Martin Wolf Leaves me Confused

I've made Martin Wolf my go-to guy in troubled times, so I should bring you up to date on how he feels about the Congressional "no."  Shorter Martin: he ain't happy.  He disliked the Paulson plan, but he's sorry Congress did nothing.  As to the future (link)

What now? The first effort must be to find a plan that Congress can pass. It is quite possible to find one that protects the taxpayers’ interest better, by insisting on full reimbursement, after assisted companies return to health. Buying preference shares, as Warren Buffett did in Goldman Sachs, would be a good way to do this.

Second, it seems likely that a number of significant financial institutions will find it hard to fund themselves in coming days, as their share prices weaken and interbank lending is frozen. Central banks must make every imaginable effort – and a few unimaginable ones – to make sure liquidity needs are fully met during this period. The Federal Reserve may find itself having to rescue additional institutions. So, alas, be it.

Third, Europeans (among whom I include the British) must recognise they are in the same boat. In times of such peril, even a small cut in interest rates by the European Central Bank and the Bank of England would send a helpful signal. It is now most unlikely to prove inflationary.

Appraisal: Much as I admire Martin Wolf, I confess I am a little lost right now. Seems to me his position is that Martin is saying the Paulson is wrong because what we have is a problem in liquidity--and Paulson, even as revised, does little or nothing for liquidity.

Okay so far. But if this is the case, why does he favor Paulson as the best bad alternative. Specifically, now that the Fed started pumping money into the system, are we any closer to solving the liquidity problem? And if so, do we need Paulson at all?

Sarah and the Constitution

Much kerfuffle over how Sarah (it is said) couldn't name any Supreme Court case except Roe v Wade. Oh, give her a break, some say; con law is for wonks. Experienced pols may know how to dance around the question, but not many of them could do much better.

I've got some sympathy for that. I've got smart, cultivated friends who probably would have a tough time Roe. And as a sometimes bankruptcy lawyer, I have to accept the fact that it is not a black mark if you can't immediately conjure up the holding in Shapiro v Wilgus or Case v. Los Angeles Lumber Products.

Yet I guess I am a little surprised that she wasn't able to come up with the names of other abortion cases--Webster v. Reproductive Health Service, or Planned Parenthood v. Casey Or other cases on issues that are hot-button with her core constituency on the politico-religious right--Lemon v. Kurzman, maybe, or Bowers v. Hardwick.

I think there may be a non-snark insight here. That would be: my guess is that Sarah's actual commitment to these hot-button issues isn't as deep as it appears on the campaign trail. They're raw meat for the faithful, but when it comes to governing, she has other priorities. You'd certainly expect Hillary, by contrast, to be able to brief on the question of whether and to what extent Casey restricts Roe, or whether Bowers has in fact been completely overruled. She cares about the nuts and bolts of these issues to a degree that Sarah probably does not.

This is not necessarily a slam against Sarah, or an endorsement of Hillary. Excessive wonkiness has been the ruin of many a good politician, and most of the best have been pretty shaky on the details. Still, it might have been nice if Sarah could at least been able to rattle off a few of the high points--Brown v. Board of Education, maybe, or Dred Scott. This is, after all, a person who by her own account was listening to Joe Biden speeches in the second grade. If she is still searching for backup, she might want to check here.

How Santandar Got it Right

Santandar, the Spanish bank seems to be surviving the current banking crisis, and indeed thriving (lately it picked up some of the juciest parts of Bradford & Bingley). How and why? Gillian Tett in the FT elaborates:Link.

One key factor protecting Santander from some of the global woes is the tough approach that the Spanish central bank has taken towards regulating its banks in recent years.

Earlier this decade the central bank in essence decided it disliked the idea of banks keeping vast quantities of credit assets off their balance sheets. It also quietly demanded that banks hold higher levels of reserves than international accounting laws required.

Consequently, it furtively “gold plated” – or rewrote – European Union rules to discourage Spanish banks from creating entities such as structured investment vehicles (SIVs). And when banks such as Santander embarked on an acquisition spree in Mexico, the central bank reined them back.

When the central bank initially took this stance, it looked pretty odd. After all, in the early years of this decade institutions such as the Federal Reserve were convinced that banks could hold less capital than before because innovation had made them less exposed to credit risk.

Waldman on Taking Equity

Steve Waldman at Interfluidity is becoming a must-read, because he addresses the questions to which I want answers. Here he tackles the matter of "taking equity" (link):

Unfortunately, the private sector approach to reorganizing and recapitalizing banks, forced debt-to-equity conversions, is too harsh on creditors. Yes, it is the free-market solution, and it's what we normally do (via the bankruptcy process) when firms are viable but undercapitalized. But, we are afraid of hurting lenders at a moment where credit markets are wobbly and a strike by lenders could be catastrophic. Okay.

Maybe these are two great tastes that taste great together. What if both the state and junior creditors could took equity stakes in reorganized firms, fifty-fifty. The former creditors would run the place without government interference, isolating management from politics and diminishing concerns of creeping socialism. Taxpayers would enjoy the upside as passive investors in ordinary, profit-maximizing businesses, and would buy shares at a bargain price (book value after very aggressive write-downs have been taken). Some creditors would still have to endure the indignity of being converted to equity, but the amount of debt that would have to convert would be cut in half (approximately), giving converted debtors a lot of capitalization bang for their buck. Junior creditors would go from owning very dodgy debt to relatively safe shares, and more senior creditors would see the value of their positions spike and stabilize and solvency concerns abated.

Well, maybe and maybe not. But it's the kind of idea that ought to be in play.

Reality Check

My friend Steve tells of a lady who has been saying she had enough money to live to 90. She looked at her latest statement and said:

Omigawd, I'm going to have to die at 86!

Back to the Drawing Board

The non-lunatic Martin Wolf in the Financial Times was saying last week that the Paulson plan was not a good idea. Might be worthwhile to recall his earlier shot:

The fundamental problem with the Paulson scheme, as proposed, is then that it is neither a necessary nor an efficient solution. It is not necessary, because the Federal Reserve is able to manage illiquidity through its many lender-of-last resort operations. It is not efficient, because it can only deal with insolvency by buying bad assets at far above their true value, thereby guaranteeing big losses for taxpayers and providing an open-ended bail-out to the most irresponsible investors.

Furthermore, these assets are illiquid precisely because they are so hard to value. The government risks finding its coffers stuffed with huge amounts of overpriced junk even if it tries not to do so. Also objectionable, though more in design than in the fundamentals, were the unchecked powers for the Treasury. Such a fund should be operated professionally, under independent oversight. Finally, if the US government is to bail out incompetent investors it should surely also provide more help to the poor and often ill-informed borrowers.

Yet, above all, a scheme for dealing with the crisis must be able to remedy the looming decapitalisation of the financial system in as targeted a manner as possible. A fascinating debate on how to do this is under way in the economists’ forum on FT.com. To the contributions, including Tuesday’s Comment page article by Dominique Strauss-Kahn, managing director of the International Monetary Fund, I would add one by Luigi Zingales of Chicago University’s graduate school of business.*

The simplest way to recapitalise institutions is by forcing them to raise equity and halt dividends. If that did not work, there could be forced conversions of debt into equity. The attraction of debt-equity swaps is that they would create losses for creditors, which are essential for the long-run health of any financial system.

The advantage of these schemes is that they would require not a penny of public money. Their drawback is that they would be disruptive and highly unpopular: banking institutions would have to be valued, whereupon undercapitalised entities would have to adopt one of the ways to improve their capital positions.

If, as seems plausible, a scheme that imposes such pain on the financial sector would be rejected out of hand, the next best alternative would be injection of preference shares by the government into decapitalised institutions, on the lines proposed by Charles Calomiris of Columbia University. This would be a bail-out, but one that constrained the behaviour of beneficiaries, not least on payment of dividends. That would make it far better than dropping benefits on the unworthy, via mass purchases of overpriced toxic paper.

What then do I conclude? Yes, there may well be a place for intervention in the market for toxic securities. But this is a costly and ineffective way of meeting today’s deepest challenge. What is needed, still more, is a clear and effective way of deleveraging and recapitalising the financial sector, ideally without using taxpayer funds. If such funds are to be used, they must also be injected in as carefully targeted and controlled a way as possible.

Link (FT September 23).

Meanwhile, Bloomberg is reporting that the Fed (following the defeat in Congress) is pumping another $630 bill into the financial system & doesn't this suggest that Martin Wolf may be (at least in part) right? I suspect that nobody has a good idea what the market may look like by the time Rosh Hashana is over.

What Ed Said

The ever-insightful Ed Rollins here.

Shorter John Boehner

When we were in the majority, we used to stuff it to you all the time. Please, please, stuff it to us now.

A World Gone Mad--House Bailout Debate Div

Liveblogging the House debate (or "debate") on the bailout bill--Steny Hoyer is invoking the ghost of Spiro Agnew.

Who's Your Daddy?

They say that the most important part of any job is figuring out who your real boss is--figuring out who has the final say over whether you live or die. For example, Donald Regan only figured out too late that the one who wore the pants in the Reagan family was Nancy.

Apparently John McCain knows who's boss.

You Can Always Tell a Yale Man (But You Can't Tell Him Much)

Kenji Yoshino, (former?) Yale law prof, on his departure for NYU:

“I’ve heard from some corners, ‘Is this the end of the golden age for Yale Law School? ..."

Link (or perhaps: "from the mirror.")

Bailout Blues

Not everybody is cheering:

I think people are severely underestimating the depths of the crisis we are in. This is not a financial crisis about banks and commercial paper. It is not about the housing market. We are in an economic crisis, because America's productive capacity is deeply out of kilter with our habits of consumption. No amount of financial legerdemain can fix that. We have to actually produce the goods and services we want to consume, or else produce current goods and services that we can trade for what we consume. Relying on the mysteries of finance to square the circle has brought us low. At best, the proposed bail-out might buy us some time to fix the underlying economics before the pain kicks in. At worst, the pain will kick in anyway, but we'll have even less flexibility than we have now to address the real problems.

Suppose we pass the "Emergency Economic Stabilization Act of 2008", and a depression comes anyway, and we cannot raise taxes (blood, turnips, all of that), and we cannot borrow from abroad (because our paymasters have tired of us). Sure, the Federal Reserve will print money, because the debt must be paid and the government must continue, and in a depression many prices will fall regardless, but commodities and imports will grow dear. We will know then that we want to build factories, for all the televisions and computers that used to be cheap from Asia, but that can no longer be bought with debauched greenbacks. But we won't have the capital.

What will we say, in those dark days, when someone comes along and blames the bankers? It was the bankers, after all, who "intermediated" our vast current account deficit, who found ways of accepting goods and producing debt despite our incapacity to repay, and who enriched themselves by doing so. And then these self-same bankers threatened us with armageddon unless we paid them hundreds of billions of dollars, back when dollars could still buy steel and cement and machinery. We paid the ransom, but the hostage died anyway. How will Secretary Paulson answer their charge?

Suddenly we will realize the cost of putting expedience before even the thinnest veneer of justice. Because in the end, Secretary Paulson will answer these charges with a locked gate and an exception to the Posse Comitatus Act. An economic depression will bring temptations to violence and radicalism. And a lot of people will look back on this decade, right up to and through the "Emergency Economic Stabilization Act of 2008", and feel with some justice that they were royally screwed.

Now, in a deep downturn, scapegoats will be found no matter what. Maybe we really have nothing to lose by passing this badly flawed proposal, since it might prevent a depression and if not we're all toast anyway. But, you know what? While we still can borrow valuable dollars, we could use that 700B to build infrastructure that might make the economic facts of a depression less severe. And, if we insisted that the mighty bankers actually fall now, actually take the hit that their own ideology demands of them, that just might blunt the sense that we are "us" and "them", rather than a nation with a common struggle, when it all hits the fan. Maybe the choice we are really making here is not about financial and monetary arcana, but a choice between civic peace and civil war.

Link.

Thus the claim by the Fed and Treasury that spending $700 billion of public money is the best way to recapitalize banks has absolutely no factual basis or justification. This way of recapitalizing financial institutions is a total rip-off that will mostly benefit – at a huge expense for the US taxpayer - the common and preferred shareholders and even unsecured creditors of the banks. Even the late addition of some warrants that the government will get in exchange of this massive injection of public money is only a cosmetic fig leaf of dubious value as the form and size of such warrants is totally vague and fuzzy.

So this rescue plan is a huge and massive bailout of the shareholders and the unsecured creditors of the financial firms (not just banks but also other non bank financial institutions); with $700 billion of taxpayer money the pockets of reckless bankers and investors have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession. Instead, the restoration of the financial health of distressed financial firms could have been achieved with a cheaper and better use of public money.

Indeed, the plan also does not address the need to recapitalize those financial institutions that are badly undercapitalized: this could have been achieved by using some of the $700 billion to inject public funds in ways other and more effective than a purchase of toxic assets: via public injections of preferred shares into these firms; via required matching injections of Tier 1 capital by current shareholders to make sure that such shareholders take first tier loss in the presence of public recapitalization; via suspension of dividends payments; via a conversion of some of the unsecured debt into equity (a debt for equity swap). All these actions would have implied a much lower fiscal costs for the government as they would have forced the shareholders and creditors of the banks to contribute to the recapitalization of the banks. So less than $700 billion of public money could have been spent if the private shareholders and creditors had been forced to contribute to the recapitalization; and whatever the size of the public contribution were to be its distribution between purchases of bad assets and more efficient and fair forms of recapitalization (preferred shares, common shares, sub debt) should have been different. For example if the private sector had done its fair matching share only $350 billion of public money could have been used; and of this $350 billion half could have taken the form of purchase of bad assets and the other half should have taken the form of injection of public capital in these financial institutions. So instead of purchasing – most likely at an excessive price - $700 billion of toxic assets the government could have achieved the same result – or a better result of recapitalizing the banks – by spending only $175 billion in the direct purchase of toxic assets. And even after the government will waste $700 billion buying toxic assets many banks that have not yet provisioned for such losses/writedowns will be even more undercapitalized than before. So this plan does not even achieve the basic objective of recapitalizing undercapitalized banks.

The Treasury plan also does not explicitly include an HOLC-style program to reduce across the board the debt burden of the distressed household sector; without such a component the debt overhang of the household sector will continue to depress consumption spending and will exacerbate the current economic recession.

Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. It is pathetic that Congress did not consult any of the many professional economists that have presented - many on the RGE Monitor Finance blog forum - alternative plans that were more fair and efficient and less costly ways to resolve this crisis. This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street. And it is a scandal that even Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners.

Link.

At this point I cannot identify a single good reason to do the bailout.

The basic argument for the bailout is that the banks are filled with so much bad debt that the banks can't trust each other to repay loans. This creates a situation in which the system of payments breaks down. That would mean that we cannot use our ATMs or credit cards or cash checks.

That is a very frightening scenario, but this is not where things end. The Federal Reserve Board would surely step in and take over the major money center banks so that the system of payments would begin functioning again. The Fed was prepared to take over the major banks back in the 80s when bad debt to developing countries threatened to make them insolvent. It is inconceivable that it has not made similar preparations in the current crisis.

In other words, the worst case scenario is that we have an extremely scary day in which the markets freeze for a few hours. Then the Fed steps in and takes over the major banks. The system of payments continues to operate exactly as before, but the bank executives are out of their jobs and the bank shareholders have likely lost most of their money. In other words, the banks have a gun pointed to their heads and are threatening to pull the trigger unless we hand them $700 billion.

If we are not worried about this worst case scenario (to be clear, I wouldn't want to see it), then why should we do the bailout?

There has been a mountain of scare stories and misinformation circulated to push the bailout. Yes, banks have tightened credit. Yes, we are in a recession. But the problem is not a freeze up of the banking system. The problem is the collapse of an $8 trillion housing bubble. (It was remarkable how many so-called experts somehow could not see the housing bubble as it grew to ever more dangerous levels. It is even more remarkable that many of these experts still don't recognize the bubble even as its collapse sinks the economy and the financial system.) The decline in housing prices to date has already cost the economy $4 trillion to $5 trillion in housing equity. This would be expected to lead to a decline in annual consumption on the order of $160 billion to $300 billion.

Given the loss of housing equity, I have actually been surprised that the downturn has not been sharper. Homeowners had been consuming based on their home equity. Much of that equity has now disappeared with the collapse of the bubble. We would expect that their consumption would fall. We also would expect that banks would be reluctant to lend to people who no longer have any collateral.

This is the story of the downturn and of course the bailout does almost nothing to counter this drop in demand. At best, it will make capital available to some marginal lenders who would not otherwise receive loans. We should demand more for $700 billion.

For the record, the restrictions on executive pay and the commitment to give the taxpayers equity in banks in exchange for buying bad assets are jokes. These provisions are sops to provide cover. They are not written in ways to be binding. (And Congress knows how to write binding rules.)

Finally, the bailout absolutely can make things worse. We are going to be in a serious recession because of the collapse of the housing bubble. We will need effective stimulus measures to boost the economy and keep the recession from getting worse.

However, the $700 billion outlay on the bailout is likely to be used as an argument against effective stimulus. We have already seen voices like the Washington Post and the Wall Street funded Peterson Foundation arguing that the government will have to make serious cutbacks because of the bailout.

While their argument is wrong, these are powerful voices in national debates. If the bailout proves to be an obstacle to effective stimulus in future months and years, then the bailout could lead to exactly the sort of prolonged economic downturn that its proponents claim it is intended to prevent.

In short, the bailout rewards some of the richest people in the country for their incompetence. It provides little obvious economic benefit and could lead to long-term harm. That looks like a pretty bad deal.

Link.

There, That About Gets It

My friend Kim used to work as an Army nurse. If a patient showed up with an STD, she had to identify try to identify the source. Often the patient didn't have any idea--well, he knew the girl, but not the name. So Kim had to ask a string of identity questions. Of which the most memorable is:

Teeth: crooked, straight, or missing?

Um, your honor, can I answer "all three"?

History Has its Demands: Stalin Statues Division

My friend Neizvestnie remembers an important day during his youth in Kazakhstan:

I knew the statues of Stalin had been taken away. One day I was out berry picking and I came upon a field--there they all were, 200 of them, lying in a field. All the noses had been broken off, I suppose so no one could use them again. There is a highway over the field now, but I know where they are buried.

Buce Weighs In

Thank you all for coming to hear my opinion this evening. Let me try to be brief because I know we all have other things to do with my time.

If the big bank was a widget company, we'd just toss the keys on the table. Wipe out the old equity, reconstitute the old debt as new equity. I.e., equity dies and debt is wounded and life goes on. Except that if the business recovers, maybe debt gets rich.

In the current uproar, I hear a few mutterings about turning debt into equity but nothing fully formed. I admit, maybe banks are different. It's a trust and relationships business, and these can vanish in a heartbeat (remember Enron, Drexel). OTOH, I guess this is kind of what is happening to Lehman.

Short of stuffing it to debt, I think it is a no brainer to let the government take equity (hello, Bear Stearns). Sure the chances are the government will screw it up, but in the light of what has gone before, that's not a very forceful argument. Let em take equity, hire some unemployed bankers to run it at $165 thou a year, then sell it out when the dust settles.

Preferred is fine, doesn't have to be common, just as long as it is real preferred, not hocus pocus.

Thank you all for coming, I won't be taking any questions.

Fallows on Palin

Just in case you care, allow me to direct you to the sanest web coverage I've seen on l'affaire Palin. That would be the work of James Fallows, whose day-job beat is China, but whose experience in politics includes a stint as a speech-writer for Jimmy Carter, enough to give him some compassion for mediocrity. Find his work here. Recall also: Underbelly opined weeks ago that she actually looked pretty good in an Alaska state debate. The real question may be whether the McCain "handlers" have so mismanaged her as to damage her spirit. I'm not at all ready to bet on who will come out winners in the Biden match, but it ought to be fun to watch.

Block that Metaphor

If college is an investment, Hampshire is a commemorative pewter tankard from the Franklin Mint.

--Radar Magazine (link), in its "worst colleges" summary,
fingering Hampshire College ($47,190 a year) as the "biggest ripoff."

Factcheck: Seems to be a libel on Franklin Mint. A quick check of the website suggests that none of the pewter is tankards, and none of the tankards are pewter (they're ceramic).

Afterthought: Well, there's this (H/T Tom McMahon):

Hitchens on Central Africa

If you want a little perspective after you've reviewed your 401k statement, take a look this stuff from Peter Hitchens, reporting from Zambia (link):

These poor, hopeless, angry people exist by grubbing for scraps of cobalt and copper ore in the filth and dust of abandoned copper mines in Congo, sinking perilous 80ft shafts by hand, washing their finds in cholera-infected streams full of human filth, then pushing enormous two-hundredweight loads uphill on ancient bicycles to the nearby town of Likasi where middlemen buy them to sell on, mainly to Chinese businessmen hungry for these vital metals.

To see them, as they plod miserably past, is to be reminded of pictures of unemployed miners in Thirties Britain, stumbling home in the drizzle with sacks of coal scraps gleaned from spoil heaps.

Except that here the unsparing heat makes the labour five times as hard, and the conditions of work and life are worse by far than any known in England since the 18th Century.

Many perish as their primitive mines collapse on them, or are horribly injured without hope of medical treatment. Many are little more than children. On a good day they may earn $3, which just supports a meagre existence in diseased, malarial slums.

We had been earlier to this awful pit, which looked like a penal colony in an ancient slave empire.

Defeated, bowed figures toiled endlessly in dozens of hand-dug pits. Their faces, when visible, were blank and without hope.

We had been turned away by a fat, corrupt policeman who pretended our papers weren't in order, but who was really taking instructions from a dead-eyed, one-eared gangmaster who sat next to him.

By the time we returned with more official permits, the gangmasters had readied the ambush.

The diggers feared - and their evil, sinister bosses had worked hard on that fear - that if people like me publicised their filthy way of life, then the mine might be closed and the $3 a day might be taken away.

Hitchens calls this a new "slave empire" and he blames it on "the Chinese,"but I'm not sure this hits the point. On his own account, it appears that these miserable people are doing the best they can with the resources available to them.

Genghis Khan's Supreme Joy

To live in a house by the side of the road, and be a friend to man.

No, wait, wrong bin. Genghis Khan's Supreme Joy, Take Two:

To cut my enemies to pieces, drive them before me, seize their possessions, witness the tears of those dear to them, and embrace their wives and daughters.

There, that's more like it. And to think I would have settled for "to outlive your enemies."

Source: René Grousset, The Empire of the Steppes: a History of Central Asia (Trans. 1970) at 249, quoting Rashid ad-Din, Persian/Jewish polymath and historian.

Afterthought: But GK understood that the good times would end:

After us, the people of our race will wear garments of gold; they will eat sweet, greasy food, ride splendid coursers, and hold in their arms the loveliest of women, and they will forget that they owe these things to us. ...

Id.

A Whiff of Conservative Sanity

Steve Bainbridge, who ranks with Bruce Bartlett and (um, I forget who else) as a thinking man's conservative, will lose his gold skull-and-crossbones key-chain ornament if he keeps writing stuff like this (link). He's right about the Democrats, too.

I Know Nothing, Nothing...

Three things I know (next to) nothing about:

1. Comics (or "comix")
2. Harry Turtledove
3. Left Behind
   

I think I'll start with "comix..."

How to Succeed in Medicine

From one who knows:

Do a procedure. Internists, rheumatologists, they have to listen to the patients, and analyze, and judge. Pediatricians, eeuw. No money in that.

Do a procedure. Do proctology exams. The staff preps up 16 patients for you, you show up and do 16 exams, and earn 16 fees. Now, that's what medicine is all about.

Lightly edited, but not much.

The Soviet Yurt

It's a pre-1991 story but it's still cute. The subject is the yurt, the felt-lined, circular mobile home that has served as housing on the steppes since the dawn of time. It's a marvelous invention, really: cool in the summer, snug and warm in the winter, making life bearable in a climate of extremes.

Anyway, here's a Soviet newspaper announcing another triumph for Soviet science--the Soviet yurt. Built out of aluminum it is--uh, well, a sauna in the summer, an icebox in the winter. Um, let's take another look at the mission statement

This is Good News?

From the NYT (via Marc Thoma):

Without health care as the economy’s most powerful economic locomotive, economic growth during President George W. Bush’s first term would have been so anemic that he most probably would have lost the election in 2004.

Link. Two things:

• What with the Walmartification and Costcoizing of health care, we may very well see health costs go down in the near future. Will this be bad news?

• Can a nation grow rich as we all take out each others' appendix?
  

Syncretism in Samarkand

--You are Tatar?
--Yes, Tatar. From Kazan.
--Muslim?
She waved a hand.
--Once, twice a year.
--And your husband is Russian?
--Russian, yes.
--Orthodox?
She waved a hand again.
--We color Easter Eggs.

"Senator McCain is Right ..."

I know that everybody and his aunt Maude has already weighed on the "Obama concedes McCain is right" meme (migawd, doesn't anybody have a day job any more?), but I yield to the impulse to throw in my own two cents' worth, with the intent to clarify just what is at stake.

After all, who could quarrel with civility, detachment, the effort to rise above petty partisanship.

Glad you asked; I'll tell you who: the point is there is a segment of the body politic--in the Republican party, running somewhere between one and 99 percent--that believes that force and violence are a sign of manliness, and that to betray any hint of conciliation is a sign of weakness. This is the crowd that doesn't really believe it has won anything unless it has blown something up. The presidency of the United States being vacant at the moment (and the vice-president in an undisclosed location), I'd nominate John Bolton as honorary chairman. But that is just so's you get the idea; any number of other names might do.

Remarkably enough, this sentiment is not particularly prevalent in the military, where you might expect it to flourish. Sure, there are always a few George C. Pattons and Curis LeMays around-- a few guys who like the smell of napalm in the morning. But a remarkable number of generals understand that war is a bloody business, and that the measure of military success the question of who prevails, not the amount of carnage on the ground.

Acolytes of the explosives party necessarily think that people like Obama are a buncha pussies. On this standard, by conceding virtue in his opponent, Obama was just begging to have his butt snapped with a wet towel. They were delighted with an opportunity to frog-march him down the gauntlet of derision.

I'm not sure just how big this segmenty of the electorate might be. Whatever it is, I'm pretty sure they have been with McCain all along, so the new blizzard of advertising will do more than remind and reaffirm. I don't think it is likely to win many new converts. It might turn a few people off but on the whole, I suppose it is something that you just have to learn with with.

Must-Read: Citizen McCain Goes to Washington

Jonathan Weisman's tictoc of McCain in Washingon on Thursday is a must-read in a weekend when we are all drowning in ink. The whole thing rewards attention, but I'll excerpt the guts of it here:

McCain's dramatic announcement Wednesday that he would suspend his campaign and come to Washington for the bailout talks had wide repercussions.

Democrats, eager to reach a deal before McCain could claim credit, hunkered down and made real progress ahead of his arrival. Conservative Republicans in the House reacted as well, according to aides who were part of the talks.

The Republican Study Committee, an enclave of House conservatives, had already begun turning against the Paulson plan. When McCain announced his return, the conservatives feared he would forge an agreement largely along Paulson's lines, with slight alterations and the GOP leadership's blessing.

"No one knew where he was going," one of the aides said.

Boehner, who had initially greeted Paulson's plan with some warmth, faces a brewing battle next year for the party leadership. Conservatives were making it no secret that they were thinking of backing House Deputy Republican Whip Eric Cantor (R-Va.) in a challenge to Boehner, and Paulson's request for $700 billion was not making matters better.

On Wednesday afternoon, Boehner appointed a new working group, led by Cantor, Ryan and Republican Study Committee Chairman Jeb Hensarling (R-Tex.), and including some moderates, to see if they could put together an alternative proposal. McCain's impending arrival shifted that effort into high gear. By the time McCain arrived in Boehner's office Thursday, the principles of a new plan were ready.

According to Republican aides, McCain was in Boehner's office when the announcement of a deal crossed their BlackBerrys. Rep. Spencer Bachus (Ala.), the House Republicans' representative in the talks, stumbled into the meeting to be peppered by participants with incredulous questions.

It was Ryan who made it most clear that there really was no deal. The core of Paulson's plan -- using $700 billion in taxpayer money to buy distressed assets from failing financial firms -- had to be changed, he told McCain. Instead, banks should have to pony up money for a new federally administered insurance program, like the Federal Deposit Insurance Corp. Banks suffering from mortgage defaults would then be able to draw funds from the insurance pool to remain solvent.

It was not a new idea, White House and Treasury officials said. Paulson and Federal Reserve Chairman Ben S. Bernanke had considered a similar option and rejected it. For one thing, asking banks teetering on the edge of bankruptcy to pay into the insurance fund would be like asking a patient facing heart surgery to buy health insurance before being wheeled into the operating room. The banks would be too weak to pay, and the cost of the insurance would be so high, drawing on the fund after a round of mortgage foreclosures would merely be repaying the banks what they had paid in.

Besides, one Treasury official said, it would do nothing to address the problem at hand. Banks would have no more money than they do now to lend. And they would still be holding the bad assets that are making it impossible for them to borrow.

Paulson made those points Wednesday at a contentious meeting with House Republicans. But Ryan convinced McCain that the idea had to be taken seriously to bring House Republicans on board.

"McCain has been trying to help the House guys, trying to get their ideas into the broader bill," said a senior Republican Senate aide. "If McCain can do that, he can bring 50 to 100 House Republicans to the bill. That would be a big damn deal."

McCain and Graham made just that point at the Tex-Mex lunch, but McCain also spoke in the starkly personal terms of a presidential candidate in trouble: "You all put me on the hook for $700 billion," he told his colleagues, according to an aide familiar with the lunch.

The breakdown was serious enough that word reached Paulson. Just 25 minutes before the scheduled meeting at the White House, Paulson phoned House Speaker Nancy Pelosi (D-Calif.) to alert her to trouble, according to a Senate Democratic leadership aide. When congressional leaders converged on the White House, the Democrats peeled off into the Roosevelt Room to discuss the revolt over the insurance plan. President Bush was kept waiting, something he has always hated.

After the cameras left the Cabinet room, Bush thanked everybody for their spirit of cooperation and said he knew it was not an easy vote. He knew elements still needed to be worked out and said he wanted to go around the table to hear people's views.

Pelosi said Obama would speak for the Democrats. Though later he would pepper Paulson with questions, according to a Republican in the room, his initial point was brief: "We've got to get something done."

Bush turned to McCain, who joked, "The longer I am around here, the more I respect seniority." McCain then turned to Boehner and Senate Minority Leader Mitch McConnell (R-Ky.) to speak first.

Boehner was blunt. The plan Paulson laid out would not win the support of the vast majority of House Republicans. It had been improved on the edges, with an oversight board and caps on the compensation of participating executives. But it had to be changed at the core. He did not mention the insurance alternative, but Democrats did. Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, pressed Boehner hard, asking him if he really intended to scrap the deal and start again.

No, Boehner replied, he just wanted his members to have a voice. Obama then jumped in to turn the question on his rival: "What do you think of the [insurance] plan, John?" he asked repeatedly. McCain did not answer.

One Republican in the room said it was clear that the Democrats came into the meeting with a "game plan" aimed at forcing McCain to choose between the administration and House Republicans. "They had taken McCain's request for a meeting and trumped it," said this source.

Congressional aides from both parties were standing in the lobby of the West Wing, unaware of the discord inside the Cabinet room, when McCain emerged alone, shook the hands of the Marines at the door and left. The aides were baffled. The plan had been for a bipartisan appearance before the media, featuring McCain, Obama and at least a firm statement in favor of intervention. Now, one of the leading men was gone.

Link. I'll let it stand on its own, but for more acerb commentary, go here, and here.

A Central Asia Reading List

Here's a catalog, quirky and personal, of stuff I read in preparation for Central Asia--some not about Central Asia at all.

• Abazov, Rafis, Palgrave Concise Historical Atlas of Central Asia (2008). I love Atlases. Fun to have around. See earlier comment here

• Anthony, David W., The Horse, The Wheel, and Language: How Bronze-Age Riders from the Eurasian Steppes Shaped the Modern World (2007). Summarizes a lot of data. See earlier comment here. Be interesting to see a professional critique.

• Armstrong, Karen, The Great Transformation (2007). Chapter 1 has a provocative account of Zoroastrianism as the response of a settled people against cattle-rustling. Discussions of the early Aryans and the Vedic scriptures may also be relevant to Centraal Asia.
  

• Arnold, Matthew, Sohrab and Rustum (Gutenberg Files). An ancient epic tale of Central Asia, retold by a 19th-Century Victorian who, to the best of my knowledge, never set foot in the place, and I pity poor Henry Pilote, the English teacher at Manchester High School West who had to harry me through it back in 1953. Oh, and there is this.
  

• Barfield, Thomas, The Perilous Frontier (1992). More about China than Central Asia, but instructive on how steppe warriors operate. Earlier comments here.

• Findley, Carter Vaughn, The Turks in World History (2005). "Professorial" (ahem!), but instructive overview of Turkish culture. Snippets here.

• Grousset, René, The Empire of the Steppes: A History of Central Asia (English Trans. 1970). A classic, unfortunately. Slow going, a welter of detail But worth the effort. Chapters on Genghis Khan and Tamerlane especially good.

• Herodotus, Histories, Book IV 1-144 (many editions) classic account of "the Scythians," practitioners of "the Scythian defense"--first reported account of nomad warfare.
  

• Hildinger, Erik, Warriors of the Steppe (2001). Reviewed here. Remarkably helpful account of steppe warfare; great lessons on the importance of tactics and "choosing their own war."

• Hopkirk, Peter, The Great Game: The Struggle for Empire in Central Asia (1992). Canonical text on the 19th-Century clash of empires.

• Hopkirk, Peter, Setting the East Ablaze: Lenin's Dream of an Empire in Asia (1996). Less extensive than Great Game, but in some ways more interesting.

• Kemal, Yashar, Memed, My Hawk (NYRB 2005). Not Central Asia, but a memorable window into traditional Turkic society. Reviewed here.

• LeVine, Steve, The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea (2007). Boy's own adventure tale of the scramble for oil in the post-Soviet years, fun to read but made largely irrelevant by the new assertion of Soviet power. A snippet here.
  

• Lewis, Geoffrey, ed. The Book of Dede Korkut (1976). Bardic recitations from the Oghuz Turks, exact origins lost in the mists of time. Forceful and dramatic, but so full of paranoia and betrayal they get depressing after a while (my friend Judy asks: have you tried reading the Old Testament?).

• Marozzi, Justin, Tamerlane: Sword of Islam, Conqueror of the World (2004). A warning, not a recommendation. Save your money. Amateurish and haphazard. Read the Tamerlane chapter of Grousset, supra, instead. A brief excerpt from Marozzi is here.

• Platonov, Soul (NYRB 2007). The title story is a hair-raising account of life in a dying desert society on the edge of the modern (Soviet) world. Said to be even better in Russian. Other comments here.

• Olcutt, Martha Brill, Central Asia's Second Chance (2005). Good "first book" on current issues. See earlier comments here.

• Polo, Marco, Travels, many editions. Less on Central Asia than you might expect, but always good fun. See excerpts here.

• Whitfield, Susan, Life Along the Silk Road (2001). Earlier comments here.

Optional Extra: I hate to admit it, but this tune was running through my mind the whole trip.

The Debate: The Morning After

I went to sleep last night thinking the Presidential debate was pretty much of a yawn draw. I wake to find that it may have been an Obama win. What happened? Where have I failed?

Before I try answer that, let me say I seem to be in good company. Skimming my Google news feed, I find that a number of commentators followed the same trajectory: started by thinking it was a push, discovered to their surprise that their guy had scored. So, revise the question: where have we all failed?

I think the clue is that people who make this kind of judgment tend to be political junkies. For them (for me?) the debate ended up being a non-event: they'd heard it all before. They were waiting for a Lloyd Bentsen moment (or at least, for John McCain to pop his cork--Mrs. B.says, "for Captain Queeg to drop his marbles"). None of this happened; so, a non-event.

We'd forgotten that some people have lives don't give all their attention to politics. In particular, for a lot of people, Barack Obama is, if not exactly the anti-Christ, at best an unknown quantity. Some of them, when at last they tuned into the debate, were surprised that he did not have horns and a tail.

As a (somewhat lukewarm) Obama supporter, I suppose I should take heart from this news. Well I guess I'll lift my leg, but I won't dance. These things go in waves, and as Harold Macmillan Wilson (!) might have said had he lived long enough, a nanosecond is a long time in politics. Who knows what they will be thinking by Sunday night?

Footnote: Hey, what's the problem with festoon?

Paul Newman, Mensch, RIP

By all available evidence, Paul Newman was a mensch—an all-round decent guy who never took himself too seriously, and deployed his celebrity to make salad dressing for the needy. He was in many respects also a pretty good actor yet I could never escape the conviction that he was almost invariably miscast. He played an uncountable procession of stumblebums, losers, outsiders and general all-round down-and-outs. Yet you could never forget that a mensch who gave away the profits from salad dressing. If you doubt it, take a look at this screen test, where he riffs opposite James Dean, a genuine loser, outsider and all-round down-and out. Dean is confused, diffident and rebellious. Paul Newman is steady, decent and kind: wonderful qualities in a human being, but not remotely related to the roles he played in Hud, Cool Hand Luke, The Hustler, Butch and Sundance, Final Verdict or –gasp!--Cat on a Hot Tin Roof.

Okay, so maybe he wasn't that great an actor; maybe he was just playing himself. That would be a more telling charge were it not the case that most actors play themselves most of the time. Indeed, “playing oneself” may be mediocre acting, but it is almost essential if you want to put food on the table:who will get work unless he has a personal style that the audience will recognize and understand? As Jack Warner probably did not say--”Ronald Reagan for governor? No, no, Jimmy Stewart for governor, Ronald Reagan for best friend!” A counter-example which proves my point: Rip Torn, and who outside the biz can name five movies by Rip Torn (yes, I can see your hand, Joel, now sit down)--?

About Newman, I think the point first struck me with The Hustler—a movie I wanted to like, but couldn't begin to take seriously,. My first thought was: banker casting—they wouldn't fund the movie without a bankable star. But it happened too often to be just banker casting. Newman had plenty of money and success; he must have wanted to keep taking on these unsuitable roles or he wouldn't have bothered. He might have stayed home with the cookbooks., Or he might have chosen a career path like that of Bill Murray, who has used his success to free him up to play any damn thing he wants to play.

The flip side of all this is the one really good Paul Newman Movie: Mr. And Mrs. Bridge, the James Ivory film in which he co-stars with his wife, Joanne Woodward (also about the best James Ivory film, but that is another story). This time, I suppose you could say he is playing too much to type, but no matter: this time, he's doing something he knows how to do, and it works.

Paul Newman, mensch, dead at 83. Perhaps it is just as well he was not a more daring actor: as it is, acting gave him the wherewithal to be a thoroughly decent man.

Milestone

I see that last post was my 2,000th. So happy 2,001 to me.

Debate Postmortem

Well, that's over. I guess it wasn't so much of a liveblog as an attempt at a transcript. David Gregory is saying something about "prize-fighters" scoring blows, but I'd say it is more like aging plug-uglies whacking away at each other with a serious hit. I can't think of a single thing except the odd preposition or adverb that I hadn't heard before.

Maybe the most notable point is negative: in the end there was no Captain Queeg moment; McCain did tend to natter on a bit but there was nothing to suggest that he's had a stroke, or is otherwise losing it. So, score one for McCain for not losing. Obama for his part was not as boring or wonky as he can be. But both of them were somewhat boring or wonky; both tended to drift into details that were bound to be beyond the average voter (even the average debate watcher). And nobody, nobody, had a Ronald Reagan moment, or a Lloyd Bentsen moment.

McCain seemed to have been coached to hammer away at his long experience, which was perhaps a two-edged sword--it was what sidetracked him into no more than marginally relevant ancient history. And he certainly seemed to be determined to tell us that on foreign policy, Obamna was "naive."

Obama was controlled, a bit bloodless, somewhat wonky--the curse of Democratic candidtes for a generation--but on none of these so fatally constricted as to wind up looking like John Kerry or Michael Dukakis. He never seemed to get rattled; he never lost his cool--but at times, I was praying that he would lose his cool, just to make things the least bit intereting.

I deliberately turned the sound down at the end so I wouldn't hear the postmortem. Now, to find out whether Chris Matthews agrees with me...

Update: The commentators are all remarking that McCain never made eye contact with Obama. I never noticed that.

Live-Blogging the Debate

Never done this before. May not follow through. But a starter point: seems to me the candidates have to be prepared for two debates tonight: the scheduled topic is foreign policy, but everyone knows (assumes?) that the moderator will be asking about the economy.

5:58--Eeuw--Chris Matthews speaks of "the Captain Queeg factor," and he isn't talking about Obama.

6:00--Jim Lehrer says it is about foreign policy--which of course (he says) includes the global financial crisis.

Will Obama run out of time before he finishes his preliminaries?

Yep, he made it. Bullet points.

McCain opens by trying to wrap himself around Ted Kennedy. Followed by blah blah. He slipped in a bit of a menu but he is mainly talking process.

6:05--Obama: I warned you this was going to happen. "We shredded so many regulations" is sly.

McCain: I warned you too. Let me tell you about Dwight Eisenhower. Accountability. I'm against greed, and in favor of responsibility.

Lehrer to Obama: say it directly to him.

McCain: You think I couldn't hear him? (Cute.)

Obama is hammering at bullet points; McCain is warning of hard times.

Lehrer: how do you guys differ?

McCain says we've got to cut spending, and goes to beating up on Republicans.

Did he just say I'm going to veto every single spending bill that comes across my desk.

McCain: Obama has a lot of earmarks.

Obama: he's right, that's why I backed off. But earamarks account for $18 billion; Senator McCain is proposing $300 in tax cuts to the wealthiest.

(Earlier, Obama called him "John;" McCain responded with "Senator Obama," and Obama shifted to "Senator McCain.")

6:18--Has anybody said anything about foreign policy yet?

McCain is back to talking about earmarks. The process corrupts people. That's why we have people in jail.

Obamas interrupts (and Lehrer lets him get away with it) to challenge McCain on what McCain says about Obama's tax plans.

6:20--Again (this time to McCain), Lehrer says: respond directly to (Obama).

McCain is defending corporate tax cuts.

Obama: yes, corporate tax rates are high, but there are so many loopholes...

Now he is say something wonky about health care.

McCain interrupts Lehrer to go back to earmarks. Now he's on to tax reform.

They're both playing inside baseball IMHO. Inside rotisserie league.

Lehrer: What are you going to have to give up to pay for the financial plan?

Obama: hard to say, but we'll have to forego some stuff. But we need energy independence. We have to fix health care. And infrastructure.

With his dark eyes and dark eyebrows, Obama looks more menacing than I rememeber.

McCain: We've got to cut spending. Ethanol. Cost-plus. I know how to do that. I've fought that kind of stuff, and people ended up in Federal prison.

Lehrer: neither one of you has suggested anything you will give up.

Obama: Okay--some of the energy program. Subsidies to private insurers. I worked with Tom Coburn to list every dollar of Federal spending to see how is promoting these projects.

Lehrer is not impressed.

McCain: spending freeze on everything except defense, veterans and entitlements.

Obama: it's a hatchet, not a scalpel (he doesn't mention that the "exceptions" are most of the budget.

McCain: stop sending money to people who don't like us very much. Oh, and we should build nuclear power plants. I've worked on it, along with Senator Clinton.

Lehrer is still not impressed. Are you willing to acknowledge, etc.

Obama: no doubt about it (he's trying to remind people that the bailout might actually make money, but it's too abstruse for the format).

McCain: I don't want to pass health care over to the Federal government (is it just me or is he bouncing around like a cat on a hot tin roof?). I have fought against spending.

Obama: you're part of the problem.

McCain: (I think this is the second time he says he is not "Miss Congeniality").

Lehrer: what are the lessons of Iraq?

McCain: you cannot have a failed strategy. The war was very badly mishandled. We will come home with victory and with honor. Petraeus is a saint.

Obama: the first question is whether we should have gone into this war in the first place. I opposed it. I said we weren't sure what it would cost, and we hadn't finished the job in Afghanistan. I wish I had been wrong but that's not the case. Al Qaida is stronger now than at any time since 2001. We are spending and the Iraqis have a surplus.

McCain: (He's on the attack against Obama for what he has not done on Iraq).

Obama: "... but that is Senate inside baseball" (right). Petraeus is a saint (now Obama goes on the attack).

McCain: "I'm afraid Senator Obama doesn't understand..." Senator reform refuses to acknowledge we are winning in Iraq (Obama, interrupting: not true).

Obama: not true, not the case, etc. etc.

6:49: No soundbytes yet on either side. No bullet points.

Lehrer: Do we need more troops in Afghanistan?

Obama: yes. Kharzai has to do a better job. We've got to deal with the poppy trade. We've got to deal with Pakistan.

McCain: I won't repeat the mistake that I regret enormously that we walked away after the Russians left (is he taking the blame for that?) (I think he is muddling "cutting off aid to Afghanistan" to "dealing with Pakistan") (he's trying to draw differences between himself and O on Afghan strategy, but they aren't obvious). By the way, did I say that Petraeus is a saint? And he was wrong to threaten to invade Pakistan.

Obama: That's not what I said. And you sing songs about Bombing Iran (I haven't been watching the screen; McCain puts his head down and scowls when he is attacked).

McCain: Let me tell you my record. I admire Ronald Reagan. I voted against sending Marines into Lebanon. Tragically, I was right. I supported the first Gulf War. I supported going into Bosnia when a number of my colleagues opposed. I supported going into Kosovo. I opposed Somalia. I have a record (where is this going? I guess the point is that he has had a lot of experience. This is the first time he has sounded like an old man, as in "why did I tell you about the time a fly flew into my mouth?). I got a bracelet from a woman who lost her son.

Obama: I've got a bracelet, too. The question is, are we making good judgments. We took our eye off Afghanistan and the people who perpetrated 9/11 (McC's head is down, this time with a grimace).

McCain: You might think he would have gone to Afghanistan. I've been there. We will prevail.

Lehrer: Iran?

McCain: If Iran acquires nuclear weapons, it is an existential threat to Israel. I have proposed a league of democracies. We could impose sanctions.

Obama: I believe the Republican guard is a terrorist organization. The single thing that has strengthened Iran has been the war in Iraq. Obviously our policy over the last eight years has not work. Not only has it threatened Israel, etc. We need sanctions but we can't do it without Russia and China. We need tough direct diplomacy.

McCain: Senator Obama said he would sit down with bad guys without preconditions. Bad idea. Really bad idea. (Hm, I don't see the camera on Obama when McCain is criticizing him)

Obama: I reserve the right to meet with anybody if I think it will keep the US safe. Kissinger says we should meet with Iran and he is one of McCain's advisers. And the Bush regime has done it. Compare North Korea: we cut off talks and they got way ahead on nukes. When we reengaged, we made some progress (split screen again, I can't say whether this is a grimace or a smirk).

McCain: "What Senator Obama doesn't seem to understand..." "Naive...dangerous" (now I think he is saying we shouldn't be talking to North Korea).

Obama: That's not my position "and Senator McCain knows it."

McCain: (got a mild laugh for a mocking joke. Now we have a split screen. Obama is shaking his head, interrupting a bit, bobbing around a bit).

Lehrer: Russia?

Obama: We have to explain to the Russians that you can't be a 21st century power and act like a 20th Century dictatorship (is this as near to a one liner as I have heard so far?). We have to make clear that some other countries may join NATO. "You don't deal with Russia by staring into his eyes and seeing his soul" (another one-liner?). But there are areas of common interest.

McCain: Naive. "I looked into Mr. Putin's eyes and I saw three letters, a K, a G and a B" (why are all the one-liners about Russia?). South Ossetia: I went there once (he is off on the Ukrain now; sounds like wandering to me).

Obama: I think we agree on most of this. We have to have foresight and anticipate some of these problems. I warned the administration against Russian peacekeepers. Energy: that's another reason we need an energy strategy. And that means, yes, increasing production and offshore drilling (no kidding?). But oil isn't enough. I've got a plan. Over 26 years, he voted against alternative energy 23 times. He's got to walk the walk.

Lehrer: What are the chances of another 9/11?

McCain: Safer than the day after 9/11. I've worked across the aisle. With Joe Lieberman. Opposed by the administration. I'm opposed to torture. We have to work with our allies; I know our allies and I can work with them.

Obama: Safer in some ways. Airport security. But chemical sites, transit, ports. Suitcases. Why nuclear proliferation is so important. We have to focus on Al Qaida, not just Iraq. It is important for us to understand we need cooperation--restore America's standing, less respected; greatest country on earth; I give Senator McCain credit on the torture issue.

McCain: Something about Reagan and missile defense. Senator Obama still doesn't get it about Iraq. We can't have specific dates. Gerneral Petraeus says...

Obama: They've focused on Iraq. Bin Laden is still out there. He's not captured, he's resurgent. We owe China a bunch of money; they are active in Latin America, Asia, Africa, because we have been focused on Iraq. Not to mention look at our economy. We can't provide health care, science and technology. We won't be able to fund the military. We can't fund veterans care. A broader srrategic vision.

McCain: I've been involved, etc. There are advantages to experience (now it is Obama who has his eyes down). Failing to acknowledge he was wrong about the surge. I know the veterans. I know they know I will take care of them. Safe and secure. Reform, prosperity, peace. I don't need any on the job training.

Obama: My father came from Kenya. The values of the United States inspire the entire world. I don't think our standing is the same. Send a message. Invest.

McCain: When I came home from prison, I saw our veterans being mistreated.

(Thank God that's over)

Hockey Mom Video

More piling on:

See more funny videos and funny pictures at CollegeHumor.

H/T: BoingBoing

Buffett's Banker

Joel finds this account of Warren Buffett's favorite (only?) banker. Guy sounds a lot like, well, like Warren Buffett. Wonder if there is any chance that he is the designated successor.

"You Idiot, That's Me!"

Joel finds this in the Washington Post:

Ocean, N.J.

While witnessing, but not participating in, the home real estate frenzy in 2005 and 2006, I kept asking: Who is the idiot buying up all these mortgages issued on inflated home prices to all these people who have neither the capacity nor the intention to repay the loans?

Now I learn it was me.

TED THACKER

Link.

The Biggest Fathead of the Second Millennium AD

Many have said that Genghis Khan may be the most important political/military leader of the last millennium. I wonder if we have paid enough attention to the issue of the greatest fathead. I don't mean “monster,” in the sense of Hitler or Mao or Pol Pot. I mean someone more on the order of of, oh, say Ala al-Din Muhammed, aka Muhammed of Khwarizm, who (per René Grousset) “brought the Khwaraizmian empire to its peak ... during his reign it became the dominant state in Central Asia.”

Ah yes, Khwarizm—here it is, the area around Khiva and—well, pretty much the territory in Uzbekistan where I was traveling last week. Muhammed succeeded his father about 1210. Over the next seven years, more or less, he pasted together an empire of sorts that extended out into Afghanistan and Persia. It was impressive on the map, although on close scrutiny, it appears to have been pretty fragile. Muhammed also seems to have had a knack for irritating near neighbors who might otherwise have become his allies.

At this point, Muhammed may never even have heard of his great contemporary, Genghis Khan, for it is a remarkable fact that Genghis, as a world leader, got late start. He didn't really consolidate among the Mongols until he was around 40, i.e., around 1207. He spent the next several years embroiled with the Chinese. It was only after that that he turned his attention to the west and found himself face to face with Muhammed.

Genghis' first approach seems to have been benign. He came looking for trade. But in 1218, a Khwazmarian governor robbed a Mongol caravan and put 100 of its members to death. Genghis was not amused. He demanded compensation and, being refused, made ready for war.* By the summer of 1219, Mongol forces began popping up all over Central Asia. In February of 1220, Genghis himself destroyed Bukhara. He moved on to loot Samarkand, reducing its population by about three quarters. In April of 1221, the Mongols finally took the old Khwarizm capital of Gurganj, modern Urgench: they drowned it by rerouting a river.

The rest, as they say, is history. The Mongols on into India and Iran. Genghis himself lived only until 1227—by a narrow reading, his entire career on the world stage lasted not much longer than seven years. But his sons and grandsons dominated China, Persia, Central Asia and the hinterland of “Russia” for generations to come.

*I'll say. "[T]he whirlwind of anger cast dust into the eyes of patience and clemency while the fire of wrath flared up with such a flame that it drove the water from his eyes and could be quenched only by the shedding of blood."--The Persian chronicler Ata-Malik Juvaini, quoted in Jack Weatherford, Genghis Khan and the Making of the Modern World at 107 (2004).

Welcome Aswath Damodaran

One of my favorite online teachers (I steal from him often) now has a blog.

Be Careful What You Wish For

Charlie Cook says a veto-proof Democratic Senate is "no longer implausible" (link). Here is one guy who should be scared of that.

I Was Sitting in this Medrassah ...

I was leaning next to the beer cooler in an old medrassah,watching a fashion show...

There now, is that not a good lede? But it's true—Well, okay, I wasn't actually leaning against the cooler; just sitting next to it, with my head tilted to one side. And I didn't actually drink the beer, but blame that on my sour tummy. And by "old," I mean "decomissioned," in the same sense that the "old" Episcopal Church is now a Chinese restaurant. Anyway, the point is that here in Uzbekistan (specifically, Bukhara, one of the jewels in the Islamic crown), they wear their faith with a kind of relaxed ease that we don't know much about in the more general world. And it isn't just Bukhara: back in Samarkand, I joined a crowd doing some cheerful group dancing in another former holy place: my friend Max called it “Fiddler in the Mosque.”

It's not that they're not Muslim; by all accounts, the vast majority of Central Asians identify themselves as Muslim (except the Russians, who identify as Orthodox). But I said they were easygoing, and everything I saw about the practice of the faith is enough to ratify the point. From what I gather it has long been that way—one reason, perhaps, why the faith was able to survive 75 years of Soviet secularism. At any rate, it is what you feel there now.

It is, if nothing else, a useful reminder (a) that Islam is various and (b) it is our (everybody's?) bad luck that the oil money all fell on the Wahabis and their close kin, aka the most intolerant and dangerous among them, putting the screamers in the best position to grab the microphone (or the grenade) and to finance newer, more toxic medrassahs in number of places, not excluding central Asia.

More pessimistic observers will say I'm deluding myself: that radical Islam is in truth a cancer on the Central Asian body politic, and growing fast. I've no doubt that they could make a case for their view: the extremist variety does indeed seem to be driving the Islamic engine almost everywhere (and in repressive countries like these, it is bound to be the extremists who drive the engine of dissent). My point is that from walking the streets and such, you'd never guess it. Moreover, if you were a corrupt autocrat in a little-known distant country, if you did have political difficulties, whom would you try to blame? While I was in Bukhara, I read about how police were clashing with “Islamic extremists” in Ashghabat, scheduled as a later stop. Maybe so, but you get to Ashghabat and you quickly perceive that the “government” in power here is surely the most autocratic of a bad lot. If you're the autocrat, you are not going to tell the Western press that you are beating the heads of ordinary people who just want to get about their business: the extremist card is the one you are bound to play. By the way, did I mention that Turkmenistan has a thriving wine industry? On my sample, the stuff tastes like battery acid, but their heart seems to be in the right place.

One detects a vicious circle here: an autocratic government generates an angry and aggressive response, which triggers more head-besting, which triggers more anger and aggression. It is easy to predict a bad end here. Meanwhile, I think I'll head back to the medrassah and kick back with a brew.

Listening to Proust in Central Asia

It was Mrs. Buce's idea first. She bought the 39-disk set of Neville Jason reading excerpts (!) from Marcel Proust's Remembrance of Things Past (link); she loaded them on her Ipod. In an idle moment on the eve of my trip to Central Asia, I followed her example.

Flash forward to 3 o'clock on the morning of Saturday, September 13: I'm in a hotel room in Samarkand when I felt the first twinge of what became a Class-IV bout with Tamerlane's Tummy. I'll spare you the details, but I spent most of the next 36 hours either in bed or—well, mostly in bed. To keep me company, I fired up the Ipod and so, for the next day and a half, I drifted in and out of a troubled sleep to the stereophonic sonoroties of Jason's Proustian periods.

A complication was that I seemed to have the Ipod on shuffle, so whatever continuity there may be in the original seems to have been lost in delivery.

The odd—okay, the amazing—thing is that it worked, and indeed pretty well. I know that Proust is famously “complex,” but this is a characterization easily misunderstood. His sentences are coiled and serpentine; “great cathedrals,” I once heard someone say, “of commas and semicolons.” But he is not mischievously secretive like Joyce, or terminally opaque like Henry James. Once you uncoil, Proust makes his position is unmistakably clear—often poignant, sometimes savagely funny, and always penetrating or insightful. You can get it on the page, but in any event Jason gets it, and that's what makes these outtakes such good company in troubled times. Proust as a cure for a far-away gut ache, what a concept.

No Comment

link.

H/T: BoingBoing.

Which One is the Candidate?

This is probably a cheap shot, but what the hell. Compare:



And:



[Remember? Link.]

Update: Interesting to listen to the always-insightful Ed Rollins say they've blown it with Sarah--they didn't prep her right, and then they pushed her out onto the runway in her underwear, and no wonder she broke a high heel. Rollins even suggests that they knocked the spunk out of her but I'm not so sure. Maybe for this campaign, but I bet we have Sarah around for a long time.

Central Asia: Executive Summary

Sunlight again, after a decent few hours' sleep, after 60-hour day, with an opportunity to begin to assess my two weeks (plus) in Central Asia.

“Did you see--?”--before you ask, probably no; the stuff I did not see, vastly exceeds what I did see. I touched base in only three of the five 'stans—Kazakh-, Uzbeki- and Turki- (an angry gut foreclosed an optional sidetrip to Tadzhiki-). I didn't see the flaming gas wells, the dying Aral Sea, the military bases (American and Russian), nor the prison where (it is said) they drown captives in boiling water for persisting in the recitation of the Koran. I was there to look at ancient ruins—so, the crimes of former bullies like Tamerlane, Genghis Khan and Alexander the Great, as distinct from the current lot. Aside from that, it is fun (and, I think, instructive) just to get the feel of a place--how far apart things are (not that far); how big the sky is (pretty big--if California has 12 suns, then this place has at least 14).

On its own narrow terms, I'd have to count the venture a success. Measured in terms of sheer plentitude, Central Asia is perhaps not as rich in ruins as some other places—the first generation of Muslims pretty much reduced the old stuff to rubble in the Seventh Century, and what the Muslims didn't get in the Seventh Century, the Mongols more or less did in during the 13^th. But there is still a lot of good stuff. You can see an ancient Parthian settlement at Nisa outside Ashgabat (just like the Romans, the Parthians had arches, who knew?). And there is a marvellous, moony landscape out in the middle of the Karakum desert at Merv. But most of what you see is later Islamic—not least, ironically, the stuff left behind by Tamerlane; ironic in that Tamerlane surely stands high on the list of all-time destructive bad guys (the clue is that Tamerlane saved most of his destructive instincts for export; for the homefolks, he favored monuments and costly palaces).

The Tamerlane stuff is interesting in its own right, but also because most of it has been aggressively (savagely?) restored, mostly by the Soviets. This isn't a complaint, precisely: everything is an artifact, and I would love to know more about just how and (even more) why they did it. I didn't have a lot of luck getting people to talk about this issue: “well, they weren't stupid people, you know” huffed one tour guide (trained by Intourist)--which is entirely correct, but beside the point. My take is on the whole they did a pretty good job, although there is a certain aridity to, e.g.,the Samarkand Registan. And Khiva, a smaller town with a bigger complex of monuments, comes perilously close as appearing to be some weird kind of Islamo-Soviet Colonial Williamsburg.

I should add that one real plus to the trip was the people, the Central Asians. Granted that I was in a tourist bubble, still I spent a fair amount of time doing what I like to do anywhere, I.e., walking the streets. I also spent a morning at the bazaar in Ashgebat which is absolutely not designed with tourists in mind, I can assure you. I have to say, they were almost without exception easygoing and affable—not overly impressed or irritated by my presence, mostly busy just doing life. At the other end of the line, Almaty could pass for prosperous, with new car dealerships in serried ranks on the road in from the airport. You could almost forget (but then, maybe I was looking in the wrong places) that they all live under some of the worlds most unpleasant governments, where former Soviet bureaucrats more or less deploy the populace as an extractive resource to line the pockets of themselves and their sons and their daughters.

Had to Happen

From the email bin:

Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully Minister of Treasury Paulson

Source: Multiple. It's goin' 'round.

Plus ça Change: Financial Panic Dept.

The Wichita bureau, with a sense of history, recalls Case Broderick, onetime Congressman from Kansas, in the runup to the Bankruptcy Act of 1898:

There have been two unfortunate periods or conditions in that country which have tended to destroy the business interests and to bankrupt business men. One period perhaps was owing to misjudgment of the people, and the other was in no sense their fault but was their misfortune. [A] spirit of speculation swept over the entire country west of the Missouri River like a pestilence and it unfortunately affected a large class of our people. They went wildly into speculation. They purchased more property than they had use for. They gave mortgages and incurred liabilities at the banks and when the boom collapsed, property was depreciated, people were in debt, mortgages had been given, interest had defaulted and there was no property which could be exchanged for money.

--Charles Warren, Bankruptcy in United States History 141 (1935)
[Emphasis added; available at Google Books here]

Just A Thought

So John McCain can have the time he needs to solve the financial crisis, coulld we just settle for one presidential debate and three vice-presidential?

Overheard at JFK

Per the guy at the next table, talking loudly on his cellphone:

In San Diego, we have the San Diego/Buffalo indicator: one home in San Diego will buy two homes in Buffalo.

But right now, one home in San Diego will buy six homes in Buffalo.

Wonky footnote: Web access here is free, courtesy of Jet Blue. But it is slo-o-o-w, like Central Asian slow. One site that won't load at all: Jet Blue flight info. So I am going to have to shut down to go find out if my flight is still on time.

Heading Home

Checking in from the Frankfort Airport, where they'll take American money for small bottles of water, at $5 each. More Central Asia postings in a couple of days, but I still don't know why they spell Samarqand with a q.

Silk Road: Khiva

I’m booked to spend one night in Khiva. Second prize, two nights in Khiva?

In 1840, near the height of the “great game” a British Lieutenant set out from Khiva with 416 Russians whose release from slavery he had effected in negotiation with the Khan. He marched them 500 miles to the Russian Fort Alexandrovsk on the Caspian Sea. The Russians, in the delicate politics of the time, were not amused:

She seemed to consider that the interposition of England in her behalf was almost an insult; that she was humiliated by accepting of any favour at our hands; and she thus refuses to the present day to admit tht she was indebted to Shakespeare’s intercession for the recovery of her kidnapped subjects. The extreme sensitiveness, indeed, which she has betrayed upon this subject can only be explained by her pretension to exclusive relations with the Uzbek principalities, both commercial and political; a pretension which of course has never been recognized in England, and which it may yete be of national importance to us distinctly to disavow.

--“The Russians in Central Asia,” London Quarterly Review CCXXXV,
Article VIII, 277-304 284 (July 1865).

Available here. To be fair, I guess you'd have to add that the British were not amused that the Russians were not amused.

Post-Visit Update: Actually, Khiva is a perfectly pleasant place. Bit touristy, but the slaves, if any, are kept decently under wraps.

This Just In: Spittle and Anointings

Eighty-three years after the defeat of the Armada, the English still rub against the Spanish in the New World, and the Catholics at home:

To Lond: and Council: The letters of Sir T:Mudiford were read, giving relation of the Exploit at Panamà, which was very brave: They tooke and burnt, and pilag’d the Towne of vast Treasures, but the best of the booty had ben ship’d off, and lay at anker in the South Sea, so as after our Men had ranged the Country 60 miles about, they went back to Nombre de Dios and embarq’d to Jamaica; Such an action had not ben don since the famous Drake: I dined at the Resident of Hambroghs, and after dinner at the Christning of Sir Sam: Tukes Son Charles which was don at Somerset house by a Popish Priest with many odd Ceremonies, Spittle and anointings: …

—John Evelyn, The Diary of John Evelyn 235,
September 19, 1671 (World Classics ed. 1985)

Silk Road: Booked for Bukhara

I’m booked to be in Bukhara in Uzbekistan from now through Friday morning. It’s the home, inter alia, of Muhammad Ibn Ismail Ibn Ibrahim Ibn al-Mughirah Ibn Bardizbah al-Bukhari, but don’t even think of calling him “Al.” Now this:

Of the thousands of cities conquered by the Mongols, history only mentions one that Genghis Khan deigned to enter. Usually, when victory became assured, he withdrew with his court to a distant and more pleasant camp while his warriors completed their task. On a March day in 1220, the Year of the Dragon, the Mongol conqueror broke with his peculiar tradition by leading his cavalry into the center of the newly conquered city of Bukhara, one of the most important cities belonging to the sultan of Khwarizm in what is now Uzbekistan. Although neither the capital nor the major commercial city, Bukhara occupied an exalted emotional position throughout the Muslim world as Noble Bukhara, the center of religious piety known by the epithet “the ornament and delight of all Islam.” Knowing fully the propaganda value of his actions by conquering and entering the city, Genghis Khan rode triumphantly through the city gates, past the warren of wooden houses and vendors’ stalls, to the large cluster of stone and brick buildings at the center of the city.

—Jack Weatherford, Genghis Khan
and the Making of the Modern World 3 (2004)

Silk Road: Samarkand: These Guys Need a Union

I’m due to be at Samarkand from today through next Monday. Tamerlane built a great mosque here, in honor of his chief wife, or of her mother (account differ). Tamerlane got his first look at the mosque as it neared completion in 1404, on his arrival home from a five-year campaign. He wasn’t happy: the portal was too law, dwarfed by the portal of the madrassah across the street. Bad things happened to the chiefs of construction. Tamerlane himself now took charge of the project. The chronicler Ruy Gonzalez de Clavijo reports:

He would stay there the best part of the day during the work. He would arrange for much meat to be cooked and brought, and then he would order them to throw portions of the same down to the workmen in the foundations, as though one should cast bones to dogs, in a pit, and a wonder to all he with his own hands did this. Thus he urged on their labour; and at times would have coins thrown down to the masons when especially they worked to his satisfaction.

—Quoted in Justin Marozzi, Tamerlane 226-7(2004)