Obama to California: Drop Dead

Apparently, there are a few people in the White House who have awakened to the fact that the California budget crisis imperils any possible economic recovery. But, faced with a choice between strict adherence to neoliberal policy, or preventing the complete evisceration of California's safety net, such as, for example, the elimination of welfare, as well as the reduction of public education to a skeletal system of warehousing children, they are still, of course, choosing the former. Trillions for banks? No problem. 24 billion for California, and possibly billions more for other states in a similar situation, like Michigan? Forget about it.

They Aren't Hiding Their Intentions

From an article by Barry Grey at the World Socialist Web Site:

Testifying Wednesday [June 3rd] before the Budget Committee of the House of Representatives, Federal Reserve Board Chairman Ben Bernanke demanded that Congress and the Obama administration map out a program of austerity measures to bring down record budget deficits. Bernanke made clear that the heart of this program should be sharp cuts in social spending, including basic entitlement programs such as Social Security and Medicare.

“Maintaining the confidence of the financial markets,” Bernanke said in prepared remarks to the committee, “requires that we, as a nation, begin planning now for the restoration of fiscal balance.”

The phrase “confidence of the financial markets” is a euphemism for the interests of Wall Street and major international banks and investors. In demanding the preparation of austerity measures to be imposed on the American people, Bernanke was speaking in behalf of the financial elite whose massive taxpayer subsidies have been the major cause of the explosive growth over the past year of the federal deficit and the US national debt.

It is all going according to plan.

Hat tip to rjones at All Over the Board.

Film Notes: The Girlfriend Experience

Looking back wistfully, Hal Ashby attempted to capture the zeitgeist of that period when the expanding horizons of the 1960s imperceptibly receded. He did so by profiling the life of a popular, libidinous Southern California hair dresser in the final hours leading to the 1968 election. The movie was, of course, Shampoo, and Warren Beatty portrayed the hair dresser, George Roundy, in one of his best performances. Roundy discovers that the power of money and the need for emotional security trumps the willingness of people to take the risks required to achieve personal fulfillment.

Over three decades later, Stephen Soderbergh has remade Shampoo, but, apparently, in such a way as to render it unrecognizable to most people, even movie critics. In The Girlfriend Experience, a high end call girl, Christine, portrayed by Sasha Grey, a porn star, navigates her way through a world that Roundy could have only vaguely anticipated, a world where the circuits of capitalist exchange have moved beyond the commodification of sex to the commodification of personal relationships themselves. In a disjointed narrative that remains faithful to the broad outline of Shampoo, Christine provides her New York City clients with something more addictive than sex, the illusion of a perfect relationship.

While Christine has sex with her clients, this is not her selling point. Rather, it is her willingness to spend most of her time with them as if she was their girlfriend as she goes to Manhattan clubs, restaurants and movies with them. Indeed, while she doesn't always have sex with them, she always ends up listening to them. She does so with feigned empathy as they engage in meandering dialogues about their families, their jobs, and, most especially, their financial anxieties. Because, just as Shampoo is set in the hours before the 1968 election, The Girlfriend Experience captures the moments in the lives of Christine, her boyfriend and her clients in the days before the 2008 one.

Hence, her clients are terrified and disoriented as they live through the collapse of the financial system. Frustrated with their loss of control over their investments and businesses, they compensate by perpetually offering Christine financial advice. Invariably, they supply her with such insights as to buy gold, because there is no way of knowing when this is going to end. As you have probably already guessed, they never, with one exception, show any interest in her life, and they certainly don't want her to express any opinions beyond banalities such as I definitely think relationships are about communication, don't you?

Through their attainment of great wealth, Christine's clients therefore find themselves incapable of resisting the transformation of human relationships into a form of consumption whereby one can purchase a partner that will go to the movies that you want to see, listen raptuously to everything that you have to say and go to bed with you whenever you ask. In response to an inquisitive reporter's question as to whether she believes that there is anyone who wants her for who she is, she responds: If they wanted you to be yourself, they wouldn't be paying you. Yes, Christine gets it, even if the reporter does not. She gets paid precisely because she is willing to strip away those all too human qualities of annoyance, independence of mind, fatigue and disinterest that always manifest themselves periodically in any real relationship.

Christine provides, in effect, a simulacrum of a relationship, bringing to mind a quote from a great French film of the early 1970s: the simulacrum is superior to the original. Or, more precisely, the simulacrum is always more irresistable than the original, with all its imperfections. As Robert Abele of the Los Angeles Times described the film: . . . an exquisitely filmed piece of urban impressionism that, unfortunately, leaves one feeling that a sleek gadget has been needlessly purchased. Implicitly analogizing Christine to a sleek gadget is an admittedly brilliant insight, but she is most assuredly not needlessly purchased. Soderbergh is telling us a cautionary adult fairy tale about how we have moved beyond the fetishism of objects to the fetishism of people.

Perhaps, the most disturbing aspect of the film is the extent to which Christine and her clients internalize the values of this world without question. The only collective ethos expressed by the characters is one of self-promotion and enrichment. They are incapable of the contemplative reflection of alternatives, even as one of the greatest speculative financial bubbles in history unwinds before them. Instead, they aspire to be among the few that escape the wreckage unscathed. The scriptwriters, Brian Koppelman and David Levien, empower their characters to give expression to it through dialogue that is so banal, so spot on, as to be unintentionally hilarious. In fact, one can argue quite convincingly that The Girlfriend Experience is actually a black comedy.

Soderbergh and the scriptwriters tell this story by means of a narrative that is chronologically fragmented, with a visual emphasis upon cool, modernistic interiors of loft apartments, fashion boutiques, warehouses and restaurants. Colors are consciously drained of their vibrance. Overall, the effect is mildly claustrophobic, an urban environment drained of any spontaneity, one in which its protagonists measure their success by recourse to cynical calculation. Soderbergh has cited Antonioni's The Red Desert as an influence, but the precision of the compositions within an experimental narrative also invoke the work of Oshima Nagisa and Peter Greenaway as well. In this instance, Soderbergh exposes the soullessness of contemporary, neoliberal Manhatten much in the same way that Oshima did in regard to the utilitarian Tokyo of the late 1960s. There is an extreme formalism on display here, one deftly executed on a level commonly associated with the most daring and creative filmmakers.

Most impressively, the tone of the film is consistent throughout. Greenaway has said something to the effect that the challenge for a filmmaker is to take an idea and relentlessly follow it through to its conclusion, and Soderbergh accomplishes this difficult task here. Characters are portrayed in a low key naturalistic way devoid of sentimentality, paradoxically rendering them more accessible to audience identification. Rarely have I seen a film in which I was immediately able to recognize and relate to the characters upon contact as I was with this one. I was engrossed as I was carried forward from scene to scene. Predictably, critics get enmeshed with the fact that the lead, Grey, is also a porn star, and, in most instances, derided her performance. But I thought it was quite fine, because it seamlessly blended into the overall mood. Most professionally trained actresses would have brought an artifice to the role that engendered a more emotional audience response that undermined Soderbergh's intentions.

The Beginning of the End (Part 4)

From The German Revolution: 1917-1923, a rich, profound, tragic history written by Pierre Broue:

It seems that from November 1921, the magnates of German industry decided that the general situation must deteriorate before it could improve; runaway inflation to wipe out Germany's debt, bring the state to its knees before them, exhaust the working people, and leave the great capitalists alone as masters of the situation. The mark fell steadily throughout 1922, and its fall became precipitous when the Ruhr was occupied.

From an article in the Financial Times by Ambrose Evans-Pritchard:

Richard Fisher, president of the Dallas Federal Reserve Bank, said: "Senior officials of the Chinese government grilled me about whether or not we are going to monetise the actions of our legislature."

"I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States," he told the Wall Street Journal.

His recent trip to the Far East appears to have been a stark reminder that Asia's "Confucian" culture of right action does not look kindly on the insouciant policy of printing money by Anglo-Saxons.

The reporter's reference to Confucian culture as a reason for Chnese objections is quite humorous. I'm not aware of people from any culture that appreciates having the value of its assets diminished through deliberate government policy.

With that said, I'm still a deflationist, for the reasons presented by Mike Whitney yesterday:

The economy is in the grip of deflation. Commercial banks are stockpiling excess reserves (more than $850 billion in less than a year) to prepare for future downgrades, write-offs, defaults and foreclosures. That's deflation. Consumers are cutting back on discretionary spending; driving, eating out, shopping, vacations, hotels, air travel. More deflation. Businesses are laying off employees, slashing inventory, abandoning plans for expansion or reinvestment. More deflation. Banks are trimming credit lines, calling in loans and raising standards for mortgages, credit cards and commercial real estate. Still more deflation. Bernanke has opened the liquidity valves to full-blast, but consumers are backing off; they're too mired in debt to borrow, so the money sits idle in bank vaults while the economy continues to slump.

It is important to note that the Chinese concerns and Whitney's deflationary perspective are not contradictory. It is possible for economies around the world to continue to contract, even as the US deliberately orchestrates a decline in the value of the dollar. In this, Americans would experience the worst of all possible worlds, domestic deflation and continued job losses even as the cost of imported goods increased dramatically.

In such a situation, American capitalists could achieve many of the goals described by Broue in the context of German capital in 1923. Whereas the German capitalists hoped to inflate their way out of reparations, the American ones would likewise seek to inflate their way out of its foreign debt through currency devaluation. Whereas German capitalists wanted to destroy the autonomy of the working class, American ones want to eliminate what little remains of the social protections of the Great Society and the New Deal. In each instance, they have decided that the general situation must deteriorate before it could improve.

Could it get as bad here as Germany as 1923? Doubtful. But when finance capital plays these sorts of games, the door is opened to all sorts of unpredictable consequences. Indeed, the phrase the law of unintended consequences now hints at ominous, heretofore inconceivable possibilities.