Rhinocrisy

So, following the downgrade and the resulting stock-market plunge, it’s worthwhile to shine a little light on S&P, to eradicate my own ignorance, anyway. If you wish to peer over my shoulder, I’m noting down my observations here. The company is a subsidiary of McGraw-Hill (yes, the guys who made your Geometry textbook), led by one Deven Sharma, a Bihari of relatively modest background (he has a degree in business management from OSU). Mr. Sharma last year penned an editorial in the WSJ complaining that they may be held to account (that is, face liability) for their rating standards, and calling for the repeal of ratings requirements on the debt held by certain investors. That is, the correct response to the colossal failure of ratings agencies to correctly identify CDOs, etc., as radioactive bombs, should be to remove ratings requirements from debt - that is, debt could simply be unrated, and a rating is merely a suggestive imprimatur bearing no significant or determining weight.

It’s quite clear why S&P’s president feels this way; he wants to punt. In the boom time he was happy to rubber-stamp junk and collect his commissions on it; now that the obvious deficiency of his agency (viz., their complete lack of any accountability for their ratings) has come to light, and some people in Congress are proposing an accountability mechanism, suddenly, S&P ratings should only be considered “just one of many tools”.

He also says:

[O]ur criteria for rating a security [following post-recession corrections] as AAA (our highest designation) include consideration of what could happen to a security if the country faces an economic scenario on par with the Great Depression.

Bear in mind that this was written well over a year ago. Now, it’s arguable that S&P was spot-on for rating all of that crappy debt AAA, since as it turned out, it was backed by the U.S. government. The government took the hit on behalf of all of that shitty debt, and now that its debt situation looks precarious, S&P wants to downgrade THEIR rating. This is high irony - if they had just done their fucking job correctly in the first place, instead of being greedy banksters, there would have been no need for a downgrade of U.S. government debt. S&P screws the pooch twice - first by not doing the job a ratings agency should (actually rating debt correctly), and then pillories the government (and the entire world) for cleaning up after their mess. Die in a fire, S&P.

None of which is to say, of course, that we don’t deserve a downgrade. We’re like a Bantustan right now, except without the political cohesion.

Obviously there’s plenty to disagree with, here (like, deflation is probably bad). Still, the egregious handouts to banks is worth highlighting.

This is the video of the year. Spread it:

Via Matt Taibbi.

Yes, it’s true. I’ve thought about it, and after doing some math, I decided that we should bail out the auto industry. This is the math:

700/35 = 20

I’m not a big fan of Detroit. They make big, badly-engineered cars designed to fall apart quickly. They had a program of selling larger and larger cars to the American market over the past fifteen years.^* But they do actually MAKE things.

Remember how, in the 1990s, economists told us there was a “new economy”, and from now on we would make our bread from lines of code, “intellectual property” and cunning manipulations of people’s psychological states? Remember how they slowly implemented a program of shifting our “old economy”, based on building stuff with our hands, to other countries? And remember how that turned out to be a load of hooey, and it all fell apart a few years later? Well, now it’s time to shore up the sagging remnants of our manufacturing sector and get back to using our hands again.

It’s somewhat mysterious why there’s so much nervous dry-washing and fidgeting over this prospective bailout. It can’t be the money - we spend the same quantity in Iraq in three months, and we’re giving away twenty times that amount to the financial industry, which hasn’t exactly proved itself capable of handling money correctly. But of course in that case, we’re providing liquidity, the all-important hydraulic fluid which keeps this fabulous capitalist golem moving and flailing. Never mind that the valves and flanges have all burst, and there’s really nowhere for that precious fluid to go except to drain onto the ground. There’s very little point disbursing funds when you don’t have a clue what to invest them in, because all the pieces of the economy that actually produce goods and services - rather than uselessly moving money around - are in tatters. The act of bailing out the financial sector is comparable to a desperate Rabbi Loew operating his golem by standing behind it and repositioning the limbs as necessary. The illusion is gone - it’s not a glorious automaton, it’s not a magical engine driven by the spark of the divine word. It’s just a dead piece of clay. We’re better off coming out from behind the machine and doing the work ourselves - fix what we broke. Let the golem return to dust.

I have little faith that the Big Three will make good use of the money. And perhaps it would be wisdom to let them be dashed to pieces against the rocks of their own failed vision. But I’m more inclined to say that right now we should be focusing on keeping our heads above water. We posted half a million jobs lost in November. And as a great man once said^†, people have got to put food on their families.

^* Culminating in the opening of a Truck-a-saurus dealership down the street from me a few years ago - the flames kept me awake at night and the fumes gave me black lung.

^† Probably right before he fell off a Segway.

While deriving a sense of fiendish pleasure from cataclysm and horror is a relatively normal, albeit contemptible, form of behavior, still, one should maintain a measure of good sense in one’s ghoulish delights. That is to say, it is best to cackle gleefully a safe distance from the burning house, and not when you are still standing amidst the flames, and the beams are coming down around you. But, alas, I have to confess to this level of imprudence.

I was in India when the financial markets first began to melt down, and I noted with some dismay that my initial reaction was NOT alarm, or concern, or brooding, or even a detached calculation, but real satisfaction that the whole mess was at last unraveling. I’ve been waiting for this.

The reasons I felt this way are straightforward: aside from my experiencing the normal thrill that any serious gravitational gyration produces, high finance is the keenest and clearest distillation of a doctrine that I’ve ideologically opposed for a long time. And, to be clear, my opposition is wholly ideological: while I had some expectation this was coming, my expectation was born out of faith rather than theory. It’s the same satisfaction the chosen will feel, as they’re being whisked away in the Rapture, when they look down to see the earth crack open, and a wave of demons riding on a tide of magma pours forth to engulf billions of pitiful, wailing human beings in their fiery, merciless clutches: “My God! I was right the whole time!”

But there is another reason. There’s also the germ of hope: after ruin comes rebuilding. I have great plans for this human race! I believe that we can be so much more than we have been, that we can aspire to greater things. Now that this dazzling, glamorous fog has been blown away by a rather ill wind, we should turn our heads up and look again at the stars. These are the moments, on the brink, at twilight, when the veneer is thinnest, for us to examine ourselves and our surroundings and find a new way. This is the right time to dream.

Dream loudly.

Fuck Negroponte, man. My roomie has an OLPC XO. I played with it a bit, recently. It’s a beautiful device. The applications are ingenious, simple, and extremely powerful. They’re the kind of thing that anyone could enjoy using. The few apps I played with seemed designed for growth - you can start off merely fooling around, but if you want to go further, the sky’s the limit. What’s more important is that the XO was FREE. Of course, it cost $150, but it was free in the important sense of that word - free like air and water, free like sunshine and mother’s milk. Now, it’s another brick in the wall. Well, can’t have those emerging markets polluted with non-Microsoft products, I suppose.

Lately I’ve been reading John Perkins’ “Confessions of an Economic Hit Man”, which I heartily recommend if you are anxious to get steamed up about imperialism and debt slavery and the like. Anywho, therein Perkins says the following:

I recalled an economics professor from my business school days, a man from northern India, who lectured about limited resources, about man’s need to grow continually, and about the principle of slave labor. According to this professor, all successful capitalist systems involve hierarchies with rigid chains of command, including a handful at the very top who control descending orders of subordinates, and a massive army of workers at the bottom, who in relative economic terms truly can be classified as slaves.

This is a pretty powerful indictment of capitalism, if you have any kind of commitment to anti-poverty, equality, social justice, etc. And certainly many capitalist cheerleaders will promise you that capitalism will, indeed, inevitably lift everyone out of poverty and provide us all with the stable, eco-friendly utopia we’d all love to be a part of.^* This led me to construct what I call “The T-shirt Argument”, which goes as follows:
Read the rest of this entry »

This article in the Financial Times really must be read. It’s astonishingly forthright in its discussion of how, although it has been a “great time for capitalists”, “workers” “demanding their share of the pie” may start eating into profits. I’m always amused by the fact that the most devoted Marxists are the fat-cat capitalists.

Please, please, PLEASE, can someone explain to me the appeal behind an iPhone? Here we have a $600 device - the equivalent of a modestly-priced laptop computer - that, as far as I can tell, succeeds at providing the following services:
* Phone
* Internet
* Camera
* Music
Now, many devices have provided these before in combinations of twos and threes. I suppose the iPhone might be the first to provide these in one package, and has the usual Apple stylish design and the propensity to break. And yet, YET, the iPhone is being hailed as a “revolutionary” device!

Here is where I put on my “what the fuck” hat.^*

I am unclear exactly what revolution the iPhone is supposed to precipitate. People being able to listen to music on the go? No, no, this was accomplished some twenty years ago with the Sony Walkman. People being able to answer the phone on the go? No, no, this was accomplished some fifteen years ago with the first cell phone (whatever it was). People being able to access the Internet on the go? No - dozens of different sorts of devices are doing this even as we speak. In fact, it seems like a large minority of phones are now somehow ‘Net capable.

As to the iPhone’s stylish design and (putative) ease of operation: if this is revolutionary, then the world is in sad, sad shape. First, bad design is not something that requires advanced technology to overcome. Bad design should not happen, period. There is only one reason why you should release a badly-designed product: because you can get away with it. Is this the revolution? That someone has circumvented the fact that people are willing to tolerate crappy products, merely because NO ONE, to date, has bothered to make a passable one? I am skeptical. In any case, making it slightly easier to enter text into a phone does not qualify as a revolution in my book.

So, what, exactly is the revolution the iPhone has allowed? As far as I can tell, it lets us do one thing: it lets us (after spending $600) throw out our iPods.

As a geek, what I want from my phone is the ability to futz around with it. My current phone has some amazingly bad presets - button bindings, for example. Why can’t I change those button bindings? Surely that would vastly improve the appeal and usability of the phone. Every phone, additionally, is equipped with a very crappy, low-baud bluetooth modem, and usually with an equally crappy IR port. This is an absurdly powerful functionality that is completely underutilized. Why do I still have to tell people my phone-number, for example? Why can’t I just squirt out a bluetooth signal to their phone, announcing who I am? Why can’t I set my phone to respond automatically to a bluetooth transmitter in a movie theater, putting it into silent mode the moment I enter the hall? Why can’t I easily patch into my neighbor’s conversation via bluetooth? Why doesn’t every fricking cell phone let me control my TV?

More to the point, why isn’t there a phone with an open API that lets people build such applications? Cell platforms should be minimal operating systems that third parties can add onto. Such a cell phones could do all sorts of awesome nonsense with relatively trivial effort. THAT would be revolutionary. I suspect, however, there’s too much money to be made nickel-and-diming us, so we’ll have to please ourselves with the likes of the iPhone. As far as I can tell from the frenzy, fake orgasms are better than the real thing anyway.

^* You know the one: it has a large stuffed vulture on it, last seen on the head of Neville Longbottom’s grandmum.

Forget black lung. Popcorn worker’s lung.

… a group of California food-flavoring workers recently diagnosed with bronchiolitis obliterans, a rare and life-threatening form of fixed obstructive lung disease. Also known as popcorn workers lung, because it has turned up in workers at microwave-popcorn factories, the disease destroys the lungs. A transplant is the only cure…. Flavoring manufacturers have paid out more than $100 million as a result of lawsuits by people sick with popcorn workers lung over the past five years.