September 27, 2008
It’s Fiscal Meltdown Weekend here at The Opinion Mill! As John “Keating Five” McCain offers America his economic expertise, here are some recent books that show you the wonders of unfettered capitalism and the magic of the marketplace.
If you want to hear echoes of the subprime mortgage fiasco, read Jane Kamensky’s The Exchange Artist: A Tale of High-Flying Speculation and America’s First Banking Collapse. It’s the story of Andrew Dexter Jr., who in the early 19th century used ingenious new financing techniques and a string of undercapitalized banks to build the seven-story Boston Exchange Coffee House, what was then considered a huge office building. The scheme collapsed in 1809, sending the young American economy into its first (but not last) serious tailspin. Dexter spent the last thirty years of his life hiding from creditors. Nowadays, of course, he’d have a conservative think-tank sinecure, a spot alongside Larry Kudlow on CNBC and an advisory post on the McCain campaign team, which only goes to show how far things have come.
Kevin Phillips published Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism on the verge of the current crisis, making him look downright prescient. As one reviewer puts it:
Phillips has warned for years about the inevitably malign consequences of what he calls the “financialization” of the American economy. Sometime in the mid-’90s, he writes, financial services overtook manufacturing as the biggest chunk of the U.S. gross domestic product. If you believe, as Phillips does, that all the furious activity on Wall Street masterminded by the likes of Citigroup and Goldman-Sachs and Merrill Lynch is just a bunch of speculation and froth that doesn’t actually result in the creation of anything real, then there has never been a better time for triumphantly pointing out the disasters that ensue when the rest of the world also realizes that Wall Street is wearing no clothes.
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Explore Evolution, the new pseudo-textbook from the creationism-pimping Discovery Institute, is out and the reviews are rolling in!
John Timmer, Ars Technica: “wildly inappropriate for use in a science classroom . . . the book doesn’t only promote stupidity, it demands it. In every way except its use of the actual term, this is a creationist book, but its authors are expecting that legislators and the courts will be too stupid to notice that, or to remember that the Supreme Court has declared teaching creationism an unconstitutional imposition of religion.”
Nick Matzke, The Panda’s Thumb: “their newest disguise for creationism.”
PZ Myers, Pharyngula: “I’ve read it, too, and it is as awful as Timmer says. Don’t buy this book. Watch your local school board, and make sure they don’t buy it either. Some will be trying to do so.”
Lenny Flank, DerKeiler: “It consists of nothing but the same old crap that creationist/IDers have been putting out for forty years now, and it won’t survive ten minutes in court. If this book ever goes to trial, I want a front rwo seat — I want to see, with my own eyes, Paul Nelson attempt to testify, with a straight face, that this book has nothing at all whatseover to do with either creation ‘science’ or intelligent design ‘theory’.”
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Aravind Adiga’s debut novel, The White Tiger, is set in India, but not the boom-time India celebrated by Thomas Friedman and other apostles of globalization. Its protagonist, Balram Halwai, is a villager who resorts to murder to attain the social mobility promised but not delivered by India’s outsourcing-based economy. The Brooklyn Rail interviewed Adiga, and got a description of the dark reality behind the sunny success stories pushed by Friedman:
Rail: Has India’s rich-poor divide actually led to an outbreak of crime between servants and masters?
Adiga: The servant-master system implies two things: One is that the servants are far poorer than the rich—a servant has no possibility of ever catching up to the master. And secondly, he has access to the master—the master’s money, the master’s physical person. Yet crime rates in India are very low. Even though the middle class—who often have three or four servants—are paranoid about crime, the reality is a master getting killed by his servant is rare. But it’s on its way… What is stopping a poor man from taking to the crime that occurs in Venezuela or South Africa?
Rail: Why don’t India’s class divides lead to the crime rates that occur in other Third World countries?
Adiga: You need two things [for crime to occur]—a divide and a conscious ideology of resentment. We don’t have resentment in India. The poor just assume that the rich are a fact of life. For them, getting angry at the rich is like getting angry at the heat…But I think we’re seeing what I believe is a class-based resentment for the first time.
Rail: But on the surface the class divide seems to be shrinking. The media tells us things like call centers and outsourcing are not only threatening the American economy but also revolutionizing Indian society.
Adiga: I wanted to problematize the depiction of outsourcing within India and outside. In the long run it’s not a particularly good thing for the country. It doesn’t create real jobs. It doesn’t actually give employees any skills. It’s kind of like a shot of sugar—it’s great at first, but it actually has no nutrition. Anyone who thinks outsourcing is going to fix India’s economic problems is deluding himself. Outsourcing counts for less than 1% of the economy. 99% of Indians have problems that are entirely separate: water, agriculture, irrigation, electricity. I wanted to show that this is a very small, weird part of the Indian economy and the bulk of life is way outside this.
Rail: Speaking of water, Balram says, “There is no water in our taps, and what do you people in Delhi give us? You give us cell phones.” In fact, India has more than 240 million cell phone users.
Adiga: The cell phone is fascinating because it has always held up in India as a sign of progress. Even the poor have cell phones now. But access to drinking water has deteriorated in the past ten years. And most development economists will tell you that a lack of access to drinking water—to clean water—is the single biggest cause of poverty. Say a construction worker gets typhoid and can’t go to work for two weeks. He loses his job and there’s no insurance. He’s living in poverty and is going to stay in poverty. Throughout India you see the water table seems to be falling, crop yields are declining, people are having greater trouble finding access to water. It’s one of the clearest class divides in India: if you have access to regular water in India, you’re rich; if you have no access to water, you’re poor. Technology is one aspect of progress; it is not progress in itself. Progress is holistic—it’s water and cell phones.
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A diagnosis for Martin Amis and Christopher Hitchens. Another poet from Minnesota who’s beloved by rock musicians. A venerable list of rules for writers. A call to help raise money for the preservation of Mark Twain’s home.