Saturday, June 01, 2002


Alan, who has graced Limited Inc, on occassion, with controversy, (and who is wise enough to know it is spelled "occasion" -- LI can never remember the s-es and c-es in that word) has finally done it. He's finally set up his own weblog, which he is calling the Gadfly's buzz. Well, we were both in philosophy, and both our site names reflect, sadly enough, that experience. Alan is starting out with heavyweights -- throwing around Habermas' name and such. Now, LI must confess that one of the pleasures of middle age is not reading Habermas. Just the thought that I will never read Habermas again has gotten me through many a torturous moment. The man has a fatal addiction to 797 pages, plus footnotes. And we are talking about prose that resides at a level comparable to, say, the speeches at the Darmstadt Bricklayer's Union Annual May Day Festival. But he is a great codifier of the obvious, got to give him credit. Anyway, Alan is tossing around the question of the blog phenomena, going meta right out. A brave man.

Friday, May 31, 2002


As readers of this page know, LI has taken to hanging around a very expatriated Turk named S. S. has the immigrant desire for selective amnesia, and isn't this New World just the place for that? The parts of T�rkiye she would like to select for the memory hole are many, including: the traffic jams of Istambul; Turgut �zal's grandiose, gargling pronunciation of the word Turkiye -- Ozal was the right wing prez of the country during much of the eighties; Turkish machismo; and as a subset of the last, the prevalence of black, bushy moustaches above the upper lips of her countrymen in their virile primes.

Unfortunately for S., all her talk about Turkey has only inflamed Limited Inc's Turkophilia. This curious and lonely passion (for what country has a worse press in this country? All due, I assure you, or at least I have been assured, to Greek propaganda) began when we reviewed Orhan Pamuk's latest novel for In These Times. That review required a lot of looking up of books about the Ottoman empire. And we rather fell in love with this empire: with the poetry, with the always crazy sultans having their nearest and dearest strangled, or dying in the harem during olympian bouts of sex, or carousing in disguise in the streets of Istanbul, choosing their viziers among their drinking buds. We also loved the sort of Maoism avant Mao which governed Ottoman political life. In order to thwart the entrenchment of an aristocratic class, the empire recruited Infidel children from the Sultan's European possessions and gave them governance over various satrapies appending to the empire; governance that ended with the lives of the governors.

The Ottomans, though, are well and truly dead. So the next stage in our Turkophilia was obvious. We hooked onto the music.

S. taught us the pop rudiments, which all converge on one woman: Sezen Aksu. We started with her, but have, since, explored with a little more depth the procession of modern music in Turkey. We aren't talking about the music of orchestras, here; although from an American perspective, the music of Turkey does not correspond to the classifications that come so naturally when turning the dial on the radio. Art music, folk, pop, and classical are all very much mixed together. For a nice article that outlines the folk and art background of Turkish music, we'd recommend this page from Les arts turques . For the musicologically inclined (among whom we do not count ourselves) this is a nice explanation of the Turkish differance:

"Today, Turkish music is a fusion of classical art music, folk songs, Ottoman military music, Islamic hymns and the norms of western art music. Classical Turkish music is the courtly music of the Ottoman sultans that is an offspring of the Arabic and Persian traditions. This music is not written down in scores; with only the maquam, which is a similar pattern of major-minor scale system, being marked down. Improvisation (taksim) is a traditional variation technique, featuring the form. One of the characteristics of Turkish classical and folk music, as well as the military music and the hymns, is being monophonic. There are about 24 unequal intervals and almost numberless modes.

"Aksak is the irregular meter typical to Turkish folk music. This metric pattern provides a rich texture to the doubles, triples and quadruples of time measures of the western music. The tradition of regional variations in the character of folk music prevails all around Anatolia and Thrace even today. The troubadour (singer-poets) contributed to this genre for ages anonymously.

Turkish military music of the Janissary Band influenced 18th and 19th century European music, with its percussive character, aksak rhythms and mystical tones. Inspired by the Janissary bands, both Mozart and Beethoven wrote Alla turca movements; Lully and Handel composed operas. "

Turkey, like everywhere else, was hit by the first big wave of international media culture in the twenties and thirties, when radio and movies suddenly made the globe into one big potential America. In the thirties, there was a craze for something called gazino music -- of which, I suppose, the equivalent is torch singing in America. There's a sample of songs from the famous chanteuses of yesteryear at an Italian site along with photos of the fabulous, vanished divas. However, even Zehra Bilir, billed at the time as the Turkish Edith Piaf, does not sound Billy Holiday-ish. The vector of influence is still predominantly from the East.

I'm giving you this background to get us up to Sezen. There's an English language newspaper in Istambul that produced, a couple of years ago, a potted history of Turkish pop. It is a useful scorecard to keep when trying to make your way, without knowledge of the language, through the dense thicket of Turk-pop--folk. I was delighted to run into the familiar name of Ibrahim Tatlises
, for instance. S. had told me about the man already -- a favorite of S.'s mother. The ways of cross-cultural misunderstanding are many: I had picked up the cue that somehow, it was a bit shameful that S.'s mother liked Ibo so much, but I didn't understand why. It was only reading about how he had become a hero among immigrants to Istambul that I understood the class mythology going on there. Ibrahim rose from the ranks of all the poor sods who've flocked to the cosmopolitan city to earn money putting bricks on bricks, or pulling together pre-fab and earthquake vulnerable housing. According to a dressed up legend, he was discovered at a construction site. The man is singing, a car passes, slows down, stops, and a man with sunglasses and a swift Italian suit steps out. You've seen this movie before. He asks the now silent crew, which picks up on the symbols of his wealth and has coagulated into a sullen working class unit, who was singing? Etc. You can hear Ibo wailing away about his blondie girlfriend in "H�lya.". The man now has, of all American good things, a talk show.

The Minik Serce, or little sparrow, Sezen Aksu, was the first Turkish musician I really paid attention to. My favorite of her CD's is Deliveren, which is charged with a survivor's anger -- Sezen seems to be one of those rare singers, like Dylan, who can read her own life in terms of the politics that has constituted it. The heart, after all, is a power struggle. That's all it is.
Here's a summary of Sezen's place in the pop pantheon:

"It was due to Sezen's clever judgment, or maybe lucky instinct, that she immediately started working with the best musicians in Turkey. Besides her consistent collaborations with these musicians (unlike other singers in similar positions to her), Sezen also entered into mutual relationships with them. As she would later declare, one cannot make music as if it were a business relationship only. Throughout her musical career, she even went as far as to be romantically involved with her musical partners (Uzay Hepari and Onno Tunc).

"Before Sezen the musical arrangement of pop songs was not a job that carried much respect. Many singers thought that their famous names would suffice. The talented and prominent names Sezen Aksu worked with (such as Onno Tunc, Arto Tunc and Attila Ozdemiroglu) worked with many other singers throughout their careers. But their relationship with these singers were -- as Sezen Aksu would call it -- like business relationships. Sezen signals her personal attachment and respect for her arrangers by inviting these usually background figures onto the stage with her to play songs that she feels she shared with the arrangers. Sezen has always been selective, almost to the point of perfectionism, about the people she works with.

"This resulted in two indisputable facts. The technical quality of her music developed and a minimum standard was established for her and for her competition. And secondly, the names behind the stars also came to the forefront. The emotional connection between the singer, writer and arranger was something new for the Turkish pop audience."

Now, Limited Inc would like to expand or expound on the minik serce's many virtues, but we will have to put that off until the next post. We have to earn some money today, somehow.

Thursday, May 30, 2002


In 1812, as the wave of repression passed over England, now in its tenth year of war with France -- first with the revolution, then with Napoleon -- one Daniel Isaac Eaton published Tom Paine's notorious atheistical tract, Age of Reason, and was sentenced to an hour in the pillory, plus imprisonment, by his judge, Lord Ellenborough. Shelley responded to the Ellenborough in an open letter that began like this:

I have waited impatiently for these last four months, in the hopes that some pen, fitter for the important task, would have spared me the perilous pleasure of becoming the champion of an innocent man.�This may serve as an excuse for delay, to those who think that I have let pass the aptest opportunity, but it is not to be supposed that in four short months the public indignation, raised by Mr. Eaton�s unmerited suffering, can have subsided.
My Lord,
As the station to which you have been called by your country is important, so much the more awful is your responsibility, so much the more does it become you to watch lest you inadvertently punish the virtuous and reward the vicious.

You preside over a court which is instituted for the suppression of crime, and to whose authority the people submit on no other conditions than that its decrees should be conformable to justice.

If it should be demonstrated that a judge had condemned an innocent man, the bare existence of laws in conformity to which the accused is punished, would but little extenuate his offence. The inquisitor when he burns an obstinate heretic may set up a similar plea, yet few are sufficiently blinded by intolerance to acknowledge its validity. It will less avail such a judge to assert the policy of punishing one who has committed no crime. Policy and morality ought to be deemed synonymous in a court of justice, and he whose conduct has been regulated by the latter principle, is not justly amenable to any penal law for a supposed violation of the former. It is true, my Lord, laws exist which suffice to screen you from the animadversions of any constituted power, in consequence of the unmerited sentence which you have passed upon Mr. Eaton; but there are no laws which screen you from the reproof of a nation�s disgust, none which ward off the just judgment of posterity, if that posterity will deign to recollect you."

Well, we doubt posterity will deign to recollect the name of the present head of the Patent Office, James Rogin (whose debt to those great lovers of free expression, Sony, Disney and co., preceded him into office) or his successor, Bruce Lehman (on whom LI is in a once in a lifetime agreement with, of all people, Phyllis Schlafly ) or the members of Congress, who have for the last twenty years been hotwiring intellectual property laws to create just the kind of monstrosity that was envisioned by opponents of the Constitution, and exorcised, in defense of the Constitution, by Jefferson, Madison, and the signers of the Constitution. Still, we recalled this exemplary case of the suppression of opinion when we read the NYT article about the speciousness of Big Pharma's claims to be churning out innovative products under the extended protection of patent law granted them by an always supine, intellectually vacant legislature, and seconded by a patent office that has taken it upon itself to extend monopolistic protection to the biggest and dullest corporations in the land. In both cases, it is a question of competition -- in one, the suppression of those enlightened expressions that could compete with the dull dead scriptures of the governing classes; in another, it is the suppression of that competition, from rival drug companies, that would lead to much lower pharmaceutical prices and, in all probability, invention and the flowering of science. Or something like that.

So, on to the NYT article. In a study done by Blue Cross of drug "innovations" during the last twenty years, it was found that, suprise -- the innovations were mainly in labeling. Yes, labeling R & D is vital in the frontline against disease..

"New Medicines Seldom Contain Anything New, Study Finds


Two-thirds of the drugs approved from 1989 to 2000 were modified versions of existing drugs or even identical to those already on the market, rather than truly new medicines, according to a new study.
"The report also said that most of the increased spending on new prescription drugs was on products that the Food and Drug Administration had determined did not provide significant benefits over those already on the market."

But how about those remarkable drug breakthroughs, the gentle reader is asking? How about the technological breakthroughs that brought us Clarinex and Sarafem? Sorry, gentle reader:

"Clarinex, an allergy drug, is a reformulation of Claritin. Sarafem, for premenstrual irritability, is the same drug as Prozac but has been renamed and repackaged in capsules of pink and lavender."

Of course, Big Pharma has a response to these outrageous allegations:

"The drug industry's trade group, the Pharmaceutical Research and Manufacturers of America, criticized the study yesterday, saying that it was "flawed and misguided."

"Richard I. Smith, vice president for policy and research at the group, said that even if a medicine was similar to one already on the market, it could still offer many benefits to patients. For example, he said, even though there are several similar drugs that fight depression � including Prozac, Paxil and Zoloft � many patients may not respond to one medicine but will to another."

There you go -- isn't that reason enough to protect the monopolistic hold of big pharma on all those drugs out there that they have spent their life blood, bet the farm, and sold their children in order to develop?

We mentioned Clinton's head of the Patent and Trademark commission, Bruce Lehman. Interestingly, he has followed the Clintonoid logic of selling what soul he might have had in 1968 for one brief second listening to Purple Haze in whatever vile Ivy League dorm he was rooming in to whatever vile industry would have it, founding a non-profit shill for Hollywood and the drug lords, the International Intellectual Property Institute. Here he is in heart rending testimony before Congress pleading with those bad boys to extend to Pfizer, to Merck, to all those suffering little piggies, the same, well, the same protection the computer companies (due to Lehman's stint at the Patent Office) enjoy:

"As I understand these issues, the task currently facing Congress is to find a way to regularize the process of enacting patent-specific term restoration legislation. Central to this task is to develop a system that is fair to the public and patent holders. Certainly, to shorten arbitrarily effective patent term for one of the industries whose innovations have the greatest public benefits � the pharmaceutical industry � is unfair, and discourages investment in those industries. A brief comparison of the ability of American innovation-based companies to attract funding in U.S. capital markets will underscore my point. At the present time, innovators in the computer components and software industries receive full twenty (20) year patent protection for inventions which require far less capital and involve far less risk than is the case in pharmaceutical innovation. Since most patents issue after about two years� examining time, these innovators are receiving 18 years of effective patent exclusivity. Is it no wonder that companies producing very important, but far from life saving or disease-curing products, attract market value and investment capital on a scale an order of magnitude beyond that of pharmaceutical and biotech companies? "

Ah, Bruce, this is more tear jerking than Imitation of Life! Douglas Sirk never knew, never KNEW, the sorrows of the successful pharma co -- always anxious as a debutante, wanting the best, the best for us -- wanting to cure our pattern baldness, our erectile dysfunction (and not, say, our malaria, sorry - the average malaria victim is, after all, a little dusky, as they like to say). But somehow, as we finished Bruce's testimony in a most lachrymose state, we went on to read this little disquisition, by Public Citizen, on the financial compensations accorded to the Mercks and the Pfizers, and our tears miraculously dried:

"In a year that saw a drop in employment rates, a plunge in the stock market and symbols of America s economy literally come crashing down, the pharmaceutical industry continued its reign as the most profitable industry in the annual Fortune 500 list.

While the overall profits of Fortune 500 companies declined by 53 percent the second deepest dive in profits the Fortune 500 has taken in its 47 years the top 10 U.S. drug makers increased profits by 33 percent.Collectively, the 10 drug companies in the Fortune 500 topped all three of the magazine s measures of profitability in 2001, according to Fortune magazine s annual analysis of America s largest companies."

The Public Citizen article also picks apart the rather rotten premises of a Tufts Center for the Study of Drug Development study that was issued, to much fanfare, in November 2001. The study put the "average R&D cost for each new drug brought to market at $802 million." Amazing, horrendous, and no wonder the poor pharma companies are trying to make money corrupting congress with hollow intellectual shills and relabeling products, you say. But in PC's estimation, there are a few things wrong with the Tufts study.

One thing is that the study excluded, right off, any R & D that was partly funded by the government. So what we are talking about here is what Libby used to do in 1968. But sure, some pharma cos. do bypass government financing. PC also discovered that the numbers in the Tufts study are, uh, sorta theoretical. In a deliciously comic passage, done completely deadpan, PC goes after the author of the study, one Joseph A. DiMasi:

"The second major flaw of the Tufts Center study is that it exaggerates the actual R&D expenditures for its sample of drugs. Specifically, the new Tufts Center estimate of $802 million includes significant expenses that are tax deductible and theoretical costs that drug companies don t actually incur. For example, roughly half of DiMasi s estimate ($399 million) is the "opportunity cost of capital" a theoretical calculation of what R&D expenditures might be worth if they were invested elsewhere. DiMasi calculated actual out-of-pocket R&D costs for drugs in the study at $403 million per new drug."

The most interesting thing about patent law as it applies to big pharma is how big pharma has managed to gather bunches of conservative intellectuals, the ones that like to talk about the wonders of competition, to propagandize for government protected monopoly in the name of bogus "property rights." There's an old scorecard of who, within the power elite that governs us, has sucked the drug company tit, brought to us by the Consumer Project on Technology. Turns out there's a lot of little porkers on the list. Check it out! Augustan England had its rotten boroughs -- we have our power elite. Lucky England!

Tuesday, May 28, 2002


The magic of the market place in the hands of the magicians

LI has the long, grudge-laden memory you'd expect from a disappointed loner and potential assassin. Meaning I review for a living. But nothing has tickled us so much, in the hours of bile that precede dawn, as the news about the energy markets. For if, like me, you were reading the biz press in the nineties, the Daniel Yergin crowd, the Larry Summers crowd, well it just seemed super-evident that when we give power to the power companies, a veritable cultural renaissance would ensue, a happy coordination of supply and demand that would reward stockholder and consumer alike!

It was bliss to be a free trade ideologue in those days. The epicenter is still the Cambridge Energy Research Associates, a think tank associated with Daniel Yergin. The think tank has issued a report that recommends ... further deregulation! Of course, with 'structure" this time, maestro.

�The power business in the U.S. is too important to continue to restructure on a trial-and-error basis. Pragmatism should prevail over experimentation in power market design,� said Francis X. Shields, Accenture, Partner in the Competitive Energy Markets practice. �The focus should be on markets that do work, not those that do not�.
�The power industry is at the crossroads of three paths: it can continue to muddle along the path of experimental deregulation, backtrack to comprehensive regulation, or move forward to power markets that work,� Shields said. �The United States needs to avoid slipping back to the �devil it knows� � comprehensive regulation. A move forward requires accepting that power markets are complex, unlikely to evolve on their own accord, and need structure to work properly.�

And what does it mean, this "needing of structure"? We like CERA's last recommendations best:

"Coordinate wholesale and retail transitions � Big bang deregulations are too risky in an industry as complex as electric power. In moving to wholesale markets, vesting contracts that expire gradually over the first years of the market to provide time for participants to move up the learning curve. Once wholesale markets are in place (which may include large industrial and commercial customers), retail markets should be opened as quickly as possible, but in phases to reduce the technical stress on the system. The first phase can include large industrial and commercial customers participating at the opening of the wholesale market.

Minimize distortions of market price signals � Price caps have the effect of distorting economic activity in any market. If wholesale price caps exist in any form, they should be set above the highest possible incremental cost of production. Similarly, price freezes at the retail level should be thawed in order to reconnect demand to the market. Prices need to convey information clearly in order to coordinate economic activity in a market. Governmental public policy objectives -- such as fuel mix, rural cross-subsidization, obligation to serve and low income initiatives � should be kept independent of the spot and forward trading mechanisms in the wholesale market, and be clearly identified as separate charges on consumers bills in the retail market."

Those transitions can be tough, especially when dealing with large scale customers, like businesses. So you can always lay off costs on your small, atomized customers -- let's call them residences. And then, of course, it is very important not to have to deal with any price curbs that might impede this kind of gouging. We love it, we love it...

We especially love the gobbledygook about prices as information. This might be of interest to Dynegy, Reliant or CMS. The CEO of Dynegy, Chuck Watson resigned today, in light of revelations about, well, chatter on the price party line. Chuck has had a wild ride since December -- buying and then unbuying Enron, getting touted in a Forbes cover story and now getting dumped by the board:

Watson was the second CEO of an energy trading company to resign in less than a week amid federal inquiries into simultaneous power swaps between energy traders that artificially boosted trading volume and, in some cases, reported revenue. William T. McCormick Jr., chairman and chief executive of CMS Energy Corp., announced his resignation Friday, less than two weeks after the company admitted conducting energy trades it used to falsely inflate revenue by more than $4.4 billion.

The swaps, dubbed "round-trip trades," involve simultaneous swaps of electric power for the same price and have been questioned by the Federal Energy Regulatory Commission and the Securities and Exchange Commission. Dynegy, a one-time suitor of bankrupt Enron Corp., disclosed earlier this month that the SEC is looking into similar trades made by the company last fall. Dynegy said it conducted the trades to test its system and that they didn't yield any profits for Dynegy or its trading partner. "

Somehow, I have a problem trusting the word of an energy trading company about what does and does not constitute profit. Dynegy had a little problem with that category itself, as well as with the preserving, with the appropriate sacred rites, the holy nature of the information-price dyad, according to a Reuters report last month:

"Dynegy used an arrangement called Project Alpha to address a growing gap between cash flow and net income and to cut its tax bill, the Wall Street Journal reported on Wednesday.

Dynegy officials told the Journal that Project Alpha was aimed at guaranteeing a stable source of gas.

The newspaper report said Dynegy created a partnership that entered into a five-year gas-trading contract with a special-purpose company. During the first nine months of the contract, the partnership bought gas at below-market prices, yielding profits; during the remainder of the contract, the partnership paid above-market prices, producing losses.

Dynegy used the losses to narrow the gap between its cash flow and net income and to reduce its taxes, according to the report.

The Economist, a magazine that has bought its ticket for the the privatization ideology and never looked back, has an interestingly skewed story about the appalling dishonesty -- I mean, the financial innovations -- of the power brokers and their ilk.

"EVER since Gray Davis, governor of California, locked his taxpayers into exorbitantly expensive, long-term electricity contracts at the height of California's energy crisis, his staff have worked tirelessly to pin the blame on somebody else. The collapse of Enron helped, in a general way, to divert attention. Until recently, however, the energy trader's bankruptcy had given little impetus to Mr Davis's allegations that energy traders had fleeced California by illegally manipulating energy prices. Now Mr Davis has found succour at last. Two new regulatory investigations and collapsing investor confidence have left the industry flat on its back.

On May 13th, Kaplan Fox & Kilsheimer and Wolf Popper, two law firms, filed suit in San Francisco against a number of energy suppliers on behalf of Californian taxpayers. The suit alleges that long-term power contracts have forced consumers to pay $9.1 billion more for energy than they would have done at �proper� market rates, and that over the next ten years the gap will be even bigger. "

Talk about an odd way to slip in a fact inconvenient to your mindset. Or a set of facts, a whole world of facts.

Lets sum it up and get on to some real work. When the magicians are minding the magic acts, expect tricks. Or as My Life with the Thrill Kill Kult once asked, what do you do when "no one's there to spy on you?" Why, you trade gas at below market prices, mislabel the transactions for tax purposes, and make it up by trading at above market prices, thus conveniently benchmarking for further trades, that's what you do! It's just business.

Elia meets Karl Marx at the South Sea House

    When Charles Lamb, a scholarship boy at Christ’s Hospital, was fifteen, one of his patrons, Thomas Coventry, had a discussion with a...