Category: News Stories

More Economic Ramblings

“The fall of the Berlin Wall really was a strong message that communism does not work as an economic system. The collapse of Lehman Brothers on Sept. 15 again showed that unbridled capitalism doesn’t work either.” – Joseph Stiglitz

I’ve long suspected that systems of government and economics are only as good as the people who believe in them and support them without manipulating them for personal gain. Monarchies have been too susceptible to individual corruption. Communism has been too susceptible to party manipulation. Capitalism has used the pursuit of personal gain as its economic engine, and that seemed to work well for quite some time. But we may now be seeing that, over the arc of the 19th and 20th centuries, democratic capitalism has been harder to manipulate directly by individuals, but more easily manipulated by corporations and other groups.

This systematic corruption seems to have taken shape via the accrual of very minor crimes being built into a global economy over time. Mortgage-backed securities, for example, in and of themselves aren’t criminal acts, but are apparently intensely susceptible to mathematical fudging. So we got where we are not by the corruption and manipulation of a king or a party but by the financial tinkerings of a few and the general fiscal ignorance of the many (myself included – like many Americans, I hope, I’m learning more and more about economics these days).

The key to Stiglitz’s quote is the bridle, I think. Government has to set limits because people are not mature enough to police themselves; power corrupts. The invisible hand is only as good as a thoroughly informed populace and thoroughly transparent businesses. As complex as our society has become, those requirements may not be possible.

Cruel Fate and Terrible Irony

Last week, Johann Hari wrote an article in the UK’s The Independent defending free speech for everyone living under oppressive religions. As a result, central Calcutta was brought to a standstill with riots by fervent Muslims, death threats sent to the author and newspaper staff, and the arrest of an editor who published the article.

Visiting the original article, I couldn’t help but note the sad irony of the banner ad above the article. Looks like Hari is another unintentional victim of contextual advertising.

muslims_tn1

The Week in Death

I hope this doesn’t become a theme. A lot of things I’ve enjoyed died this week:

Andrew Wyeth – My first exposure to Wyeth came via the Arkansas Arts Center in Little Rock where they had some of his smaller works on display. This one, Snowflakes, completely captivated me, and represents one of the few instances in my life where I’ve gone to an art museum and had something completely imprinted on my brain for the rest of my life.

Circuit City – Given the choice, I’ve generally opted for Circuit City over Best Buy, and not just because I’m a inveterate underdogger. I was always impressed by the depth of their CD offerings. They’d have obscure side projects by my favorite artists, and they knew to file them under the name of the parent group, rather than the title of the project.

Zipper Factory – I’ve only been to this Manhattan venue once, to see David Mead, but I was quickly impressed and immediately knew it was a place I wanted to return to. Imagine a cozy theatre where the seats are a mishmash of conventional seating plus vintage bus and car seats, with cup holders. And the decor throughout is junk shop snazzy.

Virgin Megastore Times Square – OK so it’s crowded with tourists and insanely loud music, but its death is symbolic: the demise of the last bastion of retail music as something for tourists to do. The Union Square location, where I’ve been known to shop on occasion, may not be long for this world, either.

Z train – It’s an express train, so I can’t say I’ve used it that much, but as a Brooklyn institution, it made its mark. “Get on the JMZ” will have to become “get on the JM.” And if Wikipedia is to be believed, the JZ trains contributed to Shawn Corey Carter’s stage name.

Ricardo Montalban – “You see, their young enter through the ears and wrap themselves around the cerebral cortex. This has the effect of rendering the victim extremely susceptible to suggestion. Later, as they grow, follows madness and death.” ¿Quien Es Mas Macho? Adios, Ricardo Montalban.

In Banks We Trust

Niall Ferguson was on The Colbert Report yesterday and I was excited to hear him say that, basically, money is trust. Since most money is kept in banks, and since banks don’t have your money sitting in a safe somewhere[1], then money is an abstract entity that only exists as a numeric concept that you trust a bank to maintain accurately.

It’s almost like money exists in a quantum state until you go to the ATM.

He went on to point out that money is only worth what everyone agrees that it is worth. I don’t think enough people are aware of this fundamentally psychological law of economics. Perhaps if there were some way we could all convince ourselves that our dollars are worth more, we could reverse inflation. But getting 300 million humans to agree on anything is a tall order. And yet, we all generally agree on what $1.00 can buy. Perhaps economics is a form of mass hypnosis?

Getting everyone to agree on something reminds me of my other pet theory: that all forms of government might be equally successful if only everyone involved agrees to support the system and thoroughly commit to its ideals. The only reason monarchies and dictatorships fail so often is that they’re the forms of government most susceptible to corruption. Communism might have worked if everyone involved, politicians and people, were committed to the ideals. But power corrupts every time, and while the USA certainly has its share of corruption, it still has one of the best systems devised for distributing power to prevent corruption. You won’t come up with anything better as long as human beings are involved.

Speaking of corruption, this reminds me that the root of Bernie Madoff’s Ponzi scheme is this: people simply trusted him.

1.) As we all learned from George Bailey.

Socio-Economic Silver Lining?

From Vanity Fair:

Another Upper East Side woman often goes from lunch at Michael’s restaurant on West 55th Street to Manolo Blahnik a block away to pick up a $600 or $700 pair of shoes as “retail therapy.” No more. “I was at Michael’s yesterday and was thinking, Oh, Manolo’s … But then I thought, Why? Why do that? It just doesn’t feel good.”

One prominent “hedgie” recently flew to China for business—but not on a private plane, as before. “Why should I pay $250,000 for a private plane,” he said to a friend, “when I can pay $20,000 to fly commercial first class?”

From Newsweek:

Steve Schwarzman of private equity firm Blackstone Group expressed regret for the $3 million he spent on his 60th birthday party in February 2007—an event that politicians and the press won’t let him forget. “Obviously, I wouldn’t have wanted to do that and become, you know, some kind of symbol of sorts of that period of time.”

Race is Bunk

Mara Leveritt at Arkansas Times has a fantastic piece on race, a concept she cunningly refers to as “junk science.”[1] I hadn’t given it much thought, but from a strictly scientific standpoint, race is kind of a crock. Certainly there are evolved characteristics among people adapted to a specific environment, but cultural factors define and divide people far more than genetic ones. Skin tone has until recently been the clearest indicator of cultural background, but this is changing more and more every day.

I really want to send the article to Thom Robb and see what his reaction to it would be. He’s built his identity on his notions of racial superiority. I’m sure he’ll fume. He was bouncing off the walls when Obama referred to himself as a “mutt,” because he didn’t understand that, to Obama, the term is pretty inert and worthless. It’s simply a descriptor, like “tall,” or “skinny.” To Robb, it means everything; it stands for impurity and implies disadvantage and low status. With one casual aside, Obama singlehandely deflated the position of people like Robb.[2]

Obama’s ascendancy reminds me of medieval times, when two lords wanted to unify their houses by marrying their childen together. The offspring would be of united blood, loyal to both houses. Obama seems to be in a similar place. The more unity children this world has, the less petty squabbling humans can do.

1.) Somewhere there’s a racist Creationist jumping up and down with steam puffing out of his ears saying, “that’s my derisive label! Not yours!”

2.) Interesting side note: my office blocks websites with potentially offensive content. When I started my new job, I was able to peek at Robb’s blog. This is now no longer the case. That means somebody saw the traffic, checked out the content, and blocked it. I hope nobody thinks I’m a bigot; I just find them hilarious.

Obama Singlehandedly Saves Print Media

OK maybe it’s not that big, but the New York Times and other major newspapers nationwide are busy ordering additional runs of yesterday’s paper. My friend Margot emailed me this morning to ask me to pick up a copy, so I tried to find out where that could be done. Here is what the line looks like outside the NYT office. The Times is also selling copies online for $14.95, but currently I’m seeing this message:

The website is loading slowly due to high activity.
Please return later to order if the wait is too long.
Don’t worry: We have an abundance of Nov. 5 newspapers!

Score one for traditional media. We’ll miss tangibility when it goes away.

Cross Burning in Arkansas

Bill Clinton and Mike Huckabee may both be from Hope, but to the south lies the town of Friendship, not far from where a cross was burned last week in the yard of a mother of biracial children. A week later, her house burned to the ground. From the Arkansas Democrat-Gazette:

Jacob Wingo, 19, is charged with terroristic threatening and aggravated assault, jailers said. Hot Spring County Chief Deputy Richard Tolleson said there could be other suspects in the reported cross burning and it was still under investigation. Tolleson, who refused to release Wingo’s arrest report, also asked that Wingo’s name not be printed as “a courtesy.” Wingo was questioned Friday about the house fire. “He was first,” said detective Barbi Koder with the Hot Spring County sheriff’s office. Yvette Briggs, Wingo’s mother, vehemently defended her son, saying he turned himself in to authorities earlier and “told the truth.” “It was all a joke,” she said about the cross. “He’s got mixed friends. He’s got black friends — he does not hate people. If he knew it was considered a hate crime, he would never have done anything like that.” She said he couldn’t have been involved in the house fire because he was with his father after bonding out of jail.

I can’t find any reports from last week of the cross burning. Maybe it never made it to the papers. If so, I’m very disappointed in the local and state press. I’d hate to think that this sort of thing happens and is kept under wraps. Also, I find it really odd that the paper tells you the kid’s name and then tells you that the chief deputy asked the paper not to print the kid’s name. And I find it amusing that the kid’s mom said it was “all a joke.” Because, really, what’s funnier in Arkansas that a good old fashioned cross burning?

George Carlin (1937-2008)

George will be sorely missed, and my fear is that, thanks to email forwards, he will be the most grossly mis-quoted comedian of our time. I wish there were some resource that had a list of things he didn’t say. I’ve tried to find a few, but with the Internet, how can you ever be sure unless it’s listed on georgecarlin.com? The only thing they’ve debunked is the “Bad American” email forward.

Here is one of my all time favorites from George. Caution: “strong” language ahead:

But remember, and this is a little soapbox of mine: words in and of themselves are not magic and cannot hurt you. Context is everything. There are plenty of words that you have no good reason to use in polite society[1], but that does not make them “bad.”[2] Similarly, there is no quantifiable difference between “crap” and “sh*t”[3] aside from the reactions that people cause within themselves. And so the only reason not to use “sh*t” in polite conversation is if you think you are conversing with those whose own perceptions might cause themselves discomfort.

1.) Racial slurs, for example.
2.) Quite the contrary, as my multi-cultural friends will attest to having great fun tossing around ethnic put-downs like so much expired ordnance.
3.) I am using the asterisk here to avoid getting pinged by various systems’ content blockers.