Imagined Property - thoughts from out there

Cycling in New Zealand...

I spent the morning writing a letter to a radio show on cycling...  here it is...

A big part of the problem is the culture of the car.  I don't know how long New Zealanders have loved the car, but when import duties were taken off cars in the late 1980's, for the first time everyone could have their very own car.  

New Zealand saw a huge increase in the numbers of cars on the roads in a very short period of time. No new roads but lots and lots of new and used cars filled the streets.  The congestion made driving much less fun but did not seem to lesson the ardor.  These days most New Zealand households have at least one car - some have one car for every adult member.  Many people are deeply attached to their cars - some even define themselves by their cars. The bigger and better the car, the more important they feel.   And driving fast - why the better the car and the driver, the faster you should drive.  Only the old and infirm would drive slowly - the speed limit is the declared minimum.

Quite simply,  I would gently suggest that most people in New Zealand seem to believe that driving is a god given right - and that it is good.  

Thus cars, not pedestrians or cyclists, have the right of way on the road.  Pedestrians know better than to expect a car to slow or swerve to avoid them - it is up to the pedestrian to take care. Even when a car crosses the sidewalk into a parking lot, pedestrians stop and wait for the car to pass. People accept that the car's progress is more important than their own - perhaps as in many Third World cities where the well born ride while peasants walk.  

Thus planners design roads for the car.  Where space is limited, the road is designed for the car alone. Throughout Auckland sidewalks and cycling lanes along the roads often narrow abruptly or simply end in order to make more room for the car.  The walker or cyclists is left with no option but to fend for themselves amongst the speeding cars on a busy (and dangerous) stretch of road.

Add to the legal and moral sense of the cars' priority, a bit of aggression and busy roads become battle grounds.  The guy with the biggest car (or truck) wins.   What chance do cyclists have?  (Any wonder the rich buy SUV's)

Twenty years ago I rode regularly from Kingsland to downtown Auckland.  But I don't anymore - cycling in Auckland has become much more dangerous.   The last time I tried to ride to work just before Christmas, I was very nearly killed.  So now I ride very early on Saturday or Sunday morning.  Even at that hour, every time I ride there is at least one or two incidents - near accidents - because drivers either don't know how close they are to me as they pass (or don't care) or don't see me and turn left or right forcing me to brake hard.  More often than one should expect, drivers - usually young men - yell as they pass (often advising me get off the f**ing road).  Sometimes they even throw things at me.  I try not to return the gesture or shout anything back as twice  (both times out by the airport) drivers have stopped and gotten out of their cars to continue to abuse me.  Sure you can report the drivers if you catch the license plate number, but the police do not pursue the matter (they likely feel that they have better things to do).  And then there is the sense that drivers blame the cyclists for any problems - as if the cyclist simply by riding on the road was provoking drivers to behave badly.

It does not have to be this way.   There are a number of cities, world class cities, where cyclists are accepted, even respected, as road users.   I come from Vancouver Canada  where the car does not have a legal right of way.  Cars will often stop to let pedestrians and cyclists, through.  There are, of course, accidents because cars are very dangerous machines.   But it is a lot better.   And it could be better here.  If only the cult of the car was toned down, everyone would be able to enjoy the city so much more.

And this should not be an impossible task.   I suspect that many people living in the city are getting tired of the car always winning.  And there are many drivers who already know and have the necessary skills for a world in which the car does not take precedence over pedestrians and cyclists.  For a number of years I walked a dog.  Every morning I crossed a particularly tricky intersection and at least once or twice a week I saw a very near miss - between cars.  For every driver who drove as if the road was for him or her alone,  there was a driver who was paying attention and looking out for others.   The 'others', the non car drivers, are numerous and increasingly 'out there'.   I regularly see the "walking buses" taking kids to school.  And then on the weekend I see hundreds of cyclists attempting to enjoy the road.    I am not sure how we can convince some people to take the car less seriously but it is critical for the life of the city that we do.   It is not by coincidence that the most livable cities in the world are those designed to meet the needs of people, not the car.   Making cycling safe would be a big step in improving the quality of life in the city for everyone - including car drivers.

Obsessing about the financial meltdown...

First things first.  Last week I wondered about what to call the present social / economic event.  And wouldn't ya know it...  there has already been a contest on a name.  The Nation launched a competition last June to find a name for these times - or the period from the late seventies to the present. There was an impressive panel of "progressives" as judges, including the Barabara Ehrenreich, Howard Zinn and Walter Mosley.  See "Name our epoch".    

The winner was announced this week.  And the winner is...   The Borrowed Times

So read all about it.  It is a good name but I doubt that it well catch on.  I think that the name people will use will hang the disaster around the necks, rightly or wrongly, of several US presidents.  It may be called Reagan Bush period or age.  These guys will leave their name on the door much as Metternich left his and Victoria left hers.  But we won't know the name for some time yet.  It won't be 'us' who will be naming. Those who are left will do that.

And getting back to my naming game - I think that the crisis is best described as the "Financial Meltdown" as in all that is solid melts into air - the quote from Marx and the title of Marshall Berman's book.

I was fleeced by Madoff

"I was fleeced by Madoff"
The financial guru's Ponzi scheme cost me 30 years of retirement savings. How could he do this to me -- and why did I let him?
By Geneen Roth

http://www.salon.com/mwt/feature/2009/01/07/madoff/index.html

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Your friend's message:

This sure shows how vulnerable people are: we do look to government to identify and stop people like Madoff.  I wonder if this person would support strict regulation of financial markets- now?

-------------------  my reply

Hi - the sad thing is that this woman likely thought that the markets were regulated...  in my classes the kids often react to any perceived injustice by saying "that is illegal".   There is a sense amongst the unwashed that the powerful are right - that government is too involved in our lives.   The corollary of this is that the government will protect them from such terrible crimes (as in stealing all their money).   The sense that the market ideology presumed  that people would take responsibility to get 'full information' etc to look after their own interests (which Smith's hidden hand etc of self interest requires) was not widely held.  What many people like you understood was that the ideology obliged people (or again simply assumed) to do what they were not in a position to do - ie to understand the markets; to get information and so on...   how could the ordinary investor hope to understand when the financial culture was one of over paid superstars (read Wizards behind curtains) working in a culture of friendly handshakes and insider trading?   

The whole market was a pyramid scheme set up as a multiples of ponzi schemes.  I have been telling people for years that the housing market was an international pyramid scheme.  I didnt think of expanding my analysis to the banks because despite 14 years of university study and 25 years as a lawyer I didn't feel I understood the mortgage business.  You may recall I have asked you to explain derivatives to me a couple of times.  I took the stock brokers course (and did quite well) but I still don't understand hedge funds...  so it seems obvious to me that folks like this poor woman had no hope of understanding - and this ignorance extended to an understanding of what was and what was not being regulated. 

Even now the media here (in NZ) whines on about the "nanny state" - even now the government is in the business of getting out of business.  And so I don't expect any move to responsible government anywhere will be easy - there will need to be a shift in the whole tenor of the political discussion for a return to 'governance' for the people and of the people etc as was the case following the 1930's.    I simply don't think that the media would let the message to get through - talk about circuses - that is all that we will have on the media (whether the 'circus' is a foreign war or the Olympics). 

My sadness and some suggest, my unhealthy obsession is that there will be rules - but that these rules will protect the rich.  The wealth accumulated by  the winners in this world wide ponzi scheme will not be returned to help pay for the costs of the 'bail out".  The public will pay for the mess with increased poverty, decreased social services and so on.   The response of the government will be like that (in terms of rough analogy) of the victors in 1919 as compared to the response of 1946.  As you know, in 1919 the victors wanted peace but more than that  they wanted a return of the old regime and decided the best way to get there was to have Germany pay for it.   

Here, those running the show (ie the government) want to get back to where they were? But where is this?  1970?  1980?  or 1999?   What is the bench mark for success?  5% growth or 2%? And home ownership of 45% or 85%?   The Canadian government is giving $4 billion to the auto industry - what are the guidelines?  what is 'success'?  Oil at $100 a barrel?  Oh the government will pretend that recovery is coming - that things will be as they were.   But ...  how can they ever be as they were?   Sadly I suspect that regulation will simply be rules closing the barn door after the horse has begun to smell (using this analogy more than it should be - I would suggest that the horse needs to be examined, its cause of death determined and then it should be appropriately buried - all with the barn door wide open).    The problems are profound - a democratic solution (as opposed to fascism on display) would involve electoral reform.    But is won't happen.    Why?Because the whole culture is no longer one which sustains the old fashioned notion of good governance.  It is a culture in which everyone feels that they are special, that rules are important but getting caught is the problem, and that the best outcome is money money money...

Y's  experience with the Federal Government taught me a lot about the current attitude to governance in Canada.    Of course everyone pretends that the system is 'fair'...  but there is no fairness in a system in which files go missing - where hiding and delay is the best legal tactic.  Contracts are let and money is made on the basis of who you know not what you can do... All over justice is reduced to a dollar sign - and yet hundreds of millions of dollars in fines are left uncollected.  Who pays?  Who doesn't?  Read Bleak House lately?   

What is justice when the main and often only economic activity in much of the province is the cultivation of an illegal drug?  How does such a large industry get established, keep going in a supposedly law abiding part of the world?  Do only the unlucky or unconnected get caught?  What happens to the community when the richest citizens pay no taxes because their business is illegal.  Here look south - some argue that  Mexico is skating closer and closer to collapse... why?  because of the attempt to enforce drug laws...  or the attempt to determine who profits from this trade?   

And then where is the justice in a financial rescue when the most wealthy in society somehow manage to keep their homes, yachts and medical insurance when the less wealthy are told to eat their losses.   

Ok - I am angry.   Alas...  and I don't know who to blame...

Whooppppssss - its gone?

Ok.  Where did it go?  Where did the five trillion dollars go?

We were talking about the "financial crisis" the other day.  A friend asked "So, where did all the money go?  Where is it?"

How does one answer this question?  The question is almost rhetorical.  The problem is 'money'.   As Karl Marx, Georg Simmel and many others have noted, money is multi faceted.  The word is both a thing and, like property, a concept.  As a word, money is defined as "a medium of exchange, a unit of account (a standard) and a store of value" .   Money can be an object but as in the discussion of property, the objects is property only when it is owned.  The object, and in this case the object as money is not, in and of itself, money.  In order to be 'money' in any sense of the word, there needs to be system or process which ensures that the object understood as money, becomes money.  In other words, money is a medium of exchange, an accounting unit (or measure of worth) and a store of value only as part of a system.   It is the system, the process of exchange, measuring and storing which makes money, money.  

Before going any further - may I suggest that the current financial crisis needs a name.  I suppose that naming takes time - like the stock market crash of 1929 may not have become known as the Crash of 29 until 1930 or even later?  And the Great Depression - when did that moniker take hold?   Financial events seem to be named by the year so maybe we should know this current problem as the Crash of 2008 - or the '08 Meltdown?   I suspect that it may also be referred to as the year the party ended - the End in '08. Michael Lewis and David Eichorn article "The End of the Financial World as We Know It" is an example of many articles on this theme of it's gone and it ain't coming back...  Another example is found in Jim Kunstler's blog...

Back to the question of where the money has gone...   one answer is that the money has not "gone" anywhere because it never was anywhere to begin with.   As a medium of exchange money only exists in the moment of the deal (as in buying groceries).   As a unit or measure, money only exists to the extent that there is something to count or measure - asking where the money is, in this sense of the word, is like asking where the centimeter or temperature 'is'....  As a store of value, what is stored can be referred to as value but the value and thus the money are defined by the system - like the score of a sporting event.  The numbers only have meaning within the context of the rules of the game.  Money takes form, arguably life, as value but this existence depends on the ongoing process.  The value exists only as long as the system which brought it into being continues.  If the process slows or, worse stops, then the value risks being redefined or even lost.  Without the system, there is no value and nothing which can be stored as "money"  Without the system money has no value and without any value it may cease to be money.  

What was lost in the financial crisis was money best defined as a store of value.  The loss is expressed in terms of money. Investors often talk about 'losing money" when their stocks go down in value, but most also know that this loss is of a different quality than what might be lost when if one loses their job or their house.   Arguably, the amounts made and then lost were simply an indication of the score in the capitalist game at that point.  But even as the score, the money was not measure of anything, because to know who was winning or losing required an understanding of the game - and only the insiders really knew what was going on.  

Outsiders, meaning most people, have a tendency to attempt to translate the money as stored valued into terms which they understand - that is money as a means of exchange.   This leads to questions such as What is a trillion dollars worth?  or  What can it buy?  The five trillion (or whatever amount is current) represents a loss of money in the sense that the value which folks thought was there, turns out not to be there.  To translate this loss to money as either a medium of exchange requires imagination. For example, you could attempt to describe the amount of money in terms of exchange - like the money lost in 2008 could have bought everyone in the world a new car or health care (or whatever). But what was lost was never intended to be used as in exchange.  

The problem is that while the amount "five trillion" suggests that the money is being used as a unit of accounting or as a measure of some kind, what is there to measure?  Value?  Anyone who watch the housing market accepts that the price was stated in money but meant very little.  With easy credit and low interest rates, demand forced prices up.  Money ceased to be a reliable indicator of a houses value especially when the housing bubble burst.   When the bubble burst, the prices of houses went down and homeowners lost money.  But while everyone lost money, not everyone lost the same thing.  

I suspect that the money that was lost in the '08 Crisis was loss of stored value. The money or estimated worth of financial assets disappeared because the game in which it took shape ended.  There are many reasons, I suppose, why the game ended:  the winners stopped believing and got out, the losers had enough and tried to get out...  it was almost as it for awhile the folks at the top of the financial heap forgot that they actually believed that it was a game and that they made the rules - that they owned the game of making money.  And maybe they did, maybe they did own the game but they needed to keep faith with everyone else in the system who were letting them play.  When they changed the rules and allowed players to steal, the game was over and the score was meaningless.  Value was produced by a system which included more than just the players.   

Not surprisingly, when the game ended the players went home and those remaining became preoccupied with money as a means of exchange or as a measure of economic activity...  the money, like the score in last year's Stanley Cup Finals, is history.