One of the funniest comedians ever to trod up to a microphone, George Carlin, has passed away at the age of 71.
Here is a sample of his best work:
Thanks for the laughter. Rest in peace, George.
One of the funniest comedians ever to trod up to a microphone, George Carlin, has passed away at the age of 71.
Here is a sample of his best work:
Thanks for the laughter. Rest in peace, George.
It’s very rare that a book about the 1920’s should make one think about the science fiction show, “Battlestar Galactica”; however, this volume certainly brought to mind Battlestar’s signature line – “All of this has happened before, and all of this will happen again.”Â Â To which I would add, “…but I hope not.”
The Presidency of Warren G. Harding is an obscure blur on the fringes of American history, not extensively studied except by a small coterie of academics.Â Laton McCartney’s volume brings this period to life for a wider audience, first of all, by showing how Harding was the candidate of oil interests from the very start.
The Republicans in 1920 were a party on the up; the ailing, enfeebled Woodrow Wilson seemed to symbolise the state of the Democrat Party. However, when the Republicans went into the convention, their favoured candidate was incorruptible General Leonard Wood. Then the oil men intervened.
Thanks to Theodore Roosevelt, much of America’s oil was held on public land – the Teapot Dome being one of the most prominent reserves. The oil men desperately wanted to get their hands on it, even if it meant subverting the political process. Leonard Wood refused to “play ball”. Harding gave them carte blanche, and susbequently got the nomination. Furthermore, Will Hays, the RNC chairman, depended on oil money to finance the 1920 campaign.
Harding himself was relatively unremarkable, sort of a mix of Bush’s intellectual abilities (H.L. Mencken said of Harding’s use of language, “It is flap and doodle. It is balder and dash.”) and Bill Clinton’s sexual impulses. He apparently enjoyed making love to his mistress Nan Britton, even under the most difficult of circumstances. He was unambitious; he publically stated that he preferred the Senate. However, pushed by his colleagues and his wife, he reluctantly took up the nomination, and helped by vast swathes of money and a relatively weak Democrat ticket (James Cox and a young Franklin Roosevelt), he won.
Once in office, it became a free-for-all; McCartney spares us no detail in the depths of the corruption, in particular that of Interior Secretary Albert Fall and Attorney General Harry Daughtery. “The Ohio Gang” that surrounded Harding proceeded to rape the country’s resources. Papers like the Denver Post were bribed to keep quiet. It seemed like the party would never end.
However, the scam ran into two obstacles: first, Harding died. Second, the plotters had to contend with the unsung hero of Jazz Age politics, Senator Thomas Walsh of Montana.
The greatest service that McCartney’s book performs is to bring Senator Walsh to public attention. His name should be on the lips of schoolchildren as a rare example of complete honesty in politics. He led the investigations into Teapot Dome for a decade: he could not be bribed, intimidated, or deterred. Indeed, his sole fault is apparently believing in the honour of others when there was none.
The other great service McCartney performs is to clear up the Coolidge record. Coolidge was conspicuously absent during the Teapot Dome investigation, preferring to distance himself from it rather than take it on as a matter of priority. In this, he was merely following the advice of former President Taft, who was appointed Chief Justice of the Supreme Court.
Finally, McCartney does show that the consequences of this wholesale swindle were minor: very few of those involved went to prison. At worst, some reputations were sullied. One of the oil magnates lost his son in a mysterious murder. Senator Walsh did not get the 1932 Presidential nomination nor a distinguished retirement: he died of a sudden heart attack just after his honeymoon.
Usually, there is a temptation to look back at the past with nostalgia, as the cliche goes, they were “the good old days”. We assume that the past is pristine in comparison to the now because the distance of time tends to diminish all that’s sordid and painful. McCartney de-romanticises history, and shows that if anything, politicians were more venal and corrupt then than they are now, and the only reason they are less inclined to transgress the law at this point is because there is a blogosphere ready to jump on them. Still, Bush is an oil man, Cheney worked for Halliburton, the oil companies have never had it so good in terms of return on investment. All of it happened before, it just happened again, but perhaps McCartney’s book will encourage us not to repeat it a third time.
Much of the recent hullabaloo about the “credit crunch” and “sub prime crisis” is emotionally satisfying. The stockbrokers, hedge fund managers, and other grey pinstripe suit hucksters with six figure gas guzzlers who got us into this mess have a healthy air of panic about them and a salubrious paranoia born out of wondering when the next crisis will emerge. If one were to use Tom Wolfe’s “Bonfire of the Vanities” nomenclature, it could be said that “The Masters of the Universe” are finding their constellations collapsed, and the “Big Swinging Dicks” have shrivelled like they’ve been blasted by an Arctic chill.
Bravo! If we must go through a recession, at least the majority get generous dose of schadenfreude, the in-flight movie on the swan dive to hell.
That said, it’s not an unreasonable assumption that they’ll be back: after all, the Great Depression, the Savings and Loans problems in the 1980’s, dubious loans to Russia in the 1990’s and the Dot Com bubble failed to destroy them. However, the present period of the hairshirt and chastisement may last longer than the titans of finance care to admit.
For most of us, banks are simply a fact of life; something that is necessary, evil or both. Their initial reason for existence has been obscured by finance’s present-day Byzantine complexity.
Banking’s raison d’etre can be summarised in a single word: trust. First, individuals trusted banks to store gold and keep it safe: this was a much better prospect than keeping it hidden under a mattress or in a strongbox.
Later, individuals trusted that bits of paper issued by banks were backed by sufficient gold to take on the role of currency. Later still, investors trusted banks to make prudent investments and get a return on the cash they had stored with them. Individuals and enterprises also trusted banks to have sufficient assets to provide loans. None of these innovations are recent: these assumptions have been in force since the Italian Renaissance.
What is most remarkable about today’s crisis is how quickly this ancient trust has been undermined. People no longer believe their savings are safe: for example, Britain recently experienced its first bank run in over two hundred years. Banks simply don’t know if their investments are prudent: modern financial instruments are so complex and opaque that no one truly understands how thoroughly sub-prime assets have infected the blood flow of liquidity. Individuals and enterprises don’t trust financial institutions to have sufficient assets to provide or take on loans.
To put it in Shakespeare’s parlance, the result is a “reeling world”. It’s gotten so bad that, quietly, the central banks have replaced the invisible hand: they have instigated large-scale lending to private institutions, thus providing the “trust” that the free market can no longer supply. Will this work? Maybe. In recent weeks, the Masters of the Universe have occasionally indicated that their planets will again spin in predictable orbits: there have been brief stock price rallies. So far, these gains have proven temporary.
However, if we are lucky, the present instability will be the last straw. Re-regulation is the watchword; it’s clear that much more responsibility will be taken on by government for what happens in the financial markets: the “Big Swinging Dicks” may be constrained by a chastity belt before they screw anything else over. If so, we should be glad: a more predictable, if sedate world, is worth obtaining, even if it means we’re no longer entertained by brokers on the edge of a nervous breakdown.
The collapse of Bear Stearns into the arms of the JP Morgan Chase was a seminal moment in economic history. It was not only indicative of how deeply the present “credit crunch” has affected long-time bastions of Wall Street, it was also an indicator of how far and wide the spectre of mistrust has affected the infrastructure of global finance.
Bear Stearns tried to keep the wolf at the door by bluffing; Chief Executive Alan Schwartz said on March 1that “We don’t see any pressure on our liquidity, let alone a liquidity crisis.” However, less than 48 hours later, he was going cap in hand to anyone who could help him.
It is a cliche, however, it is accurate to say that they only have themselves to blame; Bear Stearns heavily invested in financial instruments based on complex mortgage assets. Hence, they had problems approaching fellow banks in obtaining credit; other institutions understandably didn’t trust Bear, as they had no idea how valuable their assets were, given their potential exposure to problems in the sub-prime market.
This ignorance is widespread. One of the most pernicious elements of the sub-prime crisis was how inordinate risk was dispersed and hidden amongst other assets thus making it maddening difficult to untangle the good assets from the bad. Every bit of lending between institutions is done in a context where people are waiting for the other shoe to drop. Trust is a becoming commodity even rarer than credit.
This is a disaster for the titans of finance, for trust is the very foundation of banking, its reason for existence. Banks were founded in the first place as a safer, more trustworthy repository of gold than under one’s mattress. When bank notes were first issued, there was trust that a slip of paper had a particular value backed by precious metal. When loans were issued, there was trust that they would be paid back. When investments were made, there was trust that these funds would be used towards improving businesses.
Without trust, there is no finance. Without finance, there is no modern capitalism. The former “Masters of the Universe” of Tom Wolfe’s parlance are wandering around, blinking in the daylight of realisation, and unsure about what to do next. What will happen in a world that is devoid of the necessary confidence to keep the wheels turning?
Like most economic crises, the present situation has its roots in the extremes of human behaviour. There is something in the human mind that cannot cope with the idea of muddling along: rather, investors clung to the idea that prosperity was forever. The pendulum has since swung back to everything being cast in gloom. The truth has generally been somewhere in between.
These extremes have a consequence, however. In this instance, it has quietly murdered the neo-liberal capitalist order. We are not living in one now: the Federal Reserve and other central banks have been given ultimate responsibility for the economy, not the “invisible hand”. It is the central banks which are expected to prick the bubble of expectation when they become too inflated, and to pick up the pieces when illusions of eternal growth finally shatter. The people who pay the ultimate price are those who carry the weight of bailing out the folly. These are generally not the rich, who have access to accountants and tax lawyers who help them to (quite legally) avoid tax.
Rather, the burden falls on the middle class and the poor to fund these continual bail outs. What makes the present situation even more precarious is that the economy is under pressure from another direction: the ever increasing price of energy is having a knock on effect. In haste, the governments of both the United States and European nations have proclaimed bio-fuel as being the answer to the problem of diminished oil supplies. European regulations on leaving land fallow in order to recover have been ripped up to get as much of this valuable resource as possible. However, there are insufficient amounts of arable land to supply the demand for both fuel and food; the Brazilian answer of hacking down the rainforest to grow more sugarcane is an unappealing and environmentally costly solution.
The rise of inflation, and the absence of cheap food and fuel again hits the middle class and poor most strongly. In Britain alone, it is predicted that a family that had an average shopping bill of £100 per week last year, will see that annual bill rise by £570 in 2008. This is in an era in which supposedly the central banks have defeated inflation and achieved solid, year on year growth.
It gets worse: while in the West, there is a standard of living that would be incomprehensible to generations past, we find that at the same time, countries in the developing world cannot follow the same path. Their achievement the same level of consumption would only exacerbate the steep rise in
prices, and secondly, increase carbon emissions required to achieve the necessary economic output.
All in all, the picture is a very bleak one. We might wonder at the results of our cycles of extravagance and penury, trust and deceit. And again, it all leads back to the question: where do we go from here?
Where we go from here has to begin with a realistic assessment of how the world presently runs. First and foremost, with certain exceptions, there is very little appreciation for the long term. The requirements of shareholder capitalism and releasing of quarterly results mean that few firms are interested in six months down the road, let alone years from now. The incentives are structured in such a manner that one is inclined to grab as much as possible as quickly as possible, and leave the long term planning to someone else, even in a scenario where there is no someone else to make such decisions.
Second, there is no understanding of limitations. Massive economic growth cannot be maintained forever in circumstances where resources are finite. Even if a way is found out of the present commodities impasse, there is no way to get something for nothing: sooner or later, humanity will run into the obstacle that we inhabit one planet, and there is a limit to what can be extracted from it.
Third, we have to accept that democratic nations find it extremely difficult to make painful decisions. Politicians try to please the electorate rather than confront them with hard choices; for far too long, the electorate has been kept apart from the process, swaddled in the cotton wool of idle promises. In order to stave off pain, politicians borrow and divert resources, in the belief that they will be long gone once the final cheque comes due.
However, it looks as if the world is teetering on the edge of a reckoning. For example, the lack of preparation, the ignorance of limitations, and an inability to make painful decisions is particularly acute in Britain: the present Labour government did not use years of robust economic growth to shore up its financial position, it believed it could continue to operate in a scenario of limitless prosperity, and it has avoided making painful choices about where resources are best applied and how. The middle class and poor are paying the price, and getting no return on this investment.
Perhaps this is where the answer to the present scenario begins: the central banks are proposing and enacting massive bailouts of leading financial institutions. However, those who are actually paying for it are not receiving a share in the enterprises which have been rescued. Responsibility without power is the predicament of a eunuch.
The public should no longer be emasculated; at the very least, the governments and central banks should be giving shareholder certificates in any company that is rescued to the taxpayers. The amount of certificates received should be in direct proportion to percentage of income received by the state; thus those who specialise in tax avoidance should not disproportionally benefit merely because their contribution is more in absolute monetary terms. These shares should enable the taxpayers to have a voice in the decision making of these firms, and get a return on the investment made.
This alteration in the economic order should be augmented by a new kind of politics: “participatory democracy” naturally follows “participatory economics”. If politicians are not brave enough to set out the difficult choices because of their desire to maintain power, then decision making will need to be devolved to the most basic level. Hitherto, because of the somewhat tedious and arcane nature of politics, the public has been content to allow decision making to rest at the apex of a hierarchical pyramid. However, the present atmosphere of mistrust of politicians creates ideal conditions for pushing decision making to as close as the individual citizen as possible.
An emphasis on locality and pro-active citizenship could have the beneficial effect of framing debates in a way that shows that hard choices are inevitable, and that limits will have to be observed. These boundaries will have to be observed anyway: as Ayn Rand put it, “one can ignore the consequences of reality, but one cannot ignore the consequences of ignoring reality.”
As for the developing world, this is their chance to observe that if they continue to follow in the same path of development as the West, they will eventually reach the same impasse. While a certain level of scepticism has to be attached to the idea of others learning from history, the limitations on commodities necessary for further development will act as a spur towards this awakening.
Overall, however, the answer can be summarised in two rather dull words: thrift and accountability. Thrift and its synonyms frugality and parsimoniousness are neither pleasant nor fun words. The thought of being answerable for one’s actions tends to make one cringe. The idea of parcelling out resources intelligently, being cautious and responsible has very little appeal to people who want to buy an SUV, fly off to Ibiza for the weekend or “need” to buy several new pairs of shoes every two months. It is more akin to the grey necessities of rationing during wartime. However, if we are to maintain a decent standard of living, and if others are to achieve it, our lives need to be conducted within the confines of what we know will not lead to disaster in the medium to long term. It’s time to stop living just for today and to stop rising and falling with each tick of the stock market. It’s time to step up from the world as it is, to the world as it should be, not in a utopian sense, but in an anti-utopian sense, whereby a belief in uninterrupted prosperity is ditched, as such a belief always ends in tears. The question is, are we adult enough as a species to understand this? Can we conquer our own need to believe in illusions? If this present crisis doesn’t achieve this, perhaps nothing will.
I'm a Doctor of Creative Writing, a fiancée, a son, a brother, an uncle, a published novelist, a technologist, a student, and still an amateur in much else.