I see that Forbes ranks
Would Forbes' presence in the Big Apple count as an amelioration of NYC’s lowly status, or does it aggravate? A bug, or a feature?
They’re right about
I see that Forbes ranks
Would Forbes' presence in the Big Apple count as an amelioration of NYC’s lowly status, or does it aggravate? A bug, or a feature?
They’re right about
You knew this already, but here is a good summary:
According to a 2005 report … the
Source: that’s Glen Loury, here, as quoted in Timothy Taylor, Recommendations for Further Reading, 21 Journal of Economic Perspectives No. 4, 229, 230 (Fall 2007). Couple that with Jon Markman’s estimate that the share of our work force in the, ahem, “security industry” is 25 percent. Wonder how to analyze this in terms of the fact that the
Obama remains too green. Dowd makes the point that he really didn’t see the Clinton high-low block coming. He’s too thin skinned. If we need an official visionary, he’s our guy. If we need a tough decision maker with the right connections, it’s Hillary. She brings her own biases and pent up grudges but she ain’t thin skinned. Brittle perhaps.And if Bill doesn’t really love her, he sure can fake the anger. Pick on my wife, you $%&!. Where’s my horsewhip. Or better still, cane him on the street. (Old Washington custom, caning.)
Yes, that gets it nicely. A defining moment for me was when he snubbed Hillary at the State of the Union. What do you think this is buddy, a junior prom? You'll need to deal with that woman when she is majority leader in the Senate.
Wichita also weighs in on my current fascination, the Huckster:
I think that McCain would make a serious if not fatal error in picking Huckabee as VP. I might be able to vote for McCain if the spare were acceptable; Huckabee is not. He represents a minority in the Republican party and the machine in Washington would eat him. Or simply let him loose on some of his silly issues (evolution, the poor) and make the decisions some where else. He alone of the field does not seem to have the connections to put together a team of experts to run the government.
Well put again. I guess what continues to fascinate me about Huckabee is that genuine likeability, coupled with gobsmacking ignorance. He charms the birds off a tree and the next time you look, he's talking about adding lanes to I-95. Ironic that it leaves me rooting for the one Republican for whom I have the most personal contempt--the one whose hair doesn't move in a high wind, but who has sufficient lack of prnciple that he might actually run a half-way decent government.
Eric Rauchway has a fascinating piece up at TNR where he argues that the Republicans are the party hounded by “the inability to govern” (while the Dems tend to govern too much) (link, and HT Mark Thoma). Let’s stipulate that this little foray is unlikely to be greeted with universal acclaim, but let me suggest one particular (among many?) ways in which it is surprising or original.
That is: ever since
But it has long outlasted all that. Even today, Republicans seem to believe—and seem successful at persuading others—that the presidency really belongs to them and any Democratic president is at best a chair-warmer and at worst, a usurper.
I do not think that the presidency belongs to them, although I do think the Democrats tend to overgovern, and quite often, at that. But here is a spin: as a whole, Democrats tend to be better at wonkiness and the boring part of day-to-day operation. Stuff like this is bound to be irritating, particularly to people who find themselves governed.
In this perspective, the interesting thing is not that Democrats win some, but that they win at all. But the task of governing does have to be done, and every so often, you haul in the Democrats to clean up the mess.
One giveaway: consider how often deep-red states wind up with Democratic governors, even as they are spilling libertarian rhetoric (and sending Republicans to Congress). A more extreme example would be the “sewer socialist” mayors who survive with widespread popularity because they make the firetrucks run on time. Bernie Sanders, longtime Mayor of Burlington and now a senator from
A couple of days ago I wrote about “the bankruptcy planning problem”—how you can take advantage of bankruptcy, but you can’t plan for it (link). Here’s a new wrinkle on the same theme that is just too cool to ignore.
Here’s the deal: you bought your nice
The short answer is “no.”
This has been the rule since—I don’t know when, but it was well established when I came to
And that’s the key: since the bottom of the Depression the value of
Until now. Apparently now, for the first time ever, debtors in battalions are walking away from their real estate debt. And grownups who ought to know better are getting huffy about it.
A good place to start is with the (normally quite sane and sensible) Calculated Risk (link). In a long and unusually convoluted post, he* undertakes to show that real estate loans “are not, actually, options contracts.” But then he goes on to show how the industry prices them exactly that way (he isn’t addressing himself specifically to
“Ruthless” isn’t really intended to be a casual insult; it is in fact the term we use to describe borrowers who can pay their debts but choose not to, because there is a greater financial return to that borrower in defaulting as opposed to not defaulting.
…or, he might have said, somebody who chooses to operate within the limits of the contract instead of paying the lender more than he is due. Then in a dynamite aside, he adds:
(There are always people who have no trouble with ruthlessness; they often get the CEO job. Most of us have at least moderately strong inhibitions about ruthless behavior.)
Bingo. I take this as a concession that the industry survives on the predicate that the borrowers are more honest and honorable than the lenders.
In a somewhat more muted town, here’s Housingwire, for example (link), and Market Movers (link) rolling their eyes over a new “business” that must be regarded as the logical conclusion of this sequence—a firm that (for money) will tell you just how to do it. I concede, it is hard for me to see just what kind of “advice” these “consultants” can offer that would justify the fees they take—but I suspect that is not what is causing the eye-rolling in polite company.
I admit that I did not grow up in a world where people walked freely away from their debts. What really frosts me, I guess, is that these lenders had a whole lifetime to plan for this—and (more important) I’m sure to a moral certainty that they’ve priced it into their models. No, more precisely: what they’ve priced is the expectation that customers would not, in the end, exercise their legal rights here; that they would not, in the end, act like CEOs. Call it a “decency tax”—perhaps one of the most regressive our economy has on offer.
Tedious Footnote on
And let’s not even think about taxes…
[Protective Boilerplate: This is not legal advice. It is blogchat, which is different.]
Update, January 2008: "She." The author was Tanta, of whose identity I was not then aware. Tanta was, of course, a superb analyst/commentator, whose absence leaves a gaping hole. But I still think I was right on this one.
There’s one of the oddest presidential endorsements you can imagine over at the
True as far as it goes, I guess, but he also says:
The most important tasks of the next president lie in foreign affairs. Since that is not my area of expertise, I don't know whether Mr. McCain or Mr. Giuliani or Mr. Romney would be the best president.
Whoa, Sasquatch, don’t go overboard now, big guy. This is an endorsement, remember, (or maybe it isn’t). In fairness, Glaeser the economist does weigh in on his own special subject:
The [Republican] party must once again make the case that its economic policies offer the brightest future for middle income Americans.
Which is a lot more than just true enough. But it doesn’t inspire confidence that McCain himself says that economics is not his strong suit, and drives the port home by showcasing the support he gets from Mr. Supply-Side, Jack Kemp. I don’t know about Glaeser himself, but I know that the number of mainstream economists who regard supply side as anything other than dope-smoking is small enough to fit into the downstairs broom closet, with space left over for the editorial board of the National Review.
Glaeser also makes space for—indeed he opens with—a swipe at Democrats:
The party of Jimmy Carter will nominate a candidate for the world's most important executive position without significant executive experience.
He actually has a point about Clinton and Obama—a point which might gain more force if he didn’t throw in a snide remark about one president who actually did have significant executive experience and proved, if nothing else, that executive experience is hardly the defining factor.
Anyway, having swiped at the Democrats for not having executive experience, Glaeser moves on to endorse the one GOP candidate who has substantially none. But hold the message here: when you want change, you pick the oldest guy in the room, the one with longest service in politics, and the one with closest ties to
I get irritated at the line of argument that says the world was a better place when consumers let burdensome loans wreck their families, and drive them personally into the ground like over-sized tent pegs. Enough.
Yes, people used to be much more nervous about defaulting. But so what? If a loan no longer meets your requirements, or if it's crushing you financially, or if your circumstances have changed, there is no need to go leaping off bridges about it. The world has changed and the consequences of loan defaults & loan renegotiations are no longer need be as dire as they once were. People who pretend otherwise are selling something -- usually an over-rosy picture of an imaginary past.
It's about time individuals caught up with countries and companies. Both have always had more flexibility with respect to loan defaults/renegotiation than individuals have.
Kedrovsky goes on to say: "I'm not suggesting that loan commitments should be as fickle as, say, high school relationships ..." Excuse me, but isn't he saying exactly that? Or if not, can he think of one good reason why he should not? Can he points to any principle that tells me value bankruptcy as a put option, the Tax Code as a personal challenge, and the marriage contract as a promise to love honor and hang around till something better shows up?
And now I'll tell you what my parents told me when I turned 18--take your stuff and get out.
Southwest Airlines flight skids off taxiway in Washington
(01-27) 18:47 PST Spokane, Wash. (AP) --
A Southwest Airlines plane with 118 passengers on board skidded off a snow-covered taxiway Sunday afternoon after safely landing at Spokane International Airport, the airline said.
No one was injured, but flights didn't resume for more than three hours.
The pilot of Southwest Flight 485, which took off from Portland, Ore. after making stops in San Diego and Sacramento, was slowly taxiing to the gate when the front wheels of the plane slid off the taxiway around 1:40 p.m., said Brandy King, a spokeswoman for the Dallas-based carrier.
Amnesty International: Important despite the wasteful diversion of some of its energies and resources in campaigns against the arms trade and for economic, social and cultural rights
Which seems straightforward enough.
The Church of England: Not perfect - too few gay female bishops, for instance - but pretty good
The oft neglected but obviously true: For instance Mussolini really was a precursor of the New Deal and he was initially regarded with fondness by many on the American left. This sort of claim is the core of the book and it does stand up after you take all the criticisms into account. I am pleased to see it upend traditional "feel good" narratives of politics.
My first thought was—wait a minute, whoa, I learned that at night school in 1960. Who says it is “oft neglected”? What “feel good” narrative?
But then I reflected—the same mail cycle brought a missive from my friend Dave in which he said (growled):
Fascism essentially means direction of government to suit independent private profit-directed corporate entities (that is, not under government management though possibly given government direction) and in return the corporate entities allied with the 'national enterprise'. When Government exists primarily for Business and Business for Government, that is fascistic, even if not with all the militarized panoply of traditional fascism.
Well, I guess this is a fairly standard stuff, but for my money, insufficiently nuanced. I lobbed the ball back at Dave with a quote from Robert Paxton’s Anatomy of Fascism:
Fascism may be defined as a form of political behavior marked by obsessive preoccupation with community decline, humiliation, or victimhood and by compensatory cults of unity, energy, and purity, in which a mass-based party of committed nationalist militants, working in uneasy but effective collaboration with trditional elites, abandons democratic liberties and pursues with redemptive violence and without ethical or legal restraint goals of internal cleansing and external expansion."
—Robert Paxton, Anatomy of Fascism 218 (2004)
And David fired back:
Are we sure only one guy wrote that? It has the look of a committee job.
Ha! He may not be so far wrong. The Paxton book is, I take it, the summum bonum of 30-odd years in the university seminar room, so inevitably it lacks the fervor of the sloganeer.
But maybe that is one more problem with fascism: it is slippery stuff and is too easy coarsened and vulgarized—as if it weren’t coarsened and vulgarized to begin with.
Oh, and thanks to
Parting Shot: but at the moment, I’d still say that know-nothing populism is still more a feature of the right than of the left.
By Sewell Chan
A group of 25 former prosecutors from the
The letter asserts that Mr. Giuliani, who is now seeking the Republican Party’s nomination for president, improperly used the office to promote himself, leaked information to reporters and exaggerated his accomplishments, and that such behavior “casts doubt, generally, on Giuliani’s credibility and judgment.”
The criticism is consistent with an Op-Ed article published in The Times last month by John S. Martin Jr., who preceded Mr. Giuliani as the
That’s fine and it’s hardly a surprise, except—why now? That hideous gurgling sound you her from
A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.
Source: Heinlein, via Kottke.
Having caught a bit of HBO’s
Yet that is the odd thing about some historical writing: people still read Tacitus and Gibbon on
I don’t suppose Syme is a Tacitus (or even a Gibbon) but I think he deserves a place at the table. His style is compact, aphoristic—Tacitean. And his general pessimism about the fortunes of free institutions is bound to find an audience in the current market.
Executive summary of Syme: the
On “the assassins”—Brutus, Cassius and company:
They stood, not merely for the traditions and institutions of the
—Ronald Syme, The Roman Revolution 59 (Oxford U Paperback 1960)
On the young Octavian, later Augustus:
Exuberant ambition mated with political maturity is not enough to explain the ascension of Octvianus A sceptic about all else, Caesar the Dictator had faith in hs own star. The fortune of Caesar survived his fall. On no rational forecast of events would his adopted son have succeeded in playing off the Republican cause against the Caesarian leaders, survived the War of Perusia and lived to prevail over Antonius in the end.
On the legend of
Of the ability of Cleopatra there is no doubt: her importance in history, apart from literature, is another matter. … Created belief turned the scale of of history. The policy and ambitions of Antonius or of Cleopatra were not the true cause of the War of Actium; they were a pretext in the strife for power, the magnificent lie upon which was built the supremacy of Caesar’s heir and the resurgent nation of
A footnote: HBO’s
Calculated Risk is running a neat little contest-lette to pick the worst ideas for an economic stimulus package (link). There are 195 comments so far. “Straw Buyer” suggests “A five million dollar tax on bicycle tires to be used for private jet subsidies.” “Bubba2Friday” suggests turning Sean Connery loose on the roulette wheel. But my current favorite:
The giacutter solution: Money cannons. Like the type used to launch clowns across circus tents.
Set up these money cannons at the tallest point of each municipality in the
Fire said cannons at a designated time of the day and voila........instant stimulus!
No, wait, this is a competition for worst ideas. …
The other day I wrote that I’d been reading Little House on the Prairie. I might have added that after hours, I’ve been refracting it through a darker mirror. The darker mirror would be Dzhan—Soul, the dystopian novella by Andrei Platonov who just might be the greatest Russian writer of the communist era.
In Little House, Laura and her family venture forth onto the American frontier. In Soul, Nazar Chagataev ventures back to
Looking out of the hut’s entrance, they could see the shadow of evening running towards the pit of Sary-Kamysh, the location in ancient times of the hell of the whole world. Chagataev had heard this tale in his childhood but only now did he understand is full meaning. In far-off Khorosan beyond the Koper-Dag mountains, among gardens and ploughed fields, lived the pure god of happiness, fruit and women—Ormuzd, protector agriculture and of human reproduction, love of peace in
—Andrey Platonov, Soul 32-3 (NYRB Paper back 2008)
I was going to say “you don’t get any darker than that,” but in fact you do: Chagataev travels with the people in this land where he was born and comes to understand them as people who have lost their identity and cohesion and their will to live.
Of course the true comparison to Prairie is not in the pioneers; it is in the Indians who are being driven out and broken by the pioneers’ advance. In fact, Wilder treats the Indians with respect and some understanding. But it isn’t their story she is telling. Platonov, by contrast, is telling the story of the vanquished, and it has rarely been so well told.
I have been wondering—do libertarians favor the privatization of
One difficulty is that it would limit education to the rich, and we know the rich aren’t really interested in getting shot at. But I think I may have thought up a way around that. The thing is, the military may have become too workmanlike and bureaucratic—too much like, say, accounting.
The point that libertarians may miss here is that men aren’t really motivated all that much by wealth per se. They’re much more concerned with status. They’ll take a job like, say, drug runner, even though it pays less than MacDonald’s because it is so much more cool than McDonald’s. This trait seems to be hard-wired. Anthropologists say that in primitive societies, men would go hunting even though it yielded less food than hoeing the beans, because hoeing the beans was the iron age version of McDonalds. No matter that it cost you more energy than it yielded; think how nifty it would be to tell the chicks you took down a wooly mammoth.
And think of status relationships in ancient societies. In
It might be starting already. My friend Scott tells me he knows a guy who claims title to the world’s largest privately-owned collection of surplus Army tanks. Just today, I saw that Hummer is already advertising that you ought to buy one of their urban attack vehicles so you can help rescue people next time there is a hurricane. With your own time. And risk and money. A status thing again. Like I say, wiring.
Ought to be even easier with airplanes. What if the young George Bush, instead of being forced into a plane owned by the state of Texas (or Alabama) had had to show up with his own equipment--with, I assume, his own name festooned on the side (and, I suppose, his own crew, chosen from out of his posse) You wouldn’t have been able to pry him out of the cockpit. And just think how different our history might have been. No, on second thought, don’t. Bad idea. Sorry.
...to acquaint you with the peculiarities of telephone sales and negotiations. Teach the methods and techniques telemarketing. All of this takes place in the unforgettable warm, friendly, while working environment that will allow you to hold most profitably this time, having received the necessary knowledge, skills, positive emotions.
All this for 5,000 Rubles, which figures to be about $200. Telemarketing training by Russian spammers in an "unforgettable warm, friendly, while working environment." Be still my soul.
Update: My friend Margaret takes it up a notch:
Reliance Power Ltd.'s 117 billion rupee ($2.98 billion) initial public offering has been set at 450 rupees a share, company Chairman Anil Ambani said.
India's largest capital raising closed to record subscriptions as investors submitted bids valued at more than 7.5 trillion rupees. Demand for the issue, which was open for subscriptions between Jan. 15 and Jan. 18, exceeded supply by 72.9 times.
"This is the largest-ever subscription in the history of global capital markets. It received applications from more than five million retail participants," Mr. Ambani said.
Carpe offers no comment, but isn't this precisely the sort of looniness that cries out "bubble"? (Message brought to you by a guy who thought Google was overpriced at 300.--ed)
Headline: That Might Be Best
Drama queen, looking at watch: I hope you're happy. We missed our train.
Stressed mother: Okay, okay... Let's just look at the board and see when the next train into Stamford it.
Drama queen: Mo-ooom...
Stressed mother: Listen, Bethany, I can't help it if the cab driver couldn't speak English and took us to the wrong place.
Drama queen: I think we both know that we're late because you're a fatass and had to stop at Starbucks.
Stressed mother: Bethany, enough.
Drama queen: Mom, I am a child model. I make more money than you do, and I could probably figure out the damn train if you'd let me.
Stressed mother: Enough.
Drama queen: If we don't get back to Vermont by nine o'clock tonight, I'm never speaking to you again.
You’d never guess it to talk to her, but Mrs.B grew up in a household without children’s books. Because there are few things I like to do better than to read books to children, we have undertaken to remedy this sad deficiency: right now, we are doing a readaloud of Little House on the Prairie by Laura Ingalls Wilder.
I read it first I suppose 40 years ago when my own kids were coming on to the right age (come to think of it, Prairie wasn’t part of my own childhood, either). I liked it then, and I must say it holds up remarkably well today. You probably know the general outline: it is Laura’s account of her own childhood in “pioneer days” in the late 19th Century. Apparently there has long been an issue over authorship: Laura’s daughter,
I can’t comment intelligently on the particulars, but I have to say this much: in detail, this cannot be the work of a first-time author. Writing novels is a craft, just like building rocking chairs is a craft, and you wouldn’t expect to get either one right without practice. So somebody polished and sanded and morticed the joints.
But no matter: both in objective detail and in emotional nuance, the book bespeaks first-hand experience. Nobody could have packaged it so well without a core of authenticity.
The framework is that of a classic children’s story: Laura has adventures, but she knows she is well loved and that things will work out well in the end. The perspective is that of an adult, remembering his childhood self. Marcel Pagnol, introducing My Father’s Glory, explains the style:
In these Recollections, it is not myself of whom I speak, but of the child that I am no longer. It is a small person whom I knew, and who is rooted in the air of the times …
So, secure and reassuring: but on closer scrutiny, it is a pretty hair-raising tale. We have wolves, malaria, prairie fire and the real threat of Indian massacre. And the adult reader has to wonder at the wisdom of cheerful, ingenious Pa, who hauls these four females out into the middle of nowhere, and dismisses near-calamity by observing that “all’s well that ends well!” All’s well indeed, and Pa and Ma show formidable resourcefulness in meeting their challenges, but you’d Pa might have been better advised to leave this kind of challenge to bachelors like his neighbor, Mr. Edwards (indeed, I recall that in later books of the series, Laura comes to see her father with a maturing vision, and comes to understand that there is something problematic about living as near to the edge as they do).
They say that the cowboy story is the American epic. Maybe, but you could make a case for the pioneer tale. Adults have Willa Cather, and My Ántonia; for the rest of us, there is Laura Ingalls Wilder.
A man who behaves dishonourably, especially towards a woman. ... "Cad" is the classic British contemptuous epithet of the nineteenth century. It appears, as one example, in Jerome K. Jerome's Passing of the Third Floor Back: "That you and your wife lead a cat and dog existence is a disgrace to both of you. At least you might have the decency to try and hide it from the world - not make a jest of your shame to every passing stranger. You are a cad, sir, a cad!"
Its history is as weird as one might like. The word started life as "cadet", either a military trainee or a member of a younger branch of a family. That developed into "caddie", now solely a golfer's bag carrier, but in the eighteenth century any lad or man who hung about in the hope of getting casual employment as an errand-boy, messenger or odd-job man. Both "cadet" and "caddie" were shortened to "cad". ... The shift seems to have happened at the
This is wonderful, and it prompts me to return to a question that has bugged me before: can one be a “cad” today? Yes, I know that men continue to behave badly. But isn”t caddishness a form of misbehavior that arises only as part of a particular social context?
An answer to me would be: words change their meanings. A man can still be a “cad” even if the term carries a different resonance than it might have carried for Jerome K. Jerome (I wonder when, where and how often (if ever) Carrie Bradshaw refers to anyone as a “cad”). Cf., “snob,” which once meant (if I remember right) an underling in a great house, and only later came to mean one who lords it over others.
I have another assignment for Michael: “bounder,” as in “you, sir, are a cad and a bounder.” Just exactly how is a “bounder” different from a “cad,” so as to require separate naming?
Fn.: Revised 20 Jan, 2008.
Well, I had read a bunch of Dickens novels. Always a little ambivalent about Dickens. Had to admire the invention and the drive, but gagged on the sentiment. And the plots are shambolic. Like Trollope better. And Thackeray (Thackeray? Yes, Thackeray.). Anyway...
“Oh, you must read Our Mutual Friend!.”
Actually, I could believe it. I knew that OMF was Dickens’ last completed novel, and I had a vague sense that it was thought to be his most mature or complex—I had heard it called his Tempest. So we tackled it in the Mr. and Mrs. Buce home read-aloud club. An ambitious undertaking, I must say; it took is all the way through
In the end, I still can’t make up my mind. Or: I guess in the end, it is a little hard to see just how one could come off calling it the best Dickens; I certainly liked Little Dorritt better. I can’t quite get my head around Bleak House, but on the whole I would say that one is better, too. And maybe Great Expectations. And David Copperfield. And Pickwick.
Which seems to leave OMF fairly far back in the pack. It’s easy to specify reasons. Of course no one reads Dickens for the plot, but the plot of this one appears even more ramshackled than most. There was never, so far as I can grasp, any remotely plausible motivation for the protagonist’s having acted as he did. Another principal character makes a sudden, sharp, unmotivated, shift in personality—and then a few chapters later, another sudden, sharp, shift back. There’s some galumphing satire of the high life that tries for comedy and ends up with arch. There is a thread on which Dickens tries to make his peace with Jewish readers by seeking to paint a “sympathetic” Jewish character, and ends up with a Rube Goldberg creation who has no plausible humanity at all.
And yet, and yet. … And yet we kept reading, and enthusiastically. Somehow, in all this farrago, Dickens’ imagination keeps saving the day. He does indeed present a couple of characters so arresting that their names have passed into the language: Boffin, the golden dustman, and Podsnap, the avatar of Podsnappery—arresting, although I have to say, not quite as memorable as I might have expected, given their afterlife.
And there are others, less part of the common culture, but if anything more satisfying. That would include Silas Wegg, the villainous keeper of the dustheap; Mr. Venus, the taxidermist, who agrees as a condition of marriage not to stuff any more female humans; and perhaps most of all Jenny Wren, the “doll’s dressmaker,” one of the strangest and funniest grotesques in all of literature.
And there is more than just character. I’d have to concede that Dickens here does as well as he has ever done in painting “big-picture” London—all classes of society, from the mudlarks scrounging in the riverbed, up through to the grasping social climbers on the edge of riches and power. And the River: Dickens has never done better with his beloved
He’s got a good premise here, too, in “dust”—aka garbage, detritus, merde, not all that different from money which, one way or another, everyone seems to seek.
A good premise, but in the end, it doesn’t quite work. Sometimes it just gets lost in the teeming multitude. More tellingly, it comes to seem labored and overdone. For here we are back to a central truth about Dickens: he really doesn’t how the world works. He wants to believe he does, and I suppose he thinks he does. But the nearer he gets to the nuts and bolts of ordinary life, the further he descends into mawkish platitude.
So, at the end of the day, a mixed grade. The center doesn’t hold. But the edges—ah, they are often quite wonderful. At 800 pages, if he keeps you turning, and turning, and always coming back for more, why he must have been doing something right. And we did, and he did.
Kudos to Naked Capitalism for showcasing a story that deserves all the play it can get (link): a lawsuit against Merrill Lynch, alleging that they sold securities to (to the City of Springfield, MA) without adequately disclosing the risk—in the argot of the trade, to a “stuffee.”
Excuse me for askin’, but could it be that that the stuffing of shaky securities is not just an anomaly at Merrill, but rather part of the firm’s grand business plan? Seems like just a heartbeat ago that Merrill was up to its eyebrows in what remains the galaxy’s largest-ever municipal bankruptcy—the debacle in Orange County, California, triggered in large part by the fact that the incompetent in the county treasurer’s office allowed his portfolio to be cargoed and swamped by any bit of leftover diddley-poo at the Merrill supersalesman chose to unload (link)?
Here’s news, folks: your banker is not your friend, any more than your used-car dealer, or your neighborhood crack pusher. In this respect (though not necessarily in all others), your banker is no different from the pump-and-dump bucket shop: the salesman gets paid only if he moves product, and the end of the trail is you.
Brad Setzer and Daniel Gross follow the money, and it takes them a long way from home. First, Setzer (link):
China’s state banks likely – this is the only point here where there is some real doubt – added around $150b to their foreign portfolio, or would have, had China not made it harder to borrow from abroad and thus forced them to pay down some of their external debt. The state banks' dollar purchases reduced the central bank’s need to intervene in the market (apparently the exchange rate risk remains with the government). The central bank basically told the state banks to hold more of their required reserves in dollars.
The China Investment Corporation likely had about $17b to invest abroad – as the majority of the funds it raised in 2007 were used to buy the central banks’ stake in the state banks and to recapitalize China Development Bank. It will get something like $105b early in 2008. Maybe $45b to $50b of that is already committed to the recapitalize the domestic banking system, leaving up to $60b more to invest abroad. But the CIC is still the smallest official investor among the BRICs.
Sum it up and the BRICs added just a bit under $800b ($760b) to their formal foreign exchange reserves (the total would top $800b if I counted
Goldman started dreaming of the BRICs well before energy traders started dreaming about $100 a barrel oil. The Gulf can hardly be left out of the discussion today.
The Saudi Monetary Agency’s foreign assets likely increased by $75b in 2007 -- they were up over $60b through November (Table 8a, in Saudi riyal). Saudi pension funds added another $5b.
The Gulf's other central banks likely added close to $50b to their reserves – though we are still waiting for data from the Emirates for the second half of the year.
The big existing Gulf investment funds – the Abu Dhabi Investment Authority (which, incidentally is likely to be bit smaller than the $875b to $1 trillion total that is commonly cited; see Mohsin Khan’s statements in the FT), the Kuwait Investment Authority, the Qatar Investment Authority and the confusing jumble of Dubai investment funds (some belonging to Dubai, run by Sheik Mohamed, and some belong to Sheik Mohamed, ruler of Dubai) – likely added around $100b to their assets. The $100b total doesn’t count any additional funds that they borrowed to finance some of their more aggressive strategies, or the capital gains on their existing holdings. $100b is what the funds got from their countries surplus oil revenues and the interest on their existing holdings.
Meanwhile, Daniel Gross finds trouble at the other end of the pipe—the filthy rich aren’t spending their money here, either (link):
The latest investment trends similarly lead me to think you may not be acting in the national interest.
Just when the economy has started to take on water—and we don't know if we've just sprung a leak or we've hit an iceberg—you are racing for the lifeboats. Please, don't abandon us. Ski at Sugarbush instead of Gstaad. Invest in P.F. Chang's China Bistro instead of
Update: Thank heavens for those overseas markets (link)!
Update II: Guess it goes both ways (link).
You may remember Chan is Missing (1982) (link) a watchable little film about Chinese-Americans in
It is known to be one of the first major American film productions in which Chinese Americans are portrayed in a realistic fashion, using many non-actors, in contrast with other films in which Chinese and Chinese Americans are portrayed in predictable and limited roles based on stereotypes.
Fine so far, except the co-star is Marc Hayashi, and if that name is Chinese, I will eat my cheap foreign-made shirt. Apparently the director assumes (apparently correctly) that his earnest audience wouldn’t know the difference between Chinese and Japanese.
Evidently it is a durable tradition. Chinese fortune cookies apparently come from
Ms. Nakamachi is still unsure how exactly fortune cookies made the jump to Chinese restaurants. But during the 1920s and 1930s, many Japanese immigrants in
Martin Wolf, one of the doyens of free-market orthodoxy, says it is time for public regulation of bankers' pay (link):
No industry has a comparable talent for privatising gains and socialising losses. Participants in no other industry get as self-righteously angry when public officials – particularly, central bankers – fail to come at once to their rescue when they get into (well-deserved) trouble.
Yet they are right to expect rescue. They know that as long as they make the same mistakes together – as “sound bankers” do – the official sector must ride to the rescue. Bankers are able to take the economy and so the voting public hostage. Governments have no choice but to respond.
Nor is it all that difficult to understand the incentives at work. …
It is the nature of limited liability businesses to create conflicts of interest – between management and shareholders, between management and other employees, between the business and customers and between the business and regulators. Yet the conflicts of interest created by large financial institutions are far harder to manage than in any other industry.
That is so for three fundamental reasons: first, these are virtually the only businesses able to devastate entire economies; second, in no other industry is uncertainty so pervasive; and, finally, in no other industry is it as hard for outsiders to judge the quality of decision-making, at least in the short run. This industry is, in consequence, exceptional in the extent of both regulation and subsidisation. Yet this combination can hardly be deemed a success. The present crisis in the world’s most sophisticated financial system demonstrates that.
I now fear that the combination of the fragility of the financial system with the huge rewards it generates for insiders will destroy something even more important – the political legitimacy of the market economy itself – across the globe. So it is time to start thinking radical thoughts about how to fix the problems.
Up to now the main official effort has been to combine support with regulation: capital ratios, risk-management systems and so forth. I myself argued for higher capital requirements. Yet there are obvious difficulties with all these efforts: it is child’s play for brilliant and motivated insiders to game such regulation for their benefit.
So what are the alternatives? Many market liberals would prefer to leave the financial sector to the rigours of the free market. Alas, the evidence of history is clear: we, the public, are unable to live with the consequences. . . .
No, the only way to deal with this challenge is to address the incentives head on and, … the central conflict is between the employees (above all, management) and everybody else. By paying huge bonuses on the basis of short-term performance in a system in which negative bonuses are impossible, banks create gigantic incentives to disguise risk-taking as value-creation.
We would be better off with Jupiter’s 12-year “year”, since it takes about that long to know how profitable strategies have been. The point is that a year is an astronomical, not an economic, phenomenon (as it once was, when harvests were decisive). So we must ensure that a substantial part of pay is better aligned to the realities of the business: that is, is made in restricted stock redeemable over a run of years (ideally, as many as 10).
Yet individual institutions cannot change their systems of remuneration on their own, without losing talented staff to the competition. So regulators may have to step in. The idea of such official intervention is horrible, but the alternative of endlessly repeated crises is even worse.
The big points here are, first, we cannot pretend that the way the financial system behaves is not a matter of public interest – just look at what is happening in the US and UK today; and, second, if the problem is to be fixed, incentives for decision-makers have to be better aligned with the outcomes.
Meanwhile, Harvard’s most popular economics professor says we’d better be chary about proposals to give more food stamps to the poor. Might not be doing them a favor says Greg Mankiw (link):
Marty Feldstein may well be right that those on food stamps have a higher-than-average marginal propensity to consume. Nonetheless, I wonder if we really want to target such cyclical measures on the poorest members of society. That is, for any mean level of food stamps, wouldn't the poor be better off with a constant stream of benefits than with a benefit that fluctuates over the business cycle? Using food stamps as a cyclical tool seems to risk destabilizing some families' food consumption in an attempt to stabilize the overall business cycle.
If we are going to use fiscal policy to smooth out the business cycle on a regular basis, then we should think harder about improving the economy's automatic stabilizers. For example, imagine we enacted an investment tax credit, the size of which was a function of the unemployment rate. Firms would have an incentive to time their investment projects toward those periods when the economy was weakest and most needed a shot in the arm.
I can more easily imagine, when the economy starts to overheat, telling corporations that their investment credit has shrunk or disappeared than telling poor families that their food budget has been cut.
So far as I can tell, Mankiw has not weighed in on the question whether the president of Countrywide Financial, the poster-child of irresponsible mortgage lending, should receive a $84 million payday (link).
When Andrei Platonov gives you a location, he gives you the sight and feel and smell:
Ivanov put out his pipe with a thumb that was inured to the smoldering heat. … He smelt strongly of tobacco and dry toast, with a hint of wine—pure substances that come from fire or else can give birth to fire. It was as if Ivanov fed solely on tobacco, rusks, beer and wine.
—Andrei Platonov, “The Return,” in Soul 281-308, 283 (NYRB 2007)
There seems to be a quaint backstory to this new selection from Platonov’s work. NYRB published an earlier collection, The Fierce and Beautiful World, just a few years back (or “republished;” it appears to be a reissue of a set first issued in 1970). This new collection does not expand upon the earlier offering; the new supplants the old, and the old, says the publisher, will be withdrawn.
The new comes with a helpful introduction by Robert Chandler, who also translates some of the material (and a pompous, overblown afterword by John Berger). I do remember reading some complaints on the earlier version at the time. For example, here is an Amazon review of the earlier version (link):
Platonov is the finest Russian prose-writer of the last century, but this republication of a volume first published around 1970 is a disappointment. Firstly, the translation is mediocre; secondly, the short novel "Dzhan", the longest and greatest work in this volume, was translated from a heavily censored Soviet text. Many of the most striking, most unusual or most subversive passages of the original have been cut out.
Author of the review: one Robert Chandler.