Saturday, January 17, 2009

Duffy, the suprime crisis, old news, old jokes, Richard Bitner, and the meaning of life

Dearie me, the lead footed Duffster, speedster on the road and on the page, is back in The Sydney Morning Herald, but his return is more like a low revving Trabant than a sleek Nissan G37 coupe.

While away the esteemed Michael Duffy seems to have suffered some crisis about the capitalist system - he spends his column bemoaning the sub prime crisis with the heading saying it all: Greed is good ... for a while: the thought behind the subprime crisis.

It feels like a re-hash, or old news for a Saturday, as he recycles an "interesting conversation" he had with Richard Bitner, a man who ran a subprime mortage company in Texas. The main anecdote concerns the willingness of Bitner's company to give a man named Johnny Cutter a US$100,000 mortgage, after previously being turned down twice and with scant prospect of repayment (and sure enough he quickly defaulted). In classic American fashion, Bitner crafted a new and redemptive career out of his past failures by turning writer with Confessions of a Subprime Lender.

Now all this is very old news - Harpers and The New Yorker ran several excellent pieces about micro economic behaviour last year, and there have been any number of other pieces looking at the higher, systemic issues involved. Why has Duffy decided to revive this particular corpse at this particular time, and what do we learn from his dissection?

Sadly bugger all. His concluding line: "Now, as we gaze at the scenes of economic devastation, it is still hard to see how it could have happened. Writers such as Bitner and Lewis are providing some clues".

Actually, poor hapless Duffster, it's not hard to see how it could have happened. And you don't have to search the entrails of a loan shark like Bitner for clues, signs and portents.

Long ago, John Maynard Keynes is supposed to have said "If I owe you a pound, I have a problem; but if I owe you a million, the problem is yours". This was later twisted to apply to banks, along the theme that if you were smart enough to screw a big loan out of a bank, it was the bank that had to worry about the future more than you.

My own personal favourite is Mr. Wilkins Micawber's formula in Charles Dickens' David Copperfield, a man inclined to debt and to the philosophy that something would always turn up. Eventually he came to realise: "Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery". Ah yes, loss of kingdom for want of a sixpence.

Maybe you'd prefer Jackie Mason: "I have enough money to last me the rest of my life, unless I buy something". Or Benjamin Franklin: "Creditors have better memories than debtors".

Okay, it's Christmas cracker humor, and Christmas now is also long past. What's perplexing is that the Duffster sounds so perplexed by it all. He really is starting to sound like a left wing radio journalist for cardigan wearers tuned into Radio National, confronted by the demonic face of capitalism and human greed.

He really should read up on the tulip mania that swept through Holland in the seventeenth century (there's a nice Wikipedia article here), or the South Seas bubble of the eighteenth century (a nice Wikipedia article here), or maybe he should try re-reading that hero of the right, Adam Smith, in a bid to re-think the current fetish for free markets (for a brief overview see here) - especially as current markets are not free, just poorly regulated and ineptly managed. 

The financial markets in particular boast highly paid skilled workers intent on ways of defrauding people in legally acceptable ways, while real estate and shares encourage gambling in ways which Betfair can only wonder at as it tries to whip up enthusiasm for taking a plunge on 20/20 cricket.

But after discerning some clues as to why there's a been a financial meltdown, what has the Duffy learnt, what does the Duffster suggest going forward? Financial regulation, a return to the basics in the financial market? Punishment of the fat cats who presided over the catastrophe? Or in the Republican way, blame the poor people who were persuaded they could take out a loan and live the American dream, with encouragement from the Bush administration?

You've guessed it. Nothing, nada, zip. So hopeless it's beyond the feeble. So I guess we have to resort to Monty Python regarding the meaning of life: "M-hmm. Well, it's nothing very special. Uh, try and be nice to people, avoid eating fat, read a good book, get some walking in, and try and live together in peace and harmony with people of all creeds and nations. And, finally, here are some completely gratuitous shots of penises to annoy the censors and to hopefully spark some sort of controversy, which, it seems, is the only way, these days, to get the jaded, video-sated public off their fucking arses and back in the sodding cinema".  I'll save the shots of penises for later if the readership figures of this blog fail to improve. But the thing's named after Michael Duffy and he's a duffer! Help!

So to this week's score, and it's a sombre, sad slow January day for the Duffster:

Willingness to regurgitate old news on a slow weekend in lotus land: 11
Actual insight into the financial collapse, apart from noting that greed might be involved: 0
Willingness to trade off on another writer to fill up a column: 11
Willingness to actually delve into the behaviour of said other writer: 0
Failure to carry out any New Year resolution to write in a livelier, more relevant way on issues confronting the world: 11
Willingness to suggest somewhere in the column that he will soon try harder: 0
Willingness to write about capitalism and economics while seemingly only capable of myopic misunderstandings: 11

Ah well, one column, like a swallow, doesn't make for a summer. And anyway there are many more loons out there on the pond, croaking for our attention.

No comments: