Somewhere in the midst of a bustling south Asian city,
there's a stripper eying up the local establishments, in search of a gig
that's sure to ring in a quick buck.
But this is no ordinary pole-dancing, out-of-work actress in her early 20s just trying to stay alive. The break with convention begins in the stripper's profile: he's a neatly groomed, late 30's Chinese male, and heir to one of the largest conglomerates in the region. He's in the papers most days, assuming you read the pink sheets. The bars he frequents are the glitzy, five-star hotel sort with complex crystal chandelier lighting schemes rather than the seedy Tokyo brick-a-brack flashing with neon heart-shaped logos invoking the image of female genitalia. And the assets he strips aren't human bodies, but public companies. Great ... big ... giant ... public ... companies.
Although it takes place some 15,000 miles away from Washington DC, the following story, which is still very hush-hush in the Orient right now, is worth considering as Congressmen Reid and Boehner battle out their prospective plans to “turn America around.”
Let’s call the male (asset) stripper Golf Pro (or Golf for short, seeing as that's a fairly commonplace Asian name). About two months ago, I went to meet Golf for drinks in the sort of fancy molecular fusion eatery-cum-wine bar that’s designed purely to service about 0.1 percent of the region's population, the bulk of which is white, Chinese, or both. By the time I'd made my way through the car horn choir of the city’s mid-week rush hour, I found Golf holding court like a newly installed Emperor at the restaurant’s high table. He broke a convention typically associated with strippers and offered me a drink.
In the next few hours, Golf outlined for me his plans for, as he called it, the "ultimate strip, the real deal." The deal consisted of two parts. Part one went something like this: take one of the world's largest (struggling) companies, buy a big block of the shares in said company up off the stock market, and once that stake has grown sufficiently in size, combine all the proxy votes and make a direct challenge to the management of the company and force them to step down.
Once that was done, Golf had part two all mapped out:
fire the employees, pretty much en masse but over the course of a few months so
as not to cause too much of a stir, and one-by-one, sell off the big, heavy,
industrial-sized stuff the company owns to its competitors, generating a pile
of cash you'd be lucky to see on the bottom of a winning lottery ticket.
Come fall, were any of my friends interested in holding one of these winning lottery tickets, inquired the smooth-talking corporate raider, the precious hours of his Patek Phillipe soundlessly ticking away? Who the hell wouldn't be, I thought?
A few days later I recounted the titillating details of this once-in-a-lifetime offer to a close multi-millionaire friend of mine, trying rather too excitedly to emulate all of Golf's natural cool. Instead of reaching for his checkbook to sign away seven figures halfway through my sales pitch though, my friend, who we'll call Pooh Bear, waited until I was done and let a long, pensive silence hang uneasily in the air.
“What about the secretaries and the janitors?” Pooh Bear asked
halfway through plopping a carefully wrapped steamed rice-paper package of
prawn dim sum into his mouth. “It’s a short-term get rich quick scheme that
benefits no one,” he concluded.
Never one to be disheartened quickly, I put Pooh Bear's inconvenient though truthful negativity down to a bad week managing his wife, his mistress, his two kids, eight cars, and the three restaurants he was busy trying to buy, and ploughed on. And sure enough, just a few days later a potential investor, who will go here by the name of Lucky 8, took the bait like a great white. I had hit the jackpot: Lucky 8 is one of the largest hedge fund managers in the world, overseeing a portfolio of more than ten billion dollars.
Almost as soon as Golf had exchanged pleasantries with Lucky 8 however, I found myself on the kids’ table, far from any of the action I had anticipated being a part of. Thanks, I can take it from here, seemed to be the order of the day. And my commission? "We'll work out exactly what you are going to get when the deal has been completed; you may have to share some of it," I was curtly informed.
Driving drunk on a flaming cocktail of disappointment and rage, I rocked up at Pooh Bear's gated, six-bedroom colonial-style mansion for a strategic tete-a-tete. "There is nothing you can do here, the guy is too powerful," said Pooh Bear, who was out in the midday sun cleaning his latest sparkling purchase, a slick black Lamborghini Gallardo. "Well, you can make yourself useful and get a fresh bucket of water for the Gallardo I guess."
Was all this, I wondered, some sort of karmic comeuppance for agreeing so hastily to enter into a deal that enriched only a very few elite billionaires while screwing most of the equally hard-working guys and gals who trooped to work every day crammed into the subway?
Don't get me wrong, there's some more than reasonable blame to be apportioned to the company's current management, who have run it into the ground in the last five years as a result of the kind of self-serving greed and professional sloppiness I wouldn't even expect from my eight-year-old niece. But that doesn't change the fact that stripping the company of all its resources and dismantling it in a spectacular supernova serves only the financial interests of those who least need that service.
And here is the problem with both Reid and Boehner's plans: neither of them -- and especially not Boehner's -- attempt to actually reconstruct the US economy in a way that helps those at the bottom achieve their medium-term financial goals. Instead, they read more like vain attempts to bolster the trading status of big banks and multi-nationals at the expense of most of the public.
Reid, who wants to cut the deficit by $2.7 trillion,
proposes doing so by enacting a broad range of two-part spending cuts. The
stick is, the cuts are not equally balanced for income, meaning blue-collar and
low-end white-collar workers who can barely afford to meet their rental
payments as it is are going to be the most heavily penalized. Boehner, who's
got something of the Golf Pro about him, proposes an almost inconceivably
ruthless $3 trillion in cuts, impacting everything from Americans' social
security payments to Medicare support.
Let's go back to the deal I was squeezed out of at the last minute. Doing a Golf Pro-style straight-strip of the company’s cost-base by cutting the flack loose and shoring up the remaining cash for the elite few is actually not the only remedy available to preserve its remaining value.
The other one is to let the
company file for bankruptcy, replace the management team, sell what it has to
sell to cover various short-term payments, and rebuild. The crucial difference
between the two options is that in scenario one, the rich guys stay really
rich, whereas in the second one, the office workers don't have to move back
into their parents' homes.
The same goes for any congressional decision to extend the US deficit: if it's extended, that's great for the money lenders and investors and software salesmen on six-figure incomes in Singapore, but it's terrible for all the suburban families in Sarasota who are now going to have to fork out the full amount for their kids' asthma attack as a consequence of the resulting cuts in Medicare.
In periods of great economic stress, it’s the often the most
counter-intuitive option that yields the best solution. In the past two
centuries, America has kicked and screamed its way to the top of the world
political and financial stage like a cocaine-fueled rock band climbing the
charts. It has done so largely by banking on its greatest asset: itself. Rather
than strip that asset back, now more than ever the country ought to go broke,
double up its investment in its own people, and bank on making a kick-ass
It's really challenging for the world’s preeminent superpower to think of itself as a bad debtor, and undoubtedly defaulting on its loan agreements will drag on the rest of the world a little (or maybe even a lot), the way a big corporation drags on the whole stock market when it files for bankruptcy. But as we have seen from events in the banking sector in the past two years, such a scenario won't lead to Armageddon, judgment day or any other kind of apocalyptic end of the world economy as we know it.
If the country defaults, money will keep flowing round the world, as surely as the great whites will swim beneath the currents of the globe's oceans after a turbulent tsunami. The difference is that once they reach the shore, most of the sailors in the water won't wind up working at strip clubs to get by.