by
Keith Gessen
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[...] the way they think doesn’t admit of a world where Citibank gets nationalized. It’s just so inconceivable to them that they say, “You just can’t do that! It’ll cause all of these horrible problems.” Well, that was true when the economy was in an extremely unstable state and risk aversion was extreme and panic was abroad in the land. But now I don’t think that’s the case, and your lack of imagination is not a good grounds for a policy judgment.
i love this. (on the govt's lacklustre response after the crisis)
[...] Anybody who worked in sectors where there was a tremendous amount of activity where there shouldn’t have been. So we’re talking about housing. It means the Mexican guy who hammered together the house. It means the logger who cut down the wood that was used in the structural lumber. The guy who worked at the sawmill. It means the steel company that created the steel for the nails. It means the mortgage broker who sold the mortgage. It means the physicists who decided instead of doing physics they should work on Wall Street to create the asset-backed security that helped to fund the mortgages that the mortgage broker was originating. All of these people were doing things that turned out not to be productive.
this is the dumbest take i've ever heard. (it follows a dialogue where he first tries to blame it on the "Mexican", or "billions of Mexicans", for spending beyond their means.) the implication that these are somehow equivalent in terms of waste, when really, consider the income deltas between the groups??? and also "turned out not to be productive" is a hell of a sentence, with so much heavy lifting hidden between the words. can something be deemed unproductive after the fact? what the hell is productivity supposed to mean anyway, and why is it being elevated to worship-like levels?
The mortgage brokers probably spent all of their money. The mortgage-backed securities structurers maybe didn’t spend all of their money. But when you have an economy where contracts can be rewritten and you can go back and try to claw back money from people years after the fact, that’s going to be tremendously destabilizing and it’s going to really disincentivize investment in human capital. And it’s going to incentivize people to work in the gray economy. I think the answer is, for some of these jobs, jobs like in the investment business, going forth contractually, we should create compensation arrangements where there are clawbacks. But you have to do that by agreement and in advance. You can’t reopen contractual arrangements years after the fact. At least not without some strong indications of knowing fraud.
discussing where we can claw back money from. this is also kinda disingenuous cus it assumes that "investment in human capital" is a good thing a priori (without connecting the dots between the way this sort of investment is valorised and the financial crisis ... which he purportedly thinks was dumb ...)
[...] to deal with the fact that we have an eccentric corporate taxation system, we’ve allowed these loopholes to be created so that U.S. companies are not uncompetitive relative to companies from other countries. So he wants to get rid of these loopholes—that’s fine if we’re also going to redo the corporate taxation system so that it’s simpler and more efficient and more in line with what’s going on in the rest of the world. But I haven’t seen any evidence that that’s going to happen. So if you suddenly make it a lot less attractive to be headquartered in the U.S., or, if you’re a start-up company, to be domiciled in the U.S., then that’s problematic.
why he's against Obama's fiscal stimulus program
this makes me really angry, and im trying to unpack his assumptions in order to understand why it bugs me so much. but there's this (fairly common) implication that because Obama is American, he should be optimising for policies that encourage corporations to be domiciled in the US. for what? as a means to increase the US' power in the global economy?
but the US is already the most powerful. it's already at the top of the hierarchy. what the hell else does it want? acting mindlessly acc to incentives around amassing power is at least somewhat excusable when you're the underdog, but when you get to the top, surely isn't that the point when you think about where you are now, and what you should be doing with that power? and whether acting as if you're still the underdog is actually globally destructive?
That the level of profits for the financial sector was too high. If you look sectorially, the financial sector was generating an unusually large share of corporate profits and of GDP. And a lot of that was not sustainable. It was a frenzy of trading that didn’t lead to an ultimately productive result. So those are paper profits. And what happened is it turns out that those loans that were extended went bad, or bets went bad, and the huge losses that were recognized were the reversal of those financial sector profits, right? So again, then are you supposed to believe that once that’s out the financial sector profits go back to that unsustainably high level? No, they don’t.
Another way of saying that is that a lot of that GDP is an illusion.
finally we agree on something
[...] You see people who’ve blown up in spectacular fashion go on to get another high-profile job. And the things you hear are, “I want to hire him; he’s learned a very expensive lesson.” Or “He’s proved he’s a risk-taker.” I can’t tell you how many times I’ve heard that! Yeah, he’s proved he’s an irrational, crazy risk-taker!
this is like identical for tech people who've "landed the ship". think danielle morill ... makes me want to barf every time i think about it
Giovannino and Serenella crept up to the table. There was tea, milk, and sponge cake. They had only to sit down and help themselves. They poured out two cups of tea and cut two slices of cake. But somehow they did not feel at all at ease, and sat perched on the edge of their chairs, their knees shaking. And they could not really enjoy the tea and cake, for nothing seemed to have any taste. Everything in the garden was like that: lovely but impossible to enjoy properly, with that worrying feeling inside that they were only there through an odd stroke of luck, and the fear that they'd soon have to give an account of themselves.
It was, as usual, a mistake of my father's. He had had a boy sent down from a village in the mountains to look after our goats. And the day the boy arrived, my father insisted on asking him to eat with us.
My father does not understand the things that divide people, the difference between a dining room like ours, with its inlaid furniture, dark-patterned carpets, and majolica plates, and those homes of theirs, with smoky stone walls, beaten-earth floors, and newspapers black with flies draped over the mantelpieces. My father always goes about among them with that jolly, ceremonious air of his, and if they invite him to eat when he is out shooting, as they all do, he insists on eating off the same dirty dish; then in the evening they all come to him to settle their disputes. We, his own sons, don't take much part, though. Perhaps my brother, with that air of silent complicity he has, may occasionally be given some rough confidence; but I'm too well aware of the difficulties of communication between human beings, and sense at every minute the gulfs that separate the classes, the abysses that politeness opens up under me.
To protect him I tried to turn the conversation away from him, so I read aloud an item of news from the paper, something that could only interest my parents, about a vein of mineral ore discovered in a part of Africa where certain friends of ours lived. I had deliberately chosen an item that could have no conceivable connection with our guest and was full of names unknown to him; I did this not to make his isolation weigh on him more, but so as to dig a moat around him, as it were, give him a breathing space, and distract my parents' besieging attentions for a moment. Perhaps he, too, misinterpreted my move. Anyway, it had the opposite effect. My father went rambling on with a story about Africa, confusing the boy with a tangle of strange names of places, peoples, and animals.
yikes
My mother now went into the attack, with a very sweet, "And how old are you, Giovannino?"
The number the boy gave rang out like a shout. He repeated it slowly. "What's that?" said our grandmother and repeated it wrongly. "No, this," and everyone began shouting it in her ear. Only my brother was silent. "A year older than Quinto," my mother now discovered; and this had to be repeated all over again to my grandmother. These were the things I could not bear, which shamed me to the bottom of my heart, for my sake and his; this comparing of him and me, he who had to look after goats to make a living and stank of ram and was strong enough to fell an oak, and I who spent my life on a sofa by the radio reading opera librettos, who would soon be going to the university and disliked flannel next to my skin because it made my back prickle. This injustice, these things lacking in me to be him and lacking in him to be me, gave me a sharp feeling of our being, he and I, two incomplete creatures hiding, diffident and ashamed, behind that soup bowl.