Words mean something

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David Brooks believes that they do. I’m not so sure, but am open to suggestions.

Some time ago I heard an elected official state in a public meeting that “words mean something.” I don’t recall the context, but I thought I’d have a little fun with it. I happened to work at the place at which the meeting was held, so I found a picture of a cow then drew a rope around the cow’s neck with a sign hanging below that read, “I’m a horse.” I captioned the makeshift cartoon, “Words mean something,” and pinned it on a board in my office. It must have been a very private joke, as no one who saw the picture offered any reaction.

Back to Mr. Brooks. He writes:

People see patterns they already believe in. Maybe I’ve done that here. But these gradual shifts in language reflect tectonic shifts in culture. We write less about community bonds and obligations because they’re less central to our lives.

In the documentary Manufacturing Consent, based on a book of the same title by Noam Chomsky and Edward S. Herman, we’re shown the side of an apartment building with windows open to the world. The viewer sees the occupants planted in front of their television sets watching a program. Each is alone, disconnected from neighbors, save for the possibility that they might be watching the same program at the same time.*

Chomsky and Herman suggest that such atomization is deliberate, an attempt by corporations, mostly, to ensure that we are consumers rather than citizens. Our consent to the status quo and the powers that be is being manufactured through the media, especially television, but also via mass culture. Besides, how much easier it is to plop oneself down before the tube to watch anything, than it is to organize a bunch of people for political ends, people that we couldn’t possibly know, since we’re either working at a boring job or consuming alone.

David Brooks cites the results of Google searches of words. Increasingly, terms used to connote community fall in usage against those about the individual and preferences (and the two combine within a market economy). He writes:

So the story I’d like to tell is this: Over the past half-century, society has become more individualistic. As it has become more individualistic, it has also become less morally aware, because social and moral fabrics are inextricably linked. The atomization and demoralization of society have led to certain forms of social breakdown, which government has tried to address, sometimes successfully and often impotently.

Is Brooks channeling Chomsky? I should think not, even if they’re arguing similar points. For example, I would not expect Brooks to advocate political resistance, to urge his readers to engage in mass protests, as Chomsky has done; he, himself, spent time in jail for expressing his views. I find it difficult to imagine Brooks behind bars following an arrest for demonstrating outside the White House or the headquarters of General Electric. Yet, both Chomsky and Brooks offer the same diagnosis of society: we are “bowling alone,” as Harvard professor Robert Putnam argued.

Where Brooks is going with his words is to talk about societal breakdown, beginning with the loss of virtue, a recurring theme of his columns. Chomksy and Herman fault atomization for frustrating what would otherwise be a more just and peaceful society determined by the people acting voluntarily. Herman and Chomsky are not about to bang us over the head with morality, as Brooks is wont to do.

Where I get suspicious is that in Brooks’s ideal world, more of us would be “humble,” “helpful,” “considerate,” and “disciplined.” How to get there? If words truly meant something, then merely uttering such expressions would transform us into a “kinder, gentler nation.”

Bumper stickers, anyone?

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*  Full disclosure: I’m sitting alone on my butt writing this stuff in front of a computer monitor. But I’m not wearing a tag that says, “I’m Noam.”

 

Looking for magic

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On a deep fly out to left field by Cleveland slugger Mark Reynolds, who’s second on the home run leader board with a dozen, Mariners announcer Mike Blowers said that Reynolds had missed a four-bagger by a single “grain” of the bat. How apt, as Seattle lost four straight to the Indians. With one exception, the M’s could have won three, all of which they lost with walk-off hits. The “game of inches” cursed and spit on Seattle in Cleveland.

The Mariners had won or tied six consecutive series until that fateful trip. In so doing, the baseball gods nodded in their favor, allowing the borderline pitch to be called a third strike, or a dribbler to slip under the glove of a lunging fielder, or the line drive to strike just inside the chalk. That’s baseball, and the season is long. What the gods give they can surely take away.

At the 30,000-foot level we observe trends and patterns. The fan in us is desperate to see signs of improvement. But we’ve been there and done that, each season’s promises sliding into a hellish pit by July, if not sooner. We live a collective insanity, expecting different results from the same players and management. Throughout the ordeal we’re treated to bromides, the favorite among them being “we’re rebuilding” and “we’ve got prospects.”

Those prospects, to our constant chagrin, rarely produce. We become inured to their mediocrity before they’re suddenly dispatched to other environs, where, more often than not, they just as suddenly flourish. That potential we had heard so much about is unlocked, as if by magic, under the careful, competent tutelage of a coach who knows better.

I do not know better, but I think I do. So I will imagine that I am that magical coach for the Mariners. Let me begin.

Michael Saunders: Such natural gifts, beginning with height and speed, a rare combination. His problem, in my humble opinion, is one shared by his fellow minions of mediocrity: it’s between the ears. In Saunders’s case we have the challenge of putting lumber to leather. He is earnest, to be sure. Just watch him grind the bat between his clenched mutts as he steps into the box, all business. He’s wound tighter than a 3,000-year-old mummy. I would sprinkle magic dust over Saunders to get him to relax. Then I would make him forget the entire right side of the diamond; concentrate only on the middle and left. Stride toward the ball and not toward first.

Dustin Ackley: No one was more heralded upon his arrival than the M’s second baseman. He tore up college baseball, but where to put him on defense? He’d played the outfield and first base. But his arm is the proverbial wet noodle, so while he might catch a fly ball, it would take several relays to return the ball to the infield. Gosh, we’ve got the big lug at first already, Justin Smoak—another prospect, still. As it happens, Ackley can catch grounders. Each toss to first, however, is an event unto itself. The ball leaves his hand like a wounded bird. Will it arrive on time to nail the runner? Stay tuned. Throw the damn ball, Ackley! Ah, but once again we have a mental defect. Although he appears to be more relaxed than Saunders at the plate, he makes the same mistakes, pulling away from the pitch from an already wide-open stance, losing all power in the process. Note how he does not follow the pitch into the catcher’s glove. (I know, it’s not physically possible to do this, yet one should at least try.) Too often the ball sails across the plate, suggesting that Ackley’s knowledge of his own strike zone needs repair. I tell Ackley, like Saunders, to forget about the right side. Hit left. Hit left.

Jesus Montero: Another prospect, we were told, a raw catcher coming over from the Yankees in exchange for Michael Piñeda, a huge pitcher with much promise. Montero needed work behind the plate. Lots of it, it appears. He could hit, though. Right? Not so fast. Go ahead, throw him a slider, any location will do. He thinks it’s a fastball, every time. Swing and a miss. Repeat. He looks silly.

Brendan Ryan: What a glove. Seriously. A different story at the plate, again. He must put something sweet and delicious on his left shoulder, because he’s always nipping at it with his mouth. What’s that all about? I have a question: Why do players who have difficulty making contact swing so darn hard?  Increasing one’s bat speed seems pointless if one can’t hit the ball in the first place. Like Saunders and Ackley, Ryan doesn’t know that there is a vast opposite space. Go right, young man.

The pitchers: King and Kuma are set. But that’s only two, and the others’ performances have been uneven at best. If I were coaching young pitchers I’d obsess about two behaviors: (1) whenever a pitcher throws the ball, even if just playing catch, aim for and hit the glove, nothing aimless; and (2) complete each delivery with both feet square to the plate. Pitchers at all levels today fail most of the time to locate their pitches. The catcher calls the pitch then moves into position, indicating where he wants the ball to land. But it’s anyone’s guess where the pitch winds up. Instead of low and outside, the ball sails over the batter’s head. Even if the pitcher succeeds in carrying out his catcher’s wishes, should the batter hit one back up the middle, the pitcher is as likely to be facing first (if a right-hander) as he is home. He’s completely defenseless, and he’s less than 60 feet away!

This rant seems headed in one direction. The Mariners need to hire Tinker Bell.

Catholic crap

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Two items in today’s papers involving the Catholic Church. Both expose the stubbornness, insensitivity, and hypocrisy of the Vatican and its doctrines.

One reports that UW Medicine has signed an agreement with PeaceHealth, a Catholic health care system. The article quotes a lawyer with the American Civil Liberties Union:

“We are troubled and concerned because we have yet to see the final details,” said Sarah Dunne, legal director for the ACLU of Washington. “What we don’t know is whether this is a Trojan horse. … They’re saying they’re independent organizations, but we’ve seen this before, and lo and behold, once they’re connected, one takes over the other.”

There is much evidence to support her suspicion, including a previous agreement between Swedish Medical Center and Providence Health and Services. Spokespersons at the time gave assurances that the two entities would remain separate and independent, just as the statement on the PeaceHealth-UW Medicine arrangement asserted. Empty words, it seems, as Swedish stopped performing abortions, no doubt in deference to Catholic teachings.

And what about those teachings? Non-Catholics likely know little of the church’s long history of social justice doctrines. I can think of a couple of reasons for that. First, the church has a hypocrisy problem: it doesn’t practice what it preaches. Second, its dogmatic proscriptions of anything sexual, and reporting of same, clearly overwhelm the former.

Which brings me to the second article, this one an op-ed by the New York Times‘s Frank Bruni. He writes about the fate of one high school physical education teacher who had the misfortune of teaching at a Catholic institution and suffering the sudden loss of her mother. Though a Methodist and married to her husband at the time of her hiring, Carla Hale eventually drifted into the arms of another woman.

Rather suddenly, her mother died, and an hour afterward, she and her brother numbly went through the paces of a standard obituary, listing survivors. Her brother included his wife. So Carla included her partner, Julie, whom her mother had known well and loved. Leaving Julie out would have been unthinkable, though Carla didn’t really think it through at the time. Her grief was still raw.

One of those goody-two-shoes parishioners caught the reference while reading the obituaries then wrote an anonymous letter (such fortitude) to the school and diocese. You can guess what happened.

“A lot of people want me to be bitter and go after the Catholic Church,” [Hale] said, adding that others want to cast her as a lesbian heroine. She just wants her job back, a recognition, she said, “that I’m a moral individual who happens to be gay.”

By the way, I was born and raised Catholic, discovering only much later in life that I was the product of two homophobes and closet racists. I can be accused of adopting a cafeteria approach to church dogma, embracing the social gospel while completely ignoring all that stuff about sex. But the church leaders, such as they are, couldn’t let that go. By their words and actions they demonstrate a ready willingness to throw the gospel under the bus as they pursue a sick agenda dedicated to the proposition that male clergy can engage in protected perversions but the Rest of Us must be pure to god, or some such crap.

“Unbelievable chutzpah”

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That’s an academic describing Apple’s tax-avoidance schemes, as featured in this afternoon’s New York Times.

Because of these strategies, tax experts say, the government is forced to rely more and heavily on payroll taxes and individual income taxes to finance its operations. For example, in 2011, individual income taxes contributed $1.1 trillion to federal coffers, while corporate taxes added up to $181 billion.

Here’s a chart showing corporate tax receipts as a percentage of total federal taxes:

corporate taxes and total taxes

 

Perhaps the real genius of Steve Jobs was outsourcing capital. We could use that at home right about now.

Yes we can

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Remember that line? No matter. Those who actually can accomplish something that affects the Rest of Us refuse to act.

Matthew Yglesias draws parallels between the 1970s and our current situation. As Jimmy Carter’s presidency ended in “stagflation,” high unemployment and high inflation, Ronald Reagan assumed office proclaiming,  ”It’s morning (again) in America.” Running the Federal Reserve at the time was Paul Volcker, whose term straddled both administrations. He sought to curb the rise in escalating prices by raising the federal funds rate, which reached a peak of 20 percent in June 1981.

We should appreciate why inflation can be scary. Suppose we can buy an item for $100 today. If the inflation rate were 10 percent a year, then that same item would cost $110 the following year. If we assume further that the inflation rate remains at 10 percent a year for 30 straight years, we have this:

Inflation at 10 percent

 

Those with assets, say stocks and bonds, like to see returns on those investments, say 10 percent a year. So the chart of asset appreciation would look the same, with an initial investment of $100 in the first year rising to $1,586 in the 30th year. But if inflation were at the same rate as the annual interest on the investment, then the real value of the asset doesn’t rise. So, rich people with lots of their money tied up in financial instruments loathe inflation.

We can see what Volcker did from 1979 through 1981 in the following chart:

federal funds rate

That had the effect of also raising the unemployment rate. But the resultant pain and suffering was deemed necessary to right the economic ship. The silver lining was that the torture proved brief.

unemployment rate civilian


Yglesias:

When Paul Volcker came around and accepted responsibility for the problem, the adjustment turned out to be quite painful. But it wasn’t logistically difficult to pull off, it didn’t take very long, and all things considered we would have been a lot better off deflating in 1973-75 than waiting all the way until 1980-82.

We’re talking about different problems that need to be solved with different policies. But in both cases, the first step to fixing policy is for the people with the ability to change direction to admit that they have the power to make change happen. In both the United States and Europe, central bankers need to move past claims about their own impotence and accept responsibility while public figures need to move beyond “now more than ever” thinking and address the outstanding problem of the day.

In his post, Yglesias cites a December 2012 paper by Christina and David Romer, both economists at the University of California at Berkeley. They conclude that pessimism about the Federal Reserve’s ability to address problems “has been a more important source of policy errors and poor outcomes over the history of the Federal Reserve” than an overly optimistic view. Of the latter, the Romers have in mind the “hubris” of the 1960s, during which economists and a series of administration officials believed that they could maintain an optimal balance between inflation and unemployment through monetary fine tuning. They write:

This belief led them [the central bankers] to pursue highly expansionary policy, starting the economy down the path to the inflation of the 1970s.

Today’s economic problem is different than the stagflation of the late 70s. Indeed, inflation remains very low while the unemployment rate stays miserably high. Volcker could halt inflation by raising interest rates, which made credit tight, putting a damper on the economy. So what to do?

We know that the central bankers have sharply increased the monetary base.

monetary base

 

And we know that the federal funds rate is near zero, as the chart near the top makes clear. Perhaps the solution to our current predicament must be found outside the Federal Reserve. As Fed chair Ben Bernanke said last September, as quoted by the Romers, “We’re looking for policy-makers in other areas to do their part.”

To whom was Bernanke referring? That would be the U.S. Congress. What might it do that the Fed cannot?

Paul Krugman, for one, believes that the federal government must spend a lot more money to stoke aggregate demand. He is joined by Brad DeLong of Berkeley, Dean Baker of the Center for Economic Policy and Research, the Romers, and a host of other economists, including former Reagan economic advisor Bruce Bartlett, who now writes an occasional column for the New York Times.

But congressional Republicans, certainly, resist fiscal expansion. They embrace fiscal “consolidation,” otherwise known as austerity. The nation is, of course, living austerity as I write, with all levels of government spending down, in some cases significantly. As Keynesians predicted, such belt-tightening exacerbates the employment problem, which, in turn, constrains consumer purchasing, the largest component of the economy by far. Since the private sector withholds investment because of so much uncertainty on returns, the only institution available is the federal government; state and local governments typically must balance their budgets, and with declining tax receipts, that means spending cuts.

I know, I’ve said this before in numerous posts. That Congress refuses to act suggests either a misunderstanding of macroeconomics or a deliberate strategy of making life worse for the Rest of Us. Take your pick. You’ll be right in any case.

The next big thing: a combination

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Bloomberg News surveyed technology investors to discover that over 70 percent of them believe that Apple has lost its innovative edge, either permanently (28 percent) or temporarily (43 percent). It would seem that this perception correlates with the company’s stock decline.

So, this got me wondering. What would Apple have to produce to rekindle investor enthusiasm? What could be its next big thing?

Steve Jobs allowed that one reason for his success was a penchant for saying no. His goal, apparently, was to create a unique combination of hardware and software that “just worked,” and getting complicated things to work well together meant sticking to the principle that less is more.

The brief histories of the iPhone and iPad suggest an initial “revolution” followed by continuous improvement and refinement—as opposed to copy first then offer feature after feature with the hope that something sticks with consumers. Each iteration of Apple products is superior to its predecessor. Operations become faster and more elegant. Quality reigns supreme. And this strategy has been handsomely rewarded in the form of outrageous profits. People are almost fanatically anxious to pay Apple a sizable premium for the devices Jobs wrought.

There is much speculation, fueled to a large extent by Jobs himself and now by his successor, Tim Cook, that Apple has several major products in the pipeline. What could these be, and could they be as revolutionary as the iPhone and iPad?

I suspect that Apple’s “next big thing” will be a new combination of existing concepts and technologies, designed with exquisite attention to detail and ease of use. That’s the Apple way, one that investors have yet to figure out, it seems, but that millions of consumers recognize. Also, remember that many of these same investors went apeshit over mortgage-backed securities, sub-prime loans, and financial derivatives that no one could understand.

Easy money

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The Federal Reserve embarked on a deliberate policy to expand the monetary base and to keep interest rates low. It has done so mostly through what is known as “quantitative easing.” In the popular vernacular, the FED is “printing money.”

monetary base as of May 2013

Conservatives have warned repeatedly that “easy money” will cause prices to rise. But inflation has remained low, too low as far as Fed chairman Bernanke is concerned.

core inflation may 2013

Meanwhile, unemployment rates remain higher than normal and wages stagnate, indications that the recovery, such as it is, has not benefited the Rest of Us.

unemployment rate through May 2013

Corporate profits continue to soar, despite the anemic economy.

corporate after tax profits to May 2013

If Ben Bernanke could wave a magic wand he’d compel Congress to spend more money, a lot more, on public goods and services, since the private sector has been reluctant to expand production given persistent uncertainty about returns. Bernanke and another bearded Princeton economist believe that inadequate demand is the problem. The solution is to give money to a lot more people so that they will spend it. Short of simply doling out cash, the acceptable method is to put people to work building things we need.

This Congress, however, is loathe to follow such prescriptions. As Speaker Boehner proclaims, “We’ve got a spending problem.” Thus, his solution is to effectively reduce aggregate demand, which would only make matters worse. Unfortunately, that may very well be his intention, as cynical as that seems, so he can exploit dismal economic news for political gain.

So far, Boehner and his band of loonies have prevailed in preventing fiscal expansion. Indeed, government budgets have shrunk.

total government spending gdp

The austerians, against a lousy track record, insist that we continue to tighten our fiscal belts, and as long as there are Republicans in government, austerity will be practiced. Pain and suffering be damned.

So far, Bernanke has not been cowed by protest. He will likely continue to pump money into the economy, though he’d love to get his hands on that magic wand.