Dope

Gretchen the light of my eyes -- as a biz journalist you have no peer, but... but I must confess that my heart is straying. Yes, Limited Inc just became acquainted with the Guardian's Gregory Palast. We were looking for earlier articles on Argentina, once hailed, in the carefree days when The Lexis and The Olive Tree was supposedly the law and the prophets, as this amazing success story. The South American way (sing it to a Carmen Miranda beat) went via Chile on to the wondrous policies of the USA, where free enterprise made everything (the water, the roads, the women) so much better. That mythical USA, which today is heading resolutely towards budget deficits, still lives in the advice proferred by American officials like Condoleeza Rice, who had the affrontery to suggest that Argentina repair its budget the other day. Condoleeza doesn't seem to have noticed that, with the American economy taking a serious dive, nobody is so silly as to worry about deficits in the Heimat. But in Argentina, where the economy hasn't taken a dive -- it is the unconscious victim sitting in a burning automobile that just skidded off the road and plummeted down a cliff -- in Argentina, the IMF, in its glorious wisdom, advised a major cut in government spending. The advice came with dope, of course, some 15 billion bailout that went not to the wretched of the earth or the unemployed truckdrivers but to such argentinian stalwarts as Emerging Markets man Steve Hanke:
As Palast points out:
"Now do the arithmetic. On Argentina's $128bn of debt, normal interest plus the 16 per cent surcharge by lenders comes to about $27bn a year. In other words, Argentina's people probably won't net one penny from the $26bn loan package. Little of the bail-out money escapes New York, where it lingers to pay interest to US creditors holding the debt, big fish such as Citibank and little biters such as Steve Hanke. Hanke is president of Toronto Trust Argentina, an 'emerging market fund' that loaded up 100 per cent on Argentine bonds during the last currency panic, in 1995.

Cry not for Steve, Argentina. His annual return that year of 79.25 per cent put the Toronto trust at the top of the speculation league table. This year he'll do it again."

Turn the page with me, children, for the next episode of our exciting story! Oh, I forgot to tell you the title of the book? Let's see, let me get my glasses. Here it is! "How to impoverish a country and influence people!" Recommended, it says, for MBAs. What's that? You want a fairy tale? !! This is a fairy tale, a tale of how an enchanting American prince helped screw up a whole kingdom, and feels like maximum macho unapologetic about it! Like any good capitalist. For here he is, Steve with his 79.25 per cent, in the pages of Forbes magazine, which is always generously opening its double column to the true friends of working people.

Read this enchanting piece, where Steve claims credit for having started Argentina on the road to recovery:

"When I first met Carlos Menem in 1989, he had just been elected president of Argentina and was promoting a program to liberalize its sick economy. Menem's problem was hyperinflation. Until it was killed, his reforms would remain on hold.

What to do? Argentina had already tried almost every hyperinflation antidote in the book, and all had failed. By mid-1990, Kurt Schuler and I had produced a sound money blueprint, Banco Central o Caja de Conversi�n. It called for an orthodox currency board regime that would put Argentina's central bank in a straitjacket."

The straitjacket is, you will remember, one of Tom Friedman's favorite metaphors too. Hanke wasn't totally wrong in his prescriptions, even if the intersection between Menem's reforms and Hanke's currency board strongly favored the investment class. Also (time and time again we have to say this at Limited Inc because monetarists are strangely averse to thinking of capitalism as a creative system) there are other influences on inflation, including the competition that comes with imports. And if inflation goes down, as it did in Argentina, it is a mistake to attribute it to any one cause. But that said, the restraint inherent in pegging the peso to the dollar made sense in that context. It makes no sense now. Instead of a straitjacket, it has become a noose. But Steve can't let go of his creation. His latest column on Argentina is a pathetic defense of a policy that has pretty much ruined the country. We won't take our scissors to this seriously screwed up article, but we must quote one marvelous bit. Steve, like some quack doctor, touts his one size fits all currency solution like this:

"Countries that exited from flawed soft regimes and adopted currency boards or "dollarized" in the 1990s have all seen dramatic improvements in their macroeconomic indicators. Examples include Argentina, Estonia, Lithuania, Bulgaria, Bosnia and Ecuador. Indeed, a shift from a soft regime to a hard one has always ended a currency crisis." Wow, get on board that train, boys. The prosperity of Bosnia awaits you!

There is a more general lesson to be learned from the Argentine crisis, though it won't be. When the class that profits from speculation makes the public policy of a country, the country will eventually suffer. In an essay on Adam Smith, Walter Bagehot explained why nations in the 18th century made a mistake in chosing merchants and factory owners as their favored advisors on economic policy: "Seemingly the most obvious person to consult on matters of trade is the trader; the person who, on first sight, seems likely to know most about a thing, is the person who makes it; and accordingly, the European governments had taken counsel with the producer. But, unhappily, the producer was just the wrong person to consult. What he wanted was a high price for his article, and a monopoly of the market in which to sell it; and the laws he recommended were inevitably framed, more or less, to obtain his wishes; whereas, the interest of the nations which the governments were trustees for, and which they were sincerely desirous to serve, was a "low price", unrestricted commerce from abroad, and a freedom for every one to buy or sell everything at home."

Self interest dictates, to the 79.25 percenter, an economic policy in which the debt the government owes the garbageman for picking up the garbage is secondary to the debt the government owes the emerging markets man for picking up the government's bonds. In reality, a government, unlike a retail store, benefits more from the garbageman. In fact, the bonds are only useful insofar as the garbageman is paid. The world is turned upside down by the New Economy. As always when it is a question of some doubtful utopia, we are told that upside down is its natural disposition. This is the immemorial prejudice of the ideologue; the ultimate critique of the Hanke's of the world is in Gullivers Travels -- book three, the island of Laputa.

And for a more personal side of the Argentine crisis, see this article in the Miami Herald

Dope

We at Limited Inc don't usually read ourselves. We simply go forward to the next topic, with a certain contempt for lingering over the dead and the wounded -- the solecisms, logical gaps, and misspellings of previous posts. But we forced ourselves to read ourselves this morning -- or at least read two week's worth of posts. So many opportunities squandered! So many sensible things dissipated in vain stylistic preening! It is appalling. On the bright side, we are doing a better job of editing, lately. Or so we hope. And the mistakes we make are, after all, dinner table mistakes -- for the whole point of this log is to produce the same effect of spontaneity as is produced by conversation. Our point here is to reassure our readers that we are trying to get better and better. Of course, since our readers are silent, never using the comment tool we took such pains to install on this site, our correctives are still one-sided -- too dependent on our own erratic p.o.v. So it goes.

Remora

Idiocy, open idiocy, in public, like nudity in public, has a certain low erotic charm.

So Limited Inc should have been pleased to read an article that, from beginning to end, is a tissue of error, misreading, illogic, and special pleading. Not since Clinton defended oral sex as a form of non-sex have we seen something like this. It is Jonathan Rauch, who seems to have the brains of a damaged green pea, writing in the Atlantic about why Bush one was right to stop his big bad war before we had taken out (if you'll remember) a man who was "another Hitler". Somehow, though, Limited Inc.'s joy in the piece was mitigated by its racism, its vile sense of American privilege, and our sense that it is depressingly representative of conservative foreign policy thinking.

Rauch gives various implausible and weasily reasons for Bush's great foreign policy failure. His big Ace, which he draws like everybody in the house is going to gasp, is that the fall of Saddam would have split Bushy's coalition. This is bogus. As Patrick Cockburn has reported, the Bush administration's decision that the possible split-up of Iraq would make the Sauds and Turks bolt was taken without consulting the Sauds and Turks; officials from both states have said, in the wake of Iraq's preservation, that they were prepared to pay the price for ridding themselves of Saddam. What the Bush people didn't seem to realize is that Saddam had a reputation all over that was bad enough, scary enough, that the allies could be brought to the sticking point.

But Rauch isn't simply an ace man. He wants to play other cards as well. For instance, here he is as a stone bitch realpolitiker: "The goal of the Gulf War, for Bush and the Arab allies alike, was not to impose a new order on the region but to restabilize the old one. Strategically speaking, that meant caging the overweening Saddam, not toppling him."

Why gee, boys and girls, that does that sound a bit different from what Mr. Bush said to the good old American people, don't it? But given Rauch's contempt for the idea of democracy in the Middle East, it isn't surprising that he has a pretty high level of contempt for it in America, too. Why announce your real war aims to the country, after all -- I mean, they merely elected you, the scumbags.

And of course there is the little matter of what started the intifada in Iraq in the first place -- Bush's famous announcement that he welcomed revolt against Saddam Hussein. SImply skipped over by the inestimable Rauch, who has a true brownnoser's instinct for what parts to leave out of a story. But if pressed he'd no doubt chuckle -- it was a sort of in-joke, I guess. See how many Iraqis believe it and watch em die! Those cut up clowns in the white house, man, they'll joy buzzer you every time!

Having gone blissfully forward in error and deception like a sinner in Pilgrim's Progress, Rauch picks up speed, now: "Tactically, too, destroying Saddam looked costly. The Republican Guard was melting as fast as it could into Basra. Rooting it out could have meant street combat, with significant American and civilian casualties. No one�not the allies, not Bush, and not the Pentagon�relished fighting that type of war, particularly when doing so was not clearly necessary."

Let's see if this is true. The Republican units were paniced. There were revolts breaking out in the Shiite South and the Kurdish north, and they were successful at taking cities. We had the military force on line, on site, to make those revolts successful. We had the power to overthrow a dictator who had initiated a terrible eight year war, which he'd won by using chemicals, and one moreover who had built his power upon the murder of tens of thousands of his own people. We had that power, but oh, we didn't "relish" this. Why? Because Bushypoo and his advisors are "realists." The don't believe Arabs deserve anything so uppity as democracy, or a say so in their own governance. That would have a "bad effect" on, say, the Saudi peninsula, that is ruled by a family of autocratic looters. Never do to upset them. Our intent, at this point, was to imprison a people. Our motives were consonant with our history -- or at least that part of it that exterminated the Indians.

Limited Inc read the article so far as merely another tedious apologetic for our former loser president's mistakes, and not a very bright one at that. But then we got to Rauch's crowning moment and we rather lost our joy in the piece --because it is the moment in which mere cretinism yields to a depth of morally malignity rather repulsive to contemplate:

"Moreover, until 1990 Saddam had been a savage bully, but one America had done business with. It was reasonable to expect that after the fighting he might settle down, play by the rules, and pocket billions in diverted development aid like any self-respecting kleptocrat."

A bully, at my school, was someone who hit other people. With his fist. One guy I remember once put a needle in the toe of his boot, and kicked with it. But at Mr. Rauch's school, apparently, a bully was a little more aggressive - he was the guy who put the Sarin in the air ducts in the bathroom, apparently. The guy who set up torture chambers in the janitor closets. The guy who supplied his buddies with automatic rifles the better to systematically shoot down unarmed civilians in order to put fear into his enemies. Other people call such things a 'crime against humanity', but the knowing Rauch would smile at such naivete. Of course, for the Rauchs, only one crime against humanity has ever happened in history -- on September 11, 2001.

Dope

Going to New Mexico to kill a man -- that was Limited Inc's brainstorm a few days ago, when it occured to us that there was a feature story in Texas sending a crack team of hangmen, out of our well known heart, to our needy neighbor, New Mexico, to help inject a killer and child rapist with a lethal fluid. Texas and New Mexico refused to give the names of the bourreaux, our Lone Star Rosenkranz and Guildenstern, but it suddenly occured to Limited Inc that some magazine somewhere would be interested in this story. Too late: on the same day, Clark, the childkiller, was murdered by the state.

The Albuquerque Tribune ran a big story about Terry Clark, the killer and killed.

Joline Gutierrez Krueger had the byline. Here are the crucial grafs:

"Terry Clark does not seem like a monster in letters and phone calls from death row, rare glimpses of a man few have come to know - or have wanted to - since that day 15 years ago when he put three bullets in a 9-year-old girl's head.

The state Supreme Court affirmed Clark's death sentence on July 8, 1999. Dena Lynn Gore had already been almost 13 years gone, longer dead in a White Oaks cemetery than she was alive. Clark had spent those years as inmate No. 34930 in the state penitentiary, segregated from the general population more for his own safety than anything and allowed out of his cell one hour a day.

"Yeah, this place is a trip," he wrote Sept. 28, 1999. "I have met a lot of people in here, and it has not been all bad. But I still do not wish to die of old age in here, either. Nothing could be offered me to want to spend my life in this place. Nothing!!"

Clark had grown weary of Mitchell's attempts to save him from execution, and he began filing briefs on his own seeking the right to waive counsel and the right to die as the courts had ordered."

In short, the classic American psychodrama. Clark wants to commit suicide, the state wants to kill him, and the opponents of the state committing the capital crime of murdering murderers (or other criminals) trying to prevent the machine from operating one more time.

Our p.o.v. has been outlined in some scattered post a week or so back: we oppose the death penalty. But our more novelistic interest is in the executioners. Our readers by now are way ahead of us: of course, you are thinking, what would be perfect for this post, Mssrs. Limited Inc, is a nice long quote from Joseph de Maistre's amazing and sinister defense of the ancien regime, Soirees de St-Petersburgh. Wow, such readers we have! We are totally in synch with your wishes! And besides, it is one of the great moments in political rhetoric, de Maistre's astonishing elogium to the hangman. Here's our translation:

"I believe that you are all too clever not to have more than once meditated on the fact of the hangman. What is this inexplicable being who prefers, before all the other agreeable, lucrative, honest and even honorable jobs in the world crowding upon the mind which muses on human force or dexterity, that of tormenting and even putting to death his fellows? That head, that heart, are they made like our own? Don't they contain something peculiar and strange to our nature? For me, I can't doubt it. He is made like us on the outside; he is born like us; but he is an extraordinary being, and in order that he exist in the human family there had to have been issued a decree, a fiat of the Creative Power. He is created like a world. See what he is in the opinion of men, and understand, if you can, how he can ignore that opinion or confront it! hardly has authority chosen his residence, hardly has he taken possession of it when his neighbors recoil, giving him the blind eye. In the middle of this solitude, this sort of vacuum formed around him that he lives alone with his female and his little ones, who make known to him the pleasing sounds of the human voice. Otherwise, he would known nothing but shrieks... a lugubrious signal is given, an abject minister of justice comes to knock on his door and tell him he is needed. He gets up, he goes, he arrives at a public place entirely filled with a palpitating, dense crowd. They throw him a poisoner, a parricide, a blasphemer. He grasps the wretch, stretches him out, ties him to a horizontal cross. He lifts his arm, while a horrible silence surrounds him, and one hears only the cry of bones breaking under the iron rod and the screams of the victim. He unties him, carries him to the wheel. The broken limbs dangle in the spokes. The head hands miserably, the hairs stand up, and the mouth, like a urnace, only gargles, at intervals, some bloody words to call upon death. He finishes, our hangman. His heart is beating, but it is with joy. He applauds his own work, he says in his heart: no one runs the wheel better than me. He climes down, he extends his bloody hand, and justice tosses him some gold coins which he carries off, making a passage through the ranks of the horrified audience that yield to him as he passes. He goes back and sits at his take and eats. Then, he goes to bed and sleeps. The next day, in waking up, he reflects on anything else than what he did yesterday. Is this a man? Yes. God receives him in his temples, and permits him to pray. He is not a criminal, yet no language would consent to say that he is virtuous, honest, estimable, etc. No moral praise is due him, for all such praise supposes a human relationship, and he has none. Yet all grandeur, all power, all obedience rests on the executioner. It is the horror and the tie of all human association. If you take this incomprehensible agent from the world, in that instant order is turned into chaos, thrones are thrown into the abyss, and society disappears."

Remora

Story of the day is the further melt-down of Enron. Remember Enron? Company voted most likely to be evil during the Bushy era? The company that once traded at 80 dollars per, and now is trading at a tenth of that? The company that might be sold to Dynegy (not, alas, Dynasty, which would have been soooo appropriate -- all Texas companies bear an uncanny resemblence to tv shows about Texas, and though Enron is based in Houston, the Dallas comparison, down to the match between J.R. and Ken Lay, Enron's CEO, is downright separated at birth). A year ago, the idea that a no-name would acquire one of Wall Street's hot shot companies - a company that treated California much like one of Marquis de Sade's heros treated the unfortunate Juliette -- would have been an ultra-giggle. Now, of course, those who are still invested in the energy trading or whatever it does company are praying this is the good news. The story in Fortune by Bethany McLean is a pretty good intro to the depths to which Enron's sunk:

Story by Bethany Maclean in Fortune:

Ending grafs go for the jugular, or in this case the balance sheet.

"Perhaps the biggest concern is the true profitability of Enron's core business, its energy trading operation. The heart of the Enron story, the stuff that captivated Wall Street, was the company's transformation from a stodgy gas pipeline into a technology phenomenon that could make a market in anything, from electricity to broadband. It's impossible to know if Enron has used the partnerships and off-balance-sheet vehicles to influence its reported earnings. Enron also mingles profits from asset sales with its trading income--and despite its pledges, in the most recent quarter the company provided less, not more, disclosure on that front. In addition there are questions about how aggressively Enron books trading-related revenue. In fact, a knowledgeable source at a competitor says that Enron recognizes its revenues at two to five times the rate of that company's. If energy trading is really such a fabulous business for Enron, why does it need to play so many games?

As for Ken Lay, who was once thought to be in Jack Welch's league, he has accomplished the truly remarkable feat of destroying much of what was left of Enron's credibility in just a few short months--along with some of his own. Some observers suspect that the problem is not that Lay is avoiding questions, but that he doesn't know the answers. In either case, Lay is a long way from keeping his promises. "

Irony (which is now, of course, officially unpatriotic) is that Fortune was a big pumper of Enron's cyber with-it-ness in the day. I'll find the links for that later today.

Limited Inc is starting from the fourth chapter of Ezekial tonight. So get a stiff drink.

"And, behold, I will lay bands upon thee, and thou shalt not turn thee from one side to another, till thou hast ended the days of thy siege.

Take thou also unto thee wheat, and barley, and beans, and lentiles, and millet, and fitches, and put them in one vessel, and make thee bread thereof, according to the number of the days that thou shalt lie upon thy side, three hundred and ninety days shalt thou eat thereof.

And thy meat which thou shalt eat shall be by weight, twenty shekels a day: from time to time shalt thou eat it.

Thou shalt drink also water by measure, the sixth part of an hin: from time to time shalt thou drink.

And thou shalt eat it as barley cakes, and thou shalt bake it with dung that cometh out of man, in their sight."

Yes, from time to time thou shalt drink; from time to time even eat meat, twenty shekels worth. This, my readers, is the emblem and essence of the writing life. This week, Limited Inc searched high and low for funds, having to meet certain emergencies, like rent. And of course we are begging in the full, arrogant knowledge that we command the language, the Queen's tongue. If this were the eighteenth century, man, we'd be cleaning up. But in our heart we know we are screwed -- command of the tongue is worth zip in the market place. We could have made more, this year, bagging hotdogs and white bread at the local store. This has gone on for three freelancing years, and each month Limited Inc decides, okay, I'll quit. This month we are making more of an effort, having put out resumes to spas and architects lauding our ability to answer the phone, file (you are a writer? Do you like know the alphabet? -- kewl!) and generally bake our barleycakes with the dung that cometh out of man, in their sight. So far, no responses. So we are doing as much as we can, on a freelance basis, with the Austin American Statesman. And crossing our fingers that something will take us out of this hell. Hell, you think, is a metaphor, but no, no, we are talking pretty realistically. What else do you call a world in which the man who designed the awful popup page which displays that awful, unnecessary and surely never bought X-2 digital camera or whatever it is (go to Yahoo for anything and you'll see what we mean) is living in the lap of luxury, raising his idiot children as he sees fit, while we are living the life of one of those dying 19th century bohemians. That has to be hell -- it is the overthrow of all rationality, all value, of Western Civilization itself ( lately given such high marks by the commentariat) in favor of mere piggery. Piggery forever.

On that note, take a look at Cynthia Cott's cutely named: are we dead yet:

Nice graf:

"In the media sector, an estimated 100,000 media jobs were eliminated in the past year or more, according to IWantMedia.com�and many editorial types fear a new wave of layoffs any day now."

Dope

Two posts tonight! Limited Inc.'s limited readership should appreciate this, although maybe they will groan over the verbiage. Sorry.

Ahem, vee vill begin our lecture mit ein simple fifisection of a wabbit...
Oops, sorry about that, ladies and germs -- wrong set of notes!
In the November 5th New Yorker there is a column by the astute but limited James Surowiecki, who makes the standard case against breaking the Bayer patent on Cipro. The case goes like this: to come up with an antibiotic takes years of R & D, and R & D costs beaucoup millions; so if in the end, the anti-biotic isn't a moneymaker, then R & D into other anti-biotics will be inhibited. Thus it is socially advantageous not to bust Bayer's balls, so to speak.

Unfortunately, as Surowiecki sleepwalks through his econ 101 lecture, he adds a number of facts that contradict his larger point, and support the idea that monopoly actually has an inhibiting effect on medically important R & D. He averts to the slowdown in antibiotic research after 1967, a generally agreed upon high point in the war against infectious diseases. That slowdown, he contends, was market driven:
"Besides, given the choice between making an anti-biotic that a person might take for two weeks once in a lifetime or developing an anti-depressant that a person would take every day for the rest of his life, drug companies naturally opted for the latter." If S. could be shaken out of his dogmatic slumbers for a bit and made to read back his own sentence, he might notice that monopoly, here, does the opposite of what he claims it does. It levels the field so that it makes it more profitable to de-emphasize exploring anti-biotic pharmaceuticals as compared to the more lucrative anti-depressives. In other words, bad research drives out good. And the penalty for that is minimal, given that anti-biotics are being held in a sixteen year bondage according to federal law, and the patent time frame is easily extendable. S. even is hip to the result of this: "that's why in the past twenty-five years they {big Pharma] have developed just one new class of anti-biotic." Well, let's look at correlations. We have an increasingly sophisticated sphere of intellectual property laws, and we have an increasingly debauched drug research system, more interested in those nifty sex-drive-n'-hair enhancers than in coming up with cures for multiple drug resistant tb. Now if the state were sensitive to this, it would not hand out monopoly power like candy. If there was a smaller time frame, the sex-drive-n-hair enhancers would have to be marketed more efficiently, as generic drug companies can come up with amazing copies quickly. In this atmosphere, the profitability of anti-biotic drugs as compared to others would go up, since there is less likely to be a major profit in copying them, and there is more reason to emphasize them for their developers. They would be mid-list drugs, steady sellers. Moreover, breaking up the monopoly power of big Pharma would recognize the R & D real world - which is networked through a university system largely subsidized by the good old Gov. Perhaps smaller companies can't compete with giant companies that dragoon, or tempt, researchers into more frivolous but lucrative research. But if there were more starters, there might just be more incentive to do that major research. In other words, more competition, lower entry costs, is what we should be aiming at.

Of course, Surowiecki's idea that tech comes when you lay out money as automatically as an old pooch trots to the dogfood bowl when you put out the Gainesburgers is pretty naive. It shows zero feeling for the history of the golden age of medicine, which was driven, pre-1967, much more by an ethos of public healthcare than by the numbers pharmaceutical giants are used to now. And another hint: the fons et origo of that era is clearly the biggest of all state endeavors of the 20th century -- as with most of our technology, the modern medical era can be tracked back to WWII. War is the mother of invention.