Crawl Across the Ocean

Friday, July 17, 2009

Stay Calm

From the entry for 'Calm' in John Ralston Saul's Dictionary of Aggressive Common Sense,

"CALM - A state of emotion which is overrated except in religious retreats. It is used principally to control people who are dissatisfied with the way those in authority are doing their jobs. When individuals show annoyance, the person in power or with privileged information or expertise will make them feel they are not calm enough to deal with the situation rationally. A lack of calm suggests a lack of courage, intelligence or professionalism.


The Captain of the Titanic was no doubt pleased that his male passengers in first class remained calm as they waited to drown. Had they been less controlled, they might have found some small satisfaction in passing their time by throwing him overboard"

If you follow the financial news, you'll have heard that the largest investment bank in the U.S., Goldman Sachs, has reported a profit of $3.44 billion dollars for the quarter, and said it had set aside $6.65 billion for pay and bonuses in the quarter ($226,000 per employee, on average).

In a different era, just the 'mere' fact alone of a company paying its employees a quarter of million each for 3 months of work while the rest of the country faces the highest levels of unemployment and wage cuts in living memory might be enough to stir outrage.

These days however, it takes this profit coming on the heels of a series of government bailouts of Goldman Sachs, as well as a series of unseemly regulatory changes favouring Goldman Sachs, combined with the fact that seemingly all of the important political players who created the bailouts for Goldman Sachs and changed the regulatory rules to suit them are themselves former Goldman Sachs employees, finally combined further with the products that Goldman sells being a prime cause of the current economic crisis all put together with sky high profits and bonusses, to generate some outrage, some lack of calm from the passengers on the economic ship.

So on the Goldman front, we have a long article from Matt Taibbi in Rolling Stone, which starts by referring to Goldman Sachs (known as 'Government Sachs due to the fact that everyone important in financial matters in the U.S. government used to work for them) as "is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

Then a youtube clip from a French network business TV show with Max Keiser repeatedly referring to Goldman Sachs as 'scum' who should be 'in the Hague'.

Even Paul Krugman gets shrill enough to say that,
"The American economy remains in dire straits, with one worker in six unemployed or underemployed. Yet Goldman Sachs just reported record quarterly profits — and it’s preparing to hand out huge bonuses, comparable to what it was paying before the crisis. What does this contrast tell us?

First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America.

Second, it shows that Wall Street’s bad habits — above all, the system of compensation that helped cause the financial crisis — have not gone away."

The Krugman comments were the final straw that sent The Economist to the fainting couch. In a column entitled, 'Goldman Madness Spreads' they admonish us as follows,

"Paul Krugman writes today that:

...what [Goldman Sachs] does is bad for America.

What it does is bad for America. Not "some of what it does is bad for America". Not "the legal, profit-seeking behaviour of large investment banks may have some negative externalities that should be addressed by government regulators, in the following ways".

This is no way to have a policy discussion."

Let me repeat part of the quote from John Ralston Saul that I started with, "the person in power or with privileged information or expertise will make them feel they are not calm enough to deal with the situation rationally."

Which, at length, brings to this post by Mike at Rortybomb which triggerred my post. Says Mike,

"Is there room for outrage? I always find this frustrating in economic technocratic talk, where outrage/disgust/shaming is dampened by having to focus in terms of 'bad incentives.' There’s a schizophrenia in the way we talk about this, that capitalism on one hand is a benevolent invisible hand guiding us all together, and also amoral tiger who of course was going to rip your throat out if you don’t lock its cage properly.

Getting a little hyperbolic, it’s like someone has broken into our house and is looting everything in sight. How do we 'set up his incentives' so that he leaves without the treasury in tow? Setting up the terms for discourse in economic rationality speak is only going to allow us to answer the question of 'why didn’t we lock the door?' Good question, of course. But we have problems right now that rightfully deserve shock and anger."

In case it's not obvious, I agree. I often find myself resigned when thinking about the dominance of our politics and economics by a wealth-serving ideology that hides under a cover of technocratic 'rationality', but the appropriate, and more effective response is often anger, not resignation.

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  • But, but, if you read Margaret Wente, it is the unionized city workers' fault. They get benefits and the unemployed and private sector get none. Surely, that is a bigger outrage than whether Wall Street bankers are operating outside of everyone else's reality? Isn't it better to blame someone who is close enough to you that they are real, than to direct your anger at someone who makes more in 3 months than you do in ten years? The ten year people are abstractions. They are theoretical. You will never see them. But, you will see the garbage man and you can call him a bum. That is much more satisfying. And it has the added bonus of acting as a safety valve. If we stop calling garbage men bums, we might start to go look at where those abstract people live (if we can get into their gated communities).

    By Blogger Greg, at 6:58 AM  

  • Oh, and because of the Toronto civic workers strike we are all going to die.

    But, stay calm everybody. Don't you love the corporate press?

    By Blogger Greg, at 7:14 AM  

  • "if you read Margaret Wente"

    But I don't - problem solved!

    But yeah, the more abstract the media can keep the folks like Goldman Sachs, the better (for Goldman). Like Hume said, our moral sense functions like perspective, thinks that are at a distance (i.e. abstract) look smaller than they really are.

    By Blogger Declan, at 10:21 AM  

  • "But yeah, the more abstract the media can keep the folks like Goldman Sachs, the better (for Goldman). Like Hume said, our moral sense functions like perspective, thinks that are at a distance (i.e. abstract) look smaller than they really are."

    Which is why I find Matt Taibbi's writing so powerful - he makes the abstractions real through powerful metaphors, physical descriptions of the key villians, not to mention his sound research. Just fantastic.

    Your post also reminded me about Tom Tomorrow's comic strip which occasionally stars 'The Invisible Hand of the Free Market'.

    By Blogger Simon, at 1:27 AM  

  • Agreed - Taibbi does a good job cutting through the abstraction of things to the right and wrong of it.

    And yes, I also like the visible, invisible, hand from Tom Tomorrow - always funny, rarely Learned...

    By Blogger Declan, at 11:49 PM  

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