Saturday, April 14, 2012

Notes on the French election

In the campaign of 2006, Nicholas Sarkozy and Segolene Royal were both asked, by Jean-Jacques Bourdin, about the capabilities of the French nuclear submarine fleet. Royal said that there were 7 nuclear armed submarines. Sarkozy said there were 6. And the interviewer said there were 5. As Royal points out in her account of the campaign, Ma plus belle histoire c’est vous, that all three numbers were wrong did not mean that all three respondents were treated equally. Rather, while Bourdin, the intereviewer, received no flack for asking a question the answer to which he did not know, and while Sarkozy was treated as having a sort of minimal knowledge of the fleet – given a C, so to speak – Royal’s answer was supposed to reveal a fundamental and disqualifying ignorance:

« I haven’t forgotten the UMP communiqué which gave the angle that the commentators were supposed to make about me: “It is not a question of pilling on the candidate. [feminine in the French]. But still, we need to remember that she aspires to article 5 of our constitution, to wit, becoming chief of the armed services with the responsibility over nuclear weapons engagement. Such a  error over the fundamentals of our defense is more than disquieting” On the howler of the candidate [masculine – Sarkozy] – one says the minimum, very quickly, and passes to other things.”

This passage was taken up by a sociolinguist, Ruth Amossy, as an example of argumentation in political discourse, partly because it is an instance of analysing a discourse while making an argument within the discourse. Amossy uses it to argue that one cannot separate some pure logical core – the logos – from the rhetorical form in which it is expressed – the side of pathos –in practical argument.  If two people make the same mistake, and one is blamed for it and the other  is not, than we have to seek some motivation for the inequality of the distribution of blame (and the distribution of blame always leads us back to justice, however instituted).

I bring this up because, last night, at dinner, I was asked by a friend of ours who I’d vote for, if I could vote in the French election, and I said Melenchon. Our friend, who supports Eva Joli, replied that she disliked Melenchon’s macho style. And that made me want to say, what does style have to do with it? Because I do have a certain strategic notion that the pathos of lefty demagoguery, which does tend to the masculinist gesture, results in programs that are much more advantageous to women than not. That  is, if we take into account women in the working class, where the majority of women are, as well as women in middle management and middle class.

But on the other hand, Royal’s anecdote is telling. Style’s power consists in being able to shift the topic. As our friend pointed out, Melenchon was certainly in the socialist cenacle in which DSK flourished, but he, too, seems to have been an enabler. And from this point of view, Joli’s intransigent contempt for corruption and the cult of entitlement is stylistically and logically preferable to the Quixotic invocation of working movements past. I suppose what I’d like is a qualitative leap that connected the two – the unbending problems of  class and gender –and from this perspective, neither Melenchon nor Joli will do.

That said,  I think Joli has been a pretty bad candidate. I’ve been unhappy that a year after Fukishima, and two years after the Gulf Oil Spill, and well into the era of global warming, she has not figured out how to synthesize enviro and economic concerns to create a viable and unavoidable front. Environmental issues have never been so low down on the set of priorities in a presidential race, but in reality, they have never been more important. The financial crisis in Europe is a crisis of rich wankers. The rich wankers are using the moment to take down fifty years of social democracy. Nobody has called them out on it. But there will be a muddle through,  one way or another. There’s not an environmental muddle through – things have to change. This is good news, actually – an enviro-economy within the social democratic framework is the natural, and better, alternative to the neo-liberal management of expectations as the middle class gives up its healthcare, education, and culture in return for superb entertainment-security surround media and longer work hours.  Why Eva Joli has not taken this and burned it into the hide of this phlegmatic campaign is a question I can’t answer, but there it is. This is, like it or not, a failure – it is a failure of style. And a politician without style is, more properly, an appointee - the person who advises the politician, not the figure on the hustings. If you are on the hustings, go for it.  

Friday, April 13, 2012

The new and no-future: a story of waste

In “Old Newspapers”, an essay written in 1920, Kurt Tucholsky went back and read some newspapers from 1910. The essay begins by taking the paper as a physical object – a text with a destination.

“The editor sent me a sausage  wrapped in an old newspaper that, like the sausage, came from the now bypassed era of peace.”  This makes Tucholsky think of – a topic to write about: newspapers.

The topic soon grows wings.
Old newspapers are funny. 1910, 1911 – God send us such cares, such Liliputan concerns. “The social democratic court report”. “The resignation of Crown Prince Hohenlohe from the Presidium of the Reichstag.” (The Reichstage had nothing to say, its Presidium had nothing to say, thus what did it have to say, when…?) “The Battle against Hermann Nissen.” Oh yes, it was a gay, a harmless, a good old small time.
Old papers are funny. But how is it that, when one reads them, one soon becomes sad?
Because one sees, how badly they have done their task. Because one sees, how little foresight they had, how they didn’t know the world, how they didn’t even fulfill the role of presenting good reports, informing the inhabitants of earth objectively and meticulously about one another. How they substituted, through lyricism and sentiment, what escaped them in precision and information.
Because so it was at that time that most newspapers worked against their own time, whose heartbeat they, perhaps, heard, but did not want to hear.
1910 – today, one wants to scream: For God’s sake! Four more years! Do something! It is flickering! Pour water on it! You happy souls, you still have time!   But then: “the struggle against Hermann Nissen.” And the picture even becomes grotesque, when one leafs through the newspapers from July, 1914. As for eight days previous not a single headline slinger recognized a single thing about the ‘great age” that was breaking over them, just as there was no advertising editor, , no picture editor, no chief of a bureau, no politician even who saw the collapse of a culture at all, that was standing close before them, and coming closer,always closer… On the second of August they were all very well informed and they were all wading into blood and phrases.”
            The defender of the newspaper might reply that Tucholsky was looking for prophecy, not news reporting. But I believe Tucholsky puts his finger, here, on a peculiarity of the “new” that constitutes the news: the new seems cut off from the future.
            Dominique Kalifa has shown how, during the Belle Epoque, Parisian newspapers reported more and more crimes. Crime went from being a matter of the police report that was relegated to the fourth page to a matter of interest that was popping up, even in the newspapers that were intended for a high bourgeois audience. Why do crimes and accidents so perfectly fall into the net of the news?
            It is because they are perfectly new. They only possess a past. As newspaper time was transformed by radio,tv and internet time, it is true that sometimes, the crime is captured as it occurs. In this sense, it has a certain future, tends towards a certain outcome. But it is not the indeterminate future of the shaking of a culture, of the collapse of norms, of the emergence or submergence of a class, of all the constituents of history. At most, accident and crime are destined for the trial – a retrospective future. When Tucholsky asks why the newspapers of 1910 give no indication of what is coming –and, on the contrary, disseminate a vulnerability and complacency that smooths the way for the invisible future-disaster – he is approaching the mystery of the new in the news, the limit that defines the news consciousness.
            The paradox of the news is this: because the accident and crime pose no epistemological threat to the news – since they are  the new in its purest form - -they tend to take over the news to the extent that they become the great determinants of what the newspapers don’t report on. Alchemically, accident becomes essence in the newspaper. The future that the newspapers can’t image is imagined in the news. 

            In revenge, or perhaps as an unconscious correlate of a text that has no future, the critic of the news, and its consumers, take the news, ultimately, as waste – a waste of time, a waste of paper. Time, after all, that is cut off from the future is waste time. Tucholsky begins with an old sausage and an old newspaper, and he ends his essay with – producing more copy: “And now I’m finished with the sausage, and naturally I ball up the old newspapers and put them under the left leg of my typewriter table, which is unbalanced, and finally their existence serves,  once and for all, a rational purpose.”

Thursday, April 12, 2012

studium -study

“… the new visual era, opened by the photograph, is still seen through the enchanted screen of the ‘graphosphere’. The exposition, however positivist, guards the aura that fiction and classical culture gives unmistakeably to the object to which they apply themselves. The cultural doubleness is not only characteristic of the 19th century; it extends its influence well beyond and continues to haunt, like a fantome, the most recent discourse, in saturating La Chambre clair with latin and greek terms (the punctum, the studium, the spectrum, the noeme, etc.) Roland Barthes himself has recourse to this screen, as if the abandonment of the concept ‘of writing’, up to then central in his work, to the benefit of the imprint and the Referent, can only be done in maintaining,in extremis,a lexicon issue from the classical and rhetorical culture with which photography, and more generally, visual industries, strongly break.” [Philippe Ortel, 1999]

The ruptures are always followed, it seems, with fantoms, and the more modern the new break is, the more it changes everything, the more ghosts there seem to be who don’t get it, who haven’t received the word that they should think themselves into extinction.

I would put Ortel’s critique of Barthes’ terminology in Camera Lucida on the opposite pole from my own ‘enchantment’  with these terms, which seem, contra Ortel, to express well the state of the rupture – for far from being in the visual era, we are in, unmistakeably in, sunk up to our necks in, the era of the mashup, the era of the caption, the era of blogging, commenting, uploading, vids and texting.

A week ago I wrote an earlier post about my dissatisfaction with the phrase, “reading a picture”, “reading an image”, “reading a film”, etc. Like the rather dirty dog I am, I don’t want to remove that bone from my mouth quite yet. I want to drool on it some more, make it slick.

In Camera Lucida, Barthes proposes a dynamic of the photograph – or of the experience of the photograph – that employs two terms, studium and punctum, which are not exactly opposites and aren’t exactly in tandem. Barthes disgards, here, the operator’s point of view – he is writing as the spectator. “What I feel for these photos [which he has been commenting on] arises from a mid-range [moyen]  effect, almost a training. I don’t see, in French, the word that expresses simply this sort of human interest. But in Latin, I believe, this word exists; it is studium”, Barthes writes, “which does not mean, at least right off, ‘the study’, but the application to a thing, the taste for someone, a sort of general investment, eager, certain, but without any particular acuity.”

That word, study, does exist in just this sense in English – but not in any English. In American English, and especially American English in the South. One of Flannery O’Connor’s greatest and most mysterious stories, The Life You Save May Be Your Own, is keyed to the verb “study”. In it, a retarded young woman is married to a traveling man named (unbelievably, and all too believably) Shiflet. The young woman is the “baby girl” of an old woman who happens to own an out of order car, which is what Mr. Shiflet really wants. The first time we see Shiflet, he is spotted by the old woman, who lives in a desolate spot, coming down her  road with a box, which he sets down just outside her fence. His face is described in that devastatingly cartoonish way that O’Connor uses to conjure the countryfried tribes of the South, ending with this sentence: “He seemed to be a young man but he had a look of composed dissatisfaction as if he understood life thoroughly.” This young man comes up on the porch and introduces himself to the old woman and the daughter, who introduces herself in turn ("I'm pleased to meet you," the old woman said. "Name Lucynell Crater and daughter Lucynell Crater. What you doing around here, Mr. Shiftlet?"), and then the young man tells her a thing that introduces the verb study into the story for the first time:

"Lady," he said, and turned and gave her his full attention, "lemme tell you something. There's one of these doctors in Atlanta that's taken a knife and cut the human heart—the human heart," he repeated, leaning forward, "out of a man's chest and held it in his hand," and he held his hand out, palm up, as if it were slightly weighted with the human heart, "and studied it like it was a day-old chicken, and lady," he said, allowing a long significant pause in which his head slid forward and his clay-colored eyes brightened, "he don't know no more about it than you or me."

This version of study, which is connected to “the study of”, or what Barthes calls “l’etude”, falls short of the power and glory of God and the devil. But Mr.Shiflet, who ranges between the latter two, is a man who also studies – in this second sense:

“He reached into his pocket and brought out a sack of tobacco and a package of cigarette papers and rolled himself a cigarette, expertly with one hand, and attached it in a hanging position to his upper lip. Then he took a box of wooden matches from his pocket and struck one on his shoe. He held the burning match as if he were studying the mystery of flame while it traveled dangerously toward his skin. The daughter began to make loud noises and to point to his hand and shake her finger at him, but when the flame was just before touching him, he leaned down with his hand cupped over it as if he were going to set fire to his nose and lit the cigarette.”

“Studying’, here, possesses that blunt approach to the object, that near acuity, that is the twin of  studium as Barthes uses it. Barthes, reaching into the inexhaustible magician’s hat  of rhetoric – the tricks of which served him right well, better than Ortel gives them credit for – has found a word that does more than describe a cognitive attitude towards the photograph: it also describes a cognitive attitude towards the newspaper, and towards much of the internet as well. 

We don’t exactly read a photograph, and we don’t exactly look at one. We don’t have, for photographs, some limited range of symbols and components – something equivalent to letters or signs or ideograms – that we have for a text, and that we even have, for most of Western history, for painting – or for tattoos. And we don’t exactly look either – or at least, what we look at (even if we looked, as operators, to take the photograph) is what has been looked at. Our look is always a second look. Studium, or study, covers this ground well, since it doesn’t exclude reading or looking, but points to an attitude, to a sort of preliminary intentness, that fills our head when in relation with the photo or texts like a newspaper, which is designed to be like a book or encyclopedia but, also, unlike – from the headlines to the placement of the photos to the continuation of columns in the paper.

When we study the paper, we don’t study it with the sense that we will keep it. Like Shiftlet’s match, the newspaper is ultimately, classically, in the days of paper, for tossing away. The physical fate of the newspaper always hung over it, and was often brought up in popular culture – such as in films about journalists, who were almost always rather seedy and amoral men. Sometimes,however, things were cut out of the paper to be saved – or a paper itself was saved for  some reason. When man landed on the moon, my parents saved the Atlanta Journal that headlined the event. Years later, when my Mom died, I was going through her things and found a yellowed copy of that paper. It seemed extremely sad, and to my too literary mind, too much like a detail out of some story Joyce might have written – a Dubliners detail, an unbearable punctum – to use Barthes term. Indeed, the punctum leads Barthes to the death of his own mother, which is the subtending story in Camera Lucida – the story of finding photographs of his mother in her house, after she died.

The association between the newspaper and the photograph upon which I am insisting, here, is helpful  in understanding the newspaper effect, in modernity. The great critics of the newspaper – Kraus, Tucholsky, Bloy, Orwell – all understood its “black magic”, to use Kraus’ term, as an enfeeblement of language that served to replace reading by what I am calling, following Barthes, study. Karl Kraus, who wrote that the real freedom of the press is freedom from the press – our natural and best freedom – gave this criticism a monstrous obsessiveness over forty years by ‘cutting’ out quotations from Viennese papers and applying to them the acid of his Sprach-kritik with such effect that that they always yielded, in the end, the same result: an untenable bêtise, an underlying stupidity that was like some chemical ingredient which surreptitiously cretinized the consumer. The consumers in this case were Austrians who happily engaged, in those forty years, in one frenzy of mass murder – World War I – and were preparing themselves for another one – World War II – when Kraus died, in 1937.

Kraus’ underlying premise, his critical vocabulary, his rage against the cruelty and unintelligence of the dominance of study over reading or looking, was, in its broad outlines, predicted by Baudelaire’s reaction to photography in the Salon of 1859 – which I’ll end with. Baudelaire, in spite of being on good terms with one of the greatest of photographers, Nadar, diagnoses the rage for daguerreotypes as the introduction of industry into art – and, in consequence, the end of art. He grasped the fact that the industrial experience was becoming the norm, not the exception. Nature, as he saw it, was being replaced by precision. Of course, the natural philosophers, since Boyle, had dismissed nature as a hopelessly misbegotten patch of a concept that had no causal power in science – and once it lost that causal power, it could only decay into myth. But Baudelaire understood that poetry lived in that uneasy marginal space. The photograph, symptomatically, satisfied both the mythical (the likeness to “nature”) and the scientific/industrial (“precision”) in a way that no art could compete with. It was Mickey Mouse from here on out, so to speak.

These are, of course, reactionary positions – that is, they are positions with nowhere to go – instead of revolutionary ones. But they contain, in all their disgust and self-undermining industry – their appalled and compulsive study of study – moments that any revolutionary – any upsetter of our present order – must understand. I’m tempted to end here, to splurge, with a long quote from the  end of The Life You Save May Be Your Own, however hokey the convergence of my theme and example may be. Shiflet, as those who know this story, does finally get the old woman’s car running – his whole intent, apparently – after ‘studying’ the engine, and he negotiates with the old woman over his marriage to her retarded girl until he gets to take off in the car for a honeymoon, and some dollars to spend.

“Occasionally he stopped his thoughts long enough to look at Lucynell in the seat beside him. She had eaten the lunch as soon as they were out of the yard and now she was pulling the cherries off the hat one by one and throwing them out the window. He became depressed in spite of the car. He had driven about a hundred miles when he decided that she must be hungry again and at the next small town they came to, he stopped in front of an aluminum-painted eating place called The Hot Spot and took her in and ordered her a plate of ham and grits. The ride had made her sleepy and as soon as she got up on the stool, she rested her head on the counter and shut her eyes. There was no one in The Hot Spot but Mr. Shiftlet and the boy behind the counter, a pale youth with a greasy rag hung over his shoulder. Before he could dish up the food, she was snoring gently.

"Give it to her when she wakes up," Mr. Shiftlet said. "I'll pay for it now."
The boy bent over her and stared at the long pink-gold hair and the half-shut sleeping eyes. Then he looked up and stared at Mr. Shiftlet. "She looks like an angel of Gawd," he murmured.
"Hitch-hiker," Mr. Shiftlet explained. "I can't wait. I got to make Tuscaloosa."
The boy bent over again and very carefully touched his finger to a strand of the golden hair and Mr. Shiftlet left.”

Wednesday, April 11, 2012


One of my crankeries is my notion that the U.S. made a very wrong turn back all the way in 1911. Glenn Beck is notorious for being a maniac about the same period, but where he is a maniac about the communization of the U.S. that was birthed by the progressive movement, my position is just the opposite: the progressive movement, lacking a strong socialist movement, created half measures that have been decaying ever since. One of them, a crucial one which is now costing every 99 percenter thousands of dollars per year, was the defeat of a law that would have required interstate companies to register with the Commerce Department.

The bureaucratic quibble of a committed statist? No, this is the reasoned response of another underground and underwater man to a system set up to be gamed by the powerful. And gamed it has been.

In Treasure Islands, Nick Shaxson's book about tax havens, there is an interesting tale about how usury became one of the quotidian parts of American low life. It begins, of course, with that plutocratic mainstay, the Supreme Court – the pillar of the White Republic:

“In 1978 ... a new era began when the First National Bank of Omaha started enrolling Minnesota residents in its BankAmericard Plan. At the time, Nebraska let banks charge interest up to 18 percent a year, while Minnesota’s usury limits were 12 percent. Minnesota’s solicitor general wanted to stop the bank from charging higher interest rates. Could the Nebraska bank “export” the 18 percent rate to charge Minnesota residents?
The Supreme Court ruled that it could—and Wall Street noticed. If one state removed interest rate caps entirely, Wall Street could export this deregulation across the United States. Then in March 1980, South Dakota passed a statute eliminating its anti-usury interest rate caps entirely. The statute was, according to Nathan Hayward, a central player in this drama, “basically written by Citibank.” A new opportunity for U.S. banks had opened up: By incorporating in South Dakota, they could roll out credit card operations across the country and charge interest rates as high as they liked.”

The number of elements aligned by the financial services industry in the late seventies, all waiting to ripen under Reagan (and, let’s not kid ourselves, under Carter if he had been re-elected – the Democratic Party has only opposed plutocracy at sword point, and for small intervals of time), is amazing. This was a crucial moment in the real economic history of America. For if, as became the case, labor costs in the U.S. were stifled by stifling labor’s power to negotiate, then U.S. corporations faced a problem: how to keep the treadmill of consumption going? There were two obvious and interrelated answers: replace wage increases with easy credit (while allowing the financiers the ultimate power of yanking the rates higher whenever they wanted), and – using tax incentives – opening the sluices to the accumulated capital of the wage class (accumulated through such now quaint objects as pensions) through scams like the IRA account, etc. This was not only a matter of greed – greed playing a very small part, really, in class warfare. It was part of an ideology that was even believed by the plutocrats, who think that class warfare is something the Other engages in (in this, it takes on the asymmetric semanticity of such terms as terrorism – checkers on the board, invested with hero/villain values by the players). Utopia would arrive when the worker was on both sides of the capitalist equation – both a wage earner and an investor. Nirvana such as only Jesus and J. P. Morgan could have dreamt up at the Billy Graham cotillion! The small problem – so tiny we could just overlook it – is that, in truth, the amount of power welded by the wage earner as investor was microscopic, for which he or she traded in all the advantages of conglomerating with other wage earners to press for higher wages. Instead, for an iffy gain, subject to rents and recessions and the conglomerated power of money managers (as is shown by the profiles of the 401k set, employees have an almost pathetically virtuous idea about money, and will invest their pittances wholly in the stock of the company they work for, a gull’s strategy that ends up repeatedly in disaster), the wage earner submitted to a strange treadmill of credit based consumption, and the American household debt started its world historic ascent – a veritable firecracker, heading towards the boom moment when all the hedgefunders would oooo and ahhh and go to uncle sam to collect their 16 trillion in easy loans (but not at the BankAmericard rate – you can be sure of that!) to slog ever onward, heroes in the world of free enterprise. Free being the key word here.

The progressive moment has long past, and it looks like the train has left the station for the 99 percent in the U.S. – although who knows? One thing is for sure, though: through the Democratic bipartisanship that is so lauded in the editorials when it happens, the Supreme Court has been loaded with a vile band of Pluto proxies who would, no doubt, rule as unconstitutional any attempt, now, to do what the Roosevelt Republicans attempted to do in 1911. Or, in the tunes of the merry song: we are so fucked!

Tuesday, April 10, 2012

wallfare - the eternally forgotten

In a blog post today, Paul Krugman deplores the ‘empathy gap’ – that is, the inability of the people at the top to have any empathy with the welfare of those on the bottom. He quotes some typically inane comment of Paul Ryan’s about welfare reform.
He received the standard mix of admiring and disparaging comments. (As an aside: one of the best things that has happened in the media scene ever is the advent of the comments section, to which I have become addicted.  to those things.) One of the disparaging comments read like this:

“I'll start by, 'disclosing,' as we all have to do today, that I'm retired after close to fifty years of work.
I did what I had to do to insure myself,did not over-spend because I wanted a car, or house, or whatever came to my mind and so lasted until today where I'm comfortable.
I'm not sorry that I'm comfortable,I'm not sorry that I have a bit more than some around me and I'm certainly not sorry for those who,today seem to feel that the government owes them something.
What I am sorry for is the fact that so many American are convinced,that the government and those who have been successful should be taking care of them
We are quickly devolving into a country that in a decade will not be recognizable to any of those who are alive today.
In other words we are done and the America that everyone knew and respected is finished as a great country.
You know why?
Because we keep putting out our hands and say gimme,gimme,and it never ends.
Have a great life you youngsters and maybe you'll get wise before it's too late
God Bless American.”

Although they are very common, I am always a little astounded by self reporting that consists solely of preening. The problem with preening is, of course, that it sounds more like self-blindness than self-assessment. The words used here – “work”, “comfort”, “I did not overspend”, etc. show that this retired gentleman has certainly not reached sannyasin, the renunciation of the material chains that bind him. One feels, sadly, that he has wasted his entire life struggling under false values and a compensatory view of himself as better than others because he preserved a spark of the miser’s instinct in his soul. A rather sad flame to warm your hands over when you become age spotted and nose heavy, but there it is. 

However, this is not about the existential delusions expressed here, only about the political ones. For both Krugman, Ryan, and the “successful” gentlemen are pretending that the U.S. government’s welfare programs are designed for the poor.
This can’t really withstand the shock of the facts. The real welfare has long gone straight to the banks and the upper 1 and 10 percent. Ryan seems never to have heard TALF, TARP, CPFF and other programs doled out 16 trillion dollars in sub sub par loans - ranging from .01 to 1 percent -between 2008 and 2010. In a fair market, those loans would actually be priced at between 4 to, in many cases, 6 to 7 percent, which means Uncle Sam gave the wealthiest (who own the hedge funds and receive the vast majority of capital gains and dividends) about 600 - 800 billion dollars - not bad, eh? Besides, of course, overlooking the massive and systematic fraud perpetrated by the entire financial system when it came to assigning title, fining and foreclosures. The gentleman who'd been 'working' for 50 years and had retired and deplored the attitude of gimme of the feckless young is just the kind of mid level exec who explains why the Government can get away with its conspiracy to defraud the citizenry for the plutocrats – for he probably depends on his mutual fund and other financial vehicles that Uncle Sam just propped up to continue living in his house and driving his car.
Get rid of welfare for the richest, abolish tax haven schenanigans, replace the IRA and 401k systems with Government Bond investment accounts for education, health and retirement accounts (taking trillions away from the Wall Street rentseekers), and we would have a fairer country without being burdened by the welfare class - that is, the welfare class of the upper 1 percent.

To my heartfelt and much repeated cry against the street, let's add this note:
I am reading Nicholas Shaxson’s Treasure Islands, Uncovering the Damage of Offshore Banking and Tax Havens, and noticed a reference to a very esoteric part of the Carter Administration: the Gordon Report. This was the report of an investigation by the IRS into offshore tax havens launched by the Carter administration and put in the garbage by the Reagan administration. Shaxson didn’t say much about it, so I thought I’d look it up on the Net, where all darkside materials eventually congregate. I found a copy of it with a preface by someone from the Inspired Life Center, whatever that is. The personfrom the Inspired Life Center wrote that she (or he) had received a copy of thereport from an insider at the IRS years ago, and had lately tried to find it ina library, or a federal site, to no avail. Hence, our Inspired Life frienddecided to upload her copy.

It is an interesting document of the end of the liberal era – which, as we know, ended in malaise and consumerism. I was struck by a sentence in the first part of the report:

“In 1978, 43 percent of the gross income paid to all residents of the United States was paid to claimed residents of tax havens. Forty-six percent of the gross income paid to residents of all treaty countries was paid to claimed residents of tax haven treaty countries. Nearly 80 percent of all United States gross income paid to residents of tax havens and reported to the IRS was paid to corporations. All of this indicates significant third-country use of tax haven treaties.”

Fucking A! as our daytraders like to say. Shaxon points out that, just as the U.S. was pretending to get concerned with the 20,000 hqs in the Caymen island, U.S. law was quietly being changed to bring in “foreign investors” by easing transparency and tax regulations on accounts set up in the U.S. Now, surprisingly, it turns out that foreigners can front for … Americans! So …

“In June 1981, less than six months after Reagan’s inauguration, the United States approved a new offshore possibility, the international banking facility. The United States was another step closer to becoming the tax haven imagined in the memo to Michael Hudson.
IBFs, as they are known, are kind of offshore Euromarkets-lite: They let U.S. bankers do at home what they could previously do only in places like London, Zurich, or Nassau: lend to foreigners, free from reserve requirements and from city and state taxes. The bankers would sit in the same Manhattan offices as before and simply open up a new set of books and operate as if they were a branch in Nassau. Once the IBFs were in place, the banks could dispense with the subterfuge entirely and book them openly in New York. The United States had moved closer to the British offshore model.
Bankers in New York signed on to the new possibility with gusto, followed by those in Florida, California, Illinois, and Texas. In three years almost five hundred offshore IBFs had popped up inside the United States, draining money out of other offshore markets in the Caribbean and elsewhere.18 It was a new get-out-of-regulation-free card for Wall Street and another hole in the American fortress. Not only that, but as author Tom Naylor puts it, “The US hoped to use the IBFs as a bludgeon to force other countries to relax restrictions on the entry of US banks into their domestic financial markets.”
This was the Reagan era, matched, during the Clinton era, by a Rubin-esque scheme called the Qualified Intermediary Program that was a true plutocratic joke, in which the government ‘offshored’ its responsibility to make sure that U.S. citizens (heavens) weren’t using the tax haven facilities provided under U.S. law to foreigners – which was done because if the U.S. government did it, they’d be obliged, under international laws, to give the names of those foreigners to their countries.
But there are richer veins of offshoring in the U.S. The state system is a beautiful example of crooked. In Wyoming and Nevada, you can set up a limited liability company under a fake name and, according to state law, even the Federal government can’t investigate you. “Nevada does not share tax or incorporation information with the federal government and does not require a corporation to report where it does business. The IRS has no way of knowing whether a Nevada corporation has filed a federal tax return.” Cute, eh? U.S. politicians, in campaign mode, occasionally whale on the Caribbean islands for their burgeoning fake hq industry. Obama, for instance, mocked “Ugland House, in the Cayman Islands …  for housing over twelve thousand corporations.” But Shaxon notes that good old corporate friendly Delaware beats the Cayman islands: “an office at 1209 North Orange Street, Wilmington, houses 217,000 companies.”
I should note here that Theodore Roosevelt (that is, the wing he controlled in the House while Taft was prez) tried and failed to make sure that all interstate corporations were federally registered with the Commerce Department. Since that sensible suggestion, actually passed by progressive Republicans in the House in 1911 but defeated in the Senate. One of those little moments upon which we could easily build a view of the collaboration between crime and corporations in America.


Elia meets Karl Marx at the South Sea House

    When Charles Lamb, a scholarship boy at Christ’s Hospital, was fifteen, one of his patrons, Thomas Coventry, had a discussion with a...