Spring Break means that there’s more free time than usual to go to the cinema. Unfortunately, nothing at my local theatre really strikes my interest (The Grand Budapest Hotel is still not here, and it’s driving me crazy).
Rather than go out, I decided to put on a little mini film festival at home. This week’s theme is “origins stories” – The Godfather: Part II; RoboCop (the 1987 original); Batman Begins; Alien; The Bourne Identity; and Star Trek (2009).
All of this got me thinking about an origins story that’s a bit closer to home, and one that hasn’t yet made it to the big screen.
Imagine that you’ve been put in charge of producing a two-hour film on the history of the American law school. You have a $100 million budget. Who would you hire to direct? What characters, stories, and events would you build your narrative around? And, most importantly, who should play the role of Christopher Columbus Langdell?
(Maybe another question should be whether anyone will pay to watch, but I’m too optimistic to worry about that).
If you'll excuse two barely business-related observations:
- The Son, by Philipp Meyer, might do as a novel about business - it's about 170ish years of a Texas family, with a basic theme that getting frontier-rich required fraud and evil-doing. But it's not an anti-business book at all. Recommended, if you like your epics dark.
- When I was a sprightly young lawyer in Washington in the late nineties, I got the Washington Post and New York Times delivered to my door every morning ... and I read the Post first, because it was more fun than the Times. I knew Post reporters, too, young, interesting, and not at all embarrassed that they weren't lawyers (we hadn't really heard of finance back then in DC). It is amazing how much that paper changed, and changed for the worse - and yet it's still the best single source on how business regulation gets done. I'm hoping it has a rennaisance with new ownership.
After spending a great few days in Boston, I decided to broaden my reading list. (Law & Society seems to attract about 10x the number of hipsters as AALS). A few samples:
He loves to take the punch bowl away: Ben Bernanke questions meritocracy (among other things), at, of all places, Princeton's commencement.
Too close to home: Does Colorado have a republican form of government? Or did a anti-tax amendment to the state constitution deprive us of one?
Stride la vampa!
BYU's Center for Animation is amazing. My daughter and son-in-law are both animation majors, and Murphy was the rendering supervisor on BYU's latest award-winning short, called "DreamGiver." You can watch it here.
So I admit, I was a little skeptical about the staying power of Occupy, Athens, GA. It hasn't been quite 2 months since I first blogged about our local chapter, but they are still going strong. I see about 5 tents on my way to work each day. I spoke with two quite genial occupiers, who said first of all "We're a very diverse group." Indeed, one was a self-described "capitalist war vet smoking a cigar." But he thought corporations should "get out of government." His friend, however, was "against capitalism"--although at first he said he wasn't. Obviously a lot of camaraderie and tolerance going on.
An article in today's Life section of USA Today titled Movies tap into anger at Wall Street describes how 3 movies in current release mirror public angst over economic inequalities and inequities: Tower Heist, In Time, and the already mentioned in 2 Glom blogs, Margin Call.
This autumn's documentary Chasing Madoff recounts Harry Markopolos’ multi-year crusade to expose the multi-billion dollar Ponzi scheme perpetrated by Bernie Madoff. Alleged victims of this massive fraud include the celebrity couple of Kyra Sedgwick (star of The Closer on TNT) and Kevin Bacon (of the original Footloose (1984) fame). The Dodd-Frank Wall Street Reform and Consumer Protection Act included a broad set of whistleblower provisions under which the Securities and Exchange Commission adopted specific rules and procedures to incentivize potential whistleblowers by way of cash rewards and protection from retaliation.
There is also a 2009 documentary about the subprime mortgage fiasco, which is now available on DVD, American Casino. 2001 economics Nobel laureate Joseph Stigltiz described it as being "a powerful and shocking look at the subprime lending scandal. If you want to understand how the US financial system failed and how mortgage companies ripped off the poor, see this film."
This May, the HBO Films production of Too Big to Fail, based on the book of the same name with the subtitle of The Inside Story of How Wall Street and Washington Fought to Save the Financial System--and Themselves depicted the autumn 2008 U.S. financial crisis and the sequence of (less than intertemporally consistent) policy responses by the Treasury department, the Federal Reserve, and other financial regulators.
Last autumn's Inside Job made a compelling argument in five parts about how the American financial services industry systematically and systemically corrupted the United States government and in so doing brought about changes in banking practices and legal policies that led directly to the Great Recession.
Although the documentary Client 9: The Rise and Fall of Eliot Spitzer focused primarily on the interaction of ego, hubris, power, scandal, sex, and politics, it also touched upon Wall Street and efforts by Spitzer to reform its excesses.
Of course, no list of movies related to the recent financial crises would be complete without including documentary film-maker Michael Moore's 2009, Capitalism: A Love Story, which criticizes the current American economic system in particular and capitalism in general. At one point, it asks if capitalism is a sin and whether Jesus would be a capitalist, who wanted to maximize profits, deregulate banking, and have the sick pay out of pocket for pre-existing conditions via clips from Jesus of Nazareth. Moore asks if one could patent the sun and questions how the brightest American youth are drawn towards finance and not science. He proceeds to Wall Street asking for non-technical explanations of derivative securities in general and credit default swaps in particular. Both a former vice-president of Lehman Brothers and current Harvard University economics professor Kenneth Rogoff fail to clearly explain either term. Moore thus concludes that our complex economic system and its arcane terminology exist simply to confuse people and that Wall Street effectively has a crazy casino mentality.
Finally, the PBS Nova episode, Mind Over Money, which originally aired on April 26, 2010 asks whether markets can possibly be rational when people clearly are not. In other words, is there a version of the efficient markets hypothesis that can be true in a world populated by at least some boundedly rational actors? In posing this question, the show offers an entertaining, yet quite informative survey of elements of behavioral economics and finance. Its companion website provides additional resource materials concerning the role of emotions in financial decision-making. The debate which it depicts between the University of Chicago school of economics and the behavioral economics approach (including scenes of Dick Thaler playing pool) is a bit overdone and perhaps unintentionally comical, but it raises the question of whether it matters for law and policy how people make their financial judgments and decisions? Of course, the natural follow-ups of if so, then how and if not, then why not, are questions about which business law professors, Glom readers, and policy makers are likely to have perhaps quite strong and certainly divergent opinions.
A television program that has become quite popular is the USA network's original dramatic series White Collar, which is based upon the premise of an F.B.I. agent solving white collar crimes with the assistance of consultant who is a former (and current?) art thief and con man extraordinaire. Episodes have featured a black widow, baby selling, bank robbery, black market kidneys, bond theft, collusion, corporate espionage, derivatives, financial fraud by a Wall Street brokerage firm, identity theft, and political corruption.
It is reminiscent of the 1960's campy, classic, and tongue-in-cheek television series, It Takes A Thief.
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I recently saw the movie, Margin Call, which is currently playing in theaters and is available on demand at Comcast. There are curretly 34 reviews of it by viewers at imdb, where it has a rating of 7.3 out of 10.
I also just finished reading this paper, Fear, Greed, and Financial Crisis: A Cognitive Neuroscience Perspective, prepared for a forthcoming handbook on systemic risk. This chapter is by finance professor Andrew Lo, who is the director of the MIT laboratory for financal engineering. He also wrote another excellent paper which Glom readers are likely to find of interest, namely Reading About the Financial Crisis: A 21-Book Review, that was prepared for the Journal of Economic Literature.
In the interests of full disclosure, I taught at Temple law school a seminar titled Law, Emotions, and Neuroscience and co-taught at Yale law school with professor Dan Kahan a seminar titled Neuroscience and the Law. The seminars covered some basic materials about affective,cognitive, and social neuroscience before analyzing the potential and limits of applications to business law, conflict resolution, criminal law, ethics, evidence, morality, paternalism, and social policy. Media coverage of neuroscience and law has a tendency to focus almost exclusively on such controversial issues as free will and responsibility in the criminal law context. Glom readers are more likely to focus on neuroeconomics and neurofinance, two nascent fields that ask how human brains engage in JDM (Judgment and Decision Making) in general and over time and under risk in particular.
Also, as cognitive neuroscientist Michael Gazzaniga recently stated: responsibility, like generosity, love, pettiness, and suspiciousness, is a strongly emergent property, which although being derived from biological mechanisms, has fundamentally distinct properties, just like the case of ice and water. The press and the public also seem to be fascinated with very colorful fMRI brain scans because they like the idea of being as the Wall Street Journal science writer, Sharon Begley, calls them: cognitive papparazi.
My system 1 believes in synchronicity, so this post, as evidenced by its title's homage to Lo's chapter, approaches the movie Margin Call from a cognitive neuroscience perspective informed by Lo's chapter. Lo provides a brief history of what we know about brains. He then explains how fear and the amygdala can exacerbate financial crises. He also demonstrates how the reward of money appears to share the same neural system and the release of the neuortransmitter dopamine into the nucleus accumbens as these rewards do: beauty, cocaine, food, music, love, and sex.
Lo proceeds to discuss a neurophysiological explanation for Kahneman and Tversky's experiment demonstrating people's aversion to sure loss. Lo proposes a neuroscientifically informed view of rationality that differs very much from an economic rational expectations conception, with the key difference being the role that emotion plays in JDM. Lo extends his analysis from individuals to groups by explaining the neurophysiology of mirror neurons, theories of mind, social interactions, and the efficient markets hypothesis. He concludes his neuroscience survey by describing the marvels and limits of the human prefrontal cortex, also known as the "executive brain." Of particular interest to Glom readers is decision fatigue, documented recently among judges rendering favorable parole decisions around 65% of the time at the start of and close to 0% by the end of each of 3 daily sessions that were separated by 2 food breaks (a late morning snack and lunch). This empirical finding that parole rates increased after food breaks is consistent with recent experimental research finding that glucose can reverse decision fatigue and the common adage to not make important decisions when tired.
Lo provides several practical and reasonable suggesions based upon cognitive neurosciences about how policymakers can engage in financial reform to deal with systemic risk. He concludes by advocating that financial economists utilize the great recession to re-conceptualize, rethink, and revamp neoclassical economics by forging a consilience between the neurosciences and financial economic theory. Building a deeper and better understanding of economic phenomena through improved economic models and intellectual frameworks can and should lead to a more appropriate financial regulatory infrastructure.
And now onto a few comments about the movie Margin Call. Without giving away the plot for those who may want to see it without any knowledge of its ending, this movie raises ethical and moral questions about individual versus social optimality, trading on the basis of private information, panic selling, professional codes or norms of behavior, and the costs a company may impose on society and pay to others to survive. There is certainly lots of fear and greed on display in this film. Set over the course of a day and sleepless night in NYC, the movie viscerally illustrates various forms of JDM and how individuals and groups of individuals can persevere under stress and time pressures. It is a movie that can and should provoke discussion about what could have been done differently by individuals, financial firms, and regulators. It is a film that I'm going to put on the list of movies at the start of the chapter about business law in the text, Law and Popular Culture: Text, Notes, and Questions (LexisNexis Matthew Bender, 2007) by David Ray Papke, Melissa Cole Essig, Christine Alice Corcos, Lenora P. Ledwon, Diane H. Mazur, Carrie Menkel-Meadow, Philip N. Meyer, Binny Miller, and myself that we are revising for a second edition.
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Isn't this just a weird idea? Not only was the Enron debacle a personal tragedy for a lot of the people involved, it was pretty bad for investors and employees as well. Somehow that just doesn't seem to me like excellent material for musical comedy. However, audiences loved it in London where it was launched but critical reaction here has been mixed, (see this Broadway round-up), although one of the most important critics, Ben Brantley at The New York Times, didn't seem to care for it.
His review had this to say: "In Lucy Prebble’s 'Enron,' the flashy but labored economics lesson that opened on Tuesday night at the Broadhurst Theater, money doesn’t just talk. It sings. It dances. It puts on funny animal costumes. And of course it blows bubbles." But ultimately he seemed to feel it was "all show (or show and tell) and little substance." Read the rest here and see a teeny, eetnsy clip from the show with a voice over from the director here and judge for yourself how gripping this looks. To me not so much.
However, I was just in New York City and resolved, since I was blogging for The Conglomerate, to try to see the show and report back. Alas! The per person ticket price I was quoted, $176 (after broker's fees - how ironic is that?) caused me to balk. I wasn't that convinced it would be good in the first place, but I drew the line at plunking down that sort of change just so I could say I'd seen it and report back. But I would love to know if anyone has seen it and what you thought about it
And then there is this even stranger postscript. It turns out that Enron employees made tons of spoof skits themselves (remember the "mark to market" accounting skit from "Enron: The Smartest Guys in the Room"?) that eerily prefigured the real musical. Read this I think I'd rather watch those clips than the musical currently on Broadway.
Was it just me, or did others find what was essentially a feature-length, product placement for American Airlines and Hilton Honors a little less than thrilling? Don't get me wrong, George Clooney is always great. And full disclosure, I'm an Advantage member and a Hilton Honors member and like racking up points with the best of them. But I really am not so thrilled about forking out $8.50 for a sales pitch, and a slightly snarky one at that.
Critics seem to love the movie though. Anthony Lane for one over at the New Yorker had this to say. Director Jason Reitman got lots of praise for using real people who had actually been laid off in the opening vignettes. And he says he made this films because it was about "connections" and important things in life. See this. But the way he films the so-called important things (Bingham's sister's microscopic diamond ring, the cheesy looking hotel in which the wedding takes place, his sister's underwhelming betrothed, Bingham's own home in Omaha, etc. ) makes all those things suffer in comparison to the pristine framing of the shots involving the sponsors and ultimately appears to convey a rather different message; that only chumps believe in love or family. (Lane calls it "hokeyness" for a reason; Reitman made it look hokey.)
This is especially true when you consider how all the relationships turn out. Not well. (And the movie broadly hints that things don't look so good for his sister either.) You might conclude from the film that giving up anything for a relationship is for chumps; except that Bingham's job illustrates that maybe giving up relationships for jobs isn't such a great idea either. I won't spoil it for you if you want to watch the movie; but don't say you weren't warned.
Seen in this light, his use of people who had really been laid off makes it look a little like Reitman is trading on their pain and authenticity while sniggering behind their backs at how foolish they were to have invested so much of themselves into their jobs.That is certainly Bingham's attitude in the film. He admits his severance speech is mostly intended to ease people out of the room calmly.
Reitman may be sincere in his desire to convey a message about the importance of human connections over material things, but if so, I think his message got hijacked by his sponsors. Advertising Age reported that American Airlines and Hilton didn't actually have a traditional product placement deal with Reitman. It had something even better. It provided access in exchange for some control of the portrayal. How Up in the Air Got a Free Ride It was a good deal for Reitman because the use of the planes and properties otherwise would have cost a lot of money. And it was a great deal for American Airlines and Hilton because this kind of advertising you just can't buy. But does it make for good films?
I don't know. It is gotten to the point that whenever I see a brand name in a movie I wonder hope much they paid for that exposure. So far, I have never been wrong when I thought that there was a deal in the background. Next I want to know if BMW paid for a product placement in Roman Polanski's "The Ghostwriter." Hmmm.
NOTE: This was supposed to post on the 28th but I somehow failed
to set it up properly to do so and so I am re-posting it today. Sorry for the duplication.
I'm hereby outing myself: I am a sucker for the high-school movie genre. 10 Things I Hate About You? Mean Girls? Never Been Kissed? Yes, yes, yes. I even watched High School Musical, although I detest musicals on principle (I'm sorry, people don't just randomly break out into song. It's not normal).
Of course it's John Hughes' influence on my formative years that explains my weakness. Ferris Bueller's Day Off has only one of the 3 unities, but it's a classic. Here's a nice tribute from Roger Ebert, and this is a sweet story, even if I can't quite believe it's true. And here's an EW retrospective.
Update: Movie guru Larry Ribstein of course has some observations. But Home Alone as Hughes' only great movie? Maybe if you didn't grow up in the 80s...
Thanks to the Glom for inviting me back! As Gordon indicated, I’ve got quite a bit going on this summer, and I’m hoping it will prove fruitful blogging fodder.
First off, yes, I’m teaching Law, Literature, and Business. The backstory: my generous associate dean, Paul Kurtz, okayed a course with this title even though he knew that I knew that I had no idea what I was going to teach in it. Every third year, we at Georgia teach a 2-credit “floater course” on a subject that flows from our research. This topic has been on my mind for a while. I hope the course will work as kind of pre-reading, to get me up to speed to be able to write an article next summer.
As I started reading (ok, skimming) my way through law and lit articles and books, I realized that the subject could be broken into at least 2 strands, one focusing on content—trials and lawyers in literature (i.e., To Kill a Mockingbird)—and one on applications of literary theory. I’ll focus on the content side in this post.
The content approach is problematic for the transactionally-minded. I just haven’t found many deal lawyers or transactions depicted in literature. The dazzling exception that proves the rule? Herman Melville’s Bartleby, the Scrivener. Subtitled A Tale of Wall Street, it is close to ideal: short, beautifully written, wry, and weird. The narrator is a transactional lawyer, and although the tasks of scriveners are obsolete, I suspect that for many a corporate associate the drudgery of Bartleby’s life, and the narrator’s choice never to “address a jury or in any way draw down public applause”, but instead “do a snug business among rich men’s bonds, and mortgages, and title deeds,” may resonate.
At the suggestion of colleague Paul Heald, I read Richard Power’s novel Gain, which traces the history of a soap making empire from family business through public company conglomerate, interspersed with a very personal narrative of a woman’s struggle with cancer that may have been caused by chemicals from the self-same soap company. It’s not as anti-corporate America as that juxtaposition suggests, and it nicely captures the drama and desperation of business-building. It's on the list.
But novels tend to be long, and I want to cover several depictions of business in literature. So I decided to assign at least 2 movies. One seems to have to be Oliver Stone’s Wall Street. The other? I’m currently thinking about the Insider (which I haven’t seen yet), or Glengarry Glen Ross.
Am I wrong about the dearth of transactions and business lawyers in novels? Are there movies I’m missing? Please tell me.
Unless, of course, you’d prefer not to.
Last fall, I received an invitation to teach a class in Barcelona this summer. In a fit of madness, I declined. Here is a photo of Barcelona that I found on Flickr, using Seth Godin's tips on searching for the "Most Interesting" HDR images.
I'm embarrassed to admit that I lived in the Philly area for six years before I finally visited the The Barnes Foundation. As the official website says, the Barnes Foundation holds one of the world's finest private collections of Impressionist, Post-Impressionist and early-Modernist paintings. There are literally dozens of masterpieces by Renoir, Cezanne, Matisse, and Picasso. The paintings, by themselves, are amazing, but equally intriguing is the unique way in which the paintings are displayed. You probably won't see anything like this in any other museum:
Kind of wild, right? These "ensembles" were created by Dr. Barnes as an educational technique.
More recently, the Barnes foundation has gotten fair amount of press because it looks like the collection will be moving from Merion, PA (a suburb of Philadelphia) into Philadelphia itself. This decision is controversial because it contradicts the express terms of Dr. Barnes's trust, which states that the collection must remain in its original gallery in Merion. The Barnes Foundation trustees were able to break the trust, citing financial necessity.
You trust lawyers out there will probably find the details of the case interesting, and you can read about some of them in this article from the New York Times. As you'll see, the story is even more interesting because apparently there's lots of juicy local, Philly, and state politics going on.
Right now, it looks as if the Barnes collection will be moving into their new digs sometime in 2009, so if you happen to be in the Philadelphia area any time soon, you might want to make a point to visit the Barnes in its original location.
It's Friday, so I hope you'll forgive a light digression. After Gordon's favorable review of yesterday's "Conchords" clip, perhaps readers will endure just one more to help raise the profile of antipodean comedy:
All this contemplation of the far down under forces me to confess something of an enduring respect for the hardy New Zealanders. Not only did the Europeans who settled there travel to the farthest ends of the earth to do so, they went voluntarily, not at the end of a criminal's shackle. These Kiwi forbears happened across the Australian continent en route, evidently deemed it too crowded or cosmopolitan, and kept going a few hundred more miles. And now the four million of them comprise the world's greatest sailors and rugby players.
In this year's America's Cup, both the teams competing in the final were captained and manned by New Zealanders. (The "Swiss" winner, Alinghi, who defeated Team New Zealand, are in fact predominantly mercenary veterans of Team New Zealand.)
In world rugby, no team inspires more fear than the All Blacks, who start each game with the haka, this Maori war chant (here reciprocated by their fellow Polynesian overachievers, Tonga):
For some specific flavor, here's a highlight of Jonah Lomu, a 6'5", 250-pound menace who runs the 100 in 10.89 seconds:
And for the people who invented bungee jumping, apparently the effete diversions of whitewater rafting can't compete with their version of aquatic lunacy: blackwater rafting. Strap on a spelunking helmet, form up a chain of chums atop inner tubes, and launch yourself hurtling through underground rapids.
Finally, we discover that, in addition to all this athleticism, they're also big into epic cinema (featuring small Hobbits) and musical comedy. Oh, how the gods shine upon the Land of the Long White Cloud!
when Elvis died? On August 16, 1977, I was in the car with my mom. She must have just changed the channel because we heard the DJ saying something like, "and after the break, more on Elvis' death." Being the conciliator that I am, I suggested that the DJ had said "deaf." Maybe Elvis had merely gone deaf, like Beethoven. My mom cried. Did your mom cry?