Monday Links: Rihanna, Baltimore, Jean Tirole, Private Equity

(1) Rihanna, American OxygenThe video for this song from mega-pop-star Rihanna’s new album R8 is pretty interesting–with lyrics that seem to be about the so-called “American Dream,” and which could *almost* be a patriotic anthem, but with at least one line in some tension with that: “We sweat for a nickel and a dime, turn it into an empire.” This could be interpreted as the rags-to-riches hope for an “empire” of personal wealth (much like Rihanna’s, who is an immigrant from Barbados), but in the video, the word “empire” is accompanied by images of militarism and Wall Street. And although the video is festooned with American flags, they are deployed in so many ways and alongside video clips of police beatings, protest (Occupy Wall Street, Mike Brown signs, “I can’t breathe” signs), militarism, the burning Twin Towers, etc., that it is hard to take them as pure patriotism. The faux-patriotic-anthem aspect reminds me of Springsteen’s “Born in the USA,” and the use of historical footage is a great antidote to Billy Joel’s catchy but insipid “We Didn’t Start the Fire” (see a non-official video here, with a similar collage of historical images), which presents U.S. history as a series of famous figures, and something for which “we” are not responsible. I have seen mixed critical reactions to the Rihanna video on the Interwebs (and interpretations in the comments section on Youtube are all over the place), but at least you can say that the very short clip of an Occupy Wall Street banner might be the best promo that Occupy has gotten in many years, maybe ever.

(2) Baltimore links:  Here are some of the pieces I’ve come across that are worth checking out (hat -tip to TM for many of these):

(3) Nobel Prize Winner Jen Tirole and Takeover of French Economics:  Ann Markusen, University of Minnesota economics professor, sent along this:

I’m forwarding a disturbing essay that Evan Jones, my grad school colleague and Political Economy professor at the University of Sydney, forwarded about the recent movement for heterodoxy in the French Economics academy and the powerful pushback.

Explains Evan:
An online daily Mediapart has a small English language section where they put up the odd translation, including this one  – a jaundiced view of the recent second French big shot (after Piketty) to appear on the world stage.

Tirole’s Toulouse school is known at the most orthodox (in the American sense) department in France.  Unfortunately, economics teaching in French universities is apparently rather pedestrian everywhere. The handful of assertive dissident economics (Frédéric Lordon, Jacques Sapir) I think are mostly in research outfits. And they rarely get invited onto the mainstream French media, which is full of flunkeys.

Here is the article, by Laurent Mauduit of Mediapart: How Nobel prize-winner Jean Tirole led the private sector takeover of French economic studies.

(4) Private Equity and Pension Funds:  I am slowly working my way through a book I should have read right when it came out a couple of years ago, Private Equity at Work: When Wall Street Manages Main Street, by Eileen Appelbaum and (D&S associate) Rosemary Batt. It’s great.  There’s lots in there about the huge irony of how public pension funds–“labor’s capital,” as former D&S co-editor Adria Scharf called it in a 2005 D&S article–are the biggest funders of private equity, but private equity is all about slashing jobs, outsourcing, “deunionization,” and all kinds of other worker-unfriendly activities.

I thought of this when I saw a recent piece in Fortune: Public pensions own payday lender that is illegal in their own states, about how New York and New Jersey public pension funds have become indirect owners of the nation’s second largest payday lender, ACE Cash Express Inc., as limited partners in an investment fund of the private equity firm JLL Partners. But, as the Fortune piece points out, payday lending is illegal in New York and New Jersey. Pension funds in Montana and California are also investors. Here’s a good quote from the article:

“From a business perspective, these deals can be brilliant because they are cash-flow positive, have return customers, and the government [is] always trying to catch up on regulation,” says James Zhang, a former private equity investor who is now an executive with consumer finance education website NerdWallet (which argues that there are better loan alternatives for the unbanked). “But not if you have a moral compass. Imagine teachers in low-income areas learning that they’re funding a company that profits off the backs of their students or their students’ parents.”

(Or imagine workers’ pension funds funding companies that profit from layoffs, union-busting, outsourcing… But of course we don’t have to imagine that.) As the Fortune piece points out, though, it’s not clear that the JLL Partners fund that includes ACE Cash Express will even turn out to have been a good investment for the pension funds, moral (and political) issues aside. And that’s often the case with private equity, especially since the financial crisis, according to Appelbaum and Batt.

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