Silly names

From the far side of the Great Financial Meltdown, 1994's Speed, ostensibly just another popcorn flick, starts to look instead like a brilliant allegory. Pop quiz, hot shot: Dennis Hopper: "The airport. Gunman with one hostage. He's using her for cover. He's almost to a plane. You're a hundred feet away." Keanu Reeves: "Shoot the hostage." Don't see it yet? Consider: Keanu is the government, Hopper is the neoliberal consensus, the crazy person waving the Glock around is the financial industry, the bullet is two trillion dollars in losses, and the poor schmo being jerked hither and yon is you and me. Readers concerned to further understand the dynamics of our own particular hostage crisis would do well to look at a couple of more recent documents: The Big Short and Diary of a Very Bad Year: Confessions of an Anonymous Hedge Fund Manager. Their charms are complementary. In the former, Michael Lewis, a Salomon Brothers alum, brings an insider's savvy to the subprime crisis. In the latter, N+1 (in the person of Keith Gessen) lends an outsider's ear to the brilliant disquisitions of a guy caught in the middle of it all. And read side-by-side these books do something even more valuable. They suggest that our captivity is at least partly in the mind - that even the most astute critics of what Lewis calls "The Doomsday Machine" have internalized some of the premises that made it possible. In the case of The Big Short, that suggestion feels accidental. Lewis (also the author of The Blind Side, among other bestsellers) knows that every good story needs someone to root for, and so, against the big New York investment banks, he fields a kind of Magnificent Seven of scrappy smaller investors. (Smaller is a relative term, of course; most of these guys have tens of millions of dollars of assets under management.) Most compelling is his central character, Mike Burry, a California-based hedge-fund principal with a glass eye and Asperger's syndrome. Burry, as Lewis tells it, was one of the only people in America with the acumen - and, thanks to the Asperger's, the patience - to evaluate the actual mortgage tranches underlying those now infamous "toxic assets." And, with our American admiration for an underdog, we cheer Burry on as he tries to find a way to monetize his discoveries before the subprime market collapses. Lewis explains with great lucidity how, via the esoteric financial instruments Burry engineers (or rather, has Goldman Sachs engineer) theoretically endless profits can be manufactured from a single piece of subprime paper, like Xeroxes from an original. What he never quite spells out, though, is that the huge profits Burry amasses shorting the subprime market also represent huge losses for his counterparties - and thus (by way of bailouts and layoffs) to taxpayers all over the world. Perhaps this is why the The Big Short, in the end, lacks a sense of moral payoff. It's as if the Wall Street Journal narrative of enterprise as an end in itself has gained traction not only with Burry, but with Lewis. At the very least, it says something that he takes as his hero of the financial crisis...a hedge-fund guy. Gessen is more explicit about the amorality of postmodern finance. In an introductory note about the anonymous hedge fund manager who is his subject (henceforth, and in the book, HFM), he laments "that a mind so excellent, so generous, so curious, should spend all its time on relative trading in foreign jurisdictions and yelling at people who refuse to pay him back. . . ." But in this note, as in the interviews that follow, we can feel him being seduced, as we are, by HFM's formidable intellect. Indeed, Gessen wants us to feel that seduction. HFM's mind is "excellent" - and makes for excellent reading. Listening to him discourse on capital flows, currency speculation, real estate, literature, and hedge-fund folkways is like taking a terrific college elective, minus the final exam: There's some people who think the problem is so bad that if you actually recognize the losses, that it's akin to smashing the equipment in the factory. Because these institutions can't exist anymore, right? That for a bank, if you say, "Look, you can't exist anymore. You're so deeply insolvent that everybody's fired and everybody's got to leave," at that point financial intermediation won't work anymore. It doesn't matter that you've marked everything down to the level that makes sense - you don't have a financial system anymore. And a lot of people think that's one of the reasons the Great Depression was so difficult to get out of, that the financial machinery was smashed. So I think which camp you fall into depends a little on how bad you think the damage is. Still, like Burry's, and perhaps even Lewis', HFM's is a captive mind. For all his candor about the causes of the financial crisis, he speaks from within a framework of essentially Friedmanite, free-market fundamentalism. As he's speculating about martial law and breadlines, his biggest worry remains not widespread unemployment, but...the possibility of inflation and its effect on currency values. (His concessions to Keynesianism seem to evaporate as the immediate crisis of the Lehman Brothers collapse recedes.) Nor does HFM appear to see the shenanigans of the financial sector as systemic, rather than as tokens of personal fraudulence on the part of unsavory "dirtbags." Gessen's interviewing strategy - to present himself as a novice in search of instruction - succeeds brilliantly, in that it gets HFM to open up in all kinds of compelling and admirable ways. On the other hand, it means that his macroeconomic premises tend to go unchallenged. Narratives about the horrors of stimulative deficit spending, in particular, have lately become a viral element in the body politic. As with New York's fiscal crisis of the 1970s, or the various currency collapses of the 1990s, the public is being set up to choose between punishment at the hand of "bond vigilantes" or draconian "austerity measures" designed to ward off default. Notice, though, that those bond vigilantes are the very people who got us into this mess in the first place. Notice that the rate of inflation reported a few days ago was essentially 0%. And notice that, if we accept the choice as it is being framed for us, the hostage is screwed either way. I invite you to think back to Speed. One of the first questions we're trained to ask about any narrative is whether the narrator is reliable. And if history has taught us anything, people, it's that Dennis Hopper is f-ing crazy. Bonus links: An excerpt from The Big Short A collection of HFM interviews from nplusonemag.com

The weather is nice, and we've got all the windows open in the apartment. We ran some errands earlier today - although the task of going to Whole Foods to buy cheese and olives deserves a term with better connotations than "errand." Now I'm flipping through a stack of catalogs from Penguin while I listen to baseball on the radio. This is why I look forward to weekends.I think I'll start with the Plume, Portfolio, Overlook, etc. catalog. These imprints do both paperback editions of books that have already come out in hardcover, and paperback originals, which are initially published as a paperback without a prior hardcover release.There's a nifty little collection coming out in August as a paperback original. The Subway Chronicles "offers a kaleidoscope of perspectives on this most public of spaces," New York's legendary subway system. Jonathan Lethem, Colson Whitehead, Francine Prose and Calvin Trillin are among 27 contributors whose essays look at New York's subterranean city from every angle. The anthology's editor, Jacquelin Cangro, runs thesubwaychronicles.com.I've heard sections of Dan Savage's book The Commitment read on This American Life. Savage writes in the David Sedaris, David Rackoff, public radio funny man vein. Like those two Davids, Savage is gay and his sharp comic timing and casual mastery of the memoir style transcend any label. In The Commitment, Savage recasts the gay marriage "debate" as his own family drama, injecting some much-needed humor and personality into a controversy that is so often portrayed as faceless. The hardcover is already out and the Plume paperback comes out in October.Under the Portfolio imprint is the paperback of John Battelle's book The Search. The book tells the story of how a goofy little search engine called Google grew into a $120 billion company that enjoys global ubiquity and is seemingly able to reinvent any industry it touches (publishing for example). Aside from my general fascination with Google, I'm also interested in this book because I read and enjoy Battelle's blog. As the creator of FM Publishing and the "band manager" of Boing Boing, Battelle is someone to watch in the world of new media. The paperback edition comes out in September.Extras: Andy Riley's morbidly hilarious The Book of Bunny Suicides and The Return of the Bunny Suicides are being collected in a box set called A Box of Bunny Suicides due in September. Haven't seen the bunny suicides? Go here and click excerpt. Also, Plume is putting out great-looking new editions of Fences, The Piano Lesson, Seven Guitars and Joe Turner's Come and Gone, by the late Pulitzer Prize-winning playwright August Wilson. (The snazzy new covers aren't showing up at Amazon yet, but I'm assuming they'll switch out the old ones soon.)