“I’m so bored. I hate my life.” - Britney Spears

Das Langweilige ist interessant geworden, weil das Interessante angefangen hat langweilig zu werden. – Thomas Mann

"Never for money/always for love" - The Talking Heads

Friday, November 15, 2002

Remora

LI finds discussions of "saving" the Democratic party repellent and boring. Who cares? The DC press is, of course, in hyperdrive about the elections, but that is because politics is their industry. Still, we've been following the discussion between Robert Reich and Joe Klein at Slate, partly because these two are typical DC-kabuki types. The ritual entrances. The stereotypical phrases. The rigid decorum, the predictable plot. Without, we should say, plumbing any of the deep sources of kabuki's beauty -- the body's presence to itself as a drama of obstruction and annihilation, passion as a disruption on the surface of expression, etc.

Klein, in particular, illustrates the convention of hypocrisy that makes political discourse, as it is practiced by the op ed set, so off-putting.

This is how Klein starts out:

"Some say move left. Some say move right. Both are right and both are wrong. If we're to have a vaguely interesting national debate, the Democrats have to move forward�away from the boring, tiny, and tactical issues, and language, and interest groups that the party has championed in recent years. This will mean a change in style as well as content. Above all, it will mean an extremely risky change in focus from the beloved and reliable geezers to the edgy, cynical, apathetic young people. The electorate has to be expanded. But the most valuable cache of votes isn't to be had in the poor neighborhoods�as admirable as such efforts may be�it is to be found on the college campuses, where the next generation of activists lives. We can discuss the policy details over the next few days."

So, what is the premise here? That Klein is going to give us the technique by which the Democrats can win elections. But what he is actually doing? He is trying to influence the party to represent his point of view. In DC talk, when that point of view comes from, say, a teacher's union rep, it is known as special interest. As if there were some disinterested point of view. And as if, hey, the political pundit set represents that disinterestedness. When Robert Reich replies to Klein with his prescription for the Democratic Party -- which is, basically, to represent Robert Reich's lefty point of view vigorously -- this is how Klein replies:

"You mock moderates, call them Republicans-Lite. But, to my mind --and I'm a flaming moderate - the best new ideas have come from the middle of the spectrum in recent years. In domestic policy, it was the idea that centralized, industrial-era bureaucratic systems are too rigid and too expensive (urban school districts, for example); it's better to give individuals money -�tax credits, vouchers, whatever you want to call it -and allow them to make their own choices on health care, housing, prescription drugs, day care, schooling, and so forth. You were a pioneer in the field, Bob, with your voucherized job training and retraining program at the Labor Department. The reactionary left opposes this idea (the AFL-CIO wasn't too hot for your program, if I recall). The Republicans pay lip service to "empowerment" but don't want to actually pay money for it. The progressive middle says: Fund it amply, monitor it, regulate it - but do it. (By the way, tax disincentives are a good idea, too: I'd favor a cigarette-level tax on bullets, for example; I would tax corporations on their "externalities" - the social and environmental disruptions they cause -- not their profits.)

In foreign policy, the basic idea is global citizenship: American leadership -- with lots and lots of quiet diplomacy and consultation -- in organizing collective action against terrorists and rogue governments, against environmental depredation, against the transnational efforts of corporations to escape taxation and of criminal combines to escape the law, and the free flow of goods, services, information, and, to the greatest possible extent, people."

Now, what is this discussion really about? It isn't about how Democrats can rebuild their party, it is about molding a party to one's own beliefs. LI thinks that is honorable. LI thinks the dishonor comes in the pretense that one is simply trying to "save" the Democratic party. It is this third way bull crap. LI doesn't vote for a faction just because it is a faction. Nobody does. The technicians who "analyze" politics -- the Broders, the Kleins, the Barneses, etc. -- are really just importing their ideas into politics, under the pretense that their ideas represent the 'center' -- represent the average American voter.

Well, LI is unrepresentative of the average. Our motto is: screw the average. If you look at this country and you say, hey, we are rich enough to shed six trillion dollars worth of wealth in the stock market and still buy record numbers of cars, so we are rich enough to design a national health care system, then you work for that through a number of modalities. A faction exists as one in a set of mechanisms of suasion. And who cares if you run this goal through the Republicans or the Democrats? The point is the goal.

Now, if Klein doesn't like national health insurance, fine. But there is no reason that the Democratic party should abandon national health insurance. Certainly the reason can't be that it is "unpopular" -- the whole point is to make it popular. And, contra Klein, that happens all the time, as it should. Our two big factions exist to make ideas that the guy selling cigs at the Tenneco isn't entertainng at the moment entertain-able. Look how the abolition of inheritance taxes was made popular. Or how invading Iraq was made popular. This is what factions are for. It is about struggle. So the first task of the Reichs in the Democratic party, it seems to me, is to unmask the language of consensus for what it is: the language of position taking. And deal with it as such.








Wednesday, November 13, 2002

Remora

LI, having liberally annointed our back molars with a codeine, or benzocodeine, salve, would like to do a piece on today's big news story. Sorry, the consideration of time as a component of picturing will have to be postponed -- we aren't Boethius, nor were meant to be...

Onto the big story, which as my readers will know by now, is the on-going collapse of National Century Financial Services. Oh, you thought it was the bread and circuses, or rather war games, thing going on in D.C.?

No, today we have an excellent example of why the press can calmly talk about how the "wave of corporate scandals" has broken. That's because nobody wants to talk about it. Plus, no star is involved in this scandal.

The story is in the biz section of the Times.

"The rapid collapse of National Century Financial Enterprises Inc., a large provider of cash flow financing, is sending hundreds of health care companies and their affiliates scrambling to avoid big financial trouble."

Cash flow financing means this. The thirty thousand dollars that X is paying to have his prostate operated on is out there in segments. The insurance is paying for it, but the deductible means that X has to pay for it on credit. Here comes NCF, then, offering to aggregate such debts and securitize them, much as mortgages are securitized. Beautiful, right?

"Two of National Century's largest clients have sought Chapter 11 protection from their creditors, while the dubious status of two of the company's bond deals worth $3.3 billion has set off a spate of threatened legal action against National Century, J. P. Morgan Chase, Bank One and other firms involved in the asset-backed securities. Amid the meltdown, National Century's chairman and chief executive, Lance K. Poulsen, quit both posts on Friday and left the company, which is based in Dublin, Ohio."

Ah, there's a little backstory with this Lance Poulson. And with National Century. But first, here's the fishiness in this creature from the depth. This will tell you pretty much all you need to know about the state of corporate creative financing in this "reform" period:

"This complex brew [of bonds based on hospital receivables] began to boil over in May when the Fitch rating agency warned that it might downgrade National Century bonds, which it did in July. It cited "increasing levels of defaulted and rejected receivables" and a lack of information from the company. This made it harder for National Century to issue new bonds, and the company soon ran into trouble finding the money to pay its clients.

In response, National Century began taking money from the reserve funds of two bond trusts � NPF VI and NPF XII. When J. P. Morgan, as trustee for NPF VI, asked for documentation as to how this was acceptable, National Century stopped taking money from NPF VI and eventually replaced it.

But the trustee of NPF XII, Bank One, is said to have made no such demand, so the company took about $300 million from that reserve fund, draining it to almost zero. At first, bondholders assumed the money went to buy new receivables. But in their motion filed in the Franklin County Court of Pleas in Columbus, Ohio, they say Mr. Poulsen admitted using it for other purposes."

Well, well. It turns out that junior, who flunked eighth grade mass, could have done better than bought the mortgage theory. He could have pointed out that hospital receivables are much more volatile, subject to a much higher percentage of defaults and restructurings. And traditionally, such volatility attracts, well, the loan shark -- because sharks are the type to be able to cover their bets with high interest and the threat of immediate violence following non-payment. Mr. Poulson isn't exactly a loan shark, but according to this account by Doug Noland (who writes the Credit Bubble report for Safehaven, a website for contrarian investors), the history of National Century is spotted with shady characters -- or should we say fly specked?

First, the sentence about the use of NPFXII funds in the Times story is confusing. It implies that the bondholders would be fine with the draining of the reserve fund to invest in further receivables. But of course, that is not what a reserve fund is for -- it is to serve as a barrier against the risk of defaults.

"From Dow Jones� David Feldheim: �No ratings Rx appears in sight for National Century Financial Enterprises (NCFE) amid concerns about revenue streams backing some of its securitizations. In the 11-plus years since its inception, NCFE has become the largest financier of healthcare receivables, according to its spokesman Jim Nickell. Over this period NCFE has securitized in excess of $6 billion of healthcare receivables, and it has bought substantially more than that from providers. It has also drawn recent scrutiny from the ratings agencies who rate those securitizations. Fitch Ratings said over the weekend that it has been informed by interested parties that NCFE directed the trustee to reroute certain funds intended for the NPF XII reserve accounts in order to fund the purchase of new receivables. �The company's apparent willingness to disregard the documents and commit such a serious breach, causes Fitch to question NCFE�s viability.��

Second, how did this company get so big, and why has nobody heard of it? One of the results of "restructuring" investment regulations in the eighties and nineties is that everybody gets to play investment bank. Without any pesky regulators looking at what you are doing. So anywhere cash is being transferred, somebody, somewhere, is trying to get a piece of that. Securitizing, slicing and dicing issues -- it is a wondrous way to make money, as long as you aren't on the other end when the stuff starts coming apart.

According to Noland, the company, founded in 91, has ties to a group of other companies, many of them connected to one Steven Scott. Scott ran a company called PhyAmerica Physician Group, which was delisted by the NYSE when its stock plummeted to pennies. PhyAmerica seems to be running on money loaned to it by NCF. In 2000, this became an issue, as stockholders sued Scott and Poulson for, as they put it, draining the company: "They alleged that Scott and Lance K. Poulsen, National Century�s president, had an agreement: Poulsen would fund Scott�s spending while Scott �looks the other way while Poulsen improperly diverts the company�s cash into NCFE�s coffers.� Even as the company�s finances deteriorated, PhyAmerica bought one corporate jet for $6.6 million and leased another for $848,000 -- expenses that benefited Scott because he owned the aviation company that provided the jets, shareholders said.� Also from the article: �There was a report on �60 Minutes� accusing�Dr. Steven Scott, of hiring doctors who had been disciplined or sued for malpractice.�

Forbes profiled the 'bearded" Poulson, and found him to be sanguine about NCFE -- at least in October. From Risky Business, on Friday October 11, By Seth Lubove:

"In between the court appearances Poulsen has thrived in his niche, making himself and his partners comfortably wealthy, though in ways that might raise eyebrows among traditional lenders. Poulsen, his wife and other company executives, for instance, have occasionally taken personal stakes in NCFE's borrowers. In addition to lending $107 million to something called Med Diversified as of the end of last year, NCFE also owns 6% of the company, or 5 million shares, while Poulsen personally controls another 109,000 shares of preferred stock. Med Diversified also acquired a company that was 22% owned by Donald Ayers, an NCFE cofounder and Med Diversified director. Med Diversified is dependent on NCFE in more ways than one. It derived $4 million in revenues in its 2001 fiscal year from NCFE for various "consulting services," in addition to being owed another $4.3 million in unpaid invoices from NCFE. Another $2 million in revenues during the same period came from an outfit called Millennium Healthcare, a company owned "indirectly" at the time by NCFE. Med Diversified fared badly anyway. It was delisted from the American Stock Exchange in July after losing $605 million in the past two fiscal years on sales of $296 million."

Medicine, attracting only the most sterling kind of entrepreneur! Noland's Safe Haven articule digs up some other intricate connections between NCF, Poulson, and various schemes, in twisted deals that have the involute structure of Jacobean drama, without the pretty poetry. This comes on the heels of two other medical scandals: one at Health South, and one at Tenet. Well, if hospitals start going bankrupt due to this Ohio case, the newspapers might even have to pay attention to it. We'll see.

Tuesday, November 12, 2002

Notice

I am not going to be as regular in posting this week, due to a toothache. Actually, three of my back teeth are in death star mode, causing me to suffer the pangs of hell in regular cycles. Like after I eat. Alas, having no money, what is LI to do? Well, this morning we called up the Texas Dental Examiners, who referred us to Texans for Healthy Smiles, who referred us to a clinic that will supposedly process us through the dread labyrinth of paperwork so that we can actually get these teeth extracted. Whether this will work or not is hard to say. If it doesn't, we'll rob a store and give ourselves up, and enjoy the amenities of prison dentistry. Anything to get rid of these molesting molars.

In the meantime, here's a thought from our friend, Tom. He sent us a little Moby Dick like medley of quotes, except not about the great fish. Here's the joke on the board above his office desk.

"The physicist Carl Friedrich von Weizacker told Heideggar the story of a man who spent all his day in a tavern. Asked why, the man replied that it was because of his wife: 'She talks and talks and talks and talks." He was asked, "What does she talk about?" He replied, "Ah, that she doesn't say." Heideggar is supposed to have said, "Yes, that is how it is."

Monday, November 11, 2002

Dope


We know for certain that sight is one of the most rapid actions we can perform. In an instant we see an infinite number of forms, still we only take in thoroughly one object at a time. Supposing that you, Reader, were to glance rapidly at the whole of this written page, you would instantly perceive that it was covered with various letters; but you could not, in the time, recognise what the letters were, nor what they were meant to tell. Hence you would need to see them word by word, line by line to be able to understand the letters. -Leonardo da Vinci

Seeking some calm from the excitements of this week � the injustice meted out to Winona! the latest report on the distribution of stock options during the 90s! und so weiter -- LI has been reading Leo Steinberg�s marvelous essay, Leonardo�s Incessant Last Supper. Steinberg is, as he calls it, a Leonardista. Among the splendors of the book are the photos he has taken, over the years, of the Last Supper. These photos record the changes made to that painting as its slow, inexorable restoration moved glacially forward. Frankly, if the restoration does look like the end page fold-out � and we have no doubt it does � LI suspects that, in another twenty years, we are going to be talking about the Last Supper Disaster. One has only to compare James Major, the second figure to Christ�s left, as he has been �restored� to earlier pictures. The restoration seems to have sentimentalized the painting, and to have created a muddiness where, before, there was a decay. I agree with Jacques Franck:"Ninety per cent of the work has disappeared, and the fact that you repaint 90 per cent is to me something that has not much sense."

This is not, I think, Steinberg�s opinion.

But what interested us, among other things, about Steinberg�s essay was the comparison of readings of the Last Supper. As Steinberg demonstrates, from the eighteenth century to quite recently, a secular interpretation prevailed. The �moment� portrayed in the painting, on this interpretation, was Jesus� revelation that he was going to be betrayed. Goethe was one of the great institutors of this interpretation � although, as a dissident pointed out, in 1903, Goethe depended on a reproduction of The Last Supper by Raphael Morghen that left the wine out of the painting � the wine in the glass before Jesus� upraised right hand. This is crucial to the counter-secular reading. This is how the scene is reported in Matthew, 26:

�19: And the disciples did as Jesus had appointed them; and they made ready the passover.
20: Now when the even was come, he sat down with the twelve.
21: And as they did eat, he said, Verily I say unto you, that one of you shall betray me.
22: And they were exceeding sorrowful, and began every one of them to say unto him, Lord, is it I?
23: And he answered and said, He that dippeth his hand with me in the dish, the same shall betray me.
24: The Son of man goeth as it is written of him: but woe unto that man by whom the Son of man is betrayed! it had been good for that man if he had not been born.
25: Then Judas, which betrayed him, answered and said, Master, is it I? He said unto him, Thou hast said.
26: And as they were eating, Jesus took bread, and blessed it, and brake it, and gave it to the disciples, and said, Take, eat; this is my body.
27: And he took the cup, and gave thanks, and gave it to them, saying, Drink ye all of it;
28: For this is my blood of the new testament, which is shed for many for the remission of sins.
29: But I say unto you, I will not drink henceforth of this fruit of the vine, until that day when I drink it new with you in my Father's kingdom.�
which was that the consternation at the table was provoked by Jesus�s pronouncement, this is my body, take eat, this is my blood.�

Steinberg traces the rise of the secular interpretation, buoyed by the spirit of Goethe, until the early sixties. But then the second, eucharistic interpretation began to emerge and contest the secularists. The salient fact about the Last Supper is that, at both ends of the table, the disciples register some kind of shock, while, at the very center, Jesus looks preternaturally mild. So what is this contrast? The secularists think that Leonardo has painted a Shakespearian tableau. Jesus� pronouncement, which could be uttered with cunning, or with anger, is uttered, by the son of man, with a sort of shame for the traitor � while the disciples, human all too human, have fallen to debating, among themselves, the crucial question of cultic loyalty. The eucharistics, according to the secularists, can�t account for the appearance of shock among the disciples. But this is because the secularists are thinking of the eucharist as it has been normalized for the last two thousand years. The eucharistics, however, think Leonardo has transported us back to the initial, shocking moment in which a man who these twelve men regarded as the son of God said to them, in effect, this bread, here, and this wine, over here, represent my body and my blood. And I want you to eat these things in order to remember me.

This is a shocking thing to hear. It is so very sexual, so very intimate, it releases a train of wild images in the mind that are normally repressed. It goes way back, saying something like that. There are stone floors of caves, there is firelight, there are night sweats, there is struggle. It forces the person who hears it to really look at the flesh saying it , and know that flesh is the world � that we live in a fully carnal world. The cannibal�s speech is that the mouth that speaks eats other mouths that speak. Words turn flesh, and flesh turns into words, feverishly. This is the effect caught in John 6, where Jesus says:

51: I am the living bread which came down from heaven: if any man eat of this bread, he shall live for ever: and the bread that I will give is my flesh, which I will give for the life of the world.
52: The Jews therefore strove among themselves, saying, How can this man give us his flesh to eat?
53: Then Jesus said unto them, Verily, verily, I say unto you, Except ye eat the flesh of the Son of man, and drink his blood, ye have no life in you.
54: Whoso eateth my flesh, and drinketh my blood, hath eternal life; and I will raise him up at the last day.

The effect of this speech on the disciples is remarked on in verset 60:
60: Many therefore of his disciples, when they had heard this, said, This is an hard saying; who can hear it?

So, this is the eucharistic case. But, as the saying is, sometimes Hegel happens. That is, sometimes the thesis and antithesis really do form a synthesis. Steinberg claims that the current consensus has moved to the conjunction of the secularist and eucharistic versions � that in this instance, as the hands go out for bread and wine, as the disciples cluster, as Thomas raises a finger and James Major spreads his arms in amazement, what is happening is a dream condensation, in the classical Freudian sense, of these two events � a Verdichtung. Steinberg does not make the Freudian detour, tempting as it might appear. LI is going to avoid it too � merely referring readers to the Chapter on Dreamwork in the Interpretation of Dreams. http://www.psywww.com/books/interp/chap06a.htm

We are after a different subject, which is: how exactly do we analyze the temporal element in the pictorial? In other words, how is time constituted in the picture?

Well, more on that tomorrow.