Monday, December 15, 2008

Does anyone know what happened to this Cornell Student?

In the end, he was right and everything Milton Friedman has said turned out be wrong. But at the time, the latest chapter in India's economic history had not yet been written and it was difficult to counter Friedman's argument.

Wednesday, October 1, 2008

Is London the REAL SOURCE of the economic meltdown mess?

I spent the weekend arguing that the decline in housing prices is not the problem with our economy. It is the crazy way the financial markets tried to monetize mortgages. When cracks in the schemes of CDOs, SIVs and credit default swaps started appearing in 2005, what did banks do? They doubled down – that’s when the subprime mortgage lending skyrocketed.

Fortunately, Gretchen Morgenson came to my rescue and laid out that
exact argument on the front page of the Sunday New York Times. She wrote: “Although America’s housing collapse is often cited as having caused the crisis, the system was vulnerable because of intricate financial contracts known as credit derivatives, which insure debt holders against default. They are fashioned privately and beyond the ken of regulators — sometimes even beyond the understanding of executives peddling them.”

I would also suggest that London may well turn out to be the epicenter of the storm. It was the where the key inventors and promulgators of these schemes resided. These handful of British elite created the shenanigans that enabled the few to become so very rich that every Wall Street executive was slobbering to get in on the deals.

Take for example, Nicholas Sossidis and Stephen Partidge-Hicks. These two sold the world the idea of the Structured Investment Vehicles (SIV), and since they originated the idea while they were at Citibank, they convinced everyone that only their office knew how to set them up because they were so complicated. They even called their company Gordian Knot, an extraordinary joke turning out to be at the taxpayers’ expense. Their efforts insured BILLIONS of dollars poured into London and a renaissance in the London markets based on a house of cards began. (See: Gordian Knot: How London Created a Snarl In Global Markets SIVs Fueled Debt Boom, But Now Banks Scramble To Prop Up the Funds By Carrick Mollenkamp, Deborah Solomon, Robin Sidel and Valerie Bauerlein, WSJ | 18 October 2007)

Then we get Cassano at AIG who headed a relatively small office in London but, according to Morgenson, moved his office from the relatively vanilla deals involving the overnight rate banks charged each other for borrowing money into the mad mad mad money world of credit default swaps. In the past few years he and everyone in his office got crazy rich. And now his small office has brought down one of the largest companies in the world.

And take note that the LIBOR rate – London Interbank Offered Rate – which sets the interest rate for many adjustable rates loans in America, is regulated by just TWO Londoners as reported by Donald MacKenzie in the London Review of Books “On the Importance of LIBOR”. (There are some back up folks ready to step in due to an
emergency but these two individuals were considered too critical to the world’s banking operations to actually be named by Mackenzie.) The LIBOR rate is set when banks call in to say what it would cost for their institution to borrow money from other banks, a self-reporting system that can readily be abused.

In fact, a few months back the Wall Street Journal made some nasty claims about what was going on behind the LIBOR scenes, noting that the cost of credit between banks was skyrocketing but it wasn’t showing up in the LIBOR rate. The idea was that banks were covering up how bad things really were.

While MacKenzie doubts the WSJ position, I remain suspicious. In a story last week, the New York Times reports that “The chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged on Friday that failures in a voluntary supervision program for Wall Street’s largest investment banks had contributed to the global financial crisis, and he abruptly shut the program down.” It makes me wonder whether we are seeing the writing on the wall for any similar self-reporting system in the UK. I certainly don’t believe that the British financial industry is any more honest than the American one.

Finally, I have little doubt that these all too critical Libor lynchpins, Messrs. Cassano, Sossidis and Patridge-Hicks were all lunching. (Why don’t we have Hello! Magazine snapping near naked shots of these fellow vacationing together?) These were the top players working a tiny field of business in a very insular country with an already exclusive caste system that America chose to overthrew in our revolution.

While clearly the U.S. investment banks and their many key executives played with fire and got burnt badly, I wonder if when the dust settles we will look to London as the epicenter of so much of the mess. After all, there is also a cultural issue here. Being married to a Brit, I am always amazed by the credibility Americans give to the English. The snottier they are, the more godlike we treat them. Is this one reason why they led us by the nose into investing into their dressed-up dung?

Saturday, September 20, 2008

Why are people blaming the poor for our financial meltdown?

A few days ago when my uncle was over for dinner, he blamed the country's economic woes on people taking out housing loans they couldn't afford. The implication was that if American's had been more fiscally responsible, we wouldn't be facing such problems. I am starting to read it in the New York Times, and hear it on the street. Perhaps the approach might be slightly more tactful: If Washington hadn't pushed an ownership society, none of this would have happened.

Are they kidding? Peddling loans to the uneducated and convincing them they could GET RICH too was every day business. (I seem to recall being taught in high school history that it wasn't the fault of the poor for the spiraling easy credit mantras of the 1920's. It was the fault of the lending machine.)

Take the broker from WaMu, RIP. We signed up for a home equity loan in 2004 when my husband was a PhD candidate and I was making minimal money on documentary films. We told no lies on our application. But that didn't stop the broker from HELPING US. In fact, when we walked into the branch to sign our paperwork, he had DOUBLED what we had asked for and was waiting for us to agree. Ouch. My husband and I shook our heads in disbelief - we we're the kind of people banks treated suspiciously. Something was really really wrong here. We heard the bells a-tolling for old WaMu.

It seemed as if money-crazy psychology had clouded all reason. Take for example, the NYTimes July 2007 magazine article "The New Gilded Age," with the picture of a golden manhole cover on the front, published just weeks before the markets started to unravel. Surely editors should have been able to find more voices to debate such excess but criticism was overwhelmed by Wall Street's pumped up mentality.

And the irony was that within that same week, the paper had a story about the terrible conditions of workers in foreign companies making those New York manhole covers.

Saturday, April 12, 2008

FedEx Fast One

Chalk one up for Federal Express. FedEx has long enjoyed excellent public relations as noted by its inclusion in The Value Profit Chain: Treat Employees Like Customers and Customers Like Employees, a book written by three Harvard Business School professors . The book profiles companies who invest in employees and reap benefits from that policy in return. In FedEx’s case, those employees, especially the delivery drivers, have a constant interaction with the public, making their behavior critical to the company’s image and it would seem a no-brainer for FedEx to keep those employees happy. This past March, one of those drivers did the company a favor in return through an extraordinary act of heroism. [BLOGGERS PHOTO POSTING IS DOWN SO I HAVE TO USE LINKS]

A month later, the photo turned up in a full-length ad in newspapers across the country and on a “FedEx Stories” Flash-based website , as part of a promotional campaign commending driver Jay McMullin specifically and FedEx employees in general. However, when the campaign went public, the second man climbing from the black car was airbrushed from the scene despite the fact that many news agencies had carried the photo right after the actual event in its original. The appearance of the altered image and the orchestrated publicity wave occurred just days before a very negative story about FedEx appeared in the New York Times.

The emotional nature of the ad was in direct contrast to the New York Times business section piece describing how badly Roadway Package Systems, a FedEx Ground company, treats its employees (Greenhouse 2008) . The article detailed how FedEx Ground forces workers to act as “independent contractors,” pay for their own trucks, offers no benefits, and recently fired a ten-year employee who couldn’t keep her routes because she’d been diagnosed with cancer. The company is already facing serious IRS penalties for treating these employees as contract workers when in fact they work in the same capacity as normal staff. Not surprisingly, those drivers have little of the regular contact with the public as uniformed FedEx drivers and the heroic act of one those uniformed drivers caught by a news reporter will almost certainly overshadow the New York Times piece, especially given the alternative – a photograph of the sickened and helpless cancer victim.
Given the delay between the event and the promotional campaign, it is difficult to believe that the photo of Jay McMullin was not used a defensive measure against the impending New York Times assault. A blurb on the incident and quote from McMullin, who did little talking to the press, was placed strategically on the FedEx web-based “Newsroom” :
FedEx Express courier Jay McMullin recently made the quick decision to help a fellow motorist in need. He has made the company very proud for his courageous action. Mr. McMullin issued the following statement:

“The response to the photo of Odell Bunch’s rescue has been humbling and overwhelming. I sincerely appreciate the kind notes, email, phone calls and general interest in my well-being. While I am honored by the attention, I only did what any of my fellow FedEx co-workers would have done.”

Wednesday, April 2, 2008

Acceptance of neurological differences

When I learned about what doctors like the infamous Dr. Money used to do to babies born with an extra y or x chromosome I was horrified. I agreed with movements to leave well enough alone, without trying to slice or dice one gender or another into existence. So now that a similar movement is underway by autistic individuals, I am mesmerized. And I found myself unexpectedly in a student relationship with someone who says he had been diagnosed as autistic.

First a bit of background:

And then the original video:

So I had watched this only recently and it sparked a good dinner table discussion with my husband. He pointed out, informed by the work of Ian Hacking, that autism is not unlike what was once considered possession, or schizophrenia, the idiot savant or even multiple personality. Now we have aspergers and autism to help qualify what could be considered neurological diversity. (Okay its very late on Sunday night, tax preparation has stolen my weekend, and you might argue that two glasses of wine have robbed my reason.)

In the middle of this, I was trying to organize the move and further development of our virtual Guantanamo Bay in Second Life. Annenberg has kindly donate 8 acres and we are supposedly getting a plug in Vanity Fair's online edition for the May issue which will feature a piece on Guantanamo Bay. While discussing the use of an existing structure with its builder, Matt Lee, a fellow whose Second Life name is Cinco Pizzicato overheard me say that I needed the exterior of a c17 transport plane. He offered to give it a shot. It was only later that i checked his profile to learn of his interest in autism and aspergers. He later told me that he had been diagnosed as autistic.

In the last few days he has nearly completed the exterior of the plane. He has taught me some machinima tricks. He has given me some wonderful second life tools. He has been kind and friendly. He has put me in awe on more than on occasion.

It is a journey worth exploring. I am considering whether it wouldn't make an excellent documentary film - much of it filmed in Second Life.

Monday, March 3, 2008

Anti-authority culture and the mashup

My mother, a sweet and kind first grade teacher, tells the story of being so naïve that when she first saw the bumper stickers “Question Authority” in the 1960's, she assumed it meant that the individual in the car was an authority on questions. My father, an autocratic artist and self-proclamied socialist who chaired the UCLA art department for a record thirteen years, took a very different stance. His attitude that no one should be presumed to deserve ultimate control was reinforced by an episode when I came home from school having committed some perceived misdeed in a class where I was otherwise scoring top grades. The teacher sent home a slip of paper describing my failure in conduct to my parents. My father discussed the situation with me, heard my side of the story, and responded to the teacher by writing on the back of the slip, “Nonny tells me that YOU do” such and such. It was a lesson that generally (although not always) served me well in my journalistic career – never trust that having a title equates having rightful authority.

It is not surprising, therefore, that I am enjoying reading about the antics of early computer programmers described in Steven Levy’s book Hackers: Heroes of the Computer Revolution. The first machines were locked away from those young programmers and they had to go through a series of “priests”, doorkeepers, who would take their punch cards from them and feed them into the computers. The frustration these programmers felt at not being able to really tinker or get their hands ON, to be stopped by such baseless authority, helped create a mentality that is summed up in what Levy describes as the tenets of the hacker:

• Hackers should be judged by their hacking, not bogus criteria such as degrees, age, race or position
• You can create art and beauty on a computer
• Computers can change your life for the better
• People shouldn’t have to pay for software – information should be free

So that brings us straight to how that culture still permeates the digerati and why they battle copyright. DEATH TO THE AUTHORITARIAN GATEKEEPERS!

I’ve had a film of mine "Unconstitutional," mashed up for use by someone else -- none other than USC professor Steve Anderson. When he showed it to me, I was thrilled – it meant the message of the film was going to live on, even if in a kind of Chinese whispers sort of way, altered beyond recognition. Interestingly, Steve and his cohort on the project (and wife), Holly Willis, just won $61,000 from the MacArthur foundation to build “Critical Commons” – you guessed it, a site devoted to issues surrounding fair use. (You can get the skinny at: MacArthur Winners or at the IML website.)

Steve mashed up my footage as part of his anti-MPAA piece which parodies the “You wouldn’t steal a handbag campaign.”

(If you haven’t been tortured by the MPAA message which is even embedded on children DVDS - too violent for my kids -- watch it here.)

I enjoy Anderson's irony of mashing up footage to spoof the MPAA message but I decided I should explore the issue further. However, I found myself again and again agreeing with Anderson -- and Lessig -- that copyright issues have been co-opted by the larger entities, especially given how little they actually pay writers and creators. The blog copyfight wrote a great commentary on a February 15 article in the LA. Times:

“To say that [the studios] lie, cheat, and defraud doesn't begin to cover it. In this case the victim is one Deborah Gregory and the villain is Disney but the same story could be told hundreds of times - just change the names and it's the same again and again. In this case Gregory started as a successful but naive author, then signed with Disney for 4% of net. After two movies, millions of CD and DVD sales, and god-knows-how-much spin-off merchandising, Gregory has gotten exactly nothing for any of this. In fact, Disney won't even give her statements showing revenue and expenses that would allow her to pursue her share of the profits. As the Times piece points out Hollywood has been using shady accounting and unfair contract terms to screw people for decades. They have all the power, especially when dealing with newcomers, and they use it shamelessly. Keep that in mind the next time they cry about how much money they're losing to "piracy"; I'm not a big fan of theft, but I sure do love schadenfreude.”

Here’s a little more scholarship from American University on fair use that came out just this past fall that adds to the argument:
The Cost of Copyright Confusion for Media Literacy -
Educators today have no consensus around what constitutes acceptable fair use practices. The report concludes with a call for educators to develop a consensus around their interpretation of their most valuable copyright tool: fair use.
Download full report here.

It seems Harvard University faculty agreed, having just voted for open access on all of their papers. (Read more at the blog If:Book: A project of the Institute for the Future of the Book.)

However, whatever the academics may be saying and doing, their work isn’t as much at issue. So I leave with a Cory Doctorow piece in the UK Guardian: "Copyright law should distinguish between commercial and cultural uses."

Finally, just for the fun of it: a parody of the Yes We Can video substituting McCain as the candidate called

And if you've made it this far, just to let you know I have fixed my problems with the DIY 24/7 conference blog. A couple of fun things to watch if you want and now I've got the html,xml etc for the blog down pat! I hope...

Sunday, March 2, 2008

women get whacked

Sexism, like racism, is not always palpable in a way people can easily grasp. Its corrosiveness is hard to calculate but studies done by places like the Department of Housing can help quantify the issue. Every few years, the DOH sends out undercover “loan applicants” who list the same income, similar profession, credit rating etc. and whose only difference is race. Decade after decade, these studies prove the insidiousness and deep-seated racism in this country -- blacks are turned down or offered less attractive loans compared to their white counterparts. Similar studies have been done with women and resumes. Call yourself a man and you stand a better chance of getting a job.

But this week, I felt as if I was assaulted by some disturbing attacks on women in the media, even when the story purported to do the opposite. And I am not here to defend the candidacy of Hillary Clinton – I voted Obama (speaking out against the war at that time was a brave thing to do). However, I do regret some of what she has had to endure.

For example, last week New York Times columnist Maureen Dowd chastised Hillary for not taking a “sewing circle” approach to reaching women. Hillary was too, well, macho on Capitol Hill.

Then Sixty Minutes served up a winner about Happiness in which a Harvard instructor cited a study claiming that women in America have an antipathy toward their children not found in European mothers. Specifically, American moms don’t enjoy spending time with their children. The reason? According to the Sixty Minutes version of the story, they love their children as much as European women, but they tend to try to work on the computer or talk on the phone or multi-task when they should be hanging out with their kids. This time-management conflict was supposed to lead to frustration and unhappiness.

Yet the show offered no mitigating information – that European countries offer inexpensive childcare alternatives, that American women have none of the financial safety nets that exist in Europe (the little welfare system we had was destroyed under Bill Clinton), that American women are often expected to spend more hours performing household chores compared to their partners. I’ll let you judge the level of sexism in the clip – I can only say it antagonized me.

Finally, in another piece entitled "Geek Chic" in the New York Times, what appears to be a feministic piece about teenage girls dominating the blogosphere suddenly morphs into paragraphs with terrifyingly underhanded sexism. First the reporter points out that “[A] study published in December by the Pew Internet & American Life Project found that among Web users ages 12 to 17, significantly more girls than boys blog (35 percent of girls compared with 20 percent of boys) and create or work on their own Web pages (32 percent of girls compared with 22 percent of boys). Girls also eclipse boys when it comes to building or working on Web sites for other people and creating profiles on social networking sites (70 percent of girls 15 to 17 have one, versus 57 percent of boys 15 to 17)”.

But the piece quickly undermines this initial argument when it goes on to explain that girls are on the web really because they just want to talk about themselves to their friends! So while it starts out with the idea that hey, girls CAN use a computer, by the end we are left with the portrait of the gossipy girl who uses her blog like she used to use the princess phone. It even paraphrases a respected UCLA researcher, Jane Margolis. “Ms. Margolis emphasized the profound distinction between using existing software and a desire to invent new technology.”

Consider another Margolis quote and you can imagine what she really told the NYTimes reporter. “We found that very early on computing is claimed as male territory. At each step from early childhood through college, computing is both actively claimed as ‘guy stuff’ by boys and men (and parents), and passively ceded by girls and women. The claiming is largely the work of a culture and society that links interest and success with computers to boys and men.”

Here’s another bit of data from Margolis to put this in context:
“Among the 1999 recipients of computer science bachelor degrees from Ph.D. granting institutions in the US and Canada, only 4% were African-American and 4% Latino/a. Such low numbers are found elsewhere, as African-American and Latino/a students together make up less than 7% of the high school advanced placement computer science test-takers nationwide. In 1999, only 7 California African-American female high school students took the AP CS exams (out of a total of 455 female test takers), 24 African-American males (out of 2501 males), 21 Mexican-American females and 52 Mexican-American males.”

In keeping with the trend this week, I have to note similar insipidity in Steven Levy’s book, Hackers. C'mon - it was 1994 when he wrote, “The sad fact was that there never was a star-quality female hacker. No one knows why. There were women programmers and some of them were good, but none seemed to take hacking as a holy calling the way Greenblatt, Gosper and the others did. Even the substantial cultural bias against women getting into serious computing does not explain the utter lack of female hackers”.

The same year that Levy was permanently inscribing his ignorance, Jo Sanders, project director at the Center for Advanced Study in Education at the CUNY Graduate Center was running a Computer Equity Expert Project. After training 200 k-12 educators how to encourage girls to persist in computing (and math and science) she found:

* The Pascal programming-language course in a Virginia high school saw girls' enrollment rise from none before the project to half the class after it.

* In a computer lab in a New York middle school, the ratio of girls to boys went from 2:25 to 1:1.

* Girls' enrollment in an elective computer science class in Oklahoma rose from none to 31 percent.

* A computer programming class in a Colorado high school went from 15 percent to 30 percent female.

* Girls' free-time use of computers doubled in a school in Washington, D.C.

(Margolis, a professor in Education at UCLA is also trying to teach educators how to retain girls and women in their classes.)

Unfortunately, "Geek Chic" was written in a way that undermined the real story here – teenage girls' familiarity with website codes like html should have been trumpeted as indicative that educators are starting to win their equity battle without OBJECTIFYING them.

I end on a personal note: I took the Flash I and II courses offered by Annenberg this past two weeks. The first session had approximately fifteen students and was dominated by women. At the end of the first day, the female instructor told everyone that the upcoming Flash II was going to be coding and therefore extremely difficult when in fact it wasn't. Only three people showed up for the second session, including myself. All were women.