ES -- DX/CL -- isee -- cboe put/call -- specialist/public short ratio -- trinq -- trin -- aaii bull ratio -- abx -- cmbx -- cdx -- vxo p&f -- SPX volatility curve -- VIX:VXO skew -- commodity screen -- cot -- conference board

Tuesday, April 19, 2005


cta faces doomsday

all trainhuggers should tune in to what's going on in chicago. the L is losing so much money that cta is preparing to cut it back to holiday service levels in a mass transit disaster.

cta is in a deep load of trouble because it's saddled with the L, which loses $400mm a year. against a car, it's nice for downtown commuting -- but it isn't a time advantage. (i live pretty far north in the city -- takes me 45 minutes by L, 40-50 minutes by car.) it's all about parking, which goes for anywhere from $8 to $29 a day.

against a bus, for me, it's about a 10 minute time advantage. ten whole minutes. and my L stop isn't covered from the rain, of course.

if the L wasn't already there from the era before cars, it would never ever ever be built. the rail system requires massive capital funding for maintenance and upkeep of fixed infrastructure that the bus system simply doesn't need. (five-year costs: $211mm for bus, $2.0bn for rail -- ten times as much.) this despite bus ridership being significantly higher (298mm rides) than rail (153mm).

note too that rail doesn't save in fuel costs -- the busses log 68mm miles for $23mm in fuel, while the rail logs 66mm miles for $22mm in power.

it is true that the busses cost $417mm to operate, rail only $162mm (because rail is less labor intensive in operation, and 77% of cta's cost is labor) -- but this is more than offset by the fact that the bus produces twice the fare revenue at one-tenth the capital improvement cost.

so a quick analysis shows (in millions):

revenues: bus $244 rail $125
op expense: bus ($417) rail ($162)
cap expend: bus ($ 42) rail ($400)

net gain(loss): bus ($215) rail ($437)

loss per fare: bus ($0.72) rail($2.86)

four times the loss rate to save ten minutes?

and recall -- we've spoken nothing at all of the expense of construction. talk about the quite small circle line -- much of which would use existing but abandoned track -- is upwards of $1bn. bus routes can be modified to fit development and traffic patterns on a whim at virtually no cost.

the obvious solution, it seems to me, is to triple the fare for the L and drive commuters to the far-less-unprofitable busses. but that hasn't hit 'em yet over at cta.

anyway, the board decided to cut rush hour service severely in order to preserve late-night and off-hour service for the poor who work weird hours. that's very egalitarian and maybe even charitable, but its also a fiscal and planning suicide. the waits that this is going to create in mass transit will be staggering and throw tens of thousands into their cars for good, never again to consider the cta as anything but an enemy.

What would happen if a private company ran the CTA? Hmmmmm.

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after the fall

angry bear surveys what might come in the aftermath of a burst housing bubble.

Housing "bubbles" typically do not "pop”, rather prices tend to deflate slowly in real terms, over several years. Historically real estate prices display strong persistence and are sticky downward. Sellers want a price close to recent sales in their neighborhood, and buyers, sensing prices are declining, will wait for even lower prices. This means real estate markets do not clear immediately, and what we usually observe is a drop in transaction volumes.
for what it's worth, the number of real estate "for sale" signposts on my five-minute walk home from the L has jumped up to five.

Friday, April 15, 2005



claes ryn is hardly a household name, but he is one of the more insightful political and foreign policy observers in america. his incisive book, "america the virtuous: the crisis of democracy and the quest for empire", is a near-definitive examination of the rise and influences of a militant ideological party of freedom in the united states which ignores traditional political divisions. he traces neoconservatism to a recurrent wave in western political thought that saw its first manifestation in rousseau, the jacobin party and robespierre -- who went on to slaughter thousands in "defense" of the new republic (a historical episode known simply as 'the terror') and set french armies to work all about europe. after robespierre's death under the guillotine's blade, another jacobin set about perpetuating the principles of the revolution -- napoleon.

ryn's article in american conservative takes more recent evidence -- which, it is my conclusion, almost universally supports his interpretation of events -- as conclusive proof that president bush is a "jacobin nationalist":

“Freedom” and “democracy” can mean radically different things. The president, his secretary of state, and their neoconservative idea-men have connected them with the Jacobin faith. The French Jacobins were followers of Jean-Jacques Rousseau, who argued, “man was born free, but he is everywhere in chains.” For men to be liberated, inherited societies and beliefs had to be destroyed.

The French Revolution was an attempt to enact his ideas. The Jacobins dealt harshly with “evil,” guillotining conspicuous representatives of the old order and employing a general ruthlessness that culminated in the Terror. To France was assigned the mission of liberation. Europe and other parts of the world were thrust into protracted war.
ryn goes on to say much more, pointing out how jacobinism underpinned the communist revolution of 1917 and how easily the ideology has repeatedly justified mass murder and attempts at global conquest in the name of what is "virtuous". it is nietzschean heroism writ monstrous -- there is no suffering which cannot be justified by the pursuit of the holy goal.

After the implosion of the Soviet Union, the neo-Jacobin neoconservatives argued that America should use its status as the lone superpower to spread its principles. They demanded “moral clarity” in U.S. foreign policy. Good stood against evil. After 9/11, Bush became their chief spokesman. He committed the United States to what he calls “the global democratic revolution.” The war against Iraq, he said, was “the first step” in that revolution. There has been not even a hint in the president’s recent speeches that the Iraqi debacle and the tens of thousands of dead and maimed have made him question his own virtuous nationalism.
the ahistoricism of what has come to be known as neoconservatism in america is often obfuscated by trying to recharacterize popular perceptions of american history, writing out the honest intentions of earlier americans in search of peace and isolation to a fault and substituting a sort of cartoonish, steroidal america of moral invincibility, national exceptionalism and perpetual revolution -- a deception abetted by western civilization's postwar flight from history as we sink into decadence. but it does, as it is intended, represent a massive break with the english parliamentarianism of america's first century and a half.

as the united states grows increasingly bent on what i've come to see as a national suicide attempt similar to but of a dimension perhaps yet more awful than even those of the last century, i have come to deeply fear what lies ahead -- the gotterdammerung, the consumption. and i'm not at all sure that there's anything that anyone can do anymore to avert it.

i recently went to see a complete performance of wagner's masterpiece, certainly one of the great works of art in this or any civilization. its massive scope and intensity left me awed -- and troubled. wagner used the ring to deal substantially with the question of civilization and its inevitable destruction/redemption on the altar of heroic will. he first encountered schopenhauer when his libretto was already complete -- but instantaneously understood the deeper significance of what he himself had written when viewed from that new viewpoint of utter despondency. the entire cycle can be understood as a search for an end to civilization which imparts meaning to all of our efforts. wagner's wotan was ultimately unsuccessful in that search -- love and free will destroy the world and the gods, confirming the schopenhauerian view that history is meaningless, painful struggle and without direction.

it is this with which we are faced today, as the rule of law gives way to the virtuous heroism that jacobin nationalism deifies, laying the groundwork for tyranny.


baseball and civility

the text of a post i made at the cubs blog i contribute to, 1060west:

i've rambled here about the cubs' and cub fans' problems with self-control, which were so evident in zambrano's opening day ejection. but i think that i understate the nature of the problem severely if i limit it to wrigley field and the cub clubhouse.

in the aftermath of last night's near-brouhaha following a play on a ball rolling down past pesky's pole, in which a boston fan took a slap at gary sheffield, i think more can be said about the general deterioration of fan behavior at ballparks in america. (and i don't exclude myself.)

now, mobs have always been reckless. john mcgraw in 1894 famously sparked a brawl in an orioles-braves game, into which the crowd joined, that resulted in the destruction by fire of over 170 buildings in boston's south end.

but things changed quite a lot between 1894 and 1950. the america of 1894 was a rapidly-industrializing primitive backwater; while europe basked in the antonine light of la belle epoque, the united states resembled nothing so much as perhaps current-day india or indonesia. the masses were uneducated, destitute, discontent and easily riled to anarchy. law and order were frequently kept only by open suppression (as surrounded chicago's haymarket riot, for example) and even military intervention (as in the pullman strike, also of 1894). fort sheridan, after all, is located where it is to ensure the ease of calling the army into chicago to keep order.

by 1950, america had been more fully integrated into the mainstream of western civilization (or what remained of it). public schooling and the advent of socialism had done much to reinforce the rule of law, and war and depression had forged an national character which valued sacrifice and discipline. the idea of a riot in the stands at a ballgame -- or attacking a player -- became as inconceivable an affront to society to the average american as it had been to the average victorian gentleman of london.

now that has changed again, it would seem. prosperity and freedom have worked their epicurean spell as law and discipline has relaxed and sacrifice has become increasingly disdained for selfishness and arrogance -- and the effects of our self-centeredness are showing in the entropy of society, not least in baseball. fans taking a poke at a player or charging the field in a complete loss of self-control are reflective of a declining sense of order and increased confrontation on the field. for players, long gone are days when a knockdown pitch could be construed as a simple signal understood by both parties; now, it is an attack on manhood, an affront to inflated pride, and an excuse to act upon delusions of self-importance. for fans, acts of self-expression are no longer confined to cheers and jeers. short of charging onto the field, childish outbursts have become the norm at the old ballpark.

 Posted by Hello

while i'm sure no one wants to return to the barbarism of emerging-market america, i can't help but wonder at what sign or symptom these acts are manifest of.

it's too much to read into this single sheffield incident the decline of civility. but, insofar sport is a mirror of the society which produces it, there is reason to fear for all of us in the broader decay of sportsmanship and collegiality in baseball among both players and fans. as a lover not only of baseball but of the magical interplay of life and law that it so perfectly symbolizes, it saddens me deeply.

Thursday, April 14, 2005


rumsfeld in kyrgyzstan/balkanizing the world

a victory for empire! we keep our airbase!

what a laugh -- like there was ever a danger of losing it. we put the new men there. we hold the sword that slew akayev's government -- we know it and he knows it. does he think we'd hesitate to turn it on him if he stood in the way? even as order frays? as secession and war loom?

these last features -- populist disorder, territorial fractures, political violence -- are to be expected in what america is doing. it seems many still do not understand, despite what is going on in iraq, that these plebiscitarian movements for "freedom" are almost by definition antiauthoritarian and antinational. the promise of emancipation and self-government is conflated in the public imagination too often with destructive idealizations of autonomy and lawlessness and the death of political compromise. national fracturing along deeper ethnic or religious lines is a natural product of freedom. what we encourage with the osce (probably ignorantly) is the death of nation-states -- of the influence of modern civilization, really, particularly on lands that were tribal and nomadic well into the 20th c and could easily revert.

we are balkanizing these places. it will be viewed, if it proves a durable movement, in the hindsight of history as one of the catastrophic ideological errors of the declining west, i think -- effectively recreating a feudal, primitive world of hobbesian character and undoing the constructive global influence of high western civility. it is very early in this game, and already georgia talks of needing another revolution to undo the old one. the truth is that few who hoped for so much will or could be satisfied -- and once the door to change through protest, disorder and violence is opened, it is very hard to shut.

note: seems a good information clearinghouse for events in kyrgyzstan, even if a bit biased to interventionism.

Wednesday, April 13, 2005



via raimondo, knight-ridder reports that the northern iraqi city of kirkuk is a flashpoint of ethnic tension. powerful members of sistani's shia clan in baghdad are confronting kurdish intentions for the city as too much against national integrity and harmony, even as the kurds feel they're getting shafted by an arab central government (despite holding the iraqi presidency). the word "irreconcilable" seems to be used with fair frequency.

meanwhile, local government is breaking down into despotism and armed conflict, not only in kurdish regions but in najaf and elsewhere. these local councils were supposed to be the repository of power in a federal conception of government. now the open struggle for power is on, often characterized by a machiavellian lawlessness that almost had to prevail given the circumstances by which they were created.

civil war has been the spectre looming over this entire affair from the start. many lamented american action as a potential precursor to the destabilization of iraq and perhaps the region from the start, and were flogged for their pessimism -- or dismissed (by the more carefully informed neoconservatives) as simply restating the desired anarchic goal. news from kirkuk over coming weeks may say much about whether or not that horrible seed springs to fruition.


the decline of american health care

kash at angry bear and matt welch agree -- the american health care system is declining into a shambles.

kash had much interesting to say, but nothing so striking as his chart from the oecd:

 Posted by Hello

kash doesn't point fingers, welch engages in some minor class struggling, but i think that the difference lies in the structure of the system. welch starts but doesn't follow on:

What I still can't understand, is how anyone -- seriously, anyone -- can think a system where it is extremely difficult for a perfectly healthy young person untethered to an insurance-providing job to obtain health insurance without lying, or without giving up the possibility of having childbirth covered, is a good system. Sure, it can be one helluva system for the folks who can afford it, or who have jobs where these kinds of problems don't come up, or who think that lying is a normal part of everyday life ... but there are reasons other than laziness and lack of imagination that at any given time 10 percent or more of the U.S. population is uninsured.
this is a clear observation. the nations we are compared to in the oecd graphic, besides being more efficient in cost per capita, insure 100% of their populations. i'm sure welch would not say that all market incentivizing (or perhaps any) should be removed from the current american system. but one still has to look at the list to which we are compared and see what is obvious: those nations with remarkably better healthcare have effectively socialized their healthcare systems.

the problems associated with retaining a market-based health care system seem very clear to me, and are consistent with some of what we see in the united states.

paul krugman points out that more services are possible under medicine every day, accounting for the rise in cost. but when this occurs for, say, a VCR, the price ultimately goes down. why? because efficiencies of production increase supply, lowering cost.

is this not true of health care? in some ways, it is. devices (like pacemakers) and off-patent pharmaceuticals cost a fraction of what they once did.

however, the labor cost associated with surgery has increased as the supply of surgeons, et al, has not increased in proportion to demand. even as devices and procedures multiply, the number of surgeons cannot.

what is the solution to this shortfall? in a market system, the services are simply allocated to those who can pay for them -- which is what we see in america, with vastly higher salaries for doctors (and the foreign physicians they draw). this means, however, putting vast numbers on the outside, looking in. in socialized systems, services are allocated with regard not to price but need and potential benefit. everyone in need can be served, but may have to delay treatment awaiting availability or (in some cases) be denied treatment deemed unnecessary.

and beyond that, there is the truth that competition can be wasteful. real markets (if not theoretical ones) can encourage redundancy and complexity -- decidedly features of the american health care market -- and, in boom times, overinvestment and malinvestment. there's also the risk of legal action, which is far higher under the united states than any other nation on earth, and the cost of insuring against it.

which system is better? the proof seems to be in the oecd's numbers. as krugman notes:

In the long run, medical progress may force us to make a harsh choice: if we don't want to become a society in which the rich get life-saving medical treatment and the rest of us don't, we'll have to pay much higher taxes. The vast waste in our current system means, however, that effective reform could both improve quality and cut costs, postponing the day of reckoning.

To get effective reform, however, we'll need to shed some preconceptions - in particular, the ideologically driven belief that government is always the problem and market competition is always the solution.

The fact is that in health care, the private sector is often bloated and bureaucratic, while some government agencies - notably the Veterans Administration system - are lean and efficient. In health care, competition and personal choice can and do lead to higher costs and lower quality. The United States has the most privatized, competitive health system in the advanced world; it also has by far the highest costs, and close to the worst results.
this is not to say that problems cannot or would not arise under a socialized system of health care. they would. but one cannot ignore the data on the basis of ideology alone if one hopes to improve the system. the data show that there clearly is an advantage to a socialized plan; it's up to theory to explain why, not deny the data.

UPDATE: from crooked timber, a wonderfully illustrative graph depicting the problematic nature of markets and health care:

 Posted by Hello

Great blog and information on hte decline of american health care, I hope we can work to build a better health care system. Health insurance is a major aspect to many.

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Tuesday, April 12, 2005


liberal education

cathy young at reason prattles on about the evil (or some such notion) of a left-leaning intelligentsia.

Some conservatives want a political solution: legislation that would not only protect the rights of dissenting students but penalize professors who use the classroom to push a political agenda. Many professors are appalled, understandably, by the idea of legislative intervention in the classroom. The best way to avoid such intervention is for the academy to make a good-faith effort to recognize and correct its intellectual diversity problem.
only if one considers that a problem, i submit.

i would be the first to say that intelligence is not by pre-requisite politically leftist. the composition of academia now, as cited by ms young, should be evidence enough of that.

what i find appalling is that ms young seems to believe that the selection of academics by universities -- and thereby the political indoctrination of youth, presumably -- according to her conservative faith in proportion to the public at large should be the function of university faculty.

it's quite stupid enough to draw lines in the sand on which one categorizes the innate complexity of political views as "right" or "left". such bipolarity cannot begin to capture the detail of any person's political views. how one might start selecting candidates for teaching positions based on such arbitrary lines is, to say the least, problematic. ms young seems something of a naive ideologue for even suggesting it a possibility.

more than that, however, ms young also presumes that the political persuasion, however defined, of the intelligentsia should reflect that of the broader population. i must cite the wonderful wry irony of one aaron swartz:

I have found that only 1% of Stanford professors believe in telepathy (defined as "communication between minds without using the traditional five senses"), compared with 36% of the general population. And less than half a percent believe "people on this earth are sometimes possessed by the devil", compared with 49% of those outside the ivory tower. And while 25% of Americans believe in astrology ("the position of the stars and planets can affect people's lives"), I could only find one Stanford professor who would agree. (All numbers are from mainstream polls, as reported by Sokal.)

This dreadful lack of intellectual diversity is a serious threat to our nation's youth, who are quietly being propagandized by anti-astrology radicals instead of educated with different points of view. Were I to discover that there were no blacks on the Stanford faculty, the Politically Correct community would be all up in arms. But they have no problem squeezing out prospective faculty members whose views they disagree with.
this brilliantly highlights the fact that ms young is driven by the same disturbingly simpleminded ideological motives as leftists who tout enforced multicultural individualism as the solution to all social evils. selecting populations on criteria which are irrelevant to the job at hand -- research and education -- is completely counterproductive; worse still is selecting populations to reflect other irrelevantly (or perhaps negatively) correlated populations for specious reasons.

people, in the main, are stupid and mystical. selecting the population of the institutional intelligentsia to reflect them in some way if you want it to reflect enlightenment principles of discovery makes less than no sense. and i've yet to attack the idea that college students slavishly reflect or even know about the politics of their professors -- as opposed to, say, their parents, who bore, raised and cohabitated with them for their two most-impressionable decades.

ms young has a modicum of readership, and that's too bad -- but it's unsurprising. most people are, after all, stupid, and love to read stupidities which they agree with.


are there any american catholics?

i seriously am beginning to think that few if any could exist, given the background intensity of lawless selfishness and arrogance that pervades the united states. humility is shameful here -- and yet it is the central tenet of the ancient faith.

even people who suppose themselves to be good catholics are clearly not. this lot (with a brilliant acronym for a nation that is perpetually losing self-control) managed to organize a protest in saint peter's basilica in protest of cardinal bernard law, who was celebrating the mass there. cardinal law was the man fingered in popular perception as being the driving force behind the church's policy of reassigning priests following pedophilic incidents. let this photo demonstrate their humility before god and church.

The Bascilica was beautiful and breathtaking. But, it was absoulutely devastating. It was just so, so sad knowing that at a time when we as survivors were showing our respect for the passing of the Pope, Cardinal Law was the lead celebrant over mass.

Some of the foreign press were asking "Isn't it enough that Cardinal Law apologized and stepped down in Boston? Why won't you leave him alone, and move on?"

We tried to stress that it's not about forgiving Cardinal Law, or punishing Cardinal Law. It's about stopping the pain. Far too many victims, their families and other Catholics, are still suffering, largely because of Cardinal Law. His presence. is very still very, very painful to so many.
this is so self-centered an interpretation of events that i fail to see how anyone can call themselves catholic and believe this.

first, how does a faithful catholic find the personal moral authority to criticize the roman catholic church? through intellectual weakness alone, i have to think. these people clearly haven't even begun to understand catholicism and the philosophy and history upon which it rests, nor perhaps the kantian morality of the self to which they truly subscribe. to be catholic is neither to question the wisdom of the church nor to presume you -- in your blindness and sin -- know better than the two thousand year old institution. catholicism is fundamentally the opposite.

such personal arrogance is stock and trade in america, however.

second, how is it that these people come to believe that the church of their faith is incapable of dispensing justice simply because it doesn't resemble the justice of the american police state -- jailers and executioners? do they presume that the contrived musings of our dead republic represent a greater justice than the holy see can deliver? do they presume to know that cardinal law was not enacting that justice?

again, these people have not thought out their argument as catholics. they have submitted to a carnal monomania for empty and morally-bankrupt revenge, and are pursuing it in a manner that can only be called unchristian and uncatholic -- but which is wholly american, in my decades of experience.

more profoundly, in their myopic self-involvement, they have learned nothing from pope john paul ii in death.

It's about stopping the pain. Far too many victims, their families and other Catholics, are still suffering, largely because of Cardinal Law. His presence. is very still very, very painful to so many.
if you cannot take away from the desperate struggle for life that john paul represented in life and death the lesson that suffering in the catholic conception is not merely human but chastising in the archaic sense -- that it is not something to be escaped or defeated but embraced as part of the fullness of life as a path to reflection and redemption -- you have learned nothing from the man.

to fight injustice is good; but they do not fight injustice -- they fight the acknowledged instrument of earthly justice in the roman church. even if they do not understand the justice as it is meted out, it is the faith to understand that the church, as the instrument of god, is just. instead they fight for self-defined revenge to ameliorate suffering -- a path that is not simply ineffective but sinful in more than one respect.

these misguided souls, it seems to me, need the guidance of an philosopher of the church. they've clearly not retained any real sensibility of what it means to be catholic.


the womb of art

"it is from the womb of art that criticism was born," said baudelaire.

colombian artist fernando botero addresses the tortures of abu ghraib.

 Posted by Hello

"I, like everyone else, was shocked by the barbarity, especially because the United States is supposed to be this model of compassion," he said in an interview from his art studio in Paris.
the damage this presidency has done to america in its vulgar militarism is incalculable.

Monday, April 11, 2005


lies of convenience

the economist knows better. and so does europe.

The watershed in relations with Europe, but also with parts of the Arab world, came on January 30th, with the impressive turnout in Iraq's election. Since then, says one senior administration official, the questions from even the prickliest European governments are no longer about why America fought the war, but how Europe can help rebuild Iraq. America and the EU will jointly sponsor a donors' conference in May or June. Mr Bush and his team have been pleased too with the support from Poland and Germany for Ukraine's orange revolution, and with France's help in winkling Syrian troops out of Lebanon.

Administration officials are careful to take no credit for these outbreaks of people power: all were home-grown. But Iraq's election and the protests against Syria's armed presence in Lebanon were not unconnected, they feel: the Arab television channels that Americans love to hate broadcast both events, including chants of “Syria out!” from Lebanon, all over the Middle East.
what malarkey! representative ron paul is saying so on the floor of the house. and i've blogged about it endlessly. what's going on in these places is as homegrown as the nazi agitation in austria in 1938 -- and with only slightly better goals in mind.

if europe's capitals decide to ignore that fact now, they do so not out of an ignorance of a truth of which they could hardly be unaware -- they do so to facilitate a mending of fences that they know cannot stay broken to their benefit.


dick tracy or barney fife?

you'll forgive me, i hope, but this has all the makings of hilarious paranoid police hijinks. what are the chances that those suitcases contain bombs? not too good.


the assault of the judiciary

via reason, wapo and salon report on the conservative religious conference to destroy the judiciary, at which a speaker invoked stalin to make a thinly-veiled call for the murder of supreme court justice anthony kennedy.

i have no idea what kennedy might have done more than ruth bader-ginsburg to so outrage the militant-conservative wing of the american right. but it's hard to expect rationality from the lot -- the horror of an "activist judiciary" is largely a deception of the fearful, angry and gullible conservatives in our society, after all. placing blame on the judiciary for doing its job -- applying idealistic laws to pragmatic situations with intelligence and compassion, not to mention checking the wild majoritarianism of the congress and the administration -- isn't a completely rational exercize to start with. this is well articulated by g.a. cohen in his "rescuing justice from constructivism":

[W]hile justice... must of course influence the selection of regulating principles, factual contingencies that determine how justice is to be applied, or that make justice infeasible, and values and principles that call for a compromise with justice, also have a role to play in generating the principles that regulate social life, and legislators, whether flesh-and-blood or hypothetical, would be profoundly mistaken to ignore those further considerations.
and that is exactly what constitutional constructivism/originalism means: refusing to recognize or compromise idealistic legislation with real situations. at the core of constructivism is a need to remove any independent authority from the judiciary which might lead it to contravene moral principles -- which, ostensibly, are legislated by congress -- in applying justice. what constructivism calls for, then, is the fact-insensitive application of principle. (remind you of anything?) it is thereby a pathway to militancy, as are most kinds of fundamentalism.

the question to be posed to constructivism is here: can the denial of particularity yield virtuous justice in application? i think not.

but it would be wrong to think that the movement, however philosophically baseless, is powerless. indeed, the campaign to reduce the judiciary to ineffectiveness is highly placed within the judiciary itself. and the conference's list of speakers included house speaker tom delay, commentator phyllis schlafly, alabama state supreme court justice tom parker and more.

this mass would -- in the name of law, with high irony -- unwittingly destroy the rule of law in the united states by robbing the judiciary of its independence from the will of the people and forcing it to yield to majoritarian moral concerns, subjecting the bill of rights and the constitution itself to essentially democratic votes. this is not the rule of law.


undermining the eu

marshall auerback at prudent bear bemoans not the death of the stability and growth pact, but the refusal to replace it with any limitation at all.

However laudable the goal of fiscal flexibility may be, replacing it with the economic equivalent of pabulum is surely not a serious alternative. Given the existence of a single currency, it means that virtuous countries, which have hitherto run balanced budgets and kept their spending patterns in check, are inexorably lumped together with the profligates, so that any sanction imposed by the capital markets, (such as the demand for higher equilibrating rates to compensate for the deterioration in certain countries’ public finances), punishes all alike. In effect, no incentive exists to pursue responsible fiscal policy because saint and sinner both end up in the equivalent of economic purgatory. This is hardly likely to engender future confidence in the euro project.
auerback goes on to discuss also the liberalizing services directive which spurred the french people's and therefore chirac's ire and the constitution (with its increasingly likely refusal in the 29 may french referendum) as symptomatic of a larger european problem.

[All three are] ...symptomatic of the misconceived manner in which the whole European project has been carried out over the past decade. If the EU and, by extension, the euro, are to survive in anything like the current incarnation, the multi-speed, much-derided British vision of a “Europe a la carte” (a structure whose flexibility embodies the existing divergences within the union, both economically and culturally), must be embraced as the ultimate policy solution, not the “one size fits all” principle now underlying the Union as a whole.
auerback sees growing popular anti-eu sentiment, which has driven the growth of rightwing extremism across the continent, as consequent of this aggressive centralization to an universal and distant authority -- and, also, the deflationary effect in wealthy nations (like france and germany) of a european central bank as wages and monetary policy normalize across europe without a currency exchange-rate system as buffer.

Far from the EU being the project to ensure that fascist or communist dictatorships never occur again in Europe, structures such as an institutionally independent central bank not subject to the same kinds of public scrutiny as America’s Federal Reserve or the Bank of England, or the recently junked Stability and Growth Pact – which had hitherto effectively curbed all national fiscal independence by setting arbitrary limits on the power to borrow – have generally imparted a deflationary bias to EU economic policy, which in turn has fanned the flames of popular protest, now manifesting itself in the French constitutional referendum.
the result has been a shift for chirac and schroeder to sabotage the services pact and stability pact that they helped author in order to quell the masses and preserve high wages through labor inflexibility/immigration restriction (ie, the high-cost european social model) -- regardless of the potential losses in market share. the economist:

Yet something structural is going on as well: the rise of a new Euroscepticism. In France, a founder member of the European club, this sentiment has in the past belonged largely to the political fringes: the hard left, or Jean-Marie Le Pen's far-right National Front. From a tender age, French voters are taught the virtues of Europe. For political leaders, on left and right alike, Europe has been the means of preserving and projecting French power in a world that was otherwise eroding it. In short, Europe offered comfort: protection from decline; reaffirmation of their social model; the foundation of peace.

This sense of comfort is now falling away. In its place, Europe is increasingly seen as a menace: a destroyer of privileges and a source of new threats.
the weakness of plebiscitarian accountability in the postmodern west is taking its highest profile on this issue -- the wealthy european peoples want a return to comfort that is essentially unhealthy, if not impossible, in the aftermath of the fall of the russian empire. new europe (so-called) is a potentially massive engine of low-cost growth with significant infrastructure, educated citizenry, mobile labor and capital access if only it maintains political stability. germany and france cannot escape the effect of eastern europe's maturation; their leaders must know this, even as their peoples may not.

the entire concept, it seems to me, of a united europe was, from the west's perspective, to harness the power of a developing east and benefit from it. this cannot be accomplished painlessly; the question was whether the western europeans would endure the pains to manifest the goal. increasingly, the answer looks to be 'no'. and european leaders like chirac, their power dependent on the people, are responding by undermining the european union.

the importance of this political climate shift in western europe should not be ignored. decades of postwar leftism may be ending in response to the european political class overreaching its mandate for unification. it may ultimately mean the end of the euro and a united europe -- the historical dream of a reinvented pax romana foiled yet again.


more from eliot

no less a magnate of finanace than vaunted former fed chairman paul volcker opines over the thin ice upon which the world's economy now stands, echoing bill gross.

The difficulty is that this seemingly comfortable pattern can't go on indefinitely. I don't know of any country that has managed to consume and invest 6 percent more than it produces for long. The United States is absorbing about 80 percent of the net flow of international capital. (emphasis mine -- gm) And at some point, both central banks and private institutions will have their fill of dollars.

I don't know whether change will come with a bang or a whimper, whether sooner or later. But as things stand, it is more likely than not that it will be financial crises rather than policy foresight that will force the change.
no one will be able to say in the aftermath that there was no warning.

Friday, April 08, 2005


not with a bang but a whimper

when bill gross quotes t.s. eliot, things are bleak.

The fact is that this real interest rate journey to its current destination has pumped up all asset prices because they are all being discounted by an extremely low real interest rate. The current level has produced double-digit annual rates of appreciation for different asset classes at varying cycles—stocks and bonds first—commodities, collectibles and housing with a lag. The important point and critical element in a future forecast, however, is to recognize that real yields, whether they be short-term or further out the curve, bottomed in 2003 and have been moving higher ever since. Not only has the downward journey ended, but a mini up-cycle appears to be underway which ultimately reduces bond prices, stock P/Es and casts a negative pall on other asset classes.

Since the PIMCO forecast is for real yields to stay low, absent a policy mistake by the Fed, we may well whimper along rather slowly as all asset classes compress to provide 2-3 percent real and 5+ percent nominal returns over long periods of time. We remain mindful, however, of not only potential central bank errors of judgment, but of oil, currency and geopolitical sparks that could produce a calamitous Big Bang in a highly levered, finance-based economy. High quality bonds, and especially those with inflationary protection, remain the bond market’s best bet absent a wormhole to a warmer and more inviting universe.


unrealized losses

nouriel roubini warns of emerging data showing the immense size of forex losses as a result of the asian central bank currency interventions/treasury market reinvestments that have been making the american economy... well, possible for the last few years.

As it is clear from the World Bank report, the other points that we have been making for months now about - not just capital losses on forex reserve but also fiscal costs of carry cost of intervention sterilization, the loss of monetary control via partially sterilized intervention, and the risks of asset bubbles and inflation - have now finally been officially registered in the minds of public officials, at least at the World Bank.
if those officials are finally compelled by losses to act, i think most americans have little conception of the pain we are due to take the brunt of.

Tuesday, April 05, 2005


pnac requests conscription

the san francisco chronicle notes that political support is growing for conscription. it seems to finally be dawning on the dimmest that free people don't line up to be killed without quite a lot of coercion. even without expanding the armed forces, the armed forces are going to be faced with a manpower shortage due to attrition -- particularly in the national guard, which this warlike political crew has abused beyond endurance. our mercenary armies are proving horribly expensive and hard to control, as they had to be. consequently, the project for the new american century (pnac), a leading neocon thinkwartank, has asked congress for the radical growth of the armed forces -- expanding active forces by "at least 25,000 troops each year over the next several years," along with the massive fiscal commitment that implies.

adding more (potentially many more) than 100,000 active duty soldiers to a force that already cannot be replenished. does anyone seriously imagine that this can be done through volunteerism alone? certainly not, i think. this letter is de facto a request -- signed by several very influential neoconservative political figures -- to reinstitute the draft in order to better manifest their imperial delusions of global democratic revolution.

the chronicle quotes a few politicians who laugh off the idea as a political impossibility. i cannot be so sure. the public dialogue in this country is easily changed, vulnerable as all democracies are to the engines of propaganda, and has been deteriorating into round-the-clock interventionist militarism for years. the philosophy that explicitly endorses such manipulation of the masses has already found a home in the white house. i don't think one can count on massive popular opposition to halt the advance of militarism when it has already made such great strides in america with popular endorsement.


spear carrier for empire provides, along with a well-articulated overview of american militarism and its consequences by scott horton, a link to his interview with chalmers johnson.

Monday, April 04, 2005


des ring der nibelungen

tonight i begin a sort of pilgrimage -- my first experience with the awe-inspiring wagnerian cycle "des ring der nibelungen", staged by the lyric opera to wide acclaim.

i've become, since buying the tickets, engrossed in the immensity of wagner's titanic masterpiece, reading a few complete books on the greater meaning and interpretation of the ring. of course, what it means is an open discussion and has been since it was first staged in bayreuth in 1876. wagner does more than retell the epic poems of the teutons. his characters can be seen as elements of the human psyche -- indeed, perhaps wagner anticipated jung and freud in some respects. it has been seen as a revolutionary political agitation, driven by feuerbach's naturalism and secular humanism in a call for the rejection of civilization and its institutions in favor of a new, enlightened society. it is also a dissertation on the problem of the rule of law, its ethereal nature and inevitable end in free and heroic action. (as such, you might imagine, i find it as relevant now as it was in prussian germany.) it is also a wish for a newer, better, transcendent world to be created of free will and human love. and it is also possibly a statement of schopenhauer's pessimism -- that neither law nor heroic virtue nor love can redeem life and give it meaning, that all is futile and empty struggle in a stream of change.

as a post-romantic, wagner himself believed in the power of his music to communicate directly with the souls of the observers. it is infused, to a much higher degree than the libretto itself, with the story of the ring by means of leitmotifs -- recurring bars and variations that almost subliminally refer the listener to other characters and events. this manner of contextualizing the story with music is now taken for granted almost so that postmodern man cannot appreciate its ingenuity in wagner. his music was intended to speak directly to the listener, bypassing reason and analysis to evoke that which is beyond and outside reason. and it succeeds, wordlessly telling the story of the world from creation and ordering to freedom, destruction and redemption in the conflagration of valhalla by the flames of siegfried and brunnhilde's funeral pyre.

what can definitely be said, i think, is that wagner's saga utilizes teuton mythology in a way that feuerbach explained in his 1841 "essence of christianity" -- "God is the manifestation of man’s inner nature, his expressed self; religion is the solemn unveiling of man’s hidden treasures, the avowal of his innermost thoughts, the open confession of the secrets of his love." wagner explores and examines man and mankind through the ancient teuton myths, using them as a mirror held up to ourselves -- and in so doing creates a mythology of his own. this explains much of the ring's enduring power to attract intelligence and effort, and elevates it beyond all doubt to the highest level of art.

tonight is das rheingold, and what i saw when i saw it last is what i hope to see now -- "the streaming, brilliant, edifying light of western civilization".

Thought you might enjoy this clip from an old BBC documentary.

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anon, that was lovely -- i thought haitink's comment on the (post)modernism of the staging was brutally incisive, if i may paraphrase: "at what point do we quit playing wagner's music as well because it too has become anachronistic and uninteresting?"

that postmodernism is, in opera, stuck trying to refashion a form and its centuries-old works beyond recognition says much for its philosophical bankruptcy. in the end, this betrays it as mere dilettante revolutionism -- postmodernism could convey its ideas in new forms but wishes not to. why? because postmodernism needs something established and dear to corrupt to gain its intended effect, which is barbaric shock.

the intention of wagner's work -- to outline the outline hypocrisy and futility of law, to embrace a schopenhauerian pessimism, to find an ending to civilization -- was an unmistakable clarion call (soome 40 years in advance of the world wars) heralding the sickness of western civility. postmodernism, it seems to me, is merely comfirmation of our decline.

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john paul II

there's really nothing i can say about this great man which can add to what has been said about him around the world. a towering moral figure who saw peace as its own end, he died as one of the most important figures of the last century. john paul is a national hero for the ages in his native poland and the single most important world figure in bringing to a peaceful close the russian communist empire.

what can be said of the personal piety of a man who would console him who tried to kill him -- not because it served some purpose but because it was right? this single titanic act of selfless forgiveness is simply unbelievable to most in the age of the self; with it, john paul did more to advance human decency and civilization than a million others will in their lifetimes.

and he continued to be extremely relevant right through, most recently confronting the united states on its warlike, evil and ultimately self-destructive ways. this pope knew evil when he saw it -- and he saw it in global democratic revolution.

much of what is morally blackest about the ongoing neoconservative disaster can be seen in clearest relief in their criticisms of john paul's immovable moral catholic position for just war -- which clearly could not encompass our wanton crusading. hitchens and frontpage are among many who revealed their amorality in this way. the roman catholic institution must gall these people, who cannot comprehend anything as good that is not also populist and irresponsible -- not to mention militarist and hubristic. the illness that infects america was often put into stark relief in its conflicts with john paul's papacy.

this includes even the church's dealing with pedophilia in america. it is common among americans to believe that accused american priests belong in front of an american jury and television cameras -- being too myopic or arrogant to imagine that justice may take on forms other than our reckless plebiscitarianism. but the vatican, having millennia of experience from which to draw, pursued justice in its way -- bowing to no temporal authority, as they have not for ages, pursuing quiet and private justice for the sinner while protecting the sanctity of the institution.

the church knows well, i suspect, the vicissitude of democracy and the tenuous nature of law within it are cannibalistic and ultimately self-defeating. the church itself would be put on trial sensationally by its enemies and the ignorant multitudes for the crimes of some flawed priests, destroying its manifold contributions to social integrity, moral authority and charity both within and without the united states. what purpose would that serve, except to feed the antisocial paranoia and nearsighted individualism that already runs so rampant here?

even in this, then, the roman church contrasts its institutional strengths with our democratic weaknesses. of course, it isn't seen that way in unthinking america. but that's less a statement of the church's faults than our own, in my opinion.

in any case, it must be said that i have been deeply affected by john paul's decline and death; i'm sure i am not alone in wondering if another of his cut can be found to champion so effectively what is good in the world. among my early memories is the conclave which elected him in 1978 -- as a second-grader in catholic school, the importance of what was transpiring in rome was impressed deep in my young mind. i still feel that way -- that what is produced from this conclave can change the arc of history in the world, can make more of us than we might have been otherwise. and it isn't simply the words of my nuns and teachers that stand behind it, as it was then. john paul II proved it.

Friday, April 01, 2005


the star chamber

via reason, news that the pentagon realeased 38 of the over 500 detainees at guantanamo bay -- and declares themselves now to be in full compliances with the strictures of the supreme court rulings in hamdi and rasul.

The military said on Tuesday that the rest of the detainees had had their chance to make the case for their innocence and that it believed it had complied with a landmark 2004 Supreme Court order to give Guantánamo detainees a fair chance to challenge the basis for their indefinite incarceration without trial.

"I am pleased to report that we have completed a major milestone," said Navy Secretary Gordon England, who has overseen the process.

Reviews for all detainees at Guantánamo have been completed, England said. "The tribunals have provided a venue for detainees to personally challenge their status as enemy combatants."
there was extensive hopeful coverage of these decisions as civil rights victories at the time they were handed down. unfortunately, that narrative is nearly completely false. it is, however, the only plausible one for most americans enamored of their nation and their freedom, because the alternative interpretation -- that america is no longer ruled by law -- is unthinkable.

the decisions were often and thoroughly dissected with horror and concern by many in the civil rights legal community for their weakness in preventing exactly the kind of continuing indefinite detention without due process and star chamber justice that we are seeing.

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