Drink to Peace March 28, 2002February 21, 2017 MANISCHEWITZ Brooks Hilliard: ‘Speaking of wine, Happy Passover. I am convinced one of the major reasons Jews tend to be progressive or liberal is that we grew up with the story every year of how we, personally, were slaves in Egypt. It’s awful hard not to empathize with those who’ve emerged from slavery when you know you’re one of them.’ ☞ Not to mention, fast-forwarding a few thousand years, the bullied, the oppressed, the discriminated against, and the massively exterminated. Which I wouldn’t mention, except that it sort of ties in with – leapfrogging this next item – what follows. CHÂTEAU MANISCHEWITZ ’86 Jim Martona: “When ordering wine in restaurants, mustn’t all logic FLY OUT THE WINDOW if one is not to look like a no-class lout? I mean, isn’t ‘sommelier’ actually French for ‘I smell money?’ Logic/emotion is a balancing act. Last week I ordered a $68 bottle of wine in the chi-chi Manhattan restaurant La Grenouille. I admit it was the most I’ve ever paid for wine. Imagine my shock when the waiter brought out a HALF-BOTTLE! I guess my dinner companion and I didn’t read the menu closely enough. We made damn sure to savor that wine!” ☞ Don’t feel bad, Jim – you’re young. That same $68 invested at 10% in a Roth IRA and passed on to your grandchildren at your death, 50 years from now, when they’re 10, would have grown to throw off only $285,000 a year for them from ages 70 to 90, and by then, not only will you be long, long gone, $285,000 will be worth bupkis. Well, that’s not entirely true: after 110 years of 3% inflation, $285,000 shrinks to the equivalent of $11,000. But “invested at 10%” is an awfully aggressive assumption and, in any event, 110 years is a long time to wait. What’s more, why shouldn’t your grandkids have to make it on their own, as you have? Keeps life challenging. Drink up! Indeed, at the rate we’re going, it’s not entirely clear anyone will be here 110 years from now, which is all the more reason to drink up – and to hope that good-hearted men and women (just getting more women involved would likely help) can find a way to live in peace. Which I suppose brings us to this, which, having been unable to find a link to it, I have lifted from the Sunday, March 10, London Daily Mail): The Daily Mail THE ONLY PATH TO PEACE By Peter Hitchens Almost everything you think you know about the Middle East is untrue. For anyone who knows the region’s geography and history, the nightly news bulletins are a torture to watch, with their soppy editorialising about ‘peace’ and their depiction of Arab and Israeli as squabbling children in need of a clip round the ear from wise Western world statesman. Those world statesmen are not much better. In normal life, it is a sign of being unhinged if you do the same thing over and over again and expect to get a different result. But in the business of Middle East diplomacy, such behaviour could earn you a Nobel Peace Prize. Since 1978, Israel has been urged to give up a little more land in return for a promise of peace, which always seems to evaporate. The land, however, has gone for good. The whole logic of the argument is odd and hypocritical. America, a vast territorial empire with harmless neighbours to north and south and huge oceans to East and West, urges Israel, one third the size of the single State of Florida and with foes on every hand, to give up ‘land for peace’. So does Britain, a secure island entirely surrounded by deep water and with no obvious enemies in sight. The phrase ‘land for peace’ is interesting in itself. It is actually another way of describing the appeasement forced on Czechoslovakia by her supposed friends in 1938. This was also supposed to promise peace, but actually made the country impossible to defend and opened the gates for an invasion a few months later. Those responsible for this cowardly stupidity are still reviled 60 years on. Those who urge it on Israel in the present day are praised. Look at a map. Israel and the Occupied Territories fit comfortably inside the borders of England, with plenty of space to spare. Then look at the absurd shape of it. Any general, asked to defend such a country, would groan with despair. At one point, between Qalqilya and the Mediterranean, it is so narrow that a tank could cross it in 18 minutes and a jet bomber in 18 seconds. Its only international airport is within easy rocket range of potentially hostile territory. So are its capital and its principal highway. It is worth mentioning that it is also within missile range of Iran and Iraq, not far over the eastern horizon, and that Iraq and Iran agree on only one thing – their loathing of Israel. Within living memory it has three times been the target of invasions from its neighbours, in 1948, 1967 and 1973. During the Gulf War it was bombarded with Iraqi Scud missiles. You might pardon its inhabitants for being a little nervous about their security. The astonishing thing is that so many Israelis, despite this danger, have sought peace treaties with their neighbours based on a trust they have no reason to feel. Almost the entire Israeli media; the country’s largest political party; most of its authors, academics and artists, campaign constantly for their own state to make risky concessions to its enemies. Even its conservative leaders have made such concessions, especially by handing back the Sinai desert, with its valuable oil and strategically vital territory, to Egypt in 1978. The last left-wing premier, Ehud Barak, was prepared to hand over half of Jerusalem to Arab control two years ago. His offer was turned down. He also sought to give back the Golan Heights to Syria, but was rebuffed. This militarily vital piece of ground was originally part of the League of Nations mandate of Palestine when its borders were fixed in 1920. It was then handed over by Britain in a deal with the French, who controlled Syria, in 1923. Israel captured it in bloody fighting in 1967. In the same year Israel conquered the famous ‘Occupied Territories’ which are now supposed to be turned into a Palestinian state alongside Israel. You might think that Israel had seized them illegally from their rightful owner. In fact this is not true. They were grabbed by armed force, together with the eastern and holiest part of Jerusalem, by the country then known as Transjordan in 1948. Transjordan ethnically cleansed all Jews from this land and from its sector of Jerusalem, and promptly renamed itself ‘Jordan.’ During its 19 years of Jordanian rule, the area was never described as ‘occupied territory’. At that time there were also no demands for independence from the Palestinian people. The Gaza strip was gobbled up by Egypt in the same year, to a chorus of silence from the world protest industry. Israel has many blots on its past and is not a perfect society. Some of its founders were shameful terrorists as many British army veterans and others have reason to know. During the 1948 war there is little doubt that Israelis drove some Arabs from their homes, though the Arab radio stations were also urging them to flee to give Arab invading armies a clear run in their invasion. But it is not some kind of crude oppressor. Would you know from the BBC that Israel had a million Arab citizens with full civil and voting rights, with the sole exception that they are not requiredto do military service? The arrangement is far from perfect, and in recent years relations have grown worse, but no Arab country gives such rights to Jews, if it even permits them to live within its borders. Then there are the ‘refugees’ in their squalid townships. Why are they still there? About 650,000 Arabs fled from what is now Israel in 1948. There are now about five million officially classified refugees. More than £1.5 billion has been spent by the UN on housing and feeding them, mainly provided by Western nations. Most of the Arab states refuse to grant them citizenship or to pay towards their maintenance. They have a political interest in preventing this weeping sore from ever healing, since the refugees’ plight is excellent anti-Israel propaganda. They still promote the idea that they may one day return to their lost homes. For if they did so, Israel would cease to exist, its Jews a minority in an Arab state. Compare the Palestinians with the 12 million Germans expelled from Poland, Czechoslovakia, Russia, Hungary and Romania after World War Two. All have long ago been absorbed into Germany, and few seriously dream of returning to their lost homes. This often bloody transfer of population was done with the approval of the great powers of the day, and is now largely forgotten. Or compare them with the 14 million people caught in the wrong place by the bloody India-Pakistan partition of 1947. Nearly 8 million Hindus fled from Pakistan and 6 million Muslims streamed out of India. None of them is still in a refugee camp. Nor are the 900,000 Jews driven – often with great savagery and persecution – from Arab countries after the foundation of Israel, most of whom settled in Israel. Yet none of the supposed efforts for ‘peace’ have managed to achieve the civilised resettlement in Arab countries of these refugees. Why not, since they share a common religion, language and culture with the whole of the vast Arab world, and might surely have benefited from some of that Arab world’s huge oil wealth? The reason is that most of the West has lazily accepted the TV news idea that this is just a squabble between people who are equally misguided. It has swallowed the Palestinian claim that they are the oppressed. Yet Jewish Israel occupies a tiny part of the Arab and Muslim Middle East. They have all ignored the simple fact that, if Israel is to survive, it needs sensible borders. At the moment, it would rather have a frontier that is defensible and unrecognised, than one that is recognised but cannot be defended. We are supposed to be engaged in a war against terrorism. Here is a great opportunity to defeat and finish terrorism in one of its greatest bases. If peace is what the Arab world wants, America is now in a unique position to arrange it. Her military and diplomatic power is at its zenith. Instead of asking Israel to give land for peace, why do we not ask the Arabs, who have so much more land, to give some of theirs, so that Israel’s borders are no longer an invitation to invasion? At the same time we could end forever the grievance which has kept this useless conflict alive. A new Marshall plan could resettle the refugees in a matter of years, throughout the area in peace and comfort. Their politically impossible ‘right of return; could be bargained away forever. Joint unhindered access to Jerusalem’s holy places could be agreed by international treaty. So could the end of anti-Israel and anti-Semitic propaganda in Arab schools, newspapers and broadcast media, which frequently stain themselves with libels worthy of the German Nazis. But for this to happen, the Arab world needs to understand that no amount of terror, no amount of threats, will shift the Western world from its defence of Israel’s right to secure existence. It needs to understand that it must stop using anti-Israel sentiment as a safety valve for the discontent in its own ill-managed societies, whose despotism, squalor and brutality rarely if ever feature on the TV news bulletins. By similar resolve in the Cold War, the free nations of he world persuaded a mighty Communist power to reform itself and abandon its support for aggression and terror. It can be done, but only if we have the will and the understanding, and learn to see beyond the oversimplified mages of tank and slingshot, suicide bomber and soldier, to the real problem.
Wino, Wino, Wino Did I Ever Start This Thread? March 27, 2002January 25, 2017 Some important follow-ups to yesterday’s column. THE MORE YOU KNOW, THE LESS YOU EARN Ed: ‘Also, given a constant amount of Work, as your Knowledge increases, your Money decreases. I believe this is called ‘graduate school.” NO, IT’S 177% Brian Holdren: ‘Wenyu has assumed that one case of wine will last for an entire year. Must be a magic case of wine! Anyway, Less is correct (as you assumed). Doing the calculation with Excel: 177.4579488% Internal Rate of Return.’ ☞ I always assume Less is correct, but let humor get the better of me – I liked the headline. Ken Shirriff: ‘My final answer is 177.46%. This is based on the assumption that you receive $10 each week to spend and if you have a credit line with an APR of $177.46%, you’ll break even buying bottles vs. charging the case. Happily, this answer matches Less’s, although it took me several tries to get all the details right, and I got values from 63% to 299% while working on this.’ Mike Lyons: ‘To do the calculation properly we need to focus on the cash flows, not on the mythical $1/week that you earn. Switching to the ‘cheaper by the case’ method and looking at the changes in our cash flow over a 12-week period, we see: Week 1: -$98 (we spend $108 instead of $10) Weeks 2-12: +$10 (we spend $0 instead of $10) ‘Excel’s IRR (Internal Rate of Return) function tells us that is a return of 1.9764% per week. To turn that into an annual return, we can use a formula for compounding returns: ((1+r)^p)-1, where r is the rate per period and p is the number of periods, so we get ((1+.019764)^52)-1) = 176.7%.’ Bob Fyfe: ‘Instead of drinking a bottle once a week, drink one every night. Save $365 per year instead of only $52. Further, you mention saving even more money by switching to an $8 bottle. In actuality, you should be buying $20 bottles and drinking one every night. Since you earn such a high rate of return, you might as well “invest” as much as possible.’ George F (who I thought at first was kidding): ‘You are making the following assumptions: That you are able to provide the same or better quality storage of a case of wine as the store at the same or better price. That you do not break all the bottles in the case during transportation and storage. That you will not be tempted to drink more wine if you bought a case than if you bought individual bottles. Additionally drinking a case of wine could lead to a decline in your judgment, personal reputation, and balance, all of which could lead to grave additional costs. That the wine you are buying does not deteriorate during the 12 weeks of storage. That you will like the wine as much at the beginning of a 12 week cycle as the end. That the option to choose a different bottle of wine each week or no bottle at all (and spend the $10 on some other beverage) is of no value. That you experience no costs and inconveniences in transporting a case as opposed to individual bottles. ‘Assumptions 1-4 can result in actual cash losses. Assumptions 5-7 result in loses of value but not actual money. There is a saying ‘penny wise and pound foolish.’ Even Amy Dacyczczyn, author of The Tightwad Gazette II has a fairly negative view (page 97) of warehouse clubs and buying in bulk. She suggests a fairly detailed of costs and benefits to determine the true benefit of buying in bulk. ‘I put together a present value analysis of 119 weeks of buying cases (once every 12 weeks for $108 a case) vs. individual bottles (once a week for $10 a week). Assuming an interest rate of 5% on cash (and that I did everything right) you would need starting capital of $1,135.44 to buy 1 bottle of wine a week for 119 weeks. You would need $1027.18 if you bought cases instead. The savings is about $108 or 1 case. I personally do not feel that $108 is adequate compensation for the costs and risks. I can email the excel spread sheet if you like.’ ☞ Ah, but you don’t need a starting capital of $1,027.18 to change from buying a bottle a week to buying a case every 12 weeks – you need $98. (Instead of spending $10 that first week for one bottle, you spend $108 for 12 bottles, which means you have to come up with $98 more. That’s the most capital you will ever need in order to save what would be $119 on wine over 119 weeks. As to your other points, they are more or less valid and I appreciate your raising them. But don’t forget some counter-balancing points: Shopping in bulk means fewer trips to the store (saves time and transportation; less chance of getting killed in a car crash) . . . means you are less likely ever to run out at an awkward time (have to make a Sunday morning run for bathroom tissue, which is never on sale at the QuickyMart, just moments before little Timmy takes his first precious steps and you’re not there to see or videotape it) . . . and means you will be better prepared for a possible interruption in the supply chain, should there be a hurricane, flood, earthquake or red alert (and won’t you wish you had a case of wine then!)
Three Good Reasons March 26, 2002February 21, 2017 MORE REASON TO DIVERSIFY Friday‘s column asked why you might want to put more than 20% of your 401(k) in your own company stock and offered four (very bad) reasons. Jonathan Levy read those four and added a fifth: [ ] e) So that I can lose both my savings AND my salary at the same time if my company falls on bad times. REASON ENOUGH TO DRINK MORE Wenyu Pan: ‘I bought your book and the section called ‘A Penny Saved Is Two Pennies Earned’ was an eye-opener to me. The 177% you say is annualized return realized buying wine by the case at a 10% discount is even more intriguing. I tried to figure this 177% out myself, and found the return would be 211%! Here is my calculation: week 1: Invest $98, earn $1, weekly return 1/98; week 2: Invest $97, earn $1, weekly return 1/97; (you got $1 back in 1st week) week 3: Invest $96, earn $1, weekly return 1/96; … week 52: Invest $47, earn $1, weekly return 1/47; (you’ve got $51 back already). annual return = 1(1+1/98)(1+1/97)…(1+1/47) = 210% My Basic program: r = 1.0 for i = 47 to 98 r = r*(1 + 1/i) next print r r= 2.106383 (211%) ☞ This may be basic to you but is, of course, way over my head. Will the smart kids in the class let us know where Wenyu has gone wrong, if he has? I was at first distressed I couldn’t figure this out myself until I read: WHO NEEDS REASON? Johnny Dicks, Jr. brought this profound ‘Salary Theorem’ to my attention: The less you know, the more you make. Proof: Postulate 1: Knowledge is Power. Postulate 2: Time is Money. As every engineer knows: Power = Work / Time. And since Knowledge = Power and Time = Money, It is therefore true that Knowledge = Work / Money. Solving for Money, we get: Money = Work / Knowledge Thus, as Knowledge approaches zero, Money approaches infinity, regardless of the amount of Work done. ☞ Works for me.
Good Question March 25, 2002February 21, 2017 Tim Smith: ‘What stocks benefit from rising interest rates?’ ☞ None? This is not to say that the increased business activity often associated with rising rates may not lead to higher profits that could help some stocks if the economy takes off (though many stock prices, it seems to me, already discount significantly higher profits). Nor is it to say that the expected inflation that also often underlies rising interest rates might not help stocks that are seen as inflation hedges, like gold stocks (never my favorite, on principle – why waste all this effort mining more of something whose value derives precisely from its scarcity?). But rising interest rates, in and of themselves, are not good for corporate profits (it costs companies more to borrow). And they make stocks less attractive relative to interest-bearing alternatives (like bonds). Ah, you say, well, higher interest rates must be good for lenders, no? But banks, by and large, seem to do better when rates are low. I guess their cost of attracting funds tends to rise at least as fast as their ability to raise the price at which they lend. So stocks may rise when interest rates do (unless rates rise a lot). But it is a very rare stock indeed that will rise because interest rates rise. * How about them Oscars?! I love to think that a billion people saw it. I wish even more could. I think it makes us seem like the very decent people that, for the most part, we are.
Springtime Diversification March 22, 2002February 21, 2017 It was 43 years ago this day, or this week anyway, that Mr. Little assigned us to write a short essay on ‘Spring’ for our Seventh Grade English class. I remember this in part because I was so stymied by it – what on Earth would I have to say about Spring? What could I tell Mr. Little that he did not already know? Spring has sprung, the grass is green, it’s time to get things really clean. In choosing the season that has the most meaning, towards Spring, I must say, I am most likely leaning. For Spring, it’s well known, is a time of rebirth. And it’s also a time for a real thorough cleaning. Sure, I can be flip about it now, but at the time all I could think of was flowers and birds are really sissy things like that, and I could think of no way to give Spring an edge. But mainly I remember this assignment because of what happened next. The day after we turned in our essays, Mr. Little called on one of us – I think it was Lloyd Guller – to read his essay, which had won an A, and Lloyd read 100 words on the life and times of one Ed Spring, someone he had made up for the occasion. I was outraged, but Mr. Little thought his little tactic deserved an A for imagination. So here’s my essay: It’s Spring! (Though not in Bolivia.) A good time to buy ski equipment on sale. I don’t think we ever should have gone off Daylight Saving Time in the first place. The TIPS that mature April 15, 2032, with a 3.375% coupon and a face value that rises with inflation, were selling for under 99 yesterday. Not bad for a retirement plan. The end. Robert Doucette: ‘In a recent piece on the PBS News Hour you talked to a lunch-time bookstore audience about diversifying investments and a lot of them were emotionally opposed to it. William Bernstein’s book, The Intelligent Asset Allocator, gives a convincing argument. It graphs the risk/reward curves for pure portfolios and mixed stock/bond portfolios, and shows that adding a little bit of bonds significantly reduced the risk of an all-stock portfolio with little effect on the return. Would this convince people to reallocate their 401K, or is this whole area too complicated? I am concerned that there will be a movement to protect people’s 401K retirements that will have the government setting allocations.’ ☞ People will put too little into stocks when they’re cheap and too much into stocks when they’re dear. Nothing is likely to change that. The government certainly can’t, and I don’t think it will try. I do think, however, that it might be in order to outlaw, or at least make it more difficult, for people to keep more than 20% of their 401(k) in their own company stock. By ‘make it more difficult,’ I mean, for example, requiring people to read and sign a form that would make a really good case, in an engaging way, against doing this. It could conclude with this question: Why do you want to bet more than 20% of your retirement fund on your own company stock? [ ] a) I want to show that I am a loyal employee. [This is an admirable sentiment, but a terrible way to invest. Don’t do it!] [ ] b) Well, look how well the stock has done in the past! [Yes, but what matters is how it will do in the future. Very often, the stocks that have done best in the past do worst in the future. Your company is doubtless a fine one, and it may do very well. But do you really want to put all your eggs in one basket? For years, doing that looked so smart at Enron, so smart at Lucent, so smart at so many others. But what a mistake!] [ ] c) This is a terrific company with exciting plans! [How many companies do you think tell their employees that their prospects are dim and they have no exciting plans? Yet can everyone can’t be above average. And what if your company really is more exciting than almost any other, but the company’s stock price already reflects that?] [ ] d) I want to bet my entire future on just one company, no matter how reckless everyone says that is – and by an amazing coincidence, I have decided that the absolute best one stock in the whole world is . . . my own company!
Goldie Goes to Bhubneshwar March 21, 2002March 25, 2012 Goldie Cohen, an elderly Jewish lady from New York, goes to her travel agent. ‘I vont to go to India,’ she says. (I’m sorry I don’t know whom to attribute this story to, or how to reach Ms. Cohen to verify its accuracy. It has been going around the Internet.) ‘Mrs. Cohen, why India? It’s filthy, much hotter than New York, it’s full of poor, dirty people.’ ‘I vont to go to India.’ ‘But it’s a long journey, and those trains — how will you manage? What will you eat? The food is too hot and spicy for you. You can’t drink the water.You must not eat fresh fruit and vegetables. You’ll get sick: the plague, hepatitis, cholera, typhoid, malaria, G-d only knows. What will you do? Can you imagine the hospital? No Jewish doctors. Why torture yourself?’ ‘I vont to go to India.’ The necessary arrangements are made and off she goes. She arrives in India and, undeterred by the noise, smell and crowds, makes her way to an ashram. There she joins the seemingly never-ending line of people waiting for an audience with the guru. An aide tells her that it will take at least three days of standing in line to see the guru. ‘Dotz OK.’ Eventually she reaches the hallowed portals. There she is told firmly that due to the long lines she can only say SIX words to the guru. ‘Fine.’ She is ushered into the inner sanctum where the wise guru is seated, ready to bestow spiritual blessings upon his eager initiates. Just before she reaches the holy of holiest she is once again reminded: ‘Remember, just SIX words.’ Unlike the other devotees, she does not prostrate at his feet. She stands directly in front of him, crosses her arms over her chest, fixes her gaze on his, and says: ‘Sheldon, it’s your mother. Come home.’
Brock Inverses – Switching From Left to Right March 20, 2002February 21, 2017 Not long ago, I subjected you to a column about Arianna Huffington and David Brock, two former right-wingers who now say that they were, well, Blinded By the Right (Brock’s title) and have become pretty ardent opponents of the right. Brock’s book argues that there really is a vast right-wing conspiracy, and that he should know – he was a part of it. ‘Now, you may find a left-wing columnist or commentator who has recently seen the light and proclaimed himself a convert to the vision of Tom Delay and Trent Lott,’ I wrote in that column. ‘I can’t think of one. If you do, send me their names, which I pledge to report.’ Some e-mails arrived, but just a few. Michael Dokupil: ‘If there was ever an equivalent to David Brock it is Tammy Bruce’s new book, The New Thought Police: Inside the Left’s Assault on Free Speech and Free Minds. She is a pro-choice, lesbian activist, and former head of the LA chapter of NOW. I think that you owe it to your readers to at least point out that it exists. Per Amazon: ‘From rigid speech codes on college campuses to the knee-jerk use of such labels as ‘racist,’ ‘homophobic,’ and ‘hateful’ in an attempt to socially ostracize people with opposing viewpoints, speaking one’s mind today has become increasingly dangerous. What makes this book’s thesis especially powerful is that the author is a progressive . . .” ☞ Well, but I largely agree with Tammy Bruce. I think it’s terrible when a speaker is shouted down, and I think political correctness is a scary thing . . . although political politeness and sensitivity make a lot of sense. But the point is, according to Amazon, Tammy Bruce is still a progressive. She hasn’t renounced a woman’s right to choose and my guess is she doesn’t favor drilling in our national parks over promoting hybrid cars. So it doesn’t sound to me as if, having been an outspoken progressive, she has now switched to being an outspoken conservative. Yet that’s just what – in reverse – Arianna Huffington and David Brock have done. (Incidentally, for those who agree political correctness can be carried too far, check out a good nonprofit group called FIRE.) Michael Axelrod: ‘There have been a number of people switching from the Left to the Right. I don’t know what you mean by ‘recently,’ but here are a few that come to mind: David Horowitz. He was one of the founding editors of the ultra-left Ramparts Magazine in the 1960’s. Now he is a Bush supporter. His parents were communists, and he freely admits to being a ‘red diaper baby.’ Ronald Radosh. Another RDP who has converted to the right. Author of several books on communism and the American Left. Bernard Goldberg, author of Bias. He might not realize it (yet), but he has made the crossover from being a Liberal to a Conservative. Eldridge Cleaver. Author of Soul on Ice. Black Panther 1960’s radical left revolutionary. Became a Conservative and supporter of Ronald Reagan. Michael Novak. Not recent, but certainly a convert. The whole New York Neocon crowd are all ex-liberals. The above are just a few that occur to me, there are lots more.’ ☞ Well, yes, but by this standard, I guess I, too, have moved significantly to the right. As has, for that matter, much of the Democratic Party (and all of its leadership). For one thing, times have changed. There is less need now for the sort of radical protest that led, in 1965, to passage of the Voting Rights Act (not to say we’re where we need to be on race – or even on voting rights – but we’ve clearly come a long way) or that fueled the anti-war movement. In the Sixties, the left was all against ‘the war’ (and rightly so, in my view). In 2002, much of the left is all for it (again, rightly so). For another thing, we’ve learned from experience. There’s no shame in that. Quite the contrary, I think. (And we’re not the only ones. The Bush team seems to have learned, for example, that butting out of the Mid-East peace process, wasn’t such a good idea, after all, and is now, thankfully, butting back in.) We now know, having tried it, that programs like welfare can have terrible unintended consequences (while others, like the Peace Corps and AmeriCorps and, for that matter, the GI Bill and the Marshall Plan and the S.E.C. and Fanny Mae, to name just a few, can work rather well). Many traditional liberals have come to embrace the importance of market economics and free trade and fiscal prudence, while retaining their concern for the ‘little guy’ (known in an earlier era, I believe, as ‘the meek’) and for the environment. It’s a balance. Conservatives care about these things, too, but place the fulcrum further to the right. If the continuum runs from cradle-to-grave nanny state save-the-snail-darter-at-any-cost at the left edge to sink-or-swim no-government-except-for-the-military-and-the-police-to-protect-what-we-got at the right, my view is that the Democratic leadership has by now found a pretty good balance in the middle, while the Republican leadership has bumped up against the wall. Which is a too-long way of saying that 1970’s left-to-right conversions don’t count! At least not as counterpoints to Arianna Huffington and David Brock. These were folks who just a few years ago attacked the Clinton administration mercilessly, both on personal grounds and ideologically. And now, in effect, they are saying they were wrong. To me, the counterpoint would be someone who’d been a strong voice on the left or center-left – an Anna Quindlen or a Paul Krugman or a Frank Rich or a Michael Kinsley or an Eleanor Clift – doing an about face. Have you heard one of them – or anyone like them – saying, ‘I was wrong! I now see that Jesse Helms and Trent Lott and Tom DeLay have the right vision for our fragile world. Of course we need to drill in ANWAR and slash alternative-energy research. Of course we need to preserve the gun show loophole. Of course our top priority should be tax cuts for the top 1%.’ I have not seen columns like that.
Then Why Not Give Greenspan the Vestal Virgins? March 19, 2002February 21, 2017 72 VESTAL VIRGINS Trudy Karlson: ‘Did you read in the NY Times (Saturday March 2) that new translations of the Koran suggest ‘vestal virgins’ has been mistranslated? Apparently, in Arabic it just requires an additional diacritical mark, and the original scribes were writing about 72 ‘white raisins.” ☞ Oh! That’s different. Never mind. No one’s going to kill himself to have his way with a few dozen raisins. Let’s get the word out. PUMPING THE MONEY SUPPLY Joe Devney: ‘For several weeks after the September 11 attacks, I kept hearing that Alan Greenspan had helped the stock markets recover by ‘pumping liquidity into the system.’ Nobody ever said what that meant. The friends I asked weren’t sure, but suggested that it might refer to the series of interest rate cuts over the last year. So how does one ‘pump liquidity into the system?” ☞ Well, ‘one’ doesn’t – but the Fed can. It goes into the market and buys Treasury securities, paying for them with money it creates out of thin air. This increases the money supply, and when the supply of something increases, its price tends to fall. (If diamonds were as plentiful as blueberries, they would cost just a penny apiece.) The ‘price’ of money is the interest rate you pay to borrow it. The more plentiful the supply, the cheaper it will be to borrow, and the lower interest rates will be – at least short-term interest rates. (Long-term rates are a tougher nut for the Fed to affect, because the market is not stupid. The market knows that, however plentiful money may be today, it could become scarce tomorrow. And it knows that easy money could ignite inflation. No one wants to hold a long-term bond at a low interest rate if inflation is around the corner. So the Fed’s power to cut interest rates mainly applies to short-term interest rates – even though, in many respects, long-term rates are a lot more important.) Chances are, the Fed is done pumping liquidity and cutting interest rates. A good thing, too, as we had gotten fairly close to zero . . . like a plane coming in heavy and fast and managing to stop just a few dozen yards short of the end of the runway. Good job, Dr. Greenspan.
Covering the Boob and Drawing the Line at Justice March 18, 2002February 21, 2017 BOROWITZ REPORT March 15, 2002 Breaking News: IN LATEST MIX-UP, BIN LADEN RECEIVES MINNESOTA DRIVER’S LICENSE ☞ Ah, bureaucracy. THE RELIGIOUS POLICE From the BBC: Friday, 15 March, 2002 – Saudi Arabia’s religious police stopped schoolgirls from leaving a blazing building because they were not wearing correct Islamic dress, according to Saudi newspapers. In a rare criticism of the kingdom’s powerful ‘mutaween’ police, the Saudi media has accused them of hindering attempts to save 15 girls who died in the fire on Monday. . . . According to the al-Eqtisadiah daily, firemen confronted police after they tried to keep the girls inside because they were not wearing the headscarves and abayas (black robes) required by the kingdom’s strict interpretation of Islam. One witness said he saw three policemen ‘beating young girls to prevent them from leaving the school because they were not wearing the abaya.’ The Saudi Gazette quoted witnesses as saying that the police – known as the Commission for the Promotion of Virtue and Prevention of Vice – had stopped men who tried to help the girls and warned ‘it is sinful to approach them.’ . . . The school was locked at the time of the fire – a usual practice to ensure full segregation of the sexes. The religious police are widely feared in Saudi Arabia. They roam the streets enforcing dress codes and sex segregation, and ensuring prayers are performed on time. Those who refuse to obey their orders are often beaten and sometimes put in jail. ☞ My own conception, as some of you will remember from December 28, is that religion would serve us best if in the back of our minds we all realized that – as inspiring and comforting as it truly can be – religion is trumped by reality. Suicide bombers won’t really be surrounded by 72 Vestal Virgins (or even 72 pissed-off Virginians, as one of the Internet missives you’ve doubtless gotten a dozen times would have it). So when religion would lead us actually to hurt other people (e.g., stoning nonvirgin brides to death, as prescribed in the Bible), or even just to treat them unfairly (e.g., condoning slavery or the subservience of women – ibid), we need to adjust it for common sense and justice. Which perhaps leads us to . . . MORE CALICO CATS We have talked some about our Attorney General, John Ashcroft, whose dad’s church speaks in tongues and who himself is not about to be easily tricked by the devil. His private faith is entirely his own business, as is his right publicly to profess it at Bob Jones University and anywhere else he sees fit. If he wants to spend $8,000 of our tax money covering up a Justice Department statue because a boob is showing – artistic expression (and boobs) be damned – so be it. He is our Attorney General. I just hope he doesn’t get it into his head that the Washington Monument is a phallic symbol, because I’d hate to think what it would cost to drape that. Where his piousness scares me is where it conflicts with, or might be perceived as conflicting with, his official role. A possible example is the administration of survivor benefits from 9/11. You may have seen Special Master Kenneth Feinberg on ‘Meet the Press’ March 10. A Massachusetts liberal, Feinberg runs the September 11th Victim Compensation Fund under the aegis of the Attorney General. The good news is that Feinberg will grant taxpayer-funded compensation to a very wide group of victims, even including fetuses and illegal aliens. Apparently, the Attorney General himself made sure that Immigration would not penalize or deport illegal aliens who surface to get this compensation, nor take action against their employers for having hired illegals. You’ve got to admit that’s really putting compassion ahead of the law. But one’s got to draw the line somewhere. Where Feinberg draws it – and one suspects this decision may not entirely have been his own – is in granting compensation to gay Americans who lost their significant others in the tragedy. No can do, Feinberg says, if they live in a state that doesn’t recognize domestic partnerships. # Friday’s Washington Post reports that Ashcroft has ‘moved in recent months to consolidate his control over the Justice Department’s Civil Rights Division, turning over control of sensitive issues traditionally handled by career lawyers to more conservative political appointees.’ (You can never be too conservative when it comes to civil rights. Under Clinton/Gore, it really got out of hand.) Ashcroft has moved to put his stamp on voting rights, also. For the full story, click here.
A Slightly Higher Yield March 15, 2002February 21, 2017 Steve Reynolds: ‘Given the current rate for 5 year CDs at my local bank (3.15%) and the current stock market climate, what should a 59-year-old do with qualified cash that will be needed in 5 years? Fixed 5 year annuities are at 5.15% with a 5 year surrender period (no loads). NOW should I buy one?’ ☞ The most obvious way to beat your bank is a 5-year treasury note, currently yielding 4.34%, and subject only to federal (not state) taxes. I’d prefer this to the annuity (which after state tax might amount to about the same yield) because it gives you the flexibility to cash out early (with a small profit, no less, as you roll down the yield curve) without a surrender charge. You could also visit bankrate.com and rate.net to find CD’s that offer much better rates than you’re being offered. Or you could twist your broker’s arm to buy you TIPS, which would yield a bit more than 3% on top of inflation. You’d have to pay tax on the inflation adjustment each year, even though you didn’t get it, but for such a relatively short period of time, I can think of worse things. Are you sure you will need all this money in five years? Are will you just begin to need it then, and draw on it for 20 or 30 years thereafter? If the latter, consider a somewhat more aggressive strategy (and buy some TIPS, but for your tax-sheltered retirement plan). Have a good weekend!