Yup. That’s a football field. Details below.

You’ve probably heard about the “Trillion Dollar Coin” by now, and maybe even taken the time to take in the experts’ predictably confident and just as polarized positions on the topic. The fact that the idea is even being discussed seriously is rather telling. Can you imagine the same conversation occurring before the bailouts of 2008? It seems unlikely. And that’s ONE angle on this whole thing that especially intrigues me. As much anger as some of us may have experienced as a result of the bailouts and their aftermath, I for one am thankful for them. Partly because it was probably the only way to avoid a replay of the great depression, but more importantly, because it was probably the first crack in a centuries-old paradigm that has far outlived its usefulness. Talk to someone who has studied economics, and the conversation will rapidly fill up with elaborate terminology that tries to express the incredible complexity of global markets and speculative investment. But as much pride as economists or financial experts may take as they display their head-spinning depth of knowledge on the topic, they are usually overlooking one stark, annoyingly simple fact. At the foundation of it all, their elaborate constructs are all based on a rather simple social contract, i.e.: the tacit agreement on the part of large numbers of people that a piece of paper is worth what someone says it is. It’s tragic that millions of people suffered through a decade of poverty and that perfectly functional factories sat idle after the crash of 1929. And the tragedy was compounded by the fact that it was primarily because pieces of paper had lost their perceived value. That was the magical thing that occurred in 2008; Paulson & Bernanke’s Bailout Bankster Brigade basically “broke capitalism”. That has only peripherally sunk in for people, but every passing day, more people get hip to concepts like fictitious capital, and we live in an era of some of the most innovative thought in human history. About the only thing the archaic entity called a “bank” is good for these days is laundering drug  or war money, and centralizing power. That paradigm is not long for this world, in my opinion.

That’s why I don’t find the blogsplosion about the Trillion Dollar Coin  particularly interesting. As Matt Taibbi, the pop media journalist the Goldman Bankster Gang loves to hate most points out in his most recent piece: “The federal rescue of Wall Street didn’t fix the economy – it created a permanent bailout state based on a Ponzi-like confidence scheme”. A paper version of the Trillion Dollar Coin was created in 2008, and we’ve been gleefully spending imaginary money since long before that, it’s just that the average person doesn’t understand why THEY don’t have any. They’ll eventually figure this out, and that’s when the feces will really hit the fan. So what really intrigued me was this silly question:

What if we still had to back currency with a real-world asset, and we were only allowed to mint this trillion dollar coin out of GOLD?

Here’s the rough result. I explain my admittedly sketchy methods below.

I’m no genius when it comes to volumetric geometry and 3D imaging, so this graphic may be a little off. Feel free to correct me in the comments! I used yesterday’s price of gold, which was $1661 an ounce. Dividing a trillion with that figure, I determined it would take about 181.23 tons of gold, and according to Wolfram Alpha, that would require a cube that’s 65 meters on each side. I tried to approximate the dimensions of a quarter (24.26mm x 1.75mm) to create the cylinder/disc dimensions. That ended up being a disc about 418 meters in diameter and 2 meters thick. The football field isn’t perfectly to scale, but you could obviously fit four football fields end-to-end on a 420 meter disc, so I roughed it in.

Another way to achieve your goal is to create a legitimate business that so insinuates itself into people’s lives that they feel they can’t live without it, and then charge them enough to buy deregulation for yourself, so you can basically get away with murder, price-fixing, repossession of property, and slave-like labor practices. This would be the health and insurance, telecom, mortgage, and mobile device industries, respectively. The health and insurance industries get a special Goodfellas bonus for somehow maintaining their reputations as wonderful, life-saving services, in spite of the fact that the latter drives you to bankruptcy by weaseling out of paying when you most need them, and the former is often everything BUT healthy. As Walter Cronkite observed decades ago, “America’s health care system is neither healthy, caring, nor a system.”

But if you REALLY want to carve out your name in history as a master criminal – and never spend a single day in jail – you need to do BOTH of the above, by going  into banking or economics. Banking is the field for you if you like shopping for $87,000 rugs while your company is going under, or if you enjoy contriving elaborate schemes to strip the average working stiff of his self-esteem and home while telling him he can’t live without what you have, even though it was never yours to begin with. Economics, on the other hand, is a great field if you admire the basic methodology of the TV weatherperson, palm reader, or astrologer, but prefer hanging out with politicians and bankers.

The scary thing about all this apparent hyperbole is that it really isn’t hyperbole at all. Since 2008, we’ve witnessed the most massive financial crimes in history, seen very little in the way of punishment, and in fact seen the very perpetrators of the crimes elevated to the highest levels of government. Often in the very agency that is intended to regulate the industry in question. Even scarier is that these people are either blithering idiots who have no idea whatsoever how markets work, or they made this all happen on purpose.

If you’re a student of economics, there’s no hope of persuading you to think differently than you already do, because you’re almost certainly already indoctrinated into one of the two main schools. If you’re a Keynesian, you’re probably smugly saying “I told you so” and selling lots of books. If you’re a neo-classicist, maybe you’re still running around gazing at the world with 20/20 hindsight, constructing logical fallacies to explain the catastrophes after the fact. Or maybe there’s another secret frat house within the neo-classical school. Maybe this whole global economic shift is intentional. Maybe it’s just a variation of the kind of scorched earth policy suggested by the Starve the Beast strategy. We will never know, since so many things are either veiled in secrecy, or buried in the mind-numbing avalanche of data.

At the end of the day, there’s not much middle ground. Those responsible for guiding the markets over the past few decades were either dead wrong about their theories (operating sort of  like a Shaman doing a raindance while it’s raining), or they were intentionally engineering a world-changing shift in how governments work in relation to banking and finance. How could it be anywhere in between? Take the arrogant, floppy eared, squinty-eyed Ayn Rand sycophant Alan Greenspan. Wrong at almost every turn in his career, but rooms would fall silent when he spoke, eagerly awaiting his pronouncement about the new prime lending rate. Or his banal twaddle about irrational exuberance or whatever. At least he finally admitted to 30% of his ignorance. And more recently, two of the people who – if they really knew what they were doing – were best positioned to see catastrophe coming and failed to do so. And to fix the problems they failed to see coming, resorted to the exact opposite of what their own theories would recommend. They used the Invisible Hand as a big bitch slap to the world in general, basically telling us that if the government didn’t pay for the mess, the world would end. And then these guys not only kept their jobs, they either got bonuses or government appointments to boot.

The question of criminality is not a matter of opinion; in the aftermath of the financial crises of the last several years, the SEC has filed hundreds of actions. Over 700 in fiscal year 2011 alone. The scale of misdeeds by the financial services industry is literally mind-boggling. Even trying to list the most egregious here would be absurd; information in quantities like this literally requires databasing.

The most disturbing thing of all though is that little is likely to ever be done; no significant players have gone to jail, and when cases ARE successfully prosecuted, the banks pay fines in the millions against offenses in the billions. It becomes merely the “cost of doing business”. And you and I don’t seem to care, we still stick our hard-earned money in the same bank that we bailed out while we argue about Mitt Romney’s dog transport methods and Barack Obama’s birth certificate.

And any seemingly organized civil reaction has turned out to be a joke. While the Tea Party is far from the band of PBR-swilling yahoos that most smartypants liberals like to frame them as, they have largely either (quite successfully and intelligently) folded themselves into the conventional political process, or on the fringes, are obsessed with looney ideas about sovereign citizenship and other misinterpretations of constitutional law. And the Occupy Movement? NICE JOB. Call yourselves “Occupy Wall Street”, get the world’s attention, and then spend the next six months arguing about everything BUT Wall Street. Christ, even HIPPIES were more effective in fomenting social change.

So while we will probably continue to see these quiet wrist slaps by the SEC, most bankers can sleep well tonight in their five hundred dollar jammies, because the Department of Justice isn’t going to actually put anyone in jail. Why? It’s too hard, they say. These cats are just Too Big to Jail.

This image really has little to do with
the article, but we spent a lot of time on
it so we like to use it whenever we can.

I wish I were the US government, or a bank. Then, whenever I’m broke or actually running at a deficit, I could just say “that’s okay, Deficits don’t matter” or “people of America, if you don’t give me exactly the amount of money I need, life as you know it will cease to exist” and everyone in America (and their grandchildren) would give me billions of dollars, which I could share with my other friends who had been frivolous about finances or made some insanely bad investments. Unfortunately, I’m not a bank or the government, so it is mostly with a detached amusement that I sit and read about the shirtless flirts in Washington that we pay so much to sit around arguing about the annual budget. I mean, we shouldn’t be surprised that congressmen spend all their time looking for dates on Craigslist, when the alternative is actually trying to understand monstrously incomprehensible legislation like the health care bill, net neutrality issues, or for the near future, the federal budget. I mean, have you actually ever looked at the thing? Even when the New York Times creates a clever and relatively simple interactive graphic, it’s mind boggling. But definitely preferable to buying the darn thing, I mean, The basic overview is 216 pages and costs 38 bucks, and the Appendix is 6 times longer than that (1368 pages) and costs 75 bucks. If you bought all the available related publications, you’d have 2448 pages to sift through, at a cost of $214.00. And that doesn’t include the CD-ROM, which thankfully is not an audio book read by Timothy Geithner. If you want to learn more about how the budget is put together without spending 200 bucks, the Wikipedia page goes in-depth. Over 13,000 words in depth in fact. Remarkably, the words “billion” and “trillion” are only used 81 and 59 times respectively. Me? While everyone else sits around arguing about taxes, spending, sacrifice, and responsibility, I’ll be kickin’ back, ignoring the doorbell and the phone as creditors continue harassing me. Why? Because deficits don’t matter. And besides, I oddly find myself agreeing with Fox/WSJ writer Paul B. Farrell’s rant Fed dictator Bernanke needs to be toppled – Forget Mubarak, it’s Fed reign of terror that must end. To distract myself while I sit here broke with it not really mattering, I think I’ll play a few rounds of the poverty survival game  Spent. Because virtual homelessness is a lot more fun than real homelessness.

Wow. Just when I had stopped worrying about how the collapse of Ireland’s economy might trigger the broader collapse of the global economy (it turns out Ireland’s economy isn’t dead, it’s just resting ), now I have to worry about the collapse of India’s economy. After watching America’s banking system get gutted by smart rich guys loaning tons of money to people to buy houses they couldn’t afford, SOMEONE should have noticed the potential for the same to happen with the massive microcredit industry in India. The parallels are actually rather remarkable, except the consequences are much more dramatic. This Globe And Mail piece politely refers to how the poorly-regulated microloan industry in India has resorted to “usurious interest rates and coercive means” to operate. Meaning they’ve apparently been operating much like the local loan sharks everyone was happy to see them replace. This has led to suicides by microcredit-bankrupted individuals who are now being urged by Indian legislators to “strategically default”. Which then gives the banks a fright, because they’re exposed to the tune of $4 billion on all of this lending. The tragic thing on the human end of this scenario? The worst of these overextended borrowers who are choosing suicide as a solution may only owe as little as $2,000. Too bad the Gates Foundation and others didn’t speak up sooner about how the microcredit model was so flawed. For a refresher on how this sort of crisis can play out, see the graphic below.

For the full story, see The Subprime Primer.

Yesterday a friend asked me if I voted last week. I calmly said “nope”, to find myself on the receiving end of a laser-like liberal glare that screamed “how could you abandon us at this crucial juncture in history?“, but then out loud they said “Why the f— NOT? Are you RETARDED or something???” I then reminded my liberal friend that it’s not nice to say “retarded”, and went on to explain that my decision not to vote was part of my plan to accelerate my collapsitarian vision for a shiny new apocalypse. You see, what liberal, conservative, and especially that other bunch of voters seemed not to notice last week was the fact that Ben Bernanke had instructed Washington to print a bunch of money in a quantitative easing effort. For those of you not familiar with sophisticated economic terminology, 1 bunch=$600,000,000, and according to many, quantitative easing = bank bailout. To me the best part of this all is that since everyone’s calling it “QE2″, we no longer have to resort to that hackneyed “polishing the brass on the Titanic” line. The QE2, as you may recall, was the last of the great steam-powered luxury liners, whose only satisfied customers were probably the British soldiers that she ferried to the Falkland War. The debate will rage about this economic strategy until the results manifest themselves, but for one of the more balanced views of what’s going on (even if you do think he’s full of shibboleth) Paul Krugman sums things up here. And there’s one likely side effect of this cash injection that I find hilarious: in spite of the fact that if teabaggers had any idea what’s going on in the real world, they would be in a psychotic rage about the government printing a bunch of money at a time like this. But in their inexplicable ignorance, they’ll support it with every bone in their little heads, because clearly, if the rest of the world thinks an idea is stupid, it must be the patriotic thing to do. By the way, if you want to print your own money at will just like Ben, HowStuffWorks has excellent step-by-step instructions.

If you don’t feel like you have a clear idea of what the Group of Twenty really is, you’re not alone. More than half the people randomly surveyed on the streets of New York recently had no idea either. Is it a luxury car? A high-powered handgun? A French supermarket chain? A group of avant-garde Belgian artists? While the answers to all those questions are “yes”, we’re talking about the G20 that met in Toronto over the weekend. And the answer to what that G20 is is a little more complicated. If you’re a little more on the paranoid side, you’re probably convinced that it’s the public face of the mysterious Bilderberg Group, and that it’s an evil cabal engineering the demise of the US Dollar and planning a global currency so that its members (essentially bankers and multibillionaires) can take control of the global economy, and thereby have secret control of all the nations of the world. And who knows; you may be right. In spite of the Group of Twenty’s wall-to-wall media coverage, we still mostly only hear about how much their meetings are being protested, not what they’re actually planning. I personally don’t get a warm tingly feeling about the organization; if you look at the member list, you’ll note that the US representatives are two of the geniuses – Timothy Geithner and Ben Bernanke – that spin back and forth through the revolving doors of Wall Street, the Treasury Department, and the Fed Bank, and can largely be given credit for getting the economy in the mess it’s in in the first place. Which should be reason enough to protest them. But seriously, what are the protesters protesting? Judging by the damage done to Starbucks and American Apparel, they mostly hate crap coffee and hipsters. But this piece on SocialistWorker.org probably sums it up with the least hyperbole I was able to find, and it boils down to this: the G20 is a handful of bankers and world leaders that no-one has asked to get together and decide that they know what’s best for over 6 billion people, and they haven’t shown in the past that they really have anyone’s interest in mind but their own. And who exactly are the protesters? Well, it’s hard to tell, because the Black Bloc strategies used by the more violent ones dominate media coverage, to the extent that the more “wingnut” sources perform in-depth shoe analyses to imply that the black bloc protesters are actually cops. But if you visit a site like TorontoMobilize.org, it appears the bulk of the protesters were Toronto-based organizations of women, people of color, indigenous peoples, the poor, the working class, queer and trans people, and disabled people, and that they just may have some legitimate complaints.

The G20 logo for Toronto’s summit bears a strange resemblance to a fire hose dousing a protester, or a mechanical claw descending from the sky to grab hold of the human race:

These are the US representatives to the G20. You may remember them from some of their other recent financial planning.

The protesters are mostly regular old oil-smeared people like you and me:

It’s time once again for people like you and me to have their heads spun by the incomprehensible numbers that are the US Budget. Personally, ever since I learned about fictitious capital, I’ve had a hard time understanding why the government expects us to pay OUR bills, when THEY operate at a deficit almost all the time. Short of a revolution though, not much can be done about that, so let’s just try to understand the numbers. There are two ways to look at numbers like this. One is to just look at them, and say “Wow. Those are some really big numbers.” The New York Times has a great interactive for doing just that. You can also try to visualize the numbers, as in the graphic at left, which was assembled from the larger images here. We explored this in more detail last year. You can also do what politicians do, and talk about the numbers in ways that sound good but make no sense in reality. That’s what the GOP has been doing for a while, largely with the help of Frank Luntz. Frank Luntz is the guy that was largely instrumental in the success of the GOP over the past decade, through their implementation of his GOP Playbook. If you’ve never given it a look, you should, because it was his language – refined through dial groups and other marketing-style research – that allowed the previous administration to rack up the hugest deficits in history, while making you think they were frugal conservatives. Now that the previous administration has trashed the economy, saying goodbye on the way out with Bush nationalizing the banks and essentially destroying American capitalism as we knew it, it’s time to make it look like it’s all Obama’s fault. And Frank is back, with the words to do it. He’s penned the new talking points in a memo called Language of Financial Reform. That’s a link to the full document, which is also embedded and excerpted below.

Here are the GOP keywords. Note that they could just as easily be used by Democrats, with a reverse effect:

Here’s the full document:

Language of Financial Reform –

When I’m in a hospital room, I usually have a
hard time telling which way the blood is flowing.

I feel sorry for Barack Obama. Not only will history likely blame him for the long tail of the bank failures and bailouts for which the Bush administration was actually responsible, it will also likely blame him (because of the passage of the health care bill that has divided the country recently) for the continued malignancy that is our decrepit, bloated, and corrupt “health care system”. I put that phrase in quotes because I believe that – as the late Walter Cronkite once said – “America’s health care system is neither healthy, caring, nor a system“. While a bunch of Democratic congressmen who have nothing to worry about regarding their health care plans sit around patting themselves on the back for passing a health care bill that has supposedly been the dream of generations of Democratic politicians, the fact is that things won’t change for many, and we’ll still be left saddled with the most expensive and least effective health care in the developed world. The bill does NOTHING to fix what any intelligent person sees as the fundamental problem; it might in fact worsen it. Whether you describe the problem as being a result of government meddling and insurance, or as patient overuse of treatment because insurance will pay for it, or as a result of doctors requiring malpractice insurance, you will notice the word “insurance” keeps popping up. The fact is that the mind-boggling arrangements for billing and payment that exist today would be IMPOSSIBLE without the insurance industry supporting its piece of what really is an incredibly elaborate and blatant ponzi scheme being pulled off by an industry and a profession that operates under the ultimate smokescreen: an illusion of benevolence which implies that they are only here to help you, and perhaps save your very life. And what price can be put on that, right? Well, when you can float enough paper, a pretty high one, apparently. How about seven bags of saline solution for $1,757? Or $12 for a “mucus recovery system”, i.e., a box of tissues that retails for about two dollars? Or $57 for a “fog elimination device”, which is a 2×2 piece of gauze used to wipe down surgical equipment? This kind of billing is so rampant that there is another industry that feeds off the system; “medical billing advocates”. These are companies that will take your insane hospital bill, itemize and contest the bloat that typically contributes to a significant portion of the total, and then bill you for the service of correcting the amount with the health care provider. The entire health system is rife with over-billing, whether because of intentional fraud or the errors inherent in the complexity of how the billing is distributed amongst insurance providers, which all negotiate different deals. Apparently 8 out of 10 hospital statements contain multiple mistakes, overcharging consumers an estimated $10 billion a year. With a system built entirely on such a foundation, how could I possibly care if I have insurance? Someone will pay for it. Maybe me, maybe the government, or – if I receive care as shoddy as what I’ve seen family and friends receive over the past few years – maybe a lawsuit. Below is a quick list of some of the more absurd charges found in routine hospital billing. Have any stories of your own you’d care to share?

$90 charged for a 70¢ I.V.
$129 for a “mucous recovery system”, i.e.: a box of Kleenex
$251 for a bag of saline
$57 for a “fog elimination device”, i.e.: a 2×2 piece of gauze used to wipe down surgical equipment
$1,082 for two bags of intravenous electrolytes, each available online for $5
$1,269 for nine doses of the pain medication Demerol, a markup of 14 times above retail