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New Propaganda Coinage: “To Klein”

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The urban legend that Eskimos the Inuit have more words for snow than the rest of us nevertheless has intuitive appeal. A population might indeed develop a richer vocabulary to describe phenomena its members consider to be important. Consider how oenophiles make a show of describing the flavor of wines in ways that elude mere mortals. And it turns out the Sami, the natives inhabiting the arctic zones of the Scandinavian countries, do have hundreds of words for snow.

In keeping with underlying logic of the Eskimo snow words theory, as propaganda has become a more prevalent part of our culture, the terminology to describe it has also grown. “Agitprop” has been around for a while and has creaky lefie overtones. The World War II “Tokyo Rose” became “Baghdad Betty”. The sanitized terms “hype” and “spin” or somewhat more pejorative “spin-doctoring”, which describe the general phenomenon, have now been joined by descriptions of more specific activities, like “swift-boating” and “astroturfing”. I’m a bit saddened to see that Jane Hamsher’s “veal pen” hasn’t take off in the same way some other expressions have, but it might be because “veal penning” does not roll trippingly off the tongue.

Today, Lambert Strether provided us with a new coinage which seems to have real potential. From his post “Ezra Klein: ‘Move along people, move along. There’s no fraud here!’“:

Young Ezra in Pravda:

A lot of banks and investors held assets based on mortgages they thought were safe. They weren’t. That meant that no one knew how much money they really had, or how much money anyone else really had. So the market did what woodland creatures do when they get confused and scared: It froze. And so, too, did the economy. As the unemployment rate shows, we’re still not completely thawed out.

Really? Some investors — especially the little guys — may have believed the ratings agencies and “thought” mortgage-backed securities were “safe.” Sophisticated investors probably did not. And the bankster criminals who looted billions using accounting control fraud certainly did not.

That single paragraph should disqualify Klein from ever writing on financial topics again. In fact, it should cause Klein such blushing shame and toe-curling embarassment that he resigns his position, shaves his head, and becomes a Buddhist monk in hopes of avoiding the fate that karma surely has in store for him. In fact, that single paragraph should give rise to a new verb, “to klein,” signifying not merely bullshit, but bullshit where the bullshitter is so primally and narcissistically unaware that their bullshit is bullshit, so pure in the untrodden innocence of their own snow job …. That they’re still collecting a paycheck from chinless wonder Fred Hiatt. That one paragraph should disqualify Klein from ever writing again for any news gathering organization. Then again, Klein types for Pravda. So there’s that.

We’ll see soon enough if this one gets traction.

Update 3:00 AM: I have gotten a query via e-mail disputing the idea that there was anything wrong with what Klein wrote. To be clear, even though his paragraph seems anodyne, that’s precisely why it’s troubling. Klein’s defender argued that all he was doing was invoking a conventional narrative, that of a run on the shadow banking system, where repo acted as deposits, senior tranches of debt were used as collateral and viewed as safe, uncertainty increased about the value of those tranches, haircuts increased as they were viewed as risky, and then panic and market seizure resulted.

The problem is that this broad brush, both the Klein discussion and the e-mail version, serves to exonerate the dealer banks who were originating and packaging dodgy private label mortgages into RMBS and CDOs. It’s ultimately the “whocoulddanode” defense that is too often used to shield people who should have and often did know better from being held accountable.

Repo haricuts widened well before the collapse. Repo tenors also started shortening considerably before Sept 2008. Over 70% went to overnight by early 2008, IIRC. But the haircut widening/tenor shortening was still considerably in arrears of insider and more public knowledge that private label mortgage paper was toxic. Look at Goldman’s behavior per the Levin report. They marked their exposures down but were peddling the paper to client at the stale, meaning inflated, marks!

The paper was known to be risky by late 2006 and increasingly in 2007. Investment banks were rushing like crazy to package up everything RMBS like they had in inventory or in warehouses they had funded into CDOs and shove them out the door. The fact that money market funds (who were the big repo lenders) were not as fast to respond to the increasing evidence of the true state of the risks fits Lambert”s narrative. The repo lenders were the chumps.

The rating agency downgrades of AAA recent vintage private label RMBS were early 2007. They were large and widespread downgrades. It was obvious the CDOs were toast too but the rating agencies waited six months (August 2007) to downgrade them and went through them like howitzers.

The problem is Klein effectively exonerates the Street, as if no one knew the paper was bad. That’s just wrong as of spring 2007. But the money market funds were slow to wake up. Notice how long it took them to haircut AAA paper in a serious way:

Screen shot 2011-04-20 at 2.54.04 AM

That chart is across a broad swathe of structured credit paper. Haircuts on AAA rated ABS (asset backed security, meaning almost entirely subprime) CDOs went to 95 as of August 2008. That meant it was effectively worthless.

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56 comments

    1. Hogeye Grex

      Klein should stick to writing about Disney movies.

      In crayon.

      At least then the breathless references to cartoonish, imaginary “woodland creatures” wouldn’t seem out of place.

      Hey, one must play to one’s strengths.

    2. Yves Smith Post author

      Phil,

      Despite the comment by Hogeye, that’s not a bad take. I have zero tolerance for defense, even if unwitting, of the actions of the major capital markets firms. You need to differentiate between predators and prey, even if the predators nearly died as a result of their bad diet.

    3. attempter

      Why? All he ever did there was the same thing: Defend organized crime and propagandize for its further entrenchment.

      As for Hogeye’s comment, if a corporatist criminal like Klein were to write about Disney, I’m sure it would only be to advocate making copyright permanent.

    4. John Emerson

      “A clean and clever lad who is doing his best to get on.”

      The ones from the early blogosphere who made it in the big time include Ana Marie Cox, Megan McArdle, Jonah Goldberg, and Ezra Klein. Two wingers and four opportunists.

      Klein’s small-town boy-next-door vibe is a lot like young Kristof’s. Well-intentioned, but not a troublemaker.

  1. Matthew Evans

    @”The urban legend that Eskimos the Inuit have more words for snow than the rest of us nevertheless has intuitive appeal.”
    Don’t you mean that it has Inuitive appeal?

      1. High Sierra Resident

        In the high sierras we have at least seven words for snow, including ‘pow!’, ‘pneumonia-maker’ and sierra cement. It’s not uncommon to give multiple names to common phenomena that have multiple varieties. [Think of the words for kiss, oh lala.]

        What I found was that these are not trivial distinctions, and one would be wise to respect the local knowledge in this regard. When more than one neighbor tells you to get in from the pneumonia-maker snow. And you are all – ‘I’m fine, this is a great time for me to shovel.’ Bad choice.

        Bottom line: I did get pneumonia, just like my neighbors warned. No wonder I was the only one shoveling that day. Lesson learned, the haarrdd way. [Why oh, why do I have to be so stubborn?!]

  2. Three Wickets

    I’ve always quite liked “veal pen.” Maybe it hasn’t caught on since there are so few left in the pen, lol. Ezra and a handful of others is about it. Don’t think they even hold meetings anymore. But campaign season is upon us, so recruiting should be ramping up.

    1. ScottS

      Hmm… if we are name-calling, I’d say the “BS, wrapped inside of BS, wrapped inside a turd sandwich” sounds more like Tom Friedman. That man does more violence to reason than anyone else. Friedman is BS^3. Klein sees to be more of an ilk with Bai and Krugman, who seem to say:

      “I know this sucks, but take it, it’s for your own good. Besides, could be worse. Republicans could be in charge.”

      To which I yawn. Neither party is better. Ignore them, and maybe they will go away. National parties are silly things that only attract authoritarian manipulators.

      We will never elect the “right” party into power, as proven by Obama. We were completely had by Obama, myself especially. I thought since he was elected on a huge popular mandate with lots of grass-roots support, he would owe us at least half of the reforms he promised. I thought he couldn’t possibly be worse than W. I was sadly mistaken.

  3. psychohistorian

    This is all about the media controlling the goal posts in the discussion around Wall Street’s craven behavior.

    After all, if those folks are doing Gawd’s work then they must be above reproach and to call for them to be in jail is just the talk of “the little people” as they say.

  4. Middle Seaman

    Klein isn’t the only blogger whose writing peddles semi or completely false premises. I’ll avoid bad mouthing several other familiar and well read bloggers, but Klein represents a lefty middle of the road view that is very good at the very obvious, but fails badly on serious insight.

    Health care is a case in point. Klein and Co. have seen Obama’s marginal reform as a substantial step forward at a time when the health insurance companies and the pharmaceuticals were left in control as before the “reform.”

    I doubt that “to klein” will take hold since mainstreaming is a very common infraction.

    1. lambert strether

      The difference here, to me, is that astroturfers and spin doctors are aware that the bullshit they peddle is bullshit. I don’t think Klein is aware; amazing though it may seem to anybody who pays attention, Klein may actually believe what he wrote, to the extent that anybody at Pravda actually believes anything. In a way, Klein’s “innocence” is more horrific than, say, Axelrod’s or Rove’s knowingness; a bullshit artist takes personal responsibility for what they do, no matter how twisted; but Klein’s bullshit is pervasive and systemically produced, in the air that one breathes and the water one drinks, like BPAs…

  5. buckydent

    I’ve always thought of the Washington Post as Isvestia, with the New York Times being Pravda.

    1. lambert strether

      See this not history of the Pravda vs. Izvestia meme/convention. One good reason is the requirement to keep one’s snark consistent when pounding it out, day after day. That “P”ost and “P”ravda both begin with “P” is helpful in keeping them straight. In addition, “Pravda on the Potomac” and “Izvestia on the Hudson” are each more euphonious than their converses. This may flatten some historical nuances a bit, but on the other hand, if we’re at the point where we’re asking the question “Which organ of the Soviet state media represents the Washington Post more correctly?” then I can say with some confidence that my work is nearly done…

  6. Pearl

    Awwwww… but I like Ezra. Can’t we give him another chance? Maybe we could let him start hanging around us–and our financially / economically cynical (yet savvy) views would start rubbing off on him.

    He’s a “newbie” to our world, and I think, with some guidance and direction–maybe even some late-night tutoring–we could find that we have a surprisingly capable advocate in Ezra Klein. The kid’s got potential, I tell ‘ya!

    The verb, “to Klein” could come to mean, “to progress along a steep learning curve aided by cynical yet tenacious mentors.”

    1. JTFaraday

      No, because Ezra–and Matty who was profiled last week–are particularly pernicious in that they have a large youth following they developed at the American Prospect during the Bush Admin where they called themselves “progressives.”

      Matty and Ezra can go on to have mainstream propaganda careers if they want, but they should be severed from the naive and their influence neutered.

  7. Richard

    Yves,

    Nice post. Could we use the work on informationally-insensitive debt by Gordon and Mettrick as the first example of “to klein”? The work meets your exacting standards “signifying not merely bullshit, but bullshit where the bullshitter is so primally and narcistically unaware that their bullshit is bullshit, so pure in the untrodden innocence of their own snow job”.

    Richard

  8. Michael

    Sometimes, particularly when ascribing malevolent motives to people for simply not writing exactly what you would have preferred them to write, this forum comes across as incredibly obnoxious.

    1. Nigel

      For him to say what he did in a non-malevolent way, he would have had to say “Nah Nah Nah, I’m not listening” while plugging his ears, at every real news article that came across his path. Not bloody likely.

  9. Elliot X

    Mark Ames had this to say in response to a recent Ezra Klein article written in defense of the Koch brothers:

    “Which finally brings me to Ezra Klein’s piece last week in the Washington Post, in which he bends over backwards to minimize the uniquely malevolent influence the Kochs have exerted on the American public. Keep in mind here that Ezra Klein, though he passes for what the Washington Post considers “liberal,” is an old friend of Megan McArdle’s, and David Weigel’s. And Ezra is a colleague of Weigel’s (Slate is owned by the Washington Post).

    Ezra’s shine-job, headlined “How powerful are the Koch brothers?” does its Beigeist best to muddle the reader’s head into believing that, yeah, the Kochs are kinda bad ‘n stuff, but hey, it’s just how things are…nothing to worry about folks, keep moving along:

    http://smirkingchimp.com/thread/mark-ames/35161/the-koch-whore-archipelago-how-the-billionaire-kochs-screwed-my-scoop-while-screwing-america

    1. Elliot X

      I missed the best part of the Mark Ames response to Ezra Klein’s defense of the Koch brothers:

      “Anyway, Ezra, here’s a little advice: go back to school. Then go out and get a job. A real job: “Obama Administration waterboy” doesn’t count as a job. Meantime, here’s a quick study guide that might help you understand why the Kochs really are very, very different:

      * From the time they founded the Tea Party in 2009 to today, their wealth shot up from 28 billion to 44 billion, nearly 60 percent;
      * They led the campaign against health care;
      * The Kochs spend more fighting climate change than anyone or any company in the world;
      * The Kochs bankrolled Scott Walker;
      * The Kochs wrote Bush’s environmental policies;
      * Cato wrote the Republican Congress’s 1995 legislative agenda, acting as the think-tank for Tom DeLay and Dick Armey.
      * The Kochs control up to 35,000 miles of pipelines in the US and Canada, enough to circle the globe 1-1/2 times.

      Should I go on?….” (from the link above)

      1. psychohistorian

        How about if we nationalize the US portion of that pipeline and use the revenues for public purposes?

        We could tell Canada they could do the same.

  10. readerOfTeaLeaves

    Apparently, Ezra is oblivious of the FCIC hearings and documents, as well as Levin’s Senate committee investigations of WaMu (in which 60%+ of mortgages were liars loans, for which Wall Street had developed a mighty appetite). He must also be clueless about Magnetar, and never read “The Big Short”. In other words, he appears to be unqualified to write about this general topic.

    Pity.

  11. Max424

    I don’t know why, but Ezra reminds me of Miss Manners.

    Not that there is anything wrong with Miss M. If you catch me in an IHOP at 3 am, there is 50/50 chance you’ll find me nibbling on a cheese omelet and reading Miss Manners (I usually turn to her after the sports page).

  12. jerrydenim

    It’s nice to hear from angry Yves again.

    Young pro-establishment, so-called progressives apologizing for the Obama administration and distorting the historical facts of the last few years with dumbed-down and highly misleading, over-simplified white wash versions of recent criminal events really gets my goat as well. Thanks for properly shredding Mr. Klein’s gross misrepresentation of the financial crisis, but unfortunately Mr. Klein’s kind of bullshit is everywhere, and it is only getting deeper and more entrenched with the traditional media. I’ve already seen a few young beltway-type Facebook contacts flying Obama 2012 propaganda already. Get ready for loads more of the same shit. Obama and co saved the economy you know?

    I wonder if Mr. Klein can explain why Credit Default Swaps on mortgage backed paper were in such demand circa 07′ if everyone thought MBS was so golden?

    1. readerOfTeaLeaves

      I wonder if Mr. Klein can explain why Credit Default Swaps on mortgage backed paper were in such demand circa 07′ if everyone thought MBS was so golden?

      High five for that one.

  13. Parvaneh Ferhadi

    Agitprop may have ‘a creaky lefty meaning’ for some, but that may be simply because the don’t fully understand what agitprop meant at the time.
    From Wikipedia:
    «The term propaganda in the Russian language did not bear any negative connotation at the time. It simply meant “dissemination of ideas”. In the case of agitprop, the ideas to be disseminated were those of communism, including explanations of the policy of the Communist Party and the Soviet state. In other contexts, propaganda could mean dissemination of any kind of beneficial knowledge, e.g., of new methods in agriculture. Agitation meant urging people to do what Soviet leaders expected them to do; again, at various levels. In other words, propaganda was supposed to act on the mind, while agitation acted on emotions, although both usually went together, thus giving rise to the cliché “propaganda and agitation”.»

    Thus the term propaganda didn’t mean or imply lying (even by omission) about things, it just meant communicating your point of view.

    The modern definition of propaganda is different, again from Wikipedia:
    «Propaganda is a form of communication that is aimed at influencing the attitude of a community toward some cause or position so as to benefit oneself.
    As opposed to impartially providing information, propaganda, in its most basic sense, presents information primarily to influence an audience. Propaganda often presents facts selectively (thus possibly lying by omission) to encourage a particular synthesis, or uses loaded messages to produce an emotional rather than rational response to the information presented. The desired result is a change of the attitude toward the subject in the target audience to further a political agenda.»

    This definition does fit what most main-stream media and other corporations (and those who support them) are doing. Obviously ads do fit that description, but the news also fit that description as well.
    However, that is not agitprop in its original meaning. It’s simply propaganda.

  14. craazyman

    Did Ezra Klein’s publicist plant this post? :)

    Glad I live in mAGOnia because I have no idea who Ezra Klein is and I still don’t care. LOL. Even now.

    That’s the funny thing when everyone’s on the take, it’s hard to sort out psychotic criminals from mere opportunists.

  15. Michael H

    And here’s the bankster loving, Koch shill Ezra Klein doing his best to defend TARP in a Washington Post article dated August 1, 2010.

    The first couple of sentences could be used by Merriam Webster’s to illustrate the new verb “to klein”:

    “TARP is horribly unpopular. The stimulus is pretty unpopular. But does that mean they were bad policies? Not according to a new paper by Mark Zandi, Moody’s chief economist… and Alan Blinder, a Princeton economist.. etc..

    1. Cynthia

      Political as well as economic followers of Ayn Rand are narrow-minded ideologues, unless they are motivated by money, which would make them greedy opportunists. And since a government bureaucrat like Alan Greenspan got rich by working on behalf of wealthy corporations on Wall Street, namely the Big Banks, and since another government bureaucrat like Paul Ryan got rich by working on behalf of wealthy individuals on Main Street, namely the Koch Brothers, this makes both of them nothing more than greedy opportunists selling, aka keining, themselves as Randian ideologues.

      http://www.youtube.com/watch?v=11H4M-PqAWM

  16. Kyria

    I don’t read his column anymore, so I confess he isn’t the first “Klein” I think of when it comes to economic policy.

  17. Philip Pilkington

    And of course don’t forget the biggest ‘name-shift’ for the term ‘propaganda’. After the term begin to catch dirty connotations, master propagandist invented the term ‘public relations’ which has stuck to this day.

    I reckon that this example shows why ‘propaganda’ has so many synonyms in our language — it’s the same reason that ‘shit’ and ‘sex’ have so many synonyms: they’re bad words.

    Anyway, this shouldn’t disincline us from using this new verb — in fact, I propose that we speed up the etymological process and expand it’s usage.

    – “Klein!” exclaimed Jimmy as he stepped in a pile of klein that had been left by a feckless and uncaring dog-owner. –

  18. Hugh

    We really need to get over this idea that all these defenders and apologists of kleptocracy are well-meaning but wrong. This would only be true if we lived in a world where the information that contradicted their views was somehow inaccessible to them. But that simply isn’t tenable. We are 3 1/2 years out from when the housing bubble blew up. We are 2 1/2 years out from the great meltdown. It’s not exactly a secret who got this stuff right and who got it wrong. People like Klein get paid better than most of us here and has access to resources that most of us only dream of. So it is not like he can’t know what happened. He chooses not to. That’s the definition of an Upton Sinclair man: one who doesn’t understand something because his career and paycheck depend on his not understanding it.

    Whether Klein is aware of the lies he writes or not is beside the point. It is that he easily could be aware of them. His is the Sergeant Schultz “I know notzing!” defense. It is about as believable for him as it was for Schultz.

    Klein like so many others among our elites is a soldier of kleptocracy, part of the class war. His job is to repeat lies until by sheer repetition they acquire a solidity and legitimacy that can challenge and even replace the truth. And he does this day in, day out. This is no extraordinary case or one off. It is what he does. Who cares if he believes, or thinks he believes, this stuff or not?

    1. psychohistorian

      Hugh said: “Who cares if he believes, or thinks he believes, this stuff or not?”

      We used to rely on our “free press” for reliable information about the complex world we live in. The rich took advantage of that reliance to turn it against the people and enhance their positions….propaganda.

      If we eliminate the corporate press (propaganda machine extraordinaire) and re-establish “free press” (people like Yves and others) we may again be able to rely on information with less filtering than is necessary today.

  19. enjointhis

    Not to be a wet blanket, but the Inuit don’t have a myriad of words for “snow” – instead, their language combines adjectives and nouns. This would be like counting (as separate nouns) “blowing snow” “heavy snow” “wet snow” “blizzard” and “gobs of snow” or the like. So saying the Inuit have many words for snow is … well, not saying very much. So does English, and so does any language with noun/adjective combinations.

  20. Gene O'Grady

    I’ve always had it in for Klein, but until fairly recently had some respect for Yglesias, which I have now shed, partly out of boredom and partly out of increasing distaste for his persona, which for all I know may be the real guy. And the suggestion that the two of them need to get out and get a job can’t be bettered, although just traveling to parts of the country that aren’t populated by yuppies with contacts would be an improvement.

    But I’m not sure I buy the suggestion that this is class or kleptocracy based. Overwhelmingly with Klein, and often with Yglesias, I think the basic motivation is generational hostility, particularly toward the so-called baby boomers. Given that they tend to think Kennedy was elected by baby boomers (few 14 year olds voted in 1960) it’s a particularly ignorant resentment.

  21. f nord

    Hmm. I suppose you’ve heard of a Klein bottle — one continuous surface, with the inside being the outside, being the inside …

  22. f nord

    Hmm. You’ve heard, perhaps, of a Klein bottle? A 3D “container” with one continuous surface, like the side of a mobius loop. The inside is the outside is the inside is …

    So maybe it’s in his genes. Maybe he’s unable to distinguish which side the truth is on …

    But wait: there’s Naomi. Well … maybe it’s a recessive gene …

    1. Parvaneh Ferhadi

      The Klein bottle may well be an appropriate metaphor for people like this.
      However, strictly speaking, the Klein bottle doesn’t have inside and outside (or right or left). It’s a non-orientable surface with only one ‘side’. Thus wherever they go on the surface, no matter how many twists and turns they make they always stay on one the same side of the surface (or the issue).
      I guess they consider it their side and for them nothing exists on the outside of their two-dimensional little world. Thus if you are not on their side of the surface (issue) you don’t exist, or you would need to be removed as you presence would prove that there is something outside their world.

      http://en.wikipedia.org/wiki/Klein_bottle

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