Archive for the ‘Bobo’ Category

Brooks, Cohen and Nocera

March 3, 2015

In “Leaving and Cleaving” Bobo gurgles that instant communications technology has changed the nature of parting: a new level of self-discipline and sacrifice is required for a graceful split.  In the comments “Mary Askew” from Springfield, MA had this to say:  “David Brooks may know people who stalk and harass ex-lovers, friends, mentors. I don’t. And, I haven’t heard those issues discussed among my friends.  If he thinks about it, Brooks will drop the “We all know….” formula. It is, at best, a lazy rationalization for this column.”  Mr. Cohen, in “The Vast Realm of ‘If’,” says hypothetically speaking, one life is not enough. There is not enough time for all of our dreams.  In “How Warren Buffet Does It” Mr. Nocera tells us about going from “cigar butt” investing to the greatest conglomerate ever in 50 years.  Here’s Bobo:

So much of life is about leave-taking: moving from home to college, from love to love, from city to city and from life stage to life stage.

In earlier times, leaving was defined by distance, but now it is defined by silence. Everybody everywhere is just a text away, a phone call away. Relationships are often defined by the frequency and intensity of communication between two people.

The person moving on and changing a relationship no longer makes a one-time choice to physically go to another town. He makes a series of minute-by-minute decisions to not text, to not email or call, to turn intense communication into sporadic conversation or no communication. His name was once constant on his friend’s phone screen, but now it is rare and the void is a wound.

If you are like me you know a lot of relationships in which people haven’t managed this sort of transition well. Communication that was once honest and life-enhancing has become perverted — after a transition — by resentment, neediness or narcissism.

We all know men and women who stalk ex-lovers online; people who bombard a friend with emails even though that friendship has evidently cooled; mentors who resent their former protégés when their emails are no longer instantly returned; people who post faux glam pictures on Instagram so they can “win the breakup” against their ex.

Instant communication creates a new sort of challenge. How do you gracefully change your communication patterns when one person legitimately wants to step back or is entering another life phase?

The paradox is that the person doing the leaving controls the situation, but greater heroism is demanded of the one being left behind. The person left in the vapor trail is hurt and probably craves contact. It’s amazing how much pain there is when what was once intimate conversation turns into unnaturally casual banter, emotional distance or just a void.

The person left behind also probably thinks that the leaver is making a big mistake. She probably thinks that it’s stupid to leave or change the bond; that the other person is driven by selfishness, shortsightedness or popularity.

Yet if the whole transition is going to be managed with any dignity, the person being left has to swallow the pain and accept the decision.

The person being left has to grant the leaver the dignity of her own mind, has to respect her ability to make her own choices about how to live and whom to be close to (except in the most highly unusual circumstances). The person being left has to suppress vindictive flashes of resentment and be motivated by a steady wish for the other person’s ultimate good. Without accepting the idea that she deserved to be left, the person being left has to act in a way worthy of her best nature, to continue the sacrificial love that the leaver may not deserve and may never learn about.

That means not calling when you are not wanted. Not pleading for more intimacy or doing the other embarrassing things that wine, late nights and instant communications make possible.

Maybe that will mean the permanent end to what once was, in which case at least the one left behind has lost with grace. But maybe it will mean rebirth.

For example, to be around college students these days is to observe how many parents have failed to successfully start their child’s transition into adulthood.

The mistakes usually begin early in adolescence. The parents don’t create a space where the child can establish independence. They don’t create a context in which the child can be honest about what’s actually happening in his life. The child is forced to deceive in order to both lead a semi-independent life and also maintain parental love.

By college, both sides are to be pitied. By hanging on too tight, the parents have created exactly the separation they sought to avoid. The student, meanwhile, does not know if he is worthy of being treated as a dignified adult because his parents haven’t treated him that way. They are heading for a life of miscommunication.

But if the parents lay down sacrificially, accept the relationship their child defines, then it can reboot on an adult-to-adult basis. The hiddenness and deception is no longer necessary. Texts and emails can flow, not as before, but fluidly and sweetly.

Communications technology encourages us to express whatever is on our minds in that instant. It makes self-restraint harder. But sometimes healthy relationships require self-restraint and self-quieting, deference and respect (at the exact moments when those things are hardest to muster). So today a new kind of heroism is required. Feelings are hurt and angry words are at the ready. But they are held back. You can’t know the future, but at least you can walk into it as your best and highest self.

I wonder if Bobo is busy cyber-stalking his ex-wife, since he seems so sure that we ALL know someone who does that…  Here’s Mr. Cohen:

What happens only just happens; then inevitability is conferred upon it. Between the lived and the not-quite-lived lies the little word “if.” It’s a two-letter invitation to the vast realm of the hypothetical, the counterfactual, and all the various paths not taken over the course of a life.

When I lived in Brazil in the 1980s I would run along the beach from Leblon to Ipanema and back. After the workout, I’d always pay a couple of cents for coconut water. I liked to watch the way the beach-shack dude cupped the coconut in one hand and then, with three or four languorous but unerring swipes of his machete, opened up the top. He’d insert a straw. The iced water was always perfect.

I’d count his fingers. The blade never slipped. There were always 10.

Of course, if I’d thought of putting the coconut water in a bottle 30 years ago, marketing its health benefits, and selling it worldwide, I would not be writing this column today. It was too simple to think of that.

When I lived in Rome, before Brazil, I liked to watch the barmen ratcheting ground coffee into a receptacle, tapping the grains down, twisting the container into a socket, placing cups on a metal ledge-cum-filter beneath the coffee-yielding spouts, pouring milk with the requested dose of foam, and placing the various coffees on the counter. The quicksilver movements seemed all part of a single pirouette.

My then wife and I would travel from Rome to the Midwest, where she is from, and remark on the fact that it was near impossible to get a good coffee. She liked the idea of opening a coffee shop in the Twin Cities that would serve coffee as good as we’d become accustomed to drinking in Italy. Perhaps we could even grow the business across the United States!

Of course, if we’d done that in 1983, coffee aficionados might be speaking of St. Paul today the way they speak of Seattle. We’d be visiting our coffee shops in Chengdu and Glasgow. But it was too simple to do that.

Before Rome, when I lived in Brussels, I’d watch the chocolatiers down near the Grand Place apply their tongs (most useful and underrated of culinary implements!) to the cocoa-dusted truffles and place them, one by one, in small white boxes until the chocolates were arrayed in many-layered order, one temptation nestling against another.

It would have been easy enough, in 1980, to make those chocolates more widely available, and it did occur to me that they should be, but of course I did nothing about the thought. If I had, who knows?

When I was in Afghanistan in 1973, before all the trouble started, or rather at the moment the trouble started with the overthrow of the king, I should have brought back all those Afghan rugs, and perhaps picked up a few in Iran (in that one could drive across the country then without any problem or mention of nukes); and certainly I should have hung onto our VW Kombi called Pigpen, after the keyboardist of the Grateful Dead who died that year, but I did not imagine then what a vehicle like that, adorned with Afghan paintings, might go for on eBay today, or how the VW bus would one day be prized from Hay-on-Wye to Haight-Ashbury. I don’t even recall where in England I left Pigpen to die.

Hypothetically speaking, we need countless lives. There is not enough time. Or so it may seem. In the next one I will be a baker or a jeweler or a winemaker. I will make things. I will stay in one place.

Absent what might have been, I went on writing. In “The Debt to Pleasure,” the English novelist John Lanchester has this to say about my profession: “‘Your precipitate social decline cannot fail to alarm your well-wishers,’ I told my brother. ‘You started as a painter, then you became a sculptor, now you’re basically a sort of gardener. What next, Barry? Street-cleaner? Lavatory attendant? Journalism?”’

That is a little harsh on what happened in the absence of what might have.

There is beauty in our dreams of change, our constant what ifs. Days begin in the realm of solemn undertakings — to eat less, to exercise more, to work harder, or to go gentler. They end with wobbles into compromise, or collapses into indulgence, with the perennial solace of the prospect of another day. The good-intentions dinner, a salad with a couple of slivers of chicken, turns into a Burrito with cheese and avocado and salsa and chicken. That’s human.

It’s an illusion to think it would have been simple to change. We live lives that reflect our natures. Memory grows, a refuge, a solace, a repository so vast that what happened and what almost did begin to blur.

And now we get to Mr. Nocera:

Fifty years ago, a young investor named Warren Buffett took control of a failing textile company, Berkshire Hathaway. “I found myself … invested in a terrible business about which I knew very little,” Buffett relates in his annual letter to shareholders, which was released over the weekend. “I became the dog who caught the car.”

Buffett describes his approach in those days as “cigar butt” investing; buying shares of troubled companies with underpriced stocks was “like picking up a discarded cigar butt that had one puff remaining in it,” he writes. “Though the stub might be ugly and soggy, the puff would be free.” He continues: “Most of my gains in those early years … came from investments in mediocre companies that traded at bargain prices.”

But that approach had limits. It took Charlie Munger, the Los Angeles lawyer who has been his longtime sidekick, to show him that there was another way to win at the investing game: “Forget what you know about buying fair businesses at wonderful prices,” Munger told him. “Instead, buy wonderful businesses at fair prices.” Which is what Buffett’s been doing ever since.

He has done it in two ways. First — and this is what he is renowned for — he has bought stock in some of the great American companies of our time, stock that he has held not just for years, but for decades. Second, he has turned Berkshire Hathaway into a true conglomerate, which owns not just stocks but entire companies. Although Berkshire’s front office employs only 25 people, its companies have, in total, some 340,500 employees.

How successful has the Buffett-Munger approach been? In the 50 years since Buffett took over Berkshire, its stock has appreciated by 1,826,163 percent. That is an astounding number.

You would think, given Buffett’s success, that more people would try to emulate his approach to investing. It is not as if he hasn’t tried to explain how he does it. Every year, you can find a Buffett tutorial in his annual letter that the rest of us would do well to absorb — and practice.

In the current letter, for instance, he makes the case — which has been made many times before — that a diversified portfolio of stocks “that are bought over time and that are owned in a manner invoking only token fees and commissions” are less risky over the long term than other investment vehicles that are tied to the dollar. Clearly, that’s been his approach. He then goes on to bemoan the fact that too many investors — both little guys and investment professionals — do things that add risk: “Active trading, attempts to ‘time’ market movements, inadequate diversification, the payment of high and unnecessary fees … and the use of borrowed money can destroy the decent returns that a life-long owner of equities would otherwise enjoy.”

Another thing about Buffett is that he has never gotten caught up in fads. He only buys businesses that he understands and can predict where the business will be in a decade. He teaches this point in the current letter with a discussion of the conglomerates that sprung up in the 1960s and became the hot stocks of the moment. Jimmy Ling, who ran one such company, LTV, used to say that he looked for acquisitions where “2 plus 2 equals 5.”

LTV, as conceived by Ling, of course, ceased to exist decades ago (though the company would go through several transformations and bankruptcy court before shuttering its last vestige in 2002). “Never forget that 2 + 2 will always equal 4,” writes Buffett. “And when someone tells you how old-fashioned that math is — zip up your wallet, take a vacation and come back in a few years to buy stocks at cheap prices.”

If it’s really this simple, why don’t more people try to invest like Buffett? One reason, I think, is that sound investing — buying when others are selling, holding for the long term, avoiding the hot stocks — requires a stronger stomach than most people have. When a stock is plummeting, it takes a certain strength to buy even more instead of selling in a panic. Most of us lack the temperament required for smart investing. The fundamental equanimity required to be a great investor is a rare thing.

The second reason is that investing the Warren Buffett way is a lot more complicated than he makes it sound. Can you predict where a business will be in 10 years? Of course not. But he can — and does.

In a few months, the faithful will flock to Omaha to attend Berkshire’s annual meeting — “Woodstock for capitalists,” Buffett likes to call it. For six hours, Buffett and Munger will be on stage, before some 40,000 people, cracking wise, while making their investment decisions sound like simplicity itself.

But, in coming to pay their annual homage, the throngs will not be acknowledging the simplicity of Buffett’s approach, but the genius behind it.

Brooks and Krugman

February 27, 2015

In “Converting the Ayatollahs” Bobo gurgles that the nuclear negotiations with Iran are based on misguided premises and could have disastrous outcomes.  In the comments (which generally take him to school) “Stuart” from NY, NY has this to say:  “Just my opinion, but I think this Op-Ed is irresponsible. First of all, it’s full of conjecture. Second, NYTimes readers already know Mr. Brooks’s tactics. He suggests a recklessness on the part of the Obama administration that reasonable people shouldn’t believe.  Mr. Brooks is only one of many wishing to derail diplomacy before seeing its results. It puts him in Dick and Liz Cheney territory. For all his warm and fuzzy think pieces, we’re expected to be swayed by this misguided propaganda. Why he would want to be the Joe Lieberman of columnists is anyone’s guess.”  Well, Stuart, he probably thinks Weeping Joe is a great ‘Murkan…  Prof. Krugman has a question in “What Greece Won:”  Why all the negative analysis about the debt deal that has actually done the rest of Europe a favor?  Here’s Bobo:

Over the past centuries, Western diplomats have continually projected pragmatism onto their ideological opponents. They have often assumed that our enemies are driven by the same sort of national interest calculations that motivate most regimes. They have assumed that economic interests would trump ideology and religion — that prudent calculation and statecraft would trump megalomania.

They assumed that the world leaders before 1914 would not be stupid enough to allow nationalist passion to plunge them into a World War; that Hitler would not be crazy enough to start a second one; that Islamic radicals could not really want to send their region back into the 12th century; that Sunnis and Shiites would never let their sectarian feud turn into a cataclysmic confrontation in places like Iraq.

The Obama administration is making a similar projection today. It is betting that Iran can turn into a fundamentally normal regime, which can be counted upon to put G.D.P. over ideology and religion and do the pragmatic thing.

The Iran nuclear negotiations are not just about centrifuges; they are about the future of the Middle East. Through a series of statements over the last few years, President Obama has made it reasonably clear how he envisions that future.

He seeks to wean Iran away from the radicalism of the revolution and bind it into the international economic and diplomatic system. By reaching an agreement on nukes and lifting the sanctions, Iran would re-emerge as America’s natural partner in the region. It has an educated middle class that is interested in prosperity and is not terribly anti-American. Global integration would strengthen Iranian moderates and reinforce democratic tendencies.

Once enmeshed in the global system, Iran would work to tame Hezbollah and Hamas and would cooperate to find solutions in Gaza, Iraq and Syria. There would be a more stable balance of power between the major powers. In exchange for good global citizenship, Iran would be richer and more influential.

To pursue this détente, Obama has to have a nuclear agreement. He has made a series of stunning sacrifices in order to get it. In 2012, the president vowed that he would not permit Iran to maintain a nuclear program. Six United Nations Security Council resolutions buttressed that principle. But, if reports of the proposed deal are correct, Obama has abandoned this policy.

Under the reported framework, Iran would have thousands of centrifuges. All restrictions on its nuclear program would be temporary and would be phased out over a decade or so. According to some reports, there will be no limits on Iran’s ballistic missiles, no resolution of Iran’s weaponizing activities. Monitoring and enforcement would rely on an inspection regime that has been good, but leaky.

Meanwhile, the United States has offended its erstwhile allies, like Israel, Saudi Arabia and Egypt, without being sure that Iran is really willing to supplement them. There is a chance that Iran’s regional rivals would feel the need to have their own nuclear programs and we would descend into a spiral of proliferation.

All of this might be defensible if Iran is really willing to switch teams, if religion and ideology played no role in the regime’s thinking. But it could be that Iran has been willing to be an international pariah for the past generation for a reason. It could be that Iran finances terrorist groups and destabilizes regimes like Yemen’s and Morocco’s for a reason. It could be that Iran’s leaders really believe what they say. It could be that Iranian leaders are as apocalyptically motivated, paranoid and dogmatically anti-American as their pronouncements suggest they are. It could be that Iran will be as destabilizing and hegemonically inclined as all its recent actions suggest. Iran may be especially radical if the whole region gets further inflamed by Sunni-Shia rivalry or descends into greater and greater Islamic State-style fanaticism.

Do we really want a nuclear-capable Iran in the midst of all that?

If the Iranian leaders believe what they say, then United States policy should be exactly the opposite of the one now being pursued. Instead of embracing and enriching Iran, sanctions should be toughened to further isolate and weaken it. Instead of accepting a nuclear capacity, eliminating that capacity should be restored as the centerpiece of American policy. Instead of a condominium with Iran that offends traditional allies like Saudi Arabia, Egypt and Israel, the U.S. should build a regional strategy around strengthening relations with those historic pillars.

It’s hard to know what’s going on in the souls of Iran’s leadership class, but a giant bet is being placed on one interpretation. March could be a ruinous month for the Middle East. Prime Minister Benjamin Netanyahu of Israel could weaken U.S.-Israeli relations, especially on the Democratic left. The world might accept an Iranian nuclear capacity. Efforts designed to palliate a rogue regime may end up enriching and emboldening it.

Now here’s Prof. Krugman:

Last week, after much drama, the new Greek government reached a deal with its creditors. Earlier this week, the Greeks filled in some details on how they intend to meet the terms. So how did it go?

Well, if you were to believe many of the news reports and opinion pieces of the past few days, you’d think that it was a disaster — that it was a “surrender” on the part of Syriza, the new ruling coalition in Athens. Some factions within Syriza apparently think so, too. But it wasn’t. On the contrary, Greece came out of the negotiations pretty well, although the big fights are still to come. And by doing O.K., Greece has done the rest of Europe a favor.

To make sense of what happened, you need to understand that the main issue of contention involves just one number: the size of the Greek primary surplus, the difference between government revenues and government expenditures not counting interest on the debt. The primary surplus measures the resources that Greece is actually transferring to its creditors. Everything else, including the notional size of the debt — which is a more or less arbitrary number at this point, with little bearing on the amount anyone expects Greece to pay — matters only to the extent that it affects the primary surplus Greece is forced to run.

For Greece to run any surplus at all — given the depression-level slump that it’s in and the effect of that depression on revenues — is a remarkable achievement, the result of incredible sacrifices. Nonetheless, Syriza has always been clear that it intends to keep running a modest primary surplus. If you are angry that the negotiations didn’t make room for a full reversal of austerity, a turn toward Keynesian fiscal stimulus, you weren’t paying attention.

The question instead was whether Greece would be forced to impose still more austerity. The previous Greek government had agreed to a program under which the primary surplus would triple over the next few years, at immense cost to the nation’s economy and people.

Why would any government agree to such a thing? Fear. Essentially, successive leaders in Greece and other debtor nations haven’t dared to challenge extreme creditor demands, for fear that they would be punished — that the creditors would cut off their cash flow or, worse yet, implode their banking system if they balked at ever-harsher budget cuts.

So did the current Greek government back down and agree to aim for those economy-busting surpluses? No, it didn’t. In fact, Greece won new flexibility for this year, and the language about future surpluses was obscure. It could mean anything or nothing.

And the creditors did not pull the plug. Instead, they made financing available to carry Greece through the next few months. That is, if you like, putting Greece on a short leash, and it means that the big fight over the future is yet to come. But the Greek government didn’t succumb to the bum’s rush, and that in itself is a kind of victory.

Why, then, all the negative reporting? To be fair, fiscal policy isn’t the only issue. There were and are also arguments about things like privatization of public assets, where Syriza has agreed not to reverse deals already made, and labor market regulation, where some of the “structural reform” of the austerity era will apparently stand. Syriza also agreed to crack down on tax evasion, although why collecting taxes is supposed to be a defeat for a leftist government is a mystery to me.

Still, nothing that just happened justifies the pervasive rhetoric of failure. Actually, my sense is that we’re seeing an unholy alliance here between left-leaning writers with unrealistic expectations and the business press, which likes the story of Greek debacle because that’s what is supposed to happen to uppity debtors. But there was no debacle. Provisionally, at least, Greece seems to have ended the cycle of ever-more-savage austerity.

And, as I said, in so doing, Greece has done the rest of Europe a favor. Remember, in the background of the Greek drama is a European economy that, despite some positive numbers lately, still seems to be sliding into a deflationary trap. Europe as a whole desperately needs to end austerity madness, and this week there have been some slightly positive signs. Notably, the European Commission has decided not to fine France and Italy for exceeding their deficit targets.

Levying these fines would have been insane given market realities; France can borrow for five years at an interest rate of 0.002 percent. That’s right, 0.002 percent. But we’ve seen a lot of similar insanity in recent years. And you have to wonder whether the Greek story played a role in this outbreak of reasonableness.

Meanwhile, the first real debtor revolt against austerity is off to a decent start, even if nobody believes it. What’s the Greek for “Keep calm and carry on”?

Brooks and Nocera

February 24, 2015

Oh, Lord…  Bobo’s been to the theater.  In “The Hamilton Experience” he fizzes that Alexander Hamilton, brought strikingly to life in a new musical, embodies a complex but profound American tradition that is inspiring in its audacity.  In the comments “gemli” from Boston has this to say:  “I wonder what Hamilton would make of today’s unfettered finance and capitalism that subjugates the poor and middle class. When Hamilton though about social mobility I suspect that he wasn’t imagining that the mobility would be almost exclusively downward. … As I read Mr. Brooks’ tribute to Hamilton, I wondered how he could wax rhapsodic (or rap-sodic, considering the musical format) about a man who would be vilified by today’s conservatives. Hamilton seemed to have a prodigious intellect, and valued learning. He was concerned about government becoming an oligarchy that would disadvantage the poor. He sought the esteem of thoughtful people. In short, he stood for everything that today’s conservatives despise. I wonder what he would make of pundits who shill for these people?”  Mr. Nocera considers “Scientology’s Chilling Effect” and says it’s impossible to tell the story of Scientology without getting into the issue of intimidation and why the church will never turn the other cheek.  Joe, sweetie, it’s a cult, not a religion.  Here’s Bobo:

Every once in a while a piece of art brilliantly captures the glory, costs and ordeals of public life. Steven Spielberg’s “Lincoln” did that. And so does Lin-Manuel Miranda’s “Hamilton,” now playing at The Public Theater in New York.

The Public Theater seems hellbent on putting drama back in the center of the national conversation, and Miranda’s “Hamilton” is one of the most exhilarating experiences I’ve had in a theater. Each element in the show is a jewel, and the whole is bold, rousing, sexy, tear-jerking and historically respectful — the sort of production that strips things down and asks you to think afresh about your country and your life.

It is a hip-hop musical about a founding father. If that seems incongruous, it shouldn’t. Like the quintessential contemporary rappers, Alexander Hamilton was a poor immigrant kid from a broken home, feverish to rise and broadcast his voice. He was verbally blessed, combative, hungry for fame and touchy about his reputation. Like Tupac Shakur and the Notorious B.I.G., he died in a clash of male bravado. The spirits of Tupac and Biggie waft through this musical; their genre the modern articulation of Hamilton’s clever and cocky assertiveness.

The musical starts with the core fact about Hamilton and the strain of Americanism he represents: The relentless ambition of the outsider. He was effectively an orphan on the island of Nevis in the Caribbean. His mother died in the bed next to him. He was adopted by a cousin who committed suicide. Relentlessly efficient with his use of time and brilliant in the use of his pen, he made his name.

The musical reveals the dappled nature of that ambition. Hamilton is captivating and energetic — a history-making man who thinks he can remake himself and his country. But he is also haunted by a desperate sense that he is racing against time. He has a reckless, out-of-control quality. In the biography, “Alexander Hamilton,” upon which the musical was based, Ron Chernow writes that Hamilton “always had to fight the residual sadness of the driven man.” That haunting loneliness is in this show, too.

But Hamilton is not portrayed as ambition personified. The musical is structured around the rivalry between Hamilton and Aaron Burr, who is the crafty one, the utilitarian manipulator whose only ambition is to get inside the room where power is wielded. In real life and in the musical, Hamilton’s ambition was redeemed by his romanticism. He was more Lord Byron than Horatio Alger.

Hamilton was romantic about virtue and glory. As a boy he read Plutarch and had an archaic belief that death could be cheated by the person who wins eternal fame. He sought to establish himself as a man of honor, who would live on in the mouths of those whose esteem was worth having.

He was also romantic about his country. Miranda plays up Hamilton’s connection to New York, but Hamilton actually dedicated his life to the cause of America. He sought redemption in a national mission, personal meaning in a glory that would be realized by generations to come.

He was also romantic about women, strong in his capacity for love. Hamilton communes with Angelica Schuyler, who is his intellectual equal. He marries her sister, Eliza Schuyler, who is not, but whose submerged strength comes out in adversity.

But the boldest stroke in Miranda’s musical is that he takes on the whole life — every significant episode. He shows how the active life is inevitably an accumulation of battles, setbacks, bruises, scars, victories and humiliating defeats.

Hamilton’s greatest foe, Thomas Jefferson, is portrayed brilliantly by the actor Daveed Diggs as a supremely gifted aristocrat who knows exactly how gifted he is. Hamilton assaulted Jefferson because he did not believe a country dominated by oligarchs could be a country in which poor boys and girls like him would have space to rise and grow.

By the time he set off for his fatal duel, Hamilton was a damaged man. But he left behind a vision, albeit one that sits uncomfortably across today’s political divide. Unlike progressives, he believed in relatively unfettered finance and capitalism to arouse energy and increase social mobility. Unlike conservatives, he believed that government should actively subsidize mobility. Unlike populists of left and right, he believed in an aristocracy, though one based on virtue and work, not birth.

He also left behind a spirit — the spirit of grand aspiration and national greatness. The cast at the Public Theater is mostly black and Latino, but it exudes the same strong ambition as this dead white man from centuries ago. America changes color and shape, but the spirit Hamilton helped bring to the country still lives. I suspect many people will leave the theater wondering if their own dreams and lives are bold enough, if their own lives could someday be so astounding.

And now here’s Mr. Nocera:

When I was at Fortune magazine in the 1990s, one of my colleagues was a reporter named Richard Behar. He had a special lock on his door, and he wouldn’t even let the janitor in to empty his wastebasket. He used a secret phone, which he kept hidden in a desk drawer, so that calls made to sources couldn’t be traced back to him.

At first, I just thought he was paranoid. But I soon learned that he had come by his paranoia honestly. In May 1991, as a correspondent for Time magazine, Behar had written an exposé of Scientology, calling it a “hugely profitable global racket that survives by intimidating members and critics in a Mafia-like manner.”

Before the article was published, Behar says, he was followed by private detectives, who also contacted acquaintances, asking whether he had financial problems. After its publication, that sort of harassment continued, he says — along with a major libel suit. Although the suit was eventually dismissed, it took years, and cost millions of dollars to defend. Behar’s deposition alone lasted 28 days.

What brings this to mind is Alex Gibney’s fine new HBO documentary about Scientology, “Going Clear: Scientology and the Prison of Belief,” which is based on the book “Going Clear” by Lawrence Wright. (Disclosure: I played a small role in Gibney’s 2005 documentary on Enron.) “Going Clear,” which was shown at Sundance in late January, is scheduled to air on HBO on March 29.

It is virtually impossible to tell the story of Scientology without getting into the issue of intimidation. As the film notes, going on the offensive against its critics is part of Scientology’s doctrine, handed down by its founder, L. Ron Hubbard. “It is the antithesis of turn the other cheek,” says Marty Rathbun, a former high-ranking official who left the church in 2004 and has since been subjected to Scientology harassment, as the film documents. It also retells the story, first reported in The New York Times, of how, in 1993, Scientology won a 25-year fight against the Internal Revenue Service, which had refused to grant it nonprofit status. Scientologists filed several thousand lawsuits, against not just the I.R.S. but individual I.R.S. officials, and hired private detectives to look for dirt and conduct surveillance operations.

But the film doesn’t really tackle the intimidation of journalists. One of the first journalists to take on Scientology, in the early 1970s, was a young freelance writer named Paulette Cooper. Scientology’s retaliation was astounding. It framed her for supposedly sending bomb threats to the church. The documents it forged were so convincing that she was indicted in 1973 and was fully exonerated only when the F.B.I., acting on a tip, raided Scientology offices and discovered the plot against her in 1977.

Over the course of the next three decades-plus, there were a handful — though only a handful — of tough-minded articles like Behar’s. “Everybody who wrote about Scientology knew they were taking a risk,” Wright told me. You’ve heard of the “chilling effect?” Scientology offered a prime example of how it works.

Then, in 2009, The Tampa Bay Times (then The St. Petersburg Times) published an important series about Scientology, based on interviews with high-ranking defectors, including Rathbun and Mike Rinder, who had been Scientology’s top spokesman. The series was the first to suggest that Scientology had a longstanding culture of abuse. Amazingly, the church did not sue.

Vanity Fair published a big piece about Scientology. (This was after the breakup of Tom Cruise and Katie Holmes; Cruise, of course, is the most famous Scientologist of them all.) No lawsuit. Anderson Cooper did a series on CNN. The BBC weighed in. Ditto and ditto.

Sure enough, when I spoke to Wright and Gibney, they said that the pushback they had gotten was nothing they couldn’t handle. A Scientology website has posted a video attacking the two men, and the church has also taken out full-page newspaper ads denouncing “Going Clear.” “I didn’t expect quite this much venom,” Gibney told me, but, he added, “I regard it as good publicity.”

(In a lengthy statement, a Scientology spokesperson said that Gibney had “lied to us repeatedly,” that Marty Rathbun had “destroyed evidence and lied under oath,” that a judge had described Behar as “biased,” and that in defending itself against Gibney’s “propaganda and bigotry,” it was speaking “for those who are subjected to religious persecution and hatred.”)

Gibney also noted that the people who are really harassed these days aren’t journalists but those who have left the church, like Rathbun, who told me that, with more people leaving and talking about the church, it no longer has the resources to sic private eyes on all its critics. He also thinks the Internet has hurt the church, because it is far easier to find out information about it — and many of its supposed secrets are posted online for all to see.

“Part of the message here is that you don’t need to fear Scientology anymore,” says Wright. It’s long overdue.

Brooks and Krugman

February 20, 2015

Bobo has now decided that he’s the go-to expert on Islamic extremism.  He tells us that alienated young men will continue to be drawn to violent extremism unless and until we provide a compelling heroic alternative.  “Karen Garcia” from New Paltz, NY begins her comment with this:  “The only extremism we have to fear is that of the predatory ideologues who decided it would be a great idea to plunder and nation-build in Iraq and other middle Eastern regions. These same ideologues continue to roam free and grow rich, attaching themselves like leeches to such corrupt pols as Scott Walker and Jeb Bush. They want to keep the endless wars going, start new ones, and ensure that the most extreme wealth inequality in modern times continues.”  In “Cranking Up for 2016″ Prof. Krugman tells us that as any ambitious Republican must do, the early contenders in the presidential race are courting the charlatan caucus.  Here’s Bobo:

The struggle against Islamic extremism has been crippled by a failure of historical awareness and cultural understanding. From the very beginning, we have treated the problem of terrorism through the prism of our own assumptions and our own values. We have solipsistically assumed that people turn to extremism because they can’t get what we want, and fail to realize that they don’t want what we want, but want something they think is higher.

The latest example of this is the speech President Obama gave at this week’s Summit on Countering Violent Extremism. It was a bad speech, but its badness is no reflection on President Obama, for it was the same sort of bad speech that all American presidents have been giving for the past generation.

Religious extremism exists on three levels. It grows out of economic and political dysfunction. It is fueled by perverted spiritual ardor. It is organized by theological conviction. American presidents focus almost exclusively on the economic and political level because that’s what polite people in Western capitals are comfortable talking about.

At the summit meeting, President Obama gave the conventional materialistic explanation for what turns people into terrorists. Terrorism spreads, he argued, where people lack economic opportunity and good schools. The way to fight terror, he concluded, is with better job-training programs, more shared wealth, more open political regimes, and a general message of tolerance and pluralism.

In short, the president took his secular domestic agenda and projected it as a way to prevent young men from joining ISIS and chopping off heads.

But people don’t join ISIS, or the Islamic State, because they want better jobs with more benefits. ISIS is one of a long line of anti-Enlightenment movements, led by people who have contempt for the sort of materialistic, bourgeois goals that dominate our politics. These people don’t care if their earthly standard of living improves by a few percent a year. They’re disgusted by the pleasures we value, the pluralism we prize and the emphasis on happiness in this world, which we take as public life’s ultimate end.

They’re not doing it because they are sexually repressed. They are doing it because they think it will ennoble their souls and purify creation.

On Thursday, Mona El-Naggar of The Times profiled a young Egyptian man, named Islam Yaken, who grew up in a private school but ended up fighting for the Islamic State and kneeling proudly by a beheaded corpse in Syria.

He was marginalized by society. He seems to have rejected the whole calculus of what we call self-interest for the sake of an electrifying apocalyptic worldview and what he imagines to be some illimitable heroic destiny.

People who live according to the pure code of honor are not governed by the profit motive; they are governed by the thymotic urge, the quest for recognition. They seek the sort of glory that can be won only by showing strength in confrontation with death.

This heroic urge is combined, by Islamist extremists, with a vision of End Times, a culmination to history brought about by a climactic battle and the purification of the earth.

Extremism is a spiritual phenomenon, a desire for loftiness of spirit gone perverse. You can’t counter a heroic impulse with a mundane and bourgeois response. You can counter it only with a more compelling heroic vision. There will always be alienated young men fueled by spiritual ardor. Terrorism will be defeated only when they find a different fulfillment, even more bold and self-transcending.

In other times, nationalism has offered that compelling vision. We sometimes think of nationalism as a destructive force, and it can be. But nationalism tied to universal democracy has always been uplifting and ennobling. It has organized heroic lives in America, France, Britain and beyond.

Walt Whitman was inspired by the thought that his country was involved in a great project, “making a new history, a history of democracy, making old history a dwarf … inaugurating largeness, culminating time.” Lincoln committed himself to the sacred truth that his country represented the “last best hope” of mankind. Millions have been inspired by an American creed that, the late great historian Sacvan Bercovitch wrote, “has succeeded in uniting nationality and universality, civic and spiritual selfhood, sacred and secular history, the country’s past and paradise to be, in a single transcendent ideal.”

Young Arab men are not going to walk away from extremism because they can suddenly afford a Slurpee. They will walk away when they can devote themselves to a revived Egyptian nationalism, Lebanese nationalism, Syrian nationalism, some call to serve a cause that connects nationalism to dignity and democracy and transcends a lifetime.

Extremism isn’t mostly about Islam. It is about a yearning for righteousness rendered malevolent by apocalyptic theology. Muslim clerics can fix the theology. The rest of us can help redirect the spiritual ardor toward humane and productive ends.

It also might help if we stopped bombing the crap out of them, and droning various wedding parties…  Here’s Prof. Krugman:

Scott Walker, the governor of Wisconsin, is said to be a rising contender for the Republican presidential nomination. So, on Wednesday, he did what, these days, any ambitious Republican must, and pledged allegiance to charlatans and cranks.

For those unfamiliar with the phrase, “charlatans and cranks” is associated with N. Gregory Mankiw, a professor at Harvard who served for a time as George W. Bush’s chief economic adviser. In the first edition of his best-selling economics textbook, Mr. Mankiw used those words to ridicule “supply-siders” who promised that tax cuts would have such magic effects on the economy that deficits would go down, not up.

But, on Wednesday, Mr. Walker, in what was clearly a rite of passage into serious candidacy, spoke at a dinner at Manhattan’s “21” Club hosted by the three most prominent supply-siders: Art Laffer (he of the curve); Larry Kudlow of CNBC; and Stephen Moore, chief economist of the Heritage Foundation. Politico pointed out that Rick Perry, the former governor of Texas, attended a similar event last month. Clearly, to be a Republican contender you have to court the powerful charlatan caucus.

So a doctrine that even Republican economists consider dangerous nonsense has become party orthodoxy. And what makes this political triumph especially remarkable is that it comes just as the doctrine’s high priests have been setting new standards for utter, epic predictive failure.

I’m not talking about the fact that supply-siders didn’t see the crisis coming, although they didn’t. Mr. Moore published a 2004 book titled “Bullish on Bush,” asserting that the Bush agenda was creating a permanently stronger economy. Mr. Kudlow sneered at the “bubbleheads” asserting that inflated home prices were due for a crash. Still, you could argue that few economists of any stripe fully foresaw the coming disaster.

You can’t say the same, however, about postcrisis developments, where the people Mr. Walker was courting have spent years warning about the wrong things. “Get ready for inflation and higher interest rates” was the title of a June 2009 op-ed article in The Wall Street Journal by Mr. Laffer; what followed were the lowest inflation in two generations and the lowest interest rates in history. Mr. Kudlow and Mr. Moore both predicted 1970s-style stagflation.

To be fair, Mr. Kudlow and Mr. Laffer eventually admitted that they had been wrong. Neither has, however, given any indication of reconsidering his views, let alone conceding the possibility that the much-hated Keynesians, who have gotten most things right even as the supply-siders were getting everything wrong, might be on to something. Mr. Kudlow describes the failure of runaway inflation to materialize — something he has been predicting since 2008 — as “miraculous.”

Something else worth noting: as befits his position at Heritage, Mr. Moore likes to publish articles filled with lots of numbers. But his numbers are consistently wrong; they’re for the wrong years, or just plain not what the original sources say. And somehow these errors always run in the direction he wants.

So what does it say about the current state of the G.O.P. that discussion of economic policy is now monopolized by people who have been wrong about everything, have learned nothing from the experience, and can’t even get their numbers straight?

The answer, I’d suggest, runs deeper than economic doctrine. Across the board, the modern American right seems to have abandoned the idea that there is an objective reality out there, even if it’s not what your prejudices say should be happening. What are you going to believe, right-wing doctrine or your own lying eyes? These days, the doctrine wins.

Look at another issue, health reform. Before the Affordable Care Act went into effect, conservatives predicted disaster: health costs would soar, the deficit would explode, more people would lose insurance than gain it. They were wrong on all counts. But, in their rhetoric, even in the alleged facts (none of them true) people like Mr. Moore put in their articles, they simply ignore this reality. Reading them, you’d think that the dismal failure they wrongly predicted had actually happened.

Then there’s foreign policy. This week Jeb Bush tried to demonstrate his chops in that area, unveiling his team of expert advisers — who are, sure enough, the very people who insisted that the Iraqis would welcome us as liberators.

And don’t get me started on climate change.

Along with this denial of reality comes an absence of personal accountability. If anything, alleged experts seem to get points by showing that they’re willing to keep saying the same things no matter how embarrassingly wrong they’ve been in the past.

But let’s go back to those economic charlatans and cranks: Clearly, failure has only made them stronger, and now they are political kingmakers. Be very, very afraid.

Oh, I am…

Solo Bobo

February 17, 2015

Mr. Nocera is off today, so we’re faced with Bobo, who’s decided to babble on about something he knows little to nothing about.  Again.  But he read a book about it…  In “The Moral Injury” he gurgles that the horrors of PTSD are more complex than most of us know. Sufferers feel exile, and healing must be moral as well as psychological.  This from someone who was a drum major for the Iraq war…  “Rich in Atlanta,” an infantry veteran from Decatur, GA, opened his comment with these words:  “Thank you, Mr. Brooks, for a facile conclusion on something you’ve never experienced.”  Here’s Bobo:

David J. Morris returned from Iraq with a case of post-traumatic stress disorder. The former Marine turned war correspondent was plagued by nightmares. His imagination careened out of control; he envisioned fireballs erupting while on trips to the mall. His emotions could go numb, but his awareness was hypervigilant. Images and smells from the war were tattooed eternally fresh on his brain, and he circled back to them remorselessly.

“Trauma destroys the fabric of time,” Morris writes in his book, “The Evil Hours.” “In normal time you move from one moment to the next, sunrise to sunset, birth to death. After trauma, you may move in circles, find yourself being sucked backwards into an eddy or bouncing like a rubber ball from now to then to back again. … In the traumatic universe the basic laws of matter are suspended: ceiling fans can be helicopters, car exhaust can be mustard gas.”

Morris’s book is so good because it relies on literature, history and psychology to communicate the reality of PTSD, both to those who live with it and those who never have. But this book is also important because it’s part of a broader re-evaluation of trauma.

Most discussion about PTSD thus far has been about fear and the conquering of fear. But, over the past few years, more people have come to understand PTSD is also about exile — moral exile.

We don’t think about it much, but in civilian life we live enmeshed in a fabric of moral practices and evaluations. We try to practice kindness and to cause no pain.

People who have been to war have left this universe behind. That’s because war — no matter how justified or unjustified, noble or ignoble — is always a crime. It involves accidental killings, capricious death for one but not another, tainted situations where every choice is murderously wrong.

Many veterans feel guilty because they lived while others died. Some feel ashamed because they didn’t bring all their men home and wonder what they could have done differently to save them. When they get home they wonder if there’s something wrong with them because they find war repugnant but also thrilling. They hate it and miss it.

Many of their self-judgments go to extremes. A comrade died because he stepped on an improvised explosive device and his commander feels unrelenting guilt because he didn’t go down a different street. Insurgents used women and children as shields, and soldiers and Marines feel a totalistic black stain on themselves because of an innocent child’s face, killed in the firefight. The self-condemnation can be crippling.

The victims of PTSD often feel morally tainted by their experiences, unable to recover confidence in their own goodness, trapped in a sort of spiritual solitary confinement, looking back at the rest of the world from beyond the barrier of what happened. They find themselves unable to communicate their condition to those who remained at home, resenting civilians for their blind innocence.

People generally don’t suffer high rates of PTSD after natural disasters. Instead, people suffer from PTSD after moral atrocities. Soldiers who’ve endured the depraved world of combat experience their own symptoms. Trauma is an expulsive cataclysm of the soul.

We now have a growing number of books and institutions grappling with this reality, including Phil Klay’s novel “Redeployment,” which won the National Book Award; Nancy Sherman’s forthcoming “Afterwar: Healing the Moral Wounds of Our Soldiers”; and therapy programs like the one on moral injury found at the San Diego Naval Medical Center. These writers and therapists suggest that there has to be a moral reckoning, a discernment process that doesn’t whitewash what happened but does lead to merciful judgments about how much guilt should be borne; settled and measured conclusions about how responsibility for terrible things should be apportioned.

Sherman, who is a philosopher at Georgetown University, emphasizes that most of the work will have to be done at the micro level — through individual conversations between veterans and civilians that go beyond the cheap grace of “thank you for your service.” The conversations have to deal with the individual facts of each case. The goal is to get veterans to adopt the stance of a friendly observer, to make clear how limited choices are when one is caught in a random, tragic situation, to arrive at catharsis and self-forgiveness about what was actually blameworthy and what wasn’t.

The civilian enters into the world the veteran actually inhabited during those awful crowded hours and expands his own moral awareness. The veteran feels trusted, respected and understood — re-integrated into the fabric of his or her homeland.

We live in a culture that emphasizes therapy, but trauma often has to be overcome morally, through rigorous philosophical autobiography, nuanced judgment, case by case.

Brooks and Krugman

February 13, 2015

In “Larry vs. Marco” Bobo gets all economist-ish and tries to ‘splain to us how Marco Rubio and Larry Summers give us a glimpse of the economic options likely to be on offer in 2016.  Well, at least he’s not playing rabbi today…  Prof. Krugman, in “Money Makes Crazy,” points out the obvious:  That monetary policy madness is pervasive in today’s Republican Party.  Here’s Bobo:

Pride goeth before a fall. Capitalism’s great triumph over socialism has been followed by a series of humbling setbacks since. Capitalism is not necessarily self-regulating, as we learned during the financial crisis. Capitalism does not necessarily lead to democracy abroad. Capitalism does not automatically produce sufficient social mobility.

Both Democrats and Republicans are adapting to these realities. Both are moving away from the orthodoxies that dominated the parties in the 1990s. We now have before us two documents that give us a sense of how each party is shifting.

On the Republican side, Marco Rubio, who has become the most intellectually creative of the presidential contenders, has given us a book, “American Dreams.” He moves beyond the Reagan-era emphasis on top marginal tax rates. He moves beyond the Mitt Romney distinction between makers and takers. Drawing on work by Yuval Levin, Peter Wehner and the YG Network, he gives us the clearest picture of how Republicans might use government to enhance middle-class prospects.

On the Democratic side, Lawrence Summers and the British politician Ed Balls have given us the “Report of the Commission on Inclusive Prosperity.” This report smashes the New Democratic approach that defined Bill Clinton’s (and an earlier Larry Summers’s) economic approach. It shows how boldly the Democrats have moved leftward and can be profitably read as a blueprint for a Hillary Clinton presidency.

The Rubio and Summers documents have some overlap. They have a similar sense of the core of the problem: The forces unleashed by globalization and technological change have hit middle-class earnings. Both plans would increase the earned-income tax credit or create similar subsidies. Both would take bold measures to make college affordable, though the Rubio plan is private sector and the Summers plan is public.

In other ways the two visions are different. The Summers document uses the language of social fairness; the Rubio document uses the language of individual virtue. The Summers document puts a bit more emphasis on the demand side of the economy — pumping up middle-class spending — while the Rubio document puts more emphasis on the supply side — incentives to increase investment.

Summers believes that middle-class wages have been hurt because of changes in the way corporations work; Rubio doesn’t. The progressive document implies that finance and corporate boards have rigged the game against the middle class, while Rubio argues that corporate lobbyists have used government to rig the game against small companies. While Summers would make parts of college free, Rubio has a more aggressive plan to reform higher education itself, using online learning.

The contrasts on family policy are fascinating. For a progressive document, the Summers report is clear that two-parent families are important for social mobility. But the proposals would push families toward the sorts of day care arrangements progressives like, encouraging women to stay in the work force. Rubio is more comfortable talking about family structure. His increased child tax credit would give parents greater leeway in how they want to make choices about child care and work.

The biggest philosophical difference between Rubio and Summers is this: Rubio sees government as a bridge helping people to get into the marketplace, while the Summers document argues that the marketplace is structurally flawed throughout and that government has to be a partner all the way along.

Rubio wants to transition to an immigration policy built around drawing high-level skills. He argues that employers should be allowed to immediately deduct every dollar they invest back in their business. He would simplify the tax code into two income tax rates: 15 percent and 35 percent. These proposals reshape the economic landscape but don’t get inside business decisions.

The Summers proposals get into the very gears of corporate governance and reshape workplaces on an intimate level. Summers would regulate executive compensation and use government power to encourage long-term investing. He would encourage employee ownership of companies and create mandatory work councils to bring employees into the decision-making process. He would have government ensure that employees have access to paid vacation, sick leave and generous family leave.

The questions for Rubio are: Is his approach sufficient? Will giving people access to contemporary capitalism lead to social mobility or is modern capitalism structurally flawed? The questions for Summers are: Have we forgotten the lessons of the last quarter-century? Do we think government is smart enough to intrude into millions of business decisions? Do we worry that in making hiring more expensive we will get less of it, and wind up with European-style sclerosis and unemployment levels?

This big hairy problem — insufficient social mobility — has landed in our lap. We don’t know what to do. But we are getting some alternatives.

Sweet baby Jesus on a seesaw but he’s a horse’s patoot.  Here’s Prof. Krugman, who actually knows what the eff he’s talking about:

Monetary policy probably won’t be a major issue in the 2016 campaign, but it should be. It is, after all, extremely important, and the Republican base and many leading politicians have strong views about the Federal Reserve and its conduct. And the eventual presidential nominee will surely have to endorse the party line.

So it matters that the emerging G.O.P. consensus on money is crazy — full-on conspiracy-theory crazy.

Right now, the most obvious manifestation of money madness is Senator Rand Paul’s “Audit the Fed” campaign. Mr. Paul likes to warn that the Fed’s efforts to bolster the economy may lead to hyperinflation; he loves talking about the wheelbarrows of cash that people carted around in Weimar Germany. But he’s been saying that since 2009, and it keeps not happening. So now he has a new line: The Fed is an overleveraged bank, just as Lehman Brothers was, and could experience a disastrous collapse of confidence any day now.

This story is wrong on so many levels that reporters are having a hard time keeping up, but let’s simply note that the Fed’s “liabilities” consist of cash, and those who hold that cash have the option of converting it into, well, cash. No, the Fed can’t fall victim to a bank run. But is Mr. Paul being ostracized for his views? Not at all.

Moreover, while Mr. Paul may currently be the poster child for off-the-wall monetary views, he’s far from alone. A lot has been written about the 2010 open letter from leading Republicans to Ben Bernanke, then the Fed chairman, demanding that he cease efforts to support the economy, warning that such efforts would lead to inflation and “currency debasement.” Less has been written about the simultaneous turn of seemingly respectable figures to conspiracy theories.

There was, for example, the 2010 op-ed article by Representative Paul Ryan, who remains the G.O.P.’s de facto intellectual leader, and John Taylor, the party’s favorite monetary economist. Fed policy, they declared, “looks an awful lot like an attempt to bail out fiscal policy, and such attempts call the Fed’s independence into question.” That statement looks an awful lot like a claim that Mr. Bernanke and colleagues were betraying their trust in order to help out the Obama administration — a claim for which there is no evidence whatsoever.

Oh, and suppose you believe that the Fed’s actions did help avert what would otherwise have been a fiscal crisis. This is supposed to be a bad thing?

You may think that at least some of the current presidential aspirants are staying well clear of the fever swamps, but don’t be so sure. Jeb Bush appears to be getting his economic agenda, such as it is, from the George W. Bush Institute’s 4% Growth Project. And the head of that project, Amity Shlaes, is a prominent “inflation truther,” someone who claims that the government is greatly understating the true rate of inflation.

So monetary crazy is pervasive in today’s G.O.P. But why? Class interests no doubt play a role — the wealthy tend to be lenders rather than borrowers, and they benefit at least in relative terms from deflationary policies. But I also suspect that conservatives have a deep psychological problem with modern monetary systems.

You see, in the conservative worldview, markets aren’t just a useful way to organize the economy; they’re a moral structure: People get paid what they deserve, and what goods cost is what they are truly worth to society. You could say that to the free-market true believer, to know the price of everything is also to know the value of everything.

Modern money — consisting of pieces of paper or their digital equivalent that are issued by the Fed, not created by the heroic efforts of entrepreneurs — is an affront to that worldview. Mr. Ryan is on record declaring that his views on monetary policy come from a speech given by one of Ayn Rand’s fictional characters. And what the speaker declares is that money is “the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. … Paper is a check drawn by legal looters.”

Once you understand that this is how many conservatives really think, it all falls into place. Of course they predict disaster from monetary expansion, no matter the circumstances. Of course they are undaunted in their views no matter how wrong their predictions have been in the past. Of course they are quick to accuse the Fed of vile motives. From their point of view, monetary policy isn’t really a technical issue, a question of what works; it’s a matter of theology: Printing money is evil.

So as I said, monetary policy should be an issue in 2016. Because there’s a pretty good chance that someone who either gets his monetary economics from Ayn Rand, or at any rate feels the need to defer to such views, will get to appoint the next head of the Federal Reserve.

Brooks and Nocera

February 10, 2015

In “The Act of Rigorous Forgiving” Bobo (who seems to want to become a rabbi, given all his recent posts) gurgles that every scandal is an opportunity either strengthen the national fabric through the process of contrition and forgiveness or to further shred it. In the comments “craig geary” from Redlands, FL had this to say:  “What a surprise.  Mr. Brooks passed on using his hero Ronald Reagan telling a real whopper of a lie as an example.  Reagan, the Eureka College guy cheerleader, told a story about having been at the liberation of a concentration camp, running a film crew.  Of course Reagan, the WW II dodger, never got closer to combat than a film set in Culver City.  But he continued on his path of great destruction arming what became the Taliban, arming Saddam Hussein, funding slaughter all over Central America.  That is unforgivable.”  But according to Republicans St. Reagan was perfect…  Mr. Nocera ponders “The Riddle of Powering Electric Cars” and says a new book goes inside the race to build the perfect electric car.  Here’s Rabbi Brooks:

There’s something sad in Brian Williams’s need to puff up his Iraq adventures and something barbaric in the public response.

The sad part is the reminder that no matter how high you go in life and no matter how many accolades you win, it’s never enough. The desire for even more admiration races ahead. Career success never really satisfies. Public love always leaves you hungry. Even very famous people can do self-destructive things in an attempt to seem just a little cooler.

The barbaric part is the way we respond to scandal these days. When somebody violates a public trust, we try to purge and ostracize him. A sort of coliseum culture takes over, leaving no place for mercy. By now, the script is familiar: Some famous person does something wrong. The Internet, the most impersonal of mediums, erupts with contempt and mockery. The offender issues a paltry half-apology, which only inflames the public more. The pounding cry for resignation builds until capitulation comes. Public passion is spent and the spotlight moves on.

I’ve only spoken with Williams a few times, and can’t really speak about the man (though I often appear on NBC News’s “Meet the Press”), but I do think we’d all be better off if we reacted to these sorts of scandals in a different way. The civic fabric would be stronger if, instead of trying to sever relationships with those who have done wrong, we tried to repair them, if we tried forgiveness instead of exiling.

Forgiveness is often spoken of in sentimental terms — as gushy absolution for everything, regardless of right or wrong. But many writers — ranging from Hannah Arendt and the Rev. Dr. Martin Luther King Jr. to modern figures like Jeffrie Murphy and L. Gregory Jones — have tried to think hard about rigorous forgiveness, which balances accountability with compassion.

They’ve generally described four different processes involved in forgiveness:

Pre-emptive mercy. Martin Luther King Jr. argued that forgiveness isn’t an act; it’s an attitude. We are all sinners. We expect sin, empathize with sin and are slow to think ourselves superior. The forgiving person is strong enough to display anger and resentment toward the person who has wronged her, but she is also strong enough to give away that anger and resentment.

In this view, the forgiving person makes the first move, even before the offender has asked. She resists the natural urge for vengeance. Instead, she creates a welcoming context in which the offender can confess.

Judgment. A wrong is an occasion to re-evaluate. What is the character of the person in question? Should a period of stupidity eclipse a record of decency?

It’s also an occasion to investigate each unique circumstance, the nature of each sin that was committed and the implied remedy to that sin. Some sins, like anger and lust, are like wild beasts. They have to be fought through habits of restraint. Some sins like bigotry are like stains. They can only be expunged by apology and cleansing. Some like stealing are like a debt. They can only be rectified by repaying. Some, like adultery, are more like treason than like crime; they can only be rectified by slowly reweaving relationships. Some sins like vanity — Williams’s sin — can only be treated by extreme self-abasement.

During the judgment phase, hard questions have to be asked so that in forgiving we don’t lower our standards.

Confession and Penitence. At some point the offender has to get out in front of the process, being more self-critical than anyone else around him. He has to probe down to the root of his error, offer a confession more complete than expected. He has to put public reputation and career on the back burner and come up with a course that will move him toward his own emotional and spiritual recovery, to become strongest in the weakest places.

Reconciliation and re-trust. After judgments have been made and penitence performed, both the offender and offended bend toward each other. As Martin Luther King Jr. said, trust doesn’t have to be immediate, but the wrong act is no longer a barrier to a relationship. The offender endures his season of shame and is better for it. The offended are free from mean emotions like vengeance and are uplifted when they offer kindness. The social fabric is repaired. Community solidarity is strengthened by the reunion.

I guess I think Brian Williams shouldn’t have to resign, for the reason David Carr emphasized in The Times: Williams’s transgressions were not part of his primary job responsibilities. And because I think good people are stronger when given second chances.

But the larger question is how we build community in the face of scandal. Do we exile the offender or heal the relationship? Would you rather become the sort of person who excludes, or one who offers tough but healing love?

Gawd, but he’s getting more and more tiresome.  Here’s Mr. Nocera:

Steve LeVine became interested in batteries in the wake of the financial crisis. LeVine is the Washington correspondent for Quartz, a news site covering the global economy, and he sensed, he told me recently, “a loss of confidence in the U.S. in our ability to create a real economy” — one based not on financial instruments or a real estate boom, but real products that would help create entire new industries.

The battery could be such a product. Not just any battery, of course, but a battery designed for electric cars and capable of powering them for 200 miles or even 300 miles per charge. A battery that could compete with — and eventually replace — the internal combustion engine and transform the electric car from a niche product to a mass-market automobile.

Such a battery does not yet exist. But if such a thing could be invented, it might well develop into a $100 billion-plus market in its first five or six years of existence, according to LeVine. A battery like that could vastly improve energy security. And with so much less exhaust spewed into the air, the effect on climate change could be lowered. The United States is trying to develop such a battery, and so are many other countries.

That interest led LeVine to the Argonne National Laboratory, one of the Department of Energy’s 17 national labs. For the better part of two years he was given access to its Battery Department, emerging with a captivating book entitled “The Powerhouse: Inside the Invention of a Battery to Save the World.”

With the closure or winnowing of many of corporate America’s industrial labs — not least the famed Bell Labs, which is a shadow of its once-mighty self — industry now relies heavily on the federal government’s national labs for basic scientific research. Thus it was that scientists at Argonne, which is in the Chicago suburbs, discovered a battery chemistry that greatly improved electric car performance, called NMC (for nickel-manganese-cobalt). The Chevrolet Volt uses a version of NMC, as will, reportedly, the next generation of Nissan Leafs. Which also suggests its drawback: the Volt only gets about 40 miles on pure battery power alone before it switches to its gasoline-powered engine.

The core of LeVine’s book is about the effort to take the next big step: create a battery that can achieve five times that mileage, while still remaining stable — stability is always a big issue with batteries — and affordable. The scientists at Argonne — some of them larger-than-life figures in the battery world — labeled this effort NMC 2.0. Though the writing can get technical at times, LeVine still tells a rollicking good tale. The scientists make a number of painstaking advances, inching the chemistry forward, only to discover problems. One such problem is called “voltage fade” — an instability that is serious enough to make the battery unusable in an electric vehicle.

There is also a private company in LeVine’s narrative, a start-up called Envia Systems. Licensing the advances made by Argonne, it claims to have solved the rest of the puzzle. Its executives are persuasive enough that General Motors contracts with them to create the battery for an electric car it is calling, internally, the Bolt, which is supposed to get 200 miles per charge.

LeVine told me that, for a long time, he fully expected that his book would end with Envia solving the riddle of NMC 2.0, and having a wildly successful public offering. But that’s not what happens. As G.M., Argonne, and LeVine eventually discover, the Envia claims were wildly exaggerated. After G.M. found out that the company wouldn’t be able to deliver after all, it ended its contract with the company and looked to LG Chem Ltd., the big South Korean company, to supply the battery.

Indeed, by the end of the book, scientists still haven’t solved the voltage fade problem, and NMC 2.0 seems as far away as ever. Argonne wins a competition set up by the Department of Energy to create a “Battery Hub,” in which more than a dozen national labs, universities and corporate partners will work together to completely rethink their approach to the conceptual leap the government — and everyone else — is hoping for. In effect, they’re starting over.

There is grist in “The Powerhouse” for critics of President Obama. He pushed for battery innovation just as he pushed for solar innovation. The latter gave us Solyndra; the former gave us Envia. Financing efforts to invent a new battery is, without question, a form of industrial policy.

But LeVine thinks this view is misguided, and so do I. “France and Germany and China have renewed their push for electric cars,” he says. “The stakes are so high and the dividends so rich that they keep going” — even if the quest seems, at times, quixotic.

Besides, batteries are, as LeVine puts it, “a hard problem.” If the government won’t try to solve that problem, who will?

The Great Invisible Free Hand, that’s who.  [snort]

Solo Bobo

February 3, 2015

Mr. Nocera is off today — maybe he sprained his back from carrying all that water…  Bobo has decided to tell us all about “Building Better Secularists.”  He babbles that today’s secularism speaks convincingly to the rational mind, but it must speak to the whole human heart if it is to serve as a guide for life.  His solution?  Religion!  In the comments “J Burkett” from Austin had this to say:  “You’re wrong, David – It isn’t such a struggle to treat others kindly and with dignity. Mike Huckabee and his Christian/religious brethren ought to try it more often.  According to you, they alone have all the rules to live by to make them caring, decent people, but hardly a week goes by that we don’t see video recorded proof of them ignoring those rules.”  And here’s Bobo:

Over the past few years, there has been a sharp rise in the number of people who are atheist, agnostic or without religious affiliation. A fifth of all adults and a third of the youngest adults fit into this category.

As secularism becomes more prominent and self-confident, its spokesmen have more insistently argued that secularism should not be seen as an absence — as a lack of faith — but rather as a positive moral creed. Phil Zuckerman, a Pitzer College sociologist, makes this case as fluidly and pleasurably as anybody in his book, “Living the Secular Life.”

Zuckerman argues that secular morality is built around individual reason, individual choice and individual responsibility. Instead of relying on some eye in the sky to tell them what to do, secular people reason their way to proper conduct.

Secular people, he argues, value autonomy over groupthink. They deepen their attachment to this world instead of focusing on a next one. They may not be articulate about why they behave as they do, he argues, but they try their best to follow the Golden Rule, to be considerate and empathetic toward others. “Secular morality hinges upon little else than not harming others and helping those in need,” Zuckerman writes.

As he describes them, secularists seem like genial, low-key people who have discarded metaphysical prejudices and are now leading peaceful and rewarding lives. But I can’t avoid the conclusion that the secular writers are so eager to make the case for their creed, they are minimizing the struggle required to live by it. Consider the tasks a person would have to perform to live secularism well:

•   Secular individuals have to build their own moral philosophies. Religious people inherit creeds that have evolved over centuries. Autonomous secular people are called upon to settle on their own individual sacred convictions.

•   Secular individuals have to build their own communities. Religions come equipped with covenantal rituals that bind people together, sacred practices that are beyond individual choice. Secular people have to choose their own communities and come up with their own practices to make them meaningful.

•   Secular individuals have to build their own Sabbaths. Religious people are commanded to drop worldly concerns. Secular people have to create their own set times for when to pull back and reflect on spiritual matters.

  Secular people have to fashion their own moral motivation. It’s not enough to want to be a decent person. You have to be powerfully motivated to behave well. Religious people are motivated by their love for God and their fervent desire to please Him. Secularists have to come up with their own powerful drive that will compel sacrifice and service.

The point is not that secular people should become religious. You either believe in God or you don’t. Neither is the point that religious people are better than secular people. That defies social science evidence and common observation. The point is that an age of mass secularization is an age in which millions of people have put unprecedented moral burdens upon themselves. People who don’t know how to take up these burdens don’t turn bad, but they drift. They suffer from a loss of meaning and an unconscious boredom with their own lives.

• One other burden: Past secular creeds were built on the 18th-century enlightenment view of man as an autonomous, rational creature who could reason his way to virtue. The past half-century of cognitive science has shown that that creature doesn’t exist. We are not really rational animals; emotions play a central role in decision-making, the vast majority of thought is unconscious, and our minds are riddled with biases. We are not really autonomous; our actions are powerfully shaped by others in ways we are not even aware of.

It seems to me that if secularism is going to be a positive creed, it can’t just speak to the rational aspects of our nature. Secularism has to do for nonbelievers what religion does for believers — arouse the higher emotions, exalt the passions in pursuit of moral action. Christianity doesn’t rely just on a mild feeling like empathy; it puts agape at the center of life, a fervent and selfless sacrificial love. Judaism doesn’t just value community; it values a covenantal community infused with sacred bonds and chosenness that make the heart strings vibrate. Religions don’t just ask believers to respect others; rather each soul is worthy of the highest dignity because it radiates divine light.

The only secularism that can really arouse moral motivation and impel action is an enchanted secularism, one that puts emotional relations first and autonomy second. I suspect that over the next years secularism will change its face and become hotter and more consuming, less content with mere benevolence, and more responsive to the spiritual urge in each of us, the drive for purity, self-transcendence and sanctification.

I never thought I would hear myself say this, but I do wish he’d go back to writing about politics.  At least that was something he seemed to have sort of a grasp of.  His navel-gazing pieces are just ghastly.

Brooks and Krugman

January 30, 2015

Bobo has surpassed himself today.  In “Being Who We Are” he gurgles that we should stop trying to play chess in the Middle East and simply keep our promises.  In the comments “HeyNorris” from Paris had this to say:  “Good grief, Brooks has really outdone himself with this one. Ideas drive history? The bumbling of W and the evil of Cheney & Co. drove history into a head-on collision with the Middle East which had everything to do with oil and power and nothing to do with ideas, and certainly did NOT “make it more fertile for moderation”.”  Prof. Krugman has a question in “Europe’s Greek Test:”  Can Europe get past the myths and moralizing, and deal with reality in a way that respects the Continents core values?  Probably not…  Here’s Bobo:

In the middle of 2013, the United States began supporting moderate rebels in Syria. We gave them just enough support to betray them.

As Adam Entous reported in The Wall Street Journal earlier this week, we promised the fighters support but then never had the will to follow through. The C.I.A. gave the rebels just 5 percent to 20 percent of the arms they requested. One trusted commander asked for more than a thousand rifles and received fewer than 36. One commander got the equivalent of 16 bullets a month per fighter. The rebels captured dozens of tanks, but the C.I.A. wouldn’t provide cash for fuel or shells so the tanks just sat there.

The rebels asked the C.I.A. for ammunition to take advantage of temporary opportunities, but the C.I.A. sometimes took two weeks to decide. The U.S. gave the rebels money to pay their troops, but they only gave them $100 to $150 for each fighter per month. The Islamic State paid its fighters twice that.

The C.I.A. was terrified that the arms it supplied would fall into enemy hands so it maintained paralyzingly tight controls on sophisticated weaponry. Trusted commanders had to film their use of anti-tank missiles. They had to hand over spent missile launchers at a spot along the border to qualify for resupply.

“We walk around Syria with a huge American flag planted on our backs, but we don’t have enough AK-47s in our hands to protect ourselves,” one fighter told American lawmakers.

“Why did you give us hope if you were not going to do anything about it?” another asked.

“We thought going with the Americans was going with the big guns,” another leader declared at a meeting. “It was a losing bet.”

The whole Wall Street Journal report gives the impression that the Islamic State not only has more resolve than the U.S. and its intelligence agencies, it has faster and more competent leadership.

The betrayal of the rebels in 2013 and 2014 is only a small betrayal, compared with the betrayal of values that might be unintentionally happening now. It appears as though the U.S. is backing off in its opposition to Bashar al-Assad, the mass murderer whose barbaric regime is a prime cause of instability in that part of the world. In our effort to stop the Islamic State, in the hopes of smoothing the Iranian nuclear talks, we may have entered a de facto alliance with Assad.

Now, Syria is obviously a viper’s pit in a region where the choices normally range from the appalling to the horrendous. But there are ways to approach problems in this region, and there are ways not to.

The way not to approach the Middle East is as a chessboard on which the grandmasters of American foreign policy can impose their designs. This is the sort of overconfident thinking that leads policy makers to squander moral authority by vowing to destroy Assad one month and then effectively buttressing him the next. This is the sort of overconfident thinking that leads to too-clever calibration of our support for the moderate rebels — giving them enough support to give the illusion of doing something real, while not actually giving enough to do any good.

The Middle East is not a chessboard we have the power to manipulate. It is a generational drama in which we can only play our role. It is a drama over ideas, a contest between the forces of jihadism and the forces of pluralism. We can’t know how this drama will play out, and we can’t direct it. We can only promote pluralism — steadily, consistently, simply.

Sticking to our values means maintaining a simple posture of support for people who share them and a simple posture of opposition to those who oppose them. It means offering at least some reliable financial support to moderate fighters and activists even when their prospects look dim. It means avoiding cynical alliances, at least as much as possible. It means using bombing campaigns to try to prevent mass slaughter.

If we do that then we will fortify people we don’t know in ways we can’t imagine. Over the long term, we’ll make the Middle East slightly more fertile for moderation, which is the only influence we realistically have. Ideas drive history.

Right now there is bipartisan inconsistency over the effectiveness of government. Republicans think government is a bumbling tool at home but a magnificent instrument abroad. Democrats think government is a magnificent instrument at home but a bumbling tool abroad. In reality, government is best when it chooses the steady simple thing over the complex clever thing. When you don’t know the future and can’t control events, bet on people. Support the good, oppose the bad.

Realist half-commitments that undermine our allies and too-clever games that buttress our foes will only backfire — and lead to betrayals that make us feel ashamed.

Is Bobo ashamed of Reagan’s arming of the rebels in Afghanistan, the ones who morphed into the Taliban?  Here’s Prof. Krugman:

In the five years (!) that have passed since the euro crisis began, clear thinking has been in notably short supply. But that fuzziness must now end. Recent events in Greece pose a fundamental challenge for Europe: Can it get past the myths and the moralizing, and deal with reality in a way that respects the Continent’s core values? If not, the whole European project — the attempt to build peace and democracy through shared prosperity — will suffer a terrible, perhaps mortal blow.

First, about those myths: Many people seem to believe that the loans Athens has received since the crisis broke have been subsidizing Greek spending.

The truth, however, is that the great bulk of the money lent to Greece has been used simply to pay interest and principal on debt. In fact, for the past two years, more than all of the money going to Greece has been recycled in this way: the Greek government is taking in more revenue than it spends on things other than interest, and handing the extra funds over to its creditors.

Or to oversimplify things a bit, you can think of European policy as involving a bailout, not of Greece, but of creditor-country banks, with the Greek government simply acting as the middleman — and with the Greek public, which has seen a catastrophic fall in living standards, required to make further sacrifices so that it, too, can contribute funds to that bailout.

One way to think about the demands of the newly elected Greek government is that it wants a reduction in the size of that contribution. Nobody is talking about Greece spending more than it takes in; all that might be on the table would be spending less on interest and more on things like health care and aid to the destitute. And doing so would have the side effect of greatly reducing Greece’s 25 percent rate of unemployment.

But doesn’t Greece have an obligation to pay the debts its own government chose to run up? That’s where the moralizing comes in.

It’s true that Greece (or more precisely the center-right government that ruled the nation from 2004-9) voluntarily borrowed vast sums. It’s also true, however, that banks in Germany and elsewhere voluntarily lent Greece all that money. We would ordinarily expect both sides of that misjudgment to pay a price. But the private lenders have been largely bailed out (despite a “haircut” on their claims in 2012). Meanwhile, Greece is expected to keep on paying.

Now, the truth is that nobody believes that Greece can fully repay. So why not recognize that reality and reduce the payments to a level that doesn’t impose endless suffering? Is the goal to make Greece an example for other borrowers? If so, how is that consistent with the values of what is supposed to be an association of sovereign, democratic nations?

The question of values becomes even starker once we consider why Greece’s creditors still have power. If it were just a matter of government finance, Greece could simply declare bankruptcy; it would be cut off from new loans, but it would also stop paying off existing debts, and its cash flow would actually improve.

The problem for Greece, however, is the fragility of its banks, which currently (like banks throughout the euro area) have access to credit from the European Central Bank. Cut off that credit, and the Greek banking system would probably melt down amid huge bank runs. As long as it stays on the euro, then, Greece needs the good will of the central bank, which may, in turn, depend on the attitude of Germany and other creditor nations.

But think about how that plays into debt negotiations. Is Germany really prepared, in effect, to say to a fellow European democracy, “Pay up or we’ll destroy your banking system?”

And think about what happens if the new Greek government — which was, after all, elected on a promise to end austerity — refuses to give in? That way, all too easily, lies a forced exit of Greece from the euro, with potentially disastrous economic and political consequences for Europe as a whole.

Objectively, resolving this situation shouldn’t be hard. Although nobody knows it, Greece has actually made great progress in regaining competitiveness; wages and costs have fallen dramatically, so that, at this point, austerity is the main thing holding the economy back. So what’s needed is simple: Let Greece run smaller but still positive surpluses, which would relieve Greek suffering, and let the new government claim success, defusing the anti-democratic forces waiting in the wings. Meanwhile, the cost to creditor-nation taxpayers — who were never going to get the full value of the debt — would be minimal.

Doing the right thing would, however, require that other Europeans, Germans in particular, abandon self-serving myths and stop substituting moralizing for analysis.

Can they do it? We’ll soon see.

Brooks and Nocera

January 27, 2015

Having recently given us dating advice, Bobo is now moving on to being an investment advisor.  In “How to Leave a Mark” he informs us that impact investing is perhaps the most promising new development tool, and that young people just getting started and older business gurus alike should consider it.  In the comments “steve” from NYC had this to say:  “There’s no human misery you can’t monetize. Good grief! Of course the strategy is brilliant. Capitalism creates the problems and then you can make a buck by figuring out how to profit from them.”  Mr. Nocera has a question:  “Is Vaping Worse Than Smoking?”  He tells us that you wouldn’t discover the correct answer from reading the latest study on e-cigarettes.  Here’s Bobo:

The big debate during the 20th century was about the relationship between the market and the state. Both those institutions are now tarnished. The market is prone to devastating crashes and seems to be producing widening inequality. Government is gridlocked, sclerotic or captured by special interests. Government is an ever more rigid and ineffective tool to address market failures.

So over the past generation many of the most talented people on earth have tried to transform capitalism itself, to use the market to solve social problems. These are people with opposable minds: part profit-oriented and part purpose-oriented. They’ve created organizations that look a little like a business, a little like a social-service provider, and a little like a charity — or some mixture of the three.

Hippy companies like Ben & Jerry’s ice cream led the first wave in this sector, but now you’ve got a burgeoning array of social-capitalist tools to address problems — ranging from B Corporations like Warby Parker (which gives free glasses to the poor) to social impact bonds. (For example, a private investor raises money to finance a program to reduce recidivism. If the program works and the government saves money because there are fewer prisoners to house, then the government pays back the investor, with a profit.)

Impact investing is probably the most promising of these tools.  Impact investing is not socially responsible investing. Socially responsible investing means avoiding certain companies, like tobacco growers. Impact investors seek out companies that are intentionally designed both to make a profit and provide a measurable and accountable social good. Impact funds are frequently willing to accept lower financial returns for the sake of doing good — say a 7 percent annual return compared with an 11 percent return.  But some impact investors are seeking to deliver market-rate returns.

Brian Trelstad of Bridges Ventures, has looked at companies in early autism intervention, paid for by Medicaid, that can improve long-term educational outcomes while reducing spending on special education; affordable after-school enrichment programs that bring extra education services to charter school students; and energy efficiency companies that serve people in public housing, which saves long term heating costs.

When impact funds came on the scene, seven or so years ago, there was the usual overhyping. A 2010 report by the Rockefeller Foundation and JPMorgan projected that impact investing could see new capital inflows of up to $1 trillion by 2020. That’s looking unlikely given that right now roughly something like only $40 billion has been invested through these funds.

There are more roadblocks than anticipated. It’s hard to find a reliable way to measure the social impact of these dual-purpose companies. Impact investors have also had trouble finding scalable deals to invest in. It costs as much to do due diligence on a $250 million deal as on a $25 million deal, so many firms would rather skip the small stuff.

The hype created skepticism and a backlash. But impact investing is now entering the mainstream. An older generation used their (rigorous) business mind in one setting and then their (often sloppy) charity mind in another. Today more people want to blend these minds. Typically a big client, or a young heir, will go to his or her investments adviser and say, “I want some socially useful investments in my portfolio.” If the adviser has nothing on offer, the client leaves the firm.

New impact funds are being born. In a low-interest-rate era, they can offer comparable returns. The Obama administration has been aggressively supportive. Social stock exchanges are being founded. The big players like Goldman Sachs and Credit Suisse are now in the field.

I recently sat in a beautiful New York meeting room with a nicely and formally dressed banker, Andy Sieg, as he discussed the impact fund he’s helping to create at Merrill Lynch. He said his associates, especially his young associates, were extremely eager to work on the project. People are eager to have this kind of impact.

Impact investing is not going to replace government or be a panacea, but it’s one of a number of new tools to address social problems. If you want to leave a mark on the world but are unsure of how to do it, I’d say take a look. If you’re a high-net-worth individual (a rich person), ask your adviser to get you involved. If you’re young and searching, get some finance and operational skills and then find a way to get involved in a socially useful investment proposition. If you’ve got a business mind, there are huge opportunities to build the infrastructure (creating measuring systems, connecting investors with deals).

Someday government will get unstuck, with new programs to address this new era. But there’s no prospect of that happening soon. Right now social capitalism is a more creative and dynamic place to spend a life.

Don’t you just LOVE that little throwaway at the end?  “Someday government will get unstuck…”  Yes, Bobo, it might.  But only when the party that you shill for gets voted out of office.  I’m willing to bet it’s too late for us to hope that they’ll ever come to their senses and decide to try governing again, so the only solution is to crush them like the vermin they are.  Here’s Mr. Nocera:

So I suppose you heard about the latest e-cigarette study, the one that said that the vapors e-cigarette users inhale contain multiple forms of formaldehyde. It was much in the news last week, after its authors, five scientists from Portland State University, published a peer-reviewed letter outlining their findings in the prestigious New England Journal of Medicine.

“Before You Vape: High Levels of Formaldehyde Hidden in E-Cigs,” said the headline at NBC.com. “Can You Guess What Cancer-Causing Agent Researchers Just Found in Electronic Cigarettes?” asked The Motley Fool. “E-Cigarettes Not Safer Than Ordinary Cigarettes,” claimed the online publication Tech Times. The New England Journal of Medicine chimed in with a tweet of its own: “Chemical analysis of e-cigs’ vapor show high levels of formaldehyde,” it read. “Authors project higher cancer risk than smoking.”

The study focused on a device known as a premium vaporizer that heats a flavored liquid containing nicotine. The heat causes the liquid to turn into vapor, which the user inhales. Most of these devices also allow the user to control the voltage. These devices have become increasingly popular as a way to ingest nicotine without smoking.

In the study, the Portland State scientists ran the device at both a low voltage and a high voltage. At the low voltage, they did not detect formaldehyde. But at the high voltage, they found some. Formaldehyde is, indeed, a known carcinogen, which also exists, among hundreds of other toxic chemicals and dozens of cancer-causing agents, in combustible cigarettes. The authors concluded that someone who was a heavy user of a vaporizer at the high voltage was five to 15 times more likely to get cancer than a longtime smoker. Or so they seemed to say.

There is not much doubt that studies like this have an impact on the public perception of e-cigarettes. Even though cigarettes result in 480,000 American deaths each year — and even though it is the tobacco, not the nicotine, that kills them — many in the public health community treat e-cigarettes as every bit as evil. Every dollop of news suggesting that vaping is bad for your health, much of which has been overblown, is irrationally embraced  by anti-tobacco activists. One result is that, whereas 84 percent of current smokers thought e-cigarettes were safer than ordinary cigarettes in 2010, that number had dropped to 65 percent by 2013.

Worse, close to a third of the people who had abandoned e-cigarettes and returned to smoking did so because they were worried about the health effects of vaping, according to a study published last year in the journal Nicotine & Tobacco Research.

The Portland State study fits right into this dynamic. It is, on the one hand, factually true that vaping at an extremely high voltage will cause formaldehyde-releasing agents to develop.

But this conclusion is highly misleading. People don’t vape at a high voltage because it causes a horrible taste — “a burning taste that occurs from overheating the liquid,” wrote Konstantinos Farsalinos, a Greek scientist and vaping expert, in an email to me. Farsalinos has done human studies of vaping and discovered that above a certain voltage — lower than the high voltage test on the Portland State study — people simply couldn’t inhale; the taste was unbearable.

Indeed, the study actually conveys good news. When used at normal voltage, vaping does not produce formaldehyde! “Rather than scaring people about the dangers of vaping and alarming them to the ‘fact’ that vaping raises their cancer risk above that of smoking, we should instead be regulating the voltage and temperature conditions of electronic cigarettes so that the problem of formaldehyde contamination is completely avoided,” wrote Michael Siegel, a professor of public health at Boston University, on his blog. But given the way the Portland State authors characterized their research, it’s no surprise that headline writers took away a different message.

When I spoke to David Peyton, one of the study’s authors, he insisted that the study had been mischaracterized. All it was meant to do, he said, was compare the levels of formaldehyde in e-cigarettes versus cigarettes. “It is exceedingly frustrating to me that we are being associated with saying that e-cigarettes are more dangerous than cigarettes,” he added. “That is a fact not in evidence.” Well, maybe.

When I read him the tweet from the New England Journal of Medicine — “Authors project higher cancer risk than smoking” — he sounded horrified. “I didn’t see the tweet,” he said. “I regret that. That is not my opinion.”

“There is a lot we don’t yet know about e-cigarettes,” said Peyton toward the end of our conversation. He is right about that; e-cigarettes are still so new that they need to be studied carefully. And he and his co-authors are planning further studies. Perhaps the next time, they will produce something that doesn’t serve mainly as a scare tactic to keep smokers away from e-cigarettes.


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