ALBERT HERTER

Archive for May, 2010|Monthly archive page

‘700-HOUR SILENT OPERA REACHES FINALE AT MoMA,’ by Holland Carter in the N. Y. Times.

In Uncategorized on May 31, 2010 at 08:23

700-Hour Silent Opera Reaches Finale at MoMA

By HOLLAND COTTER

Published: May 30, 2010

At 5 p.m. Monday the longest piece of performance art on record, and certainly the one with the largest audience, comes to an end. Since her retrospective opened at the Museum of Modern Art on March 14, the artist Marina Abramovic has been sitting, six days a week, seven hours a day in a plain chair, under bright klieg lights, in MoMA’s towering atrium. When she leaves that chair Monday for the last time, she will have clocked 700 hours of sitting.During that time her routine seldom varied. Every day she took her place just before the museum doors opened and left it after they closed. Her wardrobe was consistent: a sort of concert gown with a long train, in one of three colors (red, blue and white).

Always her hair, in a braided plait, was pulled forward over her left shoulder. Always her skin was an odd pasty white, as if the blood had drained away. Her pose rarely changed: her body slightly bent forward, she stared silently and intently straight ahead.

There was one variable, a big one: her audience.

Visitors to the museum were invited, first come first served, to sit in a chair facing her and silently return her gaze. The chair has rarely, if ever, been empty. Close to 1,400 people have occupied it, some for only a minute or two, a few for an entire day.

Sitting with Ms. Abramovic has been the hot event of the spring art season. Celebrities — Bjork, Marisa Tomei, Isabella Rossellini, Lou Reed, Rufus Wainwright — did a stint. Young performance artists seized a moment in the limelight. One appeared in his own version of an Abramovic gown to propose marriage. Certain repeat sitters became mini-celebrities, though long-time waiters on line stared daggers at those who sat too long.

Thanks to the Internet many people saw all of this without being there. A daily live feed on MoMA’s Web site, moma.org, has had close to 800,000 hits. A Flickr site with head shots of every sitter has been accessed close to 600,000 times. Yet foot traffic has been heavy. By the museum’s estimate, half a million people have visited all or part of the Abramovic retrospective, “The Artist Is Present,” of which the atrium piece is a small part.

The rest of the show, installed on the museum’s sixth floor, is a problem. It is made up primarily of videos and photographs of the artist’s performances over nearly 40 years, beginning when she was a student in Belgrade, Yugoslavia, where she was born in 1946.

Her solo work from the early 1970s was hair-raisingly nervy. She stabbed herself, took knockout drugs, played with fire. For one piece she stood silent in a gallery for six hours, having announced that visitors could do anything they wanted to her physically. At one point a man held a gun to her neck. Her eyes filled with tears, but she didn’t flinch.

In 1976 she started collaborating with the German artist Uwe Laysiepen, known as Ulay. Some of their performances were punishing athletic events, as they slammed their bodies together or into walls. Others were almost aggressively passive. For a piece called “Imponderabilia” they stood facing each other, nude, in a narrow doorway in a museum. Anyone wanting to go from one gallery to another had no choice but to squeeze awkwardly and intimately between them.

Ms. Abramovic restaged “Imponderabilia,” along with some other works, for the MoMA show using actors. And although the nudity caused a buzz, the restaging fell flat. Two elements that originally defined performance art as a medium, unpredictability and ephemerality, were missing. Without them you get misrepresented history and bad theater.

Evidently Ms. Abramovic doesn’t agree. In 2005, at the Guggenheim Museum, she restaged vintage performance pieces by other artists (Vito Acconci, Joseph Beuys) with herself in the leading roles. She recently established the Marina Abramovic Institute for Preservation of Performance Art, to be housed in upstate New York.

In the near future she will be collaborating with the director Robert Wilson on a stage work based on her life. By the sound of it, this project will mark her furthest departure yet from old-school performance art and into the realm of closely scripted theater. What it will have, however, is her charismatic personal presence, and that means a lot. That presence is probably the most important ingredient missing from the restagings. It is what makes the atrium performance compelling. For better and worse, it has carried Ms. Abramovic’s career.

One of her lifelong heroes is the opera singer Maria Callas, to whom she can bear a striking physical resemblance. Callas was a disciplined, risk-oriented musician, made vulnerable by a voice that began to disintegrate early. Increasingly, as she aged, every performance became an ordeal, an invitation to failure. Her willingness to face failure became the prevailing drama of her life. It was a drama of survival, and her fans had a part in it: she needed them to need her, so they did.

That’s that classic diva dynamic. And what we’re seeing in the MoMA atrium is basically a 700-hour silent opera. Ms. Abramovic, with her extravagant costume, her bent shoulders and her mournful gaze, is the prima donna. Visitors are cast as rapt audience, commenting chorus, supporting soloists. Unpredictability is in the air: Will she make it through the day? Will she faint from pain? Will she cancel at the last minute?

When I dropped by last week, one sitter, a repeater, sat across from Ms. Abramovic with his hands clasped to his chest, like a tenor about to burst into song or a worshiper transported in prayer. Perfect. That Ms. Abramovic will be collaborating with Mr. Wilson, a once-radical creator of epic experimental works and now best known for his ritualistic productions of Puccini and Wagner, is also perfect.

Of restagings I remain an unbeliever. Of Ms. Abramovic’s recent overblown solo pieces, seen in video in the sixth-floor installation, I’m not a fan. But the atrium performance works because she is simply, persistently, uncomfortably there. As of 5 p.m., she won’t be, though. The klieg lights will dim. The audience will move on. Something big will be gone, and being gone will be part of the bigness.

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‘700-HOUR SILENT OPERA REACHES FINALE AT MoMA, ‘ by Holland Cotter in the N. Y. Times.

In Uncategorized on May 31, 2010 at 03:54

ART

700-Hour Silent Opera Reaches Finale at MoMA

By HOLLAND COTTER

Published: May 30, 2010

Monday the longest piece of performance art on record, and certainly the one with the largest audience, comes to an end. Since her retrospective opened at the Museum of Modern Art on March 14, the artist Marina Abramovic has been sitting, six days a week, seven hours a day in a plain chair, under bright klieg lights, in MoMA’s towering atrium. When she leaves that chair Monday for the last time, she will have clocked 700 hours of sitting.

During that time her routine seldom varied. Every day she took her place just before the museum doors opened and left it after they closed. Her wardrobe was consistent: a sort of concert gown with a long train, in one of three colors (red, blue and white).

Always her hair, in a braided plait, was pulled forward over her left shoulder. Always her skin was an odd pasty white, as if the blood had drained away. Her pose rarely changed: her body slightly bent forward, she stared silently and intently straight ahead.

There was one variable, a big one: her audience.

Visitors to the museum were invited, first come first served, to sit in a chair facing her and silently return her gaze. The chair has rarely, if ever, been empty. Close to 1,400 people have occupied it, some for only a minute or two, a few for an entire day.

Sitting with Ms. Abramovic has been the hot event of the spring art season. Celebrities — Bjork, Marisa Tomei, Isabella Rossellini, Lou Reed, Rufus Wainwright — did a stint. Young performance artists seized a moment in the limelight. One appeared in his own version of an Abramovic gown to propose marriage. Certain repeat sitters became mini-celebrities, though long-time waiters on line stared daggers at those who sat too long.

Thanks to the Internet many people saw all of this without being there. A daily live feed on MoMA’s Web site, moma.org, has had close to 800,000 hits. A Flickr site with head shots of every sitter has been accessed close to 600,000 times. Yet foot traffic has been heavy. By the museum’s estimate, half a million people have visited all or part of the Abramovic retrospective, “The Artist Is Present,” of which the atrium piece is a small part.

The rest of the show, installed on the museum’s sixth floor, is a problem. It is made up primarily of videos and photographs of the artist’s performances over nearly 40 years, beginning when she was a student in Belgrade, Yugoslavia, where she was born in 1946.

Her solo work from the early 1970s was hair-raisingly nervy. She stabbed herself, took knockout drugs, played with fire. For one piece she stood silent in a gallery for six hours, having announced that visitors could do anything they wanted to her physically. At one point a man held a gun to her neck. Her eyes filled with tears, but she didn’t flinch.

In 1976 she started collaborating with the German artist Uwe Laysiepen, known as Ulay. Some of their performances were punishing athletic events, as they slammed their bodies together or into walls. Others were almost aggressively passive. For a piece called “Imponderabilia” they stood facing each other, nude, in a narrow doorway in a museum. Anyone wanting to go from one gallery to another had no choice but to squeeze awkwardly and intimately between them.

Ms. Abramovic restaged “Imponderabilia,” along with some other works, for the MoMA show using actors. And although the nudity caused a buzz, the restaging fell flat. Two elements that originally defined performance art as a medium, unpredictability and ephemerality, were missing. Without them you get misrepresented history and bad theater.

Evidently Ms. Abramovic doesn’t agree. In 2005, at the Guggenheim Museum, she restaged vintage performance pieces by other artists (Vito Acconci, Joseph Beuys) with herself in the leading roles. She recently established the Marina Abramovic Institute for Preservation of Performance Art, to be housed in upstate New York.

In the near future she will be collaborating with the director Robert Wilson on a stage work based on her life. By the sound of it, this project will mark her furthest departure yet from old-school performance art and into the realm of closely scripted theater. What it will have, however, is her charismatic personal presence, and that means a lot. That presence is probably the most important ingredient missing from the restagings. It is what makes the atrium performance compelling. For better and worse, it has carried Ms. Abramovic’s career.

One of her lifelong heroes is the opera singer Maria Callas, to whom she can bear a striking physical resemblance. Callas was a disciplined, risk-oriented musician, made vulnerable by a voice that began to disintegrate early. Increasingly, as she aged, every performance became an ordeal, an invitation to failure. Her willingness to face failure became the prevailing drama of her life. It was a drama of survival, and her fans had a part in it: she needed them to need her, so they did.

That’s that classic diva dynamic. And what we’re seeing in the MoMA atrium is basically a 700-hour silent opera. Ms. Abramovic, with her extravagant costume, her bent shoulders and her mournful gaze, is the prima donna. Visitors are cast as rapt audience, commenting chorus, supporting soloists. Unpredictability is in the air: Will she make it through the day? Will she faint from pain? Will she cancel at the last minute?

When I dropped by last week, one sitter, a repeater, sat across from Ms. Abramovic with his hands clasped to his chest, like a tenor about to burst into song or a worshiper transported in prayer. Perfect. That Ms. Abramovic will be collaborating with Mr. Wilson, a once-radical creator of epic experimental works and now best known for his ritualistic productions of Puccini and Wagner, is also perfect.

Of restagings I remain an unbeliever. Of Ms. Abramovic’s recent overblown solo pieces, seen in video in the sixth-floor installation, I’m not a fan. But the atrium performance works because she is simply, persistently, uncomfortably there. As of 5 p.m., she won’t be, though. The klieg lights will dim. The audience will move on. Something big will be gone, and being gone will be part of the bigness.

‘THE FUTURE OF PERSONAL COMPUTING, PART I,’ by James Kwak at baselinescenario .com.

In Uncategorized on May 31, 2010 at 03:44

The Future of Personal Computing, Part 1

Posted: 30 May 2010 10:31 AM PDT

By James Kwak

This week, Apple passed Microsoft to become the most valuable technology company in the world (measured by the market value of its stock).* I’ve been wondering about Apple and, in particular, why “apps” — which at first glance struck me as a giant step backward in computing technology — have gotten so much buzz in the media. Then I bought an iPad, and while I understand apps a little better, I’m still perplexed. But since this isn’t a particularly technology-savvy audience, this is going to take some setting up. The background is here in Part 1; Part 2 will be coming shortly.

(Note that here I’m talking about personal computing, which is what people like you and I do on our own; enterprise computing is something very different that I’ve written about before, and still largely takes place on mainframe computers.)

A Little Background

Rather than recap the entire history of computing (hilarious synopsis here, hat tip Brad DeLong), I’ll start in the early 1990s. At this point, many people had personal computers, but for the most part they weren’t connected to anything except maybe a printer. (Actually, in the early 1980s my father brought home one of those primitive modems where you actually placed your phone receiver into a socket to communicate, so we could log into the mainframe at his university, but that was the exception.)

A personal computer has an operating system (Windows, OS X, Linux, etc.). This isn’t quite correct, but you can think of the OS as the software that manages  the physical parts of a computer: it runs the internal parts, like the CPU and the hard disk drive, and it controls the interface to the parts that you interact with, like the keyboard and the screen. There are also applications that run on a computer (Excel, PhotoShop, Half-Life, etc.). These applications don’t directly manage the physical parts of the computer; instead, they talk to the operating system, which in turn talks to the physical parts. They do this via the application programming interface, or API, that is published (made accessible) by the operating system.

For our purposes, there are two important features of this structure. First, each operating system has a different API, so you have to write programs differently for each OS. That doesn’t mean every line of code has to be different, but the way you call lower-level functions will differ across operating systems. On top of this, each OS developer (Microsoft, Apple, etc.) provides a different set of tools that you use to write programs for its OS. Software developers tend to become better at using one set of tools than another, and hence more likely to write programs for one OS than another.

Second, programs that can access the operating system’s API can do a lot of different things to your computer — this is what makes software powerful. At the same time, that means they can do damage to you.

So in the early to mid-1990s, we had self-contained personal computers (Windows or Mac) that ran programs that were written specifically for the operating systems they ran on. (A given program, like Excel, might exist in both Windows and Mac versions, but those were two completely different pieces of software that just looked the same on the outside.) Microsoft dominated this world for a couple of reasons, most importantly that many more programs were being written for Windows than for Mac. I believe this is partly because it was easier to write programs for Windows (Microsoft did a better job providing tools for developers), and partly because the Windows installed base was a lot bigger than the Mac installed base, so a new Windows application had a lot more potential buyers. The Windows installed base was bigger, in turn, because of Microsoft’s business model: it licensed Windows to any hardware manufacturer who wanted it, and therefore you had more diversity, more innovation, and lower price points for Windows PCs than for Macs. There were other factors as well, but those are the basics.

The Internet

Then Tim Berners-Lee gave us the Internet, and Marc Andreesen gave us the browser, and everything changed.

Ever since the mid-1990s, the Internet has played a bigger and bigger role in our daily computing. And so the most important application of all became the Internet browser (Internet Explorer, Netscape, Firefox, Safari, Chrome). This is an application that has the ability to find, display, and interact with resources on the Internet. Like all applications, it talks to the operating system via its API. But it’s special in a few respects.

One is simply that many people spend more time in their browsers than in all their other applications put together.

Another is that the Internet is largely built around a few basic standards, like HTML (a language that web pages are written in). All browsers have to be able to interpret those standards. So if you build web pages using those standards, you know that all browsers will be able to access them; you don’t have to worry about what operating system your visitor’s computer is running.**

A third is that the browser can be designed in such a way as to minimize risk to the computer it is running on. Ordinarily, browsers do not have the ability to modify data on your filesystem. This is for security reasons; the goal is to prevent web sites from automatically launching attacks on your computer. Of course, web sites are constantly asking if you want to save files to your computer, and then you’re on your own. And there are technologies that can be added to a browser, like ActiveX, that give programs on web sites the ability to get at your hard drive. But in principle, it is harder for a program that lives on a web site and runs inside a browser to do damage than for a program that you install on your computer and that has direct access to the operating system via the API.

The result was the golden age of web-based computing. Around a decade ago, during the Internet boom, the idea became popular in the technology community that all computing would move “to the Web.” That is, instead of installing standalone applications that ran on directly on our computers and accessed the operating system’s API directly, the interesting software would live on web sites on the Internet, would conform to Internet standards, and would therefore run properly in any browser. This was supposed to have several benefits:

Computing would be safer, since our computers would be protected by our browsers.***

People wouldn’t have to worry about installing and updating software — just about keeping track of their bookmarks.

Programs would be easier to learn and use for ordinary people, since browsers offer a consistent and intuitive way of interacting with programs.

We wouldn’t have to worry about carrying our data around, backing it up, and syncing it between computers, because it would all be on the Internet.

Developers would only have to write each program once, because then it would automatically work on all browsers (assuming everyone conformed to standards) and hence on all operating systems.

As a corollary, the Age of Microsoft would come to an end, since one pillar of its dominance — the huge community of developers writing for Windows — would now be irrelevant.

To some degree, this has happened. I’m writing this post using Firefox at WordPress.com. The computers in my house have three different operating systems and I use three different browsers (Firefox, Safari, and Chrome), which I keep synchronized using XMarks. I spend the vast majority of my computer time in a browser, and not just for consuming information; besides the blog (WordPress), my email, tasks, calendar, and contacts all belong to Google, I try to do most of my lightweight work in Google Documents, I share photos using Flickr, etc. Much of the modern, interactive computing that people do (like Facebook) is done in a browser.

This is, roughly speaking, what Google is all about: a world where the OS and the browser don’t matter because they are just tools to get us onto the Internet, where we keep our data and do all our work. It’s why Google is writing two operating systems, Android and Chrome, that will both be free, and is developing a suite of Web-based “productivity” applications; they want to cripple Microsoft’s business model by giving away their versions of the two things that make Microsoft so profitable: Windows and Office.

Microsoft is still a big, profitable company, because PCs will be around for a long time, most companies use Windows, Office, and other Microsoft products for networking, email, etc., and those products can be very sticky, especially in a corporate environment. But the world is moving away from the 1990s model. Microsoft recognizes this, of course. This is why they fought so hard to crush Netscape in the 1990s — they wanted control of the browser. And it’s why they’ve spent so much money — Hotmail, MSN, .NET, Windows Live, Bing — trying to establish a presence on the Internet. But they just haven’t been very good at it.

So at a high level, this is the story of personal computing over the past fifteen years. But recently there has been a new plot twist, which will be subject of Part 2.

* Great quote by Steve Ballmer in the New York Times story: “Windows phone – boom! We have to deliver devices with our partners this Christmas.” Does he realize that he talks like Ari Gold on Entourage?

** This can be thought of as a kind of isolation layer. With Windows, software developers don’t need to worry about whether the customer has a Dell, HP, or Acer computer; as long as it has Windows, it will behave in a predictable way. With Internet standards, now you don’t need to worry about what OS the customer has, just what browser she has.

*** Yes, browsers have security flaws, so this isn’t a perfect system.

‘OBAMA’S KATRINA? MAYBE WORSE,’ by Frank Rich in the Sunday New York Times,

In Uncategorized on May 30, 2010 at 07:27

OP-ED COLUMNIST

Obama’s Katrina? Maybe Worse

By FRANK RICH

Published: May 28, 2010

FOR Barack Obama’s knee-jerk foes, of course it was his Katrina. But for the rest of us, there’s the nagging fear that the largest oil spill in our history could yet prove worse if it drags on much longer. It might not only wreck the ecology of a region but capsize the principal mission of the Obama presidency.

Before we look at why, it would be helpful to briefly revisit that increasingly airbrushed late summer of 2005. Whatever Obama’s failings, he is infinitely more competent at coping with catastrophe than his predecessor. President Bush’s top disaster managers — the Homeland Security secretary, Michael Chertoff, as well as the notorious “Brownie” — professed ignorance of New Orleans’s humanitarian crisis a full day after the nation had started watching it live in real time on television. When Bush finally appeared, he shunned the city entirely and instead made a jocular show of vowing to rebuild the coastal home of his party’s former Senate leader, Trent Lott. He never did take charge.

The Obama administration has been engaged with the oil spill from the start — however haltingly and inarticulately at times. It was way too trusting of BP but was never AWOL. For all the second-guessing, it’s still not clear what else the president might have done to make a definitive, as opposed to cosmetic, difference in plugging the hole: yell louder at BP, send in troops and tankers, or, as James Carville would have it, assume the role of Big Daddy? The spill is not a Tennessee Williams play, its setting notwithstanding, and it’s hard to see what more drama would add, particularly since No Drama Obama’s considerable talents do not include credible play-acting.

But life isn’t fair, and this president is in a far tougher spot in 2010 than his predecessor was in 2005.

When Katrina hit, Bush was in his second term and his bumbling was not a shock to a country that had witnessed two-plus years of his grievous mismanagement of the Iraq war. His laissez-faire response to the hurricane was also consistent with his political DNA as a small-government conservative in thrall to big business. His administration’s posture toward the gulf region had been telegraphed at its inception, when Dick Cheney convened oil and gas cronies, including Enron’s Ken Lay, to set environmental and energy policy. The Interior Department devolved into a cesspool of corruption, even by its historically low standards, turning the Bush-Cheney antigovernment animus into a self-fulfilling prophecy and bequeathing Obama a Minerals Management Service as broken as the Bush-Cheney FEMA exposed by Katrina.

Obama was elected as a progressive antidote to this discredited brand of governance. Of all the president’s stated goals, none may be more sweeping than his desire to prove that government is not always a hapless and intrusive bureaucratic assault on taxpayers’ patience and pocketbooks, but a potential force for good.

He returned to this theme with particular eloquence in his University of Michigan commencement speech 10 days after the Deepwater Horizon blowout. He reminded his audience that under both parties the federal government helped build public high schools, the transcontinental railroad and the interstate highway system, engineered the New Deal and Medicare — and imposed safety and environmental standards on the oil industry. Quoting Lincoln, Obama said that “the role of government is to do for the people what they cannot do better for themselves.”

We expect him to deliver on this core conviction. But the impact on “the people” of his signature governmental project so far, health care reform, remains provisional and abstract. Like it or not, a pipe gushing poison into an ocean is a visceral crisis demanding visible, immediate action.

Obama’s news conference on Thursday — explaining in detail the government’s response, its mistakes and its precise relationship to BP — was at least three weeks overdue. It was also his first full news conference in 10 months. Obama’s recurrent tardiness in defining exactly what he wants done on a given issue — a lapse also evident in the protracted rollout of the White House’s specific health care priorities — remains baffling, as does his recent avoidance of news conferences. Such diffidence does not convey a J.F.K.-redux in charge of a neo-New Frontier activist government.

Long before Obama took office, the public was plenty skeptical that government could do anything right. Eight years of epic Bush ineptitude and waste only added to Washington’s odor. Now Obama is stuck between a rock and a Tea Party. His credibility as a champion of reformed, competent government is held hostage by video from the gulf. And this in an election year when the very idea of a viable federal government is under angrier assault than at any time since the Gingrich revolution and militia mobilization of 1994-5 and arguably since the birth of the modern conservative movement in the 1960s.

This is why the more revealing strand of Rand Paul’s post-primary victory romp may have been his musings about BP, not civil rights law — although they are two sides of the same ideological coin. He called out Obama and his administration for sounding “really un-American” in their “criticism of business.” He asked that we stop the “blame game” over the disaster and instead just accept the fact that “accidents happen.” Much as Paul questioned the federal government’s role in ordering lunch counters to desegregate, so he belittled its intrusion into BP’s toxic private enterprise. But unlike the Civil Rights Act of 1964, the role of government in corporate regulation is a continuing battle, not settled law.

Hardly were those words out of Paul’s mouth than the G.O.P. gave him the hook. He dropped his scheduled appearance on last Sunday’s “Meet the Press.” Mitch McConnell, the Republican majority leader and Paul’s newly self-appointed minder, declared that his fellow Kentuckian had said “quite enough for the time being in terms of national press coverage.” Establishment conservatives have scrambled to portray Paul as either an innocent victim of a liberal media game of “gotcha” or an inexperienced citizen-politician who made the rookie mistake of conducting campaign interviews as if they were classroom seminars in Libertarian theory. We were told he really didn’t mean what he was saying, and that he certainly didn’t represent the G.O.P. or the Tea Party movement.

Whom are they kidding? Paul rightly described his victory as “a message from the Tea Party” that it was on the march “to take our government back.” And if he doesn’t represent the G.O.P., who does if not his most powerful supporters and ideological fellow travelers, Glenn Beck and Sarah Palin? Aside from saying no to Obama, the Republican Party has no ideas except Tea Party ideas, Rand Paul ideas. And as The Economist, hardly a liberal observer, put it, Paul’s views are those of “a genuine radical who believes in paring government down to the bone.”

The president of the American Enterprise Institute, the conservative think tank, codified the mission in apocalyptic terms last weekend. The new American “culture war,” Arthur C. Brooks wrote in The Washington Post, is not “over guns, gays or abortion” but pits “the principles of free enterprise” against the “European-style statism” he accuses Obama of fomenting. It’s a war that takes no prisoners: the A.E.I. purged the former Bush speechwriter David Frum after he broke with the strict party line.

The stakes are high. To win this culture war, the right must rewrite history — and not just that of the Bush response to Katrina. In his jeremiad, Brooks held only “government housing policy” responsible for the 2008 economic meltdown and gave a pass to what he regards as an already overregulated Wall Street. Palin has brazenly accused Obama of being in financial hock to Big Oil when it’s her own “drill, baby, drill” party that has collected three-quarters of Big Oil’s campaign cash for decades.

The Tea Party is meanwhile busy rewriting America’s early history under Beck’s tutelage by enforcing a vision of the Constitution tantamount to the Creationists’ view of Genesis. We must obey the words of the founding fathers literally — or what the Tea Partiers think those words to be. (Many Tea Partiers seem unaware that Medicare is a government entitlement postdating Tom Paine.) There can be no evolution or amendments. Any Obama initiatives are sacrilegious. All previous add-ons are un-American and must be pared away, from the Department of Education to the Americans with Disabilities Act. Michael Steele, the party chairman, attacked Elena Kagan for joining Thurgood Marshall in finding the original text of the Constitution “defective” because, among other defects, it countenanced slavery.

The only good news from the oil spill is that when catastrophe strikes, even some hard-line conservatives, like Gov. Bobby Jindal of Louisiana, start begging for the federal government to act, and act big. It’s the crunch moment for government to make its case — as Obama belatedly started to do on Thursday. But words are no match for results. As long as the stain washes up on shore, the hole in BP’s pipe will serve the right as a gaping hole in the president’s argument for expanded government supervision of, for starters, Big Oil and big banks. It’s not just the gulf that could suffer for decades to come.

‘PLACING THE BLAME AS STUDENTS ARE BURIED IN DEBT, ‘ by Ron Lieber in the N. Y. Times.

In Uncategorized on May 30, 2010 at 03:36

YOUR MONEY

Placing the Blame as Students Are Buried in Debt

By RON LIEBER

Published: May 28, 2010

Like many middle-class families, Cortney Munna and her mother began the college selection process with a grim determination. They would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it.

Citibank gave Cortney Munna $40,000 in loans, though she had already amassed debt well into the five figures. It was like the “no doc” loans that home buyers used to get in over their heads.

Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she’s been enrolled in night school, which allows her to defer loan payments.

This is not a long-term solution, because the interest on the loans continues to pile up. So in an eerie echo of the mortgage crisis, tens of thousands of people like Ms. Munna are facing a reckoning. They and their families made borrowing decisions based more on emotion than reason, much as subprime borrowers assumed the value of their houses would always go up.

Meanwhile, universities like N.Y.U. enrolled students without asking many questions about whether they could afford a $50,000 annual tuition bill. Then the colleges introduced the students to lenders who underwrote big loans without any idea of what the students might earn someday — just like the mortgage lenders who didn’t ask borrowers to verify their incomes.

Ms. Munna does not want to walk away from her loans in the same way many mortgage holders are. It would be difficult in any event because federal bankruptcy law makes it nearly impossible to discharge student loan debts. But unless she manages to improve her income quickly, she doesn’t have a lot of good options for digging out.

It is utterly depressing that there are so many people like her facing decades of payments, limited capacity to buy a home and a debt burden that can repel potential life partners. For starters, it’s a shared failure of parenting and loan underwriting.

But perhaps the biggest share lies with colleges and universities because they have the most knowledge of the financial aid process. And I would argue that they had an obligation to counsel students like Ms. Munna, who got in too far over their heads.

How many people are like her? According to the College Board’s Trends in Student Aid study, 10 percent of people who graduated in 2007-8 with student loans had borrowed $40,000 or more. The median debt for bachelor’s degree recipients who borrowed while attending private, nonprofit colleges was $22,380.

The Project on Student Debt, a research and advocacy organization in Oakland, Calif., used federal data to estimate that 206,000 people graduated from college (including many from for-profit universities) with more than $40,000 in student loan debt in that same period. That’s a ninefold increase over the number of people in 1996, using 2008 dollars.

The Family

No one forces borrowers to take out these loans, and Ms. Munna and her mother, Cathryn, have spent the years since her graduation trying to understand where they went wrong. Ms. Munna’s father died when she was 13, after a series of illnesses.

She started college at age 17 and borrowed as much money as she could under the federal loan program. To make up the difference between her grants and work study money and the total cost of attending, her mother co-signed two private loans with Sallie Mae totaling about $20,000.

When they applied for a third loan, however, Sallie Mae rejected the application, citing Cathryn’s credit history. She had returned to college herself to finish her bachelor’s degree and was also borrowing money. N.Y.U. suggested a federal Plus loan for parents, but that would have required immediate payments, something the mother couldn’t afford. So before Cortney’s junior year, N.Y.U. recommended that she apply for a private student loan on her own with Citibank.

Over the course of the next two years, starting when she was still a teenager, she borrowed about $40,000 from Citibank without thinking much about how she would pay it back. How could her mother have let her run up that debt, and why didn’t she try to make her daughter transfer to, say, the best school in the much cheaper state university system in New York? “All I could see was college, and a good college and how proud I was of her,” Cathryn said. “All we needed to do was get this education and get the good job. This is the thing that eats away at me, the naïveté on my part.”

But Cortney resists the idea that this is a tale of bad parenting. “To me, it would be an uncharitable reading,” she said. “My mother has tried her best, and I don’t blame her for anything in this.”

The Lender

Sallie Mae gets a pass here, in my view. A responsible grownup co-signed for its loans to the Munnas, and the company eventually cut them off.

But what was Citi thinking, handing over $40,000 to an undergraduate who had already amassed debt well into the five figures? This was, in effect, a “no doc” or at least a “low doc” subprime mortgage loan.

A Citi spokesman declined to comment, even though Ms. Munna was willing to sign a waiver giving Citi permission to talk about her loans. Perhaps the bank worried that once it approved one loan, cutting her off would have led her to drop out or transfer and have trouble paying back the loan.

((GO TO NYTIMES.COM FOR THE BALANCE OF THE ARTICLE)))

‘TEACHING WORK VALUES TO CHILDREN OF WEALTH,’ by Paul Sullivan in the N. Y. Times.

In Uncategorized on May 29, 2010 at 23:03

WEALTH MATTERS

Teaching Work Values to Children of Wealth

By PAUL SULLIVAN

Steven D. Hayworth, chief executive of Gibraltar Private Bank and Trust, is thrilled that his daughter will be working this summer at a women’s clothing store before heading to college in the fall. It is not the particular job that pleases Mr. Hayworth. Rather, he is hoping his daughter will make the connection between how much she earns each day and what that will buy.

Would you encourage your children to work if they didn’t have to?

“As a parent who has worked his whole life and has had a little bit of success in my career, one of the huge life lessons I learned early on is the value of a dollar,” said Mr. Hayworth, whose bank is based in Coral Gables, Fla. “Particularly for children of upper-middle-class and affluent families, there’s no perspective on value. When the new Range Rover pulls into the driveway, there’s no concept of how many hours of hard work went into owning that vehicle.”

Unlike many collegebound children today, Mr. Hayworth’s daughter would have had no worries if she had not been able to find a job. She could have spent the summer by the pool knowing her parents had the money to put her through college.

But the fact that she does not have to work is exactly what worries Mr. Hayworth and many other affluent parents. The recession and tight job market have made it imperative to teach their children the value of work. They worry about that, it seems, more than about any short-term swings in their portfolios.

“This is a tremendously confusing time for families,” said Matthew E. Brady, head of wealth advisory in the Americas for Barclays Wealth. “The issue of children is the most important topic that affects our clients. It’s the topic that comes up most consistently in every conversation.”

A whole coterie of experts has sprung up in the last few years to coach the children of affluence into the working world. Gibraltar offers classes in “financial life skills” that cover topics including saving, preventing debt and how money affects friendships. J. P. Morgan Private Bank offers what it calls “Next Generation Leadership” seminars.

This may seem unnecessary, unfair or worse to parents with fewer means and just as many concerns about their children’s futures. But the central issue for all parents is the same: how do you raise children who are productive? With summer near, this is a good time to review how parents can truly help their children.

HOUSE RULES Parents of various means are facing the prospect of adult children who have to move home because they cannot find a job.

Brad Klontz, a financial psychologist and co-author of “Mind Over Money” (Broadway Business, 2009), said parents should set ground rules from the outset, including charging children rent. Without rules, there is a risk of what he calls “financial enabling.”

“It’s financial help that hurts,” he said. “You condition them that there will always be enough money — whatever my needs are, they will always be taken care of.”

In charging them to live back under your roof, you are also forcing them to become aware of expenses, which many of them may know little about.

“You have to help a kid understand what it means out there,” said Joline Godfrey, chief executive of Independent Means, a consultant in Santa Barbara, Calif., that focuses on financial education. “You can’t expect kids to go out in the world and be self-sufficient if they don’t know what a utility bill is.”

BAD HELP Parents usually mean well when they try to help their children financially. They do not want their children to fail or they want their children to have a better life than they had. But providing too much can hurt children.

This is not just an issue for college-age children. When children are younger, overscheduling them into after-school and summer programs robs them of the chance to accomplish things on their own, said Debbie Cox, managing director at J. P. Morgan Private Bank in Dallas. “They don’t have time to get into the community on their own,” she said. “Kids just don’t have time to get a job any more.”

Hand in hand with this is parents’ obsessive focus on formal education. It often comes at the expense of what Ms. Cox calls social and financial education. One thing a tough summer job market could be good for is improving children’s social education: volunteering is perfect for this and better than hanging out with friends.

“They need to learn what it’s like to get up every morning and get to that job and help someone with something,” Ms. Cox said.

Another bad thing for parents to do is always to solve their children’s problems. Todd M. Morgan, senior managing director at Bel Air Investment Advisors, a Los Angeles-based company that manages $5 billion, said the tendency among successful executives was to step into their children’s lives and fix things as they would in a boardroom. “Do not offer to fix or change something unless you’ve been invited to do it,” he said.

‘DISPATCHES FROM THE OTHER, ‘ by Francine du Plessix Gray in the Sunday New York Times Book Review. WAY TO GO CONNIE & SHEILA.

In Uncategorized on May 28, 2010 at 16:27

BOOK REVIEW PREVIEW

Dispatches From the Other

By FRANCINE du PLESSIX GRAY

Published: May 20, 2010

In 1946, when Simone de Beauvoir began to write her landmark study of women, “The Second Sex,” legislation allowing French women to vote was little more than a year old. Birth control would be legally denied them until 1967. Next door, in Switzerland, women would not be enfranchised until 1971. Such repressive circumstances account for both the fierce, often wrathful urgency of Beauvoir’s book and the vehement controversies this founding text of feminism aroused when it was first published in France in 1949 and in the United States in 1953. The Vatican placed it on the Index of Forbidden Books. Albert Camus complained that Beauvoir made Frenchmen look ridiculous. On these shores, the novelist Philip Wylie eulogized it as “one of the few great books of our era,” the psychiatrist Karl Menninger found it “pretentious” and “tiresome,” and a reviewer in The Atlantic Monthly faulted it for being “bespattered with the repulsive lingo of existentialism.”

THE SECOND SEX

By Simone de Beauvoir

Translated by Constance Borde and Sheila Malovany-Chevallier

800 pp. Alfred A. Knopf. $40

In her splendid introduction to this new edition, Judith Thurman notes that Blanche Knopf, wife of Beauvoir’s American publisher, heard about the book on a scouting trip to France and was under the impression that it was a highbrow sex manual. Knopf asked for a reader’s report from a retired zoologist, Howard M. Parshley, who was then commissioned to do the translation. Knopf’s husband urged Parshley to condense it significantly, noting that Beauvoir seemed to suffer from “verbal diarrhea.” Parshley complied, providing the necessary Imodium by cutting 15 percent of the original 972 pages. And so it was this truncated text, translated by a scientist with a college undergraduate’s knowledge of French, that ushered two generations of women into the universe of feminist thought, inspiring pivotal later books like Betty Friedan’s “Feminine Mystique” and Kate Millett’s “Sexual Politics.”

Constance Borde and Sheila Malovany-Chevallier’s new translation of “The Second Sex” is the first English-language edition in almost 60 years, and the first to restore the material Parshley excised. In this passionate, awesomely erudite work, Beauvoir examines the reasons women have been forced to accept a place in society secondary to that of men, despite the fact that women constitute half the human race. Supporting her arguments with data from biology, physiology, ethnology, anthropology, mythology, folklore, philosophy and economics, she documents the status of women throughout history, from the age of hunter-gatherers to the mid-20th century. In one of her most interesting chapters, “The Married Woman” (a chapter Parshley particularly savaged), she offers numerous quotations from the novels and diaries of Virginia Woolf, Colette, Edith Wharton, Sophia Tolstoy and others. She also scrutinizes the manner in which various male authors, from Montaigne to Stendhal to D. H. Lawrence, have represented women (and, in many cases, how they treated their wives). Urging women to persevere in their efforts at emancipation, she emphasizes that they must also do so for the sake of men: “It is when the slavery of half of humanity is abolished and with it the whole hypocritical system it implies that the ‘division’ of humanity will reveal its authentic meaning and the human couple will discover its true form.”

How does Beauvoir’s book stand up more than a half-century later? And how does this new translation compare with the previous one? I’m sorry to report that “The Second Sex,” which I read with euphoric enthusiasm in my post-college years, now strikes me as being in many ways dated. Written in an era in which a minority of women were employed, its arguments for female participation in the work force seem particularly outmoded. And Beauvoir’s truly paranoid hostility toward the institutions of marriage and motherhood — another characteristic of early feminism — is so extreme as to be occasionally hilarious. Every aspect of the female reproductive system, from puberty to menopause, is approached with the same ferocious disdain. Females of all living species are “first violated . . . then alienated” by the process of fertilization. Derogatory phrases like “the servitude of maternity,” “woman’s absurd fertility,” the “exhausting servitude” of breast-feeding, abound. (How could they not, since the author sees heterosexual love in general as “a mortal danger?”) According to Beauvoir, a girl’s first menstruation, which many of us welcomed with excitement and pride, is met instead with “disgust and fear. ” It “ inspires horror” and “signifies illness, suffering and death.” Beauvoir doesn’t appear to have spent much time with children or teenagers: a first menses, in her view, leads the girl to be “disgusted by her too-carnal body, by menstrual blood, by adults’ sexual practices, by the male she is destined for.”

If Beauvoir’s ruminations on “the curse” are pessimistic (and pessimism runs through “The Second Sex” like a poisonous river) her reflections on sexual initiation and marriage make them sound like torture. She chooses the most brutal examples of deflorations — mostly rapes — to make her points. Wedding nights “transform the erotic experience into an ordeal” that “often dooms the woman to frigidity forever.” It isn’t surprising, she adds, “that ‘conjugal duties’ are often only a repugnant chore for the wife.” “No one,” she argues, “dreams of denying the tragedies and nastiness of married life.” Conjugal love, in Beauvoir’s view, is “a complex mixture of attachment, resentment, hatred, rules, resignation, laziness and hypocrisy.” Even marriages that “work well” suffer “a curse they rarely escape: boredom.” Already alarmed? Wait until you come to the discussion of motherhood. A woman experiences the fetus as “a parasite.” “Maternity is a strange compromise of narcissism, altruism, dream, sincerity, bad faith, devotion and cynicism.” “There is nothing like an ‘unnatural mother,’ since maternal love has nothing natural about it.” It is significant that the only stage of a woman’s life Beauvoir has good things to say about is widowhood, which, in her view, most bear quite cheerfully. Upon losing their spouses, she tells us, women, “now lucid and wary, . . . often attain a delicious cynicism.” In old age, they maintain “a stoic defiance or skeptical irony.”

((( GO TO NYTIMES.COM TO READ FURTHER)))

Francine du Plessix Gray is writing a book about Marie Antoinette’s lover, the Swedish diplomat Axel von Fersen.

‘SO DAMN LITTLE MONEY, ‘ by Simon Johnson at baselinescenario .com.

In Uncategorized on May 28, 2010 at 03:18

So Damn Little Money

Posted: 27 May 2010 05:16 AM PDT

By Simon Johnson

The financial reform legislation currently heading into a June Senate-House conference will, at best, do little to affect the incentives and beliefs at the heart of the largest banks on Wall Street.  Serious attempts to strengthen the bill through amendment – such as Brown-Kaufman and Merkley-Levin – were either shot down on the floor of the Senate or, when their prospects seemed stronger, not allowed to come to a vote.

Senator Blanche Lincoln is holding the Alamo with regard to reining in the big broker-dealers in derivatives.  But these same people are bringing to bear one of the most intensely focused lobbying campaigns of recent years, bent on killing her provisions (or weakening them beyond recognition).  All the early indications are that the lobbyists, once again, will prevail.

At one level, Robert Kaiser nailed this topic in his recent book, “So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government.”  Elections have become more expensive, with most of the funding provided by special interests.  You can argue about which is the chicken and which is the egg, but the basic facts are inescapable.

“In 1974, the average winning campaign for the Senate cost $437,000; by 2006, that number had grown to $7.92 million. The cost of winning House campaigns grew comparably: $56,500 in 1974, $1.3 million in 2006.”[1]

Or look at the lifetime contributions by the financial sector to (some) senators who voted for and against the Brown-Kaufman amendment, which would have imposed a hard size cap and a hard leverage cap on the biggest banks – over $2 million per senator by this one partial count.

But wait. This is actually very little money considering what is at stake.  For an individual large firm actively engaged in derivatives trading, the stakes could easily be in the billions of dollars.  For the big banks as a whole, the amount they will be allowed to earn (and pay themselves) as a result of the failure of these financial reforms is – conservatively speaking – in the tens of billions of dollars.

In terms of modern Wall Street – for top bankers and also for hedge funds – the political contributions needed to make a difference are chump change.

And even if opponents of today’s biggest players on Wall Street were to become organized and raise money, presumably the big financial players could see that money and raise you some tens of millions of dollars without breaking a sweat (particularly after the Citizens United decision by the Supreme Court).

What can you possibly propose that would make a difference in the face of such resources – for example, as they will be deployed in and around the upcoming House-Senate conference to make sure that anything at all objectionable to Wall Street is further diluted?

Here’s the one idea (not mine, but the source prefers to remain anonymous): counter the money of Wall Street by bringing much more transparency to the conference.

Televising the conference meetings could help, but realistically this is also likely to push the substantive decision-making and discussion off-line.  Therefore, in addition, congressional leaders should be pressed agree to three non-waiveable rules for the conference and the conference report on the Wall Street reform bills:

Any amendments need to be posted on-line not less than three business days before any relevant conference meeting.  Second degree amendments (i.e., those filed as amendments to amendments) need at least 2 days notice on the same basis.

The House and the Senate will not discuss any conference report until the report as amended by the conference has been posted on-line in its entirety for at least 5 business days.

A red lined version of the conference report as amended – to show all changes – must also be posted on-line for not less than 5 business days before any vote on that conference report.

Without such provisions – which, by the way, are unlikely to be adopted – no one excluded from the back rooms will have the opportunity to learn what the amendments do or what is in the bill itself.

The point is not that this would necessarily stop the final and nearly complete victory of special interests.  But at least we will learn which members of Congress exactly sided with them, on why, and even why.  And this will help a great deal as we think about how best to move forward.

An edited version of this post appeared this morning on the NYT.com’s Economix; it is used here with permission.  If you would like to reproduce the entire post, please contact the New York Times.

‘A MEANINGFUL LOW FOR THE MARKET?,’ by Jurrien Timmer, Dir. of Investment Research, Fidelity Investments.

In Uncategorized on May 27, 2010 at 21:13

BY  JURRIEN TIMMER, DIRECTOR OF INVESTMENT RESEARCH, CO-PORTFOLIO MANAGER OF FIDELITY DYNAMIC STRATEGIES FUND, FIDELITY VIEWPOINTS — 05/26/10

It’s been a volatile month. After rallying from the May 6 “flash crash” stocks have been up and down, hitting the correction mark—a 10% drop from the most recent market peak. This week brought more volatility as investors have become concerned not only about Spanish banks but also about geopolitical tensions in the Korean Peninsula.

So, what are the odds that we are at a meaningful low? As a technical analyst, I watch chart patterns carefully for signals, so let’s look at the charts.

First of all, many technical conditions are now extremely oversold. In fact, some measures such as the Breadth Oscillator1 (see chart below) and the 30-Day Traders Index2 (TRIN) are now as oversold as they were at the March 2009 bottom—even though that low came after a 57% decline and this one after only a 14% correction.  Plus, we are sitting right on major support—an area that has been repeatedly tested by sellers—at the 1,050 area.

Investor sentiment also has turned bearish on stocks, which historically has been a bullish signal. The Daily Sentiment Index (DSI) has fallen to a mere 21% bulls, and AMG Data Services reported a significant outflow last week of some $4.3 billion from equity mutual funds. The intraday VIX index of New York Stock Exchange volatility spiking to 48 is another sign of extreme fear (although not as extreme as during the 2008 meltdown). Meanwhile, the DSI for T-Notes, considered a safe haven, hit 98% bulls recently. On the other hand, the DSI for crude oil was only 15% bulls.

What worries me?

I don’t believe the PIIGS (Portugal, Ireland, Italy, Greece, Spain) crisis is likely to be contagious in and of itself, the way the sub-prime debacle was in 2007. There just isn’t the same degree of leverage in the system. Also, U.S. banks don’t have exposure to Greek debt, the European Central Bank (ECB) has stepped in with its own version of TARP II, and I believe the Federal Reserve (Fed) is likely to do whatever it takes to keep the party going.

My broader concern is the notion that the U.S. could become the next Greece if we don’t grow our way out of debt. But, to the extent that scenerio could occur to some degree, it likely would be a few years away. After all, economic momentum seems to be quite strong in the U.S., plus the latest de-risking attack actually bid up Treasuries as a safe haven. If it were our turn for the bond market vigilantes to drive up long-term interest rates, then certainly Treasuries would have been the first line of attack.

Still, it concerns me that indicators like the LIBOR-OIS spread3 and the Bloomberg Financial Conditions Index (BFCI)4 have deteriorated in recent weeks. If that has to do with real contagion and not just a general move by investors to reduce risk, then my near-term outlook would be wrong.

Ironically, the threat of contagion could be seen as bullish. Why? Against a background of positive economic momentum, we now have a situation that could cause the Fed to become even looser than it has been.

What made 2009 so positive was the combination of an improving economy and an easy monetary policy. As the expectation mounted that the Fed was eventually going to take away the punchbowl, the bullishness faded.

Now, the Fed may feel it needs to recommit to an easy policy. That could mean renewed asset purchases, and, if necessary, liquidity facilities to prop up the funding markets.

So, instead of the Fed starting to get ready to take the punchbowl away, it may now have to pour even more into the bowl. That could put a whole new lease on life for the U.S. recovery and therefore the asset markets.

Long Term Capital Management redux?

This notion that the Fed is staying loose even though the recovery is continuing reminds me a bit of the 1998 Long Term Capital Management (LTCM) episode. Back then the economy was fine but we had systemic risk in the credit markets (because LT Capital had amassed a trillion-dollar book it couldn’t unwind). The Fed responded by cutting rates three times even though the economy was growing. What followed? The dot-com bubble. What could it be this time?

The Fed, the ECB, the dollar, the Euro

The DSI recently hit 2% bulls for the Euro and 98% bulls for the dollar, and speculators are record short on the Euro. On top of that, it would not surprise me if there is some coordinated G7 intervention in the U.S. dollar-Euro exchange rate. I think the only argument among the G7 would be which currency to buy. After all, nobody seems to want a strong currency these days—certainly not the U.S.

It makes sense to me that the speculators were dumping Euros in recent weeks. If Europe enforces fiscal austerity on its southern members, that drag on growth has to be offset somehow by something else, and that something else is likely to be loose monetary policy. Combine fiscal tightness with quantitative easing and what do you get? A weaker currency.

So, the weak Euro argument makes perfect sense. But what about the dollar?  If a budget and debt crisis at the state level becomes our version of Greece, and the 2012 elections enforce some sort of fiscal austerity here, what could be the outlet for growth? My conclusions would be an easy Fed and a weaker dollar.

When confronted with a debt crisis, many countries throughout history have done what comes easiest, and that is not austerity. Rather, they inflate and debase their currency. So, the race to the bottom continues. We just had the Euro’s turn. Could the greenback be next?

A buying opportunity?

Let me put my technician’s hat on again. Given the oversold condition of this market, my best guess is that we could rally from here. I suspect the market may be volatile all summer long, before possibly heading higher later this year.

‘WALL ST. CEOs ARE NUTS,’ by James Kwak at baselinescenario .com.

In Uncategorized on May 27, 2010 at 02:34

Wall Street CEOs Are Nuts

Posted: 26 May 2010 07:15 AM PDT

By James Kwak

“Geithner’s team spent much of its time during the debate over the Senate bill helping Senate Banking Committee chair Chris Dodd kill off or modify amendments being offered by more-progressive Democrats. A good example was Bernie Sanders’s measure to audit the Fed, which the administration played a key role in getting the senator from Vermont to tone down. Another was the Brown-Kaufman Amendment, which became a cause célèbre among lefty reformers such as former IMF economist Simon Johnson. ‘If enacted, Brown-Kaufman would have broken up the six biggest banks in America,’ says the senior Treasury official. ‘If we’d been for it, it probably would have happened. But we weren’t, so it didn’t.’”

Oh, well.

That’s one passage from John Heileman’s juicy article in New York Magazine. It provides a lot of background support for what many of us have been thinking for a while: the administration is happy with the financial reform bill roughly as it turned out, and it got there by taking up an anti-Wall Street tone (e.g., the Volcker Rule), riding a wave of populist anger to the point where the bill was sure of passing, and then quietly pruning back its most far-reaching components. If anything, that’s a testament to the political skill of the White House and, yes, Tim Geithner as well.

There are two other things in the article I thought worth commenting on. Here’s one:

“Obama could be forgiven for expecting greater reciprocity from the bankers—something more than the equivalent of a Hallmark card and a box of penny candy. He had, after all, done more than saved their lives directly by continuing the bailout policies formulated by Paulson and Geithner. He and his team could credibly claim to have kept the world economy from falling off a cliff. Yet with the unemployment rate still near double digits, Obama had (and still has) received scant credit from the public for what was arguably his signal accomplishment. At the same time, the one thing that almost every slice of the electorate would have applauded wildly—the sight of the president landing a few haymakers on Wall Street’s collective jaw—was an opportunity that the president had largely forsworn.”

This is a theme you hear a lot these days — the idea that Obama (or Geithner) could have taken the easy political road and bashed Wall Street, but that would have been bad for the economy, so instead he acted like a man and saved the economy, even if it was bad for his poll numbers. But this little bit of mythologizing rests on a flawed premise. Yes, stabilizing the economy was a top priority in early 2009, and for the most part it worked. (Have you seen the CBO’s estimate of the impact of the stimulus on GDP growth rates? Hint: it’s big.) But that did not and does not preclude “landing a few haymakers on Wall Street’s collective jaw.” Just because you follow one set of policies in early 2009 to stabilize the economy, that doesn’t mean that in late 2009 and early 2010 you can’t then properly fix the financial system that caused the damage in the first place.

The other, and perhaps most important thing Heileman’s article shows is that Wall Street executives are a bunch of raving lunatics. Here’s one paragraph:

“Today, it’s hard to find anyone on Wall Street who doesn’t speak of Obama as if he were an unholy hybrid of Bernie Sanders and Eldridge Cleaver. One night not long ago, over dinner with ten executives in the finance industry, I heard the president described as ‘hostile to business,’ ‘anti-wealth,’ and ‘anti-capitalism’; as a ‘redistributionist,’ a ‘vilifier,’ and a ‘thug.’ A few days later, I recounted this experience to the same Wall Street CEO who’d called the Volcker Rule a testicular blow, and mentioned I’d been told that one of the most prominent megabank chiefs, who once boasted to friends of voting for Obama, now refers to him privately as a ‘Chicago mob guy.’ Do all your brethren feel this way? I asked. ‘Oh, not everybody—just most of them,’ he replied. ‘Jamie [Dimon]? Lloyd [Blankfein]? They might not say Obama’s a socialist, but they come pretty close.’”

This is wingnut, Tea Party, willful blindness to reality kind of stuff. Forget the whole issue of whether they should be grateful to Obama for first saving their banks from collapse and then toning down the reform bill so it (a) doesn’t break up their banks, (b) doesn’t meaningfully prevent them from engaging in proprietary trading, (c) says nothing of substance about compensation, (d) doesn’t set any hard capital requirements, (e) . . . The fact that they can see the policies this administration is pursuing and somehow think they are “anti-wealth” or “anti-capitalist” is as close to proof as you will find that they are deeply stupid, blinded by their self-interest, or both.

The White House/Treasury narrative is that they were the adults — they made the tough calls that needed to be made instead of taking the easy road politically. The Wall Street narrative is the exact opposite: the administration is a bunch of political hacks, not the adults you need to have in charge. Here’s what one lobbyist said about the AIG bonus controversy:

“First, the White House decides in this blatant way to politicize the issue. Second, they overshoot the target and the thing gets away from them. It made people realize there’s no adult in charge. If Bob Rubin or Hank Paulson were Treasury secretary, they would have walked into the Oval Office and said, ‘Mr. President, I know you’d like to do this, I know your political advisers want you do this, but I’m sorry, you can’t do this.’”

Bob Rubin and Hank Paulson, of course, were both former chairmen of Goldman Sachs.

Wall Street CEOs like to think they are the adults, the big men in the room, the ones who know how the world works. Well, you know what? They screwed up their own banks, the financial system, and the economy like a bunch of two-year-olds. Every single major bank would have failed in late 2008 without massive government intervention — because of wounds that were entirely self-inflicted. (Citigroup: holding onto hundreds of billions of dollars of its own toxic waste. Bank of America: paying $50 billion for an investment bank that would have failed within three days. Morgan Stanley and Goldman Sachs: levering up without a stable source of funding. Etc.) The financial crisis should have put to rest for a generation the idea that the big boys on Wall Street know what they’re doing and the politicians in Washington are a bunch of amateurs. Yet somehow the bankers came out of it with the same unshakable belief in their own perfection that they had in 2005. The only plausible explanation is some kind of powerful personality disorder.

The bankers also have this bizarre belief that the administration has somehow betrayed them — that this year’s supposed shift to the left constituted reneging on some kind of deal. But there have to be two parties to a deal — and what did the banks do for Obama? They didn’t put in place any kind of self-regulation — not when it comes to compensation, capital, risk management, securitization, derivatives, or anything. They didn’t cut back bonuses to merely outrageous levels, although Goldman did decide not to pay itself record bonuses when it could have. They fought the stress tests all the way to the end, too blind to realize that the stress tests, and the government guarantee they implied, were the key to their salvation.

The administration owed them nothing. The bankers are playground bullies who are used to getting their way and think that if they’re not getting their way, someone must be cheating them. But the government is the biggest bully on the playground. Congress and the president get to make up the laws; that’s what it says in the Constitution. The government doesn’t need to do a deal with Wall Street to regulate it. It always has the power to pass whatever law it wants regarding the financial sector; it doesn’t need permission (even if it acted that way for the past two decades). The bankers should be relieved that the administration happens to support policies that are relatively friendly to their interests. Instead, they are complaining as if the administration broke some kind of rule.

(Now, you could say Obama has a debt to Wall Street because of all the money it gave him in 2007-08. But I dare any Wall Street CEO to come out and say that. And besides, the politically rational thing to do is to look forward. And, as Politico reported, Wall Street has been shifting its money to Republicans recently.)

And so, in one corner, we have a bunch of Wall Street CEOs sulking, deluding themselves into thinking that Barack Obama is a socialist, and probably planning to give money to Sarah Palin (which would be a colossal blow to their own self-interest). In the other corner, we have Obama and Geithner wondering why those Wall Street CEOs aren’t showing more gratitude.

“‘[Obama] thinks the Wall Street guys are just disconnected from reality,’ says a White House official. ‘He still takes the meetings with them, but his attitude now is like, “Whatever.”‘

“Tim Geithner, too, finds himself in the odd position of battling with an industry toward which he’s never felt an ounce of antipathy; in private, he now half-mockingly refers to the megabank CEOs as ‘the warlords.’ A Washington Mandarin to his core, Geither has been ineffective at winning over either Wall Street or Main Street. His experience during his tenure has provided him a wrenching political education, but one not unlike Obama’s—which, in a way, has only strengthened the bond between them.”

Yes, they deserve more gratitude. They saved the bankers twice — once by protecting them from their own mistakes, and again by protecting them from Sherrod Brown, Ted Kaufman, and all the other “populists” who wanted fundamental changes in our financial system. As should be clear, for all my differences with Tim Geithner, I would rather have him calling the shots than Jamie Dimon or Lloyd Blankfein.

But Obama and Geithner should know better than to expect gratitude from a bunch of narcissistic, delusional crybabies. And in that sense, both parties to this toxic relationship — the Wall Street bankers and the Obama administration officials — deserve each other.