all the cool kids are doing it

A few weeks ago, "This American Life" did another episode ("Inside Job") about the economic crisis. This one focused on a firm named "Magnetar" (after a breed of neutron star with obscenely strong magnetic fields; that is about the extent of their coolness; sort of; maybe; I'm having a hard time parsing this one). This firm made an obscene amount of money off of the crisis by (and this is the executive summary; you should really listen to the episode)

a) duping larger firms into investing in mortgage-backed securities. I say "duping" because these larger firms only invested in said securities because Magnetar volunteered to buy up their least stable part (in effect, agreeing to be the fall-guy for the investment). However, unlike the well-mannered fall-guys of mafia mythology, Magnetar was actually

b) betting heavily against those securities.

The idea was that, while Magnetar would certainly lose money on account of part (a) when the securities failed, that amount would pale in comparison to the amount of money they would make in part (b). One of the theses of the "This American Life" episode is that Magnetar started doing this right as the market was beginning to figure out that mortgage-backed securities were a bad idea (back in 2005). By volunteering to be everyone else's fall guy in part (a) Magnetar breathed life into a pretty bad idea and helped bring on 2008.

I am sad to say that none of this seems to me as clear-cut as it should.

Obviously, what Magnetar did was bad for a lot of people, but, at the same time, I can't shake the feeling that "they never promised anyone that they would look out for society as a whole; all they ever said was that they would make an obscene amount of money, and, as I said, they made good on that one."

Everyone keeps talking about "the demise of the American Dream," both in terms of health care and in terms of the economy and its possible solutions. Is it possible that this crisis is the American Dream: making aforementioned obscene amounts of money at the expense of quite literally everyone else in the country? I mean, as a nation, we're not really big on social responsibility. Our national identity seems pretty rooted in proving how much more awesome our nation is than everyone else's, not in anything we concretely do as a nation.

There's a stanza in the Springsteen song "A Long Walk Home"

"That flag flying over the courthouse // means certain things are set in stone // who we are, what we'll do // and what we won't."

I wonder if that isn't a little optimistic. Does our flag really stand for things we will do, or just things we won't? We won't abridge freedom of speech. That's great. We won't torture. That's obviously not true, but it's probably the point of the song. What will we do? We will send in the Marines to topple dictators (I'm not sure I believe that, either, but let's just take it as a given for the sake of argument). Okay, fine, we'll prove that our military is stronger than yours. Will we give cheap medical care to the least able among us? Who knows? Not without screaming about communism and fascism. Will we use our intellectual and industrial gifts to do something positive for the planet, or will we hide behind China and India's greenhouse gas emissions as if the words "per capita" don't actually mean anything? To whom are we actually responsible?

Obviously, I'm still coming down from having just read Ursula K. Leguin's "The Dispossessed." I don't understand why that book wasn't on my first year Core reading list and "the Communist Manifesto" was.

(This post is the bloviating offspring of what was going to be a comment on something Charles said on his blog)

(I'm tempted to edit this so the word "obscene" doesn't appear so often; I hate over-using words; it seems appropriate, though)

(It's also possible that the problem is in me. The first time I learned to play Hearts, I cheated. The rules didn't make sense to me. You were supposed to play in a way that was sub-optimal, but there was no external enforcement mechanism and no transparency by which other players could check that you weren't cheating. I think I was 23 at the time. I can't tell whether or not that supports my thesis.)