Tag Archives: government

How did this happen?

Okay. So I’ve taken a break from literary stuff recently to focus on literacy. My own literacy. About finance. The 2008 financial crisis and OWS and everything has gotten me into the general ugliness of bureaucratic things and I want to fucking write about it. I’ve been studying history and economics with a small group of OWSers and at our last meeting we decided to each bring something to the group that relates to the question “how did this happen?” I’m going to bring this blog post. Consider it a term paper. Or something.The first thing we read in our group was part of the 2010 Senate subcommittee report on the financial crisis that came out of Carl Levin’s office. It’s awesome. Particularly the introduction. It says there (among other things) that banks and other financial companies treated their own clients as fucking counter-parties. They took people’s money, said “oh yeah, we’ll help you” and then used it to bet against them to make more money for themselves.Counterparties.

Turns out we encourage this: experiencing other people’s pain as pleasure. Some sadistic shit. Like, your mom gets cancer, can’t work, can’t pay her mortgage, and some meathead in a skyscraper is betting other meatheads (actually, the meathead is watching a machine bet other meatheads’ machines) that your mom won’t make her mortgage payment. The meathead is also buying insurance from other meatheads for himself just in case she does so that even if he loses his bet that your mom’s life will be fucked he’ll be in the black.

Always be in the fucking black. Always.

Our group discussed that for awhile. But then we got interested in how this happened historically. How did this moral horseshit become legal?

A friend mentioned a bill called the Glass-Steagall Act and sent us an article on it. Basically, our economy already went through this whole financial wasteland about 100 years ago (oh yeah, 1929, right…) when banks got into insurance and securities trading and became so big and interconnected with everyone’s money that it was dangerous for everyone. Glass-Steagall, passed in 1933, made it illegal for banks to get into that stuff. Put banking, securities, and insurance in “separate rooms.” But we couldn’t handle that. No. Over the next 60 years we picked at the scab, trying to let banks get big again and make more fucking money. There were commies! Chinese! We had to compete! Buy! Sell! Go! Now! Ahhhhh!

More fucking money. We need that shit. Seriously. Can’t breathe without it.

We finally ripped the rest of the scab off in 1999 when Phil Gramm, voted one of the 25 people to blame for the crisis, got a 90-8 vote in the Senate and a 362-57 vote in the House to full undo Glass-Steagall. He wanted to “modernize” our financial institutions. He wanted to deregulate. So banks could compete.

A few senators had their shit together at the time and basically prophesized what would happen. Byran Dorgan was the most badass, saying that the government would need to bail the bankers out and the public would lose all kinds of money just because some people wanted to make money. He gave this fucking incredible example from the 1987 Savings and Loans crisis:

Let me describe the ultimate perversion, the hood ornament of stupidity. The U.S. government owned nonperforming junk bonds in the Taj Mahal Casino. Let me say that again. The U.S. Government ended up owning nonperforming junk bonds in the Taj Mahal casino in Atlantic City. How did that happen? The savings and loans were able to buy junk bonds. The savings and loans went belly up. The junk bonds were not performing. And the U.S. Government ended up [having to buy] those junk bonds.

Fucking casinos. We have government casinos.
Dorgan went on to say that, around ten years from that moment (1999) we’d probably have to do the same damn thing and it would be the public paying for it…

Now imagine this: as tax dollars are spent buying casinos, hundreds of bank lobbyists pull up to Capitol Hill, the security guards checking their credentials. Citbank lobbyists and Bank of America lobbyists. Merrill Lynch and Morgan Stanley. All in all, $187.2 million from 1989-1999 went to legislators from people who wanted Gramm’s bill to pass. Russell Feingold said, “Lobbyists lined the halls outside the room where the conference met to reconcile the House and Senate versions of bill…that is standard procedure on Capitol Hill.”

Lo and behold, the bill passed 90-8 in the Senate, 362-57 in the house. That’s not just the number of people who took lobbying money and/or cowed to political threats from their PACs and parties and/or thought it was a nice idea to deregulate. That’s all the people in this country who elected these people to do all these things. Those numbers are everyone deciding all together to screw ourselves and everyone else to make some cash. And, let me say, it was the liberals that wanted to keep the old policies in place. Be conservative, said the progressives.

What the fuck does anything mean anymore.

So yeah, the conservative-progressives were right. Ten years went by and we had huge banks getting huger, taking on more risk, and fucking growing until no one knew what the fuck anyone was thinking anymore and the housing crisis happened. The government–which, by the way, is just you and me and everyone we know–bailed them out. And we basically handed Europe a hot steaming bowl of shit and said “Enjoy!” Now the commies really will bring us down. They own so much of our debt–the socialist-commie bastards–that if they fail then so do we.

It’s like we want to fucking die. Reading about this shit makes me think of people who want to kill themselves.

We’re getting to the end of this, I promise. Our OWS group discussed the history behind this ‘counterparty’ stuff with Glass-Steagall, but we still wanted to know: what’s the big idea here? What’s the ideology that makes this policy real? It’s not just legal. It’s not just lawmakers and lobbyists getting together and perpetually thinking to themselves “let’s just try to make a shit ton of money and fuck ourselves and our friends in the process.” There’s a fucking zeitgeist at work here.

The book that I think speaks the truth about the history of capitalism is Karl Polanyi’s The Great Transformation. It fucking rocks. There’s a part in there called “The Birth of the Liberal Creed” where he talks about a debate in the 1830s in England. (England invented all this shit, bee tee dubs.)

After they pretty much fabricated the three basic commodities–land, labor, capital–by looking at the world and saying “Oh yeah, I’m gonna use you real good,” they had things like unemployment and poverty to deal with. They also had these factories that they called the Satanic Mills. Yeah. Satanic Mills.
Anyway, the question in 1830 was: do we keep legislation to help protect people from the market? Is it better to threaten people with starvation and poverty or should we provide some kind of safety net? Should government be a mommy or a daddy?

Thing is, they’d tried that one time. Back in 1782 they tried giving out bread and subsidizing farmlands that got hit hard by price fluctuations. It was called the Speenhamland system. It didn’t work so well. So Edmund Burke and David Ricardo and a bunch of utilitarians cited that failure in the 1830 debate and they decided to be daddies. No protection. No safety net. They conjured images of Robinson Crusoe. Rugged individualism and all that. They amended the Poor Laws to help the “victims of improvement” (poor people) get back on their feet. How?

By not having any Poors Laws and telling them: if you don’t find a job and work and make money for yourself, no one will be here to help you. Sorry.

Polanyi says this was the birth of the ‘bootstraps’ mentality. It’s still around, you know. When people like Phil Gramm try to “modernize” our institutions by deregulating them and unleashing market forces on us while we’re just trying to get through our fucking lives every day–that’s the utilitarians speaking from 1830, being our Cultural Daddy, saying “No one is going to help you. You have to do it yourself. Being human means surviving and taking what you can when you can to provide for yourself and who you care about and fuck everyone else…” Of course this idea goes back to Adam Smith, who said that the division of labor and the social product are what’s most important when running a society; that regulation causes real disorder; that markets and exchanging are “natural” for humans…blah blah blah. The big idea is: it’s better in the long run for everyone if no one helps or cares about anyone unless they make you money.

Anyway. This has gone on too long already–both what you’re reading (if you’re still reading) and what it’s about. I’m still trying to fucking figure it out. If you have any ideas, let me know.

A Theory of Fiction

(1)

I’m sitting on the subway. I’m looking at my reflection in the window. It’s hazy and dirty and scarred by graffiti, but the window still presents a likeness–my image, sitting on the subway.

I see myself sitting there with others. A woman wears leopard-patterned leggings. A child plays a video game. A teenager reads a magazine. An old man reads a newspaper in a language I don’t recognize. I’m wearing whatever it is I’m wearing. I stare at all of us in the window to see us all there, together.

The train stops. A beautiful woman boards wearing a beret and a dark peacoat. She listens to headphones. Her skin is freckled and her hair curly. Her eyes are green. She grabs a metal pole and looks around the car, situating herself. She sees me seeing her. I look away. I find her reflection in the window.

Just as the doors close a man enters. He’s tall, wearing black pants and a black winter coat. He wears a knit cap. His eyes are low. He exhales heavily, looking around at us. He sees me seeing him. I look away. I find his reflection in the window.

The train screams through its tunnels beneath the city. I continue surveying the world in the mirror: the child looks up from his video game to kiss his mother, the old man falls asleep, the beautiful woman closes her eyes and nods her to the beat of a song playing on her headphones. The man-in-black’s coat is open. His eyes saccade back and forth. He’s readying himself for something. He keeps his hand in the breast pocket of his coat. Removing his hand for a fraction of a second, I see a gun’s black and silver handle.

The man in black reaches for the gun, stepping toward the child, the old man, and the beautiful woman. His hand goes towards the gun. But before he can grasp it, before anyone knows what’s about to happen, I stick my foot out and trip him. He falls, yelling. Everyone looks up. The gun slides out and arrives at the old man, who puts down his newspaper and takes the gun and points it at the man in black. “Don’t move,” he says. We call the police. The woman in leopard-print pants holds the man down. The police come and take the man in black away.

(2)

Fiction makes worlds in windows, reflections of events. Some writers write to gaze in wonder at themselves in the world. Some writers write to gaze in wonder at the world itself. Some writers write to gaze in wonder at what needs changing, either in themselves or in the world or both. The first is a narcissist. The second is a thalist. The third is a pragmatist.

The gods made Narcissus the most beautiful creature. Few resisted his looks. So when he saw himself in the reflection of a small pond’s surface he fell in love with himself. He couldn’t look away. He changed into a flower, the kind that grows at the edges of small reflective pools. Flowers are pretty, perennial, and have a valuable place in their ecologies. They die and grow again, serving their various purposes. Writers that gaze at themselves in their writing are similar, except they choose their fate. They have the option to look away but, for whatever reason, continue looking at themselves. The narcissist gazes in wonder at himself in the subway’s window, outlining his own face and outfit, thinking about his relation to the subway, to the others sitting around him, telling himself his own story. He’s so occupied with himself that doesn’t see the gun in the man-in-black’s jacket. He’s in danger, like the rest of the subway riders, except that he has the opportunity to manage that danger–to see the gun. Overwhelmed by his own beauty, the narcissist chooses not to put himself in the position to see the gun, or anything other than himself. He therefore cannot help himself or his fellow riders, though danger is imminent.

Thales was the first Greek philosopher. He was able to predict crop growths and solar eclipses; was an advisor to governments; was known widely for his intelligence. Plato tells the following story about him:

…one night Thales was gazing at the sky as he walked and fell into a ditch. A pretty servant girl lifted him out and said to him “How do you expect to understand what is going on up in the sky if you do not even see what is at your feet?”

The thalist writer gazes in wonder and falls into a ditch. She’s not lost in the beauty of her own image, but rather the beauty of the world around her. She’s so concerned with its truth, its extent, that she makes herself vulnerable to concrete disaster.  She produces great truths, but focuses on their form to such a degree that she loses the immediacy of its content. Having fallen in her ditch she is slow to react. On the subway she’s busy sketching the child’s form, his face buried in the screen of his video game; the leopard-pattern of the woman’s pants, its oranges and whites and browns and yellows; the wrinkles of the old man’s face, the sound his newspaper makes when it rustles; the beautiful woman’s green eyes, her peacoat, the rhythm of her music in sync with the tracks of the train. The thalist might not even see the man-in-black’s gun–she’s not looking for it. At some point she might get around to sketching his facial features and clothing and then see the gun’s handle, but time is a relevant factor. There’s a likelihood that she’ll see the gun, but given her attention to detail the chances aren’t high. Most likely, the thalist is too late. She fails to help herself and her fellow riders not because she wasn’t looking, but she wasn’t looking for a gun.

Pragmatism is an American philosophy. It assigns values to texts based on their “usefulness.” Peirce used usefulness to assign truth-values to scientific theories, claiming that theories are true if they’re useful to the scientific community; that is, if they “successfully lead” to other scientific ideas.  James used usefulness to assign truth-values to religious belief, claiming that beliefs are true if they’re useful to the believer; that is, if they “work” to help the believer live peacefully and with certainty in the world. Both these uses of usefulness de-emphasize an objective reality that exists “out there” and focus rather on what is here and now, the experiences of individuals and the concrete results of text in the world. The pragmatist writer isn’t self-obsessed, nor is she obsessed with the truth of the world in which she finds herself. She is concerned with what will be useful to her readers, what will “work” for them, what will “successfully lead” them to more meaningful and flourishing lives.  She is didactic in that she has ideas about what counts as a more flourishing life and is interested in telling others about these ideas. This may seem like hubris. However, her craft is modest: she presents an image, a story, ultimately an object of interpretation, a world-reflection within which readers are free to find their own meanings–not necessarily hers. But her goal is to help, and so her world is crafted with a vision of betterness, with the hope that the world can be a safer place for the humans living within it. She’s in a position to see the man-in-black’s gun and stick her foot out to trip him.

Each of these writers has virtues and vices. What looks like a gun might be an iPod, and the pragmatist may find herself tripping innocents. The narcissist may in fact be a superior beauty, whose looks deserve analysis. The thalist produces valuable truths, never committed to a moral side, and is safe from the volatile, even vain, question of what is right and wrong. Each of them are committed to reflection rather than blind following. They each choose to look into the window, think about what they see, and represent it to others. They aren’t committed to taking advantage of others for financial or emotional reasons. They aren’t tyrants. They should be praised for this.

Despite these common virtues, I value the pragmatist best among the writers. She is the modest artist looking for men-in-black, the guns in their jackets, and knows that tripping them up is the right thing to do.  We all want the best for the world in some way–if we didn’t it would be difficult to brush our teeth in good faith–and the pragmatist writer is most authentically committed to this desire.

This is my nascent opinion. I haven’t found perfect exemplars of each of these kinds of fiction. I’m open to suggestions. Though I do know that John Steinbeck’s The Moon is Down and Dave Eggers’s What is the What qualify as pragmatist fiction. The former is the one I think of first: It’s the story of a nameless town in northern Europe that successfully resists a foreign army’s attempt to occupy it. The book was written on commission from the CIA during World War II, translated into several European languages, and distributed covertly in small towns occupied by Nazi forces. The idea was this: if citizens read a story where people like them overcome occupiers, then they themselves would have greater confidence to do so.  This, to me, is the best kind of fiction.