Apr 28, 2013

My Next Climate Video Unveiled

This time I narrated it myself. Probably again quite amateurish, but I think it came out reasonably well considering my lack of experience. Check it out:

Comments or suggestions appreciated, though please remember I'm still a noob at this stuff.

Apr 17, 2013

Middlemarch Finished

This was a couple weeks ago, so much that I'm already almost through my next audiobook (Anthony Beevor's Second World War), but I do want to note that Middlemarch was a doozy. So, so good. I'm certain that I can't have had any thoughts that haven't been already been had better and sharper, so I won't bother with more than a few disconnected points.

1) As I just said, it was stupendously good. The only thing I can think to compare it to is War and Peace. Slightly less epic scale, but balanced by more penetrating psychological insight, more fully realized characters, better plotting, and less goofy historical theorizing. This is a work of extreme skill and brilliance.

2) That said, there were slightly too many coincidences driving the plot for my taste. The very last one, where one character walks in on two others having a conversation and comes away with what seemed like an unjustified idea of what was happening, grated quite a bit. (I suspect this is just how tastes have evolved, and the reactions made a lot more sense in the 19th century.)

3) Oddly, I was often reminded of Stephen King. Now, I rather enjoy the guy, but I wouldn't put him in the same rank as Eliot and Tolstoy. It was more a matter of technique, how when some great swallow of plot was coming down, the action would slow to a crawl, and Eliot would use the tension of wanting to know what was going to happen to sneak in a truckload of psychological insight. King, by contrast, uses the slowness mainly just to heighten the suspense. If anyone but a master had tried Eliot's method, it would come off as pretentious and clunky.

4) Things sure have changed when it comes to gender relations. Half or more of the emotional problems faced by the characters in Middlemarch come from people tripping headlong into marriage without really knowing their future spouse at all. We surely have a long ways to go to reach gender equality, but this at least strikes me as an area where there has been genuine progress.

5) A couple of great quotes:
-And, of course men know best about everything, except what women know better.
-The difficult task of knowing another soul is not for young gentlemen whose consciousness is chiefly made up of their own wishes.
-For pain must enter into its glorified life of memory before it can turn into compassion.
-Blameless people are always the most exasperating.
-It is an uneasy lot at best, to be what we call highly taught and yet not to enjoy: to be present at this great spectacle of life and never to be liberated from a small hungry shivering self--never to be fully possessed by the glory we behold, never to have our consciousness rapturously transformed into the vividness of a thought, the ardor of a passion, the energy of an action, but always to be scholarly and uninspired, ambitious and timid, scrupulous and dim-sighted.
Anyway, whatever, it's a classic and I have nothing really to add. You should read it.

Apr 9, 2013

Book Review: "The Alchemists," by Neil Irwin

A mass unemployment crisis stretching across most of the developed world, reaching Great Depression levels of misery in Greece and Spain, would likely be thought strange by an economist visitor from 2004. After all, all the top central bankers of the world were back then attending self-congratulatory conferences about the “Great Moderation,” dedicated to explaining how they had this economy stuff licked. And while that is easy to mock in hindsight, it wasn’t an insane belief! After all, after the Great Depression economists developed a widely-accepted theoretical framework for depressions; everyone from Milton Friedman to Paul Krugman agreed that while they might have many disagreements on things like taxation or trade policy, depressions at least were a solved problem.

For especially in modern service-based economies, money goes in circles: my spending is your income, and vice versa. To drastically oversimplify, if we think of a depression as a situation where people develop a self-defeating urge to hoard financial assets, thereby just reducing everyone’s income, then central banks (and governments) have many tools to combat this problem, basically by pumping money into the economy until this demand for money is sated. Thus people can resume spending at previous levels. Indeed, the Great Recession has changed almost none of this analysis among economists, who have mostly just dusted off the old theories developed after the Great Depression.

In other words, the developed world’s top central bankers (Ben Bernanke, the head of the US Federal Reserve, Mervyn King, the head of the Bank of England, and Jean-Claude Trichet, the head of the ECB until 2011, replaced by Mario Draghi) have been an embarrassment to the profession of late. In particular, the European Central Bank—which has, let’s remember, more power than any other over the state of the Eurozone economy—is a failure of world-historical proportions.

So what happened? Is this an institutional problem? A failure of politics? Or perhaps all our central bankers caught a case of the galloping stupid?

A great deal of evidence on this question can be found in the new book from Washington Post reporter Neil Irwin called The Alchemists: Three Central Bankers and a World on Fire. Unfortunately Irwin does not ask the question itself. It’s a shame, because the book has quite an impressive body of reporting behind it that, properly framed, could have served as a preliminary warning testimonial for future policymakers. Instead we have an account that is too sympathetic to the central bankers’ perspective.

However, I still recommend the book; there is a great deal of worthy material in The Alchemists. (The very act of writing a popular book about central banking is an act of high ambition that should be commended.) It has a lively, quick history of central banking as a profession, what lessons the profession thought it learned from previous financial crises, and the best reporting I’ve read on how and why central bankers acted during and after the great crash of 2008. I was particularly fascinated by the account of exactly what happens when the Federal Reserve Board agrees on another round of monetary stimulus and passes those orders on to the actual bond purchasers.

There is a tension between this kind of insider reporting, which will tend to justify the decisions of the principals, and big-picture analysis that explains the situation as a whole. Irwin successfully threads this needle when it comes to Ben Bernanke and the UK's Mervyn King, particularly when it comes to King's deeply irresponsible meddling in British politics. He assured the Conservative government-in-waiting that he could offset any damaging macroeconomic effects of tax hikes and spending cuts. He in fact failed at this task, as this austerity package pushed the British economy into recession despite some fairly aggressive actions on his part.

But the thread breaks when it comes to the actions of the "troika," (the ECB, the IMF, and the European Commission) starting in 2011, when they stopped dealing with the fallout of the 2008-9 crisis and began actively making things worse, mostly by forcing austerity on the weak countries of the European periphery.

As Irwin’s (again quite impressive) reporting shows, this fixation on austerity is largely the result of the internal politics of the ECB and the inflation paranoia that suffuses the entire European elite, especially the Germans. Trichet had basically the right idea on sovereign debt, recognizing that Greece’s debt burden was simply unsustainable and would require an open-ended bailout. Forcing bondholders to accept haircuts (i.e., partial debt cancellations) would spark a self-fulfilling panic as everyone fled the Greek bond market, and they would be forced to default and leave the Eurozone. Furthermore, if this came to pass, then the much, much larger Spain and Italy would likely be next in line, and the Euro would fall to bits.

But the German polity (and the French, to a lesser extent), who hold the whip hand on all things economic in the Eurozone, constructed a moralistic narrative that they were paying for the profligacy of their southern neighbors. This made a toxic combination with the fact that Trichet, along with almost the entire remainder of the European elite, had an obsession with fiscal balance and structural labor market reforms. Thus as a condition for a bailout Trichet imposed vicious austerity measures to convince the Germans that Greeks were "reforming" their economy (and being sufficiently punished for their misdeeds), which led directly to catastrophic mass unemployment. A similar fate quickly followed for Spain and Portugal.

In other words, the price the German elite—the seat of Eurozone power—demands for saving their pan-European currency is the devastation of about half of its population.

This is an extreme description, and not the words Irwin would use, but this is a world-historical crisis we are witnessing. The way in which the monetary authorities of the Eurozone have trampled over democratic legitimacy, for instance, is almost impossible to overstate. When the Italian government balked at harsh conditions for a rescue package, the technocracy executed a coup d’etat and replaced Prime Minister Berlusconi with the more pliable Mario Monti. (The recent electoral backlash from the Italian electorate is hardly surprising.)


This political incentive structure of central banks is, I think, is the answer to the question I posed above. The Federal Reserve is a complex bundle of anachronisms, with many of the key position filled by financial industry elites, but it is still the most democratically accountable of all the major central banks, and so it has acted most aggressively to fix America’s unemployment crisis.

The underlying problem with the ECB, by contrast, is the institutional structures of the Eurozone itself. First, there is no common fiscal union as there is in the United States. (As some economist wags have pointed out, the first rule of being in a common currency without fiscal union is: don’t join a common currency without fiscal union.) More importantly, there is no accountability to most of the populations affected by ECB policies. There is no reckoning for an ECB head that literally destroys economies under his supervision. But financial industry elites can and do apply pressure, so the ECB moved heaven and earth to rescue its financial sector.

The way I read The Alchemists I’d wager the Eurozone institutions simply cannot choke down the necessary policies to fix up the currency area question in anything like a sustainable fashion. So far they have stumbled into about the worst of all possible outcomes—not failing so bad that the shared currency comes apart, which would be disastrous but hold the promise of eventual recovery, but just bad enough to create permanent depression conditions across much of Europe.

Furthermore things are still getting worse—overall, the Eurozone economy as a whole has not grown since the third quarter of 2011, inflation is consistently below target, and total unemployment is now at 11.8 percent and rising—and the troika continues to dawdle. Even Germany’s economy contracted slightly in the last quarter of 2012.

If the Eurozone is unsalvageable, then it is of critical importance for the lives of tens of millions of people that it be unwound as soon as possible in as orderly a fashion as possible. Irwin simply doesn’t consider this possibility, and it’s a shame, because I’m still wondering what he’d think about it.

Apr 7, 2013

Sunday Picnic

In Meridian Park here in DC. Bonus points if you can spot the wonky Joan of Arc statue.

Apr 6, 2013

Apr 1, 2013

The Devastating, Subversive Wit of George Eliot

I don't know that much about the historical context of Middlemarch, but I know it was published well before the women's rights revolution had got up much steam, and I reckon it's fair to say she had some
revolutionary ideas swirling beneath all that glorious insight. Dig this little jab:
Dorothea had gathered emotion as she went on, and had forgotten everything except the relief of pouring forth her feelings, unchecked: an experience once habitual with her, but hardly ever present since her marriage, which had been a perpetual struggle of energy with fear. For the moment, Will's admiration was accompanied with a chilling sense of remoteness. A man is seldom ashamed of feeling that he cannot love a woman so well when he sees a certain greatness in her: nature having intended greatness for men. But nature has sometimes made sad oversights in carrying out her intention; as in the case of good Mr. Brooke, whose masculine consciousness was at this moment in rather a stammering condition under the eloquence of his niece. He could not immediately find any other mode of expressing himself than that of rising, fixing his eye-glass, and fingering the papers before him.
My audiobook version (got from Audible, exquisitely performed by Juliet Stevenson) had me guffawing at that line. "Nature has sometimes made sad oversights in carrying out her intention" is so arch, so elegant, and so close to plausibly deniable to be all the more crushing. I'm reminded of this classic Ta-Nehisi post:
When I was young my father would read my work and often would come away pleased. But equally as often he'd tell me that I was using the battle-axe, when I should be using the stiletto. "The real master," he'd say. "Can cut somebody up and the cat won't even know he's been cut. He won't even see the blade."
After an hour of that kind of restrained, deadly elegance while I'm walking to work, it is a little depressing to head back into the bloggy tirade du jour. But it's a good impetus to cut back on the blistering attacks, if only for greater effectiveness.