Hollywood Fights Market; Market Wins

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Money Monster isn’t billed as a comedy (in fact, it’s supposed to be a thriller), but it is still one of the silliest films I’ve seen in ages.

Lee Gates (George Clooney) is a cable TV investment personality of the Jim Cramer school, with a shtick that includes dancing girls, funny hats, crazy film clips, party noisemakers, and outlandish recommendations that often turn out to be profitable investments. He doesn’t think much about his viewers’ actual profits and losses because he never sees his viewers — that is, until Kyle Budwell (Jack O’Connell) shows up on the set with a figurative axe to grind and a literal gun in his pocket. He also has a funny explosive vest to go with Lee’s funny hat. He makes Lee wear it.

We are expected to believe that Budwell, the terrorist, would be able to wander onto a live set, simply because he is dressed like a deliveryman and carries a couple of cardboard boxes.

I’ll warn you here that this review is going to contain a few spoilers, but knowing some of the plot twists is not going to ruin the film for you; it’s pretty much ruined on its own, and these are mad meanderings, not genuine twists. Besides, I don’t recommend that you waste your money or your time on this monster of a movie, and revealing some of the plot is the only way I can demonstrate to you just how silly and unbelievable the premise is.

Hollywood will go to great lengths to cast aspersions on Wall Street, business, and the free market, even greenlighting a movie with a script with more holes than a Chuck E. Cheese Whack-A-Mole (and a lot less entertaining). First we are expected to believe that Budwell, the terrorist, would be able to wander onto a live set, simply because he is dressed like a deliveryman and carries a couple of cardboard boxes. Sorry, folks, the days of Cary Grant sneaking into the boss’s office carrying a florist’s bouquet are long gone, and security at a television station is much tighter than that.

Then we are expected to believe that the cameras would continue to roll and the signal would continue to be broadcast while a lunatic holds a gun to the head of a nationally known journalist — or anyone, for that matter. Regardless of what the terrorist (and the voyeuristic television consumer) might be demanding, someone — anyone — would have pulled that plug immediately.

We are also expected to believe that Kyle invested all his money — all his money — in a single hedge fund. The SEC has rules about that. Under the Dodd-Frank Act, “qualified investors” must have a net worth of at least a million dollars, not counting their personal residence, or an income of at least $200,000, in order to purchase shares in risky investment vehicles such as the one in the script. Kyle makes $14 an hour as a sanitation worker. He is not a qualified investor. The hedge fund would not have accepted Kyle’s money. George Clooney and Jodie Foster (the film’s director) probably don’t realize this because they have managers who invest their money for them. They’re qualified investors; they just aren’t qualified to play with investors in the movies.

Next is Lee Gates’ ridiculous solution to Kyle’s problem. It seems that Kyle invested his money in a hedge fund that Lee recommended a few weeks ago, and the fund’s price tanked, taking Kyle’s money with it. Lee turns to the camera and asks his viewers to start buying the stock in order to pump up the price for Kyle and his fellow losers. First, viewers would smell a rat if a showman like Gates made such an outlandish plea. Remember Soupy Sales? “Kids, take a dollar out of your mother’s purse and send it to Soupy at this address . . .”

Kyle's girlfriend bawls him out and dares him to pull the trigger on the bomb — while she is in the studio. Who in the world would be that crazy?

More importantly, Lee’s idea wouldn’t help Kyle or the others who have lost money, even if the stock did return to previous levels. Stock prices rise and fall as new buyers purchase shares from current owners. It’s the ultimate example of supply and demand. In this case, the people who sold on the way down don’t own any shares anymore, so they aren’t going to get their money back, even if prices climb to the sky. They’re just going to feel worse. The only people who could make money on Lee’s new deal are the ones who buy at the bottom and sell at the new top. And believe me, Lee Gates would be investigated for investment fraud after these shenanigans were over. (Assuming he made it out of the exploding vest in one piece.)

The cops are just as stupid. They bring Kyle’s girlfriend to the studio to talk some sense into him and calm him down, even though they know she’s fit to be tied about him. And she’s just as stupid. Instead of calming him down, she bawls him out and dares him to pull the trigger on the bomb — while she is in the studio. Who in the world would be that crazy? And then there is the usual Hollywood inanity of having SWAT teams or, in this case, bomb squads enter a highly volatile location without wearing helmets. I know, it’s a film technique considered necessary so that we (the audience) can see their pretty faces while they talk.

In such situations, we’re supposed to suspend our disbelief, and usually I do. But in this movie my disbelief was suspended so far above reality that I became positively giddy from lack of oxygen.

The denouement is just as ridiculous as the build-up. We are supposed to believe that the greedy director of the hedge fund has manipulated a mining strike in South Africa in order to buy low and then sell high when the strike is called off, but a glitch in his plan resulted in a loss of $800,000,000. That’s a lot of platinum for two weeks’ digging.

I’m sure that George Clooney, who produced the film as well as starred in it, thinks he’s doing the world a big favor by pointing out the evils of greed and investing, but all he did with Money Monster is point out his own monstrous ignorance. He still has the dark swoony eyes, though. Maybe he should leave the social justice films for a while and make a nice romantic comedy.


Editor's Note: Review of "Money Monster," directed by Jodie Foster. Tristar Pictures, 2016, 98 minutes.



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The Big Short Finds Joy

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In 2008 the United States experienced the biggest collapse in the real estate market since the Great Depression of the 1930s. While many had been talking about the expanding bubble, no one really thought it would burst. Real estate was the one sure deal, the tangible investment that everyone needed and thus would never disappear. During the upward panic to get into the market before prices skyrocketed even further, buyers were snapping up houses within a matter of days after they were listed, often engaging in bidding wars that drove the sales price higher than the asking price. “What our houses are worth now” was the gleeful topic of every cocktail party in every neighborhood, whether you were interested in selling or not. Using easy credit made easier by the “no-doc” loans that guaranteed virtually everyone a mortgage, people who had no business buying houses got into the market, and people who already owned homes risked their solvency by taking out additional home-equity loans to use for other purposes. After all, real estate was too big to fail. Prices always go up.

Until they go down. In September 2008 the bubble burst, leaving overleveraged homeowners in precarious positions — unable to sell, unable to pay, unable to forestall foreclosure, and underwater with their mortgage-to-equity figures. The Big Short attempts to explain what happened, in a film that is sassy, quirky, glib, and sometimes even right.

After all, real estate was too big to fail. Prices always go up.

In the interest of telling a good tale, the filmmakers simplify it, presenting a small portion of the story as if it were the whole story. For example, they virtually ignore the Community Reinvestment Act, which was designed to make mortgage and investment money available in “underserved” (read: poverty stricken) areas. The Act was a noble goal, but it meant that people would be granted mortgages who really couldn’t afford them, and had no cushion whatsoever to deal with repairs, upkeep, or changes in employment (read: getting fired). These were called “subprime” loans officially, but “Ninja loans” derisively (No Income, No Job, Accept Anything). It also meant that the demand for homes increased dramatically, driving prices and new construction upward in response to this new bloc of buyers. By ignoring this Act, the filmmakers suggest that all of the blame lay in the private sector of investment funds and rating services.

Instead, this film focuses on the creation of mortgage-backed securities, which is an investment vehicle that spreads the risk of foreclosure by bundling many mortgages into a single security and then selling shares of that security to a number of investors. Everyone shares in the risk and the reward. And because of that, local bankers no longer keep the mortgages they grant to individuals in the community; as soon as the signatures are dry, the mortgages are bundled away onto the secondary market. In the interest of brevity and creating a single straw man, the film blames this on the mastermind behind the mortgage-backed security, Lewis Ranieri (Rudy Eisenzopf), but this is an oversimplification of what went wrong. Many factors were involved, including Federal Reserve policy on the national level and overproduction of building permits on the local level.

Let’s face it: life is not a screenplay. But that’s how this caper is presented. A few savvy investors notice the increase in late mortgage payments and foreclosures beginning around 2004, anticipate the collapse, and figure out a way to profit from it. All these characters are based on real people. One is Jared Vennett (Ryan Gosling), who breaks the fourth wall to narrate the film in a cool, hipster tone that draws us into the web. Others include the Silicon Valley-based eccentric Michael Burry (Christian Bale), the moralistic Mark Baum (Steve Carell), and two young founders of a trading fund called Brownfield Capital, Charlie Geller (John Magaro) and Jamie Shipley (Finn Wittrock), who bring the also eccentric investment trader Ben Rickert (Brad Pitt) out of retirement and into their deal. Working independently from one another, these traders are convinced they can make a killing by shorting the real estate market (hence the title, The Big Short).

In order for our heroes to succeed in making their millions on short sales, the entire market had to collapse, with millions of Americans bearing the loss.

W.C. Fields made famous the idea that “you can’t cheat an honest man,” and the investment bankers at Goldman Sachs, J.P. Morgan, Bear Sterns, and Lehman Brothers personify that adage. They laugh conspiratorially behind the backs of these short sellers even as they take their money, so confident are they that real estate is “too big to fail.” Of course, we know that the last laugh will be on them. But the bankers will not go down without a fight. The film demonstrates the dubious shenanigans and downright manipulation they used to try to keep the market afloat and force the investors to close their short positions before they could exercise them.

If all this sounds a tad confusing, not to worry! The filmmakers explain such concepts as short selling, CDOs (Collateralized Debt Obligations), ISDAs (International Swaps and Derivatives), and other potentially dry, technical terminology, using the unlikeliest characters. A glamour girl lounges in a bubble bath, sipping champagne and explaining mortgage-backed securities, while the soap bubbles and the fizz bubbles provide a sleazy metaphor for the market bubble that is brewing. A chef chops up unsellable three-day-old fish to make a marketable stew as he explains the fishy rating system that kept these mortgage-backed securities at AAA status even when their defaults were ballooning. A stripper undulates on her pole as she explains yet another investment concept. Music videos appear unexpectedly to demonstrate the euphoria of various characters. These unexpected moments, coupled with a soundtrack reminiscent at times of an Ocean’s Eleven sting, keeps the film hopping and lively.

But this is not a fun topic, and the short-selling sting was not directed against a Las Vegas gangster who deserved his comeuppance. In order for our heroes to succeed in making their millions on short sales, the entire market had to collapse, with millions of Americans bearing the loss. And their brilliant scheme would deliver a double wallop to the already precarious investment banks. According to the film, six million lost their homes, and eight million lost their jobs. Rickert puts it into perspective when he reminds Charlie and Jamie, “If we make money, it’s because ordinary people lose homes, jobs, and lives.” Banks held the prices of their securities up as along as they could, hoping for a turnaround, but in the process they simply made things worse. Regulators were in bed with the companies they regulated, creating a false sense of protection that contributed even more to the disaster. The result was almost as devastating to employees of the major investment firms as the day the World Trade Center was attacked. In its scale, the personal devastation was worse.

The Big Short is not the whole story. It might not even be the true story. But it is an important portion of the story, told with an outstanding cast in an entertaining and engaging way. Surprisingly, it does not trash big business, even though it shows collusion, fraud and manipulation at many levels. Mostly it shows individuals putting their own needs first, protecting their own jobs and security and using their influence to manipulate the bond ratings and the markets to their advantage. No one is overtly evil in this film. It tells a very personal story, one that each of us might be drawn into on a smaller scale if we aren’t careful.

Joy, another film about business, opened the same week as The Big Short, focusing not on the big dealers but on the underserved. Both have been nominated for Golden Globe Awards and both are populated by an ensemble of AAA actors, including Melissa Rivers, who in Joy does a sharp but poignant turn as her mother, Joan Rivers, in her role as a QVC spokesperson. Both films rely on nonlinear storytelling, flashbacks, and dream sequences to make some of their points. This is especially effective in Joy, where disconnected, disorienting scenes demonstrate how seemingly disconnected ideas come together in the imagination to form something new and valuable.

Joy (Jennifer Lawrence) is a creative, bright, hardworking young mother of two and valedictorian of her high school class who has been held back from success by the emotional and physical demands of her eccentric family, most of whom live in her house. Her agoraphobic mother (Virginia Madsen) spends most of her days in bed, watching soap operas; Joy’s ex-husband Tony (Edgar Ramirez), a wannabe singer, lives in her basement and can’t keep a job; her philandering father Rudy (Robert De Niro) also lives in her basement when he’s between girlfriends; and her grandmother Mimi (Diane Ladd), who narrates the story, is the only person who believes in her.

Joy didn’t set out to make my life better, or anyone’s life better except her own. She needed to pay her mortgage, fix her plumbing, and put food on the table.

As a child Joy had big dreams of becoming an inventor, but her parents’ divorce drove her ambitions inside, much as a cicada (a recurring metaphor in the film) spends 17 years in unproductive safety underground. When she cuts her hands badly while sopping up the mess made by a broken wine glass, she figures out how to make a “wringless mop” and decides it’s time to reemerge into the light and dangers above ground to sell her invention to others.

I own this mop. I love it. It keeps my hands clean and dry while it makes my floor clean and sparkly. I also own the Huggable Hangers that the real Joy Mangano invented. They keep my silky shirts and dresses from falling onto the floor in my closet. I’m grateful that she had the spunk and tenacity to overcome all the obstacles she encountered on her way to success, and I’m glad her hundreds of household inventions have made her filthy rich, because her inventions make my life better. But she didn’t set out to make my life better, or anyone’s life better except her own. She needed to pay her mortgage, fix her plumbing, and put food on the table. And like so many other entrepreneurs, she did that by making other people’s lives better too. This is what I love most about this film.

To do it, she needed capital. She needed to conduct a patent search, apply for a patent, design molds to produce her mop, negotiate with manufacturers to make the mop, and market the mop to mass audiences. Capital is the lifeblood of entrepreneurship. Joy finally convinces her father’s latest girlfriend Trudy (Isabella Rossellini) to invest in manufacturing and marketing her invention. The rest of the film demonstrates both the elation and the devastation of entrepreneurship. Through it all, Joy never gives up — not on her invention, not on her family, and not on herself. Harry Browne fans will appreciate Joy’s advice to her young daughter: "Don't ever think that the world owes you anything, because it doesn't. The world doesn't owe you a thing.”

Eventually Joy creates a successful manufacturing and marketing empire that provides startup capital for other small entrepreneurs with an idea and a dream. Joy is a triumphant film about the power of persistence and innovation, desperation and conviction, and the possibility that a simple mop can change the world.


Editor's Note: Reviews of "The Big Short" directed by Adam McKay. Plan B, 2015, 130 minutes; and "Joy," directed by David O. Russell. Annapurna, 2015, 123 minutes.



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Woody Allen: He’s Still Good

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When Cate Blanchett walks up to the podium to accept her Best Actress accolades next spring for her stunning performance in Blue Jasmine (and she most certainly will be winning them all, from Golden Globe to Oscar), she will be sharing the award with the ghost of a white Chanel jacket tastefully trimmed in black. That jacket says more about her character, Jasmine Francis, than any piece of costume since Superman's cape. It is Jasmine’s connection with the world she once inhabited, and she wears the expensive jacket casually, as you or I might toss a windbreaker over our shoulders.

Jasmine Francis is a woman beyond the verge of a nervous breakdown; she has already gone over the edge, and is desperately trying to hang on. She not only lives in the past, she talks to people in her past, rehashing old conversations right out loud, while standing on the sidewalk or sitting at a party. We see this as flashbacks triggered by key words or images that remind her of her old life. Through this process we see the juxtaposition of Jasmine’s old life as a glamorous socialite and wife of a multibillionaire, and her new life as the poverty-stricken widow forced to live with her sister, a spunky San Francisco grocery clerk.

The story is a thinly veiled roman à clef that imagines the post-scandal life of Bernie Madoff's wife, Ruth. Madoff, of course, was the investment banker who swindled $65 billion from friends, relatives, and charitable organizations in the largest financial fraud in history. After the Ponzi scheme came to light, Ruth Madoff complained that she couldn't go anywhere without being vilified. Shunned by her former friends, she couldn't go to her gym, her favorite restaurants, or even shopping because everyone stared at her and made disparaging remarks. Well duh! It's one thing for a legitimate money manager to misjudge the markets and suffer losses once in a while. But Madoff never even tried to be a wise money manager for his clients. He just kept raking in the dough and spending it on yachts and homes and cars, while sending out phony statements to keep his clients happy. How could anyone feel anything but contempt for such shysters?

Like Ruth Madoff, Jasmine goes to live with a sister. Ginger (Sally Hawkins) lives in a tiny, frowsy San Francisco apartment with her two young sons. Ginger's marriage has also collapsed, partly because Jasmine's husband Hal (Alec Baldwin) had convinced her and her husband to invest their $200,000 lottery prize in his "real estate fund" instead of supporting their goal to start a business of their own. Of course, there was no investment fund; Hal had been funneling everyone's money into his own personal accounts. The big question is: how much did Jasmine know? An even bigger question: how can a person deliberately defraud a family member or friend? Simply shocking.

Jasmine is tasteful and smart and elegant, but she has absolutely no idea how to exist in the real world. She has no income and virtually no money, yet she gives her taxi driver a $100 tip and flies across country first class because she cannot imagine any other way to act. (When Ginger asks, "How did you pay for a first class ticket?" Jasmine responds with a dismissive wave of her hand, "I don't know. I just did.")

Popping Xanax like breath mints and washing it down with Stoli vodka, Jasmine lives in a daze of denial. She knows she has to reinvent and redefine herself, but she can't let go of the past that was so comfortable, nor can she come to terms with how it all happened. Meanwhile Ginger and her friends try in vain to welcome Jasmine into their world of pizza, beer, and cheap dates. The disconnection provides for many comic moments, but the undercurrent of tragedy is always present.

Woody Allen is one of the most prolific directors in Hollywood. He has been making films for nearly half a century, but (in my opinion) he has done his best work in the past decade, at an age when other people are retired and chasing golf balls. Last year's Midnight in Paris, about a frustrated writer who mysteriously finds himself hobnobbing with the likes of Hemingway and the Fitzgeralds in 1920s Paris, was brilliant. So is Blue Jasmine. It is one of Allen's finest films. The story is at once contemporary and timeless and true. Cate Blanchett gives an utterly fearless and totally vulnerable performance as Jasmine, and the rest of the cast rise to her level of abandon, forgetting themselves in the characters. And kudos to Suzy Benzinger as costume designer . . . I hope that Chanel jacket shows up at the Oscars.


Editor's Note: Review of "Blue Jasmine," written and directed by Woody Allen. Perdido Productions, 2013, 98 minutes.



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Main St. vs. Wall St.

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The defeat of Romney and the victory of Obama in a disastrous economy which should have crushed the incumbent shows that most people still associate themselves with "Main Street" and view "Wall Street" as the enemy. Only an ideological movement to shift this perception can save the GOP — and such a shift could also help to empower the Libertarian Party.

So let me debunk the myth right now. A look at the Forbes annual list of the richest American and international people shows that many billionaires are not "old money." Many of them are "new money": either self-made rich or the immediate heirs (wives, children, grandchildren) of the self-made rich. Also, many billionaires are women or members of non-white ethnic groups — e.g. the Mexican billionaire Carlos Helu and the women billionaires such as Steve Jobs' widow, Laurene Powell Jobs, and the self-made billionaire Sara Blakely. Thus it is clear that the rich are not an "aristocracy" ruling over the poor and middle class, as leftists and Marxists assert. The rich are merely those people whose merit — hard work, intelligence, and good choices — earned them vast fortunes.

Let me also explain that trickle-down economics is not voodoo; in other words, why the rich being rich helps the poor and middle class. It helps because the rich do not spend all their money on yachts and mansions and caviar (although even their expenditures on luxury create jobs for other people). They need to make their wealth keep pace with inflation, which forces them to invest most of their money. Who do we want to make business decisions about investing in small businesses and entrepreneurs, to decide who receives society's investment capital: people who know finance and economics and take personal responsibility for their decisions, or government officials lost in a mess of bureaucracy and red tape, who experience no personal accountability from gains, losses, and the profit motive?

Capitalism is merely a system in which capital is invested by private people, as opposed to the state. "Wall Street," that much-maligned entity, is the process followed by rich people — and the financial managers who invest money for them — as they make decisions that fund the talented and hard-working middle class. Small businesses are carefully chosen by Wall Street’s investors because they have the capacity to succeed and expand, thus creating more jobs for the poor.

Wall Street is Main Street's best friend, even though most people don't see the complicated economic relationships that form the substructure of a trip to buy a loaf of bread at the local grocery store. Someone made a decision about which grocery stores to invest in, and which bakers to invest in, and the success of those decisions helps determine whether you pay $1.50 for bread, as we can today, or $15.00, as we might in the socialist nightmare of tomorrow. The socialist-leftist-modern liberal dogmas that the rich are a few crusty old white men locked away in the towers of distant mansions, counting gold coins like Scrooge, and that the corporations have enslaved us and the only practical thing is for “working people” to rebel, is totally contrary to the way the world works.

Shatter the leftist myth, and the people won't view another Republican nominee with envy, hatred, and malice, as they viewed the GOP candidate in 2012. It is too late to save the Romney campaign, but the Rand Paul 2016 campaign could benefit from the argument presented above.




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Killing Them Sophomorically

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Killing Them Softly is a film about the ugly underworld of organized crime but tries to be a whole lot more. Set against the 2008 financial meltdown and presidential election, it suggests metaphorically the connection between government and organized crime, implying that the executive branch is an organization that gets rich off the vices of others, controls public opinion by casting blame on someone known to be innocent, and assassinates anyone who gets in its way. The movie suggests that America is nothing but a floating poker game.

In the film, Markie Trattman (Ray Liotta) — clearly designed to represent Bush — runs a literal floating poker game. He has figured out a way to set up a robbery of the game, pocket the money, and make his cronies — clearly designed to represent corporate America — believe that someone else has stolen the cash. Later he brags about what he did, but since the game is back in play and the money is flowing again, everyone laughs and Trattman gets a bye — this time.

But this isn't an ordinary poker game. Everyone at the table is making money, and it's controlled by bosses who are represented by a button-up businessman (Richard Jenkins) who is so straight that he cringes when someone lights up a cigarette in his car.

A few months later Squirrel (Vincent Curatola), a dry cleaning magnate and low-level criminal, figures that if he sends in some of his own flunkies to steal the cash this time, everyone will assume that Trattman did it again, and Trattman will get the blame. Squirrel knows that Trattman will get killed for it this time, but he figures that's OK because, after all, Trattman did it before; it's just a delayed punishment.

Trattman does indeed get the blame, even though he tries to prevent the robbery. Hitman Jackie Cogan (Brad Pitt) is called in to "interrogate" Trattman, get the names of everyone involved, and eventually dispatch the punishment. It is a graphic, brutal interrogation, and in the end Jackie is convinced that Trattman is innocent this time. But truth isn't important; consumer confidence is. "It doesn't matter whether he did it," the messenger (Richard Jenkins) explains. "He's responsible for it. We need a fall guy for the public angle."

I love to recognize and contemplate metaphors and allusion in film, but this one simply is not worth the effort. It's a sad, ugly movie about sad, ugly people.

President Bush's words echo this criminal's perspective. "America's financial problem is complex," he explains on TV. “Confidence in our financial system is essential." In fact, throughout the film, TVs and radios are strategically placed to play snippets of Bush discussing the financial meltdown of 2008. We hear the voice of a Bush official saying, "This isn't what we want to do, but it's what we must do to restore confidence in the US economy." And lest we fail to realize that Bush is the culprit, references are made to "the rush into Iraq on election eve" and "There must be consequences."

Killing Them Softly tries to be artistically and philosophically important. Ever since the artistically dense Tree of Life was given an Oscar nomination last year, Hollywood filmmakers have felt the mandate to make metaphorically rich films. I love to recognize and contemplate metaphors and allusion in film, but this one simply is not worth the effort. It's a sad, ugly movie about sad, ugly people. And it is getting great reviews. I guess the mainstream critics will praise anything that blames Bush.

The title is an allusion to the Roberta Flack song Killing Them Softly, in which a young girl is moved to tears by the lyrics of a song that seem to tell her own story, just as this movie purports to tell Bush's story. But in the film, the phrase has its own meaning. Jackie tells the messenger, "I like to kill them from a distance. Up close they cry and beg and piss themselves. It gets emotional and messy."

And he's right. The violence in this film is close up and brutal, and the victims do cry and beg. It's ugly. There is nothing soft about the hitman. Moreover, there is nothing redeeming about any of the characters, and there are virtually no women, except for one quick scene with a prostitute. All the characters care about or talk about is getting physical pleasure from drinking, heavy smoking, drugs, and prostitutes.

As much as it tries to be an artsy message movie, Killing Them Softly is little more than a garden-variety hitman movie, long on blood and short on character. Despite its heavy-handed metaphors, arty special effects, jazzy music, and stellar acting, the story is barely interesting and entirely predictable.

It's also overwhelmingly cynical. When Jackie observes Obama's 2008 acceptance speech on one of the ubiquitous television screens, he hears Obama's optimistic "no more red states or blue states but United States" and his reference to "the enduring power of our ideals. " Jackie responds, "In America you're on your own. America isn't a country; it's a business. Now pay me."

That may be true for misfits like those who populate this movie — people who have no genuine friendships or family relationships, who spend time in and out of prison, who live only to get high on drugs or sex, and who interact only with women who are prostitutes. But I'm not willing to buy the idea that America is nothing but a business, or that being a business is a bad thing. This is just a sad, ugly, brutal movie with an idea that doesn't quite work.


Editor's Note: Review of "Killing Them Softly," directed by Andrew Dominik. Weinstein Brothers, 2012, 97 minutes.



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Sticking It to Wall Street

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Hardly a day goes by without President Obama blaming our economic woes on the "failed policies of the past." He has made Wall Street reform a top priority. In contrast to the George Bush economic delinquency that abandoned Main Street, his policies will stick it to Wall Street. He will (allegedly) prevent the financial shocks of credit bubbles and real estate booms. Ever-watchful of deceptive mortgage lenders, he will hold them and all other greedy plutocrats accountable for their financial shenanigans.

In truth, the policies of the past engendered regulations that were ignored, unimplemented, unenforced, and, more recently, applied against the wrong people. This travesty was compounded by politicians, regulators, and DOJ lawyers who failed as well. They failed miserably, yet suffered no consequences. Only the people whom regulations were supposed to protect suffered. But this time, as he campaigns for reelection, Mr. Obama tells us, incessantly, he has our back.

The policies that created the too-big-to-fail banks and the scurrilous practices that collapsed the housing market were enacted in the late 1990s, during the Clinton administration. Treasury Secretary Robert Rubin was responsible for the 1999 reversal of the Glass-Steagall Act, which had previously separated retail and investment banking. Its repeal legalized the formation of today's giant banking conglomerates. Rubin's successor, Lawrence Summers, then gave us the Commodity Futures Modernization Act (CFMA), which exempted derivatives from regulation.

With energy derivatives, Enron went on to perpetrate the largest corporate fraud in history. With collateralized debt obligations, giant banking conglomerates (Bank of America, Citigroup, Goldman Sachs, etc.) went on to become giant contributors to the sub-prime mortgage meltdown. Robert Rubin went on to earn over $126 million at Citigroup for a tenure spanning the company's Enron involvement and "merga-mania" phase and proceeding to its near bankruptcy in 2008. This was around the time when candidate Obama began blaming President Bush for the financial crisis. Obama went on to form an economic team led by people who helped create the crisis — economic geniuses such as Rubin protégésLawrence Summers and Timothy Geithner. As Washington Postwriter Steven Pearlstein put it: “The ultimate irony, of course, is that just as Rubin and Co. at Citi were being bailed out by the Bush administration, President-elect Barack Obama was getting set to announce a new economic team drawn almost entirely from Rubin acolytes.”

As an attorney, Obama represented "affordable housing" slumlords, one of whom evicted 15 poor families from their apartments in the dead of a subzero Chicago winter, two months after turning off their heat and water.

What qualified Obama to assemble a team that would, supposedly, stick it to Wall Street? As the Washington Examiner discovered in its 'The Obama You Don't Know” exposé, it was also during the Clinton years that Obama developed his knowledge of real estate and finance. In the early 1990s, heleft the community organizing business for the housing market — as an attorney representing "affordable housing" slumlords, one of whom evicted 15 poor families from their apartments in the dead of a subzero Chicago winter, two months after turning off their heat and water. This experience no doubt proved invaluable when, as president, he led our nation's efforts to recover from "the worst financial disaster since the Depression" — by selecting and relying on the very people who caused the disaster.

Geithner, who became Obama's treasury secretary, was recruited from the New York Federal Reserve Bank, where, as chairman, he was the principal government official responsible for regulating Citigroup. After years of doing nothing to deter the antics that almost bankrupted that firm, he helped forge a deal (with Treasury Secretary Henry Paulson, another Rubin colleague) that stuck it to taxpayers: a $45 billion bailout with an additional $306 billion guarantee against toxic assets.

Unfortunately, Geithner wasn't the only regulator asleep at the switch. All of them were. All of the 18 or so financial regulatory agencies charged with protecting us from Wall Street's sordid schemes failed abysmally. And they did so despite repeated warnings by the Bush administration, from April 2001 throughDecember 2007. At least the Bush administration suspected the coming crisis.

Maybe the regulators thought that Christopher Dodd and Barney Frank,the nation's top Wall Street watchdogs, would actually bark. But this fatuous duo thwarted the Bush attempts to rein in Fannie Mae and Freddie Mac. Under their feckless supervision, the capital inadequacies of the two government-backed mortgage giants crippled the housing market. And as homeowners and the real estate industry lost trillions of dollars, Barney Frank took it upon himself to cause further damage. In July 2008, when Fannie Mae and Freddie Mac stock was selling for $10.25 a share and $9.00 a share, respectively (down from $60 and $67, in January), the ever-vigilant Barney proclaimed, “I think they are in good shape going forward.” How did this ringing endorsement pay off for the many thousands who subsequently scarfed up these stocks? Today, they are selling for about $.25 a share.

For his signature Wall Street reform law, president Obama turned to Messrs Dodd and Frank, entrusting the two who didn't prevent the last crisis with preventing the next one. In a just world, they would have been impeached for the harm caused by their feckless oversight of Fannie Mae and Freddie Mac. But in Obama's world of social justice and economic fairness, they stuck it to us with the Dodd-Frank Wall Street Reform and Consumer Protection Act — an oppressive 2,300 page regulatory monstrosity that exacerbates the dominance of the "too-big-to-fail" oligopoly, reduces the competitiveness of smaller banks, and passes its immense compliance costs on to consumers. And it exempts from regulation — wait for it — Fannie Mae and Freddie Mac.

While 8 million private sector jobs have been lost, inane regulators still hold theirs, further rewarded with raises and promotions brought by the flood of new Dodd-Frank regulations.

Obama brays at the Bush trickle-down policies, but the benefits of Dodd-Frank are illusory, especially to Middle America, which remains stuck in the nightmare of Obama's regulatory trickle down: a stagnant economy, horrific unemployment, and the specter of a returning recession. Regulators are paid obscenely high salaries to protect supposedly powerless investors, bank account holders, and consumers from the wrongdoings of banks and financial institutions. Yet the latter have, in the main, gone unharmed, and so have the regulators. While 8 million private sector jobs have been lost, inane regulators still hold theirs, further rewarded with raises and promotions brought by the flood of new Dodd-Frank regulations.

If the bailout wasn’t reward enough for risky Wall Street practices, immunity from prosecution will make up the difference. After over three years of relentless investigation, Obama's Financial Fraud Enforcement Task Force has not convicted a single Wall Street miscreant of a single crime, even the imaginary crimes that regulators like to invent. Instead of the stereotypical wolves of Wall Street, Eric Holder has chosen to go after the likes of a Connecticut women who allegedly conducted a gifting table Ponzi Scheme, and a Nevada group accused of trying to control condominium home owners’ associations. Scrambling to comply with Dodd-Frank regulations, big banks are firing, not high level executives likely to commit widespread fraud, but thousands of low-level employeeswith jobs far removed from significant transactional crime. For example, Wells Fargo recently fired a 68-year-old customer service representative after discovering that he had been convicted of using a fake dime in a laundromat in 1963. Meanwhile, the legal fees for lawsuits against executives of Fannie Mae and Freddie Mac (which received over $150 billion in taxpayer bailout money) now exceed $109 million. Those fees are paid by — again, wait for it — the taxpayers.

The banking oligarchy is doing quite well under President Obama. So too is his ever-expanding regulatory leviathan. The rest of us are left to struggle through the slowest economic recovery since the Great Depression. It is a struggle exacerbated by stifling regulations, unprecedented compliance costs, and the knowledge that none of the people responsible for the financial crisis (certainly corrupt Wall Street executives, but also incompetent politicians and inept regulators) are in jail. All the sticking has been to us. Still, as the election approaches, many believe that Obama is the right man for the job. They fear Mitt Romney, who wants less regulation. Obama, of course, demands still more — especially after the shock that his Dodd-Frank reforms failed to prevent the MF Global and JP Morgan scandals. Evidently, he needs four more years to deal with Wall Street. Perhaps his supporters believe that, with his brilliant legal mind, he will find enough laws to do so. After all, he got the slumlord off with a $50 fine.




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Blue-Suited Vultures and Childlike Demands

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Margin Call is another offering in the growing list of movie dramas and documentaries that attempt to explain the economic meltdown of 2007–08. This one gives an insider's view of a giant financial institution — perhaps a Lehman Brothers, although that company is never identified — as its analysts suddenly realize that it can no longer sustain its high levels of margin-driven debt against its falling asset values.

The film opens with a cadre of blue-suited vultures — most of them women — storming the office to let employees go. At the end of the day, nearly half of them have been fired, including middle manager Eric Dale (Stanley Tucci). Dale has been working out a logarithm that seems to be predicting financial catastrophe, but no one will listen as they usher him out the door. This scene is perhaps the most intense of the whole movie. Women literally tap men on the shoulder and signal for them to follow, an action reminiscent of the Rapture that will herald the beginning of Armageddon. It is hard to say which is better — to be summoned away, or to be left behind to face destruction.

As a parting gesture, Dale tosses a flash drive to his protegé, Peter Sullivan (Zachary Quinto) and warns him to be careful. Sullivan opens the file, and after adding a few mathematical computations of his own, discovers that the company's net worth is less than the debts it owes. Considerably less. And with the multiplier effect caused by buying on margin, the gap will widen exponentially in a matter of days, unless the markets as a whole turn around. An emergency meeting is called, with all the corporate bigwigs arriving in the middle of the night.

Here the film becomes heavy with pointed dialogue intended to explain the problem to those of us in the popcorn gallery. It is not unreasonable to assume that every one of these high-powered business people in this high-powered room is a genius at math and finance. Yet CEO John Guld (Jeremy Irons), sinister in his impeccable gray suit, his impeccable British accent, and his frighteningly sharp face, threatens Sullivan, "Speak to me as you would a child, or a golden retriever." This childlike demand is designed for the audience's benefit, of course, but it is almost laughable in the circumstances and reveals J.C. Chandor's inexperience as a writer and director. He doesn't yet know how to set up exposition believably.

The explanation that Sullivan then delivers is so abstract and obtuse that only someone who already understands it would be able to fill in the missing specifics and render it understandable to others. We know that the company has borrowed too much against assets that are diminishing in value, but we don't gain any further light from having seen this movie, and we certainly don't learn anything about how to prevent a similar meltdown.

Films such as "Margin Call" continue to garner glowing praise while vilifying an economic system that allowed America to become the wealthiest, most powerful, and most generous country in the world.

More interesting are the ethical conversations that follow. After Guld reminds the Board of his motto of success: "Be first, be smarter, or cheat," he adds, "I don't cheat, and we aren't any smarter, so we will have to be first." This means that his brokers will have to sell all their assets within hours of the market opening in the morning, before buyers realize that the asset values are dropping.

Sam Rogers (Kevin Spacey), a 34-year veteran of the firm, offers the free-market answer to government regulation when he argues, "But you'll be selling something you know is worthless. They will never buy anything from you again." He's right, of course. The greedy businessperson looks for the quick profit that comes from offering inferior quality at an inflated price, then hurriedly moves on. But the wise businessperson offers good quality at a fair price, knowing that satisfied customers will provide steady gains from repeat sales for a lifetime. Cynically Guld gives the opposite view of the free market: "We'll be selling at the 'fair market value.' It's not our fault if the fair market keeps falling." Acknowledging Sam's point about repeat customers, he continues, "This is the big one. We have to get out all at once."

To entice brokers to destroy their own careers by ruining all their customer rapport and good will, the company leaders offer them huge incentive packages for unloading the majority of the company's assets by the end of the day. The brokers may not be able to get a job for a while, but with this kind of compensation, they won't have to. Integrity can't be bought, but it can be sold.

Karl Marx argued that those who deal in money deal in nothing. They don't produce anything of value, and they don't consume anything of value. They just provide a medium of exchange. Thus, in a Marxist view, being a salesman or stock broker is the lowest form of labor. This point comes through in the film when Dale laments, "I used to be an engineer. I built a bridge once." He then recounts how much time and energy he has saved for all the people who have used his bridge every day for years. The implication is clear: as an employee of this financial institution, his life has been meaningless.

Sam Rogers responds in a similar fashion when Guld says derisively, "You could have been a ditchdigger" instead of a wealthy financial analyst. "Yes," Sam agrees, "but then at least there would be some holes in the ground." Guld continues in Darwinian style, "It's just money; it's made up. Pieces of paper with pictures on it so we don't have to kill each other just to get something to eat. It's not wrong. And it's certainly no different today than it's ever been. . . . You and I can't control it, or stop it, or even slow it. . . .We just react. And we make a lot of money if we get it right. And we get left by the side of the side of the road if we get it wrong."

This cynical attitude about the role of financial institutions is continuing to drag down our economy as surely as investing on margin did. It willfully ignores the fact that financial institutions provide capital for funding those bridges and ditch-digging projects. And it encourages viewers of films like this to ignore that fact. These films continue to garner glowing praise while vilifying an economic system that allowed America to become the wealthiest, most powerful, and most generous country in the world.

For a relative newcomer (this is his first full-length feature film) Chandor managed to do several things right. He secured major funding and assembled an all-star cast that includes not only Tucci, Spacey, and Irons but also Paul Bettany, Demi Moore, Simon Baker, Mary McDonnell, and many others. He has garnered accolades from the mainstream critics. He has written a script that, despite its schoolboy reliance on potty language (thus its R rating), has "gravitas." But while it may seem "important," it isn't very entertaining, or very thrilling. Interesting is about as high as my praise will go. His direction is often affected and heavy handed, especially with his actresses. Wait for Margin Call to be available on Netflix.

quot;


Editor's Note: Review of "Margin Call," directed by J.C. Chandor. Before the Door Pictures, 2011, 107 minutes.



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The Bowels of the Occupy Movement

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According to its website, Occupy Wall Street (OWS) is a people-powered movement organized in "response to the Great Recession caused by our financial and political leaders." It vibrates with activity as people organize against corporate greed. Working groups pulsate, "planning actions, coordinating with community groups, engaging with the press, supporting each other, and strengthening solidarity within the movement." They intend to work tirelessly until inequality, injustice, poverty, and war are eradicated, all the while "refusing to be silenced," presumably by powerful movements clamoring for inequality, injustice, poverty, and war.

The early days of the OWS movement experienced rapid growth, its popularity boosted by media coverage and support from celebrities and Democratic politicians. In recent weeks, it has been joined by labor unions, community organizers, human rights groups, and the Communist, Socialist, and Fascist parties. Implying a form of automatic enrollment for everyone whom big business and big government has been sticking it to, the hope is that the "99%" name will increase membership to, well, 99%. There is also a small, but vocal, anti-Semitic faction, no doubt formed from the belief that Jews own all of the banks. And since OWS demands "indictments and prosecutions of all crimes committed by banks, brokerage firms and insurance companies," a very large legal faction is expected to develop soon.

Much of the anger is understandably directed at our democratic-capitalistic system. But a poll conducted for the movement by CUNY sociologist Héctor R. Cordero-Guzmán found that 70.3% of OWS'ers are politically independent and 64.2% are under the age of 34. That is, most probably don't vote. The poll also found that 92.1% had some college, a college degree, or a graduate degree; 13.1% are unemployed; and 71.5% earn less than $50,000 a year. So most OWS'ers are highly educated and have jobs, but almost 85% (13.1 + 71.5) pay 0% in income taxes — in contrast to, for example, Tea Party members, who are old and uneducated, but pay 30% of their income in taxes.

In addition to Wall Street and the 1%'ers, OWS'ers hate big corporations, especially ones that make huge profits, ship jobs overseas, and "plunder the planet." During a working group debate, one protestor tweeted "X on sucks" to his followers by using his new $560 iPhone 4S. I assume he was talking about Exxon, a giant American oil company with a profit margin of 9.66%. Apple, which recently surpassed Exxon as the world's largest company, extracts a profit margin of 35% on iPhones, which are manufactured by Samsung in Taiwan. Evidently, big corporations that screw consumers can get an OWS protest exemption if they make cool products.

Similar logic applies to people. Corporate CEOs are demonized because of their sinfully high salaries. True, the top ten CEOs averaged $43 million in 2010. But the top ten celebrities averaged $100 million. Instead of castigating them, however, OWS'ers pay them tribute, by purchasing exorbitantly priced tickets to attend their bourgeois movies, concerts, and sporting events.

Despite numerous anti-capitalist signs (e.g., "End Capitalism" and "Smash the Pillars of the Pig Empire") and an equally large number of signs advocating socialism and communism, the OWS movement insists that it doesn't want to destroy business; it just wants to make a few changes. Specifically, it wants American business to hire more people, increase salaries and benefits, provide free health care and education, reduce the prices of products and services, and eliminate pollution and greenhouse gas emissions. The profits (if any, after all the wealth-sharing) should be returned to society. So the new system would be a hybrid in which capitalists could own businesses but control neither their property nor their profits. Let's call it Marxalism.

Self-respecting socialists cannot be expected to carry their clever anti-capitalist signs while shivering and holding their noses at their own fetor.

Nationwide demonstrations by rebellious youth may annoy and disrupt American business, but they are unlikely to cause an immediate, voluntary switch to Marxalism. Nor will they result in a swift enactment of anti-greed laws. The real leaders understand the futility of such languid tactics. They are professional radicals, hiding in the bowels of the movement — deep thinkers for whom class warfare is a full-time job. They are the friendly statists from ACORN-like orgs, whose anti-capitalist outrage calls for social revolution. And they want it before ADHD and cold weather drive demonstrators back to their jobs and classrooms.

To ignite a revolution, the movement needs rebellious leaders with the ability to rouse and incite the masses. Who should be the provocative face of the revolution? Given the number of protestors wearing chic T-shirts imprinted with the image of Mao and Che Guevara (not to mention Marx, Lenin, and Stalin), it would be tempting to use modern-day versions of these idols. However, Che-like leaders would be demoralizing. The original Che denounced the “spirit of rebellion” as “reprehensible” and those who “choose their own path” as "delinquents." Chairman Mao has become a cult hero, perhaps more trendy than Che. California even has "Mao's Kitchen" restaurants. But it would be difficult for Mao-like leaders to explain the miserable failures of the original Mao — for instance, the "Great Leap Forward" to create a just, egalitarian society that ended up killing 45 million innocent Chinese men, women, and children. As with Che's idol, Stalin, justice and equality were evidently unimportant goals for Mao.

There are even problems with frontmen such as Michael Moore. On the plus side, he is highly visible and somewhat popular, has no history of supporting mass murder, and has never been seen in a Che T-shirt (although he has endeared himself to Fidel Castro). A recent convert to the OWS movement, Mike hates capitalism, which he regularly and vehemently denounces. He often alludes to violence in the streets if Wall Street doesn't pay back what it has stolen: our pensions, our money, and the futures of our children. But the spectacle of Michael Moore raging against corporate fat cats would hardly ignite a revolution. And a T-shirt image of a fat 57-year-old man, with bangs sticking out from under a goofy ball cap, is simply ridiculous.

In terms of the stated goals, two months of demonstrations have achieved nothing. As the OWS movement has grown and spread, so too has its proclivity for violence and revolution. Writing in the New York Post of a recent visit to Zuccotti Park, Charles Gasparino "found a unifying and increasingly coherent ideology emerging among the protesters, which at its core has less to do with the evils of the banking business and more about the evils of capitalism — and the need for a socialist revolution." Unfortunately, the latest recruits to the cause — for the most part, criminals, drug users, panhandlers, and the homeless — have produced little more than a stench pervading the carnival-like encampments. Indeed, the increasing violence and decreasing sanitation of the movement has begun to wear out its welcome in many cities. And with the onslaught of winter, many protestors plan to retreat, vowing to return with the fair weather of spring. Self-respecting socialists cannot be expected to carry their clever anti-capitalist signs while shivering and holding their noses at their own fetor. Besides, it is an image more ridiculous than that of a Michael Moore T-shirt.

In the bowels of the OWS movement lie zealous agitators who see themselves as its true leaders. Privately they regard the mainstream media, vocal celebrities, and shrill professors of socioeconomic equality as useful idiots. When it comes to money and power, they are as greedy and exploitative as any of their oppressors. By offering false hope and fomenting hatred and unrest, they seek to extort capital and usurp power for themselves. And with thousands of eager demonstrators at their disposal, they believe their moment is now (or next spring).

But there is an obstruction, a chronic irritation — the lack of charismatic demagogues to articulate the ideology. Some would say the movement has been stricken with irritable bowel syndrome. Alas, for this strain, no medicine seems to be available.




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From “Reinvest” to “Occupy”

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The “Occupy” movement attacks only the superficial side of the problem. It’s like blaming the gardener, instead of the weather, when the flowers die.

Times are hard and our first impulse is to indict what is right in front of us, namely, banks, corporations, the people who have made money by merely observing and accurately interpreting the idiocy around them — people who have taken advantage of the economic distortions to make money.

Banks, corporations, and wealthy people happily obeyed the Community Reinvestment Act, passed by Congress, and used the cheap money created by the Fed to make obscene profits in the five years or so before 2007. Since that time, they have made even more profits by borrowing short-term money at almost zero interest rates, forced into the economy by the Fed, and investing in long-term Treasuries at 3%, the so-called carry trade. If there is a trough, there will be pigs.

The government is the ultimate source of the misallocations that have and probably will continue to impoverish “the 99%.” “Occupy” and its supporters who “believe,” in their government-school-induced darkness, that the government can “save” them from evil “capitalists” seem to be screwing their heads into a socket that produces very little light.




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The Sarah Palin of the Wild-eyed Left

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Right now, our ineffectual President is not the highest-profile among those who would make slaves of free citizens; his incompetence as an executive has reduced him to a cynical, groveling faux populism. The highest-profile slaver is not a significant writer or intellectual of the Left; those who might be significant waste their time performing on cable television minstrel shows. It’s not an internet or New Media big-shot; they’re more interested in feuding than influence.

Right now, the highest-profile collectivist in America is a woman named Elizabeth Warren. A Harvard Law School professor and aspirant to elected office in Massachusetts, she combines the President’s cynicism with the intellectual Left’s focus on cable TV performance and a strong internet presence. Her writing indicates a trivial, though eminently credentialed, mind; her body of work reads more like Suze Orman than Richard Posner or Lawrence Tribe.

If you follow the news or scan left-leaning media outlets, you’ve heard Warren’s name. If you live in Massachusetts, you know that she’s seeking Teddy Kennedy’s old U.S. Senate seat, presently occupied by Scott Brown. But the chances are that you, like most Americans who aren’t wild-eyed Maoists, have a vague impression of the woman.

But it’s important to clarify that vagueness. This woman reflects several current trends in American culture — most of which are not good.

She was born Elizabeth Herring in Oklahoma City in the late 1940s. It was the front end of the Baby Boom, but her childhood wasn’t Happy Days. When Elizabeth was a young teenager, her father had a heart attack and related health issues. These led to severe financial problems for the Herring family. They lost a car to the repo man . . . and fell out of what they considered the middle class. Her mother went to work as a telephone operator. Later, Elizabeth waited tables to help support the family.

She was bright. Did well in school. Got a debate scholarship to George Washington University in the nation’s capitol — and left Oklahoma. Quick as she could.

GW isn’t an intellectual mecca. The biggest part of its student body is made of underachieving kids from affluent families who pay full freight, leavened with some smart kids from hinterlands there on scholarship.

While still an undergraduate, Elizabeth married a classmate named Jim Warren. In 1970, she graduated with a degree in speech pathology. Jim pursued a career and established himself as a middle-class breadwinner; Elizabeth used her degree to get work helping children who were recovering from head traumas and brain injuries.

Various left-wing media outlets were entranced by the soft totalitarianism of Warren’s schoolmarm demeanor.

But that wasn’t satisfying. The collegiate debater felt drawn to something more ambitious. Law school. While having two children with Jim, Elizabeth cobbled together a law degree — starting out at the University of Houston and eventually finishing at the Newark campus of Rutgers. Along the way, she interned at a white-shoe Wall Street firm and was an editor of the Rutgers Law Review.

She got her law degree in 1976 and ran a solo practice in the New Jersey suburbs, focusing on wills and real estate closings. She taught Sunday school, reading and telling kids about Methodist founder John Wesley. She still cites Wesley as an inspiration.

In 1978, she and Jim divorced. That seems to have changed many things.

Elizabeth moved from practicing law to teaching it. She started at Rutgers and moved through short-term gigs at the University of Houston, Texas, and Michigan before getting a tenured position at the University of Pennsylvania. And, as she explains it, she began to change from a free-market advocate to a full-blown statist.

While her academic research wasn’t exceptional (more on that in a bit), she was a dynamic classroom instructor and popular with students. While Reagan and the elder Bush occupied the White House, she refined an approach that worked well in the university setting. The actual content of her writing and speaking is usually unexceptional; but she conveys — by demeanor and implication — sentiments that click with campus radicals. She signals progressive pieties that flatter students and colleagues, making them feel they aren’t just careerist clerks but Deep Thinkers interested in Profound Issues.

She moved from UPenn to Harvard in 1992.Today, she is the Leo Gottlieb Professor of Law, teaching commercial law and bankruptcy. She is or has been a member or officer of: the American Academy of Arts and Sciences; the American Law Institute; the Executive Council of the National Bankruptcy Conference; the Federal Depository Insurance Corp.'s Committee on Economic Inclusion; the National Bankruptcy Review Commission. As I’ve noted, she’s eminently credentialed.

She signals progressive pieties that flatter students and colleagues, making them feel they aren’t just careerist clerks but Deep Thinkers interested in Profound Issues.

Most university professors are expected to produce a steady stream of peer-reviewed academic articles and research papers related to their fields. Generally, law professors have some relief from this severity; because law schools are usually profit centers for their universities, law school teachers can focus on classroom teaching rather than driven academic publication. Still, a law professor is expected to produce — or at least contribute to — the occasional academic paper.

Here, Warren has had some trouble.

In 2005, she and several colleagues published a study in the academic journal Health Affairs on the relationship between medical bills and individual bankruptcy. They concluded that half of all families filing for bankruptcy did so in the aftermath of a serious medical problem and that 75 percent of those families had some form of medical insurance. This gave a lot of rhetorical ammunition to people vilifying “evil insurance companies” and calling for “health care reform.”

Some readers questioned the study’s methods. As a surprisingly good analysis from ABC News noted:

The Harvard report claims to measure the extent to which medical costs are “the cause” of bankruptcies. In reality its survey asked if these costs were “a reason” — potentially one of many — for such bankruptcies.

Beyond those who gave medical costs as “a reason,” the Harvard researchers chose to add in any bankruptcy filers who had at least $1,000 in unreimbursed medical expenses in the previous two years. Given deductibles and copays, that’s a heck of a lot of people.

Moreover, Harvard’s definition of “medical” expenses includes situations that aren’t necessarily medical in common parlance, e.g., a gambling problem, or the death of a family member. If your main wage-earning spouse gets hit by a bus and dies, and you have to file, that’s included as a “medical bankruptcy.”

So, the study was marred by the hacky left-wing politics that pass for “consensus” in many of the social sciences. (The University of East Anglia’s Climate Research Unit caused a similar controversy when it filled its reports on global warming with comparable manipulations.)

While academic research isn’t her forte, Warren has shown greater enthusiasm for more popular fare. She has co-authored (with her daughter, Amelia Tyagi) two consumer books on personal finance, All Your Worth: The Ultimate Lifetime Money Plan and The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke. The books offer useful, if basic, financial advice. They read like personal-finance versions of celebrity cookbooks — people who come to the books because they like Warren probably find them worth the price; others probably don’t. In its review of The Two Income Trap, Time magazine wrote: “For families looking for ways to cope, Warren and Tyagi mainly offer palliatives. . . . Readers who are already committed to a house and parenthood will find little to mitigate the deflating sense that they have nowhere to go but down.” Like most of the establishment media, Time has been generally favorable to Warren in other contexts.

In the mid-2000s, Warren and some of her Harvard law students wrote a column called Warren Reports for the popular left-wing internet news site TalkingPointMemo.com. Warren Reports purported to be a deep-think collaboration like the libertarian-leaning opinion site Volokh Conspiracy; it ended up being less deep analysis and more hacky partisan spin.

But Warren’s hacky politics found an audience. On November 14, 2008 — days after Barack Obama had been elected president — she was appointed by Senate Majority Leader Harry Reid to chair the five-member Congressional Oversight Panel created to oversee the implementation of the Emergency Economic Stabilization Act and its main product, the Troubled Assets Relief Program (TARP).

In other words, Warren oversaw the Wall Street bailout.

Through her term as chair, the Congressional Oversight Panel released monthly reports that evaluated the bailout and related programs. These reports — and videos that accompanied them — served as bully pulpit for Warren. She focused her regulatory enthusiasms on topics including: bank stress tests, commercial real estate, consumer and small business lending, farm loans, financial regulatory reform, foreclosure mitigation, government guarantees, the automobile industry, and the impact of TARP on financial markets. She also testified frequently before House and Senate committees.

From these unlikely venues, a star was born. Various left-wing internet news sites and new media outlets linked to her videos and reported on her congressional testimony. Like the campus radicals at UPenn and Harvard, they were entranced by the soft totalitarianism of her schoolmarm demeanor.

Throughout her various congressional testimonies and internet videos, Warren advocated for the creation of a new Consumer Financial Protection Bureau. In a December 2009 interview with Newsweek magazine, Warren said:

To restore some basic sanity to the financial system, we need two central changes: fix broken consumer-credit markets and end guarantees for the big players that threaten our entire economic system. If we get those two key parts right, we can still dial the rest of the regulation up and down as needed. But if we don't get those two right, I think the game is over. I hate to sound alarmist, but that's how I feel about this.

(Reread that last sentence, keeping in mind the famous negotiating aphorism: “Everything before the ‘but’ is a lie.”)

This quote embodies two essential traits of Warren’s political persona.

First, she identifies important issues but comes to illogical conclusions about them. She’s right that moral hazard had dulled the capital markets; government guarantees for banks that are too big to fail inexorably leads to more failure. But she doesn’t seem to understand her own point. She wants more well-intentioned regulation to cure the problems caused by previous well-intentioned regulation.

Second, she leads with her heart — which is good in love letters but not so great in governance. Most of her public policy statements are full of prefaces, parentheticals and sidebars about how she feels about things.

One challenge for a politician who has lots of stupid people cheering for her everywhere she goes is to avoid losing any connection to reality.

In time, Warren got her new (and additional) consumer protection agency. The Frank-Dodd Wall Street Reform and Consumer Protection Act, signed into law in July 2010, created the United States Consumer Financial Protection Bureau — which some in the Obama administration hoped would grow as large and powerful as the FBI.

Warren’s growing legions of collectivist supporters wanted her to be named head of the new bureau. She wasn’t. Some collectivists saw this as apostasy on Obama’s part — he’d caved to the Wall Street establishment by not appointing the woman who’d supervised the bailout of the Wall Street establishment. Others collectivists blamed “the Republican congress” for blocking her ascent.

Warren settled instead for the consultative position of “Special Advisor” to the Bureau. Which she kept for less than a year, when she quit to launch her U.S. Senate campaign. On her way out, she issued a farewell statement (surely one of the few Special Advisors to a non-cabinet-level agency ever to do so) that read, in part:

Four years ago, I submitted an article to Democracy Journal that argued for a new government agency called the Financial Product Safety Commission. I felt strongly that a new consumer agency would make the credit markets work better for American families and strengthen the economic security of the middle class. I leave this agency, but not this fight . . . the issues we deal with — a middle class that has been squeezed and business models built on tricks and traps — are deeply personal to me, and they always will be.

Again, rich subject matter and a jabberwocky conclusion. A “new government agency” will make credit markets “work better for American families”? Not likely. The lesson of the subprime mortgage collapse and the current recession is that statist abominations like the Community Redevelopment Act, TARP (the Wall Street bailout which, it bears repeating, Warren administered) and Fannie Mae/Freddie Mac create moral hazard and obstruct market efficiency.

And, again, the pabulum about her “deeply personal” feelings. Warren’s feelings are a big part of her public persona — as big as policy details or the effects they have on objective reality. This is an unexpected focus for a law professor. But Tip O’Neill would understand. Feelings work well at the retail political level. Paste-eating collectivists put maximum importance on “personal narratives”; they care less about logic or objective reality.

Warren has peddled her emotions with some success in the popular media. She appeared several times on the Dr. Phil TV show. She’s been a recurring guest on The Daily Show. She talked about Wall Street greed in Michael Moore’s documentary Capitalism: A Love Story. And she’s a staple on less popular TV talk shows hosted by the likes of Charlie Rose, Bill Maher, and Rachel Maddow.

Her focus on “personal narrative” also plays into some au courant gender-studies topics. But in a way that doesn’t play out well for gender equality. In short, some on the American Left believe that women prefer narratives to facts . . . and these types applaud Warren’s constant drumbeat of “feelings” that are “deeply personal” to her. But lost in all this postmodernism and academic jargon is the ugly and ancient assumption that women aren’t up to analysis of objective reality.

When Warren jabbers on about deeply personal feelings, she’s not so much different than the notorious talking Barbie doll who complained, “Math is hard!”

For those who are inclined to like Warren, these things don’t matter. They don’t even register. A quick survey of the reader comment sections of left-leaning internet news sites finds the following:

  • I'm 'blown-away' by Elizabeth: she's like a breath of fresh air. I watch this video every morning: its my Doxology!!
  • I love her!!!!!!!!!!!!!!!!!!!!!!
  • I love Elizabeth Warren! Such a breath of fresh air. I only wish I could vote for her. But, unfortunately, I'm in Ohio. We need more crusaders like her. You go girl.
  • If the Dems are smart they will highlight E Warren for the next 14 months and then give her a high profile role in the Senate because she IS 2016 staring them right in the face and challenging them to step up.
  • Love her. And I wish she were running for President now. But, she'll be no more experienced in 2016 than Obama was in 2008.
  • I love Elizabeth Warren. She saw the whole mess coming and did something about it. Her campaign now is the most valuable thing I can imagine for the Democrats over the next year.
  • Warren's courage has been contagious so far. Her clarion call to justice for the next generation of Americans can provide Democrats and progressives with an opportunity to reclaim the narrative about how to make America work again for everyone.

(from the Huffington Post)

  • I'm so JEALOUS... I live in Missouri and wish we had someone like Elizabeth Warren to run here. She is AMAZING and she's gonna kick Scott Brown's ass.
  • Getting rid of Scott Brown AND having a MA senator in the ranks of Bernie, Al, and Sherrod?!? Be still my beating heart...Elizabeth Warren will be a wonderful successor to Sen Kennedy.
  • a massive showing for the person who is probably one of the most effective leaders we have seen in a long time.

(from the Daily Kos)

In many ways, these comments are typical of political commentary of all political stripes on the internet. Personality-driven. Egocentric (note how many of the comments start with and focus on the “I” of the commenter). Infantile. At their best, such sentiments can be charming; at their worst, they’re moronic.

And, when Warren is observed in this light, she begins to resemble someone her fans at the Huffington Post and Daily Kos ritually hate: Sarah Palin.

On the surface, Warren is a sort of anti-Palin. Dowdy. Scolding. Harvard professor. Twice-married (the second time to a deferential fellow Harvard professor). Credentialed. Elitist.

But dig a little deeper. Oklahoma native. Scholarship student at a third-tier college. Married at 19. Less-than-gilded law school at University of Houston and Rutgers-Newark.

She’s like Palin in significant ways. They both have built bases of popular support on checkered histories in public service; they both welcome the biases and preconceptions of their supporters.

Here’s an illustrative anecdote: When I told one lefty acquaintance that I was surprised an academic of such modest background had advanced so far, my acquaintance replied indignantly: “What are you talking about? Elizabeth Warren went to Harvard.”

Warren fairly cried out for libertarian scrutiny with one recent quote. A supporter filmed some video of the candidate speaking at a fundraising event. Asked about the president’s ineffective attempts to raise taxes on the wealthy, Warren said:

I hear all this, “You know, well, this is class warfare. This is whatever.” No! There is nobody in this country who got rich on his own. Nobody! You built a factory out there? Good for you! But I want to be clear: You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You, uh, were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory and hire someone to protect against this because of the work the rest of us did.

Now, look: You built a factory and it turned into something terrific or a great idea, God bless! Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

The video became a sensation on the internet. Collectivists cheered Warren’s “full-throated” arguments for wealth redistribution.

But reread the quote — it’s not quite that. It’s a poorly-made argument about externalities.

Like a debater who knows she’s making a weak argument, Warren picks the easiest points to support her case for a social contract. Only the most rigid anarchist would deny legitimate externalities like roads and reasonable law enforcement. Those aren’t the things that are bankrupting America. Welfare programs, subsidized mortgages, “free” public services and defined-benefit pensions are the problems.

The promiscuous enthusiasms of Warren’s fans lead them to some genuinely bizarre conclusions.

As far as her talk of workers that the collective has paid to educate, Warren needs to talk to some actual employers. The failure of the American elementary and secondary education system is driving some firms to look abroad and in some cases relocate for competent employees.

Lastly, the notion of “pay it forward” as part of a social contract is dubious. A social contract should more modest than her ambitions for investment in future outcomes. Support of externalities and infrastructure aren’t about paying it forward — a phrase that has developed a popular connotation of karmic debt that people today owe people in the future — they are about paying for external goods in the here and now.

Warren’s fans aren’t likely to hear any of this, of course. In fact, their promiscuous enthusiasms lead them to some genuinely bizarre conclusions. Here’s what one halfwit fan wrote about Warren’s “pay it forward” quote:

She's wonderful, and dead on with her comments about public investments enabling private success. But she's wrong about "debt" and the national "credit card". Money is a public monopoly. The primary way it comes about is thru federal deficit spending. And US dollars precede US Treasury debt. So there is nothing for children or granchildren to pay back, and there is no "hole" in the budget.

A challenge for a politician who has lots of stupid people cheering for her everywhere she goes is to avoid losing any connection to reality. Life in an echo chamber can lead to bad choices.

Recently, the Daily Kos ran an adoring article on Warren that included a picture of a room full of lumpenprole women and pear-shaped men, cheering on their majestic crusader. To that crowd, and later to several media outlets, Warren bragged that she was the spiritual founder of the Occupy Wall Street protesters. “I created much of the intellectual foundation for what they do.” And:

. . . no one understands better what the frustration is right now. The people on Wall Street broke this country. And they did it one lousy mortgage at a time. It happened more than three years ago, and there has still been no basic accountability, and there has been no real effort to fix it. That’s why I want to run for the United States Senate. That’s what I want to do to change the system.

The National Republican Senatorial Committee jumped on that, issuing a quick press release noting that some of “her Occupy acolytes in Boston” had fought with the police. And ended up in chains.

At the same time, some wild-eyed Occupy Wall Street protesters have demanded that Warren “repudiate” — a totalitarian word — Obama’s bailout of big investment banks (which, again, she oversaw) before they will support her bid for the U.S. Senate. Doesn’t seem like a nice way to treat the lady who created much of their intellectual foundation.

Warren invites this lunacy. By throwing in with the Maoist protesters, she’s likely to have marginalized herself.

There’s a whole year in which candidate Warren’s signals to campus radicals will come back to haunt her. At the Daily Kos, people who “love” Warren are begging her to run for president, in 2016 if not sooner.

A rational person can only hope their love for Warren will be fleeting, just as their love for Obama was. In the mean time, the woman who oversaw the Wall Street bailouts will have talked a lot about her deeply-held feelings. And inched free people who build factories or have great ideas a little closer to slavery.




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