DON'T ASK (For Whom the Bell Tolls: it
Tolls For You)
We Were All Asleep at the Switch

When trains are roaring towards each other on
the same track, the switch master pushes a but-
ton that sends one of the trains onto a siding while
the other goes safely by. If however, the train
master is "asleep at the switch," shit happens.

While our present economic train wreck was seen
coming by many and warned against by a few, the
folks in charge have been sleeping soundly, lulled
by market myths that have become religion, and
thrilled by bed-time stories of magic geese laying
golden eggs.

The forgotten truth of markets is that they always
crash. Have since Roman times, and whoops! They've
done it again! Peter Drucker wrote a prophetic book
(Post-Capitalist Society) in 1993 that predicted the
type of crisis we are now entering. He didn't know
the outcome of course, and said that no one really
understands the consequences of the knowledge re-
olution.

Noting that the major stock holders in most of our
companies are the pension funds consisting of defer-
red wages of retired employees, he foresaw that at
some point these passive masses of corporate owners
would become restive over the unsupervised and un-
controlled gambling of their desperately needed pen-
sions for the amusement and enrichment of people
they had hired as their fiduciarys to make their money
grow.

Drucker pointed out that there is neither rhyme nor re-
son for the totalitarian rule of our corporations and the
lack of participation in their control by their true and
actual owners. Said owners have been lulled (and gul-
led) by the largely fictitious assurance of a "fiduciary
relationship" existing between management and owner-
ship. If your lawyer, without your permission, flings
away your money in Las Vegas, he will be disbarred
by his state bar association. He violated his fiduciary
relationship. Our corporate managers however, have
been gambling with our permission, because our fund
management has kept reelecting to corporate boards
people in league with in corporate management. They
have thereby gone along with the careless, foolhardy
gambling going on.

Profits are the reason, the magic charm that sooths all
fears and disarms all caution. And as Drucker points
out in perhaps his most salient observation: "there is
no such thing as 'profit.' There are only costs: costs of
the past (which the accountant records) and costs of an
uncertain future. And the minimum financial return
from the operations of the past that is adequate to the
costs of the future is the cost of capital." (p. 81)

We are now understanding at last the meaning of "future
costs" that Drucker was referring to. We understand
also that "life jacket capitalism" will only save those at
the top of the ladder. The rest of us better be good
swimmers!

So all these years we have been soothed and charmed
by phantom "profits" that don't really exist. Like Esau,
we have sold our birthright for a mess of stew, and now
we are stewing! To enjoy these fake profits we have had
to be oblivious to the necessary pauperization of much
if not most of our working class, the degradation of our
infrastructure, the despoiling of our environment, the
neglect and weakening of our educational system at all
levels, the break down in health delivery, and on and on.
Undoing all this damage will just be some of the costs
of the national binge we have been enjoying.

More on this later.