Mark Ames: Why Finance Is Too Important to Leave to Larry Summers

Yves here. Mark Ames wrote this post for our fundraiser five years ago. We’ve turned into a fundraiser staple, since as long as Larry Summers is with us, this is the sort of classic worth reading regularly. Think of it as our analogue to Christmas perennials like The Grinch That Stole Christmas or It’s a Wonderful Life. But not to worry, Ames being Ames and NC being NC, this is the antithesis of sappy. (Mark, you are on notice that if by some miraculous bit of good fortune, Summers retreats from the public sphere, we’ll need you to provide an updated slant on elite venality).

And in the spirit of Christmas come a couple months early, we hope you’ll leave something nice in our stocking, um, Tip Jar! We are raising our donor target to 1350 (Lambert has yet to update our thermometer) to help us reach our final financial target for original reporting.

By Mark Ames, author of Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine who writes regularly at Pando.

If you’ve been reading Naked Capitalism for any period of time without giving back in donations—and most of us have been hooked from the time we discovered Yves Smith’s powerful, sharp voice and brilliant mind—then you you’ve been getting away with murder. Naked Capitalism is that rare blog that makes you smarter. Smarter about a lot of things, but primarily about Yves’ area of expertise, finance.

By a quirk of historical bad luck, the American Left has gone two generations without understanding finance, or even caring to understand. It was the hippies who decided half a century ago that finance was beneath them, so they happily ceded the entire field—finance, business, economics, money—otherwise known as “political power”—to the other side. Walking away from the finance struggle was like that hitchhiker handing the gun back to the Manson Family. There’s a great line from Charles Portis’s anti-hippie novel, “Dog of the South” that captures the Boomers’ self-righteous disdain for “figures”:

He would always say—boast, the way those people do—that he had no head for figures and couldn’t do things with his hands, slyly suggesting the presence of finer qualities.

That part about the hands—that would refer to the hippies’ other great failure, turning their backs on Labor, because Labor didn’t groove with the Hippies’ Culture War. So the Left finds itself, fifty years later, dealing with the consequences of all those years of ruinous neglect of finance and labor—the consequences being powerlessness and political impotence.

That’s why Yves Smith is so important to anyone who cares about politics and the bad direction this country is taking. In 2008, the Left suddenly discovered that although it could bray with the best of ‘em about how bad foreign wars are, and how wrong racism and sexism an homophobia are, it was caught completely and shamefully by surprise by the financial collapse of 2008. The ignorance was paralyzing, politically and intellectually. Even the lexicon was alien. Unless of course you were one of the early followers of Yves Smith’s blog.

It wasn’t always this way.

Back in the 1930s, the Left was firmly grounded in economics, money and finance; back then, the Left and Labor were practically one. With a foundation in finance and economics, the Left understood labor and political power and ideology and organization much better than the Left today, which at best can parry back the idiotic malice-flak that the Right specializes in spraying us with. We’re only just learning how politically stunted and ignorant we are, how much time and knowledge we’ve lost, and how much catching up we have to do.

Which is why Yves Smith’s Naked Capitalism is one of the 99%’s most valuable asset in the long struggle ahead: She is both analyst and educator, with a rare literary talent (especially for finance). One thing that’s protected the financial oligarchy is the turgid horrible prose that they camouflage their toxic ideas and concepts in. Yves is one of the rare few who can make reading finance as emotionally charged as it needs to be.

Naked Capitalism is our online university in finance and politics and ideology. Whereas other online universities are set up to turn millions of gullible youths into debt-shackled Wall Street feeding cows, Naked Capitalism is the opposite: Completely free, consistently brilliant, vital, and necessary, making us smarter, teaching us how we might one day overthrow the financial oligarchy. One other difference between Naked Capitalism and online university swindles: (Stanley Kaplan cough-cough!) Your donations won’t end up paying Ezra Klein’s salary.

Which brings me back to my whole “Shame on you!” point I was trying to make earlier. When it comes to fundraising, nothing works like shaming. That’s how those late-night commercials work: You’re sitting there in your nice comfortable home, and then suddenly there’s this three-legged dog hobbling into its cage, with big wet eyes, and then some bearded pedophile comes on and says, “Poor Rusty has endured more abuse and pain than you can ever imagine, and tomorrow, he will be gassed to death in a slow, horrible poison death chamber. And you—look at you, sitting there with your Chunky Monkey and your central heating, what kind of sick bastard are you? Get your goddamn Visa Mastercard out and send money to Rusty, or else his death is on your head. I hope you sleep well at night.”

Now I know that this sort of appeal wouldn’t work on the Naked Capitalism crowd—too many economists here, and as everyone knows, you can’t appeal to economists’ hearts because, well, see under “Larry Summers World Bank Memo”… I can imagine Larry watching that late night commercial with the three-legged dog, powering a 2-liter bottle of Diet Coke and devouring a bag of Kettle Salt & Vinegar potato chips, calculating the productive worth of the three-legged dog, unmoved by the sentimental appeal. Larry grabs a dictaphone: “Item: How to end dog-gassings? Solution: Ship all three-legged stray dogs to sub-Saharan Africa. Africans won’t even notice. Dogs saved. Private capital freed up. Problem solved.”

So some of you have no hearts, and some of us have no shame. But we all do understand how vital Naked Capitalism has been in educating us. I’m sure that the other side knows how dangerous a site like this is, because as we become more educated and more political, we become more and more of a threat.

The oligarchy has spent decades on a project to “defund the Left,” and they’ve succeeded in ways we’re only just now grasping. “Defunding the Left” doesn’t mean denying funds to the rotten Democratic Party; it means defunding everything that threatens the 1%’s hold on wealth and power.

One of their greatest successes, whether by design or not, has been the gutting of journalism, shrinking it down to a manageable size where its integrity can be drowned in a bathtub. It’s nearly impossible to make a living as a journalist these days; and with the economics of the journalism business still in free-fall like the Soviet refrigerator industry in the 1990s, media outlets are even less inclined to challenge power, journalists are less inclined to rock the boat than ever, and everyone is more inclined to corruption (see: Washington Post, Atlantic Monthly). A ProPublica study in May put it in numbers: In 1980, the ratio of PR flaks to journalists was roughly 1:3. In 2008, there were 3 PR flaks for every 1 journalist. And that was before the 2008 shit hit the journalism fan.

This is what an oligarchy looks like. I saw the exact same dynamic in Russia under Yeltsin: When he took power in 1991, Russia had the most fearless and most ideologically diverse journalism culture of any I’ve ever seen, a lo-fi, hi-octane version of American journalism in the 1970s. But as soon as Yeltsin created a class of oligarchs to ensure his election victory in 1996, the oligarchs snapped up all the free media outlets, and forced out anyone who challenged power, one by one. By the time Putin came to power, all the great Russian journalists that I and Taibbi knew had abandoned the profession for PR or political whoring. It was the oligarchy that killed Russian journalism; Putin merely mopped up a few remaining pockets of resistance.

The only way to prevent that from happening to is to support the best of what we have left. Working for free sucks. It can’t hold, and it won’t.

There are multiple ways to give. The first is here on the blog, the Tip Jar, which takes you to PayPal. There you can use a debit card, a credit card or a PayPal account (the charge will be in the name of Aurora Advisors).

You can also send a check (or multiple post dated checks) in the name of Aurora Advisors Incorporated to

Aurora Advisors Incorporated
903 Park Avenue, 8th Floor
New York, NY 10075

Please also send an e-mail to yves@nakedcapitalism.com with the headline “Check is in the mail” (and just the $ en route in the message) to have your contribution included in the total number of donations.

So donate now to Naked Capitalism. If you can’t afford much, give what you can. If you can afford more, give more. If you can give a lot, give a lot. Whether you can contribute $5 or $5,000, it will pay for itself, I guarantee you. This isn’t just giving, it’s a statement that you are want a different debate, a different society, and a different culture.

Who knows, maybe we’ll win; maybe we’ll even figure out a way to seal Larry Summers in a kind of space barge, and fire him off into deep space, to orbit Uranus for eternity. Yves? Could it be financed?

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17 comments

  1. rusti

    And you—look at you, sitting there with your Chunky Monkey and your central heating, what kind of sick bastard are you? Get your goddamn Visa Mastercard out and send money to Rusty, or else his death is on your head. I hope you sleep well at night.

    I’d already shelled out for the NC fundraiser, but this one got me to pull out the MasterCard and finally get around to becoming a subscriber to Ames’ fantastic Radio War Nerd podcast, which I discovered thanks to the NC commentariat.

  2. JTMcPhee

    Interesting how people become the Other over time. Go back to the videos of crowds taunting and attacking black kids being escorted by federal marshals into “white” schools, and you see clean-shaven crew cuts and perms and wife-beater t-shirts and pegged pants and real boots. Go look at the videos of redneck activity now, NASCAR and “mudding” (pickups with huge tires and engines slogging through pits of slimy red Georgia mud” and gatherings of motorboats on Southern lakes, and it’s all beards and pony tails (on guys and gals? Says Jeff Foxworthy) and tie-died clothing (along with the Confederate battle flags and gunz and all.

    I got my BA in history from Lake Forest College, in a snotty sick-wealthy northern suburb of Chicago. https://en.wikipedia.org/wiki/Lake_Forest_College My years there, ’69-72, after my volunteer “service” in the US Army and a year doing “Racket” duty in Vietnam, were a “hippie” tour de force. All social concerns and “anti-war” (actually “escape the draft” by young people who were largely those who could not get into the really prestigious Ivy League facilities, despite great family wealth, or who had been booted from the same. Heavy drug use, supine administration (“laissez faire”), endless debates over Marxism Leninism Trotskyism etc. Ineffectual “peace marches,” to do stuff like “blocking” an unused entrance to Ft. Sheridan, just down the road — a few TV reporters to document the tomfoolery — “Stop The War Machine!” Motions toward communes, DOA when the practicalities of sharing, comity, ran up against the selfish consumerism of the privileged: “”I don’t get my own room and stereo? I get to copulate with others, but you, my steady, must remain my sole property!” It helped the transformation that the daughter of the Dean did a Janis Joplin at the very end of my matriculation there — all of a sudden the local police were invited in, to search student rooms and cars and engage in all the funsies of “drug enforcement” with stings, etc.

    Lake Forest very quickly morphed, once the draft ended, into a very much focused “business school,” to teach the young budding not-ready-for-MIT-or-Wharton capitalists the rudiments of their craft. Graduating about 450 looting-ready young folks a year. ?(Not all of them, of course…) Pretty amazing, not surprising.

    Neither the rednecks nor the “hippies” were much interested in what the parasites were doing to “FIRE” over those decades and generations. That’s the thing about parasites: most of what they do is invisible until the infection gets severe and vital organs are damaged, while the host goes about generating the nutrition that feeds the critters until whooops! Time to shed some segments into the water supply, lay some eggs, encyst, find another host…

  3. tfme

    I am a failed economics professor, I couldn’t do the tenure thing, but I have never lost my interest in economics. After reading Yves’ Econned I have found my “family.” The first thing I do upon waking is to point my browser to NC for my early morning stimulus. I am 77 years old today (I share Michael Hudson’s birth year), living in relative poverty, but I received a slight windfall, and after reading J-L’s “Obamamometer” article, what a great addition to NC she is, I mentally decided to donate to NC on my birthday as a present to myself.

  4. John Zelnicker

    I just wish the fundraiser was in the first part of the year so my contribution could be counted in the ongoing tally. As a tax accountant, half of my annual revenue comes during tax season, so I have to wait until then to make my contribution. Oh well, I know it is appreciated at any time, even if it takes Yves 8-9 months to get through her thank you notes ;-).

    NC is always my first read every morning and frequently the last at night. Thank you, Yves, Lambert, Jerri-Lynn and all the others that make this the BEST finance/economics site on the Interwebs.

    May you all, and NC, live long and prosper.

  5. knowbuddhau

    OMG those first paragraphs got me but good. Neither wide as a church door, nor deep as a well, but ’tis enough, ’twill do.

    “The System” was the problem, so phuq that, right? I’m a poet, dammit, not a g-d money man!

    “I sincerely thought I was so complete
    Look how wrong you can be” — Rod Stewart

    So now I sit in the back of the NC class, in what I must admit is the remedial row, hoping to pipe up once in a while without revealing the true depth of my ignorance, trying to understand a system that boggles my mind.

    What a sly mf that Ames is, using a parody of guilt-tripping to guilt trip. Already subscribed, but going to have to chip in again for this.

  6. Tom Bradford

    I haven’t donated yet despite being a regular and enthusiastic (tho’ frequently floundering) reader of NC.

    My problem is that being neither a USAian nor resident in the USA I have a non-$$ native currency, and any attempt to send $US anywhere is an invitation to banksters and middlemen at both ends to skim off a fat take in fees, charges and exchange-rate fiddles.

    Any ideas or suggestions of a way of transferring full, or at least a fair, donation from my ‘foreign currency’ account to NC would be appreciated.

    1. Yves Smith Post author

      If you do any foreign currency conversion, banks will take a cut. PayPal is pretty much at market prices in that regard. If your currency is British pounds, we’ve had several readers send money to our Richard Smith directly, since he is one of the people I pay out of the fundraiser. If that works, let me know via e-mail (use the same address as in the Tip Jar for the “check is in the mail” message).

      Another option if you are long American Airlines frequent flier miles is to “share” them (if you buy new ones, they charge a lot in fees and you might as well use PayPal).

      1. John Zelnicker

        @Yves – I don’t remember if it has been suggested yet, but I used Square for credit cards when I accepted them. I paid 2.75% on each transaction with no monthly minimum and no other charges. Deposits were within 24 hours, 6 days a week. That was a couple of years ago, so fees may have changed. I would think they would be worth looking at for those who can’t or won’t use PayPal.

      2. Tom Bradford

        Thanks Yves. We’re talking NZ$, which are no good to anyone outside the Lucky Isles.

        Guess I’ll have to find out how PayPal works, tho’ anyone calling himself my pal immediately makes me lock up my daughters and check my wallet.

  7. Richard

    Just take the cash and put it in an envelope and send it to Yves at the address she gives for check mailing. just write ‘Private and Personal’ on the front.

    Despite what you may be told about hordes of mail robbers opening every piece of mail and stealing all the (non-existent) cash all the time, you’ll be fine. I do it all the time from Malaysia where I live.

  8. Skippy

    I think the money aspect is important in giving NC the operational latitude that it need to function, but, more importantly, that people using this site take what they learn and disseminate to others as best they can. Bearing in mind that it is a long haul and not some quick fix, too much perception management and eviromental biases to over come in any short term potential.

    Disheveled Marsupial…. and as always when others ask where your source comes from, drop NC and Yves – Lambert and Co names..

  9. Sound of the Suburbs

    Everyone should probably read Naomi Klein’s “Shock Doctrine” and the sad story of South Africa where most black people are now in a worse situation than when apartheid ended.

    The ANC had naively thought power lay with democracy and Government.

    They had democracy, won elections and sat in Government but found they had no power.

    In negotiations with the old regime they had unwittingly signed away all their power.

    Private property was sacrosanct and they could not engage in land reform.

    An independent Central Bank would not print money for the people.

    As soon as they tried to do anything to help the people international markets crushed their currency. As Nelson Mandela was released from prison the South African Rand fell 10%, this was very bad news for the markets although a massive global movement was behind his release.

    International investors like cheap workers and not expensive ones. At the vaguest hint of wage rises or entitlement programs international capital will flea your nation.

    They had to borrow money from the IMF which meant more neoliberal reforms and selling off what remained of the public sector.

    The globalisation program has put in place all sorts of mechanisms to remove power from Government, e.g. the free movement of capital, freely floating currencies and independent central banks.

    If you need to borrow money from international institutions like the IMF and World Bank they will flay you alive with neoliberal reforms.

    Democracy, winning elections and taking over Government aren’t what they used to be.

    Though even in the 1960s the UK’s Harold Wilson had problems:

    From Harold Wilson’s memoirs:

    “The Governor of the Bank of England became a frequent visitor. . . we had to listen night after night to demands that there should be immediate cuts in Government expenditure.. . Not for the first time, I said we had now reached the situation where a newly elected government with a mandate from the people was being told, nor so much by the Governor of the Bank of England but by international speculators, that the policies on which we had fought the election could not be implemented.”

    What Harold Wilson experienced in the 1960s has been perfected into a global system through the free flow of capital, freely floating currencies and independent central banks.

    1. Sound of the Suburbs

      The UK is now experiencing the international speculators trying to prove they are more powerful than a referendum of 60 million people on Brexit.

      George Soros alone got us kicked out of the ERM.

      In international markets there is no one person one vote, one person can over-ride the will of nations.

      In currency markets George Soros has over 60 million votes.

      Universal suffrage posed problems for the wealthy and their desire to maintain the most unequal distribution of land and capital possible. One person, one vote meant the poor would get the majority of the votes.

      The uprisings of the masses in the 1960s and union power of the 1970s indicated things were proceeding in a most unwelcome direction.

      How about market led democracy?

      Everyone votes through the markets and it expresses the aggregate wants of all participants.

      2016– “Richest 62 people as wealthy as half of world’s population”

      This is a voting scheme with the desired bias.

      Also, the markets half the world’s population are voting in are just for food staples, even better.

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