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

My life is free

The title and the following are both from Henry Miller’s Remember to Remember, also known as vol. 2 of The Air-Conditioned Nightmare. This piece is called The Staff of Life.

Bread: Prime symbol. Try and find a good loaf. You can travel fifty thousand miles in America without once tasting a piece of good bread. Americans don’t care about good bread. They are dying on inanition but they go on eating bread without substance, bread without flavor, bread without vitamins, bread without life. Why? Because the very core of life is contaminated. If they knew what good bread was they would not have such wonderful machines on which they lavish all their time, energy and affection. A plate of false teeth means much more to an American than a loaf of good bread. Here is the sequence: poor bread, bad teeth, indigestion, constipation, halitosis, sexual starvation, disease and accidents, the operating table, artificial limbs, spectacles, baldness, kidney and bladder trouble, neurosis, psychosis, schizophrenia, war and famine. Start with the American loaf of bread so beautifully wrapped in cellophane and you end up on the scrap heap at forty-five. The only place to find a good loaf of bread is in the ghettos. Wherever there is a foreign quarter there is apt to be good bread. Wherever there is a Jewish grocer or delicatessen you are almost certain to find an excellent loaf of bread. The dark Russian bread, light in weight, found only rarely on this huge continent, is the best bread of all. No vitamins have been injected into it by laboratory specialists in conformance with the latest food regulations. The Russian just naturally likes good bread, because he also likes caviar and vodka and other good things. Americans are whiskey, gin and beer drinkers who long ago lost their taste for food. And losing that they have also lost their taste for life. For enjoyment. For good conversation. For everything worthwhile, to put it briefly.

What do I find wrong with America? Everything. I begin at the beginning, with the staff of life: bread. If the bread is bad the whole life is bad. Bad? Rotten, I should say. Like that piece of bread only twenty-four hours old which is good for nothing except to fill up a hole. God for target practice maybe. Or shuttlecock and duffle board. Even soaked in urine it is unpalatable; even perverts shun it. Yet millions are wasted advertising it. Who are the men engaged in this wasteful pursuit? Drunkards and failures for the most part. Men who have prostituted their talents in order to help further the decay and dissolution of our glorious Republic.

1947. You’ll have to scour a second-hand bookshop this weekend and get lucky for the rest. Or wait for periodic snippets here. As always, love your neighbor, read your Miller.

On to Piraeus

In 1939, just before war returned to Europe after a brief interlude, the ultimate ne’er-do-well Henry Miller came back to America after almost ten years living in France. The state of the States he observed upon his return was startling, to say the least, and after traveling across the country his reflections on what he found became The Air-Conditioned Nightmare:

“But there was nothing of the animal, vegetable or human kingdom in sight. It was a vast jumbled waste created by pre-human or sub-human monsters in a delirium of greed. It was something negative, some not-ness of some kind or other. It was a bad dream and towards the end I broke into a trot, what with disgust and nausea, what with the howling icy gale which was whipping everything in sight into a frozen pie crust. When I got back to the boat I was praying that by some miracle the captain would decide to alter his course and return to Piraeus.

It was a bad beginning. The sight of New York, of the harbor, the bridges, the skyscrapers, did nothing to eradicate my first impressions. To the image of stark, grim ugliness which Boston had created was added a familiar feeling of terror. Sailing around the Battery from one river to the other, gliding close to shore, night coming on, the streets dotted with scurrying insects, I felt as I had always felt about New York – that it is the most horrible place on God’s earth. No matter how many times I escape I am brought back, like a runaway slave, each time detesting it, loathing it, more and more.

And at that point he wasn’t even properly off the boat yet. Weekend assignment: Love your neighbor, read your Miller.