The fourteen hour documentary about the three Roosevelt cousins, Theodore, Franklin and Eleanor, that aired the week before the last week on PBS stations across the country was one of Ken Burns’ best. A total of seven episodes, broadcast in installments of two hours each, chronicled the lives of the three members of the Roosevelt family. The documentary spanned more than a century, from Theodore’s birth to Eleanor’s death. Despite its length, it left me wanting more.
The first three episodes focused mainly on TR or Theodore Roosevelt, while the next three on Eleanor and Franklin Roosevelt, while the last one was about Eleanor’s life after White House. Theodore and Franklin were fifth cousins, while Eleanor was TR’s niece and FDR’s fifth cousin once removed. Of all the episodes, only the sixth one on WWII felt repetitive. Perhaps, because the history of WWII has been the subject of so many other TV documentaries on PBS and elsewhere.
Though all three cousins grew up in the lap luxury, I cannot imagine any of them jeering at those less fortunate than they were, as moochers. In the political arena, the Roosevelt, I was most inspired by, was FDR. One can argue that he was one of the most consequential Presidents of the United States.
The New Deal regulatory regime kept the financial genie that brought about the Great Depression caged, while the New Deal and the War Stimulus bought the greatest era of broad based prosperity to the United States. One could argue that the ongoing dismantling of the New Deal regulatory regime since the Reagan administration has been directly responsible for many of the financial crashes since then, including the latest one in 2008. If a man is known by his enemies, FDR made the right ones. He is hated even now by the intellectual and actual progeny of his erstwhile detractors. A cottage industry of hacks discrediting or minimizing his achievements in tackling the Great Depression, exists even today, one recent example, here.
FDR’s other monumental achievement was his able leadership during the second world war. Mobilizing for WW II transformed the United States from a regional to a world power. In the light of FDR’s unparalleled legacy, the idea of term limits for a President does not make much sense, at least to me.
I knew the broad outlines of FDR’s story but this documentary filled in a lot of details about Franklin D. Roosevelt as a person, including his often difficult marriage to his fifth cousin Eleanor and his struggles with polio. Shy and reserved as a child, Eleanor, came into her own as time went by. Though she was unloved as a child or perhaps because of it she became a voice for those without a voice, whether they be miners in West Virginia or those who suffered under the Jim Crow regime years after the end of the Civil War. On a personal level, Eleanor impressed me the most, her metamorphosis from a shy and unsure young woman to a stateswoman who shepherded the Universal Declaration of Human Rights for the fledgling United Nations was truly inspirational.
Of the three,Theodore Roosevelt was the hardest for me to relate to, perhaps because his times have receded into a distant past and his world is a far cry from the world we live in today. His war lust seems out of place after the two world wars and other conflicts. There is no nobility in war now if there ever was in some distant past. In the era of mechanized warfare and nuclear weapons, war means misery and death and not just for the soldiers . On the personal front,TR’s tenacity and courage in overcoming both asthma and depressive tendencies were nothing short of impressive. His colorful and brash personality must have guaranteed a good copy for the journalists of that era. One thing struck me that TR would have been a misfit in today’s Republican party because of his progressive values and conservationist ideals.
The voice-overs for the Roosevelts were done by Paul Giamatti, Edward Hermann and Meryl Streep for TR, FDR and ER. I found Streep distracting and a bit overdone. All in all, an impressive documentary about three impressive people, flaws and all. At the end of part seven I was left wanting to know even more about them.
Credits : Produced by Florentine Films and WETA, Washington. Directed by Ken Burns; written by Geoffrey C. Ward; Mr. Burns, Paul Barnes and Pam Tubridy-Baucom, producers; Mr. Barnes, Tricia Reidy and Erik Ewers, editors; Buddy Squires and Alan Moore, cinematographers. With: Meryl Streep (the voice of Eleanor Roosevelt), Paul Giamatti (Theodore Roosevelt) and Edward Hermann (Franklin Roosevelt). (source: NYT)
Finally, as promised a review of Inside Job. Made in 2010 and narrated by Matt Damon, Charles Ferguson’s documentary about the financial crisis covers a lot of ground. One can quibble about the details but his take on the big overarching themes was spot on, in my opinion.
- The New Deal legislation on financial regulation kept the financial sector in check after World War II
- Unraveling the regulatory regime for banks and other financial institutions from the late 1970s onwards led to larger and larger crises since the 1980s, culminating in the biggest crisis since the Great Depression in 2008
- The people responsible for the crisis got away without any criminal charges this time, unlike the Savings Loan Crisis of the 80s when people actually went to jail.
- There is an unholy nexus between some faculty members of economics and finance departments of elite universities and the banking sector. They are the Inside Men, who bear the ultimate responsibility for the biggest bank heist ever.
Watch his interviews with Fredrick Mishkin and Glenn Hubbard, of Columbia University which make point four, crystal clear. Unfortunately for us the roots of this problem go even deeper than what Ferguson covered in Inside Job. The problem goes far beyond a handful of professors and their cozy and borderline unethical relationships with banks and the like. The conflicts of interest run deeper than just the speaking and consulting fees. The very tenets of the prevailing wisdom need to be questioned after such a spectacular failure.
The conventional thinking in economics right now owes its influence to Milton Friedman and his University of Chicago colleagues. Underlying many of the policy changes since the seventies is the thinking that free markets are the epitome of freedom and that they are self correcting. Government intervention of any kind is bad for the markets and in turn bad for the polity and the society at large. Friedman and his colleagues managed to change the postwar, mostly Keynsian consensus about economics to the policies that favor the 1%. Though many of the original Chicago economists are dead or retired, their intellectual spawn have cloned themselves many times over in academia. Even the financial catastrophe of 2008-09 has changed little as the subsequent debates about austerity highlight. We have every reason to be suspicious when they blithely lecture us about how austerity is necessary.In the words of Turgidson , a commenter from Balloon Juice:
And somehow, like a bunch of indestructible cockroaches, they keep surviving what should have long ago (but especially from 2008 on) been a complete discrediting of their ideas and maintain an astonishing amount of influence over policy and the debate in general
Getting rid of the cockroaches that can survive an economic Armageddon is easier said than done.
Coming back to the movie, watching Glenn Hubbard have a meltdown in front of the camera over Ferguson’s polite but persistent questioning is the highlight of the movie. Watch Inside Job, it gets the big picture of the financial meltdown right. It leaves you feeling both enraged and frustrated at the same time. A must see documentary.
Grade: A-, because some of the details about the actual mechanics behind the credit derivatives were fuzzy and unclear.
Photograph: Linda Nylind for the Guardian
Stay tuned for the upcoming blog sequel, Inside Men.
Yesterday was the fifth anniversary of the collapse of Lehman brothers. The banks and Wall Street investment houses have recovered quite nicely but the rest of the economy is still limping along. Finance is the life blood of the economy, it ensures that capital flows where it is needed, unfortunately in recent times finance has become an end in itself. Like a cancer, it has grown unchecked and has overshadowed the rest of the economy. This has created an economy where the the 1% who have tremendous reserves of capital thrive, while the rest of us teeter on the threshold of perpetual financial instability.
The collapse of Lehman and the ensuing crisis, gave us an opportunity to send the cancer into remission but political will to do so was clearly absent. So instead of ruthlessly irradiating the underlying cancer we stabilized the economy by huge infusions of tax-payer funds to the very banks and investment houses that caused the problem in the first place. We have not dealt with the underlying problem and it is going to come back and haunt us. It is not a question of if but when.
I have blogged about the steps to avoid the next financial crisis earlier here. Also, here is a list of some of the issues around the financial crisis that I am interested in and will be writing about.
Raghuram Rajan is being hailed as the second coming of Christ or tenth avatar of Vishnu by most in the media. There has been a lot of breathless gushing and swooning, with the media playing the role of teenage girls to Rajan’s Justin Bieber. A brief sampling of the head lines.
From The Times of India
Raghuram Rajan: Engineer-turned economist with a rockstar’s appeal
From the Economist
A Star Economist is put in charge of India’s Central Bank
From the Telegraph
India’s financial prophet Raghuram Rajan to run central bank
Independent Media Hard at Work
These news articles usually begin with how Rajan predicted the financial crisis. At the Jackson Hole Economic Symposium in 2005 Rajan presented a paper, that raised concerns about the financial sector. However, Rajan was hardly the only one who had raised these concerns. Academics like James Crotty and Greta Krippner, had also been pointing out the hazardous dominance of the FIRE (Finance Insurance Real Estate) sector in the economy before the crisis. Neither of them however have managed to become media darlings, and continue to toil in relative academic obscurity. While the media treats Nouriel Roubini, another famous prognosticator of the crisis as somewhat of a crank, going so far as to label him Dr. Doom.
What Rajan pointed out in 2005 was plain enough for anyone who paid attention to see, mainly that housing prices could not go on rising forever and the entire house of cards* built upon this assumption was destined to collapse sooner or later. If economists and other so-called experts failed to see the impending catastrophe it is not because it was difficult to see but it was because they did not want to see it. Just like the story of the Emperor and his new clothes. I have no idea why he is being hailed as a Messiah for stating the obvious, which he did in a good well reasoned paper, it was not like he came up the economist’s equivalent of the General Theory of Relativity.
So since 2005 has he been speaking truth to power? A sampling of his columns tells a different story;
1. Why blaming bankers for the crisis is a bad policy: Shorter Rajan, the government made banks loan money to poor people and that was responsible for the housing bubble and the resulting crisis. The last time I heard this claim trotted out was during the Republican Primaries by Romney and Gingrich. A claim debunked by both Federal Deposit and Insurance Corporation (FDIC) and the Federal Reserve.
2. Is finance too competitive? This column is so full of fail that I don’t even know where to start. I may have to do another post on it. One gem, towards the end of the column, he wants banks to be regulated just like any other industry, open to the forces of what he calls creative destruction. So no FDIC?
In short he has been writing things that comfort the comfortable, and make Paul Krugman mad. Tighten your seat belts India, and squeeze your buttocks, you are in for a bumpy ride, you have just handed the keys of your economy to a devotee of Schumpeter.
*House of cards refers to the securitization of the mortgages, rating agencies determining the mortgage backed securities to be investment grade (AAA), creating the over the counter derivatives to hedge against the mortgage backed securities and so on. In short creating layer upon layer of complexity not to mitigate risk, though that was the cover story, but to make profit, every step of the way.
Big banks are awash in record profits almost five years after the collapse of Lehmann brothers in the September of 2008. Lehmann’s bankruptcy set of a chain of events that led to a credit crisis and a meltdown of the financial markets, which in turn led to the worst recession since the Great Depression. I want to use the upcoming five year anniversary of Lehmann’s bankruptcy to revisit the crisis and it aftermath, I plan to focus on these points in particular;
- Banking sector and its role in the capital markets
- Regulatory Regime
- The perspectives of theoretical finance and macroeconomics
- Overview of the academic literature
- Overview of the mainstream press (Wall Street Journal, Forbes, Business Section of New York Times, popular books etc.)
- Focus on what is still missing from the above analysis and questions that still remain unanswered
- Suggestions to avoid a similar catastrophe
This is a tentative outline and the list may undergo changes depending on the results of my explorations. If you think there is any aspect that is not in my list but would be interesting to look at, please leave it in the comments.