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Belmont Club

The Teahouse of the August Mood

August 29th, 2011 - 11:56 am

The extremes of governments influence over commerce are illustrated by two stories. In Massachusetts a 12-year old’s green tea stand was shut down by the State Police while in Washington state, the Feds Sign Off on Boeing’s 787 Dreamliner.

The FAA presented Boeing with a type certificate and production certificate for the innovative composite airliner during a ceremony at Boeing’s factory north of Seattle. The pieces of paper mean the Dreamliner can begin commercial service, and they represent the culmination of several billion dollars of investment for the aerospace giant and almost as many headaches. …

But unlike other Boeing models, in which much of the manufacturing occurs in Everett, the 787 is assembled from subassemblies manufactured in several countries and flown to Washington in modified 747s called Dreamlifters.

A short list of the parts built outside Everett include fuselage sections made in Italy, Japan, South Korea and the United States. Floor beams are built in India. Wing sections come from Japan. The doors and landing gear are made in France and Sweden. Portions of the tail are made in Italy and South Korea.

In addition to distributing some of the cost and risk, the global supply chain was also a way to make friends in countries where Boeing wanted to sell the 787.

Selling any product from green tea to a jetliner now involves government at many levels. The attitudes of the press toward lobbying in high places has oscillated between regarding it as the hope for a better tomorrow or the mechanism through which the players rule the citizens. Today ‘progressives’ tend to the former. In the early 20th century government involvement was regarded as the latter — a vehicle for imposing the will of the rich.  So today we want more of it, and the rich are willing to pay to see that we do. Warren Buffet recently wrote in the New York Times that he had benefited so much from government intervention that he was willing to kick some of it back into the till.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

He proposed to remedy the situation by paying more taxes but not by altering the the power of government to influence the ways in which his money was made. Buffet picked the metaphor of “spotted owls” to characterize how government cherishes a protected species. Back in the 19th century the idea of favoritism was expressed in more directly political terms. The role of government was to ensure ‘capitalism for the poor and socialism for the rich’.  The poor could go to work. The rich could make a deal.

In the early 20th century the hate figures were not bankers but industrialists and especially arms manufacturers. The best known was Basil Zaharoff, the original Man of Mystery, the chief salesman for Vickers, at one time perhaps the richest man in the world and from his Balkan origins the possible inspiration for Keyser Soze.  Zaharoff certainly inspired a lot of fiction.

  • In the Tintin album The Broken Ear, Zaharoff is parodied as the weapon trader Basil Bazarov.
  • Zaharoff was portrayed by Leo McKern (of Rumpole of the Bailey fame) in the 1983 ITV series Reilly, Ace of Spies.
  • Zaharoff was depicted in the “Lanny Budd” series by reformer Upton Sinclair.
  • Rayt Marius in Knight Templar and The Misfortunes of Mr. Teal, featuring Leslie Charteris’ the Saint, appears to be based on Zaharoff.
  • Church of Satan founder Anton LaVey included Zaharoff on the dedication page to The Satanic Bible.
  • In his novel A Coffin for Dimitrios, Eric Ambler is claimed to have patterned Dimitrios on Sir Basil Zaharoff.
  • Zaharoff appears in Thomas Pynchon novel Against the Day.
  • In Ezra Pound’s “Canto XVIII” and “Canto XXXVIII,” Zaharoff makes numerous appearances under the name “Metevsky.”
  • Zaharoff was one of the inspirations for the unscrupulous arms manufacturer Andrew Undershaft in George Bernard Shaw’s play Major Barbara.
  • Zaharoff is a character in the novel The King’s Commisar by Duncan Kyle.
  • ‘Zaroff’ is an unscrupulous arms dealer in the Tom Mix serial “The Miracle Rider”.
  • Some aspects of Zaharoff’s life were used as the basis for elements of Citizen Kane.

But only a very few referred to him by his real name.  And maybe there was no point. His name, like everything else, was partly an invention.  John Flynn described the curious internationalism of Zaharoff. He belonged to no nation and therefore was a transcendent figure of sorts. Nobody was sure where he was born, how he got his start in life and to who he owed his loyalty. All anyone knows was that he was suddenly there.

It was never known with complete certainty to what country he owed allegiance. He was a Greek, born in Turkey, who lived in Paris. His right to the ribbon of the Grand Cross of the Legion of Honor was questioned in the Chamber of Deputies and M. Clemenceau had to assure the Chamber that “M. Zaharoff is a Frenchman.” But also he was throughout his life the guiding genius of a great British armament concern, acted as a British agent, was a Knight of the Bath, known in England as Sir Basil Zaharoff.

Journalists said he spoke fluently fourteen languages — which is probably an extravagant exaggeration. They reported how he had confided to a written record the story of his life, filling fifty-eight volumes which he ordered to be burned at his death, while others told how he had himself destroyed the record, two days being consumed in reducing it to ashes in the furnace of his Paris home. …

Zacharias Basileios Zacharias — later to be known as Basil Zaharoff — was born October 6, 1849, apparently in Mugla, near the Turkish capital of Angora. His people were Greeks who had lived in Constantinople, fled to Odessa during the Turkish persecutions in 1821, returned to Mugla, and then, when Basileios was three years old, took up their home again in the Tatavla or poor district of Constantinople. The boy went to school until he was sixteen, when some disaster to his father forced him to go to work. He worked, we are told, as a fireman, a guide, a moneychanger. …

When he was twenty-one he found work with an uncle in Constantinople who had some sort of mercantile business. One day Basileios disappeared, taking with him money from the cash drawer. The infuriated uncle traced him to London where he was arrested. How or why he was arrested in London for a crime committed in Turkey is not made clear.

It is immediately clear that Zaharoff’s biography contains many of the “mystery” elements that characterize George Soro’s — not that anyone wants to compare the two. But in terms exotic detail, strange backgrounds and sudden turns Soro’s biography would at least give Zaharoff’s a run for his money.

Soros was thirteen years old in March 1944 when Nazi Germany occupied Hungary. Soros took a job with the Jewish Council, which had been established during the Nazi occupation of Hungary to carry out Nazi and Hungarian government anti-Jewish measures. …

Later that year, at age 14, Soros lived with and posed as the godson of an employee of the Hungarian Ministry of Agriculture. On one occasion, the official was ordered to inventory the remaining contents of the estate of a wealthy Jewish family that had fled the country. Rather than leave the young Soros alone in the city, the official brought him along. The following year, Soros survived the Battle of Budapest, in which Soviet and German forces fought house-to-house through the city.

Soros emigrated to England in 1947 and, as an impoverished student, lived with his uncle, an Orthodox Jew. His uncle paid his living expenses while he attended the London School of Economics, where he received a Bachelor of Science in Philosophy in 1952. While a student of the philosopher Karl Popper, Soros worked as a railway porter and as a waiter. A University tutor requested aid for Soros, and he received £40 from a Religious Society of Friends (Quaker) charity. He eventually secured an entry-level position with London merchant bank Singer & Friedlander.

And the rest, as they say is history. At least what you can find of it. Now Soros is the capitalist who hates capitalism. Maybe because he would have to give up socialism for himself. Flynn wrote that despite everything that had been written about the Zaharoff, there almost nothing about his inner core. The words Flynn wrote of Zaharoff would apply almost equally to Soros: here was someone who realized for his youth that everything was up for sale and who must soon afterward have realized that governments had to be established to protect society from people like himself.

There is more than a hint that these early years were passed amid rough surroundings and that this impulsive and somewhat lawless boy — like one of our prominent labor racketeers, to use his own explanation of his twisted ethics — suffered from lack of ‘bringing-up.’

What nobody really knows for sure is whether such protections really extend to protecting the general population from the Zaharoffs or whether they are merely there to prevent parvenus from upsetting the established apple-cart.

Either way you need a powerful government.

The program of ‘capitalism for the poor and socialism for the rich’ can only be implemented by a state with the power to take  away money from the earners and regulate industry;  it can only be accomplished by a government that can tell Boeing where to build its products and prohibit kids from setting up green tea stands. It can only be accomplished by a government that can effectively take sides in the matter of who makes the billions.  Does Soros want it to protect people from Soros or to shelter Soros the spotted owl from other spotted owls?  Salena Zito writes that President Obama has depicted himself as the plaything of the winds and tides, fortune or fate, God and the Devil.

he has blamed the stagnant economy on ATMs, ditches, Slurpees, corporate-jet owners, the Tea Party, Republicans, Japan’s earthquake, the Arab Spring, the Arab Summer, George Bush, and “fat-cat” Wall Street something-or-others.

And so he wants more power to tame the unruly weathers. But Paul Gregory at Forbes argues that Obama has to point the finger to hide the fact that he already has power; and what we see are the consequences rather than the shortcomings of immense influence. He has to point his finger to draw attention away from his hand. If government is not something that stands above corporations but something that chooses some corporations over others then government needs more power to select more winners.

He’ll advocate a second stimulus. He may be flanked by his jobs commission, headed by the CEO of General Electric, which earlier issued a lame interim jobs report. His speech will not be about jobs. Instead, it will be a campaign speech in disguise.

Obama cannot propose a real jobs program. His constituents would rebel. A real jobs program attacks too many of the core beliefs of his party, such as minimum wages and higher taxes on the better off.

“His constituents” would be special interests — as the Republican Party’s constituents have been special interests. And special interests are another way of saying “capitalism for the poor and socialism for the rich”. Pointing is another way of saying, ‘I am choosing sides’.

Is activist government something that is all around the modern business environment? Watchful, waiting, always there. Or is it just a bogeyman imagined by bitter, clinging hillbillies to explain a sudden change in circumstances? The billions of people on this earth can’t really be ruled by people whose birthplace we can’t even be sure of, whose pasts are shrouded in mystery, can they? That is the stuff of old wives tales. We live in a rational, post-religious world where neither God nor the devil exist. Or so we hope.

Verbal Kint: He’s supposed to be Turkish. Some say his father was German. Nobody ever believed he was real. Nobody ever knew him or saw anybody that ever worked directly for him. But to hear Kobayashi tell it, anybody could have worked for Soze. You never knew; that was his power. The greatest trick the devil ever pulled was convincing the world he didn’t exist. One story the guys told me, the story I believe, was from his days in Turkey. There was a gang of Hungarians that wanted their own mob. They realized that to be in power, you didn’t need guns or money or even numbers. You just needed the will to do what the other guy wouldn’t.

Agent Kujon: Do you believe in him, Verbal?

Verbal Kint: Keaton always said, “I don’t believe in God, but I’m afraid of him.” Well, I believe in God — and the only thing that scares me is Keyser Soze.

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