Banks are Central

I’ve got very little time today, and I’ve been writing a whole book on this subject – but to answer the many questions I’ve been receiving about the current economic situation, let me explain really briefly what has been going on.

The mortgage/credit crisis was created by a SUPPLY SIDE GLUT, not a high demand for product. It basically went like this:

1. Lenders had more money to lend than there was supply of people wanting to borrow.
2. Bush pushes for home ownership as the New American Way, to stoke demand for credit.
3. Banks create really enticing (but really bad) mortgage products.
4. Banks thus created DEMAND for the CREDIT/cash that is in OVERSUPPLY.
5. Loans look like they’re going to bad someday, because their terms are unreasonable and somewhat non-disclosed. Housing prices rise because mortgage money (appears) cheap.
6. Creditors lobby Washington to change bankruptcy laws so that people who default will have to pay even after they go belly up.
7. Loans start going bad.
8. Creditors don’t want to talk possession of all these foreclosed houses, because this will create supply-side glut of real estate.
9. The Treasury department and the Fed and other central banks take a two-pronged strategy towards fixing the problem. First, they want to create the illusion that something is being done (fake superfunds to bail out homeowners, etc.) because they won’t want Barney Frank’s bill for real help to gain traction. Second, they want to make more money available to the creditors (banks), so they can keep lending money – because this is their business.

Homeowners will get a slight delay in the paralyzing rate increases on their mortgages, giving banks and creditors the chance to make a more orderly exit. They will bail from these mortgages while selling the artificially secured credit to the likes of you and me through money market accounts and other retail products. They just need time to make sure the real losses trickle down to someone else.

Should home buyers have taken those mortgages in the first place? No, of course not. But they were convinced that paying the bank for a mortgage somehow made them more of an ‘owner’ than paying a landlord for rent.

And remember – this whole mortgage fiasco is just a preview of what happens next year when the credit card industry faces the same “crunch.” Combine that with China calling in some of its credit to the US, and you get a real interesting situation.

Put it this way: You may want to become better friends with your local Community Sponsored Agriculture organization.

Hollywood: The Next Record Industry

To watch the AMPTP (movie and TV producers) disinformation campaign against the Writers Guild of America (screenwriters) is to watch a replay of the record industry’s profit-motivated suicide of the 1990′s.

The record industry saw the advent of digital media storage (CD’s) as a chance to commoditize their product. They would charge more to consumers (even though CD’s cost less than records to produce) and pay musicians less. It looked rosey for a moment. CD sales spiked shortly after their invention, as boomer-age consumers replaced their record collections with CDs. This motivated major media conglomerates to absorb the attractive balance sheets of the record industry. The labels became divisions of conglomerates, where Wall Street analysis replaced any regard for talent or quality. They didn’t realize that the sales spike was simply the replacement of old product, and didn’t think to develop new talent. They wouldn’t even have known how.

The emergence of NAPSTER and other file-sharing was seen as a threat (or even an excuse for poor sales) rather than an opportunity to generate new ones and new revenue streams. Unfamiliar with music, these corporations were unable to approach it from any perspective but the protection of copyright. Unfamiliar with and even contemptuous of musicians and their culture, these corporations saw talent as a labor pool and listeners as consumers. Human resources. Rather than come up with innovative solutions to migration from records to CD’s to the net, they saw each stage as an opportunity to divert more revenue streams away from artists and towards themselves. The ill-will only provoked more “file sharing,” as musicians revealed to consumers that profits from CD sales weren’t really passed down to them, anyway.

Today, faced with similar opportunities for innovation, media development, and content distribution, the AMPTP is choosing instead to find ways to cut its creative community out of the revenue stream. In their current media campaign against striking writers (and going so far as to cancel series, or lie to the press and public about which side is actually refusing to attend the negotiations), the AMPTP is already spending more than complete capitulation to the writers’ original demands would have cost them over the next several decades.

Instead of finding ways to include writers in the profits that might be generated by the online distribution of content, they insist on calling such use “promotional,” and keeping the revenue (mostly ad revenue) for themselves.

Should we be shocked or dismayed? Of course not. This is the way large corporations can be expected to behave. But what it does portend is the end of the mainstream corporate dominance of both television and movies. Yes: this is the moment we have been waiting for. Just as the music industry collapsed, so, too, is the film industry collapsing under its own weight and the chronic inability to see opportunities as anything but threats (or chances to bilk labor).

Get out your camcorders, kids. Fire up your Final Cut. And most of all, think of some good stories to tell. There a lot of people out there who will be awfully hungry for your content before too long. And – unlike the corporate producers – they might even pay you for it.

Comics Rule, Censorship Sucks

An intense writing schedule will keep me from most holiday parties this year. But here’s one that simply can’t be missed: the annual Members Party for the Comic Book Legal Defense Fund.

These are tough times for the Bill of Rights, and comics are just one of many canaries in the mine shaft (leading indicators). But they are a great litmus test for free speech, a highly accessible and fertile forum for ideas that simply can’t be disseminated through other mainstream media, and – perhaps most importantly – a way to share important concepts and ways of thinking with young people.

Join me, Paul Pope, Dan Goldman, Dean Haspiel, Moby, Alex Maleev, Jeff Newelt, as well as a number of other comics writers, artists and friends, as we celebrate and support freedom of expression in the original bottom-up mass medium.

Monday, December 10th, Village Pourhouse, 64 Third Ave @ 11th Street, 7pm. (The party is free, but requires a year’s membership in the CBLDF, which costs 25 bucks and is a worthy cause.)

Testament Volume Three

The third of what will ultimately be a four-volume set is being released this week. Testament Vol. 3: Babel.

I’m really proud of this one. I think the series is truly hitting its stride now that everyone understands who the “gods” are and why they can’t enter into the main panels of action. The story of a counterculture attempting to break a techno-fascist tyranny waged through centralized currency now moves front and center. Plus there’s another section of extensive notes, explaining the Bible and history on which some of my interpretations are based.

There’s a bunch of great Testament interviews online now, too:

This is probably the most recent, with Adam Elenbaas on Reality Sandwich.

Here’s the BoingBoing podcast interview.

Here’s the UndressMeRobot Interview.

And here’s one on Suicide Girls.

If you haven’t checked out this series, yet please do give it a try. I don’t expect to be working with Bible mythology again for a long time, and this is definitely the easiest way to get what it is I’ve been trying to point out about these stories. If you want to download the first issue for free, go over to the Vertigo website.