by
Keith Gessen
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[...] 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
[...] Not only does finance measure and profit by speculation on the fundamentals of economic life; it also helps shape and discipline the reality of production and circulation. [...] financialization essentially represents an unaccountable form of global economic planning, yet one with no broad goal, save for the endless competitive maximization of profit. The result is a world cut to fit the financial imagination, whose benefits accrue largely to the wealthiest percentiles, and whose dramatic costs are endured by the majority of humanity. [...]
Perhaps the most terrifying feature of financialization is that there is no one steering the ship; there is no grand conspiracy, though its operations do depend on lesser conspiracies. Rather, I want to understand financialization as a means by which social agency (at both the highest echelons of the financial world and the lowest depths of the sub-prime) is transformed and reoriented towards the reproduction of a pathological and cancerous system.
i really like the invocation of "sub-prime" here. very fitting.
[...] we take up Marx’s (1981, 594–652) notion of fictitious capital in a way he probably did not fully intend it: capital’s reproduction depends on and transforms the social fictions that animate society. Financial wealth may be largely “fictitious,” but that does not make it any less “real”: as Thomas King (2003), among many others, teaches us, fictions can be among the most powerful forces in human societies. Indeed, it is through shared fictions that we reproduce social and subjective life itself.
[...] Louis Althusser (2014) spoke of ideology as an imaginary relationship to the realities in which we live, a false cohesive worldview that covers over the inherently partial, fractured and contradictory nature of our consciousness. In this sense, ideology is not some passively received, generic, prepackaged simulacrum dispensed from on high and swiftly internalized. Rather, as Eagleton explains, ideology is an active creation whereby individuals and groups are constantly in the process of making sense of their world with the intellectual and cultural resources that they find at hand. Likewise, Fredric Jameson (1981; 1984) has approached ideology as a false or fragmentary synthesis based on real experience, or an inherently limited attempt to grasp the unfathomable complexity of capitalist totality. Hence, ideology is not simply “false consciousness,” nor is it merely a “top-down” imposition. Rather, it is a field of contestations and activities, an evolving and emerging set of meanings and explanations created by people as they make sense of their world. But, importantly, it is not a totally free or unmediated process: to build ideology, we draw on those cultural and social resources at our disposal (from fiction to films, from metaphors to measurements) that are, themselves, ideological. We are unduly influenced by those forces of cultural production and social institutions that monopolize meaning and broadcast knowledge: the media, religion, schools, fiction and so forth.
So, perhaps, we can understand financialization as an ideological process, if we apply this expanded definition: it is a process whereby a set of narrative, metaphoric and procedural resources imported from the financial world come to help explain and reproduce everyday life and the capitalist totality of which we are a part. But, in so doing, they also transform that reality more broadly. To the extent that we see ourselves as miniature financiers, investing in and renting out our human capital, we act, behave, cooperate and reproduce social life differently. To the extent that we see health, education, government programming, relationships, games, shopping and work as investments and see our lives as fields of paranoid securitization, we build up an ideological armature which occludes certain aspects of social reality and precludes certain futures. But, further (and this is crucial), financialization also means a moment when the financial system, and the capitalist economy of which it is a part, is dependent on and invested in the ideologies, practices and fictions of daily life as never before. In a moment characterized by ubiquitous debt, escalating consumerism and political quietism (or, worse, reactionism), and by a highly volatile financialized economy, the realms of culture and ideology can no longer be said to be merely the superstructure of a “real” economic base. [...]
lovely writing: "the extent that we see ourselves as miniature financiers", "ideological armature". also potentially useful when thinking about ideology
[...] What do we make of a system where the rise and fall of whole economies appear to hinge on the performative speech acts of central bank chiefs, or on the confidence and credulity of increasingly fickle investors (Marazzi 2008, 13–36); of a system where stock markets are so jittery and interwoven that they can tumble because of a leaked memo at a Fortune 500 corporation? What do we make of a system that, ultimately, is in the grip of imaginary money, where nearly unfathomable flows of immaterial wealth define and determine the material lives of nearly everyone on the planet? There is something here about the relationship of culture and economics that troubles our established understandings and frameworks.