Monday, September 29, 2008

A.G. on the Bailout

"So what Pound is pointing out is that the whole money system, banking system, is a hallucination, a shell game, and he's explaining the structure of this hallucination and going back historically, because the structure changes from bank reform to bank reform era."

Allen Ginsberg
April 26, 1971
(Allen Verbatim, p. 175)

[NOTE: The Fed has traditionally been lender of last resort to commercial banks. On March 18, 2008, it "ripped up its rule book" and made itself lender of last of resort also to investment banks. At that time I vaguely felt the nature of money changing. The "hallucination" felt, you know, different. A new banking era. On September 17, the New York Times could announce that "by acquiring almost 80 percent of A.I.G. in exchange for lending it $85 billion, and holding $29 billion in securities once owned by Bear Stearns, the Fed is now becoming the investor of last resort as well." Welcome to the ownership society. Like the man said, You are on ... your ... own.]


Kirby Olson said...

Is this really A.G., or is it Pound, as summarized by A.G.?

Pound's work in this area is incredibly suspect isn't it?

Would A.G. actually support Pound's views of usury?

Oh dear me. Neither one of them strikes me as profound in economics.

For Pound it's the worst part of his work, and completely wrecks the Cantos, since it's such a simplistic, and basically anti-Jewish take.

The scuttlebutt on most news channels this morning is that something is going to pass, and then we have to see if the market bites at the newly buttressed bills, and then we'll see if that floats the economy's boat.

A big bank in Belgium failed, and now one in Iceland, too.

Thomas Basbøll said...

Yes, in Allen Verbatim he remains "on message" on Pound's view of usury and the banking system. But you're right, it's a summary of Pound's view (I thought that was explicit). Ginsberg shares the view.

I don't agree with you about the influence of Pound's monetary views on the Canto's. Economics is not a very "profound" science. I think Pound's accomplishment is to plumb the depths of economics. To move people, as he said, with such a "cold thing".

My point in these posts is that he is now in a position to say I told you so.

Pound's view, essentially a conspiracy theory, is not overly complicated but not "simplictic". It's (justified) paranoia seeks "the low down" as Cowley observed. Economic theory is overly complicated and difficult to understand because the finincial sector's practices are willfully obscure.

While it's impossible to deny that Pound himself was an anti-semite, his monetary theory is not. Nor is his view on usury. There is nothing anti-semitic about "With Usura". And it's a great poem (in both versions).

Kirby Olson said...

Oh no, of course it's anti-Semitic. He's writing in Italy which for centuries had outlawed usury among Catholics as a sin.

Only the Jews could lend, and hence they ran the banking industry.

It's meant as anti-Semitic.

Plus, he clearly hated the JEws, unless they happened to be his actual pals, which they were in some cases (Zukofsky).

Kirby Olson said...

The bailout failed, because Pelosi made a speech that made it look like the whole fault belonged to the Republicans, so about 13 votes on the Democratic side didn't come through, and now the Dow fell another 750 points (it feel about 650 after 9/11).

At any rate, on the other point, of Pound and Ginsberg, its odd that they could be on two opposite ends of the political spectrum and agree on banking.

Kirby Olson said...

Pound's position comes out of medieval Catholicism in which usury was banned by the church.

Or did it?

Williams has similar ideas of social credit.

I think the only one in that group that never thought about things like this was Marianne Moore. I don't think she ever talks about money, at least not int he abstract sense.

But I could be wrong.

Thomas Basbøll said...

Williams, yes. But he was not an anti-semite, was he? So social credit, at the very least, can be separated from anti-semitism.

To call Canto XVL anti-semtic, is roughly as silly as calling all criticism of the Bailout anti-semitic. This even though one need not doubt that, even today, anti-semites connect banking malfeasance with Jews. Pound may even have thought he sticking it to the Jews when he wrote XLV, but that can't be all that was on his mind.

You can't get the soul right if you insist on disagreeing with the Catholics about everything. (I.e., you can neither reach a correct understanding of the soul nor perfect your own.)

The "oddness" you feel about E.P. and A.G. agreeing tells us something both about how important this banking issue is AND how inadequate the notion of a "political spectrum" (right-left) is for understanding politics.

Thomas Basbøll said...

Banking transcends political divisions (whether by party or by "spectrum"). I think the vote shows that pretty clearly.

A lot of economists were against the bailout. Ron Paul rocked on this: the bailout plan is immoral, unconstitutional, and bad economic policy.

And, "on the other side of the spectrum", Michael Moore called it a coup attempt (he's not the only one. Gerald Celente has said the same thing.)

I think there is some truth to the idea that what Paulson was proposing was theft. If they're going to print and spend $700B, they could put them directly into the economy in ways that will prevent the mortage holders from defaulting, not just prevent the bankers from taking a loss on those defaults. Some people are saying that those $700B will very likely be needed in the months to come, which is why they should not be handed over to Wall Street.

Also, home values need to fall, not be propped up. (Lesson from the depression.)

Thomas Basbøll said...

I lean strongly to something like Galbraith's plan. I don't know enough to make such a plan of course. I may write a post about it soon. Also, I've been enjoying Karl Denninger's take on all this immensely.