Weekend Film Recommendation: Enron – The Smartest Guys in the Room

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How did one of the country’s largest companies go from riches to rags almost overnight, if it ever truly had riches in the first place? That question is skillfully and intelligently answered in this weekend’s film recommendation: Alex Gibney’s 2005 documentary Enron: The Smartest Guys in the Room.

The title refers to Ken Lay and Jeff Skilling, who convinced themselves and the world that they had a created a new kind of company that could make unprecedented profits in the energy sector. As one insider puts it, as each quarterly report approached it seemed the company was not going to make its numbers yet somehow it always did, and then some. Enron’s astronomical reported profits did not gain credibility in a vacuum: Its books were audited by Arthur Anderson, its accounts were interconnected with those of some of the nation’s most trusted financial firms (e.g., Merrill Lynch) and all the “objective” stock analysts were singing the company’s praises. But of course it was all a lie, and it unraveled with shocking speed and horrific destructiveness.

This movie adroitly combines interviews of journalists, former Enron insiders and political figures with archival news footage (e.g., Skilling and fellow crook Andrew Fastow’s Congressional hearings) and some truly damning movies made by Enron executives themselves. Although it’s a bit long-winded at 110 minutes, the film has an admirable ability to explain even to financial novices how Enron executives defrauded investors (not least its own rank and file employees) as well as put California through living hell by intentionally starving the state of electricity.

When this muckraking documentary came out, some critics complained that the film massaged the facts for the sake of left-wing axe-grinding. The narrator being staunch anti-capitalist Peter Coyote and one of the key interviewees being the lawyer who led the class action suit against the company (Bill Lerach) could trigger worries for some viewers that the film is simply comfort food for socialists. But any concerns about bias disappear as the film unfolds because the perpetrators so thoroughly hang themselves before the viewers’ eyes. The film accuses Enron of dodgy “mark to market” accounting and backs it up with Skilling himself appearing in a company produced comedy sketch where he brags about the phony nature of Enron’s books. Likewise, the accusation that Enron traders delighted in destroying California with contrived energy shortages and price gouging is immediately backed up by audiotapes of traders laughing over doing just that (Most disgustingly, cheering on a raging wildfire because it is damaging power lines).

Gibney has done a public service with this movie, but it doesn’t feel like eat your peas viewing. It’s fascinating, disturbing and compelling throughout. And also, there is something refreshing about a movie in which white collar criminals who steal billions actually go to prison in the end. Those were the days.

p.s. Interested in a different sort of film? Check out this list of prior recommendations.

Cable TV: Socialism that Works?

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We’re frequently told that if cable companies would allow us to buy channels à la carte, we could save lots of money by not having to pay for all those hundreds of channels we never watch. As the following numerical example illustrates, however, channel bundling may actually enable cable companies to provide offerings that many of us like better than what we’d get under an à-la-carte system.

The key feature of the example is one that also figures prominently in other digital content markets—namely, that the costs of production are mostly fixed: Once content is in hand, the marginal cost of serving additional consumers is essentially zero. Normal intuitions about pricing often break down under these conditions, and that’s what happens here.

For simplicity, suppose there is one premium channel that everyone would like to have (call it HBO) and 100 fringe channels, none of which is valued by more than a small proportion of potential viewers. Suppose there are 120 million potential subscribers in total, that their maximum monthly willingness to pay for access to HBO and the 100 fringe channels is as summarized in this table:

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If the cable company sold HBO separately, their best bet would be to gouge the rich TV fans, selling 10 million subscriptions at a price of $70 each, for $700 million in monthly revenue. They’d also sell 120 million subscriptions to the bundle of 100 fringe channels at a price of $5 each, for another $600 million in revenue. Total monthly revenue: $1,300 million.

Now suppose they can offer a premium bundle consisting of the 100 fringe channels plus HBO. Their best bet would then be to charge $20 a month for that package, at which price they’d sell 50 million units, for monthly revenue of $1,000 million. They’d also sell another 70 million monthly subscriptions to the 100 fringe channels at $5 each, for another $350 million in revenue. So total revenue would be $1,350 million, or $50 million more than before. Yet no subscriber would end up with a package that’s worse than before, and 10 million former HBO à-la-carte subscribers would be paying $55 a month less than before for the combination of HBO and the fringe channels.

This is obviously just a hypothetical example. But it captures the basic idea that when the marginal cost of serving additional subscribers is zero, the average cost of serving each one necessarily goes down whenever sellers can price their offerings in ways that result in increased numbers of units sold.

Tech industry analyst Ben Thompson has described the current cable bundling system as “socialism that works,” offering data suggesting that the implications of my numerical example are hardly farfetched. No one should be surprised, then, if prices for channels like HBO and ESPN go up sharply if cable providers are forced to offer them as stand-alones. That wouldn’t be a good thing for the people who now get those channels as part of a cheaper cable bundle, nor would it help those subscribers who don’t care about the channels.

 

Weekend **Double Feature** Film Recommendation: My Name is Julia Ross and Dead of Winter

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The 1941 novel The Woman in Red has been used as the basis of a film twice, with a four-decade gap between versions. As a special double feature, this week I recommend both adaptations: 1945′s My Name is Julia Ross and 1987′s Dead Of Winter.

My Name is Julia Ross was a modestly budgeted Columbia production with a 12-day shooting schedule. But at that point in his career, director Joseph Lewis was used to churning out a C-picture a week on Poverty Row. To have a B-movie budget was for Lewis a major upgrade in resources that allowed him to show how much talent he had. Clocking in at just over an hour, the film serves up noirish gothic suspense and a career-best performance by Nina Foch as the title character. She’s an American living in London who answers a job advertisement placed by a seemingly gentle old woman (a deliciously evil Dame May Whitty). Julia thinks she will be working as a personal assistant, but instead is promptly drugged, kidnapped and moved to a remote mansion on the Cornwall coast where everyone calls her by a different name and acts as if she’s married to a knife-obsessed weirdo (George Macready, who was made for these sorts of roles)! But the villains have not figured on how brave and resourceful is their prey…

My Name is Julia Ross is often cited by critics as being the perfect demonstration that you can make a fine movie on a low budget. The script and performances are solid and the brisk pacing keeps the viewer engaged throughout. Burnett Guffey, a future Academy Award winner, contributes moody and at times even eerie photography, and Lewis’ influence on shot selection is also easily evident (He loved to shoot actors through wagon wheels and fences, here there are shots through the newels of a staircase and the iron bars of a secured window). It is not surprising that the movie more than returned its modest budget and put Lewis on the path to even greater successes (Most notably, the simply amazing Gun Crazy, which features a central character with a fetish that resembles Macready’s here).

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Many years after My Name is Julia Ross was released, Marc Shmuger and Mark Malone re-imagined the story considerably in Dead of Winter, making the lead character an actress desperate for work (Mary Steenburgen, who has fun playing three different characters). She is interviewed for a role by an inordinately polite and at the same time somehow disturbing assistant (Roddy McDowell, who steals the film) to an alleged film producer (Jan Rubes). In the midst of a raging, isolating winter storm, they bring her to a remote New England mansion and ask her to shoot a scene in which she impersonates Julie Rose, an actress whom they claim has had a nervous breakdown and needs to be replaced on a major film production currently underway. But as the audience we know that Julie has been murdered, and our heroine is falling into a web of danger.

Some of the plot twists and shocks in the film are anticipatable, but others are complete, effective surprises. As you would expect from a modern film, there is more graphic violence than in the original, but it’s not at all overdone. As in the original, it’s rewarding to see a strong, smart female lead character and also have a few moments of black humor. The one significant weakness of Dead of Winter is its length. If director Arthur Penn had to work with Joseph Lewis’ budget, I suspect he would have cut the first 11 minutes of set-up and character backstory and opened the film instead with the Steenburgen’s first meeting with McDowell. That would have made a better movie because the film as made can’t keep the audience in suspense throughout its 100 minute running time, even though the climax is truly nail-biting.

As a set, the two versions of this story make an entertaining and suspenseful double feature. Also, for film buffs, watching these films back to back is a chance to appreciate how the production of movies has changed over the decades.

p.s. Some trivia for you: Gene Wilder’s 1984 film The Woman in Red was based not on the book but a French movie).

p.p.s. Steenburgen’s husband in Dead of Winter (William Russ) is apartment bound because his broken leg is in a cast, but he can at least look out his window and take photos with his high-end camera…I think we know to which classic movie this is an allusion!

The Secret World of David Copperfield

Rooks Here is a good trivia question for bibliophiles: What is the full title of Charles Dickens’ classic novel David Copperfield? The answer, believe it or not, is “David Copperfield: The Personal History, Adventures, Experience and Observation of David Copperfield the Younger of Blunderstone Rookery (which he never meant to publish on any account)”.

An even lesser known fact is that there is an actual place called Blunderstone Rookery. It’s located about 60 miles southeast of London, and the carefully selected rooks that are raised there have won many prizes from British birders over the years. I strongly recommend it as an offbeat, sadly overlooked, tourist spot for Dickens fans, not only for the extraordinary number of birds but also for the library at Blunderstone House, which has an astonishing collection of old Dickens editions.

article-2205444-1516AED9000005DC-681_964x651 I myself am a collector of such editions, and over the years have gotten to know Blunderstone’s librarian, Dr. Arnold Humber, a retired Oxford Don who divides his time between producing some of the nation’s best birds and collecting old books. Dr. Humber is also a voracious consumer of modern literature, and I rely on him to tell me what on the current best seller list is worth my time. Indeed, every time I see him I always ask the same question:

Have you bred any good rooks lately?

Weekend Film Recommendation: Seven Psychopaths

Martin and John Michael McDonagh have earned an estimable reputation for themselves in Hollywood with their offbeat character studies that traverse action, comedy, and drama. Although I have already praised The Guard at RBC, most will be familiar with the work of the younger brother, Martin McDonagh, for In Bruges. This week’s film recommendation is Martin’s most recent feature film, which moves the setting from Europe to Los Angeles, in Seven Psychopaths (2012).

The self-referential hook in the film’s plot is easy to spot. Marty, played by Colin Farrell, is an Irish scriptwriter laboring with a drinking problem (some of the clichés are too obvious to be unintentional) and nothing more than a great working title—“Seven Psychopaths”—for his long overdue next work. Marty’s rare progress on the script relies on infrequent moments of sobriety and inspiration offered by his eccentric friend Billy, played by Sam Rockwell.

Billy’s daytime job is a collaborative effort with Hans, played by Christopher Walken, to kidnap wealthy Angelenos’ dogs only to return them in exchange for a hefty payout. Things take a turn for the unexpected when they happen to kidnap a dog that belongs to Charlie, one of LA’s crime bosses played by Woody Harrelson. Charlie’s love of his dog is so profound that the lengths to which he’ll go to retrieve it are unquestionably psychopathic.

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You’d have to be witless to be surprised by the film’s big reveal, which happens about two-thirds into the film. The stories that Billy has been feeding Marty to enable progress on the script are drawn from characters he himself encounters. Sometimes the script merely reflects what Marty has witnessed, whereas sometimes Marty has reproduced an incriminating story recited to him by Billy.

But where Seven Psychopaths really gets going is in those moments when McDonagh plays around with the meta trope to the point that Marty’s stories presage events before they even unfold around him. Is this a drunken hallucination? Is Marty a supernatural being, capable of commanding events into existence with his pen? Is the world nothing more than a representation of Marty’s own grandiose self-image borne out of psychopathy of his own?

McDonagh is perfectly capable of creating a fun and watchable crime caper, but his real strength is in playing with an audience’s expectations about the genre’s form itself. He seems to delight in ridiculing the pomposity of most action films and the over-blown macho types who typically populate them. Hence his selection of a bunch of pathetic characters to appear as his eponymous psychopaths, who fumble around desperately searching for a purpose worthy of their inflated attention-seeking egos. No such luck, unfortunately – they have to make do with the hand they’re dealt: a crime boss’ pathological inability to hold back tears at the thought of his stolen shih tzu; a pitiful excuse for a final shootout; and a wacky bartender’s effete attachment to a bunny. It’s all there to rescue the audience from having to watch yet another movie that exhausts further the already drab and tired tropes common to the genre.

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Like a few films I’ve reviewed at RBC that toy with the film-making conceit (e.g., see 20,000 Days on Earth or Rubber, among others), the self-referential theme running throughout the film gives the impression that there are a few hidden jokes that aren’t intended for the audience –perhaps McDonagh is guilty of making a few jokes for his own amusement. This would be consistent with the self-obsession of the characters on screen. I certainly wasn’t inclined to begrudge him that much with a film as plainly entertaining as was Seven Psychopaths.

The Iron Bank

The European Central Bank is failing abjectly in [update: what should be] its core mission to protect the common currency through shared prosperity as well as price stability. It no longer deserves its name and logo.

ECBlogo5So here are my proposals for a new name and logo. Continue Reading…

Weekend Film Recommendation: Game Change

The most remarkable thing about Tina Fey’s SNL skit about Sarah Palin’s notorious Couric interview wasn’t the accuracy of her impersonation. It was the fact that the joke spoke for itself so plainly in the verbatim repetition of Palin’s words. If there’s a joke in this week’s film recommendation, it’s of a similar form. Julianne Moore plays Palin in Game Change, the HBO adaptation of the “high risk, high reward” selection of a running mate capable of shoring up the McCain campaign’s lack of popularity with younger—and especially female—voters.

A skin-headed Woody Harrelson plays Steve Schmidt, the campaign’s senior strategist. In a textbook case of the Halo Effect in action, Schmidt champions Palin once her inimitable charm compels him to leave her competence in politics and foreign affairs unquestioned. He easily sells the rest of the team on Palin’s suitability, even over McCain’s preference for Joe Lieberman. Notwithstanding the popularity and momentum gained by Palin’s rousing speech at the RNC upon accepting the nomination, Schmidt soon realizes that Palin is more of a liability than he had anticipated. Before long, the McCain campaign had to grapple with Troopergate, the Couric interview, and Palin’s general inability to differentiate between North and South Korea or between the federal government and the Federal Reserve.

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She also didn’t handle with much grace the creeping awareness that she had bitten off much, much more than she could chew. At times, she became catatonic; at other times, she was violently resentful at the way she felt treated by the staff. And her petulant outbursts never make clear whether Palin blames it all on herself or the “lame-stream media” (Harold Pollack is quite right on this one – why a mother to a physically disabled child coined the term “lame-stream media” just shows what a wasted opportunity Palin was for the country).

The two main characters both undergo a sad development throughout the film. Schmidt begins the campaign with ambitions of installing a noble and worthy leader in the Oval Office. But by the end, he happily jettisons that aspiration when he suggests that Palin ought to memorize 25 answers to pre-packaged debate questions, just to forestall the impending catastrophe of the VP debate against Biden. The plan works beautifully, and he oddly appears not so much relieved as he is proud of the Pygmalion he’s helped produce. For her part, Palin also goes through an un-flattering development. She begins as the hockey mom whose principal concerns are understandably with her constituents back home in Alaska. But that admirable concern eventually becomes a parochial distraction from more pressing national matters, and it’s also a leading indicator of Palin’s weakening capacity to cope under the pressures of office. It’s therefore all the more sad when she concludes the campaign convinced that she’s outgrown Alaska, as though obscurity doesn’t suit her any more.

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Even-handedness is never assured in political dramas of this sort—especially when, as here, the wounds of history remain so fresh—but Game Change has an air of fairness without flattering any egos. McCain, played by Ed Harris in an uncharacteristically middling performance, declines to intervene once Palin’s incompetence becomes apparent for fear that she may direct her anger toward him. Neither character seems particularly courageous as a result. Nevertheless, both of them inspire considerable sympathy: McCain, for the sense in which he feels authentic disappointment at the way the campaign inspired such vitriol toward Obama among the Republican base; Palin, for the sense in which she ingenuously aspires to being the next Reagan, only to be told that she’s not a fit successor.

On this last point, two of my favorite scenes are close to the very end, when Palin voices her determination to deliver a concession speech alongside McCain’s. Her interactions with McCain as he passes along the torch of the Republican party, and Schmidt as he hopes to keep the honor of politics intact are potent and well-wrought. While McCain encourages Palin to strive for something bigger, Schmidt voices the audience’s urgent hope that Palin be reminded of her limits. Presumably Schmidt’s guilt from having been the one to champion Palin’s selection all those months earlier leads to this one scene as a great payoff.

To Cultivate Open-Mindedness

Johann Koehler impressed me the other day (a common occurrence) by explaining why he no longer reads The Economist: “I came to the point where I could predict what they would say about everything”. This struck me as admirable because I think most people who had such a realization would promptly renew their subscription rather than end it.

Much of the audience of political/cultural media products is composed of people who adore having their expectations met (e.g., “Tonight on the show our investigative reporter shows that, once again, you were right about everything!”). Indeed, if their biases are not reinforced, for example if their favorite outlet presents some evidence that challenges their views, such consumers will react quite negatively. More than once I have started following an independent-minded, original, unpredictable blog and seen it be battered into predictability over time by hostile comments from readers in search of comfort food.

This reflection reminded me of wonderful quote passed along by Andy Sabl in an excellent post about life at Harvard:

an alumnus wrote me to say that he’d always thought there were two Harvards: one that was about intellectual inquiry and expanding one’s horizons, and one that was about exactly the opposite.

As a professional educator and more generally as someone who wants our democratic republic to function properly, I despair at the tendency of so many people to use the wonder of the Internet mainly to search out whatever narrow slice of the media world will never surprise them, never being them into contact with competing views/facts and never teach them anything that they don’t already know. I wish I knew how we could produce more people who saw value in consuming the unfamiliar, the challenging and the off-beat rather than living on the empty calories provided by predictable confirmation of their own prejudices.

Weekend Film Recommendation: Traffik

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I once saluted the Tinker, Tailor, Soldier, Spy mini-series as the summit of BBC programming. This week’s film recommendation is in the same league: 1989′s Traffik. Most Americans remember Steven Soderbergh’s Oscar-winning adaptation of this series, but far too few have seen the British original, which at just over 5 hours allows much more character and plot development than could Soderbergh’s fine movie.

Simon Moore’s masterful script anchors what could have been a sprawling, confusing series in the lives of a small number of characters: A UK Home Office drugs minister (Bill Paterson) whose daughter is a heroin addict (Julia Ormond), a dogged German cop (Fritz Müller-Scherz) who relentlessly pursues an ice queen (Lindsay Duncan) who steps into the drug trafficking business when her husband (George Kukura) is indicted, and a desperate Pakistani poppy farmer (Jamal Shah) who finds work with a ruthless drug lord (Talat Hussain). As events buffet the protagonists and their respective story arcs cross, Moore’s narrative skills and Alastair Reid’s deft direction ensure that the viewer is irresistibly drawn in emotionally and able to track the complexities of the plot.

The performances by the actors range from good to amazing. Though it is hard to choose some to single out for praise, Müller-Scherz completely inhabits his role as a working class police detective who seems to hate traffickers as much for their wealth as their drugs. Paterson is marvelous in a tragic role, playing a rigid man who desperately wants to do good at home and at work yet almost always fails in both domains. Lindsay Duncan is also impressive, beginning the film as a woman accustomed to wealth and knowing yet not wanting to know where the money comes from. After her husband’s arrest, Duncan makes credible her character’s transformation into someone even more cold-hearted than he, revealing the greed and entitlement that was lurking in her all along. Her character, along with Talat Hussain’s Pakistani drug lord, are used by the film to portray the drug trade much as socialists tend to see all of capitalist enterprise: A system with a few rich sociopaths on the top and countless marginal people (whether in the drug trade or addicted to its products) scraping by and suffering at the bottom.

The cinematic team behind Traffik took a somewhat subjective approach in their portrayal of drug production and daily life in Pakistan. Home Office minister Jack Lithgow (Paterson), improbably, roams around Pakistan unstaffed, not unlike Macbeth lost in the haunted forest. His encounters with the locals are more emblematic than realistic, including his somehow running into Fazal, the farmer who will be a hub of the story that unfolds. Coupled with dreamlike, sun dappled shots of the countryside by cinematographer Clive Tickner, the whole effect of the Pakistan sequences is akin to watching a surrealist play. Yet it works because Lithgow is on a mission of unreality, trying to stop drug production with a feeble crop substitution program and more generally trying to control a culture that he can barely even understand.

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In contrast, the scenes set in Europe are more gritty and realistic, particularly Ormond’s descent into addiction. The skies are darker, the shadows longer and the cinematic look grimier. And over both the European and Pakistani scenes hangs Tim Souster’s music, a quasi-mystical threnody that accentuates the emotional anguish that the film creates. You won’t get his score out of your head quickly and you will not want to.

Traffik is a powerful, mournful film that doesn’t speechify or offer easy answers about drugs. Both artistically and as an education about its subject, it’s a triumph from start to finish.

Young Writers: You May Be Cute, But Not Special

In John Singleton’s powerhouse movie Boyz n the Hood, Laurence Fishburne plays a divorced dad who successfully raises a son largely on his own. He fishes for a compliment about his parenting from his ex-wife, played by Angela Bassett, and she responds that while he’s been a good dad, he has only done what countless mothers have done “since the beginning of time.” Gently but firmly, she compliments him thus: “You may be cute, but not special.”

I think about this exchange often when I read political/cultural commentary by young writers, whether it’s in a book, a student paper or on blogs. Too many essays begin with words along these lines: “No one in this country is talking about X, so let me lay out some hard truths that can no longer be ignored!” And then they go on to offer some shattering observation such as “money is corrupting politics,” “Hollywood movies are sexist,” “Intimate relationships can be difficult,” etc.

One of the things that happens to you as you age and read more is that you realize almost everything that has been said about politics and society has been said before. When I read outlets that cover politics, I can almost imagine the editors giving out assignments to their reporters: “Bill, give me a lion-in-winter-plotting-his-comeback piece on ex- Senator Jones. Sally, I need a rising-young-pol-who-happens-to-be-Black profile on Congressman Green. Dave, how’s that he’s-controversial-but-he’s-a-happy-warrior piece about Governor Harris coming?”

Here’s a humbling experience that every writer should seek. When you think you have something new to say, google the relevant words and see how many other people have already said it, perhaps better than you would.

Does this mean you can’t say something again or in your own way? Of course not. First, every generation needs to work things out for itself. Even if what you are writing is old news to many people, it can be important for you in your own life to figure out important things through your writing, for example how you will handle the tradeoffs between parenting and career or the disappointments inherent in political activism. Second, if you are writing in the service of a cause, repeating what others said make sense because “everything has been said before, but you have to say it again because no one listened.” (It’s too perfect that that quote is attributed to more than one person.) Obviously, the fact that someone wrote about racism last year doesn’t mean the problem is surely resolved by now and need never be discussed again.

However, and it’s a big however, never package your own personal take on the eternal verities as a breakthrough in human development. Never write in a tone that suggests that you are the one, extremely special, unusually sensitive soul in our society who — gosh darn it — still cares. And never imply that your readers should be embarrassed for not having grappled with your unique perspective before (because it ain’t unique and they’ve probably heard it multiple times before).

Fresh voices humbly engaging history’s age-old debates make for good reading. But fresh voices who think history starts with them turn off the very readers they hope to engage.