Remora

Nietzsche's birthday (as well as that of one of his commentators, my friend Kathy Higgins) was yesterday. In his honor, here's a translation of one of his Dawn of Day numbers:

"The fearful eye - Nothing is more feared by artists, poets and writers than that eye which sees their petty deceits, and which by and by perceives how often they have stood on the border where the paths led either to innocent pleasure in itself or to the making of effects; which can write up the tab for them, when they have purchased too little with too much, knowing when they have sought to elevate and ornament, without themselves being elevated in the least; which penetrates the thought through all the disguises of their art as it first stood before them, perhaps as a shimmering figure of light, but perhaps, also, as a theft of the common-place, that they have had to extend, abbreviate, color, complicate, pepper, in order to make something of it - oh this eye, which spots in your works all your discomfort, your spying and greed, your imitation and excess (which is just envious mimicry), which knows your embarrassed blushes all too well, as it knows the art you employ to disguise these blushes, and to explain them away even to yourself!"

The evil eye of the critic -- dragging with it that vague,Volkish dread -- is naturally not liked. LI pictures it as one of those symbolist lithographs, an eye floating through space like a big, malign hot air balloon. Something Rops, or Moreau, might have drawn.

Those blushes (Schamrote) -- yes, we know those blushes. LI once wrote several large reviews for the Austin Chronicle. Large in the NYRB scale. They were on various topics -- cancer, the economy, the environment. And every time, some paragraph, some sentence, some word would stand out -- and we would feel intense shame. Because it would be a dumb sentence, the wrong word. Mostly this was our fault -- in the process of editing, we had let it pass.

But let's congratulate ourselves on one thing, shall we? We have not felt the blush that comes from presenting a dishonest argument. Unfortunately, Christopher Caldwell should be blushing this week for his column in the NYPress.

Caldwell is good, as we've said before. Somewhere before, you find the post. While Caldwell is a conservative, he is not dogmatic, or stupid. He is a briliant reader -- we read his book reviews with unmitigated respect. And LI has always assumed that Caldwell has that ineffable quality, intellectual integrity. But this column should bring on a major case of Nietzsche's Schamrote. A lot has been written about the Left's whiny response to 9/11, and how the Left is disconnected from basic human emotions of loyalty to the locale, etc. Well, in our opinion, the proposed war in Iraq has had an amazingly corrupting affect on the Right.

We mean something, well, very Nietzschian by intellectual integrity. The standard comes from science. You can be a pundit, you can be an economist, you can be a journalist, but the standard comes from a discourse that has organized itself around the proof process. That doesn't mean that pundits should experiment, or refuse the evidence of their sensibilities -- that qualitative evidence is what is most valuable about the propos, the opinion column. But opinion has standards. The pundit imagination, like any cognitive effort, should conform to a social duty. This duty is to imagine counter-factuals. Derived from this duty is the duty to understand the selective exhibition of evidence.

These are the first two grafs of Caldwell's column:

"In the days leading up to Thursday�s overwhelming House vote to let the President attack Iraq, consultant Bob Shrum and pollster Stanley Greenberg were sending a memo to Democratic candidates explaining how to handle the vote without getting burned. The stakes were high. Elections are three weeks off, and the public loves the President�s position on this one. If the U.S. has to go it alone against Saddam Hussein, the country will be in favor, by 46 percent to 29, according to a Harris poll. With an okay from the UN Security Council, support for the operation rises to 91-2.

"Shrum and Greenberg proposed to get their guys out of a pickle by having them take both sides of the Iraq issue. Peaceniks could avoid looking soft on Saddam by burying their objections beneath assurances of "support for the war on terrorism in general." But gung-ho warriors should also hedge their bets, since, according to Greenberg�s polling, "the down-the-line supporter of the President in Iraq actually runs significantly weaker than the proponent with reservations."

The public loves the President's position on this one? Caldwell isn't stupid. He knows that the Harris poll he is quoting is one of several polls, and that collectively they have pictured much more ambiguity than Caldwell allows for. He cherrypicked the most gung-ho poll to shore up his position -- for Caldwell does, indeed, love the President's position.

Meaning, LI thinks, the position that he assumes Bush has, which is going in and invading Iraq, rather than the position presented in the Cincinnati speech, which could plausibly be headlined in Europe as backing away from war.

It isn't that LI thinks the anti-war position is popular. Whether it is popular or not, it is our position. But the idea of an aroused populace, which is what Caldwell implies, is a mirage. Here's the latest Gallop poll:

"But the current results suggest a somewhat different scenario. According to the poll, Democrats enjoy an electoral advantage among those who care most deeply about the economy and those most concerned with the possibility of war with Iraq, suggesting that there may be a protest vote on both issues. Likely voters who cite Iraq as the most important issue, for example, oppose invading that country by a two-to-one margin, 66% to 33%. They also indicate they would vote for Democrats over Republicans by a 16-point margin, 56% to 40%. By contrast, among all likely voters, opinion on war with Iraq is evenly divided (47% favor invasion, 46% oppose), as is the vote for the two parties."

Now, Caldwell might think this Gallop poll is wrong. But no poll that I've seen, besides the Harris figures he quotes, would lead anyone to say the public loves the President's position on the war. And that variability of responses, those shifts, tells us that love is precisely the wrong word. The public loved the Afghan invasion. But it doesn't love the proposed Iraq invasion, even though it will support it.

That doesn't mean Caldwell couldn't have made a case from his own impressions that the war will be popular. Or that the Harris poll is necessarily wrong -- I could imagine arguments that would shore it up. But quoting it, as Caldwell does, without referring to the number of other polls that contradict it, is intellectually dishonest. It is the difference between political forecasting and political p.r. -- the latter of whcih consists of trying to make something popular by calling it popular. In the world of stock market speculation, this is known as the greater fool theory -- you buy a stock in order to sell it at a higher price by pumping it up, regardless of its fundamental value. Caldwell should be better than this. But Iraq has this corrupting effect on the right wing. Bad news when we do (and LI thinks we will) invade -- the same meretricious analyses, the same credibility gap opening between what is really happening and the propaganda at home. Vietnam really is looming on the horizon. And it is not going to be good for the Right, we think.

Remora

The journalist beat

For months, LI has been beating on a drum that is made out of the cyber-skin of James Glassman. The disintegration of the business press, which in the last week saw two more casualties -- Forbes ASAP and Upside -- has not prompted the kind of investigative fervor that is revved up by, say, the kidnapping of blond California tykes. Still, there's a lot to say about it, and we've been boringly, boringly on target about this issue. Well, in memes we trust -- Washington Monthly has an article about this topic by journalist Philip Longman. Longman begins in the self-critical mode, although it never reaches a properly Maoist depth. Here's a couple of grafs from the meat of the article:

"I was once proud of my profession and resentful of those who criticized it. For more than 20 years, I rode the great boom in business journalism that began in the early 1980s. I like to believe that at least some of my stories helped to enlighten readers and remedy wrongdoing. But today, I'm more likely to admit--at least on a bad day--that I spent my youth hustling Tyco shares to senior citizens.

Just as Americans put far too much faith in the integrity and intellectual prowess of stock analysts and other supposedly disinterested financial watchdogs during the boom, they also put far too much stock in business journalism, and have a right to be disappointed and angry. Like many of the industries we once covered, business journalists built their own bubble during the last decade. And now--as is appropriate for an industry that grew rich by dishing out so much bad advice and flabby reporting--business journalism is currently suffering the same financial fate as Wall Street and Silicon Valley. The Industry Standard --where reporters once took time off from chronicling the achievements of dot-com heroes to enjoy in-house massages and open-bar parties graced by belly dancers--is history, along with many other formerly high-riding business rags. And even the most venerable and established business publications are in trouble. The Wall Street Journal has suffered huge layoffs. Forbes, no longer profitable, is reducing staff and executive salaries, eliminating the 401(k) plan, and raising cash by auctioning off old man Forbes's various art collections. Business Week , which championed the "new economy" and in the late 1990s proclaimed an end to the business cycle, saw its advertising plunge from 6,000 pages in 2000 to 3,786 last year, and may finish 2002 with even fewer."

So far, so good. Alas, Longman, revving up for some fancy shooting, never takes a nice shot at a named target -- besides the obvious Cramer and Glassman. This is one way to cover your behind: criticize the bubble of biz journalism without naming the journalists. Worse, Longman apparently believes strongly in the Efficient markets theory. That this theory conflicts with the use of the term bubble, which he sensibly employs, doesn't seem to phase him:

"Few business journalists spend much time analyzing balance sheets. But even if they did, they wouldn't be of much help to folks trying to figure out how to invest their 401(k)s. This truth was forced on me when I set out to learn high finance (after years of writing about it) at Columbia Business School. Here I was, a 40-something guy on a fellowship for mid-career business journalists, surrounded by 20-something whiz kids who would shortly go off with their newly minted MBAs to dazzle Wall Street. And what was the first lesson our finance professor drove home? That even after spending two years and $60,000 at Columbia Business School, none of them would be able to outperform the markets except by sheer luck or inside information."

If Longman really believes his second sentence, than he can't really blame business journalists for the negligence alluded to in the first sentence. Oddly, he doesn't reflect on the contradiction. LI thinks that Longman is right, if he is floundering towards the proposition that business journalists should not think of their jobs as that of advising investors, as opposed to informing the public.

Still, the idea that an MBA won't be able to outperform the market over the long hall is, firstly, contradicted by some well known instances (among them Warren Buffett); and second, depends on breaking up the market into time segments, and elastic definitions of risk that are convenient to the EMH guys. In fact, Longman's discovery of this principal couldn't have been worse timed. During a down market, the pick and chose method of investment emerges as a competitive speculative tool in comparison with the idea of parking your money with a money fund and forgetting about it.

A good critique of EMH is this paper written by Andrew Smithers and Stephen Wright. The discrepency between bubble talk and EMH talk is revealed by what Smithers and Wright call the "extreme form" of EMH: that financial markets adjust immediately and perfectly to new information. Thus, the three hundred some point rise in the NYSE Friday represented a perfect adjustment of markets to new information. That information has to do with the fundamental prices of stocks. Well, although EMH detours around the problem of short term volatility, I buy Smithers and Wrights story about predictable regularities in the market that count against the premises of EMH. Smithers and Wright talk about one of them that we are getting acquainted with over the past two years: "...stock returns are negatively correlated to over the long term, so that periods of high stock returns are typically followed by periods of low returns." The EMH view, which has an ideological quotient that satisfies your average libertarian economist, is what the Longmans will always hear in their classes at Columbia. Joseph Stiglitz won the Nobel Prize, a couple of years ago, for showing that perfect efficiency would collapse the market. The market will always be incomplete, and the information distributed through it will always be assymetrical. Neither Stiglitz nor the experiments of behaviorial economists have made, or will make, a dent in the equilibrium model.
So, Longman should have thought a little bit before unsealing his astonishing revelations among the hotshot MBAs.

Remora

On the subject of Iraq, the two major Washington newspapers, and the two major Washington journals of opinion (The Weekly Standard and The New Republic) are all loudly belligerent. While the WP and The New Republic are (reluctantly, inconsistently) "liberal" journals, and the Washington Times and the WS are boldly and bluntly conservative, they are all agreed that we have to go to war right now, and no fooling around.

The Ithaca, New York city council has voted not to go to war with Iraq. That is an entirely appropriate step, since the war is less the U.S. versus Iraq than D.C. vs. Iraq. Rarely has one locale been able, by its own feverish will, to pull a whole country behind it. But D.C. has become a place of fevers; fevers from which the rest of the country suffers. Who wanted the years of impeachment? Who wanted Whitewater? D.C. Watergate, another D.C. fever, at least caught on in the rest of the country, so that by the time it was over, the whole country really cared. This time, the whole country supports the war only insofar as they reluctantly have to pay attention to it. There was no groundswell of revulsion against Saddam Hussein going on out there in Mississippi, or Texas, or even New York.

As I remember the days leading up to the Gulf war, the country was passionately engaged. I was passionately opposed to it, marched against it, and remember the number of people who supported the war. Now, I was in the minority, then, and according to the polls, I'm in the minority now. But those polls are screwy. They record more fluctuation than support. And, talking to people, I don't feel, even among Bush's supporters, any strong feeling about Iraq. This war is not being driven by the popular will, in any shape or form.

Conservative boilerplate, in the days of Nixon, was that Washington was out of touch -- in fact, the very name of the city, rolling off the lips of your average Southern demagogue, was synonymous with Gog -- or is it Magog? In any case, one of those places that one knows the Anti-christ right at home in. This was before the Southern demagogues took the capital. It has been some twenty-two years since the forces of Reagan stormed the place. Although the conservative wind-up sometimes weedily harks back to the good old Washington Babylon routine, conservatives know that they have finally become the Washington establishment. Reagan's issues have become the default issues: welfare, they are against it; a strong defense, they are for it; they want the muscular foreign policy and no weepers, and there is polite tittering when Senator Byrd takes the floor to quaintly talk about the powers of congress.

The sheer lunacy of D.C. -- the way it brands people, immediately, as serious on the strength of one set of conformities, and dubs people fringe for representing any view that isn't moderately conservative to conservative, has been shown by two things recently. One was the reaction to Al Gore's Iraq speech -- there was an almost audible shifting in the seats in D.C., and then the condemnations flowed, until they became the acceptable version of the story -- which became a story about the race for the Democratic presidential nominee, since D.C. had long ago decided that Gore's objections to belligerence were, in themselves, fringe-ish. The other is the blase reaction to such utter lunacy as is expressed in this NYT article about Bush's "plan" for an occupied Iraq.


"U.S. Has a Plan to Occupy Iraq, Officials Report

By DAVID E. SANGER and ERIC SCHMITT

WASHINGTON, Oct. 10 � The White House is developing a detailed plan, modeled on the postwar occupation of Japan, to install an American-led military government in Iraq if the United States topples Saddam Hussein, senior administration officials said today.The plan also calls for war-crime trials of Iraqi leaders and a transition to an elected civilian government that could take months or years."

The NYT is expanding on an earlier report in last Sunday's LA Times that goes to the same territory.

LI gets into a sort of stylistic problem with stories like these. We have given a good look around at weblogs, and we've been struck by the pall of insult that hangs over the political ones. Pervasive invective diminishes the shock it aims to convey. Indignation, rather than revenge, is the dish that is best served cold. But LI can't read about the U.S. Army calmly occupying Iraq for a couple of years (like our successful occupation of Vietnam?) distributing the oil wealth, laying down a constitution, and trying Iraqi leaders for war crimes (say what? are the judges then going to try themselves, for aiding and abetting?) without spontaneously switching into insult mode. And this, this is the kind of thing D.C. takes seriously.
I can't think of a worse nightmare than a dream you can't get out of.
This is that nightmare.

Remora

Trailing distantly in the wake of the comet...

Well, people are starting to wake up to LI's complaint about the lack of competition in the executive labor market. The Economist deigns, even, to notice that something is rotten in Coutersport -- although they assume the attitude of ingenues in a brothel:


"The market is also characterised by extreme secrecy. Companies may run advertisements for technicians and accountants, but they rarely advertise the top job�and if word of a candidacy leaks out, the person concerned usually has no option but to rule himself out of the race. Mr Khurana argues that the search process, with its emphasis on confidentiality, restricts the hunt for potential candidates and puts enormous power in the hands of the recruiting firm. And, precisely because it is such a restricted and secretive market, it is bad at price-setting. Hence the immense sums that companies offer outsiders to persuade them to take the job, sums that then influence the pay of other chief executives. Because a search firm's fee is typically one-third of a new recruit's negotiated annual cash compensation, they have every reason to push up pay.

True, the market finds only a small (but rising) minority of all the bosses appointed each year. Most big firms still choose an insider for the top job�though many boards assume their inside recruit would be available for hire in the marketplace, and so still pay the �market� price for him. Once a firm opts to look outside, any internal candidate inevitably comes to look less impressive than the names on recruiters' lists: 75% of outsiders appointed in 1985-2000 had previously been chief executives or company presidents. "

Well, gee whiz. I bet everyone reporting for the Economist is just amazed by this pattern of interlocking interests that prevent a competitive labor market place from taking place. But the article ends on one of those conflations of natural and class constraints so dear to the Marxist analyst of ideology. See, it just doesn't seem that in the executive sphere, the same laws could apply as do in the sphere of, say, middle management. The authors are commenting on a recent, highly commented book by Khurana about the rise and fall of the charismatic CEO. Now for the drums and the dying fall:

"Even Mr Khurana is stumped for ways to make the market for bosses work much better. Letting shareholders elect their chief executive, perhaps from a slate of competing candidates, is likely to remain the stuff of corporate-governance fantasy. Changing the way headhunters are paid might discourage them from ignoring internal stars in favour of external candidates, particularly expensive ones. But they are likely to remain at the heart of the market, for the only practical alternative is for the board to do the search itself�a hunt that might not extend far beyond the 19th hole of the nearest golf club.The best hope is that boards, closely watched by today's more vigilant large shareholders, will be clearer about the problems a new boss must solve. They should forget about hiring another firm's boss on the strength of his eloquence on CNBC, and care more about operational skills and an ability to read a balance sheet. In the market for bosses, as in any other, the best way to improve efficiency is for consumers to remember the ancient rule of caveat emptor, or buyer beware."

Well, if Mr. Khurana is really so stumped, he ought to read LI's post for September 25 and 26. And hey, being a big hearted lefty type of guy, I'm givin' away my ideas for free!

Dope


LI doesn't usually read the NY Press for pretty articles -- we skim the controversialists, and move on. But this week, there is a very nice little article about Writing in New York: and no, it isn't some damn take on Jonathan Franzen's earmuffs. It is about the very civilized sounding NY Society Library. Lincoln MacVeagh, the writer, is happy to indulge in the causerie that Joseph Mitchell perfected -- a NYC stroll among odd fellows. Well, we think that form is un-improvable. Here's the first three grafs:

"Anthony Trollope didn�t need a writing desk; he was perfectly happy composing his novels in crowded train compartments. Not every writer possesses such power of concentration. Virginia Woolf insisted on several thousand pounds and a room of her own before she could get on with the job, and it�s my guess that most of us are more like Mrs. Woolf than Mr. Trollope.

The trouble is, it�s not easy to find a room of one�s own. Manhattan apartments don�t come with spare bedrooms, and renting an office at $1200 a month is out of the question. So where is a writer to write? One answer is the New York Society Library at 53 E. 79th St.

Founded in 1754, the Society Library is open to the public and membership costs $150 a year per household. It houses a good collection, a magnificent reading room and an elevator that is as elegant and temperamental as a Park Ave. hostess. The library opens at 9 and on any given morning you�ll find a handful of authors waiting outside to start work."

It sounds so much more civilized than our quarters. LI writes on a heavy office desk, one with black, pressed metal drawers crammed with drafts, envelopes, cds, pennies, letters and forms that we were urgently requested to fill out years ago, and that we didn't, and, far back in the top left hand drawer, a condom in plastic wrap, which, we believe, was given out at some long ago SXSW event. Our efficiency apartment is one of those rooms that never seem to get enough light, or get the light right -- somehow it always falls in some slightly irritating, oblique way on the page, which is a real bother for a person whose living consists of reading books and writing about them. If this sounds like the genteel life, it is certainly not: it's assembly line work without dental. I recently estimated that, in the past three and a half years, I have reviewed over four hundred books. At an average of 300 pages each, that comes to what, 120 thousand pages? Plus the books read to supplement those reviews -- research and such. Plus books read for enjoyment. So you can see that the question of light, far from being an aesthete's pre-occupation, is more in the nature of an occupational hazard.

On the topic of writers we are reviewing: we've been enjoying the marvelous autobiography of Anthony Burgess, Little Wilson and Big God, which we are reading, natch, in preparation for a review of Burgess's upcoming bio. What we like about Burgess -- what we love about Burgess -- is his luxuriant, sprawling, variegated, I don't give a damn English. It is nice to read a man who is not afraid that the dictionary's going to bite. Here he is, going on about having a childhood case of scarlet fever:

"My stepmother, knowing my disease was damnably contagious, was more anxious to shoo me off the premises than solicitous about my headache and nausea. Dr. Sneddon wound the handle of our extension telephone and told 21 Princess Road (Moss Side 1274) to call an ambulance. Anges shrieked "Me baby!" at the other end (I had played with the child the day before) but was calmed. I was taken to where I started -- northeast Manchester, Monsall Isolation Hospital, between Monsall Road and Northhampton Road. There, while I desquamated, I completed my primary education."

A lesser writer would have crossed out 'desquamated'. I had to look it up. It means to shed skin. It is a word I am now proud to know -- that "squa-" sound, as in sqalid, with the denunciatory de-, reproduces the sickly squirm of the skin shedder. It made me think of a recent piece by Jonathan Franzen on William Gaddis that was in last week's New Yorker.

Franzen's essays, lately, remind me of the title of one of Norman Mailer's books: Advertisements for Myself. Except with Franzen's coy grad school mannerisms the title should be: Valentines to myself. The man is incorrigbly smitten, and writes as if he was taking himself out on a date. He's cute, he impresses himself, and at the end of the evening he presumably gets to third base with himself. But that's something I just don't want to know. Neal Pollack's parody catches that perfectly. In any case, Franzen begins the essay (the burden of which is a general, essentially not very smart condemnation of Gaddis' work) with a letter he received about The Corrections from a woman who noted down four difficult words used in it, and asks: who are you writing for, the sophisticates who read the New Yorker? Then she calls him an asshole.

Franzen doesn't have the wit to say: no, I'm writing for people who read the Reader's Digest; which, after all, features, or used to when I was a kid, a monthly vocabulary builder. I loved that vocabulary builder. A large vocabulary, like a free public library, used to be one of the signifiers of the autodidactic blue collar class. I come from that class, or a region just a bit above it. So did Anthony Burgess. The old socialist dream of the commons -- riches for everyone -- still guides my politics, and I believe the Readers Digest vocabulary builder is a spar from that shipwrecked Utopia. Autodidacts of the world unite, you have nothing to lose but your standing in the minds of Jonathan Franzen's sillier readers -- among whom, sad to say, I count Jonathan Franzen himself. The common readers first book, and last book, will always be the dictionary. Only a intelligence that has permanently stooped to pander to power equates the common reader's taste to the kneejerk anti-intellectualism of the bogus populist.

Remora

Isn't this sweet? Outgoing senator Phil Gramm -- that's what all the news releases say -- is set to join UBS Warburg:



ABC News announces it in the easy tones that embody the flow of senatorial personage to business personage and back:

"Senator Phil Gramm will soon become vice chairman of UBS Warburg, the investment banking arm of Switzerland's biggest bank, UBS Warburg said on Monday.Gramm, who will take up the private sector post when his Senate term ends later this year, follows a well trodden path of key legislators who join top Wall Street firms. Gramm has been in Congress for 24 years, and co-authored far reaching legislation in 1999 that repealed a prohibition on companies offering banking, brokerage and insurance operations under one roof."

Curiously, nobody connects a few dots. So Limited Inc will take up the pencil. How about this?

1. Wendy Gramm serves on the board of Enron. Preceding this nice little sinecure, she sits on the Commodities and Futures Commission and gives Enron a nice little waiver to embark upon its energy trading business without any pesky federal regulation. After eight years and about 600 thousand dollars, Wendy, on the Accounting committee of the Enron board no less, is shocked, shocked to learn that the company has been looted as thoroughly as the Russian looted Berlin, circa 1945.

2. But as that looting is drawing near its close, certain high up personages in Enron have not wholly given up the idea that, in the last moment, they can lick the spoons. Greg Whalley, among this seedy crew, is operating, supposedly, as Enron's President. It is his decision to reach in the piggy bank and award compensatory amounts up to a million dollars a piece for the people who are sitting at Enron's energy trading desk -- which, you'll remember, was made possible by Wendy Gramm's fortuitous waiver. He justifies these awards by going on about necessary personel, and the need to keep them from jumping ship. Of course, he doesn't allude to the vulgar fact that the energy trading desk has been losing money hand over fist. Or that the compensation comes directly out of the hide of the older workers in the gas pipes division -- yokels all.

"A top Enron executive wrongfully allowed employees who stayed with the company to cash deferred-compensation claims worth at least $32 million, while denying similar payments to former employees, legal experts say. And the experts said one-time Enron Chief Operating Officer Greg Whalley may well be personally liable for the payments distributed in October and November. A lawyer for Whalley recently told the Chronicle that his client had allowed dozens of company executives to cash out their deferred-compensation plans because they were still "providing value" to Enron. But retirees and other ex-employees who sought to cash out at the same time, or earlier, did not get approval."

3. Well, what is a hardworking president to do? Got to keep the energy section going until you can sell it, and yourself with it, to some lucky company. And guess who that company is, sweethearts? Why it is UBS Warburg: here's the announcement, dated February of this year, in Computerworld.

"A wholly owned subsidiary of London-based UBS Warburg, which is itself the investment banking subsidiary of Swiss bank UBS AG, the re-formed energy exchange has acquired Enron's gas and power trading IT infrastructure, its intellectual property and 625 of its former employees (see story).

"When the sale was finalized [Feb. 8], those people became UBSWenergy employees," said company spokeswoman Jennifer Walker. Most notable in the group is former Enron President and Chief Operating Officer Greg Whalley, who rose to that position in August after former Enron President Jeff Skillings left unexpectedly."

4. And so now Senator Gramm, the honorable Senator Gramm, who seems to have slipped through this awful mess that must have, just must have been caused by government regulation (ask the guys who write the editorials for the Wall Street Journal) with his wonderful wife Wendy by his side, unbowed by her experience and comforted, perhaps, by that half a mil she earned for two weeks work a year, is headed, by coincidence, for the refuge of the high end final Enron looters. Quelle coincidence! Not that we are accusing anybody of striking a deal, especially not good old dirty fingered, corrupt, cheating, lying, stealing, black hearted, selfish, conniving, worthless Phil Gramm -- as we like to call him, jokingly, in Texas. We simply think that it is, indeed, a small world after all, and one in which Phil simply keeps running into people he's helped out, and who want to help him out in turn.

Remora

The chatter between members of the governing classes, up to June of this year, had been that Lula da Silva, the labor candidate for president in Brazil, had to be defeated. The threats became as thuggish as the manicured set gets. Here's what George Soros had to say:


According to Rossi's reporting, published on June 8th in a major Brazilian daily newspaper, Folha de S. Paulo, the markets believe that Luiz In�cio Lula da Silva (the leftist candidate, of the Workers Party, or PT, who is well ahead in the polls) will default on the debt payments if elected. Thus, says Soros, the markets are already betting against Brazil, specifically against the Brazilian currency, the real. If Lula indeed wins in the two rounds of the elections, scheduled to happen on October 6 and 27, the financial situation would be so dramatic that he wouldn't have any option other than defaulting on the debt.

Faced with the intrinsic totalitarianism of such prophecy, Soros acknowledged it, and added: "In
Ancient Rome, only Romans voted. In modern global capitalism, only Americans vote, Brazilians do not."

Soros, much celebrated for the beautiful sentiments about civil society with which he often perfumes the air, gets down to brass tacks here. Even vampires who read John Locke, at the end of the day, want their quota of vein.

However, a change occured after that interview. One wonders if there was a sense that one had been, well, a little too bold. The new line is that Lula is a poodle leftist, in the Tony Blair mould. Indeed, this is a good bet: in the U.S. in the nineties, and in Europe right now, a vote for the left almost guarantees economic policy from the right. The technocrats of the left are bored with labor. They are definitely bored with the urban poor, and their intractable problems -- best to solve them through massive police sweeps. What the technocrats of the left like best are to be interviewed for the Financial Times, and praised for their "bravery" in standing up to (otherwise known as betraying) their constituencies.

This is the line taken by Franklin Foers in The New Republic (an article that is not, alas, on-line) After explaining that Wall Street is "freaked" about the prospect of Lula, Foers provides the reassuring contrarian note:

"The markets have cause for displeasure: None of Brazil's three candidates are fervent devotees of the Washington Consensus. But their fears of Lula are out of date. The IMF bailout conditions $24 billion worth of loans on budget surpluses, severely limiting any future president's inclination toward reckless spending. What's more, Lula isn't significantly more protectionist or anti-globalization than his competitors. In fact, unlike Gomes and Serra, who are scrambling to move beyond their center-right bases by pandering to working-class resentments, Lula is moving to the center in a bid to win over skeptical middle-class voters. Ironically, the onetime radical may be the best hope for neoliberalism in Brazil."

Well, yesterday was the first step in Lula's probable ascent to the presidency. Here's the NYT:


"Mr. da Silva had never won more than a quarter of the first-round vote in three previous attempts at the presidency. Though he forced a runoff in his first try, in 1989, voters in the past have always been suspicious of his party's socialist platform and questioned his qualifications for office. For this campaign, however, Mr. da Silva revamped both his image and his program. He backed away from earlier threats to repudiate Brazil's foreign debt and to break with international lending organizations like the International Monetary Fund, emphasizing instead measures that would allow Latin America's largest country to export more and therefore generate more jobs and growth.

Mr. Serra, in contrast, as the candidate of the multiparty coalition that has governed this nation of 175 million for nearly eight years, has had to bear the burden of popular dissatisfaction with rising unemployment and a stalled economy. He has also been seriously weakened by disarray within the government camp and by and his own lack of charisma compared to Mr. da Silva."

One of the questions that has to be hanging here is: how is one to deal with an international financial system that did what it did in Argentina? That is, found a system of inefficiencies and left a desert? If it wasn't obvious before, by now the end of history thesis so beloved of the globalization crowd has been stripped of its pompous Hegelian subtext and laid bare for what it is: a collection note from a debt collector. Argentine debt, looked at in the light of day (a block of hours much deplored by the Vampirish set), has a somewhat freakish appearance -- what on earth induced the international lenders to loan out that much, and what on earth induced the government to take that much? Obviously, it was a way of paying for the New Deal State while installing the Chilean state. While, in the U.S., eight trillion dollars can evaporate in three years (as they have, in the markets) and the cars just keep on selling, Argentina doesn't have that scale. Whether the U.S. will continue to have the leverage of scale is a question the Soroses of the world don't want to ask right now. Brazil, in the eighties, famously leveraged its position as one of the grand debtors in much the way English dukes used to leverage their gambling debts at Harrolds. But if there is a capital strike against Brazil -- and the odds are pretty good that there will be one -- LI wonders if that gambit will work.

That is a sad note to end on. We aren't actually that pessimistic. We are rather cheered by Lula's victory. But our political anhedonia, right now, is nearly terminal.