The Problem with Kitsch

Video game “purists”, many of whom have now passed forty, insist on a Golden Age of arcade games that took place in the late seventies and early eighties. During this era, young companies bombarded young fans with hit after hit, from Centipede to Asteroids to Defender to Donkey Kong. As games becomes more complex, the old guard aged and ended their interest in later hits like Zelda and Sonic the Hedgehog. I have gradually slipped away from playing new games myself after devoting my early teen years to eagerly awaiting the next big thing. At twenty-two, Mario Kart 64 holds my interest more effectively than anything else that has come out lately.

On the one hand, this is natural. I have better ways to spend my money and free time than I did when I was 13. On the other are those who insist that “retro” games, which tends to mean whatever games came out when they were between the ages of eight and fourteen, are the best games in the history of the world. Still there are other who were born five years after Joust was published and play it on an emulator and will mention that fact whenever given the opportunity.

This is bizarre and peculair. Consider what differentiates “classic” or “retro” from contemporary ones. Technology. “Retro” games have poorer graphics, sound, controls, and pretty much everything you could measure objectively. Now, while many of these games may possess excellent gameplay or other je ne sais quois, no evidence is offered to suggest that they, as a rule, monopolize such subjective factors. Nothing, beyond such non-sequiturs as “they’re too complicated” (so was Donkey Kong compared to Pong) or “they’re commercial” (it was always about the money if you read the history), are offered to dispute that. Even if one assumes that such qualitative, subjective factors have not improved in twenty years -an awkward assumption given the improvements everywhere else- new games are still better. The consumer can pick the subjectively superior ones AND get graphics improved by twenty-five years of development. Any presumption that “retro” games are somehow better than contemporary games for reasons outside of nostalgia is completely false.

While this is a subject I’m far less familiar with, I believe the same carries over with film. Dated comedies are no longer funny because they are dated. Dramas from the fifties are painful to watch due to ancient cinematography and wooden actresses with unnatural, high-felutant accents. Watching them is something for academics or professionals do, not something to watch casually and enjoy.

I say this because people do choose retro games and classic movies over their contemporaries, and consciously, for reasons besides nostalgia. They do so while knowing the graphics or acting sucks, but think that it adds to the “charm” or makes it more “genuine”. This is what I mean by kitsch. Many have the need to choose entertainment that is objectively worse so that they can feel better.

“Hipster irony” is an analogous concept to this particular to a certain subculture with society. “Hipster” males might wear, say, ugly, thick rimmed glasses and an overly-tight fitting sweater. They then feel superior to people who wear proper clothing because they are self-aware of how ridiculous they look. This brand of style and sensibility has been satirized to death pretty effectively at the now-famous blog, Stuff White People Like. Its author points out the ludicrous motivations of “white people” (hipsters) who drive the Toyota Prius, eat organic foods, get arts degrees, and identify with the movie Juno. Some of their environmental concerns may be valid, but the overriding theme of their choices is to appear superior by consciously choosing poor options “ironically”. In a speech at google, the author says,

What [Stuff White People Like really is] about is that “white people” is more of a class than a race thing [...], a different generation of people who still have the same desire for status and competition among neighbors, but unlike in the past when that status was determined by material wealth like the size of your house or the size of your diamond ring, it’s been replaced by “authenticity”, [and] environmental awareness, [...]. It’s about this sort of shift [all the while] we are still as competitive as ever.

To that I add, when choosing environmentalism or indie rock or classic movies or retro video games for reasons of aesthetics rather than substance, there is something wrong. It is especially difficult to pull apart what is what or which choice is genuine since, well, “white people” (or movie aficionados or retro gamers) get very defensive if questioned.

Really -and any entry from Stuff White People Like argues it better in any one of its entries than I can by essay- choosing genuine or environmentally conscious options really boils down to feeling superior. Going to farmers markets or jumping headfirst into another culture is more ostentatious than effective by any measure for those goals. I’m not overstating or misrepresenting these attitudes; for example, there is literally a raw foods restaurant with a sign outside that says “conscious food for conscious people”. All too often (while not always) the end goal of purposely putting annoying restrictions on one’s self, whether that be spending a lot of money on a Toyota Prius, not eating cooked food, or only playing video games with pixels the size of my fist is too congratulate one’s self for doing so.

But still, let’s be honest here.

When I first read Stuff White People Like, I thought it was amazing. It perfectly described the irrational aesthetics of my friends, acquaintances, and coworkers. Certain entries, like Arrested Development, The Daily Show/Cobert Report, and traveling, especially resonated with me. Some of my friends went through the list and counted all the entries that defined them- many. I went through the list and counted all the entries that defined me- few. I liked this fact.

It took me a few weeks to grow sick over the fact that I like that I’m not a “white person”.

Choosing kitsch for the sake of kitsch, whether that is playing thirty year old video games or going to farmers markets, is wrong because it is dependent on feeling unique and superior to others. By acting counter-culture to the counter-culture movements of kitsch, I was doing the same exact thing. Even now, I question my awareness of that as further evidence of trying to trick myself into feeling superior. I really don’t know; is my repulsion to traveling and The Colbert Report out of my objective opinion or only to feel superior to kitsch? Conversely, do I only try to form “objective opinions” so that I can feel superior?

These are the types of realizations that make me want to throw up. Please join me in my bulimia.

And again, I cannot separate in my mind whether that invitation is true or a way to feel superior to the reader.

Bankruptcy: A Hidden Bubble-Enabler

Economic bubbles are an accepted fact both popularly and academically, but their causes are subject to debate. Monetarists posit that reactionary, Keynesian monetary policy causes the normal ebbs and flows of the economy to fluctuate more drastically, since central bank’s “stabilizing” actions take time to work their way through the economy. Austrians argue that contemporary banking systems allow lending institutions to push the savings rate of an economy above its true level, resulting in overstocked inventory and production capacity that the consumers cannot afford. Those with a financial bent see investors who focus on capital gains in the stock market, bidding up the price above and beyond its fundamentals simply because other people will probably bid the price up more until the bubble finally bursts. Still others focus on psychological factors that cause common investors to overvalue categorically the future prospects for the economy as a whole. Depending on one’s assumptions and background, any of these explanations may be appealing. They largely possess internally correct logic and are not necessarily mutually exclusive.

While these models require certain assumptions regarding the intrinsic framework of the economy, these explanations do not need to be the whole story. Stepping on a gas pedal causes a car to move faster, but its rate of acceleration also depends on the texture of the road, the power of the engine, and the weight of the car, among myriad others. One, two, or three of the above positions may be the analog of stepping on the gas pedal and the power of the engine, but there is no reason to believe that there does not exist an equivalent to the less important texture of the road.

I conjecture that one of these factors is the very existence of bankruptcy law in the United States. This is a very strong statement; I’m firmly aware of this. At the same time, if you dissect what bankruptcy law really is and really does, its existence and nature is peculiar and bizarre.

Declaring bankruptcy is a painful, terrible thing. No one wishes it for herself. Due to factors entirely outside of his control, bills may add up and the bank may even seize an individual’s house. Bankruptcy, while very damaging to one’s reputation and prospects, allows a way out and a fresh start. Creditors couldn’t have ever really expected to get paid, but bankruptcy allows swift resolution and the opportunity for them to get something, anything. On a case-by-case basis, the process allows a resolution and the likely best outcome for all parties.

When lawmakers write public policy, however, their job is not one specific case study or example. It is (or should be) what is best for the economy looking forward. The existence of bankruptcy as an alternative to forever digging out of a hole of bills eliminates a cost associated with taking on financial risks. No one wants bankruptcy, but its difficulties set a mathematical lower bound for the downside risk of a particular venture. For instance, say, opening a pizza parlor has a 3/5 chance of succeeding, 1/5 chance of failure, and 1/5 of utter failure, with the latter two options both resulting in bankruptcy. However, if “failure” means “$500,000 in debt” and “utter failure” means “$10,000,000 in debt”, the entrepreneur does not see the full cost to opening the pizza parlor. Presumably, since he declared bankruptcy at $500,000 in debt, being bankrupt was better (and hence less costly) than a $500,000 debt and much less costly than a $10,000,000 debt. This asymmetry encourages citizens to put themselves in situations that result in massive failure by only making them pay for a fraction of the cost of that failure.

Call bankruptcy what it really is, a statute automatically written into any contract that allows an individual or corporation out it if she really, really has problems paying it.

While eliminating bankruptcy as an option may decrease demand for credit since the borrower now faces the true cost of borrowing, it also, arguably more importantly, eliminates many of the moral hazard issues that banks have to put up with right now. The lender must ask for collateral and do all sorts of background checks because it really can’t trust the borrower to present himself honestly. However, with the elimination of bankruptcy, this cost would be reduced since the borrower can be trusted much more fully to police himself. While certain moral hazard issues still exist (if the borrower is successful, the bank is only going to get paid back what it lent while the borrower can possibly receive an unlimited high return), this fixes one side of the equation. Thus, while two effects are at play, there combined effect of these is an empirical question that requires study before asserting that it would either increase or decrease the quantity of investment across the economy.

However, I’m not too concern with the small-time entrepreneur, but the stockholders of financial firms.

Incorporation laws, virtually worldwide, allow the owners of a business to hide their personal assets from bankruptcy courts when profiting from a business. Therefore, the lower bound effect of bankruptcy alluded to earlier is pushed higher. The only thing the owner has to lose is the equity in the firm. In contrast to real bankruptcy, she gets to keep her house.

The same thing holds true with shareholders of public company. If the firm they collectively own makes a risky investment, and the most they could lose is the value of their stock, they will not value the investment efficiently. The shareholders must feel the effects of the choices of the board of directors if the market is to hold them accountable for choosing managers who are too risk averse. If this philosophy were to be adopted, suddenly, stocks stop becoming an interesting hobby, one where there are real repercussions for risk. Stocks become far less fun to speculate upon when the stockholder could lose his house by holding them.

The direct economic effect bankruptcy laws have on society is a misallocation of resources in favor of stocks over investment vehicles. This is primarily of academic concern, although it ultimately has negative consequences down the line. The real problem for the economy is its upwards bias for prices across all stocks. Any such bias facilitates the complete collapse of the market, setting the stage for the already mentioned orthodox causes of bubbles to consummate. While practically and morally, giving an individual or corporation a second chance through bankruptcy may seem ostensibly to be a bad outcome to worse alternatives, policy makers must weigh the negative effects of misallocation of resources and bubble-enabling against such benefits. If bankruptcy laws should ultimately remain in place despite their costs, so be it, but the costs must enter the discussion.

I have not found any literature in libertarian (Monetarist or Austrian) economics that may provide another solution for this problem, and whether there are arguments for bankruptcy as being an innate aspect of private property. If this question has been discussed elsewhere, please direct me to it.

Realigning the Union

The Articles of Confederation and the Constitution of the United States maintain a common theme: a stringent dissolution of power. While the Articles failed due to the lack of any power afforded to the national government, the first seventy years of the Union continued the presupposition that individual states must hold complete sovereignty whenever possible. As economist-historian Thomas DiLorenzo (among others) poignantly observed, before Lincoln, the phrase “United States” was always considered a plural; the etymological implication being that the country was a collection of sovereign entities rather than a indivisible body whose states served as inconsequential appendages.

Setting aside questions of whether a return to strong federalism is desirable or feasible, at this point it wouldn’t be nearly as effective as it was in the early parts of the nineteenth century. Populations were smaller and the ethnic flavors of different segments of America were far more pronounced. In a word, the states were more homogeneous. North Carolinians were very similar in tastes and values to other North Carolinians, in the same way that the beliefs and attitudes of those living in Connecticut correlated. While there still exists a certain degree of interstate heterogeneity between, for example, blue and red states, this does not remain true nearly to the extent it was two hundred years ago.

I cite a nameless State Representative campaigning to get elected to represent a part of Long Island. She decries the parsimonious state support of Long Island schools in contrast to other the support of other geographic areas as the prime example of the state legislature being out of touch with the needs of Nassau County. While those from Long Island may feel like they’re getting the shaft, the state legislature is almost certainly acting rationally. Long Island schools have an excellent reputation while those in upstate New York can be charitably described as mediocre. Nassau County is one of the most affluent areas of the country (and by extension, the world), whereas the rural parts of the state resemble West Virginia. If we take the moderate position that A) taxes should fall more on the rich than the poor and B) the state should help prop up the worst of its schools, the inequity of state funding is an inevitable no-brainer. Nonetheless, upper-middle class suburbanites understandably feel gypped when seeing such a small return on their state tax dollars.

The answer that could solve all this is to make Long Island its own state. This is a scary idea for anyone with a firm feel of tradition, and if your goals for political organization is celebrating the lines we drew in the ground hundreds of years ago, I probably can’t change your mind. If your goal is to align political lines in such a way that people can get the most they want from their state government (whatever that may be, socialism, lack of government intrusion, whatever), state lines should approximate delineate those with similar goals and values.

To wax hypothetical, here is my approximation of how the American Northeast “should” look-

State 1: Southern Maine, Southern New Hampshire, Eastern Massachusetts, Rhode Island, Eastern Connecticut

State 2: Northern Maine, Northern New Hampshire, Vermont, Western Massachusetts, Northwest Connecticut

State 3: Eastern Queens and Brooklyn, Staten Island, Long Island

State 4: the rest of New York City, Southwest Connecticut, Southeast New York, Northern New Jersey, Northeast Pennsylvania

State 5: Upstate New York, Western Pennsylvania

Now, I’m drawing lines mostly along rural/urban population bases, but you can see what I’m getting at. More granularity or precision can be achieved by employing sociologists or others who study this type of thing. Long Islanders don’t care about the failing schools in New York because Long Islanders are in every sense different and separate from those living on the other side of the state. Those with whom they can identify are roughly those whose lives center upon Manhattan, but who don’t actually live in an urban environment, or in other words, the rest of Long Island, the residential parts of Queens and Brooklyn, and Staten Island. The vast majority of people who live in these areas are very liberal, but put their families first. They want similar things from a state, if not in an absolute way than to a much greater degree than a family living on a farm out near Rochester.

Theoretically, those attending heavily subsidized schools in the middle of rural New York may subsequently feel getting screwed out of swaths of copious Long Island money, but that really isn’t the point here. The rural Pennsylvania/New York hegemony can focus its efforts on fixing those problem schools without compromising to the legislative acolytes of suburbia. If the state cannot gather enough funding to fix the problem, to the point where it is an inexcusable social justice issue, it should be the onus of the entire country to fix the problem (if anyone’s), not the rich people who happen to live in the same arbitrary geographic zone.

The key in such realignment is that those who are paying for whatever the problem is should be those it affects, or at the very least, come into contact with it. Rural areas with poor education can concentrate their efforts on fixing schools. Those in New York City and its densely populated sprawl can focus on keeping crime low and ameliorating a school system that is screwed up for completely different reasons. Suburbanites can pool their mass quantities of excess income to create grander civic events and programs they couldn’t ever consider getting through the state legislature before. Everyone wins, with an added bonus of people possibly seeing their state government do what they want it to do.

This will never, ever happen, for one reason alone. Inertia. Obviously, there would be some transaction costs involved in radically realigning the government structure, but that’s not the real reason. The conversation would never get to the point where political scientists and their ilk would need to start arguing over cost/benefit analyses, simply because this is where we are now and we have put too much sentiment into it. Too many political careers would disappear. This is an unfortunate, since realigning the Union would probably be a free lunch.