Sunday, February 28, 2010

Being and Age

Many philosophers have written about time; few have written about age. Sein und Zeit, and not Sein und Lebensalter. Yet of course time, for human beings, is age.

Alain, who, if he wasn’t a major philosopher, was, at least, an elegant one – rather like Santayana in that sense - did write about age in Les Idées et les ages. He put the thought of age under the symbol of Proteus, with whom Alain, that lover of coasts, identified himself:

‘I have often read in Homer the story of Proteus, as ancient as mankind. And often I’ve repeated it to myself on the barren shore of the sea, led no doubt by that odor of seaweed, and by the rocks that one might say are nestled in the sand like seals. Holding to the story by the things themselves, as one always does, but also attentive, according to a secret rule, to change nothing in that strange episode, as if everything in it were true without fault.”

Now, of course, in holding to Proteus’ story, Alain is miming the gesture of Menelaus in the Odyssey, who held onto Proteus even as the old man of the sea went through every change that could repulse a person. Menelaous wanted the truth from Proteus – he wanted to know the stages of his journey home, his return, his nostos – which is his future – but he could not resist asking about the fates of his companions from the past.

This is a very seafaring sense of age. Alain imagines Proteus making this reply, which mirrors the truth of age – or rather, the truth about the truth revealed to one who ages:

« The truth, » he said, « is not : for everything changes without cease, and even this shore. This sand is made of these rocks, which flow like the water, only more slowly. False every thoght which does not model itself on the thing; but fall absolutely every thought, since what was is already no longer there. You cannot think the true age that you have; that thought, because it is true, is already false. And in the same way, every thought denies and refuses itself, in the image of this moving water which is my being, and which continually denies its own form. »

Thus sang the sea. And Proteus was truthful, in his true and constant shape which is always other, and in deceiving me didn’t deceive me at all, since this time, and by my express request, it is himself who he spoke. »

Running away and nostos – these are the moments that define the adventure of the Iliad and the Odyssey in the broad sense. A woman runs away from home. Her husband and his allies come to get her. They fight, and overthrow the city in which she is living with her fellow run away. And then Menalaus takes her home again.

Significantly, while it is quite clear that Helen runs away, it is much less clear that she returns. Here myth seems to crack under its own weight, and the stories multiply – only Helen’s image returns, being one of them, while her real self remains in Egypt, or on an island in the Black Sea.

While running away and return might well constitute one of the aspects of aging, it is governed, of course, by “home” – which is that impossible merger of geography and intimacy. As impossible as the cogito, as slippery in its production of doubles and monsters, as quicksilver in slipping out of our grasp. It is from home to home that age is reckoned in America – and thus, on the shadow side, running away is also defined. In its very core, running away cannot shake the intimacy from which it seeks to escape into its own privacy – which is the problem that it strains to overcome as, in the shape of the act, intimacy is annulled. Huck Finn lights out, continually, for the territories, because home presses in upon him. And every settler thinks, in a part of his or her mind, that the tie has now been cut, that any house that is built in this land will be laid on the foundations of the death of nostos. We aren't going back. But Alain’s Proteus is right – in the very performance of that act, which still jitters in the American blood, the act becomes untrue.

Thursday, February 18, 2010

the indefinitely postponed real

In the history of the professionalization of philosophy in the Anglo-sphere since the beginning of the Cold War, one notices that there are periodic crises of realism, in which its enemies are warded off in one way or another. In the division of intellectual labor that organizes the universities, the philosophers have taken up the vocation of defending the real. Still, there is the problem of what the real is and how it can be attacked in the first place. On the one hand, there is the inclination to make the real synonymous with what there is – the universe, say. And yet, few realists would say, I think, that the real began with the big bang. If the real is the universe, why not dispense with the term real as a superfluous and confusing lable? Yet one feels that the realists are uncomfortable thinking of the real as having a beginning or end, or having dark matter in it, or black holes. These things are real, but they aren’t in the real. Then there is the tendency to make the real the objective, as opposed to the subjective – thus a black hole is real and a thought is not. But again, this seems an oddly bent way to talk – how could a thought not be real? Is there a domain of irreality? And can I have a ticket to it, please? One way – cause I’m not coming back.

No doubt, the real – reality – is an odd term.

There is an excellent riff on the philosophical use of the real in Engel’s small book on Feuerbach. Engel’s suffers from the self-inflicted wound of never quite being real himself – his commentators will forever compare him to Marx, and take Engel’s writings to be either a translation or a distortion of Marx. This is, however, what Engels wanted. Inevitably, if one member of a dyad is to play the role of the sage, the other must be the fool. If one is the knight, the other is Sancho Panza. If one is Bruno, the other must be Bruno’s ass. And, indeed, Engels is the sensual man compared to the ever harassed Marx. Marx, at one point in his desperate attempt to change the world and not simply understand it, applied for and was refused a humble job as a railroad station accountant; Engels, on the other hand, was apparently a successful manager of a branch of his family’s business in Manchester. It was Engels who turned Marx on to the political economy, not vice versa. It is as if Sancho Panza loaned the romances of chivalry to Don Quixote. Otherwise, Engels seemed to see himself in this dyad.

Engels, who attended lectures at the University of Berlin as a soldier but never took a degree as a student, never imbibed that obsessive stylistic tic of Marx’s that Benjamin (in a different context) calls la culte de la blague. Often, in Marx’s writing, when the reader feels the roof being lifted off the house, we are in the presence of that tremendous, even prophetic sarcasm that makes Marx so pre-eminently a writer, a man of textual strategies. Engels likes a little Hegelian word play as much as the other guy, but when he tells a joke he is sure to label it a joke – not for him Marx’s habit of throwing all his genius into a joke, so that it becomes Satanically, sublimely not funny.

Engels begins his book on Feuerbach by discussing a well known maxim of Hegel’s: all that is real, is rational, and all that is rational, is real. He notes that his has been seen as Hegel’s blessing of Prussian despotism. But Engel’s disagrees. Those who quickly rush to make Hegel a bootlicker of the Prussian court forget that for Hegel, the real is the necessary. It is not “… arbitrary regime measure – Hegel himself adduces a certain ‘tax adjustment’ that counts, without anything further, as real. But what is real shows itself in the last instance also as rational.

But what is necessary, shows itself as rational in the last instance, which, applied to the Prussian state at that time, means, according to the Hegelian proposition, only: this state is rational, that is, corresponds to reason, only in so far as it is necessary; and if it appears terrible to us, and yet, in spite of its badness, continues to exist, the badness of the government finds its justification and explanation in the badness of its subjects [Untertanen]. The Prussian of that time had the government they deserved.
Now, reality – according to Hegel – is not an attribute that a given social or political arrangement retains under all circumstances and times. On the contrary. The Roman republic was real, but so was the Roman empire that crushed it. The French monarchy of 1789 had become so unreal, that is, so robbed of all necessity, so irrational, that it had to be destroyed through the great Revolution, that Hegel always spoke of with the highest enthusiasm. Here, the Monarchy was the unreal, the revolution the real. And so it goes that in the course of development, all that was earlier real loses its necessity, its right to existence, its rationality; a new, lively reality steps into the place of the dying real – peacefully, when the old state of affairs is rational enough, without striving to be carried off by death, and violently, when it holds out against this necessity. And so the Hegelian proposition is inverted through Hegelian dialectic into its opposite: everything which is real in the domain of human history will become unreasonable with time, and thus is already according to its pre-determination irrational, is qualified by the irrational from then on; and everything, which is rational in the heads of men, is predetermined, to be real, may it contradict existing reality in ever so many ways. The proposition of the rationality of all the real is dissolved according to the rules of Hegel’s conceptual method into its other; the value of everything that exists is the fact that it dies. [Alles was besteht, ist wert, dass es zugrunde geht]"

I interpret this wonderfully uplifting, almost surrealist credo in terms of the sense of reality. And any newspaper reader of the past ten years must have noticed the loss of this sense of reality in the Americanized part of the world. This loss comes through in two ways: a deep failure of the mechanisms of social cause and effect, and a profusion of symbols that become issues. The three most recent events in which one feels the deep mechanism, the machine, has jumped the track were the invasion of Iraq, the Great Slump, and the earthquake in Haiti, where we witnessed obsessive acts that seemed to respond not to cause and effect on the ground, but to a whole other set of status making motives that failed to recognize or in any way integrate what was happening on the ground. As for the politics of symbols – the Engel’s real certainly generates symbols; the unreal, however, can only deal with symbols. Symbols define the politically possible, which nobody even pretends is a response to or solution for the politically impossible, that is, real social problems. The left and right still debate, for instance, the invasion of Iraq without any sense at all that the invasion had to do with a whole broken structure, going back to the double sanction policy against Iran and Iraq, that had everything to do with navigating the great problem of maintaining a feudal oil supplier, Saudi Arabia, and an irredentist state that is way too small for its irredentism, Israel. Iran is still unrecognized, Osama bin Laden and the magic pygmy pony by which he escaped Tora Bora is still at large, Israel is still irredentist, and D.C. will spend 800 billion plus on war this year with no questions asked. These are the lineaments of dysfunction. They go deep. They sap the real. The earthquake is coming. How long will it tarry?

Friday, February 12, 2010

mystery of the movie actor

I never know what to say about movies.
My experience of movies has been that the language used about movies doesn’t make sense of that experience.

When Edison, among others, invented the apparatus for making film, everybody – in the West - had a pretty good idea of what an actor did and what theater was. These ideas were passed onto film, as if film were merely the extension of theater. It did not occur to Edison, or to others in the first period of moviemaking, to do more than let the camera record a basically theatrical experience. It was as if one were just taking a big extended photograph of a play.

Now, the play is certainly not a spontaneous experience, but it soon became evident that the theater and the movie operate in different dimensions. The actor in a play may rehearse the part, certainly has to memorize the lines, appears in a stage setting, interacts with others who have also memorized lines, etc. – but all within the defining experience of the performance. The actor’s experience of the play and the audiences is equivalent.

This radically changed with film. It was blown to hell. The idea that the film would mimic the play – photograph it - could not long ignore the technical nature of film making, which allows one to create a performance out of an ensemble of many cuts. And that is key – at that moment, the experience of the audience is fatally and finally cut adrift from the experience of the actor. It is, of course, still possible to film a play, but movies generally are built on the ruin of the old regime, in which the actor experiences the unity of his part in something that occurs from beginning to end at one time. This rarely if ever happens in movies.

Of course, this became, very early, a trope in film. Since the silent films, movies have loved to show – to gleefully demystify – their making. They love to focus the camera on the camera focusing on the actor, they love to show the fakery of it all, they love to show the director, sitting in a director’s chair, saying cut. The cliché quickly and thoroughly penetrated the culture.

However, even as the difference made by the movie was exposed again and again, we retained old, theatrical ways of looking at what was happening. We still called the figures mouthing the lines and pretending to be detectives or kings ‘actors’. And though auteur theory wasn’t really codified until the fifties, the characteristics of it in movie appreciation appeared early on – as though the director was an author.

And so, newpaper and magazine movie critics will write about the performance of the ‘actor’ in the film as something that occurs like the performance of an actor in a play – they will ignore what they know, and what every movie abundantly references – that this is very much a synthesis, rather than a spontaneous unity. The movie references this in its camera work, its transitions, its ‘special effects’, etc., and we know after we have finished it that our experience of it as a performance was an illusion. Even the dimmest movie goer sees through the illusion. The ironic entailment of the reality affect offered by movies is that they become less ‘real’ – they reveal themselves as process the realer they are.

So what are these figures? Are they actors?

There’s a story told on the DVD of Ni Toit ni Loi (Vagabond). In one of the last scenes in the film, Sandrine Bonnaire, the actress who plays Mona – the film’s central figure – wanders into a small French village where the grapes have just been harvested. The village celebrates by allowing a sort of carnival – men dressed up like wine demons capture whoever wanders by – civilians – and dunks them in a vat of wine, or throws grapes at them. According to the interview, when Bonnaire played in this scene, she was not expecting these grape demons – and she was really terrified by them as they chased her around, and eventually into a phone booth. It is an excellent scene – but it would never work in theater. In the unity of the experience of audience and actors that makes up theatrical performance, and actor who doesn’t know what is happening destroys the code of the performance. He or she isn’t better or worse at that point, but becomes a non-actor. However, this rule simply doesn’t apply in film. This is why film actors often speak of acting a role in terms of the way they physically throw themselves into it – rather than, as theater actors do, the way they throw themselves into it psychologically. Bonnaire lets her hair go, doesn’t wash it, or herself – DeNiro pumps himself up to 250 pounds for Raging Bull – etc. Now, it isn’t the case that the film actor doesn’t try to assume psychological characteristics, or the theater actor is not concerned with the body as an instrument – it is a matter of what is subordinate to what. In a sense, the actor in movies, cut off from the entirety of the film by the process of making the film, is doing something very different than what we call acting. A movie is a riposte to methodological individualism – the fundamental level at which the movie works is not reduceable to the separate and individual contributions of the people involved in it. We understand it that way for giving prizes, and because the myth of the individual is something that, at least in America, we pay lip service to. In making movies, the West invented an art form that it did not have the conceptual structure to understand.

Which is why I am uncomfortable with saying things about movies. Because the words I have to use were killed by the camera.

Wednesday, February 10, 2010

Crossposted from Limited Inc: Freedom and Money

As every amateur of economics knows (fellow cranks gather round!), money is a mystery that no classical or neo-classical theory has ever solved. Or rather, given the usual fictions of perfect markets with zero transaction costs, there would be no need for money. Thus, the hired, petty visionaries of the capitalist system have devised a model of that system that does not distinguish money from barter – a most embarrassing situation.

Whether Marx did any better is a much disputed question. Keynes, on the other hand, does seem to have grasped the nature of money more fully than others. In the General Theory, he wrote that “the second differentia of money is that it has an elasticity of substitution equal, or nearly equal, to zero; which means that as the exchange value of money rises, there is no tendency to substitute some other factor for it; - except, perhaps, to some trifling extent, where the money-commodity is also used in manufacture or the arts. This follows from the peculiarity of money that is utility is solely derived from its exchange value, to that the two rise and fall pari passu, with the result that as the exchange value of money rises there is no motive or tendency, as in the case of rent-factors, to substitute some other factor for it.”

What this brilliantly points to is that money is the socially materialized form of the principle of substitution itself, and in this way, the money system does compete against the barter system. The latter, of course, is far from a primitive form of the economy – it is, in fact, in millionfold daily use in the U.S.A. Whenever a man says to a woman, I went to see x film with you, now you have to watch x tv show with me; whenever a child says to another child, I gave you half of my M and Ms, now you have to let me play with your game; etc., the barter system is alive and well. It is an adhoc system of socialization, and it is certainly as important as money. The competition between the money system and the barter system also goes on a millionfold daily. At a certain point, one ‘feels’ the threat of the money system to our identifying social acts of barter, which is why such rule of thumb adages about not loaning money to relatives and the like float on our breaths.

But more to my present purpose – the advent of the money system as one in which the substitution principle enters as the unsubstitutable moment was felt to have something alchemical or uncanny about it. This is captured in Faust the second part. And it was also a significant dimension in the discourse about Freedom that became so important in the eighteenth and nineteenth century. On the negative side, there is no substitute – no alternative – to the principle of subsitution. On the positive side, this frees us from the bondage of the various, infinite and intimate forms of the barter system. Simmel, in the Philosophy of Money, makes a crucial distinction between “freedom from” and “freedom to”. He uses the example of a schoolboy who, graduating from the gymnasium, steps into the freedom of his college days – a freedom that is “quite empty and almost unbearable” – and so quickly throws himself into other activities, for instance student organizations, that enforce a whole new set of rules of behavior upon him – in contrast to a businessman, who works to receive freedom from a regulation because, once that regulation is dissolved, he can expand his business in a certain way – the “freedom to” is defined by expectations that will concretely materialize upon the moment of ‘liberation”, while the ‘freedom from” is defined by the lack of any clear expectation beyond the point of liberation.

“In brief, every act of liberation shows a specific proportion between the emphasis and extension of the overcome circumstance and that of the one gained.”

Introducing the principle of substitution as the universal rule of the economic sphere does create freedom from, but – as Simmel points out – it also creates a certain alienation. I’ll end this note with this bit from Simmel (who I hate to translate – his language is almost impossibly hooked together in German so as to make translation a drag):

Beginning with the peasant who wins his freedom by the extension of the money system: “Clearly, it was freedom that he gained; but only freedom from something, not freedom to something; evidently, a seeming freedom to all – because it was simply negative – but actually without any directive, with any determined and determining content and thus disposing to that emptiness and lack of restraint, which is produced by every extension without resistance of that accidental, delusive, and seductive impulse – corresponding to the fate of the unfettered person who has given up his gods and thus won “freedom” only to give space for making an idol out of every arbitrary momentary value. It isn’t any different with many businessmen, for whom, burdened with the care and labor of his business, makes it his cherished goal to sell it. When he finally, with the price in his hand, is really ‘free”, there ensues often enough that typical boredom, that sense of the pointlessness of life, that inner disquiet of the rentier, that drives him to the most wonderful, and to inner and outer sense most irrational business ventures, by which he only constructs a substantial content for his freedom. It is just like the bureaucrat, who wants only to reach a stage as quickly as possible where his pension will allow him a “free” life.”

Monday, February 8, 2010

Time and pop music

“All uncultured peoples sing and act, and what they act they sing, and they sing their treatises. Their songs are the archive of the people, the treasury of their science and religion, their theogony and the cosmogony of their fathers, and the events of their history; the impression of their hearts, the image of their domestic life in joy and sorry, in the bridal bed and the grave. Nature has given them a comfort against the many evils that oppress them, and a substitute for many of the so called blessing we enjoy, that is, free love, laziness, tumult and song.” - Herder.

The country folk cutting furze for the Guy Fawkes bonfires the third chapter of Hardy’s Return of the Native – called the “Custom of the Country” – are presented to us, at first, as anonymous creatures in the falling dark, as they would have been seen by ‘a looker-on posted in the immediate vicinity.’ When the bonfires “sprang into the sky”, the faces of the people around them emerge – although, as Hardy is careful to state, this illumination – good for our supposed on-looker – blinds the people around the bonfire to what is happening in the further darkness outside of it. Having lit the pile, what do they do? An old man begins it:

“With his stick in his hand he began to jig a private minuet, a bunch of copper seals shining and swinging like a pendulum from under his waistcoat: he also began to sing, in the voice of a bee up a flue—“

Naturally, they sing. For a contemporary on-looker, the strange thing revealed in the songs and the following conversation is what is left out: there is no indication that, among the young and the old gathered there, any song is particularly tied to an age group.

Hardy loved his dying festivals of the folk – another one, a dance, is put at the beginning of Tess. However, even if one goes a long way into the darkness around the bonfire on the Rainbarrow, until one meets a more urban local – pop culture as we know it, with its explicit, commercial effort to produce demographics as units of exploitation didn’t exist. Popular culture existed, of course, in abundance – the archive of the folk was being written and rearranged, visual and text culture was definitely colonizing the collective sensorium, but at what we would consider a very primitive level.

Our popworld is quantitatively different. And among the curious effects it has wrought, none is so curious as the way in which age group identification has fused with artifacts that are built to obsolesce. Such as songs. Why people in the Western world, between the age of 13 and 30, identify so ardently with songs, and why those songs then become age and generational markers for them, remains, as far as I can tell, an under-researched question.

I’m thinking about it because of a novel I am reviewing. The novel is basically about a middle aged man – my age, in fact, or thereabouts – who is in a horny sweat about young women. Now, this familiar character type is still good for loads of fun – he is a perpetual Punch, except instead of carrying a stick to beat Judy on the head, he carries a dick to beat himself – figuratively – on the head. All one needs, really, for comedy is a man and a stick – Moliere knew this, as did, well, every farceur going back to Aristophanes.

But the novel pitches uneasily between farce and sentimentality. The character has a penchant for remembering past girlfriends. All of his memories are sound tracked. The sound tracks are the songs of certain groups that came out when he was 13-30. And it is his melancholy observation that these songs are unknown to the youth.

This is an old American trope – or at least as old as the Cold War culture. Curiously, having set your heart on a certain set of songs precisely because they are new – and thus, wear their obsolescence on their very faces – Americans, as they grow older, use the fact that those songs don’t have the same effect on others who are in the 13-30 range, or might not even be known by them, to ‘feel old’.

On one side of this transaction, then, we have the pop culture industry producing goods that are marked explicitly within the continuum of the old-new – a time scheme appropriate to a consumer economy built around obsolescence. On the other side, you have consumers who actually identify, in some way, with these songs. They use them as elements in their own personal soundtrack. And even as they accept them as new, they then continue to drag them around as petrified mementoes of the new. In this way, the middle aged consumer can feel simultaneously new/old, while – in the pop world – a culture that is managed almost exclusively by the middle aged manages to produce zip that one could call, middle aged culture. There is nothing new for the middle aged – it is always the once-new.

This is, actually, an amazingly valuable paradox, and it may be reaching an endpoint. Fortune had a recent story about the amazingly shrinking music industry:

“In 2008, just 35% of album sales came from new releases, the lowest percentage since Nielsen began tracking the data in 1991. Instead of breaking new acts, major labels are increasingly relying on legacy artists and their catalogues.
Case in point: EMI with the Beatles. "EMI is run on catalogues," says Steve Knopper, author of Appetite for Self-Destruction, an account of the record industry's demise. "It prevents them from ever being completely destitute."”

Indeed, apparently EMI has become the house of Beatles, as that fifty year old, long dead band has become their core profit center. The long dead John Lennon, who would have been seventy this year, is going to be pimped out by EMI’s zombiemasters in order to squeeze more pence out of … out of who?

Surely the 50-70 demographic. Nostalgia is the emotional surplus value of the pop product; the “greatest hits,” “collectors edition”, “reunion tour” turns it into profit. The youth culture thus petrifies inside the non-young, as if they never can give up the taste of the yolk they once were on their tongue.

This juxtapositon of the obsolete/new is more, I think, than the temporal scheme manufactured by the pop industry. It is the sign under which America itself, the Cold War country that created the world’s first pop industries, has gone dysfunctional. Under the gun of nuclear war, the Cold War generations experienced the new/obsolete schema when it was, itself, fairly new. It was never really part of the deign that the consumers would take up their pop songs like a cross of age and trudge with it to the grave. But they have done so. The rival time scheme of both the “songs of the folk” and high culture were marginalized – the eternal return, or the eternal now – and in their place we live in the popdome 24/7. It once had energy, it once liquidated all the barbarous hierarchies, but it now sits on our neck, trivializing our every season. The empires of pop manufacture – all those horrible record companies, those multi-media ‘entertainment’ enterprises - are going down, and we are going with them.

Sunday, February 7, 2010

News of the vampire squid

The little gremlins of history have been blindly tap tapping their way down the newspaper tunnel, unrolling bits and pieces of our secret history – a history crowning the decade of peak imbecility, the 00s. In November last year, Bloomberg ran a big story about the negotiations between the U.S. and AIG’s counterparties in December, 2008, which it was revealed that team U.S., headed by Geithner, blithely ignored all advice and forked over 100 percent of AIG’s alleged obligation to, among others, Goldman Sachs. It so happened that the ex GS CEO, Hank Paulson, was the Secretary of Treasury, and it so happened that in September, 2008, when the Treasury and the New York Fed confabbed to try to figure out how to decently socialize AIG’s trillion dollar bets and pretend it was still capitalism, the one bank that was invited to attend the meeting was… Goldman Sachs.

Now, we have known about the 12.9 billion for some time. The story Goldman Sachs crafted in response is a masterpiece of doubletalk, around what seems to be an outright lie.

“Goldman, for its part, has insisted it did not need the bailout money because it was "always fully collateralized and hedged."

Long Wall Street's largest investment bank before it recently became a bank holding company, Goldman answered a series of questions from Reuters about the bailout funds.
"We can say that our notional exposure to AIG is a fraction of what it was at the time of the September bailout," Goldman spokesman Michael DuVally said.
Asked why Goldman Sachs took $12.9 billion of taxpayer money if it was collateralized and hedged on its AIG positions, DuVally said it was because AIG was not allowed to fail, so Goldman did not get money from hedges that would have paid out if the insurer had collapsed. And, he said, under the terms of its contracts with AIG, Goldman was entitled to collateral.
DuVally also said the bank does extensive due diligence on all its counterparties.”

Well, it does take balls – balls made of soap bubble, blood, old bacon grease and curdled milk – to proclaim, with a straight face, that Goldman Sachs does “extensive due diligence’ on all counterparties when answering a question about a counterparty, AIG, whose operations cost the government 180 billion dollars to bail out, just going in. It is like proclaiming that you do extensive due diligence on your friendship while explaining all the pictures of you partying with Jeffrey Dahmer.

Now, however, we know what happened – to a certain extent – between Goldman Sachs and AIG – we know that Goldman Sachs was behind the final tipping over of AIG; the mystery of why Societe General was paid out so much in the AIG bailout is explained; and the GS lie – that it was “fully collateralized”, which has never made any sense, given the nature of the international financial environment in December, 2008 – is exposed for the lie it is just a little bit more:

In just the year before the A.I.G. bailout, Goldman collected more than $7 billion from A.I.G. And Goldman received billions more after the rescue. Though other banks also benefited, Goldman received more taxpayer money, $12.9 billion, than any other firm.
In addition, according to two people with knowledge of the positions, a portion of the $11 billion in taxpayer money that went to Société Générale, a French bank that traded with A.I.G., was subsequently transferred to Goldman under a deal the two banks had struck.
Goldman stood to gain from the housing market’s implosion because in late 2006, the firm had begun to make huge trades that would pay off if the mortgage market soured. The further mortgage securities’ prices fell, the greater were Goldman’s profits.
In its dispute with A.I.G., Goldman invariably argued that the securities in dispute were worth less than A.I.G. estimated — and in many cases, less than the prices at which other dealers valued the securities.
The pricing dispute, and Goldman’s bets that the housing market would decline, has left some questioning whether Goldman had other reasons for lowballing the value of the securities that A.I.G. had insured, said Bill Brown, a law professor at Duke University who is a former employee of both Goldman and A.I.G.
The dispute between the two companies, he said, “was the tip of the iceberg of this whole crisis.”

To sum up – amazingly, the Treasury invited Goldman Sachs to its preliminary meetings with A.I.G. in September, and Goldman Sachs used its privileged knowledge to pump even more money out of A.I.G., which then has to be propped up for the not insiginificant sum of 180 billion in December, of which some large part goes directly to Goldman Sachs, and some part goes to Goldman circuitously, through Societe Generale.

We know the Bush/Obama people who did this. And these are the people who have designed our entire response to the depression.

They are backed up, of course, by the collective intellectual firepower of those people who designed the occupation of Iraq, who populate the Pentagon. It is no longer a question of whether the elite is stupid, mad, vicious, corrupt, and gorged with the theft of natural resources that are even now being taken out of the mouths of infants worldwide and stuffed up the asshole of GS shareholder – it is a question of the disconnect, the democratic shortfall, that allows this clique to operate with impunity.
Another zona story.

Thursday, February 4, 2010

and the architects of our disaster are reappointed in time to do it again!

The headlines over the last few days have come out of history’s back pocket – or Nemesis’s. What could be more symbolic, after the senate votes to re-appoint one of the main architects of the disaster, Ben Bernanke, than the fraying of his patch and glue rescue work? The problem facing the elite in 2008 was much like the problem that faced the foreign policy elite in 2002: a numbers problem. In 2002, it became evident that the U.S. was never going to be willing to field enough soldiers in Iraq to truly occupy the country. Thus, no matter if you agreed with the invasion or thought it was simply dirty and immoral – I chose the latter position – the chances that it would be a success were stunningly low. This truth was uttered by one of the unlikely messangers of Nemesis, General Shinseki, who was no genius, but simply the accountant of death and destruction – a military specialty – toting up sums. However, when it turned out that the second coming of Hitler rolled over like a rotten mush mellon, the venues of conventional wisdom were triumphant – the naysayers of our great liberation were proven o so wrong! Well, a fiasco eight years later, of course, the naysayers can count up the dead, the wounded, the money and the exiles and well ask: was this much effort worth putting in place the coven of warlords that presently rule Iraq? The answer of course is no. And the answer comes with a codicil: the opportunity space – let’s call it – for pursuing the fall of Saddam Hussein was never opened up in the run up to the war. Nobody talked of recognizing Iran, or supplying Northern Iraq, that happy little autonomous place with the smuggler lords on top of it, with money to make the place bloom a little.

The opportunity space that opened up in October, 2008 with the fall of Lehman was similarly about the systematic cause of the failure of Reagonism. You’d have to be an economist not to see it: the rising level of exploitation, as the Marxist would say, or the stagnating median income and rising long term unemployment killed the flip this golden goose economy.

And the numbers were, similarly, all about inequality and its cost, in the end. When the wealthy can get wealthy by piling up trillions of dollars of securitized instruments and playing the ontological spread between the nominal and the real, they will do it. Unsurprisingly, there goes the capital that is supposedly being ‘efficiently’ allotted to those enterprises that actually, like, produce a good or service. The Patchwork kids then went on their tangent. And they produced a great illusion – which, they were happy to see, bore fruit in the stock runup of 2009.

That illusion may be coming apart. Just as the first few weeks after the Iraq invasion it was all, Mission Accomplished, so, too, it has been with the refusal to address the deep systematic problems with the way the economy has been restructured in the Reagan era. Viz that inequality. So, recently, the NYT posted a thumbsucker about the astonishing fact that 10 percent of American homeowners own houses that are significantly underwater, and when today the news slips out that the Mediterranean countries are either going to have to be bailed out by the EU or we are all gonna die, we can get a better look at those Fed-TARP patches. Apparently need patches. Someday, we will look back on the 17th century search for the philosopher’s stone as a model of lucidity compared to the refusal of the elite to understand the situation we are in.

So, here’s a kicky coupla grafs from the jinglemail article:

New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying.
In a situation without precedent in the modern era, millions of Americans are in this bleak position. Whether, or how, to help them is one of the biggest questions the Obama administration confronts as it seeks a housing policy that would contribute to the economic recovery.
“We haven’t yet found a way of dealing with this that would, we think, be practical on a large scale,” the assistantTreasury secretary for financial stability, Herbert M. Allison Jr., said in a recent briefing.
The number of Americans who owed more than their homes were worth was virtually nil when the real estate collapse began in mid-2006, but by the third quarter of 2009, an estimated 4.5 million homeowners had reached the critical threshold, with their home’s value dropping below 75 percent of the mortgage balance.
They are stretched, aggrieved and restless. With figures released last week showing that the real estate market was stalling again, their numbers are now projected to climb to a peak of 5.1 million by June — about 10 percent of all Americans with mortgages