I will admit that I am incapable of watching BBC in an unguarded manner; BBC is a state propaganda organ and is a very sophisticated operation both in terms of the quality of the product and the subtlety of the disinformation. This product was not an exception. Various matters bug me about this installment of BBC's attempt to write history: 1) Given that Ayn Rand's little group in NYC was effectively demonstrated to be a cult, complete with cult leader issuing sexual and emotional demands on cult members, almost zero time is spent discussing just how is it that our little bright thing, dear Alan do i exist Greenspan reconciled his extreme devotion to Objectivism and Ayn Rand as full card carrying member of the said cult, with the top-down, regulatory, and highly un-Randian Federal Reserve and Fractional Reserve Banking. Really interesting topic. Just a job, Alan? 2) Blame the geeks. Sorry to inform BBC's historic revisionism department, but the customer facing banks that gave out silly loans did not do so "because of their trust in new computer models". That is a blatant lie. The fact is investment banks, which were unfettered by regulatory oversight overturned by the GoldmanSachs cum Treasury Dept gang of Rubin et al, had informed the edge nodes of their financial network to "roll everything into trunches and securitize it as Fixed Income Instruments and we will sell it". That is the historic fact. (And no, they were not reassured by their "computer models"; their assurance came from the fact that EVERY SINGLE influential member of this clique moves between NYC and DC between Wall Street and Federal Government. "Too big to fail", and all that.) 3) Cute distraction down memory lane (hi Monica!) but the crime of Bill Clinton wasn't listening to the ("hyper rational") Alan Greenspan regarding "interest rates". It was the willful dismantling of the compartmentalized financial system to enable the scam outlined in step (2) above.
1. Why is it unrandian? You need to organize your medium exchange on some basis. While I wouldn't be surprised to find out that many of the gold nuts are Randians, I know that many top government officials who are big fans belive that strong independent central banks are the way to go. Strong central banks are certainly better in the Randian world view than Congress setting monetary policy. 2. Nope, sorry, you are wrong, it's not just deregulation, the BBC is not just shilling for Wall Street here, someone knew what they are talking about. Computational methods did a lot to cause the Asian and later Mexican financial meltdowns. Wall Street was hiring physicists and other people with strong computational backgrounds left and right in the 80's. These guys made computer models that were supposed to minimize risk, and the models worked great for quite a while. Huge institutions were investing only on the basis of their algorithmic information. The old fashioned investors/partners couldn't understand a thing about the basis for these trades, where they saw risk firms were realizing profits, so the geeks ruled. Rough thing was that there were variables that the modelers hadn't understood or accounted for. Fortunes put entirely into mostly undiversified portfolios were wiped out overnight. I"m sure unfettered regulatory over site had a a share of the blame, but the story they are telling may not be the whole truth, but it is definitely a valid perspective. And just so you know not every member of what I imagine you think is the great financial conspiracy moves between Wall Street and government, not that the it really matters one way or the other, but I can think of at least three top Treasury and FED officials who have almost no Wall Street experience. 3. Bill Clinton had been painted into a corner, he had a Republican congress and to get anything done he was gonna have to play ball. I don't know how much he talked to Greenspan, but he was defiantly trying to be flexible to maintain effectiveness, I would be surprised if he wasn't talking to Alan. Most the political economic stuff in this documentary seems to be told from an unusual perspective one that isn't the standard version, but also isn't inaccurate. Stuff like the Asian crisis is normally explained from the perspective of the "Washington Consensus" or the "Chicago Boys" angle, but that doesn't mean the the version shown here is wrong. It's what I liked about the video, unusual version of events that I've been taught about woven together in a novel way.
They certainly are the most polished. And quite influential. (And helpful, too! Did you know, cgod, that in '79 BBC news announced the location of the next day's demonstrations to be held in Iran? Breaking the news, indeed. Yes, that was BBC editorial staff deciding on their own to meddle in international affairs of clear and certain interest to the Crown of England.) "We no longer have the original tapes of our 9/11 coverage (for reasons of cock-up, not conspiracy). So if someone has got a recording of our output, I'd love to get hold of it. We do have the tapes for our sister channel News 24, but they don't help clear up the issue one way or another." -- BBC News http://www.bbc.co.uk/blogs/theeditors/2007/02/part_of_the_co... (Your "output"? Dear BBC News: We want to see the records of your raw feeds for that day as well.) I certainly agree that conspiracy mindedness is a problematic methodology and hardly efficient. It is also, by definition, reactionary. But you apparently do not realize that it is also a legitimate (and very effective) survival strategy in context of a deficit in the quality and quantity of critical information. Being open to the possibility of current conspiracy allows for a consideration of the possible causes and ramifications of the odd fact that "We no longer have the original tapes of our 9/11 coverage (for reasons of cock-up, not conspiracy)" is the extent of BBC New's attention to this matter. If I were not receptive, I would dismiss the thought and never bother to devise alternative models. I would very possibly fail to recognize other seemingly independent events that could in fact be connected, and would have far more likely been noted due to the fact that I entertain various models in my head as I process information. Of course it is inefficient. It would have been far better, all things considered, if (for example in this case) BBC News itself had gone out of its way and taken us on a guided tour of their process -- what a great show that would be -- during the course of which we can all breath a sigh of relief and note that it fact BBC News is incompetent or suffered a reasonable system failure. That would lead to efficiency gains all around and really not at all an unreasonable thing to expect from such an 'august' "news organization" that has amply demonstrated that it can wield a highly critical lens on the subject matters of its choosing.
re 3: After reading Clinton's autobiography, I got the sense that he did believe that it was imperative that the US get out in front of a new global economy. I don't know who sold the notion to him, or if it was his own, but I think he felt that aggressive new strategies to trade and banking had real merit. He blames the Republicans for a lot, but I don't recall him ever complaining about repeal of the Glass Steagall act or ideas around it. The Lewinsky impeachment had passed the previous year, right? Btw, these points are strong ones. No need for 'nut', IMO.
So, the notion of bank officer Joe giving a loan to Bob because of a "model" is entirely meaningless. The models in questions were used to facilitate injection of super fluidity in the capital markets. The completely arbitrary aspect of the whole affair was given credibility due to the soundness of the underlying mathematics (which of course in no way supported the assumptions made in the model). The accusation stands that this was a planned transfer of wealth mechanism when coupled with the edge nodes of the system: retail and commercial banking. Due to the changes made to US regulatory policy as demanded by certain interests, these banks, which originally served the purpose of gate-keepers to the system, as entry points, by applying strict standards to valuation of properties and credit worthiness of loan applicants, adopted the policy of uncritical acceptance of rapidly inflating property valuations and applicants. "quasi" governmental agencies, in turn, played the role of taking the activities of these brick and mortal end points, bundling them (as fixed income instruments), and Wall Street peddled it in the markets. The models were operable at the macro level of Wall Street. What is happening now -- and what is to come yet .. -- was perfectly clear even to a layman such as myself. It is not rocket science. So for someone like me, the nagging question remains: are these people -- our leaders -- "nuts"? Is there a death wish for this country? Do they have our best interest in heart? I say this, since as a technologist, I am not a luddite who does not appreciate the impact of technology and what is happening now (and then). I never drank the cool-aid of "new economy" to the extent that I would find it 'reasonable' to think that it is 'ok' to throw caution to the wind and dismantle a regulatory regime designed principally to prevent another "Great depression". Having the ability to channel massive funds to specific sectors of the economy is a powerful thing. When GoldmanSachs and co. began inflating a tech bubble, they were fully aware -- they are not little children playing games -- that they were holding several of the key levers that affected the very direction of society. That is social engineering. That is real power. For example, when GoldmanSachs, CitiBank, et al began funding Indian startups and setting up infrastructure in India, culminating in some cases the transfer of nearly "90%" of their IT workforce to a foreign nation, they very much changed certain key characteristics of this society. And, of course, India. India made a quick exit, in spirit if not body, from the "non-aligned" movement then and there ... Again, I wish to remind you these people are very much your opposite numbers (you scientists) in the domains of power, money, and influence. Your way of thinking about their domain is very much like the guy in the street contemplating the dynamics of academia and philosophy of science. Kid yourself not. I believe it is not only perfectly reasonable to be unreasonably suspicious of power elite at this crucial point in human history -- the machine and machine mediated society and the "state" and "corporations" that own and operate the said machines ... -- but it is in fact a moral duty. I believe it is perfectly reasonable for a sub-set of us to look like "fools" and "nuts" as long as we collectively cover the various probabilities, given the critical importance of nipping in the bud any "low probability" but highly undesirable activities. I too wish to inhabit a social reality where I can comfortably chalk up BBC's loss of "entire archives on 9/11" to "incompetence" or "ooops". You, cgod, could do your part in this collective effort by going easy on the (very trivial to assume position on a) high horse of hyper rationality based on "authoritative" evidence, and instead silently run the variables (as a thought experiment) in your head as you do what it is you do. But please do not try and silence us. It is (remotely) possible that we are right.
Good enough that I look forward to watching the next in the series. It's novel and thought provoking.
The visual and aural collage of the narrative background also deserves its very own blog post #2 is specially laughable as one can nearly plot the cyclical sequence ('happy hopeful sounds and images' -> 'horror movie sounds and distorted images of nature').
"Love and Power" is the story of two perfect worlds. One is the small group of disciples around the novelist Ayn Rand in the 1950s who saw themselves as a prototype for a future society where everyone could follow their own selfish desires. The other is the global utopia that digital entrepreneurs in Silicon Valley set out to create in the 1990s.