Friday, May 30, 2014

Nowhere Left to Go

Ever since the fall of the former Soviet Union, symbolized by the destruction of the Berlin Wall in November 1989, those on the left have faced a dilemma: with marxism and, by extension, socialism discredited, and capitalism reigning unopposed throughout most of the world, including even in China, the left has no direction. Without socialism as at least a beacon to which a humane society can aspire, the left has appeared lost, dazed, and bankrupt of real ideas. Reading Chris Hedges’ recent Death of the Liberal Class (Nation Books: 2010) has crystallized these thoughts for me and given them a historical underpinning. For what Hedges does in his book is trace the beginning of the left’s decline to World War I and its aftermath. Here is what he writes early on: the liberal era, which had been getting stronger in the early 20th century with the rise of populism, unions, women’s rights, housing for the poor, and socialism as a legitimate political movement,

effectively ended with World War I. The war, which shattered liberal optimism about the inevitability of human progress, also consolidated state and corporate control over economic, political, cultural and social affairs. It created mass culture, fostered through the consumer society the cult of the self, led the nation into an era of permanent war, and used fear and mass propaganda to cow citizens and silence independent and radical voices within the liberal class (p. 7).

Hedges goes on to demonstrate with persuasive detail the sad story of how this happened.
            To begin with, Hedges makes clear that the liberal class—including the media, the church, the university, the Democratic Party, the arts, and labor unions—has, or should have, an important function in a democracy: it “functions as a safety valve. It makes piecemeal and incremental reform possible. It offers hope for change…It endows the state and the mechanisms of power with virtue” (p. 9). But when the liberal class is cowed into submission by repression, or is bought off by corporate money and power, it retreats into narrow specialization, a cult of the self, and endless discussion. This is exactly what happened, Hedges demonstrates, in the period during and after World War I. The irony is that the crippling of liberals was done by one of the arch liberals of the time, President Woodrow Wilson. Wilson had to find a way, in 1917, to get the American public to favor joining a war that had already gone on for three bloody years in Europe. It was a war that over 90% of Americans wanted no part of, seeing it primarily as a “rich man’s war” promoted mainly by bankers to salvage the loans they’d made to allied nations and by corporations manufacturing munitions. In order to effect the massive opinion shift that was needed—i.e. from isolationism to war mania—Wilson agreed with several advisors to implement, a week after he declared war on April 6, 1917, a massive public relations campaign: he set up the Committee for Public Information or CPI, commonly known as the Creel Commission after its head, George Creel. Creel and his huge committee employed writers, artists, filmmakers, poster designers, and over 7500 speakers to turn public opinion against the evil “Huns” and in favor of “saving democracy.” One example of the Commission’s work was the poster, still famous today, of Uncle Sam pointing his finger with the words, “I Want You.” Creel himself considered the CPI “a vast enterprise in salesmanship, the world’s greatest adventure in advertising.” The words, from his 1920 memoir, How We Advertised America, were prophetic, for not only did the Commission succeed in drumming up massive support for the war and violent hatred towards Germans, both abroad and in America, but it also prefigured the imminent rise of mass advertising, mass propaganda, and the consumer culture that has dominated America ever since. Indeed, as I have noted elsewhere, Edward Bernays (nephew of Sigmund Freud) went straight from his post in the CPI to becoming a major figure on Madison Avenue, advocating the same mass propaganda tools for commercial advertising that he had used to promote the war. As Bernays noted in his seminal book, Propaganda (1928), “It was, of course, the astounding success of propaganda during the war that opened the eyes of the intelligent few in all departments of life to the possibilities of regimenting the public mind” (Hedges, p 80; emphasis added).
            The effect of all this propaganda, and its adoption by corporate America, was not only the emasculation of the liberal class, but its co-optation into accepting the idea that the proper function of an American was not to be an active informed citizen, but to consume. Progress, which liberals had earlier located in the improvement of life for the disadvantaged and an ever-more direct voice for the masses in government, had become technological progress: the steady production of consumer goods allegedly designed to make life easier and more pleasant. The emotional appeals that had worked so well to move public opinion about the war were now employed to induce Americans to want what they did not need, and to consider the satisfying of such created desires the be-all and end-all of existence. As Hedges summarizes it,

            The war destroyed values and self-perceptions that had once characterized American life and replaced them with fear, distrust, and the hedonism of the consumer society. The new mass propaganda… effectively vilified all who did not speak in the language imparted to the public by corporations and the state. For these reasons, it presaged a profound cultural and political shift. It snuffed out a brief and robust period of reform in American history, one that had seen mass movements, enraged at the abuses of an American oligarchy, sweep across the country and demand profound change. The rise of mass propaganda, made possible by industrial warfare, effectively killed populism (p. 62)

From then on, according to Hedges, with the brief exception of a period of populism during the Depression-era 1930s via such organizations as the Works Progress Administration (WPA), the liberal class became a handmaiden to the power elite. Even the counterculture of the 1960s, according to Hedges, aside from its mild successes in protesting the Vietnam war, retreated into the hedonism and disengagement that was initiated by the Beats, and really goes back to the liberal retreat in World War I. As Hedges puts it,

The counterculture of the 1960s, like the commodity culture, lured adherents inward. It set up the self as the primary center of concern. It, too, offered affirmative, therapeutic remedies to social problems that embraced vague, undefined, and utopian campaigns to remake society. There was no political vision (p. 110).

The churches, the universities, the unions, and the Democratic Party had and have a similar lack of vision, a similar preoccupation with the self, a similar impatience with the long hard work of political change, and a similar tendency to be bought off by power. Induced or seduced to count on “the state as an agent of change,” they ended up “abetting the consumer society, the cult of the self, and the ascendancy of the corporate state” (p. 110).
            When it comes to solutions for us today, Hedges does not hold out much hope. Though he himself has become one of the more radical activists in the nation, suing the government recently in a challenge to the National Defense Authorization Act of 2012 permitting indefinite detention, he refuses on principle to advocate or engage in violence. Indeed, he is clear that since the flaccid liberal class lacks both the capacity and the imagination to lead the revolt he sees as necessary, “revolt…will come from the right, as it did in other eras of bankrupt liberalism in Nazi Germany, fascist Italy, and Tsarist Russia” (196). Still, for Hedges, an acceptable, and perhaps sole form of revolt for radicals on the left remains: refusal and noncooperation. Even knowing that reform of the system as it now stands is hopeless; even convinced that corporate money has bought off all the democratic levers of legislation and power, including the current political operatives up to and including Barack Obama; even so, Hedges still counsels that those of good conscience must act, rebel, resist, despite the minimal chances for success:
            Acts of resistance are moral acts. They take place because people of conscience understand the moral, rather than the practical, imperative of rebellion. They should be carried out not because they are effective, but because they are right. (205).

            This leads us to the dilemma stated at the beginning. With the actions of states becoming ever more viciously repressive, with the world on the brink of mass extinctions, global warming, and a thousand other insults due to the piratic and exploitative practices of corporate capitalists on a global scale, where can the left go? What direction can there be for people with vision, with a conscience? For Hedges, the answer lies not in revolution, which seeks to create a new power structure (and all revolutions in recent history have proven to be as corrupt as what they replaced), but in rebellion; rebellion as a continuing revolt against power. Basically, if I understand him correctly, this means refusing to submit. It means rebelling to assert, if not our power, at least our humanity. I have written about this before, as a comment on one of my favorite literary creations, Melville’s Bartleby the Scrivener. Bartleby’s inimitable and unforgettable explanation for his refusal to move out of the office he’d been asked to leave because of his total noncompliance (he stopped working or leaving after office hours, but would only sit facing the wall), was:  I prefer not to. It is clear that Melville was using him as an example of someone who simply refuses, without seeking agreement or mercy or sympathy or anything else, to cooperate with business as usual. The great contemporary philosopher, Slavoj Zizek, refers to something similar as ‘Bartleby politics.’ Here is how Hedges puts his version in ending his cri du coeur:
            The indifference to the plight of others and the cult of the self is what the corporate state seeks to instill in us. That state appeals to pleasure as well as fear, to crush compassion. We will have to continue to fight the mechanisms of that dominant culture, if for no other reason than to preserve, through small, even tiny acts, our common humanity…As distinct and moral beings, we will endure only through these small, sometimes imperceptible acts of defiance. This defiance, this capacity to say no, is what mass culture and mass propaganda seeks to eradicate. As long as we are willing to defy these forces, we have a chance, if not for ourselves, then at least for those who follow. As long as we defy these forces, we remain alive. And, for now, this is the only victory possible. (217)

Whether others will agree with him is not at all certain; the incentives to simply ‘cultivate one’s own garden’ are compelling. What everyone must take account of, however, is Chris Hedges’ singular gift for laying out the problems we all face, and his urging to us all not to yield to either cynicism or false hope, but to rely on that basic human gift that endures when all else fails: defiance, the ability to say NO. After all is said and done, it is that which terrifies those in power. It is that which, if there is to be salvation, will comprise it.  

Lawrence DiStasi

Monday, May 26, 2014

Memorial Day Blues

I don’t know what has me more gloomy: the rampant hypocrisy of yet another Memorial Day (originally enacted after the Civil War so Americans could decorate the graves of fallen soldiers), or the vicious narcissism and waste of life in Isla Vista at the hands of yet another lunatic with a gun. The latter was a young man, Eliot Rodger, from an affluent family—his father is in the movie business—who advertised on youtube about his plans to kill young women he believed had spurned him all his life. He allegedly died a virgin because women—no, not just women; beautiful women of the kind he seemed to think inhabited sorority houses—wouldn’t give him a tumble. He ranted about this both in his youtube video and in his lengthy manifesto. Poor me; I can’t get laid. And therein lies the key to the whole thing: this was a young narcissist of the type America now specializes in, whose thought process seems keyed to the internet and his fantasy that there are all these beautiful women out there who should want to bed with him, but somehow don’t. Of course, the fact that he apparently had no measurable ability to relate to actual people didn’t seem to enter his calculations. His lack of success was simply due to the misperceptions of women, who didn’t see what a great guy he really was, and instead gave themselves to inferior alpha males who never treated them well. Eliot would have, if only they’d given him a chance. But they didn’t, so now he had to kill as many as he could.
            Actually, I thought that was pretty much the case until I read a piece today by Igor Volsky, originally on Think Progress, reprinted on Reader Supported News: “Behind the Sexist Ideology That Preoccupied a Mass Murderer.” In it, Volsky introduces us (me at least) to some of the websites that Rodger apparently visited, and they are both pathetic and horrifying. The websites are known as PUAs (pick up artists), and they allegedly give guys tips on how to pick up beautiful women. To call such websites misogynistic is to understate the case by eons. I hesitate to even repeat some of the ugly garbage posted on these sites, but just to give one example, a site called, a site we are told Rodger used, advises men what to do
“if you have an average jaw,” and encourages users to “rate Johnny Depp´s eye area on this pic.” Others even upload pictures and elicit tips from the community for how to alter their appearances in order to maximize their chances of meeting and having sex with beautiful women. (Reader Supported News, 25 May 14).
Nor is this the really offensive stuff. But then, we’re talking here about a young man who committed the most offensive act of all: out of his frustration (“You girls have never been attracted to me. I don’t know why you girls aren’t attracted to me. But I will punish you all for it..”), he packs his glock and goes on a rampage, shooting two sorority girls at random and then a couple more random shoppers at a convenience store before he kills himself.
            One hardly knows what to comment on first. Is this how today’s young men actually think they can find women? Apparently. And it’s all about appearance, not in person where other senses besides vision come into play (not to mention qualities of mind or spirit), but on a screen. It’s hard for someone in my generation to believe. Appearance, of course, has always been important initially in the pickup game, but now it appears to be the whole issue. Everything, in our modern version of the late Roman empire, is in the open. How do you get laid? What leads women to the sack? It’s everywhere. Biology courses teach us that strong jaws and broad shoulders attract women, hence the preoccupation with those. And TV sitcoms try to rival each other in the casual vulgarity they portray, constantly dramatizing women ogling men’s asses and openly conveying their constant concern to bed someone, anyone. The internet just multiplies this, as in this quote, in response to the murders, from what is characterized as the “anti-PUA community:” “Nobody gives a shit about some socially deprived, narrow-clavicle twink with a delusional sense of self. He’s a poser.” It’s the language that stuns me. It is blunt and cruel and without even a hint that there are human beings involved. This is because with the internet, we have a medium for expression that provides anonymity to those who wish to insult, ridicule, or linguistically savage anyone who violates their own sense of narcissism.
            And this is not even to point out the other social aspect of this situation: the way law enforcement works in America. The police were apparently tipped off by one of Eliot Rodger’s family who were alarmed that he was giving off dangerous signals (especially the youtube video). They asked the police to look in on him, which they did. But he was such a nice young white boy, well-spoken and obviously from a fine family, that he convinced them he had no problem. They left, reporting that he didn’t seem to be about to harm himself. Yes, this was their sole concern: the white boy might harm himself, never, apparently, even considering that he might be a danger to others. So they left him with his guns until he went out a bit later (after slicing up his two roommates) and killed four more innocent people. Now imagine if this young man had been black or latino. What would the Isla Vista police have done in that instance? Why they’d have had him up against the wall, or perhaps, suspecting a move for a weapon, would’ve shot the poor bastard. But jolly Rodger was polite and well-spoken and white, so he was given a pass, which he used to slaughter those he thought had “dissed” him.
            Memorable. On Memorial Day it’s memorable because the day is about remembering our dead. Our war dead and the wars that killed them. And what I’ve been trying to do all day is remember a war in recent years—anything after World War II—that could possibly have been worth dying for. There was Korea, a set-up job if ever there was one. MASH pretty much put an end to that one. And there was Vietnam (with a bunch of ‘little’ wars in between, against the little brown people in Central America making things difficult for United Fruit and our friendly dictators), a war that couldn’t even come to a proper conclusion. A war in which our soldiers were so disenchanted they began to ‘frag’ the officers supposedly leading them into glorious battle and honorable death which ended up, honorable death, in that ugly but apt word “wasted.” And more recently we’ve had Iraq (I & II, each one cheered on by a President named Bush), and of course Afghanistan, and perhaps soon, Syria and Ukraine. Can anyone cheer for any of those wars, even in retrospect? Truth is, our leaders don’t even try anymore. So what we get is hypocrisy and transparent cant about those who fought them—our presidents dutifully making their trip to Arlington to plant a wreath at the tomb of the Unknowns, and making comforting noises about how much we appreciate the sacrifice of our noble warriors. But do we? Does anyone who hasn’t lost a family member? It’s doubtful. Like Eliot Rodger, we’re all narcissists, concerned only about the beer we’ll drink and the hot dogs or hamburgers or steaks we’ll eat and the music we’ll listen to and the good life we’re convincing ourselves we’re living. And the hope that somehow, the American empire will continue for a little bit longer so our whole world order doesn’t collapse in on us, as it threatens to at every moment. At which point, perhaps, we will begin to realize that it isn’t just Americans whose death deserves the sad sound of the bugle’s taps, but all the deaths in all the wars we’ve perpetrated over the years. The millions displaced in Iraq. The multi-millions slaughtered in Vietnam. All so that our lifestyle—and especially the lifestyles of the rich and famous we admire—can be maintained in the manner to which they and we have become accustomed. And which somehow, while we’ve been looking the other way, have turned into vulgar comedies and ugly websites and nauseating banter that have reduced life to its most vicious and superficial form of exchange. Alas poor America. Alas poor Eliot Rodger. Alas the poor wasted dead.

Lawrence DiStasi

Sunday, May 11, 2014

If It's Wall Street, There's a Scam

When I was a kid, I used to watch my father as he tried to handicap horse races to pick a winning horse. I loved it because I loved the way race horses looked and ran (still do), especially when he’d take me with him to the track. Along the way, I learned about some of the scams that were used in the racing game, the most crooked being “past posting.” This was done by some bettors connected enough to afford high-speed telegraph or phone lines wherein they would get the news of a race’s winner instantly, and then rush their bets to the bookie before he knew the horses were at the post (starting gate). If you didn’t get caught, you couldn’t lose. The smarter bookies, of course, refused late bets, but enough accepted them to make past-posting a going, if highly illegal (and sometimes dangerous) business.
            It turns out that what has been happening on Wall Street in the past few years bears more than a little resemblance to past-posting. It’s called “front-running” and it’s the subject of Michael Lewis’ latest book, Flash Boys (Norton: 2014). Front running is done by “high-frequency traders” (HFTs), who manage to glean early information about trades from various sources, usually an exchange (there are now at least 13 stock exchanges operating in the United States) and then take advantage of that knowledge to buy or sell stocks on another exchange before the usual market can even operate. This ploy only makes them a few cents on each stock, but when multiplied by the $225 billion in stocks traded every day on the U.S. stock market, that comes to as much as $160 million a day in foolproof, no-risk profit.
            Lewis’s story involves one trader, Brad Katsuyama, who, being a Canadian working for the Royal Bank of Canada, has a different set of ethics than your usual American trader. He was puzzled by the “disappearance of the market” when he placed an order, but once he found out what was happening—and it took him a very long time to figure out why his trades were ‘disappearing’ when he pushed the usual ‘execute’ button, and who was doing the scamming and, especially, how it was being done—Katsuyama made a stunning decision. Rather than join the scam to enrich himself, which he could easily have done, he decided to educate his investors about how they were being screwed. The story is long and complicated and involves several of the new stock market ‘geeks’ Katsuyama hired to figure things out, figure a way to defeat the scam, and eventually start a new and honest stock exchange named IEX, but it comes down basically to the aforementioned “past posting” and speed. The speed is the time it takes for computer signals to travel along fiber-optic cables, approximately light speed, from the order desk of a broker to the stock exchanges. What almost no one knows is that though Wall Street seems to be the center of the exchanges like the New York Stock Exchange, actually today’s exchanges, all electronic, are located in northern New Jersey. The key here is that it takes time, even at light speed, to get from a broker’s computer in or near Wall Street (or even farther away in Kansas) to the exchanges across the Hudson River. Distance is crucial, because milliseconds are also crucial. Once he found this out—and again, it took years and some of the smartest minds in the business to put it all together—Katsuyama understood what the scam involved.
            A big investor like a mutual fund will place a buy order with a broker (or a Wall Street bank) for, say, 100,000 shares of Apple stock. Because of the latest rules from the SEC, that broker must seek the NBBO (National Best Bid and Offer) to match the order with a seller, and so is required (usually) to send it to all thirteen stock exchanges. The problem is that the exchanges are located in different places and so the order reaches them at different times (differing by milliseconds). But one exchange, BATS (Better Alternative Trading System, created by high-frequency traders) has its computer center in Weekhawken, just feet from the Lincoln Tunnel where the fiber-optic cables emerge from New York City. High-frequency trading firms located inside BATS thus get information about large trades first—again, by milliseconds. This is not the only place they get information, but let’s stay with this for now. They get advance information on stock prices by placing standing orders for 100 shares of every stock on the exchange (this costs them, as does placing their machines right next to the exchange computers, but it’s well worth it)—which allows them to legally find out who is trying to buy or sell what before anyone else. Once they know, they can then “front-run” buys or sells for the same stock on other exchanges, taking advantage of small price fluctuations, so they can either sell at a higher price or buy at a lower price than anyone else. Of course, they use high-speed computers to determine all this, and algorithms and fancy computer code, all of which work in milliseconds to give them risk-free buys and sells before the original stock order even gets posted. This might not seem to give them enough time to do any damage, but consider that shifts in the price of any stock (volatility) have become greater and greater, and have created risk-free opportunities for fast traders. One study showed that the price of Apple stock shifted 55,000 times in a single day. As Lewis puts it,
That meant there were 55,000 times a day a high-frequency trader could exploit the…ignorance of the wider market. Fifty-five thousand times a day, he might buy Apple shares at an outdated price, then turn around and sell them at the new, higher price, exploiting the ignorance of the slower-footed investor on either end of his trades. (99)
That “slower footed investor,” by the way, is often a mutual fund operating on behalf of the retirement funds they invest for unions, or cities, or other ordinary people who have their life savings involved.
One way Katsuyama found out what was happening was by having his computer geek set up a trading program in such a way that all of his orders reached all thirteen exchanges at the same time. When this happened, his trading orders functioned normally (as opposed to when they all reached exchanges at different times) and were executed instantly at the best price, as they should. Katsuyama called this program Thor and thought he could use it to both expose the scam and cause traders to flock to his bank. He was wrong. The HFTs figured out what he was doing quickly. More seriously, when he met with SEC regulators to tell them about the scams and how Thor was able to stop the unfair practices of HFTs, one of the staffers shocked him with this statement: What you are doing is not fair to high-frequency traders. You’re not letting them get out of the way (105). As Lewis explains, “the SEC staffer argued that it was unfair that high-frequency traders couldn’t post phony bids…that Thor forced them to honor the markets they claimed to be making.” The footnote to this mind-boggling comment from a government regulator charged with protecting the fairness of markets is that most of these young SEC staffers knew where their future bread would be buttered—working for the very thieves they were reluctant to expose or regulate. Over 200 SEC staffers since 2007 have left government to work for HFTs, including the associate director of the SEC’s Division of Trading and Markets, Elizabeth King. King took a job with Getco, one of the very largest and most profitable high-frequency trading companies.
There is more detail to this revelatory book, not least the fact that Brad Katsuyama elevated himself almost to superhero status by actually succeeding in opening a new stock exchange, IEX, that actually reflects true markets and has begun to make a difference. Whether it can fully stop the scam, however, is something else again. When there is this much money to be made, the collusion spreads and expands and morphs into all sectors of the market. Thus, many of the big Wall Street banks operate what they call dark pools, essentially their own private exchanges that engender trades without any transparency whatever. No one can see who trades what, who buys, who sells, or at what price. More and more of the trading goes on in these dark pools (“Collectively, the banks had managed to move 38% of the entire U.S. stock market now traded inside their dark pools” 224), and it is clear that high-frequency traders have been able to buy access to many of these pools so that they can expand their nefarious business. Moreover, what Lewis reveals about the SEC and their so-called regulators seems to be a fair indication that meaningful regulation will not be forthcoming any time soon. And finally, Lewis notes that Brad Katsuyama, like all superheroes, has a weakness: “his inability to imagine just how badly others might behave.” That is,
He had expected that the big banks would resist sending orders to IEX. He hadn’t imagined they would use their customers’ stock market orders to actively try at their customers’ expense to sabotage an exchange created to help their customers. (225)

That is really the problem at the heart of Wall Street and our economy in general. As one of Brad Katsuyama’s new hires put it, “The game is rigged.” But most ordinary citizens have an inability to imagine that. Most of us still believe that, by and large, commerce proceeds generally under the same set of rules and ethics that personal lives do. People obey stop signs and stop at red lights. People shrink from exploiting children and stealing from their friends and neighbors. What Wall Street and the banditry of the last few years has shown us, however, is that maintaining those beliefs in the face of the evidence now before us could leave us all sunk in a new dark pool that has no bottom at all. 

Lawrence DiStasi