The Dumb Dad Diary: an Age of Heroes
The start of these recordings has been plunged into controversy. I guess all great work is polarising? I began to feel guilt and shame, what have I done? Have I suddenly laid myself bare for scrutiny with such an unfair topic to write about? Is that Ryan Seacrest at my front door with a camera ready to record my personal life for the all public to meme? OMG where do you even shop for lip fillers!? No, calm down I thought, let’s not be a dumb son and just think carefully for a moment. The irony is that the behaviour this diary has aggravated is the same one I am exposing. I assumed that in the friendly discussions we have amongst lads, gals and gays about social issues and politics, that once we all, including the privilege straight white middle class men, have had our arguments negated, a lesson has been learnt. Yet I’m troubled that my trolls have actually left these lessons behind or never acknowledged their privilege after all. These dumb men aren’t apologetic even after the implosion of crisis.
When Lehman Brothers Collapsed on 15th September 2008 one question asked was who should take responsibility for the scandal that had busted the housing market bubble built on extremely unstable high –risk subprime loans, had wiped 13 per cent off global production, 20 per cent off global trade and produced in the west a recession phase longer than 1929–33 and even now concerns mainstream economists of long-term stagnatin? Key agents to blame were the chairman and CEO Richard, S, Fuld, Jr. and the company’s auditors Ernst and Young for their mislead of material assets through REPO 105, which allowed the company to make a short term sale of 50 billion dollars of assets every year, which were in fact loans, with a promise to repurchase them later. They made a lot of money off money and disguised corrupt handling of toxic assets as profitable trade with a nice bonus for all their hard work. This is not exclusive to Lehman brothers. A network of off short and unregulated companies all had hidden debts in mispriced products known as ‘structured investment vehicles’, like my troll and mass scale criminality of the global finance system, they are endemic to a system of patriarchal self-belief and hypocrisy that enforce a neoliberal system in denial of its failure.
The parallel here is remarkable, I was heckled by a middle class white straight man as ‘a dick’, that this diary is ‘disrespectful’ and that ‘nobody is going to be impressed’ if I write about how I dislike my farger. While the moral high ground of the whistleblower is admirable the ground they stand on feels like fresh earth. It’s a classic case that the moral defendant against my admonition has only now taken an interest in defending what’s right. Commentators of an expose they are bias towards haven’t acknowledged the confirmation they are making of their own identity. They live by this denial to avoid questioning their own self-belief and fail to look at the bigger picture. I couldn’t say whether this is even conscious but the contradictions are staggering.
The basic idea behind pro-free-market neoliberalism is that ultimately the markets correct themselves. The possibility that neoliberalism could collapse under its own contradictions remains unacceptable to most.
In ‘Postcapitalism’ (2015) Paul Mason understands that both the left and the right agreed the immediate cause for the collapse that inevitably did happen was seen in ‘cheap money’: the decision by western states to deregulate banking and loosen credit after the dot com crash in 2001, which created the structured bubble of borrowing and betting and motives behind all the crime. Bankers where effectively told by politicians that it was their duty to get rich through speculative finance, so that it would trickle down to the rest of us. This encouraged the unethical management which violated fundamental accountancy principles by overstating the company’s assets which were actually on extremely shaky ground and without investment policy allowed a poor unethical culture to persist from upper management. It is interesting to note that white straight men (whaighmen) are all over this. Begin googling the names of the CEOs and politicians yourself and the theme is persistent. Now here is a textbook case of the cycle of ‘fiat money’ — that is money printed and not backed by gold:
In 1837, the newly declared Republic of Texas issued its first bank notes. Lacking a gold reserve, the new country promised to pay the bearer of these notes 10 percent interest a year. By 1839, the value of the Texan dollar had fallen by 40 percent. By 1842 the notes were so unpopular the Texan government refused to let the people pay their taxes with them. Through a slow economy the people began to demand the USA to annex Texas, which eventually happened but by then the Texas dollar had recovered and the US just wrote of its remaining $10 million of public debt in 1850.
In August 1971 President Richard Nixon repeated the experiment but now with the whole world, scrapping the agreement which pegged all current currency to the dollar and the dollar to gold. From then on the global finance system ran on fiat money. This allowed fundamental practices of neoliberalism to kick in, money can just be expanded by banks, mass profits can be made off speculation; money made by money and a freedom from responsibility on the assumption that all crisis can be resolved by the market. A fantastic free-market! Liberty to all!
It is news to some that banks ‘create money’ but that’s how it’s always been done; they have always let out more cash then there was in the safe. Once a simple invest with a promise of returns with legal limitations now deregulated global finances where anyone can bet on bets and make money off money to the limits of unethical culture. Every development of the neoliberal project has pushed these limits.
The policy now that continues our finance model pre- and post-crisis is quantitative easing, in 2009 having wavered before the enormity of the task, Bernanke — together with his UK counter part Mervyn King, governor of the bank of England — started the printing presses rolling. In 2008, China had already begun printing money in the more direct form of ‘soft’ bank loans from state-owned banks to businesses (i.e. loans that nobody expected to be repaid). Now the Federal Reserve System would print $4 trillion over the next four years — buying the stressed debts of state-backed mortgage lenders (like Barclays who acquired Lehman Brothers operations in North America after bankruptcy), then government bonds, then mortgage debt. The combined impact was to flush money into the economy via raising share prices and revived house prices, which meant it first flushed into the pockets of those who were already rich. The calculated combined amount of money printed into the global economy is around $12 trillion — one sixth of the worlds GDP. It only working in that it’s preventing another depression. But it’s a disease being used to cure a disease: cheap money used to fix a crisis caused by cheap money.
This is where the denial by the leaders of our financial industries permeates, they fail to accept or take responsibility for the self destruction of using fiat money and continue to behave as though nothing is wrong. You don’t have to question them because why do they need questioning? With a limited amount of real economic goods and an unlimited amount of money, the argument is that all paper money systems go the way of nineteenth century Texas and need to be written off eventually.
There are fears which prevent an overturn of the system based on the issue of how the economy can exist without mass costs, if we propose ‘real’ money where banks match loans then it wouldn’t allow for much space for derivative markets, which with normal complexities aids resilience to drought, crop failure, product recall etc, which leads to stop-go business models and high unemployment also. But we must remember what money actually is.
In a popular version of economics, money is simply a convenient form of exchange, and is a lot more practical than randomly exchanging my bag of potatoes for your barrels of hay. In fact as anthologists David Graeber has shown, there is no evidence that money is fundamental to human civilisations through trade and barter. They used something a lot more powerful. They used trust. Money is created by states and always has been, it is not something that exists independently of governments. Money is always the ‘promise to pay’ by a government. Its value is not reliant on the intrinsic value of a metal; it is a measure of the peoples trust in the permanence of the state. Fiat Money in Texas would have worked if people believed the state would exists for ever and once it joined its large more permanent US state the value of the Texan buck revived because now it was American. The issue is never that ‘Oh dear! We printed too much money again’ it is in that the entire system relies on the credibility of the state issuing the paper notes. And in a modern economy rests not on single states but on multilayered systems of debts, payment mechanisms, informal currency pegs, formal currency unions like the EU and huge reserves of foreign exchange accumulated by states for insurance if the system collapses. That is a lot of responsibility to be abused when we know the high and ultimate risks of fait money.
Due to lack of evidence no major penalties were given to Lehman Brothers other than that they were forced into bankruptcy. And boom and bust credit bubbles are growing again, the collateral debt obligations (CDOs) which were packaged from the dodgy subprime mortgages with other high payment mortgages and then sold as secure returns are now being sold again by banks but are now called ‘bespoke tranche opportunities’. This system is still so persistent in its short-term, one man tribe thinking.
We now use a system of complex financial transaction to trade and sustain an economy but fundamentally, and before money, that transaction was built on trust. Despite being called out as disrespectful and told that writing this blog sums me up. The men running these systems, the CEO Richard, S. Fuld, Jr. and my troll walk all over the trust necessary to sustain our economies big and small. I was argued into a corner until I remember that the whaighman was holding me up to a higher standard than those I was exposing. There are men, our friends, who have cheated on their girlfriends, some now publicly acknowledged, some still in the dark. The level of scrutiny I was subject to was not even addressed against a fellow whaighman who committed an even greater condemnation. What greater abuse of trust is there than breaking the monogamous commitment to your partner? Well these guys are happy to risk it and are unrepentant. More than that, my offensive blogging is in fact worse than an unfaithful partner. For the whaighman, publicly addressing with scrutiny and truth misogyny and immoral behaviour is worse than even committing it.
The patriarchy will defy all ethics before trialling their own behaviour. In the face of such illusion we’re told not to speak, not to question and to keep calm and carry on with their unregulated behaviour in our finance sector and in their bedrooms. ‘Do not hold us responsible!’ even if they’re creating the largest economic and consequently humanitarian crisis we have ever seen. Well I’m not going to let that happen, not in my diary. And not it appears in Meryl Streeps. When Meryl spoke out at the Golden Globe awards not directly but universally about the importance it is to acknowledge, expose and hold to account those who deceive, lie and do not take responsibility for cruelty she said she was terrified. She said ‘It’s terrifying to put a target on your forehead because it sets you up for all sorts of attacks and armies of brownsuits, bots and worse, and the only way you can do it is if you feel you have to, and you have to! You don’t have an option, you have to!’ it takes courage to acknowledge injustice. I quote Desmund Tutu when he said ‘If you are neutral in situations of injustice you side with the oppressor’. I quote Edmund Burke when he says ‘the only thing necessary for the triumph of evil is for the good men to do nothing’. If passivity is the enemy than taking action is heroic.
In the face of global economic crisis and the scope of a neoliberal capitalist system that is destroying us, it is easy to recoil at the scale of the challenge to imagine an alternative. But there is something even more powerful that transcends this 50 year crisis and the 500 year dominance of an economic system. A large part of our humanity participates in this change triggered by new technology: the contraceptive pill. We are living through the one-time and irreversible cancellation of male biological power and dominance. We are witnessing a 40,000 year old system of gender oppression begin to dissolve right now with feminism. It is not disrespectful to admonish and expose characteristics of our oppression. I don’t think it’s optimistic or romantic to say the tides are turning. My dad needs to be told that he is letting me down, it needs to be discussed that whaighmen are letting us down and we need to change it together, in our homes and at work, because in the end ignorance will be exposed and dominance will be desolved, by heroes.