The dangers of living in a zero-sum world economy
By Martin Wolf
Published: December 18 2007 19:02 Financial Times
We live in a positive-sum world economy and have done so for about two centuries. This, I believe, is why democracy has become a political norm, empires have largely vanished, legal slavery and serfdom have disappeared and measures of well-being have risen almost everywhere. What then do I mean by a positive-sum economy? It is one in which everybody can become better off. It is one in which real incomes per head are able to rise indefinitely.
How long might such a world last, and what might happen if it ends? The debate on the connected issues of climate change and energy security raises these absolutely central questions. As I argued in a previous column (“Welcome to a world of runaway energy demand”, November 14, 2007), fossilised sunlight and ideas have been the twin drivers of the world economy. So nothing less is at stake than the world we inhabit, by which I mean its political and economic, as well as physical, nature.
According to Angus Maddison, the economic historian, humanity’s average real income per head has risen 10-fold since 1820.* Increases have also occurred almost everywhere, albeit to hugely divergent extents: US incomes per head have risen 23-fold and those of Africa merely four-fold. Moreover, huge improvements have happened, despite a more than six-fold increase in the world’s population.
It is an astonishing story with hugely desirable consequences. Clever use of commercial energy has immeasurably increased the range of goods and services available. It has also substantially reduced both our own drudgery and our dependence on that of others. Serfs and slaves need no longer satisfy the appetites of narrow elites. Women need no longer devote their lives to the demands of domesticity. Consistent rises in real incomes per head have transformed our economic lives.
What is less widely understood is that they have also transformed politics. A zero-sum economy leads, inevitably, to repression at home and plunder abroad. In traditional agrarian societies the surpluses extracted from the vast majority of peasants supported the relatively luxurious lifestyles of military, bureaucratic and noble elites. The only way to increase the prosperity of an entire people was to steal from another one. Some peoples made almost a business out of such plunder: the Roman republic was one example; the nomads of the Eurasian steppes, who reached their apogee of success under Genghis Khan and his successors, were another. The European conquerors of the 16th to 18th centuries were, arguably, a third. In a world of stagnant living standards the gains of one group came at the expense of equal, if not still bigger, losses for others. This, then, was a world of savage repression and brutal predation.
The move to the positive-sum economy transformed all this fundamentally, albeit far more slowly than it might have done. It just took time for people to realise how much had changed. Democratic politics became increasingly workable because it was feasible for everybody to become steadily better off. People fight to keep what they have more fiercely than to obtain what they do not have. This is the “endowment effect”. So, in the new positive-sum world, elites were willing to tolerate the enfranchisement of the masses. The fact that they no longer depended on forced labour made this shift easier still. Consensual politics, and so democracy, became the political norm.
Equally, a positive-sum global economy ought to end the permanent state of war that characterised the pre-modern world. In such an economy, internal development and external commerce offer better prospects for virtually everybody than does international conflict. While trade always offered the possibility of positive-sum exchange, as Adam Smith argued, the gains were small compared with what is offered today by the combination of peaceful internal development and expanding international trade. Unfortunately, it took almost two centuries after the “industrial revolution” for states to realise that neither war nor empire was a “game” worth playing.
Nuclear weapons and the rise of the developmental state have made war among great powers obsolete. It is no accident then that most of the conflicts on the planet have been civil wars in poor countries that had failed to build the domestic foundations of the positive-sum economy. But China and India have now achieved just that. Perhaps the most important single fact about the world we live in is that the leaderships of these two countries have staked their political legitimacy on domestic economic development and peaceful international commerce.
The age of the plunderer is past. Or is it? The biggest point about debates on climate change and energy supply is that they bring back the question of limits. If, for example, the entire planet emitted CO2 at the rate the US does today, global emissions would be almost five times greater. The same, roughly speaking, is true of energy use per head. This is why climate change and energy security are such geopolitically significant issues. For if there are limits to emissions, there may also be limits to growth. But if there are indeed limits to growth, the political underpinnings of our world fall apart. Intense distributional conflicts must then re-emerge – indeed, they are already emerging – within and among countries.
The response of many, notably environmentalists and people with socialist leanings, is to welcome such conflicts. These, they believe, are the birth-pangs of a just global society. I strongly disagree. It is far more likely to be a step towards a world characterised by catastrophic conflict and brutal repression. This is why I sympathise with the hostile response of classical liberals and libertarians to the very notion of such limits, since they view them as the death-knell of any hopes for domestic freedom and peaceful foreign relations.
The optimists believe that economic growth can and will continue. The pessimists believe either that it will not do so or that it must not if we are to avoid the destruction of the environment. I think we have to try to marry what makes sense in these opposing visions. It is vital for hopes of peace and freedom that we sustain the positive-sum world economy. But it is no less vital to tackle the environmental and resource challenges the economy has thrown up. This is going to be hard. The condition for success is successful investment in human ingenuity. Without it, dark days will come. That has never been truer than it is today.
*Contours of the World Economy, 1-2030 AD, Oxford University Press 2007
martin.wolf@ft.com
Monday, December 24, 2007
Monday, December 17, 2007
The Shadow Banking System
Out of the shadows: How banking’s secret system broke down
By Gillian Tett and Paul J Davies
Published: December 16 2007 18:33 Financial Times
When the New York markets open on Monday, all eyes will be on Wall Street’s banks. As the US Federal Reserve, in a bid to ease the liquidity crisis, holds a novel type of money market auction to inject some $20bn of funds into financial institutions, investors and policymakers will be watching closely to see how many large banks bid for how much cash – and what that, in turn, indicates about their state of health.
Yet while investors are scrutinising some of the industry’s best-known names, a spectre will be silently haunting events: the state of the little-known, so-called “shadow” banking system.
A plethora of opaque institutions and vehicles have sprung up in American and European markets this decade, and they have come to play an important role in providing credit across the financial system. Until the summer, structured investment vehicles (SIVs) and collateralised debt obligations (CDOs) attracted little attention outside specialist financial circles. Though often affiliated to major banks, they were not always fully recognised on balance sheets. These institutions, moreover, have never been part of the “official” banking system: they are unable, for example, to participate in Monday’s Fed auction.
But as the credit crisis enters its fifth month, it has become clear that one of the key causes of the turmoil is that parts of this hidden world are imploding. This in turn is creating huge instability for “real” banks – not least because regulators and bankers alike have been badly wrong-footed by the degree to which the two are entwined.
“What we are witnessing is essentially the breakdown of our modern-day banking system, a complex of leveraged lending [that is] so hard to understand,” Bill Gross, head of Pimco asset management group recently wrote. “Colleagues call it the ‘shadow banking system’ because it has lain hidden for years, untouched by regulation yet free to magically and mystically create and then package subprime loans in [ways] that only Wall Street wizards could explain.”
By any standards, the activities of this shadow realm have become startling. Traditionally, the main source of credit in the financial world was the official banks, which typically forged business by making loans to companies or consumers. They retained this credit risk on their books, meaning that they were on the hook if loans turned sour.
However, in the past decade, this financial model has changed radically. On the one hand, banks have increasingly started to sell their credit risk to other investment groups, either via direct loan sales or by repackaging loans into bonds; at the same time, regulatory reforms have permitted the banks to reduce the amount of capital that they need to hold against the danger that borrowers default.
The net consequence is that the western financial system embraced what Paul Tucker, head of markets at the Bank of England, has described as the age of “vehicular finance”. This system has given banks huge incentives to pass on their loans to new vehicles, either by creating these themselves or by sponsoring outside fund managers to run them.
The role of such entities in creating credit has increased vastly in the past three years. For example, the asset-backed commercial paper market, which supplies the lion’s share of funding to SIVs and conduits in the form of cheap, short-term cash, saw a step-change in growth at the end of 2004. The volumes of such paper in issue had fluctuated between $600bn and $700bn for at least four years; at the market’s peak this summer they stood at almost $1,200bn.
“The shadow banking world has expanded at an amazing rate,” says Bob Janjuah, credit analyst at Royal Bank of Scotland, who estimates that these shadow banks could have accounted for half of all net new credit creation in the past two years in the US.
Because these vehicles typically borrow heavily to finance their activities, they have also been a key reason why leverage – or debt levels – across the financial world has risen so fast without regulators, or ordinary investors, being fully aware of this boom.
The involvement of hedge funds, themselves highly geared, as providers of the equity at the foundations of this system illustrates why shadow banking can have such an outsized impact on the supply of credit. Satyajit Das, an author and derivatives industry expert, cites an example where just $10m of real, unlevered hedge fund money supports an $850m mortgage-backed deal. This means $1 of real money is being used to create $85 of mortgage lending – credit creation far beyond the wildest dreams of high-street bankers.
Since SIVs and CDOs have never been in the business of gathering deposits from customers, their significance to the economic and financial system has not been widely recognised by regulators and policymakers. However, the huge expansion of the SIV and conduit industries in particular was fuelled by short-term debt bought by so-called money-market funds. Retail investors, schools, hospitals and pension funds have placed billions of dollars in such funds, yet none of this system comes under bank regulations.
The problem now is that the business model behind parts of this shadow banking world looks increasingly shaky, particularly among the SIVs. There is huge concern in the US that some of these money-market funds might not return all the money people have entrusted to them. “You have a whole pool of investors who have been putting their money into SIVs thinking that they were as safe, or even safer, than real banks,” says the head of investment banking at one big financial institution.
The role of regulators in this world was to a great degree replaced by the credit rating agencies, which awarded high, ultra-safe ratings to the debt issued by SIVs and other vehicles on the basis of historical analysis of the probabilities of defaults and losses across the shadow banking system.
However, this year’s credit turmoil has brought ratings downgrades to many of these instruments. “It’s clear that we can no longer solely rely on an investment’s credit rating when making management decisions,” says Alex Fink, chief financial officer of a state fund in Florida that was recently forced to freeze withdrawals after investors pulled out $13bn amid concerns over its exposure to securities backed by subprime mortgages. The securities had held top-notch ratings.
But it is not just in Florida or even the US where such pain has been felt – money-market funds run by BNP Paribas and Axa of France were among the first to freeze withdrawals back in August. It is a process that some regulators, such as Axel Weber, the Bundesbank president, liken to an old-fashioned “bank run” – albeit one that is now happening in the shadow bank sector rather than at visible high-street names.
The result of this is that the shadow banking sector is now shrinking at an even faster rate than it grew. The SIV sector has seen assets fall in value by as much as $150bn from a peak of more than $400bn, while the asset-backed commercial paper market itself is almost $400bn off its peak in July.
T he almost inevitable demise of the SIV is unlikely to trouble many regulators in the long term, but in the short term it leaves policymakers and bankers with a big problem.
Precisely because the sector has been so widely ignored in recent years, there has been relatively little debate about who might be responsible if it ever ran into problems. After all, SIVs – like other parts of the “vehicular finance” world – do not have any right to call on central banks as lenders of last resort, since they are not part of the official banking system.
Most of these vehicles, and the shadow banking sector as a whole, is supported by back-up liquidity lines with “real” banks – promises to lend money that bankers never imagined they would have to deliver on. Only now are these private-sector “lenders of last resort” being fully tested, as can be seen in the moves by HSBC and Citigroup, among others, to take tens of billions of dollars of lending back on to their balance sheets. Such rescues are taking place in spite of banks’ continued protestations that they have no legal responsibility to act.
This illustrates the huge level of uncertainty about exactly what banks will do and when – uncertainty that is compounded by the opaque nature of the vehicles themselves. For investors, regulators and central bankers – let alone for politicians – it is impossible to predict how this process will play out.
“As 2007 comes to a close, banks are having to deal with an expansion of their balance sheets, via an unwinding of SIV assets or retention of loans that banks are currently unable to sell,” says David Brickman, analyst at Lehman Brothers.
T his uncertainty has sparked money markets tensions – prompting the Fed’s action on Monday. But it is also creating concern about whether banks will soon cut their lending to the real economy – thus hurting growth.
Some investment bankers insist that the outlook is not so dire. After all, while the subprime mortgage-linked world has seized up – in Europe as much as the US – activity in other parts of corporate lending remains relatively robust. Indeed, investment vehicles linked to corporate debt, such as collateralised loan obligations (CLOs), remain a bright spot in the broader securitisation markets.
But central bankers are clearly concerned. The BoE’s Mr Tucker referred in a speech last week to a series of recent papers by the US economists Adrian Tobias and Hyun Shin, which argue that the credit cycle will be amplified by the kind of balance-sheet management employed by the shadow banking sector and modern banks themselves. “When the music stops, the process [of credit expansion] can be reversed as falls in asset values, leverage and liquidity feed on each other,” said Mr Tucker.
One thing that is clear is that regulators are facing mounting pressure to change their attitude towards these “shadow” banks. Hector Sants, chief executive of the UK’s financial watchdog, said last week that regulators’ ability to monitor the financial system had been hampered by banks’ use of “opaque” off-balance sheet financing and that this “needs to be addressed”.
There is also growing debate about whether a system that relies so heavily on non-bank lenders should also have some kind of “buyer of last resort” to stand behind the markets, much as central banks do for the banking system.
“Lending has become disintermediated to the extent that in many sectors the majority of lending is done not by banks but by investors. So if there is a run on the markets through the evaporations of liquidity, who is there to step in and provide that liquidity?” asks Alexander Batchvarov, head of structured product research at Merrill Lynch. “Previously we saw a similar situation with the collapse of LTCM. Today it is structured finance. Tomorrow it will be something else. Maybe we can study this crisis and come up with some form of structure that in future can perform that liquidity-providing, buyer-of-last-resort role.”
In some ways, the co-ordinated actions of the central banks in coming days are already supplying funds for this – but on a very modest scale given the size of the problem. Consequently, in the months ahead regulators and financiers will face mounting pressure to make the system of “vehicular finance” less complex and opaque. One result of the 2007 credit shock, in other words, is that the shadow banks will become less shadowy in the future.
As Pimco’s Mr Gross notes: “Investors should anticipate that the shadow’s successor will be a more conservative, less risk-oriented banking system.”
Copyright The Financial Times Limited 2007
By Gillian Tett and Paul J Davies
Published: December 16 2007 18:33 Financial Times
When the New York markets open on Monday, all eyes will be on Wall Street’s banks. As the US Federal Reserve, in a bid to ease the liquidity crisis, holds a novel type of money market auction to inject some $20bn of funds into financial institutions, investors and policymakers will be watching closely to see how many large banks bid for how much cash – and what that, in turn, indicates about their state of health.
Yet while investors are scrutinising some of the industry’s best-known names, a spectre will be silently haunting events: the state of the little-known, so-called “shadow” banking system.
A plethora of opaque institutions and vehicles have sprung up in American and European markets this decade, and they have come to play an important role in providing credit across the financial system. Until the summer, structured investment vehicles (SIVs) and collateralised debt obligations (CDOs) attracted little attention outside specialist financial circles. Though often affiliated to major banks, they were not always fully recognised on balance sheets. These institutions, moreover, have never been part of the “official” banking system: they are unable, for example, to participate in Monday’s Fed auction.
But as the credit crisis enters its fifth month, it has become clear that one of the key causes of the turmoil is that parts of this hidden world are imploding. This in turn is creating huge instability for “real” banks – not least because regulators and bankers alike have been badly wrong-footed by the degree to which the two are entwined.
“What we are witnessing is essentially the breakdown of our modern-day banking system, a complex of leveraged lending [that is] so hard to understand,” Bill Gross, head of Pimco asset management group recently wrote. “Colleagues call it the ‘shadow banking system’ because it has lain hidden for years, untouched by regulation yet free to magically and mystically create and then package subprime loans in [ways] that only Wall Street wizards could explain.”
By any standards, the activities of this shadow realm have become startling. Traditionally, the main source of credit in the financial world was the official banks, which typically forged business by making loans to companies or consumers. They retained this credit risk on their books, meaning that they were on the hook if loans turned sour.
However, in the past decade, this financial model has changed radically. On the one hand, banks have increasingly started to sell their credit risk to other investment groups, either via direct loan sales or by repackaging loans into bonds; at the same time, regulatory reforms have permitted the banks to reduce the amount of capital that they need to hold against the danger that borrowers default.
The net consequence is that the western financial system embraced what Paul Tucker, head of markets at the Bank of England, has described as the age of “vehicular finance”. This system has given banks huge incentives to pass on their loans to new vehicles, either by creating these themselves or by sponsoring outside fund managers to run them.
The role of such entities in creating credit has increased vastly in the past three years. For example, the asset-backed commercial paper market, which supplies the lion’s share of funding to SIVs and conduits in the form of cheap, short-term cash, saw a step-change in growth at the end of 2004. The volumes of such paper in issue had fluctuated between $600bn and $700bn for at least four years; at the market’s peak this summer they stood at almost $1,200bn.
“The shadow banking world has expanded at an amazing rate,” says Bob Janjuah, credit analyst at Royal Bank of Scotland, who estimates that these shadow banks could have accounted for half of all net new credit creation in the past two years in the US.
Because these vehicles typically borrow heavily to finance their activities, they have also been a key reason why leverage – or debt levels – across the financial world has risen so fast without regulators, or ordinary investors, being fully aware of this boom.
The involvement of hedge funds, themselves highly geared, as providers of the equity at the foundations of this system illustrates why shadow banking can have such an outsized impact on the supply of credit. Satyajit Das, an author and derivatives industry expert, cites an example where just $10m of real, unlevered hedge fund money supports an $850m mortgage-backed deal. This means $1 of real money is being used to create $85 of mortgage lending – credit creation far beyond the wildest dreams of high-street bankers.
Since SIVs and CDOs have never been in the business of gathering deposits from customers, their significance to the economic and financial system has not been widely recognised by regulators and policymakers. However, the huge expansion of the SIV and conduit industries in particular was fuelled by short-term debt bought by so-called money-market funds. Retail investors, schools, hospitals and pension funds have placed billions of dollars in such funds, yet none of this system comes under bank regulations.
The problem now is that the business model behind parts of this shadow banking world looks increasingly shaky, particularly among the SIVs. There is huge concern in the US that some of these money-market funds might not return all the money people have entrusted to them. “You have a whole pool of investors who have been putting their money into SIVs thinking that they were as safe, or even safer, than real banks,” says the head of investment banking at one big financial institution.
The role of regulators in this world was to a great degree replaced by the credit rating agencies, which awarded high, ultra-safe ratings to the debt issued by SIVs and other vehicles on the basis of historical analysis of the probabilities of defaults and losses across the shadow banking system.
However, this year’s credit turmoil has brought ratings downgrades to many of these instruments. “It’s clear that we can no longer solely rely on an investment’s credit rating when making management decisions,” says Alex Fink, chief financial officer of a state fund in Florida that was recently forced to freeze withdrawals after investors pulled out $13bn amid concerns over its exposure to securities backed by subprime mortgages. The securities had held top-notch ratings.
But it is not just in Florida or even the US where such pain has been felt – money-market funds run by BNP Paribas and Axa of France were among the first to freeze withdrawals back in August. It is a process that some regulators, such as Axel Weber, the Bundesbank president, liken to an old-fashioned “bank run” – albeit one that is now happening in the shadow bank sector rather than at visible high-street names.
The result of this is that the shadow banking sector is now shrinking at an even faster rate than it grew. The SIV sector has seen assets fall in value by as much as $150bn from a peak of more than $400bn, while the asset-backed commercial paper market itself is almost $400bn off its peak in July.
T he almost inevitable demise of the SIV is unlikely to trouble many regulators in the long term, but in the short term it leaves policymakers and bankers with a big problem.
Precisely because the sector has been so widely ignored in recent years, there has been relatively little debate about who might be responsible if it ever ran into problems. After all, SIVs – like other parts of the “vehicular finance” world – do not have any right to call on central banks as lenders of last resort, since they are not part of the official banking system.
Most of these vehicles, and the shadow banking sector as a whole, is supported by back-up liquidity lines with “real” banks – promises to lend money that bankers never imagined they would have to deliver on. Only now are these private-sector “lenders of last resort” being fully tested, as can be seen in the moves by HSBC and Citigroup, among others, to take tens of billions of dollars of lending back on to their balance sheets. Such rescues are taking place in spite of banks’ continued protestations that they have no legal responsibility to act.
This illustrates the huge level of uncertainty about exactly what banks will do and when – uncertainty that is compounded by the opaque nature of the vehicles themselves. For investors, regulators and central bankers – let alone for politicians – it is impossible to predict how this process will play out.
“As 2007 comes to a close, banks are having to deal with an expansion of their balance sheets, via an unwinding of SIV assets or retention of loans that banks are currently unable to sell,” says David Brickman, analyst at Lehman Brothers.
T his uncertainty has sparked money markets tensions – prompting the Fed’s action on Monday. But it is also creating concern about whether banks will soon cut their lending to the real economy – thus hurting growth.
Some investment bankers insist that the outlook is not so dire. After all, while the subprime mortgage-linked world has seized up – in Europe as much as the US – activity in other parts of corporate lending remains relatively robust. Indeed, investment vehicles linked to corporate debt, such as collateralised loan obligations (CLOs), remain a bright spot in the broader securitisation markets.
But central bankers are clearly concerned. The BoE’s Mr Tucker referred in a speech last week to a series of recent papers by the US economists Adrian Tobias and Hyun Shin, which argue that the credit cycle will be amplified by the kind of balance-sheet management employed by the shadow banking sector and modern banks themselves. “When the music stops, the process [of credit expansion] can be reversed as falls in asset values, leverage and liquidity feed on each other,” said Mr Tucker.
One thing that is clear is that regulators are facing mounting pressure to change their attitude towards these “shadow” banks. Hector Sants, chief executive of the UK’s financial watchdog, said last week that regulators’ ability to monitor the financial system had been hampered by banks’ use of “opaque” off-balance sheet financing and that this “needs to be addressed”.
There is also growing debate about whether a system that relies so heavily on non-bank lenders should also have some kind of “buyer of last resort” to stand behind the markets, much as central banks do for the banking system.
“Lending has become disintermediated to the extent that in many sectors the majority of lending is done not by banks but by investors. So if there is a run on the markets through the evaporations of liquidity, who is there to step in and provide that liquidity?” asks Alexander Batchvarov, head of structured product research at Merrill Lynch. “Previously we saw a similar situation with the collapse of LTCM. Today it is structured finance. Tomorrow it will be something else. Maybe we can study this crisis and come up with some form of structure that in future can perform that liquidity-providing, buyer-of-last-resort role.”
In some ways, the co-ordinated actions of the central banks in coming days are already supplying funds for this – but on a very modest scale given the size of the problem. Consequently, in the months ahead regulators and financiers will face mounting pressure to make the system of “vehicular finance” less complex and opaque. One result of the 2007 credit shock, in other words, is that the shadow banks will become less shadowy in the future.
As Pimco’s Mr Gross notes: “Investors should anticipate that the shadow’s successor will be a more conservative, less risk-oriented banking system.”
Copyright The Financial Times Limited 2007
Saturday, December 15, 2007
Workers of the New World Unite!
By John Gapper
Published: December 12 2007
Given that the US has one of the lowest rates of union membership in the industrialised world, it is not the obvious place to find the future of organised labour.
Only about 7.5 per cent of private sector American employees are in a union and many of those are manual workers in manufacturing industries such as carmaking. One has to search hard to find many service sector professionals in unions.
Maybe the simplest explanation for that is that it is not worth joining a union. Although the median US union member earns more than average – $833 per week against the national median of $642 in 2006 – that owes a lot to the fact that many work in the public sector. Many private sector employers ruthlessly exclude unions, as they are allowed to do.
The best-rewarded workers in recent years have not been those with a union on their side but those who can bargain for themselves, or employ an agent or lawyer to do it. The chief executive, the sports star, the actor or actress – anyone who comes under the mantle of “talent” – stands a much greater chance of being well-paid than a union member.
How, then, to account for the sudden upsurge in labour militancy in the unlikely quarter of the television and film industries? For the past six weeks, 12,000 film and television screenwriters in the Writers Guild of America have been on strike to get, among other things, a bigger share of online revenues.
In the past couple of weeks, another dispute has erupted in the television industry. Hundreds of young people employed on long-term freelance contracts by MTV Networks in New York – so-called permalancers – protested after Viacom, MTV’s parent company, changed their contracts to reduce their entitlement to health and pension benefits.
Strange as it sounds, I think these disputes hold lessons for workers in many industries, not just for New York’s “creative class” of media professionals. But they must do more than hark back to the glory days of 20th century unionism.
The driving force for the labour unrest is clear. Film and television companies used to have lots of money because each new form of distribution – from cable television to DVDs – added more revenues. The internet broke the cycle, leading Global Media Intelligence, a research group, to conclude that Hollywood must “begin a serious effort to rein in costs”.
The easiest place to start is staff costs, which is why many employees are feeling the squeeze. So far, however, there are only haphazard signs of Hollywood talent, with its multi-millions share-of-revenue deals, getting pinched. Sumner Redstone, who controls Viacom, noisily broke up with Tom Cruise but most Hollywood stars are still doing fine.
Things are tougher for junior employees – writers, assistants and designers who swarm around film and television studios. Many work from project to project and are officially freelancers, although it would be more accurate to call them employees. This saves tax but means they have poor pension and health benefits.
Striking collectively to gain better terms, or at least to stop employers from weakening the existing ones, sounds like a sensible thing to do. It fits with the union tradition of individuals banding together to raise their bargaining strength.
A short strike that attracts publicity but does not involve much financial sacrifice can be a good weapon. The MTV freelancers have pushed their employer on the defensive with a couple of brief walk-outs that had news value (and could be watched on the internet). They seem to have learned a trick from the short strike at General Motors this year.
A long strike is another matter. The writers’ strike is well into its second month. It has hurt the networks, with late night talk shows off the air and popular dramas about to follow. But writers are themselves losing money and the strike could accelerate the long-term decline in the audience for television and films.
Nor is it obvious that collective bargaining brings the best rewards for employees in the media industry. If an individual is regarded as one among many, his or her rewards are likely to be worse. Writers clearly suffer from being more anonymous and interchangeable than directors or on-screen stars – being part of the “writers’ room” implies lack of individual recognition.
Collective bargaining has a role in this world – to set standard contract terms or percentages for royalties and residuals – but individual negotiation is where the big money lies. Many technicians and writers are freelancers because it suits them: they get greater freedom to work across the industry and earn more.
Where collectivism could bring unadulterated rewards is outside the workplace – by providing health and pension benefits that freelance workers do not get. It is no coincidence that the MTV freelancers were angered by having their health benefits reduced. If you do not have health insurance in the US, you take a huge financial risk.
US unions are starting to take over responsibility for organising health benefits for members; this was a centrepiece of the GM settlement with the United Auto Workers union. Logically, there ought to be a place for unions or mutual organisations to establish health insurance and pensions for freelancers. Indeed, the Freelancers Union, a New York-based mutual group, is already doing so.
The idea that workers should band together outside the workplace is old: the co-operative movement has a long history in both the UK and US. But its insurance-based health system and defined-contribution pension schemes make the US fertile territory for the workers of the new world to unite.
john.gapper@ft.com
© Copyright The Financial Times Ltd 2007.
Published: December 12 2007
Given that the US has one of the lowest rates of union membership in the industrialised world, it is not the obvious place to find the future of organised labour.
Only about 7.5 per cent of private sector American employees are in a union and many of those are manual workers in manufacturing industries such as carmaking. One has to search hard to find many service sector professionals in unions.
Maybe the simplest explanation for that is that it is not worth joining a union. Although the median US union member earns more than average – $833 per week against the national median of $642 in 2006 – that owes a lot to the fact that many work in the public sector. Many private sector employers ruthlessly exclude unions, as they are allowed to do.
The best-rewarded workers in recent years have not been those with a union on their side but those who can bargain for themselves, or employ an agent or lawyer to do it. The chief executive, the sports star, the actor or actress – anyone who comes under the mantle of “talent” – stands a much greater chance of being well-paid than a union member.
How, then, to account for the sudden upsurge in labour militancy in the unlikely quarter of the television and film industries? For the past six weeks, 12,000 film and television screenwriters in the Writers Guild of America have been on strike to get, among other things, a bigger share of online revenues.
In the past couple of weeks, another dispute has erupted in the television industry. Hundreds of young people employed on long-term freelance contracts by MTV Networks in New York – so-called permalancers – protested after Viacom, MTV’s parent company, changed their contracts to reduce their entitlement to health and pension benefits.
Strange as it sounds, I think these disputes hold lessons for workers in many industries, not just for New York’s “creative class” of media professionals. But they must do more than hark back to the glory days of 20th century unionism.
The driving force for the labour unrest is clear. Film and television companies used to have lots of money because each new form of distribution – from cable television to DVDs – added more revenues. The internet broke the cycle, leading Global Media Intelligence, a research group, to conclude that Hollywood must “begin a serious effort to rein in costs”.
The easiest place to start is staff costs, which is why many employees are feeling the squeeze. So far, however, there are only haphazard signs of Hollywood talent, with its multi-millions share-of-revenue deals, getting pinched. Sumner Redstone, who controls Viacom, noisily broke up with Tom Cruise but most Hollywood stars are still doing fine.
Things are tougher for junior employees – writers, assistants and designers who swarm around film and television studios. Many work from project to project and are officially freelancers, although it would be more accurate to call them employees. This saves tax but means they have poor pension and health benefits.
Striking collectively to gain better terms, or at least to stop employers from weakening the existing ones, sounds like a sensible thing to do. It fits with the union tradition of individuals banding together to raise their bargaining strength.
A short strike that attracts publicity but does not involve much financial sacrifice can be a good weapon. The MTV freelancers have pushed their employer on the defensive with a couple of brief walk-outs that had news value (and could be watched on the internet). They seem to have learned a trick from the short strike at General Motors this year.
A long strike is another matter. The writers’ strike is well into its second month. It has hurt the networks, with late night talk shows off the air and popular dramas about to follow. But writers are themselves losing money and the strike could accelerate the long-term decline in the audience for television and films.
Nor is it obvious that collective bargaining brings the best rewards for employees in the media industry. If an individual is regarded as one among many, his or her rewards are likely to be worse. Writers clearly suffer from being more anonymous and interchangeable than directors or on-screen stars – being part of the “writers’ room” implies lack of individual recognition.
Collective bargaining has a role in this world – to set standard contract terms or percentages for royalties and residuals – but individual negotiation is where the big money lies. Many technicians and writers are freelancers because it suits them: they get greater freedom to work across the industry and earn more.
Where collectivism could bring unadulterated rewards is outside the workplace – by providing health and pension benefits that freelance workers do not get. It is no coincidence that the MTV freelancers were angered by having their health benefits reduced. If you do not have health insurance in the US, you take a huge financial risk.
US unions are starting to take over responsibility for organising health benefits for members; this was a centrepiece of the GM settlement with the United Auto Workers union. Logically, there ought to be a place for unions or mutual organisations to establish health insurance and pensions for freelancers. Indeed, the Freelancers Union, a New York-based mutual group, is already doing so.
The idea that workers should band together outside the workplace is old: the co-operative movement has a long history in both the UK and US. But its insurance-based health system and defined-contribution pension schemes make the US fertile territory for the workers of the new world to unite.
john.gapper@ft.com
© Copyright The Financial Times Ltd 2007.
Wednesday, December 12, 2007
Avacados and Fire
London Review of Books
15 November 2007
Diary
Mike Davis
Every year, sometimes in September, but usually in October just before Halloween, when California’s wild vegetation is driest and most combustible, high pressure over the Great Basin and Colorado Plateau unleashes an avalanche of cold air towards the Pacific coast. As this huge air mass descends, it heats up through compression, creating the illusion that we are being roasted by outbursts from nearby deserts, when in fact the devil winds originate in the land of the Anasazi – the mystery people who left behind such impressive ruins at Mesa Verde and Chaco Canyon.
There is little enigma to the physics of the winds, though their sudden arrival is always disturbing to greenhorns and nervous pets as well as to lorry drivers and joggers (sometimes scythed by razor-sharp palm fronds). Technically, they are ‘föhns’, after the warm winds that stream down from the leeward side of the Alps, but the Southern California term is a ‘Santa Ana’, probably in ironic homage to Mexico’s singularly disastrous 19th-century caudillo. For a few days every year, these dry hurricanes blow our world apart or, if a cigarette or a downed power line is in the path, they ignite it.
They also offer lazy journalists the opportunity to recite those famous lines from Raymond Chandler and Joan Didion, in which the Santa Anas drive the natives to homicide and apocalyptic fever. But just as one shouldn’t read Daphne du Maurier to understand the workings of nature in Cornwall, one shouldn’t read Chandler to fathom the phenomenology of weather and combustion in Southern California. A better choice would be Judy Van der Veer, an unfairly forgotten writer who spent most of her life ranching in the rugged hills near the hamlet of Ramona, 35 miles north-east of downtown San Diego. Despite the BBC’s incurable penchant for portraying Southern California through the prism of celebrity, it wasn’t Malibu, but Van der Veer’s Ramona that was the epicentre of the Witch Creek fire, the largest and most destructive of the recent firestorm swarm. Like one of the cattle queens played by Barbara Stanwyck, Van der Veer rode line and mended her own fences and from the saddle of her cow-pony Delilah she had a clearer view of chaparral ecology than did Chandler through his gin bottle or Didion through the rolled-up window of her speeding car.
Brown Hills (1938) – the second in a brace of carefully observed memoir-novels – is the diary of a long drought similar to the current aridity in Southern California. (My twin toddlers, like the calves in Van der Veer’s book, scarcely remember what rain looks like.) ‘Should a good fairy ask me what I wish, I know what I would say! I wouldn’t ask for a golden palace, or Arabian horses, or a handsome lover. I would wish for rain.’ But instead of rain, an October Santa Ana howls over Black Mountain and blasts her Ramona ranch:
I could see herds of dust being driven into the eastern end of the valley and hurried down the river, leaving, for a second, clearness behind them. Then another gust and the east was hidden and more yellow clouds came surging through the valley. The trees curved this way and that, losing more leaves with every swoop, and branches were torn away. Later I found arms of eucalyptus trees in the corral, red sap, like blood, at the severed places . . . We seemed to be watching a big fire whose flames were yellow instead of red, and it was consuming our land while we looked helplessly down.
Luckily, the Santa Ana abates before the lightly inhabited back-country of the 1930s catches fire; the good fairy finally brings rain; and the brown hillsides turn green with clover, deerweed and alfilaree. But, as Van der Veer insists, happy endings are not inevitable: Southern California is a land of risk and natural drama, where the unpredictable cycle of the seasons is as suspenseful as any noir novel. Her ranchers and farmers don’t so much settle the land as learn to roll with its punches, enjoying luxurious interludes of beauty between waves of disaster. Moreover, in Van der Veer’s time, the ‘back-country’ was truly that and a broad corridor of avocado and citrus orchards separated the cow ranches and turkey farms from the urbanised coastal strip.
Three generations later, the vast citrus forests that once surrounded Los Angeles, as well as cities like Riverside and Anaheim, have been transformed into pink stucco death valleys full of bored teenagers and desperate housewives. East of Los Angeles, in the San Gorgonio Pass above Palm Springs, where 4000 giant wind turbines harvest the Santa Anas, new subdivisions are being built next to fifty-year-old chaparral standing eight feet high and yearning to burn. Throughout the foothills, meanwhile, free-range McMansions – often castellated in unconscious self-caricature – occupy rugged ocean-view peaks surrounded by what foresters grimly refer to as ‘diesel stands’ of dying pine and old brush.
The loss of more than 90 per cent of Southern California’s agricultural buffer zone is the principal if seldom mentioned reason wildfires increasingly incinerate such spectacular swathes of luxury real estate. It’s true that other ingredients – La Niña droughts, fire suppression (which sponsors the accumulation of fuel), bark beetle infestations and probably global warming – contribute to the annual infernos that have become as predictable as Guy Fawkes bonfires. But what makes us most vulnerable is the abruptness of what is called the ‘wildland-urban interface’, where real estate collides with fire ecology. And castles without their glacises are not very defensible.
On 26 October, day six of the fires, I saw the ruins – perched precariously on a wild mountainside – of what my friend Kozy Amemiya described as ‘a Tokugawa fortress in a Kurosawa film’. Its twin turrets had been reduced to some twisted girders rising 9/11-like from a smouldering mound of grey ash, but the putting green next to the driveway remained eerily pristine. Kozy and her English husband, Tom Royden, are Ramona avocado growers, the last of a dying breed in a rapidly suburbanising landscape. One of their two ranches is located in the hills east of Ramona where Van der Veer’s horses once grazed; the other, larger orchard occupies the side of a boulder-studded mountain overlooking Lake Ramona. Kozy has a PhD in sociology, but Tom’s graduate degree – from California State Polytechnic at Pomona – is, literally, in avocados.
Tom has Lloyd George eyebrows, always appears in pressed khaki shorts and is armed with an encyclopedic knowledge of irrigation and tropical agriculture. He could easily pass for one of those planter types who caroused at Raffles and ran vast rubber estates in Malaya or raised coffee and caused white mischief in the Kikuyu hills. Indeed, his father wrote ‘merchant adventurer’ as his occupation on his passport, and his mother was descended from generations of Kent cherry farmers. But the old-school English stereotype is deceptive. Tom has spent most of his working life advising village co-operatives in Tanzania and Andean farmers in Ecuador. On one of their first dates he and Kozy went to hear Chalmers Johnson lecture on the decline of empire, and he proudly displays ‘Stop Blackwater!’ bumper stickers on all his trucks (the mercenaries want to build a training facility in the San Diego back-country).
Kozy and Tom are also eloquent evangelists about the need to save what remains of an agricultural fire break in Southern California. Their own fire history is instructive. In 2003, the Cedar blaze (which killed 15 people and destroyed 2200 homes) passed south of the larger orchard; this time, 50-foot-high flames charged the mountain twice, burning dozens of isolated homes, before resuming their march towards the Pacific. Both ranches were once again saved – or so it seemed. Then, in the midst of the evacuation of Del Mar and Encinitas north of La Jolla, the Santa Ana suddenly stopped howling; it was replaced by a strong sea breeze that turned the fire around, saving the beaches but condemning the avocados in Ramona.
Still, as Tom points out, his trees put up a ‘bloody stiff fight’, providing a firewall that saved several of his neighbours’ large houses. ‘Except in an extreme conflagration, fire will only penetrate about 10 or 15 metres into orchards when the ground is cleared and well irrigated.’ He takes a penknife and scrapes at charred bark: the flesh is still green. ‘Most of the burnt trees are still alive, although they won’t bear fruit again for several years.’ When I express surprise, he chuckles. ‘You should see oranges. They’re almost as fire-resistant as the live oak.’ (Our native oaks, in fact, have an erotic need for an occasional fire to assist their reproduction.) The burly toughness of the trees is reassuring, but there’s bad news too. When we drive along the dirt tracks (occasionally having to use machetes to chop through barricades of wind-toppled trees) we leave behind a deep, mushy trail of guacamole. The fire and wind have stripped several hundred thousand fruit from the trees, and Tom estimates that he has lost 70 per cent of his crop.
The Witch Creek fire has also destroyed much of the irrigation infrastructure throughout the Ramona valley, melting plastic and aluminum piping and knocking out the big generators that pump water over the mountains from the Colorado River two hundred miles away. Water authorities are apprehensive about toxic contamination and contaminated wells. On the road to Ramona, an electronic billboard flashes an urgent warning: ‘do not use the water.’
Kozy has heard that, overall, 50 per cent of the San Diego avocado crop has been lost, only three weeks before harvest, and the future of local horticulture looks bleaker than ever. Soaring land prices and increasingly expensive water have conspired to squeeze their bottom line, along with suburban ignorance of farm life (newcomers complain to the sheriff if they hear a tractor engine before 7 a.m.); and the monopoly power of the supermarket chains has forced growers to substitute alligator-skinned, easily refrigerated Hass avocados for the thin-skinned, anise-flavoured Fuertes that connoisseurs prefer. As if that weren’t enough, California’s honey bees, which are needed to pollinate avocado flowers, are dying en masse from a mystery disease.
Now, I know as little about the delicate manoeuvres of avocado pollination as I do about the mechanics of putting stallions to stud. But I do care deeply about avocados. In the 1930s, my older sister cantered her Indian pony through my parents’ avocado ‘ranchito’ in Bostonia, ten miles south of Ramona, and the little house my father built with its knotty-pine walls has survived every fire. Otherwise, little of my childhood Bostonia remains. The Barker family’s 1880s general store, the irrigation ditches, the country-western dancehall, the gas station that sold cigarettes to 12-year-olds, the Fryes’ hardware store, the lemons and the pomegranates: all vanished in a whirlwind of ‘growth’. What remains are ageing tract homes, auto body shops, intractable methamphetamine addiction, and long lines of tail lights headed out towards the brave new suburbs of Lakeside and Ramona.
Kozy thinks my nostalgia is sheer defeatism and tries to cheer me up. ‘Did you know there are some really magnificent Fuertes still bearing fruit on Chase Avenue? They’re probably a century old.’
This is not quite the consolation I need. Avocados have always been the icon of San Diego’s countryside (which produces much of the US harvest) and if the remaining growers are forced to sell out, the past will become as inaccessible as the future will be combustible. I can easily visualise the impending apocalypse: more view homes on the graves of trees, the art-deco Ramona Theater bulldozed for a Home Depot, the Turkey Inn turned into a Starbucks, a Cineplex where Judy Van der Veer’s home used to be. I suppose the realist view is that our fire problem will ultimately be solved by burning all the fuel and then paving the ashes. In Southern California, catastrophic fire only fertilises more sprawl.
I pop the big question to Tom. ‘Can you really get this ranch up and running again, or will some home developer make you an offer you can’t refuse?’
Tom furrows his eyebrows for a moment, then smiles. ‘Do you know the etymology of the word “avocado”?’
‘Aguacate in Spanish,’ I mumble.
‘Yes, but the Nahuatl original is ahuacatl – balls.’
Mike Davis is an incendiarist based in San Diego. His latest books are Buda’s Wagon: A Brief History of the Car Bomb and In Praise of Barbarians: Essays against Empire.
ISSN 0260-9592 Copyright © LRB Ltd., 1997-2007< Home ^ Top terms & conditions privacy
15 November 2007
Diary
Mike Davis
Every year, sometimes in September, but usually in October just before Halloween, when California’s wild vegetation is driest and most combustible, high pressure over the Great Basin and Colorado Plateau unleashes an avalanche of cold air towards the Pacific coast. As this huge air mass descends, it heats up through compression, creating the illusion that we are being roasted by outbursts from nearby deserts, when in fact the devil winds originate in the land of the Anasazi – the mystery people who left behind such impressive ruins at Mesa Verde and Chaco Canyon.
There is little enigma to the physics of the winds, though their sudden arrival is always disturbing to greenhorns and nervous pets as well as to lorry drivers and joggers (sometimes scythed by razor-sharp palm fronds). Technically, they are ‘föhns’, after the warm winds that stream down from the leeward side of the Alps, but the Southern California term is a ‘Santa Ana’, probably in ironic homage to Mexico’s singularly disastrous 19th-century caudillo. For a few days every year, these dry hurricanes blow our world apart or, if a cigarette or a downed power line is in the path, they ignite it.
They also offer lazy journalists the opportunity to recite those famous lines from Raymond Chandler and Joan Didion, in which the Santa Anas drive the natives to homicide and apocalyptic fever. But just as one shouldn’t read Daphne du Maurier to understand the workings of nature in Cornwall, one shouldn’t read Chandler to fathom the phenomenology of weather and combustion in Southern California. A better choice would be Judy Van der Veer, an unfairly forgotten writer who spent most of her life ranching in the rugged hills near the hamlet of Ramona, 35 miles north-east of downtown San Diego. Despite the BBC’s incurable penchant for portraying Southern California through the prism of celebrity, it wasn’t Malibu, but Van der Veer’s Ramona that was the epicentre of the Witch Creek fire, the largest and most destructive of the recent firestorm swarm. Like one of the cattle queens played by Barbara Stanwyck, Van der Veer rode line and mended her own fences and from the saddle of her cow-pony Delilah she had a clearer view of chaparral ecology than did Chandler through his gin bottle or Didion through the rolled-up window of her speeding car.
Brown Hills (1938) – the second in a brace of carefully observed memoir-novels – is the diary of a long drought similar to the current aridity in Southern California. (My twin toddlers, like the calves in Van der Veer’s book, scarcely remember what rain looks like.) ‘Should a good fairy ask me what I wish, I know what I would say! I wouldn’t ask for a golden palace, or Arabian horses, or a handsome lover. I would wish for rain.’ But instead of rain, an October Santa Ana howls over Black Mountain and blasts her Ramona ranch:
I could see herds of dust being driven into the eastern end of the valley and hurried down the river, leaving, for a second, clearness behind them. Then another gust and the east was hidden and more yellow clouds came surging through the valley. The trees curved this way and that, losing more leaves with every swoop, and branches were torn away. Later I found arms of eucalyptus trees in the corral, red sap, like blood, at the severed places . . . We seemed to be watching a big fire whose flames were yellow instead of red, and it was consuming our land while we looked helplessly down.
Luckily, the Santa Ana abates before the lightly inhabited back-country of the 1930s catches fire; the good fairy finally brings rain; and the brown hillsides turn green with clover, deerweed and alfilaree. But, as Van der Veer insists, happy endings are not inevitable: Southern California is a land of risk and natural drama, where the unpredictable cycle of the seasons is as suspenseful as any noir novel. Her ranchers and farmers don’t so much settle the land as learn to roll with its punches, enjoying luxurious interludes of beauty between waves of disaster. Moreover, in Van der Veer’s time, the ‘back-country’ was truly that and a broad corridor of avocado and citrus orchards separated the cow ranches and turkey farms from the urbanised coastal strip.
Three generations later, the vast citrus forests that once surrounded Los Angeles, as well as cities like Riverside and Anaheim, have been transformed into pink stucco death valleys full of bored teenagers and desperate housewives. East of Los Angeles, in the San Gorgonio Pass above Palm Springs, where 4000 giant wind turbines harvest the Santa Anas, new subdivisions are being built next to fifty-year-old chaparral standing eight feet high and yearning to burn. Throughout the foothills, meanwhile, free-range McMansions – often castellated in unconscious self-caricature – occupy rugged ocean-view peaks surrounded by what foresters grimly refer to as ‘diesel stands’ of dying pine and old brush.
The loss of more than 90 per cent of Southern California’s agricultural buffer zone is the principal if seldom mentioned reason wildfires increasingly incinerate such spectacular swathes of luxury real estate. It’s true that other ingredients – La Niña droughts, fire suppression (which sponsors the accumulation of fuel), bark beetle infestations and probably global warming – contribute to the annual infernos that have become as predictable as Guy Fawkes bonfires. But what makes us most vulnerable is the abruptness of what is called the ‘wildland-urban interface’, where real estate collides with fire ecology. And castles without their glacises are not very defensible.
On 26 October, day six of the fires, I saw the ruins – perched precariously on a wild mountainside – of what my friend Kozy Amemiya described as ‘a Tokugawa fortress in a Kurosawa film’. Its twin turrets had been reduced to some twisted girders rising 9/11-like from a smouldering mound of grey ash, but the putting green next to the driveway remained eerily pristine. Kozy and her English husband, Tom Royden, are Ramona avocado growers, the last of a dying breed in a rapidly suburbanising landscape. One of their two ranches is located in the hills east of Ramona where Van der Veer’s horses once grazed; the other, larger orchard occupies the side of a boulder-studded mountain overlooking Lake Ramona. Kozy has a PhD in sociology, but Tom’s graduate degree – from California State Polytechnic at Pomona – is, literally, in avocados.
Tom has Lloyd George eyebrows, always appears in pressed khaki shorts and is armed with an encyclopedic knowledge of irrigation and tropical agriculture. He could easily pass for one of those planter types who caroused at Raffles and ran vast rubber estates in Malaya or raised coffee and caused white mischief in the Kikuyu hills. Indeed, his father wrote ‘merchant adventurer’ as his occupation on his passport, and his mother was descended from generations of Kent cherry farmers. But the old-school English stereotype is deceptive. Tom has spent most of his working life advising village co-operatives in Tanzania and Andean farmers in Ecuador. On one of their first dates he and Kozy went to hear Chalmers Johnson lecture on the decline of empire, and he proudly displays ‘Stop Blackwater!’ bumper stickers on all his trucks (the mercenaries want to build a training facility in the San Diego back-country).
Kozy and Tom are also eloquent evangelists about the need to save what remains of an agricultural fire break in Southern California. Their own fire history is instructive. In 2003, the Cedar blaze (which killed 15 people and destroyed 2200 homes) passed south of the larger orchard; this time, 50-foot-high flames charged the mountain twice, burning dozens of isolated homes, before resuming their march towards the Pacific. Both ranches were once again saved – or so it seemed. Then, in the midst of the evacuation of Del Mar and Encinitas north of La Jolla, the Santa Ana suddenly stopped howling; it was replaced by a strong sea breeze that turned the fire around, saving the beaches but condemning the avocados in Ramona.
Still, as Tom points out, his trees put up a ‘bloody stiff fight’, providing a firewall that saved several of his neighbours’ large houses. ‘Except in an extreme conflagration, fire will only penetrate about 10 or 15 metres into orchards when the ground is cleared and well irrigated.’ He takes a penknife and scrapes at charred bark: the flesh is still green. ‘Most of the burnt trees are still alive, although they won’t bear fruit again for several years.’ When I express surprise, he chuckles. ‘You should see oranges. They’re almost as fire-resistant as the live oak.’ (Our native oaks, in fact, have an erotic need for an occasional fire to assist their reproduction.) The burly toughness of the trees is reassuring, but there’s bad news too. When we drive along the dirt tracks (occasionally having to use machetes to chop through barricades of wind-toppled trees) we leave behind a deep, mushy trail of guacamole. The fire and wind have stripped several hundred thousand fruit from the trees, and Tom estimates that he has lost 70 per cent of his crop.
The Witch Creek fire has also destroyed much of the irrigation infrastructure throughout the Ramona valley, melting plastic and aluminum piping and knocking out the big generators that pump water over the mountains from the Colorado River two hundred miles away. Water authorities are apprehensive about toxic contamination and contaminated wells. On the road to Ramona, an electronic billboard flashes an urgent warning: ‘do not use the water.’
Kozy has heard that, overall, 50 per cent of the San Diego avocado crop has been lost, only three weeks before harvest, and the future of local horticulture looks bleaker than ever. Soaring land prices and increasingly expensive water have conspired to squeeze their bottom line, along with suburban ignorance of farm life (newcomers complain to the sheriff if they hear a tractor engine before 7 a.m.); and the monopoly power of the supermarket chains has forced growers to substitute alligator-skinned, easily refrigerated Hass avocados for the thin-skinned, anise-flavoured Fuertes that connoisseurs prefer. As if that weren’t enough, California’s honey bees, which are needed to pollinate avocado flowers, are dying en masse from a mystery disease.
Now, I know as little about the delicate manoeuvres of avocado pollination as I do about the mechanics of putting stallions to stud. But I do care deeply about avocados. In the 1930s, my older sister cantered her Indian pony through my parents’ avocado ‘ranchito’ in Bostonia, ten miles south of Ramona, and the little house my father built with its knotty-pine walls has survived every fire. Otherwise, little of my childhood Bostonia remains. The Barker family’s 1880s general store, the irrigation ditches, the country-western dancehall, the gas station that sold cigarettes to 12-year-olds, the Fryes’ hardware store, the lemons and the pomegranates: all vanished in a whirlwind of ‘growth’. What remains are ageing tract homes, auto body shops, intractable methamphetamine addiction, and long lines of tail lights headed out towards the brave new suburbs of Lakeside and Ramona.
Kozy thinks my nostalgia is sheer defeatism and tries to cheer me up. ‘Did you know there are some really magnificent Fuertes still bearing fruit on Chase Avenue? They’re probably a century old.’
This is not quite the consolation I need. Avocados have always been the icon of San Diego’s countryside (which produces much of the US harvest) and if the remaining growers are forced to sell out, the past will become as inaccessible as the future will be combustible. I can easily visualise the impending apocalypse: more view homes on the graves of trees, the art-deco Ramona Theater bulldozed for a Home Depot, the Turkey Inn turned into a Starbucks, a Cineplex where Judy Van der Veer’s home used to be. I suppose the realist view is that our fire problem will ultimately be solved by burning all the fuel and then paving the ashes. In Southern California, catastrophic fire only fertilises more sprawl.
I pop the big question to Tom. ‘Can you really get this ranch up and running again, or will some home developer make you an offer you can’t refuse?’
Tom furrows his eyebrows for a moment, then smiles. ‘Do you know the etymology of the word “avocado”?’
‘Aguacate in Spanish,’ I mumble.
‘Yes, but the Nahuatl original is ahuacatl – balls.’
Mike Davis is an incendiarist based in San Diego. His latest books are Buda’s Wagon: A Brief History of the Car Bomb and In Praise of Barbarians: Essays against Empire.
ISSN 0260-9592 Copyright © LRB Ltd., 1997-2007< Home ^ Top terms & conditions privacy
Saturday, November 24, 2007
Santa Barbara Writers Strike, Too
Writer James Kahn Talks TV, Online Media, and the Money Therein
By Victoria Woodard Harvey
Wednesday, November 21, 2007
“Don’t be greedy, don’t be petty. You won’t get your Ugly Betty!” — Striker’s slogan heard outside the gates at Raleigh Studios in Hollywood
Since the Writers Guild of America (WGA) declared a strike against the Alliance of Motion Picture and Television Producers (AMPTP) on November 5, several prime-time series and most late-night talk shows have completely halted production, casting uncertainty on the future of the 2007-08 television season. More cease-production orders are expected by the end of the month. Network brass and scheduling chiefs are facing a crisis as reserves of prepared scripts run out, and on-set writers stand in picket lines.
Presidential candidates Barack Obama, Hillary Clinton, and John Edwards have publicly supported the WGA’s 12,000 writers. Governor Arnold Schwarzenegger urged both parties to resume negotiations in an effort to minimize the effect on the California economy.
One of many Los Angeles industry commuters who resides in Santa Barbara, James Kahn is a novelist and screenwriter whose work includes episodes of St. Elsewhere, Melrose Place, Star Trek: The Next Generation, and his personal favorite, Xena: Warrior Princess.
Some WGA members affected by the strike in 1988 were not satisfied with their settlement, particularly around the issue of residuals. Is this payback time? In 1988, when DVDs were the coming thing, there was a negotiation about what the writer’s residual should be. Screenwriters get paid a flat fee per script, then a residual payment every time the episode is rebroadcast or sold retail. I make 43 dollars every time one of my Melrose Place episodes gets shown.
The studios complained DVDs were an unknown medium that they might go broke trying to develop, so the WGA agreed to cut them a break: The writer of the movie would get four cents for every DVD sold. Never mind that the guy who made the box the DVD came in got a dollar per DVD — the writer got four cents. Reminds me of the quote by legendary MGM production chief Irving Thalberg, who told Louis B. Mayer, “The most important guys in the business are the writers — and we must never let them know.”
Where do the two sides currently disagree? Writers are still making four cents per DVD, while studio revenues have skyrocketed. So we went into these negotiations saying we wanted our cut to go up to eight cents. We also wanted money for movies and TV shows on the Internet — writers currently don’t get a nickel for anything we’ve written that ends up on your laptop. The AMPTP said the Internet is an unknown medium that companies might go broke trying to develop. (Sound familiar?) So they’re not going to pay writers anything for product distributed online.
What other issues do the writers have about how profits are shared? The studios decided to roll back the old TV and film model as well, so the writer wouldn’t get any residual in any medium until the studio showed a profit on that show or movie. Ever hear of Hollywood accounting? Shows never show profit. Titanic, which grossed billions, is still in the red, on the books. So is The Simpsons.
What concerns you most about the current negotiations? The sleaziest aspect of all this is the arrogant greed of the corporate owners. Writers collectively get 55 million bucks a year in residuals. If the studios gave us everything we were asking for, that would go up to $75 million. Just one company —Viacom — has annual revenue of $18 billion, and its top execs make about $60 million apiece annually.
How does this affect the writers in the long term? The money is important, but psychologically it all comes back to Irving Thalberg — writers get no respect. We invite it on ourselves to a certain extent. Every writer I know oscillates between “Hey, I’m pretty good,” and “What ever made me think I could write?” Executives, like all bullies, seize on that glassy-eyed diffidence in writers, who were usually the unpopular kids in high school. It’s just high school all over again. But now the currency is actual money instead of who gets asked to the prom. And in the 21st century, the Internet is where the money is.
Have you gone to the picket lines? I just attended my first picket line since Vietnam. Hundreds of us carried signs in front of Universal Studios. It was noisy because so many passing cars kept honking in support. It’s a writer-friendly town, except for the guys who hire us. Picketers were shouting movie lines. (“Today no Spartan dies!”)
My favorite moment: An executive pulled out of Universal in an electric car and had to stop at the red light near us. The strike captain ran up to him enthusiastically, said, “I love your car, man. What’s it like to drive?” The executive just kept staring straight ahead. Strike captain: “Come on, roll down your window; talk to me.” The executive inched his window down, muttered, “I can’t talk to you. This is being filmed.” The light turned; he drove off. We looked around and found a hidden camera, no doubt documenting us for future reprisals. But the strike captain just faced the camera full frontal, dropped his pants, and said “I hope you guys have a really big lens.” And then others behind him started shouting: “I am Spartacus!” “No, I am Spartacus!”
The 1988 strike lasted 22 weeks. What is your forecast of the impact of this strike on writers and on the California economy? It’s fun and games now, but likely to be long and ugly. Nobody wanted a strike, but writers need to make a living. Residuals are what pays the rent during those bleak, sometimes lengthy periods “between things.” Of course some screenwriters are rich, but most of us just get along. Being out of work on a picket line doesn’t help anybody’s pocketbook. If the strike continues, the entire L.A. economy is going to take a big hit — restaurants and copy shops will close, the real estate market will plummet even faster. Fortunately, the AMPTP has agreed to come back to the negotiating table on November 26, due in no small part to the solidarity of the strikers, enormous support by SAG and Teamsters, and, interestingly, exposure of the studios’ hypocrisy on the blogosphere — the very area they want so badly to control.
By Victoria Woodard Harvey
Wednesday, November 21, 2007
“Don’t be greedy, don’t be petty. You won’t get your Ugly Betty!” — Striker’s slogan heard outside the gates at Raleigh Studios in Hollywood
Since the Writers Guild of America (WGA) declared a strike against the Alliance of Motion Picture and Television Producers (AMPTP) on November 5, several prime-time series and most late-night talk shows have completely halted production, casting uncertainty on the future of the 2007-08 television season. More cease-production orders are expected by the end of the month. Network brass and scheduling chiefs are facing a crisis as reserves of prepared scripts run out, and on-set writers stand in picket lines.
Presidential candidates Barack Obama, Hillary Clinton, and John Edwards have publicly supported the WGA’s 12,000 writers. Governor Arnold Schwarzenegger urged both parties to resume negotiations in an effort to minimize the effect on the California economy.
One of many Los Angeles industry commuters who resides in Santa Barbara, James Kahn is a novelist and screenwriter whose work includes episodes of St. Elsewhere, Melrose Place, Star Trek: The Next Generation, and his personal favorite, Xena: Warrior Princess.
Some WGA members affected by the strike in 1988 were not satisfied with their settlement, particularly around the issue of residuals. Is this payback time? In 1988, when DVDs were the coming thing, there was a negotiation about what the writer’s residual should be. Screenwriters get paid a flat fee per script, then a residual payment every time the episode is rebroadcast or sold retail. I make 43 dollars every time one of my Melrose Place episodes gets shown.
The studios complained DVDs were an unknown medium that they might go broke trying to develop, so the WGA agreed to cut them a break: The writer of the movie would get four cents for every DVD sold. Never mind that the guy who made the box the DVD came in got a dollar per DVD — the writer got four cents. Reminds me of the quote by legendary MGM production chief Irving Thalberg, who told Louis B. Mayer, “The most important guys in the business are the writers — and we must never let them know.”
Where do the two sides currently disagree? Writers are still making four cents per DVD, while studio revenues have skyrocketed. So we went into these negotiations saying we wanted our cut to go up to eight cents. We also wanted money for movies and TV shows on the Internet — writers currently don’t get a nickel for anything we’ve written that ends up on your laptop. The AMPTP said the Internet is an unknown medium that companies might go broke trying to develop. (Sound familiar?) So they’re not going to pay writers anything for product distributed online.
What other issues do the writers have about how profits are shared? The studios decided to roll back the old TV and film model as well, so the writer wouldn’t get any residual in any medium until the studio showed a profit on that show or movie. Ever hear of Hollywood accounting? Shows never show profit. Titanic, which grossed billions, is still in the red, on the books. So is The Simpsons.
What concerns you most about the current negotiations? The sleaziest aspect of all this is the arrogant greed of the corporate owners. Writers collectively get 55 million bucks a year in residuals. If the studios gave us everything we were asking for, that would go up to $75 million. Just one company —Viacom — has annual revenue of $18 billion, and its top execs make about $60 million apiece annually.
How does this affect the writers in the long term? The money is important, but psychologically it all comes back to Irving Thalberg — writers get no respect. We invite it on ourselves to a certain extent. Every writer I know oscillates between “Hey, I’m pretty good,” and “What ever made me think I could write?” Executives, like all bullies, seize on that glassy-eyed diffidence in writers, who were usually the unpopular kids in high school. It’s just high school all over again. But now the currency is actual money instead of who gets asked to the prom. And in the 21st century, the Internet is where the money is.
Have you gone to the picket lines? I just attended my first picket line since Vietnam. Hundreds of us carried signs in front of Universal Studios. It was noisy because so many passing cars kept honking in support. It’s a writer-friendly town, except for the guys who hire us. Picketers were shouting movie lines. (“Today no Spartan dies!”)
My favorite moment: An executive pulled out of Universal in an electric car and had to stop at the red light near us. The strike captain ran up to him enthusiastically, said, “I love your car, man. What’s it like to drive?” The executive just kept staring straight ahead. Strike captain: “Come on, roll down your window; talk to me.” The executive inched his window down, muttered, “I can’t talk to you. This is being filmed.” The light turned; he drove off. We looked around and found a hidden camera, no doubt documenting us for future reprisals. But the strike captain just faced the camera full frontal, dropped his pants, and said “I hope you guys have a really big lens.” And then others behind him started shouting: “I am Spartacus!” “No, I am Spartacus!”
The 1988 strike lasted 22 weeks. What is your forecast of the impact of this strike on writers and on the California economy? It’s fun and games now, but likely to be long and ugly. Nobody wanted a strike, but writers need to make a living. Residuals are what pays the rent during those bleak, sometimes lengthy periods “between things.” Of course some screenwriters are rich, but most of us just get along. Being out of work on a picket line doesn’t help anybody’s pocketbook. If the strike continues, the entire L.A. economy is going to take a big hit — restaurants and copy shops will close, the real estate market will plummet even faster. Fortunately, the AMPTP has agreed to come back to the negotiating table on November 26, due in no small part to the solidarity of the strikers, enormous support by SAG and Teamsters, and, interestingly, exposure of the studios’ hypocrisy on the blogosphere — the very area they want so badly to control.
Tuesday, November 6, 2007
No end in sight for woes in Pakistan
BYLINE: TARIQ ALI
London Independent November 4, 2007
For anyone marinated in the history of Pakistan yesterday's decision by the military to impose a state of emergency comes as no surprise. Martial law in this country has become an antibiotic: in order to obtain the same results one has to keep doubling the doses. This was a coup within a coup.
General Pervez Musharraf ruled the country with a civilian façade, but his power base was limited to the army. And it was the army Chief of Staff who declared the emergency, suspended the 1973 constitution, took all non-government TV channels off the air, jammed the mobile phone networks, surrounded the Supreme Court with paramilitary units, dismissed the Chief Justice, arrested the president of the bar association and inaugurated yet another shabby period in the country's history.
Why? They feared that a Supreme Court judgment due next week might make it impossible for Musharraf to contest the elections. The decision to suspend the constitution was taken a few weeks ago. According to good sources, contrary to what her official spokesman has been saying ("she was shocked"), Benazir Bhutto was informed and chose to leave the country before it happened. (Whether her "dramatic return" was also pre-arranged remains to be seen.) Intoxicated by the incense of power, she might now discover that it remains as elusive as ever. If she ultimately supports the latest turn it will be an act of political suicide. If she decides to dump the general (she accused him last night of breaking his promises), she will be betraying the confidence of the US state department, which pushed her this way.
The two institutions targeted by the emergency are the judiciary and the broadcasters, many of whose correspondents supply information that politicians never give. Geo TV continued to air outside the country. Hamid Mir, one of its sharpest journalists, said yesterday he believed the US embassy had green-lighted the coup because they regarded the Chief Justice as a nuisance and "a Taliban sympathiser".
The regime has been confronted with a severe crisis of legitimacy that came to a head earlier this year when Musharraf's decision to suspend the Chief Justice, Iftikhar Hussain Chaudhry, provoked a six-month long mass movement that forced a government retreat. Some of Chaudhry's judgments had challenged the government on key issues such as "disappeared prisoners", harassment of women and rushed privatisations. It was feared that he might declare a uniformed president illegal.
The struggle to demand a separation of powers between the state and the judiciary, which has always been weak, was of critical importance. Pakistan's judges have usually been acquiescent. Those who resisted military leaders were soon bullied out of it, so the decision of this chief justice to fight back was surprising, but extremely important and won him enormous respect. Global media coverage of Pakistan suggests a country of generals, corrupt politicians and bearded lunatics. The struggle to reinstate the Chief Justice presented a different snapshot of the country.
The Supreme Court's declaration that the new dispensation was "illegal and unconstitutional" was heroic, and, by contrast, the hurriedly sworn in new Chief Justice will be seen for what he is: a stooge of the men in uniform. If the constitution remains suspended for more than three months then Musharraf may be pushed aside by the army and a new strongman installed. Or it could be that the aim was limited to cleansing the Supreme Court and controlling the media. In which case a rigged January election becomes a certainty.
Whatever the case, Pakistan's long journey to the end of the night continues.
London Independent November 4, 2007
For anyone marinated in the history of Pakistan yesterday's decision by the military to impose a state of emergency comes as no surprise. Martial law in this country has become an antibiotic: in order to obtain the same results one has to keep doubling the doses. This was a coup within a coup.
General Pervez Musharraf ruled the country with a civilian façade, but his power base was limited to the army. And it was the army Chief of Staff who declared the emergency, suspended the 1973 constitution, took all non-government TV channels off the air, jammed the mobile phone networks, surrounded the Supreme Court with paramilitary units, dismissed the Chief Justice, arrested the president of the bar association and inaugurated yet another shabby period in the country's history.
Why? They feared that a Supreme Court judgment due next week might make it impossible for Musharraf to contest the elections. The decision to suspend the constitution was taken a few weeks ago. According to good sources, contrary to what her official spokesman has been saying ("she was shocked"), Benazir Bhutto was informed and chose to leave the country before it happened. (Whether her "dramatic return" was also pre-arranged remains to be seen.) Intoxicated by the incense of power, she might now discover that it remains as elusive as ever. If she ultimately supports the latest turn it will be an act of political suicide. If she decides to dump the general (she accused him last night of breaking his promises), she will be betraying the confidence of the US state department, which pushed her this way.
The two institutions targeted by the emergency are the judiciary and the broadcasters, many of whose correspondents supply information that politicians never give. Geo TV continued to air outside the country. Hamid Mir, one of its sharpest journalists, said yesterday he believed the US embassy had green-lighted the coup because they regarded the Chief Justice as a nuisance and "a Taliban sympathiser".
The regime has been confronted with a severe crisis of legitimacy that came to a head earlier this year when Musharraf's decision to suspend the Chief Justice, Iftikhar Hussain Chaudhry, provoked a six-month long mass movement that forced a government retreat. Some of Chaudhry's judgments had challenged the government on key issues such as "disappeared prisoners", harassment of women and rushed privatisations. It was feared that he might declare a uniformed president illegal.
The struggle to demand a separation of powers between the state and the judiciary, which has always been weak, was of critical importance. Pakistan's judges have usually been acquiescent. Those who resisted military leaders were soon bullied out of it, so the decision of this chief justice to fight back was surprising, but extremely important and won him enormous respect. Global media coverage of Pakistan suggests a country of generals, corrupt politicians and bearded lunatics. The struggle to reinstate the Chief Justice presented a different snapshot of the country.
The Supreme Court's declaration that the new dispensation was "illegal and unconstitutional" was heroic, and, by contrast, the hurriedly sworn in new Chief Justice will be seen for what he is: a stooge of the men in uniform. If the constitution remains suspended for more than three months then Musharraf may be pushed aside by the army and a new strongman installed. Or it could be that the aim was limited to cleansing the Supreme Court and controlling the media. In which case a rigged January election becomes a certainty.
Whatever the case, Pakistan's long journey to the end of the night continues.
Monday, November 5, 2007
Guiliani's Phony Facts
This is one dangerous man: it's George Bush with brains
New York's former mayor Rudy Giuliani is living up to his reputation as someone who will do and say anything for power
Michael Tomasky in Washington
Monday November 5, 2007
Guardian
People of Britain: congratulations are in order. You have now joined ferret owners, sidewalk artists, hot dog vendors, publicly funded attorneys for poor people, low-income community college students, museum curators, a couple of innocent black men shot dead by the police, the sections of the New York City charter governing rules of succession to the mayoralty and, of course, Hillary Clinton, as objects of Rudy Giuliani's demagoguery and wrath.
You may by now have heard the story. In a radio ad that his campaign prepared for New Hampshire voters, Giuliani tells listeners that he was diagnosed with prostate cancer in 2000 and goes on to say: "My chance of surviving cancer - and thank God I was cured of it - in the United States: 82%. My chances of surviving prostate cancer in England: only 44% under socialised medicine."
The numbers are false. The actual five-year survival rate in Britain is 74%, which is still lower than America's, but obviously high enough for the figure not to have constituted fodder for a campaign commercial. (Even the remaining, much smaller difference, is largely explained by more widespread screening in the US, which catches many more incidents of prostate cancer that are non-lethal).
It turned out that Giuliani's numbers were from a seven-year-old article in a conservative policy journal. The article was written by his own healthcare policy adviser, who admitted that his comparison was a "crude" interpretation of a study by a respected health policy group. The group, in turn, said the article's author had grossly misused its numbers.
That's about as red-handed as anyone in politics gets caught these days. But when asked if the campaign would continue to use the figure, a Giuliani spokeswoman said, "Yes, we will."
I know the form all too well. I covered Giuliani for a dozen years in New York (note to angry American rightwingers preparing to email me a warning to keep my foreign nose out of their business: I'm as American as a Ford F-150).
The man lies with staggering impunity. But here's the thing: he does it with such conviction and such seeming authority that people who are not inclined to study the matter will believe him - will in fact be utterly convinced that Giuliani is speaking the gospel truth, and they will prove almost impossible to shake from this conviction.
Giuliani's hypocrisy with regard to this ad doesn't end with the fake statistics. As Joe Conason noted on www.Salon.com, Giuliani was at the time of his treatment the mayor of New York and enrolled in a nonprofit health maintenance organisation for government employees - that is, mini-socialised medicine. And as Ezra Klein noted on Comment is free, the treatment that saved Giuliani was developed in Denmark - which, as Klein drolly notes, "is both in Europe and has a universal healthcare system".
But none of this will stop Giuliani. He will say and do anything he feels he needs to say and do to get power.
Newspapers write that he was "liberal" on social issues in his mayoral days, as if his positions on abortion and immigration were matters of conviction. Nonsense. He took the positions he needed to take to be elected in an overwhelmingly Democratic city. (Although to grant him a speck of humanity, I'd guess that his pro-gay rights views were more or less genuine: anyone living in the city gets to know many gay people.)
And now he is saying and doing whatever he needs to say and do to get millions of rightwing Americans to support him. He recently told a meeting of social conservatives that his reliance on God "is at the core of who I am". As mayor he was known to attend mass almost never, he obviously cheated serially on the wife (wife No 2) he married in the Catholic church, and the only occasions on which I can remember him invoking God when he was mayor were the two times he was forced to say "so help me God" in taking the oath of office.
But forward he will charge, telling more lies with even more impunity. And immunity, because in a culture where a sense of history is largely limited to remembering certain stirring television images, he will for the most part get away with it, confident in the knowledge that the main thing most Americans will ever recall about him is the film clip of him running from the rubble of the World Trade Centre on September 11. A far smaller percentage will know that the reason he had run was because he had catastrophically decided to place his emergency command centre in the tower complex - the only building in New York that had previously been the target of a major terrorist attack.
And by the way: shame on Gordon Brown for inviting him to No 10 in September. Yes, there's a long tradition of presidents and prime ministers welcoming party standard-bearers from across the pond. But Giuliani isn't yet that. Brown had no business giving him the kind of special benefit that an audience with a prime minister bestows.
Brown and all of Britain will be better off the sooner they figure this out: Giuliani is a dangerous man. George Bush with brains. Dick Cheney with better aim. Consider yourself warned.
· Michael Tomasky is the editor of Guardian America michael.tomasky@guardian.co.uk
Guardian Unlimited © Guardian News and Media Limited 2007
New York's former mayor Rudy Giuliani is living up to his reputation as someone who will do and say anything for power
Michael Tomasky in Washington
Monday November 5, 2007
Guardian
People of Britain: congratulations are in order. You have now joined ferret owners, sidewalk artists, hot dog vendors, publicly funded attorneys for poor people, low-income community college students, museum curators, a couple of innocent black men shot dead by the police, the sections of the New York City charter governing rules of succession to the mayoralty and, of course, Hillary Clinton, as objects of Rudy Giuliani's demagoguery and wrath.
You may by now have heard the story. In a radio ad that his campaign prepared for New Hampshire voters, Giuliani tells listeners that he was diagnosed with prostate cancer in 2000 and goes on to say: "My chance of surviving cancer - and thank God I was cured of it - in the United States: 82%. My chances of surviving prostate cancer in England: only 44% under socialised medicine."
The numbers are false. The actual five-year survival rate in Britain is 74%, which is still lower than America's, but obviously high enough for the figure not to have constituted fodder for a campaign commercial. (Even the remaining, much smaller difference, is largely explained by more widespread screening in the US, which catches many more incidents of prostate cancer that are non-lethal).
It turned out that Giuliani's numbers were from a seven-year-old article in a conservative policy journal. The article was written by his own healthcare policy adviser, who admitted that his comparison was a "crude" interpretation of a study by a respected health policy group. The group, in turn, said the article's author had grossly misused its numbers.
That's about as red-handed as anyone in politics gets caught these days. But when asked if the campaign would continue to use the figure, a Giuliani spokeswoman said, "Yes, we will."
I know the form all too well. I covered Giuliani for a dozen years in New York (note to angry American rightwingers preparing to email me a warning to keep my foreign nose out of their business: I'm as American as a Ford F-150).
The man lies with staggering impunity. But here's the thing: he does it with such conviction and such seeming authority that people who are not inclined to study the matter will believe him - will in fact be utterly convinced that Giuliani is speaking the gospel truth, and they will prove almost impossible to shake from this conviction.
Giuliani's hypocrisy with regard to this ad doesn't end with the fake statistics. As Joe Conason noted on www.Salon.com, Giuliani was at the time of his treatment the mayor of New York and enrolled in a nonprofit health maintenance organisation for government employees - that is, mini-socialised medicine. And as Ezra Klein noted on Comment is free, the treatment that saved Giuliani was developed in Denmark - which, as Klein drolly notes, "is both in Europe and has a universal healthcare system".
But none of this will stop Giuliani. He will say and do anything he feels he needs to say and do to get power.
Newspapers write that he was "liberal" on social issues in his mayoral days, as if his positions on abortion and immigration were matters of conviction. Nonsense. He took the positions he needed to take to be elected in an overwhelmingly Democratic city. (Although to grant him a speck of humanity, I'd guess that his pro-gay rights views were more or less genuine: anyone living in the city gets to know many gay people.)
And now he is saying and doing whatever he needs to say and do to get millions of rightwing Americans to support him. He recently told a meeting of social conservatives that his reliance on God "is at the core of who I am". As mayor he was known to attend mass almost never, he obviously cheated serially on the wife (wife No 2) he married in the Catholic church, and the only occasions on which I can remember him invoking God when he was mayor were the two times he was forced to say "so help me God" in taking the oath of office.
But forward he will charge, telling more lies with even more impunity. And immunity, because in a culture where a sense of history is largely limited to remembering certain stirring television images, he will for the most part get away with it, confident in the knowledge that the main thing most Americans will ever recall about him is the film clip of him running from the rubble of the World Trade Centre on September 11. A far smaller percentage will know that the reason he had run was because he had catastrophically decided to place his emergency command centre in the tower complex - the only building in New York that had previously been the target of a major terrorist attack.
And by the way: shame on Gordon Brown for inviting him to No 10 in September. Yes, there's a long tradition of presidents and prime ministers welcoming party standard-bearers from across the pond. But Giuliani isn't yet that. Brown had no business giving him the kind of special benefit that an audience with a prime minister bestows.
Brown and all of Britain will be better off the sooner they figure this out: Giuliani is a dangerous man. George Bush with brains. Dick Cheney with better aim. Consider yourself warned.
· Michael Tomasky is the editor of Guardian America michael.tomasky@guardian.co.uk
Guardian Unlimited © Guardian News and Media Limited 2007
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