The Alan Greenspan Strain

First, a question with which few biogeographers bother. If a goodly chunk of their discipline is dedicated to veiling the impact capitalism imposes on the natural world (discussed here and here), how can researchers interested in paying their bills study the crises that threaten the posh gamblers for whom, however distally, they ultimately work?

For those who study pathogens, the answer is a short one. Focus on viruses and bacteria as biomedical objects alone. The spread and evolution of these lil’ nasties can be tracked underneath the microscope or, at the public health level, across computer maps, but rarely over their rough-and-tumble geographies.

Otherwise, the problem of a pathogen, already treacherous, becomes in such a political context nigh impossible. God forbid, researchers might be forced to study the social relationships that bind together and separate out populations across  capitalist landscapes near and far. The corrupt omission, a constant headache, is eased with a trail of career pellets, however routinely the solutions that result may fail.

As recent work on one virus illustrates, however, there is another way.


The origins of the West Nile virus (WNV), a single-stranded RNA virus of the Flaviviridae family, are proposed as old as a thousand years. The virus was first isolated in humans in the West Nile District of Uganda in 1937 and over the next few decades tracked in humans and horses elsewhere in Africa, the Middle East, South Asia, southern Europe, and Australia. Over the past decade WNV invaded and spread across the Western Hemisphere.

There are three different classes of West Nile symptoms. Human patients can be asymptomatic, endure West Nile Fever, or suffer a neuroinvasive disease. West Nile Fever includes flu-like symptoms: headaches, fever, body aches, chills, diaphoresis, weakness, swollen lymph nodes, and drowsiness. Some human hosts might also experience gastrointestinal symptoms, including nausea, vomiting, loss of appetite, and diarrhea. The neuroinvasive disease can be fatal and includes inflammation and swelling of the brain and spinal cord leading to polio-like symptoms and even paralysis.

WNV typically transmits via the bite of an infected mosquito. Mosquitoes become carriers when they feed on infected birds, in the Western Hemisphere particularly robins and crows. The virus incubates in a new carrier’s hemolymph in the days following infection. The virus eventually makes its way to the mosquito’s salivary glands. During subsequent blood meals WNV may be injected into humans and other animals, where, aided by the saliva’s anti-coagulates, it can multiply and potentially induce illness.

WNV’s chain of transmission can run vertically down mosquito generations and bird-to-bird, but the virus only rarely transmits mammal-to-mammal. In short, human infections are often epidemiological dead ends, although, given the worst of the infections, remain due cause for ongoing surveillance.

The virus invaded the U.S. in 1999, setting off an initial media feeding frenzy. The outbreak started in New York City before spreading across country over the next decade to the rest of North America and south into Central America. In the course of its spread west, making California by 2003, the virus encountered a scourge of another sort spreading in the other direction.

In 2007, Kern County, California, north of Los Angeles, suffered a large outbreak of human West Nile Fevers. The outbreak, 140 cases, took local health officials by surprise as the county was suffering one of its periodic droughts, which typically reduces mosquito load.

William Reisen and his colleagues have hypothesized the Kern outbreak related to an increase in housing foreclosures associated with the national crisis in subprime lending. Kern has suffered some of the worst bouts of mortgage delinquencies in the state, which in turn has suffered some of the country’s worst.


The roots of the housing crisis and the subsequent banking collapse and bailout extend back to the mid-1970s. By legislation, the courts, and good old fashioned union busting, the American nomenklatura rolled back many of the gains organized labor accrued the previous hundred years, exposing millions to depressed wages, lost benefits, and wobbly job security. Under the neoliberal paradigm, a broke and broken labor force is a compliant one.

But a contradiction required address: how to keep the consumer economy rolling when workers pocket less? Instead of paying workers what they’ve earned, American capital would now lend them money and at interest. The percent of American family disposable income dedicated to debt service increased from 62% in 1975 to 127% by 2005. The credit (and debt) Americans accrued would fuel global productivity. For three decades Americans have acted as the consumers of last resort for emerging economies worldwide, including China’s.

Under a credit regime, “investing in workers” is transformed from an infrastructural priority into just another source of profit. The more credit is extended to working people at interest, the more money gets vacuumed across the class gap, added to the surplus value already expropriated. Over the credit boom, when ostensibly more working people had access to cheap money, the richest accrued a greater proportion of wealth. In 1976, the top 1% held 19.9% of U.S. wealth. By 2007, it owned 34.6%.

What can the wealthy do with all that money? Capital abhors idling about. Conspicuous consumption can eat through the lode only so far. There are only so many pleasure boats one can buy. There’s not much else that can be done with the excess except invest.

But with the ‘real’ economy—manufacturing—now stagnant or moved overseas, raw speculation becomes the sole place surplus profit, with expectations of 30% margins, can be absorbed within the U.S.’s borders. But American manias, now more real than the country’s real economy, are indelicate affairs. They are rollerball races, bloody and all-elbows. How fast can you turn a significant profit before the bubble pops and prices collapse, leaving aside the damage to the little people in the run’s wake?

By the millennium’s turn, two such bubbles had come and gone. The first dot-com boom had run its course and an overvalued stock market had corrected. Where could overaccumulated capital relieve itself next?


The groundwork for the next novel offering was first laid in the 1970s. As John Bellamy Foster and Fred Magdoff summarize, banks began then to package together mortgages into securities and bonds, which were themselves combined and resold. The packages were meanwhile diversified. By the end of the 1990s low- and high-risk mortgages were being mixed together in complex combinations.

Bond raters, paid in part by the banks they reported on, sanctioned these mix-risk instruments with triple-A ratings, the highest possible, greenlighting a mainstream market for subprime loans, until then the province of skanky loan sharks and pawn shops. Even the poorest Americans, who had long been frozen out of the mortgage market, could realize the dream of owning a house, in exchange for the privilege of forwarding a bank monthly payments.

Banks began to set up virtual corporations to hold these instruments off their balance sheets. But to support these risky long-term securities, the virtual corporations would pay other legit banks short-term payments in return for covering any losses over the long haul. These credit default swaps infused major banks with gobs of new cash but at the risk of having to hold or cover potentially nasty losses, risk much greater than what traditional banks had until then covered.

By 2001 the players for a new mania were all in place—the banks, financial instruments, and heavy-duty investors searching for a new outlet. All the new bubble needed was a puff of air. As Foster and Magdoff describe it, Alan Greenspan’s Federal Reserve expanded the availability of easy credit by repeatedly reducing interest rates from 6 percent to 1 percent, the lowest since WWII.

Looser financing greatly expanded the base of potential borrowers, including the riskiest prospective homeowners. The risk was at one and the same time covered and increased by offering these customers adjustable rate mortgages that minimized initial interest payments but radically increased the payments years later into the mortgage. Many of the new customers thought they could refinance their loans and borrow against their limited equity as their homes appreciated in price during the housing boom. By the end of 2005, mortgage debt stood at nearly $9 trillion and 70% of U.S. GDP.

In other words, the health of an industrial country’s housing market was based on a Ponzi scheme mainstreamed by legit banks newly a-prowl for profit and enabled by homeowners’ false hopes no ceiling limited the prices of their homes. The dangers the system faced were compounded by the sleazier elements of an expansive real estate sector. The most predatory hid loan adjustments from their niche of subprime customers, who could now “afford” pricier homes at low, even no, interest and few initial capital payments, until, of course, the adjustments began.

As subprime loans grew in number and risk, the mix-risk securities into which they were bundled and sold to banks, brokerage firms, and other investors began to accrue more risk than the credit default swaps were expected to cover. That is, the swaps began to deteriorate in quality and turn toxic. But as long as the real estate, building, and finance industries, and the government officials who serviced them, were raking in eye-popping fees, commissions, and campaign contributions, no effort could successfully derail what was now a runaway train. Mortgage-backed securities increased from $56 billion in 2000 to $508 billion in 2005.

To clarify, the bubble wasn’t merely a matter of quasi-official corruption. Its growth was legislated as law of the land, protected by federal courts, enforced by Washington regulators, and celebrated in the pages of august publications. The Clinton-era, and bipartisan, repeal of the Depression’s Glass-Steagall Act of 1933, which among its provisions separated banking and investment, helped strip out structural fail-safes that could slow or even block such officially sanctioned irrational exuberance, to use Greenspan’s telling euphemism.

But if Washington couldn’t pass judgment, except in the bubble’s favor, others would, if only by the weight of their counter-investments. As Gregory Zuckerman and Michael Lewis detail in recent books, some jaundice-eyed investors began to bet against the mortgage securities—indeed, against the very health of the system—profiting when the housing market, and the banking system in general, tanked. It isn’t, however, a matter of capitalism self-correcting so much as the cynical profiting off others’ overreaching greed, to the ruin of millions of working people worldwide.


By 2006 interest rates were raised back off their floor and housing prices began to tumble, particularly in subprime epicenters in Florida, Arizona, and California, including Kern County. Borrowers, who depended on spiking housing prices to cover their debts and pay off their loans before their mortgages adjusted, were caught with their pants down around their ankles. They lost the bets they placed, on which their very economic lives rested.

Their customers unable to keep up with their payments, banks nationwide foreclosed nearly six million homes over the following three years, a crisis that continues. A record three million more foreclosures are expected this year, with more to come. Nearly eleven million households nationwide owe more on their mortgage than their homes are now worth.

Many homeowners are abandoning their properties outright, ruining their credit in the short term but saving themselves from placing even another dime into an investment gone bust. That is, they’re treating physical infrastructure, and the landscape around it, much in the way high-end investors long have–as disposable and peripheral to life’s vicissitudes. But the boom-and-bust is coring out more than the built environment. For both those who are leaving and those who are staying, the sense of community, with all its emotional and material benefits, is now shattered.

When the housing bubble popped, its reverberations echoed out from individual homeowners and communities, whose suffering went two critical years ignored by the political system, and into the economy’s core infrastructure. In July 2007 two Bear Stearns hedge funds holding $10 billion in mortgage-backed securities collapsed, losing 90% of their value. As Foster and Magdoff explain, the resulting panic sent capital fleeing out of the securities and, because of the complexity of the instruments, out of even those packages still viable, a conundrum of the system’s own making. Investment also fled the bonds that backed the credit default swaps.

In short, the house of cards collapsed and the banks and investment firms most exposed began to fail, from Wall Street giants AIG and Lehman Brothers to small regional banks. One hundred forty banks failed in 2009 alone. Forty one have failed this year so far, including four small banks in Georgia, Florida and Arizona just this past week.

Credit, already drying up over the previous two years for smallholders, disappeared across the economy, leading to the country’s next stage: Barack Obama’s election, the bank bailouts, mass unemployment further compounding housing delinquencies, and a Great Recession that continues worldwide to this day.

President Obama has turned over the government’s response to financiers who helped bring about the crises in the first place. While the bank bailouts were swift, support to the less affluent has been anemic at best. The announced aims of the federal mortgage modification program set up in response to the housing crisis included modifying as many as four million loans by 2012. As of February 2010 the program has fixed 66,000.


Which takes us back to Kern County. According to RealtyTrac, an online foreclosure clearinghouse, 523,624 California properties foreclosed in 2008, the nation’s highest state total, increasing nearly 500 percent from 2006. Kern County’s foreclosure filings were still, as of February 2010, nearly doubled that of California and three times the national average.  Over 70% of Kern’s foreclosures in February were concentrated in Bakersfield, the county’s largest city, hosting four times the foreclosures than the national average.

Kern County’s WNV epidemiology appears mechanistically tied to the mass repossession. When homeowners are forced out, the default owners, the banks that now hold the deeds, rarely maintain the abandoned properties, including their swimming pools.

Pools are standard issue in southern California, in even many of the poorest homes. A little bit of the beach on every property. When untreated, the pools turn green with algae that can serve as food for millions of mosquito larvae. Reisen et al. mapped out the green pools across Bakersfield, finding a veritable city of mosquito nurseries at the housing crisis’s apex. The county’s mosquitoes, and their WNV stowaways, were able to prosper in the face of climatic drought because the housing system failed.

But it isn’t just the number of mosquitoes that increased as the housing bust spread across California. Reisen et al. show that the green pools selected for mosquito species that more easily transmit the West Nile virus to humans. The Northern House Mosquito Culex pipiens is being replaced by the typically rural mosquito Culex tarsalis.

The study has its critics. While praising the study’s scope, Richard Goodman and James Buehler write that it failed to definitively link the WNV cases with exposures to WNV-infected mosquitoes that had bred in the abandoned swimming pools. In other words, the results are circumstantial at best. Reisen et al. agreed with the assessment but pointed out few ecologies of such breadth are susceptible to an experimental design in which every putative factor could be isolated for testing. Instead, Reisen et al. offer additional causal support in the form of the interventions the County subsequently undertook,

As in 2007, Kern County experienced continued drought conditions in 2008, and mosquito production was again confined largely to urban sources, including swimming pools. Avian abundance was low, and seroprevalence for WNV among selected bird species was similar to seroprevalence rates for 2007…

However, early in the spring of 2008, unlike in 2007, the Kern Mosquito and Vector Control District (MVCD) commenced aerial surveys, reassigned rural field crews to treat swimming pools (and other urban water sources), and immediately conducted ground-based adulticiding when surveillance detected enzootic activity.

This aggressive approach resulted in 2,182 swimming pools treated (a 255% increase over the number treated in 2007), reduced enzootic transmission (i.e., 5% of 192 dead birds, 17 serum samples from 90 sentinel chickens, and 1% of 598 mosquito pools positive for WNV), and almost no evidence of human infection (only 1 case reported in October).

While an epistemologically consistent alternative is possible, for all practical purposes the proof is in the pudding, or, here, in the poison. Intervention at the putative source correlated with no further outbreak.


Societies routinely make their own diseases, and the particulars in this example extend back into the maw of finance capital and national economic policy. There is in this case a fascinating parallelism between West Nile’s U.S. entrance and the repeal of Glass-Steagall the same year. Clearly coincidental, but the resulting synergism in Kern County’s abandoned pools is instructive:

Many researchers across pathogens, consciously or not, perhaps in fear their funding streams would be endangered, have pretended such anthropogenic connections are irrelevant. A group of public health practitioners, on the other hand, faced with the practical difficulties of a burgeoning outbreak in their local county converged on an alternate model.

That is, a traditional biogeography—climate, weather, insect demographics, intrinsic population dynamics—could not capture WNV’s behavior in Kern Country. Only once the economic geography of California’s housing crisis was included could the essence of West Nile’s behavior there be understood finally. It seems those researchers brave enough to risk power’s cruel reaction find themselves, with mosquitoes about their sweaty brows, at the headwaters of a new biogeography.

We need then revise our premises and habits of thought to their very core.

As a start, it would be a worthy, and scientifically appropriate, addition to the man’s legacy to name the Southern California variant of a virus that causes both diarrhea and paralysis after Alan Greenspan. As appropriate as the medal with which President Bush stuck him upon retirement.

The chain of causality is a long one but sturdy. Greenspan long played the most prominent, albeit fuddling, mouthpiece of an ideology that nearly caused, and may still cause, the collapse of the world’s most powerful economy, as measured by macroeconomic indicators traditional economists favor. Alan Rand’s Federal Reserve also provided aid and comfort to efforts in Washington and on Wall Street to deregulate the financial system it is charged to protect.

More acutely, Greenspan, at the behest of the Wall Street he regulated, testified against Brooksley Born’s request the derivatives market be more tightly controlled. Congress subsequently eliminated almost all government regulation of the market, including the credit default swaps that covered the mortgage speculation.

In a 48-page paper released earlier this month, Greenspan, in a passive voice that treats economic events like natural phenomena, attempts to soft-pedal his role and pawn off blame elsewhere, including onto homeowners (for choosing adjustable-rate mortgages over 30-year ones), the developing world (for saving too much), Fannie Mae and Freddie Mac (for heavy purchases in subprime securities), financial firms (for eschewing risk aversion), rating agencies (for incompetence in understanding complex derivatives), and other sources of inflation outside the Fed’s control (for increasing home prices). And the Fed? Only as much a victim as academics, regulators, and central banks worldwide in miscalculating risk distribution.

Pointing fingers so freely only damns the system Greenspan so diligently defended his whole career. And yet, while blame should be laid broadly, Greenspan’s role in the fiasco, and now this, his cringe of a dodge, have earned the man a tribute all his own, a better embodiment of his life’s works than a medal:

Although subspecies are outside the purview of the International Committee on Taxonomy of Viruses—the international organization charged with viral nomenclature—the taxonomy of microorganisms can include their cultural requirements for multiplication. We therefore submit for consideration the following taxonomy. For a virus better transmitted to human hosts by a vector newly urbanized as a result of a shift in the landscape originating in financial deregulation,

Family: Flaviviridae
Genus: Flavivirus
Species: West Nile virus
Variant: Greenspan
Holotype isolated from Culex tarsalis, Bakersfield, Kern County, California, USA (2007)

3 Responses to “The Alan Greenspan Strain”

  1. That was an amazing read.

  2. Rodrick Wallace Says:

    Fucking brilliant…

  3. Reblogged this on AgroEcoPeople and commented:
    Oldie but awesome-ie.

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