30%, closed more than half of the US military’s international bases; banned earmarks on all bills, laid off 20% of the US Federal Government’s employees; put a cap of $15,000 per 5 years on how much government would subsidize per capita health care, and charged the rest to insurance companies; cut future student loan subsidies by 75%, eliminated 50% of all farm subsidies, issued a mandatory minimum in local and state income taxes and cut all federal pensions by 30%. He did all this knowing that the entire world would have to undergo a severe depression simply to correct the balance of the World Economy. But also knowing that such a reckoning could happen either in a controlled environment or in a chaotic one.
Jacopo: How could he have made all this take effect once the emergency powers lifted?
Esteban: He couldn’t. And he knew it. But he also knew that the very fact of his declaring all this legislation meant that Republicans would have to practice triage with all their priorities.
Jacopo: What did the Republicans manage to save?
Esteban: Take one guess...
Jacopo: Marginal tax rates?
Esteban: Surprise! Obama was counting on the power of his office to be the one reassurance against the chaos that followed. And that chaos served him extremely well. In the span of a month, the Dow Jones plummeted to five thousand. The banks were 20% poorer. Military contractors had 30% less influence. Oil companies had 25% more initiative to speed up their alternative energy research and that Health Insurance companies now had an initiative to keep their clients in good health. All it took was one terrifying month, and the entire ability for business to control government had been kneecapped. Once they no longer had the money to pay Republicans to do their bidding, what point was there in Republicans opposing him on policies which most of them knew would guarantee them electoral victory and ultimately improve the country?
Jacopo: But he must have known that this would cost him the election.
Esteban: Most Americans were surprised it didn’t cost him his life. He was being called a dictator in every organ of the press - equated with Hitler not just by far-right demagogues but also by the left. The only people who approved were old-school centrist journalists like Thomas Friedman and David Brooks who claimed that Obama saved the country from itself. There were riots all across the South: Houston, Virginia Beach, Memphis, Phoenix, Wichita, San Antonio, Tulsa, Dallas, Jacksonville, Louisville, Nashville. And every time the President called in another division of the National Guard to patrol a different city, we had to be afraid that the National Guard would either shoot the rioters or join them. Fortunately, few did either. But even so, President Obama’s plan managed to reduce the United States’s debt by $10 trillion in five years. Had Michelle Bachmann not become president, the United States might have been bought another hundred years of life, perhaps even of domination. All of this was done in the span of a month. After it was finished, he lifted his emergency powers and stood against the winds that blew. And boy, did they blow.
Jacopo: But since so many corporate executives lived in Delaware, it was the state that made the most money on the Obama plan.
Esteban: Exactly.
Jacopo: Even with fighting back on Marginal Tax Rates.
Esteban: Obama knew that Marginal Tax Rates would be the ideal red herring. In the years that followed, the economy was so bad that hardly anyone was making more than $250,000 dollars a year. So he allowed the Republicans a Pyrrhic victory while they still managed not to put a dent in his plan. Even if the Republicans got marginal tax rates down to 45%, the State of Delaware was still getting more per-capita income on marginal taxes than any other state in the country.
Jacopo: So even as most of the banks were falling, Delaware was still doing very well.
Esteban: Indeed it was. And continued to do well for nearly another twenty years.
Jacopo: What stopped their success?
Esteban: Death.
Jacopo: Death how?
Esteban: Most of the executives who worked in Delaware stayed there for retirement. Southern Delaware had extremely pleasant beach communities with lots of restaurants, outlet stores and all the other amenities for which a rich retiree could possibly wish. But since Obama had banned all state tax loopholes for corporate residency - twice - corporations no longer had any reason to stay in Delaware. Not even the “Ryan Restoration Plan” could induce corporations to move back.
Jacopo: So eventually all the retired executives just died?
Esteban: Precisely. And when they did, the state had no income left to support itself.
Jacopo: Couldn’t they have simply raised taxes?
Esteban: Yes, they could have. But Delaware would then have to support itself for the first time in over two-hundred years.
Jacopo: What did they do instead?
Esteban: They raised the toll on the Delaware Memorial Bridge to 25 dollars. The rest, as they say, is history.
Jacopo: You still haven’t explained how Pennsylvania nuked Delaware.
Esteban: All in good time boychik. I think your bubbie has lunch ready.
Jacopo: So why don’t we take a break. But you never did tell me how you lost the weight.
Esteban: Oh....Yeah. I bought a bike.
Jacopo: Oh.
Esteban: It doesn’t matter to me. I could go on at length about all of them.
Jacopo: Well, we have nothing but time...
Esteban: I’m not sure I do, but that’s the great thing about working in stocks and real estate, isn’t it?
Jacopo: Indeed. I can see why our family’s kept this job.
Esteban: If you can live with the thought of getting fat on other people’s labor, it can be a rather enjoyable life. Other people have no time to remember what they’ve lived. You have the time to live everything you remember.
Jacopo: That can be quite a curse.
Esteban: Indeed it can. Which is why I’m coming to love doing these interviews.
Jacopo: Well, now that you and Bubbie are fully settled in Buenos Aires, I honestly wouldn’t mind doing a lot more of these.
Esteban: I have from now until whenever my time comes.
Jacopo: We can do a lot more. You’re in astonishingly good health.
Esteban: No worse than I was at 30.
Jacopo: And probably better than you were at 25. I can’t believe those pictures of you.
Esteban: I was quite the chazzer at that point.
Jacopo: What changed?
Esteban: I spent the second half of my twenties thinking I was doomed to an early grave. I don’t doubt I’d have ended up there had I continued in music.
Jacopo: What did your music-making sound like?
Esteban: Given the amount of talent I had, pretty abysmal.
Jacopo: Why abysmal?
Esteban: The usual reason. I hated practicing.
Jacopo: Why did you give it up?
Esteban: Because I was abysmal.
Jacopo: Why do you think you were abysmal?
Esteban: Because I didn’t practice.
Jacopo: No, really....
Esteban: Really. As a violinist I would never have been able to hold my own in a fourth-rate professional orchestra.
Jacopo: But you could have conducted it.
Esteban: Not after they heard me play violin.
Jacopo: Does that matter?
Esteban: After a certain point, it certainly does. I could write out most of the great music of the nineteenth century in full score by memory, I probably still can. But I couldn’t memorize the names of their root chords, I could never understand a Schenkerian analysis chart, and I could never play more than a single line at a time on the piano.
Jacopo: How about as a singer?
Esteban: I might have been decent had I not smoked for seven years.
Jacopo: You smoked???
Esteban: So did your Bubbie.
Jacopo: ….I can’t believe what I’m hearing.
Esteban: We were young.
Jacopo: It wasn’t like today when cigarettes are just tea leaves ingested through steam.
Esteban: Shreklekh! Who would ever want to smoke that?
Jacopo: Wait, so you weren’t just addicted? You enjoyed nicotine cigarettes?
Esteban: I loved them. If I wasn’t worried that I’d drop dead of a heart attack at the age of 26, I’d have probably kept going until something real killed me.
Jacopo: How could you be worried about dying of a heart attack at 26?
Esteban: I was a fat smoker who had chest pains. What would you have done?
Jacopo: Not have started smoking.
Esteban: Well, let’s say you were as dumb as I was.
Jacopo: Gone to the doctor?
Esteban: That’s what I did. I went to two different cardiologists who told me that my heart was completely fine.
Jacopo: So you kept smoking?
Esteban: Hell no. That just made me more certain I’d drop dead.
Jacopo: So that was when you lost weight?
Esteban: No. What happened then was that your cousin David Cordova diagnosed me with an ulcer over instant messenger.
Jacopo: Was he even a medical student yet?
Esteban: No.
Jacopo: Was he right?
Esteban: He must have been. I stopped drinking seltzer water for a few months and I was fine.
Jacopo: It’s difficult to imagine you without a bottle of seltzer.
Esteban: Then imagine how difficult it must have been for me.
Jacopo: So how did you lose the weight?
Esteban: My father bought us a house in Bethany Beach, Delaware.
Jacopo: Isn’t Delaware the state that Pennsylvania nuked over a dispute about toll fees?
Esteban: Exactly. But this was still in the period when Delaware was in the peak of its influence.
Jacopo: Delaware was an influential state?
Esteban: Oh, very. In fact, from a certain vantage point, one might be able to blame the entire fall of America on Delaware. Delaware had hardly any usury laws.
Jacopo: What’s usury?
Esteban: The lending of money at a rate of interest.
Jacopo: I should have known that.
Esteban: That’s alright. At your age I was at least as incompetent with money. You’ll do fine....So anyway, Delaware was the only state in the union that would allow banks and credit card companies no limit in the amount of interest it could charge on its loans. As a result, tens of millions of Americans had to file for personal bankruptcy because they could not pay for loans on houses which banks operating out of Delaware would grant them.
Jacopo: If the borrowers couldn’t pay back the banks, what would the banks do to get the money back?
Esteban: The only thing they could do. They would simply instruct their customers to take out a larger loan.
Jacopo: But if the borrowers couldn’t pay back the smaller loan, how could they pay back the larger one.
Esteban: That’s precisely the point. These banks knew that they couldn’t be paid back, so they would simply wait for the United States Federal Government to bail them out.
Jacopo: So this was all one big scheme to extort money from the Federal Government?
Esteban: Not quite, though that might make for a more entertaining story. What it really was was just another humdrum society-gone-wrong story. At every level, the bank employees had to prove their worth, so at no point was there an incentive for any worker to say “These are terrible loans.”
Jacopo: So it’s a bit like a dictatorship in the corporate sphere.
Esteban: Only a bit. You’d get fired instead of incinerated. But yes, it’s the same basic idea.
Jacopo: Was there any way to break this cycle without the banks being destroyed completely?
Esteban: Well, no. Not without the banks being regulated.
Jacopo: That doesn’t sound hard at all. Why couldn’t the United States government simply have done that?
Esteban: Because the United States government was regulated by the banks. Every congressman who lost an election would become either a Wall Street banker or lawyer, where they could make more money. Most every congressional staffer would be expected to spend as much of their career in a Washington DC lobbying firm as in a congressional office, so they could make more money. Every Secretary of the Treasury from Bill Clinton’s second - Robert Rubin - until Michelle Bachmann’s only Secretary - David H. Koch - was an appointment made because he came with extraordinarily deep Wall Street connections, so the President could raise more money. It was only when Barack Obama was re-elected in 2020 that any president attempted to brake this cycle. Within three months of taking office, Obama had banned congressional staffers from working at lobbying firms, banned all private financing of political campaigns, and appointed Robert Reich - a former secretary of Labor and Brandeis professor who avoided all Wall Street connections - as Secretary of the Treasury. And just in case there was any doubt as to Obama’s intention to do things differently, it was the leaked private memo to Reich from Obama’s Chief of Staff, David Axelrod, which contained that now-famous maxim:“Rule them like a Czar.”
Jacopo: How did Delaware fare in all those economic collapses?
Esteban: They were the last state in the union to be hit. But when they were, they were hit with a vengeance. There were far less people in Delaware than most states. But a far larger portion of them were corporate executives.
Jacopo: So while normal Americans were getting poorer by the month, the government would be writing checks to the executives in the form of corporate bailouts?
Esteban: Not exactly. After the debt crisis of August 2011, it became clear that the bailouts of 2009 failed to keep the United States economy from depression, or from bad credit and a debt crisis. So President Obama decided that he must stop the bailouts and put all of his efforts into paying the United States debt. And then came the most daring act, by degrees of magnitude, which a President had ever attempted. To describe it as the largest austerity measure in the history of the world would be to understate it terribly. Based the International Emergency Economic Powers Act, Obama bypassed congress to freeze the assets of every major bank in the country and used 20% of the money in the coffers of banks like Bank of America, J.P.Morgan Chase, Citigroup, Wells Fargo and Goldman Sachs to pay off as much of the debt as the United States could handle with that. He then raised the age of Social Security to 75, raised the gas tax to 25 cents per gallon, raised every income tax bracket by no less than 8%, raised the marginal tax rate - tax on every dollar over $250,000 - to 90% and included all capital gains as marginal income. He banned all off-shore accounts and banned all state loopholes for corporate tax havens. And just when the world thought he was done, he issued the most radical decrees of all. He cut the military budget by 30%, closed more than half of the US military’s international bases; banned earmarks on all bills, laid off 20% of the US Federal Government’s employees; put a cap of $15,000 per 5 years on how much government would subsidize per capita health care, and charged the rest to insurance companies; cut future student loan subsidies by 75%, eliminated 50% of all farm subsidies, issued a mandatory minimum in local and state income taxes and cut all federal pensions by 30%. He did all this knowing that the entire world would have to undergo a severe depression simply to correct the balance of the World Economy. But also knowing that such a reckoning could happen either in a controlled environment or in a chaotic one.
Jacopo: How could he have made all this take effect once the emergency powers lifted?
Esteban: He couldn’t. And he knew it. But he also knew that the very fact of his declaring all this legislation meant that Republicans would have to practice triage with all their priorities.
Jacopo: What did the Republicans manage to save?
Esteban: Take one guess...
Jacopo: Marginal tax rates?
Esteban: Surprise! Obama was counting on the power of his office to be the one reassurance against the chaos that followed. And that chaos served him extremely well. In the span of a month, the Dow Jones plummeted to five thousand. The banks were 20% poorer. Military contractors had 30% less influence. Oil companies had 25% more initiative to speed up their alternative energy research and that Health Insurance companies now had an initiative to keep their clients in good health. All it took was one terrifying month, and the entire ability for business to control government had been kneecapped. Once they no longer had the money to pay Republicans to do their bidding, what point was there in Republicans opposing him on policies which most of them knew would guarantee them electoral victory and ultimately improve the country?
Jacopo: But he must have known that this would cost him the election.
Esteban: Most Americans were surprised it didn’t cost him his life. He was being called a dictator in every organ of the press - equated with Hitler not just by far-right demagogues but also by the left. The only people who approved were old-school centrist journalists like Thomas Friedman and David Brooks who claimed that Obama saved the country from itself. There were riots all across the South: Houston, Virginia Beach, Memphis, Phoenix, Wichita, San Antonio, Tulsa, Dallas, Jacksonville, Louisville, Nashville. And every time the President called in another division of the National Guard to patrol a different city, we had to be afraid that the National Guard would either shoot the rioters or join them. Fortunately, few did either. But even so, President Obama’s plan managed to reduce the United States’s debt by $10 trillion in five years. Had Michelle Bachmann not become president, the United States might have been bought another hundred years of life, perhaps even of domination. All of this was done in the span of a month. After it was finished, he lifted his emergency powers and stood against the winds that blew. And boy, did they blow.
Jacopo: But since so many corporate executives lived in Delaware, it was the state that made the most money on the Obama plan.
Esteban: Exactly.
Jacopo: Even with fighting back on Marginal Tax Rates.
Esteban: Obama knew that Marginal Tax Rates would be the ideal red herring. In the years that followed, the economy was so bad that hardly anyone was making more than $250,000 dollars a year. So he allowed the Republicans a Pyrrhic victory while they still managed not to put a dent in his plan. Even if the Republicans got marginal tax rates down to 45%, the State of Delaware was still getting more per-capita income on marginal taxes than any other state in the country.
Jacopo: So even as most of the banks were falling, Delaware was still doing very well.
Esteban: Indeed it was. And continued to do well for nearly another twenty years.
Jacopo: What stopped their success?
Esteban: Death.
Jacopo: Death how?
Esteban: Most of the executives who worked in Delaware stayed there for retirement. Southern Delaware had extremely pleasant beach communities with lots of restaurants, outlet stores and all the other amenities for which a rich retiree could possibly wish. But since Obama had banned all state tax loopholes for corporate residency - twice - corporations no longer had any reason to stay in Delaware. Not even the “Ryan Restoration Plan” could induce corporations to move back.
Jacopo: So eventually all the retired executives just died?
Esteban: Precisely. And when they did, the state had no income left to support itself.
Jacopo: Couldn’t they have simply raised taxes?
Esteban: Yes, they could have. But Delaware would then have to support itself for the first time in over two-hundred years.
Jacopo: What did they do instead?
Esteban: They raised the toll on the Delaware Memorial Bridge to 25 dollars. The rest, as they say, is history.
Jacopo: You still haven’t explained how Pennsylvania nuked Delaware.
Esteban: All in good time boychik. I think your bubbie has lunch ready.
Jacopo: So why don’t we take a break. But you never did tell me how you lost the weight.
Esteban: Oh....Yeah. I bought a bike.
Jacopo: Oh.
Friday, August 5, 2011
800 Words: The Weekend America was Young - Part 5
Jacopo: I’d like to get back to the question of America’s fall.
Esteban: Not so fast. First we have to cover the conditions that lead up to it. And you can’t do that without talking about the Four Civil Wars of 2013.
Jacopo: Oh yes, didn’t you ask Bubbie to marry you while watching the Pakistani massacres on television?
Esteban: I was a true romantic.
Jacopo: Must have been an exciting day for everybody.
Esteban: Bliss was it in that dawn to be alive.
Jacopo: But weren’t there other civil wars going on already?
Esteban: Yes there were. But those were, at least in retrospect, much slower conflicts. They took longer to erupt, longer to fight and longer to resolve. The Libyan civil war dragged on for twenty years. Neither Sarkozy, nor Le Pen nor Blair could effectively withdraw from France's Libyan strongholds without inviting Mutassim Qaddafi to invade all of Southern France.
Jacopo: I thought Qaddafi fils had only conquered the French coast.
Esteban: Indeed he had. Marseilles, Montpellier, Antibes, Cannes, Arles, Nice, Perpignan, Lourdes, Toulon and Toulouse had all fallen. And all non-Muslim residents of those cities were confined to ghettos. But Lyon, Aix-en-Provence and Saint Etienne were thought to be next and were completely evacuated. But the masterstroke was to arrange a deal with Parisian mullahs to bus rioters in from Paris with the express purpose of torching France’s entire Southern countryside to the ground. And with that, half of France’s wine industry was gone forever.
Jacopo: Neither I nor my kids will never know what real Champagne tastes like.
Esteban: Or Armagnac, or Beaujolais, or Chablis, or Chateau, or Cremant de Limoux, or Cotes du Gascogne, or Premier Cru.
Jacopo: I thought you didn’t care for wine.
Esteban: I like to have the option.
Jacopo: But most of this was already in the later part of the decade.
Esteban: Exactly. The Libyan conflict simmered while the conflicts of China, Pakistan, Saudi Arabia and Mexico exploded. And with them the stage was set for the larger conflicts which soon engulfed us all.
Jacopo: How did they set the stage?
Esteban: The Chinese conflict slowed manufacturing across the world to a crawl. The Pakistani conflict set loose nuclear weapons to any country who wanted one. The Saudi conflict set the price of oil at unimagined levels. The Mexico conflict set the United States on an irreversable path toward authoritarianism.
Jacopo: Why don’t you take us through the fundamentals of each.
Esteban: Sounds great. Why don’t we take this in chronological order. We’ll begin in the Saudi Civil War, which began with the attempt on Prince Abdullah bin Miteb’s life in February of 2013.
Jacopo: This was right in the middle of the Arab Spring. Was it not?
Esteban: Absolutely. The dictatorships of Tunisia and Egypt fell in 2010, and Yemen’s had fallen in September of the next year. By February 2012, the Hariri-Jumblatt alliance had succeeded temporarily in ridding itself of Hezbollah and Syrian influence. We thought it was permanent at the time, but the revolution was stopped in its tracks by a Saudi Prince who was very popular in the West for a brief period.
Jacopo: Abdullah bin Miteb. If I’m not mistaken he’s still the Saudi king.
Esteban: He’s completely senile now and the whole kingdom is waiting for him to die so that the Saudi Central Committee can govern openly.
Jacopo: How did he come to power?
Esteban: During my childhood, Saudi Arabia may have been the very worst of the world’s dictatorships. Even worse than North Korea. The educated population of Saudis consisted almost entirely of its Royal Family, which numbered roughly 7,000 people who divided the spoils of Saudi oil wells between them. Until all too recently, if you were not a member of the Royal Family, your only hope for advancement was to join the army. The other twenty-million Saudis were kept in the most abject squalor imaginable, often tortured, maimed and killed for the slightest possible offenses. Furthermore, the succession issues in Saudi Arabia were always a terrible burden. Most kingdoms are inherited through patrilineal descent. Meaning that the oldest son inherits the thrown from a King who was himself an oldest son. But Saudi succession is fratrilineal - meaning brother to brother. Which makes the succession far more confusing and the kings - who inherit the throne at a far older age - far more prone to conservatism. Since the original Saudi King, Abdul Aziz ibn Saud, had 45 sons, questions of succession were always strife-filled affairs. But never moreso than the succession from Abdullah to Abdullah bin Miteb.
Jacopo: Wasn’t there once a close relationship between them?
Esteban: Clearly. Abdullah bin Miteb was the grandson of King Abdullah. His father was Miteb bin Abdullah, the commander of the Saudi National Guard, which was the Saudi secret police. The King saw potential for his grandson to become the Western face of Saudi Arabia. He was articulate, handsome, intelligent and English-educated. He was a public relations dream and his grandfather quickly saw that bin Miteb was the best possible spokesman for the Saudi family in the international press.
Jacopo: And not realizing that he was raising a rival.
Esteban: Being a dictator requires living in a bubble. People are too scared to tell you obvious truths because if a person displeases you, you can simply have him killed or his family tortured. Abdullah thought his grandson would be loyal to him simply because he had plucked him out of relative obscurity for an important role. But what the King failed to realize that featuring one grandson so prominently in the international press might arouse the suspicion of his brothers and cousins.
Jacopo: Was it simply a question of jealousy?
Esteban: Not at all, though I don’t doubt that envy was an important contributor. But the most important factor was that many Saudi princes resented one of their own being so lauded in the West for so many untraditional practices. He’d be featured on American television claiming that the United States is a great friend to Islam, in style section photographs with beautiful film stars, on film at Women’s Tennis matches and shaking hands with Israeli ministers. This was too much for many of his more traditional relatives. In a sense, he may have been forced into rebellion because he came to represent Western Decadence to so many reactionary elements. Even with his father heading the secret police, there was simply no way he could have felt safe.
Jacopo: Which of course led to that famous assassination attempt in Paris.
Esteban: Yes, but what was incredible was that he survived at all. He was in the penthouse at L’Hotel de Crillon with some rich French girl whose name escapes me. They were apparently drunk and the Prince’s guards were outside the door. The assassin was hiding in the closet with a shotgun. The poor girl apparently spotted the assassin from the creak in the door, and screamed right before she was shot - killed instantly with one bullet. The guards were quick enough to knock down the assassin before he got to the Prince, who immediately hit the ground and hid underneath his bed.
Jacopo: Does anyone know who ordered the hit?
Esteban: It probably doesn’t matter. It honestly could have been one of a dozen relatives. In any event, King Abdullah wanted to hush the matter up entirely. But I think the Prince correctly interpreted the coverup as a death sentence. So he had a press contact report to al-Jezeera that he was dead, and for about nine months went into hiding.
Jacopo: Where did he hide?
Esteban: Rural Texas apparently. Some oil buddies gave him security. There’s a statue to him in a town called Hannover which claims he hid there for the entirety of the nine months he disappeared. He used that time to build up a power base among oil excutives, negotiating with them in secret for better deals than his grandfather offered.
Jacopo: Did his grandfather know about him going into hiding?
Esteban: He must have figured it out. He certainly would have known that his grandson survived the attack. My guess is that he welcomed the development of the Prince going into hiding. The world would think he was dead, and he could keep his more conservative relatives at bay.
Jacopo: So how did he return?
Esteban: Nobody’s quite sure. In March, he suddenly marched into Mecca on the day before the Hajj with an army of his own that numbered a hundred-thousand - mostly various African soldiers of fortune recruited by the CIA at orders that came directly from President Romney. The Prince denounced his grandfather as a tyrant and an offender against Allah. He announced in the that on the day after the Hajj’s completion, he would begin a pilgrimage by foot to Medina, and that all able-bodied Muslims were invited to join him. Five-hundred thousand Muslims, most of them Saudis, did exactly that.
Jacopo: Hold on. Wasn’t the CIA virtually blood brothers with King Abdullah?
Esteban: Yes. But the US Government also realized three things: Firstly, that the Prince could give them cover for more leverage over the price of oil. Secondly, that the Prince could be a voice of reform within Saudi Arabia who would remain friends with the US rather than an Islamic dictator who would undermine American interests. Lastly, that the Prince’s Western-Friendly image could give them a far better public relations cover for doing business with a totalitarian dictatorship than King Abdullah ever could.
Jacopo: So the Prince just stayed in Mecca during the Hajj? How could he do that without getting himself killed?
Esteban: So long as the Hajj was still going, he was protected. There was no way that King Abdullah would start a war in Islam’s holiest city during its most sacred pilgrimage.
Jacopo: But even afterward, wouldn’t King Abdullah be able to shoot the pilgrims on the way?
Esteban: That was precisely the point. The people who followed the Prince gave his forces cover. The Prince had given his army half-a-million human shields. Many families would send their disabled, their retarded and their dishonored children on this pilgrimage, assuring them that it would be the highest honor to die on a sacred pilgrimage.
Jacopo: What was the point of the pilgrimage?
Esteban: It gave the Prince time to win over as much of the Army as he could. And during that pilgrimage, 40,000 Saudi troops defected.
Jacopo: Where was the Prince’s father during all this?
Esteban: I'm sure he knew perfectly well that his son had silently been given a death sentence. But even as chief of the secret police, he was as vulnerable to the displeasure of his father as any other Saudi. King Abdullah, who feared divided loyalty, imprisoned him. He probably would have had Prince Miteb killed had Prince Abdullah bin Miteb not immediately taken to the airwaves to broadcast his father’s imprisonment to the world and publicly called for his father’s release.
Jacopo: How was Saudi oil production affected?
Esteban: Ground to a halt. Oil prices skyrocketed around the world. So long as the war continued, the price of oil went up to 450 dollars a barrel. It was yet another problem America could not easily solve. The exorbitant price of oil was one of the four factors, and certainly the most forseeable, that contributed to the United States's fall.
Jacopo: So how did the price of oil stay so high even after the war was over?
Esteban: Realizing that his grandson was advancing, King Abdullah gave orders to torch every single oil well from which his forces had to retreat. Following the first round of burned rigs, President Romney immediately diverted forces from Iraq into Saudi Arabia, who would invade Riyadh from the South while the Prince advanced from the North. Just as it had in Iraq, the illusion of immediate victory was far too powerful to resist. Rather than immediately overtaking the oil rigs, the King ordered a full retreat from the South and burned all the oil in that side of the country as well. The war ended in five months, but in that time a million Saudi’s died and its oil reserves went from 70 years to only 30.
Jacopo: Did this have remifications in the Middle East?
Esteban: Oh yes. The primary legacy of the Saudi Civil War was that it killed all hope for democracy taking hold in the Middle East. This was a revolution of elite against elite, with only the most marginal changes taking place. Every bloody-minded adviser to an Arab ruler now saw a way to manipulate the Western press. They would simply denounce the human rights violations of the current president and promise better. The Western Media would trumpet these aspiring butchers as the savior of their country. And since the most young Arabs wanted a leader that would emulate the Western governments, they would be swindled into supporting a more ruthess leader than they could ever dream. And these new rulers would invariably consolidate far more power than their predecessors ever did. Anyway, that is the story of the Saudi Civil War.
Jacopo: You told it very thoroughly.
Esteban: I know. Old men like telling long stories. And I think all this detail is important. Without it, it’s just a series of events with no real consequence.
Jacopo: I see what you mean. Would you like to break for dinner?
Esteban: Certainly, we can resume later tonight or perhaps tomorrow.
Esteban: Not so fast. First we have to cover the conditions that lead up to it. And you can’t do that without talking about the Four Civil Wars of 2013.
Jacopo: Oh yes, didn’t you ask Bubbie to marry you while watching the Pakistani massacres on television?
Esteban: I was a true romantic.
Jacopo: Must have been an exciting day for everybody.
Esteban: Bliss was it in that dawn to be alive.
Jacopo: But weren’t there other civil wars going on already?
Esteban: Yes there were. But those were, at least in retrospect, much slower conflicts. They took longer to erupt, longer to fight and longer to resolve. The Libyan civil war dragged on for twenty years. Neither Sarkozy, nor Le Pen nor Blair could effectively withdraw from France's Libyan strongholds without inviting Mutassim Qaddafi to invade all of Southern France.
Jacopo: I thought Qaddafi fils had only conquered the French coast.
Esteban: Indeed he had. Marseilles, Montpellier, Antibes, Cannes, Arles, Nice, Perpignan, Lourdes, Toulon and Toulouse had all fallen. And all non-Muslim residents of those cities were confined to ghettos. But Lyon, Aix-en-Provence and Saint Etienne were thought to be next and were completely evacuated. But the masterstroke was to arrange a deal with Parisian mullahs to bus rioters in from Paris with the express purpose of torching France’s entire Southern countryside to the ground. And with that, half of France’s wine industry was gone forever.
Jacopo: Neither I nor my kids will never know what real Champagne tastes like.
Esteban: Or Armagnac, or Beaujolais, or Chablis, or Chateau, or Cremant de Limoux, or Cotes du Gascogne, or Premier Cru.
Jacopo: I thought you didn’t care for wine.
Esteban: I like to have the option.
Jacopo: But most of this was already in the later part of the decade.
Esteban: Exactly. The Libyan conflict simmered while the conflicts of China, Pakistan, Saudi Arabia and Mexico exploded. And with them the stage was set for the larger conflicts which soon engulfed us all.
Jacopo: How did they set the stage?
Esteban: The Chinese conflict slowed manufacturing across the world to a crawl. The Pakistani conflict set loose nuclear weapons to any country who wanted one. The Saudi conflict set the price of oil at unimagined levels. The Mexico conflict set the United States on an irreversable path toward authoritarianism.
Jacopo: Why don’t you take us through the fundamentals of each.
Esteban: Sounds great. Why don’t we take this in chronological order. We’ll begin in the Saudi Civil War, which began with the attempt on Prince Abdullah bin Miteb’s life in February of 2013.
Jacopo: This was right in the middle of the Arab Spring. Was it not?
Esteban: Absolutely. The dictatorships of Tunisia and Egypt fell in 2010, and Yemen’s had fallen in September of the next year. By February 2012, the Hariri-Jumblatt alliance had succeeded temporarily in ridding itself of Hezbollah and Syrian influence. We thought it was permanent at the time, but the revolution was stopped in its tracks by a Saudi Prince who was very popular in the West for a brief period.
Jacopo: Abdullah bin Miteb. If I’m not mistaken he’s still the Saudi king.
Esteban: He’s completely senile now and the whole kingdom is waiting for him to die so that the Saudi Central Committee can govern openly.
Jacopo: How did he come to power?
Esteban: During my childhood, Saudi Arabia may have been the very worst of the world’s dictatorships. Even worse than North Korea. The educated population of Saudis consisted almost entirely of its Royal Family, which numbered roughly 7,000 people who divided the spoils of Saudi oil wells between them. Until all too recently, if you were not a member of the Royal Family, your only hope for advancement was to join the army. The other twenty-million Saudis were kept in the most abject squalor imaginable, often tortured, maimed and killed for the slightest possible offenses. Furthermore, the succession issues in Saudi Arabia were always a terrible burden. Most kingdoms are inherited through patrilineal descent. Meaning that the oldest son inherits the thrown from a King who was himself an oldest son. But Saudi succession is fratrilineal - meaning brother to brother. Which makes the succession far more confusing and the kings - who inherit the throne at a far older age - far more prone to conservatism. Since the original Saudi King, Abdul Aziz ibn Saud, had 45 sons, questions of succession were always strife-filled affairs. But never moreso than the succession from Abdullah to Abdullah bin Miteb.
Jacopo: Wasn’t there once a close relationship between them?
Esteban: Clearly. Abdullah bin Miteb was the grandson of King Abdullah. His father was Miteb bin Abdullah, the commander of the Saudi National Guard, which was the Saudi secret police. The King saw potential for his grandson to become the Western face of Saudi Arabia. He was articulate, handsome, intelligent and English-educated. He was a public relations dream and his grandfather quickly saw that bin Miteb was the best possible spokesman for the Saudi family in the international press.
Jacopo: And not realizing that he was raising a rival.
Esteban: Being a dictator requires living in a bubble. People are too scared to tell you obvious truths because if a person displeases you, you can simply have him killed or his family tortured. Abdullah thought his grandson would be loyal to him simply because he had plucked him out of relative obscurity for an important role. But what the King failed to realize that featuring one grandson so prominently in the international press might arouse the suspicion of his brothers and cousins.
Jacopo: Was it simply a question of jealousy?
Esteban: Not at all, though I don’t doubt that envy was an important contributor. But the most important factor was that many Saudi princes resented one of their own being so lauded in the West for so many untraditional practices. He’d be featured on American television claiming that the United States is a great friend to Islam, in style section photographs with beautiful film stars, on film at Women’s Tennis matches and shaking hands with Israeli ministers. This was too much for many of his more traditional relatives. In a sense, he may have been forced into rebellion because he came to represent Western Decadence to so many reactionary elements. Even with his father heading the secret police, there was simply no way he could have felt safe.
Jacopo: Which of course led to that famous assassination attempt in Paris.
Esteban: Yes, but what was incredible was that he survived at all. He was in the penthouse at L’Hotel de Crillon with some rich French girl whose name escapes me. They were apparently drunk and the Prince’s guards were outside the door. The assassin was hiding in the closet with a shotgun. The poor girl apparently spotted the assassin from the creak in the door, and screamed right before she was shot - killed instantly with one bullet. The guards were quick enough to knock down the assassin before he got to the Prince, who immediately hit the ground and hid underneath his bed.
Jacopo: Does anyone know who ordered the hit?
Esteban: It probably doesn’t matter. It honestly could have been one of a dozen relatives. In any event, King Abdullah wanted to hush the matter up entirely. But I think the Prince correctly interpreted the coverup as a death sentence. So he had a press contact report to al-Jezeera that he was dead, and for about nine months went into hiding.
Jacopo: Where did he hide?
Esteban: Rural Texas apparently. Some oil buddies gave him security. There’s a statue to him in a town called Hannover which claims he hid there for the entirety of the nine months he disappeared. He used that time to build up a power base among oil excutives, negotiating with them in secret for better deals than his grandfather offered.
Jacopo: Did his grandfather know about him going into hiding?
Esteban: He must have figured it out. He certainly would have known that his grandson survived the attack. My guess is that he welcomed the development of the Prince going into hiding. The world would think he was dead, and he could keep his more conservative relatives at bay.
Jacopo: So how did he return?
Esteban: Nobody’s quite sure. In March, he suddenly marched into Mecca on the day before the Hajj with an army of his own that numbered a hundred-thousand - mostly various African soldiers of fortune recruited by the CIA at orders that came directly from President Romney. The Prince denounced his grandfather as a tyrant and an offender against Allah. He announced in the that on the day after the Hajj’s completion, he would begin a pilgrimage by foot to Medina, and that all able-bodied Muslims were invited to join him. Five-hundred thousand Muslims, most of them Saudis, did exactly that.
Jacopo: Hold on. Wasn’t the CIA virtually blood brothers with King Abdullah?
Esteban: Yes. But the US Government also realized three things: Firstly, that the Prince could give them cover for more leverage over the price of oil. Secondly, that the Prince could be a voice of reform within Saudi Arabia who would remain friends with the US rather than an Islamic dictator who would undermine American interests. Lastly, that the Prince’s Western-Friendly image could give them a far better public relations cover for doing business with a totalitarian dictatorship than King Abdullah ever could.
Jacopo: So the Prince just stayed in Mecca during the Hajj? How could he do that without getting himself killed?
Esteban: So long as the Hajj was still going, he was protected. There was no way that King Abdullah would start a war in Islam’s holiest city during its most sacred pilgrimage.
Jacopo: But even afterward, wouldn’t King Abdullah be able to shoot the pilgrims on the way?
Esteban: That was precisely the point. The people who followed the Prince gave his forces cover. The Prince had given his army half-a-million human shields. Many families would send their disabled, their retarded and their dishonored children on this pilgrimage, assuring them that it would be the highest honor to die on a sacred pilgrimage.
Jacopo: What was the point of the pilgrimage?
Esteban: It gave the Prince time to win over as much of the Army as he could. And during that pilgrimage, 40,000 Saudi troops defected.
Jacopo: Where was the Prince’s father during all this?
Esteban: I'm sure he knew perfectly well that his son had silently been given a death sentence. But even as chief of the secret police, he was as vulnerable to the displeasure of his father as any other Saudi. King Abdullah, who feared divided loyalty, imprisoned him. He probably would have had Prince Miteb killed had Prince Abdullah bin Miteb not immediately taken to the airwaves to broadcast his father’s imprisonment to the world and publicly called for his father’s release.
Jacopo: How was Saudi oil production affected?
Esteban: Ground to a halt. Oil prices skyrocketed around the world. So long as the war continued, the price of oil went up to 450 dollars a barrel. It was yet another problem America could not easily solve. The exorbitant price of oil was one of the four factors, and certainly the most forseeable, that contributed to the United States's fall.
Jacopo: So how did the price of oil stay so high even after the war was over?
Esteban: Realizing that his grandson was advancing, King Abdullah gave orders to torch every single oil well from which his forces had to retreat. Following the first round of burned rigs, President Romney immediately diverted forces from Iraq into Saudi Arabia, who would invade Riyadh from the South while the Prince advanced from the North. Just as it had in Iraq, the illusion of immediate victory was far too powerful to resist. Rather than immediately overtaking the oil rigs, the King ordered a full retreat from the South and burned all the oil in that side of the country as well. The war ended in five months, but in that time a million Saudi’s died and its oil reserves went from 70 years to only 30.
Jacopo: Did this have remifications in the Middle East?
Esteban: Oh yes. The primary legacy of the Saudi Civil War was that it killed all hope for democracy taking hold in the Middle East. This was a revolution of elite against elite, with only the most marginal changes taking place. Every bloody-minded adviser to an Arab ruler now saw a way to manipulate the Western press. They would simply denounce the human rights violations of the current president and promise better. The Western Media would trumpet these aspiring butchers as the savior of their country. And since the most young Arabs wanted a leader that would emulate the Western governments, they would be swindled into supporting a more ruthess leader than they could ever dream. And these new rulers would invariably consolidate far more power than their predecessors ever did. Anyway, that is the story of the Saudi Civil War.
Jacopo: You told it very thoroughly.
Esteban: I know. Old men like telling long stories. And I think all this detail is important. Without it, it’s just a series of events with no real consequence.
Jacopo: I see what you mean. Would you like to break for dinner?
Esteban: Certainly, we can resume later tonight or perhaps tomorrow.
800 Words: The Weekend America was Young - Interlude 1
Jacopo: So I’m going to ask the question now that everybody always asks - was there any way America‘s fall could have been avoided?
Esteban: The older I get and the more I think about it, the more inclined I am to think it was inevitable. By the end of the Bush era, America’s deficit spending was such that there was simply no way to evade a great reckoning. Even if the debt ceiling raise had not been filibustered, the bill that came through the Senate was so unsatisfactory, such a hollow shell of what was necessary to fix America‘s problems, that there was simply no way for it to inspire anything but terror in the markets.
Jacopo: At the time, a lot of liberals howled about how spineless Obama was that he’d capitulate on so many social programs.
Esteban: What in god’s name was he supposed to do? Even after having made enormous concessions on every single aspect of the bill, it still arrived in congress with less than 48 hours to spare, and it was still not enough for the Tea Party.
Jacopo: What was your feeling about Obama in those years?
Esteban: Always improving. I was about the only person who was not at all impressed with Obama during his primary campaign. I voted for him, but I feared the movement of change at his back. Fortunately, these were all the same people who shouted bloody murder when Obama seemed to be up to the practical compromises which every great leader must make to govern. Obama showed no remorse about leaving the progressive left at the altar. Whatever it took to win, Obama showed the stomach to follow through .The battles he did not win could not have been won by anyone else. As his presdiency became more bedraggled, the enormity of opposition to him became ever more clear. I couldn’t help but admire him more and more.
Jacopo: Do you think Obama was not a man of the left in those years?
Esteban: Oh I very much think he was. But he was not a man of the pseudo-left. It’s one of the great ironies of American History that Franklin Roosevelt’s name would be invoked so often as a stick to beat Obama. Seventy years before all this, the hard-line social progressives would batter Franklin Roosevelt with Abraham Lincoln’s name in precisely the same way. And seventy years before Roosevelt, abolitionists would batter Lincoln’s name with…I have no idea who. But unlike Jimmy Carter, both Roosevelt and Obama were far more interested in the realities of what government requires than in losing battles to demonstrate a show of principle.
Jacopo: Was there any way he could have prevented the slow-motion economic collapse that followed?
Esteban: I never saw the way. You cannot move the world out of an economic depression without trillions of dollars of deficit spending. You cannot pay off trillions of dollars in debt without incurring an economic depression, let alone tens of trillions. After two-and-a-half years in which Obama opted for saving the economy over paying the debt, our country was teetering on the edge of the exact same depression. He had to try the other option.
Jacopo: How did our family do in those years.
Esteban: I was, as always, the Cassandra of the familly- warning them that America was on the verge of something very grave. But I remember the exact moment when they came over to my point of view. Immediately upon returning from Rhode Island, we went on a Real Estate trip to Florida, It was in the airport that we found out about Rand Paul’s filibuster. Still, we hoped, there was a chance that Paul might relent if offered a better deal. Obama probably offered him one. But he was not interested in fixing the problem. On August 4th, the day after America lost its credit rating, we heard over the car radio that the Dow Jones Industrial Average had sunk 20% in two days in addition to the 11% in the eight days before. This meant that the market had already fallen 31% in ten days. All four of us immediately realized the consequences. America had a choice that could only have happened in a world that takes pleasure in dancing on a volcano: Either America pays off the debt, or spend all the money from the raised debt ceiling at once. The former would certainly ruin the world economy. The latter might also ruin the world economy, and it would also put America another 2 trillion dollars in debt.
Jacopo: Was this choice the Paul family’s goal?
Esteban: Absolutely. For Sodom to burn. And to replace it with a purer state.
Jacopo: Did the Paul family have any larger goals than the destruction of the financial markets?
Esteban: Of course they had goals. But their goals were impossible. The Paul family was as devoutly religious a family as American politics had ever produced. But rather than Christ they worshipped the free market. They believed that Gold was the only durable asset, and that the worth of all paper money would eventually collapse to nothing. They believed that lower taxes would cause larger revenues from the government because people would have more incentive to work harder. They believed that once America was forced to deal immediately with its debt, the world would learn to live within its means and economic recessions would be a thing of the past. They believed that once government would stop trying to regulate industry, businesses would police themselves far more effectively from excess. Because if they didn’t, the free market would simply provide a new company which kept its worst excesses in check.
Jacopo: It’s difficult to believe that these beliefs were widespread just 60 years ago.
Esteban: I wish I could say that people have evolved past the libertarian sensibility. But human nature never changes. If a person wants to be stupid, he will find a way. There are beliefs today that are easily as dumb and dangerous as the Libertarian mindset. And before the rise of the Tea Party, Libertarianism had a certain cache. There was even a movement that emerged in the late Bush years to merge liberalism and libertarianism.
Jacopo: One would think they’d be mutually exclusive.
Esteban: Over the years, a lot of dumb movements have allied themselves with liberalism. But every one of them has fizzled out. The meaning of liberalism itself has mutated all throughout its history, because it absorbs the best lessons from more rigid ideologies as it goes. The reason it’s so mutable is because it doesn’t believe much of anything. It’s only belief is ‘whatever works.’ Any true liberal has only one belief when it comes to politics: the greatest possible happiness for the greatest possible number of people. So far, most of the evidence points to political freedom, programs for social welfare, regulated capitalism, democratic governance and sound functions of government. But if truly compelling evidence demonstrated that a corrupt authoritarian system provided the greatest possible happiness, we’d probably support that too.
Jacopo: Well, from the way you describe it, you’d think that all the same things could be said of conservatism.
Esteban: How do you mean?
Jacopo: Hasn’t conservatism gone through hundreds of years, maybe thousands, of even faster mutations? Conservatism never means the same thing from decade to decade, yet from year to year it always stays a consistent force.
Esteban: Well, yes that’s absolutely true. But conservatism isn’t concerned with practical applications of solutions. It is concerned with preserving solutions that already worked. If ‘Whatever Works’ is the motto of liberalism, ‘Whatever Worked’ is conservatism’s equivalent motto. This makes conservatism a far easier ideology, because it never has to concern itself with new solutions that might work better. But a great society still has a place for principled conservatism.
Jacopo: You almost sound like you approve of them.
Esteban: I’ve always respected a certain kind of conservative. There should always be respect the preservation of tradition, the reverence of responsibility and the obligation they feel to serve their great institutions. That’s the conservatism of Teddy Roosevelt, Churchill, de Gaulle, Eisenhower, Adenauer, Lech Walesa, and John McCain. For my own taste, they are the ideal opposition voice in a great society.
Jacopo: It’s amazing to me that in his 80’s, John McCain became Obama’s most effective advocate.
Esteban: History out-ironizes every hipster.
Jacopo: What’s a hipster?
Esteban: Never mind.
Jacopo: So.... in your view there are two conservative strains?
Esteban: Well, if you’re going to divide conservatism, then there are at least two. But if you would bifurcate conservatism, then you would have to do the same with liberalism. There’s the liberalism strain which is concerned solely with the practical solutions of government. I’ll use some strictly twentieth century examples to illustrate this. You’d find leaders like Roosevelt, Truman, Clinton, Blair, Lloyd George, Mandela, Ben-Gurion, Atlee, Nehru, Rabin, and Rathenau. These are leaders who would try anything at all to get the best possible solution. Then there’s the progressive strain, which is more concerned with adhering to moral absolutes than the practical compromises you have to make while governing. In this camp you’d find leaders like Gandhi, Jimmy Carter, Allende, Ehud Barak, Willy Brandt, Harold Wilson, and in their own weird ways, Woodrow Wilson and Lyndon Johnson. And in the same way that liberalism can curdle into progressivism, conservatism can curdle into a kind of religion.
Jacopo: What kind of religion?
Esteban: Any kind of religion to which they can latch on: the religion of the free market, the religion of monarchy, the religion of family values, the religion of pre-emptive war. In this way, Libertarians, monarchists, Christianists and neo-conservatives were all various types of the same kind of conservative. Whereas progressives view institutions as something that should be blown up, religious conservatives view their institutions as something that should control all of our lives and that must always be defended from being moved an inch.
Jacopo: Does this make conservatism more predisposed towards authoritarianism than liberalism?
Esteban: Maybe a little bit, but only a little. And if ideology makes conservatives more predisposed to authoritarianism, then it also makes liberals more predisposed to terrorism. One of the ironies of American history is that in spite of so many people identifying themselves as progressive, an American progressive movement never got off the ground for more than a few years at a time. Whereas no matter how many times religious conservativism is discredited, the cohesion of their movements never seems to go away. After the McCarthy hearings, it was rightly thought that hard-right conservativism was finished for good. But two years later, William F. Buckley founded a hard-right-wing magazine called The National Review, and it became easily the most influential political journal of the twentieth century. Y’know...we’ve gotten very far off-topic.
Jacopo: I know. Would you like a late lunch?
Esteban: I’d be delighted.
Esteban: The older I get and the more I think about it, the more inclined I am to think it was inevitable. By the end of the Bush era, America’s deficit spending was such that there was simply no way to evade a great reckoning. Even if the debt ceiling raise had not been filibustered, the bill that came through the Senate was so unsatisfactory, such a hollow shell of what was necessary to fix America‘s problems, that there was simply no way for it to inspire anything but terror in the markets.
Jacopo: At the time, a lot of liberals howled about how spineless Obama was that he’d capitulate on so many social programs.
Esteban: What in god’s name was he supposed to do? Even after having made enormous concessions on every single aspect of the bill, it still arrived in congress with less than 48 hours to spare, and it was still not enough for the Tea Party.
Jacopo: What was your feeling about Obama in those years?
Esteban: Always improving. I was about the only person who was not at all impressed with Obama during his primary campaign. I voted for him, but I feared the movement of change at his back. Fortunately, these were all the same people who shouted bloody murder when Obama seemed to be up to the practical compromises which every great leader must make to govern. Obama showed no remorse about leaving the progressive left at the altar. Whatever it took to win, Obama showed the stomach to follow through .The battles he did not win could not have been won by anyone else. As his presdiency became more bedraggled, the enormity of opposition to him became ever more clear. I couldn’t help but admire him more and more.
Jacopo: Do you think Obama was not a man of the left in those years?
Esteban: Oh I very much think he was. But he was not a man of the pseudo-left. It’s one of the great ironies of American History that Franklin Roosevelt’s name would be invoked so often as a stick to beat Obama. Seventy years before all this, the hard-line social progressives would batter Franklin Roosevelt with Abraham Lincoln’s name in precisely the same way. And seventy years before Roosevelt, abolitionists would batter Lincoln’s name with…I have no idea who. But unlike Jimmy Carter, both Roosevelt and Obama were far more interested in the realities of what government requires than in losing battles to demonstrate a show of principle.
Jacopo: Was there any way he could have prevented the slow-motion economic collapse that followed?
Esteban: I never saw the way. You cannot move the world out of an economic depression without trillions of dollars of deficit spending. You cannot pay off trillions of dollars in debt without incurring an economic depression, let alone tens of trillions. After two-and-a-half years in which Obama opted for saving the economy over paying the debt, our country was teetering on the edge of the exact same depression. He had to try the other option.
Jacopo: How did our family do in those years.
Esteban: I was, as always, the Cassandra of the familly- warning them that America was on the verge of something very grave. But I remember the exact moment when they came over to my point of view. Immediately upon returning from Rhode Island, we went on a Real Estate trip to Florida, It was in the airport that we found out about Rand Paul’s filibuster. Still, we hoped, there was a chance that Paul might relent if offered a better deal. Obama probably offered him one. But he was not interested in fixing the problem. On August 4th, the day after America lost its credit rating, we heard over the car radio that the Dow Jones Industrial Average had sunk 20% in two days in addition to the 11% in the eight days before. This meant that the market had already fallen 31% in ten days. All four of us immediately realized the consequences. America had a choice that could only have happened in a world that takes pleasure in dancing on a volcano: Either America pays off the debt, or spend all the money from the raised debt ceiling at once. The former would certainly ruin the world economy. The latter might also ruin the world economy, and it would also put America another 2 trillion dollars in debt.
Jacopo: Was this choice the Paul family’s goal?
Esteban: Absolutely. For Sodom to burn. And to replace it with a purer state.
Jacopo: Did the Paul family have any larger goals than the destruction of the financial markets?
Esteban: Of course they had goals. But their goals were impossible. The Paul family was as devoutly religious a family as American politics had ever produced. But rather than Christ they worshipped the free market. They believed that Gold was the only durable asset, and that the worth of all paper money would eventually collapse to nothing. They believed that lower taxes would cause larger revenues from the government because people would have more incentive to work harder. They believed that once America was forced to deal immediately with its debt, the world would learn to live within its means and economic recessions would be a thing of the past. They believed that once government would stop trying to regulate industry, businesses would police themselves far more effectively from excess. Because if they didn’t, the free market would simply provide a new company which kept its worst excesses in check.
Jacopo: It’s difficult to believe that these beliefs were widespread just 60 years ago.
Esteban: I wish I could say that people have evolved past the libertarian sensibility. But human nature never changes. If a person wants to be stupid, he will find a way. There are beliefs today that are easily as dumb and dangerous as the Libertarian mindset. And before the rise of the Tea Party, Libertarianism had a certain cache. There was even a movement that emerged in the late Bush years to merge liberalism and libertarianism.
Jacopo: One would think they’d be mutually exclusive.
Esteban: Over the years, a lot of dumb movements have allied themselves with liberalism. But every one of them has fizzled out. The meaning of liberalism itself has mutated all throughout its history, because it absorbs the best lessons from more rigid ideologies as it goes. The reason it’s so mutable is because it doesn’t believe much of anything. It’s only belief is ‘whatever works.’ Any true liberal has only one belief when it comes to politics: the greatest possible happiness for the greatest possible number of people. So far, most of the evidence points to political freedom, programs for social welfare, regulated capitalism, democratic governance and sound functions of government. But if truly compelling evidence demonstrated that a corrupt authoritarian system provided the greatest possible happiness, we’d probably support that too.
Jacopo: Well, from the way you describe it, you’d think that all the same things could be said of conservatism.
Esteban: How do you mean?
Jacopo: Hasn’t conservatism gone through hundreds of years, maybe thousands, of even faster mutations? Conservatism never means the same thing from decade to decade, yet from year to year it always stays a consistent force.
Esteban: Well, yes that’s absolutely true. But conservatism isn’t concerned with practical applications of solutions. It is concerned with preserving solutions that already worked. If ‘Whatever Works’ is the motto of liberalism, ‘Whatever Worked’ is conservatism’s equivalent motto. This makes conservatism a far easier ideology, because it never has to concern itself with new solutions that might work better. But a great society still has a place for principled conservatism.
Jacopo: You almost sound like you approve of them.
Esteban: I’ve always respected a certain kind of conservative. There should always be respect the preservation of tradition, the reverence of responsibility and the obligation they feel to serve their great institutions. That’s the conservatism of Teddy Roosevelt, Churchill, de Gaulle, Eisenhower, Adenauer, Lech Walesa, and John McCain. For my own taste, they are the ideal opposition voice in a great society.
Jacopo: It’s amazing to me that in his 80’s, John McCain became Obama’s most effective advocate.
Esteban: History out-ironizes every hipster.
Jacopo: What’s a hipster?
Esteban: Never mind.
Jacopo: So.... in your view there are two conservative strains?
Esteban: Well, if you’re going to divide conservatism, then there are at least two. But if you would bifurcate conservatism, then you would have to do the same with liberalism. There’s the liberalism strain which is concerned solely with the practical solutions of government. I’ll use some strictly twentieth century examples to illustrate this. You’d find leaders like Roosevelt, Truman, Clinton, Blair, Lloyd George, Mandela, Ben-Gurion, Atlee, Nehru, Rabin, and Rathenau. These are leaders who would try anything at all to get the best possible solution. Then there’s the progressive strain, which is more concerned with adhering to moral absolutes than the practical compromises you have to make while governing. In this camp you’d find leaders like Gandhi, Jimmy Carter, Allende, Ehud Barak, Willy Brandt, Harold Wilson, and in their own weird ways, Woodrow Wilson and Lyndon Johnson. And in the same way that liberalism can curdle into progressivism, conservatism can curdle into a kind of religion.
Jacopo: What kind of religion?
Esteban: Any kind of religion to which they can latch on: the religion of the free market, the religion of monarchy, the religion of family values, the religion of pre-emptive war. In this way, Libertarians, monarchists, Christianists and neo-conservatives were all various types of the same kind of conservative. Whereas progressives view institutions as something that should be blown up, religious conservatives view their institutions as something that should control all of our lives and that must always be defended from being moved an inch.
Jacopo: Does this make conservatism more predisposed towards authoritarianism than liberalism?
Esteban: Maybe a little bit, but only a little. And if ideology makes conservatives more predisposed to authoritarianism, then it also makes liberals more predisposed to terrorism. One of the ironies of American history is that in spite of so many people identifying themselves as progressive, an American progressive movement never got off the ground for more than a few years at a time. Whereas no matter how many times religious conservativism is discredited, the cohesion of their movements never seems to go away. After the McCarthy hearings, it was rightly thought that hard-right conservativism was finished for good. But two years later, William F. Buckley founded a hard-right-wing magazine called The National Review, and it became easily the most influential political journal of the twentieth century. Y’know...we’ve gotten very far off-topic.
Jacopo: I know. Would you like a late lunch?
Esteban: I’d be delighted.
Thursday, August 4, 2011
The Weekend America Was Young - Part 4
Jacopo: One of the problems with World War III was that it was truly a World War in a way which the first two were not. It wasn’t simply one side pitted against another. There were no clear sides to it.
Esteban: Absolutely. In order to understand this war, you can’t look at any of the other major conflicts of the modern era. There were no definite sides to this war, there were just a bunch of regional conflicts between powerful regional heads who were constantly shifting alliances for short-term gain. If anything, the conflicts they most resembled were the wars of the Late Middle Ages. If you wanted to find a closer parallel, you’d either have to look at medieval conflicts like the War of the Roses and the Hundred Years War or you’d have to look at minor conflicts like the Lebanese Civil War in the 1980’s and the Mexican Civil War of the early 2010’s.
Jacopo: I’m sure that no one would have called those conflicts minor at the time.
Esteban: They probably wouldn’t have. But one of the effects of a truly global village is that wars become truly global. All throughout history, wars were constantly erupting between neighbors. That old phrase, “the narcissism of small differences,” really meant something because you were living next to people who occupied the same space as you, yet had a completely different perception of the same events. But how much larger do those small differences seem in a world in which everybody becomes one another’s neighbor?
Jacopo: I’m still not sure I understand.
Esteban: OK. Here’s an example. With the famine and draught caused worldwide by radiation poisoning, control of water resources was as important as oil. Back in 2030, Saudi Arabia and the West Chinese territory of Gobi both wanted control of Lake Volta, which is still the world’s largest fresh water reservoir. They realized that the water helped their own countries to prosper, but what they really wanted was the steady stream of income that came from controlling the world’s largest reservoir. So King Abdullah bin Meteb and Governor Chen Yu issued a joint declaration of war on Ghana, whom they claimed denied them requests for assistance. There were reports of Gobi and Saudi Arabia recruiting soldiers at gunpoint. But I never believed them because that wasn’t even necessary. Most dictators had long realized that internet access gave their propaganda ministries the opportunity to install unlimited popups on people’s computers. And since neither Arabians or Gobias had ever met anyone from Ghana, their citizens might be willing to believe anything about Ghanans.
Jacopo: And once they defeated Ghana, they declared war on each other.
Esteban: Precisely. But it gets weirder. After a while, both countries had bombed most of their major cities to smithereens. But other countries still needed their water supply and were worried about one of them poisoning the reservoir. So in 2036, Haiti quietly made an offer to both countries to fight the remainder war on their territory.
Jacopo: Outsourcing battlefields?
Esteban: Exactly. If a dictator didn’t care about his people getting in the way, it was a fantastic money-maker. So for two years, both Gobians and Arabians would be flown into Haiti to fight the war on a completely unrelated battleground.
Jacopo: And things like this happened all around the globe.
Esteban: Yes they did.
Jacopo: Where was Europe during all this?
Esteban: Europe was comparatively safe during all this meshuggas. There was plenty of brutality in Europe too, but it was on a far smaller scale. Fundamentally, Europe had two problems. One was the same demographic realities they’d been dealing with since the end of the Second World War. Only the problems were far more pronounced. By 2016, the birthrates of so-called ‘Natives’ in Western Europe dipped below one child-per-family. Meanwhile, Muslims were reproducing an average well above five to a family. Furthermore, Europe had the added pressure of the Arab Spring going horribly awry. By 2015, Egyptian democracy had fallen and given way to a Muslim Brotherhood dictatorship. After America’s full withdrawal from Iraq in 2012, Iraqi democracy fell within three months to an Islamic sharia state run by Ayatollah al-Hakim. The Libyan Civil War continued for ten years after Qaddafi’s assassination by his own son and spread to the southern French coast. Turkey embroiled itself in a 40-year-long civil war that spread to Greece, Kurdistan and most of the Balkan States. But the key event to the whole Middle East came after the fall of Israel. Bashar al-Assad attempted to claim the entire state for Syria, and that finally proved his undoing.
Jacopo: You’d think that nobody would want to touch Israel with so much radiation.
Esteban: Even in irradiated form, Israel was still a disputed territory. After so much struggle and insurrection, religious Muslims could not stand the thought of a secular tyrant in Jerusalem. Assad was accused by Muslims across the world as betraying the Palestinian cause. Within six months of Assad taking Israel, Egypt bombed a palace where they knew Assad would stay.
Jacopo: Were there any Palestinians left?
Esteban: More than there were Israelis. But the Palstinians were in more horrible shape than ever. Most of the survivors of Shoah Bet were infected with radiation poisoning. And the United Nations already had far too many other worries to contribute much to the relief effort.
Jacopo: Did anyone at all come to their aid?
Esteban: Yes, actually. King Abdullah the Second of Jordan offered amnesty and care for all the people of Israel and Palestine - be they Jewish, Christian or Muslim. But in 2019, he was shot dead on national television.
Jacopo: Like an execution?
Esteban: Strangely enough, no. He was in the middle of a speech, and someone from behind the camera yelled ‘Allahu Ackbar!’ and fired three bullets before being tackled. The entire world saw footage of King Abdullah hit in the left side of his chest cavity three times.
Jacopo: He died on camera?
Esteban: No, he died three days later.
Jacopo: How did Europe avoid the brunt of all this?
Esteban: Ironically, it was mostly religion. The people of Europe did what they’ve always done and turned to God in times of fear. The European Union declared itself a single country, instituted a policy of mandatory conscription and by 2020 the pews of the churches were full again. Birthrates among families of Christian descent tripled in the years that followed. By 2050, Europe was fully 85% Christian. And after the fall of America, a full three percent Europe became Jewish again.
Jacopo: But the EU still had to deal with the issue of Russia.
Esteban: Indeed. Of all the conflicts of this period, this was the only one which resembled a 20th century stalemate. The EU and Russia fought mostly on the battlegrounds of economics. The only nuclear bomb detonation was in 2023 in the Croatian town of Dubrovnik. It was fundamentally a warning shot from Vladimir Putin over a border dispute in the Ukraine. Fortunately, Tony Blair was wise enough not to mount a retaliatory attack. One of the results of this conflict was that Blair, gave the most famous speech of our century. Every school child now memorizes the “blood begets blood” speech.
Jacopo: “For though we walk through the valley of the shadow of death, God has not, nor shall not refuse any who come to Him. Our collective grief lies all without, and these internal matters of lament are merely shadows to the all-too-forseen grief that howls from the graveyard unto the ears of our living souls....” I forget the rest.
Esteban: I still have no idea what that means, but there was not a dry eye in the entire world. The truth remains that after Obama’s death, Blair was the closest thing the world had to a conscience.
Jacopo: A thought most English would have laughed at when Blair was their Prime Minister.
Esteban: The truth is that neither side should be at all proud of their conduct during the conflict. Both Russia and the EU intentionally created blockades in Africa to create famines that might weaken the other side. But war is murder, and there is no such thing as a conflict waged by half-measures.
Jacopo: So I hesitate to ask, can you tell Alicia the story of America’s breakup and the Tacomas’s flight to America?
Esteban: Of course. But what you have to remember is that we were lucky.
Jacopo: You had foresight.
Esteban: I had lunacy.
Jacopo: You left America when no-one else would.
Esteban: It’s not foresight when you predict eight of every three democides.
Jacopo: You saved our family.
Esteban: I was a Cassandra. It was pure luck that I saw what other people didn’t. And it was purer luck that we had contacts who could get your relatives safely out of the country. I will always have guilt that I didn’t stay and try to fight when so many people I knew knew just as well what was coming.
Jacopo: And yet they stayed?
Esteban: They absolutely did. To fight a battle I should have fought with them. I offered as many people as I could to do what I could to get them out of the US before things got too rough, but they refused almost to a man. We were blessed by chance, not foresight.
Jacopo: The rest of the family was not happy with you at the time.
Esteban: Why wouldn’t they be? I dissolved a partnership with my brothers to buy Real Estate in Brazil. From the vantage point of March 2016, it seemed like a decision made on another planet.
Jacopo: Brazil was a boom economy.
Esteban: By the standards of the time, it was a still a violent, unpredictable country. My mother warned me that I would get my family killed trying to deal with Brazillian contractors.
Jacopo: How did the business succeed?
Esteban: Your Bubbie, who is much smarter than I.
Jacopo: She knew the language?
Esteban: Most educated Latin Americans of the time knew English. But she smoothed over a lot of potential conflicts with difficult business partners. I was rather hot-headed and awkward in my younger years, and could usually be counted on to say exactly the wrong thing at the wrong time. In America I would let our family use me as the principle negotiator when we wanted the other party to dislike us.
Jacopo: (laughs awkwardly) So ultimately, what was the reason you insisted on moving to Latin America in 2016?
Esteban: After the beginning of Shoah Bet, we were all afraid that war would spread. I’d like to say that it was due to my fears about what was coming in America. But the truth is that what kept me up at night was the “Extended Bank Holiday,” as it was then called. Like the rest of America, our assets were virtually frozen, and there was no guarantee that we would ever get them back. And if we ever did, we’d have lost most of our earnings. Our bread-and-butter was China, which had not had a single recession in the 35 years before its collapse.
Jacopo: With what money did you start in Brazil?
Esteban: At the beginning, we had only the money for airfare and the cash my father had insisted we bury in our back yard. I told my father and brothers that I was moving and that I would ask them to send me money whenever they could. As all family partnerships sometimes do, we all said words we didn’t mean. I knew that if they ever sent me a nickel, I’d be a lucky man indeed. But even when the holiday lifted and things were at their worst, they sent me whatever was left of my share. And that’s to their eternal credit. For about ten months I worked as a busboy in an Irish pub. Fortunately, Bubbie Tacomas had a few relatives down there and made contacts far more easily than I. She was the reason that we were able to start building in Rio. Y’know Jacopo, I’m tired again...let’s continue this in the morning.
Jacopo: No problem.
Esteban: Absolutely. In order to understand this war, you can’t look at any of the other major conflicts of the modern era. There were no definite sides to this war, there were just a bunch of regional conflicts between powerful regional heads who were constantly shifting alliances for short-term gain. If anything, the conflicts they most resembled were the wars of the Late Middle Ages. If you wanted to find a closer parallel, you’d either have to look at medieval conflicts like the War of the Roses and the Hundred Years War or you’d have to look at minor conflicts like the Lebanese Civil War in the 1980’s and the Mexican Civil War of the early 2010’s.
Jacopo: I’m sure that no one would have called those conflicts minor at the time.
Esteban: They probably wouldn’t have. But one of the effects of a truly global village is that wars become truly global. All throughout history, wars were constantly erupting between neighbors. That old phrase, “the narcissism of small differences,” really meant something because you were living next to people who occupied the same space as you, yet had a completely different perception of the same events. But how much larger do those small differences seem in a world in which everybody becomes one another’s neighbor?
Jacopo: I’m still not sure I understand.
Esteban: OK. Here’s an example. With the famine and draught caused worldwide by radiation poisoning, control of water resources was as important as oil. Back in 2030, Saudi Arabia and the West Chinese territory of Gobi both wanted control of Lake Volta, which is still the world’s largest fresh water reservoir. They realized that the water helped their own countries to prosper, but what they really wanted was the steady stream of income that came from controlling the world’s largest reservoir. So King Abdullah bin Meteb and Governor Chen Yu issued a joint declaration of war on Ghana, whom they claimed denied them requests for assistance. There were reports of Gobi and Saudi Arabia recruiting soldiers at gunpoint. But I never believed them because that wasn’t even necessary. Most dictators had long realized that internet access gave their propaganda ministries the opportunity to install unlimited popups on people’s computers. And since neither Arabians or Gobias had ever met anyone from Ghana, their citizens might be willing to believe anything about Ghanans.
Jacopo: And once they defeated Ghana, they declared war on each other.
Esteban: Precisely. But it gets weirder. After a while, both countries had bombed most of their major cities to smithereens. But other countries still needed their water supply and were worried about one of them poisoning the reservoir. So in 2036, Haiti quietly made an offer to both countries to fight the remainder war on their territory.
Jacopo: Outsourcing battlefields?
Esteban: Exactly. If a dictator didn’t care about his people getting in the way, it was a fantastic money-maker. So for two years, both Gobians and Arabians would be flown into Haiti to fight the war on a completely unrelated battleground.
Jacopo: And things like this happened all around the globe.
Esteban: Yes they did.
Jacopo: Where was Europe during all this?
Esteban: Europe was comparatively safe during all this meshuggas. There was plenty of brutality in Europe too, but it was on a far smaller scale. Fundamentally, Europe had two problems. One was the same demographic realities they’d been dealing with since the end of the Second World War. Only the problems were far more pronounced. By 2016, the birthrates of so-called ‘Natives’ in Western Europe dipped below one child-per-family. Meanwhile, Muslims were reproducing an average well above five to a family. Furthermore, Europe had the added pressure of the Arab Spring going horribly awry. By 2015, Egyptian democracy had fallen and given way to a Muslim Brotherhood dictatorship. After America’s full withdrawal from Iraq in 2012, Iraqi democracy fell within three months to an Islamic sharia state run by Ayatollah al-Hakim. The Libyan Civil War continued for ten years after Qaddafi’s assassination by his own son and spread to the southern French coast. Turkey embroiled itself in a 40-year-long civil war that spread to Greece, Kurdistan and most of the Balkan States. But the key event to the whole Middle East came after the fall of Israel. Bashar al-Assad attempted to claim the entire state for Syria, and that finally proved his undoing.
Jacopo: You’d think that nobody would want to touch Israel with so much radiation.
Esteban: Even in irradiated form, Israel was still a disputed territory. After so much struggle and insurrection, religious Muslims could not stand the thought of a secular tyrant in Jerusalem. Assad was accused by Muslims across the world as betraying the Palestinian cause. Within six months of Assad taking Israel, Egypt bombed a palace where they knew Assad would stay.
Jacopo: Were there any Palestinians left?
Esteban: More than there were Israelis. But the Palstinians were in more horrible shape than ever. Most of the survivors of Shoah Bet were infected with radiation poisoning. And the United Nations already had far too many other worries to contribute much to the relief effort.
Jacopo: Did anyone at all come to their aid?
Esteban: Yes, actually. King Abdullah the Second of Jordan offered amnesty and care for all the people of Israel and Palestine - be they Jewish, Christian or Muslim. But in 2019, he was shot dead on national television.
Jacopo: Like an execution?
Esteban: Strangely enough, no. He was in the middle of a speech, and someone from behind the camera yelled ‘Allahu Ackbar!’ and fired three bullets before being tackled. The entire world saw footage of King Abdullah hit in the left side of his chest cavity three times.
Jacopo: He died on camera?
Esteban: No, he died three days later.
Jacopo: How did Europe avoid the brunt of all this?
Esteban: Ironically, it was mostly religion. The people of Europe did what they’ve always done and turned to God in times of fear. The European Union declared itself a single country, instituted a policy of mandatory conscription and by 2020 the pews of the churches were full again. Birthrates among families of Christian descent tripled in the years that followed. By 2050, Europe was fully 85% Christian. And after the fall of America, a full three percent Europe became Jewish again.
Jacopo: But the EU still had to deal with the issue of Russia.
Esteban: Indeed. Of all the conflicts of this period, this was the only one which resembled a 20th century stalemate. The EU and Russia fought mostly on the battlegrounds of economics. The only nuclear bomb detonation was in 2023 in the Croatian town of Dubrovnik. It was fundamentally a warning shot from Vladimir Putin over a border dispute in the Ukraine. Fortunately, Tony Blair was wise enough not to mount a retaliatory attack. One of the results of this conflict was that Blair, gave the most famous speech of our century. Every school child now memorizes the “blood begets blood” speech.
Jacopo: “For though we walk through the valley of the shadow of death, God has not, nor shall not refuse any who come to Him. Our collective grief lies all without, and these internal matters of lament are merely shadows to the all-too-forseen grief that howls from the graveyard unto the ears of our living souls....” I forget the rest.
Esteban: I still have no idea what that means, but there was not a dry eye in the entire world. The truth remains that after Obama’s death, Blair was the closest thing the world had to a conscience.
Jacopo: A thought most English would have laughed at when Blair was their Prime Minister.
Esteban: The truth is that neither side should be at all proud of their conduct during the conflict. Both Russia and the EU intentionally created blockades in Africa to create famines that might weaken the other side. But war is murder, and there is no such thing as a conflict waged by half-measures.
Jacopo: So I hesitate to ask, can you tell Alicia the story of America’s breakup and the Tacomas’s flight to America?
Esteban: Of course. But what you have to remember is that we were lucky.
Jacopo: You had foresight.
Esteban: I had lunacy.
Jacopo: You left America when no-one else would.
Esteban: It’s not foresight when you predict eight of every three democides.
Jacopo: You saved our family.
Esteban: I was a Cassandra. It was pure luck that I saw what other people didn’t. And it was purer luck that we had contacts who could get your relatives safely out of the country. I will always have guilt that I didn’t stay and try to fight when so many people I knew knew just as well what was coming.
Jacopo: And yet they stayed?
Esteban: They absolutely did. To fight a battle I should have fought with them. I offered as many people as I could to do what I could to get them out of the US before things got too rough, but they refused almost to a man. We were blessed by chance, not foresight.
Jacopo: The rest of the family was not happy with you at the time.
Esteban: Why wouldn’t they be? I dissolved a partnership with my brothers to buy Real Estate in Brazil. From the vantage point of March 2016, it seemed like a decision made on another planet.
Jacopo: Brazil was a boom economy.
Esteban: By the standards of the time, it was a still a violent, unpredictable country. My mother warned me that I would get my family killed trying to deal with Brazillian contractors.
Jacopo: How did the business succeed?
Esteban: Your Bubbie, who is much smarter than I.
Jacopo: She knew the language?
Esteban: Most educated Latin Americans of the time knew English. But she smoothed over a lot of potential conflicts with difficult business partners. I was rather hot-headed and awkward in my younger years, and could usually be counted on to say exactly the wrong thing at the wrong time. In America I would let our family use me as the principle negotiator when we wanted the other party to dislike us.
Jacopo: (laughs awkwardly) So ultimately, what was the reason you insisted on moving to Latin America in 2016?
Esteban: After the beginning of Shoah Bet, we were all afraid that war would spread. I’d like to say that it was due to my fears about what was coming in America. But the truth is that what kept me up at night was the “Extended Bank Holiday,” as it was then called. Like the rest of America, our assets were virtually frozen, and there was no guarantee that we would ever get them back. And if we ever did, we’d have lost most of our earnings. Our bread-and-butter was China, which had not had a single recession in the 35 years before its collapse.
Jacopo: With what money did you start in Brazil?
Esteban: At the beginning, we had only the money for airfare and the cash my father had insisted we bury in our back yard. I told my father and brothers that I was moving and that I would ask them to send me money whenever they could. As all family partnerships sometimes do, we all said words we didn’t mean. I knew that if they ever sent me a nickel, I’d be a lucky man indeed. But even when the holiday lifted and things were at their worst, they sent me whatever was left of my share. And that’s to their eternal credit. For about ten months I worked as a busboy in an Irish pub. Fortunately, Bubbie Tacomas had a few relatives down there and made contacts far more easily than I. She was the reason that we were able to start building in Rio. Y’know Jacopo, I’m tired again...let’s continue this in the morning.
Jacopo: No problem.
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