Curry

This feels like something of a tangent (from what?), but I thought of it today so I thought I would post it. It might be edifying. One of my long standing pet-peeves is the word 'curry'. 'Curry', as will be shown, is a colonial neologism that is as vague as it is inauthentic. Currently it seems to refer to any 'soupy' Indian dish, or more generally any dish that uses a mix of spices, and so, practically, to all of "Indian" cuisine (by which most people mean Punjabi cuisine). And also to Thai food, for some reason.


Let us look into the history of the word, shall we:

Most people in the world today know what a curry is - or at least think they do. In Britain the term ‘curry’ has come to mean almost any Indian dish, whilst most people from the sub-continent would say it is not a word they use, but if they did it would mean a meat, vegetable or fish dish with spicy sauce and rice or bread...

The origin of the word itself is the stuff of legends, but most pundits have settled on the origins being the Tamil word ‘kari’ meaning spiced sauce. In his excellent Oxford Companion to Food, Alan Davidson quotes this as a fact and supports it with reference to the accounts from a Dutch traveler in 1598 referring to a dish called ‘Carriel’. He also refers to a Portuguese cookery book from the seventeenth century called Atre do Cozinha, with chilli-based curry powder called ‘caril’...

The one thing all the experts seem to agree on is that the word originates from India and was adapted and adopted by the British Raj. On closer inspection, however, there is just as much evidence to suggest the word was English all along...

In Richard II’s reign (1377-1399) the first real English cookery book was written. Richard employed 200 cooks and they, plus others including philosophers, produced a work with 196 recipes in 1390 called ‘The Forme of Cury’. ‘Cury’ was the Old English word for cooking derived from the French ‘cuire’ - to cook, boil, grill - hence cuisine...

The development of the curry industry in Britain has been peculiarly Anglo-Asian such that many people brandish ‘authenticity’ as if it were the Holy Grail. According to Camellia Panjabi “Ninety nine per cent of Indians do not have a tandoor and so neither Tandoori Chicken nor Naan are part of India’s middle class cuisine. This is even so in the Punjab, although some villages have communal tandoors where rotis can be baked. Ninety five per cent of Indians don’t know what a vindaloo, jhal farezi or, for that matter, a Madras curry is”.

Another, similar account:

The notion of a curry is what the British during their rule in India referred to when eating spicy food. Indians in India would never have used the word curry to describe all sorts of dishes. They would use individual names reflecting the regional variations of countless curry dishes. The British in India created their own spicy dishes which were diluted versions of original recipes that the cooks were ordered to make to suit European tastes...

Every social event paid special attention to the food and the British Memsahibs ran households that included chefs and cooks. Many of them were highly trained to cater for the western palate...

Also with more and more people from the sub-continent coming to live in the UK, there was a surge in popularity for spicy cuisine. There was an influx of people from the Indian sub-continent coming to live in the UK who were Commonwealth immigrants welcomed into Europe to deal with the labour shortages that were then faced by several industries. Many Asians brought with them the exotic flavours of home. It was during this birth of multiculturalism in Britain that post war curry became a phenomenon. It is now part of the fabric of British tradition and culture and looks like it is here to stay in some form or another, be it formica topped or fine dining...

In sum, at best the word 'curry' derives from a Tamil (ie, south Indian) word referring to a specific or specific set of dishes which was taken up by colonialists and used rather liberally in general reference to any number of specific dishes throughout India, and is now used to refer is such a vague fashion to north Indian hybrid dishes made by immigrants in England. Or, interestingly, it has its origin in Britain or Europe itself.

So, given that I don't consider myself very Indian and am certainly not interested in recuperating (read: reinventing) Indian 'authenticity (read: nationalism) from the diaspora, why does the misuse or at least ignorant use of this word get under my skin so much? Part of it has to do with my annoyance (to say the least) with the failure of people in the west to understand the cultures which they appropriate. In this case it has to do with the inability of people, starting with Dutch and British, to distinguish between the many types of cuisine and the specific dishes in those cuisines. Indeed this was even extended to Thai cuisine, and made even more ridiculous by adding color prefixes ( 'red curry,' 'green curry,' etc.) Maybe I see this 'indifference' analogous to the inability of these same soldiers and traders to distinguish among the people of India (the first state-organized fingerprinting identification systems arose in India for this reason). Maybe this also reminds me, affectivly if not analytically, of the all too frequent confusion of me with almost any other person of Indian descent (I could relate many memorable incidents here, but I'll choose the time when someone in my freshmen dorm to whom I had spoken with many times came up to me one day and for some reason started a conversation about the student government, of which I was not apart. It took about 5 minutes for me to realize he thought he was speaking to a different person).

Even if I have no stake in Indian authenticity, I am still annoyed by the pretension of authenticity. I'm also uncomfortable in assigning this refusal of specificity and pretension of authenticity only to 'westerners,' more frequently known as 'white people,' which would be unfair. On the other hand, there is a colonial history here, and one aspect of these articles I find interesting is the way in which food produced in the colonies and then by colonial immigrants was developed in an imperial history spanning several hundred years. Not an innocent history, mind you, not a simple 'fusion,' but one part of a broader cultural assimilation, and now perhaps a more global assimilation. Food and cuisine is always evolving, but it is also interesting to think of it as stamped with certain power relations (now manifested by the global food industry, Monsanto and the like); this is something I'll have to research more.


ps. and what the hell is "curry-wurst"? sigh...

Our Transnational Mercenaries

One of the most, if not the most, destructive wars in European history, the thirty years war, was fought primary with mercenary armies. About 1/3 of the population of German states were decimated by free-lancing armies whose raison d'être was in fact raping and pillaging. This led, basically, to our current system of sovereign nation states, each with its own army, which eventually began to take on the structure of secular theology known as 'nationalism.' While I think overall the case that we are entering into a post-national or trans-national period of globalization is somewhat exaggerated, one interesting case is the phenomena of contractors in Iraq and Afghanistan. While these contractors are international corporations without ties or obligations to the nation-state from which they originate (like paying taxes...), they are also companies that are through-and-through creations of what one might prosaically call 'real america.'

When the role of these contractors is so great that their profit becomes plausible explanation for the war itself, accusations such as the ones that surfaced against Blackwater (now Xe) this week seem more business as usual than shocking exception. In case you haven't heard, they allege that Blackwater's founder Erik Prince arranged the murder of individuals who were snitching to the feds about the company, and threatened many others with violence. And that the company was involved in illegal trading of illegal weapons. And that they used child prostitutes. And that they had a vision of "christian supremacy" in which "going to Iraq to shoot and kill Iraqis was viewed as a sport or game," Iraqis who were more commonly referred to by Blackwater personnel as "ragheads" or "hajiis. Personnel who used "call signs based on the Knights of the Templar, the warriors who fought the Crusades." What no one has mentioned is that Prince, who "views himself as a Christian crusader tasked with eliminating Muslims and the Islamic faith from the globe," bears something of a resemblance to Gary Oldman's character from The Fifth Element, the wonderfully titled Jean-Baptiste Emmanuel Zorg.



















Anyway, so, ok, maybe that list of transgressions is a little more than business as usual. But, really, if you think that, you should tell one Barack Obama, who continues to pay said company - to the tune of $20 million for August alone - for such vital services as "Air Charter for Things." Things! We must get those things to Afghanistan at once, for how would we wage war without things. Maybe things like banned ammunition that explodes after penetrating the human body. Moreover, it is likely that the 'end' of the war will likely mean a continued US presence, especially in the form of contracted personnel. We might not be there for a million years, but that's only because the US won't be around for a million years. Blackwater, on the other hand, might survive its nation's demise.

If I have a point, it is this: to whom does Blackwater/Xe owe its loyalty? They are a transnational, for-profit, mercenary army fighting a transcendental, religious war. On the other hand they seem to be staffed entirely by Toby Keith's inbred cousins. Are they children of the post-9/11 nationalist hysteria, or transnational profiteers adept at exploiting such hysteria? Would Xe mercenaries switch sides for the right price? That last one is doubtful. I don't think that Blackwater as a transnational company can escape its national roots, but at the same time these roots are in a nation that is silently discordant, a nation whose incongruities and irreducible differences are starting to show. In this context, Blackwater's trancedental war against Iraq and more local operations, say their deployment to New Orleans during Katrina, represent nation-state hegemony gone international, what one might call privatized imperialism.







ps. I'm reasonably sure that tricky is now Erik Prince's assistant as well.

blogging

To be perfectly honest with you, dear reader, I don't have a clear sense of what this blog is about, or what I'm trying to do with it. The title refers to something my friend Allison and I would say to each other while trekking around San Francisco (ie, 'working from home'). We would be talking about some random idea, one that we would likely never pursue (as is the fate with such ideas), and then say, one to the other, "that could be a thesis." One such idea was to have a blog of this title to keep track of these idle thoughts. Funny now that I must find a topic for an actual thesis. Anyway as you can see the blog has turned into this plus a reposting of other stuff I find on the internets, mostly of a political nature because that's what I do on the internets.

Which is to say the blog isn't cohesive in any sort of way. At this point, I think the 'purpose' of it is to have an escape valve from academia, a place where I can develop my writing, which will inevitably tend towards ('academic') abstraction and cultural commentary while retaining a desire at least to connect to a larger audience. But the key to develop a readership, even if those readers are mostly people I personally know, is to post frequently, and so in between longer pieces I think I will continue to relay links, videos, and stories that find interesting, with my somewhat superfluous commentary. In fact I think I read in Harper's that 94% of blogs have not been updated in the last four months. Anyway, I don't know why I'm telling you this, dear reader, as this particular post falls in neither category. Oh well.

The Othering of Cliche: Twin Peaks

So what's it like to live in the world we have lost, a mimetic world when things had spirit-copies, and nature could thus look back and speak to one through dreams and omens, nature not being something to be dominated but something yielded to or magically out-performed, and people were born mimics?

-Michael Taussig, Mimesis and Alterity

Recently I've been rewatching David Lynch/Mark Frost's Twin Peaks with someone who has not seen it before (if you haven't seen it but plan to, you should probably stop reading). I remember watching bits and pieces of it when it was first on, but not really comprehending what was going on, and later in college watching the whole thing, one episode a day for a month (a friend had all of it on VHS at the time). I'm about fifteen episodes in, right after Bob leaves his host, and this is where I'd like to stop, given the compromised and incomplete nature of the rest of the show.

There are many quite obvious interpretive entry points to the show. It's immediate appeal I think can be found in its quirky and often very funny characters, it's surrealist elements, and the pervasive sense of atmospheric dread. This last element owes its strength to the eerie soundtrack as well as to the omnipresent symbolism: fire, trees, owls, the color red, and spinning circles (the last being the most subtle and my favorite; how many scenes begin with an ominous, panning camera, moving in a circle).

Maybe because he's working in television, Lynch builds a symbolist Lego set - it's all too easy and fun to make associative connections between, say, Ben Horne's greedy (and conflagrative) destruction of natural resources with the rape and destruction of Laura Palmer by one who likes to 'play with fire' (by the way, one aspect of TP that I'm not sold on is the poetry...). And then there's Laura herself, who neatly plays the structuralist role of referent, that which everything in the show depends on and revolves around but who is dead: she appears only as a beloved if elusive memory whose 'truth' engenders (so to speak) both mourning and a play of signification that far exceeds her. She is the absent, deferred secret that allows for the presence of the drama and comedy of the show.



The part that intrigues me now, though, is perhaps my interpretive crutch for most late 20th century art, which is the issue of cliche. In considering this, I'd like to respond to what I think is a misreading of the show by Jonathan Rosenbaum in his essay Bad Ideas: The Art and Politics of Twin Peaks. Rosenbaum accuses Lynch of a "nostalgic regression...to the worst aspects of the Eisenhower era," namely an obsession with 50s small town America and a puritan view of sexual ethics (why shouldn't already sexualized perfume saleswomen get paid for this very same sexualization, one might ask).

It is certainly true that Twin Peaks plays a Norman Rockwell hand: James (Dean?) and his motorcycle, the diner, the small town conviviality, the prom queen and the football captain (Laura and Bobby), Harry S. Truman as sheriff, the best coffee and cherry pie. Not only that, but there is a heavy dose of conventional Christian ethics and aesthetics: the white and black lodges, red as a scarlet symbol of danger, the goodness of an ideal, pure Laura and the wickedness of her sexual exploiters, Leo et al included.

But what Rosenbaum misses that is that all of this does not imply the reality of small town America, but is rather a (quite overdone) representation of an idea of 50s small town America, one that Lynch uses only to critique via a surrealist apparatus. Here, James the innocent bookhouse boy motorcycle rebel is no more 'real' than the absurd yet prophetic Log Lady; both exist at the mimetic level of caricature, representations of a representation, mimesis of mimesis, or, in other words, kitsch. They are cliches, the same imaginative cliches that Orinn Hatch and co. have used since the 80s to justify a reactionary moral(ist) politics.

Lynch, on the other hand, uses these cliches only to undo them in true surrealist style. Lynch does not attempt to (only) expose the reality 'behind' these reactionary cliches. Rather, he demonstrates their arbitrary and melodramatic character by both showing the hypocrisy of their construction (the same as that shown by Mark Foley, Larry Craig, Mark Sanford, Jon Ensign, Newt Gingrich, and many others) while also convincingly pairing them with a menagerie of surreal characters and situations that expose the psychic and imaginative conditions of possibility for these cliches in the first place.

And yet despite the obvious arbitrary, "constructed" nature of this world, we, like the characters, find ourselves continually drawn to it, wanting to believe in its better parts despite ourselves. If Lynch creates moments of unexpected True Love, cues the saccharine music, and yet still draws us in, it is because we too live in this world, a world of mimetic representations that are not our own and that we yet desire. Like Warhol, Lynch does not attempt a radically alter critique of the sovereign representations of modernity; rather, he makes representations of these representations - kitsch - in order to both undo them and explore our desire for them. In exploring the 'secrets' of Laura Palmer, what Lynch ends up exploring is what Michael Taussig calls the "public secret" that sutures the real to the really made up, the "facticity of social fact."

The unintelligible crisis, part III

So, part of what I like about this conversation is that it is taking place with friends who are not part of my little corner of academia. Intelligibility is something that occurs or does not occur not only across disciplines but also social spaces and friendships.

In that vein let me try to clarify some of the confusions elicited by part II. The debate was taken to be an ethical one. It might be true that we may have to reward some of the people who got us into and profited from this mess, but it would be ethically worse to punish them while the world collapsed. To use Buffet's metaphor, the patient is on the table, and we must put aside debate, do what is necessary, and save the patient's life (or pearl harbor has just been attacked, and we must put aside debate, and act to secure the nation (by interning Japanese-Americans? By nuking two cities?)). In other words, we are in a time of crisis. Rather than take issue with this ethical situation as it is, I am more interested how we come to understand ourselves to be in this particular ethical situation. That is, in what ways is this crisis made intelligible (or is 'crisis' itself a mode which helps us understand and come to terms with a situation?)? How is a particular ethical situation narrativized and deployed, and in what ways does it direct political energies?

These registers were confused in the previous post. The distinction I drew between a private ethics and a public pragmatics was probably also not helpful, because what I was trying to get at the way in which (multiple and shifting) frames of intelligibility push various discourses and affects to its margins. I think my basic contention was that, while I am in favor of an anti-ideological, ethical pragmatism I am equally suspicious of a discourse of pragmatism that claims to be apolitical and unideological. The irony of our particular situation is that the pragmatic, the thing we must do to save the patient on the table, comes to us not by reason but by faith in a technocratic class and network of institutions that have shown themselves to be anything but pragmatic or apolitical. But maybe this is too top-down. Perhaps we can say something like: from the perspective of someone who beleives that the government is inherently bad at running big insitutions like banks, that history has shown this, emprically, any suggestion to nationalize the banks will appear impractical. In turn, people who suggest such an option, even if credible, mainstream, and numerous, will appear to be emotional ideolouges.

Anyway, all of that was intended to be preamble for what I had thought was my main point, though as I come to this point I find that I have the least to say about it.

--
All that I wrote a few days after 'Part II,' and then some version of life got in the way of me writing more in this blog. What motivated the original post is lost to me now, but I think what I wanted to do is think a more about what it feels like to be in the middle of an economic crisis. A refrain I heard a lot throughout the winter from all sectors was that no one understood the economics of the crisis, not even perhaps the bankers and traders that facilitated the crisis. What is it like, then, for us to have a public debate about something that we don't understand? What sort of qualified faith do we have to have, and in whom? Or could we, with enough patience and study, come to master the inner workings of the system?

I think these concerns came from an article I read linking neo-liberal capitalism (since the 70s or so) with a sort of unintelligibility, a feeling that the system of interconnected markets had grown so complex and so global, that it was impossible to apprehend in its totality. In any case, now that I look at them, I think the posts themselves and the comments are a performance of the types of reasoning one uses to talk about something absent any claim to expertise.

I have now ended this topic in my blog.

Some links on the way out:

About the banks influence. Goldman in particular. On the Wall Street Journal, of all papers, criticizing Summers and Geithner. And one on Joseph Stigliz.

The unintelligible crisis, part II

So as I mentioned in part I, this particular set of thoughts is a response to this email from a friend. The economic "analysis" there is presented largely in terms of the current debate, a sort of summary of what the average person has access to. But that's not really the most interesting part of my friend's email. Rather, I think the email sets up the debate in ways that are very familiar and common-sensical, and I'd like to interrogate that a bit. I don't mean this sound like a meta-level critique of what was probably a tossed-off letter; rather, I think the assumptions inherent in the email very much speak to our limit to really think this current crisis.

So I will quote the ending (the rest of the email you can find in part I):

I think I'm in a funny position because ultimately I believe capitalism is immoral and support radical changes to our economic system. At the same time I am a pragmatist and recognize that our financial system has created the most successful economic machine in the history of the world, that it serves a function to benefit human welfare (albeit imperfectly) and I'd rather have it continue than collapse altogether, or be changed imprudently for moral reasons without pragmatic consideration. Humanity hasn't been smart enough to figure out an economic system that is both functional and ethical. Eventually we will, but there's no point in breaking the old machine until we've the replacement ready.

Ethics vs. Pragmatism

The core message of the email is something like this: I don't know which economic plan is best, because I don't understand any of the plans or what's going on with the economy. On that issue I will have to defer to the experts. And if they say a given plan will work, then we should do that. We may feel that it's not right, that the wrong people are benefiting, that it's unethical or even immoral, but those are private concerns, to be debated amongst ourselves, and should not impact sound policy.

Again I don't mean to caricature Brett's email in any way. Obama said the same thing in his speech to congress:

I know how unpopular it is to be seen as helping banks right now, especially when everyone is suffering in part from their bad decisions. I promise you -- I get it. But I also know that in a time of crisis, we cannot afford to govern out of anger, or yield to the politics of the moment. (Applause.) My job -- our job -- is to solve the problem. Our job is to govern with a sense of responsibility.

A division has been created here. What Brett calls "ethics" have been made private and personal, an interesting topic of conversation, perhaps, but not a basis for how we must act. We may sense an injustice in this economic plan, may feel that our society is unequal, unfair, but these feelings are configured as just that - feelings, emotions - a populist rage that can be the object of social analysis but will not be taken seriously. These feelings are at best irrational, but more likely those of a child who feels wronged. "Life isn't fair," they tell us at that age, with a condescending smile.

On the other hand, what Brett calls "pragmatic" is what becomes public. Away from the irrationality of ethics, away from the pathos of justice, the pragmatic is simply what will work. It emerges at a time of crisis but asks that we don't change too quickly. It occurs through vigorous rational debate in the public sphere, but insists that debate refrain from a recourse to politics. Rather, in this case, we defer to the economic experts; even Obama is imagined as simply a communicator. So here the economic pragmatic becomes naturalized - there are economic laws that stand apart from the ideologies of politics, and we must listen to those best equiped to understand those laws: the Timothy Geithners and Larry Summers, the smartest guys in the room, the absolutely competent, the ones who have the best interests of the country at heart.

After eight years of an administration that never listened to the experts, on climate change or stem cell research or interrogation or security or war or the economy or anything else, this sounds like a convincing argument. But you can see what has happened here. We have claimed to have evacuated politics from the public sphere - but is this ever possible? Isn't the public inherently political? To be a little more concrete, Brett and I may or may not trust Warren Buffet or Paul Krugman or any number of other people, but there is one group I certainly do not trust. Following Simon Johnson in this interview, if we described the way policy has been formed in this country for the past thirty years, the word to describe our political system would be fairly simple: oligarchy. The corporate super-rich have had an inordinate influence on the public sphere, and it just so happens that these are the exact same people who will benefit the most from this bank bailout. This isn't (just) a matter of personal distaste - the types of policy options that are being presented, and the terms of the debate, are all expressions of power relations, and right now there is a class of people who still have an extraordinary presence in Washington. Timothy Geithner and Larry Summers are the very people who deregulated the banking industry (as well as the energy industry, leading to the Enron fiasco), have profited from that deregulation, and they still have deep ties to the industry.

Economic "laws" are not immutable, nor is the creation or change of an economic system something that occurs against a neutral, apolitical backdrop. Rather, it is always shot through with power relations. Our current system is unethical because it is not functional for everyone, or for most people, and I would argue that this is precisely the point. Currently, a few people benefit, and those people are not citizens among citizens, but are inordinately powerful. I do not want to change an economic system overnight; I am not a revolutionary. But if there are any Friedmanite "distortions" here, it is the super-powerful super rich, and those people must go.

Meanwhile, even if we do away with Bush era ideology, the ideology of privatization, perhaps it would be wise to publicize something else - this private conversation we've been having, about what is ethical and what is just. It may require that we disavow our love affair with functionality and efficiency, but I nevertheless think that it would put our collective and individual actions on firmer ground.

One final note (and yes there will be a Part III - I'm very loqacious about all of this somehow): the idea that many people have to nationalize the banks is not at all radical. Nationalizing here is at most a momentary socialism, but more likely just an organizational tool. The new banks will be resold to private investors, but just different private investors. It is simply a way to reintroduce competition while keeping everything else about late capitalism. That there is such resistance to this option indicates to me the foothold a very small group of people have in our political sphere. It is really 300 rich people defending their position against 300 other rich people - but then oligarchies tend to be parochial in this way.

The unintelligible crisis, Part I

I've been having the beginnings of a debate about the bank bailout with a friend. I sent him this criticism of Geithner's plan by Joseph Stiglitz and he sent me the below email in response, which I am now publishing in public with little guilt, mostly because I don't have many readers. For context, know that this friend is my oldest friend (since kindegarten) and also one of the smartest people I know, so we've had many discussions and debates like this over the years...

His email (without the end, which is quoted later):

So this guy could be right about all this but also he could be wrong, and i think the truth is that people like you and me just aren't really going to be able to know and judge that for ourselves. I don't know the details of the Geithner plan, and even if I did I wouldn't understand it. There are ethical issues we may have opinions about, but for the details of whether or not a particular plan will work I'd have to defer to those who know better than I. And certainly a ethical judgment may depend on assuming that a particular plan will work or has the best chance of working of any plans we have and can hope to enact in a reasonable time.

So, on an ethical level, you and I might differ on the idea that we should let bankers who got us into this mess profit hugely, with minimal risk to themselves, at the potential downside of taxpayers -- if that's what it takes to get us out of economic crisis. If a plan on those terms will work, and we don't have a better idea that we think will work, I say do it. It stinks rotten that the villains get a paycheck, but it's better than the alternative of our economy falling apart and everyone suffering for it. Now I don't know if this plan will work, or if we have a better plan, but that's where my ethical expertise is outstripped by my economic ignorance and I'm forced to just listen to people I trust.

Maybe I should trust Joseph Stiglitz. But I don't anything about him. He's got a Nobel prize, but so did the guys who ran Long Term Capital Management. I do know something about Warren Buffet though and I do trust him. Here's what he was saying back in October
http://www.charlierose.com/view/interview/9284

And a bit more recently:
http://www.cnbc.com/id/29595047

Ok, first, let me say why I am concerned about the Geithner plan, based on the limited research I have done, largely through the popular media. In addition to the Stiglitz op-ed, I would recommend this episode of This American Life as a good basic primer on how banks work and why they are in trouble (to the degree that it sort of obviates the need for this post...)

I would NOT actually recommend either of the Warren Buffet interviews linked to in my friend's email because he doesn't go into much detail, least of all about the bank bailouts. He seems to want to stay politically neutral and in support of the current administration (which changes from the first to second clip). This also rather comically leads him to incessantly mention pearl harbor in the second clip mostly as a way of saying, "yo, republican CNBC douchbags, STFU."

If in the below argument I misunderstand some fundamental aspect of the sitution or of economics, please know in advance that I don't actually know what I'm talking about here.

The one thing that Buffet does do is come out in favor of marking these "toxic assets" to market. So, following from the example in the TAL episode, let's say a bank owns a house which was originally purchased at $100, but is now worth $50. The banks actually wanted the government to buy that house above market value, like at $90. Then the banks would be fine, taxpayers not such much. Buffet won't say what he does like, but he does say he is in favor of marking to market, that is, setting the price to what it's worth, in this case $50, which the government would just buy en masse. When the banks are literally walking away from these things, it seems that this would at least stop the bleeding, as it were (which also shows how arrogant they are in not wanting to mark them to market). So that's a band-aid, and I guess still better for the banks then the value of the asset slipping even farther, but in this situation the banks have still lost tons of money, and therefore are insolvent, and certainly can't lend. Stiglitz explains:

The main problem is not a lack of liquidity. If it were, then a far simpler program would work: just provide the funds without loan guarantees. The real issue is that the banks made bad loans in a bubble and were highly leveraged. They have lost their capital, and this capital has to be replaced.

So, the question is, how to recapitalize (eg. save) the banks, espcially since both the "ethical" and "pragmatic" imperative seems to be marking these assets to market. I think TARP tried to do this just by giving them money, but it wasn't enough, so they are still not solvent and thus not lending. Well, one option, supported by Johnson in this excellent Bill Moyers interview as well as by many others, is to have the FDIC nationalize the banks for a little while, then sell them to some private group. The so-called 'swedish model.' This article explains what that might mean:

The bank itself is shut down and its assets are transferred to a new entity controlled by the FDIC. The FDIC attempts to maximize the value of these assets, typically by selling them to another bank or banks.

I can understand this - the problem becomes more an organizational one than anything else. As indicated by the TAL episode, the government overpays on the toxic assets to recapitalize the banks, but then owns the bank. They can then break it up, reorganize the good stuff into a new bank, and sell the new bank to other rich people. They can hold onto the bad stuff until the market turns around, however long that takes. Moreover, from a "pragmatic" perspective, it doesn't involve breaking nor even substantially changing the system as it is, even though the banks themselves might be broken up and the current management fired sans bonus.

So having read all this, what do I think of Geithner's plan? Well, I don't know. The way Stiglitz describes it, it's actually not a mark-to-market program. In the example he gives the public-private trust buys the asset at 50% above its market value (this is not in his criticism, just in his description of how the program would work). So in his example a house that's worth $100 would be purchased at $150. This works to recapitalize the banks (hopefully), and if all goes well (say, the asset is really worth $200) the government would get their loan back plus a little extra money on the side ($138 in the loan, and $37 on the side). If it doesn't then the government actually loses more money than the asset was originally worth, and has to then pay out $138 to the private investor.

In fact, now that I think about it, that's crazy. Again, maybe I just don't understand what I'm reading, but wouldn't it be better to just overpay for the asset upfront? That is, if they want to overpay and buy a $100 house for $150, why not just put in all the money right away, instead having an investor come in for a paltry $6 in equity? The only problem with that is that it's a lot of money upfront...but won't they have to pay all these private investors at some point in the future when at least some of these assets go bust?

And aren't these assets already bust? In the proposal the banks sell us the worst of what are already called "toxic" assets. It almost seems like they're thinking that once investors start buying, the market will go up again, thus recreating the housing bubble, except this time it won't be a bubble. It'll be real. What? One thing Buffet does say in the CNBC interview is that there isn't a short term solution to this housing thing. What he means is, we need people. Grown-ups. With jobs. And money. To live in those houses. Why do they figure that the housing market is basically ok? To paraphrase a poet, sometimes a piece of exurban McMansion trash is just a piece of exurban McMansion trash.

Again, I could easily be horribly not understanding something basic about how all this works, but I think I've convinced myself. Geithner's plan seems to take the worst of all the possible options on the table, and somehow makes it crappier. Instead of going with the simple plan that has been known to work, he's inventing some elaborate band-aid that puts in faith in a bubble that has just collapsed and the very people who created that bubble. WTF?

But, as I mentioned, that is the most superficial part of what I wanted to say in response to Brett's email. Because, afterall, all I've done is the most basic of internet research to come to this conclusion. As he says, I am still trusting the opinion of experts. And this is what I want to talk about in part II...