From Financial Crisis to Debt Crisis?

RogoffKenneth Rogoff in Project Syndicate:

Everyone from the Queen of England to laid-off Detroit autoworkers wants to know why more experts did not see the financial crisis coming. It is an awkward question. How can policymakers be so certain that financial catastrophe won’t soon recur when they seemed to have no idea that such a crisis would happen in the first place?

The answer is not very reassuring. First, the fact is that economics tells us much more about a country’s vulnerability to financial crises than it does about the timing. Second, there is every reason to worry that the banking crisis has simply morphed into a long-term government debt crisis.

After all, why exactly are most investors now so confident that it is over? Mainly because they see that the governments of the world have cast a vast and expansive safety net over the major financial institutions and markets. At the same time, policymakers have turned on all the tools of modern macroeconomic stimulus to full blast, with huge fiscal deficits and near zero policy interest rates.

But if the governments have shown they will spare no expense to backstop the financial system, who is to backstop governments, particularly with so many running out-sized deficits at the same time.

As governments pile up war-level debt burdens, when will the problem explode? One again we just don’t know. Our theoretical models tell us that even a massively leveraged economy can plod along for years, if not decades, before crashing and burning. It all boils down to confidence. It is precisely when investors are most sure that governments will eventually dig their way out of huge debt holes that politicians dig their way deeper and deeper into debt. Economics theory tells us a lot about which countries are most vulnerable, but specifying exactly where and when crises will erupt is far more difficult.



judaism is jewish

Wieseltier600

“There are four types of people,” teaches an ancient rabbinical text. “The one who says: What is mine is mine and what is yours is yours — this is the common type, but there are some who say that this is the type of Sodom. What is mine is yours and what is yours is mine — this is a boor. What is mine is yours — a saint. What is yours is mine — a villain.” Brothers and sisters, is this liberal or conservative? The legitimacy of private property is certainly championed, but that is both a liberal conviction and a conservative one; and the tradition sees fit to record also the remarkable opinion that this elementary and uncontroversial norm — a scholar many years ago called it “possessive individualism” — was the custom of the most wicked city on earth. Moreover, legitimacy does not confer sanctity: the rabbis entertain the prospect of different distributions of wealth, and prudently contemplate the extremes of selflessness and selfishness. So liberals and conservatives, and socialists too, and even the Club for Growth, will all find a use for this text, which is to say that the text is useless, I mean, for establishing the liberalism or the conservatism of the Jewish tradition.

more from Leon Wieseltier on Norman Podhoretz (!!) at the NYT here.

The New Israel Lobby

13street.1-500James Traub in the NYT Sunday Magazine:

In July, President Obama met for 45 minutes with leaders of American Jewish organizations. All presidents meet with Israel’s advocates. Obama, however, had taken his time, and powerhouse figures of the Jewish community were grumbling; Obama’s coolness seemed to be of a piece with his willingness to publicly pressure Israel to freeze the growth of its settlements and with what was deemed his excessive solicitude toward the plight of the Palestinians. During the July meeting, held in the Roosevelt Room, Malcolm Hoenlein, executive vice chairman of the Conference of Presidents of Major American Jewish Organizations, told Obama that “public disharmony between Israel and the U.S. is beneficial to neither” and that differences “should be dealt with directly by the parties.” The president, according to Hoenlein, leaned back in his chair and said: “I disagree. We had eight years of no daylight” — between George W. Bush and successive Israeli governments — “and no progress.

It is safe to say that at least one participant in the meeting enjoyed this exchange immensely: Jeremy Ben-Ami, the founder and executive director of J Street, a year-old lobbying group with progressive views on Israel. Some of the mainstream groups vehemently protested the White House decision to invite J Street, which they regard as a marginal organization located well beyond the consensus that they themselves seek to enforce. But J Street shares the Obama administration’s agenda, and the invitation stayed. Ben-Ami didn’t say a word at the meeting — he is aware of J Street’s neophyte status — but afterward he was quoted extensively in the press, which vexed the mainstream groups all over again. J Street does not accept the “public harmony” rule any more than Obama does. In a conversation a month before the White House session, Ben-Ami explained to me: “We’re trying to redefine what it means to be pro-Israel. You don’t have to be noncritical. You don’t have to adopt the party line. It’s not, ‘Israel, right or wrong.’

The typewriter keyboard and the genetic code

Robert L. Dorit in American Scientist:

ScreenHunter_04 Sep. 12 19.43 A simplified, and ultimately misleading, account of the evolutionary process argues that natural selection inexorably leads to optimal adaptation. According to this perspective, organisms face challenges presented by the environment, and ultimately, through the agency of natural selection, find the best solutions. From this point of view, the living world—from the three-dimensional structure of enzymes to the drag-minimizing shape of porpoises—could thus be described as a compendium of these supposedly ideal adaptations.

This perspective beguiles in its simplicity, but in the end, it trivializes the complexities of the evolutionary process. Natural selection sorts among existing alternatives, but sometimes a good-enough solution may become inextricably locked in place. Evolution is not about what’s best, but what works. Organisms do fit their environments exquisitely—and the task of contemporary evolutionary biology is to elucidate the interplay of history, chance and selection that shapes life on this planet. To be sure, we can ease our burden by downplaying the reach of history. We can even maintain that chance delays, but ultimately does not derail, the emergence of peak adaptation. And finally, we can dismiss what appears to be a suboptimal design by asserting that it simply reflects our lack of understanding of what is being optimized. But these are risky simplifications. In the end, life is more than a collection of adaptations, and evolution is more than the ascent to perfection. My job as an evolutionary biologist goes beyond simply imagining the plausible benefits that disembodied features might confer on individual organisms.

The 200th anniversary of Darwin’s birth seems as good time as any to revisit the tension between history and optimality. I want to do so, however, by focusing on two seemingly disparate evolutionary narratives: The typewriter keyboard and the genetic code.

More here.

Why Osama bin Laden Failed

Tony Karon in Time:

Sept_11_0910 The purpose of the 9/11 attacks was not simply to kill Americans. Rather, the attacks formed part of bin Laden's strategy to launch a global Islamist revolution aimed at ending U.S. influence in Muslim countries, overthrowing regimes there allied with Washington and putting al-Qaeda at the head of a global Islamist insurgency whose objective was to restore the caliphate that had once ruled territory stretching from Moorish Spain through much of Asia.

Today, however, al-Qaeda is believed to comprise a couple of hundred desperate men, their core leaders hiding out in Pakistan's tribal wilds and under constant threat of attack by ever present U.S. drone aircraft, their place in Western nightmares and security determinations long since eclipsed by such longtime rivals as Iran, Hizballah, Hamas and the Muslim Brotherhood. This year's official threat assessment by the U.S. Directorate of National Intelligence cited the global economic downturn as the primary security challenge facing the U.S. The report found “notable progress in Muslim public opinion turning against terrorist groups like al-Qaeda” and said no country was at risk of falling to al-Qaeda-inspired extremists. It argued that sustained pressure against the movement's surviving core in the Pakistani tribal wilds was degrading its organizational cohesion and diminishing the threat it poses.

More here.

For a Bounced Check in Dubai, the Penalty Can Be Years Behind Bars

Robert F. Worth in the New York Times:

ScreenHunter_02 Sep. 12 19.22 Bouncing a check is a criminal offense here. That fact has begun raising questions about the fairness of Dubai’s laws, especially among the foreigners who make up about 90 percent of the population.

Consider the tale of Ali Fariq, a 33-year-old Iraqi real estate agent now serving a three-year jail term. Mr. Fariq says his ordeal in the Dubai legal system began last year when he was kidnapped and beaten by a diplomat who blamed him for an investment deal gone sour.

The diplomat, an Iraqi named Birhan al-Yacoubi, then forced Mr. Fariq — and later, his brother — to sign checks totaling $600,000, he said. She did not want the money; she knew they did not have it. Instead, she drove the men to a police station, where she presented the freshly signed checks as evidence of fraud, court records show.

More here.

Is Happiness Catching?

From New York Times:

Happy EILEEN BELLOLI KEEPS very good track of her friends. Belloli, who is 74, was born in Framingham, Mass., which is where she met her future husband, Joseph, when they were both toddlers. (“I tripped her and made her cry,” recalls Joseph, a laconic and beanpole-tall 76-year-old.) The Bellolis never left Framingham, a comfortable, middle-class town 25 miles west of Boston — he became a carpenter and, later, a state industrial-safety official; and after raising four children, she taught biology at a middle school. Many of her friends from grade school never left Framingham, either, so after 60 years, she still sees a half dozen of them every six weeks. I visited the Bellolis at their home in Framingham last month, and when I asked Eileen about her old friends, she jumped up from her rose-colored rocking chair, ran to her cabinet and pulled down a binder filled with class photos and pictures from her school reunions. Every five years, she told me, she helps organize a reunion, and each time they manage to collect a group of about 30 students she has known since elementary and junior high school. She opened the binder and flipped through the pictures, each one carefully laminated, with a label on the back listing each classmate’s name. “I’m a Type A personality,” she said.

As I leafed through the binder, I could see that the Bellolis and their friends stayed in very good health over the years. As they aged, they mostly remained trim, even as many other Framingham residents succumbed to obesity. The fattening of America annoys Eileen — “people are becoming more and more accustomed to not taking responsibility for their actions,” she said — and she particularly prides herself on remaining active. Almost every day she does a three-mile circuit inside the local mall with her husband and a cluster of friends, though she speed walks so rapidly that some gripe about her breakneck pace. Her one vice used to be smoking, usually right after her teaching day ended. “I would take myself to Friendly’s with a book, and I would sit there and have two cups of coffee and two cigarettes,” she said. At the time, her cigarette habit didn’t seem like a problem; most of her friends also smoked socially. But in the late 1980s, a few of them began to quit, and pretty soon Eileen felt awkward holding a cigarette off to one side when out at a restaurant. She quit, too, and within a few years nobody she knew smoked anymore.

More here.

Saturday Poem

Hosea

The prophet Hosea
Predecessor of Friedrich Nietzsche
Did not preach hope to the poor
A whore bore him a daughter and he called her
No more mercy;
Then she bore him a son, whom he called
You are not my people;
And his unfaithful wife he called
People.

Hosea believed that the bond
between men was not the law
but love.
To disown him they called him
A minor prophet, but
Hosea was, before Christ,
The prophet of love
And of the mystic fight
against the degradation of the spirit,
the incompetence of the lords
and the degeneration of the privileged and the prophets.

He was quoted by Christ
When he said “love, not sacrifices”
Maybe Christ was only a preacher of Hosea’s
Doctrine
And was turned by time into the son of God, while Hosea
Was turned into a prophet forgotten by men

by Álvaro Marín

From: Noche lìquida
Publisher: Muestra de Poesía Colombiana,
Manizales, 2000
.

Read more »

Far From the Madding Crowd

From The New York Times:

Browining650 We live in noise. The world is a booming, rustling, buzzing place to begin with (though many of us have shut out nature’s clamor), and to that we have added every conceivable vibration of our own making and every possible means of assault, whether it’s the vast, thrumming climate-controlling systems of our sealed buildings or the tiny earbuds nestled against our cochleae. What chance does quiet have against all this? Plenty, it turns out. Sara Maitland has scaled the heights (or is it depths?) of what might be the only frontier humankind will never conquer and cannot, in spite of itself, destroy — silence. Infinite, fathomless, terrifying, uplifting, unknowable, gorgeous silence. It’s difficult to convey the thrill of “A Book of Silence,” an adventure story that doesn’t involve roaring crowds or screaming headlines, doesn’t depict a heroine climbing high mountains or sailing vast oceans, doesn’t chronicle racing pulses or sweaty palms, and yet is every bit as awe-inspiring, death-defying and mind-blowing as any trip up Everest. Rarely have I been so amazed at the splendor of a new landscape unfolding before my eyes, and felt so tense wondering what was going to happen as this intrepid writer pushed her way across the pages.

“A Book of Silence” is a brilliant exploration of something — or is it a nothing? — that right at the start is impossible to define precisely. Is silence the absence of words? Or is it the absence of sound altogether? Is there even such a thing as silence that we can experience? Isn’t there always the swoosh of blood through the body? Is silence dependent on external conditions? Or is it a quality of mind? What would you call the visual effect of something like a Rothko painting?

More here.

Friday, September 11, 2009

Speak as Little as Possible: On Clarice Lispector

1252599621-largeRachel Aviv in The Nation:

Clarice Lispector doted on the ugly, dull and superfluous. Over the course of her fifty years as a novelist, her characters became less intelligent. She began with self-conscious and lonely heroines and moved on to less pensive creatures: dogs, chickens, cockroaches and the smallest woman in the world. The triumph of her career is a dimwitted virgin named Macabéa, who subsists on hot dogs. Macabéa’s “story is so banal that I can scarcely bear to go on writing,” Lispector notes in her finest book, The Hour of the Star, published a few months before her death in 1977. Macabéa works as a typist in Rio de Janeiro but knows the meaning of few of the words she commits to the page. She sleeps in cheap cotton underwear, with her mouth wide open, and then rushes to work in the morning, smiling dumbly at everyone she passes. Her few moments of leisure are spent drinking Coca-Cola–a refreshment she adores “with servility and subservience”–and watching horror films in which women get shot in the heart.

Lispector was fascinated by the possibility of extinguishing self-consciousness; she idealized animals and idiots because they were free of the desire to translate their experiences into words. Macabéa is the perfect fool, whose life has been reduced to a “tiny essential flame”: she does nothing more than exist, without wondering why. Then she gets hit by a car and dies. The novella’s drama derives not from Macabéa’s pitiful story but from Lispector’s struggle to render in full a life so mundane. “I feel so nervous about writing,” she admits, “that I might explode into a fit of uncontrollable laughter.”

J. M. Coetzee’s Autre-biography

TLS_FLANERY185X185_611300aPatrick Denman Flanery in the TLS:

Imagine for a moment that John Coetzee is dead. He has left behind a series of notebook entries in preparation for writing the final volume of his memoirs. What kinds of challenges would face a biographer setting out to write a life of this South African-born Nobel Laureate, whose public persona as “J. M. Coetzee”, at least as constructed by the literary press, is characterized by extreme privacy, if not awkwardness? (This is, after all, an author who did not attend either of the ceremonies at which his novels were given the Booker Prize.) Who would such a biographer interview, and what kinds of questions would he ask? More particularly, who might presume to speak about the personal life of an author who has attempted so radically to subvert the idea of literary celebrity in an age that celebrates the confessional?

This is the conceit behind Coetzee’s new book, Summertime, presented as the final volume of his Scenes from Provincial Life trilogy of fictionalized memoirs, which began with Boyhood (1997) and Youth (2002). The first books both employ a distancing third-person narrator, recounting events in the life of the character John, or “he”. Boyhood is concerned with young John’s life in Worcester and Cape Town in the late 1940s and early 50s, depicting the author as a Europhile child culturally out of place in his homeland. Youth takes John from Cape Town to London in the early 1960s; here he works for IBM, has painful affairs, and, coping with the bleak realities of mid-century England, tries to be a poet. Both books function as explorations into the life of the writer at crucial stages in his aesthetic and intellectual development.

The Math of Gambling

Mg20327202.600-1_300Helen Thomson in New Scientist:

FIVE years ago, Londoner Ashley Revell sold his house, all his possessions and cashed in his life savings. It raised £76,840. He flew to Las Vegas, headed to the roulette table and put it all on red.

The wheel was spun. The crowd held its breath as the ball slowed, bounced four or five times, and finally settled on number seven. Red seven.

Revell’s bet was a straight gamble: double or nothing. But when Edward Thorp, a mathematics student at the Massachussetts Institute of Technology, went to the same casino some 40 years previously, he knew pretty well where the ball was going to land. He walked away with a profit, took it to the racecourse, the basketball court and the stock market, and became a multimillionaire. He wasn’t on a lucky streak, he was using his knowledge of mathematics to understand, and beat, the odds.

No one can predict the future, but the powers of probability can help. Armed with this knowledge, a high-school mathematics education and £50, I headed off to find out how Thorp, and others like him, have used mathematics to beat the system. Just how much money could probability make me?

When Thorp stood at the roulette wheel in the summer of 1961 there was no need for nerves – he was armed with the first “wearable” computer, one that could predict the outcome of the spin. Once the ball was in play, Thorp fed the computer information about the speed and position of the ball and the wheel using a microswitch inside his shoe. “It would make a forecast about a probable result, and I’d bet on neighbouring numbers,” he says.

Thorp’s device would now be illegal in a casino, and in any case getting a computer to do the work wasn’t exactly what I had in mind. However, there is a simple and sure-fire way to win at the roulette table – as long as you have deep pockets and a faith in probability theory.

Churchill as Warlord

From The Telegraph:

Church ‘Churchill so evidently enjoyed the war that I could never like him,’’ wrote James Lees-Milne, the diarist. ‘‘I merely acknowledge him, like Genghis Khan, to have been great.’’ Max Hastings, a former editor of The Daily Telegraph, has similarly conflicted views about Churchill, readily accepting him as ‘‘one of the greatest human beings of the 20th century, indeed of all time’’, yet also dwelling at great length in this book on his perceived strategic failures and personality defects.

In a sense, Hastings has been researching this book for the 30 years that he has been writing about the Second World War, and the depth of the scholarship shows on every page. It is phenomenally difficult to unearth fresh stories and anecdotes about a man as widely and deeply covered historically as Winston Churchill, yet Hastings succeeds again and again. Few will agree with all his often contentious theories about Churchill, but none can fail to admire his archival tenacity and sheer authorial reach. His chapter on Churchill in Athens in Christmas 1944 is worth the price of the book alone.

More here.

Friday Poem

Whispering Pines

If you find me in a gloom, or catch me in a dream
inside my lonely room, there is no in between

Whispering pines, rising of the tide
if only one star shines
that's just enough to get inside

I will wait until it all goes 'round
with you in sight, the lost are found

Foghorn through the night, calling out to sea
protect my only light, 'cause she once belonged to me

Let the waves rush in, let the seagulls cry
for if I live again, these hopes will never die

I can feel you standing there
but I don’t see you anywhere

Standing by the well, wishing for the rains
reaching to the clouds, for nothing else remains

Drifting in a daze, when evening will be done
try looking through a haze
at an empty house, in the cold, cold sun

I will wait until it all goes round
with you in sight, the lost are found


by Robbie Robertson & Richard Manuel

Recordings: The Band (original) here
New by Kelly Hogan here and here
Clip: here

CHOOSE YOUR AFTERLIFE

From MSNBC:

After What if God is a microbe, and we're just the hosts for the creatures made in Its image? A neuroscientist and self-described “possibilian” offers 40 thought-provoking possibilities for the afterlife in a slim book called “Sum.” The questions that David Eagleman deals with at his day job at the Baylor College of Medicine in Houston are already pretty far-out: How do our brains construct reality? Why does our perception of time's flow change? Why do some people “see” music or associate numbers with colors?

But even at work, some of Eagleman's ideas are so far-out they have to be put aside … until he goes home and writes about them. “In some sense, I use my literary fiction as a channel to explore ideas that I come up with during the day,” he told me. For example, consider how the data in your brain determines your identity. “For a long time, there's been this open question of what it would be like to be someone else – or to be something else,” he said. “Once you're John Malkovich, you wouldn't remember what it's like not to be John Malkovich.”

More here.

A culture of fear

Liberal spaces within Europe have brought many more Muslim women out of their old confinements Europe is at risk of being 'colonised' by its Muslim populations, argue a number of bestselling new books, acclaimed across the political spectrum. How has such hysteria gone unchallenged? Pankaj Mishra on the 'Eurabia-mongers'.

From The Guardian:

ScreenHunter_02 Sep. 11 11.48 Is Europe about to be overrun by Muslims? A number of prominent European and American politicians and journalists seem to think so. The historian Niall Ferguson has predicted that “a youthful Muslim society to the south and east of the Mediterranean is poised to colonise – the term is not too strong – a senescent Europe”. And according to Christopher Caldwell, an American columnist with the Financial Times, whom the Observer recently described as a “bracing, clear-eyed analyst of European pieties”, Muslims are already “conquering Europe's cities, street by street”. So what if Muslims account for only 3% to 4% of the EU's total population of 493 million? In his book Reflections on the Revolution in Europe: Can Europe Be the Same With Different People in It? – which was featured on Start the Week, excerpted in Prospect, commended as “morally serious” by the New York Times and has beguiled some liberal opinion-makers as well as rightwing blowhards – Caldwell writes: “Of course minorities can shape countries. They can conquer countries. There were probably fewer Bolsheviks in Russia in 1917 than there are Islamists in Europe today.”

Apparently it's not only Islamist revolutionaries, but also rapidly breeding Muslims who are transforming Europe into “Eurabia”. The birthrates of Europe's Muslim immigrants are actually falling and converging with national averages, according to a recent survey in the Financial Times; but “advanced” cultures, Caldwell claims in his book, “have a long track record of underestimating their vulnerability to 'primitive' ones”.

More here. [Thanks to Namit Arora.]

Gordon Brown: I’m proud to say sorry to a real war hero

Gordon Brown in The Telegraph:

ScreenHunter_01 Sep. 11 11.40 This has been a year of deep reflection – a chance for Britain, as a nation, to commemorate the profound debts we owe to those who came before. A unique combination of anniversaries and events have stirred in us that sense of pride and gratitude that characterise the British experience. Earlier this year, I stood with Presidents Sarkozy and Obama to honour the service and the sacrifice of the heroes who stormed the beaches of Normandy 65 years ago. And just last week, we marked the 70 years which have passed since the British government declared its willingness to take up arms against fascism and declared the outbreak of the Second World War.

So I am both pleased and proud that, thanks to a coalition of computer scientists, historians and LGBT (lesbian, gay, bisexual and transgender) activists, we have this year a chance to mark and celebrate another contribution to Britain's fight against the darkness of dictatorship: that of code-breaker Alan Turing.

Turing was a quite brilliant mathematician, most famous for his work on breaking the German Enigma codes. It is no exaggeration to say that, without his outstanding contribution, the history of the Second World War could have been very different. He truly was one of those individuals we can point to whose unique contribution helped to turn the tide of war. The debt of gratitude he is owed makes it all the more horrifying, therefore, that he was treated so inhumanely.

More here.