Thinking over yesterday’s reasoned argument ranty screed about America’s masculine sensibilities and our notions of the heroic, I was reminded of an excellent Foreign Policy article by Riehan Salam about the very particular place men play in this recession, both as its cause and its victims.  He makes an interesting argument, though I hesitate to draw quite the conclusions as he does… Big historical events are always more complex than the quantities of testosterone could reveal.  And yet:

For several years now it has been an established fact that, as behavioral finance economists Brad Barber and Terrance Odean memorably demonstrated in 2001, of all the factors that might correlate with overconfident investment in financial markets—age, marital status, and the like—the most obvious culprit was having a Y chromosome. And now it turns out that not only did the macho men of the heavily male-dominated global finance sector create the conditions for global economic collapse, but they were aided and abetted by their mostly male counterparts in government whose policies, whether consciously or not, acted to artificially prop up macho.

Its worth your time to read the whole thing, if you haven’t already.  It was pointed out in the comments section to yesterday’s post that there’s a world of difference between stock brokers and pilots, which I think goes without saying.   Excepting Glenn Beck-inspired lynch mobs, the level of danger in securities trading is quite low.  Yet to hear it told, many in the financial world were under the belief that their work should have carried a comparable level of cachet… Or, at a bare minimum, that the levels of ballsiness required to do investment banking elevated it above the tedium that that profession is legendary for. Think about Paulson, or Cassano, or Cohen, or any of the iconic figures to emerge from the financial crisis: the thing that is striking about all of them is (a) just how heroic/cutthroat/testosterific they saw their work and (b) how their taste for “innovative” financial products amplified that self-image well beyond its proper constraints.  While the traits singled out in (a) are going to be operative at the top of any field as a matter of necessity, they rarely acquire the heroic undertones they did in the run-up to the collapse, and its that bubble-born mentality Domenach is praising that, at least so far as it relates to business, should probably be confined to the ash-heap. (And, if Salam is right, already has been.)


Plastic Rot

July 1, 2009

When Greece declined, their buildings went from being painted garish colors to the more natural stone-tones we recognize, setting the stage for DC’s immaculate (but from a Greek perspective, unfinished) federal style.  And when our civilization ages more than a few decades?

The casualty list is appalling: Antique plastic dolls at the National Museum of Denmark have begun to peel and flake; classic furniture at the Victoria & Albert Museum in London might as well have been left out in the sun for years; the first-ever plastic toothbrush, at the Smithsonian, is collapsing into a pile of crumbs; etc. A whole generation of irreplaceable items that are as representative of our culture as pottery or flintheads were of ancient ones are dying—and many people charged with their care have no idea how to stop further damage.

Read the whole thing.

Die-hard cyclists in the readership may be pleased to finally have functional bike-route maps online.  (I know I am.)

Inspired by the recent slash-and-burn of Hayek up over at Post Right, I decided to go look up the cartoon version of the Road to Serfdom, and was tickled by panel 16. Apparently the coming dictatorship is a fan of Tom Friedman:


Article on Slate today about McDonald’s conquest of the French market… Very interesting case of corporate co-option of local customs without actually changing the substance of the product:

What especially cheesed off Daguin and other chefs was that McDonald’s was being taxed as a carryout establishment even though the overwhelming majority of its customers actually chose to dine chez McDo. French diners tended to treat McDonald’s as if it were no different than the bistro around the corner: They came, they ate, and they lingered. As Gravier artfully put it, “The French population uses McDonald’s in a very French way; it is fast food, but not that fast.” The data the company collected bore this out. Americans visited McDonald’s more often than the French, at all hours of the day, frequently alone, and opted for takeout 70 percent of the time. The French spent more money per visit, came in groups more often than Americans, and did 70 percent of their eating during regular lunch and dinner hours. “We have a food culture in France; eating is not a feeding moment, it is a social moment,” Gravier said.

Though I’ve often found myself intrigued by Scott Payne’s many posts on the subject of glocalism, part of me wonders if McDo won’t wind up being the end outcome of a globalization-friendly, “unity-without-violence-to-particulars” agenda, unity here being represented by global brands aggressively adapting themselves to local cultures with very little modification to their actual products.  Certainly there are echoes here of the daily, face-to-face contact advocated by the localists, even semi-local (okay, just domestic) ingredients, but it seems that the absence of genuine difference at the level of food should be troubling… It may be localized monoculture, but its still monoculture, with many of the attendant problems that come with that.

Jeremy Beer over at Front Porch Republic has decided to tackle brain drain, and concludes the source is meritocracy:

 Meritocracy, in the definition I am using here, is an ideology that maintains that one’s place in society should be determined solely by one’s “merit” — by which is meant the tangible evidence of one’s talents, capabilities, intelligence, and, of course, will. This is an essential feature of any just society, meritocrats claim…

…Meritocracy is a project that is supported and advanced in numerous ways by powerful institutions and by deeply embedded practices and beliefs in contemporary American culture. Compulsory schooling, for instance, is justified by the meritocratic ideal. The right of individuals to maximize their talents and thus the consequent social rewards is held to be more important than the right of families and/or communities to decide how they wish to raise and educate their children. Were it not for the deeply anti-meritocratic Amish, even the most benign homeschooling would probably today be illegal across the land.

This, argues Beer, paired with a pile of federal and state level initiatives, has seriously compromised the integrity of Middle America. And he concludes we ought to take steps to reverse that trend.

As much as I agree that meritocratic economic pressures drain the lifeblood of small towns, and that there is much to be said for trying to halt it via economic means, the blame does not rest solely on the national class’s policies or economic liberalism. These kind of sustained social movements always have a reciprocal element to them; that’s a big part of why they last as trends and can create a culture war given long enough.

This is especially true of small-town America. There are many reasons why people leave small towns, some economic, some personal, but the key element here that is that the parochial culture of Middle America has in recent years mutated into a form openly hostile to brain retention. Speaking as someone who has lived in a small town in the past and would like to in the future, the tremendous hostility to learning and the learned in small town America can be suffocating, and to many who would otherwise stay (read: me) this proves to be the deal breaker.   Though cities are huge and anonymous, there is little outright distaste for intellectual life, and there is much less support for the fringe Right politics made possible by the palatable absence of educated opinion. 

None of this is really in contradiction with Beer’s thinking, but it should highlight that this is a reciprocal process, and solutions must proceed from that understanding. If the educated culture of small towns is to be salvaged, small towns will have to give up their bias against education at the same time policies are changed to their benefit. Neither approach can succeed alone, and in all honesty I’m doubtful that there’s much hope for the localism of the small town at this point. (Cities and neighborhoods, another story.) But if there’s to be success, just as in cities, culture, policy, and economics must work in tandem.

Edit: Some further thoughts on how this hooks up with mainline decline, here.

David Brooks sees a problem in the GOP’s obsession with cowboys. Namely, that cowboys need towns to have a story, and the GOP doesn’t really have any concrete policy points for the town (and city!) crowd:

If the Republicans are going to rebound, they will have to re-establish themselves as the party of civic order. First, they will have to stylistically decontaminate their brand. That means they will have to find a leader who is calm, prudent, reassuring and reasonable.

Then they will have to explain that there are two theories of civic order. There is the liberal theory, in which teams of experts draw up plans to engineer order wherever problems arise. And there is the more conservative vision in which government sets certain rules, but mostly empowers the complex web of institutions in which the market is embedded.

Both of these visions are now contained within the Democratic Party. The Republicans know they need to change but seem almost imprisoned by old themes that no longer resonate. The answer is to be found in devotion to community and order, and in the bonds that built the nation.

To me, the operative question, as Brooks mentions, is that the Right does not understand the communities of cities in the way it intuitively understands the communities of small towns, and thus is lost when it comes to civic virtue.  The city through their lens is contradictory and largely negative: its a place for the thriving of free-enterprise, a place riven with contradictions arising largely from government failures to encourage the markets, a place incapable of becoming the Real America because it is so dominated by cowboys and bureaucrats and so lacking in real people,  a place where ethnicity plays a constant role and where communities are innately in flux.  What they fail to see, by and large, is that cities have much more diffuse but equally present communities which can be quite strong, which often can be augmented by good policy decisions, and which can be a foundation for the stability the country needs.

Now all of this wasn’t a problem for the GOP so long as their electorate was distributed between small towns and suburbs in the West and Midwest, huge swaths of the South, and enough of the coasts’ urban areas. But as the country becomes more urban, more racially diverse, and more divided by class contradictions, the GOP will have to come up with some way to speak to precisely the groups Brooks lists, the young, the middle class, and the upper middle-class, all of whom are increasingly concentrating in urban areas. As much as the branding problem Brooks points to is about personality, it is also about location: Obama is fully comfortable in the urban milieu, and can speak the language of that milieu far better than any major Republican figure, especially the likes of Sarah Palin or even John McCain.

And I think that may be the ultimate test for the Republican part in the coming years: whether or not it can get past the language of the cowboy, and even the townsfolk, and learn to speak in the language of the neighborhood.

Strange these days when everyone seems to have the same thing on their minds.  Seconds after publishing my post on the intersection of GDP and usury laws, I notice that Nancy Folbre at the Times has a new post up about unpaid work, one of the other big dilemmas posed by using the GDP as an indicator of our economic well-being:

We sometimes think of work as “that which we are paid to do” but some economists argue that work is anything that you could, in principle, pay someone else to do for you.

Applying this definition to results from the most recent American Time Use Survey shows that in 2007 the average amount of unpaid work time (housework, shopping, food preparation, care for others, and related travel time) per adult per day equaled the average devoted to paid employment — 3.8 hours per day. These averages reflect activities on weekends as well as weekdays, and stay-at-home moms and retirees boost the tally for unpaid work.

Average time devoted to home production in the United States is lower than in many other countries partly because female participation in paid employment is particularly high here. As a result, estimates of gross domestic product, based on market transactions, overstate our relative well-being. Research by economists Rick Freeman and Ronald Schettkatt, for instance, shows that the value of mothers’ unpaid work in Germany is even greater than it is here. Adding an estimate of the market value of this work to G.D.P. in both countries would increase measures of German living standards more than ours.

And that really is only the start of it. There are also enormous externalities to the home economy that aren’t captured by the price of having someone cleaning house for you, impacts which reshape the way we eat (fast food over home-made), the way communities function (bedroom communities over real neighborhoods), how safe we feel as a whole (gated communities over informal security nets), and so on. Yet these are ALSO left out of GDP, and indeed out of the pricing mechanism itself.  Clearly this is a problem, and anyone who takes family and community  seriously should take a long hard look at how we’ve literally cut them out of the equation.

John Medaille has a great new post up over at Front Porch Republic about the consequences of indebtedness becoming enshrined in law.  In particular, he points to the SCOTUS decision Marquette National Bank v. First of Omaha Service Corp., passed in 1978, that effectively ended usury laws in the U.S., setting the stage for the negative savings rates, the Financial Crisis, and the growth of a business culture built on nothing but loans:

One question, however, is why we were willing to oblige the bankers by displaying such poor moral character. No doubt the convenience of the credit card was a factor, but there is more to it than that. One reason is that we had to. The shift in the economy from manufacturing to finance meant that workers were no longer able to bargain for wages through unions and other means. Since 1972, the median hourly wage has stagnated. We experienced a very odd phenomenon: productivity exploded, but wages remained the same. Obviously, there was not enough purchasing power to clear the markets. Workers responded in two ways. One was to work more hours and put more family members to work, with a devastating effect on family life. The other was to borrow more. Our sense of well-being in the Sixth Circle was largely built on plastic.

Further, the best and brightest of our students no longer went into engineering or manufacturing, but into finance. We started to lose even the knowledge of how to make things. As Thomas Geoghegen points out, not only did financial companies account for 40% of corporate profits in 2003 (up from 18% in 1988), but this may understate the problem. Many “manufacturing” firms, like GM and GE, actually made their profits from their finance divisions. GM became a company that manufactured cars in order to make loans on them.

To my mind, these problems have to be nestled in the deeper question of how we think about economic growth as growth of GDP. The reason that any of these business models wind up looking plausible is precisely because they seem to increase the size of that single number, though anyone looking at the particulars would recognize that there was in fact little more than paper being pushed around. This is an ideology that has had a long history going back to the birth of econometrics, and it has myriad consequences that I want to write about in future posts, but this may be the biggest one: if we make the measure of paper pushing the measure of the economy, then we will get  an economy of paper pushers, plain and simple. It may take time, but eventually that number will trump all questions of regulation and prudence.

I recognize this has basically all been said before in many places since the inception of this mode of thinking. Yet its one that has been little heard on the Right, particularly of late. This should be precisely the kind of language that conservatives ought to challenge, the simplistic, the universal, the risky, and ultimately hubristic thinking that throws culture, virtue, place, heritage, and meaning to the wind in pursuit of a set of digits.  Is there any better personification of enlightenment excess?  Conservatives willingness to defend this language maybe (maybe) made sense when government waste was the central question. Now, I’m frankly puzzled by it. What we have here is a problem in the private sector, and there are many many conservative things that could be said about it, most of all about the language we use to assess it and the values it promotes. Yet this is the last thing the mainstream right wants to think about: their conservatism has become a rote endorsement for corporate power, rather than a force for limits and humility in both private and public sectors.