When Sums Don’t Add Up, by Elayne Riggs
So I read via Colleen Doran’s blog that the LHC, the Large Hadron Collider, has gone bust, at least temporarily. Apparently it, like the Internet router Monday morning at the Riggs Residence, suffered some sort of electrical malfunction. Our router’s fine as of the typing of this column, but the LHC will take a bit more time to get going again on its way to possibly wiping out all known life. Which is pretty much okay by me; I have at least four months’ worth of DC comics still unread!
Now, for anyone unclear on what the heck the LHC is supposed to be doing, some wacky and geeky scientist types have put together this handy-dandy hip-hop ditty:
But fairly heavy rotation in our Science and Discovery channel viewing meant Robin and I were more or less up on the basics of dark matter and so forth, and had already mocked them mercilessly. See, here’s what we tend to think of these scientists. We can’t fault them their enthusiasm to find the binding tie that will create a grand unifying Theory of Life, The Universe and Everything (42, by the way). But for scientists, whose chosen profession demands that they question everything and rely primarily on the empirical evidence of their senses, this arrogant certainty doesn’t sit well with me. It’s as if, as Robin observes, the theoretical quantum physicists sat around saying, “Hmm, what can we postulate to make our sums add up?”
This past week has seen the culmination of the economic crisis that, to my mind, began with the election in 1980 of Ronald Reagan and the ultra-conservative wing that believed “government isn’t the solution, it’s the problem.” As Rachel Maddow observed Monday evening, anyone who believes government is the problem should not be allowed to run one. I believed then, and I still believe, that this was the beginning of the end, the point at which sensible people who disagreed on methodology but were otherwise sane about basic values like fiscal responsibility started going off the deep end into wacko territory. In the late ‘70s when I was in college, one could still have coherent conversations about the inherent non-workability of hyper-capitalism, one could debate the philosophy that money was the be-all and end-all of America with opponents who conceded the point every now and then. These days, not so much.
Even so-called liberals like the actually centrist Barack Obama can’t bring themselves to speak truth to power when it comes to capitalism. Our country has completely turned around from “government exists to serve, corporations exist only with the people’s and government’s permission” to “government should be run [into the ground] like a corporation, always for profit, and public service be damned.” (This is, of course, accompanied by a usually complacent news media which itself was co-opted in the Reagan years, with the burgeoning of cable television, from its previous existence as primarily a public service and pressured into becoming be a profit center, leading to the ever-increasing sensationalism and trivialization and cult-of-personality-itis that modern “news” has become.)
It’s no wonder we can’t seem to think clearly about the problem. We still can’t acknowledge the roots of its inception. Profit, like gasoline and potable water, is a finite quantity. If someone wins, someone else has to lose. There’s only so much money to go around, and at the moment most of ours is going around China.
The conservative (both Republican and Democratic) administrations for the past quarter century have taken this Orwellian nonsense to ever greater heights. Take modern “health care.” Far from existing as it does in other countries — again, primarily as a public service — the US health industry is mostly run by insurance companies, for profit. As has been pointed out by people more eloquent than me, profit isn’t made from sick people. It’s made from not helping those who need it the most, in favor of paying attention to those who need it least. Thus, health care in the US has taken on the exact opposite meaning that it’s supposed to have.
It’s also common wisdom, never to be questioned, that the stock market is A Good Thing. From the time my Dad first tried to explain it to me, it always seemed to me that the stock market was a form of legalized gambling — no different, really, than the poker machines he and Mom loved to play in Vegas and Atlantic City. Well, a little different. The exchanges had built up a whole vocabulary of obfuscating jargon designed to make them look like, again, the exact opposite of what they were. Take the idea of “selling short.” Now, this is unbelievable to me. Essentially it’s the practice of selling something that you don’t own. Now granted, we’ve gotten pretty good at that through the centuries; just ask any landlord. The concept of land ownership was foreign to the people who lived in this country before we went about wholesale slaughtering them. Manifest destiny, baby! It’s a short step from “we own this land” to “this isn’t nature, to which we are inextricably linked, it’s ‘resources’” to “hey, this isn’t really mine but it only exists on paper anyway so as long as it’s imaginary let’s pretend it is mine and I can play with it however I want to.”
Selling short also allows “an investor to gain from the decline in price of a security.” That’s right, people root for themselves to make money off others’ misfortune. In a way, it’s acknowledging the finite nature of profit, but it’s gaming the system. It should be illegal. But between the doublespeak and the blind acceptance of capitalism as The Best System In The World, Period, it’s not going to be illegal any time soon. Most of what’s led to the current economic crisis would be illegal in a sane world. But the world, at least this country, isn’t run by sane people. It’s run by people who believe in profit über alles, who think government is a problem to be bulldozed over like so many flooded New Orleans homes.
And we celebrate this thinking. I know quite a few comic fans and professionals who still wax nostalgic over the good old early ‘90s when the speculeeches came to town, bored with numismatism or baseball cards or whatever their previous high had been, looking for their next fix in the world of funnybooks. How that rising tide lifted all boats as crappy titles sold for obscene amounts of money, artists made enough to start their own companies, and writers paid their rent with their royalties.
Until it all, inevitably, crashed. And as the speculeeches moved on to seek their next high, comic shops closed by the score with millions of dollars in unsold inventory, and kids got bored once everything stopped looking so shiny and they realized there was very little storytelling underneath those multiple lenticular covers. But the leeches didn’t care. They’d already gorged themselves on the industry’s blood. And a pound of flesh, give or take.
What goes up, must come down. That’s basic Newtonian law. It’s not some glamorous Theory of Everything, desperately seeking to explain the as-yet-unexplainable by saying, “a-HA, it’s all due to dark matter, a concept that didn’t exist until we made it up to force our sums to add up, and we’ll prove it to you just as soon as the electrician or someone like him shows up!” It’s just common sense. Which really ought not to be in such a finite supply.
Elayne Riggs blogs at Pen-Elayne on the Web and, as that blog’s name would indicate, all in all she’d much rather be writing again about Paul McCartney — currently in Israel — but really, she’s done like three Beatle-related columns so far and she needed to give it a rest in favor of Mike Gold this week.
Long term? Vas is los “long term” of which you speak? Hey bucko, get with the program, we’re a culture of immediate self-gratification now! And now! And now again!
I almost did a shout-out to you, Vin, about the order of the speculeech craze in the ’90s, as I remembered you worked for a card mogul then did ComicFest, but the way the column flowed I wound up not talking about the chronology of it all. Good job, too, then I might have had to use Chronos instead of the Calculator as my illustration.
"Long term? Vas is los "long term" of which you speak? Hey bucko, get with the program, we're a culture of immediate self-gratification now! And now! And now again!"Ah, I know what you mean. And yet, let's not be so cynical as to think that everybody in this culture demands immediate gratification for everything in their life they want gratified. Or at least, let us be hopeful enough to think that folks can, where appropriate, be turned from their self-gratification penchants. There are certainly investors who do recognize a long-term horizon, whether it's a worker saving for retirement, or an infant's parent saving for college…And, really, it was retirement-savers who I was thinking about earlier. This article talks about 50 million workers participating in 401(k)-like plans, and 46 million in IRAs. Many of those millions are surely close to retirement, needing to access those funds soon, and facing some tough decisions. But also, many of those millions are surely still decades away from retirement; for people who have that much time, it'd be a pity indeed if the current financial crisis causes them to flee the stock market for other kinds of investments that aren't going to meet their needs.
I don't want to make light of the current financial crisis, how it's affecting everyone from Wall Street to Main Street (as the newscasters say,) but specifically to the notion that "selling short" on investments is odious, I'll just comment that were it not for short-selling, the climax to TRADING PLACES wouldn't have worked, and that's one of my favorite movies…Less facetiously, I'll say that there's been some good coverage as to how exactly this current financial crisis arose (This American Life's piece at http://www.thisamericanlife.org/Radio_Episode.asp… comes to mind.) It behooves us all to understand, as well as we can, what happened here, if only so that we can keep our elected representatives accountable and suggest cogent reform.
Any time an item becomes a Hot Collectable, and people are buying the item for anything other than its actual purpose (comics for reading, oil for powering devices, houses for living in), you run the risk of the price far outstripping the value. And all it takes is one person saying "Hey, if this really worth all that much?" for it all to collapse like Spidey's webs after an hour.The Housing Crisis can be blamed greatly (tho not exclusively) on people buying houses for short-term investment. Not "buy the house, wait 40 years for the price to rise and sell it so you can retire", but "Buy the house, wait for the price to rise in six months and sell it to somone else who will also try to sell it in six months". That can't last. It's a massive pyramid scheme. When kept within reasonable limits (possibly the most controversial words of this entire post), the system works. But far too many people got involved who didn't appreciate that, or didn't want to wait, the system was changed to aim more towards short-term profits, as opposed to long-term gains. Stocks, real estate, etc, these are all designed to be LONG-term investments. It's the EXACT same thing that created the first Crash. People were getting into the stock market and making massive amounts of money, not off the value of the companies they were investing in, but from the people who came in behind them. They were writing popular songs about the Stock Market. And then sombody hesitated for a second, and it all fell apart, like that Visa check card commercial where one guy tries to pay with cash (the phillistine) and the smooth consumer machine all collapses.They doped the racehorse, watched it win ten races in a row, and acted surprised when it dropped dead. I can't lay the blame at the feet of the investment banks, just like I can't lay the blame at the feet of the publishers for the 90's comics glut. Both were replying to what the market demanded. Marvel could have easily said they weren't going to do any more four-cover bagged with a card editions, but everyone was making money, so why stop? Jim Shooter tried to stop Valiant from doing their chromium cover million-copy print run of Bloodshot #1, and got squeezed out of his own company. The banks could have said no, but nobody forced the public to get mortgages they couldn't afford. It's the same argument as Big Macs, really – as convincing the advertising is, the burgers are not being distributed at gunpoint. It's not a popular argument, but nonetheless true.The fault lies not in the NorthStars, but in ourselves.
"Stocks, real estate, etc, these are all designed to be LONG-term investments."This is a really good point, and one worth emphasizing.As traumatic as the current financial situation is, it would be a huge shame if it caused people to pull out of the stock market for their legitimate long-term needs. Because even with the fluctuations of the past few weeks and months, these sorts of investments are remain the best bet for building wealth over the long term (as in years-and-years long-term.)
And it was all so predictable. I'm not even involved in financing, and I could see that there was a problem.Savings & loan deregulation.Energy deregulation.Airline deregulation.Investment deregulation.All followed by huge busts. And a lot of criminal activity.Those deregulations were there for a reason. We allowed our leadership to forget the past, now we are doomed to repeat the past. People under 50 better watch how they spend their money from now on. People under 40 had best kiss goodbye any thoughts of seeing Social Security money, as I think SS is the next thing to be deregulated.