Friday, June 28, 2002


"...the faces change back to black and white cartoon old men, obscure members of the cosmopolitan night." -- Jim Carroll, The Basketball Diaries

Unfortunately, the cartoon old men and one woman LI has to talk about this morning are less obscure than they should be. The cosmopolitan night they belong to is called the Supreme Court, and they are called judges. These sad-sacks are up to their usual tricks -- allowing, on the one hand, the state to practice its most egregious tyrannies on the subaltern population of the young, the poor, and the feckless, the clipped angels among the faceless many, while on the other hand chipping away at the limitations placed, however imperfectly, on the natural malefactors of great wealth, aka entrenched corporate power.

A ruling yesterday is typical of the Court's absolute decrepitude. The court ruled that schools could arbitrarily order drug tests -- in other words, have access to the bodily chemical infrastructure of -- students. And so, a right that inheres in the governance of the modern nation-state -- the right to be educated -- is turned into a gun against the educated. Here's a couple of grafs in the NYT:

"In emphasizing the "custodial responsibilities" of a public school system toward its students, rather than the details of how the program was organized, the majority opinion by Justice Clarence Thomas appeared to encompass random drug testing of an entire student population.

But one member of the majority, Justice Stephen G. Breyer, who wrote a concurring opinion while also signing Justice Thomas's, said it was significant that the program in the Tecumseh, Okla., school district "preserves an option for a conscientious objector" by limiting the scope to students in extracurricular activities. A student "can refuse testing while paying a price (nonparticipation) that is serious, but less severe than expulsion," Justice Breyer said.Students who are found to be using drugs at Tecumseh High School are barred from their activities and referred for counseling, but are not otherwise disciplined or reported to the police. The policy was challenged by Lindsay Earls, an honor student active in several activities who is now attending Dartmouth College."

There is the outrage, this band of carcasses with their martinis at home, their drinks for dinner, pissing on the kids, and there is its conjunction with the greater outrage, the continuing war on drugs. There seems to be a misperception out there that the war has moderated on, at least, the most common of those drugs, marijuana. Wrong, captain. Drugwar lists some very interesting stats on its site:

"In 2000, 46.5 percent of the 1,579,566 total arrests for drug abuse violations were for marijuana -- a total of 734,497. Of those, 646,042 people were arrested for possession alone. This is an increase over 1999, when a total of 704,812 Americans were arrested for marijuana offenses, of which 620,541 were for possession alone."

LI must admit, the left is not the counterforce it should be to this incredible and sick machinery. The best arguments against the day, the year, the decade, the two decades, the half century of infamy encoded in 704,812 marijuana arrests have been flung out by libertarians. James Bovard has a nice article on the Future of Freedom site. He is especially acidic about the current administration's cute idea of linking one losing war -- on drugs -- to its current idee fixe -- a permanent war on terrorism. Bovard points out that the war on drugs, unlike the war on terrorism, is a war on the laws of the market:

"But how will the DEA change the laws of agricultural economics that encourage farmers to grow crops disapproved by the U.S. government? Afghan farmers can easily earn ten times more from growing opium than from growing wheat or other crops. The effort to persuade Third World farmers to abandon illicit crops will be about as successful as trying to persuade stockbrokers and law-firm partners to abandon their high-paid jobs, move to Mexico, and scratch out a livelihood assembling toilet brushes for sale at Wal-Mart.

"If the Bush administration is really serious about defunding terrorist groups, it should summon the courage to look at drug laws themselves. The falling price of cocaine and heroin in recent decades is proof of the failure of drug warriors to close the borders. Federal officials have admitted that the government fails to interdict up to 90 percent of the drugs being smuggled into the United States. This failure rate is absolutely intolerable when illicit drugs finance terrorism. "

LI has a theory about how to look at state actions like banning products (marijuana, or handguns) or services (euthenasia, robbery, murder) should be seen within the framework of effective and ineffective regulation of markets. We should post that theory one of these days -- as far as we know, it is our original contribution to political philosophy.

Wednesday, June 26, 2002


Poor Business Week chose the wrong day to headline an optimistic forecast by a Morgan Stanley Investment "Strategist" Barton Biggs. As WorldCom basically takes itself off the field, here's what Briggs -- a man BW bills as usually "dour," in order to give credence to his pap - has to say:

"Since its 2000 peak, the Nasdaq has fallen as much as the Dow did from 1929 to 1932, notes Biggs. And it has dropped more than Japan's Nikkei index has since its high in 1989, he adds. "The pattern of the equity markets since last summer has been classic," says Biggs, in foretelling that a double bottom is about to happen -- or has already begun.

A VIGOROUS RALLY. Given all these, "we have increased our exposure to equities," says Biggs. Assuming the September lows hold, as he expects, rallies of 15% to 20% are conceivable in the broad indexes in the U.S. and Europe, predicts Biggs.

In the U.S., he forecasts that over the short term, the Dow will climb to between 10,800 and 11,000, from 9,380 currently."

Biggs, and others of his ilk, gain income "strategizing' by doing such dumb and dumber things as bringing up comparisons between the Nasdaq and the Nikkei, as if these comparisons were some kind of argument. There might or might not be reasons to think, hey, these are comparable situations. But comparison itself, without analysis, is blind, deaf and dumb. And so would be any investor who listened to someone like Biggs. One could easily envision the Dow hitting 10,800, but not for any of the reasons given by Biggs. And, right now, one can as easily envision the stockmarket version of the gutter ball -- a constant trough, between 9 and 10 thou.

Here's the Washington Post, quoting a less dour, and more paniced, investment "strategist" about the current market:

"At Merrill Lynch, meanwhile, Bernstein has warned clients of a "considerable near term risk" that could see a further 10 to 15 percent decline in the major stock indexes. With the stocks of the S&P 500 still selling at 24 times their expected earnings next year, he said, "our view is that the market, even at this level, is still quite speculative." The historic average is around 15.

"The implications of further declines in stock prices are anything but positive for the broader economy. Although this doesn't suggest the economy will slip back into recession again, forecaster Sinai sees little hope that the economy can grow at the 5 and 6 percent annual rates normally associated with economic recoveries. His forecasts calls for growth rates at half that."

Business magazine circulation is way off this year. And headlines like BW's are the reason. As the biz media became a pipeline for the uplifting crap diffused by glorified bucket shop salesmen, they lost credibility with their readers. Until they take a tougher approach, who is going to read them? A shrinking pool of suckers and pr men, that's who.

Reader's mirage

Limited Inc was alerted to Bradford DeLong's weblog site today, when we came upon some comment about comment De Long had made about a recent William Greider article. Here are De Long's remarks about Greider:

"William Greider, writing in the Nation, hopes for a depression in the United States--for this would "deflate" the "smug triumphalism of Bush's unilateralist war policy" and be "a good thing for world affairs, since Washington couldn't run roughshod over others. He believes that such a depression could be triggered by "... financial scandals" which would lead "overseas investors... to take their money home... the declining dollar... [to] fall sharply... credit... [to] become suddenly scarce, since our debtor-nation economy relies heavily on capital borrowed from abroad, and... trigger an ugly downdraft in the U.S. economy." And then "the fashionable boastfulness about America... would implode."

Going to the article, however, one quickly finds that Greider is not "hoping" for a depression in the United States. He does, however, hope that the smug triumphalism of Bush's unilateralist war policy is deflated. His point is that economic policies that Greider thinks are taking us to the brink of depression will have the ironic effect of making America look inward, as so deflate the etc., etc. But noting that one expects an unexpected outcome from a bad thing isn't the same as hoping for the bad thing. In fact, Greider clearly describes his hopes, which are what they have been for some time: a populist economic policy that would strenghten the regulation of the financial industry, aim at ameliorating the inequality of incomes in the country, and would rid the private sector of its current problems with corrupt accounting and bloated CEO salaries.

Now, Limited Inc thinks that Greider's goals are good. We do think he is missing the boat on the effects of depression: the idea that nation's turn inward when their economies collapse isn't borne out by anything in recent history. But De Long's reading of Greider is so outrageous that we were tempted to dismiss the man completely. That, however, would be a mistake. De Long has an excellent analysis of stock valuations on his site, pointing out (as LI has pointed out long ago, somewhere -- was it a review? or one of these damn posts?) that the stock market, by traditional standards, is still overvalued.

"-Few people recognize how far out of whack the stock market still is today.
-There is still a large disconnect between current stock-market values and traditional valuation ratios relative to measures like earnings and dividends.
-Typically, over the last fifty years, stocks sell for about 30 times annual dividends and for about 18 times annual earnings.
-Today, however, stocks are selling for more than 30 times earnings, and more than 60 times dividends."

Usually, writers who notice this fact then become all alchemical about technical analysis, the bogus but influential school of analyzing stocks used by a certain truly reactionary species of contrarians. Actually, the traditional standard isn't the expression of natural law: it is rather the expression of accumulated expectations, given a history of productivity gains, inflation, competition with other investment instruments, etc. The New Economy model basically boiled down to the argument that current valuations are rational. The rationality goes something like this: the technologically abetted gains in productivity, and the instances of metastizing growth (for instance, among tech companies from the eighties to the late nineties) has made the 30 times earnings, and 60 times dividend metric more reasonable. This argument also includes, as a subargument, the sub voce dismissal of dividends as an archaic remnant of an earlier era of stock investment. This argument points to the increasing tendency of investors to buy stocks specifically to sell them in the short term, rather than benefit from splits and dividends in the long term.

While De long doesn't go into the ins and outs, here, I have to give him credit for laying out the issue. So -- I can't totally dismiss him as a reactionary slug. He's too smart a reactionary slug to really believe what he wrote about Greider -- it was, I think, an immediate reaction to his impression of the article. LI knows that situation: sometimes, the impression of what one reads is different than what one has really read. Call it: reader's mirage.

Monday, June 24, 2002

In Beyond Good and Evil, Nietzsche wrote that the various schools of philosophy can be reduced, in the end, to the �blind and involuntary memoire� of certain philosophers � thus, in one of the great ironies of intellectual history, surrendering the discipline to the corruptions of vulgarity. The leveling impulse, of which Nietzsche made himself the greatest foe, insinuated itself into his method at its moment of greatest acuteness. And, after all, what is this vulgarity, this personalization of the abstract, but one of the masks of nihilism?

Granting our disagreement with Nietzsche�s disingenuous equation between �the life� and �the thought�, LI thinks it has a certain pertinence, transposed to the the mystery story. A mystery, from our perspective, is nothing more than the hidden autobiography of its investigator.

And this, reader, gets us to the self-infatuated self who is writing to you here. LI has a habit, at least on this site, of transforming every text we reference into a mystery. Under every text we discern -- whether due to our paranoia or our acuteness - the hidden labyrinth in which motive, like the Minotaur, lurks. This is how we hook up with Nietzsche -- because we take that motive to be death drive of nihilism, the leveling impulse to which, eventually, all that is beautiful and alive is sacrificed. We take this personally. We know why we are alone in this culture. We know that solitude is a process of attrition. We know that LI is becoming, daily, a little more lunar.

Yet still we venture into it: the news, the think piece, the movie, the web site. Our own implication in the labyrinth is a performative act � by entering it, we co-create it. We connive at it. If we could leave it, if we weren�t continually wasted in the center, we would destroy it. If mystery is autobiography, its solution is the transcendence of the self. So far, this is not a stage we've ever achieved. Narcissism, narcissism every day.

So: these are the rules of the site. The irrepressible autobiographical impulse rules here, and the reader knows to watch for the silvery, ephemeral flash of experience, which ultimately governs the supposedly neutral instrumentation of argument.

Everything, however, depends on our ability to play this game with a modicum of competence. Lately, we have more and more reason to suspect that we have lost that ability. While our writing becomes more and more convoluted, its justification becomes more and more remote. Why are we doing this? We�ve been reminded of this by M., a friend of ours who lives in Mexico. M. is a highly intelligent, well read woman. If we have an ideal reader in mind when we write, it has to be M., or someone like her. Our last posts were written with a certain joy. We�ve become so bitter that there is a liberation in it: the acte gratuit of the court jester hanging himself. We thought M. would appreciate this, so we put together the two posts on Angola and sent it to her.

Her reply was crushing. We aren�t going to reprint the entire thing, but here is how M. begins:

�Who are the readers of your posts? Do they all have PhD's in international relations? I am afraid I'm more like the beast with the calm regard... I don't know the names, I don't know the people... I'm glad to read your posts but they send my head reeling.�

Our failures have ceased to amuse. Why are we writing this?
I can�t go on. I�ll go on.

Southern California Death Trip

    “He was kind but he changed and I killed him,” reads the caption of the photo of a woman in an old tabloid. She was headed to ...