Editor's Choice

Bad bailout

Since returning from vacation, I've read little other than posts about the banking industry's continued implosion and the various bailouts meant to rescue it. The most recent issue is Treasury secretary Hank Paulson's plan to spend unlimited billions without any oversight buying up banks' bad assets in a contemporary version of the Resolution Trust Company, which was deployed during the 1980s savings-and-loan bailout. Paulson's idea seems to be to stop the financial crisis by fixing banks' balance sheets once and for all, through the magic process of letting banks replace failing, ill-considered, or impossible-to-price items on it with what the banks want them to be worth in government (aka taxpayer) cash. With the toxic assets -- strange how toxic has moved from a business journalism cliche to a virtual term of art -- cleansed from the system, banks can resume borrowing short and lending long again as their business model demands. As Mark Thoma points out, this will work if the problem is illiquidity. If the banks are actually insolvent, what's needed to bail them out is a massive capital infusion -- money for nothing. Given the nature of the assets the government would acquire under the Paulson plan, it's not clear if there is a difference.

Most experts and pundits and economists who have commented on Paulson's plan seem to hate it. (Steven Waldman has a good roundup here.) Some question it because it rewards an industry for its failure to effectively perform its most basic function -- evaluate credit risk so that it can make loans to make money. Some are skeptical because it gives Paulson unchecked power to help his former compatriots on Wall Street. (The proposal features this banana-republic-appropriate codicil: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.") Some wonder why it uses taxpayer money to prop up an industry that has doled out to itself millions in bonus money while doing nothing to help the wage-earning classes directly. Some are curious about why the banks should be able to get away with selling assets no one else wants to the government at sweetheart prices. Many note that this is risk-free socialism for the rich -- the gains of entrepreneurship are privatized while the losses are socialized. Accordingly, most commentators want to see a taxpayer stake added to the plan, under which the government gets to own part of the firms it helps out -- a debt-for-equity arrangement of some sort. But such an arrangement would threaten to nationalize the banking industry.

Would that be a terrible thing? It could, in economist Luigi Zingales's phrase, "save capitalism from the capitalists." Of course, bankers don't like such a thing, and as Zingales points out, it is much easier for those few bankers to coordinate and argue their side to Congress then the many taxpayers who would get nothing under the Paulson plan. So it seems unlikely that the plan will be modified too much in our favor. But hey, we got a lot of overpriced and inefficient houses in the exurbs out of this whole mess.

The year in song reflected the state of the world around us. Here are the 70 songs that spoke to us this year.

70. The Horrors - "Machine"

On their fifth album V, the Horrors expand on the bright, psychedelic territory they explored with Luminous, anchoring the ten new tracks with retro synths and guitar fuzz freakouts. "Machine" is the delicious outlier and the most vitriolic cut on the record, with Faris Badwan belting out accusations to the song's subject, who may even be us. The concept of alienation is nothing new, but here the Brits incorporate a beautiful metaphor of an insect trapped in amber as an illustration of the human caught within modernity. Whether our trappings are technological, psychological, or something else entirely makes the statement all the more chilling. - Tristan Kneschke

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Electronic music is one of the broadest-reaching genres by design, and 2017 highlights that as well as any other year on record. These are the 20 best albums.

20. Vitalic - Voyager (Citizen)

Pascal Arbez-Nicolas (a.k.a. Vitalic) made waves in the French Touch electro-house scene with his 2005 debut, OK Cowboy, which had a hard-hitting maximalist sound, but several albums later, Voyager finds him launching into realms beyond at his own speed. The quirky, wallflower vocals and guitar snippets employed throughout Voyager drop a funk that brings to mind WhoMadeWho or Matthew Dear if they had disco-pop injected between their toes. "Levitation" is as pure a slice of dance floor motivation as theoretically possible, a sci-fi gunfight with a cracking house beat sure to please his oldest fans, yet the album-as-form is equally effective in its more contemplative moments, like when Miss Kitten's vocals bring an ethereal dispassion to "Hans Is Driving" to balance out its somber vocoder or the heartfelt cover of "Don't Leave Me Now" by Supertramp. Voyager may infect you with a futuristic form of Saturday Night Fever, but afterwards, it gives you a hearty dose of aural acetaminophen to break it. - Alan Ranta

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Hitchcock, 'Psycho', and '78/52: Hitchcock's Shower Scene'

Alfred Hitchock and Janet Leigh on the set of Psycho (courtesy of Dogwoof)

"... [Psycho] broke every taboo you could possibly think of, it reinvented the language of film and revolutionised what you could do with a story on a very precise level. It also fundamentally and profoundly changed the ritual of movie going," says 78/52 director, Alexandre O. Philippe.

The title of Alexandre O. Philippe's 78/52: Hitchcock's Shower Scene (2017) denotes the 78 set-ups and the 52 cuts across a full week of shooting for Psycho's (1960) famous shower scene. Known for The People vs. George Lucas (2010), The Life and Times of Paul the Psychic Octopus (2012) and Doc of the Dead (2014), Philippe's exploration of a singular moment is a conversational one, featuring interviews with Walter Murch, Peter Bogdanovich, Guillermo del Toro, Jamie Lee Curtis, Osgood Perkins, Danny Elfman, Eli Roth, Elijah Wood, Bret Easton Ellis, Karyn Kusama, Neil Marshall, Richard Stanley and Marli Renfro, body double for Janet Leigh.

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Mary Poppins, Mrs. Gamp, Egyptian deities, a Japanese umbrella spirit, and a supporting cast of hundreds of brollies fill Marion Rankine's lively history.

"What can go up a chimney down but can't go down a chimney up?" Marion Rankine begins her wide-ranging survey of the umbrella and its significance with this riddle. It nicely establishes her theme: just as umbrellas undergo, in the everyday use of them, a transformation, so too looking at this familiar, even forgettable object from multiple perspectives transforms our view of it.

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Those who regard the reclusive Argerich as one of the world's two or three greatest living pianists—classical or otherwise—would not have left the concert hall disillusioned.

In a staid city like Washington, D.C., too many concert programs still stick to the basics. An endless litany of Rachmaninoff and Tchaikovsky concerti clog the schedules and parades of overeager virtuosi seem unwilling to vary their repertoire for blasé D.C. concertgoers. But occasionally you encounter a concert that refreshes your perspective of the familiar. The works presented at The Kennedy Center on 25 October 2017 might be stalwarts of 20th century repertoire, but guest conductor Antonio Pappano, leading the Orchestra dell'Accademia Nazionale di Santa Cecilia, reminded us how galvanizing the canonical can still be. Though grandiose executions of Respighi's The Fountains of Rome and The Pines of Rome were the main event, the sold-out crowd gathered to see Martha Argerich perform one of her showpieces, Prokofiev's Third Piano Concerto. Those who regard the reclusive Argerich as one of the world's two or three greatest living pianists—classical or otherwise—would not have left the concert hall disillusioned.

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