“Boiling The Whale;

Excerpted from; ” Imperial Masquerade” by Louis H. Lapham Harper’s Magazine April, 1985….. Sooner or later it undoubtedly it will occur to somebody in the Reagan (Trump) Administration to put the federal government up for sale in a series of leveraged buyouts. Given the Administration’s childlike faith in capitalist mechanics, as well as the budget director’s unhappiness with the idiot economics of the nation’s schools, farms, and military establishment, I’m surprised that the First Boston Corporation hasn’t been hired to plot the courses of destruction. Within a week of the first sale, the deficit and the National Debt would vanish as if in a magician’s smoke. The Dow Jones industrial average would gain 4,000 points in a matter of days, and everybody lucky enough to command the necessary lines of credit and political patronage would make a truly American killing. The financial play makes sense once government is defined as a “smokestack industry.” Government so defined meets all the specifications of a dying enterprise—-Heavy debt, inflated wages and pensions, incompetent management, noncompetitive prices, dwindling markets for its product. Relatively few people still take the trouble to vote, and the population under the age of twenty-five has learned to think of Washington as a stage set for a Sunday morning television show in which six journalists talk to one another in a language almost as weird as Latin. Government’s decline into senescence has been apparent for a generation. It is the reason Ronald Reagan (Trump) has been twice elected President, why the public schools resemble vacant lots, why Bernard Goetz was not indicted for the attempted murder of four black adolescents on a New York subway train. Private companies now operate prisons as well as aircraft control towers and fire departments. In their effort to teach the help to read and write, American corporations spend as much on education every year ($60 billion) as all the public and private universities in the country. Last year the nation paid $21.7 billion for the varieties of private police protection, as opposed to $13.8 billion for public law enforcement….. The Administration’s current budget proposals lack the courage of both its greed and its convictions. It isn’t enough merely to sell Amtrak, eliminate the Job Corps, dismantle the Small Business Administration, curtail payments for student loans. Although admirable as symbolic gestures, none of these subtractions supplies the virtue of additional revenue. Nor do the presidents investment counselors show a proper respect for the entrepreneurial spirit to which the President’s speech-writers pay the homage once owed to Caesar and the king of England….. For several years now the speculators on Wall Street have been giving regularly scheduled lessons in the arts of pillage and extortion. Hardly a day passes but that some undervalued oil or communications company doesn’t fall prey to Ivan Boesky, T. Boone Pickens, or the Bass Brothers….. The simplicity of the leveraged buyout complies with the norms of low cunning that appear to be habitual among the gentlemen so comfortably seated in the Boardrooms of the Reagan Administration. When correctly managed , the transaction redistributes the wealth to the already rich, which, as every college sophomore knows, is the great and guiding purpose of the American Dream….. The acquisitors begin by identifying a company that holds assets worth a good deal more than its purchase price. they then borrow the money to buy the property, but instead of trying to preserve it they reduce its various productive organs to the liquid forms of cash and tax manipulation. The process is not dissimilar to flensing, boiling, and trying out the carcass of a Sperm Whale……The acquisitors repay their loans with the money distilled from the liquidation of the assets; they also pay off the company executives who expedited the sale, ushering them safely to the door with goodbye presents often worth $10 million or $20 million. After subtracting these tax deductible opportunity costs, the acquisitors divide the remainder of the spoils and issue a press release about the great blessing they have conferred upon the stockholders and the American future. In New York they sometimes pose for photographs with Mayor Ed Koch….. The Federal Government clearly is an undervalued asset. The budget director, David Stockman, recently described it, with an accountant’s ait of faint distaste, as a “blooming, buzzing mass of programs, projects, commitments and purposes.” Testifying before Congress about the arithmetic of the deficit, he seemed to blame the government for chronic disorderliness. Certainly he thought of government as a nuisance; conceivably he hoped that somebody, perhaps the Koreans, would win it in a raffle….. Among its various possessions, the government owns one third of the nation’s landmass as well as 2.6 billion square feet of office space (equivalent to all the office space in the country’s ten largest cities, multiplied by 4; the government is also the world’s largest hospital system operator, shipowner, and insurer. Measured by anybody’s appetite the federal body politic offers a feast for 1,000 crows….. Before dismembering the corpse it first would be necessary to incorporate the entity in Delaware and to assign it both a trading symbol (USA) and an opening stock price. Some of the subsequent deals would be easier than others. The real estate, especially the California, Florida and Long Island beaches, presumably would attract syndicates, organized by the Administration’s friends—by Frank Sinatra, Betsy Bloomingdale, the Bechtel Corporation, Jerry Zipkin, Johnny Carson, and the Heritage Foundation. A few Third World states (those that minded their ideological manners) could be given an interest in the agricultural properties, which would improve their trade balances as well as reduce their debts to the New York banks….. The sophisticated deals might require a little more thought, but I can imagine at least a few of the prospective buyers and possible lines of commercial reasoning…… MT.RUSHMORE—The Chrysler and Trump organizations almost certainly could be inveigled into a competitive auction. The chief executive officer might wish to carve his own image into the face of the cliff…… THE INTERNAL REVENUE SERVICE—Merrill Lynch and American Express presumably would wish to extend the range of their financial conveniences. All debits and credits would appear on a single monthly statement, and customers could return to the happy condition of children living on an allowance…… THE NUCLEAR ARSENAL—The Soviet Union would make a generous tender offer, probably through a Swiss intermediary, but some of the more provincial members of Congress undoubtedly would object for reasons of fear or conscience. This might require selling inventory , in odd lots and at less attractive prices, to the Germans, the Japanese, or a consortium of South American colonels. THE STATE DEPARTMENT—Harvard University could receive it on terms offering extremely favorable tax advantages. The University could approach the alumni with yet another unprecedented appeal for funds. McGeorge Bundy and John Kenneth Galbraith could explain why the State Department would serve as an important research facility for the John F. Kennedy School of Government…… The Capitol and the White House—The Washington Post or Walt Disney Company might buy one or both buildings as a corporate headquarters…… The Military Services—These could be offered to the larger corporations, both domestic and foreign. Because most wars come about as a result of economic quarrels, the multinational corporations , like city-states of the Italian Renaissance, should have the decency to pay their own troops. The soldiery could be fitted out in splendid uniforms bearing the insignia of Sony, CBS, Volvo, IBM, and British Airways. Some of the smaller formations (The Marine Corps, say, or the Coast Guard) conceivably could be sold to wealthy individuals, to big city governments, or to Arab Princes….. THE CIA—Perceived as an archive of scripts, the agency ought to attract excited bidding from HBO, Simon & Schuster, Tri-Star, and Warner communications………………………………………………………… Thanks to the Greatest Essayist Ever; Mr. Louis H. Lapham……

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