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COGENT PROVOCATEUR:
free agent, loose cannon, pointy stick ... taking an imposing analytic toolkit out of the box, over the wall and into the street ... with callous disregard for accepted wisdom and standard English

reading tea leaves from original angles, we've led with uncannily prescient takes on the federal surplus, the dotcom crash, the "Energy Crisis", the Afghan campaign, the federal deficit.

More where those came from ... stay tuned.


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NOTE to READERS:
All "major" articles of older material have now been imported, some with updates worth perusing. We'll keep it all on the main page for a while, will add a few loose pieces of history, will trim the main page and index the archives for convenience later.


OUR DEPARTMENTS:

the COGENT PROVOCATEUR:
free agent, loose cannon, pointy stick ...
CAMP ENRON:
... gateway to the next Progressive Era?
Some say it's nothing but a train wreck ... roll in the big cranes, clear the track, see what the crew was smoking. If I thought so, I'd not be writing this ... and if they thought so, they'd not be drumming so hard.


OTHER GOOD STUFF:
Many thanks to Tony Adragna and Will Vehrs, still shouting 'cross the Potomac at QuasiPundit. Early Camp Enron material can be found in QP's Dispatches department.
Tuesday, April 23, 2002

 
--- The French have Spoken! What does it all Mean? ---

Yesterday, the Blogosphere's overgrown right hemisphere chirped and clucked approvingly over a rightist's upset victory in the French Presidential derby. ("Victory" means finishing second with 17%, putting Le Pen into a runoff with incumbent Chirac.) In Germany, conservatives surged as governing Social Democrats sank. In Hungary, Right outpolled Left, even as Left displaced Right at the Top.

Informed analysis soon quashed the "right ascendant" euphoria. Some took the event as pretext for comparative analysis of voting systems (see this by Sasha Volokh). InstaPundit is trying to leverage that angle into a rear-guard defense of the Florida Fiasco.

Is there any rightward shift? In France, no. In Germany, less clearly no. In Hungary, no. But something shifty is happening.

In France, 40% of the votes went to parties with no seats in the Assembly! Assorted leftish greenish vehicles shaved the near-left candidate's numbers to a third-place 16%. Trotskyites topped 10%.

Germany's rightmost major party (Free Democrats) gained just enough ground to vie with near-left Social Democrats as prospective coalition partners for near-right Christian Democrats. At the other end of the teeter-totter, Democratic Socialists (the party formerly known as "Communist") out-polled Social Democrats

What's the pattern? The center lost mass to the extremes. (As Volokh notes, it's hard to confirm this from raw vote totals. Sampled discourse is a better guide.) 2002's popular themes include nativism, grudging anti-global/anti-EU reaction, law-and-order xenophobia, diffuse economic malaise, acute fingerpointing, disparagement of elites. Most consistently -- regardless of ideology -- the in-party lost support.

Europe witnessed something similar a while back. A directionless politics of discontent -- reaction to the vertigo of "modern times", craving for security, trumped-up nativism/nationalism/nostalgia, impatient populist disparagment of governing parties -- dominated the run-up to World War II.
Elites caught blame for everything, especially immigration.

Immigrants and off-white minorities (especially Jews) caught blame for everything, especially "disorder".

Governments of the Left and Right won control and lost popular support in rapid succession, swinging farther out with each cycle. Left and right became increasingly hostile and fearful, and the center was hollowed out.

Elites readily mastered the fingerpointing process and artfully defended their interests by deflecting attention. They promoted classic values and virtues as tonic for decadence, police discipline as a antidote to insecurity, comic-opera militarism as a shield against uncertainty. Vulnerable subpopulations paid the highest price.

Many contemporaries saw Hitler's ascendancy as a pragmatically favorable development, even as they deplored his style. ("Many" included many in the US ... legacy names like "Bush", new-money names like "Kennedy", plutocratic house organs like the WSJ.)
Contrary to the myth of "appeasement", Germany at the onset of hostilities was [with one unimposing exception] surrounded by like-minded antisemitic, anti-Stalinist, law-and-order rightist regimes.

Does the analogy fit perfectly? Of course not. Does history repeat? Not exactly. Can it happen? Yes. Must the pattern run to completion? Maybe, maybe not. Can it happen here, too? Maybe. Maybe it already is.



Monday, April 22, 2002

 
--- Jenin Photos: a Rorschach Test ---

[via DailyPundit, via Kathy Kinsley's Bellicose Blogwatch]

Israel's Ministry of Foreign Affairs offers a spread of high-altitude photography in a bid to dampen media reports of Jenin devastation.

The bellicose blogosphere proclaims "case closed, media guilty as charged". OK, but see for yourself. The latter shot leaves an "after" impression of destruction that exceeds my own "before" impression (as an avid news-junkie absorbing multiple ground-level reports), and kicks it up by about one order of magnitude.

This says something about "bias", reflexivity, and other people's impressions of other people's impressions. Up to you to decide what that is.



Saturday, April 20, 2002

 
--- An Alternative McCain Alternative ---

The buzz-o-sphere is buzzing (Green (WaMo), Chait (TNR), Kaus, Marshall, Curry (MSNBC)) with talk of McCain 2004 (D). Whatever McCain does to make his next mark on history, that won't be it. Nor will McCain 2004 (I), which would only sew up re-election for his nemesis GWB. Nor McCain 2004 (N), a New Party candidacy as a midcourse maneuver in some historic two-party realignment. Realignment may lie ahead in a post-Enron Progressive environment (see Camp Enron Report), but it's not ripe for execution and the calendar does not wait.

McCain is the lone eagle, the gadfly, not the Lion King. He's an attractive nominee but a dicey candidate ... easy grist for any Rovian attack mill ... and it'd take some fancy dancing to capture the DLC center while buying off the left's legacy quitclaim. McCain's attained age is a problem for this sort of venture, certainly for two full terms, and he has overhanging health (read "Cancer") questions.

McCain might give it the old college try it if he could see how one campaign and one term would break the DC deadlock and create a desirable forward configuration. That means stroking a perfect combination shot to sink the immediate object ball AND set the table for yet another tricky combination shot. A master of the game might attempt such a shot just for show, or just for spite, but nobody plays that parlay for keeps.

Finally and decisively, if McCain really wants to play big, he has a better play on the table ... a play with fewer obstacles, more margin for error, better safeties, more elective tempo, and more immediate results. McCain can control the Senate. Today. McCain allies can take the House. Tomorrow. These moves in turn would lubricate the emerging recoalition of politics writ large -- whatever that turns out to be.

Let's defer the Why and look at the How.

The Senate could not be more narrowly divided. A lone Dem-aligned Indy tilts the balance against the half-vote VP tiebreaker. Disaffected outliers and/or hedge-prone vulnerable incumbents sit in both caucuses. GOP leadership is a laughing stock, weakened further by this week's website fiasco and ANWR massacre. Majority leadership (better, in my book, than either side gives it credit for) is pinned down in defensive positions. Routine business is stalemated, a tsunami of new business looms on the horizon, and both sides are working from dusty post-Cold-War and post-Great-Society playbooks. November elections -- too close to call -- will decide everything ... or leave everything undecided.

In this landscape, a cohesive Spoiler Coalition , playing one wing against the other, can write its own ticket: reorganize the Senate, set the agenda, marginalize the polar extremes, and resettle a bombed-out centrist no-man's land.

The S.C. could be as small as three votes, so long as one of those votes comes from the GOP. (Non-McCain formulations are also possible ... adding impetus for McCain to act preemptively.) McCain carries a unique advantage -- grassroots clout that could decide most of November's tough races. It's not clear that McCain has the option of being "Majority" Leader ... that could depend on pulling votes from one pole or the other ... but he certainly can decide who gets to be Leader.

So McCain and any two Democrats (details elided) can call the tune. Leveraging and bargaining from this base, the S.C. could rapidly integrate its few natural allies, and rope in additional support by virtue of power over committee assignments.

What's the S.C. agenda? Pretty much what GWB's agenda should have been in the wake of 2000's split decision. Govern from the center. Reconcile and move on consensus items. Expose and explore emerging questions -- pushing them into public dialogue -- but don't decide them. By all means steer clear of ideological shibboleths, pending clearer direction from the electorate. Fund R&D, pursue efficiencies, and square up the balance sheet so whoever wins the coming battles of hearts and minds will have something left to work with.

The S.C. is free to take one vital initiative neither major party can afford in the current game of "chicken": rescinding or moderating the scheduled Bush tax cuts.

The judicial confirmation stalemate is a high-tension sticking point. No chip shot here, but with current leadership deposed the S.C. could extract a vital concession from GOP moderates -- acknowledgment that they stiffed Clinton nominees for political/ideological advantage. This simple admission of the obvious would set the table for negotiated settlement along lines already suggested by cooler heads in both camps.

Can Spoilers rule the House? The scenario here is messier, and there's no nuclear figure like McCain ... but there are more than enough pieces in play. Control is narrowly divided and sharply polarized. Centrists are marginalized. GOP moderates chafe under the Hammer. Fiscal conservatives have deep disturbing doubts about where the surplus went. The next election may bring even narrower margins and worse division. A parallel demonstration in the Senate -- and the threat or actuality of McCain's magic touch in swing districts -- puts it in reach.

What comes next? Not unity ... not consensus ... certainly not one-party politics ... but strange and wonderful things. Debate breaks out on debatable issues. Familiar coalitions fracture on multiple pivot-points, and reform on multiple centers. Candidates speak their minds. Pundits enjoy the best days of their lives. And History grinds forward.

Sure, McCain can set himself up to get run down by somebody's campaign juggernaut. Or he can sit stewing and sniping from the margins. Or he can make the big play, kick-start the reformation, and give Bush political indigestion. Yes, it's playing with fire ... but what isn't?



Wednesday, April 17, 2002

 
--- Islamism and Sophomorism ---

New release of old (December?) tape/transcript shows Osama bin Laden crowing about damage inflicted on US by 9/11 attacks. His understanding of the enemy is an amusing mix of knowledge and naivete, properly labeled "sophomoric" (the fundamentalist extreme would be "Sophomorism").

Osama rattles off his analysis of our economic losses ... stock market lost 16% of $4T, worst in its "30 years" (suppose he means NASDAQ) ... USians too depressed to go to work, at $20B/day ... total economic damage around $1T.

[2002-04-18 UPDATE: Foxs News offers this partial translation (other accounts may differ):
capital is $4 trillion ... multiply this number by 16 percent. ... $640 billion. ... equal to the Sudanese budget for 640 years. ... daily national income equals $20 billion. In the first week ... they were shocked and people did not go to work. So if we multiply $20 billion by 7 days, that is $140 billion. Every day, that's because of God's generosity ... add this to $640 billion, we reach almost $800 billion of losses every day
Charming ... though I've heard worse financial analysis from get-rich-quick touts and Social Security privatizers.]


Yeah, some of that happened, for a while. My wish for Osama is that his WSJ kept arriving like clockwork, and that he lived long enough to witness the recovery. At the end of the day, 9/11 was a mere economic ripple. That's gotta hurt a mastermind's ego, maybe even more than TaQ's losing streak.

However, America should hear the echo of their own whining in bin Laden's tone of triumph. Overwrought US reaction to the pinprick attacks of 9/11 sends a message loud and clear to bullies everywhere: "KICK ME".

We presented ourselves as hypersensitive to the ordinary shocks of life in the big leagues ... acted like we're the only ones who ever had a bad day ... nursed imaginary grievances against more sober friends who failed to sign on to our inflated perspectives ... insisted on universal support, even as we insisted "we don't need you, we don't need anybody".

Advertising a low threshold of pain and delicate emotional constitution, we stoked the payoff matrix for every fanatic for every cause for the foreseeable future, enhancing our already-marked stature as the most attractive target on the globe. We played Martyr, and this will cost us dearly in years ahead.

Matter-of-fact, show-em-what-you're-made-of, get-up-and-dust-the-other-guy stoicism would have reduced our future exposure to terrorist incidents. Solemn resolve is by no means foreign to the American character, but I'm afraid hyperbolic lamentation played better in Peoria ... Sophomorism, American style.

In quite another venue, C-SPAN aired Graham Fuller's talk at this week's USNA Foreign Affairs Conference. Fuller is a CIA/RAND greybeard, expert on Middle East, Central Asia, and the Muslim world. You don't want to hear what Fuller has to say.
He'll tell you the world you live in is more complicated than the one you prefer ... "obvious" direct solutions blow up in your face ... not everyone who digs you is your friend, not everyone who dumps on you is your enemy ... you can't do just one thing. The kind of things you always knew were true ... just things you never want to hear. Resist, and he'll bury you in supporting detail.
One especially provocative thesis: By default, Islamic fundamentalists are the vanguard of democracy in their respective settings. Kingdoms, military regimes, one-party democracies can stamp out political movements ... but they can't go in and crush the mosques. All the natural "juice" that flows into asking "why aren't things different from the way things are?" ends up pooling and souring in fundamentalist cellars.

Why hasn't real democracy evolved? For one thing, we never backed it when it stood to pick the wrong guy (cf. Venezuela) -- we had plenty of chances -- and given the lay of the land, it'll almost always pick the wrong guy first.

Meanwhile we sit over here in blogworld, sophomorically asking "why aren't things different from the way things are?".

Overall, Fuller is less than optimistic about where all this goes from here.



Tuesday, April 16, 2002

 
--- Foreign Direct Investment in US Overestimated ---

WSJ spots a Federal Reserve Board of Governors (pdf) study (Warnock and Cleaver) that tests the accuracy of commonly used data transnational capital flows. Foreign holdings of US securities appear overestimated, US holdings of foreign securities appear underestimated. Net foreign investment is thereby overestimated by about $600B, which would explain a lot of things that didn't add up ... and incidentally, would take even more air out of Business Week's "Restating the '90s" thesis.



Monday, April 15, 2002

 
--- "Thongs Join Anti-Israel March in Germany" ---

... from Sunday's NYT (print edition). I thought it might involve proving you're not wearing semtex in your shorts ... or emphasizing support beyond modest Muslim community confines ... or maybe a 1930's Cabaret-style melange of decadence and antisemitism.

Alas, "Thongs" is amended to "Thousands" in the current online edition.




 
--- Flashback: Watergate, Venezuelan Style ---

Venezuela's coup-coup political process raises a memory of friends gathered to witness a unique moment in US history -- resignation of a sitting President.

Our group included a Venezuelan graduate student, visibly upset. "This is terrible ... when you disgrace the President, you disgrace the Nation."

"OK, Theddy, what would your people do if their President directed crimes against the election process itself?"

"I am not so sure ... somebody would have to shoot him, but I am more than sure we would never disgrace him."




 
--- Condi on Venezuela: "No Witch Hunt" ... Fat Chance! ---

For a few hours this week, Venezuela was a country club Republican wet dream: no-nonsense generals toss out a left-leaning doofus (Hugo Chavez) and install the Chamber of Commerce chairman (Pedro Carmona) as head of state. Castro loses a friendly neighbor, the border confining FARC to Colombia is tightened up, the flow of oil is guaranteed.

Few Americans were even aware of this drama, and most of those applauded. Democracy and Rule of Law are honored principles, but the Having Our Guy Win Principle apparently trumps them both.

Official Washington affected a not-very-convincing pose of smug nonchalance ... even as a military clique dismissed the legislature, cabinet and courts in Latin America's deepest-rooted democracy. Uncle Sam was first to recognize the new government ... doesn't look like there was much of a crowd!

A funny thing happened on the way to the inauguration. Middle managers in government, commerce and the military itself refused to get with the Carmona program, while pro-Chavez and pro-democracy demonstrators massed and defied military authority; blood ran in the streets (again). In a still-fluid situation, Chavez (associated with a failed military coup in 1992, BTW) is back in office.

Hey, kids, what time is it? National Security Advisor Condoleezza Rice says it's time for Chavez to reflect on his own shortcomings ... and most emphatically, "no time for a witch hunt". Interesting she should bring that up. Who is Condi to tell Venezuela when it is or isn't time for a witch hunt? Is she afraid some particular witch will get burned? "Don't look over here".

Carmona's cover story is already shot full of plot holes. The coup was explained as an emergency response to Chavez loyalists opening fire on peaceful protesters ... but the timeline shows coordinated elements of the putsch rolling into position before the shooting starts ... the "spontaneous" protests smell of astroturf ... and it seems there was gunfire from the "peaceful" crowd. Is it conceivable that shooters in the crowd -- or shooters on both sides -- were agents provocateur?

Expect a witch hunt with real witches. Expect a growing trail of documents, e-mails, confessions, disclosing a year-long game plan with the "hit and run" sign given in Washington and received in Caracas. Expect heads to roll in more than one capitol. Expect adverse consequences for "Plan Colombia".

Expect Otto Reich, US point man on Latin America, to get intense scrutiny in belated "confirmation" hearings. (Denied Senate confirmation, Reich -- who qualifies as a terrorist of global reach by my read of the Bush Doctrine -- obtained a recess appointment in January. For background, google on "otto reich" and "appointment" ... take your choice of sources.)

Don't be surprised if Venezuela's trail of bread crumbs leads to an old-school US destabilization scheme ... provoking the fall of a regime by artfully vandalizing the underlying economy and other basic institutions. In theory, this witchcraft enables us to flip regimes until we get one we like. "Oops! Hit the clicker again, Otto." In practice there are downsides ... one being that most of the world learns to despise us ... another being the trail of residual failed states.

Don't be surprised at anything. Don't be surprised if some NSC staffer smuggled "smoking gun" documents out of the office in her underwear. Don't be surprised if NSC witches and their flying monkeys return to Caracas to finish the job. And don't be surprised if all this culminates in a large-scale reversal of US fortunes in Latin America.

What's ahead? There's no break in the pattern of narrow, self-serving elites played against the occasional counterpoint of bungling left-wing screw-ups. Democracy fails in Venezuela either way. In Argentina, the economy and polity pancaked in parallel. Brazil progresses uncertainly, with death squads patrolling the internal border between development and destitution. In the past two years, governments fell in Peru and Ecuador. Paraguay parried a military coup. Chile is still suffering flashbacks from the current market democracy's terrorist roots. Colombia is going to failed-state hell in a handbasket. Only Uruguay and Bolivia are stable (save for the occasional provincial uprising or tribunal over CIA "Dirty War" crimes). Are we going to reach in and "fix" things every time the wrong team scores?

Why do so many turns of history catch us with our chips stacked on the retro-colonial side of the table? Wouldn't the Cold War have gone better if we played the progressive side in more local mindshare markets? Why do we give in to the urge to short-cut Democracy's messy correction cycles? Isn't our mojo strong enough to abide by the "pot luck" results of self-determination elsewhere?

On the other hand, maybe it is our duty (as global hegemon) to appoint heads of state around the world. If so, shouldn't we choose 'em democratically? Assign four-year terms on a rotating schedule, and hold a US election for the president of a different country every Tuesday. It'll create ready filler for slow news days, and gradually prepare US voters to carry the full weight of their solemn responsibilities as imperial sovereigns.



Wednesday, April 10, 2002

 
--- Restating the 90's? As You Were, Everybody! ---

CP appreciates an eyebrow-raising contrarian reassessment as much as the next guy ... well, OK, more than the next guy. We gave pre-publication, sight-unseen notice [2002-03-22] to Business Week's "Restating the 90's" cover story by Michael J. Mandel, suggesting "A lot of things happened that defy the conventional wisdom about the decade". [See article online here ]

As you were, folks ... having read and re-read the article at leisure, CP has to go with CW over BW.

Headline CW-defying eyebrow-raiser: "the real stunner is this: The biggest winners from the faster productivity growth of the 1990s were workers, not investors. In the end, workers reaped most of the gains from the added output generated by the New Economy productivity speedup."

Stunning! Astonishing! Incredible! And we mean incredible in the most literal sense ...

Mandel's "stunner" thesis is not explicitly and falsifiably defined ... nor are the operative terms, or methodologies, or supporting data. Many cites are sourced merely as "BW". As a student paper, this wouldn't be grade-worthy. CP believes most attempts to construct this thesis explicitly and support it empirically will fail.

We won't thrash out all the potential problems in this short piece, but ...
When did the 1990s start and end? (From context, we infer March 1991 through December 2001. We also infer January 1993 through September 2001, among others.) Are the end-of-decade data preliminary or revised? Are we simply comparing endpoints to endpoints of jiggly time series? What do we get from slightly different endpoints? Or weighted aggregates? Or "balance sheet" endpoints? Or regression lines? Are the selected endpoints comparable (or are data appropriately adjusted) in terms of the business cycle? Where is that danged business cycle, anyway?

What's our definition of returns to labor and investment? What's labor? What's investment? By what transmission mechanism do we assert that productivity gains flowed first to labor, and lower interest cost flowed first to profits? Doesn't higher unit productivity reduce labor's scarcity value?
In as far as meanings and methods are disclosed, they are suspect in many dimensions. We went looking for data to support the most specific relevant subordinate claim ("workers received 99% of the gains from faster productivity growth in the 1990s at nonfinancial corporations"). Our surmise is this is derived from this recent BLS release.

Here we find Q3 2001 output per labor hour (productivity) at an index level (where 1992 = 100) of 121.2, unit labor costs at 114.0, and unit profits at 99.6 ... looks like labor cleaned up while investors got soaked! But looking at Q3 2000, we find profits leading at 135.8, productivity at 119.6, and unit labor costs lagging at 108.5. Pick your endpoints, choose your results.

Over here we find output at 142.1, compensation per hour at 141.8 for nonfarm business sector. Is this Mandel's 99%? Hope not ... one's an aggregate, the other's a rate, one's real, the other's nominal. But without definitions, methods and data, we're shooting and/or shouting in the dark.

In other paragraphs we understand that exercised stock options are included as returns to labor, while market appreciation is subsumed in returns to investment. Translation: if I started a dotcom on a shoestring, exercised $1B in options at the top, and (perhaps foolishly) held on while the resulting shares tanked, I've put +$1B in the "returns to labor" column, and a -$1B in the "returns to investment" column.

Taking executive compensation generally as "returns to labor" can be a huge source of distortion. It comprises a not-insignificant share of personal income, whose receipt tends to coincide with ownership, depend on earnings, and otherwise behave more like a return on capital.
In this writer's nonstandard view, most CEO compensation is properly treated as a rent/ransom on franchise, not as a factor price on labor or capital. The CEO's chair is a valuable seat, held king-of-the-hill style by a sole occupant empowered to exact tribute from the enterprise. Price-setting for CEO's is akin to price-setting for shortstops -- pure seller's-market rivalry for the best candidate, rather than proportional competition based on imputed contribution margin.

CEO rivalry in turn is accentuated as enterprises operate in rivalrous (rather than competitive) markets ... again the franchise holders (top 2 or 3 brands) are empowered to extract exceptional gains and crush/assimilate also-rans. The governing dynamic is rivalry for rank (and its privileges), not competition for returns scaled to cost-effectiveness. Subordinate exec's live under the CEO's price umbrella.

Thus the lion's share of US executive comp is properly scored as an interception of returns to capital (or conversely, a fumble of shareholders' gains-in-hand), with displacement effects on returns to ordinary labor.
Mandel's argument jumps around quite a bit. It contrasts the 90s to the 80s, capital to labor, speculative to substantive gains, short to long rates. The home-ownership boom is cited as the "most tangible sign of worker gains", but the narrow demographic segment in which all these gains occurred is not mentioned. Convenient narrowly-selected data are cited to support the thesis of widely-shared gains. The transient nature of Asian and Euro business cycle effects on US jobs, investment, interest rates are shrugged off. Real estate returns seem to be included or excluded as convenient.

Declining S&P appreciation is cited ... is it relevant? The index reflects a subset of prevailing sentiment regarding returns and alternatives in future decades, not the 1990s. Posing non-speculative models of return on capital, we'll face a host of reasonable but ticklish questions. What about real value of book entries? What about all that M&A goodwill overhang, now being furiously written off? What about the fiber and dotcom bubbles, where real streams of capital were extracted and accreted to build real (tangible/intangible) facilities that in retrospect are seen to be worthless? Maybe we had enormous positive returns on capital, offset by enormous negative returns on stupidity.

A number of center-left reviewers have praised Mandel's conclusions as vindication of the Clinton program. [2002-04-16 UPDATE: Mickey Kaus indicates Sid Blumenthal has been scurrying around pushing this interpretation.] From my perspective, the Clinton program restored competitiveness, productivity and growth ... but it has not (yet) conveyed substantive returns to those who worked hard, made concessions, set aside misgivings, and played by the rules.

The 1990s were a great decade, and the US economy is robust enough to support generous returns to capital, labor, pirates, taxmen, irrational exhuberators, retirees, and the war effort. But -- admittedly not having wrung out all the numbers -- CP suspects we can scour NIPA, or household survey balance sheets, or aggregates of OASI covered wages, or post hoc analysis of income tax receipts, or most anywhere else we might look -- including the BW article -- without finding robust confirmation for Mandel's CW-defying thesis.



Saturday, April 06, 2002

 
--- Executive Compensation Still Ramping Up? ---

FT reports William M. Mercer initial surey results indicate big-league CEO compensation increased 2% overall in annus horribilis 2001. One factor: 9/11 created excuses for bad results, which created excuses for compensation committees to be flexible in interpreting their a priori executive bonus formulae.

Don't get excited, it's only preliminary small-sample data.



Friday, April 05, 2002

 
--- Connelly's Conundrum ---

Joel Connelly -- a fine Pacific Northwest regional columnist -- notes a curious divergence in energy industry attitudes to emerging technologies:
Since 1982, the cost of wind energy has come down from 20 cents to 4 cents ... The rivers were harnessed, starting in the 1930s ... Detractors spoke scornfully of watering and electrifying sagebrush. ...

Utilities charged headlong into the nuclear fiasco. But with the new technology, they are putting fingers to the wind.
In background developments, a leading European windfarm vendor relocates global HQ to Portland, Oregon, and Florida Power & Light's WA-OR Stateline Wind Project is dedicated.

"Nuclear fiasco" refers to WPPSS financial disaster -- five plants started, one eventually brought online, we're still paying for the others.




 
--- Solidarity Effect Update ---

Confirming the previous item, Per Karlyn Bowman's POLLitics feature in Roll Call, favorable ratings for both parties in Congress have backed down to 47/47 in March, from post-9/11 highs of 67/68 in October. Solidarity is transitory.

Another indicator -- purely anecdotal -- most of the folks who dove into the emotional shelter of post-traumatic relationships after 9/11 seem to have jumped back out again. YMMV.




Wednesday, April 03, 2002

 
Speaking of groupthink ... time and tide turned against GWB while nobody was looking.

Sept. 11 brought a tsunami of American solidarity. Under external threat, any group tends to pull together ... minimizing internal differences (and recognition or expression of same), exaggerating external differentiators ... standing together, waving the flag, sharing the umbrella, withholding criticism, suspending dissent.

This warm glow of unity was part of GWB's 9/11 "Trifecta" (war, recession, and national emergency), and it's fading out.

Pollsters have decades of baseline on American attitudes to religion. Are you religious? Most subjects say "yes", and this never changes much. Are your fellow Americans religious? Most subjects say "hell, no" ... at least in ordinary times. Are they becoming more or less religious? "Less religious", of course, decade after decade, except in very special circumstances. This series is a robust, sensitive indicator of the solidarity effect.

When threatened and girding for war, we describe our neighbors as religious ... and becoming more so by the minute. (Generally, we answer all questions more positively. Consumer product satisfaction? Great! Job satisfaction? Great! Sexual satisfaction? Great! We're not about to give any lurking foe the satisfaction of knowing we're not satisfied with something.)

Sooner or later this Fog of Harmony lifts. Coaches turn back into pumpkins, public sentiment reverts to business as usual. Reversion happened, just moments ago.

From a Pew Research Center survey:
Is religion's influence on American life increasing?
Mar 2001: 37%
Nov 2001: 78%
Dec 2001: 71%
Mar 2002: 37%
The corner has been turned. We're heading back to the old normal. With the gauzy filter removed, we tend to see our leaders "warts and all" ... maybe even worse.

GWB will not fare well in this harsh light. The recent round of static over steel tariff spinelessness and Middle East policy fecklessness is just a taste of what's to come. In conjunction with the Trifecta, Bush's most severe limitations -- simplicism and an adolescent bellicosity -- served as wellsprings of the decisive confidence that won America's heart.

More later on the Bush43 that might have been ... a decent, harmless POTUS who might even re-center and diversify his party, conciliate and change the tone in Washington, draw support from both sides for a limited agenda ... "a uniter not a divider" who would set the stage for more decisive philosophical playoffs down the road.

Bush now has limited time to cash his chips, and he's gone out on a lot of limbs at once. Maybe he can coast through a favorable November. Maybe not. But you don't win a Trifecta every time out and -- all appearances to the contrary -- GWB is running on empty.




 
--- Welles: Understanding Stupiddity Stupidity ---

One of CP's recurring themes is the examination of Groupthink in all its wondrous myriad forms. Today's topic: Stupidity ... specifically the James F. Welles theory of stupidity.

Welles identifies collective stupidity (and individual conformity) as an essential aspect of human nature ... part and parcel of our overarching need for group cohesion at the expense of informative feedback.

Stupidity is in evidence -- normally in retrospect or at a distance -- when a language/belief/behavior system (schema) is widely held, when the schema is maladaptive (or "premaladaptive", meaning it sets the home team on the road to a big loss), and when a plausible alternative is clearly indicated by available evidence. A few excerpts from Understanding Stupiddity:
One might reasonably expect ... competition and conflict would weed out stupidity ... it seems that competition merely replaces one stupid system with another.

The mind is really a socially conditioned filter which a given experience may or may not penetrate.

... schematic crumbling is simply too ambiguous in the early stages ... Only when the process nears completion, can it be labeled as clearly stupid.

...people function more in a particular way than toward a particular end.

The peculiar thing about human systems is not that they create so much of their own environment, but that they usually create one in which they cannot survive with their belief systems both honored and intact.

the mind is an instrument for belief ... it functions to maintain a schema, regardless of how debilitating that may be.

As knowledge accumulates, so do misconceptions, superstitions, and idiotic ideas and beliefs of all sorts.

Stupidity is not a restricted form of intelligence but a normal mental function in its own right

... language maximizes ... cooperation among members by inhibiting an appreciation of exactly what it is they are doing.

... a popular belief can become extemely popular even if popularity is not directly dependent upon accuracy or veracity.

... systematic distortion of information makes human societies characteristically self-deceptive, with people disposed to believe they are living up to thier ideals, particularly when they are not.

The stupidest thing of all would be to eliminate stupidity completely, as we would soon be at each others' throats in a rage of realism and rationality.
Welles goes on to elaborate the history of stupidity and its proponents, adversaries and victims from Plato to Serpico, in his Story of Stupidity : A History of Western Idiocy from the Days of Greece to the Present (chapter titles include "Medieval Stupidity", "Stupidity Reborn", "Stupidity Reformed", "Reasonable Stupidity", "Enlightened Stupidity" and so on).