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Words in Crisis

Michael Lewis’s book on chicanery in subprime mortgage dealings which underpinned the financial crisis of 2008, The Big Short (2010), offers the following account of a clarifying moment for hedge fund manager Steve Eisman:

“I started to look more closely at what a subprime mortgage loan was all about,” he said. “A subprime auto loan is in some ways honest because it’s at a fixed rate. They may be charging you high fees and ripping your heart out, but at least you know it. The subprime mortgage loan was a cheat. You’re basically drawing someone in by telling them, ‘You’re going to pay off all your other loans -- your credit card debt, your auto loans -- by taking this one loan. And look at the low rate!’ But that low rate isn’t the real rate. It’s a teaser rate.”

Obsessing over Household [Finance Corporation], he attended a lunch organized by a big Wall Street firm. The guest speaker was Herb Sandler, the CEO of a giant savings and loan called Golden West Financial Corporation. “Someone asked him if he believed in the free checking model,” recalls Eisman. “And he said, ‘Turn off your tape recorders.’ Everyone turned off their tape recorders. And he explained that they avoided free checking because it was really a tax on poor people -- in the form of fines for overdrawing their checking accounts. And that banks that used it were really just banking on being able to rip off poor people even more than they could if they charged them for their checks.”

Eisman asked, “Are any regulators interested in this?”

“No,” said Sandler

“That’s when I decided the system was really, ‘Fuck the poor.’” (p.17)

There’s a useful neatness about this passage. To begin with, it has an implicit definition of the poor: i.e. those who don’t have the means of subsistence and therefore depend upon borrowing. That aspect of the financial “system” which capitalizes on this population is characterized by euphemisms (always implicitly ironic, on the cusp of withdrawing what is said or balanced on a paradox) and upbeat binary emphases in words. Several are highlighted here. “Subprime” uses the prefix sub- with a word, prime, which is normatively so high that being somewhere beneath it can’t be too bad -- it’s a bit like saying “somewhere beneath brilliant” or “the poor are short of being rich”. There’s “free checking” which is effectively more expensive than “paid checking” for those who depend on borrowing. For them especially, given that nothing is less free than borrowing, a “low” interest rate is immediately more appealing than a “high” one, though that “low” rate is only temporary – or is a “teaser” (even that sounds charmingly playful). And, of course, “one” loan sounds better than “many” loans, and – possibly the oldest verbal trick in the financial book – a “loan” (even if at escalating rate) sounds more manageable, almost altruistic, compared to a “fee” (along with a fixed rate), which seems punitive, especially if on top of interest anyway.   

One may observe here that this aspect of the system is penetrated by the opposed aspect of the system, which capitalizes on the population of the rich: i.e. those whose means exceed their desire for luxuries and who are therefore in a position to invest with minimum restraint. The kind of hedge fund that Eisman manages is generally for the rich, to maximise their untrammelled investments. What Eisman does for the rich (becoming rich himself in the process) is characterized by dysphemistic and low-key words: in this case, particularly “hedging”, which sounds cautiously botanical and akin to trying to control some unwanted excrescence, which leads immediately to another, “risk”, which sounds dangerous. Actually, Eisman/Lewis doesn’t really say anything specifically about the rich, though it is implicit in the kind of financial agency that is given voice here. On the implied other side of the poor in financial terms, as far as this passage goes, are not only the rich but also a significant multitude: the neither-poor-nor-rich, those who don’t depend on borrowing for subsistence and are not in a position to make investments of scale -- whose investments are restrained and often put together by intermediaries to be scaled up in the capital circuit. Eisman/Lewis doesn’t say very much about the latter either.

To be honest, by inserting the distinctions between the rich and the neither-poor-nor-rich there I have already complicated the point that Eisman/Lewis seem to be making here: that “the system was really, ‘Fuck the poor’.” To a not insignificant extent, this complexity is being simplified by Eisman/Lewis here: it is possible that quite a lot of people apart from the poor are also, so to speak, fucked in the process, and that some, the rich, are almost immune to getting fucked – though it isn’t necessarily clear that they are doing the fucking. Apparently, a more disembodied set of mechanisms is doing that: “the system”. But it is not to unpick the complexities of the financial system that I have made the distinction. I have done so to accentuate something that’s obviously gestured towards here: the misdirection of terminology, the manner in which words are used to lure and deceive as a constitutive element in the system. It is to note that the cogs of this financial system are greased by linguistic practices: by, among other things, the labelling of financial packages and of financial practices; by what words suggest rather than what is or is not stated. The political economy of the financial system is borne on the political economy of language.

In the latter fuck appears with a sort of oppositional verve, as if fracturing the suggestive vocabulary of misdirections and subterfuges by its no-nonsense directness. That flat statement – the system is really about “fucking the poor” – seems to cut through appearances with the pithiness and directness of a revelation. It may impact with a kind of rhetorical double-force. One may say, rhetorically, in this ham-handed fuck register: being poor is pretty fucked-up anyway, so fucking the poor is really a gang rape. And, at one level of this register, the statement as such seems to make immediate sense.

But the protean quality of fuck, its multiple nuances, kick in there, and arguably the forceful directness of the statement courts misdirection too if not diffusion. Fuck is possibly the only word which has whole dictionaries devoted to unpacking its nuances – notably, Jesse Sheidlower’s The F-Word, first published in 1995, expanded in 1999 and again in 2009. For a few notes on the word, see here.  If that statement has the air of a political slogan about it, it also has something of the plethora of fuck in it -- a confrontation of small thinking and big pictures, defeatism and defiance, rolled around the word. Fuck could suggest direct exploitation (financial operatives targeting the poor) or, at a slipping point, indifference (the regulators’ lack of interest). That “the system” fucks the poor makes a singularity of the poor as the nub of the system; it is the indifference of the system that fucks the poor or the system is designed to fuck the poor – in any case, the system is rendered starkly visible only with regard to the poor. There’s a moral thrust in singularizing the poor as the nub of the system thus: there’s a clear victim of the aggressive/violent nuance of getting fucked – the poor. That is, unless, of course, someone argues (and there’s no dearth of such arguments) that the poor are responsible for their own poverty, they fucked-up (messed up) themselves first and are therefore complicit in their getting further fucked (exploited). Otherwise, of course, the system doesn’t just fuck (exploit) the poor but fucks-up (messes up) some people’s lives by pushing them into poverty and then further fucks (exploits) them for being poor. Nevertheless, singularizing the poor as victim (fucked) of a pervasive system, puts moral recrimination somewhere – but where? Who are the fuckers? That, incidentally, is more a term of dismissive diminution or even, sometimes, endearment rather than denoting the aggressor (no one calls a rapist a fucker) – maybe it could apply to the poor themselves, they are poor fuckers (harmless idiots, vulnerable, gullible). At any rate, it seems okay to say: the system fucks the poor because the system is fucked-up, not because the system is the fucker: it is easy to identify the victim, not so easy to put a finger on culprits. So the moral force of the statement dissolves itself: all who are not-poor should do something about this, because to be not-poor means that the system has not fucked them over (say, into poverty – really misused them) and thus has kept them from being fucked further (as the poor – the exploited) by the system: in some odd way, they the not-poor are by default the beneficiaries of the system that fucks the poor. That is, unless someone argues (and this is not unusual) that the system fucks almost everyone except those who are, for instance, rich or are getting rich (who are, nevertheless, not doing the fucking, that’s the system) – which disturbs the moral force of focalizing the poor as particularly fucked now and already fucked-up and always fuckers, the especial victims.

Suman Gupta, June 2015