No additional comment needed, but here’s part 8 of Robert Hughes’ The Mona Lisa Curse:
The rest are here.
Money to Buy Mediocre Lies
Not even the best money can buy, but kinda middling ones.
The extent to which lying is an operative political strategy in your lifetime, of your government, by your representatives, cannot be overstated or stated often enough. Even if you think you know this, You don’t. And if you don’t know Frank Lutz is, John Chait reminds you:
Luntz’s latest memo advising Republicans on how to fight financial reform,obtained by Sam Stein, is a classic of the genre. The unstated argument of the memo is that, being determined to oppose legislation that most Americans support, Republicans should simply pretend they are arguing against something completely different. Luntz makes it clear that the public demands reform. “You must be on the side on change,” he writes. “Always.” (There is no pretense anywhere in Luntz’s paper that Republicans do, or even should, have a reform plan of their own.)
He likewise insists Republicans never call the reform bill “reform”: “It’s not ‘reform.’ This is not a reform bill. It is the ‘Stop the Big Bank Bailout bill.” Of course, Luntz does not try to explain why the reform bill is not reform. Indeed, his paper is entitled, “The Language of Financial Reform.” It calls to mind the French absurdist Rene Magritte’s painting of a pipe, labeled, “This is not a pipe.”
And we’ve been there before, of course. But then again, we thought we remembered about lying.
Money Can Buy
Fairness and justice can inform politics, invigorate its supporters and infiltrate the ranks of decision-makers to influence the use of government and guide the course international cooperation.
So can business.
And now the Gates Foundation has finally named a new director of agricultural development—a position left vacant since April, when Rajiv Shah left to take a post at USDA. (Shah is now director of USAID within the State Department—the top development position in the U.S. government). The foundation named long-time biotech exec and investor Sam Dryden to the post.
In doing so, the foundation could hardly have sent a stronger signal: In its vision, at least, Africa’s future as a prosperous continent hinges on the benevolence of patent-wielding Western biotech behemoths like Monsanto and its very few peers in the GMO-seed space. Here is how The Seattle Times describesDryden’s background:
At Wolfensohn and Company, which was founded by former World Bank President James Wolfensohn, Dryden focused on investments in alternative energies. He formerly headed Emergent Genetics, which develops and markets seeds. Emergent Genetics, the third largest cotton seed company in the U.S., was acquired by Monsanto in 2005 in a $300 million deal. [Emphasis added.]
The tools are malleable, not permanently bent. The reasons for optimism are also the reasons to be skeptical. On neither count should we underestimate the power of vital green interests.
The Foreign(ness of) Aid
From LG&M, Americans still in a rage about issues of which we are greatly uninformed. Which is different from uniformed, though there is probably an appropriate jumper or pants suit:
The weekend before President Clinton’s State of the Union Address, the Wall Street Journal assembled a focus group of middle-class white males to plumb the depth of their proverbial anger. These guys are mad as hell. They’re mad at welfare, they’re mad at special-interest lobbyists. “But perhaps the subject that produces the most agreement among the group,” the Journal reports, is the view that Washington should stop sending money abroad and instead zero in on the domestic front.
“a poll released last week[1995, ed.] by the Program on International Policy Attitudes at the University of Maryland which stated that 75% of Americans believes that the US spends “too much” on foreign aid, and 64% want foreign aid spending cut. Apparently a cavalier 11% of Americans think it’s fine to spend “too much” on foreign aid. Respondents were also asked, though, how big a share of the federal budget goes to foreign aid. The median answer was 15%; the average answer was 18% the correct answer is less than 1%. A question about how much would be “too little” produced a median answer of 3%–more than three times the current level of foreign aid spending.
Wisely transferring money from rich people or countries to poorer people or countries is one of the keystones to good public policy. To the extent we care about it, it’s one of the ways we construct an equitable society and definitely one of the ways we do things like secure the peace (Marshall Plan), bribe the enemy (Iraq) and otherwise incentivize behavior on the part of our strategic partners (examples too numerous to list). This goes doubly for trying to effect lower CO2 emissions around the globe. But we only need to look to the above to see how far the rock will fly.
And while we also spend money in a multitude of horrific ways around the globe, the idea of climate debt was a subject of some contention at COP15. Grist hits a good tee shot on the subject.
The climate pollution already in the atmosphere has “locked in” a certain degree of climate change. Since rich nations produced the bulk of historical pollution, they bear the bulk of the responsibility for the damages that result. Those damages will fall disproportionately on the world’s poorest countries, which bear the least responsibility. Given the situation, rich countries are obliged to help poor countries pay to adapt to climate change and mitigate its effects.
How we get on the green from there, well… it’s an open question as to whether the debt model is the right one. But how ever we come to frame climate justice – and it’s going to be Orwellian orchid sex if there’s ever been any – it must result in the further collapse of the detachment and separation model featuring the highly useful us/them split, of which climate change is the biggest harbinger of all time. It’s why we hate it – odorless, borderless and raceless.
Butter and Jam
Knowing how much energy you use on an hour/daily/weekly basis would be one thing. As it is, we’re greatly ignorant of even this, and the idea that if we began unpacking what exactly is a kWh and what it takes to produce one, maybe, just maybe we could re-construct that perception – who knows, maybe even based on how fast a little whirl-y-gig on top your house would have to spin just wash your clothes or grind your coffee beans. Maybe we would decide a little whirl-y-gig just wouldn’t do the trick and other measures would be more effective, in tandem with using less or developing ways to use sunlight or building different kinds of houses or… you get the idea. While it may be hard to retro-fit our world – we should consider trying to retro-fit our habits based on everything required to support them. That would actually be much more difficult, though probably only at first.
Trying to understand how much energy you use on an hourly/daily/weekly basis in terms of how much people elsewhere in the world use at all, per the photo above, is a route to a wholly different transformation. Really, it has little to do with the first. We would have a hard enough time justifying our energy use in the first instance; there is very little chance we could do so at in the second. Alas this is the issue, and this is one of the reasons why there are climate change denialists.
So should we (the haves) pay more for our energy than those who haveless? This anecdote from Copenhagen paints a nice picture of our unwillingness:
That was the only talk about poverty for the night. But that’s not the discouraging part. This is: One of the moderators, CNBC anchor Louisa Bojeson, asked the crowd to raise their hands if they were willing to pay 10 percent more for their home’s electricity if it came from a carbon-free source. Two thirds of them, give or take, raised a hand. Would they pay 20 percent more? Fewer than half kept a hand raised. Would they pay 50 percent more? All but a minority, perhaps ten percent, dropped their hands.
These are the royalty of our age—well-compensated, well-heeled corporate leaders, the owners of at least some of the private jets that landed in Copenhagen last week. Home electricity bills, even for mansions, constitute a minuscule portion of their salaries. If they’re not willing to voluntarily pay more for the common good…
There are a number of conclusions you might draw. Maybe the business leaders were defending the right of consumers to choose the lowest price in a free market. Maybe they don’t like raising their hands. Maybe this shows clean-energy choices must be economically appealing—green has to be cheaper than brown if it’s going to catch on. Maybe it means leadership must come from politicians, or social movements. It wasn’t an encouraging moment.
Though perhaps a revealing one.
photo from Revkin’s blog.
Elections spending
Any elections, any year. But… 1$ billion? This year?
A leading expert in political advertising says $1 billion was spent on political ads this year, with the vast majority of that coming from issue advocacy groups.
The health care debate fueled much of the spending this year, according to Evan Tracey of TNS Media Intelligence. But, ironically, the stepped up pace of political advertising may not continue through to next year’s midterm election In an interview with Media Life magazineyesterday, Tracey said economic factors could keep candidates next year from passing 2006’s midterm election record of $3.4 billion in ad spending.
We elect to spend on elections so that we may influence how elections will influence how we spend, or something like that. Why elections are so important is being eclipsed by the importance of spending so much money to influence them. There’s an easy answer to this, shareholders crazyans citizens:
Replace the word election and simply begin calling it a spending contest or, if you prefer, a contest to see how much money a candidate can spend in order to win the office of ______. Being cynical is holding onto the tendency to refer to the contests as elections.
Spending Earning Giving Fighting
What does it look like? At Information is Beautiful, this picture generated from the idea of a Billion Dollar Gram. Click the link to get the breakdown.
On a related point, Grist features a new book, Cheap: The High Cost of Discount Culture, with an interview with the author. Says she:
IKEA names all its products to make stuff seem cute, but then they’re telling you, “You’re not really attached to this, are you crazy?” They’re getting you to laugh at and make a mockery out of the idea of durability. They make durability seem like an old-fashioned, passé idea. And it works. I think it’s really juvenilizing: “Oh, come on, you want a new toy. You always want a new toy.”
Particularly in the marketing of cell phones. You have a cell phone that works really well for you, and then you have a friend who has a cooler one, and you want it. That’s kind of 4-year-old behavior. When you have 3- or 4-year-olds, they want the new shiny thing. But as you get older and a little more mature—and I don’t mean 50, I mean 16 or 17—you learn that that’s not what it’s about. It’s about what works for me. Marketers obviously don’t want you to think that. In the case of the cell phone, they assume you’re going to use it for a year or less, and it’s not durable. Even if it is, they assume you’re going to junk it. I say, “Screw them!” If it works for you, hang on to it. Don’t buy into that, because basically, it’s all about them making a profit. It’s not about you and what you really want.
Progressive, Scandinavian company drugging us with disposable goods. Who can you trust?
World’s Longest Undefended Border
Between Canada and the United States? Between clever and stupid? You’re getting warmer. Try the critical dividing line between credit creation and value creation. Seeing these as one in the same is like, well, looking at the huge land mass between Panama and the North Pole and seeing a single, harmonious country. It’s not all the same, though it would change much if some solidarity formed around being North Americans, not all of it good.
There is some good, bad and wrong in this article. The author points to some interesting distinctions that have been missed, or at least underplayed, concerning credit and value.
There are some simple rules for sound banking and sound economies that need to be followed: Whenever credit is created and used to increase the amount of goods and services provided, it will be noninflationary: more money comes about, but also more goods and services. This is boring banking, without excessive bankers’ bonuses. But it is the kind of stable banking that created the postwar German and Japanese economic miracles, and also explains the rise of China and other East Asian so-called miracle economies.
But whenever credit is created and used for unproductive purposes, inflation comes about: more money chases a limited amount of goods or assets. The unproductive credit creation can take two forms: When credit is extended for consumption, it will result in consumer price inflation. When credit is extended for non-gross domestic product transactions (which means mainly financial and real estate transactions), there will be asset inflation. Both cases are unsustainable and if sufficiently large, result in banking and economic crises.
We can be more or less strict about any of this from a regulatory point of view, but what banks create with credit largely defines how we lope from bubbles to busts to bubbles again. Bankers were once (and will be again soon) the stiff, uptight types whose very boringness epitomized financial prudence featuring risk aversion, right down to their Brooks Brothers’ suits. This is the boring banking of low, constant annual returns – you may have heard of it. Though they may have been disparaged from time to time as prudish stereotypes, there was a certain reliance on them as a personification of the confidence we could place in the system. Credit was slow moving for a reason. But when, as the writer points out, credit is created and used for unproductive purposes, all manner of skulduggery becomes possible.
And here’s the civics class section that coach skipped over – when something involving money becomes possible in our system, it’s as good as mandatory.
We get exotic financial instruments and bankers in Zegna and Armani spinning a whole different kind of confidence game. These episodes, if that’s all they are, point back to an economy abandoned of its fundamentals, where people are making money off of money that, it turns out, isn’t real money. Inflated value is not real money, so you should not be able to get easy cash (more debt) in return for not having it.
Q: How can you afford a $789,000 home financed at 5.8% if you’re not an anesthesiologist?
A: You can’t.
There are all manner of warning signs that no one wants to believe (Dow 36,000?) and it’s easy to look back and say well, we should have known, what with all those e*trade commercials during breaks in ‘Flip that House’, you could see greed getting the best of the least among us first*. Yes, we should have and in fact many, many people did refuse the basic temptation to jump in and not get left out of the gold rush, which was based on nothing more than self-conjured pool of suckers-R-us.
* I’m thinking of the conscience-challenged here, first, but there’s a growing body of evidence which suggests some preternatural disposition toward not asking questions if the answers keep coming at a 30% annual rate of return.
The road to sustainability
tracks through the forest of stupid, veering off for extended moments in moronic triviality as we all behave like children for a little while longer. If you want to see the current dynamics of the debate over the financial crisis, gird your loins for this.
It’s amazing. On the one hand you have a couple sober realists, patiently speaking about the absolute necessity to massively de-leverage the insolvent banks… heaping ridicule on central bankers and others who didn’t see this coming but who remain in decision-making positions, insisting that banks must be nationalized. On the other, you have clowns asking for stock tips. There could be no more explicit description of the crisis itself than this display of inanity, which is at least representative if not the norm. When are we going to pull out of this? Like it’s just another slight downturn and not the collapse of the house of the mother of all pyramid schemes.
It’s a deep structural crisis. When Taleb tries to explain how executive compensation is tied to incentives that led to this mess in the first place, he’s met with demands to instead answer questions that are so far removed from the situation, they might as well be about the rock star status of Roubini and Taleb at the recent Davos summit.
Wait. That was what they were about. Nevermind.
Distorting the public conversation
It mostly goes without saying, for long gaps on this blog at least, that the reason Green is so compelling as a stand-in for sustainability is that it also happens to be highly useful slang for money. And has been for what’s going on an epoch, in any meaningful sense.
It’s the double-entendre that provides its edge – as divergent as the two meanings in one word are. Incoherent is more like it, but just enough to provide a little of each to lap over onto the other and provide some of the ambiguity that might pull us through the rough patch where our pursuit of money has outdistanced its effective ability to shield us from the consequences of its single-minded pursuit. Vagueness is a currency that itself can and will lose effectiveness as the clearly-spelled out cruelties of life re-assert themselves. We’ll hope for vague cover again, to attempt surreptitious movement toward better, more sensible pursuits. Because we can’t do it out in the open.
All this is to point up the way green as money has stepped to center stage again, becoming more precious as its gotten tighter, even more precious than the precarious fate of the planet on which it is spent, invested, given and taken. It’s pitiable but this is the way it is – the way we are. This mentality leads with ‘we will become more energy efficient/invest in new sources of renewable energy when we can afford to’. It ends up where? Like capitalism or any ism, it doesn’t care. Only we can show concern or guard special preferences. We have to decide some things. Like when we might be able to afford to become less wasteful, for one.
And as quickly as the massive financial losses spilled into the open this fall, the money is crawling back into its holes as fast as possible. It might even be able to provide the cover of vagueness again soon and enable us to return to making more (safely) ambiguous motions toward sustainability and ‘going green’. But we won’t be able to decide or allocate anything in any different way as long as this trend remains in tact.