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Kim Moody
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Carter also attempted to break one of the last mass strikes of the 1970s, that by the United Mine Workers, by invoking the Taft-Hartley Act. The striking miners ignored the president and adopted the slogan “Taft can mine it, Hartley can haul it, and Carter can shove it.” 25 The neoliberal agenda, however, rolled on as the Joint Economic Committee of Congress, with a Democratic majority and the endorsement of the liberal’s liberal Ted Kennedy, reported in 1979 “that the major challenges today and for the foresee- able future are on the supply-side of the economy.” 26 For the Democrats, the Keynesian foundation of post–World War II liberalism was a thing of the past. As Paul Heideman put it in his analysis of the realignment strategy in Jacobin, “The window for realignment had closed.” 27 As loyal Democrats, however, Harrington and the realigners went on to support Carter in 1980 once Ted Kennedy’s primary challenge was defeated, and Walter Mondale in 1984 as the party moved to the right.
dying @ this slogan
As Thomas Byrne Edsall described this turn, “During the 1970s, business refined its ability to act as a class, submerging competitive instincts in favour of joint, cooperative action in the legislative arena.” 29 The leader of this crusade was the Business Roundtable, founded in 1973 and representing most of the major industrial, commercial, and financial corporations in the United States, and whose connections with the Carter administration were direct. The roundtable developed the roster of deregulation, tax reductions, welfare cuts, privatization, and so on that have been the neoliberal agenda up to this day. It was soon followed in its activist course by the broader US Chamber of Commerce and the National Association of Manufacturers. The Trilateral Commission, also founded in 1973 by top business leaders, refined the international free trade dimension of the developing neoliberal agenda—with connections to the Carter White House and other Democrats. At the same time, post-Watergate reforms opened the door to corporate PACs, which proliferated from 89 in 1974 to 784 in 1978 and 1,467 in 1982. Corporate and trade association PAC campaign contributions rose from a mere $8 million in 1972 to $84.9 million in 1982, much of it going to the new generation of Democrats mentioned above as well as to Democratic incumbents. 30
[...] Nobody can get a proper undergraduate education. You'll never know in advance what that education should be. Regret is the feeling you have when you finally realize what the education is that you want. Right? And you're always going to come to that after it's too late. There is always going to be a Henry Adams moment. And so it's not bad to have regrets.
Caleb Crain
[...] sociology is partly about how people's agency or free will is exercised within limits that they didn't make, and I think people can find that distasteful about sociology, that it can seem deterministic. [...]
by Meghan Falvey
reminds me of Marx: "Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past"
[...] we had a loss over the course of three days that was like a ten-sigma event, meaning, you know, it should never happen based on the statistical models that underlie it. Because the model doesn’t assume that everybody else is trading the same model as you are. So that’s sort of like a meta-model factor. The model doesn’t know that there are other black boxes out there.
think about this more. could you account for this? could you add a meta element to the model that accounts for the presences of other models (which may, themselves, have meta elements)?
[...] What tends to happen in financial markets is, bad things happen when you really divorce the people who take the risk from the people who understand the risk. What happened is that that distance in the subprime market just increased and increased and increased. I mean, it started out that you had mortgage companies that would keep some of the stuff on their own books. Subprime lenders, it wasn’t a big business, it was a small business, and it was specialty lenders, and they made risky loans, and they would keep a lot of it on their books.
But then these guys were like, “You know, there are hedge fund buyers for pools that we put together,” and then the hedge fund buyers say, “You know what? We need to fund, we need to leverage this, so how can we leverage this? Oh, I have an idea, let’s create a CDO and issue paper against it to fund ourselves,” and then you get buyers of that paper. The buyers of that paper, they’re more ratings-sensitive than fundamentals-sensitive, so they’re quite divorced from the details. Then it got even more extended in the sense that vehicles were set up that had a mandate to kind of robotically buy that paper and fund themselves through issuing paper in the market.
this is eerily similar to how i've been thinking about the gig economy
Today, where people have made bad investment decisions, where people built houses they never should have built, there’s a misallocation of resources. The loss has already happened. The loss isn’t what happens on a balance sheet; the loss is what happens when someone cuts down a tree, makes cement, builds a 6,000-square-foot house in a place it should never be built. So the loss has already happened. The question is, how do you allocate that loss? And if you don’t allocate the loss, if you pretend it isn’t there, then this has really baleful consequences for the economy. So what we’re going through now is this process of loss allocation. It can be done swiftly, fairly, and intelligently, or it can be done slowly, and messily, and inefficiently, and also it can be not done at all. If it’s happened, the best is to deal with it swiftly and fairly. And when the shareholders get hurt really badly and the banks have to recapitalize at punitive levels, or get taken over $2 a share, I think it’s fair—the banks made bad decisions, the equity holders are the prime beneficiaries of the activities the bank is undertaking. When things go poorly, they should be the primary bearers of the loss. I think that’s good.
think about this in the context of startup valuations or sales or whatever (or when it turns out a startup has a fraudulent product). the loss has already happened, but in private; the financial stuff in the news is just accounting
One of the oldest, in fact I think the oldest money market fund, the progenitor of the whole industry, a fund called the Reserve Primary Fund—Primary had meaningful exposure to Lehman paper. Something like 2 percent of that fund was in Lehman paper. When Lehman went under, people who had shares of the Reserve Primary Fund, especially institutional investors who were very much on top of what Primary’s holdings were, started to ask for redemptions from that fund. So that led to a run on that money market fund.
As a result, Primary “broke the buck.” They had to mark down their Lehman exposure. The holding, the value of one share of the Primary Reserve Fund, was no longer $1—money market funds always try to maintain the value of one share at $1. And that just caused people to—I think the technical term is “lose their shit.” People just lost their shit. You thought you had money; now you don’t have money. And you don’t know how much you have in Reserve Primary Fund, really…“We think people will recover 98 cents on the dollar, we don’t know how long it will take to get people back their money,” and suddenly all these money market funds fell under suspicion. [...]
oh man this is just wild
I think at AIG and at some of these investment banks, there were people who were doing these securitizations who knew that ultimately they were going to blow up, and they didn’t care. They didn’t care because the structure of compensation at a place like AIG and certainly at the investment banks leads people to take a future-discounting model, that’s what I’d call it. There’s this year’s compensation period…and then there’s the future. And the future is very heavily discounted. And many of these risks, like the risk of an economic shock grave enough to cause these brittle subprime securitizations to break, was something you wouldn’t expect to happen every year, it would take a couple of years, and because people were paid according to mark-to-market profits in a given year, they continued to do this business even though they knew that it was storing up risks for an eventual meltdown. That’s true of AIG and that’s true of the investment banks.
kind of a funny way to put it (discounting the future). reminds me of that scene in the pale king where DFW fails the final because of the compounding effect of not studying (depreciation schedules)
Financial variables are a way of accounting for what’s going on in the real world. But the real world itself starts to react to financial variables if they’re extreme enough. And it’s funny—the financial system, all the big guns that have been wheeled out by the government and the monetary authorities, have in the last couple weeks kind of stabilized what gets called the “guts” of the financial market. There is short-term credit, there is a certain degree of lending between banks, corporates are able to get their commercial paper rolled over, for the most part. So it’s functioning—in a much reduced fashion, there are surprises and shocks every day, but it hasn’t ground to a complete halt. But now you are seeing the effect on the real economy. So what’s happening? We have the largest one-month drop in payrolls in twenty-five years. You’re starting to see real job loss. You’re starting to see actual companies going out of business, or high-profile default. [...]
Some of that impact is not a direct impact of the financial markets, but it’s the hangover from the misallocation of resources, which is the same thing that’s causing problems in the financial markets. Whereas a pure impact of the financial markets is where people look at their 401(k)s and say, “Gosh, I don’t want to spend.” That’s a pure impact of financial variables causing people’s attitudes to change, changing their risk tolerance, their propensity to consume.