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Loaded!
Become A Millionaire Overnight and Lose 20 pounds in 2 weeks, or Your Money Back
By Willie Geist, Boyd McDonnell St. Martin's Press
Copyright © 2011 Willie Geist and Boyd McDonnell
All rights reserved.
ISBN: 978-1-4299-6853-9
CHAPTER 1
A Brief History of the American Economy
They say if you want to understand the future, you'd better study the past. That's great if you like sitting around reading dusty history books that smell like your grandmother's house, but in the world of high finance, only Sallies who drive Japanese hybrid cars look in the rearview mirror. Having said that, a lot of economic losers have been asking the question lately, "How did we get here?" (By the look of things, most of them probably "got here" on the bus.) It's a fair question, I guess, and one that can be answered with a brief, Ask Jeeves- or Google — sourced study of capitalism in America.
Let's start at the beginning, or at least at the part after the Indians conquered the dinosaurs.
From the moment the first explorers (i.e., Columbus, Vespucci, Boyardee) landed on American shores and confronted the native Indians (not the kind of Indians that answer the phone when you call the cable company and pretend they're in the U.S. by asking if you saw the Yankee game last night), the war over the land's dominant economic theory was on. The Indians wanted to trade shitty trinkets like beads, pelts, and sandals — the kind of stuff you buy at dollar stores and throw in the garbage a week later. Meanwhile, the Pilgrims rolled up in their tricked-out boats, carrying tables, rugs, silverware, and fondue sets. We're talking Crate & Barrel, wedding-registry-level stuff.
At first, the Pilgrims played along with the lame-ass, bead-trading barter economy, but then they got understandably annoyed and decided to kill all the Indians. Sitting Bull tried to resist but he learned the hard way that, like his people, arrowheads and blowguns were relics of a bygone era. The Indians who survived the epic ass kicking bitched so much about it that the Pilgrims gave them casinos just to shut them up.
From the near extermination of an entire race of people was born a wonderful new economic system. With the Indians out of the way, capitalism was free to take its first baby steps. As Ben Franklin invented electricity, Eli Whitney discovered gin (yum!), and Steve Guttenberg gave the world the first printing press, American entrepreneurialship took flight. Restaurants, malls, and free-standing sporting goods stores sprouted up all across the vast landscape. As a continent learned to live, work, and speak for itself, the seeds of the American Revolution were being planted right under the King's nose.
George Washington, Thomas Jefferson, and Abraham Lincoln knew the growth of their colonial economy would forever be stunted by the strong hand of the monarchy. That is, unless they did something to change that. In a secret meeting on a cold night in Pittsburgh, a group of brave American men (no broads allowed) played cards, told ethnic jokes, and wrote the Declaration of Independence. No one knows for sure what was written in that mysterious document. All anyone can say for certain is that it sparked a revolution.
Within days, Bostonians were dumping their Skim Chai Lattes into the harbor to protest the price of stamps. Witches were being burned at the stake in Salem. And The Million Man March was stampeding its way to Washington. The mighty British Empire never stood a chance in the face of the American revolutionary spirit. On the 4th of July, King George III called George Washington to concede defeat and the United States of America was born. Celebrations broke out across the young nation (since it was the 4th, people already had shitloads of fireworks and picnic food for celebrating) and the nascent government moved to establish itself as a world power.
In his first act as president, Washington took out a bridge loan and ordered that a bridge and toll plaza be built between New Jersey and New York. It was to be named in his honor. But the bridge was much more than a monument to the new president. It opened up the island of Manhattan (which, by the way, some dumb Indian sold to the white dudes for a satchel of beads) to commerce. Soon thereafter, The New York Stock Exchange was built.
If the United States of America was a giant luxury steamship with two swimming pools, a driving range, and a 24-hour sundae bar, the NYSE was the engine room. People bought stocks, bonds, T-bills, triple-tax-free muni bonds, pork bellies, and rookie baseball cards at astronomical rates. Railroads were built, steel companies flourished, and American automobiles became the envy of the world (especially the Chevy Malibu). There was no stopping the American economy. It was the Kobe Bryant of its time.
Later, the Great Depression of the '30s was blown out of proportion by the news media. It seriously was not as bad as everyone says. Even as photographs of tent cities and breadlines were splashed across the front pages of the world's newspapers, capitalism marched forward. Some said the United States was crippled and humiliated by the economic downturn. Really? Hitler, Hiroshima, and the Communists might beg to differ. After kicking major ass in World War II and maintaining its undefeated record in wars, the story of America's military and economic dominance echoed around the world. In 1945, everyone agreed that the United States would run shit. And we did.
Since then, we have never relinquished our spot as the world's number one economy. In the '50s, everyone had a car and a house in the suburbs and all the women wore aprons and took their husbands' briefcases when they came home from work. In the '60s, many of the country's youth began smoking hashish, growing beards, and running around naked, but America refused to be dragged down by a small group of hippie troublemakers. In the '70s, the left-wing media made a big deal about a stupid burglary at a hotel in Washington. Obviously no one gave a shit, and the economy continued to thrive. Then came the '80s. The sweet, sweet '80s.
Sometime in that decade, Gordon Gecko starred in a movie called Wall Street. He wore suspenders, slicked back his hair, and made shitloads of money. His performance inspired a nation. Overnight, the area where all the money people work was nicknamed "Wall Street." Investment banks lined the streets. Raking in cash became a national pastime. Just as President Ronald Reagan predicted, everyone benefited from the mountains of money being made by the guys with suspenders. Most Americans bought European sports cars and houses in the Hamptons. As the world watched the United States with envy (with the help of the international box office success of the Beverly Hills Cop movies), it became clear that American capitalism was the only way. The Berlin Wall fell, and the Soviet Union, which had been a house of cards all along, surrendered to the United States. Capitalism's victory was complete.
If the international economy was a football game, America was blowing out the world by the end of the '80s. As we continued to pour on the points, the '90s became our end zone dance. With Bill Gates's invention of the Internet and the dawning of the Dot-Com Boom, the United States just flat-out started to embarrass the world. We were up 50 points in the fourth quarter and still throwing bombs. No mercy, baby. Google, bam! iTunes, booyah! Kozmo.com, mindspring. net, what's up now?! The hits just kept coming. Seriously, America kicked so much ass in the '90s, it started to get ridiculous. Incidentally, the two of us bought a few domain names and got tons of tail during that era.
Recent events in the world economy have led some to suggest that perhaps the American way of doing business is not the best way of doing business. Naysayers and those jealous of the success of the United States would like you to believe that the Wall Street coke parties of the '80s and the dot-com nerd bender of the '90s led us to this place. We implore you to ignore such shortsighted hogwash. Remember how all the dorks in Sixteen Candles hated Jake, the awesome, good-looking guy who rolled up the sleeves on his button-downs and drove a Porsche? America is Jake. The other countries of the world have always been jealous of our economic coolness and they think this is their time to shine. Sorry, dorks, we're still the good-looking one and we still drive a Porsche. It's always gonna be that way.
They just don't get it. You see, American capitalism has been a wonderful journey. A journey that began when men in blouses and buckled shoes landed on our shores thousands of years ago. Our nation's economic journey, like that of the men on those ships, has been, and will be, rocky at times. Sometimes we'll stray off course when the wind hits our sheets the wrong way. Sometimes the waves of the market will lead us into stormy seas. Occasionally, half the crew will die of rickets after eating halibut that had been left out in the hot, rodent-infested galley for four days. Sometimes some asshole will let his paddle slip into the water and we won't be able to steer the goddamn ship.
Sure, staying home and sitting out the journey on the sidelines is probably safer. It's the easy way. But the American way — the way that has prevailed since the Stone Age — requires you to pack your rain gear (and some long underwear and energy bars), grab an oar, and look to the horizon at an uncharted sea of opportunity. If you trust Mother Nature to guide you to shore, she'll have a bounty waiting for you when you get there. Just watch out for rocks and sandbars. Actually you'll want to park your boat off the coast and take a smaller boat into shore. We're starting to lose track of this metaphor. Just shut up and get in the boat.
CHAPTER 2
A Perfect Storm
(Not the Awesome Clooney Fishing Movie)
Now that you know your history, let's move to the present. It may be decades, indeed centuries, before economists and policemen unravel the complex series of problems that, like the beads of melted alloy on the floor of the steel mill in Terminator 2, came together quickly to form a monster that nearly killed us all. Some have called the confluence of factors that led to the near collapse of the world economy "a perfect storm" (and not the awesome kind of "Perfect Storm" when Clooney, Marky Mark, and the other guy from Talladega Nights went on a guys-only fishing trip). It was a storm whose thunderclaps of cheap money and inflated profits should have served as warning to all of us. Instead we were caught in the rain without an umbrella. Also, instead of rain, shit was falling from the sky. It was a shit storm. As far as we know, they have yet to make an umbrella that protects you from shit.
In the immediate aftermath of the raging shit storm of the fall of 2008, the American public was given a head-spinning crash course in economics. We heard terms like "subprime mortgage," "credit default swap," "too big to fail," and "you probably shouldn't have bought an Escalade with your Diners Club card" for the first time. Unless you were a regular CNBC viewer, though, this all sounded like Greek (which, incidentally, we speak fluently and use on our fall trips to Athens, Georgia, to see the Dawgs play Mississippi State). Frankly, it's not all as complicated as the so-called "Masters of the Universe" would have you believe. When you cut through the financial mumbo jumbo, the economic crisis can be boiled down to three basic concepts:
1. Wall Street vs. Main Street
2. Bernie Madoff
3. Overpaid Athletes
Let's sink our teeth into these one at a time.
Wall Street vs. Main Street
As we outlined in Chapter 1, Wall Street is the place in New York City where smart, savvy guys wearing monogrammed cuff links and Bluetooth headsets make money by the truckload. Like J. P. Morgan, Cornelius Vanderbilt, and Gerald Ford before them, these men (and the occasional token woman) were the titans of American industry. But like the Tennessee Titans in the playoffs every year, these financial titans totally pooped the bed.
As Bear Stearns, Lehman Brothers, Dolce & Cabana and other places with two names fell like dominoes, the luster began to come off the famous golden statue of a buffalo that sits somewhere near Wall Street (it doesn't come up on Google Maps, so we can't say exactly where it is). Almost overnight, the buffalo's sheen had turned to tarnish. The world financial markets were on the brink of collapse and Wall Street was asking itself some tough questions. Questions like, "Can you believe all these Main Street yokels bought all that shit they couldn't afford and cost us our fucking bonuses? I am not renting in Westhampton (aka Worsthampton) this summer."
Wall Street became a popular target for the country's outrage. Suspenders, steak power lunches, and restored vintage sports car collections became, fairly or not, symbols of the "excess" that helped bring about the collapse. The economic meltdown offered many long-frustrated Americans the opportunity to lash out at people who have beach houses, wine cellars, and home theaters with stadium seating. The unspoken class conflict that bubbles beneath the surface of American life exploded in the fall of 2008 like the volcano at Pompadour. So what is Main Street, and why is it so bitter? Simply put, Main Street is home to the people whose irresponsible spending forced Wall Street to make the gambles that screwed us all.
Tell us if this sounds like a good idea: Some guy walks up and hands you the keys to a big, five-bedroom house the likes of which you've never been inside (that's what she said). You tell the guy you don't have enough money in your wildest dreams to pay for such a house. The guy tells you that you don't need any money. Just get him back later. No money to buy a house? Sounds weird. Usually things cost money. Especially houses. And sex. So what's the catch?
As long as you're loaded, there is no "catch." In a society, however, where a small percentage of people are not loaded, some bad apples are bound to spoil the otherwise shiny, delicious bunch. In other words, it's the fault of the poor people. The irresponsible Americans who took that sweet housing deal and moved their overweight families (studies show that poor people don't have home gyms or Equinox memberships) into houses they couldn't afford eventually brought the world economy to its knees. Thanks a lot, poor people! Since these dummies previously owned homes that had two bedrooms, they had to buy new furniture to fill up their new "mansions." They had to buy new pool tables for their billiard room. They needed liquor and martini shakers for their swim-up bars. And they had to lease Mercedes to fill up their three-car garages. They slapped all that on their Visa cards and started living the American Dream!
(Continues...)
Excerpted from Loaded! by Willie Geist, Boyd McDonnell. Copyright © 2011 Willie Geist and Boyd McDonnell. Excerpted by permission of St. Martin's Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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