Wrong is Right: Cautionary Tales as Manuals of a Different Sort

Nov 25, 2008 by

A week or so ago, I couldn’t fail to notice, in this Details article by Ethan Brown on Hizzoner the Walking Id, that da mayor was reading Naomi Klein’s The Shock Doctrine:

Nagin likes to portray himself as someone who takes on the white establishment, yet his policy decisions often favor the powerful. His administration spends lavishly on multi-million-dollar contracts for everything from the city’s 311 system to its garbage collection. Last December, it approved the demolition of 4,500 public-housing units. That move, which came in the midst of a housing shortage in New Orleans, was blasted by experts working for the U.N., Speaker of the House Nancy Pelosi, and even the New York Times’ architecture critic. Last year, a lawsuit was filed in federal court against the city on behalf of homeowners charging that officials had inflated the damage estimates of nearly 2,000 single-family homes so that they could be razed.

The writer Naomi Klein, in her book The Shock Doctrine, describes actions like those as “disaster capitalism”: profiteering and privatization in the wake of shocks such as 9/11 or Katrina. So when I spot Alan Greenspan’s memoir, The Age of Turbulence, on Nagin’s desk and ask him about it, I’m surprised to learn that he’s not reading it but The Shock Doctrine, which he pulls from his briefcase.

Most telling about how Nagin reacts when Brown queries him about the book is that he seems to regard it as some sort of cool instruction book rather than as a thoughtful analysis and condemnation of the policies that have fueled a bunch of experiments throughout the world that were supposed to place a Milton Friedman-ite, pure capitalism in places such as Argentina, Bolivia, Chile, and, up into the present day, Iraq and even our own city, as the following demonstrates:

“I understand exactly the premise that they’re presenting,” Nagin says, holding the book aloft, “that’s for sure. Look, man, after this disaster there is big money! The shock-and-awe piece of what they’re talking about is absolutely correct.” I ask if he’s read the chapter in which Klein laments that the public sphere in New Orleans is “being erased, with the storm used as the excuse.” Nagin replies cheerily, “I haven’t gotten that far! I just picked it up.”

I read Cliff’s latest this morning, “Divide and Squander“, about the nationwide economic crisis:

Americans are a bunch of silly people. We trust educated people too much. Just because a person is educated does not mean they have the best interests of the country at heart. These people have divided Americans and have them so busy worrying about each other that no one pays attention to a damn thing they do. While we spend all of our time fussing about red and blue states or inner cities versus suburbs they are sitting around doing whatever the hell they want to with our money to make themselves rich.

…and came across this link to a recent article by Michael Lewis in the comments to Cliff’s post, in which he revisits the territory he covered nearly twenty years ago in his bestselling Liar’s Poker, a book written about his time working at Salomon Brothers:

When I sat down to write my account of the experience in 1989—Liar’s Poker, it was called—it was in the spirit of a young man who thought he was getting out while the getting was good. I was merely scribbling down a message on my way out and stuffing it into a bottle for those who would pass through these parts in the far distant future.

Unless some insider got all of this down on paper, I figured, no future human would believe that it happened.

I thought I was writing a period piece about the 1980s in America. Not for a moment did I suspect that the financial 1980s would last two full decades longer or that the difference in degree between Wall Street and ordinary life would swell into a difference in kind. I expected readers of the future to be outraged that back in 1986, the C.E.O. of Salomon Brothers, John Gutfreund, was paid $3.1 million; I expected them to gape in horror when I reported that one of our traders, Howie Rubin, had moved to Merrill Lynch, where he lost $250 million; I assumed they’d be shocked to learn that a Wall Street C.E.O. had only the vaguest idea of the risks his traders were running. What I didn’t expect was that any future reader would look on my experience and say, “How quaint.”

I had no great agenda, apart from telling what I took to be a remarkable tale, but if you got a few drinks in me and then asked what effect I thought my book would have on the world, I might have said something like, “I hope that college students trying to figure out what to do with their lives will read it and decide that it’s silly to phony it up and abandon their passions to become financiers.” I hoped that some bright kid at, say, Ohio State University who really wanted to be an oceanographer would read my book, spurn the offer from Morgan Stanley, and set out to sea.

Somehow that message failed to come across. Six months after Liar’s Poker was published, I was knee-deep in letters from students at Ohio State who wanted to know if I had any other secrets to share about Wall Street. They’d read my book as a how-to manual.

Ladies and gents, education alone is not going to save us.  Books such as Liar’s Poker and The Shock Doctrine were written to tell us that strict reliance on education, on numerical constructs, on the primacy of money-making above all else are paths to greater inequality between classes, a breakdown of any semblance of social services for the poor, the aged, or the disabled, and even, as Klein details in her book, an atmosphere that inflicts terror and bodily harm on its citizens in the name of imposing forms of pure capitalism.  Checks and balances in government are no more, relying instead on a “market will decide” strategy that forgets about the people who help make any market remotely viable and turns those people into constructs, abstractions.

What it can take, in the end, is one woman saying it is stupidity on steroids:

Then came Meredith Whitney with news. Whitney was an obscure analyst of financial firms for Oppenheimer Securities who, on October 31, 2007, ceased to be obscure. On that day, she predicted that Citigroup had so mismanaged its affairs that it would need to slash its dividend or go bust. It’s never entirely clear on any given day what causes what in the stock market, but it was pretty obvious that on October 31, Meredith Whitney caused the market in financial stocks to crash. By the end of the trading day, a woman whom basically no one had ever heard of had shaved $369 billion off the value of financial firms in the market. Four days later, Citigroup’s C.E.O., Chuck Prince, resigned. In January, Citigroup slashed its dividend….

….Now, obviously, Meredith Whitney didn’t sink Wall Street. She just expressed most clearly and loudly a view that was, in retrospect, far more seditious to the financial order than, say, Eliot Spitzer’s campaign against Wall Street corruption. If mere scandal could have destroyed the big Wall Street investment banks, they’d have vanished long ago. This woman wasn’t saying that Wall Street bankers were corrupt. She was saying they were stupid. These people whose job it was to allocate capital apparently didn’t even know how to manage their own.

Now, of course, current cultures have to be taken into account – having somebody jump up and say in Augusto Pinochet’s Chile that his reign of terror and his allegiance to Milton Friedman’s economics was, in the words of an Ed Wood character, “Stupid, stupid, stupid!” would have had that person sent into the land of the “disappeared” or into exile, most likely.

In this case, the most that might happen to Whitney is that she will become a dot of obscurity, pooh-poohed by the folks scrambling for bailout monies as some little lady behind a curtain that the American people should pay no attention to…keep your eyes on that ball of Divide and Squander, folks!

Please, everybody, look behind the freaking curtain.  Fight these bailouts of the stupids will all your soulful might.  Heed our modern cautionary tales – they are not mandates or manuals for anything other than consideration and compassion for our fellow human being.



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