The hedge-fund landlord

Corporations—the AI we’ve been living with for centuries… As Cory Doctorow writes in Skynet Ascendant: We humans are the inconvenient gut-flora of the corporation. They aren’t hostile to us. They aren’t sympathetic to us. Just as every human carries a hundred times more non-human cells in her gut than she has in the rest of her body, every corpora­tion is made up of many separate living creatures that it relies upon for its survival, but which are fundamentally interchangeable and disposable for its purposes. Just as you view stray gut-flora that attacks you as a pathogen and fight it off with anti­biotics, corporations attack their human adversaries with an impersonal viciousness that is all the more terrifying for its lack of any emotional heat.

Elon Musk’s stated fear of AI seems ironic in that he is such a corporate creature, and corporations behave exactly how he describes AI in such apocalyptic terms. But that is exactly what is happening, not only to cities, but most visibly there, because cities are were value and capital are most concentrated. Yes, a family that owns a few buildings—like my old landlord and his Greek immigrant family; they started with a diner and ended up owning a few dilapidated buildings in midtown, one of which I lived in for 17 years—would form a corporation which owns the buildings; but that is qualitatively different from a financial corporation whose management decides that the ROI they need to justify their bonuses is waiting in real estate and rental properties rather than boring old equities, bonds, and complex derivatives thereof.

I’m not clear on the difference, but I suspect, as with most things, that it’s a gradual difference, a sliding scale, rather than a nice, simple toggle switch. My old landlord wasn’t a financial corporation with no view of what was in the world except certain select metrics, blind to culture and human life, and chewing through humanity to get the coins in our pockets, then pulling the hair and buttons from its teeth. But he did live in Long Island City among his ethnic and religious counterparts, and I don’t think he cared personally all that much about people like me in Manhattan. So he did that thing that landlords do, which is to send in unlicensed contractors to do horribly destructive work on the building for years and years, in the hopes of either driving us out one by one, or, better yet, provoking a tenant lawsuit, the result of which is that the building would be condemned and … we’d all be driven out at once.

So was he better than a hedge fund landlord? He was, if only that I could actually talk to him and he would respond, and he was answerable. Also, he didn’t have megabucks to spend on lawyers to salt the soil around his enemies. He had one awful, but not THAT awful, lawyer whom we used to see in court.

Better would be Art Stabile, the lefty Catholic who lived down the block, who owned the building he lived in and rented out the apartments to young (Catholic mainly, I believe) international students. He had a stake in the building, the street life, and the world from which he earned his living. I don’t know who owns his building now…

Cities become prey to certain cultures. Los Angeles was for a while a creature of Hollywood. The dreams and desires of those who worked in entertainment were the legitimate dreams and desires. Others were… less interesting. Hollywood includes artists and craftspeople, so Los Angeles has always been receptive to artists, though somewhat contemptuous of those who don’t—or, the suspicion is, can’t—sell out.

New York is under the spell of Wall St and has been since the 80s. But Wall St’s culture itself has changed and dragged the city behind it, helpless in its wake. And information technology has supercharged its ambitions, so that, while years ago, it would have been a chump’s game to invest in rental real estate, because management was complicated and expensive, today, rental real estate is pretty good for a return.

I go back to the first episodes of Planet Money—when it was good, when it was important, before they did inane “brand stories” about Hydrox vs Oreos and “ain’t business grand.” The inception of Planet Money was a This American Life episode called The Giant Pool of Money. Investors used to park money in Treasury bonds, but interest rates were lowered to speed up the economy. This meant the T-bills yielded less. So all those smart guys ‘n’ gals on Wall St (really mostly guys, especially then) turned their Ivy League-honed minds to where else they could invest.

Turns out mortgages were just sitting there being valuable. So they proceeded to process them via the alchemy of high finance—tranches, derivatives, derivatives on those derivatives—until a small number of folk made a lot of money and many, many people lost their homes in the Great Recession.

They have no stake in Main St. Just like with Tyson (of the Foods), Wall St parties are so much more fun than those annual BBQs they use to keep their staff happy with their low pay and shrinking benefits.

After the Depression and WWII, there was, for a brief while, a time when the nation’s culture was egalitarian. All Americans (let’s not get crazy; not Blacks really, and not women, not really) were equal, and your boss could live in your neighborhood. He might have a pool and you might not, but big deal! You were all equal, you were all Americans.

But (see Piketty) that was an anomaly, brought on by a confluence of disasters and FDR. Now we’re back to the status quo ante. And, while other nations still strive to emulate America in the 60s, America is turning its back on that and looking to the 1880s.

I don’t like it. No sir, not one bit.

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