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.

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.

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.

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?

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.

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.

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.