Even more astonishing is the fact that tobacco use not only spread at an unprecedented rate and in the absence of media advertising, but in the face of penaltiesthat remain unparalleled in the history of smoking. For example, the council of
Bern, Switzerland, placed the prohibition against tobacco among the Ten Commandments, gave it the same penalty as for adultery, and initiated an Inquisition-like tribunal known as the Chambre du tabac to deal with offenders. In
Turkey, smokers had the stems of pipes thrust through the cartilage of the nose and were seated backwards on mules as they were led through the streets. Meanwhile, Tsar Mikhail Fyodorovich Romanov had Russian tobacco users whipped and their nostrils slit, whereas the Persian shah ordered tobacco traders to have their noses, lips, and ears cut off or molten lead poured down their throats. In India, the Mughal Emperor Jahangir also decreed that smokers should have their lips slit. He
was lenient compared with the Ottoman tyrant Sultan Murad IV, who imposed the death penalty for smoking, and the Chinese, who issued an edict against selling tobacco on pain of decapitation. All of these measures, which were rarely motivated by health concerns, failed to stop the spread of smoking during the early 17th century. The ruling classes soon were obliged to rescind their laws. Alexander von Gernet
My friend T replied to LI�s post re the Drug War with an interesting set of objections. Here�s his letter:
yes, yes, and again yes, a nightmare as envisioned by Foucault it is. But will the legalization of the drug trade rouse anyone at all from that unrestful slumber?
To be fair, I have no idea beyond a gut-sourced jerk of the knee where I stand on the topic, except that any discussion (which, as you note, will never happen) must exclude anything pretending to morality and must include a sophisticated (not NECESSARILY cynical) acceptance that the product will do irreparable harm to many of its users (plenty of precedent here), and that the concept of "choice" for the user for a similar number of users becomes moot for the use of the product.
Thus, yes, inverse the Hegelian dialectic; temporarily, in the first instance, set aside concerns for those who the product will harm irreparably (which helps, I thing, in setting aside matters moral and cynical), let fall one's attention of the Marxian material relations of society; more specifically, on the material relations of producer/distributor/consumer in the conditions following the legalization of the drug trade.
Not that I would (or could) measure the efficacy of implementing any bit of Hegel or Marx in its predictive possibility, but shouldn't the specter of legalization consider the "violence of putting environmental hazards in poor neighborhoods...of allowing corporations to operate in regulatory breakdown..."? Would not this same violence all so effectively propagate through the channels created by a sanctioned trade? Surely the billboard for "Crack - brought to you by Pfizer" might be regulated beyond 500 feet of a schoolyard, but that would place it adjacent to an advert for Newport cigarettes, which is across the street from a poster for some swill of a malt liquor. Do we then devolve to a mere cost-benefit analysis in the discussion (which will never happen) of the legalization of the drug trade?�
This is the problem with having sharp eyed friends.
Reaching under the brilliant plumage, LI thinks that T is expressing two objections to our post, one formal, and one political. The formal one is that really, to pretend that the analysis of the mechanism comes first ignores the motivation for the discussion in the first place. If drugs did us no debateable harm, there would be no point in discussing whether to ban them.
This is true. In the order of motivations, the discussion of harm has to come first. But LI thinks that that discussion should be held in light of a very clear eyed sense of what the State has done, in the past, in terms of regulatory bannings, and how it has done it. That clear eyed sense of mechanism would recognize that the variables of enforcement are not to be wished away when deciding to banish or legalize marijuana, heroin, ecstasy and the lot. Even on the level of harm, of course, discussion is skewed by the reticence of the consumers of these drugs to defend them. The defense of pleasure is always a shy and naked thing in forums in which utility is King. Pleasure, of course, is the Jack. And that pleasure can lead to addiction is considered the main and only subject. That utility can lead to empty, disgusting lives, lives full of polyunsaturated fats and tv, is considered, well, merely frivolous.
But let�s grant the norms their normativeness, for the moment. LI would prefer to overcome these values in a great Nietzschian burst, but we have learned, from experience, that great Nietzschian bursts empty the hall. So by all means, let�s say that we have the harm of addiction on one side. And that there is only the contentless demand on the other. Demand, practically, wins. The Murads cut off the lips of smokers, the King Jameses blast tobacco, but tobacco wins.
The political objection is about the very nature of the relationship between the State, the market, and the people. Indeed, drug use can be framed as an environmental hazard � in the same way that DDT is an environmental hazard.
Dealing with this question is hazardous. Even the drug war skeptics often mis-frame what is at stake. In the fall, 2001 Social Research (unfortunately not on-line), there were a number of articles about drugs, criminality, and economics. One of them, by Jeffrey Miron (Drug Economics and Drug Legalization), is a comparison of the �costs� of legalization versus the �costs� of the drug war. Miron is forthright about his conclusion:
�This paper explains that many of the harms typically attributed to drug use are instead due to drug prohibition. This is not to deny that drugs can have powerful effects on the user, nor to deny that drugs differ in some respects from other commodities. But a wide range of outcomes typically thought to result from drug use is far more accurately attributed to the current legal treatment of drugs.�
However, Miron frames the argument in terms that LI will have to object to. This makes sense: Miron is a libertarian. That slant gets into the very way he presents economic categories � or doesn�t. His opening move is to observe that drug prohibition creates a black market in drugs. He then observes:
�Even though prohibition does not eliminate drugs, it is likely to have important effects on the operation of the market. In particular, prohibition might affect the demand for drugs as well as the supply. I address each of these in turn.
Prohibition potentially affects the demand for drugs through one of several mechanisms. First, the mere existence of prohibition might reduce demand if some consumers exhibit respect for the law. This mechanism does not appear to be quantitatively important since abundant evidence suggests that many people disregard laws that are weakly enforced. Second, prohibition might encourage demand for the good through a "forbidden fruit" effect. There is little concrete evidence to support this effect, although anecdotally it appears plausible for some groups (for example, teenagers). Third, prohibition might reduce demand directly by punishing purchase or possession of the good.�
What is the problem, here? The problem begins with the notion of drug prohibition �creating a market�, and runs through the analysis of the drug market itself. That drugs are bought by people is true, but not true enough. A prohibition doesn't necessarily create a market in itself. DDT is bought by people, yet there is very little black market in DDT in this country. What creates a market is an group of consumers who strongly prefer a certain good, and what creates a black market, at least in the case of drugs, is a group of consumers whose preferences: a. are specific enough not to be eroded by legal substitutes, and 2., are of a scale, either in wealth or number, great enough to make the risk of getting caught marketing the product, in comparison to the benefit of selling it, favor the latter course.
To understand how this is so, we have to understand what is missing in Miron's article. We have to get clear about the fundamental differences between kinds of goods, how those differences effect regulation, and how those regulations fold into democratic forms of government. In other words, one must really consider how a thing like asphalt or DDT or dioxin differs from a thing like heroin or cocaine. Since this transgresses the libertarian credo that all goods are the same, and all government regulation is the same, it is easy to see how Miron might not be inclinded to make essential distinctions here. Still, as an economist, he really should distinguish between perishable and durable goods.
That distinction isn�t fine grained enough for the analysis LI has in mind, but it is common enough to get to some of the salient features of the economic embeddedness of narcotics. Usually, durable goods are thought of as products that have a use that extends over at least, I believe it is, three years time, while perishables are bought for semi-immediate consumption.
We need to build on this distinction.
When you buy a house, you buy a quantity of nails, so many pounds of asphalt in the roof shingles, some amount of copper in the wiring, the PVC in the pipes, etc. Yet this is not what you are really buying. It is the rare housebuyer who asks about the PVC � and only the impossible ones want a count of the nails. Out of that mass of goods, the buyer aims at an emergent property � the house itself. This isn�t to say that some buyers want hardwood floors, some want bullet proof glass windows, etc., but in the end, you buy a house to get a house. Consumers are like phenomenologists: they want to go to the things themselves.
When, on the other hand, you build a house, you are, indeed, concerned with the amount of nails put in. You are concerned with the matter and the labor. But if you are building the house to sell, you are ultimately concerned with these things as they affect sale. Because you are concerned, like the Kantians, with the thing-in-itself, otherwise known as lucre, moola, the green stuff, bucks, dineros, bread, money.
This distinction is not, of course, absolute. The workman is also concerned with workmanship, and the homeowner is concerned with resale value. The point, however, is that, from the state�s point of view, different regulatory mechanisms are appropriate for different kinds of economic activity.
For the emergent property � whether it is bubble gum or a car � the rules that adhere usually gain their force through social convention. Compliance with the rules, which always depends largely, over time, with self-compliance, usually depends on trust. One can be fined for, say, junking up a yard in contravention of a zoning ordinance. But this kind of fine doesn�t insert itself into the owner�s sense of costs and benefits of continuing an enterprise. When one descends into banned activities such as stealing, murder, rape, etc., we find that only stealing is really about monetary gain � the rest are about emergent properties. Among the most prominent of which is pleasure.
An enterprise, however, is all about continuing to make a profit. Incentives to obey regulation must attach to that sense. What is interesting is how easily the regulation of business activity can be embedded into democracies � in spite of the gloom of the latter phase Hayek, real liberty has certainly increased in democracies in the last hundred years. Why? Because the relationship between the state and business enterprise is not, primarily, conflict. It is, rather, collusion. Business enterprise depends on contract. The cost of enforcing contract � a cost that could really unravel most enterprises � is offloaded onto the state. The state also allows externalities that would otherwise cripple the system of property ownership. Property as use -- property considered dynamically -- is a different thing than property as a claim -- property considered statically. Of course, Libertarian ideology is engaged in massively disguising these distinctions, and it has done so so energetically that it has seeped into the common sense way we see things. But we have to shake off the image of the state as a monster to get a clear idea of what the state does well and what it does badly.
LI hopes our readers have already done this. If not, we recommend you jettison the idea of the State as Leviathan. The State, alas for romantics and Che Guevara, is merely another algorithm.
Money, which is derived from the contractual nexus, is the black magic that makes it possible to constrain corporate power. In this sense, every good leftist should harbor some kindly feeling for money in his heart.
We�ll go into the rest of this tomorrow, if we can.
Tuesday, November 26, 2002
Thursday, November 21, 2002
Remora
At all times sincere friends of freedom have been rare, and its triumphs have been due to minorities, that have prevailed by associating themselves with auxiliaries whose objects often differed from their own; and this association, which is always dangerous, has been sometimes disastrous, by giving to opponents just ground of opposition, and by kindling dispute over the spoils in the hour of success. No obstacle has been so constant, or so difficult to overcome as uncertainty and confusion touching the nature of true liberty. If hostile interests have wrought much injury, false ideas have wrought still more; and its advance is recorded in the increase of knowledge as much as in the improvement of laws. The history of institutions is often a history of deception and illusions; for their virtue depends on the ideas that produce and on the spirit that preserves them; and the form may remain unaltered when the substance has passed away. -- Lord Acton
There's a general sense on the Left that the tools of invective should be expropriated from the Right. Expropriated? It's become a common paradox, worthy of a Slate writer, that the tools of invective were invented on the Left, usually in the sixties, when the Left was fun. Although the Slate writer, in keeping with the immortal rule of journalism, coined by Evelyn Waugh in Scoop, that the truth is only worth pusuing "up to a point" (that point being determined by the prejudices of who is in charge), never seems to find Leftists like Cockburn hilarious.
However, this cause has been taken up by many on the Left. It's the vague desire that for every Rush Limbaugh, our side should have a Michael Moore. LI can understand this. Certainly, Cockburn's Counterpunch is founded on the premise that the American public will be moved more by rock em and sock em than by the dictates of pure reason. The tabloid style is in Cockburn's blood -- from his dad, Claude -- and such is the style of CP.
But LI feels that this is a misunderstanding of the sources of rightwing triumphalism. That triumphalism does, indeed, go back to the dictates of pure reason, at least as it is purveyed among the makers and shakers in conservative think tanks, and absorbed, with a decreasing amount of substance and an increasing amount of smugness, among the Right's constituencies. The phrase, endless attributed to Churchill, that if a man isn't a socialist at twenty, he has no heart, and if he isn't a conservative at forty, he has no brain,
captures the mood of this crowd exactly. (Incidentally, LI finds that little saying screamingly funny -- it is usually quoted as if we've really hunted down a zinger, here, boys. Wisdom at last! When we know the real organs in question are the penis, in the first instance, and the intestine and anus, in the second. LI prefers Leon Bloy's Exegese des lieux communs, which treats such bourgeois maxims to the acid bath of inversion, in keeping with St. Paul's verse: Videmus nunc per speculum in aenigmate: tunc autem facie ad faciem.)
Excuse the convoluted prolegomena, ladies and germs, and on with tonight's feature presentation!
There's a nice article about pot on the Counterpunch site. It is by Ben Tripp. It scores on honesty -- Tripp is not coy about his own pot experience. We also approve of Tripp's sardonic tone. Of course, there's something peculiar about the "medical" part of the "free marijuana" campaign. There's something refreshing about demanding the end to the banning of pot on the grounds that it is a harmless and pleasurable recreation, instead of its supposed helpfulness in cases of glaucoma. However, there's an underlying rule in Tripp's piece, one endemic to both the Left and the Right in the endlessly sterile war over the Drug war. It is the premise that the main question, when discussing the banning a product, is to find out if it is immoral or harmful. As soon as you have that sorted out, you ban or you don't ban. Is pot as bad as alcohol? Is it better than cigarettes?
This, we think, is inverting the real analysis of the material conditions of banning.
We've just been in correspondance on this very topic with a friend. Our friend believes in banning guns, especially handguns, and LI doesn't. But by making LI defend that belief, our friend has refined the way LI thinks about what is involved in regulation -- in the mechanisms of governance.
Here are some various excerpts from our letters.
"What if the law prohibiting slavery resulted in locking up more people than the slave population?
I mean, the question isn't slavery so much -- and I really think that is something that can be successfully banned within a democracy, because the mechanism for banning it actually increases the domain of democracy -- as the question of what has happened to the poor and working class in this country during the last thirty years. I'm increasingly convinced that the "lockdown America" thesis has some merit. It isn't just that the prison population increased from something like 60 thou in 1970 to 1 and a half million in 1998 -- that really understates the number of people who have been cycled through the prison-court system. It is that this systematic marking, the explosion in the number of offenses that lead to prison, and their assymetrical enforcement, is the shadow Great Society program for dealing with blacks, hispanics, the unemployed, the blue collar white male, etc. It is the threat that has effectively demoralized these groups. I mean, I think there is something symbolically just in the fact that Gore lost the presidency because the Florida State Department "dis-enfranchised" black voters by going through felonies lists and delisting the appropriate (and inappropriate) names -- for this is the same Gore who advocated taking people who are found with drugs in prison and doubling their sentences.
He was, in fact, the perfect candidate for the era of punitive liberalism -- in which, behind a front of seemingly liberal concerns, like controlling the "violence" endemic in American society, the mechanisms were put in place to coerce the poor at the buttend of the policeman's Tasar. As for the real, systematic violence -- the violence of putting environmental hazards in poor neighboorhoods, the violence of allowing corporations to operate in a regulatory breakdown (or is it break dance?), the violence of allowing police to, in affect, abolish the constitution at their leisure in poor neighborhoods in NYC, in LA, in Chicago, in whereever -- that just isn't an issue. It is a joke.
What determines a successful ban is not the harm done by the product or the service, or the morality of it. Rather, it is the way the product or service is embedded in the political economy. That's it. That's the one and holy clue. Marx was right: you have to inverse the Hegelian dialectic before it comes out right -- start with the material relations of society, rather than the ideas. Or in this case, the morality. Or the harm.
So what are the signs of an unsuccessful ban? Let's just talk about one of them. An unsuccessful ban depends not on the compliance of the people in the marketplace -- the producers, dealers and users -- but on the police. The police are always the regulators of the last resort. They are the most inefficient, and do the most harm to liberty, justice and equality -- my trinity, still, after all these years. This is a rule of thumb that has some exceptions. Those exceptions depend, however, on the scale of the supply. For instance, when you look at environmental regulation, a good part of it is devoted to protecting a rare resource -- the water in a particular area, or endangered species, etc. In this case, police power can efficiently be concentrated, and can operate with a maximum respect for liberty. Even there, however, the only way a ban will be more beneficial than harmful is if it on a good or service that is amenable to other sources of cultural suasion -- this is why I think banning the trade in endangered bird feathers in this country worked at the turn of the century. The Audubon society, first of all, was able to militate against bird massacring, and there was a ready substitute available -- you could easily manufacture artificial flowers. But this point can't be gotten over in the rhetorical cloud around the 'war on drugs' because nobody wants to discuss substitutes -- they want to discuss abstinence. In other words, they don't want the market to be what it is.
So the market continues, its suppression continues, and the cops form the interface between the two. This is a disaster.
I think the number one act that can lower violence in this country is not the banning of handguns. I think that will eventually increase it. No, if we really want to eliminate gun violence -- gun homicide violence, that is, not gun suicide violence -- is the legalization of the drug trade. I think that is undoubtedly the biggest weapon used against the poor in this country -- it is where the cracks of race and class gape. Until that happens, I don't think there will ever be a real decline in gun violence -- or any violence -- as compared to other countries. And I think a debate (that will never happen) should occur about the lockdown mentality. And I think that debate would put into question what I see as the increasingly upper middle class composition of the only kind of lefty discourse that gets allowed in the media of this country, which can stage a million mom march but seems disinclined, to say the least, to stage, say, the five million, the ten million mom march of mothers whose kids, husbands, lovers and fathers have been cycled through the lockdown state. Unless, of course, that class doesn't get something -- when its candidate, Gore, loses, then they come out shrieking. Where was that shrieking when Gore and his boss were presiding over the sharpening of laws to imprison more people! Or calmly let neighborhoods slip into the maws of the penal system? When you build your house of virtue on the backs of the classe laborieuse et dangereuse, eventually it will tumble down. And before it does, a pervasive, unconscious sense of the hypocrisy of the whole exercise will become the norm -- feeding into the most reactionary currents abroad in the country, as well as demoralizing the most progressive segment.
So I guess this is my deal. I think we really are living in the Foucaultian nightmare.
At all times sincere friends of freedom have been rare, and its triumphs have been due to minorities, that have prevailed by associating themselves with auxiliaries whose objects often differed from their own; and this association, which is always dangerous, has been sometimes disastrous, by giving to opponents just ground of opposition, and by kindling dispute over the spoils in the hour of success. No obstacle has been so constant, or so difficult to overcome as uncertainty and confusion touching the nature of true liberty. If hostile interests have wrought much injury, false ideas have wrought still more; and its advance is recorded in the increase of knowledge as much as in the improvement of laws. The history of institutions is often a history of deception and illusions; for their virtue depends on the ideas that produce and on the spirit that preserves them; and the form may remain unaltered when the substance has passed away. -- Lord Acton
There's a general sense on the Left that the tools of invective should be expropriated from the Right. Expropriated? It's become a common paradox, worthy of a Slate writer, that the tools of invective were invented on the Left, usually in the sixties, when the Left was fun. Although the Slate writer, in keeping with the immortal rule of journalism, coined by Evelyn Waugh in Scoop, that the truth is only worth pusuing "up to a point" (that point being determined by the prejudices of who is in charge), never seems to find Leftists like Cockburn hilarious.
However, this cause has been taken up by many on the Left. It's the vague desire that for every Rush Limbaugh, our side should have a Michael Moore. LI can understand this. Certainly, Cockburn's Counterpunch is founded on the premise that the American public will be moved more by rock em and sock em than by the dictates of pure reason. The tabloid style is in Cockburn's blood -- from his dad, Claude -- and such is the style of CP.
But LI feels that this is a misunderstanding of the sources of rightwing triumphalism. That triumphalism does, indeed, go back to the dictates of pure reason, at least as it is purveyed among the makers and shakers in conservative think tanks, and absorbed, with a decreasing amount of substance and an increasing amount of smugness, among the Right's constituencies. The phrase, endless attributed to Churchill, that if a man isn't a socialist at twenty, he has no heart, and if he isn't a conservative at forty, he has no brain,
captures the mood of this crowd exactly. (Incidentally, LI finds that little saying screamingly funny -- it is usually quoted as if we've really hunted down a zinger, here, boys. Wisdom at last! When we know the real organs in question are the penis, in the first instance, and the intestine and anus, in the second. LI prefers Leon Bloy's Exegese des lieux communs, which treats such bourgeois maxims to the acid bath of inversion, in keeping with St. Paul's verse: Videmus nunc per speculum in aenigmate: tunc autem facie ad faciem.)
Excuse the convoluted prolegomena, ladies and germs, and on with tonight's feature presentation!
There's a nice article about pot on the Counterpunch site. It is by Ben Tripp. It scores on honesty -- Tripp is not coy about his own pot experience. We also approve of Tripp's sardonic tone. Of course, there's something peculiar about the "medical" part of the "free marijuana" campaign. There's something refreshing about demanding the end to the banning of pot on the grounds that it is a harmless and pleasurable recreation, instead of its supposed helpfulness in cases of glaucoma. However, there's an underlying rule in Tripp's piece, one endemic to both the Left and the Right in the endlessly sterile war over the Drug war. It is the premise that the main question, when discussing the banning a product, is to find out if it is immoral or harmful. As soon as you have that sorted out, you ban or you don't ban. Is pot as bad as alcohol? Is it better than cigarettes?
This, we think, is inverting the real analysis of the material conditions of banning.
We've just been in correspondance on this very topic with a friend. Our friend believes in banning guns, especially handguns, and LI doesn't. But by making LI defend that belief, our friend has refined the way LI thinks about what is involved in regulation -- in the mechanisms of governance.
Here are some various excerpts from our letters.
"What if the law prohibiting slavery resulted in locking up more people than the slave population?
I mean, the question isn't slavery so much -- and I really think that is something that can be successfully banned within a democracy, because the mechanism for banning it actually increases the domain of democracy -- as the question of what has happened to the poor and working class in this country during the last thirty years. I'm increasingly convinced that the "lockdown America" thesis has some merit. It isn't just that the prison population increased from something like 60 thou in 1970 to 1 and a half million in 1998 -- that really understates the number of people who have been cycled through the prison-court system. It is that this systematic marking, the explosion in the number of offenses that lead to prison, and their assymetrical enforcement, is the shadow Great Society program for dealing with blacks, hispanics, the unemployed, the blue collar white male, etc. It is the threat that has effectively demoralized these groups. I mean, I think there is something symbolically just in the fact that Gore lost the presidency because the Florida State Department "dis-enfranchised" black voters by going through felonies lists and delisting the appropriate (and inappropriate) names -- for this is the same Gore who advocated taking people who are found with drugs in prison and doubling their sentences.
He was, in fact, the perfect candidate for the era of punitive liberalism -- in which, behind a front of seemingly liberal concerns, like controlling the "violence" endemic in American society, the mechanisms were put in place to coerce the poor at the buttend of the policeman's Tasar. As for the real, systematic violence -- the violence of putting environmental hazards in poor neighboorhoods, the violence of allowing corporations to operate in a regulatory breakdown (or is it break dance?), the violence of allowing police to, in affect, abolish the constitution at their leisure in poor neighborhoods in NYC, in LA, in Chicago, in whereever -- that just isn't an issue. It is a joke.
What determines a successful ban is not the harm done by the product or the service, or the morality of it. Rather, it is the way the product or service is embedded in the political economy. That's it. That's the one and holy clue. Marx was right: you have to inverse the Hegelian dialectic before it comes out right -- start with the material relations of society, rather than the ideas. Or in this case, the morality. Or the harm.
So what are the signs of an unsuccessful ban? Let's just talk about one of them. An unsuccessful ban depends not on the compliance of the people in the marketplace -- the producers, dealers and users -- but on the police. The police are always the regulators of the last resort. They are the most inefficient, and do the most harm to liberty, justice and equality -- my trinity, still, after all these years. This is a rule of thumb that has some exceptions. Those exceptions depend, however, on the scale of the supply. For instance, when you look at environmental regulation, a good part of it is devoted to protecting a rare resource -- the water in a particular area, or endangered species, etc. In this case, police power can efficiently be concentrated, and can operate with a maximum respect for liberty. Even there, however, the only way a ban will be more beneficial than harmful is if it on a good or service that is amenable to other sources of cultural suasion -- this is why I think banning the trade in endangered bird feathers in this country worked at the turn of the century. The Audubon society, first of all, was able to militate against bird massacring, and there was a ready substitute available -- you could easily manufacture artificial flowers. But this point can't be gotten over in the rhetorical cloud around the 'war on drugs' because nobody wants to discuss substitutes -- they want to discuss abstinence. In other words, they don't want the market to be what it is.
So the market continues, its suppression continues, and the cops form the interface between the two. This is a disaster.
I think the number one act that can lower violence in this country is not the banning of handguns. I think that will eventually increase it. No, if we really want to eliminate gun violence -- gun homicide violence, that is, not gun suicide violence -- is the legalization of the drug trade. I think that is undoubtedly the biggest weapon used against the poor in this country -- it is where the cracks of race and class gape. Until that happens, I don't think there will ever be a real decline in gun violence -- or any violence -- as compared to other countries. And I think a debate (that will never happen) should occur about the lockdown mentality. And I think that debate would put into question what I see as the increasingly upper middle class composition of the only kind of lefty discourse that gets allowed in the media of this country, which can stage a million mom march but seems disinclined, to say the least, to stage, say, the five million, the ten million mom march of mothers whose kids, husbands, lovers and fathers have been cycled through the lockdown state. Unless, of course, that class doesn't get something -- when its candidate, Gore, loses, then they come out shrieking. Where was that shrieking when Gore and his boss were presiding over the sharpening of laws to imprison more people! Or calmly let neighborhoods slip into the maws of the penal system? When you build your house of virtue on the backs of the classe laborieuse et dangereuse, eventually it will tumble down. And before it does, a pervasive, unconscious sense of the hypocrisy of the whole exercise will become the norm -- feeding into the most reactionary currents abroad in the country, as well as demoralizing the most progressive segment.
So I guess this is my deal. I think we really are living in the Foucaultian nightmare.
Wednesday, November 20, 2002
Remora
The Justice department scored another smashing triumph over that unnamed colluder of all terrorisms, your constitutional rights, today. According to the NYT, Judges Ralph B. Guy of the United States Court of Appeals for the Sixth Circuit; Edward Leavy of the Court of Appeals for the Ninth Circuit; and Laurence H. Silberman of the Court of Appeals for the District of Columbia Circuit, who were all appointed by Chief Justice William H. Rehnquist of the Supreme Court and make up an entity grandiosely called the United States Foreign Intelligence Surveillance Court of Review, overturned the first ruling against the government's wiretap request in an 'intelligence' investigation ever by a special secret lower court, which bears the bogus moniker of Foreign Intelligence Surveillance Act Court.
Now, LI's question is, how did these Kangaroo Courts come into existence? We are always ready, on this site, to bash Bush. But it turns out the Bush Justice department is merely magnifying trends that started in the previous administration, with the US PATRIOT act merely the enhanced, special effects version of Clinton's own anti-terrorism legislation. There's a fascinating review of the Kangaroo Intelligence Malarky courts by Patrick Poole here. The Courts were instituted under the Ford administration. Ford was, apparently, terribly afraid that the intelligence infrastructure was being hurt by the Church committee. In Poole's words:
"The FISA bill was a product of closed-door negotiations lasting several months between legislators and the Justice Department. Senator Edward Kennedy (D-MA), who had attempted to regulate the power of warrantless surveillance in four different sessions, sponsored the FISA legislation. The FISC concept was a compromise between legislators who wanted the FBI and National Security Agency (NSA), the only two agencies affected by the FISA statute, to follow the standard procedure for obtaining a court order required in criminal investigations and legislators. The federal agencies believed that they should be completely unfettered in conducting their foreign intelligence surveillance work inside US borders. Hence, the FISC was born."
The seventies was a regular cauldron of agencies being hatched to crawl across the American landscape in search of rights to devour. The orthodox historical account is that this was the decade in which the system of civil rights violations was unravelled, via the Church committee and several pieces of legislation mandating intelligence agencies to spill the secrets to selected congressional committees. LI has read several accounts of the era, and none mentioned FISC.
Poole, however, shows that FISC is not a monster summoned from the deep by Ashcroft in all of his evil. Rather, since the end of the Cold War -- during, that is, the administration of Clinton -- FISC went into overtime, ruling on twice the number of cases that were ruled on in Reagan's era. As always, the secret growth of some malign habit in one administration gets carried over to the next administration, regardless of party, to metastasize among the flags and desks. As for the vaunted independence of the judiciary -- a concept that can be disposed of only at the expense of all democratic processes -- forget about it! Yesterday's news! Montesquieu and all the rest of those guy never faced "pure evil," as we now like to call our opponents. Ah yes, "pure evil" calls for a whole bunch of special whoopass. So we go to FISC, which has the rigidity and integrity and independence of a wet strand of pasta. The reason FISC hit the news today was that the court, for the first time, questioned the nature of a case. That is, they decided that the over-ride of our rights in some "intelligence" case was really a criminal case. So the FISC appeals court was duly convened, and of course they trashed the idea that there are any rights that the Justice Department can't take away from us, in the name of National Security.
Where are all those Orwellites -- the Hitches and such, who are using Orwell as a prop to support an unjustifiable and unprovoked war? Perhaps they better come out of the corners. But of course -- they are too busy doing battle with such dangers to the republic, and all of Western Civ, as Susan Sontag. A few thousand dark skinned individuals being stripped of their rights by secret courts at the discretion of the Justice department doesn't really register on the list of current dangers.
The Justice department scored another smashing triumph over that unnamed colluder of all terrorisms, your constitutional rights, today. According to the NYT, Judges Ralph B. Guy of the United States Court of Appeals for the Sixth Circuit; Edward Leavy of the Court of Appeals for the Ninth Circuit; and Laurence H. Silberman of the Court of Appeals for the District of Columbia Circuit, who were all appointed by Chief Justice William H. Rehnquist of the Supreme Court and make up an entity grandiosely called the United States Foreign Intelligence Surveillance Court of Review, overturned the first ruling against the government's wiretap request in an 'intelligence' investigation ever by a special secret lower court, which bears the bogus moniker of Foreign Intelligence Surveillance Act Court.
Now, LI's question is, how did these Kangaroo Courts come into existence? We are always ready, on this site, to bash Bush. But it turns out the Bush Justice department is merely magnifying trends that started in the previous administration, with the US PATRIOT act merely the enhanced, special effects version of Clinton's own anti-terrorism legislation. There's a fascinating review of the Kangaroo Intelligence Malarky courts by Patrick Poole here. The Courts were instituted under the Ford administration. Ford was, apparently, terribly afraid that the intelligence infrastructure was being hurt by the Church committee. In Poole's words:
"The FISA bill was a product of closed-door negotiations lasting several months between legislators and the Justice Department. Senator Edward Kennedy (D-MA), who had attempted to regulate the power of warrantless surveillance in four different sessions, sponsored the FISA legislation. The FISC concept was a compromise between legislators who wanted the FBI and National Security Agency (NSA), the only two agencies affected by the FISA statute, to follow the standard procedure for obtaining a court order required in criminal investigations and legislators. The federal agencies believed that they should be completely unfettered in conducting their foreign intelligence surveillance work inside US borders. Hence, the FISC was born."
The seventies was a regular cauldron of agencies being hatched to crawl across the American landscape in search of rights to devour. The orthodox historical account is that this was the decade in which the system of civil rights violations was unravelled, via the Church committee and several pieces of legislation mandating intelligence agencies to spill the secrets to selected congressional committees. LI has read several accounts of the era, and none mentioned FISC.
Poole, however, shows that FISC is not a monster summoned from the deep by Ashcroft in all of his evil. Rather, since the end of the Cold War -- during, that is, the administration of Clinton -- FISC went into overtime, ruling on twice the number of cases that were ruled on in Reagan's era. As always, the secret growth of some malign habit in one administration gets carried over to the next administration, regardless of party, to metastasize among the flags and desks. As for the vaunted independence of the judiciary -- a concept that can be disposed of only at the expense of all democratic processes -- forget about it! Yesterday's news! Montesquieu and all the rest of those guy never faced "pure evil," as we now like to call our opponents. Ah yes, "pure evil" calls for a whole bunch of special whoopass. So we go to FISC, which has the rigidity and integrity and independence of a wet strand of pasta. The reason FISC hit the news today was that the court, for the first time, questioned the nature of a case. That is, they decided that the over-ride of our rights in some "intelligence" case was really a criminal case. So the FISC appeals court was duly convened, and of course they trashed the idea that there are any rights that the Justice Department can't take away from us, in the name of National Security.
Where are all those Orwellites -- the Hitches and such, who are using Orwell as a prop to support an unjustifiable and unprovoked war? Perhaps they better come out of the corners. But of course -- they are too busy doing battle with such dangers to the republic, and all of Western Civ, as Susan Sontag. A few thousand dark skinned individuals being stripped of their rights by secret courts at the discretion of the Justice department doesn't really register on the list of current dangers.
Monday, November 18, 2002
Remora
Out of the American mangle
The poor you don't need to have with you always. But if you do, and you give them credit (only 19.9% compounded monthly!), why, make their life a living hell for a generation. That was, and is, the message and substance of the bankruptcy "reform" act that died, again, in the Congress this week. Here's the Friday NYT:
"With a long-stalled bill to toughen bankruptcy laws declared dead today in Congress because of abortion politics, Senate Democrats and House Republicans were left to blame each other for the collapse of a measure that otherwise had broad bipartisan support and was championed by powerful corporate lobbyists."
The New York Times is long on the Homeric epithet -- you know, those things like "wine dark sea", or "swift footed Achilles", that fill in rhythmic spaces in the epic. The 'broad bipartisan support" and "championed by powerful corporate lobbyists" is the Times standard description of the bankruptcy act. LI would suggest, perhaps, corrupt enforcement of usurious practices similar in kind to that practiced by your average loan shark," but maybe the rhythm is off. What do you think?
LI has written about that undead bill before -- don't worry, it will be back. It was killed this time due to the ineffable mysteries of legislation: it got caught in a pr abortion rights -- right to life crossfire. LI has gone into the penetralia of the bill once too often before -- the way it penalizes the working class in extraordinary ways, the way it privileges paying back credit card debt over, say, paying child support, the way it sets up one more obstacle to blue collar redemption in an age in which every clintonoid politician tells us that we have to promote "flexible" job markets.
Open Secrets has a nice little summary of the issue and the parties in play. Here's their abridged version of what the legislation is about:
HOW THE INTEREST GROUPS SEE IT
Banks, credit card companies and credit unions have been leading the drive to rewrite of the nation�s bankruptcy laws. The American Financial Services Association, the trade group that represents the major credit card companies, joined other financial industry trade associations, Visa and Mastercard in 1998 to form the National Consumer Bankruptcy Coalition. The coalition has been the leading voice in favor of bankruptcy reform, contending that more than 30 percent of those filing bankruptcy have the ability to repay significant portions of their debts. But the financial sector isn�t the only group lobbying on this issue. Gambling interests, including some of Las Vegas� biggest casinos, also are pushing for a new bankruptcy law, according to their lobbying filings. Car dealers, retail stores and even entertainment companies also have weighed in on the issue, mostly in support of reform.
Consumer groups, including the Consumer Federation of America and Public Citizen, are lobbying against the bill. They contend Congress should crack down on the financial companies, which they criticize for handing out credit cards and credit lines indiscriminately. Additionally, they contend the legislation is too far-reaching and could ultimately do more harm to indebted Americans than limit fraud and abuse.
As things go in America, there is, of course, another story about credit -- its extension and forgiveness -- that clues us in to the central moral of our skewed times. For the slackers and the lags that gamble and renege, that buy their fancy cars and thumb their noses at GM, well, their hatefulness -- and we know how bad bad bad they are -- could be washed as white as snow if only they were , well, a little higher in the food chain. There, the terms of the loan are reversed. There's a nice story about the unpaid and forgiven loans of CEOs and their immediate underlings, and the board members that "govern" them, in Business 2.0 -- happily coinciding with the vote on the the credit card company wish list act. Here's the core graf:
"Roughly three-quarters of the nation's top 1,500 companies -- 1,133, to be precise -- have disclosed loans to insiders in recent regulatory filings, according to a study due to be published in November by the Corporate Library, a firm based in Portland, Maine, that analyzes corporate data and advocates greater accountability to shareholders. Of the companies that disclosed loans, 510 made them for the purchase of stock, for a handful of other uses such as housing and tax payments, or for purposes that weren't specified at all. The average loan was about $5.5 million."
My my, 5.5 million dollars. For that money, even a slag might start biting his knuckles and wondering how, oh how he was going to repay it. But the GMs and MBNA America Banks that are weaping oceans of tears over the stray sheep lying through their sheep teeth in bankruptcy courts thoughout the land have, at least, a good heart. These are essentially Christian corporations when it comes to their highest employees. Character, you know, attracts its own redemption. That is why owing such terrific amounts of the ready has not distracted our governors from the tiller. No, they bravely shoulder those five million dollar, or fifteen million dollar, or even four hundred million dollar debts. Yes, and now we can admire them more, because it is so hard, what with yachts and depreciating stocks and such, to come up with 5.5 mil to pay back their companies! oh, could this mean the loss of invaluable personnel? These giants of industry, sucked into the industrial waste with the rest of us! Gasp!
But gentle reader, don't weap for them. This is a big country. Here's another delicious graf:
"All told, loans to insiders in recent years may have reached more than $5 billion. Hundreds of millions of dollars in loans, perhaps as much as $1 billion, have been or will be forgiven, based on Securities and Exchange Commission records and estimates by corporate compensation experts. This suggests that companies will be eating losses from insider loans for years to come. But the more damaging legacy may be that the practice -- by helping fuel the explosion in CEO pay that is at the heart of much of today's outcry over corporate behavior -- will contribute to the perception that management has all too often lined its pockets at investors' expense, and to the public's distrust of how American companies are run."
Luckily, most of these loans aren't made with interest -- that would be oh so gross. I mean, we are talking about some of america's best and brightest -- interest is something they collect, darling, not something they should be forced to pay out. But that the rate of non-payment is 20 percent -- now, that is something, ain't it?
The poster boy for corporate loans in the King article is from Microsoft. Meet Rick Belluzzo:
"Early in September, Microsoft (MSFT) had a small confession to make. Back in December 2000, the company had lent its president, Rick Belluzzo, $15 million, taking some of his stock options as collateral. Though the options were underwater and had no value at the time, Microsoft figured its stock would eventually go up. But by last August, when Belluzzo resigned, the options were even further submerged. So the software giant forgave the loan -- it had no choice under the deal Belluzzo had struck -- charged off the $15 million, and said its belated disclosure was "appropriate" because the loan was really just an "advance." "
Now, to be fair, our legislature has officially outlawed insider loans of the Belluzzo type. The Sarbanes-Oxley act definitely puts them under bar. This will call for a lot of semantic ingenuity on the part of corporate lawyers. In the meantime, the bankruptcy bill will rise again. You can MBNA bank on it!
Out of the American mangle
The poor you don't need to have with you always. But if you do, and you give them credit (only 19.9% compounded monthly!), why, make their life a living hell for a generation. That was, and is, the message and substance of the bankruptcy "reform" act that died, again, in the Congress this week. Here's the Friday NYT:
"With a long-stalled bill to toughen bankruptcy laws declared dead today in Congress because of abortion politics, Senate Democrats and House Republicans were left to blame each other for the collapse of a measure that otherwise had broad bipartisan support and was championed by powerful corporate lobbyists."
The New York Times is long on the Homeric epithet -- you know, those things like "wine dark sea", or "swift footed Achilles", that fill in rhythmic spaces in the epic. The 'broad bipartisan support" and "championed by powerful corporate lobbyists" is the Times standard description of the bankruptcy act. LI would suggest, perhaps, corrupt enforcement of usurious practices similar in kind to that practiced by your average loan shark," but maybe the rhythm is off. What do you think?
LI has written about that undead bill before -- don't worry, it will be back. It was killed this time due to the ineffable mysteries of legislation: it got caught in a pr abortion rights -- right to life crossfire. LI has gone into the penetralia of the bill once too often before -- the way it penalizes the working class in extraordinary ways, the way it privileges paying back credit card debt over, say, paying child support, the way it sets up one more obstacle to blue collar redemption in an age in which every clintonoid politician tells us that we have to promote "flexible" job markets.
Open Secrets has a nice little summary of the issue and the parties in play. Here's their abridged version of what the legislation is about:
HOW THE INTEREST GROUPS SEE IT
Banks, credit card companies and credit unions have been leading the drive to rewrite of the nation�s bankruptcy laws. The American Financial Services Association, the trade group that represents the major credit card companies, joined other financial industry trade associations, Visa and Mastercard in 1998 to form the National Consumer Bankruptcy Coalition. The coalition has been the leading voice in favor of bankruptcy reform, contending that more than 30 percent of those filing bankruptcy have the ability to repay significant portions of their debts. But the financial sector isn�t the only group lobbying on this issue. Gambling interests, including some of Las Vegas� biggest casinos, also are pushing for a new bankruptcy law, according to their lobbying filings. Car dealers, retail stores and even entertainment companies also have weighed in on the issue, mostly in support of reform.
Consumer groups, including the Consumer Federation of America and Public Citizen, are lobbying against the bill. They contend Congress should crack down on the financial companies, which they criticize for handing out credit cards and credit lines indiscriminately. Additionally, they contend the legislation is too far-reaching and could ultimately do more harm to indebted Americans than limit fraud and abuse.
As things go in America, there is, of course, another story about credit -- its extension and forgiveness -- that clues us in to the central moral of our skewed times. For the slackers and the lags that gamble and renege, that buy their fancy cars and thumb their noses at GM, well, their hatefulness -- and we know how bad bad bad they are -- could be washed as white as snow if only they were , well, a little higher in the food chain. There, the terms of the loan are reversed. There's a nice story about the unpaid and forgiven loans of CEOs and their immediate underlings, and the board members that "govern" them, in Business 2.0 -- happily coinciding with the vote on the the credit card company wish list act. Here's the core graf:
"Roughly three-quarters of the nation's top 1,500 companies -- 1,133, to be precise -- have disclosed loans to insiders in recent regulatory filings, according to a study due to be published in November by the Corporate Library, a firm based in Portland, Maine, that analyzes corporate data and advocates greater accountability to shareholders. Of the companies that disclosed loans, 510 made them for the purchase of stock, for a handful of other uses such as housing and tax payments, or for purposes that weren't specified at all. The average loan was about $5.5 million."
My my, 5.5 million dollars. For that money, even a slag might start biting his knuckles and wondering how, oh how he was going to repay it. But the GMs and MBNA America Banks that are weaping oceans of tears over the stray sheep lying through their sheep teeth in bankruptcy courts thoughout the land have, at least, a good heart. These are essentially Christian corporations when it comes to their highest employees. Character, you know, attracts its own redemption. That is why owing such terrific amounts of the ready has not distracted our governors from the tiller. No, they bravely shoulder those five million dollar, or fifteen million dollar, or even four hundred million dollar debts. Yes, and now we can admire them more, because it is so hard, what with yachts and depreciating stocks and such, to come up with 5.5 mil to pay back their companies! oh, could this mean the loss of invaluable personnel? These giants of industry, sucked into the industrial waste with the rest of us! Gasp!
But gentle reader, don't weap for them. This is a big country. Here's another delicious graf:
"All told, loans to insiders in recent years may have reached more than $5 billion. Hundreds of millions of dollars in loans, perhaps as much as $1 billion, have been or will be forgiven, based on Securities and Exchange Commission records and estimates by corporate compensation experts. This suggests that companies will be eating losses from insider loans for years to come. But the more damaging legacy may be that the practice -- by helping fuel the explosion in CEO pay that is at the heart of much of today's outcry over corporate behavior -- will contribute to the perception that management has all too often lined its pockets at investors' expense, and to the public's distrust of how American companies are run."
Luckily, most of these loans aren't made with interest -- that would be oh so gross. I mean, we are talking about some of america's best and brightest -- interest is something they collect, darling, not something they should be forced to pay out. But that the rate of non-payment is 20 percent -- now, that is something, ain't it?
The poster boy for corporate loans in the King article is from Microsoft. Meet Rick Belluzzo:
"Early in September, Microsoft (MSFT) had a small confession to make. Back in December 2000, the company had lent its president, Rick Belluzzo, $15 million, taking some of his stock options as collateral. Though the options were underwater and had no value at the time, Microsoft figured its stock would eventually go up. But by last August, when Belluzzo resigned, the options were even further submerged. So the software giant forgave the loan -- it had no choice under the deal Belluzzo had struck -- charged off the $15 million, and said its belated disclosure was "appropriate" because the loan was really just an "advance." "
Now, to be fair, our legislature has officially outlawed insider loans of the Belluzzo type. The Sarbanes-Oxley act definitely puts them under bar. This will call for a lot of semantic ingenuity on the part of corporate lawyers. In the meantime, the bankruptcy bill will rise again. You can MBNA bank on it!
Friday, November 15, 2002
Remora
LI finds discussions of "saving" the Democratic party repellent and boring. Who cares? The DC press is, of course, in hyperdrive about the elections, but that is because politics is their industry. Still, we've been following the discussion between Robert Reich and Joe Klein at Slate, partly because these two are typical DC-kabuki types. The ritual entrances. The stereotypical phrases. The rigid decorum, the predictable plot. Without, we should say, plumbing any of the deep sources of kabuki's beauty -- the body's presence to itself as a drama of obstruction and annihilation, passion as a disruption on the surface of expression, etc.
Klein, in particular, illustrates the convention of hypocrisy that makes political discourse, as it is practiced by the op ed set, so off-putting.
This is how Klein starts out:
"Some say move left. Some say move right. Both are right and both are wrong. If we're to have a vaguely interesting national debate, the Democrats have to move forward�away from the boring, tiny, and tactical issues, and language, and interest groups that the party has championed in recent years. This will mean a change in style as well as content. Above all, it will mean an extremely risky change in focus from the beloved and reliable geezers to the edgy, cynical, apathetic young people. The electorate has to be expanded. But the most valuable cache of votes isn't to be had in the poor neighborhoods�as admirable as such efforts may be�it is to be found on the college campuses, where the next generation of activists lives. We can discuss the policy details over the next few days."
So, what is the premise here? That Klein is going to give us the technique by which the Democrats can win elections. But what he is actually doing? He is trying to influence the party to represent his point of view. In DC talk, when that point of view comes from, say, a teacher's union rep, it is known as special interest. As if there were some disinterested point of view. And as if, hey, the political pundit set represents that disinterestedness. When Robert Reich replies to Klein with his prescription for the Democratic Party -- which is, basically, to represent Robert Reich's lefty point of view vigorously -- this is how Klein replies:
"You mock moderates, call them Republicans-Lite. But, to my mind --and I'm a flaming moderate - the best new ideas have come from the middle of the spectrum in recent years. In domestic policy, it was the idea that centralized, industrial-era bureaucratic systems are too rigid and too expensive (urban school districts, for example); it's better to give individuals money -�tax credits, vouchers, whatever you want to call it -and allow them to make their own choices on health care, housing, prescription drugs, day care, schooling, and so forth. You were a pioneer in the field, Bob, with your voucherized job training and retraining program at the Labor Department. The reactionary left opposes this idea (the AFL-CIO wasn't too hot for your program, if I recall). The Republicans pay lip service to "empowerment" but don't want to actually pay money for it. The progressive middle says: Fund it amply, monitor it, regulate it - but do it. (By the way, tax disincentives are a good idea, too: I'd favor a cigarette-level tax on bullets, for example; I would tax corporations on their "externalities" - the social and environmental disruptions they cause -- not their profits.)
In foreign policy, the basic idea is global citizenship: American leadership -- with lots and lots of quiet diplomacy and consultation -- in organizing collective action against terrorists and rogue governments, against environmental depredation, against the transnational efforts of corporations to escape taxation and of criminal combines to escape the law, and the free flow of goods, services, information, and, to the greatest possible extent, people."
Now, what is this discussion really about? It isn't about how Democrats can rebuild their party, it is about molding a party to one's own beliefs. LI thinks that is honorable. LI thinks the dishonor comes in the pretense that one is simply trying to "save" the Democratic party. It is this third way bull crap. LI doesn't vote for a faction just because it is a faction. Nobody does. The technicians who "analyze" politics -- the Broders, the Kleins, the Barneses, etc. -- are really just importing their ideas into politics, under the pretense that their ideas represent the 'center' -- represent the average American voter.
Well, LI is unrepresentative of the average. Our motto is: screw the average. If you look at this country and you say, hey, we are rich enough to shed six trillion dollars worth of wealth in the stock market and still buy record numbers of cars, so we are rich enough to design a national health care system, then you work for that through a number of modalities. A faction exists as one in a set of mechanisms of suasion. And who cares if you run this goal through the Republicans or the Democrats? The point is the goal.
Now, if Klein doesn't like national health insurance, fine. But there is no reason that the Democratic party should abandon national health insurance. Certainly the reason can't be that it is "unpopular" -- the whole point is to make it popular. And, contra Klein, that happens all the time, as it should. Our two big factions exist to make ideas that the guy selling cigs at the Tenneco isn't entertainng at the moment entertain-able. Look how the abolition of inheritance taxes was made popular. Or how invading Iraq was made popular. This is what factions are for. It is about struggle. So the first task of the Reichs in the Democratic party, it seems to me, is to unmask the language of consensus for what it is: the language of position taking. And deal with it as such.
LI finds discussions of "saving" the Democratic party repellent and boring. Who cares? The DC press is, of course, in hyperdrive about the elections, but that is because politics is their industry. Still, we've been following the discussion between Robert Reich and Joe Klein at Slate, partly because these two are typical DC-kabuki types. The ritual entrances. The stereotypical phrases. The rigid decorum, the predictable plot. Without, we should say, plumbing any of the deep sources of kabuki's beauty -- the body's presence to itself as a drama of obstruction and annihilation, passion as a disruption on the surface of expression, etc.
Klein, in particular, illustrates the convention of hypocrisy that makes political discourse, as it is practiced by the op ed set, so off-putting.
This is how Klein starts out:
"Some say move left. Some say move right. Both are right and both are wrong. If we're to have a vaguely interesting national debate, the Democrats have to move forward�away from the boring, tiny, and tactical issues, and language, and interest groups that the party has championed in recent years. This will mean a change in style as well as content. Above all, it will mean an extremely risky change in focus from the beloved and reliable geezers to the edgy, cynical, apathetic young people. The electorate has to be expanded. But the most valuable cache of votes isn't to be had in the poor neighborhoods�as admirable as such efforts may be�it is to be found on the college campuses, where the next generation of activists lives. We can discuss the policy details over the next few days."
So, what is the premise here? That Klein is going to give us the technique by which the Democrats can win elections. But what he is actually doing? He is trying to influence the party to represent his point of view. In DC talk, when that point of view comes from, say, a teacher's union rep, it is known as special interest. As if there were some disinterested point of view. And as if, hey, the political pundit set represents that disinterestedness. When Robert Reich replies to Klein with his prescription for the Democratic Party -- which is, basically, to represent Robert Reich's lefty point of view vigorously -- this is how Klein replies:
"You mock moderates, call them Republicans-Lite. But, to my mind --and I'm a flaming moderate - the best new ideas have come from the middle of the spectrum in recent years. In domestic policy, it was the idea that centralized, industrial-era bureaucratic systems are too rigid and too expensive (urban school districts, for example); it's better to give individuals money -�tax credits, vouchers, whatever you want to call it -and allow them to make their own choices on health care, housing, prescription drugs, day care, schooling, and so forth. You were a pioneer in the field, Bob, with your voucherized job training and retraining program at the Labor Department. The reactionary left opposes this idea (the AFL-CIO wasn't too hot for your program, if I recall). The Republicans pay lip service to "empowerment" but don't want to actually pay money for it. The progressive middle says: Fund it amply, monitor it, regulate it - but do it. (By the way, tax disincentives are a good idea, too: I'd favor a cigarette-level tax on bullets, for example; I would tax corporations on their "externalities" - the social and environmental disruptions they cause -- not their profits.)
In foreign policy, the basic idea is global citizenship: American leadership -- with lots and lots of quiet diplomacy and consultation -- in organizing collective action against terrorists and rogue governments, against environmental depredation, against the transnational efforts of corporations to escape taxation and of criminal combines to escape the law, and the free flow of goods, services, information, and, to the greatest possible extent, people."
Now, what is this discussion really about? It isn't about how Democrats can rebuild their party, it is about molding a party to one's own beliefs. LI thinks that is honorable. LI thinks the dishonor comes in the pretense that one is simply trying to "save" the Democratic party. It is this third way bull crap. LI doesn't vote for a faction just because it is a faction. Nobody does. The technicians who "analyze" politics -- the Broders, the Kleins, the Barneses, etc. -- are really just importing their ideas into politics, under the pretense that their ideas represent the 'center' -- represent the average American voter.
Well, LI is unrepresentative of the average. Our motto is: screw the average. If you look at this country and you say, hey, we are rich enough to shed six trillion dollars worth of wealth in the stock market and still buy record numbers of cars, so we are rich enough to design a national health care system, then you work for that through a number of modalities. A faction exists as one in a set of mechanisms of suasion. And who cares if you run this goal through the Republicans or the Democrats? The point is the goal.
Now, if Klein doesn't like national health insurance, fine. But there is no reason that the Democratic party should abandon national health insurance. Certainly the reason can't be that it is "unpopular" -- the whole point is to make it popular. And, contra Klein, that happens all the time, as it should. Our two big factions exist to make ideas that the guy selling cigs at the Tenneco isn't entertainng at the moment entertain-able. Look how the abolition of inheritance taxes was made popular. Or how invading Iraq was made popular. This is what factions are for. It is about struggle. So the first task of the Reichs in the Democratic party, it seems to me, is to unmask the language of consensus for what it is: the language of position taking. And deal with it as such.
Wednesday, November 13, 2002
Remora
LI, having liberally annointed our back molars with a codeine, or benzocodeine, salve, would like to do a piece on today's big news story. Sorry, the consideration of time as a component of picturing will have to be postponed -- we aren't Boethius, nor were meant to be...
Onto the big story, which as my readers will know by now, is the on-going collapse of National Century Financial Services. Oh, you thought it was the bread and circuses, or rather war games, thing going on in D.C.?
No, today we have an excellent example of why the press can calmly talk about how the "wave of corporate scandals" has broken. That's because nobody wants to talk about it. Plus, no star is involved in this scandal.
The story is in the biz section of the Times.
"The rapid collapse of National Century Financial Enterprises Inc., a large provider of cash flow financing, is sending hundreds of health care companies and their affiliates scrambling to avoid big financial trouble."
Cash flow financing means this. The thirty thousand dollars that X is paying to have his prostate operated on is out there in segments. The insurance is paying for it, but the deductible means that X has to pay for it on credit. Here comes NCF, then, offering to aggregate such debts and securitize them, much as mortgages are securitized. Beautiful, right?
"Two of National Century's largest clients have sought Chapter 11 protection from their creditors, while the dubious status of two of the company's bond deals worth $3.3 billion has set off a spate of threatened legal action against National Century, J. P. Morgan Chase, Bank One and other firms involved in the asset-backed securities. Amid the meltdown, National Century's chairman and chief executive, Lance K. Poulsen, quit both posts on Friday and left the company, which is based in Dublin, Ohio."
Ah, there's a little backstory with this Lance Poulson. And with National Century. But first, here's the fishiness in this creature from the depth. This will tell you pretty much all you need to know about the state of corporate creative financing in this "reform" period:
"This complex brew [of bonds based on hospital receivables] began to boil over in May when the Fitch rating agency warned that it might downgrade National Century bonds, which it did in July. It cited "increasing levels of defaulted and rejected receivables" and a lack of information from the company. This made it harder for National Century to issue new bonds, and the company soon ran into trouble finding the money to pay its clients.
In response, National Century began taking money from the reserve funds of two bond trusts � NPF VI and NPF XII. When J. P. Morgan, as trustee for NPF VI, asked for documentation as to how this was acceptable, National Century stopped taking money from NPF VI and eventually replaced it.
But the trustee of NPF XII, Bank One, is said to have made no such demand, so the company took about $300 million from that reserve fund, draining it to almost zero. At first, bondholders assumed the money went to buy new receivables. But in their motion filed in the Franklin County Court of Pleas in Columbus, Ohio, they say Mr. Poulsen admitted using it for other purposes."
Well, well. It turns out that junior, who flunked eighth grade mass, could have done better than bought the mortgage theory. He could have pointed out that hospital receivables are much more volatile, subject to a much higher percentage of defaults and restructurings. And traditionally, such volatility attracts, well, the loan shark -- because sharks are the type to be able to cover their bets with high interest and the threat of immediate violence following non-payment. Mr. Poulson isn't exactly a loan shark, but according to this account by Doug Noland (who writes the Credit Bubble report for Safehaven, a website for contrarian investors), the history of National Century is spotted with shady characters -- or should we say fly specked?
First, the sentence about the use of NPFXII funds in the Times story is confusing. It implies that the bondholders would be fine with the draining of the reserve fund to invest in further receivables. But of course, that is not what a reserve fund is for -- it is to serve as a barrier against the risk of defaults.
"From Dow Jones� David Feldheim: �No ratings Rx appears in sight for National Century Financial Enterprises (NCFE) amid concerns about revenue streams backing some of its securitizations. In the 11-plus years since its inception, NCFE has become the largest financier of healthcare receivables, according to its spokesman Jim Nickell. Over this period NCFE has securitized in excess of $6 billion of healthcare receivables, and it has bought substantially more than that from providers. It has also drawn recent scrutiny from the ratings agencies who rate those securitizations. Fitch Ratings said over the weekend that it has been informed by interested parties that NCFE directed the trustee to reroute certain funds intended for the NPF XII reserve accounts in order to fund the purchase of new receivables. �The company's apparent willingness to disregard the documents and commit such a serious breach, causes Fitch to question NCFE�s viability.��
Second, how did this company get so big, and why has nobody heard of it? One of the results of "restructuring" investment regulations in the eighties and nineties is that everybody gets to play investment bank. Without any pesky regulators looking at what you are doing. So anywhere cash is being transferred, somebody, somewhere, is trying to get a piece of that. Securitizing, slicing and dicing issues -- it is a wondrous way to make money, as long as you aren't on the other end when the stuff starts coming apart.
According to Noland, the company, founded in 91, has ties to a group of other companies, many of them connected to one Steven Scott. Scott ran a company called PhyAmerica Physician Group, which was delisted by the NYSE when its stock plummeted to pennies. PhyAmerica seems to be running on money loaned to it by NCF. In 2000, this became an issue, as stockholders sued Scott and Poulson for, as they put it, draining the company: "They alleged that Scott and Lance K. Poulsen, National Century�s president, had an agreement: Poulsen would fund Scott�s spending while Scott �looks the other way while Poulsen improperly diverts the company�s cash into NCFE�s coffers.� Even as the company�s finances deteriorated, PhyAmerica bought one corporate jet for $6.6 million and leased another for $848,000 -- expenses that benefited Scott because he owned the aviation company that provided the jets, shareholders said.� Also from the article: �There was a report on �60 Minutes� accusing�Dr. Steven Scott, of hiring doctors who had been disciplined or sued for malpractice.�
Forbes profiled the 'bearded" Poulson, and found him to be sanguine about NCFE -- at least in October. From Risky Business, on Friday October 11, By Seth Lubove:
"In between the court appearances Poulsen has thrived in his niche, making himself and his partners comfortably wealthy, though in ways that might raise eyebrows among traditional lenders. Poulsen, his wife and other company executives, for instance, have occasionally taken personal stakes in NCFE's borrowers. In addition to lending $107 million to something called Med Diversified as of the end of last year, NCFE also owns 6% of the company, or 5 million shares, while Poulsen personally controls another 109,000 shares of preferred stock. Med Diversified also acquired a company that was 22% owned by Donald Ayers, an NCFE cofounder and Med Diversified director. Med Diversified is dependent on NCFE in more ways than one. It derived $4 million in revenues in its 2001 fiscal year from NCFE for various "consulting services," in addition to being owed another $4.3 million in unpaid invoices from NCFE. Another $2 million in revenues during the same period came from an outfit called Millennium Healthcare, a company owned "indirectly" at the time by NCFE. Med Diversified fared badly anyway. It was delisted from the American Stock Exchange in July after losing $605 million in the past two fiscal years on sales of $296 million."
Medicine, attracting only the most sterling kind of entrepreneur! Noland's Safe Haven articule digs up some other intricate connections between NCF, Poulson, and various schemes, in twisted deals that have the involute structure of Jacobean drama, without the pretty poetry. This comes on the heels of two other medical scandals: one at Health South, and one at Tenet. Well, if hospitals start going bankrupt due to this Ohio case, the newspapers might even have to pay attention to it. We'll see.
LI, having liberally annointed our back molars with a codeine, or benzocodeine, salve, would like to do a piece on today's big news story. Sorry, the consideration of time as a component of picturing will have to be postponed -- we aren't Boethius, nor were meant to be...
Onto the big story, which as my readers will know by now, is the on-going collapse of National Century Financial Services. Oh, you thought it was the bread and circuses, or rather war games, thing going on in D.C.?
No, today we have an excellent example of why the press can calmly talk about how the "wave of corporate scandals" has broken. That's because nobody wants to talk about it. Plus, no star is involved in this scandal.
The story is in the biz section of the Times.
"The rapid collapse of National Century Financial Enterprises Inc., a large provider of cash flow financing, is sending hundreds of health care companies and their affiliates scrambling to avoid big financial trouble."
Cash flow financing means this. The thirty thousand dollars that X is paying to have his prostate operated on is out there in segments. The insurance is paying for it, but the deductible means that X has to pay for it on credit. Here comes NCF, then, offering to aggregate such debts and securitize them, much as mortgages are securitized. Beautiful, right?
"Two of National Century's largest clients have sought Chapter 11 protection from their creditors, while the dubious status of two of the company's bond deals worth $3.3 billion has set off a spate of threatened legal action against National Century, J. P. Morgan Chase, Bank One and other firms involved in the asset-backed securities. Amid the meltdown, National Century's chairman and chief executive, Lance K. Poulsen, quit both posts on Friday and left the company, which is based in Dublin, Ohio."
Ah, there's a little backstory with this Lance Poulson. And with National Century. But first, here's the fishiness in this creature from the depth. This will tell you pretty much all you need to know about the state of corporate creative financing in this "reform" period:
"This complex brew [of bonds based on hospital receivables] began to boil over in May when the Fitch rating agency warned that it might downgrade National Century bonds, which it did in July. It cited "increasing levels of defaulted and rejected receivables" and a lack of information from the company. This made it harder for National Century to issue new bonds, and the company soon ran into trouble finding the money to pay its clients.
In response, National Century began taking money from the reserve funds of two bond trusts � NPF VI and NPF XII. When J. P. Morgan, as trustee for NPF VI, asked for documentation as to how this was acceptable, National Century stopped taking money from NPF VI and eventually replaced it.
But the trustee of NPF XII, Bank One, is said to have made no such demand, so the company took about $300 million from that reserve fund, draining it to almost zero. At first, bondholders assumed the money went to buy new receivables. But in their motion filed in the Franklin County Court of Pleas in Columbus, Ohio, they say Mr. Poulsen admitted using it for other purposes."
Well, well. It turns out that junior, who flunked eighth grade mass, could have done better than bought the mortgage theory. He could have pointed out that hospital receivables are much more volatile, subject to a much higher percentage of defaults and restructurings. And traditionally, such volatility attracts, well, the loan shark -- because sharks are the type to be able to cover their bets with high interest and the threat of immediate violence following non-payment. Mr. Poulson isn't exactly a loan shark, but according to this account by Doug Noland (who writes the Credit Bubble report for Safehaven, a website for contrarian investors), the history of National Century is spotted with shady characters -- or should we say fly specked?
First, the sentence about the use of NPFXII funds in the Times story is confusing. It implies that the bondholders would be fine with the draining of the reserve fund to invest in further receivables. But of course, that is not what a reserve fund is for -- it is to serve as a barrier against the risk of defaults.
"From Dow Jones� David Feldheim: �No ratings Rx appears in sight for National Century Financial Enterprises (NCFE) amid concerns about revenue streams backing some of its securitizations. In the 11-plus years since its inception, NCFE has become the largest financier of healthcare receivables, according to its spokesman Jim Nickell. Over this period NCFE has securitized in excess of $6 billion of healthcare receivables, and it has bought substantially more than that from providers. It has also drawn recent scrutiny from the ratings agencies who rate those securitizations. Fitch Ratings said over the weekend that it has been informed by interested parties that NCFE directed the trustee to reroute certain funds intended for the NPF XII reserve accounts in order to fund the purchase of new receivables. �The company's apparent willingness to disregard the documents and commit such a serious breach, causes Fitch to question NCFE�s viability.��
Second, how did this company get so big, and why has nobody heard of it? One of the results of "restructuring" investment regulations in the eighties and nineties is that everybody gets to play investment bank. Without any pesky regulators looking at what you are doing. So anywhere cash is being transferred, somebody, somewhere, is trying to get a piece of that. Securitizing, slicing and dicing issues -- it is a wondrous way to make money, as long as you aren't on the other end when the stuff starts coming apart.
According to Noland, the company, founded in 91, has ties to a group of other companies, many of them connected to one Steven Scott. Scott ran a company called PhyAmerica Physician Group, which was delisted by the NYSE when its stock plummeted to pennies. PhyAmerica seems to be running on money loaned to it by NCF. In 2000, this became an issue, as stockholders sued Scott and Poulson for, as they put it, draining the company: "They alleged that Scott and Lance K. Poulsen, National Century�s president, had an agreement: Poulsen would fund Scott�s spending while Scott �looks the other way while Poulsen improperly diverts the company�s cash into NCFE�s coffers.� Even as the company�s finances deteriorated, PhyAmerica bought one corporate jet for $6.6 million and leased another for $848,000 -- expenses that benefited Scott because he owned the aviation company that provided the jets, shareholders said.� Also from the article: �There was a report on �60 Minutes� accusing�Dr. Steven Scott, of hiring doctors who had been disciplined or sued for malpractice.�
Forbes profiled the 'bearded" Poulson, and found him to be sanguine about NCFE -- at least in October. From Risky Business, on Friday October 11, By Seth Lubove:
"In between the court appearances Poulsen has thrived in his niche, making himself and his partners comfortably wealthy, though in ways that might raise eyebrows among traditional lenders. Poulsen, his wife and other company executives, for instance, have occasionally taken personal stakes in NCFE's borrowers. In addition to lending $107 million to something called Med Diversified as of the end of last year, NCFE also owns 6% of the company, or 5 million shares, while Poulsen personally controls another 109,000 shares of preferred stock. Med Diversified also acquired a company that was 22% owned by Donald Ayers, an NCFE cofounder and Med Diversified director. Med Diversified is dependent on NCFE in more ways than one. It derived $4 million in revenues in its 2001 fiscal year from NCFE for various "consulting services," in addition to being owed another $4.3 million in unpaid invoices from NCFE. Another $2 million in revenues during the same period came from an outfit called Millennium Healthcare, a company owned "indirectly" at the time by NCFE. Med Diversified fared badly anyway. It was delisted from the American Stock Exchange in July after losing $605 million in the past two fiscal years on sales of $296 million."
Medicine, attracting only the most sterling kind of entrepreneur! Noland's Safe Haven articule digs up some other intricate connections between NCF, Poulson, and various schemes, in twisted deals that have the involute structure of Jacobean drama, without the pretty poetry. This comes on the heels of two other medical scandals: one at Health South, and one at Tenet. Well, if hospitals start going bankrupt due to this Ohio case, the newspapers might even have to pay attention to it. We'll see.
Tuesday, November 12, 2002
Notice
I am not going to be as regular in posting this week, due to a toothache. Actually, three of my back teeth are in death star mode, causing me to suffer the pangs of hell in regular cycles. Like after I eat. Alas, having no money, what is LI to do? Well, this morning we called up the Texas Dental Examiners, who referred us to Texans for Healthy Smiles, who referred us to a clinic that will supposedly process us through the dread labyrinth of paperwork so that we can actually get these teeth extracted. Whether this will work or not is hard to say. If it doesn't, we'll rob a store and give ourselves up, and enjoy the amenities of prison dentistry. Anything to get rid of these molesting molars.
In the meantime, here's a thought from our friend, Tom. He sent us a little Moby Dick like medley of quotes, except not about the great fish. Here's the joke on the board above his office desk.
"The physicist Carl Friedrich von Weizacker told Heideggar the story of a man who spent all his day in a tavern. Asked why, the man replied that it was because of his wife: 'She talks and talks and talks and talks." He was asked, "What does she talk about?" He replied, "Ah, that she doesn't say." Heideggar is supposed to have said, "Yes, that is how it is."
I am not going to be as regular in posting this week, due to a toothache. Actually, three of my back teeth are in death star mode, causing me to suffer the pangs of hell in regular cycles. Like after I eat. Alas, having no money, what is LI to do? Well, this morning we called up the Texas Dental Examiners, who referred us to Texans for Healthy Smiles, who referred us to a clinic that will supposedly process us through the dread labyrinth of paperwork so that we can actually get these teeth extracted. Whether this will work or not is hard to say. If it doesn't, we'll rob a store and give ourselves up, and enjoy the amenities of prison dentistry. Anything to get rid of these molesting molars.
In the meantime, here's a thought from our friend, Tom. He sent us a little Moby Dick like medley of quotes, except not about the great fish. Here's the joke on the board above his office desk.
"The physicist Carl Friedrich von Weizacker told Heideggar the story of a man who spent all his day in a tavern. Asked why, the man replied that it was because of his wife: 'She talks and talks and talks and talks." He was asked, "What does she talk about?" He replied, "Ah, that she doesn't say." Heideggar is supposed to have said, "Yes, that is how it is."
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