Of Bubbles, Bear Stearns, and Agamben

In a recent entry in his 'blog, Marginal Utility, over at popmatters.com, my friend Rob expresses some reservations concerning the ideological underpinnings of President Bush's meme, "the ownership society," which propelled many would-be gentry into the housing market, and, eventually, into financial waters well over their heads. Rob points out that

[t]he state, the media, and business all linked arms to tout home ownership as the only legitimate path to bourgeois security and fulfillment of the true American dream (the “ownership society"), and then aflame with that ideology, eventual subprime borrowers scrambled to get themselves some of that sweet home equity. Who could blame them? The abuses of the lending industry were so egregious, it was easy to overlook the overreaching by borrowers who were just trying to live the dream that had been foisted on them. Seemingly everyone endorsed this program—the state, the banks, the press, your friends and neighbors—so now the sentiment appears to be that everyone should pitch in to clean up now that the program has been revealed to be a total mess.

And I guess everyone is pitching in, to some extent, though it seems that the usual suspects in the boardrooms, who in many cases cashed in on lavish bonuses despite the ongoing housing-bubble collapse and its collateral financial damage (Bear Stearns, for instance, handed its officers billions while its shares were trading at fifty dollars a piece. One week later, J. P. Morgan announces its plan to buy Bear Stearns for two bucks a share, a decline in share price of 96 percent — in one week! And the Federal Reserve is pitching in with $30 billion worth the T-bills, swapping them for Bear Stearns's toxic sludge of bundled mortgage loans), will not have to tighten their belts very much at all. No, once again, the average citizen will have to offset the risks taken in the stratosphere of high finance by enduring the inflation that will inevitably follow from dollars being printed over time. How nice it must be to have the productivity of an entire citizenry as an insurance policy against imprudent speculation. Again Rob:

No one likes foreclosures—everybody involved loses. But no one likes deadbeats either. And no one likes ridiculously unaffordable prices for residential real estate. And homeowners who can’t afford the mortgages they signed up for—credulously or not—are not automatically victims. The real victims are the renters, who are seeing their rents increase with inflation while jobs become scarcer.

Yes, the unpleasantness will be manifold and far reaching, sweeping up in its train not just those unfortunate enough to have gotten in the housing market at the bubble's crest. The only ones likely to escape stint or sanction are those whom the Fed is so busy bailing out — individuals who likely have plenty of reserve funds parked offshore.

If you're familiar with the work of Giorgio Agamben (he's all the rage in lit-crit circles these days), particularly his concept of Homo sacer, you know that Homo sacer is a juridical designation that has its root in Roman law and applies to individuals who for legal reasons cannot be sacrificed. That is, they've been juridically divested of qualia which conventionally apply to them in ordinary circumstances, like, say, those of a law-abiding American citizen who enjoys rights and protections secured her by the Constitution and Bill of Rights. Agamben's concept of Homo sacer essentially responds to Foucault's notion of biopolitics, which Agamben finds as dependent on the conventional sense of the individual as citizen — critically dependent on it, in fact. For only if the subject is constituted according to this juridical norm can regimes of discipline and surveillance find purchase in her consciousness. Agamben introduces a distinction in what Foucault takes to be a unitary status; Foucault's disciplined subject represents bios, the organic expression of interlocking discourses that animate her subjectivity, whereas Homo sacer represents zoe, "bare life" that's been placed outside regimes and discourses by the very powers from which these regimes and discourses flow. Homo sacer as subject is no longer subject to the law, or, more specifically, is a subject who is subject to the law a that no longer applies to her. The power of this designation resides with the sovereign. He can decide on who or what counts as zoe or bios and can determine what Agamben calls "the state of exception."

I'm tempted to regard the very concept of "ownership society" and the ensuing financial debacle as expressions of sovereign power, which, because we live in a representational republic (theoretically, at least), is not so straightforwardly autocratic, but perhaps just as efficacious in its deployment as any fiat or fatwa. Every citizen without felony convictions over the age of eighteen has the right to vote, of course, but property ownership has always been the burr under the saddle of universal suffrage. Recall, for instance, all the agitation with the Reform Bill of 1832, which proposed extending the franchise to those whose property was assessed at ten pounds, and not just leaving it a privilege of landowners. The whole political history of the past three centuries is one of greater inclusion in the electoral process. Yet the "ownership society" seems to me to move in the opposite direction, one in which homeowners are in some respect fuller fledged citizens than renters, the former so much bios to the latter's zoe.

While this sort of expression of sovereign power — a president's initiative and the regulatory and financial instruments behind it — may be distasteful in and of itself, it also has an incredibly sinister down side we're only now beginning to see in the form of foreclosures, defaults, "torch outs," and, most distressingly, the post-bubble Hoovervilles popping up in bosky suburbs like Ontario, California and Bellevue, Washington. The pressures of negative equity and unaffordable mortgage rate upticks are creating new ranks of Homo sacer as they are demoted from the bios of homeowner to the zoe of homeless. Their demotion in status, along with the habitation choices confronting them (squatting or tent cities), bear an eerie resemblance to slum dwellers of developing-world megalopolises. Consider Zizek's remarks on this. Working with Agamben's concepts, Zizek observes that

a slum-dweller, much more than a refugee, is Homo sacer, the systematically generated "living dead" of global capitalism. He is a kind of negative to the refugee: a refugee from his own community, the one whom the power is not trying to control through concentration, where […] those in power do the concentrating while the refugees do the camping, but pushed into the space of out-of-control; in contrast to the Foucauldian micro-practices of discipline, a slum-dweller is the one with regard to whom the Power renounces its right to exert full control and discipline, finding it more appropriate to let him dwell in the twilight zone of slums. (The Parallax View, 269)

With Zizek's remarks in mind, I think we begin to see why the Federal Reserve has devoted itself to propping up the financial sector at the taxpayers' expense. And I think that it has to do at least in part with the ideology behind the "ownership society," which to my mind is simply a permutation of the ideology of consumer society in general. This ideology imposes greater conditions on full participation in society than simply having been born or naturalized in the United States, paying taxes, and avoiding brushes with the Law. It's similar to when President Bush exhorted citizens shortly after 9/11 to express their patriotism by shopping: participation in civic life has been conflated with participation in the economy. This is an exceedingly foreboding development from political point of view, because it implies that citizenship is something you must purchase, not something that belongs to you by natural right. Certainly a homeless person sleeping in the park theoretically enjoys the same rights as a McMansion owning middle manager, but the elimination of welfare benefits since the Reagan years betrays a collective political attitude far different than the one we publicly pay lip service to. Anything impeding one's attainment of middle-class status is seen as somehow undemocratic, un-American, and believing this plays right into politicians' hands. Republican supply-siders, for instance, believe that high marginal tax rates somehow limits the average persons' success. And out goes the baby with the bath water in the form of disintegating infrastructure, budget-starved entitlements, and, most importantly, regulations meant to curb excesses and thus mitigate risk. So, as less risk is spread broadly across society, more of it falls on each individual, which in turn affects the premium attached to middle-class security.

What I think we're seeing in the body politic is something similar to what we see in IT and cell phone markets, namely, "tiered" citizenship akin to the tiered services one can buy at different price points. The ideology of the "ownership society," in other words, equates citizenship with consumption. And once one accepts this as the condition of her citizenship, her status as bios becomes subject to the vicissitudes of the market until such an exorbitant price is attached to it that she can no longer preserve that status. The otherworld of slums or tent cities then await her, where she wanders anonymously in the gloaming with the other bare life sharing her fate.