Sunday, December 28, 2008

sex and the city

I lost my reading glasses in the surf of Playa de la Cuesta, and came back to Mexico City to deal with the duality this introduces into my life. My real glasses are good for the middle distance and beyond, but they take a dim view of print, or the handling of small objects. So I can walk down the street with confidence, but put me in a bookstore and, peering through my glasses, I see all the print as black blotches, as though it had melted and run in the rain of my myopia. My simple solution was to find some reading glasses, but this proved harder than I imagined. In the U.S., you go into a drug store or a supermarket and there they are, the ancient mariner´s friends, on a rack. In Mexico City, this seems not to be the case. So I gave up, but today, wandering lonely as a cloud down a street in the Centro, I spotted reading glasses. I tried some on, attracting, inevitably, a salesperson who hovered around me, and to whom I had to explain, in a parody of baby Spanish that seems, on every outing, to get more and more incomprehensible to the people at whom I am aiming it, that I had lost my reading glasses and had no prescription. So he showed me some, and I bought a pair for 40 pesos that have turned out to be less than useful. However, as I was paying, I looked around the shop and realized it was a sex shop. Mexico is always surprising me. Perhaps the owners decided that the old story, that jerking off causes blindness, might be true, and provided the glasses as a service to old and faithful clients.

Saturday, December 27, 2008

Organizing Human products: the ants speak of the aphids

The last time LI mentioned Steve Levitt, the Chicago School economist, was his defense of lucky ducky inequality – while it might seem, by any sane account, that the level of wealth inequality in the U.S. has soared in the last thirty years, when you look at the cheap tat from China that the proles can buy and you compare it to, say, the soaring price of yachts, you can see that there´s been this neat consumer equality going on. This argument seemed to LI to be a perfect emblem of the epoch of the Great Fly: a contrarianism based on a ferocious class warfare premise, presenting itself as a cool gotcha idea.
A couple of days ago, Levitt posted this:

John Lippert presents an interesting and extremely well-reported article on the financial crisis’s impact on the thinking of Chicago economists. It does a nice job of capturing the multifaceted nature of the institution, with people on all sides of the issues.
I absolutely love the following excerpt, which better captures what it is like to hang around with Chicago economists than just about any quote I have ever seen:
“We should have a recession,” [John] Cochrane said in November, speaking to students and investors in a conference room that looks out on Lake Michigan. “People who spend their lives pounding nails in Nevada need something else to do.”¨

His love of a comment that is the height of social cruelty shows not only a certain disturbing baseness, but it also shows why the Chicago School is so favored by the wealthy – which needs an outlet to say the unsayable. Of course, in a sensible society, people who spend their lives recommending unregulated markets, and training young people with the potential to do many socially useful things to go into the field of finance, which should be the dullest mechanism for saving and loaning money, would be encouraged to find other fields in which to flourish – perhaps selling cigarettes under the table to children. Too autistic to embrace the life of crime that is their true bent, they become, instead, the theologians of predation.

The Federal Reserve Bank of Dallas – the most consistently reactionary of the branches of the Federal Reserve – issued a report on Mexico the other day that was sidesplitting in its blind application of a predatory ideology to a suffering object. For the researchers in Dallas, Mexico is turning out to be a pleasant surprise. The nation has been, as it were, crucified upon a cross consisting of emerging market securities. The OECD lists Mexico, along with Turkey, Portugal and the U.S., among the bottom five nations in terms of wealth inequality. The vast wealth of the U.S. ameliorates the lot of people who live in LI´s income percentile – here I am, for instance, the guest of a friend who could afford to pay for a ticket for me to go to Mexico, participating (albeit as a temporary scrounger) in the good life. In Mexico, it is much harder for a vender of balloons, say, to participate in the lifestyle of a billionaire. The freefall in worker´s wages since the seventies, the inability of Mexico to leverage its geographic advantage into an economic advantage (due to the interdiction on the massive public spending which should have accompanied the attraction of foreign industry), and the consequent deterioration of trust in every aspect of Mexican life are superbly overlooked by the Dallas researchers, who see – o love at first sight! – budgetary prudence exercised by the Mexican government:

´Once inward-looking and crisis-prone, Mexico has transformed itself into a nation that thrives on foreign investment and trade and displays a steadfast commitment to monetary and fiscal discipline.
Largely as a result of this transformation, Mexico has been crisis-free since 1995. The country has now weathered two potentially turbulent presidential transitions without experiencing significant financial difficulties—a remarkable achievement, given its economic history.¨

Should we laugh or cry about this utterly bizarre notion of what an economy is for? The crises, of course, derived in toto from the abandonment of the ínward-looking model, or in other words, the standard Import substitution development model of the post war period. The result has been to shift the periodic crises once paid for by the richest to the permanent crisis which now constitutes the year by year of the majority of the country´s population. The lesson was already learned during the first era of laissez faire, a terrible time for the British worker in terms of any of the living standards that count. From those conditions arose the power of organized labour – but the second era of laissez faire is built upon the bones of organized labour.

Here, in its Gradgrindian splendour, is the FRB´s entire view of civilization:

Investors have grown increasingly confident in the country’s commitment to macroeconomic discipline, allowing Mexico to greatly improve its public debt management. The government ran into trouble a decade ago in part because most of its debt was in foreign hands, dollar-denominated and short-term.
The external share of total public debt has fallen from a high of 85 percent before the Tequila Crisis to 40 percent today. In 1995, Mexico’s longest bond had a maturity of one year. Today, the nation issues 30-year, peso-denominated bonds.
This deep change in the composition of debt became possible because of disciplined policymaking and has greatly bolstered Mexico’s ability to deal with short-term fluctuations in interest rates or exchange rates.

It is in this way that breeders speak of cows, marvelling about added weight gains that come through mixing bovine bone bits and corn into the feed. The cow is bred to be slaughtered. But a word to the wise – human products, illnourished, ill educated and ill remunerated until they are sublimely poor in the best of all possible worlds, can, unlike cows, learn to aim and shoot a gun. Give Mexico another decade of disciplined policymaking and those FRB dittoheads might learn, to their discomfort, to appreciate this elementary fact of zoology.

Friday, December 26, 2008

journal at the limit of the sea

In the essay, The Writer on Holiday, Barthes uses a picture of Gide reading Bossuet while floating down the Congo as the point of departure for a reflection on the mythology of the ´writer´ as an essence: ¨one is a writer as Louis XIV was a king, even on the toilet.¨ Barthes, of course, always had a shrewd sense for the connotations of the image, and surely Gide, serene amidst a landscape alien but chosen by himself, and yet so wrapped in the third life of reading that he doesn´t see it, is acting out the master. On the other hand, what can Gide tell us about the Congo? Or LI tell us about Mexico? Myself, I think that noticing does have an end, especially as the references unfold into a jungle darkness one has neither the will nor the strength to explore – say the 17 square inches of cortex inside the head of the woman traipsing up and down the beach here at Playa de la Cuesta, selling slices of mango on a stick to lounging tourists.

I´m told the beach here is treacherous. While it bears the plausible appearance of the usual vast extent of water running up eternally against the sandy marge, the swimmer who would plunge into those waves would soon find himself struggling with cold currents that would draw him, beyond his human strength, out so far into the Pacific that he would disappear from human kind. A sort of dream of suicide comes over me at the very idea. The husband in A star is born had the right idea. Ophelia and Virginia Woolf are all very well, but give me no riverine drowning.

Of course, I have an incredibly movie addled view of the Pacific coast from Tijuana down to Porta Vallerta. I´m fifteen minutes by bus – on a good, non-trafficy morning – from Acapulco, where Orson Welles has that wonderful exchange with Grisby, Rita Hayworth´s husband´s partner, who is sounding Welles out about a potential murder. Porta Vallerta is where Ava Gardner runs a hostel for American alcoholics, and where was it exactly that Monty Cliff ended up torn apart by Mexican boys, the way Orpheus was slain by jealous nymphs? Driving through the streets that brought us to the hotel, we passed by several other hotels that bore the aspects of places that some character from a Raymond Chandler novel would chose to hide out in.

For two days, we had the beach practically to ourselves. Or at least we were not competing with other tourists, although vendors relentlessly patrolled the beach by day, offering jewelry, fruit, horse back rides, cloth, and by night, when the hotel gate is locked and the armed guard patrols the seaward aspect, the beach swarms, apparently, with offers of sex, cocaine, and violence. Gunshots are sometimes heard, but more often the boom boom boom of Mexican hip hop. The latter seems to drive the owner of the hotel crazy. In the morning, I run along the beach with M., up to the point where the military outpost faces the sea, and down to the cliffs upon which assemble, every morning, the waiters, maids, and discrete supervisors of hammocks and pools, recruited from the colonias which extend back into the mountains.

Guerrero, the state where Acapulco is located, has long hosted low level conflicts between peasant guerillas and the State. Lately, the narcos have joined the brawl, most spectacularly by hewing off the head of the chief of police of Acapulco and sticking it on the gate before the police station. When I finally take the bus into town – alone, as M.´s family has seen enough of Acapulco – it is disappointingly unglamourous. The zocalo of the old part of town is much smaller than I expected. I came to see the divers, but miss my chance to see them in the afternoon and don´t want to wait to see them again in the evening. Instead, I tour the Fuerte de San Diego. The connoisseur of forts soon recognizes the smallness of the repertory of his object: after all, forts are simply walls with cannons emplaced in them, enclosing a parade ground that is devoid of anything that would interupt the monotony of drills. Living quarters inside the fort are converted into exhibits made up of antique looking furniture, chests, cloths and arms. Signage refers to imperial splendors past. TVs show five minute educational films to fill the visitor in on geography, dates, and prominent names. Still, the grounds around the Fuerte give one an amazing overview of the bay. I gaze at it, jot down some notes, and then set out to feed myself.

The children, Constanza and Julian, fall utterly into the embrace of the beach. They love to wade out and be buffetted shorewards. Bobbing, Constanza, in her French accented English, calls it. ¨Mamma, I want to go bopping in the waves!¨ Eight and six, little thin bodies that look as precarious as any seabird by the side of the ocean. Black haired Julian tans immediately, while fair haired Constanza must have sun screen more lavishly daubed over her. Julian has brilliant comic talents, and comes up with routines that I would suspect he stole from Harpo Marx if he hadn´t shown such boredom the one time I showed him a Marx brothers film. He is an incredibly physical child, who can´t walk twenty feet without bounding up at least once. Constanza, on the other hand, is a daydreamer. Captured by some idea – a sleepover party, bopping in the waves – she will harp on it for days. Myself, I´ve been trained to take my ideas seriously, but talking to Constanza makes me realize how slightly ridiculous that is, how close daydream is to reflection, explanation to myth. What I have learned is not how to unfold my ideas according to the rules of logic, but how to mistreat my daydreams until they look like ideas.

Wednesday, December 17, 2008

Sidewalks of Mexico City

The sidewalks of Mexico City were built to bear the tireless strides of giant statues. I long for legs of marble here. The sidewalks have been so patched and battered, been so drilled through, picked at, trampled on, and generally raddled by earthquake, that they take on an air of something dug up by archaeologists, something bearing the marks of some grand fall. Even when, as around the Park in Polanco, they are relatively new.

This morning, I went in search of a memory; and as is the way with all such quests, it turned into a lugubrious fugue. I was thinking of having breakfast at the Habana, a café in the newspaper district. The first time I came to Mexico City, I was taken there by my friend Stefan. Stefan, K. and me travelled to Mexico together, first to San Allende, then by train to Mexico City. It was a notable trip. Stefan was a German American who was stuck in the Sargossa Sea of Eternal Studenthood back when that was still cheap. He´d been at U.T. for a long, long time, and was a fixture in the café/coffeehouse scene. He was a wiry man with short dark curly hair and he had the air of one of the Castle´s messengers in Kafka´s novel. He seem bent over by some invisible wind. It was his fatal bent for perfection that undid him. He never finished a class – he never finished a piece of writing, so torn was he by the thought that anything he wrote would inevitably expose him in some way. He could not accept the sheer humanity of making a fool of himself on paper, as though he were surrounded by enemies that would jeer at him for a faulty clause, a banality, or a tedious theme. He dreamed of a writing a novel about Boswell – or was it in the style of Boswell. Besides literature, he had a passion for the kitschier songs of Meatloaf, pool, a blond waitress at Les Amis, and Mexico. When he was a teen, he said, he had gone hiking, or even hitchhiked, in the backlands of Chihuahua.

The Habana was just the kind of place that Stefan would discover. It had been there forever, or at least since the 50s. Castro had once drunk his coffee there, but the world had smiled on him since those days, and now his enemies, exiles from the Castro monarchy, sat around the tables and grew grayer and fatter. But the way Stefan presented the place instantly turned these old boys into the denizens of some Cabral Infante novel – or the journalistic comrades of Garcia Marquez. Whenever I have come back to Mexico City, I make an effort to go there again. Except this September. So, since I am down here now, I wanted to make up for my neglect. Unfortunately, it was two years ago that I had breakfast there last, so how to get there was not entirely clear in my mind. I took the subway to Bellas Artes, emerged at streetlevel, and immediately took off, as though I could get there if I went decisively enough. I zigzagged through the area, passing by a demonstration of teachers on Balderos, finding myself in an industrial area at one point, passing by a theater for children and then a college for police men. At that point, I thought that I would not find the Habana. And I did want breakfast. So I ducked into a restaurant near the cop school, with the vague thought that this, too, would be colorful material. The place was a mistake. I was the only customer. The breakfast was execrable. The waiter emitted a suspicious smell, the electricity went off, the coffee was made out of some material that might have been like coffee once, two men started a jackhammer outside the door of the place to batter the sidewalk for another project, and the chilequiles with eggs were tossed together in some fit of absentmindedness which made me wonder what the huevos borrachos were like.

But laying out the princely sum of forty pesos, I proceeded to go up to the center of town, and did, at least, go to the top of the Holiday Inn and have a beer to settle my nerves and write this account in my notebook. And now here it is in Limited Inc.

Tuesday, December 16, 2008

conversation in mexico

LI had drinks with a well known Meican historian last night. After some shop talk concerning editing his upcoming book, the conversation got around to what was happening in Mexico.

I asked him why Mexico seemed to be falling apart, like Colombia in the 80s.
In the old system of the PRI days, he said, Mexico was divided almost medievally into fiefs, territories ruled by the caciques, the big bosses: PRI functionaries, union leaders, elites from the landholding, merchant and industrial classes. The caciques were not only the cops, but also the robbers. They enforced an order on crime, that is, if the crime were of any large scale. So, whatever illegal enterprises were set up had to pay the caciques, and had to submit – sometimes unwillingly – to the enforcement of limits. At that time, then, the drug lords had to have a certain respect.

This system dissolved rapidly as the PRI lost its mandate. With the ¨democratic moment¨, there was a genuine pause. Nobody knew what the state would do to replace the old system. The cops and robbers waited, as it were, for the new order to appear.

Unbelievably, the historian said, the New Order never appeared. The state never replaced the caciques. It simply let the old ones vanish where it could.

It dawned, then, on the drug lords that they didn´t have to pay the debt of respect to anyone. That there was nobody over them. That they did not have to fear the elites.

The drug lords, I said, were the true children of neo-liberalism. They got it. They understood an opportunity when it appeared before them.

Right, said the historian. So the drug lords rushed in, and soon they were overwhelming the local elites.

Take Tampico, he said. Tampico is at the center of the Gulf oil indrustry, and it used to be that the oil workers union was in everything. They owned markets, they owned hospitals, they rented apartments. If comething happened, there was a little bit of the oil union that got in on it. So the Gulf Cartel had to pay a cut to the union leaders and the PRI. This went without saying.

Today, all that system the union had created has vanished. And along with it, the subservience of the narco bosses.

Here´s the strange thing to me, the historian said. What I´m expected, although it hasn´t happened yet, is for the elites to strike back. I´m surprised that they haven´t yet started organizing paramilitary forces. It is only a matter of time. They haven´t done it yet because, I think, they are still stunned.

What about the military, I said.

You know, the military is not an instrument designed to fight the drug war. 150,000 soldiers have dropped out in the past couple of years.

And, I said, the idea that the poor recruit is going to face the narco soldier, who is from the same class but is much better paid, without asking what side am I on –

Exactly, said my friend. The infection has already been spreading in the army.

So, I said, I see the probability of the paramilitaries. But let´s take this further. I just edited a paper about the dirty war between the Turks and the Kurds in Southeast Turkey. What the Turks did is hire village ¨guards¨- essentially, they recruited death squads. Now, in the situation as you´ve outlined it, I don´t see how the state, if it continues the war, is going to avoid this step. The border, for instance, is a disaster. There isn´t a sane man who would volunteer to police Nuevo Laredo. They´ve slipped almost completely under the control of gangs that fight it out there. They´ve escaped the state´s reach. And how can the state allow that? Better the state sponsored anarchy of the death squads than merely anarchy.

The thing the government really has to do is get back to the old narco system. What is killing everybody is that it has fragmented, and nobody has monopoly power. So they are fighting it out. And not like the old days, when it was the bad guys just killing bad guys.

The interesting thing, I said, is that the state has put itself into a corner. It started this under American pressure. But now, if it doesn´t take control of the border towns, I can envision a scenario where the Americans incurse. Wouldn´t it be ironic if Obama, now considered an angel from heaven, has to play the heavy role once assumed by Woodrow Wilson? I mean, think of the situation. Paramilitaries battling drug lords, death squads in the cities. Unless, of course, Calderon simply stops the madness. If he does the smart thing and refuses to accede to American pressure and deals with the drug lords like the PRI did.

That is what I think could happen, the historian said. The PRI is waiting to come back. They know how to deal with this.

Well, said my friend M., how about trying education? How about infrastructure? How about sewers?

Both the historian and me turned on M. – That is a non-starter. Security has to come first. If you send your seven year old daughter to school and she´s kidnapped on the way, raped, tortured, dumped in the desert, you aren´t going to be begging for schools, you´ll be begging for armed men.

This is Hobbes, M. said.

What puzzles me, I said, is why just drugs? It is a funny thing, the narcos are showing you something – they´ve discovered Mexico is next to the U.S.! So why not a higher value crime. IP crime. Blackmarket software. Illegal generic pharmaceuticals. You know, the illegal drug racket, in the U.S. , instituted practices that are now common among the drug companies. For instance, you know, giving the doctors free drugs to distribute to clients, the doctors not even knowing what they are, so that the clients get a taste. The promise of mood alteration. Most of all, the network of pushers. All taken directly from the narco trade. In fact, legal drugs, sold on the street, are taking the place of illegal ones in some places.

Like Marx said (and I raised my forefinger), the criminal enterprises on the fringes today pioneer the business practices of tomorrow.

I continued, Mexico should follow up the narcos, maybe even consult with the leaders in secret. Thailand and Taiwan have done it, why not Mexico.

Just great, said M. Our tone displeased her. She has kids, and the vision of Mexico dissolving in an orgy of bloodshed is no joke to her. And bloodshed there is every day. It has leaked into the countryside, the routine of slaughter, 20 people here, 20 there, just to send a message. So it is no longer a joke to the vast, poor majority, who used to look on in bemusement.

Still, the historian has what I think of as a Mexican sense of humor, which finds the worst to be the funniest. The worst, after all, is a challenge thrown into the very face of the devil. Top this! How else are you going to get the Prince of Darkness to do his best work.

Your IP idea is good, the historian said. You need to write a proposal to the government. You should consult with them.

Monday, December 15, 2008


Cioran, in his essay on tyranny in History and Utopia, quotes one of those marvelous marbleized sentences of Montesquieu: When Sylla wished to give liberty to Rome, Rome could no longer receive it, having only a feeble remnant of virtue left. And as it had always even less, instead of waking up after Caesar, Tiberius, Caius, Claudius, Nero, Domitian, it was ever more the slave; all blows were directed against the tyrant, none against the tyranny. Watching Bush dodge some shoes, to the general delight of the world, Montesquieu´s phrase seems appropriate. Although LI, being only human, would have liked, too, for the man to have been given at least a small bruise, it is still too little, and no blow against tyranny. The draining of republican feeling, the draining of the energy it takes to be democratic, can be measured by Bush´s unheckled and rather comfortable existence as a president. Johnson, by contrast, had to chose where he´d appear in America in 1968, so great was the fury against him. Cioran uses a wonderful word to describe a certain kind of politician in the Europe of the 1950s – tyranneau – a mini-tyrant. The label fits our second tier caddy of a president well. And though I don´t have any desire to subscribe to Cioran´s repentent fascist description of democracy as a paradise of debility, I will grant, in the case of my U.S.A., during the time of the Great Fly´s reign, a certain degree of utter senility. Far from being a great scoundrel, a sadist, an adorer of bloodshed, a major vampire, the scandal of Bush is his utter insignificance. He is an object rebarbative to meditation, like a stain, or a dirty rag. He is, in fact, in the damning phrase of the journalists who have formed his most enthralled claque, the kind of guy ´¨you could go out and have a drink with.¨ That rotten male amiability, mediocrity poisoning itself in healthful doses until reaching the point when all the inhibitions dissolve and the flow of cliches, the orgy of them, amazes our meritocratic reporters with the underside wisdom of the frat house – yes, it is to this that the American power elite has dwindled. Once, they were exalted by the power of life and death given them, synechdocally, by the ICBM, a monomania that at least produced an elevation of the elite type. Now, we have reprised past glories with the comic opera global war on terror, the kind of thing that would come out of a confab of barstools in our more meritocratic city districts. A war in the name of democracy by its undertakers and most rabid opponents. A war in the name of free enterprise by the fixers and the frauds.

There is, at least, something new under the son in this corruption, this contagion that has rotted us all. It is, of course, the corruption of meritocracy, the American superstition that virtue – the virtue which the Romans, in the age of their enfeeblement, lacked enough of to attack the system of tyrrany instead of the eccentricities of any particular tyrant – is something accorded by multiple choice, or a thumb´s up job assessment by the boss. For a culture that has retained its ideals from the stage of toilet training, and only those ideals, Bush is the tyranneau it deserved. But this is no excuse for inflicting him on the rest of the world.

Now, of course, our feeble virtue has been reawakened as the Great Moderation has shed all masks, and displays itself as the Great Peculation, starring Bernie Madoff. Meanwhile, the most odious group of legislators to foul Congress since the class of 1850 is busy shooting the American auto industry, the largest manufacturer, in the head this winter, due to the greed of the assembly line worker. Keep your needle eye on them sonsobitches, boys! Since, in spite of the cliché that the system is all connected, which has been mouthed a million times by economists and hacks over the last twenty years, the system really is all connected, the bullet intended for the UAW is sure to lodge in the banker´s brainpan. And, of course, the meritocratic chorus in the NYT and other good establishment papers has been moaning, for months, about the very idea of interfering with creative destruction, while holding out the can for Wall Street. It is their way of throwing shoes at the workers, those overpayed extras. Extras in life, and in death, not like, say, your go to guy in the gated community who can guarantee you a 1 percent gain per month per year.

Ah, Zona Zona, I would sit by the waters of Babylon and weep – but I am in Mexico City, and can only cast one baleful crow´s eye on the moronic inferno I call home.

repost of The Year of Cooling the Mark Out

This was my post of February 2, 2008. Not bad as a prediction:

the year of cooling the mark out

And Burn my shadow away…

Erving Goffman wrote an often referenced paper in 1952 entitled On Cooling the Mark Out. To understand this election year, LI advises our readers to read it.

The paper begins by describing the confidence game, which involves roping a mark, getting him to invest, financially, in some scheme or game, and clearing him out. At this point, the confidence gang has the option of simply leaving the mark behind. But…

“Sometimes, however, a mark is not quite prepared to accept his loss as a gain in experience and to say and do nothing about his venture. He may feel moved to complain to the police or to chase after the operators. In the terminology of the trade, the mark may squawk, beef, or come through. From the operators' point of view, this kind of behavior is bad for business. It gives the members of the mob a bad reputation with such police as have not. yet been fixed and with marks who have not yet been taken. In order to avoid this adverse publicity, an additional phase is sometimes added at the end of the play. It is called cooling the mark out After the blowoff has occurred, one of the operators stays with the mark and makes an effort to keep the anger of the mark within manageable and sensible proportions. The operator stays behind his team﷓mates in the capacity of what might be called a cooler and exercises upon the mark the art of consolation. An attempt is made to define the situation for the mark in a way that makes it easy for him to accept the inevitable and quietly go home. The mark is given instruction in the philosophy of taking a loss.”

This pretty much describes the two cases we have before us this election year. The ruinous Bush years involved two con games that were entwined one with the other. We have the con game that keeps us in Iraq, one fully supported by the ropers in – the governing elite – and we have the con game that is now busting, the full fruit of Bush’s economic policy, which involved minimizing regulation of the financial markets while maximizing the amount of money they had to play with. In this way, credit could fill up that hole where compensation from work used to be – and so productivity gains could be appropriated at a much higher rate by the richest, while home equity could be tapped, via mortgages, for the good life by the debtors.

Goffman points out that the mark’s psychology is a tricky one. To an economist, it might just look like utility maximization. But…

“In many cases, especially in America, the mark's image of himself is built up on the belief that he is a pretty shrewd person when it comes to making deals and that he is not the sort of person who is taken in by any thing. The mark’s readiness to participate in a sure thing is based on more than avarice; it is based on a feeling that he will now be able to prove to himself that he is the sort of person who can "turn a﷓fast buck." For many, this capacity for high finance comes near to being a sign of masculinity and a test of fulfilling the male role.”

Warmonger psychology unerringly follows this primitive but powerful gender program. This army of pissants shows all the signs of having had trouble emerging from the sack of their twelve year old selves, when, apparently, the separation anxiety produced by throwing out their G.I. Joe doll became frozen in place. A smaller contingent of this army – much smaller – forms the viewing core of financial porno tv networks, like CNBC. These people actually believe that they are part of the confidence game gang, which is how they came to mouth a rote optimism that had as little relation to reality as your average automobile ad has to how you would really drive an automobile.

“A mark's participation in a play, and his investment in it, clearly commit him in his own eyes to the proposition that he is a smart man. The process by which he comes to believe that he cannot lose is also the process by which he drops the defences and compensations that previously protected him from defeats. When the blowoff comes, the mark finds that he has no defence for not being a shrewd man. He has defined himself as a shrewd man and must face the fact that he is only another easy mark. He has defined himself as possessing a certain set of qualities and then proven to himself that he is miser ably lacking in them. This is a process of self﷓destruction of the self. It is no wonder that the mark needs to be cooled out and that it is good business policy for one of the operators to stay with the mark in order to talk him into a point of view from which it is possible to accept a loss.”

Goffman’s analysis of the mark points us to the form of the presidential election – that Halloween for grownups. Whoever the candidates are, they will represent wings of an established power that has made suckers of the vast majority of the population over the last four … eight… twelve…sixteen years. An established power that has assured America that the costs of running this empire will always be paid by third parties – whether these consist of tropical countries dealing with the forces unleashed by the American appetite for junking up the atmosphere with CO2, or Middle Eastern countries struggling with the yoke of American oppression in a more direct form – the soldier in their face, the mercenary who shoots them for fun in the traffic jam. Of course, this isn’t true. Those costs will come back here. The cost of the Middle East adventure can be seen in the run up of oil prices, a very small intimation of a much larger and connected group of problems that come with running out of prestige and power in a large area of the world while at the same time maximizing the number of people who hate you. As for CO2, it will turn out that melting the glaciers in the west during the drought cycle was not a good idea. The American west, overpopulated, overdeveloped, its water overpromised, is going to learn the lesson of the Hummer, too. This isn’t just something we can sluff off on Bangladesh.

“For the mark, cooling represents a process of adjustment to an impossible situation﷓ - situation arising from having defined himself in a way which the social facts come to contradict. The mark must therefore be supplied with a new set of apologies for himself, a new framework in which to see himself and judge himself. A process of redefining the self along defensible lines must be instigated and carried along; since the mark himself is frequently in too weakened a condition to do this, the cooler must initially do it for him.

One general way of handling the problem of cooling the mark out is to give the task to someone whose status relative to the mark will serve to ease the situation in some way. In formal organizations, frequently, someone who is two or three levels above the mark in line of command will do the hatchet work, on the assumption that words of consolation and redirection will have a greater power to convince if they come from high places.”

It is going to be an excellent year for spectators.

Sunday, December 14, 2008

such a clever boy

I have a clever little review up of the new Ferguson book, plus Michael Lewis´ anthology. It is here.

Friday, December 12, 2008

going down to Mexico city with visions in my head

LI arrived in Mexico City yesterday, after the horror of waking up at five - an hour when I am particularly averse to surrendering to the alarm clock´s diktat, as my erotic dream managers are just putting up the outerworks - the sauna, the classroom, the office, or perhaps my Grandparent´s dinnertable - for the exciting main attraction. Which I hope involves me - I do so hate dreaming about other people having sex. Anyway, at a certain point between 5 and 6, when the cab picked me up, I did or did not turn on the stove, to warm my apartment. I´ve had alarmed flashes of the stove being on, and even got a friend to go by the place so I can get the number of the management company and call them to check.

This might simply be myself wallowing in my fundamental funk. But burning out the stove´s heater would be no joke.

Anyway, I get a taxi, after going through the usual languages - English, my version of spanish, and gibberish - to explain the layout of Polanco, which you would think would not be mysterious to people who drive taxis around Mexico City. Although, granted, it is not a place that a taxi drive would live, since you would have to make about six time the taxi driver´s salary to rent an outhouse here. And as we plunged into what proved to be one of Mexico City´s banner traffic days, gridlock up your ass as far as you can see, the taxi driver pointed out the people on the sidewalk, clumps of them, carrying pictures of the sweet but remote virgin. It is the Virgin of Guadalupe´s day. They are walking to the basilica downtown. It is a long walk - twenty miles at least. Although, given the state of the traffic, I´d bet that a few made it to their destination before I made it to mine.

Later, my friend M. tells me her housekeeper took off to go on a running pilgrimage to Veracruz - the pilgrims are taken on a bus, dropped off at a spot, run for a certain distance, then are picked up by the bus and taken a little further and the process is repeated.

Tuesday, December 09, 2008

Free Love and the Strait Jacket

- The anonymous genius of the fairy tale is the genius of history as well, with that same penchant for the fatally ambiguous symbol, where, as though in a besieged city in an endless backlands war, love and death exchange sniper fire with each other among bombed out buildings and constantly shifting zones of engagement. This city could be the New Jerusalem. It could be Stalingrad. It could be the Republic of Mainz, where Georg Forster assumed a revolutionary role in 1792, as his household expanded to include his wife Therese's lover, Huber, and the ever present Caroline Boehmer. It was in December of 1792 that Therese took the kids and her lover and left. Forster went to Paris, as a delegate.

- One has to be sensitive enough, then, to the way the fairy tale sticks in the historic fact to understand the depth of certain symbols.

-For instance: on November 19, 1831, Prosper Enfantin, responding to the uproar in Saint Simonian circle that had greeted his proposals for free love, responded with a speech in which he outlined the details of his system, which echoed Fourier and Swedenborg in separating marriage from “true” marriage, the latter of which would rekindle the numbed feelings of conjugal couples by giving them the theoretical liberty to love. It was hard to tell how this theoretical liberty translated into physiological fact, although by this time, Enfantin had, like Swedenborg before him, lowered the barrier between the symbol and the thing.

The uproar continued, with certain leaders of the Saint Simonian family denouncing Enfantin’s plan, and the newspapers reporting on his immorality. So he lead a retreat to his home in Menilmontant of forty male apostles, who attempted to live a life of pure communism. As one of the signs of sublime fraternity, Enfantin had shirts made for the apostles that buttoned down the back - and thus could only be buttoned with the aid of a helper.

Enfantin’s shirts deserve a place with Aristophanes unsexed circular human, in the Symposium, and Magritte’s hooded lovers blindly kissing – symbols that overwhelm one’s ability to immediately interpret them. Enfantin’s shirts hang over the whole impassioned debate about free love – half a sign of mutual aid, without which there can be no freedom, and half a strait jacket. [see French Feminism in the Nineteenth Century, Claire Goldberg Moses]
- The difficulty in writing about free love now, as opposed to, say, 1890, is that the phrase has degenerated from a scandal to a tawdry joke. It is as impossible to speak of free love without irony as it is to speak of virginity.

Yet I don’t believe these ironies have a footing in anything more than the fashion of the moment. Or perhaps I should say, the ironies are in disjunction with the continuing existence of the alienating structures of the happiness culture. If all three traditions of alienation collapse in the twentieth century, if Imagination sits in a ditch, now, pee stained and bawling and only visited by the social worker or the cops, this does not mean that alienation has been conquered or that it has conquered - there is no new man. Rather, the alienated have, for the moment, accepted their own impotence on every level, and are engaged in an elaborate ritual of theoretical self-cutting, one that has invaded everyday life down to the mental soundbites and the suicidal tics of acceptance, amnesia and our collective mad passivity.

LI is going to Mexico tomorrow, and will post from there haphazardly. If I don't post again until after Christmas, let me wish you all the very best.

Blackwater, whitewash: prosecute Moonen and Scobey for murder

We are, of course, watching the action being taken on the Blackwater massacre. We expect the trial to end with a non-guilty verdict. The Justice Department wants to lose this one.

Now the question is: why is Andrew Moonen, the Blackwater guard who shot and killed a bodyguard to the Iraqi vice president “while drunk last Christmas Eve”, to quote the Washington Post article of Oct. 7, 2007, is still at large. And why Margaret Scoby, who was acting ambassador to Iraq in December, 2006, and facilitated Moonen’s return to the States within 35 hours with no charges against him, is not being investigated, at least, as accessory to murder.

I believe the answer to that is: it would be hard to find a jury anywhere who wouldn’t convinct Moonen. As the point of these prosecutions is to appear to do something while continuing the whitewash of Blackwater and, more significantly, the utterly corrupt relationship between Blackwater and the State department, the latter of which has been on record, through its spokesman, about how pleased they are that State department officials have never been injured while Blackwater decimated Iraqis. The logic here is impeccable – the State Department sets the value of an Iraqi life at something like 15000 dollars, while the lives of its own personnel are priceless.

From Talking Points Memo

After an infamous December incident wherein a drunken Blackwater contractor shot and killed a bodyguard for Iraqi Vice President Adel Abdul Mehdi, one U.S. embassy official wrote to another:

Will you be following in up Blackwater [sic] to do all possible to ensure that a sizable compensation is forthcoming? If we are to avoid this whole thing becoming even worse, I think a prompt pledge and apology -- even if they want to claim it was accidental -- would be the best way to assure the Iraqis don't take steps, such as telling Blackwater that they are no longer allowed to work in Iraq.
In State's defense, an embassy cable from Secretary Condoleezza Rice argued "strongly" that "justice had to be done." But justice is a relative thing. When embassy officials proposed the price for the guard's life be pegged at either $100,000 or $250,000, a State diplomatic-security official countered with $15,000. The figure needed to be lower, the diplomatic-security official contended, so Iraqis wouldn't "try to get killed to set up their family financially." Two days after the shooting, Blackwater and State agreed that the guard's family should receive $15,000."

Thus, a few hunting accidents, a few trophy Iraqi deaths, all come out in the wash – in fact, a trophy Iraqi head is less expensive than a safari trip to shoot bear.

Prosecuted Andrew Moonen. Prosecute Margaret Scoby.

Monday, December 08, 2008

Tahitian overture

LI has so far concentrated on Therese Heyne’s side of the Heyne-Forster-Meyer triangle. However, I've wanted to harken to Swedenborg's entrance, so embarrassing to those who like their intellectual history straight. Although not a perfect parallel, you could make a case that, just as Spinoza is the hidden enlightenment eminence, so,too, Swedenborg and Mesmer are hidden eminences in that covert history of the passions in the nineteenth century, an underground rumble among the network of enlightenment philosophes, and the prophet of free love afterwards, with with Henry James, Sr., becoming his chief expositor in the U.S. And if that certain mixture of the spiritual and the sex drive embarrasses your true enlightened public much more than open mechanistic libertinism ever did – there is another track leading into free love, a rational track. It is at this point that the wide world enters Gottingen with tortured look of Georg Foster's face, that survivor of scurvy. Georg Forster and his father, Johann Reinhold, sailed with Captain Cook on his second voyage in the South Seas as scientists. JR’s Observations and Georg’s Voyage around the World were much read and praised, the latter coming out first in English a few month’s before Cook’s own account.

Above all, the South Sea islands, for 18th century Europeans, meant the Isle of Cythera, the Eldorado of all the old boys, as Baudelaire would say in the nineteenth century – Tahiti. Here, it was possible to think of angelic sex, a perpetual spring of virginity and fucking, in which the latter never negates the other. Tahiti was the fashion in the literary public of the 1780s. Caroline Michaelis, that ever present woman, created a sensation in Gottingen, strolling about in the Tapa that had been brought back for her by Forster. Christian Williams in Erotische Paradies gives both Forsters credit for casting a critical eye on the imperialist dream of the South Seas as a kind of paradise. Although of course Georg and his father’s accounts are couched in the language of progress, by which, as the native’s powers and resources are stripped from him, his time is stolen as well. It appears he is living in European time, and thus is both a contemporary and an ancestor. This is what was meant by stealing souls.

Still, Forster’s version of progress had an interesting marker. Civilization in the South Seas was symbolized by the treatment of women. The better women were treated, the higher the civilization.

‘The more debased the situation of a nation is, and of course the more remote from civilization, the more harshly we found the women treated… and they are looked upon as being calculated for the mere satisfaction of brutal appetites, nor treated better than beasts of burden, without being allowed to have the least will of their own: which incontestably proves how much men, in a degenerated and savage state, are inclined to oppress the weaker party.” (Quoted 131)

The signs of debasement are not only shown by the mistreatment of women – children striking their mothers, for instance – but in the looks of the women. According to this schema, the Tahitians are eminently civilized – the women are beautiful and powerful – while the women on other South Sea Islands are ugly and oppressed. A sidelight on IT’s theory of ugly women, perhaps, in as much as the dichotomy between the ugly and the beautiful replays the war of civilizations. So of one Melanesian island, JR Forster writes: “The females are generally thin, a few only have tolerable features: the rest are ill-favored, though their shape and limbs are not without proportion. Their knees are equally enlarged with those of the men…”

But this ugliness and oppression have another side. In a prevision of Hegel’s master slave relationship, Forster observes that the situation of the women, just because ‘they have been early taught to suppress the flights of passion; cooler reflexion, gentleness and every method for obtaining approbation and for winning the good-will of others have taken their place” – makes them accessible to the “first dawnings of civilization”. What is lacking is the ruse and the rebellion.

Georg Forster took these experiences and ideas into his unfortunate marriage to Therese Heyne.

I Guess I'll Get Rid of the Maid

We have had decades in which to learn of the perils of planning. Everyone, from the radical Weberian to the repentant Marxist to the gleeful Milton Friedman-ite agrees that you can’t have central planning. And so we haven’t.

And now we need some. Badly.

The car company bailout is an excellent example of where we need, and are not going to get, central planning. Instead of seeing this in the real context of our transportation system – the massive government investment in roads, the petro-chemical system, and the manufacture of automobiles being all aspects of one system – we are discussing a massive bailout on the smallest scale. In essence, what is needed is to think in terms of steps towards a much better future with the automobile. LI is no fan of car culture – we’ve owned three cars in our entire life, and we don’t own one now. We bike or walk or bus. And nobody who bikes every day has any respect for cars – they are a constant danger. Ask the dik-dik about the lion.

But there is no way our transportation tastes are ever going to become a majority position in this Land of the Free Riders. At least not until the oil runs out.

A coordinated response to the car company crisis would see all the aspects of it. LI thinks that one of the principles that should be involved, here, is a step by step program to reduce oil use considerably. It would be nice to think that the electric engine is the deus ex machina for that. But the non-nice thought is that, at this time, that seems very unlikely. What does seem doable is reducing the amount of fuel used by switching, as they have in Europe, to diesel – using the refining technology that has made diesel basically odorless and lessened the emission problems associated with it. This is where coordination comes in – Detroit could not switch its lines to diesel if diesel is so expensive that consumers will baulk. The oil companies aren’t going to refine more if the cars aren’t going to use it. So it is up to the gov – to finance refining capacity. To coordinate between those industries. As it may be to coordinate the use of natural gas here. And as it may be to create the network that would allow recharging for an electric car battery. All of these measures would require a positive government response, going so far as to create government funded companies, in the absence of any private company to work with. This moment of economic collapse comes, actually, at a very fortunate time, since the collapse is in the exact center of the enormous political and environmental problems that the U.S. has put off thinking about. We can now actually do things about the insane CO2 menace, and the dysfunctions of America’s quasi imperialistic role in the Middle East.

If not now, when?

ps - Oh, and who can resist contrasting scenes from the Zona? First the workers of the Republic Windows and Doors factory:

“The scene inside a long, low-slung factory on this city’s North Side this weekend offered a glimpse at how the nation’s loss of more than 600,000 manufacturing jobs in a year of recession is boiling over.

Workers laid off Friday from Republic Windows and Doors, who for years assembled vinyl windows and sliding doors here, said they would not leave, even after company officials announced that the factory was closing.

Some of the plant’s 250 workers stayed all night, all weekend, in what they were calling an occupation of the factory. Their sharpest criticisms were aimed at their former bosses, who they said gave them only three days’ notice of the closing, and the company’s creditors. But their anger stretched broadly to the government’s costly corporate bailout plans, which, they argued, had forgotten about regular workers.”

And then – a maid dodges a bullet! From the Vanity Fair article that will make your heart bleed.

The new thriftiness takes a bit of getting used to. “I was at the Food Emporium in Bedford [in Westchester County] yesterday, using my Food Emporium discount card,” recounts one Greenwich woman. “The well-dressed wife of a Wall Street guy was standing behind me. She asked me how to get one. Then she said, ‘Have you ever used coupons?’ I said, ‘Sure, maybe not lately, but sure.’ She said, ‘It’s all the rage now—where do you get them?’”

One former Lehman executive in her 40s stood in her vast clothes closet not long ago, talking to her personal stylist. On shelves around her were at least 10 designer handbags that had cost her anywhere from $6,000 to $10,000 each.

“I don’t know what to do,” she said. “I guess I’ll have to get rid of the maid.”
Why not sell a few of those bags?, the stylist thought, but didn’t say so.
“Well,” the executive said after a moment, “I guess I’ll cut her from five days a week to four.”

Sunday, December 07, 2008

Free Love II: on the delights of the angelic body

Wahl ist Qual – Choice is pain. Before I go on tracing the intricate maze danced (to the lascivious promptings of a lute) by Georg Forster and Sophie Huber, born Heyne, as they went through the attempt, in the Revolutionary epoch of the eighties, to find liberty in marriage and love in liberty, I want to take the long view. Free love is a phrase that is well and truly dead – dead of mockery, dead of the emotional exploitation of which it became the instrument, deniability raising the old ghost of guilt in the service of nubile bodies forever lined up at the porn shoot. Yet it had a long, long career, and it is still not so dead that the phoenix of some kind of program joining sex, liberty and utopia cannot leap from the ashes of lovers, factual and fictional, who took the principle of free love with deadly earnestness. As I’ve noted, my three ideal types of alienation – the reactionary, the liberal and the radical – all in one way or another turned from happiness to love as the foundation of society. Only, however, the liberal and the radical turned to free love – it was the contention of the reactionary that, in fact, happiness, carrying the sensualist inheritance of Enlightenment volupte, would invariably end in promiscuity – which is the only way that the reactionary could see free love. Love in the reactionary tradition is not about liberty, but about obedience – to the sovereign, whose love is emanated in rules and laws. Although at the center of the Christian tradition there was always the disturbing Pauline paradox that love transcends and destroys those laws and rules insofar as they are the marks of sin, that is, of a lack of love. Heretics hived off from the main body of the Church by taking that notion too seriously, of course – those small circles of Adamites and Levelers, those claimants to purity for whom all things are pure.

In fact, free love was not only a scandal to the church – certainly Marx, for instance, was unhappy about the association of socialism with free love. To be flip, Marx’s definition of scientific socialism sometimes seems to be socialism minus the free love nonsense.

The person who joined love and liberty together in the eighteenth century was Emmanuel Swedenborg. Even though Swedenborgians proper disclaimed the free love ideas that grew out of certain Swedenborgian factions in the nineteenth century, it is certainly true that Swedenborg was a great promoter of the notion that liberty is love. As his biographer puts it:

“We must guard, however, against supposing that the spiritual is not real and bodily; for everything inward has its last resort in substantive organization. The bodies of angels are as our’s in every part, but more expressive, plastic and perfect. Their conjugal union, which is true chastity and playful innocence, is bodily like our own; nay, far more intimate: its delights, immeasurably more blessed.”

And this, from Conjugal love:

“The Lord provides similitudes for those who desire love truly conjugal, and if they are not given in the earths, he provides them in the heavens. The Divine Providence of the Lord is most particular and most universal concerning marriages and in marriages, because all the enjoyments of heaven stream forth from the enjoyments of conjudgial love, as sweet waters from the stream of a fountain; and that on this account it is provided that conjugial pairs be born, and that these are continually educated, under the auspices of the Lord, for their several marriages, both the boy and the girl being ignorant of it; and after the completed time, then that marriageable virgin, and then that young man fit for nuptials meet somewhere as if by fate, and see each other; and that then, as from a certain instince, they know that they are partners, and, as if from a certain dictate within, think in themselves, the young man, that she is mine, and the virgin, that he is mine; and, after this has been seated for some time in the minds of both, they deliberately speak to each other, and betroth themselves.”

One notices that Swedenborg’s idea of virginity – as with the delights of the angels – is not orthodox. And the notion of an education through marriages seems to be something like education in volupte, or the radical libertine ideal as it came from Cyrano de Bergerac and others.

Saturday, December 06, 2008

rogerology day!

We all have read our Nietzsche, and know that it is better not have been born. Who doesn’t feel pressing in, year after year, the serpent’s promise of death to Eve – that was the real temptation. The only way to escape from the life sentence of paradise. But in spite of the death drive, LI is still ticking away, with all the stupidity of a watch set to the wrong time. The watch cannot reach out and set itself straight – birthdays are a reminder that people can’t do that either, although of course the mechanism in some of us makes us repeat the vain gesture, over and over again.

It is my birthday today.

Here’s my song for today: Ponderosa

Friday, December 05, 2008

the origin of free love: I

We had felt that perhaps we were wrong inside, but we had never imagined it so bad – D.H Lawrence

These are some facts about Therese Huber between 19 and 25.

She was born in Gottingen, the daughter of a well known professor, Christian Gottlob Heyne, and Therese Heyne, born Weiss, in May, 1764. She was thus a little older than the revolutionary generation, those born in the 1770s.

According to Therese Huber’s correspondence, her first memories were of her mother – of her mother being ill. This was when she was three. “I was never my Mother’s favorite, certainly not, I was ugly, bulky and probably never brilliant. Until my thirteenth year, I don’t remember anybody ever tell me I had a mind or that I was droll.” Of her mother she says, further, that she was “no housewife, we were raised in filth and disorder.” Her earliest memories were of her stained clothing. Moreover, her mother had “a lover until she died, almost in her forty fifth year.” Her lover lived in the house. He was a music student by the name of Forkel.
Therese always had the fantasy that she had been adopted.

Therese Huber later wrote about her first husband, Georg Forster: “He had the fortune of unpretty men, that women had to come to meet him half way, which, with his very soft heart, always vouchsafed the joy of a very intense friendship.”

At eighteen, Therese was mad to get out of her house and the town of Gottingen. By this time, she had a stepmother. Georg Forster, her father’s friend, though much older than her, promised to get her out of the house. So she accepted his proposal for marriage in early 1784.. He promptly took off for Vilnius, where he’d been promised a position. He was gone for eighteen months.

Therese promptly set out for Gotha to care for a sick friend, Auguste Schneider, the mistress of the Baron of Gotha. In a letter, Therese wrote a friend that “people’s image of me as a coquette, the girl in a novel, had begun to disappear, and one sees only the girl of reason, whose lively foolishness is forgiveable on account of her good heart.” (41) But if she thought of herself, now, as calming down and assuming the dignity of the betrothed woman, she found, on her return to Gottingen, that things were difficult for a headstrong girl whose older, ugly fiance was in Vilnius. She was surrounded by admirers in her father’s house, while her father remained at his desk and her stepmother remained unconcerned – a situation that Henry James would have known what to do with. It was now that she encountered a man, FLM Meyer, who proved to be, as her biographer Geiger puts it, ‘fateful’ – misfortunate - to her. Later she wrote a friend that “Meyer led or ruled me, for he took my childish virginity in thought and deed.”

Meyer was a well known writer, enjoyed by Herder’s literary public . He was, according to Geiger, ‘shamelesslessly” egotistical. And he couldn’t do without women. He moved in that Enlightenment society under the motto that he couldn’t, ‘for the sake of one woman, be untrue to the whole sex.”
At the same time there was a friend. Henry James, too, would have given Therese the ambiguous friend. This friend was the most ambiguous of the Romantic divas, Therese’s “evil spirit”, according to her biographer, Ludwig Geiger, Karoline Michaelis. Geiger describes her as “sensuous and without morals already as a girl.” Over her lifetime, Karoline was married thrice, once to a man named Boehmer, then, when he died, to August Schlegel – this marriage was partly because she’d been banned for revolutionary activities in Gottingen when it was occupied by the French, and partly because she’d scandalized the town by having a child as the result of an affair with a French soldier - and then finally, in Jena, marrying Schelling. According to Geiger, this woman urged Therese to marry Forster, who she – Karoline – knew Therese didn’t love – out of jealousy. When Karoline and Schelling were living together in Jena, Hegel came to stay with them for a year. He knew the two well. When she died, he wrote a letter to a friend, expressing his relief and joy that she was gone. She had an effect on people.

In 1785, Forster came back from Vilnius. He then “committed out of weakness or goodness or blindness one of the unbelievable errors of his error strewn life: instead of standing apart from the third man [Meyer], coolly, peacefully, with the intention and the hope of driving the memory of his intruder gradually out of the heart of his bride … he entered into the intoxicated state of friendship, full of illusions, that filled both of them. Soon he was using the brotherly ‘du’ on the newcomer and the secret lover; Meyer became his “Assad”, he appeared as a member of the “trinity” in the letters to theological friends. “Forster was more enthusiastic than both of us,” Therese wrote 20 years later, “had us all swear eternal love, and never asked for a kiss from me that I should not also offer Meyer.” [44]

Wednesday, December 03, 2008

Mr. Summers, let me refer you to Chapter 13: the whiteness of the whale

In the election of 1910, Democrats took control of the House of Representatives. The economy still hadn’t recovered from the bust of 1907. The original impetus for the progressive legislation that had received support and scorn in equal measure from Teddy Roosevelt – America’s most bipolar president – had not died out, which is why President Taft couldn’t block the amendment to the Constitution instituting a federal income tax. Unfortunately, the move to force corporations to incorporate federally, instead of in the states, failed.

There was, back in those days, a burning issue that has flamed out so much since that the very word brings an eery blank to the mind: overcapitalization. The reason this figured so heavily as a scare word among the progressives is that the era from the turn of the century to the establishment of the Interstate Commerce Commission, in 1914 – which is generally taken to bookend the progressive moment – saw the instantiation of what Lawrence Mitchell, in The Speculation Economy, claims is the founding moment of modern American capitalism: the subjugation of industry to finance. This was a moment that expressed itself on several fronts – for instance, the Courts finally cleared up the confusion about how property law applied to corporations – creating a new form of property, defined by John Commons this way: [the old common law definition] … is Property, the other is Business. The one is property in the sense of Things owned, the other is property in the sense of exchange-value of things. One is physical objects, the other is marketable assets.” [quoted by Sklar, page 50]

One of the results of this legal change, or rather, one of the reasons it came about, was that the notion of a corporation as a body issuing stock was changing. And that change brought up the charge of overcapitalization – that a corporation, instead of finding its raison d’etre in using its assets to produce a good or service on which it made a profit, was now an entity wrapped up entirely in the market for its stocks.

In 1911, a bill was voted through the House of Representatives and narrowly turned down in the Senate that would have smashed this legal structure. S. 232 built on legislative ideas already crafted during Roosevelt’s term (remember, Roosevelt was in the wings in 1911, and would run in 1912, thus ruining Taft’s chance at a second term). S. 232 would not only have required federal incorporation of all interstate businesses. Here’s Mitchell’s description of it:

“It would have replaced traditional state corporate finance law by preventing companies from issuing “new stock” for more than the cash value of their assets, addressing both traditional antitrust concerns and newer worries about the stability of the stock market by preventing overcapitalization. But it would have done much more.

S. 232 was designed to restore industry to its primary role in American business, subjugating finance to its service. It would have directed the proceeds of securities issues to industrial progress by preventing corporations from issuing stock except “for the purpose of enlarging or extending the business of such corporation or for improvements or betterments”, and only with the permission of the Secretary of Commerce and Labor. Corporations would only be permitted to issue stock to finance revenue-generating industrial activities rather than finance the ambitions of sellers and promoters. … S. 232 would have restored the industrial business model to American corporate capitalism and prevented the spread of the finance combination from continuing it dominance of American industry.” (137) In Sklar’s account of the Roosevelt era draft, ‘whenever the amount of outstanding stock should exceed the value of assets, the secretary would require the corporation to call in all staock and issue new stock in lieu thereof in an amount not exceeding the value of assets, and each stockholder would be required to surrender the old stock and receive the new issue in an amount proportionate to the old holdings.”

This may well be the most radical legislation every considered by Congress. Think of it – the stock market as we know it today simply wouldn’t exist. Instead of being a legal fiction, the stock holders would literally own the company, and their profits would be limited to the profits of the company. The price to earnings index would level out so that the stock price would only hover marginally above earnings.

Needless to say, America did not go down this path. In fact, this path of needles seems to have been so traumatic an adventure that it has been thoroughly forgotten. We accept the equities market as it is as an expression of American capitalism. It is really an expression of changes in the physiology of American capitalism that came about during this era – almost overnight, in Mitchell’s view.

The last couple of weeks have both deepened the desperate prospects for the economy and shortened the dimension of changes we are supposed to envision for that economy. Obama’s bright old things – the Geithner/Summers/Romer crewe – have every intellectual investment in how things used to be. Like, two years ago. Why not? They feel themselves to be at the very least master carpenters in the building of the Great Moderation. LI’s stand is that the system – the mangle of inequality – is collapsing, and our vision is that this collapse will be mortal – but this might just be the optimist in us, Jonah’s kindly side, looking forward to Ninevah’s conversion. We think that crewe would certainly resist the radical remedies of 1911. Roosevelt would now be considered somewhat left of Chomsky. However, we have to have broader vistas in order to think about what is happening here. This is one of the reasons that LI considers the strongest charge against Summers to be that he doesn’t read literary novels. He should be questioned on this. The whole board of Economic Advisors should stock up on the great novels – we’d suggest, among others, Moby Dick and J.R. It is the lack of imagination of the self-aggrandizer set that actually produced this mess. At the bottom of the deaths of so much over the last eight years – the death of Iraqis, the death of American money, etc. – is a mortal lack of poetry.

LI, doing our part, will end with another notice from Ludwig Hohl.

“The alteration of the object to be tested through the person, the appearance of the tester, is also very important in the investigation of human situations. One goes to visit the unhappy, the said, the lonely: the visit effects a change. The deepsea divers appears 900 meters below the surface of the sea with a lamp of a terrible intensity, in order to surprise life. But those that were there, flee the light, while those who weren’t there, come near to it. (In spite of all of which, here outer eyes have seen what is hardly given to inner eyes to see, dreams and fantasies).”

Monday, December 01, 2008

Britneyology day!

Ah, December 2 – Brit’s birthday! All the britneyologists in the house go hey! Go ho!

My last post on Britney Spears received a vitriolic response from Dejan, who doesn’t, it appears, like Britney. Well, some don’t. However, Dejan, as an aspiring artist, is all too easily captured by his own likes and dislikes, the charmed circle of his taste. Does no intuition whisper in his ear that this is the path invariably chosen by the minor talent? An early death sentence where the artist is thrown into the circle of the mooks and the haters, infinitely chasing each other in a circle, tearing at each other’s tails – otherwise known as the comments section of You Tube. I’d advise him to heed the wise words of this woman.

My brother, Dan, thinks that Britneyology is a goof. He suspects his older brother of hatching schemes in which he claims beliefs and tastes that he doesn’t have. And, in fact, Li has done such a thing once or twice – but Britneyology triumphs easily over sincere and justified beliefs by simply crushing them underfoot.

And finally, in this list of objectors, an ex Britney fan who had followed her from the mouseketeer days went right to the point: in the one song released from Circus, Britney doesn’t sing. Womanizer is so computer blended that what went in, the thin L.A. patois over a charming, atavistic North Louisiana slowness of vowel, comes out bizarrely British, with hints of Michael Jackson. Now, this seems right to me. The Rolling Stones’ reviewer of Circus said that the singing on Blackout seemed phoned in. Thus, cliché blocks insight, as indeed the use of the phone is sampled all over Blackout. It made Britney’s fans – or at least those hooked into the success of the record companies – nervous. Why? Research has not found a lot of difference between the face to face and the phone voice, except that there is a tendency not to allow a lot of dead air in the phone conversation. However, the phone voice is also a persona – it clears away the bric a brac of the face, that old Victorian technology. Of course, the telephone was the first step in doing things to the voice – in fact, telephones still achieve voice recognizability by editing the vibrations of the voice. This brings out the sort of impersonal/personal that dance is all about. Britney samples her phone voice in Gimme More for the same reason that Biggy samples his in Suicidal Thoughts – it cuts through the engineering by way of engineering. It creates something direct. In Britney’s case, direct was crazy.

However, on her birthday, it isn’t Britney’s voice I want to praise, but her somnambulist's talent for walking between fires. This is what makes her much rarer than you and me. I wanted to quote from H.L. Mencken’s obituary of Valentino, here, but unfortunately, I can’t find the thing on the internet, except on Google Books.

The obituary tells a story. Valentino wanted to meet Mencken in New York to discuss an article that had been published about him in Chicago. The article implied that Valentino was effeminate. According to Mencken, Valentino wanted to challenge the writer to a duel, but was laughed at – and was baffled by the laughter. Mencken went to see him and tried to explain honor in the U.S.:

“Unluckily, all this took place in the United States, where the word honor, save when it is applied to the structural integrity of women, has only a comic significance. When one hears of the honor of politicians, of bankers, of lawyers, of the United States itself, everyone naturally laughs.”

Mencken’s obituary is an important, maybe a founding moment in the literature on American celebrity. Because it oscillates between a contempt for Valentino’s fame, as though fame were some vice, and a perception of the all too human somewhere at the center of his dilemma. At the center, there is a helpless sense of being overshadowed and maddened by the public drama at the periphery. The moment Mencken sees this and writes it, a star trope is born. Central to the celeb profile becomes the trauma of celebrity itself. This, of course, only causes more laughter or contempt. Yet for the celeb, even the densest one, this sense of being obscurely victimized leads to an overwhelming riddle that no man can unriddle – for who, exactly, has selected the victim, who has persecuted him or her, and for what purpose, is forever without an answer.

The length of Britney’s career has now, I believed, surpassed Valentino’s. She’s well on her way to that special status accorded to those whom the gods can’t destroy with the poisoned gift of visuality. Sinatra, Elvis, the Beatles, Madonna. We know them. We don’t know them. Nobody knows them.

And now for a birthday song from another North Louisiana scion, come from that state in the nineties, just like Britney.

Your father made fetuses with flesh licking ladies
While you and your mother were asleep in the trailer park

- Neutral Milk Hotel, oh comely

Tanta RIP

Tanta died.

I read Calculated Risk only to read Tanta. That woman could write. The mortgage is, from one side of things, the most boring of texts. It is mindnumbing numbers, and as it scrapes away your skin, it sings you songs of amortization that put your frontal lobe to sleep. On the other side of things, though, it is as shot through with the agony and the ecstasy as any romance novel. Or, as in the past decade, as any O Henry story – all of them were tending to that O Henry end. It is not the great literature a nation should wallow in, but under the Great Fly, it so became.

It had a poet though, and her name was Tanta.

CR and the Times both quote her Let slip the dogs of hell post in 2006. That post might have been the most powerful thing ever unleashed by the Blogosphere into the real world. It kills. Tanta’s patiently unfolds the acid logic of the Street until one sees it for what it is: a monster trying to profit from aborting itself. She analyzed an unspeakable Citi “analysis” of the mortgage market to show that it was complete gobbledygook – and worse, that it honestly described Citi’s strategy. Along with the other banks (many of them now defunct). If Robert Rubin were ever to face trial for criminal negligence for his role in Citi’s meltdown, the prosecutor could just contrast this post and Rubin’s infamous interview, last week, with WSJ. This is Tanta taking on Citi’s notion that the mortgage market was going to “rationalize” – that is, the big dogs, as she puts it, were going to eat the small dogs:

“I bring all this up not just to stick it to Citicorp, but because we’ve all been asking the question lately of who will be the bagholder when the exotic/subprime mortgage problem finds a home. We have noted in our discussions that credit risk can move in two directions: the wholesaler takes it off the originator and the bond investor takes it off the wholesaler/issuer with the helpful assistance of protection sellers in the hedge fund credit-swap market, but when the “DETOUR” signs pop up, the bond investor can work really hard on forcing it back to the wholesaler/issuer, who can try to put it back to the originator, who gets to try to recover something in a foreclosure sale. If the originator has any financial strength left to buy loans back with, that is; see the sad stories of Ownit, Option One, Fremont, New Century, etc. The “disintermediation” of the mortgage origination side keeps the Big Dogs “flexible,” meaning able to withstand cyclical downturns in the business, but the burning desire on the Street for “vertical integration” seems to mean an endless appetite for erasing that flexibility by buying up the originators of junk, so that they will have paid what one assumes is real money for the privilege of buying back their own loans right at the time they get the “flexibility” of not buying any more of them from the “intermediaries.” If you thought the only thing that would stop the circle jerk of risk was putting some credit and pricing discipline into the game, I guess you’re just a weenie like me. Anyone who can make sense of this is free to set me straight. And if the answer has “sorting socks” in it, don’t bother. I’ve tried that.”

Jesus that is beautiful.

ps - Calculated Risk has now put up a compendium of Tanta's posts. They are here. If you are at all interested in what happened during the zona, you should bookmark that link.

Sunday, November 30, 2008

On Ludwig Hohl

This is a story from Ludwig Hohl’s Notices – I don’t know if this has been translated. Hohl has his supporters in English – George Steiner calls him the secret master of German 20th century prose.


Three men had a fearful fight, each struggling against each. The fight raged over the question of what kind of parts a house is divided into.

The first said: “a house falls into: the cellar, the ground floor, the second floor, the third, etc.”
The second cried: “out of wood, stone, mortar, metals – this is what constitutes a house!”
The third, raging against the first true and treating them as liars and scoundrels, as they collaborated between them and against him, observed that a house falls into lines, and referred to an outline and a profile, on which the length and thickness of every wall, the breadth, length and height of the rooms were giving. Everything else was nonsense, only such projections show the exact parts.
Is it necessary to add that the three men fought to the death, because none would concede that the other was right? One died after the other – as an idiot and hero.”

Hohl spent twenty years laboring over his “Notices, or of the reconciliation that takes some time”, in a cellar in a working quarter of Geneva, to which he had returned after living in self imposed exile in Paris and then in Holland. In Paris, according to Peter Hodina, this is what he did:
“In Paris – at that time he was a very young man – nightly he walked around the borderlines between the arrondisements, eventually getting to all twenty. A singular, and eventually provincial method of getting to know a world city”
. Hodina also makes the remark that Hohl was one of those great writers who, like Valery, never wrote a great work. Rather, he sketched out the structure of one. And began to realize that this is what he was doing: "Everything, whether I underline a passage in a writer or copy it out or send a letter, note something, think something, take a position … everything is work.”

He wrote the Notices in the thirties and forties, giving up the idea of a narrative and breaking up his work into fragments, stories, phrases. The Noticess, when first published, fell still born from the press, and the publisher did not want to experience that with any more notices – thus refusing to publish Hohl’s second part. But reputation is a shadow that moves through a crowd and finds the right sensitive – this is the mythic side of Herder’s dispersed public, the literary and the wrongfoooted, who eventually find themselves drawn even to men in cellars – and in the sixties the young Swiss writers and others – Handke, for instance – referenced him. His intransigence, his alcoholism, his cellar.

I think of Pessoa, of Thomas Bernhard, of Robert Walser, of Roberto Bolano. And they die one after the other, idiots and heros.

Saturday, November 29, 2008


Love is the end of ends of world history, the amen of the universe – Novalis

The first time I went to Mexico, it was with my roommate, H. I was 27. H. was a militant in a Trotskyist party in Monterrey, product of a middle class household, ironist, rock climber, and drinker. He was learning English by watching Red Dawn, Rambo II, and, in particular, Blue Velvet, over and over again. There was nothing he enjoyed more than repeating Dennis Hopper’s immortal words, Heinecken! Fuck that shit! Pabst blue ribbon! And of course saluting the tv with a can of Pabst Blue Ribbon. Irony was a lot cheaper back in those distant days.

So we were talking about this and that on the drive down to Mexico. We stopped to take photos of wild blue bonnets. And at one point, he told me, quite seriously, that he thought the most important thing in life was love.

This, for some reason, astonished me – which is why I can even remember it to this day. I think H. might have been the first male ever to express this sentiment to me. Well, except for Jesus, but it was hard to tell what Jesus was talking about when I was a tot and by this time I was past the point of going to churches.

Looking back on H.’s remark today, I can’t say I disagree so much about the love part as about the ‘most important’ part – my perpetual inner émigré has a hard time believing that lives happen in such a way that there is a most important part to them. This might be either the wisdom of the Dhammapada, or cheap nihilism, or a little of both.

Still, H.’s idea has been a pretty powerful one – it has provided the single biggest rival to the modernist cult of happiness. The idea that love is the foundation of the truly human community is perhaps central to the counter-traditions I’ve pointed out before – the three alienations, so to speak: the liberal, reactionary and radical. And the critical viewpoint on happiness is drawn back to love by the force of historical things. Of course, from the liberal point of view, there is a strong critique of the notion that love is the foundation of community. The word for that is totalitarianism. It is, perhaps, no coincidence that Hannah Arendt went from doing dissertation work on love to writing her massive opus, The Origins of Totalitarianism. When Calasso speaks of how the ancien regime sweetness of life turned sour – how Wormwood fell to earth and turned the waters bitter – he is touching on the fact that what volupte loaned the incipient happiness culture – a more and more simple tie between pleasure and happiness – produced, as it were, a cultural vacuum which the literature of sentiments, that quasi-institutionalisation of romantic love, filled. A dangerous void.

So, now that we’ve discovered the carte d’amour among the demographic statistics, it is time to talk about Romanticism and we’ll begin with the chapter in Ricarda Huch’s book, the Blooming of Romanticism, on romantic love.

Thursday, November 27, 2008


“You say I’m crazy/
I got your crazy”

So, the Britney issue of Rolling Stone is out, just before her birthday, December 2. Britney is in official return mode. What is she returning from? What everyone agrees is an off the charts craziness. For instance, she got drunk a few times. She might have walked around naked in front of her children, infants at the time. She shaved her hair off. The cops came around, she was making a disturbance.

For this, she received the following punishments: the court took her boys away. The court gave her father control of all her money. The court gave her father control of all her possessions. Apparently even her phone calls are supervised.

I am the Leon Bloy among Britneyologists, I think. In the introduction to the Exegesis of Common Places, Bloy writes (as though presciently seeing, one hundred year ago, the sin the press commits daily in writing of Ms. Spears):

“The true bourgeois, that is to say, in a modern sense and in the most general of possible senses, the man who makes no use of the faculty of thought, and who lives, or appears to live without having ever been solicited, a single day, by the need to understand anything whatsoever, the authentic and indiscussible bourgeois is necessarily limited in his language to a very small number of formulas.

The repertory of patrimonial locutions that suffices for him is extremely cramped and never goes beyond a few hundred. Ah! If only one were holy enough to rob him of this humble treasure, what a paradise of silence would fall immediately upon our consoled globe!

When a manager or a clothing factory owner hazards the observation, for example: that you can’t remake yourself; that one can’t have everything; that business is business; that the doctor is a priest; that Paris wasn’t built in a day; that babies did not ask to come into the world, etc. etc., etc. , what would happen if one proved to him instantly that one or another of these hoary clichés corresponds to some divine reality having to power to make worlds tremble and to unchain catastrophes without mercy?”

And so it is with Spear’s ‘madness’, which is, of course, not madness at all, but the projection of a social madness, the madness of Autrui, so deepseated that Bloy would, of course, suspect a Luciferean origin. So when I read this part of the Spears story, I did feel an empathetic spear going through my side – or perhaps the one that went through her side, as she was nailed to an image that and put through a grinder to make money for someone, day after fucking day, ending up, as the journalist says, with as much control over her life as she had as a seventeen year old Mouseketeer:

"I feel like an old person now," she says one afternoon, as a manicurist applies rhinestones and girly pink lacquer to her chewed-up nails. "I do! I go to bed at, like, 9:30 every night, and I don't go out or anything, you know what I mean? I just feel like an old fart."
And this:

“Of all the things Britney has lost in the past year, it's the custody of her sons, Sean Preston, 3, and Jayden, 2, that has shaken her hardest. "Every time they come to visit me, I think about how they're such special people," says Spears, who currently sees the boys three days a week, with one overnight stay. "Like, they're going to preschool now! I went there to pick them up on Friday, and seeing them in their little classroom and seeing Jayden being bad or not listening? It's like, those are mine, and it's just crazy, you know what I mean? And the things that are coming out of their mouths right now — they're learning so much, and it's new, and you never know what they're going to say, and they're so smart yet so innocent. They're obsessed with monsters, and every night we look outside, and we have to show them that there's no monsters out there. It's dark outside, but there's nothin' out there, you know?"

Ever since she was a little girl growing up in Kentwood, Louisiana, Spears dreamed of having her own children. She considered the experience "the closest thing to God," she said in 2004 in a note on her fan site. "To be a really good mom, I feel your child needs to be your full-time job. I want to raise my kids and share all of those precious moments with them."

But things haven't turned out like she imagined. "I didn't think my husband was gonna leave me," she says, deadpan. She laughs to break the tension. "Otherwise, I'd be with my babies 24/7. But since they're almost like twins, they both take care of each other. I think they look like me," she says, going from affectionate to bitter as she gets distracted by thoughts of Federline, whom she sees only when one of them is picking up the boys. "They don't look like their father at all," she continues. "And it's weird 'cause they're starting to learn words like 'stupid,' and Preston says the f-word now sometimes. He doesn't get it from us. He must get it from his daddy. I say it, but not around my kids."

One has to remember that Spears lives in a city in which the D.A.’s office prides itself on taking frivolous cases against celebrities and running with them, all the way through a cycle of daytime talk shows and nighttime entertainment shows and perhaps into their own consultant spot. The lights is green, time to come out and feed another odorless, colorless victim who develops odor and color – the malignant disease of the non photogenic occasion, the gotcha photo op. But of course, the trolls lie in wait for good time girls all over America: the judge who dismisses a rape here or there in Northern Louisiana, the police chief who spends a perfunctory day tracking down killer unknown after discovering some dissected corpse of a whore in Houston, the whole sad sack of shit you can expect one you bump up against the thing that has been there since long before Judges 19:25.

All I want to know is: when is Britney going to get back her kids?


I’ve been meaning to link to this for some time. Thanksgiving marks the start of the shopping-time, although as we all know, the charge it spirit is a little weak this year. Anyway, my friend Kiyoko, a jeweler in NYC, has started her own biz. I like her jewelry, I like her eye for minutia, I like her energy, I like her sense of what hangs and sparkles and needs to have an eye cocked at it – I like her intuition of the inner human Bird. Check out her site at Bookat NYC if you - oh fashion mavening reader – feel like buying jewelry. I should figure out how to put a picture on my sidebar for her. I should know how to do these things!

Wednesday, November 26, 2008


"Whence is that knocking?
How is't with me, when every noise appals me?
What hands are here? Ha, they pluck out mine eyes!
Will all great Neptune's ocean wash this blood
Clean from my hand? No, this my hand will rather
The multitudinous seas incarnadine,
Making the green one red."

As I said and will continue to say, since there is nothing sweeter than a word grown so bitter in your mouth that it makes your tongue cancerous - that is, to a certain degree of madman, such as LI - the bailout is perhaps the most foolish project ever mounted by a state since Darius decided to whip the sea. The figures are mounting, sweetly sweetly up into complete fantasy. Readers are urged to go see how 7.6 trillion dollars have been pledged by our lovesick Treasury and Fed - come back, SIVs of 2007! We want to light the cigars with the hundred dollar bills again!

PS – LI is thinking that there is some virus that went around the liberal blogs after the Obama victory. Instead of seizing the moment, these bloggers seem intent, suddenly, on defending the indefensible. Kevin Drum, at MOJO, posted today on the bailout, and this is what he had to say:

“Can we please stop this? Calling this a "$326 billion" bailout is crazy. It's a $20 billion capital injection plus a bunch of asset guarantees with a maximum cost of $250 billion and a probable cost in the low billions. (Possibly zero, in fact.) The capital will probably be repaid eventually, but even if it isn't it's highly unlikely that Uncle Sam is on the hook for more than $30-40 billion.

This stuff has gotten completely out of hand, with "estimates" of the bailout these days ranging from $3 trillion to $7 trillion even though the vast bulk of this sum comes in the form of loan guarantees, lending facilities, and capital injections. The government will almost certainly end up spending a lot of money rescuing the financial system (I wouldn't be surprised if the final tab comes to $1 trillion over five years, maybe $2 trillion at the outside), but it's not $7 trillion or anything close to it.”

You will notice that the figures in the second paragraph were ground out not by some devilishly clever calculation, but by the simply bloggy expedient of deciding one needs a figure that sounds reasonable, not too high and not too low. The error rate of the quick calculation is - it could be x or twice x. Wow, there's a calculation for you. And after all, a trillion is now our number of choice.

In fact, Drum’s post does bring up the question of how one figures out the payback. And that brings up the larger question: if, in fact, the financial sector shrinks 15-30 percent or more over the next few years – and that is the conservative estimate of Rogoff, Willem Buiter believes it will be more, how in the world are they going to be viable facing 7 trillion dollars in obligations? The short answer is: they won’t. Either the U.S. eats this debt or the financial sector – whoever is left standing – eats it. But this isn’t, I think, edible. In fact, this is the kind of debt that sticks in the windpipe and causes suffocation, thrashing and death.
We could, of course, have simply capitalized a national bank and used it to keep the usual channels of finance open. Hell, such a bank would be ideal for handling the non-bankruptcy/bankruptcy of GM. But that is not going to happen now. What is happening is this: we are investing 7 trillion dollars in future obligations in the hopes that the financial sector will remain the same size, or grow, in the future. Rather like investing in blacksmithing just around the time Ford came out with the Model T.