Nationalize the Banks, the Yanks

Who's paying for this?

Once this one was paid for, they used it for a thousand years.

*****

Blogs should be dashed off the top of the head, quick enough that you might regret it, but this one has been slow developing. I started thinking about this on Super Sunday—basically a national holiday—and now it’s New York Fashion Week and I’m sitting in the front row reading ESPN magazine just to confuse people, and I’m sort of missing football already. I am still boycotting the Knicks, and this A-Rod stuff has put me off counting the days until pitchers and catchers.

It was a great Super Bowl this year; for once the game was up to the spectacle of the occasion. Super Sunday is the day we celebrate America’s most essential sport, the violent one, the most feudal one, the one based on the acquisition of enemy real estate. It’s also the day where we deliberately celebrate advertising by watching the commercials as entertainment. We actually do this all year, but on Super Sunday everyone watches and discusses the ads. It’s almost as competitive as the game.

I was on the spot this year. All my in-laws are crazy Steelers fans and my kid will was wearing his Steelers jersey with "43" on the back, for Troy Polamalu. I liked the underdog Arizona Cardinals but I had to be on the down-low about it. Anyway, I have issues with the whole idea of team allegiance. Maybe it’s because I’m a Jets fan. It’s not easy being a Jets fan and suffering from the curse. Now they say that Joe Namath made a pact with the devil, and that’s why we haven’t been in a Super Bowl since 1969.

The team concept is a crucial part of the American way. Hell, it was a crucial part of the Roman way. Back in the days of the Circus Maximus the populus was divided among four factions: the Reds, the Greens, the Blues, and the Whites. I sometimes wonder if my irrational attachment to the New York Jets stems from some past life in the Julio-Claudian era when I supported the Greens over the Blues. (I mean, wouldn’t any rational New York fan support the Giants?)

Plebs just want to have fun.

Our choices in sports teams, at least for those of us who don’t live in one-team towns, are often irrational. Some think of the Giants and the Yankees as Manhattan’s teams, and the Jets and the Mets as the teams of the bridge-and-tunnel people. And yet here I am, that strange species that supports the Yankees, despite a near-life-long hatred of George Steinbrenner, and the Jets, despite a near lifetime of disappointment. What a strange emotional system rules the male heart. Team allegiance is not something to be understood by logic alone—it’s like religion or patriotism. It doesn’t come from the brain; it comes from the testicles.

I think most fans still root for the team nearest them, which gives the whole league system a sort of feudal aura, but I think we are moving toward a different system. With cable TV offering fans access to every game everywhere we are entering a world where you might pick a team based on character, colors, the players' personalities, maybe even the mascot. And today there are quite a few teams who have fans all over the country they play in, and all over the world. Think of soccer teams like England’s Arsenal or Italy’s Juventus (which is supported by almost one-third of all Italian fans), or Brazil's national team.

The Dallas Cowboys of the NFL used to style themselves “America’s team.” At least until many of the Cowboys were involved in scandals, some involving cocaine, and were jokingly referred to as “South America’s team.” Probably the first national team was the New York Yankees—who have been popular nationally, selling out stadiums across the country for decades.

The Yankees, of course, playing in the house that replaced the house that Ruth built, have a storied history that appeals to any baseball fan. Murderer’s Row—the 1927 Yanks lineup featuring Koenig, Babe Ruth, Lou Gehrig, Bob Meusel, Tony Lazzari, Joe Dugan, and John Grabowski—produced 110 victories in a 154-game season, stayed in first place all year, and then swept the World Series. Then when I was a Cleveland Indians fan we would fill Cleveland Stadium to it’s 75,000 capacity to see the Yankees visit with the M & M boys, Mantle and Maris, plus Yogi Berra, Whitey Ford, Tony Kubek, and Elston Howard. Back in the day the Yankees were one of three New York baseball teams, but they were in a way America’s team. When rioting third world people screamed “Yankee go home!” it might have been United Fruit they were complaining about, or the CIA, but the image brought to mind was pinstripes. And today one finds Yankee fans around the country; there’s a natural consistency among the upwardly mobile, the tycoon wannabes, the winners, and the sociopaths. And then there is the Oakland Raiders, a team whose constituency is built on an idea—the pirate or marauder as philosophy, the eyepatch and the statement “Commitment to Excellence,” and the color black, which makes the team the brand of choice among non-Crip non-Blood gangbangers. And the fact that owner Al Davis is an outlaw who has fought with the league, and the team traditionally picked up outcast headcase players who had failed elsewhere and made them into winners. I have quite a few friends who are Raiders fans who have never lived in Oakland (some have never even been there), just based on their image.

The Roman racing factions were enormously popular, to the extent that they became politicized. The emperor was generally a partisan of the Blues or the Greens, and while the factions resembled today’s sports franchises, they eventually developed into almost paramilitary gangs or cults with political and even religious overtones. In 532 A.D. the Blues and the Greens united in an attempted coup against the emperor Justinian. Today that sounds silly, but give us another hundred years. Sport is changing. Local factions are becoming nationalized, as new TV technology allows us to watch any game anywhere.

Think of the Roman racing factions as Crips and Bloods on wheels.

In sports today it is extremely difficult for smaller cities to compete with larger cities. New York Yankee Alex Rodriguez earns more in a year than the entire roster of the Florida Marlins. One exceptional franchise is the Green Bay Packers, a National Football League team that is owned by its fans, with over 100,000 stockholders. The Packers have won three Super Bowls, and they are a small town that competes with cities of many millions, but they are run on a capitalist model. But how can they ever hope to compete with the socialist-capitalist teams of the megalopolises?

The New York Yankees just got financing from New York City in the form of $370.9 million in mostly tax-exempt bonds so they can finish up the new Yankee Stadium. The new debt is added on to the $968 million the city approved in 2006. Obviously the team needs the taxpayers help. The Yankees pay over $110 million a year in “luxury tax” and revenue sharing. And since last season ended, the team awarded contracts totaling $423.5 million for first baseman Mark Teixeira and pitchers C.C. Sabithia and A.J. Burnett. And you can’t pay for players like just by selling tickets. A box seat behind home plate will run you $2,500. No, that’s not for the season, that’s per game. That would be $202,500 on the year. But still there’s a national-government-sized shortfall.

They tell us that the new stadium will be good for the city and for local business, but part of the new Yankee Stadium project is the $91 million train station that has been awarded to a Chinese construction firm. Meanwhile the city is laying off teachers and cops. There’s something wrong here. P.Diddy is flying commercial but big-time sports is acting like Wall Street is still booming and the sky is no limit.

The New York Jets (who suck, by the way) have an interesting approach to their season tickets, charging fans who would continue buying them, like my friend who inherited his four tickets from his father (one of the team’s original season ticket holders), charging them $25,000 per seat just for the right to continue buying what they’ve always bought for $700 a game. (I’ll do the math. That’s $100,000 plus $28,000 including the exhibition games.) Which leaves him wondering, should I take the boys to the games this year or should I put them through college?

Now my kid likes the Yankees, and he’s young enough that I don’t think I should tell him the facts of life. Like the guy batting cleanup, whom the manager called A-Fraud, who makes $28,000,000 a year, and who took steroids during his Most Valuable Player Year. He’s eight. He doesn’t need to know what steroids are yet. I’m still trying to explain why he shouldn’t eat the Hershey’s chocolates sweetened with Maltitol that the babysitter gave him. I don’t think I can explain Alex Rodriguez to him, and why his presence on the Yanks sours my enthusiasm for the team, a team I was somehow able to stomach during the reign of George Steinbrenner, the beard-hating egomaniac convicted of felony obstruction of justice and 14 counts of illegal campaign contributions to Richard Nixon.

I think I’ll root for the Pirates this season. Their payroll is less than 20% that of the Yankees. The odds for them to win the World Series are 200 to 1. I liked those old-school hats they used to wear and the way they used to have Sister Sledge’s “We Are Family” as the team song. Or maybe I’ll root for the Oakland A’s because they signed my man Jason Giambi, who had the class to apologize for his steroid use, and I think still has some good years ahead. Or maybe I’ll root for the Dodgers because they’re managed by Joe Torre who did right by the Yanks (and by whom the Yanks did wrong.) But it won’t be the New York Yankees I root for. They’re not even New York’s team. (That’s the Mets, for sure.) They’re Wall Street’s team. Maybe the Neo-Con team. Posada, Jeter, Rivera, and Matsui are still my guys, but maybe I’ll root for the Indians in memory of my childhood favorite and my favorite Indian, Saturnino Orestes Armas Minoso, better known as Minnie. He was the first black man to play for the White Sox, and he was my idol. I met him and Vic Power at Cleveland Airport on August 12, 1958, when I was a little kid. I loved first baseman Vic, too. He was the first Puerto Rican to play in the bigs. I’m sure it was that date because on that day Vic Power stole home twice, the last major leaguer to do so. And he and Minnie still had time to talk to a kid.

Ah, baseball. How I loved it. Maybe I will again, some day. But these are tough times. Sports need to change like everything else. The economy is still rough, even if the big leagues don’t realize it. Pandemic white-collar crime and misconduct sank the banks. The leagues are probably next. I urge President Obama to just nationalize those banks, and while he’s at it, why not nationalize the Yanks, and any other sports team that taxpayers have been paying for without representation.

Teams are a matter of taste.

Life is a matter of taste.

Some of us want taste and credibility.

Recession and White-Collar Crime

As we embark on a new administration in Washington, I think that we should also look back—back to the beginnings of Democracy. Transitioning from a presidency that aspired to imperial powers, and that transgressed constitutional limits, it is perhaps instructive to study how the first Democrats dealt with the opponents of Democracy.

As I reflect on the turbulence of those early days when freedom for the masses arose, I keep fixing on a single symbolic image. The guillotine.

This dramatic device, which neatly separated heads from bodies, was adopted by the French National Assembly at the suggestion of one of its members, Joseph-Ignace Guillotin, who believed that the legitimate purpose of execution was the ending of a life, not torturing the designated decedent. Under the king aristocrats had been executed by the axe, while common folk were subject to long, cruel procedures—being hanged, broken on the wheel, or burned at the stake.

Obviously we do not wish to return to such barbarous practices, but when dealing with the systematic abuse of one class by another, it might be worth considering the elimination of a determined, deeply entrenched conspiracy of criminals. We haven’t had such an action since the Nuremburg Trials, in which the Nazis were tried for crimes against humanity and many went to the gallows; but now, confronted with an illegal government which may prove to have resulted from a bureaucratic coup d’etat, a cabal which systematically ignored and perverted the most basic tenets of our system and which used the machinery of government to favor and enrich a certain class at the expense of all others, perhaps it is an opportune time to reintroduce capital punishment for crimes of capital.

How does one prevent a recurrence of the events which lead to the economic collapse of our country, an event which threatens global economic collapse and misery for billions? One must create an indelible impression that such behavior will not be tolerated. And how better to do this than to reintroduce the guillotine as a reminder that one class must never exploit another? Imagine the “Irish Maiden” set up on the steps of the Federal Reserve Bank down on Wall Street as the worst offenders in the recent history of white-collar crime are dealt with. Would Mr. Madoff’s head on a pike serve as a warning to investment bankers that we do not take Ponzi schemes lightly?

We live in a society where ghetto residents, unable to find legitimate work, are routinely handed jail sentences of decades for selling people drugs that they want. Meanwhile, executives whose crimes have repercussions for millions of people are routinely fined in amounts that are miniscule compared to the sums they have stolen or caused to vanish. I don’t think that we need to go as far as the French did in the late eighteenth century. After all, we have television, which will efficiently amplify the educational effect of such removals of criminal financiers and politicians. The Reign of Terror, which saw the execution of many thousands in France between 1793 and 1794, would hardly be necessary today. A few neo-Cons and a few top Wall Street criminals going under the blade would probably serve as adequate warning that we will never again tolerate this sort of looting on a mass scale.

Two or three guillotines would probably be enough. Perhaps one on Wall Street, one on the Mall in the District of Columbia, and another at Mount Rushmore would be enough. I quite like this guillotine bearing the Chanel logo designed by my friend, the artist Tom Sachs. Not only could we sell the advertising rights to a luxury company, but it would serve as a reminder to the greedy and unscrupulous that the path to luxury is fraught with peril if one wanders off the righteous path, and infringes on the paths of others—and that society has the right and power to curtail and correct such a course.

A House of Credit Cards

Style is supposed to entail mastery of the superficial, so please indulge your style correspondent in a little treatise that glides across the surface of the economic woes dominating the headlines.

I know there are very complicated explanations for what's going on in the financial world, new ones every day, and theorists are cranking out marvelously impressive, elaborate theories about where things went wrong, but let me offer a very simple consideration.

Credo means “I believe.” It’s the beginning of one of the nicest prayers in the Roman Catholic high mass. “Credo in unum deum…” I can still hear a priest with a good voice singing it, that plaintive, mellifluous chant echoing through a cavernous apse, inspiring belief in something higher. If not God, well, at least melody and good acoustics.

Credit, I believe (I know, in fact), derives from that very same word, and the selfsame idea. Credit comes from creditum, meaning something entrusted. And credit has always been based on belief and trust—lending based on faith that the borrower will pay it back. “I’m good for it.”

Today credit is more prevalent than ever. More people owe more money than ever in history, and that requires greater and greater faith. When credit breaks all records we might even say it has required vast leaps of faith. In ancient times credit was almost always local, or at least extended between parties that knew each other. Even a few decades ago mortgages were more often than not extended by bankers who knew their clients.

Under George W. Bush the national debt, which we might optimistically think of as how much the world believes in us, rose to $10 trillion on September 30th, 2008. This figure made the national debt clock at Times Square, which has been there since 1989, suddenly obsolete. Its designer apparently didn’t believe that we’d ever need fourteen digits to record what we owe. We owe so much that our debt has become positively existential, requiring Kierkegaardian leaps of faith to justify.

Of course, when it comes to belief in the impossible, it is clear that our time takes the cake. We have extended belief to deadbeats and hustlers. We have sworn our beliefs in documents that pledge to buy things that don’t exist with money that is purely imaginary. We have bought the biggest bills of goods in human history and we signed up to pay for them on the installment plan. Nobody was ever extended as much credit as this generation. We are alchemists. We have transformed plastic into gold, into platinum…. and we have sent our bills into the future. Can man travel into the future? Maybe not, but he can, apparently, indebt his potential progeny.

And yet, on the face of it, we seem to have arrived at a point where all that faith suddenly is evaporating like water in a forgotten saucepan left over a flame. Suddenly belief seems to have been snuffed out. We have no faith in the market, no faith in the war, no faith in our industries and institutions. Obviously we have no faith in the present administration. We have little faith in the banks and they have even less in us. We now believe in the markets a little more than we believe in St. Christopher or the Easter Bunny. And even the most sacred repositories of belief, the churches, are increasingly deserted, while the taboo against atheism has practically disappeared, with HBO star Bill Maher referring to God as an “imaginary friend” and the popularity of books like Richard Dawkins’s The God Delusion, and Christopher Hitchens’s God Is Not Great: How Religion Poisons Everything.

But our currency, since we departed from the gold standard, is based entirely on faith in the United States government. When you think about it, since we abandoned bullion and specie as the basis of our currency, money began to fall into the realm of fiction. Or perhaps sacred text is a more acceptable comparison. But the modern dollar, compared to the old gold and silver certificate, definitely requires a willing suspension of disbelief. To value it is to indulge in the most basic act of patriotism. The dollar is the real pledge of allegiance.

In fact all financial instruments are what you might call “faith-based.” Economists will tell you that the current financial crisis has been caused by deregulation and the consequent market in exotic financial instruments that fall outside government scrutiny. Some have placed the blame on short sellers and tried to make that standard practice illegal. But this is not a new situation. It is only a general loss of faith in institutions that has brought about this contagious collapse. And I suggest that it is almost entirely a lack of faith in government, caused by nothing more exotic than a pervasive atmosphere of amorality in government, that has caused the big bubble to burst.

Sure, they lent money to people unlikely to pay it back. But if you can believe that Saddam Hussein had something to do with 9/11, you can believe anything. And those who make their money in the markets were the victims of a contagious belief that things would just keep going at that hogwild pace. The sky was no limit.

When Americans think of morals they think of the morals squad. They think of sexual mores primarily—promiscuity, infidelity, perversions. But morality, for millennia, has entailed far more than regulating the nasty. In many societies, including those regarded as high civilizations, sexual morality comes low on the list of rights and wrongs. Dante put the lustful in only the second of his nine hells, where they were buffeted about by winds. The greedy were much lower, down in the fourth hell where they were crushed by material things. Usurers, among whom most of today’s bankers and financiers would find themselves, were consigned to the deepest part of the seventh hell. The eighth circle of hell, Malebolge (or “evil pockets”), was filled with politicians, businessmen, and those who would today be financiers and marketing executives. It was the place of eternal torment for those guilty of fraud: flattery, selling offices, influence peddling, ambulance chasing, deceptive advice, and perjury. Beyond that there was only ninth circle, the traitors and betrayers.

Once, anyone with a grasp of culture understood that morality was a code of conduct that governed every aspect of life, and that the ultimate perpetrators of evil were the great deceivers—the sort who would misrepresent financial deals on a broad scale, perjure themselves, or foment a war on false pretenses. Today the most fundamental concepts of our financial system are largely unquestioned by the general public, and even by the vast portion of the participants in it; and even for those who do question the workings of the system, it is generally assumed that while there may be questions of efficacy regarding the mechanics of money, credit, and finance, there are no moral issues involved.

We have come a long way since charging interest was condemned by Christians and Muslims alike, regarded as usury, or paying for a thing twice, or even later views when usury was considered an excessive interest, out of sync with the expectations of natural growth.

But in our mass media world the knowledge of the individual citizen is tiny compared to what it was a century or two ago. In the eighteenth century a well-educated man could possess a large portion of the knowledge available in his time, but in the age of mass media the ideal of the well-rounded man has practically vanished. We live in a hive society of specialists: professional specialists, financial specialists. And so the general philosophical worldview that a civilized individual once possessed has been replaced by a kind of institutionalized philosophical framework. We don’t have to think about morals and laws. That’s all set up! We have servants to do that for us. And so we devote our waking hours to conspiring to acquire the trappings of conspicuous consumption and climb various ladders, from corporate to social. Meanwhile we have abandoned the detailed moral and philosophical codes that were once standard equipment, and shrunk them down to a few stupid hot-button issues revolving around sex. Morality has far more to do with how we raise money, write contracts, or look after res publica, public affairs. And reason is something that most Americans don’t even think about. This is the feel-good era. We employ reason, of course, when it’s time to shop for a car or play Texas hold ‘em, but even our daily occupations require less reason and more-than-rote rhetoric. Today if business is bad, if Detroit is going to hell, if gays are trying to live normal lives, why think about it, maybe Jesus is coming. Reason is considered too tough for some jobs.

We are in post-literate times. Hardly anyone questions our financial system or understands it in a historical context. Today, how many people know what Thomas Aquinas thought about interest payments (or Jesus or Mohammed)? And although the spirit of America’s founding fathers is invoked again and again in a political context, and although their intentions are continually considered and second-guessed by the Supreme Court, there is almost no understanding of what Thomas Jefferson thought about money, or John Adams, or Alexander Hamilton. Their principles were radically different from those that are observed today. In fact, contemporary economics would cause the founders to recoil in horror and disbelief before counseling another revolution. But this is sheltered by the utter disinterest in economics that prevails in our society. Most people have absolutely no idea how the Fed works, or the stock market, or hedge funds, or the institutions that hold their mortgages. Most people consider these subjects obscure and dry and boring, and yet these forces have enormous sway over their fate. Apparently God is easier to get one’s head around.

The poet and philosopher Ezra Pound, who devoted much of his career to the study of economics, wrote: “The criminal classes have no intellectual interests. In proportion as people are without intellectual interests they approach the criminal classes and the criminal psychology. People with no sense of responsibility fall under despotism, and they deserve all the possible castigations and afflictions that the worst forms of despotism provide.”

I believe that we have seen the rise of an entire class where white-collar crime is not only endemic, it is compulsory. Most of those who have done wrong are guilty of little more than going with the flow without reasoning. No one is going to feel guilty or even question what’s going on if absolutely everyone’s doing it. And over the last few decades even the rare philosophically inclined businessman put his faith in the profane religion of the purity of the market. That’s how everything got deregulated. There was a powerful credo behind it—the free market corrects everything—a sort of equation of economics with physics and Newton’s laws.

What they all forgot, of course, were the basic arguments of economics, including the obvious distinctions between apples and oranges, property and capital, present and future. These were not free markets but fictional markets based on erroneous assumptions. What they never considered was the horror with which the founding fathers, the scholastic philosophers, and even their own grandfathers would have beheld the preposterously abstract financial instruments that were trading in the theoretically all-knowing market—to the extent that trade became rampant in quantities that were deliverable only in a dream world. And the notion of consistently living on the margin and depending on leverage in the natural world is as fantastic as anything Hollywood has ever produced.

Meanwhile the public lost interest in what was actually happening to it. Detail is boring. Economics is boring. They allowed their representatives to gamble their wealth, both real and imagined. It’s hard to understand, especially if you don’t try. So cynicism prevails and the public loses itself in vanity and trivia. But it’s starting to look like you can’t believe in nothing and still have credit. I’m afraid that if we’re going to rescue a system based on credit, we’re going to have to find principles we can realistically believe in, and that means that from now on the people are going to have to pay attention. A good place to start would be the constitution and the fact that it says that “Congress shall have power: To coin money, regulate the value thereof…”

As it becomes increasingly clear that we have taken refuge in a fortress of cards, we are almost desperate for a wild card or a joker, an augury of recovery or a harbinger of hope. I don’t think we’ve seen the worst, though, because somehow I think we aren’t even close to that moment of recognition where we will realize where we’ve been taken. We need a mass realization of the principles of work. This is voodoo economics. The economics of the last half-century have been one long magic show, because the markets are moved by belief and manipulating belief is something that has been mastered by our masters. But even belief has its limitations and as it turns out, the stock market is Tinkerbell. The only way we can save her is by all saying together, I do believe in fairies, I do believe in stocks, I do believe in futures.

There will always be markets, but if they are ever going to work we have to make them transparent and credible. Buyers and sellers need to understand what is actually being transacted, and that means that the language of investment needs to be purged and reconstructed. Now is a time for logic, not rhetoric. The lazy masses who fund the markets have to wake up and study where we are and where we’ve been. Sometimes it’s easier to believe in gods and monsters than it is to believe in what we are actually seeing around us. It’s certainly more fun. And it’s easier to believe in myth and the simple explanations it offers than it is to analyze the complexities of the mundane. But look where that has gotten us. A good start would be to elect a government comprised of persons who speak the truth in plain language, who don’t try to blind us with science or gospels, and who will apply reason to our situation.

You don’t need Sherlock Holmes to get us out of this. But we do need a President and a Congress who can move forward with reason and with a scientific approach. The truth is something I can still believe in.