Monday, March 31, 2014

Is there a job skills gap?

Paul Krugman says no and he has some careful studies to back him up. He does not mention -- it's only a short column, he cannot get to everything -- what's missing in the areas of highest unemployment, namely the deep rural areas and the core of the cities. What's missing is jobs.

 Where would you find them? China, Paraguay, places like that. We shipped off tens of millions of jobs, and they weren't just jobs, they were jobs in places. Manhattan, for example, used to be full of garment making work. Some of that still exists, mostly in Los Angeles; but most of it is gone.

Krugman links to another Times story about an American firm that claims it has garment-making jobs going unfilled for lack of trained seamsters. The factory is in Minneapolis. Duh. If you want to hire trained seamsters, you do not place your factory in Minneapolis. If you do, plan to train seamsters yourself and stop bitching.

 Even after two generations spent reporting on American business, the stupidity and incompetence of American business managers, taken as a whole, still amazes me.
Brother, can you spare me a dime?

It took over 50 years to depopulate the rural South. Americans are, individually, mobile people but whole communities are not. Nor should we wish them to be.

 Now the core cities are slowly being depopulated (and repopulated, which is also happening, very slowly, in parts of the South). I guarantee you that the rightwingers do not wish that the left-behinds in the core cities suddenly show up in their suburbs and new towns competing with their kids for jobs. Nor, probably, do many of the leftwingers, but I make the distinction because it is rightwingers who blame the remnants of the old industrial workforces for being jobless.

 It is not the son of the machine-minder in Brooklyn (I am thinking of a neighborhood near the Aviation High School that used to be filled with small machine shops) who is responsible for the structural changes in the distribution of jobs.

It is not hard to see why kids in decayed areas do not see much hope for themselves or much point in working hard in school. Some will. Many will not.

 The voodoo economists who cheered the export of America's industrial jobs thought that the magic of the marketplace would fill in after, and they (that is, government) did not need to do anything. To a degree, new jobs were created. But not where they had been.

 If you want to be disgusted just read the comments under any news story about an inner city episode that makes the news.

 But it is not only the lumpenproletariat who have learned that creative destruction means destruction. I am reminded of a highly educated woman on Maui with two even more highly educated sons. Back during the Reagan recession, she was moaning that her boys, despite their combined 6 diplomas in scientific disciplines, were both unable to find work. When Krugman claims
Above all, we should see workers with the right skills doing well, while only those without those skills are doing badly. We don’t.
he is right. And his summation is correct, too:
Unfortunately, the skills myth — like the myth of a looming debt crisis — is having dire effects on real-world policy. Instead of focusing on the way disastrously wrongheaded fiscal policy and inadequate action by the Federal Reserve have crippled the economy and demanding action, important people piously wring their hands about the failings of American workers. Moreover, by blaming workers for their own plight, the skills myth shifts attention away from the spectacle of soaring profits and bonuses even as employment and wages stagnate.

Saturday, March 29, 2014

Book Review 318: All the Devils Are Here

ALL THE DEVILS ARE HERE: The Hidden History of the Financial Crisis, by Bethany McLean and Joe Nocera. 380 pages, illustrated. Portfolio

 On page 48 of “All the Devils Are Here,” the Community Reinvestment Act is mentioned (it gets less than a sentence) and then never again. This is important because the rightwingers, desperate to excuse the failure of Reaganomics, have adopted the CRA as THE cause of the crash.

Business reporters Bethany McLean and Joe Nocera correctly attribute no weight to it at all. There were plenty of causes and in this rollicking toboggan ride ending in the Bush Crash, McLean and Nocera tell the tales through personalities. There is not a graph in sight, nor a chart, only selected statistics.

 One is that in the last, desperate months of the credit bubble, 35% of residential loans made were for second homes or speculation -- it ought to be (but is not) needless to say, those loans were not scored for bank CRA compliance. Nor were any of the loans made by Countrywide, the biggest issuer. Nor for refinancings, which were the majority of all residential loans.

 But enough, if it wasn’t the CRA, what was it? There is a single and simple answer, that the people running the lenders did not understand risk. And while this is true, it is unsatisfactory. Why didn’t they? Wasn’t that their job?

A cynic might say, no, it wasn’t. Their job was to sucker investors without regard to eventual repayment, and devil take the hindmost. McLean and Nocera come close to this position, while not quite understanding it.

A good part of the book is devoted to those now infamous smarties like John Paulson and Goldman Sachs, who did foresee a crash and shorted or otherwise manipulated the paper to make money for themselves, all in best Adam Smithian fashion. But, and this is the part McLean/Nocera don’t get, those vultures did not understand risk either.

 They could detect risk in a portfolio but not in a system. (Janet Tavakoli, who did understand the big-picture risk and spoke out, all unheard, gets no more attention than the CRA.) They, and by them I mean the top managers of the biggest institutions, all regarded the national and world financial system as a game of musical chairs.

 Some (but not all, and especially not people like Alan Greenspan and Larry Summers, two very stupid men who had reputations for being extra smart) did get that a crash would come. But each knew that he was smarter than all the rest, and had the best sources of information, so that his institution could circle the chairs until the last moment, being certain to grab one for itself.

They did not understand that most of the chairs, not just one, would be taken away at once. In other words, they gambled the entire financial system against a few billion dollars for themselves. Had it not been for the lessons of the New Deal, not entirely forgotten, and the gigantic resources of the government, the system would have been destroyed, to come back who knows when.

 There are hardly any heroes in Nocera and McLean’s telling but Treasury Secretary Hank Paulson comes closest.

In the end, Nocera and McLean finger unregulated markets, saying that those who blame Fannie Mae and Freddie Mac have the story upside down.

 I have a few problems with this generally persuasive book. Foremost is the attention to the inner demons of the key players. I agree that personal motives are hugely important in the working of management (one reason why Reaganomics is too inhuman to work), but an awful lot of the demons are inferred or attributed to unsourced informants. It makes for a lively book but also makes it hard to assess its reliability.

 Second, it is irritating to be told that bigger down payments would have helped cushion or even forestall the Bush Crash. For one thing, in the hard hit areas price declines were so big that even a 20% or 30% equity would still have been wiped out. For another, there is nothing to show that a big down makes for a more reliable borrower.

 Tens of millions of 5%, 3% and 0 down mortgages were successfully written for the FHA and the VA over generations and repaid. It wasn’t until private, market-oriented lenders got involved that the system went haywire.

Another responsible gun owner

I followed the link to the sad saga of Israel Rondon thinking it was about the "sovereign citizen" who was squatting in people's houses when they went on vacation, but no, this was a different sovereign citizen.
Rondon seems to have been treated gently by the Ohio courts, getting only probation for a collection of offenses including assaulting a cop, poaching deer and carrying a pistol in his car. (Just that last one would almost certainly have gotten him hard time in Maui.) Perhaps the judges were affected by Rondon's obvious mental problems.

 This may have been false sympathy since it looks like Rondon was on a downward trajectory. I am guessing he wouldn't have received mental health treatment gracefully even if it had been offered. So he got shot in the head.

People like Rondon are very difficult to know what to do with. Shooting them in the head seems both inevitable and less than optimal. Not all sovereign citizens are dangerous, but the publicists who feed their fantasies are. Whatever, easy access to firearms made everything about Israel Rondon worse than it had to be. The gun nuts have a lot to answer for.

Book Review 317: Odd Tom Coryate

ODD TOM CORYATE: The English Marco Polo, by R.E. Pritchard. 272 pages, illustrated. Sutton
If you were to walk today -- as Tom Coryate did between 1608 and 1616 -- from England to India, the chief difference would be that you would not see gallows and corpses hanging on poles every few miles.

Odd Tom was a quirky, amusing travel writer, and he has found a quirky, amusing biographer in R.E.Pritchard. (Pritchard has recently taken on the scandalous Earl of Rochester, which I have not read but who should fit his snarky style even better than the somewhat prissy Coryate.)

Another big change from then to now: Coryate was able to “put out” 100 marks in a kind of reverse travelers’ life insurance. If he returned alive, as he did once, he would collect twice or thrice the premium. He had to sue for it, but apparently the gain financed the self-publication of his book “Coryate’s Crudites,” another modern-sounding aspect of Odd Tom’s life.

 As he traveled, he encountered other Englishmen, but they were all merchants, diplomats or young grandees on the Grand Tour. Coryate was among the first to travel for the pleasure of it. His book introduced the story of William Tell to England, and for us today it has its own revelations.

 For example, the Muslim practice of daily prayer had its Christian analogue in Venice, where everyone dropped to his knees, wherever he was, twice a day on a bell signal to worship the Virgin Mary.

 His tramp across Iraq -- Pritchard says he was the first European since Alexander to walk from the Mediterranean to India (though Alexander himself likely rode) -- also sounds very modern. It was suicidal for a Christian (or anybody for that matter) to travel without protection.

Coryate was a solitary traveler although he joined groups when it was convenient or prudent. When traveling to Jerusalem, even a caravan of several thousand was not big enough to deter attacks from Bedouin. But the violence and insecurity of the Koran Belt, still familiar today, was unusual when Coryate walked. He went alone and unarmed most of the time.

In Europe, the only really dangerous patch was along the Rhine, an armed camp during the Twelve Years’ Truce between the Netherlands and Spain.

Coryate was thrice lucky. Had he walked a little earlier, he would have been blocked by the wars of religion in France, a little later by the wars of religion in Germany. And at all times he was in danger from his big mouth.

A decided Protestant, of apparently conventional Anglican views, he liked to harangue Catholics, Jews and Hindus. Once, in Venice, he was lucky to escape without a drubbing, and it appears he was wise enough to curb his tongue while in the Ottoman territory. In India, he was tolerated because he was judged to be mad.

 Among fellow Englishmen, he was likable enough, a bit ridiculous, as he still seems today.

Friday, March 28, 2014

Book Review 316: The Nazi Economic Recovery 1932-1938

THE NAZI ECONOMIC RECOVERY 1932-1938 (second edition), R.J. Overy. 77 pages. Cambridge University paperback There are two common views of Germany’s economic rebound after the Great Crash: that it was propelled by spending on warlike industries and a big army and air force; or that the Nazis were a sort of proto-Keynesians before Keynes. A later wrinkle on the second view -- because 21st c. rightwingers are desperate to find exculpations for the spectacular failure of their ideology in the Bush Crash -- is that because German economic moves were similar to those of the United States, that makes the New Deal fascist. None of this stands up to analysis, as R.J. Overy shows in what is virtually a review article on the economic history of Germany in the ‘20s and ‘30s. (The essay is intended as a scene setter for students, one of a long series sponsored by the Economic History Association.) The first common notion is easily disposed of: German recovery had gotten under way before military spending became important in 1936. In fact, current opinion is that the second Four Year Plan and rearmament retarded expansion by directing effort into unproductive areas. The second notion requires some sophistication to rebut. There is more to Keynesianism than government deficits. And as Overy shows in a long list, the Nazis adopted none of that. Germany was in a worse state than any other advanced state by 1931-32, but there are only a few broad areas in which economic policy can operate. Thus, if taxes are kept very high (as they were in Germany) then consumption must fall. And it did. By 1938, German workers enjoyed full employment (not all of it paid, though), but their pay was held low in both nominal and real terms. A German worker drank less than half as much beer in 1938 as he had in 1927. This was opposite from the situation in the United States, where real wages (for those employed) were higher. Overy does not mention that almost all of the 500,000 Germans who had emigrated to America to find work in the ‘20s returned to Germany after 1933. This makes the full employment regime achieved by the Nazis that much more impressive. Yet not all that impressive. Hitler saw to it that Germany looked busy, but economic expansion rates were considerably lower than in Germany before 1913 or after 1945, or in most of Europe in the ‘30s. Overy considers that politics trumped economics in the Nazi government. “Reemployment and trade revival he (Hitler) regarded as a precondition for further political ambitions.” Also, he had a mystical vision of German peasantry expanding into the east, but German agriculture was very inefficient, so that would have retarded expansion. As many historians have concluded, Nazism in practice was incoherent, with state and party agencies working at cross purposes and all of them imjecting bureaucratic sclerosis into an economic system that was already far behind Britain or the U.S. when it came to efficiency or innovation. The Four Year plans “never quite amounted to a central economic plan.” So much for the idea that because the movement’s name was National Socialist German Workers Party, it was socialist. It is a fair judgment on the depth of understanding of American rightwingers today that they can believe such nonsense. Nor was it, as noted above, pro-worker (though it was certainly national). But neither was it a party beholden to big business. The Nazis promised everything to every faction but in the end kept it all for the party.
(It has nothing to do with Overy’s text, but the cover illustration chosen by some Cambridge University Press designer for the paperback edition is a screamingly funny example, by one Kettler, of Nazi gay porn. Tom of Hanover got nothin’ on Herr Kettler.) CORRECTION (April 14): Sorry, Tom of Finland, not Tom of Hanover. reminds me of the right guy:

Thursday, March 27, 2014

Compounding woes

The New York Times has a short, alarming but about reverse mortgages. It alleges lenders deceive and jerk around the borrowers or their heirs. This is news? No, but this was news to me:
Already, the combined debt of Americans from the ages of 65 to 74 is rising faster than that of any other age group, according to the Federal Reserve.
I suppose it shouldn't have been, considering the well known fact that most Americans do not have sufficient assets to survive once they quit working. I had sort of implicitly assumed that whatever these people were doing (starving, probably) they were not borrowing, because who would lend money to someone with small income and no longer any labor value? Silly me. These are lenders. They are reckless. I have never paid close attention to reverse mortgages, though I have heard enough horror stories that I would have been leery of them. What the Times story leaves out is the clinker in the scheme: the magic of compounding works just as magically when the money is coming in as when it is going out. That is, if you put your money out in savings, compounding helps multiply the total (or it will again if the Fed ever leaves off its low-interest strategy). If you bring money in via a reverse mortgage, the balance balloons quickly (despite Fed policy this time) because since the borrower is not paying interest or principal, he is paying interest on interest. In other words, a reverse mortgage is an Alt-A mortgage, the most toxic of all mortgage scams. Worse really, since it doesn't even offer a "teaser rate" period. Triply worse, even, since an Alt-A mortgage can work to the borrower's advantage in a rising market. In a reverse mortgage everything is, well, reversed, and a rising market adds to the misery of the borrower (or heirs). Some of the deficiencies of the Times story are made good in the comments. This is the kind of story that elicits a lot of personal experience replies, one of the nifty but dangerous features of Internet journalism. Not all the comments are well-informed or honest, but some are.

Wednesday, March 26, 2014

Kicking Kickstarter

RtO has 0 interest in Kickstarter as a method, but it does value high-quality comments on the Innertubes. Here you get 'em in spades. Good reading, even if you have no interest in Virtual Reality technology. Close to 20 years ago now, I was invited to a VR presentation at the Maui High Performance Computing Center, one of very few places at that time with the digital muscle to drive a VR program. The presenter, who was from the U. of Illinois though I have forgotten his name, had a mantra: With VR you would soon be able to interact "without bringing the meat." I didn't buy it then and I don't buy it now. A little story will explain why. In the early, early days of the Internet a few forward-looking Maui companies were getting Webfeet. They were badgering me to write stories about them in The Maui News, and in several cases I did. At that time, my son was finishing up his degree at SUNY-Purchase, which is next door to Armonk, where IBM has its headquarters. Hal was working with one of his professors on alpha testing of VRML, the first program that could reliably make Internet screens look 3-D. IBM was promoting Big Blue, its chess-playing software, by staging a match with Kasparov. Each move, as it was made, was published on the Internet. (Later on, when Hal was telling me the story that is the point of this story, I asked him how many hits Big Blue was getting and he said, "Two million a day." I was being pestered by local businesses who were getting 20 hits, so I said, "That's my new standard for getting a feature in The Maui News, two million hits a day." But that is not the point of this post.) IBM was spending freely, commissioning a custom set of chess pieces etc., but the moves were just being put on the 'Net on 2-D. Late in the match, someone who knew Hal mentioned to someone at IBM Armonk, "You know, there's a kid down at Purchase who can put those moves in 3-D." So IBM called Hal, and he put the match into 3-D overnight for them. And that's the point of this story. I thought then and still think that face-to-face and personal contact is the way people work best, and that includes learning in and out of school, finding work and customers and mating. I spend a good deal of my time as a "social media director" trying to fool the algorithms into thinking I'm "real." You don't hear much about "virtual corporations" any more, do you? They don't work very well. (A friend who tried to start one told me, "You REALLY have to trust your partners." That's true of other businesses, too, but on the Internet "nobody knows you are a dog.") Hal's introduction to IBM -- the result of an accidental encounter on the sidewalks of Armonk -- eventually sent him to Japan and Russia, and helped him create the career he is pursuing 20 years later. This has large implications for efforts to get America's underclass on the road to the middle class, but that's a topic for another day. For now, I'll just say that Barack Obama's "you didn't build that" line was exactly right and the howls from the rightwingers proved how out of touch with real people they are.

Have you tried . . . ?

Have you tried this? What did you think of it?
I apologize for the fuzzy picture. I was hurrying toward checkout at Safeway (in Maui Lani) when I caught this out of the corner of my eye. Just had time to grab a quick shot. I didn't have a chance to see if the mac nuts are flavored with real SPAM™ or artificial SPAM (apparently neither). I have not noticed this at any other place I shop, and this package was all by itself on a produce shelf. If I were in, say, New York, I'd suspect a spoof. Not here. A web search reveals you can buy the stuff here. And last year, the Los Angeles Times reported that Hamakua Mac would try to get its SPAM™ nuts into groceries. Maybe it has.

Monday, March 24, 2014

Shocka! Nobody shot in Florida dispute

It seems from this report that a Florida woman was standing her ground in the loading area at Lowe's. Yet, incredibly -- it was Florida, after all -- the dispute ended without anybody getting shot. Just goes to show how terrible things are when not enough hotheaded and/or obnoxious people exercise their Second Amendment rights. This situation could so easily have provided another example of how going armed leads to a more orderly, safe and constitutional environment. As it is, nothing but a manini (yet still felonious since senior citizens were involved) assault and battery case.

Sunday, March 23, 2014

To the shores of the Putrid Sea

Way back on March 5, my Facebook friend Ali Choudury in London posted this:
In late czarist times, the Russian Foreign Office commemorated a royal anniversary by commissioning a research project in the archives. In its ceremonial memorandum to the czar, the foreign minister announced that they had reviewed the last 40 wars the state had fought and were proud to declare that Russia had started 38 of them.
He did not explain what, aside from curiosity, made him do it. Perhaps he was seeing further into the future than the rest of us. Whatever, it is worth keeping in mind in the context of of nostalgia among Russians, from Solzhenitsyn to Putin, for the happy times of tsarist hegemony. If, as it appears, Putin is determined to restore the tsarist empire, then we Americans need to corral our bloodthirsty rightwingers. Take McCain. He has been involved in three wars, all lost, but he wants to keep trying. A few weeks ago he was thirsting to lose another war in the Middle East (Syria this time). Balked, something turned up in eastern Europe. In the ‘50s, our rightwingers, conscienceless cowards that they were, kept demanding a war to “liberate” the states of eastern Europe, delivering them from communism back to their preferred fascism. Thankfully, it was “all for buncombe” and they knew better than to actually fight. Bad news for the handful of brave, foolish democrats in Hungary, Poland and elsewhere who our rightwingers led down the garden path, seduced and abandoned. I am not at all sure that our current crop of rightwing war wimps like Lindsey Graham have the sense of, say, Roman Hruska. I don’t know if they are scaring Putin or not, but they are scaring the hell out of me. As usual, Americans are ready to meddle without bothering to find out anything about the people they intend to meddle with. This applies to lefties as much as to righties. A good example came a couple of weeks ago when a public radio program devoted to “in depth” reporting called “Tell Me More” had leaders in the United States of the Ukrainian and Russian Orthodox churches on the air to call for cooler heads. Obviously, they (the radio producers) had not the slightest idea about religion in Little Russia. The Little Russians have their own form of Christianity, they are Catholics. The church is called (by the very few English speakers who have ever heard of it) Uniate, because it is in spiritual union with the Vatican. No surprise that Great Russian and Little Russian Orthodox are ready to get along -- they are the same. They are not, however, ready to be peaceful with the Catholics, or vice versa. All three, of course, hate Jews. Putin is not wrong when he accuses the “democratic” revolutionaries of nazi tendencies. Some of our bought-and-paid for rightwingers have jumped on this. What the Putin fanboys don’t get is that the Ukrainians and/or Russians on the pro-Moscow side are equally nazi. Everybody in Ukraine is. The pogroms from 1882 on that drove 3 million Jews to America were concentrated in Ukraine, especially southern Ukraine, with an epicenter in Odessa. When the Ukrainians greeted the German army with bread and salt and flowers and kisses in 1941, it wasn’t just that they were glad to have been relieved of the oppression of the Stalinist Great Russians. They also admired Nazi racism. Ukrainians were enthusiastic helpers in the Holocaust. While it would be nice to defend a small nation of democrats from ruthless Great Russian perfidy, no such nation exists in Ukraine. This isn’t Munich and it isn’t 1938. Things are looking grim, again, for the Crimean Tatars, who fit the picture of an oppressed minority much better than the Little Russians do, and no worse, at the least, than the Tibetans. The problem with rescuing the oppressed in Crimea or Tibet is that you cannot get there from here. Not for nothing is the gateway to Crimea called the Putrid Sea.

Friday, March 21, 2014

How weird is that?

At the pawnshop, I often say that on Maui we end up with some strange items, because of people who travel the world and bring back stuff. Then they divorce, or die or get tired of it, and Kamaaina Loan gets it. But some items are stranger than they look at a first glance. The mantel set in the photo has been on the shelf for a while, and I never thought much about it, except to note that my Italian great-grandmother had a pair of urns somewhat in the same style, but bigger, and no clock. A couple days ago, Alex, who minds the store, asked me if I knew what they were. A closer look provided no clue to me, but Alex, who has a doctorate in ethnic studies, saw more. "It's kind of creepy," she said. "The urns are for ashes." For Mamma and Papa, presumably. It isn't easy to see in the photo, but the scenes are of donkeys. I don't know what it implies to store your parents' ashes in donkey urns.

Thursday, March 20, 2014

Book Review 315: Books of the Times

BOOKS OF THE CENTURY: A Hundred Years of Authors, Ideas and Literature, edited by Charles McGrath. 647 pages, illustrated. Times, $30. Writing a review of a volume of reviews is like a dog not only chasing but catching his tail; here goes anyway. I could not have guessed which writer would get the most space in a volume that has only about five pages per year to sample the output of the New York Times since it started its separate book section in 1897. I would have guessed Henry James, but he is only second to Milan Kundera. Kundera gets more than 1% of the whole book. Since this is just a sampling and not a compendium, any reader can easily play, How could they have left (X) out? One obvious answer is that the editors have no interest in style. A couple of writers greatly admired (though not by me) for their style get plenty of attention, like James and E.B. White. But there are no reviews of P.G. Wodehouse, Evelyn Waugh, Robert Coover, James Thurber or John O’Hara. At least all these writers are mentioned in reviews of other writers, although a carping critic might wonder whether the single mention of “Waugh” refers to Evelyn, Alec or Auberon. But T.H. White, Michael Frayn, Julian Rathbone and Amos Tutuola are entirely absent. The editors note, in marginalia, some of the lapses of the Review over the years. For example, they find the time to note that it took 362 days for the Times to review Robert James Waller’s “Bridges of Madison County.” But no mention of Tutuola, who was both one of the handful of master stylists of written English during the Review’s first century and the first African to publish a novel in English. I cannot determine whether the Times ever reviewed any of Tutuola’s books, but it did note his death in 1997, though it got his age wrong by 30 years. It is not surprising that Tutuola would be overlooked or ignored (if the editors ever heard of him), but it is hard to understand the absence of O’Hara. By far the biggest Oops, though, (although not so labeled) was Lorine Pruette's 1943 notice of "The Fountainhead," which calls Ayn Rand
"a writer of great power . . .subtle and ingenious . . . (with) the capacity of writing brilliantly, beautifully, bitterly."
The Review apparently came partially to its senses by 1958, when Granville Hicks's notice of "Atlas Shrugged" (not reprinted here) elicited a testy note from Rand's fanboy, the then unknown Alan Greenspan, scoring Hicks for raising an eyebrow at Rand's interminable "celebration" of "unrelenting justice." Justice never did give either Rand nor Greenspan their just rewards, making this a very funny walk down memory lane. Since "Books" was published in 1998, when Greenspan had not exposed himself (in "The Age of Turbulence") as perhaps the most pernicious American fool of the late 20th century, we cannot, regrettably, suspect editor McGrath of supercilious mischief. Not a single review is memorable as a piece of writing, but there was a noticeable change after World War II. Up until then, Times reviewers were highly likely to get the vapors when presented with bad language but they did usually attempt to give the reader some indication of what the book was about and even how well it was done. Starting about 1945, a lot of the reviews were taken by the writers as opportunities to examine their own navels for lint or whatever else might be found there. If reviewers have any justification for existing (and I think they do), it should be to suggest which books out of the 100,000 or so issued each year are worth their money and time. Besides reviews (including dozens of condensed “Editors’ Picks” for the quarter century ending in ’97), there are interviews of writers and essays by them. Not all of these do their subjects any favors. Willa Cather is one of the highly regarded American novelists whose books have been in my “to-read” pile; but after reading the 1924 interview she gave to Rose Field, I wouldn’t touch her books with a bargepole. And after reading Saul Bellow’s long, whining essay about the low quality of American intellectuals, I now have a better understanding of why I abandoned my one attempt to read Bellow (“Henderson the Rain King”) after 50 pages. On a positive note, this book tipped me to a number of books I had not heard of, and I have ordered volumes by, among others, Walter Isaacson, Kenneth S. Davis and Diane Johnson.

Sunday, March 16, 2014

Getting away with it

In a report that confirms the blindingly obvious, Gretchen Morgenson of the New York Times says the Obama administration has not attempted to investigate -- still less prosecute -- mortgage fraud that created the Bush Recession. It is not easy to guess why. While a vigorous campaign would have alienated some political donors, it ought to have been politically popular. While some of the worst offenses were probably not crimes -- in large part because the Clinton and Bush II administrations and the Congresses of those times refused to regulate financial derivatives -- others should have been relatively easy to prosecute. It might not be too late. Or maybe it is. When Edward Kauffman was a senator from Delaware, he twice chaired hearings meant to prod he Justice Department to get moving. He told Morgenson:
“The report fits a pattern that is scary for a democracy, that there really are two levels of justice in this country, one for the people with power and money and one for everyone else. And that eats at the heart of what I think makes this country great.”

Monday, March 10, 2014

When seconds count . . .

The gun nuts are fond of saying that when seconds count, the police are minutes away. This is supposed to justify walking around armed all the time, because you just never know. But is this correct? Is forewarned both armed and forearmed? What if the police are right there? What if they know trouble is coming? Is carrying heat the best protection? Not if what happened in Fremont, Ohio, is any guide. Read it and weep, but it looks as if a cop in a bar (presumably armed no matter what the gun carrying laws are for other people in Ohio) knew an angry guy was making trouble, but that was no protection for him, since Angry Guy just opened a side door and started shooting. "Thoughtless reaction" -- as advocated by gun nut Cory Trapp (see "Equal Time for Gun Nuts," March 1) -- doesn't work if you are being assassinated from ambush, as it appears happened to Officer Chavez -- and to two other people. If you add up all the people saved by gun mania and subtract all those, like Officer Chavez, killed by it, you get a pile of the slain, millions of them. But the gun nuts are safe from argument. My father, a Catholic, used to use a term from the medieval church about people like that -- invincible ignorance. In the view of theologians, invincible ignorance is a get-out-of-hell-free card in the sin business. Kinda cold comfort up here, though, if you are among the holocaust of the slain (or merely maimed) sacrificed to the Moloch of the Second Amendment.

Sunday, March 9, 2014

Late news from the crash

Gretchen Morgenstern, in of the heroines of the business press in the runup to the Bush Crash of 2008, has a tasty morsel in the New York Times: emails from Credit Suisse admitting in 2006 and 2007 and 2008 that they were not applying any standards to loans they funded:
Many of the emails show the struggle between executives interested in keeping loan volumes high and those worried about the perils posed to the bank by its acceptance of risky mortgages. In June 2006, for example, one Credit Suisse executive wrote an email about a fellow executive that said, “I spend my time playing defense from a guy supposedly on my team who won’t stop waiving credit guidelines until we’ve taken on so much water the firm will pull the plug. Trust me, when this Titanic goes down,” the executive concluded, that colleague “will be the guy on the bow proclaiming ‘I’m the king of the world!!!!!’ ”
So much for claims that the banks were forced into their madness by the Community Reinvestment Act. This claim is the mantra of the rightwingers, but it is preposterous. As more and more historical documents are brought to the public (in this case by discovery motions in a civil lawsuit), the folly of te claim is made more and more certain. (Credit Suisse blew about 400 Solyndras on that.) UPDATE MONDAY On another blog, a rightwinger cast doubt on the reliability of the Times report. We're in tinfoil beanie territory, but it was amusing and instructive to use the magic of the Internet and skip the Times and go to the source. This paragraph is fun:
"Specifically, a borrower obtained a loan for $450,000 in 2006 which was contained within the BASIC 2006-1 offering. This borrower had income in 2006 of between $0 and just $1,262 per month, according to the borrower’s sworn bankruptcy filings. "However, the borrower’s monthly debt payments were at least $5,555, far in excess of the borrower’s monthly income. The borrower’s monthly debt payments were in addition to the borrower’s monthly expenses for things such as taxes, utilities, groceries, health care, transportation, and the like. Clearly, this borrower could not afford to repay the loan. "This is confirmed by the fact that the borrower declared bankruptcy shortly after obtaining the loan at issue, in 2007."

Saturday, March 8, 2014

Book Review 314: Malaria

MALARIA: Poverty, Race, and Public Health in the United States, by Margaret Humphreys. 196 pages, illustrated. Johns Hopkins In “Yellow Fever and the South,” Margaret Humphreys showed how generations of local efforts failed to stop the scourge, but the disease fell immediately to a centralized attack; in fact, the disease in effect created a national public health service. That was in 1905. In “Malaria,” we find that a similar approach did not work. In fact, although malaria disappeared, the disease won. It was not eliminated; rather it eliminated its necessary hosts (us) by chasing us away. The American South was marginal territory for malaria anyway. More than half a century after malaria disappeared from the South, it remains unconquered in Africa, south Asia and some other places. Humphreys, a physician, historian and Southerner, writes with skill, sympathy and candor. She is not afraid to call on her family’s experiences in the Tennessee Valley to illumine her subject. And she packs a lot of information in a few pages. One factoid not in the book, but helpful in understanding the problem, is that when young Abe Lincoln was lawyering in Illinois, malaria was the leading cause of death there. It retreated for a variety of reasons. Humphreys argues that malaria is not a disease of poverty but of location. Not a disease of a particular class or ethnic background, but universal, although some groups have some resistance: Afro-Americans are almost immune to the vivax type, which was the most widely spread in the United States. Yet by the 20th century blacks were the principal sufferers, and from the most awful type, falciparum. Really a group of related diseases, malaria is far more complicated than yellow fever, a disease of towns. Malaria was mostly eliminated from towns in the South when the yellow fever mosquito was eradicated. It stayed in the rural places, where eradication of mosquitoes was impractical. Various methods were tried. The disease plasmodium was assaulted with quinine. That did not work. The anopheles mosquito was assaulted with oil, Paris green and, when it became available, DDT. That did not work although it appeared to. Humphreys contends that while public health measures failed, it was action by the central government that ended malaria. The New Deal’s Agricultural Adjustment Act, intended to erase the uneconomic small farms of the sharecroppers, did it, although with great suffering because of (largely) the corrupt practices of landowners. In any event, the ‘croppers left the land, driven by starvation and despair, lured by work in the towns. Without hosts, the plasmodium died. The process was almost finished by the time DDT arrived. It had been going on since 1860, the peak of plow farming in the South. Today, the people are gone, their fields replaced by pine forests, mechanized cotton fields and pastures. While the complex story of malaria in the 20th century is the meat of the book, the heart is in a chapter of oral histories taken by the New Deal’s Federal Writers Project. There the voiceless (and often illiterate) got to set out their experiences with “fever.” Humphreys, who teaches at Duke, was also led to a trove of forgotten documents on the public health campaign in North Carolina, stored in a rat-infested barn and rescued by her for our heritage. Humphreys is a decade younger than I am. I can remember some of the scenes at the tail end of the malaria era in Tennessee, and I can confirm that things were as she describes them.

Book Review 313: April Blood

APRIL BLOOD: Violence and the Plot against the Medici, by Lauro Martines. 302 pages, illustrated. Oxford paperback It used to be said, during the ‘30s, that German fascism couldn’t be really dangerous because a nation that produced Bach and Beethoven could not be evil. Something similar seems to have infected historians, who have never -- until “April Blood” -- attempted a warts-and-all recitation of the Pazzi conspiracy. At least so says Lauro Martines, and he apparently means all historians, not just those writing -- as he does so gracefully -- in English. Surely, the imputed thinking went, a man like Lorenzo Il Magnifico, who sponsored so much wonderful art and scholarship, could not also have been a murderous, corrupt, scheming, grasping machine boss like, say, Richard Daley. The first response, for those enamored of late medieval and Renaissance Italy, should have been, Why not, everybody else was? In Martines’ retelling, the pope, the king of Naples and various other grandees were plotting, in secret, to assist the Pazzis (whose name, sounded out in English as “patsies,” sounds so appropriate) in overthrowing the Medici. Martines paints a Florence in relative decline, no longer the financial center of Europe, but still small and amazingly rich. But because small, vulnerable, with Lorenzo maneuvering among factions only with the assistance of the Sforza dukes of Milan. The Medici were not paranoid; they were surrounded by enemies, not all of their own making. Moreover, the banker-industrialist-landowners were all mercantilists, convinced that if another banker waxed, they must wane. Thus they probably felt entirely justified, when they could seize municipal power, to use that to destroy their rivals. Martines, in the interest of a galloping narrative, skimps on the economics, one of the few disappointments in this book. They did it by taxation, then proscription and exile; and like contemporary eldest sons of Turkish sultans, they felt obliged to destroy all the kin of their enemies. The great genius of the Medici, in this version, was not art but the manipulation of local politics. The Pazzi, at least equal as bankers, were as bumpkins compared with the Medici in politics. The narrative pivots on the April 1478 attack in the cathedral which killed Lorenzo’s brother but missed him. We are given the maneuvering beforehand, and the vengeance, both immediate and delayed, of Lorenzo. Martines spends much effort on describing the brutality of the events. Next time you are in Florence, try to picture the Bargello festooned with hanged men dangling from the high windows and the putrid smell of heads left on poles for years. It may alter your views about art appreciation. Martines spends a little time (in a short book) sketching the rises of the Medici and the Pazzi, but barely alludes to the aftermath. After Lorenzo died, it was just a few years before a French army trumped all the conspiracies of the Florentines, then was trumped itself by syphilis and Spanish threats. In the 16th century, the Medici came back, but by then it was a much different world.

More on stupid bankers

A week ago, RtO had a nostaligic post ("This is where I came in," March 1) about the good ol' days when American bankers threw money away in Latin America. I noted that Citigroup, despite the billions it spends on corporate image-falsification, was unable even to get out 2 press releases that did not contradict each other. Citi has done it again. To recap, it looks as if Citi's big Mexican subsidiary was paying fake invoices for years and nobody noticed. The losses admitted so far are around $400 million, which in the modern money-of-account (no, not Bitcoin, silly, Solyndra), or one Solyndra. A report today at Bloomberg News suggests that Citi doesn't object just to government regulation. It isn't interested in self-regulation either:
Efforts by Citigroup Inc. (C) senior executives to tighten controls in Mexico were rebuffed by managers there for at least five years before the U.S. bank found the local unit had suffered a $400 million loan fraud last month, four people with direct knowledge of the matter said. Employees at Grupo Financiero Banamex SA process[ed] some documents by hand instead of using modern information systems that make it easier to detect flawed loans, said another person. . . . Banamex, Mexico’s second-largest lender, snubbed efforts to integrate systems with its New York-based parent and was slow to improve controls, technology and corporate governance, the four people said.
I am completely unsurprised, especially when we learn that Banamax was reporting very large profits. Nick Leeson, call your office. (Leeson was the trader who reported very large profits for Barings until it failed. I reviewed his book way back before there was an RtO.) (For the record, RtO has no plans to write about Bitcoin. While amusing, it is insignificant. Nor was it, as some naifs in the business press have written, a Ponzi scheme. It was more like selling watered stock, if you want a financial comparison; but was really just a variation on the old gold brick con -- "I have this gold brick I want to exchange for cash, but I need your help. It is worth $10,000, and I will split 50-50, but you have to prove your sincerity by putting up $1,000. Thank you for the cash; here's your gold brick, wrapped in newspaper. Oh, look at the time. I gotta run. Good dealing with you." (RtO estimates the residence time of government money deposited with Mt. Gox at under 10 minutes. (I do not for one minute believe that the Mt. Gox losses were really a Solyndra. The amount of real assets moved into Mt. Gox was much less.) What I love about the Bloomberg story (aside from the fact that Bloomberg is showing its usual tenacity) is the latest Citi press release:
“We dispute assertions by anonymous sources peddling theories that the management team is somehow unaccountable or autonomous. While Banamex is a subsidiary of Citi, it is absolutely subject to the same risk, control, anti-money laundering and technology standards and oversight which are required throughout the company.”
Lord help us, I believe the second sentence is 100% accurate.

Friday, March 7, 2014

Surgical strikeouts

Reports that Secretary of Defense Hagel wants to shrink the Army to its smallest size since “before World War II” are somewhat misleading. The 1940 Army was already far bigger than the 1938 Army, because it was inducting hundreds of thousands of men in our first peacetime draft. RtO will review the (widely unknown) history of the American standing army but the point is that Hagel is wrong, the generals are wrong, the previous administration was wrong. The United States needs a bigger, less capable army. Didn’t we learn anything in Iraq, in Vietnam? No, we didn’t. Or, more precisely, our high commands, civilian and uniformed, took away lessons but they were the wrong lessons. It is probably correct to doubt that massed tank battles will occur again -- the last was in 1973; just as carrier-to-carrier naval battles are not going to recur -- the last was in 1944. But the need for lots of infantry will never cease. I said so before the Second Iraq War (before there was an RtO), and was proven correct. We lost that war for lack of infantry (and competent leadership), lost inAfghanistan for the same reasons; and lost in Vietnam for the same reasons. You can liberate France (in 1944) without needing to leave a lot of infantry behind. You cannot do the same in Germany in 1945. You can liberate Ukraine in 1941, but if you make the Ukrainians hate you, you cannot hold it without a lot of infantry. For reasons that are obscure, Americans have always been afraid of a standing army, and even more bizarrely, of a standing navy. Congress would not recognize the rank of admiral for nearly a century, although the number of times a functioning democracy had been overthrown by an admiral could be counted on the horns of a unicorn. After the Civil War, the Army and Navy were immediately shut down. Until 1917, the largest formation in the Army was the regiment, about 3,000-5,000 men. And the US didn’t have many of them. European and Asian armies had scores of divisions of 10,000-12,000 men, and when they mobilized their reserves, hundreds. Before the Selective Service Act of 1940, the American Army was smaller than Romania’s; and until the famous Louisiana maneuvers of 1940, no American general had commanded a force as large as a division in the field since 1919. (The garrison on Oahu, variously called the Hawaiian Division or the 24th and 25th Infantry Divisions, were fortress troops, not called on to maneuver across large spaces. The US Army has always differed from other modern armies in forming only front-line divisions. Although at times understrength or underequipped, all American divisions are expected to be capable of front-line service. Our army did not field divisions of old men or invalids for restricted duties. (Although we tend to rate the World War II generals highly because they fought and won a big war, they were not very impressive. When the Marines wanted to form divisions in 1942, the Army resisted, on the grounds that Marines did not know how to manage large formations, even though no Army officers had experience at that either. In the event, the Marine divisional commanders were better than the Army National Guard commanders and most of the regulars; and in Korea in 1950 the only competent divisional officer in the whole American expeditionary force was a Marine, O.P.Smith.) After Japan’s surrender, the Army and Navy were shut down again, shrinking to a size that Chief of Staff Marshall said left him unable to defend Alaska. The police action in Korea reversed this traditional policy, and the standoff with Russia led to a novel policy: For the first time in its history, the United States would maintain a very large, uncommitted military establishment. But it did not, in fact, have much to do (duty in the ‘50s was a cushy job for the uniformed services), and business resented the idea of tying up millions of workers to do nothing but march around. The economy was expanding and labor was in demand. However, though large by former American practice, the Cold War military still did not absorb manpower at the rates European states were accustomed to. In the USSR, labor was even more desperately needed, to rebuild from the sacking by the Germans and because Russian work was less mechanized and Russian labor was less efficient; nevertheless, Russia felt obliged to keep a huge army. (Anyone who had looked at the situation from a labor perspective would have foreseen what was to come: Russia, which used almost half its labor in agriculture, would face a crisis of food production which would bring down the regime. This is what happened. Ronald Reagan had nothing to do with it.) The reason the American military was comparatively small was that in the late ’40-‘early ‘50s, it was decided that a nuclear strike force could serve the same functions as an army, and more cheaply. This was the deciding factor in going ahead with the Super (the H-bomb). Whether the nuclear strike force was really cheaper than a large army is debatable. Since we ended up with two nuclear strike forces, probably not. But large armies are so expensive that even with a nuclear air force and a nuclear navy, the overall military budget might have been smaller than for a Russian-size army. And that does not count the cost of starving American business of labor, which would have been severe. In theory (there was always a lot of theory available, most of it, in retrospect, nonsense), the Department of Defense was capable of fighting “two and a half wars” simultaneously. In reality, because we were unwilling to use our two nuclear strike forces, America was incapable of fighting even one war -- not when the enemy was numerous, tough and dedicated. It might have been different if the South Vietnamese army had been tough and dedicated (it could have been large, on our dime). But the South Vietnamese were not fools; they did not want to die for Madame Theiu’s racehorses. The American army sent to Southeast Asia was necessarily small -- 525,000 at its biggest (and many of them stationed in places outside Vietnam). This was a miniature force compared to what was thought necessary in World War II (13 million). American generals, who were both incompetent and widely corrupt, complained that they had only a small combat force (about 200 infantry battalions at the most), but they did not understand that what they required was not more assault formations but more -- many, many more -- rear area guard formations. The fact was forced, dimly, onto American political leadership when President Johnson sent Clark Clifford to the theater. The Pentagon was demanding another 100,000 men. Clifford told Johnson, correctly, that 100,000 more men would not do the job. It is unfortunate that only Democrats (and not all of them) learned this lesson. Although Nixon decided to bug out (called Vietnamization, actually surrender), the lasting opinion among rightwingers has been that we were on the verge of winning and gave up too soon. (Probably no victory was possible so long as the masses were unpersuaded that we were on their side, an unlearned lesson that we have failed to learn again in Afghanistan and again in Iraq.) In any event, Vietnam shattered the Army, and no serious steps were undertaken to remake it. No American Scharnhorst or Gniesenau appeared to make fundamental changes. The lesson the Army thought it learned was to be ready to fight small wars. It wasn’t even good at that as the fiasco in Grenada proved, but against an inert opponent in Kuwait, it worked on the tactical level. Gulf War I was a strategic failure because Bush I was unable to fulfill the first principle that is taught in even the ROTC manuals for children: the object of warfare is to impose your will on your enemy. The US Army had no infantry. The high command, obsessed with a massive armored thrust into Europe, had put all its strength into 7 armored divisions. In Kuwait, it had to borrow infantry from small nations who were unwilling to get involved in an occupation of Iraq. That is why, whatever else is said, Bush did not push on to overthrow Saddam. He could not. With a genius for failing to learn from experience, the United States revamped its army so that it was incapable of any mission: not enough armor to fight a tank war, not enough infantry to fight an infantry war, and, especially, not enough garrison troops to hold ground occupied. History repeated itself. Badly beaten in Iraq, Petraeus (another MacArthur in some ways) advocated a “surge.” This acknowledged that General Shinseki had been right, we did not have enough infantry to go to war; but the numbers were laughable -- about 30,000. It failed but accomplished its real purpose of covering another bug out. The Iraqis cooperated by being smart enough to realize that if they just held still for a few months, we would do what they were fighting to have us do: leave. (The Taliban have not been so sophisticated.) That left only one doctrine: the surgical strike. This has been the favorite delusion of the advanced thinkers for about 75 years, sometimes more prominent, sometimes less, but now elevated into the sole function of the military. It began with the airmen and their preposterous claims of being able to “put a bomb in a pickle barrel from 30,000 feet.” MacArthur bought into this completely and was lauded for being “air minded.” He really did think he could master east Asia with a couple hundred B-17s (but did nothing to either use or protect them when the fighting began). As World War II proved, even tens of thousands of strategic bombers cannot win a war. In Vietnam, all sense of discipline, compassion, analysis and competence collapsed. The citizenry was told, simultaneously, that we would win a limited war through surgical strikes and control the populace with the surgical strike’s opposite, the free-fire zone. In the end, neither. Now we are told that the surgical strike will be adequate to respond to any threat; apparently, our enemies have agreed to dispose themselves to be vulnerable in just this way. This was inevitable with the volunteer army. No one (except time servers) wants to volunteer to be a lightly-armed infantry grunt patrolling whatever disease-ridden hellhole we have decided to corral this time. They all want to be SEALs and Rangers (as a survey of women in uniform revealed last week). And why not?

Tuesday, March 4, 2014

Equal time for gun nuts

RtO has had harsh things to say about gun nuts, so in the interest of fairness, let the gun nuts speak, directly and sincerely, to the public and explain why they feel the way they do. Take it away Cory Trapp:
Many people are involved in self-defense shootings every year, and it would appear that most of them have very little effective training. Some survive the event, some don’t. Of those who do survive, do we credit skill or random chance? More important, what do YOU want to depend on if the fight comes to you? The choice is yours, good fortune or superior skills. The majority of gunfights happen in seconds, generally without much warning and at very close range. It does not take an extraordinary amount of marksmanship to hit a person in the chest at three feet.
RtO endorses that last sentence 110%; many 4-year-olds who got up in the middle of the night would say the same, if they hadn't been shot dead by their fathers. Let's hear more from Cory Trapp, who is a "gunsite instructor," whatever that is:
For the reactive fight, where we have somehow failed to perceive the problem before it occurs, we need an advanced skill set, and it needs to be highly developed. You must have a reflexive, reliable and FAST presentation (drawstroke). You must be able to index the gun on target, then instantly and smoothly fire rapid, accurate bursts. Finally, this must all be done while getting off the line of attack, MOVE. Without this combination of skills, you are basically dependent on your attacker(s) being totally incompetent.
I imagine Cory Trapp is thinking of split-second decisions like this, in which a cop quickly, reflexively and reliably -- even fatally -- shot a boy dead who answered the door at his own home while holding a toy. Imagine how badly that would have turned out had the LEO (gun nut jargon for Law Enforcement Officer) not had the kind of advanced training offered by, eg, Cory Trapp, who advises:
The presentation consumes about half a day, and from then on you should be spending about thirty minutes each night in dry practice for two weeks, then every other night for a month, thereafter about once a week. Bear in mind that it takes about 5,000 repetitions of any set of movements to make it reflexive, where it can be done without thought.
Yes, that's what we want to see, more shootings accomplished "without thought," because we don't have enough of that kind already. Cory Trapp has other good advice, for example, it is well to practice moving out of the line of fire from a Wii controller by working with a friend, but you can't be too careful (CAPS LOCK IN ORIGINAL):
This is a skill set that can be well practiced just using blue guns or Airsoft replica guns with a training partner. DO NOT USE REAL FIREARMS WHEN TRAINING WITH A PERSON!
These skills are like a life jacket or fire extinguisher.
I am not sure how a gun is like a fire extinguisher because I don't remember the last time someone was killed in a drive-by spritzing; nor can I figure out the meaning of the comment on this blog post that Barack Obama is a mulatto who is (or perhaps is not, it's hard to tell) a communist terrorist like "Nelson Candela." I recommend reading the whole thing to appreciate the pure paranoid lunacy of the author and also, if Cory Trapp rings your doorbell, don't answer.

Sunday, March 2, 2014

Where dumb ideas come from

Do you ever wonder where rightwingers get their nutty ideas about economics? I mean, they are too uniform for them to be all arriving at the same place independently. I know I got my rightwing ideas primarily from the Readers Digest. I abandoned them when I was 16 and stopped picking up pocket money from mowing neighbors' lawns and painting their fences and got a wage job in private business. It was soon apparent that business did not work in real life as I had been told it did in the RD. Where else could these ideas be found? Not every young person reads the Readers Digest. Well, other obvious places might be the Saturday Evening Post, the canned op-ed pieces in small-town newspapers and -- church. The close association between nutty economics and fundamentalist religion is clear enough. An amusing example was turned up in today's installment of "Sundays with the Christianists," Doktor Zoom's hilarious weekly autopsy of fundie home-schooling American history textbooks. Both books under deconstruction come out of the highest reaches of fundie intellectualism, Bob Jones University and Pensacola Christian College. This week's lesson concerns the prosperity of the '50s. The kiddies are taught:
Under President Eisenhower, free enterprise (capitalism) thrived. In 1956, the Federal Highway Act provided funds for interstate highways. Soon road crews were constructing great roadways, linking the states with an Interstate Highway System. Many Americans took to the new highways and toured the country in the late 1950s.
I have had people with advanced degrees argue with a straight face that public highways are not socialist. To them, my response is Roy Zimmerman. Dok Zoom helpfully recalls some other Big Gummint programs of the '50s, like the St. Lawrence Seaway. Today the Tea Partiers have departed so far from GOP policies of the Eisenhower period that they don't even want to pay to keep the Interstates in repair. Those highways are, after all, over 50 years old and showing their age.

Saturday, March 1, 2014

This is where I came in

In the early 1970s, when I first started following American business trends, one of the big stories was the loss of $1,000,000,000,000.00, more or less, by American banks on really stupid loans South of the Border. A leader of these incompetents was Citi. I was not yet aware of Citi's long record, back to the days when it was National City Bank, of making bad loans in Latin America. Not just loans that, so to speak, went south, but idiotic loans, deals that the silliest country banker wouldn't touch. Citi took over from Barings, which had held the franchise for stupid loans in Latin America during the 19th century. Some things never change:
As far as I can understand it from Citigroup's press release, which is not very far, here's how Oceanografia S.A. de C.V. took Citi's Mexican subsidiary, Banamex, for $400 million:
Chump change these days but the principal (if not the principle) remains the same. Well, they say you can't con an honest man. That isn't universally true but I'd say it's true here since as reporter Matt Levine shows, Citi was unable to get its lies straight in its duelling press releases. Pretty funny if it wasn't your money.