Hollywood Fights Market; Market Wins

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Money Monster isn’t billed as a comedy (in fact, it’s supposed to be a thriller), but it is still one of the silliest films I’ve seen in ages.

Lee Gates (George Clooney) is a cable TV investment personality of the Jim Cramer school, with a shtick that includes dancing girls, funny hats, crazy film clips, party noisemakers, and outlandish recommendations that often turn out to be profitable investments. He doesn’t think much about his viewers’ actual profits and losses because he never sees his viewers — that is, until Kyle Budwell (Jack O’Connell) shows up on the set with a figurative axe to grind and a literal gun in his pocket. He also has a funny explosive vest to go with Lee’s funny hat. He makes Lee wear it.

We are expected to believe that Budwell, the terrorist, would be able to wander onto a live set, simply because he is dressed like a deliveryman and carries a couple of cardboard boxes.

I’ll warn you here that this review is going to contain a few spoilers, but knowing some of the plot twists is not going to ruin the film for you; it’s pretty much ruined on its own, and these are mad meanderings, not genuine twists. Besides, I don’t recommend that you waste your money or your time on this monster of a movie, and revealing some of the plot is the only way I can demonstrate to you just how silly and unbelievable the premise is.

Hollywood will go to great lengths to cast aspersions on Wall Street, business, and the free market, even greenlighting a movie with a script with more holes than a Chuck E. Cheese Whack-A-Mole (and a lot less entertaining). First we are expected to believe that Budwell, the terrorist, would be able to wander onto a live set, simply because he is dressed like a deliveryman and carries a couple of cardboard boxes. Sorry, folks, the days of Cary Grant sneaking into the boss’s office carrying a florist’s bouquet are long gone, and security at a television station is much tighter than that.

Then we are expected to believe that the cameras would continue to roll and the signal would continue to be broadcast while a lunatic holds a gun to the head of a nationally known journalist — or anyone, for that matter. Regardless of what the terrorist (and the voyeuristic television consumer) might be demanding, someone — anyone — would have pulled that plug immediately.

We are also expected to believe that Kyle invested all his money — all his money — in a single hedge fund. The SEC has rules about that. Under the Dodd-Frank Act, “qualified investors” must have a net worth of at least a million dollars, not counting their personal residence, or an income of at least $200,000, in order to purchase shares in risky investment vehicles such as the one in the script. Kyle makes $14 an hour as a sanitation worker. He is not a qualified investor. The hedge fund would not have accepted Kyle’s money. George Clooney and Jodie Foster (the film’s director) probably don’t realize this because they have managers who invest their money for them. They’re qualified investors; they just aren’t qualified to play with investors in the movies.

Next is Lee Gates’ ridiculous solution to Kyle’s problem. It seems that Kyle invested his money in a hedge fund that Lee recommended a few weeks ago, and the fund’s price tanked, taking Kyle’s money with it. Lee turns to the camera and asks his viewers to start buying the stock in order to pump up the price for Kyle and his fellow losers. First, viewers would smell a rat if a showman like Gates made such an outlandish plea. Remember Soupy Sales? “Kids, take a dollar out of your mother’s purse and send it to Soupy at this address . . .”

Kyle's girlfriend bawls him out and dares him to pull the trigger on the bomb — while she is in the studio. Who in the world would be that crazy?

More importantly, Lee’s idea wouldn’t help Kyle or the others who have lost money, even if the stock did return to previous levels. Stock prices rise and fall as new buyers purchase shares from current owners. It’s the ultimate example of supply and demand. In this case, the people who sold on the way down don’t own any shares anymore, so they aren’t going to get their money back, even if prices climb to the sky. They’re just going to feel worse. The only people who could make money on Lee’s new deal are the ones who buy at the bottom and sell at the new top. And believe me, Lee Gates would be investigated for investment fraud after these shenanigans were over. (Assuming he made it out of the exploding vest in one piece.)

The cops are just as stupid. They bring Kyle’s girlfriend to the studio to talk some sense into him and calm him down, even though they know she’s fit to be tied about him. And she’s just as stupid. Instead of calming him down, she bawls him out and dares him to pull the trigger on the bomb — while she is in the studio. Who in the world would be that crazy? And then there is the usual Hollywood inanity of having SWAT teams or, in this case, bomb squads enter a highly volatile location without wearing helmets. I know, it’s a film technique considered necessary so that we (the audience) can see their pretty faces while they talk.

In such situations, we’re supposed to suspend our disbelief, and usually I do. But in this movie my disbelief was suspended so far above reality that I became positively giddy from lack of oxygen.

The denouement is just as ridiculous as the build-up. We are supposed to believe that the greedy director of the hedge fund has manipulated a mining strike in South Africa in order to buy low and then sell high when the strike is called off, but a glitch in his plan resulted in a loss of $800,000,000. That’s a lot of platinum for two weeks’ digging.

I’m sure that George Clooney, who produced the film as well as starred in it, thinks he’s doing the world a big favor by pointing out the evils of greed and investing, but all he did with Money Monster is point out his own monstrous ignorance. He still has the dark swoony eyes, though. Maybe he should leave the social justice films for a while and make a nice romantic comedy.


Editor's Note: Review of "Money Monster," directed by Jodie Foster. Tristar Pictures, 2016, 98 minutes.



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The Greek Mystique

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I’m not an economist. I may have gotten my figures wrong. I may have gotten my economic history wrong. But it seems to me that Greece, population 11 million, has defaulted on about $100 billion worth of emergency loans that were made to cover its inability to pay off even larger loans. It also seems to me that the money that was loaned went to sustain a pension system that enabled people — almost half of them government employees — to retire at an absurdly early age, and at a still more absurd age if they worked at hundreds of “hazardous” occupations, such as beautician and radio announcer. And it now appears that while taking emergency loans to enable it to get through a “tough” period of “austerity” mandated by its fiendish creditors, Greece actually added 70,000 workers to the government payroll.

In response to the awful suffering imposed on them from beyond, Greeks went to the polls on Sunday and passed a referendum encouraging their government to demand yet more money from their creditors, with the stipulation that Greeks themselves would do nothing “further” to economize. The referendum won by a landslide. The human pebbles who slid down the electoral hill apparently believed that the people who loaned them money were exploiting them by expecting them to honor some part of their agreements.

The Greek government will now demand that a large portion of its debt be “written down”; in other words, that Greece be licensed simply to keep the money it was loaned and now refuses to pay back. In support of this idealistic notion, many of the pebbles took to the streets, indignantly proclaiming that “Greeks are not beggars!” They are right; there are other words for what they are — or, more properly, for how they’re acting. It’s a fine illustration of the way in which normal, decent people turn into ne’er-do-wells and conmen at the polls. The first victims of the conmen are themselves. They convince themselves that they are acting decently — indeed, that they are impelled by a righteous cause.

hile taking emergency loans to enable it to get through a “tough” period of “austerity” mandated by its fiendish creditors, Greece actually added 70,000 workers to the government payroll.

We’ll see whether Greece will continue to find European financial agencies that are silly enough to provide more money, on the Greeks’ own terms. Maybe it will. In Europe, there are two suckers born every minute.

Others besides me have commented on these matters, and I’ve read a lot of their comments. But so far I haven’t encountered a certain kind of comment. It seems to me an obvious one to make, but it isn’t being made. So I’ll make it.

When we talk about “European” loans to “Greece,” we must remember that we are talking about money that governments and government-sponsored banks have arranged to cover the debts of Greek official institutions. No private individual would make loans like this, unless he was figuring on some government covering his ass. In Greece itself, no private individual would do that.It’s like the California “bullet train”: it’s supposed to be a wonderful investment, but somehow, not a penny of private money has ever been invested in it.

If there is a better argument against centralized economic decisions, I can’t think of one. Here we have enormously ridiculous, enormously expensive losses, engendered by a class of government-sponsored experts who thought they knew better than every other individual on the planet. And by the way, these experts were working with other people’s money, with money that is taken, not requested. That kind of money is always easy to spend. And here is the financial system that is supposed to give the world security.

No private individual would make loans like this, unless he was figuring on some government covering his ass.

The Greeks aren’t the only people who think that “investment” means extracting money from productive individuals and giving it to the government to spend on projects that can’t possibly turn a profit. That’s the modern system of political economy. As for the ability of the United States, or the now-sainted China, to stimulate its economy by increasing its debts, the comment of Ray Gaines in Monday’s Wall Street Journal says it all: the system is not working. Meanwhile, the culture of entitlement that is inseparably linked to borrowing without repaying spreads inexorably from the seminar room to the legislative chamber to the chamber of commerce and the welfare mob. Too confused to argue, it asserts its positions; too proud to beg, it demands.




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Woody Allen: He’s Still Good

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When Cate Blanchett walks up to the podium to accept her Best Actress accolades next spring for her stunning performance in Blue Jasmine (and she most certainly will be winning them all, from Golden Globe to Oscar), she will be sharing the award with the ghost of a white Chanel jacket tastefully trimmed in black. That jacket says more about her character, Jasmine Francis, than any piece of costume since Superman's cape. It is Jasmine’s connection with the world she once inhabited, and she wears the expensive jacket casually, as you or I might toss a windbreaker over our shoulders.

Jasmine Francis is a woman beyond the verge of a nervous breakdown; she has already gone over the edge, and is desperately trying to hang on. She not only lives in the past, she talks to people in her past, rehashing old conversations right out loud, while standing on the sidewalk or sitting at a party. We see this as flashbacks triggered by key words or images that remind her of her old life. Through this process we see the juxtaposition of Jasmine’s old life as a glamorous socialite and wife of a multibillionaire, and her new life as the poverty-stricken widow forced to live with her sister, a spunky San Francisco grocery clerk.

The story is a thinly veiled roman à clef that imagines the post-scandal life of Bernie Madoff's wife, Ruth. Madoff, of course, was the investment banker who swindled $65 billion from friends, relatives, and charitable organizations in the largest financial fraud in history. After the Ponzi scheme came to light, Ruth Madoff complained that she couldn't go anywhere without being vilified. Shunned by her former friends, she couldn't go to her gym, her favorite restaurants, or even shopping because everyone stared at her and made disparaging remarks. Well duh! It's one thing for a legitimate money manager to misjudge the markets and suffer losses once in a while. But Madoff never even tried to be a wise money manager for his clients. He just kept raking in the dough and spending it on yachts and homes and cars, while sending out phony statements to keep his clients happy. How could anyone feel anything but contempt for such shysters?

Like Ruth Madoff, Jasmine goes to live with a sister. Ginger (Sally Hawkins) lives in a tiny, frowsy San Francisco apartment with her two young sons. Ginger's marriage has also collapsed, partly because Jasmine's husband Hal (Alec Baldwin) had convinced her and her husband to invest their $200,000 lottery prize in his "real estate fund" instead of supporting their goal to start a business of their own. Of course, there was no investment fund; Hal had been funneling everyone's money into his own personal accounts. The big question is: how much did Jasmine know? An even bigger question: how can a person deliberately defraud a family member or friend? Simply shocking.

Jasmine is tasteful and smart and elegant, but she has absolutely no idea how to exist in the real world. She has no income and virtually no money, yet she gives her taxi driver a $100 tip and flies across country first class because she cannot imagine any other way to act. (When Ginger asks, "How did you pay for a first class ticket?" Jasmine responds with a dismissive wave of her hand, "I don't know. I just did.")

Popping Xanax like breath mints and washing it down with Stoli vodka, Jasmine lives in a daze of denial. She knows she has to reinvent and redefine herself, but she can't let go of the past that was so comfortable, nor can she come to terms with how it all happened. Meanwhile Ginger and her friends try in vain to welcome Jasmine into their world of pizza, beer, and cheap dates. The disconnection provides for many comic moments, but the undercurrent of tragedy is always present.

Woody Allen is one of the most prolific directors in Hollywood. He has been making films for nearly half a century, but (in my opinion) he has done his best work in the past decade, at an age when other people are retired and chasing golf balls. Last year's Midnight in Paris, about a frustrated writer who mysteriously finds himself hobnobbing with the likes of Hemingway and the Fitzgeralds in 1920s Paris, was brilliant. So is Blue Jasmine. It is one of Allen's finest films. The story is at once contemporary and timeless and true. Cate Blanchett gives an utterly fearless and totally vulnerable performance as Jasmine, and the rest of the cast rise to her level of abandon, forgetting themselves in the characters. And kudos to Suzy Benzinger as costume designer . . . I hope that Chanel jacket shows up at the Oscars.


Editor's Note: Review of "Blue Jasmine," written and directed by Woody Allen. Perdido Productions, 2013, 98 minutes.



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Blue-Suited Vultures and Childlike Demands

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Margin Call is another offering in the growing list of movie dramas and documentaries that attempt to explain the economic meltdown of 2007–08. This one gives an insider's view of a giant financial institution — perhaps a Lehman Brothers, although that company is never identified — as its analysts suddenly realize that it can no longer sustain its high levels of margin-driven debt against its falling asset values.

The film opens with a cadre of blue-suited vultures — most of them women — storming the office to let employees go. At the end of the day, nearly half of them have been fired, including middle manager Eric Dale (Stanley Tucci). Dale has been working out a logarithm that seems to be predicting financial catastrophe, but no one will listen as they usher him out the door. This scene is perhaps the most intense of the whole movie. Women literally tap men on the shoulder and signal for them to follow, an action reminiscent of the Rapture that will herald the beginning of Armageddon. It is hard to say which is better — to be summoned away, or to be left behind to face destruction.

As a parting gesture, Dale tosses a flash drive to his protegé, Peter Sullivan (Zachary Quinto) and warns him to be careful. Sullivan opens the file, and after adding a few mathematical computations of his own, discovers that the company's net worth is less than the debts it owes. Considerably less. And with the multiplier effect caused by buying on margin, the gap will widen exponentially in a matter of days, unless the markets as a whole turn around. An emergency meeting is called, with all the corporate bigwigs arriving in the middle of the night.

Here the film becomes heavy with pointed dialogue intended to explain the problem to those of us in the popcorn gallery. It is not unreasonable to assume that every one of these high-powered business people in this high-powered room is a genius at math and finance. Yet CEO John Guld (Jeremy Irons), sinister in his impeccable gray suit, his impeccable British accent, and his frighteningly sharp face, threatens Sullivan, "Speak to me as you would a child, or a golden retriever." This childlike demand is designed for the audience's benefit, of course, but it is almost laughable in the circumstances and reveals J.C. Chandor's inexperience as a writer and director. He doesn't yet know how to set up exposition believably.

The explanation that Sullivan then delivers is so abstract and obtuse that only someone who already understands it would be able to fill in the missing specifics and render it understandable to others. We know that the company has borrowed too much against assets that are diminishing in value, but we don't gain any further light from having seen this movie, and we certainly don't learn anything about how to prevent a similar meltdown.

Films such as "Margin Call" continue to garner glowing praise while vilifying an economic system that allowed America to become the wealthiest, most powerful, and most generous country in the world.

More interesting are the ethical conversations that follow. After Guld reminds the Board of his motto of success: "Be first, be smarter, or cheat," he adds, "I don't cheat, and we aren't any smarter, so we will have to be first." This means that his brokers will have to sell all their assets within hours of the market opening in the morning, before buyers realize that the asset values are dropping.

Sam Rogers (Kevin Spacey), a 34-year veteran of the firm, offers the free-market answer to government regulation when he argues, "But you'll be selling something you know is worthless. They will never buy anything from you again." He's right, of course. The greedy businessperson looks for the quick profit that comes from offering inferior quality at an inflated price, then hurriedly moves on. But the wise businessperson offers good quality at a fair price, knowing that satisfied customers will provide steady gains from repeat sales for a lifetime. Cynically Guld gives the opposite view of the free market: "We'll be selling at the 'fair market value.' It's not our fault if the fair market keeps falling." Acknowledging Sam's point about repeat customers, he continues, "This is the big one. We have to get out all at once."

To entice brokers to destroy their own careers by ruining all their customer rapport and good will, the company leaders offer them huge incentive packages for unloading the majority of the company's assets by the end of the day. The brokers may not be able to get a job for a while, but with this kind of compensation, they won't have to. Integrity can't be bought, but it can be sold.

Karl Marx argued that those who deal in money deal in nothing. They don't produce anything of value, and they don't consume anything of value. They just provide a medium of exchange. Thus, in a Marxist view, being a salesman or stock broker is the lowest form of labor. This point comes through in the film when Dale laments, "I used to be an engineer. I built a bridge once." He then recounts how much time and energy he has saved for all the people who have used his bridge every day for years. The implication is clear: as an employee of this financial institution, his life has been meaningless.

Sam Rogers responds in a similar fashion when Guld says derisively, "You could have been a ditchdigger" instead of a wealthy financial analyst. "Yes," Sam agrees, "but then at least there would be some holes in the ground." Guld continues in Darwinian style, "It's just money; it's made up. Pieces of paper with pictures on it so we don't have to kill each other just to get something to eat. It's not wrong. And it's certainly no different today than it's ever been. . . . You and I can't control it, or stop it, or even slow it. . . .We just react. And we make a lot of money if we get it right. And we get left by the side of the side of the road if we get it wrong."

This cynical attitude about the role of financial institutions is continuing to drag down our economy as surely as investing on margin did. It willfully ignores the fact that financial institutions provide capital for funding those bridges and ditch-digging projects. And it encourages viewers of films like this to ignore that fact. These films continue to garner glowing praise while vilifying an economic system that allowed America to become the wealthiest, most powerful, and most generous country in the world.

For a relative newcomer (this is his first full-length feature film) Chandor managed to do several things right. He secured major funding and assembled an all-star cast that includes not only Tucci, Spacey, and Irons but also Paul Bettany, Demi Moore, Simon Baker, Mary McDonnell, and many others. He has garnered accolades from the mainstream critics. He has written a script that, despite its schoolboy reliance on potty language (thus its R rating), has "gravitas." But while it may seem "important," it isn't very entertaining, or very thrilling. Interesting is about as high as my praise will go. His direction is often affected and heavy handed, especially with his actresses. Wait for Margin Call to be available on Netflix.

quot;


Editor's Note: Review of "Margin Call," directed by J.C. Chandor. Before the Door Pictures, 2011, 107 minutes.



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Financial Responsibility

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The recent recession, which some call the Great Recession, has been around for years, yet it simply refuses to go away. I believe that American business is strong enough that not even Obama’s socialist agenda can permanently destroy our prosperity. But even if a Republican is elected in 2012 and this recession ends, what is to prevent another one?

The question of what causes recessions is perhaps the single most important and most highly political question that the science of economics seeks to answer. The Keynesians and socialists have one answer, the Austrians have quite another. Perhaps the Federal Reserve’s manipulation of interest rates has caused or exacerbated the recession. However, I think that from an empirical, factual standpoint the linchpin of the Great Recession was the American public's financial irresponsibility, as manifested in the collapse of the real estate bubble. Many thousands of Americans irrationally believed that home prices could only go up, and they incurred real estate mortgage indebtedness far in excess of what a financially responsible person would incur. When real estate prices collapsed, very many mortgages went into default, which led to foreclosure sales, which further reduced home values, which triggered a downward spiral. It is probably true that government efforts to encourage low-income home ownership and government home mortgage guarantees contributed to inflating the real estate bubble. But the disaster would not have been so widespread if more home buyers had been committed to living within their means or had been more risk-averse.

This is the most dangerous matter, and also the easiest to correct. If the American public, especially the lower middle class, learned to understand the concept of “financial responsibility” then this syndrome would never happen again.

What precisely is financial responsibility? I think that the main point that people should understand is that money does not grow on trees, and there is no such thing as a free lunch or easy money, and that money is not magical and cannot be created by waving a magic wand. The great Randian contribution to economic theory is the idea that in a free market people trade value for value, and to “make money” is to create value. (Yes, Ayn Rand did not invent this idea, but she perfected it.) In order to make money you have to do work to produce the value; in other words, you need to make the money that you trade with others when you buy things from them. If you don’t produce value, then you have nothing to trade.

This not only means that people earn and deserve their salary by working at their job; it also means that people do not deserve to consume more value than what the other traders in the free market are willing to purchase in exchange for money. From each as he chooses, to each as he is chosen, to quote a Robert Nozick saying that captures this concept.

Financial responsibility is the understanding that you cannot spend more money than the amount you earned because of the work you did, unless someone gives you charity or you steal wealth from others, and that you cannot consume a value that has not been produced by someone. To use Rand’s old-fashioned phrasing, you can’t have your cake and eat it too, or as I would prefer to say, you can’t eat your cake before you bake it. Understand this, and you will probably not spend money that you don’t have or use borrowed money to buy stuff when you can’t repay your loans. If you want to buy something, then you will be more likely to do the work necessary to earn the money before trying to get what you want.

This understanding that money is finite and must be created before it can be spent is the essence of financial responsibility. Implicit in the concept, however, is the notion that charity and theft are exceptions, and the general rule is that you, and only you, must do what is necessary to make your own money and control your individual financial destiny.

But if you understand this principle then you will be very careful about economic risk, because you will understand that you will be required to assume responsibility if you make a mistake.  You will be on the hook for your losses and no government will bail you out. Financial responsibility means being held responsible, which means that you are held accountable and you will accept the rewards and punishments that result from your economic choices. Thus, you will not assume risks in excess of the amount of sweat or skill you are willing to put in to compensate for your mistakes. A person who is financially responsible would not assume a gigantic mortgage on real estate he had an annual income in the lower-middle class range, because he would understand that the debt would actually need to be repaid.

If the public were financially responsible, it would not put up with a government that steals money from others or borrows excessively and spends money that it does not have.

It seems to me that the solution to the problem is for high schools or colleges to incorporate personal finance management training into their liberal arts educations. Simply teaching people how to write up a personal budget that matches income and expenditures, sort of like a balance sheet, would go far toward creating the practical skills of financial responsibility. Some high schools have such classes, but they are treated like trivial afterthoughts compared to the more important subjects. Also, merely teaching students how to spend money is not enough; the financial responsibility class would somehow have to simulate earning income in proportion to productivity, possibly by tying fake money to GPA or class performance, to give students a feel for the fact that you cannot spend what you have not earned. The ideal personal finance class would teach career ambition, how to budget to spend within your means, and the crucial importance of saving money and not borrowing beyond your ability to repay.

One would expect the poor to appreciate the crucial importance of saving money. But it is precisely the low-income families that are most vulnerable to financial irresponsibility. The poor face a dark temptation to borrow beyond their ability to repay and not worry about repayment until it is too late, so that for a short time they can live a more affluent lifestyle before their debts catch up with them. The temptation to take shortcuts to one’s desires is deeply seductive even to rational, honest people. But people with no money to spare can least afford to make mistakes. Good finance classes in high school would help poor families budget properly, save for retirement, and avoid predatory lenders. This would help the poor much more than all the modern-liberal nonsense of entitlement spending, welfare, food stamps, etc.

Middle- and upper-income people could also benefit. A study cited on Yahoo claims that the average New Yorker is $200,000 in debt and the average Californian is $300,000 in debt. The American economic system encourages credit card debt, home mortgage debt, and student loan debt. I personally have struggled with handling my finances, which were recently made worse by roughly $90,000 in law school student loans that I needed to incur; and I wish that there had been a serious class in this subject that I could have taken, particularly in college where young people are supposed to learn how to live like adults.

If such classes were commonly available, the average American would actually be exposed to the concept of financial responsibility, and the odds of another recession happening would be greatly reduced. If it were customary for every American student to take a class in financial responsibility, it would be more likely for voters to vote for financially responsible fiscal policy. And if American politicians had taken such classes, they might have better training in the art of living within a budget and be more appreciative of a balanced budget and the dangers of excessive debt.

Of course, if the public were financially responsible, it would not put up with a government that steals money from others or borrows excessively and spends money that it does not have. So the leftists who control most colleges and the teachers' unions who control the high schools would fight to keep people from understanding the truth about financial responsibility and how to prevent another recession.  But while government is the primary source of economic problems, even in a libertarian anarchy they would still exist, if the majority of individuals were financially irresponsible.

Financial responsibility is the understanding that you cannot spend more money than the amount you earned because of the work you did, unless someone gives you charity or you steal wealth from others, and that you cannot consume a value that has not been produced by someone. To use Rand




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Counterproductive

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President Obama makes speech after insistent speech about his remedies for our country's economic and fiscal distress. Does he really think that this demagogic overexposure does more to build than to destroy confidence?

The president should remain silent while learning basic economics. Then another — but quite different — speech might do some good.




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Strauss-Kahn, Exemplar of Socialism

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The libertarian critique of socialism, or “social democracy,” has usually gone something like this:

The socialist program demands a planned economy. A planned economy can result only from plans. Plans must be made by a group of experts who are not subject to the vagaries of the electoral process. To form and implement their plans, the planner-kings must know everything crucial to the economy. They must know everything significant to their own plans, and be able to predict everything significant that may result from them.

But that is impossible.

This being true, the people who become planners will be those who are either stupid enough to believe that Plans can succeed or cynical enough to care only about the personal power that can be acquired by Planning.

The libertarian critique has a logic that no socialist program ever possessed.

Now we witness the reductio ad absurdum of the socialist idea: Dominique Strauss-Kahn, head of the International Monetary Fund, chief honcho of the French Socialist Party, and prospective president of France, who was arrested Saturday on charges of trying to force a maid in his $3,000 a night hotel suite to have sex with him.

Suppose that the charges turn out not to be true. Suppose that Strauss-Kahn’s nickname, “the great seducer,” means nothing. Suppose that consensual sex is nobody’s business but one’s own. Suppose all these things — the last of which is certainly true. The $3,000 a night hotel remains a problem.

As a self-chosen representative of socialism, and an anointed planner of the world's economy, Strauss-Kahn has supposedly devoted his life to the good of the people. How, then, $3,000 a night? On what premise must the people of the world pay for that?

I’ll tell you. The premise is that Strauss-Kahn, a product of those inner-circle French schools whose graduates automatically get high government jobs, deserves his perquisites of office, because he is somehow qualified to plan the world's economy.

Is he?

No. And anyone who thinks that he himself is so qualified, and uses that idea to justify his perquisites of office, is likely to present a strange moral profile.

World economic planning is allegedly justified on humanitarian and charitable grounds. Planners, allegedly, exist to help people, especially the deserving poor. Planners are supposed to be performing an altruistic work, the modern form of a religious mission. Yet among these managers of the world economy there is a strange absence of people who live in modest circumstances, practice some kind of religious or ethical discipline, or have anything to do with normal human beings, except when the maid arrives a few minutes early in their $3,000 a night hotel suite.

There are plenty of smart people in this world. Many modest people, skeptical of their own conclusions because they are actually in touch with their fellow citizens and knowledgeable about their lives, are also smart people. Strangely, many of these smart people are socialists, but their ambition is not to become world socialist leaders.

Why?

Because the idea that a small group of people is smart enough and knowledgeable enough to plan the financial lives — in fact, the lives — of six billion people is an idea that no one with any ethical understanding would apply to himself. An ordinary moralist would ask, “Who am I to do that? I don’t know enough. I could never know enough.”

Strauss-Kahn presents little evidence of any such moral or practical reflection. But what he did with his life was predictable, under the modern socialist system. A beneficiary of unmerited advancement, he did his best to “stabilize” the world’s economy by using political means to get the productive countries to support the spendthrift countries. He who wasn't producing anything himself.

I don’t presume that an alcoholic is incapable of becoming a good author. Faulkner did. Hemingway did. And I don’t presume that a “great seducer” is incapable of becoming a great thinker. Plenty of examples argue otherwise. But I do not presume that a drunk will be good at running an airline. I do not presume that a person who lacks discretion even about consensual sex affairs will have enough discretion to plan the future of six billion humble families.

To put this in another way: how did someone as stupid as Dominique Strauss-Kahn become one of the small group of people appointed to oversee the fiscal life of planet earth?

The answer is: the logical necessities of the socialist idea. If you want socialism, you are voting for fools like Dominique Strauss-Kahn. You may not know it, but you are. Otherwise — I’m sorry, you can’t have socialism on any other terms. The fact that Strauss-Kahn rose to the top is only a sign that the rest of the candidates were actually less competent than he.

To conclude: if you want someone running your life, and the life of the world, you can be assured that it will be someone like Dominique Strauss-Kahn — and if not him, then worse.




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