The Bat Segundo Show: Louis Hyman

Louis Hyman appeared on The Bat Segundo Show #443. He is most recently the author of Borrow.

[powerpress]

Condition of Mr. Segundo: Wondering why the banks don’t cut him off like the bartenders do.

Author: Louis Hyman

Subjects Discussed: How common American notions of cash and credit shifted in less than a hundred years, an alarming Freddie Mac ad involving magical gnomes, the history of mortgages, the 1930s mortgage crisis, mortgage-backed securities, whether American citizens can be held responsible for permitting corporations to seize control of the financial system, Jack Welch’s mass firing of employees and restructuring of GE, why the postwar economy was prosperous on credit, middle-class aspirations, top tax rates throughout American history, the reasonableness of a 91% tax rate on the wealthy, the rise of discount stores in the 1960s, the beginnings of Kmart and Target, Macy’s early resistance to credit, the inability to fight the revolving credit system during the 1960s, how specialty stores like Ann Taylor catered to the middle-class, why credit cards became necessary for the newly distributed economy in the 1960s, department store credit and credit cards, the beginnings of Master Charge (later Mastercard) and BankAmericard (later VISA), how the need to dress up if you wanted to go to a department store in 1961 helped encourage the rise of the discount store, the early cash-only success of The Gap in the 1970s through computer inventory, why college students should not have credit cards, how the Maruqette Supreme Court decision paved the way for credit cards, the near total decimation of anti-usury laws, the Constitution’s commerce clause, RICO, why Congress is reluctant to protect consumers, how South Dakota became the center for finance, market regulation, protecting consumers from bad decisions, the inability for most people to do the math on exorbitant credit rates, working people who become reliant upon credit cards, living paycheck to paycheck, William H. Whyte and budgetism, the difficulty of introducing regulatory mechanisms when so many people believe in unfettered personal responsibility, the creation of the Federal Housing Authority, the housing battle between James A. Moffett and Harold Ickes in the 1930s, marshaling the business class to fulfill social ends, Henry Ford’s opposition to the extension of credit, Ford vs. GMAC in the early days of auto loans, regulation and property rights, the duty CEOs say they have to maximize profit for their shareholders, Jack Welch’s invented heroism, investing pension in the right areas, the rise of the aerospace industry, the Chicago debacle of 1966 where bankers flooded the market with credit cards without thinking, the beginnings of FICO, desperate efforts by bankers to make banks exciting, John Reed risking his career at Citibank on credit cards, Joseph Miraglia‘s pioneering efforts to scam the credit card industry, the present social stigma on using cash instead of credit, credit cards and securitization, the savings and loans crisis, fair and transparent forms of securitization, why Murray’s Cheese can’t get a bank loan, and acceptable forms of Wall Street wizardry.

EXCERPT FROM SHOW:

Correspondent: You start this book with a late 19th century image of the fat and prosperous man who sold in cash and the skinny man who sold on credit. I think that more than a century later, it’s safe to say that those roles have now been flip-flopped. You also write, “In the era of the CMO, the smart bank could be like the Skinny Man, its vaults nearly empty, with a pile of IOUs in a nearby basket.” I have to ask you, Louis. You are the debt man. Why were so many people willing to place their faith in the supernatural qualities of the collateralized mortgage obligation? Your book describes a Freddie Mac ad that appeared in a 1984 issue of the American Bankers Association Journal which contained magical gnomes. And they frightened me when I saw that picture.

Hyman: As well they should.

Correspondent: So why were people willing to believe in gnomes? Is it possible for you to explain in plain English what in the hell a CMO is? And why did Freddie Mac even need a new financial instrument? Just to get this party started.

Hyman: Well, that’s about fifteen different questions.

Correspondent: Yes!

Hyman: I will start with the most important question.

Correspondent: Okay.

Hyman: Which is why did people want to put money into these mysterious supernatural instruments.

Correspondent: Gnomes!

Hyman: Yeah. Only the gnomes know. It’s hard to describe it over the radio. But it’s an image of gnomes advising the head chief financial officer of Freddie Mac and saying even he does not understand how these things work. Only gnomes know. It’s terrifying to comprehend that no one understood what they were doing. But the truth of the matter was that they knew what they were doing in that what they thought that they were doing. What they thought they were doing was taking together a bunch of risky things, combining it in different ways using magical alchemical transformations, and in the process they thought they were reducing the overall level of risk. And then they were making those sellable in the form of bonds to people who ordinarily would not buy them. To understand this, you need to understand the back history of mortgages and how they were financed and sold in America, which I’m very happy to talk about.

Correspondent: Feel free!

Hyman: And it’s what I talk about in the book before the time of the gnome hegemony.

Correspondent: Pre-gnome. More level-headed times.

Hyman: Yeah. Before the dwarven under kingdom began to rule us in the night.

Correspondent: Before investment bankers cleaved to the Return of the King appendix and started speaking in Elvic langauge.

Hyman: Exactly. So you need to understand that it used to be that it was very difficult to get loans in America of any kind. And that’s why I start the book off with that picture. Because the picture of the Skinny Man, who is nervous and afraid because he had lent on credit to his customers in his store. It was a picture that would be hung in a 19th century store. And the reason I start with that is because I think more than a graph, we are all besieged by numbers these days. More than a graph, it gets at the different mentality, the different practice of lending in the 19th century. That lending was something that was not profitable. It was something that in terms of cash loans wasn’t even legal. And yet today it’s the center of our capitalism. So how did that transformation happen?

So with mortgages, the story is a long one. And I’ll spare you the details. Though in the book, the details are quite intriguing, I hope. The basic idea is that, before the 1930s, you could get a mortgage from a local bank. They were very expensive and they tended to be funded by — they were balloon mortgages like we have today. We imagine that they were recent inventions. But they actually were commonplace in the 1920s. And they fueled the housing boom. Because they allowed people to pay only the interest every month on their mortgage. Which meant that they could buy more of a house. And the banks, in turn, would resell little bonds, mortgage bonds, to pay for all those mortgages going out. And so we have something like the mortgage-backed security is today. And with all that money from the investors, they could then lend to all these people to buy. Now the problem was, of course, that as soon as the stock market crash happened, all those panicked bonds people stopped buying bonds. All those panicked investors stopped buying bonds. And then suddenly the banks ran out of money to lend for mortgages and those balloon mortgages all came due.

Correspondent: We’re talking about the mortgage-backed securities period with the participation certificates.

Hyman: They were called participation certificates. That’s the technical term from the 1920s. And what happens is that suddenly they had to foreclose on all these houses and you have the housing crash of the Great Depression. It wasn’t because people lost their jobs as much as they lost their investors. Which I think is a really counterintuitive finding from what we think about when we think about the Great Depression. And so after this, the government creates the FHA. And the FHA and Fannie Mae together, what they do is they say, “Look, little bank. You can lend money to this home buyer. And then we will sell it to distant investors. Like in New York City.” So insurance companies, for the most part, bought these mortgages whole. The entirety of them. And then that money can be used to pay for a house in Texas. But these kinds of bonds, which fueled this wild, crazy, free-for-all kind of atmosphere in the 1920s — those went out of style. Investors didn’t want to buy them. Because they had all gone toxic. And the Fed actually prevented banks from using them at all. And so this period from the ’30s to the ’70s, they’re outside. They’re no longer in our economy. But the problem is that if you want to get more money into the housing market, you want people to have more money to invest in houses like they did in the late ’60s and early ’70s — predominantly to fund housing of the poor.

Correspondent: Section 235.

Hyman: Section 235. Correct. It’s as if you read a book recently on the topic.

Correspondent: Your book perhaps!

Hyman: Perhaps a book I am acquainted with. This money was to be used for that. And it was because they confused the cause for the effect in the postwar period. They looked around them. They saw on the one hand impoverished cities and, on the other hand, prosperous suburbs. And they thought, “Well, let’s make the cities like the suburbs.” And instead of realizing that the reason why the suburbs were prosperous was because of all the jobs that the well-to-do white people had, that made them prosperous, they thought, “Oh, it was just because of their houses.” They confused cause for effect. And they created this program to bring back the mortgage-backed security, which then these bonds could be sold to new kinds of investors. Not just insurance companies, but pension funds. To all kinds of people. And actually to these small banks, it turns out. They turned out to be the biggest buyers initially of these mortgage-backed securities. And so what you have is this system which actually collapses in a year or two under George Romney’s administration of the Housing and Urban Development. But the mortgage-backed security survives and becomes the new basis for our economy.

Correspondent: And they also use the term “participation certificate,” leaving one to wonder — at least this reader to wonder — why they would use the same name of a clearly failed idea.

Hyman: It had been several generations. And so they were vaguely…

Correspondent: People forget.

Hyman: People forget. They forgive. And they think that it would be different this time. Because they were tradeable in the secondary market, which the ones in the 1920s were not. They were born toxic almost in the 1920s. But they thought, “Well, these will be fine. They’ll be like FHA loans.” Which had worked for several generations. And actually they worked fine. The securitization worked fine for a long time. From the mid-1970s on for about thirty years. They worked fine.

Correspondent: Just as the participation certificates worked fine until things started to happen.

Hyman: Until things fall apart. Things work fine until they fall apart. That’s how it is. You survive every accident you have until the one that kills you.

Correspondent: So why do these financial people, who should know this — because the historical examples repeat and repeat and repeat — why are they so short-term in their thinking when they consider credit ideas or debt ideas? Or even the extension of credit? I mean, this is what gets me. That nobody seems to have a memory longer than a few years. It’s like, “We’ve got some money! We’ll go ahead and blow it!” I’ll get into the hilarious Chicago credit card thing in a bit, which I thought was funny. But also remarkably short-sighted.

Hyman: No. It is really surprising. I think people are just intoxicated by reason. They think that if a model works, then it will work in the real world too. But the way things work on the ground and the way things ought to work can be quite different. And I think that’s one of the lessons of all of this. That we should trust our experience more than our thinking on some level. Our thinking can be wildly off. Everything made sense. But when you look at the models that people actually use for all this kind of lending, they only use three or five years of data. They don’t even use a full business cycle. And they did that because that was the data that they had.

Correspondent: Well, I guess the question here is: we are looking at this from the vantage point of financial people. The question I have is whether American citizens can be held accountable for some of the problems that occurred. To what degree should they be held responsible for borrowing, believing, going ahead and taking the extension of credit options that were given to them so that they could live their middle-class lifestyles? Does historical precedent reveal that our parents and our grandparents are victims of various strains of predatory lending? Or is it really these middle-class aspirations? How do we look at this?

Hyman: Our grandparents lucked out. So if you look at the actual Federal Reserve data, you see that people began to borrow like crazy after World War II. But what was different was that they actually had good jobs. And they were able to pay back all those debts. So the amount of borrowing goes up. But so does the amount of repayment. So it looks like no one’s borrowing.

Correspondent: Sure.

Hyman: But they’re actually using car payments for their big-finned cars. They’re using mortgages for the suburban housing. They’re using charge-a-plates at the mall. They’re doing all kinds of things that require debt. Now are they better people than us? No, they just live in a different time. So that today, it’s very difficult to have the same job over your entire life. That kind of job security is no more. Wages have stagnated for forty years for average people. And people get sick. They lose their job. And they’re stuck with these bills. So they have credit cards to fall back on. Though I don’t think it’s the people who have gotten dumb or become immoral. I think it’s that the world around them has changed.

Correspondent: But when one considers such transitions as Jack Welch’s decision to move GE’s resources from manufacturing capital to financial capital, and essentially eliminate jobs that give people money that allow them to purchase goods that allow them to perpetuate an economy, the question is…

Hyman: Are we responsible for that?

Correspondent: Are we responsible for that?

Hyman: Yeah. I think on some level we were fools to let this happen.

The Bat Segundo Show #443: Louis Hyman (Download MP3)

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The Bat Segundo Show: Catherine Chung

Catherine Chung appeared on The Bat Segundo Show #442. She is most recently the author of Forgotten Country.

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Condition of Mr. Segundo: Wondering if he left his car keys in Korea.

Author: Catherine Chung

Subjects Discussed: How Forgotten Country emerged from multiple stories, finding inspiration from disappearance, mysterious ghost monks that couldn’t float their way into the narrative, getting to know a character’s family by telling other stories, bad fictional boyfriends, Korean American identity as seen through reflection, character depth that springs from an aesthetic, how Chung keeps her characters separate from her identity, drawing from emotional experience, the difficulties of finding details in grief, losing your parents, giving additional details to personal experience, loneliness expressed as a dialogue between author and characters, growing up in the Midwest, “Chinaman Costumes,” racist products sold at chain stores, being surprised by people speaking against injustice, first-generation Korean Americans and second-generation Korean Americans, being bullied while growing up, being pushed into a brick wall, how schools used to react to bullying, dwelling on childhood incidents, moving around a lot as a kid, not being accepted, changing perceptions of bullying over the past few decades, grief as a way of understanding cultural identity, “From the Ruins,” whether any city or location can offer true respite, escaping to Leipzig, poorly buried corpses during the Korean War, animal-based mythology, how the subconscious fits personal anecdotes into fiction, unanticipated symbols which emerge in life, paying attention to things that seems like signs, the burdens of an analytical subconscious, finding the mathematical precision within sentences, Chung’s math background, the messier process of half-formed thoughts, the difficulties of not knowing, whether or not block is productive, obsessively circling a problem, Csikszentmihalyi and flow, using the least amount of words possible in a sentence, being concerned with a readership, how style is shaped through unexpected means, abuse and ambiguity, the creative showdown between God Cathy and Janie’s Voice, the troublesome results of divine creative intervention, and control in fiction and in life.

EXCERPT FROM SHOW:

Correspondent: I know that Forgotten Country emerged from a number of different stories that you were working on at the same time. You have, of course, this idea of the boy falling out the window, which is at the very beginning. The mysterious hermit girl who crops up later in this book. And then you also have this story that was inspired by your father’s sister, who disappeared when you were a child. It’s really interesting to me that, first of all, these stories fused their way together into a novel and that, secondly, this came before this massive family unity of complicated relationships. So I’m curious, first and foremost, if you could describe how these stories came together in novel form and how you were able to fuse them together, and whether you needed some of these orbiting asteroids to circle around and become the planetary family unit.

Chung: Yeah. Well, you make it sounds as if I did it so intentionally.

Correspondent: (laughs) No, it never is intentional, of course. But I’m wondering how the connections came about.

Chung: Yeah. I think that they came about after a lot of time. There’s one character telling all these separate stories. And that’s what linked them. I didn’t really know what they were doing with each other or how they were related. There are other stories that were also in this book that eventually dropped out.

Correspondent: Oh really? Like what?

Chung: So there was a flying ghost monk.

Correspondent: Really?

Chung: Yeah. He was eradicated fairly early on. But he was totally in there and for a long time, he was carrying a great deal of weight in terms of just the number of pages.

Correspondent: That’s quite a feat, given that he was a ghost.

Chung: Yeah. He was a ghost. He was on a trek to find his lost daughter. And that was one of those stories I realized in my mind was related to the other three stories, right? Because all those stories are about loss and about trying to find what’s been lost once you’ve moved on. It’s almost impossible to do that. But in terms of the narrative arc, he didn’t work. And part of the reason he didn’t work was because the main narrator really was Janie, who was the protagonist and the narrator of the novel. Because he was carrying on his own story and I thought, “Well.”

Correspondent: You can’t very well have him being narrated by Janie.

Chung: Yeah. And in my mind, he was related. But in terms of the book, he didn’t fit.

Correspondent: So how then did the family come about if Janie was the narrator for these three stories?

Chung: Ah! Because she’s totally preoccupied by her family.

Correspondent: Oh, I see. In the act of telling these other stories, you got to know her family.

Chung: Yeah! That’s exactly right. These are the stories that I was really interested in. But the other stories that she was also interested in, I had to create a character who could tell these stories. But I think that she was interested in these stories because of the light they shed on her own experience. And as she told these stories, she’s sort of a secretive, hard-to-get-to-know person. So these were the stories that she wanted to tell. But then there were these underlying stories of her own life that came to play as she was telling them.

Correspondent: And allowed you to work out the connections with the sister, with the aunt, and so forth. Well, this leads me to wonder, did you have the competitive relationship between the sisters in place before the father-daughter relationship? Which of those came first?

Chung: Which of those came first? I think that the father-daughter relationship came first. Hannah’s disappearance came first.

Correspondent: Of course.

Chung: It was the absolute first thing to happen. But their competitive nature came as I was discovering why Hannah would leave and why it would be difficult to find her. I discovered what their issues were.

Correspondent: It’s interesting that competitiveness would come from disappearance. (laughs)

Chung: Yeah! And I think that the competitiveness also arose not early on in the novel — but I think Janie gets jealous with all the attention that’s focused on Hannah while she’s missing.

Correspondent: You were mentioning ghosts earlier. We’re talking about disappearance.

Chung: Yeah.

Correspondent: I’m wondering if subtraction might in fact be the way for you to pinpoint what a story or what, in this case a novel is all about.

Chung: That’s a really interesting point. I think that a lot of what I’m interested in and a lot of what I focus on is what’s missing or what’s longed for. Or what’s gone.

Correspondent: Were there any instances when you were writing this where you simply had too much and you had to remove an element? I mean, we were talking earlier…

Chung: Like a flying ghost monk.

Correspondent: Like a flying ghost. Or a character perhaps. Or some angle that just didn’t allow you to get that emotional precision that I think is there throughout the book.

Chung: Yeah. I was thinking the other day just about how many pages I removed. And I would say the book is about 300 pages, but I think I must have deleted at least six or seven hundred. Probably more like a thousand as I was going through the drafts. So entire storylines fell out. Like the flying ghost monk. There was a character. Janie’s love interest also ended up getting cut out.

Correspondent: Oh, I see.

Chung: And so as I went…

Correspondent: Is this the guy in college? Or just another love interest?

Chung: No, it was another love interest.

Correspondent: Oh! Another love interest!

Chung: There was another.

Correspondent: What was he like?

Chung: What was he like? Well, you know, I think he wasn’t all that interesting. Which is why I took him out. He wasn’t really holding his weight. I realized it wasn’t about him.

Correspondent: Well, I also wanted to ask about Hannah. The thing that’s fascinating to me about her is that she almost seems like a reflection of Janie. I mean, I think specifically about the scene in the hotel elevator, where Hannah follows her in and is essentially tailing her and mimicking her. And then you also have Hannah, which is a palindrome.

Chung: Yeah.

Correspondent: But also you observe of her at another point in the book, “how strangers, even adult men, would pause in the street to look at her, and how easily she held their attention.” So she’s also, on the other hand, resistant to Korean food. Which leads me to also wonder if her reflective nature came to mimic the idea of America or an American identity mimicking the original Korean identity that Janie has. And I’m wondering if you could talk about if Hannah came from almost a reflective pool from dwelling on Janie like this.

Chung: That’s such an interesting question, and one I haven’t heard yet. But I think that’s exactly it. Or at least that’s the source or the core of Janie’s resentment to Hannah. I think that because Hannah not only reflects Janie, but also gets to do some of the things that Janie doesn’t get to, but would like to, Janie feels that that’s been taken from her. That she only gets to be a certain kind of person because Hannah has already taken this other part of her. This reflection, exactly as you’re saying, is reflecting some part of her that is also slightly different. And so Janie is very competitive and jealous about that. But I also think that that link that you made to how her Americanness is a reflection of how her Koreanness could be a reflection is also very interesting. Because of the ways in which people change or mimic each other or come to copy an idea of what they should be. So, yeah, those were things that were with me the whole time that I was writing this book. And I just think that it’s really cool that you picked up on that.

Correspondent: But when you considered Hannah, did she first come to you as this aesthetic person? And did you need to flesh her out by this reflective thing we’re talking about? By imbuing in her some sense of her being looked at by other people? By people who were not, in fact, Janie?

Chung: Maybe. And I think that the thing that I kept getting caught on with this question is that I have often thought of both Janie and Hannah as reflections of parts of myself as well.

Correspondent: Yes. Of course. They’re your secret sisters. (laughs)

Chung: Yeah! Who live inside my head. But I was interested in Hannah as the object of attention, right? As a kind of reflection. And I think part of Hannah’s problem is that it’s hard for her to — and Janie’s problem as well — it’s for them to think of themselves, or they get tripped up on the way that they’re being looked at by other people. And it’s hard when you see yourself as a reflection. Because then what are you?

The Bat Segundo Show #442: Catherine Chung (Download MP3)

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The Bat Segundo Show: Hari Kunzru, Part Two

Hari Kunzru recently appeared on The Bat Segundo Show #441. He is most recently the author of Gods Without Men. This is the second of a two part conversation. The first part can be listened to here. But I’m afraid that This American Life isn’t the only program forced to issue a retraction. We’ve discovered that one of our longest conversations contained numerous extensions. This week, we detail this deeply troubling problem in the first few minutes of our program before carrying on with the second part of the Kunzru conversation.

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Condition of Mr. Segundo: Unpacking the complexities.

Author: Hari Kunzru

Subjects Discussed: David Mitchell, Kenneth Goldsmith, Tom McCarthy, what is considered valid artistry in 21st century literature, connections between Mitchell’s Cloud Atlas and Calvino’s If on a Winter’s Night a Traveler, Bolaño’s 2666, narrative and functional strands, reviews of Gods Without Men, compromises with editors, Chad Harbach’s The Art of Fielding, publishing job duties, Mark Danielewski’s House of Leaves, rejecting the inclusion of glossaries, editions of books that Kunzru isn’t satisfied with, visiting Michael Moorcock in 2010, what Kunzru takes away from genre, the division between genre and literature, China Miéville, genre fiction that pretends, prizes given to disreputable fiction, postmodernism and the detective novel, science fiction as a method of conceptual confrontation of current trends, simulated worlds, the problems with conventional characters, playing role-playing games, Moorcock’s multiverse, getting the non-Mike people into Moorcock’s work, Moorcock and JG Ballard, a number of very geeky Moorcock references, physical locations, travel writing, writing impressionistic accounts in hotel rooms, the downside of purple lilac hotel room interiors, being close to a location to write about it, Burning Man as a business expense, skepticism about utopias, the literary value of dust storms, knowing what you’re doing before walking across desert country, mysticism, geodesic domes, avoiding certain words, imposing linguistic limitations, Kunzru’s affinity for technical vocabulary, Mormon religious terms, finding the truest deities within computers, Kunzru’s first computer, the ZX Spectrum, the Timex Sinclair 1000 vs. the Timex Sinclair 1500, early efforts to use networks, cradle modems and university computers, Lunar Lander, Adventure, Kunzru’s early efforts to write a Pynchonesque novel, not desiring to be a professional philosopher, the Conspiracy Nation newsletter in the early Internet days, connecting with the world of weirdness from your desktop, Kunzru’s days at Wired, journalism as a way into fiction, the network as a primary form for understanding culture, resolving a ridiculously pedantic pissing match between @drmabuse and @harikunzru, the results of Kunzru’s social media experiment, literary journalists, Jami Attenberg’s report on Jonathan Franzen, Twitter as a way of finding who your people are, the importance of writers getting involved with non-literary interests, how a secular writer can persuasively approach the issue of faith, the relationship between freedom of religion and freedom of expression, doubt as an ethical position, reading The Satanic Verses at the Jaipur Literature Festival, and being better friends to the believing Muslim.

EXCERPT FROM SHOW:

Correspondent: So what then, Hari, do you make up when you write a novel? I mean, I also detected, for example — I saw at least two David Mitchell nods. Not just “Segunda,” which of course I have also plucked. But also there is an early incident with Nicky in which he complains about the waiter not understanding that he’s saying “water,” which I’ve heard David say a couple of times.

Kunzru: Oh really?

Correspondent: Yeah. And I was thinking, “Oh! Now I know they’re friends.” (laughs)

Kunzru: Yeah.

Correspondent: But I am curious about this idea of plucking almost everything from other incidents. Is this something you can help? Do you make shit up to combat that in any way? To keep it real or to keep it authentic? Or do you not even care?

Kunzru: I simply think that you’d be lying if you said everything — let’s see. There’s various positions. On one end of the spectrum, it’s that people like Kenneth Goldsmith and Tom McCarthy would say, “We’re at the end of this tradition. We’re playing in the ruins. The only valid artistic act is a kind of reconfiguration of existing material.” You know, I frankly that’s much easier to say as a straight white guy. Because you’ve had two thousand years of airtime.

Correspondent: (laughs)

Kunzru: Maybe you feel that’s all there is. But actually I think we’re in a moment where there is a lot that’s genuinely new and there’s a lot that’s genuinely unsayable. So, however, my experience of the world isn’t of this kind of wonderful, sort of romantic notion of the primary creation out of nothing and that the extraordinary poetic mind of the creator shaping raw material into art — that simply is not an accurate description of the pragmatics of making literary art. Is it important to distinguish one kind of thing from another? Only when the lawyers turn up. I think any literate person these days is literate in a way which encompasses the notion of source and secondariness. And in words: bad writers borrow, good writers steal. You can make something your own. David Mitchell’s project is interesting. We are friends. I’m friends with Tom as well. And I have productive conversations with these guys about it. I mean, Dave is a much more orderly character than me, I think. A lot of people — mostly because Dave’s blurbed my book; so that’s very nice of him. But Cloud Atlas, to which various people have connected Gods Without Men, is a very different project. That’s a response to Calvino’s If on a Winter’s Night a Traveler, where Dave just could not stand the fact that all these stories opened and then didn’t close. And he made this very beautiful, nested structure, where the stories open, open, open, open, open, center, close, close, close, close, close, end. And that’s one way of seeing the world. And it’s a very formally perfect thing. And it allowed him to show that he’s head and shoulders above most other people working today. As I said before, I’m more interested in breaking that formal perfection and allowing silence. A model I had for this book was Bolaño’s 2666, where there are these very big — three, four very big slabs of narrative. They seem as you read to have no damn connection to each other at all, but gradually, in this almost ineffable way, they start to vibrate in harmony with each other. And it becomes clear that this is a work. I admired that so much.

And also, I think, given that plot at this point is taught everywhere. I mean, I’ve been in some screenwriting lately. You know, this world of the three act structure and this has to happen at this point. It’s those wonderful little clockwork things that you can make out of plot. And the only way of breaking out of that slightly clockwork feeling is literally by breaking out, by making openings, by making strands where things are not functioning as they are expected to function. And it’s been quite a pleasure to see that, in both the US and the UK, the reviewers who have not fundamentally liked this book have all, despite themselves, basically — I mean, Michiko Kakutani did this in the New York Times today; I was just reading her review. They all say, “Why was this not tied up properly? Why did he not concentrate on the straight story of this couple and their child? Why is this imperfectly integrated material been introduced in the book?” And that’s the project. And that’s where I find interest.

Correspondent: The Millions also accused you of doing too much style.

Kunzru: I mean, fair enough. I will never be a kind of cool writer in a certain sort of way. I don’t…

Correspondent: In a literary sort of way?

Kunzru: In an affectless sort of way.

Correspondent: A plain, hardboiled realism degree of fiction?

Kunzru: You know, I feel I have a reasonably nailed down and possibly even cynical view of human relations. But just in terms of writing prose, I like the idea of pretending to be an 18th century Spanish dude. And I like to do the different voices. And that’s the opposite of a certain sort of literary call. I read a lot of post-writing school American fiction in particular, which I find painfully self-conscious because it’s very scared of being uncool. It’s very scared of what might look like style, what might look like showing off, or what might actually look like fun. And it adopts a kind of Carver, who’s obviously the big — you know, all the sentences are stripped down. The most emotional moment is the downfall at the end. I mean, this stuff is now being put out by the yard. Because it’s become a kind of MFA staple. I think it’s what happens when a bunch of hyper-conscious 25-year-old MFA students critique each other in a room for too long. It’s that acute self-consciousness, which I think you’ve got to lose. You need to basically be able to make yourself look slightly ridiculous to be a writer. You need to ideally make yourself look a bit ugly. I mean, there are writers I admire because they can be unlikable on the page and because that’s interesting to me.

Correspondent: I agree with you. But I think we’ve seen a shift — especially from the agents and the editors. I mean, I have heard this. Editors are saying, “You know, all the novels that I get tend to hit these same notes.” This problem we’re talking about. This fear of offending. This diffidence when it comes to chronicling unlikable characters or unlikable perspectives. On the other hand, when you have agents as gatekeepers, who are preventing those types of desired perspectives from actually hitting into publishers and you’re also dealing with the need to get a return on revenue, I mean…

Kunzru: It’s structural, isn’t it? You can’t just blame the writers. You have to blame the way the industry is structured. And there are many, many ways which make books — I haven’t read Chad Harbach’s book yet. But it’s very interesting to me that that book was given the keys to the kingdom very immediately. My partner, the novelist Katie Kitamura, is reading it and, at the moment, has found it very unsatisfactory. I mean, there’s a kind of prose that is deemed by the gatekeepers to play in the Midwest.

Correspondent: Yes.

Kunzru: And hence kind of gets through. And this structural stuff — I can’t have a book that looks like I want it to look. I mean, the physicality of my book is not under my control because the publishers have certain job descriptions. There’s an art director. There’s a designer. I mean, my books would not look like the published objects that they are. Those objects should be considered as compromises. You know, you fight for the kind of cover that you feel you want. I mean, my visual taste is not always the visual taste of my publishers and my editors. In terms of font. In terms of spacing. Let alone if you were to point to really fooling around with formal stuff or you wanted to try and open your book in some way that wasn’t the traditional novel. All these things exclude certain types of things you can do with writing and make the novel look like the novel looks now. And I don’t know whether it’s fixable. Because in a way, I’m kind of into the idea that, as a writer, you’re in this very impure situation. My gallery artist friends are shocked by the lack of control I have over the presentation of my work. Because they’re able to control minutiae. Because they’re just trying to sell six things to six very wealthy dudes. You know, I’m trying to sell six thousand — hopefully more than six thousand — to many, many people. So there is this point. You’re in the market. You’re in this very, very different kind of aesthetic world. And yet you’re trying to make art in this situation. And it’s an interesting one.

Correspondent: But what do you do? Do you pull a Mark Danielewski? Do you go to Random House and sit in a carrel for three to four weeks and say, “I know exactly how this novel should look”? I mean, if you have to compromise on these levels, I’m curious also — narrative-wise, textually-wise — what compromises do you make to keep this real?

Kunzru: I know. I think that’s really a very personal question for each writer. You have different things that are redlines and things that aren’t.

Correspondent: But what are we talking about?

Kunzru: Well, I mean, I give completed drafts to an agent, an editor, a couple of other people, and I listen when they say, “I don’t understand why this is happening.” So even if I think something is clear, and I think it’s not communicating to that extent, that’s when I’ll change. I don’t know if that counts as compromise. I dug my heels in structurally on this book — in that there was a point of view that I should cut certain sections and that I should give more help, tie up more neatly. And that was precisely what I didn’t want to do. Same with previous books. I mean, I was asked to put a glossary into The Impressionist. But I figured that would be a way of saying that this book is for non-Indian readers rather than for Indian readers who will already know these words and I had written in a way where I thought that all the Hindi and slang words and stuff would be understandable from context. So I said no to that. Where do I compromise? I have ended up compromising on all the visual stuff. I’ve never really beyond a certain point tried to impose. I mean, publishers have house styles in terms of fonts. I’ve never really tried to fight my corner very hard in that.

Correspondent: Can you ever be happy with the final way that the book looks and feels and is?

Kunzru: I like some of the books that are out under my name. The objects that are under my name. I mean, I’d say that there are editions that I’m embarrassed to carry around.

The Bat Segundo Show #441: Hari Kunzru, Part Two (Download MP3)

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Mike Daisey Lies on This American Life; Theaters Won’t Cancel Performances or Issue Refunds

On Friday afternoon, Mike Daisey, the monologist who appeared on This American Life earlier in the year to report on apparent abuses of Chinese workers at Foxconn, was revealed to have fabricated and conflated substantial details of his story. Daisey’s lies and errors had proven so severe that This American Life devoted an entirely new episode to clearing up Daisey’s story.

Daisey’s tale, which was an excerpt from his one-man show The Agony and the Ecstasy of Steve Jobs, had helped to shape many people’s feelings about Apple. Apple had relied upon its supplier, Foxonn, to manufacture its line of iPhones and iPads. And while an independent investigation from The New York Times earlier this year also revealed unsafe working conditions at Foxconn, there remain significant doubts over whether much of what Daisey has stated on stage and on air is true.

“As best as we can tell,” said host Ira Glass on the new episode of This American Life, “Mike’s monologue in reality is a mix of things that actually happened when he visited China and things that he just heard about or researched, which he then pretends that he witnessed first-hand.” Glass went on to say that he had taken Daisey at his word and that he saw no reason to doubt Daisey. “I can now say in retrospect that when Mike Daisey wouldn’t give us contact information for his interpreter, we should’ve killed the story rather than run it. We never should’ve broadcast this story without talking to that woman.”

Rob Schmitz, a Marketplace correspondent in Shanghai, was able to track down “Cathy” — Daisey’s interpreter for the piece, whose real name is Li Guifen but who also goes by the name Cathy Lee — by putting the terms “Cathy,” “translator,” and “Shenzhen” into Google. He called the first phone number that came up. Cathy Lee did not know that Daisey had used her in his show. She thought that Daisey was merely an American writer.

Hers is a list of Daisey’s lies uncovered on the program:

  • Daisey claimed that the Foxconn guards at the gates had guns. Schmitz said that, in all of his years of reporting, he had never seen guards with guns. “The only people allowed to have guns in China are the military and the police, not factory guards.” This was corroborated by Cathy Lee, who told This American Life that she had never seen a gun in person.
  • Daisey claimed that he met with workers “at coffeehouses and different Starbucks in Guangzhou.” Schmitz pointed out that it was unlikely that factory workers who made fifteen to twenty dollars a day would sip coffee at Starbucks. Because Starbucks is pricier in China than in the United States.
  • Daisey claimed that he talked to hundreds of workers. Cathy Lee said that it was 50 workers on the outside.
  • Daisey claimed that he posed as a businessman to get inside Foxconn’s factories. In fact, Daisey’s appointments were all set up in advance.
  • Daisey claimed that he visited ten factories Cathy Lee told This American Life it was only three.
  • While Apple’s own audits have revealed some underage workers (a total of 91 workers among hundreds of thousands in 2010), Cathy Lee revealed that Daisey had not met any underage workers during his trip. “Maybe we met a girl who looked like she was thirteen years old, like that one. She looks really young,” said Cathy Lee. “I think if she said she was thirteen or twelve, then I would be surprised. I would be very surprised. And I would remember for sure. But there is no such thing.” In the ten years that Cathy Lee has visited factories in Shenzhen, she’s hardly seen any underage workers.
  • Daisey claimed to meet twenty-five to thirty workers from an unauthorized union in an all-day meeting. The meeting did happen. But it was two to three workers, and the meeting was only for a few hours, over lunch at a restaurant.
  • Cathy Lee has doubts about the government-issued blacklist of people who the companies weren’t allowed to hire. While she remembers the blacklist, she says that it didn’t have an official government stamp, which any government-issued document would have.
  • Daisey claimed that he encountered people who had been poisoned by n-hexane, with their hands shaking uncontrollably. But Cathy Lee told Rob Schmitz that she and Daisey hadn’t met anybody poisoned by hexane. The story came from news in 2010, but the hexane poisoning occurred in a Wintek family in Suzhou, nearly a thousand miles away from Shenzhen.
  • Daisey describes an old man who got his hand twisted in a metal press and who has never seen an iPad turned on. In Daisey’s monologue, the old man says, “It’s a kind of magic,” when the iPad’s screen is turned on. Cathy Lee said that this never happened. “It’s just like a movie scenery,” she said on the program. She did say she remembered the guy, but that he never worked at Foxconn.
  • The taxi ride on the exit ramp that ended in thin air 85 feet from the ground? Cathy Lee said that it did not happen.
  • Cathy Lee said that she and Daisey never saw any factory dorm rooms.
  • Daisey claimed that it would not work if he talked with Foxcon workers at the gate. But Cathy Lee has been taking workers to the factory gates for years.

In the fact-checking process, Daisey repeatedly lied to Glass and Schmitz. He initially told Glass that he met with 25 to 30 illegal union workers. When pressed by Glass and Schmitz, he knocked the number down to ten. Cathy Lee said it was really between two and five.

“Why would Cathy say that you did not meet any underage workers?” asked Schmitz on the program.

“I don’t know,” replied Daisey. “I do know that when doing interviews a lot of people were speaking in English. They enjoyed using English with me and I don’t know if she was paying attention at that particular point.”

When pressed further by Schmitz, Daisey claimed to have “a clear recollection of meeting somebody who was thirteen years old” and with another worker who was twelve years old.

“But none of them said they were twelve, right?” countered Glass. “The others didn’t actually give their ages and you’re just kind of guessing.”

“That’s correct,” replied Daisey. “That’s accurate.”

When confronted about the invented hexane workers on the program, Daisey could not actually confess that he lied.

“I wouldn’t express it that way,” said Daisey.

“How would you express it?” asked Schmitz.

“I would say that I wanted to tell a story that captured the totality of my trip. So when I was building the scene of that meeting, I wanted to have the voice of this thing that had been happening that everyone had been talking about,” replied Daisey.

“So you didn’t meet any worker who’d been poisoned by hexane?” asked Glass.

“That’s correct,” replied Daisey.

* * *

Daisey told The New York Times in 2006 that he “once fabricated a story because it ‘connected’ with the audience.” That same year, Daisey performed a one-man show called Truth: The Heart is a Million Little Pieces Above All Things, which used James Frey and JT Leroy as inspiration. As Variety wrote at the time, “Daisey comes to a judgment that is strict but sympathetic; he suggests that if people are often the least reliable narrators of their own lives, they are also sometimes the most engaging.”

When I contacted theater companies on Friday afternoon, it was evident that they were more taken with the “engaging” nature of Daisey’s show rather than its veracity. DJ from New York’s The Public Theater informed me that the three remaining performances of Daisey’s show scheduled on Saturday and Sunday were still on. There were no plans to cancel.

But what of theatergoers who might have believed that Daisey’s story is real and who booked tickets in advance of these allegations?

“We don’t offer refunds,” said DJ.

Burlington’s Flynn Center will not be canceling Daisey’s March 31st show. The spokesperson and I have been playing telephone tag. [SEE 3/19/12 UPDATE BELOW FOR ADDITIONAL FLYNN CENTER DETAILS.]

When I contacted Emily Weiner at the D-Crit Conference, where Daisey is scheduled to speak on May 2nd, I was apparently the first person to inform Ms. Weiner of the news. There was nobody available to issue an official statement.

I was also the first to inform a very friendly woman at the Emmett Robinson Theater of Daisey’s fabrications. I left a message with Jesse Bagley, the chief contact person at the Spoleto Festival in Charleston, where Daisey is scheduled to perform from May 31st to June 6th.

The best response I was able to get was from Brooke Miller, Press and Digital Content Manager and designated spokesperson for the Woolly Mammoth Theater Company. Daisey is scheduled to perform at the Washington, DC theater from June 17th to August 5th. After getting Miller on the phone, I was told that there would be no refunds or cancellations. When I pressed Miller further on what circumstances might cause the theater to issue refunds or cancel, I was simply told that the show was “constantly changing.”

Woolly Mammoth even expressed pride in Daisey’s work. In an official statement sent to me via email, Miller called The Agony and the Ecstasy of Steve Jobs “a daring work of theatre that opened people’s eyes to some of the real working conditions in Chinese factories where high-tech products are manufactured–conditions which have been documented by subsequent journalistic accounts in The New York Times and other sources. It’s a core value of Woolly to present works that spark conversation around topics of socio-political importance, and we’re pleased to have played a part in bringing these issues to national attention. We look forward to welcoming Mike back for an encore performance of the show this summer.”

3/17/2012 1:00 PM UPDATE: The Public Theater has released this statement (PDF) in response to Mike Daisey:

In the theater, our job is to create fictions that reveal truth — that’s what a storyteller does, that’s what a dramatist does. The Agony and the Ecstasy of Steve Jobs reveals, as Mike’s other monologues have, human truths in story form.

In this work, Mike uses a story to frame and lead debate about an important issue in a deeply compelling way. He has illuminated how our actions affect people half-a-world away and, in doing so, has spurred action to address a troubling situation. This is a powerful work of art and exactly the kind of storytelling that The Public Theater has supported, and will continue to support in the future.

Mike is an artist, not a journalist. Nevertheless, we wish he had been more precise with us and our audiences about what was and wasn’t his personal experience in the piece.

3/17/2012 7:30 PM UPDATE: Out of Focus‘s Aaron Dobbs was at this afternoon’s 2:00 PM performance of Mike Daisey’s The Agony and the Ecstasy of Steve Jobs and reported the following on Twitter:

The Associated Press’s Mark Kennedy also confirms that Daisey has added a new section at the beginning in which he addresses questions raised by critics. According to Kennedy’s report, Public Theater artistic director Oskar Eustis said that Daisey “eliminated anything he doesn’t feel he can stand behind.” Eustis called the prologue “the best possible frame we could give the audience for the controversy.”

3/18/12 2:00 PM UPDATE: Mike Daisey has posted an audio file of his new opening prologue. You can listen to the file below:

Mike Daisey — New Prologue (Download MP3)

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Here is a transcript:

Good afternoon. I wanted to take a second before we do the show. Because I wanted to let you know that This American Life is airing an episode this weekend that calls into question the veracity of some of the personal experiences that you’re going to hear about in this monologue. And I want you to understand that what’s being called into question is the personal experiences. The facts of what the situation is in China in manufacturing are undisputed. And they’re reinforced by The New York Times, CNN, NPR, all these organizations have gone and done the hard journalism that’s necessary. When you leave here, if you feel interested, I’d really urge you to go out and read about those things. But I wanted to let you know that I stand behind this work. And the work you’re going to see today has had changes made to it. So that we can stand behind it completely. And, uh, includes this controversy in it, so that you can have a full picture and you can do what you want with it. Because I believe that as an audience that’s your role — is to determine how you feel about the art you take in. You will make those determinations for yourselves. When the lights go down here, I will go backstage. When I come back out, the lights will come up on the stage and I will be telling you a story. And that’s the oldest form of theater, you know. When the light comes on to the stage, I assume that role where I am speaking. We use these tools that the Greeks invented so long ago to try and communicate. The whole attempt is to try to shine a light through something and get at the truth. The truth is vitally important. I believe that very deeply. And I, uh, have come here today to set this up. Because I think context is utterly important. And so some of you are like, “Ah yeah.” Some of you are like, “I have no idea what any of this is about.” (audience laughter) But thankfully because we live in such a wired and connected world, I would ask that you not look up the controversy on the Internet while the show is actually going. (audience laughter) Small…just a small request. There’ll be time enough after it’s over. (audience laughter) Um….I’d like to thank you all so much for coming. And I do hope you have a great show. Thanks. (audience applause)

3/18/12 11:00 PM UPDATE: CNET’s Greg Sandoval collected audience reactions from Daisey’s remaining shows at the Public Theater. In his first filed story on March 18th, Sandoval describes professor Alan Zimmerman complaining last night to the theater about Daisey’s lack of credibility. “He misled the audience about what occurred,” said Zimmerman. “I’m disappointed.” In Sandoval’s second story (only just filed), he reports that Daisey’s last performance at the Public Theater received a standing ovation. “It was a great performance,” said one audience member. “He really makes you think.”

3/19/12 12:00 PM UPDATE: This morning, I spoke by telephone with John Killacky, executive director of the Flynn Center, who was very gracious with his time. He informed me, as previously reported, that the Flynn Center is going ahead with the March 31st performance of The Agony and the Ecstasy of Steve Jobs. Killacky was sufficiently satisfied with the added prologue and the minor changes in the script, and had been in touch with Daisey’s agent and publicist over the weekend.

“The fascinating part of it,” said Killacky, “is that both Ira Glass and reporters from Marketplace are saying the facts are correct. And what’s wrong with it is that it’s not first person.”

Killacky felt that the show would still remain compelling for audiences, telling me that one of theater’s essential roles is “to promote dialogue.” To this end, Killacky tells me that he may work in a post-show dialogue with Daisey on stage. He also said that, unlike the other theaters I talked with, he planned to issue refunds for anybody who felt taken in by Daisey’s material.

I asked Killacky if he had reviewed the informational sheet that Daisey is handing out to the audience after the show. He said that he hadn’t. I then asked if he had considered offering a secondary sheet of This American Life‘s findings, so that the audience would have enough information to make up their minds. There were no plans as of Monday morning.

“I think what’s important here is that people experience the work itself,” elaborated Killacky. “Did Mike make mistakes? Yes. He admitted and then he apologized, I thought. I’m not sure that invalidates him as an artist. In fact, it doesn’t invalidate him as an artist.”

3/19/12 12:30 PM UPDATE: Gawker’s Adrian Chen was also taken in by Mike Daisey last year — after he began doing some fact-checking on Agony. He relates that he met with Daisey, “as intense in person as he is onstage, though more piercing than the loony American Abroad persona he’s cultivated for The Agony and the Ecstasy,” and he confesses to being duped by his charisma:

Throughout our interview, he’d been so convincing; his lies were so detailed and full of compassion and humor. And now I wondered why I was wasting my time trying to poke holes in his facts when I should be writing about the awful things he saw. We talked for a bit more and he invited me to his show. I went, and dropped the story.

3/19/12 6:30 PM UPDATE: Alli Houseworth, former marketing and communications director at Wooly Mammoth, has an interesting post up at New Beans, in which she has called on audiences to boycott the show: “He insisted that ‘This is a work of non-fiction’ be printed in playbills. This was to be a work of activist theatre. Staff at Woolly handed out sheets of paper to every audience member that left our theatres, per Mike’s insistence, that urged them to take action on this matter. (I and other staffers would get nasty emails from him the next day if even one audience member slipped by without collecting this call to action.)”

New Directors/New Films: Crulic: The Path to Beyond (2011)

[This is the third in a series of dispatches relating to the New Directors/New Films series, running between March 21, 2012 and April 1, 2011 at MOMA and the Film Society of Lincoln Center.]

His name was Claudiu Crulic. He was a 33-year-old Romanian who, as a younger man, abandoned his loose educational plans and involved himself in the family business of selling sundries in various European nations. Or he was a mysterious drifter harassed by the authorities for minor indiscretions. Or he was living it up in vaguely dissolute, vaguely familial terms in Krakow. It really all depends — as Anca Damian’s animated film Crulic: The Path to Beyond makes clear in its enticing murkiness — on how you look at the situation, on the facts you decide to appropriate for your own subjective purposes, whether as filmgoer or fellow human being. Is that ringing telephone a cardboard reconstruction? Or is it merely a collection of hastily sketched lines? We can hear the cinematic fizzle of the overhead florescent lights, yet why can’t we see them? We are told that a man has lost 30 kilograms in weight before death, yet the air that surrounds his story is often weightless.

Damian’s film cannot commit itself to any one animation technique: cutout, hand-sketched, and the kitchen sink are all vigorously pursued in an effort to unpack Crulic’s story, which is by no means airtight, entirely authentic, or even completely tellable. Crulic’s voice and imagery have been reappropriated, with another actor reading what I must presume to be reinvented words to convey one possible truth about a terrible tale in which facts may be fickle. This raises ethical questions over whether Damian the filmmaker is as reckless with the truth as the Polish authorities were with Crulic’s life. Perhaps the only way to hit at Crulic’s truth is through such smudging.

There is one thing most people will agree on. Claudiu Crulic did not have to die at such a needlessly young age in a Polish prison. On July 11th, 2007, a judge of the high court had his wallet stolen, with two ATM transactions on his card totaling 500 Euros following not long after. Crulic, the apparent suspect who may or may not have been in Krakow at the time, was recognized in a photograph by the judge, detained, and placed into a prison to await trial in the months to come. Curlic decided that he could no longer wait and initiated a hunger strike, stating this in a letter to the Romanian Consulate. Damian’s film implies that the Consul strung Crulic along. This may very well be true. The judge and the Court and the lawyers and the doctors and the prison officials all have blood on their hands for allowing Crulic to die, for not intervening in time, and for throwing out evidence which might have exonerated Crulic (Crulic on a bus to Italy during the time in which the Judge was robbed). If the Crulic situation weren’t so tragic, it would certainly be comic or Kafkesque. But another important question that the film never quite answers is why Crulic would choose such a dramatic and life-threatening protest option over a more practical one. An inhumane hardliner could point to the heroes and rebs who have done hard time for worse offenses.

We are told many times along the way that “it was at this point” that Crulic’s life might have been saved or the cruel bureaucratic process might have grinded to a halt. But do we really know this for certain? This film carries the illusion of veracity with a narrator who steps into the vocal track to give us more than contours. And some kernel of another truth is implied during the end credits with various television clips. But while I was seduced by the film’s imagery and ideas — the frozen cutout representation of Crulic flung about from cell to cell as he is shifted in disorientation by the guards, the idea that one life might contain a finite number of photos — I felt vaguely bothered by the film’s tendency to dictate rather than to suggest. I cannot in good conscience call this a documentary. But as one dramatic representation of a story that was largely ignored in the States, this path to beyond leaves one considering the path less traveled and fuels a new desire to travel both. It is a sad indication of the Polish justice system’s inadequacies that a more complete excursion is probably not possible.