In the early days of the current economic crisis, the Treasury Department demanded from the U.S. Congress a 700 billion-dollar bailout to buy up the “bad paper,” a term for all the junk assets owned by the banks and mortgage companies. Bad paper – the phrase is evocative, and one might be forgiven, while gazing at the stacks of unsold “bestsellers” on the display tables of the nearest Barnes & Noble, for imagining the CEOs of the Big Six publishing companies frantically scurrying to D.C. to demand their own big slice of bailout pie. After all, who could have more bad paper to unload than Random House, Simon & Schuster, HarperCollins Harcourt, the Time-Warner Book Group, the Penguin Group, and Macmillan?
In the weeks that followed, the sub-prime mortgage crisis became a credit crisis, the credit crisis a financial crisis, the financial crisis an international economic crisis – until finally the d-word loomed. Through it all, that phrase continued to ring in my mind – bad paper, bad paper, bad paper . . . A huge bubble of paper claims on profits whose value was not based on any tangible, productive assets, on any “really-existing” capital, had finally popped – a bubble of “fictitious capital.” Fiction again! Come to think of it, didn’t the word “credit” itself come from credare, the Latin for “to believe,” as if the financial system operated by asking from us the same “willing suspension of disbelief” that fiction asks of its readers? What was this sudden, weird synergy between the economy and fiction? Maybe the veils were finally being torn away from both, and just as the economy was turning out to be a fiction, so contemporary fiction was turning to be – having plummeted from the airy realms of Art – a thing of squalid calculation.
The crisis caught up with the publishing companies on 3 December 2008, a day which industry observers were soon calling Black Wednesday. Under the euphemism of a “staff reduction,” heads started to roll in all divisions of Simon & Schuster, while the Random House Group announced a major “restructuring,” consolidating less-profitable imprints in a move widely seen as a prelude to downsizing some of them and liquidating others. Houghton Mifflin Harcourt announced an unprecedented “buying freeze” – a hold on acquiring new manuscripts – and laid off a slew of employees, including several big-name editors. Not too many more days passed before Macmillan followed suit with big layoffs of its own. And the squeeze was being felt all down the line, affecting the distributors and major retailers as well, with the Border’s chain – Barnes & Noble’s main competitor – hemorrhaging money and foreseeing the shuttering of many of its stores and a radical “inventory reduction.” All of these euphemisms really pointed to one thing: unloading that bad paper.
Crisis has a way of accelerating social processes already under way. People are now beginning to talk about the disappearance of the current publishing regime and its replacement by a different model, one based more, perhaps, on Publishing-on-Demand (POD) technologies and the spread of e-books and e-book readers such as Amazon’s Kindle. Whatever happens, it looks like a major change is in the offing, perhaps has even been developing – under our very noses, so to speak – for some time. As Gramsci once wrote, “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.” Given that we are in such an interregnum, what morbid symptoms can we diagnose in the field of literature?
full text of "Bad Paper" here
(and thanks to Anirudh Karnick & Correspondence)