Blowhard, Esq. writes:
“I ceased in the year 1764 to believe that one can convince one’s opponents with arguments printed in books. It is not to do that, therefore, that I have taken up my pen, but merely so as to annoy them, and to bestow strength and courage on those on our own side, and to make it known to the others that they have not convinced us.” — Georg Christoph Lichtenberg
Paleo Retiree writes:
This is Part Two of a three-part series. Part One is here.
Another distinction that I’ve found useful is between people who think the current system can be responsibly and successfully managed and people who think that our current system is hopelessly rigged in favor of the banks and needs rebuilding from the ground up.
As far as I can tell, whether you’re on one side or the other of this question has nothing to do with political alignments or philosophies, let alone with rationality generally. It has to do with temperament, and with personal reactions. The reason for this, I suspect, is that it can be hard to look very far into the financial crisis without finding your brain latching onto such larger questions as “What is money, exactly?”, and “Why do we accept money as money?”, and “How does money get created”?, and “Who gets to create it, and why?” Scary thought: If our financial world is at heart nothing but a confidence game, what happens when people start to lose confidence in it? If money is but a magic show, what becomes of the illusion when the curtains are pulled back?
Once questions like these start to be asked and answered, personal feelings start to intrude bigtime. Do you react to what you’ve learned by musing, “Hmm, a bit jerrybuilt, sure, but I can see ways of making it work”? Or do you respond by thinking, “Good lord, it’s a house of cards built on a shifting bed of quicksand!”? Which reaction you have seems to me to be entirely a matter of temperament.
Happy to admit that I’ve learned a lot from some representatives of the “We can make it work” crowd. My favorite responsible resources have been the book “13 Bankers” (by James Kwak and former IMF honcho Simon Johnson) and Charles Ferguson’s documentary movie “Inside Job.”
In fact, if a friend were to ask about the fastest way to get up to speed on What Just Happened, I’d suggest watching “Inside Job,” a tough (but easy-to-watch) look at the crisis that argues (as does “13 Bankers”) that what we’ve lived through has been a slow-motion coup d’état by the financial sector. Ferguson isn’t just another documentary filmmaker, by the way. He’s a successful entrepreneur and political insider who turned to documentary filmmaking in order to pass along what he’s seen and learned.
In essence: Over the course of some decades, the financial sector has taken over our political sector. And not just metaphorically, either: our bankers have made our political rulers their bitchez. That’s the main reason, IMHO, why it’s such a waste of time to let yourself get swept up in the usual Dem-vs-Repub, Obama-vs-Romney battles. It’s Wall Street that’s calling both their tunes. The real battle here is between Wall Street (and their political flunkies) and the Rest of Us.
“Inside Job” has occasionally been available on Netflix Instant View, but even if it isn’t currently on offer there it’s well worth buying. If you’re reluctant to shell out, try looking at it this way: the DVD is the same price as an inexpensive book and — let’s admit it — unlike most of the books you buy, which you’ll never read, you’re very likely to make your way through a DVD.
Another “it can be managed” group that I’ve learned a lot from is what’s called “MMT” — the Modern Monetary Theory crowd. Like many people who encounter the group, I’d initially been completely unaware of their existence — they’re very unorthodox by mainstream standards. And I found it hard not to react to them with intense suspicion. Most are academics (often based at the University of Missouri, Kansas City), and for some reason many of them are prone to both didacticism and high-flown “Don’t be ridiculous”-style language-use. Both these tendencies set my alarm bells to ringing loudly. Plus, the MMTers purport to be doing nothing more or less than describing the accounting-level basics — the by-definition truths — of how today’s monetary/financial system works. Crank that I am, I’m always suspicious of people who claim to be beyond ideology and to be delivering the mere simple factual truth.
A couple of further misgivings I have about them (not that I’m really entitled to these misgivings …): The MMTers tend to see the economy as more amenable to a lever-throwing-and-dial-twisting style of management than I’m comfortable with; and they radiate a kind of “If only decent people who REALLY understand how things REALLY work were in charge, everything would be fine” attitude that completely puts me off. FWIW: My aversion to both these things probably has its roots in the ’60s and ’70s, when hyper-confident, top-down government Keynesians lost all control of the economy while assuring us that they knew exactly what they were doing, as well as exactly which levers needed to be pulled.
Still, they’re a smart and startling crew. On an ultra-basic level the MMT message is: Too many people (and that would include politicians and economists as well as you and me) are applying notions that held true during the gold-standard years to the very different reality of our fiat-money world. (Fiat money, credit money, debt money … Whatever.) And we screw up because of this. If only we understood — and were honest with ourselves about how — today’s economy really works, then we could finally get back in charge of it.
Are the MMTers as right as they claim to be about How Things Really Work? Is their description of how our economic/financial world works as free from ideology as they say it is? And even if it is, does such knowledge really confer the kind of do-gooding power they seem to think it does?
Of course I don’t know. But I can say that the MMT crowd is starting to make an impact on the general discussion — you’ll be seeing and hearing more of them. I can also say that wrestling with their arguments has scrubbed some scales off my own brain. Plus, hey, it can’t be a bad thing that MMT sends both Gary North (hardcore Austrian) and Paul Krugman (hardcore Keynesian) into conniption fits.
Some prominent MMT types you might enjoy exploring include L. Randall Wray, Warren Mosler and Bill Mitchell. The popular website Naked Capitalism, hosted by a woman who calls herself Yves Smith, has been influenced by MMT. I haven’t gotten around to Yves Smith’s own book yet, but it’s on my bedside. (OK, in my Kindle.)
My personal favorites of the MMT crowd are two guys who are less academic-and-theory-bound and more practically-oriented than most of the others are: William Black and Michael Hudson. These days Black teaches, but back in the ’80s he helped clean up the Savings and Loan mess. (Here’s a great piece by Black.) Hudson currently writes and teaches, but back in the day he worked for Chase and for Arthur Anderson. (Here’s Hudson’s latest book.) Both of them have a lot of informed, enlightening and lively things to say. The easiest way to start with their contributions might be to type their names into the YouTube Search box. Both have been interviewed on video numerous times.
To be continued tomorrow …
Paleo Retiree writes:
This is Part One of a three-part series.
Since my recent retirement, the main way I’ve been busying myself intellectually has been in trying to make sense of the financial collapse of 2008. “What on earth just happened?” is/was my basic response to the events of that year. My only excuse for being as uninformed as I was about the situation: While epic shenanigans and dramas were unfolding in the political and financial worlds, I was paying attention to other things: movies, books, computers, food, personal life …
Realizing that I had a lot of catching-up to do, I’ve read books, I’ve watched documentaries, I’ve haunted blogs … Not being in possession of a math-type brain (to put it mildly) and having less than zero experience in the financial world — I can barely, and only for mere seconds at a time, wrap my mind around what a credit-default swap is — I want to make it clear right up front that I have nothing of worth to add to the information-and-analysis part of the discussion. (Hey, I generally like to be a modest person, but one virtue I’m happy to claim for myself: When I don’t have personal experience with a field I make an effort to restrain myself from carrying on about it like an expert.)
The main benefit of my haphazard research: I now feel familiar with the discussion — with the basic information; with the points people talking about the collapse generally make; with the positions that are argued for and against (and argued from); with the responses and solutions that are proposed; etc. I can watch the news and pay attention to the debate and actually follow along in a familiar-with-the-material kinda way. And even if I’m too smart about my dumbness to enter into the debate, I can’t resist treating myself to an opportunity to pass along some observations about it.
OK, then.
First, a distinction I’ve found useful: between mainstream people and the fringier crowd. Between, in other words, people who take seriously the case offered up by the politicians, the mainstream press, the mainstream economists, and the Fed and people who don’t. To repeat myself: On the one hand: People who take (or pretend to take) the official narrative at face value. On the other: People who are skeptical of the official narrative. (Do Bernanke and Obama buy their own class’ p-r? I wish I knew.)
Here, I’m so temperamentally incapable of respecting the establishment’s account — essentially, “Not to worry. Mistakes were made (blizzard of details here) but we’ve got things under control now” — that I have nothing to add. After all, either you’re someone who’s part of The Matrix (also called “The Cathedral” by some reactionary sites I enjoy visiting) or you’re someone who has made an escape from it — or who, perhaps, never bought into it in the first place.
My second observation came as a surprise to me: While the Dems and the Repubs enact the requisite conventional-narrative fistfight, real lefties and real righties turn out to share much in common. One of the most striking things that has hit me during my explorations is the way that the analyses and descriptions of What Just Happened offered up by the real left and the real right overlap almost completely. The interpretations and solutions they propose may differ dramatically … but what they’re seeing and describing is often the exact same thing.
Here’s one small example from among the many that I’ve run across. Ann Pettifor, a British FDR-loving social democrat of the Dalai-Lama/Bono sort, explains here that the current mess dates from the early ’70s. Nathan Lewis, a gold bug who writes for Forbes, thinks so too. The differences set in only at the level of explanation: Pettifor thinks it’s because the early ’70s is when capital controls were lifted. Lewis thinks it’s because the early ’70s is when Nixon took the U.S. off the gold standard. To me, what’s more striking is the way they agree — something happened in the early ’70s — than the ways they disagree.
(So shoot me: I like both Pettifor and Lewis. They’ve both got valuable contributions to make, and they both make ’em in ways I enjoy. A general life-lesson I can’t resist venturing: In politics and economics, no one possesses the one final answer; many people have things of value to add; and those things of value can come from all over the political compass.)
FWIW: My favorite source for leftie info and interpretation about the financial world has long been Doug Henwood, whose reporting on Wall Street I’ve followed since the ’80s. I love Doug’s book “Wall Street”; you can download a free copy of it here. Highly recommended: It’s clear, feisty without being tendentious, eye-opening, and full of startling info. One typical passage:
Take, for example, the stock market … What does it do? Both civilians and professional apologists would probably answer by saying that it raises capital for investment. In fact it doesn’t. Between 1981 and early 1996, U.S. nonfinancial corporations retired over $700 billion more in stock than they issued …
Smart, informative stuff, and delivered in a way even I can follow. I can’t imagine a better presentation of what Wall Street is, what it does, and how it works.
My favorite rightie source is the above-mentioned Nathan Lewis. I loved Lewis’ book “Gold: The Once and Future Money.” As absurd as the goldbug position can often seem, I found Lewis’ book amazingly informative and provocative. I’ve been surprised, in fact, to discover that gold can be an interesting vantage point from which to look out upon the financial, political and economic worlds. Fun to notice too that, at his rich and quirky website, Lewis reveals himself to be a major (and inspired) fan of traditional urbanism.
To be continued tomorrow …
Blowhard, Esq. writes:
“I leaf through now one book, now another, without order and without a plan, by disconnected fragments…If I encounter difficulties in reading, I do not gnaw my nails over them; I leave them there. I do nothing without gaiety.” — Montaigne
The Question Lady writes:
How do you deal with strangers who overhear the conversation you’re having and comment on it?
Fenster writes what he likes about . . .
. . . . Michel Camilo’s From Within.
That an essentially acoustic trio can rip the roof off better than 99% of amped-up groups overly reliant on the volume knob.
Anthony Jackson handling a wide-necked six-string bass like it is a toy.
Horacio “El Negro” Henandez’s turn on the drums. How does he make a blizzard of percussion seem so casual and effortless?
Camilo’s exuberance and graciousness toward his fellow musicians, ending with a smile of joy and thanks that is palpably real.
The Question Lady writes:
Do you ever think of yourself in the 3rd person? When and how? (Example: “That’s not the kind of thing Wayne Gretzky would do,” which you would say if you were Wayne Gretzky.)
Fabrizio del Wrongo writes:
“The Abyss” features one of the most striking opening shots in early cinema (it was released in 1910). Taken from the center of a busy urban street, it shows a woman walking away from the camera as traffic throngs around her. The poetic quality of the image is betrayed by a sense of unease. The woman seems listless, otherworldly, lost. For a moment you worry she’ll be struck by the streetcar moving towards the camera or that she’ll stray into the path of a moving bicycle. But at the last second she stirs to life and climbs aboard the trolley. Temporarily, at least, she’s rejoined the world of the living.
Sir Barken Hyena writes:
As a youngin’ I was first exposed to music theory in high school. I had a great music teacher, one of those rare souls blessed with contagious enthusiasm. I found, to my surprise, that I had a knack for it. It was the opposite of math: I got it instantly while everyone else struggled and lagged behind. Effortless A’s in a subject that was actually hard for once. I did my harmonization assignments in pen – no erasing! – and got 100%. Take that losers!
And yet, and yet…what did it all really mean?
I could hear that a Dominant Seventh resolved to the Tonic, and that same relationship could pivot to another key…but why? What forces were at work here? Where did these currents in sound come from? And, more mysterious, why did chords have emotional resonance at all?
Music Theory didn’t seem even to ask these questions. Now, at this time I was a devotee of Harry Partch. He was an early 20th century composer who threw the whole of western music out the window, along with it’s complex harmonic system going back to the Middle Ages. Instead of 12 tones per octave, he developed his own scale of 43, and an orchestra of instruments to play it. This led me to believe that music theory as I learned it was arbitrary, a matter of conditioning. We all grew up hearing the Dominant/Tonic thing millions of times (think 50’s doo-wop) and so it became implanted, and expected.
I gave up on music theory and hewed to the blank slate, as supplied by Brian Eno and others. (See my post The Brian Eno Disease). Having run that ship aground after rowing in circles, I’ve returned to the world of Dominants and Tonics and Modulations and all of that. But not Theory: I’m learning harmony by playing guitar and piano, empirically, with hands on and not a blackboard in sight. The right way. And I think I have a clue as to how and why those mysterious chords work their ineffable magic on us.
Here comes Mr Science!
To explain further, humor me while I put on my Mr Science hat. First let’s distinguish between noise and musical tone. Most natural sound is noise, which doesn’t mean unpleasant, only chaotic. Waves on the beach, wind in the trees, etc. But musical tone has pitch. And that sense of pitch comes from a defined series of tones hidden within that we don’t perceive outright, but the brain decodes. And it’s always the same: it’s called the Harmonic Series. Play a C on a trumpet, a piano, a flute, they all have this same series.
Now, why would we be able to hear this? It’s a complex process to decode sound, there must be some payoff or why would the ability have evolved? Because the series is also the key to timbre, or tone color, so it also helps us hear what kind of emotion is behind the voice: a growl from cooing, a cry from a shout of joy, and so on.
Thought That Was Dull? Now Comes the History
In the past, almost all music, all over the world, was monotonic: only one tone was sung or played at a time, no matter how many instruments. Harmony, or polyphony (“many sounds”), which is used in virtually every minute of music we’ve ever heard in our lives, had not been invented (I’m simplifying for the sake of clarity so hold your fire, pedants). No 50’s doo-wop for the Romans.
Harmony as we know it started to develop in the Middle Ages. Why would it take so long? Well, any non-musician who’s sat at a piano and made an awful cacophony can grok that there’s some secret knowledge needed to put tones together in a way that makes nice music. And bit by bit, the monks of Europe figured it out. Clearly, they had some time on their hands. Slowly they built a systematic method of harmonizing different tones that produced pleasing music. It was unlike anything heard before.
And the way they did it was to use the harmonic series, embedded in nature, to guide the placement of these new extra tones. Bit by bit the system was expanded, through Bach, Stravinsky and jazz to the deep complex harmonies we have today.
So Where Does The Brain Hacking Come In?
If the emotional content of a voice is imparted to us and decoded by the brain via the harmonics, perhaps chords work the same way? And that’s where the hacking comes in. Because the chords we use only approximate the harmonics of nature. The actual tones are rearranged in subtle and complex ways. When we go from simple sounds like our doo-wop to more complex harmonies like The Rite of Spring or Thelonius Monk, nature has been left far behind.
Steven Pinker in his fascinating book “How the Mind Works” speculated about the origin of the aesthetic response to visual art, which has no apparent evolutionary survival justification. Basically he described it as the equivalent of cheesecake. Cheesecake packs together dense flavors that don’t occur together in nature, which thus overwhelm the palette and make the pleasure meter go off the chart in a way that natural foods don’t. The visual senses are similarly overwhelmed by art.
As a theory of aesthetic pleasure I find this wanting, to say the least, but I’m not trying to explain pleasure but communication. Suppose that our modern chords plug into that part of the brain that expects to decode emotions from voices, but the sounds going in don’t quite fit the templates, and so it tricks out strange new sensations, never experienced in nature? The brain’s system has been hacked, and the internal workings exposed to the harmonic scientist now in control, who takes it where he will. That would make the polyphony of those ancient monks, and modern Monk, a form of low tech brain hacking, quite akin to the way graphical perspective tricks the eye in art.
If so, it makes me wonder what other strange sensations might be slumbering within us, just waiting for some genius to think of a hack to bring them to life?
Blowhard, Esq.
Callowman
Sherbrooke
Eddie Pensier
Enzo Nakamura
Epaminondas
Fabrizio del Wrongo
Fenster
Brundle Guy
Glynn Marshes
Paleo Retiree
Atypical Neurotic
Question Lady
Sax von Stroheim
Sir Barken Hyena
The Mistaken
Uncouth Reflections 