Categories
Finance

Fallout from the financial crisis, a decade on

Saturday marked the 10th anniversary of Lehman Brothers filing for bankruptcy, a failure that catalyzed the financial crisis. Over the past week, I’ve read some of the retrospectives. Though the looking back summons those days a decade ago when a replay of the Great Depression loomed as a possibility, I am drawn mainly to the reporting on the economy over the years that followed.

In that connection, an analysis led by researchers at the Federal Reserve Bank of San Francisco grabbed my attention more than perhaps anything else I have read. It finds that the crisis cost every American about $70,000 over the course of our lifetimes.

The reason ties to the hit to the economy’s capacity to produce goods and services in the aftermath of the crisis.

“The size of the U.S. economy, as measured by gross domestic product (GDP), adjusted for inflation, is well below the level implied by the growth rates that prevailed before the financial crisis and Great Recession a decade ago,” write the researchers, who add that “the level of output is unlikely to revert to its pre-crisis trend level.”

The economies in the U.K. and across Europe also remain well below the levels implied by rates of growth before the crisis, they note.

So how to make sense of the rosy headlines about the economy that tend to dominate the news nowadays? Clarity on that comes from David Leonhardt at the Times, who on Sunday explained how statistics like GDP and the Dow Jones Industrial Average describe “the experiences of the affluent” more than they do the economy overall.

For example, stocks are now worth nearly 60% more than at the outset of the crisis in 2007, but stocks also tend to be owned by the wealthy, notes Leonhardt. Most Americans depend for wealth on the value of their homes.

“That’s why the net worth of the median household is still about 20% lower than it was in early 2007,” he writes. “When television commentators drone on about the Dow, they’re not talking about a good measure of most people’s wealth.”

Similarly, the unemployment rate reported by the U.S. government does not include people outside the labor force, including people who are not looking for work. It’s a quirk of history that ties to the measure’s creation in 1878, when the statistician who conceived it “wanted the count to include only adult men who ‘really want employment,’” notes Leonhardt.

The analysis further shows that while the cumulative change in GDP and income is indeed up for the wealthiest 10% of the population since 2000, it has barely budged for the remaining 90% of earners.

That leads to the third piece that stays with me. It’s by Neil Irwin in the Times, who notes that the policies that sought, above all, to stabilize the banks and keep capital flowing during the crisis succeeded in containing the crisis, set the stage for the expansion that followed, and improved the ability of regulators to identify and address risks on the balance sheets of banks.

At the same time, the crisis, and particularly the bailout of the banks, probably contributed to the populism that has ensued. The problems had been there all along, “but it was the experience of the crisis, and the sense among Americans of all ideological dispositions that they were being asked to foot the bill for someone else’s mistakes… that helped make those long-simmering problems boil over,” Irwin writes.

Categories
Sports

Serena Williams wipes out

A documentary that played recently at the Film Forum, “McEnroe: In the Realm of Perfection,” assembles hours of footage of the tennis legend on the courts of Roland Garros in Paris. Over years at the French Open – the film centers on McEnroe’s battle in the final there against Ivan Lendl in 1984 – McEnroe displayed both the greatness and outbursts that defined him.

During one tirade, McEnroe, exasperated by the whir of a recorder, turns on the recordist. “Keep that thing away from me, you understand? ” he says. Pointing at the grip end of his racket, McEnroe adds, “In your mouth.”

The narrator, the actor Mathieu Amalric, notes that the fury McEnroe struggled to contain throughout his career on the court reflected a competitor who played “at the edge of his senses.” The flutter of a recorder amid the silence in the stadium during the moments preceding a point reverberate within McEnroe like an eruption.

I was reminded of that acuteness of sensitivity while watching Serena Williams melt down during the women’s final against Naomi Osaka at the U.S. Open. Williams shares with McEnroe both a game to behold and a tendency toward tirades.

On Saturday, Williams became furious when the umpire Carlos Ramos called out her coach Patrick Mouratoglou for signaling to Williams from the stands, a violation of the rules. Though the fault lay with Mouratoglou, Williams perceived it as a slight. “I don’t cheat to win,” she told Ramos. “I’d rather lose.”

Williams could not let it go. A few games later, while serving and up 2-1 in the second set, she forfeited a point when she smashed her racket on the ground after an unforced error.

A few more games later, during a changeover with Osaka ahead 4-3, Williams continued to insist to Ramos that she did not receive coaching. She demanded an apology from the umpire.

“Say you’re sorry,” Williams implored. “You stole a point from me. You’re a thief, too.” Ramos issued a third violation, which resulted in the automatic loss of a game.

Williams appealed, without success, to the tournament referee and the Grand Slam supervisor, to whom she raised a charge of bias. “Do you know how many other men do things that are — that do much worse than that?” she said, referring to the comments that cost her a game. “This is not fair.” (The Times has chronicled each moment of the meltdown.)

As we now know, Osaka defeated Williams, whom Osaka had called her idol. Ditto for the fans. The nearly 24,000 of them who filled Arthur Ashe Stadium booed during the trophy presentation. Social media exploded (what else) with criticism of Ramos and support for Williams.

Afterward, I wondered why Williams took such offense at Ramos’ warning her coach about coaching from the stands. It was, after all, a warning to her coach. And yet it became Williams’ unraveling.

Thus the flashback to McEnroe. Perhaps Williams, too, plays at the limits of everything. What for others, including her fellow competitors, might be an annoyance to shrug off, or a cue to get on with the match, to Williams it became an indictment of her character. She  would rather lose than “cheat to win,” Williams told Ramos.

Williams was neither cheating nor losing when Ramos warned Mouratoglou. And while she never cheated, she later lost a point for smashing her racket. And then she forfeited a game for calling Ramos a thief.

The ruling by Ramos on that last point seemed to be an excess. As Sally Jenkins notes in the Washington Post, he could have de-escalated, by warning Williams without penalizing her, and “let things play out on the court.”

That leaves the racket-smashing as the only one of Williams transgressions that, strictly speaking, ran afoul of the rules. And yet Williams unraveled, which cost her the match.

Like a pro skier on a downhill run who catches an edge and crashes, blowing out her knee instead of winning a medal, Williams wiped out. The edge of her senses turned out to be a razor.

Categories
News

Disinvited

Eight years ago, I attended the opening of the New Yorker Festival. The program, which was held at the Frank Gehry-designed headquarters of IAC, on Manhattan’s West Side, featured a conversation between one of the magazine’s staff writers, and, I recall, some star in the field of creating effects for movies.

Though my memory of the event has faded, I remember the strangeness that I felt milling about the reception, where guests, who had purchased tickets, mingled with one another and with reporters from the magazine.

Across the room, I spied Ken Auletta, a writer who covers the media for the magazine, with his hands in his pockets, speaking to no one. I wondered whether he and his colleagues felt an obligation to mingle. Though I didn’t ask him, I wondered whether he had been conscripted to put on a show.

I am reminded of that feeling in the wake of the dustup over The New Yorker’s disinviting Steve Bannon from this year’s festival. The invitation to Bannon, a hero of the alt-right and the architect of Donald Trump’s 2016 campaign for president, had been extended by David Remnick, the editor of the magazine, who wrote to Bannon that the magazine “would be honored” to have him as headliner.

Bannon accepted. The plan was for Remnick to interview him on stage. “I have every intention of asking him difficult questions and engaging in a serious and even combative conversation,” Remnick told the Times.

But the plan went awry. Actor Jim Carrey, comedians Patton Oswalt and John Mullaney, and director Judd Apatow all threatened to back out of the festival if Bannon appeared. Kathryn Schultz, a Pulitzer Prize-winning writer at the magazine, tweeted that she was “beyond appalled” by the prospect of Bannon as headliner.

“I don’t think an advocate for ISIS would have been invited to the Festival,” tweeted Osita Nwanevu, another staff writer. “I don’t think a literal Klansman would’ve.”

The backlash forced Remnick to reverse course. “The reaction on social media was critical and a lot of the dismay and anger was directed at me and my decision to engage him,” Remnick wrote on Monday. “Some members of the staff, too, reached out to say that they objected to the invitation, particularly the forum of the festival.”

The decision did not sit well with Bannon, who called Remnick “gutless” for withdrawing the invitation. The move also elicited criticism from some writers at the magazine.

“Journalism is about hearing opposing views,” tweeted Lawrence Wright. “I regret that this event is not taking place.” Malcolm Gladwell noted that shining a light on views we may abhor can transform a platform into a “gallows.”

Over at Rolling Stone, Matt Taibbi also blasted Remnick. “You just removed, from the interview stage, one of the few people in the country that a) knows some of Donald Trump’s darkest secrets, and b) might have an inclination to talk about them,” he complained.

The varying views seem to turn on whether you think the festival is journalism, as Gladwell, Wright and Taibbi all seem to, or a forum for the sharing of ideas, as the critics contend.

A few observers zeroed in on the tension. “The issue, it seems, is the blurry line between content produced by news organizations (i.e., journalists) and live events hosted by the same outlets,” wrote Thu-Huong Ha at Quartz.

Zack Beauchamp, writing at Vox, explained the challenge for news organizations in straddling moneymaking events such as the New Yorker Festival:

“These kinds of events are, by their very nature, difficult to manage. They need to be attractive to audiences, which means booking interesting and/or controversial speakers. The events need the speakers to show up, which often means paying them, and they might not want to walk into the lion’s den of an adversarial interview in front of a live audience.

At the same time, the interviews themselves can’t betray the core journalistic mission of the publication — they can’t somehow do reporting and brand promotion at the same time. That means the journalists onstage shouldn’t (in theory) just suck up to the speakers and sing their praises — though that’s all too often what happens — but rather should respectfully challenge their ideas and arguments.”

That, I suspect, was the idea of inviting Bannon to headline the festival. Remnick had every intention of challenging Bannon. But the forum just didn’t work, as Remnick noted when he explained to the staff that the interview would find its place in the pages of the magazine, where the journalism takes priority.

I see it both ways. Part of what has allowed me to sharpen my critique of Bannon is listening to him in interviews or reading his words. In March, I watched an interview that he did with Lionel Barber, the editor of the Financial Times.

During the conversation, Bannon admitted to being fascinated with Mussolini (he previously praised the dictator’s virility and fashion sense), glossing over Il Duce’s description of Jews as a people destined to be wiped out completely, let alone the destruction he wreaked on Italy.

In August, New York magazine published an interview with Bannon, who asserted that the financial crisis paved the way for Donald Trump.

“He’s the first guy to tell the Establishment to go fuck themselves,” said Bannon. “And we’re just in the beginning stages, and that’s why right-wing populism’s gonna win, because the left wing, you’re a bunch of pussies. The Democratic Party is owned and paid for by Wall Street.”

To be sure, the financial crisis fueled misery on both the left and right. And that some of the resentment that followed found its footing in support for Trump. But if a president who signs a tax cut worth $150 billion a year isn’t “owned and paid for by Wall Street,” I don’t know who is.

To me, the surest way to see the holes in Bannon’s theories is to hold them up for scrutiny and challenge. But I also appreciate that my experience differs from that of a person of color. As Damon Young at Very Smart Brothas writes:

Decision makers at large, mainstream publications and platforms keep inviting and providing space for men like Bannon and Richard Spencer and Milo Yiannopoulos, as if the things they have to say are riveting and engrossing, as if any novel insights can be gained from handing them the spotlight… A dive into the thoughts and inclinations and sensibilities of openly bigoted white men isn’t just old hat. It’s America’s oldest hat. Need to ask Steve Bannon about his racism and xenophobia? OK. While you’re at it, exhume Christopher fucking Columbus’ corpse to ask about the lunch menu on the Santa Maria.”

Young doesn’t need to hear more. At least not in a forum that celebrates a sharing of ideas. He knows the thing. He lives it.

Margaret Sullivan, who covers media for the Washington Post, echoed the concern, calling inviting Bannon a “lousy idea.” “There is nothing more to learn from Bannon about his particular brand of populism, with its blatant overlay of white supremacy,” she wrote. (In March, Bannon told Marine Le Pen, the right-wing politician in France, to wear her racism like a “badge of honor.”)

In his message on Monday, Remick elaborated on his reversal. “I’ve thought this through and talked to colleagues — and I’ve re-considered. I’ve changed my mind,” he wrote.

To Bannon the capacity for reflection signals a lack of guts. But Remnick’s decision to disinvite Bannon reflects something that we don’t see every day in public and never from the president whom Bannon helped to elect: A willingness to change one’s mind based on facts.