by Willie Geist and Boyd McDonnell
Chapter OneA Brief History of the American Economy
They say if you want to understand the future, you’d better study the past. That’s great if you like sitting around reading dusty history books that smell like your grandmother’s house, but in the world of high finance, only Sallies who drive Japanese hybrid cars look in the rearview mirror. Having said that, a lot of economic losers have been asking the question lately, “How did we get here?” (By the look of things, most of them probably “got here” on the bus.) It’s a fair question, I guess, and one that can be answered with a brief, Ask Jeeves or Google– sourced study of capitalism in America.
Let’s start at the beginning, or at least at the part after the Indians conquered the dinosaurs.
From the moment the first explorers (i.e., Columbus, Vespucci, Boyardee) landed on American shores and confronted the native Indians (not the kind of Indians that answer the phone when you call the cable company and pretend they’re in the U.S. by asking if you saw the Yankee game last night), the war over the land’s dominant economic theory was on. The Indians wanted to trade @!$%#ty trinkets like beads, pelts, and sandals— the kind of stuff you buy at dollar stores and throw in the garbage a week later. Meanwhile, the Pilgrims rolled up in their tricked- out boats, carrying tables, rugs, silverware, and fondue sets. We’re talking Crate & Barrel, wedding registry-level stuff.
Notice the much higher- quality, higher- thread- count clothing on the Pilgrims than on the Indians. The Indians couldn’t even afford real hats! Dressing for success should be part of every entrepreneur’s daily plan. Despite the Indians’ lack of style, the Pilgrims were smart enough to see the long- term value of the relationship.
At first, the Pilgrims played along with the lame- ass, bead trading barter economy, but then they got understandably annoyed and decided to kill all the Indians. Sitting Bull tried to resist but he learned the hard way that, like his people, arrowheads and blowguns were relics of a bygone era. The Indians who survived the epic ass kicking bitched so much about it that the Pilgrims gave them casinos just to shut them up.
From the near extermination of an entire race of people was born a wonderful new economic system. With the Indians out of the way, capitalism was free to take its first baby steps. As Ben Franklin invented electricity, Eli Whitney discovered gin (yum!), and Steve Guttenberg gave the world the first printing
press,* (*Sometime between 3 Men and a Baby and 3 Men and a Little Lady). American entrepreneurialship took flight. Restaurants, malls, and free- standing sporting goods stores sprouted up all across the vast landscape. As a continent learned to live, work, and speak for itself, the seeds of the American Revolution were being planted right under the King’s nose.
Match the Invention to the Inventor:
Telephone USALocomotive USAModern- Day Warfare USABud Ice USARockets USAPlayboy USAFootball USA
This was just a drill to prove a point.
The real answers:
Telephone: Albert EinsteinLocomotive: Grover ClevelandModern- Day Warfare: Alexander the GreatBud Ice: Ice-T, in partnership with Bud LightRockets: General PattonPlayboy: Hugh JackmanFootball: John MaddenThe fact remains, however, that all these people are Americans
George Washington, Thomas Jefferson, and Abraham Lincoln knew the growth of their colonial economy would forever be stunted by the strong hand of the monarchy. That is, unless they did something to change that. In a secret meeting on a cold night in Pittsburgh, a group of brave American men (no broads allowed) played cards, told ethnic jokes, and wrote the Declaration of In de pen dence. No one knows for sure what was written in that mysterious document. All anyone can say for certain is that it sparked a revolution. Within days, Bostonians were dumping their Skim Chai Lattes into the harbor to protest the price of stamps. Witches were being burned at the stake in Salem. And The Million Man March was stampeding its way to Washington. The mighty British Empire never stood a chance in the face of the American revolutionary spirit. On the 4th of July, King
George III called George Washington to concede defeat and the United States of America was born. Celebrations broke out across the young nation (since it was the 4th, people already had @!$%#loads of fi reworks and picnic food for celebrating) and the nascent government moved to establish itself as a world power.
In his first act as president, Washington took out a bridge loan and ordered that a bridge and toll plaza be built between New Jersey and New York. It was to be named in his honor. But the bridge was much more than a monument to the new president. It opened up the island of Manhattan (which, by the way, some dumb Indian sold to the white dudes for a satchel of beads) to commerce. Soon thereafter, The New York Stock Exchange was built.
If the United States of America was a giant luxury steamship with two swimming pools, a driving range, and a 24-hour sundae bar, the NYSE was the engine room. People bought stocks, bonds, T-bills, triple- tax- free muni bonds, pork bellies, and rookie baseball cards at astronomical rates. Railroads were built, steel companies flourished, and American automobiles became the envy of the world (especially the Chevy Malibu). There was no stopping the American economy. It was the Kobe Bryant of its time.
Later, the Great Depression of the ’30s was blown out of proportion by the news media. It seriously was not as bad as everyone says. Even as photographs of tent cities and breadlines were splashed across the front pages of the world’s newspapers, capitalism marched forward. Some said the United States was crippled and humiliated by the economic downturn. Really? Hitler, Hiroshima, and the Communists might beg to differ. After kicking major ass in World War II and maintaining its undefeated record in wars, the story of America’s military and economic dominance echoed around the world. In 1945, everyone agreed that the United States would run @!$%#. And we did.
Since then, we have never relinquished our spot as the world’s number one economy. In the ’50s, everyone had a car and a house in the suburbs and all the women wore aprons and took their husbands’ briefcases when they came home from work. In the ’60s, many of the country’s youth began smoking hashish, growing beards, and running around naked, but America refused to be dragged down by a small group of hippie troublemakers. In the ’70s, the left- wing media made a big deal about a stupid burglary at a hotel in Washington. Obviously no one gave a @!$%#, and the economy continued to thrive. Then came the ’80s. The sweet, sweet ’80s.
Sometime in that de cade, Gordon Gecko starred in a movie called Wall Street. He wore suspenders, slicked back his hair, and made @!$%#loads of money. His performance inspired a nation. Overnight, the area where all the money people work was nicknamed “Wall Street.” Investment banks lined the streets. Raking in cash became a national pastime. Just as President Ronald Reagan predicted, everyone benefited from the mountains of money being made by the guys with suspenders. Most Americans bought European sports cars and houses in the Hamptons. As the world watched the United States with envy (with the help of the international box office success of the Beverly Hills Cop movies), it became clear that American capitalism was the only way. The Berlin Wall fell, and the Soviet Union, which had been a house of cards all along, surrendered to the United States. Capitalism’s victory was complete.
Plain English Guide to Confusing Financial TermsInvestment Bank: A bank where all the tellers wear vests.
If the international economy was a football game, America was blowing out the world by the end of the ’80s. As we continued to pour on the points, the ’90s became our end zone dance. With Bill Gates’s invention of the Internet and the dawning of the Dot- Com Boom, the United States just flat-out started to embarrass the world. We were up 50 points in the fourth quarter and still throwing bombs. No mercy, baby. Google, bam! iTunes, booyah! Kozmo com, mindspring.net, what’s up now?! The hits just kept coming. Seriously, America kicked so much ass in the ’90s, it started to get ridiculous. Incidentally, the two of us bought a few domain names* and got tons of tail during that era.
(*Including, but not limited to: www .idrivethegreen .biz, www.letsdo thisnigger.net, www.running@!$%# .org, www.sexdrugsandrockandroll.net, www.moremoneythangod .edu ).
Recent events in the world economy have led some to suggest that perhaps the American way of doing business is not the best way of doing business. Naysayers and those jealous of the success of the United States would like you to believe that the Wall Street coke parties of the ’80s and the dot-com nerd bender of the ’90s led us to this place. We implore you to ignore such shortsighted hogwash. Remember how all the dorks in Sixteen Candles hated Jake, the awesome, good looking guy who rolled up the sleeves on his button- downs and drove a Porsche? America is Jake. The other countries of the world have always been jealous of our economic coolness and they think this is their time to shine. Sorry, dorks, we’re still the good-looking one and we still drive a Porsche. It’s always gonna be that way.
Let’s Break It Down:Jake: Drives a Porsche, has hundreds of friends, lives in a mansion, nails tons of chicks.Dorks: Pay to see panties, get stuffed under glass tables, only score with chicks when Jake is cool enough to loan them his girlfriend for the night.
They just don’t get it. You see, American capitalism has been a wonderful journey. A journey that began when men in blouses and buckled shoes landed on our shores thousands of years ago. Our nation’s economic journey, like that of the men on those ships, has been, and will be, rocky at times. Sometimes we’ll stray off course when the wind hits our sheets the wrong way. Sometimes the waves of the market will lead us into stormy seas. Occasionally, half the crew will
die of rickets after eating halibut that had been left out in the hot, rodent- infested galley for four days. Sometimes some @!$%# will let his paddle slip into the water and we won’t be able to steer the goddamn ship.
Sure, staying home and sitting out the journey on the sidelines is probably safer. It’s the easy way. But the American way— the way that has prevailed since the Stone Age—requires you to pack your rain gear (and some long underwear
and energy bars), grab an oar, and look to the horizon at an uncharted sea of opportunity. If you trust Mother Nature to guide you to shore, she’ll have a bounty waiting for you when you get there. Just watch out for rocks and sandbars. Actually you’ll want to park your boat off the coast and take a smaller boat into shore. We’re starting to lose track of this metaphor. Just shut up and get in the boat.
Copyright © 2011 by the author and reprinted by permission of St. Martin’s Press, LLC.