Sunday, March 13, 2005

Interesting Juxtapositions at the Times Today...

First, over at the Book Review...

'Every Man a Speculator': Follow the Money

Which phrase best describes Wall Street: (a) a den of thieves; (b) the engine room of innovation; (c) a conspiracy of oligarchs; (d) Babylon on the Hudson (e) the yellow brick road to a property-owning democracy?

In his rollicking history over two centuries, Steve Fraser nominates all of the above. He is notably assiduous. He plots the roller coasters of boom and bust from the panics of 1792, 1837, 1873 and 1893, through the Jazz Age and the Great Depression to the ''socially negligent and narcissistic'' second Gilded Age of the Reagan 80's and on to today's ''shareholder nation.'' He examines the biographies of the icons and the rap sheets of the scoundrels, but he also eyes the Street in succeeding eras through the critical prisms of literature and the movies. Yes, Gordon (''greed is good'') Gekko rubs shoulders with J. P. Morgan.

This is not so much a financial as a cultural history.

And, from the same Book Review...this neocon essay....

This year is the 100th anniversary of the most famous sociological tract ever written, ''The Protestant Ethic and the Spirit of Capitalism,'' by Max Weber. It was a book that stood Karl Marx on his head. Religion, according to Weber, was not an ideology produced by economic interests (the ''opiate of the masses,'' as Marx had put it); rather, it was what had made the modern capitalist world possible. In the present decade, when cultures seem to be clashing and religion is frequently blamed for the failures of modernization and democracy in the Muslim world, Weber's book and ideas deserve a fresh look.

Weber's argument centered on ascetic Protestantism. He said that the Calvinist doctrine of predestination led believers to seek to demonstrate their elect status, which they did by engaging in commerce and worldly accumulation. In this way, Protestantism created a work ethic -- that is, the valuing of work for its own sake rather than for its results -- and demolished the older Aristotelian-Roman Catholic doctrine that one should acquire only as much wealth as one needed to live well. In addition, Protestantism admonished its believers to behave morally outside the boundaries of the family, which was crucial in creating a system of social trust.

The Weber thesis was controversial from the moment it was published. Various scholars stated that it was empirically wrong about the superior economic performance of Protestants over Catholics; that Catholic societies had started to develop modern capitalism long before the Reformation; and that it was the Counter-Reformation rather than Catholicism itself that had led to economic backwardness. The German economist Werner Sombart claimed to have found the functional equivalent of the Protestant ethic in Judaism; Robert Bellah discovered it in Japan's Tokugawa Buddhism.

What held traditional China and Japan back, we now understand, was not culture, but stifling institutions, bad politics and misguided policies. Once these were fixed, both societies took off. Culture is only one of many factors that determine the success of a society. This is something to bear in mind when one hears assertions that the religion of Islam explains terrorism, the lack of democracy or other phenomena in the Middle East.

At the same time, no one can deny the importance of religion and culture in determining why institutions work better in some countries than in others. The Catholic parts of Europe were slower to modernize economically than the Protestant ones, and they took longer to reconcile themselves to democracy...

But it goes without saying that religion and religious passion are not dead, and not only because of Islamic militancy but also because of the global Protestant-evangelical upsurge that, in terms of sheer numbers, rivals fundamentalist Islam as a source of authentic religiosity. The revival of Hinduism among middle-class Indians, or the emergence of the Falun Gong movement in China, or the resurgence of Eastern Orthodoxy in Russia and other former Communist lands, or the continuing vibrancy of religion in America, suggests that secularization and rationalism are hardly the inevitable handmaidens of modernization...

Europe today is a continent that is peaceful, prosperous, rationally administered by the European Union and thoroughly secular. Europeans may continue to use terms like ''human rights'' and ''human dignity,'' which are rooted in the Christian values of their civilization, but few of them could give a coherent account of why they continue to believe in such things.

This from the guy who said history ended because the Soviets had been "beaten." Somewhere in that equivocation is a knee-jerk American triumphalism. Take it from me: most of the Europeans I know wouldn't get tongue-tied discussnig human rights and human dignity, whereas many Americans I know want to shift the subject away from those topics; especially in conjunction with wealth and its distribution in American society.

And I almost forgot this one in the magazine....

Our Currency, Your Problem

The dollar pessimists argue that the Asian central banks are already dangerously overexposed both to the dollar and the U.S. bond market. Sooner or later, they have to get out -- at which point the dollar could plunge relative to Asian currencies by as much as a third or two-fifths, and U.S. interest rates could leap upward. (When the South Korean central bank recently appeared to indicate that it was shifting out of dollars, there was indeed a brief run on the U.S. currency -- until the Koreans hastily issued a denial.)

Are the pessimists right? The U.S. current account deficit is now within sight of 6 percent of G.D.P., and net external debt stands at around 30 percent. The precipitous economic history of Latin America shows that an external-debt burden in excess of 20 percent of G.D.P. is potentially dangerous....

How long can the Chinese go on financing America's twin deficits? The answer may be a lot longer than the dollar pessimists expect. After all, this form of tribute is much less humiliating than those exacted by the last Anglophone empire, which occupied China's best ports and took over the country's customs system (partly in order to flood the country with Indian opium). There was no obvious upside to that arrangement for the Chinese; the growth rate of per capita G.D.P. was probably negative in that era, compared with 8 or 9 percent a year since 1990.

Meanwhile, the United States may be discovering what the British found in their imperial heyday. If you are a truly powerful empire, you can borrow a lot of money at surprisingly reasonable rates. Today's deficits are in fact dwarfed in relative terms by the amounts the British borrowed to finance their Global War on (French) Terror between 1793 and 1815. Yet British long-term rates in that era averaged just 4.77 percent, and the pound's exchange rate was restored to its prewar level within a few years of peace.

It is only when your power wanes -- as the British learned after 1945 -- that owing a fortune in your own currency becomes a real problem. As opposed, that is, to someone else's problem.

Or, it may just be wishful thinking on a necon's part, no? I tend to be in the latter camp; the US has already devalued previously; evan after devaluation of the pound in the early 50's it was still more than twice what it is now relative to the dollar.

The smart money is always, always on empires not lasting.


Under the Bush administration, the federal government has aggressively used a well-established tool of public relations: the prepackaged, ready-to-serve news report that major corporations have long distributed to TV stations to pitch everything from headache remedies to auto insurance. In all, at least 20 federal agencies, including the Defense Department and the Census Bureau, have made and distributed hundreds of television news segments in the past four years, records and interviews show. Many were subsequently broadcast on local stations across the country without any acknowledgement of the government's role in their production.

This winter, Washington has been roiled by revelations that a handful of columnists wrote in support of administration policies without disclosing they had accepted payments from the government. But the administration's efforts to generate positive news coverage have been considerably more pervasive than previously known. At the same time, records and interviews suggest widespread complicity or negligence by television stations, given industry ethics standards that discourage the broadcast of prepackaged news segments from any outside group without revealing the source...

Why would you need to spin news this way if your message could be gotten out by having it tell iteslf? All of which add up to one thing: despite the denials from some quarters, the power of conservatives is ephemeral, as is the notion of empire.

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