Nervous traders on the trading floor in the midst of one of Wall Street’s most historic weeks

Things are looking grim down on Wall Street. Rather than trying to explain the chaos myself, I’ve chosen two articles that will do it better than I can. Suffice it to say that what is easily noticed is that the credo in American capitalism seems to be “privatize the profits, socialize the losses” as several companies have been rescued by the United States government and more rescues are bound to come.

From The World as we Know it is Going Under:

Things got worse after the markets closed. Washington Mutual, America’s fourth-largest bank, announced that it had started the process of putting itself up for sale. The Wall Street Journal reported that both Wells Fargo and the banking giant Citigroup were interested in taking over the battered American savings bank.

And then came the announcement that would dominate all of Thursday’s market activities: Morgan Stanley — the venerable Wall Street institution and one of the last two US investment banks left standing — had lost massive amounts and was fighting for survival. Media reports were saying that it was even in talks about a possible bail-out or merger. Rumor had it that possible suitors might include Wachovia or China’s Bank Citic.

China?

“Folks,” economist Larry Kudlow, a host on the business channel CNBC begged his viewers that evening, “let’s not let this magnificent country go down!”

In fact, it really does look as if the foundations of US capitalism have shattered. Since 1864, American banking has been split into commercial banks and investment banks. But now that’s changing. Bear Stearns, Lehman Brothers, Merrill Lynch — overnight, some of the biggest names on Wall Street have disappeared into thin air. Goldman Sachs and Morgan Stanley are the only giants left standing. Despite tolerable quarterly results, even they have been hurt by mysterious slumps in prices and — at least in Morgan Stanley’s case — have prepared themselves for the end.

“Nothing will ever be like it was before,” said James Allroy, a broker who was brooding over his chai latte at a Starbucks on Wall Street. “The world as we know it is going under.”

and from Worst Crisis Since ’30s, With No End Yet in Sight:

“This has been the worst financial crisis since the Great Depression. There is no question about it,” said Mark Gertler, a New York University economist who worked with fellow academic Ben Bernanke, now the Federal Reserve chairman, to explain how financial turmoil can infect the overall economy. “But at the same time we have the policy mechanisms in place fighting it, which is something we didn’t have during the Great Depression.”

Fed and Treasury officials have identified the disease. It’s called deleveraging, or the unwinding of debt. During the credit boom, financial institutions and American households took on too much debt. Between 2002 and 2006, household borrowing grew at an average annual rate of 11%, far outpacing overall economic growth. Borrowing by financial institutions grew by a 10% annualized rate. Now many of those borrowers can’t pay back the loans, a problem that is exacerbated by the collapse in housing prices. They need to reduce their dependence on borrowed money, a painful and drawn-out process that can choke off credit and economic growth.

GZA rocks the crowd at the Fillmore in New York City, September 12, 2008

The juggernaut known as capitalism becomes a steamroller when combined with the corporate entertainment history. All forms of artistic expression that break the barrier between the unknown and the popular are quickly co-opted by the industry, packaged, marketed, and force-fed to the willing masses.

Hip Hop hasn’t escaped this truism. Born in the South Bronx, the DJ and rapper formed two of the four parts of the hip hop culture rising at the time (the other two being breakdancing and graffiti). Similar to punk and to rock’n'roll in the 1950s, hip hop was rebellion in musical form. From the deconstruction of the popular music of the day in which singing was overdubbed and manipulated, and instruments were numerous and played with by sound producers, hip hop stripped it bare by having a DJ with a turntable and an MC with a mic.

The golden age of hip hop was in the late 1980s with acts like Run DMC, Eric B. and Rakim, Boogie Down Productions, and EPMD. The rhymes and production grew increasingly sophisticated as the time progressed while the themes revolved around MC battles, parties, and black nationalism. The arrival of gangsta rap say the focus shift to the West Coast as hip hop was embraced by the larger white audience. The subject matter grew grittier as it shifted towards violence and gang culture.

The pendulum swung back in 1993 with the seminal release of Enter the Wu-Tang (36 Chambers) by the Wu-Tang Clan. Seen as a response to the domination of the West Coast and gangsta rap, the Wu-Tang release saw New York reclaim its title as hip hop’s ground zero through the progression of the genre found on the album. The tone was darker, more streetwise, often more vulgar, yet the rhymes were tighter and the production darker and more advanced thanks to the skills of the Wu-Tang’s RZA. New York was back in the pilot’s seat.

Liquid Swords (1995)

The domination of New York was secured with the release in 1995 of Liquid Swords by GZA and produced by the RZA. The beats pounded harder, the music was darker, and the rhymes couldn’t have been tighter. The GZA’s material floated around drug deals gone sour, mafioso lifestyles, and of course their Ku-Fung muse. What separates GZA from the later MCs in regards to his subject matter is that he keeps a detachment from the subject while still being the subject. He doesn’t flaunt the wealth as has become staple these days, nor does he engage in the crude, as would West Coast MCs. His product was tight, and matched up hit for hit, beat for beat with the RZA’s production to produce the perfect hip hop album. Liquid Swords serves as a bookend for the Golden Age of Hip Hop as only months later the corporate vampires began to promote bling culture, thus fusing together hip hop with crass materialism throughout co-option and ending any real rebelliousness in the genre itself. Liquid Swords served as the high water mark for hip hop.

It’s little wonder then that Liquid Swords has seen a resurgence in popularity. Disgusted with the dumbed-down hip hop lite feted by the masses, hip hop purists have reoriented themselves to the GZA, undoubtedly the Wu-Tang’s purist. The GZA staged a revival of Liquid Swords this past Friday at the Fillmore in New York City. Much how rockers grew annoying with the hair metal explosion of the 1980s and turned the clock back to the punk of the UK and the West Coast, hip hop purists are rejecting the corporatist drivel being pumped out at them today. Whether they’ll be successful in rerouting the course of hip hop remains to be seen.

While we ponder that, let’s have a listen to the GZA’s “4th Chamber” from Liquid Swords put to a clip of a film by Jean Luc-Godard. Hip hop purism meets film purism……

As a demonstration of his lyrical prowess, take a look at only the first few lines of “Hell’s Wind staff/Killah Hills 10304″:

Restaurants on a stake-out
So order the food to take out
Chaos, outside a spark steakhouse
Maintain the power, I feel the deal’s gone sour
Nigga Mr. Wedding, late a fuckin half hour
And his man who bought land from Tony Starks
While he was contractin bricklayin jobs in city parks
he’s a loan shark, bitches raise a grand to a finger
In a garment that’s stretched, got it sewn like Singer
Cause all that talk blasphemy this kid after me
for the heist, in a Burlington Coat Factory

In only several lines, he manages to reference the John Gotti-led hit on Gambino Family boss Paul Castellano, the construction levy in Manhattan put out by Sammy Gravano, and the Genovese Family’s tight grip over the Garment District. So many key references in only a few phrases delivered like quick jabs on target every time. Let’s hope that the GZA’s revival of Liquid Swords pays dividends for the genre as a whole.

“Greed is Good” – Michael Douglas as the corporate vulture Gordon Gekko in Oliver Stone’s “Wall Street”

The scene is certainly an unforgettable one. Gordon Gekko, the notorious Wall Street corporate vulture, stands in front of a shareholder meeting playing Robin Hood to the unsuspecting people in attendance as he confronts the executives of the company and pulls off a hostile takeover by appealing to peoples’ baser instincts when explaining that “greed is good”.

Although Gekko was meant to represent the cutthroat corporate culture of America in the high-flying 80s, many took his philosophy to heart. The argument went that man’s selfishness is what has propelled human invention and evolution. But is that the case?

Michael Shermer, writer, historian, and founder of The Skeptics Society tells us that this argument is in fact completely wrong. Read the interview with Michael Shermer here. Here’s a sample:

Why, if capitalism is so great, did the Enron scandal occur? Some have suggested that it was a few bad apples in the corporation.

The “bad apples” theory doesn’t explain what really happened at Enron, and it doesn’t explain the nature of corporate evil. Jeff Skilling, the CEO of Enron, set up what he thought was a Darwinian marketing environment. Skilling was a fan of Richard Dawkins’s important book The Selfish Gene, which Skilling misread. He took it to mean that evolution is driven by cutthroat competition and self-centered egotism. He liked the notion of the “survival of the fittest.” Skilling set up a Peer Review Committee, which became known as “rank and yank.” Everybody was ranked on a scale of one to five, and 20 percent of all fives had to be fired. The reviews were posted on a company website with a picture of the employee, increasing the potential for personal humiliation. Good luck being able to go out and have some fun with your teammates. Teammates! These are people who may be taking my job. Once you set up an environment like that, people begin violating rules. Skilling’s evaluation system led to a lot of behind-the-scenes wheeling and back-door dealing between department heads and managers, swapping review evaluation points. In addition to his belief in an outdated and untenable doctrine of social Darwinism, Skilling was a high-risk taker — short on dopamine, we might conjecture. What causes corporate corruption is an environment of evil established by the founders, corporate executives, and managers — a corporate psychology — that creates situations that encourage our hearts of darkness to beat faster.

After the success of “No Logo” Naomi Klein has set her sights on “Disaster Capitalism”

Her grandfather was a Marxist who was fired from Disney for trying to organize the workers. Her father fled to Canada to avoid the Vietnam War. Naomi Klein made her name in the materialistic 1990s by railing against Nike for using dirt cheap labour abroad and against Starbucks for squeezing out the little guys. She became an intellectual celebrity with the publication of “No Logo” in 1999 where she decried the rise of corporations and how they monetized every aspect of our lives and culture. In our post 9/11 world, Klein has upped the ante in her war with the corporations in her latest book The Shock Doctrine: The Rise of Disaster Capitalism. Klein turns her fury towards American policy since the Second World War and how “disasters” have provided pretexts in which to spread globalization and corporate power at the expense of the poor. Her central thesis is that free-market economics as defined by the Chicago School and in particular Milton Friedman were implemented against the will of the people around the world through disorientation whether caused by war, coup d’etats, or disasters such as Hurricane Katrina.

Is Klein right? Is there a conspiracy by corporations and their government partners to cause chaos like war or to take advantage of disasters like tsunamis in order to spread the reach of corporations for the sake of profit? Jonathan Chait of The New Republic doesn’t necessarily agree with her theory in: Dead Left.