Peter Dorman: Give a Gift to Yourself, By Way of Naked Capitalism

By Peter Dorman, professor of economics at The Evergreen State College

I don’t have any data to back this up, but my guess is that if you’re reading this fundraising post you’re not a one-time or even occasional visitor to Naked Capitalism. You come here pretty much every day, maybe more than once to take in the afternoon Water Cooler as well as the morning roundup and the usual assortment of specialized posts. You come for information on financial and economic topics ill-covered by the usual sources and commentaries as likely to challenge your beliefs as reinforce them. You’re an addict of the good kind, addicted to reading that makes you smarter, more open-minded and more caring. You need Naked Capitalism, so giving money to support this virtuous habit should be a no-brainer. You can do it right now at the Tip Jar, and then come back to hear my take on why this makes you both a benefactor and a beneficiary.

Welcome back! Here’s my version of the how-I-found-Naked-Capitalism story.

I never liked orthodoxies of any kind. I didn’t like the anti-Communism I grew up with in the 1950s, and I didn’t like the Communism that appeared in the late stages of the New Left before it imploded in the early 70s. I didn’t like the neoclassical economics I encountered as a college student in the mid-70s, nor the various alternative doctrines that were on offer when I moved on to econ grad school. I was always on the left, in the sense that I wanted a freer, more cooperative and more equal world, but I bristled at the expectation that I would have to attach myself to one of its various churches, loyal to its language, assumptions and program. I spent decades avoiding signing on to any of them.

For me, stumbling onto Naked Capitalism in the protracted wake of the 2008 meltdown was a godsend. Here was a whole website stuffed with material day after day that was motivated by the same twin spirit of engagement and critical distance.

I don’t know the back story, but I suspect the origins of the site in the finance industry played a role. On the one hand, finance people were truly in the inner sanctum of the capitalist juggernaut and saw its systemic cruelty, stupidity and dishonesty close up. On the other, their livelihoods as analysts and traders had always depended on independent, data-tested thinking, and they weren’t about to stop now. The cannons of careful, dispassionate judgment were turned around to face the generals in the rear. That was just what I was looking for.

If you’re like me, you’re as pleased with reporting that punctures the shibboleths of the left as well as muckraking against the ruling order. If we take our values seriously, we can’t afford to tell ourselves convenient lies or cut corners with magical thinking. Power can smooth out or cover up patches of blindness and errors of judgment; those of us fighting for the victims of power do not have this luxury. Its willingness to ask difficult questions is what brings me to Naked Capitalism, day after day. So if you didn’t take up my suggestion earlier, please pause to give and give generously. Every donation helps, whether $5, $50, or $5000.

An example is the outstanding coverage NC gave to the battle between the Syriza government of Greece and the troika of the Eurozone finance ministers, the European Central Bank (ECB) and the IMF back in 2015. The mainstream media, echoing the ideological priors of the Eurozone’s apologists, portrayed it as a struggle of profligate debtors trying to wriggle out of their obligation to repay. Greece, according to this account, was in the grip of reckless populists who wanted to avoid paying for the “party” they had enjoyed during the go-go years. Yes, there would be pain in meeting the terms laid down by the Troika, but there’s a limit to how much debt can just be written off. The allowable range of opinion extended from “extend the repayment schedule by another year or two” to “pay up now!”

The left correctly rejected this view and pointed out, as Yanis Varoufakis (the rebel Greek finance minister) did repeatedly, that the Eurozone’s “bailout” was directed not at Greece but the German and French banks; official lending was used to unwind private financial sector debt. Meanwhile, the conditionality attached to rolling over Eurozone credits was transparently punitive, since the fiscal retrenchment demanded of Greece would make the debt less payable, not more. In taking this stance, the left had logic and evidence on its side, but its program was pure fantasy: defy the Troika and, if necessary, print “new drachmas” to sidestep the monetary lockdown imposed by European Central Bank. Most pundits on the left were practically baying at Greece, demanding heroic intransigence.

Alas, it wasn’t so easy. The technical problems with bolting the Eurozone were immense: not for nothing was the transition to the Euro a multi-year process, during which old and new currencies were yoked in a fixed exchange rate. There was no reason to assume that exiting would be easier.

Naked Capitalism carried multiple analyses of the technical impediments to de-euroizing, focusing on the nuts and bolts of contracts and financial IT systems. Even more daunting was the political problem. Syriza had come to power by promising the Greek people two contradictory things, a release from the dictates of the Troika along with continued membership in the Eurozone. They had no leverage whatsoever to achieve this. When the ECB applied the screws, cutting off euro supply to the Greek banking system, the political choice was stark. Even the famous referendum, in which, to the surprise of most Syriza strategists, the Greek people voted strongly to reject the Troika’s final offer, was conducted on the premise that saying no to the offer but yes to the Euro was even a choice.

Like many on the left, I wanted to believe that the path was open to a heroic refusal. It would be easy to think that this was a problem with a familiar solution, standing up to ideologues and bullies and demanding justice.

I remember how I felt after my first cold dousing of NC realism: is this really true, as this site argued again and again, that Greece is in a corner and has no satisfactory options, or is it just Yves et al. being contrarian for its own sake?

After carefully weighing the analysis in NC against what I was seeing elsewhere, however, I realized that, just as the Troika apologists were spinning a yarn to justify their exploitative policies, so also was the left to justify its own stance. Having a more virtuous set of values doesn’t mean you’re right on the facts of the case. As it happened, readers of NC were among the few who knew in advance exactly how this story would play out: every prediction turned out to be right.

This was just one episode, but it reflects a serious problem on the left: confirmation bias, groupthink and substituting a satisfying narrative for honest analysis. If you read very widely, you can probably find a piercing critique of just about any leftwing group by one of its competitors, but that requires a pretty big media diet, and you’re still left with the task of putting together the whole lattice of tradeoffs and uncertainties. Or you could read NC.

Don’t be fooled by all those cute animal photos; NC is for grownups. It presents a spectrum of views, including those in the center and on the right that possess useful insights regardless. It confronts its readers with arguments guaranteed to annoy many or most of them in order to encourage mental flexibility. It is at the very highest level in its treatment of the financial sector, as the scathing reportage on CALPERS demonstrates. And it is resolutely unsiloed, juxtaposing business and financial matters with developments in politics, culture, health, and the environment. As I said at the outset, your addiction to this site will make you a wider, deeper and more reflective thinker, be-er and activist.

That brings us to the same final point that you find in every fundraising appeal: enough people need to chip in to make it all possible, so please do your part now and visit the Tip Jar.

No site with the fecundity and sophistication of NC could operate solely on the basis of volunteer labor; for some people this has to be their day job. The trickle of ad money isn’t remotely sufficient, and you wouldn’t want to see the amount of advertising that would be. Keeping NC alive and kicking means readers have to step up, and that means you. But no matter how generously you respond—and you should be generous enough to surprise yourself a bit—you’ll come out ahead on the deal.