Wall St. Panic

OP-ED COLUMNIST

Panic of the Plutocrats

By 
Published: October 9, 2011

It remains to be seen whether the Occupy Wall Street protests will change America’s direction. Yet the protests have already elicited a remarkably hysterical reaction from Wall Street, the super-rich in general, and politicians and pundits who reliably serve the interests of the wealthiest hundredth of a percent.

Fred R. Conrad/The New York Times

And this reaction tells you something important — namely, that the extremists threatening American values are what F.D.R. called “economic royalists,” not the people camping in Zuccotti Park.

Consider first how Republican politicians have portrayed the modest-sized if growing demonstrations, which have involved some confrontations with the police — confrontations that seem to have involved a lot of police overreaction — but nothing one could call a riot. And there has in fact been nothing so far to match the behavior of Tea Party crowds in the summer of 2009.

Nonetheless, Eric Cantor, the House majority leader, has denounced “mobs” and “the pitting of Americans against Americans.” The G.O.P. presidential candidates have weighed in, with Mitt Romney accusing the protesters of waging “class warfare,” while Herman Cain calls them “anti-American.” My favorite, however, is Senator Rand Paul, who for some reason worries that the protesters will start seizing iPads, because they believe rich people don’t deserve to have them.

Michael Bloomberg, New York’s mayor and a financial-industry titan in his own right, was a bit more moderate, but still accused the protesters of trying to “take the jobs away from people working in this city,” a statement that bears no resemblance to the movement’s actual goals.

And if you were listening to talking heads on CNBC, you learned that the protesters “let their freak flags fly,” and are “aligned with Lenin.” Continue reading

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An Entrepreneur Creating Chances at a Better Life

Laurie sent this to me from the NY Times. I love people like this who make a difference because they see helping people as an opportunity.

September 26, 2011

An Entrepreneur Creating Chances at a Better Life

 

By A Conversation With Paul R. Polak

If necessity is the mother of invention, Paul Polak is one of its fathers.

For 30 years Dr. Polak, a 78-year-old former psychiatrist, has focused on creating devices that will improve the lives of 2.6 billion people living on less than $2 a day. But, he insists, they must be so cheap and effective that the poor will actually buy them, since charity disappears when donors find new causes.

Inventing a new device is only the beginning, he says; the harder part is finding dependable manufacturers and creating profitable distributorships. The “appropriate technology” field, he argues, is “dominated by tinkerers and short of entrepreneurs.”

His greatest success has been a treadle pump that lets farmers raise groundwater in the dry season, when crops fetch more money. He has sold more than two million, he said.

He also helped develop a $25 artificial knee and a $400 hospital lamp to save newborns with life-threatening jaundice. He is field-testing a reprogrammable “talking poster” that gives mini-lectures in local languages, with pictures, on topics as varied as rice-planting and hand-washing. And he has an ambitious project to create franchises through which Indian village shopkeepers will purify polluted water and sell it. We spoke at a convention of young inventors in Arlington, Va.; what follows is an edited version of our conversation.

Q. What in your past led you into this unusual specialty?

A. My dad comes from a peasant background in Czechoslovakia; he lived in a house with the people upstairs and animals downstairs, so I have an innate affinity for peasants. Also, we were Jewish, and in 1938 refugees were streaming across the border from Germany with broken heads.

Pretty much anybody could see what was coming. My dad said, “There’s going to be hell to pay soon,” and made plans to escape. But when he tried to tell our family and friends, they said things like “But what would we do with the furniture?” I got from him an eye for seeing the obvious.

He also had an entrepreneur’s streak, which I inherited. He had a high school education, but he started a plant nursery and was doing very well. He sold everything at 10 cents on the dollar, and we escaped to Canada.

I went to medical school, got a degree in psychiatry, and in 1959 I moved to Denver and got a job at Fort Logan Mental Health Center. In my spare time, I invested in real estate. I bought mismanaged apartment buildings. I also owned a small oil company drilling stripper wells. I invented a pump jack for the oilfield industry — I’ve always knocked around in that kind of stuff. By 1981, I’d worked for 22 years as a psychiatrist, and I’d cleared about three million bucks, mostly in real estate.

Q. What got you interested in poverty?

A. I was one of the pioneers in treating people more effectively in real-life settings. The conventional assumption is that patients are admitted to psychiatric institutions because a therapist or family member says they’re mentally ill. But I talked to a lot of our patients as if they were customers, and they defined something going on in their family or workplace as the primary reason they were there. So I started going into patients’ homes or workplaces.

At the time, there was a lot of emphasis on making the wards a lot more like a family. I came to the astonishing conclusion that the most familylike setting was a family. So we recruited nine healthy private families and admitted acutely ill patients to them.

It was much more effective. If you’re a guest in somebody’s nice home, you ain’t going to break the furniture. We provided the support — the physicals, the lab tests, rapid tranquilization. But the deinstitutionalization model that followed that dumped people out with no follow-up was in some cases worse than being institutionalized.

I also noticed that a lot of these people were very poor, and that had a big impact on their symptoms. That got me interested in poverty.

Q. And in third-world poverty?

A. My wife’s a Mennonite, and they had programs in Bangladesh. It had hit me between the eyes that homeless people in Denver were living on $500 a month, but there were people overseas living on $30 a month. So I took a trip to Bangladesh.

Some farmers were using hand pumps, but biomechanically, that’s a lousy way to raise water. A Mennonite guy had invented a rower pump that would pull up enough to water a half-acre of vegetables. They had installed 2,000 over five years, and those farmers seemed to be making a lot of money, so I said, “Why don’t we do a project, with an objective of selling 25,000 a year?”

We hit that pretty quickly. One or two Mennonites objected — they considered the idea of selling something to poor people immoral. But we kept at it, and then we found the treadle pump. It was brilliantly simple, it could be manufactured by local workshops, and a local driller could dig a 40-foot well and install it for $25. Studies showed that farmers made $100 in one season on that investment.

We talked to 75 little welding shops where they make things like bedsprings, and jawboned them into making treadle pumps. We went to people who sold things like toilet bowls, and cut a deal with them to be dealers. We trained 3,000 tinkerers to be well-drillers. We hired troubadours to write songs about treadle pumps, and we’d pass out leaflets when they performed. We even produced a 90-minute Bollywood movie.

Q. About treadle pumps?

A. Yeah. People in these little villages couldn’t read or write. We hired the top director in Bangladesh and two top actors. It cost us 25 grand of our Canadian government grant. The plot was “boy meets girl, but they can’t marry because her father can’t afford a dowry.” Then she falls into the hands of dowry bandits, then there’s a near-suicide. By now, with lots of singing and dancing, you’re 60 minutes in.

At the climactic moment, the movie stops. Our dealers get customers up on model pumps. The movie resumes, the father buys a pump, makes enough for the dowry, they live happily ever after. Somewhat cheesy, but we bought a van with a video setup, and took it to villages — a typical open-air audience was 2,000 to 5,000 people.

Q. What’s the biggest mistake aid agencies make?

A. As we were developing our pump, the World Bank was subsidizing deep-well diesel pumps that could cover 40 acres. The theory was that you’d get a macroeconomic benefit, but it was also very destructive to social justice. The big pumps were handed out by government agents; the government agent was bribeable. The pump would go to the biggest landholder, and he’d become a waterlord.

Q. There have been some well-known failures in this field, like One Laptop Per Child and the Playpump. Can you say why?

A. The laptop was a middle-class device that doesn’t communicate with people who don’t read and write. It cost $100, plus it used the charity model — buy two, give one away. The Playpump, which was a children’s merry-go-round that pumps water, cost $11,000. Women in Africa walk for hours to a well, and then jiggle the pump handle for 60 seconds. This replaces the jiggling. How important is that? And they break. For $11,000, you could dig five wells and eliminate the walk.

Q. What are your principles for success?

A. In 1981, I said, “I’m going to interview 100 $1-a-day families every year, come rain or shine, and learn from them first.”

Over 28 years, I’ve interviewed over 3,000 families. I spend about six hours with each one — walking with them through their fields, asking what they had for breakfast, how far their kids walk to school, what they feed their dog, what all their sources of income are. This is not rocket science. Any businessman knows this: You’ve got to talk to your customers.

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Why I want to raise chickens

I can’t eat eggs because my cholesterol is too high. I can’t kill anything, except maybe mosquitoes, but I do love eating chicken. It’s like shrimp – I could probably eat them both every day. Or maybe on alternating days.

Anyway, here’s an opinion piece from the NY Times by Verlyn Klinkenborg that Laurie really likes, she showed it to me, I really liked it and now I’m sharing it.

And, soon, we will have a chicken coop.

EDITORIAL | THE RURAL LIFE

Innocent Parties

By 
Published: August 19, 2011

In the past few weeks I’ve hawk-proofed my chicken yard. It’s now covered by a net, as though a trapeze artist who missed his hold might come plummeting into it. I’ve also fox-proofed the yard with fencing, but I forgot about weasels because they’ve never given me any trouble. Last week, I walked out to the yard and there, in the chicken house, lay the bodies of 24 pullets. Instead of the early morning clatter of a chicken flock, silence greeted me. It was a characteristic weasel kill — all the birds dead but none removed or eaten.

Like others who raise animals, I feel an intense obligation to keep my birds safe. To say that the pullets lying dead looked terribly innocent is to misjudge the event. The weasel was innocent, too — only obeying its instinct to kill moving prey. I felt guilty for letting my pullets down. So I’ve been laying new fencing — a tight mesh this time — on top of the fox fence. My new fear is army ants, stealing their way from the tropics into my poultry compound.

In the silence of those corpses, I found myself wondering why, to me, it seems so essential to raise chickens. The eggs are nice, though these birds were a dozen weeks away from laying. What I’m really harvesting, I realized, is behavior. Chickens are instinct made visible — as they scratch the ground or track a fly with their eyes — instinct I can watch right up close. And doing so, I notice that the instincts that make me human are imperceptible to me.

It seems wholly human to deny that instinct has much to do with who we are, though I know that can’t be true. Instead of trying to discern it in myself, it’s easier to watch the instincts so palpable in the chickens. My only instinct, now, is to start all over again, with the chicks that will be coming this week. 

A version of this editorial appeared in print on August 20, 2011, on page A18 of the New York edition with the headline: Innocent Parties.
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The Getaway Car

I think this is a great piece of writing. It captures the relationship between a father and daughter, and for me, the sadness and inevitability of separation.

The Getaway Car

Dru Donovan for The New York Times Father and daughter take a break off Highway 101 in Sausalito before reaching the Golden Gate Bridge.

By JONATHAN RABAN
Published: June 10, 2011

For a long time now, I’ve been looking forward to this year with apprehension: 2011 is when my daughter, Julia, now 18, will undertake that very American rite of passage and “go away to college” — a phrase whose operative word is “away.” We live in Seattle, and in the Pacific Northwest, “collegeland,” as my daughter calls it, is centered in New England and New York, where most of her immediate friends will be going in September.

Julia Raban for The New York Times Near Willapa Bay, Washington.


Julia Raban for The New York Times Crossing the Astoria-Megler Bridge over the Columbia River.


Julia Raban for The New York Times After dinner in Yachats, Oregon.


Julia Raban for The New York Times Near Jenner, California.


Julia Raban for The New York Times The motel in Laytonville, California.

Though I’ve lived for 21 years in the U.S., I still have an Englishman’s stunted sense of distance. I think of 300 miles as a long journey, and all through last summer and fall, I would wake at 4 a.m. to sweat over the prospect of losing my daughter — my best companion, my anchor to the United States, the person with whom I’ve had the longest, most absorbing relationship of my adult life — to some unimaginably distant burg on the East Coast. So I was as elated as she was when she heard she’d been accepted by Stanford, her first choice. Same coast, same time zone — Within driving distance was the thought I clung to.

Interstate highways dull the reality of place and distance almost as effectively as jetliners do: I loathe their scary monotony. I wanted to make palpable the mileage that will stretch between us come September and feel on my own pulse the physical geography of our separation. We would take the coast road and mark out the wriggly, thousand-mile track that leads from my workroom to her future dorm in California.

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What Obama Wants – Paul Krugman

OP-ED COLUMNIST

What Obama Wants

By 
Published: July 7, 2011

On Thursday, President Obama met with Republicans to discuss a debt deal. We don’t know exactly what was proposed, but news reports before the meeting suggested that Mr. Obama is offering huge spending cuts, possibly including cuts to Social Security and an end to Medicare’s status as a program available in full to all Americans, regardless of income.

Fred R. Conrad/The New York Times

Paul Krugman

Obviously, the details matter a lot, but progressives, and Democrats in general, are understandably very worried. Should they be? In a word, yes.

Now, this might just be theater: Mr. Obama may be pulling an anti-Corleone, making Republicans an offer they can’t accept. The reports say that the Obama plan also involves significant new revenues, a notion that remains anathema to the Republican base. So the goal may be to paint the G.O.P. into a corner, making Republicans look like intransigent extremists — which they are.

But let’s be frank. It’s getting harder and harder to trust Mr. Obama’s motives in the budget fight, given the way his economic rhetoric has veered to the right. In fact, if all you did was listen to his speeches, you might conclude that he basically shares the G.O.P.’s diagnosis of what ails our economy and what should be done to fix it. And maybe that’s not a false impression; maybe it’s the simple truth.

One striking example of this rightward shift came in last weekend’s presidential address, in which Mr. Obama had this to say about the economics of the budget: “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”

That’s three of the right’s favorite economic fallacies in just two sentences. No, the government shouldn’t budget the way families do; on the contrary, trying to balance the budget in times of economic distress is a recipe for deepening the slump. Spending cuts right now wouldn’t “put the economy on sounder footing.” They would reduce growth and raise unemployment. And last but not least, businesses aren’t holding back because they lack confidence in government policies; they’re holding back because they don’t have enough customers — a problem that would be made worse, not better, by short-term spending cuts.

In his brief remarks after Thursday’s meeting, by the way, Mr. Obama seemed to reiterate the Herbert Hooveresque view that deficit reduction is what we need to “grow the economy.”

People have asked me why the president’s economic advisers aren’t telling him not to believe in the confidence fairy — that is, not to believe the assertion, popular on the right but overwhelmingly refuted by the evidence, that slashing spending in the face of a depressed economy will magically create jobs. My answer is, what economic advisers? Almost all the high-profile economists who joined the Obama administration early on have either left or are leaving.

Nor have they been replaced. As The Wall Street Journal recently noted, there are a “stunning” number of vacancies in important economic posts. So who’s defining the administration’s economic views?

Some of what we’re hearing is presumably coming from the political team, whose members seem to believe that a move toward Republican positions, reminiscent of former President Bill Clinton’s “triangulation” in the 1990s, is the key to Mr. Obama’s re-election. And Mr. Clinton did, indeed, rebound from a big defeat in the 1994 midterms to win big two years later. But some of us think that the rebound had less to do with his rhetorical move to the center than with the five million jobs the economy added over those two years — an achievement not likely to be repeated this time, especially not in the face of harsh spending cuts.

Anyway, I don’t believe that it’s all political calculation. Watching Mr. Obama and listening to his recent statements, it’s hard not to get the impression that he is now turning for advice to people who really believe that the deficit, not unemployment, is the top issue facing America right now, and who also believe that the great bulk of deficit reduction should come from spending cuts. It’s worth noting that even Republicans weren’t suggesting cuts to Social Security; this is something Mr. Obama and those he listens to apparently want for its own sake.

Which raises the big question: If a debt deal does emerge, and it overwhelmingly reflects conservative priorities and ideology, should Democrats in Congress vote for it?

Mr. Obama’s people will no doubt argue that their fellow party members should trust him, that whatever deal emerges was the best he could get. But it’s hard to see why a president who has gone out of his way to echo Republican rhetoric and endorse false conservative views deserves that kind of trust.

A version of this op-ed appeared in print on July 8, 2011, on page A23 of the New York edition with the headline: What Obama Wants.
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Conservative David Brooks slams Republicans

I’m hoping the Republicans ignore what David Brooks says, because he’s right. I rarely agree with him. I’m posting this because he points out the sheer lunacy of GOP members who vote against raising the debt ceiling without raising taxes. What that really means is increasing taxes on people who can afford it and should pay more, and closing tax loopholes for corporations and the rich who don’t need them. Hypocritically, the Republicans are warming to the idea of raising revenues. But don’t you dare call it raising taxes.

OP-ED COLUMNIST

The Mother of All No-Brainers

By 
Published: July 4, 2011

The Republicans have changed American politics since they took control of the House of Representatives. They have put spending restraint and debt reduction at the top of the national agenda. They have sparked a discussion on entitlement reform. They have turned a bill to raise the debt limit into an opportunity to put the U.S. on a stable fiscal course.


Josh Haner/The New York Times

David Brooks

Republican leaders have also proved to be effective negotiators. They have been tough and inflexible and forced the Democrats to come to them. The Democrats have agreed to tie budget cuts to the debt ceiling bill. They have agreed not to raise tax rates. They have agreed to a roughly 3-to-1 rate of spending cuts to revenue increases, an astonishing concession.

Moreover, many important Democrats are open to a truly large budget deal. President Obama has a strong incentive to reach a deal so he can campaign in 2012 as a moderate. The Senate majority leader, Harry Reid, has talked about supporting a debt reduction measure of $3 trillion or even $4 trillion if the Republicans meet him part way. There are Democrats in the White House and elsewhere who would be willing to accept Medicare cuts if the Republicans would be willing to increase revenues.

If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred million dollars of revenue increases.

A normal Republican Party would seize the opportunity to put a long-term limit on the growth of government. It would seize the opportunity to put the country on a sound fiscal footing. It would seize the opportunity to do these things without putting any real crimp in economic growth.

The party is not being asked to raise marginal tax rates in a way that might pervert incentives. On the contrary, Republicans are merely being asked to close loopholes and eliminate tax expenditures that are themselves distortionary.

This, as I say, is the mother of all no-brainers.

But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.

The members of this movement do not accept the logic of compromise, no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no.

The members of this movement do not accept the legitimacy of scholars and intellectual authorities. A thousand impartial experts may tell them that a default on the debt would have calamitous effects, far worse than raising tax revenues a bit. But the members of this movement refuse to believe it.

The members of this movement have no sense of moral decency. A nation makes a sacred pledge to pay the money back when it borrows money. But the members of this movement talk blandly of default and are willing to stain their nation’s honor.

The members of this movement have no economic theory worthy of the name. Economists have identified many factors that contribute to economic growth, ranging from the productivity of the work force to the share of private savings that is available for private investment. Tax levels matter, but they are far from the only or even the most important factor.

But to members of this movement, tax levels are everything. Members of this tendency have taken a small piece of economic policy and turned it into a sacred fixation. They are willing to cut education and research to preserve tax expenditures. Manufacturing employment is cratering even as output rises, but members of this movement somehow believe such problems can be addressed so long as they continue to worship their idol.

Over the past week, Democrats have stopped making concessions. They are coming to the conclusion that if the Republicans are fanatics then they better be fanatics, too.

The struggles of the next few weeks are about what sort of party the G.O.P. is — a normal conservative party or an odd protest movement that has separated itself from normal governance, the normal rules of evidence and the ancient habits of our nation.

If the debt ceiling talks fail, independents voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern.

And they will be right

 

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