[PEN-L:11027] Village Voice reviews Doug Henwood

[Louis N Proyect <lnp3@xxxxxxxxxxxx>]

The Money Story

by Thomas Goetz, Village Voice, July 1, 1997

If capitalism is America's national religion, the press is its pulpit.
Televangelists trumpet the Dow's ascent on the evening news and on
business channels such as CNBC and CNN. Billion-dollar wire operations
like Reuters and Bloomberg and personal finance magazines all spew the
gospel of the market. But despite the pervasiveness of high finance, or
perhaps because of it, there are agnostics who refuse to understand it.
Faced with the dominance of the market, many in the left have taken what
Doug Henwood calls "a stance of uninformed condemnation"--opposed in
theory, but little aware of how it works.

Henwood's "Wall Street" is here to rustle us out that false reverie, and
school us in the enemy's ways. While the left fretted about arts funding,
an Ayn Rand disciple and savings-and-loan-scandal apologist named Alan
Greenspan became the most powerful government banker ever. When we waved
flags for Central American rebellions, benign-sounding mortgage entities
like Fannie Mae and Freddie Mac became securities-trading monsters. Even
the insurance industry has an unexpected seamy side, thriving "on its
reputation for dullness, which keeps prying eyes away from examining its
wealth." "Wall Street" promises to pry, examine, and dissect, dullness be
damned.

Henwood is invaluable in sorting out the knotty lexicon of the business
press (the impenetrability, he points out, is intentional--the more Wall
Street can befuddle us, the less we're inclined to examine it.) He
explains, for instance, how the credit industry sustains a false national
standard of living, and why, when "interest rates are low and/for falling,
the financial markets typically sizzle."

But "Wall Street" is more than a skeptic's glossary. High finance is too
often considered a plain fact of American life--at best driving our
economy to ever greater heights, at worst a neutral entity that lets us
bankroll our lives. "Wall Street" tells us different: "The point," Henwood
writes, "is not just to embarrass official wisdom, though certainly that
is always fun, but to undermine confidence in the entire enterprise."

Money is not a neutral entity. It favors those who already have it, and
works against those who want it. "One thing the financial markets do very
well," Henwood writes, "is concentrate wealth." In explaining how, Henwood
tramples everything sacred in economics. He marauds monetarism. Unhinges
leveraged buyouts. And scuttles the leading market theorists.

These extended excursions into financial minutiae can be daunting. As
early as page 34, readers are advised that those without an interest in
complex derivatives might "skip a few pages"--an unnerving warning
considering Henwood's just getting started.

But the details are worth the rigors, and as a guide, Henwood leads us
into the maze of Wall Street with a gratifying distaste for the locals. He
regularly gloats that his methods would make any analyst or economist
scream in disgust. And only an agitator would quote from the Slits'
"Spend, Spend, Spend, Spend" (albeit in an endnote).

Henwood's brazenness leads him to attempt the impossible: to resurrect
Marx and Keynes. One can imagine how well Marx goes over on Wall Street
today. And mention Keynes to an economist and you'll get harrumphed as if
you called for the return of the welfare state. The principal economist of
the early 20th century, Keynes is now recognized for advocating a
government hand in regulating and steering markets. But as Henwood argues,
Keynes was more than that: he did not merely propound government
intervention, he offered an analysis of fiscal policy that to this day
remains unanswered by Milton Friedman's minions.

But there's a missed opportunity here: exploring such contemporary
concerns as sweatshops might have released Marx from history, and shrunk
the distance between Henwood's sometimes abstract analysis and the very
real marketplace of human capital.

The editor of Left Business Observer (and occasional Voice contributor),
Henwood has always been brilliant at the sort of unadorned insight that
makes commerce come alive. "Wall Street" is brimming with such
revelations, one after the other proving a central fact: capitalism is
dirty. Anyone who tries to skirt that fundamental is, in Henwood's term, a
naif to be trodden on as the bulls and bears make their rounds. With "Wall
Street" in hand, we'll be better at staying out from underfoot.

("Wall Street", Verso, 372 pages, $25.00 can be ordered by phone
1-800-233-4830, fax 1-800-458-6515, and web
www.panix.com/~henwood/Book_info.html.)