Third World Asset Allocation

An editorial in the WSJ today points out the great crisis facing us in another way: When measured in euros the real US per capita GDP is down 25% since 2000. Germany's is up 4% and is higher than the US per capita GDP. The US, measured in currency other than the dollar, is experiencing a decline in wealth.
25% is a big decline. I watched a TV show the other day following two British women house hunting in Cyprus; they were state employees who were evaluating properties I could never consider. The immortal state financial reservoir aside, how did this happen? How has this slow strangling of the dollar been tolerated? Certainly the economists advising on a national level see and know what is happening.
I think they see and know very well. They have decided--wrongly, I think--that the competitive capitalistic system, with its winners and losers, creates enough social instability--or the threat of same--that various distinctive products and services in the country must be homogenized, regardless of the decline in both lifestyle and quality they know will follow. Growth and development will be left to other countries.
This can be very tricky. Declining GDP allows for less and less internal competition as money leaves the system for better rewards elsewhere. Money is created instead of wealth and the currency falls further. The currency continues to flee the country or goes to hard assets (usually augmented with borrowing.) Finally a sad, subsistence-based culture emerges with its inevitable militarily uniformed elite.
It is easy to give the Olympics to Rio; Chicago is old news.

Field of Dreams

My concern over the economy is greater than the obvious impending debt crisis, it is the peculiar management of it. No individual economist, if asked, would suggest the expansion of a household budget with more debt in order to meet an impending insolvency; the economist would examine the budget, the expenses, the assets and the liabilities and start making sacrifices. An expansion of credit, like a bridge loan in business, would be reasonable as an intermediate step towards something definitive--a step to gain time or leverage for some solution--but never as an end in itself. This country's gigantic leverage is clearly dangerous; these economists know this. Yet they suggest more leverage. They give more money to the banks with the hope they will lend more and that the citizen will borrow more. And they increase the money supply to facilitate all this. The argument against the efficiency of a government--big or small--as an angel investor, a venture capitalist, a businessman is glaringly obvious. But these are side points. The real problems are debt and production; government bureaucracies are subplots. Why experienced, knowledgeable economists are behaving this way is inexplicable, as is the almost pathological ignoring of this behavior. How any organization in this much debt trouble could even consider expanding its financial responsibilities into the huge areas of medical care and environmental management--regardless of how misguided or effective--is simply mind numbing.

Debt and GDP

This graph haunts my days and nights. It compares the ratio of total U.S. debt (credit) versus U.S. GDP (Gross Domestic Product). It spiked off its norm during the Depression because of a fall in GDP (not a rise in debt) and has bounced in a stable range below 200% (the green circle) until the middle 1980's when it shot up and continues to climb (the red circle).
Imagine you deal only in cash, your twin deals in debt. (Remember, he may be doing this for a good reason. If he thinks he can borrow for 4% and buy an asset that will grow at 10% he will gain 6% a year.) You both make $100,000 a year. So you save your money and buy a $50,000 house for cash; your twin takes his $50,000 and uses it as a down payment for a $350,000 house. Amazingly, both your house and his debt-financed house are classified as assets, as growth in the GDP. He looks rich but his debt ($300,000) and yours ($0) are both maintained by the same income, $100,000. You have $100,000 to provide basics, invest, consume; your twin has a large interest bill which comes out of his income first. You are China; your twin is us. If he buys more, or if the interest rate rises, more and more of his income gets shunted to interest payments.What this graph shows is that debt is growing steadily, climbing until it is unsustainable.
At some point only three possibilities exist: Default on the debt, pay down the debt (which means a fire sale in assets or a contraction in spending elsewhere), or inflate the currency the debt is paid in. All those options will result in economic, and probably social, chaos.

The Offending Hand and Eye

The gospel this Sunday was Mark's "If thy right hand offends thee..." selection, always a fascinating tract on so many levels. How is a body part an actor without the brain? With motive so important in Christian thought, how does attacking the directed organ and sparing the motivator make sense? If it is advice on how symbolically to become more spiritual, where does one stop the operation? And what in heaven's name does the fundamentalist do with this passage?
Indeed the positioning of the miracle worker "who is not one of us" with this passage is crucial here. Christ makes it clear that the message, the idea of Christianity, is the important point. Keep your offending eye on the point; the circumstances are distractions. He is much more forgiving than the apostles about the way the message is given. (Imagine the god of Muhammad saying that.) The god of Muhammad would speak of mutilation as a sacred act; Christ offers it as symbolic of a way where subtraction enlarges the whole. But what is being shed is the limiting physical circumstance of the spirit; no New Testament surgery is implied.
Houseman had a poem with the line, "If it chance your eye offend you, cut it off, lad, and be whole.." Ralston, the mountain climber who amputated his own arm after four days of being trapped by it on a rock face, said: "My self-amputation was a beautiful experience because it gave me my life back."
Harming oneself is not an issue here.

Animal Spirits

I read a book for a book club yesterday called "Animal Spirits." Written by a Nobel Prize winner in economics, it was unimpressive. In the introduction it compared the unreasonable behaviors in economies (the "animal spirits") to undisciplined behavior of children, demanding the firm hand of the parent. The parent here is the government. The blind arrogance of these academics is hard to understand. It's like Creationists who are going to hold their opinion until a new gospel is found; they simply will not take seriously any contrary evidence around them, like pathological denial. The entire nation is screaming about the arrogance of university elites and this guy writes a book whose core is that the average citizen is an unruly child who needs a good government spanking.
There are a lot of interesting, if superficial, observations in this book but essentially these evil emotions, influenced by genetics and poor education, draw the fire that I think, in straw man fashion, should be reserved for two other points. First, if ignorance and irrationality are big contributors to economic misfortune, why not focus on education as the cure? Is the problem too specific than the "government should do it" solution allows? Or has education failed for more basic, ugly reasons than only force can override? Secondly, how come the leaders are immune to the same animal spirits?
Out here in the world, we know they aren't.

Free Polanski!

Thirty one years ago Roman Polanski, then forty four, pled guilty to drugging and then raping a thirteen year old girl. He then fled to France, continued to work as a director with considerable success (an Academy Award in 2003 for The Pianist), and lived a life of high regard and respect. This week, on a trip to Switzerland to receive another award, he was arrested on the outstanding warrant from the United States and extradition procedures were begun.
A number of curiosities provide some cosmetics and jewelry to this ugly thing. The child was said to be "sexually experienced". The judge behaved terribly and last year a motion to overturn the conviction on the judge's misbehavior was initiated. The victim herself does not want to pursue this case, publicly forgave Polanski and earlier this year formally asked the case to be dismissed. (I do not know of any financial settlements that may be in play here.) For these reasons and others (the case is too old, too expensive to pursue, the state had many other opportunities to arrest him so this is capricious) many have demanded the case be dropped. France and Poland (he was born in France of Polish parents) have both objected.
One wonders how anyone could defend this guy. There are no extenuating circumstances here that makes this crime any less than it is. For that matter, how could anyone hire him, or have him to dinner? What possible mental and moral gymnastics would one have to perform to treat this man as just another guy? Or honor him with an award? How can anyone look at him and not be reminded of this terrible crime and the personal corruption it implies? Is this man beyond our reproach, an elite among his injudicable peers, above our simple opinions? Are these entertainers just fantasies to us? Do we weigh aspects of our lives separately, rape in the negative bin, Academy Award, horribly injured husband of Sharon Tate, paparazzi target in the positive bin so the scales tip away from the crime and cancel it out, numerator and denominator? Or has tolerance trumped judgement? Are we beyond character? Do personal defects become less of an essence and more of an affliction; there but for the grace of God....?
This year's award for innovative twin studies goes to.....(aside) this is so exciting my hands are shaking....to....Josef Mengela! (cheers)

Two Quotes

"The State is the coldest of all cold monsters, and coldly it tells lies, and this lie drones on from its mouth: ‘I, the State, am the people’.” -Nietzsche

“Like those of imperial Rome, America’s elites are an urban and international group, perhaps on their way to forming a distinct transnational class. They are cosmopolitan-citizens who often have more in common with members of that same class around the world than with other members of their own society. The elites of Washington, New York, Los Angeles, and Boston may be American by birth, but their wall hangings are from Peru, their sculptures from Nunavut, their literary fiction from Sri Lanka, their CDs from Brazil, their basmati from India, their wine from New Zealand. Their religious values, if they have any, may be drawn impressionistically from Eastern and Western traditions—an eclectic pantheon.” [Excerpted from Are We Rome?The Fall of An Empire And The State of America by Cullen Murphy, 2007, p. 147.]

These two quotes describe the tension in American politics today. On one hand the leaders masquerade as representatives of the people--their leadership houses as microcosms of the nation--and on the other hand have the same separation from the people as prerevolution aristocrats, with much more in common with their peers than their subjects. Here at the G20 they are truly at home. They move in armored caravans from luxury hotel to luxury restaurant, meet with each other, talk to each other, give awards to each other and proclaim to each other. Outside, a small group of children, sensing some indefinable outrage, scream incoherently. The rest of the city, usually active and vibrant, is abandoned.

Love is Like Oxygen

Carbon monoxide, CO, is a colorless, odorless and tasteless gas that is poisonous to mammals. It has a peculiar property so cleverly incorporated into the novel "Coma": Its human victims appear healthier than average because the gas replaces CO2 on the hemoglobin molecule with CO and gives the blood a rosy quality despite the fact that no oxygen is transferred at the tissue level. Essentially CO binds to the hemoglobin, makes the blood look red and rich yet never releases oxygen. The victim suffocates despite his bright and flushed countenance. Describing it as insidious underestimates it; it is a killer with a disguise. It looks like what it is replacing so its homicidal effects are camouflaged. It mimics the appearance of well oxygenated blood while functioning as its opposite. It is the ultimate conflict between form and substance.
I've heard this used as an analogy to government acting as a substitute for private enterprise but it does not hold up well. Government can behave as a producer, an inventor and as an engine of economic growth--it is just very inferior. The motive for substituting government into an economy is never to improve it; it is always to sacrifice the economy to some other purpose, usually a bigger social safety net, sometimes simple personal aggrandizement or, worst, a theory. But CO is a lovely analogy to inflationary debt. The borrowed money provides leverage; the economy expands and shows all the appearance of good health. Carelessness, imprecision and overgrowth follows. Not until the value of the underlying assets are exposed as insufficient does the anemia become apparent. Then, decline and death.

The Willie Sutton School of Economics

I have spent some time looking at hard assets. This is a capitulation for me because these assets are unproductive, defensive and generally of little use to anyone. Sure, they have some uses in catalytic converters, electrical connections and coins worth less than their mineral content but assets are mainly bets against productivity, the other side of the inflation coin. Inflation is a subtle tax on savings; assets usually escape --and sometimes grow. Worse, inflation harms the lender most: It freezes his holdings in a currency that shrinks, then repays him in a currency that has shrunk. No wonder there is limited credit; no one wants caught owed the Old Maid Dollar when the game stops.
Our huge debts will be paid or defaulted on--then paid. There is no escape. But the average guy will not pay it; it will be the saver, the guy with the vision to deprive himself of something in the near term to grow something for the long term. The guy who has believed in and contributed to the "system." Because that's where the money is. And his involuntary contributions to balance the excess--through the inflationary destruction of his savings--will make him a disillusioned and hostile man.

Poker, Golden Eggs and the Famous Goose

An interesting allegory from the world of gambling:
When Mississippi legalized gambling, a casino moved in, followed by professional players. One of the first table games the casino created was Texas Hold 'em, a game where two cards are dealt to each player, then three cards are dealt up on the table--community cards that each player can use or not with his own hand--and then two more cards are progressively dealt to the community cards for common use. The best five cards are used by each player and then the best hand wins. There are four rounds of betting, one when the two cards are dealt to each individual, one when the three community cards are dealt and one with each of the two subsequent community cards. In each betting round three raises are allowed. For a game of 10-20, where the first two rounds are ten dollar bets and the second two rounds twenty dollar bets, and if there are the usual ten players at the table, the pots can get big. Most professionals can play forty hands an hour. The casino takes five percent from each pot, called the "rake", to pay their overhead--dealer, cards, rent, taxes, etc.
Ten players, forty hands an hour, five percent a hand means the casino took the equivalent of two hands an hour, almost fifty hands a day.That money left the game, not to return.
The casino did well initially. There were always 10-20 tables going twenty four hours a day, ten players a table. Then the number of players began to drop, the casino closed tables to consolidate the players. Then the casino staggered the tables hours. Finally the game disappeared. At that casino, Texas Hold 'em 10-20 is no longer available.
When the casino tried to figure out how they lost this important game--important for both their income and their image--they learned that the rake siphoned off money from the players--and the game--and simply bled the players dry. In their effort to profit from the players, the casino wrecked the game.
For "rake" read "tax".

G20

The G20 meeting will be held in Pittsburgh next week. This group is made up of the largest economies, generally, in the world and can be loosely defined as an organization devoted to building and sustaining individual economies while encouraging world financial stability. They bravely hold these meetings despite showing no evidence that they either understand or can control the financial factors involved. Nor are they deterred by the complex and inherently contradictory economic philosophies that the make up organization membership.
These meetings are routinely attacked, rhetorically and physically, by various and sundry groups with a similar contradictory makeup including groups favoring one world government, groups opposed to one world government, fascists, communists, anarchists and groups with single interests like animal rights. The tactics are mainly disruptive and seem to emphasize excrement. The net effect is that the meeting designed to foster economic growth usually results in the disruption of all economic activity in its meeting place. Indeed, Pittsburgh has closed off its downtown, its hospitals have gone on short staff and most of the businesses within rifle shot have closed for the week.
Apparently eighteen cities declined the honor of hosting this event. In that light one wonders who benefits from such a focused tsunami. If they met more often would the current disaster been averted? As Obama raises imports taxes on China tires, will the two countries sit beside each other cordially? With the world roiled by the U.S. hellbent on debasing its currency, will the G20 help? Will the economic benefits of the group's stay at Nemocolin filter up through the depressed areas of the Monongahela Valley to the businesses of Pittsburgh, shuttered and vandalized?
It's more likely that this event is a junket for both the politicians and the protesters and that both groups should be properly seen as participants in a social event, like Mardi Gras. Both groups follow historically honored behavior and tradition, both are properly costumed, the event shuts down all commerce and takes weeks to recover from. If this event is such a pageant, a bit of planning could protect innocent bystanders from their self indulgence. It could be held periodically in a desert --like Burning Man--and the political connoisseurs could be bused or flown in from nearby luxury ranches and hotels. Or shipboard. A little effort could make this a safe event for all without depriving the participants of their true aims of good food and drink, luxury hotels and the apparent pathological need to see themselves on television.

The Fundamentalist

I went to a lecture this week on Creationism. I saw Stephan Jay Gould talk on this topic once and was disappointed. So I was with this talk. The scientist has a peculiar problem: He has all the facts and the Creationists do not care. That is an astonishing modern opinion. Not only do they not care but they think your opinion, however factual, will damn you to hell forever. Nor do they just oppose you and your facts, they want to help you. They want to free you from your myopic scientific accuracy. The scientist's reaction to this is intense ridicule (because the Creationist is beyond debate.) But when faith can move mountains, the Olduvai Gorge is a cinch.
The real story in Creationism is who are these people? And what does this thought process mean?
Fundamentalism is a gift of Luther: He mandated the individual interpretation of the Bible. No ermined middlemen for him. (It was Galileo's original sin: He published his beliefs in Italian, not Latin.) Now a whole subculture fills the towns and hollows that believes the earth was made in six days and that dinosaurs and man cavorted together vegetarianly before the Fall. They are a hard, certain breed. They fight America's wars. They spilled out of the Appalachians, murdered an entire race and settled a completely hostile land. Tom Wolfe, in his essay on Junior Johnson, remarks that in the Korean War the area of greater New York had a single congressional Medal of Honor winner; De Kalb County had twenty three. The author Max Byrd said of them, "Where others have love in their hearts, they have rage."
The nature of this country, its underlying sinew, has always been obscure to me but it is easier to see when the fundamentalist is there. It is hard to see the American Revolution as a logical outcome of human social evolution; it is isolated and unique. The fundamentalist is a breed native to this country; the king, old church rules demanding a biblical translator, are perfect targets for this rugged, flint-eyed crowd. They don't fight science, they dismiss it. They are not a cult or some shard of a society; they are a coherent, integrated, intense mutually supportive community that is closer to a new foreign speaking immigrant population. I can see their ancestors shambling in and out of battle lines at Valley Forge, trying to get the crops in but, when convenient, spoiling for a fight. This personality, held down for so long by various rules, codes and superstitions didn't suddenly start believing in the Rights of Man; they always believed it, they just suddenly were better armed. I wonder about this country's nature, not so much with them here as when they are gone.

A Modest Proposal

What is the culture's biggest problem? Not financial. Not military. Our biggest problem is the disintegration of the family, particularly the abnegation of parental leadership and responsibility. The one social structure commented on in the New Testament over and over again is divorce and this country, a professed christian nation, has a divorce rate over 50%. I once asked a basketball coach who coached a private grade school team and an inner city team what the difference between the two jobs was. He said in the private school he put the kids on the floor and watched them for quickness, vision, enthusiasm and coachability. With the inner city team he started each practice by asking who had eaten that day and first took the rest to lunch.
This is clearly a serious problem. The New Orleans disaster shows there are simply a lot of people out there who need help managing their lives. Should they be having children in this difficult life of theirs as well?
Too tough? Yet we are able to ask very hard questions of the elderly now; those end of life equations are serious, regardless of how they are diminished. Why not pair bonding and reproduction questions? Clearly a lot of people need help and we have a sacred private sector model: Harmony.com. Imagine how we could increase the information available with the government's huge reach. Why not a National Mating Service?

On the Road to Erineus

I am unsure where all of this is leading. Certainly the federal control of health care stems from one thing: their unfunded liability to the Medicare commitment. It is over 37 trillion dollars right now if they cut it dead. It is strange to see an organization that has failed in its initial project respond by trying to absorb the rest of the medical system but I suppose the logic is they can control the part if it is within the whole. Moreover they will not have to admit failure. I have not heard a single concern over the unfunded liability; only the uninsured, or small business burden or the rising costs of health care. This is the reason: http://www.usdebtclock.org/. So, to hide their previous failure-- ill conceived, poorly administered and gigantic--they will take over the rest of the medical system.
What will be created is any one's guess. I suppose it will be a distorted cobbled monster with the usual disastrous unintended consequences. Certainly the main activity will be contraction: To fix the price to the available budget. That will have no influence on the cost however and the distortions will follow. Resources will be reallocated to the politically connected and the symbolically secure. The medical profession, now a utilitarian organ of a cost and graft obsessed power, will be destroyed. The overall objective, the Medicare obligation, will be achieved economically if not morally.
Then we can turn to the next failed promise: Social Security.

The Enemy of Good

One should wonder about the impulse to lead. It is obvious in warfare, in fires--- at moments demanding a next step. But in politics it is less obvious because usually the politician begins without anything at stake. The guy in the burning building must get out; he likely will try to the best of his ability (and the limits of his safety) to help lead another out. But the politician is under no such pressure or demand; as his commitment to leadership grows, his risk grows. It is reminiscent of the problems with physics: Big physics solutions can not be applied to small physics questions. So the dynamics of the individual and his leadership does not seem to translate to leadership in the tribe or state.
What is it that these politicians want? Is there something we can do preemptive to satisfy them so they will leave us alone? For the same disjunction that separates the realms of physics, separates us. Their theories for their perceived problems never work for our individual concerns. And sooner or later force must be applied to make their square physics solutions fit our round physics lives; if the solution hasn't worked, it must be we haven't tried hard enough. They start Medicare and forty years later have to take the entire medical system over to blend Medicare in.
Aside from the desire to tinker, there is a true intolerance of the imperfect that plagues societies. It is a type of puritanism, an arrogant certainty of how things should be and the certainty that the would-be leader alone knows the truth. It is a search for The Good. A phrase so often heard in the operating room is "The Enemy of Good". What is the enemy of good? Better.
http://www.ibdeditorials.com/IBDArticles.aspx?id=334189274826317

Oil

A diversion from the health crisis.
50% of U.S. energy requirements are met by oil, 25% by natural gas. $1600 is spent per person for food per year in this country. In 1970, the U.S. produced 10 million barrels of oil per day; we now produce 5 million. We now import 10 million barrels a day. That is the equivalent of 750 nuclear plants (we have 104 and they take 20 years to build), or 2000 times our current solar capacity. The net energy returned from oil investment (energy out/energy in) for oil was 100/1 in 1930. It was 25/1 in 1970. Now it is 3/1. The ratio for ethanol is 2%, for tar sand and shale 3/1, for wind and solar 25/1 (but the electricity is not liquid so it can't power mobile units.) There has not been a major oil field find since 1970. All the other finds are miles under the ocean which have huge "energy in" numbers. As countries expand, they will have greater oil demands and will compete with us for those barrels. There is also more domestic demand for domestic production so their exports drop. (Mexico, a top exporter of oil to the U.S. has seen domestic demand cut into their exports and may become a net importer in the next several years.)
http://freakonomics.blogs.nytimes.com/2009/07/30/it-wont-be-so-bad-a-qa-with-the-author-of-20-per-gallon/

Cucumbers and Ice Rinks

EU and Cucumbers
I was writing yesterday about the EU and the regulations on cucumbers.http://www.independent.co.uk/news/world/europe/eu-regulations-to-keep-cucumbers-straight-are-declared-null-and-void-606625.html Sometimes it hard to keep a straight face with these people. There must be a gene for meddling and it would have to be linked with arrogance.
There is a wonderful story--I believe an urban legend--about the town council that is asked to solve the beetle infestation in the local lake. After a long investigation and debate, they decide to import frogs to eat the beetles. A year later the locals complain about the frogs being everywhere and, after the appropriate investigations, the council brings in snakes to eat the frogs. The next year the town is overrun with snakes and the council starts to discuss alligators.These people tinker with everything without any concern over the fallout because they are so certain, so confident. They remind you of a church council from the middle ages; ordained, superior and self-righteous. And beyond simple mortal criticism.
The wonderful analogy with a skating rink should never be forgotten. Imagine going to a government bureaucrat and telling him you want to open a skating rink where people of all ages and skills will maneuver about an ice surface on razor-sharp blades. The government would go nuts. You would have a host of crippling rules, regulations and, likely, a supervisor barking crazy orders to the participants. It would never work. These regulators are silly; the problem is that when we need them, they don't do their job at all. Particularly if the problem is dynamic. They are great at regulating vegetables and toilet sizes; it's more difficult when it comes to active people, the economy and criminals. We don't need their help with toilets and cucumbers; we've got their help in spades. We do need their help in monitoring leverage, private and public debt and deficit spending; nothing.

Obama, Old and New

We are in a fascinating time. This last week, with its plans and hopes and errors, has been a microcosm of the state of the nation and the problems it faces. Obama sees urgency in future health expenses and he is right. And he is right in his concern over potential energy costs. His solutions, however, are reflexive and insincere. Insincere because he plans to hide the Medicare expenses in a larger plan. And reflexive. Like his response to the arrest of the esteemed Professor Gates, there is an overriding philosophical--or better, ideological--template he is working from (or through). His racial response to the arrest is "suffering accomplished black man harassed by bigoted resentful white cop" and his socialist response to the future financial demands are "with our abilities and the power of the government, we can manipulate this." They can't. Our total financial demand on the future labor of the next 15 years is 48 trillion dollars. That's 350% of GDP. http://www.youtube.com/watch?v=at3MNu8BRwQ The only possibilities are an incredible growth effort--and surplus is necessary for growth--or default or inflation. Obama is bringing some bravery to the old arguments; he just is not bringing anything new.

Remember that analogy about Fenway Park. A drop of water doubling in size every minute starting at noon will fill the park at 12:49 but at 12:44 it will be only 7% filled. So it is with compounding debt: It will grow on the exponential curve. Creating more debt makes it worse. Only decreasing debt and increasing surplus will help.

"Panics do not destroy capital, they merely reveal the destruction already created by unproductive work." (Mills) The key is "unproductive work."

Politics, Health Care and Energy

The politics of the country are racing towards a conclusion. Despite the constant efforts of the political class to distract and misdirect, several basic problems must be addressed. First, the government has promised more than they can deliver in Social Security and Medicare. Regardless of the stated aims, the good intentions of those aims and the high-mindedness of their creators we cannot continue to keep the promises the ruling class has made to us. Those promises must be broken; the question is how--not for our betterment but how to make the political class less culpable. Demonization of doctors, profits and the like will do some but the real solution for them is the creation of a huge, unwieldy umbrella under which all will labor and suffer. (Homogenization of circumstances only socializes the pain.) The other big problem is energy. In this area the politicians are less sure. Fossil fuel, even if peak oil has arrived, will last for another generation at least, just not at the same price. The global warming terror may be petering out as a technique and our efforts to suppress our own sources and options are becoming more and more overtly crazy; perhaps bribery and mental illness are the only plausible explanations. So I was interested to see the recent appearances of the tiny head of "speculator terror" peek out on our intellectual desert. This notion has been kicking around on goofy talk shows and, especially, O'Reilly who is particularly stupid about it but this article puts it in some better perspective. Think price controls. And remember the difference between cost and price. You can always freeze the price of something, you cannot freeze its cost.
http://online.wsj.com/article/SB10001424052970203609204574316541478587478.html

Health Care and Affirmative Action

One of the benefits of the health care bill is the racial discrimination of medical school applicants. I have always thought that this reverse discrimination was unjustifiable and, as policy, could become destructive. There is something primitive and tribal about it, suborning the common good for the benefit of a subset. On a more practical point, when does this stop? How long do you get a break because your grandfather didn't? At what point does the society say "O.K., all done!"? The constant skewering of the tests, charts and tables at some point will be seen as abusive in addition to unfair. Finally it will be seen as swimming upstream, as a policy that won't work because it can't, because the favored group will always need favored. And that development will be fatal. http://www.ibdeditorials.com/IBDArticles.aspx?id=333586760867927

Health Care and the Art of the Possible

Health care is not the major component in the health care plan. Money is. A few years ago the medical clan was furious that only three physicians were on the board Hillary put together to revamp the "health care system." I'm sure the government was mystified; they knew this wasn't a plan for medical care, it was a way of restructuring the government's responsibilities for payment. Physicians had very little to do with it. The government has agreed to pay the expenses of Medicare and in ten years it will take up much of the budget. So much that the government will have little money for their other useless self-rewarding ideas. They have promised too much--and to a dangerous group; old people vote. This new plan is an effort to take the whole system over so they can hide their cost control methods in the general population and health care can be restricted for the elderly as part of a "nation effort and program." That way the elderly won't see that they have been specifically targeted. Social security limits in some way or another will come soon after.
Certainly everyone can see that you can't increase the number of people covered in a system, decrease the cost and maintain the quality. Ferocious companies have tried these "economies of scale" ideas but the federal government? Chris Dodd? Barney Fife/Frank?

The recent discussion about the elites not reading the bills they vote on is instructive. The basic point is these people are inept. It would be the same as if they said, "I can't get up that early", or "I don't use spreadsheets" or "I don't have a driver's license." They are not qualified for their job and have no shame about it. Conyers actually ridicules people who think he should have some understanding of what he is voting on. If that isn't an admission of the breakdown of government, I don't know what would be. If you change the word "politician" to the word--and concept--"manager", everything changes.

These people are just bags of wind; they don't have jobs, they have territories just like the Mafia. (ca., 1st district. Ma., 3rd). We aren't voters, we are prey. If we don't come across, they'll break our windows.

Health Costs, Leaders and the CBO

Here is a copy of the graph of cost from the health care program projected out over time as presented by the CBO. It is not pretty. http://cboblog.cbo.gov/wp-content/uploads/2009/07/slide10.jpg The solutions are fewer old people and/or less care for them. There is an overall point here. These politicians are not doers. They just say things but do not manage them. If there was a plan to fix a problem, there would be a big separation between recognizing the problem, offering a solution and managing the plan that would solve the problem. Forget how distorted the first two parts are; recognizing the problem and offering a solution are twisted, bribe and lobbying influenced processes that rarely create anything of value. But the big problem here is that the legislature-executive divide, so reasonably created by the framers who did not envision great government expenditures and projects, breaks down when distorted ideas and projects are created by the legislature and then administered by the executive. These people simply are not any good at it. In business when you have a vision and fail at it you go out of business and work for your brother-in-law. In government, when you develop a failed project you you stay a legislator or become an ambassador or a lobbyist but the rest of us are stuck with the stupid idea and implementation until the next inept go-round.

Health Care and our Leaders

Here's a real nice little quote from Obama. http://www.realclearpolitics.com/video/2009/07/22/obama_doctors_taking_tonsils_out_for_money_instead_of_diagnosing_it_as_allergies.html
He looks to hype support for this government health plan by demonizing doctors who are victimizing children. The first page of the book on desperate responses: a personal attack on someone who has something to gain if you lose--and, by the way, include a kid. These people are shameless. Do I know crooks in medicine? Yes. But if the honesty among attorneys were one tenth the integrity of physicians, this would be a nice world.

What is overlooked in this mess is this: these lawmakers come up with a pandering notion/good idea and seduce the population with it. Now I make no excuses for the population; De Tocqueville said the big risk in the democracy was that the voters would figure out they could vote themselves other people's production. But then they do not manage the problem they created. I heard on the news a few nights age that a dentist billed Medicare for 9300 procedures on one day. There are three pizza parlors in Florida that managed to get themselves registered as three dialysis units and bill regularly for them.

Yet I routinely am called by my credit card if I do anything out of the ordinary.

A few years ago a friend of mine who was running a radiological diagnostic unit applied for his license to use diagnostic isotopes. He got back a license that authorized him to use weapons grade uranium. Weapons grade uranium! These people simply do not deserve to be in charge.

health care

I did not watch Obama last night but the health care mess seems to be worse. The insincerity of all this is staggering. The concerns about health care in the government is not about the well being of the citizens, it is about the expense of their well being. The government has always bought votes and support by offering voters perks --like social security, health care, and prescription plans--without any notion or concern about the eventual outcome. Anyone can see now that those bills are becoming unmanageable and, rather than tell the truth and admit they were wrong (and stupid and insincere), they try to disguise the situation and persist in the fiction that this can be achieved. If they tell the truth they will leave many old people--who thought they would have health care--without anything and social security is next. Those guys vote. So the option the political class has chosen is to deny there is a general financial problem and pretend the problem is fraud, or poor care or the uninsured. There is no easy solution here. We have people who have not saved, have a lot of debt and are totally unprepared for managing their future lives. There will be a shell of social security and a shell of medical care but these shells will mean a significant change in our lives and our expectations. And this will mean scavenging the productive people for any spare income to support those who did not make the effort to support themselves. I see a contraction here in lifestyle and comfort, like what is beginning in Europe. Here's an article that talks, superficially, about the American health measurements we mentioned earlier. http://www.ibdeditorials.com/IBDArticles.aspx?id=332723342557746

Health Care Bait and Switch

There are problems facing us now that will be resolved in one way or another. Refusing to confront them will still result in a solution of some sort. As I see it, there are three major things that must be resolved: 1. health care costs, 2. energy policies and 3.our attitude towards money and debt. I think it is important to distinguish between health care and health care expenses. Health care is fine; health care costs are not. As this blurb shows, health care costs will bankrupt us and are a function of the growing number of people requiring care and the growing number of health care solutions available to them. This, if true, leads to a few very nasty options including decreasing the number of people requiring care or minimizing the care options available. I see no other choices and believe the government has come to this conclusion as well; they are just lying about it.
http://cboblog.cbo.gov/?p=328

financial triage

This topic is crucial to every one's life: what to spend in the year. These stats are from the government and are quite extensive. Interestingly--and disingenuously--they do not include taxes which should be on every one's mind. But these are the numbers the average family spends after taxes and they are instructive. They are broken down in nice detail. If you believe as I do that the country will not grow much in the near future but there might be some financial distortions, for example energy costs might go up but inflation will not because credit and debt will shrink and thus contract the money available, then what increases in the chart in the future must be shifted from the chart. I.E. the chart will not grow: if one thing cost more it must be paid for by a shift in expense from something else. These are interesting to ponder.

http://www.visualeconomics.com/how-the-average-us-consumer-spends-their-paycheck/

Conspiracy or Accidental Chaos

I hope everyone read my little financial link yesterday. Here is a link of a different stripe. I do not know why this interview is not being discussed every hour by everyone. It suggests a remarkable event and legitimate terror on the part of our esteemed leaders. One could easily see this story as part of a huge James Bond plot. Who was moving this money out? Who has the economic muscle to do it? Why did they do it? Its proximity to the election is very provocative; was that a factor? Most importantly, why is such a huge and astonishing event ignored? It is more than curious: That money movement could anonymously threaten the security and stability of a culture must be addressed. But before that, it must be recognized.
From Motley Fool: http://caps.fool.com/blogs/viewpost.aspx?bpid=143295&t=01006124249416869148
And there are individual lessons, too. This is a complex world and we may not have all the understanding or the tools to control its most basic components. That places a burden on every individual to protect himself as well as possible. And that start with being informed.

Upheaval and Investment

There are countless websites devoted to the topic of personal finance because, I think, this is such a problem. This is something you can learn--and I can help because I have been through it all. My fear is that this is a harsh culture created by strong men. Their strength and vision may be bred a little thin now but the demands created by their philosophy persists. The concept of personal freedom guaranteed by the state is revolutionary but it is not immutable because it all but guarantees incidental personal failure. As time has gone by, some cultures have compromised freedom in order to mute the possibility of personal failure: it is illegal to work an extra job on your 6 week designated vacation in France. Illegal. The upside is compressed in an effort to elevate the downside. In this world the ideal bell shaped curve is a line straight up and down.
This battle between personal freedom and social responsibility will never end and will be tweaked and massaged forever by the well-meaning and the avaricious, the optimists and the pessimists, the exceptional and the kind proxies of the incompetent. You don't have to go any further than those horrifying pictures of those poor people staring out at helicopters in flooded New Orleans to know the truth: some people can not take care of themselves. What should we do about them?
Countries have dealt with their problems in a lot of ways but remember that the poor, the disenfranchised, the inept must be given something someone else made. Furniture. Food. Money. Security. If they can't create it, they must be given someone else's. This government in the past has outlawed gold ownership, capped money withdrawal, arrested and interred American citizens under some stressful circumstances.
At any rate, please indulge me my concerns here and take my ravings with a smaller grain of salt than you might ordinarily.
Here is the first thing to read, a notion that emerged by accident as the people at Google were searching for an investment approach for their soon-to-be-millionaire employees:
http://www.sanfranmag.com/story/best-investment-advice-youll-never-get

Mendacity

We have become a society--not just politically but socially--that will be characterized in the future as insincere. In every walk of life, we lie. We lie about why we go to war, why we want to change the medical system, the purpose of taxes, the reasons for ethanol fuel, why we are supporting GM, why we did not support Lehman Brothers, why we have no charter schools, why some students do badly regardless. And who knows what global temperatures mean now? Or the acid in the ocean? The way we are going we will outlaw mathematics. And we lie to ourselves: the students with the lowest scores on achievement tests have the highest self esteem, political correctness supplants comity, torturing three murderers on an island is a terrible break with our history of love towards all, even in combat.

And we expect insincerity. No military guy can answer straight. Nor does it matter. Obama says he won't pursue the torture question and the next day he says he will. No one blinks. The guy who audited the S&L disaster in the 80's was interviewed in a hearing recently and was asked to estimate the amount of fraud in each government contract and he said "7% off the top and then whatever trickles down at each level." A culture that is completely crippled by lies. It is symbolically fitting that the greatest economic meltdown in history occurs because "no one trusts each other".

The Ultimate Outsource

These are times that make good ideas bad. Hedge funds, derivatives, borrowing on the house—all good ideas at the time—are now stultified.

My good idea was this: Find the typical Pittsburgh sports team and pull its fans closer by having typical Pittsburgh fans actually play for the team. There is, of course, only one prototypical Pittsburgh team: A team that is declining in the rust belt, whose leadership has never demonstrated any quality other than self advancement in almost a generation, whose useful talent always leaves for other cities and whose long-term contracts are with players beyond their prime. Fading glory, terrible leadership, inability to retain young talent, black-hole long-term obligations with non producers: The Pirates are not symbolic of Pittsburgh, they are Pittsburgh.

Now how could the fans participate? They cannot become the executives because it is not their money. Coaching is out because the executives would not approve even if the fans’ random decisions were no worse than the professionals’. They cannot replace the broadcasters because no one would be better than Bob Walk. Position players require some skill like catching, hitting, and throwing. The Pirates can do that, albeit remedially. Starters? A fan could replace Jimmy Anderson but he is gone. Closers? The Pirates are actually strong there.

But there is an area where the fans might be able to improve the Pirates—or at least be a wash and cheaper: Middle relief. The Pirates have no middle relievers. They have declining starters who hope to start again and declining closers who hope to close again. But the city is filled with healthy strong men in their 20s, 30s, and 40s still wearing high school letter jackets that would be able to fill in.

This is my plan. The Pirates hold tryouts looking for men with good health, reasonable arms, and a love of the game. Then they teach the better ones the knuckle ball. They would not have to be strong: Weak arms might actually be an advantage. It is said Hoyt Wilhelm threw his knuckler in the 40-mile-an-hour range. Tim Wakefield throws his in the 60s. Certainly a major league pitching coach could teach a bunch of athletic men one pitch. Then select the best and rotate them to the middle innings. One man an inning or two. It would be a public relations bonanza, a human interest feeding frenzy, and the men would be cheap and, most importantly, expendable. If a 40 year old wore out after a few weeks, just replace him with another knuckleballer from the stable. The newly retired guy would be thrilled with his experience (and the extra bucks). On the off chance that someone showed real ability, trade him immediately for real talent and replace him.

Regrettably the Pirates were ahead of me. This year the Pirates signed two guys who had never played baseball before to be pitchers. They are both from India. In essence, the Pirates thought of my idea independently and, true to their Pittsburgh zeitgeist, outsourced it.

Obama's stimulus defense

Saw Obama's talk last night. These guys have got to start reassuring me. The salary caps they plan for business is instructive. One of the rules in economics is that if you freeze the value of something, it disappears because the production decreases and the demand increases. You freeze the price of oil, it gets scarce; if you freeze the price of mortgages, mortgages get scarce. It's like a pool: the lower the price that is fixed, the smaller the pool. On the other hand, if you artificially fix a price higher than the product is worth, the supply of the product will rise to meet it. The pool will fill more. So if you fix a salary for carpenters and do not let it adjust, you will have fewer carpenters and more demand. If you raise the price you will have more carpenters and less demand. This can get really complicated and that is what these guys are creating: they are supplying money to the system in various specialized areas and the system will determine what it is worth. The only problem is that for the first time I believe Harry Reid; they don't know what to do. So they are going to do something.

Watching the Obama speech last night was unsettling in a number of ways. One thing that surprised me was his remark about "cable t.v." and "talking points". This was said in the context of criticizing the doubt that has arisen about the "stimulus plan". The cable audience is really small. O'Reilly is the most successful show and he draws 3 million viewers at most. That may be good advertising numbers but, in a country of 300 million, it's small. And it is strange to attribute the skepticism about the plan to this minority. There's no question that Fox talks to a group that has been driven to it by Obermann and will probably be right of center but Lou Dobbs sounds right of center any more. Acting as if this tiny minority has some huge impact is peculiar, especially when they don't get mainstream attention. Years ago Ms. Smeal of the National Organization of Women could cause a stir representing less than 60,000 members because the media liked them. Nothing on Fox gets media attention. I really wonder what the thinking is here. I hope it isn't scapegoating but it sounds it. And Obama saying things like "This is not my plan" is not reassuring.
I think objections like this are legitimate: http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020502766_pf.html
I don't think they can be just brushed off by being the result of goofy cable guys and intense special interests. And if that will be the government position, I think we all have some serious trouble.

Something Else D.C.

More on the Greeks. They believed that the polis, the city, had an intimate relationship with the individual: good laws, good citizen, bad laws, bad citizen. (This is opposed to the Enlightenment idea of the citizen subject to natural laws where the citizen had to be controlled, the general drift of western europe and America, although the American Constitution had high hopes of the individual potential with most of the mischief originating in the government.) But there was more than esprit in the Greek view; the state was constructive. Looking at this mess in Washington made by these pirates and morons, it is hard to imagine how they thought. Worse, if they are right, the citizen in this country is going to have a terrible downturn.

We should change the name of Washington to something else until some real leaders emerge. Actually, that is my new campaign. Change the name of Washington D.C. to Something Else D.C. until we get good, responsible leaders who put the state and the people first. Then we'll change it back.

Solon, Tellus and Thugs

I've been reading two topics, one about the Thugs and one about the Greeks. Fascinating, both of them, because both create intact, consistent self contained worlds that are coherent and yet completely at odds with each other. The Greeks, of course, are more interesting as they have a direct line to us. Solon , the famous "Lawgiver of Athens," was a respected wise man. Herodotus has a story about him that is often quoted and says a lot about him and the Greeks. Solon met Croesus, the Persian, the richest man in the world . After showing Solon some of his riches he asked him "Who is the happiest man in the world?" (expecting "You, O Magnificent One!) Solon answered, "Tellus of Athens," someone no one had ever heard of. Why? Because his Polis (town) was flourishing, he had good children, and he died in a righteous cause (the defense of the Polis).The Greeks were more than just successful; they were wise. They made a real effort to understand themselves and their world. And this effort was a struggle; they did not always agree. Sometimes they came to no conclusion. But they did know that happiness depended on several basic things: the composure of the state, the integrity of one's children, the code of your life. Remember, these people had a very distant relationship with their gods. They had no belief in an afterlife. Their lives were stripped down to the basics. Whether one believes them or not, they must be taken seriously as every individual searches for his own answers.

A Government Stimulus, Literally

This stimulus package has me worried. It looks so full of junk it is hard to believe these people take themselves seriously. I am reading a book about the Thuggee movement, an ancient brotherhood of thieves who practiced ritualistic murder on a huge scale. Some of these people killed thousands of people. The movement lasted centuries. The group had a quasi religious quality so they had a meticulous, devout air about them. They also were horrified and indignant about some crimes--as long as they were not responsible for them. Reminds me of that story about the police in Oakland, California who during their shifts would break into safes. They were discovered when, during one of their robberies, they heard a robber next door and the criminal police rushed out to apprehend the criminal criminal. A cop was shot and the subsequent investigation revealed two robbery sites and only one robber.

These politicians are just killing us during the day and saving us during interviews.

The Japanese, the Greeks 'n' Us

I reread my note from yesterday. It sounds a bit angrier than I meant it. I do despise these grasping politicians and their incestuous self righteous handmaidens in the press but I don't think that alone explains it. I think there is a malaise abroad in the land. I think the reality of the size of our problems is beginning to sink in and people don't like it. Nurses are talking politics; they never talk politics. A scrub nurse today talked bitterly about government, about her 20 year old--an employed, hard working tax paying guy--who is being haunted by the local police because of the look of his car, so much so he sold it. Many hospital people talk openly about collapsing their retirement plans because no one is to be trusted. Some openly criticize the new immigrants brought in as refugees by Catholic Charities for gaming the system and plan with their families how they can do the same thing, not for money but revenge.

The national news is bad. Barney Frank and his ilk are not going away. Obama goes hat-in-hand to Arab t.v.. Pelosi wants to have hearings on Bush administrators. Rahm Emanuel, for heaven's sake. No one knows where 350 billion dollars went. Obama wants to retrofit the auto loans with environmentally friendly requirements, as if these will sell better.

There are some interesting parallels in history. The Japanese remade their country completely, twice, in one hundred years, first after encountering Perry when they went from a feudal culture to a modern world culture and then after the devastation of the Second World War. Perhaps it is easier after military annihilation but they did it twice. And the Greeks are interesting too because they created a culture that was new to the world, entirely new, as they created the polis based democracy that ruled the world and formed the foundation of most of the worthwhile things after it. That culture did not evolve; it appeared. We are early in this mess and many of those responsible are still here. But so are the children of the people who built this country. These times could get rough. Think of the Roaring Twenties becoming the Depression in three years. If I had any advice to offer it would be this: protect yourself. People will get stupid. They will give up on good things and start up bad. For all the wonderful philosophy underlying this country, its basis is work, hard work. Think like a farmer. Work hard every day, plan for the future but know that today's work allows you to eat next week. Enjoy your life and the world you live in. Ignore the jabber of the non-producers; build yourself and your life. The world is living beyond its means. Be prepared so that when it contracts you are able to be self sufficient and content. A lot of very demanding people in history were very content in cultures that were minuscule compared to us.

Arthur Levitt and the New York Times Seduce Eachother

Here is a link to a NYT mini interview with Arthur Levitt. http://www.nytimes.com/2009/01/25/magazine/25wwln-Q4-t.html?_r=1
This thing must have been done at night because I think both of these people represent well the respective positions of their ignorant armies. Levitt is an arrogant functionary, a guy living of the gravy of the land in business and politics, who has no real confidence in the structure or the workings of the programs he is essentially responsible for. He stays at it, bravely, because the peons and the little people like us need leadership and, laughably, have faith in what he is doing even though he does not. He tolerates interviews like this because he knows the interviewer will come across badly because he is so fine.
The interviewer comes across badly because she is a devout believer in the progress of government and its perfectibility. She believes that the S.E.C. can actually catch somebody who lies to them because they are efficient, caring professionals rather than rapacious freeloaders feeding off the productivity of others. Her prime source of her investigative journalism is Michael Moore who stages confrontations with professional actors and is then taken literally by everyone who wants to believe the event true and dismissed by everyone who doesn't want to believe it. The coup de gras is her Carlyle Group insinuation. The Carlyle Group is an investment organization who owns Dunkin' Donuts. If there is a story there--especially showing collusion or conflict of interest other than a lot of guys who go to the same restaurants--investigate it, publish it, win the Pulitzer Prize and glow with satisfaction when they take the criminals away. But my bet is there is no such investigation coming.
These two probably bonded well because they indeed have a common bond. Smugness. The guy in the business suit, the girl in the gypsy dress--both bathed in self righteousness and knowing they are doing as much as they can within the limits of this all-too-human world.

Science and markets

I have put a moratorium on investing over the last year, not because of any real changes but because we had met our objectives in investing in--certainly not in return out. I had a call last night from a friend who has been devastated by the market downturn in the last year. I have mixed emotions; I think the gains of the past few years have been imaginary so I don't think the losses are real either but I am concerned how we, or anyone, can make good decisions in this environment. Everyone makes an investment every time he invests or doesn't. A hamburger is an investment. The market has shown that neither the participants nor the regulators have anything other than themselves in mind so decisions are hard. It is a good lesson for the young: Everyone will put themselves first in commerce. And they will smile and lie. I have had people try to solicit money from me in an investment that was long term (five years) when they knew the business was so flawed in would last only a few months longer.
A corollary lies in the problem of investigation and analysis. The mortgage crisis was precipitated partly by the active encouragement by the government of home ownership. The idea was that home owners were better citizens. That may be an association but it may not be a cause and effect. Perhaps saving money so you can afford a home makes better citizens. Maybe renting selects out nasty neighborhoods and hence nasty neighbors you can't escape and who make you a bad citizen. These are hard to tease out but impossible to base policy on. Global warming is another example. This link is interesting but you have to read only the first paragraph to see my concern. http://co2sceptics.com/news.php?id=2575 A very competent scientist is stating she could not, for various reasons, make an honest statement until now. If our scientists have trouble being honest, don't expect a guy with a 2 million dollar mortgage in N.Y. selling options to be. And that is at the core of our society's problems today.

Obama Innaguration Speech

This has been a historic day. I admit I'm a bit disappointed. I have expected a lot from this guy. He sees himself as a writer and I was expecting some insight and some enlightenment. The old distinction between perfect words and adequate ones is the "difference between lightning and the lightning bug." We got the lightning bug. To be fair, it was a big assignment. There are so many things wrong, so many enemies and so many problems that there may be no unifying idea, no clarified distillate to savor. Maybe instead of a poem we got an anthology, a generality rather than vision. And the mediocrities that followed him didn't help. But he aspires to Lincoln and that raises the bar. Those expectations were created by him, not me. So I get to be disappointed.
When Lincoln wrote the speech at Gettysburg his son had just died, his other son was sick and his wife was hysterical. Lincoln was still wearing a mourning ribbon. The war was slipping away and Lincoln feared he would not win the next election. The Union had suffered a horrible draw but the South was terribly hurt and vulnerable. Meade did not follow up and Lee got away--Meade actually offered his resignation. Lincoln showed up as a courtesy; this was a state affair, not federal. He spoke after Everett, a famous orator who delivered a speech steeped in the Greek tradition which formed much of the basis of American thought as well as Romanticism and the Transcendentalism that was to emerge. He was a genius, a man of letters, a scholar and a diplomat who was regarded as one of the profound men of his time. He spoke for two hours and was brilliant.
Lincoln speech was 272 words and redefined the nation.

obama: the facelessness of things to come

Hard to believe that Obama will be inaugurated this week. I have no idea what will happen here. We know some things. He is a politician from one of the toughest political areas in the country. He is smart, very ambitious and has a vision or some feeling of destiny. He inspires people. He does not seem particularly willing to break new ground initially as evidenced by his Clinton preoccupation in his cabinet appointments. He believes in government is a good tool and should be used. He has no administrative experience at all. Facing him will be bigotry, the American citizen's genetic fear of government, the unbelievable debt we have taken on, the energy mess which has no obvious solution but threatens more debt, the anti capitalists to whom he owes a great deal, the hard core Americans for whom the financial and organizational changes will be philosophically anathema, and the conflicts and stupidity that seem to be inherent in the democrat congress.
And, for the financial and energy problems,a clock seems to be running.
Remarkable times.

Odyssey and cultural detritus

Went to a reading group on The Odyssey last night. An interesting topic in so many ways. This is an epic poem, probably the oldest in the world, that has developed from an oral tradition where it was recited aloud at festivals by a reciter called a "rhapso" (hence "rhapsody"---and , perhaps, "rap"?). It is more complex than the brutal Iliad but easier to read. The interest in it, aside from its artistic appeal, is what the earliest world writings say about us as a species. Can you tease out cultural influences and get to some basic elements about us? There are common myths in the world. Many cultures have a Noah-type story, a story where the living visit the gates of that culture's hell, stories of the gods interfering with the lives of men. But are these stories the outgrowth of some common seed or infective one culture to another or simply random? And after a while it begins to sound very like Jung, who no one likes anymore. The story is commonly repeated in western literature--most recently in Eastwood's "Unforgiven", a movie I thought was profound but many loathed. The basic question I think it raises is: What kind of epic or cultural classic would this society create? What things or ideas or men/women would this culture identify as classic and basic in our lives? Most of the efforts so far have seemed to be little more than parodies (Willie Loman) or distortions (Crucible) of some unspoken ideal. Well, what are those ideals? What is important to us? What exactly would make us launch a thousand ships? As this economy calls some very strong historical concepts into question, I think there should be some effort to fill the void that these questions create.

winter of our discontent

The weather is tough and gloomy. There is also some sadness with some illnesses in some people we know. Today I saw a woman I went to grade school with. It made me think about the decisions and luck people had. She had a scholarship to Carnegie Mellon but didn't take it. I thought she was nuts; she, in retrospect, thought she was right. Life has a lot of twists and turns; maintaining an even keel is a lot to achieve. I think this country is in for some hard times and I think the world will not be sad. Certainly it will be several years before the economy stabilizes but it may be decades before the real problems are solved. It is likely that we will do a lot of stupid experiments before coming to the eventual conclusion. These markets have been more than down; they have been untrustworthy. The people and the planning involved have been revealed to be foolish, grasping, arrogant, and self-centered with no responsibility to each other or to us. And they have been beyond regulation; each step the government has taken has been outstripped by imagination or technology. The "oversight" has been--and likely always will be--behind.
In a way it might well be cleansing, it might make us all rethink how and what we want to achieve. I see us as a debtor nation, like some stupid South American country, with limited expectations. What this really means, if true, is that we are in decline. Each of us must have a care. We must not allow ourselves to be ground down. We must protect what we can, grow where we can and make those decisions compatible with our expectations and our happiness. We will not get any help from our enemies or our competitors. And, as has been amply shown, our leaders are out for themselves. And life is rich, even if we may not be.