Wednesday, December 31, 2008

December 31, 2008--Ringing Out the Old

It's nearly time to get this year behind us. With the exception of our election--which is quite an exception--it hasn't been much of a year, and it is time for it to go.

Let's all work hard to help make 2009 a much, much better one.

Happiness too would be good.

Tuesday, December 30, 2008

December 30, 2008--What Passes For Logic

When a situation appears to defy normal forms of logic, closer examination usually suggests that in fact it has it’s own inner logic.

Such is the situation, such continues to be the situation in Israel-Palestine where yet another war has broken out.

Ordinary logic suggests that both sides have nothing much to win but a great deal to lose—lives, infrastructure, world standing, economic benefit. Yet violence originating from both sides rages on.

This is the way most moderate observers who come at things from divergent perspectives, understand things. It makes no sense to them. But on the ground in Gaza and Israel things look quite different and make perfect sense.

Israel, still smarting from its defeat by Hezbollah in Lebanon in 2006, and defeat it surely was, has been looking for a way to reestablish its image as the preeminent military force in the region. Waiting for the right time to flex muscle, including, perhaps especially, during the current interregnum between American administrations—for fear that Obama will not so automatically as Bush unilaterally support whatever Israel opts to do—Israel chose “all out war” (in the words of Defense Minister Ehud Barak) against Hamas on the claim that Hamas radicals have increased their rocket attacks.

They assert that 10,048 rockets and mortar shells have landed in Israel from Gaza since 2001. Even if true, objective reports indicate that there has not been an appreciable increase in recent months. In fact, during the past half year Hamas has pretty much maintained a negotiated ceasefire, and no Israelis have been killed for quite some time.

So what’s the logic behind the current war against Hamas if not that Israel, in the midst of their own changes in political leadership, is looking for a pretext to throw its weight around?

And what about Hamas? They too have things to prove. In fact, as reported in the New York Times, that 10,048 number is as much a sign to them of their potency as it shames Israel. (Article linked below.)

Hamas has another war going—a second one against Fatah, which had ruled Gaza for decades until being tossed out of office by Hamas supporters in an election in December 2004, ironically an election passionately endorsed by the Bush administration which was eager to see various forms of democracy sprout up all over the Middle East. So much for democracy.

Rejected by Gazan voters, Fatah then retreated to the West Bank, where it set up its own version of a Palestinian government. A weak and accomodationist government in the eyes of the so-called Arab Street because of its principal political underwriters—Israel and the United States.

Thus, the logic behind Hamas breaking the six-month-old ceasefire with Israel was as much a political move directed toward the Arab and Palestinian masses, a move designed to show their pluck and militancy, as it was an attempt to defeat Israel on the battlefield. It was to show these constituencies that Fatah’s way, negotiation with Israel, was a sign of weakness and doomed to defeat; and that the Hamas’ way, armed aggression and terrorism against Israel, was the only course to victory.

I’m betting that they’re all wrong and that we are on the brink of chaos, which only a Barack Obama can solve--assuming he is more a Solomon than a Chicago pol.

Monday, December 29, 2008

December 29, 2008--Snowbirding: Troy's BarBQ

Along US 1, Federal Highway, up near Boynton Beach, hidden behind an overgrown hedge and housed in what had likely been the office of an abandoned gas station, for decades, Troy Davis has been operating his weekend BBQ.

As the painted sign says—“Open Thursday-Saturday” while the hand-lettered one taped to the window where you place your orders adds, “And Sometimes On Sundays.”

It was Sunday so we called in advance and were very happy to learn that this Sunday fit into the “sometimes” category.

Down here the Dolphins-Jets game was a very big deal: if the Fish could win it would represent the greatest turnaround in pro football history—they won only one game all of last year and if they could beat the Jets in New York they would move on to the playoffs.

So to be able to participate in the conversation Monday morning over breakfast at the Green Owl we needed to watch the game. Gobbling down ribs and collards and beans during halftime would mitigate the ordeal of watching the Jets most certainly collapse again—we are from New York and feel some residual loyalty to them.

As usual a bunch of men were hanging out in front of the place, stretched out on the eight or ten battered lounge and folding chairs Troy had lined up on both sides of the window. Some waiting for orders; others just hanging and talking to each other and Troy. Usually all are black since Troy’s is anchored in the center of the local African-American community; but today there were a couple of white guys, like us willing to drive a ways to get their hands on some of the best ribs for many miles and in the know about this hidden-away road-food treasure.

Remembering Rona from last year, Troy nodded at her as she placed the order—a full slab of ribs, sauce on the side, and a pint each of baked beans and collards. We settled into the two remaining chairs and quickly got absorbed into the rambling conversation. No surprise, it was about the game.

Yes the Jets were favored but the Dolphins had been playing well the past few weeks while the Jets had slipped into their annual end-of-season fold. One of the guys claimed that Brett Farve, the Jets quarterback, was due for a “break-out game”; but was quickly shot down by all the others who contended that he is an old man who should have stayed retired.

“But still with him you can’t be sure. It’s likely to be his last game ever if they don’t win. And you can never count that sucker out. But what do you New Yorkers think about our Pennington?” One of the older guys had turned to us—he had heard Rona mention to Troy that we were happy to be down here and away from the cold northern weather. “For sure you remember Chad?” He winked and smiled at Rona. Chad Pennington had been with the Jets for years and then let go at the end of last season only to be picked up by the Dolphins where he promptly led their remarkable comeback .

“He still looks cute,” Rona said. At that all the guys laughed.

“That’s all well and good, but I’m talkin’ about how he’s been leadin’ the team.”

“That too,” she smiled back.

Troy called out to the white guys to let them know their order was ready—two combo-dinners: ribs and chicken. “That’ll be $26. And like you asked, extra sauce on the ribs.”

They pulled handfuls of crumpled dollars from their camouflage pants. “How late you guys open tonight?”

“Til ‘bout six.”

“Maybe we’ll come back then for some bones and stuff like that. You know, for our dogs.”

“Well, I don’t know . . .”

“Scraps like you plan to put in the trash since like the sign says you ain’t open ‘gain ‘til next Thursday. Am I readin’ that correct?”

“You are but we don’t give that away for no dogs.” I wasn’t sure if this was about to get tense.

“I was aimin’ to pay you for them if that’s what you’re thinkin’. I got the money right here.” With that he raised his hand which was still clutching his remaining bills.

“I wasn’t sayin’ otherwise,” Troy said back to them without any attitude. “I know you boys are good for it. It’s just that you see,” he gestured toward the small houses that surrounded his place, “you see times are bad right here. Real bad. Many of the folks ‘round here who last year would come by on a Saturday for some Q can’t do that now. Most work as domestics or gardeners but lots of that work just dried up. Disappeared. The first thing other folks cut back on.” He snapped his fingers to underline how fast these jobs had been wiped out. “I’m still doin’ OK, thanks to God, but most of them are hurtin’. So come later today, with what I got left over, I just leave it out there,” he pointed to a table the other side of the small parking lot, “and they come by to take what they want.”

“Now I understand brother. I wasn’t wantin’ to be insensitive or nothin’. Many of my people are hurtin’ too. It’s just that I was thinkin’ . . . that is before I didn’t understand. You know what I’m tryin’ to say?”

“I do, man, I sure do. But we’ll get through it. ‘Round here folks have seen worse. We have to remember that. But better times are coming. Know what I mean? That I know for sure. That I know.”

They exchanged waves and with that the two white guys got into their pickup and drove of. I could see the one in the passenger seat straining to look back down the street that Troy had pointed out.

“Well, well,” he said to Rona, “Them boys are OK far as I’m concerned. They can come back here any time they want. Don’t be fooled by how they look. We’re all in this together. Be sure they know that too.”

* * *

Later, the Dolphins played well enough to win and the Jets of course found ways to lose.

I’m still licking the sauce off my fingers and can’t wait to get back to Troy’s next weekend. This time maybe for some of his chicken and for more talk. As he said, We’re all in this together.

Friday, December 26, 2008

December 26, 2008--All Ponzi All the Time

While we continue to be absorbed in trying to understand and unpack the truth behind the ponzi scheme perpetrated by Bernard Madoff, there has been a much larger, more ruinous ponzi scheme that continues to victimize the American public.

Madoff’s involved “only” a relatively few wealthy individuals and institutions and cost them “only” $50 billion. The one still plaguing the larger public is the adjustable rate mortgage scam--the basic way of securing home mortgages for at least a decade and more responsible for the worldwide recession than any other financial instrument.

ARMs too are a ponzi scheme.

Let me explain.

You buy a house that costs $200,000 and take out a no-down -payment mortgage for the full purchase price. To help you pay the monthlies, rather than paying the actual prevailing mortgage interest rate, you pay less. Of course this means that the “unpaid” interest accrues and you do not at all reduce the principal—you pay just the interest and, at that, less than it should be.

This of course sounds fiscally crazy—by opting for an ARM each month you go deeper and deeper into debt. So why would anyone want to do this?

Because you, with the bank’s encouragement, assume that real estate values will increase at a rate faster than the mounting interest debt. When your $200,000 house is worth $250,000 or $300,000, from that growth in value, you have a paper asset of $50,000 or $100,000. More than enough, if you refinance, to pay off the interest that accumulated while the value of the house was rising.

Sounds good.

And it was good so long as real estate values seemingly and inexorably kept rising. But when they began to decline, everything, as in a ponzi scheme, began to implode.

Like the classic Madoff-style ponzi scheme (which should now probably be renamed the Madoff Scheme), the ARM scheme required an endless infusion of new capital.

In Madoff’s case this meant he needed to keep signing up new suckers in order to pay off the ones who got in early. When he could no longer do so his fraudulent pyramid collapsed on itself and the people who had been taken in.

In regard to ARMs, when housing values went south the new money needed, in this case from the previously rising values of the homes, there was no money to keep it propped up.

All of this, we now are sadly learning, occurred with the blessing of the Bush administration, the asleep-at-the-switch regulators, and of course the lenders.

If you want a vivid case-in-point, look at yesterday’s New York Times article linked below that recounts the rise of Marion and Herbert Sandler of the former World Savings Bank, who made their billions by coming up with a scam of their own—the “Pick-A-Pay” adjustable rate mortgage.

Of course they deny doing anything wrong. In fact, they claim, as philanthropists in the non-banking part of their lives, what they did allowed low-income folks to buy houses.

What they don’t say is that many who bought homes this way are now losing them by the millions—especially the lower-income people to whom they have allegedly been so caring.

Well, I can tell you about some of their philanthropic work in education—there is a less there than meets the eye. I know them both quite well, and one day at a meeting at the Ford Foundation Herb told me that they intended to give to charity all of their vast wealth. Those of us in the education field are still waiting.

Thursday, December 25, 2008

December 25, 2008--Day for Peace

To all peace and joy. Both in short supply; both very much needed.

Wednesday, December 24, 2008

December 24, 2008--Hot Stove League

As the days shorten and snow and cold seize the country, for more than a century people have been gathering in general stores to sit by the glowing pot-bellied stove and talk about baseball.

Someone will note that it’s still seven weeks to pitchers and catchers. The day they are required to show up for spring training in Florida and Arizona. Another will say it’s only seven weeks and won’t it be good to begin to hear about the players stretching the kinks out of their bodies in the southern sun.

Inevitably, in recent years hot-stove league talk turned to off-season trades such as the one that brought the great closer K-Rod, Francisco (K for Strikeout) Rodriquez, to the Mets and how much the Yankees are paying to sign free agents. In these recessionary times, a fortune--$160 million for seven years for the big right hander C. C. Sabathia and $180 million for eight years for all-star first baseman Mark Teixeira.

Indecent someone is sure to claim. Not like in the old days when a Mickey Mantle played for just $100,000 per season. While another, up on the details of the Yankee budget, will add that they have to sign these kinds of players if they want to get back to post-season play and fill seats in their new stadium where the best seats will go for between $500 and $2,500. That’s per game!

The talk around the stove will go on and on, helping everyone survive the winter until boys in old men’s bodies will emerge into the sunlight once again, as from out of hibernation, and stretch their weary arms and legs, and gather in small town and big city ballparks to listen for that familiar crack of the bat and shouts of “Kill the umpire!”

Likely lost in this talk about spoiled players and greedy owners will be the kind of more finessed conversation common in the past about the inner aspects of baseball, including why, in spite of these obscene salaries, it remains America’s Pastime because it continues to serve as a series of metaphors about life in America. Including current ones fit for our Gilded Age.

Are any folks wondering about the relationship between the Brooklyn Dodgers signing Jackie Robinson back in 1947 and the election of Barack Obama? They should because there is an intimate connection between these two historic events.

And did anyone notice that William S. Smith died recently? The guy who, while a law student at the University of Pennsylvania, wrote of the analogy between one of baseball’s most intriguing rules and the development of common law--“The Common Law Origins of the Infield Fly Rule”? (See linked New York Times obituary.)

The infield fly rule, adopted in the 1890s, was instituted so players could not take advantage of a force-out situation at third base. It states that when there are fewer than two outs, and there are men on first and second base, or if that the bases are loaded, any fly ball that in the judgment of the umpires can be caught by an infielder “with ordinary effort” is automatically deemed an out. Otherwise, for example, the shortstop could intentionally let the ball drop, pick it up, whip it around the bases to his fellow infielders, and thereby turn it into a double play.

In effect, the infield fly rule was a remedy for sneaky behavior that would not have occurred in earlier years when baseball was a gentlemen’s sport. In other words, to preserve the gentlemanly aspect of the game, which was turning into a professional sport, the rules of the game, as in common law, needed to evolve.

Steven’s law review piece was so widely read and regarded that it gave birth to the law and baseball movement! See what I mean—baseball is not just a game but about life itself.

And as with life, it adapts to the times. Yes, there are its pastoral origins. Yet, in spite of the fact that it was originally played in a genteel way appropriate for its times, and the infield fly rule as one example attempted to keep it that way, the are other rules that allow for various forms of less-than-gentlemanly behavior.

After all what are stealing bases about if not a recognition that there is this troubling thing about human nature—how we are simultaneously capable of committing the noblest and basest acts.

Thus, taking this into consideration, the rules of how one is allowed to steal a base put limits on what is permissible. And as so many cultural traditions have unraveled, baseball reminds us still that we must continue to struggle to strike the right balance between these contradictory sides of our imperfect nature.

Tuesday, December 23, 2008

December 23, 2008--The Ladies of Forest Trace: Bertha and Governing From the Left

This time I initiated the call.

“I’m really upset.”

“With what darling?”

“About Barack Obama’s choice of who to deliver the invocation at his inauguration.”

“You mean that minister who doesn’t believe in gay marriage?”

“Not that. Obama himself doesn’t believe gays should be allowed to marry. I disagree with him but I can at least understand his position.”

“So what’s the problem?” I knew my mother had been distracted by medical problems and hadn’t been following the news as closely as usual.

“It’s the rest of his views about homosexuality.”

“Like what sweetie?”

“I heard him call it equivalent to pedophilia. That goes beyond marriage, which I can force myself to understand is supposed to be about procreating. Though God knows many of us who are married have chosen not to have children. So what is so different about gays being married and Rona and me?”

“The girls here have been talking about this too. You know for those of us who are very old,” my mother is about the be 100 and six months, “this is not a comfortable subject. We never talked about these matters the way you and your generation do.” I chose not to remind her how old I actually am. I liked the fact that she still thought of me as one of her two young children.

“Bertha hasn’t stopped talking about it since Obama made the announcement. She had a brother who never married. What they used to call a ‘confirmed bachelor.’ But everyone knew or at the very least suspected that he might have been that way. Though she loved him more than life itself. When their mother was sick with stomach cancer,” when speaking with my mother it never took more than five minutes for us to be talking about medical things, “when she couldn’t take care of herself anymore and they didn’t want to put her in a nursing home, Stanley, that was his name, poor dear, he moved into her bedroom (he was still living at home) and nursed her day and night. For six months until she died. I can’t tell you the things he did for her. I know you don’t like these kinds of details, but he was the most loving of sons.

“Bertha told us many times about the things he had to put up with because of the way he was. He taught English to 7th graders and they tormented him. The names they called him. Even to his face. He was very, how do you put it, effeminate. A gentle soul. They were very cruel. I met him a few times before he died. He came here twice a year and stayed with Bertha. And stayed with her to take care of her, like he did their mother, when she had her own cancer. I told you about that, didn’t I?” Indeed she had—every hospitalization and every chemo treatment.

“I know you’re not feeling well mom, you’re having a shaky morning, so I won’t keep you. I don’t want to hold you on the phone. I just wanted to tell you what I’ve been feeling about Rick Warren, the evangelical minister from that California megachurch.”

“As I told you I haven’t been watching too much TV lately. I haven’t been myself. And I understand Wolf is on vacation.” CNN’s Wolf Blitzer she meant. Her favorite. “So let me tell you what Bertha has been saying. You know what a tender subject this is for her.”

I could only imagine. Also, I knew that Bertha was the most liberal, the most progressive of the ladies of Forest Trace. She had been a suffragette, had helped organize chapters of the garment workers union in New York City—she herself had sown shirtwaists, and probably had been a communist or at least a fellow traveler back in the 30s. So if any of the ladies would be upset with Obama it would be Bertha. I had been hearing that she had been quite upset by some of his cabinet choices. Especially about his economic team—“too many Wall Street retreads” my mother said she snorted when they were announced. Considering her life history and her politics she was the most likely to be feeling that Obama had been moving to far to the political center.

“So what’s Bertha’s take on this?” I suspected she would have feelings similar to mine.

“I think you will be surprised.”

“And?”

“She thinks having him speak at the inauguration is a good idea.”

“Really?” I was amazed by this.

“Bad politics. That she says. How, how do they call it, how his base is very upset and that’s maybe not good politics—you want to hold onto to your base Bertha says. But she also says that Obama has two bases. Maybe more. The progressives are a big part of it for certain. They gave him all that money didn’t they, but then she reminded the girls last night at dinner, didn’t he also win most of the suburban votes. So they are his base too. And Bertha went on to say that if he is going to be able to get Congress to go along with his big plans he will need some Republican support, particularly in the Senate. Isn’t that true? You too have been saying this. That he will need 60 votes there. So he has to add to this base.”

“I’m not following this mom. I thought you said that Bertha thought choosing Warren was bad politics. It’s sounding as if she feels Obama by picking him is being politically smart—that Warren will help build Obama’s political base. The gays and those on the left who are upset about his selection will not abandon Obama—where are they going to go?”

“She thinks, and Bertha is very smart about these things, that though they are not going to become Republicans, that’s silly to even think about, that they will lose some of their enthusiasm for Obama and won’t be as active in supporting his policies and what he needs Congress to do. That enthusiasm is very important because the Republicans, she says, are feeling very pessimistic about themselves and will want to flex their muscles when Congress comes back after the new year. So he is taking a big political risk—she says maybe an unnecessary one, a self-created one—by doing this. So that’s the bad politics.”

“That’s my point too. I agree with Bertha. Why does Obama need to cause so much upset and give the media this to talk about—on top of the Blagojevich business—at a time when he should stick to his appointments and develop his programs? No drama Obama.”

“I’ve heard that but let me tell you the rest of what Bertha is thinking.”

“I’m eager to hear.”

“Again, you need to remember what I have told you about her life—in Poland before they came here, the way they lived on the Lower East Side, how none of the girls went to school beyond the 5th grade, how her father worked 12 hours a day like a slave in a bakery, how she and all her sisters had to work when they were 16 in the sweatshops, and then the war and how many of her people who had stayed behind—all of them—wound up in Auschwitz. Then there was McCarthy right here in America and how her husband, who was a history teacher in Newark, lost his job because of the investigations. And of course her brother Stanley. I already told you about him.”

“Yes you did. Today again but also previously. It’s a sad story.”

“From all of this Bertha feels that most of our problems, most of the world’s problems are caused by intolerance which turns quickly into bigotry and hatred. Especially when times are hard. Like during the Depression, which was worldwide and helped launch Hitler in Germany and the KKK in America, and maybe like today with so many people losing their jobs and their savings and their homes. And the rest of us worried that we may be next to have to move out of Forest Trace and move in to live with our children.”

“Are you saying . . .?”

“No, not to worry darling, I’m fine, I have my money and will not be having to move in with you or your brother, though I know both of you would be happy to have me.”

“It’s not that . . .”

She chuckeld at that. The first time in a few days I had heard her familiar laugh. “Look, I have to take my morning medication in a minute so let me tell you what Bertha said.”

“Please.”

“She feels strongly that everything life has taught her during her own nearly 100 years is that unless we come up with ways to overcome these violent feelings we have toward each other, with the means we now have to do harm to each other, we will continue to torment and destroy each other. In a small though hurtful way the way Stanley was tormented. And so back to that minister with his big following. Bertha reminded us that Obama said that he was going to try to be president of all Americans, especially, she quoted him as saying, those who did not vote for him. That would include people like what’s-his-name.”

“Warren, Rick Warren.”

“Yes him. This medication is causing me to lose my short-term memory. Or maybe I have Alzheimer’s.”

“No you don’t mom. For someone your age you’re doing very, very well.”

“We can talk about that another time. Who better than me knows how I’m feeling?”

“You have me there.”

“Again, according to Bertha it’s worth the immediate political consequences of having him—again I forget his name—speak at the inauguration because maybe in reality and symbolically this will begin to narrow some important differences that divide Americans. She feels that if Obama had invited him to, say, an interfaith meeting about these kinds of issues it would hardly get noticed. Maybe Obama is seeing this, she feels, as the beginning of a much longer, more public dialogue about . . .”

She couldn’t say the word so I did, “Sexuality.”

“Yes that and other things too. That if after January 20th Obama spends more time with him and other ministers like him—what’s the word?”

“Evangelicals.”

“That’s it.” She stumbled when trying to pronounce it. I could hear her again becoming exasperated with herself—her own decline. “Maybe he and others would come to narrow some of their differences with Obama and the rest of us. Maybe this minister, given such a prominent role, will feel a responsibility to rethink some of his more extreme views.”

“If that were to happen it would be wonderful.”

“And this could maybe set an example of how we have to negotiate with those we disagree with—and often by disagreeing turn into enemies. Rather than turn violent toward those who hold different views we might be able to find ways to live with rather than kill each other. We need to do this here and all around the world.”

“Perhaps that’s the hope Obama offers.”

“And which we desperately need. I don’t know about you, but I’m inclined to trust Bertha about this.”

“I’ll try. But as you always have said to me when you feel I’m being a little overoptimistic, ‘We’ll see.’”

“Yes, we will. We’ll see. I have to go now. I’ll talk with you later. I have to take my Xanax.

“And remember. It’s very cold out so be sure to wear a hat.”

Monday, December 22, 2008

December 22, 2008--Self-Hating Jew

The public has been mesmerized by the unfolding news about Bernard Madoff and his collapsing $50 billion Ponzi scheme. Case in point--the attached story from today’s New York Times.

Thus far we have learned about how he structured it, who got duped, and how Federal regulators failed for decades to adequately follow through when questions were raised about his business practices.

And it is serving as the perfect metaphor for our greedy, gilded times.

Though much is still unknown, there is at least one clear theme—most of what transpired took place within what the New York Post called “the Jewish circuit.”

Since this is a delicate subject not much more than this has been said about the Jewishness of his life and fraudulent schemes. But he and his eager victims and how he operated are all too familiar to those of us who are Jewish and suffer from similar impulses derived from millennia of being marginalized and persecuted and worse.

Relatively little is known about Madoff except that he is of Russian descent, was born and raised in New York City’s outer boroughs, went to a downscale as opposed to and Ivy League college and law school (which he never completed), and made his first move in the world of Wall Street with $5,000 which he allegedly earned as a lifeguard on Long Island.

Nothing about him suggests that he was on a fast or inevitable track to success or that his people were in any way associated with anything resembling the Our Crowd of the City and thus had neither networks nor connections to lubricate his rise. Quite the opposite.

He was born in 1938 just as the Nazis were taking control of Poland and about to swing west and overrun France. His parents must have not too long before that escaped the pogroms of Russia and been all too familiar with the growing and virulent anti-Semitism that would soon find hideous expression in the Holocaust.

I assume that in their sons Bernard and Peter they saw the promise of a more secure and hopeful future and did all they could to protect them from the threats they must have seen looming all around them. I would not be surprised if the young Bernie’s mother hovered over him, making sure he was well fed and that he took his vitamins and for his digestion his daily tablespoon of castor oil and that she warned him not become involved with the bad boys who also grew up in their lower middle-class neighborhood. Not to get into fights, not to learn bad habits and bad language from them. To keep a low profile, go to school, and focus on making a future for himself that also involved developing a concern for those less fortunate than he, which included them as they aged and their health inevitably declined. As a good son he would be expected to provide for them in their old age.

In other words, it is easy to assume that Peter and Bernie were raised by a quintessential Jewish Mother.

There is though for many another side to this kind of childhood so well recounted by authors such as Philip Roth—the impulse to shrug off the constraints of this kind of nurturing, which to them feels smothering, and in compensation seek ways to transgress. This at times was overt and best exemplified by the cult of perverse admiration surrounding Jewish gangsters and at other times more hidden as young Jewish boys dreamed their lusty dreams of forbidden sex and plunder. And in some cases, I suspect as with Madoff, this eventually played out during the course of their lives.

In Madoff’s case, as best I understand it, his first moves were respectable. With his $5,000 of lifeguard money he launched Bernard Madoff Investment Securities, which quickly became successful. But soon thereafter, secretly, on another floor and office in the same building, he set in motion his ponzi scheme.

To it he initially attracted some of the Jewish elite from New York City, Long Island, and Palm Beach who knew him from his membership in exclusive country clubs, which ironically were founded by other Jews since most clubs at the time did not allow Jewish members, and from Jewish philanthropic functions.

He worked the Jewish Circuit and most of his “clients,” marks to use a term from the Confidence Game, were wealthy and prominent Jews and Jewish institutions and organizations: Steven Spielberg, Jeffrey Katzenberg, Mort Zuckerman, Fred Wilpon, Elie Wiezel, Eliot Spitzer (yes, him, Client Number Seven), the Ramaz School, and Yeshiva University among hundreds of others.

It is not clear if Bernie, in his transgressive persona, meant to defraud his “friends,” which would fit one side of the Roth alter ego Portnoy-Zuckerman paradigm, or wanted to include them in a good and benevolent thing, which would fit the mama’s-boy side of his being. After all, some of his largest clients were a wide range of Jewish philanthropies, including some of his own—the UJA, the Lower East Side Tenement Museum (no irony intended), various Israel charities, and lymphoma research.

The good Madoff included many members of his family seemingly in the legitimate side of his business—his brother, his two sons, a niece, and a nephew. But Old Testamentally, after confessing to his boys that he had been perpetrating a fraud, they were the ones who turned him in to the authorities.

Yet other aspects of Madoff’s life hint at the depth of his darker, self-hating self.

Start with the pronunciation of his name—Made-off rather than its more ethnic Mad-off. Not unlike the current generation of Lefraks who insist on being called the pseudo-French Le-Frak so as to distance themselves from any vestige of the fact that the family fortune was derived from the decidedly unglitzy Lefrak City apartment complex in Corona Queens.

And the fact that after calling his first firm Bernard Madoff Investment Securities most of the other companies he dealt with, in effect front organizations for his schemes, had decidedly goisher names that included Greenwich, Fairfield, Ascot, and the like.

Classic posturing, classic self-denial, classic responses to the embrace of the worst of one’s own ethnic stereotype.

Let’s hope that little Bernie’s mama is not longer around.

Friday, December 19, 2008

December 19, 2008--Snowbirding: Living With Your 201(k)

We've been very fortunate. Still are in spite of the downturn in the economy. But we too have been hit by declining equities values. Enough to wonder where’s the equity in equities and to do a lot more cutting back than we’re used to. Some of this is because we want to be prudent, but we also do not feel good about overspending when so many are hurting much worse than we.

This brings me to the epicenter of the current depression—the southeast coast of Florida. About 20 miles from where Bernie Madeoff perpetrated his $50 billion Ponzi scheme.

The debris from that and the inexorable rippling of the plummeting real estate market are all around us. We encounter more people here than up north who need to sell their homes now for fear of losing them to the banks; others who have already seen their property taken from them by the banks; friends who after 25 years of loyalty to their companies tossed out of work and despairing that they are too old to ever again find a job; others packing up to move to they-do-not-know-where; auto dealers surrounded by lots filled with cars and not a single customer in sight; and sprinkled in every downtown and mall are vacant or boarded-up stores.

Yet in spite of this pervasive despair most folks are struggling on, enjoying the day, and making the best of things though not knowing what next will come crashing down.

Thus it is a little difficult to be back here living well among so many who are worried about tomorrow. In past years those most anxious about tomorrow have been the older residents whose every ache and flutter reminds them that the end, the End, is near. Now they have their money to add to their list of worries.

We’ve been to see my 100 year-old mother; and though she too is fortunately financially secure, she watches CNBC more than is good for her. And most of the ladies where she lives are thinking more about their unfixed incomes than their blood pressure numbers. Though God knows, with all that’s going on, they must be sky high.

One nonagenarian said to me, “I’ve lost so much money in the market that my 401(k) is looking more like a 201(k).” It was good to see that for some at least the sense of humor is the last thing to go.

Here in residence for just a few days we have already have what might be called contact financial-anxiety. I’m not sure if this syndrome appears as yet in any medical or psychiatric texts but we are two proto, living case studies.

Take last night as an example of the symptomology. After seeing the dreadful Synecdoche (unendurably long and intellectually pretentious in spite of a tour de force performance by Seymour Philip Hoffman), needing a guilty-pleasure treat, we snuck into Anthony’s for a charred coal-fired pizza topped with tiny meatballs. Delicious!

We made the mistake of ordering the large pie and when even after stuffing ourselves so that I still have heartburn, three slices remained. This is Florida and since the first Anglo settlers arrived residents have been taking home half eaten rolls, portions of uneaten mashed potatoes, and the two remaining barbequed spare ribs, our waiter asked if he should pack the slices up for us.

In the past, knowing our wasteful habits we would have smiled back at him and said, “No thank you.” With the smile meaning we’re from New York City, downtown New York City, and we don’t do doggie bags; we don’t eat leftovers. Can you imagine how we would be regarded, our look we hoped communicated, if we ever asked the waitress at Balthazar in Soho to pack up the bread left over from our panier order? Next time we showed up they would seat us with the bridge-and-tunnel crowd.

But last night as I was into my being-cool mode, Rona said, “Sure, why not? Who knows, maybe we’ll have them for lunch tomorrow.”

Back in the car, with the pizza box on the back seat, I said, “Pizza tonight and again tomorrow for lunch? That doesn’t make sense to me. Too much pizza.”

Rona, as usually, was way ahead of me, “We can wrap the slices in aluminum foil and freeze them. We have a real oven here—not like in the City where we only have a microwave—and I’m sure they’ll reheat wonderfully. We can have them for lunch one day next week.”

“But I thought,” I sputtered back, “we never . . .”

In the dim light from the dashboard I could see Rona smiling at me, and her smile reminded me where we were and how the times have changed.

I could see that she was already thinking, Maybe we’ll get some salad greens at the farmers market on Saturday. Mesclun should be in season and it should be perfect with the leftover pizza.

Thursday, December 18, 2008

December 18, 2008--Spooning

We’ve been spooning again. This has become a tradition down here in Florida. Our first night we find ourselves curled up in bed, both lying on our left sides, nestled together like two spoons in the silverware drawer.

A simple physical metaphor, spooning, until I wondered if the verb used in many love songs, to spoon, derives from the same innocent bedtime fetal position. The clichéd June-moon-spoon rhyme scheme.

A few clicks on the computer takes me to Google and this then opens a world of interesting factoids. Yes, spooning appears as expected to describe what we have been up to after midnight; but to spoon is totally unrelated, though it too is clearly uncoitally amatory.

There is no certainty, but it may be of Welsh origin and even come from the custom of presenting one’s fiancée with and elaborately carved wooden spoon. Though it’s hard to think how songs might be inspired by this.

Then again there’s a lot more at work than this.

It appears that scientists have been studying spooning. For example:

“There are biological and psychological benefits to this kind of physical contact,” explains Dr. Guy Grenier, a clinical psychologist and professor of human sexuality.
He says there are certain chemicals released into the system when we have physical contact, and they are stimulated by spooning. “We can’t do much better than the spooning position,” Grenier adds.
And of course New Agers have their view which may be closer to the truth:
According to Jonathan Robinson’s “Communication Miracles for Couples,” spooning is believed to create a harmonious energy flow in the Chinese system of medicine. When a couple feels stressed or argumentative, spooning helps decrease the agitated state.

This sounds like us when we get to Florida, that is until the ocean and the sun and the breezes take us over.

Wednesday, December 17, 2008

December 17, 2008--Sorry

I just blew this day away. Though the time spent with my 100 and a half year-old mother was wonderful.

Back to blogging on Thursday.

Tuesday, December 16, 2008

December 16, 2008--Coming Attractions

We have an early flight south so here's what will be coming during the next couple of weeks:

* More from the Ladies of Forest Trace in which they ask about Barack Obama and "governing from the left."

* A piece about the wonders of Googling.

* Something called 201(k) about living with less.

* Ruminations about the fate (not good) of fireflies.

* Since winter is around the corner, a piece from the Hot Stove League about one of baseball's most curious rules--the infield fly rule.

* And in the Snowbirding series reports from a gun shop, Boca Raton's glitziest cemetery, and my first visit to a Sam's Club.

* And who knows what else.

Monday, December 15, 2008

December 15, 2008--How They're Spending It

I have a friend who writes a column for the Financial Times’ monthly supplement “How to Spend It.”

The glossy magazine highlights the latest in the glitz and glamour of the lux-life. Its articles and ads (its true raison d’être) are devoted to high-priced products (yachts, mansions, interior design, jewelry, watches, haute couture, and fancy cars) as well as fashion advice and columns about what’s happening and especially selling in the arts, gardening, food, and the hotel and travel business.

But, I hear, the FT is scaling it back. It seems that not only do the mega-rich have less to spend but those who are spending at the level “How to Spent It” promotes are doing so more and more surreptitiously.

In fact, as the New York Times reported recently, some of the most indulgent shopping is going on out of view. As an editor of Allure magazine puts it, “Shopping is a little vulgar right now.” It might have been more honest to say that shopping for $1,200 Marc Jacobs handbags in public is vulgar right now but buying them in private at showings in hotel suites is socially acceptable. (See article linked below.)

Robert Burke, a luxury retail consultant (whatever that is) said, “People don’t want to be as public about shopping for luxury goods as they were in the past. It feels good to buy and this is a time for feel-good things.”

Eve Goldberg, a Manhattan diamond dealer, is sensing the same trend: “People are saying, ‘It’s that time of year; I want to buy something, but I feel a little weird.’ Often they will tell me, ‘I don’t want to be out there making an announcement with a big bag that says Harry Winston.’”

I do understand the shopping bag thing. During an earlier, more prosperous time when many wanted to been seen walking around with Saks and Bendels bags, an aunt of mine who couldn’t afford to shop in such places had a collection of bags from high-end shops that she used to carry around her extra sweater or her purchases from Macy’s or Klein’s On the Square.

And I do see evidence of the new covert shopping right here in the apartment building where I live. Every day at about this time the lobby fills up with an increasing number of packages for residents who are more an more doing their shopping via the Internet. The doormen tell me that this is not just because everyone is busier than in the past and that this is a convenient way to shop. In fact, and this suggest what is really going on for many, quite a few of the residents are asking the staff not to mark the apartment numbers on the boxes since they do not want their neighbors to know how much they are buying.

An acquaintance who owns a company that serves as a direct mail middleman for luxury goods sellers—where if you want to purchase designer product for yourself or send one as a gift, his firm has access to these products and will, for a fee, arrange this for you. Countercyclically his business is booming. Much of the increase in volume, he feels, is of this surreptitious sort.

And, he adds, at least 25 percent of his non-gift sales are actually in effect gifts—ones that his customers ask be sent to themselves. Gift-wrapped and with cards that are frequently saying—“This is for you. You’re special. You deserve it.”

Friday, December 12, 2008

December 12, 2008--Back Monday

Long weekending. Blogging resumes next week.

Thursday, December 11, 2008

December 11, 2008--The 0.00% Solution

Here I thought I was feeling desperate.

With the current economic crisis cutting into the value of my 401(k)s, government bonds, and other investments, I have been busy running around to various banks looking for safe places to stash cash. FDIC-insured CDs primarily, that I didn’t think all that well of when I discovered that they were paying only 3-4% interest. But I did want to move to the sidelines, as they say on Wall Street, while the economy straightened itself out.

I transferred quite a bit of money into these government-protected instruments after making that decision. Happily, actually luckily, I did this some months ago, before the markets plummeted, and I’m feeling pretty secure even while earning relatively little. It is some consolation now to be getting so much interest, that’s how I’ve come to look at it, while watching the daily Dow gyrations.

Better 4% on the upside, I’m now thinking, than 30% on the downside. How quickly the “investor” in me became a coupon clipper.

Still, in my new, more conservative mode I was stunned to learn that others, who have been looking for even safer economic havens, have been scooping up the latest T Bills that are paying no interest at all—literally 0.00%. (See linked New York Times story if you must have the sad details.)

$30 billion worth of them went on sale earlier this week and they disappeared so quickly that Treasure officials said that they could have sole four times as many.

This is undoubtedly a good thing for our debt-drowned government, which can borrow billions this way and then pay them back months later at no cost whatsoever.

Who in their right mind would be interested in an “investment” that they know in advance will pay nothing? In fact, there is talk about issuing T Bills that will pay less than nothing. In other words, negative interest.

In this deal you give the Treasury, say, a million dollars and then when it’s time to get your money back they give you a million less a half to one percent. To many traumatized by the plunge in world markets and thinking that things could go from bad to worse to full-scale collapse, this feels like a good deal.

And for those with a really lot of money, who would quickly run out of banks where they can buy FDIC-insured CDs at “only” $250,000 a pop (the FDIC limit), it’s either the new 0.00% T Bill or the world’s largest mattress.

Thinking about those legendary mattresses under which nervous folks hide heir cash (and more actually do this than you might imagine—they have all their savings in literal cash), with little to do, I have been attempting to calculate what size mattress one would need to stash 10,000 one-hundred dollar bills—a cool $1.0 million.

I tried to get staff in my new CD banks to enter into this conversation with me. Since I had recently parked quite a bit of money with one them I had become a Premium Banking customer. Though at this level of status they did not give me a Mr. Coffee machine for opening my account, they did assign to me a “personal banker.”

So I popped in to see him the other day since I was getting nowhere simulating how large a volume such a stack of cash would generate and what size mattress I would need if I wanted to hide a million under it.

I did have some experience with large sums of paper money: when we bought our place in Spain seven or eight years ago, in the pre-Euro universe, we needed to come up with millions and millions of pesetas.

On the day of the closing the bank manger showed up with a medium-sized suitcase in which he had the currency we needed. Of course we wanted to count it. This took quite some time since it had to be done by hand; and then after we had done so twice, it was difficult to restack the bills and they thus no longer fit neatly back into the suitcase. We stuffed those that didn’t fit in a couple of plastic supermarket bags. Not an elegant way to show up at the notary’s for the closing, but we were able to buy the place. (In truth he was quite familiar with all-cash deals where the cash arrived in equally messy wads.)

No one could help with my curiosity about how many cubic feet 10,000 one-dollar bills add up to. So I will have to figure this out on my own.

But someone at the HSBC bank who had also seen the article in the Times about the zero-interest T Bills read to me what independent financial analyst Edward Yardeni was quoted as saying:

“The last time this happened was the Great Depression, when people were willing to accept no return on their money. If people are so busy during the day just protecting the cash they have, it’s not a good sign.”

Now I fully realize why sitting on the sideline doesn’t feel all that comfortable.

Wednesday, December 10, 2008

December 10, 2008--Highway Bulgari

Walking in Soho the other day, on Greene Street, it wasn’t necessary to read anything in the Wall Street Journal or New York Times to see directly the effects of the recession on high-end stores.

It was about 11:00 AM and there was literally not one customer in any of the shops between Spring and Houston Streets. Admittedly it was a little early for that neighborhood but this was still a sad state of affairs. Not a sole in La Perla; no one at Moss; even the line at the post office was half what it usually is this time of year. The Apple Store, on the other hand, was as usual hopping.

Not only are Wall Street and Main Street hurting, but obviously also the Fifth and Madison Avenues of New York and most of the rest of the world.

So it was not surprising to read that the exclusive jewelers Bulgari’s sales are way off. (See NY Times article linked below.)

Most concern, especially in this season of giving, should flow to those who are most affected—those who have lost jobs and their life savings, those who have or are about to lose their homes, those struggling to keep their kids in college. But again in the spirit of this time of year, it wouldn’t hurt us to think at least a little about those who had formerly been wealthy but are now just rich.

I’ll try, but it doesn’t make it easy to do so when I read that at Bulgari cutting back means not, as in the past, polishing the underside of the white-gold band of one of their signature $10,000 watches.

Though to some this might sound like the Grinch has been hyperactive, to me it feels like social justice.

I’m not intending to incite class warfare or be insensitive, but what’s this business with a $10,000 watch in the first place? And if you’re going to try to sell one, what’s the big deal about polishing both sides of the watchband? To me it sounds like 15 minutes of extra work. How fair or smart is it to expect newly cost-conscious customers to put up with such a thing?

But then again, maybe Bulgari has figured out its own version of the zeitgeist. At their 259 stores worldwide (sidebar--how exclusive is it to have so many shops, until a few years ago there were only 5) they are apparently picking up a new sense of political correctness: a partner, Claudia D’Arpizio, says of many of their customers, “Even if they’re not affected in terms of purchasing power, customers feel it’s ethical to spend less. They don’t want the additional piece of jewelry.”

On the other hand, maybe if that watch I can’t live without has a band that’s not fully polished . . .

Tuesday, December 09, 2008

December 9, 2008--Greening the White House

Barack Obama is meeting today with Al Gore. Undoubtedly to talk about who he is thinking about appointing to the Green Team for his administration—the head of the Environmental Protection Agency (who I suspect Obama will elevate to cabinet rank), his Energy Secretary, and his Transportation Secretary. This is a very big deal for a president who sees tackling environmental issues to not only be essential to a cleaner, cooler environment but also as an engine, a non-polluting one to be sure, to drive the new economy and along the way create millions of jobs.

There is speculation that Obama may ask Gore to serve somehow in his administration. Perhaps as some sort of Energy Czar. But with an Auto Czar looming to ride herd on the car industry after it receives its bailout, there may be one too many czars already to make someone who believes in democracy comfortable. (We all know what happened to the big Czars in Russia.)

While contemplating just what the Obama administration might do to change our energy and environmental behavior there is one thing he can do beginning January 20th—green the White House.

I wonder if the WH has energy-efficient windows. Are there any drafts that could be eliminated with better insulation? What kinds of light bulbs are in use? Can he order up a hybrid presidential car? Does everyone in his administration have to fly around in government jets?

I suspect much could be done to reduce the White House carbon footprint. It’s one thing to legislate and spend taxpayer money to incubate new approaches and new industries—I’m for that if done wisely—it’s another thing to lead by example.

Analogically, when Betty Ford went public about having breast cancer hundreds of thousands of women who had never had mammograms asked their doctors to prescribe them and without doubt many lives were saved. When Katie Couric’s husband died of colon cancer the very fact that Kati had one live on the Today show I am sure motivated thousands to follow her example.

What would it mean if Barack Obama and his family themselves very actively sought ways to make the White House greener and invited the media to follow in their footsteps as they went about cutting down on drafts, seeing if there is the possibility of having solar panels installed on the roof, turning down the thermostat, changing light bulbs, replacing conventional light switches with motion-sensing ones, adding dimmer switches, using LED holiday lights, and adding hybrids to their fleet of vehicles?

As a way of quantifying the effects of the changes at the White House, Obama could compare and share the electric bills for each month after he takes office with those for 2008, the last year of the Bush administration. This would serve as a sort of scorecard for how well he and Michelle and the girls are doing at reducing their energy use.

Obviously, none of these relatively small steps would in themselves get the larger job done, but the ripple effect could be enormous.

Monday, December 08, 2008

December 8, 2008--"Gas Is Up And So Am I"

Thus spoke Manny Ramirez, the Los Angeles Dodgers' free-agent who is looking for at least $45 million in salary for the next two years.

Another baseball free-agent, pitcher C. C. Sabathia is sitting on an offer from the Yankees in which they are eager to pay him a total of at least $140 million for the next six years. That’s more than $23 million a year, guaranteed. (See linked NY Times story.)

The way I figure it, if he starts 35 games a year that amounts to about $400,000 every time he pitches. Last year he won only 17 games; if we assume that in 2009 he will win 20 games, that means the Yanks are willing to pay him $1.15 million per victory.

If we get further into the details, if on average he lasts until the seventh inning of every game he pitches (which actually inflates what he is likely to achieve) that means he will be on the mound for about a total of an hour each time he starts (he’ll be resting in the dugout for the rest of the time, and since the Yankees are in the American league he will not even be required to bat) and so if we calculate his hourly wage for what he is actually being paid to do—excluding exercising and participating in spring training where what he does doesn’t count—his wage would be $400,000 an hour.

Recession? What Recession?

This brings me again to the auto industry. As the Big Three wait to learn their fate, Congress and others are pointing fingers of blame at various parties to explain why these once proud American corporations are in such bad shape. Management became arrogant and continued to produce SUVs and other gas guzzlers while the price of gasoline soared and consumers turned to more fuel-efficient imports; members of Congress, many from auto producing states and on the payrolls of the automakers and the United Auto Workers Union, failed to require manufacturers to produce smaller, greener cars; the highway and oil and trucking industry lobbies effectively killed any hope that the country would have a world-class public transportation system; trade practices favored the importing of foreign cars to the detriment of American manufacturers selling their cars overseas; and of course, everyone’s favorite scapegoat, the UAW demanded and secured exorbitant salaries and lifetime benefits that made cars produced by union workers uncompetitive.

There is plenty of blame to share, but dumping so much of it on the autoworkers is disproportionate and unfair. Including the claim that they “make” $70 an hour. Not C. C. Sabathia or Manny Ramirez money but still, in comparison to what non-unionized autoworkers in the South earn, a fortune.

Actually, unionized autoworkers make $29.78 an hour for their labor on the line; and if you add their direct benefits it amounts to about $41 an hour in total compensation. The $70 number, assuming it’s fair to include it in their wages, is the result of GM and the others having to pay for lifetime health care benefits for all retired and disabled workers. There are at least 430,000 of them.

In all other countries where cars are manufactured—from England to Germany to Japan to Korea—all health benefits are borne by the government. Thus, in addition to most of them making better cars than we do, they also have that competitive advantage.

A final thought—why is it that when the U.S. government so relatively casually provided hundreds of billions to bail out AIG and Citibank, among others, their CEOs were not dragged before Congress and reprimanded for flying there in their private jets and, more interesting and revealing, why wasn’t what their workers earned—not the CEOs and other high flyers with their huge bonuses—why weren’t, say, their middle-level workers excoriated for what they’ve been taking home? I suspect a lot more than members of the UAW.

Friday, December 05, 2008

December 5, 2008--The Big Casino

Let me call him Gabriel. He is an investment banker of some stature and deservedly highly regard among colleagues and clients. Impeccable and unflappable in every way--in manner (elegant), in dress (bespoke), and especially in the soundness of his advice (widely sought) and reputation (none more esteemed). Thus, no one, even those close to him, would ever think of him much less call him “Gabe.”

But I found him decidedly different the other evening when he and I met for drinks and dinner. His tie was less than pulled firmly beneath his collar; and, since I had never seen that before, I knew something more than his haberdashery was awry.

“Is everything all right?” I finally found a way to ask, averting eye contact, after we had had two cocktails and exchanged chitchat. The nature of our relationship is such that neither of us would have ever thought to speak so personally, even if we had been inclined to do so.

He surprised me by the immediacy and intensity of his response. “In truth not.” He paused as if to test if he wanted to go further. “You know that I have been a banker for nearly forty years and that I have clients here and in Europe who have sought my council. I suspect that you also know that they and I have done very well. Yes, there have been setbacks. Times when markets have gyrated. But we, I should in full honesty also say I, expected that. There are normal, natural business cycles, some more predictable than others; some that take considerable thought to understand.”

I sensed of course where this was headed. I had been wondering how he had been faring during this current economic crisis. I also knew, without knowing any of the details, that no matter how hard he might personally have been hit, that he would be fine. In fact, very, very fine. But I also knew, or suspected . . .

He interrupted my thoughts, “I have been reading William Bernstein’s fascinating new book, A Splendid Exchange, a history of world trade from the Sumerian period through the current era of globalization. His point, of course, is that commerce of this kind is almost as old as civilization itself and that the world has been a version of flat long before it was perceived to be such by Tom Friedman.

“But that larger picture, though interesting and important to understand, is not what has affected my very recent thinking. Of course I know a great deal about the history and theory of money. From both an economic and anthropological perspective. And how without money, if tethered to the barter system, there could be no trade as we have come to know it. I have studied both fields carefully. So this we know very well.”

“So what is it, then, Gabriel? I don’t think I’m following you.”

“It’s something Bernstein wrote that has been troubling me, almost a throwaway, about the introduction of money as an exchange medium.”

“And what is that?” I ordered a third drink for the both of us.

“Until about 4,000 years ago, in the first commercial exchanges, to trade say cows for chickens, it would be necessary to calculate how many chickens were needed to be offered for one cow—would it be fifty or fifty-five. And if in a barter system where there are ten different items under consideration there are fully forty-five possible combinations of exchange pairs. Very cumbersome, very complicated, and almost impossible to quantify much less keep consistent when attempting to assign value to each of these pairs.

“Thus the revolution that money in the form of silver coins made available. With coinage, which quickly spread throughout the then-known world, for those ten items it was necessary to assign only ten values, rather than forty-five. This made possible large-scale transactions on a geographically broad scale.”

I was happy when the Scotches arrived. “I do know a bit about this,” I said. “But am not understanding why something this fundamental has so upset you.”

“It is because, in this current environment, I have been thinking again about why this trading system in fact works.”

“This I am eager to hear.”

“What, after all is so intrinsically valuable about silver? Or, for that matter, gold?”

“It’s rarity?”

“Well, yes, of course, things more widely available and perishable would not serve at all as exchange mediums. Grains for example, which would obviously deteriorate, or iron coins, which would oxidize. So silver and gold fit the bill quite well.”

“And? What’s the problem?”

“Some time later most of the world moved off the silver and gold standard as the way to back their currencies. Thinking, I suppose, that paper money, backed by the good will and faith in the viability of the economy of the county issuing it would provide sufficient security to those engaged in trade and other forms of commerce to use and trust it as a more portable vehicle for exchange. Now, we have even moved to the point where to participate in a transaction it is not longer necessary to transport the more transportable paper currency to complete the deal. An electronic blip via the Internet is all that is required to pay for the transaction. And then of course we invented credit to fully lubricate economic exchange.”

“To tell you the truth, Gabriel, this is nothing new to me and of course very old hat to you. So, again, I still do not . . .”

“Let me then get to the point.” I was pleased to hear that. It was getting later than when I was comfortable beginning dinner. “All of this, including when we either exchanged precious-metal coins or backed our currency with silver and gold, all of this is based on an agreed upon set of beliefs and fictions.

“There is nothing inherently valuable much less useful when it comes to silver and gold. For jewelry making of course, it is valuable, and also to some extent gold in dentistry. But why would having a basement full of gold ingots make anyone feel more secure than having a vault full of paper currency —and some of my clients are doing just this: buying literal gold ingots or stashing cash in a version of under their mattresses.

“The reason any of this works is because we agree to make it work. We believe in its value. We trust in its universal consistency. Not because, again, there is anything intrinsic or real about very much of this.”

“I can see why you must be having difficulty sleeping.” I was clinging to the last of my drink. “So, what do you think will happen? Perhaps more important, what should we be doing?”

“For forty years I have been making my way in the world, successfully, by knowing the answers to these kinds of questions. Now, I am not at all sure. I am taking this personally. Though thankfully, yes I have been affected, I am still very fortunate. I am very comfortable unless there is a full cataclysm, which I do not think will occur—there is too much that is sound about the major economies and we have in place mechanisms, imperfect ones to be sure, but mechanisms that are well-enough designed to prevent a full meltdown.”

“Why then personally?”

“Because my faith, and that’s what it has been—faith--has been shaken as to the rationality of markets. I do understand the role of emotion in economic behavior. Some are calling it now behavioral economics, where economists study and explain the role of individual and group psychology in making decisions about major purchases such as homes. There was a recent column in the New York Times about this. Not bad. I recommend it.

“And, further, there have been economic manias and panics through the centuries. I remember one time you asked me about the 17th century Dutch tulip mania. Where certain tulip bulbs became so expensive that they soared in value to the equivalent of twenty times what a skilled craftsman could earn in a year. And then how it all collapsed. So we know about economic bubbles. But here I had thought that we had learned from such things, including our own bubbles. Like the Dot-Com bubble, which burst just eight years ago.”

He drained his glass. “Yet here we are again. I think even more perilously perched. And I am, yes, shaken because I have all along thought more reason prevailed than appears to be the case even in markets where for millennia, including today, things such as belief and trust and even faith were and are critical and necessary components. But I am not at all comfortable when so much, such a disproportionate portion, is so emotionally driven.”

“Well I,” I stammered.

“But we will be fine.” He popped up off the bar stool and was his old self again. He slapped my on the back and even remembered to adjust his tie. “Time to eat,” he said with his familiar exuberance, “They tell me they have white truffles. We must have some of those.”

The New York Times article Gabriel referred to is linked below.

Thursday, December 04, 2008

December , 2008--Day Off

To get through a list of accumulated chores. Back tomorrow.

Wednesday, December 03, 2008

December 3, 2008--The Two Trees of Christmas

I’m confused. While switching around last night to find something diverting to watch on TV, I stumbled onto the Christmas tree lighting ceremony. But it was on CBS and in Bryant Park in New York City. Thus my confusion—I always thought the Christmas tree is in Rockefeller Center and that the lighting was going to be tonight, Wednesday, and on NBC.

When I finally figured things out I realized how naïve I can be.

There are these two trees which get lit on back-to-back nights. One is literally sponsored (i.e. paid for) by CBS and the other by NBC; and though they both occur in public, each of the networks gets exclusive proprietary rights to broadcast the lighting of their tree on their channel.

What’s next, a Fox News tree with Bill O’Reilly throwing the switch? That seems appropriate since he’s been railing forever for American merchants to stop calling this time of year the more-inclusive holiday season and not the Christmas season.

But curious as I am I took a closer look at the TV schedule to see what would be available to me if I tuned in for the lighting of all the Christmas trees or Chanukah menorahs or Kwanzaa candles or whatever.

I couldn’t find information about what the Lubovicher cable channel might be up to and BET doesn’t seem to do that much to celebrate Kwanzaa, and so the best that I can report is about the programming surrounding the two Christmas tree lightings.

Last night in Bryant Park you could have seen the Barenaked Ladies perform in front of the tree. I had never seen them before, and you can only imagine my disappointment that they showed up in full Christmas costume and not as their name implies.

But not to worry, tonight, after Tony Bennett and Beyonce sing and gyrate on the Rock Center skating rink (I assume Al Roker will turn on the juice), at 10:00 o’clock after the kiddies are asleep and visions of sugar plums are dancing in their heads, to keep the adults tuned in, a version of real naked ladies will show up on the Victoria’s Secret Holiday (not Christmas) Fashion Show.

At least I know what I’ll be doing later. And it won’t be watching Anderson Cooper 360 or reruns of Countdown With Keith Olbermann.

Tuesday, December 02, 2008

December 2, 2008--Obama's Head Fake

I’ve been fascinated by some of the reactions to Barack Obama’s appointments that I’ve been picking up while listening to right-wing talk radio.

In the middle of the night, when I’m restless, I listen to the radio as a way of boring myself to sleep. Basically there are four generic choices—music, which is too engaging for me; sports talk, which gets me aggravated; shows about flying saucers, which I find too stimulating; and programs that feature people like Laura Ingraham and Billy Cunningham who rant through the night about how Nancy Pelosi is a socialist.

Listening to Cunningham two nights ago, as Obama was about to announce his national security team, I was struck by how flummoxed Billy seemed. He had been expecting that Obama, “the most liberal member of the Senate,” would be appointing people like Ron Paul to be Secretary of State and Ralph Nader Treasury Secretary. But here he was about to ask George Bush’s Pentagon chief, Robert Gates, to remain in office and he had picked “the architect of Reganomics,” 82 year-old Paul Volker, to be one of his chief economic advisors.

Cunningham was all mixed up but was taking clear pleasure in the assumption that Obama’s supporters on the left would be even more shook up than he. “It’s bait and switch,” he kept shouting; but in spite of taking satisfaction in that he had his shorts all in a bunch because Obama was being so unpredictable. Who knows, he just about said, maybe Obama will be successful; and where would that leave us? Among other things, out of office for perhaps decades.

Still thinking about this as the sun rose, I wondered privately if maybe Cunningham was right—that Obama road into office by getting his liberal base to work hard for him and now that he has been elected he is planning to govern from the right. Even knowing that some of these left-right distinctions are obsolete, still I wondered if there had been some baiting-and-switching.

Later in the day, ruminating publicly about the same set of questions, Chris Matthews, on Hardball, posed an interesting proposition: Obama is if nothing political, which is a good if you want to get things done, and as such maybe he was appointing all these people who are the right of him to provide cover as he moves to govern from the left.

His guests disagreed, but I think Matthews was making a good point. Obama for the past two weeks when questioned about the nature of his key appointments, has repeatedly said—“I am responsible to assure that there will be change. I will supply the vision. That’s my job.” He still seems committed to making bold and progressive moves to stimulate the economy and to use diplomacy more than military force to guide his foreign policy. Perhaps then, he is nodding to the right to enlarge his base so as to be able to mobilize the kind of broad support required if he is to attempt to lead from the left.

Though confessing that sports talk makes me crazy, let me try a little here. Not about what happened to the Jets on Sunday, but rather what one might learn from a president’s sports interests.

Nixon, for example, was a pro football fan. He even went so far as to advise the coach of the Washington Redskins about what specific plays he might use to defeat his rivals. Nixon, I suspect, liked football because it metaphorically reminded him of the kinds of hierarchically structured organizations he most admired. Corporations, governments, the military. As the nation’s CEO he saw himself as our quarterback, calling out the plays for others in his control to carry out. (I also suspect that as an angry man he liked violence.)

Bill Clinton, as another example, was not attracted to team sports. Golf was his game. One of the few sporting activities that one plays on one’s own and doesn’t in truth even require an opponent to enjoy. A perfect pastime for a president who is a self-centered diva.

Then there is Barack Obama, our first basketball-obsessed president. I suspect he sees himself as the nation’s point guard—the player who puts the ball in play, brings it up court, and then gets as much satisfaction from making assists, helping others to score, as he does when scoring himself. Also, let’s hope, as with the best basketball players, his very presence and the kind of unselfish game he values, helps raise his teammates level of play. Fellow Chicagoan Michael Jordon became legendary for doing just this.

And then there is the power of trash talk and faking—both essential to a successful basketball player. The trash talk is not taken as a serious verbal assault on one’s opponent but rather as a way to gain a slight psychological edge—to distract the person playing against you just enough to give you that vital half-step advantage.

Faking also is an essential tool on the court. By leaning or juking one’s head to the right, thereby throwing the defender off balance, a player skilled at this can then cut to the left and thereby have a clear path to the basket.

Get it?

Monday, December 01, 2008

December 1, 2008--The Ladies of Forest Trace: This Time One-for-One

“So,” my mother asked, “what do you think about my Hillary?”

Your Hillary?” I couldn't restrain myself from responding. “I thought you had been an Obama supporter from the beginning even while the other ladies were for Hillary Clinton.”

“That was then but this is now.”

“And didn’t you get a lot of grief from them because you resisted voting for her? The first woman with a realistic chance of being nominated?”

“Also true, but that too is in the past. Now all the girls are happy. Obama is going to be a wonderful president and, in a few hours, he will be naming her to be his Secretary of State.”

My mother, who turned 100 last June, lives in Forest Trace, a retirement community in south Florida and worked hard, against the political tide there among the octogenarians and nonagenarians, to eventually convince most of “the girls” to come around and take a chance on Barack Obama.

During our daily calls last week she reported how pleased they all were to see their stocks rising after Obama named his economic team. “What’s wrong with a little gray hair,” she had said when I complained a bit about how a team that included Paul Volker could bring about the kind of change he had promised during the campaign. “You didn’t like what he did for the economy back in the 1980s and 90s? And did you hear what Barack said at the press conference when that reporter asked him the same question?” I had. “That he, Barack Obama, will be the one to be sure there is change. How did he put it? ‘That’s my job,’ I think he said. That’s what I like in a president. Someone who knows what his job is.”

“And you feel the same way now about Hillary?” I wondered out loud. “I’m not so sure I like this Team of Rivals business. Not when it comes her. And then there’s Bill. You think having the two of them running our foreign policy is such a good thing?”

“First of all you’re not listening to what I’m saying. Like last week he will make it very clear that he’s in charge. Barack of course I mean. Of foreign policy. That he will make the policy and she will take the lead in carrying it out. What’s so wrong with that? You don’t thinks he’s the most qualified to do that? Less so than that wimp John Kerry (who by the way has his own pretty big ego) or that nice but ineffective Richardson?”

“I agree she’d would probably make a good diplomat, but I’m concerned that she and Bill are still so ambitious that they will appoint all their own people to the top State Department jobs and run from there a version of their own government in exile.”

“This is not Charles de Gaulle during the Second World War; but in case Bill and Hillary had any inclination to do that, as soon as the people noticed that don’t you think that this would doom any thoughts they have about her ever again running for president? Americans hate disloyalty. We would see it for what it is—putting their interests ahead of the country’s. Some people are worried that Hillary is so powerful that if he wanted to Obama could never fire her; but if she and Bill acted to undermine him, the voters would clamor for him to get rid of them.

“Now he’s much more popular than either Bill or Hillary. So I don’t worry at all about any shenanigans. And you know what kind of worrier I am. Even about how cold it is now in New York and if when you go out you’re wearing a warm scarf.” She chuckled at that admission, which I knew was literally true.

“OK, you’ve got me half convinced not to worry about the Clintons running their own foreign policy. But what about Bill?”

“What’s to worry about?”

“You know, this two-for-one business. How if you appoint her he comes along in the deal. If you’re not concerned about her pursuing her own agenda what about him? Do you think he can be contained?”

“About this I know a great deal.”

“Just what is this ‘this’ you’re referring to? You’re losing me with that.”

“About husbands and wives. About that I’m an expert.”

“But they have never been your typical husband and wife. Look at what he did to her and what she had to . . .”

“I’ve seen that and worse. You don’t get to be 100 and not have seen everything.”

“But on such a large stage? And so much in public?”

“It doesn’t make that much difference where it happens. If it hurts it hurts. Though I will agree for what happened to Hillary to have been on TV day and night—including the jokes—made it worse. But still, what she went through is familiar to me. Not from personal experience of course I know you know. Though dad was at times difficult to live with he never strayed or did anything like that to me. But from the women I have know I could tell you stories.”

I must admit I hoped one day she would. But politics not gossip was on her mind. “So here’s how I think this will work. Obama will this morning appoint her, or nominate her or whatever. She will surprise you by how good a team player she will be. Let’s admit it, the Senate, especially being a junior senator, is too small a stage for her. And though there have been two other women before her who were Secretary of State, neither of them accomplished very much. Now, ironically with her rival as president, there is a chance that big things can be accomplished around the world. What would happen if she could take the lead in making a deal in the Middle East? I’ll bet she could even win a Nobel Prize. Like Al Gore’s.” Again I could hear my mother chuckling at that thought.

“And if Bill gets frisky, and I don’t mean like the way he did with that woman, Monica Lewinsky (I assume that after all his operations he’s by now a capon), if he tries to horn in on her job I feel certain she’ll send him right to the doghouse.”

“But won’t she inevitably ask his advice, especially about the Middle East where during his last months in office he almost brokered a deal?”

“Of course. Anyone would be stupid not to do that. Who knows more about Israel and Palestine than Bill Clinton? Of course she’ll get his suggestions. But if you are worried about a team of Clinton rivals trying to take over (and here I mean a Bill and Hillary team) you don’t understand the meaning of her life.”

“It’s true, Mom, I’m not really following your thinking.”

“Let’s go back to their days in Arkansas.”

“Mom, I have an appointment and don’t have time right now to talk about all of that.”

“It will only take a minute so hold your horses.” I sat down. “When she was first lady there, that’s what she was—first lady. She was the governor’s wife; and even the big job she had in that law firm, what was it called?”

“Rose,” I interjected.”

“Yes, thank you, Rose. My memory is beginning to fail. Don’t you think it helped for her to be married to the governor of the state? You don’t have to answer. I’m being rhetorical. Let’s put it this way--it didn’t hurt. And then of course she was first lady again when he became president, and everything she was able to do during those eight years was because she was his wife. And when they left Washington she got elected senator from New York. Do you think that as a carpetbagger she could have gotten elected if she wasn’t Mrs. Clinton? I’m not saying she wasn’t a strong candidate on her own, but money couldn’t buy the name recognition she had when she moved to New York.”

I couldn’t disagree with much of that. “And if she hadn’t become senator and been famous from all those years of being a Clinton—you do remember how at one point she went back to her maiden name, Rodham, but quickly gave that up because she didn’t want to lose the power of having Clinton as her last name. You do remember that? If she hadn’t been Senator Clinton, if she had, for instance, been Senator Dodd, do you think she would have almost won the nomination? It certainly helped her to raise money. She did of course turn out to be a very effective campaigner and almost won, but again it didn’t hurt to be associated with Bill.

“But now, now, for really the first time she is accomplishing something fully on her own. Obama is choosing her not because of her husband—in fact being married to him may have been the biggest impediment to her being selected—but because he feels she is the best person for the job.

“Don’t believe what you’ve been seeing in the papers about how she was reluctant to give up her senate seat. I can tell you, among other things as a woman coming from the kind of marriage she has had, as soon as she heard Obama was interested in her her heart started to beat fast because she wanted that job.

“And I predict she will be great at it. And will be loyal to the president. That’s the only way she can succeed; and more than anything else, she wants to accomplish something very big, very significant. Let’s remember, up until now she hasn’t really accomplished very much.”

That too I understood and agreed with.

“So this time there will be no two-for-one. Obama’s getting just Hillary.”

She paused for a moment to allow me to absorb all of this. “And one more thing,” she added, “if you want to be Machiavellian—and I’m capable of that—what better way for Obama to muzzle Bill Clinton than to have Hillary in his cabinet? With Hillary there if Bill decides to snipe at Obama from the sidelines, who better than Hillary, and don’t forget Chelsea, to get him to shut up?”

About that I also couldn’t disagree.

“Minimally,” I said, “it will be interesting.”

“That’s important to,” my mother said as she rang off to get back to CNN.