The Anti-Economist — January 15, 2013, 5:23 pm

Does America Need Jack Lew?

The incoming treasury secretary’s positions on regulation and the deficit offer cause for concern

Jack Lew, President Obama’s nominee for secretary of the treasury, professed during the 2010 Senate hearing for his confirmation as head of the Office of Management and Budget not to be sure whether deregulation was a principal cause of the 2008 financial crisis. If not deregulation, one wondered, then what? Was he part of the Alan Greenspan gang — those who claimed the crisis was just one of those things that happen from time to time, and that speculative excess is simply a natural development in a free market that makes many other contributions to the economy? Did he subscribe to the bad-apple theory, as President George W. Bush did when assessing the corruption scandals of the early 2000s?

Lew didn’t say. But he was a key member of the Clinton Administration at the time it passed the Commodity Futures Modernization Act of 2000, which prevents the federal government from seriously regulating derivatives, and which had a direct bearing on the crisis to come. He probably also believes, along with President Obama and his early advisers, that the Clinton Administration’s support for the repeal of key provisions of the Glass–Steagall Act had nothing to do with the crisis — that having investment banking and commercial banking under one roof was not a problem, as it had been before the law was passed in the 1920s. Prior to the administration’s decision, Glass–Steagall had already been watered down plenty by Federal Reserve chairman Alan Greenspan: banks had been underwriting securities for years, and Greenspan apparently never thought to challenge this speculation. Citigroup and JP Morgan Chase made huge loans to underwriting clients like Enron and WorldCom, for example, even as they analyzed and sold stock in those companies on behalf of their investor clients.

Clinton’s decision to end the enforced separation of investment and commercial banking allowed Sandy Weill’s Travelers Group, which included huge broker subsidiaries, to merge with Citicorp and create Citigroup. That enormous complex in turn took on much more risk than it would otherwise have, as did its competitors. The Bush Administration’s increase in the debt limitations on loan underwriters added further to the risk carried by the banks.

Was Lew unaware of these issues when he spoke at his confirmation hearing? My guess is that he was confused about Glass–Steagall, not fully understanding that the final destruction of barriers to mergers opened the door to giant institutions and their increased burdens of risk. Yet even Clinton admitted in his recent book, Back To Work, that his administration’s failure to regulate derivatives was an error; Lew should surely have agreed with that.

For me, however, a more worrisome and less often addressed problem than Lew’s attitude toward regulation is that he appears to be a deficit hawk, one of a camp that is comfortable comparing government finances with family finances. To me this is the great litmus test: Should a Democratic treasury secretary say “Like every family we have to tighten our belts,” as Lew did in presenting Obama’s 2012 budget?

When a family tightens its belt, it’s unlikely that its income — wages, salaries, and so on — will shrink, or that an upcoming raise will be cancelled. When a nation tightens its belt, by contrast, its income, the GDP, is likely to grow less rapidly or to fall. So why resort to this petty and misleading cliché? Lew may well believe in it — his boss has previously drawn the comparison, too.

We can’t spend indefinitely, to be sure, but the rest of Lew’s budget talk would have made any Republican treasury official proud. He failed to talk about the crucial role of growth in controlling future deficits. He drew no serious distinction between near-term deficits and long-term ones. And though he did talk about how we had to spend — presumably on public investment — it’s worth noting that the Clinton Administration did not use the surpluses of the economic boom to significantly raise public investment. To the contrary, Clinton and his advisers Robert Rubin and Larry Summers prioritized debt repayment, and Greenspan loved the administration’s approach. Lew, as a Rubin underling and protégé, was no doubt solidly in their camp.

So this is the treasury secretary we’re going to get. Obama bravely backed a significant, if ultimately inadequate, stimulus early in his administration. From then until late 2011, he was consumed by the federal deficit, rarely mentioning how effective the stimulus was, never mind coming back for more. Washington commentators say the politics were stacked against him, but his attitude spoke to his actions on other issues: naming two deficit hawks as the head of his budget-balancing commission, barely mentioning the nation’s jobs emergency, buying into the austerity-economics argument.

Reports from Washington suggest that Lew is a strong advocate of the nation’s social-spending programs, which is heartening, but I worry that his instincts on the deficit will lead to a debt-ceiling deal borne mostly by the middle class and the poor. The nomination is a step backward — one that suggests Obama wants loyalists, not idea people, on economic policy. Were it otherwise, he might have chosen former Goldman Sachs co-head of finance Gary Gensler, now an indefatigable regulator as head of the Commodity Futures Trading Commission; or Gensler’s predecessor, Brooksely Born, who wanted to regulate derivatives but was chased from town by Clinton and his men; or former FDIC head Sheila Bair, who created too much friction with Geithner (often for good reason) to be a likely choice. Such people might have plotted a new and better course — but Obama wants a private at the treasury department, not a general.

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The Printed Word in Peril·

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In February, at an event at the 92nd Street Y’s Unterberg Poetry Center in New York, while sharing the stage with my fellow British writer Martin Amis and discussing the impact of screen-based reading and bidirectional digital media on the Republic of Letters, I threw this query out to an audience that I estimate was about three hundred strong: “Have any of you been reading anything by Norman Mailer in the past year?” After a while, one hand went up, then another tentatively semi-elevated. Frankly I was surprised it was that many. Of course, there are good reasons why Mailer in particular should suffer posthumous obscurity with such alacrity: his brand of male essentialist braggadocio is arguably extraneous in the age of Trump, Weinstein, and fourth-wave feminism. Moreover, Mailer’s brilliance, such as it was, seemed, even at the time he wrote, to be sparks struck by a steely intellect against the tortuous rocks of a particular age, even though he labored tirelessly to the very end, principally as the booster of his own reputation.

It’s also true that, as J. G. Ballard sagely remarked, for a writer, death is always a career move, and for most of us the move is a demotion, as we’re simultaneously lowered into the grave and our works into the dustbin. But having noted all of the above, it remains the case that Mailer’s death coincided with another far greater extinction: that of the literary milieu in which he’d come to prominence and been sustained for decades. It’s a milieu that I hesitate to identify entirely with what’s understood by the ringing phrase “the Republic of Letters,” even though the overlap between the two was once great indeed; and I cannot be alone in wondering what will remain of the latter once the former, which not long ago seemed so very solid, has melted into air.

What I do feel isolated in—if not entirely alone in—is my determination, as a novelist, essayist, and journalist, not to rage against the dying of literature’s light, although it’s surprising how little of this there is, but merely to examine the great technological discontinuity of our era, as we pivot from the wave to the particle, the fractal to the fungible, and the mechanical to the computable. I first began consciously responding, as a literary practitioner, to the manifold impacts of ­BDDM in the early 2000s—although, being the age I am, I have been feeling its effects throughout my working life—and I first started to write and speak publicly about it around a decade ago. Initially I had the impression I was being heard out, if reluctantly, but as the years have passed, my attempts to limn the shape of this epochal transformation have been met increasingly with outrage, and even abuse, in particular from my fellow writers.

As for my attempts to express the impact of the screen on the page, on the actual pages of literary novels, I now understand that these were altogether irrelevant to the requirement of the age that everything be easier, faster, and slicker in order to compel the attention of screen viewers. It strikes me that we’re now suffering collectively from a “tyranny of the virtual,” since we find ourselves unable to look away from the screens that mediate not just print but, increasingly, reality itself.

Photograph (detail) by Ellen Cantor from her Prior Pleasures series © The artist. Courtesy dnj Gallery, Santa Monica, California
Among Britain’s Anti-Semites·

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This is the story of how the institutions of British Jewry went to war with Jeremy Corbyn, the leader of the Labour Party. Corbyn is another feather in the wind of populism and a fragmentation of the old consensus and politesse. He was elected to the leadership by the party membership in 2015, and no one was more surprised than he. Between 1997 and 2010, Corbyn voted against his own party 428 times. He existed as an ideal, a rebuke to the Blairite leadership, and the only wise man on a ship of fools. His schtick is that of a weary, kindly, socialist Father Christmas, dragged from his vegetable patch to create a utopia almost against his will. But in 2015 the ideal became, reluctantly, flesh. Satirists mock him as Jesus Christ, and this is apt. But only just. He courts sainthood, and if you are very cynical you might say that, like Christ, he shows Jews what they should be. He once sat on the floor of a crowded train, though he was offered a first-class seat, possibly as a private act of penance to those who had, at one time or another, had no seat on a train.

When Corbyn became leader of the Labour Party, the British media, who are used to punching socialists, crawled over his record and found much to alarm the tiny Jewish community of 260,000. Corbyn called Hez­bollah “friends” and said Hamas, also his “friends,” were devoted “to long-term peace and social justice.” (He later said he regretted using that language.) He invited the Islamist leader Raed Salah, who has accused Jews of killing Christian children to drink their blood, to Parliament, and opposed his extradition. Corbyn is also a patron of the Palestine Solidarity Campaign and a former chair of Stop the War, at whose rallies they chant, “From the river to the sea / Palestine will be free.” (There is no rhyme for what will happen to the Jewish population in this paradise.) He was an early supporter of the Boycott, Divestment, and Sanctions (BDS) movement and its global campaign to delegitimize Israel and, through the right of return for Palestinians, end its existence as a Jewish state. (His office now maintains that he does not support BDS. The official Labour Party position is for a two-state solution.) In the most recent general election, only 13 percent of British Jews intended to vote Labour.

Corbyn freed something. The scandals bloomed, swiftly. In 2016 Naz Shah, Labour MP for Bradford West, was suspended from the party for sharing a Facebook post that suggested Israel be relocated to the United States. She apologized publicly, was reinstated, and is now a shadow women and equalities minister. Ken Livingstone, the former mayor of London and a political supporter of Corbyn, appeared on the radio to defend Shah and said, “When Hitler won his election in 1932, his policy then was that Jews should be moved to Israel. He was supporting Zionism before he went mad and ended up killing six million Jews.” For this comment, Livingstone was suspended from the party.

A protest against anti-Semitism in the Labour Party in Parliament Square, London, March 26, 2018 (detail) © Yui Mok/PA Images/Getty Images
Nothing but Gifts·

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If necessity is the stern but respectable mother of invention, then perhaps desperation is the derelict father of subterfuge. That was certainly the case when I moved to Seattle in 1979.

Though I’d lived there twice during the previous five years, I wasn’t prepared for the economic boom I found upon this latest arrival. Not only had rent increased sharply in all but the most destitute neighborhoods, landlords now routinely demanded first, last, and a hefty security deposit, which meant I was short by about fifty percent. Over the first week or so, I watched with mounting anxiety as food, gas, and lodging expenses reduced the meager half I did have to a severely deficient third. To make matters even more nerve-racking, I was relocating with my nine-year-old son, Ezra. More than my well-being was at stake.

A veteran of cold, solitary starts in strange cities, I knew our best hope wasn’t the classifieds, and certainly not an agency, but the serendipity of the streets—handmade for rent signs, crowded bulletin boards in laundromats and corner grocery stores, passersby on the sidewalk; I had to exploit every opportunity that might present itself, no matter how oblique or improbable. In Eastlake, at the edge of Lake Union between downtown Seattle and the University District, I spied a shabby but vacant one-story house on the corner of a block that was obviously undergoing transition—overgrown lots and foundation remnants where other houses once stood—and that had at least one permanent feature most right-minded people would find forbidding: an elevated section of Interstate 5 just across the street, attended by the incessant roar of cars and trucks. The house needed a new roof, a couple of coats of paint, and, judging by what Ezra and I could detect during a furtive inspection, major repair work inside, including replacing damaged plaster-and-lath walls with sheetrock. All of this, from my standpoint, meant that I might have found a solution to my dilemma.

The next step was locating the owner, a roundabout process that eventually required a trip to the tax assessor’s office. I called the person listed on the rolls and made an appointment. Then came the moment of truth, or, more precisely, untruth, when dire circumstance begot strategic deception. I’d never renovated so much as a closet, but that didn’t stop me from declaring confidently that I possessed both the skills and the willingness to restore the entire place to a presentable—and, therefore, rentable—state in exchange for being able to live there for free, with the length of stay to be determined as work progressed. To my immense relief, the pretense was well received. Indeed, the owner also seemed relieved, if a bit surprised, that he’d have seemingly trustworthy tenants; homeless people who camped beneath the freeway, he explained, had repeatedly broken into the house and used it for all manner of depravity. Telling myself that inspired charlatanry is superior to mundane trespassing—especially this instance of charlatanry, which would yield some actual good—I accepted the keys from my new landlord.

Photograph (detail) © Larry Towell/Magnum Photos
Checkpoint Nation·

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Laura Sandoval threaded her way through idling taxis and men selling bottles of water toward the entrance of the Cordova International Bridge, which links Ciudad Juárez, Mexico, to El Paso, Texas. Earlier that day, a bright Saturday in December 2012, Sandoval had crossed over to Juárez to console a friend whose wife had recently died. She had brought him a few items he had requested—eye drops, the chimichangas from Allsup’s he liked—and now that her care package had been delivered, she was in a hurry to get back to the Texas side, where she’d left her car. She had a …
Checkpoint on I-35 near Encinal, Texas (detail) © Gabriella Demczuk

Number of toilet seats at the EU Parliament building in Brussels that a TV station had tested for cocaine:


Happiness creates a signature smell in human sweat that can induce happiness in those who smell it.

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Happiness Is a Worn Gun


Illustration by Stan Fellows

Illustration by Stan Fellows

“Nowadays, most states let just about anybody who wants a concealed-handgun permit have one; in seventeen states, you don’t even have to be a resident. Nobody knows exactly how many Americans carry guns, because not all states release their numbers, and even if they did, not all permit holders carry all the time. But it’s safe to assume that as many as 6 million Americans are walking around with firearms under their clothes.”

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