Archive for the ‘capitalism’ Category
The internets is all abuzz about a fellow named Greg Smith, a former executive director of Goldman Sachs who publicly announced his resignation for the firm on the op-ed pages of the New York Times. Smith argues that while the firm used to be a place with a “culture” that “revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients,” it has become a place dedicated solely to making more and more money. “Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.” He writes of attending “meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them.”
While most readers, I think, have rightly praised Smith for his decision, others have been somewhat critical, pointing to the fact that he quit only after receiving his latest bonus, or that his op-ed reads like a cover letter for his next job application, particularly this paragraph:
My proudest moments in life — getting a full scholarship to go from South Africa to Stanford University, being selected as a Rhodes Scholar national finalist, winning a bronze medal for table tennis at the Maccabiah Games in Israel, known as the Jewish Olympics — have all come through hard work, with no shortcuts. Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn’t feel right to me anymore.
The mention of the Maccabiah Games is especially amusing. Still, though I also applaud Smith, this Star Wars parody of the op-ed expresses my sentiments well.
Seriously, was Goldman Sachs ever really a place with that culture of honesty, “revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients”? Does anyone think “humility” and associate that with Goldman, or any investment banking firm, or really any high-level finance job on Wall Street? I think the first word most of us think of is “douchebag.” I’m sure that even when Goldman and Sachs were 19th century German-Jewish immigrant peddlers schlepping their dry goods around America, their business motto was always about the bottom-line.
Smith should know this. He is a clearly a smart, accomplished individual. But he got a full ride to Stanford. Presumably that means no loans, no debts. Why did he go work for Goldman in the first place? Did he honestly believe that even 12 years ago, the job was about anything other than helping rich people get richer, and getting rich in the process? Or was he sucked into the elite school culture that said that I-banking and consulting are the only way to go? A culture that said that the job was prestigious, a place for the smart and talented to excel, never mind what they were actually doing.
Also, we should not single out Goldman Sachs. I’m sure Smith would have worked at a different bank if Goldman had rejected him, and that bank would have the exact same “culture,” or lack thereof.
I just read a great article in last week’s New Yorker, “Kin and Kind: A Fight About the Genetics of Altruism,” by Jonah Lehrer. Unfortunately, it’s behind a pay-wall, so you should try to find a paper copy somewhere. As a humanities major, I can’t really do it justice, but it’s all about how various species, from vampire bats to the above pictured leaf-cutter ants, engage in different degrees of altruism, from the Darwinian phenomenon known as “inclusive fitness,” where animals look after not only their own offspring but also their nephews and nieces, to the “eusociality” of ants and other insects, “in which individuals live together in vast cooperative societies.” Human beings, of course, also live in complex cooperative societies, regardless of what Republicans might tell you about rugged individualism. The article is also about the academics attempting understand the biology behind benevolence, the “genetics of altruism,” and includes interesting discussion on the difference between mathematicians and biologists, who have been working together to understand these phenomena.
What interested me the most, however, was an apparent throw-away paragraph (that was clearly not a throw-away paragraph) about one of the scholars involved. Corina Tarnita, a math prodigy who grew up in rural Romania, had excelled at Harvard as an undergraduate, but was becoming bored in a doctoral program there until she discovered a textbook on “the mathematics of evolution.” Unlike her previous research on abstract algebraic geometry, this seemed more concrete, and got her excited. She emailed the author of the textbook, Austrian biologist Martin Nowak, also at Harvard, to see if she could work with him on this. But her life remained at a crossroads:
At the time she emailed Nowak,Tarnita had a dilemma. She’d recently received a job offer from a large hedge fund, for a lucrative position as a quantitative analyst. She was tempted by the money. “I like fancy clothes and fast cars,” she says. “I told myself that if Martin didn’t email me back then maybe I would leave Harvard.” Fortunately, Nowak responded and soon invited Tarnita to join his working group.
The word “fortunately” in the final sentence reflects a bit of editorializing on the part of the piece’s author, Jonah Lehrer, but it’s an opinion I’m sympathetic to. I think it would have been rather disappointing had Tarnita given up a potentially path-breaking career in the academy for the rewards of Wall Street.
People in both parties are attacking GOP frontrunner Mitt Romney for his time at Bain Capital, a private equity firm that bought companies, downsized them–that is, fired many employees–and then sold those companies at a profit. Even his rivals in the Republican primaries have taken something of an anti-capitalist line, in opposition to the free markets that Romney represents.
As readers of this blog can guess, I don’t have a particularly high opinion of Mitt Romney. The only office I’d ever elect him to would be the captaincy of team douchebag. Nonetheless, it’s important to know whether we’re asking the right questions about his time at Bain.
Private equity firms like Bain often seek to fix firms that have failed to adjust to economic change. This can mean downsizing, increased automation, offshoring, and the like. These changes make enterprises more efficient, and in some cases save firms that would otherwise have gone bankrupt. These kinds of changes also produce broad-based gains that should not be discounted, particularly in the form of lower consumer prices. We could not, and should not, have stopped these changes in the economy.
As Josh notes, certain classes of workers have been hit especially hard. While capital has benefitted, workers have seen layoffs, pay-cuts, and long term unemployment, particularly those with skills that have become less valuable or even obsolete. Josh is right to argue that as a businessman, Romney was correctly concerned with making his company profits, not with the plight of his laid off workers. But Josh wisely adds, “while the human effects of these economic shifts are not properly the concern of business executives, they are the concern of government officials, and Romney wants to be president.” And so the right questions are:
What policy implications arise from the economic shifts of the last few decades, driven (in small part) by private equity. Does rising income inequality mean that fiscal policy should be more redistributive? Does a reduction in job security call for a stronger safety net? Do new workforce needs mean we need a shift in education and training policies?
Basically, the president is not a CEO, and it’s his or her job to care about all the workers, and the economy as a whole. And if you don’t want to take Josh’s word for it, take Paul Krugman’s, who said pretty much the same thing in his recent column. Josh reminds us that “as governor of Massachusetts, Romney’s signature policy achievement was a universal health care program—that is, a safety net program that reduces the cost of job loss or income loss.” Of course, Romney has said that Romneycare worked for Massachusetts, but the Affordable Care Act, patterned after Romney’s plan, is no good for nation. But that’s a whole other discussion.
Cracow I remembered. My memories of Warsaw from 12 years ago were much dimmer, but Cracow stood out in my mind. I remembered the old synagogues, the oldest built into the ground so as to avoid being taller than churches. I remembered hassidim scurrying about. I remember standing by the Wawel Castle, though all our guide told us was that Nazis set up their Polish General Government there and placed a swastika flag atop one of its towers.
A lot has changed in 12 years. Despite the old buildings, Cracow feels like a new city, the economy revitalized, tourists heading from shop to shop. The place is almost painfully charming, and pardon the pun, you get the feeling that hanging out in city’s medieval central square never gets old.
Of course, I’ve changed a lot too. When I came to Cracow in 1999, I was a boy of 16. I didn’t know any history at all, especially non-Jewish history. Since then, I’ve been privileged to attend Dawson College’s Liberal Arts program, where I received a steady grounding in European history, reinforced by my bachelor’s degree at Harvard. At NYU, my focus shifted to the United States, but I took a couple of courses, in eastern European history and eastern European Jewish history, that gave me the knowledge, if not the languages, to understand the region. Frankly, I think both me and the city have changed for the better.
This time around, I made a point of not limiting myself to the Jewish sites. I actually entered Wawel Castle, explored its state rooms, and stood in awe of its beautiful cathedral. I hit all the major churches listed in Cracow’s In Your Pocket guide. I don’t think I went to a single church in 1999, and what a shame that was. But I doubt I would have appreciated them then anyway. I’d have been amazed by their beauty, but without any understanding of the role Catholicism has played in Polish history. Wawel Castle was so much more meaningful now that I know something about the Polish-Lithuania Commonwealth, and about the three partions of the battered nation in the late 18th century.
I know more Polish Jewish history now too. I understand the role that antisemitism played in revitalizing Polish nationalism, particularly in Galicia, in the late 19th century. From David Engel, I learned that Jews had been invited into the Polish kingdom, but the population expected them to behave like guests, not citizens, placing them a good distant apart even when citizenship was finally granted to them. I’m no expert, but apart from knowing whether to spell Cracow with a “c” or a “k,” I think I have a decent handle on the place.
And this time around, going to those synagogues was more meaningful. Instead of focusing on the death and destruction, I imagined that my grandfather and great aunt may have prayed at any one of them while they attended the Jagiellonian University in the 1920s.
Walking around the Jewish neighbourhood of Kazimierz, I saw life rather than death. The place had certainly changed since 1999. It was somber then. Now, tourists, Polish and foreign, populate the streets. The hassids are still there, but they seem more comfortable. And the kitsch has exploded. One Jewish history professor I know compared it to Disneyland. I see it more like Colonial Williamsburg, except without the tacky costumes and with a death camp an hour away.
This didn’t entirely bother me though. Sure, tour go-courts whizzed past us advertising trips to Schindler’s Factory (unopened in 1999) and visits to nearby Auschwitz. Norman Finkelstein’s book The Holocaust Industry comes to mind, except I see no need for that degree of cynicism. Tourists should see the death camps. And seeing death camps costs money. And that money is lining some businessman’s pockets, not advancing the Zionist cause. If capitalism helps people learn, in the most vivid way possible, about the defining tragedy of the 20th century, then so be it.
The New American Underclass, the Unraveling of America, and Bruce Springsteen: A Review of Someplace like America
According to a recent study by the National Employment Law Project, the vast majority of new hires made since the Great Recession has started have been in low wage jobs. People are losing mid or high wage jobs and gaining low-wage jobs. Meanwhile the wealth gap between races is the worst in 25 years. Black families have lost half their median family assets, and Hispanics have lost a shocking 2/3rds of their median household assets.
From a bird’s eye view, then, the Great Collapse of 2008, which many of us thought would be the death-knell of neoliberalism, has turned out to be its best friend. As is often the case, capitalism will come out of the crisis reorganized and restructured, with access to desperate low-wage workers, who no longer even expect mid-range wages, a larger reserve army of the unemployed in order to keep those with jobs in line, and a radical Tea-Party led (and Democratic- abetted) assault on unions, government regulation, and social services. Those who still have jobs are working more hours and seeing their responsibilities multiply, while getting paid less. The age of austerity may finally realize Milton, Barry, and Ronald’s dream of destroying the post-war social compact.
And yet, as Dale Maharidge points out in Someplace like America, a new book of photographs and stories from the Great Recession, for most low-income America, the Great Recession (or as he calls it “The New Great Depression), began decades ago. Since at least the 80s, Reaganite economic policy has created a growing underclass of Americans, who have largely seemed invisible to American society. For a brief moment in 2009, Mahardige remembers, journalists were interested in the tent cities springing up outside of cities in California and Florida. But they wanted to hear about people who had just lost their jobs. In fact, most of the residents had been struggling for years, even during the supposedly good times of the 90s. The Crash simply broke the camel’s back.
In some ways its an underclass whose lives seem familiar to us: the men and women who ride railroads, sleep under bridges, squat in abandoned factories, hover outside of overcrowded breadlines, and drift from town to town drawn by rumors of work seem all reminiscent of Woody Guthrie songs and John Steinbeck novels. But it also deeply alien to see it today, which is why many of the most jaring photographs juxtapose images of 21st century American consumption (a Kenny Rogers ad, a faded Office Depot sign, a Wal-Mart, etc…) next to images of 21st century poverty, to familiarize us with a phenomenon we were told doesn’t exist anymore. Suburbanization and the creation of highways has, to a large degree, pushed this poverty out of sight. The poverty rate in the suburbs, where poverty tends to be much less visible, has been skyrocketing.
In many cases, these are men and women who have known better. Much better. There is a sense of bewilderment to the unraveling of the Fordist social compact, as people can’t quite understand why they don’t have the opportunities their parents did. There is B.T., found selling his life’s possessions alongside a highway in Tennessee, in order to buy food. He was an auto mechanic for years, and was laid off a year and a half ago. “I’m ashamed. I’m the kind of guy who works. I always worked… I haven’t gone to the church yet, because I’m a little embarrassed,” he says. His area of Tennessee was devastated by NAFTA, as the Oshkosh factory closed up and went to Honduras.
The authors go to Youngstown and follow the diaspora of workers, scattered after the devastating closures of the steel mills. In a shack outside of Houston, they find one. His grandfather had worked in the mills in Youngstown, he had hauled steel. When it all crashed down, he lost his job, drank, and drifted. Now he “babbled nonsense… a creature that once was a man,” and lived on the streets. They interview Sally, an “upper-middle class” mother, whose husband was a business-owner. Now she’s waiting outside a food bank in Michigan with a crowd of people. “None of the 224 faces,” she stands with, “register as being any different from those you’d see in a suburban shopping mall.”
One picture is of a family—the baby stares directly at the camera– while the family is too embarrassed to look-up —in line at a free health care clinic in rural Virginia. The caption is the kicker: The Remote Area Medical Volunteer Corps used to only work with the “desperately poor” in third-world countries. Now it operates largely in rural America.
True poverty, Maharidge points out, takes some time to kick in. At first, when people lost their jobs in Youngstown, they survived. Some found new jobs, others accepted lower pay. Many drifted on unemployment or disability. But eventually these supports dry up, and the longer you’re out of work, the harder it is to get new employment. You are evicted or foreclosed, your family or friend gets sick of you crashing with them, and you move on. Maybe you hear about an opportunity a couple of towns over, but can’t afford a hotel room or a deposit on a rental. So you begin sleeping in your car. Gas and maintenance becomes too much, so you hitch or walk. Many sell blood or begin scrounging food from wastebins, at first in moments of despair, later as an everyday activity. The embarrassment and stress gets to people, who begin abusing drugs or alcohol. Many are victims of theft, murder, or rape, and rarely do the police investigate.
As the Great Recession continues (and it is continuing for most people…) the middle class is falling into the lower class, the lower class falling into the poor, and the poor falling off the social map into the informal economy of scrounging, subsistence farming, petty thievery, homelessness, prostitution, and the like. There are almost certainly more Americans who live like this then, say, Americans who watch the Daily Show. Mahardige and Williamson introduce us to “Edge men,” people who have completely given up on the prospect of employment, and squat or set up tents outside of cities, to live permanently outside of society. With years of high unemployment, and millions of so called ‘99ers approaching the end of their benefits, we better get used to seeing these people.
The authors of Someplace like America had previously collaborated on Journey to Nowhere, which had the distinction of inspiring a number of Bruce Springsteen songs, including Youngstown. There is a line in that song, “those big boys did what Hitler couldn’t do,” referring to the destruction of the steel mills. It comes directly from an unemployed steel worker Joe Marshall Sr. There is an odd section of Someplace like America, where the authors meet Springsteen and sneak into the abandoned Jeanette blast furnace (the “Jenny”) to contemplate what’s happening to America. I’ll give Bruce, who wrote the introduction to this book, credit. In his own way he’s been warning about this stuff for decades, while much of the left couldn’t even use the word “class.” During the heady days of Morning in America, while the Democratic Party began its now unbreakable marriage with Wall Street, he was writing about the consequences of these policies. He saw the future better than most political pundits did.
Even many of us on the left aren’t nearly as comfortable talking about poverty and class, as we were in the 30s. We’re comfortable with racialized urban poverty, which makes sense in our post-68, urbanized, information-age worldview, but have pushed rural poverty (white or black) completely out of our imaginations. We live in Brooklyn or Cambridge or San Francisco or Portland, little bubbles that have done much better than the rest of the country. Our discourse is almost completely unable to talk about poverty except as a technocratic problem. The moral core of the problem—that some have so much and some have so little, and that this is a result of collective decisions we have made—can not fit into our ideological imaginations.
Which is why the photographs by Michael Williamson are so important. I wish there were more. It’s a book that is self-consciously in the tradition of Let us now Praise Famous Men (the authors previously had done a follow-up, called And Their Children After them) and Dorthea Lange. The photos are stark black and white images, often of destroyed mills or houses, with only slight traces of human activity. When he focuses on a human subject, often the faces are obscured, as the child pumping water by hand, from the only source of fresh water in Bayview Virginia, a rusty iron spigot. B.T., the unemployed mechanic selling his life’s possessions from the back of his truck, looks down, ashamed of what he’s doing. Perhaps my favorite photography is of “Edge Man Ed.” You only see him in silhouette against a gigantic garish photograph of smiling Kenny Rogers smoking a cigar. Ed had saved the plastic sheeting from a Rogers’ billboard and was using it to make a tent out of.
Williamson walks a fine line, between drawing attention to the poverty and helplessness of his subjects and trying to find the dignity and resolve in their faces. It’s hard not to see the same tension in how Mahardige talks about the subjects or we think about them. Too much pity makes them degraded victims; too little anger is inappropriate.
Several years ago, I was having dinner in Dupont Circle, a gay-friendly neighbourhood in Washington, D.C., with a gay Jewish friend and his boyfriend, also a Jew. My friend, who describes himself as both a “professional Jew” and a “professional gay,” brought up the topic of Israel. I don’t recall exactly what was said, but both he and his boyfriend expressed pride in the fact that Israel was rather tolerant towards gays and lesbians, much more so than its Arab neighbours. I agreed with the sentiment, but expressed some skepticism as to its value.
I remember saying that many right-wing, hawkish supporters of Israel, would proudly praise Israel’s record on gay rights, or women’s rights, or any other issue that showed that Israel was a modern, western, country, with a tolerant, progressive society, not unlike that of the United States or Canada. I remember thinking that these people didn’t give a rats ass about gay rights in America, or about feminism anywhere in the world, apart from trumpeting Israel’s superiority over its backward Muslim enemies. This was especially true for Israel’s Christian Zionist supporters, many of whom were actively hostile to gay rights and women’s rights.
This sort of analysis always made me a little uncomfortable, like comparing the Israeli military’s efforts to reduce civilian casualties with the goals of Hamas suicide bombers, who hoped to maximize them. Having the best human rights record in the Middle East is a little like being the best student in a remedial math class: not something you should really be boasting about. Sure, Israel is more tolerant of gays and lesbians, and more progressive on women’s issues than Syria, but so what? As a modern, western, democratic state, shouldn’t it aspire to play in the big leagues with the United States, Canada, western Europe and the like?