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Fiction and the carbon economy


The concept of imaginative fatigue in the Anthropocene presents a kind of heady platform for lighting into all kinds of literary corruption and gatekeeping issues that are holding the rising waters in place, out of view or at least off the page:

This makes itself evident in the paucity of fiction devoted to the carbon economy, something the Brooklyn-based Indian writer Amitav Ghosh addresses in his marvelous recent book, The Great Derangement, writing, “When the subject of climate change occurs . . . it is almost always in relation to nonfiction; novels and short stories are very rarely to be glimpsed within this horizon.” Ghosh, who has depicted the precarious ecology of the Sundarban mangrove forests of Bengal in his novel, The Hungry Tide, says that this absence has to be “counted as an aspect of the broader imaginative and cultural failure that lies at the heart of the climate crisis,” a failure so pervasive that he calls our era, “which so congratulates itself on its self-awareness . . . the time of the Great Derangement.”

I agree with the reviewer that any discussions about the ‘ravages of the carbon economy’ would necessarily include story lines on the failure of capitalism. And talk about a contrivance. Who would believe that? Perhaps at no point have we ever been so self-hemmed in – constrained by our own no-go areas. Does any writer today imagine Zola or Hugo, or Anatole France or, good grief Racine, adhering to such constraints? Is it only fear? Will the publishers and agents love us no longer? What then? Asking for a friend of the fate of the world.

Image: Author photo of the flooded Seine, June 2016.

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A Financial Choice, Act II

In early September 2008, I drove down to Charleston to visit a cousin who had recently suffered a terrible accident. Throughout the drive I listened to extended public radio reports on an evolving calamity: the collapse of Lehman Brothers financial services firm. The horror that the government was going to allow such a large firm to go under was decorated with the baroque gadgetry of terms that would become more familiar in the coming years: credit default swaps, subprime mortgage lending, tranches, CDOs. The gore and detail of the cover that had been constructed around scams and fraud at the broadest level was audible in the voices of interviewers and guests. There was a tinge of disbelief within their attempts to explain what these terms meant and how they had gotten us all (!) into so much peril. It was as close to 1929 as we had come and potentially far worse – so extensively had the giant vampire squid of financial engineering welded its tentacles to every sector. Housing, banking, investing, construction, debt, bonds… this is business America now, and every other activity is vulnerable to its caprice. It was the stretch run of a presidential election as well; one candidate tried to suspend the campaign, the other fortunately tried to hold things together.

And he did mange to hold things together, despite rather obvious at the time challenges he personally faced. But the Lehman moment got everyone’s attention, everyone who mattered. $700 billion for Troubled Asset Relief (TARP), $250 billion for Capital Purchase(CPP), in addition to billions more in government-backed guarantees to individual banks. And eventually, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted. It seemed the public assistance required to save the vampire from itself had sealed the argument in favor of financial reform.

Yesterday, the Republican House of Representatives passed the Financial Choice Act and can you guess what it does? Right! Overturns Dodd-Frank. And not only is it a bad idea to weaken a law that requires stronger banks,

The bill also offers the wrong kind of relief. During the last crisis, all kinds of financial activity — including insurance, money-market funds and speculative trading at banks — depended on government support. That’s why Dodd-Frank placed limits on banks’ trading operations and provided added oversight for all systemically important institutions, and why regulators require them to have enough cash on hand to survive a panic.
Those provisions aren’t perfect — simpler and more effective options exist — but the Choice Act just scraps them. What’s more, it would eliminate the Office of Financial Research, created to give regulators the data they need to see what’s going on in markets and institutions. The law would leave regulators in the dark, and taxpayers implicitly or explicitly backing much of the financial sector.

If you didn’t click, that’s coming from fcking Bloomberg. The financial industry doesn’t even think it’s a good idea. In trying to undo more Obama-era legislation, the know-nothings in Congress are re-setting the table for our financial catastrophe guests. Sure, certain things could make Dodd-Frank unnecessary. But unfortunately, none of the thousands of people, firms, funds and frauds who populate this sector care about a stronger financial system or its being more competitive. It’s the logic of business – the democracy, whiskey, sexy of fools.
Image: Detail from The Garden of Earthly Delights, by Hieronymus Bosch, ca. 1500

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Holy Chapter 11, Batman!

“That’s right, Robin.”
The Affordable Care Act has driven down personal bankruptcies by 50% since 2010:

As legislators and the executive branch renew their efforts to repeal and replace the Affordable Care Act this week, they might want to keep in mind a little-known financial consequence of the ACA: Since its adoption, far fewer Americans have taken the extreme step of filing for personal bankruptcy.

Filings have dropped about 50 percent, from 1,536,799 in 2010 to 770,846 in 2016 (see chart, below). Those years also represent the time frame when the ACA took effect. Although courts never ask people to declare why they’re filing, many bankruptcy and legal experts agree that medical bills had been a leading cause of personal bankruptcy before public healthcare coverage expanded under the ACA. Unlike other causes of debt, medical bills are often unexpected, involuntary, and large.

Emphasis added. There’s no way to be flippant about this. President Obama took a beating over this for years. Congresspeople lost their jobs, and knew they would, for voting for it. Still, they did it. This is what the whole thing is about – all the politicking, all the voting, all the clever name-calling and ratfcking. It mobilized the entire right-wing firmament because they are expressly against this. This!
This is socialism?

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Perfect Cases in Point

We wish they were more rare. But just as rising wages are bad news for business(?) and solar most horribly spells doom for coal, word in the oil game is that consistent catastrophes are needed for oil to remain strong:

The weakness comes at a time when speculators have started rebuilding bullish positions after a sell-off last month, betting the market will tighten in the second quarter. Yet, Brent physical oil traders say the opposite is happening so far, according to interviews with executives at several trading houses, who asked not to be identified discussing internal views.

“We need to see the market going really into deficit for oil prices to rise,” Giovanni Staunovo, commodity analyst at UBS Group AG in Zurich, said. “If this is temporary, it could be weathered, but it needs to be monitored.”

The weakness is particularly visible in so-called time-spreads — the price difference between contracts for delivery at different periods. Reflecting a growing surplus that could force traders to seek tankers as temporary floating storage facilities, the Brent June-July spread this week fell to an unusually weak minus 55 cents per barrel, down from parity just two months earlier. The negative structure is known in the industry as contango.

There’s a new word for you. And yes, many of the other words they use are the ones you know, with commonly agreed-upon definitions. I know one needs a lot of sophisticated financial knowledge to really get the subtleties of these economics, but is the overall message really lost? Of no consequence whatsoever? Yes, we can play terrible music on beautiful instruments, just as we can vote against our interests and condemn ourselves with our own words ( though it really isn’t necessary to do all three at once). Thanks to Bloomberg for delivering the straight dope in the top story today. It’s important, you know? Just like it will be to move past the market riff, as I hope to soon.
And also, the term ‘oil futures.’ FY, irony.

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Schemes inside of Schemes

On #OWS, plus for when he word-whips Little Tommy Freidman (age 9), Taibbi is a national treasure:

STUPIDITY INSURANCE. Defenders of the banks like to talk a lot about how we shouldn’t feel sorry for people who’ve been foreclosed upon, because it’s they’re own fault for borrowing more than they can pay back, buying more house than they can afford, etc. And critics of OWS have assailed protesters for complaining about things like foreclosure by claiming these folks want “something for nothing.”

This is ironic because, as one of the Rolling Stone editors put it last week, “something for nothing is Wall Street’s official policy.” In fact, getting bailed out for bad investment decisions has been de rigeur on Wall Street not just since 2008, but for decades.

Time after time, when big banks screw up and make irresponsible bets that blow up in their faces, they’ve scored bailouts. It doesn’t matter whether it was the Mexican currency bailout of 1994 (when the state bailed out speculators who gambled on the peso) or the IMF/World Bank bailout of Russia in 1998 (a bailout of speculators in the “emerging markets”) or the Long-Term Capital Management Bailout of the same year (in which the rescue of investors in a harebrained hedge-fund trading scheme was deemed a matter of international urgency by the Federal Reserve), Wall Street has long grown accustomed to getting bailed out for its mistakes.

The 2008 crash, of course, birthed a whole generation of new bailout schemes.

The LTCM fiasco was particularly egregious, even and especially at the time. Stomach-turning levels of under-believability, as this 1998 article from Harper’s illustrates. And we just carried on.