Dear Friends (aka DAA42)-
As the year comes to a close, I wanted to share a few thoughts with you about the past 4.5 yrs (when, under severe pressure from agent and editor, I agreed to start this blog) and the next few. I'm glad, in retrospect, that I knuckled under to pressure from these folks, as the evolution of this blog has taught me a lot; and it's been great getting to know you guys, if only virtually. It took a while to shake out, as I recently explained: the self-advertising and the severely neurotic have (thank god) departed for greener pastures, and what is left is a group of thoughtful people who want to reflect on what's happening to the US and where we are collectively going. Art, Dave, Susan, Tim, Joe, El Juero, Mike (et al.)--thank you for being there, and for contributing as much as you have.
I suspect the next 2-3 years are going to be quite fateful for the US, and not in a good way. I very much doubt there is anything substantive any of us can do to derail America from its destructive, self-defeating course. But we can attend to our souls a bit; at least there's that. With that in mind, here is a quote from Marilynne Robinson's recent book, Absence of Mind. She writes of
"...that haunting I who wakes us in the night wondering where time has gone, the I we waken to, sharply aware that we have been unfaithful to ourselves, that a life lived otherwise would have acknowledged a yearning more our own than any of the daylit motives whose behests we answer so diligently....I am hungry, I am comfortable, I am a singer, I am a cook. The abrupt descent into particularity in every statement of this kind, Being itself made an auxiliary to some momentary accident of being, may only startle in the dark of the night, when the intuition comes that there is no proportion [i.e., relationship] between the great given of existence and the narrow vessel of circumstance into which it is inevitably forced [Heidegger: thrown]...The soul [is simply] a name for an aspect of deep experience...."
To all of you, a happy and soulful 2011.
--mb
December 30, 2010
December 27, 2010
December 20, 2010
The Straight Poop
The following is from John Cassidy's Nov. 29 article in The New Yorker, "What Good Is Wall Street?" The subtitle is: "Much of what investment bankers do is socially worthless" (Duh!).
"A clear implication of [Lord Adair Turner's] argument is that many people in the City [London] and on Wall Street are the financial equivalent of slumlords or toll collectors in pin-striped suits. If they retired to their beach houses en masse, the rest of the economy would be fine, or perhaps even healthier." [Turner is the chairman of Britain's top financial watchdog, the Financial Services Authority; he recently published an article entitled "What Do Banks Do?"]
"Last year, while many people were facing pay freezes or worse, the average pay of employees at Goldman Sachs, Morgan Stanley, and JPMorgan Chase's investment bank jumped 27%, to more than $340,000. This figure includes modestly paid workers at reception desks and mail rooms, and it thus understates what senior bankers earn. At Goldman...nearly a thousand employees received bonuses of at least $1 million in 2009. Not surprisingly, Wall Street has become the preferred destination for the bright young people who used to want to start up their own companies, work for NASA, or join the Peace Corps. At Harvard this spring, about a third of the seniors with secure jobs were heading to work in finance. Ben Friedman, a professor of economics at Harvard, recently wrote an article lamenting 'the direction of such a large fraction of our most-skilled, best-educated, and most highly motivated young citizens to the financial sector.'"
"Paul Woolley...has set up an institute at the London School of Economics called the Woolley Centre for the Study of Capital Market Dysfunctionality. 'Why on earth should finance be the biggest and most highly paid industry when it's just a utility, like sewage [excellent comparison] or gas?...'It is like a cancer that is growing to infinite size, until it takes over the entire body.'" [Woolley had a career as an investment banker.]
"Rather than seeking the most productive outlet for the money that depositors and investors entrust to them, [banks] may follow trends and surf bubbles. These activities shift capital into projects that have little or no long-term value, such as speculative real-estate developments in the swamps of Florida. Rather than acting in their customers' best interests, financial institutions may peddle opaque investment products, like collateralized debt obligations. Privy to superior information, banks can charge hefty fees and drive up their own profits at the expense of clients who are induced to take on risks they don't fully understand--a form of rent seeking."
"The insidious culture that allowed Wall Street firms to peddle securities of dubious value to pension funds and charitable endowments remains largely in place."
"Perhaps the most shocking thing about recent events was not how rapidly the big Wall Street firms got into trouble but how quickly they returned to profitability and lavished big rewards on themselves. Last year, Goldman Sachs paid more than $16 billion in compensation, and Morgan Stanley paid out more than $14 billion. Neither came up with any spectacular new investments or produced anything of tangible value."
"During the credit boom of 2005 to 2007, profits and pay reached unprecedented highs. It is now evident that the bankers were being rewarded largely for taking on unacknowledged risks: after the subprime market collapsed, bank shareholders and taxpayers were left to pick up the losses. From an economy-wide perspective, this experience suggests that at least some of the profits that Wall Street bankers claim to generate, and that they use to justify their big pay packages, are illusory."
"On Wall Street and elsewhere in corporate America, insiders generally learn quickly how to game new systems and turn them to their advantage."
"There is...a blog, The Epicurean Dealmaker, written by an anonymous investment banker...In March, 2008, when some analysts were suggesting that the demise of Bear Stearns would lead to a change of attitudes on Wall Street, [the author] wrote: 'I, for one, think these bankers will be even more motivated to rape and pillage the financial system in order to rebuild their ill-gotten gains.' Seven months later, on the eve of the bank bailout, [he] opined, 'Let hundreds of banks fail. Let tens of thousands of financial workers lose their jobs and their personal wealth....The financial sector has had a really, really good run for a lot of years. It is time to pay the piper, and I, for one, have little interest in using my taxpayer dollars to cushion the blow.'"
"In September, 2009, addressing the popular anger about bankers' pay, [he] wrote [to his colleagues in the banking industry]: 'You mean to tell me your work as a ___ is worth more to society than a firefighter? An elementary school teacher? A combat infantryman in Afghanistan? [bad example!] A priest? Good luck with that.'"
"In the first nine months of 2010, the big six banks cleared more than $35 billion in profits."
"Despite all the criticism that President Obama has received lately from Wall Street, the Administration has largely left the great money-making machine intact. [Gee, there's a shock.] A couple of years ago, firms such as Citigroup, JPMorgan Chase, and Goldman Sachs faced the danger that the government would break them up, drive them out of some of their most lucrative business lines--such as dealing in derivatives--or force them to maintain so much capital that their profits would be greatly diminished. 'None of these things materialized,' [Robert] Altman [the chairman of Evercore] noted. 'Reforms and changes came in, but they did not have a transformative effect."
"Even after all that has happened, there is a tendency in Congress and the White House to defer to Wall Street...."
The NYT review of "All the Devils Are Here," by McLean and Nocera (Nov. 21), concludes: "What about the future? The next crisis probably won't be a housing bubble or an Internet craze, because those are fresh in our collective memory. But in some other corner of the economy, easy money is almost certainly beginning to feed hubris and greed. So the chances are, the devils will be coming back again."
"A clear implication of [Lord Adair Turner's] argument is that many people in the City [London] and on Wall Street are the financial equivalent of slumlords or toll collectors in pin-striped suits. If they retired to their beach houses en masse, the rest of the economy would be fine, or perhaps even healthier." [Turner is the chairman of Britain's top financial watchdog, the Financial Services Authority; he recently published an article entitled "What Do Banks Do?"]
"Last year, while many people were facing pay freezes or worse, the average pay of employees at Goldman Sachs, Morgan Stanley, and JPMorgan Chase's investment bank jumped 27%, to more than $340,000. This figure includes modestly paid workers at reception desks and mail rooms, and it thus understates what senior bankers earn. At Goldman...nearly a thousand employees received bonuses of at least $1 million in 2009. Not surprisingly, Wall Street has become the preferred destination for the bright young people who used to want to start up their own companies, work for NASA, or join the Peace Corps. At Harvard this spring, about a third of the seniors with secure jobs were heading to work in finance. Ben Friedman, a professor of economics at Harvard, recently wrote an article lamenting 'the direction of such a large fraction of our most-skilled, best-educated, and most highly motivated young citizens to the financial sector.'"
"Paul Woolley...has set up an institute at the London School of Economics called the Woolley Centre for the Study of Capital Market Dysfunctionality. 'Why on earth should finance be the biggest and most highly paid industry when it's just a utility, like sewage [excellent comparison] or gas?...'It is like a cancer that is growing to infinite size, until it takes over the entire body.'" [Woolley had a career as an investment banker.]
"Rather than seeking the most productive outlet for the money that depositors and investors entrust to them, [banks] may follow trends and surf bubbles. These activities shift capital into projects that have little or no long-term value, such as speculative real-estate developments in the swamps of Florida. Rather than acting in their customers' best interests, financial institutions may peddle opaque investment products, like collateralized debt obligations. Privy to superior information, banks can charge hefty fees and drive up their own profits at the expense of clients who are induced to take on risks they don't fully understand--a form of rent seeking."
"The insidious culture that allowed Wall Street firms to peddle securities of dubious value to pension funds and charitable endowments remains largely in place."
"Perhaps the most shocking thing about recent events was not how rapidly the big Wall Street firms got into trouble but how quickly they returned to profitability and lavished big rewards on themselves. Last year, Goldman Sachs paid more than $16 billion in compensation, and Morgan Stanley paid out more than $14 billion. Neither came up with any spectacular new investments or produced anything of tangible value."
"During the credit boom of 2005 to 2007, profits and pay reached unprecedented highs. It is now evident that the bankers were being rewarded largely for taking on unacknowledged risks: after the subprime market collapsed, bank shareholders and taxpayers were left to pick up the losses. From an economy-wide perspective, this experience suggests that at least some of the profits that Wall Street bankers claim to generate, and that they use to justify their big pay packages, are illusory."
"On Wall Street and elsewhere in corporate America, insiders generally learn quickly how to game new systems and turn them to their advantage."
"There is...a blog, The Epicurean Dealmaker, written by an anonymous investment banker...In March, 2008, when some analysts were suggesting that the demise of Bear Stearns would lead to a change of attitudes on Wall Street, [the author] wrote: 'I, for one, think these bankers will be even more motivated to rape and pillage the financial system in order to rebuild their ill-gotten gains.' Seven months later, on the eve of the bank bailout, [he] opined, 'Let hundreds of banks fail. Let tens of thousands of financial workers lose their jobs and their personal wealth....The financial sector has had a really, really good run for a lot of years. It is time to pay the piper, and I, for one, have little interest in using my taxpayer dollars to cushion the blow.'"
"In September, 2009, addressing the popular anger about bankers' pay, [he] wrote [to his colleagues in the banking industry]: 'You mean to tell me your work as a ___ is worth more to society than a firefighter? An elementary school teacher? A combat infantryman in Afghanistan? [bad example!] A priest? Good luck with that.'"
"In the first nine months of 2010, the big six banks cleared more than $35 billion in profits."
"Despite all the criticism that President Obama has received lately from Wall Street, the Administration has largely left the great money-making machine intact. [Gee, there's a shock.] A couple of years ago, firms such as Citigroup, JPMorgan Chase, and Goldman Sachs faced the danger that the government would break them up, drive them out of some of their most lucrative business lines--such as dealing in derivatives--or force them to maintain so much capital that their profits would be greatly diminished. 'None of these things materialized,' [Robert] Altman [the chairman of Evercore] noted. 'Reforms and changes came in, but they did not have a transformative effect."
"Even after all that has happened, there is a tendency in Congress and the White House to defer to Wall Street...."
The NYT review of "All the Devils Are Here," by McLean and Nocera (Nov. 21), concludes: "What about the future? The next crisis probably won't be a housing bubble or an Internet craze, because those are fresh in our collective memory. But in some other corner of the economy, easy money is almost certainly beginning to feed hubris and greed. So the chances are, the devils will be coming back again."
December 08, 2010
Death Throes
Collapse is now a given; the pundits are busy working out the details. Check this out for chickens-coming-home-to-roost dept.:
http://www.tomdispatch.com/post/175327/tomgram%3A_alfred_mccoy%2C_taking_down_america/
http://www.tomdispatch.com/post/175327/tomgram%3A_alfred_mccoy%2C_taking_down_america/
December 04, 2010
Papering Over the Void
Law professor Ronald Dworkin has a short note in the current (9 December 2010) issue of the New York Review of Books on the midterm election of November. Marveling at the American voters’ ability to self-destruct by handing the GOP a landslide victory, he points out that their real dissatisfaction with the government—articulated most energetically by the Tea Party folks—is the feeling that they are losing the country, and they are desperate to take it back. “All their lives,” he writes,
“they have assumed that their country is [sic] the most powerful, most prosperous, most democratic, economically and culturally the most influential—altogether the most envied and wonderful country in the world. They are coming slowly and painfully to realize that that is no longer true; they are angry and they want someone to blame.”
“Our requests and demands are more and more ignored in foreign capitals,” he goes on; “our vaunted military power suddenly seems inept: we are unable to win any war anywhere.”
All this was very interesting for me to read. In The Twilight of American Culture I argued that we were in a state of collapse and had no real future as a nation—a provocative, perhaps even aggressive notion at the time. Ten years later, this argument is, at least among American intellectuals, no longer that controversial. Indeed, it’s becoming a truism, and Dworkin represents nearly mainstream thinking on the subject. I just found it satisfying to see it in print, with no editorializing about it: the US is finished, and that’s just the way it is. History did not work out in our favor; what could be more obvious? Let’s call a spade a spade, and not try to put a positive spin on it, for chrissakes.
If this is now being articulated clearly among the intellectual class, it is nevertheless being felt subjectively by a great majority of American citizens, as Dworkin points out. Although objectively speaking, they cannot reverse the decline, they nevertheless are pissed as hell about it, and are lashing out in a futile attempt to reverse history. It’s a purely emotional reaction, without an ounce of intelligent reflection behind it; but then the latter has never been America’s strong suit.
Just coincidentally, while I was reading that issue of the NYRB, I was also reading the work of the Japanese philosopher Keiji Nishitani (or as the Japanese would write it, Nishitani Keiji). Nishitani wrote a book in 1949 called Nihirizumu (Nihilism), which was subsequently translated into English as The Self-Overcoming of Nihilism. In the postwar period, Nishitani was concerned about what he regarded as the emptiness of Japanese culture, and regarded the various manifestations of the latter as “mere shadows floating over the void.” Nishitani, who died in 1990, was of the Kyoto School, a city associated with medieval Japan and the world of craft, meditation, and religious traditions. The “centering” of the latter was giving way to the commercial chaos of Tokyo, the world of Sony and Mitsubishi and the economic frenzy of modern Japanese life. Nishitani felt Japan’s only hope was to recover its traditions (of course the Japanese paid no attention to this, and are now in a major economic tailspin); he did not feel that either the American or Soviet model could solve the problem at the core. He wrote:
“Today non-European powers like the United States and the Soviet Union are coming to the fore; in any event, they are the players who have stepped on to the stage of history to open up a new era. But neither ‘Americanism’ nor ‘communism’ is capable of overcoming the nihilism that the best thinkers of Europe confronted with anxiety, the abyss of nihility [sic] that opened up in the spiritual depths of the self and the world. For the time being they are managing to keep the abyss covered over, but eventually they will have to face it.”
As we all know, the USSR had to face it in 1989-90; the Leninism and Stalinism of the previous seventy-odd years were, in Nishitani’s words, “mere shadows floating over the void.” America, for various reasons, had a more impressive run: about 400 years, I would say, of doing something very similar, if with a different ideology. Its crackup began around 1971, and has proceeded in a much slower manner than that of the Soviet Union. But there is no papering it over any longer, as both Dworkin and the Tea Party understand (if in rather different ways). The hollowness that haunted us from the beginning is now terrifyingly present; the Void, like Mephistopheles, has come to collect its due. As in the case of the USSR, there is no stuffing it this time around, and Mr. Obama has proven to be representative of our emptiness, not a remedy for it. He’s nothing more than a logo, a guy who is all dressed up with no place to go.
So now Russia has become a kind of wasteland, governed by crony capitalism and KGB-style autocracy. Our own wasteland will probably take the form of crony capitalism and American Idol vapidity. Orwell in the one case, Huxley in the other, might be another way of putting it. But there is finally no hiding from the reality of all this. “The wasteland grows,” proclaimed Nietzsche in Thus Spake Zarathustra; “woe to whomever conceals wastelands!” Wise words, sure to be ignored by the American public and government alike.
©Morris Berman, 2010
“they have assumed that their country is [sic] the most powerful, most prosperous, most democratic, economically and culturally the most influential—altogether the most envied and wonderful country in the world. They are coming slowly and painfully to realize that that is no longer true; they are angry and they want someone to blame.”
“Our requests and demands are more and more ignored in foreign capitals,” he goes on; “our vaunted military power suddenly seems inept: we are unable to win any war anywhere.”
All this was very interesting for me to read. In The Twilight of American Culture I argued that we were in a state of collapse and had no real future as a nation—a provocative, perhaps even aggressive notion at the time. Ten years later, this argument is, at least among American intellectuals, no longer that controversial. Indeed, it’s becoming a truism, and Dworkin represents nearly mainstream thinking on the subject. I just found it satisfying to see it in print, with no editorializing about it: the US is finished, and that’s just the way it is. History did not work out in our favor; what could be more obvious? Let’s call a spade a spade, and not try to put a positive spin on it, for chrissakes.
If this is now being articulated clearly among the intellectual class, it is nevertheless being felt subjectively by a great majority of American citizens, as Dworkin points out. Although objectively speaking, they cannot reverse the decline, they nevertheless are pissed as hell about it, and are lashing out in a futile attempt to reverse history. It’s a purely emotional reaction, without an ounce of intelligent reflection behind it; but then the latter has never been America’s strong suit.
Just coincidentally, while I was reading that issue of the NYRB, I was also reading the work of the Japanese philosopher Keiji Nishitani (or as the Japanese would write it, Nishitani Keiji). Nishitani wrote a book in 1949 called Nihirizumu (Nihilism), which was subsequently translated into English as The Self-Overcoming of Nihilism. In the postwar period, Nishitani was concerned about what he regarded as the emptiness of Japanese culture, and regarded the various manifestations of the latter as “mere shadows floating over the void.” Nishitani, who died in 1990, was of the Kyoto School, a city associated with medieval Japan and the world of craft, meditation, and religious traditions. The “centering” of the latter was giving way to the commercial chaos of Tokyo, the world of Sony and Mitsubishi and the economic frenzy of modern Japanese life. Nishitani felt Japan’s only hope was to recover its traditions (of course the Japanese paid no attention to this, and are now in a major economic tailspin); he did not feel that either the American or Soviet model could solve the problem at the core. He wrote:
“Today non-European powers like the United States and the Soviet Union are coming to the fore; in any event, they are the players who have stepped on to the stage of history to open up a new era. But neither ‘Americanism’ nor ‘communism’ is capable of overcoming the nihilism that the best thinkers of Europe confronted with anxiety, the abyss of nihility [sic] that opened up in the spiritual depths of the self and the world. For the time being they are managing to keep the abyss covered over, but eventually they will have to face it.”
As we all know, the USSR had to face it in 1989-90; the Leninism and Stalinism of the previous seventy-odd years were, in Nishitani’s words, “mere shadows floating over the void.” America, for various reasons, had a more impressive run: about 400 years, I would say, of doing something very similar, if with a different ideology. Its crackup began around 1971, and has proceeded in a much slower manner than that of the Soviet Union. But there is no papering it over any longer, as both Dworkin and the Tea Party understand (if in rather different ways). The hollowness that haunted us from the beginning is now terrifyingly present; the Void, like Mephistopheles, has come to collect its due. As in the case of the USSR, there is no stuffing it this time around, and Mr. Obama has proven to be representative of our emptiness, not a remedy for it. He’s nothing more than a logo, a guy who is all dressed up with no place to go.
So now Russia has become a kind of wasteland, governed by crony capitalism and KGB-style autocracy. Our own wasteland will probably take the form of crony capitalism and American Idol vapidity. Orwell in the one case, Huxley in the other, might be another way of putting it. But there is finally no hiding from the reality of all this. “The wasteland grows,” proclaimed Nietzsche in Thus Spake Zarathustra; “woe to whomever conceals wastelands!” Wise words, sure to be ignored by the American public and government alike.
©Morris Berman, 2010
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