January 30, 2009
High & Low Finance
A Global Credit Squeeze Is Felt Unevenly By FLOYD NORRIS
DAVOS, Switzerland
Decoupling is last year's discredited theory.
It may also be tomorrow's reality. The world's efforts at economic recovery could well turn into a case of every country for itself. Call it "capital protectionism."
A year ago at the World Economic Forum, many chief executives and government officials hoped that an American recession, if one came, would be mild and would not spread overseas. The strength of world economic growth would enable Europe and Asia to "decouple" from the American economy.
What happened instead was the downside of globalization. Readily available and cheap capital played a crucial role in lifting growth around the world, and its absence for all but the safest borrowers is causing pain everywhere.
But what is not the same everywhere is the ability of governments to stimulate the economy. While the United States debates the details of how to spend a trillion dollars or more to bail out banks and stimulate the economy, the governments of some other countries find themselves caught in the credit squeeze.
In Latvia, the government got a bailout from the International Monetary Fund by agreeing to draconian measures that include wage cuts, spending reductions and tax increases. There were riots.
The president of Latvia, Valdis Zalters, was diplomatic when I asked him Thursday if he thought it was unfair that the United States could easily borrow when his country could not. "It's the way it is," he said. "The U.S. has a AAA rating. We had no choice."
The best positioned are those countries that have huge foreign currency reserves — think China — or printing presses for the international reserve currency — think the United States.
"The money is flowing out of all markets," said Ferit F. Sahenk, the chairman of Dogus Group, a Turkish conglomerate. This, he said, raised the risk of inadequate capital "not only for the banks but for private sector debtors as well."
That risk is only increased by what Steven Roach, the Morgan Stanley economist, called "the rising tide of economic nationalism." In both Europe and the United States there is pressure on bailed-out banks to increase lending — but not to just any borrowers.
"Some countries are encouraging their banks to invest mostly in domestic assets," Mr. Sahenk complained. "This is a new form of protectionism."
That worry is widespread. "Large economies are accessing international capital markets for themselves," said Trevor Manuel, the finance minister of South Africa.
He wants the big countries to share the borrowed wealth, but fears they will not.
Lord Adair Turner, the chairman of Britain's Financial Services Authority, voiced the same concern, calling it "the risk of a new mercantilism," centered on credit availability rather than trade. "It is not easy to avoid this," he added. "It could get out of hand."
The onset of credit protectionism, if it comes, will be the result of a drastic shift in the financial system. Private allocation of credit played a major role in the extraordinary world growth of the last quarter-century, but that system blew up when financial innovation led to a huge overextension of credit to borrowers with dubious ability to repay, whether they were subprime mortgage borrowers or highly leveraged companies.
With the banks crippled and shown to have taken what now look like foolish risks, it has fallen to governments to allocate credit, either indirectly by deciding which banks to bail out and on what terms, or even directly if, as some expect, many banks are eventually nationalized.
The pressures for nationalization come in part from worries that bank balance sheets are bottomless pits of toxic assets, and concern that it is unfair to taxpayers to let the benefits flow to the shareholders who stood by as the banks took too many risks.
Alan S. Blinder, a former vice chairman of the Federal Reserve and now an economics professor at Princeton, said he did not think nationalization would be the first or second choice of American policy makers, but that it could be the third or fourth.
And he added that the risk of credit protectionism would rise if the banks were nationalized.
It is hard to imagine that governments will do a particularly good job of allocating capital to its most productive uses, given the political pressures they will face. But there is no agreement on how to get the private banking system operating in an adequate fashion.
Pumping capital into the banks has not yet worked, even if it has stirred public outrage over high pay and perks for the bankers who got us into this mess. There is renewed interest in some kind of "bad bank" approach that would separate the toxic assets from the good ones, leaving the government with the bad stuff. But figuring out what to pay — assuming the banks have not been nationalized — is likely to be contentious.
At the same time, there is much talk about how to reform the regulatory systems around the world, and how to standardize regulation to avoid the "regulatory arbitrage" of seeking out jurisdictions with the least stringent rules.
"We allowed a series of near banks and shadow banks to grow without being regulated," said Lord Turner. In a new regime, he added, one rule must be, "If it looks like a bank and quacks like a bank, we have to regulate it like a bank." To do that, he would give regulators wide discretion to get information on how hedge funds and other institutions are operating, with the ability to impose regulation if they start to act too much like a bank.
Some economists fear that would stifle financial creativity, and even some who think far more regulation is needed question whether regulators can amass the expertise to make needed decisions promptly and wisely.
Mr. Roach predicts that this will be the first year since the Great Depression that the gross domestic product of the entire world declines. Fiscal stimulus plans may help to ease the pain, but it is hard to see how the world's economies can resume decent growth until the private financial system is operating much better than it is now.
"We've all been building this big, integrated financial system," said James Rosenfield, a co-founder of Cambridge Energy Research Associates. "We didn't consider what would happen when it disintegrated."
http://www.nytimes.com/2009/01/30/business/30norris.html?sq=Floyd%20Norris%20January%2030,%202009&st=cse&scp=1&pagewanted=print
http://snipurl.com/by50m
Friday, January 30, 2009
Mendelssohn Favorites Offer Precision, Grace and Grit By THE NEW YORK TIMES
January 30, 2009
Mendelssohn Favorites Offer Precision, Grace and Grit By THE NEW YORK TIMES
Composer anniversaries aren't what they used to be. In flusher times for the recording industry, you might have expected a freshet if not a flood of releases to wash over the Mendelssohn bicentennial, which becomes official on Tuesday.
There are, to be sure, concerts here and about. The German organ virtuoso Felix Hell will perform Mendelssohn's complete works for the instrument in three programs on Sunday, Monday and Tuesday at the Church of the Transfiguration. Kurt Masur will conduct the New York Philharmonic in a program of Mendelssohn, including the Violin Concerto in E minor with Anne-Sophie Mutter as soloist, from Wednesday through next Saturday at Avery Fisher Hall. And smaller-scale ventures abound. (A concert of Mendelssohn rarities at the Museum of Jewish Heritage is reviewed on Page 5.)
But for recordings it's largely a question of looking back. The classical music critics of The New York Times would like to nudge that process along by listing favorite Mendelssohn recordings of their own. JAMES R. OESTREICH
As a modest contribution to celebrations of the bicentennial of Felix Mendelssohn, the classical music critics of The New York Times list here some of their favorite Mendelssohn recordings.
Anthony Tommasini
VIOLIN CONCERTO IN E MINOR Jascha Heifetz, violinist; Boston Symphony, conducted by Charles Munch (with Beethoven's Violin Concerto; RCA Red Seal 82876-61391-2; CD).
PIANO CONCERTOS NOS. 1, 2; 'VARIATIONS SéRIEUSES'; 'RONDO CAPRICCIOSO' Jean-Yves Thibaudet, pianist; Leipzig Gewandhaus Orchestra, conducted by Herbert Blomstedt (Decca 468 600-2; CD).
'SONGS WITHOUT WORDS' Walter Gieseking, pianist (with "Lyric Pieces" by Grieg; EMI Classics 5 66775 2; two CDs).
'ELIJAH' Dietrich Fischer-Dieskau, baritone; other vocalists; New Philharmonia Orchestra and Chorus, conducted by Rafael Frühbeck de Burgos (EMI Classics 5 68601 2; two CDs).
MENDELSSOHN'S E Minor Violin Concerto is an absolutely perfect piece. By this I simply mean that it accomplishes exactly what it sets out to do. It is a miraculous, multitiered balancing act of Classical grace and Romantic ardor, musical taste and dazzling display, formal structure and impetuosity. And in just 25 minutes!
Among the many superb recordings of the concerto, my favorite these days is Jascha Heifetz's 1959 account with Charles Munch conducting the Boston Symphony Orchestra. In rarefied violin circles you may gather that we are not supposed to like Heifetz. A dazzling virtuoso, yes, but slick and flashy. Do not believe it.
There is a slightly cool and unsentimental integrity to Heifetz's performance. The brisk tempo in the first movement comes across as urgent, not rushed. Heifetz plays the opening minor-mode theme in one arching, magisterial phrase. The utter precision and the rhythmic incisiveness of his playing are stunning. Yet the slow movement sings with elegant poignancy. The playful finale is a wondrous mix of capriciousness and intensity.
I grew up with Rudolf Serkin's exuberant recordings of the two Mendelssohn piano concertos, and there are many other good ones. I especially admire the 2001 release by the French pianist Jean-Yves Thibaudet, with Herbert Blomstedt conducting the Leipzig Gewandhaus Orchestra, an ensemble once directed by Mendelssohn. Mr. Thibaudet brings his trademark brio, elegance and impeccable technique to these spirited, youthful works. In addition, the exceptional clarity of his playing allows the ingenuity of the contrapuntal writing to come through. Mendelssohn was a devotee of Bach. And the recording includes Mr. Thibaudet's brilliant accounts of two Mendelssohn solo works: the "Variations Sérieuses" and the "Rondo Capriccioso."
To describe Mendelssohn's "Songs Without Words" as charming little novelties is to miss the point. These eight volumes of short lyric piano pieces are beautifully made and rich with musical subtleties, qualities that come through in the 1956 recording by the patrician pianist Walter Gieseking. Alas, he recorded only 17 of the 48 pieces. But the set includes his captivating performances of 31 "Lyric Pieces" by Grieg.
The oratorio "Elijah" is not perfect. There are cumbersome aspects to this ambitious score. Still, the somber beauty of Mendelssohn's music gets to me, especially in the 1968 recording conducted by Rafael Frühbeck de Burgos, featuring some incomparable vocal soloists: Janet Baker, the young Gwyneth Jones, Nicolai Gedda and Dietrich Fischer-Dieskau. That's quite a lineup.
Allan Kozinn
SYMPHONY NO. 4, 'A MIDSUMMER NIGHT'S DREAM' OVERTURE AND INCIDENTAL MUSIC Orchestra of the Age of Enlightenment, conducted by Charles Mackerras (Virgin Classics VC 7 90725 2; CD, available in a custom pressing from ArkivMusic.com).
VIOLIN CONCERTO IN E MINOR Janine Jansen, violinist, violist; Leipzig Gewandhaus Orchestra, conducted by Riccardo Chailly (with Bruch's Violin Concerto No. 1, Romance in F; Decca B0007260-02; CD).
STRING QUARTETS, STRING OCTET, OTHER WORKS Emerson String Quartet (Deutsche Grammophon B0003888-02; four CDs).
PIANO SONATA IN E, PRELUDE AND FUGUE, 'VARIATIONS SéRIEUSES,' 'RONDO CAPRICCIOSO' Murray Perahia, pianist (Sony Masterworks 37838; CD).WHEN Charles Mackerras's recording of the "Italian" Symphony was released in 1988, it was rare to hear period-instrument orchestras play music as late as Mendelssohn. But what the Orchestra of the Age of Enlightenment brought to its performance was a combination of transparency and delicacy that I've never heard in another recording of this work (or, for that matter, on any of this ensemble's other recordings). In the "Midsummer Night's Dream" music, the effect is magical, and magic, certainly, was what Mendelssohn was after.
It is virtually impossible to settle on a single reading of the E Minor Violin Concerto. The work has been ubiquitous on disc since the days of 78s, with every interpretive fashion of the 20th century copiously represented. So far the 21st century has brought no stylistically radical departures, but Janine Jansen's account has become a favorite for its energizing freshness, crisp articulation and mercurial spirit. Ms. Jansen plays the solo line with a sweet, singing tone, but even in the slow movement, she keeps the music from becoming lugubrious.
The string quartets have lately been getting the respect they deserve, but slowly: only the first two turn up in concert much, probably because the Canzonetta of the First Quartet and the Intermezzo of the Second are so irresistible. In the remaining four, that charm gives way to greater emotional intensity, and a current theory holds that the dark-hued Sixth may reflect Mendelssohn's despondency over a hopeless love affair with the singer Jenny Lind.
The Emerson players trace that emotional arc deftly and play this music with their customary precision and passion. Smaller works and student pieces fill out the set, along with a multitracked performance of the exquisite String Octet in which the Emerson players perform all eight parts. That may seem a technological party trick, but objections evaporate quickly as this brisk, shapely high-energy performance unfolds. (A video documentary about the recording of the octet is included in a CD-ROM section of the fourth disc.)
Mendelssohn's youthful E Major Piano Sonata may seem lightweight for its time (1826), but it has all the nimbleness of spirit and melodic ingenuity that make his other early works so appealing. Murray Perahia's 1984 recording presents it as decisive and mature as well, but the real treats here are the shorter works, most notably the beautifully involved "Variations Sérieuses."
Steve Smith
VIOLIN CONCERTO IN E MINOR Nathan Milstein, violinist; New York Philharmonic, conducted by Bruno Walter (with other concertos, other performers; Sony Classical 64459, MP3 download; Naxos 8.110977, CD).
SYMPHONY NO. 3, 'A MIDSUMMER NIGHT'S DREAM' OVERTURE AND INCIDENTAL MUSIC Jennifer Vyvyan and Marion Lowe, sopranos; Female Chorus of the Royal Opera House; London Symphony, conducted by Peter Maag (Decca 466 990-2; CD).
SYMPHONY NO. 5 Berlin Philharmonic, conducted by Lorin Maazel (with Franck's Symphony played by the Berlin Radio Symphony; Deutsche Grammophon 449 720-2; CD).
PIANO TRIOS NOS. 1, 2 Trio Wanderer (Harmonia Mundi France HMC 901961; CD).
O F all the war horses in the standard repertory, Mendelssohn's E Minor Violin Concerto is among the few that never grow stale. My collection includes both invaluable vintage performances (Fritz Kreisler, Alfredo Campoli) and vibrant recent accounts (Hilary Hahn, Janine Jansen). But the recording I turn to most often and the one that raises my hair like no other is Nathan Milstein's 1945 version with the New York Philharmonic.
Milstein recorded the concerto several times over the course of a long career, but this account offers the best blend of impetuosity and patrician elegance, along with a conductor of refinement and insight in Bruno Walter. The Sony CD is out of print but can be downloaded from Amazon.com for less than $3. A Naxos reissue features brighter, more detailed sound but is unavailable in the United States because of copyright restrictions; still, where there's a will, there's a way.
Peter Maag's 1960 Decca recording of the Third Symphony ("Scottish") has long been a staple of the Mendelssohn discography, and rightfully so: Maag splendidly captured the work's ruminative mystery and gamboling energy. The regal finale, capped with blazing French horns, has never sounded more resplendent than in this surprisingly rich, full recording, which wears its decades lightly. The sound is slightly thinner in eight selections from "A Midsummer Night's Dream," but the alert, verdant playing more than compensates.
The Fifth Symphony ("Reformation") has not achieved the popularity of the "Scottish" or the "Italian," both of which it predated (despite the chronologically jumbled standard numbering of the symphonies). Lorin Maazel, in a 1961 recording with the Berlin Philharmonic, makes the piece feel titanic in all the right ways. The opening Andante, weighty but never ponderous, leads to an especially fiery Allegro con Fuoco. And Mr. Maazel's mix of power and clarity pays dividends in the finale, based on the Lutheran hymn "Ein' Feste Burg."
The turbulent Piano Trio No. 1 in D minor has long ranked among Mendelssohn's most popular chamber works; accordingly, there is no shortage of recorded performances, including several by ad hoc supergroups. Few manage as exquisite a balance among instruments as that achieved by the Trio Wanderer on its 2007 CD, which also includes a compelling account of the Piano Trio No. 2 in C minor. Trio Wanderer's playing in the Second's demonic Scherzo will have you on the edge of your seat.
Vivien Schweitzer
VIOLIN CONCERTO IN E MINOR, STRING OCTET, THREE LIEDER Daniel Hope, violinist; Chamber Orchestra of Europe, conducted by Thomas Hengelbrock (Deutsche Grammophon 477 6634; CD).
PIANO CONCERTOS NOS. 1, 2; VIOLIN CONCERTO Rudolf Serkin, pianist; Isaac Stern, violinist; Philadelphia Orchestra, Columbia Symphony, conducted by Eugene Ormandy (Sony Classical SBK 46542; CD).
SONGS WITHOUT WORDS Andras Schiff, pianist (Decca 421 119-2; CD).
STRING QUARTET NO. 6 Miró Quartet (with Schubert's String Quintet and Matt Haimovitz, cellist; Oxingale Records OX2006; CD).
MENDELSSOHN, whom Schumann called "the Mozart of the 19th century," enjoyed public approval and financial success during his lifetime. But his posthumous reputation was jeopardized by Wagner's anti-Semitic rants and later assertions by eminent musicologists that his works were conservative and fluffy. Still, profound joy and tenderness are no less valid emotions than sorrow. If you're feeling grumpy, the exuberant Presto of Mendelssohn's String Octet is the ultimate antidepressant.
The violinist Daniel Hope (a descendant of Mendelssohn's teacher Carl Friedrich Zelter) and musicians from the Chamber Orchestra of Europe offer a high-spirited performance of the octet, written when Mendelssohn was 16. The disc also includes a heartfelt rendition of the popular E Minor Violin Concerto with the full orchestra. Thomas Hengelbrock conducts what is said to be the first recording of the 1844 version, which has subtle differences in orchestration and a different cadenza from the final 1845 edition. Mr. Hope also performs his own arrangements of three Mendelssohn songs for violin and piano.
More Mendelssohnian exuberance is on display in his two piano concertos, full of pianistic fireworks and tender lyricism. The pianist Rudolf Serkin plunges into the opening movement of the First Concerto with virtuosic panache, accompanied by the Philadelphia Orchestra conducted by Eugene Ormandy. The disc also includes a performance (with the Columbia Symphony Orchestra) of the darker-hued Second Concerto and a passionate, richly hued performance of the violin concerto with Issac Stern.
Mendelssohn's remarkable lyrical gifts are also revealed in his "Songs Without Words," a set of eight volumes of six songs each, written throughout his career. The pianist Andras Schiff plays 22 of the songs, including the first two "Venetian Gondola Songs" and the vivacious "Spinning Song," with supple and unsentimental musicality.
Mendelssohn wrote the String Quartet No. 6 in F minor, perhaps his darkest work, at 38, in 1847, after the death of Fanny, his beloved sister. It is an anguished cry from the heartbroken composer (who died six months after Fanny) and should certainly have placated critics doubting his ability to convey the deepest pathos. The Miró Quartet gives an intense performance that illuminates the work's Sturm und Drang elements. The players highlight the seething tension of the opening movement and the angst of the second and final movements. Their interpretation of the poignant Adagio (which quotes a song Mendelssohn composed earlier to console Fanny after the death of a friend) is particularly memorable.
James R. Oestreich
SYMPHONIES NOS. 1, 5; 'THE HEBRIDES'; 'RUY BLAS' OVERTURE Gerald Fauth and Olga Gollej, pianists; Andreas Seidel, violinist; Matthias Moosdorf, cellist (MDG 307 1469-2; CD).
STRING SYMPHONIES NOS. 1, 4, 6, 7, 12 Concerto Köln (Teldec 4509-98435-2).
'DIE ERSTE WALPURGISNACHT,' 'A MIDSUMMER NIGHT'S DREAM' OVERTURE AND INCIDENTAL MUSIC Vocal soloists; Chamber Orchestra of Europe, conducted by Nikolaus Harnoncourt (Teldec 4509-94565-2; CD).
'PAULUS' Thomas Hampson, baritone; other soloists; Gulbenkian Chorus and Orchestra of Lisbon, conducted by Michel Corboz (Erato 2292-45279-2; two CDs).
IT may seem perverse for someone as inordinately fond of the symphony orchestra as I am to suggest a disc of chamber reductions of orchestral works. But I do so while enthusiastically seconding the symphony recommendations elsewhere on this page, all among my personal favorites.
The MDG disc, though seemingly spare in concept, is rich in every sense. It includes a generous cross-section of Mendelssohn's music: two of the five mature symphonies, the radiant concert overture "The Hebrides" and the overture to Hugo's drama "Ruy Blas" (which Mendelssohn considered "absolutely dreadful and below all dignity").
The leaner textures give many fascinating insights into the works' structures. But what recommends this disc more than anything is the sheer quality and involvement of the music-making. These performances throb with life. This from performers you have probably never heard of (except possibly the members of the Leipzig String Quartet). I find the CD compulsively listenable.
The best thing about the Concerto Köln disc of Mendelssohn string symphonies is that it is merely the first of three volumes comprising all 12 works. These early pieces demand strong and committed performances, more gritty than pretty, to make their effect, and Concerto Köln supplies them.
The "Midsummer Night's Dream" music receives top billing on a recording from Nikolaus Harnoncourt and the Chamber Orchestra of Europe, and this is an excellent version, but it is spoken and sung in German. Of greater interest here is the spookily atmospheric cantata "Die Erste Walpurgisnacht," which is seldom heard in concert, though Kurt Masur will conduct it at the New York Philharmonic next week.
This is a tricky piece to pull off. Many recordings do one thing well; few do all. A driving nine-minute overture makes up a third of the work's length, and it is potentially thrilling, as Christoph von Dohnanyi has shown with the Cleveland Orchestra and, even more, on an old LP with the Frankfurt Museum Orchestra. Unfortunately those recordings suffer when the voices enter.
Mr. Harnoncourt achieves the requisite thrust and commands excellent vocal soloists, including the baritone Thomas Hampson and the bass René Pape, as well as the superb Arnold Schoenberg Choir.
Mr. Hampson is a particularly fine Mendelssohn interpreter. I first encountered his voice as that of St. Paul in the 1986 Michel Corboz recording of the early oratorio "Paulus." Though this work tries less and achieves less than the grand oratorio "Elijah," it is lovely and inspiriting, and when I return to it, I generally reach for Mr. Hampson's performance, well supported by those of all concerned.
This article has been revised to reflect the following correction:
Correction: February 4, 2009
A listing on Friday of Times critics' favorite Mendelssohn recordings referred incorrectly to his Third Symphony at one point. As noted elsewhere, it is known as the "Scottish," not the "Spring." (That is the nickname of Schumann's First Symphony.)
http://www.nytimes.com/2009/01/30/arts/music/30feli.html?sq=Mendelssohn&st=cse&scp=4&pagewanted=print
http://snipurl.com/by4rk
Mendelssohn Favorites Offer Precision, Grace and Grit By THE NEW YORK TIMES
Composer anniversaries aren't what they used to be. In flusher times for the recording industry, you might have expected a freshet if not a flood of releases to wash over the Mendelssohn bicentennial, which becomes official on Tuesday.
There are, to be sure, concerts here and about. The German organ virtuoso Felix Hell will perform Mendelssohn's complete works for the instrument in three programs on Sunday, Monday and Tuesday at the Church of the Transfiguration. Kurt Masur will conduct the New York Philharmonic in a program of Mendelssohn, including the Violin Concerto in E minor with Anne-Sophie Mutter as soloist, from Wednesday through next Saturday at Avery Fisher Hall. And smaller-scale ventures abound. (A concert of Mendelssohn rarities at the Museum of Jewish Heritage is reviewed on Page 5.)
But for recordings it's largely a question of looking back. The classical music critics of The New York Times would like to nudge that process along by listing favorite Mendelssohn recordings of their own. JAMES R. OESTREICH
As a modest contribution to celebrations of the bicentennial of Felix Mendelssohn, the classical music critics of The New York Times list here some of their favorite Mendelssohn recordings.
Anthony Tommasini
VIOLIN CONCERTO IN E MINOR Jascha Heifetz, violinist; Boston Symphony, conducted by Charles Munch (with Beethoven's Violin Concerto; RCA Red Seal 82876-61391-2; CD).
PIANO CONCERTOS NOS. 1, 2; 'VARIATIONS SéRIEUSES'; 'RONDO CAPRICCIOSO' Jean-Yves Thibaudet, pianist; Leipzig Gewandhaus Orchestra, conducted by Herbert Blomstedt (Decca 468 600-2; CD).
'SONGS WITHOUT WORDS' Walter Gieseking, pianist (with "Lyric Pieces" by Grieg; EMI Classics 5 66775 2; two CDs).
'ELIJAH' Dietrich Fischer-Dieskau, baritone; other vocalists; New Philharmonia Orchestra and Chorus, conducted by Rafael Frühbeck de Burgos (EMI Classics 5 68601 2; two CDs).
MENDELSSOHN'S E Minor Violin Concerto is an absolutely perfect piece. By this I simply mean that it accomplishes exactly what it sets out to do. It is a miraculous, multitiered balancing act of Classical grace and Romantic ardor, musical taste and dazzling display, formal structure and impetuosity. And in just 25 minutes!
Among the many superb recordings of the concerto, my favorite these days is Jascha Heifetz's 1959 account with Charles Munch conducting the Boston Symphony Orchestra. In rarefied violin circles you may gather that we are not supposed to like Heifetz. A dazzling virtuoso, yes, but slick and flashy. Do not believe it.
There is a slightly cool and unsentimental integrity to Heifetz's performance. The brisk tempo in the first movement comes across as urgent, not rushed. Heifetz plays the opening minor-mode theme in one arching, magisterial phrase. The utter precision and the rhythmic incisiveness of his playing are stunning. Yet the slow movement sings with elegant poignancy. The playful finale is a wondrous mix of capriciousness and intensity.
I grew up with Rudolf Serkin's exuberant recordings of the two Mendelssohn piano concertos, and there are many other good ones. I especially admire the 2001 release by the French pianist Jean-Yves Thibaudet, with Herbert Blomstedt conducting the Leipzig Gewandhaus Orchestra, an ensemble once directed by Mendelssohn. Mr. Thibaudet brings his trademark brio, elegance and impeccable technique to these spirited, youthful works. In addition, the exceptional clarity of his playing allows the ingenuity of the contrapuntal writing to come through. Mendelssohn was a devotee of Bach. And the recording includes Mr. Thibaudet's brilliant accounts of two Mendelssohn solo works: the "Variations Sérieuses" and the "Rondo Capriccioso."
To describe Mendelssohn's "Songs Without Words" as charming little novelties is to miss the point. These eight volumes of short lyric piano pieces are beautifully made and rich with musical subtleties, qualities that come through in the 1956 recording by the patrician pianist Walter Gieseking. Alas, he recorded only 17 of the 48 pieces. But the set includes his captivating performances of 31 "Lyric Pieces" by Grieg.
The oratorio "Elijah" is not perfect. There are cumbersome aspects to this ambitious score. Still, the somber beauty of Mendelssohn's music gets to me, especially in the 1968 recording conducted by Rafael Frühbeck de Burgos, featuring some incomparable vocal soloists: Janet Baker, the young Gwyneth Jones, Nicolai Gedda and Dietrich Fischer-Dieskau. That's quite a lineup.
Allan Kozinn
SYMPHONY NO. 4, 'A MIDSUMMER NIGHT'S DREAM' OVERTURE AND INCIDENTAL MUSIC Orchestra of the Age of Enlightenment, conducted by Charles Mackerras (Virgin Classics VC 7 90725 2; CD, available in a custom pressing from ArkivMusic.com).
VIOLIN CONCERTO IN E MINOR Janine Jansen, violinist, violist; Leipzig Gewandhaus Orchestra, conducted by Riccardo Chailly (with Bruch's Violin Concerto No. 1, Romance in F; Decca B0007260-02; CD).
STRING QUARTETS, STRING OCTET, OTHER WORKS Emerson String Quartet (Deutsche Grammophon B0003888-02; four CDs).
PIANO SONATA IN E, PRELUDE AND FUGUE, 'VARIATIONS SéRIEUSES,' 'RONDO CAPRICCIOSO' Murray Perahia, pianist (Sony Masterworks 37838; CD).WHEN Charles Mackerras's recording of the "Italian" Symphony was released in 1988, it was rare to hear period-instrument orchestras play music as late as Mendelssohn. But what the Orchestra of the Age of Enlightenment brought to its performance was a combination of transparency and delicacy that I've never heard in another recording of this work (or, for that matter, on any of this ensemble's other recordings). In the "Midsummer Night's Dream" music, the effect is magical, and magic, certainly, was what Mendelssohn was after.
It is virtually impossible to settle on a single reading of the E Minor Violin Concerto. The work has been ubiquitous on disc since the days of 78s, with every interpretive fashion of the 20th century copiously represented. So far the 21st century has brought no stylistically radical departures, but Janine Jansen's account has become a favorite for its energizing freshness, crisp articulation and mercurial spirit. Ms. Jansen plays the solo line with a sweet, singing tone, but even in the slow movement, she keeps the music from becoming lugubrious.
The string quartets have lately been getting the respect they deserve, but slowly: only the first two turn up in concert much, probably because the Canzonetta of the First Quartet and the Intermezzo of the Second are so irresistible. In the remaining four, that charm gives way to greater emotional intensity, and a current theory holds that the dark-hued Sixth may reflect Mendelssohn's despondency over a hopeless love affair with the singer Jenny Lind.
The Emerson players trace that emotional arc deftly and play this music with their customary precision and passion. Smaller works and student pieces fill out the set, along with a multitracked performance of the exquisite String Octet in which the Emerson players perform all eight parts. That may seem a technological party trick, but objections evaporate quickly as this brisk, shapely high-energy performance unfolds. (A video documentary about the recording of the octet is included in a CD-ROM section of the fourth disc.)
Mendelssohn's youthful E Major Piano Sonata may seem lightweight for its time (1826), but it has all the nimbleness of spirit and melodic ingenuity that make his other early works so appealing. Murray Perahia's 1984 recording presents it as decisive and mature as well, but the real treats here are the shorter works, most notably the beautifully involved "Variations Sérieuses."
Steve Smith
VIOLIN CONCERTO IN E MINOR Nathan Milstein, violinist; New York Philharmonic, conducted by Bruno Walter (with other concertos, other performers; Sony Classical 64459, MP3 download; Naxos 8.110977, CD).
SYMPHONY NO. 3, 'A MIDSUMMER NIGHT'S DREAM' OVERTURE AND INCIDENTAL MUSIC Jennifer Vyvyan and Marion Lowe, sopranos; Female Chorus of the Royal Opera House; London Symphony, conducted by Peter Maag (Decca 466 990-2; CD).
SYMPHONY NO. 5 Berlin Philharmonic, conducted by Lorin Maazel (with Franck's Symphony played by the Berlin Radio Symphony; Deutsche Grammophon 449 720-2; CD).
PIANO TRIOS NOS. 1, 2 Trio Wanderer (Harmonia Mundi France HMC 901961; CD).
O F all the war horses in the standard repertory, Mendelssohn's E Minor Violin Concerto is among the few that never grow stale. My collection includes both invaluable vintage performances (Fritz Kreisler, Alfredo Campoli) and vibrant recent accounts (Hilary Hahn, Janine Jansen). But the recording I turn to most often and the one that raises my hair like no other is Nathan Milstein's 1945 version with the New York Philharmonic.
Milstein recorded the concerto several times over the course of a long career, but this account offers the best blend of impetuosity and patrician elegance, along with a conductor of refinement and insight in Bruno Walter. The Sony CD is out of print but can be downloaded from Amazon.com for less than $3. A Naxos reissue features brighter, more detailed sound but is unavailable in the United States because of copyright restrictions; still, where there's a will, there's a way.
Peter Maag's 1960 Decca recording of the Third Symphony ("Scottish") has long been a staple of the Mendelssohn discography, and rightfully so: Maag splendidly captured the work's ruminative mystery and gamboling energy. The regal finale, capped with blazing French horns, has never sounded more resplendent than in this surprisingly rich, full recording, which wears its decades lightly. The sound is slightly thinner in eight selections from "A Midsummer Night's Dream," but the alert, verdant playing more than compensates.
The Fifth Symphony ("Reformation") has not achieved the popularity of the "Scottish" or the "Italian," both of which it predated (despite the chronologically jumbled standard numbering of the symphonies). Lorin Maazel, in a 1961 recording with the Berlin Philharmonic, makes the piece feel titanic in all the right ways. The opening Andante, weighty but never ponderous, leads to an especially fiery Allegro con Fuoco. And Mr. Maazel's mix of power and clarity pays dividends in the finale, based on the Lutheran hymn "Ein' Feste Burg."
The turbulent Piano Trio No. 1 in D minor has long ranked among Mendelssohn's most popular chamber works; accordingly, there is no shortage of recorded performances, including several by ad hoc supergroups. Few manage as exquisite a balance among instruments as that achieved by the Trio Wanderer on its 2007 CD, which also includes a compelling account of the Piano Trio No. 2 in C minor. Trio Wanderer's playing in the Second's demonic Scherzo will have you on the edge of your seat.
Vivien Schweitzer
VIOLIN CONCERTO IN E MINOR, STRING OCTET, THREE LIEDER Daniel Hope, violinist; Chamber Orchestra of Europe, conducted by Thomas Hengelbrock (Deutsche Grammophon 477 6634; CD).
PIANO CONCERTOS NOS. 1, 2; VIOLIN CONCERTO Rudolf Serkin, pianist; Isaac Stern, violinist; Philadelphia Orchestra, Columbia Symphony, conducted by Eugene Ormandy (Sony Classical SBK 46542; CD).
SONGS WITHOUT WORDS Andras Schiff, pianist (Decca 421 119-2; CD).
STRING QUARTET NO. 6 Miró Quartet (with Schubert's String Quintet and Matt Haimovitz, cellist; Oxingale Records OX2006; CD).
MENDELSSOHN, whom Schumann called "the Mozart of the 19th century," enjoyed public approval and financial success during his lifetime. But his posthumous reputation was jeopardized by Wagner's anti-Semitic rants and later assertions by eminent musicologists that his works were conservative and fluffy. Still, profound joy and tenderness are no less valid emotions than sorrow. If you're feeling grumpy, the exuberant Presto of Mendelssohn's String Octet is the ultimate antidepressant.
The violinist Daniel Hope (a descendant of Mendelssohn's teacher Carl Friedrich Zelter) and musicians from the Chamber Orchestra of Europe offer a high-spirited performance of the octet, written when Mendelssohn was 16. The disc also includes a heartfelt rendition of the popular E Minor Violin Concerto with the full orchestra. Thomas Hengelbrock conducts what is said to be the first recording of the 1844 version, which has subtle differences in orchestration and a different cadenza from the final 1845 edition. Mr. Hope also performs his own arrangements of three Mendelssohn songs for violin and piano.
More Mendelssohnian exuberance is on display in his two piano concertos, full of pianistic fireworks and tender lyricism. The pianist Rudolf Serkin plunges into the opening movement of the First Concerto with virtuosic panache, accompanied by the Philadelphia Orchestra conducted by Eugene Ormandy. The disc also includes a performance (with the Columbia Symphony Orchestra) of the darker-hued Second Concerto and a passionate, richly hued performance of the violin concerto with Issac Stern.
Mendelssohn's remarkable lyrical gifts are also revealed in his "Songs Without Words," a set of eight volumes of six songs each, written throughout his career. The pianist Andras Schiff plays 22 of the songs, including the first two "Venetian Gondola Songs" and the vivacious "Spinning Song," with supple and unsentimental musicality.
Mendelssohn wrote the String Quartet No. 6 in F minor, perhaps his darkest work, at 38, in 1847, after the death of Fanny, his beloved sister. It is an anguished cry from the heartbroken composer (who died six months after Fanny) and should certainly have placated critics doubting his ability to convey the deepest pathos. The Miró Quartet gives an intense performance that illuminates the work's Sturm und Drang elements. The players highlight the seething tension of the opening movement and the angst of the second and final movements. Their interpretation of the poignant Adagio (which quotes a song Mendelssohn composed earlier to console Fanny after the death of a friend) is particularly memorable.
James R. Oestreich
SYMPHONIES NOS. 1, 5; 'THE HEBRIDES'; 'RUY BLAS' OVERTURE Gerald Fauth and Olga Gollej, pianists; Andreas Seidel, violinist; Matthias Moosdorf, cellist (MDG 307 1469-2; CD).
STRING SYMPHONIES NOS. 1, 4, 6, 7, 12 Concerto Köln (Teldec 4509-98435-2).
'DIE ERSTE WALPURGISNACHT,' 'A MIDSUMMER NIGHT'S DREAM' OVERTURE AND INCIDENTAL MUSIC Vocal soloists; Chamber Orchestra of Europe, conducted by Nikolaus Harnoncourt (Teldec 4509-94565-2; CD).
'PAULUS' Thomas Hampson, baritone; other soloists; Gulbenkian Chorus and Orchestra of Lisbon, conducted by Michel Corboz (Erato 2292-45279-2; two CDs).
IT may seem perverse for someone as inordinately fond of the symphony orchestra as I am to suggest a disc of chamber reductions of orchestral works. But I do so while enthusiastically seconding the symphony recommendations elsewhere on this page, all among my personal favorites.
The MDG disc, though seemingly spare in concept, is rich in every sense. It includes a generous cross-section of Mendelssohn's music: two of the five mature symphonies, the radiant concert overture "The Hebrides" and the overture to Hugo's drama "Ruy Blas" (which Mendelssohn considered "absolutely dreadful and below all dignity").
The leaner textures give many fascinating insights into the works' structures. But what recommends this disc more than anything is the sheer quality and involvement of the music-making. These performances throb with life. This from performers you have probably never heard of (except possibly the members of the Leipzig String Quartet). I find the CD compulsively listenable.
The best thing about the Concerto Köln disc of Mendelssohn string symphonies is that it is merely the first of three volumes comprising all 12 works. These early pieces demand strong and committed performances, more gritty than pretty, to make their effect, and Concerto Köln supplies them.
The "Midsummer Night's Dream" music receives top billing on a recording from Nikolaus Harnoncourt and the Chamber Orchestra of Europe, and this is an excellent version, but it is spoken and sung in German. Of greater interest here is the spookily atmospheric cantata "Die Erste Walpurgisnacht," which is seldom heard in concert, though Kurt Masur will conduct it at the New York Philharmonic next week.
This is a tricky piece to pull off. Many recordings do one thing well; few do all. A driving nine-minute overture makes up a third of the work's length, and it is potentially thrilling, as Christoph von Dohnanyi has shown with the Cleveland Orchestra and, even more, on an old LP with the Frankfurt Museum Orchestra. Unfortunately those recordings suffer when the voices enter.
Mr. Harnoncourt achieves the requisite thrust and commands excellent vocal soloists, including the baritone Thomas Hampson and the bass René Pape, as well as the superb Arnold Schoenberg Choir.
Mr. Hampson is a particularly fine Mendelssohn interpreter. I first encountered his voice as that of St. Paul in the 1986 Michel Corboz recording of the early oratorio "Paulus." Though this work tries less and achieves less than the grand oratorio "Elijah," it is lovely and inspiriting, and when I return to it, I generally reach for Mr. Hampson's performance, well supported by those of all concerned.
This article has been revised to reflect the following correction:
Correction: February 4, 2009
A listing on Friday of Times critics' favorite Mendelssohn recordings referred incorrectly to his Third Symphony at one point. As noted elsewhere, it is known as the "Scottish," not the "Spring." (That is the nickname of Schumann's First Symphony.)
http://www.nytimes.com/2009/01/30/arts/music/30feli.html?sq=Mendelssohn&st=cse&scp=4&pagewanted=print
http://snipurl.com/by4rk
Social Security on the First Date By RAMESH PONNURU
January 30, 2009
Op-Ed Contributor
Social Security on the First Date By RAMESH PONNURU
DEMOCRATS will probably get their way on most policy matters over the next two years, but bipartisan accomplishments won't be easy. Congressional Republicans won their elections too, and they didn't do so by promising to agree to everything that Democrats want. Yes, Democrats have the votes to muscle through a lot of bills without much Republican support — or any, as the stimulus package passed by the House this week shows. But on some occasions Republican support could be useful.
Take Social Security, which President Obama has suggested he wants to reform. A strategy that is supported only by Democrats could result in their having to take full responsibility for a tax-heavy bill, and some would balk at that prospect. This means that the most likely result is inaction.
This, after all, is what happened when Republicans tried to reform Social Security. President George W. Bush proposed restraining the growth in benefits and allowing young workers to invest some of their payroll-tax contributions for themselves. In 2005, Democrats almost unanimously believed that personal accounts "carved out" of Social Security were a deal-breaker.
Instead, they wanted to raise taxes, especially on high earners. They also thought that young people, especially those with low or moderate incomes, should be encouraged to build capital in savings accounts — but only if these accounts were "added on" to Social Security and seeded with tax credits. Congressional Democrats were not willing to cooperate with Mr. Bush, and Congressional Republicans did not want to take full responsibility for reforming Social Security. So nothing was done.
The stalemate continues today. To break it, each side will have to give up at least one cherished goal. Republicans must accept that Mr. Bush's dream of letting individuals invest Social Security funds is dead. In return, Democrats will need to take tax increases off the table.
This compromise seems more likely than other solutions (though less likely than further stalemate), in part because both sides should agree that solvency will require reductions in the growth of benefits. Progressive price indexing is a good option. Under current policy, tomorrow's retirees get greater benefits than today's. Progressive indexing would keep that rule for low-income workers.
Benefits for high-income workers would, on the other hand, keep up only with inflation. This policy should be palatable to Democrats. If they agree to take the remaining steps to make the program solvent without tax increases, then Republicans should agree to finance the "add-on" savings accounts that Democrats favor.
This deal has something for everyone. Incumbents in both parties would be able to campaign on having saved the program. Republicans would get a big spending cut and avoid tax increases. Democrats would have blocked Mr. Bush's personal accounts, and put most of the burden of rescuing Social Security on the affluent.
Mr. Obama would also be able to make good on a campaign promise. During his debates with John McCain, he said Americans would see a "net spending cut" under his presidency. Given the amount of stimulus spending that Mr. Obama envisions over the next few years, this kind of large, long-term spending reduction is the only way for that net cut to happen. Mr. Obama could demonstrate that his pledges to get past the stale partisan debates of the past weren't just talk.
Most important, this compromise would result in good policy. Social Security needs to be brought into balance, and reasonable spending cuts would do less economic damage than tax increases. Long-term investment is still a good idea for young people. Besides, the ideological divide over "carve-out" and "add-on" accounts is absurd: whether the accounts are inside or outside Social Security is largely a question of accounting.
And who knows? Cooperation on Social Security could pave the way for bipartisan solutions on everything from tax reform to Medicare, by building good will and showing that such accomplishments are possible.
Ramesh Ponnuru is a senior editor for National Review.
http://www.nytimes.com/2009/01/30/opinion/30ponnuru.html?sq=Ponnuru%20Social%20Security&st=cse&scp=1&pagewanted=print
http://snipurl.com/by4be
Op-Ed Contributor
Social Security on the First Date By RAMESH PONNURU
DEMOCRATS will probably get their way on most policy matters over the next two years, but bipartisan accomplishments won't be easy. Congressional Republicans won their elections too, and they didn't do so by promising to agree to everything that Democrats want. Yes, Democrats have the votes to muscle through a lot of bills without much Republican support — or any, as the stimulus package passed by the House this week shows. But on some occasions Republican support could be useful.
Take Social Security, which President Obama has suggested he wants to reform. A strategy that is supported only by Democrats could result in their having to take full responsibility for a tax-heavy bill, and some would balk at that prospect. This means that the most likely result is inaction.
This, after all, is what happened when Republicans tried to reform Social Security. President George W. Bush proposed restraining the growth in benefits and allowing young workers to invest some of their payroll-tax contributions for themselves. In 2005, Democrats almost unanimously believed that personal accounts "carved out" of Social Security were a deal-breaker.
Instead, they wanted to raise taxes, especially on high earners. They also thought that young people, especially those with low or moderate incomes, should be encouraged to build capital in savings accounts — but only if these accounts were "added on" to Social Security and seeded with tax credits. Congressional Democrats were not willing to cooperate with Mr. Bush, and Congressional Republicans did not want to take full responsibility for reforming Social Security. So nothing was done.
The stalemate continues today. To break it, each side will have to give up at least one cherished goal. Republicans must accept that Mr. Bush's dream of letting individuals invest Social Security funds is dead. In return, Democrats will need to take tax increases off the table.
This compromise seems more likely than other solutions (though less likely than further stalemate), in part because both sides should agree that solvency will require reductions in the growth of benefits. Progressive price indexing is a good option. Under current policy, tomorrow's retirees get greater benefits than today's. Progressive indexing would keep that rule for low-income workers.
Benefits for high-income workers would, on the other hand, keep up only with inflation. This policy should be palatable to Democrats. If they agree to take the remaining steps to make the program solvent without tax increases, then Republicans should agree to finance the "add-on" savings accounts that Democrats favor.
This deal has something for everyone. Incumbents in both parties would be able to campaign on having saved the program. Republicans would get a big spending cut and avoid tax increases. Democrats would have blocked Mr. Bush's personal accounts, and put most of the burden of rescuing Social Security on the affluent.
Mr. Obama would also be able to make good on a campaign promise. During his debates with John McCain, he said Americans would see a "net spending cut" under his presidency. Given the amount of stimulus spending that Mr. Obama envisions over the next few years, this kind of large, long-term spending reduction is the only way for that net cut to happen. Mr. Obama could demonstrate that his pledges to get past the stale partisan debates of the past weren't just talk.
Most important, this compromise would result in good policy. Social Security needs to be brought into balance, and reasonable spending cuts would do less economic damage than tax increases. Long-term investment is still a good idea for young people. Besides, the ideological divide over "carve-out" and "add-on" accounts is absurd: whether the accounts are inside or outside Social Security is largely a question of accounting.
And who knows? Cooperation on Social Security could pave the way for bipartisan solutions on everything from tax reform to Medicare, by building good will and showing that such accomplishments are possible.
Ramesh Ponnuru is a senior editor for National Review.
http://www.nytimes.com/2009/01/30/opinion/30ponnuru.html?sq=Ponnuru%20Social%20Security&st=cse&scp=1&pagewanted=print
http://snipurl.com/by4be
Health Care Now By PAUL KRUGMAN
January 30, 2009
Op-Ed Columnist
Health Care Now By PAUL KRUGMAN
The whole world is in recession. But the United States is the only wealthy country in which the economic catastrophe will also be a health care catastrophe — in which millions of people will lose their health insurance along with their jobs, and therefore lose access to essential care.
Which raises a question: Why has the Obama administration been silent, at least so far, about one of President Obama’s key promises during last year’s campaign — the promise of guaranteed health care for all Americans?
Let’s talk about the magnitude of the looming health care disaster.
Just about all economic forecasts, including those of the Obama administration’s own economists, say that we’re in for a prolonged period of very high unemployment. And high unemployment means a sharp rise in the number of Americans without health insurance.
After the economy slumped at the beginning of this decade, five million people joined the ranks of the uninsured — and that was with the unemployment rate peaking at only 6.3 percent. This time the Obama administration says that even with its stimulus plan, unemployment will reach 8 percent, and that it will stay above 6 percent until 2012. Many independent forecasts are even more pessimistic.
Why, then, aren’t we hearing more about ensuring health care access?
Now, it’s possible that those of us who care about this issue are reading too much into the administration’s silence. But let me address three arguments that I suspect Mr. Obama is hearing against moving on health care, and explain why they’re wrong.
First, some people are arguing that a major expansion of health care access would just be too expensive right now, given the vast sums we’re about to spend trying to rescue the economy.
But research sponsored by the Commonwealth Fund shows that achieving universal coverage with a plan similar to Mr. Obama’s campaign proposals would add “only” about $104 billion to federal spending in 2010 — not a small sum, of course, but not large compared with, say, the tax cuts in the Obama stimulus plan.
It’s true that the cost of universal health care will be a continuing expense, reaching far into the future. But that has always been true, and Mr. Obama has always claimed that his health care plan was affordable. The temporary expenses of his stimulus plan shouldn’t change that calculation.
Second, some people in Mr. Obama’s circle may be arguing that health care reform isn’t a priority right now, in the face of economic crisis.
But helping families purchase health insurance as part of a universal coverage plan would be at least as effective a way of boosting the economy as the tax breaks that make up roughly a third of the stimulus plan — and it would have the added benefit of directly helping families get through the crisis, ending one of the major sources of Americans’ current anxiety.
Finally — and this is, I suspect, the real reason for the administration’s health care silence — there’s the political argument that this is a bad time to be pushing fundamental health care reform, because the nation’s attention is focused on the economic crisis. But if history is any guide, this argument is precisely wrong.
Don’t take my word for it. Rahm Emanuel, the White House chief of staff, has declared that “you never want a serious crisis to go to waste.” Indeed. F.D.R. was able to enact Social Security in part because the Great Depression highlighted the need for a stronger social safety net. And the current crisis presents a real opportunity to fix the gaping holes that remain in that safety net, especially with regard to health care.
And Mr. Obama really, really doesn’t want to repeat the mistakes of Bill Clinton, whose health care push failed politically partly because he moved too slowly: by the time his administration was ready to submit legislation, the economy was recovering from recession and the sense of urgency was fading.
One more thing. There’s a populist rage building in this country, as Americans see bankers getting huge bailouts while ordinary citizens suffer.
I agree with administration officials who argue that these financial bailouts are necessary (though I have problems with the specifics). But I also agree with Barney Frank, the chairman of the House Financial Services Committee, who argues that — as a matter of political necessity as well as social justice — aid to bankers has to be linked to a strengthening of the social safety net, so that Americans can see that the government is ready to help everyone, not just the rich and powerful.
The bottom line, then, is that this is no time to let campaign promises of guaranteed health care be quietly forgotten. It is, instead, a time to put the push for universal care front and center. Health care now!
Op-Ed Columnist
Health Care Now By PAUL KRUGMAN
The whole world is in recession. But the United States is the only wealthy country in which the economic catastrophe will also be a health care catastrophe — in which millions of people will lose their health insurance along with their jobs, and therefore lose access to essential care.
Which raises a question: Why has the Obama administration been silent, at least so far, about one of President Obama’s key promises during last year’s campaign — the promise of guaranteed health care for all Americans?
Let’s talk about the magnitude of the looming health care disaster.
Just about all economic forecasts, including those of the Obama administration’s own economists, say that we’re in for a prolonged period of very high unemployment. And high unemployment means a sharp rise in the number of Americans without health insurance.
After the economy slumped at the beginning of this decade, five million people joined the ranks of the uninsured — and that was with the unemployment rate peaking at only 6.3 percent. This time the Obama administration says that even with its stimulus plan, unemployment will reach 8 percent, and that it will stay above 6 percent until 2012. Many independent forecasts are even more pessimistic.
Why, then, aren’t we hearing more about ensuring health care access?
Now, it’s possible that those of us who care about this issue are reading too much into the administration’s silence. But let me address three arguments that I suspect Mr. Obama is hearing against moving on health care, and explain why they’re wrong.
First, some people are arguing that a major expansion of health care access would just be too expensive right now, given the vast sums we’re about to spend trying to rescue the economy.
But research sponsored by the Commonwealth Fund shows that achieving universal coverage with a plan similar to Mr. Obama’s campaign proposals would add “only” about $104 billion to federal spending in 2010 — not a small sum, of course, but not large compared with, say, the tax cuts in the Obama stimulus plan.
It’s true that the cost of universal health care will be a continuing expense, reaching far into the future. But that has always been true, and Mr. Obama has always claimed that his health care plan was affordable. The temporary expenses of his stimulus plan shouldn’t change that calculation.
Second, some people in Mr. Obama’s circle may be arguing that health care reform isn’t a priority right now, in the face of economic crisis.
But helping families purchase health insurance as part of a universal coverage plan would be at least as effective a way of boosting the economy as the tax breaks that make up roughly a third of the stimulus plan — and it would have the added benefit of directly helping families get through the crisis, ending one of the major sources of Americans’ current anxiety.
Finally — and this is, I suspect, the real reason for the administration’s health care silence — there’s the political argument that this is a bad time to be pushing fundamental health care reform, because the nation’s attention is focused on the economic crisis. But if history is any guide, this argument is precisely wrong.
Don’t take my word for it. Rahm Emanuel, the White House chief of staff, has declared that “you never want a serious crisis to go to waste.” Indeed. F.D.R. was able to enact Social Security in part because the Great Depression highlighted the need for a stronger social safety net. And the current crisis presents a real opportunity to fix the gaping holes that remain in that safety net, especially with regard to health care.
And Mr. Obama really, really doesn’t want to repeat the mistakes of Bill Clinton, whose health care push failed politically partly because he moved too slowly: by the time his administration was ready to submit legislation, the economy was recovering from recession and the sense of urgency was fading.
One more thing. There’s a populist rage building in this country, as Americans see bankers getting huge bailouts while ordinary citizens suffer.
I agree with administration officials who argue that these financial bailouts are necessary (though I have problems with the specifics). But I also agree with Barney Frank, the chairman of the House Financial Services Committee, who argues that — as a matter of political necessity as well as social justice — aid to bankers has to be linked to a strengthening of the social safety net, so that Americans can see that the government is ready to help everyone, not just the rich and powerful.
The bottom line, then, is that this is no time to let campaign promises of guaranteed health care be quietly forgotten. It is, instead, a time to put the push for universal care front and center. Health care now!
Cleaner and Faster By DAVID BROOKS
January 30, 2009
Op-Ed Columnist
Cleaner and Faster By DAVID BROOKS
Throughout 2008, Larry Summers, the Harvard economist, built the case for a big but surgical stimulus package. Summers warned that a "poorly provided fiscal stimulus can have worse side effects than the disease that is to be cured." So his proposal had three clear guidelines.
First, the stimulus should be timely. The money should go out "almost immediately." Second, it should be targeted. It should help low- and middle-income people. Third, it should be temporary. Stimulus measures should not raise the deficits "beyond a short horizon of a year or at most two."
Summers was proposing bold action, but his concept came with safeguards: focus on the task at hand, prevent the usual Washington splurge and limit long-term fiscal damage.
Now Barack Obama is president, and Summers has become a top economic adviser. Yet the stimulus approach that has emerged on Capitol Hill abandoned the Summers parameters.
In a fateful decision, Democratic leaders merged the temporary stimulus measure with their permanent domestic agenda — including big increases for Pell Grants, alternative energy subsidies and health and entitlement spending. The resulting package is part temporary and part permanent, part timely and part untimely, part targeted and part untargeted.
It's easy to see why Democrats decided to do this. They could rush through permanent policies they believe in. Plus, they could pay for them with borrowed money. By putting a little of everything in the stimulus package, they avoid the pay-as-you-go rules that might otherwise apply to recurring costs.
But they've created a sprawling, undisciplined smorgasbord, which has spun off a series of unintended consequences. First, by trying to do everything all it once, the bill does nothing well. The money spent on long-term domestic programs means there may not be enough to jolt the economy now (about $290 billion in spending is pushed off into 2011 and later). The money spent on stimulus, meanwhile, means there's not enough to truly reform domestic programs like health technology, schools and infrastructure. The measure mostly pumps more money into old arrangements.
Second, by pumping so much money through government programs, the bill unleashes a tidal wave on state governments. A governor with a few-hundred-million-dollar shortfall will suddenly have to administer an additional $4 billion or $5 billion. That money will be corrosive both when washing in, and when it disappears in a few years time.
Third, the muddle assures ideological confrontation. A stimulus package was always going to be controversial, because economists differ widely about whether or how a stimulus can work. But this bill also permanently alters the role of the federal government, thus guaranteeing a polarizing brawl at the very start of the Obama presidency.
Fourth, Summers's warnings about deficits have been put aside. There is no fiscal exit strategy. Instead, permanent spending commitments are entailed with no permanent funding stream to pay for them.
Fifth, new government expenditures on complex matters are being designed on a hasty, reckless timetable. As readers may know, the policy I am most passionate about is pre-K education. Yet I fervently hope that the Head Start expansion is dropped from this bill. A slapdash and shambolic expansion could discredit the whole idea.
Wise heads are now trying to restore structure and safeguards to the enterprise. In testimony this week, Alice Rivlin, Bill Clinton's former budget director, raised the possibility of separating the temporary from the permanent measures and focusing independently on each. "A long-term investment program should not be put together hastily and lumped in with the anti-recession package," Rivlin testified. "The elements of the investment program must be carefully planned and will not create many jobs right away."
The best course is to return to the original Summers parameters — temporary, targeted and timely — thus making the stimulus cleaner and faster.
Strip out the permanent government programs. Many of them are worthy, but we can have that debate another day. Make the short-term stimulus bigger. Many liberal economists have been complaining it is too small, so replace the permanent programs with something like a big payroll tax cut, which would help the working class.
Add in a fiscal exit strategy so the whole thing is budget neutral over the medium term. Finally, coordinate the stimulus package with plans to shore up the housing and financial markets. Until those come to life, no amount of stimulus will do any good.
This recession is scary and complicated. It's insane to try to tackle it and dozens of other complicated problems, all in one piece of legislation. Leadership involves prioritizing. Those who try to do everything at once will end up with a sprawling, lobbyist-driven mess that does nothing well.
http://www.nytimes.com/2009/01/30/opinion/30brooks.html?sq=Cleaner%20and%20Faster%20Brooks&st=cse&scp=1&pagewanted=print
http://snipurl.com/by45r
Op-Ed Columnist
Cleaner and Faster By DAVID BROOKS
Throughout 2008, Larry Summers, the Harvard economist, built the case for a big but surgical stimulus package. Summers warned that a "poorly provided fiscal stimulus can have worse side effects than the disease that is to be cured." So his proposal had three clear guidelines.
First, the stimulus should be timely. The money should go out "almost immediately." Second, it should be targeted. It should help low- and middle-income people. Third, it should be temporary. Stimulus measures should not raise the deficits "beyond a short horizon of a year or at most two."
Summers was proposing bold action, but his concept came with safeguards: focus on the task at hand, prevent the usual Washington splurge and limit long-term fiscal damage.
Now Barack Obama is president, and Summers has become a top economic adviser. Yet the stimulus approach that has emerged on Capitol Hill abandoned the Summers parameters.
In a fateful decision, Democratic leaders merged the temporary stimulus measure with their permanent domestic agenda — including big increases for Pell Grants, alternative energy subsidies and health and entitlement spending. The resulting package is part temporary and part permanent, part timely and part untimely, part targeted and part untargeted.
It's easy to see why Democrats decided to do this. They could rush through permanent policies they believe in. Plus, they could pay for them with borrowed money. By putting a little of everything in the stimulus package, they avoid the pay-as-you-go rules that might otherwise apply to recurring costs.
But they've created a sprawling, undisciplined smorgasbord, which has spun off a series of unintended consequences. First, by trying to do everything all it once, the bill does nothing well. The money spent on long-term domestic programs means there may not be enough to jolt the economy now (about $290 billion in spending is pushed off into 2011 and later). The money spent on stimulus, meanwhile, means there's not enough to truly reform domestic programs like health technology, schools and infrastructure. The measure mostly pumps more money into old arrangements.
Second, by pumping so much money through government programs, the bill unleashes a tidal wave on state governments. A governor with a few-hundred-million-dollar shortfall will suddenly have to administer an additional $4 billion or $5 billion. That money will be corrosive both when washing in, and when it disappears in a few years time.
Third, the muddle assures ideological confrontation. A stimulus package was always going to be controversial, because economists differ widely about whether or how a stimulus can work. But this bill also permanently alters the role of the federal government, thus guaranteeing a polarizing brawl at the very start of the Obama presidency.
Fourth, Summers's warnings about deficits have been put aside. There is no fiscal exit strategy. Instead, permanent spending commitments are entailed with no permanent funding stream to pay for them.
Fifth, new government expenditures on complex matters are being designed on a hasty, reckless timetable. As readers may know, the policy I am most passionate about is pre-K education. Yet I fervently hope that the Head Start expansion is dropped from this bill. A slapdash and shambolic expansion could discredit the whole idea.
Wise heads are now trying to restore structure and safeguards to the enterprise. In testimony this week, Alice Rivlin, Bill Clinton's former budget director, raised the possibility of separating the temporary from the permanent measures and focusing independently on each. "A long-term investment program should not be put together hastily and lumped in with the anti-recession package," Rivlin testified. "The elements of the investment program must be carefully planned and will not create many jobs right away."
The best course is to return to the original Summers parameters — temporary, targeted and timely — thus making the stimulus cleaner and faster.
Strip out the permanent government programs. Many of them are worthy, but we can have that debate another day. Make the short-term stimulus bigger. Many liberal economists have been complaining it is too small, so replace the permanent programs with something like a big payroll tax cut, which would help the working class.
Add in a fiscal exit strategy so the whole thing is budget neutral over the medium term. Finally, coordinate the stimulus package with plans to shore up the housing and financial markets. Until those come to life, no amount of stimulus will do any good.
This recession is scary and complicated. It's insane to try to tackle it and dozens of other complicated problems, all in one piece of legislation. Leadership involves prioritizing. Those who try to do everything at once will end up with a sprawling, lobbyist-driven mess that does nothing well.
http://www.nytimes.com/2009/01/30/opinion/30brooks.html?sq=Cleaner%20and%20Faster%20Brooks&st=cse&scp=1&pagewanted=print
http://snipurl.com/by45r
Thursday, January 29, 2009
Components of Stimulus Vary in Speed and Efficiency By DAVID M. HERSZENHORN
January 29, 2009
News Analysis
Components of Stimulus Vary in Speed and Efficiency By DAVID M. HERSZENHORN
WASHINGTON — At first, it will trickle into paychecks in small, barely perceptible amounts: perhaps $12 or $13 a week for many American workers, in the form of lower tax withholding.
For the growing ranks of the unemployed, it will be more noticeable: benefit checks due to stop will keep coming, along with an extra $25 a week.
At the grocery store, a family of four on food stamps could find up to $79 more a month on their government-issued debit card.
And far bigger sums will appear, courtesy of Washington, on budget ledgers in state capitals nationwide: billions of dollars for health care, schools and public works.
There is no doubt that the impact of the $819 billion economic stimulus package advanced by President Obama and approved by the House on Wednesday will start to be felt within weeks once the final version becomes law.
But estimating how effective the huge program of tax cuts and spending will be in getting America's economic engines humming again is a far more complex calculation requiring almost line-by-line scrutiny of the 647-page bill, lawmakers, economists and policy analysts say.
While it may be difficult to predict how well the overall plan will work, it is easier to draw conclusions about its individual components, gauging them against the basic goal of any stimulus: to promote economic activity and create jobs as quickly and efficiently as possible.
Devising any economic stimulus plan is tricky: initiatives that can be carried out relatively fast, like tax cuts, tend to provide less bang for the buck in terms of generating jobs and economic growth, while initiatives likely to spur more robust activity, like public works projects, can take so long to get under way that they arrive too late.
Tax Cuts
The provisions intended to have the swiftest impact are the tax cuts, totaling $275 billion, roughly a third of the package.
Republicans say the cuts are too small, some Democrats say they were ill designed in a vain effort to appease House Republicans, and some economists say both sides are right: that the plan should include more effective tax cuts and more of them, and also address specific problems like the weak housing market.
Mr. Obama's signature tax cut would provide a credit of up to $500 for individuals and $1,000 for couples. It won praise in an analysis by the Tax Policy Center, a nonpartisan research group, because it could be carried out quickly, by reducing the amount of money withheld from paychecks.
But the same group also criticized it because it would help families earning as much as $150,000 a year, who are more likely to save than spend. (Saving, or paying off debt, might make sense for individual households, but what the economy needs most is for people to spend money, helping stores to sell more, factories to produce more and employers to avoid cutting additional jobs.)
Some experts say adjusting withholding rates could prove complicated, delaying the money. But the White House says the plan would work even better than a lump-sum rebate; some research suggests that rebate checks are more likely to be saved than tax reductions spread out over a length of time.
Even some economists who generally support the stimulus think that the main tax proposal would provide limited economic lift.
"People are going to spend 30, 40 cents on the dollar, so the multiplier is going to be low," said Adam S. Posen, deputy director of the Peterson Institute of International Economics.
Aid to States
One area where analysts say the bill would be relatively effective is in providing assistance to states, many of which, to comply with balanced-budget requirements, are facing the prospect of steep cuts in jobs and services. Aid to states does not expand economic activity, but it helps prevent cuts that would make the downturn even worse.
An $87 billion provision increasing the federal contribution for Medicaid costs is expected to go a long way to help states close their budget gaps.
But there has been little discussion so far on a proposal by the Senate Republican leader, Mitch McConnell of Kentucky, that aid to states be provided in the form of loans, encouraging them to spend the money wisely and, once the economy rebounds, obligating them to help reduce the national debt.
The bill would also create a $79 billion state fiscal stabilization fund, disbursing half the money in late 2009 and half in late 2010. The Congressional Budget Office has estimated that little of that money would be spent this year.
Infrastructure
The greatest prospect of delay in spending is on infrastructure. The bill provides $30 billion for highway construction and tens of billions more for other transportation projects, water projects, park renovation, military construction; local housing projects and more.
A Congressional Budget Office analysis found that only 64 percent of the bill's spending would be completed within 19 months, and spending on construction projects was among the slowest.
If the economic recovery is slow, that timing could work out perfectly, giving the economy a jolt just when faster-acting components are wearing off. But if there is a quicker-than-expected rebound, many of those projects could start just in time to compete with renewed private spending.
Then there is the risk that the projects themselves have little or no long-term economic value and simply drive up the budget deficit. Democrats bowed to Republican pressure on Tuesday and stripped from the bill a $200 million provision for National Mall restorations.
Education, Health Care
And Alternative Energy
A look at more than $140 billion in the bill's spending on education finds some that can move quickly — for instance, $13 billion each over two years for Title I schools, which serve impoverished students, and for special education under the Individuals With Disabilities Education Act.
But also included are programs that even under the most optimistic timetable will take longer to complete, like $20 billion for school renovations. These would provide little near-term help for the economy.
Similar scrutiny could be trained on health care and especially on alternative energy programs. Like some of the education spending, a large chunk of health care spending would not start until 2012 or later, when, most experts think, the recession will be over.
Automatic Stabilizers
Unemployment benefits and food stamps are such useful stimulus tools that budget analysts refer to them as "automatic stabilizers."
They are built into the system, allowing money to flow quickly to people who need it and likely to spend it.
The House bill would spend $20 billion over five years on added food stamps. If the recovery legislation is adopted by mid-February, officials say, the first added food stamps will be delivered in April and nearly all of that aid used that month.
The legislation would also devote roughly $43 billion over two years to extend and increase unemployment benefits. The provision would add as much as 33 weeks of benefits, for states with the highest unemployment rates.
http://www.nytimes.com/2009/01/29/us/politics/29assess.html?%2334;Following%20the%20Money=&sq=Herszenhorn%20&st=cse&%2334;=&scp=1&pagewanted=print
http://snipurl.com/by41r
News Analysis
Components of Stimulus Vary in Speed and Efficiency By DAVID M. HERSZENHORN
WASHINGTON — At first, it will trickle into paychecks in small, barely perceptible amounts: perhaps $12 or $13 a week for many American workers, in the form of lower tax withholding.
For the growing ranks of the unemployed, it will be more noticeable: benefit checks due to stop will keep coming, along with an extra $25 a week.
At the grocery store, a family of four on food stamps could find up to $79 more a month on their government-issued debit card.
And far bigger sums will appear, courtesy of Washington, on budget ledgers in state capitals nationwide: billions of dollars for health care, schools and public works.
There is no doubt that the impact of the $819 billion economic stimulus package advanced by President Obama and approved by the House on Wednesday will start to be felt within weeks once the final version becomes law.
But estimating how effective the huge program of tax cuts and spending will be in getting America's economic engines humming again is a far more complex calculation requiring almost line-by-line scrutiny of the 647-page bill, lawmakers, economists and policy analysts say.
While it may be difficult to predict how well the overall plan will work, it is easier to draw conclusions about its individual components, gauging them against the basic goal of any stimulus: to promote economic activity and create jobs as quickly and efficiently as possible.
Devising any economic stimulus plan is tricky: initiatives that can be carried out relatively fast, like tax cuts, tend to provide less bang for the buck in terms of generating jobs and economic growth, while initiatives likely to spur more robust activity, like public works projects, can take so long to get under way that they arrive too late.
Tax Cuts
The provisions intended to have the swiftest impact are the tax cuts, totaling $275 billion, roughly a third of the package.
Republicans say the cuts are too small, some Democrats say they were ill designed in a vain effort to appease House Republicans, and some economists say both sides are right: that the plan should include more effective tax cuts and more of them, and also address specific problems like the weak housing market.
Mr. Obama's signature tax cut would provide a credit of up to $500 for individuals and $1,000 for couples. It won praise in an analysis by the Tax Policy Center, a nonpartisan research group, because it could be carried out quickly, by reducing the amount of money withheld from paychecks.
But the same group also criticized it because it would help families earning as much as $150,000 a year, who are more likely to save than spend. (Saving, or paying off debt, might make sense for individual households, but what the economy needs most is for people to spend money, helping stores to sell more, factories to produce more and employers to avoid cutting additional jobs.)
Some experts say adjusting withholding rates could prove complicated, delaying the money. But the White House says the plan would work even better than a lump-sum rebate; some research suggests that rebate checks are more likely to be saved than tax reductions spread out over a length of time.
Even some economists who generally support the stimulus think that the main tax proposal would provide limited economic lift.
"People are going to spend 30, 40 cents on the dollar, so the multiplier is going to be low," said Adam S. Posen, deputy director of the Peterson Institute of International Economics.
Aid to States
One area where analysts say the bill would be relatively effective is in providing assistance to states, many of which, to comply with balanced-budget requirements, are facing the prospect of steep cuts in jobs and services. Aid to states does not expand economic activity, but it helps prevent cuts that would make the downturn even worse.
An $87 billion provision increasing the federal contribution for Medicaid costs is expected to go a long way to help states close their budget gaps.
But there has been little discussion so far on a proposal by the Senate Republican leader, Mitch McConnell of Kentucky, that aid to states be provided in the form of loans, encouraging them to spend the money wisely and, once the economy rebounds, obligating them to help reduce the national debt.
The bill would also create a $79 billion state fiscal stabilization fund, disbursing half the money in late 2009 and half in late 2010. The Congressional Budget Office has estimated that little of that money would be spent this year.
Infrastructure
The greatest prospect of delay in spending is on infrastructure. The bill provides $30 billion for highway construction and tens of billions more for other transportation projects, water projects, park renovation, military construction; local housing projects and more.
A Congressional Budget Office analysis found that only 64 percent of the bill's spending would be completed within 19 months, and spending on construction projects was among the slowest.
If the economic recovery is slow, that timing could work out perfectly, giving the economy a jolt just when faster-acting components are wearing off. But if there is a quicker-than-expected rebound, many of those projects could start just in time to compete with renewed private spending.
Then there is the risk that the projects themselves have little or no long-term economic value and simply drive up the budget deficit. Democrats bowed to Republican pressure on Tuesday and stripped from the bill a $200 million provision for National Mall restorations.
Education, Health Care
And Alternative Energy
A look at more than $140 billion in the bill's spending on education finds some that can move quickly — for instance, $13 billion each over two years for Title I schools, which serve impoverished students, and for special education under the Individuals With Disabilities Education Act.
But also included are programs that even under the most optimistic timetable will take longer to complete, like $20 billion for school renovations. These would provide little near-term help for the economy.
Similar scrutiny could be trained on health care and especially on alternative energy programs. Like some of the education spending, a large chunk of health care spending would not start until 2012 or later, when, most experts think, the recession will be over.
Automatic Stabilizers
Unemployment benefits and food stamps are such useful stimulus tools that budget analysts refer to them as "automatic stabilizers."
They are built into the system, allowing money to flow quickly to people who need it and likely to spend it.
The House bill would spend $20 billion over five years on added food stamps. If the recovery legislation is adopted by mid-February, officials say, the first added food stamps will be delivered in April and nearly all of that aid used that month.
The legislation would also devote roughly $43 billion over two years to extend and increase unemployment benefits. The provision would add as much as 33 weeks of benefits, for states with the highest unemployment rates.
http://www.nytimes.com/2009/01/29/us/politics/29assess.html?%2334;Following%20the%20Money=&sq=Herszenhorn%20&st=cse&%2334;=&scp=1&pagewanted=print
http://snipurl.com/by41r
Awash in a Stream of Movies By DAVID POGUE
ary 29, 2009
State of the Art
Awash in a Stream of Movies By DAVID POGUE
Any movie, any time. Is that too much to ask?
It’s technically possible. It’s what the people want. It will make the movie companies rich. And yet not a single legal source of movies — hotel, plane, pay-per-view, video store, Apple TV, Vudu box, Internet downloads, nothing — offers instant delivery of any movie you want.
Netflix comes close. It’s got the “any movie” part covered, since it stocks virtually every movie ever released on DVD — about 100,000 titles.
As for “any time,” well, Netflix is best known as a DVD-by-mail company. You can freely rent and return DVD movies all month long for a fixed monthly fee ($9 to check out one movie, $14 for two at a time); they come and go in bright red, postage-already-paid mailing envelopes. There are no late fees or penalties. But “any time” boils down to “in a day or two,” because you have to wait for the movie to come in the mail.
But Netflix has been clawing its way out of its dependence on the postal system with a feature called Watch Now — and it’s especially worth watching now.
Phase 1. Twelve months ago, Netflix revealed the original Watch Now. It let you, a regular Netflix subscriber, watch any of 1,000 streaming movies on your Windows PC, on demand, without having to download them first.
In the following months, the catalog grew to 12,000 movies; more are constantly added. Mac software came next. The monthly hours-of-watching limit was eliminated; now any Netflix member with a plan of $9 or more can watch unlimited streaming movies, for no extra charge.
No extra charge is a crazy, game-changing concept. It transforms movie consumption from à la carte into all you can eat. You can watch favorite scenes of individual movies, or try a movie for 15 minutes and then change your mind. In short, you can movie surf, without ever worrying about running up your bill.
Still, a desk chair in front of a PC is not what most people would call the ultimate home theater setup.
Phase 2. Eight months ago, Netflix and Roku introduced a tiny TV-connected box ($100) that does only one thing, but very well: it lets you watch Netflix streaming movies on your TV instead of your PC.
Since a remote control and a TV screen make a clumsy system for browsing and searching the catalog, you still pick the movies you want using your Mac or PC, at Netflix.com. Whatever assortment of titles you choose online appears instantly on your TV’s list of available movies.
The Roku box is great. But let’s face it: It’s another remote to learn, another gadget to connect and more wires around the TV.
Phase 3. About six months ago, things began to get really interesting.
The Roku box was basically just a plastic box o’ software — software that could be built into machines that are already connected to your TV.
One by one, the announcements came: Netflix instant movies became a TiVo feature. An Xbox 360 feature. A Blu-ray DVD player feature (LG and Samsung). Even a feature built right into the TV sets themselves (LG and Vizio, starting this spring).
There’s genius to this master plan; everybody, apparently, wins. Consumers get a better on-demand movie deal than they’ll find anywhere else: $9 a month, unlimited. Netflix attracts millions more subscribers. And the equipment manufacturers gain a marketable new feature without having to spend another nickel on hardware.
You shouldn’t be surprised, in other words, if this instant Netflix thing becomes a huge, megalithic hit, a dominant movie delivery system, a more-or-less standard feature of home theater setups.
To find out what that future will look like, I’ve made an enormous sacrifice in the name of science. I’ve spent several months watching movies, using three of the first Netflix-enhanced products: my own TiVo, an Xbox 360 and an LG Blu-ray player (the BD300). Here’s what I found.
TiVo: The Netflix feature quietly installed itself in the TiVo’s menus one night, without my awareness or involvement. On the TiVo menu, you choose Video on Demand; you’re shown a list of services like YouTube and Amazon Unbox. Choose Netflix, and bam: there’s your list of Watch Now movies, in a scrolling vertical list. Hit Play to play one. (This works on TiVo HD, HD XL and Series 3 models.)
Xbox 360: Assuming you’ve upgraded your Xbox with Microsoft’s most excellent November software update, Netflix is now part of your game console. Log in, choose the Video Marketplace page, click Netflix and there’s your Netflix movie list, gorgeously represented as colorful DVD cases, which flip past as you browse (something like Apple’s Cover Flow feature in iTunes).
There’s one crushing downside, however: you have to pay Microsoft $50 a year for this feature, which is absurd. (That gains you a Gold membership, which also includes other perks.)
LG BD300: The BD300 is a Blu-ray DVD player ($333 bought online). It’s black and shiny and slim, with a beautiful main menu that offers five icons: Movie, Netflix Streaming, Photo, Music and Setup. You don’t need a manual to figure out where to go to see your Watch Now movie list.
On all of these machines, each movie remembers exactly where you left off watching, even if it was on a different machine. Amazing.
Now, instant fixed-fee access to 12,000 movies and TV shows is giddy and life-changing. There are, however, some disappointments.
First, you need a high-speed Internet connection to your TV setup. The faster the service, the better video quality you get; hi-def TV shows, in particular, look fantastic on a decent cable modem.
Second, remember that these movies are streaming. They’re not stored on a hard drive (unlike the Apple TV, Vudu box or Blockbuster’s rival MediaPoint box). So every time you fast-forward or rewind, there’s a 10-second pause for “rebuffering.”
Fortunately, most people don’t scan through movies often; usually, you just sit back and let them play. And when you do scan, little thumbnail images of the movie scenes flash by, one for every 10 seconds of movie, so you have some guidance as you skim.
The third problem is that, as with all Internet downloads, you miss out on a lot: surround sound, subtitles, alternative endings, director’s commentaries and other DVD supplements.
Fourth, and biggest, problem: not all of those 12,000 movies are, ahem, what you’d call Oscar material. There’s an awful lot of chaff, and no new DVD releases at all. (Thanks to the ridiculous Hollywood system of “release windows,” Internet services can’t offer new movies until after they have had their runs on pay-per-view, hotels, DVD “new release” periods and so on.)
On the other hand, that still leaves several thousand great marquee movies to choose from (including the entire Starz Play catalog of 1,200 fairly recent hits: “Ratatouille,” “Superbad,” “No Country for Old Men” and the like). Furthermore, you’re still a Netflix DVD-by-mail customer; if you’re craving a movie that just came out on DVD, you can still get it by mail.
Actually, there’s one more point worth noting — not a technical one, but a psychological one. There’s a side effect of “any movie, any time” that not many people consider. Once you stop having to pay for movies individually, once you’re able to freely movie surf, you lose the risk of making the wrong decision — and some of the joy at having made a good one. In short, movies become a little less special.
Nonetheless, the industry has been trying to sell us on Internet movie downloads for years, and yet it’s remained a techie niche until now. It took Netflix to figure out how to crack the technology code, bringing us tantalizingly close to the “any movie, any time” future that’s surely just around the corner.
E-mail: pogue@nytimes.com
State of the Art
Awash in a Stream of Movies By DAVID POGUE
Any movie, any time. Is that too much to ask?
It’s technically possible. It’s what the people want. It will make the movie companies rich. And yet not a single legal source of movies — hotel, plane, pay-per-view, video store, Apple TV, Vudu box, Internet downloads, nothing — offers instant delivery of any movie you want.
Netflix comes close. It’s got the “any movie” part covered, since it stocks virtually every movie ever released on DVD — about 100,000 titles.
As for “any time,” well, Netflix is best known as a DVD-by-mail company. You can freely rent and return DVD movies all month long for a fixed monthly fee ($9 to check out one movie, $14 for two at a time); they come and go in bright red, postage-already-paid mailing envelopes. There are no late fees or penalties. But “any time” boils down to “in a day or two,” because you have to wait for the movie to come in the mail.
But Netflix has been clawing its way out of its dependence on the postal system with a feature called Watch Now — and it’s especially worth watching now.
Phase 1. Twelve months ago, Netflix revealed the original Watch Now. It let you, a regular Netflix subscriber, watch any of 1,000 streaming movies on your Windows PC, on demand, without having to download them first.
In the following months, the catalog grew to 12,000 movies; more are constantly added. Mac software came next. The monthly hours-of-watching limit was eliminated; now any Netflix member with a plan of $9 or more can watch unlimited streaming movies, for no extra charge.
No extra charge is a crazy, game-changing concept. It transforms movie consumption from à la carte into all you can eat. You can watch favorite scenes of individual movies, or try a movie for 15 minutes and then change your mind. In short, you can movie surf, without ever worrying about running up your bill.
Still, a desk chair in front of a PC is not what most people would call the ultimate home theater setup.
Phase 2. Eight months ago, Netflix and Roku introduced a tiny TV-connected box ($100) that does only one thing, but very well: it lets you watch Netflix streaming movies on your TV instead of your PC.
Since a remote control and a TV screen make a clumsy system for browsing and searching the catalog, you still pick the movies you want using your Mac or PC, at Netflix.com. Whatever assortment of titles you choose online appears instantly on your TV’s list of available movies.
The Roku box is great. But let’s face it: It’s another remote to learn, another gadget to connect and more wires around the TV.
Phase 3. About six months ago, things began to get really interesting.
The Roku box was basically just a plastic box o’ software — software that could be built into machines that are already connected to your TV.
One by one, the announcements came: Netflix instant movies became a TiVo feature. An Xbox 360 feature. A Blu-ray DVD player feature (LG and Samsung). Even a feature built right into the TV sets themselves (LG and Vizio, starting this spring).
There’s genius to this master plan; everybody, apparently, wins. Consumers get a better on-demand movie deal than they’ll find anywhere else: $9 a month, unlimited. Netflix attracts millions more subscribers. And the equipment manufacturers gain a marketable new feature without having to spend another nickel on hardware.
You shouldn’t be surprised, in other words, if this instant Netflix thing becomes a huge, megalithic hit, a dominant movie delivery system, a more-or-less standard feature of home theater setups.
To find out what that future will look like, I’ve made an enormous sacrifice in the name of science. I’ve spent several months watching movies, using three of the first Netflix-enhanced products: my own TiVo, an Xbox 360 and an LG Blu-ray player (the BD300). Here’s what I found.
TiVo: The Netflix feature quietly installed itself in the TiVo’s menus one night, without my awareness or involvement. On the TiVo menu, you choose Video on Demand; you’re shown a list of services like YouTube and Amazon Unbox. Choose Netflix, and bam: there’s your list of Watch Now movies, in a scrolling vertical list. Hit Play to play one. (This works on TiVo HD, HD XL and Series 3 models.)
Xbox 360: Assuming you’ve upgraded your Xbox with Microsoft’s most excellent November software update, Netflix is now part of your game console. Log in, choose the Video Marketplace page, click Netflix and there’s your Netflix movie list, gorgeously represented as colorful DVD cases, which flip past as you browse (something like Apple’s Cover Flow feature in iTunes).
There’s one crushing downside, however: you have to pay Microsoft $50 a year for this feature, which is absurd. (That gains you a Gold membership, which also includes other perks.)
LG BD300: The BD300 is a Blu-ray DVD player ($333 bought online). It’s black and shiny and slim, with a beautiful main menu that offers five icons: Movie, Netflix Streaming, Photo, Music and Setup. You don’t need a manual to figure out where to go to see your Watch Now movie list.
On all of these machines, each movie remembers exactly where you left off watching, even if it was on a different machine. Amazing.
Now, instant fixed-fee access to 12,000 movies and TV shows is giddy and life-changing. There are, however, some disappointments.
First, you need a high-speed Internet connection to your TV setup. The faster the service, the better video quality you get; hi-def TV shows, in particular, look fantastic on a decent cable modem.
Second, remember that these movies are streaming. They’re not stored on a hard drive (unlike the Apple TV, Vudu box or Blockbuster’s rival MediaPoint box). So every time you fast-forward or rewind, there’s a 10-second pause for “rebuffering.”
Fortunately, most people don’t scan through movies often; usually, you just sit back and let them play. And when you do scan, little thumbnail images of the movie scenes flash by, one for every 10 seconds of movie, so you have some guidance as you skim.
The third problem is that, as with all Internet downloads, you miss out on a lot: surround sound, subtitles, alternative endings, director’s commentaries and other DVD supplements.
Fourth, and biggest, problem: not all of those 12,000 movies are, ahem, what you’d call Oscar material. There’s an awful lot of chaff, and no new DVD releases at all. (Thanks to the ridiculous Hollywood system of “release windows,” Internet services can’t offer new movies until after they have had their runs on pay-per-view, hotels, DVD “new release” periods and so on.)
On the other hand, that still leaves several thousand great marquee movies to choose from (including the entire Starz Play catalog of 1,200 fairly recent hits: “Ratatouille,” “Superbad,” “No Country for Old Men” and the like). Furthermore, you’re still a Netflix DVD-by-mail customer; if you’re craving a movie that just came out on DVD, you can still get it by mail.
Actually, there’s one more point worth noting — not a technical one, but a psychological one. There’s a side effect of “any movie, any time” that not many people consider. Once you stop having to pay for movies individually, once you’re able to freely movie surf, you lose the risk of making the wrong decision — and some of the joy at having made a good one. In short, movies become a little less special.
Nonetheless, the industry has been trying to sell us on Internet movie downloads for years, and yet it’s remained a techie niche until now. It took Netflix to figure out how to crack the technology code, bringing us tantalizingly close to the “any movie, any time” future that’s surely just around the corner.
E-mail: pogue@nytimes.com
Wednesday, January 28, 2009
Abdullah II: The 5-State Solution By THOMAS L. FRIEDMAN
January 28, 2009
Op-Ed Columnist
Abdullah II: The 5-State Solution By THOMAS L. FRIEDMAN
In February 2002, I traveled to Saudi Arabia and interviewed the then crown prince, now king, Abdullah, at his Riyadh horse farm. I asked him why the next Arab summit wouldn't just propose to Israel full peace and normalization of relations, by all 22 Arab states, for full withdrawal from all occupied lands and creation of a Palestinian state. Abdullah said that I had read his mind ("Have you broken into my desk?" he asked me) and that he was about to propose just that, which he later did, giving birth to the "Abdullah peace plan."
Unfortunately, neither the Bush team nor Israel ever built upon the Abdullah plan. And the Saudi leader always stopped short of presenting his ideas directly to the Israeli people. Since then, everything has deteriorated.
So, I've wondered lately what King Abdullah would propose if asked to update his plan. I've even probed whether he'd like to do another interview, but he is apparently reticent. Not one to be deterred, I've decided to do the next best thing: read his mind again. Here is my guess at the memo King Abdullah has in his drawer for President Obama. I'd call it: "Abdullah II: The Five-State Solution for Arab-Israeli peace."
Dear President Obama,
Congratulations on your inauguration and for quickly dispatching your new envoy, George Mitchell, a good man, to the Middle East. I wish Mitchell could resume where he left off eight years ago, but the death of Arafat, the decline of the Palestinian Authority in the West Bank, the 2006 Hezbollah-Israel war in Lebanon, the 2009 Hamas-Israel war in Gaza, the continued expansion of colonial Israeli settlements and the deepening involvement of Iran with Hamas and Hezbollah have all created a new reality.
Specifically, the Palestinian Authority is in no position today to assume control of the West Bank, Hamas is incapable of managing Gaza and the introduction of rockets provided by Iran to Hamas has created a situation whereby Israel won't turn over the West Bank to any Palestinians now because it fears Hamas would use it to launch rockets on Israel's international airport. But if we do nothing, Zionist settlers would devour the rest of the West Bank and holy Jerusalem. What can be done?
I am proposing what I would call a five-state solution:
1. Israel agrees in principle to withdraw from every inch of the West Bank and Arab districts of East Jerusalem, as it has from Gaza. Any territories Israel might retain in the West Bank for its settlers would have to be swapped — inch for inch — with land from Israel proper.
2. The Palestinians — Hamas and Fatah — agree to form a national unity government. This government then agrees to accept a limited number of Egyptian troops and police to help Palestinians secure Gaza and monitor its borders, as well as Jordanian troops and police to do the same in the West Bank. The Palestinian Authority would agree to five-year "security assistance programs" with Egypt in Gaza and with Jordan in the West Bank.
With Egypt and Jordan helping to maintain order, Palestinians could focus on building their own credible security and political institutions to support their full independence at the end of five years.
3. Israel would engage in a phased withdrawal over these five years from all of its settlements in the West Bank and Arab Jerusalem — except those agreed to be granted to Israel as part of land swaps — at the same pace that the Palestinians meet the security and governance metrics agreed to in advance by all the parties. The U.S. would be the sole arbiter of whether the metrics have been met by both sides.
4. Saudi Arabia would pay all the costs of the Egyptian and Jordanian trustees, plus a $1 billion a year service fee to each country — as well as all the budgetary needs of the Palestinian Authority. The entire plan would be based on U.N. Resolutions 242 and 338 and blessed by the U.N. Security Council.
The virtues of this five-state solution — Palestine, Egypt, Jordan, Israel and Saudi Arabia — are numerous: Egypt and Jordan, the Arab states that have peace treaties with Israel, would act as transition guarantors that any Israeli withdrawal would not leave a security vacuum in the West Bank, Gaza or Arab Jerusalem that could threaten Israel. Israel would have time for a phased withdrawal of its settlements, and Palestinians would have the chance to do nation-building in an orderly manner. This would be an Arab solution that would put a stop to Iran's attempts to Persianize the Palestinian issue.
President Obama, too much has been broken to go straight back to the two-state solution. It would be like trying to build a house with bricks but no cement. There's no trust and no framework to build it. Israelis and Palestinians need the kind of cement that only Egypt, Saudi Arabia and Jordan can provide. It would give Israelis security and Palestinians a clear pathway to an independent state.
I hope you will give careful consideration to the five-state solution.
Peace be upon you,
Abdullah bin Abdul Aziz
http://www.nytimes.com/2009/01/28/opinion/28friedman.html?sq=Friedman%205-State&st=cse&scp=1&pagewanted=print
http://snipurl.com/by3h2
Op-Ed Columnist
Abdullah II: The 5-State Solution By THOMAS L. FRIEDMAN
In February 2002, I traveled to Saudi Arabia and interviewed the then crown prince, now king, Abdullah, at his Riyadh horse farm. I asked him why the next Arab summit wouldn't just propose to Israel full peace and normalization of relations, by all 22 Arab states, for full withdrawal from all occupied lands and creation of a Palestinian state. Abdullah said that I had read his mind ("Have you broken into my desk?" he asked me) and that he was about to propose just that, which he later did, giving birth to the "Abdullah peace plan."
Unfortunately, neither the Bush team nor Israel ever built upon the Abdullah plan. And the Saudi leader always stopped short of presenting his ideas directly to the Israeli people. Since then, everything has deteriorated.
So, I've wondered lately what King Abdullah would propose if asked to update his plan. I've even probed whether he'd like to do another interview, but he is apparently reticent. Not one to be deterred, I've decided to do the next best thing: read his mind again. Here is my guess at the memo King Abdullah has in his drawer for President Obama. I'd call it: "Abdullah II: The Five-State Solution for Arab-Israeli peace."
Dear President Obama,
Congratulations on your inauguration and for quickly dispatching your new envoy, George Mitchell, a good man, to the Middle East. I wish Mitchell could resume where he left off eight years ago, but the death of Arafat, the decline of the Palestinian Authority in the West Bank, the 2006 Hezbollah-Israel war in Lebanon, the 2009 Hamas-Israel war in Gaza, the continued expansion of colonial Israeli settlements and the deepening involvement of Iran with Hamas and Hezbollah have all created a new reality.
Specifically, the Palestinian Authority is in no position today to assume control of the West Bank, Hamas is incapable of managing Gaza and the introduction of rockets provided by Iran to Hamas has created a situation whereby Israel won't turn over the West Bank to any Palestinians now because it fears Hamas would use it to launch rockets on Israel's international airport. But if we do nothing, Zionist settlers would devour the rest of the West Bank and holy Jerusalem. What can be done?
I am proposing what I would call a five-state solution:
1. Israel agrees in principle to withdraw from every inch of the West Bank and Arab districts of East Jerusalem, as it has from Gaza. Any territories Israel might retain in the West Bank for its settlers would have to be swapped — inch for inch — with land from Israel proper.
2. The Palestinians — Hamas and Fatah — agree to form a national unity government. This government then agrees to accept a limited number of Egyptian troops and police to help Palestinians secure Gaza and monitor its borders, as well as Jordanian troops and police to do the same in the West Bank. The Palestinian Authority would agree to five-year "security assistance programs" with Egypt in Gaza and with Jordan in the West Bank.
With Egypt and Jordan helping to maintain order, Palestinians could focus on building their own credible security and political institutions to support their full independence at the end of five years.
3. Israel would engage in a phased withdrawal over these five years from all of its settlements in the West Bank and Arab Jerusalem — except those agreed to be granted to Israel as part of land swaps — at the same pace that the Palestinians meet the security and governance metrics agreed to in advance by all the parties. The U.S. would be the sole arbiter of whether the metrics have been met by both sides.
4. Saudi Arabia would pay all the costs of the Egyptian and Jordanian trustees, plus a $1 billion a year service fee to each country — as well as all the budgetary needs of the Palestinian Authority. The entire plan would be based on U.N. Resolutions 242 and 338 and blessed by the U.N. Security Council.
The virtues of this five-state solution — Palestine, Egypt, Jordan, Israel and Saudi Arabia — are numerous: Egypt and Jordan, the Arab states that have peace treaties with Israel, would act as transition guarantors that any Israeli withdrawal would not leave a security vacuum in the West Bank, Gaza or Arab Jerusalem that could threaten Israel. Israel would have time for a phased withdrawal of its settlements, and Palestinians would have the chance to do nation-building in an orderly manner. This would be an Arab solution that would put a stop to Iran's attempts to Persianize the Palestinian issue.
President Obama, too much has been broken to go straight back to the two-state solution. It would be like trying to build a house with bricks but no cement. There's no trust and no framework to build it. Israelis and Palestinians need the kind of cement that only Egypt, Saudi Arabia and Jordan can provide. It would give Israelis security and Palestinians a clear pathway to an independent state.
I hope you will give careful consideration to the five-state solution.
Peace be upon you,
Abdullah bin Abdul Aziz
http://www.nytimes.com/2009/01/28/opinion/28friedman.html?sq=Friedman%205-State&st=cse&scp=1&pagewanted=print
http://snipurl.com/by3h2
Wall Street's Socialist Jet-Setters By MAUREEN DOWD
January 28, 2009
Op-Ed Columnist
Wall Street's Socialist Jet-Setters By MAUREEN DOWD
WASHINGTON
As President Obama spreads his New Testament balm over the capital, I'm longing for a bit of Old Testament wrath.
Couldn't he throw down his BlackBerry tablet and smash it in anger over the feckless financiers, the gods of gold and their idols — in this case not a gilt calf but an $87,000 area rug, a cache of diamond Tiffany and Cartier watches and a French-made luxury corporate jet?
Now that we're nationalizing, couldn't we fire any obtuse bankers and auto executives who cling to perks and bonuses even as the economy is following John Thain down his antique commode?
How could Citigroup be so dumb as to go ahead with plans to get a new $50 million corporate jet, the exclusive Dassault Falcon 7X seating 12, after losing $28.5 billion in the past 15 months and receiving $345 billion in government investments and guarantees?
(Now I get why a $400 payment I recently sent to pay off my Citibank Visa was mistakenly applied to my sister-in-law's Citibank Mastercard account.)
The "Citiboobs" — as The New York Post, which broke the news, calls them — watched as the car chieftains got in trouble for flying their private jets to Washington to ask for bailouts, and the A.I.G. moguls got dragged before Congress for spending their bailout on California spa treatments. But the boobs still didn't get the message.
The former masters of the universe don't seem to fully comprehend that their universe has crumbled and, thanks to them, so has ours. Real people are losing real jobs at Caterpillar, Home Depot and Sprint Nextel; these and other companies announced on Monday that they would cut more than 75,000 jobs in the U.S. and around the world, as consumer confidence and home prices swan-dived.
Prodded by an appalled Senator Carl Levin, Tim Geithner — even as he was being confirmed as Treasury secretary — directed Treasury officials to call the Citiboobs and tell them the new jet would not fly.
"They woke up pretty quickly," says a Treasury official, adding that they protested for a bit. "Six months ago, they would have kept the plane and flown it to Washington."
Senator Levin said that the financiers will not be able to change their warped mentality, but will have to be reined in by Geithner's new leashes. "I have no confidence that they intend or desire to change," Levin told me. "These bankers got away with murder, and it's obscene that close to nothing is being asked of financial institutions. I get incensed at the thought that a bank that's getting billions of dollars in taxpayer money is out there buying fancy new airplanes."
New York's attorney general, Andrew Cuomo, always gratifying on the issue of clawing back money from the greedy creeps on Wall Street, on Tuesday subpoenaed Thain, the former Merrill Lynch chief executive, over $4 billion in bonuses he handed out as the failing firm was bought by Bank of America.
In an interview with Maria Bartiromo on CNBC, Thain used the specious, contemptible reasoning that other executives use to rationalize why they're keeping their bonuses as profits are plunging.
"If you don't pay your best people, you will destroy your franchise" and they'll go elsewhere, he said.
Hello? They destroyed the franchise. Let's call their bluff. Let's see what a great job market it is for the geniuses of capitalism who lost $15 billion in three months and helped usher in socialism.
Bartiromo also asked Thain to explain, when jobs and salaries were being cut at his firm, how he could justify spending $1 million to renovate his office. As The Daily Beast and CNBC reported, big-ticket items included curtains for $28,000, a pair of chairs for $87,000, fabric for a "Roman Shade" for $11,000, Regency chairs for $24,000, six wall sconces for $2,700, a $13,000 chandelier in the private dining room and six dining chairs for $37,000, a "custom coffee table" for $16,000, an antique commode "on legs" for $35,000, and a $1,400 "parchment waste can."
Does that mean you can only throw used parchment in it or is it made of parchment? It's psychopathic to spend a million redoing your office when the folks outside it are losing jobs, homes, pensions and savings.
Thain should never rise above the level of stocking the money in A.T.M.'s again. Just think: This guy could well have been Treasury secretary if John McCain had won.
Bartiromo pressed: What was wrong with the office of his predecessor, Stanley O'Neal?
"Well — his office was very different — than — the — the general décor of — Merrill's offices," Thain replied. "It really would have been — very difficult — for — me to use it in the form that it was in."
Did it have a desk and a phone?
How are these ruthless, careless ghouls who murdered the economy still walking around (not to mention that sociopathic sadist Bernie Madoff?) — and not as perps?
Bring on the shackles. Let the show trials begin.
http://www.nytimes.com/2009/01/28/opinion/28dowd.html?%2339;s%20Socialist%20Dowd=&sq=Wall%20Street&st=cse&scp=1&pagewanted=print
http://snipurl.com/by3d9
Op-Ed Columnist
Wall Street's Socialist Jet-Setters By MAUREEN DOWD
WASHINGTON
As President Obama spreads his New Testament balm over the capital, I'm longing for a bit of Old Testament wrath.
Couldn't he throw down his BlackBerry tablet and smash it in anger over the feckless financiers, the gods of gold and their idols — in this case not a gilt calf but an $87,000 area rug, a cache of diamond Tiffany and Cartier watches and a French-made luxury corporate jet?
Now that we're nationalizing, couldn't we fire any obtuse bankers and auto executives who cling to perks and bonuses even as the economy is following John Thain down his antique commode?
How could Citigroup be so dumb as to go ahead with plans to get a new $50 million corporate jet, the exclusive Dassault Falcon 7X seating 12, after losing $28.5 billion in the past 15 months and receiving $345 billion in government investments and guarantees?
(Now I get why a $400 payment I recently sent to pay off my Citibank Visa was mistakenly applied to my sister-in-law's Citibank Mastercard account.)
The "Citiboobs" — as The New York Post, which broke the news, calls them — watched as the car chieftains got in trouble for flying their private jets to Washington to ask for bailouts, and the A.I.G. moguls got dragged before Congress for spending their bailout on California spa treatments. But the boobs still didn't get the message.
The former masters of the universe don't seem to fully comprehend that their universe has crumbled and, thanks to them, so has ours. Real people are losing real jobs at Caterpillar, Home Depot and Sprint Nextel; these and other companies announced on Monday that they would cut more than 75,000 jobs in the U.S. and around the world, as consumer confidence and home prices swan-dived.
Prodded by an appalled Senator Carl Levin, Tim Geithner — even as he was being confirmed as Treasury secretary — directed Treasury officials to call the Citiboobs and tell them the new jet would not fly.
"They woke up pretty quickly," says a Treasury official, adding that they protested for a bit. "Six months ago, they would have kept the plane and flown it to Washington."
Senator Levin said that the financiers will not be able to change their warped mentality, but will have to be reined in by Geithner's new leashes. "I have no confidence that they intend or desire to change," Levin told me. "These bankers got away with murder, and it's obscene that close to nothing is being asked of financial institutions. I get incensed at the thought that a bank that's getting billions of dollars in taxpayer money is out there buying fancy new airplanes."
New York's attorney general, Andrew Cuomo, always gratifying on the issue of clawing back money from the greedy creeps on Wall Street, on Tuesday subpoenaed Thain, the former Merrill Lynch chief executive, over $4 billion in bonuses he handed out as the failing firm was bought by Bank of America.
In an interview with Maria Bartiromo on CNBC, Thain used the specious, contemptible reasoning that other executives use to rationalize why they're keeping their bonuses as profits are plunging.
"If you don't pay your best people, you will destroy your franchise" and they'll go elsewhere, he said.
Hello? They destroyed the franchise. Let's call their bluff. Let's see what a great job market it is for the geniuses of capitalism who lost $15 billion in three months and helped usher in socialism.
Bartiromo also asked Thain to explain, when jobs and salaries were being cut at his firm, how he could justify spending $1 million to renovate his office. As The Daily Beast and CNBC reported, big-ticket items included curtains for $28,000, a pair of chairs for $87,000, fabric for a "Roman Shade" for $11,000, Regency chairs for $24,000, six wall sconces for $2,700, a $13,000 chandelier in the private dining room and six dining chairs for $37,000, a "custom coffee table" for $16,000, an antique commode "on legs" for $35,000, and a $1,400 "parchment waste can."
Does that mean you can only throw used parchment in it or is it made of parchment? It's psychopathic to spend a million redoing your office when the folks outside it are losing jobs, homes, pensions and savings.
Thain should never rise above the level of stocking the money in A.T.M.'s again. Just think: This guy could well have been Treasury secretary if John McCain had won.
Bartiromo pressed: What was wrong with the office of his predecessor, Stanley O'Neal?
"Well — his office was very different — than — the — the general décor of — Merrill's offices," Thain replied. "It really would have been — very difficult — for — me to use it in the form that it was in."
Did it have a desk and a phone?
How are these ruthless, careless ghouls who murdered the economy still walking around (not to mention that sociopathic sadist Bernie Madoff?) — and not as perps?
Bring on the shackles. Let the show trials begin.
http://www.nytimes.com/2009/01/28/opinion/28dowd.html?%2339;s%20Socialist%20Dowd=&sq=Wall%20Street&st=cse&scp=1&pagewanted=print
http://snipurl.com/by3d9
A Stimulus With Merit, and Misses Too By DAVID LEONHARDT
January 28, 2009
Economic Scene
A Stimulus With Merit, and Misses Too By DAVID LEONHARDT
WASHINGTON
How much of a difference will the stimulus make?
Two weeks ago, a Congressional committee posted a table of numbers on its Web site that gave an early answer. The numbers came from the Congressional Budget Office and seemed to show that only 38 percent of the money in the bill would be spent by September 2010. That didn't sound very stimulating, and the numbers soon caused a minor media sensation.
But anyone who looked closely would have seen something strange about the table. It suggested that the bill would cost only $355 billion in all, rather than its actual cost of about $800 billion.
Why? It turns out that the table was analyzing only certain parts of the bill, like new spending on highways, education and energy. It ignored the tax cuts, jobless benefits and Medicaid payments — the very money that will be spent the fastest.
On Monday evening, the Congressional Budget Office put out its analysis of the full bill, and it gave a very different picture. It estimated that about 64 percent of the money, or $526 billion, would be spent by next September.
That timetable may still be slower than ideal, and short of the 75 percent benchmark President Obama has promised, but it isn't terrible. Spending hundreds of billions of dollars takes time. In fact, for all the criticism the stimulus package has been getting, it does pretty well by several important yardsticks.
First of all, the package really is stimulus. It will quickly give money to the people who have been hardest hit by the recession and who, not coincidentally, will be most likely to spend that money soon. The spending also has a chance to do some long-term good, by paying for the computerization of medical records, the weatherization of homes and other such investments.
By my count, the current package has just one major flaw. It could do a lot more to change how the government spends its money. It doesn't have nearly the amount of the fresh, reformist thinking as Mr. Obama's campaign speeches and proposals did. Instead, the bill is mostly a stew of spending on existing programs, whatever their warts may be.
I understand that this approach reflects the realities of political negotiations. It even has some economic merits: it may help speed the flow of money out the door. But it still is a missed opportunity in a few instances.
The biggest is infrastructure. Transportation experts had hoped the package would be the start of not only more spending on infrastructure but also smarter spending on highways, mass transit, sewer systems and other public works. So far, the experts are disappointed.
In the current system, the federal government sends money to states without any real effort to evaluate whether it will pay for worthy projects. States rarely do serious analyses of their own. They build new roads before fixing old ones. They don't consider whether those new roads will lead to faster traffic or simply more traffic. They spend millions of dollars on legislators' pet projects and hulking new sports stadiums. In the world of infrastructure, cost-benefit analysis is still a science of the future.
A couple of weeks ago, Ed Rendell, the Democratic governor of Pennsylvania, came to Washington to talk up infrastructure. He is a member of a tripartisan threesome — along with Michael Bloomberg, New York's independent mayor, and Arnold Schwarzenegger, California's Republican governor — trying to persuade the country to get serious about infrastructure.
In his talk, Mr. Rendell said he understood that the stimulus bill couldn't come close to solving all these problems. But it could make some progress, and Mr. Obama's sky-high approval ratings gave him a wonderful chance to do so. "This is the time to put down some markers — this is the time," Mr. Rendell said.
And the bill does include a couple of markers. It will list on the Web the projects that the federal government is financing — an idea that, amazingly enough, is considered radical — and will require that mayors and governors sign off on projects. That will make it harder for them to lobby for projects now and criticize those same projects later, as Gov. Sarah Palin did with the Bridge to Nowhere. At least one version of the bill also sets aside $5.5 billion to be awarded by the transportation secretary, supposedly on the merits of a project.
But it's not clear how that will work, and there is so much more that could be done. The bill could create a small-scale version of an "infrastructure bank," a free-standing entity that could make more merit-based decisions than Congress does (an idea that Mr. Obama supports). The bill could also finance the creation of new state offices to conduct cost-benefit analyses. It could also help cover the budget shortfalls of public transit systems, instead of simply allocating another $30 billion for the construction of new highways.
Fifty-one transit systems have recently proposed service cuts or fare increases, including those in Atlanta, Denver, New York, Phoenix, St. Louis, San Diego and Washington. If these cuts go through, they will make it harder for people to get to work (or look for work), and they will undermine one of the long-term goals of the stimulus package: laying the groundwork for a greener economy.
It's not just infrastructure, either. The bill includes big, admirable increases in college financial aid — but appears likely to do little to use those increases to improve higher education. The package will also sprinkle millions of dollars on some debatable projects, like the renovation of the National Mall.
The standard that I'm setting here may seem a bit high. Even with its current flaws, the bill has much to recommend it. It will indeed try to encourage significant changes in health care and K-12 education, for example.
The bill is certainly superior to a huge package of tax cuts, which might be politically popular but end up in people's bank accounts rather than stimulating the economy. By now, we should know that tax cuts are not a cure-all. The cuts of 2001 and 2003 couldn't keep the recent expansion from being one of the weakest on record or the current recession from being so deep.
This bill should help the economy in both the near term and the long term. But the government doesn't go out and spend about $800 billion every day. The details matter.
Email: leonhardt@nytimes.com
http://www.nytimes.com/2009/01/28/business/economy/28leonhardt.html?sq=Leonhardt%20&st=cse&%2334;A%20Stimulus%20With%20Merit=&%2334;=&scp=1&pagewanted=print
http://snipurl.com/by2nn
http://www.nytimes.com/interactive/2009/01/26/business/economy/20090126-recessions-graphic.html
Economic Scene
A Stimulus With Merit, and Misses Too By DAVID LEONHARDT
WASHINGTON
How much of a difference will the stimulus make?
Two weeks ago, a Congressional committee posted a table of numbers on its Web site that gave an early answer. The numbers came from the Congressional Budget Office and seemed to show that only 38 percent of the money in the bill would be spent by September 2010. That didn't sound very stimulating, and the numbers soon caused a minor media sensation.
But anyone who looked closely would have seen something strange about the table. It suggested that the bill would cost only $355 billion in all, rather than its actual cost of about $800 billion.
Why? It turns out that the table was analyzing only certain parts of the bill, like new spending on highways, education and energy. It ignored the tax cuts, jobless benefits and Medicaid payments — the very money that will be spent the fastest.
On Monday evening, the Congressional Budget Office put out its analysis of the full bill, and it gave a very different picture. It estimated that about 64 percent of the money, or $526 billion, would be spent by next September.
That timetable may still be slower than ideal, and short of the 75 percent benchmark President Obama has promised, but it isn't terrible. Spending hundreds of billions of dollars takes time. In fact, for all the criticism the stimulus package has been getting, it does pretty well by several important yardsticks.
First of all, the package really is stimulus. It will quickly give money to the people who have been hardest hit by the recession and who, not coincidentally, will be most likely to spend that money soon. The spending also has a chance to do some long-term good, by paying for the computerization of medical records, the weatherization of homes and other such investments.
By my count, the current package has just one major flaw. It could do a lot more to change how the government spends its money. It doesn't have nearly the amount of the fresh, reformist thinking as Mr. Obama's campaign speeches and proposals did. Instead, the bill is mostly a stew of spending on existing programs, whatever their warts may be.
I understand that this approach reflects the realities of political negotiations. It even has some economic merits: it may help speed the flow of money out the door. But it still is a missed opportunity in a few instances.
The biggest is infrastructure. Transportation experts had hoped the package would be the start of not only more spending on infrastructure but also smarter spending on highways, mass transit, sewer systems and other public works. So far, the experts are disappointed.
In the current system, the federal government sends money to states without any real effort to evaluate whether it will pay for worthy projects. States rarely do serious analyses of their own. They build new roads before fixing old ones. They don't consider whether those new roads will lead to faster traffic or simply more traffic. They spend millions of dollars on legislators' pet projects and hulking new sports stadiums. In the world of infrastructure, cost-benefit analysis is still a science of the future.
A couple of weeks ago, Ed Rendell, the Democratic governor of Pennsylvania, came to Washington to talk up infrastructure. He is a member of a tripartisan threesome — along with Michael Bloomberg, New York's independent mayor, and Arnold Schwarzenegger, California's Republican governor — trying to persuade the country to get serious about infrastructure.
In his talk, Mr. Rendell said he understood that the stimulus bill couldn't come close to solving all these problems. But it could make some progress, and Mr. Obama's sky-high approval ratings gave him a wonderful chance to do so. "This is the time to put down some markers — this is the time," Mr. Rendell said.
And the bill does include a couple of markers. It will list on the Web the projects that the federal government is financing — an idea that, amazingly enough, is considered radical — and will require that mayors and governors sign off on projects. That will make it harder for them to lobby for projects now and criticize those same projects later, as Gov. Sarah Palin did with the Bridge to Nowhere. At least one version of the bill also sets aside $5.5 billion to be awarded by the transportation secretary, supposedly on the merits of a project.
But it's not clear how that will work, and there is so much more that could be done. The bill could create a small-scale version of an "infrastructure bank," a free-standing entity that could make more merit-based decisions than Congress does (an idea that Mr. Obama supports). The bill could also finance the creation of new state offices to conduct cost-benefit analyses. It could also help cover the budget shortfalls of public transit systems, instead of simply allocating another $30 billion for the construction of new highways.
Fifty-one transit systems have recently proposed service cuts or fare increases, including those in Atlanta, Denver, New York, Phoenix, St. Louis, San Diego and Washington. If these cuts go through, they will make it harder for people to get to work (or look for work), and they will undermine one of the long-term goals of the stimulus package: laying the groundwork for a greener economy.
It's not just infrastructure, either. The bill includes big, admirable increases in college financial aid — but appears likely to do little to use those increases to improve higher education. The package will also sprinkle millions of dollars on some debatable projects, like the renovation of the National Mall.
The standard that I'm setting here may seem a bit high. Even with its current flaws, the bill has much to recommend it. It will indeed try to encourage significant changes in health care and K-12 education, for example.
The bill is certainly superior to a huge package of tax cuts, which might be politically popular but end up in people's bank accounts rather than stimulating the economy. By now, we should know that tax cuts are not a cure-all. The cuts of 2001 and 2003 couldn't keep the recent expansion from being one of the weakest on record or the current recession from being so deep.
This bill should help the economy in both the near term and the long term. But the government doesn't go out and spend about $800 billion every day. The details matter.
Email: leonhardt@nytimes.com
http://www.nytimes.com/2009/01/28/business/economy/28leonhardt.html?sq=Leonhardt%20&st=cse&%2334;A%20Stimulus%20With%20Merit=&%2334;=&scp=1&pagewanted=print
http://snipurl.com/by2nn
http://www.nytimes.com/interactive/2009/01/26/business/economy/20090126-recessions-graphic.html
Tuesday, January 27, 2009
John Updike, a Lyrical Writer of the Middle-Class Man, Dies at 76 By CHRISTOPHER LEHMANN-HAUPT
John Updike, a Lyrical Writer of the Middle-Class Man, Dies at 76 By CHRISTOPHER LEHMANN-HAUPT
John Updike, the kaleidoscopically gifted writer whose quartet of Rabbit novels highlighted a body of fiction, verse, essays and criticism so vast, protean and lyrical as to place him in the first rank of American authors, died on Tuesday in Danvers, Mass. He was 76 and lived in Beverly Farms, Mass.
The cause was cancer, according to a statement by Knopf, his publisher. A spokesman said Mr. Updike had died at the Hospice of the North Shore in Danvers.
Of Mr. Updike’s many novels and stories, perhaps none captured the imagination of the book-reading public more than his precisely observed tales about ordinary citizens in small-town and urban settings.
His best-known protagonist, Harry Rabbit Angstrom, first appears as a former high-school basketball star trapped in a loveless marriage and a sales job he hates. Through the four novels whose titles bear his nickname — “Rabbit, Run,” “Rabbit Redux,” “Rabbit Is Rich” and “Rabbit at Rest” — the author traces the funny, restless and questing life of this middle-American against the background of the last half-century’s major events.
“My subject is the American Protestant small-town middle class,” Mr. Updike told Jane Howard in a 1966 interview for Life magazine. “I like middles,” he continued. “It is in middles that extremes clash, where ambiguity restlessly rules.”
From his earliest short stories, he found his subject in the everyday dramas of marriage, sex and divorce, setting them most often in the fictional town of Olinger, Pa., which he described as “a square mile of middle-class homes physically distinguished by a bend in the central avenue that compels some side streets to deviate from the grid.” He wrote about America with boundless curiosity and wit in prose so careful and attentive that it burnished the ordinary with a painterly gleam.
Here he is in “A Sense of Shelter,” an early short story:
“Snow fell against the high school all day, wet big-flake snow that did not accumulate well. Sharpening two pencils, William looked down on a parking lot that was a blackboard in reverse; car tires had cut smooth arcs of black into the white, and wherever a school bus had backed around, it had left an autocratic signature of two V’s.”
The detail of his writing was so rich that it inspired two schools of thought on Mr. Updike’s fiction: those who responded to his descriptive prose as to a kind of poetry, a sensuous engagement with the world, and those who argued that it was more style than content.
The latter position was defined by James Wood in the 1999 essay “John Updike’s Complacent God.”
“He is a prose writer of great beauty,” Mr. Wood wrote, “but that prose confronts one with the question of whether beauty is enough, and whether beauty always conveys all that a novelist must convey.”
Astonishingly industrious and prolific, Mr. Updike turned out three pages a day of fiction, essays, criticism or verse, proving the maxim that several pages a day was at least a book a year — or more. Mr. Updike published 60 books in his lifetime; his final one, “My Father’s Tears and Other Stories,” is to be published in June.
“I would write ads for deodorants or labels for catsup bottles, if I had to,” he told The Paris Review in 1967. “The miracle of turning inklings into thoughts and thoughts into words and words into metal and print and ink never palls for me.”
His vast output of poetry, which tended toward light verse, and his wide-ranging essays and criticism filled volume after volume. Among them are “Golf Dreams: Writings on Golf” (1996), “Just Looking: Essays on Art” (1989), “Still Looking: Essays on American Art” (2005) and “Self-Consciousness: Memoirs” (1989). One famous article was on the baseball star Ted Williams’s last game, “Hub Fans Bid Kid Adieu” (1977), which first appeared in The New Yorker in 1960.
As his fiction matured, Mr. Updike’s novels sometimes became more exotic and experimental in form, locale and subject matter. “The Coup” (1978) was set in an imaginary African country. “Brazil” (1994) was a venture in magic realism. “Toward the End of Time” (1997) was set in 2020, after a war between the United States and China. “Gertrude and Claudius” (2000) was about Hamlet’s mother and uncle. And “The Terrorist” (2006) was a fictional study of a convert to Islam who tries to blow up the Lincoln Tunnel.
Mr. Updike never abandoned short stories, of which he turned out several hundred, most of them first appearing in The New Yorker. It was here that he exercised his exquisitely sharp eye for the minutiae of domestic routine and the conflicts that animated it for him — between present satisfaction and future possibility, between sex and spirituality, and between the beauty of creation and the looming threat of death, which he summed up famously in the concluding sentence of “Pigeon Feathers,” the title story of his second collection (1962).
The story is about a boy, David, who is forced to shoot some pigeons in a barn and then watches, fascinated, as their feathers float to the ground. “He was robed in this certainty: that the God who had lavished such craft upon these worthless birds would not destroy His whole Creation by refusing to let David live forever.”
Philip Roth, one of Mr. Updike’s literary peers, said Tuesday: “John Updike is our time’s greatest man of letters, as brilliant a literary critic and essayist as he was a novelist and short story writer. He is and always will be no less a national treasure than his 19th-century precursor, Nathaniel Hawthorne.”
Growing Up
John Hoyer Updike was born on March 18, 1932, in Reading, Pa., and grew up in the nearby town of Shillington. He was the only child of Wesley Russell Updike, a junior high school math teacher of Dutch descent, and Linda Grace Hoyer Updike, who later also published fiction in The New Yorker and elsewhere. His was a solitary childhood made more so by his family’s move when he was 13 to his mother’s birthplace, on an 80-acre farm near Plowville, Pa. From there both he and his father commuted 11 miles to school in town, but the isolation fired the boy’s imagination as well as his desire to take flight from aloneness.
Sustained by hours of reading in the local library and by his mother’s encouragement to write, he aspired first to be either an animator for Walt Disney or a magazine cartoonist. But a sense of narrative was implanted early, perhaps nurtured by summer work as a copyboy for a local newspaper, The Reading Eagle, for which he wrote several feature articles.
After graduating from high school as co-valedictorian and senior-class president, Mr. Updike attended Harvard College on a scholarship. Although he majored in English and wrote for and edited The Harvard Lampoon, he continued his cartooning. In 1953 he married Mary Entwistle Pennington, a Radcliffe fine arts major.
Graduating from Harvard in 1954 summa cum laude, he won a Knox Fellowship at the Ruskin School of Drawing and Fine Arts in Oxford. In June of that year, his short story “Friends From Philadelphia” was accepted, along with a poem, by The New Yorker. It was an event, he later said, that remained “the ecstatic breakthrough of my literary life.”
Following the birth of his first child, Elizabeth, the couple returned to America, and Mr. Updike went to work writing Talk of the Town pieces for The New Yorker.
Two years later, with the arrival of a second child, David, the couple, needing more space, moved to Ipswich, Mass., an hour north of Boston, where Mr. Updike kept his ties to The New Yorker but concentrated on his poetry and fiction. In 1959, a third child, Michael, was born, followed the next year by a fourth, Miranda.
Early Works
The move to Ipswich proved creatively invigorating. By 1959 Mr. Updike had completed three books — a volume of poetry, “The Carpentered Hen and Other Tame Creatures,” a novel, “The Poorhouse Fair” and a collection of stories, “The Same Door” — and placed them with Alfred A. Knopf, which remained his publisher throughout his career. From 1954 to 1959, he also published more than a hundred essays, articles, poems and short stories in The New Yorker.
The move to a small town also seemed to stimulate his memories of Shillington and his creation of its fictional counterpart, Olinger. All his early stories were set there or in a neighboring city modeled on Reading, as were his first four novels, “The Poorhouse Fair,” “The Centaur,” “Of the Farm” and “Rabbit, Run.” “The Poorhouse Fair” (1959), avoiding the usual coming-of-age tale of most beginners, established Mr. Updike’s reputation as an important novelist. Based on an old people’s home near Shillington, the novel explores the homogenization of society among members of the author’s grandfather’s generation.
“The Centaur” (1963), more autobiographical, welds the Greek myth of Chiron, the wounded centaur who gives up his immortality for the release of Prometheus, to the story of a mocked Olinger high-school science teacher who sacrifices himself for his son. It won the 1964 National Book Award for fiction.
“Of the Farm” (1965), set not far from Olinger, focuses on the mother of a farm family who fears she will die before her son, gone into advertising in New York, will fulfill her dream of his becoming a poet.
With “Couples” (1968), his fifth novel, Mr. Updike moved his setting away from Pennsylvania to the fictional Tarbox, Mass. There he explores sexual coupling and uncoupling in a community of young married couples who, as Wilfrid Sheed wrote in The New York Times Book Review, “wanted to get away from the staleness of Old America and the vulgarity of the new; who wanted to live beautifully in beautiful surroundings; to raise intelligent children in renovated houses in absolutely authentic rural centers.” “Couples,” which became a best seller, was for its time remarkably frank about sex and became well known for its lengthy detail and often lyrical descriptions of sexual acts.
With the Rabbit quartet, Mr. Updike cast his keen eye on a still wider world. Where “Rabbit, Run” plays out its present-tense narrative in domestic squalor, its three sequels, published in 10-year intervals, encompass the later 20th century American experience: “Rabbit Redux” (1971) the cultural turmoil of the 1960s; “Rabbit Is Rich” (1981) the boom years of the 1970s, the oil crisis and inflation; and “Rabbit at Rest” (1991), set in the time of what Rabbit calls “Reagan’s reign,” with its trade war with Japan, its AIDS epidemic and the terror bombing of Pan Am 103 over Lockerbie, Scotland.
Rabbit lies dying in a hospital at the end of the last volume, overweight, worn-out, felled by a coronary infarction during a one-on-one basketball game. With his life over, many critics judged that Rabbit had entered the pantheon of signal American literary figures, joining Huck Finn, Jay Gatsby, Holden Caulfield and the like.
“Rabbit Redux” was considered the weakest of the set, but “Rabbit Is Rich” and “Rabbit at Rest” both won Pulitzer Prizes and other awards. Reissued as a set in 1995, “Rabbit Angstrom: A Tetralogy” was pronounced by some to be a contender for the crown of great American novel.
As a small-town businessman of limited scope, Rabbit is obviously very different from his creator. Yet the two of them share a middle-American view of the world, with the difference that Mr. Updike was exquisitely self-conscious. Against the grain of his calling and temperament, he strove, like the German writer Thomas Mann, for a burgherly life.
He took up golf, which he played with passionate enthusiasm and also a writer’s eye, noting the grace notes in others’ swings and tiny variations in the landscape. He was a tall, handsome man with a prominent nose and a head of hair that Tom Wolfe once compared to “monkish thatch.” It eventually turned white, as did his bushy eyebrows, giving him a senatorial appearance. And though as a youth he suffered from both a stutter and psoriasis, he became a person of immense charm, unfailingly polite and gracious in public.
As a citizen of Ipswich, he participated in local affairs, serving on the Congregational Church building committee and the Democratic town committee and writing a pageant for the town’s 17th-Century Day. For a while he worked downtown, in an office above a restaurant. Although politically liberal, he was virtually alone among American writers to declare himself in support of the Vietnam War.
In 1974 he separated from Mary and moved to Boston, where he taught briefly at Boston University. In 1976 the Updikes were divorced, and the following year he married Martha Ruggles Bernhard, settling with her and her three children first in Georgetown, Mass., and then in 1984 in Beverly Farms, both towns in the same corner of the state as Ipswich.
In addition to his wife, Martha, he is survived by his sons David, of Cambridge, Mass., and Michael, of Newburyport, Mass.; his daughters Miranda, of Ipswich, and Elizabeth, of Maynard, Mass.; three stepsons, John Bernhard, of Lexington, Mass., Jason Bernhard, of Brooklyn, and Frederic Bernhard, of New Canaan, Conn.; seven grandchildren, and seven step-grandchildren.
A Book a Year
With the storehouse of his youthful experience emptying and his material circumstances enriched — the bestselling “Couples” put its author’s face on the cover of Time magazine — he nevertheless determined to keep publishing a book a year.
“Writing’s gotten to be a habit,” he told Michiko Kakutani in an interview with The Times in 1982, a year after “Rabbit Is Rich” was published. “Sometimes the books do seem kind of silly and very papery, but there are moments when a sentence or a series of sentences clicks.”
Among the dozen or more novels he brought out in the next quarter century, some clicked, like “The Witches of Eastwick” (1984), celebrated by some as an exuberant sexual comedy and a satirical view of women’s liberation. It was made into a film starring Jack Nicholson, Cher, Susan Sarandon and Michelle Pfeiffer.
He returned to the witches in another novel, “The Widows of Eastwick,” published in October, portraying them as widows revisiting the town. No longer preying on men as they once did, they are now “ordinary women,” Ms. Kakutani wrote in her review, “haunted by the sins of their youth, frightened of the looming prospect of the grave and trying their best to get by, day by day by day.”
Other later Updike novels seemed schematic, like the author’s three takes on Hawthorne’s “Scarlet Letter”: “Roger’s Version” (1986), “S” (1988) and “A Month of Sundays” (1975). “Memories of the Ford Administration” (1992), linking personal guilt to history; “Seek My Face” (2002), an improvisation on the life of Jackson Pollock; and “Villages” (2004), about small-town adultery, also found lukewarm receptions.
Some readers complained about his portrayal of women. In an interview with The Times in 1988, Mr. Updike acknowledged the criticism that “my women are never on the move, that they’re always stuck where the men have put them.” His “only defense,” he said, “would be that it’s in the domesticity, the family, the sexual relations, that women interest me. I don’t write about too many male businessmen, and I’m not apt to write about too many female businessmen.”
Yet in trying to address this criticism by creating what he called “active and dynamic” women in “The Witches of Eastwick” and “S,” he may have made things worse. Some reviewers detected behind the author’s apparent respect for these female dynamos more ambivalence than anything else.
Meanwhile, the essays, book reviews, art criticism, reminiscences, introductions, forewords, prefaces, speeches, travel notes, film commentary, prose sketches, ruminations and other occasional jottings poured forth inexhaustibly, as if the experiences of his five senses only became real once recorded on paper.
The novelist Martin Amis sketched Mr. Updike plausibly in a 1991 review of a collection for The Times Book Review: “Preparing his cup of Sanka over the singing kettle, he wears his usual expression: that of a man beset by an embarrassment of delicious drolleries. The telephone starts ringing. A science magazine wants something pithy on the philosophy of subatomic thermodynamics; a fashion magazine wants 10,000 words on his favorite color. No problem — but can they hang on? Mr. Updike has to go upstairs again and blurt out a novel.”
Nonfiction Works
Over the decades, the assorted nonfiction filled six thick volumes, “Assorted Prose” (1965), “Picked-Up Pieces” (1975), “Hugging the Shore” (1983), “Odd Jobs” (1991), “More Matter” (1999) and “Due Considerations” (2007). The impression they left most indelibly was their author’s vast range in time, space and discipline as a reader, and his deep capacity to understand, appreciate, discriminate, explain and guide. As he once said: “I think it good for an author, baffled by obtuse reviews of himself, to discover what a recalcitrant art reviewing is, how hard it is to keep the plot straight, let alone to sort out one’s honest responses.”
And whatever his flaws as a novelist, his mastery of the short-story form at least for a time continued to grow. Reviewing Mr. Updike’s sixth collection of stories, “Museums and Women and Other Stories” (1972), Anatole Broyard wrote in The Times, “His former preciousness has toughened into precision.” He concluded, “His language, which was once like a cat licking its fur, now stays closer to its subject, has become a means instead of an end in itself.”
Not incidentally, it was in a story collection — his fifth, “Bech: A Book” (1970) — that Mr. Updike created a counter-self living a counter-life in the character Henry Bech. Bech is an unmarried, urban, blocked Jewish writer immersed in the swim of literary celebrity — “a vain, limp leech on the leg of literature as it waded through swampy times,” as Bech himself put it in the third volume devoted to him, “Bech at Bay: A Quasi-Novel” (1998), which followed “Bech Is Back” (1982).
As Mr. Updike’s opposite, Henry Bech not only entertained his readers in a voice very different from his creator’s — world-weary, full of schmerz and a touch of schmalz — he also undertook certain tasks that Mr. Updike avoided, like attending literary dinners, tsk-tsking over a younger generation’s minimalist prose and maximal tendency to write memoirs, working off grudges, murdering critics and interviewing John Updike for The New York Times Book Review.
Bech even wins the Nobel Prize for Literature, something that Mr. Updike never did, to the consternation of many Western writers and critics.
By contrasting so sharply with his creator, Henry Bech also defined Mr. Updike more distinctly, particularly his determination to stick to the essentials of his craft. As Mr. Updike told The Paris Review about his decision to shun the New York spotlight:
“Hemingway described literary New York as a bottle full of tapeworms trying to feed on each other. When I write, I aim in my mind not toward New York but toward a vague spot a little to the east of Kansas. I think of the books on library shelves, without their jackets, years old, and a countryish teenaged boy finding them, have them speak to him. The reviews, the stacks in Brentano’s, are just hurdles to get over, to place the books on that shelf.”
John Updike, the kaleidoscopically gifted writer whose quartet of Rabbit novels highlighted a body of fiction, verse, essays and criticism so vast, protean and lyrical as to place him in the first rank of American authors, died on Tuesday in Danvers, Mass. He was 76 and lived in Beverly Farms, Mass.
The cause was cancer, according to a statement by Knopf, his publisher. A spokesman said Mr. Updike had died at the Hospice of the North Shore in Danvers.
Of Mr. Updike’s many novels and stories, perhaps none captured the imagination of the book-reading public more than his precisely observed tales about ordinary citizens in small-town and urban settings.
His best-known protagonist, Harry Rabbit Angstrom, first appears as a former high-school basketball star trapped in a loveless marriage and a sales job he hates. Through the four novels whose titles bear his nickname — “Rabbit, Run,” “Rabbit Redux,” “Rabbit Is Rich” and “Rabbit at Rest” — the author traces the funny, restless and questing life of this middle-American against the background of the last half-century’s major events.
“My subject is the American Protestant small-town middle class,” Mr. Updike told Jane Howard in a 1966 interview for Life magazine. “I like middles,” he continued. “It is in middles that extremes clash, where ambiguity restlessly rules.”
From his earliest short stories, he found his subject in the everyday dramas of marriage, sex and divorce, setting them most often in the fictional town of Olinger, Pa., which he described as “a square mile of middle-class homes physically distinguished by a bend in the central avenue that compels some side streets to deviate from the grid.” He wrote about America with boundless curiosity and wit in prose so careful and attentive that it burnished the ordinary with a painterly gleam.
Here he is in “A Sense of Shelter,” an early short story:
“Snow fell against the high school all day, wet big-flake snow that did not accumulate well. Sharpening two pencils, William looked down on a parking lot that was a blackboard in reverse; car tires had cut smooth arcs of black into the white, and wherever a school bus had backed around, it had left an autocratic signature of two V’s.”
The detail of his writing was so rich that it inspired two schools of thought on Mr. Updike’s fiction: those who responded to his descriptive prose as to a kind of poetry, a sensuous engagement with the world, and those who argued that it was more style than content.
The latter position was defined by James Wood in the 1999 essay “John Updike’s Complacent God.”
“He is a prose writer of great beauty,” Mr. Wood wrote, “but that prose confronts one with the question of whether beauty is enough, and whether beauty always conveys all that a novelist must convey.”
Astonishingly industrious and prolific, Mr. Updike turned out three pages a day of fiction, essays, criticism or verse, proving the maxim that several pages a day was at least a book a year — or more. Mr. Updike published 60 books in his lifetime; his final one, “My Father’s Tears and Other Stories,” is to be published in June.
“I would write ads for deodorants or labels for catsup bottles, if I had to,” he told The Paris Review in 1967. “The miracle of turning inklings into thoughts and thoughts into words and words into metal and print and ink never palls for me.”
His vast output of poetry, which tended toward light verse, and his wide-ranging essays and criticism filled volume after volume. Among them are “Golf Dreams: Writings on Golf” (1996), “Just Looking: Essays on Art” (1989), “Still Looking: Essays on American Art” (2005) and “Self-Consciousness: Memoirs” (1989). One famous article was on the baseball star Ted Williams’s last game, “Hub Fans Bid Kid Adieu” (1977), which first appeared in The New Yorker in 1960.
As his fiction matured, Mr. Updike’s novels sometimes became more exotic and experimental in form, locale and subject matter. “The Coup” (1978) was set in an imaginary African country. “Brazil” (1994) was a venture in magic realism. “Toward the End of Time” (1997) was set in 2020, after a war between the United States and China. “Gertrude and Claudius” (2000) was about Hamlet’s mother and uncle. And “The Terrorist” (2006) was a fictional study of a convert to Islam who tries to blow up the Lincoln Tunnel.
Mr. Updike never abandoned short stories, of which he turned out several hundred, most of them first appearing in The New Yorker. It was here that he exercised his exquisitely sharp eye for the minutiae of domestic routine and the conflicts that animated it for him — between present satisfaction and future possibility, between sex and spirituality, and between the beauty of creation and the looming threat of death, which he summed up famously in the concluding sentence of “Pigeon Feathers,” the title story of his second collection (1962).
The story is about a boy, David, who is forced to shoot some pigeons in a barn and then watches, fascinated, as their feathers float to the ground. “He was robed in this certainty: that the God who had lavished such craft upon these worthless birds would not destroy His whole Creation by refusing to let David live forever.”
Philip Roth, one of Mr. Updike’s literary peers, said Tuesday: “John Updike is our time’s greatest man of letters, as brilliant a literary critic and essayist as he was a novelist and short story writer. He is and always will be no less a national treasure than his 19th-century precursor, Nathaniel Hawthorne.”
Growing Up
John Hoyer Updike was born on March 18, 1932, in Reading, Pa., and grew up in the nearby town of Shillington. He was the only child of Wesley Russell Updike, a junior high school math teacher of Dutch descent, and Linda Grace Hoyer Updike, who later also published fiction in The New Yorker and elsewhere. His was a solitary childhood made more so by his family’s move when he was 13 to his mother’s birthplace, on an 80-acre farm near Plowville, Pa. From there both he and his father commuted 11 miles to school in town, but the isolation fired the boy’s imagination as well as his desire to take flight from aloneness.
Sustained by hours of reading in the local library and by his mother’s encouragement to write, he aspired first to be either an animator for Walt Disney or a magazine cartoonist. But a sense of narrative was implanted early, perhaps nurtured by summer work as a copyboy for a local newspaper, The Reading Eagle, for which he wrote several feature articles.
After graduating from high school as co-valedictorian and senior-class president, Mr. Updike attended Harvard College on a scholarship. Although he majored in English and wrote for and edited The Harvard Lampoon, he continued his cartooning. In 1953 he married Mary Entwistle Pennington, a Radcliffe fine arts major.
Graduating from Harvard in 1954 summa cum laude, he won a Knox Fellowship at the Ruskin School of Drawing and Fine Arts in Oxford. In June of that year, his short story “Friends From Philadelphia” was accepted, along with a poem, by The New Yorker. It was an event, he later said, that remained “the ecstatic breakthrough of my literary life.”
Following the birth of his first child, Elizabeth, the couple returned to America, and Mr. Updike went to work writing Talk of the Town pieces for The New Yorker.
Two years later, with the arrival of a second child, David, the couple, needing more space, moved to Ipswich, Mass., an hour north of Boston, where Mr. Updike kept his ties to The New Yorker but concentrated on his poetry and fiction. In 1959, a third child, Michael, was born, followed the next year by a fourth, Miranda.
Early Works
The move to Ipswich proved creatively invigorating. By 1959 Mr. Updike had completed three books — a volume of poetry, “The Carpentered Hen and Other Tame Creatures,” a novel, “The Poorhouse Fair” and a collection of stories, “The Same Door” — and placed them with Alfred A. Knopf, which remained his publisher throughout his career. From 1954 to 1959, he also published more than a hundred essays, articles, poems and short stories in The New Yorker.
The move to a small town also seemed to stimulate his memories of Shillington and his creation of its fictional counterpart, Olinger. All his early stories were set there or in a neighboring city modeled on Reading, as were his first four novels, “The Poorhouse Fair,” “The Centaur,” “Of the Farm” and “Rabbit, Run.” “The Poorhouse Fair” (1959), avoiding the usual coming-of-age tale of most beginners, established Mr. Updike’s reputation as an important novelist. Based on an old people’s home near Shillington, the novel explores the homogenization of society among members of the author’s grandfather’s generation.
“The Centaur” (1963), more autobiographical, welds the Greek myth of Chiron, the wounded centaur who gives up his immortality for the release of Prometheus, to the story of a mocked Olinger high-school science teacher who sacrifices himself for his son. It won the 1964 National Book Award for fiction.
“Of the Farm” (1965), set not far from Olinger, focuses on the mother of a farm family who fears she will die before her son, gone into advertising in New York, will fulfill her dream of his becoming a poet.
With “Couples” (1968), his fifth novel, Mr. Updike moved his setting away from Pennsylvania to the fictional Tarbox, Mass. There he explores sexual coupling and uncoupling in a community of young married couples who, as Wilfrid Sheed wrote in The New York Times Book Review, “wanted to get away from the staleness of Old America and the vulgarity of the new; who wanted to live beautifully in beautiful surroundings; to raise intelligent children in renovated houses in absolutely authentic rural centers.” “Couples,” which became a best seller, was for its time remarkably frank about sex and became well known for its lengthy detail and often lyrical descriptions of sexual acts.
With the Rabbit quartet, Mr. Updike cast his keen eye on a still wider world. Where “Rabbit, Run” plays out its present-tense narrative in domestic squalor, its three sequels, published in 10-year intervals, encompass the later 20th century American experience: “Rabbit Redux” (1971) the cultural turmoil of the 1960s; “Rabbit Is Rich” (1981) the boom years of the 1970s, the oil crisis and inflation; and “Rabbit at Rest” (1991), set in the time of what Rabbit calls “Reagan’s reign,” with its trade war with Japan, its AIDS epidemic and the terror bombing of Pan Am 103 over Lockerbie, Scotland.
Rabbit lies dying in a hospital at the end of the last volume, overweight, worn-out, felled by a coronary infarction during a one-on-one basketball game. With his life over, many critics judged that Rabbit had entered the pantheon of signal American literary figures, joining Huck Finn, Jay Gatsby, Holden Caulfield and the like.
“Rabbit Redux” was considered the weakest of the set, but “Rabbit Is Rich” and “Rabbit at Rest” both won Pulitzer Prizes and other awards. Reissued as a set in 1995, “Rabbit Angstrom: A Tetralogy” was pronounced by some to be a contender for the crown of great American novel.
As a small-town businessman of limited scope, Rabbit is obviously very different from his creator. Yet the two of them share a middle-American view of the world, with the difference that Mr. Updike was exquisitely self-conscious. Against the grain of his calling and temperament, he strove, like the German writer Thomas Mann, for a burgherly life.
He took up golf, which he played with passionate enthusiasm and also a writer’s eye, noting the grace notes in others’ swings and tiny variations in the landscape. He was a tall, handsome man with a prominent nose and a head of hair that Tom Wolfe once compared to “monkish thatch.” It eventually turned white, as did his bushy eyebrows, giving him a senatorial appearance. And though as a youth he suffered from both a stutter and psoriasis, he became a person of immense charm, unfailingly polite and gracious in public.
As a citizen of Ipswich, he participated in local affairs, serving on the Congregational Church building committee and the Democratic town committee and writing a pageant for the town’s 17th-Century Day. For a while he worked downtown, in an office above a restaurant. Although politically liberal, he was virtually alone among American writers to declare himself in support of the Vietnam War.
In 1974 he separated from Mary and moved to Boston, where he taught briefly at Boston University. In 1976 the Updikes were divorced, and the following year he married Martha Ruggles Bernhard, settling with her and her three children first in Georgetown, Mass., and then in 1984 in Beverly Farms, both towns in the same corner of the state as Ipswich.
In addition to his wife, Martha, he is survived by his sons David, of Cambridge, Mass., and Michael, of Newburyport, Mass.; his daughters Miranda, of Ipswich, and Elizabeth, of Maynard, Mass.; three stepsons, John Bernhard, of Lexington, Mass., Jason Bernhard, of Brooklyn, and Frederic Bernhard, of New Canaan, Conn.; seven grandchildren, and seven step-grandchildren.
A Book a Year
With the storehouse of his youthful experience emptying and his material circumstances enriched — the bestselling “Couples” put its author’s face on the cover of Time magazine — he nevertheless determined to keep publishing a book a year.
“Writing’s gotten to be a habit,” he told Michiko Kakutani in an interview with The Times in 1982, a year after “Rabbit Is Rich” was published. “Sometimes the books do seem kind of silly and very papery, but there are moments when a sentence or a series of sentences clicks.”
Among the dozen or more novels he brought out in the next quarter century, some clicked, like “The Witches of Eastwick” (1984), celebrated by some as an exuberant sexual comedy and a satirical view of women’s liberation. It was made into a film starring Jack Nicholson, Cher, Susan Sarandon and Michelle Pfeiffer.
He returned to the witches in another novel, “The Widows of Eastwick,” published in October, portraying them as widows revisiting the town. No longer preying on men as they once did, they are now “ordinary women,” Ms. Kakutani wrote in her review, “haunted by the sins of their youth, frightened of the looming prospect of the grave and trying their best to get by, day by day by day.”
Other later Updike novels seemed schematic, like the author’s three takes on Hawthorne’s “Scarlet Letter”: “Roger’s Version” (1986), “S” (1988) and “A Month of Sundays” (1975). “Memories of the Ford Administration” (1992), linking personal guilt to history; “Seek My Face” (2002), an improvisation on the life of Jackson Pollock; and “Villages” (2004), about small-town adultery, also found lukewarm receptions.
Some readers complained about his portrayal of women. In an interview with The Times in 1988, Mr. Updike acknowledged the criticism that “my women are never on the move, that they’re always stuck where the men have put them.” His “only defense,” he said, “would be that it’s in the domesticity, the family, the sexual relations, that women interest me. I don’t write about too many male businessmen, and I’m not apt to write about too many female businessmen.”
Yet in trying to address this criticism by creating what he called “active and dynamic” women in “The Witches of Eastwick” and “S,” he may have made things worse. Some reviewers detected behind the author’s apparent respect for these female dynamos more ambivalence than anything else.
Meanwhile, the essays, book reviews, art criticism, reminiscences, introductions, forewords, prefaces, speeches, travel notes, film commentary, prose sketches, ruminations and other occasional jottings poured forth inexhaustibly, as if the experiences of his five senses only became real once recorded on paper.
The novelist Martin Amis sketched Mr. Updike plausibly in a 1991 review of a collection for The Times Book Review: “Preparing his cup of Sanka over the singing kettle, he wears his usual expression: that of a man beset by an embarrassment of delicious drolleries. The telephone starts ringing. A science magazine wants something pithy on the philosophy of subatomic thermodynamics; a fashion magazine wants 10,000 words on his favorite color. No problem — but can they hang on? Mr. Updike has to go upstairs again and blurt out a novel.”
Nonfiction Works
Over the decades, the assorted nonfiction filled six thick volumes, “Assorted Prose” (1965), “Picked-Up Pieces” (1975), “Hugging the Shore” (1983), “Odd Jobs” (1991), “More Matter” (1999) and “Due Considerations” (2007). The impression they left most indelibly was their author’s vast range in time, space and discipline as a reader, and his deep capacity to understand, appreciate, discriminate, explain and guide. As he once said: “I think it good for an author, baffled by obtuse reviews of himself, to discover what a recalcitrant art reviewing is, how hard it is to keep the plot straight, let alone to sort out one’s honest responses.”
And whatever his flaws as a novelist, his mastery of the short-story form at least for a time continued to grow. Reviewing Mr. Updike’s sixth collection of stories, “Museums and Women and Other Stories” (1972), Anatole Broyard wrote in The Times, “His former preciousness has toughened into precision.” He concluded, “His language, which was once like a cat licking its fur, now stays closer to its subject, has become a means instead of an end in itself.”
Not incidentally, it was in a story collection — his fifth, “Bech: A Book” (1970) — that Mr. Updike created a counter-self living a counter-life in the character Henry Bech. Bech is an unmarried, urban, blocked Jewish writer immersed in the swim of literary celebrity — “a vain, limp leech on the leg of literature as it waded through swampy times,” as Bech himself put it in the third volume devoted to him, “Bech at Bay: A Quasi-Novel” (1998), which followed “Bech Is Back” (1982).
As Mr. Updike’s opposite, Henry Bech not only entertained his readers in a voice very different from his creator’s — world-weary, full of schmerz and a touch of schmalz — he also undertook certain tasks that Mr. Updike avoided, like attending literary dinners, tsk-tsking over a younger generation’s minimalist prose and maximal tendency to write memoirs, working off grudges, murdering critics and interviewing John Updike for The New York Times Book Review.
Bech even wins the Nobel Prize for Literature, something that Mr. Updike never did, to the consternation of many Western writers and critics.
By contrasting so sharply with his creator, Henry Bech also defined Mr. Updike more distinctly, particularly his determination to stick to the essentials of his craft. As Mr. Updike told The Paris Review about his decision to shun the New York spotlight:
“Hemingway described literary New York as a bottle full of tapeworms trying to feed on each other. When I write, I aim in my mind not toward New York but toward a vague spot a little to the east of Kansas. I think of the books on library shelves, without their jackets, years old, and a countryish teenaged boy finding them, have them speak to him. The reviews, the stacks in Brentano’s, are just hurdles to get over, to place the books on that shelf.”
Monday, January 26, 2009
Breakingviews.com How to Improve the Bank Rescue
January 26, 2009
Breakingviews.com How to Improve the Bank Rescue
The "bad bank" schemes being considered by President Obama's administration have a central flaw: they involve government-backed entities buying banks' dodgy assets, which in turn requires the immediate valuation of assets that trade at distressed prices, if at all. That increases the likelihood of error, risks rewarding obfuscation, and could leave taxpayers in a hole. There are better ways to structure bad banks.
To work properly, the incentives of all parties should be aligned as closely as possible. Bank rescues must distinguish between banks that are troubled but can be saved and those that should be allowed to die. As little as possible of the industry should be taken into public ownership. And taxpayers must be properly protected, so that the bad bank process does minimal damage to their economic interests.
There is a way to meet these objectives: allow banks to sell any assets they want, and have the government's bad bank acquire them on a consignment basis with no initial cash outlay. Banks would achieve a return on their consigned assets only as the bad bank sold them or allowed them to mature. This "consignment shop" structure removes the initial valuation challenge that bedeviled the original concept of the Treasury's Troubled Asset Relief Program.
One result of this approach, however, is that when banks remove assets from their balance sheets, it eats into capital. To replenish it, the government could hand the banks cash or, in a pinch, liquid Treasury bonds in exchange for preferred stock equal to the book value of the assets transferred, possibly with some warrants attached as well.
Meantime, the bad bank would act like the Resolution Trust Corporation, which gradually liquidated the assets consigned to it. Since it would have assets from many banks, it could combine them to help unscramble securitizations and maximize proceeds from sales. The bad bank could retain a modest commission, perhaps 5 percent, and return the net proceeds of asset sales to each bank.
The banks would then be required to use the proceeds to repurchase the government's preferred shares until its total investment had been repaid. After five years, any remaining preferred shares would convert to common shares.
By way of illustration, suppose the book value of a bank's assets is $100 billion. It consigns $60 billion of worrisome paper to the government's bad bank, leaving it with a $40 billion "good bank," which issues $60 billion of preferred stock to the government. Five years later, the government has sold all the bad assets, but managed to get only $25 billion for them. Meanwhile, though, the good bank has doubled in size.
So the good bank has $80 billion in book value, but the government still owns $35 billion of preferred stock. That then converts into common shares, and the good bank survives in public ownership with a government stake of 44 percent.
If, however, the good bank ends up worth less than the outstanding preferred stock, the government would take it over and begin an orderly liquidation, just as the Federal Deposit Insurance Corporation already does with failed banks. The worst banks would be eliminated from the market and survivors would have room to expand.
Under the consignment shop structure, banks would consign only assets with doubtful values. And banks that had not marked assets down enough would have to issue more preferred shares to the government, endangering their long-term survival or at least leaving them with higher levels of government ownership in the future.
Meanwhile, banks with assets that are not badly impaired could redeem the government preferred shares within five years, avoiding any government shareholding thereafter. And taxpayers would risk losses on bad assets only if a "good bank" ran out of capital completely, minimizing the potential cost and the risk of over-paying for assets.
Banks' share prices would, of course, remain uncertain while preferred shares were outstanding. But their standing as debtors would be much clearer, enabling them to raise private sector finance. This kind of structure, avoiding many of TARP's flaws, makes for a less bad "bad bank."
MARTIN HUTCHINSON
http://www.nytimes.com/2009/01/26/business/26views.html?sq=How%20to%20Improve%20the%20Bank%20Rescue%20Hutchison&st=cse&scp=1&pagewanted=print
http://snipurl.com/by3ki
Breakingviews.com How to Improve the Bank Rescue
The "bad bank" schemes being considered by President Obama's administration have a central flaw: they involve government-backed entities buying banks' dodgy assets, which in turn requires the immediate valuation of assets that trade at distressed prices, if at all. That increases the likelihood of error, risks rewarding obfuscation, and could leave taxpayers in a hole. There are better ways to structure bad banks.
To work properly, the incentives of all parties should be aligned as closely as possible. Bank rescues must distinguish between banks that are troubled but can be saved and those that should be allowed to die. As little as possible of the industry should be taken into public ownership. And taxpayers must be properly protected, so that the bad bank process does minimal damage to their economic interests.
There is a way to meet these objectives: allow banks to sell any assets they want, and have the government's bad bank acquire them on a consignment basis with no initial cash outlay. Banks would achieve a return on their consigned assets only as the bad bank sold them or allowed them to mature. This "consignment shop" structure removes the initial valuation challenge that bedeviled the original concept of the Treasury's Troubled Asset Relief Program.
One result of this approach, however, is that when banks remove assets from their balance sheets, it eats into capital. To replenish it, the government could hand the banks cash or, in a pinch, liquid Treasury bonds in exchange for preferred stock equal to the book value of the assets transferred, possibly with some warrants attached as well.
Meantime, the bad bank would act like the Resolution Trust Corporation, which gradually liquidated the assets consigned to it. Since it would have assets from many banks, it could combine them to help unscramble securitizations and maximize proceeds from sales. The bad bank could retain a modest commission, perhaps 5 percent, and return the net proceeds of asset sales to each bank.
The banks would then be required to use the proceeds to repurchase the government's preferred shares until its total investment had been repaid. After five years, any remaining preferred shares would convert to common shares.
By way of illustration, suppose the book value of a bank's assets is $100 billion. It consigns $60 billion of worrisome paper to the government's bad bank, leaving it with a $40 billion "good bank," which issues $60 billion of preferred stock to the government. Five years later, the government has sold all the bad assets, but managed to get only $25 billion for them. Meanwhile, though, the good bank has doubled in size.
So the good bank has $80 billion in book value, but the government still owns $35 billion of preferred stock. That then converts into common shares, and the good bank survives in public ownership with a government stake of 44 percent.
If, however, the good bank ends up worth less than the outstanding preferred stock, the government would take it over and begin an orderly liquidation, just as the Federal Deposit Insurance Corporation already does with failed banks. The worst banks would be eliminated from the market and survivors would have room to expand.
Under the consignment shop structure, banks would consign only assets with doubtful values. And banks that had not marked assets down enough would have to issue more preferred shares to the government, endangering their long-term survival or at least leaving them with higher levels of government ownership in the future.
Meanwhile, banks with assets that are not badly impaired could redeem the government preferred shares within five years, avoiding any government shareholding thereafter. And taxpayers would risk losses on bad assets only if a "good bank" ran out of capital completely, minimizing the potential cost and the risk of over-paying for assets.
Banks' share prices would, of course, remain uncertain while preferred shares were outstanding. But their standing as debtors would be much clearer, enabling them to raise private sector finance. This kind of structure, avoiding many of TARP's flaws, makes for a less bad "bad bank."
MARTIN HUTCHINSON
http://www.nytimes.com/2009/01/26/business/26views.html?sq=How%20to%20Improve%20the%20Bank%20Rescue%20Hutchison&st=cse&scp=1&pagewanted=print
http://snipurl.com/by3ki
Bad Faith Economics By PAUL KRUGMAN
January 26, 2009
Op-Ed Columnist
Bad Faith Economics By PAUL KRUGMAN
As the debate over President Obama's economic stimulus plan gets under way, one thing is certain: many of the plan's opponents aren't arguing in good faith. Conservatives really, really don't want to see a second New Deal, and they certainly don't want to see government activism vindicated. So they are reaching for any stick they can find with which to beat proposals for increased government spending.
Some of these arguments are obvious cheap shots. John Boehner, the House minority leader, has already made headlines with one such shot: looking at an $825 billion plan to rebuild infrastructure, sustain essential services and more, he derided a minor provision that would expand Medicaid family-planning services — and called it a plan to "spend hundreds of millions of dollars on contraceptives."
But the obvious cheap shots don't pose as much danger to the Obama administration's efforts to get a plan through as arguments and assertions that are equally fraudulent but can seem superficially plausible to those who don't know their way around economic concepts and numbers. So as a public service, let me try to debunk some of the major antistimulus arguments that have already surfaced. Any time you hear someone reciting one of these arguments, write him or her off as a dishonest flack.
First, there's the bogus talking point that the Obama plan will cost $275,000 per job created. Why is it bogus? Because it involves taking the cost of a plan that will extend over several years, creating millions of jobs each year, and dividing it by the jobs created in just one of those years.
It's as if an opponent of the school lunch program were to take an estimate of the cost of that program over the next five years, then divide it by the number of lunches provided in just one of those years, and assert that the program was hugely wasteful, because it cost $13 per lunch. (The actual cost of a free school lunch, by the way, is $2.57.)
The true cost per job of the Obama plan will probably be closer to $100,000 than $275,000 — and the net cost will be as little as $60,000 once you take into account the fact that a stronger economy means higher tax receipts.
Next, write off anyone who asserts that it's always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.
Here's how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets — and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens.
The point is that nobody really believes that a dollar of tax cuts is always better than a dollar of public spending. Meanwhile, it's clear that when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts — and therefore costs less per job created (see the previous fraudulent argument) — because a large fraction of any tax cut will simply be saved.
This suggests that public spending rather than tax cuts should be the core of any stimulus plan. But rather than accept that implication, conservatives take refuge in a nonsensical argument against public spending in general.
Finally, ignore anyone who tries to make something of the fact that the new administration's chief economic adviser has in the past favored monetary policy over fiscal policy as a response to recessions.
It's true that the normal response to recessions is interest-rate cuts from the Fed, not government spending. And that might be the best option right now, if it were available. But it isn't, because we're in a situation not seen since the 1930s: the interest rates the Fed controls are already effectively at zero.
That's why we're talking about large-scale fiscal stimulus: it's what's left in the policy arsenal now that the Fed has shot its bolt. Anyone who cites old arguments against fiscal stimulus without mentioning that either doesn't know much about the subject — and therefore has no business weighing in on the debate — or is being deliberately obtuse.
These are only some of the fundamentally fraudulent antistimulus arguments out there. Basically, conservatives are throwing any objection they can think of against the Obama plan, hoping that something will stick.
But here's the thing: Most Americans aren't listening. The most encouraging thing I've heard lately is Mr. Obama's reported response to Republican objections to a spending-oriented economic plan: "I won." Indeed he did — and he should disregard the huffing and puffing of those who lost.
http://www.nytimes.com/2009/01/26/opinion/26krugman.html?sq=Krugman%20Bad%20Faith%20economics&st=cse&scp=1&pagewanted=print
http://snipurl.com/by32g
Op-Ed Columnist
Bad Faith Economics By PAUL KRUGMAN
As the debate over President Obama's economic stimulus plan gets under way, one thing is certain: many of the plan's opponents aren't arguing in good faith. Conservatives really, really don't want to see a second New Deal, and they certainly don't want to see government activism vindicated. So they are reaching for any stick they can find with which to beat proposals for increased government spending.
Some of these arguments are obvious cheap shots. John Boehner, the House minority leader, has already made headlines with one such shot: looking at an $825 billion plan to rebuild infrastructure, sustain essential services and more, he derided a minor provision that would expand Medicaid family-planning services — and called it a plan to "spend hundreds of millions of dollars on contraceptives."
But the obvious cheap shots don't pose as much danger to the Obama administration's efforts to get a plan through as arguments and assertions that are equally fraudulent but can seem superficially plausible to those who don't know their way around economic concepts and numbers. So as a public service, let me try to debunk some of the major antistimulus arguments that have already surfaced. Any time you hear someone reciting one of these arguments, write him or her off as a dishonest flack.
First, there's the bogus talking point that the Obama plan will cost $275,000 per job created. Why is it bogus? Because it involves taking the cost of a plan that will extend over several years, creating millions of jobs each year, and dividing it by the jobs created in just one of those years.
It's as if an opponent of the school lunch program were to take an estimate of the cost of that program over the next five years, then divide it by the number of lunches provided in just one of those years, and assert that the program was hugely wasteful, because it cost $13 per lunch. (The actual cost of a free school lunch, by the way, is $2.57.)
The true cost per job of the Obama plan will probably be closer to $100,000 than $275,000 — and the net cost will be as little as $60,000 once you take into account the fact that a stronger economy means higher tax receipts.
Next, write off anyone who asserts that it's always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.
Here's how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets — and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens.
The point is that nobody really believes that a dollar of tax cuts is always better than a dollar of public spending. Meanwhile, it's clear that when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts — and therefore costs less per job created (see the previous fraudulent argument) — because a large fraction of any tax cut will simply be saved.
This suggests that public spending rather than tax cuts should be the core of any stimulus plan. But rather than accept that implication, conservatives take refuge in a nonsensical argument against public spending in general.
Finally, ignore anyone who tries to make something of the fact that the new administration's chief economic adviser has in the past favored monetary policy over fiscal policy as a response to recessions.
It's true that the normal response to recessions is interest-rate cuts from the Fed, not government spending. And that might be the best option right now, if it were available. But it isn't, because we're in a situation not seen since the 1930s: the interest rates the Fed controls are already effectively at zero.
That's why we're talking about large-scale fiscal stimulus: it's what's left in the policy arsenal now that the Fed has shot its bolt. Anyone who cites old arguments against fiscal stimulus without mentioning that either doesn't know much about the subject — and therefore has no business weighing in on the debate — or is being deliberately obtuse.
These are only some of the fundamentally fraudulent antistimulus arguments out there. Basically, conservatives are throwing any objection they can think of against the Obama plan, hoping that something will stick.
But here's the thing: Most Americans aren't listening. The most encouraging thing I've heard lately is Mr. Obama's reported response to Republican objections to a spending-oriented economic plan: "I won." Indeed he did — and he should disregard the huffing and puffing of those who lost.
http://www.nytimes.com/2009/01/26/opinion/26krugman.html?sq=Krugman%20Bad%20Faith%20economics&st=cse&scp=1&pagewanted=print
http://snipurl.com/by32g
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