Alan Greenspan's Irrational Exuberance

Alan Greenspan autobiography,
soon to be published by Goldilocks Economy Press

Alan Greenspan isn't content to rest on his achievements, the last of which during his stint as Federal Reserve Chairman from 1987 to 2006 was to pump up the housing bubble. Looking at the bear market following the previous dot com bubble, he presided over a lowering of the fed funds rate all the way down to 1 percent through 2004, and then a very gradual rise.

Result: the housing mania with all its foolishness and abuses — mortgage loans to borrowers with no prospects for repaying them, packaging the toxic loans and turning them into securities few fully understood, selling them to other financial institutions and eventually the ultimate sucker, the U.S. government quangos Fannie Mae and Freddie Mac; homeowners using their temporarily skyrocketing equity as a source of E-Z credit.

We all know where it led, once the contraption self-destructed. Millions of foreclosures and banks and developers lumbered with empty houses no one is buying. But the Wiz has another solution, even greater than his solution for the post-dot com bear market:

Alan Greenspan recently floated an intriguing way to increase American home prices — let in more immigrants. As the Wall Street Journal paraphrased it the other day at the very bottom of an article reporting on an interview the paper had with the former chairman of the Federal Reserve: "The only sustainable way to increase demand for vacant houses is to spur the formation of new households. Admitting more skilled immigrants, who tend to earn enough to buy homes, would accomplish that while paying other dividends to the U.S. economy."

The New York Sun, which reported the story, is thrilled with the idea, except that it doesn't go far enough.

The only amendment we would make is that it is not only "skilled" immigrants in the definition of labor economists we need, but unskilled ones, too. For it's not unheard of for an unskilled immigrant, or his children, to acquire skills. A fact that can't have escaped Mr. Greenspan, himself a grandson of immigrants.

For the Sun's editorial board, surveying the country from their 2,426th-story office in Mahattan, it's win-win-win all the way around. Happy realtors and developers. A more overpopulated United States (the only way to live, as New Yorkers know — screw those doofs in flyover country who, can you believe it, actually want to to live in single-family houses and drive cars!). A healthier investment climate. Plus a bonus, an acceleration in race replacement. On the current schedule, whites will become a minority only around 2050.

Why so flopping slow? As long as there's a white majority, they might block the North American Union! They can't be counted on to do what they're told like Third World servants! We can't wait another 40 years to have a country that works as well for the global corporate elite as Mexico City does!

"Listen, Greenspan, we have a new job for you. Yes, yes, you did well all those years, and you have your reward, but we need another little favor. You talk, they listen. We're sending you a script … ."

The Mount Isa Doctrine

A certified Obama-free posting™ !
No artificial ingredients

We interrupt our regularly scheduled blogging to bring you news from Mount Isa, Queensland, Australia.

John Molony, the mayor of the Australian outback mining town of Mount Isa, is a straight-talking Aussie bloke, the kind of man who calls a spade a bloody shovel. But after suggesting that "beauty disadvantaged" women should move to his remote Queensland town, where men outnumber females five to one, he may think twice about being so forthright in the future. Under attack from angry locals, he is facing calls to resign.

Molony sparked outrage when he highlighted the shortage of women in the remote town in north Queensland (population 25,000) in an interview in his local newspaper. "May I suggest if there are five blokes to every girl, we should find out where there are beauty-disadvantaged women and ask them to proceed to Mount Isa," he said.

It is almost unheard of in a politician to be completely lacking in tact, but Mr. Molony seems to be an example of such a rare species.

Leaving aside the merits of his proposal, it could have been phrased in a way that was flattering both to the numerically excess men in his town and to the women he was trying to recruit for them. He could have just said, "We've got a lot of great blokes here in Mount Isa, and a deficit of women. Word to the wise, ladies."

Hear me, Mr. Molony. Women who are, in your phrase, "beauty disadvantaged" — well, mate, at least you didn't say "beauty challenged," I'll give you that — aren't thick witted. They can divide five by one, and decode messages better than the Australian Military Intelligence Service.

As it is, it's hard to say who you have insulted most: Mount Isa's blokes, by implying that they are so desperate they'll revise their standards for feminine allure lower than the floor of the Marianas Trench, or the Aussie women who aren't classic beauties.

Mr. Molony, I don't think this is the time to announce your candidacy for Prime Minister. If you have a lot of pull with the Diplomatic Service, like incriminating evidence on its top 12 officials, maybe they can find a place for you if you are run out of Mount Isa.

The glass isn't half full or half empty. It's empty.

James Quinn has an asteroid-striking-the-financial-world piece at Seeking Alpha, the interesting site devoted to exchange traded funds, titled "The Great Consumer Crash of 2009." You'll feel better for reading it, I'm sure. Says he:

By 2005 practically everyone had a large automobile and a beautiful house. By 2010 many of these people will be asking where is that large automobile and will realize as the sheriff escorts them out of their house that this is not my beautiful house. There is plenty of blame to go round for this predicament. According to Northern Trust economist Paul Kasriel, “We’re a what’s my monthly payment nation. The idea is to have my monthly payments as high as I can take. If you cut interest rates, I’ll get a bigger car.” Major banks offer credit cards using your home equity as a way to pay everyday expenses like groceries, gas and clothes. Eating your house was never so easy. …

The last thing that anyone thought would result while watching the Twin Towers collapse on September 11, 2001 was the greatest housing boom in the history of the world. When a country goes to war, it usually asks its citizens to sacrifice.

“I have nothing to offer but blood, toil, tears, and sweat. We have before us an ordeal of the most grievous kind. We have before us many, many months of struggle and suffering.” (Winston Churchill – May 13, 1940)

In the true spirit of Winston Churchill, President Bush could have paraphrased Churchill by saying: I have nothing to offer but tax cuts, tax rebates, 0% auto financing, and no-doc mortgages. Americans grieved for a few weeks and then did their patriotic part by buying everything they could get their hands on.

Most of his obituary for the years of living dangerously has been said before — not that there aren't plenty of Americans still oblivious to anything other than gas prices. Quinn does ignore the politically incorrect causal factor described by Steve Sailer, of the federal government leaning on bankers and mortgage companies to give loans to unqualified owners of brown and black skin, ultimately treating them to affirmative action bankruptcy. All in all, though, it's a tidy summation of the reasons you can expect a hair-curling depression, arriving on time on Track 09.

Such warnings, even if they turn out to be a scrap exaggerated, are timely and worthwhile. But life has to go on. What should we do about the mess we've created?

I'm afraid as the storm washes out the levees, to borrow Quinn's metaphor, the mass media will offer their readers and viewers advice that sticks to a few carefully scripted clichés. Live within your means. Pay off your credit cards. Make a budget. Put tape around your windows to lower heating costs.

Well, duh. Yes, individuals — especially those who have spent frivolously with borrowed money — need to take a cold shower. Yes, you should pay off your credit card balances, assuming you have any zlotys to pay them with.

But while citizens (an archaic word that has been replaced by "consumers," and which needs to be revived) may have no choice but to learn responsibility, it shouldn't stop with them. Washington, and its 50 microcosms here and there, must take their medicine. I'm afraid on that side you will continue to see denial, clinging to bad practices, and resistance to penitence long after individuals have seen as much light as they have to.

May I offer a few "big picture" reforms that will help us as a nation get through the Slough of Despond and maybe even become a creative, solidly based society again?

1. Stop using our armed forces as agents of nation building, social work, bandage application for failed states, and referees among psychopaths who have had a falling out with each other. Resuscitate the idea of a military for defense. By all means, strike back at anyone who strikes us or credibly — that's C-R-E-D-I-B-L-Y — threatens to. But quit putting our own citizens (that word again) in danger of life or limb in service to an ideology.

2. Get the country out of the rescue mission business, at least as far as it consists of taking in refugees and immigrants from everywhere (i.e., about 75 percent of the world) where folks are dissatisfied with the status of their quo. Let them have a goddamn revolution instead of buying a plane ticket into our soft-hearted welfare system.

3. Build a fence and a 50-foot free-fire zone on our side of the border. Stop the anchor baby racket once and for all.

4. Make "program" (as in government p-----m) an unspeakable word. No more tax money to support p-----ms for inner city ping-pong recreation centers, remedial hairdressing, target shooting classes for the blind, signing interpreters for mime shows and orchestra concerts, enriched classes in earthworm studies for grade schoolers, No Teachers Union Left Behind, toenail fungus awareness outreach, parenting courses for at-risk pre-teens, video game rooms in public libraries, santeria-based speech therapy, mentoring for geriatric middle school dropouts. Spend tax money, if anyone has any remaining lolly to tax, on infrastructure projects, nuclear power plants, birth control for the poor, death-ray guns to arm border guards, and books to replace every school computer by 2012.

5. Abolish the Federal Reserve System, which has become a money counterfeiting operation. Back every dollar bill with a dollar's worth of gold. If the government can't afford to buy any more gold, let it stop printing dollars until it can. Quit inflating our way out of government debt.

Let the games end.

I have a dream about the latest crisis

Imagine if you can — yeah, I know you can't — that the President of the United States steps up to the microphone at the news conference and says:

"Good morning. I've just met with my national security team to discuss the crisis in Georgia. We concluded that it is an unfortunate situation in which various groups that have been at odds with one another for hundreds of years are in conflict. We'd like to see them sort it out with no more violence.

"However, my national security team tells me that there is no national security issue for the United States. Therefore, it's none of our business. Thank you."

Taking that position would not prolong the crisis for one additional minute. The sides would settle it however they are going to settle it anyway. The world, which perceives the United States as a worldwide whip cracker and knuckle rapper, might cut us a little slack for once. And no one involved in the conflict would feel seriously that we had taken the other's side.

Bush can bluster, as he did yesterday, "We insist that the sovereignty and territorial integrity of Georgia be respected," but no one believes the United States is going to go to war with Russia over a former patch of the Soviet Union that most Americans confuse with our own southern state.

Bush's insistence means nothing. Russia knows it, Georgia knows it, Japan knows it, New Guinea knows it, anyone who bothers to notice knows it. All Boy George has done, once again, is antagonize another country (Russia, in this case) for the sake of the neocon fantasy of "democratization."

I am more hip to the politics and sociology of former Soviet republics than 95 percent of other Americans, including Congress and national security experts; I had even heard of South Ossetia before this latest flap. Not that I have any academic or professional background in the region; I read about South Ossetia in a novel by John le Carré.

That's not much, I agree, but it still gives me a little edge. And I say that this is a fight between the usual political gangsters, with the usual helpless ordinary people caught in the field of fire. Georgia is not Belgium being overrun by Germans in 1914. It is no more the plucky little democratic state victimized by Russia than Russia was a beacon of democracy victimized by Germany in 1941.

I'm not arguing for pacifism or isolationism, or that there can't be threats to U.S. national security half a world away. But we should get over our spring-loaded tendency to think we must fix every problem, and support the "right" side, wherever there is trouble. And we should get over our latent anti-Russian bias left over from the Communist era. Russia is no model of good government, but it's no worse than a hundred others. No doubt it has its own latent anti-American paranoia. We don't have to feed it.

Standing above the rubble

Recordings of classical music traditionally represent about 5 percent of all recordings sold. Of that 5 percent, I would guess that historical classical recordings are in the vicinity of 5 percent. That is, 5 percent of 5 percent.

I'll confess to a preference for relatively modern recordings (say, from the 1980s on), with a slightly guilty extra pleasure in sonic state-of-the-art discs. I'm easily seduced by the audiophile labels: the American Reference Recordings and Telarc, the Swedish BIS, the English Hyperion and Chandos, the Dutch Channel Classics. There are those who would say I'm trading sound for performance quality, and in a few cases (though certainly not all), they're right. They'll say I'm missing out on some truly extraordinary performances from earlier years, and they're right.

There's a legitimate case for a bias in favor of very good modern recordings. Music, after all, at its most basic, is sound. It's more than that, of course: elaborate relationships of different sounds. But, even considering only classical orchestral music, if you do not hear something close to the actual timbre of the instruments, the variable tone colors that players can produce, you are not truly hearing the music.

That's doubly true for the compositions of superb orchestrators like Mahler, Richard Strauss, and Ravel. In a drab, flat recording, you don't hear the full measure of sensuousness, resonance, tingling, menace, drone, chant, purr that an orchestra can produce and a talented conductor can tease or urge from his musicians.

Still, I cherish many recordings from the greats of earlier generations -- Bruno Walter, Pierre Monteux, Walter Klemperer, Herbert von Karajan, and others. (What about Toscanini, you ask. Sorry, for me he doesn't make the cut, although it's possible the sound of his RCA recordings, universally acknowledged to be dry and hard, could be a factor.) Their performance styles tended to be more varied and individualistic than those of today's international-minded, jet set conductors. (Globalization is as much a phenomenon in the arts as in economics.)

Videos of "old master" conductors, unlike sound recordings, are thin on the ground. Curious to see what a DVD set subtitled "Legendary Conductors of a Golden Era" offered, despite my loathing of the hype words "legendary" and "Golden Era," I borrowed the release from Netflix. Well, to be precise, half of it; for some reason, Netflix provides only one disc out of a two-disc set.

Three of the conductors on the available disc, Wilhelm Furtwängler, Evgeny Mravinsky, and Sergiu Celibidache, are cult figures. The others -- Willem Mengelberg, Erich Kleiber, and Charles Munch -- still have a solid reputation among the cognoscenti, but are marginal even among most classical music listeners. I had heard one recording led by Mengelberg and have one or two by Furtwängler, Mravinsky, and Munch in my collection. All I knew about Erich Kleiber I read in a detective novel by Nicolas Freeling: Kleiber's cemetery memorial has inscribed on it only his name and the musical symbol that means "rest."

The DVD is admirable. It includes long performance segments -- in contrast to the PBS talking-head style of musical documentary, where you get a 30-second snip of performance and then three minutes of an expert telling you how wonderful what you heard, or didn't hear, was. The sound quality of most of the sessions is good for their respective ages. The oldest are of Mengelberg conducting the Concertgebouw of Amsterdam in 1931 and the Berlin Staatskapelle a few years later.

It occurred to me that in both of these accomplished ensembles, at least a third of the musicians must have been Jewish. Within a few years, they would not be permitted to perform professionally. Eventually, no doubt, some of these men and women (yes, there are women visible among the players, and not just the harpists) who turned dots and lines on paper into glorious, inspiring sound would be shipped off to slave labor and death camps.

This video includes a session in which Sergiu Celibidache, the Romanian conductor, leads the Berlin Philharmonic in 1947. I'm inclined to see the hand of God in this being filmed and preserved. Celibidache conducts an electrifying Beethoven Egmont, but that's not what will stay most in my mind.

He and the orchestra perform in, literally, a ruin. It might be the remains of a factory, or maybe all that was left of the Philharmonie, Berlin's premier concert hall, destroyed in an Allied bombing raid in 1944. (Unfortunately, when you rent a DVD from Netflix, you don't get the notes that were included with the original packaging.)

The podium consists -- I'm serious -- of rubble with a square of wood atop it.

It looks like a concert at the end of the world. Nevertheless, you wouldn't know it from the conductor.

Sergiu Celibidache

Celibidache is dressed au galant. He would have looked perfectly at home at the head of an orchestra before the war -- the war, the 1914–1918 one that kicked off Europe's descent into the abyss. He's turned out elegantly tailored in the traditional 19th century swallow-tail coat, with a contrasting light waistcoat; white pocket handkerchief; wing-collared shirt; striped tie; cuff links.

He inhabits his role to perfection. Later he would become (as the video shows in later segments) chubby, then corpulent, but in 1947 when there wasn't a lot of food to go around in Berlin, he was slender, his face bony and handsome. When he waves the conductor's wand and tosses his head dramatically, curly strands of hair swing over his forehead, Jerry Lee Lewis–style. If this was the beginning of the Celibidache cult, you can understand why he captured attention.

Some would complain, and probably did at the time, that playing the part of the ultra-well-dressed gentleman, what the English call a "toff," was in bad taste. Berlin had gone through a dozen years of Nazi rule, six years of war, three of regular bombardment, followed by a Red Army storm of rape and pillage. What was left of the city was still full of beggars, the crippled, the hungry.

I don't know what was in Celibidache's mind, but I suspect he knew exactly what he was doing. He was attired as someone in his position would have been before the continent went mad. He was bringing to life noble and affirming music, for an audience who — whatever their sins before and during the war might have been — felt it worth their while to cross the twisted and heaped wreckage of Berlin, perhaps spending money they could ill afford to attend the concert, so they could hear again what the human race is capable of at its best.

Like Beethoven whose music he set soaring, Celibidache was shaking his fist at the thunder and lightning. He was saying in music's wordless but profound language: civilization is unquenchable. The forces of evil shall have no dominion. They can unleash the horrors of war. They can kill artists. They can kill anyone. But they cannot kill this.

In our time, which many of the more alert are comparing with the 1930s, Celibidache's gesture is no small comfort.

English police's new mission: sex change

Police send 344 officers on sex-change training

— Headline, The Telegraph, London, August 4


Constable Martin Flournoy

Knock knock. "Come."

"Police Constable Martin Flournoy. You wanted to see me, Chief Inspector?"

"Ah, Constable Flournoy. Have a seat."

"Thank you, sir."

"Not at all, not at all. Now, constable, I'll get straight to the point. I understand you're rather fond of women."

"Well, sir, I can't say I haven't made the rounds a bit, checked out the local talent if you follow, but I assure you it hasn't interfered with my duties. Last week I issued 12 summonses for dustbins that weren't smartly latched, arrested a bloke for menacing a burglar who was entering his house — "

"Just so, just so. Keep it up and I can tell you, off the record, you're in for a commendation. Now, constable, you are aware of course of our department's obligation under Her Majesty's Gender and Racial Employment Equality Act, section 133 (a), to achieve absolute equality between the sexes and races by 1st January of next year. I'm sorry to say that our female recruitment drive has not achieved all we expected, and we're looking like being short by seven women police."

"Sorry to hear that, sir. If you'd like me to pass the word down the pub that we're looking for seven more — "

"Ah, constable, we've lowered the height and weight standards for women recruits to three feet and 48 pounds, and still no joy. I'm afraid we can't trust to luck. We're going to have to get a bit proactive here. Now, you've acknowledged you are partial to women. Good thing, that. I'm asking you to volunteer for a sex change. You'll thank me for it. Off the record, the Home Office has assured me that women will be on the fast track for promotion. You'll have a desk job before you can say Jack Robinson, no more slogging about with dogs wearing booties and that. I understand your hesitation, but change is the spice of life, isn't that what the convict said when they fitted him with the noose, ha ha?

"Not to worry at all, old son. We have a special training course to get you sorted for life as a woman. Very qualified instructor, she's a tough old bird but fair. Well, that'll be all for now, constable. Does 'Martina' suit you?

"Oh, one more thing. I'm afraid our racial equality target isn't quite on, either … ."

The move is in response to one of their colleagues undergoing treatment to change from a 42-year-old married man into a woman called Lauren. But senior officers have said it constitutes "political correctness gone mad" to have staff on anti-discrimination training when they could be out on the beat.

A total of 510 staff - including 344 police officers - working for Humberside Police in North East Lincolnshire received a letter from the chief superintendent saying they had to attend the half-day training course to help PC Lauren's transition.

Am I the only one who's fed up with the phrase "political correctness gone mad"? Gone mad? As though p.c. is a thing of beauty unless it's pushed too far?