Remora

I know -- the few readers I have, my friends, do they want another post about boring economics? How about some fun stuff? I was thinking of doing a post about Buffon's proto-pragmatism, knowing that there is overwhelming interest, right now, second only to that in Bond's home run record, in the first book of Buffon's Histoire naturelle and its aggressively anti-Cartesian stance -- but noooooooo - I think I will do this instead.

There's a NYT story today, and a Nation article by the always elegant William Greider, which should be read in conjunction. So that those among us who are opposed to the rule by economist - the decisions of a bunch of pointy headed bureaucrats in the WTO and other assorted international organizations - get a sense of the extent of that rule, right now.

First, the NYT article:
U.S. Will Appeal Tax Ruling After Talks With Europe Fail
essential graf:
The office of the United States trade representative said today that it would appeal a World Trade Organization decision against a tax law that permits American multinational companies to avoid taxes on foreign profits. The law saves companies like Boeing (news/quote) and Microsoft (news/quote) a total of about $4 billion a year.

Then the Nation article The Right and US Trade Law: Invalidating the 20th Century
which takes a look at the unfortunately little known school of Takings theory slithering out of that noxious pit of intellectual error, the University of Chicago, like a snake out of a snake charmer's basket in some old b grade horror movie. The theory, in short, says that government regulation is a form of seizing property, and as such, must be compensated. This is from the same school that encourages limiting liability claims individuals can make on corporations. In other words, it is the school that would allow corporations to make unlimited transfers of cost to third parties. That regulation is justified by social cost is denied completely by this school. It is libertarian theory run mad.

These people, you probably think, are harmless nuts. Unfortunately, as Greider points out, they have quietly influenced the wording of the NAFTA agreement so that it actually embodies takings theory. Why not, since you could never do this democratically. And now, Bush wants to expand his power to make similarly invidious trade agreements. Will the Dems roll over for this? Hard to tell. If anti-WTO organizers are smart, they will definitely try to get the California case Greider mentions - Methanex v. United States - into the spotlight, like in some nice hyped 60 minutes segment. Otherwise, the quiet reaction will proceed apace.

Remora
I'm a little sick today. Sore throat, feverish, and all day I've been trying and failing to complete a review that I should have done, I really should have done as a good person and upright citizen, two weeks ago. I'm having trouble framing it -- I'm having trouble restraining myself from inelegantly ladling the tons of research I did, all the things I found out about the Ottoman empire, about Persian miniaturists, and about Vasari, all over the thing (some more gravy, dear?).
Also, Johanna, who I thought was coming to visit from Denmark, e-mailed me that it's a no-go.

So, you're expecting the same old same old rant about the war. But no - no, today the Nobel Prize went to three economists, one of whom, Joseph Stiglitz, is rather famous. He's famous for having resigned from the World Bank as a dissenter from the World Bank IMF approach to global economic policy. He is, by a fluke of history, on the side of the kids, or some of the kids, in the anti-WTO rank and file. So of course I'm happy for about the prize. The prize usually goes to prize stinkers -- it is has become a smoke signal from the Swedish upper class that they want lower taxes and the luxuries of other of the world's upper classes. But lately they have taken out their teeth, voting squishy -- last year for Sen, now for Stiglitz. Who knows, maybe Galbraith (fils) has a chance.
I wonder how the Times is going to handle old Stiglitz getting the prize. Seeing how they have a faith in neo-liberalism much bigger than a mustard seed -- in fact, so big they have no room for any other dissenting opinion.
On Stiglitz, well, you have to read his piece,

WHAT I LEARNED AT THE WORLD ECONOMIC CRISIS.
The Insider
by Joseph Stiglitz

Two really really nice grafs -- but read the article:

"The IMF likes to go about its business without outsiders asking too many questions. In theory, the fund supports democratic institutions in the nations it assists. In practice, it undermines the democratic process by imposing policies. Officially, of course, the IMF doesn't "impose" anything. It "negotiates" the conditions for receiving aid. But all the power in the negotiations is on one side--the IMF's--and the fund rarely allows sufficient time for broad consensus-building or even widespread consultations with either parliaments or civil society. Sometimes the IMF dispenses with the pretense of openness altogether and negotiates secret covenants.

"When the IMF decides to assist a country, it dispatches a "mission" of economists. These economists frequently lack extensive experience in the country; they are more likely to have firsthand knowledge of its five-star hotels than of the villages that dot its countryside. They work hard, poring over numbers deep into the night. But their task is impossible. ... The mathematical models the IMF uses are frequently flawed or out-of-date. Critics accuse the institution of taking a cookie-cutter approach to economics, and they're right. Country teams have been known to compose draft reports before visiting. I heard stories of one unfortunate incident when team members copied large parts of the text for one country's report and transferred them wholesale to another. They might have gotten away with it, except the "search and replace" function on the word processor didn't work properly, leaving the original country's name in a few places. Oops."

I shouldn't give the impression Stiglitz is a radical. He has the same fondness for trade agreements of most mainstream economists. He thinks NAFTA is nifty. I don't. But he actually has a sense that economics is embodied in the Lebenswelt, a truly unusual perspective. Most economists have a way of thinking of culture, of manners, of extra-economic values, as being so much dead zone, a set of collateral and irrelevant information. It is the singing of the numbers they sit and listen to, those siren models.

Also on the World Bank contretemps, this article from Salon.

Remora
The War on Terrorism spawns curtailment of rights by paniced legislators should be the headline. We are lucky that the kooky right has an unwavering committment to at least one of the first ten amendments. And Russ Feingold gets high marks (he had, in Limited Inc's book, low, low marks for his Ashcroft vote) for standing up to the madness.
Time's story, and two grafs
Not So Fast, Senator Says, as Terror Bill Gains Ground
"Both the House and the Senate are expected to consider legislation this week that would expand the powers of law enforcement agencies to investigate and punish suspected terrorists and those who support them. Leaders in both chambers are trying to push the legislation through with expedited procedures but face several hurdles.

The legislation in the House differs significantly from the bill pending in the Senate, most notably because it puts a two-year limit, known as a sunset provision, on some of the new powers. There is no such provision in the Senate version. Leaders are talking of a potential compromise, perhaps a three- or five-year sunset provision."
Barney Frank is right - without the sunset provision, this legislation is poison.

Blank entry. Read below.

Dope

About twenty years ago, when I was an emotional young man - mine was a generation of emotional young men, the seventies guys, always breaking down and retiring to mental hospitals or moving back home -- I resolved to toughen up, to become a much less emotional man. There is a french word I love - desinvolture - which has the sense of lucid, disinterested, and leans towards cynical. I was attracted to writers and thinkers who valued the disinvolte above everything else -- the Tallyrandian ideal, above the fray and participating on one side or the other with the private proviso that such alliances were temporary.

Well, sometimes I think desinvolture comes close to callousness. Yesterday's post is a case in point. Discussing war as if casualties were mere logs on the pyre is a bad thing to do, especially when it is my bombs and cruise missiles that, right now, are hurting and killing real people. And of course real people in those airplanes are themselves targets, although targets of a regime that is ill equipped and incapable of supplying itself with weapons of its own manufacture.

But my point was not callous. In this century, there has been a dominant theory of war. One of the thinkers of this theory, Ernst Junger, called it totale Mobilmachung -- total mobilization. He wrote in the thirties, and in some ways he, along with Schumpeter (to whom I devoted a post a couple of days ago) and other conservatives, tried to come to terms with two historical events: World War I and modern industry. In World War I, the usual feedbacks failed. That is, when both sides started experiencing outrageous casualties, they did not sit down and negotiate -- instead, they extended the theater of conflict, and they applied technology to it. In the end, all sides were, in Junger's term, totally mobilized.

Well, this idea has an intuitive appeal, and a lot of theoreticians of war took it as the model of what 20th century war was all about. But if we look at Junger's model and we apply it to the second World War, we'll find a discrepency between theory and practice.

What, after all, happened at the end of World War I? The powers that were completely mobilized in the West -- France and Russia -- suffered a near revolution and a real revolution. Germany also suffered an internal collapse. The information provided by the casualty count was undisguisable, and eventually a saturation point was reached among the civilian population.
What happened at the end of World War II? Something a little odd, really. There was no internal revolt in either Germany or Japan against the war to the very end. If the populations were really totally mobilized, you would think that the World War I scenario would happen again.

I think it didn't because the partisans of total mobilisation missed something. When you read Speer about Hitler, or general histories of the war, one of the striking things about his leadership of the war was that he tried to cushion total mobilisation. Again and again he refuses to ration a product or do something to disturb the domestic German population even though, theoretically, this is the most logical military thing to do.
Why?
Perhaps the reason is the Nazi leadership did not want to make the mistake the German high command made in World War I - they did not want to totally mobilize the masses. Instead, they wanted to preserve a buffer zone of everydayness, so that majority of the population could live at some plausible disconnect from the war. Of course, the population really couldn't, not with the bombardment of the cities, but Hitler's gesture, here, should not be dismissed. The history of the West since World War II shows, if anything, a tendency to segmented mobilization. This is, of course, partly because of the parameters of the Cold War -- the two sides were defined by their production of nation-destroying armaments . But it is also because the legitimacy of any nation that conducts war under conditions of total mobilisation, or risks appearing to the population as willing to pursue that course, is placed in hazard. The Vietnam war, with its draft and its increasingly visible effect on the US economy, is a case in point.
We have, at the beginning of the 21st century, achieved a convergence of technological distance and segmented mobilisation that has brought about this situtation: the US, and other modern economic powers -- France, Britain -- can conduct wars without even disturbing domestic everydayness. Although nineteenth century powers experimented with this kind of war -- it was, in fact, the heart of the colonial adventure -- the World War I example has weighed so heavily in the mindset of military thinkers that the regime of segmented mobilisation -- the ability of a nation to seem perfectly at peace, to preserve its Alltaglichkeit without flaw - while making war - has grown up pretty much theoretically unperceived.

This puts other less advanced powers in a quandary. A state like Libya, for example, that challenges the United States can be so disabled that it will not be able to sustain its challenge, and might be reduced in the way it sustains its everydayness. A state like Afghanistan is really in the same position.

But... state's like Afghanistan, that are run more like criminal enterprises than like states -- with an adhoc collection of armed bands -- have one paradoxical advantage. They can hook up with those organizations that can risk attacking the everydayness of the great powers. They can even melt into them. This happened in Somalia. The attack on the WTC, whatever else it was, felt, and was perceived to be, warlike. There are those that argue that it was criminal, but perhaps Mary Kaldor is correct to suppose that the line between criminality and war has to be re-drawn in the era of New Wars.

Anyway, I should have taken off the mask of desinvolture yesterday. Sorry.

Remora

Lag time.

Let history show that while the bombs and cruise missiles were falling on Kabul, I, Roger Gathman, was doing the two step with a friend to the music of B.B. King at the Ausin Blues Festival.


The crowd at the festival, when we got there in the afternoon, was subdued. I hadn't listened to the radio or read the newspapers that morning, deciding, in a fit of absent minded good will, to make a lemon pound cake instead. Lemon pound cake, alas, was verboten - the fascists at the entrance sniffed it out like I was smuggling in cocaine, and quickly scotched my gesture as the shabby anti-capitalist ploy it was. The order of the day was, get your food at the booths for a considerable markup, or else. Who was I to think that somehow, at a blues concert, we could have a brief glimmer of coolness? So the whole cake had to go briskly into the trash. The musicians -- including Stevie Ray Vaughn's old group, Double Trouble - played to a field that was weirdly divided between seats and blankets -- with the seats a higher price. Although this probably paid for the lineup, it had the disadvantage of collecting the most geriatric and mute section of the audience in the key position right before the stage. It was as if the music had to traverse an acre of vacuum before hitting the groovers in the blanket section. By nightfall, however, we had all agluttinated into one throbbing mass, and even the geriatrics made a show of rushing the stage for Buddy Guy, throwing caution to the wind.

I heard about the attack from one of our party, but our discussion of it was truncated. Who wanted to discuss it?

And I still find myself in an odd position, at least for me: I have nothing to say.

This isn't just emotional exhaustion. I have nothing to say, partly, because we really dont know what the engagement in Afghanistan is like. If this war is anything like our two previous military outings, in Kosovo and Iraq, what we have to say now will form around erroneous perceptions and half understood information. After all, can any of my readers really envision Kabul? There's a lag time in modern war - while the weapons have become technically much more real time, benefiting tremendously from computer systems that have revolutionized the dart game between the world, always a vast target, and the shooters, the long distant manipulation of war means that, in a real political sense, we - and I include here Washington decision-makers - know less about what is going on than we did before. When damage is a relationship between the oh too weak and yielding flesh and the de-humanized system of delivery, a vital feedback is cut out of the system. That vital feedback is -- traditional military casualties. It is hard to imagine that this war will not be fought by infantry, in the end, rather than navy cannon tenders and bombadiers, so this might not be true. But we are learning that old style war, with its piles of battlefield bodies, evolved a feedback system that is lacking in newstyle war. Those bodies were markers of committment by both sides, and the feedback was about just how strong the committment was. Old style war contained, in other words, a system of internal limits. Newstyle war contains different limits. The lag time I am talking about is more intense. Those decisions that limit and shape aggression, when concentrated utterly on targetting rather than mobilization, make us spectators instead of participants. That this war might have its greatest effect in Indonesia, as the Washington Post reported this morning, is something that, as spectators and decision-makers, we don't expect or understand. In other words, the limits of war, on one side, have been pushed out, but on the other side, the side of the less technologically advanced recievers of our glorious weaponry, the response has been to make war viral -- to spread it by low tech means in many places.

All of which means -- I have nothing to say.

Check out, however, what John Lloyd has to say about Berlusconi's famous remark about Western Civilization being superior to Islam. Ah, Western civilization is such a good idea that we should try it some time, as Oscar Wilde or Mohatma Gandhi said. I'll say more about the Italian Prez, the current Orlando Furioso of Western Civ later.

New Statesman - Focus

Remora

Gretchen Morgenstern, how do I love thee?

In the nineties, I used to read Tom Byron's articles in the New York Observer as my guide to what was going on in the world of Money. He was wry, he was sardonic, he was on top of bullshit, he was having a great time, as the bubble inflated, pecking away at some of the peculiar intellectual corruption that creeps into eras of enthusiasm.

Let me count the ways...

And then, for a while, I was writing for Ken Kurson's Green magazine on business. Reviewing books that were, broadly, business oriented. So I immersed myself in business journalism, and I discovered -- not shockingly -- that business journalism is mostly bad. On a daily basis, the most erroneous news and views can be found on your local business section. The reaason is simple. Whereas reporters covering politicians are allowed to have a healthy dislike for politicians, no such critical distance is allowed between biz reporters and your neighborhood confidence men. So biz reporting becomes mainly rolling out the conventional wisdom.

I love thee to the heights, and depths...

Looking around for models, I was struck by the much higher quality of British reporting and reporters. My favorite book during this time was Devil Take The Hindmost, by Edward Chancellor, the Financial Times journalist -- still a scorching look at the Efficient Markets Theory which is behind most legislation on banking and investment. I also fell in love with Frozen Desire, John Buchan's extended meditation on money. Unfortunately, as a columnist and reporter, Buchan isn't as good. I know -- several biz books I reviewed, he also reviewed. And my reviews were deeper. It isn't that I'm an egotist -- actually, I found that surprising. Buchan knows a lot more than me about how markets work. He is just not willing to go all out on an occasional piece.

.... and breadths my soul can reach....

Now, the reporter to read, oh, not just read, to fall head over heels for, is Gretchen Morgenstern. She is the NYT's shining star -- although I wonder how many people have noticed that? She's been consistently on the money for the past two years. Her Sunday pieces are so fine, so fine -- the bleak vision in the background, but never too bleak, never black on black, the contrarian mistake of such as James Grant, and, surpremely, with the consciousness, the full knowledge, of who she is quoting in the foreground. Most biz reporting goes wrong by going to all the usual suspects -- quoting the hot guru or the available analyst of the moment. And these people have an agenda, mes freres. With Gretchen, you know that she knows. She is so SMART.

Another thing -- biz reporters are encouraged to be lazy -- the positive spin has no downside, I guess that's the management idea. So they often put together information like a committee of the blind weaving a quilt --patches go in no particular pattern. But oh my brothers and sisters, read today's column by G.M. and watch how beautifully she does numbers. Numbers are the bane and wonder of biz reporting. If you don't know how to put them together, it is like listening toa child play chopsticks -- a painful experience. But G.M, the beauteous G.M., knows that the numbers aren't bullshit -- a too hasty nominalistic view. Rather, you have to know something about your categories, and your context, before the numbers start to sing. Some people simply figure that out. God bless the old crook, it was Michael Milken's genius, in the seventies, to figure out the numbers on high risk bonds. He was right, although this doesn't mean he didn't abuse his power, and that he got off easy for what he did to the economy.

So, this is my song of love -- which shows those skeptics out there that I do have a heart. And Gretchen rules it.
.