Relevant History

"It was as if, after" an epidemic, "the only political reaction was a popular uprising to prevent the manufacture of antibiotics"

Michael Lewis interviews himself about the Occupy movement.

The chief cause of the financial crisis was what the government didn’t do (regulate) rather than what it did (subsidize homeownership), and so it seemed strange to me that, until now, the most potent political reaction to the financial crisis has been an antigovernment backlash. It was as if, after some infectious disease killed a million people, the only political reaction was a popular uprising to prevent the manufacture of antibiotics.

The man is a genius.

On the decline of American manufacturing

A good, lengthy piece in the New York Times uses iPhone manufacturing as a window into the growth of Asian factories, and the relative decline of American manufacturing capabilities. Well worth a read.

Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

Similar stories could be told about almost any electronics company — and outsourcing has also become common in hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals.

But while Apple is far from alone, it offers a window into why the success of some prominent companies has not translated into large numbers of domestic jobs. What’s more, the company’s decisions pose broader questions about what corporate America owes Americans as the global and national economies are increasingly intertwined.

“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.”

If corporations are people, then profits are a human right

At least that's the underlying argument behind a move being considered by hedge funds that have bought Greece's debt:

Hedge funds... [are considering] suing Greece in a human rights court to make good on its bond payments.

The novel approach would have the funds arguing in the European Court of Human Rights that Greece had violated bondholder rights, though that could be a multiyear project with no guarantee of a payoff.

You almost have to admire the absolute, graceless cynicism and depravity of a strategy like this. There's a refreshing honesty about a move this openly crass.

On the other hand, it IS a logical extension of the idea that corporations are people.

Best. Excuse. Ever.

The Telegraph:

Dominique Strauss-Kahn did not know he was sleeping with prostitutes 'because they were all naked'

On Gingrich's use of historical analogy: Was his failure to get on the VA ballot Pearl Harbor, Pickett's Charge, or 9/11?

Conor:

Everything must be made into a sweeping analogy. And his instinct for grandiosity is so pronounced that only a small group of recurring subjects are fit for the comparisons that he offers. Would anyone other than Newt Gingrich respond to failing to get on a ballot by asking, "Okay, what's the historical analogy?" Even the "the" is perfect -- as if there is one definitive analogy that fits….

Knowing Gingrich regards Pearl Harbor as "the analogy" for effectively losing Virginia, what comparison will he think appropriate if he loses the entire campaign. The Bataan Death March? Lincoln's tragic night at the theater? The fall of Rome? Or maybe he'll win, and God help us if so. Has there ever been a politician more inclined to make history? In a president of the United States, that is a dangerous impulse.

There's actually a serious point here, as Conor observes. For all his love of history-- or his love of himself as an historian-- Gingrich's use of history is remarkably shallow, and really consists of a kind of Mad Libs consisting of the Revolutionary War, the Civil War (how many people has Gingrich challenged to "a series of Lincoln-Douglas debates"?), and the Cold War; comparisons of himself to Washington, Reagan, and Thatcher; and apocalyptic language that would have warmed the hearts of Leo Strauss or Nostradamus.

He truly is a stupid person's idea of what a smart person is like.

Also, this handy flow chart.

Matt Taibbi on "skin in the game"

A fabulous recent Bloomberg piece quotes Blackstone Group LP CEO Stephen Schwarzman on the unfairness of lower-income U.S. families, military retirees, pensioners, and others who pay no income tax: “You have to have skin in the game," he complains.

Matt Taibbi counters, if you're not paying federal income taxes because you're earning working-class wages,

you’ve got nothing but skin in the game. You've got it all riding on how well America works.

You can’t afford private security: you need to depend on the police. You can’t afford private health care: Medicare is all you have. You get arrested, you’re not hiring Davis, Polk to get you out of jail: you rely on a public defender to negotiate a court system you'd better pray deals with everyone from the same deck…. And in the bigger picture, of course, you need the state and the private sector both to be functioning well enough to provide you with regular work, and a safe place to raise your children, and clean water and clean air.

The entire ethos of modern Wall Street, on the other hand, is complete indifference to all of these matters. The very rich on today’s Wall Street are now so rich that they buy their own social infrastructure. They hire private security, they live on gated mansions on islands and other tax havens, and most notably, they buy their own justice and their own government.

People like Dimon, and Schwarzman, and John Paulson, and all of the rest of them who think the “imbeciles” on the streets are simply full of reasonless class anger, they don’t get it. Nobody hates them for being successful. And not that this needs repeating, but nobody even minds that they are rich.

What makes people furious is that they have stopped being citizens.

Top CEOs working 30-40% harder than in 2009

I mean, if compensation for CEOs is up, as a new survey reports, that's the logical explanation, right?

CEO pay packages have boomed: the top 10 earners took home more than $770m between them in 2010. As stock prices began to recover last year, the increase in CEO pay outstripped the rise in share value. The Russell 3000 measure of US stock prices was up by 16.93% in 2010, but CEO pay went up by 27.19% overall. For S&P 500 CEOs, the largest companies in the sample, total realised compensation – including perks and pensions and stock awards – increased by a median of 36.47%. Total pay at midcap companies, which are slightly smaller than the top firms, rose 40.2%.

Working that hard makes losing a top job that much more painful:

Four of the 10 highest paid CEOs were retired or departing executives. Ronald Williams, former head of Aetna, a health insurer, exercised 2.4m options for a profit of $50.4m. Aetna's stock price declined by 70% from when Williams assumed the role of CEO in February 2006 until his retirement. At pharmacy chain CVS, Thomas Ryan made a $28m profit on his options. During Ryan's 13-year tenure as CEO, CVS Caremark's stock price decreased almost 54%.

As the Guardian comments, "2010 was a great year to lose your job as a CEO." Finally, the survey explains why bankers are in such a bad mood:

Bosses won in every area, with dramatic increases in pensions, payoffs and perks – as well as salary.

Still, there are no bankers among this year's big winners.

I wasn't ambitious enough in my Futurists' Guide to World Domination

Clearly in my Evil Futurists' Guide to World Domination I underestimated the ability of pathological behavior to claim rewards for itself, as Felix Salmon explains in his piece on Jon Corzine:

Corzine demonstrated virtually all of the pathologies of the rogue trader....

Lots of financial firms make big bets and blow up. But what we saw at MF Global was much more than that. In fact, as Corzine detailed at great length in his prepared testimony last week, his big sovereign-debt bet didn’t actually lose money at all. But MF Global died all the same, because the bet was so large and risky that it caused a fatal cascade of downgrades and margin calls….

A CEO wants to be paranoid about all risks; a rogue trader wants to hide them. It’s clear which one Corzine was.

The piece goes through the four major properties of rogue traders, and how Corzine fits them (though perhaps the systemic or cultural problem with the model is that nearly everyone on Wall Street demonstrates at least a couple of them to some degree.)

Why Felix Salmon is now essential reading

To me, Felix Salmon has become like a serious version of Michael Lewis. Like Lewis, Salmon writes about an incredibly important subject-- banking and finance-- in an entertaining way. Unlike Lewis (or even more, Matt Taibbi), you don't get the sense that Salmon's writing is skewed to tell a particular story.

Two posts today demonstrate why his blog is essential reading these days.

The first is on today's Eurozone summit, and how stupidly the central players-- in particular Germany, but also the ECB-- are behaving:

I thought disasters were all meant to happen over the weekend? Somehow, in Brussels, EU leaders have contrived to pull defeat out of the jaws of victory on Thursday night, leaving Friday for finger-pointing and recriminations and wondering whether anybody who signed on to this deal has any chance at all of even getting re-elected, let alone being remembered as one of the leaders who saved the euro.

Remember how Wolfgang Münchau said that the Euro zone had to get it right at this summit or it would collapse? Well, the Euro zone has most emphatically not got it right. Take any of the list of prescriptions of the minimum necessary right now — from Münchau, from Larry Summers, from Mohamed El-Erian — and the one thing that jumps out at you, especially in light of the most recent news, is that if you look at anybody’s list, there’s an enormous number of items which has zero chance of actually happening.

Yes, this is a good read, but Salmon also closes with a clarification of what's at stake:

A continent which has risen to multiple occasions over the past 66 years has, in 2011, decided to implode in a spectacle of pathetic ignominy. Its individual countries will survive, of course, albeit in unnecessarily straitened circumstances. But the dream of European unity is dissolving in real time, as the eyes of the world look on in disbelief

Europe’s leaders have set a course which leads directly to a gruesome global recession, before we’ve even recovered from the last one. Europe can’t afford that; America can’t afford that; the world can’t afford that. But the hopes of arriving anywhere else have never been dimmer.

To paraphrase Churchill, Merkel Draghi & Co. had a choice between economic disaster and dishonor; they've chosen dishonor, and they will have disaster.

The second is a piece examining the roots of the animus wealthy people feel toward Obama:

[Recent studies show a] very strong correlation between tax cuts for the rich... and increased wealth for the rich (on the y-axis). This correlation comes as no surprise, of course. But… lower top marginal tax rates don’t translate into higher growth — which means that the extra wealth going to the 1% really is a zero-sum game, and being taken out of the pockets of the 99%.

But it’s hard for a gazillionaire to come out and say that he wants more of everybody else’s money.

Michael Lewis' awesome ideas for the 1%

As usual, Michael Lewis nails it, this time in a Christopher Buckley-worthy memo "Re: The Counterrevolution:"

As our chief quant notes, “No matter how well we do for ourselves, there will always be 99 of them for every one of us.” Disturbingly, his recent polling data reveal that many of us don’t even know who we are: Fully half of all Upper Ones believe themselves to belong to the Lower 99. That any human being can earn more than 344 grand a year without having the sense to identify which side in a class war he is on suggests that we should limit membership to actual rich people. But we wish to address this issue in a later memo. For now we remain focused on the problem at hand: How to keep their hands off our money.

The ultimate answer: following the trailblazing example of Eastern European plutocrats. (Who says all innovation comes from America?)

We must be able to quit American society altogether, and they must know it. For too long we have simply accepted the idea that we and they are all in something together, subject to the same laws and rituals and cares and concerns. This state of social relations between rich and poor isn’t merely unnatural and unsustainable, but, in its way, shameful. (Who among us could hold his head high in the presence of Louis XIV or those Russian czars or, for that matter, Croesus?)

The modern Greeks offer the example in the world today that is, the committee has determined, best in class. Ordinary Greeks seldom harass their rich, for the simple reason that they have no idea where to find them. To a member of the Greek Lower 99 a Greek Upper One is as good as invisible.

He pays no taxes, lives no place and bears no relationship to his fellow citizens. As the public expects nothing of him, he always meets, and sometimes even exceeds, their expectations. As a result, the chief concern of the ordinary Greek about the rich Greek is that he will cease to pay the occasional visit.

That is the sort of relationship with the Lower 99 we must cultivate if we are to survive. We must inculcate, in ourselves as much as in them, the understanding that our relationship to each other is provisional, almost accidental and their claims on us nonexistent.

Stupid banking tricks, and the future

I'm thinking that before too long, I need to pitch a book proposal titled something like The Future: What We Know, What We Can Never Know, and What We Refuse to Know. It would be about the centrality of prediction in, well, absolutely everything that sentient species do; a look at the way the boundary between what's knowable and unknowable has changed over the centuries, and where it stands today; current efforts to forecast / predict the future; and why we do such a good job of either listening to the wrong people for Very Serious Advice, or repeating mistakes we just made.

Like this one:

The FT is reporting today that the new fiscal rules for the EU “include a commitment not to force private sector bondholders to take losses on any future eurozone bail-outs”. If this principle really does get enshrined into some new treaty, it will be one of the most fiscally insane derelictions of statesmanship the world has seen — but it certainly helps explain the short-term rally that we saw today in Italian government debt….

The impetus for this completely insane policy seems to have come from the ECB, which genuinely seems to believe that bailing in private-sector banks, in the Greece restructuring, was the “terrible mistake” which caused the current euro crisis. Talk about confusing cause and effect: it was Greece’s fiscal disaster which caused the restructuring and the necessary bail-in.

To understand just how stupid this is, all you need to do is go back and read Michael Lewis’s Ireland article. The fateful decision in Ireland was to take the insolvent banks and give them a blanket bailout, with the banks’ creditors all getting 100 cents on the euro. That only served to put a positively evil debt burden onto the Irish people, forcing a massive austerity program and causing untold billions of euros in foregone growth, while bailing out lenders who deserved no such thing.

Are we really going to repeat — on a much larger scale — the very same mistake that Ireland made? Does no one in Europe realize that this is the single worst thing they can do?

It's becoming increasingly clear to me that accountability-- the need to be responsible for one's actions, and to make decisions in the shadow of consequences for the value of your choices-- is one of the things that makes futures anything approaching necessary, and that the rise of "nobody could have predicted" rhetoric and the constant softening of elite decision-makers' landings after bad choices strikes at the heart of the field.

National Journal on "The Left-Behinds"

I went through a brief period of watching movies set in working-class British communities-- or rather, places that were working-class, and were communities, before the hollowing-out of manufacturing destroyed them. I found them depressing and somewhat incomprehensible; unfortunately, Michael Hirsh has a long, depressing article in the National Journal about the "trend toward long-term unemployment in America" that suggests that those movies are a preview of our future as well:

[In] communities laid low by the housing bubble and bust, the phenomenon can feed on itself and create a vicious cycle of disappearing jobs, declining incomes, higher foreclosures, and more layoffs.... [Cities with high structural unemployment] are the neglected collateral damage of the transformational changes made possible by unfettered free markets, globalization, and information technology. Most of the shocks were predictable, and many were predicted. U.S. policymakers, however, even more than their counterparts in other advanced countries, consistently underestimated the enduring effects those shocks would have on working families and failed to build in protec-tive buffers.

Along the way, “long-term unemployed” has increasingly become a synonym for “unwanted.” As industries die, skills atrophy, and ambition fades, especially among older workers. In a new era of jobless growth, fiscal austerity, and the relentless drive for productivity, employers get pickier about whom they hire. Workers who don’t retrain quickly at a high enough level or those who are stuck with an underwater mortgage and can’t move right away for a job opportunity quickly become long-term unemployed.

U.S. companies have grown so brazen about avoiding the long-term unemployed that many place ads for only “currently employed” applicants....

Washington, dominated by a free-market consensus ever since President Reagan’s era, has ignored that 30-year pattern. Partly as a result, reams of data show that America’s middle class has been shrinking. Among the few who has long second-guessed the Washington mind-set is Frank Levy, an economist at the Massachusetts Institute of Technology who coauthored a much-cited 2007 paper concluding that labor began losing the fight to capital in the late 1970s.

“I’m not sure how much better we could have done in preserving the middle class,” he says. “But I know that, with a few exceptions like the earned income tax credit, we didn’t really try.”

Awesome. Thanks, guys who wear ties with busts of Adam Smith on them.

Quote of the day

Krugman reminds of the old joke about European visions of Heaven and Hell:

the euro is, in reality, essentially an Italian creation. If you were part of the dialogue in the late 80s and early 90s, it became clear that the euro was best understood as a plot by Italian technocrats to get themselves German central bankers.

This was not, it turns out, a good idea.

Oil companies use psy ops to deal with anti-fracking groups

This CNBC report on how oil companies are using Army and Marine Corps psy ops-- psychological operations-- veterans to help them defeat anti-fracking campaigns is pretty interesting.

In a session entitled “Designing a Media Relations Strategy To Overcome Concerns Surrounding Hydraulic Fracturing,” Range Resources communications director Matt Pitzarella spoke about “overcoming stakeholder concerns” about the fracking process.

“We have several former psy ops folks that work for us at Range because they’re very comfortable in dealing with localized issues and local governments,” Pitzarella said. “Really all they do is spend most of their time helping folks develop local ordinances and things like that. But very much having that understanding of psy ops in the Army and in the Middle East has applied very helpfully here for us in Pennsylvania.”...

“Download the U.S. Army-slash-Marine Corps Counterinsurgency Manual, because we are dealing with an insurgency,” [manager of external affairs for Anadarko Petroleum Matt] Carmichael said. “There’s a lot of good lessons in there and coming from a military background, I found the insight in that extremely remarkable.”

Given that advocacy groups here in the U.S. are interested in how social media and novel organizational forms are used in other parts of the world, it should be no surprise that corporations would look to psy ops to help counter them. After all, the field does claim to be able to deal with problems like these.

I'm sure that the importation of expertise developed in Iraq, Afghanistan and countless "small wars" in the last half century is also proof that Sharia law has now taken over in Pennsylvania oil country. Those Amish think they look so innocent...

Saving a heritage oak

We just heard that the centuries-old oak tree that we protested to save this summer will be spared:

A centuries-old oak tree in San Mateo County in the path of a $4.6 billion water system upgrade will be preserved thanks to an agreement reached between neighbors, the county and the San Francisco Public Utilities Commission.

The tree, which North Fair Oaks neighbors nicknamed "Granny" and is estimated to be at least 150 years old, stands in the path of a project to upgrade the Hetch Hetchy water delivery system so that more than two million Bay Area residents will have a safe water supply in the event of a major earthquake.

Negotiations to preserve the valley oak reached an impasse in August, but on Monday the SFPUC, the county and neighbors jointly announced that public money will be spent to tunnel beneath the tree's roots to allow the construction of the new water supply pipeline to move forward.

Hooray!

Awesome Kiva microfinance visualization

I'm a sucker for this kind of thing, but this is both beautiful and very interesting.

Intercontinental Ballistic Microfinance from Kiva Microfunds on Vimeo.

Quote of the Day: David Weigel

An organization called W Spann LLC was founded in late April, and closed up in mid-July. It seems to have had no offices, and done nothing-- except give $1 million to Mitt Romney's Super PAC. David Weigel comments:

It's this kind of stuff that complicates the "money is speech" argument. If you're being incredibly charitable about it, maybe you can compare this to John Jay writing an essay under a pen name to influence the debate over whether or not New York should approve the Constitution.

Boy, that felt stupid even as I wrote it. It's nothing like that -- it's laundering money and hoping no one asks questions about it.

Trying to save a 300 year-old oak

For the last few months, there's been a lot of construction work just over our back fence. The pipes that carry water from the Sierras to San Francisco run right behind our house, and those pipes are being replaced. So we get to see earth movers and gigantic, 6 foot-diameter pipes from our back window.

A few houses down the block, there's a 300 year-old oak tree that the pipes run under. On Friday, we heard-- three houses were given notices at 4:45 pm-- that the tree would be taken down Monday morning. Fortunately, a couple of the neighbors went into high gear, made lots of phone calls, and so this morning there were news trucks and people from the county planning commission saying, "Maybe you should just hang on a bit."

The SFPUC claims that there's an arborist's report that says the tree can't be saved, but they haven't released the report (or an executive summary, or anything else). As someone who works in a field that combines both expertise and a certain potential softness in conclusions, this strikes me as notable. And the fact that there was such short notice seems suspicious.

Anyway, early this morning we joined a bunch of other neighbors at the tree, to make clear that we want a better accounting of why they think the tree has to come down.

The kids were interviewed by the local TV and radio stations, and I think they found it an interesting experience.

It looks like we've bought a couple days' respite while the SFPUC and county work on a deal. And it's not like there aren't tons of other places they can keep digging in the meantime....

I'll have "white men are the real minority" with a side of Sichuan pork

Joshua Green in the Atlantic, on "class warfare:"

I've always loved that phrase because it's such potent hyperbole, the product of expensive focus grouping and crafty political wordsmithery as surely as is the phrase "millionaires and billionaires," except "class warfare" has that extra dimension of apocalyptic consequence and the undertone of victimization that work so well together even though they shouldn't, like sweet-and-sour soup.

What could behavioral economists make of the Sarah Palin phenomenon?

Frank Rich has this nice line:

If logic applied to Palin’s career trajectory, this month might have been judged dreadful for her. In an otherwise great year for Republicans she endorsed a “Star Wars” bar gaggle of anomalous and wacky losers...

But logic doesn’t apply to Palin. What might bring down other politicians only seems to make her stronger: the malapropisms and gaffes, the cut-and-run half-term governorship, family scandals, shameless lying and rapacious self-merchandising. In an angry time when America’s experts and elites all seem to have failed, her amateurism and liabilities are badges of honor. She has turned fallibility into a formula for success.

I'm not sure I'll ever watch Star Wars quite the same way again, and if someone doesn't have a YouTube video of this in the next 36 hours I'll lose all faith in the hive mind. But Rich raises a good question: what is it about the dynamic of Palin that makes her thrive off personal scandal and unnecessary self-created chaos? Or more to the point, what is it about her fans' relationship with Palin that lets them take all this and see it as strength?

[To the tune of Van Morrison, "I'll Take Care Of You/It's A Man's, Man's, Man's, Man's World," from the album A Night In San Francisco (a 3-star song, imo).]

Why I miss the generation of Moynihan, Fadiman, and the other Mad Men

Anne Lauries compares John Boehner and Daniel Patrick Moynihan:

Daniel Patrick Moynihan was our contemporary version of Finn McCool—not a demi-god like JFK, but a warrior and a schemer for “his people” against the cruelties and indifference of powerful outside forces. Danny Pat, ex-longshoreman, despite being a good Democrat, never held his pride so dear that he wouldn’t compromise with The Enemy, from LBJ (it wasn’t just ivory-tower DFHs who suspected Lyndon of a hand in Kennedy’s assassination) to Tricky Dick and Jerry the Klutz. But Moynihan always took great pride in being a capital-I Intellectual, a philosopher-scholar standing behind this year’s President like Aristotle behind Alexander. Being educated, well-read, capable of defending the side in the UN, writing books that would actually be discussed, not merely sold as vanity-press quasi-religious icons for willful illiterates to display in evidence of their tribal fealty—such things were important to the ambitious blue-collar Catholics of Moynihan’s generation.

Reading the recent spate of Boehner bios, Orange John seems to be working a lot of the same tropes for the next generation… but “intellectual”, for the ambitious modern politico, is an identifier only slightly less to be avoided than “pedophile”.

Ah, how times change.

[To the tune of Van Morrison, "Beside You," from the album Astral Weeks (a 3-star song, imo).]

Yes, the election was clearly a mandate for free markets

This from Balloon Juice amazes me:

Unicredit America has to shut down its fake courtroom, take the fake uniforms off of its fake sheriff’s deputies and disrobe its fake judge, because it’s illegal to try to collect debt by creating your own pretend court system.

Add this to the tale of a woman who had her car repossessed by Wells-Fargo (via) even though she had clear title to the car, and a new recovery plan seems to be emerging: fuck the poor, harder.

Even though I've written that shamelessness is the new virtue, the balls required to create your own fake judicial system, and believe you can get away with it, is so incredible as to be sickening.

[To the tune of Van Morrison, "Astral Weeks/I Believe I've Transcended," from the album Astral Weeks: Live At The Hollywood Bowl (a 4-star song, imo).]

Living history: on the politics of reenactment

An Ohio congressional candidate turns out to have been a Nazi reenactor, though he claims he only did it as "a father-son bonding thing." (WTF)? I grew up in Confederate War reenactment territory, but this strikes even me as really weird.

I spent ten years of my childhood in Tennessee and Virginia. For most of that I lived I Richmond, the once and current capital of the Confederacy. The city's beautiful Monument Avenue has statues to Confederate generals (and one recent addition, of Arthur Ashe), and the city is dotted with other memorials or institutions devoted to Confederate history. I knew a few people in high school who were into Civil War reenactment. For those unfamiliar with it, this doesn't involve buying black people, attacking federal institutions, dying of dysentery, or coming home to find your modest pre-war life reduced to ashes; rather it means dressing up in grey uniforms and pretending to fight Civil War battles.

For the people I knew, it wasn't a matter of keeping ancient grievances alive; Civil War reenactments were more like a hunting or fishing, a hobby that got you outdoors and away from the women. And it wasn't particularly political: it wasn't a gateway drug to joining the Klan or agitating for reparations for Southern slave-owners, any more than going to Renaissance faires leads to a belief in monarchy or droit du seigneur. (Though New Republic writer Ed Kigore, "a white southerner old enough to remember the final years of Jim Crow, when every month was Confederate History Month," once suggested organizing "a Neo-Confederate History Month that draws attention to the endless commemorations of the Lost Cause that have wrought nearly as much damage as the Confederacy itself.")

There are lots of other kinds of reenactors around: there are even hilarious reenactments of the American Revolution.

But this strikes me as pretty different from dressing up in a Waffen SS uniform and marching around. Even Germans in Germany don't do this; I haven't seen arguments that participants here in the States tend to be Germanic-American. It also seems to me a lot harder to disentangle tacit endorsement of the politics of National Socialism from reenactment, particularly when you choose to imitate members of an especially fanatical and murderous component of the Nazi machine. (Granted, their uniforms were fabulous, but still, what's wrong with the Wehrmacht?) While you can make some exculpatory argument that at least some Confederate soldiers and officers fought to defend their homeland, and weren't mainly motivated by a desire to preserve slavery (an argument that really cannot be made about the leaders of the Confederacy-- for all the whitewash about states' rights and so forth, they really were about slavery first and foremost), it's harder to make a similar argument about the Waffen SS: they thought of themselves as a vicious elite. Imitating them says something.

Finally, for those for whom World War II games on XBox just aren't enough, there are lots of alternatives to pretending to be part of a regiment that cleared the Lodz ghetto. The WWII Historical Reenactment Society has a list of reenactment units around the country. There are a lot of them, and they reveal some interesting national differences. The British reenactors are mainly commando units. The Americans are all over the place, in terms of the branches and types of groups-- heck, there's even a homefront reeanactment group. There don't seem to be any Japanese reenactment groups (which tells us something about the degree to which wartime Japanese are still regarded as more of an Other than the Nazis). Given that you could join the pretend 81st Airborne or the Royal Marines or the SAS, it's especially interesting that most of the German reenactors are Panzer divisions, and in a vaguely sinister twist, a non-trivia number of them are SS.

Finally, this bit of comparison didn't make me feel any better:

Local Tea Party organizer Bill Zouhary told The Blade Saturday that it was important to focus on what Mr. Iott stands for, which is smaller government and a move away from the types of big-spending policies that could result in hyperinflation, or a revisit of 1930s Germany.

"I thank God there are people like him to run. This isn't an issue about Nazis; this is an issue about what's going on in Washington," he said. "The re-enactments, if anything, would bring to light what happens when you end up with an economy which is very similar to the economy we have now, which opened the door for a dictator like Hitler."

Ah, historical comparisons.

Update: Hitler responds.

Hitler's take on the whole Rich Iott reenactment thing. from James Urbaniak on Vimeo.

Ideas have consequences...

...even when they're published "in a little-read journal," as Ezra Klein points out.

He's talking about Elizabeth Warren's 2007 article proposing a Financial Products Safety Commission-- which she is now the front-runner to lead.

[To the tune of The Arcade Fire, "Wake Up," from the album Funeral (a 4-star song, imo).]

The real life of a mama grizzly

From Daily Kos:

The true life of a momma is a lonely one. There is no pappa bear in the picture. No cub knows his father. She doesn't even see them for the first time until they are old enough to walk out with her. That would be like humans hibernating during the first eighteen months of a baby's life. Once out the mother grizzly is solely responsible for all aspects of her cubs' fedding and safety..... A third to a half of cubs do not survive to maturity.

So the ideal development that this branch of the Tea Baggers want to bring about is a society of lone mothers battling every man and each other for food for their competing offspring and a return to the rate of child mortality that hasn't been seen since the late nineteenth century.

Ah, metaphors we live by....

"The crisis of middle-class America"

A really excellent piece in the Financial Times on "the crisis of middle-class America," which alternates between high-level discussion of the squeeze on the middle class, and a focus on two families, the Freemans and the Millers:

Mention middle-class America and most foreigners envision something timeless and manicured, from The Brady Bunch, say, or Desperate Housewives in which teenagers drive to school in sports cars and the girls are always cheerleading. This might approximate how some in the top 10 per cent live.  The rest live like the Freemans. Or worse....

The slow economic strangulation of the Freemans and millions of other middle-class Americans started long before the Great Recession, which merely exacerbated the “personal recession” that ordinary Americans had been suffering for years. Dubbed “median wage stagnation” by economists, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years. That means most Americans have been treading water for more than a generation. Over the same period the incomes of the top 1 per cent have tripled. In 1973, chief executives were on average paid 26 times the median income. Now the ­multiple is above 300.

The trend has only been getting stronger. Most economists see the Great Stagnation as a structural problem – meaning it is immune to the business cycle. In the last expansion, which started in January 2002 and ended in December 2007, the median US household income dropped by $2,000 – the first ever instance where most Americans were worse off at the end of a cycle than at the start. Worse is that the long era of stagnating incomes has been accompanied by something profoundly un-American: declining income mobility.

Combine those two deep-seated trends with a third – steeply rising inequality – and you get the slow-burning crisis of American capitalism. It is one thing to suffer grinding income stagnation. It is another to realise that you have a diminishing likelihood of escaping it – particularly when the fortunate few living across the proverbial tracks seem more pampered each time you catch a glimpse.

At least I never did this...

Heather is returning today from a week in Williamsburg. I got to play single dad, and apparently I did a better job than some:

Former Michigan Speaker of the House Republican Craig DeRoche was arrested Sunday morning after friends and family called police because DeRoche was drunk and carrying around a gun, the Detroit Free Press reports. This happened because DeRoche’s wife was out of town, and when that happens, you have a license to get drunk and ride bikes with your three children and then break into your own house, get a loaded .40 cal out of your safe, and wave it around in front of your children so they finally respect you.

Time for a second cup of coffee, then to the airport.

[To the tune of Jean Sibelius, "Finlandia, Op. 26," from the album Finlandia/Tone Poems (a 3-star song, imo).]

I'm sure this will only be good news

The sweet balm of abundant natural resources will finally bring peace and good government to Afghanistan, just as it has to so many countries in Africa:

U.S. Identifies Vast Riches of Minerals in Afghanistan

The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.

I'm half serious when I suggest that the U.S. should award itself the contracts to develop these, rather than let the Chinese bribe their way into the picture. I mean, what could possible go wrong, for us or for the Afghans?

[To the tune of Ramiro Musotto, "Caminho," from the album The Rough Guide To Brazilian Electronica (a 2-star song, imo).]

Global vs. local, sex tourism edition

From a Slate article on the impact of the protests on the Thai sex industry:

[The protesters messed] "this country up," a man named Tom told me indignantly, as though he had been scammed on a time-share. "I've been coming here for years. I'm 75. Where else am I going to find a 25-year-old girl who will sleep with me?" Indeed. How inconvenient for Thailand to have political turmoil that disrupts elderly men's Viagra-fueled sex binges. Couldn't they have waited—until he was dead, perhaps—to hash out their grievances with what they feel is an illegitimate government?

Apparently, alternative locations aren't so attractive, either because of crime, bad food, the absence of any sex tourist industry, and this gem:

the advanced age of many of the men who come to Thailand for sex also means they need to be close to adequate medical care, which much of the rest of Southeast Asia lacks. Thailand has fantastic hospitals for those who have a heart attack or an erection lasting longer than 48 hours.

[To the tune of ZZ Top, "Doubleback," from the album Greatest Hits (a 1-star song, imo).]

One of the greatest quotes of all time

Steve Eisman, "the outspoken investor whose huge wager against the subprime mortgage market was chronicled by author Michael Lewis in his bestselling book The Big Short, talking about the for-profit education industry:

Until recently, I thought that there would never again be an opportunity to be involved with an industry as socially destructive and morally bankrupt as the subprime mortgage industry. I was wrong. The for-profit education industry has proven equal to the task.

As Mother Jones elaborates,

Driving much of the growth, Eisman explained, was the sector's easy access to federally guaranteed debt through Title IV student loans. In 2009, he said, for-profit educators raked in almost one-quarter of the $89 billion in available Title IV loans and grants, despite having only 10 percent of the nation's postsecondary students.

Eisman attributes the industry's success to a Bush administration that stripped away regulations and increased the private sector's access to public funds. "The government, the students, and the taxpayer bear all the risk and the for-profit industry reaps all the rewards," Eisman said. "This is similar to the subprime mortgage sector in that the subprime originators bore far less risk than the investors in their mortgage paper."...

Another similarity between subprime lending and for-profit education is this, Eisman said: Both push low-income Americans into something they can't afford.... [Finally], the industry's era of massive profits—ITT is more profitable on a margin basis than Apple, he notes—are about to end, thanks to new government regulations in the pipeline.

Wonderful.

[To the tune of Pink Floyd, "Shine On You Crazy Diamond (Parts I-V)," from the album Wish You Were Here (a 4-star song, imo).]

The housing crisis is only gathering steam

This from Ezra Klein, who is rapidly becoming indispensable, despite just having turned thirteen:

One in every 10 mortgage holders is now officially "delinquent" -- that is to say, late on at least one payment. That's an all-time high. And that's not the only record we're setting: About one in 20 loans is now in foreclosure, which also qualifies as a first. All in all, about 15 percent of mortgage-holders are now delinquent or in foreclosure....

It's a reminder, if nothing else, that the trigger for the financial crisis was the realization that homeowners were going to begin defaulting in record numbers and the assets based on their future payments were not safe. It was not the realization that that had already happened. Instead, it's happening now. So though the financial crisis seems to have largely played itself out, the housing crisis isn't anywhere near its end [emphasis added].

[To the tune of The Blue Nile, "Saturday Night," from the album Hats (a 4-star song, imo).]

Maybe he wasn't so stupid after all?

George Bush talking about starting the George W Bush Institute, via Wonkette:

One of the things I was nervous about about a think tank is that all we do is have people come here and they sit around and think.... I think it’s important not only to have people come around and think and have experts write and opine, but also to figure out how to act.

[To the tune of Philip Glass, "Koyaanisqatsi," from the album Koyaanisqatsi (a 4-star song, imo).]

Possibly the bravest stance taken by a general

When I started doing work that got me involved with the military and... well, I never really found out where those guys with the very short haircuts, no last names on their conference badges, and vague replies to the question "where do you work" all come from... one of the things that really struck me was how much they all love PowerPoint. Military people love PowerPoint. So I was struck to see Tom Ricks blog:

Marine Gen. James Mattis, one of the most thoughtful of our military leaders... began by making a point about the limitations of conventional firepower: Our military, he said, "must avoid being dominant and irrelevant at the same time." I hadn't heard that formulation before.

Mattis also spoke without any computer graphics. "The reason I didn't use PowerPoint is, I am convinced PowerPoint makes us stupid."

Though he's not alone:

Army Brig. Gen. H.R. McMaster, who also spoke at the conference, also took a pop at PowerPoint, saying that when combined with certain ill-advised metrics, it "is really dangerous."

Interesting. I wonder what they would make of Prezi?

[To the tune of Tabla Beat Science, "Satellite (Show Me The Worth Of The World)," from the album Live in San Francisco at Stern Grove (a 3-star song, imo).]

The greatest political column since Sally Quinn...

...did that stupid thing about dueling weddings:

My Constituents Care Way More About Political Gamesmanship Than Jobs, Health Care, And The Economy
By House Minority Leader John Boehner (R-OH)

It is my responsibility as an elected official to look out for the people back home, the voters who sent me to Washington. So, after 20 years representing Ohio's 8th District, I know what the good citizens of Montgomery, Preble, and Butler counties really want: someone who engages in the kind of calculated political gamesmanship that increases his standing in the Republican party while simultaneously hindering our country's legislative process at every conceivable turn.

I assure you, the last thing my voters need is some well intended, do-all-I-possibly-can-to-help-the-little-guy congressman running around Washington, working across the aisle, and fighting tooth and nail for jobs, health care, and financial reform to ensure their tax dollars never end up in the hands of banks capable of holding our entire economy hostage.

Want to reach your goals? Be oblique

John Kay may be my favorite business writer. For some time he's been thinking about a concept he calls "obliquity," which is the subject of a forthcoming book, Obliquity: Why Our Goals Are Best Achieved Indirectly. An essay from the Financial Times in 2004 explains the concept.

Obliquity is characteristic of systems that are complex, imperfectly understood, and change their nature as we engage with them.... [These are systems in which] the attempt to focus on simple, well defined objectives proved less successful than management with a broader, more comprehensive conception of objectives.... Obliquity is equally relevant to our businesses and our bodies, to the management of our lives and our national economies.

And yes, it is counterintuitive.

Isn't it true that you must do better if you set out to maximise something - happiness, wealth, profit - than if you don't? Surprisingly, the answer is no. Life is too complex and uncertain for us to be able to predict and follow the most direct perceived route to success. Our knowledge is always imperfect, and events are influenced by the unpredictability of other people and organisations. Instead, our objectives are best achieved by a more meandering approach that enables us to adapt our strategy to changing situations. And we learn about the nature of our objectives and the means of achieving them through a process of experiment and discovery.

Part of what's brilliant about Kay's argument is that it ranges very widely. He compares CEOs who think broadly versus those who focus more exclusively on profitability, and finds that the second are more likely to destroy value: as he puts it, "Obliquity gives rise to the profit-seeking paradox: the most profitable companies are not the most profit-oriented." In forestry, it turns out that letting small fires burn helps protect forests from huge fires by clearing undergrowth. He talks about architecture and urban planning ("a house is not simply a machine for living in"), and the complexity and adaptability of biological systems (and how markets are like them). (Indeed, while he doesn't trumpet this, Kay's may be the best application of biological concepts to management and organizational theory around.)

Interesting stuff in theory, but what does it mean? Kay lays that out in a recent Management Today article:

• Have objectives, but keep your approach flexible so that you can overcome unforeseen obstacles and take advantage of surprise opportunities.
• Know that your knowledge is always imperfect and incomplete. Cast your net wide - always go fishing for more.
• Don't be afraid to change tack once you've started if you see a better course.
• Meandering can lead to serendipitous discoveries and unexpected benefits.
• Think laterally to solve problems: indirect solutions can often be the most effective answer.

I know California is in trouble, but...

We're not in this much trouble, are we?

  
(from the Telegraph)

To its credit, the actual article doesn't make the same mistake.

"After this 60-year feeding frenzy, Earth itself has become disposable"

From George Monbiot's impassioned by depressing latest column in The Guardian (which has the world's greatest op-ed lineup, I think):

in its practical effects, consumerism is a totalitarian system: it permeates every aspect of our lives. Even our dissent from the system is packaged up and sold to us in the form of anti-consumption consumption, like the "I'm not a plastic bag", which was supposed to replace disposable carriers but was mostly used once or twice before it fell out of fashion, or like the lucrative new books on how to live without money.

George Orwell and Aldous Huxley proposed different totalitarianisms: one sustained by fear, the other in part by greed. Huxley's nightmare has come closer to realisation.

[To the tune of Little Walter, "Don't Need No Horse," from the album Chess Blues 1947-1967 (a 2-star song, imo).]

You kids get off my lawn so I can retire

Sometimes a "what people are commenting on" list (like this one from CBS' Market Watch web site) looks like a direct, unmediated view of the id:

via flickr

Gee, I wonder what Baby Boomers are worried about?

It also makes me wonder how well the "biggest intergenerational transfer of wealth in history" is going.

[To the tune of Audioslave, "Bring 'em Back Alive," from the album Audioslave (I give it 4 stars).]

"listening, understanding and neutralizing"

From a reader of Andrew Sullivan:

Obama is after bin Laden. No other single action would pay such huge dividends. In this, Obama proves himself again to be, not just the politician as chess master, but the politician as martial artist, always seeking for the fulcrum, the pivot point where four ounces of effort will yield a thousand pounds of result.

It is a very high level skill, far higher and more effective than the brute force men like Cheney, Bush, or Rumsfeld rely on, and it's difficult to attain, because it depends on three subsidiary skills that lesser men simply never recognize, much less master: listening, understanding and neutralizing.... What appears to some to be hesitation or lack of engagement on his part early on in any effort is really just preparation.

[To the tune of Audioslave, "Jewel Of The Summertime," from the album Revelations (I give it 3 stars).]

Four secrets of innovation

My latest piece, "Four Secrets of Innovation," appears in this month's U.S. State Department-sponsored eJournalUSA. Naturally it starts with one of my usual historical references:

In today’s innovation-obsessed, knowledge-intensive global economy, it might come as a surprise that for most of their long histories, science and business have had almost nothing to do with each other. Had you suggested to a silversmith working in ancient China, a captain plying the spice trade during the Age of Exploration, or a Quaker brewer in 18th-century Philadelphia that science could improve commerce, he would have looked at you as if you were crazy. Even today, describing the relationship between science and business — and figuring out how science and industrial policy can be designed to work to the benefit of both parties — is a challenge....

So we seem to be entering a new age in which science is more important for innovation than ever, but is more unpredictable and harder to benefit from. In an age that values innovation, companies and countries have a harder time than ever encouraging and profiting from science.

But does that mean that science policy is now impossible? Certainly not, and successful regions and countries have learned several secrets.

So what are the four secrets? Go read it and find out.

[To the tune of Robert Plant & Alison Krauss, "Rich Woman," from the album Raising Sand (I give it 3 stars).]

I suppose it's possible that I'm still sick, and this would make sense if I felt better

Wonkette once referred to Michael Steele as "Michael Steele parodist Michael Steele." Maybe if I felt better, this recent statement would make more sense:

In response to press reports saying that the health care reform train is leaving the station with President Obama at the wheel (or whatever you use to run a train), Michael Steele just told Fox to look out because he is [the] "cow on the tracks." In other words, in addition to his other shortcomings, Steele is apparently unschooled on the history of train/cow confrontations, though I'm not sure it's a metaphor Democrats will necessarily want to dispute. Later, in a new strike in his on-going war with his dignity, Steele pleaded for a "Rodney King moment" on health care.

To elaborate:

The Fox anchor had noted that Democrats are saying the health care reform train has "already left the station" and "Republicans better jump on board."

"Well, I'm the cow on the tracks. You're gonna have to stop that train to get this cow off the track to move forward," Steele said.

It's like the man can't not be entertaining. That's worth something in today's world.

Though "I'm the cow on the tracks" would make an awesome meme.

[To the tune of Yoshinori Sunahara, "Cross Wind Take Off," from the album Take Off and Landing (I give it 5 stars).]

I may need to sell off my Fassbinder and Hertzog DVDs now

From the New York Times, in an article about reactions to the Roman Polanski arrest:

The president of the German Film Academy... spoke about the need for "solidarity among prominent people "and bemoaned how Mr. Polanski had been arrested on his way to a film festival, as if film festivals were embassies or churches.

What a brilliant line-- solidarity among prominent people. Damned Regular People applying their standards to us!

Having followed the story back and forth, read about the documentary, about how one of the prosecutors has recanted his story about trying to influence the judge, etc., I come down on the opinion that Polanski ought to be returned to Los Angeles. The argument that he's suffered enough strikes me as dumb, for several reasons. First, he knew the risks when he fled, and he managed to give himself another 30 years. (And are you more deserving of release if you've been on the lam for 5 years or 50? Have you suffered more if you've spent decades looking over your shoulder, or if your caper only worked for a short period?)

Second, lots of people lose parents or spouses under horrible circumstances yet don't go on to commit crimes against 13 year-old girls.

Finally, Polish artists and intellectuals have been moving to France for at least the last 150 years: it's where you go when you make the big time. It's hard to say that Polanski "suffered long enough" if he's imitating Chopin.

[To the tune of Green Day, "Holiday (Faded Ending)," from the album Holiday - Single (I give it 2 stars).]

Quote of the day

From Matt Bai's "The New Old Guard:"

[T]he town hall itself has probably reached the end of its usefulness in the Internet age; if you’re looking for thoughtful dialogue, you might as well hold your next meeting on the stern of a Somali pirate ship.

[To the tune of Alban Berg Quartet, "Op. 59 No. 2 In E Minor 'Rasumovsky': I: Allegro," from the album Beethoven: The Complete String Quartets (Disc 5) (I give it 3 stars).]

The dangers of efficiency

A cautionary tale for meeting facilitators and organizers everywhere:

Thousands of employees were evacuated from an office complex after an employee spotted a suspicious black box with lights, wires and a timer in a conference room, and called for help.

Employees streamed out of the JPMorgan Chase & Co. offices in Columbus, Ohio - only for investigators to figure what the device was: a timing device used to keep presentations short....

Several people were overcome by summer heat in the parking lot during Tuesday's evacuation and were treated by paramedics.

[To the tune of Shirley Bassey, "Light My Fire (Kenny Dope Remix)," from the album The Remix Album...Diamonds Are Forever (I give it 4 stars).]

The Queen's economics lesson

From The Guardian:

A group of eminent economists has written to the Queen explaining why no one foresaw the timing, extent and severity of the recession.

The three-page missive... was sent after the Queen asked, during a visit to the London School of Economics, why no one had predicted the credit crunch.

What did they come up with? The explain that

the failure to foresee the timing, extent and severity of the crisis and to head it off, while it had many causes, was principally a failure of the collective imagination of many bright people, both in this country and internationally, to understand the risks to the system as a whole.

Sounds perfectly plausible. The question is, what would help improve that collective imagination?

Yes, shamelessness is the new virtue

A few days ago I wondered if shamelessness was the the new virtue. Yesterday I didn't quite find an answer, but I did find another great example of how information transparency doesn't necessarily lead to greater probity and economy, but greater recklessness or shamelessness. This is from Dan Ariely's Predictably Irrational, pp. 16-17:

[I]n 1993, federal securities regulators forced companies, for the first time, to reveal details about the pay and perks of their top executives. The idea was that once pay was in the open, boards would be reluctant to give executives outrageous salaries and benefits....

But guess what happened. Once salaries became public information, the media regularly ran special stories ranking CEOs by pay. Rather than suppressing the executive perks, the publicity had CEOs in America comparing their pay with that of everyone else. The result?... [I]n 1976 the average CEO was paid 36 times as much as the average worker. In 1993, the average CEO was paid 131 times as much.... Now the average CEO makes about 369 times as much as the average worker-- about three times the salary before executive compensation went public.

Really great.

Is shamelessness the new virtue?

There's a great catflight going on between Matt Taibbi (who has turned into a mad cross between Upton Sinclair, Michael Lewis, and Lenny Bruce) and Claudia Deutsch about Goldman Sachs' plan to pay big bonuses to its people again. Matt rips apart a post titled "Congratulations, Goldman-- And I Wish You Many, Many More."

The defense of Goldman seems to boil down to, yes they have all sorts of connections, and yes they got tons of money from the government, but they're honest about it.

It makes me wonder: At one time, back in the day, we thought that the Internet and other information technologies would create transparency, make it harder to hide corruption, and thus force powerful people to behave better.

But we've essentially run an experiment for a decade testing this hypothesis, and it seems to me that it hasn't worked out that way.

Instead of forcing corruption underground, the Internet has forced shamelessness aboveground-- and indeed, has turned it into a virtue. So the Goldman execs may be dickheads, money-grubbing asses, and willing to sell their grandmothers if the price is right, but they don't pretend to be anything else. So they're welcome to their bonuses.

On neocons

in the course of my reading (or browsing or opportunistic strip-mining) of the literature on behavioral economics, the psychology of the future, studies of certainty, and other things, I keep having the same thought: The whole point of this literature is to explain why people listen to the neocons.

There's no logical reason, after the last eight years, that anyone should ever take anything that William Kristol (to take one example) says seriously. But the neocons don't appeal to logic: they appeal to those parts of our brains that respond to blinding certainty, simple arguments, and self-confidence, not complexity, contingency, and modestly.

Once you realize that it all makes sense. If you want to be constantly rewarded for being consistently wrong, study their careers.

Of course, being well-connected doesn't hurt (amazing anecdote via Balloon Juice, via Denver Post):

I remember back in the late '90s when Ira Katznelson, an eminent political scientist at Columbia, came to deliver a guest lecture to an economic philosophy class I was taking. It was a great lecture, made more so by the fact that the class was only about ten or twelve students and we got got ask all kinds of questions and got a lot of great, provocative answers.

Anyhow, Prof. Katznelson described a lunch he had with Irving Kristol back either during the first Bush administration. The talk turned to William Kristol, then Dan Quayle's chief of staff, and how he got his start in politics. Irving recalled how he talked to his friend Harvey Mansfield at Harvard, who secured William a place there as both an undergrad and graduate student; how he talked to Pat Moynihan, then Nixon's domestic policy adviser, and got William an internship at The White House; how he talked to friends at the RNC and secured a job for William after he got his Harvard Ph.D.; and how he arranged with still more friends for William to teach at UPenn and the Kennedy School of Government.

With that, Prof. Katznelson recalled, he then asked Irving what he thought of affirmative action. "I oppose it", Irving replied. "It subverts meritocracy."

John Oliver on information technology

John Oliver, in the latest issue of The Bugle (the funniest thing in the world), talking about the use of information technology in Iranian protests:

John Oliver: The reinforcements of modern technology stepped to the front line: the twin soldiers of YouTube and Twitter answered their planet's calling. People in protests used their cellphones to shoot footage, and then put it on the Internet. All it took was a potential Iranian revolution to find a practical use for Internet video.

And so I would like to hereby issue a public apology to the piano-playing cat; to the teenage boy receiving a nut-shot from a whiffle bat; and to the fat lady falling off a table. All of your clumsy attempts at entertainment were in fact vital experiments in the development of this communications tool.

Andy Zaltzman: They were very much the John the Baptists to the Jesus of Iranian video.

More on the current state and future of economics

That article I just quoted (Barry Eichengreen's "The Last Temptation of Risk," in The National Interest) just gets better and better:

[W]here the accelerating pace of change should have prompted more caution, the routinization of risk management encouraged precisely the opposite. The idea that risk management had been reduced to a mere engineering problem seduced business in general, and financial businesses in particular, into believing that it was safe to use more leverage and to invest in more volatile assets.

Of course, risk officers could have pointed out that the models had been fit to data for a period of unprecedented low volatility. They could have pointed out that models designed to predict losses on securities backed by residential mortgages were estimated on data only for years when housing prices were rising and foreclosures were essentially unknown. They could have emphasized the high degree of uncertainty surrounding their estimates. But they knew on which side their bread was buttered. Senior management strongly preferred to take on additional risk, since if the dice came up seven they stood to receive megabonuses, whereas if they rolled snake eyes the worst they could expect was a golden parachute. If an investment strategy that promised high returns today threatened to jeopardize the viability of the enterprise tomorrow, then this was someone else’s problem. For a junior risk officer to warn the members of the investment committee that they were taking undue risk would have dimmed his chances of promotion. And so on up the ladder.

On not blowing the whistle, and the loneliness of being right:

But what of doctoral programs in economics (like the one in which I teach)? The top PhD-granting departments only rarely send their graduates to positions in banking or business—most go on to other universities. But their faculties do not object to the occasional high-paying consulting gig. They don’t mind serving as the entertainment at beachside and ski-slope retreats hosted by investment banks for their important clients.

Generous speaker’s fees were thus available to those prepared to drink the Kool-Aid. Not everyone indulged. But there was nonetheless a subconscious tendency to embrace the arguments of one’s more “successful” colleagues in a discipline where money, in this case earned through speaking engagements and consultancies, is the common denominator of success.

Those who predicted the housing slump eventually became famous, of course. Princeton University Press now takes out space ads in general-interest publications prominently displaying the sober visage of Yale University economics professor Robert Shiller, the maven of the housing crash. Not every academic scribbler can expect this kind of attention from his publisher. But such fame comes only after the fact. The more housing prices rose and the longer predictions of their decline looked to be wrong, the lonelier the intellectual nonconformists became. Sociologists may be more familiar than economists with the psychic costs of nonconformity. But because there is a strong external demand for economists’ services, they may experience even-stronger economic incentives than their colleagues in other disciplines to conform to the industry-held view. They can thus incur even-greater costs—economic and also psychic—from falling out of step.

Finally, this bit that reveals what happens when you have large stores of legacy data, combined with a dramatic drop in the costs of analyzing it:

The last ten years have seen a quiet revolution in the practice of economics. For years theorists held the intellectual high ground. With their mastery of sophisticated mathematics, they were the high-prestige members of the profession. The methods of empirical economists seeking to analyze real data were rudimentary by comparison. As recently as the 1970s, doing a statistical analysis meant entering data on punch cards, submitting them at the university computing center, going out for dinner and returning some hours later to see if the program had successfully run. (I speak from experience.) The typical empirical analysis in economics utilized a few dozen, or at most a few hundred, observations transcribed by hand. It is not surprising that the theoretically inclined looked down, fondly if a bit condescendingly, on their more empirically oriented colleagues or that the theorists ruled the intellectual roost.

But the IT revolution has altered the lay of the intellectual land. Now every graduate student has a laptop computer with more memory than that decades-old university computing center. And she knows what to do with it. Just like the typical twelve-year-old knows more than her parents about how to download data from the internet, for graduate students in economics, unlike their instructors, importing data from cyberspace is second nature. They can grab data on grocery-store spending generated by the club cards issued by supermarket chains and combine it with information on temperature by zip code to see how the weather affects sales of beer. Their next step, of course, is to download securities prices from Bloomberg and see how blue skies and rain affect the behavior of financial markets. Finding that stock markets are more likely to rise on sunny days is not exactly reassuring for believers in the efficient-markets hypothesis.

Really, just go read the whole thing. And I gotta track down Eichengreen.