Remora
Black and conservative...
There's a story in the NYT Magazine about Glenn Loury, the economist and former totem black conservative -- a position that has now fallen to Shelby Steele (and no, Limited Inc. means totem, not token). Almost all stories about Glenn Loury begin by a cursory survey of his ideas before jettisoning them for a more gossipy, and perhaps interesting, survey of his life. It is a life that Ellison, or Leon Forrest, might have written, literature loose in the wild hinterlands of America -- or perhaps not so wild, since Loury's lifeline goes from the working class South Side of Chicago to the Reaganite high of the 80s. Recently, Loury has defected from the conservative movement, even resigning from the American Enterprise Institute after they sponsored Dinesh D'Souza's book on race. Fair has this appraisal of the D'Souza book:
"... D�Souza advocates legalizing racial discrimination. "What we need is a long-term strategy that holds the government to a rigorous standard of race neutrality," he wrote in The End of Racism, "while allowing private actors to be free to discriminate as they wish." In D�Souza�s vision, "individuals and companies would be allowed to discriminate in private transactions such as renting an apartment or hiring for a job." Lest there be any doubt as to his intent, D�Souza states: "Am I calling for the repeal of the Civil Rights Act of 1964? Actually, yes."
Here's a graf from the the NYT Mag article that shows Columbus discovering the world is round:
"In a column called ''What's Wrong With the Right,'' published in the January-February 1996 issue of The American Enterprise journal, Loury wrote that while ''liberal methods'' on questions of race were certainly flawed, ''liberals sought to heal the rift in our body politic engendered by the institution of chattel slavery, and their goal of securing racial justice in America was, and is, a noble one. I cannot say with confidence that conservatism as a movement is much concerned to pursue that goal.''
When the Loury-D'Souza thrilla in D.C. was playing out, Paul Krugman wrote a sympathetic column about Loury in Slate. Krugman describes it thusly:
"But at some point Loury made the discovery that eventually confronts every honest intellectual who gets drawn into the political arena: The enemies of your enemies are not necessarily your friends. The Glenn Loury who wrote that 1976 thesis was not a conservative. He criticized the simplistic anti-racism of the liberal establishment because he wanted society to tackle the real problems, not because he wanted it to stand aside. His seeming allies on the right, however, turned out to be interested only in the critique, not in the next step. (According to Loury, "When I told one gathering of conservatives that their seeming hostility to every social program smacks of indifference to the poor, I was told that a surgeon cannot properly be said to have no concern for a terminally ill patient simply because he had moved on to the next case.") Loury found out that the apparent regard for his ideas by conservative intellectuals was entirely conditional. Any questioning of conservative orthodoxy was viewed as an act of betrayal, giving aid and comfort to the liberal enemy. It was the loyalty test all over again."
There is something very funny about the idea that intellectuals are above a loyalty test. Of course they aren't. Krugman, an exemplary Ivy League herd man who once had the audacity to question the free trade orthodoxy and retreated, precipitantly, from his own work once it got denounced by the right people, should know better. But the Krugman article does adumbrate Loury's original thesis better than the NYT Mag article, and that thesis is definitely interesting. Robert Sobel, the business history writer, made a point similar to Loury's in his last book, The Great Boom, when he described the foundations of the great American middle class in the post WWII period. The wealth of the great middle is founded, Sobel claims, in large part on property -- namely, housing. This is as true today as it was in 1952, despite 401K plans and other investments -- when you strip the wealth of your average bourgois down to its skivvies, you find an asset -- the great American home. Well, for thirty some years, that market was simply denied to blacks. Loury's original point, if Krugman is to be believed, is that past descrimination has effects on the present racial composition of wealth. Loury's sub-point is that the limit to Afro-American achievement is currently found in black behavior, rather than white racism. This point doesn't really follow, however, from his main thesis. It defines racism too narrowly, as merely a moral fact. It can't be emphasized enough that racism isn't simply unmotivated malevolence, a wallowing in hatred done by white men in KKK regalia. Rather, it plays a social function. It operates to give a definite economic lift to a certain segment of the populace. When that populace has incorporated its advantage over time, the advantage of overt racism diminishes. What guarded the white middle class in 1950 from competition can be cast off, as an unnecessary luxury, by that class' descendents, because the competitive edge has already been won. And of course I'm not even going to talk about the upper 5 percentile, the racial composition of which can be studied by looking at the pictures in Forbes magazines. If you see a picture of a black man or woman, it is almost always either a., an ad, or b., a picture of a grateful worker or manager posed with an indulgent CEO. What can't be questioned, once the hegemony of anti-racism as a feeling, rather than an economic factor, has been achieved, is the legitimacy of present gains, even though it has been admitted that those gains were the results of illegitimate means. In essence, you get the best of both worlds -- having renounced the devil of racism, one can feel that equal opportunity reigns, while at the same time one can enjoy the devil's bounty, in the form of ten generations of greater opportunity. As a game theoretical device, White America has played an unconsciously brilliant strategy. One even Krugman should appreciate.
Monday, January 21, 2002
Saturday, January 19, 2002
Remora
Adam Smith has presciently analyzed the peculiar psychological defects of Limited Inc. in this passage in The Theory of Moral Sentiments, concerning passions that derive from the imagination:
"Even of the passions derived from the imagination, those which take their origin from a peculiar turn or habit it has acquired, though they may be acknowledged to be perfectly natural, are, however, but little sympathized with. The imaginations of mankind, not having acquired that particular turn, cannot enter into them; and such passions, though they may be allowed to be almost unavoidable in some part of life, are always, in some measure, ridiculous. This is the case with that strong attachment which naturally grows up between two persons of different sexes, who have long fixed their thoughts upon one another. Our imagination not having run in the same channel with that of the lover, we cannot enter into the eagerness of his emotions. If our friend has been injured, we readily sympathize with his resentment, and grow angry with the very person with whom he is angry. If he has received a benefit, we readily enter into his gratitude, and have a very high sense of the merit of his benefactor. But if he is in love, though we may think his passion just as reasonable as any of the kind, yet we never think ourselves bound to conceive a passion of the same kind, and for the same person for whom he has conceived it. The passion appears to every body, but the man who feels it, entirely disproportioned to the value of the object; and love, though it is pardoned in a certain age because we know it is natural, is always laughed at, because we cannot enter into it. All serious and strong expressions of it appear ridiculous to a third person; and though a lover may be good company to his mistress, he is so to nobody else."
This must explain Limited Inc.'s obsession with the Enron story, which has engrossed our mind to the detriment of our pocketbook this week. Instead of seeking the easy money of book reviewing -- ah, reader, you can't imagine the veritable Golconda awaiting the lucky reviewer of Blah Blah Blah, the novel -- Limited Inc has been morosely pursuing an article about Enron's business press fan club, and the myth of efficiency. This article, once finished, will be shopped around hopefully to such outlets as Mother Jones, only to be rejected out of hand -- we foresee this already. But, in entire disproportion to the value of our contribution to the national culture (which consists entirely in summarizing forgettable plot lines), we are going to run in the channel of our obsession with with the same grim vigor Ahab once devoted to revenging his lost leg.
In any case, Andersen Accounting is becoming the (hopefully first) collateral casualty in this affair. In much the same way the Taliban fell when the US took action against Al Quaeda, Andersen is being rocked by its long collusion with Kenny Lay's grand scheme to make Enron, in effect, a giant energy derivatives hedge fund. Since Enron was a public corporation, such a scheme is illegal. But illegality, as any respectable contributor to political parties know, is in the eye of the beholder. Or rather, a particular set of eyes -- those belonging to the lowest stratum of our society. Of course, you know who I mean. I mean Congressmen, Senators, and members of the Executive branch. The Times this morning has an article about Anderson's reach in Washington:
Auditing Firms Gaining Muscle in Washington
By STEPHEN LABATON
Here are two grafs:
At the height of the fight between the industry and Mr. Levitt in the second half of 2000, all the Big Five accounting firms sharply increased their political donations and spending on lobbying. Andersen doubled its lobbying budget, to $1.6 million.
The investment paid off.
Among other proposals, Mr. Levitt sought to prohibit an accounting firm from performing both accounting functions and consulting services for the same company. That proposal threatened billions of dollars in revenues at the Big Five firms, and their defeat of the proposals in 2000 illustrated the industry's growing influence in Washington. Had the Levitt proposals been in place, it would not have been possible for
Andersen to bill Enron $27 million for consulting services last year while also billing $25 million for audits
There is also an article about Andersen's largess on the Public I site. This article names names.
"Last year, SEC Chairman Arthur Levitt, Jr. proposed a rule that would have restricted the amount of non-audit-related consulting work that companies like Arthur Andersen and other Big Five accounting firms could do for their audit clients. Andersen opposed the rule, and hired the powerful lobby shop of Clark & Weinstock to argue its case.
Among the Clark & Weinstock lobbyists working Capitol Hill on behalf of Andersen were former congressman Vic Fazio (D-Calif.); Jim Matthews, former chief of staff to Rep. Thomas Manton (D-N.Y.); and Anne Urban, formerly Sen. Robert Kerrey's (D-Neb.) legislative director.
Under pressure from the Big Five, the Commission ultimately adopted a weak version of the rule that favored the accounting industry and left their consulting services virtually untouched. The rule required only the disclosure of how much money the accounting firm earned for consulting services from each company it audited. No limits were placed on the amount of money an audit firm could earn.'
Both Public I and the NYT share the idea that campaign finance reform would cure us of a corrupt legislature; a legislature that was forced to forego bribery would then tackle reforming the regulation of the auditing industry with its eyes righteously peeled for the the public good alone.
Limited Inc grants the argument against legalized bribery. But we have strong doubts about the political reach of campaign finance reform. The reason the big five auditing firms can basically run over the SEC is that there is no political base for reigning in the big five, or for reigning in Enron. Populism has abandoned its war against Wall Street. A feature of the American political scene since the 1870s, it dried up in the 1980s. It is now the common wisdom that Americans don't get 'excited' about such things as regulating auditors. No, Americans supposedly get more excited about the list of Airline hostesses in Gary Condit's little black book.
But this consensus is oddly ahistorical. If the farmers of Nebraska, in 1900, could get passionate about specie and the intricacy of gold-backed, versus silver-backed, currency, are their descendents, in Southern California, really so degenerate as to not understand or care about financial markets? On the contrary, I think they understand very well, when they want to. Certainly they are as affected by the allowance of gross corporate corruption as their great-grandpas were by manipulation of railroad stock. But the stomach for class warfare -- and make no mistake, reader, Wall Street has never been reformed without a strong whiff of gunpowder in the air -- has gone out of both parties. Does anybody seriously see the pitiable Joseph Lieberman, who is currently leading the charge against Enron in the Senate, as a potential Danton? He is the most piddling William Jennings Bryan ever thrown up by the centrist Democrats, making Limited Inc nostalgic for Dukakis, for Christ's sake.
The last sad remnant of populism, in fact, resides in the Republican party's intermittent appeals to Christian fundamentalism. I could imagine an opponent of Billy Tauzin making a good case with the voters that the man is owned by the companies he is supposedly investigating. I could imagine such a case catching on. But the case would have to overcome two formidable obstacles. One, the media is resolutely opposed to class warfare. Except for the tepid admonitions of editorialists to remember the neediest on December 25th, the press and tv aren't simply bribed -- they are literally owned and run by corporations, and the law among them is, do not stir up class warfare. Period. The other obstacle is that facing any group which has suffered a string of defeats. The audience for populism is defeatist. Street realism very wisely counsels cutting your losses -- for pursuing your losses very quickly takes you over the edge. It is that realism that keeps most people from the ballot box. Apathy is a wise choice when there are no real choices.
Adam Smith has presciently analyzed the peculiar psychological defects of Limited Inc. in this passage in The Theory of Moral Sentiments, concerning passions that derive from the imagination:
"Even of the passions derived from the imagination, those which take their origin from a peculiar turn or habit it has acquired, though they may be acknowledged to be perfectly natural, are, however, but little sympathized with. The imaginations of mankind, not having acquired that particular turn, cannot enter into them; and such passions, though they may be allowed to be almost unavoidable in some part of life, are always, in some measure, ridiculous. This is the case with that strong attachment which naturally grows up between two persons of different sexes, who have long fixed their thoughts upon one another. Our imagination not having run in the same channel with that of the lover, we cannot enter into the eagerness of his emotions. If our friend has been injured, we readily sympathize with his resentment, and grow angry with the very person with whom he is angry. If he has received a benefit, we readily enter into his gratitude, and have a very high sense of the merit of his benefactor. But if he is in love, though we may think his passion just as reasonable as any of the kind, yet we never think ourselves bound to conceive a passion of the same kind, and for the same person for whom he has conceived it. The passion appears to every body, but the man who feels it, entirely disproportioned to the value of the object; and love, though it is pardoned in a certain age because we know it is natural, is always laughed at, because we cannot enter into it. All serious and strong expressions of it appear ridiculous to a third person; and though a lover may be good company to his mistress, he is so to nobody else."
This must explain Limited Inc.'s obsession with the Enron story, which has engrossed our mind to the detriment of our pocketbook this week. Instead of seeking the easy money of book reviewing -- ah, reader, you can't imagine the veritable Golconda awaiting the lucky reviewer of Blah Blah Blah, the novel -- Limited Inc has been morosely pursuing an article about Enron's business press fan club, and the myth of efficiency. This article, once finished, will be shopped around hopefully to such outlets as Mother Jones, only to be rejected out of hand -- we foresee this already. But, in entire disproportion to the value of our contribution to the national culture (which consists entirely in summarizing forgettable plot lines), we are going to run in the channel of our obsession with with the same grim vigor Ahab once devoted to revenging his lost leg.
In any case, Andersen Accounting is becoming the (hopefully first) collateral casualty in this affair. In much the same way the Taliban fell when the US took action against Al Quaeda, Andersen is being rocked by its long collusion with Kenny Lay's grand scheme to make Enron, in effect, a giant energy derivatives hedge fund. Since Enron was a public corporation, such a scheme is illegal. But illegality, as any respectable contributor to political parties know, is in the eye of the beholder. Or rather, a particular set of eyes -- those belonging to the lowest stratum of our society. Of course, you know who I mean. I mean Congressmen, Senators, and members of the Executive branch. The Times this morning has an article about Anderson's reach in Washington:
Auditing Firms Gaining Muscle in Washington
By STEPHEN LABATON
Here are two grafs:
At the height of the fight between the industry and Mr. Levitt in the second half of 2000, all the Big Five accounting firms sharply increased their political donations and spending on lobbying. Andersen doubled its lobbying budget, to $1.6 million.
The investment paid off.
Among other proposals, Mr. Levitt sought to prohibit an accounting firm from performing both accounting functions and consulting services for the same company. That proposal threatened billions of dollars in revenues at the Big Five firms, and their defeat of the proposals in 2000 illustrated the industry's growing influence in Washington. Had the Levitt proposals been in place, it would not have been possible for
Andersen to bill Enron $27 million for consulting services last year while also billing $25 million for audits
There is also an article about Andersen's largess on the Public I site. This article names names.
"Last year, SEC Chairman Arthur Levitt, Jr. proposed a rule that would have restricted the amount of non-audit-related consulting work that companies like Arthur Andersen and other Big Five accounting firms could do for their audit clients. Andersen opposed the rule, and hired the powerful lobby shop of Clark & Weinstock to argue its case.
Among the Clark & Weinstock lobbyists working Capitol Hill on behalf of Andersen were former congressman Vic Fazio (D-Calif.); Jim Matthews, former chief of staff to Rep. Thomas Manton (D-N.Y.); and Anne Urban, formerly Sen. Robert Kerrey's (D-Neb.) legislative director.
Under pressure from the Big Five, the Commission ultimately adopted a weak version of the rule that favored the accounting industry and left their consulting services virtually untouched. The rule required only the disclosure of how much money the accounting firm earned for consulting services from each company it audited. No limits were placed on the amount of money an audit firm could earn.'
Both Public I and the NYT share the idea that campaign finance reform would cure us of a corrupt legislature; a legislature that was forced to forego bribery would then tackle reforming the regulation of the auditing industry with its eyes righteously peeled for the the public good alone.
Limited Inc grants the argument against legalized bribery. But we have strong doubts about the political reach of campaign finance reform. The reason the big five auditing firms can basically run over the SEC is that there is no political base for reigning in the big five, or for reigning in Enron. Populism has abandoned its war against Wall Street. A feature of the American political scene since the 1870s, it dried up in the 1980s. It is now the common wisdom that Americans don't get 'excited' about such things as regulating auditors. No, Americans supposedly get more excited about the list of Airline hostesses in Gary Condit's little black book.
But this consensus is oddly ahistorical. If the farmers of Nebraska, in 1900, could get passionate about specie and the intricacy of gold-backed, versus silver-backed, currency, are their descendents, in Southern California, really so degenerate as to not understand or care about financial markets? On the contrary, I think they understand very well, when they want to. Certainly they are as affected by the allowance of gross corporate corruption as their great-grandpas were by manipulation of railroad stock. But the stomach for class warfare -- and make no mistake, reader, Wall Street has never been reformed without a strong whiff of gunpowder in the air -- has gone out of both parties. Does anybody seriously see the pitiable Joseph Lieberman, who is currently leading the charge against Enron in the Senate, as a potential Danton? He is the most piddling William Jennings Bryan ever thrown up by the centrist Democrats, making Limited Inc nostalgic for Dukakis, for Christ's sake.
The last sad remnant of populism, in fact, resides in the Republican party's intermittent appeals to Christian fundamentalism. I could imagine an opponent of Billy Tauzin making a good case with the voters that the man is owned by the companies he is supposedly investigating. I could imagine such a case catching on. But the case would have to overcome two formidable obstacles. One, the media is resolutely opposed to class warfare. Except for the tepid admonitions of editorialists to remember the neediest on December 25th, the press and tv aren't simply bribed -- they are literally owned and run by corporations, and the law among them is, do not stir up class warfare. Period. The other obstacle is that facing any group which has suffered a string of defeats. The audience for populism is defeatist. Street realism very wisely counsels cutting your losses -- for pursuing your losses very quickly takes you over the edge. It is that realism that keeps most people from the ballot box. Apathy is a wise choice when there are no real choices.
Friday, January 18, 2002
Remora
In a previous post, Limited Inc had speculated about the triangle between point a, the provision of a bill passed in December, 2000, that exempted energy trading from oversite by the commodity futures commission, b., the Gramms (Mr. and Mrs.) support for the bill, and c., Senator Gramm's retirement.
Limited Inc. stands corrected by an article in the Times this morning. Doing the calculus of sleeziness in the Clinton era, one should always include the Clinton variable: that if something looks reactionary, pandering, against the public interest, and connected to big money, Clinton will probably be behind it. And so it turns out on this bill, which set in motion the events that blacked out California while the bandits made out like energy companies... uh, I mean, while the energy companies made out like bandits. Two explicatory grafs:
"...in the latter months of 2000, both Gramms were frustrating the company's Washington lobbyists. Senator Gramm, for reasons unrelated to Enron, was single- handedly blocking a futures trading bill the company had dearly prized. And Dr. Gramm had complicated the bill's prospects with a scathing critique of some rules being prepared by her former agency.
The issue was eventually resolved in the company's favor; Senator Gramm lifted his objections to the bill after calls from Clinton administration officials and industry executives, including Kenneth L. Lay, Enron's chief executive, according to company officials and people involved in the bill. Once the bill became law the rules that Dr. Gramm opposed became unnecessary and were dropped."
In a previous post, Limited Inc had speculated about the triangle between point a, the provision of a bill passed in December, 2000, that exempted energy trading from oversite by the commodity futures commission, b., the Gramms (Mr. and Mrs.) support for the bill, and c., Senator Gramm's retirement.
Limited Inc. stands corrected by an article in the Times this morning. Doing the calculus of sleeziness in the Clinton era, one should always include the Clinton variable: that if something looks reactionary, pandering, against the public interest, and connected to big money, Clinton will probably be behind it. And so it turns out on this bill, which set in motion the events that blacked out California while the bandits made out like energy companies... uh, I mean, while the energy companies made out like bandits. Two explicatory grafs:
"...in the latter months of 2000, both Gramms were frustrating the company's Washington lobbyists. Senator Gramm, for reasons unrelated to Enron, was single- handedly blocking a futures trading bill the company had dearly prized. And Dr. Gramm had complicated the bill's prospects with a scathing critique of some rules being prepared by her former agency.
The issue was eventually resolved in the company's favor; Senator Gramm lifted his objections to the bill after calls from Clinton administration officials and industry executives, including Kenneth L. Lay, Enron's chief executive, according to company officials and people involved in the bill. Once the bill became law the rules that Dr. Gramm opposed became unnecessary and were dropped."
Thursday, January 17, 2002
Remora
Go when the going's good department
Perhaps now that Bushypoo has established himself as this generation's FDR, he should resign. That way, he'd not suffer the inevitable debilitating fall in polls and status that happens to all Bushes in office. The reason for that fall is that Bushes can only exist in a rare environment, one in which the air is constantly perfumed by millions of dollars. Usually that is no problem in the White House, where you can secretly confab with Ken Boy and co. on global warming and such, but sometimes a Bush is thrust out into the normal atmosphere -- especially when the Bush has to campaign, or meet with (ugh) environmentalists and those civil rights leaders -- and eventually the Bush starts to wilt and get all cranky.
As a monument to Bush idiocy, the NYT has a profile of SEC chairman Harvey Pitt today.
Here we have a fairly common specimen of the higher idiocy so typical of the nineties, when the word deregulation began to be confused with the word abracadabra. It should be said at the outset: regulation, or rules and norms, are going to emerge in any market situation. The question is who is going to make them, and how are they going to be enforced. If they are made by market makers -- if, for instance, Enron makes the rules about energy derivatives -- other market members are going to have to apply those rules, try to get around those rules, or cease existing in the market. The advantage of being a market maker consists in being able to make the rules. These rules can be formal, as in the rules the NYSE makes, or informal, as in the rules that emerge when banks invest in X company on the premise that X company will copy the rules of some successful Y company.
Now, deregulation as it applies to accounting entails ignoring that the rules are going to be made, and claiming that only the government makes rules. Error one. Error two consists of the ideological claim that government is always bad. This claim has become theological. In spite of the evidence that, for instance, publicly run power companies do a comparable or better job than private power companies (compare LA's public power company to Southern Edison, if you want immediate support for this claim), this is the conservative mantra. It has the same relationship to reality as the doctrine of original sin has to psychology: it magnifies an insight into an untruth. Combine these two errors and you get Harvey Pitt.
Lets say some exciting things about accounting, shall we?
Since accounting on the Ernst and Young level is not heavily competitive, this means that the five market makers basically decide what the rules are. And they obviously suck at it, for the good reason that rules that promote transparency are not necessarily rules that all of their clients want to see followed. Gresham's law, which says that bad money drives out good, applies to rules as well. So hey, guess what? This is where a neutral party, ie the gov, has a role. It establishes the ground rules for all parties. This is elementary Locke, but seems to have escaped the attention of the greedy deregulatory crowd.
Here are three grafs from the NYT article. Reading them, it is easy to see that the Bush years are going to be studded with Enrons. These people have that deadhead Texas wealth mindset, the kind that the Hunt brothers used to embody:
"Since his return to the agency last September, Mr. Pitt has articulated a broadly deregulatory agenda that he says is now more relevant than ever, but which his critics say may now be overshadowed by what is quickly turning into a major accounting and corporate scandal.
If anything, the critics say, in light of more than $60 billion that Enron shareholders lost, it is time not to reduce the liabilities of auditors and corporations, but to increase them.
The S.E.C. for months has been woefully short of staff at its senior level and now has only two commissioners, including Mr. Pitt, because the White House has failed to nominate other replacements. The other commissioner, Laura S. Unger, who is also a Republican, is serving even though her term has expired and she has announced her intention to leave shortly."
Go when the going's good department
Perhaps now that Bushypoo has established himself as this generation's FDR, he should resign. That way, he'd not suffer the inevitable debilitating fall in polls and status that happens to all Bushes in office. The reason for that fall is that Bushes can only exist in a rare environment, one in which the air is constantly perfumed by millions of dollars. Usually that is no problem in the White House, where you can secretly confab with Ken Boy and co. on global warming and such, but sometimes a Bush is thrust out into the normal atmosphere -- especially when the Bush has to campaign, or meet with (ugh) environmentalists and those civil rights leaders -- and eventually the Bush starts to wilt and get all cranky.
As a monument to Bush idiocy, the NYT has a profile of SEC chairman Harvey Pitt today.
Here we have a fairly common specimen of the higher idiocy so typical of the nineties, when the word deregulation began to be confused with the word abracadabra. It should be said at the outset: regulation, or rules and norms, are going to emerge in any market situation. The question is who is going to make them, and how are they going to be enforced. If they are made by market makers -- if, for instance, Enron makes the rules about energy derivatives -- other market members are going to have to apply those rules, try to get around those rules, or cease existing in the market. The advantage of being a market maker consists in being able to make the rules. These rules can be formal, as in the rules the NYSE makes, or informal, as in the rules that emerge when banks invest in X company on the premise that X company will copy the rules of some successful Y company.
Now, deregulation as it applies to accounting entails ignoring that the rules are going to be made, and claiming that only the government makes rules. Error one. Error two consists of the ideological claim that government is always bad. This claim has become theological. In spite of the evidence that, for instance, publicly run power companies do a comparable or better job than private power companies (compare LA's public power company to Southern Edison, if you want immediate support for this claim), this is the conservative mantra. It has the same relationship to reality as the doctrine of original sin has to psychology: it magnifies an insight into an untruth. Combine these two errors and you get Harvey Pitt.
Lets say some exciting things about accounting, shall we?
Since accounting on the Ernst and Young level is not heavily competitive, this means that the five market makers basically decide what the rules are. And they obviously suck at it, for the good reason that rules that promote transparency are not necessarily rules that all of their clients want to see followed. Gresham's law, which says that bad money drives out good, applies to rules as well. So hey, guess what? This is where a neutral party, ie the gov, has a role. It establishes the ground rules for all parties. This is elementary Locke, but seems to have escaped the attention of the greedy deregulatory crowd.
Here are three grafs from the NYT article. Reading them, it is easy to see that the Bush years are going to be studded with Enrons. These people have that deadhead Texas wealth mindset, the kind that the Hunt brothers used to embody:
"Since his return to the agency last September, Mr. Pitt has articulated a broadly deregulatory agenda that he says is now more relevant than ever, but which his critics say may now be overshadowed by what is quickly turning into a major accounting and corporate scandal.
If anything, the critics say, in light of more than $60 billion that Enron shareholders lost, it is time not to reduce the liabilities of auditors and corporations, but to increase them.
The S.E.C. for months has been woefully short of staff at its senior level and now has only two commissioners, including Mr. Pitt, because the White House has failed to nominate other replacements. The other commissioner, Laura S. Unger, who is also a Republican, is serving even though her term has expired and she has announced her intention to leave shortly."
Remora
Griboyedov.
Limited Inc imbibed Dostoevsky with our mother's milk, and have contemplated, for years, a sequel to the Underground Man entitled the Upside Down man (autobiographical, of course); Tolstoy was an event in our spiritual life that took two good years (20-22) to get out of the system, two years we will never get back, mind you; we've been a fan of Sologub's Petty Demon forever, The Master and the Margarita is one of the ur-texts in our inner cranial library, we've taken a prose style, down to dashes and parentheses, from Bely, we've read all the Nabokov one mortal could stand, Babel is a hero, Mandelstam and his wife are heroes -- what we are saying is that we are Russian out the ass. Always have been. But Griboyedov is pretty much a new one for us. So we enjoyed this Financial Times review of his biography. Griboyedov is known for one play. Apparently, that play is the Russian equivalent of Moliere's Misanthrope. But the review necessarily can't linger over the joys of a play that all seem to agree is inaccessible in English, so it quickly passes on to Griboyedov's very active life, spent as bon vivant, duelist, revolutionary of a sort, Arabist and Persianist, and diplomat. A full bill, this guy. We especially like knowing that, far from being an aberration, hostage crises at embassies in Teheran are folklore, like spelling bees and recitations of epic poetry. It seems that in 1829, a mob of angry Persians attacked the Russian embassy because, well, they were Russians, the stealth empire -- moving then, as it will always move, discretely in all directions. Our Griboyedov, Minister Plenipotentiary of the delegation there (and who knows what that meant, given the European propensity for scheming) was stabbed to death, his body paraded through the streets, members of the general public invited to do their patriotic duty and spit upon it. Another artist bites the dust.
A pity. Griboyedov is definitely my sort of guy. Here's two grafs from the article, which explain how he ended up in Teheran in the first place:
"Although his work in the theatre was increasingly successful, and he began serious study of Arabic and Persian, he paid a high price for his friendships with those richer and sillier than he. The scandal involving two young toffs from smart regiments, one 18-year-old ballerina and our subject sounds like something from light opera, but its consequences were deadly serious: Griboyedov was forced to take part in a partie carree, or four- sided duel, that left one of the challengers dead in the snow and the other participants exiled in disgrace by the Tsar.
His particular punishment - despite his pleadings that an artist such as he could not exist without "enlightened people, and sympathetic women" - was to be sent as attache to the first permanent Russian mission in Tehran."
Enlightened people and sympathetic women -- boil the bones off civilization, and this is what you have left --the base and bones of it. Griboyedov, mon frere, we salute you, who cry out for a few enlightened people, and a sympathetic woman or two!
Griboyedov.
Limited Inc imbibed Dostoevsky with our mother's milk, and have contemplated, for years, a sequel to the Underground Man entitled the Upside Down man (autobiographical, of course); Tolstoy was an event in our spiritual life that took two good years (20-22) to get out of the system, two years we will never get back, mind you; we've been a fan of Sologub's Petty Demon forever, The Master and the Margarita is one of the ur-texts in our inner cranial library, we've taken a prose style, down to dashes and parentheses, from Bely, we've read all the Nabokov one mortal could stand, Babel is a hero, Mandelstam and his wife are heroes -- what we are saying is that we are Russian out the ass. Always have been. But Griboyedov is pretty much a new one for us. So we enjoyed this Financial Times review of his biography. Griboyedov is known for one play. Apparently, that play is the Russian equivalent of Moliere's Misanthrope. But the review necessarily can't linger over the joys of a play that all seem to agree is inaccessible in English, so it quickly passes on to Griboyedov's very active life, spent as bon vivant, duelist, revolutionary of a sort, Arabist and Persianist, and diplomat. A full bill, this guy. We especially like knowing that, far from being an aberration, hostage crises at embassies in Teheran are folklore, like spelling bees and recitations of epic poetry. It seems that in 1829, a mob of angry Persians attacked the Russian embassy because, well, they were Russians, the stealth empire -- moving then, as it will always move, discretely in all directions. Our Griboyedov, Minister Plenipotentiary of the delegation there (and who knows what that meant, given the European propensity for scheming) was stabbed to death, his body paraded through the streets, members of the general public invited to do their patriotic duty and spit upon it. Another artist bites the dust.
A pity. Griboyedov is definitely my sort of guy. Here's two grafs from the article, which explain how he ended up in Teheran in the first place:
"Although his work in the theatre was increasingly successful, and he began serious study of Arabic and Persian, he paid a high price for his friendships with those richer and sillier than he. The scandal involving two young toffs from smart regiments, one 18-year-old ballerina and our subject sounds like something from light opera, but its consequences were deadly serious: Griboyedov was forced to take part in a partie carree, or four- sided duel, that left one of the challengers dead in the snow and the other participants exiled in disgrace by the Tsar.
His particular punishment - despite his pleadings that an artist such as he could not exist without "enlightened people, and sympathetic women" - was to be sent as attache to the first permanent Russian mission in Tehran."
Enlightened people and sympathetic women -- boil the bones off civilization, and this is what you have left --the base and bones of it. Griboyedov, mon frere, we salute you, who cry out for a few enlightened people, and a sympathetic woman or two!
Tuesday, January 15, 2002
Remora
Why do they hate us department.
Limited Inc means the CEOs of major corporations. And the us in question are the poor sweating masses who labor, pay taxes like suckers, and regularly get shellacked on both ends -- corporations who claim that utter faith in the market should prevent any government interference in spreading their costs to third parties (witness revelations about Monsanto's pollution fiesta in a small Alabaman town in the WP:
In 1966, Monsanto managers discovered that fish submerged in that creek turned belly-up within 10 seconds, spurting blood and shedding skin as if dunked into boiling water. They told no one. In 1969, they found fish in another creek with 7,500 times the legal PCB levels. They decided "there is little object in going to expensive extremes in limiting discharges." In 1975, a company study found that PCBs caused tumors in rats. They ordered its conclusion changed from "slightly tumorigenic" to "does not appear to be carcinogenic.") or going about their financial actions with riotous abandon of pirates on board a ship full of nuns, as in the case of 'Ken Boy''s company; and then, when downside time hits, those same corporations racing for the government tit, in a scramble that makes old Gipper Reagan's legendary welfare queen look like a piker.
Paul Krugman's op ed in the NYT this morning can be summarized in the words of that old Beatles standard: have you seen the little piggies/in their starched white shirts... In the last administration, the donors list revolved through the Lincoln bedroom as though Mr. and Miz Clinton were running a bed and breakfast for cheesy tv producers on federal time; in this administration, forget the bedroom. Give em a cabinet post, give em offices, give em lax or no enforcement of anti-trust regulation, give em the store, the keys, the ear of every policy maker cranked out by some crackpot rightwing thinktank. With so many friends in high places -- like Cheney, who believes an energy crisis means power company equities aren't achieving the cap levels his broker tells him they should be -- this country is being run openly as a country club for the rich, with tax breaks to fatten up the portfolios of the undeserving upper 5% in a public policy version of some Scrooge's wet dream.
Here are one and a half grafs:
"The real questions about Enron's relationship with the administration involve what happened before the energy trader hit the skids. That's when Mr. Lay allegedly told the head of the Federal Energy Regulatory Commission that he should be more cooperative if he wanted to keep his job. (He wasn't, and he didn't.) And it's when Enron helped Dick Cheney devise an energy plan that certainly looks as if it was written by and for the companies that advised his task force. Mr. Cheney, in clear defiance of the law, has refused to release any information about his task force's deliberations; what is he hiding?
"And while Enron has imploded, other energy companies retain the administration's ear. Just days before the latest Enron revelations, the administration signaled its intention to weaken pollution rules on power plants; late last week it announced its decision to proceed with a controversial plan to store radioactive waste in Nevada. Each of these decisions was worth billions to companies with very strong connections to Mr. Bush."
Why do they hate us department.
Limited Inc means the CEOs of major corporations. And the us in question are the poor sweating masses who labor, pay taxes like suckers, and regularly get shellacked on both ends -- corporations who claim that utter faith in the market should prevent any government interference in spreading their costs to third parties (witness revelations about Monsanto's pollution fiesta in a small Alabaman town in the WP:
In 1966, Monsanto managers discovered that fish submerged in that creek turned belly-up within 10 seconds, spurting blood and shedding skin as if dunked into boiling water. They told no one. In 1969, they found fish in another creek with 7,500 times the legal PCB levels. They decided "there is little object in going to expensive extremes in limiting discharges." In 1975, a company study found that PCBs caused tumors in rats. They ordered its conclusion changed from "slightly tumorigenic" to "does not appear to be carcinogenic.") or going about their financial actions with riotous abandon of pirates on board a ship full of nuns, as in the case of 'Ken Boy''s company; and then, when downside time hits, those same corporations racing for the government tit, in a scramble that makes old Gipper Reagan's legendary welfare queen look like a piker.
Paul Krugman's op ed in the NYT this morning can be summarized in the words of that old Beatles standard: have you seen the little piggies/in their starched white shirts... In the last administration, the donors list revolved through the Lincoln bedroom as though Mr. and Miz Clinton were running a bed and breakfast for cheesy tv producers on federal time; in this administration, forget the bedroom. Give em a cabinet post, give em offices, give em lax or no enforcement of anti-trust regulation, give em the store, the keys, the ear of every policy maker cranked out by some crackpot rightwing thinktank. With so many friends in high places -- like Cheney, who believes an energy crisis means power company equities aren't achieving the cap levels his broker tells him they should be -- this country is being run openly as a country club for the rich, with tax breaks to fatten up the portfolios of the undeserving upper 5% in a public policy version of some Scrooge's wet dream.
Here are one and a half grafs:
"The real questions about Enron's relationship with the administration involve what happened before the energy trader hit the skids. That's when Mr. Lay allegedly told the head of the Federal Energy Regulatory Commission that he should be more cooperative if he wanted to keep his job. (He wasn't, and he didn't.) And it's when Enron helped Dick Cheney devise an energy plan that certainly looks as if it was written by and for the companies that advised his task force. Mr. Cheney, in clear defiance of the law, has refused to release any information about his task force's deliberations; what is he hiding?
"And while Enron has imploded, other energy companies retain the administration's ear. Just days before the latest Enron revelations, the administration signaled its intention to weaken pollution rules on power plants; late last week it announced its decision to proceed with a controversial plan to store radioactive waste in Nevada. Each of these decisions was worth billions to companies with very strong connections to Mr. Bush."
Monday, January 14, 2002
Remora
Limited Inc. was temporarily out of our gourds, this morning. Look, once you settle on a term, it sticks -- like a bad tattoo, maybe, but so it goes. So we apologize to our many constant, passionate readers for this aberration, and hope we haven't harmed our brand. We are going to focus group about that, later.
Will Hutton has a very enjoyable time knocking around that old corrupt mushball, Enron, in his Guardian column. Most startling graf in the column is not in the bludgeoning of America's political culture, but in the dissing of American productivity. Could this be true?
"... Enron could not have made the progress it did without the intellectual backdrop that all regulation and taxation is bad - and that the more the US deregulated, the better its economy performed. This was, and is, balderdash. Recent work by economists, notably at investment bank Credit Suisse First Boston, shows that after making the necessary accounting adjustments and including downward revisions, productivity growth in the US has done no more than match that in Europe. Indeed, countries like France and Germany have higher absolute productivity and faster rates of growth than the Americans, despite their approach to regulation and taxation. The deregulation philosophy that enriches Ken Lay and his cronies does not necessarily enrich anybody else. "
Well, we know last year was a spectacular for accounting revisions -- the capitalist version of redoing history, for which the Soviets used to be so reviled by right thinking rightwingers. Where's Trotsky, these rightwingers would cackle at the pap turned out by USSR history hacks that put Stalin in the catbird seat right next to his old buddy Lenin, and quietly whiteinked the more photogenic (and vastly more important) T. Increasingly, though, Soviet historiography looks like a method ahead of its time, especially for the clever accounting firm -- consulting with its right hand, and doing its books with its left hand. Erasing figures from photographs is one thing, but you need real skill to strip and recombine figures until they don't add up to themselves anymore -- yes, millions of dollars like Cheshire cats, appearing one year as four legged, tail twitching profit, and the next year as merely a fading smile.
Still, Europe has never been known for its accounting transparency. Steinherr, in his book on Derivatives (isn't tout le monde reading that adorable tome? right up there with Harry Potter in most homes), gives the example of Daimler Benz, which when it came to the states (had to, since it was swallowing Chrysler), had to comply with the US GAAP requirements, which is how we do numbers in the New World. German numbers showed a moderate profit, but sieved through GAAP, the company showed an immoderate loss.
So I'd love to know where this Credit Suisse study comes from. I'm not doubting Hutton, just wondering how to face this kind of revisionism.
Limited Inc. was temporarily out of our gourds, this morning. Look, once you settle on a term, it sticks -- like a bad tattoo, maybe, but so it goes. So we apologize to our many constant, passionate readers for this aberration, and hope we haven't harmed our brand. We are going to focus group about that, later.
Will Hutton has a very enjoyable time knocking around that old corrupt mushball, Enron, in his Guardian column. Most startling graf in the column is not in the bludgeoning of America's political culture, but in the dissing of American productivity. Could this be true?
"... Enron could not have made the progress it did without the intellectual backdrop that all regulation and taxation is bad - and that the more the US deregulated, the better its economy performed. This was, and is, balderdash. Recent work by economists, notably at investment bank Credit Suisse First Boston, shows that after making the necessary accounting adjustments and including downward revisions, productivity growth in the US has done no more than match that in Europe. Indeed, countries like France and Germany have higher absolute productivity and faster rates of growth than the Americans, despite their approach to regulation and taxation. The deregulation philosophy that enriches Ken Lay and his cronies does not necessarily enrich anybody else. "
Well, we know last year was a spectacular for accounting revisions -- the capitalist version of redoing history, for which the Soviets used to be so reviled by right thinking rightwingers. Where's Trotsky, these rightwingers would cackle at the pap turned out by USSR history hacks that put Stalin in the catbird seat right next to his old buddy Lenin, and quietly whiteinked the more photogenic (and vastly more important) T. Increasingly, though, Soviet historiography looks like a method ahead of its time, especially for the clever accounting firm -- consulting with its right hand, and doing its books with its left hand. Erasing figures from photographs is one thing, but you need real skill to strip and recombine figures until they don't add up to themselves anymore -- yes, millions of dollars like Cheshire cats, appearing one year as four legged, tail twitching profit, and the next year as merely a fading smile.
Still, Europe has never been known for its accounting transparency. Steinherr, in his book on Derivatives (isn't tout le monde reading that adorable tome? right up there with Harry Potter in most homes), gives the example of Daimler Benz, which when it came to the states (had to, since it was swallowing Chrysler), had to comply with the US GAAP requirements, which is how we do numbers in the New World. German numbers showed a moderate profit, but sieved through GAAP, the company showed an immoderate loss.
So I'd love to know where this Credit Suisse study comes from. I'm not doubting Hutton, just wondering how to face this kind of revisionism.
Sunday, January 13, 2002
Acoustic shadows
This is the new name Limited Inc has chosen to head media-linked posts, instead of Remora. It isn't poetry, reader. If you will dig through the Echos newsletters in your closet -- you know, the ones the Acoustic Society of America sends you -- you will find an explanation in the winter, 1999 issue:
"Unusual acoustics due to atmospheric conditions or to terrain are sometimes given the catch-all name "acoustic shadows." The first recorded incidence of the phenomenon occurred during the Four-Day Battle in 1666. The naval battle was fought between the coasts of England and Holland, and sounds of the battle were heard clearly at many points throughout England but not at intervening points. Passengers on a yacht positioned between the battle and England heard nothing. A number of other examples have been recorded since that time. Guns fired at the funeral of Queen Victoria in London in 1901 were heard in Scotland, but not across a wide region in between. The German bombardment of Antwerp in World War I was heard clearly for a 30-mile radius, then beyond 60 miles from the Belgian city, but not in between."
Well, we at Limited Inc are always firing guns at funerals, in a manner of speaking. And we like to think that our absolute lack of effect in the immediate area simply means we are being picked up in Scotland, in a manner of speaking. Actually, a friend from Barcelona called us yesterday and claimed that our posts are being used as fodder for idea starved Catalonian columnists. This is Scotland, indeed.
Meanwhile, we had to borrow some change yesterday because we are down to pennies. As in, for instance, not being able to afford a stick of deodorant. Luckily, we found a lender willing to supply us with the necessary for the next couple days. After that, well, c'est le deluge. Life, for Limited Inc., is gonna be tough.
This is the new name Limited Inc has chosen to head media-linked posts, instead of Remora. It isn't poetry, reader. If you will dig through the Echos newsletters in your closet -- you know, the ones the Acoustic Society of America sends you -- you will find an explanation in the winter, 1999 issue:
"Unusual acoustics due to atmospheric conditions or to terrain are sometimes given the catch-all name "acoustic shadows." The first recorded incidence of the phenomenon occurred during the Four-Day Battle in 1666. The naval battle was fought between the coasts of England and Holland, and sounds of the battle were heard clearly at many points throughout England but not at intervening points. Passengers on a yacht positioned between the battle and England heard nothing. A number of other examples have been recorded since that time. Guns fired at the funeral of Queen Victoria in London in 1901 were heard in Scotland, but not across a wide region in between. The German bombardment of Antwerp in World War I was heard clearly for a 30-mile radius, then beyond 60 miles from the Belgian city, but not in between."
Well, we at Limited Inc are always firing guns at funerals, in a manner of speaking. And we like to think that our absolute lack of effect in the immediate area simply means we are being picked up in Scotland, in a manner of speaking. Actually, a friend from Barcelona called us yesterday and claimed that our posts are being used as fodder for idea starved Catalonian columnists. This is Scotland, indeed.
Meanwhile, we had to borrow some change yesterday because we are down to pennies. As in, for instance, not being able to afford a stick of deodorant. Luckily, we found a lender willing to supply us with the necessary for the next couple days. After that, well, c'est le deluge. Life, for Limited Inc., is gonna be tough.
Friday, January 11, 2002
Dope
Since no one responded to the "replace Remora" contest, Limited Inc spent some time bent over our dictionary, then the Shakespeare, then surfing through various columnists. So far, we haven't settled on a name. So we will continue to use "Dope" and think about linguistics until inspiration strikes.
Well, the headlines are Enron inspired, as the news wakes up to the fact that Enron was in bed with the Bush Administration. This is as unexpected as hearing that some Hollywood starlet is sleeping around. The Bush administration was pretty damn proud of its bedmate until recently. But like some chastened, though still eminently corrupt financial "advisor," the Bushies are pulling back on their investment. It is hard to see this as more than a passing scandal, however. The press still doesn't understand Enron's collapse; the biz press is unanimously on the side of "de-regulation." And the public is acquiescent, even to the extent that polls have shown no resistance to de-regulation even though they have also shown a majority expects that de-regulation will entail a price hike. If the nineties were about anything, they were about the crushing of the will to resist. Although it is gratifying to see anti-WTO protesters throng the streets when the WTO is in town, it isn't enough, right now. In the backlash atmosphere of Bush year one, it is easy to foresee questions about Enron's role in directing Bush policy being labelled unpatriotic. Don't forget, this prez is on a Heros bubble gum card now.
The WP story includes this characteristic Bushy touch:
"Bush reimbursed Enron for the use of its corporate jet during his presidential campaign, and was feted by company officials at Enron Field, home of the Houston Astros, seven months before the election. The Houston Chronicle has reported that Bush conferred a series of nicknames on Enron chief executive Kenneth L. Lay, including "Kenny Boy.'"
Since no one responded to the "replace Remora" contest, Limited Inc spent some time bent over our dictionary, then the Shakespeare, then surfing through various columnists. So far, we haven't settled on a name. So we will continue to use "Dope" and think about linguistics until inspiration strikes.
Well, the headlines are Enron inspired, as the news wakes up to the fact that Enron was in bed with the Bush Administration. This is as unexpected as hearing that some Hollywood starlet is sleeping around. The Bush administration was pretty damn proud of its bedmate until recently. But like some chastened, though still eminently corrupt financial "advisor," the Bushies are pulling back on their investment. It is hard to see this as more than a passing scandal, however. The press still doesn't understand Enron's collapse; the biz press is unanimously on the side of "de-regulation." And the public is acquiescent, even to the extent that polls have shown no resistance to de-regulation even though they have also shown a majority expects that de-regulation will entail a price hike. If the nineties were about anything, they were about the crushing of the will to resist. Although it is gratifying to see anti-WTO protesters throng the streets when the WTO is in town, it isn't enough, right now. In the backlash atmosphere of Bush year one, it is easy to foresee questions about Enron's role in directing Bush policy being labelled unpatriotic. Don't forget, this prez is on a Heros bubble gum card now.
The WP story includes this characteristic Bushy touch:
"Bush reimbursed Enron for the use of its corporate jet during his presidential campaign, and was feted by company officials at Enron Field, home of the Houston Astros, seven months before the election. The Houston Chronicle has reported that Bush conferred a series of nicknames on Enron chief executive Kenneth L. Lay, including "Kenny Boy.'"
Thursday, January 10, 2002
Dope
As my readers can plainly see, the contest for renaming the Remora category on this site fell still-born from the press -- not that Limited Inc is greatly surprised, since falling still born from the press does seem to be the fate attaching to every post I've written on this site, from July onwards.
We are not amused; because we are, in our own humble opinion, amusing. Although can we trust our own own humble opinion? because we also firmly believe the great intellects of the past pale in relation to our merest subclause. It has been pointed out to us that we suffer from egomania.
Alas, today we suffer from a physical, rather than metaphysical, ailment. Fever racks my bones. Mysterious aches are playing the boogie woogie on my spinal column. Luckily we were visited a friend of mine, mentioned in previous posts, who plays a role in my life similar to Scheherazade -- not that I am planning on beheading her. No, the deal with this woman is that she can tell me 1001 stories in one night. I was hoping she would come by, and so when she did, I had a Proustian moment, the invalid's feverish hope realized in an entrance. She bore healthful gifts -- chicken soup, grapefruit, and water. This friend sets great store by water, so I even drank it: of course, Limited Inc is always reminded of the great W.C. Fields joke about not drinking water, because fish fuck in it. The problem with modern water is that fish don't fuck in it. Often, instead, they suffocate in it, in great Dead Zones, or are poisoned by run-off, or invaded by parasites suddenly endemic to artificially warmed currents. But that is for another day.
I've always been a hypochondriac. But my hypochondria takes the form of imagining strange and obsolete diseases, like Gout, or Dropsy, that I might have. Today I was thinking I had pellagra. Since I don't know what pellagra is, I decided to check out a helpful site, and get the scoop.
... And what a scoop. Here are the symptoms of pellagra, just in case you were thinking you had it too:
"In the United States, pellagra has often been called the disease of the four D's -- dermatitis, diarrhea, dementia, and death.'
The NIH site celebrates one of those pioneering doctors whose fictional analogues haunt the pages of Balzac and Zola -- medicine was, after all, positivism on the grass-roots level. And science, of course, required a view of the human body at odds with ten thousand years of doctrine. For ten thousand years, the human body was subject to witchcraft. It was subject to analogy. It was subject to the universal idea of eternal life -- a view of the body that is hard for today's average Joe to envision, in spite of the light sprinkling of out of body death experiences that Readers Digest eagerly purveys.
But let's cut to the chase -- the doctor, Joseph Goldberger, has quite a story.
""Bored and intellectually restless in private practice in Wilkes-Barre, Pennsylvania, the young, shy physician joined the United States Marine Hospital Service, (later the U.S. Public Health Service or PHS) in 1899 at the beginning rank of Assistant Surgeon earning an annual salary of $1,600. Ironically, the immigrant from central Europe began his public health service career inspecting immigrants in the port of New York. However, it was not long before his epidemiological skills earned Goldberger the reputation of a tenacious and clever epidemic fighter.
Between 1902 and 1906, Goldberger heroically battled epidemic diseases. He fought yellow fever in Mexico, Puerto Rico, Mississippi, and Louisiana, contracting the disease himself His efforts earned him a promotion to the rank of Passed Assistant Surgeon in 1904 and later, an introduction to Mary Farrar, grandniece of Varina Davis, the widow of Confederate President, Jefferson Davis. In 1906, the immigrant Jewish physician from New York's Lower East Side married the daughter of a wealthy and socially prominent Episcopalian attorney from New Orleans over the religious objections of both families."
Wow, Jeff Davis' grandniece. The bones of that old racist must have been rattling in his grave.
Once in the South, Goldberger decided to track down the Pellagra germ. But he soon grew convinced that the germ theory, which was to that time what the genetic theory of disease is to ours, was wrong in this case. He got the governor of Mississippi to give him twelve healthy prisoners. Hey, they were promised freedom, if they only ate a very restricted diet. They soon came down with pellagra. So Goldberger triumphed, right? Oh no, he was attacked as a fraud for years. And in the twenties, his predictions about an epidemic of pellagra in the poor South were greeted as a slander on Southern manhood.
The South, as we know, has a higher percentage of meatheads in it than other parts of the country. And before the peanut gallerys starts lofting shells at me, remember: Limited Inc is from Georgia.
Ironically, Goldberger never isolated the vitamin that was deficient in pellagra cases. It was niacin, Vitamin B.
So I don't think I have pellagra -- I ate my cornflakes this morning.
A question hangs here, though -- what about those prisoners? Did the good guv'nah of Mississippi give them their freedom, as the guys in O brother where art thou, or did he renege. Or did they even survive that last D -- it's a killer.
As my readers can plainly see, the contest for renaming the Remora category on this site fell still-born from the press -- not that Limited Inc is greatly surprised, since falling still born from the press does seem to be the fate attaching to every post I've written on this site, from July onwards.
We are not amused; because we are, in our own humble opinion, amusing. Although can we trust our own own humble opinion? because we also firmly believe the great intellects of the past pale in relation to our merest subclause. It has been pointed out to us that we suffer from egomania.
Alas, today we suffer from a physical, rather than metaphysical, ailment. Fever racks my bones. Mysterious aches are playing the boogie woogie on my spinal column. Luckily we were visited a friend of mine, mentioned in previous posts, who plays a role in my life similar to Scheherazade -- not that I am planning on beheading her. No, the deal with this woman is that she can tell me 1001 stories in one night. I was hoping she would come by, and so when she did, I had a Proustian moment, the invalid's feverish hope realized in an entrance. She bore healthful gifts -- chicken soup, grapefruit, and water. This friend sets great store by water, so I even drank it: of course, Limited Inc is always reminded of the great W.C. Fields joke about not drinking water, because fish fuck in it. The problem with modern water is that fish don't fuck in it. Often, instead, they suffocate in it, in great Dead Zones, or are poisoned by run-off, or invaded by parasites suddenly endemic to artificially warmed currents. But that is for another day.
I've always been a hypochondriac. But my hypochondria takes the form of imagining strange and obsolete diseases, like Gout, or Dropsy, that I might have. Today I was thinking I had pellagra. Since I don't know what pellagra is, I decided to check out a helpful site, and get the scoop.
... And what a scoop. Here are the symptoms of pellagra, just in case you were thinking you had it too:
"In the United States, pellagra has often been called the disease of the four D's -- dermatitis, diarrhea, dementia, and death.'
The NIH site celebrates one of those pioneering doctors whose fictional analogues haunt the pages of Balzac and Zola -- medicine was, after all, positivism on the grass-roots level. And science, of course, required a view of the human body at odds with ten thousand years of doctrine. For ten thousand years, the human body was subject to witchcraft. It was subject to analogy. It was subject to the universal idea of eternal life -- a view of the body that is hard for today's average Joe to envision, in spite of the light sprinkling of out of body death experiences that Readers Digest eagerly purveys.
But let's cut to the chase -- the doctor, Joseph Goldberger, has quite a story.
""Bored and intellectually restless in private practice in Wilkes-Barre, Pennsylvania, the young, shy physician joined the United States Marine Hospital Service, (later the U.S. Public Health Service or PHS) in 1899 at the beginning rank of Assistant Surgeon earning an annual salary of $1,600. Ironically, the immigrant from central Europe began his public health service career inspecting immigrants in the port of New York. However, it was not long before his epidemiological skills earned Goldberger the reputation of a tenacious and clever epidemic fighter.
Between 1902 and 1906, Goldberger heroically battled epidemic diseases. He fought yellow fever in Mexico, Puerto Rico, Mississippi, and Louisiana, contracting the disease himself His efforts earned him a promotion to the rank of Passed Assistant Surgeon in 1904 and later, an introduction to Mary Farrar, grandniece of Varina Davis, the widow of Confederate President, Jefferson Davis. In 1906, the immigrant Jewish physician from New York's Lower East Side married the daughter of a wealthy and socially prominent Episcopalian attorney from New Orleans over the religious objections of both families."
Wow, Jeff Davis' grandniece. The bones of that old racist must have been rattling in his grave.
Once in the South, Goldberger decided to track down the Pellagra germ. But he soon grew convinced that the germ theory, which was to that time what the genetic theory of disease is to ours, was wrong in this case. He got the governor of Mississippi to give him twelve healthy prisoners. Hey, they were promised freedom, if they only ate a very restricted diet. They soon came down with pellagra. So Goldberger triumphed, right? Oh no, he was attacked as a fraud for years. And in the twenties, his predictions about an epidemic of pellagra in the poor South were greeted as a slander on Southern manhood.
The South, as we know, has a higher percentage of meatheads in it than other parts of the country. And before the peanut gallerys starts lofting shells at me, remember: Limited Inc is from Georgia.
Ironically, Goldberger never isolated the vitamin that was deficient in pellagra cases. It was niacin, Vitamin B.
So I don't think I have pellagra -- I ate my cornflakes this morning.
A question hangs here, though -- what about those prisoners? Did the good guv'nah of Mississippi give them their freedom, as the guys in O brother where art thou, or did he renege. Or did they even survive that last D -- it's a killer.
Wednesday, January 09, 2002
Remora
Readers should note Le Monde's beautiful, and somewhat fallacious, essay by Albert Manguel about the end of Argentina. All countries, he claim, rest on the shared fiction that they exist. A philosopher might call them intensional objects, meaning those entities which presuppose the agreement of subjects that they are as long as the subjects agree they are. This is a little different than what we mean by saying that mountains, or rivers, or trees are. Intensional things are as long as there are subjects for whom they are. These things are like dreams are. So nations, as fictions, extrude themselves crudely in anthems and slogans, in ads and editorials, in law courts and prisons. The nation is the Song of itself, the supreme act of subjectivity; it negotiates the distance between Descartes cogito ergo sum and Louis XIV's l'etat, c'est moi -- the state thinks itself into being in the heads of its citizens.
The question is, can this daydream of reason exist after the daydreamers have committed every vicious act in its name? We know that in one sense it can, and in one sense it can't. Germany survived Hitler -- but only because the Germans convinced themselves, at first, that Hitler never existed. That is, he existed in spite of the Germans. Generations have passed, and this fiction has been discarded, but only because it can be, in the same way that Hollywood can now show Indians as the noble warriors from whom a continent was wrested. Hollywood isn't crazy -- nobody is planning on giving the continent back. That nation, in those heads, ceased. From this point of view, history is a game of deniability. Those who are ostensibly proudest of the actions of our forefathers have no intention of indemnifying the sons and daughters of the slaves of our forefathers -- this is to take the daydream a little too far.
Here's what Manguel says about Argentina:
Il existe une tournure d'esprit que nous avons (� tort) qualifi�e de machiav�lique, celle qui porte � croire que l'on peut tout se permettre dans le but de s'agrandir, y compris d'enfreindre la loi. Les tyrans grecs, les c�sars romains, les papes et empereurs la poss�daient ; elle a d�clench� des guerres, justifi� des atrocit�s, caus� des souffrances indicibles ; en fin de compte, elle a toujours provoqu� l'effondrement des soci�t�s dans lesquelles elle s'�tait enracin�e. En Argentine, elle s'est manifest�e d�s l'aube de la R�publique, avec le meurtre du jeune r�volutionnaire Mariano Moreno. Elle est devenue officielle au XIXe si�cle sous la tyrannie de Juan Manuel de Rosas, acceptable au temps des oligarques et des propri�taires terriens au d�but du XXe, populaire sous Per�n. Enfin, sous la dictature militaire, elle a min� la soci�t� sous tous ses angles, ignor� toute l�galit�, fait de la torture et du meurtre les instruments quotidiens du gouvernement, infect� le langage et la pens�e.
Limited Inc.'s translation: "There exists a humor that we have (falsely) qualified as machievellian, which tends to assure us that we can permit ourselves anything in the process of growing great, including violating the law. The greek tyrants, the roman cesaers, the popes and emperors possessed this turn of mind; it started wars, justified atrocities, caused unspeakable suffering; and in the end, it has always provoked the collapse of those societies in which it has rooted. In Argentina, at the very dawn of the Republic it manifested itself in the murder of the young revolutionary, Mariano Moreno. It became official in the 19th century, under the tyranny of Juan Manuel de Rosas, acceptable in the time of the oligarchs and the landholders of the beginning of the 20th centruy, popular under Peron. In the end, under the military dictatorship, it totally undermined society, ignoring all equality, making of torutre and murder the quotidien instruments of government, infecting the language and the thought."
Well, Limited Inc is inevitably reminded of our own condemn�s. We received a letter from one of our far flung correspondants today. She enclosed a Salon article about a scholar at a Florida University in Tampa who has been fired for having spoken out against Israel on the Bill O'Reilly show. Fla.'s guv, the ludicrous Bush brother, Jeb, applauded. The man in question, Sami Al-Arian, turns out to hav had the rich, rancid experience of Uncle Sam's hot breath on his neck before: the FBI arrested his brother-in-law,
"a soft-spoken scholar named Mazen Al-Najjar, for unspecified terrorist associations. Al-Najjar -- the brother of Al-Arian's wife, Nahla -- had arrived at Tampa in 1981 and earned a doctorate at USF. Al-Najjar was arrested under then new antiterrorism laws allowing suspects to be held on the basis of secret evidence, without the precise charge being revealed in court. For the next three and a half years, Al-Najjar would remain in Bradenton prison without anyone -- not his lawyers, not even the judge --
ever seeing the purported evidence against him."
Can such things be? Limited Inc understands that mix of fear and smugness that reduces the canned suburban masses to silence, or to short term self-interest, or to right-wing myth. Still, Limited Inc would urge some effort, some strength of will here. The military in Argentina took hold in conditions of similar black magic. You think it can't happen here? Wake up, honey. It's all happening..
Readers should note Le Monde's beautiful, and somewhat fallacious, essay by Albert Manguel about the end of Argentina. All countries, he claim, rest on the shared fiction that they exist. A philosopher might call them intensional objects, meaning those entities which presuppose the agreement of subjects that they are as long as the subjects agree they are. This is a little different than what we mean by saying that mountains, or rivers, or trees are. Intensional things are as long as there are subjects for whom they are. These things are like dreams are. So nations, as fictions, extrude themselves crudely in anthems and slogans, in ads and editorials, in law courts and prisons. The nation is the Song of itself, the supreme act of subjectivity; it negotiates the distance between Descartes cogito ergo sum and Louis XIV's l'etat, c'est moi -- the state thinks itself into being in the heads of its citizens.
The question is, can this daydream of reason exist after the daydreamers have committed every vicious act in its name? We know that in one sense it can, and in one sense it can't. Germany survived Hitler -- but only because the Germans convinced themselves, at first, that Hitler never existed. That is, he existed in spite of the Germans. Generations have passed, and this fiction has been discarded, but only because it can be, in the same way that Hollywood can now show Indians as the noble warriors from whom a continent was wrested. Hollywood isn't crazy -- nobody is planning on giving the continent back. That nation, in those heads, ceased. From this point of view, history is a game of deniability. Those who are ostensibly proudest of the actions of our forefathers have no intention of indemnifying the sons and daughters of the slaves of our forefathers -- this is to take the daydream a little too far.
Here's what Manguel says about Argentina:
Il existe une tournure d'esprit que nous avons (� tort) qualifi�e de machiav�lique, celle qui porte � croire que l'on peut tout se permettre dans le but de s'agrandir, y compris d'enfreindre la loi. Les tyrans grecs, les c�sars romains, les papes et empereurs la poss�daient ; elle a d�clench� des guerres, justifi� des atrocit�s, caus� des souffrances indicibles ; en fin de compte, elle a toujours provoqu� l'effondrement des soci�t�s dans lesquelles elle s'�tait enracin�e. En Argentine, elle s'est manifest�e d�s l'aube de la R�publique, avec le meurtre du jeune r�volutionnaire Mariano Moreno. Elle est devenue officielle au XIXe si�cle sous la tyrannie de Juan Manuel de Rosas, acceptable au temps des oligarques et des propri�taires terriens au d�but du XXe, populaire sous Per�n. Enfin, sous la dictature militaire, elle a min� la soci�t� sous tous ses angles, ignor� toute l�galit�, fait de la torture et du meurtre les instruments quotidiens du gouvernement, infect� le langage et la pens�e.
Limited Inc.'s translation: "There exists a humor that we have (falsely) qualified as machievellian, which tends to assure us that we can permit ourselves anything in the process of growing great, including violating the law. The greek tyrants, the roman cesaers, the popes and emperors possessed this turn of mind; it started wars, justified atrocities, caused unspeakable suffering; and in the end, it has always provoked the collapse of those societies in which it has rooted. In Argentina, at the very dawn of the Republic it manifested itself in the murder of the young revolutionary, Mariano Moreno. It became official in the 19th century, under the tyranny of Juan Manuel de Rosas, acceptable in the time of the oligarchs and the landholders of the beginning of the 20th centruy, popular under Peron. In the end, under the military dictatorship, it totally undermined society, ignoring all equality, making of torutre and murder the quotidien instruments of government, infecting the language and the thought."
Well, Limited Inc is inevitably reminded of our own condemn�s. We received a letter from one of our far flung correspondants today. She enclosed a Salon article about a scholar at a Florida University in Tampa who has been fired for having spoken out against Israel on the Bill O'Reilly show. Fla.'s guv, the ludicrous Bush brother, Jeb, applauded. The man in question, Sami Al-Arian, turns out to hav had the rich, rancid experience of Uncle Sam's hot breath on his neck before: the FBI arrested his brother-in-law,
"a soft-spoken scholar named Mazen Al-Najjar, for unspecified terrorist associations. Al-Najjar -- the brother of Al-Arian's wife, Nahla -- had arrived at Tampa in 1981 and earned a doctorate at USF. Al-Najjar was arrested under then new antiterrorism laws allowing suspects to be held on the basis of secret evidence, without the precise charge being revealed in court. For the next three and a half years, Al-Najjar would remain in Bradenton prison without anyone -- not his lawyers, not even the judge --
ever seeing the purported evidence against him."
Can such things be? Limited Inc understands that mix of fear and smugness that reduces the canned suburban masses to silence, or to short term self-interest, or to right-wing myth. Still, Limited Inc would urge some effort, some strength of will here. The military in Argentina took hold in conditions of similar black magic. You think it can't happen here? Wake up, honey. It's all happening..
Tuesday, January 08, 2002
Dope
Limited Inc is thinking of changing the name for the Remora category. And let's be interactive about it, shall we? A little contest, my many many eager readers? Or at least my one or two. We need a label that is as au courant as an Enron exec's Swiss bank account , but as ironic as one of David Foster Wallace's footnotes. Please, use the little comment machinery thingy.
On another note, we should keep you up to date on our impoverishment -- always a big theme here at Limited Inc. Yes, December has passed, and our workload has seemingly gone down the old toilet -- we query, we query, and we receive the rare word back that this year, media is re-engineering, renewing its faith in the automatic 20% per year profit margin by getting rid of its deadwood -- the book sections, the freelancers, etc. That means, no eatin' in February for us! It is, of course, hard to get through a month without eating, but Limited Inc is stocking up on the vodka now, in order to weather the storm. An old trick from the de-kulakization days.
Now, down to serious business. And for that, what better place than the editorial page of the Wall Street Journal? Having an asset they have no intention of distributing for free, the WSJ isn't linkable. But we read Mark Falcoff's op-ed piece, Argentina has a choice: Peronism or Modernity, and we couldn't think of a better example of the iron logic of globalisation in its Post-Keynsian guise.
Key graf for us is near the end:
" ... let no one assume that Argentina can solve its problems by moving backwards. In recent weeks there has been much talk about the "good old days" of classic Peronism, with boom and psen populism delivering effortless wealth to every Argentine family. Presumably, experiments with a new, floating currency,a default on foreign debts, or subsidies for unproductive (and uncompetitive) industries could put people back to work, but not for long. In the past, such policies could only be financed through heavy foreign borrowing. With the country in virtual default on $132 billion dollars in obligations, that expedient is simply not a prospect."
Ah, the wonders of globalisation. Nations, like kine being lead down the corridor to the slaugher chamber, are continually being told they can't "move backwards." Why? Because the butchers aren't going to let them. Butchers usually tranquilize the ungulates to make them more pliable. Falcoff spots the butcher's drug in his last sentence, but because he is wearing ideological blinders, he doesn't ponder its essential wonder. If he were more, let us say, Marxist, he might be curious about the historical provenance of that debt. He might even do a little research, and that research would tell him that the majority of the first 60 billion dollars was accumulated under the military junta, with the strong support, until that unfortunate Falklands business, of the US government. He might even wonder why else they would be lending to Argentina at that time -- was Citycorp so tenderhearted under Walter 'Santa Claus' Wriston that they lent to make sure the Argentine family had a guaranteed, inefficient job? And Falcoff might even, in this Marxist moment, ask about the accumulation of the other 60 billion dollars worth of debt. Guess what? It was taken on under Menem and Cavallo's shock treatment regime, when the enterprises were freed, the peso was matched to the dollar, and according to the WSJ, Argentina was proving that Reaganism on the international level was the only way to go (a self fulfilling prophecy -- you can't go backwards when you've sold off your assets to the most corrupt bidder. You especially can't go home again when you torched it and don't even have enough in your budget to pay the firemen).
And say Falcoff decided to throw caution to the wind and even become Leninist. Then he might ask about the motives international lenders have for loaning 130 billion dollars to a country that now "makes up around 20 per cent of JP Morgan's Emerging Market Bond Index Global," according to the Financial Times. Emerging Market hucksters have said, aw shucks, the ratio between debt and GDP will be just fine if Argentina grows at 4.3%. That it has experience negative growth for the last three years, a pretty spectacular correction of -3.5% in 99, doesn't bother the Emerging Marketeer for good reason -- they are in the unique situation of having their risks cared for by such international organizations as the IMF and the World Bank. If Argentina defaults, and Limited Inc sees reason to think it will, the Emerging Marketeers will finally have to face up to the real world -- if you give excessive credit to an excessive debtor because the interest rate and the options on the interest rate are way cool, and you get your kneecaps blown off -- well, a version of caveat emptor, as the crack dealers say, kicks in.
Limited Inc is thinking of changing the name for the Remora category. And let's be interactive about it, shall we? A little contest, my many many eager readers? Or at least my one or two. We need a label that is as au courant as an Enron exec's Swiss bank account , but as ironic as one of David Foster Wallace's footnotes. Please, use the little comment machinery thingy.
On another note, we should keep you up to date on our impoverishment -- always a big theme here at Limited Inc. Yes, December has passed, and our workload has seemingly gone down the old toilet -- we query, we query, and we receive the rare word back that this year, media is re-engineering, renewing its faith in the automatic 20% per year profit margin by getting rid of its deadwood -- the book sections, the freelancers, etc. That means, no eatin' in February for us! It is, of course, hard to get through a month without eating, but Limited Inc is stocking up on the vodka now, in order to weather the storm. An old trick from the de-kulakization days.
Now, down to serious business. And for that, what better place than the editorial page of the Wall Street Journal? Having an asset they have no intention of distributing for free, the WSJ isn't linkable. But we read Mark Falcoff's op-ed piece, Argentina has a choice: Peronism or Modernity, and we couldn't think of a better example of the iron logic of globalisation in its Post-Keynsian guise.
Key graf for us is near the end:
" ... let no one assume that Argentina can solve its problems by moving backwards. In recent weeks there has been much talk about the "good old days" of classic Peronism, with boom and psen populism delivering effortless wealth to every Argentine family. Presumably, experiments with a new, floating currency,a default on foreign debts, or subsidies for unproductive (and uncompetitive) industries could put people back to work, but not for long. In the past, such policies could only be financed through heavy foreign borrowing. With the country in virtual default on $132 billion dollars in obligations, that expedient is simply not a prospect."
Ah, the wonders of globalisation. Nations, like kine being lead down the corridor to the slaugher chamber, are continually being told they can't "move backwards." Why? Because the butchers aren't going to let them. Butchers usually tranquilize the ungulates to make them more pliable. Falcoff spots the butcher's drug in his last sentence, but because he is wearing ideological blinders, he doesn't ponder its essential wonder. If he were more, let us say, Marxist, he might be curious about the historical provenance of that debt. He might even do a little research, and that research would tell him that the majority of the first 60 billion dollars was accumulated under the military junta, with the strong support, until that unfortunate Falklands business, of the US government. He might even wonder why else they would be lending to Argentina at that time -- was Citycorp so tenderhearted under Walter 'Santa Claus' Wriston that they lent to make sure the Argentine family had a guaranteed, inefficient job? And Falcoff might even, in this Marxist moment, ask about the accumulation of the other 60 billion dollars worth of debt. Guess what? It was taken on under Menem and Cavallo's shock treatment regime, when the enterprises were freed, the peso was matched to the dollar, and according to the WSJ, Argentina was proving that Reaganism on the international level was the only way to go (a self fulfilling prophecy -- you can't go backwards when you've sold off your assets to the most corrupt bidder. You especially can't go home again when you torched it and don't even have enough in your budget to pay the firemen).
And say Falcoff decided to throw caution to the wind and even become Leninist. Then he might ask about the motives international lenders have for loaning 130 billion dollars to a country that now "makes up around 20 per cent of JP Morgan's Emerging Market Bond Index Global," according to the Financial Times. Emerging Market hucksters have said, aw shucks, the ratio between debt and GDP will be just fine if Argentina grows at 4.3%. That it has experience negative growth for the last three years, a pretty spectacular correction of -3.5% in 99, doesn't bother the Emerging Marketeer for good reason -- they are in the unique situation of having their risks cared for by such international organizations as the IMF and the World Bank. If Argentina defaults, and Limited Inc sees reason to think it will, the Emerging Marketeers will finally have to face up to the real world -- if you give excessive credit to an excessive debtor because the interest rate and the options on the interest rate are way cool, and you get your kneecaps blown off -- well, a version of caveat emptor, as the crack dealers say, kicks in.
Sunday, January 06, 2002
Remora
What did you do in the Great Recession, Daddy?
Well, as analysts on Wall Street bubble with bull opportunities afforded by the rest of this year -- that good old V bounce to the recession -- reality out there isn't so happy. With the Federal Reserve becoming, basically, the Office of Moral Hazard, always willing to cut rates in order to keep equities from finding traditional p/e levels that would bring the Dow Jones Average crashing 2000 some points, the market in housing and autos was banner last year. But banner at what cost? Enron shows what happens when a company is taken apart by the whitewater currents of the futures market -- small bets can become big losses, as was the experience of Barings, of Long Term Capital Management, of the Orange County Teachers retirement fund, of... well, the list goes on.
In order to prevent sales from slumping, Detroit used the Fed's party-time philosophy to finance an incredible issue of credit. This is a balancing act that is reminiscent of the situation the S&Ls faced in 1979 -- in that year, they had to balance the sharp, short term spike on interest with long term housing loans that were pegged to yesteryear's lesser interest rate. Inflationary discounted inflow did not make up for inflationary magnified outflow. Result: changes in the usury and loaning laws that eventually wrecked the industry. Here, we have the inverse situation, with short term interest unnaturally low. If the Fed ratchets up the rate this year, as any good and prudent monetarist would advice, it is going to squeeze Detroit like a sucked lemon. The game plan seems to have been, avoid a sales downturn by any means necessary. But if you hold the firesale, you better have had a fire. Well, this year the story is going to be about a fire foretold. This means legislation will soon be trucking through congress to give the Big Three some special and stupid breaks. We won't hear from any congressmen about how stupidly these companies have used their credit -- unlike the preaching we heard from the high and mighty Senate when they were crafting bankruptcy laws to penalize the poor individual debtor.
If that doesn't happen -- well, take away Limited Inc's prophecy licence and throw our body to the street, where the dogs can lick up our blood. What was good enough for Jezebel is good enough for us.
Here's the NYT:
"In 2001, total auto sales stayed at a near- record level, especially after Sept. 11, largely because G.M. and Ford leaned heavily on their financing businesses to pump up sales. But that burst of interest-free financing deals was just the latest in a string of deal making that led to swelled portfolios of leases and car loans taken on by Ford Motor Credit and the General Motors Acceptance Corporation (news/quote), known as G.M.A.C., in the last five years.
Unlike their foreign rivals, which have developed stables of models that buyers actually will pay more for, Ford and G.M. have relied more on incentives like low- interest loans and cheap leases to attract customers. The automakers have ponied up billions of dollars to their financing units to make up the difference on the below-market financing."
Fun facts to know and tell:
Ford Motor Credit financed more than half of the vehicles Ford Motor sold last year. G.M.A.C. financed more than 40 percent of G.M. sales. At G.M.A.C., 85 percent of loans made in 2000 had some subsidy.
This is a huge shift in loaning practice, to corporate subsidiaries who have every interest in making unsafe loans. If there's a large fall out in those loans, watch the Federal Gov come up with some cozy loan insurance plan.
What did you do in the Great Recession, Daddy?
Well, as analysts on Wall Street bubble with bull opportunities afforded by the rest of this year -- that good old V bounce to the recession -- reality out there isn't so happy. With the Federal Reserve becoming, basically, the Office of Moral Hazard, always willing to cut rates in order to keep equities from finding traditional p/e levels that would bring the Dow Jones Average crashing 2000 some points, the market in housing and autos was banner last year. But banner at what cost? Enron shows what happens when a company is taken apart by the whitewater currents of the futures market -- small bets can become big losses, as was the experience of Barings, of Long Term Capital Management, of the Orange County Teachers retirement fund, of... well, the list goes on.
In order to prevent sales from slumping, Detroit used the Fed's party-time philosophy to finance an incredible issue of credit. This is a balancing act that is reminiscent of the situation the S&Ls faced in 1979 -- in that year, they had to balance the sharp, short term spike on interest with long term housing loans that were pegged to yesteryear's lesser interest rate. Inflationary discounted inflow did not make up for inflationary magnified outflow. Result: changes in the usury and loaning laws that eventually wrecked the industry. Here, we have the inverse situation, with short term interest unnaturally low. If the Fed ratchets up the rate this year, as any good and prudent monetarist would advice, it is going to squeeze Detroit like a sucked lemon. The game plan seems to have been, avoid a sales downturn by any means necessary. But if you hold the firesale, you better have had a fire. Well, this year the story is going to be about a fire foretold. This means legislation will soon be trucking through congress to give the Big Three some special and stupid breaks. We won't hear from any congressmen about how stupidly these companies have used their credit -- unlike the preaching we heard from the high and mighty Senate when they were crafting bankruptcy laws to penalize the poor individual debtor.
If that doesn't happen -- well, take away Limited Inc's prophecy licence and throw our body to the street, where the dogs can lick up our blood. What was good enough for Jezebel is good enough for us.
Here's the NYT:
"In 2001, total auto sales stayed at a near- record level, especially after Sept. 11, largely because G.M. and Ford leaned heavily on their financing businesses to pump up sales. But that burst of interest-free financing deals was just the latest in a string of deal making that led to swelled portfolios of leases and car loans taken on by Ford Motor Credit and the General Motors Acceptance Corporation (news/quote), known as G.M.A.C., in the last five years.
Unlike their foreign rivals, which have developed stables of models that buyers actually will pay more for, Ford and G.M. have relied more on incentives like low- interest loans and cheap leases to attract customers. The automakers have ponied up billions of dollars to their financing units to make up the difference on the below-market financing."
Fun facts to know and tell:
Ford Motor Credit financed more than half of the vehicles Ford Motor sold last year. G.M.A.C. financed more than 40 percent of G.M. sales. At G.M.A.C., 85 percent of loans made in 2000 had some subsidy.
This is a huge shift in loaning practice, to corporate subsidiaries who have every interest in making unsafe loans. If there's a large fall out in those loans, watch the Federal Gov come up with some cozy loan insurance plan.
Saturday, January 05, 2002
Remora
Tom Paine got Colin Woodard, whose book, Ocean's End, was one of our favorite books last year, to put the heat on The Skeptical Environmentalist
.
But Tom Paine is a little late to the game, compared to Limited Inc., as our lucky readers (the few, the bold, the brave, the ones looking for girles+Arabia+sex) know. For those of you who missed it, this is a reprint of our post in August about Lomborg's miserable tract:
8/8/2001 10:40:02 AM
Bjorn Lomborg seems set to be the most quoted environmentalist of the season. The reason? He has a conversion story. There he was, according to himself, your average know nothing Greenpeace schmoe, kvetching about mass extinction and Global Warming on Planet Gaia, when he got knocked down (spiritually, that is) by libertarian skeptics of the environmental model. No doubt, like Saul, he had his days of reclusion and blindness, the night sweats, the fever - but a vision of Gale Norton apparently visited him, saying, in an unearthly voice, go and tell all mankind about the wonders of cost benefit analysis! So he arose from his bed and now he's come out with a book, and at such a convenient time, too! What with the trashing of the Kyoto accords and all, which looks so terrible in the press. The book plays a theme dear to the corporate mindset - that is, that environmentalists exaggerate, and that such things as climate change, or environmental damage, are myths generated by inaccurate or skewed stats and projections of enviro- Nazis. Of course, modern day converts never convert all the way - they want to bring their cultural capital with them, otherwise they become just another Jack in the Pack. So instead of taking the mantle of libertarian debunker, Lomborg, of course, is still describing himself as an environmentalist. He is of that less dogmatic type, undisturbed when they blacktop those pristine redwood forests in California. Plenty more where that came from! Hell, wonders of biotech nowadays, we'll just fix us up a batch in a laboratory. So come on down, Butterfly!!!
Lomborg summarizes these views in an Economist article. He has developed a handy name - the Litany - for the general complaints about ecological degradation bandied about by environmentalists. He goes through the four major points in the Economist article.
I actually agree with one of his points - I have no sympathy with the population control crowd. In fact, the Litany is very skewed, itself, to the kind of environmentalism represented by Paul Ehrlich and the Club of Rome, which has always been very alarmist about the depletion of natural resources and the danger of over-population.
It is his third and fourth points I find extremely shaky. First, there is the threat of biodiversity loss. Lomburg says this is exaggerated. But his base for that loss is extinction. He doesn't defend this as a standard. He writes, for instance, of predictions of extinction, "...the data simply does not bear out these predictions. In the eastern United States, forests were reduced over two centuries to fragments totalling just 1-2% of their original area, yet this resulted in the extinction of only one forest bird." Presumably he means the Ivory Billed Woodpecker, or perhaps the Carolina Parakeet (that I can name two candidates off the top of my head - and I'm no ornithologist - makes me think that his claim is probably factually dubious). Lomburg simply ignores monoculture, and the destruction of biodiverse habitats. If the loblolly pine takes over the ecological niche of, say, the live oak in Southern Georgia, sure, that doesn't entail the extinction of the live oak - it simply entails its rarity, its being thrusted to the periphery. The whooping crane is not extinct - but the number of the whooping crane is such that its former environmental role is, basically, non-existent. In other words, bio-diversity certainly doesn't mean that species that hang on in severely diminished numbers are some kind of proof that the ecology has remained unimpaired.
As for the claim that "pollution is also exaggerated," this point is much too uniform to hold. Lomburg shows that London air was much more polluted in the 1880s then now. His claim is, presumably, about particulate pollution. But the harm of a pollutant isn't necessarily in its quantity - small quantities of certain pollutants are much more harmful than large quantities of other pollutants. Take Lead. When lead was put into gasoline, it was emitted in quantities that were less than, say, the quantity of carbon dust released by coal energy - but lead is much more toxic. Also, Lomburg simply ignores the complexity of pollution. London is a good example - after the killing fogs of the fifties, a concerted effort was made to clean up the London air. But the clean-up inadvertantly lead to ozone problems, as the sunlight could now interact with car emissions - in other words, smog.
Finally, Lomburg engages in some suspicious cost analysis. For instance, he quotes a chart showing how much it costs to save a persons life in terms of regulation, and enforcing the use of various pollution reduction devices. This is a very common fallacy among the anti-enviro set - that there is only one set of costs. What is never done is to ask - what does pollution cost if it isn't cleaned up? The tacit assumption is that pollution control is some kind of bizarre luxury. If your car emits certain gases, well, that's a moral problem, but surely not an economic one. Right? Wrong. Pollution is not a free lunch. The question is: who pays for the social cost of pollution? This question is evaded by giving us the unilateral costs to businesses of pollution clean-up - which is like being given one side of an accounting ledger. If it costs 800 dollars to install seat belts, for instance, what isn't asked is - how much does it cost to pay for the additional injuries that would result from lack of seat belts? If it costs a million dollars to install filters on a coal burning power plant, how much does it cost, in terms of life and property degradation, when the unfiltered pollution is allowed to spread from the plant? In fact, this is where environmentalists, far from being alarmists, have been sleepwalking - partly because they don't think in terms of, say, property values. The anti-enviro crowd is happy enough with that - they can pass the cost of skewed statistics onto the back of the average citizen, in the shape of using them to justify dirty public policy.
I've written a little essay on the social costs of doing business which I ought to post this week, to continue this discussion.
Anyway, all my caveats aren't going to matter - Lomburg is on his way as the corporate environmentalist du jour. He is handsome, he has a conversion story, and he uses models preferred by the business crowd. What could be better?
Tom Paine got Colin Woodard, whose book, Ocean's End, was one of our favorite books last year, to put the heat on The Skeptical Environmentalist
.
But Tom Paine is a little late to the game, compared to Limited Inc., as our lucky readers (the few, the bold, the brave, the ones looking for girles+Arabia+sex) know. For those of you who missed it, this is a reprint of our post in August about Lomborg's miserable tract:
8/8/2001 10:40:02 AM
Bjorn Lomborg seems set to be the most quoted environmentalist of the season. The reason? He has a conversion story. There he was, according to himself, your average know nothing Greenpeace schmoe, kvetching about mass extinction and Global Warming on Planet Gaia, when he got knocked down (spiritually, that is) by libertarian skeptics of the environmental model. No doubt, like Saul, he had his days of reclusion and blindness, the night sweats, the fever - but a vision of Gale Norton apparently visited him, saying, in an unearthly voice, go and tell all mankind about the wonders of cost benefit analysis! So he arose from his bed and now he's come out with a book, and at such a convenient time, too! What with the trashing of the Kyoto accords and all, which looks so terrible in the press. The book plays a theme dear to the corporate mindset - that is, that environmentalists exaggerate, and that such things as climate change, or environmental damage, are myths generated by inaccurate or skewed stats and projections of enviro- Nazis. Of course, modern day converts never convert all the way - they want to bring their cultural capital with them, otherwise they become just another Jack in the Pack. So instead of taking the mantle of libertarian debunker, Lomborg, of course, is still describing himself as an environmentalist. He is of that less dogmatic type, undisturbed when they blacktop those pristine redwood forests in California. Plenty more where that came from! Hell, wonders of biotech nowadays, we'll just fix us up a batch in a laboratory. So come on down, Butterfly!!!
Lomborg summarizes these views in an Economist article. He has developed a handy name - the Litany - for the general complaints about ecological degradation bandied about by environmentalists. He goes through the four major points in the Economist article.
I actually agree with one of his points - I have no sympathy with the population control crowd. In fact, the Litany is very skewed, itself, to the kind of environmentalism represented by Paul Ehrlich and the Club of Rome, which has always been very alarmist about the depletion of natural resources and the danger of over-population.
It is his third and fourth points I find extremely shaky. First, there is the threat of biodiversity loss. Lomburg says this is exaggerated. But his base for that loss is extinction. He doesn't defend this as a standard. He writes, for instance, of predictions of extinction, "...the data simply does not bear out these predictions. In the eastern United States, forests were reduced over two centuries to fragments totalling just 1-2% of their original area, yet this resulted in the extinction of only one forest bird." Presumably he means the Ivory Billed Woodpecker, or perhaps the Carolina Parakeet (that I can name two candidates off the top of my head - and I'm no ornithologist - makes me think that his claim is probably factually dubious). Lomburg simply ignores monoculture, and the destruction of biodiverse habitats. If the loblolly pine takes over the ecological niche of, say, the live oak in Southern Georgia, sure, that doesn't entail the extinction of the live oak - it simply entails its rarity, its being thrusted to the periphery. The whooping crane is not extinct - but the number of the whooping crane is such that its former environmental role is, basically, non-existent. In other words, bio-diversity certainly doesn't mean that species that hang on in severely diminished numbers are some kind of proof that the ecology has remained unimpaired.
As for the claim that "pollution is also exaggerated," this point is much too uniform to hold. Lomburg shows that London air was much more polluted in the 1880s then now. His claim is, presumably, about particulate pollution. But the harm of a pollutant isn't necessarily in its quantity - small quantities of certain pollutants are much more harmful than large quantities of other pollutants. Take Lead. When lead was put into gasoline, it was emitted in quantities that were less than, say, the quantity of carbon dust released by coal energy - but lead is much more toxic. Also, Lomburg simply ignores the complexity of pollution. London is a good example - after the killing fogs of the fifties, a concerted effort was made to clean up the London air. But the clean-up inadvertantly lead to ozone problems, as the sunlight could now interact with car emissions - in other words, smog.
Finally, Lomburg engages in some suspicious cost analysis. For instance, he quotes a chart showing how much it costs to save a persons life in terms of regulation, and enforcing the use of various pollution reduction devices. This is a very common fallacy among the anti-enviro set - that there is only one set of costs. What is never done is to ask - what does pollution cost if it isn't cleaned up? The tacit assumption is that pollution control is some kind of bizarre luxury. If your car emits certain gases, well, that's a moral problem, but surely not an economic one. Right? Wrong. Pollution is not a free lunch. The question is: who pays for the social cost of pollution? This question is evaded by giving us the unilateral costs to businesses of pollution clean-up - which is like being given one side of an accounting ledger. If it costs 800 dollars to install seat belts, for instance, what isn't asked is - how much does it cost to pay for the additional injuries that would result from lack of seat belts? If it costs a million dollars to install filters on a coal burning power plant, how much does it cost, in terms of life and property degradation, when the unfiltered pollution is allowed to spread from the plant? In fact, this is where environmentalists, far from being alarmists, have been sleepwalking - partly because they don't think in terms of, say, property values. The anti-enviro crowd is happy enough with that - they can pass the cost of skewed statistics onto the back of the average citizen, in the shape of using them to justify dirty public policy.
I've written a little essay on the social costs of doing business which I ought to post this week, to continue this discussion.
Anyway, all my caveats aren't going to matter - Lomburg is on his way as the corporate environmentalist du jour. He is handsome, he has a conversion story, and he uses models preferred by the business crowd. What could be better?
Remora
Limited Inc realizes that our fascination with some of the tedious arguments in the dismal science is not winning this site any popularity awards. Actually, according to our site meter, our most popular posts inevitably include the words Lolita, or tits, of sex, or girles -- so we included them in this sentence to trap the unwary, horny surfer. Ha ha.
But Limited Inc has always pricked up its ears at the sound of a trumpet, the old gray battle horse within stirring to scenes of past Agincourts. Today, the trumpet resounds from the Center for Economic Policy, curtesy of a link on the Arts and Letters site. Let us go then, you and I, to the article entitled A Closer Look at the World Bank's Most Recent Defense of Its Policies by Mark Weisbrot, Dean Baker, Robert Naiman, and Gila Neta. You'll notice the date on this paper -- August 2000. We can't explain why the A & L people spotlighted it a year later, but the paper foregrounds some future post we will no doubt be writing concerning the current turmoil in Argentina. The meat, here, is in the comparison of growth figures. The world bank paper that Mssrs. Weisbot, et al are replying to makes the banal point that growth is good for the poor. It extrapolates that point into another point: that the IMF doctrine of "anti-inflationary" fiscal policy, liberalisation of global financial markets, and openness to international trade are good for the poor. The inference being, these are growth oriented policies. The further inference being, past policies were not growth oriented.
Well, this is a sand castle of an argument, and W.B.N.N. knock it down with one swift kick, consisting of a graph comparing growth rates. The gross and oh so out of fashion Keynsian world displays the kind of growth undreeamt of in the sleek IMF model. If we are looking for policies that help the poor (and this is not something the IMF really is set up to do), unsurprisingly, the poor aren't helped by accident. They aren't, in other words, helped by helping the rich, which is what the IMF all neo-liberal political economics would have us believe. The comparison is strikingly in favor of the Keynsian mix of inflationary/ anti-inflationary measures, and national policies that regulate exports and imports.
Here are some important grafs:
In Latin America, for example, GDP per capita grew by 75 percent from 1960-1980, whereas in the latter period it has only risen 6 percent. For sub-Saharan Africa, GDP per capita grew by 36 percent in the first period, while it has since fallen by 15 percent.
These are enormous differences by any standard of comparison, and represent the loss to an entire generation-- of hundreds of millions of people-- of any chance of improving its living standards. Even where growth was significant, as in Southeast Asia, it was still better in the earlier period. The only exception to this trend was East Asia, which grew faster from 1980 to 1998 than in the previous period. But this is due to the quadrupling of GDP, over the last 18 years, in China (which has 83 percent of the population of East Asia).
In short, there is no region of the world that the Bank or Fund can point to as having succeeded through adopting the policies that they promote-- or in many cases, impose-- upon borrowing countries. (They are understandably reluctant to claim credit for China, which maintains a non-convertible currency, state control over its banking system, and other major violations of IMF/Bank prescriptions).[6]
One cannot stress too strongly the failure of these policies on the measure of economic growth, even ignoring income distribution. The debate over Dollar and Kraay's paper, for example, has simply assumed-- as the authors have-- that IMF/Bank policies do promote growth, and the only question is how well the poor have fared under the growth that has resulted from these policies."
The last is the assasin graf -- the look, the Emperor has no clothes graf. But before Limited Inc puts down our money on Keynsian policies, we feel like these statistics have to be fed into, well, reality. The era of spectacular growth spotlighted the Mssrs. et. al might, indeed, be impossible to replicate even with Keynsian economics. The reason for this is simple: a snapshot of the political economy of, say, Brazil in 1900 compared to Brazil in 1980 is going to be incredibly different; but it is hard to imagine the same technological/sociological/economic alteration occuring in the next twenty years under no matter what economic regime.
A further caveat has to do with the environment. The stats for the first half of the century simply ignore environmental degradation. But we are now more keenly aware that there are social costs to dams, irrigation projects, monocultural agriculture, and other featurs of growth. This impinges, of course, on both sides of the argument, but it is too little taken into account by the same groups who, admirably, dissent from the current model of IMF growth.
Limited Inc realizes that our fascination with some of the tedious arguments in the dismal science is not winning this site any popularity awards. Actually, according to our site meter, our most popular posts inevitably include the words Lolita, or tits, of sex, or girles -- so we included them in this sentence to trap the unwary, horny surfer. Ha ha.
But Limited Inc has always pricked up its ears at the sound of a trumpet, the old gray battle horse within stirring to scenes of past Agincourts. Today, the trumpet resounds from the Center for Economic Policy, curtesy of a link on the Arts and Letters site. Let us go then, you and I, to the article entitled A Closer Look at the World Bank's Most Recent Defense of Its Policies by Mark Weisbrot, Dean Baker, Robert Naiman, and Gila Neta. You'll notice the date on this paper -- August 2000. We can't explain why the A & L people spotlighted it a year later, but the paper foregrounds some future post we will no doubt be writing concerning the current turmoil in Argentina. The meat, here, is in the comparison of growth figures. The world bank paper that Mssrs. Weisbot, et al are replying to makes the banal point that growth is good for the poor. It extrapolates that point into another point: that the IMF doctrine of "anti-inflationary" fiscal policy, liberalisation of global financial markets, and openness to international trade are good for the poor. The inference being, these are growth oriented policies. The further inference being, past policies were not growth oriented.
Well, this is a sand castle of an argument, and W.B.N.N. knock it down with one swift kick, consisting of a graph comparing growth rates. The gross and oh so out of fashion Keynsian world displays the kind of growth undreeamt of in the sleek IMF model. If we are looking for policies that help the poor (and this is not something the IMF really is set up to do), unsurprisingly, the poor aren't helped by accident. They aren't, in other words, helped by helping the rich, which is what the IMF all neo-liberal political economics would have us believe. The comparison is strikingly in favor of the Keynsian mix of inflationary/ anti-inflationary measures, and national policies that regulate exports and imports.
Here are some important grafs:
In Latin America, for example, GDP per capita grew by 75 percent from 1960-1980, whereas in the latter period it has only risen 6 percent. For sub-Saharan Africa, GDP per capita grew by 36 percent in the first period, while it has since fallen by 15 percent.
These are enormous differences by any standard of comparison, and represent the loss to an entire generation-- of hundreds of millions of people-- of any chance of improving its living standards. Even where growth was significant, as in Southeast Asia, it was still better in the earlier period. The only exception to this trend was East Asia, which grew faster from 1980 to 1998 than in the previous period. But this is due to the quadrupling of GDP, over the last 18 years, in China (which has 83 percent of the population of East Asia).
In short, there is no region of the world that the Bank or Fund can point to as having succeeded through adopting the policies that they promote-- or in many cases, impose-- upon borrowing countries. (They are understandably reluctant to claim credit for China, which maintains a non-convertible currency, state control over its banking system, and other major violations of IMF/Bank prescriptions).[6]
One cannot stress too strongly the failure of these policies on the measure of economic growth, even ignoring income distribution. The debate over Dollar and Kraay's paper, for example, has simply assumed-- as the authors have-- that IMF/Bank policies do promote growth, and the only question is how well the poor have fared under the growth that has resulted from these policies."
The last is the assasin graf -- the look, the Emperor has no clothes graf. But before Limited Inc puts down our money on Keynsian policies, we feel like these statistics have to be fed into, well, reality. The era of spectacular growth spotlighted the Mssrs. et. al might, indeed, be impossible to replicate even with Keynsian economics. The reason for this is simple: a snapshot of the political economy of, say, Brazil in 1900 compared to Brazil in 1980 is going to be incredibly different; but it is hard to imagine the same technological/sociological/economic alteration occuring in the next twenty years under no matter what economic regime.
A further caveat has to do with the environment. The stats for the first half of the century simply ignore environmental degradation. But we are now more keenly aware that there are social costs to dams, irrigation projects, monocultural agriculture, and other featurs of growth. This impinges, of course, on both sides of the argument, but it is too little taken into account by the same groups who, admirably, dissent from the current model of IMF growth.
Friday, January 04, 2002
Dope
Some further comments on Senator Torricelli's Houdini like escape from prosecution seem called for.
The question on the mind of the spectator must be: why would the Repugs go along on this deal? After all, damn Senator T with the black spot and Senator Lott will once more be the majority leader, talked to, even, by tv reporters and such.
Well, let's speculate a little bit, children. When one of D.C.'s pirates is caught with his hand in the till, very often a delicate situation arises. Because so many other pirates on the ship have been quietly amassing as much loot as their natural greed allows them. It is a tradition that goes back to the Roman senate. So if Senator T.'s skin is graciously unflayed, one looks around for who else could be outrageously vulnerable to charges of pilfering. And the eye alights on a certain Texas senator, Phil Gramm. Phil and his wonderful and rich wife, Wendy, have made quite a killing in the past decade from their association with Enron corporation, of blessed memory. There's a Public Citizen release that counts the ways Enron loved the Gramms, and the Gramms loved Enron. Consider that Wendy, high spirited free marketer that she is, was appointed by Bushie the elder to head the Commodity Futures Trading Commission. This is a sad sack commission ostensibly armed to police the derivatives market -- but armed like a boyscout with a peashooter facing down the Nazi Wehrmacht. Even so, you never know when some nasty regulation will actually enforce transparency on futures or options trading, the biz Enron was massively in. So our heroine, Wendy, came to Enron's rescue by exempting trading in futures contracts by Enron, in 1993. It was one of her last acts as a truly altruistic public personality, because she then resigned her chairmanship and, five weeks later, took on an entrepeneurial role on the Enron board of directors. Now, reader, you are thinking that this is merely a coincidence; and besides, boards of directors are notoriously composed of crash test dummies, rubberstamping the decisions of the CEO. But our dear Wendy also served on the Enron Audit committee (this part of her story should be scored to that all time popular hit, "Three blind mice'). So double hitting for that innovator in spot prices in power for you and me, she made off with around a million five. Hey, I'm sure that Phil was uninfluenced by that chunk of change, but you know how a loving, christian couple, in the depth of the night, abed, sometimes talks about the meaning of it all, and our redeemer's beautiful life story, and wouldn't it be nice if some properly motivated senator snuck a provision onto some bill de-regulating the power commodity markets. Probably these sweet whispers were in vain, given Phil adamantine integrity, but maybe something, well, unconscious kicked in, cause golly, Phil did muscle in the bill Enron wanted. For good Laissez Faire reasons, no doubt.
Yes, the money rolls in, but Phil's ambitions no longer play out on the national level, and his mind has turned to contemplating the blank verse of The Prelude or something -- those sweet retirement thoughts. But still, with Enron falling apart this year with a speed and desperation much like that of the East German government in 1989, the Gramms probably also had some heart to hearts about those pesky laws constraining politicians from accepting bribes in too public and outrageous a fashion -- laws which, as we all know, are stronger in the spirit than the letter, but still... Maybe it is time to fold your tent and creep home, with the couple millions of Enron bucks under your belt or in your portfolio to watch over you in the golden years. This will no doubt be used by invidious nabobs of negativism to explain why Phil gave a press conference on September 2 announcing his retirement from the Senate, even though he had amassed a 4 million dollar reelection warchest.
Warms your heart, doesn't it, reader? And so maybe Senator T gets traded for Senator G. in the game. We are not of course suggesting anything so cynical went down in D.C. in reality. In reality, all Senatorial transactions are motivated by the unwavering patriotism of the members of that hallowed chamber. All Limited Inc is doing is, well, muddying the waters. Spewing negativism. Speculating, as is our wont, in an idle and destructive manner.
Some further comments on Senator Torricelli's Houdini like escape from prosecution seem called for.
The question on the mind of the spectator must be: why would the Repugs go along on this deal? After all, damn Senator T with the black spot and Senator Lott will once more be the majority leader, talked to, even, by tv reporters and such.
Well, let's speculate a little bit, children. When one of D.C.'s pirates is caught with his hand in the till, very often a delicate situation arises. Because so many other pirates on the ship have been quietly amassing as much loot as their natural greed allows them. It is a tradition that goes back to the Roman senate. So if Senator T.'s skin is graciously unflayed, one looks around for who else could be outrageously vulnerable to charges of pilfering. And the eye alights on a certain Texas senator, Phil Gramm. Phil and his wonderful and rich wife, Wendy, have made quite a killing in the past decade from their association with Enron corporation, of blessed memory. There's a Public Citizen release that counts the ways Enron loved the Gramms, and the Gramms loved Enron. Consider that Wendy, high spirited free marketer that she is, was appointed by Bushie the elder to head the Commodity Futures Trading Commission. This is a sad sack commission ostensibly armed to police the derivatives market -- but armed like a boyscout with a peashooter facing down the Nazi Wehrmacht. Even so, you never know when some nasty regulation will actually enforce transparency on futures or options trading, the biz Enron was massively in. So our heroine, Wendy, came to Enron's rescue by exempting trading in futures contracts by Enron, in 1993. It was one of her last acts as a truly altruistic public personality, because she then resigned her chairmanship and, five weeks later, took on an entrepeneurial role on the Enron board of directors. Now, reader, you are thinking that this is merely a coincidence; and besides, boards of directors are notoriously composed of crash test dummies, rubberstamping the decisions of the CEO. But our dear Wendy also served on the Enron Audit committee (this part of her story should be scored to that all time popular hit, "Three blind mice'). So double hitting for that innovator in spot prices in power for you and me, she made off with around a million five. Hey, I'm sure that Phil was uninfluenced by that chunk of change, but you know how a loving, christian couple, in the depth of the night, abed, sometimes talks about the meaning of it all, and our redeemer's beautiful life story, and wouldn't it be nice if some properly motivated senator snuck a provision onto some bill de-regulating the power commodity markets. Probably these sweet whispers were in vain, given Phil adamantine integrity, but maybe something, well, unconscious kicked in, cause golly, Phil did muscle in the bill Enron wanted. For good Laissez Faire reasons, no doubt.
Yes, the money rolls in, but Phil's ambitions no longer play out on the national level, and his mind has turned to contemplating the blank verse of The Prelude or something -- those sweet retirement thoughts. But still, with Enron falling apart this year with a speed and desperation much like that of the East German government in 1989, the Gramms probably also had some heart to hearts about those pesky laws constraining politicians from accepting bribes in too public and outrageous a fashion -- laws which, as we all know, are stronger in the spirit than the letter, but still... Maybe it is time to fold your tent and creep home, with the couple millions of Enron bucks under your belt or in your portfolio to watch over you in the golden years. This will no doubt be used by invidious nabobs of negativism to explain why Phil gave a press conference on September 2 announcing his retirement from the Senate, even though he had amassed a 4 million dollar reelection warchest.
Warms your heart, doesn't it, reader? And so maybe Senator T gets traded for Senator G. in the game. We are not of course suggesting anything so cynical went down in D.C. in reality. In reality, all Senatorial transactions are motivated by the unwavering patriotism of the members of that hallowed chamber. All Limited Inc is doing is, well, muddying the waters. Spewing negativism. Speculating, as is our wont, in an idle and destructive manner.
Remora
Here are three grafs from the story announcing Senator Torricelli won't be prosecuted for his buyability.
"Even before Ms. White took over the case from the campaign task force early last year, many legal experts had emphasized the difficulty of successfully prosecuting sitting politicians in cases involving bribery or illegal gifts.
Such cases have been especially difficult when the accusers had legal problems of their own. In Mr. Chang, the prosecutors had a witness whom they themselves had called a liar before he agreed to plead guilty.
The senator himself has never denied that he accepted gifts from Mr. Chang, but said merely that he considered Mr. Chang a friend and that he never took any "illegal gifts." Congressional ethics rules allow legislators to accept certain gifts from friends when they are of limited value and are promptly reported."
Limited Inc is only mildly astonished that there will be no trial before a jury of Senator T.'s peers. Instead, he is going to have to negotiate with the Senate Ethics committee, which holds a position vis-a-vis potentially corrupt politicians similar to the position the Taliban held to Al Quaeda. It would be feeble irony to call the Senate Ethics committee an oxymoron. It is, rather, an offense to the word Ethics. Far better to abolish it once and for all, than to pretend that anything like ethics transpires in the Senate.
The up front thievish behavior of Torricelli was testified to by his "friend," Mr. David Chang. On the semantic salience of friendship in this case, there is a nice little article by Jason Zengerle that prefigures the non-prosecutorial conclusion of the Torricelli investigation; although when Zengerle wrote it, he probably thought he was nailing Senator T. Unfortunately, since legislators decide for themselves those laws that they will have to obey and have riddled them with friendly little loopholes, it looks like Torricelli will emerge unjailed from this contretemps because David Chang is just the kind of sleezeball that Torricelli proudly (and intermittently) claims as a friend. As a friend, apparently, the sky's the limit in terms of giving gifts and getting favors. Limited Inc has experienced this ourselves. Our friends often come over with wads of cash to give to us, rolex watches, and such; sometimes our friends, just like Senator T.'s, insist on taking us to tailor shops and buying us ten thousand dollar suits. That's how friends are, God love em.
The fruits of amity are listed at this NYT site. One is reminded of Charles Keating, of S & L debacle fame, who once commented, when asked whether his 'contributions' influenced political figures, I want to say in the most forceful way I can: I certainly hope so.
Here are three grafs from the story announcing Senator Torricelli won't be prosecuted for his buyability.
"Even before Ms. White took over the case from the campaign task force early last year, many legal experts had emphasized the difficulty of successfully prosecuting sitting politicians in cases involving bribery or illegal gifts.
Such cases have been especially difficult when the accusers had legal problems of their own. In Mr. Chang, the prosecutors had a witness whom they themselves had called a liar before he agreed to plead guilty.
The senator himself has never denied that he accepted gifts from Mr. Chang, but said merely that he considered Mr. Chang a friend and that he never took any "illegal gifts." Congressional ethics rules allow legislators to accept certain gifts from friends when they are of limited value and are promptly reported."
Limited Inc is only mildly astonished that there will be no trial before a jury of Senator T.'s peers. Instead, he is going to have to negotiate with the Senate Ethics committee, which holds a position vis-a-vis potentially corrupt politicians similar to the position the Taliban held to Al Quaeda. It would be feeble irony to call the Senate Ethics committee an oxymoron. It is, rather, an offense to the word Ethics. Far better to abolish it once and for all, than to pretend that anything like ethics transpires in the Senate.
The up front thievish behavior of Torricelli was testified to by his "friend," Mr. David Chang. On the semantic salience of friendship in this case, there is a nice little article by Jason Zengerle that prefigures the non-prosecutorial conclusion of the Torricelli investigation; although when Zengerle wrote it, he probably thought he was nailing Senator T. Unfortunately, since legislators decide for themselves those laws that they will have to obey and have riddled them with friendly little loopholes, it looks like Torricelli will emerge unjailed from this contretemps because David Chang is just the kind of sleezeball that Torricelli proudly (and intermittently) claims as a friend. As a friend, apparently, the sky's the limit in terms of giving gifts and getting favors. Limited Inc has experienced this ourselves. Our friends often come over with wads of cash to give to us, rolex watches, and such; sometimes our friends, just like Senator T.'s, insist on taking us to tailor shops and buying us ten thousand dollar suits. That's how friends are, God love em.
The fruits of amity are listed at this NYT site. One is reminded of Charles Keating, of S & L debacle fame, who once commented, when asked whether his 'contributions' influenced political figures, I want to say in the most forceful way I can: I certainly hope so.
Thursday, January 03, 2002
Remora
It is said that passengers of the great dirigibles experienced flight in a much different way than the passengers of other aircraft: for the passengers on the Hindenburg, the landscape moved by in vast visionary sweeps.
The commentariat often write themselves into a sort of dirigible view of events, vast visionary sweeps which, unlike those available to those lucky balloonists of yore, have nothing to do with this or any other planet.
Limited Inc has just finished Stan Crock's column in Business Week on the "third reason" for toppling Saddam Hussein's regime and the feeling of dreamy irreality couldn't be more complete. Here's the middle grafs, bodying forth his argument:
"But let's consider the Unspoken Argument. The cumulative impact of seeing secular moderates such as the opposition Iraqi National Congress assuming power in Baghdad so soon after a moderate secular regime came to power in Kabul could have a transforming impact on the entire Middle East. For too long, the blithe assumption has been that the two alternatives for government in the region are the current corrupt, antidemocratic, oppressive regimes or the radical fundamentalists.
However, Afghanistan and Iraq could demonstrate a Third Way. The secular traditions of a Turkey or Indonesia could take hold in other parts of the Islamic crescent. Look at Morocco, which is already is starting to transform itself into a more modern political and economic model.
Iraq's enemy, Iran, could be one of the first to change. Without a dangerous neighbor like Saddam, the more moderate forces in Tehran may be able to wrest power from the archconservative mullahs. Jordan and Egypt also could evolve."
Love love love. In Mr. Crock's benign view, a government that hasn't even yet been installed in Afghanistan (a country where the rapid turnover of governments and the dissolution of the countryside into a patchwork of warlord domains isn't the exception, but the rule) is already offering tax exemptions to its native software start-ups. As for the secular traditions of "a Turkey or Indonesia" (and we particularly love the placement of the indefinite article, "a" -- with the implication that these nations are mere interchangeable tinker toys for the can do American spirit), this elides the tricky question of nationality big time. Behind Mr. Crock's back, no doubt, Indonesia recently went through a revolution, and a war in East Timor that many might describe as something other than a secular Woodstock. And Turkey is being buffeted by a debt crisis that is only going to play into the hands of the "Virtue" party. As for the bloodshed in the guerilla war waged by the Kurds, this is out of Mr. Crock's purview entirely.
This isn't to disagree with Mr. Crock's view that there has to be another option for the Middle East besides dictatorship and fundamentalism. But that option is definitely not going to arrive, like the tooth fairy's quarter for the baby tooth under your pillow, by amassing American troops for a unilateral action against Iraq.
It is said that passengers of the great dirigibles experienced flight in a much different way than the passengers of other aircraft: for the passengers on the Hindenburg, the landscape moved by in vast visionary sweeps.
The commentariat often write themselves into a sort of dirigible view of events, vast visionary sweeps which, unlike those available to those lucky balloonists of yore, have nothing to do with this or any other planet.
Limited Inc has just finished Stan Crock's column in Business Week on the "third reason" for toppling Saddam Hussein's regime and the feeling of dreamy irreality couldn't be more complete. Here's the middle grafs, bodying forth his argument:
"But let's consider the Unspoken Argument. The cumulative impact of seeing secular moderates such as the opposition Iraqi National Congress assuming power in Baghdad so soon after a moderate secular regime came to power in Kabul could have a transforming impact on the entire Middle East. For too long, the blithe assumption has been that the two alternatives for government in the region are the current corrupt, antidemocratic, oppressive regimes or the radical fundamentalists.
However, Afghanistan and Iraq could demonstrate a Third Way. The secular traditions of a Turkey or Indonesia could take hold in other parts of the Islamic crescent. Look at Morocco, which is already is starting to transform itself into a more modern political and economic model.
Iraq's enemy, Iran, could be one of the first to change. Without a dangerous neighbor like Saddam, the more moderate forces in Tehran may be able to wrest power from the archconservative mullahs. Jordan and Egypt also could evolve."
Love love love. In Mr. Crock's benign view, a government that hasn't even yet been installed in Afghanistan (a country where the rapid turnover of governments and the dissolution of the countryside into a patchwork of warlord domains isn't the exception, but the rule) is already offering tax exemptions to its native software start-ups. As for the secular traditions of "a Turkey or Indonesia" (and we particularly love the placement of the indefinite article, "a" -- with the implication that these nations are mere interchangeable tinker toys for the can do American spirit), this elides the tricky question of nationality big time. Behind Mr. Crock's back, no doubt, Indonesia recently went through a revolution, and a war in East Timor that many might describe as something other than a secular Woodstock. And Turkey is being buffeted by a debt crisis that is only going to play into the hands of the "Virtue" party. As for the bloodshed in the guerilla war waged by the Kurds, this is out of Mr. Crock's purview entirely.
This isn't to disagree with Mr. Crock's view that there has to be another option for the Middle East besides dictatorship and fundamentalism. But that option is definitely not going to arrive, like the tooth fairy's quarter for the baby tooth under your pillow, by amassing American troops for a unilateral action against Iraq.
Wednesday, January 02, 2002
Remora
We recommend the Round Table in today's NYT Biz section. if you want a pretty good cross-section of Wall Street thinking about the economy. Limited Inc, of course, is not a consensus type of entity -- that the predictions of the three players interviewed average out to a Dow around 11-3 -- that in other words, the p/e will continue at around 23 -- seems incredible. However, the incredibility of a figure has never stopped Wall Street from hitting it. The question is, why should we care. There is something wierd going on in the economy, and everybody knows it. The weird thing is what, exactly, the equities markets are measuring. Here's a quote from one of the roundtable guys (Byron Wien) which should be plumbed slowly:
"You've got to look at what you're entitled to as an investor. In my view all you're entitled to is the profit growth plus the dividend. In the 20-year period from 1981 to 2001, that was about 10 percent. The market during that period gave you about 15 percent. So you got five extra percentage points of reward in relation to how much earnings were increasing. That left the market at a point where, particularly if profits are struggling, there could be some adjustment. And that's why the returns from the market may be below the long-term average of 10 percent."
Coincidentally, this is also the period in which the derivatives market exploded. Except that we don't think this is a coincidence -- we think the meta-investment structure, the market in indexes, options, and the whole bestiary of exotic financial instruments wielded by hedge fund managers is driving that extra five percent.
We recommend the Round Table in today's NYT Biz section. if you want a pretty good cross-section of Wall Street thinking about the economy. Limited Inc, of course, is not a consensus type of entity -- that the predictions of the three players interviewed average out to a Dow around 11-3 -- that in other words, the p/e will continue at around 23 -- seems incredible. However, the incredibility of a figure has never stopped Wall Street from hitting it. The question is, why should we care. There is something wierd going on in the economy, and everybody knows it. The weird thing is what, exactly, the equities markets are measuring. Here's a quote from one of the roundtable guys (Byron Wien) which should be plumbed slowly:
"You've got to look at what you're entitled to as an investor. In my view all you're entitled to is the profit growth plus the dividend. In the 20-year period from 1981 to 2001, that was about 10 percent. The market during that period gave you about 15 percent. So you got five extra percentage points of reward in relation to how much earnings were increasing. That left the market at a point where, particularly if profits are struggling, there could be some adjustment. And that's why the returns from the market may be below the long-term average of 10 percent."
Coincidentally, this is also the period in which the derivatives market exploded. Except that we don't think this is a coincidence -- we think the meta-investment structure, the market in indexes, options, and the whole bestiary of exotic financial instruments wielded by hedge fund managers is driving that extra five percent.
Tuesday, January 01, 2002
Remora
We admire The Economist. Hell, we've written for The Economist. And since we venerate the great media ancestors - the Smart Set Crowd, the Blackwoods writers, Ford Maddox Ford's transition, Dwight McDonald's politics -- we of course find the fullblooded Tory history of the Economist cause for awe and bending of the knees. It is in the pantheon.
But even so... in the Christmas edition's article about the Bridget Jones economy -- the political economy of affluent singlehood that is shaping urban culture -- we are bugged. Bugged by the writing.
Now, Limited Inc isn't so snobbish as to think that trendspotting articles are automatically idiotic. And this one is about a genuine trend. A NY Magazine article of recent memory, the one about single Japanese girls with beaucoup disposable income in Tokyo, also spotted this trend, which means that it is a trend -- the relationship between trend and spotting being one of those performative truths.
Well, we expect gravitas and wit in the Economist. Unfortunately, what we get in this article are the worst vices of the trend article. We get the bogus analogy. We get the uncontextualized, and thus dubious, statistics. We get the exaggeration. We get the feeling that the trend has probably secretly peaked behind the writer's back -- for writing so clueless implies a writer on whom no trend makes an impression until it is pointed out to him by an editor. And as we know, editors live in sealed glass capsules, meaning that when the editor becomes conscious of a trend, it has long passed. Here are two grafs in the middle of the article. This kind of writing is surely making the ghost of Walter Bagehot think seriously about visiting Bill Emmott, the current editor, for one of those Marley to Scrooge talks spirits so love during the holiday season:
"What explains the trend? The key seems to be the higher education of women. In most rich countries, more women than men now go to university; in particular, women make up more than half the students taking professional qualifications in subjects such as law and medicine. As new job opportunities unfold, they often earn as much as similarly qualified men. They find work is fun and it pays well, so they put off marriage. Husbands and babies can wait. �Today, people know that they are going to be married till they are 80. So 40 is the new 30,� says Marcus Matthews of Kaagan Research, a market-research firm.
[Stop the presses for a second, gentle reader. Let's think about this. Is 40 the new 30, or the new 271/2? And notice that Marcus Matthews is ignoring that pesky thing, divorce. Which means that most people don't know that they are going to be married until they are 80. Or at least they don't know if they are going to be married to the people they are marrying. This makes, hmm, a lot of difference. Then there is the "they find work is fun and it pays well..." Is this Ally McBeal, or is it real life? In real life, fun is a word which can cover things like, work 12 hours a day, stay in traffic 2 hours a day, no time for anything else a day. So that what explains the trend might be -- the compensation from all that sensual deprivation. Marcuse, not Faith Popcorn, is the reference here. And do new job opportunities "unfold?" Unfold is such a nice, organic word -- here's the tree of job opportunities, and here's the unfolding jobs, in 'fun' professions, such as law and medicine. And speaking of "fun" - there's another little statistic which has popped up more and more in the literature about medicine: the number of doctors who are dissatisfied with doctoring. The question, would you become a doctor if you had it to do over again has increasingly been answered in the negative by new doctors, who, Lacoon-like among the HMO red tape, might not be aware they are in a "fun" profession]
"Up to now, that has been a strategy that makes sense. More people marry today�at least once�than ever before. Thus fewer than 7% of Americans in their early 50s have never married. Compare that, says Nicholas Eberstadt, a demographer at the American Enterprise Institute, with America in the late 19th century. Then, the marriage market was far less efficient and 20-25% of women never married. The result, he says, has been a sort of democratisation of marriage and motherhood, where almost all women marry and most have at least one child."
Can one say enough about the jargon in this graf, or shall we maintain an embarrassed silence? The democratisation of marriage? Democratisation has automatically come to mean: "more people do." If more people eat chocolate sundaes, it is the democratisation of chocolate sundaes. If do it yourself enema boxes are mass marketed in Walmarts, it means the democratisation of enemas. Democratisation, here, can't debauch itself any more. Jargon, like counterfeit money, finds its own value on the market -- under its own guise, it is equivalent to zero.
As for (shudder) "the marriage market was far less efficient..."
Well:
By the waters of Babylon we sat down and wept, �
when we remembered Zion.
As for our lyres, we hung them up �
on the willows that grow in that land.
For there our captors asked for a song,
our tormentors called for mirth: �
'Sing us one of the songs of Zion.'
How shall we sing the Lord's song �
in a strange land?
We admire The Economist. Hell, we've written for The Economist. And since we venerate the great media ancestors - the Smart Set Crowd, the Blackwoods writers, Ford Maddox Ford's transition, Dwight McDonald's politics -- we of course find the fullblooded Tory history of the Economist cause for awe and bending of the knees. It is in the pantheon.
But even so... in the Christmas edition's article about the Bridget Jones economy -- the political economy of affluent singlehood that is shaping urban culture -- we are bugged. Bugged by the writing.
Now, Limited Inc isn't so snobbish as to think that trendspotting articles are automatically idiotic. And this one is about a genuine trend. A NY Magazine article of recent memory, the one about single Japanese girls with beaucoup disposable income in Tokyo, also spotted this trend, which means that it is a trend -- the relationship between trend and spotting being one of those performative truths.
Well, we expect gravitas and wit in the Economist. Unfortunately, what we get in this article are the worst vices of the trend article. We get the bogus analogy. We get the uncontextualized, and thus dubious, statistics. We get the exaggeration. We get the feeling that the trend has probably secretly peaked behind the writer's back -- for writing so clueless implies a writer on whom no trend makes an impression until it is pointed out to him by an editor. And as we know, editors live in sealed glass capsules, meaning that when the editor becomes conscious of a trend, it has long passed. Here are two grafs in the middle of the article. This kind of writing is surely making the ghost of Walter Bagehot think seriously about visiting Bill Emmott, the current editor, for one of those Marley to Scrooge talks spirits so love during the holiday season:
"What explains the trend? The key seems to be the higher education of women. In most rich countries, more women than men now go to university; in particular, women make up more than half the students taking professional qualifications in subjects such as law and medicine. As new job opportunities unfold, they often earn as much as similarly qualified men. They find work is fun and it pays well, so they put off marriage. Husbands and babies can wait. �Today, people know that they are going to be married till they are 80. So 40 is the new 30,� says Marcus Matthews of Kaagan Research, a market-research firm.
[Stop the presses for a second, gentle reader. Let's think about this. Is 40 the new 30, or the new 271/2? And notice that Marcus Matthews is ignoring that pesky thing, divorce. Which means that most people don't know that they are going to be married until they are 80. Or at least they don't know if they are going to be married to the people they are marrying. This makes, hmm, a lot of difference. Then there is the "they find work is fun and it pays well..." Is this Ally McBeal, or is it real life? In real life, fun is a word which can cover things like, work 12 hours a day, stay in traffic 2 hours a day, no time for anything else a day. So that what explains the trend might be -- the compensation from all that sensual deprivation. Marcuse, not Faith Popcorn, is the reference here. And do new job opportunities "unfold?" Unfold is such a nice, organic word -- here's the tree of job opportunities, and here's the unfolding jobs, in 'fun' professions, such as law and medicine. And speaking of "fun" - there's another little statistic which has popped up more and more in the literature about medicine: the number of doctors who are dissatisfied with doctoring. The question, would you become a doctor if you had it to do over again has increasingly been answered in the negative by new doctors, who, Lacoon-like among the HMO red tape, might not be aware they are in a "fun" profession]
"Up to now, that has been a strategy that makes sense. More people marry today�at least once�than ever before. Thus fewer than 7% of Americans in their early 50s have never married. Compare that, says Nicholas Eberstadt, a demographer at the American Enterprise Institute, with America in the late 19th century. Then, the marriage market was far less efficient and 20-25% of women never married. The result, he says, has been a sort of democratisation of marriage and motherhood, where almost all women marry and most have at least one child."
Can one say enough about the jargon in this graf, or shall we maintain an embarrassed silence? The democratisation of marriage? Democratisation has automatically come to mean: "more people do." If more people eat chocolate sundaes, it is the democratisation of chocolate sundaes. If do it yourself enema boxes are mass marketed in Walmarts, it means the democratisation of enemas. Democratisation, here, can't debauch itself any more. Jargon, like counterfeit money, finds its own value on the market -- under its own guise, it is equivalent to zero.
As for (shudder) "the marriage market was far less efficient..."
Well:
By the waters of Babylon we sat down and wept, �
when we remembered Zion.
As for our lyres, we hung them up �
on the willows that grow in that land.
For there our captors asked for a song,
our tormentors called for mirth: �
'Sing us one of the songs of Zion.'
How shall we sing the Lord's song �
in a strange land?
Monday, December 31, 2001
Dope
Limited Inc and a friend spent some time by a highway last night, looking at the moon. It was a moon well worth looking at.
"Well," our readers comment, jejeune to the point of jaundice, "a moon's a moon's a moon, right? Excuse me, but once we sent a few retread fighter pilot types up there and line drived a few golf balls, that was it with the moon thing. Like, boring, lifeless, dusty, full of craters, and there goes ten billion dollars."
Yes to all of the above. The moon is certainly a de-mystified object, it is certainly the victim of a sort of cultural pollution -- there's no awe in us anymore about it, there's a false sense that we've peed on it, that now the territory is claimed -- but Limited Inc loses all skepticism in the ghostly white shimmer of it, feels that there is definitely a werewolf pull to the moon, some obscure but distinct disturbance in the blood, some ritual passage negotiated between eros and thanatos that eludes cynical dismissal. We've seen the moon in the dark hollow of the New Mexico country night, when darkness seemed more absolute than civilization, and the moon kept spreading out, visibly becoming enormous above the mesas, fantastically hatched there in the bright glare of constellations, its interstellar closeness -- because in solar system terms, the moon isn't that far away from us -- finally comprehensible to the senses, and a bit terrible.
Of course, we've also seen, with the inattention of the urbanite, the moon as a mere shell, or the moon as a mere sign -- there it is again above the freeway, there it is again above the parking lot. Last night we pursuaded a friend to go out with us and salute it with glasses of vodka. The night got cold, the cars going by were rare, and probably a few of the drivers wondered who the hell the lunatics were, sitting there raising glasses to the moon. My friend had a few things she wanted to say to the moon, and so did Limited Inc. Finally it got cold enough that we were shivering and it was making less sense to sit there on the concrete post among the rustling brown grass. So we left. But we left with some faint lunar afterimage inside us, which I hope both assuages the terrible gods of this year, and portends something powerful for next year. And to hell with it if we didn't time it directly on New Years Eve.
Limited Inc and a friend spent some time by a highway last night, looking at the moon. It was a moon well worth looking at.
"Well," our readers comment, jejeune to the point of jaundice, "a moon's a moon's a moon, right? Excuse me, but once we sent a few retread fighter pilot types up there and line drived a few golf balls, that was it with the moon thing. Like, boring, lifeless, dusty, full of craters, and there goes ten billion dollars."
Yes to all of the above. The moon is certainly a de-mystified object, it is certainly the victim of a sort of cultural pollution -- there's no awe in us anymore about it, there's a false sense that we've peed on it, that now the territory is claimed -- but Limited Inc loses all skepticism in the ghostly white shimmer of it, feels that there is definitely a werewolf pull to the moon, some obscure but distinct disturbance in the blood, some ritual passage negotiated between eros and thanatos that eludes cynical dismissal. We've seen the moon in the dark hollow of the New Mexico country night, when darkness seemed more absolute than civilization, and the moon kept spreading out, visibly becoming enormous above the mesas, fantastically hatched there in the bright glare of constellations, its interstellar closeness -- because in solar system terms, the moon isn't that far away from us -- finally comprehensible to the senses, and a bit terrible.
Of course, we've also seen, with the inattention of the urbanite, the moon as a mere shell, or the moon as a mere sign -- there it is again above the freeway, there it is again above the parking lot. Last night we pursuaded a friend to go out with us and salute it with glasses of vodka. The night got cold, the cars going by were rare, and probably a few of the drivers wondered who the hell the lunatics were, sitting there raising glasses to the moon. My friend had a few things she wanted to say to the moon, and so did Limited Inc. Finally it got cold enough that we were shivering and it was making less sense to sit there on the concrete post among the rustling brown grass. So we left. But we left with some faint lunar afterimage inside us, which I hope both assuages the terrible gods of this year, and portends something powerful for next year. And to hell with it if we didn't time it directly on New Years Eve.
Saturday, December 29, 2001
Remora
On the Optimism Front
We packed our Schopenhauer for our LA jaunt last week -- which should tell you that Limited Inc is not a member of the Optimists club, if you were wondering. However, Schopenhauer's extensive pessimism -- the sort of grief only a philosopher could manage, shedding tears over the pain and irrationality of individuation, and even more tears, acidically tinged, over the incongruous and unheard of reputation of Hegel, the contemporary Schopenhauer most despised -- is not a good guide to short range economic forecasts for first quarter GDP growth.
An optimism about such things has reigned in the columns of American newspapers for the past month. One wonders if this is a real boomlet, or if this is mere puffery. Although short term memory loss is the norm in this wonderful land of ours, still, there are those who remember the Y2K year -- the year that the Dow became unhinged, the year that lunatic predictions from George Gilder and James Glassman were seriously debated, even as the stuffing was dropping out of the structure.
Here's the WP today:
Reports Suggest Economic Recovery
Experts See Clear Signs Recession Is Fading by John Berry
"For the first time in many months, a series of economic indicators, released yesterday, all contained solidly positive news, suggesting to many analysts that the recession that hit the U.S. economy last spring may end soon.
The Labor Department reported that initial claims for unemployment benefits last week remained below the 400,000 level for the third week in a row....
Meanwhile, the Conference Board, a New York-based business research group, said its consumer confidence index jumped nearly nine points, to 93.7 this month, after being depressed in October and November following the Sept. 11 terrorist attacks. The increase brought the confidence index back in line with the University of Michigan's consumer sentiment index, which began to recover last month."
But let's look at what that index means. Here's the AP version:
"The Conference Board said consumers� assessment of the current economic climate was slightly more positive in December than November. Consumers rating current business conditions as good increased to 17 percent from 16.8 percent.
However, the board said consumers who felt business conditions were bad rose to 21.7 percent from 20.7 percent last month.
Nontheless Americans are still feeling more optimistic about the near future. The percentage of consumers who expect business conditions to improve rose to 22.2 percent from 17.7 percent in November, the report said. Those expecting conditions to sour declined from 11.6 percent from 16.9 percent."
In essence, Schopenhauerians still seem to outnumber optimists among the hoi polloi.
Limited Inc would like to be optimistic. No, that's not quite right -- Limited Inc would like to benefit from the optimism of others by placing beaucoup articles among the resurgent media. But Limited Inc would also like to be contrarian and hip and regard it all as a bubble. And the small contradiction can only be maintained if there is some wave of money coming in from the East. In the media world, though, it is hard to see that wave. More newspapers are cracking down on freelancers, shrinking book sections, getting the business editor to take over the recipe section when the old coot that used to do it died, etc. Magazines are still not seeing that advertising outreach to the highly confident consumer postulated by the Conference Board. And there's the gnawing question of debt -- as was remarked in the nineties, public debt shrank while private debt exploded. Now public debt is growing -- and there's only so much room in debt space, even with the whacky Fed jiggling us down to 0 down, O percent. I do have to say that the Fed has the best spin in the business -- articles like the WP one are routinely full of the goodies that Greenspan has given us because we were nice, not naughty -- all those car sales! all those home sales! without paying attention to the red that is accumulating because of all those car sales! and the debt load that is not shifting because of all those home sales! and the propadeutic example of Japan, liquidity trap city, which we are all politely avoiding -- a car wreck we are passing by, or at least we hope we are passing by.
On the Optimism Front
We packed our Schopenhauer for our LA jaunt last week -- which should tell you that Limited Inc is not a member of the Optimists club, if you were wondering. However, Schopenhauer's extensive pessimism -- the sort of grief only a philosopher could manage, shedding tears over the pain and irrationality of individuation, and even more tears, acidically tinged, over the incongruous and unheard of reputation of Hegel, the contemporary Schopenhauer most despised -- is not a good guide to short range economic forecasts for first quarter GDP growth.
An optimism about such things has reigned in the columns of American newspapers for the past month. One wonders if this is a real boomlet, or if this is mere puffery. Although short term memory loss is the norm in this wonderful land of ours, still, there are those who remember the Y2K year -- the year that the Dow became unhinged, the year that lunatic predictions from George Gilder and James Glassman were seriously debated, even as the stuffing was dropping out of the structure.
Here's the WP today:
Reports Suggest Economic Recovery
Experts See Clear Signs Recession Is Fading by John Berry
"For the first time in many months, a series of economic indicators, released yesterday, all contained solidly positive news, suggesting to many analysts that the recession that hit the U.S. economy last spring may end soon.
The Labor Department reported that initial claims for unemployment benefits last week remained below the 400,000 level for the third week in a row....
Meanwhile, the Conference Board, a New York-based business research group, said its consumer confidence index jumped nearly nine points, to 93.7 this month, after being depressed in October and November following the Sept. 11 terrorist attacks. The increase brought the confidence index back in line with the University of Michigan's consumer sentiment index, which began to recover last month."
But let's look at what that index means. Here's the AP version:
"The Conference Board said consumers� assessment of the current economic climate was slightly more positive in December than November. Consumers rating current business conditions as good increased to 17 percent from 16.8 percent.
However, the board said consumers who felt business conditions were bad rose to 21.7 percent from 20.7 percent last month.
Nontheless Americans are still feeling more optimistic about the near future. The percentage of consumers who expect business conditions to improve rose to 22.2 percent from 17.7 percent in November, the report said. Those expecting conditions to sour declined from 11.6 percent from 16.9 percent."
In essence, Schopenhauerians still seem to outnumber optimists among the hoi polloi.
Limited Inc would like to be optimistic. No, that's not quite right -- Limited Inc would like to benefit from the optimism of others by placing beaucoup articles among the resurgent media. But Limited Inc would also like to be contrarian and hip and regard it all as a bubble. And the small contradiction can only be maintained if there is some wave of money coming in from the East. In the media world, though, it is hard to see that wave. More newspapers are cracking down on freelancers, shrinking book sections, getting the business editor to take over the recipe section when the old coot that used to do it died, etc. Magazines are still not seeing that advertising outreach to the highly confident consumer postulated by the Conference Board. And there's the gnawing question of debt -- as was remarked in the nineties, public debt shrank while private debt exploded. Now public debt is growing -- and there's only so much room in debt space, even with the whacky Fed jiggling us down to 0 down, O percent. I do have to say that the Fed has the best spin in the business -- articles like the WP one are routinely full of the goodies that Greenspan has given us because we were nice, not naughty -- all those car sales! all those home sales! without paying attention to the red that is accumulating because of all those car sales! and the debt load that is not shifting because of all those home sales! and the propadeutic example of Japan, liquidity trap city, which we are all politely avoiding -- a car wreck we are passing by, or at least we hope we are passing by.
Remora
As our readers probably expect, Limited Inc is a devotee of William Greider. We loved the Fed book, we loved that it was so thick, so textured, so bought, so little read. We loved the story of Jimmy Carter accidentally causing a crisis in the economy by getting consumers to stop using their credit cards (a mistake we will never make again -- conservative Bushies would rather have consumers max their Visas on porno than not whip those cards out at all). We loved One world, ready or not. We loved to compare it to the Olive and the Lexus Tree, a relic of the nineties that ranks up there, as an artifact of decade delusions, with Strachey's thirties book on the inevitability of communism, The Coming Struggle for Power. Which okay, we probably have readers who aren't exactly conversant with agit-prop from the thirties. So our references are esoteric. Sue me.
Anyway, given our admiration, what is it that keeps us from reading Greider's pieces in the Nation? It is, we think, a sense that we have to make a long slog with this guy. Through some very depressing stuff. Still, we recommend his latest on the relationship of China to the rest of the underpaid third world, especially the maquilladora zone of Mexico. Greider writes that the contrast between the 1.25 per hour wage in Mexico and the .25 per hour wage in China is tipping the GEs and Toshibas of the world. So Mexico is finding itself in the unique position of railing against cheap labor. Two grafs of especial note:
"Achieving more meaningful economic and social integration obviously involves huge, complex issues, from Mexican immigration and US development aid to the relationships between currencies, legal systems and environmental standards. But the most difficult issue, one that cannot be evaded, is wages. No one should pretend that US-Mexican wage tensions can be entirely reconciled--of course not--but what is required is a wage-floor trade agreement that, as labor likes to say, "brings the bottom up, instead of pulling the top down." Mexico could only accept this arrangement if it had a genuine preferential status with the United States and Canada--including both significant trade privileges and investor guarantees of long-term commitments as well as serious aid for education, health and infrastructure. Think of this "North American union" as a first step toward someday imposing an international "living wage" standard on the production of traded goods, enforced by penalty tariffs on countries and companies that decline to participate. Producers would have a choice: Pay decent wages to their workers or pay penalty tariffs on their exports, the money to be recycled into development aid.
Obviously, the world is not ready for this (neither are Mexican and American politics), but the road to global reform has to start with a few like-minded nations willing to experiment with new terms because they see mutual self-interest in the bargain. A healthier, self-sustaining Mexico would be a lot better for the United States than a cheap-labor export zone that makes a few people very rich but survives on the backs of desperate immigrants and drug smugglers. US consumers might have to pay marginally higher prices on some items, but US commerce would gain a far more promising market for its exports, and that would help to reduce US trade deficits. Mexico would regain a measure of self-determination, the ability to chart its own course free of the neoliberal straitjacket. "
I think this is a point to make over and over again - while Capital has long internationalized, labor remains the last redoubt of the antiquarian position. Labor has thereby lost its great advantage. There's no reason that the Boeing's Chinese factories and their American factories can't join at the grassroots. Along the border, it is more than time to wake up.
As our readers probably expect, Limited Inc is a devotee of William Greider. We loved the Fed book, we loved that it was so thick, so textured, so bought, so little read. We loved the story of Jimmy Carter accidentally causing a crisis in the economy by getting consumers to stop using their credit cards (a mistake we will never make again -- conservative Bushies would rather have consumers max their Visas on porno than not whip those cards out at all). We loved One world, ready or not. We loved to compare it to the Olive and the Lexus Tree, a relic of the nineties that ranks up there, as an artifact of decade delusions, with Strachey's thirties book on the inevitability of communism, The Coming Struggle for Power. Which okay, we probably have readers who aren't exactly conversant with agit-prop from the thirties. So our references are esoteric. Sue me.
Anyway, given our admiration, what is it that keeps us from reading Greider's pieces in the Nation? It is, we think, a sense that we have to make a long slog with this guy. Through some very depressing stuff. Still, we recommend his latest on the relationship of China to the rest of the underpaid third world, especially the maquilladora zone of Mexico. Greider writes that the contrast between the 1.25 per hour wage in Mexico and the .25 per hour wage in China is tipping the GEs and Toshibas of the world. So Mexico is finding itself in the unique position of railing against cheap labor. Two grafs of especial note:
"Achieving more meaningful economic and social integration obviously involves huge, complex issues, from Mexican immigration and US development aid to the relationships between currencies, legal systems and environmental standards. But the most difficult issue, one that cannot be evaded, is wages. No one should pretend that US-Mexican wage tensions can be entirely reconciled--of course not--but what is required is a wage-floor trade agreement that, as labor likes to say, "brings the bottom up, instead of pulling the top down." Mexico could only accept this arrangement if it had a genuine preferential status with the United States and Canada--including both significant trade privileges and investor guarantees of long-term commitments as well as serious aid for education, health and infrastructure. Think of this "North American union" as a first step toward someday imposing an international "living wage" standard on the production of traded goods, enforced by penalty tariffs on countries and companies that decline to participate. Producers would have a choice: Pay decent wages to their workers or pay penalty tariffs on their exports, the money to be recycled into development aid.
Obviously, the world is not ready for this (neither are Mexican and American politics), but the road to global reform has to start with a few like-minded nations willing to experiment with new terms because they see mutual self-interest in the bargain. A healthier, self-sustaining Mexico would be a lot better for the United States than a cheap-labor export zone that makes a few people very rich but survives on the backs of desperate immigrants and drug smugglers. US consumers might have to pay marginally higher prices on some items, but US commerce would gain a far more promising market for its exports, and that would help to reduce US trade deficits. Mexico would regain a measure of self-determination, the ability to chart its own course free of the neoliberal straitjacket. "
I think this is a point to make over and over again - while Capital has long internationalized, labor remains the last redoubt of the antiquarian position. Labor has thereby lost its great advantage. There's no reason that the Boeing's Chinese factories and their American factories can't join at the grassroots. Along the border, it is more than time to wake up.
Thursday, December 27, 2001
Dope
Limited Inc, with a disgruntled expression on our face, could be found staring out at the jets taxing up and down the concourse at the Phoenix airport yesterday. A considerable portion of our Christmas was lost to the greed of America West. This airline has apparently taken as it's motto the famous words of J.P. Morgan: the public be damned. Damning that small section of the public which had bought tickets on a one o'clock flight from Phoenix to Austin in the naive faith that there actually was a one o'clock flight from Phoenix to Austin, America West gave us a little lesson in corporate irresponsibility that made those of us who had some knowledge of airline deregulation long for the days of the CAB. We approached the representatives of AW, poor sods, who produced this excuse: somehow, a flight crew couldn't be assembled for this flight. Now, let's try to look beyond the implication that America West is run in much the same way as high school plays are mounted ("hey everybody, let's buy a jet or somethin', and like fly it for people and all, and like they can buy tickets and everything... let's pretend to be an airline!"), there is something odious about a company that is willing not only to cut corners -- for surely the real reason Limited Inc and his fellow Austinites were stranded for four hours was that there weren't enough tickets sold for this particular flight -- but to cut those corners while blaming its staff.
Well, we had too good a time in LA to post regularly. We know that there are issues (the fall of the Argentine government, the mole like behavior of Osama Bin Laden, the whole "will these shoes go with my new plastique bomb kit" fashion scene) with which we should manfully grapple. But today our host, blogspot, is experiencing trouble of some cyber-weird kind. We will resume tomorrow with the bons mots, don't worry.
Limited Inc, with a disgruntled expression on our face, could be found staring out at the jets taxing up and down the concourse at the Phoenix airport yesterday. A considerable portion of our Christmas was lost to the greed of America West. This airline has apparently taken as it's motto the famous words of J.P. Morgan: the public be damned. Damning that small section of the public which had bought tickets on a one o'clock flight from Phoenix to Austin in the naive faith that there actually was a one o'clock flight from Phoenix to Austin, America West gave us a little lesson in corporate irresponsibility that made those of us who had some knowledge of airline deregulation long for the days of the CAB. We approached the representatives of AW, poor sods, who produced this excuse: somehow, a flight crew couldn't be assembled for this flight. Now, let's try to look beyond the implication that America West is run in much the same way as high school plays are mounted ("hey everybody, let's buy a jet or somethin', and like fly it for people and all, and like they can buy tickets and everything... let's pretend to be an airline!"), there is something odious about a company that is willing not only to cut corners -- for surely the real reason Limited Inc and his fellow Austinites were stranded for four hours was that there weren't enough tickets sold for this particular flight -- but to cut those corners while blaming its staff.
Well, we had too good a time in LA to post regularly. We know that there are issues (the fall of the Argentine government, the mole like behavior of Osama Bin Laden, the whole "will these shoes go with my new plastique bomb kit" fashion scene) with which we should manfully grapple. But today our host, blogspot, is experiencing trouble of some cyber-weird kind. We will resume tomorrow with the bons mots, don't worry.
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