Belmont Club

The Sound of Sirens

Hello darkness, my old friend.
I’ve come to talk to you again.

The most unfortunate headline of the day is from the Guardian’s Pierre Haski: “Dominique Strauss-Kahn’s fall is a blow for France’s Socialists”. The perils of the English language.  The fall part is right.  The blow part is now the subject of a criminal investigation.  But this much is obviously true. Dominique Strauss-Kahn was a man sitting on top of the world. Why did he, er, blow it? In a little while he would have been President of France.

Everything was ready, even the T-shirts with the slogan: “Yes, we Kahn”. Even the hagiographic biography, with its chapters on extramarital sex leading to its happy ending: its subject’s proclamation of eternal love to his celebrity wife. But France woke up today to the news that Dominique Strauss-Kahn, head of the IMF and the man tipped to replace Nicolas Sarkozy next year as French president, was behind bars in New York, charged with the sexual assault of a hotel maid.

Now he’s being held without bail awaiting the grand jury. At worst he may spend the rest of his life in jail. From President of France to pressing pants in a prison laundry, quite a fall. Andrew Leonard at Salon asks why people, especially economists, do stupid things, when according to the rational actor model, a man in Strauss-Kahn’s position would never risk his career and fortune on such a dubious enterprise as raping a poor hotel chambermaid. Could it be that economics was wrong and rationality had nothing to do with anything? That in the end people act like “gorillas” or a “chimpanzee” in heat?

What if this wasn’t just true on an individual level — what if people acted irrationally en masse? Think about the potential disasters we could face — voters might do something nutty like electing legislators who simultaneously pass deficit-busting budgets while refusing to allow the government to pay the ensuing bills!

Leonard recovers himself by noting that at the group level statistical behavior may ensure that populations are rational as a whole. Some people will act contrary to their interest, but most will act rationally most of the time.  Some people are crazy, but most people are sane. “I think the reasonable economist, if not the “real economist,” would be on safe ground to argue that incentives matter in the aggregate, but become less and less useful as you approach the individual level.”

What Leonard has forgotten is the discount rate.

For most of people in the world without influence or power, the probability of suffering punishment for rape is such that few would risk their liberty and fortune for the dubious and disgusting thrill of chasing a hotel cleaner around a room.  That discount rate, even absent any morality, makes cowards of us all. But if a particular person believed that his individual risk of being punished was virtually zero then it would make perfect economic sense for that person to gratify his monstrous appetites. If in fact such a person did not believe he was risking anything by chasing the cleaner, nothing would deter him from doing it, excepting of course, his own character.

The Guardian argues that the nearly zero-risk environment of political France misled DSK into thinking that what was risk-free in Paris could be duplicated without modification in New York.

Consensual extramarital sex is a non-story in France, part of the right to a private life protected by fearsome libel and privacy laws. Having a mistress, philandering, even routinely propositioning journalists have been brushed aside for countless political figures. “How many senior male French politicians aren’t either a groper, a cheater, a charmer or a serial seducer? And it goes right to the top of the political class,” sighed one news editor. “France is still a kind of monarchy that kept the aristocratic morals of the 18th century. The lord of the manor has a right to the women; the king has his mistresses.” If more allegations against Strauss-Kahn come to light and lead to criminal charges, it will call into question a taboo in France about speaking out. …

The journalists, Christophe Deloire and Christophe Dubois, broke a taboo in their 2006 book, Sexus Politicus, about politicians’ sexual behaviour. They wrote of Strauss-Kahn’s tendency to “seduction to the point of obsession”, mentioning, but not naming, female journalists who had been irritated by his gestures towards them. They also referred to one senior civil servant who didn’t take up his offer to “come up to his office to relax”.

It seemed striking that when Strauss-Kahn left for the IMF in Washington in 2007, with many politicians privately wondering how he would cope in a puritan US which frowns upon sexual advances, only one journalist raised the issue. Brussels correspondent for Libération, Jean Quatremer, wrote on his blog: “Strauss-Kahn’s only real problem is his relationship to women. Too heavy … it borderlines harassment.” Strauss-Kahn’s communications team asked him to take the blog down. Quatremer explained to Le Parisien that he had refused, saying if they thought it was libellous, they could sue. They did not.

The outlines of DSK’s possible personality disorder were visible. But they were not, in that environment, a threat to him. Plainly some French journalists, perhaps drawing on their experiences as ordinary and not VIP travelers, correctly understood that the discount rate for this type of activity was different in the US than it was in political France. If Strauss-Kahn is convicted then Quatremer will have been proven right. It wasn’t worth it.

And the sign flashed out this warning;
In the words that it was forming
And the sign said the “words of the prophets are written on the subway walls
And tenement halls.
And echoed in the sound of sirens.


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