"Margin Call" and the Financial Crisis

I modestly recommend Margin Call, a new film that dramatizes the 2008 financial crisis.  It features a number of fine actors who give excellent performances, including Kevin Spacey, Jeremy Irons (in the best roles for both in a while), as well as Zachary Quinto (Spock in the Star Trek reboot).  The movie is a bit slow, but is still clearly superior to Oliver Stone’s Wall Street: Money Never Sleeps (2010) in its depiction of the meltdown

The film is about an investment bank that is clearly an allegory for Lehman Brothers.  Early in the movie, Quinto’s character discovers that the mortgage-backed securities that the firm has based their business model around have brought the company to the verge of bankruptcy.  Reflecting the round-the-clock machinations that surrounded the sale of Bear Stearns, the bankruptcy of Lehman, and more recently, the demise of John Corzine’s MF Global, the film then follows the characters over the next 24 hours as they try to save the firm.

Margin Call reflects a number of the issues which surrounded the financial crisis.  A number of commentators have observed that the extraordinary compensation which emerged on Wall Street distorted the American economy by draining talent from other sectors.  Indeed, Quinto’s character turns out to be an MIT-educated physicist who went to work on Wall Street because of the higher pay. Another character was once an engineer.  Some have also observed that it was these types of people, with their mathematical and technical acumen, who conceived of the complex financial instruments which helped precipitate the crisis.

The film also discusses the extravagant lifestyles enjoyed by Wall Street traders.  Various characters seem to have extended themselves financially despite their immense wealth (or perhaps because of it).  Spacey plays a burned-out trader who wants to get out of the business, but decides to stay at the end of the film because he still needs the money after a lifetime working in the industry.

Irons, who plays the unnamed firm’s CEO, tries to rationalize the disaster at the end of the film, telling Spacey that the crisis was unavoidable because it is just another in a series of bubbles that have occurred throughout the history of capitalism.  This seems to be an echo of the explanations, or one might argue, rationalizations, provided by the heads of major investment banks since 2008. In their minds, new regulations like Dodd-Frank are unnecessary because the debacle of the last few years was not due to their irresponsible and unethical behavior, but due to forces beyond their control.

                                 

Joe Frazier's Death and the Decline of Boxing

Joe Frazier’s death and the ensuing recollections of his three battles with Muhammad Ali remind us how far boxing has fallen in American culture.  One of the three most popular sports during the first half of the 20^th century, along with baseball and horse racing, it now barely gets a mention on SportsCenter.  While baseball may no longer be the national pastime, boxing is simply irrelevant.

In the late 19^th and nearly 20^th century, boxing was primarily a working-class sport, fought largely by immigrants in major cities.  By the 1920s, with the decline of Victorian values and changing social mores, boxing became more respectable and popular among middle-class Americans.  Furthermore, the emergence of radio allowed Jack Dempsey, the heavyweight champion of the era, to become a national figure, like Babe Ruth and other sports heroes of the time.

Boxing differed from baseball in that it was somewhat integrated.  Malcolm X once noted that the boxing ring was the one place a black man could beat up a white man without getting killed.  Jack Johnson became the first African American heavyweight champion in 1908 but the racism of the time eventually resulted in his criminal prosecution over his relationships with white women.  It would be another generation before a very different black fighter, Joe Louis, got a chance to fight for the crown.  His defeat of the German champion Max Schmeling in a title defense in 1938, at a time of tremendous tension between the U.S. and the Nazi regime, was one of the biggest sport events of the 20^th century.  This triumph, as well as his humble manner, endeared the “Brown Bomber” to blacks and whites alike, making him the first crossover sports star.

The sweet science, as some called it, remained popular into the postwar period.  Champions like Rocky Marciano and Sugar Ray Robinson were among the most prominent athletes.  And it was not just the championship battles that were important.  Boxing remained a spectator sport at the local level as well; I once showed an episode of I Love Lucy in class where Fred and Ricky go on a boy’s night out to the fights, the way one might go to a basketball game today.

Though some date the beginning of the sport’s decline to the 1960s and 1970s, the heavyweight champion of the world was still one of the best-known people in the nation, if not the world.  Ali, Frazier, and George Foreman fought each other in battles that have still-legendary names like the “Rumble in the Jungle” and the “Thrilla in Manila.”  The “Rocky” film franchise began in 1976, helping to maintain the sport’s popularity.

Even with the charismatic and controversial Ali no longer on the scene, boxing still had some prominence in the 1980s.  Sugar Ray Leonard, Marvin Hagler, and Thomas Hearns, fought major fights in the welterweight and middleweight divisions that garnered national attention.  Sportswriters cared enough to label heavyweight champion Larry Holmes an unworthy successor to Ali and to laud Mike Tyson when he unified the division in the late 1980s.

Over the last two decades, boxing fell of the cliff for a number of reasons.  After Tyson went to prison, no fighter emerged who engaged casual fans.  The Olympic Games had launched the careers of a number of boxers, including Ali, Frazier, and Leonard, but network coverage of boxing declined as NBC pursued the female demographic. 

Finally, there is no doubt that public revulsion at the corruption and physical costs of boxing caught up with the sport.  Reminisces of Frazier all recall that neither he nor Ali were the same after their third fight.  Indeed, there is nothing sadder than the sight of the once-loquacious Ali, now silenced by Parkinson’s disease.  Many other boxers have had long-term health problems; a few have even died in the ring.

Today, when I teach about Louis or Ali in class, I have to remind them that the heavyweight champ was once a very important person.  I ask them who the current champion is and there is usually a deafening silence.  And not just from the students.  The professor doesn’t know either.

How Football Continues to Dominate America

In a previous post, I discussed how pro football has come to dominate American sports and supplant baseball as the national pastime.  Ironically, the compelling seven-game World Series between the St. Louis Cardinals and Texas Rangers only made this clearer.

On the one hand, this year’s World Series garnered television ratings 19 percent higher than last year’s five-game set between the Rangers and San Francisco Giants.  While a seven game series should get a higher rating than a five game series, any time the ratings increase for a sporting event these days it must considered a success, given the continuing growth of other entertainment options.

A closer examination of the data, though, shows the relative strength of football.  Though World Series  games 3 and 4 beat Sunday and Monday Night football one-on-one in viewership, this past week’s Sunday night game between the Cowboys and the Eagles got a higher rating than Game 6, a dramatic affair that will go down as one of the greatest World Series’ games ever.   While Game 7 of the World Series got higher viewership overall than Cowboys-Eagles, it performed lower among the 18-49 demographic coveted by advertisers.  Unbelievably, more young people watched a regular season football game than the first Game 7 of a World Series since 2002.

Indeed, the World Series lagged the NBA Finals for the second straight year, providing a cautionary note regarding the potential costs of the current basketball lockout.  The tremendous interest generated by LeBron James’ move to the Miami Heat, culminating in their loss to the Dallas Mavericks in 2011, boosted the sport’s fan base.  Those gains could be squandered if significant portions of the 2011-2012 season are lost.

It will be interesting how the ratings for this weekend’s college football  “Game of the Century” between LSU and Alabama measure up against the World Series.

20th Anniversary Albums and the Changing Nature of the Music Industry

The 20^th anniversary re-releases of Nirvana’s Nevermind and U2’s Achtung Baby, along with the breakup of R.E.M., made me think about the changing nature of the music industry. One of the major trends of the last 30 years has been the relative decline of mass culture and the concomitant rise of niche culture.  For example, as recently as the mid-1980s, the three broadcast networks still dominated the ratings and there were only 2-3 blockbuster movies per summer.  Nowhere has this change been more dramatic than in the music business.

After rock n’ roll emerged in the mid-1950s, singles were the dominant way people bought music.  By the late 1960s, following the success of works like the Beatles’ landmark Sgt. Peppers’ Lonely Hearts Club Band in 1967, albums became the dominant medium.  Indeed, album sales outpaced singles for the first time in 1968.

The dominance of albums continued into the 70s and 80s.  Indeed, in some ways, the 1980s were the peak of the mass culture era in pop music.  Artists released albums, singles from these albums were released on FM radio, and videos of the singles went into mass rotation on MTV (yes, it’s true, they did once show videos on MTV).  As a result, albums like Michael Jackson’s Thriller (1982), Bruce Springsteen’s Born in the USA (1984), and U2’s Joshua Tree (1987) reached an extraordinary audience.  Due to the combination of radio and MTV, some songs got massively overexposed.  To this day, I change the station when one of the hits off of Joshua Tree comes on the radio; I got tired of those songs in the year they came out.  Of course, regional, racial, and ethnic differences in tastes remained, but these 1980s stars reached a far wider audience than artists today.  Nevermind and Achtung Baby and R.E.M’s most commercially successful albums, Out of Time (1991) and Automatic for the People (1992), were released at the peak of this period. 

 In the early 1990s, MTV pioneered reality TV with the Real World and these shows gradually became more lucrative for the network.  As a result, they eventually supplanted videos as that market diminished by the early 21^st century.  With the emergence of the Internet, downloading became the way most people experienced music, as ITunes put record stores out of business across the country.  The ease of buying individual songs on ITunes reduced the centrality of albums and FM radio does not have the audience among young people it had a generation ago.  Consequently, the music industry is much more decentralized and it is harder for an artist to gain traction outside a certain niche. 

This is perhaps most exemplified by the two iterations of the charity anthem, “We Are the World,” written by Michael Jackson and Lionel Richie.  The first, recorded in 1985 to support famine relief in Africa, featured a who’s who of the Rock n’ Roll Hall of Fame, including Jackson, Bruce Springsteen, Paul Simon, Bob Dylan, Tina Turner, Steve Wonder, among many others. By contrast, I barely recognized the younger artists in the 25^th anniversary edition, made to back relief efforts in Haiti after the earthquake in 2010.  I first thought this meant that I was getting old and out of touch, until Saturday Night Live satirized the lack of star power in the new version shortly thereafter.

Due to these trends, it is unlikely there will be 20^th anniversary issues of albums from 2011 in 2031. I will have more to say about the decline of mass culture in television and film in future posts.