Many years ago, thanks to some mutual friends, I had the privilege of meeting the late George W.S. Trow, and of sitting in on a class he was giving as part of a journalism workshop at Bard College. Each morning Trow would sit down with the day’s New York Times front page and begin to find links between the stories — not hypertext (this was way pre-Web), but causal connections, cross-currents and submerged conflicts, relationships that the newspaper couldn’t or wouldn’t overtly illuminate but that you could make out if you just let the stories rub against one another in your mind.
The author of In the Context of No Context (which I wrote about in Salon a decade ago) was giving us a lesson in how to place the loose atoms of conventional news reporting into molecular structures of context. Once the lesson took, the methodology was impossible to shake.
I got those old Trowvian vibrations again this morning as I scanned the front-page of the Wall Street Journal — crammed as it is these days with four or five headlines where there used to be three, an immediate result of the new Murdoch regime.
The lead story, “Trader Made Billions on Subprime,” tells of hedge fund operator John Paulson, who has made $3 to $4 billion, personally, by “betting against the housing and mortgage markets.” Since those markets, you may have heard, have been going through a rough patch, Paulson’s “bets” paid off.
Paulson himself sounds almost contrite about his success: he’s “reluctant to celebrate while housing causes others pain,” intends to increase his charitable giving, and thinks that “a lot of homeowners have been victimized.”
This stands in contrast to Los Angeles real estate investor Jeff Greene, the subject of the Journal’s second lead, a friend of Paulson’s. Paulson invited Greene into his housing-crash fund, but Greene went off and implemented the investment strategy on his own. Paulson is irked, but Greene protests, “He never told me, ‘Don’t do it.’ ”
The “bet” paid off for Greene, too. He now has three jets. (What does one do with three jets?) He believes that he is “pretty conservative in the way I spend money”; after all, his newest jet is an “older model” Gulfstream that he got for only $2 million — a steal!
We understand that the financial engineers of Wall Street have always been handsomely rewarded. Lots of people and institutions in the financial industry lost the gambles that Paulson and company won. But I can’t help thinking there is something broken with a system in which Olympian financiers place their bets on incomprehensible financial instruments and risk winning or losing bonuses and jets — while these same transactions bear real consequences that are very comprehensible and tangible for the people whose lives they affect. When the roulette wheel of the derivatives market stops, some people get to buy jet number three; other people lose their homes.
Which leads us to headline number three: “States to Tighten Belts as Weakness of Economy Cuts Into Tax Receipts.” Here we move down from the rarefied air of Wall Street back into the thicker atmosphere of everyday reality, where, it seems, the mistakes made in the mortgage market — all the stuff that Paulson “bet” against — are now dragging down the economy, dampening consumer spending, slowing economic growth, reducing employment and cutting into government coffers. Which means less money for schools and police and children’s healthcare and other stuff that people without three jets — or even two jets! — might care about.
Finally, if your eyes scan down the page, you hit headline number four, “Toxic Factories Take Toll on China’s Labor Force” — an account of the cadmium battery industry. Making the batteries requires toxic chemicals, and when the U.S. started regulating their manufacture, the industry simply moved to a lower-cost, no-hassle home in China, and took its poisonous impact with it.
The story pulls our gaze out from the national to the global scale, reminding us that the U.S. economy now rests, even more completely than in the past, on foreign foundations. James Fallows explains how in painfully clear terms in the new Atlantic:
Through the quarter-century in which China has been opening to world trade, Chinese leaders have deliberately held down living standards for their own people and propped them up in the United States. This is the real meaning of the vast trade surplus—$1.4 trillion and counting, going up by about $1 billion per day—that the Chinese government has mostly parked in U.S. Treasury notes. In effect, every person in the (rich) United States has over the past 10 years or so borrowed about $4,000 from someone in the (poor) People’s Republic of China.
There you have it: the story of the economic world today, from prosperous financial buccaneers to worried middle-class America to the developing-world workforce that can only dream of someday upgrading its problems to the sort we in the United States contend with. It’s all on the Journal’s front page today, but the newspaper won’t connect the dots for you — that work is left to each of us.
“When we try to pick out anything by itself, we find it hitched to everything else in the universe.”
— John Muir
[tags]george trow, wall street journal, subprime crisis[/tags]
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