Thursday, April 22, 2010

#19: The Reluctant Fundamentalist

Mohsin Hamid's The Reluctant Fundamentalist takes an interesting approach to storytelling. The narrator is a Pakistani man sitting in a Lahore cafe, and from the outset it becomes clear that the narrative will move and flow only at his bidding. Ostensibly, his audience is the "uneasy American stranger" seated across from him, who manages to jump or look alarmed at virtually everything, but his book-long monologue makes it abundantly clear that the reader is the host's true target.

"Do not be frightened by my beard," the Pakistani, whose name is Changez, reassures his guest. "I am a lover of America." And with that, Changez launches into an account of his life and times in the United States, beginning with his undergraduate years at Princeton University and soon followed by his interview and eventual employment at a valuation firm, Underwood Samson. Inevitably, a romantic entanglement materializes, as Changez's new employer competes for his attention against Erica, the type of girl who wore "a short T-shirt bearing the image of Chairman Mao" as if it had personal meaning.

Changez finds himself gaining headway into American corporate culture; meanwhile, his relationship with Erica runs a parallel course. The only hitch, it seems, is her inability to release herself from the memory of her old boyfriend, Chris, who had died of cancer the year before she met Changez. On some level the latter man feels vulnerable, threatened even, at his seemingly disadvantageous position, but with a sense of irony at feeling jealous of a dead man.

Then, as often happens in recent literature, came September 11. Changez, on assignment in Manila for Underwood Samson, was in his hotel room preparing to return to the States when he saw the news on television. "I stared as one -- and then the other -- of the twin towers of New York's World Trade Center collapsed. And then I smiled." Changez's instinctual pleasure was not, he assures his listener, in response to the violent act itself but as an acknowledgment of what it symbolized, "the fact that someone had so visibly brought America to her knees." Fearing what such a reaction might provoke in his colleagues, he wisely keeps this sentiment to himself.

As the story progresses, however, the disparity between Changez's corporate breeding and his national and cultural identity grows ever larger. Erica, afflicted with anxiety and depression following the attacks in New York, withdraws for long periods; each time he sees her, she has shrunk to a fraction of the person he had seen the time before. His conflicted relationship with her mirrors his increasingly frayed connection to the United States, as perceived American self-righteousness and machismo soon supersede concerns for maintaining some semblance of the existing (and precarious) global order, a development that holds dubious implications for Changez's native Pakistan. "It will perhaps be odd for you," he tells his guest, " imagine residing within commuting distance of a million or so hostile troops who could, at any moment, attempt a full-scale invasion."

Towards the end of his story, Changez describes an emotional farewell with Erica, which immediately follows her verbal longing for her deceased lover. As Changez prepares to leave her, "she gave me a hug and afterwards she stood there, looking at me. But he is dead, I wanted to shout!" To Changez, the statement is an equally appropriate analysis of American innocence. Nostalgia for a mystic past is hardly empathetic when one exerts such overwhelming control over the present. "I had always thought of America as a nation that looked forward," Changez muses. Following September 11, "for the first time I was struck by its determination to look back." His attempts to ingratiate himself into Erica's life met resistance from the same impulse that denied his easy assimilation into American culture.

These sentiments, while hardly original, are easily comprehensible and are expressed in an enjoyable format to boot. Thus it is all the more disappointing when the narrator descends into the occasional, yet dispiriting, cliche. Upon returning to the States from an aborted assignment in Chile, for example, Changez suddenly sees his destination in a new light. "...I was struck by how traditional your empire appeared. Armed sentries manned the check post at which I sought entry...once admitted I hired a charioteer who belonged to a serf class lacking the requisite permissions to abide legally and forced therefore to accept work at lower pay; I myself was a form of indentured servant whose right to remain was dependent upon the continued benevolence of my employer." Melodrama aside, it is difficult to ascertain exactly how these disjointed fragments coalesce with the rest of the narrative.

This is the most egregious of Hamid's errors, an admittedly minor one in the spectrum of literary flaws, but one that, nonetheless, could just as easily have been uttered by Michael Moore as penned by a serious author. Ultimately, Mohsin Hamid is exactly that; now, if only the filmmaker could take a few notes from him.

Sunday, April 18, 2010

The two worst words in the English language

"Video buffering."

#18: The Big Short

In describing the behavior of Wall Street bankers prior to the financial crisis, many adjectives have been bandied about. Greedy, say some; arrogant, claim others. What is only now beginning to gain ground on these populist declarations of discontent is a third, and far more horrifying, descriptor: stupid. This trait may at first seem less offensive to those of us who flaunt our self-prescribed moral superiority over these perceived miscreants. The reality, however, is anything but comforting. In The Big Short: Inside the Doomsday Machine, Michael Lewis, author of Moneyball and Liar's Poker, dabbles in the thriller genre, often to hilarious effect, as he details the inner workings of a financial world that was truly ill-prepared for its inevitable Waterloo.

I'll admit it: The Big Short is a very, very entertaining book. Mine is an admission whose sheepishness can only be understood once one has finished reading the book. It reads like a John Grisham novel, yet John Maynard Keynes is a far likelier neighbor on a library shelf. Lewis is profligate in his use of such terms as "big Wall Street firms" (32 occurrences, according to Google Books) and he is wont to transcribe entire conversations whose accuracy is often questionable but whose content leaves the reader in stitches.

Ultimately, it is funny, isn't it? Here were our best and brightest, as David Halberstam might say, assuring us that our money was safe, that real estate prices would continue to rise, that subprime loans were the healthy product of a heightened ability to reduce risk, not a house of cards upon which much of the global economy now rested precariously. And they were wrong, not because they intentionally lied (though some did), but because they failed to recognize the bright red flags everywhere on (and sometimes off) their own balance sheets.

The Securities and Exchange Commission's civil lawsuit against Goldman Sachs this week has resulted in even more vitriolic rhetoric against investment bankers and their ilk, a demographic Lewis takes no pains to please in The Big Short. He opens his book with this: "The willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grown-ups remains a mystery to me to this day." And he ends it on an account of his lunch with an investment banker, his old boss at Salomon Brothers, recounted with equal parts nostalgia and regret. In between, he rips apart much of the industry, railing against "the madness of the machine" and buttressing his anecdotes with footnotes that occasionally take up half the page.

It's hard to say whom Lewis ridicules more, the bankers or the ratings agencies: while The Big Short is premised on the fact that high-powered bankers failed to research or even understand their own investments, Lewis makes it painfully clear that the foundation upon which all risk analysis rested was the highly coveted -- and, it turns out, highly manipulable -- ratings from industry leaders such as Moody's and Standard and Poor's. According to Lewis, employees of these firms, instead of conducting far-reaching investigations into the nature of subprime collateralized debt obligations (CDOs), simply took at face value much of what the banks told them. And since there were large fees to be had for each rating bestowed on these shadowy financial instruments, Moody's and S&P had significant incentive to perpetuate the subprime industry.

In one particularly enlightening passage, Steve Eisman, one of the book's central characters whose disgust for Wall Street types figured prominently into his investing strategy, explained the lack of incentives for analysts at ratings agencies, a misalignment that helped to create and foster the crisis. "'They're underpaid,' said Eisman. 'The smartest ones leave for Wall Street firms so they can help manipulate the companies they used to work for. There should be no greater thing you can do as an analyst than to be the Moody's analyst...So why does the guy at Moody's want to work at Goldman Sachs? The guy who is the bank analyst at Goldman Sachs should want to go to Moody's. It should be that elite.'"

The Big Short is filled with quotes such as this. And although not all of them are as penetrating or as keenly observant of the recession's underlying fault lines, each is helpful in piecing together a panorama of the landscape that existed in and around these "big Wall Street firms." Michael Lewis has not compiled a tell-all here; if he has revealed any industry secret, it is simply the astonishing truth that, in the subprime lending business, there were none. When the dust had settled around our financial ground zero, it soon became apparent that even Wall Street had failed to understand Wall Street. In this, if nothing else, it shares the same fate as Main Street.

Sunday, April 11, 2010

#17: Crowdsourcing

"No matter who you are, most of the smartest people work for someone else," quips Bill Joy, a Sun Microsystems co-founder. This declaration was articulated as a paean to the wisdom of crowds, the subject of Jeff Howe's 2008 book, Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business. Why limit yourself to a small, expensive subset of the available talent, the argument goes, when a global network of freelancers will gladly do the job better for little or free?

Howe's enthusiasm is very nearly unequivocal. He predicts that today's tech-savvy youth will "help accelerate the obsolescence of such standard corporate fixtures as the management hierarchy and nine-to-five workday," concepts he deems to be "artifacts of an earlier age when information was scarce and all decisions...trickled down from on high." And Howe's praise of the community as exemplified in crowdsourcing is so complete that it borders on subservience: "Yes, communities need a decider," he concedes in his concluding chapter, but while " can try to guide the community...ultimately you'll wind up following them."

The author's unabashedly optimistic chronicle of the ascendancy of crowdsourcing (a label he created) brings to mind a phrase once made famous by former Federal Reserve chairman Alan Greenspan: "irrational exuberance." Jeff Howe's full-fledged advocacy for the crowd's potential is equally as overreaching as Jaron Lanier's dire warnings on the same topic. In You Are Not a Gadget, Lanier writes ominously, "We [have]...entered a persistent somnolence, and I have come to believe that we will only escape it when we kill the hive."

Both authors fail to account for some basic rules of human nature. Lanier laments that "when [digital developers] design an internet service that is edited by a vast anonymous crowd, they are suggesting that a random crowd of humans is an organism with a legitimate point of view." To which Howe would undoubtedly respond, Damn right. In fact, he explicitly states that "a central principle animating crowdsourcing is that the groups contain more knowledge than individuals."

Howe and Lanier are each right in their own ways. Crowdsourcing does indeed represent an entirely new model of work, one that transcends business and could upend a sizable chunk of existing corporate practices. Many of Lanier's fears, while understandable, are not feasible now or in virtually any other conceivable time horizon. And yet he is right that crowdsourcing will never replace the value of specialization. While Howe correctly lauds the democratization of decision-making -- for example, aspiring filmmakers are no longer beholden to studio executives' every whim -- his populist celebration of online egalitarianism is not bounded by realistically described limitations. "The crowd possesses a wide array of talents," Howe writes, "and some have the kind of scientific talent and expertise that used to exist only in rarefied academic environments."

The key word here is "some." Howe notes Sturgeon's Law ("90 percent of everything is crap") and briefly admits that this may present an inaccurate portrayal of reality: "a number of the people I talked to for this book thought that was a lowball estimate." Even for the ten or fewer percent that actually do provide reasonably intelligent contributions to the marketplace of ideas, much will be repetitive or non-cumulative. A thousand people with a hobbyist's interest in chemistry may all eagerly contribute to a forum on noble gases, but it hardly follows that they will achieve any real breakthrough that eludes far more studied experts in the field.

Ultimately, it is not so much the anecdotes that undercut Howe's thesis, nor is it his own repetition (which, in one particularly egregious case, consisted of several sentences copied wholesale from an earlier section of the book). Instead, it is his idealism that brings to mind countless earlier predictions of technology's ability to transform human nature, prophesies that have more often than not been proved demonstrably untrue. It remains to be seen what will become of crowdsourcing; will it go the way of the flying cars that American prognosticators naively envisioned over half a century ago? This seems unlikely, and yet so does the author's vision of a crowdsourcing revolution in business. The truth will likely lie somewhere in the middle, lodged comfortably between Jeff Howe's crowd-fueled utopia and Jaron Lanier's "hive mind" hell.

Sunday, April 4, 2010

Happy new year

For those of us who measure the passing of time by the first pitch of successive baseball seasons, our annual celebration is now upon us. Tonight, the boys of summer return. Even better for those of us who plead allegiance to the vaunted red B, they will descend upon Fenway Park in Boston, where the hometown Red Sox host the World Series champion New York Yankees. (My fingers nearly mounted a mutiny as I finished typing that sentence.)

With a pitching rotation that includes newcomer John Lackey, Josh Beckett, and Jon Lester as the first three starters, the Sox are looking to be a team of solid defense and great pitching. For the first time in recent years, however, Boston's lineup is looking vulnerable. We'll need either a few career performances from unexpected players, a major acquisition sometime prior to the trading deadline, or both. For many years, the Sox used to be a team built to make it to the playoffs but without the depth to last once they got in. This year they may have the opposite problem.

Tonight, at 8:05 PM, be near a TV. Josh Beckett. C.C. Sabathia. Red Sox-Yankees at Fenway Park. And happy new year.

#16: Americans in Paris

Americans have long been fascinated with World War II. There are many reasons for this, not the least of which is the United States' outsized self-portrayal as the conflict's deus ex machina. However, Charles Glass' new book, Americans in Paris: Life & Death Under Nazi Occupation, is not merely another ode, in a long line of them, to American wartime heroism. Indeed, it is the moral ambiguity of many of the book's real-life subjects and their actions that separates this work from the neatly packaged pop culture depictions that characterized, say, the fictional Band of Brothers. (I write this as someone who enjoyed that series and is currently an avid watcher of The Pacific. However, while these series' entertainment value is indisputable, their historicity is dwarfed by meticulously researched non-fiction.)

Glass, ABC News' former chief correspondent for the Middle East, has compiled a moving portrait of life on the ground in Paris during the German occupation. Even in borrowing from a wide array of sources, the author admirably pieces together the war years' disjointed fragments and transforms them into complete narratives. As vignettes within the overarching theme of Paris in the war-torn early 1940s, they combine to form a panorama of a world-class city brought almost, but not entirely, to its knees.

Notable amongst the ensemble cast are Sumner Jackson, a surgeon for the American Hospital in Paris whose dedication to his craft was matched only by his devotion to the Allied cause; Clara de Chambrun, caretaker of the American Library of Paris and detester of both the Nazi invaders and the French résistants; and Sylvia Beach, proprietor of the bookstore Shakespeare & Company and tireless friend of literary giants James Joyce and Ernest Hemingway. But by far the most complex and perplexing character is Charles Bedaux, introduced here as "le millionaire américain." His business exploits, fueled by an entrepreneurial spirit that launched him to wealth and status as an "efficiency engineer," consumed all his energies and, eventually, himself.

Although born in France in 1886, Bedaux was naturalized as an American in 1917 and quickly went to work establishing himself as a consultant. While living in St. Louis, Bedaux had an epiphany: "'I soon found that engineers had assigned units of measurement to power of all sorts -- fuel, water, electrical. Why, I wondered, couldn't a wholly scientific and mathematical measurement of manpower be ascertained?'" As Glass then goes on to explain, the narcissistic Bedaux soon created just such a unit of measurement, and dubbed it the 'B' unit, for 'Bedaux.' What the businessman lacked in tact, however, he more than compensated for in ingenuity, as his modification of Charles Winslow Taylor's efficiency methods led to Bedaux's ascension to the upper rungs of not simply the American, but also the European, social ladder.

It was Bedaux's association with unsavory individuals and regimes that eventually led to his demise -- socially, financially, and even physically. Ultimately, his failures could be traced to his underlying philosophy, an either amoral or immoral worldview (depending on the reader's own) that found its simplest expression in Bedaux's own words: "'A man loves his country. He makes laws for the glory of the flag. He traces the outline of a national ideal he would like to live up to, but his stomach, his need for trade are essentially international. He is a patriot, and a sincere one, but when his money is concerned, he blissfully commits treason.'" Such unabashedly self-interested sentiments, while easily in keeping with modern corporate behavior, are nevertheless as shocking to read openly in a book as they must have been when they were first enunciated decades ago.

And yet the actions of Charles Bedaux were not, in any strict sense of the term, treasonous. (As Charles Glass notes, Bedaux was guilty of "trading with the enemy," however.) In fact, as the reader discovers late in the book, the ever business-minded Bedaux did take sides in ways that were not immediately apparent as the war dragged on. History is a harsh arbiter, and what made sense at the time will be dissected in ivory towers and living rooms for generations. Perhaps this is the lesson learned from the arguably collaborationist activities of Clara de Chambrun's son and his wife as well. Indeed, there are innumerable aspects of wartime decision-making that eventually become permanently etched into lore as gallantry or cowardice, loyalty or betrayal. But in these delicate moments, in which every second marks the making of history, one's legacy is hardly a consideration.