2010-11-06T12:19:15+00:00

Sudhir Venkatesh, Gang Leader for a Day: A Rogue Sociologist Takes to the Streets

November 6, 2010/stevereads/5 Comments

The author looks at the camera. He's Indian and looks kind of tough, but he's also clean-cut with a nice haircut. He's a handsome fellow. He's wearing a leather jacket with the collar turned up. Behind him is a bombed-out inner-city neighborhood

The greatest danger of a book like this is that it could become catastrophe tourism — the sort of book that you read, then recite to your friends with excessive condescending blinking that says, “Yeah, it’s real tough out there in the shit, man.” Fortunately, [book: Gang Leader for a Day] is very much not like that. The author himself also isn’t trying to impress you with the friends he made in the gang, and he removes himself as much as possible from the story. That story is about the people living in the projects; the author only appears when he explains — always briefly — how he got the access he did.

Venkatesh entered graduate school in sociology at the University of Chicago in the early 90s, he tells us, and rapidly found himself dissatisfied with the rarefied, high-level statistical approach to understanding groups of people. In order to feel that he knew something about these groups, he had to get to know actual people. So off he goes to the now-demolished Robert Taylor Homes, on the south side of Chicago. He walks into one of the homes, and just happens to run into a charismatic gang leader named JT. JT is central to the rest of the book: he shows Venkatesh how gangs work at the lowest levels, he eventually introduces Venkatesh to the very wealthy men at the top of the Chicago gang pyramid, and — as the title suggests — he lets Venkatesh “run” the gang for a day.

Let’s back up a little bit, though. The remarkable thing about this introduction is how short it is: there’s only a few pages between the start of the book and when Venkatesh starts spending serious time with JT. A more self-absorbed author would have spent lots of time laboring over the start of grad school, and would have even celebrated his remarkable stroke of luck at happening upon JT so quickly. But no: Venkatesh is in a hurry to tell us about the people he met. He’s got a heck of a story to tell, so he dives right in.

The eventually goal of his Ph.D. dissertation was to map out how the underground economy in the projects works. Central to that economy is the utter failure of official institutions to support a humane life. I would say that Venkatesh “portrays” the Chicago Housing Authority (CHA) as hopelessly corrupt and inept, if it weren’t, instead, that Venkatesh takes this as a basic fact of life. Everyone in the book knows that the CHA is a massive scam, and besides: the book offers endless examples of its criminality. Why bother arguing a point when you can instead show its obvious truth?

The folks living in the projects know, for instance, that the CHA will never replace the front doors to their apartments if those doors get busted down. On freezing, windy, snowy Chicago winter days, with the homeless and the drug-addicted squatting in the hallways, the missing doors can be fatal. Here’s where the gang, and Ms. Bailey (the grand dame of her swath of the Robert Taylor Homes) move in. Favors get traded: the CHA and Ms. Bailey have an I-scratch-your-back-you-scratch-mine policy going, someone knows someone else, someone else owns a spare door, someone else can offer a temporary apartment while the one’s getting repaired.

There are shootings and stabbings all over the place, but no one expects that the police will come investigate them. There are rumors, in fact, that a crooked cop forced one of the project’s women to perform oral sex on him in front of her boyfriend. The police are mostly not the projects’ friends: they stay away when they’re needed, and abuse the residents when they do stop by.

There’s no legal support for the poor folks there. The CHA provides almost no housing support. Upwards of 90% of the projects’ residents are unemployed; those who do manage to get an education and a job leave and never come back. … Well, except for JT: he left the projects, got a business degree, and returned to a managerial role within the Black Knights gang. I couldn’t help but picture Stringer Bell from [film: The Wire] playing the role of JT, almost from the start of the book.

In fact, I couldn’t help imagining [film: The Wire] as a film adaptation of [book: Gang Leader for a Day]. The guiding idea behind [film: The Wire] is that there aren’t good guys and bad guys; there are just forces operating on everyone from above and below. You do certain things to placate your boss at your company, and your boss is doing things to placate his. Go up a few levels, and the CEO is trying to get what he wants, subject to the whims of his board and the stockholders. Turns out the same thing is true in the Robert Taylor Homes: JT and the other managers are trying to keep their gang wars as quiet and contained and predictable as possible, because there’s nothing the police hate more than unpredictable violence that spills beyond the confines of the projects. CHA employees don’t need to demand the occasional sexual favor from Taylor Homes residents, but everyone knows that nothing’s going to get done if those favors aren’t forthcoming. (There’s a lot of casual prostitution in the Homes. It’s not a job; it’s a response to a pressure.)

Of course Venkatesh is subject to his own pressures. He has to get out a Ph.D. thesis. And it takes him a while to realize that he should consult a lawyer: he can’t watch over the illegal activities of a drug-selling gang without eventually inviting a police inquiry. In a really astonishing passage, he realizes that everyone else within the Homes has known this from the start. From the start, they’ve been keeping the really incriminating stuff away from him. Everyone other than Venkatesh is aware of the [film: Wire]-like world they’re living in.

Which makes sense, of course: most of the book’s readers live in a world with well-regulated, formally contracted transactions between well-behaved actors. Things break; we get them repaired. We hear gunshots, we call the cops, the cops come. Enough middle-class white people band together to make the South End a nice place, and eventually it works out. Ours is a world where everything functions more or less as it should. Peel back just a layer or two, though, and you lay bare the [foreign: quid pro quo] underlying it all. Informal institutions subject to their own rules govern everything, because the formal institutions have utterly failed. (This book makes economics look comical. Economics often studies only rigorously formalizable contracts; it’s as though medicine only studied diseases that aren’t cancer.)

I can’t recommend [book: Gang Leader For A Day] highly enough. Like [book: Common Ground], it ends up speaking larger truths by never wavering in affection for its subjects. This affection translates into a relentless need to portray them honestly, warts and all. It’s a triumph of storytelling.

The modern world is interesting for reasons other than the Internet

October 20, 2010/stevereads/Leave a comment

William F. Buckley, chin held way up, looking thoughtful with his hands near his chin in some sort of weird 'wait, how did your hand end up in that position?' kind of posture Jessa Crispin linked via Twitter to a piece about novelists’ difficulty talking about the Internet. Should their characters be like a lot of us, constantly switching between Facebook, Twitter, email, phone calls, text messages, and the rest? Should their books deliberately *avoid* writing about those things, and instead focus on (here I adopt a Brahmin chin tilted 30 degrees up from the horizontal; imagine Bill Buckley saying this) “the eternal present”?

Listen, the Internet is important. Many of us spend a lot of our time on it. But we spend a lot of our time doing lots of other things, too. How about focusing on rampant job insecurity, for instance? How about focusing on what happens when people lose jobs and realize that there’s virtually no social safety net left?

I’m not saying that writing has any obligation to be socially relevant; it doesn’t. As a practical matter, writers only have an obligation to do what pays the bills. (Or not! They might not be able to make money writing, so they do whatever else they need to do to pay the bills, like sling lattes at Starbucks while they write on the side.)

What I *am* saying, though, is that we have a tendency — either when we look at the world we live in now, or at former worlds — to focus on one detail and obsessively assert that That’s What Everyone Spent All Their Time Thinking About. Look at slavery, for instance: it’s really hard to read about the era between the signing of the Constitution and the Civil War without getting this picture of everyone just counting the days until society was torn apart by war. Or England from the late 18th century through the mid-19th: there’s this picture of people toiling away in the dark Satanic mills and thinking nonstop about What Industrialization Meant when they weren’t Suffering The Ill Effects of Industrialization. Surely these things were important — world-historical, even — but so were lots of other things.

And in the grand scheme of modern living, the Internet is *time-consuming*, but it’s not at all clear that it’s *important*. Spending time with your family is important. Getting enough sleep, eating well, and exercising are important. Not needing to drink yourself to sleep at night is important. Inasmuch as work-related stress impinges on all of these things, work is very important. Facebook is not important.

So why are there so many more stories and essays about the effect of the modern media environment on fiction writing than there are about the effect of job insecurity? David Foster Wallace, for instance, spent just about his entire career obsessing over television’s and the web’s effect on fiction writing: his essay “E Unibus Plurum” [sic], which was included in [book: A Supposedly Fun Thing I’ll Never Do Again]; [book: Infinite Jest] itself (about a movie so addicting that you’d sacrifice anything to keep watching it); an essay or two in [book: Consider the Lobster]; and a good fraction of the post-[book: Infinite Jest] interview with Wallace in [book: Although Of Course You End Up Becoming Yourself] focus on the media. Wallace is considered an “important writer” largely on that basis.

Where are the people writing novels about job insecurity? It sounds a little silly when phrased that way; no one would really want to read that. But it’s not clear, stated abstractly, that anyone would want to read a novel about the effects of television on American [foreign: ennui], but there you have the shortest possible description of [book: Infinite Jest].

Hypothesis: Wallace’s fiction — and all other fiction coming from people who obsess more about the media environment than they do about the rest of life — appeals more to urbane single dudes in their 20s and 30s, whose biggest concern is that they use Twitter too much, than it does to folks who are having trouble making ends meet.

Then again, the last piece of fiction I can remember reading from someone who was self-consciously trying to Engage With The People was George Packer’s [book: Central Square], about my beloved neighborhood. I give Packer credit for trying, but that book was condescending, as virtually all of Packer’s writing since then has been. (Though you really, really, really need to read his [book: Blood of the Liberals].) Condescension may be inevitable when you’re deliberately trying to make a point through your fiction; you engage in telling rather than showing.

So maybe the idea should be: don’t write a novel that tries to talk about income inequality, or talk about job insecurity, or talk about the pernicious effects of Angry Birds. Just write a novel that respects its characters enough to depict them honestly, and hope that anything you want to say will emerge naturally from that. When I find such a novel, I’ll let you know.

Dashiell Hammett, The Thin Man

October 13, 2010/stevereads/Leave a comment

Standard Everyman's Library cover: a photo of the author with an effect over top as though you were viewing him through many very thin blinds on a window.

This is a bit more fun and quite a bit less dark than [book: The Maltese Falcon]. Though both here and there, someone is dead within the first couple pages, basically within mere moments of contacting the narrator or main character.

Here the narrator is a lovably lazy, bibulous man named Nick Charles. He used to be a private investigator, but he’s long since retired to attend to the investments left to him when his wife’s father died. Charles jokes on a few occasions about marrying her for the money, and you’re never quite sure if it’s a joke or a “joke.”

He comes semi-unwillingly out of retirement to investigate Just One More Case, when his old lawyer friend and war buddy calls him up to say that an old eccentric client has gotten back in touch; soon after, a confidant of that client is dead, and we’re immediately to wonder: did the crazy guy do it? (Answer: maybe!)

[book: The Thin Man]’s main allure is the nutty family from which the crazy man comes; they’re brilliantly drawn characters. Years ago he’d divorced his capricious, violent, unpredictable wife Mimi, who lights up this book’s pages (even if it’s a blacklight) and leaves you just a little terrified every time you meet her. She’s such a caricature that she belongs on stage where she can be rendered operatically. (I imagine this was deliberate. [book: The Thin Man] got turned into a series of six movies and a television show.) Mimi’s son reminds me of Elijah Wood’s character from [film: Sin City], only without the violence but with the capacity, lurking just below the surface, for utter terror.

Every Hammett novel in this collection must feature a gorgeous 20-something blonde. The one here is Mimi’s daughter, who has apparently grown from a gorgeous child to a delicious adult. At one point she passes out drunk, and Nick and his wife undress her for bed — seemingly for no purpose other than so that Hammett and the audience can gaze lovingly upon her “beautiful little body.” Whenever she shows up, someone is drooling over her; clearly we’re meant to as well.

Again, since we know that we’re going to be led bewilderingly through twist after twist and turn after turn, the plot is incidental. Phone calls, letters, and chance meetings seemingly deflect Nick from finding the killer, but we know that in the back of his capacious mind he’s keeping it all together and ploddingly unmasking the bad guy. Meanwhile he does some copious drinking. It’s great fun.

Jill Lepore, The Whites of Their Eyes: The Tea Party’s Revolution and the Battle over American History

October 12, 2010/stevereads/Leave a comment

(__Attention conservation notice__: just about 1100 words, plus some block quotes, on the systematic perversion of American history to serve ideological ends, and Jill Lepore’s remarkable stand for viewing our history through clear eyes.)

Tomato-red background. Title in bold white sans-serif, subtitle in black non-bold, author name in white bold. 'Author of Pulitzer Prize finalist _New York Burning_' in smaller print below. Two colonial figurines at the bottom of the cover. One is standing, looking sort of pensive and formal. The other is laying on his back, pointing his musket up towards the top of the book.

Let’s take it as an axiom, to begin, that the Constitution is not perfect. I’ll hand the mic here to Justice Thurgood Marshall, to whom Lepore handed it as well:

> The focus of this celebration invites a complacent belief that the vision of those who debated and compromised in Philadelphia yielded the “more perfect Union” it is said we now enjoy.
>
> I cannot accept this invitation, for I do not believe that the meaning of the Constitution was forever “fixed” at the Philadelphia Convention. Nor do I find the wisdom, foresight, and sense of justice exhibited by the Framers particularly profound. To the contrary, the government they devised was defective from the start, requiring several amendments, a civil war, and momentous social transformation to attain the system of constitutional government, and its respect for the individual freedoms and human rights, we hold as fundamental today. When contemporary Americans cite “The Constitution,” they invoke a concept that is vastly different from what the Framers barely began to construct two centuries ago.

The Civil War is refutation enough of the eternal wisdom of the Framers. The fact that the Constitution explicitly counts a slave as three-fifths of a human should have long since put to bed any rumors of its perfection. African-Americans are in a better position than most to recognize the Constitution’s defects.

Yet we accept the mythology that we’re dealt. In this country, the Constitution’s perfection, and the immortality of the Framers, is as close as we get to gospel (quite literally — see below). Everyone wants the Constitution for himself. Whenever someone wants to make a change to the existing order, the most resonant thing he can say about it is that it brings the U.S. closer to the perfection that lies latent within the Constitution and the Declaration of Independence. The [court: Brown v. Board] decision sought integration to bring us closer to the ideals of the Constitution, while at the same time parents in Boston who opposed forced busing declared Arthur Garrity’s decision the end of American liberty.

The history of the U.S. can in many ways be viewed as the history of misrepresenting our history. Everyone wants to make the story of the founding his own, so everyone has to find a way to mold the founding into his preferred shape.

Take, for instance, the famed “Christian nation” story. According to this story, the country was Christian at its founding, the Framers knew that religion is inseparable from good government, they knew that the purpose of government is to bring people closer to God, and the separation of church and state is a myth. In this Christian nation, Connecticut’s 1639 Fundamental Orders decreed that one of its purposes was “to mayntayne and presearve the liberty and purity of the gospell of our Lord Jesus.” Which is why it’s important to observe, as Lepore does, that

> Following the faith of their fathers is exactly what the framers did not do. At a time when all but two states required religious tests for office, the Constitution prohibited them. At a time when all but three states still had an official religion, the Bill of Rights forbade the federal government from establishing one.

Meanwhile, when conservatives insist that we read the Federalist Papers, they seem less insistent that we read the parts where the Framers were inveighing against the evils of standing armies — hence the part of the Constitution which embodies that revulsion by giving Congress the power

> To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years

That two-year limitation is in there expressly because the Framers thought — like many classical small-r republican thinkers over the centuries — that standing armies were a great evil.

Lepore’s ingenious little book is meant to revisit points like these: to remind us that the Framers by no means spoke with one mind and that when they did speak with one mind they often contradicted their modern interpretation; and to ensure us that if they returned to us today they would probably *not* be horrified by what we’ve made of their document. It was broken at birth. The U.S. has spent centuries trying to repair it.

Lepore interviews dozens of Tea Partiers on a cold day when they visited Boston (Lepore’s town — she’s a professor at Harvard) in early 2010. Every time a Tea Partier says something about what the Framers would have wanted, or how liberals are destroying America, she steps back as a good historian would and studies the truth of their claim. Liberals believe that America is always wrong, say Tea Partiers? You need to go back a ways if you want to find the first person to believe that about the U.S. Try Frederick Douglass:

> What, to the American slave, is your 4th of July? I answer; a day that reveals to him, more than all other days in the year, the gross injustice and cruelty to which he is the constant victim. To him, your celebration is a sham; your boasted liberty, an unholy license; your national greatness, swelling vanity; your sounds of rejoicing are empty and heartless; your denunciation of tyrants, brass fronted impudence; your shouts of liberty and equality, hollow mockery; your prayers and hymns, your sermons and thanksgivings, with all your religious parade and solemnity, are, to Him, mere bombast, fraud, deception, impiety, and hypocrisy-a thin veil to cover up crimes which would disgrace a nation of savages. There is not a nation on the earth guilty of practices more shocking and bloody than are the people of the United States, at this very hour.

If they’re even guilty themselves of hating America, liberals didn’t invent that hatred. Hating what the country stands for is as American as slavery.

So what the Tea Party advances is a strange kind of fundamentalism, in the literal sense of that word. Fundamentalism (the OED traces the word to 1923, when it was used to refer to American Christians) believes in returning to some original text which it believes to be flawless and true. Constitutional fundamentalists believe that they can find a single, true meaning in the original document, even though we know that the origins of that document were far from holy. The origin was a compromise between northern and southern states meant, for one, to keep the country from flying apart. (It did anyway, 70 years later). Yet this fundamentalism, for whatever reason, chooses to ignore the supporting texts and the all-too-well-documented history surrounding it.

Academic historians, for their part, have not helped. As Lepore notes, historians have long resisted the urge to “presentism” — the idea that you can naïvely map the past onto the present and draw some sort of easy moral. (One thinks of “The past is a foreign country; they do things differently there.”) The academy has become more cloistered, and as a result has stopped engaging with the public on the great themes. Instead, when historians interact with the world nowadays, they tend to narrow the lens as far as they can and write little biographies. The last historian to engage with the great themes, says Lepore, was my hero Richard Hofstadter, of the magisterial [book: Anti-Intellectualism in American Life]; it’s truly a stellar example of the great-theme brand of history. “The historians will have a field day [with his The American Political Tradition And the Men Who Made It]”, he said, “but I am in hopes that some of the non-academic people will like it.”

Having largely left the field, historians have allowed all manner of charlatans to move in and define what our history is. The Texas School Board could leap in and define Thomas Jefferson — “who once wrote about a ‘wall of separation between Church & State’” — out of our history, and instead add Thomas Aquinas to the list of thinkers who inspired the Revolution. (Poor Thomas Jefferson. The man has been endlessly defined into and out of American history so many times since his death; see [book: The Jefferson Image in the American Mind] for the final word on this score.)

Lepore, with [book: The Whites of Their Eyes], has forcefully retaken the field. She’s a historian engaging directly with an anti-historical ideology. In a remarkably concise and deceptively simple way, it returns to the tradition of grand history. She clearly rushed it into print to engage with a current controversy, but didn’t skimp at all on historical rigor. It’s a treasure, and something you’ll want to hold in your back pocket for the next few troubled years.

What Adam Smith really said: chapter-by-chapter study invitation

October 11, 2010/stevereads/10 Comments

If I understand my intellectual history correctly, Adam Smith is much-misunderstood. We typically quote two passages from [book: The Wealth of Nations]:

> It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens.

and

> By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

And that’s about it. But it’s a large book, no? Just about 600 pages, as a matter of fact. And he has a second book, [book: The Theory of Moral Sentiments], that’s almost as long. That’s 1200 pages, from which we usually extract about two paragraphs. How about this other paragraph, in which Smith makes the case for what we’d today call progressive taxation?

> The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich; and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be any thing very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.

That’s three paragraphs, anyway. Let’s do all 1200 pages, shall we? Starting about a month from today — Monday, November 15th — I’m going to start reading [book: The Wealth of Nations] and [book: The Theory of Moral Sentiments] and offer a chapter-by-chapter excursus on this here blog. Let’s have a big old book group about What Adam Smith Really Said. I predict that we’ll be surprised. I expect that he’s not nearly the libertarian, every-man-for-himself, minimal-government-is-the-best government guy that we’ve come to know.

But I don’t know! I’ve not read Smith (apart from three paragraphs). It’ll be a surprise. Let’s do it.

The editions I’m thinking of are linked above, but again:

* [book: The Wealth of Nations] (Modern Library, unabridged)
* [book: The Theory of Moral Sentiments] (Great Minds, not sure if it’s unabridged but seems to be)

Get them out of the library, buy them from your favorite bookseller, etc. Starting in a month, let’s talk Adam Smith.

__P.S.__: My homedogg Paul noted that the initial [book: Wealth of Nations] link I provided was an abridged Great Minds edition. I’ve corrected that to the Modern Library edition.

Dashiell Hammett, The Maltese Falcon

October 9, 2010/stevereads/Leave a comment

Standard Everyman's Library cover: a photo of the author with an effect over top as though you were viewing him through many very thin blinds on a window.

Somehow I’ve been entirely innocent of detective novels, though I’ve really enjoyed what I’ve seen of the genre on film; I loved [film: The Big Heat] and [film: The Big Sleep], for instance. But somehow I’ve never seen [film: The Maltese Falcon] on film, even though I love Humphrey Bogart and have long been told that the movie is a must-see. So when my friend Dan Milstein emailed me to say that the book has some of the best dialogue he’s ever read *ever*, I had to pick it up.

It doesn’t disappoint. Actually, maybe there’s one disappointment, namely that I have no choice but to envision Bogart in the role of Sam Spade. Spade, if you’re not aware, is the prototypical (I wonder if he actually *is* the prototype) private detective. He’s practically a rock moving through the world: he’s entirely self-sufficient, impermeable to outside influences of any kind, and keeps his own council. The reader is just as uncertain as any of the characters about what drives him. Consequently, from moment to moment you have no idea what he’s going to do. But you can be sure that he’s never going to lose his cool. He’ll never strike anyone in anger, because it’s not clear that he ever gets angry. He’s cool as a cucumber, always plotting his next move. He’s always one step ahead of the bad guys. You know that everything will be wrapped up at the end with a nice bow, and that Spade’s hands will remain perfectly clean.

I used to frown on this sort of genre, because it’s very formulaic. Nowadays I’m inclined to believe that most popular entertainment (some of which deserves to be called “art,” some of which doesn’t) is formulaic, and that most innovation comes within formulae. You know a lot of things already about detective novels and movies. There’s going to be a drop-dead gorgeous dame who’s going to double-cross the hero, possibly before triple-crossing the bad guys and redeeming herself. All the women will be straight out of Hitchcock: bombshell seductresses who are strong-willed right up to the moment that they swoon into the protagonist’s arms. There are going to be many reversals of fortune. There’s going to be a MacGuffin that everyone’s going to be obsessed with chasing. You can’t be sure that the police are good guys. Finally, the character of the private dick himself will be sweet and sensitive beneath a surly exterior. So the plot is already very constrained; it takes a brilliant writer to keep the story gripping even within those constraints.

[book: The Maltese Falcon] is brilliant indeed — gripping and intensely readable the whole way through. The plot is basically incidental, but let’s summarize it anyway. Right from the start, the beautiful dame, a Miss Wonderly, is waiting for him in his office. She tells Spade that her 17-year-old sister has run off with a man named Floyd Thursby, and that Wonderly has a date with him that very night to convince him to bring her sister back. She asks Spade and his partner to follow Thursby, perchance to find her sister and bring her back before Wonderly’s parents find out what’s happened.

Spade’s partner is dead within the first eight pages, Thursby’s dead within 19, Wonderly’s name isn’t actually Wonderly, we never hear again about the sister, and everything is actually baroquely related to a priceless antiquity that gives the book its name. I think I’ll stop there; the great joy in this novel is finding out how everything unwinds and how Spade navigates it all without getting the slightest bit of muck on his suit.

It’s a sheer joy, and Hammett is a superb prose stylist. His writing is as deliberate and forceful as Spade: we picture Hammett walking into a room, quickly sketching out the people and objects within it, and chopping the dialogue out of blocks of marble with a few clean hits on the chisel. All the lines are clean and neat, and we picture every scene perfectly with seemingly no effort on Hammett’s part.

I foresee myself developing a Hammett-and-Chandler obsession.

__P.S.__: As you might be able to tell from the cover photo at right, [book: The Maltese Falcon] comes from a collection of three novels in a single Everyman edition. I’ll review them individually here.

James Hamilton-Paterson, Cooking with Fernet Branca

October 7, 2010May 5, 2017/stevereads/Leave a comment

Roger Ebert is fond of saying that a movie is not about what it is about; it’s about how it’s about what it’s about. Likewise, what’s great about [book: Cooking with Fernet Branca] is not that it’s about meals made of dog and cat, but how it’s about meals made of dog and cat.

This is one of the most satisfying books I’ve read in a very long time, start to finish. Not only is it one of the funniest things that I wager you’ll read this year; it’s also enjoyably written from the perspective of unreliable narrators. In fact a lot of what’s funny and inventive about it is the wildly different takes that both narrators have on the same events.

Marta and Gerry occupy neighboring villas on the top of some remote Italian mountain, each looking for solitude for his or her own reasons. Gerry is a writer, pounding out ghostwritten biographies of vapid celebrities (race-car drivers, downhill skiers); Marta composes scores for artistically important films. From Gerry’s perspective, Marta is some frumpy Eastern European peasant with a vague command of English. From her perspective, Gerry is an insular, probably homosexual Brit with a strange, characteristically British absence where his bottom should be. Unexplained helicopters visit Marta in the dead of night. Gerry interviews one of his emptyheaded celebrities on the night of one of these helicopter arrivals, and his credulous-hippie mind swears that Marta has been visited by an alien. The confusions pile up between Marta and Gerry.

Most of what’s hilarious about [book: Cooking with Fernet Branca], though, has nothing to do with a comedy of errors. Indeed, I think most of the plot is incidental; it serves as ornamentation draping off the outlandish stylistic frame and one of the absurd central premises of the book — namely, that you can cook anything with Fernet Branca.

Fernet, for those of you who are unware, is an Italian after-dinner bitters which the inestimable mrz tells me is used in Italian households to soothe an upset stomach; it quite often pulls off this trick by doubling as an emetic. (Personally, I love the stuff, and I find that it does wonders for the digestion.) Fernet shows up on most every page of Hamilton-Paterson’s book; not only does Gerry toss it liberally into all his dishes, but the characters consume quantities of the stuff that are well beyond the realm of reasonableness. [1] Glasses, bottles, cases of the stuff get slurped down throughout the course of this book — with, it must be said, truth-to-life about just how devastating that much Fernet would be to your head. Among the recipes containing Fernet:

Garlic and Fernet Branca Ice Cream, whose intended purpose is to make Marta get the point that she’s not welcome but instead awakens Gerry “with a series of awesome farts…on the ground by [his] front doorstep with dawn breaking all around.”
Rabbit in Cep Custard, containing “1 kg fresh rabbit chunks”
Alien Pie, containing “1kg smoked cat, off the bone”
Otter With Lobster Sauce, containing “1.5kg otter chunks”

These recipes are all, it seems to me, entirely possible, if horrifying. (Stay away from my cats.) I’m curious to what extent Hamilton-Paterson replicated them in his own kitchen.

Hamilton-Paterson’s sense of humor is wicked and completely tweaked. Some examples:

On the plane just now I was toying with the idea of Poodles in Noodles. Who knows, its consonance may be more promising than the actuality and I’ll have to consult a Filipino friend of mine about it first. The same goes for Pekes in Leeks.
Have you ever embarked on something that looked completely straightforward but which has turned out to be bafflingly technical? For instance, I was completely flummoxed some time ago in a dentist’s waiting room when trying to kill time with the crossword in the current number of [mag: JAPEDA], the [mag: Journal of the American Pedophilia Association] — a scholarly magazine I had not encountered before. … I labored in vain for half an hour, although it did occur to me later that American may spell “pyjamas” with an “a” in place of our “y”.
Meanwhile, I have gone right off my beautiful idea of pears in Gorgonzola with cinnamon cream. It’s all Marta’s fault. Had she not drenched that putty ball of hers in the cinnamon cream I was experimenting with the other day it might still be a possibility. But the whole idea now reeks of linseed oil and bullying and has been ruined for me. Imagine Bach busy writing a soulful aria for the *Saint Matthew Passion* when in the street outside a butcher’s boy goes past whistling a popular ditty about three jolly swineherds. Suddenly poor old JSB realizes it’s the very tune he’s now writing, only much faster and in a major key. “God *damn*,” he mutters softly to himself as he slowly tears up the manuscript, having unwittingly had a preview of what in a hundred and fifty years will be known as the unconscious. That’s pretty much how I feel about the irreparable damage Marta has done my cinnamon cream.

I laughed constantly while reading this book — or, when on the T, where outright laughter is maybe frowned upon, I carried a devilish grin on my face at all times. Such a delight, this book. Go out, grab a copy, and enjoy the next few hours of your life.

[1] — (You drink maybe an ounce at a time. The people at Drink mixed me a flip based on it once. Looks like Cocktail Slut long ago discovered the Fernet Flip, as has Cocktail Chronicles.)

Anonymous Hedge Fund Manager with n+1, Diary of a Very Bad Year: Confessions of an Anonymous Hedge Fund Manager, and Satyajit Das, Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives

October 2, 2010/stevereads/2 Comments

Red background. Title in black sans-serif capital letters, subtitle in white underneath. Silhouette of a businessman sitting on a folding chair, head in his hands. Behind him and to his left sits his briefcase, on which is written the words 'with n+1'.

Author, title, and subtitle written in white. The word 'money' is shot through with holes. In the background are several six-shooter bullet holders (what do you call those? I mean a collection of bullet chambers). In one of the chambers is a dollar bill; in another is the silhouette of a man running with a briefcase; in a third is a bullet

(__Attention conservation notice__: 1600 words reviewing two books from the perspective of securities traders. Run right out and read [book: Diary of a Very Bad Year], and skip Das.)

These books need to be reviewed together, because they overlap in a lot of ways. For one, the author of [book: Traders, Guns, & Money] is unbelievably self-aggrandizing, while the subject of [book: Diary of a Very Bad Year] is just literally unbelievable.

[book: Traders] came out in 2006, before the world had fully melted down, so it gets some credit for being out in front about how incomprehensible certain derivatives, particularly the famed Collateralized Debt Obligations (CDOs) and Credit Default Swaps (CDSes) are. To review: a Collateralized Debt Obligation is essentially a piece of a mortgage (or some other asset backed by collateral, as opposed to something like credit-card debt). Typically these are assembled into “tranches,” which are groups of mortgages containing similar risk of default. If many mortgages default, one tranche — the “equity” tranche — gets wiped out first; its risk is therefore higher than that of the other tranches, so its return is correspondingly higher. As the defaults mount, the other tranches get wiped out in sequence. This is how you can end up with a collection of poor mortgages bundled into a security that gets labeled “AAA” (investment-grade): the later tranches, which are less likely to get wiped out, are AAA, while those which are first in line when the revolution comes are higher-risk. It looks like magic, but it’s actually sensible.

Mathematically, there are a few troubles with this. One is that you need to know some things about the correlation of the assets in the mortgage pool. That is, does knowing that one mortgage is in default tell you anything about whether another is in default? Suppose all the mortgages in your pool came from the same neighborhood; it’s likely that their defaults would be highly correlated. If the one mortgage defaulting means that all mortgages will default, then we say that their correlation is 1; if there’s absolutely no relation between whether one defaults and whether another does, then we say they have correlation zero. Obviously a lot depends on the correlation: if the correlation is 1 between the defaults of all the mortgages in your pool, then dividing into tranches doesn’t matter in the least: all mortgages will default at once, so all tranches will be wiped out at the same time, so it doesn’t make sense to call one tranch AAA and another junk. And it’s hard to estimate correlations when few people typically default on their mortgages. Recent experience suggests that correlation is near 0 most of the time, but near 1 when the economy is in a certain kind of recession; this is not helpful information. But in any case, you need to know the correlation if you hope to get any sense of how risky each tranche is. Since higher risk should yield higher return, you need to know the correlation to figure out what the yield on each tranche is.

A second, related problem with this sort of tranching is that it’s very sensitive to slight mis-estimation of the correlations. This is especially the case if you build new securities from a collection of CDOs, which are called “CDO-squared.” An excellent paper called “The Economics of Structured Finance” gives the clearest examples I’ve seen of this phenomenon. Bottom line: getting the correlations, or the individual default probabilities, just slightly wrong can drastically change the value of the security.

The people who assembled these complicated things are called “quants,” though [book: Traders, Guns & Money] and many other books make clear that complicated securities existed before quants did. So you’d think that [book: Traders, Guns & Money] would go easy on the quants. But no. Like a lot of books from the crisis, Satyajit Das likes to take cheap shots at the nerds hovering over their computers and their formulae. And like all the rest (I’m thinking, [foreign: inter alia], of [book: When Genius Failed], Roger Lowenstein’s depiction of the Long-Term Capital Management crisis), it misses the crucial question: maybe quantitative modeling is bad, but what’s the alternative? Does “going by gut feel” really have a better track record than using numbers?

Das’s own argument strongly suggests that the answer is no. [book: Traders, Guns & Money] is essentially a long litany of catastrophic explosions in the finance industry. Underlying all of them is the basic idea that you never destroy risk; you just shift it around. Or take the most recent mortgage meltdown. One problem seems to have been that the process went like this:

1. A bank issues a mortgage.
2. The bank immediately sells that mortgage to another company.
3. The company packages up many mortgages into tranched CDOs, as discussed.
4. The company constructs something called a Credit Default Swap (CDS) that’s sort of like, but importantly different from, an insurance policy. The CDS pays off if the mortgagee defaults. The company is now “hedged”: if they did the math right, they carry no risk at all — the insurance policy will cancel out any losses on the mortgages.
5. Lots of companies follow steps 1-4, so lots of CDOs and lots of CDSes go out.
6. CDOs and CDSes are profitable, so companies rush in to sell them, so banks are strongly encouraged to pump out mortgages as fast as they can. After all, they’re going to sell them right away, so they’ll hold no risk on their books but they’ll collect all the fees that go along with issuing mortgages.
7. Banks are supposed to identify good and bad credit risks; they’re the ones that are issuing the mortgages, after all. But what incentive do they have to identify those credit risks if they’ll be selling the mortgages just as soon as they can? They have no “skin in the game,” as the saying goes. So they start issuing mortgages to people who probably shouldn’t have them. They don’t tell this information to the CDO issuers; again, what incentive do they have to do so?
8. Mortgages start defaulting, and (to skip a bunch of steps) everything collapses.

Now the question for the class: which parts of 1-8 look to be the mathematicians’ fault? The mathematicians’ main nefarious role here, maybe, was to underestimate the default risk of a CDO. But they had nothing to do with the incentive structure that encouraged banks to issue junk mortgages. You can look through that list and find lots of failure points that have nothing to do with the geeks.

When it comes to doling out judgmentally wagging fingers, then, [book: Traders, Guns & Money] is on thin ice. Add in that Das is a remarkably self-serving author: whenever possible, he wants to convince you that he knew all along that finance was a bunch of hocus-pocus. He’s too cool for school, that Mr. Das, while all the rest of the industry are self-deluded assholes. The result is that [book: Traders] is an unsatisfying book that leaves me feeling icky. Its big strength is in describing, at a very detailed level, how various complicated securities work: swaps, swaptions, and the rest of the arsenal that we’ve become all too familiar with in the past couple years.

It was nice timing for me to move right from that to [book: Diary of a Very Bad Year]. The Anonymous Hedge-Fund Manager is everything that Satyajit Das is not. The HFM (as his interviewer at n+1 calls him) is erudite, calm, literary, and panoptic. He’s not stuck down in the muck of individual trades, although those are what he deals with day in and day out; instead he can take a broader view of the economy, and can identify when we should be scared and when we shouldn’t. He explains what commercial paper is, and why we should care when the CP market dries up.

He explains the contagious nature of financial crises, which is really the crucial detail to all of this. In earlier eras, the contagion was the sort of thing we see in [film: It’s a Wonderful Life]: word gets around that a bank is failing, and people line up at the doors to claim their money before it all disappears. So the New Deal created the FDIC, which guarantees that your money will be there if you come calling for it. The certainty that it will be there, as J.K. Galbraith noted in [book: Money: Whence It Came, Where It Went], assures that no one ever needs to run to the bank to check that it’s there. The modern version of banging on the bank’s doors is when there’s a run on an investment bank, which has nothing like the FDIC to insure it.

The HFM explains all of this with almost George Clooney levels of cool. He’s just too cool, too scholarly, too journalistic in his ability to explain complicated concepts to a lay audience. I have a hard time believing he exists; if he does, he needs to drop the anonymity and use his skills for the greater good. By the end of [book: Diary of a Bad Year], we find that the HFM has retired from New York City to Austin with his fiancée, so he’s got time. He’s used that time recently to sketch out his economic plans for Ezra Klein, so maybe he has a future as an educator. (I’m still not convinced that he’s real, even after writing for Klein. It seems entirely plausible to me that the HFM is a clever synthesis of the n+1 writers themselves.)

If you’re interested in the mechanics of constructing derivatives, by all means pick up the Das book. But the fact that the country even bothered to obsess about the details of swaptions and inverse floaters is a sign of great moral rot. Better to talk with the HFM, who unlike Das can see the forest for the trees.

Thomas Geoghegan, Were You Born on the Wrong Continent?: How the European Model Can Help You Get a Life

September 24, 2010/stevereads/1 Comment

Author's name in red mixed case at the top. Book title below in big all-caps black. Subtitle at the bottom in red mixed case. Background is stark white, and there's a big piece of American white bread in the middle. (The back cover has a photo of a gorgeous baguette.)

(__Attention conservation notice__: 1600 words — honestly, I don’t try to write this much; it just comes out — on the second book I’ve read by the labor lawyer and one-time Congressional candidate Tom Geoghegan. You can’t go wrong with that guy.)

The short way to summarize this book is “Tom Geoghegan [‘the names pronounced gay-gun, which suggests a talent for coalition building‘] goes to Germany and gets his labor-lawyer mind blown.” Germany sounds like heaven for workers: lots of vacation, lots of manufacturing jobs (precision-made German products are still the envy of the world), health insurance for everyone (of course), free education, etc., etc.

The thing you have to remember about Geoghegan, going into this book, is how monumentally sad he is about the state of U.S. labor, without being a wimp about it. Anyone who’s read his earlier [book: Which Side Are You On?: Trying to Be for Labor When It’s Flat on Its Back] — and everyone really, really needs to read that book — already knows this. Geoghegan’s been working as a labor lawyer for probably 30 or 40 years, at various times for the Mine Workers and the Teamsters. He seems to have known forever that labor is doomed, doomed, doomed, but unlike virtually all of us he’s continued to fight for it. He’s probably foregone a few million dollars in income by now, all so that he could fight for what he believes in. When Rahm Emanuel vacated his seat as the Congressman from Illinois’ fifth district, Geoghegan jumped into the race and became the darling of liberals everywhere. Sadly, he lost out to someone who will surely not fight for regular people nearly as much as he would have.

Now take this guy and bring him to Germany: unions cover a sizable fraction of the population, and there are works councils complementing the unions. The German welfare state has been in the making since Bismarck, with a sizable kick from the American New Dealers who ordered German companies to make nice with labor after World War II. It’s a labor lawyer’s dream.

Geoghegan stumbles through this dream with a mix of awe, confusion, and disbelief. Surely this can’t work. Surely this is going to be replaced soon enough by American-style capitalism, where few people trust that they’ll have jobs when they wake up the next morning. Because Americans absolutely lack job security, they work longer hours every year: you don’t want to be the guy who leaves at 6pm when all your coworkers are burning the midnight oil. If you get fired, there are plenty of people pounding at the gates to take your job. This leads to a very predictable downward spiral: we all work more just to avoid losing our jobs (not to mention raises, of which there are none).

A natural way out of this is some sort of coordination: either the union, or the government, or whoever, tells your company that it can’t make people work more than, say, 40 hours a week. This *would* be natural in a country other than the United States, where the default stance favors the company. If you want to give it theoretical justification, it goes something like this:

* Companies whose workers are covered by unions are less productive than non-unionized ones, essentially because unions are a form of monopoly of the labor force.
* In a free market, competitors will come in and produce the same goods for less money.
* Ergo, in a free market, unions will eventually disappear.

This does lead one to ask why places like the [newspaper: Wall Street Journal] turn this from a descriptive to a normative claim: not only *will* the free market kill unions, but the government should do all it can to bust up unions. There are many questions one could ask here — for instance, why workers shouldn’t be able to engage in whatever kind of voluntary organization they want — but we’ll set those aside for now.

What I want to get at here is that, in the U.S., we start our economic discussions at the individual-laborer or individual-firm level. We focus on individual widgets, and the most efficient production thereof. We focus on individual economic transactions, executed atomically. And the only way that we allow people to interact in a market is by way of price signaling: prices go up in the market for some good — let’s say steel — and everyone downstream from that good reacts appropriately: producing fewer cars, producing cars with marginally more plastic, etc.

There are problems with this model, which I’ve been writing about for quite a while (see Bowles and Stiglitz, say). But my point is more about the way we discuss these things: the U.S., no matter the state of the economic frontiers, starts with this particular atomic view of economics.

The Germans apparently start from entirely the opposite side of things, with an entirely different set of givens. For instance, suppose you know that you won’t be fired for a long while. This is going to lead to a much different world than the American one, where (as Geoghegan notes) we change jobs six times, on average, by age 30. Think of how much more willing we’d be to invest in skills and really view our companies as our partners.

Or, to really blow your mind, how about this: half of the membership in German boards of directors is named by the employees. Geoghegan gives the example of a Barnes & Noble: half of the directors of B&N, in Germany, would be named by its minimum-wage clerks. Consider the wide-ranging effects this would have, both on the way the company is run and on the very meaning of the word “democracy.” You’d have a say in how your work is run. Considering that half of your waking hours, or more, are spent at your job, any full-throated democracy should democratically control the workplace.

Thinking about economics in this broader way — over decades, over scores of products, over the entire cycle of education-employment-retirement — is just not something that the American economic discourse is ready to do. Every discussion essentially has to start with atomic transactions carried out by atomic laborers and signaling to one another only by means of prices.

In consequence, Germany blew Geoghegan’s mind just as much as it would have blown mine. Actually, I think maybe Geoghegan was faking it a bit, for the sake of his audience, in the same way that the fine folks at Planet Money do a lot of the time: He asks, “Now wait a second: you’re telling me that you could rise up from being a bookstore clerk to being on the *board of directors?*” just so that his interviewee can cast a genial smile upon him and say that verily, it is so.

Geoghegan casts himself as the naïf, wandering about in a perpetual daze. It’s absolutely charming. And his writing here carries the same folksy attitude that charmed everyone in [book: Which Side Are You On?]. He’s just a friend of yours, walking with you around Germany and asking everyone if he’s really stumbled into the dream world that he thinks he has.

Of course he wants to bring some of that world back to the U.S., but right now a true U.S. social democracy can only be described as a pipe dream. Lots of us (though not, I wager, Geoghegan) dreamed that Obama would bring New Deal version 2 to the U.S. after what looked like Great Depression version 2: the banks only continued to exist because the U.S. taxpayer paid for them to live, and a Democrat convincingly trounced the crotchety representative of the ruling party. Two years later, we ended up with sort-of-universal health insurance that hopefully won’t be revoked by the time it’s supposed to kick in, and the banks are more powerful than ever.

Actually, there’s another good example of where economics needs to consider the larger picture: we had a great chance to weaken the banks’ *political* power, and we didn’t take it. Banks have always been a special kind of entity, because (not to sound like too much of an idiot) that’s where the money comes from; no other industry can say that, and it gives banks a special role in the economy that no one else can claim. It also gives them *political* power that no one else has. For a short time, we had the power to neuter them politically and cut them down to size, thereby weakening their control of our leaders and making future bailouts less likely. But this entire line of thought doesn’t make sense unless you can picture companies in the context of an economy overseen by a government, and unless you can picture money as a special kind of thing that’s different from any other kind of commodity. (It wasn’t until Keynes, in the 1930s after economics had been around for two centuries, that the discipline started treating money as altogether different from wheat or rice.)

So it doesn’t look very likely that the U.S. will resemble Germany anytime soon. The best Geoghegan can hope for is that the rest of the European Union will follow Germany’s social-democratic lead. Maybe, if that happens, our closest industrial competitors will finally push us in the right direction.

There’s no one you want on your side more than Tom Geoghegan to understand this world. He’s funny, he’s smart, his ethics are on the side of the angels, and he’s been fighting for you for a long, long time.

A note on genetically-modified foods and central planning

September 23, 2010/stevereads/Leave a comment

Reading Marion Nestle’s note on how hard it is to identify which foods are genetically modified, I can’t help but think of James Scott’s [book: Seeing Like A State]. Scott lumps industrial agriculture in with schemes to rationalize the organization of a nation. From the perspective of a central planner, putting people into an order that the state can understand is a great virtue. The state can’t appreciate that underlying the apparent chaos of a city is great order, in the sense that the city is exactly attuned to the needs of the people using it. (Istanbul, the most amazing place I’ve ever been, must scare the sleep out of Turkey’s leaders.)

Likewise, agricultural central planners can’t stand the chaos of a tangled mess of plants; they replace it with long geometric rows of single crops stretching off to the horizon. Of course, the natural chaos disguises great order underneath: often the multiple crops at a single site are food for multiple species of insects that eat one another remain in a kind of equilibrium. Get rid of the natural order and you’re required to spray pesticides to keep away the now-dominant species of insect. This leads to all the horrors we’re used to by now, like pesticide runoff into the Mississippi River, leading many miles later to a dead zone in the Gulf of Mexico.

When I read about the prospect of genetically-modified foods, those are the sort of traumas I think about. We make one change to something basic, like our food supply; it seems locally rational, but in the aggregate it’s disastrous. (Those in favor of GMOs need to explain why we need them. The onus is on them to tell us why they *won’t* be a disaster and why our non-genetically-engineered food supply doesn’t do the job.)

Industrial civilization is good for a lot of things, and has led to a breathtaking increase in the quality of life in Western civilization. I’m not decrying industrialization, and besides: what would be the point? Despite the justified awe we feel in the face of a small, local, sustainable closed-loop farm like Polyface, which Michael Pollan lovingly documents in [book: The Omnivore’s Dilemma], there’s no way we’re going to shift our entire food supply back to that.

In an industrial democracy, we respond to this kind of agricultural lunacy with regulation. We recognize that acts of individual rationality often lead to large-scale destruction, so we use the compulsive power of the government to stop the large-scale failures. Maybe we forbid GMOs, say. Or maybe we make it cheaper for customers to buy sustainable food, thereby shifting the micro-level incentives to get a better macro-level outcome.

What frightens me, though, is that the bad actors seem to always have a leg up on the government. Write your legislation carefully, but the bad guys will find the loopholes. Set your penalties too low, and it’ll be in the bad actors’ interests to break the law. Use tort law as the instrument of capitalist justice, but whom do we sue about the destruction of the Gulf of Mexico?

These are the industrial cards we’ve been dealt, so there’s nothing to do but play them.

Steve Reads

Category: Books