Thursday, May 31, 2007

Strict Parenting

Yesterday's Washington Post carried yet another article on the woes of declining housing prices, entitled "An ATM That's Out of Money." People are discovering that home values don't always increase. Not much new here that hasn't already been said many times - among its tidbits is the observation that economists are increasingly dividing into camps of either "the slightly pessimistic" or "the highly pessimistic" - but, I was taken by the description of one of the concrete effects of this decline on one Washington D.C. family. According to the article, the Woodhull family - who have been spending home equity on home improvement projects and additional real estate like there's no tomorrow (oops, turns out there IS a tomorrow!) - recently had to hold a family meeting in which the parents disclosed some bad news to the children. As stated in the article, "Now the pot is dry. The Woodhulls are feeling squeezed by bills, but with interest rates up and home prices down, they're reluctant to touch their home equity again. They called their six children into a family meeting recently, and Amy laid down new rules: No more impulse purchases or frivolous shopping trips. 'We're going to have to save our pennies,' she declared."

Now, this is pretty admirable - teaching a bit of financial discipline. But, it seems to be a discipline forced by necessity born of overextension, not choice and example. It is implied that this (representative) family has been engaging in all kinds of impulse purchases and frivolous shopping trips until now. The children - some nearly college age - are now being taught that you can't always get what you want. They are stand-ins for most of our 25-year and younger set. Too bad for them!

The economy will now increasingly force such discipline upon people and the nation as a whole, but it will not come easily after decades of binge spending. The Woodhulls have lots of bills - "multiple mortgage, insurance and property tax payments for their four properties, as well as costs of upkeep and utilities. Plus, they have six children to feed, dress, educate and care for." Their bills are a microcosm of the national debts we owe, and illustrate how such debt insidiously arose from a momentary spending spree by one generation at the expense of another. Writ large, we are about to tell future generations that they can't act like we have. Indeed, they are going to have it much worse. Sorry about that! We used up all the good stuff - the temperate air, the water, the petroleum, the topsoil. But, good luck anyway! Learn some discipline, kids!

Our predicament was summed up in a candid moment when Amy admitted that the spending binge was going to make it difficult to provide for their children's future: "'Jeez, we've got all these payments every month,' said Amy, 48, a radio network executive. 'Now, when I look at sending my son to college in a year, I can't refinance again. Rates aren't falling. . . . I'm kind of stuck. What are my options? Sell a property into a down market? I'm really feeling quite caught -- like panicked caught.'"

As our growth economy grinds down - as we discover that our 50-year post-war party was fueled by a one-time reckless fossil fuel burn out - increasing numbers of families will feel blindsided in just this sort of way. Our "wealth" is increasingly born of leverage and debt, with the to-date justified expectation that the wager would repay amply with the passing years. As the air begins to leak from the liquidity-inflated real-estate and leveraged hedge fund markets, the sources of actual wealth will need to be rediscovered - most immediately in the form of savings, discipline, and real work, and thereafter in the resources built and shared in concrete communities. Is this a future we have been preparing our children for? Or, more likely, is it the lesson that challenging and even dismal events of the future will end up teaching our children for us? If so, it will be a painful lesson, and a sad legacy that their parents and the greatest generation will have left them.

Tuesday, May 29, 2007

Get a Clue

In an article in yesterday's New York Times Magazine, a former Princeton colleague, Gary Bass, discusses the controversy over a recent book by economist Bryan Caplan entitled "The Myth of the Rational Voter: Why Democracies Choose Bad Politics." In the article Bass recounts the basic thesis, and controversy arising from, Caplan's book. According to Bass, Caplan contends that democratic voters systematically make bad decisions - in this case, in the economic policy domain. As Bass summarizes, "Caplan's own evidence for the systematic folly of voters comes from a 1996 survey comparing the views of Ph.D. economists and the general public. To the exasperation of libertarian-minded Caplan, most Americans do not think like economists. They are biased against free markets and against trade with foreigners." Bass proceeds to relate a similar argument made by Scott L. Althaus, a political scientist: Althaus "finds that if the public were better informed, it would overcome its ingrained biases and make different political decisions. According to his studies, such a public would be more progressive on social issues like abortion and gay rights, more ideologically conservative [!!] in preferring markets to government intervention and less isolationist but more dovish in foreign policy."

Let's pause for a moment to bask in the unbiased views of these academic experts. Objectively, we are told by these experts, it is irrational and unjustified to harbor views that are critical of free markets, to disapprove of abortion and gay marriage, and to believe that a polity should disapprove of military adventurism. These positions are wholly without bias of any kind. For the economist, there are no philosophic or moral assumptions at play in the belief that growth and the production of more stuff is the object and aim of an economy (Here's some classic ironic juxtaposition: check out another article in this same issue, on the near-unmanageable quantity of throw away plastic our free market economy is producing. Guess what part of the solution is - egads, government intervention!! But, that can't be right, right?). An economy informed by an acknowledgement of the need for a moral and social ecology - in which sustainability, a view to the good life of future generations, and the payment of true costs for economic production are accounted for - would reject the unidimensional view that economics is about the pursuit of growth. Objectively, we are informed that educated voters would automatically conclude that abortion and gay marriage are unquestionable political goods, since above all individual autonomy and personal preference are the basic objects of political life. That abortion may involve the disposal of a human life, or that a polity's special acknowledgement of the good of heterosexual marriage may have something to do with the support for families and future generations, doesn't seem to have any relevance to such unbiased stances. If anyone is looking for more evidence of the near total moral bankruptcy of today's universities, and their complicity in our "absentee economy" populated by "itinerant vandals" (in Wendell Berry's inimitable words), one needs look no further.

Gary Bass gamely seeks to discourage the view that democracy is solely about efficiency (and above all, economic efficiency), but in the end, he is too invested in the predominant modes of liberal and individualist thought. His critique boils down to the line, "Caplan's view of democracy is about efficiency, not legitimacy." Caplan argues for a return to Millian multiple voting by educated elites, and governance by non-elected economic experts (i.e., free marketeers). It's not the fact of anti-democracy that bothers Bass, so much as the appearance. At the end of the day, Bass agrees with Caplan's policy stances; he merely disagrees with the means. Thus, he suggests that political elites ought not to seek to cut off the hoi polloi from the political process altogether, but rather to guide public opinion to embrace elite policy preferences. Democracy is about efficiency and legitimacy. Why choose?

The thought never crosses the mind of any of these academic elites that the people may be right: that what the populace seeks to endorse is reasonable stability in their lives and their communities, the creation and sustaining of a moral ecology, the chance to pass one's cultural inheritance from one generation to the next, the knowledge that one's children will not be asked to die for the country in wars of imperialism or to secure a steady flow of petroleum, and that one can live and die in communities where one's life will be remembered and honored. Democracy, thus stated, is neither about efficiency nor legitimacy, its aim is not economic growth or individual autonomy, but about living well within moral and humane limits. That such a thought doesn't remotely occur to our academic leaders is all the more reason why it would be better to be governed by the first 100 names in the Cedar Rapids phone book than by members of the faculty at Princeton or George Mason Universities.

Thursday, May 24, 2007

Harvard of the World?

In Tuesday's column, David Brooks explored the contentious immigration issue by comparing the United States to Harvard.

"Harvard is tough to get into," he wrote. "To be admitted to a school like that, students spend years earning good grades, doing community service and working hard to demonstrate their skills. The system has its excesses, but overall it's good for Harvard and it's good for the students beginning their climb to opportunity." He then avers, "The United States is the Harvard of the world." For this reason, he thinks that the immigration bill, on the whole, is defensible inasmuch as it creates incentives to develop "bourgeois virtues" of hard work, good behavior, and self-sufficiency.

I read this analogy to Harvard and nearly choked on my illegal-immigrant subsidized breakfast cereal. One thing we can be certain that Harvard students don't really need to know, and won't need to learn while they are at Harvard, is anything much about the United States. Our elite universities are rife with what Roger Scruton has called "oikophobia," the hatred of one's own land, culture, and history. As he's written in his recent book A Political Philosophy, no one in such elite settings "can fail to be aware of the educated derision that has been directed at our national loyalty by those whose freedom to criticize would be been extinguished years ago, had [our forbears] not been prepared to die for our country.... [Such loyalty] is now habitually ridiculed or even demonized by the dominant media and the education system. National history is taught as a tale of shame and degradation."

How ironic, then, that it is most often this self-same class of intellectual elites who demand most vociferously the most generous and least oppressive treatment of illegal and future immigrants, and how unfortunate that Brooks settled on the metaphor of "America as Harvard" as proof of the sufficiency of the pending legislation. For all its shortcomings, the Progressive Left of the early 20th-century at least believed enough in America, in its history, its tradition and its ideals, that such thinkers as Horace Mann argued on behalf of a common education in American institutions and ideals that ought to be required knowledge of all citizens, whether newcomers or old hands (I say this, fully acknowledging the deep anti-Catholic animus of much of this educational regimen). Can we be remotely sanguine that the current calls for amnesty and freer flow of migration would result in strong civic loyalties among new immigrants, given the national self-loathing of the intellectual elites that control most of our most prestigious institutions across the nation? In the absence of real reflection upon the need for, and further, commitment to inculcating, a set of civic understandings with which we might rightly expect all new citizens to understand and to endorse, I find much of the current debate to be woefully lacking in serious exchange about what it means to be an American.

I am reminded of my first College-wide faculty meeting I attended at Georgetown, in which a discussion was held of a new "Americas Initiative" aimed at fostering a continental-wide exploration of the connections and interconnections of the "Americas." All of the faculty who rose to speak expressed their hope that the Initiative would emphasize how America was being transformed by migration from south of the border, and that it was imperative that our students learn more about these diverse cultures that they would be in a better position to comprehend our changing demographics. I rose - having been at the University perhaps for two or three months - and observed that all of these migrants were coming here, to the United States, and ought not we to take that as an indication that there was something admirable about our way of life that we ought to be conveying to those newcomers? Further, this being the case, wasn't it incumbent upon the University to make sure we were educating our students in a deeper understanding of the American tradition so that they would be in a position to articulate and endorse this tradition in the event that they were in a future role where such knowledge would be necessary? Afterwards, several faculty approached me to congratulate me for asking this question, and admitted that they wouldn't have had the courage to ask it themselves. Why is it that we have tenure?

While the Left seems to me to be playing a dangerous game - a game with the future in which we deny our past, or mis-convey it - anti-immigrant voices largely seem to me to be not much better. Many of these people don't pause to reflect how much of our economy - and especially, that part of our economy needing physical labor - rests upon our blind eye toward massive numbers of illegal immigrants. I suspect that most of those people on the Right calling for the deportation of illegal immigrants, and the closing of our borders to such people, would also be the first people complaining when the price of food, housing and many other products would ineluctably rise. The very proponents of free markets who have ushered in an age of globalization now lament that we are overrun with illegal immigrants doing the physical labor that we no longer wish to do, or no longer wish to pay for. In our denigration of "drudgery" - physical labor that no self-respecting elite would every endorse for their progeny - we have subtly invited an illegal underclass to keep our prices down, inflation under control, and our economy humming, and now - a bit like Claude Rains - we are shocked, shocked, that all these illegal immigrants are now underfoot.

The Left wants our immigrants but hates the America that attracts them; the Right doesn't want the immigrants but loves the prosperity they undergird. And all the while, supposedly there's a debate going on.

Saturday, May 19, 2007

Easy as Pie

Apropos my last post, a front page story in today's New York Times describes a couple's struggle with debt and, more broadly, America's growing love affair with indebtedness.

The couple, the Moellerings, owe $22,228 in credit card debt. The article shows that they've made some pretty bad choices, including 50K of expenditures that they accumulated over a seven month span for a wedding, honeymoon and bathroom renovation. Yet, there is evidence of abusive loan practices as well, including a 32.24 percent interest rate on their Sears credit card. The word usurious might even be thought to apply.

The Moellerings are representative of a major shift in behavior that has taken place over the past twenty-five years. Personal savings rates ranged between 8-12 percent of disposable income through the 1970s until the early 1980s, according to a graph that accompanied the article. Starting from a high of nearly 12% in the early 1980s ("morning in America"), personal savings dropped continuously until 2005 dipping into the negative. Americans now spend more than their income.



Credit has become easy, and our addiction to buying whatever we wish has deepened and widened. According to the article, "Just a generation ago, financial profiles like the Moellerings’ would have been unusual. But changes in federal regulations since the 1980s, along with consolidation in the banking industry and changed consumer attitudes toward borrowing and saving, have made credit more widespread, more heavily marketed and more confusing, with offers of more credit — at low rates — extending to even the least reliable risk. In 2006, the industry mailed out nearly 8 billion credit card offers, up from 3.5 billion in 2000.

"Credit card debt, less than $8 billion in 1968 (in current dollars), now exceeds $880 billion, more than tripling since 1988, adjusting for inflation, according to the Federal Reserve Bank. Penalty fees alone cost consumers $17.1 billion in 2006 — up from $12.8 billion in 2003, adjusted for inflation, according to R. K. Hammer, a bank card advisory firm. In part because of the debt burden, the consumer savings rate fell below zero percent in 2005 and has stayed there."

At a time when the nation was purportedly becoming more wealthy - witness the rise in real estate value over that period - we have been collectively spending more than we make. Funny thing is - that purported "wealth" has been juiced up precisely by just such easy credit. When the bills come due - when we've reached the end of the Ponzi scheme, as seems to be the case with the collapse of the "sup-prime market" - we'll see just how much our "wealth" is worth. Just as the nation has spent beyond its means - selling huge sums of bond debt to nations like Japan and China - the average consumer has rung up enormous quantities of debt, often spending beyond their means to purchase goods made in those same nations. A collective transfer of wealth has marked the past 25 years, and the next generation will be saddled with the cost of our spending spree. Has there ever been a more irresponsible or self-indulgent generation than ours? The bumper sticker one sees occasionally - "I'm spending my children's inheritance" - is more true than we know.

It's difficult to imagine that we will save or "grow" our way out of this predicament. The impending costs of diminishing energy resources will only accelerate our indebtedness and loss of patrimony. At a time when we might have been preparing for a future of limits - one that Jimmy Carter warned us of in his 1979 speech - we pulled out the credit cards and printed more dollars. We lulled ourselves into a fantasy that growth would be infinite.

All this, in the name of freedom. Two credit card commercials come to mind. The first, for the "Chase Freedom" card, portrays all the goodies that anyone would like to buy with background music from the Rolling Stones, "I'm free to do what I want, any old time..." The other shows the snowboarder Shawn White jetting across the globe at the slightest rumor of a snow storm. It closes with him saying, "I need to be able to travel where I want, when I want." You should emulate him and charge spur of the moment trips to your credit card. Don't worry about when the bill will come due - live in "the now." For a nation that is sometimes said to live in the future, there is actually very little thought toward the actual future. We are temporally blinkered, living in the present without concern for the consequences for future generations. So long as I'm free to do what I want, any old time....

ADDENDUM:
Interesting article here - better financial minds better than mine argue that the financial system is due for a rather severe fall. Would our generation have the same communal and local resources to respond to another Depression?

Thursday, May 17, 2007

Usurious

I'd like to get a better grasp about why and when the concept of "usury" went out of fashion. It was long held by Judaism and Christianity to be a sinful activity, condemned because it was immoral to base on economy upon money-lending. While all lending was not held to be necessarily bad (hence, some allowance was made for its practice, but usually as a separate contract, to denote its lower status), it was viewed as a practice that had a certain kind of internal logic or tendency - in this case, a tendency to make money-lending the very object of the economy. One might conclude that the current Church ban on contraception has the same kind of logic - allow it (even in marriages), and a wholesale tranformation of sexual behavior follows. Might it also be concluded that the experiment lifting the ban on usury - indeed, even doing away with the word itself, a word that denotes disapproval, a status that has been superceded by the more approving term "finance" - has shown us that a wholesale transformation of the economic system was the result? That the object of economy becomes money-making and increase, the pursuit of luxury, the tendency to create a society of debtors and indebted and a widespread embrace of debt as acceptable - and not the provision of necessities for living, or in Aristotelian parlance, "living well"?

Current journalistic commentary on the "sub-prime lending crisis" tends to focus on the idea of "predatory lending," treating it as a kind of anomaly rather than a likely logical outcome of ever-expanding demands to find new markets for procurement of interest. The financial sector of our market is now arguably the most important part of the economy; should it run into difficulties, a whole house of cards will collapse (hence, the hand-wringing about whether the sub-prime market will plunge the entire housing market, and hence the entire economy, into a tailspin). But, can we so easily and blithely conclude that the "subprime lending crisis" is anomolous? Might it not be that the current system depends upon ever greater circulation of credit for the sake of keeping the system going? In an economy that actually produces increasingly little - other than various financial devices and packages - the game becomes keeping the flows going, at least until the last person is holding the bag (of IOUs).

I write about this having just read a very dry, but nonetheless interesting posting at the Mises Institute website that examines a basic problem in a money-lending economy: what happens when the money being made on money exceeds the value of actually produced goods in that economy? The author of this article argues that we have reached that point, and makes the following rather startling claim:

"Against this backdrop the crucial question is: where is the borderline between a 'good' and 'bad' rise in debt-to-GDP ratios? To Austrian economists the ratios spell danger. They maintain that today's government-controlled paper-money systems have decoupled credit expansion from the economies' productive capacities: "circulation credit" feeds a "credit boom" that is doomed to end in severe economic, social and political crisis.[3] Austrians fear that the collapse of the credit boom will lead to the destruction of the currency through a deliberate policy of (hyper-)inflation, destroying the free-market order."

Now, I'm not convinced that the "market" would behave very well in an unregulated credit environment - but, I'll leave that for the moment. Most interesting is the contention that our credit markets now account for more economic activity than actual production of goods. As the author says - and I paraphrase - if this keeps up, the shit will hit the fan. Maybe the long-superceded dim view on usury had a point, after all. At the very least, it should be viewed as a regrettable necessity, not the aim of "household management" itself.

Wednesday, May 16, 2007

His Only Son

While the passing of Jerry Falwell gets the headlines, the New York Times today reported that young First Lt. Andrew Bacevich, son of Professor Andrew Bacevich of Boston University, was killed in action in Iraq on this past Sunday. Professor Bacevich has been one of the most penetrating critics of America's course over the past fifty years, a period of time when we went from being a producer to a debtor (a.k.a. "consumer") nation and became a penurious if well-armed addict of petroleum supplied by desert tyrants whose nations it was declared to be our national interest to protect or invade. Bacevich - a Vietnam War veteran and self-described conservative - has argued that Jimmy Carter was altogether right to call for a form of freedom in which we lived within our means and with a recognition of limits in his now-decried "malaise" speech of 1979. Our 30 year binge - initiated by Ronald Reagan, whose first act was to tear down the solar panels that Carter had installed atop the White House - now makes it much more difficult for us to live within whatever means we have left. Clinton and Gore were not much better - under their watch the national automobile fleet went from being comprised largely of inexcusably large cars to mammoth assault vehicles.

Bacevich has written widely and seriously about our predicament. For a taste, visit a recent article that appeared at the end of last year in Commonweal, reprinted here. Note that in this essay Bacevich cites Flannery O'Connor and Walker Percy, as well as Christopher Lasch, Robert Nisbet and Pope John Paul II, in his call that America begin to live within its means, cease promoting its way of life at the point of a gun, reject the contemporary definition of freedom as "living as one likes" in favor of a freedom of actual independence, and practice the virtues of thrift, self-denial and "putting up for a rainy day." Bacevich, clearly, is a true radical, and an angry one at that (with justification, in my view).

The father, and his son, are in my prayers today. First Lt. Andrew Bacevich, requiescat in pace.

Tuesday, May 15, 2007

Checking Under the Hood

Combining two of my favorite activities - commenting on commercials and worrying about our energy future - I was quite amazed to see a commercial last night in which Chevron acknowledged the reality of "peak oil." It portrayed two workers setting up a temporary workplace in the middle of a desert (telling, that), one losing "Odds-Evens" and descending into a manhole in the sand, the other waiting, apparently for days, until the other worker emerged with a giant dipstick. The dipstick showed that the world was only half filled with oil. Funny! That's what "peak oil" is - a theory we've used half the stuff up, and by far the easiest and most cheaply accessed stuff. A narrator intoned that "some people believe that the world will have used half the available supply of oil by the year 2020" (I wonder who these "people" are: peak oil pessimists think we've already passed that point, while the "optimists" - e.g., Cambridge Associates - have suggested that we won't arrive at that point until 2030. Perhaps Chevron just split the difference). He then calls for an emphasis on conservation and the creation of new alternatives.

What he doesn't acknowledge is that, if true, peak oil will be a more profound challenge than any of the techno-optimists acknowledge. Our "lifestyle" - declared by Dick Cheney to be "non-negotiable" - will necessarily have to change. There will be enormous costs to be borne, and wealth that will be made by some and lost by many others. We are facing a transformation in our civilization. The era of "growth" in all likelihood is nearly over. Few people have considered the massive implications of this fact. Expectations about the future will have to be radically revised, and many will be unpleasantly surprised to discover a much harder future awaits.

Nonetheless, in the long term we may be blessed by the need to re-order our lives in ways that strengthen community, in which we live with less, and acknowledge limits. These are behaviors we've worked hard to extirpate in the past 50 years, so the jury is decidedly out on whether the transition will be orderly or chaotic.

P.S.: For those looking for more investment advice on surviving our "peak oil" future - assuming markets will continue to function in recognizable ways - check out one of the recent posts on "Motley Fool": more tremors...

Friday, May 11, 2007

Oil Executive or Journalist - You Decide

This article begins by reporting that oil executive Jim Buckee recently declared that the world has reached "peak oil" (a crazy theory held mostly by loonies as well as a growing number of respected oil executives). Thankfully, the journalist ends the piece by asserting that the evidence is more "ambivalent," a comfort for all those people for whom journalistic balance trumps the supposedly expert opinion of a person who works in oil exploration for a living.

Berry's Anti-Gnosticism

Among the gifts I received from Jason Peters of Augustana College during my recent trip to Kentucky were a jar of very fine local Rock Island mustard and an offprint of his recent article on Wendell Berry. The article - "Wendell Berry's Vindication of the Flesh" - has appeared in the latest issue of "Christianity and Literature," an issue featuring several essays on Berry's religious thought. Peters's essay is first rate. It shows how Berry's defense of work - physical work - takes place within a larger theological framework in which Berry rejects Gnostic contempt for the body and that old heresy of dualism, and indeed, bases his defense of the fundamental necessity of human labor upon a proper and orthodox understanding of original sin - that humans must earn their bread from the sweat of their own brow (not from the sweat of human slaves, as Lincoln thundered, nor our petroleum slaves, as, more recently, Berry and others have argued).

Also, Peters links Berry's arguments to two thinkers who write in an explicitly Catholic tradition - Walker Percy (especially Percy's novel "Love in the Ruins," in which a particular curse of modern man is "angelism," a version of Gnosticism) and C.S. Lewis, especially his novel "That Hideous Strength." Indeed, referring back to the spirited recent debate over Harvey Mansfield's Jefferson Lecture, I'd suggest that these novels, along with Berry's, might stand as the kinds of literary works that, among others, better than most articulate a defense of love for particular people in particular communities, and against the greater forms of abstraction to which an excessive manliness can incline. Perhaps not the literature that HCM was intending us to read as examples of manliness, but ones that are needful.

At the risk of copyright infringement, here are a few nuggets from Peters's essay. Procure a copy - indeed, get the entire issue.

"[Our] aversion to physical labor accounts for what Berry calls our major economic practice: to delegate work to others, whether those 'others' be economically disadvantaged people or garbage dumps or waterways or combustion engines. For Berry, the line running from the slave through the hireling to the machine is direct; it indicates our wish to 'rise above the sweat and bother of taking care of anything - of ourselves, of each other, or of our country' - and afflicts us at a moment when frivolous labor-saving gadgets proliferate at a rate heretofore unseen. These labor-savers signal our moral failure to reconcile ourselves to our condition; they are proof that we accord the body no respect and little responsibility."

"Berry's resistance to innovation and labor-saving gadgets by which we avoid lifting boxes and cleaning floors is not, as his critics say, nostalgic. It is not even curmudgeonly. It is a resistance deeply set in his refusal to countenance the old heresy [of dualism]. It is a resistance predicated on the conviction that absenting the body, whether farming or writing or any human endeavor, accords with dualism, gives us easy permission to privilege mind over body, and necessarily leads to the superstition that we can disgegard material indefinitely so long as we put our detached minds to it. But it leads to other, more destructive mischief as well: ultimately a 'dualistic society dominated by mind' he says, 'involves a number of dangers, of which the degradation and destruction of the material world is only the most obvious.' "

"Something has to do the needful work we are no longer willing to do. Of necessity we accumulate - first by negligence, later by habit, and always by moral weakness - those things with which we render ourselves obsolete. For it is simply the case that when we refuse to accord proper respect or assign proper responsibility to the body, we must necessarily acquire replacements for it - until at last we inhabit what Fitzgerald called a 'new world, material without being real.' Having dreamed for the realm of pure mind, we have awoken in the realm of pure machine, 'materialistic' as charged. Is it any wonder that we see so much drug abuse, alcohol abuse, and sexual abuse? Is it any wonder that we treat the body as a kind of pleasure machine? We don't know what the body is for, and so when we do use it we abuse it."

Thursday, May 10, 2007

Duh

The brilliance of Wall Street's best and brightest never fails to astound. Spotted today on Bloomberg.com:

``The market may be getting a little bit ahead of itself,'' said Kevin Divney, who manages $8 billion as chief investment officer at Putnam Investments in Boston. ``One concern now is whether the consumer is leveraged more than we understand with too much of their wealth tied to real estate.''

I guess when you manage 8 billion dollars you don't get much chance to drive past all the "For Sale" signs out there in the burbs...

One other tidbit further down in this article - the U.S. trade gap widened by 10% in one month - an additional 6 billion dollars. I'm no economist, but that doesn't sound good. Unless you're Saudi or Chinese.

Wednesday, May 9, 2007

Thumos in Washington

Harvey C. Mansfield, Harvard political theorist and America's most famous conservative academic, delivered last night's annual Jefferson Lecture, the highest honor accorded by the National Endowment of the Humanities. His lecture - "How to Understand Politics: What the Humanities Can Say to Science" - focused mainly on the inability of our natural and social sciences truly to understand the most important human phenomena, especially politics. In particular, our natural and social sciences cannot account for thumos - spiritedness - and "names," that is, particular individuals. As he succinctly stated, our natural and social sciences can't account for the "importance of importance."

Mansfield explicitly criticized Harold Lasswell's definition of politics as "who gets what, when, how," and instead argued that politics is really about the WHO - who is most important, who gets to make the rules and decisions. Politics is about the assertion of our individual or partisan greatness. Politics in fact refutes the theory of our natural and social sciences, and especially the theory that only aggregates and data sets matter, not individuals. Political science, properly understood, helps to explain not how humans become animals (what sociobiology does), but how animals become humans. Mansfield sounded a very Lawlerian note in pointing out that there are no chimp universities or civilizations, so it's pointless to reduce us to glorified or slightly smarter chimps.

Related to this, Mansfield argued that literature is especially important for understanding politics because literature is about particular people with particular names, who live in particular places and at particular times. Literature reminds us of the central importance of individuals. Moreover - in a section I found particularly provocative - literature "knows something that science does not" - that people resist the truth, and perhaps especially those truths that go against the presuppositions of a regime (e.g., in a democracy, the truth of human inequality - an argument that one can't really make politically or even scientifically (witness the controversy over "The Bell Curve" or Larry Summers, but which one can portray with relative impunity, if carefully, in literature).

Predictably, Mansfield's lecture called out the usual blanket and underinformed condemnations of Straussianism. However, there is some validity in the suspicion toward a "politics of greatness," albeit one that doesn't finally have all that much to do with Mansfield's Straussianism per se, I'd contend, but rather an overemphasis on a half-truth about human nature. My own misgivings about the lecture centered on Mansfield's definition of politics as thumotic, as being about the assertion of "WHO." Certainly this is a part of politics, but it's also a profound problem for politics and political community. Politics is partly about assertion, assuredly, but also must be about the governance of assertion, the subordination of our own personal glory and honor for the good of the polity. It was interesting to me that, in spite of Mansfield's insistence upon the importance of names, he actually named almost no figure in particular (other than a great allusion to Lyle Lovett). The one literary figure he did mention was Achilles, who surely, one would have to acknowledge, is one of the poorest exemplars of a citizen ever portrayed in literature. His anger nearly results in the cataclysmic defeat of the Achaeans (and, had the Trojans won the war, where would we be now?), and the full unleashing of his wrath leads him to defy the gods, to combat and distort nature, and to viciously slay and abuse the corpse of the decent man and actual good citizen, Hector. Can this be the best exemplar that literature provides for politics?

This problem was further reflected in Mansfield's interesting, if brief, discussion of religion. Religion, he contended, can be understood as one more form of thumos. Religion - and here he explicitly named Christianity - is a functional belief in a deity who cares for US. We are not lost in the cosmos, really - there is a God who watches over us, who cares for and loves us individually. The lower - humanity - defends the higher - divinity - in the name of the low. Yet, here again, this argument ought to strike one as at best an incomplete understanding of religion in general, and Christianity in particular. Yes, God cares for us - God becomes man, an act of ultimate love and self-sacrifice - but also, in the very recognition of this profound and inimitible love, we have to acknowledge our own imperfection and partiality. Christianity urges us to practice the virtues of love and humility, not pride - or thumos. In this regard - particularly the emphasis upon individual insufficiency and the need to govern pride - Christianity and a kind of political and even democratic realism coincide to a large extent. Mansfield told perhaps half the story - and an important half in our age of socio-biology - but only half, and in my view, perhaps not even the most important half. Perhaps he acknowledged this fact, if slyly, by ending his lecture with an acknowledgement that he had not spoken about love - but, surely too, acknowledgement of this omission itself was an important but finally insufficient admission.

I don't think it's enough to acknowledge that love is important with a concluding wink. Even our sociobiology shows us to be an age defined by human pride. Ironically our socio-biologists are among the most prideful of human creatures ever to have existed - as Tocqueville suggested, having shown we are nothing but beasts, they act as if they are now gods (having established we're only animals, they argue that we now have leave to change our nature through perfectionist bio-technology). Pride remains THE problem of politics and, in sum, the human condition - a fact that Plato understood well in placing thumos in a subordinate position, subject to the governance of our highest faculties.

Monday, May 7, 2007

Lucky Day

In my adolescence I wrote a short story in which the lead character achieves his ambition of securing insurance for every aspect of his life. As he settles into his armchair with a sense of ultimate satisfaction, he realizes that he is existentially bored and almost instantly dies of ennui. Perhaps it was a sublime achievement by a 13 year old, or more likely, a typical act of teenage rebellion against the very idea of my father, who happened to work for the Traveller's Insurance Company in Hartford, Ct.

Well, I happened to see a commercial for that very company last night (one long ago consumed by the voracious maw of "Citigroup"), in which scientists are purported to have successfully discovered a way to re-attach "lucky rabbits' feet" to the poor bunnies from which they had been amputated. Numberless rabbits with one gaily colored foot show the success of the new procedure. The point of the commercial is to demonstrate that, with Travellers, "you no longer need luck." Pretty funny - especially considering its deepest Machiavellian presupposition that modernity aims to master "Fortune." We have overcome chance and happenstance, or at the very least - as Machiavelli commends - its "effects," which has the effect of governing the very cause. I wonder if the commercial isn't an actual reflection of the Zeitgeist - a pervasive belief that we have conquered "Fortuna." Am I wrong, then, to sense a pervasive misgiving? Are the occasional benedictions of "good luck" merely a superceded verbal tic, or revelation of a deeper and more widespread sense that we haven't wholly, nor ever will, master the masterless?

Thursday, May 3, 2007

My Afternoon with Mr. Berry

Recently I spent some hours visiting Mr. Wendell Berry of Kentucky. It was a day I will never forget - he is a man of character, a raconteur, a poet, a person who knows how to be silent and how to converse, and someone who has seen farther and deeper than most of us. His essays - collected in such books as "Home Economics," "Sex, Economy, Freedom and Community," "The Way of Ignorance," and "Citizenship Papers" - are among the truest writings I have ever encountered.

In light of some concerns of my previous post, I asked him how he has managed to diagnose the depths of the problems that humankind now faces without falling into a kind of despair. He replied, "despair is a kind of relaxation." This he said to me, sitting in utter repose on the swinging seat on his front porch overlooking the Kentucky river. But, I knew what he meant, and nodded.

He reflected, too, on the course of his career. When he began writing, he noted, he was widely ridiculed. However, now even his "enemies" - various industrial farming organizations - are now inviting him to give lectures, invitations that he finds hard to decline. He noted that something is now happening - "incrementally" - in the gradual and almost imperceptible accumulation of realizations that seems to be rising to consciousness of an ever-greater number of people. He compared it to attending meetings: "I've never been to a meeting where anything worthwhile ever seems to have been said" (I replied that it sounded like academic committee meetings), but still, over time, something has happened. More people - but still too few - are becoming aware of the unsustainability of our way of life, of the isolation resulting from the way we've organized our living space, of the loss of patrimony and the disruption of cultural transmission that used to be part of the obligations of one generation to the next. He seemed hopeful, and it was hard not to agree with him, sitting with him on his front porch, orioles flitting in and out of view above the river, on that beautiful day.

He had some harsh words for academics, as he's always had - the "itinerant vandals" of intellectual life, too often shills for the "absentee economy." People go to college and are given reasons not to return home, as Hannah Coulter points out in Berry's eponymous novel. Yet, I was there with some very good fellow academics - Jason Peters of Augustana College, editor of the forthcoming collection of essays on Berry entitled "Wendell Berry - Life and Work" and a man with an infinite supply of bad (but funny) jokes and good humor; Norman Wirzba of Georgetown College, editor of "The Art of the Commonplace," a fine collection of Berry's agrarian essays; and Steve Wrinn, Director of University Press of Kentucky, a man of passion, appetite, and immense talent. While one could only nod at Berry's characterization of the "idiocy" of higher education, still, on that day, academics seemed wholly, if momentarily, sane.

Before leaving, I tenatively asked Mr. Berry to sign my copy of his latest novel, "Andy Catlett." He signed it, "To Patrick Deneen, with gratitude, with appreciation. Wendell Berry." It is, and will remain, a prized possession.

Tuesday, May 1, 2007

Cheney's Banker: Beware the Global Ponzi Scheme

I am at times accused of being a pessimist. While I maintain that hope is essential, I am inclined to the belief that things must and will get a lot worse before they get better. By worse, I mean a serious confrontation with deprivation and the limits of nature; by better, I mean a reordering that will bring our civilization closer to the rule of nature, in which our communities will be strengthened and we will re-learn the ancient virtues, including frugality, prudence and self-governance. It seems likely that we will, very soon, hit a wall that will hurt Americans more than the citizens of most other developed nations, precisely because of the binge of gluttony and avarice we have enjoyed for the past sixty-odd years. James Howard Kunstler has described our era as "the greatest misallocation of wealth in the history of the world." Think suburbs; think SUVs; think strip malls and miles and miles of concrete everywhere. Think the death of downtown after downtown, empty storefronts killed by the interstate and the chain-ification of American retail. Think the loss of patrimony, the demise of actual production of goods, the loss of knowledge of how to do things. Think the depletion of resources and the "conquest" of nature. Think of our insistence upon our liberated "lifestyles," purchased by the outsourcing of American jobs to cheap overseas labor, a "lifestyle" based upon slavish dependence upon the petroleum of dictators and tyrants, a "lifestyle" supported by the removal of such obstacles as unwanted pregnancies or marriages until unhappiness do us part. Think the gigantic transfer of American wealth, built by generations, to the nations of the Middle East and Asia.

Our age is one fueled by the belief in limitless growth. Everyone believes that the future will be better than the past - better, that is, in the sense of having more stuff and more ease. Well - almost everyone. It turns out that Dick Cheney's investment banker doesn't think so. He believes that we are in the throes of a worldwide asset bubble - one that is about to burst. This is reported not on "dieoff.org" (a fine website for those 3 a.m. insomnia attacks), but on as button-down and mainstream a site that one can imagine - Bloomberg.com. Particularly worth noting is investment banker Jeremy Grantham's warning: the bursting of this global bubble "will be across all countries and all assets, with the probable exception of high-grade bonds. Risk premiums in particular will widen. Since no similar global event has occurred before, the stresses to the system are likely to be unexpected." Unexpected, indeed - especially for a nation with no savings, either in the public or private spheres. How will a nation grown accustomed to luxury and ease confront the evaporation of its purported wealth? With little help by way of local community ties and the cultivated capacity to tighten belts, and with government equally bankrupt, I'd say that "the stresses to the system" are going to be downright scary.

Oh, and where's Cheney placing his bets? A recent Kiplinger magazine article tells all. The article, entitled "Cheney's betting on bad news," provides an account of where Cheney has invested more than $25 million. While the figures are estimates, the investments are the real deal. According to Tom Blackburn of the Palm Beach Post, Cheney has invested heavily in "a fund that specializes in short-term municipal bonds, a tax-exempt money market fund and an inflation protected securities fund. The first two hold up if interest rates rise with inflation. The third is protected against inflation." I guess these are those "high quality bonds" about which Grantham was speaking - a nice bet when you believe the economy is going to tank or inflate - or, as an energy man would likely know, both at the same time.

Even more interesting: Cheney has invested another (estimated) $10 to $25 million in a European bond fund, suggesting that he is counting to strike it rich on a steadily weakening dollar. I guess "Old Europe" isn't all bad after all - at least not their currency. As Blackburn wryly notes, "Not all bad news is bad for everybody." Money talks; patriots walk.