It’s no coincidence that the multi-level marketing scheme known as AMWAY got its name from a shortened moniker of the American Way. Some parallels in the evolution, growth and eventual decline of the well known American icon are worth noting:

1) You deserve to “get rich quick” without working very hard because you know the “secret to success” formula of getting in on the “ground floor”.
2) Through a form of “leveraging” of friends and relatives, others work a little harder trying to be like you, so they can eventually get closer to the money.
3) Distribution is the key. Profit is prime. Product quality is nearly irrelevant.

Amthrax or Anthrax?

Is the culmination of these morally bankrupt ideologies the great hallmark of our American Economic Culture, in its last 50 years of decline?

The Foundation of our American Economic Culture surely rests upon society’s fascination with the “get rich quick” phenomenon. Thousands of MLMs, Ponzi schemes and just outright ripoffs descend upon us through the airwaves in unending real estate leveraging info-mercials, pyramid marketing vehicles, email spam and related frauds, all designed to part the fools from their money.

But in an exploitative culture that preys upon the naive with promises of easy money, can the so-called “legitimate” world of “High Finance” be so different?

We see the breakdown in the system of “greed regulation” leading to the development of asset bubbles through the primacy of leveraging–using other people’s money (or no money at all) to speculate on margin. We see underwriting fraud for profit. We see ratings fraud for profit. We see the inception of derivative financial instruments to hide the footprint of underlying fraud and to further leverage already inflated asset values. We see the bailouts of insolvent creditors with taxpayers covering the bad bets.

Truly, this is the defining moment of the American Economic Culture. An economic culture where traditional values based on building things that last, or actually creating a great product or great service, or investing in a brick and mortar company – is replaced by speculative betting and other forms of paper shuffling for profit.

What growth industries define the great American Economic Legacy?

1) Banking and Finance, the number one and still fastest growing industry in America where money changers bet on credit defaults, charge usury interest rates, and drive a volatile pump and dump scheme of “investment” wagering to pillage 401K and pension plans, etc…nothing is invented, cured or discovered, but rather paper is traded for profit.

2) Litigation, where the economic players prey upon one another using the judicial system to skew risk and reward for financial gain. Ambulance chasers, bankruptcy attorneys, medical malpractive–you name it. Again, nothing of any great utilitarian benefit to society is created, cured or discovered–just more money changing under the convenient guise of “justice”.

3) Health Maintenance Organizations. With the planned destruction of Medicare and Medicaid in the Obama comparative effectiveness rationing bill, how could we forget this one? What a huge industry with trillions in profits devoted to the cause of rationing or denying health care. Nothing is discovered, cured or created, other than ways to deny healthcare while still collecting insurance premiums. 

The list goes on, but these three examples are relevant enough to make the point. In a world where fantasy paper shuffling replaces factories, industry, science, reasearch and innovation, the profits do not come from thin air as the illusionists on Wall Street would have us believe, but rather they are extracted from direct predation upon these underlying physical economies, causing these sectors to collapse, as with the auto industry, other machine-tool industries, raw materials manufacturing, hospital and healthcare infrastructure, etc..

It is far too demeaning for the American Economic Culture to be instilled with an actual work ethic, therefore all physical labor must instead be outsourced to developing countries whose citizens will slave all day for pennies. And when the long standing American icons of industry do turn a profit, in comes the administrative layer of the UNION in the form of the UAW or the Teamsters whose job it is to collect benefit dollars while devising schemes to restrict pension payouts so that ”Union Officials” can collect salaries. It is no wonder that such industries turn to the smiling parasites in Finance as the last resort to their own collapse.

In this devouring clture of the American Way Economy, where paper pushers and money changers prey upon the real physical economy for egregious profits, speculating and leveraging the paper world into a massive unsustainable derivatives bubble, is it any wonder how our current economic crisis originated?

Systemic risk will always be tied to a systemic failure of moral and ethical values in a system such as this. As long as the systemic breakdown of morality and work ethic predominates the American economic culture, the systemic risk inherant in it’s presumption of wealth without basis can NEVER be contained.

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