The Reindustrialization Bank of America

Unfortunately, the reporting about Obama’s ‘stimulus” in the Press has concentrated overwhelmingly on the price tag. This is the kind of thing that is catnip to the economists, who love a number and a model the way a kitten loves a ball of yarn. It is also a way of shirking the occasion. No number will bind up the economy. No number will produce out of its pocket the road back from the abyss for the U.S, still the most powerful nation in the world. The abyss is not just getting fewer video games for the kids at Christmas. It involves a worldwide environmental crisis, as well as a nationally limited one – the drought in the West – that is getting bigger every year. It involves a worldwide cultural crisis, as thirty years of dumbing have put us all on the day shift of endless pantysniffing idiocy, strangling the capacity to daydream and replacing it with various forms of porno. It involves the decline and fall of the war system – Hitler’s triumph, the system has been used for sixty years in the developed countries (as well as the U.S.S.R) as the economic stimulus of first resort, the prosperity of which served to buffer the population that gained from it from feeling the traditional reach of the wars that were directed against less fortunate populations.

The list of projects included in this article by James Galbraith, who has been reliably clearsighted about the problem of predator capitalism, is a great place to start putting faces on the -000000000000 numbers. Here’s a selection:

The industrial crisis requires immediate action if the auto companies are to survive. For such cases in the future (and there probably will be some) the relevant precedent is the Reconstruction Finance Corporation, headed during the New Deal by an intrepid businessman, Jesse Jones, who saved many important companies with a combination of loans and workout plans. A new RFC would enable the federal government to assist industries– perhaps not as large, not as essential, or as threatening as the collapse of the automobile industry would be — but on a somewhat systematic basis for the duration of the crisis.
As for helping the workers who are most severely affected by the industrial aspects of this crisis, Teresa Ghilarducci, professor of economics the New School, has proposed a simple and effective step that would further the cause of universal health care: reduce the age of Medicare eligibility to the age of 55. That would take much of the cash burden of healthcare costs off of enterprises, where they don’t belong anyway. And it would provide the opportunity for many workers who would like to retire but won’t do so because they can’t afford to lose their health insurance.
The housing crisis requires mortgage abatement, a resetting of the toxic adjustable rate mortgages already being initiated through Fannie Mae and Freddie Mac, and also a concerted effort out in the neighborhoods to restructure mortgages and to keep people in their homes. Here the historical model is the Home Owners Loan Corporation, which did this in the 1930’s — an enterprise that took about 20,000 people to manage 1 million mortgages. Essentially the same effect could be achieved today by buying back the mortgages through Fannie and Freddie and then turning them over to a restructuring facility – the present version is known as the H4H, or Hope for Homeowners program.
The point is that while you cannot effectively stabilize the price of housing, you can try to save the existing housing stock, stop the spread of blight, the abandonment of homes, and the homelessness that results from an unchecked wave of foreclosures. We will then have preserved those neighborhoods and those communities for a better day.

The great mistake of the boys of October was not just in approving a program that could easily be seen to be the biggest bank robbery in history, perpetrated by the CEOs of the financial system, but in not seeing the opportunity before them - given the numbers the government was willing to put up, we could easily have created a national bank, capitalized to the tune of some 700 billion dollars, that would invest in re-industrializing the U.S. True, the political fighting would be intense, as this kind of thing entails some shocking encroachments on U. of Chi school verities, and would rightly be seen by the upper 10 percentile as an erosion of their share of the national wealth. But the falling of the industrial base has since made it even more obvious that Citi was a bad investment for America. Galbraith is right to hark back to the Reconstruction Finance Corporation of the 30s, and if such an entity had been in place in December, we could have begun to coordinate a really comprehensive response to the twin problems of a worsening dependency on oil and an American auto industry in freefall. A number of intermediate steps might have to be taken to solve these problems that would involve creating public entities ex nihilo, and then spinning them off to private investors. For instance, it just might be the case that U.S. autos could double their mileage if, as in Europe, cheap diesel fuel were available. In Europe, such fuel has long been subject to a refining process such that it is a lower emission fuel than U.S. gasoline. There is no comparable refinery capacity in the U.S., so the U.S. government should simply build one. Such would by no means be the final step towards creating a much more sensible green vehicle –hydrogen offers one path, electric rechargeable batteries another. Now is the time to pour money into R and D on all innovative engine types, so that we have the prospect of replacing the entire fleet of cars in the U.S. with green ones that can hook up to be recharged anywhere in the U.S.

At the moment, the idea of the state interfering this massively in the economy still lacks popular support. However, it doesn’t lack economic rationality. The private sector has long misallocated capital to projects with short term horizons to please equity investors. This has been a big factor in the de-manufacturing of America – which is a story not only of manufacturing jobs lost, but of big manufacturing opportunities squandered. Investors are as aware as anyone that those companies that are innovative – that show the greatest productivity growth – aren’t as profitable as those companies that are quarter to quarter beauty pageant winners. There are exceptions, like the computer industry, but one notices the shortfall in say broadband too – as opposed to, say, the abundance of I-phones. One requires heavy capital investments that will result in a slow but steadily increasing yield, the other doesn’t.

the birth of alienation from the severed head of Olympe de Gouges

The split up came violently. Three delegates, Georg Forster, Adam Lux, and Andreas Patocki, a Mainz businessman, left Mainz just before the reactionary forces took the city. Therese was already gone – she’d joined her lover with her children. Caroline Michaelis wasn’t so lucky – she and her daughter left, but were unable to get out of the area, and were forced back into the city. In the background was not only the terror in Paris, but the white terror in Frankfurt. Forster and his fellow delegates made it to Paris and settled in a hotel run by a “patriotic Dutchman” in the Rue de Moulins, close to Tuileries and the Palais Royale. “The poissarde, the women from the fish market, cried out to them according to their custom a welcome to the city, and thereby earned a tip.” (Uhlig 325) It was here that Forster met many of the other transplants in Paris, including Mary Wollstonecraft.

I like to speculate that Forster saw Olympe de Gouge’s affiches denouncing Robespierre, which were put up at the end of July, 1793. Certainly the fate of the second Mainz delegate, Adam Lux, is attached to hers – his trial followed directly upon hers in the Journees des Assemblées Nationales. He had written a defense of Charlotte Corday, whose magnificent beheading had fused together the revolutionary passions in his soul – Lux then proceeding to his own version of suicide by cop, which was to exalt Corday in a pamphlet and denounce the Convention.

These were Forster’s surroundings for his last writings – among which LI must signal Relation of the art of the State to the happiness of humankind – Beziehung der Staatskunst auf der Glück der Menschheit. Of course, by this time, the Glück der Menschheit was a cliché; yet LI is going to make the argument that this is an unjustly neglected pamphlet. In it, we see a self-conscious critique of happiness find expression from a revolutionary point of view. LI is wary of chasing after “origins” and firsts, but certainly this essay deserves a special place in our history of the rise of the happiness culture. That its genesis should be among the moderates, the Girondistes, recalls us to the re-orientation which underlies this history – one which recasts the location of the radicals, the opposition, and the establishment, draws a different line of tension, reads, we’d dare say, under the ossified categories by which we usually do our history and distribute the actors and the ideas.

I’ll translate excerpts from it in an upcoming post.

Zona report

It's all right
To be mean

The Zona report today was strong enough to flummox even the priests. On Economix, the NYT blog, economists have been invited to do their usual ritual dances – they step on the skulls of the evil greedy and lazy laborer, they pray for efficiency, they come up with irresistible reasons to give one of the class of the 10,000 richest households another million or billion. During the Zona, however, the dances begin to seem frantic. The old prayers, the old demons and heroes, seem to get out of focus. Obviously, the normal order and the full stop of all human history was 2006, a year in which everything came together – corporate profits popping, median household incomes stagnating, the great warriors freer than ever before from the bonds of the Demon Regulation and the Demon Taxman. Now, however, with every month another half a million people sliding down the chute of darkness and into the netherworld of unemployment (surely, of course, by their own choosing – in general, the proles are inexplicably lazy, and the only way to get them to work is either to beat them or to lower their wages), some of the priests are starting to Doubt. Uwe Reinholdt’s heartfelt post begins with a survey of the faith:

“If, like every university, the American Economic Association had a coat of arms, its obligatory Latin banner might read: “Est, ergo optimum est, dummodo ne gubernatio civitatis implicatur.” (”It exists, therefore it must be optimal, provided that government has not been involved.”)

With only minor injustice, one may take this as the overarching mantra to which the core of the economics profession marches. Government is accorded a beneficial role in this vision only to provide purely public goods, such as national defense; to remove private-market imperfections, such as monopoly power on either side of the market; or to deal with so-called spill-over effects from private decisions, which economists call “externalities.” These exceptions aside, unquestioned belief in the sagacity, efficiency and beneficence of private markets reigns supreme.”

Reinholdt searches about for an answer to the problem that this credo seems to have failed. He doesn’t search about with the tools of his trade, and ask whether the intimacy between economic departments and the financial services sector, into which most economics students are tidily bundled, might have had something to do with it. Instead, he turns to behavioral psychology, and in particular, groupthink. LI doesn’t wholly disagree. Self-interest is never a bedrock explanation, since the self and the interest are constructions made out of glue, routine, dreams, sweats, traffic, boredom, and exorcisms – thus the tightness of the array of economic departments and the financial services sector is needs a stronger poem to explain it. But here is Reinholdt’s theory:

“If groupthink is the cause, it most likely is anchored in what my former Yale economics professor Richard Nelson (now at Columbia University) has called a ”vested interest in an analytic structure,” the prism through which economists behold the world.

This analytic structure, formally called “neoclassical economics,” depends crucially on certain unquestioned axioms and basic assumptions about the behavior of markets and the human decisions that drive them. After years of arduous study to master the paradigm, these axioms and assumptions simply become part of a professional credo. Indeed, a good part of the scholarly work of modern economists reminds one of the medieval scholastics who followed St. Anselm’s dictum “credo ut intellegam“: “I believe, in order that I may understand.”

An inference drawn from the profession’s credo is that private markets invariably are self-correcting and are driven by rational human beings whose careful decisions serve to allocate scarce resources efficiently — that is, these decisions maximize a nebulous thing economists call “social welfare.”

“Social welfare” on this view is thought to increase when those who gain from a change in the economy — e.g., a corporate restructuring or deregulation of the financial sector or increased foreign trade — gain more from the change than those who lose from it, even if the gainers had already been wealthy before the change and the losers poor. Thus, few economists were troubled by the explosion of executive compensation on Wall Street or elsewhere in corporate America. It was just the efficient market at work, rewarding these executives for the “value” they were creating.”

What does LI see here? Is it a perception, however distant, of the mangle of inequality? Oh that mangle, how it throbs in the background of the Zona! It is, of course, too sacred and awful to approach directly – after all, it might be that the mangle is producing us as we write! It could be the dreamer that dreams our dream!

“As far as diagnoses of economic trends and predictions about the future are concerned, the profession’s preferred analytic structure and the groupthink it begets might work superbly well on planet Vulcan, whence hails the utterly logical Mr. Spock of Star Trek fame.”

This, of course, show that even in the dark night of the soul, the priests still believe. They believe they have the keys to heaven and hell. What they call rational is rational, what they call irrational is irrational, let heaven and earth fade away. On the planet Vulcan, in a pleasingly closed system, their poems work! LI, however, must dissent. They were sold bogus keys by hucksters, what they call rational and irrational aren’t descriptions of the mind’s superb adapting to circumstances, but instead, looked at closely, are actually mummies, tightly wrapped and deoxidized, discovered under the Chicago pyramids in 1898, and no system depending on the AEA’s pube Manichianism will last for any length of time on any planet you care to name.

As for my prediction - oh reader, no bone will be unplucked by the Zona! Including yours and mine.

Queen of the fern

What becomes a legend best? This was the hook of an old furrier advertising campaign, famous for showing Liliane Hellman in a mink stole. But the hook deserves a better fate than to go to advertising heaven in a chorus of skinned weasels. For what becomes a legend best is a bad end, which is what happened to Olympe de Gouges, that fabulous existence, the bastard daughter of a seller of used clothes and – so she claimed – one of the great 18th century literary talents, although she named no names. Others claimed Louis XV. In fact, Gouges’ downfall was due to her strenuous and heroic advocacy for Louis Capet, who she was by no means willing to see led to the guillotine. Was this an act of sisterly sympathy? No, it was the common sense of genius. As the anarchist Malatesta said, a century later, far better kill a chicken than a king, for at least you can eat a chicken. Which is pretty much the definitive argument against all capital punishment, if you ask me.

How is a woman of such doubtful origins not to get lost in the bog? It is another case of the encounter of the third life and the adventurer’s character. She started out marrying a rich merchant when she was merely 15 – an unusually young age in a country where the average age of marriage for someone of Gouges’ class was twenty five. She was more than fortunate, though, in her marital choice – not only did they have a child right away, but the rich merchant conveniently died, like an inconvenient secondary in one of Angela Carter’s fairy tales. One of her biographers – Lairtuilliers – claims that she was particularly adept at the game of decamptivos – like Lotte’s game in Sorrows of Young Werther, a surprisingly crude and childish affair. It consisted of someone, elected to be King of the Fern, saying decamptivos – which would make all guests, who were grouped into couples, scatter out of sight. They had to stay out of sight for fifteen minutes. If they were late coming back, the king would fine them. Of course, one assumes the fifteen minutes were spent in kissing and groping, but just putting off and putting off clothes would take enough time to make more extensive sex unlikely.

Lairtuillier includes an almost unbelievable claim – except that everything about Olympe is quasi-unbelievable:

“But she had not yet arrive at that stormy phase in her life, and it was necessary that before that time, another demon took hold of her: that of letters. I can affirm, writes M. Dulaure in the Sketches, that madame de Gouges, author of novels and plays, did not know how to read or write, and dictated her productions to her secretaries. “They never taught me anything,” she says somewhere; raised in the countryside, where French was badly spoken, I didn’t know the principles; I didn’t know anything, and I made a trophy of my ignorance; I dictated with my soul, never with my mind. The natural seal of genius is on all of my productions.” The public didn’t completely agree with the last part of this opinion. But we are going to see that this woman, whose vocation was so strongly marked by revolutionary crises, of whose nature it was to be all action and speech, and who seemed to be made for nothing other than mounting to the political assault, knew also, to use the expression of Sand, how to throw her soul outside herself and lend it to the heroes of the drama.” [54-55]
The idea that she couldn’t read or write is common to her story, as told by the nineteenth century historians. Michelet says the same thing, and all attribute this fact to… her own testimony. In the preface to her place, The corrected philosopher, she writes:

“I don’t have the advantage of being educated; and as I have already said, I know nothing. I will thus not take the title of author, although I have already been announced to the public by two plays which they have very well received. Thus, not being able to imitate my colleagues by either my talents or my pride, I listened to the voice of modesty which completely agrees with me.”
…
O O, but what becomes a legend most is that the legends never agree. More recent reseach has turned up quite a different story about Olympe de Gouges. A good place to start is the excerpts, taken from a biography of Guillotine, written by Henri Pigaillem, which he presents on his blog. She was the daughter of a butcher and a washerwoman, but her grandfather was wealthy enough, and the family, the Gouzes, were close to a local noble family in Montauban – Pigaillem claims that she received some training by the nuns, and it does seem unlikely that the family would have left their daughter illiterate. She married to her father’s partner at 15 and didn’t like the blessed state of matrimony, so, as in a Tom Waits ballad, she encountered a man who had to do with the riverboats and took off with him to Paris. Jacques Biétrix de Rozières. Being quite beautiful, she made use of her beauty to become a kept woman, and king of the fern be damned if she stayed the extra fifteen minutes in the shadows beyond the other players. Born Marie Gouze, she renamed herself something more pompous and personal. At thirty she decided to become a writer – and the story that she was illiterate is likely an exaggeration, for by this point she’d spent fifteen years in good, educated company. Megan Conway’s essay on Olympe de Gouges tries to sort through what is legendary and what is not about a woman who wrote forty plays, numerous fictions, and of course many pamphlets. Gouges might have received some help – she was a close friend, if not lover, of Louis-Sebastian Mercier, for instance – but she also liked to put herself on display as a Rousseau-ist type, sowing doubts about her education. Conway concludes that it is unlikely that she couldn’t read, and likely that she was at least literate, although she surely also dictated to secretaries. Conway writes that her disconcerting vanity, the way all general topics are interrupted by her particular peeves, makes it hard to read her since she was “so undeniably obnoxious.”

Olympe de Gouges, at this distance, has been wrapped in the perfumed saliva of the human rights type, who celebrate her as a feminist and ignore, as best they can, her outsider status and her fidelity to a creed laid down, she thought, by Rousseau – which might be paraphrased, via Kerouac, as first moral judgment, best moral judgment. It is extremely hard to say if she really dictated her works – surely, in 1793, it was a little difficult to find secretaries for the job – but “dictation” of a sort was certainly at the center of her pamphleting, her posters, her letters to the assembly, her violent taunting of Robespierre. What came out of her mouth was like a revelation, and she would be its prophet and martyr. She would be the Queen of the Fern in the streets of Paris in 1793. And she would die gloriously, her blood rising up to pull down and utterly destroy her murderers.
Another outsider saint.

demography and poetry

On July 4, 1793, a group of children coming from the faubourg Saint-Antoine shelter for foundlings paraded before the national convention in order to thank the deputies for the recent law that promised the principle of rights of succession to natural children. “You have shown yourself fathers in rendering to them the rights that they lost in being born in a manner one has always regarded as illegitimate,” declared the teacher of the children. “You did more: you have returned them to the social body… You have established the base of government upon equality.” In a few words, in its fashion, the Convention gave body to its promise. The astonishing and controversial law of 12 brumaire Year II (2 November 1793) accorded to illegitimate children, when they were recognized by their parents, rights of succession equal to those of legitimate children. The same law implicitly suppressed the customary right which permitted single mothers or their progeniture to petition for action in recognition of paternity in order to obtain a food pension.” - Susan Desan, What is a father? Illegitimacy and paternity of the Civil Code of Year II, Annales, 57:4 935.

So far, LI’s discussion of the issue of free love seems to follow the plot lines of various nests of gentle folks. In particular, the romantic movement in Germany as well as in England seems, when one examines it, an astonishingly close knit affair, with almost all participants being at one to two degrees separation from each other. It is this closeness which makes the history of German literature during its classical period seem so very much like a People magazine article about marriages and divorces among today’s young stars. It is a “small world” network. And yet, of course, it is operating in a much larger world – that Georg Forster ends up dying in Revolutionary Paris, writing his fascinating defenses of the French Revolution as a sort of embodiment, on the social plane, of physical laws (nobody at the time was more fascinated by the transfer of the term revolution from physics to society), connects, by one degree of separation, a generation of South Sea exploration, Tahiti, Captain Cook, and the extreme limit of the older form of imperialism to the new order with startling abruptness – it is by their degrees of separation that the poetry of social history is made by its unconscious agents.

In order to breath, however, LI has to periodically refocus. We’ve chosen free love as an ideology in the making, and love and suicide as two expressions of it, in order to bring us close to the conflicts that went into the birth and development of the culture of happiness. Of course, the participants did not think of themselves as particularly contesting happiness. Only in retrospect does one see how they diverged – as though separated by magic, magnetic fingers – from the bourgeois main. But that main itself was certainly involved in the wreck of the ancien regime – or one might say that it came through the fire as a new creature entirely. No salamander – but something more like a phoenix.

Desan rightly points out the conjunction of a seemingly progressive reform coupled with the collateral casualty suffered by a traditional usage – a “superstition”, if you will. Desan found that the implementation of the law, in fact, was rare – she used the Calvados department as her data base – and its terms confusing. LI suspects that the law is not only to be associated with the Terror, but to the strange rise, towards the end of the 18th century, in illegitimate births, coupled with the ‘dechristianization” of death that Paul Veyne has pointed out – orienting points that hint at a largescale collapse of beliefs across Europe.

Things fall apart.

- Edvard Munch, Death of Marat



According to no less an authority than Josiah Royce, to understand the philosophy of Schelling, one must understand Caroline Michaelis, his wife. In 1792, when she joined Therese Huber’s household, she was still Caroline Boehmer, recently widowed. Already August Wilhelm Schlegel was obsessed with her – and already she felt herself puzzingly superior to him, an intuition she was never to overcome. Later, after the occupation by the French and the counter-occupation by the forces of reaction, later, after Therese had fled to Strassbourg (which is when, apparently, she wrote Georg that she was leaving him for Hubner), after Georg left for Paris and received the condemnation of almost the entire German intelligentsia (poor mistaken Forster, Wilhelm Humboldt signed), and that after Therese might have written Caroline a letter giving her a green light for Caroline’s own affair with Georg, after the pregnancy with the unknown father, probably a French office, after being released from Mainz and exiled from her native town of Gottingen as a danger to morals and public order, she would be ‘rescued’ by Schlegel and cozened, cozening herself, into an loveless marriage, which broke up on the rocks when she finally met the man she did love, the young philosopher, Schelling. Caroline, it seems, spread her own version of what happened between Therese and Georg.

This pattern of split ups, rumor, and leftist politics is going to fasten to free love from the revolutionary period onward. The great charge against free love is its fissility – just as the great charge made against bourgeois love, from the standpoint of free love, is its creeping dissolution of the amorous impulse, which decays in the acids of repetition and over-familiarity. They fuck you up, your Mom and Dad. Love loses its courage, that side of its character that is a perpetual test. The family withdraws into its comforts, loses its curiosity and generosity, becomes fasco-tropic. Or as Shelley puts it later in the Notes on Queen Mab:

“Not even the intercourse of the sexes is exempt from the despotism of positive institution. Law pretends even to govern the indisciplinable wanderings of passion, to put fetters on the clearest deductions of reason, and, by appeals to the will, to subdue the involuntary affections of our nature. Love is inevitably consequent upon the perception of loveliness. Love withers under constraint: its very essence is liberty: it is compatible neither with obedience, jealousy, nor fear: it is there most pure, perfect, and unlimited, where its votaries live in confidence, equality, and unreserve.

How long then ought the sexual connection to last? what law ought to specify the extent of the grievances which should limit its duration? A husband and wife ought to continue so long united as they love each other: any law which should bind them to cohabitation for one moment after the decay of their affection would be a most intolerable tyranny, and the most unworthy of toleration. How odious an usurpation of the right of private judgement should that law be considered which should make the ties of friendship indissoluble, in spite of the caprices, the inconstancy, the fallibility, and capacity for improvement of the human mind. And by so much would the fetters of love be heavier and more unendurable than those of friendship, as love is more vehement and capricious, more dependent on those delicate peculiarities of imagination, and less capable of reduction to the ostensible merits of the object.
The state of society in which we exist is a mixture of feudal savageness and imperfect civilization. The narrow and unenlightened morality of the Christian religion is an aggravation of these evils. It is not even until lately that mankind have admitted that happiness is the sole end of the science of ethics, as of all other sciences; and that the fanatical idea of mortifying the flesh for the love of God has been discarded. I have heard, indeed, an ignorant collegian adduce, in favour of Christianity, it's hostility to every worldly feeling!*
But if happiness be the object of morality, of all human unions and and disunions; if the worthiness of every action is to be estimated by the quantity of pleasurable sensation it is calculated to produce, then the connection of the sexes is so long sacred as it contributes to the comfort of the parties, and is naturally dissolved when its evils are greater than its benefits.”

If we spread the deck of cards, circa 1793 to 1893, what houses do we see? The Forsters, the Shelley-Owens, the Herzens. Oda Krohg-Hans Jaeger. The Przybyszewskas. Blok-Bely.

...
Love generates two overlapping and yet contradictory semiotic fields. In one field, love is the essence of liberty. “Love withers under constraint: its very essence is liberty” wrote Shelley – variations of the same phrase are doubtlessly to be found in the letters of the whole generation of romantic writers. All other choices are determined, more or less, by need. Love, though, is the very angel of free will, bursting forth from the casements of the heart in one spontaneous moment, sword upraised. Love in this field, then, is the opposite of need, and those things which bear the mark of need, either physical or social, are either ignored or subsumed in the presence of true love. Both sex and money fall under this law. If we confine ourselves to this field, we could say that free love aligns itself in perfect opposition to the old libertinism, the old eighteenth century materialism. That free love demands the free giving and taking of sexual delight by no means affects this anti-sensual and anti-social turn. In the eighteen century, the sexual arrangements of the great aristocrats gradually flowed into the great bourgeois households and opinions, but they brought forth romantic love, as the enemy of that calculation, of that agreeableness – and beyond that, the antithesis of libertinism, free love.

On the other hand, another semiotic field folds over the one of liberty. “Love is inevitably consequent upon the perception of loveliness”, Shelley also wrote. The old story is that love does not come out from the heart as the central identifying act – it has, instead, an exterior power all its own, and imposes itself. If this is freedom, it is a freedom that gravitates to metaphors of captivity. If in this field, the beloved isn’t necessary the way satisfying a sexual appetite is necessary, this is because the beloved exists in a space beyond physical necessity. This second field plays around the edges of the first one, and out of the interference between the two there gradually emerges images not of the angel of sex, but of the vampire, the femme fatale.

a humble suggestion for a whole new model of Value at Risk

- Alfred Kubin

Sunday’s article by Joe Nocera about the rise and apparent fall of Values at Risk models, which were used by banks, hedgefunds, ponzi schemes and assorted big and little fish, as well as their captive regulators, to justify mad and bad leverage, has caused a lot of commenting on the financial blogs – Yves Smith, hat treasure, provided, as usual, the hectoring chorus, with that radiant skepticism which always sets apart the Wall Street dissident from the usual greed jughead, seeing in Nocera’s simplifications that cool anaesthesia of conventional wisdom which, at the moment, is the way the financial press has been self-medicating itself. It is a story that will no doubt stretch on for years – the story of how everything will return to what it used to be after a few knobs are pushed, a few wires are connected.

The model talk is, to an extent, disingenuous, dancing around the question of whether we would really want a financial system that sucks up such appreciable amounts of capital for the purpose of making a very few people very rich. The financial system is, at best, built upon rents – in itself, it adds little to the prospects of humankind. And, of course, when it swells into a force similar to that which has poisoned our culture and way of life since the early nineties, no small benefit it adds will balance the barbarization that it produces, the insect like calculation it introduces into every crevice and hole of our lives. Teaching the insects to enjoy the insecticide is, of course, an old rule in elite governance, but there are limits!

However, instead of a model that takes transforms non-linear processes into a pleasingly single number, good to use over the whole portfolio of security instruments, LI would suggest that Wall Street look to literature for a better model. Most notably, Balzac’s story of the Peau de Chagrin. Chagrin is usually translated as Wild ass – The Wild Ass’s skin is George Saintsbury’s translation. It is a story ripped from today’s headlines, so to speak. Raphael, the protagonist, is a young man who has lived so largely that he is now bankrupt. One day, thinking about suicide, he goes into an antiquary’s shop and finds a skin, upon which is printed, in Sanskrit, the following message:

“Possessing me thou shalt possess all things, but they life is mine, for God has so willed it. Wish, and they wishes shall be fulfilled; but measure they desires, according to the life that is in thee. This is thy life, with each wish I must shrink, even as they own days. Wilt thou have me? Take me. God Will hearken unto thee. So be it.”

Which means, basically, that every wish shrinks the talisman, and every diminishment of the talisman diminishes the number of days left to the wisher. The wishes, the shrinkage, and death will all combine in one moment. The antiquary, of course, tries to warn Raphael from his own exotic experience (“Yes, I have seen the whole world. I have learned all the languages, lived after every manner. I have lent a Chinaman money, taking his father’s corpse as a pledge, slept in an Arab’s tent on the security of his bare word, signed contracts in every capital in Europe, and left my gold without hesitation in savage wigwams”), but of course Raphael is not to be moved by the cautiousness of an earlier generation.

Well, the U.S. economy has been one enormous Peau de chagrin. And last autumn we decided to re-write the contract, wish back the wishes. It is as if one of the wishes could be to make the talisman grow back again. But this is the limit of the contract. One can’t contract to enjoy the wishes and then wish that the conditions be changed. They go together. The rule of talismans are impervious to the chiseling of logicmongers and traders. We watch the traders hang on, though, hang on and on to their precious skins. One more wish. Bring back the effortless profits! The bonuses! Seize the money from somewhere! Bring on the dancing, captive economists, let them predict good times!

"Quite so," said the man of science. "I understand. The remains of any
substance primarily organic are naturally subject to a process of
decay. It is quite easy to understand, and its progress depends upon
atmospherical conditions. Even metals contract and expand appreciably,
for engineers have remarked somewhat considerable interstices between
great blocks of stone originally clamped together with iron bars. The
field of science is boundless, but human life is very short, so that
we do not claim to be acquainted with all the phenomena of nature."

"Pardon the question that I am about to ask you, sir," Raphael began,
half embarrassed, "but are you quite sure that this piece of skin is
subject to the ordinary laws of zoology, and that it can be
stretched?"

"Certainly----oh, bother!----" muttered M. Lavrille, trying to stretch
the talisman. "But if you, sir, will go to see Planchette," he added,
"the celebrated professor of mechanics, he will certainly discover
some method of acting upon this skin, of softening and expanding it."

the revolution of ugly men

Events in Mainz in 1792 (continuing the thread broken off before I went to mexico)

In 1792, Georg Forster had ended up in Mainz, a city in Hesse. The region had become a conflict zone between the French revolutionary armies and the various armies of the coalition formed under the terms of the Brunswick manifesto, to rescue the ancien regime, i.e. the house of Bourbon.

Forster was overworked as the head of the archive and library. At the beginning of 1792, he had not taken a public political stance, although in private letters he expressed a clear sympathy for the Jacobins. He was hiding from his wife Therese the exact extent of his indebtedness, which was crushing – Georg Forster was never a prudent man when it came to cash.

Therese seems to have been emotionally and intellectually of the left. Geiger, her biographer, in 1909, found this so scandalous that he tried to mitigate it by claiming that Therese was Forster’s ‘pupil’. It was far more likely she was his comrade. This marriage and its failure has attracted a host of commentators who have puzzled themselves over the fact that Therese left Georg for another man, and yet the two seemed to rely on each other even after the separation. The solution – that their sexual incompatibility did not hinder their affinity with each other on the basic level of friendship – seems too shocking to propose – especially for those who want to tell a story of betrayal. But Therese seems to have cared for Georg, although she didn’t love him.

The man she did love was Ludwig Ferdinand Huber, a Prussian official and intimate of Schiller. Therese met Huber through Forster, in 1788. In 1790, Huber was living with the married couple. Therese was moving in a direction taken by her mother – who lived with her lover in the house of her husband:

We stood in a doubtful relationship one to another for 1 ½ years. In the beginning I pushed him away, everything now came together, he wanted to forget [his relationship to his fiancé, Dorothea Stock], and a miserable doctor pulled him away from the border of the grave. The noble, humane Forster saw a lot in the young man, drew him nearer, I became used to him, he saw me for a year and went through all the gradation of feeling, my unhappiness strengthened my love for him – although I though of none – finally circumstances offered a hand. I don’t know in which moment, before we could guess ourselves, he had exposed to me his relationship with that girl. I pondered the thing and found decisively the result: he must confess to her that he didn’t love her any more, that time had changed his feeling, that he had no more rights upon her heart. … “ As Therese says, it took 2 ½ years for Huber to come to this point.

Some biographers have said that Therese Huber used her status, when Forster was dead, to suppress much of the information about what was happening in Mainz in 1792.

If the scene was not loaded for an explosion yet – a disaffected couple, sickly children, an overworked world famous intellectual, the French revolutionary army in the area, the wife’s lover in the house – into this scene came Caroline Michaelis.
Why Therese would invite her school friend Caroline, lately widowed, to stay with the household in Mainz is a puzzle. Or perhaps it isn’t – perhaps Therese, out of fairness, wanted Georg to have a lover too. Although Georg was not sexually faithful, apparently he had sex in the approved way, with lower class girls.

Caroline was of course as strong willed as Therese. Caroline’s letters from Mainz give another account of the Forster-Huber household. It is a sign of how narrowly the circles intersect that he chief correspondent was Meyer, the writer who had been Therese’s admirer – who “took” her virginity from her, according to Therese in an ambiguous reference. Surely Caroline knew about that. Even before she went to Mainz,she had written to Meyer: “I have never depended on her friendship – among women, there can be none.”

Soon Caroline is writing in a more sympathetic way about Georg. In particular, she writes a letter linking the ugly men of the revolution – Mirabeau, ostensibly – with her own “beauteous” figure. Strikingly, Caroline “reads” herself into her situation – which has forever been the subject of speculation – with Georg by reading Mirabeau’s famous at the time letters to his lover, Sophie, of which she writes to Luise, her correspondent, that she should read them, except that she imagines Luisa won’t have time, and won’t read in bed, being more inclined to sleep, and is too “good” for a “ugly monster” [hassliche Bosewicht] as the extraordinary Mirabeau was, who had virtues and talents enough to supply a thousand normal people, and too much true intelligence to seriously be a monster, as one can conclude out of particular features. He may have been ugly, he says that often enough in the letters – but he loved Sophie, for women certainly don’t love the beauty of men – and yet the ugly man imposes himself through his exterior on the unruly masses…”

We remember, of course, the striking ugliness of Georg Forster. And that, too, of Chamfort. A revolution of ugly men.

from the other shore

My friend R., M.’s husband, is skeptical of my book. Unfortunately, at one point I described my project as “against happiness” – which is true in a complicated sense. Still, R. quotes that back at me – he has a good ear for the ridiculous things I say. And that phrase certainly goes against R.’s New Left politics.

On New Years Eve, we were all in Malinalco. Chepe has a country house there. I’d previously been down there in 2005. It is a compound of three houses – one is Chepe and Tania’s house, one is a guest house, and one is the house that Tania’s mother lives in. It is a perfect place for long, wordy afternoons, as though cut from a Tom Stoppard play. We all drink, smoke and snack, waiting for dinner, which will be the trout M. bought from the market about half a mile away. The kids throw each other into the cold swimming pool behind Tania’s mother’s house – we can hear them shriek. Friends and relatives show up, say hi, disappear.

M., in the hammock, complains to me that the beginning of the Sorrows of Werther, which she is thinking of teaching to her students this semester on my recommendation, is too lachrymose. Why did I suggest it? I make a few suggestions as to what is historically important in Werther. R. interjects that Werther is not new – that the treatment of love ending in suicide is prefigured in the medieval romance literature, as Denis de Rougemont shows. And he says, Werther is a jerk.

M. says she isn’t going to teach her class that her husband thinks Werther is a jerk. Who cares if R. thinks Werther is a jerk?

Tatiana draws up a chair. She enjoys the fuss R., M. and I are making. She doesn’t say much, but smokes and watches. I reply that there is something different happening in Werther than, say, in the Arthurian romances. One has to have a sense for how history enters the system of the passions. That, I say, has to do with the synthesis between a sentiment, a situation, and a sanction – I reference Durkheim and Ogien. It is in the forging of these syntheses, in the interstices, that we can make a history of the passions possible. So, in particular, we should take the household demographic situation of Europe in the 18th century, which is much different than in the eleventh century, and use it as a reference for understanding how certain syntheses produce sentiments. In particular, with the love-choice marriage, the question arises whether love is the kind of thing described by a longer synthesis, or whether shorter, intense syntheses are at its base.

But R. is not convinced by this, and insists that Werther nevertheless represents an old, Christian thematic of coupling love with death. And that, he says, is a reiteration of an old familiar nihilism, which buffers all the old institutions. What he demands, he says, by way of Marx, Nietzsche and Deleuze, is not my syntheses, which all fall under the notion of the negation of the negation, but an affirmation of an affirmation – love affirmed as it is, in life. We have to get past the clutter of guilt and shame that have been built around the life processes.

My problem with this, I say, is that it is the wrong way to start the investigation. Our material should first be seen as it is, as it is performed, materialized in performance. Whether I reject the coupling of life and death or not, as a social phenomena, the thematic exists. I’m more interested in how to account for it so that I can see how it changes.

I don’t disagree with you from the view of the historian, R. says.

At this point, a couple appears in the yard, coming from Tania’s mother’s house. Hola, everybody says. I say, we are talking about love and happiness. Tatiana laughs.

ps - my review of Patrick Tyler's history of U.S. foreign relations with the Middle East since Eisenhower was published today here.

revolts - intestinal and otherwise

I flew in from Mexico on New Year’s Day. And around six o’clock that night, a little bug crept out from my intestinal fauna and launched a popular revolt against my oons and being by forcing me to vomit copiously every forty five minutes. Alas, copiously does not describe how much my stomach can contain – I’ve never been one of nature’s trencherman. Rather, I have the delicate stomach of a 14 year old schoolgirl considering ballet as a career.

So I went to sleep for 24 hours, waking up now and then to swallow sugared water.

Apparently my organism has recovered. My mind hasn’t fully recovered, however – I have a notebook stuffed with comments I was going to post, here, but an almost insurmountable sloth stands in the way of that ever happening.

So, as a form of light entertainment, here are some comments on the unconsciously hilarious NYT article about Egypt that appeared this morning, under Steve Erlanger’s by-line. One of my wilder predictions for this New Year is that Egypt, which resembles Iran under the Shah, without the oil money, will undergo a revolution. This is simply an intuition – as the Israelis slaughter more and more Gaza Palestinians on the principle, apparently, that nobody can stop them, my intuition tells me that Egypt, heavily dependent on handouts from Saudi Arabia and the U.S., will be on the receiving end of the real collateral damage. Erlanger’s clueless analysis, which could easily have been written by a man locked in the bowels of the Heritage Foundation instead of a man supposedly walking the streets of Cairo, has all the earmarks of a report from a protectorate that is going down.

“CAIRO — Egypt is the crucial, if reluctant, intermediary between Israel and Hamas, which is no great friend of this moderate secular state. Still, a sustained Israeli ground operation in neighboring Gaza would sharply increase public pressure on President Hosni Mubarak of Egypt to do more to help the Palestinians there.

Few criticize Mr. Mubarak himself, and there are widespread feelings here that the radical group Hamas provoked the current crisis. Yet there is unhappiness with the government’s relative silence about Israel’s bombing campaign and its Palestinian victims, and with the apparent lack of diplomatic pressure from Cairo on Israel and the United States to stop the fighting.”

This is lovely reporting. The “widespread feeling”, the mushmouthed “unhappiness with the government’s relative silence…” – truly, this is the kind of reporting you get when your introductions all come from the American embassy. “Few criticize Mr. Mubarak himself” – what can one say? Perhaps Mr. Erlanger might have sought an intro to the jails, to find out what happens to those disaffected few who don’t share the ‘widespread’ feeling among Egypt’s cocktail set. This kind of reporting shares the willful blindness of CIA reports coming out of Iran in 1978 – a little bazaari discontent, nothing that a little sulfur and flint can’t take care of.

Since Egypt is an authoritarian society in which there is nothing like a ‘democracy’ – our favorite word, covering a multitude of American sins in the Middle East, the thing and cause we are always ardently supporting but somehow, through an evil voodoo, end up not supporting at all, and in fact crushing in any of its manifestations – the NYT has to reach around to find kindly, soothing words – an alka seltzer rhetoric shake. Thus the talk of a “moderate secular state”., which is another way of saying, apparently, “a dictatorship by an eighty year old man”.

Most enjoyable is the contrast Erlanger draws between the complicatedness of things and, uh, reality:

“Given the continuing Israeli occupation of much of the West Bank and East Jerusalem, deep divisions among Palestinians and a Gaza controlled by Hamas, the Egyptian government “must make difficult choices,” he said.
“Egypt is working for peace while trying to work realistically with the situation in Gaza, where a radical group took over the territories next to Sinai, a sensitive subject for Egypt,” Mr. Said continued. “So Egypt is trying to support Palestinian humanitarian needs, but not allow a radical group to control the situation, dominate the Palestinian issue or affect Egyptian internal politics.”

But such complications are not easy for most Egyptians to grasp, especially when they see the constant repetition of images of Israeli bombs and dead Palestinians on Al Jazeera.”

Erlanger’s article has to bridge so many complications that it finally lapses into incoherence, as ‘widespread support’ for Mubarak is reduced, in the last paragraph, into an impotent unpopularity:

Ms. Malky, the editor at Daily News Egypt, said that the government is making it clear it wants Hamas to fail. “They’re afraid of the internal situation,” she said. “They don’t want a successful Islamic or Muslim Brotherhood experiment on their own border.

But she warned that unpopularity should not be confused with weakness. “The perception of the government in the feelings of the masses is deteriorating,” she said. “But their power and ability to contain whatever dissent may come out has not been shaken in the least.”

Yes, this is a riskier prediction than those I pronounced at the beginning of last year – it was easy to see that the U.S. economy was going down, while what do I know about Egypt? Yet the combination here of a worldwide recession, the indifference of the Egyptian elite to the murder of Palestinians, and the contrast between the external impotence of the state and its internal omnipotence in crushing dissent are precisely the factors that lead to revolution. Countering which is the eternal inertia of things. Usually, it is better to bet on inertia – it almost always comes in first. But Gaza doesn’t seem to be ending…

sex and the city

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

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.

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.

Sidewalks of Mexico City

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

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

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

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

conversation in mexico

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

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

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

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

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

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

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

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

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

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

What about the military, I said.

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

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

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

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

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

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

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

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

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

This is Hobbes, M. said.

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

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

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

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

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

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

shoes

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

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

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

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

repost of The Year of Cooling the Mark Out

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

the year of cooling the mark out

And Burn my shadow away…

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

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

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



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

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

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


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

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


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

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

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

It is going to be an excellent year for spectators.

such a clever boy

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

going down to Mexico city with visions in my head

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

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

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

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

Free Love and the Strait Jacket

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

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

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

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

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

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

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