Let’s hear it for the KLF!

The KLF became heroes of mine last year when I used one of their songs as the basis of a fictional lawsuit that itself became the inspiration for my blog What is Fair Use?  The song was “K Cera Cera,” a medley, performed by the Red Army Choir, of “Que Sera Sera and Happy Xmas (the War is Over). The blog contains not only all the relevant documents to the law school assignment (briefs pertaining to the fictional lawsuit), but also several months worth of posts regarding issues pertaining to copyright, fair use, and the particular artists involved in the case. I became a big fan of Jimmy Cauty and William Drummond; their insights into the intersecting worlds of art and commerce are as sharp as any I’ve seen. I’ve often, in fact, referred back to them in this blog, but you can begin to get a taste of their sensibilities here. Their insights into the banking industry, published back in 1988, are as on the money a critique of the financial mess we’ve found ourselves in as any I’d read prior t0 2008.

But they started their careers as pop music sensations in the U.K., and I don’t know mamy people my age or younger who don’t remember Doctorin’ the Tardis:

“Doctorin’ the Tardis” is predominantly a mash-up of the Doctor Who theme music and Gary Glitter’s “Rock and Roll (Part Two)”, with sparse vocals inspired by The Daleks and Harry Enfield’s “Loadsamoney” character. Also credited on the record was “Ford Timelord”, Cauty’s 1968 Ford Galaxie American police car (claimed to have been used in the film Superman IV filmed in the UK). Drummond and Cauty declared that the car had spoken to them, giving its name as Ford Timelord, and advising the duo to become “The Timelords”.

Donald Trump, Pop Star

Donald Trump has always been good for coming up with “creative” rationalizations for his failures and his apparent successes. His creativity has been the foundation of his career as a pop star. There has always been a serious question, however, whether he should be taken seriously as a business person. Trump’s real estate empire, begun on an already substantial fortune built by his father’s real estate exploits, has been for a considerable amount of time founded more on debt than on his own assets. But he continues to draw front page attention, as in today’s New York Times, which discusses a “lawsuit filed by Mr. Trump, the real estate developer, television personality and best-selling author, in an effort to avoid paying $40 million that he personally guaranteed on a construction loan that Deutsche Bank says is due and payable.” Mr. Trump argues that he is excused from his obligation to pay back the loan under a “force majeure” clause in the construction contract “that allows the borrower to delay completion of the building if construction is hampered by such things as riots, floods or strikes. That clause has a catch-all section covering ‘any other event or circumstance not within the reasonable control of the borrower.’”

“Would you consider the biggest depression we have had in this country since 1929 to be such an event? I would,” [Trump] said in an interview. “A depression is not within the control of the borrower.” ”

it is a ridiculous argument. Quite plainly an investor bears the risk of a downturn in the real estate market. And one could hardly deem the downturn in the real estate market unforeseeable. People have been claiming the real estate market was overheated for years. If Trump were to prevail, it should piss off every foreclosed homeowner in the country, few of whom were as well positioned as Trump to genuinely understand the risk of borrowing money that, in the event of a downturn in a market (an inevitable event), they would be unable to repay.

But Trump gets his lawsuit and his front page coverage in the New York Times. Just wait, though: sooner or later he’ll go into bankruptcy. Until now, he’s had so much borrowed money his lenders could not afford to let him go into bankruptcy — it was better to lend him more money and keep him in business than to risk losing what they would lose if Trump went into bankruptcy. But now the banks don’t have any more money to lend him. Stay tuned.

The KLF knew bankers were pushers

Lawyers can be creative, and artists can have profound insights into matters legal and financial. An earlier project of mine on copyright and fair use grew out of a work by the KLF, a couple of musicians and artists from the U.K. who are worthy of even greater recognition than that they have received in their native land. Among other things, they wrote The Manual (How to have a Number One the Easy Way), a how-to guide on creating a number one pop hit. While The Manual is a work of brilliance at many levels, I was taken aback again today by the timeliness of one more aspect of the wisdom they impart therein:

Banks are in the business of making money by lending it. The more they lend the more they make. They want us, the punter, to become addicted for life to the false sense of security it gives us. Banks will go to extremes thinking up new and ingenious ways of getting us to borrow money from them. First and foremost they want us to get into property: “Buy a house,” because with your property as security they can always lend you more and more money. If things were to go badly wrong and you weren’t able to keep up the interest payments they can always force you out of house and home and get their money back that way.

Of course, it would be bad for the banks if they were seen to be throwing too many families onto the street or forcing businesses to the wall in order to redeem their loans. They would always prefer to lend more money so as to help pay off the interest on the earlier loans. Banks have spent millions over the past few years trying to destroy the public’s old impression of the bank manager in bowler, brolly and pinstripe, to the approachable and amiable sort of chap who will attempt at all times to say “Yes!”. They have only done this, not because they like being nicer, but to seduce you into coming in and borrowing more money. Remember, when you are going in to see a bank manager you’re going to see a pusher; a pusher dealing in one of the purest, most addictive drugs – money.

Creative law “enforcement” in difficult times

From the Chicago Tribune:

“Approximately 70 foreclosure orders that will not be served are displayed at the Cook County Sheriff’s office on Wednesday.

“At least it was until Wednesday, when Sheriff Tom Dart announced he wouldn’t do it anymore.

“Dart cited the growing number of evictions that involve rent-paying tenants who suddenly learn their building is in foreclosure because the landlord neglected to pay the mortgage. By refusing to do any foreclosure-related evictions, the hope is that banks will change their policies.”

(hat tip to MInor Wisdom)