<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=Content-Type content="text/html; charset=iso-8859-1"> <META content="MSHTML 6.00.2800.1106" name=GENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=#ffffff> <DIV>I did a profile of Doug for today's National Post. I resisted all temptations to describe him as a Leninist. The link below only works if you subscribe to the Post, so I've also appended the article below. Jeet</DIV> <DIV> </DIV> <DIV><A href="http://www.canada.com/national/nationalpost/columnists/story.html?id=cf14a5a3-610c-4fc5-a29e-651be9dd5dab">http://www.canada.com/national/nationalpost/columnists/story.html?id=cf14a5a3-610c-4fc5-a29e-651be9dd5dab</A></DIV> <DIV> </DIV> <DIV>In Defense of Martha</DIV> <DIV>by Jeet Heer</DIV> <DIV> Things are finally looking up for Martha Stewart. Although the celebrity knick-knack maker was convicted earlier this year on a variety of criminal charges relating to covering up a shady stock-market deal, she might yet escape jail time thanks to the news that a key witness against her may have committed perjury. This reversal of fortune will please not only Stewart's loyal fan base but also Doug Henwood, the literary scholar turned  maverick economic analyst. In a spirited article in the February 9 issue of The Nation magazine, Henwood noted that Stewart's crimes were petty misdemeanors compared to the whole-sale larceny the big boys got away with during the 1990s boom. "Why are insider trading and related transgressions often treated more severely than defrauding retirees, lying to stockholders or, more prosaically, running a dangerous workplace?" Henwood asked. "The only obvious victim of Martha's alleged crime is the public's perception of the fairness of the stock market....Though people on the left often cheer the prosecution of insider trading (which, remember, is something Stewart isn't even accused of), there's nothing particularly progressive about preserving the illusion of Wall Street's fairness. It is, therefore, in the interests of both individual justice and political clarity that Martha be found innocent." Everybody loves a good scapegoat, a lone miscreant who can bear the blame for large failures in the system. In wanting to save Martha Stewart from being turned into a sacrificial lamb, Henwood demonstrates his characteristically independent stance. It is interesting to note that Henwood's argument bucks the standard line of both the political right and left. Among conservatives, there have been many who defended Martha simply because they don't like the idea of a rich person being punished. Among liberals and leftists, Martha was excoriated as a prime example of big business villainy. Henwood is fully aware of the crimes of capitalism, but he is also sensible enough to realize that Martha Stewart is  being railroaded while genuine economic gangsters are allowed to flourish. "Give Martha's Cell to Cheney," reads a tee-shirt sold by the Left Business Observer, the sprightly newsletter Henwood edits. Henwood writes on business issues with freshness and originality in part because he has an unusual background for an economist. As an outgrowth of his graduate studies in English in the 1970s, Henwood was fascinated by the linkage between political economy and literature. He was intrigued by the way writers re-acted to the changing forms of economic life: for example, how Ralph Waldo Emerson's celebrations of self-reliance emerged out of an entrepreneurial society. Of special interest to Henwood was the great poet Wallace Stevens, who worked for many years as a surety bond lawyer for an insurance company. In pursuing the linkage between ecstatic poetry and mundane bean-counting, Henwood started delving into economic theory. Henwood's economic turn took place in the early 1980s, when Ronald Reagan and Margaret Thatcher were changing the ground-rules of the capitalist system by breaking the welfare state consensus that had been created during the Second World War. Henwood was frustrated by fact that the mainstream left-wing response to Reagan and Thatcher was framed in backward-looking and outdated terms. Abandoning his literary studies, Henwood morphed into an economic analyst, starting his newsletter Left Business Observer in 1986. Economic writing tends to be either very shallow or too obtuse. The business press  - the fine Financial Post being a rare oasis, of course - is an intellectual wasteland filled with cursory daily tidbits as informative as the day's weather forecast (stocks up, sunshine, dollar down, thundershowers), fawning profiles of C.E.O.s (often described in terms better suited to the hero of a Harlequin Romance) and mind-numbing rants about the virtues of the free market. In its defence, the business press is at least readable. By contrast, in the last few decades most academic economic writing has plunged into the netherworld of murky jargon and mathematical abstractions completely removed from any human reality. Henwood avoids both of these pitfalls, but has the virtues found in both spheres. Like a good journalist, he always writes crisp and engaging prose, often with a bracing directness. As with the best professors, his observations grow out of long and honest wrestling with data and theory. He is never glib, but backs his arguments with genuine research. In his 1997 book Wall Street he made a real contribution to economic theory by renovating the idea that finance capital sits at the driver's seat of the capitalist system. Given his expository skills, Henwood has gained a wide array of admirers, ranging from mainstream figures like Berkeley economist J. Bradford DeLong (who worked for the Clinton administration) to Noam Chomsky, However, Henwood's habit of challenging the status quo has made him some notable enemies. "You're scum ... sick and twisted" former Wall Street Journal executive editor Norman Pearlstine once told Henwood. "It's tragic you exist." To get a taste of Henwood's writing, consider his account of the Enron debacle. As befits a former English graduate student, he starts off with an alert account of the paradoxes of public rhetoric. "Deregulators like Enron always portray themselves as vigorous free marketers, but there is nothing invisible about their hands," Henwood notes in his book After the New Economy. "They spent millions on lobbying, and worked every level, from statehouses to the Senate." Then we get a brisk account of the political shenanigans surrounding Enron: a sparkling explanation of how Phil Gramm, the Texas Senator ably supported by the energy-trader, and  his wife Wendy, one-time chair of the powerful Commodity Futures Trading Commission and later Enron board member, talked about invisible hands while ensuring no one's hands touched their benefactor. In the tale of Enron, we have a microcosm for how the free market often actually works: a large corporation, under a loose regulatory environment, was allowed to run a large scale con game. Unlike the woes of poor Martha Stewart, the story of Enron illuminates what is genuinely wrong with our economic system. Despite the fact that Henwood never finished his doctoral work in English literature, his studies have not gone to waste. Aside from giving him an enviable command over language, Henwood's studies impressed upon him the interrelationship between culture and economics. The economic power of companies like Enron comes from the fact that they manipulate not only the market but also public discourse. As Henwood repeatedly shows, the "new economy" bubble of the 1990s was blown up by high rhetoric. Utopian visions of a new golden age were conjured up to tout stocks and sucker the public into going along with harebrained schemes. In order to understand why the boom went bust, we need someone like Doug Henwood to point out the discrepancy between the lavish promises and the tawdry reality. z Doug Henwood's newsletter Left Business Observer can be ordered at www.leftbusinessobserver.com National Post <A href="http://sea2fd.sea2.hotmail.msn.com/cgi-bin/compose?curmbox=F000000001&a=b175cb04e4fd459eaad65f26b495231e&mailto=1&to=jeetheer@hotmail.com&msg=MSG1085600890.16&start=1013610&len=8522&src=&type=x" target=_top>jeetheer@hotmail.com</A> </DIV></BODY></HTML>