Saturday, November 30, 2013

Remember Who the Real Enemy Is

"The Hunger Games (II) – Catching Fire ,” directed by Francis Lawrence, 2013 (Partial Spoiler Alert)

Hungry for revolution?  The word gets bandied around – the ‘Tea Party Revolution,’ the Syrian ‘revolution,’ the ‘Orange’ revolution, the Reagan or Thatcher ‘revolutions.’  It is clear that the bourgeois press doesn’t know the actual differences between one or another.  They use the term in a lazy way, referring to any ‘big change.’ Here in the U.S., this film has been critiqued by Andrew O’Hehir of as to what kind of a ‘revolution’ this film is talking about.  Is it a Left/Occupy one or a Right/Tea-Party one?   He doesn't know which.  O’Hehir is a red-diaper baby, but evidently this did not endow him with a consistent class analysis.  He's is fatally confused between different types of ‘populism’ or what the working class thinks. There are tips in this film as to what kind revolution is being discussed, and they are not very hidden.  

Donald Sutherland, who plays President Snow in the film and is an old ‘60s radical, said in an interview in ‘The Guardian,’ that he hopes the film inspires youth to become more politically active and actually foment some kind of ‘revolution.’  So what are the tips?  Well, the name ‘Hunger Games” certainly doesn’t discuss a topic of interest to the right-wing in any country, especially the U.S. Tea-Party Republicans.  Hunger is an exclusively left-wing issue.  In the film, Katniss’ real boyfriend in District 12, Gale, says that a life of ‘being hungry, working like a slave and being oppressed’ is not a real life.  Nearly every scene in District 12 shows miners shuffling off to work, not free-market small businessmen standing behind their shop counters.  Clearly, these issues of hunger and wage-slavery are not right-wing concerns. This is a picture of a proletarian Appalachia, not an outer suburb in Orlando.  And what of the main protagonist?  While the Tea-Party model of hero is the middle-class white male, this protagonist is a young woman who is no slouch in the 'action' department. 

While the Tea-Party opposes ‘the government’ they actually only oppose the parts of the government that benefit the poor and workers.  They endorse oppression, war and militarism - those parts of government that in the Hunger Games are represented by guys that look like Star War's storm-troopers.  

In a key scene, Katniss and Peeta visit District 11, where the dead black girl Rue was from in the first film, and Katniss makes an emotional speech about her. This is greeted by the black folks of District 11 with the ‘hand raised’ sign that has become a symbol of the revolution.  Clearly, Katniss has made a block between the mostly white District 12 and the mostly black District 11,whether she knew what she was doing or not.  Again, another sign that this revolution is not being run by aging middle-class white people, aka the ‘Tea Party.’  

If you watch this series you see that Katniss has killed only in self-defense.  In this film’s ‘game’ she makes a larger block with 5 others, including Peeta.  The new plan by Plutarch, the new game creator, is to show her to be as blood-thirsty as some of the others.  As she has become a symbol of resistance to the Capitol, this will supposedly undercut any optimism she projects.  Again in this film the “Careers” from District 1 are the main internal enemy, the most blood-thirsty and ‘careerists’ too.  A careerist is just another name for a yuppie or upscale, cutthroat business person.  Not exactly Tea-Party terminology. 

Other evidence that this is more of a ‘left-wing’ revolution – i.e. a progressive one that deals with the problems of poverty, hunger, wage slavery and state oppression?    As Marxists know, the ‘state’ in a bourgeois society (which Panem clearly is) is not an independent entity lording over everyone, but actually represents the rich and the capitalist class.  The people in the city of Panem are disgustingly rich.  Their clothes and makeup are indicative.  One scene even features a drink that is the modern equivalent of the vomitorium of Roman times.  It will make you throw up your food so that you can 'taste' yet more food. However wealth is not a bad thing to the 'prosperity loving gospel' of the Tea Party.  They are the sometime allies of Wall Street, but definitely they all want to be rich. On the military side, the soldiers from the Capitol who occupy the Districts are called “Peacekeepers.”  it is not just the name of the Colt 45 used against native Americans. Can we get any more Orwellian and true to life?  The real U.S. 'peacekeepers' in Iraq and Afghanistan were supported by many in the T-Party.

Another is the key phrase in this film.  At a pivotal point in this Hunger game, Katniss aims her arrow at another tribute and – for the first time – might let it fly outside the rules of self-defense.  The tribute she is aiming at says, “Remember who the real enemy is.”  And she aims her arrow in another direction, into the sky matrix. 

Now the phrase, ‘Remember who the real enemy is” is such a standard Marxist and leftist term that it screams so.  Not black people, not gay people, not foreigners, not the poor, but the people who run everything, who profit off of everything, in every country.  The ruling class – the corporations, the wealthy, and their politicians.  These are the real enemies. No matter their color, religion, party or nationality. 

Katniss is portrayed as mostly an emotional thinker by Suzanne Collins, who wrote the novels on which these films are based.  This is a standard trope in fiction as an attempt to link the non-political lives of most people, who supposedly experience politics ‘emotionally,’ and bring them to a more conscious and scientific political view.  Katniss gets angry, gets sad, wants to run away, just thinks about her family and others in her ‘home’ in District 12, and generally doesn’t have a plan as to how to beat the Capitol.  Until she does.  I might add, there is a subversive conspiracy afoot that helps her.
Now I don’t know about you, but merely calling the capital of Panem, “The Capitol” might tip off some conscious viewers that the Capitol and capitalism are linked.  Writers do not name cities at random.  Again, not a word-association a Tea-Party member would make, but then, it might have been an accident.

Collins, who in 2008 wrote the youth books on which this series is taken, says she based them on the juxtaposition between reality television and the war in Iraq.  2008 was a year in which the U.S. experienced an economic collapse and unnecessary wars on two fronts.  In an interview, Collins talked about how the novel deals with ‘severe poverty, starvation, oppression and the effects of war.’ (Wikipedia)  Again, not Tea-Party topics.  Is she some kind of subversive or Marxist?  Doubtful.  What is interesting about culture – especially film - is how it reflects certain issues, even against the intentions of the writers or filmmakers.  She seems on the left and probably a later sympathizer of Occupy, and never realized how her books would hit a nerve.

As to whether this film is better than the first, or worse, it is up to you.  Generally, the newness of the situation is less in a follow-up film, the characters are known and the plot line more predictable.  All this is here, so the startling newness of the first film is gone. (Read review of first film, 'Hunger Games - Mockingjay,' below)  But, as can be seen, the series is changing gears towards revolution.  

Is the film a placebo?  Televised revolution or resistance as opposed to the real thing can actually deflate, or provide a release for rebellious feelings - if the situation is not yet at a certain point.  It is like the valve on a teapot.  "I like the "Hunger Games" - therefore I'm a rebel.  "Now where's my Facebook prompt?" Most middle-class authors fall apart at the end of books, as they cannot bring on a real or true ending. They cannot follow the logic that they created to its bitter end.  Will Collins fall apart in the last installment or not? Only the readers of the books know for sure.   

Red Frog
November 30, 2013 

Friday, November 29, 2013

A Criminal Event

Andersonville Prison, Georgia, visited November 25, 2013

Sitting in the midst of the cotton fields and piney woods of south Georgia is a grim reminder of the fanaticism and carelessness of the southern planter class.  Thousands of tiny marble gravestones mark the emaciating, sick and starving bones of Union solider who died in an ill-conceived and shabby prison called Andersonville. Like the concentration camps of the Nazis, Andersonville became a vast warehouse where men died through neglect and brutality – though not through labor.

It is a vast field surrounded by woods that slopes from two sides down to a little creek ironically called “Sweetwater.” The field was surrounded by a 15 foot fence with guard towers every 50 feet.  The camp had no adequate housing, unlike most northern camps, but instead a field covered with homemade tents, blankets and canvas stretched over branches.  The was no ostensibly fresh water except for the creek running through it from the west.  However, the Confederates had their latrines and waste water upstream, so the water brought death-dealing diarrhea and dysentery.  Nearly 13,000 soldiers died in only 14 months. During its existence, Andersonville held 45,000 prisoners, 32,000 at its height at one time.  

The camp was commanded by Captain Henry Wirz, the only person hung for war crimes after the Civil War.  You must wonder why Jefferson Davis and the planter politicians  who clamored for war escaped any punishment whatsoever.  These men later combined to defeat Reconstruction and re-introduce  90 years of segregation and black labor oppression to the South.  Wirz was a crude, limited man who had no capacity to deal with the disaster that befell the prisoners at Andersonville.  He instituted the ‘dead line’ – an empty space between the walls and the tents in which anyone could be shot.  As he was quoted in the film shown at the National Park, “god” would be the prisoners only help.  

The film shown at the park indicates that these men were not exchanged for Confederate prisoners because Grant and the Federal government would not do so.  This was because the Confederate government had refused to exchange black Union soldiers, returning them to slavery or to work camps instead, or just killing them.  This principal irritated the white Union prisoners to the point where the small group of black prisoners had to keep together in Andersonville to protect themselves.  The film’s only reason for this policy was that it would deprive the Confederate army of soldiers, as many freed prisoners returned to that army.  An even more important reason was that by that time in 1864 the Union army was made up of between a ¼ and a 1/3 black soldiers.  To undercut a good chunk of your army and also the Emancipation Proclamation would cause unrest among black soldiers and civilians.  It was actually the racism of the Confederacy that created this situation, not the stubbornness of the Union.

Another flaw in the National Park is that the museum located there is not just about Andersonville, but is dedicated to all American POW’s in all wars.  No other civil war park shares a duty like this.  In a sense it dilutes the meaning of Andersonville.  John McCain’s book about being a prisoner in Hanoi shares space with the memories of various union soldiers who wrote about the dire conditions  in the camp.  The prisoners were marched to the stockade, let inside to a walled holding area, then the gates to Andersonville opened, and they saw a huge field of dirty canvas and thousands of skinny men in threadbare clothing standing, staring at the 'new fish.'  As they said, “Is this hell?” 

There are monuments on the grounds from various northern states where their soldiers camped, as units stayed together for protection.  The fence lines have been re-created in two places, including the entrance where prisoners entered the camp after a march through the town of Andersonville and its railroad station.  “Providence” spring still provides water.  This was the location where a lightning strike hit in the dead zone and fresh water began to burble out of the ground – the only actual fresh water the prisoners ever had.  Sweetwater Creek is still there, but much smaller than it was at the time.  Various outbuildings, like the shabby ‘hospital’ and others, are marked.  Confederate earthworks defending the fort remain.  One of the most interesting events at Andersonville was the battle inside the camp against criminal gangs that stole food and injured other prisoners.  Their leaders were eventually tried and 6 hung by the prisoners.  This event was the central focus of the film, “Andersonville.” 

One of the continuing controversies over Andersonville is whether the Union army under Sherman should have made more of an attempt to free the prisoners at the camp.  Union cavalry under Stoneman proceeded to Andersonville under Sherman’s orders at one point, but the camp was evacuated upon his approach and Stoneman captured.  Thousands of sick, wounded, hungry and dying men would have required either a serious wagon train or group of railroad cars, and massive amounts of rations and doctors, along with soldiers to protect them.  Sherman was about 95 miles away, heading to Savannah, and would have had to seriously divide his army.  The failed attempt by Stoneman probably also had a role.  Any rescue of Andersonville would have had to be planned long before Sherman headed to Savannah.

What is most important about Andersonville is that it was always a poorly planned and poorly supplied camp, just as the whole Civil War was a poorly planned and cruel attempt to defend slavery.  While the Confederate Army had successes, the material and most of all political will was not there.  Many in the South did not support secession and the war, and when the war turned against the Confederacy, the political support evaporated slowly, like air out of a hastily blown balloon.  The slavers had launched an ‘adventurist’ war through coercion and bluster, and all paid.  Visit Andersonville, which is ‘hallowed ground,’ and remember.  (Read review on "Travel," below.)

Red Frog
November 29, 2013

Wednesday, November 20, 2013

Cops Again

"The Wire,” First Season, created by David Simon, HBO 2002

I’ve resisted watching this series because it seemed like an ordinary ‘realist’ cop drama, in spite of all the rave reviews it got from mostly white media critics.  And why do we need another fake ‘realist’ cop show? 

I was right. 

“The Wire” refers to taps and recorders put on pagers and public phones in a low-rise housing project in black west Baltimore, where heroin and cocaine are being dealt.  The object is to find and arrest a shadowy drug dealer who has killed 12 people to protect his business.   It is a picture of a decaying city.  A corroding urban capitalism that either generates prostitution, drug dealing, addiction, civic and police corruption, racism and death - or is helpless to fix the fundamental fuckupedness of African Americans.  Take your pick based on your political proclivities, as the show is a mirror, in spite of its creator’s intentions.  Watching “The Wire” is like taking a bath in cold, dirty water. 

Simon shows a world of helpless yet human black people, who have no hope or alternative.  It is promoted as a criticism of capitalism by left-liberals.  Actually, conservatives also like ‘The Wire’ because it reinforces their bigoted and racists ideas.  And to me, that is the heart of this show, which makes it hard to watch. Reihan Salam gets it when he says: “it strengthens the hand of paternalists of the left and determinists of the right. In that regard, the show is frankly destructive.”

Black people are nearly all strippers, prostitutes, junkies, drug dealers, party animals, crooked Democratic politicians or killers.  You may ‘kind of’ understand that they were forced into these lives, but actually the episodes do not show that.  Two main black characters are not hetero – one skilled female cop, Kima, is a lesbian and the other is a black gangbanger, Omar, looking for revenge upon the death of his boyfriend.  That is a record – 2 black homosexuals as major characters in one program.  And what might that mean?  There are 2 sympathetic old black ladies and one sympathetic young black woman that are on screen for a minute each, but no men.  The black working class is invisible.  That is a choice that the writers’ made. 

No doubt much of this is true to life for a part of the black community, which is why liberals like the show - so that they ‘know’ the misery of the black underclass.  But it has not led to any real change among the Democratic Party faithful.  As Zizek explains, the subtext of watching a show about poverty means you are also actually ‘doing’ something about it too!

‘The Wire’ features the standard trope of a white ‘good-guy cop,’ McNulty, pursuing Avon Barksdale, the black killer dealer, ignoring the roadblocks put up by corrupt higher-ups in the Baltimore police.  They are helped by a ‘good-guy’ white judge and a white female prosecutor.  And joining McNulty are 3 honest black cops – 2 being the only ‘clean’ black males in the bunch.  Although one cheats on his wife and drinks too much and McNulty is freshly divorced and drinks too much too.   This is another standard TV/movie practice to give the cops that ‘flawed humanity’ we all love so much.

A good number of the white cops on the force are portrayed as lazy, scheming, stupid, violent and really stupid.  Their guns go off accidentally, they drink at work, they beat up black people at 2 a.m. for no reason, they scheme to hurt themselves and get disability, they listen in on phone taps that they shouldn’t.  They have no understanding of stakeouts, police investigative work in civil records, looking through reams of documents, and mostly understand being a cop as being a ‘thumper’ or seat-warmer.  One of them is a regular John Goodman fatso comedian, and he’s one of the best.  These folks are the comedic high points, but even some of them become gradually sympathetic as they get better at their job, being led by McNulty and his female side-kick. 

The cops are the heroes, and we root for them to get Barksdale.  Barksdale, not capitalism, is the real enemy here.  If only he’d stop killing people, everything would be fine.

‘The Wire’ does show that drug dealing could lead Barksdale to becoming a straight businessman.  He has bought a strip bar, funeral parlour, copy shop and much real estate along a particular stretch of one main street.  He’s taking ‘finance’ classes at a local community college.  He tells the guys at his copy shop that the store is not just a front, but could become a real business.  Like the Mafia, he is laundering his money into legitimate businesses.  This is another form of ‘primitive accumulation.” As Marx said, at the bottom of many fortunes is a crime, or many crimes. 

It seems that Barksdale is paying off a local black politician, Senator Clive Davis, and perhaps his real estate purchases have something to do with a plan with real businessmen – or he’s going to open a mall development himself!  Even the black middle-class is suspect.

Recently, David Simon, the creator of “The Wire” and a former police reporter, recently responded to a statement by the Baltimore police department.  Police Commissioner Frederick H. Bealefeld III said of the series, “It was a smear that will take decades to overcome.”  In a long response, Simon opposed the crappy and fraudulent drug-war practices of the Baltimore police, and supported more intelligent and less corrupt policing.  Since the end of this series, this has supposedly happened, as the series focused on a 20-year period from the late ‘80s until the late ‘00s.  Has Baltimore then become a Commune, a workers’ or peoples’ council republic?  Has poverty and racism been abolished?  Or have the cops tweaked their methods?

One cannot avoid the feeling while watching ‘The Wire’ that the police and the criminals are actually two sides of one dialectical coin – poverty and repression are essential twins to the functioning of modern capital. The cops are like a gang in blue.  The drug dealers are quite careful, almost military, and handle their business like experts. 

The brokenness of nearly every urban institution in ‘The Wire’ in Baltimore and by extension other cities, shows that capital indeed is reaching its terminus. This is really not news, at least not to Marxists.   However, not everyone who watches this season will walk away with that thought.  Again, it is a mirror, much like the “Hurt Locker.’ To be fair, each season focuses on a different ‘failing’ institution, and the first is mostly about the police department.   Yet it seems really to be about ‘failed’ African Americans. In the next season, Simon is going to show how crappy the long-shore unions are in the port of Baltimore.  Failing workers can’t be far behind.

Ishmael Reed, a black radical and professor at Berkley and former member of the Labor Party, criticized “The Wire” for using clich├ęs of black people.  He said it portrays drugs as a ‘black problem’ though whites use more drugs.  He opposes teaching “The Wire” in university sociology classes, as if it is some full depiction of poor black society.

Simon recently wrote an essay in reaction to Edward Snowden’s disclosures, an essay that reinforced the view that the vast power of the national security state and its expansion are entirely justified, because otherwise it would make America ‘vulnerable to terrorists.”   This guy is not actually a radical evidently. As far as I’m concerned, he originated “Treme” as a mea culpa for “The Wire,” as Treme, while somewhat nostalgic of New Orleans as a ‘cultural space,’ is not mostly filled with negative images of black people and heroic images of cops.  (‘Treme,’ reviewed below.) 

P.S. - Well, I may have been too hard on David Simon.  He published a somewhat convoluted editorial in the Guardian on Saturday, December 7 talking about the 'two Americas.' He said that Marx had a point with his analysis of capitalism! - but Marx's solution was wrong.  He calls the U.S. a 'horror show' and wants a society where capital and labor sing 'kumbaya,' not just a rapacious capitalism.   Ain't going to happen, as it only happened between, oh, 1946 and 1975.  The nostalgia for this period is the inspiration for many left-liberals.  But at least Simon is trying.

Someone burned the season for Mayday.
Red Frog
November 20, 2013

Saturday, November 16, 2013

The End of the World as We Know It

"House of Cards – A Tale of Hubris and Wretched Excess on Wall Street,” by William D Cohan, 2009

It seems that every time a great American capitalist institution bites the dust, a book is written about its fall.  We have “Smartest Guys in the Room,” a documentary and book, and “Power Failure,” a book, both about the bankruptcy of the massive energy trader Enron; “When Genius Failed,” the story of the collapse of the hedge fund Long Term Capital Management; “The Last Tycoons,” Cohan’s own tale of the near fall of Lazard Freres; “Liars Poker,” (reviewed below) about the 80s junk bond and mortgage trading at Salomon Brothers; “Barbarians at the Gate,” the ending of RJR Nabisco, and “A Colossal Failure of Common Sense,” the inside story of the bankruptcy of Lehman Brothers.  And on and on.  It seems the books are piling up.  If you enjoy watching rich people fail, you will enjoy books like this.

This one is about Bear Stearns (“BS”), an 85 year old brokerage that ended in March 2008 when it was forced to merge with JP Morgan Chase by the government.  The story behind these events is the increasing consolidation of financial capital, as the weaker capitalists are killed or absorbed by the stronger.  Now perhaps 6-7 major firms dominate Wall Street, and increasing oligopoly is the order of the day.  Yet no one mentions this rather obvious process in the ‘financial press’ or even among the pro-capitalist writers of these books – it is looked at as natural or invisible.  This consolidation is a direct result of the financial collapse in 2007-2008, and is a normal result of every crisis under capital. 

These firms are now much too big to fail, and survive off the ultra-cheap interest rates at the Fed window. Every time there is talk about the government doing some fiscal ‘easing’ – raising these rates - the market plunges.  “Moral hazard’ barely exists for them. Yet if these firms can’t go through the normal bankruptcy procedure, ultimately during the next crisis these firms will have to be completely nationalized by a government. Leading one to think that the capitalist financial sector has reached the end of its rope as independent institutions under capitalism.  Marx pointed out that capital will one day burst its own bounds and this is what is happening.  Social ownership of banking is the only logical conclusion one can reach.

Cohan tells the gripping story of 10 days that shook the Bear Stearns world in March 2008.  In those 10 days, it went from a firm worth $67 a share to a firm worth $2, then $10 a share.  It was unable to continue without a $30B line of credit from the U.S. government and a shotgun marriage with Jaime Dimon’s JP Morgan.  This really would have been a better main storyline for the film, “Money Never Sleeps,’ (reviewed below) though one scene borrows from the Bear Stearn’s / Lehman story.  Ultimately Timothy Geithner and Hank Paulson of the US Federal Reserve got involved when investors withdrew money, overnight lenders refused to loan, short-sellers attacked the stock price, credit default swaps ‘insurance’ rates went sky high and margin loans came due - all this because of BS’s massive positions in souring mortgage securities.  The NY Fed did this because Bear had over 5,000 trading and credit-default counter-parties. 

What is astounding is how disorganized Bear was during some of these events, with directors scattered all around the country – at bridge tournaments, swanky vacation spots, golf courses, posh restaurants and hotels, or ensconced in Westchester.  All these multi-millionaires were blindsided by the failure of the institution they helmed. Every prediction was always rosy until its too late.  To this day they don’t admit any mistakes.   

Cohan then covers the long history of the firm, and its 3 principals – the towering, loud Cy Lewis, the mid-western shop-keeper ‘Ace’ Greenberg and the street gambler, Jimmy Cayne.  You might have never heard of these people, but they were well known on Wall Street.  Their main interest was to ‘make money’ and that was the only purpose of Bear Stearns.  Lewis began Bear’s fortune gambling on railroad bonds during World War II, which he bought cheap and held until the war was over, when they skyrocketed back to par – 100% value.  Greenberg specialized in arbitrage trading with Cy Lewis.  Cayne bought up many NY muni-bonds for cheap during the near bankruptcy of that city in the mid-1970s, and when the city recovered, so did Bear Stearns.   

Bear was mainly a bond house, which means it specialized in corporate, government and municipal bonds.  This is what led it to take such a large position in mortgage bond derivatives like CDOs and other structured products full of sub-prime mortgages, and what led to its failure.  It also did a large business in clearing small brokerages’ accounts, which is basically a license to print money, with little legal exposure.  You can’t quite tell when you read this material if Cohan admires these people or not.  We are treated to their stories of financial ‘genius,’ as if we are reading typical biographies of great businessmen, but then he lets the air out, and illuminates the fact that their ‘strengths’ become their weaknesses.

Cohan has an interesting section on the effect of Clinton and Bush I efforts against red-lining in poor and minority neighborhoods, starting with the 1977 Community Reinvestment Act.  This is the traditional Republican explanation for the crash, but it is only part of the story, yet Democrats ignore it completely.  A more nuanced look shows that capitalism, by either party, cannot provide housing for poor people, period.  “Red-lining” – i.e. not making loans in certain neighborhoods - was turned on its head when mortgage companies realized they could securitize these loans as products on Wall Street, and then they went to ‘green-lining’ certain neighborhoods and people.  Which meant giving ‘no paper’ loans to people that could not possibly afford them, and ultimately fabricating court documents and mortgages themselves.  The purpose is never putting a roof over a family’s head – it is always profit, in the case of either ‘red’ or ‘green’ lining. 

Cohan shows how Bear Stearns as a firm calcified under its iron-fisted multi-millionaires, especially towards the end under Jimmy Cayne.  Cayne refused to diversify the firm into asset-management or retail, into real M&A, into buying other clearing firms or companies that would expand its financial base.  They rode their gold horse into the grave.  Cayne was a guy who never read a book except a fitting one about Machiavelli and Wall Street.  He was a champion bridge player, hired other bridge players, built a large, expensive building in lower Manhattan on Madison Avenue, and kept a Chinese motorcycle in his office that he never rode.

Bear Stearns was an outsider firm that talked tough, paid the largest executive payouts on Wall Street and went its own way.  The slipped through the 1987 crash, as bonds recovered.  They escaped the ‘tech wreck’ of 2000 in better shape than most.  The moment this attitude all came to together was when Long Term Capital Management (“LTCM”) was failing in 1998.  Bear cleared trades and operational issues for LTCM, so their opinion was vital.  Some of the firms in Wall Street called a meeting to decide what to do, as LTCM was a contra-party to all of them – they owed each other money.  All but Cayne and Bear pledged to loan LTCM money to stave off a larger collapse.  The other firms did anyway, postponing LTCM’s problems for awhile, but many never forgot.  When Bear’s time came in 2008, no one really wanted to help them stay afloat.  Instead they got a run on their ‘bank’ as firms refused to trade with them or loan them money or keep money inside the firm. 

How did it exactly happen?  It is instructive but perhaps boring to wade through the convoluted assets and personalities running this outfit, but ultimately it’s a familiar picture.  They started two very, very profitable hedge funds under guys named Spektor and Cioffi that claimed they had 6% sub-prime mortgages, but actually had 80% in sub-prime.  As lawsuit documents show, Cioffi lied on customer statements, hid the declining value of the assets and had no compliance relationship with the BS holding company.  The hedge funds became insolvent in 2007, Bear letting one collapse and the other rescued and then closed after investors redeemed millions, margin calls were made and overnight ‘repo’ loans stopped coming in.  In August 2007 after this debacle, Bear was leveraged at 44-1 – i.e. they actually had only $1 for every $44 in debt, and their stock had dropped precipitously.  This, mind you, is a firm that was worth billions.  However, this was allowed by SEC rules for ‘investment banks.’  Bear financed itself every day with millions of dollars in short-term debt.  The also used depositors money (again, legally) to finance other parts of their business.  

As the Republicans say, would you run a household like this?  ‘House of cards’ or ‘paper tiger’ is not far off. At the end, BS worked on half-hearted merger deals with the Chinese Citric Finance group, turned down the Japanese Sumitomo Bank, and refused to raise new capital as every other firm was doing. They still thought that doubling-down on investments in mortgage bonds was the answer! Cioffi and others were indicted for the obvious misrepresentations of the BS hedge funds, but as per the ‘velvet glove’ treatment of the Obama administration, no conviction has been pursued.  (See reviews of "Griftopia,", "The Big Short" and Greenwald's "With Liberty & Justice for Some," re the failure of prosecutions, all below.)

But were they unique?  Cohen ends the book with more falling dominoes – Lehman, AIG, Merrill Lynch, Fannie Mae & Freddie Mac, Bear only being the first large one.  Reading these books is instructive because, while I work in the securities industry, knowing how your economy works might help us all read the tea-leaves the next time.  And there will be a next time.  Just look at the markets, which are the literal heart-beats of modern capitalism.

And I got it for free at work
November 13, 2013
Red Frog

P.S. - Geithner, former head of the Federal Reserve, has just announced he will be joining Warburg Pincus as a director of this private equity firm.  The revolving door revolves.

Saturday, November 9, 2013

Worse than Wage or Debt Slavery

"12 Years a Slave,” film directed by Steve McQueen, 2013. 

This European film has been reviewed as the ‘anti-Django’ – a straight-forward look at slavery without the revenge fantasy part.  It comes off more like a PBS production lacking in emotional depth, which even in this version seems to prettify slavery.  For one thing, people sure don’t work much in this film.  Yet that was the whole point of the system.  Nor does anyone sweat while working, yet this is hot and humid Louisiana bayou country.  The other drawback is that Solomon Northrup, the focal character, is a middle-class black, and his fate is individualized in the film.  It is as if we can only feel sympathy for individuals, not groups.  This is a conservative tactic by film makers.  The film obviously resonates with the fears of even today's middle-class Afican-Americans who know they are one step away from a police killing, a layoff or a scandal that loses them their livelihoods. 

This is the 1841-1853 true story of a free black man, Solomon Northrup, living in Saratoga, New York.  He is lured to Washington, D.C. on the promise of work playing his violin by two overly-friendly white men, then drugged, chained and sold into slavery.  He moves as property between slave owners, from what seems like Charleston, but is supposedly New Orleans.  The plantations used as sets are 4 real ones in the New Orleans area, one a few miles from where the real Solomon Northrup spent most of his 12 years.  Northrup starts with a ‘liberal’ slave owner Ford, who partially protects him.  Ford orates from the Bible while a slave woman cries about her stolen children; and eventually sells Northrup to another slaver after Northrup defends himself against a punk racist ‘cracker,’ Tibeats, who had tried to beat him.  Northrup ends up with the brutal ‘Epps,” a red-bearded religious type who drinks too much, is capricious and sexually abuses one of his slaves, Patsey.  But since slaves are property, evidently none of this is immoral or a crime. 

The film covers many of the familiar totems of the slave narrative – the whipping post; blacks who assist the slave masters through fear; the white wife who resents her husband having sex with ‘animals;’ the (overly black) mixed progeny; the outlawing of reading and writing by slaves; families torn apart on the selling block; random violence and perversion; religion in the service of crime; and more uses of the n-word than even Tarantino.  It does add some details.  It shows how even the ‘liberal’ massa was part of the same system, no matter his personal feelings.  It also doesn’t hide the fact that the so-called wonderful character of females was of no avail, as Epps’ wife is perhaps even more brutal than he.  It even has one black woman who has successfully escaped the whip or labor through the affections of her plantation owner – sort of the ultimate ‘house negro.’  In a somewhat confusing soliloquy, she declares herself content, while all around her slavery continues.  The film’s most obvious point is that slavery corrupted the white people more than the blacks – but it didn’t stop there.

The most powerful scene is when Northrup is almost hung by Tibeats, and is left partially hanging on his tiptoes for hours while slave children play and slave women do their laundry.  There is little solidarity except for one woman who brings him water.  Ford eventually cuts him down.

Every southern white is of no help to Northrup.  One key event is when a poor white man arrives to work for Epps for wages, picking cotton, and picks the least.  He lives in the slave quarters with the others, tends to Northrups whipped back, and seems sympathetic.  So Northrup trusts him, giving him some money to mail a letter north and, after agreeing to mail the letter, the man betrays Northrup to Epps. 

Northrup’s only help is a Canadian carpenter – Brad Pitt - that comes to build a gazebo on Epps’ plantation, and is overheard lecturing Epps on the evils of slavery.  Northrup again trusts the carpenter, and this time, his trust is not misplaced.   Northrup is eventually rescued by his white northern friends, who bring his legal papers.  In a key scene, he looks back at Patsey and all the rest of the remaining slaves as the carriage moves off the plantation.  To my mind, this is the view of the ‘talented tenth’ who are able to escape some economic bonds, while the other 90% of the black population continue to suffer.  These films about slavery seem to be stand-ins for the present condition of the U.S. black population.  Right now, the black middle class as exemplified by Obama has abandoned their ethnic compatriots. The real Northrup became an anti-slavery activist at least. 

This film punctures the ideas that liberal whites, women, house negroes, even your fellow slaves are of much help in an oppressive situation like this.  One thing I find amazing is that the film says Northrup's only friendships were with two women, when you’d think all the male slaves would be very, very tight too.  The only violent resistance is at the outset, when one black man clumsily tries to attack one of their captors, and is stabbed to death.  A true story, a prelude to the coming storm, but a film that is more like ‘Roots II' than anything else.

Red Frog
October 9, 2013

P.S. - Presently the estimates of the number of virtual slaves in the world now is between 2.4 (ILO/U.N.) to 27 million people (Kevin Bale).  The jargon is 'human trafficking' which includes forced labor or prostitution, debt bondage, forced marriage, child imprisonment for some kind of exploitation, and plain slavery.  It is estimated that there are 60,000 people living in the U.S. who fit into these categories. Recently a case of a domestic servant from Kenya came to light, who was imprisoned in her home by a rich Saudi woman in Irvine, California along with 4 other people from the Philippines.  This kind of slavery is a reflection and natural outgrowth of the capitalist labor system worldwide, in which workers have few or no rights, and many governments do little to actually end the practice, as it is very profitable. 

Wednesday, November 6, 2013

Compassionate Cons versus Racist Cops

"Prudence Couldn’t Swim,” by James Kilgore, 2012

Some people think leftists can’t write.  Kilgore proves them wrong, but then he was an ultra-leftist.  He creates an interesting noir story of cons-with-hearts-of-gold who attempt to solve the Oakland, California murder of a beautiful Zimbabwean woman.  Kilgore spent time in the Symbionese Liberation Army, escaping to South Africa to hide as a teacher for many years, then spending more time in a U.S. jail upon giving himself up.  He uses this experience to flesh out the African side of this story – of desperate girls who try to find sugar daddies to get themselves out of lives of grueling poverty and labor.  And by imbuing the book with fear and hatred of the police, fear of life in the joint, and the knowledge of living a double-life.  This is the best part of the novel, as some people should be able to sympathize.  We all live double-lives, don’t we?

Calvin Winter finds Prudence, his mail-order bride, floating face down in his upscale Oakland pool one evening.  Calvin is an honest but none-too-bright small-time hustler who used to smuggle drugs, then people, and is now trying to go somewhat straight.  Now he has another gig.  He met Prudence while getting U.S. husbands for poor women from third-world countries who are trying to escape their fates.  He spends the rest of the book with his ‘SS’ prison buddy Red Eye trying to trap the killer, narrowing it down to two rich creeps, and always being interfered with by vicious, racist cops.  (“SS,” see review of “The Outlaws,” below.)

Calvin has a thing for keeping his carpets clean, likes a good scam, sports a harelip and is very short, so Winter has his comedic moments. Kilgore portrays him as a typical American schmuck who can’t find Zimbabwe on a map.  He never gets to sleep with the beautiful Prudence, even though he is her legal ‘husband,’ which grates.  Red Eye is loyal, way fat and has a hobby of entering hot-dog eating contests, which is funnier than it sounds.  The book is a conventional noir, but illuminating the hard life of African immigrants to the U.S. – though portraying most immigrant women as gold-diggers is a two-edged sword.  Police in noir film or books, unlike TV cops, are usually either crooked or stupid, and in this book they are both.  Which they are in reality too.  TV cops, on the other hand, are geniuses, as we all know. (See commentary, “The Meta-Meaning of Ridiculous Cop Shows,” below.) 

There is a small cottage industry of making genre books less conventional and predictable, and Kilgore gives it a somewhat successful go.  What is really missing from leftist fiction is actual books about the working-class, as this one only glances on the issue. Most books that depict the working class are comedic, or don’t exist.  Just as black people get on TV to be buffoons or criminals, workers end up the same way.  This is evidently because many leftist writers have more knowledge or fondness for lumpens than actual people who work in a warehouse, or sit in a cube all day. 

And I bought it at Mayday Books, which has a good selection of progressive fiction.
Red Frog
November 6, 2013