Author: ken

The Nightmare at Beautyrest

In our world almost anything can become a commodity.  Still it came as something of a shock to read in Sunday ’s New York Times how the Simmons company, a producer of some of our most comfortable commodities, was turned into a commodity itself and sliced, diced and mangled in the process.

The story in brief:  Simmons, the manufacturer of Beautyrest mattresses, announced it will file for bankruptcy protection, “as part of an agreement by its current owners to sell the company — the seventh time it has been sold in a little more than two decades.”  The Times goes on:  “But Thomas H. Lee Partners of Boston has not only escaped unscathed, it has made a profit. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company’s fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise….

“Wall Street investment banks also cashed in. They collected millions for helping to arrange the takeovers and for selling the bonds that made those deals possible. All told, the various private equity owners have made around $750 million in profits from Simmons over the years.”  On the other hand, the Times points out, this is devastating news for its employees, bondholders and other investors.  (See “Buyout Firms Prospered as a Company’s Debt Soared.”)

As citizens of our society, we tend to think that companies are primarily in business to produce goods and services that are useful and fairly priced.  At the same time, we are dimly aware that, for the financial industry, businesses are commodities themselves – to be exploited as much as possible for the financial gains they offer to those who buy and sell them, break them up, recapitalize them, and sell off their assets.

Private equity firms can determine if the business is over-priced or under-priced, has disposable assets, significant liabilities, is a good candidate for a takeover, and so forth. And, indeed, huge sums of money can be made by leveraging the assets of such companies, as the Simmons case illustrates.  Usually the rest of us do not grasp what is going on behind the scenes, though we read about the acquisitions and sales, the name changes and mergers. The owners reap windfall profits, often ending up placing the companies in extremely exposed and vulnerable positions.

It would be like a home-owner who uses his home to back an equity loan to buy another home, strips it, and then sells it to someone else.  Or a tenant who renovates extensively and manages to charge the home itself for the cost.  Home-owners, alas, cannot do that – as we have learned again and again.  They are stuck with the expense and the loss.

In considering reforms to our financial industry, we might want to consider such forms of abuse, costly to employees, communities that accommodate businesses, as well as other investors who find themselves empty handed at the end of the process.  But first we have to wake up to the fact that the producers of commodities become commodities themselves for an industry that often has little regard for their intrinsic value.

What Do Celebrity Pundits Actually Do?

Glen Beck, Rush Limbaugh, Sean Hannity – they sure make a lot of noise and get a lot of attention. But what is their impact? How do they affect the political process?

They don’t seem to change anyone’s votes, as David Brooks pointed out last week in his New York Times column. Reviewing the election campaigns of the past few years, he concludes: “It is a story of remarkable volume and utter weakness. It is the story of media mavens who claim to represent a hidden majority but who in fact represent a mere niche — even in the Republican Party. It is a story as old as ‘The Wizard of Oz,’ of grand illusions and small men behind the curtain.” (See “The Wizard of Beck.”)

It is understandable that the pundits themselves would get caught up in their own pretense of power. But they do have followers, and the stations that carry them do make money. Almost certainly, no one listens to them to help make up their minds. They may want a new horror story to retail or a catchy phrase to repeat, but they already know what they think. So why do they listen?

We might better think of these media phenomena as sports events or rock concerts. Sports fans don’t watch their favorite teams in order to make up their minds about continuing to root for them. The followers of rock stars aren’t there to consider buying their newest CDs. The crowd is pumped up, engaged, sharing a communal experience.

A closer analogy might be a political rally, where citizens come together to support a candidate or protest a government policy. They come to reaffirm what they already know. To be sure, inevitably there are speeches and ideas are expressed. It can look like a discussion or the presentation of a case, a chance to think, but really it is a form of communal enjoyment, a ritual, an immersion in a larger process.

On one level, then, these celebrity pundits are part of a larger development in our culture: news as entertainment. Less and less do people watch or read the news to be informed. They want to be excited, moved, horrified. They seek some form of emotional distraction or release. They want to enjoy themselves.

On another level, this represents a search for communal experience. As our real communities are increasingly broken and fragmented, we seek connection through mass media and virtual experience.

If we think of it that way, it is easier to understand that the celebrity pundits are not manipulating public opinion, as they would like to think, but actually they are themselves being manipulated to serve a demand and a need. They have to maintain the pace, find the new diversions, keep the entertainment coming. And, judging from their continuing celebrity, they do seem to succeed at that quite well.

It just bears an uncanny resemblance to politics.

The Evidence Mounts

I was relieved to read Tom Friedman’s column in this morning’s New York Times, not because he agreed with me so much as that he saw what I saw – and he spoke up.  When you are trying to track down pernicious unconscious ideas and impulses, you need as much help as you can get from other minds that can be either taken in and confused by what they are told, or wake up to see the anomalies and contradictions that don’t add up.  (See ”Where Did ‘We’ Go?”)

He also provided the very helpful association to Rabin’s assassination 14 years ago.  Moreover, his column provoked the additional benefit of drawing an overreaction from Michael Steele, Chairman of the National Republican Committee, who called him a “nut job” for being concerned about the Facebook poll.  Steele illustrated an astonishing lack of perspective about what is at stake, choosing to attack the messenger rather than think about those who promoted the idea of assassination as something one could just have an opinion about.

If I were more relaxed about this, I could be sympathetic to Steele.  He has a tough job, defending a rabid bunch of politicians saying increasingly outrageous things, congressmen who deny the humanity of the president or accuse him of lying in the middle of a speech to Congress.  And other bits of evidence accumulate about the increasingly virulent attitudes being expressed by the right.

For example, The Huffington Post reported today:  “Newsmax columnist John Perry wrote Tuesday that President Obama ‘is inviting a military coup’ and that it might not be such a bad thing: ‘Imagine a bloodless coup to restore and defend the Constitution through an interim administration that would do the serious business of governing and defending the nation. Skilled, military-trained, nation-builders would replace accountability-challenged, radical-left commissars.’ (Newsmax appears to have taken the column down.)”

That’s not all:  “On the same day conservative talk-radio host Jim Quinn directly addressed U.S. troops, telling them that Obama is ‘gonna get you killed.’  Media Matters points out that the appeals to the military follow a wave of rhetoric from the right suggesting that civilian violence against the government might be justified. Chuck Norris has asked if people are ready for ‘a second American Revolution.’ RedState’s Erick Erickson has asked, ‘At what point do the people … march down to their state legislator’s house, pull him outside, and beat him to a bloody pulp?’ Radio host Michael Savage declared recently that ‘we’re going to have a revolution in this country.’” (See “Obama Coup Fantasized About By Right-Wing Fringe.”)

I want to express my deep appreciation to my colleague Todd Essig for also calling attention to this issue, and offering his own critique of Steels’s comments – while also noting my efforts to comment on the Facebook poll.  I don’t know how the mainstream media will respond.  Perhaps Friedman’s engagement will arouse more commentary, preventing this issue from persisting unchallenged in our social unconscious.

I deeply believe we have to speak out about it.

A Glimpse of Our Social Unconscious on Facebook

Maybe you didn’t see this:  a poll posted on Facebook Saturday asked, “Should Obama Be Killed.”  The poll was quickly removed, but not before 730 people responded.  According to the Huffington Post yesterday, the Secret Service is investigating. (See”Obama Facebook Poll: ‘Should Obama Be Killed’ Pulled from Site.”)

There is nothing about it in The New York Times today or The Wall Street Journal, and a quick survey of other blogs brought up very little — though apparently CNN noted it this morning and The Associated Press had a story.  The absence of corroboration makes one doubt oneself.  Was it a hoax?  Did I imagine it?

As a psychoanalyst, I have learned to take fleeting impressions and thoughts seriously.  They don’t tell us what a person is determined to do, but they do tell us what is buried in the mind – especially what people don’t want to know they know.  And the fragmentary record along with self-doubt and confusion are also hallmarks of an unconscious process – a process struggling to remain unconscious.  The Times and the Journal may think the Facebook poll isn’t really news, more of a prank.  They may also believe it would be irresponsible to report it, an indirect way to promote a heinous idea.  But my experience also tells me that ideas that are unacknowledged have an unfortunate tendency to live on.

What lends support to this thought is a host of recent corroborating events. Over the weekend, Trent Franks (R-Ariz) accused the president of being “an enemy of humanity.”  (See Politico, “Franks: Obama is the “enemy of humanity.”)  Two weeks ago, the House formally rebuked Joe Wilson (R-SC) for shouting “You lie” during the president’s address. Recently a US Census worker was brutally murdered.

I don’t worry about the president so much.  I think the Secret Service does not discount “cranks” as readily as we tend to do.  But I do worry about us, and the level of hatred and violence we are coming to accept.  Shortly after the election, many expressed their fear that Obama would be assassinated, as Martin Luther King had been, and John F. and then Robert Kennedy.  The idea of assassination is deeply embedded in our minds, a part of our political consciousness.

Fanatics may not get at the object of their hatred, but that does not stop them from getting at someone else, nearer to hand.  And the first step is often to see them as less than human, a different species.  That makes it easier to kill them.

Uncovering the Flaws in G.D.P.

We have gotten into the habit of measuring our prosperity by the size of our Gross Domestic Product, the sum total of the goods and services we produce.  It’s a kind of common sense index, analogous to how we use the height and weight of our children to measure how they are thriving.  It is one of those simple facts we take for granted.

But that is among the ideas the Great Recession is calling into question.  The inflated values of the real estate bubble not only were unstable, they actually ended up producing more misery for those forced to abandon their homes because they could not keep up mortgage payments.  And all those bonuses earned in the financial industry for devising sophisticated financial instruments that fueled the collapse – were they reliable signs of healthy growth?

Last week two Nobel prize-winning economists, Joseph Stiglitz and  Amartya Sen, unveiled a competing concept, commissioned by French President Sarkozy, for presentation to the G-20 in Pittsburg.  According to a story in The New York Times, Stiglitz said: “G.D.P. as a measure of how well we were doing . . . doesn’t tell us whether it’s sustainable. . . . What began as a measure of market performance has increasingly become a measure of social performance, and that’s wrong.”  Their plan concludes: “Instead of centering assessments on the goods and services an economy produces, policy makers would do better to focus on the material well-being of typical people by measuring income and consumption, along with the availability of health care and education.”  (See, “Emphasis on Growth is Called Misguided.”)

Last Spring, traveling in Bhutan, I encountered the concept of Gross National Happiness, introduced by their king, about 35 years ago.  Trying to find a middle way for his country’s economic development, the king began by rejecting the West’s common sense measure of growth.  It seemed quixotic, but since the concept was introduced there have been three international conferences devoted to exploring it.  GNH in Bhutan now includes measures of education, health, and environmental conservation.

France and Bhutan may not be the most promising sources for a new economic measure, but the important point here may be that, now, there is another crack in the pillar of economic fundamentalism.  It has become clearer that G.N.P. is a concept, a flawed construct, not a fact – and what we don’t know we know is how facts are often simply ideas that have become established.  If questioned, they can be changed.  Inevitably, they will be.