Daily Office:
Monday, 25 October 2010
¶ We may a practice of reading the Times’s conservative columnists, David Brooks and Ross Douthat, very, very carefully, because while they often have good things to say they are just as often merely plausible, as Mr Douthat is today, comparing TARP and the voters’ reaction against it to Truman’s deployment of the atomic bomb against Japan and the immediate taboo on using such devices again. The upshot:
What’s true in wartime can be true in economic policy as well, even if the stakes aren’t life and death. TARP may have saved the United States from 15 percent unemployment, but it also implicated our government in the kind of crony capitalism you’d expect from a banana republic. If it was necessary, it was also un-American. If it worked, it did so while doing grievous damage to the credibility of Wall Street and Washington alike.
So it’s a healthy and necessary thing that our first post-crisis election has been defined by a groundswell of anti-bailout outrage. This no doubt seems unfair to the politicians who may lose their jobs (or have already lost them) for doing what they felt they had to do. But it would be an infinitely worse sign for America if the present backlash hadn’t materialized at all.
There is much to complain about here, but what’s most egregious is the implicit attribution of TARP to the Democratic Party. If the Republicans gain control of Congress in the coming election, the blessed event (not) will be far more attributable to the White House’s poor-to-nonexistent leadership skills on the economic front (not to mention the retention of Timothy Geithner and Ben Bernanke) than to some heallthy principle of political isostasy.
¶ We think that Ben Brantley is a bit of a doltish chump for holding Jan Maxwell’s age against her performance — obviously splendid by his own account — in the Second Stage revival of Arthur Kopit’s Wings. (NYT)
Identifying entirely with Ms. Maxwell here is an obvious asset to a play that asks you to see as a stroke victim sees. But while Ms. Maxwell gracefully conveys the frustration and anguish that come with being unable to express what she wants to say — or even to know what she wants to say — her Emily is too vibrant, even in distress, to generate feelings of pathos. She is also — dare I presume? — too young.
In his script for “Wings†(originally conceived as a radio play), Mr. Kopit specifies that Emily is “well into her 70s.†Constance Cummings was in her late 60s when she created the part in New York (and won a Tony for it). Ms. Maxwell could pass for a fair 40 and did when she appeared as the winsome stage diva in “The Royal Family†last season. And while I know that strokes afflict people of all ages, casting Ms. Maxwell means you lose the guaranteed air of valiant fragility that comes with an older woman in the part.
Students of acting will admire the range and gradations of responses that Ms. Maxwell brings to her performance. She handles the impressionistic monologues of colliding memories and elusive meanings with grace and emotional fire. But I was most touched by Emily’s interactions with other characters, including Amy, a calm and saintly therapist played by January LaVoy.
Because even though Amy has the upper hand, it is Emily who seems like the gracious hostess in their shared scenes, operating according to refined social instincts that never quite abandoned her. And when, in her internal monologues, Emily recalls the airborne periods of her life as a pilot and a wing walker in aerial exhibitions, Ms. Maxwell — eyes brimming, with a smile that splits the sky — is a truly transcendent figure.
¶ James Kwak’s brisk comparison of nutritionism and financialization shows how dangerous it can be to get meta about vital mattesr. (The Baseline Scenario)
What does this all have to do with finance? Roughly speaking, read academic finance for nutritionism; the financial sector for the food industry; subprime loans, reverse convertibles, and CDOs for highly processed food claiming to improve your health but actually killing you; current disclosure laws for the FDA-approved health claims on corn oil; thirty-year fixed-rate mortgages and index funds for the neglected, unsubsidized, unadvertised fruits and vegetables in the produce section; the OCC and OTS for the FDA; and the long-term increase in obesity and diabetes for the long-term increase in household debt.
In both cases, you have an industry that earns profits by convincing people to do things that are not in their long-term interests; that, in the process, creates negative externalities for the rest of society; and that has cowed regulators into submission, if not outright cheerleading. In both cases, the industry defends itself from critics by saying that it is simply providing what customers want, and hence any new constraints (even, say, accurate organic labeling laws) constitute a paternalistic intrusion into people’s economic freedom. And in both cases, the industry claims that if it isn’t allowed to continue on its current course, the economy as a whole will suffer. (After all, our corn- and soy-based diet is what enables the industry to provide huge numbers of calories at low cost.)
One big difference is that when it comes to the food system, there is a fair amount you can do to protect yourself and your family from its unhealthy effects (if you have the money). With the financial system, it’s a bit harder.
¶ In homage to Maurice Allais, who died earlier this month, Jonah Lehrer writes about the long-term impact of his 1953 paper on the irrationality of loss, what came to be known as the Allais Paradox, when Daniel Kahneman and Amos Tversky got hold of it. (Wired Science)
Their breakthrough came by accident. Kahneman had been reading a textbook on economic utility functions, and was puzzled by the way economists explained a particular aspect of our behavior. When evaluating a gamble—like betting on a hand of poker, or investing in a specific stock—economists assumed that we made the decision by taking into account our wealth as a whole. (Being rational requires factoring in all the relevant information.) But Kahneman realized that this isn’t how we think. Gamblers in Las Vegas don’t sit around the card table contemplating their complete financial portfolio. Instead, they make quick decisions that depend entirely upon the immediate terms of the gamble. If there is a $100 wager, and you’re trying to decide whether or not to ante in with a pair of aces, you probably aren’t thinking about the recent performance of your mutual fund, or the value of your home.
But if we don’t make decisions based upon a complete set of information, then what are our decisions based upon? Which factors were actually affecting our choices? Kahneman and Tversky realized that people thought about alternative outcomes in terms of gains or losses, and not in terms of states of wealth. The gambler playing poker is only concerned with the chips right in front of him, and the possibility of winning (or losing) that specific amount of money. (The brain is a bounded machine, and can’t think about everything at once.) This simple insight led Kahneman and Tversky to start revising the format of their experiments. At the time, they regarded this as nothing but a technical adjustment, a way of making their questionnaires more psychologically realistic.
This minor change in notation soon revealed one of the most important discoveries of their careers. When Kahneman and Tversky framed questions in terms of gains and losses, they immediately realized that people hated losses. In fact, our dislike of losses was largely responsible for our dislike of risk in general. Because we felt the disadvantages of risky decisions (losses) more acutely than the advantages (gains), most risks struck us as bad ideas. This also made options that could be forecast with certainty seem especially alluring, since they were risk-free. As Kahneman and Tversky put it, “In human decision making, losses loom larger than gains.†They called this phenomenon “loss aversionâ€
This simple idea has profound implications. For one thing, it reveals a deep bias built into our brain. From the perspective of economics, there is no good reason to weight gains and losses so differently. Opportunity costs (foregone gains) should be treated just like “out-of-pocket costs†(losses). But they aren’t – losses carry a particular emotional sting.
¶ At The Awl, Eryn Loeb talkes about “My Former Best Friend’s Wedding,” which she didn’t attend, although she gave herself a headache looking at all the photos online. Leaving home isn’t what it used to be; arguably, Facebook has made it impossible. You grow up and apart but not away.
And then we went off to college. The distance between our campuses was hardly insurmountable, but it was just enough to be a reasonable excuse. It wasn’t just about the miles that stretched between us; those just made literal the clichéd divergence of our paths, which seemed to me even then like the plot of some novel I’d read, down to the symbolism of our opposing majors (the sciences for her, the humanities for me). I was invested in being in a different place, and saw her attachment to our hometown as a sort of weakness. Now I think her loyalties were just stronger than mine, that she was less cynical, less restless, maybe more at ease when we were growing up. She wasn’t always plotting her escape.
Of the two of us, she was always easier to like. People were a little wary of me, and for a long time I thought this meant I was doing something right.
The last time Darcey and I had spoken was nearly four years ago, when she called to tell me that an acquaintance of ours—who had been more of a real friend of hers—had died suddenly. We managed to have a nice if surface-y conversation in the wake of the grim update, but the fact of the call stayed unsettling. Half by accident, I’d managed to cut myself off from the people we used to know, assuming we’d reached the point when everyone else would be moving on, too. If Darcey and I couldn’t stick together, I figured, no one else could. But it turned out that I was actually the exception, the outlier who now required special delivery of bad news. She was telling me because she knew no one else would.
Despite this precedent, she didn’t call a year or two later to tell me she was engaged—to a guy we’d gone to high school with, someone she’d loved for years and years. But it was fair to assume I’d just find out. Information like this just trickles out, getting passed along—between friends and parents and the woman who used to cut both of our hair and still cuts both Darcey’s and my mom’s—until everyone knows and you start to feel a little awkward for not acknowledging it to the person at its center, even if she’s someone you can’t say with any conviction you still know.
¶ From Edmund Burke’s The Sublime and the Beautiful to the Pledge to America: Cory Robin traces the vein of hot-air-appreciation that animates conservatives whenever war is under discussion — so long as the actual warfare is far enough away to seem “sublime.” (Chron Higher Ed; via 3 Quarks Daily)
Or perhaps the Pledge is just the incidental propaganda of a party seeking its way back into power—and in the legislature, no less, which is ultimately not responsible for the conduct of foreign policy. But even when Republicans are responsible for fighting an actual war, as the Bush administration was in Iraq, they tend not to pay attention to the details. They like the words—”We will never apologize for advancing the cause of freedom and democracy around the world,” says the Pledge—and the gestures of war, as Bush showed when he piloted his way onto the USS Abraham Lincoln. But its specifics are of little interest. And peace? That’s just how folks in the biz say, “Show’s over.”
Far from challenging the conservative tradition’s infatuation with violence, however, this indifference to the realities of war is merely the flip side of the Burkean coin. Even as he wrote of the sublime effects of pain and danger, Burke was careful to insist that should those pains and dangers “press too nearly” or “too close”—should they become real threats, “conversant about the present destruction of the person”—their sublimity would disappear. Burke’s point was not that nobody, in the end, really wants to die, or that nobody enjoys excruciating pain. It was that sublimity depends upon obscurity: Get too close to anything, see and feel its full extent, and it loses its mystery and aura. A “great clearness” of the sort that comes from direct experience is “an enemy to all enthusiasms whatsoever.” Get to know anything, including violence, too well, and it loses the thrill you got when it was just an idea.
Since 9/11, many have complained, and rightly so, about the failure of conservatives—or their sons and daughters—to fight the war on terror themselves. For many, that failure is symptomatic of the inequality of contemporary America, and it is. But there is an additional element to the story. So long as the war on terror remains an idea—a hot topic on the blogs, a provocative op-ed, an episode of 24—it is sublime. As soon as it becomes a reality, it can be as tedious as a discussion of the tax code or as cheerless as a trip to the DMV.
¶ From a Rumpus Poetry Club discussion of Timothy Donnelly’s acclaimed collection, The Cloud Corporation. We applaud the bit about re-reading, and are faintly surprised by the notion that a poet would not have memorized his own verse.
Brian Miles: I think that is one thing that struck me, Timothy, is how much I related to so many of these poems based on feelings I have had when I am in my darker moods.
Timothy Donnelly: That means a lot to me. Because you know, when you look down at what you’ve done and it seems so grim, you sometimes feel—I have felt—like you must be toxic, or a jerk of some kind. Ungrateful, or just messed up. Anyway, one day up on campus, after my thinking all this terrible subway stuff, late March early April, it started snowing. And I saw the back of the cast of Rodin’s “The Thinker†on campus covered in snow and it had a peaceful sorrow to it. And I wished I could write poems that were peaceful and lovely. I started thinking that the snow that never makes it to the ground is somehow sadder snow, for never reaching what must be its destination, and somehow the ides of snow falling on a public statue insisted on precipitating the poem from my mental solution. Once I got the first 3.5 lines down, I knew the length of the line for the poem, I knew the rhythm of it, etc. Once I get about an inch into a poem, it gets easier, I have a little piece of its DNA and I can build from that. I wanted the food court and the mall in the poem. At one point I referenced cinnamon buns specifically, but that turned out to be too tacky.
Stephen Elliott: Your poems are so lyrical and intuitive but also crafted and careful. It’s such a balance.
Timothy Donnelly: Thank you for saying that. It is definitely a pas de deux of intuition and calculation.
Stephen Elliott: Do you reread endlessly?
Timothy Donnelly: I sure do. I probably have the entire book memorized. Honestly. It’s compulsive.
¶ James Somers muses on the contrast between now and then — now a confident and capable alumnus of the University of Michigan who is nonetheless too settled to indulge the impulse to chat up everyone he encountered at a recent football game on campus; then, a freshman during the first two weeks of college, who like all of his classmates did exactly that. The image of annealing is particularly just. (jsomers.net)
Which is to say that nothing you can find elsewhere in the workaday world even resembles the two-week college free-for-all, the strange fever in which everyone is basically pleased as hell to meet everyone else.
It almost sounds like a fantasy. But I assure you it happened. I’m not a spectacularly outgoing guy, but for the first two weeks of my freshman year at the University of Michigan, I introduced myself to just about everyone I saw. When I’d go down to the cafeteria, I could sit anywhere. At parties, on the way to class, in the dorms, etc., I—like everyone else—would flit from group to group in a crazy kind of convivial Brownian motion. Our social graph was effectively amorphous—fully connected. We were open to each other in a way that I imagine swingers must be open to sex, or hippies to psychedelics.
¶ Leah Fusco’s Owling. (The Best Part)
¶ Fuck Yeah Meanswear. (via Ivy Style)