“The long con that is breaking America”

Matt Taibbi, author of the new book Griftopia: Bubble Machines, Vampire Squids, and the Long Con that Is Breaking America, is clear about the role of class in the current crises of capitalism.

First, in causing the mortgage crisis:

When I first started covering the financial crisis I would go around the country and ask people about this stuff and nobody knew anything. Now, one out of five people understands what’s going on. It’s slowly getting there. But on the other hand, if you look at the foreclosure crisis and the way that’s being covered, there’s literally the same mis-coverage that we saw two years ago. There was a story in the Wall Street Journal last week where they’re basically blaming the lawyers who are working on behalf of people who don’t want to pay their mortgages for causing the foreclosure crisis. People believe this stuff. The problem with the mortgage crisis is that: you hear the word ‘mortgage’ and you don’t even want to listen. The Republicans were the only ones who were really loud about this: they said the reason everybody got a mortgage is because the government was forcing banks to lend to people. That wasn’t the real explanation. The real explanation was that the banks had figured out a way to take these subprime mortgages, chop them up into little bits, and then repackage them as AAA-rated investments and sell them to people who didn’t know what they were. It’s basically like selling oregano as weed. What’s the first thing you do when you find out you can get away with that? You go out and buy or grow more oregano.

Then, in the reporting of the crisis:

In other countries they have histories with revolutions and class movements. In America, people don’t like to think of themselves like being in a lower class. They all like to think of themselves as potential millionaires. So when these politicians get up and say “We need business and the producers to be free, in order to create jobs for everybody”—people think of themselves as being on the side of the rich guy. They don’t think of themselves in being in that other group. That’s the genius of the Tea Party—you take these people who are all themselves middle class or below, and you make them focus on poor minorities so they think they’re above somebody else.  . .

You’ve read A Tale of Two Cities—you don’t get that kind of burning, the-rich-are-real-assholes take on wealth in this country. We love wealth and we hate poor people. I know people who work in TV news who have actually been told to do stand-ups rather than put interviews with poor people on the air. We physically don’t want to look at them.

Taibbi also notes a change in the class aspects of journalism itself I hadn’t ever considered:

I grew up around journalists. In the 50s and 60s, Journalism wasn’t a profession. It wasn’t something you went to college for—it was really more of a trade. You had a lot of guys who came up working in newspapers at the copy desk, or delivery boys, and then they would somehow become reporters afterward and learn on the job. They tended to be working-class guys who had an attitude about power. They saw themselves as being working people, and they had an emotional mandate to stick-it-to-the-man. I remember those people—when I grew up there was this kind of iconoclastic attitude. There are still some people who are from that world—Seymour Hersh is a great example. The guy grew up in newspapers and still just fucking hates people, and works in this dirty little office in Washington—he doesn’t do fancy lunches. But somewhere along the line, in the 80s or 90s, after All The Presidents Men came out, journalism became this very fashionable profession, a thing for the Ivy League kids. If you go on the campaign trail, what you find is a lot of people who are really turned on by the experience of being near powerful people. They see themselves as being on the same team as the people that they’re covering. I think we saw this very clearly with the [Michael] Hastings thing—all these reporters were saying “how could you betray your source?” which is a crazy attitude for a journalist to have. You would have never seen that twenty or thirty years ago, and that’s kind of de rigueur now.

Clearly, we’re going to have see some serious changes in the class structure of the United States—to get out of the current crises and to prevent their occurrence in the future, and to change the way we report on the current crises and the alternative class solutions being proposed.

Otherwise, we’re destined to repeat the same con that is currently breaking America.

Happy halloween!

“Cocaine and prostitutes for the markets”

Paul Krugman [ht: rm] found this gem, among the comments on a recent blog post by Kevin O’Rourke:

The markets want money for cocaine and prostitutes. I am deadly serious.

Most people don’t realize that “the markets” are in reality 22-27 year old business school graduates, furiously concocting chaotic trading strategies on excel sheets and reporting to bosses perhaps 5 years senior to them. In addition, they generally possess the mentality and probably intelligence of junior cycle secondary school students. Without knowladge of these basic facts, nothing about the markets makes any sense—and with knowladge, everything does.

What the markets, bond and speculators, etc, want right now is for Ireland to give them a feel good feeling, nothing more. A single sharp, sweeping budget would do that; a four year budget plan will not. Remember that most of these guys won’t actually still be trading in four years. They’ll either have retired or will have been promoted to a position where they don’t care about Ireland anymore. Anyone that does will be a major speculator looking to short the country for massive profit.

In lieu of a proper budget, what the country can do—and what will work—is bribe senior ratings agencies owners and officials to give the country a better rating. Even a few millions spent on bumping up Ireland’s rating would save millions and possibly save the country.

Bread and circuses for the masses; cocaine and prostitutes for the markets. This can be looked on a unethical obviously, but since the entire system is unethical, unprincipled and chaotic anyway, why not just exploit that fact to do some good for the nation instead of bankrupting it in an effort to buy new BMWs for unmarried 25 year olds.

Maybe that’s what Larry and Tim are up to, imagining that they and their banker friends are just 25-year-olds out for a good time. . .

Theater of the absurd

The world has gone crazy. Perhaps the only possible response is to identify its absurdity.

That’s what Jon Stewart and Stephen Colbert did today in their Washington D.C. rally: they used comedy to identify the absurdity of U.S. political discourse in the midst of the worst crisis since the Great Depression.

And that’s what the French have been doing for the past month: identifying, through a show of force, the absurdity of raising the retirement age and, more generally, balancing the books of the French state on the backs of French workers.

It’s as if we are all caught up in a Harold Pinter play, like The Birthday Party:

GOLDBERG. What do you use for pyjamas?
STANLEY. Nothing.
GOLDBERG. You verminate the sheet of your birth.
MCCANN. What about the Albigensenist heresy?
GOLDBERG. Who watered the wicket in Melbourne?
MCCANN. What about the blessed Oliver Plunkett?
GOLDBERG. Speak up, Webber. Why did the chicken cross the road?

For no other reason than to get to the other side. Or, if you prefer, to restore sanity to political discourse and economic policy.

Return of zombie ideas

This weekend is the appropriate time for zombie ideas to return from the dead, to scare us out of our wits. Such as. . .

The idea that the rich need coddling.

Because the Obama administration hasn’t been business-friendly enough?

The idea that immigrant workers are stealing jobs from native-born workers.

Only because, in the absence of unemployment compensation, people become desperate for any opportunity to sell their labor power.

The idea that the new “elites are isolated from mainstream America and ignorant about the lives of ordinary Americans.”

Which makes them different from previous elites how?

The idea that “men are caught between an old-fashioned breadwinner ideal and an economic era that no longer delivers the family wage.”

Which has nothing to do with notions of masculinity and everything to do with increases in the rate of exploitation and the changing class structure of households.

The idea that economic growth depends on the irrational exuberance of entrepreneurs.

Because, under capitalism, “entrepreneurial ventures and consumer daydreams” are the only ways we can find out who we are.

The idea that ideas are what matter and materialism “has had its day.”

Only, of course, if you presume that ideas are not material, and materialism means economic determinism.

The only way to bury zombie ideas forever is to admit that the ideas and delusional behaviors of the current elites, which pits one group of workers against others and leaves the elites complaining that they’re not being coddled enough, have failed. They landed us in the current mess, without a way out, thereby undermining their role as elites.

So, let’s celebrate the Día de los Muertos, finally put the zombie ideas of the current elites to rest, and take seriously the plight of the living.

“I’m very interested in politics”

for sw & adm

“I want to be a college professor”

[ht: ea]

Remaking higher education

It’s the revenge of neoclassical economics inside the ivory tower: measuring the costs and benefits of higher education.

For decades, neoclassical economists have promoted the idea of cost-benefit analysis. Measure the costs and benefits, and rank projects according to the best bottom line. Applied inside organizations, the presumption is that it’s possible to measure each individual worker’s or unit’s contribution to the bottom line.

Now, according to Daniel Hamermesh [ht: mo], based on an article that appeared in the Wall Street Journal, that idea is being applied to the same colleges and universities where those neoclassical economists teach.

The point Hamermesh raises—about the difficulty of measuring costs and benefits—is appropriate.

Cost (at least the professor’s pay) is easy to calculate.   Unfortunately, the calculation of revenue includes only outside grants received and tuition revenue.  Any unfunded research, no matter where published, is assumed to have zero value, as is any service. Were this to spread throughout Texas (as I sadly expect it will), any publication — even in the most visible scholarly outlet, even if it affects how the average person thinks about the world — would be valued at zero; so too would an appearance in a nationally visible media outlet.

University administrators facing these incentives would have every reason to construct a faculty of grant-hustlers and low-paid teachers (subject, one might perhaps vainly hope, to some minimum teaching quality).

But there are two other points he doesn’t raise: Who’s doing the counting? And to what end?

One of the problems of the new corporate university is administrators are doing the counting, and meting out the rewards and punishments as they see fit. And they, along with many of the faculty whose costs and contributions are being measured, are lazy. They don’t want to do the work of analyzing the work that’s being done. They just want the numbers. That’s one of the reasons they want to impose the metric of costs and benefits.

The other reason is, it’s an attempt to create the same economic logic inside universities they’ve attempted to impose outside universities. It’s a remaking of the world based on an economic calculation of costs and benefits. But the opposition is weak: liberal critics want the metric to stop at the doors of the ivory tower, allowing it to wreak its havoc elsewhere. Higher education is different, they maintain.

What about drawing the line elsewhere? The calculation of costs and benefits doesn’t work in higher education because it doesn’t work elsewhere. It’s an attempt to engage in speed-up and to raise the rate of exploitation inside colleges and universities, just as it is in capitalist firms that produce other commodities. That’s the goal of neoclassical cost-benefit analysis: to remake the world by allowing capitalist markets to operate freely and by creating capitalist markets where they don’t yet exist.

In my view, it’s the production of capitalist commodities that’s the problem, not just the application of capitalist cost-benefit analysis to higher education.

Public art of the day

“Ordem e Progresso?” (Order and Progress?)

Os Gêmeos

Private property über alles

Richard K. Green has finally figured out why he’s so adamantly opposed to a home foreclosure moratorium: private property must be defended!

last night it occurred to me why I have such a visceral reaction to such things as moratoriums: they strip property rights without due process. If a borrower agrees to repay a mortgage, and everything about the mortgage is legitimate, and the borrower ceases to make payments, the lender has a property right to take the house.

Apparently, in Green’s world, the banks’ right to private property trumps all other rights, such as a decent job or a house over one’s head.

Sure, borrowers agreed to repay their mortgages. And the banks agreed not to make decisions that would drive the world economy to the brink of disaster. I guess that means, according to Green’s logic, we now have the right to take over the banks.