January 2009

Rags and Bones


A monthly column by Jonathan Wallace jw@bway.net

Happy New Year

            2008 was a dog of a year. Let’s hope we all have a better one in 2009, experiencing a little time for peace and contentment in addition to an increase in economic and personal security.


Whenever I look up a concept (such as securitization for this month’s lead essay) Google tends to steer me to Wikipedia first. A few years ago there was some doubt as to whether Wikipedia, because user-written, was a fit citation for young people doing school work, let alone the rest of us.

I think that question has been settled. Wikipedia is the biggest peer reviewed journal on earth, and the quality of the expertise seems to me to reach the highest level as a result. This is due to the unique Wikipedia culture as implemented in the technology and is really rather remarkable, when you consider how many other human projects sink to the level of the lowest common denominator.

When I have glanced at topics on which I have a little understanding or expertise, I almost always have the reaction that the anonymous authors were academics or at least individuals whose knowledge well surpassed my own.  Even on low culture matters, such as forgotten actors or old television shows, Wikipedia articles, though not as well written, tend to give you what you need in terms of dates, biography, and links to other sources.

I have edited Wikipedia twice, once to remove some inane gibberish someone had mischievously added to an otherwise scholarly piece on Australian outlaw Ned Kelly, the other time to add an example to a list of pop culture references to a particular folk tale.  For someone relatively nontechnical, the process was well documented and easy to follow.

I would like to propose a phrase, “Wikipedia humility” (I couldn’t find it already in use in the first several screens of a Google search):  The revelation that you don’t know enough about a topic to contribute a Wikipedia entry about it; more generally, the epiphany that you don’t know enough about any topic to write a Wikipedia entry.

The ethics of demanding Mormon resignations

There was an amusing full page ad in the Times recently in defense of all the Mormons who got “outed” as having contributed money to the California initiative against gay marriage. Some of them have resigned jobs as a result. These individuals, who supported one of the great modern acts of bigotry, are now decrying the prejudice against them.

The first case which came to my attention, days after the election, was that of Scott Eckern, artistic director of the California Musical Theatre, a Mormon who quietly sent $1000 to the pro-Prop 8 effort, doubtless never expecting he would be pressured to give up his job as a result.

A bit over a year ago, I wrote an essay entitled “Persecution”, where I analyzed two cases of people who lost their jobs as a result of pressure by the powerful. I noted at the outset that the First Amendment only protects us against government action, not against private blacklisting and censorship. One of the cases I discussed was Debbie Almontaser, who resigned under pressure from a New York City Arabic language school she founded, and the other was Norman Finkelstein, crushed by the odious Alan Dershowitz for his thesis that the Holocaust is exploited to advance the Israeli political agenda.

In my conclusion to that essay, I said:

Almontaser and Finkelstein are examples of people whose careers have been destroyed by intemperate, malicious nongovernmental speech. If we tolerate this, don't fight to defend the marginal and unpopular, then the First Amendment itself becomes meaningless. There is no comfort for those hounded out of their livelihoods in thinking, "Well, at least it wasn't the government."

I have been wrestling a bit with the applicability of my doctrine to Eckern’s case, where I feel an intuitive satisfaction at his resignation. Am I a hypocrite? (You decide!)

Here is my justification.  Eckern’s job required him to deal with many gay people, substantially represented in theatre and in musicals in particular. (Trite but true.) If Eckern holds any biases against the community he dealt with every day, he would have been best advised to keep them to himself.    Eckern’s contribution, a matter of public record, was essentially speech, an assertion of prejudice, yes, prejudice, against gay people. Once it became known that he supported Proposition 8, Eckern could not continue dealing with this community with any credibility. Also, members of this community had a perfect legal and moral right to decide not to permit Eckern’s theatre to perform their work. Why collaborate with someone who does not respect you?

            I don’t see Eckern as resembling either Almontaser, who was hounded from her job based on lies about her beliefs, or Finkelstein, terminated for opposing the politics of Israel. Eckern is more comparable to Harvard University president Lawrence Summers, who left his job after stupidly remarking that women are not as good as men at math and science. 

Eckern and Summers both spoke in favor of the exclusion or inferior status of a group of people. Neither Almontaser or Finkelstein ever did.

This reminds me that I wrote back in 1995 that among the few reasons I would ever reject an article for the Ethical Spectacle is that it  advocates hatred, racism, or violence”.

Is that censorship?

  In your face or in the environment

            The foregoing leads to an inchoate thought, the kind this column was created to express: ragged, not yet well defined, but intriguing.

            Political and ideological debates in America tend to involve two situations, the kind where the behavior we are opposing is in our face and the kind where it is merely somewhere in the environment.

            Racism and bigotry is “in your face” behavior. In the sixties, black people conducted sit ins to desegregate restaurants where they were personally refused service.

            Gay marriage is “in the environment” behavior. Here is a slogan that is probably already on a bumper sticker somewhere: “Oppose gay marriage? Then don’t marry one.” But that’s not good enough for the supporters of Proposition 8. They don’t want any gay person anywhere to be married, even though they don’t have to be involved or personally aware of it in any way.  They don’t even want a gay wedding to take place behind closed doors in a distant place they will never visit.

            On the whole, protests against “in your face” behavior have more moral simplicity to them than protests against behavior in the environment.  In the first case, society asks the question, should human beings be forced to tolerate the personal treatment involved, or is it quite logical and understandable they would feel offended or threatened by it? In the second, we have to analyze the extent to which the group complaining is appointing themselves the moral arbiter—more properly the dictator—of everyone else’s behavior.

            American society went through a self examination in the fifties and sixties which led us to a substantial majority opinion that it shocking and insulting for anyone to be refused service in a restaurant.  We decided that individuals should be spared the personal harm involved.

            But there is no personal harm to  anyone if two gay people marry one another.  Instead of defending their own persons and minds against an insult directed at them, supporters of Prop 8 are claiming to defend something much more abstract, “public morality” or the “institution of marriage”. What it will really boil down to in almost all such cases is one group attempting to impose their own rule-set on everyone else, instead of simple working on observing it themselves.

            It is an interesting side note how this rhetoric gets turned around by the oppressors. A lot of pro-proposition 8 ink has been devoted to the proposition that the gay people, angered by being robbed of the rights granted to them just months ago, are “aggressively” trying to impose their lifestyle on everyone, when the converse is true.

            Bringing this analysis back to the three cases at hand: Bigots in New York did not want Debbie Almontaser, an Arab American and devout Muslim,  in the environment. Alan Dershowitz did not want Norman Finkelstein criticizing Israel, anywhere in the environment.  Neither Almontaser or Finkelstein were in anyone’s face. Anyone who opposed the creation of an Arabic language charter school in New York didn’t have to send their child there. Anyone who disagreed with Finkelstein was free not to read him, or to express their own views in print.

            By contrast, once his support for Proposition 8 was revealed, Eckern was in the faces of the very community he had to deal with every day, as much as a white retailer in Harlem making racist comments to the press. None of the people he offended was required after that to deal with him by bringing him their plays for production. 

            The announcements of several of the leading playwrights and composers that they would not submit their work to his theatre was what led to Eckern’s resignation.   Eckern wanted to discriminate against gay people  and do business with them at the same time. But it doesn’t work that way.


            Before changing the subject, I will defend my comment above that support for Proposition 8 is an act of bigotry, which dictionary.com defines as “stubborn and complete intolerance of any creed, belief, or opinion that differs from one's own.”

            I assert that a belief that gay marriage degrades the institution of marriage is morally indistinguishable from the proposition that black people owning real property degrades the institution of property.  Marriage and real property are two essentially similar cultural norms created through the ages via the accretion of custom and law. If one can be modified to end injustice, so can and should the other.  And anyone battling to preserve the status quo, on the theory that the grant of rights to a minority already enjoyed by the majority, degrades the fabric of society, is a bigot.

Money in politics

            Before I get too visibly cozy with the idea of an Obama presidency,  its important to me to reiterate my feelings about money in elections.

            Campaign finance, as I originally said in the original issue of the Spectacle in January 1995, is legalized bribery. Very rich people funnel millions of dollars to their preferred candidate (or, often enough, to both candidates). The elected candidate by definition has to give very careful consideration to the contributor’s desires, even when they contradict the will of the majority of those who elected her.

            In today’s world, the person with the most money tends to win the election, being able to drown out the other’s voice with more television and radio advertising. It is a problem the founders never anticipated, that the ability to raise money has become far more important than intelligence, knowledge or the ability to solve problems.

            Thus we really have a shadow primary, in which the money votes, before any election in which the people vote.

            Obama was elected in a perfect storm of disgust with Republicans, fear of a great Depression, war exhaustion etc.  And I reiterate my belief that he appears to be the calmest, most intelligent and decisive person elected president in many years (since Kennedy and possibly even Roosevelt). But, because of that perfect storm, he also was able to raise a war chest (declining public financing) of over 120 million dollars, more than twice the money McCain deployed.

            I believe that the fact that the right person for the job was able to raise the most money was a wild coincidence, the opposite of what usually happens.


            Dreyer’s “Ordet” is an interesting examination of religious faith which descends into kitsch at the end.

            An austere farm family includes a dour father, a schizophrenic son who believes he is Jesus,  a married agnostic son and a young eager son just starting out in life. The agnostic son’s wife provides the family’s vitality—she is one of those people who radiates love—and when she dies in childbirth, everyone’s faith is severely tested.

            When a neighbor who refused his daughter in marriage to the youngest son because of religious differences, turns up remorsefully at the wake and offers her in replacement for the wife who was lost, the movie has a first of two endings.  This ending was satisfying and moving (overlooking the sexism involved), delivering a message about the importance of tolerance and compassion in faith.

            Dreyer couldn’t stop there, however, and delivers a coda in which the schizophrenic son performs a miracle and brings the dead woman back to life. Up to that moment, this has been a naturalistic movie, with no hint of the supernatural. Movies in which the rules of nature will be suspended probably should let us know at the outset which filmic universe we are in, rather than delivering such an abrupt left turn at the end. A movie about faith, after all, does not have to put the supernatural on screen; Dreyer’s own far superior silent film, “The Passion of Joan of Arc”, puts Joan’s faith front and center but leaves God offstage.

            Another infuriating thing about the miracle in this movie is the unanswered questions it raises.  Presumably, somewhere else in the vicinity, and certainly in many homes around the world, another good person is lying dead at the same moment.  Why don’t these others get to return to life as well? What is the message of a discriminatory miracle which singles out one lovely but hardly unique human and disregards all others?

            I think this ending takes an easy and rather trite choice, calculated to manipulate us into tears, and is therefore kitsch.


            In an ancient anecdote, the prisoners who tell each other the same jokes year after year eventually assign each joke a number. After that, when someone calls out “Forty-two!”, everyone laughs.

            Kitsch is a similar approach to doing things by the numbers. When we seek a particular emotional response—tears, pride, patriotism, sentimentality—we snap together some trite, well-tested elements that are calculated to produce the desired effect. How cute that dog is! How brave that blind girl is!

            Kitsch involves the imitation of an imitation of life. People who knowingly use kitsch elements in their work are cynical. People who use kitsch components because they don’t know any better, lack originality.

            In the distant past, every kitsch trope originated in someone’s original conception: Liza fleeing from the wolves, Little Nell dying,  big eyed sad children, dogs playing poker. (Maybe not the dogs. ) Kitsch arises when tropes are continuously re-used in the absence of an original thought., or with the sole intention of producing a calculated response.  Even passages of Shakespeare have become kitsch (“to be or not to be”) and some strains of classical music (The William Tell Overture).  “Gimme Shelter”, the greatest rock song ever, has become kitschified through overuse in the movies of Martin Scorsese and others.  Somebody in a helicopter or with a gun is slowly proceeding to kill someone else; cue the Stones (“rape, murder, is just a shot away”).

Arguably, all movie music is kitsch because inserted to produce an emotional response the director doesn’t trust the movie to cause on its own. “Ordet” has little or no soundtrack music until the miracle at the end.

            Marx’s famous assertion in “The 18th Brumaire of Louis Napoleon”  that all historical events happen twice, the first time as tragedy and the second time as farce, can be understood as a description of the eventual kitschification of human actions through repetition.

            In May 1970, National Guardsmen in Ohio shot and killed four students at Kent State University. A decade later, when the events became the basis for a television miniseries, the kitschification of the killings was complete.

            Because kitsch is  the end of an arc which begins with an upsetting event or a disturbingly original thought, it represents the death of originality and the total encapsulation of the triggering matter in a comforting cocoon of predictability.

            Kitsch is the art form preferred by people who don’t like to think too much or feel unexpected emotions, who never want to be off balance or in despair or provoked into changing their world-view.

            An interesting methodology for a writer is to continuously evaluate each scene or passage in her writing, indeed each sentence, to try to ensure it is rigorously free of kitsch. The more your writing mirrors events you have witnessed, the less kitschy it is likely to be (though of course life sometimes imitates kitsch). The more the incidents in your work are based on novels or movies rather than on life, the kitschier they are likely to be.

            Even when you are describing the world, it is crucial to scrutinize the words you use as it is possible to use kitsch phrases to describe things which deserve better. Any expression used commonly in popular speech is likely to be kitsch, if it more than five years old, dude,  or to become kitsch in between the time you use it and the time someone reads it, dawg.

            Some words used in common and crucially important moments of life are almost impossible to use in art because of a heavy overlay of kitsch. Like “I love you”. When it becomes necessary to use such expressions in your work, look for a less commonly used formulation.

            Personally, I prefer novels, plays and movies where scene B does not follow inexorably from scene A, where the characters choose the less obvious pathway (as the writer has), and do not talk about it in the same terms used in every television show or movie this year.  

Medical scans and tests

            As medical technology gets more powerful, doctors are able to detect anomalies and features they couldn’t before. Anyone raised with an uncritical belief in progress will believe this is a Good Thing. In reality, it is proving to be a mixed bag.

            An article in today’s New York Times Science section (December 9, 2008) tells the story of a woman who experienced severe knee pain. The real cause was arthritis, but a super-sensitive MRI showed an anomaly in her knee. She was  close to deciding to have a knee replacement, when a more experienced and intuitive physician told her she needed only treatment for arthritis.

            Years ago, during a fad for obtaining full body scans, a man told he had scarring in the lungs opted for painful and expensive exploratory surgery, only to discover that it was merely the benign remnant of a childhood condition.

            Genetic analysis and counseling, revealing that we have genes which may predispose us to cancer, have even caused frightened people to maim themselves by having “preventive” double mastectomies.

            Someone I know was induced after a mammogram to have a painful breast biopsy, which left a scar which lasted for years. The biopsy showed a potentially “precancerous” condition. Among the treatments casually described by the doctor were a preventive mastectomy, and the use of a drug which caused death, stroke or other cancers in a percentage of the patients. She opted for no treatment whatever, and about fifteen years later has not developed cancer.

            Screening for colon cancer in older men frequently reveals tumors which, undiscovered, would not have caused the slightest health problem in the individual’s lifetime.

            All this prediction tends to do little for us except rob us of serenity and cause us to spend money (or spend the insurer’s or taxpayer’s money) unnecessarily. The aggressive pushing of predictive testing verges on a scam (doctors buy the machine and must amortize it by getting lots of patients to take the tests). And the epidemic levels of questionable testing raises the cost of health care, contributing to the breakdown of the system.

Another governor implodes

Illinois governor Rod Blagojevich is an idiot. Like Elliot Spitzer of New York, he threw away everything he had, his job, power, status and respect. Spitzer is probably crazier and Blagojevich stupider, but otherwise they got themselves into similar messes.

In the federal indictment which came down this week, the governor is quoted (from a wiretapped conversation)  as saying of Obama’s vacant Senate seat, that its an "[expletive] valuable thing, you just don't give it away for nothing".

Apropos of the discussion of money in politics earlier in this column, Blagojevich’s debacle is certainly thought-provoking. Blagojevich boasted that candidate number 5 (Jesse Jackson, Jr., unfortunately, possibly tanking his own career) had offered to raise a half million dollars for Blagojevich if appointed.

            If Blagojevich had appointed Jackson, and Jackson had returned the favor by raising campaign funds for him without either one ever discussing a quid pro quo, there would have been no problem.

            Under our dishonest and dysfunctional campaign finance system, the crime is not the sale of high office but talking about it.  Quid pro quos are exchanged every day. So long as they are left latent, in the air, for intelligent people to understand, and never said (and certainly never said on tape), everything—office, influence, votes—can and will continue to be bought and sold.

            Blagojevich’s act of gross stupidity was not offering the appointment to the highest bidder. It was describing the sale, in simple unsubtle terms, to anyone who would listen. I imagine the ghosts of all Blagojevich’s corrupt ward heeler mentors rising up in agitation: “Have we taught you nothing?”


            The Bernard Madoff scandal fascinates me. The received wisdom is that bull markets engender bold frauds, which remain unperceived until the markets retreat. At an extreme low tide, all kinds of things are visible on the ocean floor you wouldn’t normally see.

            This former Queens stockbroker worked himself into a position of trust in which extremely wealthy people handed him their entire net worth. Normally what you are supposed to do is to be so clever that you can invest other people’s money in offerings of rare distinction, unknown to others, master the selection and timing, and pay your trusting customers a return unknown to the rest of us. Madoff took the easy way out. If you needed to withdraw any money, he took it from another investor. This way, he could report to everyone concerned an in retrospect unbelievable 10% return year in and year out, no matter what the market conditions. The reflex of suspicion that anyone could hit those kinds of numbers every year without fail were ameliorated by the fact that he had been doing it for some friend of yours, or someone else at the country club, for twenty years.

            Ponzi schemes are good until the valences reverse and there are more investors asking for money than there is new money coming in. Someone said in a Times column yesterday that the smaller frauds tend to come to light first. In Madoff’s case, thirty to fifty billion dollars are missing.

            Just like it is hard or impossible to draw the line between campaign finance and bribery, the line between legal investment strategy and Ponzi schemes is also somewhat arbitrary. A bank, an investment bank and Bernard Madoff all have something in common: if every investor or depositor asks for her money back at the same moment, it isn’t there to be produced. The money you hand to someone else exists virtually; it goes to money heaven, and if you are permitted to withdraw it, you are possibly being handed someone else’s, who isn’t asking for it at the same time.

            Some years ago, I figured out that social security is also is a massive Ponzi scheme, in which today’s retirees are being paid with the taxes levied on those who will retire twenty years from now. The scheme collapses when there aren’t enough people working to support the retired (not enough new money coming in, exactly as in a collapsing Ponzi). This is the doom predicted for the social security system in a few decades.

The easy becomes difficult

            It seems to be a powerful but puzzling feature of modern life that things that were easy thirty years ago have become impossible today: running the government, fighting a war, relieving New Orleans after Katrina, building a bridge. I am not talking only of political-financial matters, such as managing oil prices so people can afford gas or keeping enough money in unemployment insurance reserve funds to cover needs. I am talking about matters like the technical know-how and will required to keep infrastructure like roads and bridges from deteriorating, or to be able to deliver physical rescue, food, medicine, and laws enforcement to the survivors of a hurricane.

            The loss of knowledge is a fascinating problem which I dealt with in last month’s Rags and Bones column and hope to make the subject of a forthcoming feature article.  You can find some simple and practical causes for any deficit: political interference, arrogance, a lack of commitment to education. But when things become so extreme that it starts to appear that nothing whatever works the way it should, we have entered a highly irrational world of an almost magical level of incompetence. In Zimbabwe today, the inflation rate is at trillions of percent, there is a paucity of clean water, teachers have stopped showing up for work because they can’t live on their salaries. There are days in America when I feel like we are at the top of the slippery slope: for the first time I feel I can see Zimbabwe from here.

Health insurance

            Our badly cracked health insurance system is an example of something which used to be easy which has become difficult. As malpractice premiums and prices for the most routine services go through the roof, as hospitals slide into bankruptcy because of their mandate to perform services for which no-one will ever compensate them, it becomes much harder even for people like me to find affordable health insurance. And then when you have it, you start receiving bills for all sorts of things which used to be covered.

            About a year ago, I noticed that routine visits to the emergency room started to result in bills. All insurance fully covers ER visits, right? Wrong. Last January, I spiked a high fever and was coughing so hard I thought I would bring up a lung. I resist doctor’s visits to the point of irrationality, but I was sufficiently scared by the uncontrollable hacking that I went to the ER at Southampton Hospital (It was a weekend and I didn’t believe I could hold out till Monday when I could see my primary care physician). Eight months later, without explanation, I received a bill for $260 for the services of the ear, nose and throat specialist who saw me for five minutes.

            The protocol dictates that after age 40 we should have a colonoscopy every five years. I was about a decade overdue for one, so I finally had the procedure in September. Yesterday, a bill for $1600 arrived from the anesthesiologist who spent a few moments rendering me unconscious. I called his billing associate and she explained to me that, as a routine matter, insurance companies are denying anesthesiologist bills even when the surgeon is in-network, on the grounds that the anesthesiologist is not. You then have to appeal and fight the company to establish it is a related service. She was glad to take a few minutes out of her day to participate in a bitch session about health insurers. An anesthesiologist gets the call to work with a particular surgeon on a given day for some number of procedures. There is no discussion of whether the anesthesiologist takes all the same insurances as the doctor. Nor would it be practical for the doctor to have a HIP anesthesiologist for the first colonoscopy, a United Health Care guy for the second, and so on.

            From the point of the view of the patient, we have a right to think that an in network service will be in network for all purposes. Getting a $1600 bill for a service for which I got a referral to a HIP physician is rather shocking. In the law and public affairs the way I understand them, there should be disclosure. Neither the doctor who treated my cough at Southampton, nor the anesthesiologist who put the mask over my face in September, told me first that they might not be covered by my insurance. The insurer denying coverage for a crucial component of a covered service smacks of gross dishonesty and manipulation.

             Though this apparently happens every day, per the billing associate, it turned out not to be my problem. I called HIP and learned that I had a $2000 deductible under my new plan for in network services.

            Shame on me for not understanding the fine print. Earlier in the year, I was in the final months of the COBRA coverage from my last employer, facing the tripling of my already severe monthly premium when I converted from group to individual coverage. During most of the spring, I believed I would have to leave New York state for Texas or Florida to find group coverage I could afford as a retired person. Then I stumbled upon a poorly publicized plan offered by a nonprofit arts organization, which I signed up for gratefully.

            In my naivete, I have never heard of or imagined that there could be a deductible for in network services. If I’d understood this, I would still have had to sign up for what was the only plan in sight—or leave New York. But its very distressing to have health insurance and still be getting these kinds of bills. Even when I was working at my last job, as an emergency medical technician, I couldn’t have afforded to pay a $1600 medical bill from my salary. Every significant health bill I pay comes straight from my dwindling capital. People who don’t have capital don’t pay, and then the prices go up and so do everyone else’s premiums. 

            In the lead essay this month on securitization, I speak briefly of “George Bailey world”, the nostalgic if somewhat fictional world of the past in which there was a personal relationship between the bank lending officer and the neighbor who took a mortgage to buy his home.  In George Bailey world, when you get sick you call Doc Swanson and he come over and treats you and gives you a bill for twenty or forty dollars. If you can’t afford to pay him, he waits until you have sold your harvest or accepts a couple of chickens. There is never any question of getting an unexpected $1600 bill for a minute of service.

            If I had understood in advance how much the colonoscopy was going to cost me, I wouldn’t have had it. But we’ve all been sold that a colonoscopy every five years is not a trivial or elective procedure, not cosmetic surgery but a dire necessity. So the system is not delivering the services we most need at a price we can afford. Something is really broken.

            To add insult to injury, an article in the Times for December 16 reports a study showing that colonoscopies actually miss about a third or more of cancers.

The grown-ups

            One of my formative experiences as a teenager was attending a meeting at my high school where the principal defended to parents his crack-down on teenagers protesting the war. The principal, whom I had regarded up to then as a highly competent super-villain, called one of the gym teachers, his notorious flunky, to aid him in a sort of skit. “This is how the kids behave,” he said, and pushed the teacher, who compliantly staggered half way across the auditorium stage. At that moment, I had a series of overlapping perceptions and recognitions: The principal was behaving very childishly, and the gym teacher, who was wearing a Mickey Mouse watch,  was a buffoon.

            My perception of the universe underwent a radical revision that night. I had entered the auditorium believing that the adults who ran the world, from President Nixon on down, were competent, pragmatic and evil. I now understood that the grown-ups had no idea what they were doing. They were as lost and confused as we were, with the additional necessity of behaving as if they were in control.

            I now can add an additional understanding, that the childishness and incompetence of leaders  is much less likely to be exposed in good times, when public confidence—belief in leaders—buoys the system. Our confidence is a necessary underpinning of any regime largely based on spin and illusion.  We don’t confront or criticize people who appear to be getting results, even when their success is fraudulent (as with Bernard Madoff) or accidental.

            I think Ronald Reagan was an example of an accidental success. The man was an idiot, the first of a dangerous series of modern Republican figure head presidents. (Here is a joke current in the 1980’s. The Reagans go into a diner and Nancy orders the Blue Plate special and a Coke. “What about the vegetable?” asks the waitress. “He’ll have the same thing,” Nancy responds.) His greatest achievement, the collapse of the Soviet Union, was one he never even saw coming.

            Confidence in Reagan, the “Great Communicator”, ended a recession which brought him to power and gave us two decades of largely bull markets which enabled Bernard Madoff to thrive. In the end, such presidents are considered great for enabling irrational exuberance or at least not getting in the way of the zeitgeist. The history of the Clinton administration can be perceived as a constant rejiggering of priorities to achieve the kind of reputation which Reagan fell into so effortlessly.

             Anybody can stand at the wheel of a ship which is headed in a safe direction in clear weather and deep water. It is in the really hard times that we find out how incapable our leaders really are.  In those times we see at least briefly through the cant, and seek the help of a leader who is really hyper-competent. Barack Obama presents as such a person—but that’s just the spin so far. I hope he lives up to his advance notices.

More on Madoff

I can’t stop thinking about the Madoff scandal, which I find endlessly fascinating. You almost always hear of Ponzi schemes preying upon the relatively uneducated, people who  have no investment  experience  and don’t know any better. In the New York Times for December 26 is an account of such a scheme that harmed the members of a Washington Heights church. The newest parishioner claimed to supply large electronic companies such as Best Buy. If you invested with him, you would double your money in about ten weeks.  The pastor and his family lost several hundred thousand dollars in the scheme.

            Madoff conned billionaires, Swiss bankers, Arab money men and other sophisticates. His scaled down version offered a ten percent per annum return. Over the years, occasional hedge fund types looking to invest with him deflected away because he wouldn’t answer questions, or because they were unable to reverse engineer his results. Some individuals raised an extremely pragmatic issue, so obvious that it is remarkable it didn’t stop  the great majority of Madoff’s investors from handing over their money: how does anyone get a ten percent return, year after year, with little fluctuation, regardless of what the market is doing?  

            Add to this the very prosaic but telling fact that Madoff’s auditors were an unknown three person firm in a shopping center in Queens, and all the danger signals were there.  Why didn’t it matter?   

            Fitzgerald famously said, “The rich are not like us,” to which Hemingway  replied, “Yes, they have more money.” Though we all have a deep if secret awe for people who can dispose of a billion dollars, those who inherited the money (or some substantial chunk of it) didn’t have to be any more knowledgeable or shrewder than the rest of us. Even those who did make it through strenuous, unique, clever activity don’t necessarily have better fraud radar than we do; like Isaiah Berlin’s hedgehog, they may be good at one thing, not all things.

            The most telling factor may have been Madoff’s status. The perception of his power. He had been there a long time—decades—making his ten percent return, and had reached a degree of wealth, reputation and exclusivity which awed even the super-rich. You had to know someone who knew him and then, having reached him, had to plead with him to steal your money. Sometimes he refused.

            What Madoff acquired was similar to the  concept of “mana” shared by a number of South Pacific cultures:

In Hawaiian, mana loa means "great power". There are two ways to obtain mana: through birth and through warfare. People or objects that possess mana are accorded "respect"; because their possession of mana gives them "authority", "power", and "prestige".


            For someone with such mana, asking inconvenient questions like, how do you sustain your ten percent return in a bad market, would be considered very disrespectful. Powerful people according to a world view shared by most human cultures are to be greeted with a tugging of the forelock, not with questions. Madoff’s black  box approach to investing was considered only natural in this environment. If you had a secret formula, would you share it? I am sure in more than one family supported by Madoff these words were said over the years: “Who cares how he makes it as long as nobody gets arrested.” If you don’t have consummate mana yourself, you probably want to be aligned with those who do. People assigned a lot of value to being able to tell other people that they knew Bernie Madoff, invested with Bernie Madoff. were themselves therefore members of an ultimate financial elite.

            The problem is of course that this is an essentially medieval structure, where the fact of authority is paramount, and looking too much into its underpinnings is treason or heresy.  In fact, one of the most important questions in human development is  whether to trust the powerful  (including the super-rich) unquestioningly or not.  A major underpinning of American democracy, as the Framers made clear, is that nobody  should be trusted blindly. That understanding got lost somewhere along the way; Bernie Madoff and George Bush inhabit the same universe, in which the paramount rule is to trust without question. Sounds even better in French, as a kind of slogan similar to “honi soit qui mal y pense”:

            Faire confiance et se taire

            The assault on Gaza

            The Israeli attack on Gaza is justified.

            To put this statement in context: I think the decision to create Israel was extremely problematic; I think the state itself is confused, even cursed, by a contradictory identity, seeking at once to be secular and based on a religion; I think the Israelis have made horrendous errors over the years in their treatment of Palestinians. The map of the proposed partition in 1947 doesn’t look fair to me. Israel’s close friendship with apartheid South Africa, while it lasted, spoke volumes.

            But I don’t think the Israelis have a moral obligation to die, as Islamic fundamentalists believe, nor to leave the area. I think most Israelis have come to understand, as their government has, that a two state solution is both moral and practical. All else is just negotiation about the details, borders and so on.

            In order for a Palestinian state to take its place next door to Israel, there are two preconditions. Someone representing the Palestinian people must have authority to enter into such a deal. And he must have the ability to police his people and ensure that the rockets stop being launched and the suicide bombers stop being deployed.

            There has not yet been a Palestinian “partner” who could satisfy both preconditions, not Arafat and not Abbas in the West Bank today. Both men led Al Fatah, and yet Fatah always had a terrorist wing, supposedly not under their control, which continued killing Israelis while Arafat and Abbas negotiated peace treaties.  So, even when the first condition was satisfied, the second never has been. What use is a peace partner, no matter how sincere, who is unable to shut down the killers on his own side? (The US is facing a very similar problem in Pakistan today.)

            I believe that Israel has seriously demonstrated its interest in a solution in a variety of ways, including withholding violence except when outrageously provoked.  Peel away all of the ideology, all of the history and the emotions, and what you are left with is a country trying to deal with an enclave within its current borders, from which people are firing mortars and rockets. If a group in downtown Newark started firing mortars at New York, they would be met by massive force hours later, and be out of business the next day. But Israel, under strong pressure from illogical world opinion, has tolerated these rocket and mortar attacks for years.

            Israel’s response in Gaza is not illegal under the laws of war. At most, it can be scrutinized carefully for its proportionality. So far, the strikes have been aimed at Hamas targets (though some civilians have inevitably been killed) and have followed the express goals of depriving Hamas of its ability to fire rockets and mortars at Israel. Israel undoubtedly hopes to beat Hamas up until an appropriate peace partner emerges.  The goal is not the complete destruction of Gaza and its civilian population (who originally voted Hamas into power, by the way).

            The demonstrators coming out in force in the Arab world are essentially taking the position that the Israelis should just allow themselves to be attacked without responding—in other words, that Israel has a responsibility to die.  This is an inane proposition. People are dying today in Gaza because of Israeli bombs but also Hamas’ intransigence.