“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, 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.