Book report

Fyre Fraud (Hulu) and

Fyre: The Greatest Party That Never Happened (Netflix)

 

These two documentaries are good tragicomic stories but miss the greater historical context: fraud is inherent to capitalism and most rampant in moments when the culture worships innovation and risk.

 

I have no doubt you saw or heard about these two movies. They both clumsily explain that millenial’s fear of missing out caused them to spend tens of thousands of dollars on a poorly planned music festival. Millennials cry on a bus. Millennials slash each other’s tents. Millennials record every moment of their lives with their damn video phones. Both documentaries explain what influencers are, and both try and fail to answer a question about how culpable advertisers are in perpetrating scams. They fail because that line of thinking just begs the question: whose fault is it when scams occur? Is it simply buyer beware? If not, how responsible are advertisers to verify their clients’ products? Better yet, how responsible are venture capitalists and financiers in ensuring they are funding a legitimate businesses? Should the government be policing businesses?

 

Fraud has always been present in America. As Duke Professor Edward Balleisen explains in his recent book about fraud, periods of technological innovation that rely on the use of financial capital are the most fraud filled (that is, our current era). From the frauds of westward expansion to lightning rod salesman of the 1920s to Bernie Madoff, unstable times make people vulnerable to those who promise them what they want most.

 

The two documentaries focus on the schadenfreude of watching Millennials get scammed, but it was a trans-generational group who got sucked in: the spineless advertisers, the clueless financiers, and Bahamians of all stripes who turned out to work for little pay. All these parties believed that the rich-seeming tech bro Billy McFarlane–who looked and acted like a caffeinated seven year-old–could pull off a music festival in the Bahamas with no prior experience. Some wanted to believe, and some were too desperate to have any choice.

 

For his entire adult life, Macfarlane found that capital was easy to drum up. He, like Elizabeth Holmes of Theranos, raised real, legal capital. As another contemporary fraud, the ”Soho Grifter” Anna Delvey, told a reporter from jail, her fraud wasn’t about just stealing cash, “If I really wanted the money, I would have better and faster ways to get some. Resilience is hard to come by, but not capital.” Macfarlane is comparable to Holmes and Delvey–confirmed frauds–but also to one of his funders, deceased fracking billionaire Aubrey McClendon. The question is why is capital so accessible to people like Billy Macfarlane when we can’t even fund a infrastructure improvements? Fraud is important to pay attention to; it exposes real fundamental flaws in our economic arrangement.

 

Elwood, Illinois (Pop. 2,200), Has Become a Vital Hub of America’s Consumer Economy. And It’s Hell. by Alexander Sammon (The New Republic)

 

Elwood, a town 40 minutes south of Chicago, attracted business by allowing itself to become an inland port. Warehouses and distribution centers for Walmart, Amazon, and other quickly populated the area. But these companies were attracted with the typical corporate giveaways. First there were tax breaks, temp labor, and now the local municipality is losing control of its corporate tenants.

 

Truck traffic alone is a major problem, because the roads aren’t big enough and truck drivers are a less experienced, more desperate lot. A trucker gets stuck on a local road: “It’s gonna be a problem trying to get him out of here,” Buss grumbled. “There’s no training now. Most of these guys don’t know how to back up.”

 

Bait and Switch by Barbara Ehrenreich

 

Ehrenreich goes undercover in the mid-2000s to see if she can get a job in white-collar executive America. I enjoyed this book, but it felt strange and disappointing. The book has no culminating action. She never even gets close to finding a white-collar job. She regales us with dark, funny stories of career coaches she employs, networking events and job training seminars that she attends. They all practice some form of victim blaming–she needs to have a positive attitude, she needs to be networking more, the corporate world does not owe her a job–but also make no real attempt to help her find work. The only job she is offered is a temp job selling insurance for AFLAC, which is not really a job. It’s a freelance position with no benefits, or guidance even. The reality is that the white-collar world is more akin to a feudal court than to a factory, and who you know, who you were raised to be, who you genuflect to, is most important. Skills have nothing to do with it.

 

The Real Legacy of the 1970s by Michael Tomasky

 

The rampant inflation of the 1970s made us not trustworthy? Interesting theory, though incomplete and not totally believable.

 

Until the Next Crash by Jonathan Levy (n+1)

 

Levy opens his review of Adam Tooze’s Crashed with a discussion of the deleterious preoccupation of the global economy: liquidity. He writes that “liquidity is a fetish, because for the community as a whole the concept makes no sense. What looks like liquidity to an individual owner of wealth means a decline in the aggregate rate of long-term investment for the macroeconomy—fewer jobs, less wealth, and more wasted human potential.”

 

The Federal Reserve stepped in, after the 2008 crash and over the past decade, to ensure liquidity with a number of complex policies that reaminmated the American and global economy. Is this new economy based solely on complex tools durable? The fed is like Dr. Frankenstein, animating his monster with brilliant technical wizardry. An undeniably amazing achievement. But the monster is fucked-up and ghastly. You couldn’t confuse it for human. What hath God wrought?

 

Stuck In A Gilded Age by Jonathan Levy (Dissent)

 

Industrial productivity ended in the 1970s, and never came back. This is industrial crisis. Levy says that, “by the 1970s, the productivity gains of the Second Industrial Revolution were exhausted. Productivity flagged, contributing to…inflation and the wider sense of industrial malaise. It has not revived—aside for the period 1996–2004—because technological innovation has occurred in the relatively narrow sector of information technology. The narrowness of the Third Industrial Revolution means eight years of solid productivity growth was all this revolution could muster.”

 

So what happened in America after the 1970s? One thing that is certain is that capitalists stopped doing the only thing that made them capitalists, plugging money back into their businesses. They stopped reinvesting and the rate of investment or investment in capital stock, as it’s also called, dropped. And this trend has only increased since 2000s. Hmm

 

Levy explains that “the [rate of investment] has been trending steadily downward ever since 1970, and plummeted after 2000. This has continued while, at the same time, entering 2016, U.S. corporations sat on some $1.9 trillion in cash, which they have not yet invested. Gordon does not include the broken state of U.S. investment as a “headwind”—even as so much money sloshes around domestic and global financial markets, inflating asset prices and thereby contributing directly to the growth of wealth and income inequality.”

 

One simple explanation of inequality is that business have stopped investing in business. Growth, as a goal, leads businesses to hoard cash instead of reinvesting. This leads to the worst of all possible worlds: “The chief economic problem today is not that we do not have enough wealth, but that we do not have the ability to direct it towards the most worthy of human aspirations.”

 

The Orchid Thief by Susan Orlean

 

People are crazy for orchids.

 

Bruno Latour, the Post-Truth Philosopher, Mounts a Defense of Science (The New York Times)

and

The Philosopher Redefining Inequality by Nathan Heller (The New Yorker)

 

Bruno Latour theorized that scientific ideas make the world, scientists don’t discover buried truths. Scientists felt this might be an attack, but Latour actually loves them. He is, as a philosopher, not comfortable saying that gravity exists without the frame of scientific inquiry. His position is similar to that of the pragmatists (William James, John Dewey, etc): ideas are tools. I’m not interested in pure science unfortunately, but I like pragmatism.

 

In Heller’s profile, he digs into University of Michigan’s Elizabeth Anderson, a professor who named her chair after John Dewey. I don’t know if she calls herself a pragmatist, but her ideas stem from that tradition. She is looking to see how ideas work in the world, not how they are supposed to work. This leads to a rethinking of how inequality comes to exist.

 

The Neoliberal Optimism Industry (Citations Needed)

and

Accentuate the Positive by Anthony Gottlieb (NY Review of Books)

and

Consolation Prizes by Alex Pareene (The Baffler)

 

There is sector of thinking that posits that things have never been better (so stop complaining!). It is occupied by thinkers like Malcolm Gladwell, Steven Pinker and Bill Gates. Pinker wrote a book many years ago about why violence has declined and has a new book about why capitalism has raised the standard of living for everyone on the planet. Not to be glib (or repetitive) but why, in that case, does poverty still exist? The rhetorical twist of the optimism industry is a rebuttal to protestors and reformers,  and it is an obsequious theory. It’s tailor-made for those in power. In “Consolation Prizes” Pareene explains how we’ve come to believe that the ability to buy consumer goods, alone, makes poverty okay, as opposed to other countries that provide healthcare and education by reducing disposable income.

 

Everyone hates open offices. Here’s why they still exist By Katharine Schwab (Fast Company)

 

Open offices are a way to indicate a company’s value to venture capitalists and talent. The goal is “not to improve productivity and collaboration, but to signal that the company [is] doing something interesting.”

 

Cubicles and offices are expensive, which apparently matters more that helping people get things done.