Aaw

'Oh, daddy dear,what is a basket?'
Said a youthful and mischievous elf;
'All baskets, my boy, are children of joy,
In fact you're a basket yourself'.'

--Quote Unquote, BBC

January

Mainz, January 1813

My dear cousin, at last I write to you! Try to picture the physical condition of my brothers-in-arms and myself. We are appalling, revoltingly dirty, and we go down on our knees at the sight of a potato. When I endure such things by myself, I fall under the sway of their romantic quality, and can take an interest in them. But the presence of my brothers-in-arms makes my knees turn to water. On the whole, it was a destestable life, worse than what I suffered in Spaiin.

Farewell; write to me; a letter from France holds me in rapture for two days.

--That's Henri Beyle, aka Stendhal, to Félix Faure (not the Félix Faure who was later President of France). Beyle had just ridden back with the French Imperial Army from Moscow, after the cataclysmic defeat that effectively ended Napoleon's dreams of empire. Spain was, indeed, another nasty piece of business for the Napoleonic forces, but Beyle was never in Spain. Source: Stendhal, To the Happy Few: Selected Letters 153 (Norman Cameron ed., 1986).

100 Read-alouds

Chez Buce has achieved a milestone of sorts: we have now completed the read-aloud of 100 books. Number 100 was Marilynne Robinson's Gilead, which we picked up more or less on impulse after reading an endorsement from D.G. Myers (we'd read Housekeeping a couple of years ago).

We can't remember when exactly we started this project; must have been about 15 years ago. Only a few years in did we go back and start keeping a record; we were working from memory, so we may have missed something.

In the early years, we'd get hold of two copies and one would read aloud while the other followed along. But over the years, Mrs. B has taken up a fairly ambitious program of stretching exercises, so more and more it has been me reading while she stretches. No complaints here: I'm enchanted by the sound of my own voice, and even though we collaborate quite amiably on selections, I do as the actual reader get the last word.

The list is necessarily somewhat arbitrary. We diligently exclude stuff we started but didn't finish, like Bede's History, or the Niebelunglied (we made an exception for Proust, and a couple of Asian epics: they sneak in under the label of "selections"). Not quite cheating, we include Plato's Timaeus as a "book;" also Aristotle's Frogs. Among what's left, there are lots of multiples. We did all six Jane Austens; five each of Balzac and Evelyn Waugh; four each of Faulkner and Henry James; three each of Tolstoy, Dostoevski and Ivy Compton-Burnett. For balance, we tossed in Christopher Buckley's Thank You For Smoking.

Needless to say, I endorse this kind of program, although I must admit it takes a steady, systematic hunk of time that is thereby unavailable for anything else. I should think it would work for anybody, but does have a special virtue in our case. Under ordinary terms, we lead somewhat separate lives and the books give us a common fund of conversation (or is it gossip?).

Of course we do not intend to stop now. From Gilead, we've moved on the Marilynne Robinson's Home--first time that we've ever read the same author twice in a row, and another threefer. Anyway, here's a Google docof the list.

Dissolve the Monasteries

I've mentioned this in passing before, but maybe it needs to be spelled out.

England's great landed aristocrats in the Middle Ages--for convenience, "The Barons"--were, economically speaking, a pretty sorry lot. They spent most of their time trying to bring the king to book (think Magna Carta) or beating up on each other (think War of Roses) or generally grinding the peasants to a pulp.

When Henry VIII dissolved the monasteries in 1536-41, he was not making a direct attack on the secular nobility. He was, however, helping himself to the largest single assemblage of primo real estate in the realm. What happens next is inevitably complicated. But one way or another, the land wound up in the hands of private land-owners--but specifically not the barons (though sometimes maybe their younger brothers or surplus younger sons). These new landowners--call them "the genry"--faced a different set of problems and motivations. Although they had a kind of wealth, it wasn't so copious as to allow them to throw it around with prodigality. Instead, they had to learn to make a profit: to get to know their land, to work it, to make it productive, to make themselves wealhy, to trigger the successive upheavals in England tht climaxed in the Glorious Revolution of 1688.

In short, a stimulus program that worked. Memo to the President: dissolve the monasteries.

A Non-Rhetorical Question

Here's a question to which I honestly do not know the answer. The Republicans are obviously staking every penny of their political capital on a bit that the Obama "stimulus" will go sour, and the voters will swarm to the GOP in 2012. Is this:

• A coherent, if high-risk, strategic gamble; or

• Evidence that they are so isolated in self-pity that they can't see they are driving themselves in even deeper?

My own notion, subject to change without notice: the "stimulus" is not much of a "stimulus." But it will slosh a lot of money into the hands of a lot of people who will provide the infrastructure (heh!) for a reelection campaign in 2012.

Prognostication Update

Back from hanging out with a bunch of bankruptcy lawyers where I listened to a forecaster who left a couple of takeaway points:

• Three industries likely to get a lion's share of bailout money: health care, government, environment. These are three industries where employment is already pretty high, i.e., where qualified employees are not hurting.

• Some companies are doing just fine. Like who? Like somebody in every industry. In every industry, one-two-three industry leaders is/are doing okay, remain strong, and will be able to grow and consolidate a position in the current turmoil (does that include auto?).
  

• Housing is back at a trend line that fits the data for 2004. Ignoring the last couple of years, and recognizing that it will take some time to digest the surplus inventory, we can move up from here.

• Not all financial markets look dreadful. But markets for high-risk debt look really, really dreadful.

• It's going to take time.
  

I'm always impressed that for a room with so many $2,000 suits, there seem to be (a) a lot of Democrats; and (b) a whole lot of pathologically conservative investors.

Trendwatching: Free Universities

"Mehitabel," said Archy the Cockroach, "both of our professions are being ruined by amateurs." Professors enjoy a bit of schadenfreude at the spectacle of journalists (that would be you, Friedman!) watching their cushion of economic rents as it hisses away to nothing them. But now, look at this, folks--the Khan Academy:

The Khan Academy is a not-for-profit organization with the mission of providing a high quality education to anyone, anywhere.

We have 700+ videos on YouTube covering everything from basic arithmetic and algebra to differential equations, physics, and finance which have been recorded by Salman Khan. He has also developed a free, adaptive math program available here.

To keep abreast of new videos as we add them, subscribe to the Khan Academy channel on YouTube.

Translated, so far as I can tell, an entirely free-gratis set of 700-odd (sic) mini-lectures on heaven knows what. Well, to be fair: there is a certain propeller-head tendency here, with a lot of geeky math and finance--so far as I can tell, nothing on the sonnet.

I saw it a few weeks ago and wondered what the catch was. But I can't see a catch: this just seems to be a guy with a well-nourished cortex who just likes to tell the world what he knows. Or a the say at the J school, we want people to pay us for what he seems to be giving away for free.
For comparison, here's an "accounting" version of the same thing.

Where Is He Now?

Just quoting Letterman is brain-dead blogging but I thought this bit (on "whatever happened to George Bush?") is a keeper:

Within months of leaving the White House in January 2009, George and his wife Laura divorced. George moved to the outskirts of Portland, Oregon where he got work as assistant manager of a paving company. By the end of the year, he married the company receptionist, Bethany, and they have two children, Ethan and Charlotte. George is now co-owner of the paving company, and in his spare time he enjoys watching NASCAR and participating in chili cook-offs. He says he liked being President, but he wouldn't trade his new life for anything.

The visuals helped.

Markets in Everything

Intern brokerage.

Your Go-To Guys for Stimulus-Watching (And Some Bullet Points)

Or at least mine, would be this crowd here. Meanwhile, here are a bunch of things I know, I think:

• We will never again in my lifetime be as rich as we (thought we) were for these past ten years. I could have said the same thing with truth were I the age I am now in 1929.

• "The multiplier"--how much bang for the stimulus buck?--is an empirical question on which the data are almost certain to be soggy or equivocal. This is an inescapable truth that neither side seems willing to address candidly. My own untutored guess is that there is (a) some; and (b) we don't know how much--and would not know how much even if we had perfect foresight as to exacly how much we will spend, and on what.

• Projects that are good for infrastructure may not be good stimulus, and projects that are good stimulus may not be good for infrastructure.
  

• The vast majority of voters (and Congresspeople) don't get that last distinction. They think if it looks looks like a pet project of theirs (aka "infrastructure"), then it must be good stimulus. The more I see of the current proposals, the more they look to me like pet projects and the less they look like stimulus.
  

• Conservatives aren't willing to admit that some stimulus projects work. World War II was a stimulus that works. Henry VIII's confiscation of the monastaries (i.e., and redistribution to eager beaver entrepreneurial gentry) was a stimulus that worked. Indeed, breaking up great estates and distributing land to the peasants is probably often a stimulus that works.

• Liberals aren't willing to admit that a lot of putative stimulus takes money out of other productive uses or drives up inflation.
  

• Politicians love "projects" not merely because they like to please constituents but because they like things they can put their name on.
  

• When push comes to shove, your chances of being reelected are probably better if you slosh a lot of money for lousy "stimulus' than you are if you forebear to do anything because you can't find a good stimulus.

• A hard headed skinflint like Warren Buffett, who understands everything I have said here, is nonetheless for a hefty "stimulus" because he believes the appearance of doing something can sometimes work better than not doing anything at all. And he is correct.

The amount that we end up spending will be vastly greater than anybody acknowledges today.

Uh, Say Again? (Rush Limbaugh Department)

Did he mean this?

Gingrey apologizes for Limbaugh criticism

Well, I guess it could mean:

• Gingrey apologizes to Limbaugh for what Gingrey said about Limbaugh.

• Gingrey apologizes to God Limbaugh's presence on the planet.

The reader is invited to make his own guess.

HT: Thanks, John.

Remebering Ed Gramlich

Rescued from the bin: jaded as I am from the Wall Street Journal's blather about how the whole housing mess is all the fault of Jimmy Carter and those other evil Democrats who seduced honest and responsible bankers out of the paths of righteousness, it is refereshing to run across this item from the same Wall Street Journal in 2007, chronicling the career of the late Ed Gramlich:

Edward Gramlich, who was Fed governor from 1997 to 2005, said he proposed to [Fed Chairman Alan] Greenspan in or around 2000, when predatory lending was a growing concern, that the Fed use its discretionary authority to send examiners into the offices of consumer-finance lenders that were units of Fed-regulated bank holding companies.

"I would have liked the Fed to be a leader" in cracking down on predatory lending, Mr. Gramlich, now a scholar at the Urban Institute, said in an interview this past week. Knowing it would be controversial with Mr. Greenspan, whose deregulatory philosophy is well known, Mr. Gramlich broached it to him personally rather than take it to the full board.

"He was opposed to it, so I didn't really pursue it," says Mr. Gramlich, a Democrat who was one of seven Fed governors.

Greenspan's Response

Mr. Greenspan, in an interview, says he doesn't recall a specific discussion of the idea but confirmed his opposition to it.

There is "a very large number of small institutions, some on the margin of scrupulousness and very hard to detect when they are doing something wrong," says Mr. Greenspan, who retired in February last year. "For us to go in and audit how they act on their mortgage applications would have been a huge effort, and it's not clear to me we would have found anything that would have been worthwhile without undermining the desired availability of subprime credits."

Mr. Greenspan adds that borrowers might get a false sense of security from a lender that advertised itself as Fed-inspected. . . .

On June 29 [2007], the Urban Institute will release a book by Mr. Gramlich, "Subprime Mortgages: America's Latest Boom and Bust." [Link--Buce] It argues, among other points, that all lenders affiliated with banks and thrifts could "be brought under the same supervisory conventions as their parents seemingly without major culture shock." It wouldn't be a huge undertaking by policy makers, and it would lead to more uniform, stringent practices.
[Edward Gramlich]

Mr. Gramlich, who is being treated for cancer, says, "There are certain things that unsupervised lenders do that a Fed supervisor would not let you get away with," such as not escrowing taxes and insurance, not verifying an applicant's stated income, or assessing the borrower's ability to repay based on an introductory "teaser" rate. But he said the proposal's reach would have been limited by the fact that many lenders would still have no federal supervision. . . .

[T] Fed generally leaves regulation of nationally chartered banks to the Office of the Comptroller of the Currency; of securities-dealer units to the Securities and Exchange Commission; and of consumer-finance companies to the states.

However, state regulation is generally considered inconsistent and usually less rigorous than federal oversight. Moreover, 18 states offer some form of exemption from state regulation to bank holding company units, according to the Conference of State Banking Supervisors.

The Fed periodically examines the finance-company units to ensure that they pose no threat to the "safety and soundness" of their deposit-taking affiliates and to assess their controls for things like money laundering. In special situations, it does scrutinize their practices for compliance with consumer-protection laws. In 2004, it fined Citigroup $70 million for alleged abuses by its CitiFinancial unit.

But Mr. Gramlich fretted that extending those standards to holding-company units would create an unlevel playing field unless stand-alone lenders were subjected to the same thing.

Jim Strother, general counsel for Wells Fargo & Co., said oversight of bank holding company units isn't "where the need is," noting the Fed does examine Wells Fargo Financial, a major subprime mortgage lender. "The gap is for companies that aren't in the banking system at all."

Ed Gramlich died of Lukemia on September 5, 2007. The WSJ piece is by Greg Ip, formerly the Journal's Fed-watcher, and one of the best.

Opera: Gluck's Orfeo

There is something intractably odd about the Orpheus and Eurydice story. At one level, it is nasty a piece of business as anything in Grimm's fairy tales--bewildered guy gets his dearest wish, conditioned on some dopey rule that makes no sense to him or anybody else; he mucks it up and loses dearest dream forever.

At another, it has an almost universal appeal. Is there any person alive who has not wakened from a dream to feel some ecstatic vision vanishing irretrievably behind him?

And it's all about music, the universality and pervasive power thereof. No wonder that opera composers (so they say) liked to tell it and dtell it. Monteverdi was in there at the get-go with L'Orfeo, favola in musica. One hundred and fifty-four years later, Gluck weighed in with Orfeo ed Euridice aka Orphée et Eurydice, an item that must be one of the most intensely compelling items in the entire operatic canon.

On the Met's latest rendition of the Gluck masterpiece (last week's HD), Mr. and Mrs. Buce deliver a divided verdict: I thought it was one of the most engaging items I'd ever heard and could cheerfuly have rewound the tape and watched a second time on the spot. Mrs. B thought it kitschy and overdone. She's right, it was kitschy and overdone, but I'd cheerfully settle back and watch it a second time on the spot.

The deal-closer is the music itself--not so much a fullscale opera as an extended conversation between Orfeo and orchestra, with incidental support from the chorus, a bunch of dancers and, oh yes, the beloved Eurydice herself. As Orfeo, Stephanie Blythe is a force of nature--in company with, if not quite as extraordinary as, the great Joan Sutherland herself. Blythe did the whole 91 minutes without ever seeming to break a sweat: no trouble at all believing that she also does Wagner. Whether it was she who brought out the best in James Levine's orchestra--or whether it was the other way around--either way, the two turned the performance into a sustained musical conversation.

The kitsch started with the chorus--100 different people, dressed in 100 different costumes, as if to represent all of history in the shade. When I first heard of it, I thought it was a lousy idea: I figured on some kind of cosmic runway show. In the event, it was more restrained that that; it was rather more like watching the crowds at the Dorothy Chandler Center on Oscar night: ooh, look, isn't that Frederick Douglass? And here comes Genghis Khan--yo Gen, love the hat! In any event, I thought (though Mrs.B did not) that they treated it all with commendable restraint.

And the chorus: it's Mark Morris. He had them dressed as if they were study hall at the High School of Music and Art. They took rather a bit of time and threw themselves around the stage in a most un-18th-Century manner. It was wildly anachronistic, but who cares? No, strike that, I know who cares. I guess in the end it all comes down to a question of what sort of item you conceive Orfeo to be: is it a genteel and elegant garden entertainment? Or a twilight farewell to the gaudy excesses of 1o7th Century Venice? If you tend to the former view, than there was plenty to give offfense (except the music, do remember the music!). If you tend to the latter view, there was nothing here to bother you a bit.
Running time 1 hour 31 minutes / no intermission

Mark Morris’s acclaimed production returns. This complete vision for Gluck, with choreography by Morris and costumes by Isaac Mizrahi, features the artistry of Stephanie Blythe in the male title role. The alluring Danielle de Niese is Orfeo’s adored wife, Euridice, who inspires the hero to face the underworld for her sake. Music Director James Levine conducts.

Conductor: James Levine; Production: Mark Morris; Stephanie Blythe, Danielle de Niese

Back When Five Was a Big Deal

Let me see: Marie, Annette, Cecile, Yvonne and ....

Um.

Um.

D'Artagnan?

No, I think not.

[Hint: wrong number of syllables.]

A Couple of Mutts

We take great pride in the patchwork ancestry of our new leader. We are right to do so, but he's not unique. Look at what Wiki says about French President Nicolas Sarkozy:

Nicolas Sarkozy is the son of an aristocratic Hungarian immigrant father, Pál Sárközy de Nagy-Bócsa (Hungarian: nagybócsai Sárközy Pál; some sources spell it Nagy-Bócsay Sárközy Pál; ... and a mother of French Catholic and Greek-Sephardic Jewish descent, Andrée Mallah. His Greek-born grandfather, Benico Mallah (former Aaron Mallah), was a physician from Thessaloniki. Benico, who left for France to become a doctor, was the son of Mordechai Mallah, one of the eight sons of Aaron Mallah, founder of the Rabbinical School of Thessaloniki.

Pál Sárközy was born in 1928 in Budapest into a family belonging to the lower nobility of Hungary. The family possessed lands and a small castle in the village of Alattyán, near Szolnok, 92 km (57 miles) east of Budapest. Pál Sárközy's father and grandfather held elective offices in the town of Szolnok. Although the Sárközy de Nagy-Bócsa (nagybócsai Sárközy) family was Protestant, Pál Sárközy's mother, Katalin Tóth de Csáford (Hungarian: csáfordi Tóth Katalin), grandmother of Nicolas Sarkozy, was from a Catholic aristocratic family.

So, a couple of mutts. Expanding on this topic, Ignoto asks: what is the difference betweeen a mutt and a mongrel?

Very good question. My guess would be that "mutt" is far the more acceptable term: almost a term of endearment; one can use it on oneself, as a form of comic self deprecation. "Mongrel" inspires dark fantasies of miscegenation and similar ugly stuff.* There never was a comic strip called "Mongrel and Jeff." Maybe I can file this one next to "Cad and Bounder."
---
*Idling in the campus bookstore just now, I see a copy of Clarence E. Walker, Mongrel Nation: The America Begotten by Thomas Jefferson and Sally Hemings. Sounds like a snarl word to me.

Obama Administration, Day #7

Prominent lefty blogger:

I suppose President Obama deserves credit for trying.

Okay, beyond the snark: the writer is addressing what he calls the "good faith effort" to win support for the stimulus package. I am of at least one and a half minds about this. I certainly do not want to go back to the days of Karl Rove and 50.01 percent--not good government and in the end, not even very good politics. I believe in talking to your worst enemies (or at least listening, amazing what you might learn). But I've got the uneasy sense that Obama thinks he might accomplish something with all this earnest goodwill. That's an idea that is best approached with far more skepticism than hope. Why, it's almost as if he was talking to an Arab TV network.

Idle question, did any ally of FDR's greet the seventh day of his administration with "I suppose he deserves credit for trying"--?

Appreciation: Burton Malkiel

For longer than I can remember,* I've been recommending Burton Malkiel's A Random Walk Down Wall Street, to students interested in finance--particularly to students who are so misguided as not to enroll for my very own law school basic finance class. I just lately noticed that it is now in its Ninth edition; I don't suppose I have read it since, maybe number four, so I figured I'd better give it a look-see to find out whether it still held up.

Verdict: with qualification, yes. It's accessible and witty and jam-packed with common sense. Whatever its shortcomings, I still can't think of a better way to ease newbies into investing.

It does show some signs of age: my intuition is that the "chartist/technical" school investing is not nearly as powerful as it was a few years ago. Malkiel's demolition of technicians is a pleasure to watch and enjoy, just like a 28-car pile up at the stock car track. But at this point, it might be using a cannon to kill a pea. On the other hand, Malkiel clearly keeps up: he's got a good, brisk summary of some of the high-saliency findings from the new behavioral finance, although he doesn't seem to approach it with the same phyrronism that he has applied to almost every other vogue in financial analysis.

Perhaps sadly also, he doesn't seem to have caught up with "alpha" or "chasing alpha," but I strongly suspect he would approach this topic with the same withering contempt he visited on "the tronics" and "the nifty-fifty" and "the dot-coms" and all the other hubba hubba manias that have put us through so many cycles of boom and bust. And I think he might have done more to point out how far we have moved away from "classical" finance theory (MPT, CAPM, the whole nine yards)--yet how utterly lacking we are in any plausible doctrine to replace it.

My real qualification is one that is hardly his fault: he wrote before the current uproar. I do wonder what he might say about an 8,000 Dow and 10 percent unemployment and credit paralysis. My first thought is--oh, he'd have to revise. But on second thought, maybe not. One of the fascinating things about Malkiel all the way through is that for such a nihilist, he's such an optimist. Malkiel's world is cluttered with booby traps: gimmicks, frauds and self-delusions. Yet his vice remains: go ahead and invest anyway. Don't expect a quick fix; don't be fooled; don't think you can outwit the forces of evil. Diversify your portfolio; flirt with the fundamentalists; be prepared to hang in for the long run and don't panic.

But whether I got him right or not, I can only hope he's working on a tenth. And my recommendation to students still stands.
=====

*I thought I had first read it in law school. But I took my only law school finance course in 1969, and Malkiel's first edition didn't come out until 1973. So much for meomory.

McCain is Right on the Economy

Link. There. I thought I'd never hear myself say that. And, okay, he is not very right--but even a little right is a stretch.

I mean--okay, forget all that stuff about "making tax cuts permanent;" the Republican mantra is that we never have to pay for anything, ever, and that does not deserve to be taken seriously.

But payroll taxes--isn't he right that if we really want to get money back into the economy quickly, then a payroll tax about the fastest way to do it? I mean, short of firing off a cannon full of dollar bills?

Flip side: yes, yes, I know the Republicans are engaged in a lot of inspired silliness about wasteful spending. But at tne end of the day, we are going to find that a whole lot of the "stimulus" spending has nothing to do with "stimulus" at all (can you say "Washington Mall"?).

I'ts beginning to sink in on me that each side of this equation can screw things up in its own way: Republicans, by cutting the wrong taxes, Democrats, by pushing the wrong spending. Either way, it is looking more and more like a little economic ice age, and it may last for quite a while.

Afterthought: Does John Boehner think he is going to make points by attacking the public funding of condoms? Isn't there a good chance that that will turn out to be the one universally popular in the whole package?

Heh (Inauguration department)

Andy Hamilton on the BBC says that Elizabeth Alexander, the inauguration poet, took advantage of the fact that she was standing behind bullet-proof glass.

Barack Shows His Color

Here's something I've been waiting for from Barack Obama: flashes of irritation. I mean--he's always mister cool, mister warm smile, mister million miles away, a fascinating study in the kind of emotional remoteness you need to develop in order to survive as a Kansan-Hawaiian-Indonesian-Kenyan college boy, law student, etc. The kind of guy that would wear his white shirt with the sleeeves rolled down and buttoned while roller-painting a wall.

But last week we learned that he showed a little color in the press room when the gaggle tried to get serious about what he thought was just a ceremonial occasion. And this morning, we learn that he snapped at his own beloved sidekick for cracking his knuckles too loudly (the sidekick--that would be Rahm Emmanuel--apparently snapped right back).

As the president's therapist and meditation counselor, I would say: it's about time: nobody can maintain Obama's icy emotional discipline for long without sending his blood pressure into the nosebleed zone. As a heartless bleachers-seat politics watcher, I say: hoo haw, some entertainment at last. Hey, fight, fight! As a manager of the presidential image, I'd say I'm not sure. A few breaks in composure are probably inevitable from the Leader of the Free World. But a little of this goes a long way with the voters: snap just once at the wrong guy (or child, or kitten) and watch your poll numbers hurtle down faster than you can say "pardon me."

Update: Oh, and Joe Biden. Of course. But I think we see the emergence of an impressive pattern here. In all three cases (Biden, Emanuel, the (collective) press) we have creatures who are by nature impertinent, loquacious, and unhousebroken. Obama is none of these three. Yet he has made the choice, eyes open, to associate himself with this kind of riffraff these people. Well, I guess you could say athe "choice" of the press was somewhat constrained: if you go into politics, you are stuck with it. But in the case of Biden and Emanuel--two of the people closest at his side as he embarks on this great adventure--I think you'd have to say that he took them warts and all, well knowing how they would act; I wonder if he knew also how he would respond?

Let Me Rephrase That ...

Filipino receives first US anti-child labor award

--Michael Quinion, World Wide Words

Quinion also has "Shoes 3 for $20," which brings to mind the Snopes in Faulkner's Yoknapatawpha County who steals a carload of left shoes.

I'll Bet...

Zsa Zsa 'loses $7m in US fraud'

By Peter Bowes BBC News, Los Angeles

Veteran actress Zsa Zsa Gabor is said to have lost at least $7m (£5m) as a result of investments with the accused US businessman Bernard Madoff.

Ms Gabor, who is 92 next month, is said not to be taking the damage to her nest egg well (emphasis added).

Link.

...but the Bernie fact of the day is the one surfaced in the long New York Times profile:

He was, for instance, an avid collector of vintage watches and took time each morning to match his wedding ring — he owned at least two — to the platinum or gold watch band he was wearing that day.

Two wedding rings? I don't think I know anybody with two wedding rings. Well, I mean, not from the current marriage.

Really, Really Old?

Ever notice how many of the legends in the investing game are really, really old? I mentioned the other day that Peter L. Bernstein, the great chronicler of finance theory, had turned 90. But he doesn't have much on some of the giants in his own chronicle. Harry "diversification" Markowitz, who got the ball rolling in 1952, was born in 1927 (so, 81 next August). William ("CAPM") Sharpe is a relative kid, but he was born in 1934. An even more influential writer would be Burton (Random Walks, 9th Edition) Malkiel, 1931. And the feisty ex-editor of Barrons, Alan Abelson, was born in 1925. In the world of hands-on investing, we could start with Warren Buffett (1930), and a kid next to his partner Charlie Munger (1924). Among public figures, you'd have to name Mr. anti-inflation Paul Volcker (1927), keeping company with Mr. fiscal conservative, Pete Peterson (1926). As a kind of cross-over, there is market plunger and card sharp Ed Thorpe (1932).

What explains this --clean living? I suppose people like Buffett have to live a long time to prove that they are really good. But Markowitz and Sharpe are still dining out on work they did in their 20s. I suppose clean living may have something to do with it. Many have remarked on how the private lives of Buffett and Volcker are almost comically dull. But how explain Thorpe, who spent a good deal of his youth at the blackjack table.

Anyway, what's important to me is that I can survey this crowd with the same enjoyment I feel in the lobby of the Metropolitan Opera: at 72, I feel like a veritable stripling.

Where's The Bookstore?

Update: FALSE ALARM IT'S RIGHT BACK WHERE IT SHOULD BE. Now, for a little updating...

That's odd; at least as of a moment ago, the "Amazon Bookstore" I had created and posted at left, seems to have disappeared and been replaced by a generic bookstore ad. An accident, or are they phasing it out? I admit I hadn't added any inventory in the last several months, but you would think they might have told me...

A Fragment on Torture

Hlzoy and Glenn Greenwald and others are doing a superb job of staying on the issue of possible prosecution for those who left their fingerprints on the late administration's policy of torture.  I won't presume to track all they are saying, but I will offer one thought: if we are going forward with prosecutions, let's make sure we will focus on something other than the mugs on the front line.   Let's make a general rule: heads near the top of the totem pole must roll, or no heads may roll at all.

The relevant example is Abu Ghraib.  If Wiki has it right, one general (a woman) got her library card suspended busted to colonel. A couple of colonels drew some brisk slaps on their wrists. But for the brass, that was the end of it.

Meanwhile, seven grunts went to the stony lonesome. Let's stipulate that these are adults we are talking about, old enough to be responsible for their own conduct. Let's stipulate also that they are a pretty sorry lot: in particular, Charles Graner, who seems to have been a kind ring-leader, appears to be a specially unpleasant piece of business (though apparently it did not prevent him from impregnating one of his colleagues and marrying another; women like bad-news guys).

Let's stipulate all of this but let's remember also: there is an issue of leadership reponsibility here.  Granted that the defendants were all adults, still they were by every account unsophisiticated, gullible and lacking in any kind of foundation that you might expect them to need to make right decisions.  The Army  knew that, or had every reason to.  The Army took them, and the Army took on the responsibility to make sure they did not misbehave.  And the civilians who are responsible for the Army fall into the same bin.

It is commonly said that criminals are mostly pretty dumb.  I have said so myself, but I want to revise the point: dumb criminals are dumb, and wind up going to jail, often for conduct that was engineered by others.   Smart sociopaths learn to avoid the vulgarity of mere crime; learn to work in the white space around the letter of the law, and to let others do their dirty work while they stay back with the brandy and cigars (recall that nobody can document Hitler ever saying "go kill all the Jews."  Of course that is exactly what he wanted, but he knew how to make it happen without ever leaving a pheremone behind).

Smart sociopaths are, correspondingly, desperately difficult to convict.  So be it.  But let's make a deal with ourselves: if it is clear that we cannot get somewhere near the top of the chain of command, let's let it go.  Let's promise ourselves not to try to delude our conscience by hanging out to dry some of the mules who ought to have known better, but who did not know better, while letting the chariot drivers whirl away.

Truer Than They Know?

One of the websites I like least to deal with is Fidelity Investments--don't ask for details, I'll just be a bore; but trust me that they do not have their act together.

Just tonight I got an email from the poor guy who has to deal with me saying he was sorry that their service did not meet my execrations.

Sic. I'm thinking, I'm thinking.

Oh. That.

President Obama listened to Republican gripes about his stimulus package during a meeting with congressional leaders Friday morning - but he also left no doubt about who's in charge of these negotiations. "I won," Obama noted matter-of-factly, according to sources familiar with the conversation.

Link. Well, now that that's clear... But I've said before, I think that part of what's going on in Washington is that nobody much fears him, and that a little more fear might be wholesome. I suppose it is hard to blame Republicans for forgetting that they don't own the shop any more. I guess it is inevitable that they are going to poke and test to find out whether they can roll him. Results are certainly not in yet; maybe they can roll him. "I won" is not a policy, or even a strategy. But it is a nice start.

Sign of the Times

Not sure I've seen anything quite like this for a while: driving out of the Safeway parking lot, I pass a guy with a signboard--no, actually a brown paper shopping bag, with hand lettering. He looks housebroken: 40ish, poncho (it's raining), hat. The sign says:

Please Help.
Engine burned out.
Got to get to...

...but the rain had washed away the rest.

Oy. Hope he gets to sleep someplace warm tonight. And no, I did not stop to help.

Update: Apoligies; the earlier misspelling was mine, not his.

Best. Poetry. Review. Ever

“I like this poem because it is all denotation and no connotation; because it has only one level of meaning; because it is not ironic, paradoxical, complex, or subtle; and because the meter is monotonously regular.”

For details, go here (link).

A Good Ol' Boy?

CNN is on behind me and I'm hearing the gaggle with the new Obama press secretary, Robert Gibbs. All I can think is the boy has a southern drawl--a little bit like, say, Roy Blount Jr. (the gracious and charming essayist/comedian, not the lizardly politician). Or maybe a brutally toned-down Jeff Foxworthy. Two things I'm wonderin':

• Gibbs seems to have come by his drawl honestly: apparently is an Alabama boy who went to school in North Carolina. I remember his predecessor, Scott McClellan of Austin, Texas, and I don't remember a drawl on him. Okay, maybe the slightest, but hardly enough to notice. Is it something about Texas over Alabama? About the plugged in Keeton clan, of which McClellan is a part? That Austin is not a part of Texas? Or did he train himself out of it, like some Britons practice to talk posh?

• More important, will it help? Blount and Foxworthy are charmers. Is there something about the awshucks good-ol'boy persona that inspires confidence, as in "hey, you can trust me"--? My guess: maybe a little, but not much. Might help him in a pinch, but won't save him over the long pull. Much more helpful, I suspect, might be the fact that he was, as I learn, a soccer goalie.

LiveBlogging the Kindle Again

My Kindle greeted me this morning with a message of congratulations on being an early adopter. My heart sank. The last thing I want to be is an early adopter of anything--high prices, exponential inconvenience. Indeed, that's why I waited a year. But an early adopter I am and I know (or at least I hope) the inconveniences I am experiencing are not those that will be suffered by those who come later. Here are a few notes:

• It's terrified of water. No, I am terrified of water in proximity to the kindle. I am a clumsy ox: I daily spilll coffee, fruit juice, fizzy water, and would cheerfully spill house paint or battery acid if I had the chance. I trashed one laptop last year with a glass of champagne (it was old). I think Kindle is still a bit on the pricey side, and I'd be pretty glum if I had to buy a new one before I had amortized the old. I don't leave it on the bedside table with a water glass. I'm skittish about taking it out next to coffee. I wouldn't even think of taking it in the shower--oh wait, I don't do that with paper books either.
  

• Keeping track of what's important can be a nuisance. Note-taking is clumsy and inconvenient. "Clipping" is clumsy and inconvenient. Worst, I can think of any way tdo export these notes: if they want a serious academic audience, they are just going to have to figure out some way to team up with Evernote, or Zotero, or somesuch. Oh, and by the way, how do you cite it? You don't get page numbers; you get line numbers, which vary as a function of the selected type size. I assume there is a committee at work on this one somewhere.

• Oh, and footnotes. They promised footnotes. Right now, my Kindle book is Peter L. Bernstein, Capital Ideas Evolving. It has two sets of footnotes: "asterisks" and numbers. Kindle does give links to the asterisks but not to the numbers. I suspect this may just be an operational error (the kind of thing you live with if you are an early adopter?). But if they intend to make it a practice, that's another reason why it will be useless for scholarly work.

Bottom line: I still like it, pretty much. I seem to be using it a lot. It's convenient on the exercycle and in bed. It pops easily into the backpack, although I must be careful to keep it where it won't get rained on, and I'm still carrying a backup book for places where I can't use it. But as the fella says, times change and we must change anon. Or was it anon who said that? More later.

Slate and the Missing Moldovan

Brian Phillips at Slate has a cute piece up this morning on Masal Bugduv, "Moldova's finest," who happens to be, well, you know, imaginary (link). Phillips makes a heroic attempt to suggest there's some deeper meaning here although I'd say it is much more in the way of just enviably clever writing. But he set me to thinking--fake ballplayer lost in the underbrush of the not-quite-first-tier league tables. Where have I heard that before?

Well, actually, I suspect lots of places: this is probably an easy scam to perpetrate, and the lesson is straightforward: fans take themselves way too seriously, while there is really way more in the way of sports info than any of us can, or wishes to, assimilate.

And in particular it brings to mind the late, great, A.J. Liebling who gleefully recounted how, in his days as a neophyte sports-tracker at the New York Times, he created a wholly imaginary placeholder to flesh out the box scores and such. New Yorker writer David Remnick recalls:

Some nights, according to Liebling, [his creaation] officiated games throughout the city. Liebling claimed that when this crime was discovered his boss fired him for being irresponsible. He told the story repeatedly, and with relish, and it may even have been true.

I have always loved that story, not least because I was once a baby sports-tracker and I doubt there is any of that ilk who hasn't fudged the roster at least once. I also remember fragments of a story about a "Chinese all-American halfback," which I had thought also involved Liebling but Google doesn't recognize it.

Phillips also discloses that "Masal Bugduv" apparently isn't even Moldovan, which is par for the course. My impulse was to assume that there's something here saucy or at least impertinent. I couldn't dope it out; I even tried spelling it backwards, recalling "Llareggub," the cozy Welsh village in Dylan Thomas' "Under Milk Wood," but no dice (go on, try it)." It turns out that there is something saucy or impertinent, but its Irish. Should have guessed.

Oh, and one final note. Did I mention that Liebling's imaginary box score personality was "Ignoto," Italian for "unknown?" Faithful readers of Underbelly will reccognize that Ignoto is alive and well and contributes regularly at this venue.

==
*Don't you wish you had written:

"...bikini pictures of [soccer] players' girlfriends (who seem to roam the earth together in a giant conjugal yacht, like the Beatles in Yellow Submarine)."

"...the old scout's adage says, even the most talented young striker will struggle if he has no corporeal being."

Roberts the Mutilator

Language guru Steve Pinker entertains himself and us at Justice Roberts' expense with his comments on the swearing-in snafu, and how the Constitution just isn't good enough for our chief justice (link).  But what got  me was this bit:

In his legal opinions, Chief Justice Roberts has altered quotations to conform to his notions of grammaticality, as when he excised the “ain’t” from Bob Dylan’s line “When you ain’t got nothing, you got nothing to lose."

No joke? Doesn't this guy know the first thing about conscientious collection of data? Do we infer that he would do the same thing wifh confessions? With the B of A balance sheet (now, that's a thought, actually).  With, um, you know, the First Amendment?

I am tempted to, but will not, write this off as some sort of conservative thing. Quite the contrary: Circuit Judge Danny Boggs down in Louisville used to give clerkship applicants a "general knowledge" quiz--I suspect to demonstrate how learned Danny Boggs was, but let that pass (maybe he still gives the quiz, I just haven't seen one lately). Anyway, Boggs (who, I think it is fair to say, is as right-wing as Roberts) liked to include a "copy edidting" question in his quiz. And as part of the copy editing exercise, he'd spring a quotation from somebody else, the quotation including a crude grammatical error. I assume that if you "corrected" the quoted error, you were out. So Roberts may be able to rewrite the Constitution, but it sounds like he wouldn't be able to clerk for Danny Boggs.

Happy Birthday, Peter!

If I read my Wiki right, today is the 90th birthday of Peter L. Bernstein, author of the capital Capital Ideas, Against the Gods, and a whole slew of other books about finance. Enjoy, Peter, you are a resource!

Out Pickin' Up White Trash?

Just in from Fox:

Mo. neo-Nazis join `Adopt-A-Highway' trash cleanup

H/T for both headlines: Wichita bureau.

Young Folks Nowadays: Franklin Delano Who?

This is a few days old but not stale, I think: passing a TV monitor, I could swear I heard a CNN reporter say:

...since the inauguration of Franklin D. Roosevelt in--um. Um. Um. 1937!

Faithful readers of Underbelly will know that this is embarrassingly wrong (and if you don't know the correct date, I'm not going to tell you). One more reminder that the past is a foreign country to the kiddies. And as Mrs. Buce points out, there must be two CNN types in ignorance here: one, the talking head, and the other, the little voice in her earpiece whose job is to keep the talking head looking smart.

Update: A friend points out that the reporter may have been speaking of the first person to be inaugurated on January 20, instead of March 4. Could be, except that destroys the whole point of my story, not so?

Eeuw

Here's a sign from the student union (I paraphrase, from memory):  wanted, practice subjects to get paid to have their teeth cleaned at the college of dental assistanship science.  Must have pretty good teeth and (wait for it)--

Must not have had a cleaning for at least five years.

Two points:

• How can you have good teeth if you haven't had a cleaning for five years?  And

• Eeuw.

Salmon on Blodget on How Not to Fix the Times

I must say I enjoyed Felix Salmon's ungentle fisking of Henry Blodget re how to save the New York Times even though I am not persuaded by--nor can I follow--every bit of it. But hey, this is still a blog entry, and they don't have to make 100 percent sense now do they? I certainly endorse the idea that you can't treat the newsroom as a theatre for Taylorite efficiency studies. It takes me back to my time in the city room: at some point, some thimble-head sent in a time-and-motion guy whose job was to ask three minutes what the reporters were doing right now: evidently they thought the solution to the problem was to get us to type faster. But a larger issue that they missed, and that Blodget missed, is that a newspaper city room profits from a certain amount of ludic horseplay: it keeps people motivated and alert, and it serves as a great forum for the transmission of ideas (I assume that something like the same philosophy is at work in the loosey goosey management style said to reign at Google). Indeed, if there is a problem with city rooms right now it may be that the new technology has cut down on just the sort of interaction that made the old-fashioned city room thrive.

Still, I think Felix dances around the core economic problem: newspaper readers never paid for content, they paid for paper and ink and delivery; advertisers paid for content. And until somebody figures out how to bring them back into the game (or finds a substitute) the downward spiral will continue.

A final poiint: Felix likes his physical newspaper at the breakfast table, and on the train. News: the New York Times and the Financial Times were offering promotional freebies just this morning-at Kindle, for download. The FT, by he way, is priced actually higher on Kindle than the lowest available street price: evidently they are figuring that somebody (globetrotters?) will be wooed by the allure of instant-anywhere.

[For people who get their fingers greasy at the table, Kindle also offers an "automatic page turner option." I leave it to the reader to decide whether this a design feature or a ludicrous misadventure--haven't used it myself, and doubt that I will.]

Update: Thedeal.com has a nice wrapup on the general blogosphere debate.

What the Colonel Said

I'm quoting the Colonel again:

A couple of friends of Israel or perhaps actual Israelis have written to ask why I dislike their favorite country so much. They don't get it. Old Timers here can tell them that I HATE NATIONALISM. All nationalism, everywhere. Mark Twain despised organized religion and monarchy. He once wrote that mankind would only be free when "the last priest is hanged in the guts of the last king." Romantic nationalism was a new phenomenon in his day and so he did not have the opportunity to add nationalism to his list of anathemas. Patriotism is another matter. I hope that I am a patriot. Read the preface to Elie Khaddouri's "Nationalism" to understand the difference. Nationalism is mere tribal loyalty and hatred of what are seen as competitor tribes. Often the tribal self-image is a pastiche of fable and propaganda. Zionism and pan-Arab nationalism are two sides of the same debased coinage of human folly.

In Gaza we have the folly of Zionist nationalism matched against the equal folly of a form of politicized Islam that embraces Palestinian nationalism.

Adults would find a workable compromise in order to make an end of the craziness of white phosphorus shellings of schools filled with refugee civilians followed by scenes of defiance that will inevitably lead to the murder of more children. Clearly, there is a scarcity of adults in the Holy Land.

Afterthought: In a conversation a while back I quoted (what I thought was) Samuel Johnson saying that "patriotism is the last refuge of the scoundrel." My interlocutor interrupted: no, no it is public patriotism.

Um--I'm pretty sure I'm right: Johnson did not include the qualifier. But he might well have, and perhaps he would, if challenged. For more on Johnson on patriotism, go here.

Yeh, Yeh

I'm in a snarky mood today. So naturally I will want to pass on this email inviting me to a free-pizza lunch to discuss campus pilfering. It's called:

AWARENESS PREVENTION PRESENTATION

That's from the Campus police, or as we know and love them, the Department of Public Safety Prevention.

This Just In! NYT Reports that George Washington was Black!

And a slave-holding black, to boot:

They embraced a candidate with less experience than Jack Kennedy had in 1960 and elected the first black president since George Washington, a slave-holder, took the oath of office.

That's from David Sanger, The Inheritance: The World Obama Confronts, being hyped this morning on the Amazon Kindle page as "an urgent intelligence briefing." Whether it is worth more than an Obama commemorative plate remains to be seen, but I may not stay to find out.

It does recall, though, the late California Governor Edmund G. ("Pat") Brown, surveying flood damage and declaring, "this is the worst disaster since my election."

[And somehow I am reminded of the lady who said that the happiest moment of her life was "when I woke up and found my husband standing by the bed with his discharge in his hand," but that's another matter altogether.

Flucky

My friend Nancy passes on a good-natured dumb joke which, in the grand tradition of academic criticism, I will now undertake to make tedious and boring. Anyway, it's the one about the old guy who comes home about three hours late for dinner. His wife asks: where have you been?

--I had an accident.
--Oy, did you go to a doctor?
--I went to the doctor.
--Nu, vos zogt der doktor?
--Der doktor zogt az ich hob a flucky.

A flucky.

--Nu, what do you do for a flucky?
--I don't know. I forgot to ask.

A flucky. Oy gevalt. She runs to the neighbors'

--What do you do for a flucky?
--In the old country, when someone had a flucky, we always applied cold. Ice cold is the best thing for a flucky.
--What are you talking about? Cold is absolutely the worst thing you could do for a flucky! We always applied heat, that's the only thing to do for a flucky.

Cold, heat, oy! Now she is upset.  She decides to call on the doctor herself.

--Doctor, please tell me, what's wrong with my husband?
--I told him...nothing's wrong.

  [wait for it]

--He got off lucky!

Hey, I never said it was a good joke. But. But forget they oys and the gevalts and the counterfeit Yiddish. Is this not the most situation-specific joke you can possibly imagine? I mean, I can just hear (although I was never did hear) some guy in a Yiddish theatre on Second Avenue in, say, 1912, belting it out to an ecstatic house full of newbies on the edge of a new language and a new culture. You've got the awe and timidity  in the presence of medical knowledge; the the wry nostalgia, the instinct for self-protection. You can hear the know-it-all neighbors; the distraction and impatience of the doctor and perhaps best, the attention and assertiveness of the wife. I'll say he got a flucky.  And so do we.  Thanks, Nancy.

Obama Pudding

Cute.

Slim Gets Fat

So now Carlos Slim has a deal to put money into the New York Times (or maybe he doesn't--this thing looks awfully complicated). Not quite preferred, but a note with warrants with is close enough for government work. The note is a zero with a rate of 14 percent; Brad DeLong is gobsmacked and forecasts an early (or at any rate, a medium-term) bankruptcy.

He's right to be impressed but recall (a) "bankruptcy" need not mean "going out of business;" it may be a "sale to the creditors" where the going concern chugs along at a lower speed (kinda like the world economy, huh?); and (b) Slim must figure he is getting something out of the deal--if nothing more than the option to be the owner of the brand.

$250 now for $400 later, bleah. But if you pencil it out at three years and seven months, that works out just about right. ($400/1.14^(3+7/12)=$250.

I Never Promised You a Rose Garden

Hilzoy and Atrios are mulling over the paucity of pardons in the twilight of the Bush years, and in particular of his failure to pardon people from that great smorgasbord of malefactors who have served under him.

Without particularly disputing anything they say, I'd offer another insight: Bush has shown himself pretty much indifferent to the fortunes of other people period. Set aside the question of Bush team wrongdoing: there are any number of poor schmucks out there who did something ubambiguously wrong back there one day, but who got between the upper and nether millstone of a judicial system that was really more strenuous than needful. Seems to me that the system expects, indeed requires perhaps just a bit of executive discretion in precisely cases of this sort. Wouldn't have piggied my wiggy at all if Bush had done a bit more of that before he left. I suppose the upside is we've got one more reason to remember why we didn't think much of him anyway.

Clarification: And no, this time I am not talking about Michael Milken.

Krugman Leaves Me Puzzled

Paul Krugman plays a bit of inside baseball with other economists today, but of particular interest because of one baffling passage.  He's talking about the diverse views on the current crisis from conservative economists (link):

You’ve got John Taylor arguing for permanent tax cuts as a response to temporary shocks, apparently oblivious to the logical problems. You’ve got John Cochrane going all Andrew-Mellon-liquidationist on us. You’ve got Eugene Fama reinventing the long-discredited Treasury View. You’ve got Gary Becker apparently unaware that monetary policy has hit the zero lower bound.

Krugman brands these all as "non-serious arguments," which I assume means that the run of "conservative" opinion on the topic. So, why baffling? The baffling part is that nowhere on this list--nor any place else in the piece, so far as I can tell, does Krugman address what seems to me the most sensitive and perplexing issue on the agenda. That is: the multiplier--how much bang for the buck?  And what does it take to get it, and how do we know?  

There seems to me a fair amount of heat but remarkably little light in current discussions of the question.  Conservatives--this may be definitional--seem to operate on the principle that "the multiplier is one"--that every dollar emitting form the Keynesian pump is cancelled by the loss of a dollar via taxes or inflation.  A canonical formulation would be this blog entry,  which has received a fair amount of attention, not to say derision (including a bit here).  Fama's "Treasury View" piece can, I suppose, be read as kind of a variant on the "multiplier is one" argument; cf. link; link.  Krugman himself has acknowledged the issue (e.g., link).  But is remarkable how much good, general, direct analysis of the topic seems to be available out there.

The problems seem to be two, one conceptual, the other empirical.  The conceptual problem is that there seems to be nothing close to general agreement among macro theorists over how, precisely, to define the multiplier--witness the Fama/DeLong debate cited above.  The empirical difficulty seems to be that there each side seeems to be able to hoik up something in the way of numbers to support the case.

So here's an assignment for all the big brains on the econo-web: I'd love to see more of this--detached, critical, intellectually honest of the problem of the multiplier, both in concept and in practice.  And hurry up about it--that bailout money is going fast.

Samuelson on Schumpeter

Peter Bernstein quotes Paul Samuelson recalling Joseph Schumpeter:

Schumpeter taught me there are no franchises.  You are king for a day. ... Schumpeter used to say the top-dollar rooms in capitalism's grand hotel are always occupied, but  not by the same occupants."

Is Schumpeter correct, I wonder?  Two answers:

• It's what you want your kid to believe.  Kid, nobody owes you anything.  Every day you dive a 10,000 foot tower into a pail of sand.  You didn't ask to be born, but then neither did I.  Deal with it.
  

But

• There have been dukes of Norfolk consecutively since 1483.
  

Source:Peter L. Bernstein, Capital Ideas,line 601ff on my Kindle.

Obama and the Clean White Shirt

Outsourced to the Wichita Bureau again: did you notice that Obama at the service project, painting?  And that he is wearing a long-sleeved white shirt?  To paint?    He doesn't own a paint shirt?  

I think it's a shrewd call, and telling: the fact is that Obama, for all his outreach, is emotionally pretty remote.  We may see him civil, humble, courteous and suchlike, but never down and dirty (basketball may be an exception, but even there he seems to operate with a kind of contained cool).

Wichita again: "If he's going to make a point of painting, he needs to find his old Harvard sweatshirt, wash it sixty times, poke a few holes in it and wear that.

Chug. Chug. Bleah.

The Wichita Bureau, who moonlights as an ethanol skeptic, is probably enjoying a moment of schadenfreude here (link):

Biodiesel fuel woes close Bloomington schools
 
By LORA PABST, Star Tribune
  
All schools in the Bloomington School District will be closed today after state-required biodiesel fuel clogged in school buses Thursday morning and left dozens of students stranded in frigid weather, the district said late Thursday.

Rick Kaufman, the district's spokesman, said elements in the biodiesel fuel that turn into a gel-like substance at temperatures below 10 degrees clogged about a dozen district buses Thursday morning. Some buses weren't able to operate at all and others experienced problems while picking up students, he said.

"We had students at bus stops longer than we think is acceptable, and that's too dangerous in these types of temperatures," Kaufman said. ...

From a quick skim of the comments, I'd say there are a lot of jubilant anti-greens reading the Strib.

Preferred?

The Wall Street Journal reports that Mexicon zillionaire Carlos Slim is dickering for a piece of the New York Times in exchange for preferred stock.

Hello, preferred stock? Isn't that so, um, maybe 1935? So regulated-public-utility? So antique?

I know that people have bandied around the idea of "preferred stock" as a strategy for government intervention in the banking crisis. But that would be a way to jump the ideological blinders about government ownership of banks. Other than that, the standard mantra is preferred stock doesn't make any sense because the tax treatment is all wrong. And that investors don't like it because the contracts are all tailor-made and thus hard to value.

But one thing about preferred, like so many other hybrid securities: it's a tempting alternative for the debtor who can't get liveable loan terms, and doesn't want (desperately hopes not) to give up control. Could it be that we are in a new era of preferred, as anemic companies lurch desperately forward under the burden of sagging income and bloating debt?

The Trouble With Kissinger: He Doesn't Understand Power

Have long thought that one(!) problem with Richard Nixon was that he didn't understand economics--not just that he was "too liberal;" rather, he just wasn't interested, economics didn't make any sense to him and he didn't care. That explains an abomination like Nixon wage-price controls. And also, perhaps more important, why he threw away the Bretton Woods system, basically inviting the Europeans to reach for the lead on world economic issues ("Richard Nixon: Father of the Euro"?).

Now, idling through Kenneth B. Pyle's Japan Rising, my attention is called to an added irony: if Nixon did not understand economics, he had good company. That is: neither did his ally, enabler, co-conspirator Henry Kissinger, Mr. Power himself. As Pye explains, Kissinger never got Japan. And the reason is that Japan was about commerce--economics,-- and Kissinger did not understand that commerce was power.

The reason for [Kissinger's] obliviousness [to the rise of Japan] was that Japanese postwar foreign policy was characterized by economic realism, and Kissinger had little interest in economics as a source of power. National Security Council staff members under Kissinger observed that he had a "profound lack of knowledge and interest in economics" and that discussing economic issues with him was akin to discussing military strategy with the pope. He perceived Japanese diplomats as "not conceptual" in their thinking, lacking long-term vision, and making decisions only by consensus. "The Japanese do no yet think in strategic terms," he told Deng Xiaoping in 1974. "They think in commercial terms." The implication was that pursuing economic advantge was not a means of strategic pursuit of power.

--Kenneth B. Pyle, Japan Rising 15 (2007)

Let's set aside the question of whether the pope understands military strategy. An added irony here is that Kissinger was talking to the one man who understood better than any other that the way forward for China was to set aside ideology and concentrate on, yes, economics

Wups, Here's Another...

Financial acumen, John Kenneth Galbraith said, is a rising market and a short memory:

Florida Fund Manager Missing; Clients Say Money Gone

Jan. 17 (Bloomberg) -- Arthur Nadel, a hedge-fund manager in Sarasota, Florida, has disappeared and clients are concerned they may have lost hundreds of millions of dollars, according to law enforcement officials.

Nadel, 76, is president of Scoop Management Inc., which oversees funds including Valhalla Investment Partners LP. He was reported missing three days ago after he called his stepson, Geoff Quisenberry, and told him to go to his house where he had left a note, Lieutenant Chuck Lesaltato of the Sarasota County Sheriff’s Office said yesterday in a telephone interview.

Nadel’s wife, Peg, and Quisenberry, were “concerned about his welfare,” Lesaltato said. Nadel had sounded “distraught,” Lesaltato said, citing the note. Nadel’s partner, Neil Moody, said today he believes Nadel is alive and has spoken to his wife since then.

Scoop may have managed as much as $350 million, although “that may be high because performance results were exaggerated,” Moody said in an interview. He said he contracted with Nadel to manage three funds on his behalf, while Nadel alone had three others and did the trading for all six. Moody said he didn’t know anything was wrong until Nadel was reported missing Jan. 14.

Suicide Note

Moody called his broker “and the amount did not jibe with what Mr. Nadel said we had.” As much as $12 million of the Moody family’s money may be lost and how much remains is not known. “It looks very bleak,” Moody said. ...

Link. Of course, nothing compares to the (self-confessed) prince of thieves but it is still no fun if you are a customer. I'm betting he is not the last.

What Was I Thinking?

It occurs to me that there is a Supertanker-sized hole in my discussion over the past few days of Schwarznegger and Obama and their respective legislatures (link, link).

First, I responded with studied irony to the idea that Obama seems to be having trouble coming out of the box with the legislators in his own party.

Then in a heartbeat, I turned around and said that Schwarzenegger could have dented California's budget problem if he had moved aggressively at the beginning of his term when his popularity was still high.

Hu-lo. Aren't they the same? And if we live in an age when an Obama has trouble, wouldn't a Schwarzenegger have had trouble, too? Answer: very likely. What we may be seeing here is evidence of a governing system so out of whack that nobody can do anything. My only out, I suppose, is to fall back on the fear factor: to declare that Schwarznegger might have been able to scare the socks off his legislators even though Obama may not. That's my bet shot, and I'm inclined to doubt it. Looks like I was wrong the first time.

WSJ Tracks Underbelly!

It's always unsettling to be shadowed, and particularly unsettled by the Wall Street Journal Opinion page. But Kimberley Strassel seems to have been reading Underbelly; she's picked up the meme that Obama's most formidable headache may turn out to be the Democrats (cf. link and link).

I said before that the reason may be that they don't fear him. But there is a piece of melancholy good news here: it may be tht they don't fear anything enough to knuckle under and do whatever he says. This would suggest that whatever their mindsest, they aren't as stark staring petrified as just about everybody seems to have been at the inaugurtion of Franklin D. Roosevelt. Could it be that Congresspeople actually know something worth knowing? Could it be that things are really not as bad as they seem?

The Gubernator in the Evening

Debra J.Saunders, the San Francisco Chronicle "conservative" (if that is the name for it) columnist, hits a twopher for today, re California's Governor Arnold Schwarzenegger and its refractory legislature (or is it the other way around?). First (echoing Bruce Bartlett?) she argues that the Republicans can't continue to answer every question with "tax cuts! Gawwwwk, tax cuts!" "The Democrats are right," she says. "A $42 billion, 18-month shortfall is not going to be fixed with cuts alone--not when the annual general fund is $103 billion." She quotes a Republican legislator who says: "The brand of what it means to be Republican is now in jeopardy of meaning nothing." Saunders responds, "So ... the brand has come to mean: more spending without paying for it."

Point two: Saunders is not especially sympathetic with the Democrats in the legislature, but she is not about to let the governor off the hook and here I think she is onto somethiing important. "If Schwarzeneggrer had cut spending when Democrats feared him, the budget hole would be smaller. If he had raised taxers earlier, the increases would be less painful. ... Now that Schwarzenegger is govserning like an adult, he is all alone." I think she is bang on here: seems to me that Arnold basically blew off his first two (four?) years in office; my guess is that he didn't want to spend all that time away from Malibu and couldn't believe it was really that hard.

Minnesota had a similar problem with Jesse Ventura. He, too, basically wasted a good opportunity. In Ventura's case, once he realized what he was up against, he just went back to his day job (my guess is that he also needed the money; Arnold probably doesn't). Give Arnold credit for trying, but sign on with Debra that it is too little and too late.

Layoffs

Calculated Risk (is he branching out from just mortgages?) has an update on layoffs. Eeuw, scary.

Revealed Preference Thought Experiment of the Day

From someone with the nom de blog "Mellowjohn," otherwise unknown to me, in the comments at Political Animal:

Grover Norquist thinks all taxes are akin to torture.

I, for one, would be happy to let Grover Norquist go without ever having to pay Federal taxes ever again -- as long as he agrees to be publicly waterboarded every April 15.

Isn't this just a variant of "claimings-race" taxation--you tell the tax collector the value of your real estate--he either taxes at that value, or buys at that value. Hey, worked for Tony Soprano ... .

[Okay, okay, worked until it didn't but you know what I mean].

Indian License Plates

The Wichita Bureau tells me something I didn't know before: a number of Indian tribes issue their own license plates--in Oklahoma, at least, and I gather elsewhere as well.

It's not apparent in the samples linked above, but Cherokee (at least) uses a syllabary alphabet that doesn't look the least like English. Does this complicate the reading of Cherokee license plates by outsiders?* Wichita mentions also UCC filings--can you do that in Cherokee? And is confusion part of the purpose? Recall the use of Indian code talkers to hornswoggle the enemy in World War II.
==
*And what do they call us, anyway? Gringos? Gadji? Goyim? Auslanders?

What Is This About?

And why are these guys using my picture?

Current Reading: Finance

Getting ready to teach a finance class to law students, again after an eight months' break, I figured I ought to do some mainstream reading to see what kind of notions were in the showcase. On the eve of the new semester, I squeezed in four (well, three plus--I'm still not quite finished with the last one). All worth my time, in instructively different ways.

The best of the lot is surely Charles Barnard, The Two Trillion Dollar Meltdown. It's hard to imagine a more helpful account of what has gone haywire in the financial system over the past few years, including an accessible under-the-hood account of some of the more momentous banking innovations. I look forward to stealing from this guy a lot, or at any rate paraphrasing a lot of what he has to say, and perhaps the worse for the paraphrase.

I'd say almost as much for Paul Krugman, The Return of Depression Economics. Krugman is kind of a cult villain in moonbat land, but even those who don't like his politics or his combatative style will have to admit he is (a) state-of-the art technician in macro theory; and (b) a top-notch explainer of abstruse concepts. You can see why Princeton students would want to pay 30 (40? 50?) thou a year to sit at his feet and listen (to what the rest of us can get for 20 bucks, or free). The book is hampered by the fact that it was first written ad an account of the Asian meltdown of the late 90s, then reengineered, rather hastily I must say, for the current uproar. There is a connection, of course, and history is part of the point here. But if he'd written from scratch, he wouldn't be quite so top-heavy with the collapse of the bhat. Also, I can't imagine how the publisher let him get away with that title. While it does, in a sense, accurately represent the contents, I suspect that the kind of reader he's looking for will simply not recognize that this book is for him (her).

Niall Ferguson's The Ascent of Money, I wrote about earlier. I got snide with him for getting confused about bankruptcy but then I conceded that the book was, overall, quite an excellent general over view of a long and complicated history. Still true, although after reading Morris and Krugman, you're reminded of just how broad-brush his presentation is--and must be, considering how broad the task he has set for himself. I oonfess that after having read the book, I couldn't bear to watch the PBS special: the sonorous anecdotes and the jump-cut video was new when I first saw Alistair Cooke's America nearly 40 years ago, but by now the formula is getting kind of stale.

Raghuram G. Rajan and Luigi Zingales Saving Capitalism from Capitalists, is a somewhat more complicated matter. As I say, I'm not quite finished with it, but I think I get the drift: if this were a Victorian political tract, it would be entitled Incumbency: An Account of the Evil Thereof, with Proposals for a Remedy. Their point is intelligible enough: crony capitalism is not capitalism; incumbents dig in and protect themselves against (further) competition. Freeing us from the dead hand of incumbency can make life better for all, and in particular, can give opportunities to the otherwise dispossessed. This is an important, if often overlooked, home truth. I'd say it is fairly generally accepted among economists* --perhaps particularly by economists writing about development, like Dani Rodrik or William Baumol. Indeed, it probably helps to explain the disconnect between self-conceived "liberal" economists (Krugman is a sufficient example) and the voting public on issues like free trade.

RZ hew consistently to their theme and they offer a collation of helpful instances of the evils of incumbency. They make passing reference to their recipe for reform: secure property rights; transparency (which would include mandated disclosure and quality accounting standards). They are also insistent on a point that is a hobbyhorse of mine: a market is a cultural artifact--markets don't just fall from the sky they can be tweaked and formed for good or evil, and we can't expect good results just by leaving them alone.

So far, so good. But unless they are planning a boffo final chapter, they don't seem as systematic as I would like. They cover a lot of ground at a brisk pace. I complained earlier that they really stewed the pooch on the details of bankruptcy and I while I haven't spotted that kind of slipup elsewhere, I must say it does make me wonder about how good they really are at other issues I know less about. So, well worth the effort, and I do expect to finish it, perhaps this afternoon. But to be used with caution.

Oh, and one other that I almost forgot: Kenneth Pomeranz and Steven Topik, The World that Trade Made. Perhaps the reason I forgot it is that it is not a book so much as a collection of anecdotes--a kind of readers' digest of snippets from the economic history of the (post-Medieval) modern era. Apparently these were written piecemeal for some sort of trade journal. There are no footnotes (although they do add a helpful bibliography). But the stories, one by one, are well told and mostly instructive. Amazon reviewers say that this would be a great prep book for the AP history exam. All I can say is that history must be a lot more interesting than it was when I went to high school.

Takeaway point: there really is an awful lot of good, intelligent, nontechnical writing out there. I'd love to kick back and just read a dozen more (isn't that what being a professor is supposed to be about?). But as the philosopher says, stuff happens. I know that 14 weeks from now, I will look back on a semester of either success or failure and wonder--what the heck happened to all my time?
===
*Maybe it is the definition of an economist. Cf. Adam Smith:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is im-possible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and jus-tice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

Bartlett on What the Republicans Should Do Next

I never know quite what to do with Bruce Bartlett. As a former adviser to Jack Kemp, he has his thumbprints all over one of the silliest initiatives in modern public finance : the supply-side revolution which held (in its extremest form) that you can make big tax cuts without losing a penny--not a penny!--in public revenue. In fairness, I'd have to concede that Bartlett himself never ventured quite so far into moonbat land as some of his allies. He remains one of the most adventurous and (mostly) intellectually honest figures on the "conservative" (if you can call it that) side of public revenue discussions.

He's back this week (in Forbes), arguing that it's time for conservatives to put the past behind:

The original [supply-side] idea was to cut marginal tax rates--the tax on each additional dollar earned--in order to revive the supply side of the economy by stimulating work, saving, investment and entrepreneurship. Now that argument is generally accepted. I am not aware of any reputable economists on the left who want to raise the top rate back to 70%, or even 50%. The most that they talk about is going back to the 40% top rate that existed under Bill Clinton. Contrary to what some Republicans think, this will not destroy the economy; it did pretty well after Clinton raised the top rate in 1993, despite Republican claims of doom.

Republicans also have to accept that there is a limit to tax-rate reduction. Cutting the top rate from 70% to 50%, as Reagan did in 1981, provided a huge increase in the after-tax rate of return. Some taxpayers went from keeping 30 cents on a dollar of interest or dividend income to keeping 50 cents--a 66% increase. But dropping the top rate from 40% to 35%, as George W. Bush did, only increased the after-tax return by 8.3%.

That's not nothing. But one can hardly expect the same kind of economic gain from reducing the top rate a little from an already low level as one would get from reducing a very high rate a lot. Nor can we expect a small increase in the top rate from a historically low level to have disastrous effects. Yet some Republicans continually make extravagant claims for small tax cuts and predict disaster from small increases when there is no evidence to support either proposition.

Instead of defending the Bush tax cuts, most of which expire next year under laws that Republicans wrote, I think it would be better for them to abandon Bush's tax policies altogether. The evidence is pretty clear that they did little good for the economy. Therefore, getting rid of them will do little harm.

Going forward, I think Republicans should try to be the party of investment, because Democrats are basically the party of consumption. While there is certainly a case to be made for raising consumption in the short run, the fact is that many of the consumption-oriented policies being proposed by Democrats in Congress would be proposed even if the economy was booming. There is never a time when Democrats aren't in favor of more health and education spending, aid to state and local governments, and so on--just as there is never a time when Republicans aren't for tax cuts.

"Investment" for present purposes, apparently means support for privatization and revival of the Investment Tax Credit. Somewhat surprisingly, "education" in this model turns out to be "consumption" not investment (I assume this is a swipe at English majors?).

A side issue: supporting privatization, Bartlett says as if beyond controversy tdhat "Amtrak and the Post Office don't work very well." Really? I use the post office a lot these days: brisk, efficient, and the price is right. And Amtrak--back in 2006, I did a Wash/NYC commute for a few months on Acela, and I loved Amtrak. Thank you, taxpayers, for making my life so much easier, but at least you can take consolation from the fact that you have at least one happy camper.

Idle Thought (Lackadaisical Sketchmeister Division)

I assume we can look forward to a rash of editorial cartoons showing "the taxpayers" standing ankle deep in roiling waters called "the economy"? Still, I have to admit that this is one cool guy.

She's What ?

Via Philip Greenspun, I learn that Thomas Friedman proposes that public schoolteachers pay no income tax (link).

My strongest response is--Friedman's wife is a schoolteacher? Wiki reports that she is part of the (mega) Bucksbaum clan, developers of shopping centers and all-round billionaires (but 2008 was not good to them, apparently). It is said also that the Friedmans live in an 11,400 square foot house next to the Bethesda Country Club. If she truly slugs it out in the classoom every day, then I must say I tip my hat to her. But I feel there must be an angle here somewhere.

My second thought was--I wonder how many schoolteachers now pay income tax? And how many qualify for the Earned Income Tax Credit. But the answer seems to be: not that many. Comapre this with this.

Snark afterthought: just coincidentally,the average teacher's pay seems to be somewhere in the range of what this guy failed to pay in taxes.

Who'd Have Guessed It?

Who'd have guessed that the Democratic Congress would have given $350 billion it in a heartbeat to one of the most unpopular (Republican) presidents ever--and a lame duck, at that; and then get all cranky with the new guy from their own party when he wants the same treatment as he comes to town?

Fourteen Years and Counting

Commercial lawyers sometimes say that we've abolished debtor's prison every place but family court. Here's a guy who knows (link):

Consider Mr. Chadwick's case. In 1994, during divorce proceedings, a Delaware County judge held Mr. Chadwick in civil contempt for failing to put $2.5 million in a court-controlled account. He says he lost the money in bad investments; his wife's attorney claimed he had hidden it offshore. In April 1995, Mr. Chadwick was arrested and detained. Nearly 14 years later, Mr. Chadwick, who suffers from non-Hodgkin's lymphoma, is still in jail -- even after a retired judge was hired to help locate the money, and failed.

"The money is gone," says Mr. Chadwick's lawyer, Michael Malloy. "The coercive effect of this order is gone; it has turned into a life sentence." The judge who held Mr. Chadwick in contempt in 1994 couldn't be reached for comment, but he has said publicly that he doesn't believe Mr. Chadwick lacks the funds.

Aside from the family law wrinkle, there's a problem here of general interest in the law. That's the matter of so-called "civil contempt," where, as the saying goes, "the responding party has the keys to the jail in his own pocket! A lot of people have noticed that there's a problem in subsuming real rights under the tedious framework of court management. HT Boingboing; have not yet seen the original WSJ story.

Message to TARP: Thanks, but No Thanks

Gerald Magpily at Dealscape has the dope on a bank that doesn't want TARP funds:

New York Community Bancorp Inc. is doing things its own way, traveling its usual path that has differed from the steps of its peers. For example, when NYCB purchases a bank, it usually maintains the name brand -- something practically unheard of in the industry today. When rivals were loosening credit and profiting from investments in toxic debt, NYCB stayed away and maintained its strict lending standards for mortgages. Fast forward to the present, and NYCB is in better financial health than many of its peers, so much so it has turned down a $596 million capital injection from the government's Troubled Asset Relief Plan.

The rejection of TARP funds is an affirmation that New York Community believes it will be able to weather the financial storm without government help. The taxpayers should be relieved, and investors in the company should be jubilant. After all, it shows that NYCB's slow-yet-conservative strategy of "production of multi-family loans on rent-regulated buildings, the maintenance of conservative credit standards, and the growth of our franchise through accretive acquisitions of local banks and thrifts," which kept its money out of exotic mortgages, was the right call. If only peers did the same. ...

The money would have been nice, Magpily explains, but the bank would have had to fork over 10 percent of its equity to the government. I suspect there are a scattering of these loners around the country--including Bedford-Falls-type banks where, as they saying goes "we don't lend on anything we can't see from the front window."

One thing that intrigues me is that when Bancorp buys a bank, it keeps the old name. I suppose I can see why this is unusual: I assume the thinking is that customers really want to believe they are part of a network. But maybe not: I've also heard it said that the most promising tactic for starting a new bank is to set up shop next door to the local outfit that just got bought out by a mega. Apparently you can make it on the angry and the disaffected. And anyone who watched Six Feet Under knows that funeral homes all get rolled up into a megacorp--which does everything it can to pretend it's still a mom and pop local business.

Not a Moment Too Soon

I see that OpenOffice.com now has a spellchecker for Occitan Lengadocan.  It's been downloaded 668 times since November 24.  It's ranked among the "most popular," with its, ah, one five-star votes.    Hey, got to start somewhere.

Bored Anonymous and Pathetic?

Well, I'd been looking for a new tagline (link):

"Bored, anonymous, pathetic bloggers who lie annoy me....I'll tell you, yesterday the Anchorage Daily News, they called again to ask — double-, triple-, quadruple-check — who is Trig's real mom. And I said, Come on, are you kidding me? We're gonna answer this? Do you not believe me or my doctor? And they said, No, it's been quite cryptic the way that my son's birth has been discussed. And I thought, Okay, more indication of continued problems in the world of journalism."

Afterthought:I never figured the "Trig's real mom" story was worth a lot of effort--not so much as, say, how to account for her goofy behavior in the hours just before it was born. But the ferocity of her defense now is interesting. I wouldn't say that where there's smoke,there's fire, but I would say that s sensible city editor might want to know more.

Old Song

Discussing the great kidney restitution case with my friend Lisa, who teaches family law, I remembered the old song (it must be Australian):

I'm sending my liver to Liverpool,
My pancreas off to Peru--

My stomach and kidney
For the summer to Sidney,
But my heart I'm still saving for you!

History Doesnt't Repeat, but it Rhymes

Here's a pattern: it's not a big deal, but it explains something about the departing administration.

Start with Social Security privatization reform. Seems to me one reason it failed is that nobody could come up with a plausible story linking the disease (Social Security is insovent!) with the remedy (send it to Wall Street!). I've entertained myself with a thought experiment asking: what if somebody had come up with a full-scale Chilean plan--everybody gets an off-the-rack opt-out IRA, together with a "safety net put" against starvation. Should it have passed? I won't say for sure although I admit I am intrigued (the devil is still in the details). Would it? Perhaps not; there was, even then, just too much distrust against the motives of the Bush administration. Well-deserved, of course, but it would have proven a formidable barrier for a proposable much more plausible than the one we got. That one was beyond right or wrong--it was incoherent.

Flash forward to Bear Stearns. In retrospect, I don't think anybody quite understands what our masters thought they were accomplishing in "saving" Bear Stearns by delivering a big wet kiss to JP Morgan Chase. And I suspect our masters themselves pretty soon figured out it was a hard one to justify. So when Lehman came along they were already wrong-footed: we screwed it up last time, we don't dare try again.

And then, of course, came the total debacle of the "first bailout," which nobody can now explain except in the sense of "seemed like a good idea at the time."

I suppose a common thread here is some sort of ideological commitment to free markets at any cost. But repeat after me, children: a market is not a gift from the clouds. A market is a cultural artifact that must be cosseted and nourished. We'll pull through somehow, though not as successfully or as soon as we might have with better planning. Someday, as the fella says, we'll look back on all this and laugh. Just like we do on the Great Depression.

Welcome Back Ted!

The Ted Spread is below one. For details, go here.

But the Baltic Dry index is still pretty much nowhere.

More Bad News

Nouriel Roubini is one of those who was most notoriously correct in calling the downturn ("If you can keep your head when all about you are losing theirs..."). He has now released his outlook out for 2009 and he ain't happy:

It is clear that 2008 was a dismal year for the economy and financial markets year and it is now official that the current U.S. recession started already in December 2007. So, how far are we into this recession that has already lasted longer than the previous two (the 1990-91 and 2001 recessions lasted 8 months each)? We forecast that the U.S. economy is only half way through a recession that will be the longest and most severe in the post war period. U.S. GDP will continue to contract throughout all of 2009 for a cumulative output loss of 5% and a recession that will thus last about two years. Our forecast is much worse than the current consensus forecast expecting a growth recovery in the second half of 2009; we also predict significantly weak growth recovery – well below potential - in 2010

I Think Kevin May Be Onto Something

I think my friend Kevin is right, but I don't know enough about football to know for sure. I was retailing the argument that the US is (and will continue to be) a "power," just not a "superpower," i.e., without the globe-girdling dominance that we have enjoyed since 1945, or at any rate since 1989. Cf. Roger C. Altman, "The Great Crash, 2008," Foreign Affairs, 2-14 January/February 2009.

Kevin nodded. "Like," he said, "Notre Dame in football."

That's right, isn't it?

Too True,Too True

My friend Bob on empirical research:

Among social scientists, I have heard it said that there are only two responses to any piece of empirical work: “That can’t be right” or “I already knew that.”

What David Said

I jsut lately discovered David Rothkopf, and I tell you, this guy is good:

In case you missed the point, having so many special envoys and czars is a formula for policy-making gridlock, clashes of egos and lack of discipline in the policy development and implementation process. It is interesting that we already have perhaps six or seven very senior people who are going to be devoted to shaping greater Middle East/South Asia policy -- envoys are being discussed for India-Pakistan, Iran, Israel-Palestine, plus an assistant secretary, plus someone at the NSC, plus a counterterrorism czar, plus the National Security Advisor, the Secretary of State, the Secretary of Defense, the Deputy Secretary of State, an Under Secretary for Political Affairs at State who is a Mideast specialist...and China is almost certainly our most important international relationship and not a czar or bevy of appointments in sight. And can you imagine the graceful handoffs between and among these czars as their issues overlap? Go see a demolition derby and imagine the names of your favorite foreign policy types painted on each of the cars....it'll tell you the whole story.

H/T to Chris Blattman, and as Chris says, I wish I had such cracks in my ceiling.

Barack and Indonesian

My friend Anupam asks: Does Barack Obama speak Indonesian? My answer has two parts: (a) not a clue; but (b) how could he not? By the record I gather that he went to school in Jakarta from the first through the fourth grade, and there is nothing to suggest that he was isolated in an "American" (or Dutch?) school. There is absolutely no way a kind could survive in a world of kids for four years without learning the local patois. Whether he "remembers" it is a more subtle question. He may not be able to it on the spot; for all I know, he might even think he does not speak Indonesian. But it's back there somewhere.

An intriguing followup question might be: does he speak any other language of Indonesia? From what I read, "everybody" speaks the national language, but that there are plenty of local languages. I haven't any idea what kind of local language (if any) might have been part of the local culture o fhis schooldays, but it seems to me likely that there was at least one.

Tyler on Unemployment

Still cannot understand why Tyler Cowan does not include "unemployment" on his list of "reasons why we are in a depression" (link). (actually, I think he means signs that we are in a depression, but that's picky). I mean--okay, granted, there are serious questions as to exactly how much unemployment we have and how long it will last. But then again, there are people who deny that there is a credit crisis. But is unemployment simply not a factor?

Dream

Hilzoy, following Brad DeLong, invites dreams:

Question: do you have odd dreams inspired by your professional lives? If so, what are they?

Link. Well yes, thanks for askin', I think I can accommodate here. I had one about 40 years ago which, for clarity and economy, seems to me to belong in the first tier.

Anyway, I'm in this crappy night-school classroom at the University of Louisville--one with unwashed high walls and those little move-around desk chairs. I receive the exam paper. It is full--I mean, we're talkin' full, top to bottom and border to border--with a script I don't recognize. Well, might be Cyrillic, but big deal, I don't understand Russian anyway.

So I'm trying to figure out what to do with all this when down in the bottom right-hand corner, I chance to notice just one word that I understand. The word is:

Discuss

I'm toast, I thought. I'm cooked. Done. Over. Outa here, bye.

Extra! Dinosaur Exhumed Near City Room!

Matt Welch at Reason (surprise!) unloads a diatribe against the prospect of a newspaper bailout. He's right on, but he might have mentioned one point of history: the biz already had a bailout back in the dirigist Nixon yeaars when Congress passed the Newspaper Preservation Act, allowing"competing" newspapers to enter into joint operating agreements that would otherwise violate the anti-trust laws. It's a handy reminder that economic problems of the dinosaur media are nothing recent, not the product of the computer revolution. It's been a failed business model for a long time, for most everyone except enjoying the economic rents available behind the paywall of a local monopoly. It certainly has cost consumers money and my guess is that it hasn't worked all that well for the owners: a skim of Wiki's list of operating agreements suggests that a good many of them went ahead and failed anyway. The Preservation Act itself is the product of a mentality that could believe it was a good thing to bail out Chrysler, for example, or Lockheed. It's hard to imagine Congress adopting it today, but oddly enough this guy thinks it would be a good idea.

Occupational Hazard

No wonder these guys can't get insurance:

5 Somali Pirates Drown With Their Share of $3 Million Ransom

(Link).

HT to the Wichita bureau who asks: did they take it in coins?

Appreciation: La Rondine

Mrs. Buce dismissed it in a sentence. "Lehar," she said, "did it better." Well, she never was a big Puccini fan. And Lehar certainly does own the franchise for schmaltzy, fluffy, romantic musical comedy. By dipping his own toe in the schlag Puccini--with Rondine, on HD today from the Met--paid Lehar the unintended compliment of showing everybody else just how hard it is.

So Lehar did do it better, but Puccini did some things Lehar can't do and he does it with so much (surprise!) good-natured brio that you can' help but enjoy it. I'm actually not that big of a Puccini fan myself, though I am not as firm in my views as Mrs. B: I do think he's at his best when he is (seems to be?) trying least hard: the one really fine piece of work is the one-act comedy Gianni Schicchi, while the more familiar war-horses just strike me as mostly over the top. I'd put La Rondine in the same bucket as Gianni Schicchi and I mean that a compliment.

It's a little unclear why the Met would dare to spruce up this supposed runt of the Puccini litter for the first time since the year in which I was born, but I suppose it has something to do with the star power of Angela Gheorghiu and her husband, Roberto Alagna, who over the past few years have made it their baby. And sure enough, the role of the somewhat featherbrained protagonist is a perfect for Gheorghiu's impressive if not always well-disciplined talents. Her husband has a voice that is affable if not particularly distinctive but on the whole he is probably a better actor, and helps a lot to move along what is, after all, a pretty flaccid plot.

Indeed speaking of plot, the real energy came not from either of the stars but from the "comic subplot"-- Marius Brenciu and Lisette Oropesa as a couple of not-very-competent schemers who provide most of the energy, at least for the first act. Mr. Brenciu was pleasant if somewhat bland: this may be the curse of the comic tenor, or any tenor. Ms. Oropesa was livelier: she got a break as Susanna at the Met last year and she is booked to stay busy as Rhine Maiden #1 for the rest of the season in in the Ring; trust me, you will hear more of her.

There is, in short, nothing very demanding here although some of the music is lovely and you can, if you wish, entertian yourself by thinking of all the stuff that it mimics or echoes: a cleaned-up and more realistic Traviata, spiced up with a liberal side of On the Razzle and perhaps Fleidermaus Fledermaus, all under the benign and appreciative gaze of Steven Sondheim.

I yield to the temptation to add a few words about the issue of HD: believe it, we have just begun to see the beginning of the possibilities of this new art form. The cameras are thinking of more and more things to do, and the singers (and musicians) are thinking of more and more ways to respond to the cameras. Necessarily this means less and less attention to the audience in the house. Mrs. B was at the Met a few months back (I wasn't there) to observe the dismay of a regular subscriber when she found that her view was blocked by the video equipment. Apparently the subscriber raised holy hell and got reseated but if I were her, I'd be considering whether they really care enough about her any more.

Update: Looks like it beat me by about a month.

Obama, Jimmy Carter and the Fear Factor

Joel flags the David Broder piece from Saturday's WaPo, in which Broder calls the Illinois Senate mess "an early drubbing for Obama" (link). Actually, when I saw the headline, I thought that Broder was talking about the Obama stimulus package, which seems to have been greeted by the Democrats in Congress with about the same respectful attention as the school lunch menu over the PA system in a junior high school. Sheesh, it isn't even opening day yet, and the blackboard behind him is covered with spitballs. And back to the Illinois Senate thing--Michael Froomkin is quick on board with the assertion that it isn't really Obama's fault (link) which is technically true, but can we imagine this sort of thing happening to, say, Lyndon Johnson?

I think there is a theme here: they don't fear the new guy. They think he is not so much Lyndon Johnson as Jimmy Carter. They think they can pretty much make up their own rules, and the new guy will swallow it all as part of the cumbaya.

I hope they're not right. I hope at least that somebody--Rahm Emanuel?--has the brief to turn all their bowels to water. Maybe the well-placed destruction and humiliation of a self-inflated independent gasbag might catch some attention. One way or another, the new guy needs something, something to make it clear that, for all the wonkiness, and all the conciliation, he is not to be messed with.

Pleonasms?

Tyler Cowen (endorsing Horace Kephart) thinks that "I done done it" is a pleonasm, because the second "done" repeats the meaning of the first. He is wrong: the second "done" does not repeat the first, and "I done done it" is a different statement from "I done it." "I done it" comes very close to "the deed happened." "I done done it" stresses reflexivity, self-consciousness purposiveness, responsibility, as in "that was no accident, the bear mauled me on purpose."

I'd say the same in re many (not all) of his other supposed "pleonasms." "Women-folk" are not just "women;" they are women who are part of the tribe, for whom we menfolk (sic) are responsible. So, "preacher-man" is not just a preacher; he is a preacher whose humanity is being recognized.

"You-all" is, of course, not in any sense a pleonasm; it is a welcome attempt to restore the distinction between singular and plural in the second-person pronoun. And while we-all are on the topic, need a distinction (makeable, I am told, in some other languages) between "we" (including you) and "we" (not including you).

I admit I still have no idea what to do with "onliest."

Reputation Bubble Pop

Marion Maneker has the right call on the fall of Robert Rubin (link):

John Kenneth Galbraith’s dictum about the end of financial euphorias states that a previously omnipotent figure from the boom must be dethroned in the bust. Robert Rubin seems to fit that bill.

That's good, but two things. One, there are other and perhaps better candidates for the Galbraith prize. Just as a first approximation, I'd nominate Bernie Madoff. Maybe Hank Greenberg was a bit ahead of the curve, a canary in the coal mine.

But two, it is remarkable how many such swashbucklers do not look any worse now than they did before. Start with Warren Buffett. Add George Soros.

Oh, and a third point. I guess there is a separate category for people like Nouriel Roubini and John Paulson--perhaps Robert Shiller--who appear (in retrospect) to have been right when they were swimming against the stream.

I guess I'll have to make a special category for Rubin's old pal Lawrence Summers--someone whose reputation is being salvaged in tough times?

Martin Wolf on the Obama Plan

Lot of buzz today about the Paul Krugman column in this morning's New York Times arguing that the Obama stimulus package may be too chintzy (see, e.g). Joel points to Martin Wolf of the Financial Times, making a similar argument here. Note in particular Wolf observing that Obama may be able to palliate matters in the short term, while the long term looks far dicier: "The opnly real way out for the Americans is to become a net exporter. … That's only possible if the rest of the world starts spending and buying American products, and that's stopped." I think I heard Krugman say something similar a couple of weeks ago: he could see relief in the near future, but he had difficulty writing the drama after that.

I've been reading some financial history lately, and it is unsettling to recall that there was a time when America made just a heck of a lot of stuff--cars and steel and aluminum and plastics and drugs and whatnot. Moreover we often made them under protection, de facto or otherwise. It's worrying to wonder whether we can learn to compete again--whether we ever knew how in the first place.

Bankruptcy: Two More Guys Who Don't Know What They're Talking About

It's always unsettling to read an author you think is really really smart and then observe him writing about something you actually know something about and find him falling flat on his face. I felt that way a few weeks ago when I read Niall Ferguson (in The Ascent of Money) on bankruptcy (link; and note the comment). Today I'm reading Raghuram Rajan and Luis Zingales, Saving Capitalism from Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity (2008). It's an admirable book, really—accessible and well argued, strong testimony in favor of the power of financial markets for the betterment of humankind.

But then they come to bankruptcy and fall right off the cliff. Well—their general point is correct, but when it comes to the details they make hash.

The general subject is lending, and impediments to borrowing. RZ make the point that you are likely to be able to borrow only if the lender is confident he will be repaid. They identify three common impediments to lending: one the inability to give good collateral (inadequate land titling systems, for example); two, slow or expensive or impossible collection mechanisms; and three, “exemptions.” It's the third point that causes the trouble.

RZ start by discussing the Bankruptcy Commission of 1973 which, as they say, “advocated that a substantial portion of household assets be exempted from seizure by creditors,” adding “these assets are called “bankruptcy exemptions.” They go on to say that “following these recommendations, a number of states adopted exemptions” (my emphasis). They say that “high state bankruptcy exemptions led to a significantly higher probability that households would be turned down for credit or discouraged from borrowing.” And that, for poor people, “since their house is often their only form of collateral, the exemption laws effectively deprived them of their only means of obtaining finance.”

There are so many things bollixed up in this paragraph that it is scarcely possible to know where to begin. But try this: exemptions do not begin with the Bankruptcy Commission. So far as I know, every jurisdiction in any commercial economy exempts some assets from execution, and has for centuries. The Bankruptcy Commission did think that these “state” (sic—i.e., “non-bankruptcy”) exemptions were mostly too cheesy, and advocated a system of more generous exemptions for use in (and only in) bankruptcy cases—to be called “bankruptcy” (sic, and note the difference) exemptions.

The commission did not get its way. Instead, Congress hashed together a not-very-intelligible compromise, whereby debtors in bankruptcy might claim "Federal" exemptions, or they might claim their “home-state” exemptions. Congress also provided that individual states might opt out and leave their debtors only with “state exemptions.” As it happens, most states have opted out. I suspect (although I admit I don't have chapter and verse) that the opt-outs are the ones with the most cheesy exemptions. If that is true, it would leave the “bankruptcy option,” if not exactly a dead letter, still perhaps a slender reed.

Note also that while most old exemption laws may have been cheesy, some were famously generous. RZ give the example of the unlimited Texas homestead. Texas does have an unlimited homestead; so does Florida and so do a couple of farm states in the Great Planes. But these unlimited homesteads—like most state exemptions—have been part of the law all along. Bankruptcy law had nothing to do with them. Well, with one exception: some of the more recent amendments to the bankruptcy law make it harder for debtors to use these old exemption laws, not easier.

But the biggest blooper is still to come. Read the last quoted sentence carefully: “since their house is often their only form of collateral, the exemption laws effectively deprive them of their only means of obtaining finance” (emphasis added).

Take a deep breath—here's something every student learns in the bankruptcy law class: you can't use the exemption against the secured creditor. That's a black-letter rule. Giving security effectively surrenders the exemption, as far as the secured creditor is concerned. It is the unsecured creditors—the ones without collateral—who take it in the shorts. Indeed, when your client is in trouble, what you tell him is: if you want to keep the collateral, keep paying the secured creditor, and forget about everybody else. So ironically, the effect of the exemption law is to increase, rather than decrease, the likelihood that the secured creditor will be paid.

RZ go on to say that “high state (sic) bankruptcy (sic) exemptions led to a significantly higher probability that households would be turned down for credit or discouraged from borrowing.” They cite one study.* The statement is intuitively plausible, but it's remarkable how hard it is to find general support—indeed, one of the remarkable facts of American economic life is how little evidence we find that debtor protections have done anything to dampen credit markets.

And RZ go on to make a further point which, though interesting, is in a sense the opposite they just stated above. They argue that “the passage of exemptions” (?) made it harder for poor people to borrow—but easier for the rich,”because more of their assets could be protected from seizure” (they seem to be drawing their point from the study cited earlier, although they don't cite it here). Of course this might be true; but if so it badly undercuts the plausibility of the more general statement above.

As a final irony, I want to stress that I agree with the general point here: financial markets are (well: “can be”) a great thing, not least for the liberation of the poor. I agree that we need well-defined property rights and decent collection procedures. I suspect that liberal exemption laws must under some circumstances limit the power to incur debt, though I think it is far easier to say than to prove. But if this is the kind of argument that they are going to make, they'd better restrict their audience to people who really don't know anything about the topic. The phrase “D* S*” comes to mind, but I've used that one too often already.
==

*The citation is incomplete, but they seem to be citing this paper: Gropp, Reint; Scholtz, John Karl and White, Michelle. "Personal Bankruptcy and Credit Supply and Demand." Quarterly Journal of Economics, 1997, 217-252.

Update: My friend Barry points out that Bankruptcy Code does allow the avoidance of certain personal property security inerests that impair exemptions. He is right, but this is pretty clearly not what RZ were talking about.

That Time of Year...

Provence has a sense of history--

A travers le côté Tartarin et le le côté Daumier du pays si drôle, où les bonnes gens ont l'accent que te sais, il y a tant de grec déjà, et il y sa la Vénus d'Arles comme celle de Lesbos et on sent encore cette jeunesse-là malgré tout,

J n'en doute pas le moins du monde qu'un jour toi aussi tu connaîtras le Midi.

==

Through all the Tartarin and Daumier part of this queer country, where good folk have the accent that you recognize, there is still a good deal of Greece; there is a Venus of Arles just as there is a Venus of Lesbos, and one feels again one's youth in spite of all.

I haven't the slightest doubt that someday you too will know the Midi.

That's Vincent van Gogh to his brother Theo, Arles, September 1888. It's quoted as sthe epigraph of Ceasar's Vast Ghost: Aspects of Provence (1990). An English version of the whole letter is here. When he says "Tartarin," I assume he is thinking of this guy. I should have thought tht "Daumier" was the artist; perhaps it is really this.

More on Bush on Conservatism

The other day I defended W for saying that he needed to destroy the free market in order to save it (link). I suggested that it sounded vaguely Rooseveltian. Maybe, but in any event sinnce then, I've stumbled on a couple more references int he same vein. One is the excellent Saving Capitalism from Capitlists by Raghuram G. Rajan and Luigi Zingales.

The other is more portentous. It is from Chapter One of Il Gattopardo, The Leopard, Giuseppe di Lampedusa's great Italian novel about his grandfather, the old Prince di Lampedusa. We pass the mike to Nigel Rees, who develops the point in the current issue of The "Quote...Unquote" Newsletter:

Se vogliamo che tutto rimanga come è, bisogna che tutto cambi [If we want everything to remain as it is, it will be necessary for everything to change.] In the first chapter, this ‘ambiguous’ observation is said to be well-understood by Prince Fabrizio but to have originated with his nephew and heir, Tancredi. In an introductory title to some versions of Luchino Visconti’s film (Italy/US 1963), it is indeed given as the Prince’s own credo, but translated into English as ‘Things will have to change in order that they can remain the same.’ In the course of the film, the Prince (played by Burt Lancaster) also gets to ‘speak’ the words (in dubbed Italian) when referring to Garibaldi’s victory. The subtitles relay these as: Something had to change so that everything might remain as it was before.’

--The "Quote...Unquote" Newsletter 7, Vol. 18, No. 1, January 2009

Or as they say in the Oval Office, Plus ça change, plus c'est la même chose.

Is It Still in Good Condition?

Kieran Hardy has the story of the guy in the divorce case who wants his wife to give back the kidney. Brings back my own treacherous journey through Splitsville when I realized that my soon-to-be-ex would continue to use what we then, somewhat retrogressively, called "her married name." For a nanosecond I entertained the notion of demanding that she render my good name back to me, but wiser heads (including my own) prevailed. I guess it also harkens back to:

If you are not satisfied, return the unused portion of our product
And we will return thre unused portion of your money.

For auditing purposes, I can report that my ex apparently continues to use the by-now-established monicker ("trade on my prestige and reputation" I will of course not say). My current wife, by contrast, has never shown the slightest interest in it.

Annals of Rugology

Bill Clinton says he loves that Oval Office rug. Oh, dear, that takes me back. I know, I repeat myself, but I'm an old guy, it's my job to repeat myself. You know where this is going: I'm remembering A.B. "Happy" Chandler and the Kentucky Gubernatorial Campaign of 1959. Chandler, ex-Senator, ex-Governor, ex-Baseball Commissioner, was fighting for a comeback in one more campaign for the State House.

In so many ways, this campaign was a nostalgiac throwback/farewell to populist campaigning in the pre-Palin era: bands, hoopla, horseplay and general hilarity. Chandler loved to tell the crowd that the incumbent had refitted the governor's office with "a $20,000 rug," (pronounced "ru-u-u-u-ug," or something on that order--in fact it appears to have cost $2,700 but that's a detail). "You know what we gonna do," the Harvard Law Grad Chandler barked, against the enthusiastic cheers of the multitiudes, "--what we gonna do when we get to Frankfort?"

And answering his own question:

We gonna take off our shoes and walk on that rug!

[Prolonged cheering and applause]. Cf. generally: Time Magazine. Best analog I know is the governor in Robert Penn Warren's All the King's Men, who wants to get to the capitol for (I quote from memory) "the peach ice cream for breakfast"--fictional, but everybody forgets that it was not Huey Long. Unhappily for Chandler, it turned out to be a nostalgia tour, like the Kingston Trio on PBS. Chandler lost, to a much duller, but perhaps smarter and in any event far craftier candidate. Who may not have taken off his shoes and walked on that rug.

Addendum: The only other thing I know about rugs is that there's no IP: the fuzzy side is always up, and 90 percent of the product is beige.

He's Short, Sort Of

I just caught a glimpse of the footage from the all-President lunch and I noticed something aobut Jimmy Carter that I'd never noticed before: he's short. Or at least in the ranks of recent presidents, at 5' 9" he is shorter than anyone in the room. Per Wiki, no president since William McKinley (5'7") has been shorter--Harry S. Truman, at 5' 9" was just Carter's size.

Nineteenth Century presidents appear on the whole to have been shorter--at 5' 4", I believe James Madison was thought small even by his contemporaries. I suppose you could ascribe it in general to nutrition, but I wonder what part might be played by the greater visibility of modern candidates in a newsreel-and-then-TV age. And the Nineteenth Century retains the all-time champ: Abe Lincoln, at 6' 4", which would make him tall in our age, almost a freak in his own. I've long speculated that Lincoln's great (for his time) height may help to account for what seems to me to be his overvaulting self-confidence--his evident assurance, amid all calamaties and perplexities, that he was equal to the job, no matter what anybody else may have thought.

Is it true that the tall guy always loses? Skimming the 20th Century data (but being too lazy to make an actual count), I'd say yes, although it's a close thing: Jimmy Carter himself was, after all, shorter than his adversary, Gerald Ford. John Kerry, at a Lincolnesque 6' 4", bears the dubious disctinction of being the second tallest man ever to lose the race (behind Winfield Scott, who was 6' 5"). DeWitt Clinton seems to do worse on point spread--at 6'3", losing to the warty little James Madison.

One trouble with all this data is that there is a disconnect between appearance and reality. Michael Dukakis (5 ' 6") and Thomas E. Dewey (5' 8") just seem like short guys, whom you couldn't take seriously as leaders. On the other hand, Al Smith always seemed like a force of nature to me, but he measured in at only 5' 6"--tied with Dukakis and the forgettable James M. Cox for shortest in the century.* Meanwhile George W. has always seemed to me shorter than he (at 5'11") really is. For comparison, I offer former Mayor Ed Koch of New York, who has always reminded me a little of the yapping disembodied head in the Monty Python movie. I always thought he was short until he nearly knocked me down in the doorway of the Japonica at 12th and University Place in Manhattan.

==
*One other questionable case: turns out that that man also is (no more than!) 5' 7".

Must-read of the Day: Patrick Lang on the IDF

W. Patrick Lang has far more right than most to comment on the Israeli Defense Force; he served with them for many years (details at his original post here). I'll let him speak for himself:

- Because of the heavy reliance on reserve units filled with older, part time soldiers, any mobilization of a large number of ground force units for considerable periods of time places a heavy burden on the Israeli national economy. Mobilized reservists are lost to their jobs. Israeli soldiers are among the strongest and most skilled members of their society. They are typically well employed in the civilian world. When they are gone in military service the economy suffers. This automatically limits the scale and duration of reserve mobilizations.

- Older reserve soldiers serve in units made up almost entirely of similar reservists. These units are hard to maintain at a high level of training and readiness. Only limited amounts of training time and money are available for this necessity. As a result units are often unready for deployment into combat in an emergency. On a number of occasions this problem has caused IDF troops to be committed to combat in a less than "ready" status. In other words, troops have gone into combat with equipment not properly maintained and with insufficient unit training. It must be said that they have typically been lucky in their enemies and that if they had faced more serious enemies, they would have had a much different experience than the ones they had. In the Golan Heights the Syrians gave them a very difficult time in 1973 and in the same war their victory against Egypt featured a renewal of offensive activity under the cover a cease fire which they had accepted.

- There are no career ground force sergeants except as technicians. Unless the system has changed very recently, the IDF ground forces typically do not have career NCOs in the LINE of the combat arms. This is a structural tradition that derives originally from the Russian tsar's army and which came to Palestine through Russian and Polish Zionist immigrants. Then this passed through the Haganah into the IDF. The IDF "line" conscripts what amount to yearly classes of recruits and selects from them more promising soldiers who are given NCO level command responsibilities as; infantry leaders, tank commanders, artillery gun captains, etc. The IDF does have career NCOs but they are typically found in jobs of a more technical nature rather than junior combat command at the squad or platoon (section) level. As a result, junior officers (company grade) are required to perform duties that in more traditionally organized armies would be performed by sergeants. Leading a small combat or reconnaissance patrol would be an example. As a result, a non-reserve infantry or tank company in the field consists of people who are all about the same age (19-22) and commanded by a captain in his mid 20s. What is missing in this scene is the voice of grown up counsel provided by sergeants in their 30s and 40s telling these young people what it is that would be wise to do based on real experience and mature judgment. In contrast a 22 year old American platoon leader would have a mature platoon sergeant as his assistant and counselor.

- As a result of this system of manning, the IDF's ground force is more unpredictable and volatile at the tactical (company) level than might be the case otherwise. The national government has a hard time knowing whether or not specific policies will be followed in the field. For example, the Israeli government's policy in the present action in the Gaza Strip has been to avoid civilian casualties whenever possible. Based on personal experience of the behavior of IDF conscripts toward Palestinian civilians, I would say that the Israeli government has little control over what individual groups of these young Israeli soldiers may do in incidents like the one yesterday in which mortar fire was directed toward UN controlled school buildings.

In Beit Suhur outside Bethlehem, I have seen IDF troops shoot at Palestinian Christian women hanging out laundry in their gardens. This was done with tank coaxial machine guns from within a bermed up dirt fort a couple of hundred yards away, and evidently just for the fun of it. In Bethlehem a lieutenant told me that he would have had his men shoot me in the street during a demonstration that I happened to get caught in, but that he had not because he thought I might not be a Palestinian and that if I were not the incident would have caused him some trouble. I have seen a lot of things like that. One might say that in war, s--t happens. That is true, but such behavior is indicative of an army that is not well disciplined and not a completely reliably instrument of state policy. In my travels in the west Bank in March of 2008, it was noticeable that the behavior towards Palestinian civilians of IDF troops at roadblocks was reminiscent of that of any group of post-adolescents given guns and allowed to bully the helpless in order to look tough for each other. I think the IDF would be well advised to grow some real sergeants.

All in all, I think the IDF ground forces can best be described as specialized tools that reflect 20th century Zionist socialist and nationalist ideals, and which have military traditions that are in no way reflective of those of the United States. They can also be justly said to have been been fortunate in their enemies. The Jordanians gave them a run for their money in 1948-49. Hizbullah delivered a hint of the inherent limits in such a socio-military system in 2006 and now we are seeing whatever it is that we will see at Gaza.

Hey, I Never Thought of That!

One-liner of the day (from Above the Law):

Trying to shut down internet access in class is the modern day equivalent to stapling somebody's eyes open...

Link. For the record, I've had a student in class sing out "That's not what Wiki says~"--and be correct--correct about Wiki, and correct about the underlying substance. It's an exhilarating experience, but it strikes me as entirely fair game, and probably adds to the excitement. FWIW, I have been known to watch other people's lectures on YouTube--Mark Thoma has some good, straightforward stuff. The occasion is piled high with difficulties, as another wise man said, and we must rise to the occasion.

Afterthought: The student with Wiki got a respectable but entirely middling grade. Blind grading, I swear.

In the Category of Movie Lists

This has to be the biggest yawn ever (link).

Won't somebody ever vote for the original Dudley Moore and Peter Cook version of Bedazzled?

Update: Oh hey, I'd forgotten, I have my own top ten list here. And it shares one entry with Stanley Fish. And it does include Bedazzled.

Johnson's Dictionary

Allow me to join the choir of warm-hearted enthusiasts who are singing the praises of The Year of Dr. Johnson's Dictionary (thanks, Patrick; thanks, Frank). By way of a sample, here is

A’DAGE. n.s. [adagium, Lat.] A maxim handed down from antiquity; a proverb.
Shallow, unimproved intellects, that are confident pretenders
to certainty; as if, contrary to the adage, science had no friend
but ignorance. Glanville’s Scepsis Scientifica, c.2.
Fine fruits of learning! old ambitious fool,
Dar’st apply that adage of the school;
As if ’tis nothing worth that lies conceal’d;
And science is not science ’til reveal’d? Dryd. Pers. Sat. i.

An accessible introduction is Robert DeMaria Jr., Johnson's Dictionary and the Language of Learning (UNC Press 1986).

The Depression: Up Close but Not Yet Personal

Uh, oh, it is getting closer--two of my favorite consumption spending outlets just bought the farm.

One is the Borders out near Arco Arena in Sacramento--the one handy if you happen to have a half-day layover at the Sacramento airport.

And the other, a big mainstream watering hole near campus in Palookaville, where tame gazelles come to refresh themselves, at risk of loss of bodily integrity to more predatory creatures (they also served a nice Cobb salad).

In either case, I can't say that I'm surprised. The Arco Borders has always been empty enough that you could fire a cannon down the aisle without knocking over anything but a display rack. Contrast the Borders out next to the UC Campus in Davis, which is usually overflowing, sometimes with people actually buying stuff.

The Palookaville eatery was a bit more iffy. Some hours of the day and weekend they seemed to pack 'em in, but they occupied a lot of real estate with some fairly ambitous fixtures. Of course it might just be a landlord who got greedy and who will now have to pay taxes on some nonproductive dirt.

On the eatery, we did get stuck holding a $30 gift certificate (it was, as they say, a gift). And I have to admit that the best place to eat in Palookaville is still our house. Although that might not be saying a lot.

Skilling: A Surprise

Well, that's a surprise, at least to me: a Fifth Circuit panel has upheld the conviction of Enron uberbadguy Jeff Skilling (link). Something about remand for resentencing, but I must say I had thought the whole case might be vulnerable: more you saw of it, more it seemed that these guys had learned to work just inside the edge of the law.

"Still a Money-Making Machine"--NYC Taxis

Joel points me to a wonderful NYT piece on one of my favorite topics--the taxi business:

The Man With the Keys to the Cabs
By Corey Kilgannon

As the man who hands out the keys for 165 yellow cabs for a fleet company on West 44th Street, Enrique Sandoval has an interesting little take on the New York City cab scene.

Mr. Sandoval hands the keys out to drivers renting the taxis from the fleet company for 12-hour shifts, from 5 a.m. to 5 p.m., or vice versa. On Sunday at 5 p.m., he spread the keys on the trunk of a yellow cab parked on West 44th near Tenth Avenue.

“Twelve hours is a long time to drive, especially in Manhattan, and when the drivers finish, they’re too tired to find a parking spot,” he explained. Parking here is scarce, so as the cabs circle in and out of use, Mr. Sandoval and a partner jockey them around until the next driver takes them on the next shift. They rotate the cabs through temporary spots, whether double-parked, or stashed on the sidewalk or in the lot of the busy Hess gas station on the corner, or along the short length of curbside space designated a taxi stand.

Cabbies pulled up and handed the key to Mr. Sandoval and slouched homeward. Drivers beginning their shifts tended to be much more chipper. They shouted out the medallion number for the cab they were renting — 5Z29, 9Y40, and so on — and joked with Mr. Sandoval and tipped him a dollar or two.

“They tip me because when they finish, I park the cab for them,” said Mr. Sandoval, who often chats with the drivers

“We have mostly Arabs, Africans and Hindus, and some Latinos and Chinese,” he said. “I hear all their stories. Some are refugees, some were well-respected doctors in their countries, but here they have to drive a cab. We have one very important woman, from Somalia, who was a big government official. She was like the Hillary Clinton of Somalia, but here, she drives a cab.”

The recession has brought in more people seeking work as cabdrivers, he said.

“We’re getting more white people here now,” he said. “We get a lot of guys who are waiters and actors with no work. We have a few guys who owned their own businesses but now they have no money. They say: “We didn’t save. We threw it away.’ ”

On a Sunday night, with the holiday season ebbing, cabs were renting for as little as $55 for a 12-hour shift, he said.

“Things are a little slow, but this is still a money-making machine,” Mr. Sandoval said, banging the trunk of the cab the keys were atop — medallion number: 1Y18. “A good driver on a Friday or Saturday night can make over $300, easy,” he said. “But other nights are dead. You have to know where to go, for fares, or you’ll make $35.”

For extra credit: Estimate the month, day and year when Hillary Clinton will be driving a cab in Somalia.

Well, That's a Relief

Apparently my blog is not the web equivalent of the Hummer:

In terms of direct pollution, the impact [of an individual blog on the environment] is likely to be pretty small. To provide a reference point, the popular blogging site WordPress said it transferred about 161,100 gigabytes of data last year across 3,132,606 active blogs. Do the math, and that adds up to only about 51 megabytes of data transferred per blog per year—a tiny amount. Of course, a given blogger's bandwidth will be much higher if he or she receives lots of traffic or posts large images and videos. But even those whose sites transfer a couple of gigabytes a month would be responsible for just a few hundred kilowatt-hours of electricity per year. Using somewhat outdated stats from the Department of Energy, that would put even one of those larger blogs somewhere in the range of the average household's microwave.

That's Slate's Jacob Leibenluft on the environmental impact of blogs and other stuff on the web (link). Works for me on two levels: one, it's another reminder of how just incredibly, jaw-droppingly cheap (in terms of marginal cost, at least) is so much ordinary web use--why people are willing to offer things like near-infinite cloudware storage and, well, and free blogs. And two, how little this point seems to have sunk in as evidenced by the fact that the question is being asked at all.

Sir Alan's Education

Sir Alan Walters died. He is described as Margaret Thatcher's "economic guru" (link). The Independent recalls that he "obtained his economics degree by correspondence course."

For extra credit, this means (a) that he was free to do new thinking, unshackled by the constraints of old bankrupt ideas; or (b) he had a half-baked smoke-and-mirror education which gave him just enough knowledge to make him a nuisance.

No points off for wrong answers. Begin now.

[H/T Joel]

Caro on Valenti on the Best Historians

I heard Robert Caro, the biographer of Lyndon Johnson, talking to Brian Lamb on C-span and bosting (sic?) about how Johnson's minion Jack Valenti had ranked him with "the best historiaans" whom he identified as Macaulay and Gibbon.

Caro seemed pleased. This doesn't work for me in so many ways. One, Valenti is surely major-league suckup by any standard and I can't believe anything he'd say by way of a compliment. Two, I doubt very much that he ever read a history book of any sort, and that would include the six he is said to have written.

But three--Gibbon and Macaulay? Okay, I suppose Gibbon is likely to show up on a lot of lists, and he is a kind of a presence, but I think he is vastly overrated, probably most by people who haven't read him--or who haven't read enough him to realize how tedious and predictable that trademark Gibbonian style can become. But Macaulay was nothing more than a popularizer--the kind of guy whose name you would bandy about (especially) if you didn't know the name of any other historian.

So, who would you pick as the two greatest historians? This kind of contest is always a mug's game. Still, I think I'd have to start with Thucydides. I'd skip over Livy (the Roman Macaulay?). If I had to limit myself to a big British narrative history, I'd surely take Hume over Gibbon. But I am not sure I should be so restricted. What of the great 19th Century Germans, who more or less invented history--of whom, I admit, not knowing a word of German, I have not read a word. Well okay, how about Burkhardt--Swiss, and readily available in translation? What about Michelet, the French Macaulay?

I seem to be getting bogged down here. The point is that after Thucydides, there doesn't seem to be a clear second choice, or 20 second choices, and nobody for third. I suppose if you want to get serious about this, you'd probably have to go all the way to the 20th Century and pick Marc Bloch or Fernand Braudel. I doubt that those names would be on Valenti's smooth tongue. Heck, what about skipping the whole lot and just settling for Robert Caro? I think he'd be pleased.

Update: Damn, I forgot Tacitus, who might just be second behind Thucydides. Shamefaced thanks to Carlton for the reminder.

Drum on Shakespeare on History

Kevin Drum is puzzling over the place of "true history" in the movies. He considers the example of Shakespeare, particularly Julius Caesar (link):

Shakespeare deliberately fudged a lot of his history because he was a stooge for the Tudors, and fudged the rest because Elizabethan audiences didn't care as long as they got enough blood and gore. But the fact that Shakespeare was a great Elizabethan dramatist doesn't mean we're also required to celebrate Elizabethan mores in historical accuracy, any more than we're required to celebrate Elizabethan mores in race relations, religious liberty, or criminal justice.

I think it is more complicated than that, in several respects. One, Shakespeare was a creature of his time, and the Elizabethans were avid for history. He read, and they read, Holinshed for the British and, of course, Plutarch for the ancients. Plutarch and Holinshed didn't understand history the way we do, nor did the Elizabethans; we understand more because we have, well, more history. That doesn't mean they didn't want to get it right.

And two, recall that Shakespeare's Caesar is not precisely Shakespeare's Caesar. It's a rework of an English translation of a French translation of a Greek book about a Roman (and not very good Greek, at that). The opportunities for honest misunderstanding are limitless.

Appreciation: Pagnol on Childhood

There's a genre of fiction that you might call nostalgia lit--books that describe a forgotten world in a way that assures us that it probably was once there, and perhaps distracts our attention from the fact that it probably isn't any longer. Thomas Hardy would be the somber adult example, although most of the entries on the list involve children or young people. They may have a kind of innocence, but they aren't necessarily treacly: Lark Rise to Candleford, by Flora Thompson, would be a British example; the Little House books of Laura Ingalls Wilder perhaps qualify as an American analog.

All this is by way of introducing my apprecition for an admirable French candidate for the category: Marcel Pagnol and for the moment in particular La Gloire de mon père, the first volume of what Pagnol offers as "autobiography" of his childhood in the South of France. The best thing I can think of to say about La Gloire is that it paints an utterly convincing picture of how much fun it can be to be a child.

While the device may trascend national boundries, there is something very French about La Gloire. The thing is, I've often thought that the French are at their best in dealing with their children: the English bully English children and the Italians are bullied by theirs. But the French seem to be able to strike just the right note sympathy and detachment. And that is what comes through so strongly in Pagnol's account: the sense of just how much fun it could be to be a kid, secure in a loving family and a coherent world, a century ago (a followup is called Le château de ma mère, but I haven't read it).

I read La Gloire in French, and it has one signal characteristic that makes it suitable for this purpose. And that is: I can actually read it. My French is pretty rudimentary and Pagnol has the happy dual aspect of providing (a) that I (with the aid of my Bantam New College Dictionary) can actually dope it out; and (b) that I am willing to stick with it. It's the challenge for any language teacher, I suppose. Call it the "Xenophon problem:" trying to find stuff that adult beginners can handle, but will not bore them stiff.* For this purpose, Pagnol is perfect. The story is straightforward and gently comic; the style is easy and direct.

I couldn't pretend that Pagnol is any big secret; several of his books appear to be in print in English; many will recognize La Gloire from the movie, which gets an IMDb 6.7. From the end papers of my Edition de Fallois, I infer that he is even more popular in France. Hard earned and well deserved, I say. I'm sorry to be finishing this one, and I'll have to move on to more.
==
*Actually, I don't find Xenophon all that boring. But he can seem it when you are plodding along with grammar in one hand.

Afterthought: I suppose all that deluge of rural-life dramas at PBS could be thought to qualify. But I suspect that a good many of the viewers dodn't realize that it does not exist.

Eleven Years

That's 2020. So, some time late in the first term of President Jeb Bush, Bobby Jindal, Sarah Palin, whatever. Details here.

He's Not Even All That Funny

I'm certainly not sorry to see the back of Senator Norm Coleman and I can understand political junkies getting all hubba hubba over the possibility (the near certainty?) that the Democrats will scrape out another win here. Yet is it just me or am I correct in sensing a somewhat muted tone among the pro-Franken (or is it the anti-Coleman?) camp--recognizing that we are about to replace a lizard in a suits with a guy whose main lifetime achievement seems to lie in the field of calling attention to himself--? Let's be candid here, Al Franken suffers from a disability that you would think might be a problem for a comic--he's not all that funny. Going to bed with Arianna Huffington on primetime basic cable had a certain shock appeal and asking leading conservatives for anecdotes about their abstinence moments was--well that one, actually, you'd have to say was pretty clever (but didn't he back away from it?). But being a senator should be, done right, a difficult job, requiring a lot of savvay and a lot of hard work, not just the knack for getting your face out. If Franken is really the man for this sort of thing, then maybe New York needs to take a fresh look at this lady.

Update: I have to admit, he gets off a zinger here.

Some Favorites from 2008

Some stuff I am not particularly sorry to have written last year:

• Tentpegs of the World, Unite!
  

• Filthy Rich

• Morgenson Doesn't Explain
  

• Et in Akkadia Ego*

• Moose Turd Pie (U. Utah Phillips)
  

• Chinese Calendars

• The Luckiest Horse in the Fifth Millenium BC

• My Little Cake of Madelaine

• Remembering Parker Fielder

• I Don't Do Wagner

• Henry James' Inner Yokel

==
*Okay, so I'm proud of the headline.

Welcome Bears, Angry and Otherwise

Welcome refugees from Angry Bear, and thanks for the shoutout to Ken Houghton who, you'd think, would have better uses for his time.

More Bunin

Hassled with other stuff today, so for filler her is another snippet from the Revolution diary of Ivan Bunin:

...on the square next to the Duma the rostrums of the First of May still assault the eyes with their red color. Farther on, something incomprehensibly foul, enigmatic, and complex rises high in the distance. This something, held together by boards and apparently conforming to some Futurist design, is daubed with paint in every possible way. It is an entire edifice, narrowing at the top and graced with gates all round. Posters again hang all along Deribasovskaya Street: two workers are turning a press, under which lies a flattened bourgeois. Golden coins pour forth in ribbons form his mouth and ass. And the mob walking about? First of all, how filthy they are! How many old, unbelievably soiled soldiers' overcoats, how many reddish brown leg-wrappings on their feet, how many greasy caps on their lice-ridden heads--all looking as though theyhad been used to sweep up the street! And I'm seized with horror when I think about how many people are going about in clothes, stripped from the corpses, of those who have already been murdered!

-- Ivan Bunin, Cursed Days: A Diary of Revolution 131

(Thomas Gaiton Marullo trans. 1998; originally published in Russian in 1936)

That's from an entry for April 25/May 8, 1919; it apparently summarizes the events of several days.

Looks Like I Missed My Chance

Why wasn't I informed earlier?

The pair who invented those New Year's glasses with the year numerals say they are hanging up the shades after 2009. Richard Sclafani, half of the duo (and who was born in Brooklyn), said, "It doesn't look very good for 2010. You wind up with a '1' in front of one of your eyes." One reason is that it'll be costly to create a new mold—he says they only made a profit of $92,000 in their peak year, and business has fallen off since 2001. Plus, knock-offs sell for 79 cents, which is what Sclafani and Peter Cicero charge as the wholesale price of the glasses (Sclafani made 10,000 this year and only sold 2800). Still, they knew it was a great idea when they came up with it in 1990; Sclafani said, "I could picture the people in Times Square wearing them."

(Link). Well, I guess they can always bring them back when the Chinese observe a year of the M-O-O-S-E.

Now, That's What I Call Capitalism!

Raghu Rajan got a well-deserved shoutout New Years' night from The Wall Street Journal (link) and its blog (link), for having been a skeptic back when the world was full of believers. Rajan is co-author (with Luigi Zingales) of Saving Capitalism from Capitalists. Amazon sales rank for the paperback, as of 7:26 am today: #146,917. As of 9:53 am today: #62,917.

Update: 11:44 am #73,295. Oops. I was about to concede that the early morning jump might mean going from one sale to two. But what does this mean? A return?

Cheese?

Calculated Risk considers the possibility that Americans respond to the recession by buying cheese. Makes me remember my friend Ignoto, who got through college on government surplus cheese.

Surplus cheese? Yep, seems that Ignoto's roommate was Chinese (-American) with a grandmother in a nursing home down in Locke. Astute Californians will recognize Locke as a community with a heavy Asian presence. The nursing home got regular shipments of government surplus cheese. For a cohort of residence who are genetically unable to metabolize dairy...

Surplus: Years ago in my Kentucky newspaper days, I asked my friend Ivan what East Kentuckians did with all that government surplus lard. Dunno, said Ivan. Trade it for whisky?

Sightem

Sign in an East Bay Hotel:

When Activited, Alarm Will Make a Yelping Sound

True of me, too, I think. Or at least, of Bette Midler.

Georgraphy is Destiny: The Polish Election

Here's one I stumbled on by accident:
...but it's pretty good proof that old habits are slow to change. The black line is the 19th Century Bismarkian (Wilhemian) Germany Empire. The colored splotches are modern Poland. The brown splotches are the "Civic Platform," roughly the successor to the Christian Democrats, "market conservatives," favoring privatization and the flat tax, opposing gay marriage and abortion . The blues are the populist-conservative "Law and Justice" party, descendant, in part of the Solidarity movement, also conservative on social issues but without the free-market heresy. Be interesting, if you could do it, to try to chart out the parallel split in the United States, where free-market and populist conservatives for many years have shared the same (Republican) party political space--although this year, quite a good many of the natual "market liberal" voters voted for Obama.

Source:Wikia, via Strange Maps and Andrew Cusack.

Financial Panic: Been There, Done That

The Wichita Bureau has been reading about the Panic of '07, and hears an echo in the back of his skull:

The panic was blamed on many factors - tight money, [T.R.] Roosevelt's Gridiron Club speech attacking the "malefactors of great wealth," and excessive speculation in copper, mining and railroad stocks. The immediate weakness arose from the recklessness of the trust companies. In the early 1900s, national and most state-chartered banks couldn't take trust accounts (wills, estates, and so on) but directed customers to trusts. Traditionally, these had been synonymous with safe investment. By 1907, however, they had exploited enough legal loopholes to become highly speculative. To draw money for risky ventures, they paid exorbitant interests rates, and trust executives operated like stock market plungers. They loaned out so much against stocks and bonds that by October 1907 as much as half the bank loans in New York were backed by securities as collateral - an extremely shaky base for the system. The trusts also didn't keep the high cash reserves of commercial banks and were vulnerable to sudden runs.

--Ron Chernow The House of Morgan 122 (1990)

Thanks,John