“Born Criminal” Found Not Guilty!
Activist and playwright Dakxin Bajrange was arrested on May 11th, 2003 for allegedly assaulting Prahlad Chhara. The real reason? Performing plays critical of the police. News of his arrest motivated Shashwati and I to go to India and make the documentary film, Acting Like a Thief. That trip changed our lives – and while Dakxin has gone on to become an award winning documentary filmmaker, even as he continues his work in the community, his case has not gone away. For years the case has dragged on through India’s notoriously slow legal system. Until now. I’m happy to say that today I received word that Dakxin’s case has finally been settled and he has been cleared of all charges. For a member of a community once declared “Born Criminals” this means a lot.
Our new film, with brings the viewer much deeper into the life and work of Budhan Theatre members and their families, including Dakxin, will be completed later this year. To stay up to date, please sign-up for our newsletter and stay tuned for major website updates later this summer.
Want to help Chhara kids? Help sponsor the Chharangar Library!
Crossroads
Photo by Ereine
Former Clinton White House adviser and prominent blogger, Brad DeLong says: “We have to ask ourselves: Do we want to revive our economy, or do we want to punish the bankers?” But critics of the Geithner plan are not saying he’s being too soft on the bankers because they want to see blood. They are saying it because the bankers are the problem and as long as they are calling the shots we won’t be able to revive the economy. Take a look at the following charts:
The charts come from an excellent article by Simon Johnson, a former chief economist of the International Monetary Fund, who blogs at Baseline Scenario. If you are still trying to make sense of the financial crisis I recommend starting with his Financial Crisis for Beginners page (the radio programs he links to now have their own page as well). When Johnson worked for the IMF it was his job to tell countries what they had to do to get out of a financial crisis:
Read the rest of this entry »
Happy 牛 Year!
Understanding Gaza
In this clip ’self-hating Jew’ Jon Stewart points out the obviously one-sided and mobius-strip like quality of mainstream American news coverage of the war in Gaza. Together with help from Kiven Strohm and other friends on Twitter and Facebook, I’ve compiled a list of resources about Gaza, with the aim of providing an alternative view. You don’t have to agree, but please take the time to look through the resources on our site.
Taipei Biennial ‘08
Shashwati and I finally got to the Taipei Biennial, on the last weekend before it closed. That means we missed most of the site-specific pieces around Taipei, but we did get to the main exhibit at the Taipei Fine Arts Museum, which was surprisingly busy – perhaps because admission was free.
The highlight of the show was a film about a portrait of Stalin by Picasso by Lene Berg. The film is based on a handmade book she made about the subject (also on display at the exhibit). The caption for the above photo says: “If they had been here I would have looked down on both of them – even without heels.” The film can be watched online on Vimeo.
My second favorite piece was “Undercooled,” a photography project by Onejoon Che, who took some amazing portraits of military installations hidden or buried in the modern cityscape.
There were lots of video installations, many of which were interesting as ideas but poorly executed. However a few stood out from the rest. Tsui Kuang-yu’s (崔廣宇) “Invisible City: Taipari York” (隱形城市：台八里‧約克) was a humorous look at cosmopolitanism in which tricks of scale played on our expectations. Lovers kissing in front of the Eiffel tower turn out to be an owner petting a dog, a couple sipping wine in front of the New York skyline turn out to be waiters cleaning up at a Taipei restaurant in front of a wall-sized photo, etc. Anetta Mona Chisa & Lucia Tkacova had fun with Dialectics of Subjection #4 (available on YouTube) in which two women engage in pillow-talk about the relative attractiveness of various world leaders. More seriously, Liu Wei spent the anniversary of the Tiananmen massacre asking people in Beijing “Do you know what day it is?” in his film A Day to Remember / 忘卻的一天 and in “Rocks Ahead” Yochai Avrahami created art out of the no man’s land between West Bank checkpoints in Israel. There was also a good Yes Men display, including my favorite, the SurvivaBalls.
RIP Donnell Library
I wrote my first serious research paper in high school; about ethnographic film. In 1988 the only way to see many classic ethnographic films was on film. You know, the kind of thing which comes in big metal canisters and has to be fed through a movie projector. It would snap and break on occasion, in which case you had to splice it back together with tape. It was scratchy and noisy, and more to the point: incredibly expensive. I simply would not have been able to do such a project if it wasn’t for the Donnell Library across from the Museum of Modern Art in midtown Manhattan.
I remember the small viewing rooms, the helpful librarians, and the thrill of treating film like it was a book: rewinding, viewing scenes over and over, taking notes. Nothing you couldn’t do at that time with a VHS tape, but one rarely got a chance to handle a film reel in the same way. I was pleasantly surprised that the city of NY would allow me to do so. It allowed me to overcome the awe of being a spectator in order to critically examine these films in a way that, in those days, would not otherwise have been possible.
I read about the Donnell closing its doors nearly a year ago, but the above picture, taken by an archivist who worked there during the library’s last days, of those film canisters being packed up gave the story added poignancy.
(via BoingBoing)
End of Year Campaign
(Reposted from the Vimukta blog.)
Each year we raise $1000 to help fund the Chharanagar library. This library is much more than a library, its a community center and an informal school as well. But its first and foremost a library – and a very good one at that! It houses a large collection of (mostly donated) books in three languages: English, Hindi, and Gujarati.
We’ve already raised $700 towards this year’s goal. Please help us raise the last $300 before new year by using the widget below. Thank you!
Viva Obama!
One more time, with feeling:
Toxic Sludge
In my last post I attempted to make sense of the origins of the current economic crisis in the subprime mortgage debacle. In this post I look at the solutions being offered and ask: Why do we need a bailout?
As explained in the last post (make sure to view the cartoon slideshow on the subprime lending crisis) the current scandal is the product of banks packaging bad loans as AAA quality securities which could be resold in a deregulated financial marketplace. As a result, the entire financial system is now based on a lot of bad paper. The technical term for this is “toxic sludge.”
The problem is that nobody, not the banks, not the government, knows how much of this toxic sludge they own. And they don’t know how much the other banks own either. So nobody can trust anyone else. As a result banks are unwilling to lend money to each other. That’s why the government needs to step in and buy up this toxic sludge.
That’s why having the Treasury Department buy up all those toxic assets is probably a good idea. Recapitalization isn’t enough if it leaves banks still owning securities with values so variable that it’s too risky to lend to them anyway. We need to get that stuff off their balance sheets in order to make their financial position more transparent and we need to increase their capital base (which the Paulson plan accomplishes by paying above-market prices for the toxic sludge in return for a guarantee of equity down the road if the sludge eventually has to be sold at a loss). That combination has a better chance of working than either one alone.
And why is the toxic sludge so hard to value? Can’t we just make banks open their books and provide detailed information on all this stuff? Sure. But you’ve still got two problems. First, in the later days of the mortgage free-for-all, mortgages were packaged up with no documentation at all. So no one, not even the banks, knows for sure just how good or bad their mortgage portfolios are. Second, even if we knew that, their value would still depend on how much farther down home prices have to go. And that’s anyone’s guess.
Where will the money come from?
Paul Krugman put it best: “it doesn’t have to come from anywhere. Ultimately, the Paulson Plan will move money in a circle.”
James Gailbraith elaborates:
Despite the common use of language, the capital cost of this bill does not involve “taxpayer dollars.” It authorizes a financial transaction, exchanging good debt (U.S. Treasury bills and bonds) for bad debt (the “troubled assets”). Many of those troubled assets will continue to earn income for some time, perhaps a long time. The U.S. Treasury commits itself to paying the interest on the debts it issues. The net fiscal cost — which is also the net fiscal stimulus — of this bill is the difference between those two revenue streams.
In a more recent post Krugman explained further:
The effect would be that if the financial firms did well, taxpayers would share in their good fortune via those stock holdings; if firms did badly, they could meet their obligations by selling some of those bonds, which would cut into the value of all their stock, including the stuff Uncle Sam owns. So as in the case of Wachovia, what’s really happening is that the taxpayers are taking on some of the risk.
How much risk?
The answer is that we really don’t know. James Gailbraith suggests that it will cost about $50 billion a month, and so $700 billion just buys us about a year’s worth of time.
But it isn’t going to be enough, not even by a long shot. Structural changes are needed and everyone’s best hope is that we can simply keep the system going until we elect someone competent who can restore trust in the system.
That person is not John McCain whose main economic policy advisor is Phil Gramm, “the arch-deregulator, who took special care in his Senate days to prevent oversight of financial derivatives — the very instruments that sank Lehman and A.I.G., and brought the credit markets to the edge of collapse.” Just take a look at McCain’s economic policies and you’ll see how beholden he is to the whole conservative orthodoxy which got us into this mess.
The original bailout plan was based on the idea that the toxic sludge is undervalued and that, in the long run, it will be worth what it was originally worth. But almost every leading economist said this was simply not the case – that invariably some of it will be undervalued and we will loose money.
the plan does nothing to address the lack of capital unless the Treasury overpays for assets. And if that’s the real plan, Congress has every right to balk.
In other words, its not exactly a full circle as the above diagram suggests – but we simply don’t know what the difference between the two revenue streams will be. Its possible the government/taxpayers will even make some money in the deal – if its written correctly. That’s why there was a call to redo the plan with some protections for the tax payers. The Dodd-Frank bailout offers some of those protections. Here is James Gailbraith on the strengths and weaknesses of the plan.
There is no question that the current bailout bill represents an enormous improvement over the original Treasury proposal. Unlike the original proposal, this bill protects the public interest with requirements for disclosure and audit, for reporting to Congress both on procedures and results, and with protections against arbitrage, conflict of interest, and fraud, with provisions requiring the secretary of the treasury to try to minimize foreclosures, to acquire warrants, and with limitations on executive compensation, especially golden parachutes.
In several respects, the language could still be improved. …
So that’s where we are now. It isn’t the plan most people think would be ideal, but it is much better than nothing and it seems most (sane) people agree it is sorely needed. I strongly recommend you look at this chart to see how your representative voted. If they voted “No” on the Dodd-Frank plan, give them a call and ask them to change their minds. I did.
Subprime
This post is the first of my attempts to make sense for myself of the current financial crisis. In this post I ask the question: How did we get into this mess?
The simplest explanation is that encouraging people to take mortgages was the easiest way to create investment opportunities for surplus capital:
The result was that the wealthy—the investment class—had more money to invest, or lend, than there were people and businesses looking to borrow.
The easiest way to bring more borrowers into the system—and to create more of a market for money—was to promote homeownership in America. This is precisely what the Bush administration did, touting home ownership as an American right. Of course, they weren’t talking about home ownership at all, but rather pushing people to borrow money tied to the value of a house.If people could be persuaded to take mortgages on homes, real estate values would go up for those already invested (like land trusts and real estate funds) and banks would have a market for the excess money they had accumulated.
Even before Bush, regulation had been pushed through eliminating New Deal era restrictions on finance capital:
in 1999, Congress dismantled the Glass- Steagall Act, a pillar of the New Deal, which separated commercial and investment banking. That enormous change was undertaken with no thought or effort — or desire — to regulate the world that it would help to create. Now we know that an entire “shadow banking system” has grown up, without rules or transparency, but with the ability to topple the financial system itself.
But perhaps no deregulatory effort had more catastrophic effect than the 2000 law that explicitly excluded derivatives, including those credit default swaps, from regulation under the Commodity Exchange Act of 1936.
It was in this climate that some very “inventive” schemes were developed to repackage bad loans as AAA quality securities. The people doing this knew it was a bad thing to do, but a culture was created in which everyone was profiting and nobody seemed to be getting hurt, so it continued unabated. The best accounts of this I’ve come across are both in narrative form and both focus on the issue of “subprime” loans. Obviously the current crisis has evolved beyond the subprime loan issue into an international credit crunch, but subprime lending is still at the heart of the story. First there is this amazing episode of This American Life, “The Giant Pool of Money” (they deserve lots of awards for this), and second this roughly drawn but well written cartoon slideshow.
I’m still a little unsure as to exactly how this untenable system came unraveled at the very end – resulting in the international credit crisis we now have, but it seems the whole thing simply fell apart like the house of cards that it was, bringing down the rest of the financial system with it.
[For more information, see my next post on the bailout.]
UPDATE: Here is a map of the foreclosures the NY Times published back in April:
UPDATE: Also see this excellent piece by Robert Kuttner in The American Prospect. It adds some important details about the role of hedge funds as well as how deregulation has changed the role of the Federal Reserve.
Indeed, until Congress dismantled financial regulation, the Fed was not called upon to mount these heroic rescues, which have become so common in recent years. Until the 1960s, the central bank could keep interest rates low, confident that they would underwrite the growth of the real economy rather than risky financial speculation, for the simple reason that entire categories of speculation did not exist.
But during the past quarter-century, as deregulation has turned the economy into a casino, the Federal Reserve has had to mount major rescues at least six times.
An anthropologist and documentary filmmaker, 
