Simenon on the Lives of the Poor

Most people don't usually read Georges Simenon's "Inspector Maigret" mysteries for pithy one-liners, but I put a tic by this one:

The poor are used not to express their hopelessness, because life, work, and the hourly, daily calls of life lie forever ahead of them.

That's from Maigret and the Hundred Gibbets,(1931; page 27 of the Penguin Paperback). This sounds right to me; if you are truly poor, or catching poverty out of the corner of your eye, you can't indulge the luxury of expressing your hopelessness; you soger on, or you spin free of the flywheel and make a colossal nuisance of yourself.

I tend to think this is a safe generalization, but at least it is a pretty good description of life in Maigret's world: heavily populated with the quietly desperate, too proud to make a nuisance of themselves but finding little solace in anything else.

Footnote: I pulled the Maigret out of the corner of an untended bookshelf when I couldn't sleep. They're the novelistic equivalent of comfort food for me: consoling, familiar, and in their own way, reassuring. Is this perverse, considering the melancholy tone? I think not. Walker Percy says that there may be novels about alienation, but there cannot be an alienated novel: the mere fact of connection is enough to make you whole.

Footnote to footnote: but I have to add that, structurally this seems to be one of the weakest of the Maigrets--a silly plot with more than a few touches of Agatha Christie. From the date I gather it must be one of the first and even if the plot is wrong, the tone is still right. Oddly enough, it receives nothing but five stars from the reviewers at Amazon. I wonder what I am missing?

Cute ...

... and maybe true:

[I]f we concede that traditional economists are historians with a math fetish, then behavioral economists are mathematicians with a psychology fetish.

Link, Kedrosky, who adds: Either way, I don’t feel any more comfortable handing them the keys to the financial kingdom.

This One's For D.G .Myers

D. G. Myers at the estimable Commonplace Blog (definitely worth an eyeball) has been (grumping over?) (marvelling at?) the recalcitrance of a student in his Philip Roth seminar. Myers clearly admires Roth; the student professes that he does not, although it is hard to tell just how he would know because there is little or no evidence that he ever read any. Myers is dismayed. He might take solace from the observation that he is not alone:

A disobedient youth is no longer in fear of his schoolmaster--the relation is rather one of indifference in which schoolmaster and pupil discuss how a good school should be run. To go to school no longer means being in fear of the master, or merely to learn, but rather implies being interested in the problem of education.

So Søren Kierkegaard in The Present Age, which might be the best thing he ever wrote (though I probably haven't read enough to judge). And while I am on a roll:

It is said that two English noblemen were once riding along a road when they met a man whose horse had run away with him and who, being in danger of falling off, shouted for help. One of the Englishmen turned to the other and said, 'a hundred guineas he falls off.' 'Taken,' said the other. With that they spurred their horses to a gallop and hurried on ahead to open the toll-gates and to prevent anything from getting in the way fo the runaway horse. In the same way, though without thaat heroic and millionaire-like spleen, our own reflective and sensible age is like a curious, critical and worldy-wise person who, at the most, has vitality enough to lay a wager.

Source: Harper Torchbook 1962 edition, pp 45 and 78. At 44 he adds: "the whole age becomes a committee."

Bookblog Note

Freddy, formerly at League of Ordinary Gentlemen, has set up shop (again) on his own account at L'Hôte. Pay im a call. You won't be sorry.

And Speaking of Dr. Doom....

Henry Kaufman in the previoius post happily bore the title of "Dr. Doom." But you want real doom: look here.

What's New? Iran Tunnels

The NYT headline says: Iran Shielding its Nuclear Efforts in a Maze of Tunnels (link). Mrs. B asks: and what part of this is actually "news?" We knew they had a nuclear effort. We knew it was underground, hard to hit. Is it the "maze" part--the idea that Chuck Norris might have a tough time taking them out? Or just that President Ahmadinejad looks so goofy in a hard hat?

Fun fact: Wiki offers a link to an Iranian presidential blog, but it doesn't seem to be alive just now.

Something Else I Didn't Know: Plurality

The Salt Lake Tribune keeps a reporter on the polygamy beat. With a blog called The Plural Life.

H/T, John.

Alfa-Betty Olsen Makes a Dog's Breakfast Tasty Meal...

...out of stuff she gets at Ikea (link). The Wichita bureau, with strong midwestern/Scandinavian roots, chimes in:

[For the holidays] we made Swedish meatballs (onion, pork and beef), lefse (bought at the store and like eating a paper napkin with butter), Jell-O (of course - that's salad in Minnesota), Swedish potato sausage (even the Greek won't eat it), Norwegian rice pudding, mashed potatoes made from real live potatoes, and corn. Corn has become a Swedish vegetable. At least in Minnesota. I'm sure my grandparents would have recognized most of those odd combinations of fish and potatoes (I note the absence of lefse - which Sue used to make on occasion when she couldn't find it - the stuff in the store tends to be tough; she has one recipe from an old Lutheran Church that starts with 'peel 100 lbs of potatoes') but the palate got cleaned up by the time that it got to my generation. There is one story about one cousin serving 'sil salad' - basically herring salad - as a main course and most of my mother's generation going on strike.

And as a kid, I endured the annual lutefisk dinner at church - where they served meatballs to the heathen of my generation - but it involved great quantities of drawn butter, lutefisk, meatballs, multiple courses of Jell-O in all colors imaginable (and with all sorts of canned fruit).

Actually, my own mother and I used to make Swedish pork (=bread) sausage together--one of the few things we did with complete amiability. But we drew the line at head cheese.

Appreciation: Kaufmann on the Late Uproar

In The Road to Financial Reform, Henry Kaufman (fka "Dr.Doom") considers the recent meltdown and serves up a heapin' platter o' "I told you so." He surveys a catalog of causes and isn't coy about reminding us he warned us about so much of this long ago. And just in case anybody thinks he is cooking the record, he documents his account with extensive reprinted excerpts from his own old speeches.

It's a bracing read, coming from a guy with such gravitas. He turns 83 this year. His memoir, On Money and Markets (2001) is an absorbing account of his long career on Wall Street, with insightful reflections in the his long career, and laced with more than a bit of baffled admiration at the changes he'd seen. Bracing, although not particularly new or pathbreaking: the market is more complicated than it used to be; there's way too much debt; we need better regulation and it needs to be global. Yes, we knew that, but it is interesting to hear it said by somebody whose memory extends back more or less to the invention of money.

Kaufman does pick up on a few points that don't seem to me to be current in the debate. One: he focuses on the shift in bank lending from fixed to floating rates. Nothing intrinsically awful here, but Kaufman rightly points out that it makes it infinitely harder to discipline bank behaviour by jerking the interest-rate leash. Two: he marvels over the still-new-to-him evolution in the definition of "liquidity." It used to be how much cash you had on hand; these days, it means cash plus borrowing power. Indeed, I think he is correct to argue that the very idea of "cash" has lost its salience in a world where you can buy a cup of coffee on your Visa card.

It's probably no surprise that Kaufman takes a dim view of securitization, although his particular approach is perhaps distinctive. He seems to dislike it partly because it is new, and this is actually a better argument than it might appear at first blush. I take it his point is tht we have been letting a lot ride on a mechanism with which we don't have much experience and which we don't understand very well. I should say that recent events have supported his judgment here.

Example: we've found that in a securitized world, where nobody really "owns the debt," then nobody really "owns the problem"--it becomes much harder to figure out just where and how we structure a workout. This is an issue which, I am happy to say, Underbelly, prompted by questions from Joel, was puzzling over nearly three years ago, although I can't say I gained anything by the experience except a bit of puzzled disease. A corollary point is that a lender who will securitie the debt is just not motivated enough to think about risk. Recall the old line about how the best fertilizer is the farmer's footsteps walking over the land (Lyndon Johnson, perhaps). This truism has gone grossly out of fashion in recent years, but read Kaufman and you will find some good prudential reasons for bringing it back.

Oddly, unless I was doing, Kaufman seems never to mention the one most attrractive feature of securitization: portfolioi diversification. I grant that "Diversifiction" is a mantra that can be misued like any other. I recognize that not even a diversified portfolio can protect you in a panic -- "when all the coefficients go to one," as they say. I emphatically acknowledge that much of what passed for "securitization" lately was the very opposite of diversification--recarving your portfolio into segmented risks. Yet diversification itself is a good idea and a sensible reform platform will make sure to preserve its virtues while getting rid of its problems.

In general, if Kaufman has a dominant theme, it is the idea that "there's too much debt." I can see an important core point here: one of the central facts about banking always and everywhere is that it is a huge mountain of debt resting on a little hillock of equity. Yet Kaufman doesn't seem to distinguish between bank debt and corporate debt. A lot of the debt stuff in the book dates back to the junk-bond LBO frenzy of the 80s and early 90s--the age of Michael Milken. Count me as one who believes that Milkin and his ilk probably did the market and the economy more good than harm. Yes, a lot of deals crashed and burned, but a lot did not, and a lot of people (Ted Turner, Craig McCaw) got access to capital they might never have seen otherwise. Oldtime bankers like Kaufman are extremely unlikely to have seen the virtues of that sort of thing.

I'll agree also that my argument may not be entirely dispositive. It may be, as the new agers like to say, that there's nothiing metaphysically different between debt and equity--just different kinds of contracts. Yet markets do tend to treat them differently. Miss a dividend on your stock and the share price may go into the tank. Miss a coupon and all hell may break loose. There seems to be a discontinuity here, and it may not be rational. Yet as Hegel would not say, even if irrational, it is still real.

Still, there's much to be said for sitting at the feat of the past master--of listening to the guy who has seen it all before (and who, not incidentally, seems still to hold a full bag of marbles). If he wants to indulge in "I told you so," I suspect we have to give him a bye.

Visa: Not Respnsible for Bunions or Flat Feet

I'm with Adam on this one: truly the weirdest ad I've seen since I can't remember when--unless you infer that they are pinpoint-targeted at Capitol Hill staffers (link).

"Own Goal" in the Bond Market

In The Meltdown Years, Wolfgang Munchau says:

There are stories when banks sold default insurance against their own default.

Munchau calls this "a logical absurdity," and he's got that one right. Consider

• For consideration given, we promise to pay you $10 million.

• For an additional $330,000, we promise that if we fail to pay you $10 million, we'll pay you $10 million.

Uh--right. With Munchau, I am sure there are "stories." And it does indeed sound like just exactly the sort of travellers tales that one of our brave venturers would bring home from the banking wars. But is it any more than that? Can anyone identify a confirmed sighting?

You will surmise that I am skeptical. True enough, but I can imagine this: much (most?) credit insurance was written in indexes--e.g., the Itraxx Index, which measures the performance of bonds of companies with good credit ratings. I can imagine that some banks wrote insurance on indexes of which their own bank issues were a part. That's a slightly different matter from what Munchau is proposing, although I grant it is not much less cray.

The Value of a Law Degree

A commentator at Above the Law writes:

I never thought I would see the day where a plumbing degree from Ashworth College (an online institution for the non-erudite) carries more value than a law degree. I recently paid my plumber $425.00 for 45 minutes of his time. Clearly, this handy chap makes more money than most working attorneys in this nation.

Two points: one, he heeds to get out more. The potential top income for a lawyer has been (and remains) quite high, compared to the population as a whole (if not compared to, e.g., investment bankers). But the mean is usually rather lower than the commentator seems to realize. Every year some law grads go off to be parole officers, high school teachers, whatever--some willingly, some because it is the best alternative on the table. And even now as we stand here, some lawyer is "practicing law" in a terry cloth robe at the kitchen table. Again, that may or may not be a bad thing, but it's not the kind of thing that deans and alumni offices like to hype, especially not when they are trying to reel 'em in for $40,000-a-year tuition.

Two, he needs to take the long view. The blip in time during which a law degree was a road to riches--that blip is about the same length as the blip during which a guy like Homer Simpson could support a wife and 2.3 kids in a nice home in the suburbs on a factory wage.

I think the inflection point was the moment I started law school--fall of 1963--when the dean who welcomed us offered congratulations because we were moving into (as he said) an underpeopled profession. He was right: law hitherto had just not been that dazzling a choice. You really had to want to be there.

Sepecificaly: lawywers often had to scrounge for work in the Depression. There was more work after World War II but also more lawyers. In the 60s, wo things changed all that. One, biglaw jacked up its compensation schedules for beginning associates, enriching the associates themseves and setting off a ripple that rolled through the market as a whole. Two, the Federal government started to fund legsl services for the poor.

[A third factor that drew a new wave of applicants to the law schools was the civil rights revolution in the South, which added an aura of prestige and respectability to law which it had perhaps never enjoyed before. This surely increased demand for places in law school, although it didn't affect compensation directly.]

One unhappy consequence was that for a generation now, we've had a lot of kids in law school with no special vocation to be there, but who were looking for the big bucks. Surely that motivation is gone, or at least severely constrained. The Pope has been neard to say tht he wouldn't mind a smaller and stronger church. Who knows, the current uproar may induce just such a revision in the practice of law.

For a much more fully informed discussion, go here.

Three things changed

British Tories Take a Dive for Brain-dead Populism

Given that they are almost certain to win the next election anyway, you'd think the British Tory party might at least flirt with a bit of decent public policy. But now: given they chance to do something right, they've opted instead to throw their hand in with the most mindless kind of economic populism. The culprit is (drum roll) the big grocery stores, who, blast them, insist on trying to lower prices.

It was from, ironically enough, John Kenneth Galbraith that I first learned what every good economist knows: that a big retailer is essentially a buying club with the clout to extract savings from suppliers which, in a competitive market, they can then pass on to customers. That's how Wal-Mart does it, and so, apparently, the big four British grocers (one owned by Wal-mart). The Tories have now promosed to put the squeeze on the biggies to prevent them from squeezing their suppliers.

And it appears they intend to go aobut it in the worst possible way. They'll take the big grocers to create a new regulatory framework (actually, this part is okay). But then they apparently intend to create (wait for it) an "ombudsman" to police supposed negotiating abuse.

Right, just what Britain needs: one more publicity-grabbing political hack ready to grab (state subsidied) television time to whine about the evils of grocer power. Although I have to admit--the "ombudsman" part is perhaps the tipoff that the Tories don't really mean it after all: what they seem to be designing is a system which will transfer a bit of wealth from the grocers to the political apparatus, but without the intention of ever actually doing much of anything except posturing before the camera.

Afterthought: Yes, I know--if you are a little supplier, you know it hurts like hell to be bullied. IHey, I've seen these guys down round the bankruptcy court. If you sleep under the umbrella of a gorilla, and the gorilla rolls over, you are going to get crushed. Back in the early 80s, when interest rates went through the roof, Sears called all its suppliers and said guess what: we're not going to pay in 30 days any more; expect more like 45. I saw first-hand the travail of a little furniture maker. In some ways, he was the model of enterprise: a first-class product, and a pretty good employer. But he just couldn't hack it on the new terms. And the sad truth is that's one thing our system does (or has done) pretty well: wash out marginal producers for the greater good of the public weal.

The only way I know to avoid that is to embrace some kind of state syndicalism. And I don't want to be excessively ideological here: it may be that some sort of syndicalist model can be msde to work. But it's certainly not what the Tories claim to embrace. If they want to go to the voters on a syndicalist platform, God bless them. But as long as they claim to be the party of free markets, they should take this nonsense and stuff it in their hat.

H/T for the pointer: the Kansas bureau. Thanks, John.

Christmas Gift: Glorious Morning

One of the grandkids presented me with a remarkable belated Christmas gift this weekend--a recitation from memory of Shakespeare's Sonnet 33, the one that begins "Full many a glorious morning...." (reprinted below). I assume it was done with a fair amount of maternal bullying, but he does have the gift of a pretty good memory so it can't have been an intolerable burden, and anyway, he has generally a good nature. Whatever: I couldn't have been more pleased. I've reached the age where I certainly don't need more stuff and I am delighted to be an occasion for the transmission of the culture. Besides, it is an old family tradition: I used to bully his mother into memorizing poems as gifts for my mother (who herself had a pretty good memory for verse). And so the past extends into the future.

I have to admit this is a sonnet with which I am not well acquainted: I guess I mentioned before that, though a big Shakespeare fan I am somewhat weak on the sonnets. On inspection, I see that it is actually rather tricky. That first line (see infra)--is it an adverb, as in "often?" No, on close scrutiny it turns out to be the direct object of "seen," as in "I have seen a morning." There are a couple of bracing disyllables: Full man /ya/ glor /yus/, etc. You get some touching echoes from elsewhere in Shakespeare. There's "rack," as in Prospero's "leave not rack behind"--turns out to mean (per Stephen Booth) "mass of scraggly, smoke-like, wind-driven clouds." Or "region cloud:" per Booth, "the clouds of that part of the sky where he is now"--recall Hamlet, "I should have fatted all the region kites/
With this slave's offal." And the couplet offers a matched set of feminine endings.

I'm also impressed with the insight that Shakespeare seems to have liked the dawn. Here is Horatio:

But, look, the morn, in russet mantle clad,
Walks o'er the dew of yon high eastward hill:
Break we our watch up.

And the great over-the-top exuberance of Romeo:

But, soft! What light through yonder window breaks?
It is the east, and Juliet is the sun!

With both, contrast the blunt simplicity of Duke Vincentio in Measure for Measure: "Come away; it is almost clear dawn." For my taste, though, none can match the shock value of a piece of unexpected poetry from an unexpected source: Don Pedro in Much Ado About Nothing:

Good morrow, masters: put your torches out.
The wolves have prey'd; and look, the gentle day,
Before the wheels of Phoebus, round about
Dapples the drowsy east with spots of grey.
Thanks to you all, and leave us: fare you well.

Anyway (with due appreciation to the recititator) here's the sonnet:

Full many a glorious morning have I seen
Flatter the mountain-tops with sovereign eye,
Kissing with golden face the meadows green,
Gilding pale streams with heavenly alchemy;
Anon permit the basest clouds to ride
With ugly rack on his celestial face,
And from the forlorn world his visage hide,
Stealing unseen to west with this disgrace:
Even so my sun one early morn did shine
With all triumphant splendor on my brow;
But out, alack! he was but one hour mine;
The region cloud hath mask'd him from me now.
Yet him for this my love no whit disdaineth;
Suns of the world may stain when heaven's sun staineth.

Source: "Booth" is Shakespeare's Sonnets, edited with analytical commentary by Stephen Booth (1977).

Does This Mean that Larry Summers Gets to be President of Harvard Again?

Link.

A-one and a-two etc.

Taxmom favors me with the loan of her valued Christmas gift: a copy of Bruce Marshall's The Accounting (1958), hitherto unknown to me, and surely one of the few "accounting" novels ever written. Perhaps the only real competitor is Accounting for Murder, by the inimitable Emma Lathen, of whom I have written before, although the Lathen novel (and its kin) take a somewhat broader-brush view of the business world and its attendant evils.

There are, I guess, a few successful business novels although I'm having trouble thinking of examples that I would really want to read again: people always mention The Man in the Grey Flannel Suit, which I have always studiously evaded. The late Arthur Hailey wrote a string of you-are-there novels about "the real world," as it is sometimes known. I read Wheels, about the auto industry and liked it well enough that I once assigned it to my commercial law students (they didn't see the point)--there are others, and I can't recall whether I ever read them or not. He also throws in the Godfather novels, greased with a happy face :-), but I'm not sure it is a joke. And speaking of the mob, if one were doing movies, I would surely put Casino near the head of the list.

There are, of course, a few reasonably successful novels about financial chicanery. The best that I know of is Christina Stead's House of All Nations (Amazon has a paperback on offer at $560.28) or perhaps Theodore Dreiser's Trilogy of Desire about the career of Charles Yerkes the mass transit guy. Or Trollope's The Way We Live Now--more keep coming to mind.

[My faithful readers, or reader, are/is saying--but aren't you forgetting Dickens? No, I am not forgetting Dickens; I am ignoring him. For all his maundering, Dickens seems to me to know next to nothing about the world of affairs, and to care even less.]

I suspect that I may be talking about nothing more than a special case of the more general rule that there aren't many good novels about work in any form--was it E. M. Forster who said that people in novels make love a lot more than people in real life, and work a lot less? People in discussions of this sort usually cite Life on the Mississipi, which is wonderful in its way, but not even a novel, and after that, where do you go next?

I've read a few of what to be "economics" novels that strike me as just dreadful (but cf. link). Taxmom and I would agree that accounting has its moments of excitement, although I admit it may be a challenge to get it down on the printed page. Still, there is promise in a beginning like this:

In 1933 the thirty-first of December fell on a Sunday, and so the cash count at theBank had to be done on the Saturday.

At half past nine that morning the auditors' senior London partner, Sir Eric Stugby-Wharton, F.C.A., walked into the offices of their Paris branch.

The only local partner at his desk was Morven, and his rough Scots voice could be heard bawling behind the closed door of his room "As usual, it's a pig's breakfast, Mr. Urquhart.

Sir Eric grinned with approval. The best way to train audit clerks was to shout at them. ...

Sir Eric Stugby-Wharton, you gotta love it...

Update: Joel is all over this one. He suggests Rise of Silas Lapham, about the Vermont merchant who discovers a paint mine. Good point. Also Moby Dick--but is this "business?" Or "work," a la Life on the Mississippi? Also Sinclair Lewis, but on this issue I'd put Babbitt and Main Street in a class with Dickens: I don't think Lewis knew much about business or business people except that he didn't like 'em. Joel also gives us a Google search with 28,700,000 hits, so I guess there is room for more research.

Update II Ignota says Balzac. Oh, dear me, yes, Balzac. They certainly are about scheming, hustling, positioning, etc. Oddly enough, I've probably read more novels by Bazlac than by any other author--testimony not so much of the degree in which I enjoy him as of the number he wrote. Of my exposure, I guess the one that comes closest to being a business novel per se is Histoire de la grandeur et de la décadence de César Birotteau--about the parfumier hornswoggled and bankrupted by an underling (and his own guileless incompetence).

Palindrome

today: 01/02/2010, as I am reminded by Sally whose birthday is today.

Update: I get my palindrome birthday European-style on 18/02/2081, and I certainly hope I am not around to enjoy it.

Off Again

To hang out with some grandkids. Back Sunday

Free Kindle OK!

Some people are all in a twist over the news that most of Kindle's top "sellers" are actually free--nine of the top 10, 64 of the top 100. But is this surprising? Seems to me it is just what you would expect. If a clerk leaves a bowl of free candy next to the check-out counter, it will be free before the clerk goes on her next break. The only difference with the Kindle is that the candy is probably more expensive--recall that the marginal cost on all these books is effectively zero. Granted that the sunk cost has to be something > zero, but I bet not much, and in any event, I bet Amazon ain't payin' it.

Anecdote as data: I scroll the free stuff from time to time, have added a few, have knocked a few off for space reasons (all free, what's the big deal?). I've also bought about 70 books over the year since I got it. I don't know how many I would have bought in paper but I know it is not 70, so Amazon has squeezed something out of me. I suspect that maybe none of my 70 is in Amazon's top 100, but I do suspect my dollars are just as green as anyone's else.

Afterthought: have you any idea how handy it is to have a Complete Shakespeare on your Kindle? Never at loss to complete a quotation. Or for solace in a dark moment. Not very well edited, but good enough, and hey, it's free.

Engineer Terrorists

John flags me to the Slate piece this morning, asking why (and whether) so many terrorists are engineers. The answer to "whether" is apparently "yes;" the anecdotes hold up to more formal scrutiny. The answer to "why" remains, necessarily more speculative, and Slate feels free to speculate away (they do cite evidence that engineers are "more conservative and religious" than other scientists, but this only begs the question).

I will add two cents. I'm not even remotely an engineer myself, but I went to law school with quite a few and a find myself teaching quite a few in the law school. In this (skewed?) sample, I see a lot of people who have worked hard to develop a skill and then find themselves faced with the prospect of spending their lives in not-very-interesting jobs with lots of cubicles and a fairly low salary ceiling--that, at least, is the sort of thing that drives them to law school. A corollary is that they often find themselves (as they see it) ruled by idiots--find themselves taking orders from people they see as stupider than they are. Think Dilbert.

They may well be right in this view. Think Dilbert again. Of course it is equally possible that these bosses have skills that the engineers don't have and which to the engineers are therefore invisible.

Afterthought: Ignoto tells me I need to elaborate on that point about engineers in law school. Fair enough. My experience is that the engineers often do well, but often not as well as they expected, or think they deserve. My first dean told me that this is because engineers are not good at what lawyers need to learn how to do, and that is to cope with ambiguity. Might be. Of course a question would be whether we do in fact teach law students to cope with ambiguity.