We Live in Public

Last weekend I saw the documentary We Live in Public as it closed the New Directors/New Films Festival at MOMA. Directed by Ondi Timoner, this Sundance prizewinner looks at the enigmatic Josh Harris (above), who made his name in the Nineties with Pseudo.com, threw wild parties, showed up here and there as a clown...um, performance artist named Luvvy, and then, around the turn-of-the-millennium, experimented with putting others and himself under round-the-clock online scrutiny. After living his life "in public" for a spell, he seemed to drop off the proverbial radar, but now, with the release of We Live in Public, he clearly seems to be angling for a comeback of some sort.

Watching the documentary, you might get the impression that Harris was uniquely innovative in devising a kind of Internet alternative to television in the Nineties (when the technology was hardly competitive) and in creating events that suggest that surveillance is more and more part of the fabric of human existence. But the reality is that Harris was not unique in doing such things. Yet, although (or perhaps because) clarity doesn't seem to be his strong point, he apparently pitched himself sufficiently well to make a fortune as part of the dot.com mania and use the money to stage some remarkable events before losing much of the remainder when the bubble burst.

During the Q&A, which was attended by a number of Harris's former associates, I wondered if anyone would confront him about being a kind of a charlatan. But, to my surprise, those who spoke seemed to treasure their memories of Pseudo—even though Harris himself has come to say that Pseudo was a fake company. Likening himself to Jayson Blair, he's written that "I now acknowledge that Pseudo Programs, Inc., a New York City based Internet television network founded in 1994 and sold from bankruptcy in 2000 was the linchpin of a long form piece of conceptual art. Pseudo burned over $25 million in private and institutional capital over a span of seven years. Pseudo was a fake company."

Puzzling over the Pseudo phenomenon, I guess I shouldn't be surprised that someone such as Harris can build and maintain a following. Some people—a select minority of people in his circle—simply seem to relish the good and/or weird times Harris provided them while the money held out. Others are pretty sore, as some commenters here suggest in response to Harris's confession of fakery.

Back in June, the very first commenter asked how Harris's business is "indistinguishable from fraud." The second commenter wrote "I'm going to start conning elderly people out of their pensions and retirement monies and calling it "Performance Art." The third wrote "I've long felt the stock market is primarily a amusement park ride where people purchase a short time of feeling like they are participating in their economic fate." And so forth.

Another commenter from June 2008:

What the hell made this a 'fake' company? Sure, you can do an IPO with your 'art project' buddies as a lark using all made-up plans and products... but once you are incorporated and you've got a whole bunch of products and people are buying them and investing in you... you have a REAL company, at least by the standards by which we (as nations) define such corporate entities. Even if it started as a fraud, even if it continues to be fraudulent - it's not FAKE! This guy sounds like a douche. Enron and Worldcom aren't considered 'fake' companies just because they were cooking the books and selling stock based on stuff they didn't have. They're just fraudulent companies, and now they're companies that don't exist anymore. Don't see how this is ANY different.

By the end of the year, of course, Bernie Madoff was arrested. And Harris was revving up for his comeback attempt.

Photo: David Marc Fischer

Cohen vs. Cramer vs. Stewarts

Richard Cohen at The Washington Post recently wrote that Jon Stewart has been too harsh on Jim Cramer and his ilk. How could they have known that something was wrong with the state of world finance when so many business leaders took a bath along with other investors, including Cohen? For instance:

Let's start with Maurice "Hank" Greenberg, who was instrumental in building what is now probably the world's most reviled corporation, AIG. He resigned as chairman and CEO in 2005, but still it is logical to assume that few people knew more about the company than Greenberg. He kept much of his net worth in AIG stock. He's now lost much of that worth....

I give you one other name: Richard Cohen. He who writes this column had some of his (extremely) hard-earned retirement funds in AIG stock. This was because I was a cautious investor, and what could be safer than an insurance behemoth? Who knew that in faraway London, a division of AIG was fooling around in stuff that virtually cratered the whole company? Not my broker. Not me. Not even Greenberg.

So how could brokers, journalists, and ex-CEOs have possibly learned about the financial malfeasance that led to the current economic crisis?

Through better business journalism—despite the trend among television financial networks to boost big business, there were plenty of stories anticipating the foreclosure crisis. Through better brokering and financial analysis—some brokers, instead of simply going along with Bernie Madoff's good reputation, did their research on him and warned clients against investing with the man; other professional analysts did foresee various aspects of the crisis. And through better governance—had officials followed up on the cautionary reports instead of floating along with the perilously expanding financial bubble, at least some of the current crisis might have been averted.

It might be that the farther that cultures get away from a major economic disaster, such as the Depression, the more likely they are to forget lessons of the past and tolerate the abandonment of investment fundamentals. The more that investors abandon fundamentals, the greater the risk of ripoffs and huge losses—but, in the meantime, the delivery of significant gains and the promise of even more gains make it harder and harder to stop the wild party and restore common sense in the mix. Perhaps it's a kind of greed-driven manic-depressive economic cycle that acts upon large numbers of brokers, analysts, investors, journalists, and regulators, when, ideally, those same people should act as a moderating force upon the cycle, preventing the swings toward the dangerous highs of unfounded exuberance and the inevitable hangovers of crippling pessimism.

Judgment Day

Muntader al-Zaidi, 30, who hurled two shoes at George Bush on December 14, 2008, has been sentenced to three years in prison. The New York Times reports that he "has been in jail since the incident and his lawyers have claimed that he was beaten while in custody." His platoon of lawyers plans to appeal.

Bernard Madoff, 70, pled guilty to 11 felony counts related to his Ponzi scheme, which reputedly lasted more than a decade and bilked investors—including charities and Holocaust survivors—out of tens of billions of dollars [or, as conservative estimates put it, somewhere around 13 billion dollars]. Under house arrest on the Upper East Side since December 11, 2008, Madoff moved downtown today to the Metropolitan Correction Center pending sentencing in June.

Bad Jewish Charity Allegations "Unfit to Print"?

The New York Times article "But Is Madoff Not So Good for the Jews? Discuss Among Yourselves" (January 16, 2009) starts promisingly, with a kind of joke:

Among some Orthodox Jews, one response to a member of the faith who egregiously violates their religion’s fundamental values and beliefs is to rend clothes and treat the transgressor as if he were dead — sitting shiva, or mourning, for him.

For the more secular there is a different response: convene a panel discussion.

But about halfway through the story about such a panel discussion at the 92nd Street Y, the reporting takes a turn for the worse:

The one good that may come out of this, Mr. [Michael] Steinhardt continued, is that it might prompt Jews to re-evaluate their charitable giving in these leaner times. Naming names, he called a handful of Jewish agencies "lousy, miserable, corrupt organizations”; he said contributors were "just plain stupid," for giving them money. "They spend $150 million for about 18 anti-Semitic incidents per year," he said.

Even though the Times reporter (along with a full house at the 92nd Street Y) heard the names of a handful of "corrupt" charities, the paper didn't report any of them.

Bad form, to say the least.

The Magical Madoffmobile?

Yesterday I happened to walk by the lair of ripoff artist Bernie Madoff as a horde of reporters, police officers, and other passersby awaited his exit for a court appointment.

So I stuck around until the gates opened and the Madoffmobile came forth and...um...made off.

It seemed that the driver nearly drove through a red light, but none of the police officials appeared to be in a ticketing mood.