Guest Post: The Economic Sociology of Triathlons

Triathlon is the new Golf: As a young lawyer making a name for himself in the mid-seventies, my father’s superiors told him to “pick up golf” as a way to rise quickly within the firm, and to land lucrative clients. It’s still all about who you know, but if you want to get ahead in business today, don’t hit the putting green, sign up for an Ironman. Why?

Like Golf, Triathlon is cost prohibitive: The average annual income of an Ironman participant is nearly $160,000, while the average golfer makes a measly $100,980 a year, according to Golf.com’s 2009 Survey.

With Ironman entry fees upwards of $500 each (plus the flight and lodging expenses associated with destination racing), a decent bike starting around $3,000 (plus $400 for the shoes, helmet, peddles and accessories), $200 for swim, bike and run gear, and $300/month in coaching and facilities fees; you start to understand the need for that extra $60,000/year.


A $6,800 Trek TT Bike, with Carbon, disk wheels, which cost upwards of $2,000/set.

Triathletes make better business connections: Like Golf, Triathlon entrances “Type A” personalities, obsessed with winning, even if victory requires continuous practice and focus. Unlike golf, Triathlon also demands incredible pain tolerance and phenomenal endurance. Consequently, “the sport attracts high-income, driven, focused individuals who are able and willing to pay the price in time and money,” says David Samson, Florida Marlins president, and Hawaii Ironman 2006 finisher.

Not only are triathletes more driven, they’re also younger. On average, Ironman triathletes are 35-44, while avid golfers are generally in their early 50’s. Consequently, triathletes are at the peak of their professional careers, while many golfers are contemplating retirement, and thereby less effective in helping you infiltrate the network or company of your choosing.

Triathlon is a better way to schmooze (on a Micro Level): Now that you’ve drawn all of the rich, hard working, high powered individuals into one sport, it is time to make connections. Typically, only four players participate in a round of golf, which takes around 4.5 hours. You likely know at least one or two of the other competitors if you’ve been invited to play in the first place, so you’re left with at best two networking opportunities, which isn’t an efficient way to find the right contact for you.

Most of the Multi-Sport fitness groups in my home town (Marin County, CA), host weekly group rides, averaging thirty to fifty participants. The group usually covers seventy miles in a given ride, thereby providing five hours (plus a group brunch) to make friends, and connections.


The PurplePatch Fitness Weekly Saturday Group Ride, Marin County, CA

The group usually breaks into smaller packs of evenly matched athletes after a ten mile warm-up. As competitive, Type A folks, multiple members in a given group will eventually ask you how old you are, what team you belong to, and what you do (probably to ascertain how much time you have to train, how long you’ve been serious about the sport, who coaches you, and what if any advantage your bike may provide you).

It is during this hierarchical ranking process that you establish dominance over the somewhat older, not-as-fast man on the really expensive bike. He may be the CEO of a major tech company in Silicon Valley, but that is the professional “Pond” (Frank, 1985) or “Sphere” (Putnam, 1995). Right now, you’re both in the triathlon sphere, where you’re fitter, faster and had a better time at Ironman Canada last year. As Frank noted, it is relative status that creates happiness and satisfaction, and in this pond, your status is higher than his.

So, for the remainder of the ride (and during brunch afterward), he picks your brain about triathlon, and you arrange to have lunch with him at his office next week, a networking win you’d never enjoy if you’d attempted to engage said CEO in the professional Sphere.


Aaron Wallen: ‘World’s Fittest CEO, 2008’ Ironman Challenge, Kona, HI

Triathlon as a character reference: Not only have you now procured a meeting, you’ve already passed the first round of the interview process. The ability to withstand (and even enjoy) suffering is a form of ‘bonding social capital’ (Putnam, 1995) that forges a strong sense of collective identity. It implies a preference for achieving work-like goals in the leisure sphere, which translates seamlessly into a strong, professional recommendation from your new friend, the high powered CEO.

Triathlon is a better way to schmooze (on a Macro Level): There is no other sport in which every race includes Professional, Amateur and “Age Group” triathletes from under ten to over eighty, separated only by “wave” times, which are determined by age and gender. As Bob Babbitt, publisher of Competitor Magazine put it: “I can’t pitch to Barry Bonds or tee off with Tiger Woods, but I can be on the starting line with the top people in triathlon.” Consequently, you can train, compete and network with individuals of all ages and abilities, from around the world.

While the world of triathlon is growing rapidly (223,594 US adults participated in a triathlon in 2007, up from just 83,612 just ten years ago), Triathlon is still a small community, even at the Macro level. With a limited number of Ironman (2.4mi Swim, 112mi Bike, 26.2mi Run), Half Ironman (1.2mi Swim, 56mi Bike, 13.1mi Run), Olympic (.9mi Swim, 26mi Bike, 6.1mi Run) and Sprint (.5mi Swim, 16mi Bike, 2mi Run) distance races, you are assured to become familiar (and even friendly) with similarly matched athletes from across the country, and the world.

Triathlon is a reciprocal Panopticon: Your athletic club affiliations are declared on your uniform, and your age is written on your calf prior to each race (so you can check the legs of everyone you pass and everyone who passes you, to estimate ranking in on your age group during the actual race).

Your relative time and ranking is posted within minutes of completing the race, so all can see where you fall amongst the 2,000 or so athletes who participated that day. Award ceremonies are performed immediately, and results are posted online within 24 hours. You can even look up their participant’s photos!

Basically, Triathlon is a Panopticon (Bentham 1995 [1785]; Foucault 1977), in which everyone is given the role of prison guard and prisoner. You can’t hide anything about yourself, but in turn, you know everything about everyone else.



Left: Athlink.com results display an athlete’s age, gender, city, and results for every endurance event completed. Right: Bentham’s Panopticon: A theoretical prison that allows guards to observe (-opticon) all (pan-) prisoners, who can’t reciprocally tell whether they are being watched. Foucault references the Panopticon in his argument that relative knowledge precipitates relative power.

Conclusion: Triathletes are a self selecting group of affluent, highly motivated individuals, who spend countless hours forging bonds through the competitive, grueling, and socially cohesive ritual of endurance athletics. The greater community convenes several times a year to establish relative rank by sex, age, casual, amateur and pro standards. With access to the region, age, gender and past performances of every athlete in this group, Triathletes are “tee’d up” to make local, national and international connections that turn into husbands, wives (38% of Triathletes are now women), employees, employers and friends. In a world where it’s all about whom you know, it doesn’t hurt to know the rich, successful, driven group that is Triathlon.

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Money and Medicine, Part II: Economic Culture Shock

A sign whose likes you will never see in Germany. Taken in Mountain View, CA; August 2009.


You know what’s really fun? Being sick and in pain, up the middle of the night, trying to decipher the directions inside a box of pain medication, in a language you don’t really understand that well. I got to enjoy that experience about six weeks ago, with a recurrence of the same problem that made it excruciating for me to walk back in July, prompting the first Medicine and Money post. This time, there was prescribed pain medication involved—hooray—but it was of a kind that could kill you if you took too much. So reading and understanding the package directions was actually important. Imagine my surprise to open that package in my hour of need and find that the insert contained pages of directions, but only in German. Not one word in any other language: as if it never occurred to the manufacturer that non-German-speakers might find themselves in Germany, sick and in need of this common pain medication. As if there were no such thing as a tourist, or an immigrant worker.

In case the reasons for my surprise aren’t clear, I should point out that Germany is a relatively small country (by American standards) surrounded by neighbors who speak other languages: French, Italian, Dutch, Danish, Polish, etcetera. Internally, Germany also has a large number of immigrant groups in its population, the largest of which is Turkish. But was there any Turkish, or French, or Italian to be found on that package insert? Nein! A thousand times nein! Because anyone lucky enough to get into Germany should have the courtesy and intelligence to read German, right? Especially medical German, of the kind printed on the package insert for this pain medication.

So I sat in the bathroom with a dictionary at 3am, barely able to focus my eyes from the pain, trying to figure how to avoid killing myself by accident with the pills that were supposed to bring relief. Obviously, all’s well that ends well: I am not blogging from beyond the grave. But it got me thinking wistfully about the ways in which American drug manufacturers and pharmacies go way out of their way to avoid this sort of situation happening in the US. When I was in California a few weeks after wrestling with the pain meds, I stopped by a CVS and had to smile at images like the one above, of the Asian pharmacist with the caption in Spanish, and this sign—displayed near the prescription drop-off window—explaining to customers how to get help in 21 different languages, including English, Laotian, Polish, Portugese and German! (Please forgive the poor quality of my camera phone shots.)


 

Now this kind of outreach to non-English-speaking populations obviously doesn’t occur just as a humanitarian gesture: it’s a business decision by firms that want to make money by reaching out to the widest possible customer base. This means eliminating obstacles to the use and purchase of medical products—like language barriers. Despite all the crummy pockets of English-only activism in the US, American firms still want to make money, and that keeps them printing signs and package directions in lots of non-English languages—because they recognize the reality that many people in the United States, whether tourists or immigrants, don’t speak English at all, or don’t speak it well enough to decipher things like dosage directions while in pain in the middle of the night.

The question is: why don’t German firms recognize that? Why don’t they recognize that non-German-speakers within Germany have money to spend, and try reaching out to them—for instance, by making package directions available in other languages? Leaving aside the safety issues—it says something about German culture and its stance on foreigners that potentially dangerous medications are not labeled in any language other than German, or even in pictograms, which are commonly used elsewhere in the world as a language barrier workaround—it seems that German firms are forgoing some profits by making their products hard to use by non-German-speakers.

At root, I believe, this is about culture. Shortly after my arrival in the country, many Germans told me to be prepared for the total absence of American-style service culture. But that was only part of the story: after three years in Germany, what I notice is not just the absence of something like service orientation, but the presence of a cultivated user-unfriendliness, in which making things difficult and exclusionary is very much an explicit goal rather than an unintended consequence.

This is one of the many instances where conventional economic wisdom—all businesses wants to maximize profits—breaks down, and economic sociology can be very helpful. Because it’s not that hard to find places where entities nominally called businesses seem hell-bent on making it difficult for people to buy and use goods and services. The whole culture of capitalism as Americans know it is not universal, even though many US political and economic leaders would have us believe that those norms and values are shared everywhere that business is transacted. If you’ve ever been to a socialist or communist country, you know this already; but it is perhaps more surprising that one finds such substantial deviations from American, customer-oriented norms in countries known as developed capitalist democracies.

Like Germany—where two of my German friends recently got “fired” from their long-time health club because they complained to the owner that her employees were 10-15 minutes late almost every morning at opening time, leaving a crowd of members waiting around for the front doors to open. So instead of apologizing or trying to remedy the situation, the club’s owner told my friends that they were banned from the club henceforth as complainers who “upset the staff” with their unreasonable demands for things like reliable opening hours. Now that’s customer service! (I did find a tiny speck of consolation in this story: I thought that kind of thing only happened to foreigners like me, whose accents and grammatical errors while speaking German gave us away as members of a lower caste.)

Economically, this is just insane: what kind of business owner fires her own customers when they complain about her business failing to live up to its commitments? Wouldn’t it seem easier just to make sure the doors of the club got opened on time, rather than losing the revenue stream from customers of years’ standing? I suppose an economist would say that the club owner was maximizing her utility—whatever that means in this case. The utility of being able to cut off her nose to spite her face? To “win” a power play, but lose money in the process? Certainly, many people are willing to pay dearly for the experience of power and dominance over others. But whenever this sort of thing gets explained in terms of economic theory, I find the term “utility” deeply unsatisfactory: like a giant black box in which economists throw everything that they don’t understand.

Sociology is sort of like dumpster-diving in that black box: that’s where all the interesting stuff can be found. Like the costly, irrational stuff people do in the name of culture and preferences. There are a number of different definitions of culture across the social sciences, but I see it as the broad set of social values, practices, norms, roles and expectations people have because of the setting in which they were raised, or in which they live. Nothing happens without culture, including capitalism. And this is a major insight of economic sociology: there is no one universal capitalism, but numerous local variations, dependent upon culture. (Paging Max Weber—again.) So I come from a world in which the business norm is “the customer is king”—whether or not an individual transaction actually lives up to that ideal, I can call upon it within the US and most people will a) know what I’m talking about, and b) acknowledge that it’s the ideal to which business should aspire.

Go to Germany, however, and both a) and b) would cease to apply: there is no shared cultural agreement that customers are the most important people in a business transaction. That changes everything about the lived experience of economic activity there: things that would be unthinkable in the US can happen in Germany, like the gym owner firing my friends for their service complaints.

This produces a special kind of culture shock, of the specifically economic variety. It’s not something I’ve ever seen described, either in the scholarly literature or the popular press. But I’d venture that it happens to most of us, even when we travel outside our home countries: every time you find yourself in a new country, wondering if you’re supposed to leave a tip, and if so, how much, you’re experiencing a minor form of economic culture shock. But the phenomenon manifests itself in a variety of other ways that are hard to fully appreciate until you move to that new country and start working there, buying groceries, and going to the doctor.

Having shared a few stories about the way that economic culture shock has affected me, I’d be interested to hear from you–what forms have you encountered, and what did you make of those experiences?

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“Economic Sociology” Moves to the ASA’s Contexts Website

“Economic Sociology” has been selected as one of the official blogs of the American Sociological Association, so now it will be hosted on the ASA’s “Contexts” website. The look of the site will somewhat different in order fit “Economic Sociology” into the standard ASA/Contexts style. You’ll find all the new posts, plus the old ones, at: http://contexts.org/economicsociology/

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Film Club: “Repo Man” Turns 25

The cult classic film “Repo Man” turns 25 this year, and I’d like to mark the occasion by quoting this exchange between two of the lead characters. The context here is the moral justification for taking away people’s cars by stealth and subterfuge–an activity that looks very much like simple auto theft–when those people fail to make their contractual payments. According to Bud, the wizened Yoda to Otto’s Luke, repo work not only isn’t “stealing,” it’s a blow for justice and the American Way:

Bud: Credit is a sacred trust, it’s what our free society is founded on. Do you think they give a damn about their bills in Russia? I said, do you think they give a damn about their bills in Russia?

Otto: They don’t pay bills in Russia, it’s all free.

There’s something poignant now, even charmingly retro in the post-apocalyptic financescape of 2009, about the phrase “Credit is a sacred trust.” It seems to belong to another world.

Former Federal Reserve Chairman Alan Greenspan might have been thinking of Bud when he said in a 1990 commencement address at Harvard College,

Trust is at the root of any economic system based on mutually beneficial exchange. In virtually all transactions, we rely on the word of those with whom we do business…If a significant number of business people violated the trust upon which our interac­tions are based, our court system and our economy would be swamped into immo­bility.

Prophecy, or just a gloss of the Gospel According to “Repo Man?” You decide.

As for Otto’s utopian vision of the Russian socio-economic complex, credit cards and cowboy capitalism put an end to all that. For an excellent account (no pun intended), see Prof. Alya Guseva’s recent book, Into the Red (Stanford University Press, 2008).

Meanwhile, Happy Birthday “Repo Man!”

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LOLMarkets!

Anyone reading this blog is probably aware of the LOL-fad: the addition of witty captions to photos of cats, fashion models, and so forth, which has taken the interwebs by storm.

So in a moment of inspiration, I wondered: why couldn’t we do the same for economic sociology? I mean, I know I’m not the only one who spontaneously thinks of puns that mash up pop culture with “The Great Transformation,” right? Right? [Tap, tap, tap.] Is this thing on?

If the blogosphere is good for anything, it’s for allowing microscopically small interest groups to band together and share the kind of thoughts that would be greeted with disbelief or incomprehension by others. If the Ferret Fanciers of Greater Milwaukee can do it, why can’t economic sociological punsters?

Rather than keeping those gems of humor to ourselves, let’s enjoy them together. Friends, Romans and economic sociologists, send me your LOLs!

Here’s one that came to me when I ran across this picture of the Angel of Death during the earily days of the market meltdown–I know you can do better! So send in YOUR LOLpix! Operators are standing by! 

talk-to-the-invisible-hand

“Talk to the Invisible Hand!”

UPDATE!

I knew someone was on this…ladies and gentlemen, I give you LOLFed.com, the funniest site I’ve seen in ages. Here’s today’s LOL with a snippet of the accompanying text:

sandy-weill-lol This one’s for all you crazy kids out there who said Sandy Weill’s experiment of creating a banking supermarket could never work, that its sheer size and the scale and multitude of services offered under a single roof were unsustainable, that no one management team or board of directors could possibly oversee its many arms.  You were absolutely right!

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Financial Etymology

Since today marks the end of a catastrophic calendar year in the financial markets, these snippets of etymology I ran across recently seem particularly appropriate, in a gallows-humor way.

On the origins of the term “money,” from the Latin monetas, meaning “warning:”

Here's the Federal Reserve building in Washington, DC; looks kind of like the Parthenon with a flag stuck on top where the Romans might have put a sculpture of the goddess.

Here's the Federal Reserve building in Washington, DC; looks kind of like the Parthenon with a flag stuck on top where the Romans might have placed a sculpture of the goddess.

The Romans kept their coinage in the temple of Juno on the Capitoline Hill, putting the money under the protection of the goddess. Ever wonder why so many banks look like Greco-Roman temples? That’s why. “In God(dess) We Trust!”

Before she became the guardian of the Imperial Treasury, one of her original functions was to warn the Romans of impending danger; she was known as Juno Moneta, or Juno-Who-Gives-Warning. So her role as protector of the money supply and protector of the city were conflated, leading to the modern English word “money” for all forms of currency.

On the origins of the term “securities:”

what-me-worry-715605

The Latin words se and cura combine to form this word, meaning literally, “without care.”

This conjures up MAD magazine’s Alfred E. Neuman, whose slogan seems to have been taken up by our securities regulators.

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Castastrophe Haiku Champs

The Catastrophe Haiku Challenge of December 11th brought many delights, not least of which was the realization that this blog has at least five readers (still counting myself) instead of the three I estimated. Huzzah!

Not only did the Challenge produce some fine entries (see the Comments section below the December 11th entry) but it introduced me to some kindred spirits, including one Tony Alfidi–a finance professional based in San Francisco–who has been blogging his own financial haiku (and limericks!) for some time. Check out his witty prose (and verse) stylings at alfidicapitalblog.blogspot.com.

Here are two of my favorites from his oeuvre, reproduced here with his gracious permission:

The Haiku of Finance for 12/18/08

Closing out short calls
Cash went to money heaven
Be careful next time

The Haiku of Finance for 12/18/08 (inspired by Bernard Madoff)

Smiling, lying guy
Trusted by rich investors
“Made off” with their cash

I find it strangely comforting to think of my life savings at peace in “money heaven.” I hope it’s next to “pet heaven,” so that the dollar bills can frolic with the souls of my late lamented hamster, Sunshine, and a passel of goldfish that have passed through my life.

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The Plague

Watching the financial mayhem unfold over the past weeks has been uncannily reminiscent of the early 1980s, when the AIDS virus was first discovered on American shores. The impact of the crisis has been startlingly similar to that of the deadly disease whose contagion changed the world forever juskeletons-from-dantin-manuscriptst a generation ago. As in the early days of AIDS, the sources of the current crisis are poorly understood but its fatal effects are all too evident–a toxic combination that has spread fear around the world. We’re witnessing a kind of global infection among our social and economic institutions, and may need to start thinking like epidemiologists—the scientists who fight the spread of AIDS and other diseasesin order to stem our losses.

Epidemiology, a word with Greek roots, literally means “the study of what is upon the people.” Typically, it means the processes by which infections spread through populations. But there are a number of reasons to think that an epidemiological model is appropriate to our current socio-economic crisis, and can help us make sense of “what is upon the people” now.

What can we learn by taking an epidemiological approach to the market meltdown? Three things, all of which were applicable to the AIDS crisis, too. The point is not to drum up sympathy for financial firms, which would seem to deserve little of our compassion, and certainly far less than victims of disease. Rather, these observations highlight the social processes through which we respond to spreading crises, and how those processes can make a bad situation worse.

1) Failing to act on signs of danger allows a problem to become an epidemic.

The panic spread by the AIDS virus was driven in large part by its terrifying unknowns: though its fatal effects quickly became apparent, it took almost 25 years to track down its origins to chimpanzees in southern Cameroon. Turns out that AIDS has been present in humans–who hunted and ate the chimps—since at least 1930, but it took 50 years to mature into a global epidemic.

Just as AIDS appeared in the 1980s, as if out of the blue, the collapse of the global economy has seemed similarly unexpected to many investors. After all, only a little over one year ago—in October 2007—the Dow Jones Industrial Average ended several trading days above the 14,000 mark. Who could have predicted that the index would plummet by almost 50% in 12 months, and that we’d be contemplating the bankruptcy of such institutions as General Motors?

In fact, some of the most distressing news about the current crisis is that people in the financial industry did see this crisis coming years ago, but nothing was done to stop it. Instead, that knowledge became the basis for unimaginable profits. Last spring, John Paulson (no relation to Treasury Secretary Hank) topped the list of world’s highest-paid hedge fund managers, earning $3.7 billion for 2007 after directing his firm to short-sell America’s sub-prime mortgage markets. And Paulson was no lonely prophet, crying out in the wilderness; he had lots of company. In 2006, at the same time Paulson was warning his fund’s investors about the imminent collapse of the mortgage market, brokers on the NYSE were predicting that GM would go bankrupt by 2009. Other hedge funds, like the UK’s GLG were busy making piles of cash on the basis of such predictions: so much so that the top three executives in the fund split a $1 billion paycheck for 2007.

Over the next year or two, we can expect to learn that the “sudden” collapse of the world economic system was in fact an open secret in the financial industry, and probably elsewhere. Given the close connections between Wall Street and Washington (it should help that our Treasury Secretary used to run Goldman Sachs, right?), this begs the same question that haunted America during the AIDS epidemic: what were our elected representatives and regulators doing when there was still time to prevent, or at least mitigate, the damage?

2) Putting ideology above pragmatism only makes the crisis worse.

If you were alive during the early days of the AIDS epidemic, you may recall that once the disease was identified, it was thought to be limited to gay men and IV drug users. Unfortunately, the ideology of the time turned that into a rationale for complacency: in the eyes of some who had the power to make a difference, the plague was a just consequence of high-risk behavior by a sub-set of the population who didn’t deserve help.

We all know how well that worked: just ask anyone who had a blood transfusion during that period. While then-President Ronald Reagan dithered, refusing to allow public service announcements to even mention safer sex practices that might have limited the spread of the disease, HIV infection rates exploded, reaching millions of people worldwide who had never had gay sex nor used drugs. Oops.

Reagan’s heirs have now had the opportunity to show how that “ideology first” strategy plays out when the economy gets sick. So, in the name of a theory—free market capitalism—Republicans let Lehman Brothers, mired as it was in toxic sub-prime mortgage debt, go bankrupt instead of arranging the kind of bailout or buyout that AIG enjoyed. For about five minutes, this looked like a win for the non-wealthy majority whose taxes pay for the bailouts, and a rare show of congruence between talk and action on the part of the political right. Two cheers for the Lehman liquidation!

Lining up for a "bailout," medieval Catholic style.

Lining up for a "bailout," medieval Catholic style.

The third cheer was silenced by the realization that as Lehman went down, it would take the rest of the market with it—including parts that had no direct exposure to the sub-prime crisis and were thought to be safe as houses (pun bleakly intended). The Reserve Primary fund, which had made the kind of ordinary short-term business loans known as “commercial paper” to the venerable Lehman Brothers, became the first public money market fund in history to “break the buck:” that is, since it would never get repayment on its loans to Lehman, the Reserve fund’s share price dipped below $1. Because money market mutual funds are supposed to be as secure as savings accounts, this one event caused the entire credit system to hit the breaks, hard. Since it appeared the anything could happen, and nothing was safe, banks wouldn’t even make short-term loans to each other, to say nothing of businesses and individuals. And that’s how the DJIA lost another couple thousand points. Oops.

3) As the contagion spreads, it destroys the trust needed to fight it.

Our current economic crisis could be explained with haiku-like simplicity, as follows:

· no trust means no credit—nobody can get a loan

· no credit means no capital to make payroll or build things

· no capital means no capitalism

Congress may have approved a $700 billion bailout package, but since the banks who got the money are hoarding it instead of lending it out as intended, we accomplished nothing besides adding a zero to the national debt.

How could this happen? Part of the problem was undoubtedly that the bailout came with no strings attached and no oversight—a political move which will live in infamy. Perhaps more importantly, the bailout didn’t directly address the trust problem: there was nothing in the deal to either assure banks that the risks of making loans had returned to an acceptable level, or to force them to lend despite heightened chances of default.

Moreover, banks realized, as did many others, that by allowing Lehman to go bankrupt, the US government had given the remaining firms in the financial industry a really good reason to lie about the true extent of their exposure to the sub-prime crisis. Following the Lehman liquidation, there was an undignified scramble to make firms look financially healthier than they really were, distancing themselves as much as possible from bailouts and forced mergers. They may have fooled Congress, but not the banks.


the plague doctor.

Tim Geithner's 17th century counterpart: the plague doctor.

And thus we find ourselves re-learning one of history’s most important lessons about plagues: trust is among the first casualties. Fear of each other erodes the very cooperation we most need to contain the crisis. Thus, when banks stopped lending to each other, as well as to the mortgage and commercial paper markets, they deepened the crisis in much the same way as institutions and individuals did when faced with the spread of AIDS in the early 1980s. As the virus spread, and became associated with gay men and IV drug users, those groups became literally untouchable—including by the doctors and nurses whose care they desperately needed. And when it became clear that the disease was not limited to “high-risk” groups, even hospitals turned away the infected until the practice was halted by a series of court decisions and new legislation.

Now that we find ourselves facing the economic equivalent of AIDS, we are making the same mistakes our forebears made in the face of those earlier contagions. Even those who aren’t directly harmed by the sub-prime crisis are infected with fear. What can we do differently this time? Unfortunately, the time for early action has passed. That leaves us with pragmatism and cooperation, two of the great virtues traditionally attributed to Americans. Let’s live up to our reputation and reject the ideologies and isolation that have only made things worse.

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Catastrophe Haiku Challenge!

For all three regular readers of this blog (and yes, I’m counting myself), I’ve decided to revive my Olde Tyme classroom haiku tradition. I used to offer this for extra credit to my students in the big “Organizational Sociology” and “Money and Society” lecture courses I taught at Brown University. I can no longer offer extra credit as an incentive for participation, but I hope my esteem will be a decent substitute.

To get things started, I offer my own modest entry, which attempts to boil the current economic crisis into 17 syllables:

No credit–no loans.

No loans means no capital.

No capitalism.

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Feral Economic Sociology Part II: Graffiti and Fiscal Policy

the-awesome-money-photo-milan-26-may-08

In my ongoing quest to document the under-examined world of populist economic sociology, I submit for your inspection this surrealist gem, snapped in Milan, 26 May 2007 on the wall of an alleyway.

I hasten to include the date because if the image were more recent, I would have taken it for a witty visual metaphor for the sub-prime mortgage crisis: the one-eyed pyramid representing the US government, via Fannie Mae and Freddie Mac, reeling in borrowers with the promise of easy money, only to “get them on the hook” for debts they couldn’t service.

Then again, that seems to be the modus operandi of the US government in relation to other countries, as well. The record of American presidents offering cash-for-compliance to foreign governments goes way back: for an account straight from the horse’s mouth, as it were, click here; for an anecdotal account of the practices (a bit thin on supporting evidence, in my view, but nonetheless an entertaining read) click here. The practice of withholding cash to punish non-compliance with the US agenda has an equally long history, Cuba being one of the most glaring examples.

So perhaps this graffito simply reflects the way US power is experienced overseas: as a kind of “fishing expedition” to see what other countries can be made to do in return for cash. It’s worth noting, however, that according to the OECD, Italy actually deploys a larger percentage of its GNI overseas than the US (source document):

foreign-aid-as-a-percentage-of-gni-among-major-countries

These data could be interpreted in a number of ways in relation to the graffito. Perhaps Italians see a significant qualitative difference in the way their country uses foreign economic aid, in contrast to the US strategy. Or maybe the sheer volume of money the US has to distribute overseas (in absolute terms, rather than as a percentage of GDP) leads to the perception that we can lure other nations as easily as a skillful fly fisherman working a stocked pond.

But then, what are we to make of the angelic wings on the one-eyed pyramid? Do they suggest benignity or ubiquity?

What do you think?

I also wonder why the best graffiti I’ve seen anywhere in the world–both in terms of aesthetic value and socio-economic commentary–come from Italy. I’ve seen graffiti everywhere in my travels around Europe, Asia and the Americas, but the Italians produce by far the most intellectually sophisticated and visually appealing images (see my “Socialist Snail” post below for another example). I wonder if it has something to do with Italy’s strong Communist Party affiliations, and the excellence that current and former Communist countries have exhibited in producing propaganda…a more formal medium than graffiti, to be sure, but one with similar persuasive objectives. I’ll try to find some photos from my personal collection of Chinese, Russian and Cuba propaganda posters to illustrate my theory…watch this space!

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