Another Take on the Sorriest Swindle of the Capitalist Century

“The Big Short,” film by Adam McKay, 2015

Finally, a film that does a book justice.  Like some weird convergence of Bertold Brecht and Michael Lewis, this film never lets you forget it’s a film by directly addressing the audience a great number of times, then actually being didactic and even polemical.  It directly explains what short selling is, what a ‘tranche’ is, what a ‘credit default swap’ is, what a mortgage bond is, an adjustable rate mortgage, the internal structure of collaterized mortgage and debt obligations (CMOs and CDOs), even those of the ‘synthetic’ variety.  If you are none too polite and like laughing at clueless authority figures – know-it-all equity bankers, SEC officials, Alan Greenspan, ratings-agency pooh-bahs, complacent billionaire investors, Wall Street Journal journalists – this film will provide the dark humor.  It is sharply funny and cannot be missed.
 

NYSE at 11 Wall Street - No longer open for public tours!

In 2010, Michael Lewis wrote the book on which this film is based. It became a story of the biggest financial fraud ever perpetuated in the U.S. – a criminal fraud involving the whole power structure of the U.S., from Wall Street outward.  This fraud has never been prosecuted because a system will not and cannot indict itself.  While the ‘heroes’ are 3 groups of contrarian investors who short the mortgage bond market and make mega-millions and billions, their profit comes at a price.  As they soon realize, millions of U.S. citizens will become unemployed, lose health insurance, go into foreclosure and become homeless – and that just in one country.  The contagion, as we know, spread to the financial systems across the world, especially to Europe, which had produced and invested in U.S. mortgage bonds too.  The effects are still with us.

For years Marxists have pointed out the fantasy role of finance capital at this stage of capital’s development and decay, and this film shows how it plays out in all its grubby, glitzy sub-reality.  The film ignores the legal preparation for the collapse in the Bush and Clinton administrations, and instead focuses on Wall Street itself, reflecting the weaknesses of Lewis’ own book.

The film only lightly touches on the misery of millions, showing one family living in their van and a 'job-fair' of the unemployed.  It acknowledges that the working people who were lured into these phony ARMs by slick real estate agents will be blamed by racists and classists, not the actual people who caused the crash.  Of interest is the very tough attitudes of the short-sellers, who had the intelligence and odd fortitude to stand up to the whole financial system.  People with a get along/go along method of life could not handle this situation.  But of even more interest are the sleazy, weak, pompous blowhards and conformist individuals making up these institutions of power.  We’ve all met them, or people like them.  Power is ultimately based on living people.  They are still with us.

Reviews of books “The Big Short” ,"Flash Boys" and "Liar's Poker,' all by Michael Lewis, below.  Review of the film, “Wolf of Wall Street,” below.  Many other books on the financial crisis have been reviewed below.  Use blog search box, upper left.

Red Frog

December 27, 2015

The “Hail Mary” Pass in Paris

Reflections on the Environment and Consumerism

I don’t know about you, but the ‘results’ of the Paris talks on global warming were upsetting, yet no one in the bourgeois press dwelled on it.  Instead the happy talk stenographers in the news prattled on about an historic agreement, echoing the government lines.  'Historic,' all right, historically bad.  The New York Times, the paper of ruling-class record, said Paris was “the last, best hope" to deter the more serious effects of global warming.  The post-mortems have now come in from the Left.

Flooding in Wales in 2015

James Hansen, no radical, called the agreement a ‘fraud.’  Hansen thinks the market will fix everything, and yet the agreement signed in Paris did not put a price on carbon.  Pricing carbon interferes with neo-liberal ideas of the market, which does not price environmental costs and never has.  Only Soviet economists back in the 1920s started to take into account environmental damage for economic plans.  They did not carry through with it, perhaps due to the rise of Stalinism. There are political economists right now who are doing so, but their influence is negligible.

The environment minister for Nicaragua said much of it.  Besides not treating or pricing carbon realistically, the agreement is A, voluntary – there is no enforcement except by Mother Nature.  We know how ‘voluntary’ efforts work among capitalist governments.  B, In the agreement there was no specific mention of oil, gas or coal as problems – the words were not even there.  Yet these carbon commodities hovered over the meeting like unnameable dark forces.  They were not named so as not to offend some of the richest corporations in the world. C, There was no bar on the building of coal plants or dirty oil.  D, Nor was there a mention of the elimination of the massive government subsidies to the oil/coal/gas industries.  Britain itself is a league leader in this respect, and the U.S. is no slouch either.  Government subsidies add up to $10M a minute worldwide, according  to the 'Guardian.'  E, The plan itself admits, even if carried out, it is still over the 2 degree Celsius limit that allows massive climate damage.  F, Conservation was not mentioned; reduction of production in useless items was not mentioned.  G, The plan will go into effect in 5 years, not immediately.  H, The military and aviation are exempted from doing anything about climate change.

Obama’s ‘all of the above’ strategy and the fake idea of natural gas as a ‘bridge’ fuel were implicit in the agreement.  While the U.S. signed this agreement, Obama’s mixed message outside Paris include arctic drilling and the TPP.  WTF?

Carbon emissions have been going down recently, but not enough to significantly alter the main trajectory of climate change.  This is due to recessionary economic pressures in many countries, which is the chaotic form ‘planning’ takes in capitalist economies. And what capitalist wants a ‘recession’?  He wants growth!   It is also due to the effects of real transitions to solar and wind power grids in some countries, electric & hybrid cars, conservation efforts by individuals and cities, the rise of bicycling, local food production, vegetarianism and organic agriculture, better mass transit, the growth of LEED buildings, forest preservation and other efforts.  China is actually leading the way in the world production of sustainable power generation due to their partially-planned economy.  Germany is also making massive strides, as the German state is still capable of some guidance of the market economy.

Ultimately though, the Paris ‘Hail Mary’ pass by the capitalist world governments is a failure.  This is significant.  This is the situation staring the world population in the face.  We are actually already experiencing the effects at this moment, as events in the Middle East and other failed states are not purely political or economic, but also have environmental causes – especially drought and food production in that part of the world. 

The center has not held.  

The real question is, what does this mean for the revolutionary socialist movement?  As dialectics shows, events sometimes are gradual, but build up to a qualitative change.  Climate disasters might roll along for years, but at some point, there will be a serious break – much as the inundation of New Orleans and later New York by hurricanes were ‘breaks’ in the understanding of climate change in the U.S.  It might not happen all over the world, but certainly country by country - until ‘critical mass’ is reached.  The happy talk issuing out of Paris will seem like whistling past the graveyard.  At that moment, the old ruling classes will be politically naked.  The capitalists will be shown to be buffoons and criminals.  Their governments will be ruled incompetent.  And the majority of the population will understand the time for reforms is over.

The political question will then be – a social revolution ... or a return to the world of human-eat-human barbarism, dictatorship, mass deaths, war and religious and national tribalism.  Socialism or barbarism? A cliché but one which never seems to go away - because its roots are based in reality.

The Shelves Are Full

I have had to go shopping a bit for the holidays, and something is bothering me.  In every store I go into, the shelves are groaning with massive amounts of merchandise of every variety.  Really junk mostly.  In each specific store there are hundreds of olive oils or hundreds of colors of lipstick or hundreds of cheap plastic toys or hundreds of T-shirts or hundreds of snacks or thousands of books or DVDs.  This is not just during the holidays – this is year-round.  There is every single absurd commodity that you could imagine, and every variation on it.  It seems our ‘freedom’ really is the freedom to buy almost any commodity we want - if we have the money. 

Something We Need

This is partly a product of capitalist overproduction, which is certainly evident.  It is clearly environmentally wasteful.  As George Monbiot of The Guardian humorously put it, you can…

“…buy them a solar-powered waving queen; a belly button brush; a silver-plated ice cream tub holder; a “hilarious” inflatable zimmer frame; a confection of plastic and electronics called Terry the Swearing Turtle; or – and somehow I find this significant – a Scratch Off World wall map…An electronic drum-machine t-shirt; a Darth Vader talking piggy bank; an ear-shaped i-phone case; an individual beer can chiller; an electronic wine breather; a sonic screwdriver remote control; bacon toothpaste; a dancing dog…” 

“In “The Story of Stuff,” Annie Leonard discovered that of the materials flowing through the consumer economy, only 1% remain in use six months after sale. Even the goods we might have expected to hold onto are soon condemned to destruction through either planned obsolescence (breaking quickly) or perceived obsolescence (by becoming unfashionable).”

But this is the ‘raison d’etre’ of the whole system.  This is what it does!  This is what it is good at!  This is its final wisdom.

What is unmistakable is also how cultural commodities like movies, music, books, magazines, games, TV and cable, internet U-Tube videos, software, applications, streaming videos, etc. are also a large part of the economic mix.  Entertainment and the hardware designed to view, use or produce it, is central to American capitalism.  In a way, even as the economy gets worse, these products are how the majority of the population is pacified and entertained while they are fleeced and dominated.  Sort of like the Roman Coliseum or the role of any drug like alcohol, or the prior role of the ‘boob’ tube.  Culture even beats out the diversion of professional sports.   

Is there a point where we will be over-saturated with entertainment?  I think that point is here or almost here.  The culture drunks might wake up after being over-sozzled by another yuk-yuk TV episode of “Veep.”  Then what?

Happy Holidays

Happy Solstice

Red Frog

December 25^th, 2015

Bombs or Vermont?

"Daydream Sunset – the 60s Counterculture in the 70s,” by Ron Jacobs, 2015

The 1960s – which ended around 1975 or later – exercises its influence to this day. Jacobs specializes in the history of this period, as he wrote a prior book on the Weather Underground. The book uses Jacob's own reminiscences as the basis for this short history. He was a young kid entranced by rock music bands like the Grateful Dead and also influenced by various Maoist groups. He traveled the country in the '70s as a post-hippie with friends, attending both musical and political events, working temporary shit jobs to survive. Jacobs helped organize some protest activities like rents strikes and marijuana 'smoke-outs' and seemed to be a freelance nomad. Music and politics in this book are entwined as they were at the time. A free-wheeling counter-cultural identity was formed in the 60s and 70s similar to the 'gig' economy of many of today's youth. The book describes a time that may be decidedly familiar to them.

1970s Hippie Commune

No one can encompass a decade, so Jacobs does his bit to fill in some blanks. He covers the collision of the counter-culture and history, paying attention to the groups that attempted to combine them, not ignore them. Familiar cliches about Altamont are supplemented with information on the activities of the White Panther Party, the Diggers, the Yippies and Zippies, the Mayday Tribe, High Times magazine, the German Autonomists and the Italian Autominia.

Jacobs highlights the more radical nature of the counter-cultural / political movements in Europe, as the proletarian-oriented groups there did not shy away from self-defense against the police. He contrasts it with the 'non-violence' of the U.S. anti-nuclear movement, which was dominated by middle-class pacifists. Jacobs illustrates the role class plays in the attraction of pacifism.  

Jacob's first concert was a performance by the Who that he and his young friends came upon accidentally in New Jersey in the '70s. It was downhill from then on! Jacobs went to a lot of concerts and festivals, including what he considers to be the last real hippie concert in 1977, in which the Dead headlined. His love of music leads him to note that Patti Smith, a working-class girl from New Jersey, was a key link between the beats, the hippies and the punks - a remarkable feat. He reminds us of the 'culture-wars' between sub-cultures that defined themselves by their choice in music - in disco, punk, rock and country.  Jacobs was an enthusiastic user of various 'hippie' drugs like LSD, psilocybin, weed and hashish and doesn't shy away from saying he inhaled.  He describes the history of the Vermont co-op movement which started around the “Free Vermont” slogan. This ultimately moved the whole state to the Left, including the formation of the Vermont Progressive Party and the various candidacies of Bernie Sanders.

The extreme poles of counter-cultural politics became, according to Jacobs, either moving to Vermont and forming communes to grow food, or becoming a Weatherman and planting bombs in government buildings. These poles reflected the fault lines among hippies between the more political and the more cultural revolutionaries.  

The book suffers from being breezy and familiar (at least to me). His description of 10 years of history sometimes just ends up being a list. His capsule of the Progressive Labor, for instance, describes it as a 'culturally conservative' group wearing ties, suits and crew-cuts. No one in 1970 in PL looked like this, so I suspect some other points might be a bit thin. Yet the book is a nice intro to this lost decade for those unfamiliar with rebel youth culture during that period.  And it also might help those who lived through it remember that decade in all its shabby glory.

Also reviewed below: “The Way the Wind Blew,” (Jacob's book about the Weather Underground); “Hippie Modernism,” an art show review; commentary on the Grateful Dead, “Let us now Praise the Dead,” and “Laurel Canyon,” about the LA rock music scene in the 1960s-1970s.

And I bought it at Mayday Books!

Red Frog

December 17, 2016

The Anarchist Moon

"The Dispossessed,” by Ursula Le Guin, 1974

Progressive science fiction is rare in the U.S.  Most science fiction concerns dystopias, machines gone mad, invasions by aliens or socially medieval societies set in modernistic technical worlds.  Optimism about social progress is almost nil – unless you read late Soviet science fiction.  Le Guin is an exception.

Annares, as viewed from Urras

Le Guin’s hero is an anarchist scientist Shevek, patterned after Einstein, living on Anarres, a somewhat barren planet on which exists an anarchist society.  The book is based on Sheveks’ visit to the ‘propertarian’ society that exiled the anarchists 177 years earlier.  The society is on Urras – a place recognizably like the capitalist earth - full of war, poverty, wage slavery, extreme class differences, female oppression, proletarian rebellions and repressive governments.  As if an advanced alien landed on our planet and was ultimately repulsed by what he saw.  

There are many obvious parallels in the book to institutions and ideas existing in 1974.  The USSR is here called Thu.  The attempt to unite quantum mechanics and relativity has an unconvincing parallel here.  The founders of anarchism - like Kropotkin, Godwin and Proudon – is here named Laia Odo and the philosophy, Odonism.  Odo even writes something called the “Prison Letters’ which will remind anyone of Gramsci.  The central city of A’Lo has many sky-scrapers and is reminiscent of New York; the U.N. is called the “Council of World Governments.” And so on.

The book is organized in a non-sequential way, with events in the future and past mixed.  This is a somewhat lame attempt to translate Shevek’s theory of ‘Simultaneity’ – where past, present and future all literally exist at the same time – to the book’s structure.  This theory results in Shevek providing the secret to a hyper-drive that could benefit everyone to more easily travel through space & time.  It is ultimately broadcast to the various worlds to avoid it being owned by the government on Urras, which has been trying to steal it from him.  Shevek has been attempting to create a version of the ‘unified field theory,’ here called ‘general temporal theory.’  This scientific hokum is actually one of the most unconvincing things about the book. 

Of most interest is Le Quin’s attempt to describe life on Anarres – a society without a government or capitalist firms that cooperates among its members to survive.  Anarres is a place where food is difficult to grow, so is subject to periodic famines.  The society somewhat resembles Maoist China without Mao or the CP.  Le Guin calls it ‘an administration of things.’  Physical labor is required of all citizens.  Criticism/self-criticism sessions are sometimes held.  People own few personal items and eat cooperatively in dining halls.  Children live in dormitories, not with their parents and are brought up by society at large.   There are no wages and no profits, so work is allocated by a computer in the largest city based on the needs of the society.  Education is valued, privacy is difficult to find and sexuality is free.  Individualism is frowned upon and is called ‘egoizing.’  Le Guin even mentions their use of solar, geo-thermal and wind power – this in 1974. Life on ‘the moon’ Anarres is simple and practical, and based on the cooperation of nearly everyone.

Yet even on Anarres, the dialectic operates.  As Shevek and a group of co-thinkers figure out, petty bureaucrats develop who control scientific issues, use group pressure to quash any individual ideas and limit the spread of practices they consider objectionable.  The society itself is closed off from contact with any of the other worlds in the universe – not just Urras but several others.  They won’t even let Odonian rebels from Urras join them, as they suspect they will be ‘spies.’  However at the same time they deliver raw metals to Urras, so they are not completely autarkic.

Why social criticism has to be set up as ‘science fiction’ has always bothered me.  It is as if a certain ‘cover’ must be thrown over a work in order for it to slip by internal censors among readers or the U.S. culture controllers.  This is the same method that is followed in any repressive society, where an opposing point of view must be hidden through analogy or surreptitious comparisons in order to soften the blow.   Nevertheless, Le Guin and people like Terry Bisson stand out for not letting the propertarian geeks control the genre.

Several science fiction books are reviewed below – Bisson’s “Fire on the Mountain,” Phil Dicks’ “Do Androids Dream of Electric Sheep?” as well as various dystopian books/films like “The Road” “Cloud Atlas,” “Divergent,” “Planet of the Apes” and the Hunger Games series. 

And I bought it at May Day Books!
Red Frog
December 6, 2015