Friday, August 03, 2012

The new rich?

After a 32-year exile, I am now back at home in the Boston area, very happy to be here and fascinated by what has changed and what has not. Most of the old bookstores are long dead, but three art-house movie complexes and a fourth single screen still survive within a 25-minute bike ride of my house, and my wife and I are taking full advantage. I've seen, I think, six movies already, including two documentaries in the last two days: The Queen of Versailles and Ballplayer/Pelotero. When I lived here for most of the time from 1965 to 1980, similar theaters were filled with my contemporaries, learning about life from the classics of the past and, by the mid-1970s, from the new classics of the present. (I will never forget a summer afternoon showing of One Flew Over the Cuckoo's Nest at the Harvard Square theater, which sadly closed its doors about a week before my return. At the climax the screaming audience was ready to storm the stage and help McMurphy finish Nurse Ratchett off.) Now, however, films are playing little or no role in the emotional development of the younger generation. The West Newton showing of The Queen of Versailles had between 50 and 100 people in attendance but there could not have been ten of them under 60.

The movie, however, provided as much food for thought as Inside Job, if not more. David Siegel is the owner of Westgate, the largest time-share outfit in the world. He recruited a lot of his customers by giving them free tickets to Disney World (he lives, and is headquartered, in Orlando). He was on top of the world in 2007 when the shooting of the documentary began, building his Versailles-influenced mansion, soon to be the largest house in the United States, but then his empire crashed and most of his employees went out of of work. His own house went into foreclosure, although he has gotten it out again, apparently, by selling his huge Las Vegas hotel-casino. He is very proud of what he does--vacations, he explains,have been shown to save lives and marriages. Yet his whole empire was obviously built on sand, and throughout the movie he shows a truly astonishing lack of understanding of any of the larger issues that have nearly finished him off.

Siegel, to my utter amazement, gave his clients 90% mortgages. Now he might have understood, one should think, that banks give mortgages on homes (or used to) because they know people care more about their homes than about anything else, and that they will make sacrifices to make the payments even when times are hard. But timeshares? Isn't it obvious that many people will just drop them when they become short of cash? The great recession led untold thousands of his customers to default and destroyed his market. The movie suggests that he borrowed millions--probably tens or hundreds of millions--based on those mortgages--and now his future is in the hands of his banks. He has the gall to blame the banks, at one point, for having addicted him and others like him to cheap money. It was evidently entirely possible during the last twenty years to become nearly a billionaire without a substantial grasp of economics, and that was bound to have consequences.

Jackie Siegel spends a lot more time in front of the camera and seems like a nice person, but her irresponsibility is at least equal to her husband's. She now has eight children, delivered in rapid fire--and what will become of them now, heaven only knows. In one revealing moment, she mentions that she never expected to have more than two, but when she discovered nannies she decided there was no reason not to have as many as possible! Now most of her staff has been laid off and her current mansion--much smaller than the unfinished one--is a disaster area, virtually an open range for their exotic pets, whom they worry are eating each other. She says sadly at one point that the change in their financial position may actually force their children to go to college and get jobs. Elites like these are not self-sustaining.

The success of western civilization was built largely on education, dedication, and good judgment. None of these now seem necessary to rise to the highest levels of business, politics, or, for that matter, academia. And Siegel has political influence as well: at one point he brags of having used an illegal stratagem (what it is, he will not say) to secure George W. Bush's victory in Florida in 2000, and thus his election with all its extraordinary consequences. How typical is he of the kind of billionaire whose influence over our politics has become so critical since the Citizens United decision? I don't know, but I'm afraid he's not as unusual as he looks.

My career at the Naval War College--where some of the old virtues have survived--is now over, and my full-time career as an educator has one more year to run, as a visitor at Williams College. Since moving to Boston I have had a long talk with a very distinguished professor at a leading university who believes his institution has become hopelessly corrupt. We have assumed our civilization is self-sustaining, but it required a great deal of work, dedication, and thought to create. Those virtues are now increasingly lacking, and I'm not sure exactly how they will be revived.

4 comments:

Bruce Wilder said...

My father, the policeman, used to caution me that it was hard to cheat an honest man, his way of saying that most scams leveraged the corrupt impulses of their victims. That was certainly true of Siegel's time-share empire, built on luring people with a "free" weekend vacation for sitting thru a sales presentation, and on deceptive sales practices, and deceptive financing, etc.

We also have a culture, which is increasingly passive. My father was an Elk, his mother belonged to the women's auxiliary to the Masons; my mother's mother headed a women's club, which led many civic ventures in her small town. People, today, don't belong to anything, but Facebook.

The elite is "irresponsible", because very little of the elite feels dependent on the masses. No one is in the elite, because the Odd Fellows or the Shriners or even the UAW local or the local Chamber of Commerce, elected them. Like the Siegels, much of the elite derives its income from parasitic, financialized schemes, not from producing genuinely valuable goods and services. Even the actually valuable goods -- the iPhone, for example -- are produced elsewhere and imported in a scheme that involves cheating the Chinese, who make them, to the point of inducing suicide, and then saddling subscribers with over-priced, unreliable services on disadvantageous contracts (thanks AT&T).

I suppose the film's title is an ironic reference to another period of extreme corruption and elite incompetence, when France, once the richest country in Europe, was bankrupted by an interminable struggle between a palsied royal authority, advised by proto-neo-liberals known as physiocrats favoring austerity on grounds of moral rectitude while ignoring the increasing shortage of bread afflicting the masses, and a determined reactionary aristocracy, which did not want to pay taxes of any kind. Sound familiar?

Like it or not our "civilization" has always entailed lots of corruption, necessitating revolt and reform. It is the absence of a idealistic spirit, or organization, supporting the latter, which dooms us, as much as the former. Corruption runs rampant, because it is unopposed.

Bozon said...

Professor

Thanks for this. I especially liked this remark: 'We have assumed our civilization is self-sustaining,...'

That has been so true of Americans.

I had said somewhere on my blog, that not only is it not self sustaining, but it, politics I believe I was talking about, really is life and death.

We may be seeing that coming to pass in our own life time I am afraid,

where enormous, yet slowly creeping, errors of politics, (how else to characterize them)

both domestic and foreign affairs, resolve into conflicts that have been long in their development.

All the best
GM

publion said...

I fully concur with your thoughts in this piece.

It takes a great deal of effort to create and sustain a culture and a civilization and - as can now be seen - a genuinely productive economy.

To create and sustain a Shape, against the omnipresent centrifugal pull of Life's and History's forces is a challenge for every individual and - especially in a democratic culture - for the entire Citizenry.

Shape implies boundaries, of course, by definition. It was perhaps the marquis error of my Boomer generation to presume that Shape was merely a construct imposed on us by 'anybody over 30' and had no inherent value.

Or, at best, that Shape could somehow be sustained magically while actually endlessly liquefying every 'obstructive' boundary.

In a relentless pursuit of the Shapeless Shape we achieved all of Ahab's destructiveness while losing all of his densely powerful solidity as a human being ... the worst of both worlds.

And now the Shapeless Shape has turned on our frail Vessel and hammered holes that cannot easily be repaired, if they can be repaired at all.

publion said...

This is what I get for listening to old tunes while reading.

Goebbels hated the iconic German soldier song "Lili Marlene" - he felt it depicted the German soldier as pining for home and loved ones when he should be depicted as brashly furthering the Thousand-Year-Reich.

I suppose, if anyone gave it some thought, that the Beatles' "Let it Be" would suffer the same fate at the hands of the Boomer activists.

But now, finally, we can all sing Mary Hopkin's "Those Were The Days" with which - if I recall correctly - she knocked the Beatles off the Number One spot on the charts in 1969 (or late 1968).

"Those were the days, my friend, we thought they'd never end; we'd fight and live forever and a day; we'd live the life we choose, we'd fight and never lose - those were the days, oh yes those were the days."