My friend Bob has been in a Convalescent Home for ten years now. He had a heart bypass nearly a decade ago, and something went wrong. He suffered a massive stroke, and he has been bedridden ever since. Bob was a great horse player, and I always liked his stories about Chicago in the old days.
Every once in a while, the gamblers would fix a race. The jockeys riding the other horses would pull their horses to the side, and let these longshots win. The crowd would see this, and they would grow angry, and sometime soon after that a fire would break out in the grandstand, usually late at night, when no one was around.
At this point, his wife interrupted him.
Why did they do that?
Because it was sweat money. They were playing with wages, and they worked hard. It was a blue collar race track.
Investors in todays stock market are betting on a Boat Race.
The term Boat Race is slang for any fixed sporting event. The term probably applies to the stock market and the economy as well, since the Fed recently met its obligation to provide money to the bankers who hold the loans which working Americans have taken out on their homes, and maintain an orderly market. Many of us depend on this economic bailout, the Boat Race benefits the majority of Americans. Why would we want to bet against it? The full force of the United States Government stands behind this effort, logic suggests this course of action.
The Boat Race in this economy has been rigged to guarantee a favorite in every race. Sure new companies come to Wall Street every day, and they compete, in a fair and open competition. If their product is a better product, and they sell it at an attractive price, they will be rewarded by shareholders, and investment bankers. Booyah.
Why would anyone bet against our horse? The favorite always wins, which is the basic assumption, and a statement of our current economic condition. It is in our interests that it should continue to happen this way. Now the biggest stakes of the season is probably the GDP Stakes. The favorite needs to win this one, or it bodes poorly for the rest of the year, and the crowd is betting the rent money on the favorite, Federal Reserve. We know the owners of Federal Reserve will bet heavily on their own horse, if his odds should drift a bit high, and another horse appears more likely, let's call this dark horse, Recession.
We can't let Recession win, because today Recession is running as a couple entry, with his stablemate, Depression. Remember the favorite always wins.
We have reason to fear the entry, the barn hasn't had a win a long time, the horses are eager to run, and if they run one two, the favorite will probably be out of the money, leaving the bridge jumpers, bettors who bet great sums of money on heavy favorites to show, broke.
We have given the gamblers all our money. We are betting on the Boat Race, and it seems like there is no way we can lose.
I've seen a few Boat Races in my time, although watching rigged horse races is a bit like watching UFO's, most people will agree they have seen something unnatural, they can't be sure of what it was. The races I have seen usually happened on the last day of the meet, and the winner was usually either a hard luck stable, or a hard luck jockey. Sometimes the stable needed the money just to get out of town, and move on to the next track on the circuit. Horse racing always took care of its own. There wasn't as much easy money floating around in those days. Things were very much as Damon Runyan portrayed them.
In a real recession there are a number of winners. Investors and businesses looking to put some cash to work for instance. At the current inflated rate of construction costs, many businesses are holding back on investment. While this economy keeps growing, it is not expanding. Which politician can afford a Recession on his watch? Therefore when the betting comes in on the dark horse, the Secretary puts in a call to the owner, and by the next click Federal Reserve is once again the favorite to win the GDP stakes, which is a Boat Race extraordinaire, where the favorite always wins.
What's in it for the losing jockeys and trainers? Well they have all their money bet on Federal Reserve too. Nobody else is even trying. And when Federal Reserve goes to 1-5, some of the bettors say enough, I'll spend my money on a hot dog. The track owners are not pleased with this, because the next thing you know people will go to ball games instead, or put their money in their mattress.
Then just moments before the gates open, the betting changes. Suddenly the money that was bet on Federal Reserve, shifts over to the coupled entry, Recession and Depression. The crowd runs to the window to try and change their bets, but it is too late. The gates open, and the jockey on Federal Reserve takes a snug hold of his horse, guides him to the outside, and pulls him out of the race at the quarter pole.
The entry runs one, two. What happened? Some rail birds are charging that the owners of Federal Reserve didn't like the odds, so they pulled the horse out of the race, to save him for another day. Others note that the owners bet on the other horse, but of course they can't prove it. The owners of Federal Reserve sit on the Race Track Committee as well.
The truth is, an economic recession benefits investors who have cash they need to put to work. Recently the Federal Reserve and the Treasury have printed huge bundles of hard cash, a trillion dollars or so. They need to put that cash to work, and after all their interests are the same as yours, aren't they? Unless of course you were foolish enough to bet on their horse, and lose all your money? They know they will win more runnings of the GDP Stakes than they will ever lose, and cash is still the best thing to have in your pocket, and cheating a few blue collar chumps, who should know that gambling is really just a pleasant diversion created to give the aristocracy something to do with their idle time.
The rest of us are meant to work hard, die broke, and leave no lasting legacy to the creation of an empire, which has sustained them.
for those who want a different take read "Against the American Dream, Essays on Charles Bukowski" by Russell Harrison. Bukowski wrote poems and race track stories about Los Angeles for half a century.