The Vigorish is Too High

“Vigorish,” noun: the House’s cut, the take, the juice, interest paid to a loan shark. Sometimes abbreviated as “the vig.” Currently being used by the Masters of Money to bleed us white.

The Masters of Money are murdering American capitalism. They are taking too much off the top. The vigorish is too high.

Masters of Money go by many names: bankers, hedge fund fixers, private equity ghouls who buy perfectly good companies, kill them with toxic debt, and feast on the carcasses.

But, whatever you call them, you’ll find them at the fountains of the Really Big Bucks, taking their cut, getting their vigorish.

Thus it is now, thus is how it has always been, under any economic system you care to name. The big boys get the vig first. That’s not the problem. The problem is that the vigorish is too high.

What are the symptoms of a society systematically being skimmed to death by the Masters of Money?

When people complain about income inequality gone berserk, when communities bemoan the end of mom and pop businesses, when governments don’t have the resources to keep the teachers paid and the libraries open, when there seems to be tons of money everywhere except where it’s really, really needed—you are seeing the pathologies of a too-high vigorish.

When the vigorish is too high and greed knows no bounds, the incentives to “go Madoff” are irresistible. There are more bogus, fraudulent fortunes, built—no, stolen—in the financial world than in all other industries put together. Including snake-oil, baldness cures and Enzyte, the male enhancer.

When the vig is too high, the line between moral business practice and thieving avarice is so faint, so easily blurred, so often crossed and re-crossed, that without proper laws and policing you wind up with, well, you wind up with what we have now.

We need to change the incentives. You can’t appeal to these peoples’ consciences, even if they had any. They think they’re doing God’s work. Just ask them.

The Masters of Money will tell you they’re not overpaid. It’s not their fault, they say. It’s the market’s. They say their compensation is grotesquely bloated because that’s how the market values their expertise, their rarity, their genius.

Don’t believe that for a millisecond. The bankers, the hedge guys, the Wall street market-makers and multinational finance bosses: that’s a club. They set the terms of admission, they say who’s in and who’s out, and they set the vigorish.

And right now they’ve set the vig at blood-draining, vampirish levels. Jobs are down, pay is down, tax revenues are way down, but in the catacombs of cash, where all was panic and woe a year ago, until the American people borrowed several trillion of their unborn children’s dollars and gave it to them, it’s happy times again.

Record profits and bonuses, Goldman through the roof, banks rushing to pay off the TARP funds, money they took from the government—our money—in 2008, with new money the Fed—once again, our money—dumped into the markets in 2009 so they can get the government—meaning us—off their backs and drink our blood with even fatter straws.

Products and services, companies that make things and take care of people, are small change. They come and go. There used to be Pontiacs and Pacers, I remember Tower Records and Crown Books, Circuit City went away, so did Woolworths and Pan Am and Commodore Computers.

But the bankers that financed these and more, the Money Masters? Oh, the names may change to protect the guilty, they merge and buy one another, default, shed debt to the peons and do it all again, but they never go away. And they never take less than what they think is their fair share.

How do they decide what is their fair share? Simple. First they take as much as they can get away with. Then they double it. And they keep doubling it until their vigorish almost kills the host they feed on. Us. Then they tell us that we’ll die if they die, so we have to loan the loan sharks yet more money. And what is our vigorish for that vital service?

Why, zero, of course. Why should we get a cut? Who do we think we are, The House? We’re not. It’s their house. We’re just renting.

I don’t know what we do about this, except maybe impose some Chinese justice. But let’s at least be honest with ourselves and call this confidence game by its real name.

That TARP cash, the zero-interest loans, the untold trillions the Fed is pumping into the financial system, those aren’t bailouts, or rescues, or stimulus packages.

It’s protection money, pure and simple. We either pay the vig or they trash the store. They threaten, we cave. They’re headbreakers, we’re the poor suckers who can’t keep our heads above water. And we never will.

Because the vigorish is way, way too high.