Professor X: Reports from Iceland

Dear Kids,

This is Prof X reporting, special from Iceland, epicentre of the Global Economic Meltdown.  Sadly, the acronym for that, ECOGEM, doubly describes Iceland. I am sitting here in a Reykjavik hotel, watching Eddie Murphy and Nick Nolte in 48 Hours on British TV, which seems to be the only kind of television you can get in Iceland.  Actually, 48 Hours is exactly the kind of silly buddy comedy that can help the hapless Icelanders keep their minds off the fact that their entire country is now worth less than a Japanese super-tanker full of crude, and that’s after the recent fall in commodity prices. Plus, it brings to memory the early 80s, the early pre-classic Reaganomics era, back when we still stood a chance.  But since we failed to fight back, here I am reporting from Iceland. Seriously.

Since I was here on academic business anyway, I spent part of one afternoon doing all my Christmas shopping for the price of a really good dinner for two in Montreal.  All the Icelanders are wondering what the hell happened.  I started explaining it to the nice older gent who gave me a lift from Reykholt to Reykjavik through a raging snowstorm.  So while I’m at it, I’ll explain it to you as well. That way, when it happens to us, you won’t have to wander around in a daze for a couple of months, trying to decide whether you’re awake or dreaming. I’d hate to see Montreal like that.

It all started in the mid-60s, half a world and several climate zones away from Iceland, in Indochina (look it up – now).  Back then, everyone in the US was afraid of the Communists, especially bankers.  Somehow, it was felt that fighting Communists involved doing things like watching helplessly while the Social Democrat president of Chile committed suicide by repeatedly shooting himself in the back with several automatic weapons, or maybe by mixing up your Christmas card list, turning the ARVN against Ngo Dinh Diem (look it up – now).  The thing is, all those pleasantries costed money.  Political assassinations are 90% logistics and 10% trigger happiness.  Worse, they cost political capital.  As that well-groomed Michael Corleone used to say, blood is a big expense.  The people in the White House usually aren’t bothered about a bit of blood, but the people in Congress are paid to watch the expenses, both in money and in blood, and there are many more of them to convince about the value of any “investment”.

Sometime in the early days of the Viet-Nam unpleasantness, the CIA was arming Montagnard tribes (look it up – you know what I am about to say) near the Laos border.  The Montagnard didn’t like the Viet-Cong at all. But instead of going through the quaint, properly republican, but incredibly boring formality of getting appropriations from Congress for those weapons, someone at CIA had the bright idea of doing a bit of commerce.  After all, they were operating in the border areas of Indochina.  A bit of drug running would be easy to setup, completely under the radar, would generate a bit of money, and besides, the Brits had done it for decades.

Lack of oversight is like crack laced with meth, dipped in heroin.  Not only does it make you feel fuzzy all over, but once you’ve had it, you’ll do anything for more.  By the early 80s, the CIA was financing significant international operations from the proceeds of the triangular Nicaragua-US-Iran trade in drugs and weapons.  Not only did the CIA have a black budget allowed them by Congress, they had a black budget of their own.

That’s when the real trouble started.  It was inevitable that some highly paid federal employee with a geostationary clearance would eventually connect the dots.  If the CIA can finance its unsavoury operations largely with its own independent funds, without having to ask the bleeding hearts and girly men in congress, can’t the whole executive branch find a way to finance itself?  Imagine the party.  Invade insolent small countries at will.  Crash the commodities market as a practical joke on your Russian pals.  Redistribute wealth to your friends and family.  Be a big man.  Who could resist?  Well, I probably could, but I’m Professor X, not W, Y, or Z.

The first idea was to setup a situation in which Congress couldn’t possibly refuse appropriations requests.  A sort of new Pearl Harbor, maybe.  Then, you could ask for 400 billion to pacify Iraq, and not pacify it, but say you did.  Meanwhile, you could funnel the money to various corporations that would invest it for you (minus their cut) so you could work off the proceeds.  This was the Montagnard drug-running thing times a gazillion.  No more penny ante assassinations.  Now, you don’t have to stop at murdering Lumumba or something (you know what I’m gonna say), you can just invade the country and take over the mines.  Much less uncertainty.

It worked for a while, but the need is powerful, and the addiction is great.  Besides, there’s still some money left in the treasury, and that damn Congress is starting to ask questions.  Even the tame media is getting uppity, but not often, and very politely.  Almost like they’re afraid of a “Classic one-car sleeping-driver accident” (Google that).  So how do you get the remaining money?

First, you get the taxpayers to give you a trillion dollars in bank deposits.  Then you give yourself the trillion, and you invest it in the stock market, driving it to ridiculous heights.  When the bill is due, you tell congress that the trillion is gone, and if they don’t do something right quick, the world is going to end.  The taxpayers, scared out of their minds, give you a trillion dollars to bail yourself out.  You sell everything that the original trillion bought you, thereby crashing the market.  You take the new trillion, and you buy low.  Savvy?  You’re set.  Congress and the American people are broke, the executive has got a stash that’s paying off nicely, all the right people have made money, and will keep doing so, and the Chinese are holding a bunch of worthless paper.

Meanwhile, you continue to wonder whether McCain or Obama is the least worst.  Keep your eye on the ball, kids.

~ Professor X