Saturday, February 28, 2009

A Tale of Racism

Jindal post part two will be coming to this page soon, but in the meantime, a tale of racism.

Thursday I went for some late night pho with my friend PS, who is African American. We were the only customers who weren't Vietnamese or Korean, and at one point, a group of diners were pointing and laughing at us. I didn't really notice, but PS and I had the following exchange:

PS: Did you hear what they just said?
LR: What?
PS: It was so racist.
LR: I'm sorry, man, that sucks.
PS: No! It was racist against you!
(pause)
LR: Well, I guess I was just being a little racist against you.
PS: They were calling you "slumdog."
LR: Bummer.

UPDATE: Upon further review, I think I was also being a little racist towards the racists, for making a generalization about their racism.

Friday, February 27, 2009

Humpty Dumpty Finance

Everything you need to know about the financial crisis and how to fix it (and how not to fix it) can be found in this essay at the Huffington Post, written by my father David Richards. It's rather long (non-brevity, it seems, runs in the family!) but is chalk full of indispensable information and insight. It covers a lot of ground and you'll be happy to have read it.

Thursday, February 26, 2009

What About Bobby

Bobby Jindal’s speech Tuesday attracted a lot of ridicule and ire, in no place/space more than Facebook (most hilariously from the groups Bobby Jindal is Kenneth the Page and Volcanoes for Bobby Jindal). I want to concentrate here on the ire of one particular population: South Asians. For a while, dating back to Jindal’s Congressional stint, there have been groups with titles like South Asians Against Bobby Jindal, Bobby Jindal Doesn’t Represent Indians, etc, and since the speech, their numbers (both membership and number of groups) have grown, and more so than groups of Indians for Jindal. Do I join? I’m not sure. Keep in mind I’m constantly worried whether I’m Indian enough.

Near as I can tell, these groups’ objections to Jindal fall into one of three categories: superficial/fun stuff, identity-based, and position-based.

Superficial stuff includes things like the exorcism thing making the rounds (don’t wish to link), or little “gotcha” tidbits like “Jindal went to Disneyworld the day after making fun of Disneyland!” Now, I’m not ramping up into some giant objection to the inclusion of this kind of stuff – it’s par for the course for most any political group’s page, and why should South Asian discourse be held to a higher standard?

Things get a little meatier when you consider some of the identity-based objections. There is a widely held perception that, because of his changed name (Piyush to Bobby, though not legally) and religion (Hinduism to Catholicism), Jindal is at least a “coconut” and at worst a poser. The charge leaves me cold, because it basically begs my question, and also because it’s a kind of second-guessing that strikes me as super emotional. I can see how it might seem like a repudiation of Indian-ness/Hindu-ness, and I’m sure there are plenty of people who joined those groups out of anger/suspicion about that, but there are also plenty of people on the groups’ message boards repudiating this charge as a proper objection.

Also under the identity rubric, however, is concern over whether and how Jindal “represents” South Asians. Even this strikes me as a sort of strange thing to worry about, because that concern typically revolves around a negative or overly reductive stereotype, that everyone will think “we” are “like that.” But that’s not what’s going on here – to paraphrase Pickle Reader AS, his whole gestalt Tuesday was bizarre, and even the most committed racist would find it a stretch to suddenly extrapolate that all South Asians are stilted and twangy. Ok, I just wanted to make that joke, but I do think – perhaps naively– that very few people are going to look at that speech and thinks he speaks for South Asians.

This post is approaching Bollywood length, so I’ll make it a two-parter. After intermission, policy-based objections, the audience of these groups, and the final answer as to whether I’m joining!

Wednesday, February 25, 2009

Shameless Plug


That's me in TimeOut New York magazine. Check out the article, here. Conni's Avant Garde Restaurant is sold out for this weekend. But come dine with us in April! The show rocks.

Tuesday, February 24, 2009

My favorite part of the almost state of the union

The characterization that if you drop out of high school "you are not just quitting on yourself, you are quitting on your country." I like that. I like that a lot. It feels retro.

Saturday, February 21, 2009

Credit Crisis Cartoon

This is kind of fun, although the depiction of the credit unworthy family is pretty unsavory, and it does start hand waiving at the end just when we need explanations the most. But for the basics of the sub-prime ignition switch on this whole rigamarole, it's good.

Monday, February 16, 2009

Coinage: CDS

Last night (a big party night due to the Threekend), Luvh and I and Company found ourselves out at a bar in Brooklyn that seemed to have attracted a surprisingly high number of douche-heads. The king of the douche-heads was a short stubbly guy with a backwards Yankee cap, clearly wasted, running his potty mouth (at volume 11), and intentionally bumping into people perhaps in hopes of starting a fight. He was so egregiously annoying we were seriously contemplating asking him “if he wanted to step outside.” (But after discovering that not a single one of us dorks had ever, in our entire lives, actually been in a fight of any kind, we decided against such a move.) As we were leaving the bar a few hours later, our douche king was outside doing his thing—smoking, cursing, and drunkenly pretending he was Rocky Balboa as he punched the air directly in front of other people’s faces while doing that stupid boxer dance (running really fast in place without lifting his knees, making him look like a coked-up chicken on a tread-mill).

This preposterous behavior prompted the following spontaneous coinage:

Luvh: “Dude, that guy is toxic.”
Peter: “He’s a straight-up Credit Default Swap.”

CDS for short.

So whenever someone is ruining the party atmosphere, bringing down the mood, stealing focus from the main event, but there is no good way to get said person “off the books”—that is, to leave the premises—that person reaches CDS status.

Coinage

A super yelly, high-fivey bar patron, especially in New York, can be said to be "credit default swap," or "SO credit default swap."

Wednesday, February 11, 2009

My Plan

$2.5 Trillion? No no, I’ll tell ya what we gotta do. First, we need to give 11 trillion to all the first-born sons in states that start with the letter M, N, or S, who are notorious for spending very loosely. Then confiscate all the financial assets of everyone over the age of 65 (and I think possibly their cars and major appliances as well, though my thinking is still evolving on that part), sell them for 49 trillion to the Chinese, and then invest that back into honey-bees. Finally, we loan 236 grajillion to the Orcs of the planet Nebulon, on a guarantee that we have mining rights to all their precious anthracite, which is certain to be the coin of the future.

If that doesn’t get things moving again in the financial sector, nothing will.

Sunday, February 8, 2009

Liberals Should Chill Out About the Compromise Stimulus Bill

The left-wing blogosphere has hurled so much vitriol at the centrist senators who lopped off $80 billion from the stimulus package you’d think the legislation was mandating that every American give up their first-born child or something. These liberal voices may genuinely believe that they are trying to save the economy by passing a $900 billion bill instead of the compromise $800 billion bill. But if they were to take a step back for a second and think about what they saying, they’d realize how preposterous it sounds to the non-liberal ear that the fate of “the economy” hinges on this recently axed $80 billion. For starters, the efficacy of the plan Tim Geithner will unveil on Tuesday to bailout the banks will likely have a much greater impact on how quickly the economy recovers than the stimulus bill. And government spending, let’s remember, is not something that happens once a year. If the economy is still in the tank when this $800 billion runs out, well, then we can spend another $100 billion at that point. In fact, it’s probably a good idea to try not to max out the Treasury’s line of credit with the Central Bank of China all at one go. As I’ve argued before, endless $1 trillion budget deficits must be financed in large part by foreign central banks, and unless they see that the American government is at least TRYING to spend prudently, those central banks will be very reluctant to buy our Treasury bonds at extremely low interest rates. And let’s not lose perspective here: a $800 billion spending bill, even will all the wasteful tax cuts and even without the Head Start funding, is not chump change. Not since Brewster’s Millions has so much been spent so quickly. So I think some toning down of the rhetoric against Olympia Snowe is in order.

But the best argument of all for why we liberals should zip our lips when it comes to losing this $80 billion is that this compromise bill is good politics. It's easy to overlook how much anger there is out there directed at the government for bailing out Wall St. with the TARP. And while we may think that this stimulus bill is a Main St. bailout that will “make up for” the TARP debacle, not a whole lot of other folks see it that way. Much of the rest of the country will see this bill as a “Democratic Party pet project bailout,” especially if there are zero Republicans on board. Just because most economists agree with Paul Krugman that the government must use deficit spending to create jobs does not mean that people won’t notice that the stimulus bill will create jobs largely through spending on projects that make liberals smile. After Bush won in 2000, we suffered through a period in which one party claimed a mandate and then passed all kinds of legislation that they had wanted to pass for many years but couldn’t. And the Republicans paid dearly for that strategy when many of those blatantly partisan policies went bust. Democrats should not make the same mistake by packing the stimulus with lots of goodies they love. If the economy doesn’t recover quickly (or if it does recover but there is lots of inflation), Democrats will never hear the end of the complaints about how they “wasted all that money on pet projects like Head Start when they rammed through that monstrosity of a stimulus bill.” This compromise provides some defense against that future argument.

Saturday, February 7, 2009

Hard To Do

I'm here in Washington D.C. with my old college roommate Nate, who is promoting an idea for a financial reform that isn't getting much attention; it's the kind of idea that you didn't have, but when you hear it, it has the retroactive obviousness of a good one. Namely, if one of the problems in the lead-up to the bailout was that companies were too big to fail, why aren't we trying to break them up?
Indeed, there doesn't seem to be much talk of it. I just googled "breaking up Citigroup," and here are the dates of the articles that were first listed:

7/21/08 247wallst.com
4/13/07 WSJ.com
9/21/05 Business Week.com
1/10/09 Finally, this year. But it's the Huffington Post.
1/14/09 Telegraph.co.uk - this refers to Citigroup's sale of its brokerage division into a joint venture with Morgan Stanley as a "breakup." But spinning off a division into a joint venture is not a breakup, especially when the two companies still entirely control the joint venture. This plan makes nothing less "too big to fail."

The rest of the page are 05's, 08's, and more joint venture.

Thursday, February 5, 2009

Credit Default Swap Market Insanity

I was cheered to hear a few days ago about a bill being introduced in Congress that would ban the sale of credit default swaps (CDS) to individuals or institutions that don’t own the underlying bond that the CDS is insuring. But after a lot of kicking and screaming from Wall St. lobbyists, Congress is now saying that the law would only apply for a limited amount of time. This cave to the commission-hungry CDS industry is extremely disappointing. Buying a CDS for a bond that you don’t own is basically a glorified form of gambling that also happens to give the “naked” CDS owner the incentive to undermine the integrity of the bond issuing company through rumor or massive short selling.

Think of a credit default swap as insurance on a house. (The house standing in for a bond that a company like General Electric would issue to raise money to built, say, a factory to make airplane engines). If you are the owner of a house (or GE bond), it makes perfect sense to insure that house in case it burns down (or, in the case of the bond, defaults on the interest payments). But on planet finance, I could call up a hedge fund or a company like AIG (before it imploded) and take out insurance on YOUR house. Why would I do such a silly thing? Well, because I think that any day now, someone might come along and burn down your house; or almost as good for me, I think that a whole bunch of other people will join me in thinking that your house is doomed, thereby driving up the price of insurance on your house and allowing me to sell the insurance I already bought at a profit. And since there is no limit to the amount of insurance that can be written on your house, the total value of the insurance contracts floating out there might eventually exceed the total value of the underlying house! This may seem all well and good for me (the “naked” insurance owner), but from the standpoint of the house owner, it is pure insanity. Looking out the window at a mass of people gambling on the price of insurance for your house, our pathetic little house owner might be excused for thinking that it’s only a matter of time before some loony throws a Molotov cocktail through their bedroom window.

And this is exactly what happened on planet finance. The Molotov cocktails came in the form of false rumors that [insert formerly prominent financial institution] "is on the verge of collapse." Financial evil-doers could also go another route to bring a company to its knees. Because the market for CDS on any given company is not all that big, the price of the CDS insurance could be easily driven higher by a strong wave of manipulative buying. This rise in price would then "signal" to the much bigger market in stock for that company that said company was in deep trouble (“Dude, there are people out there paying an arm and a leg for insurance on Frank's house—that sucker must be going up in flames any second now!). If that same manipulator who was driving up the price of CDS insurance also had a large bet that the stock in the company would go down, they could make a handsome profit when that stock tanked because of the CDS price “signal.” Many people think this type of manipulation contributed to the collapse of Lehman Brothers.

Over 80% of CDS contracts are bought by folks who don’t own the underlying bond. These are not “hedgers,” but gamblers. There is no justifiable need for these gamblers to use the CDS market to make bets against companies—short selling of the stock is a perfectly good substitute. It’s a shame Congress can’t stick to its guns and end this silly practice.

Wednesday, February 4, 2009

The last thing I'll say about Daschle

One Friday evening, when I was a staffer in the Texas Legislature, AT&T sponsored a little booze cruise on Town Lake in Austin. Open bar, food, music; a party for staffers. For some reason I couldn’t go – something kept me at work – but it wasn’t because I didn’t think it was ethical. I think most staffers didn’t think about the conflict of interest inherent in accepting what amounted to a gift, and those who did could shrug it off because of course nothing was asked of us, either explicitly or implicitly. But anyone who thought they wouldn’t feel obligated to sneak an AT&T lobbyist onto their boss’ schedule should the favor be asked for was, I think, kidding themselves.

I was just reading Harold Nicholson’s “Peacemaking 1919” for a class. Looking back from 1933 on the Paris Peace Conference, and trying to make sense of how they went so wrong when they started with such high-minded ideals, Nicholson writes “The historian, with every justification, will come to the conclusion that we were very stupid men. I think we were. Yet I also think that the factor of stupidity is inseparable from all human affairs. It is too often disregarded as an inevitable concomitant of human behavior; it is too often employed merely as a term of personal affront.”

Tom Daschle is a good man with the right ideals and ideas about what it means to be a public servant. I’m almost sure of it. But one of the biggest and most persistent fallacies that keeps a big democracy like ours from functioning properly is that when anti-democratic things happen it’s because people do irresponsible or unethical things, or because they intend to subvert the public interest.

The tax thing, as I’ve said, is pretty bewildering, but on its own probably shouldn’t have stopped his confirmation. The conflict of interest problem – having advised (and profited from) the companies who, as part of national health reform, must be convinced or forced to swallow some bitter pills – is the more problematic one. As much as I regret the blow to health reform and the loss of a high profile and influential champion, I think Obama is getting it right when he says that we can’t have two Americas, to borrow a phrase. The entrenchment of power in the hands of a ruling class – which is so much the cause of so many of our problems – is not dreamed of in shadowy places in the minds of bad men. It is the equilibrium condition of governments and those who run them and those who orbit around them; and it is what democracy was invented to combat. The rules are there not to protect us from the abuses of the worst, they are there to protect us from the abuses of the powerful. We’ve lost a good leader – the right person – in Tom Daschle, but this is probably the true face of change.

Tuesday, February 3, 2009

A Bad Deal

Daschle for Gregg. Yuck!

I feel exactly like I felt when the Yankees signed Mark Teixeira last month. It looked like it was a done deal that the Red Sox were going to get him, and I had mixed feelings. Of course, I thought, he would be a force in the middle of the lineup, but that was a huge price to pay. And then the Yankees got him, and I regreted upsetting the karma of the whole thing with my reservations in the first place.

Of course, we don't know who Daschle's replacement(s) will be. But unless it's someone like Podesta (thanks Justin), this is a body blow to health reform. I'm sad.

Is Hope for Humanity Bad for Theater?

"The Greeks said very, very extreme things in their tragedies. They were told the best thing was not to have been born, but, if that misfortune struck them, the next best thing was to die young. And they all said, 'Hurrah,' and went down to their city rejoicing. Why? Because they'd faced the extreme situation, not at Auschwitz but at the Theatre Royal… If you can't face Hiroshima in the theatre, you'll eventually end up in Hiroshima itself." —Edward Bond

"I do not think I’ve yet seen a play that can beat Sarah Kane’s sustained onslaught on the sensibilities for shear unadulterated brutalism." –The Evening Standard on Sarah Kane’s Blasted


Edward Bond and Sarah Kane represent two of the most unforgiving playwrights in the history of modern theater. They both, as Bond says in the above quote, put Hiroshima up on stage and make no apologies for what that might do to the audience. Good productions of their work are extremely powerful, even devastating. Ideally, audience members leave the theater shaken, with disturbing images seared into their brains. Bond’s play Saved caused an uproar in 1965 when he staged the stoning of a baby in its pram by a group of London youths. Kane’s Blasted, written in reaction to the ethnic cleansing in the former Yugoslavia, features on-stage anal rape, the eating of eyeballs, and cannibalism of a dead baby (among other horrors). It caused a similar sensation when it premiered in 1995.

I had the pleasure (if you can call it that) of seeing a production of Blasted at the Soho Rep in New York a few months ago. The following week, I saw Robert Woodruff’s production of Bond’s latest play, Chair, at Theater for a New Audience. As a believer in these two playwright’s take-no-prisoners style of theater, I wasn’t let down by these two powerful and disturbing productions.

But as I watched each play, I was surprised and a little embarrassed to find myself disaffected at times in spite of the shocking nature of what was happening on stage. While watching Blasted, there was a point at which I thought: “Okay, I get it: Hiroshima.” Not even Kane’s beautifully minimalist and poetic language could give me reason enough to care about what was happening to the characters.

Upon further reflection on my experience, and after a bit of googling, I came to this paradoxical conclusion: it’s difficult for Kane and Bond to hold the audience engaged because the playwrights tell their stories from a point of view that maintains unyielding faith in the potential for human goodness and human transcendence. Their anger at how humans fail to live up to these lofty expectations leads them to show in their plays how humans (and the governmental institutions human create) mess everything up. By showing these horrors, they might help humanity to choose a less-cruel path in the future. They believe in preventing the next Hiroshima…through theater.

But this form has its limits once the audience catches on to the underlying idea. Kane in particular gets into trouble when she does too much result-oriented showing of what a corrupted human soul looks like and not enough showing of how humans fight against that corruption. Seeing characters struggle to maintain their humanity is much more interesting—and ultimately more human—than seeing characters, who have already succumbed to the evils within and without, go about destroying each other and the world.

Looking at Samuel Beckett, the godfather of bleak existence, will help with what I’m getting at with Bond and Kane. Bond called Beckett “basically antihuman.” I suspect Bond believes this because the worlds that Beckett’s characters inhabit leave no potential for humans to find meaning in life and there is zero chance that the characters might create a brighter future for themselves. But by creating the huge obstacle of a dark lifeless meaningless world, Beckett gives his characters the opportunity to push against that world and TRY to create an inhabitable space in which to occupy their time (although we know all along it’s quite hopeless). Winnie, in Beckett’s Happy Days, may be buried up to her neck in sand the entire play, but that sure as heck won’t stop her from going about her daily business with as much cheer as she can muster. This allows Beckett to humorously and tragically portray Winnie in all her absurd human glory. Winnie says, "That is what I find so wonderful. The way man adapts himself. To changing conditions." And that is what the audience finds so funny and so interesting: the way Winnie pushes against the obvious reality that she is buried neck deep in sand.

Beckett shows us humans trying to cope with an empty and destroyed world, while Bond and Kane—because they don’t accept Becket’s worldview that life is essentially meaningless—tend to show the audience the process or the result of the world being destroyed. Winnie seems all too pathetically human; but the soldier in Blasted, who has been turned into a monster by years of endless wars, is virtually unrecognizable as human, and therefore less demanding of our attention and sympathy.

Although their worldviews may clash, all three playwrights are remarkable for how they passionately express to the audience an honest vision of what the world looks like through their eyes (which ought to be the driving purpose behind any work of art). Regardless of whether or not these plays help us fend off the coming Hiroshimas, I’m grateful to the intrepid theater artists who choose to bring these three playwright’s visions to life on stage.

Monday, February 2, 2009

In case you thought at first glance that Luvh's post was about "Taxes"

I’m sure that I speak for all northeastern liberal elite Americans when I say that every year, when I file my tax return, I think to myself “I’m a pretty savvy fellow, but I’m sure there are errors here – how can most people be expected to get this right?”

I always figured there was a logical answer to that question that I just hadn’t thought of. Well, Tim Geithner and Tom Daschle have proven that one of two things must be true: either there isn’t, or the impunity with which America’s ruling class believes it can flout the rules and suffer no consequences is truly absolute.

Geithner’s case is the more troubling one. After all, Daschle only wants to run the largest health care system in the world. Geithner wants to run the largest treasury in the world. Only one of those is actually responsible for collecting taxes.

Now look, I’m sure Theo Epstein can’t hit a curveball, and as tempting as it is to use the ability to fill out one’s tax returns as a proxy for one’s ability to oversee a fair and efficient system of taxation, that’s a specious link. But I’ve confronted this self-employment tax issue myself, and while I recall finding it both confusing and surprising, and maybe even upsetting, I am here to tell you that I would have known I had done something wrong had I not paid it. More importantly, I’m not an accountant, nor did I hire one – as both Geithner and Daschle did – to do their taxes.

More more importantly, there’s no way these guys don’t have this moment in mind when they file their tax returns, so they should have all the incentive they need to get it done right, and not to cut corners. Daschle ain’t hurting for money (though I appreciate and respect the fact that public service entails a financial sacrifice), so why imperil a future confirmation with something like this? If the incentive to figure out the right answer is there, and the wherewithal to figure out the right answer is there, but lo and behold, they end up with the wrong answer, just what on earth are we supposed to think?

I want both Geithner and Daschle in their jobs, but I refer you to Chris Hayes’ column in this week’s Nation, in which he uses this first set of Obama appointments (which should be used to turn change from a campaign slogan into a governing philosophy) to illustrate the power of the Washington political establishment – the entrenchment of the governing class.

I don’t know what to think. Of course I believe in our man just as much as always; I would have to have been tremendously na├»ve to let this get me down. I would have to have thought that Obama could succeed by sweeping self-interest and the self-interested right out of the beltway, rather than by deftly cultivating their support where possible and by using his tremendous popular mandate to apply pressure when necessary. But it stinks to high heaven. Pay your damn taxes.

Taxi!

Interesting L.A. transportation update: It is held by many Angelenos that hailing a cab in L.A. is illegal. The actual illegality at play here is the prohibition against stopping in red zones, something that a cab picking up or dropping off passengers must of necessity do. Cabbies in fact have gotten citations for this in the past (not because of draconian cops, but rather out of concern for keeping traffic moving), and as a result, don't rove around looking for fares.

No longer - at least in downtown and Hollywood. Starting today, in an attempt to foster a "street hail" culture, the city is relaunching a "Hail a Taxi" program in those neighborhoods. The program essentially is a suspension of no stoppage rules (with regard to taxis).

Will it work? When the program was initially launched in July 2008, not enough drivers and passengers knew that it was now okay to hail a cab. Customers didn't have the expectation that they could just go out on the street and get one, and cabs didn't want to waste gas patrolling the streets for customers that weren't out there. Now the city is educating drivers about the program (including giving them lunch boxes promoting it), and is starting a limited public outreach program to educate customers. Ultimately, success will come down to demand, of which I see two sources: small errand-like trips confined to those neighborhoods (say, for shopping), and drunk people. The advantage of a cab to a drunk person is clear, unclear though it may be to the actual drunk person. As for errand runners, I don't know. Maybe I'd like to avoid the headache of parking my own car, but I'd be paying more per mile traveled. And that's sort of the issue here - it's not like cabs are going to become a commuting strategy, so no one's going to give up their car. When you're comparing them with public transportation, cabs offer more convenience that justifies the premium, but they don't have much of a convenience edge over driving your personal car besides avoiding parking fees and being able to talk on your phone without using a hands-free device.

Economically, this could be a boon, I suppose, especially if there really is some added convenience I'm not thinking of and local transportation becomes somehow less of a headache. Carbonically, it seems like kind of a wash, although if there are new shopping trips generated by this, then it's probably not a step forward. And finally, traffically - traffic considerations, after all, are what gave us our status quo. On the upside, there were no reports of added congestion stemming from the program in July. On the downside, the program was so small then that it didn't have any sort of impact on anything.

Thanks Pickle Reader SPM for the tip.