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Sunday, September 21, 2008


The news is getting it all wrong, of course. As taxpayers prepare to foot the bill for the rampant explosion of unregulated bundled debt securities, the news casts the whole nightmare as an elaborate bailout of mortgage companies and homeowners. Yes, idiotic lending policies and bad personal decisions played a big part in this collapse, but that's not why Bush and Co. are poised to intercede. They're taking action in order to bail out the risk-takers at the top of the heap, the international institutions and the reckless robber barons of Wall Street who bet on these unregulated debt securities and lost, and should by all rights crumble to ashes as a result. Instead, this country is prepared to spend $700 billion on what? The answer to that is a complete mystery to everyone.

Glenn Greenwald summed up the whole slippery mess beautifully:

[W]hatever else is true, the events of the last week are the most momentous events of the Bush era in terms of defining what kind of country we are and how we function -- and before this week, the last eight years have been quite momentous, so that is saying a lot. Again, regardless of whether this nationalization/bailout scheme is "necessary" or makes utilitarian sense, it is a crime of the highest order -- not a "crime" in the legal sense but in a more meaningful sense.

What is more intrinsically corrupt than allowing people to engage in high-reward/no-risk capitalism -- where they reap tens of millions of dollars and more every year while their reckless gambles are paying off only to then have the Government shift their losses to the citizenry at large once their schemes collapse? We've retroactively created a win-only system where the wealthiest corporations and their shareholders are free to gamble for as long as they win and then force others who have no upside to pay for their losses. Watching Wall St. erupt with an orgy of celebration on Friday after it became clear the Government (i.e., you) would pay for their disaster was literally nauseating, as the very people who wreaked this havoc are now being rewarded.

More amazingly, they're free to walk away without having to disgorge their gains; at worst, they're just "forced" to walk away without any further stake in the gamble. How can these bailouts not at least be categorically conditioned on the disgorgement of ill-gotten gains from those who are responsible? The mere fact that shareholders might lose their stake going forward doesn't resolve that concern; why should those who so fantastically profited from these schemes they couldn't support walk away with their gains? This is "redistribution of wealth" and "government takeover of industry" on the grandest scale imaginable -- the buzzphrases that have been thrown around for decades to represent all that is evil and bad in the world. That's all this is; it's not an "investment" by the Government in any real sense but just a magical transfer of losses away from those who are responsible for these losses to those who aren't.

Greenwald's column should be on Salon's cover. Who put that idiotic TV critic's ramblings there instead?

9:42 AM

Saturday, September 20, 2008


In case you're in the dark about just how completely depraved our government's panicked bailout of this financial apocalypse is, check out this excellent and appropriately paranoid article in the New York Times (written by the stepmother of my exboyfriend from college, of all random and largely insignificant degrees of separation). I've been reading her lucid and refreshingly ill-tempered articles on credit default swaps and the other teetering houses of cards that precipitated this crisis for over a year now, and I think it pays for all of us to listen carefully to her message: This mess is hardly about the crappy decisions of a bunch of feckless individuals. It's about taking those crappy decisions (which were made possible, mind you, by the mortgage industry's insane and greedy extension of huge, idiotic, undocumented loans), bundling them together into unregulated derivatives, and selling them to institutions that used them to "get around their regulatory capital requirements intended to rein in risk". Yes, these massive, unregulated, risky securities were used as hedges, despite the fact that they were really "financial weapons of mass destruction" as Warren Buffet once described them.

And now the government is stepping in to avert a worldwide financial collapse, but the carnage looks suspicious. Bear Stearns and AIG, but not Lehman? Whose interests do we need to protect, and who's left twisting in the wind? What exactly will taxpayers be paying for? Who will set the value on these complicated derivatives, the banks or the government? Morgenson points out quite clearly that, because there's not nearly enough transparency in this realm, we have no way of knowing enough not to feels suspicious, and unnerved, every step of the way.

2:59 PM

Monday, September 15, 2008


Motherfucker! Train wrecks, natural disasters, financial apocalypso, and David Foster Wallace is dead. On days like this, all you can do is hit "refresh" on the New York Times site over and over again, for the latest tragedies to hit the presses. Just when you think the world can't get any gloomier, fifty crappy things happen at once.

Mostly I'm depressed about DFW, one of my favorite nonfiction writers of all time. I figured I'd be reading his books for decades to come. I know everybody asks this question over and over again, but I can't help it: Why do some of the smartest, most talented people end up killing themselves?

4:59 PM

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columnist for new york magazine & bookforum, author of disaster preparedness, co-creator of filler for the late, great suck.com

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