Episode 65: Edward Lewis = Speculation, Mergers, and Lack of Production in the US Economy

Richard Gere's Pretty Woman character Edward Lewis embodies the speculative, consumption-driven aspects of the US economy. All problems can be solved by throwing money around. Don't get emotionally involved in business. Don't make anything and don't build anything. Just chop businesses up to make more money.  

Links:

https://www.imdb.com/title/tt0100405/

https://causeyconsultingllc.com/2023/02/24/gordon-gekko-tried-to-tell-you/

https://www.buzzsprout.com/1125110/14704980

https://causeyconsultingllc.com/2024/03/24/actually-it-makes-perfect-sense/

https://consaracytheories.com/blog/f/battling-wall-street-part-3

https://www.amazon.com/Battling-Wall-Street-Kennedy-Presidency/dp/1615776680

Need more? You can visit the website at: https://consaracytheories.com/ or my own site at: https://saracausey.com/. Don't forget to check out the blog at: https://consaracytheories.com/blog. 

Sara's book Decoding the Unicorn: A New Look at Dag Hammarskjöld is available now! Click here to buy it on Amazon. 

Transcript

Transcription by Otter.ai.  Please forgive any typos!

SUMMARY KEYWORDS

Edward Lewis, Pretty Woman, consumption vs production, US economy, Gordon Gekko, Wall Street, crony capitalism, economic inequality, speculation, Kennedy presidency, investment tax credit, economic policies, financial crisis, subprime mortgage, economic growth.

Welcome to con-sara-cy theories. Are you ready to ask questions you shouldn't and find information you're not supposed to know? Well, you're in the right place. Here is your host, Sara Causey.

Hello, hello, and thanks for tuning in. In tonight's episode, I'm going to talk about how the character Edward Lewis from the film Pretty Woman, represents speculation, mergers and a lack of production in the US economy. Over on my business blog, I've written extensively about the fictional character Gordon Gekko from Oliver Stone's film Wall Street, and then from its sequel, Wall Street Money Never Sleeps. Yes, he's a fictional character, but not as fictional as you might think. In so many ways that character tells you how the world actually works, definitely how the world of crony capitalism actually works. The lessons that he gives to bud Fox are terrifying, accurate, depressing, etc. In this episode, I want to talk about how Edward Lewis, even though he's seated in this Hollywood version of a fairy tale, the hooker with the Heart of Gold trope, etc, he really does represent something beyond that. Pick out a frosty beverage of choice, and we will saddle up and take this ride. I'm passionate about this topic of consumption versus production, and I recorded an episode for my daytime business podcast that was actually based on a blog post that I wrote on my daytime business blog about how the economy actually does make sense. I'd read this article from Fortune where someone was saying, the economy doesn't add up. I'm making all this money, but I'm still living paycheck to paycheck, and I'm like, listen, it does add up for the fat cats in the crony capitalist system, this fucked up Jack wagon of an economy works great for them. They continue to profiteer off the misery and the suffering of others, as Gordon Gekko points out in Wall Street, which now and I'm sitting here recording this episode, I'm like, Man, you should turn those blog posts from your business account into some podcast episodes here, during this showdown confrontation between Gordon Gekko and Bud Fox, when bud is confronting him about, when is it enough? How many mansions Can you live in? How many yachts Can you water ski behind? And he's like, it's not a question of enough. Money is not made. It's just transferred from one perception to another. That's how they do it. You take a look at the statistics about people that are poor, working, poor, middle class, and how the middle class has been systematically shrinking for the past 50 years. All of this wealth is going upward. It's, I use the analogy of squeezing a tube of toothpaste. It's like working your way up from the bottom down, so that all of the toothpaste collects at the top and there's nothing left for the people at the bottom. It's like Gordon Gekko tried to tell you all's asses. This is how the system actually works. He talks about buying a painting for, I don't know, $60,000 and now it's worth $600,000 it's all about perception. It happens like it's magic, and

it's just sickening.

But I'm passionate about this topic of consumption versus production, because we have an economy in America that is based so heavily on consumption, something like 70% of our GDP hinges on consumption, whereas, for contrast, the GDP of China is like 35 to 38% based on consumption. The chickens come home to roost. How are you going to run an economy when the consumer is tapped out and can't consume anymore, when people are out of money, they're out of credit, there's nothing left for them to do, and they're just trying to basically survive, to have food, water and shelter, maybe in some cases, they don't even have that. How are you going to continue to limp an economy along when you've allowed it to get into such bad condition, when you've allowed it to get so top heavy with consumption rather than actual production. I'm going to play a clip from the podcast episode that I created, which was actually based on a blog post that I had written about this. This person saying, Oh, the economy doesn't add up. I'll play a brief clip for you from that podcast episode now. 

You also need to think about the US economy is so driven on consumption. You know, we've had leadership in the past that wanted to get America back on track for being a nation of production rather than a nation of consumption. And we know what happened there. I'm going to read a little bit for you now from Donald Gibson's book battling Wall Street. I'm in the beginning of chapter two titled The National Program. Kennedy assumed the presidency of the United States with a program which had as its central purpose the advancement of the productive powers of the nation. This progress was to be achieved through an intense effort to expand and improve both the human and technological capabilities of the country. During the two years and 10 months that he held office, Kennedy attempted to use the power of his office and of the federal government to achieve this goal. Through tax measures, government programs, government spending and monetary, credit policy, he tried to shape investment processes, educational policy and scientific and technological technological developments in order to realize the country's immediate potential and to qualitatively enhance that potential in the future. Few stones were left unturned in this effort, Kennedy's aggressiveness in pursuit of economic progress was consistent with his views of the obligations of and the potential power of a president. End quote. So the idea there being that instead of always focusing on consumption, we need to be producing something too. This is why I say who somebody is having consensual sex with, what they eat for lunch, what kind of exercise they take. That's not important to me. Someone's policies, however, matter a great deal, and we're still living with the ramifications of all that. Decades later. Oh, Sara, you're just some kind of Kennedy apologist. Call me that if you want to. I'm just pointing out the the chickens have come home to roost. How are you going to drive an economic engine that's like 70% based on consumption, when the consumer can't consume anymore, when they're in debt up to their freaking eyeballs. Think about it. In order for me to talk about Edward Lewis's character, spoilers will be contained. And pretty woman came out in 1990 and it's on TV every five seconds. I think so. If, for some reason, you still have not watched this film, but you intend to. I'm just telling you up front spoilers lie ahead. So you might want to bookmark this or download and come back to it later. If you've been living under a rock and you have not yet seen this film, but you plan to. So the movie opens at a party. Edward is on the phone having an argument with his girlfriend. She says she speaks to his secretary more than she speaks to him. They break up over the phone. He immediately returns to business and tells one of his associates that he must keep up with stock prices around the world. This is reminiscent of Gordon Gekko calling bud faux early in the morning in the Wall Street film, telling him that Money Never Sleeps. As Edward is leaving the party, he runs into an ex girlfriend, and she says that she spoke to his secretary so much that his secretary was one of the bridesmaids at her wedding. Edward picks up Vivian with the prostitute, Vivian Julia Roberts, with no apparent game plan for the evening. While they are talking, Vivian Riley asks Edward if his wife and girlfriend are out shopping together. He tells her that his ex wife is gone and the ex girlfriend is moving out. Edward is trying to take over a company called Morse industries. His lawyer tells him that he should meet with Morse socially, bring a date. Vivian asks him what he actually does. He tells her that he buys companies in financial difficulty. She naively responds that if the companies are having financial difficulty, he must get them for a bargain. He tells her, well, the company I'm trying to buy now I will get for the bargain price of $1 billion she asks him, you don't actually have a billion dollars, right? He says, No. He gets some of it from banks and investors. She asks. And you don't make anything, and you don't build anything. He says, No. She asks the question, so what do you do with the companies once you buy them? He says, he sells them. He breaks the companies up in into pieces, and then sells the pieces. She compares this to a chop shop, and she says, Oh, so it's kind of like stealing cars and then selling the stolen parts. He sighs and says, Yeah, sort of but it's legal. His lawyer calls again. Morse is bringing his grandson to dinner. He advises Edward. Bring a date and keep the meeting social. Edward decides to ask Vivian. When he does, she says, You're a rich, good looking guy, you can get a million girls for free. And he tells her, I don't want any romantic hassles to me this says that even now, his focus is on consumption and not on production. If he were to go out and meet a woman, not a sex worker, that he's paying for her time, and ask her out on a date, she might catch feelings. She might expect something from him. She might hope that a romance blossoms between the two of them, and he doesn't want to even take the chance of that happening if he pays vivid to do it. There's no expectation beyond the cash. This is also how wealthy people approach everyone else. I'll throw cash at you to get you to do whatever I want. Edward learns that Morse industries may may land a lucrative contract with the Navy. Edward talks about a senator they know on the Appropriations Committee, perhaps they can pull strings to get the contract pulled. Obvious collusion here between corporate America and Washington DC, when the hotel manager speaks to Edward, he is dismissive and doesn't even take the man's business card at the dinner with Morse. He says he's rich, already rich enough. He just wants to keep his company and continue to build ships. Edward says that he owns 10,000 shares of stock and he cannot leave the company alone. Later, Vivian points out that she thinks Edward likes Mr. Morse and has conflicting emotions. He tells her that it's irrelevant whether he likes Mr. Morse or he doesn't. He refuses to allow himself to become emotionally involved in business, Vivien says that she understands and that she also does not get emotional when she turns tricks. Edward muses that the two of them are similar creatures because they both screw people for money. He takes Vivian on a shopping spree and demands the staff suck up to her. The store owner says he's in the right city for that. Still, we see Edward consuming rather than producing. Edward's lawyer finds out that Morse has mortgaged everything in an effort to save his company. He encourages Edward to call the bank and make a stink about whose money means more to them. In other words, screw Morse over in order to keep us happy. Edward is reluctant and tells his lawyer that they don't make or build anything, to which he smoothly replies, we make money. Edward takes Vivian to a polo match for business mingling. It's inhabited by stereotypical, phony rich pricks. Vivian asks, Are these people your friends? He says, must spend time with them. She replies, No. Wonder why you came looking for me. Edward has invited Senator Adams from the Appropriations Committee to the match to cement their back door dealings. When Edwards lawyer accuses Vivien of being a corporate spy, Edward tells him that Vivian is actually a hooker. Apparently, Edward is jealous that Vivian was having a conversation with David Morse, so he lashes out she has displeased her Wasp master and must be knocked down on their last day. Edward proposes that he set Vivian up with an apartment and have her as a kept woman. She declines this offer. She doesn't want to be someone's paid mistress. Again. This is Edward consuming he doesn't want to produce a real romantic relationship. He wants to buy Vivian like she's just another company that he's acquiring. In a meeting with Morse, Morse caves in and says that he just wants to be sure his employees are protected. Lewis asks for everyone to leave the room other than himself and Mr. Morse. He says his interests have changed. He wants to buy the company and actually make ships. The Navy. Contracts aren't dead. They were just stalled. Morse is exuberant. Edward takes a walk to clear his head. Vivian decides to finish school and stop prostituting. Of course, this is a Hollywood fairy tale ending, or excuse me, it's a Hollywood fairy tale. So we get the happy Hollywood fairy tale ending where both Edward and Vivian have decided to make positive changes in their lives. I want to read now from a blog post I wrote called battling Wall Street part three. By the time that this podcast episode hits the airwaves, I'm sure this will already be published on the conserracy theories blog, so I will drop a link to it so that you can check it out for yourself. CHAPTER TWO OF DONALD Gibson's battling Wall Street, the Kennedy presidency tackles JFK domestic economic policies, as Gibson states, Kennedy's main goal was the advancement of the productive powers of the nation. This progress was to be achieved through an intense effort to expand and improve both the human and technological capabilities of the country. Lest this sounds simplistic or unimpressive, it isn't. The GDP in the US is based on consumption. Almost 70% of our GDP comes from consumption, not production. In contrast, China's GDP is about 38% Consumption. This is like vivid and pretty woman asking Edward, so you don't make anything and you don't build anything. An economy that focuses on consumption and not production is in big trouble. Gestures broadly. Case in point with the shambles we've been in for decades. Structuring an economy on debt and consumption is unsustainable. This arrangement works very well for the fat cats at the top, but not for John and Jane Q. Public economists and so called experts can trot out in the mainstream media and tell people that all is well, in spite of how you can clearly see it isn't, and they face no consequences for lying. Economists can say anything they want, or, more accurately, whatever their corporate sponsors tell them to say, and if they are wildly incorrect, zero consequences. You have to be so very careful who you listen to and for what reason. I imagine if JFK could see the national debt, the personal debt, the lopsidedness of our economy and the reckless behavior of the Fed over the decades since his death, he'd scream reading now from Donald Gibson's book immediately after his inauguration, Kennedy defined his job as one of reversing the recent downtrend in our economy, and he proposed to expand the nation's investment in physical and human resources and in science and technology. The focus on scientific and technological progress and economic growth was present in the 1960 campaign, and Kennedy's views on this were clearly reflected in the work of his economic advisors during the months leading up to the inauguration. They noted that Kennedy sought the optimum development of natural and human resources and of the productive capacity of the free world. End quote, I go on in this blog post to talk about speculation, and I write this is another important point speculation. I quote now from Investopedia in the world of finance, speculation, or speculative trading, refers to the act of conducting a financial transaction that has substantial risk of losing value but also holds the expectation of a significant gain or other major value with speculation, the risk of loss is more than offset by the possibility of a substantial gain or other recompense. An investor who purchases a speculative investment is likely focused on price fluctuations while the risk associated with the investment is high, the investor is typically more concerned about generating a profit based on market value changes for that investment than on long term investing. When speculative investing involves the purchase of a foreign currency, it is known as currency speculation. In this scenario, an investor buys a currency in an effort to later sell that currency at an appreciated rate, as opposed to an investor who buys a currency in order to pay for an import or to finance a foreign investment. I quote now from the balance money, the 2008 financial crisis has similarities to the 1929 stock market crash. Both involved regular, reckless speculation, loose credit and too much debt and asset markets, namely the housing market in 2008 and the stock market in 1929 I quote now from Wikipedia about the subprime mortgage crisis. There were many causes of the crisis, with commentators assigning different levels of blame to financial institutions, regulators, credit agencies, government, housing policies and consumers, among others. Two proximate causes were the rise in subprime lending and the increase in housing speculation. Now I write it seems pretty understandable to me why JFK didn't want an economy based on non productive, speculative behaviors. I think anyone who lived through the 2008 2009 nightmare can understand why a responsible president would seek to avoid that kind of meltdown. Well, I should say a president who actually gives a damn about his constituents would want to avoid a 2008 I'm quoting now again from Donald Gibson. Three months after taking office, Kennedy submitted a tax reform program to Congress. Part of this program was the investment tax credit, which would allow companies to deduct from their taxes part of the value of investment in plant and new and equipment. The tax break would be available only on new plant and equipment, which was located in the United States and had an expected life of six years or more. Now I write, in other words, the investments had to stay in the US, to benefit us workers, and had to represent long term legitimate investments.

I feel like Edward is this embodiment, this on screen, Hollywood embodiment of speculative behavior when at any costs and consume. It's not about producing anything. You don't make anything and you don't build anything. Well, no, I'll just take these companies, and it's like the legal version of a chop shop. I cut them up into pieces and sell them off. I don't really care. I don't allow myself to become emotionally involved in business. It's all about turning a quick buck. We're such similar creatures because we both screw people for money. And after he's supposedly fallen in love with this woman, his. Offer to her is I'm going to put you up. I'm going to buy you. You're going to be treated the same as just another company that I'm acquiring. I'll give you an apartment and a credit card. I'll give you stores that are guaranteed to suck up to you. You can have the clothes, you can have the money, you can have the penthouse somewhere, and that's going to have to be enough. That's all I'm capable of giving you. So that's going to have to be enough for you. And as she tells him in the movie, oh, I know it's a really good offer for a girl like me, Edward is all about consuming. What can I use my money to buy? I just want to consume. I don't want to actually produce and offer anything of benefit to the world. Now, because this is a Hollywood movie, Vivien decides to give up prostitution and go back to school. Edward decides to quit being a corporate raider to actually get with Mr. Morse and build something in real life that doesn't often happen. Let's just be honest with ourselves. But I feel like his character in this film really represents that side of the US economy. It's all about consumption, not about production. We're going to throw money at the problem. Instead of trying to solve problems for real, we're going to just print up reams and reams of fiat currency and hope that by throwing money in a problem, the problem will magically be solved, in the words of Dr Phil. How's that working for us? Clearly, not very well. Stay a little bit crazy, and I will see you in the next episode.

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