My pal Chris wrote a moving post about an experience he had growing up in South Africa, a white boy who went with his church to talk about Jesus in the “coloured” townships.
Which made me think about traveling and the relationship we rich, “white,”[*] educated people have with the rest of the world. I commented on Chris’ blog, but here’s what I wrote:
I was in Cuba some years ago on holiday and I recall reading before I went about how Cuba had been “spoiled” by tourism, and how you couldn’t have a genuine interaction with people any more because they see Westerners only for their wallets now. It’s true, as far as it goes – those Cubans did see me as a wallet.
But these days (even then), that kind of talk makes me angry, because built into it is this assumption that we deservea certain kind of treatment, as if the world is a kind of park, where we can go visit various places to get wonderful experiences: Bhutan for the mountains and the sage monks & yak-milk tea; Philippines for the sunrise while visiting tropical islands in a skiff guided by a wiseacre biologist; Hong Kong where we can do commerce with the shouting market people, who get such a kick out of Gweilos straying beyond Kowloon. Drinking beer late at night in the veld listening to stories of African leopards. Cuba for sexy music and smiling, dancing people.
I’ve experienced all these things and loved them, they are experiences I cherish. But I have done these things, am able to do these things because I am wealthy and white, and the world, truly is my oyster. I remember being in university, thinking: I will travel the world, I will undertake adventures, I will see distant land and do great things. And for a few years I did. I loved it; it was dashing and daring and exotic and all the things it’s supposed to be. And granted to me with ease, and no sacrifice, because of who and what I am.
I hated that trip to Cuba, not because Cubans see me for a wallet — which actually is “annoying” — but rather because of what I, as tourist, saw Cuba as: a place filled with people who should like me for who I am, give me the benefit of the doubt, people who should see beyond my colour and my new running shoes and instead have a conversation with me about what life is really like for them, because, well, I’d be happy to do the same for them if they came to Canada. That is, I saw Cuba as: entertainment. I’d paid for it, and didn’t get what I wanted.
And it pissed me off, not that Cuba didn’t deliver; but rather that I had put myself in that position, of “he who has paid to be entertained.” I don’t mean that on a surface sense, but at a deeper level. Tourism puts us in such an odd dynamic with people: you are there to get something out of an “experience” … joy, wisdom, commune with nature, commune with another culture, history, something…And the exchange? What do we give up? Our time and our money. Only one of which is worth anything to anyone.
I have this odd feeling that tourism and it’s thinly veiled cousin, “international development,” are about as colonial as a military invasion: the real beneficiaries are the tourists, the NGO’s and their rich, adventuresome consultants; just as the beneficiaries of military invasions are rarely those under whose name invasions happen, these days at least.
I say all this because I am conflicted by Chris’ story of the townships … I have been treated well by people all over the world, treaded poorly by others; i’ve been robbed and cheated, threatened and bored to death. All of it great, and I wouldn’t trade it. Saying I’ve had yak’s milk in Bhutan gives me great pleasure (I was there to “help” the Bhutanese, naturally).
But it’s curious when our own innocence or blindness is caught out — as I guess the young Chris Hughes’ was — by something so moving, which is the twin realization that:
a) we do not belong somewhere
b) we are welcomed nonetheless.
I think that might be just the thing that irks me about our modern white fascination with “doing” Asia, or “doing Columbia,” … this assumption that we do belong there. It’s our world afterall.
So I find Chris’ story very moving because, I interpret it something as a recognition that he did not belong where he was … and yet….and yet…there was kindness, despite his naivete, despite where he came from, despite the preposterousness of the situation, and not because of it.
* Re: “white” I use this term broadly, and really it’s the wrong term. It’s not “white”, so much as “affluent middle-class, educated westerner…” I’m using it as a cultural marker, not a racial one; though the two are not totally unrelated.
“The Big Takeover: The global economic crisis isn’t about money – it’s about power. How Wall Street insiders are using the bailout to stage a revolution,” by Matt Taibbi, in Rolling Stone:
In essence, Paulson and his cronies turned the federal government into one gigantic, half-opaque holding company, one whose balance sheet includes the world’s most appallingly large and risky hedge fund, a controlling stake in a dying insurance giant, huge investments in a group of teetering megabanks, and shares here and there in various auto-finance companies, student loans, and other failing businesses. Like AIG, this new federal holding company is a firm that has no mechanism for auditing itself and is run by leaders who have very little grasp of the daily operations of its disparate subsidiary operations.
In other words, it’s AIG’s rip-roaringly shitty business model writ almost inconceivably massive — to echo Geithner, a huge, complex global company attached to a very complicated investment bank/hedge fund that’s been allowed to build up without adult supervision. How much of what kinds of crap is actually on our balance sheet, and what did we pay for it? When exactly will the rent come due, when will the money run out? Does anyone know what the hell is going on? And on the linear spectrum of capitalism to socialism, where exactly are we now? Is there a dictionary word that even describes what we are now? It would be funny, if it weren’t such a nightmare. [more…]
“No Return to Normal: Why the economic crisis, and its solution, are bigger than you think,” by James K. Galbraith in Washington Monthly.
The oddest thing about the Geithner program is its failure to act as though the financial crisis is a true crisis—an integrated, long-term economic threat—rather than merely a couple of related but temporary problems, one in banking and the other in jobs. In banking, the dominant metaphor is of plumbing: there is a blockage to be cleared. Take a plunger to the toxic assets, it is said, and credit conditions will return to normal. This, then, will make the recession essentially normal, validating the stimulus package. Solve these two problems, and the crisis will end. That’s the thinking.
But the plumbing metaphor is misleading. Credit is not a flow. It is not something that can be forced downstream by clearing a pipe. Credit is a contract. It requires a borrower as well as a lender, a customer as well as a bank. And the borrower must meet two conditions. One is creditworthiness, meaning a secure income and, usually, a house with equity in it. Asset prices therefore matter. With a chronic oversupply of houses, prices fall, collateral disappears, and even if borrowers are willing they can’t qualify for loans. The other requirement is a willingness to borrow, motivated by what Keynes called the “animal spirits” of entrepreneurial enthusiasm. In a slump, such optimism is scarce. Even if people have collateral, they want the security of cash. And it is precisely because they want cash that they will not deplete their reserves by plunking down a payment on a new car.
The credit flow metaphor implies that people came flocking to the new-car showrooms last November and were turned away because there were no loans to be had. This is not true—what happened was that people stopped coming in. And they stopped coming in because, suddenly, they felt poor.
Strapped and afraid, people want to be in cash. This is what economists call the liquidity trap. And it gets worse: in these conditions, the normal estimates for multipliers—the bang for the buck—may be too high. Government spending on goods and services always increases total spending directly; a dollar of public spending is a dollar of GDP. But if the workers simply save their extra income, or use it to pay debt, that’s the end of the line: there is no further effect. For tax cuts (especially for the middle class and up), the new funds are mostly saved or used to pay down debt. Debt reduction may help lay a foundation for better times later on, but it doesn’t help now. With smaller multipliers, the public spending package would need to be even larger, in order to fill in all the holes in total demand. Thus financial crisis makes the real crisis worse, and the failure of the bank plan practically assures that the stimulus also will be too small. [more…]
As a start-up, I’ve complained about how conservative the Canadian business culture is, especially banking and finance. But boring has it’s benefits, when things get shaky. From Newsweek:
In 2008, the World Economic Forum ranked Canada’s banking system the healthiest in the world. America’s ranked 40th, Britain’s 44th.
Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in North America one year ago. Now it is the fifth-largest. It hasn’t grown in size; the others have all shrunk.
So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada’s more risk-averse business culture, but it is also a product of old-fashioned rules on banking. [more…]
Given that we lost 129,000 jobs in January alone, I don’t think it’s fair to say our economy is thriving. But certainly our banking sector appears to be in decent shape.
Speaking of which: 60:1 leverage in European banks? God help us.
When I worked at Prebon in 2000 (on financial/insurance products that would financing greenhouse gas reductions while hedging against the risk of greenhouse gas legislation), I remember trying to figure out the credit default swap market. At the time, it was a relatively new product, and it was where Prebon – a broker, not a trader – was making a killing. Generally in the financial business, new products are where all the profits are. Once your clients and competitors figure out what they’re buying, transparency comes into the market, efficiency, and prices/margins drop. But in the early days of a financial product, the margins are huge – because if you are offering something people want, and no one else is offering it, and no one else understands it, you can strip out enormous profits.
Anway, at the time the CDS market was pretty new and pretty hot. A credit default swap, nominally, is an insurance policy against the issuer of a financial product (say, a bond) defaulting. What it became was something else altogether, a massive commodity trading scheme where the underlying commodity (the CDS) had come completely uncoupled from the underlying assets. By the time things started collapsing last year, the CDS market was $30 trillion dollars. It’s a massive liability that no one’s really owned up to yet. NYTimes has a good article explaining things and asking when the next shoe will drop:
Any honest assessment must include the role that credit-default swaps have played in this mess: it’s the elephant in the room, the $30 trillion market that people do not want to talk about.
Credit-default swaps are insurancelike contracts that Wall Street created in the early 1990s. They allow bondholders to protect themselves against losses if a company or a debt issuer defaults….
Sellers of C.D.S.’s spent years raking in premiums while underestimating or simply ignoring the possibility of rising defaults. Regulators let the market grow unchecked.
In the end, far too much of this insurance was written at way too cheap a cost. Now, with Wall Street and the economy in tatters, the fear that already-hobbled financial companies may have to pay off huge amounts on C.D.S. arrangements hangs like a cloud over the markets.
C.D.S.’s have already figured prominently in taxpayer bailouts. The $150 billion rescue of the American International Group, for example, came about because of swaps the insurer had written on mortgage securities. And the $100 billion taxpayer backstop handed to Bank of America on Jan. 16 had a good bit to do with soured credit-default swaps that the bank inherited when it acquired Merrill Lynch. [more…]
Canada’s feisty copyright lawyer, Howard Knopf, explores how good intellectual policy could help Canada thru the economic mess:
Most governments are now taking decisive steps towards decisions on and implementation of major stimulus/investment packages to rescue, resuscitate and even reinvent national and international economies. Canada, apparently, is going about this in its own way, with no such decisions yet announced. In Canada, things are actually getting “curiouser and curiouser” as we head towards a political crisis.
However, following the Rahm Emanuel maxim that “Rule one: Never allow a crisis to go to waste”, here are some bold ideas that would probably never fly or even be seriously considered in normal times in Canada about using IP and IP policy to help fix up the economy. Some of these would require legislation or regulations. Some would not and would only require sufficient leadership, will and skill at the political level – which are not necessarily any easier to come by [more…]
What happens if (or, rather, when) China decides to stop financing US debt to create export demand for its manufactured goods, and instead starts to spend that money on creating consumer demand in China?
David Simon is a former journalist who quit his job because he could no longer do it the way he wanted to do it: the companies that run papers these days don’t want their journalists to ask the most important question out of the famous five Ws + H (who what where when why how) … That is: Why? … It’s the tough one, that takes time and attention and doggedness, and it just doesn’t seem to work well with the “bottom line” (which, for those counting, is looking pretty grim).
Eventually Simon, along with a former cop, and former teacher, created the TV show the Wire,
In this talk at Berkeley, he explains why he is not (or maybe is) the most angry man in television, how the decline of journalism is paired with our disfunctional democracy, how a barge, not a hurricane, caused the floods in New Orleans, lies, damn lies and statistics, systematic corruption, and how we should all pick something to give a shit about and, absurd or not, fight for it.
Here is the video. Watch it. It’s the most compelling bit of web content I’ve seen in a long, long time.
Interesting article in the WSJ, about that scrappy entrepreneur, Barack Obama:
If Barack Obama ran for president by calling for a heavier hand of government, he also won by running one of the most entrepreneurial campaigns in history.
Will he now grasp the lesson his campaign offers as he crafts policies aimed at reigniting the national economy? Amid a recession, two wars, and a global financial crisis, will he come to see that unleashing the entrepreneur is the best way to raise the revenue he needs for his lofty priorities?
Like every entrepreneur, Mr. Obama’s rise was improbable. An unusually-named, African-American first-term senator defeated two of the most powerful incumbent political brands, the Clintons and John McCain. Like many upstarts, he won by changing the rules of the game.
Mr. Obama, following FDR’s mastery of radio and JFK’s success on TV, is the first candidate to fully exploit the Web. The community organizer seemed to realize that new social networking and video technologies were perfect for politics. It didn’t hurt that Facebook co-founder Chris Hughes worked for the campaign. “What ultimately transformed the presidential race,” Joshua Green of The Atlantic wrote in June, “was not the money that poured in from Silicon Valley but the technology and the ethos.”
The results of Mr. Obama’s decentralized Web effort were staggering: 8,000 Web-based affinity groups, 50,000 local events, 1.5 million Web volunteers, and 3.1 million donors who contributed almost $700 million. Republicans, Charlie Cook reported on Nov. 3, believe their large but impersonal centralized databases could not match the tacit knowledge, individual initiative and agility of Mr. Obama’s diffuse social networks.
Such creativity could bubble up because Mr. Obama was stable at the top. Not just anyone could recruit an army of volunteers and let them run free, establishing their own networks, offices and events. Because Mr. McCain lurched from one message and tactic to the next with dramatic frequency, his supporters froze. They spent more time defending or deciphering his shifting policies and tactics than they did organizing and persuading. Mr. Obama’s even temper and relentlessly consistent message, on the other hand, encouraged supporters to take risks without the worry of being blindsided.[more…]
The article goes on to argue for laissez-faire economic policies and deregulation, much of which I don’t agree with. Experience at LibriVox tells me that what leads to success is a clear objective, backed up with carefully designed regulation that clarifies what people can/can’t do, and *then* the widest amount of freedom possible, within set constraints. Obviously LibriVox ain’t the United States, but unleashing individual creativity is still about balancing openness with clear boundaries, and that’s the challenge Obama has, writ not just large, but world-wide.