Discounted opinions: The circulation of sub-prime comment

The financial crisis that rippled across the world in 2007/8 was the result of hubris and overconfidence in the ability of the financial sector to predict the future. Financial products were bought and sold based not, on a sober analysis of the assets on which they were ultimately based, but rather a speculative value was placed on them depending on what they believed someone else — similarly uninformed as they were — would pay for it. They were placing bets on a horse race they never believed would be run — believing they knew and understood all of the rules, despite not knowing the first thing about horses. They gained confidence in what they were selling because they glanced over their shoulder and saw other bankers doing exactly the same thing. The ecosystem that bankers existed in was insular enough, that information which gained its only truth value from the contingency of the system was interpreted as having a universal, objective truth value, rather than just a relative, subjective one.

This was shattered when the financial crisis struck, as the underlying assets turned out to be worth much less than previously thought, and banks were left holding useless assets. This confusion between an objective reality and a subjective reality is one that can be seen in another profession; the British commentariat, particularly in the build up to the 2017 election. Journalists are supposed to observe reality and report back critically — however, the commentariat in this period simply observed a constructed reality which existed purely within the walls of the newsrooms. The output of a few commentators became a synecdoche for the whole of the British political and social landscape, and commenting on the political events of the day manifested itself as simply commenting on the comment pieces of other journalists, which were in turn just commentaries on previous pieces. Journalistic value stemmed not from any objective reality underlying these comment pieces, but from the credence given to these opinions by other commenters and the repetition of their snippets of trite research and pithy turns of phrase.

This was all based on a very sure understanding of British politics which gave rise to a very confident prediction; Labour would be crushed in the election. This surety was misplaced as, like the financial assets in circulation before the 07/08 crisis, they were based on bad underlying assets, or in this case, information. Nobody knew what these reheated, lukewarm hot takes were ultimately based on, but people within their profession were churning out this stuff repeately, gaining authority purely through repetition and projections of confidence. The election result left them holding these useless hot takes, as no-one considered them of any value any more, and the curtain was pulled back as the illusion of reasoned criticism and objective enquiry was revealed as intellectual immaturity and ideological posturing.

CDOs were originally constructed from packaged up home loans bought from smaller regional banks. These packages were then sold on to other banks, institutional investors, pension funds and hedge funds. The original value of the product came from the regular mortgage payments made by the borrowers; packaging them together spread the risk and made them attractive to a wider range of investors. The continuing value claims to always stem from this first transaction — but in reality its value comes from its continuing circulation and people or institutions within the ecosystem declaring them valuable. The value comes not from an analysis of the original value, but as a speculation where relative value becomes confused and equivocated with original value. The original value in British journalism can be many things — a poll, a piece of research, an academic publication — and it is always claimed that the opinions put forward in any comment piece stem from one of these fragments of attempted objectivity. But just like in the circulation of CDOs, the value of any particular journalistic aphorism comes from its continuing circulation, and the relative value placed on it by other commenters. Just like with CDOs, it is not that these journalists are aware of the original value and ignore it — in most cases they do not know what it is because it has become obscured behind the veil of objectivity draped over the comment pieces that do the rounds each day. Their idea of critically analysing any particular observation does not involve engagement with what anyone else would consider a primary source — but simply involves writing 1000 words every day referencing other pieces from a select group of publications. These references become circular and what is one day a trite, empty observation the next day becomes an established fact. In both cases the purposes of this concealment is the same; the achievement of a certain aim (profit in finance and the furthering of certain ideological positions in journalism) by the construction of a system which detaches itself from wider reality by creating a plausible representation of reality completely under the control of a small cadre of insiders. This false representation of reality is used as external evidence underpinning the direction of financial investment, political change and acceptable enquiry and discourse. A variety of tools are used to gloss these ideological vehicles with the veneer of the common good.

The bankers refer to “the model” when justifying their investment decisions — but standard critiques of mainstream economics would point out the flaws in this crutch; these models refer to a stylised version of the economy, in which assumptions eventually morph into axioms by being repeated often enough. In one paper these assumptions may be caveated, so that the conclusions can be analysed through this lens. When a body of literature is constructed around these assumptions then they tend to be subsumed under the auspice of accepted rules which cannot be deviated from.

The same is true of comment pieces and the truth contained within them — opinion pieces present a version of reality formed within the biased, ideological mind of a certain individual, and when taken properly within the right context, its subjectivity can be assessed on its own merits. However, when this subjective piece is repeated again and again, and passed from person to person, piece to piece, it becomes divorced from its initial context and it loses the dull glow of subjective opinion, and becomes something else; a truth with the bright sheen of objectivity. The grotesque monster that is the British commentariat can ingest any worthless thought or catchy soundbite, and transform it into a steaming pile of functional truth.

The models that were used in to rate bonds and predict the performance of future investments were based on a set of assumptions which were based on the core tenets of mainstream, marginal, monetarist economics. The assumption of efficient markets and rational choice coded into the models have an assumption of stability, which gave those using the model a false belief that the only eventualities possible were those within a small window — and anything outside of it was considered theoretically and practically impossible. This surety of how the future will turn out affected their actions in the present; stylized, simplified predictions are not devoid of significance just because they are caveated with probabilities and confidence intervals. Once these models become ingrained into the daily workings of a group of people — they become the future, even though they are simply, at heart, educated guesses. They become such a part of the fabric of this ecosystem that any thought outside these paradigms is never considered because it contravenes the tidy assumptions which allows the system to function.

This same pattern can be seen within the world of British comment journalism — there is a basic set of assumptions which underpins their thought and actions, and to even question them is to question the very existence or utility of the industry. Politics is seen as an immovable feast — there are certain laws which are immutable and eternal — questioning these is like questioning gravity or the roundness of the Earth. However, on closer inspection these rules are grounded within a particular contingency, a set of events — but they are then stripped of this context and raised to eternal truths. An example of this is the maxim “you only win from the centre” — which was casually levelled at the Labour party when it moved left under Jeremy Corbyn. He could not win if he moved the party left — because the previous Labour Party wins had come under New Labour, and the previous attempt at a relatively left wing platform ended in disaster in 1983. This is a fair enough assertion as these events are in recent British political history — however a closer inspection reveals a logical fallacy; it is like saying the reason the sun will rise today is because it rose yesterday. It extrapolates causes from one variable and refuses to consider the conjuncture in which these events occurred — and refuses to critically analyse the current political situation and look for any similarities or dissimilarities, or view it on its own merits. There is no rational or empirical value behind these statements; they are sophistry — they sound clever and astute but are in fact devoid of any meaningful truth. However, they gain their significance as maxims within the commentariat for a simple reason; their utility — these clever sounding arguments are useful because they provide a veneer of historicism to the famously shallow world of political commentary, and allow them to police the boundaries of acceptable thought and uphold a system where only certain opinions are considered worthy of exposure and credibility. Actual historicism is messy and ambiguous and does not lend itself as well to clever rhetoric in pursuit of advancing certain normative value — these maxims are a crib sheet for the ownership of history, for the purpose of controlling the present. They gain credibility by being fed through the comment ecosystem, gaining value as they go by having more and more commentaries including them as an objective political truth. It is not that individual journalists particularly think along these lines, but the entire system is given its energy by this particular logic — if you start to question the environment in which this thought is composed it is doubtful you will be in it long enough to get anywhere to seriously undermine its foundations.

A good place to start analysing this phenomenon is a particular set of comment journalists at the Guardian — the Four Horsemen of the Apocalypse: Polly Toynbee, Jonathan Freedland, Andrew Rawnsley and Nick Cohen. The pieces they churn out on a weekly basis show a perfect example of how the sociology of British comment journalism functions practically. They seem to have come from nowhere — they seem to be commentators simply because they are; any qualifications they once had do not matter; their position is justified post hoc because they hold that position. They can point to a history of comment pieces as a reason they are still employed to give their opinion, regardless of what these pieces say; the content does not matter anymore — their mere existence is all the ballast needed to confidently say that they should write more. A simple critical glance over these positions would reveal four people who are consistently wrong about everything they write about, and have never shown any ability to critically analyse the political situation or provide any insight beyond repeating clichés and received wisdom. The reason they write is because they have written before.

These four exemplify a very important part of the British political journalistic ecosystem because they announce themselves, and are named as such by others, as “on the left”. This is a phrase completely devoid of any meaning, and a perfect example of a maxim which gains traction simply by being repeated. It treats being left wing as a club which you join at some point and can subsequently never leave, despite how many basic tenets of the broad church of left wing thought you reject. It continues to exist as a putatively meaningful term because of its utility for the functioning of British comment journalism. By placing themselves “on the left” they are in a great position to set the boundaries of acceptable political discourse — anyone presenting ideas to the left of these writers “on the left” can be painted as not “on the left” but something beyond that, perhaps the “far left” or “communist”. Using their influence in political discourse they can close what is termed the Overton window, and shut off access to mainstream political publications for anyone holding even slightly radical ideas. Through their prominence and they self-described political leanings they create and maintain the “on the left” club — they control who enters and the foundations on which it is built. The rest of the British commentariat then identify these actors as the legitimate subjects of the descriptor “left wing”, and can dismiss any others who don’t fit into that particular niche as usurpers to the throne. They use the classic tactic of creating a closed political discourse, but then having a lively debate within it to show that it is actually balanced. If these writers didn’t exist they would need to be invented.

A cursory glance over their pieces over the past 2 years reveal a sustained campaign against Jeremy Corbyn and the movement that propelled him to the leader of the Labour party. Every other article they write is a diatribe against him, ostensibly taking a different angle depending on the most topical aspect, but in reality they simply copy and paste from a previous articles and dress it up as something new. Repackaged garbage; sound familiar?

Previous comment pieces by them or people of their tribe act as the reasoned criticism or empirical evidence used to back up their facile points written in the present. It is hard to tell whether they are consciously aware of this, or whether they are so far down the rabbit hole that every rabbit they see as the bumble around in the dark, constantly circling back on themselves, is evidence of an insight into an objective reality previously undiscovered. The circular nature of their reasoning means that every new piece of evidence they process simply goes through the meat grinder process of self-referential comment pieces, so that every prime steak ends up being a sausage of confirmation bias.

The other topic they like to touch upon as they write these pieces in a national broadsheet, or reply to their thousands of followers on Twitter, is their own powerlessness. They are humble observers; dispassionately reporting and commenting on the passage of the day’s events. They latently stress their own importance through their self-referential circle jerk, but refuse to admit the role they have in policing discourse. This refrain is common among the purveyors and minstrels of power; to fully acknowledge and announce the extent of their role of the arbiters of acceptable inquiry and discussion would awaken people to the reality of having a small coterie of ideological charlatans in a positions such as theirs, having little to no justification for the roles they find themselves in. When other people point out that the mainstream media’s coverage of Jeremy Corbyn has been largely ideological in its critique, they emphasise their impotence in shaping the image of public figures. The hairdresser announces they are powerless to shape your image as they hack maniacally at your hair.

From a group of navel-gazing, conceited sophists, Nick Cohen stands out as particularly egregious example. He throws around the term “far left” with abandon — relying on its established status as a slur for anyone left of Tony Blair to express his opinion and smear his enemies. He uses it with such confidence that it would be impossible to think that its meaning is completely pliable to the whims of its user. It gains its currency only from its continued use by a small group of people within the commentariat and the political class, who must defend a small, closed window of what is acceptable to talk about; and if its meaning was ever seriously questioned they would melt like the Wicked Witch of the West when doused with water. The term is an empty vessel, into which the ideology of its user can be poured and then wielded as a potent weapon in policing the limits of acceptable political discourse. By decrying a certain group or set of ideas as somehow being “far”, he places himself and others like him in a certain place within this spectrum associated with fairness, empiricism and reasoned critique. He becomes shorn of ideology and paints himself as a neutral arbiter battling the forces of extremism. This is an incredibly powerful rhetorical device which helps to cement the idea that the political spectrum is a fixed range within society with fixed terms referring to fixed concepts. In reality it is a malleable set of ideas which are easily shifted around — and Nick Cohen uses this power to place the current political contingency as being the rational outcome of a predetermined destiny, rather than one particular path favoured by the powerful to cement their status. Tony Blair and the Third Way is the telos of civilised human society, so any criticism of him and his polices from the left is viewed as heretical and is motivated by stupidity, naivety or communism. The basis of their world view is predicated on these kinds of ideas being placed at the apex of the horseshoe. Any attempt to critically revaluate where the boundaries of the political compass lie is kryptonite to the Blairites as it questions the foundational axiom on which their philosophy is based; they are the pioneers of modernity, traversing the path between extremes to find the only true way towards a properly functioning society. They lack any discernible views or policies which can be materially analysed as steering society on the only path towards salvation — their only appeal is that they are not “extreme” or “far”, but are firmly in the land of reason and clear eyed objectivity; the “centre”. They only define themselves negatively, in relation to where other people are; so they must make sure that they stay there conceptually, or they lose any clear definition of themselves or their project. All of this is an example of certain ideologies being packaged up, wrapped carefully and being passed off as a reasoned, objective critique with a genuine critical value. Individual commentators cannot do this alone — they exist within a certain environment which allows them to construct these ideological vessels — but there are other organisations which support them in these endeavours.

During the build up to the financial crash the ratings agencies presented themselves as the outside arbiters of riskiness; they rated the bonds according to the prevailing market conditions and the underlying assets of financial products, regardless of the retail value that the banks ascribed to them: This was false; the banks paid them to rate their bonds — if the rating agencies wanted continued work then they had an incentive to rate the bonds well so that banks would keep coming back to them. Whatever the intricacies of the relationship, these agencies were not external to the banking ecosystem and were tied up with the same logic, but were endowed with the magic paintbrush of objective reality, daubing anything they were paid to. The think tanks, research institutes, public academics and polling companies acted in the same way for the British commentariat; they acted as agents external to the subjective maelstrom that was comment journalism, only approving of the aspects that were steeped in empiricism. Once again, this was false; the quasi-research institutions act in the same way as the ratings agencies — they are paid for commissions by the media organisations, they raise their profile through exposures in papers and on the TV. Their incentive is to provide research results which conform to the prevailing wind of opinion, or at least within a narrow window, because then they will be quoted, referenced and they will gain a reputation, or maintain an existing one. If they produced contradictory research, or published radical results they would not reach these positions — the commentariat and the quasi-research institutions have a symbiotic relationship, trading in goods in which each has a comparative advantage; exposure and the sheen of empiricism. These institutions cannot be external agents, providing sober analysis on which thoughtful conclusions can be drawn; their research direction and decisions are formed within an environment which is subject to the same logic as the British commentariat — they just play a different role.

Since the financial crash and the subsequent bailouts and restructuring the financial system has undergone a superficial change. They preach a new system of banking responsibility and an end to speculation. Once again, this is false. The selling of CDOs has continued under a new façade with slightly altered lettering and a new salesman. They will continue because they had one fundamental motive that did not dissipate with the financial crash; the pursuit of profit. This overcomes the putative aim of this system — the efficient allocation of capital. The same goes for the British commentariat — their putative aim goes against their fundamental purpose; the maintenance of a certain system of power and control by limiting the realm of acceptable discourse and reinforcing values and ideas useful to the ruling classes. So the idea that the shocks of the 07/08 financial crisis and the 2017 general election would change these fundamental values is flawed. They have fundamental values and a logic which determines their action in spite of a crisis which is supposed to change the way they work; they cannot change, because that would contradict their reasons for being. The creation of CDOs was a method invented by banks to achieve their main aim; the reproduction of capital. But the financial crisis forced them to find a new way or achieving it, or to simply wait until the dust has cleared and continue on as before. The passing around and repetition of quasi empirical and functionally conceptual turns of phrase by the commentariat is another way of achieving theirs. Any assertion that the British commentariat will change is misguided and is based on the assumption that the lack of any valuable critical analysis in the build up to the 2017 GE was an aberration based the failure to fully recognise a fundamental shift in the underlying political and social landscape. This conceptualisation assumes that the aim of British political journalism is to impartially observe the political landscape as it is and then analyse, comment on and contextualise it dispassionately, with the aim of informing the consumers of news as best as they can about the wider world. This is the noble lie extolled to the general public and genuinely believed by the members of the journalistic profession. The purpose of mainstream journalism in Britain is to create and maintain a certain system of discourse which functions as a ballast to the existing ruling class. They do not wish to speak truth to power, but to act as its mouthpiece; diligently repeating maxims and aphorisms which extol the virtue of a subjective position of how the elite believe the world should be in order to function in their best interests. All the while they dress it up as a system which is designed in the best interests of everyone, to hold the powerful to account and amplify marginalised voices. In its current iteration it cannot change no matter what pressure is put upon it, because if they did change they would contravene the purpose for which they exist in the first place. The idea that they will find a new way of achieving it is unlikely; bankers can do this because they are usually a lot smarter. They will just wait an appropriate amount of time and then start doing the same thing again.

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