The Awl http://www.theawl.com/ Be Less Stupid Mon, 06 Feb 2012 16:30:41 +0000 en hourly 1 http://wordpress.org/?v=3.0.2 Dick Joke http://www.theawl.com/2012/02/dick-joke http://www.theawl.com/2012/02/dick-joke#comments Mon, 06 Feb 2012 16:30:41 +0000 Chris Lehmann http://www.theawl.com/2012/02/dick-joke Oh dear, here we go again: “Wall Street is a meritocracy, for the most part,” an irate but of course unnamed onetime Citigroup executive confides to junior father confessor Gabriel Sherman in this week’s hallucinatory New York magazine cover story, “The Emasculation of Wall Street.” “If someone has a bonus, it’s because they’ve created value for their institution.”

In the jumpy, suggestible universe of Gabe Sherman, Wall Street sleuth, things really are that simple: The beleaguered financial overclass creates value, in a rationally ordered system of maximally awarded talent. And the clueless public sector, intoxicated on post-meltdown regulatory prerogative, meddles with the primal forces of nature, skews executive compensation downward, panders to the blurry “populist” agenda of the Occupy Wall Street Crowd, generally foments market uncertainty and other forms of intolerable chaos so that presto, before you know it, we have “The End of Wall Street As They Knew It.”

In other words: To your crying towels, bankers! Correspondent Sherman is on the scene, and no howling distortion of recent financial history you care to offer is too outlandish for him to faithfully record! After duly huddling with a couple of dozen financial titans, our reporter has arrived at a chilling verdict: “what emerged is a picture of an industry afflicted by a crisis it would not be flip to call existential.”

Perhaps not—but what is exceedingly flip is brother Sherman’s account of the origins of the crisis.

Sure, there was that awkward business that sent the global finance sector to the brink of ruin, plus a devastating tsunami in Japan and whatnot—but the true culprit sending Wall Street titans back into their bedrooms to listen to Interpol on auto-repeat and cut themselves is of course the specter of government regulation. The Dodd-Frank financial reform act, a largely toothless measure lousy with loopholes and lobbying dosh, becomes in the alternate universe of Adam Moss’s New York magazine a rash bid to expropriate the expropriators. Even though the full provisions of the already anemic bill don’t go into effect until 2016, the very thought of a somewhat straitened financial playing field so terrifies Wall Street’s stout corridor of wealth creators that, well, they’re bidding farewell to the most valuable commodity of all—their big swinging dicks. “The government has strangled the financial system,” Dick Bove, an especially excitable and frequently mistaken bank analyst, tells Sherman. “We’ve basically castrated these companies. They can’t borrow as much as they used to borrow.”

You see, by force of the Volcker rule—a watered-down version of the central Glass-Steagall protections separating out commercial and investment banking that were disastrously repealed in 1999—Wall Street is re-thinking everything, from the scale of its year-end bonuses to its “core value to the economy.” And Bove, for one, preaches that all this doom-and-gloom thinking can’t help but be self-fulfilling: “These are sweeping secular changes taking place that won’t just impact the guys who won’t get their bonuses this year. We’ve made a decision as a nation to shrink the growth of the financial system under the theory that it won’t impact the growth of the nation’s economy.” Another unnamed informant tells Sherman that the financial industry is gearing up for a state of near permanent pay-austerity at the mere thought of the Volcker rule, which doesn’t kick in officially until July: “If you landed on Earth from Mars and looked at the banks, you’d see that these are institutions that need to build up capital and they’re becoming lower-margin businesses. So that means it will be hard, nearly impossible, to sustain their size and compensation structure.”

Never mind that this diagnosis is diametrically opposed to the Bove-ian school of market alarmism, which holds that banks are being starved of desperately needed leverage and credit; this unnamed fearmonger sees them in a frenzy to raise capital, and one thing the Volcker rule undeniably seeks to achieve is minimal capital requirements to prevent speculative lending from veering once more into toxic chaos.

No, for Sherman, all that’s needed to stoke the proper mood of Misean panic is to rouse the specter of frightened bankers, and a few quick-and-dirty quarterly profit reports.

From the moment Dodd-Frank passed, the banks’ financial results have tended to slide downward, in significant part because of measures taken in anticipation of its future effect. Since July 2010, Bank of America nosed down 42 percent, Morgan Stanley fell 25 percent, Goldman fell 21 percent, and Citigroup fell 16—in a period when the Dow rose 25 percent.

Other economic journalists might conclude that this downturn was a set of long-overdue market corrections, and given the broader turn around in the actual manufacturing economy, by no means an indication of worsening conditions—for investors and workers alike. Some radical others might even suggest that the shredded headcounts at the financial firms played a part in their own downturn in revenue. But while from his evidently privileged vantage in the driver’s seat of the Doc’s Time Machine, Sherman can divine all sorts of mischief arising from the yet-to-be-implemented provisions of Dodd-Frank, it does bear reminding that since 2010, BofA has been forced to eat a sizable portion of the toxic mortgage debt it acquired amid its spectacularly ill-advised purchase of Countrywide; Morgan has suffered tremendous losses in its Japanese operations and has, like most banks, been spooked by its exposure to the Euro-debt crisis (funnily enough, the firm’s US-based investment-banking operations—ie, the shop most directly affected by the dread Volcker rule, has booked profits amid all the tumult abroad); much the same general picture holds at Goldman, which as you may recall, has had more than its share of legal contretemps thrown into the bargain . As for Citigroup—the company whose very grotesque merged existence was the deregulatory excuse for repealing Glass Steagall—it’s been a basket case for so very long that a 16 percent loss in profits over the past two years seems cause for celebration, Volcker Rule or no Volcker Rule.

Indeed, for all of Sherman’s gullible huffing and puffing over the destructive reach of our new financial regulatory state, no one seems to have told the nation’s financial system this dire news, to judge by the actual behavior (as opposed to the opportunistic media rhetoric of its leaders). Yes, it’s been a rocky couple of years. And sure, Wall Street has lately shed plenty of jobs—who hasn’t? But in a report to investors inconveniently released one day ahead of Sherman’s dispatch from the existential trenches, Goldman Sachs—which continues to enjoy bullish stock performance amid its profit setbacks—announced this bit of non-emasculating news:

From a financial markets perspective, the environment looks quite friendly. The combination of better growth news and easier monetary policy is always welcome. In addition, we recently argued that corporate profit margins may still have room for further gains, despite the fact that they already stand at record levels from both a bottom-up and top-down perspective.

But no such merely empirical considerations can hope to stand up against the wrath of a stable of mainly unnamed bankers! Why, just look at Goldman itself, where Sherman reports that “months before the Volcker rule is set to kick in, star traders began [sic] to leave in droves.” And Goldman has lately shuttered its proprietary hedge-fund shop—in recognition that the line of essentially free credit that the Fed has opened up to investment houses may at last be about to dry up.

This, too, might well be seen as a sign of comparative health in the broader economy—especially with Goldman itself sounding so bullish on the investment climate, with the dread implementation of the Volcker Rule a scant five months away. After all, easy credit is what creates unsustainable bubbles in the first place, as even the most cursory study of the 2008 debacle shows. But not so in Shermanland! Even breakaway hedge shops are booking fairly lackluster profits (despite the obscene tax advantages they continue to enjoy)—so you know: Panic, everybody! Only Sherman is even less clear in explicating just what the cause for alarm is supposed to be in this case—while banks' hedge-fund divisions are curtailed under the Volcker rule, hedge funds themselves need not tremble before its pending implementation. There’s the bad economy, yes—but it’s just as important, he insists, to note that the hedge sector is “as overbuilt as the housing and credit markets that drove its profits,” with the overall number of hedge funds exploding about 16-fold (610 to 9.553) from 1990 to 2011. One would assume that a slowdown in an oversupplied speculative sector is not, you know, a bad thing by itself, either—especially given that even the most diehard Randians would be hard-pressed to demonstrate that hedge funds create economic value of any kind. But Sherman nonetheless frets on behalf of hedge managers that “the easy obvious plays are oversubscribed, which shrinks margins.... Many have predicted a hedge-fund shakeout, and it seems to have started. Over 1,000 funds have closed in the last year and a half.” It’s evidently a taken-for-granted, second-nature kind of axiom in today’s American economy that an “industry” made up entirely of “easy obvious plays” is integral to our very survival.

Or at the very least, it’s a great enabling premise of lazy, overclass-osculating, dick-obsessed magazine journalism. Witness Sherman’s closing brief for the productive wonders worked by yon investment class:

It’s certainly true that Wall Street’s money played an important part in New York’s comeback, helping to transform the city from a symbol of urban decay into a gleaming leisure theme park. Consciously or not, as a city, New York made a bargain: It would tolerate the one percent’s excessive pay as long as the rising tax base funded the schools, subways, and parks for the 99 percent. “Without Wall Street, New York becomes Philadelphia” is how a friend of mine in finance explains it.

Well, Gabe, I have news for you and your friend in finance: For the vast majority of people living in the glorious and gleaming leisure theme park known as Michael Bloomberg’s New York, Philadelphia looks pretty goddamn inviting (and not just for delusional “sixth borough” hipsters). For one thing, the city’s schools have lately taken to looting state budget funds to make up for shortfalls; the city’s parks are already relying to a disproportionate degree on private donations to run themselves—except, of course, when the mayor wants to unleash city cops to displace and round up those irksome unproductive kids protesting wealth inequality. And do NOT get us started on the regressively funded, frequently inoperative subways, OK?

Then again, New York magazine is, God knows, a gleaming theme park all its own, and it’s perhaps best not to disturb the placid reveries of its well-appointed editorial brain trust. Yes, sustaining the enabling fictions of New York-style policy analysis does involve adducing sweeping assertions from the thinnest air: “The rising tide of the real-estate and credit markets lifted all boats,” Sherman burbles, apparently in reference to hedge funds, but a quick Google search for “Long Term Capital Management” will rapidly disabuse any civilian in the real economy of such a ludicrous notion. (And the ever-fallacious “rising tide” thesis is especially laughable when applied more broadly in today’s America.) Likewise, Sherman’s wind-up paragraph preposterously announces that “the strictures that are holding the banks back now are tighter than any since the thirties”—certainly news to any financial regulator of the mid-twentieth century, when off-shore mutual funds were heavily prosecuted and hedge funds were much more regulated (even without mandatory SEC registration); or to the economic policymakers of the Great Society era, who enforced corporate tax rates north of 40 percent, more than twice of today’s post-Dodd assessments. But why should we expect any other version of events from the hallowed precincts of Adam Moss’s TriBeCa wing of the great New York theme park? For as this week’s cover story plainly demonstrates, nothing can be considered real in this abject weekly’s pages unless it comes straight from the mouth of a banker.



Chris Lehmann is the co-editor of Bookforum and is the author of Rich People Things.

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]]> Oh dear, here we go again: “Wall Street is a meritocracy, for the most part,” an irate but of course unnamed onetime Citigroup executive confides to junior father confessor Gabriel Sherman in this week’s hallucinatory New York magazine cover story, “The Emasculation of Wall Street.” “If someone has a bonus, it’s because they’ve created value for their institution.”

In the jumpy, suggestible universe of Gabe Sherman, Wall Street sleuth, things really are that simple: The beleaguered financial overclass creates value, in a rationally ordered system of maximally awarded talent. And the clueless public sector, intoxicated on post-meltdown regulatory prerogative, meddles with the primal forces of nature, skews executive compensation downward, panders to the blurry “populist” agenda of the Occupy Wall Street Crowd, generally foments market uncertainty and other forms of intolerable chaos so that presto, before you know it, we have “The End of Wall Street As They Knew It.”

In other words: To your crying towels, bankers! Correspondent Sherman is on the scene, and no howling distortion of recent financial history you care to offer is too outlandish for him to faithfully record! After duly huddling with a couple of dozen financial titans, our reporter has arrived at a chilling verdict: “what emerged is a picture of an industry afflicted by a crisis it would not be flip to call existential.”

Perhaps not—but what is exceedingly flip is brother Sherman’s account of the origins of the crisis.

Sure, there was that awkward business that sent the global finance sector to the brink of ruin, plus a devastating tsunami in Japan and whatnot—but the true culprit sending Wall Street titans back into their bedrooms to listen to Interpol on auto-repeat and cut themselves is of course the specter of government regulation. The Dodd-Frank financial reform act, a largely toothless measure lousy with loopholes and lobbying dosh, becomes in the alternate universe of Adam Moss’s New York magazine a rash bid to expropriate the expropriators. Even though the full provisions of the already anemic bill don’t go into effect until 2016, the very thought of a somewhat straitened financial playing field so terrifies Wall Street’s stout corridor of wealth creators that, well, they’re bidding farewell to the most valuable commodity of all—their big swinging dicks. “The government has strangled the financial system,” Dick Bove, an especially excitable and frequently mistaken bank analyst, tells Sherman. “We’ve basically castrated these companies. They can’t borrow as much as they used to borrow.”

You see, by force of the Volcker rule—a watered-down version of the central Glass-Steagall protections separating out commercial and investment banking that were disastrously repealed in 1999—Wall Street is re-thinking everything, from the scale of its year-end bonuses to its “core value to the economy.” And Bove, for one, preaches that all this doom-and-gloom thinking can’t help but be self-fulfilling: “These are sweeping secular changes taking place that won’t just impact the guys who won’t get their bonuses this year. We’ve made a decision as a nation to shrink the growth of the financial system under the theory that it won’t impact the growth of the nation’s economy.” Another unnamed informant tells Sherman that the financial industry is gearing up for a state of near permanent pay-austerity at the mere thought of the Volcker rule, which doesn’t kick in officially until July: “If you landed on Earth from Mars and looked at the banks, you’d see that these are institutions that need to build up capital and they’re becoming lower-margin businesses. So that means it will be hard, nearly impossible, to sustain their size and compensation structure.”

Never mind that this diagnosis is diametrically opposed to the Bove-ian school of market alarmism, which holds that banks are being starved of desperately needed leverage and credit; this unnamed fearmonger sees them in a frenzy to raise capital, and one thing the Volcker rule undeniably seeks to achieve is minimal capital requirements to prevent speculative lending from veering once more into toxic chaos.

No, for Sherman, all that’s needed to stoke the proper mood of Misean panic is to rouse the specter of frightened bankers, and a few quick-and-dirty quarterly profit reports.

From the moment Dodd-Frank passed, the banks’ financial results have tended to slide downward, in significant part because of measures taken in anticipation of its future effect. Since July 2010, Bank of America nosed down 42 percent, Morgan Stanley fell 25 percent, Goldman fell 21 percent, and Citigroup fell 16—in a period when the Dow rose 25 percent.

Other economic journalists might conclude that this downturn was a set of long-overdue market corrections, and given the broader turn around in the actual manufacturing economy, by no means an indication of worsening conditions—for investors and workers alike. Some radical others might even suggest that the shredded headcounts at the financial firms played a part in their own downturn in revenue. But while from his evidently privileged vantage in the driver’s seat of the Doc’s Time Machine, Sherman can divine all sorts of mischief arising from the yet-to-be-implemented provisions of Dodd-Frank, it does bear reminding that since 2010, BofA has been forced to eat a sizable portion of the toxic mortgage debt it acquired amid its spectacularly ill-advised purchase of Countrywide; Morgan has suffered tremendous losses in its Japanese operations and has, like most banks, been spooked by its exposure to the Euro-debt crisis (funnily enough, the firm’s US-based investment-banking operations—ie, the shop most directly affected by the dread Volcker rule, has booked profits amid all the tumult abroad); much the same general picture holds at Goldman, which as you may recall, has had more than its share of legal contretemps thrown into the bargain . As for Citigroup—the company whose very grotesque merged existence was the deregulatory excuse for repealing Glass Steagall—it’s been a basket case for so very long that a 16 percent loss in profits over the past two years seems cause for celebration, Volcker Rule or no Volcker Rule.

Indeed, for all of Sherman’s gullible huffing and puffing over the destructive reach of our new financial regulatory state, no one seems to have told the nation’s financial system this dire news, to judge by the actual behavior (as opposed to the opportunistic media rhetoric of its leaders). Yes, it’s been a rocky couple of years. And sure, Wall Street has lately shed plenty of jobs—who hasn’t? But in a report to investors inconveniently released one day ahead of Sherman’s dispatch from the existential trenches, Goldman Sachs—which continues to enjoy bullish stock performance amid its profit setbacks—announced this bit of non-emasculating news:

From a financial markets perspective, the environment looks quite friendly. The combination of better growth news and easier monetary policy is always welcome. In addition, we recently argued that corporate profit margins may still have room for further gains, despite the fact that they already stand at record levels from both a bottom-up and top-down perspective.

But no such merely empirical considerations can hope to stand up against the wrath of a stable of mainly unnamed bankers! Why, just look at Goldman itself, where Sherman reports that “months before the Volcker rule is set to kick in, star traders began [sic] to leave in droves.” And Goldman has lately shuttered its proprietary hedge-fund shop—in recognition that the line of essentially free credit that the Fed has opened up to investment houses may at last be about to dry up.

This, too, might well be seen as a sign of comparative health in the broader economy—especially with Goldman itself sounding so bullish on the investment climate, with the dread implementation of the Volcker Rule a scant five months away. After all, easy credit is what creates unsustainable bubbles in the first place, as even the most cursory study of the 2008 debacle shows. But not so in Shermanland! Even breakaway hedge shops are booking fairly lackluster profits (despite the obscene tax advantages they continue to enjoy)—so you know: Panic, everybody! Only Sherman is even less clear in explicating just what the cause for alarm is supposed to be in this case—while banks' hedge-fund divisions are curtailed under the Volcker rule, hedge funds themselves need not tremble before its pending implementation. There’s the bad economy, yes—but it’s just as important, he insists, to note that the hedge sector is “as overbuilt as the housing and credit markets that drove its profits,” with the overall number of hedge funds exploding about 16-fold (610 to 9.553) from 1990 to 2011. One would assume that a slowdown in an oversupplied speculative sector is not, you know, a bad thing by itself, either—especially given that even the most diehard Randians would be hard-pressed to demonstrate that hedge funds create economic value of any kind. But Sherman nonetheless frets on behalf of hedge managers that “the easy obvious plays are oversubscribed, which shrinks margins.... Many have predicted a hedge-fund shakeout, and it seems to have started. Over 1,000 funds have closed in the last year and a half.” It’s evidently a taken-for-granted, second-nature kind of axiom in today’s American economy that an “industry” made up entirely of “easy obvious plays” is integral to our very survival.

Or at the very least, it’s a great enabling premise of lazy, overclass-osculating, dick-obsessed magazine journalism. Witness Sherman’s closing brief for the productive wonders worked by yon investment class:

It’s certainly true that Wall Street’s money played an important part in New York’s comeback, helping to transform the city from a symbol of urban decay into a gleaming leisure theme park. Consciously or not, as a city, New York made a bargain: It would tolerate the one percent’s excessive pay as long as the rising tax base funded the schools, subways, and parks for the 99 percent. “Without Wall Street, New York becomes Philadelphia” is how a friend of mine in finance explains it.

Well, Gabe, I have news for you and your friend in finance: For the vast majority of people living in the glorious and gleaming leisure theme park known as Michael Bloomberg’s New York, Philadelphia looks pretty goddamn inviting (and not just for delusional “sixth borough” hipsters). For one thing, the city’s schools have lately taken to looting state budget funds to make up for shortfalls; the city’s parks are already relying to a disproportionate degree on private donations to run themselves—except, of course, when the mayor wants to unleash city cops to displace and round up those irksome unproductive kids protesting wealth inequality. And do NOT get us started on the regressively funded, frequently inoperative subways, OK?

Then again, New York magazine is, God knows, a gleaming theme park all its own, and it’s perhaps best not to disturb the placid reveries of its well-appointed editorial brain trust. Yes, sustaining the enabling fictions of New York-style policy analysis does involve adducing sweeping assertions from the thinnest air: “The rising tide of the real-estate and credit markets lifted all boats,” Sherman burbles, apparently in reference to hedge funds, but a quick Google search for “Long Term Capital Management” will rapidly disabuse any civilian in the real economy of such a ludicrous notion. (And the ever-fallacious “rising tide” thesis is especially laughable when applied more broadly in today’s America.) Likewise, Sherman’s wind-up paragraph preposterously announces that “the strictures that are holding the banks back now are tighter than any since the thirties”—certainly news to any financial regulator of the mid-twentieth century, when off-shore mutual funds were heavily prosecuted and hedge funds were much more regulated (even without mandatory SEC registration); or to the economic policymakers of the Great Society era, who enforced corporate tax rates north of 40 percent, more than twice of today’s post-Dodd assessments. But why should we expect any other version of events from the hallowed precincts of Adam Moss’s TriBeCa wing of the great New York theme park? For as this week’s cover story plainly demonstrates, nothing can be considered real in this abject weekly’s pages unless it comes straight from the mouth of a banker.



Chris Lehmann is the co-editor of Bookforum and is the author of Rich People Things.

---

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]]> http://www.theawl.com/2012/02/dick-joke/feed 17 Bloomberg's Dumb Tactics Result in Occupation of Wall Street http://www.theawl.com/2011/11/bloombergs-tactics-result-in-occupation-of-wall-street http://www.theawl.com/2011/11/bloombergs-tactics-result-in-occupation-of-wall-street#comments Thu, 17 Nov 2011 09:00:27 +0000 Choire Sicha http://www.theawl.com/2011/11/bloombergs-tactics-result-in-occupation-of-wall-street So Mike Bloomberg's eviction of Occupy Wall Street has actually resulted in a large protest this morning that is actually occupying Wall Street. You just know there's a team of mayoral advisors, familiar with the First Amendment, who are sitting in an office right now with their arms crossed, being all "la la la, told you so." More good pics here. Arrests are already taking place.

Photo by CBC superfox David Common.

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]]> So Mike Bloomberg's eviction of Occupy Wall Street has actually resulted in a large protest this morning that is actually occupying Wall Street. You just know there's a team of mayoral advisors, familiar with the First Amendment, who are sitting in an office right now with their arms crossed, being all "la la la, told you so." More good pics here. Arrests are already taking place.

Photo by CBC superfox David Common.

---

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19 comments

]]> http://www.theawl.com/2011/11/bloombergs-tactics-result-in-occupation-of-wall-street/feed 19 A Report from the Occupation of Wall Street http://www.theawl.com/2011/09/a-report-from-the-occupation-of-wall-street http://www.theawl.com/2011/09/a-report-from-the-occupation-of-wall-street#comments Mon, 19 Sep 2011 13:45:49 +0000 Erica Sackin http://www.theawl.com/2011/09/a-report-from-the-occupation-of-wall-street Zuccotti Park is a well-manicured, block-long park in the heart of New York City’s financial district that, for the past two days, has been home to a few hundred squatters, anarchists, activists, students, a few drug addicts, several undercover cops and one lone man in a suit. Alternately calling themselves Occupy Wall Street or Take Wall Street or the 99%, they have set up camp, spending the night on rolls of cardboard, yoga mats and bare concrete, as a protest against the abuses carried out by various financial institutions and banks against the people of this country.

The protest, loosely organized by Adbusters and the internet activist group Anonymous—although as groups of non-hierarchical activists tend to do, many protesters claimed no group affiliation or leadership—began on Saturday. Give or take, 5000 protesters marched down into the financial district banging drums and carrying signs, chanting “Wall Street, Our Street!” The group then set up camp in Zuccotti Park—a compromise, according to one protester, between the NYPD, protesters, and private owners of the park, so that the group did not just set up camp in the middle of the actual Wall Street. They spent Saturday and Sunday night in the small square, feasting on donated peanut butter, salads and cheese. On Sunday night, supporters of the protesters ordered the group pizza—so much pizza that the nearby pizza shop announced it would have to stay open until 1 a.m. just to fulfill orders. On Monday morning the group marched down Wall Street proper, beating drums and blowing whistles, and broadcasting a live stream of the whole thing on their website.

And on Sunday afternoon, protesters gathered in small groups to scrawl slogans on spare pieces of cardboard. They lounged on benches and congregated around the mountain of cans of Skippy that dominated the free food table. A line of protesters stood silently holding signs at the front of the park, somewhat peacefully facing off a gathering of cops. There were a few police vans surrounding the park, as well as officers milling around, but they seemed, for the most part, content to watch—making sure no one was smashing the windows of Starbucks or setting anything on fire, but otherwise staying out of the way.


The group then held its “General Assembly,” the aggressively equitable open forum they use to make decisions. Five people with megaphones sat on a wall in front of the group, and encouraged the entire seated crowd to share ideas and contribute items to the agenda. The process was lengthy. It began with a review of the agenda, then suggestions for additional possible agenda items, with a chance for those who did not agree with the agenda items to dissent. Then it moved to discussion of the actual agenda items, and a conversation on whether items were to be decided by the entire group or moved to a smaller, subject-based work group that would bring their decision to the entire group, to then be further discussed. The process ensured that every single person had the chance to have their voice heard. It also meant that it took a very long time to get anything done.

“My neighbors are being pushed out of their homes through predatory lending and foreclosures, they’re having their heating and hot water being turned off, and my friends in college are so deep in student debt that they won’t pay it off for 20 years,” Justin told me. He is a fairly clean cut 25-year-old who had kicked off the megaphone portion of the day. He was monitoring the group’s food donation page on his iPad. “What we’re trying to do is trying to establish even more than we did yesterday, our encampment here, so we can achieve our ultimate goal, which is to occupy Wall Street and make our demands heard.”

Halfway through the General Assembly, a rowdy group of protesters, led by a man in tie-died spandex pants, approached the park. They were pounding drums, blowing whistles, and chanting “Wall Street, Our Street!” Their energy dissipated as they approached the more somber General Assembly, then in the process of discussing whether they should discuss a common name, if they should have a police liaison and how they could best formally recognize the disproportionate privilege of many of the protesters. Then a cry of “Welcome them!” came from the General Assembly, and the cheering, colorful band of marchers was added to the mix.

“Me personally—I don’t want to speak for everyone—but for me, it’s about getting money out of politics,” Benjamin Hitchock told me. He's an 18 year-year-old college student who had driven down from Maine for the weekend. “It’s about getting the influence of money out of democracy. Because democracy was not made to represent the distribution of dollars, it was made to represent the distribution of beliefs.”

They had all been spending the night in the park, without tents or shelter, some more comfortably than others. Flip, a 23-year-old Queens resident with an acoustic guitar, told me that he’d forgotten a blanket the night before, so had been cold, but that everyone else had helped him get through.

“I just feel like I need to be here, you know?” Flip said. “I feel like the world is becoming a different place. That’s how it works, I guess.”

Some came from far away—Robert, a 20-something self-described professional activist who was lounging on cardboard with his girlfriend Caitlin, had hitchhiked across the country from California just to be there.

“What we’d like to change is to at least draw more attention to and hopefully phase out the financial system’s involvement in the political system,” Robert told me. “It kind of diminishes the voting power of individual people, it limits your choice to two candidates that have already been vetted by large contributors.”

Robert Segal, who said he was a 47-year-old former Wall Street employee and definitely was the lone protester there in a suit and tie, concurred. “No corporation should take home a senator for their mantelpiece, and have a congressperson on either side. When you throw money at a candidate you’re essentially casting a vote. And people should vote. Corporations shouldn’t vote. That’s a starting point.”

“After 2008, I expected wow, people are actually going to gather and go 'what did you just do to us?'" he said. "'Why did you think you’re so vital, why don’t you take a hike? We don’t need you!' But instead there was a resounding amount of non-noise.”

The most eventful part of the day was when a Big Apple Tour Bus pulled up, and tourists began to excitedly snap photos of the protesters in the park. At one point, a protester donned a Guy Fawkes mask—the signature of many members of Anonymous. A police officer walked up to him and, quietly, asked him to remove the mask. Wearing masks in New York City was illegal, he explained, and if the protester continued to wear it the officer would end up having to arrest him.

“I’m honestly shocked that there aren’t more people from the right,” Robert the hitchhiker said. “I’m surprised there aren’t more people from other sides. This is being spun as a very left-leaning cause, but ending the financial system’s stranglehold on our democracy is something everyone can agree on. All over the country in the Midwest, in red states, good old boys alike.”

“I know I’m making a difference,” Benjamin said. “The people who come and see this and walk by and think about it, whether it be good or bad thoughts. Plus,” he said, “If I wasn’t here, I’d just be sitting in my dorm room doing homework.”

Erica Sackin is a reporterer.

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]]> Zuccotti Park is a well-manicured, block-long park in the heart of New York City’s financial district that, for the past two days, has been home to a few hundred squatters, anarchists, activists, students, a few drug addicts, several undercover cops and one lone man in a suit. Alternately calling themselves Occupy Wall Street or Take Wall Street or the 99%, they have set up camp, spending the night on rolls of cardboard, yoga mats and bare concrete, as a protest against the abuses carried out by various financial institutions and banks against the people of this country.

The protest, loosely organized by Adbusters and the internet activist group Anonymous—although as groups of non-hierarchical activists tend to do, many protesters claimed no group affiliation or leadership—began on Saturday. Give or take, 5000 protesters marched down into the financial district banging drums and carrying signs, chanting “Wall Street, Our Street!” The group then set up camp in Zuccotti Park—a compromise, according to one protester, between the NYPD, protesters, and private owners of the park, so that the group did not just set up camp in the middle of the actual Wall Street. They spent Saturday and Sunday night in the small square, feasting on donated peanut butter, salads and cheese. On Sunday night, supporters of the protesters ordered the group pizza—so much pizza that the nearby pizza shop announced it would have to stay open until 1 a.m. just to fulfill orders. On Monday morning the group marched down Wall Street proper, beating drums and blowing whistles, and broadcasting a live stream of the whole thing on their website.

And on Sunday afternoon, protesters gathered in small groups to scrawl slogans on spare pieces of cardboard. They lounged on benches and congregated around the mountain of cans of Skippy that dominated the free food table. A line of protesters stood silently holding signs at the front of the park, somewhat peacefully facing off a gathering of cops. There were a few police vans surrounding the park, as well as officers milling around, but they seemed, for the most part, content to watch—making sure no one was smashing the windows of Starbucks or setting anything on fire, but otherwise staying out of the way.


The group then held its “General Assembly,” the aggressively equitable open forum they use to make decisions. Five people with megaphones sat on a wall in front of the group, and encouraged the entire seated crowd to share ideas and contribute items to the agenda. The process was lengthy. It began with a review of the agenda, then suggestions for additional possible agenda items, with a chance for those who did not agree with the agenda items to dissent. Then it moved to discussion of the actual agenda items, and a conversation on whether items were to be decided by the entire group or moved to a smaller, subject-based work group that would bring their decision to the entire group, to then be further discussed. The process ensured that every single person had the chance to have their voice heard. It also meant that it took a very long time to get anything done.

“My neighbors are being pushed out of their homes through predatory lending and foreclosures, they’re having their heating and hot water being turned off, and my friends in college are so deep in student debt that they won’t pay it off for 20 years,” Justin told me. He is a fairly clean cut 25-year-old who had kicked off the megaphone portion of the day. He was monitoring the group’s food donation page on his iPad. “What we’re trying to do is trying to establish even more than we did yesterday, our encampment here, so we can achieve our ultimate goal, which is to occupy Wall Street and make our demands heard.”

Halfway through the General Assembly, a rowdy group of protesters, led by a man in tie-died spandex pants, approached the park. They were pounding drums, blowing whistles, and chanting “Wall Street, Our Street!” Their energy dissipated as they approached the more somber General Assembly, then in the process of discussing whether they should discuss a common name, if they should have a police liaison and how they could best formally recognize the disproportionate privilege of many of the protesters. Then a cry of “Welcome them!” came from the General Assembly, and the cheering, colorful band of marchers was added to the mix.

“Me personally—I don’t want to speak for everyone—but for me, it’s about getting money out of politics,” Benjamin Hitchock told me. He's an 18 year-year-old college student who had driven down from Maine for the weekend. “It’s about getting the influence of money out of democracy. Because democracy was not made to represent the distribution of dollars, it was made to represent the distribution of beliefs.”

They had all been spending the night in the park, without tents or shelter, some more comfortably than others. Flip, a 23-year-old Queens resident with an acoustic guitar, told me that he’d forgotten a blanket the night before, so had been cold, but that everyone else had helped him get through.

“I just feel like I need to be here, you know?” Flip said. “I feel like the world is becoming a different place. That’s how it works, I guess.”

Some came from far away—Robert, a 20-something self-described professional activist who was lounging on cardboard with his girlfriend Caitlin, had hitchhiked across the country from California just to be there.

“What we’d like to change is to at least draw more attention to and hopefully phase out the financial system’s involvement in the political system,” Robert told me. “It kind of diminishes the voting power of individual people, it limits your choice to two candidates that have already been vetted by large contributors.”

Robert Segal, who said he was a 47-year-old former Wall Street employee and definitely was the lone protester there in a suit and tie, concurred. “No corporation should take home a senator for their mantelpiece, and have a congressperson on either side. When you throw money at a candidate you’re essentially casting a vote. And people should vote. Corporations shouldn’t vote. That’s a starting point.”

“After 2008, I expected wow, people are actually going to gather and go 'what did you just do to us?'" he said. "'Why did you think you’re so vital, why don’t you take a hike? We don’t need you!' But instead there was a resounding amount of non-noise.”

The most eventful part of the day was when a Big Apple Tour Bus pulled up, and tourists began to excitedly snap photos of the protesters in the park. At one point, a protester donned a Guy Fawkes mask—the signature of many members of Anonymous. A police officer walked up to him and, quietly, asked him to remove the mask. Wearing masks in New York City was illegal, he explained, and if the protester continued to wear it the officer would end up having to arrest him.

“I’m honestly shocked that there aren’t more people from the right,” Robert the hitchhiker said. “I’m surprised there aren’t more people from other sides. This is being spun as a very left-leaning cause, but ending the financial system’s stranglehold on our democracy is something everyone can agree on. All over the country in the Midwest, in red states, good old boys alike.”

“I know I’m making a difference,” Benjamin said. “The people who come and see this and walk by and think about it, whether it be good or bad thoughts. Plus,” he said, “If I wasn’t here, I’d just be sitting in my dorm room doing homework.”

Erica Sackin is a reporterer.

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]]> http://www.theawl.com/2011/09/a-report-from-the-occupation-of-wall-street/feed 40 How Everyone Got Away With "Collective Embezzlement" http://www.theawl.com/2011/04/how-everyone-got-away-with-collective-embezzlement http://www.theawl.com/2011/04/how-everyone-got-away-with-collective-embezzlement#comments Thu, 14 Apr 2011 09:20:34 +0000 Choire Sicha http://www.theawl.com/2011/04/how-everyone-got-away-with-collective-embezzlement It's worth taking a long, slow read of this morning's Times story on lack of prosecution in general and particularly the lack of Justice Department civil or criminal cases regarding the "financial crisis." For one thing, there are at least two instances of someone directly lying to the reporters in the story (although it is unknown to us which of the parties giving conflicting accounts is lying). Elsewhere, people put the blame on regulatory inaction: "In 1995, bank regulators referred 1,837 cases to the Justice Department. In 2006, that number had fallen to 75. In the four subsequent years, a period encompassing the worst of the crisis, an average of only 72 a year have been referred for criminal prosecution." And here's a nice way to look at a flaw in the system, from a UC Irvine criminology professor: “When regulators don’t believe in regulation and don’t get what is going on at the companies they oversee, there can be no major white-collar crime prosecutions. If they don’t understand what we call collective embezzlement, where people are literally looting their own firms, then it’s impossible to bring cases.”

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]]> It's worth taking a long, slow read of this morning's Times story on lack of prosecution in general and particularly the lack of Justice Department civil or criminal cases regarding the "financial crisis." For one thing, there are at least two instances of someone directly lying to the reporters in the story (although it is unknown to us which of the parties giving conflicting accounts is lying). Elsewhere, people put the blame on regulatory inaction: "In 1995, bank regulators referred 1,837 cases to the Justice Department. In 2006, that number had fallen to 75. In the four subsequent years, a period encompassing the worst of the crisis, an average of only 72 a year have been referred for criminal prosecution." And here's a nice way to look at a flaw in the system, from a UC Irvine criminology professor: “When regulators don’t believe in regulation and don’t get what is going on at the companies they oversee, there can be no major white-collar crime prosecutions. If they don’t understand what we call collective embezzlement, where people are literally looting their own firms, then it’s impossible to bring cases.”

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]]> http://www.theawl.com/2011/04/how-everyone-got-away-with-collective-embezzlement/feed 4 When Alan Met Ayn: "Atlas Shrugged" And Our Tanked Economy http://www.theawl.com/2011/04/when-alan-met-ayn-atlas-shrugged-and-our-tanked-economy http://www.theawl.com/2011/04/when-alan-met-ayn-atlas-shrugged-and-our-tanked-economy#comments Tue, 12 Apr 2011 12:40:13 +0000 Maria Bustillos http://www.theawl.com/2011/04/when-alan-met-ayn-atlas-shrugged-and-our-tanked-economy That pill-popping, boy-crazy nincompoop Ayn Rand has got a lot to answer for. Indeed, it's not too much of a stretch to say that we owe at least part of the recent economic crisis to her and her philosophy of Objectivism, since former Fed chief Alan Greenspan was a lifelong disciple of both.

The two first met in the '50s. Back then, a gang of acolytes, calling themselves the Collective, used to gather at Rand's apartment on East 36th Street every Saturday night so they could tell each other how smart they all were. Along came Greenspan one evening, shy and somber.

It took a while for Greenspan and Rand to warm to one another. She nicknamed him "the undertaker," owing to his dark clothes and mournful air, and he, a self-avowed logical positivist, required a certain amount of wooing on the philosophical side. But in time he became fiercely devoted to Rand, one of her most trusted confidants; he taught her something of the economics she shoehorned into Atlas Shrugged. He wrote for The Objectivist magazine, and stayed a close friend until her death in 1982.

Though the schemes of both these idealists crashed mightily and catastrophically to earth, both steadfastly refused ever to regret or repudiate the follies of Objectivism. The shocking thing is that despite all the evidence—which could not possibly be more damning—many on Wall Street and on the right continue to insist that Ayn Rand is a genius and that Objectivism is the answer to all mankind's problems.

If that were so, doesn't it stand to reason that the top genius's own life would demonstrate at least a few of the benefits of being an Objectivist? Which, sadly, it really, really does not.

Greenspan's tenure of nearly two decades as the chairman of the Federal Reserve is the second longest in history. Shouldn't he have bestowed on a grateful public a legacy demonstrating the wisdom of Objectivist laissez-faire policies? We know how that turned out, too.

There's about to be a movie, ostensibly the first of a trilogy, of Atlas Shrugged, Rand's magnum opus. The trailer is absurd but mesmerizing, and it quickly gained over a million views on YouTube. Paul Johansson, an actor and neophyte director best known for his work on "One Tree Hill," seems to have done a fine job with a tiny budget of somewhere between $15 and $25 million; the production looks terrific, sparkling with evening gowns and champagne, like a hopped-up version of Dynasty (which, come to think of it, Atlas Shrugged really does kind of resemble.) "If you double-cross me, I will destroy you," the sleek blonde in the business suit informs her foe, with less conviction than an ordinary person would employ in ordering a salad. If the trailer is to be believed, this movie has a lot of campy pleasure in it. I kind of can't wait!

Atlas Shrugged is about the tender love of a beautiful girl for her railroad, and also for a heap of powerful, visionary men. Nietzsche meets Harlequin, basically. It is also intended as a manifesto and rallying-cry for Objectivism: an XXL-sized political pamphlet.

Okay, so what is Objectivism, exactly?

In 1959, Mike Wallace asked Rand to "capsulize" her philosophy, which she proceeded to do, in a Boris Badenov accent and a comically self-satisfied manner.

I am primarily the creator of a new code of morality which has so far been believed impossible, namely a morality not based on faith, not on arbitrary whim, not on emotion, not on arbitrary edict, mystical or social, but on reason; a morality that can be proved by means of logic which can be demonstrated to be true and necessary.

Now may I define what my morality is? [I guess.] Since man's mind is his basic means of survival [...] he has to hold reason as an absolute, by which I mean that he has to hold reason as his only guide to action, and that he must live by the independent judgment of his own mind; that his highest moral purpose is the achievement of his own happiness [...] that each man must live as an end in himself, and follow his own rational self-interest.

Mike Wallace could scarcely believe his ears. His pop-eyed astonishment is a big part of what made this interview such great television.

Nietzsche Was Her Homeboy
Rand's commitment to egoism as the basis for morality began as a reaction against the "collectivist" impulses she reckoned to be responsible for the collapse of Russia, where she was born in 1905. Her family's wealth had been grabbed in the Revolution, so it's no surprise that Rand would be anti-Communist. What is a surprise is that she would suppose as she did that the "altruistic" motives of Communism were to blame for everything that went wrong in her native country.

Objectivism is 100% pro-individualism and anti-altruism. Rand believed that altruism is literally wrong, that it weakens the all-important Individual and his chances of finding happiness. She took most of her shtick (enthronement of the Will, super-individualism, exaltation of "artists," atheism, the Übermensch who is superior to the regular kind, etc. etc.) straight from Nietzsche, although she later denied his influence, claiming only Aristotle (!) as a philosophical forebear. But according to Rand biographer Jennifer Burns (whose book Goddess of the Market: Ayn Randand the American Right is really good), Rand's early notebooks and journals all but feature little hearts drawn around Nietzsche's name: "Nietzsche and I think," "as Nietzsche says," and so on.

The possibility that the unfettered egoism of guys like Stalin was the main problem with the Russian government, rather than too much altruism, escaped Rand entirely. As someone whose family likewise hails from a Communist country, I find it bizarre that this was not obvious to her. When all the big houses, all the money and privileges in a society accrue to just one class of people, it is safe to conclude that those people are acting out of self-interest and not altruism or whatever other bogus virtues they are ascribing to themselves. Just watch who gets richer, if you want to know what the real motivation is. Not to put too fine a point on it, Stalin was probably about the greatest Objectivist who ever lived, with a few possible exceptions like Mao Tse-Tung, Hitler and Pol Pot.

After the 1929 crash, many in the West believed that some form of Communism was inevitable in the developed world. For a long time American (and Knifecrime Island) intellectuals generally believed that Stalin was a fine man who was just trying to do the best he could for his people; that enraged Rand, who'd arrived in the U.S. in 1926 and knew the score. It wasn't until the Non-Aggression Pact between Stalin and Hitler became public in 1939 that Americans really turned conclusively and permanently against Communism.

The Fountainhead, Rand's first real go at a manifesto, was published in 1943. Though reviews were mixed, the book was a runaway success both as a publishing phenomenon and as a calling card for Objectivism. A movie was made in 1949, directed by King Vidor and starring Patricia Neal and Gary Cooper. Rand was at the zenith of her success with the public, celebrated and admired in New York, Ginger Rogers and Ira Levin wrote her fan letters, and the Collective began to collect around her.

Atlas Heaves into View
Into this milieu came Greenspan, age 26, dragged along by his first wife, Joan Mitchell.

Although very young, Greenspan was already a successful economic analyst whose consulting firm, Townsend-Greenspan & Co., Inc., was paid hefty sums to figure out what the hell was being said in government reports and things. Unlike most of the other Collectivists, who were students, Greenspan had something concrete to contribute to Rand's work. She asked him all sorts of questions about the steel and railroad industries relating to her new novel. He, for his part, thought she was the smartest person ever, saying, "talking to Rand was like starting a game of chess thinking I was good, and suddenly finding myself in checkmate."

The Collective was convinced that all mankind would rush to become Objectivists the moment Rand's next novel was published. It was called Atlas Shrugged, and for once the words “eagerly awaited” were for real. A gap of 14 years separated the first blockbuster and the second. But there was an anger, contempt and malevolence toward the common man in the second book that had not been present in the first one. This time the reviews were scathing.

In Atlas Shrugged Rand creates a world where there are people who deserve to live because they are "intelligent" and "creative," and those who do not. The former set out to rid themselves of the latter. These "men of the mind," whom their author clearly worships, go "on strike" and refuse to be creative any more, which means that everybody else must perish. And because it's a work of fantasy entirely under Rand's control, they all go ahead and obediently perish. (IRL, people were not quite so obedient, as we shall see.)

For those who are inclined to find such ideas ludicrous, the book will fail, and utterly; its premises betray a bottomless ignorance of the deep interconnectedness of humankind, and the needs—economic, social, emotional, intellectual—of one human being for another. In the real world, someone is growing lettuce, someone else is writing a book or feeding a baby, yet another is designing the rails of a high-speed train. Someone else is teaching six-year-olds to read. All of us benefit from all of these activities—sometimes directly, sometimes indirectly. Each life can and does touch many thousands of others. The idea of the Nietszchean Superman who acts against his fellows (whom Rand called "the mob" and "looters" and whatnot) is consequently fatally flawed. Not even the Superest Superman can grow all his own food, make all his own paper, design and build his own cars and airplanes, etc. (Hadn't Rand ever read Robinson Crusoe?) Humanity is a collaborative project, as well as a project of individuals.

This is to say nothing of the flatness of the book's characters, its clanking exposition, its interminable speechifying or the woodenness of its dialogue. On the upside, there is a character named Francisco Domingo Carlos Andres Sebastian d'Anconia. Not even Baroness Orczy had that kind of nerve.

Atlas Shrugged burst onto the scene in 1957 and was promptly and categorically reviled from both right and left, as it has continued to be. It also sold like hotcakes, as it still does.

Whittaker Chambers's famous takedown of Atlas Shrugged, "Big Sister is Watching You" appeared in The National Review in December of 1957. Rand claimed never to have read it (mmmhmm) but refused to let anyone so much as mention Chambers in her presence.

He wrote, "Out of a lifetime of reading I can recall no other book in which a tone of overriding arrogance was so implacably sustained. Its shrillness is without reprieve. Its dogmatism is without appeal. In addition, the mind which finds this tone natural to it shares other characteristics of its type. 1) It consistently mistakes raw force for strength, and the rawer the force, the more reverent the posture of the mind before it. 2) It supposes itself to be the bringer of a final revelation."

This essay and its message stood between many on the far right and a potentially fervent embrace of Objectivism. After all, Chambers was the pumpkin-growing former Communist who became a bona fide ferreter-out of real live Communists In Our Midst, having been responsible for sending Alger Hiss to jail; and if there is anything a hard-right conservative used to love more than putting Communists in jail, it was a former lefty who'd come over to the other side, like Ronald Reagan. That is, after all, what they hope is going to happen to all the lefties.

Other reviews were not so much negative as incendiary. In Esquire, Gore Vidal wrote that Objectivism was "nearly perfect in its immorality." Time's reviewer asked, "Is it a novel? Is it a nightmare?"

So the loyal Alan Greenspan, then around thirty years old and already a big shot in financial circles, wrote to the New York Times to defend the book as follows: "'Atlas Shrugged' is a celebration of life and happiness. Justice is unrelenting. Creative individuals and undeviating purpose and rationality achieve joy and fulfillment. Parasites who persistently avoid either purpose or reason perish as they should."

Note how human fulfillment is distributed here in Randian terms, to the "deserving", whereas the "parasites" are going to go up in flames "as they should." It is a little chilling to hear a grown man say that sort of stuff, particularly a grown man who will come to have that much influence over the fortunes of so many.

Greed Is So, So Good
So why have so many loved (and still love) this book so very much?

In addition to praising people for being selfish and money-worshiping, Atlas Shrugged has a second rare virtue—a real one, this time—a genuine fascination with business. Few novels of the twentieth century provide a halfway credible or interesting take on business, largely because the arcane details that go into running one are hard to dramatize well. (There are exceptions, of course. James Clavell is great at this, and so is Eric Ambler. Best of all, maybe, is Nevil Shute, whose A Town Like Alice is the novel Ayn Rand or anyone else should have wished she could write. It has got business, suspense, romance, exoticism and adventure, and is a pure delight to read.)

Even today, financial and business types are drawn to Atlas Shrugged for its unusual preoccupation with industry and economics. Plus, it's not just that literature does not ordinarily occupy itself much with business; literary sophistication is not a prized quality on Wall Street or in business circles generally. Across the table from you, a VC or Wall Street guy will wax all lyrical about Atlas Shrugged and you'll say wow, you read novels? If you ask what other books they like, though, they might mention The Art of War, which has been a big deal with them since the '80s, or maybeThe Big Short, or a biography of Warren Buffett. (But not Griftopia! Heh.)

Then there's the matter of egoism, which is where the Libertarian or far-right angle comes in. Rand is all about the Self-Sufficiency. This is why there are no children in her books. In a Rand novel, no one ever helps anyone or even concerns himself much with anyone else. Pitilessness is the highest virtue there is, it signifies Will and Strength and stuff. The weak are "lice" and "parasites". Atlas Shrugged is almost a caricature of social Darwinism. Gore Vidal explained it this way: "She has a great attraction for simple people who are puzzled by organized society, who object to paying taxes, who dislike the welfare state, who feel guilt at the thought of the suffering of others but who would like to harden their hearts."

But the self-interest thing really has a nice ring to it, recalling as it does the elegance of Satanism's single commandment: "Do as thou wilt shall be the whole of the law." Rand's books have sold nonstop from the moment they were published because people love hearing how not only can they get away with being totally selfish, it's absolutely the right way to be. The best way to be, as in, morally the best. EST and the Prosperity Gospel have much the same appeal. And sure, that all sounds fine when you are home reading a book, by yourself, but just go out there and try it. As Rand herself did.

Love Is An Objectivism Battlefield
1968 was the year of doom for the Objectivist cult's first wave. Rand had been having an on-again, off-again affair for over a decade with her prime minister and heir, the handsome wacko Nathaniel Branden (born Nathan Blumenthal), 25 years her junior.

Both of them were married when the affair began—he, 24; she, 49—but they rounded up the spouses and talked all four together about how Branden and Rand were going to be lovers, because, yeah, that always works out so well.

Fourteen years into the affair and Branden, now 38, was done with the whole thing. But every time he tried to break up with Rand, she would fly into torrents of rage and yell at him that he had "no right to sex with some inferior woman!" "The man to whom I dedicated Atlas Shrugged would never want anything less than me!" she shrieked. This went on for ages.

Meanwhile, Rand's husband, Frank O'Connor, was off drinking himself into a stupor, and Branden's wife Barbara was slowly losing what was left of her marbles.

Finally, unable to put up with any more scenes, Branden informed Rand by letter that their age difference "now made sex with her impossible" for him. She was devastated. But there was worse to come, because Branden had decided not to mention a secret affair he was having with one of his students, a beautiful young model named Patrecia Gullison. Because even though Branden was an Objectivist expressing his Highest Moral Purpose by Achieving his Own Happiness and all, he was also terrified of what would happen when Rand found out about it.

And for very good reason. When Rand did find out about it, she hit the ceiling and summoned Branden to her apartment and fired him and called the spouses in for another group powwow and screamed and slapped Branden's face multiple times, in the foyer, because she wouldn't let him in the living room. This, even though Branden had been Mr. Objectivism for years and years, and the Nathaniel Branden Institute had grown into a huge organization for the spread of Objectivism.

Reason, you would think, demanded restraint, and Rand had for decades styled herself the high priestess of Reason. There were relationships, reputations and institutions to protect on all sides, a thriving business, as well as the propagation of a mankind-saving philosophy to see to.

So what! She was a woman scorned.

Which meant that no sensible, rational considerations prevented Rand from publishing a letter addressed "To Whom It May Concern" in The Objectivist that accused Branden and his wife of deception, and (falsely, it appears) of financial hi-jinks—and of generally being bad Objectivists. "I repudiate both of them, totally and permanently," she wrote, "as spokesmen for me or Objectivism." A few prominent Objectivists signed this incoherent breakup letter along with Rand, among them—yes!—Alan Greenspan, the future Fed chairman.

The scandal caused lasting damage to Rand's reputation, and to her organization. Nathaniel Branden would eventually move to California, found new organizations and therapeutic practices, and marry three times more; the beautiful Patrecia, sadly, drowned in a swimming pool after suffering an epileptic seizure in 1977. (Branden's memoir My Years with Ayn Rand is hot as a pistol, absolutely riveting and danged scary, btw.)

Greenspan Frees The Market
Although the Collective never really recovered from the events of 1968, Alan Greenspan never broke with Ayn Rand. In his 2008 memoir, The Age of Turbulence, he writes, "[o]f all my teachers, Arthur Burns and Ayn Rand had the greatest impact on my life... Ayn Rand expanded my intellectual horizons, challenging me to look beyond economics to understand the behavior of individuals and societies." He speaks warmly of her throughout the book, even knowing all that he did about her skeleton-packed closet; his loyalty elicits both sympathy and exasperation.

In his own way, Greenspan had inherited in toto Rand's short-sightedness, egocentrism and complete lack of understanding of "the behavior of individuals and societies." Though he would play his delusions out in a very different arena and not, so far as is generally known, be going around slapping anybody in the foyer. His big scene would come forty years later, in a Congressional hearing room.

Greenspan was no mere theorist when it came to Objectivism and was, in time, in a position to put its theories into practice on a massive scale. He believed fervently that business should not be regulated by us parasitic consumers, and had written to that effect from the '60s onward. In 1987, he became Fed Chairman, succeeding the towering (and wholly unobjectivist) Paul Volcker. The results of his Objectivist convictions, made manifest in that role, were far-reaching. It has been argued in many quarters that Greenspan's rock-ribbed laissez-faire policies resulted in a succession of bubbles—first in the dot-com boom, then in real estate and credit—that led directly to the 2008 crisis.

Part of the blame lies in his attitude toward derivatives. The efforts of the CFTC's Brooksley Born to compel the regulation of derivatives trading began in 1994, but came to nothing owing largely to Greenspan's objections. After the Enron debacle, which, thanks to "the smartest guys in the room," left California holding the bag on about $9 billion of natural gas bills, Senator Diane Feinstein made herself very busy pestering Greenspan about the need to regulate derivatives. In 2004, Alan shrugged: he wrote to Congress in response to Senator Feinstein in what had by then become the signature Greenspan style of floaty, oracular, narcoleptic polysyllables:

Businesses, financial institutions, and investors throughout the economy rely upon derivatives to protect themselves from market volatility triggered by unexpected economic events. This ability to manage risks makes the economy more resilient and its importance cannot be underestimated. In our judgment, the ability of private counterparty surveillance to effectively regulate these markets can be undermined by inappropriate extensions of government regulations.

If the Enron disaster had not already made the hollowness of this argument horribly apparent, the financial crisis four years later could leave no doubt. And so it was that in October 2008, the mother of all Objectivist reckonings came to pass: The Span had to defend his disastrous policies to Congress one Thursday afternoon and explain why the U.S. economy, for decades under his stewardship, had gone kablooey. Here is what he said to that mob of furious congressmen who made up the House Committee on Oversight and Government Reform.

"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms [...]

"Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief."

Never mind that for years Greenspan had had a bunch of regulators and congressmen all but coming after him with baseball bats trying to get him to see that "the self-interest of lending institutions" was no match for the greed of unscrupulous individuals.

For Communist "altruism," read "SEC regulation." For Stalin, read Lloyd Blankfein et so many al. Just follow the money. How much does it cost such guys to pay lip service to the glories of the free market, Communism, whatever, while they grab everything that isn't nailed down for themselves? Not too much, if all you care about is your own, um. Individualism.

“You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others,” said Representative Henry A. Waxman of California, chairman of the committee. “Do you feel that your ideology pushed you to make decisions that you wish you had not made?”

Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.”

He found a flaw! I bet Diane Feinstein popped an aneurysm right then and there.

If Alan Greenspan had had a lick of sense he would have known that the jig was up and it was time for him to say, Ayn Rand was the biggest dope on record, except for me, because I listened to her. But guys like Greenspan don't ever seem to say that sort of thing. I suspect that it's because they have gotten so completely used to thinking of themselves as the "elite" who needn't reckon with the "weak" objections of lesser men.

So Greenspan maintained his convictions to the last. Even in 2008 with the shit engulfing the fan, he was still trying to prevent more stringent securities regulation. Why?

"Whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets,” he said. “Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime."

Using the exact same reasoning he'd just admitted to be erroneous, he was still claiming that the market would take care of itself. He found a flaw and then he lost it again pretty much instantly. The remains of the market are sitting right in front of him in a smoking ruin and what is his prescription? More of the same!

And what is the result, three years later? The markets in unregulated derivatives, Warren Buffett's "financial weapons of mass destruction," were never outlawed and are alive and well. Nobody went to jail or even really had his hand slapped, except for Bernie Madoff. Nearly all the destructive forces Greenspan set in motion came roaring right back, along with Wall Street bonuses, despite his claims of the enormous restraint certain to follow the debacle of 2008, for "an indefinite future" that didn't last for even one year.

So here we return to the "looters" who don't create anything, and the policy of cherchez l'argent. Greenspan and all these free marketers and bankers and Wall Street guys who generally just love Ayn Rand, self-sufficiency and individualism, and so they would never see themselves as the looters. But the question is just so there, because while the financial services sector provides some valuable services to a society, it is very questionable indeed whether those services are worth 12% of GDP, which is, by the way, about what we're all paying now, or roughly triple what they used to cost before the publication of Atlas Shrugged.

The real parasites, it turns out, are not the looting masses but the Objectivist elites (what is it that these hedge fund managers "create" again?), rabidly pursuing their own "happiness" at the cost of our social safety net, our environment and the prosperity and well-being of the world's people. So much for the triumph of individualism.



Maria Bustillos is the author of Dorkismo and Act Like A Gentleman, Think Like A Woman.

Alan Greenspan's Federal Reserve portrait and photo of Greenspan testifying before Congress both via Wikimedia commons.

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]]> That pill-popping, boy-crazy nincompoop Ayn Rand has got a lot to answer for. Indeed, it's not too much of a stretch to say that we owe at least part of the recent economic crisis to her and her philosophy of Objectivism, since former Fed chief Alan Greenspan was a lifelong disciple of both.

The two first met in the '50s. Back then, a gang of acolytes, calling themselves the Collective, used to gather at Rand's apartment on East 36th Street every Saturday night so they could tell each other how smart they all were. Along came Greenspan one evening, shy and somber.

It took a while for Greenspan and Rand to warm to one another. She nicknamed him "the undertaker," owing to his dark clothes and mournful air, and he, a self-avowed logical positivist, required a certain amount of wooing on the philosophical side. But in time he became fiercely devoted to Rand, one of her most trusted confidants; he taught her something of the economics she shoehorned into Atlas Shrugged. He wrote for The Objectivist magazine, and stayed a close friend until her death in 1982.

Though the schemes of both these idealists crashed mightily and catastrophically to earth, both steadfastly refused ever to regret or repudiate the follies of Objectivism. The shocking thing is that despite all the evidence—which could not possibly be more damning—many on Wall Street and on the right continue to insist that Ayn Rand is a genius and that Objectivism is the answer to all mankind's problems.

If that were so, doesn't it stand to reason that the top genius's own life would demonstrate at least a few of the benefits of being an Objectivist? Which, sadly, it really, really does not.

Greenspan's tenure of nearly two decades as the chairman of the Federal Reserve is the second longest in history. Shouldn't he have bestowed on a grateful public a legacy demonstrating the wisdom of Objectivist laissez-faire policies? We know how that turned out, too.

There's about to be a movie, ostensibly the first of a trilogy, of Atlas Shrugged, Rand's magnum opus. The trailer is absurd but mesmerizing, and it quickly gained over a million views on YouTube. Paul Johansson, an actor and neophyte director best known for his work on "One Tree Hill," seems to have done a fine job with a tiny budget of somewhere between $15 and $25 million; the production looks terrific, sparkling with evening gowns and champagne, like a hopped-up version of Dynasty (which, come to think of it, Atlas Shrugged really does kind of resemble.) "If you double-cross me, I will destroy you," the sleek blonde in the business suit informs her foe, with less conviction than an ordinary person would employ in ordering a salad. If the trailer is to be believed, this movie has a lot of campy pleasure in it. I kind of can't wait!

Atlas Shrugged is about the tender love of a beautiful girl for her railroad, and also for a heap of powerful, visionary men. Nietzsche meets Harlequin, basically. It is also intended as a manifesto and rallying-cry for Objectivism: an XXL-sized political pamphlet.

Okay, so what is Objectivism, exactly?

In 1959, Mike Wallace asked Rand to "capsulize" her philosophy, which she proceeded to do, in a Boris Badenov accent and a comically self-satisfied manner.

I am primarily the creator of a new code of morality which has so far been believed impossible, namely a morality not based on faith, not on arbitrary whim, not on emotion, not on arbitrary edict, mystical or social, but on reason; a morality that can be proved by means of logic which can be demonstrated to be true and necessary.

Now may I define what my morality is? [I guess.] Since man's mind is his basic means of survival [...] he has to hold reason as an absolute, by which I mean that he has to hold reason as his only guide to action, and that he must live by the independent judgment of his own mind; that his highest moral purpose is the achievement of his own happiness [...] that each man must live as an end in himself, and follow his own rational self-interest.

Mike Wallace could scarcely believe his ears. His pop-eyed astonishment is a big part of what made this interview such great television.

Nietzsche Was Her Homeboy
Rand's commitment to egoism as the basis for morality began as a reaction against the "collectivist" impulses she reckoned to be responsible for the collapse of Russia, where she was born in 1905. Her family's wealth had been grabbed in the Revolution, so it's no surprise that Rand would be anti-Communist. What is a surprise is that she would suppose as she did that the "altruistic" motives of Communism were to blame for everything that went wrong in her native country.

Objectivism is 100% pro-individualism and anti-altruism. Rand believed that altruism is literally wrong, that it weakens the all-important Individual and his chances of finding happiness. She took most of her shtick (enthronement of the Will, super-individualism, exaltation of "artists," atheism, the Übermensch who is superior to the regular kind, etc. etc.) straight from Nietzsche, although she later denied his influence, claiming only Aristotle (!) as a philosophical forebear. But according to Rand biographer Jennifer Burns (whose book Goddess of the Market: Ayn Randand the American Right is really good), Rand's early notebooks and journals all but feature little hearts drawn around Nietzsche's name: "Nietzsche and I think," "as Nietzsche says," and so on.

The possibility that the unfettered egoism of guys like Stalin was the main problem with the Russian government, rather than too much altruism, escaped Rand entirely. As someone whose family likewise hails from a Communist country, I find it bizarre that this was not obvious to her. When all the big houses, all the money and privileges in a society accrue to just one class of people, it is safe to conclude that those people are acting out of self-interest and not altruism or whatever other bogus virtues they are ascribing to themselves. Just watch who gets richer, if you want to know what the real motivation is. Not to put too fine a point on it, Stalin was probably about the greatest Objectivist who ever lived, with a few possible exceptions like Mao Tse-Tung, Hitler and Pol Pot.

After the 1929 crash, many in the West believed that some form of Communism was inevitable in the developed world. For a long time American (and Knifecrime Island) intellectuals generally believed that Stalin was a fine man who was just trying to do the best he could for his people; that enraged Rand, who'd arrived in the U.S. in 1926 and knew the score. It wasn't until the Non-Aggression Pact between Stalin and Hitler became public in 1939 that Americans really turned conclusively and permanently against Communism.

The Fountainhead, Rand's first real go at a manifesto, was published in 1943. Though reviews were mixed, the book was a runaway success both as a publishing phenomenon and as a calling card for Objectivism. A movie was made in 1949, directed by King Vidor and starring Patricia Neal and Gary Cooper. Rand was at the zenith of her success with the public, celebrated and admired in New York, Ginger Rogers and Ira Levin wrote her fan letters, and the Collective began to collect around her.

Atlas Heaves into View
Into this milieu came Greenspan, age 26, dragged along by his first wife, Joan Mitchell.

Although very young, Greenspan was already a successful economic analyst whose consulting firm, Townsend-Greenspan & Co., Inc., was paid hefty sums to figure out what the hell was being said in government reports and things. Unlike most of the other Collectivists, who were students, Greenspan had something concrete to contribute to Rand's work. She asked him all sorts of questions about the steel and railroad industries relating to her new novel. He, for his part, thought she was the smartest person ever, saying, "talking to Rand was like starting a game of chess thinking I was good, and suddenly finding myself in checkmate."

The Collective was convinced that all mankind would rush to become Objectivists the moment Rand's next novel was published. It was called Atlas Shrugged, and for once the words “eagerly awaited” were for real. A gap of 14 years separated the first blockbuster and the second. But there was an anger, contempt and malevolence toward the common man in the second book that had not been present in the first one. This time the reviews were scathing.

In Atlas Shrugged Rand creates a world where there are people who deserve to live because they are "intelligent" and "creative," and those who do not. The former set out to rid themselves of the latter. These "men of the mind," whom their author clearly worships, go "on strike" and refuse to be creative any more, which means that everybody else must perish. And because it's a work of fantasy entirely under Rand's control, they all go ahead and obediently perish. (IRL, people were not quite so obedient, as we shall see.)

For those who are inclined to find such ideas ludicrous, the book will fail, and utterly; its premises betray a bottomless ignorance of the deep interconnectedness of humankind, and the needs—economic, social, emotional, intellectual—of one human being for another. In the real world, someone is growing lettuce, someone else is writing a book or feeding a baby, yet another is designing the rails of a high-speed train. Someone else is teaching six-year-olds to read. All of us benefit from all of these activities—sometimes directly, sometimes indirectly. Each life can and does touch many thousands of others. The idea of the Nietszchean Superman who acts against his fellows (whom Rand called "the mob" and "looters" and whatnot) is consequently fatally flawed. Not even the Superest Superman can grow all his own food, make all his own paper, design and build his own cars and airplanes, etc. (Hadn't Rand ever read Robinson Crusoe?) Humanity is a collaborative project, as well as a project of individuals.

This is to say nothing of the flatness of the book's characters, its clanking exposition, its interminable speechifying or the woodenness of its dialogue. On the upside, there is a character named Francisco Domingo Carlos Andres Sebastian d'Anconia. Not even Baroness Orczy had that kind of nerve.

Atlas Shrugged burst onto the scene in 1957 and was promptly and categorically reviled from both right and left, as it has continued to be. It also sold like hotcakes, as it still does.

Whittaker Chambers's famous takedown of Atlas Shrugged, "Big Sister is Watching You" appeared in The National Review in December of 1957. Rand claimed never to have read it (mmmhmm) but refused to let anyone so much as mention Chambers in her presence.

He wrote, "Out of a lifetime of reading I can recall no other book in which a tone of overriding arrogance was so implacably sustained. Its shrillness is without reprieve. Its dogmatism is without appeal. In addition, the mind which finds this tone natural to it shares other characteristics of its type. 1) It consistently mistakes raw force for strength, and the rawer the force, the more reverent the posture of the mind before it. 2) It supposes itself to be the bringer of a final revelation."

This essay and its message stood between many on the far right and a potentially fervent embrace of Objectivism. After all, Chambers was the pumpkin-growing former Communist who became a bona fide ferreter-out of real live Communists In Our Midst, having been responsible for sending Alger Hiss to jail; and if there is anything a hard-right conservative used to love more than putting Communists in jail, it was a former lefty who'd come over to the other side, like Ronald Reagan. That is, after all, what they hope is going to happen to all the lefties.

Other reviews were not so much negative as incendiary. In Esquire, Gore Vidal wrote that Objectivism was "nearly perfect in its immorality." Time's reviewer asked, "Is it a novel? Is it a nightmare?"

So the loyal Alan Greenspan, then around thirty years old and already a big shot in financial circles, wrote to the New York Times to defend the book as follows: "'Atlas Shrugged' is a celebration of life and happiness. Justice is unrelenting. Creative individuals and undeviating purpose and rationality achieve joy and fulfillment. Parasites who persistently avoid either purpose or reason perish as they should."

Note how human fulfillment is distributed here in Randian terms, to the "deserving", whereas the "parasites" are going to go up in flames "as they should." It is a little chilling to hear a grown man say that sort of stuff, particularly a grown man who will come to have that much influence over the fortunes of so many.

Greed Is So, So Good
So why have so many loved (and still love) this book so very much?

In addition to praising people for being selfish and money-worshiping, Atlas Shrugged has a second rare virtue—a real one, this time—a genuine fascination with business. Few novels of the twentieth century provide a halfway credible or interesting take on business, largely because the arcane details that go into running one are hard to dramatize well. (There are exceptions, of course. James Clavell is great at this, and so is Eric Ambler. Best of all, maybe, is Nevil Shute, whose A Town Like Alice is the novel Ayn Rand or anyone else should have wished she could write. It has got business, suspense, romance, exoticism and adventure, and is a pure delight to read.)

Even today, financial and business types are drawn to Atlas Shrugged for its unusual preoccupation with industry and economics. Plus, it's not just that literature does not ordinarily occupy itself much with business; literary sophistication is not a prized quality on Wall Street or in business circles generally. Across the table from you, a VC or Wall Street guy will wax all lyrical about Atlas Shrugged and you'll say wow, you read novels? If you ask what other books they like, though, they might mention The Art of War, which has been a big deal with them since the '80s, or maybeThe Big Short, or a biography of Warren Buffett. (But not Griftopia! Heh.)

Then there's the matter of egoism, which is where the Libertarian or far-right angle comes in. Rand is all about the Self-Sufficiency. This is why there are no children in her books. In a Rand novel, no one ever helps anyone or even concerns himself much with anyone else. Pitilessness is the highest virtue there is, it signifies Will and Strength and stuff. The weak are "lice" and "parasites". Atlas Shrugged is almost a caricature of social Darwinism. Gore Vidal explained it this way: "She has a great attraction for simple people who are puzzled by organized society, who object to paying taxes, who dislike the welfare state, who feel guilt at the thought of the suffering of others but who would like to harden their hearts."

But the self-interest thing really has a nice ring to it, recalling as it does the elegance of Satanism's single commandment: "Do as thou wilt shall be the whole of the law." Rand's books have sold nonstop from the moment they were published because people love hearing how not only can they get away with being totally selfish, it's absolutely the right way to be. The best way to be, as in, morally the best. EST and the Prosperity Gospel have much the same appeal. And sure, that all sounds fine when you are home reading a book, by yourself, but just go out there and try it. As Rand herself did.

Love Is An Objectivism Battlefield
1968 was the year of doom for the Objectivist cult's first wave. Rand had been having an on-again, off-again affair for over a decade with her prime minister and heir, the handsome wacko Nathaniel Branden (born Nathan Blumenthal), 25 years her junior.

Both of them were married when the affair began—he, 24; she, 49—but they rounded up the spouses and talked all four together about how Branden and Rand were going to be lovers, because, yeah, that always works out so well.

Fourteen years into the affair and Branden, now 38, was done with the whole thing. But every time he tried to break up with Rand, she would fly into torrents of rage and yell at him that he had "no right to sex with some inferior woman!" "The man to whom I dedicated Atlas Shrugged would never want anything less than me!" she shrieked. This went on for ages.

Meanwhile, Rand's husband, Frank O'Connor, was off drinking himself into a stupor, and Branden's wife Barbara was slowly losing what was left of her marbles.

Finally, unable to put up with any more scenes, Branden informed Rand by letter that their age difference "now made sex with her impossible" for him. She was devastated. But there was worse to come, because Branden had decided not to mention a secret affair he was having with one of his students, a beautiful young model named Patrecia Gullison. Because even though Branden was an Objectivist expressing his Highest Moral Purpose by Achieving his Own Happiness and all, he was also terrified of what would happen when Rand found out about it.

And for very good reason. When Rand did find out about it, she hit the ceiling and summoned Branden to her apartment and fired him and called the spouses in for another group powwow and screamed and slapped Branden's face multiple times, in the foyer, because she wouldn't let him in the living room. This, even though Branden had been Mr. Objectivism for years and years, and the Nathaniel Branden Institute had grown into a huge organization for the spread of Objectivism.

Reason, you would think, demanded restraint, and Rand had for decades styled herself the high priestess of Reason. There were relationships, reputations and institutions to protect on all sides, a thriving business, as well as the propagation of a mankind-saving philosophy to see to.

So what! She was a woman scorned.

Which meant that no sensible, rational considerations prevented Rand from publishing a letter addressed "To Whom It May Concern" in The Objectivist that accused Branden and his wife of deception, and (falsely, it appears) of financial hi-jinks—and of generally being bad Objectivists. "I repudiate both of them, totally and permanently," she wrote, "as spokesmen for me or Objectivism." A few prominent Objectivists signed this incoherent breakup letter along with Rand, among them—yes!—Alan Greenspan, the future Fed chairman.

The scandal caused lasting damage to Rand's reputation, and to her organization. Nathaniel Branden would eventually move to California, found new organizations and therapeutic practices, and marry three times more; the beautiful Patrecia, sadly, drowned in a swimming pool after suffering an epileptic seizure in 1977. (Branden's memoir My Years with Ayn Rand is hot as a pistol, absolutely riveting and danged scary, btw.)

Greenspan Frees The Market
Although the Collective never really recovered from the events of 1968, Alan Greenspan never broke with Ayn Rand. In his 2008 memoir, The Age of Turbulence, he writes, "[o]f all my teachers, Arthur Burns and Ayn Rand had the greatest impact on my life... Ayn Rand expanded my intellectual horizons, challenging me to look beyond economics to understand the behavior of individuals and societies." He speaks warmly of her throughout the book, even knowing all that he did about her skeleton-packed closet; his loyalty elicits both sympathy and exasperation.

In his own way, Greenspan had inherited in toto Rand's short-sightedness, egocentrism and complete lack of understanding of "the behavior of individuals and societies." Though he would play his delusions out in a very different arena and not, so far as is generally known, be going around slapping anybody in the foyer. His big scene would come forty years later, in a Congressional hearing room.

Greenspan was no mere theorist when it came to Objectivism and was, in time, in a position to put its theories into practice on a massive scale. He believed fervently that business should not be regulated by us parasitic consumers, and had written to that effect from the '60s onward. In 1987, he became Fed Chairman, succeeding the towering (and wholly unobjectivist) Paul Volcker. The results of his Objectivist convictions, made manifest in that role, were far-reaching. It has been argued in many quarters that Greenspan's rock-ribbed laissez-faire policies resulted in a succession of bubbles—first in the dot-com boom, then in real estate and credit—that led directly to the 2008 crisis.

Part of the blame lies in his attitude toward derivatives. The efforts of the CFTC's Brooksley Born to compel the regulation of derivatives trading began in 1994, but came to nothing owing largely to Greenspan's objections. After the Enron debacle, which, thanks to "the smartest guys in the room," left California holding the bag on about $9 billion of natural gas bills, Senator Diane Feinstein made herself very busy pestering Greenspan about the need to regulate derivatives. In 2004, Alan shrugged: he wrote to Congress in response to Senator Feinstein in what had by then become the signature Greenspan style of floaty, oracular, narcoleptic polysyllables:

Businesses, financial institutions, and investors throughout the economy rely upon derivatives to protect themselves from market volatility triggered by unexpected economic events. This ability to manage risks makes the economy more resilient and its importance cannot be underestimated. In our judgment, the ability of private counterparty surveillance to effectively regulate these markets can be undermined by inappropriate extensions of government regulations.

If the Enron disaster had not already made the hollowness of this argument horribly apparent, the financial crisis four years later could leave no doubt. And so it was that in October 2008, the mother of all Objectivist reckonings came to pass: The Span had to defend his disastrous policies to Congress one Thursday afternoon and explain why the U.S. economy, for decades under his stewardship, had gone kablooey. Here is what he said to that mob of furious congressmen who made up the House Committee on Oversight and Government Reform.

"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms [...]

"Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief."

Never mind that for years Greenspan had had a bunch of regulators and congressmen all but coming after him with baseball bats trying to get him to see that "the self-interest of lending institutions" was no match for the greed of unscrupulous individuals.

For Communist "altruism," read "SEC regulation." For Stalin, read Lloyd Blankfein et so many al. Just follow the money. How much does it cost such guys to pay lip service to the glories of the free market, Communism, whatever, while they grab everything that isn't nailed down for themselves? Not too much, if all you care about is your own, um. Individualism.

“You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others,” said Representative Henry A. Waxman of California, chairman of the committee. “Do you feel that your ideology pushed you to make decisions that you wish you had not made?”

Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.”

He found a flaw! I bet Diane Feinstein popped an aneurysm right then and there.

If Alan Greenspan had had a lick of sense he would have known that the jig was up and it was time for him to say, Ayn Rand was the biggest dope on record, except for me, because I listened to her. But guys like Greenspan don't ever seem to say that sort of thing. I suspect that it's because they have gotten so completely used to thinking of themselves as the "elite" who needn't reckon with the "weak" objections of lesser men.

So Greenspan maintained his convictions to the last. Even in 2008 with the shit engulfing the fan, he was still trying to prevent more stringent securities regulation. Why?

"Whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets,” he said. “Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime."

Using the exact same reasoning he'd just admitted to be erroneous, he was still claiming that the market would take care of itself. He found a flaw and then he lost it again pretty much instantly. The remains of the market are sitting right in front of him in a smoking ruin and what is his prescription? More of the same!

And what is the result, three years later? The markets in unregulated derivatives, Warren Buffett's "financial weapons of mass destruction," were never outlawed and are alive and well. Nobody went to jail or even really had his hand slapped, except for Bernie Madoff. Nearly all the destructive forces Greenspan set in motion came roaring right back, along with Wall Street bonuses, despite his claims of the enormous restraint certain to follow the debacle of 2008, for "an indefinite future" that didn't last for even one year.

So here we return to the "looters" who don't create anything, and the policy of cherchez l'argent. Greenspan and all these free marketers and bankers and Wall Street guys who generally just love Ayn Rand, self-sufficiency and individualism, and so they would never see themselves as the looters. But the question is just so there, because while the financial services sector provides some valuable services to a society, it is very questionable indeed whether those services are worth 12% of GDP, which is, by the way, about what we're all paying now, or roughly triple what they used to cost before the publication of Atlas Shrugged.

The real parasites, it turns out, are not the looting masses but the Objectivist elites (what is it that these hedge fund managers "create" again?), rabidly pursuing their own "happiness" at the cost of our social safety net, our environment and the prosperity and well-being of the world's people. So much for the triumph of individualism.



Maria Bustillos is the author of Dorkismo and Act Like A Gentleman, Think Like A Woman.

Alan Greenspan's Federal Reserve portrait and photo of Greenspan testifying before Congress both via Wikimedia commons.

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]]> http://www.theawl.com/2011/04/when-alan-met-ayn-atlas-shrugged-and-our-tanked-economy/feed 145 A Useful Look at the Current Wall Street Mindset http://www.theawl.com/2011/04/a-useful-look-at-the-current-wall-street-mindset http://www.theawl.com/2011/04/a-useful-look-at-the-current-wall-street-mindset#comments Mon, 11 Apr 2011 10:06:05 +0000 Choire Sicha http://www.theawl.com/2011/04/a-useful-look-at-the-current-wall-street-mindset I can summarize the well-informed tripartite New York magazine cover story on Wall Street, while eliding all the details: pretty much no one learned anything, rich people really enjoying spending money, it's not unlikely there'll be a round two mortgage debacle, Wall Street is more consolidated than ever and poses a "greater systemic risk," we're off to enjoy/exploit the BRICs (and CIVETs and EAGLEs, et al), even though Goldman Sachs, among others, took a bath on them over the last few years, slightly fewer Harvard MBA graduates are going straight into Big Finance (they're all becoming consultants, which, same diff!), and lots of people on Wall Street are irritated at the negative attention and don't understand why they can't just keep on rollin'. Also you probably shouldn't trust them with your retirement money, still. Surprise!

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]]> I can summarize the well-informed tripartite New York magazine cover story on Wall Street, while eliding all the details: pretty much no one learned anything, rich people really enjoying spending money, it's not unlikely there'll be a round two mortgage debacle, Wall Street is more consolidated than ever and poses a "greater systemic risk," we're off to enjoy/exploit the BRICs (and CIVETs and EAGLEs, et al), even though Goldman Sachs, among others, took a bath on them over the last few years, slightly fewer Harvard MBA graduates are going straight into Big Finance (they're all becoming consultants, which, same diff!), and lots of people on Wall Street are irritated at the negative attention and don't understand why they can't just keep on rollin'. Also you probably shouldn't trust them with your retirement money, still. Surprise!

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]]> http://www.theawl.com/2011/04/a-useful-look-at-the-current-wall-street-mindset/feed 9 Lil Wayne Is Free And Wall Street's Back! http://www.theawl.com/2010/11/lil-wayne-is-free-and-wall-streets-back http://www.theawl.com/2010/11/lil-wayne-is-free-and-wall-streets-back#comments Thu, 04 Nov 2010 10:30:27 +0000 Dave Bry http://www.theawl.com/2010/11/lil-wayne-is-free-and-wall-streets-back Lil Wayne was released from Rikers Island this morning. He'll now head to Las Vegas, where he'll apparently join his protege Drake on stage Saturday night, and then to Miami, for the traditional welcome home party at a strip club Sunday night. According to Mack Maine, another rapper on Wayne's Young Money label, the crew plans to "just treat him like a king, like the royalty that he is and make him feel like we really missed him and welcome him back to the family, basically."

Also, Wall Street has its "groove back." The Times reports that executive bonuses will be fat and juicy this year. And traders and investment bankers are already celebrating. "We are seeing a lot of luxury purchases, like vintage Bordeaux, things that we haven’t seen sell well in a few years,” said restauranteur John Delucie, who recently sold a sold a 1982 Château Mouton Rothschild for $3,950 at his Greenwich Village spot The Lion.

“Senior executive pay will go up more than the rest,” said Wall Street compensation expert, Alan Johnson. “I think executives are saying ‘I didn’t get paid much for two years and now I want something.’”

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]]> Lil Wayne was released from Rikers Island this morning. He'll now head to Las Vegas, where he'll apparently join his protege Drake on stage Saturday night, and then to Miami, for the traditional welcome home party at a strip club Sunday night. According to Mack Maine, another rapper on Wayne's Young Money label, the crew plans to "just treat him like a king, like the royalty that he is and make him feel like we really missed him and welcome him back to the family, basically."

Also, Wall Street has its "groove back." The Times reports that executive bonuses will be fat and juicy this year. And traders and investment bankers are already celebrating. "We are seeing a lot of luxury purchases, like vintage Bordeaux, things that we haven’t seen sell well in a few years,” said restauranteur John Delucie, who recently sold a sold a 1982 Château Mouton Rothschild for $3,950 at his Greenwich Village spot The Lion.

“Senior executive pay will go up more than the rest,” said Wall Street compensation expert, Alan Johnson. “I think executives are saying ‘I didn’t get paid much for two years and now I want something.’”

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]]> http://www.theawl.com/2010/11/lil-wayne-is-free-and-wall-streets-back/feed 8 'Inside Job' Trailer http://www.theawl.com/2010/08/inside-job-trailer http://www.theawl.com/2010/08/inside-job-trailer#comments Wed, 25 Aug 2010 16:10:26 +0000 Choire Sicha http://www.theawl.com/2010/08/inside-job-trailer
I really don't know yet what to think about Inside Job, the forthcoming documentary about Wall Street and the financial crisis. (The most recent one, I mean!) The trailer sort of reads like a cross between Michael Moore and one of those 9/11 Truther movies. But a trailer is designed to get people to a movie and, that being said, Singapore and Iceland are well-represented in the film, which speaks of good things. Also the movie's press kit has a timeline of deregulation in the U.S., so at least it promises to be somewhat fact-based!

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I really don't know yet what to think about Inside Job, the forthcoming documentary about Wall Street and the financial crisis. (The most recent one, I mean!) The trailer sort of reads like a cross between Michael Moore and one of those 9/11 Truther movies. But a trailer is designed to get people to a movie and, that being said, Singapore and Iceland are well-represented in the film, which speaks of good things. Also the movie's press kit has a timeline of deregulation in the U.S., so at least it promises to be somewhat fact-based!

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]]> http://www.theawl.com/2010/08/inside-job-trailer/feed 3 Disgruntled Wall Street Pretends To Disavow Candidate-Backing http://www.theawl.com/2010/07/disgruntled-wall-street-pretends-to-disavow-candidate-backing http://www.theawl.com/2010/07/disgruntled-wall-street-pretends-to-disavow-candidate-backing#comments Tue, 06 Jul 2010 13:05:13 +0000 Choire Sicha http://www.theawl.com/2010/07/disgruntled-wall-street-pretends-to-disavow-candidate-backing Excellent! Wall Street firms claim they're going to stop giving money to political candidates, as retribution over minor regulation. That's not going to be true at all, but it'd be a great start.

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]]> Excellent! Wall Street firms claim they're going to stop giving money to political candidates, as retribution over minor regulation. That's not going to be true at all, but it'd be a great start.

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]]> http://www.theawl.com/2010/07/disgruntled-wall-street-pretends-to-disavow-candidate-backing/feed 6 Gordon Gekko Starting To Sound A Bit Like An Angry Livejournaler http://www.theawl.com/2010/05/gordon-gekko-starting-to-sound-a-bit-like-an-angry-livejournaler http://www.theawl.com/2010/05/gordon-gekko-starting-to-sound-a-bit-like-an-angry-livejournaler#comments Fri, 14 May 2010 15:00:55 +0000 Maura Johnston http://www.theawl.com/2010/05/gordon-gekko-starting-to-sound-a-bit-like-an-angry-livejournaler gekko not geico"Money's the bitch that never sleeps. And she's jealous."
-One of the Gordon Gekko quotes from Oliver Stone's long-simmering Wall Street: Money Never Sleeps, which premiered this morning in Cannes. It seems to lack the punch of "Greed is good," doesn't it? (Other bon mots de Gekko: "You're all pretty much fucked"; "While I was away, it seemed like greed got greedier." Oh-ho, a sequel line! Eh.) The movie apparently has Shia LeBoeuf as the kid enticed to work for a "Goldman Sachs-like firm" who might one day have Gordon as a father-in-law; there is also a cameo by Vanity Fair head guy Graydon Carter, which I am going to take as a test of New York media's penchant for self-regard on the part of Stone. (Is it falling for a trap if you express your awareness of it?)

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]]> gekko not geico"Money's the bitch that never sleeps. And she's jealous."
-One of the Gordon Gekko quotes from Oliver Stone's long-simmering Wall Street: Money Never Sleeps, which premiered this morning in Cannes. It seems to lack the punch of "Greed is good," doesn't it? (Other bon mots de Gekko: "You're all pretty much fucked"; "While I was away, it seemed like greed got greedier." Oh-ho, a sequel line! Eh.) The movie apparently has Shia LeBoeuf as the kid enticed to work for a "Goldman Sachs-like firm" who might one day have Gordon as a father-in-law; there is also a cameo by Vanity Fair head guy Graydon Carter, which I am going to take as a test of New York media's penchant for self-regard on the part of Stone. (Is it falling for a trap if you express your awareness of it?)

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