Tuesday, April 27, 2010

April 27, 2010 A Bank Tax as Insurance for Us All By DAVID LEONHARDT Washington The financial regulation bill before the Senate has the potential to

April 27, 2010
A Bank Tax as Insurance for Us All By DAVID LEONHARDT

Washington

The financial regulation bill before the Senate has the potential to do a lot of good. But it also has at least one major flaw: it would not do enough to prevent taxpayers from paying the bill for a future crisis.

What would? A tax on banks. The International Monetary Fund has started pushing for a bank tax, and a tax has also become part of the debate in Britain’s election campaign. In this country, however, the subject has taken a back seat to issues like derivatives regulation and the Goldman Sachs case. Those other issues are important, but they are not as central to minimizing the damage from the next crisis.

To understand why, let’s take a glimpse into the future. Imagine the year is 2020, and a major financial firm is collapsing.

The financial regulation bill that President Obama signed back in 2010 was meant to deal with just such a problem. It gave regulators something called “resolution authority.” They could seize a dying firm, wipe out its shareholders, fire its top executives and keep it operating until its surviving parts could be sold off in an orderly fashion. Now, in 2020, the regulators are preparing to use that authority for the first time.

But as they dig into the details, they realize they are facing a raft of problems. One of the biggest is that the firm has 70 percent of its assets abroad (roughly the share of Citicorp’s business that was overseas in 2009). Washington can’t simply seize assets held in London, Shanghai or Moscow.

So ultimately, the regulators are left with the same choice that arose in 2008: bankruptcy or bailout. Regulators can let the firm fall apart suddenly and risk the kind of collateral damage that the bankruptcy of Lehman Brothers caused. Or they can spend billions of taxpayer dollars propping up the firm, as was the case with A.I.G. It’s a miserable choice.

You also can be pretty sure which of the two options tomorrow’s policy makers will choose: bailout. History — in the form of the Great Depression and, more recently, Lehman — argues against the idea of liquidate, liquidate, liquidate, as Herbert Hoover’s Treasury secretary, Andrew Mellon, advocated. The downside, of course, is that taxpayers end up paying for Wall Street’s sins.

Obama administration officials insist that the reregulation plan will prevent this outcome. They note that both the Senate and House bills will give regulators more authority to monitor financial firms. Banks will also be required to hold more cash in reserve, which will give them a bigger cushion when some investments do go bad. The rules for resolution authority, meanwhile, will be written with international cooperation in mind.

And maybe time will prove the administration correct. But a good number of economists and banking experts are worried. They think the odds of a future bankruptcy-or-bailout dilemma will remain uncomfortably high even if reregulation passes.

For starters, there are the cross-border problems; in the midst of a crisis, governments may have trouble cooperating. Then there is the fact that the regulators have never before tried to shut down anything as complex as a multibillion-dollar financial firm. “It’s really hard — really hard,” says Robert Steel, who worked on the financial crisis in the Bush Treasury Department and later was chief executive of Wachovia. “Anyone who says they know exactly what we should do is overconfident.”

Another former top government official adds, bluntly, “Don’t kid yourself into thinking that if J. P. Morgan were on the rocks, it would disappear.”

Above all, no one knows what the next crisis will look like. So no one can be sure exactly how to prevent it. In all likelihood, Wall Street will eventually figure out ways around technocratic rules — and technocrats — and create trouble that today’s proposals don’t anticipate.

The beauty of a bank tax is that it acknowledges as much. Financial firms play a vital role in a market economy. But they also have a long record of causing crises, be it the South Sea bubble of 1720, the Panic of 1873, the Great Depression or our own Great Recession. A bank tax is akin to an insurance policy that taxpayers would require Wall Street to hold. The premiums on that policy would keep Wall Street from making big profits in good times while foisting its losses on society in bad.

The current Senate bill includes a kind of bank tax, but it has all kinds of problems. It would initially collect only $50 billion from firms and then set the money aside to pay the costs of future bailouts. Other crises have cost far more than $50 billion.

For this reason, the Obama administration prefers a postcrisis tax. The White House has proposed a so-called TARP tax, to raise at least $90 billion over the next decade and cover the costs of the 2008 bailout fund (the Troubled Asset Relief Program). But this idea has its own flaws. It does not leave any money for future busts. It assumes Washington will always be able to recoup those costs later, which doesn’t sound like a great bet.

The I.M.F. prefers a permanent tax, for the good reason that the risk of crises is permanent. “The challenge is to ensure that financial institutions bear the direct financial costs that any future failures or crises will impose — and maybe somewhat more, given all the other costs that bank failure can impose on the economy,” Carlo Cottarelli, the head of the I.M.F.’s fiscal affairs unit, wrote last weekend. The tax wouldn’t go into a dedicated bailout fund. Its purpose instead would be to discourage too much risk-taking and, over the long term, help offset any bailout costs.

Because the tax would be calculated based on a firm’s holdings, a small local bank or a larger bank with billions of dollars in safe consumer deposits might pay nothing. A leveraged investment bank would surely be taxed.

The TARP tax, in its technical design, would be similar. And Timothy Geithner, the Treasury secretary, told me recently that he was open to the idea of the tax’s becoming permanent. “There is a very good argument you should put a fee on finance, like a tax on pollution,” he said.

Yet the administration — nervous about upsetting the fragile support in Congress for financial reregulation — has been afraid of making the tax part of the broader bill. That strikes me as a mistake, given the tax’s importance. Obviously, though, if Congress passes a bank tax in a separate bill later this year, it will work out the same in the end.

There is some reason for optimism, too. Max Baucus, the chairman of the Senate Finance Committee, told Politico this week, “I don’t think there’s much doubt that there will be a bank tax.” Why? The tax is not just about punishing banks.

The federal government, remember, is facing a huge deficit. To pay it off, Washington will need to make spending cuts and raise taxes. Can you think of a better candidate for taxation than an industry that made huge profits during the boom and then helped cause the bust that has sent the deficit soaring?

Local Heroes, Far From Home By MICHAEL KIMMELMAN

April 27, 2010
Local Heroes, Far From Home By MICHAEL KIMMELMAN

Rome

I JOINED the crowds heading into an Edward Hopper show at the Fondazione Roma the other morning. Organized in collaboration with the Whitney Museum of American Art in New York (most of the works come from there), the exhibition has been a hit here. In a country with what often seems like the most refined taste in the world and no taste at all, it owes something to a cheesy full-scale reconstruction of the “Nighthawks” diner in the first gallery. Visitors snap pictures of themselves posing beside fedora-clad mannequins slumped stiffly over the counter. There’s another, better gimmick too, a room with pencils and stacks of white paper, where doodlers copy Hopper’s drawings. Reproductions are projected onto the stacks, so lines can be easily traced, and people labor over their tracings, then tote them around the show like diplomas. (By people, of course, I mean me.)

Which got me thinking: Just how global is art? I quizzed some Italians and also a few New Yorkers at the exhibition, and it wasn’t that the Italians didn’t “get” Hopper, or didn’t like him. He’s world famous by now, beloved, and the Italians easily brought up the links to film noir and Antonioni. But New Yorkers, naturally, spoke quite differently about him.

Hopper’s work, like all good art, remains local on some crucial level, and that’s no doubt just as true for those Italian, French and German old master paintings that fill museums from Tokyo to Tulsa and epitomize what we have come to think of as universal Western art. Italians from the small Umbrian village of Montefalco will tell you that they see in the Renaissance works of Benozzo Gozzoli, their hometown hero, a landscape and light that doesn’t make the same impact on people who didn’t grow up there. These visceral reactions are acquired through firsthand experience.

No matter how much culture has become globalized, art retains meanings specific to a certain time and place. Good art does, anyway (which accounts for why too much not-so-good contemporary art, aimed at the global marketplace, looks generic and everywhere alike). Those meanings come, as it were, bred in the bone. Hopper is an American exemplar.

Although he visited Paris early on, he always denied any lasting French influence. But clearly he picked up plenty of ideas from Manet, Degas and Daumier, European masters of modern alienation, then did far more than merely substitute the Williamsburg Bridge and the Sheridan Theater for the Pont Neuf and Longchamp. He recognized how all those bridges and high-rises reaching for heaven and all those wide-open spaces and country barns in spring-green fields were clichés of an America whose population numbered countless people leading interior, often profoundly solitary lives.

Hopper conveyed the psychological angle in silent places that he cast in a hard, melancholy light. But that light could also conjure up memories: the elevated tracks and anonymous apartment blocks, to New Yorkers who know them intimately, can invoke not just industrial sprawl or glum urbanism but also a singular beauty and dignity amplified by, and grounded in real, lived experience.

We talk about the art world these days as if everyone everywhere who appreciates art belongs to the same global tribe, united by jet travel, integrated markets and the Web. But there are many art worlds, countless ones, which often don’t talk to one another, don’t know or care about one another, and that are no less potent because they’re not, strictly speaking, universal. In Berlin, Heinrich Zille is a beloved artist, and streets, bars and restaurants are named after him. There’s a Zille museum. Books, plays and movies have been written about him. Another play just opened this spring around the corner from my home in Berlin.

But outside Berlin, even in the rest of Germany, he’s little known. He’s Berlin’s Hopper in that he grasped, in a similarly granular way, the city’s inner life a century ago. Rough and affectionate, never sentimental, typically Berlin-like, his work still tends to speak more directly to old-time natives than the works of many better-known global stars like Grosz or Kirchner. He invented nothing, unlike them. He wasn’t a modernist or even a great stylist. He trafficked in the same lower-class scenes of everyday life that contemporaneous artists in America like George Bellows and John Sloan painted. But he focused on places and qualities rooted in Berliners’ particular self-image: on life inside the city’s communal courtyards and in the rental barracks and the sweaty, smoky, beer-stained corner bars.

He called this, in his Berlin slang, his “miljöh,” his milieu. And it included the alleys and tent villages on empty lots and along windswept avenues that peter out, as does so much of the city even now, into nowhere.

Zille was a minor painter and illustrator, from a ruthless global perspective, but to dismiss him, or lump him along with Sloan or Bellows as just another urban scene painter from the turn of the last century, is to miss the soul of his art and also the way much culture, globalism notwithstanding, works today.

It happens that a Henry Moore retrospective has lately opened at Tate Britain in London, the first major Moore show in decades. After the war Moore was the ultimate global sculptor, his studio churning out one after another smooth, lumpy monument to fill government buildings, housing projects and office parks around the world. He was Britain’s de facto ambassador of art, its Picasso and Miró rolled into one, and his late works, anodyne abstractions, typify postwar faith in universal art representing universal values.

But after he died in 1986, it was as if everybody had had enough of him and what had become a factory line of production. His works were everywhere, but he dropped mostly off the radar of contemporary artists. The show rescues him from near-forgottenness by locating his true contribution in his British roots, as an artist who early on absorbed important lessons from Giacometti and the French Surrealists, then added a very British mix of elegance, sexual confusion and shambling abjectness to produce, before the war, objects in stone and wood that look far more memorable and unsettling than the soft-edged ones he produced afterward.

The show reminds us that his breakthrough to stardom, not incidentally, came during the Blitz, with the circulation of drawings of Londoners huddling in the Underground to escape the bombs. Masses of faceless people look like cocoons or mummies, glumly suffering, except that these drawings were promoted at the time as emblems of British fortitude. Beleaguered Britons, via Moore, became quiet heroes, modest martyrs, local versions of universal men.

We like the idea of universal art because most artists make work that they hope gains universal appeal and can speak to anybody who’s interested; because art’s formal values are supposed to transcend borders and ages; and because we can’t help fantasizing about the virtues of a global society. We imagine walking into any art museum, whether in Toronto or Timbuktu, and, up to a point at least, understanding the pictures and sculptures. But it’s often what we can’t understand that is most distinctive and enduring about the work.

Tourists make a beeline in foreign countries to art museums to say they’ve done the “Mona Lisa” and Botticelli’s lady on a half shell, but also because museums promise familiarity, or a simulacrum of it. They’re our 21st-century town squares and safe havens where strangers, who don’t necessarily speak the language or know the city or country they’re in, think that they occupy common ground with both locals and everyone else, because everybody supposedly speaks the universal language of art.

But culture’s ultimate value is in difference. Art is supposed to provide us with one-of-a-kind experiences. We make and consume it to share with others, the more people the better, but also to affirm our individuality, our links to specific things, places, values and people. Universality is useful to the art market but a concept still underexamined and overrated.

There’s another American art show now, at the Prado Museum in Madrid, a two-picture stellar one, juxtaposing Velázquez’s “Meninas” with John Singer Sargent’s portrait of the American Edward Darley Boit’s daughters, from the Museum of Fine Arts, Boston. I spent a couple of hours watching tourists and schoolchildren check out the pair of paintings, which looked related (the Sargent is an explicit homage) but nonetheless like distant cousins. The comparison pointed up a trans-Atlantic gap in character and ambition beyond the obvious qualitative divide between the work of an elegant, first-rate painter of Edwardian silk and sash, and, hands down, the greatest painter of all time.

What accounted for this gap? I don’t believe it was just an inferiority complex among Americans about their own (prewar) art. I think it had to do with Sargent’s essential Americanness. True, he spent almost his entire life in Europe, was in some respects more British than anything else, and leaned heavily in his work on not just Velázquez but other European greats like Van Dyck, Gainsborough and Degas. In fact, you can see Degas’s influence in the Boit portrait, whose figures look, as Degas’s often do, psychologically disconnected, occupying a space that is ambiguous.

Like Degas, Sargent was a heartless but dazzling virtuoso. But this is also a picture about new money and social ambition, an American combination. It allows a shadowy view inside one of those big new Paris apartments that rich Americans tended to occupy. To the French, who received it coolly at first, it conveyed foreignness, with its pretty, pink-cheeked, distant girls vaguely, almost offhandedly, portrayed in everyday dress, an American informality. Modern outsiders, they seem a world away from Velázquez’s infanta and her court, a bunch of ultimate insiders.

Or is all this reading too much into the comparison? An American who happened by suggested that the issue was simply Sargent’s “republicanism”: the picture projects 19th-century capitalist affluence in the midst of Old World royalty. That’s right, but I’d add that the perceptual divide for an American between the paintings also depends on the American’s sympathy and identification with an outsider’s striving.

It’s about projection, in other words, which all good art provokes, whether by Sargent, Zille, Moore or Hopper, whose laconic and merciless drawings can, seen by a New Yorker passing through Rome, have a kind of Proustian eloquence. I stared at the ones he did of summer in the city and the sun splashing across Lower Manhattan before carrying my tracings of two of them to a favorite Sicilian bakery a few blocks away from the Piazza Colonna. It was unconscious, deciding to go there, but I realized it was because the cannoli reminded me of ones I fetched as a boy from a cafe on MacDougal Street, where the owner used to pack them in little white cardboard boxes tied with striped red string. I carried the pastries home to my family, past the Hopper-like brownstones, through the concrete park that faced our house, and across Sixth Avenue to our apartment, under what in my memory was forever a dusky Hopper sky.

Wednesday, April 21, 2010

Pardon My French By MICHAEL KIMMELMAN

April 21, 2010
Pardon My French By MICHAEL KIMMELMAN

Paris

ÉRIC ZEMMOUR, slight, dark, a live wire, fell over his own words, they were tumbling out so fast. He was fidgeting at the back of a half-empty cafe one recent evening near the offices of Le Figaro, the newspaper where he works, notwithstanding that detractors have lately tried to get him fired for his most recent inflammatory remarks about French blacks and Arabs on a television show. Mr. Zemmour, roughly speaking, is the Bill O’Reilly of French letters. He was describing his latest book, “French Melancholy,” which has shot up the best-seller list here.

“The end of French political power has brought the end of French,” Mr. Zemmour said. “Now even the French elite have given up. They don’t care anymore. They all speak English. And the working class, I’m not talking just about immigrants, they don’t care about preserving the integrity of the language either.”

Mr. Zemmour is a notorious rabble-rouser. In his view France, because of immigration and other outside influences, has lost touch with its heroic ancient Roman roots, its national “gloire,” its historic culture, at the heart of which is the French language. Plenty of people think he’s an extremist, but he’s not alone. The other day Nicolas Sarkozy, the French president, sounded a bit like Mr. Zemmour, complaining about the “snobisme” of French diplomats who “are happy to speak English,” rather than French, which is “under siege.”

“Defending our language, defending the values it represents — that is a battle for cultural diversity in the world,” Mr. Sarkozy argued. The occasion for his speech was the 40th anniversary of the International Organization of the Francophonie, which celebrates French around the world. Mr. Sarkozy said the problem is not English itself but “ready-to-wear culture, uniformity, monolingualism,” by which of course he meant English. The larger argument about a decline of traditional values has struck a chord with conservative French voters perennially worried about the loss of French mojo.

The issue is somewhat akin to Americans complaining about the rise of Spanish in classrooms and elsewhere, but more acute here because of France’s special, proprietary, albeit no longer entirely realistic relationship to French. French is now spoken mostly by people who aren’t French. More than 50 percent of them are African. French speakers are more likely to be Haitians and Canadians, Algerians and Senegalese, immigrants from Africa and Southeast Asia and the Caribbean who have settled in France, bringing their native cultures with them.

Which raises the question: So what does French culture signify these days when there are some 200 million French speakers in the world but only 65 million are actually French? Culture in general — and not just French culture — has become increasingly unfixed, unstable, fragmentary and elective. Globalization has hastened the desire of more people, both groups and individuals, to differentiate themselves from one another to claim a distinct place in the world, and language has long been an obvious means to do so. In Canada the Quebecers tried outlawing signs and other public expressions in anything but French. Basque separatists have been murdering Spaniards in the name of political, linguistic and cultural independence, just as Franco imprisoned anyone who spoke Basque or Catalan. In Belgium the split between French and Dutch speakers has divided the country for ages.

And in France some years ago Jacques Toubon, a former culture minister, proposed curbing the use of English words like “weekend,” although nobody paid much attention. The fact is, French isn’t declining. It’s thriving as never before if you ask Abdou Diouf, former president of Senegal, who is the secretary general of the francophone organization. Mr. Diouf’s organization has evolved since 1970 from a postcolonial conglomerate of mostly African states preserving the linguistic vestiges of French imperialism into a global entity whose shibboleth is cultural diversity. With dozens of member states and affiliates, the group reflects a polyglot reality in which French is today concentrated outside France, and to a large extent, flourishes despite it.

“The truth,” Mr. Diouf said the other morning, “is that the future of the French language is now in Africa.” There and elsewhere, from Belgium to Benin, Lebanon to St. Lucia, the Seychelles to Switzerland, Togo to Tunisia, French is just one among several languages, sometimes, as in Cameroon, one among hundreds of them. This means that for writers from these places French is a choice, not necessarily signifying fealty, political, cultural or otherwise, to France. Or as Mr. Diouf put it: “The more we have financial, military and economic globalization, the more we find common cultural references and common values, which include diversity. And diversity, not uniformity, is the real result of globalization.”

Didier Billion is a political scientist with an interest in francophone culture. He agreed. “A multipolar world has emerged,” he said when we met in his office recently. “It’s the major trend of our time, which for the first time is allowing every person on the planet to become, in a cultural sense, an actor on the world stage.

“I was in Iran two months ago. Young Iranians are very proud of their own culture, which is rich and profound. But at the same time they want a window onto the world through the Internet, to have some identity outside Iran, and the important point is that for them there is no contradiction between these two positions. I am very proud of being French, but 40 years ago the French language was a way to maintain influence in the former colonies, and now French people are going to have to learn to think about francophone culture differently, because having a common language doesn’t assure you a common political or cultural point of view.”

This may sound perfectly obvious to Americans, but it’s not necessarily so to France’s growing tea party contingent. The populist National Front party won some 20 percent of the vote in the south last month (less nationwide), despite Mr. Sarkozy’s monthslong campaign to seduce right-wing voters by stressing the preservation of French national identity. Part of that campaign has been affirming a policy of cultural exceptionalism.

A phrase born years ago, “l’exception culturelle,” refers to the legal exclusion of French cultural products, like movies, from international free trade agreements, so they won’t be treated as equivalent to Coca-Cola or the Gap. But if you ask French people, the term also implies something more philosophical. In a country where pop radio stations broadcast a percentage of songs in French, and a socialist mayor in the northern, largely Muslim town of Roubaix lately won kudos for protesting that outlets of the fast-food chain Quick turned halal, cultural exceptionalism reflects fears of the multicultural sort that Mr. Zemmour’s book touches on.

It happens that Mr. Zemmour traces his own roots to Sephardic Jews from Spain who became French citizens while living in Algeria in the 19th century, then moved to France before the Algerian war. He belongs to the melting pot, in other words, which for centuries, he said, absorbed immigrants into its republican culture.

“In America or Britain it is O.K. that people live in separate communities, black with black, white with white,” he said, reflecting a certain antique perspective. “But this is not French. France used to be about assimilation. But since the 1970s the French intelligentsia has called this neocolonialism. In fact it is globalization, and globalization in this respect really means Americanization.”

But of course colorblind French Jacobin republicanism has always been a fiction if you were black or Muslim, and what’s really happened lately, it seems, is that different racial and ethnic groups have begun to argue more loudly for their rights and assert their culture. The election of Barack Obama hastened the process, by pointing out how few blacks and Arabs here have gained political authority.

The French language is a small but emblematic indicator of this change. So to a contemporary writer like the Soviet-born Andreï Makine, who found political asylum here in 1987, French promises assimilation and a link to the great literary tradition of Zola and Proust. He recounted the story of how, 20-odd years ago, his first manuscripts, which he wrote in French, were rejected by French publishers because it was presumed that he couldn’t write French well enough as a foreigner.

Then he invented the name of a translator, resubmitted the same works as if they were translations from Russian, and they won awards. He added that when his novel “Dreams of My Russian Summers” became a runaway best seller and received the Prix Goncourt, publishing houses in Germany and Serbia wanted to translate the book from its “original” Russian manuscript, so Mr. Makine spent two “sleepless weeks,” he said, belatedly producing one.

“Why do I write in French?” he repeated the question I had posed. “It is the possibility to belong to a culture that is not mine, not my mother tongue.”

Nancy Huston, a Canadian-born novelist here, put it another way: “The world has changed.” She moved to Paris during the 1970s. “The French literary establishment, which still thinks of itself as more important than it is, complains about the decline of its prestige but treats francophone literature as second class,” she said, while “laying claim to the likes of Kundera, Beckett and Ionesco, who were all born outside France. That is because, like Makine, they made the necessary declaration of love for France. But if the French bothered actually to read what came out of Martinique or North Africa, they would see that their language is in fact not suffering.

“After the war French writers rejected the idea of narrative because Hitler and Stalin were storytellers, and it seemed naïve to believe in stories. So instead they turned more and more to theory, to the absurd. The French declined even to tell stories about their own history, including the war in Algeria, which like all history can’t really be digested until it is turned into great literature. Francophone literature doesn’t come out of that background. It still tells stories.”

Which may partly account for the popularity of francophone writers like Yasmina Khadra, the best-selling Algerian novelist, whose real name is Mohammed Moulessehoul. We sipped tea one gray day in the offices of the Algerian Cultural Center. A 55-year-old former Algerian Army officer who now lives in Paris heading the center, Mr. Moulessehoul writes novels critical of the Algerian government under his wife’s name, which he first borrowed while in Algeria because the military there had banned his literary work.

“I was born into a poet tribe in the Sahara desert, which ruled for 800 years,” he said, sitting erect and alert, still a soldier at heart. “I read poetry in Arabic. I read kids’ books in Arabic. But at 15, after I read Camus in French, I decided to become a novelist in French partly because I wanted to respond to Camus, who had written about an Algeria in which there were no Arabs. I wanted to write in his language to say, I am here, I exist, and also because I love French, although I remain Arab. Linguistically it is as if I have married a French woman, but my mother is still Arabic.”

He quoted Kateb Yacine, the Algerian writer, who chose to write in French “to tell the French that I am not French.” Yacine called French the treasure left behind in the ruins of colonialism.

“Paris is still fearful of a French writer who becomes known around the world without its blessing,” Mr. Moulessehoul said. “And at the same time in certain Arab-speaking circles I am considered a traitor because I write in French. I am caught between two cultures, two worlds.

“Culture is always about politics in the end. I am a French writer and an Algerian writer. But the larger truth is that I am both.”

This article has been revised to reflect the following correction:

Correction: May 2, 2010

The Abroad column last Sunday, about the shift in francophone culture, described incorrectly the military service of the Algerian novelist Mohammed Moulessehoul, who writes under the pen name Yasmina Khadra. He went to military school at the age of 8 and later became an Alegrian Army officer in charge of counter-guerrilla activity for part of the country during Algeria’s civil war. He did not fight against the French.

Sunday, April 18, 2010

D.I.Y. Culture by MICHAEL KIMMELMAN

April 18, 2010
Abroad
D.I.Y. Culture by MICHAEL KIMMELMAN

Berlin

IT wasn’t so many years ago that Europeans loved to moan about American culture overrunning homegrown art forms. In the 1990s and early 2000s some in Europe were arguing for regulatory barriers to hold off the New World barbarians, particularly from Hollywood. In France, President Jacques Chirac’s culture minister, Jacques Toubon, warned about how the United States entertainment industry was trying “to impose domination by any means,” and Régis Debray, among other French intellectuals to hop on the same bandwagon, predicted that “the American empire will pass, like the others.”

“Let’s at least make sure,” Mr. Debray continued, “it does not leave irreparable damage to our creative abilities behind it.”

That was then. The other day President Nicolas Sarkozy was reiterating the virtues of what the French call “l’exception culturelle,” a modern policy of government protection and promotion of French culture, particularly the film industry. Mr. Sarkozy’s poll numbers have been plummeting, and l’exception culturelle feeds into his current strategy to identify himself with whatever, in the midst of an increasingly diversified, fractious and disapproving French society, French people say makes France French.

But Sarko l’Americain, as the French used to call him, is also the friendliest French president the United States has had in a while, and in America last month he stressed that rarely in history had “the community of views been so identical” between his country and the United States. Complaints about the American cultural juggernaut still arise across Europe, of course, but their intensity doesn’t seem as fierce. Something has changed, and it’s not just that Barack Obama has replaced George W. Bush or, in France’s case, that the film industry is doing O.K.

It’s a widening realization, I think, that globalism, beyond banking, climate change and warfare, has always been a dubious concept, a misleading catchall for how the world supposedly works, to which culture, in its increasing complexity, gives the lie.

The integration of markets and the Internet have certainly brought billions of people into closer contact. Everybody has access to the same American movies and music now, and not just American, also Indian, Romanian, South African and Chinese. But far from succumbing to some devouring juggernaut, culture — and Europe, with its different communities and nations living cheek by jowl, is a Petri dish to prove the point — has only atomized lately as a consequence of the very same globalizing forces that purportedly threaten to homogenize everything.

That’s been my own subject over here for the last couple of years, and will regularly be this column’s. Nationalism, regionalism and tribalism are all on the rise. Societies are splitting even as they share more common goods and attributes than ever before. Culture is increasingly an instrument to divide and differentiate communities. And the leveling pressures of globalization have at the same time provided more and more people with the technological resources to decide for themselves, culturally speaking, who they are and how they choose to be known, seen, distinguished from others.

Culture means many things in this context, but at heart it is a suite of traits we inherit and also choose to disavow or to stress. It consists in part of the arts. It is something made and consumed, in socially revealing ways. When Mats Nilsson, a Swedish product-design strategist for Ikea, not long ago told The New York Times that he loves to browse for handmade baskets in Spain, bird cages in Portugal, brushes in Japan and hardware on the Lower East Side of Manhattan, he was creating his own cultural identity out of the bric-a-brac of consumer choices made available by the globalizing forces of economic integration. Bricolage, it’s called. Anyone may now pick through the marketplace of global culture.

This may sound like the essence of globalization, but the fact that everybody from Yerevan to Brasilia, Jakarta to Jerusalem, knows songs by the Black Eyed Peas or wears New York Yankees caps doesn’t mean that culture is the same everywhere.

The common denominator of popular culture — which these days encompasses so many things that you could even include all sorts of high culture — seems to have just intensified the need people now feel to distinguish themselves from it. And global technology has made this easier by providing countless individuals, microcultures and larger groups and movements with cheap and convenient means to preserve and disseminate themselves. Years ago a language like Cimbrian, a Bavarian dialect today preserved by just a few hundred speakers in northern Italy, would have been doomed to extinction; now Cimbrian speakers, according to a recent German newspaper article, turn out to be getting their own online newspaper and television show. The language is being sustained by the same global forces that might promise to doom it.

Partly the problem with globalization has always been that the term, culturally speaking, is so vague. In one respect, it’s another word for empire, or at least its effects are as old as empire. What’s new is the power available to wide swaths of the populace, thanks above all to cheap travel and the Web, to become actors in the production and dissemination of culture, not simply consumers. A generation or more ago, aside from what people did in their home or from what’s roughly called folk or outsider art, culture was generally thought of as something handed down from on high, which the public received.

Today it’s made and distributed in countless different ways, giving not just governments and institutions but nearly everyone with access to the Web the means to choose and shape his or her own culture, identity, tribal fidelities — and then spread this culture, via Youtube or whatever else, among allies (and enemies) everywhere, a democratizing process. The downside of this democratization is how every political niche and fringe group has found a culture via the Web to reinforce its already narrow views, polarizing parts of society despite the widened horizon. Neo-Nazis across borders now bond around cultural artifacts available over the Internet. Democrats and Republicans move further apart, digesting news from their own cable network shows.

There are other consequences of this democratization. Generally speaking, culture operates within the mainstreams of power. The myth of an avant-garde serves the same market forces avant-gardism pretends to overthrow. Art may challenge authority; and popular culture (this includes clownish demagogues like Glenn Beck) sometimes makes trouble for those in charge, the way Thomas Nast’s cartoons did for Boss Tweed in Tammany Hall. But art doesn’t actually overthrow anything except itself, and never has, not in 19th-century France or 20th-century Russia or 21st-century China or Iran. Even when it manages to tilt popular thinking, it still ends up within the bounds of existing authority, and there has never been a true “outside” that really stayed outside: public consumption, by definition, adapts to the change, co-opts and normalizes all culture.

Instead culture (often unconsciously) identifies crucial ruptures, rifts, gaps and shifts in society. It is indispensable for our understanding of the mechanics of the world in this respect, pointing us toward those things around us that are unstable, changing, that shape how we live and how we treat one another. If we’re alert to it, it helps reveal who we are to ourselves, often in ways we didn’t realize in places we didn’t necessarily think to look.

Shortly after I moved to Berlin from New York, for example, I noticed there were bookstores all over town. They were on nearly every other street in my neighborhood. There was one just below my bedroom window, next to the high-end pet-supply store, specializing in New Age and self-help literature, and there was another one, a biography bookstore, around the corner. Shakespeare & Company (Berlin’s version) was beside the church square where the neighborhood children played when the weather was warm. And I began to stop into Marga Schoeller’s bookshop at Savignyplatz, which has a nice English-language section, en route to the subway, where a large art bookstore sprawls below raised tracks.

Berliners looked nonplussed when I asked them to account for all the bookshops. Along with currywurst and nude saunas, bookstores have long been such a banal fact of life here, as they are across Germany, that only an outsider might bother to think their number was remarkable. The proliferation turned out to derive from a very conscious decision after the war to restore civilization in West Germany by supporting a kind of ecosystem of small publishers and small bookstores to which, in certain small towns, trucks that delivered books to the bookstores overnight also delivered drugs to the drugstores: drugs for the body, books for the mind, a metaphor of recovery.

This was more than just a system of distribution and sales; it was a cultural as well as economic affair. It influenced civic life and social relations in ways that browsing books on Amazon or Google can’t. So what was to me as a clueless foreigner an urban curiosity, noticeable just because it wasn’t my usual experience — it was for me a cultural rift or rupture — ended up suggesting some larger truth about the country’s history and ambition. Culture is something we propagate but also something naturally there, existing in and around us, which makes us who we are but which may rise to the level of our consciousness only when one of those ruptures or rifts appear — when some little psychic clash happens between it and our more or less unconscious sense of the everyday world.

I also went to Gaza before the last Israeli incursion a couple of years ago. Naturally, the stories that tend to come from there revolve around one crisis or another: the rocket attacks, the border closures, clashes between Hamas and Fatah, Hamas and Israel. But what was life like, I wondered, under Hamas? What were the limits to Gazans’ freedom? The effects of isolation? How did Gazans see themselves in relation to everybody else?

These seemed to me cultural questions. The people I spoke with there said that culture was not just an escape for them from the everyday hardships from deprivation and a repressive regime, but that it was essential to survival, a lifeline, their steady connection to an outside world, a glimpse of what was beyond the conflict.

It represented normalcy, in other words, a precious commodity in that place. In the garden of a restaurant in Gaza City where a sign on the front door said, “No weapons, please,” I joined families of Gazans one evening watching episodes of “Friends” and a wildly popular Turkish soap opera, “Noor,” on a big screen. And in a video store nearby I thumbed through shelves of pirated Jennifer Lopez CDs and copies of “You Don’t Mess With the Zohan,” Adam Sandler’s comedy about a Mossad agent-turned-hairdresser in a New York City salon run by a Palestinian woman. There were also the predictable audiotapes extolling Fatah, Hamas and Islamic Jihad.

Some Gazans spoke sadly and nervously about their fears that extremists within Hamas, whose factional split was revealed by this cultural divide, had begun to crack down on local theaters and on art and the Web in Gaza, even as these same people spoke about culture being a fragile but essential link to the West. Via satellite dishes and the Internet, the West meant something to them other than guns and territory: culture was a potential bond, they suggested, through which some dialogue might yet arise.

Not incidentally, Gazans, like that Swedish Ikea designer, made their own culture from the bricolage of global choices. I thought most of what passed for art in Gaza wasn’t very good, truth be told, but quality seemed beside the point. We miss much about how culture works today — including how what might be called local standards of quality vie with the global aesthetic of sensationalism and fashion — if we stick only to seeing it as critics and consumers through our own aesthetic lens.

Hollywood and Broadway, the major museums and art fairs and biennials and galleries, buildings designed by celebrity architects and the music business are all the traditional focus of big media, and they tell us a lot about ourselves. They constitute our cultural firmament, the constellation of our stars. But scientists say most of the universe is composed not of stars but of dark matter. It is the powerful but invisible force that exists everywhere and requires some leap of imagination on our part, some effort, to identify.

Most culture is dark matter.

Put another way, whether in Berlin or Gaza or New York City, there’s a universe of life and death affairs beyond globalism. And culture is our window onto it.

Friday, April 16, 2010

The Fire Next Time By PAUL KRUGMAN

April 16, 2010
Op-Ed Columnist
The Fire Next Time By PAUL KRUGMAN

On Tuesday, Mitch McConnell, the Senate minority leader, called for the abolition of municipal fire departments.

Firefighters, he declared, “won’t solve the problems that led to recent fires. They will make them worse.” The existence of fire departments, he went on, “not only allows for taxpayer-funded bailouts of burning buildings; it institutionalizes them.” He concluded, “The way to solve this problem is to let the people who make the mistakes that lead to fires pay for them. We won’t solve this problem until the biggest buildings are allowed to burn.”

O.K., I fibbed a bit. Mr. McConnell said almost everything I attributed to him, but he was talking about financial reform, not fire reform. In particular, he was objecting not to the existence of fire departments, but to legislation that would give the government the power to seize and restructure failing financial institutions.

But it amounts to the same thing.

Now, Mr. McConnell surely isn’t sincere; while pretending to oppose bank bailouts, he’s actually doing the bankers’ bidding. But before I get to that, let’s talk about why he’s wrong on substance.

In his speech, Mr. McConnell seemed to be saying that in the future, the U.S. government should just let banks fail. We “must put an end to taxpayer funded bailouts for Wall Street banks.” What’s wrong with that?

The answer is that letting banks fail — as opposed to seizing and restructuring them — is a bad idea for the same reason that it’s a bad idea to stand aside while an urban office building burns. In both cases, the damage has a tendency to spread. In 1930, U.S. officials stood aside as banks failed; the result was the Great Depression. In 2008, they stood aside as Lehman Brothers imploded; within days, credit markets had frozen and we were staring into the economic abyss.

So it’s crucial to avoid disorderly bank collapses, just as it’s crucial to avoid out-of-control urban fires.

Since the 1930s, we’ve had a standard procedure for dealing with failing banks: the Federal Deposit Insurance Corporation has the right to seize a bank that’s on the brink, protecting its depositors while cleaning out the stockholders. In the crisis of 2008, however, it became clear that this procedure wasn’t up to dealing with complex modern financial institutions like Lehman or Citigroup.

So proposed reform legislation gives regulators “resolution authority,” which basically means giving them the ability to deal with the likes of Lehman in much the same way that the F.D.I.C. deals with conventional banks. Who could object to that?

Well, Mr. McConnell is trying. His talking points come straight out of a memo Frank Luntz, the Republican political consultant, circulated in January on how to oppose financial reform. “Frankly,” wrote Mr. Luntz, “the single best way to kill any legislation is to link it to the Big Bank Bailout.” And Mr. McConnell is following those stage directions.

It’s a truly shameless performance: Mr. McConnell is pretending to stand up for taxpayers against Wall Street while in fact doing just the opposite. In recent weeks, he and other Republican leaders have held meetings with Wall Street executives and lobbyists, in which the G.O.P. and the financial industry have sought to coordinate their political strategy.

And let me assure you, Wall Street isn’t lobbying to prevent future bank bailouts. If anything, it’s trying to ensure that there will be more bailouts. By depriving regulators of the tools they need to seize failing financial firms, financial lobbyists increase the chances that when the next crisis strikes, taxpayers will end up paying a ransom to stockholders and executives as the price of avoiding collapse.

Even more important, however, the financial industry wants to avoid serious regulation; it wants to be left free to engage in the same behavior that created this crisis. It’s worth remembering that between the 1930s and the 1980s, there weren’t any really big financial bailouts, because strong regulation kept most banks out of trouble. It was only with Reagan-era deregulation that big bank disasters re-emerged. In fact, relative to the size of the economy, the taxpayer costs of the savings and loan disaster, which unfolded in the Reagan years, were much higher than anything likely to happen under President Obama.

To understand what’s really at stake right now, watch the looming fight over derivatives, the complex financial instruments Warren Buffett famously described as “financial weapons of mass destruction.” The Obama administration wants tighter regulation of derivatives, while Republicans are opposed. And that tells you everything you need to know.

So don’t be fooled. When Mitch McConnell denounces big bank bailouts, what he’s really trying to do is give the bankers everything they want.

David Brooks is off today.

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