Friday, April 30, 2010

Skuldabréfavafningur

Hint: goes with Eyjafjallajökull. Link.

Oh. My. God.

Hard to think of anybody whose rep has fallen faster or farther than Bob Rubin's. And unlike this guy, Rubin apparently can't even get laid.

Power? Who Needs It?

Ramesh Ponnuru questions whether House Republicans really want to win control. Kevin Drum raises his eyebrows. "Holy Cow," he responds succinctly.

Seems to me you can consider the question on two levels. One, macro: would Republicans be better off in 2012 if they lost in 2010? Some probably think so: it seems to have worked that way with Clinton/Gingrich in 2002. The Wall Street Journal offers a crisp summary of this perspective.

But consider the micro. Let's face it, most Congressmen of both parties are, or were, pipsqueaks, people whom nobody ever heard of (at least before election day), people for whom the job of Congressperson is the chance of a lifetime. You can see this when you consider how much they have to abase themselves just to get there.

And so now what? Get "power" you say, but exactly what do you mean by that? Recall the hallowed distinction: some folks live for politics but others live off politics. For a great many, the key to success is not the power to alter a semi-colon in a 1300-page reform bill; it is the power to control a nicer car, more booze and broads, skybox tickets, a better class of golfing vacation.

Given the general level of voter grumpiness, you're not going to get a lot of those goodies as long as you stay in Congress--or if you do, you stand a good chance of spending a medium-term vacation in government housing outside Tucson. You're much better off redirecting your gaze away from the Speaker's office and on down Pennsylvania Avenue to the road to riches we know as K Street, where you get to dole out money, rather than having to beg for it. Now, that is power worthy of the name. If indeed that is your goal, a few terms as a foot-soldier in the Congressional battalion may be a necessary way station. But to have to bear the actual responsibilities of governing can be no more than an onerous distraction en route.

Blalack on Congressional Hearings

Lots of people are enjoying a moment of harmless merriment this morning at the gaffe candor of K. Lee Blalack II, licensed comforter of the comfortable, as he explains how to stonewall a congressional hearing:
Long, thoughtful pauses followed by rambling nonresponsive answers can easily devour half of a member’s allotted questioning time.
Copy that, ol' buddy, and take it as a reminder that there's nothing in law so ugly or disgusting that powerhouse partner of a prestige law firm won't do it for money (enjoy Blalack's client list here). But what interests me is that this running dog for the master class is not himself a product of the master class puppy farm. That is: how many, do you suppose, of Blalack's partners at the law firm of O'Melveny & Myers ("excellence, leadership, and citizenship") bring degrees from Harvard, Yale, Stanford, Columbia? Most, I would assume. And how many (like Blalack) from the University of Memphis, winsomely tucked away down in the US News Tier 3? I mean--I'm really not in a position to evaluate the basic education you get at UM, and with an in-state tuition of $13,710, it certainly looks like a bargain. But my guess is that at prices like that, they just don't have time to teach you how to clip your fingernails.

Fn.: A number of commentators have offered up a telling riposte: given the abysmal quality of most Congressional questioning, these guys don't deserve an honest answer.

Wednesday, April 28, 2010

BBC/RSC Hamlet

Notes on last night's PBS Hamlet: you've got to give them credit, the folks at BBC and the Royal Shakespeare, for putting together a no-gimmick production--thoughtful casting and attention to detail. Indeed some of the best bits are the stuff so easily short-changed in a more casual performance: dead-on Rosencrantz and Guildenstern, a convincing Horatio and probably the best Laertes (Edward Bennett) I've ever seen. And you can't blame them for showcasing Patrick Stewart as Claudius: sure, they are trading on his Star Wars Trek celebrity, but he's made his bones at Shakespeare and he plays his part with (almost) as much heft as Derek Jacobi. Penny Downie as Gertrude is a good match for him; she gets better as the evening goes on.

The trouble is at the core with David Tennant (aka the Tenth Doctor Who) as the Prince. Even here, it's not for lack of trying. Tennant can get his mouth around a Shakespearean line, which is no mean feat. He gambols and prances about the stage enough to convince us that he is, if not mad, then at least running over with adolescent energy. Sometimes this works: when he berates Ophelia or Gertrude, or when he taunts Polonius, we can recognize him as just the sort of oversized infant that we'd like to pitch out of the house.

But if this is all we get from Hamlet, then it isn't a very interesting play. What really engages us is that this raw adolescent also has the seeds of majesty in him. Ophelia loves him because he is worth loving, and feels his loss so bitterly because he is worth the keeping. Denmark needs him, and we can feel Denmark's misfortune when it no longer has him. Tennant (or his director, Kenneth Doran) doesn't seem to get this. Tennant's Hamlet is at best no more than an engaging child. His death is pathetic, but doesn't come close to tragedy.

[An added complication is that Tennant himself is well into middle age. Hamlet's age is in any event a textual problem: is he 17 or 30? best to leave it as a puzzle and recognize that Hamlet may be both at once. But a middle-aged Hamlet who acts like a child--that much is only creepy.]

So hobbled, it's not surprising that the ensemble simply isn't equal to what must be one of the greatest scenes in all of Shakespeare: the prequel to the great sword fight, when Hamlet comes to accept his fate with a quiet dignity. Tennant mouths his way through the lines well enough, but it's perfunctory: nobody seems to have his heart in it. In particular, nothing in the prior development of the character leads us to accept Tennant as projecting the poise and comprehension that Shakespeare thought he could display.

As I suggest, this is a pity. With so many of the little bits right, and with a lead player in possession of such impressive technical skill, it's a shame to see it all go to waste. But if the the best they can offer is a technically more proficient Jude Law, it seems to me that they've thrown away a great opportunity.

Afterthought Evidently mine is not a universal view; cf. link, link, link.

Pirates

I suppose the last time I read anything read anything about pirates, I must have been about ten. A lot has happened to pirates since then: they've been trapped and caged by the professoriate; they've been turned inside out and scrutinized so as to understand their place in social theory. Most of this inquiry has been carried on without my knowledge or consent but I begin to get the flavor as I read Colin Woodard's entertaining The Republic of Pirates (2007).

Woodard himself is refreshingly free of ambitious academic pretensions. What we have here is straight narrative, mostly about the Caribbean, chiefly about the period from 1716-20, sometimes loosely described as the locus of "the pirate republic" in and around Nassau in the Bahamas. In context, the label seems extravagant but not quite wrong: there does seem to have been a little window in time, and a little corner of the world, in which pirates could pretty much do what and go where they pleased.

Funny how when we think of pirates it is almost always the Caribbean we remember, letting slip the insight that pirates have been visiting their predations upon "legitimate society" for just about as long as there was anything to predate upon. Pompey cleaned them out of the sea lanes of the Roman Empire; Thomas Jefferson confronted them on the Barbary Coast, and Barack Obama may be the first president in some 200 years to preside over any pirate killing.

But it's Blackbeard and his 18th Century companions who catch most of our attention, and with good reason: aside from the hooks and the parrots, it does seem that around 1720 the planets were in alignment for piracy to a degree only rarely equaled at any other time. You had, first of all, great wealth in the Caribbean, including the scandalous but just barely legal traffic in African slaves. You had weak local government. You persistent instability in the wake of the "War of the Spanish Succession," which pitted English and French against each other in conflict over Spanish interest. You had a history of "privateering"--really piracy under government sanction.

And you had what might have been most important--a bunch of underemployed ex-combatants looking to make a few pence. Which invites attention to one often overlooked fact about piracy: it's a skilled trade. Even the lowliest deckhand had to know a halyard from a bowsprit, and the captaincy of a pirate ship required great management skill. Considering how good the pirates were at what they did, it's a wonder that they weren't even more successful. Indeed while I'm not sure I can put numbers on it, my guess after reading Woodard is that the defeat of the pirates may have had more to do with hostile weather than it did with sovereign power.

I did find my mind wandering to other perhaps comparable gaps in sovereignty. The cowboy era: again just a moment in time, much more transitory than you would guess from its prominence in the movies (I suppose there are all kinds of good reasons why cowboys and pirates make such popular movie themes). The cowboys didn't have the pirate's targets of opportunity to prey upon, but we witness some of the same improvisational state-building in each case.

Another, perhaps more trivial, example, is the shoot-em-up bad boys of the 1930s--John Dillinger, Baby-Face Nelson, that lot. They never reached anything like the pirates' complexity of organization. But they probably do represent a gap in the social fabric--a brief moment of dislocation during which the bad guys had more resources than the good.

And how, exactly, shall I classify the Mongols or the armies of Islam who appeared out of nowhere and came close to putting western sovereignty completely out of business?

Present-day comparisons are seductively easy. I see that some guy at George Mason (surprise!) has written a book arguing that pirates are just capitalist entrepreneurs in bright colored bandanas. Pirates as bankers? Next thing you know, somebody will be telling us that bankers are pirates. Oh wait.

More on The Fourteenth Banker

These guys look like a keeper:

In response to the comments of folks in the Congress and oversight regimes, I have created this blog as a home for bankers who need to speak out and do not have a central clearinghouse or a safe place to do so. Big banks now treat their employees like property, bought and owned. Typically employees must subject themselves to all sorts of potential sanctions, forfeitures of compensation, clawbacks and even lawsuits if they speak in ways we often have thought were protected speech. I am not talking about revealing confidential customer or proprietary information, I am talking about simply commenting on a company, management philosophy, making general observations or raising concerns. It makes one appreciate unions even if not historically supportive of unions. At least management and labor can have a debate. Not so in today’s large banks. Gag orders are written in the most intimidating way, included in Codes of Ethics, attached to incentive plans, posted on the company home pages. We should ask ourselves, what is the big secret?

"About the Fourteenth Banker," introducing the new blog last month.

Goldman and Institutional Culture

The Browser showcases a pithy insight into institutional culture from a blog hitherto unknown to me:
You may violate certain portions of the Code of Ethics so long as your manager and team benefit and these violations are on the unspoken, unwritten “approved violation” list. Generally these will make lots of money for the firm and yourself.
That's from The Fourteenth Banker, watching the Goldman hearings. Good catch, and I mean no disrespect when I suggest that with a little bit of tweaking this describes any institution, not so? We all have our "rule book" and "how things are done," our langue and our parole. This doesn't need to be as cynical as it sounds; indeed it doesn't need to be cynical at all. Part of the point is that human conduct is too rich and various for any rulebook--witness how quickly the enterprise breaks down once the boys on the shop floor start "working to rule." And there is an important point here about leadership: maybe the folks on the bridge at Goldman said "wink wink," but there are others who will say "sorry. sonny, we just don't do it that way."

Tuesday, April 27, 2010

Rio Bravo and Confused Mythology

Chez Buce enjoyed a screening of Howard Hawks' (John Wayne's) Rio Bravo the other night, probably more as a classroom exercise than an entertainment. We didn't know each other back when the film came out in 1959 but we now stipulate that neither one of us would have attended the premier except as a condition of probation. Still, we were curious to know what kind of film would rate a score of 100 percent at Rotten Tomatoes.

I guess the best thing you can say is that we did get through all 140 minutes of it, and it does have its points: John Wayne as a flawed and vulnerable hero with a bunch of flawed and vulnerable sidekicks (Dean Martin as a reformed drunk--now, there's a stretch). Oh, and Angie Dickinson almost dominating a cast otherwise nearly all male. The pace is interesting, too: that Hawks fellow does know how to reel out a narrative.

I assume it was an eye-opener for dedicated Wayne fans to see their hero as thoughtful, easy-going, prone to misjudgment, but able at last to work as the focal point on a team. Teamwork: yes, that's the ticket. Which is why I find so puzzling what seems to be the received narrative of the place of Rio Bravo in film history:
Rio Bravo (1959) was an answer to the pessimism of High Noon, which have been seen as an allegory for the McCarthy era. Behind the script was the blacklisted writer Carl Foreman, who went into self-imposed exile to England. Hawks objected the film because he didn't think "a good sheriff was going to go running around town like a chicken with his head off asking for help..."
Huh? Excuse me, but doesn't this have it exactly backwards? Isn't the conservative tradition that of the besieged loner, underappreciated and almost overmatched as he achieves the goal of protecting the freedoms on an indifferent multitude? And isn't it the liberal mythology that We're All In This Together--the drunk, the untested kid, the geezer even (geeze louise) the girl? Couldit be that Rio Bravo is the film in which Hawks/Wayne, outs himself as a Unitarian?

Side Note: As I say, neither Mrs. Buce nor I would have counted ourselves as a Wayne fan in youth. It does seem that each of us is ready to make one exception. Hers: The Quiet Man, where Wayne and Victor McLaglen beat each other senseless and (of course) wind up as fast friends. Mine: True Grit, where Wayne wears and eyepatch and shouts "fill your hand, you sonofabitch!" Not sure we are up for two more evenings of Wayne, though; at least for now, Rio Bravo is enough.

Swede Power

My friend Ignoto offers up a compelling reason why the Supreme Court nominee should be Michigan governor Jennifer Granholm: she's Scandinavian, with both Swedish and Norwegian ancestors. That would make her (at least?) the third Scandinavian on the Court, all in the living memory of at least some of us. Chief Justice Earl Warren also claimed Swedish/Norwegian ancestry. Chief Justice William Rehnquist appears to have been Swedish on his father's side; his mother's ethnicity seems to be "Wisconsin," which might be the same thing.

We briefly batted around the idea that Chief Justice Warren Burger was also Scandinavian. Apparently no; Wiki puts him down as "Swiss German." But Burger does appear to have nurtured a soft spot for Swedish society, in particular, it seems, its ability to survive without the Fifth Amendment (not clear what he thought about all that socialism).

But Granholm might lose out on diversity grounds: per Wiki she (unlike her Lutheran/secularist forebears) is a Catholic. That would give us a court of seven Catholics and two Jews, effectively demolishing the much-coveted Protestant seat.

Monday, April 26, 2010

GM Did What?

Denver Post does a nice job of deconstructing all that horse hockey about how General Motors has paid its debt to the government. Shorter DP: Well, they paid back some of it. But with the taxpayers' own money.

Always Wanted to Say This

Never had the nerve. Thanks, Mark.

Econ: French Disease? Or Maladie Américaine?

Steve Levitt predicted a year ago that Esther Duflo would win the John Bates Clark medal, and he can prove it: "she is the odds on favorite," he said in 2009 "to win the Clark medal in 2010."

More interesting, to follow up on last week's UB snark, here's an item hoisted from Levitt's year-old comments, with a saucy suggestion as to why all these French wunderkinder (prodiges?) are working in the US:
In France, where I live, economics is regarded as an evil science that always leads to bad policies.. For that reason (?) french equivalent of the Treasury secretary is always chosen among CEO’s of big french corporation, not among good economists… It’s true that young french economists teaches mostly in U.S Universities, and writes mostyl in english, and in the local media, we never hear about them…
Afterthought: Well, wait a minute, how often does an American economist--as distinct from wheeler-dealer, financier, etc.--get to be secretary of treasury? Summers of course, but there was a fair amount of nervous giggling when he took the job, even among his friends.

Out-of-the-Money Call Option of the Day

Update:I think the post infra is wrong. I seem to be assuming that Bloomberg bought some leveraged equity behind debt from which it can walk away. But on second look, I don't see it: I'd say they just got it for a nice cheap price.

Anyway, here's the snippet:
Bloomberg bought the magazine from McGraw-Hill for $5 million cash, or 0.079 percent of Bloomberg’s estimated $6.3 billion in revenue.
Per the New York Times, in a riveting piece about, shall we say, "the discontinuity of cultures," enough to scare the pants among any remaining ink-stained wretches among us.

On second look, the $5 million number may be misleading. An earlier Times story reported that Bloomberg was also picking perhaps $31.9 million in liabilities, which would bring the effective price all the way up to a bit over half a percent.

An eyebrow-raising datum, no doubt; still, what I'd really like to know is what we'd see on Business Week's own balance sheet. We can't of course, because BW was just a unit of McGraw Hill, but my guess is that what Bloomberg is buying here is essentially an out-of-the-money call option on the assets--a lottery ticket on a seriously insolvent (liabilities>assets> company, with the assessment that Something Might Turn Up. Nothing to see here, folks, just more of the same, but still another reminder of just how truly awful the raffish news trade has become.

H/T Joel

Sunday, April 25, 2010

Semi-Appreciation: El-Gamal and Jaffe on Oil

El-Gamal and Jaffe's Oil, Dollars, Debt, and Crises must be the third best book on (as their subtitle calls it) "The Global Curse of Black Gold." The first best is, no doubt about it, Daniel Yergin's The Prize, surely one of the prodigies of journo-history in any field. The second best is--ah, now there you have me. The second best is the book that E&J promised but never quite brought off. Leaving aside Yergin, I can't say I know of a better book than E&J on the subject at hand; I just wish it were better still.

I found E&J used on the shelf at Powell's Portland last week. My thought after the first 20 pages was "how come nobody told me about this one before?" My thought after the next 50 pages was "I guess I know why nobody told me about this one before." But I pressed on to the end and I can't say it was time wasted. As an aide-memoire on the politics of oil over the last 40 years, it's actually pretty good: assembles a lot of data and, if you lived through all of this, serves as a pretty good reminder of a lot of what you lived through. Still, you've got to wonder about a history of oil without index refs for Nigeria or Libya, or that discusses Middle Eastern politics without an index reference for Israel.
v

The trouble is it seems to offer so much more. From the intro, you get the impression that they are going to offer a new framework for analysis. Well, no. What they do is to remind us that the oil market is like any other market, is not self-executing mechanism: it's the tool and engine of political issues that have little or nothing to do with oil. They provide a useful reminder of how the 1973 oil shock can't be understood outside the context of Nixon's decision to abandon gold in 1971. They provide a cautionary review of how badly the Middle Eastern countries mismanaged their oil wealth in the 70s and 80s.

They assert, but do not really demonstrate, that all the ups and downs in the oil market are entangled with the cycles of boom and bust in other parts of the economy. They offer up suggestive references to (and a presentable summary of) Hyman Minsky on boom and bust. But in the end they leave the reader pretty well convinced that oil busts aren't really Minsky busts at all, but problems with a trajectory all their own.

Markets are tied up in politics; that is true, but not new: it was Yergin's central premise. Yergin has always been hard to beat, and on the evidence here, he remains the champ. Still, Yergin cuts off around 2008 and it is useful to have a summary, however incomplete, of what has happened since.

Saturday, April 24, 2010

Historical Novels, and What My Mother Told Me

What my mother told me: she told me that when I was a kid, I nurtured a deep suspicion of fiction. When the read me a story, I would ask "but it is it true?" Well, harrumph. Well--well it could be true. Apparently it became a catch-phrase, not least because it fobbed me off for a time.

As an adult, I love a good novel: I love those occasions when you can dive into a pool of narrative and just sink like a stone, to disport yourself with the fanciful sharks and the squid. But I don't do it very often. Apparently I'm still paranoid, with my crap detectors on stun. I'm far more likely to toss it aside after 40 pages and back to something grounded like a bus schedule. This is not necessarily a life-enhancing character trait, I'm sure I miss out on a lot of good stuff. Particularly with "historical" fiction: generally I steer clear of it, as bound to be an insult to my my more humdrum sensibilities.

So I'm surprised delighted to find out how much I've been enjoying John Edward Williams' Augustus, about the founder of the Roman Empire. Not that he gets everything right: there are obvious anachronisms, some coyly intentional, others just there. But in general he tells a story with a ring of truth: it could be true.

Which set me to thinking: I wonder why it is that Rome seems to have more than its share of successful historical fiction. I mean--the English Restoration yields up a whole genre of bodice-rippers, and the Crusades are full of cardboard heroism. But from Rome, we have Williams; also Margaret Yourcenar's Memoirs of Hadrian and the Robert Graves Claudius cycle. And I suppose there are more.

With serendipity, I've stumbled on a possible reason. I'm reading Michael Kulikowski's review of Adrienne Mayor's The Poison King, a biography (after a fashion) of Mithridates king of Pontus who proved such a huge pain in the neck to the Romans in the late Republic. Shorter Kulikowski: it's an honorable attempt, but she really doesn't have enough to go on. So maybe she would have done better to try the novel:
We are...in a territory that properly belongs to historical fiction, a medium that can, in the hands of Henry Treece, say, and occasionally even of a journeyman writer like Bernard Cornwell, achieve insight into character, motive, gesture and scene, without the restraints that the non-fiction world imposes. ... As scholarship, a book like this one is insufficiently novel to advance on the dry-as-dust monographs on which it is based, yet is simultaneously too constrained by the conventions of the discipline to open revelatory new prospects onto Mithridates and his world. Indeed, to get inside the mind of Mithridates one can still do worse than read a fictional reconstruction of his greatest enemy's memoirs: Peter Green's Sword of Pleasure inhabits Cornelius Sulla's patrician Roman mind in all its brilliant, terrible logic. In doing so, and freed from the academic trappings its author could just as easily have deployed, it tells us far more about what Mithridates faced, why his mere survival over so long a period was itself a titanic achievement and why, once he was dead, the Roman world would never tolerate his like again.
That's Kulikowski in the London Review of Books, 23 April 2010 34-36, 36. I wonder if Rome in general is that "territory that properly belongs to historical fiction"--just enough by way of documentation to tease us, not enough to build a three-dimensional product. Note to self, go find a copy of Peter Green on Sulla. Sounds like it could be true.

Update: Here's a (nuanced, qualified) appreciation of Sir Walter Scott.

Update II: Other historical novels I remember enjoying recently: Evelyn Waugh, Helen; Janet Lewis, The Wife of Martin Guerre.

Pirate Duds

The topic is pirates and why they wear all those fancy duds--patterned head scarfs, bright-colored blouses and such.

Maybe you knew but I'm just finding out: it's because they were predating on (inter alia) the East India trade, as it hauled fancy goods back from the great Mughal Empire to the rather more threadbare upstart in London. So, you take the gold and rape the women and boys. And you play dress-up. Or so I surmise from Colin Woodard's The Republic of Pirates (2007). which tells you know all that you may want to know and perhaps more about what life was like before Johnny Depp.

Friday, April 23, 2010

Been a Great Week for French High Achievers

Esther Duflo.

Fabulous Fab.

"A Banana Republic With No Bananas"

Read on.

Meta Note: Search my Google Reader for "banana republic," and you get 369 hits, not all of them by me.

Technoageism Watch

Mark Whitney at TheLawNet puts his cyberfoot in his cybermouth (or his cyberhead up ... no, strike that):
Over a decade ago, when we launched THELAWNET v.1, my father made a comment to my then teenage sons that I will never forget: "I saw Dad's Internet." Even today, barely a week passes where I do not help my father wrestle with technology. At 76, armed with a remote control containing 60 buttons, it is easier for him to DRIVE from ESPN to the New England Sports Network than it is for him to change the channel.
Get a grip on yourself here, Sonny, and listen real close. You gratitous libel per quod story is, for starters, incoherent on its own terms. You say it "brings is to" a story of how Justice Roberts doesn't understand e-mail. You seem not to have noticed that you kicked the horse out from under yourself by explicitly acknowledging that Justice Roberts are more or less the same age. Your point seems to be that you are a proud geek while Justice Roberts is a mere dork.

Okay, granted. So why are you telling us how stupid your father is? Specifically, the relevance of his age is--ah?--well, let's just say that if you persist in these displays of deteriorating synaptic tissue, I'll have to assemble a platoon of technogeezers to come over to your house and beat you senseless with our lithium-battery-powered walkers. You have been warned.

Alternate Tag Line I: If you're considering a career change, I would counsel against diplomacy.

Alternate Tag Line II: But I do know how to find "unsubscribe."

The British Conundrum

Just heard a BBC commentator--maybe Andy Hamilton, say that Britain is divided between people who say

I've never voted Lib Dem before
But I really like that Nick Clegg.


...and those who say

I just might vote Lib Dem
If it weren't for that Nick Clegg.

Hey, This Isn't a Popularity Contest
(Whups, Pardon, I Guess It Is)

Radio France International ranks Obama as the "most popular" leader, and FP offers a justly acerb acerb critique of the methodology. Right enough, but it's also a useful reminder of how American leaders are often more (John F. Kennedy) or less (George W. Bush) popular away from home. Cf. the lunatic enthusiasm for Chairman Mao among pampered UMC westerners in the 60s. On the same theme, I guess I'm a bit surprised that Hu Jintao came across with a bad rep, considering that I suspect that the ordinary westerner-on-the-street probably has no idea who he is.

And speaking of not knowing who he is, here's a guy that probably belongs in my rotisserie league competition of for "best" (huh?) world leader--Kevin Rudd of Australia, until lately no more than a name to me, apparently held in high regard by Barack Obama, Bill Clinton, perhaps even Hu Jintao to whom, by reports, Rudd can talk back in Mandarin.

Oh, and I Meant to Add: If you're looking for a world leader who is truly popular in his own country, I suspect the champ might be Vladimi Putin.

Finance Miscellany

Got to write a &*@! exam today. Meanwhile, here's some good finance stuff:

Shakespeare's 446th

My friend Steve says he got this clipping from his mother's mother back in 1978. When he sent it to me a while back, he said it was still on his wall:
Arthur Weyne’s sister used to take the Avenue A bus from 10th Street to Houston almost every work-day morning. "At Fifth Street," he recalls her telling him, "almost every morning, a short, frowzy, chunky shlump of a woman would be waiting for the bus and board it with groans, glowers,protests, and have exertions. She carried bundles – always. They were of a clumsy dimension, varying sizes and divers degrees of vulnerability; there were never fewer than four."

"She always paid her fare grudgingly, then flopped into a seat at the front, sometimes commandeering one with an authority no one ever disputed, and sat there frowning, creaking and giving off emanations of menace. Since she had started her cascade of complaints on the step of the bus, and went on from her seat, haranguing the driver: he stopped too far from the curb; the step was much too high; the fare was unreasonable; he drove like a wild Indian. She went on beyond Houston, so my sister never knew whether she ever stopped caterwauling.

"One day in April, as my sister's bus was approaching Fifth Street, she was relieved to see that Complaining Cora – as of course she known: her name was Cora – was
not at the curb. But a woman was waiting for the bus, and the driver stopped to take her on. Lo and behold! – my sister insisted this was the only way to express it – the woman was Cora: bundleless, dressed in a lovely frock, a flowered hat and long white gloves. More startling than her costume was her face. She was beaming – pleasant, jovial, gay.

"Cora didn't merely board – she made an entrance. She paid her fare, even the coins tinkled gaily. Then the startled passengers began to call out, 'Is that you, Cora – really you?' The driver pulled the bus to the curb, stopped and faced her, 'What's "hoppen", Cora?'

"'Nothing is "hoppen"', she said, as though proclaiming an amnesty. "'Today is Shakespeare's birthday.'

--Lawrence Van Gelder New York Times,
The Living Section, page C2, June 27, 1979.
Weyne is a writer, editor and Jewish author.

Thursday, April 22, 2010

Critical Judgment of the Day

Two in a row, actually. Patrick on Robert Frost:
One is never certain with Frost what is self-revelation and what is performance. He’s a poet one would never bother with if so many of his poems weren’t so good.
Link.

Wednesday, April 21, 2010

Cheesiest Excuse of the Day
(Colossus of Finance Division)

It's all the girl's fault.

Waldman on Abacus

I'm a great admirer of Steve Waldman and I'm still trying to make up my own mind about Abacus so I pricked up my ears this morning when I'd heard he had weighed in to savage Goldman. What set him off is this line from the Goldman "defense:" "These [CDO buyers] also understood that a synthetic CDO transaction necessarily included both a long and short side." Steve pops a cork:

The line I’ve italicized is the sole inspiration for this rambling jeremiad. That line is so absurd, brazen, and misleading that I snorted when I encountered it. Of course it is true, in a formal sense. Every financial contract — every security or derivative or insurance policy — includes both long and short positions. Financial contracts are promises to pay. There is always a payer and a payee, and the payee is “long” certain states of the world while the payer is short. When you buy a share of IBM, you are long IBM and the firm itself has a short position. Does that mean, when you purchase IBM, you are taking sides in a disagreement with IBM, with IBM betting that it will collapse and never pay a dividend while you bet it will succeed and be forced to pay? No, of course not. There are many, many occasions when the interests of long investors and the interests of short investors are fully aligned. When IBM issues new shares, all of its stakeholders — preexisting shareholders, managers, employees — hope that IBM will succeed, and may have no disagreement whatsoever on its prospects. Old stakeholders commit to pay dividends to new shareholders because managers believe the cash they receive up front will enable business activity worth more than the extra cost. New shareholders buy the shares because they agree with old stakeholders’ optimism. The existence of a long side and a short side need imply no disagreement whatsoever.
There's more, but even on this, Steve seems to think he has made hash out of Goldman's position. And he has his defenders: James Kwak says it is "The best thing I've read on SEC--Goldman (So Far)" (link) (cf, also the long comment threads following Waldman and Kwak.

But the more I read in around the topic, the less sure I am that Steve is right. Or, maybe he is somewhat right, a little bit right, partly right--but I don't see Goldman's statement as "absurd." At least in this context, I suspect that the statement "for every long there's a short" is, if not exactly true, still close enough.

Start with the world of deals. Clearly there are deals that are win-win--in the jargon of the trade, "Pareto maximizing." If I have a brand new pair of roller skates and you have a brand new key, why then we can make beautiful music together. If you have a skillet and I have a fish--well, you get the idea.

But in a thousand years of teaching, I have never quite convinced students that Wall Street is really like that. As far as they can see, it's all a series of guesses--some right, some wrong. But insofar as it is just guessing, it's zero sum. For every long there's a short.

DeLong sees the problem and makes a heroic effort to talk his way out of it, but he doesn't sound quite convinced himself--indeed he scrutinizes one of his own examples and then kicks a hole in it. Yes, there may be "insurance" or "time preference" or "risk aversion." But a lot of Wall Street is long-short.

But I don't mean to let Goldman off the hook. The trouble with Goldman's argument is not that it is "absurd;" the trouble lies elsewhere. The trouble is that all this long/short stuff is quite beside the point. The question is still what the buyer knew or should have known, what the seller said or should have said. So maybe Steve is right to say that the GS position is "misleading;" maybe even "brazen." But not "absurd."

Afterthought: there is still, of course, the question of why on God's green earth anybody should be permitted to engage in a transaction potentially so destabilizing and with so little apparent social utility. But that is for another day.

Tuesday, April 20, 2010

The Masterpiece Theatre Party

I suspect that if there is one thing that the American chattering class of a certain age can agree on in politics it is the superiority, moral and intellectual--or at least aesthetic--of the British Liberal Party (these days, it's actually the Liberal Democrats, the Lib Dems, but we keep forgetting the Dems part). In our heart of hearts, it is right up there with Masterpiece Theatre--no, maybe it is Masterpiece Theatre with all those wise, wry yet compassionate vicars and dons assuring us that there'll always be a n England Britain and we won't have to be ashamed of it. We may be a bit chagrined about the drinking habits of Charles Kennedy although he seemed like a good chap; we have a vague sense that Paddy Ashdown is as solid as roast beef, but our memories really go back to Lloyd George, Herbert Asquith and perhaps even to the great W.S. Gladstone (Wasn't he the one who actually translated the Iliad? Oh yes he was.).

Ours is a taste somewhat like our youthful taste for Chairman Mao, in that it is perhaps best enjoyed at a distance. It has the added advantage of powerlessness: it's coming on 88 years now since the last liberal prime minister got himself turned out of office; ever since the libs have been free to counsel, to criticize, and otherwise to take the high ground.

Now we are in odd position of discovering that we might get what we wish for. It's probably still a long shot, but leveller heads than our own are saying that the plague-o'-both-your-houses British electorate is about to return a hung parliament, and that that nice young chap Nick Clegg, the Lib-Dem leader might find himself a coalition prime minister.

Nick who? The truth is, we have a tough time distinguishing him from David Cameron, the one with the boyish smile who fronts for the conservatives. Clegg, the son of a banker, is just four months younger than Cameron, the son of a broker. Private schools, check, Oxbridge, check. The fact is, they are a couple of toffs. Cameron's pedigree is perhaps more Handelian; but Clegg can claim descent, if not from the Scottish highlanders, then from a member of the Imperial Russian Senate.

And now here is, the fresh-faced boy who seems to have set the nation on its ear with a dazzling presence in a debate the other night. Clegg for PM? I'd say it still has to be regarded as a longshot, but the British press has decided that that it's not beneath them to take it seriously. And what they find, of course, is that things are far stickier close up than they look from far away. Here, Timesonline puzzles over the issue of how he Clegg builds a coalition :

It’s easy to imagine Mr Clegg forming an alliance with Mr Cameron. A public-school-educated son of a banker, the man who leads the Liberal Democrats looks like a natural Conservative. Indeed, when he was working for Leon Brittan in Brussels, the European Commissioner assumed that Mr Clegg would end up as a Tory MP. Like Mr Cameron, Mr Clegg backs free schools and wants to scrap ID cards; he is in favour of a smaller state and green jobs. The “Orange book” Lib Dems and the Tory modernisers are socially as well as economically liberal. But neither represents their whole parties. Can you imagine Mr Clegg going into a coalition with Bill Cash? Or the Lib Dem sandal-wearing lefties agreeing to prop up a minority Conservative administration?

The Labour Party is similarly divided between modernising liberals and more statist traditionalists. The first group, which includes most of the Blairites, is in favour of constitutional reform and choice in the public services. They would love to create the “progressive alliance” with the Lib Dems that Mr Blair discussed with Paddy Ashdown in the run-up to the 1997 election. But they do not have complete control of their party. The second Labour group has a visceral loathing of the Lib Dems, regarding them as a combination of wimps and traitors with dangerous ideas about the role of the State. They would never contemplate any kind of alliance.

Mr Clegg has a problem with Mr Brown. It dates back to the MPs’ expenses scandal, when the Prime Minister summoned the Tory and Liberal Democrat leaders to a crisis meeting at No 10. They were given a 15-minute rant about what should happen, which ended with Mr Clegg telling Mr Brown: “Look, Gordon, there’s no point having this meeting if all you want to do is lecture us.” It was no coincidence that in last week’s debate, Gordon’s catchphrase was “I agree with Nick”, but Mr Clegg repeatedly shrugged him off. For the Lib Dem leader, his Labour rival symbolises the old style of politics. Despite Mr Brown’s recent conversion to changing the voting system and Lords reform, he sees him as part of Labour’s statist clique.

Indeed, those close to Mr Clegg have made it clear to senior Labour figures that it would be difficult for the Liberal Democrats to do a deal with a Labour Party led by Mr Brown. “The whole notion of change is so important to Clegg and Gordon doesn’t represent change,” says one Labour strategist. “It’s hard to see how they could prop up Brown in a hung Parliament.”

Link. So yes, we just might have a Clegg ministry. And a messy, confused, incoherent melange it may be. Welcome to hard times. And by the way, while we're considering how much Clegg looks like Cameron, isn't it the case that they both kind of put you in mind of this guy?

Update: The super smart guys at FiveThirtyEight ask: is the Lib Dem surge real? Their answer is a definite maybe.

Today's Mitzvah

Coming out of the bookstore a while ago, I found myself caught in an unseasonably aggressive and chilly rain. I was wearing a not-very-waterproof jacket with no hood, but no matter; I actually rather like the rain.

A couple of hundred steps toward my destination, by the time I reached the main walkway, my hair (I do need a haircut) was dripping water down into my glasses. At about this point, I encountered a youngish Asian woman under an umbrella, coming the other way.

She paused, scowled ; cocked the umbrella to one side and asked:

You want me to walk you?

Translation: she was offering to turn around and shepherd me back to dry land. I said no thank you but I must add: today's mitzvah.

Afterthought: Or maybe the point was just that I was looking really old. The other day at the tire store, some beefy guy in his 40s addressed me as "young man." Not a mitzvah at all.

Iceland's Calamitous Childhood

John flags us to a Wall Street Journal pierce on all the ways the Iceland volcano saga* could get even worse:
The worse case scenario, which is unlikely, involves this eruption triggering another, larger eruption. There are 35 active volcanoes in Iceland, and one eruption has been known to set off another. The worse case happened in 1783, with an eruption lasting eight months. That eruption killed off much of the livestock and agriculture in Iceland, which in turn caused the death of about 25% of the island's population.

The eruption also eventually killed tens of thousands of people on the Continent. Benjamin Franklin was in Paris at the time and was one of the first to connect the rapid change in local weather that collapsed European agriculture with a volcanic explosion. 1783 became known as the horrible "year without summer." Europe plunged into a period of poverty that lasted for years. Some historians believe that this may have contributed to the French Revolution of 1789.

Eeuw. But come to think of it, is my memory right that Iceland is a society that was nurtured on misfortune? Here's the ultimate calamitologist, Jared Diamond:
An example of a society that suffered from disastrous consequences of reasoning by false analogy was the society of Norwegian Vikings who immigrated to Iceland beginning in the year AD 871. Their familiar homeland of Norway has heavy clay soils ground up by glaciers. Those soils are sufficiently heavy that, if the vegetation covering them is cut down, they are too heavy to be blown away. Unfortunately for the Viking colonists of Iceland, Icelandic soils are as light as talcum powder. They arose not through glacial grinding, but through winds carrying light ashes blown out in volcanic eruptions. The Vikings cleared the forests over those soils in order to create pasture for their animals. Unfortunately, the ash that was light enough for the wind to blow in was light enough for the wind to blow out again when the covering vegetation had been removed. Within a few generations of the Vikings' arriving in Iceland, half of Iceland's top soil had eroded into the ocean.
I guess it is too much to say "they then waited 900 years until the coming of international banking, and another collapse." At least in the interim they had dried fish. And there's this.
===
*Saga? Iceland? Get it? Oh I am so clever I make myself sick.

Monday, April 19, 2010

Nation's Most Comfortable Airport?

I travel a fair amount but not really that widely so I may not have enough of a data base, but let me ask, is it not true that the nation's most comfortable airport is in Portland, Oregon?

Consider: spacious, well-appointed central arrival hall, with a decent but not overwhelming range of shops including one of the better airport bookstores (not as good as San Francisco, though). Good highway directions and rental car dropoff almost at the gate. Oh, and seamless connection to public transport. All this and free Wifi.

Okay, I can see my list of fancy features is not all that long, and the real reason why Portland is so comfortable may lie in a more sinister observation: it's overbuilt. Or at least, at the moment it isn't nearly as overstretched and overcrowded as, say Kennedy (yuk!) or O'Hare (eech!) or Hartsfield (urgh!). I guess if you can actually move around in the place without risk of stroke or heart attack, there is a space analyst somewhere telling you that you've wasted a lot of money.

Candy Mint or a Breath Mint Redux

Here's another piece on a favorite puzzle of mine: is Social Security a "tax" (in the sense of wealth distiribution) or just a (compulsory) savings program? Veghte throws at least one issue on the table that seems to me almost lost in a discussion like this: Social Security as insurance. Odd that you can lose sight of a simple point like this, but consider the straightforward case: Elmer contributes $100,000 to Social Security. He retires at 65 and dies at 66, having collected just one payment. Does this mean that the government stole Elmer's money? Not necessarily at all. Suppose he Elmer had taken $100,000 of "his own money" and bought an annuity to provide $20,000 a year for life. The seller is, of course, making a bet on Elmer's prospective date of death. Elmer might get lucky and live for 20 years, costing the insurance company good and plenty. Or he might (as in this example) die after jut a single payment. The insurance company gets to keep the other $80,000 of course--that's the kind of money it needs to pay all the people who live "too long." But I don't think we'd think of that as piracy/confiscation or any other of the snarl words we like to tag onto social security.

I should think the insurance angle is even clearer in the case of disability payments. Nobody really wants to draw on them at all. But we're more or less settled on the principle that we need to put away something against the contingency.

See also: It's a Candy Mint! It's a Breath Mint!

UC Admissons: Isn't That Special?

I see that on "all but three" UC campuses the mean GPA for next year's entering class is above 4.0. Is this not a remarkable result in a school whose public primary and secondary schools are regularly described as functioning 'way below par? I can offer several possible explanations:
  • We take in a lot of out-of-state students.
  • It's a two-peak distribution; a small but intense core of high achievers and a great unwashed mass of slackers.
  • High school grades are a joke.
Re: the third point, I recall my friend Eliot telling me some years ago that the way to get an A at Palookaville high was to demand it.

Was it Good for You Too?

Promiscuous women cause earthquakes
Link.

Fabulous Fab

I don't suppose it is too much of a stretch to infer that the reason that the SEC started its Goldman-hunt with the Abacus case is that it gave them an excuse to include what must be the mother of all dumb emails:
"More and more leverage in the system, the whole building is about to collapse anytime now...only potential survivor, the fabulous Fab[rice Tourre]...standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all the implications of these monstruosities!!!"
For his inadvertent success at viral marketing, Fab certainly stands as the Susan Boyle of high finance. But I suspect that the more fitting analog would be his namesake, Fabrice de Dongo, wide-eyed and clueless, the anti-hero of Stendahl's last novel The Charterhouse of Parma--the one who lived through the Battle of Waterloo and didn't even know he was there. As the bewitching Gina tells him:

'[V]ous avez trop de feu pour les âmes prosaïque.'

Go get 'em, Fab, no prosaic soul for you.

Sunday, April 18, 2010

John Podhoretz Delivers a Well-Deserved Reality Check
And DG Myers Cheers Him On

link.

Martin Wolf Finds that the Fruit
Does Not Fall Far From the Tree

Martin Wolf appraises his father and finds that they are more alike than he had known:
When I grew up it never occurred to me that I, too, would become a journalist, as he had done. I thought I would be a professional economist. When I did become a journalist, by accident, at the age of 41, I thought my work would be very far removed from his. I now understand that this has not been so.

As a journalist, documentary director and playwright, my father sought to bear witness to what he saw and thought for the people of his time. He did so throughout his long working life, as the exhibition and the wonderful book about his life that accompanies it make clear. So now do I. As time has passed, the connection between us has become not more distant, but closer.

This is the climax of a centenary tribute to his (late) father by the Financial Times' chief economics correspondent (link). Touching in itself, but one does wish he had gone further to connect the dots. Does he perhaps associate himself with the judgment that

Unlike many intellectuals of his generation, [my father] never had the slightest respect for socialist utopianism, because its roots lie, he realised, not in how human beings are, but in how intellectuals want them to be. He admired writers who expressed human truths deeply – Shakespeare, above all. He despised those he considered mere stylists.

When he aired his views, he started from his intuitions about human beings. But he did not end there. He would work meticulously through to his conclusion. His aim was to create an unanswerable case – unanswerable not only because of its content but also because of the force with which it was presented.

If Short-selling is Outlawed...

From the smart and clear-sighted Simon Johnson at Baseline Scenario:
Here’s the legal theory to keep in mind. Mr. Paulson only stood to gain on a massive scale (or at all) if the securities in question were mispriced, i.e., because their true nature (that they had been picked by Mr. Paulson) was not disclosed. In other words, the Paulson transactions at this stage of the game only made sense if they involved fraud (emphasis added).
If Simon means "some lawyer will argue this but I ain't buyin'," then okay. But if Simon buys it (and I am pretty sure that he does), then it is flat wrong. It is not true that the deals "only made sense if they involved fraud." They made sense if they involved fraud or if they involved a gargantuan self-delusion from which the Goldman execs (and the buyers) refused to recover.

There is, of course, a deep-seated core tension here--the ethics of entering into a transaction in which I know the other side is misled. If I buy a gewgaw from the guy at the street market knowing that it is a diamond, and knowing that the seller thinks it is just a rock, then maybe I ought to return it. Maybe, but maybe not. And as a forum for exploring these moral ambiguities, I hardly think Paulson's Wall Street is the right place to start.

I don't want to go overboard here. Simon says Paulson needs a good lawyer and no quarrel there. And it seems clear that the SEC has set about the task of mining the paper trail (in search of missives like this). But it's worth keeping in mind: short selling is not villainy. It is often the only island of sanity in a sea of mania.

Saturday, April 17, 2010

Guðmundur Meets the Volcano:
God is Ticked Off About...

Are there other contenders? I should have thought "sovereign debt" was reason enough, although S/he is a little slow in getting around to it. Or maybe just "Rush Limbaugh."

Enough Rope

Okay, so we're in the hardware store and Dave is buying rope.

I, with characteristic idle fatuity: Give a man enough rope and he will hang himself.

Dave, with razor-sharp logic: Well, I'd better be careful not to buy enough.

Abacus Doesn't Add Up

I'll endorse the conventional wisdom that Goldman Sachs' Abacus deal does not pass the smell test, but it is a bit more tricky to isolate just why not. Back in the winter when the New York Times breathlessly disclosed that Goldman was selling long positions in stuff it was also shorting, the response was something on the order of a collective yawn. Hey, Goldman is a department store; is it a scandal that they sell both dum-dums and bulletproof vests?

The story comes back to life now, of course, mainly in the baggage of an SEC civil fraud complaint. The substantive wrinkle is supposed to be not just that Goldman was workng both ends of the deal, but that the securities in Goldman CDOs were being chosen by the short of shorts, John Paulson, so as to assure that the CDOs would fail. It's a touch, although in fairness to the Times, the original December story did say

One focus of the inquiry is whether the firms creating the securities purposely helped to select especially risky mortgage-linked assets that would be most likely to crater, setting their clients up to lose billions of dollars if the housing market imploded.

It doesn't name Paulson, but ioot looks to me like the main point was on the table way back when. Still, I can think of three questions that seem to me to invite more thought.

One, exactly what can we say about the buyers who went long the CDOs? Or more precisely, what if Goldman had said: "we think this stuff is all rock solid and gold plated; of course there are other guys who are betting against them--and we are making money on some of their deals--but that's just business; we still like what we see". Wouldn't Goldman have covered itself if its pitch went something like that? Or to turn the point around, should Goldman have warned people who were buying short positions that other people were going long?

Two, just exactly who was covering the shorts--I gather, by writing default swaps--? Is this just one of those bad breaks you get in the insurance business or isn't it (rather more likely) a colossal failure of risk management, a grotesque underpricing?

The final question is--even assuming everybody gets to walk away from sovereign sanction here, is there anything--Anything? Anything?--about this long-short stuff that does anybody any good? Except, of course, the traders who pocketed the commissions? So we're back again to a too-familiar mantra: grant that the world needs a functioning finance system, haven't we lost all touch with function here, in favor of letting the casino gamble with the unwitting house's money?

Update: Much more exhaustive lists of questions here and here.

Copyright Cheesiness

Here's a bit of copyright cheesiness which is probably not illegal (what kind of copyright overreach is illegal these days?) but represents, at least, a want of gentlemanly courtesy on the part of a publisher.

Anyway, I'm lookin' at a copy of SuperReview: Greek, billed as "All You Need to Know!" from somebody called "The Research & Education Association," with a copyright date of 2001. What caught my eye was that it's not modern Greek; the cover specifies "Classical/Ancient." No kidding? A modern mass market publisher turning out a study guide on so esoteric a topic?

Well, no. If you know any Greek at all, a five-second flip through the pages will confirm that there is (virtually) nothing new about this book at all. The style, presentation, even (perhaps especially) the type face are a dead giveaway that it goes back to another century, perhaps more.

Twenty seconds on Google Books is enough to confirm the suspicion: in fact, what we have here is The First Year of Greek, assembled by James Turney Allen, Ph.D. Associate Professor of Greek at Berkeley. The title page says it was published by The Macmillan Company with a copyright date of 1917.

I suppose, then, you could say it's fair game, out of copyright. And really, now, is this anything worse than what Dover does when it reprints oldies and sells them cheap (Powell Portland was selling the SuperRerview Greek for as comparatively modest $8.95).

Well, yes it is different. For the fact is, granting all the subtle cues, still there was not a murmur of a trace of a whisper of a hint that this was an old text repackaged. We do have a copyright notice; it says "Copyright 2001 by Research & Education Association." No mention of the original Macmillan copyright. The book does list Allen's name in the author position on the title page,but it adds "...and the Staff of Research & Education, Carl Fuchs, Language Program Director." If this is the way these guys do business, I'd say ol' Carl has a pretty easy gig.

Other than that, zip. Well, there is a scattering of pictures, at least one of which shows tourists in shorts and tee-shirts, but that does more to enhance than correct any possible deception.

The text, by the way--in terms of content, it's pretty respectable, intelligently selected to make its point. But the support stuff--review questions and suchlike--is primitive compared to what we would expect today. If you really want top refresh your Greek, I think you want the admirable offerings from the Joint Association of Classical Teachers, available via Cambridge University Press. Of course, you might be dishonoring the memory of James Turney Allen, but that has already been done.

Afterthought: Or maybe it's not fair game. I learn here that a second edition was published in 1931. Apparently Allen himself died in 1948. Could it be that some kind of copyright claim continues via this 1931 text?

Friday, April 16, 2010

Montessori

I won't burden you with details but I've spent time off and on over the last 45 years around people who teach or learn in Montessori schools. Still, never before until today did I actually sit silent and watch what goes on in a Montessori classroom, or, as they call it in the biz, "observing."

I'm gratified to say that on this fragmentary piece of evidence, most of my stereotypes have been confirmed. I'm lookin' at, I think 20 little fireplugs and two adults. The kids are noodling around in what looks like order but, as the as the enthusiasts are at pains to tell you, is nothing of the sort. The point is that all the half-pints appear to be managing their own lives in the sense of finding something to do and doing it. A couple of boys were assembling a map-puzzle (todays teaching moment: Idaho doesn't fit upside down). Another was writing something. Two others with some delicacy carried a puzzle board through the room. Another was folding table cloths. Another was gravely consuming a snack. One girl spent the entire duration of my visit grooming herself, Marie-Antoinette style, before a mirror. And so forth. There was at least one detail that nobody had shared with me before: the particular kind of noise in the room. No, it wasn't a riot. But it wasn't silence either. What you got was sort of a low murmurous hum, of working kids muttering to themselves--and some literally humming--all together into a kind of unobtrusive white noise.

I won't say my presence went entirely unnoticed. A little girl sidled up to my chair and after sizing me up on a friend-or-foe scale, declared "I can whistle"--followed by a demonstration. And then:
--I have a grandmother who hasn't died yet.

--Ah.

--Guess what, I had three play dates in a row.
I said "Ah" again; she gravely nodded a farewell and turned to another task. But take it from me, Overheard in New York has nothing on this crowd.

I suspect the Montessorians are right when they say (as they often do) that they are misunderstood. People think of this as some kind of free school. But Montessori appears to me to be, by contrast, intensely ordered. The point, if it works at all, is to present some fiendishly crafted exercises decide to induce the kid into doing a particular thing, and then to make him think it was his own idea. I really haven't a clue whether they grow up to earn more PhDs or command more Armies than other people. I wouldn't be surprised if they have a comparative advantage at taking initiative and just doing stuff.

Montessorians are all aflutter these days at the news that Larry and Sergey at Google ar confessed Montessorians. No surprise, then that you begin to hear mutterings from the trenches that the Google zillionaires ought to fork over some pocket change. So far no sign of it, and I'm not at all persuaded it would be a good idea. This is a niche enterprise and a niche market in a niche culture, peopled conspicuously by true believers who join fort potluck suppers and drive rusted-out Toyotas. Money would only confuse 'em. And meanwhile, they are free to churn out videos like this.

Social Security: It's a Candy Mint! It's a Breath Mint!

Bruce Bartlett complains that most Americans overestimate how much they pay in Federal income tax. His commentators are giving him a hard time for not considering Social Security taxes; when you include them, it is said, most people's estimates are pretty accurate.

I think part of the confusion here is the ambivalent nature of the Federal income tax. It's an issue on which both liberals and conservatives like to have it both ways. Liberals like to call it a tax when they talk about regressivity, but they know they have to down-pedal the fact that it redistributes income. Conservatives like to hoist liberals on their own petard. Conservatives don't like it as welfare but they get more mileage pretending it is just an investment pool. It's a floor wax and a dessert topping, as candy mint and a breath mint!

Like Shouting :"Bank Failure" in a Crowded Theatre

Paul Krugman mocks Mitch McConnell for wanting to abolish municipal fire departments.

Okay he kids, he kids. But six to five, before noon today, some social philosopher will pop on Fox to argue that we should abolish municipal fire departments; that volunteers do the job just as well, and withoutnthe crime of a public pension.

Or perhaps they will tell us about Crassus, the fabulously rich triumvir in the late Roman Republic, who owned his own fire department. If your house caught fire, Crassus would bring the fire laddies. Then he'd buy up the house next door--at an attractive discount, we surmise. And then he'd put out the fire. Now that's the private sector at work.

Thursday, April 15, 2010

More Pension Underfunding: The Wrong Message?

Here's yet one more study on pension underfunding, this one from The Manhattan Institute, no friend of public pensions anywhere. The subject for the moment is pensions public education but the data is remarkably similar to the AEI study that I linked the other day on public employees in general (and also to the Stanford study, discussed in the same link).

I don't doubt the general drift of the data, and do I detect a note of exultant schadenfreude here? Pensions so small we can drown them in a bathtub! Oooh, look at those rapacious schoolteachers squirm! Well enough, but I wonder if outfits like Manhattan have thought through their strategy. Seems to me that sooner or later the victims recipients of all these absurdly fanciful pension "commitments" might finally get off their collective backsides and start some pushback, start demanding a bit of substance with all the hot air.

Meantime, it seems to me that data like this goes a long way to discredit the general proposition that public employees are overpaid. They are often paid well, but if they are being paid in empty promises, then maybe it is time to face reality and mark to market.

Wednesday, April 14, 2010

Nerd Barbie

I suppose you have already seen the story about how Mattel will produce a Nerd Barbie, although I'm not sure the proponents have thought through the full implications. Specifically, if Barbie trots off to study in one of the few remaining male-dominated departments in the university, will she be there to break a lance for equality or just because she'll have good odds for finding a husband?

Is That a Briefcase Under Your Arm,
Or Are You Just Happy to See Me?

I follow the Supreme Court appointment sweepstakes with interest, although I have to admit I don't have a highly developed view on who should be the appointee. I think he/she had better be smart, or Alioto/Roberts will eat them for lunch. I suppose the appointee will have to have a taste for combat, and a willingness to lose a lot of battles. And I suppose that any President who takes the long view in this context will go for young.

That's about it for me, but lately I've had some occasion to listen to some bad-mouthing of Elena Kagan, the solicitor general and former Harvard Law dean who just might be the front-runner. She's a mediocrity, I'm told, she's a paper pusher, just look what she did for the Harvard faculty (implied rhetorical answer: nothing).

I'm not ready to sign on to all of that, but it has crossed my mind: could it be that she is Tim Geithner, the compleat bureaucrat, the one with the brief case permanently attached to her arm? Would I be correct to infer that "she's Tim Geithner" is not necessarily what you would want these days as a recommendation for a top job either?

BTW, nobody asked me but I'd have to say something similar about the vaunted Harvard Law faculty--to me they are mostly a bunch of faceless technocrats. Oh, sure, faceless technocrats with dynamite resumes, but how many of those guys have you ever heard of? Maybe part of the problem is just that Harvard is so big. Still, I can remember the names of a lot more people at Georgetown (also big)--saying nothing of Yale, Chicago, Columbia, NYU.

Well, okay, not all faceless technocrats.

Meta fn.: No, I have no idea what the headline means. It's just a guy thing.

Palin on Bendable Straws

It has become trope in noising around inside celebrities' private lives to come up with some innocuous but inglorious private weakness that can make us all chuckle with amused contempt. News Flash: Sarah Palin demands bendable straws.

I won't defend much about Palin but I will defend the bendable straws. Okay, har de har, but two things. One is, they probably have functional utility. She's a speaker, she's on the platform, she needs to keep her gullet smooth. I have no first-hand experience with this kind of life, but for want of a nail a battle was lost and, I suspect, some speeches go sour for lack of a bendable straw.

And two, so what if they are not practical? Who among us does not have a small private passion that does absolutely no harm to anybody, but would look somehow silly on the big screen. Isn't that what the right to privacy is supposed to be about--to let us preserve those secrets, harmless and not even shameful in themselves, about which we just don't want to tell anybody.

I do join up, though, with those who say she'll never get elected to public office--probably not even be a candidate--again. As they say, she's making too much money and having too much fun. And divas do not do well on the campaign trail. Yes, I'm looking at you, Elizabeth.

Hoisted from Another Guy's Comments

If there is anything we have learned from Obama it is that
  • HE is unwilling to do much to push Congress in particular directions (no LBJ or even GWB);
  • Congress is pretty determined to maintain the plutocracy’s grip on power;
  • Precious little of importance happens without Congress (since Obama seems unwilling to do much to veer from GWB’s line in those areas where he has control).
Link. Light editing for form.

Hey, Worked for Odysseus

And cf.link.

Tuesday, April 13, 2010

Priestly Sex Abuse and the Concept of Innocence

I haven't weighed in on the matter of sex abuse in the Catholic Church because it seemed I'd wind up with a lot of pointless me-tooism (just for the record, this forum opposes priestly pederasty). I do have a tentative thought now, though--tentative in the respect that it's not yet fully formedt, and also in the sense that I wouldn't be surprised has already done it better, and I've just missed it.

That is: can it be that one source of the priestly fascination with children is the Church's own (to me, very odd) obsession with innocence, and in particular, the innocent babe?

I don't know of any other society or culture that so prizes the virtue of creatures who are, when you get right down to it, too young to embody either virtue or vice. Aristotle would have explained that virtue is an achievement; it needs to be cultivated and it doesn't come easy. In the Aristotelian vein, I've never understood how "being too young to be bad" translates into "being good."

Of course countless Madonna-and-childs(many quite breathtaking) plus a whole library of exegesis tells me that I'm wrong. So be it; but the suggestion here is that maybe in a culture that so prizes the innocence of youth, the sexual attractiveness of the child is a plausible (if not a necessary) next step--?


Fn., out of the great welter of commentary on this topic, let me showcase two. One, Andrew Sullivan explaining why the problem is emphatically not one of "homosexuals in the clergy" (shorter Andrew: one, this is not about sex, it's about abuse of power; and two, the Church is structured in such a way as to attract the most unsuitable gays). And two, E. D. Kahn, (channeling Brendan O'Neill) on "the cult of the victim." An unsympathetic reader will infer that Kahn (and O'Neill) are saying they like the "old athiests" better than they new because they were more tolerant of predation. They aren't saying that although I do think they are adverting indirectly to one unspeakable implicit point: the fact is, some among those who are predated upon are simply not all that damaged by the experience: they shrug it off and get on with their lives.

Monday, April 12, 2010

Oh, That Explains It...

In the Wall Street Journal, Tom Goldstein explains the White House strategy as it pushes its Supreme Court shortlist:
"The process itself is a signal about the things that they value," he said. "There are three or four very serious people and other dark-horse candidates who are being discussed in part because they have a constituency."

Mr. Goldstein added that the White House was also sending a signal by not floating the names of any of the most liberal potential candidates. "They don't want to give red meat to the other side," he said.
But it may still seem hard to understand the presence of Sidney Thomas from Billings, Montana. Happily, the Journal explains:
[A friend] said the judge was a fund-raiser for a local public-radio station before his appointment to the court and that on occasion he went on the air with other local attorneys to drum up support.

Why Didn't We See This Last Year?

Steve Benen offers a bunch of new in-your-face TV ads on health care (link). Conscientious practitioners of old-fashioned citizenship will find them cringeworthy--too personalized, too confrontational, too simplistic. A more detached observer might respond: why didn't we see these last year?

That is: one reason Obama is in such deep tapioca on an issue where he ought to rule is that he let the bad guys get control of the narrative--rather, not just Obama, but the whole Democratic apparatus. We say that Obama is too much of a gent but the fact is there is a whole swath of Democrats who really don't want to win that bad if they have to dust it up.

As an inborn coward with aspirations to gentility, I feel for them. But the fact is, it doesn't work that way. Let the other side tell the story and they tell their story. Moreover--worse--there's a fair-sized segment of the voting public that, if you don't fight back, will regard you with contempt for the mere fact that you didn't fight back.

I don't know if Democrats are in a mood to fight back now; I doubt it. The MoveOn adds are an attempt, but I bet they'll wind up in context looking half hearted and perfunctory. As Shakespeare said, Much Ado About Nothing:

DOGBERRY
This is your charge: you shall comprehend all vagrom men; you are

to bid any man stand, in the prince's name. 25
Second Watchman How if a' will not stand?
DOGBERRY Why, then, take no note of him, but let him go; and

presently call the rest of the watch together and

thank God you are rid of a knave.

Scary Pension Stuff

Great summary of scary public pension data here, with particular attention to the new American Enterprise Institute survey showing a $3 trillion shortfall; also a Stanford study that takes the official numbers and undertakes to adjust for risk. Shorter AEI: be glad if you are not in Illinois, Indiana, Connecticut (no kidding?), Oklahoma. Grand total overall funding ratio: 43 percent. Best: Washington state and (again, no kidding?) District of Columbia teachers. California public employees appear to have the biggest gross-number shortfall, but in ratio terms, they are actually a bit above the median (at 48 percent). I can't find in AEI: University of California, which claims to be pretty near fully funded, although the risk-adjusted Stanford study grades them down to 59.3 percent.

Sunday, April 11, 2010

Second Bananas

I remember hearing somewhere about a septic tank cleaner who advertises "we're number one in number two!" I thought of him lately as the Mr. and Mrs. Buce readaloud sodality made its way through Augustus, John Williams' historical novel about the first don't-call-him-Emperor of Rome and, not least, about his faithful sidekick Marcus Vipsanius Agrippa.

Was there ever such another pairing in the leadership of a great polity? Agrippa was a schoolmate of Augustus', and from the very beginning of Augustus' rise, Agrippa served at his side. He continued so to serve until he died at the age of 51 (Augustus outlived him by 26 years). In all Agrippa's 30-odd years of service, there was never so much as a flicker of disloyalty; never for a moment a hint that he thought that he and not Augustus should be the top guy.

And it is certainly not that he lacked grounds for temptation. The record credits Agrippa with the victory in virtually every one of Augustus' military campaigns; Augustus' own military record remains shadowy to the point of evanescence. And Agrippa supervised so much of the construction that allowed Augustus to boast that he found Rome of brick and left it of marble.

How to account for such loyalty? Part of the secret must lie in the enigmatic posture of Augustus himself, surely the oddest of world-historic figures. He created the Roman Empire and ruled it for 41 years (or more, depending on what you count). Yet he ruled almost entirely by indirection, as if always pretending that he was just another well-wisher to the state. Such a tactic only works if activated by an extraordinary gift for manipulating other people: it must be that Augustus knew how to assure Agrippa that he was appreciated--and to make him know tht he would regret it if he stepped out of line.

Was there ever such another? Possibly. We often observe corporate CEOs who go through their careers joined at the tip with another, less visible, figure who seems to do what the CEO himself can't do. Creative types are lucky if they find good managers: Bill Gates found Steve Ballmer. Roosevelt had Harry Hopkins although I guess it isn't quite the same thing. On a more modest level, I remember Kentucky governor A.B. "Happy" Chandler. Chandler was a virtuoso campaigner, but the chores of administration bored him. He did best in office when he had the good sense to let others run the state for him.

But all these examples appear to pale beside the long and seemingly unbroken record of cooperation between Augustus and Agrippa. Augustus owed him a lot, and so did Rome. Sadly, he left another legacy to his city which was not so commodious: he was grandfather to Caligula and great-grandfather to Nero. If Augustus was one of the best of emperors; Agrippa's two progeny surely count as among the worst.

Kyrgyzstan, Past and--

I've never actually set foot in Kyrgyzstan but I have stood on the flatland in Kazakhstan and gazed awestruck up into to the Tian Shan mountains, ready to believe those who say they rival the most beautiful anywhere in the world, and disposed to lament that the Kyrgiz people haven't been able to exhibit the knack for effective collective action so necessary to turn a gaggle of warring tribes into a functioning state.

I suppose you could say there is really no reason to expect Kyrgyzstan to become the Switzerland of Central Asia, but then there is no reason to have expected Switzerland to become the Switzerland of Europe. A successful polity requires, not least, an extraordinary stroke of good luck.

As I follow the news of the current coup (if it is that) in Bishkek, I haven't heard anybody take of the fact that this is actually the second, ahem, disorderly change of government in Kyrgyzstan in recent years. The last guy,Askar Akayev, was thrown out in 2005. The point man in that upheaval was Kurmanbek Bakiyev who was himself sent scampering last week. Bakiyev's lot successfully billed it as "the Tulip Revolution" but there was never anything particularly floral about it, and it seems that Bakiyev was attempting to face down civil unrest almost from the beginning.

Akayev had sought to present himself as a westernizer; analogies to Switzerland were not absent from his rhetoric. But by all accounts, in time he came to settle in as one of those familial autocrats that dominate so much of political life in Central Asia. Per Wiki he is now math professor in Moscow. Maybe Bakiyev should pray for such luck.

Magnetar Again

A few days ago I showcased Yves Smith's admirable account of Magnetar, the ultimate in bet-against-the-box hedge funds. Comes now a much more detailed account here.

Saturday, April 10, 2010

The Non-Ipad

I didn't coordinate on purpose but it happened to be the same day as the Ipad release that I went into Best Buy and asked them to show me the machine with the longest-life battery. They were a bit vague on the concept but after a couple of minutes they took me to a Gateway netbook with, it says here, battery life of eight hours. I said "you talked me into it," and for about $350 I left with my new toy indispensable life extension.

I've used it every day since I bought it. I don't really believe the eight-hour stuff and I haven't really tried to drain it but it does indeed seem to harbor more endurance than any machine I ever owned (it's been on and off all day; at 93%, it promised me 8hrs 10 mins; now at 62 % it offers only 3 hrs 50 mins, but even the lower number is longer than any battery I've ever owned.

I've fitted it with Firefox, Open Office, My Dropbox and Evernote--also a Kindle Reader link. I test drove the reader this morning and I noted a couple of advantages over the real Kindle--one, backlight; and two, easy back-and-forth to links from Kindle to Firefox. My Dropbox synched just fine. Evernote seems a bit cramped, but doable.

The keyboard is more usable than the last netbook I bought last year (an Acer; I fried it on European current). And so far I have used up only about 10 percent of the storage.

Query, why would I want an Ipad?

Just Askin': Supreme Court

Now that the administration has caved to GOP pressure on the nomination of Dawn Johnson to serve as head of the Justice Department's Office of Legal Counsel, wouldn't it be fun if they just turned around and nominated for the Supreme Court?

Afterthought: I suppose somebody serious has already pursued the point, but it occurs to me as I reflect on it that the real reason why Johnson pulled (or was pushed) out of the employment queue is that her views were so out of synch with those of her own President, forget about the GOP.

Update: The far better informed Glenn Greenwald follows a similar line of inquiry.

Jobless Recovery: Just What The Doctor Ordered

The web is alive with stories about the green shoots in the economy and the Dow's momentary vault above 11,000. And, oh yes, the inevitable tsk-tsking about how unemployment remains give or take around 10 percent. But what if the recover is coming about not in spite but because of the 10-percent unemployment rate? What if the result of the late meltdown is precisely to cull the workforce, as you would cull a buffalo herd, getting rid of the weaklings so the rest of the herd can move faster?

Don't misunderstand, I'm not remotely pleased at the thought of such a result. But one way to tart up the bottom line is to cut the wage bill. People have been talking for a couple of years now about how some of those jobs are never coming back. And what if there is simply nothing to take their place?

[On buffalo herds and how beer drinking makes you smarter, go here.]