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

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

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

Saturday, November 29, 2008

ALL YOU NEED IS LOVE...

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

Brit




“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?

Jewelry




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

ALL THE MONEY IN THE WORLD: THE CONTINUING AND EXCITING SERIES!

"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.

Financial Cryptozoology





Because History is a poet, the idea of resurrected the financial sector of 2007 is rubbing elbows, in the press, with the idea that scientists are now able to genetically recreate the Wooly Mammoth. And there is a certain resonance between the big American banks and the Mammoths:

Preserved frozen remains of woolly mammoths have been found in the northern parts of Siberia. This is a rare occurrence, essentially requiring the animal to have been buried rapidly in liquid or semi-solids such as silt, mud and icy water which then froze.

This may have occurred in a number of ways. Mammoths may have been trapped in bogs or quicksands and either died of starvation or exposure, or drowning if they sank under the surface. They may have fallen through frozen ice into small ponds or potholes, entombing them. Many are certainly known to have been killed in rivers, perhaps through being swept away by river floods; in one location, by the Berelekh River in Yakutia in Siberia, more than 9,000 bones from at least 156 individual mammoths have been found in a single spot, apparently having been swept there by the current.

To date, thirty-nine preserved bodies have been found, but only four of them are complete. In most cases the flesh shows signs of decay before its freezing and later desiccation. Stories abound about frozen mammoth corpses that were still edible once defrosted, but the original sources (e.g. William R. Farrand's article in Science 133 [March 17, 1961]:729-735) indicate that the corpses were in fact terribly decayed, and the stench so unbearable that only the dogs accompanying the finders showed any interest in the flesh.”


Buried rapidly in liquid or semi-solids – a few changes and that would fit for Bear Stearns. You do remember Bear, don’t you? Used to be a bank.

Well, since this weekend the U.S. committed to Citi with a sorta startling generosity – equal to two years of the Iraq war, which is a pretty good party for a weekend even for Uncle Sam, you must admit – it is interesting to read about what the financial sector was up to, so that, when we clone our new species of mammoth bank, we aren’t surprised by its behavior in the wild.

So I went to this site , via Felix Salmon. This is how Alan Kohler describes them:

“Here’s how it works: a bank will set up a shelf company in Cayman Islands or somewhere with $2 of capital and shareholders other than the bank itself. They are usually charities that could use a little cash, and when some nice banker in a suit shows up and offers them money to sign some documents, they do.

That allows the so-called special purpose vehicle (SPV) to have “deniability”, as in “it’s nothing to do with us” – an idea the banks would have picked up from the Godfather movies.

The bank then creates a CDS between itself and the SPV. Usually credit default swaps reference a single third party, but for the purpose of the synthetic CDOs, they reference at least 100 companies.

The CDS contracts between the SPV can be $US500 million to $US1 billion, or sometimes more. They have a variety of twists and turns, but it usually goes something like this: if seven of the 100 reference entities default, the SPV has to pay the bank a third of the money; if eight default, it’s two-thirds; and if nine default, the whole amount is repayable.

For this, the bank agrees to pay the SPV 1 or 2 per cent per annum of the contracted sum.

Finally the SPV is taken along to Moody’s, Standard and Poor’s and Fitch’s and the ratings agencies sprinkle AAA magic dust upon it, and transform it from a pumpkin into a splendid coach.”

Kohler points out that the tipping point is coming, since the reference entities were a list of things like, oh, General Motors, Lehman Bank, etc. Now it might seem that’s no big deal, these 2 dollar SIVs will just collapse – but the genius of the system was to send salesmen around to get investors to put money into those clonish entitites. Oh, the joy! Pension funds. City governments looking for an exciting yield. Mutual funds. The whole wondrous world. And so they grew and grew, like mighty mammoths. Now, if they collapse, the banks will be all saved! By sucking enormous amounts of money from the rest of the system. Or, as Kohler puts it:
“It is a truly great irony that the world’s banks could end up being saved not by governments, but by the synthetic CDO time bomb that they set ticking with their own questionable practices during the credit boom.”

I have to give the establishment a lot of credit. They successfully made the guys on assembly lines making GM cars and trucks villains in the classic mode of that type dear to Reagan, the leaching, fraudulent, probably black welfare mother. One of Reagan’s most popular creations. Meanwhile, admitting the poor leadership of the banks, and the fact that they didn’t understand the risks they were running, they have, shall we say, omitted the sausage making part of the sausage – what were the instruments of that risk all about? You can see that innovations like this are the vehicle that allowed the ownership society to take greater risks – and don’t we all love risks? You might not be able to see that it did any social good at all. But then, if you are looking for social good, you haven’t been reading your Rand. So you definitely don’t understand D.C.

The O. Henry part of this little fairy tale is that, fucking over the auto industry might just be the trigger for the CDS cascade. whosoever diggeth a pit/shall fall in it...

Tuesday, November 25, 2008

My review of Outliers

I was talking to a friend last night, who told me she read my Malcolm Gladwell review. I didn’t even know it was out yet! So I looked around this morning, googling myself, and I found myself listed on the NY Mag site as a Gladwell hater Now, that isn’t right – Michiko Kakatani, that enigma wrapped in a puzzle (the puzzle being: why is such a poor reader and writer kept on to review books, year after year, for the Times?) is a Gladwell hater, and her review of Outliers is argued with in her usual way – which is this – Kakatani has a prejudice, the writer under review contravenes it, thus the writer under review is wrong. As well as bad. As well as a bad influence. And the worst thing ever. Etc., etc. So Gladwell shows – as any sociology 101 course would show – that the social and the individual so interpenetrate that the notion of the self-reliant individual has to be considered a myth. To which Kakatani replies:

“Such assessments turn individuals into pawns of their cultural heritage, just as Mr. Gladwell’s emphasis on class and accidents of historical timing plays down the role of individual grit and talent to the point where he seems to be sketching a kind of theory of social predestination, determining who gets ahead and who does not — and all based not on persuasive, broadband research, but on a flimsy selection of colorful anecdotes and stories.”

Question begging isn’t the name for this – sophomoric ignorance is.

Myself, I was pretty disappointed in Outliers because – well, you can read my review.

And, hopefully, I am not a reviewer who just says I hate this, I like that. I find reviews that simply do that pointless, and a curse on the review industry, such as it is. I have an image of the perfect review that has nothing to do with the positive or negative. It is like one of those Brazilian faith healers who are reportedly able to place their hands on a patient's body and, through sheer mental concentration, reach through the skin and the muscle, rendered magically porous, to pull out whatever distemper is causing the sickness. Except, in the review, the reviewer reaches into the book, far into it, and pulls out its bleeding, beating, lovely or hideous heart, its center, its vulnerability, its divine, its secret name.

If you can't do that, don't review.

In the cage: Obama's Team of Losers




Like any other liberal, I’m appalled by the rightwing tilt of Obama’s economics team. Any team that is hailed by libertarians and Bushites like Greg Mankiew is obviously not a team I want to play with.

And yet, in some ways, I’m indifferent.

When I use the term rightwing, some explanation needs to be put in place. The terms rightwing and leftwing are often used as markers of rhetoric. It is as if we should bracket the social context of these comments, and discuss them as “ideas”. Myself, I think that the rhetoric only makes sense when embedded in a robust sense of the sociology of a situation. Rhetoric is part of the way a society dreams itself, and like all dreams, should be subject to psychoanalysis – but psychoanalysis is no substitute for history. The history of the last thirty years was about the growing power of the parasitic Dixie model, in which heavy public investment elsewhere – in the Northeast U.S., say, or in Japan – produced an economic activity that could be successfully transported to the South by way of a government intervention – a tax break, say, along with laws preventing labor organization – which would be followed by the continued refusal to make public investments. Thus, in the Sunbelt, you have considerable industrial activity, little of it generated within the Sunbelt, plus an indigenous asset based sector – real estate – and the two together allowed for a regime that took on the accoutrements of the highly developed economy without making the necessary sacrifices to sustain one. This, and this only, is what is meant by small government. This economic form joined with a neo-liberal mindset that had three pillars – as I’ve said over and over. (Pause for breath)

What they are, these pillars, ahem, ahem, I outlined in this huffy reply to a post on Matt Yglesias’ blog. MY is very enthused about the murder of the American auto industry, which he shares with the libertarian young turks he knows, admires, and goes to whenever he has questions about the deeper passages in Atlas Shrugged. In this particular post, MY is psyched that a master such as Bruce Bartlett is giving the thumbs up to Obama’s economics team – Bruce Bartlett! Admittedly, this reply goes over things that I repeat like an organ grinder on this blog. But what can I do? Indignation does have a tendency to degenerate into Tourette’s, and that is what I have, political Tourette’s syndrome.

But here’s the latest version of my rant:

“I’m not sure of the point of this post. The point, I guess, should be that the neo-liberal establishment thinks that basically, nothing is happening here, and we are gonna move back to our open and free markets uber alles position that binds administration policies from Reagan to W in one big happy family. Minus the pesky automakers, which have to be thrown right out of the club, those scum! It is all creative destruction and how we like it.

Meanwhile, this is the week neo-liberalism died. All economies are political economies - they depend on a political pact that underlies any macro policy. The political pact underlying neo-liberalism was pretty simple: a. expanded credit for the masses; b. a robust shadow financial sector; and c., a continuing influx of money from household savings, in the form of 401(k)s, mutual funds, money markets, etc. These all worked together. The middle class did not bond with the investor class because they are “aspirational”, but because they saw their retirement accounts swelling and their assets becoming pricier. While their everyday economic life, which depends on labor income, became in one sense harder, as the rate of earnings increases decreased and then vanished, the increased credit patched over the spots in the lifestyle. And of course, b., allowed the creditor to take increased risks.

Well, a, b, and c are dead. It would not at all be surprising that the equities markets either stabilize at a low level and stay there for a decade, or keep sinking. That means, in essence, that the accumulated savings of those who went through the boom years from the eighties until now are seeing their future systematically destroyed. That was the future they were willing to trade slower income growth for. And meanwhile, good bye to the expanded credit sphere. You might patch your lifestyle gaps with 9 percent, but 19 percent, 29 percent - that is when we are talking about the pre-modern economy. That is interest that, in effect, retracts the elbow room given by credit. In the final month in which Obama pulled ahead, it was clearly the 401(k) effect. It wasn’t youth, it wasn’t change, it wasn’t hope - it was a vast fear. Which will be speaking out a lot more as it turns out that the fear was understated - things are a lot worse than they seem.
So the “brilliant” Larry Summers, missionary of neo-liberalism when the U.S. was the indispensible nation and architect, with Phil Gramm, of the deregulated marketplace that made the perverse Bush boom possible, is going to find that he simply can’t use the old nostrums. Because the old system is gone. Bartlett celebrating this is like one of Louis XVI’s courtiers assuring everybody that the Bishop of Autan, Tallyrand, being so powerful in the Assembly, everybody’s head is safe. It is a joke.

Of course, the last joke of the expiring neo-liberal imperium was the very funny one, which MY laughed at heartily, of course, along with other important young public intellectuals, of shooting GM in the head. Funny funny funny. Those people had the gall to ask for a loan of 25 billion - and sharpeyed Matt saw that could reach to 75 billion! Over the weekend, we decide that Citi needs 300 billion and - well, that’s all right then. It might not be a great deal, but shucks, they needed it and all.

Yes, neoliberalism is a corpse, but it will keep kicking for a while among the pundits.”


My hope, in this election, was that Obama saw the obvious. My disappointment with the appointment of that team of A level neo-libs is that he doesn’t. Yet the difference here is that the neo-libs have lost their tools. They have become State financed humpty dumpties, trying to glue together one cracked egg after another. It is funny, a ha ha joke, that the only industry bailout that ever worked was – surprise! – with the auto industry, namely the Chrysler loan of 1979. My working definition of worked is that Chrysler is still around, paid off the loan with interest, generated tons of profits for investors and paid wages that made life pleasant for thousands of employees, and even led the car design field – admittedly, in the disastrous direction of the SUV – in the early nineties. Manufacturing is one area in which government can actively intervene to good purpose, because the metrics are pretty clear.

Finance, on the other hand, has to be a market driven sector, and the government has to be a guardian of the institutions, even to the extent of coercing those institutions into being. When, in 1927, Coolidge unilaterally seized the radio airwaves for the government and then rented out space on them, he was creating an institution. On this model, the Fed should long ago have seized the peer-to-peer, OTC system by which derivatives are traded and forced it to become an open derivatives market, much like any other equities market, in which all products are transparent and all traders are known. Anything else is bullshit. That they still haven’t done that, and that the crewe brought together by Obama has a historic interest in continuing the sector in its dysfunctional ways is a bad, bad thing. But I think they will be forced to do what they don’t want to do, anyway. The question is, will they be forced to do it before the Treasure blows such a hole in the U.S. Government’s ability to respond that we have a crippled, Brazil like government. We’ll see.

Oh, and Yves Smith, my darling - she is definitely up in the pantheon as far as I am concerned - wrote an excellent little post about our collective cognitive capture by the financial hegemony model:

"There is a remarkable failure to acknowledge a key element of the task before us, that is, that the financial system HAS to shrink. Its current size is based on an unsustainable level of debt, a big chunk of which will go bust or be renegotiated. Yet rather than trying to figure out what a new, slimmed down version of banking ought to look like, to ascertain which pieces should be preserved and which jettisoned, the authorities are instead reacting in a completely ad hoc fashion, rushing to put out the latest fire. And in the process, they keep trying to validate overly inflated asset values (a measure straight out of the failed Japan playbook) rather than try to ascertain what their real value might be so as to determine how much recapitalization might ultimately be needed (if you doubt me, Exhibit One is the pending Citi bailout, in which lousy assets will be guaranteed at phony values). Is this denial? Do the authorities fear that if they work up this analysis, it will leak out and the markets will panic? This seems to be the first, most important order of business, yet here we are more than a year into the crisis, still tip-toeing around one of the very biggest issues.

And why is that? Back to the cult issue. Willem Buiter has chastised the Fed for what he calls "cognitive regulatory capture," that is, that they identify far too strongly with the values and world view of their charges. But it isn't just the Fed. The media. and to a lesser degree, society at large has bought into the construct of the importance, value, and virtue of the financial sector, even as it is coming violently apart before our eyes. Why, for instance, the vituperative reaction against a GM bailout, while we assume Citi has to be rescued? A GM bankruptcy would be at least as catastrophic as a Citi failure. but GM elicits attacks for the incompetence of its management and the supposedly unreasonable posture of the UAW (the same free market advocates recoil at a deal struck by consenting adults). The particular target for ire is the autoworker pensions and health plans, as well as their work rules. But the pension plans being underwater is the fault of GM management for not providing for them in the fat years; I personally have trouble with the idea that health care should vary by class; and for the work rules, German and Swedish automakers have strong unions and yet can compete. I see the UAW as having correctly seen GM management feeding at the trough and doing a good job at extracting their share.

And yet the specter of incompetent, and worse, DISHONEST management elicits far less anger. GM may not make the best cars, but Citi and other banks sold products that were terrible, destructive, that resulted in huge losses and are wrecking economies, damage crappy cars could never inflict (environmentalists might quibble, but never has so much seeming wealth evaporated in so little time, and with the main culprits readily identified). They paid huge bonuses, yet their 2004-mid 2007 earnings have been wiped out by subsequent losses. But while UAW workers will have to give up on deals cut earlier, in terms of health care and pension promises (entered into, by the way, to bridge difference over wage levels), I guarantee no Wall Street denizen of the peak years will have to cough up one penny of his bonus from those days."

Monday, November 24, 2008

The girls are crying the boys are masturbating

I.
We dive down through the ocean of statistics to find, at the bottom, the carte d’amour that has foundered there. Diving into the wreck is a pretty good definition of this history, and LI has been aiming to be one of the deep divers Melville talks about in his famous letter on Emerson:

“Now, there is a something about every man elevated above mediocrity, which is, for the most part, instinctuly perceptible. This I see in Mr Emerson. And, frankly, for the sake of the argument, let us call him a fool; -- then had I rather be a fool than a wise man. -- I love all men who dive. Any fish can swim near the surface, but it takes a great whale to go down stairs five miles or more; & if he don't attain the bottom, why, all the lead in Galena can't fashion the plumet that will. I'm not talking of Mr Emerson now -- but of the whole corps of thought-divers, that have been diving & coming up again with bloodshot eyes since the world began.”



So, with bloodshot eyes from my practice submersions – take me to the river! let me drown in the Deep End, Lord! - LI wants to allude to the last post in which we mentioned the coincidence between the geography of Hajnal’s thesis about the formation of the – in his final version – Northwest European household - and the geography of the happiness culture that we think, at least, we have a hook into, and are raising up inch by painful inch, a true fish tale of continental, or maybe global capture. And if you hook the world and raise the world, where is the world upon which the fisherman sits, or stands or floats in the tale? Whose blood is, after all, at stake here?

As we said, however, Hajnal’s thesis is, to say the least, arguable – and there are too many exceptions to accept his identification of the simple household with modernization. The leaks can’t be stopped, and aren’t these the old, traditional, the West is the Best kind of leakages? Still, we take it that there is a shift in an area of Europe in the sixteenth century that resulted in higher ages of marriage, a consequent prolongation of youth, and simple households around a single married couple. According to Lawrence Stone and André Burguière, the shift in the formation of the household in the sixteenth century corresponds to a wave of ascetism. If we are meeting whales at this depth, they all seem to resemble Max Weber. One keeps bumping into the ascetic thesis. And well you might ask, gentle reader, if this doesn’t completely fuck up LI’s own thesis. Have we got off on the wrong foot, examining the libertines? Shouldn’t we have started with with levelers?


II

I note these as minnow questions that threaten to turn into sharks. But I won’t be pulled away from love. Love and suicide, those were the themes I want to do for a threadwhile longer.

So, let’s think about women.

III


In particular, three women, spaced out over the 18th century. First, Mary Astell, whose book about marriage can be found here. Then Sophie Huber, a not completely untypical writer and bourgeois adventurer – in her own way – who responded to the French Revolution with one of her own, ditching her husband, Georg Forster, the famed German explorer, to live with a mutual friend with whom she was more sexually compatible. And Mme de Stael, naturally.

Sunday, November 23, 2008

Tyler Cowen's country club guide to economics: don't tip the caddies!


Bateman takes out his wallet and pulls out a card.

PRICE
(Suddenly enthused)
What's that, a gram?

BATEMAN
New card. What do you think?

McDermott lifts it up and examines the lettering carefully.

McDERMOTT
Whoa. Very nice. Take a look.

He hands it to Van Patten.

BATEMAN
Picked them up from the printers yesterday

VAN PATTEN
Good coloring.

BATEMAN
That's bone. And the lettering is something called
Silian Rail.

McDERMOTT
(Envious)
Silian Rail?

VAN PATTEN
It is very cool, Bateman. But that's nothing.

He pulls a card out of his wallet and slaps it on the
table.

VAN PATTEN
Look at this.

They all lean forward to inspect it.

PRICE
That's really nice.

Bateman clenches his fists beneath the table, trying to
control his anxiety.

VAN PATTEN
Eggshell with Romalian type.
(Turning to Bateman)
What do you think?

BATEMAN
(Barely able to breath, his voice a croak)
Nice.

PRICE
(Holding the card up to the light)
Jesus. This is really super. How'd a nitwit like you get so
tasteful?

Bateman stares at his own card and then enviously at
McDermott's.

BATEMAN (V.O.)
I can't believe that Price prefers McDermott's card to mine.

PRICE
But wait. You ain't seen nothin' yet.

He holds up his own card.

PRICE
Raised lettering, pale nimbus white...

BATEMAN
(Choking with anxiety)
Impressive. Very nice. Let's see Paul Owen's card.

Price pulls a card from an inside coat pocket and holds it
up for their inspection: "PAUL OWEN, PIERCE & PIERCE,
MERGERS AND ACQUISITIONS." Bateman swallows, speechless.
The sound in the room dies down and all we hear is a faint
heartbeat as Bateman stares at the magnificent card.

BATEMAN (V.O.)
Look at that subtle off-white coloring. The tasteful thickness
of it. Oh my God, it even has a watermark..." - American Psycho



Tyler Cowen, of whose libertarianism the business page of the NYT is so fond, finds a comfy niche there today to issue some country club warnings to Obama on drawing the wrong lessons from the Great Depression. On the country club circuit, there has been quite a bit of alarm about the whole Roosevelt cult thing, which has definitely disturbed the back to laissez faire thing. We’ve had this temporary bump, don’t you see.

The list of things to do to please rich people is quite amusing. Among them is this sterling piece of malarkey:

“GET THE SMALL THINGS RIGHT It’s not just monetary and fiscal policies that are important. Roosevelt instituted a disastrous legacy of agricultural subsidies and sought to cartelize industry, backed by force of law. Neither policy helped the economy recover.
He also took steps to strengthen unions and to keep real wages high. This helped workers who had jobs, but made it much harder for the unemployed to get back to work. One result was unemployment rates that remained high throughout the New Deal period.
Today, President-elect Barack Obama faces pressures to make unionization easier, but such policies are likely to worsen the recession for many Americans.”
This is, of course, the purest fiction. Price supports for agriculture saved the Middle West – it is only an economist who is lost in the inhumanity of it all that thinks of such things as the “small things”, and in gratitude the farmers there routinely now vote in Republicans who praise small government and vote in vast subsidies for the raising of corn, wheat and cattle. Cowen obviously has no idea how the 2 percent of the population involved in agriculture feed the 98 percent not so involved.
But it is the union smacking that is truly funny.
Conservatives have skipped right over the causes of the Great Depression, because it is so icky looking over the twenties when you can lie about Roosevelt’s unemployment figures – they actually went down considerably until 1937, then rose in the recession of 1938 – which was caused by Roosevelt listening to the orthodox bewailing government expenditure, and cutting back, and then went down again. The structures put in place by Roosevelt – for instance, social security – were the foundation for the relatively high labor flexibility that allowed the American economy in the late 40s up until 1980 to avoid any Depression style drop in unemployment
But more than that – it was, of course, the gross and sustained inequality of income which was a fundamental feature of the 20s economy that magnified the Depression. While productivity rose considerably, salaries and wages didn’t. As Galbraith puts it in his book on the Crash, in relating the causes of the Depression:
1. “The bad distribution of income. In 1929, the rich were indubitably rich. The figures are not entirely satisfactory, but it seems certain that the 5 percent of the population with the highest incomes in that year received approximately one third of all personal income. The proportion of personal income received in the form of interest, dividends and rent – the income, broadly speaking, of the well-to-do – was about twice as great as in the years following the Second World War.
This highly unequal income distribution meant that the economy was dependent ona high level of investment or a high level of luxury consumer spending or both. The rich cannot buy great quantities of bread. If they are to dispose of what they receive it must be on luxuries or by way of investment in new plants and new projects. Both investment and luxury spending are subject, inevitably, to more erratic influences and to wider fluctuations than the bread and rent outlays of the 25 dollar-a-week workman. This highbracket spending and investment was especially susceptible, one may assume, to the crushing news from the stock market in October of 1929.”

Now, of course the libertarian dream is to return to that income structure, and the naughties nearly did it. However, one of the great results of the increase in labor bargaining power is that this structure was broken in the 30s, and didn’t recover as a force of oppression in U.S. society until the 80s – and even then, the open advocacy of impoverishing the blue collar class, which has now become a yahoo standard on the right, was muted. Anybody looking at the Great crash of 2008 would do well to look at the housing bubble that kickstarted it in terms of the fact that, though productivity gains were significant throughout the decade, the profit from those gains was accrued solely by the well-to-do. The middle and working class made up fro the lack of their fair share through the credit that was extended to them in the spirit of amity and greed that made the Bankruptcy act of 2005 such a joy to our hearts. That extension of credit was, of course, fundamentally irrational. Why would one want a system in which, at the same time, the producers gain no more from the increase of their productivity while at the same time they gain a whole new power of credit? One of these things doesn’t go with the other. If you are going to impoverish the mass of the population, you can’t do it by halves. Surely Cowen should recommend that the next time, the population, after getting home from jobs in which union oppression has been lifted and their wages have been joyously cut, should be free to sell their organs at market rates – perhaps they can take out loans on this, too.

LI has a certain faith in reality. Thus, for instance, we are not disturbed that Clinton the hawk is becoming the Secretary of State, since the reality of the U.S. economic condition is the biggest peacemaker there is – in fact, the U.S. can’t support any more enormously popular war-tainment. Iraq was a lot of fun, we all enjoy the victory there, and when you add it up, we can do high fives that 400-600 thou Iraqis died, and our casualties were less than a haircut! But we probably are not going to have so much fun again soon. Reality was what scotched the Bushite desire to bomb bomb bomb Iran. Myself, I don’t think the Obama admin. has the stomach for driving the price of oil up to 165 bucks per barrel again. But given the astonishing, criminal negligence of the Dems in the last days of 2008 – the insane shooting of the auto industry in the head – I am less sanguine about the passage of union friendly legislation than I had been. Obama is listening to the Cowens of the world – the incorrigible and highly disgusting Larry Summers is his economics advisor, and perhaps Obama can get the scoop from him on Robert Scheer’s story in the Nation about how Summers was really the point man who helped free the financial services sector from onerous regulation – and this is going to be bad news for all of us if it continues.