Thursday, May 06, 2010

Market Drop Fueled by a Crisis, Anxiety and an Error By FLOYD NORRIS

May 6, 2010
Market Drop Fueled by a Crisis, Anxiety and an Error By FLOYD NORRIS

Combine one part nervous traders, one part Greek crisis and one part trader error. Stir in one part central bank complacency. Bring to boil. Panic.

That combination produced one of the wildest days ever in financial markets, with the Dow Jones industrial average, at one point, down almost 1,000 points while the euro sank to its lowest level in more than a year. There were substantial declines in emerging markets, whose economies had seemed to be booming, and in developed markets fearful of renewed recessions.

Even though a substantial part of the worst plunge appeared to be linked to a trader error — one $40 stock fell for a time to one penny — prices had fallen around the world even before such mistakes began to happen.

It appears that investors are again growing more hesitant to own assets like stocks and bonds, particularly since many now cost far more than they did only a few months ago. Another sharp retrenchment by investors, consumers and businesses could threaten the current global recovery by choking off financing and new orders for companies.

For much of the last 14 months, the prices of risky assets around the world have been rising rapidly. That recovery, from lows reached in March 2009 amid talk of a new Great Depression, both reflected and encouraged a revival in economic activity. Manufacturers in most countries this week reported rapidly growing order books.

The most recent recession was made in the United States, and to a large extent it was unmade here as well. If it was the subprime mortgage market and other credit excesses that sent markets reeling, it was also a willingness of the American government, including the Federal Reserve Board, to plow in money when fears were at their highest that helped to bring those markets and economic activity back.

For the last several months, worries have been alternately rising and receding that the next crisis would be made in Europe, where Greece has faced the possibility of default. Europe and the International Monetary Fund have announced plans for a bailout, but there have also been riots in Greece amid anger over the steep budget cuts being forced on the country.

On Thursday, Jean-Claude Trichet, the president of the European Central Bank, said at a news conference that the bank’s governing council had not even discussed the possibility of buying government bonds. That was taken as a disappointment by some traders, who had hoped the central bank would follow the Fed’s lead in spreading liquidity around if conditions grew worse.

Instead, fears are growing that Europe, which is worried that the crisis in Greece could be followed ones in Portugal and Spain, will follow the pattern laid down by the United States government in 2007, when officials offered frequent reassurances that the subprime mortgage problem was “contained” but delayed taking the bold action that finally did stop the panic.

The height of panic on Thursday was reached shortly after lunchtime in the United States. First some currencies began to fall rapidly, with the euro suffering especially against the Japanese yen.

That could have been an indication that some large traders were unwinding positions. It has been popular to borrow yen at low interest rates and then use the money to speculate in higher yielding assets denominated in other currencies. Anyone unwinding such a trade would buy yen to repay the loan.

Then, within a few minutes, the United States stock market appeared to be collapsing. Some of the decline was real, but another part of it was simply trading gone awry.

Temporary plunges in the price of Procter & Gamble and 3M, the former Minnesota Mining, cost the Dow about 300 points, and appeared to be the result of errors, not intentional sell orders. Similarly, Accenture, a large consulting firm, fell from more than $40 a share to one penny.

By the close of the day, the Dow was down 347.80 points, or 3.2 percent, to 10,520.32.

There were also substantial declines in most major European and Asian indexes. In Greece, however, the stock market put on a small rebound after falling to a 13-month low on Wednesday.

Europe faces many obstacles in trying to deal with the growing crisis there. The European Central Bank, which handles monetary policy for the 16 countries in the euro zone, has fewer powers than the Fed does, and there is no Europe-wide government with powers to act quickly. Even now, after months of talking, the Greek bailout has not been approved by all whose approval is needed. The German parliament is expected to approve it on Friday.

Moreover, the American crisis developed before budget deficits spiraled upward. Coming up with cash now would be harder, a fact Mr. Trichet pointed to when he called on European governments to cut their budget deficits.

Spending large amounts of cash to bail out European governments is unlikely to be popular with voters in countries that are not in trouble, but a failure to do so could threaten many financial institutions around the continent.

A traditional way to reduce debt is to devalue currencies, which leaves the outstanding debt worth less. Countries in the euro zone cannot do that, which is one reason Greece is in such difficulty.

But some investors seem to expect that eventually worldwide inflation will form a significant part of the solution, enabling governments and other debtors to pay back loans with currencies worth less than when the loans were made. In the last three days, while the Standard & Poor’s 500-stock index has lost 6 percent of its value, the price of 30-year inflation-indexed Treasury security has risen by almost 4 percent.

There is no way to know whether this week’s jitters will be put aside as more good economic news is released, or whether Europe’s woes will create a repeat of the growing panic that engulfed American markets not that long ago.

In the second case, this could be another one of those times when markets move from one extreme to the other. In the fall of 2008, the collapse of Lehman Brothers sent investors fleeing. The following spring, hopes that the bailouts and stimulus plans were working helped to begin a strong bull market in nearly every asset category.

If this is another turning point, some of the winners will be those who, by luck or vision, managed to sell securities while the selling was easy. On Tuesday, Beazer Homes, a builder that was almost given up for dead in 2009 — when its shares traded for less than 25 cents — managed to raise $350 million selling new shares and new bonds. The money will go to refinance debt that otherwise could have forced the company into bankruptcy.

By the close on Thursday, investors who bought shares at that offering, paying $5.81, had lost almost 10 percent of their money as the stock closed at $5.25.

All this is taking place as the Senate debates financial reform amid considerable public hostility to banks. That no doubt will lead some on Wall Street to say that the markets are warning against making regulation too harsh, but the wild gyrations also serve as a reminder that the efficient markets hypothesis is not a very good model of what actually happens.

Markets turn out to be very bad at assessing values under some circumstances. They were far too optimistic is 2006, and ridiculously pessimistic in early 2009.

That is not a reason to get rid of markets, if only because any alternative, like letting judges and government officials set values, would likely be worse. But it does serve as a counterpoint to the infatuation with markets that led to the creation of a virtually unregulated shadow financial system. Those who believe in regulation will point to that, and say that if this wild ride continues, it will provide further evidence that markets need adult supervision.

Saturday, May 01, 2010

Sondheim Sensibility: Harsh Truth About Life By STEPHEN HOLDEN

April 30, 2010
Sondheim Sensibility: Harsh Truth About Life By STEPHEN HOLDEN

A wonderful, little-known song that leaps out of the biographical revue “Sondheim on Sondheim” is a taunting show tune, “Now You Know,” from the 1981 musical “Merrily We Roll Along.” One of that revue’s six numbers from “Merrily,” it encapsulates Stephen Sondheim’s skeptical worldview as tartly as anything the composer has written.

“I mean, big surprise: people love you and tell you lies/Bricks can fall out of clear blue skies,” Leslie Kritzer sings with chipper, smart-aleck zest. Her character from “Merrily,” Mary Flynn, is a tough cookie and best friend of the embattled songwriting team at the show’s center.

“It’s called flowers wilt/It’s called apples rot,/It’s called thieves get rich and saints get shot,” she continues.

Even God, who is seldom glimpsed in the Sondheim universe, makes a fleeting appearance, only to be dismissed as a disappointment who “doesn’t answer prayers a lot.”

That song’s solution to despair is to grit your teeth and soldier on: “It’s called count to 10/It’s called burn your bridges, start again.” The only palliative to the bitterness of experience is a therapeutic imperative: “Now you grow.”

“Now You Know” is a high point of “Sondheim on Sondheim,” the biographical anthology of his songs, conceived and directed by James Lapine for the Roundabout Theater Company at Studio 54. The show, which also stars Barbara Cook, Vanessa Williams, Tom Wopat, Norm Lewis, Euan Morton, Erin Mackey and Matthew Scott, blends performances of Sondheim songs, famous and obscure, with interview footage in which the composer, who recently turned 80, discusses his life and creative process.

Mr. Sondheim may be the last great songwriter, in a lineage that runs from Jerome Kern through the Gershwins to Leonard Bernstein, who pushed the Broadway musical from a brash, vaudevillian entertainment into a loftier realm. But of all of them, Mr. Sondheim went the furthest in deconstructing and reinventing a populist art form as a highbrow version of itself.

Mr. Sondheim’s music examines the entire pre-1960s tradition, from Gilbert and Sullivan and Viennese operetta, through the Gershwins’ satires, Cole Porter’s burlesque musicals and beyond. The pastiche songs of “Follies,” particularly, recycle the styles of classic show tunes, matching or outdoing their antecedents in quality while subverting their escapism. His competitive relationship with the past, a kind of serial patricide, culminated with the “murder” of his mentor, Oscar Hammerstein II.

In this revue’s videotaped interviews, Mr. Sondheim goes out of his way to praise Hammerstein for teaching him the craft of writing lyrics. But if you compare the two, the inescapable fact emerges that Mr. Sondheim’s lyrics programmatically repudiate his mentor’s optimistic, inspirational ideology.

Hammerstein’s lyrics are synonymous with America’s post-World War II “Father Knows Best” ethos of moral rectitude, in which confident breadwinners and their perfect little wives are busy multiplying and building a safe new world of peace and freedom. The basic building block of this sanctuary of hope and optimism is a happily married couple who fall in love at first sight and march blissfully, hand-in-hand, into the sunset.

The climactic song in Mr. Sondheim’s “Company,” “Being Alive,” magnificently sung by Mr. Lewis in this revue, replaces the anticipation of happily ever after voiced in the Rodgers and Hammerstein ballad “Some Enchanted Evening” with fear and trembling. Instead of a cozy, familial bond, intimacy with another person is portrayed as a terrifying prospect that involves:

Someone to need you too much,

Someone to know you too well,

Someone to pull you up short

And put you through hell.

For all his songs’ universality, the Sondheim philosophy is specific and exclusive. Directed toward his own class — an urbane, well-educated, culturally cosmopolitan gentry — his lyrics define what might be called the Manhattan sensibility: humanist, proudly intellectual, psychologically sophisticated, hyper-articulate, liberal, Jewish and disenchanted. The closest Mr. Sondheim has come to being multicultural was in the 1976 musical “Pacific Overtures.” Set in 19th-century Japan, the musical has songs that propose an intriguing East-West hybrid, part Broadway and part Asian.

The Sondheim cynicism didn’t come out of the blue. Expressions of wised-up disillusion, like “Now You Know,” have Broadway ancestors in the lyrics of E. Y. Harburg, Ira Gershwin and even George M. Cohan. But it was Mr. Sondheim’s 1970 show, “Company,” that codified the Manhattan sensibility — a radically unsentimental, emotionally realistic honesty that found its pop-record equivalents in Paul Simon in New York, and in Joni Mitchell and Randy Newman on the West Coast.

The origins of that attitude included confessional poetry and the rise of psychoanalysis as a kind of alternative religion, both of which provided Mr. Sondheim with the self-scrutinizing language to put in the mouths of his introspective characters. Simultaneously, the moon-June-spoon ideal of eternal romantic love began its steady decline as the principal subject of popular songs.

Advancing technology also played a major role in the transition from optimism to ambivalence. The birth-control pill, which helped propel the second wave of feminism, and rock ’n’ roll’s hedonistic ethic and amplification both undermined Hammerstein’s patriarchal sentimentality and toughened the sound of pop. At the same time, the mystique of psychoanalysis superseded the more simplistic self-help doctrine of “The Power of Positive Thinking” as the culture’s spiritual panacea. If you could reach deep enough into your repressed memories, it was argued, you could exorcize your demons.

In his relentless demolition operation, Mr. Sondheim ultimately embraced the Manhattan sensibility’s demonic extreme — murderous, misanthropic rage — with “Sweeney Todd” (1979). But where do you go once you’ve had your anti-hero proclaim, “We all deserve to die!”

After “Merrily,” a summing up of his generation’s growing pains, told in reverse, Mr. Sondheim’s search for meaning and connection to the future began in earnest with “Sunday in the Park With George” (1984) and continued with “Into the Woods” (1987). Both exalted the creation of “children and art” as a refutation of the nihilism of “Sweeney Todd” and as a self-conscious, morally high-minded investment in humanity.

Grudgingly and on his own terms Mr. Sondheim even affirmed Hammerstein’s belief in true love with “Passion” (1994). But as usual with him, there was a catch: the love being conjured might also be described as pathologically obsessed.

The one human connection Mr. Sondheim has always celebrated unambiguously and without strain is friendship. Its most eloquent expression is found in another song from “Merrily,” “Old Friends”:

Time goes by

Everything else keeps changing

You and I

We get continued next week.

The relaxed, swinging tune that evokes a cocktail singalong has the same bittersweet ache as the lyrics that culminate with a toast: “Here’s to us! Who’s like us? Damn few!” This is intimacy without fear.

In most cases, however, the relationship of music and lyrics in Mr. Sondheim’s songs expresses a core ambivalence. As his words explore the complicated, often harsh truths about life and relationships, his swelling ballads convey an unalloyed romantic yearning in the harmonic language of Puccini.

With the Freudian mystique of the 1960s and ’70s on the wane, and the language of psychotherapy reduced to the banal pop scripture of reality television, the Age of Sondheim may be fading. An emerging technological view of humanity and its discontents that largely bypasses the post-Freudian model proposes an unsettling new ideal of the human being as a perfectible machine that through cloning is theoretically immortal.

Antidepressants and performance-enhancing drugs, from steroids to mental stimulants to Viagra, are modifying human behavior. Replaceable body parts, plastic surgery and gender re-assignment are undermining the traditional idea of the individual as a being with a singular identity and destiny. Hand-held devices have turned us into robotic mobile power stations continually transmitting and receiving information in computer language that has seeped into pop songs.

These developments are profoundly antithetical to the dream of sadly civilized enlightenment evoked by Mr. Sondheim’s songs. In this emerging world, the truth of existence is rooted more in quantifiable physical reality than in ideas and emotions. Musically it is embodied in hard digital beats and in performances staged as competitive sports events.

As we lunge into the 21st century, there is no next Stephen Sondheim waiting to step into the master’s shoes and perpetuate the tradition that he carried to its pinnacle. There is only new and different in a largely unimaginable future in which we are simultaneously more and less human than in the pre-digital age. Like it or not, and however we do it, now we grow.

“Sondheim on Sondheim” continues through June 13 at Studio 54, 254 West 54th Street, Manhattan; (212) 719-1300, roundabouttheater.org/index.html

This article has been revised to reflect the following correction:

Correction: May 4, 2010

A music column on Saturday about Stephen Sondheim and the “Sondheim on Sondheim” revue, at Studio 54, misstated part of a lyric from the song “Old Friends.” It is “You and I/We get continued next week,” not “You and I/We can continue next week.”

Tuesday, April 27, 2010

April 27, 2010 A Bank Tax as Insurance for Us All By DAVID LEONHARDT Washington The financial regulation bill before the Senate has the potential to

April 27, 2010
A Bank Tax as Insurance for Us All By DAVID LEONHARDT

Washington

The financial regulation bill before the Senate has the potential to do a lot of good. But it also has at least one major flaw: it would not do enough to prevent taxpayers from paying the bill for a future crisis.

What would? A tax on banks. The International Monetary Fund has started pushing for a bank tax, and a tax has also become part of the debate in Britain’s election campaign. In this country, however, the subject has taken a back seat to issues like derivatives regulation and the Goldman Sachs case. Those other issues are important, but they are not as central to minimizing the damage from the next crisis.

To understand why, let’s take a glimpse into the future. Imagine the year is 2020, and a major financial firm is collapsing.

The financial regulation bill that President Obama signed back in 2010 was meant to deal with just such a problem. It gave regulators something called “resolution authority.” They could seize a dying firm, wipe out its shareholders, fire its top executives and keep it operating until its surviving parts could be sold off in an orderly fashion. Now, in 2020, the regulators are preparing to use that authority for the first time.

But as they dig into the details, they realize they are facing a raft of problems. One of the biggest is that the firm has 70 percent of its assets abroad (roughly the share of Citicorp’s business that was overseas in 2009). Washington can’t simply seize assets held in London, Shanghai or Moscow.

So ultimately, the regulators are left with the same choice that arose in 2008: bankruptcy or bailout. Regulators can let the firm fall apart suddenly and risk the kind of collateral damage that the bankruptcy of Lehman Brothers caused. Or they can spend billions of taxpayer dollars propping up the firm, as was the case with A.I.G. It’s a miserable choice.

You also can be pretty sure which of the two options tomorrow’s policy makers will choose: bailout. History — in the form of the Great Depression and, more recently, Lehman — argues against the idea of liquidate, liquidate, liquidate, as Herbert Hoover’s Treasury secretary, Andrew Mellon, advocated. The downside, of course, is that taxpayers end up paying for Wall Street’s sins.

Obama administration officials insist that the reregulation plan will prevent this outcome. They note that both the Senate and House bills will give regulators more authority to monitor financial firms. Banks will also be required to hold more cash in reserve, which will give them a bigger cushion when some investments do go bad. The rules for resolution authority, meanwhile, will be written with international cooperation in mind.

And maybe time will prove the administration correct. But a good number of economists and banking experts are worried. They think the odds of a future bankruptcy-or-bailout dilemma will remain uncomfortably high even if reregulation passes.

For starters, there are the cross-border problems; in the midst of a crisis, governments may have trouble cooperating. Then there is the fact that the regulators have never before tried to shut down anything as complex as a multibillion-dollar financial firm. “It’s really hard — really hard,” says Robert Steel, who worked on the financial crisis in the Bush Treasury Department and later was chief executive of Wachovia. “Anyone who says they know exactly what we should do is overconfident.”

Another former top government official adds, bluntly, “Don’t kid yourself into thinking that if J. P. Morgan were on the rocks, it would disappear.”

Above all, no one knows what the next crisis will look like. So no one can be sure exactly how to prevent it. In all likelihood, Wall Street will eventually figure out ways around technocratic rules — and technocrats — and create trouble that today’s proposals don’t anticipate.

The beauty of a bank tax is that it acknowledges as much. Financial firms play a vital role in a market economy. But they also have a long record of causing crises, be it the South Sea bubble of 1720, the Panic of 1873, the Great Depression or our own Great Recession. A bank tax is akin to an insurance policy that taxpayers would require Wall Street to hold. The premiums on that policy would keep Wall Street from making big profits in good times while foisting its losses on society in bad.

The current Senate bill includes a kind of bank tax, but it has all kinds of problems. It would initially collect only $50 billion from firms and then set the money aside to pay the costs of future bailouts. Other crises have cost far more than $50 billion.

For this reason, the Obama administration prefers a postcrisis tax. The White House has proposed a so-called TARP tax, to raise at least $90 billion over the next decade and cover the costs of the 2008 bailout fund (the Troubled Asset Relief Program). But this idea has its own flaws. It does not leave any money for future busts. It assumes Washington will always be able to recoup those costs later, which doesn’t sound like a great bet.

The I.M.F. prefers a permanent tax, for the good reason that the risk of crises is permanent. “The challenge is to ensure that financial institutions bear the direct financial costs that any future failures or crises will impose — and maybe somewhat more, given all the other costs that bank failure can impose on the economy,” Carlo Cottarelli, the head of the I.M.F.’s fiscal affairs unit, wrote last weekend. The tax wouldn’t go into a dedicated bailout fund. Its purpose instead would be to discourage too much risk-taking and, over the long term, help offset any bailout costs.

Because the tax would be calculated based on a firm’s holdings, a small local bank or a larger bank with billions of dollars in safe consumer deposits might pay nothing. A leveraged investment bank would surely be taxed.

The TARP tax, in its technical design, would be similar. And Timothy Geithner, the Treasury secretary, told me recently that he was open to the idea of the tax’s becoming permanent. “There is a very good argument you should put a fee on finance, like a tax on pollution,” he said.

Yet the administration — nervous about upsetting the fragile support in Congress for financial reregulation — has been afraid of making the tax part of the broader bill. That strikes me as a mistake, given the tax’s importance. Obviously, though, if Congress passes a bank tax in a separate bill later this year, it will work out the same in the end.

There is some reason for optimism, too. Max Baucus, the chairman of the Senate Finance Committee, told Politico this week, “I don’t think there’s much doubt that there will be a bank tax.” Why? The tax is not just about punishing banks.

The federal government, remember, is facing a huge deficit. To pay it off, Washington will need to make spending cuts and raise taxes. Can you think of a better candidate for taxation than an industry that made huge profits during the boom and then helped cause the bust that has sent the deficit soaring?

Local Heroes, Far From Home By MICHAEL KIMMELMAN

April 27, 2010
Local Heroes, Far From Home By MICHAEL KIMMELMAN

Rome

I JOINED the crowds heading into an Edward Hopper show at the Fondazione Roma the other morning. Organized in collaboration with the Whitney Museum of American Art in New York (most of the works come from there), the exhibition has been a hit here. In a country with what often seems like the most refined taste in the world and no taste at all, it owes something to a cheesy full-scale reconstruction of the “Nighthawks” diner in the first gallery. Visitors snap pictures of themselves posing beside fedora-clad mannequins slumped stiffly over the counter. There’s another, better gimmick too, a room with pencils and stacks of white paper, where doodlers copy Hopper’s drawings. Reproductions are projected onto the stacks, so lines can be easily traced, and people labor over their tracings, then tote them around the show like diplomas. (By people, of course, I mean me.)

Which got me thinking: Just how global is art? I quizzed some Italians and also a few New Yorkers at the exhibition, and it wasn’t that the Italians didn’t “get” Hopper, or didn’t like him. He’s world famous by now, beloved, and the Italians easily brought up the links to film noir and Antonioni. But New Yorkers, naturally, spoke quite differently about him.

Hopper’s work, like all good art, remains local on some crucial level, and that’s no doubt just as true for those Italian, French and German old master paintings that fill museums from Tokyo to Tulsa and epitomize what we have come to think of as universal Western art. Italians from the small Umbrian village of Montefalco will tell you that they see in the Renaissance works of Benozzo Gozzoli, their hometown hero, a landscape and light that doesn’t make the same impact on people who didn’t grow up there. These visceral reactions are acquired through firsthand experience.

No matter how much culture has become globalized, art retains meanings specific to a certain time and place. Good art does, anyway (which accounts for why too much not-so-good contemporary art, aimed at the global marketplace, looks generic and everywhere alike). Those meanings come, as it were, bred in the bone. Hopper is an American exemplar.

Although he visited Paris early on, he always denied any lasting French influence. But clearly he picked up plenty of ideas from Manet, Degas and Daumier, European masters of modern alienation, then did far more than merely substitute the Williamsburg Bridge and the Sheridan Theater for the Pont Neuf and Longchamp. He recognized how all those bridges and high-rises reaching for heaven and all those wide-open spaces and country barns in spring-green fields were clichés of an America whose population numbered countless people leading interior, often profoundly solitary lives.

Hopper conveyed the psychological angle in silent places that he cast in a hard, melancholy light. But that light could also conjure up memories: the elevated tracks and anonymous apartment blocks, to New Yorkers who know them intimately, can invoke not just industrial sprawl or glum urbanism but also a singular beauty and dignity amplified by, and grounded in real, lived experience.

We talk about the art world these days as if everyone everywhere who appreciates art belongs to the same global tribe, united by jet travel, integrated markets and the Web. But there are many art worlds, countless ones, which often don’t talk to one another, don’t know or care about one another, and that are no less potent because they’re not, strictly speaking, universal. In Berlin, Heinrich Zille is a beloved artist, and streets, bars and restaurants are named after him. There’s a Zille museum. Books, plays and movies have been written about him. Another play just opened this spring around the corner from my home in Berlin.

But outside Berlin, even in the rest of Germany, he’s little known. He’s Berlin’s Hopper in that he grasped, in a similarly granular way, the city’s inner life a century ago. Rough and affectionate, never sentimental, typically Berlin-like, his work still tends to speak more directly to old-time natives than the works of many better-known global stars like Grosz or Kirchner. He invented nothing, unlike them. He wasn’t a modernist or even a great stylist. He trafficked in the same lower-class scenes of everyday life that contemporaneous artists in America like George Bellows and John Sloan painted. But he focused on places and qualities rooted in Berliners’ particular self-image: on life inside the city’s communal courtyards and in the rental barracks and the sweaty, smoky, beer-stained corner bars.

He called this, in his Berlin slang, his “miljöh,” his milieu. And it included the alleys and tent villages on empty lots and along windswept avenues that peter out, as does so much of the city even now, into nowhere.

Zille was a minor painter and illustrator, from a ruthless global perspective, but to dismiss him, or lump him along with Sloan or Bellows as just another urban scene painter from the turn of the last century, is to miss the soul of his art and also the way much culture, globalism notwithstanding, works today.

It happens that a Henry Moore retrospective has lately opened at Tate Britain in London, the first major Moore show in decades. After the war Moore was the ultimate global sculptor, his studio churning out one after another smooth, lumpy monument to fill government buildings, housing projects and office parks around the world. He was Britain’s de facto ambassador of art, its Picasso and Miró rolled into one, and his late works, anodyne abstractions, typify postwar faith in universal art representing universal values.

But after he died in 1986, it was as if everybody had had enough of him and what had become a factory line of production. His works were everywhere, but he dropped mostly off the radar of contemporary artists. The show rescues him from near-forgottenness by locating his true contribution in his British roots, as an artist who early on absorbed important lessons from Giacometti and the French Surrealists, then added a very British mix of elegance, sexual confusion and shambling abjectness to produce, before the war, objects in stone and wood that look far more memorable and unsettling than the soft-edged ones he produced afterward.

The show reminds us that his breakthrough to stardom, not incidentally, came during the Blitz, with the circulation of drawings of Londoners huddling in the Underground to escape the bombs. Masses of faceless people look like cocoons or mummies, glumly suffering, except that these drawings were promoted at the time as emblems of British fortitude. Beleaguered Britons, via Moore, became quiet heroes, modest martyrs, local versions of universal men.

We like the idea of universal art because most artists make work that they hope gains universal appeal and can speak to anybody who’s interested; because art’s formal values are supposed to transcend borders and ages; and because we can’t help fantasizing about the virtues of a global society. We imagine walking into any art museum, whether in Toronto or Timbuktu, and, up to a point at least, understanding the pictures and sculptures. But it’s often what we can’t understand that is most distinctive and enduring about the work.

Tourists make a beeline in foreign countries to art museums to say they’ve done the “Mona Lisa” and Botticelli’s lady on a half shell, but also because museums promise familiarity, or a simulacrum of it. They’re our 21st-century town squares and safe havens where strangers, who don’t necessarily speak the language or know the city or country they’re in, think that they occupy common ground with both locals and everyone else, because everybody supposedly speaks the universal language of art.

But culture’s ultimate value is in difference. Art is supposed to provide us with one-of-a-kind experiences. We make and consume it to share with others, the more people the better, but also to affirm our individuality, our links to specific things, places, values and people. Universality is useful to the art market but a concept still underexamined and overrated.

There’s another American art show now, at the Prado Museum in Madrid, a two-picture stellar one, juxtaposing Velázquez’s “Meninas” with John Singer Sargent’s portrait of the American Edward Darley Boit’s daughters, from the Museum of Fine Arts, Boston. I spent a couple of hours watching tourists and schoolchildren check out the pair of paintings, which looked related (the Sargent is an explicit homage) but nonetheless like distant cousins. The comparison pointed up a trans-Atlantic gap in character and ambition beyond the obvious qualitative divide between the work of an elegant, first-rate painter of Edwardian silk and sash, and, hands down, the greatest painter of all time.

What accounted for this gap? I don’t believe it was just an inferiority complex among Americans about their own (prewar) art. I think it had to do with Sargent’s essential Americanness. True, he spent almost his entire life in Europe, was in some respects more British than anything else, and leaned heavily in his work on not just Velázquez but other European greats like Van Dyck, Gainsborough and Degas. In fact, you can see Degas’s influence in the Boit portrait, whose figures look, as Degas’s often do, psychologically disconnected, occupying a space that is ambiguous.

Like Degas, Sargent was a heartless but dazzling virtuoso. But this is also a picture about new money and social ambition, an American combination. It allows a shadowy view inside one of those big new Paris apartments that rich Americans tended to occupy. To the French, who received it coolly at first, it conveyed foreignness, with its pretty, pink-cheeked, distant girls vaguely, almost offhandedly, portrayed in everyday dress, an American informality. Modern outsiders, they seem a world away from Velázquez’s infanta and her court, a bunch of ultimate insiders.

Or is all this reading too much into the comparison? An American who happened by suggested that the issue was simply Sargent’s “republicanism”: the picture projects 19th-century capitalist affluence in the midst of Old World royalty. That’s right, but I’d add that the perceptual divide for an American between the paintings also depends on the American’s sympathy and identification with an outsider’s striving.

It’s about projection, in other words, which all good art provokes, whether by Sargent, Zille, Moore or Hopper, whose laconic and merciless drawings can, seen by a New Yorker passing through Rome, have a kind of Proustian eloquence. I stared at the ones he did of summer in the city and the sun splashing across Lower Manhattan before carrying my tracings of two of them to a favorite Sicilian bakery a few blocks away from the Piazza Colonna. It was unconscious, deciding to go there, but I realized it was because the cannoli reminded me of ones I fetched as a boy from a cafe on MacDougal Street, where the owner used to pack them in little white cardboard boxes tied with striped red string. I carried the pastries home to my family, past the Hopper-like brownstones, through the concrete park that faced our house, and across Sixth Avenue to our apartment, under what in my memory was forever a dusky Hopper sky.

Wednesday, April 21, 2010

Pardon My French By MICHAEL KIMMELMAN

April 21, 2010
Pardon My French By MICHAEL KIMMELMAN

Paris

ÉRIC ZEMMOUR, slight, dark, a live wire, fell over his own words, they were tumbling out so fast. He was fidgeting at the back of a half-empty cafe one recent evening near the offices of Le Figaro, the newspaper where he works, notwithstanding that detractors have lately tried to get him fired for his most recent inflammatory remarks about French blacks and Arabs on a television show. Mr. Zemmour, roughly speaking, is the Bill O’Reilly of French letters. He was describing his latest book, “French Melancholy,” which has shot up the best-seller list here.

“The end of French political power has brought the end of French,” Mr. Zemmour said. “Now even the French elite have given up. They don’t care anymore. They all speak English. And the working class, I’m not talking just about immigrants, they don’t care about preserving the integrity of the language either.”

Mr. Zemmour is a notorious rabble-rouser. In his view France, because of immigration and other outside influences, has lost touch with its heroic ancient Roman roots, its national “gloire,” its historic culture, at the heart of which is the French language. Plenty of people think he’s an extremist, but he’s not alone. The other day Nicolas Sarkozy, the French president, sounded a bit like Mr. Zemmour, complaining about the “snobisme” of French diplomats who “are happy to speak English,” rather than French, which is “under siege.”

“Defending our language, defending the values it represents — that is a battle for cultural diversity in the world,” Mr. Sarkozy argued. The occasion for his speech was the 40th anniversary of the International Organization of the Francophonie, which celebrates French around the world. Mr. Sarkozy said the problem is not English itself but “ready-to-wear culture, uniformity, monolingualism,” by which of course he meant English. The larger argument about a decline of traditional values has struck a chord with conservative French voters perennially worried about the loss of French mojo.

The issue is somewhat akin to Americans complaining about the rise of Spanish in classrooms and elsewhere, but more acute here because of France’s special, proprietary, albeit no longer entirely realistic relationship to French. French is now spoken mostly by people who aren’t French. More than 50 percent of them are African. French speakers are more likely to be Haitians and Canadians, Algerians and Senegalese, immigrants from Africa and Southeast Asia and the Caribbean who have settled in France, bringing their native cultures with them.

Which raises the question: So what does French culture signify these days when there are some 200 million French speakers in the world but only 65 million are actually French? Culture in general — and not just French culture — has become increasingly unfixed, unstable, fragmentary and elective. Globalization has hastened the desire of more people, both groups and individuals, to differentiate themselves from one another to claim a distinct place in the world, and language has long been an obvious means to do so. In Canada the Quebecers tried outlawing signs and other public expressions in anything but French. Basque separatists have been murdering Spaniards in the name of political, linguistic and cultural independence, just as Franco imprisoned anyone who spoke Basque or Catalan. In Belgium the split between French and Dutch speakers has divided the country for ages.

And in France some years ago Jacques Toubon, a former culture minister, proposed curbing the use of English words like “weekend,” although nobody paid much attention. The fact is, French isn’t declining. It’s thriving as never before if you ask Abdou Diouf, former president of Senegal, who is the secretary general of the francophone organization. Mr. Diouf’s organization has evolved since 1970 from a postcolonial conglomerate of mostly African states preserving the linguistic vestiges of French imperialism into a global entity whose shibboleth is cultural diversity. With dozens of member states and affiliates, the group reflects a polyglot reality in which French is today concentrated outside France, and to a large extent, flourishes despite it.

“The truth,” Mr. Diouf said the other morning, “is that the future of the French language is now in Africa.” There and elsewhere, from Belgium to Benin, Lebanon to St. Lucia, the Seychelles to Switzerland, Togo to Tunisia, French is just one among several languages, sometimes, as in Cameroon, one among hundreds of them. This means that for writers from these places French is a choice, not necessarily signifying fealty, political, cultural or otherwise, to France. Or as Mr. Diouf put it: “The more we have financial, military and economic globalization, the more we find common cultural references and common values, which include diversity. And diversity, not uniformity, is the real result of globalization.”

Didier Billion is a political scientist with an interest in francophone culture. He agreed. “A multipolar world has emerged,” he said when we met in his office recently. “It’s the major trend of our time, which for the first time is allowing every person on the planet to become, in a cultural sense, an actor on the world stage.

“I was in Iran two months ago. Young Iranians are very proud of their own culture, which is rich and profound. But at the same time they want a window onto the world through the Internet, to have some identity outside Iran, and the important point is that for them there is no contradiction between these two positions. I am very proud of being French, but 40 years ago the French language was a way to maintain influence in the former colonies, and now French people are going to have to learn to think about francophone culture differently, because having a common language doesn’t assure you a common political or cultural point of view.”

This may sound perfectly obvious to Americans, but it’s not necessarily so to France’s growing tea party contingent. The populist National Front party won some 20 percent of the vote in the south last month (less nationwide), despite Mr. Sarkozy’s monthslong campaign to seduce right-wing voters by stressing the preservation of French national identity. Part of that campaign has been affirming a policy of cultural exceptionalism.

A phrase born years ago, “l’exception culturelle,” refers to the legal exclusion of French cultural products, like movies, from international free trade agreements, so they won’t be treated as equivalent to Coca-Cola or the Gap. But if you ask French people, the term also implies something more philosophical. In a country where pop radio stations broadcast a percentage of songs in French, and a socialist mayor in the northern, largely Muslim town of Roubaix lately won kudos for protesting that outlets of the fast-food chain Quick turned halal, cultural exceptionalism reflects fears of the multicultural sort that Mr. Zemmour’s book touches on.

It happens that Mr. Zemmour traces his own roots to Sephardic Jews from Spain who became French citizens while living in Algeria in the 19th century, then moved to France before the Algerian war. He belongs to the melting pot, in other words, which for centuries, he said, absorbed immigrants into its republican culture.

“In America or Britain it is O.K. that people live in separate communities, black with black, white with white,” he said, reflecting a certain antique perspective. “But this is not French. France used to be about assimilation. But since the 1970s the French intelligentsia has called this neocolonialism. In fact it is globalization, and globalization in this respect really means Americanization.”

But of course colorblind French Jacobin republicanism has always been a fiction if you were black or Muslim, and what’s really happened lately, it seems, is that different racial and ethnic groups have begun to argue more loudly for their rights and assert their culture. The election of Barack Obama hastened the process, by pointing out how few blacks and Arabs here have gained political authority.

The French language is a small but emblematic indicator of this change. So to a contemporary writer like the Soviet-born Andreï Makine, who found political asylum here in 1987, French promises assimilation and a link to the great literary tradition of Zola and Proust. He recounted the story of how, 20-odd years ago, his first manuscripts, which he wrote in French, were rejected by French publishers because it was presumed that he couldn’t write French well enough as a foreigner.

Then he invented the name of a translator, resubmitted the same works as if they were translations from Russian, and they won awards. He added that when his novel “Dreams of My Russian Summers” became a runaway best seller and received the Prix Goncourt, publishing houses in Germany and Serbia wanted to translate the book from its “original” Russian manuscript, so Mr. Makine spent two “sleepless weeks,” he said, belatedly producing one.

“Why do I write in French?” he repeated the question I had posed. “It is the possibility to belong to a culture that is not mine, not my mother tongue.”

Nancy Huston, a Canadian-born novelist here, put it another way: “The world has changed.” She moved to Paris during the 1970s. “The French literary establishment, which still thinks of itself as more important than it is, complains about the decline of its prestige but treats francophone literature as second class,” she said, while “laying claim to the likes of Kundera, Beckett and Ionesco, who were all born outside France. That is because, like Makine, they made the necessary declaration of love for France. But if the French bothered actually to read what came out of Martinique or North Africa, they would see that their language is in fact not suffering.

“After the war French writers rejected the idea of narrative because Hitler and Stalin were storytellers, and it seemed naïve to believe in stories. So instead they turned more and more to theory, to the absurd. The French declined even to tell stories about their own history, including the war in Algeria, which like all history can’t really be digested until it is turned into great literature. Francophone literature doesn’t come out of that background. It still tells stories.”

Which may partly account for the popularity of francophone writers like Yasmina Khadra, the best-selling Algerian novelist, whose real name is Mohammed Moulessehoul. We sipped tea one gray day in the offices of the Algerian Cultural Center. A 55-year-old former Algerian Army officer who now lives in Paris heading the center, Mr. Moulessehoul writes novels critical of the Algerian government under his wife’s name, which he first borrowed while in Algeria because the military there had banned his literary work.

“I was born into a poet tribe in the Sahara desert, which ruled for 800 years,” he said, sitting erect and alert, still a soldier at heart. “I read poetry in Arabic. I read kids’ books in Arabic. But at 15, after I read Camus in French, I decided to become a novelist in French partly because I wanted to respond to Camus, who had written about an Algeria in which there were no Arabs. I wanted to write in his language to say, I am here, I exist, and also because I love French, although I remain Arab. Linguistically it is as if I have married a French woman, but my mother is still Arabic.”

He quoted Kateb Yacine, the Algerian writer, who chose to write in French “to tell the French that I am not French.” Yacine called French the treasure left behind in the ruins of colonialism.

“Paris is still fearful of a French writer who becomes known around the world without its blessing,” Mr. Moulessehoul said. “And at the same time in certain Arab-speaking circles I am considered a traitor because I write in French. I am caught between two cultures, two worlds.

“Culture is always about politics in the end. I am a French writer and an Algerian writer. But the larger truth is that I am both.”

This article has been revised to reflect the following correction:

Correction: May 2, 2010

The Abroad column last Sunday, about the shift in francophone culture, described incorrectly the military service of the Algerian novelist Mohammed Moulessehoul, who writes under the pen name Yasmina Khadra. He went to military school at the age of 8 and later became an Alegrian Army officer in charge of counter-guerrilla activity for part of the country during Algeria’s civil war. He did not fight against the French.

Sunday, April 18, 2010

D.I.Y. Culture by MICHAEL KIMMELMAN

April 18, 2010
Abroad
D.I.Y. Culture by MICHAEL KIMMELMAN

Berlin

IT wasn’t so many years ago that Europeans loved to moan about American culture overrunning homegrown art forms. In the 1990s and early 2000s some in Europe were arguing for regulatory barriers to hold off the New World barbarians, particularly from Hollywood. In France, President Jacques Chirac’s culture minister, Jacques Toubon, warned about how the United States entertainment industry was trying “to impose domination by any means,” and Régis Debray, among other French intellectuals to hop on the same bandwagon, predicted that “the American empire will pass, like the others.”

“Let’s at least make sure,” Mr. Debray continued, “it does not leave irreparable damage to our creative abilities behind it.”

That was then. The other day President Nicolas Sarkozy was reiterating the virtues of what the French call “l’exception culturelle,” a modern policy of government protection and promotion of French culture, particularly the film industry. Mr. Sarkozy’s poll numbers have been plummeting, and l’exception culturelle feeds into his current strategy to identify himself with whatever, in the midst of an increasingly diversified, fractious and disapproving French society, French people say makes France French.

But Sarko l’Americain, as the French used to call him, is also the friendliest French president the United States has had in a while, and in America last month he stressed that rarely in history had “the community of views been so identical” between his country and the United States. Complaints about the American cultural juggernaut still arise across Europe, of course, but their intensity doesn’t seem as fierce. Something has changed, and it’s not just that Barack Obama has replaced George W. Bush or, in France’s case, that the film industry is doing O.K.

It’s a widening realization, I think, that globalism, beyond banking, climate change and warfare, has always been a dubious concept, a misleading catchall for how the world supposedly works, to which culture, in its increasing complexity, gives the lie.

The integration of markets and the Internet have certainly brought billions of people into closer contact. Everybody has access to the same American movies and music now, and not just American, also Indian, Romanian, South African and Chinese. But far from succumbing to some devouring juggernaut, culture — and Europe, with its different communities and nations living cheek by jowl, is a Petri dish to prove the point — has only atomized lately as a consequence of the very same globalizing forces that purportedly threaten to homogenize everything.

That’s been my own subject over here for the last couple of years, and will regularly be this column’s. Nationalism, regionalism and tribalism are all on the rise. Societies are splitting even as they share more common goods and attributes than ever before. Culture is increasingly an instrument to divide and differentiate communities. And the leveling pressures of globalization have at the same time provided more and more people with the technological resources to decide for themselves, culturally speaking, who they are and how they choose to be known, seen, distinguished from others.

Culture means many things in this context, but at heart it is a suite of traits we inherit and also choose to disavow or to stress. It consists in part of the arts. It is something made and consumed, in socially revealing ways. When Mats Nilsson, a Swedish product-design strategist for Ikea, not long ago told The New York Times that he loves to browse for handmade baskets in Spain, bird cages in Portugal, brushes in Japan and hardware on the Lower East Side of Manhattan, he was creating his own cultural identity out of the bric-a-brac of consumer choices made available by the globalizing forces of economic integration. Bricolage, it’s called. Anyone may now pick through the marketplace of global culture.

This may sound like the essence of globalization, but the fact that everybody from Yerevan to Brasilia, Jakarta to Jerusalem, knows songs by the Black Eyed Peas or wears New York Yankees caps doesn’t mean that culture is the same everywhere.

The common denominator of popular culture — which these days encompasses so many things that you could even include all sorts of high culture — seems to have just intensified the need people now feel to distinguish themselves from it. And global technology has made this easier by providing countless individuals, microcultures and larger groups and movements with cheap and convenient means to preserve and disseminate themselves. Years ago a language like Cimbrian, a Bavarian dialect today preserved by just a few hundred speakers in northern Italy, would have been doomed to extinction; now Cimbrian speakers, according to a recent German newspaper article, turn out to be getting their own online newspaper and television show. The language is being sustained by the same global forces that might promise to doom it.

Partly the problem with globalization has always been that the term, culturally speaking, is so vague. In one respect, it’s another word for empire, or at least its effects are as old as empire. What’s new is the power available to wide swaths of the populace, thanks above all to cheap travel and the Web, to become actors in the production and dissemination of culture, not simply consumers. A generation or more ago, aside from what people did in their home or from what’s roughly called folk or outsider art, culture was generally thought of as something handed down from on high, which the public received.

Today it’s made and distributed in countless different ways, giving not just governments and institutions but nearly everyone with access to the Web the means to choose and shape his or her own culture, identity, tribal fidelities — and then spread this culture, via Youtube or whatever else, among allies (and enemies) everywhere, a democratizing process. The downside of this democratization is how every political niche and fringe group has found a culture via the Web to reinforce its already narrow views, polarizing parts of society despite the widened horizon. Neo-Nazis across borders now bond around cultural artifacts available over the Internet. Democrats and Republicans move further apart, digesting news from their own cable network shows.

There are other consequences of this democratization. Generally speaking, culture operates within the mainstreams of power. The myth of an avant-garde serves the same market forces avant-gardism pretends to overthrow. Art may challenge authority; and popular culture (this includes clownish demagogues like Glenn Beck) sometimes makes trouble for those in charge, the way Thomas Nast’s cartoons did for Boss Tweed in Tammany Hall. But art doesn’t actually overthrow anything except itself, and never has, not in 19th-century France or 20th-century Russia or 21st-century China or Iran. Even when it manages to tilt popular thinking, it still ends up within the bounds of existing authority, and there has never been a true “outside” that really stayed outside: public consumption, by definition, adapts to the change, co-opts and normalizes all culture.

Instead culture (often unconsciously) identifies crucial ruptures, rifts, gaps and shifts in society. It is indispensable for our understanding of the mechanics of the world in this respect, pointing us toward those things around us that are unstable, changing, that shape how we live and how we treat one another. If we’re alert to it, it helps reveal who we are to ourselves, often in ways we didn’t realize in places we didn’t necessarily think to look.

Shortly after I moved to Berlin from New York, for example, I noticed there were bookstores all over town. They were on nearly every other street in my neighborhood. There was one just below my bedroom window, next to the high-end pet-supply store, specializing in New Age and self-help literature, and there was another one, a biography bookstore, around the corner. Shakespeare & Company (Berlin’s version) was beside the church square where the neighborhood children played when the weather was warm. And I began to stop into Marga Schoeller’s bookshop at Savignyplatz, which has a nice English-language section, en route to the subway, where a large art bookstore sprawls below raised tracks.

Berliners looked nonplussed when I asked them to account for all the bookshops. Along with currywurst and nude saunas, bookstores have long been such a banal fact of life here, as they are across Germany, that only an outsider might bother to think their number was remarkable. The proliferation turned out to derive from a very conscious decision after the war to restore civilization in West Germany by supporting a kind of ecosystem of small publishers and small bookstores to which, in certain small towns, trucks that delivered books to the bookstores overnight also delivered drugs to the drugstores: drugs for the body, books for the mind, a metaphor of recovery.

This was more than just a system of distribution and sales; it was a cultural as well as economic affair. It influenced civic life and social relations in ways that browsing books on Amazon or Google can’t. So what was to me as a clueless foreigner an urban curiosity, noticeable just because it wasn’t my usual experience — it was for me a cultural rift or rupture — ended up suggesting some larger truth about the country’s history and ambition. Culture is something we propagate but also something naturally there, existing in and around us, which makes us who we are but which may rise to the level of our consciousness only when one of those ruptures or rifts appear — when some little psychic clash happens between it and our more or less unconscious sense of the everyday world.

I also went to Gaza before the last Israeli incursion a couple of years ago. Naturally, the stories that tend to come from there revolve around one crisis or another: the rocket attacks, the border closures, clashes between Hamas and Fatah, Hamas and Israel. But what was life like, I wondered, under Hamas? What were the limits to Gazans’ freedom? The effects of isolation? How did Gazans see themselves in relation to everybody else?

These seemed to me cultural questions. The people I spoke with there said that culture was not just an escape for them from the everyday hardships from deprivation and a repressive regime, but that it was essential to survival, a lifeline, their steady connection to an outside world, a glimpse of what was beyond the conflict.

It represented normalcy, in other words, a precious commodity in that place. In the garden of a restaurant in Gaza City where a sign on the front door said, “No weapons, please,” I joined families of Gazans one evening watching episodes of “Friends” and a wildly popular Turkish soap opera, “Noor,” on a big screen. And in a video store nearby I thumbed through shelves of pirated Jennifer Lopez CDs and copies of “You Don’t Mess With the Zohan,” Adam Sandler’s comedy about a Mossad agent-turned-hairdresser in a New York City salon run by a Palestinian woman. There were also the predictable audiotapes extolling Fatah, Hamas and Islamic Jihad.

Some Gazans spoke sadly and nervously about their fears that extremists within Hamas, whose factional split was revealed by this cultural divide, had begun to crack down on local theaters and on art and the Web in Gaza, even as these same people spoke about culture being a fragile but essential link to the West. Via satellite dishes and the Internet, the West meant something to them other than guns and territory: culture was a potential bond, they suggested, through which some dialogue might yet arise.

Not incidentally, Gazans, like that Swedish Ikea designer, made their own culture from the bricolage of global choices. I thought most of what passed for art in Gaza wasn’t very good, truth be told, but quality seemed beside the point. We miss much about how culture works today — including how what might be called local standards of quality vie with the global aesthetic of sensationalism and fashion — if we stick only to seeing it as critics and consumers through our own aesthetic lens.

Hollywood and Broadway, the major museums and art fairs and biennials and galleries, buildings designed by celebrity architects and the music business are all the traditional focus of big media, and they tell us a lot about ourselves. They constitute our cultural firmament, the constellation of our stars. But scientists say most of the universe is composed not of stars but of dark matter. It is the powerful but invisible force that exists everywhere and requires some leap of imagination on our part, some effort, to identify.

Most culture is dark matter.

Put another way, whether in Berlin or Gaza or New York City, there’s a universe of life and death affairs beyond globalism. And culture is our window onto it.

Friday, April 16, 2010

The Fire Next Time By PAUL KRUGMAN

April 16, 2010
Op-Ed Columnist
The Fire Next Time By PAUL KRUGMAN

On Tuesday, Mitch McConnell, the Senate minority leader, called for the abolition of municipal fire departments.

Firefighters, he declared, “won’t solve the problems that led to recent fires. They will make them worse.” The existence of fire departments, he went on, “not only allows for taxpayer-funded bailouts of burning buildings; it institutionalizes them.” He concluded, “The way to solve this problem is to let the people who make the mistakes that lead to fires pay for them. We won’t solve this problem until the biggest buildings are allowed to burn.”

O.K., I fibbed a bit. Mr. McConnell said almost everything I attributed to him, but he was talking about financial reform, not fire reform. In particular, he was objecting not to the existence of fire departments, but to legislation that would give the government the power to seize and restructure failing financial institutions.

But it amounts to the same thing.

Now, Mr. McConnell surely isn’t sincere; while pretending to oppose bank bailouts, he’s actually doing the bankers’ bidding. But before I get to that, let’s talk about why he’s wrong on substance.

In his speech, Mr. McConnell seemed to be saying that in the future, the U.S. government should just let banks fail. We “must put an end to taxpayer funded bailouts for Wall Street banks.” What’s wrong with that?

The answer is that letting banks fail — as opposed to seizing and restructuring them — is a bad idea for the same reason that it’s a bad idea to stand aside while an urban office building burns. In both cases, the damage has a tendency to spread. In 1930, U.S. officials stood aside as banks failed; the result was the Great Depression. In 2008, they stood aside as Lehman Brothers imploded; within days, credit markets had frozen and we were staring into the economic abyss.

So it’s crucial to avoid disorderly bank collapses, just as it’s crucial to avoid out-of-control urban fires.

Since the 1930s, we’ve had a standard procedure for dealing with failing banks: the Federal Deposit Insurance Corporation has the right to seize a bank that’s on the brink, protecting its depositors while cleaning out the stockholders. In the crisis of 2008, however, it became clear that this procedure wasn’t up to dealing with complex modern financial institutions like Lehman or Citigroup.

So proposed reform legislation gives regulators “resolution authority,” which basically means giving them the ability to deal with the likes of Lehman in much the same way that the F.D.I.C. deals with conventional banks. Who could object to that?

Well, Mr. McConnell is trying. His talking points come straight out of a memo Frank Luntz, the Republican political consultant, circulated in January on how to oppose financial reform. “Frankly,” wrote Mr. Luntz, “the single best way to kill any legislation is to link it to the Big Bank Bailout.” And Mr. McConnell is following those stage directions.

It’s a truly shameless performance: Mr. McConnell is pretending to stand up for taxpayers against Wall Street while in fact doing just the opposite. In recent weeks, he and other Republican leaders have held meetings with Wall Street executives and lobbyists, in which the G.O.P. and the financial industry have sought to coordinate their political strategy.

And let me assure you, Wall Street isn’t lobbying to prevent future bank bailouts. If anything, it’s trying to ensure that there will be more bailouts. By depriving regulators of the tools they need to seize failing financial firms, financial lobbyists increase the chances that when the next crisis strikes, taxpayers will end up paying a ransom to stockholders and executives as the price of avoiding collapse.

Even more important, however, the financial industry wants to avoid serious regulation; it wants to be left free to engage in the same behavior that created this crisis. It’s worth remembering that between the 1930s and the 1980s, there weren’t any really big financial bailouts, because strong regulation kept most banks out of trouble. It was only with Reagan-era deregulation that big bank disasters re-emerged. In fact, relative to the size of the economy, the taxpayer costs of the savings and loan disaster, which unfolded in the Reagan years, were much higher than anything likely to happen under President Obama.

To understand what’s really at stake right now, watch the looming fight over derivatives, the complex financial instruments Warren Buffett famously described as “financial weapons of mass destruction.” The Obama administration wants tighter regulation of derivatives, while Republicans are opposed. And that tells you everything you need to know.

So don’t be fooled. When Mitch McConnell denounces big bank bailouts, what he’s really trying to do is give the bankers everything they want.

David Brooks is off today.

Sunday, March 21, 2010

Vocabulary: bricolage

bricolage
Dictionary
bri·co·lage (brē'kō-läzh', brĭk'ō-)
n.
Something made or put together using whatever materials happen to be available: "Even the decor is a bricolage, a mix of this and that" (Los Angeles Times).

[French, from bricole, trifle, from Old French, catapult, from Old Italian briccola , of Germanic origin.]

Texts Without Context By MICHIKO KAKUTANI

March 21, 2010
Texts Without Context By MICHIKO KAKUTANI
In his deliberately provocative — and deeply nihilistic — new book, “Reality Hunger,” the onetime novelist David Shields asserts that fiction “has never seemed less central to the culture’s sense of itself.” He says he’s “bored by out-and-out fabrication, by myself and others; bored by invented plots and invented characters” and much more interested in confession and “reality-based art.” His own book can be taken as Exhibit A in what he calls “recombinant” or appropriation art.

Mr. Shields’s book consists of 618 fragments, including hundreds of quotations taken from other writers like Philip Roth, Joan Didion and Saul Bellow — quotations that Mr. Shields, 53, has taken out of context and in some cases, he says, “also revised, at least a little — for the sake of compression, consistency or whim.” He only acknowledges the source of these quotations in an appendix, which he says his publishers’ lawyers insisted he add.

“Who owns the words?” Mr. Shields asks in a passage that is itself an unacknowledged reworking of remarks by the cyberpunk author William Gibson. “Who owns the music and the rest of our culture? We do — all of us — though not all of us know it yet. Reality cannot be copyrighted.”

Mr. Shields’s pasted-together book and defense of appropriation underscore the contentious issues of copyright, intellectual property and plagiarism that have become prominent in a world in which the Internet makes copying and recycling as simple as pressing a couple of buttons. In fact, the dynamics of the Web, as the artist and computer scientist Jaron Lanier observes in another new book, are encouraging “authors, journalists, musicians and artists” to “treat the fruits of their intellects and imaginations as fragments to be given without pay to the hive mind.”

It’s not just a question of how these “content producers” are supposed to make a living or finance their endeavors, however, or why they ought to allow other people to pick apart their work and filch choice excerpts. Nor is it simply a question of experts and professionals being challenged by an increasingly democratized marketplace. It’s also a question, as Mr. Lanier, 49, astutely points out in his new book, “You Are Not a Gadget,” of how online collectivism, social networking and popular software designs are changing the way people think and process information, a question of what becomes of originality and imagination in a world that prizes “metaness” and regards the mash-up as “more important than the sources who were mashed.”

Mr. Lanier’s book, which makes an impassioned case for “a digital humanism,” is only one of many recent volumes to take a hard but judicious look at some of the consequences of new technology and Web 2.0. Among them are several prescient books by Cass Sunstein, 55, which explore the effects of the Internet on public discourse; Farhad Manjoo’s “True Enough,” which examines how new technologies are promoting the cultural ascendancy of belief over fact; “The Cult of the Amateur,” by Andrew Keen, which argues that Web 2.0 is creating a “digital forest of mediocrity” and substituting ill-informed speculation for genuine expertise; and Nicholas Carr’s book “The Shallows” (coming in June), which suggests that increased Internet use is rewiring our brains, impairing our ability to think deeply and creatively even as it improves our ability to multitask.

Unlike “Digital Barbarism,” Mark Helprin’s shrill 2009 attack on copyright abolitionists, these books are not the work of Luddites or technophobes. Mr. Lanier is a Silicon Valley veteran and a pioneer in the development of virtual reality; Mr. Manjoo, 31, is Slate’s technology columnist; Mr. Keen is a technology entrepreneur; and Mr. Sunstein is a Harvard Law School professor who now heads the White House Office of Information and Regulatory Affairs. Rather, these authors’ books are nuanced ruminations on some of the unreckoned consequences of technological change — books that stand as insightful counterweights to early techno-utopian works like Esther Dyson’s “Release 2.0” and Nicholas Negroponte’s “Being Digital,” which took an almost Pollyannaish view of the Web and its capacity to empower users.

THESE NEW BOOKS share a concern with how digital media are reshaping our political and social landscape, molding art and entertainment, even affecting the methodology of scholarship and research. They examine the consequences of the fragmentation of data that the Web produces, as news articles, novels and record albums are broken down into bits and bytes; the growing emphasis on immediacy and real-time responses; the rising tide of data and information that permeates our lives; and the emphasis that blogging and partisan political Web sites place on subjectivity.

At the same time it’s clear that technology and the mechanisms of the Web have been accelerating certain trends already percolating through our culture — including the blurring of news and entertainment, a growing polarization in national politics, a deconstructionist view of literature (which emphasizes a critic’s or reader’s interpretation of a text, rather than the text’s actual content), the prominence of postmodernism in the form of mash-ups and bricolage, and a growing cultural relativism that has been advanced on the left by multiculturalists and radical feminists, who argue that history is an adjunct of identity politics, and on the right by creationists and climate-change denialists, who suggest that science is an instrument of leftist ideologues.

Even some outspoken cheerleaders of Internet technology have begun to grapple with some of its more vexing side effects. Steven Johnson, a founder of the online magazine Feed, for instance, wrote in an article in The Wall Street Journal last year that with the development of software for Amazon.com’s Kindle and other e-book readers that enable users to jump back and forth from other applications, he fears “one of the great joys of book reading — the total immersion in another world, or in the world of the author’s ideas — will be compromised.” He continued, “We all may read books the way we increasingly read magazines and newspapers: a little bit here, a little bit there.”

Mr. Johnson added that the book’s migration to the digital realm will turn the solitary act of reading — “a direct exchange between author and reader” — into something far more social and suggested that as online chatter about books grows, “the unity of the book will disperse into a multitude of pages and paragraphs vying for Google’s attention.”

WORRYING ABOUT the public’s growing attention deficit disorder and susceptibility to information overload, of course, is hardly new. It’s been 25 years since Neil Postman warned in “Amusing Ourselves to Death” that trivia and the entertainment values promoted by television were creating distractions that threatened to subvert public discourse, and more than a decade since writers like James Gleick (“Faster”) and David Shenk (“Data Smog”) described a culture addicted to speed, drowning in data and overstimulated to the point where only sensationalism and willful hyperbole grab people’s attention.

Now, with the ubiquity of instant messaging and e-mail, the growing popularity of Twitter and YouTube, and even newer services like Google Wave, velocity and efficiency have become even more important. Although new media can help build big TV audiences for events like the Super Bowl, it also tends to make people treat those events as fodder for digital chatter. More people are impatient to cut to the chase, and they’re increasingly willing to take the imperfect but immediately available product over a more thoughtfully analyzed, carefully created one. Instead of reading an entire news article, watching an entire television show or listening to an entire speech, growing numbers of people are happy to jump to the summary, the video clip, the sound bite — never mind if context and nuance are lost in the process; never mind if it’s our emotions, more than our sense of reason, that are engaged; never mind if statements haven’t been properly vetted and sourced.

People tweet and text one another during plays and movies, forming judgments before seeing the arc of the entire work. Recent books by respected authors like Malcolm Gladwell (“Outliers”), Susan Faludi (“The Terror Dream”) and Jane Jacobs (“Dark Age Ahead”) rely far more heavily on cherry-picked anecdotes — instead of broader-based evidence and assiduous analysis — than the books that first established their reputations. And online research enables scholars to power-search for nuggets of information that might support their theses, saving them the time of wading through stacks of material that might prove marginal but that might have also prompted them to reconsider or refine their original thinking.

“Reading in the traditional open-ended sense is not what most of us, whatever our age and level of computer literacy, do on the Internet,” the scholar Susan Jacoby writes in “The Age of American Unreason.” “What we are engaged in — like birds of prey looking for their next meal — is a process of swooping around with an eye out for certain kinds of information.”

TODAY’S TECHNOLOGY has bestowed miracles of access and convenience upon millions of people, and it’s also proven to be a vital new means of communication. Twitter has been used by Iranian dissidents; text messaging and social networking Web sites have been used to help coordinate humanitarian aid in Haiti; YouTube has been used by professors to teach math and chemistry. But technology is also turning us into a global water-cooler culture, with millions of people sending each other (via e-mail, text messages, tweets, YouTube links) gossip, rumors and the sort of amusing-entertaining-weird anecdotes and photographs they might once have shared with pals over a coffee break. And in an effort to collect valuable eyeballs and clicks, media outlets are increasingly pandering to that impulse — often at the expense of hard news. “I have the theory that news is now driven not by editors who know anything,” the comedian and commentator Bill Maher recently observed. “I think it’s driven by people who are” slacking off at work and “surfing the Internet.” He added, “It’s like a country run by ‘America’s Funniest Home Videos.’ ”

MSNBC’s new program “The Dylan Ratigan Show,” which usually focuses on business and politics, has a “While you were working ...” segment in which viewers are asked to send in “some of the strangest and outrageous stories you’ve found on the Internet,” and the most e-mailed lists on popular news sites tend to feature articles about pets, food, celebrities and self-improvement. For instance, at one point on March 11, the top story on The Washington Post’s Web site was “Maintaining a Sex Life,” while the top story on Reddit.com, a user-generated news link site, was “(Funny) Sexy Girl? Do Not Trust Profile Pictures!”

Given the constant bombardment of trivia and data that we’re subjected to in today’s mediascape, it’s little wonder that noisy, Manichean arguments tend to get more attention than subtle, policy-heavy ones; that funny, snarky or willfully provocative assertions often gain more traction than earnest, measured ones; and that loud, entertaining or controversial personalities tend to get the most ink and airtime. This is why Sarah Palin’s every move and pronouncement is followed by television news, talk-show hosts and pundits of every political persuasion. This is why Glenn Beck and Rush Limbaugh on the right and Michael Moore on the left are repeatedly quoted by followers and opponents. This is why a gathering of 600 people for last month’s national Tea Party convention in Nashville received a disproportionate amount of coverage from both the mainstream news media and the blogosphere.

Digital insiders like Mr. Lanier and Paulina Borsook, the author of the book “Cyberselfish,” have noted the easily distracted, adolescent quality of much of cyberculture. Ms. Borsook describes tech-heads as having “an angry adolescent view of all authority as the Pig Parent,” writing that even older digerati want to think of themselves as “having an Inner Bike Messenger.”

For his part Mr. Lanier says that because the Internet is a kind of “pseudoworld” without the qualities of a physical world, it encourages the Peter Pan fantasy of being an entitled child forever, without the responsibilities of adulthood. While this has the virtues of playfulness and optimism, he argues, it can also devolve into a “Lord of the Flies”-like nastiness, with lots of “bullying, voracious irritability and selfishness” — qualities enhanced, he says, by the anonymity, peer pressure and mob rule that thrive online.

Digital culture, he writes in “You Are Not a Gadget,” “is comprised of wave after wave of juvenilia,” with rooms of “M.I.T. Ph.D. engineers not seeking cancer cures or sources of safe drinking water for the underdeveloped world but schemes to send little digital pictures of teddy bears and dragons between adult members of social networks.”

AT THE SAME time the Internet’s nurturing of niche cultures is contributing to what Cass Sunstein calls “cyberbalkanization.” Individuals can design feeds and alerts from their favorite Web sites so that they get only the news they want, and with more and more opinion sites and specialized sites, it becomes easier and easier, as Mr. Sunstein observes in his 2009 book “Going to Extremes,” for people “to avoid general-interest newspapers and magazines and to make choices that reflect their own predispositions.”

“Serendipitous encounters” with persons and ideas different from one’s own, he writes, tend to grow less frequent, while “views that would ordinarily dissolve, simply because of an absence of social support, can be found in large numbers on the Internet, even if they are understood to be exotic, indefensible or bizarre in most communities.” He adds that studies of group polarization show that when like-minded people deliberate, they tend to reinforce one another and become more extreme in their views.

One result of this nicheification of the world is that consensus and common ground grow ever smaller, civic discourse gets a lot less civil, and pluralism — what Isaiah Berlin called the idea that “there are many different ends that men may seek and still be fully rational, fully men, capable of understanding each other and sympathizing and deriving light” from “worlds, outlooks, very remote from our own” — comes to feel increasingly elusive.

As Mr. Manjoo observes in “True Enough: Learning to Live in a Post-Fact Society” (2008), the way in which “information now moves through society — on currents of loosely linked online groups and niche media outlets, pushed along by experts and journalists of dubious character and bolstered by documents that are no longer considered proof of reality” — has fostered deception and propaganda and also created what he calls a “Rashomon world” where “the very idea of objective reality is under attack.” Politicians and voters on the right and left not only hold different opinions from one another, but often can’t even agree over a shared set of facts, as clashes over climate change, health care and the Iraq war attest.

THE WEB’S amplification of subjectivity applies to culture as well as politics, fueling a phenomenon that has been gaining hold over America for several decades, with pundits squeezing out reporters on cable news, with authors writing biographies animated by personal and ideological agendas, with tell-all memoirs, talk-show confessionals, self-dramatizing blogs and carefully tended Facebook and MySpace pages becoming almost de rigeur.

As for the textual analysis known as deconstruction, which became fashionable in American academia in the 1980s, it enshrined individual readers’ subjective responses to a text over the text itself, thereby suggesting that the very idea of the author (and any sense of original intent) was dead. In doing so, deconstruction uncannily presaged arguments advanced by digerati like Kevin Kelly, who in a 2006 article for The New York Times Magazine looked forward to the day when books would cease to be individual works but would be scanned and digitized into one great, big continuous text that could be “unraveled into single pages” or “reduced further, into snippets of a page,” which readers — like David Shields, presumably — could then appropriate and remix, like bits of music, into new works of their own.

As John Updike pointed out, Mr. Kelly’s vision would in effect mean “the end of authorship” — hobbling writers’ ability to earn a living from their published works, while at the same time removing a sense of both recognition and accountability from their creations. In a Web world where copies of books (and articles and music and other content) are cheap or free, Mr. Kelly has suggested, authors and artists could make money by selling “performances, access to the creator, personalization, add-on information” and other aspects of their work that cannot be copied. But while such schemes may work for artists who happen to be entrepreneurial, self-promoting and charismatic, Mr. Lanier says he fears that for “the vast majority of journalists, musicians, artists and filmmakers” it simply means “career oblivion.”

Other challenges to the autonomy of the artist come from new interactive media and from constant polls on television and the Web, which ask audience members for feedback on television shows, movies and music; and from fan bulletin boards, which often function like giant focus groups. Should the writers of television shows listen to fan feedback or a network’s audience testing? Does the desire to get an article on a “most e-mailed” list consciously or unconsciously influence how reporters and editors go about their assignments and approaches to stories? Are literary-minded novelists increasingly taking into account what their readers want or expect?

As reading shifts “from the private page to the communal screen,” Mr. Carr writes in “The Shallows,” authors “will increasingly tailor their work to a milieu that the writer Caleb Crain describes as ‘groupiness,’ where people read mainly ‘for the sake of a feeling of belonging’ rather than for personal enlightenment or amusement. As social concerns override literary ones, writers seem fated to eschew virtuosity and experimentation in favor of a bland but immediately accessible style.”

For that matter, the very value of artistic imagination and originality, along with the primacy of the individual, is increasingly being questioned in our copy-mad, postmodern digital world. In a recent Newsweek cover story pegged to the Tiger Woods scandal, Neal Gabler, the author of “Life: the Movie: How Entertainment Conquered Reality,” absurdly asserts that celebrity is “the great new art form of the 21st century.”

Celebrity, Mr. Gabler argues, “competes with — and often supersedes — more traditional entertainments like movies, books, plays and TV shows,” and it performs, he says, “in its own roundabout way, many of the functions those old media performed in their heyday: among them, distracting us, sensitizing us to the human condition, and creating a fund of common experience around which we can form a national community.”

However impossible it is to think of “Jon & Kate Plus Eight” or “Jersey Shore” as art, reality shows have taken over wide swaths of television, and memoir writing has become a rite of passage for actors, politicians and celebrities of every ilk. At the same time our cultural landscape is brimming over with parodies, homages, variations, pastiches, collages and others forms of “appropriation art” — much of it facilitated by new technology that makes remixing, and cutting-and-pasting easy enough for a child.

It’s no longer just hip-hop sampling that rules in youth culture, but also jukebox musicals like “Jersey Boys” and “Rock of Ages,” and works like “The League of Extraordinary Gentlemen,” which features characters drawn from a host of classic adventures. Fan fiction and fan edits are thriving, as are karaoke contests, video games like Guitar Hero, and YouTube mash-ups of music and movie, television and visual images. These recyclings and post-modern experiments run the gamut in quality. Some, like Zachary Mason’s “Lost Books of the Odyssey,” are beautifully rendered works of art in their own right. Some, like J. J. Abram’s 2009 “Star Trek” film and Amy Heckerling’s 1995 “Clueless” (based on Jane Austen’s “Emma”) are inspired reinventions of classics. Some fan-made videos are extremely clever and inventive, and some, like a 3-D video version of Picasso’s “Guernica” posted on YouTube, are intriguing works that raise important and unsettling questions about art and appropriation.

All too often, however, the recycling and cut-and-paste esthetic has resulted in tired imitations; cheap, lazy re-dos; or works of “appropriation” designed to generate controversy like Mr. Shields’s “Reality Hunger.” Lady Gaga is third-generation Madonna; many jukebox or tribute musicals like “Good Vibrations” and “The Times They Are A-Changin’ ” do an embarrassing disservice to the artists who inspired them; and the rote remaking of old television shows into films (from “The Brady Bunch” to “Charlie’s Angels” to “Get Smart”), not to mention the recycling of video games into movies (like “Tomb Raider” and “Resident Evil”) often seem as pointless as they are now predictable.

Writing in a 2005 Wired article that “new technologies redefine us,” William Gibson hailed audience participation and argued that “an endless, recombinant, and fundamentally social process generates countless hours of creative product.” Indeed, he said, “audience is as antique a term as record, the one archaically passive, the other archaically physical. The record, not the remix, is the anomaly today. The remix is the very nature of the digital.”

To Mr. Lanier, however, the prevalence of mash-ups in today’s culture is a sign of “nostalgic malaise.” “Online culture,” he writes, “is dominated by trivial mash-ups of the culture that existed before the onset of mash-ups, and by fandom responding to the dwindling outposts of centralized mass media. It is a culture of reaction without action.”

He points out that much of the chatter online today is actually “driven by fan responses to expression that was originally created within the sphere of old media,” which many digerati mock as old-fashioned and passé, and which is now being destroyed by the Internet. “Comments about TV shows, major movies, commercial music releases and video games must be responsible for almost as much bit traffic as porn,” Mr. Lanier writes. “There is certainly nothing wrong with that, but since the Web is killing the old media, we face a situation in which culture is effectively eating its own seed stock.”

March 21, 2010
FURTHER READING
Words, Version 2.0

A bookshelf for further reading:

REALITY HUNGER: A MANIFESTO
By David Shields
219 pages. Alfred A. Knopf. $24.95.

YOU ARE NOT A GADGET:
A Manifesto
By Jaron Lanier
209 pages. Alfred A. Knopf. $24.95.

THE SHALLOWS: WHAT THE INTERNET IS DOING TO OUR BRAINS
By Nicholas Carr
288 pages. W. W. Norton & Company. $26.95. (Scheduled for release in June.)

TRUE ENOUGH: LEARNING TO LIVE IN A POST-FACT SOCIETY
By Farhad Manjoo
250 pages. John Wiley & Sons. $25.95.

THE AGE OF AMERICAN UNREASON
By Susan Jacoby
357 pages. Vintage Books. $15.95.

INFOTOPIA: HOW MANY MINDS PRODUCE KNOWLEDGE
By Cass R. Sunstein
273 pages. Oxford University Press. $15.95.

GOING TO EXTREMES: HOW LIKE MINDS UNITE AND DIVIDE
By Cass R. Sunstein
199 pages. Oxford University Press. $21.95.

THE CULT OF THE AMATEUR
By Andrew Keen
256 pages. Doubleday. $14.00.

Wednesday, March 10, 2010

What we can learn from Singapore's health-care model By Matt Miller

What we can learn from Singapore's health-care model By Matt Miller
Wednesday, March 3, 2010; 10:45 AM







We interrupt Washington's feud over the president's "way forward" for a brief word on a path not taken, courtesy of the only rich nation that boasts universal coverage with health outcomes better than ours while spending one-fifth as much per person on health care. Introducing (drum roll please): Singapore.



Yes, it's an island city-state of just 5 million people. Yes, it's more or less a benevolent dictatorship. And, yes, until recently, bringing chewing gum into Singapore could land you in jail. But Singapore, a poor country a few decades ago, now boasts a higher per capita income (when adjusted for local purchasing power) than the United States. And here's the astonishing fact: Singapore spends less than 4 percent of its GDP on health care. We spend 17 percent (and Singapore's somewhat younger population doesn't begin to explain the difference). Matching Singapore's performance in our $15 trillion economy would free up $2 trillion a year for other public and private purposes.



Do I have I your attention?



Today we can't find cash to recruit a new generation of great teachers, rebuild our roads and bridges, pay down the national debt, or invest in better airports, high-speed rail, a clean energy revolution or any of a hundred other things sensible patriots know we should do to renew the country. We can't do these things in large part because the Medical Industrial Complex vacuums up every spare dollar in sight. It's only slightly melodramatic to assert that if we could run our health-care system as efficiently as Singapore's, we could solve most of our other problems.



So how does Singapore do it?



In health circles it's always conservatives who bring up Singapore, because of the primacy it places on personal responsibility. According to Phua Kai Hong of the National University of Singapore, roughly one-third of health spending in Singapore is paid directly by individuals (who typically buy catastrophic coverage as well); in the United States, by contrast, nearly 90 percent is picked up by third-party insurers, employers and governments. Singaporeans make these payments out of earnings as well as from health savings accounts. The system is chock-full of incentives for thrift. If you want a private hospital room, for example, you pay through the nose; most people choose less expensive wards.



Conservatives are right: Singaporeans have the kind of "skin in the game" that promotes prudence.



But that's only half the story. There's also a massive public role. For starters, adequate savings for retirement and health expenses are mandated by government (employees must sock away 20 percent of earnings each year, to which employers add 13 percent). Public hospitals provide 80 percent of the acute care, setting affordable pricing benchmarks with which private providers compete. Supply-side rules that favor training new family doctors over pricey specialists are more extensive than similar notions Hillary Clinton pushed in the '90s. And in Singapore, if a child is obese, they don't get Rose Garden exhortations from the first lady. They get no lunch and mandatory exercise periods during school.



There's more (including an ample safety net for the poor), but you get the gist: Singapore achieves world-class results thanks to a bold, unconventional synthesis of liberal and conservative approaches. It's further to the left and further to the right than what President Obama or his foes now seek. The island's real ideology is pragmatic problem-solving. It works thanks to cultural traditions that let this eclectic blend flourish. The system is nurtured by talented, highly paid officials who have the luxury of governing for the long-term without being buffeted much by politics.



We obviously can't transplant Singapore's approach wholesale to the United States. But the reason we can't emulate even some of Singapore's success has to do with that iron law of health-care politics: Every dollar of health-care "waste" is somebody's dollar of income. As a stable advanced democracy, we're so overrun by groups with stakes in today's waste that real efficiency gains are perennially blocked.



Any hope for something better starts with tallying the price of today's paralysis. Think about that $2 trillion the next time you see states, citing budget woes, shut the door to college on tens of thousands of poor American students. Or when the next firm moves jobs overseas because health costs here are soaring. Or when the next bridge collapses. Thanks, Medical Industrial Complex!



We return now to our regularly scheduled political battle, which (no matter the outcome, according to some projections) will leave health costs headed to more than 20 percent of GDP by 2019.



Matt Miller, a senior fellow at the Center for American Progress and co-host of public radio's "Left, Right & Center," writes a weekly column for The Post. He can be reached at mattino2@gmail.com.

Sunday, February 28, 2010

The Cost of Doing Nothing on Health Care By REED ABELSON

February 26, 2010
The Cost of Doing Nothing on Health Care By REED ABELSON
“Hands off my health care,” goes one strain of populist sentiment.

But what if?

Suppose Congress and President Obama fail to overhaul the system now, or just tinker around the edges, or start over, as the Republicans propose — despite the Democrats’ latest and possibly last big push that began last week at a marathon televised forum in Washington.

Then “my health care” stays the same, right?

Far from it, health policy analysts and economists of nearly every ideological persuasion agree. The unrelenting rise in medical costs is likely to wreak havoc within the system and beyond it, and pretty much everyone will be affected, directly or indirectly.

“People think if we do nothing, we will have what we have now,” said Karen Davis, the president of the Commonwealth Fund, a nonprofit health care research group in New York. “In fact, what we will have is a substantial deterioration in what we have.”

Nearly every mainstream analysis calls for medical costs to continue to climb over the next decade, outpacing the growth in the overall economy and certainly increasing faster than the average paycheck. Those higher costs will translate into higher premiums, which will mean fewer individuals and businesses will be able to afford insurance coverage. More of everyone’s dollar will go to health care, and government programs like Medicare and Medicaid will struggle to find the money to operate.

Policy makers, in the end, may be forced to address the issue.

“It will break all of our banks if we do nothing,” said Peter V. Lee, who oversees national health policy for the Pacific Business Group on Health, which represents employers that offer coverage to workers. “It is a course that is literally bankrupting the federal government and businesses and individuals across the country.”

Even those families that enjoy generous insurance now are likely to see the cost of those benefits escalate. The typical price of family coverage now runs about $13,000 a year, but premiums are expected to nearly double, to $24,000, by 2020, according to the Commonwealth Fund. That equals nearly a quarter of the median family income today.

While some employers will continue to contribute the lion’s share of those premiums, there will be less money for employees in the form of raises or bonuses.

“It’s also cramping our economic growth,” said Frank McArdle, a consultant with Hewitt Associates, which advises large employers and reported on the need for change for the Business Roundtable, an association of C.E.O.’s at major companies. Spending so much on health care is “really a waste of people’s money,” Mr. McArdle said.

The higher premiums will also persuade more businesses, especially smaller ones, to decide not to offer insurance. More people who buy coverage on their own or are asked to pay a large share of premiums will find the price too high. It doesn’t take too many 39-percent increases, like the recent one proposed in California that has garnered so much attention, to put insurance out of reach.

“We have an affordability problem that is moving up through the middle class now,” said Paul B. Ginsburg, the president of the Center for Studying Health System Change, a nonprofit Washington research group.

While estimates vary, the number of people without insurance is expected to increase by more than a million a year, said Ron Pollack, the executive director of Families USA, a Washington consumer advocacy group that favors the Democrats’ approach. The Urban Institute, for example, predicts that the number of uninsured individuals will increase from about 49 million today to between 57 million and 66 million by 2019. The Democrats’ plan is expected to cover as many as 30 million individuals who now are uninsured.

There will be a cost in lives, too. Mr. Pollack’s organization estimates that as many as 275,000 people will die prematurely over the next 10 years because they do not have insurance. Even people with insurance will find their coverage providing much less protection from financial catastrophe than it does now. Individuals will pay significantly more in deductibles and co-payments, for example. “More and more families will experience huge debts and bankruptcies,” Mr. Pollack said.

Federal and state governments will also feel the squeeze. Medicare, the federal program for the elderly, is already the subject of much hand-wringing as its spending balloons. Medicaid, a joint program of the federal government and the states, is already struggling as states try to balance budgets hit hard by the economic downturn. Many states may be forced to cut benefits sharply as well as reduce financing for community health centers and state hospitals that serve the poor.

“I think we’ll just see the decline of public services,” said John Holahan, the director of the Health Policy Center at the Urban Institute.

Exactly how politicians, or anyone else, will react to the increasing pressures on the system is anyone’s guess. If the system actually collapses, could there be a movement to adopt a government-run system, something like Medicare for all, where the whole health care system would be much more heavily regulated?

Or maybe employers would take up the effort to figure out a better way of providing coverage.

The states may also step up their role. Some may try to follow the lead of Massachusetts, which overhauled its own insurance market for individuals and small businesses, while others may try a series of regulatory fixes. A state senator in New Hampshire, for example, recently introduced legislation that regulates hospital prices in a fashion similar to an approach favored in Maryland.

What seems unlikely, say policy analysts, is that Congress would try to pass anything nearly as ambitious as the bills that went through the House and Senate last year.

“If we fail this time, you’re not going to get this Congress to take this up on a big scale,” said Len Nichols, a health policy analyst at George Mason University who says he thinks the Democrats should go ahead and pass legislation.

But few policy analysts think Congress can afford to do absolutely nothing. Lawmakers are instead likely to try a series of smaller fixes, said Stuart Butler, a health policy analyst at the Heritage Foundation, a research group that favors market solutions over a larger government role.

After President Bill Clinton failed to get Congress to pass his health care bill in 1994, Republicans, who then had substantial victories in the House and Senate, worked with him to pass legislation like the health care privacy bill, a children’s health insurance program and the Balanced Budget Act, which contained significant changes to the Medicare program. Under President George W. Bush, the Republicans went on to pass a drug benefit under Medicare. “In the space of less than 10 years, you have several major bills,” Mr. Butler said.

If nothing passes now, Mr. Butler says he thinks Congress will tackle narrower areas, like insurance regulation, to make it easier for people with pre-existing medical conditions to find coverage, or maybe it will try another expansion of Medicaid or the children’s program.

But President Obama clearly prefers passage of a broader bill. In wrapping up Thursday’s session with lawmakers, he and other Democrats warned that an incremental approach was likely to provide too little relief to the people already feeling the effects of a broken system. “It turns out that baby steps don’t get you to the place that people need to go,” he said.

And even some people without a partisan point to make argue that the series of bills passed in the last 15 years have not made enough of a dent in slowing down medical costs. “We’ve had a lot of incremental reforms already,” said Mr. McArdle, the Hewitt consultant.

And many argue that putting off the inevitable has an additional cost. The Commonwealth Fund estimates that the nation would be spending hundreds of billions of dollars less than it does today if any of the health care legislation proposed by previous administrations had been enacted, assuming that they reduced costs by about 1.5 percentage points. If President Nixon’s plan had passed, the United States might be spending a trillion dollars a year less than it does now, and President Clinton’s plan would have reduced spending by some $500 billion a year.

“It makes a huge difference over a long period of time,” said Ms. Davis of the Commonwealth Fund.