Out of the crooked timber of humanity, no straight thing was ever made
Updated: 3 hours 14 min ago
Like others, I’m mystified by the “ice bucket challenge” in which, as I understand it, people agree to have a bucket of ice water dumped over their heads, rather than giving money to charity. This is reminiscent of the famous Piranha Brothers’ “Other Operation”, in which they threatened not to beat their victims up if they did not pay them the so-called “protection money”.
Still, it seems as if there is some interest in variants on the standard fundraising challenge in which you pay money to charity to encourage friends, bloggers, C-list celebrities to do difficult, painful or humiliating things. It’s struck me that my upcoming participation in the Sunshine Coast 70.3 Triathlon provides a nice twist on the ice bucket challenge. My target time is 7 hours, which would imply doing the run leg (21.1 k) around midday. As the name implies, the Sunshine coast weather is likely to be sunny and warm, even in early spring. So, when I’m finished I will be positively glad to have a bucket of ice water tipped over me. It will take a bit of effort to arrange this though, so here’s the challenge:
Donate as much or as little as you like to the charity or cause of your choice and record it in comments (honor system). If the total exceeds 10001, I’ll do my best to organize the icebucket and a photo.
Thanks to P O’Neill in comments to my last post, for suggesting both the idea for this poor-man’s Friedman travelogue and its title. The first installment comes to you from the youth hostel in Grindelwald.
I don’t really have much need of apocryphal taxi drivers to serve as sources of information and/or mouthpieces for my own views for this one. I got to know the Swiss (or at least, a fair number of a particular and possibly unrepresentative class of them) when I was working for Credit Suisse, for five years which were roughly coincident with the first phase of the Global Financial Crisis. CS wasn’t, and isn’t, recognisably a “Swiss Bank” in its London office, or at least not in the way that you could tell that ABN Amro was a “Dutch Bank” or BNP Paribas is a French one. Credit Suisse was basically an American investment bank – lots of people, including those who named the servers in the IT system, still hadn’t got the message that “First Boston” had been dropped from the name years earlier. The Swiss were almost like mythical creatures, who lived on the floors above the cafeteria, only dealt with the world’s super-rich and all knew each other. Then there were the equally mysterious people of “head office”, who were mentioned once a quarter at the time of the annual results; I presume that the fact that these announcements tended to roughly coincide with Samhain, Beltane, Lughnasadh and Imbolc was coincidental. But then there was “our Zurich office”, a little bit of First Boston in the heart of Credit Suisse, and these guys were our kind of people, although at the same time interestingly foreign. I also ended up making a good friend in the private bank, who probably doesn’t need her name dragged into this, but she was one of the most impressive people I met and is presumably scheduled for higher things within the bank at some time in the future.
Switzerland is one of those small countries of Europe, the existence of which makes a lot more sense when you consider that the alternative would have been for one Empire to let another have control of the territory. If you want to know what I mean, consider a map of the stretch of North Sea coast stretching up from Normandy in the direction of the Baltic and ask yourself why it is that such a huge country as Germany only has a scant few dozen miles of coastline and only two or three usable ports. What is it, the man wondered, about small, independent, trade-oriented countries like Denmark and the Netherlands that has made France, Sweden and Britain so keen on protecting their independence? To ask the question is to answer it, particularly when I gave such a strong hint. Similarly, the independence of Switzerland is not really underwritten by its geography, and the Swiss Army knows it – most of the big cities are located on easily accessible plains and the Swiss national defence plan has always been to abandon them. After all, Switzerland was actually ruled by Austria as recently as the days of William Tell. The independence of this little country is assured by the fact that it has long been understood by all the great powers bordering on the Alps that it’s probably in everyone’s best interests in the long term to have the key trade routes owned by a gang of ornery peasants who don’t want to be bothered by outsiders rather than having to fight over them all the time.
I often used to win bets by asking people how important they thought banking was to Switzerland’s GDP. Few people, even Swiss natives, guessed less than 20%; most common guesses were above 30%. The actual answer is around 12% (roughly the same percentage as the UK), and that’s for total financial services – since there’s quite a lot of insurance, that would mean that classic “Swiss banking” is even less important. What makes people think that banking is more important than it is seems to be the huge global operations of Credit Suisse and UBS. But, of course, the majority of these activities take place outside Switzerland and go into the GDP of the places where they happen – mainly the UK and USA. Which means that the Swiss government’s too-big-to-fail liability is massively out of proportion to the economic benefit of the banking industry to Switzerland. This fact was not lost on the Swiss in the aftermath of the 2008 UBS bailout; the report of their Experts’ Group on Too-Big-To-Fail remains the best thing written on the subject and has formed the (badly imitated) template for a lot of other policy responses. Actually, Switzerland’s largest industry, by quite a way, is pharmaceuticals and chemicals manufacturing, which traces its heritage in the country back to the arrival of a bunch of Huguenot dyers, running away from religious persecution in the 17th century.
The rumours of Swiss life being a little bit staid are not wholly unfounded. It’s a country where you can have a major political controversy when the Bourgeois Party splits from the Middle-Class Party. I have heard natives of Zurich claim that they would honestly prefer to live in Mogadishu than in Geneva; boredom is, after all, a form of pain. But I’ve also (thanks to a somewhat misguided attempt to save money on hotel reservations) sat in Geneva and eaten shashlik sitting next to guys with wrinkly blue tattoos. Even surprisingly small towns in Switzerland will have their Casa Dos Santos, or similar, serving specialitas Portuguesas for the immigrants who make up a large proportion of the country’s working class; in the chalet towns the garages and the vans driven by plumbing companies will have names like Da Sousa on the side of them.
Of course they’re not actually called the “Bourgeois Party” and “Middle Class Party”. But the slogan of the SVP is “Swiss People’s Party, the party of the middle class”, and the French name of the BDP is the “Parti bourgeois democratic Suisse”, so I think I can be allowed my joke.
5. Lotus Eaters
I suppose I ought to explain the title of this piece. It’s my suggested slogan for the Swiss tourism authorities – while Dublin makes a reasonable amount of capital out of Bloomsday and the setting of Joyce’s masterpiece, he actually lived elsewhere for most of his life. Along with Paris and Trieste, Zurich was one of the places where he lived for quite a while – from 1915 to 1919 and then again from 1941 until his death. He’s buried there, a factoid which rather obsessed me for a while; I visited his grave once during an afternoon when I had a couple of meetings cancelled. Ulysses and Portrait of the Artist were both published while he was living in Zurich. Joyce wasn’t the only misfit and artistic oddity to wind up in Switzerland; a fairly large percentage of the Berlin cabaret movement shifted there in the 30s. There’s quite a tradition of people ending up in Switzerland when their particular vision of the world started causing them problems back home.
The Swiss tradition of hospitality to free-thinkers and oddballs, of course, has its roots in the Reformation. As does the counter-tradition of hostility to and violent persecution of free-thinkers and oddballs. Driving down from Geneva to Interlaken, I saw a banner up for an exhibition of Amish art and furniture, the Amish of course being (as I’m sure you’ll remember) a name originally derived from the followers of Jacob Amman, an Anabaptist leader from Bern. Most of the American Amish are actually members of the theological lineage of Menno Simmons, a Dutch Anabaptist, or of some other group related to the Anabaptists, but the movement got its first big break in Switzerland, at the time calling itself the Swiss Brethren. Ulrich Zwingli (himself a religious oddball to begin with, and so was John Calvin; they did better at playing the political game) was deputed by the Zurich town council to meet with them every couple of weeks to see whether or not any progress could be made on this infant baptism business; the Protestant cantons had just finished kinda-sorta losing the Kappell Wars against the Catholic cantons, and were keen to avoid any further schisms.
Then the terrible business in Muenster happened (summary for people who didn’t do the Reformation for A-level history – Anabaptist sect took over in Muenster, went a bit cultish, started executing people for not being Anabaptists, much panic, town retaken, genitals nailed to city gates, massive disaster in which some hopeful socialist historians claim to be able to see the beginnings of class consciousness), and the political weather changed decisively in terms of people’s willingness to put up with the Swiss brethren, who now looked less like earnest god-botherers and more like worrying bearded freaks. Setting in chain a set of events which led to that Harrison Ford film and so on.
The modern parallels are presumably so obvious as to not need labouring.
The villain of the William Tell legend was, of course, a foreign tax collector (specifically, the Austrian reeve, but the causes of the historical rebellion which formed the Swiss Confederation was tax). It’s probably a little bit ridiculous to try and draw a direct link from this to the Swiss policy on tax evasion that prevailed between the end of the Second World War and the mid 1990s, but that isn’t the reason not to try – the reason why one shouldn’t bother with this analogy is that the policy in question is dead. It was never a specific Swiss thing – banking across a lot of Europe was secret in the postwar period, and for very good and obvious reason. The Swiss did have a particular issue with their tax law which never failed to enrage American tax collectors, which was that they made a distinction between “tax fraud”, a felony which involved a fraudulent document, and “tax evasion”, a misdemeanour offence. Misdemeanours weren’t extraditable and Switzerland wasn’t prepared to make exceptions in its domestic banking secrecy law for them either. Fundamentally, Switzerland didn’t for the longest time see any real role for itself as an unpaid law enforcement officer for other countries.
8. The Lestrygonians
A strange reminder of how much national boundaries matter even in this allegedly globally connected world – in the kitchen of my chalet is a roll of aluminium foil. An incredibly commoditised product, with huge economies of scale in its manufacture, and here we are, less than fifty miles from the border with France. But no, this was made in Bern.
9. Scylla & Charybdis
I’m surprised that the country of Switzerland doesn’t have a more prominent place than it does in the bestiary of the John Birch Society, the LaRouche movement and similar exemplars of the paranoid tendency. Twentieth centry reactionaries tended to be marked out by their horror and fear of the decline of absolute standards in anything; Switzerland provided the modern and post-modern era with the destruction of classical physics with Einstein, and with radical change to the concept of the narrative novel with Joyce. Even LSD was first synthesised by the Sandoz laboratory in Basel. Switzerland has always been a country where the law is malleable and changeable rather than an absolute standard, simply because of the importance of referenda in the constitution, and the history of federal government. The national character has always been based on a kind of pragmatism and compromise which is easy for an outsider to mistake for relativism.
10. Wandering Rocks
One thing that you tend to pick up pretty soon when working for a Swiss company, unless you are very unobservant indeed, is that the senior Swiss guys all know each other because they’re all in the Army together. It is possible to opt out of continuing service in the Swiss Army reserve after you’ve done your compulsory duty (and even that can be done in non-military service). But this doesn’t seem to be the way to a successful career if you want to stay in Switzerland and be a business executive. So Switzerland has an army of middle managers, which in my opinion is probably a pretty frightening prospect for anyone thinking of attacking them, as these are middle managers who have been given a single aim (defend Switzerland) for decades, plenty of time to practice and budgets which have to be considered for practical purposes to be inexhaustible. That’s the sort of situation that can get aircraft hangars built into the sides of mountains, tunnels that double as horrific tank-traps and Alpine passes that can be rendered impasses at the touch of a button. Even the low-lying cities like Basel would, according to highly classified rumour, be able to provide a number of nasty suprises to any machanised army which decided to detour through them.
The thing that the Swiss Army hates above all else, of course, is helicopters.
11. The Sirens
Arguably, a number of Switzerland’s other industries have, to say the very least, developed symbiotically with the offshore banking industry. If you have a load of money stashed away in Switzerland which you haven’t declared to your domestic taxman, then it’s surprisingly hard to spend it; bringing the stuff onshore is always going to raise questions. But on your annual visit to Switzerland, this secret stash of money at the end of the rainbow turns into a proper, spendable balance of liquid assets! So you can have a really slap-up holiday with all the treats you can force into yourself. You can get your teeth straightened or your tummy tucked. You can even get your kids put through a really posh education. If you’re looking for examples of how the financial services industry can support a number of other cluster specialties, the in flight magazine of Swissair is a fine place to look.
Another thing you can do is buy yourself a really really expensive watch, and presume that the fellow at Customs on your return won’t get impertinent about asking whether it’s the same one you were wearing when you flew out (he almost never does). The Swiss watchmaking industry dates back a long time earlier than the offshore banking industry, but it seems very likely to me that the development of the high-end watch market into basically a jewellery segment wasn’t substantially aided by the fact that watches are probably the best way known to man of smuggling a few multiples of the US$10,000 money laundering reporting limit.
The ban on construction of minarets, imposed by referendum in 2009, is a reliable source of embarrassment to the “international class” of Switzerland – the people who you tend to meet in the course of business or banking. In my experience, German-speakers tend to blame it on the French (“terrific racists, the lot of them”) while French-speakers tend to blame it on the inner cantons (“people whose surnames end in li and le, hillbillies, basically”). The fact that the ban passed is, of course, a useful reminder to the rest of us that the international, outward-oriented business class of Switzerland is by no means the entire population and in this case at least, wasn’t even a majority.
The minarets ban was the proximate cause of the split between the Bourgeois Party and the Middle Class Party, but I can’t remember which one was against it. Its supporters claimed that it was not a measure against Islam per se, but against all forms of fundamentalism in religion, which is something that makes a little bit more sense if you put it in the context of the history of Switzerland and extremist religious movements. Albeit that “makes a little bit more sense” still leaves the measure in the realm of making more or less no sense at all.
It can be presumed that the Saudi and Emirati billionaires who are the current growth segment for the Swiss private banking industry are not stowing their money in Switzerland in order to avoid Saudi and UAE income tax. My reason for believing this is that neither Saudi Arabia nor the UAE have any income tax. They’re putting it there because Switzerland has been a politically stable, neutral country for several hundred years now, while the Gulf states have existed for only a little bit more than half a century and have fairly obvious political tensions surrounding them. This is one of the very important points made by Taleb in “Antifragility” – that a good basis for guesstimating how long a political or social institution is going to last is to ask how long it’s lasted already.
This stability, neutrality and reliability seems to be very important to the Swiss conservative temperament – for the kind of people who vote in favour of banning minarets, the bankers of Geneva and Zurich seem to be regarded as untrustworthy, destructive and bad in and of themselves, but valuable simply because they’ve been around for such a long time and are therefore symbols of the eternal persistence of the Swiss Confederation. Certainly, when I was following the debate about bank regulation in Switzerland, one of the chief sources of populist rage against the banks in Switzerland was that they had damaged the reputation of the banks in Switzerland. The right-wing party in the parliament was often in the odd position of simultaneously allying with the socialists to demand public flogging and supertax, but also decrying any movement at all in the direction of compromise with the US tax authorities.
14. Oxen of the Sun
If I had sufficient spare time and a wholly warped sense of priorities, I think I could trace the boundaries of the wars of religion by driving around and listening to regional radio. As far as I can tell, Catholic cantons really go for snare drum backbeats and 2/4 time – if Mumford and Sons aren’t huge in Vaud, they are really missing an opportunity. Protestant cantons are much more into generic AOR. Everywhere in Switzerland gets a signal for the Europop collossus that is RTL2. However, the country does not seem to have any local attempts at hip-hop, for which I greatly respect them.
Of course, the position of Switzerland in the global economy means that the “fortress in the Alps” myth has to be a myth – there are really not many countries in the whole world that are more at the mercy of international forces, and by the hegemony of the USA specifically. The drugs industry in Switzerland, like everywhere else in the world is entirely driven by FDA approval. The banking industry’s self-anointed sense of independence lasted roughly five minutes after the US authorities decided to make a priority out of doing something about it.
Because Switzerland is a politically stable and neutral country with a good reputation for trustworthiness, it’s a good place to locate your trade association or standards organisation. Partly, this is an industry that’s grown up synergetically with the United Nations; in the immediate postwar period it must have made sense to have FIFA, the WIPO and similar bodies based there too. One of the more interesting companies I looked at was SGS, the Societe Generale de Surveillance, which will inspect your tanker loads of olive oil to see if someone has switched them for seawater, test your machine parts by the ten thousand to see if they’re made to the advertised tolerance, and generally carry out all sorts of services that have grown out of its original business model as the site inspectors at the massive bonded warehouses in the commercial zone outside Geneva. There are a lot of things that happen in Switzerland which don’t make any sense at all outside of the context of the global economy. It’s a country that is proudly independent, but which knows that it can’t really be too independent if it wants to be prosperous..
The median Swiss private banking customer is, according to the industry joke, “every year, getting older and more female”. It’s a description of the gradual death of the European offshore banking franchise, basically from a mixture of two parts international tax treaties to eight parts demographic change.
What happens is this; consider Olaf, who survived the war and took his part in industrial reconstruction. As his manufacturing business grew, he kept sticking a bit of money away in Switzerland; if the memory of the 1930s wasn’t enough to make him cautious, the overhanging threat of Communism would. Life goes on and so does the world, but Olaf never changes his policy of sticking a proportion of his savings into his Swiss account – why would he change? He’s been given truly excellent service from his trusty account manager since the early days. Olaf has a great suntan, beautifully educated kids and a really nice watch.
Then he dies. Not much changes as the estate is passed on to Gerta, but sadly, she doesn’t live much longer. So now the estate, including the offshore account, has to be dividend up five ways between the kids; possibly even including the grandkids or nephews and nieces. These people of course knew that Olaf was a rich man, but they tend to be somewhat surprised to find out exactly how much a regular savings account can build up to if it’s kept pace with stock market returns and been largely invested in hard currency.
Unfortunately, there is now an awkward moment, where a Swiss lawyer expresses his condolences, and then informs the grieving children that they have a maximum of 48 hours to decide whether they want to start a career as tax evaders. What would you do? Particularly since Olaf’s fortune needs to be split up; a pot of $10m is a borderline ultra-high-net-worth account, but when you split it into units of $2.5m, and each of the heirs pays off their mortgage, what’s left isn’t so much of a fee income generator. And so the old European money which was the bedrock of Swiss banking profitability declines, and they have to seek out new markets.
The railways are, of course, a source of wonder to the rest of the world and no less so for being such a cliche. They don’t actually always run on time; mine were generally between five and ten minutes late. But they go everywhere; the SBB, great though it is, is not the real miracle of Switzerland compared to the dozens of little cantonal and sub-regional railways that serve even the smallest little towns on rails carved into the roads or running alongside them. This sort of infrastructure asset doesn’t depreciate if maintained properly, and it keeps providing the services for which it was intended in all economic climates. It’s a classic illustration of a point that John Quiggin has regularly made – that classic “risk-adjusted” discounted cash flow analysis will always overstate the risks of government spending and result in underprovision of infrastructure.
As we drove from the airport, we turned away from Lake Geneva to go up into the Alps. Before the road turns up into the col, it goes along a valley floor, which stretches out ahead of you, seemingly endless until it turns up into forests and rocks. Way out in the distance, we saw a plume of white smoke rising, dead vertical in the windless valley. About half an hour later, we saw it was rising from a chemical refinery.
Inside Higher Ed has gotten some of the preliminary documents on the back and forth between Chancellor Wise, officials at the University of Illinois (including a top person in charge of fundraising), and a high-level donor, before Wise made her initial decision to dehire Steven Salaita. There’s still a lot we don’t know about the external and internal pressure that went into this decision (though from my own experience with this issue I can only assume that that fear of external financial pressure was very very high on the part of the university’s administrators), and as the article notes, none of these emails tells us what ultimately prompted Wise to make the decision she did. Still, it’s telling that in the days leading up to her decision, she received 70 communiques (in one instance from a very high-level donor), regarding the Salaita hire, only one of which was urging her to keep him on board.
The communications show that Wise was lobbied on the decision not only by pro-Israel students, parents and alumni, but also by the fund-raising arm of the university.
For instance, there is an email from Travis Smith, senior director of development for the University of Illinois Foundation, to Wise, with copies to Molly Tracy, who is in charge of fund-raising for engineering programs, and Dan C. Peterson, vice chancellor for institutional advancement. The email forwards a letter complaining about the Salaita hire. The email from Smith says: “Dan, Molly, and I have just discussed this and believe you need to [redacted].” (The blacked out portion suggests a phrase is missing, not just a word or two.)
Later emails show Wise and her development team trying to set up a time to discuss the matter, although there is no indication of what was decided.
At least one email the chancellor received was from someone who identified himself as a major donor who said that he would stop giving if Salaita were hired. “Having been a multiple 6 figure donor to Illinois over the years I know our support is ending as we vehemently disagree with the approach this individual espouses. This is doubly unfortunate for the school as we have been blessed in our careers and have accumulated quite a balance sheet over my 35 year career,” the email says.
These revelations follow on the heels of the University’s announcement on Friday that it was sticking to its guns on the Salaita dehire. The basis of this decision, at least rhetorically, is this statement from Wise:
What we cannot and will not tolerate at the University of Illinois are personal and disrespectful words or actions that demean and abuse either viewpoints themselves or those who express them. We have a particular duty to our students to ensure that they live in a community of scholarship that challenges their assumptions about the world but that also respects their rights as individuals.
It’s a strange and strained position, as many have noted. Particularly that tender if rather solicitous regard for protecting the feelings of “viewpoints themselves.” Notice that Wise’s statement does not make any distinctions between tenured, non-tenured, prospective faculty, or students. It’s simply a statement that “what we cannot and will not tolerate at the University of Illinois are….words…that….” It’s a rather breath-taking assertion. In the words of University of Chicago professor Brian Leiter:
As a matter of well-settled American constitutional law, the University of Illinois must tolerate “words… that demean and abuse either viewpoints themselves or those who express them.” The University has no choice, both as a matter of constitutional law and as a matter of its contractual commitment with its faculty to academic freedom. Scathing critiques of both viewpoints and authors abound in almost all scholarly fields; it would be the end of serious scholarly inquiry and debate were administrators to become the arbiters of “good manners.” More simply, it would be illegal for the University to start punishing its faculty for failure to live up to the Chancellor’s expectations for “civil” speech and disagreement.
In many of my courses, I teach Nietzsche, who heaped abuse on viewpoints and the individuals who expressed them. So did Marx and Hobbes, for that matter. On the chancellor’s standard, I or one of my counterparts at the University of Illinois should not be allowed teach Nietzsche, Marx, or Hobbes at the University of Illinois: too disrespectful of other viewpoints, too demeaning of those who hold them. And “what we cannot and will not tolerate at the University of Illinois are….words…that….”
In the meantime, the boycott of the University of Illinois grows stronger. As of Saturday, we had over 3000 scholars declaring their refusal to engage with the University until Salaita is reinstated. If you want to join a specific pledge from a discipline (philosophy’s going like gang-busters; John Protevi emailed me after I came up with these numbers below saying that they’ve now got over 450 philosophers signed up) or wish to sign the general statement, here are the critical links:
The university is banking on the notion that more than 3000 scholars boycotting it are the end of the story; we have to make it the beginning of the story. If you’ve already joined the boycott, get someone else to join. If each one of you did that, we’d double our numbers in no time. And if you’re not an academic but want to tell the UI to reinstate Salaita, you can sign this petition. More than 15,000 have.
Most important, it looks like Salaita is now going to have file a lawsuit against the UI. The university has time and money. Salaita has neither. As his friends and colleagues who are organizing a campaign to raise money on his behalf note:
Salaita now has no job nor does his wife who quit her job in Virginia to support the family’s move, no personal home to live in, and no health insurance for their family, including their two year-old son.
So Salaita needs our financial support; we can give it to him. Even a little bit. His friends and colleagues have organized a page where you can donate money to his legal campaign. Please click on the Paypal link on the right-hand side of the page. I’ve made a donation; please make one, too.
Lastly, if you haven’t read Bonnie Honig’s letter to Phyllis Wise, do it now.
Until I got the boot a couple of years ago, I had a regular column in the Australian Financial Review. Since then, I’ve been freelancing, with mixed success. Friday was a good day, with two pieces appearing within a few hours of each other. This one, at the Guardian is on the obsolescence of the late 19th and 20th century idea of the Press (or the media) as an institution with special rights and responsibilities.
The other was a reply to an editorial in the local Murdoch paper, pushing the case for privatisation. They printed it, which is more than the national Murdoch rag (The Australian) has done in similar cases. It’s over the fold
In a recent editorial, the Courier-Mail bemoans the fact that nearly thirty years after Paul Keating began the privatisation agenda, three in four Queenslanders are still opposed to the sale of public assets. In fact, the situation is more dire than that. Back in the 1980s when Keating ‘instinctively’ grasped the case for privatisation, opinion polls suggested that much of the public was receptive to the idea: publicly owned utilities were seen as slow and stodgy and didn’t have much of a reputation for public service.
Public opposition to privatisation isn’t the result of fear of the unknown or misunderstanding of the arguments. Rather, it’s the product of decades of experience. Far from producing lean, innovative and customer focused organizations, privatisation and corporatisation have given us bloated and overpaid management, higher prices, and customer service that ranges from limited to appalling.
On the other hand, privatisation has been a boon for the financial sector and for the various associated services (legal, accounting, consulting and so on) that dominate the CBD, and the thinking of those who work there. The result is a deep, and enduring, disconnect between the views of the policy elite and those of the general public.
The core of the editorial is the sentence “It does seem amazing that three out of four Queenslanders still can’t accept what is a pretty basic argument that governments don’t have any business running ports or selling electricity”. There are two big problems here.
First this isn’t an argument but an ideological assertion. While the ideology of privatisation is almost universally accepted among the policy elite and in the financial sector, it’s the reverse of the view that prevailed in Australia for most of our history, and worked well enough to provide us with the assets we are now arguing about.
The idea that governments should get out of the infrastructure business, leaving the funding of new investments to the financial sector came into vogue during the economic crisis of the 1970s. For a while, it seemed to be working well, as financial markets boomed in the 1990s. But, in the wake of the Global Financial Crisis, the idea of leaving everything to the financial sector looks less appealing.
More seriously, the public has never been given any serious opportunity to debate the free-market case for privatisation, presumably because politicians realised it was unsaleable. Although the statements of former ministers make it clear that the Bligh Labor government was fully convinced of the free-market case, nothing of the kind was presented to voters.
Instead, we got a spurious case based on the idea that we could sell income-generating public assets and use the proceeds to fund investments in schools and hospitals. The question of how the income flow from the privatised assets would be replaced was never addressed. The Bligh government’s case was so misleading that more than 20 leading economists, including advocates of the free-market argument for privatisation, signed a statement condemning it.
Treasurer Tim Nicholls has gone one better. In his presentation, embodied in the ‘Strong Choices’ website and echoed in the Courier-Mail editorial, we can not only use the proceeds of asset sales to build infrastructure, we can simultaneously use the same money to pay down debt and then spend the interest savings on schools and hospitals.
The Courier-Mail suggests that critics of privatisation are telling us we can have our cake and eat it. But the pro-privatisation case is even worse. It is a magic pudding that we can it seems, slice and eat, however many times we want.
The sad truth, admitted even by the government’s own Audit Commission, and recognised by the public response to the Strong Choices website is that there are no magic puddings.
Successive governments have sold us the myth that Queensland can be a low tax state while still enjoying public services of the same quality as high-tax southern states. While the mining boom lasted, this might have been true. But now we face a clear choice: either pay the same taxes as other states, or accept overcrowded schools and second-rate health services. This choice, and not the financial chicanery of ‘Non–Share Equity Interests’ is what we should be debating at the next election.
I wrote not long ago about the zombie idea that the US ban on agricultural use of DDT, enacted in 1972, somehow caused millions of people elsewhere in the world (where DDT remains available for anti-malaria programs) to die of malaria. A thorough refutation is now available to anyone who cares to look at Wikipedia, but the notion remains lurking in the Republican hindbrain.
So, with the recent outbreak of Ebola fever (transmitted between humans by direct contact and bodily fluids), the free-association process that passes for thought in Republican circles went straight from “sick people in Africa” to “DDT”. Ron Paul was onto the case early, with stupid remarks that were distilled into even purer stupidity in a press release put out by his organization. Next up, Diana Furchgott-Roth, of the Manhattan Institute.
Checking up, I found that Furchgott-Roth was formerly chief economist of the US Department of Labor, a position I associate with sober wonkery. Others to hold the position include Laurence Katz, Jesse Rothstein and Betsey Stevenson, none of whom have ever said anything crazy, at least to my knowledge. But it turns out that all of these, and other sensible economists I’ve heard of in this job, were appointed by Democrats, while Furchgott-Roth was appointed by George W. Bush. The only other Repub appointee I could find, Morgan Reynolds, turns out to be a truther, who believes that that the mainstream versions of the JFK assassination, the Oklahoma City bombing, and the 9/11 attacks are all lies. Since Reynolds was appointed in 2001, and left the job in 2002, he was obviously not a known truther and presumably not a known conspiracy theorist at the time, but his publication list makes it clear that he has long been a rightwing crank. He’s currently adjunct scholar with the Ludwig von Mises Institute in Auburn, Alabama.
2700 Scholars Boycott UI; Trustees to Meet Tomorrow; Salaita’s Teaching Evaluations Superb; Philosopher Cancels Prestigious Lecture (Updated) (Updated Again)
I’m still on vacation and mostly staying offline but I wanted to do a quick update on the Salaita affair.
1. Tomorrow, August 22, the Executive Committee of the University of Illinois Board of Trustees is scheduled to meet again. The Executive Committee met on Monday, August 18. In an email, Phan Nguyen wrote to me, “According to the listing of BOT Executive Committee meetings on the website, there haven’t been two such meetings held within four days of each other” in quite some time, if ever. But where the Monday meeting agenda explicitly stated that employment and litigation matters would be discussed, the agenda for tomorrow’s meeting specifies no topics for discussion. And where Monday’s meeting was listed a closed meeting, this meeting doesn’t say if it’s closed or not.
2. Going into Monday’s meeting, many of us thought something —a decision, a deal, something—was afoot. But according to this report in the local media, no decisions were made at the meeting.
“There are a number of issues being discussed,” President Bob Easter told The News-Gazette after the meeting, but trustees are “not at a place where I can say” if resolution is close. He declined to talk further because it was a closed session about personnel.
Ali Abunimah has some further news:
However two sources familiar with the case separately confirmed that there has been no discussion of a settlement and no proposal of a settlement from either the university or from Salaita.
Both sources asked not to be identified as neither is authorized to speak publicly about the matter.
3. One of the issues that comes up frequently among the University of Illinois’s defenders is that Salaita’s tweets suggest he might create a hostile environment for students, that he’s not fit for the classroom. It’s a strange claim to make under any circumstance—how I am on Twitter bears little relationship to how I am in the classroom or in my interactions with students; all of us have different relationships with different people, and we act differently in different circumstances—but in Salaita’s case it’s especially strange because he actually has a demonstrated track record as a teacher that the University of Illinois could consult.
Salaita taught for eight years at Virginia Tech, and like most professors, he was evaluated by his students every semester. According to this report, these were the results:
The student evaluations for Steven Salaita are stunning.
In Fall 2009, 29 of 30 students responding rated Salaita’s “knowledge of subject” as “Excellent”. In the same course, 93 percent of students rated Professor Salaita’s “overall rating” as “excellent,” and 2 as “good.”
In the same term, another group of students gave Salaita nearly identical—though even better —marks: 29 of 30 rated him “excellent” for knowledge of subject, 30 of 30 graded him excellent for grading fairness, and 93 percent rated him “excellent” for overall rating, 1 good.
These numbers repeat consistently over all six of the courses Professor Salaita submitted for review. The lowest rating he received in the “excellent” category for “overall rating” was 86 percent. Salaita never received, in any of the six courses evaluated, a single rating of “poor” for any of ten categories of teaching reviewed. In his lone graduate seminar, he scored a perfect 100 percent rating of “excellence” in the category of “overall rating.”
But for purposes of our argument, it is especially important to note student evaluations of Professor Salaita in the category of “concern and respect” for students. Here is where students evaluate their professor for professional empathy, respect for diverse points of view, and sensitivity to student opinion and student lives.
In the six courses reviewed Professor Salaita scored as follows in this category:
# of Students
30 Total: 28 Excellent 2 Good
30 Total: 30 out of 30 Excellent
10 Total: 10 out of 10 Excellent
29 Total: 28 Excellent 1 Good
28 Total: 28 out of 28 excellent
28 Total: 25 out of 28 excellent, 2 good, one No Response
In addition to these metrics, Professor Salaita submitted a peer review letter of his teaching by a Virginia Tech colleague in English. This colleague visited Salaita’s classes to provide the department an assessment of Salaita’s teaching.
The letter cites Salaita’s numerical excellence in student evaluations, but goes on to praise his teaching in terms that would be the envy of Professors everywhere:
While the numbers are impressive, the student comments bear out in detail how deserving Steven is of the high ratings. The students are acutely aware that they are privileged to be studying with a well-regarded scholar, who draws his knowledge from years of study and experience. Steven is perceived as being knowledgeable and accessible—he takes time to talk with students and to encourage them in preparing their writing assignments… When asked questions in class, Steve gives factual and thoughtful replies. It is clear to all that the teacher has mastery of his field.
Salaita’s colleague goes on to say:
The classes I visited focused on several very contemporary bodies of literature, most specifically Arab-American literature. These works are difficult to understand and appreciate fully without the help of a good guide who knows the turf. Professor Salaita is extremely well-informed on the history and current status of the many nations, political parties and religious sects of the Middle East. This subject matter is urgently important not only for specialists in international affairs, but for anyone seeking to better understand the violent and volatile contemporary world.
This record shows only one thing: that Steven Salaita is an outstanding classroom teacher.
4. The campaign on behalf of Salaita has gathered steam. Yesterday, philosopher David Blacker canceled his scheduled appearance at the prestigious CAS/MillerComm lecture series at the University of Illinois. In a letter to the university, he wrote:
I regret to inform you that I must cancel my CAS/MillerComm lecture at the University of Illinois scheduled for September 29….
I have decided I must honor the growing worldwide pledge of academics not to appear at U. of I. unless the Salaita matter is acceptably resolved….
…Instead of choosing education and more speech as the remedy for disagreeable speech,the U. of I. has apparently chosen “enforced silence.” It thus violates what a university must stand for—whatever else it stands for—and therefore I join those who will not participate in the violation. In my judgment, this is a core and non-negotiable issue of academic freedom.
My hope is that the U. of I. will relent and restore its good name. I would be delighted to reschedule my talk if and when this happens.
5. I haven’t got complete updates on the boycott campaign, but here are some new numbers (if I don’t have new numbers, I don’t list the petitions here; for a fuller list, go here):
Philosophy: 241 (including our very own Chris Bertram)
Political Science: 169 (including our very own Henry Farrell and myself)
Contingent academics: 210
Along with our other signatories on other petitions (for which I do not have updated numbers), we’ve got 2716 scholars committed to not engaging with the University of Illinois until Steven Salaita is reinstated.
A more general petition calling on the University of Illinois to reinstate Salaita has over 15,000 signatures.
Updated (9 pm)
The Education Justice Project at the University of Illinois at Urbana-Champaign has been carefully observing the growing international academic boycott of our campus and weighing the potential impacts upon our Strategies for Action National Conference on Higher Education in Prison. After thoughtful deliberation, we have canceled the national conference.
This decision has not been easy.
We reached this decision after consulting with conference presenters and attendees, directors of other prison education programs, members of the higher ed in prison listserv, and with members of the Education Justice Project. We concluded that for EJP to host the conference at this time would compromise our ability to come together as a national community of educators and activists.
Updated (10 pm)
Yet another scholar has pulled out from a distinguished lecture series at the University of Illinois. This time it’s Allen Isaacman, Regents Professor of History at the University of Minnesota.
… persuade them to stop being rightwingers
(This is a cross-post from my blog)
I have a piece in (Australian magazine) Inside Story arguing that the various efforts to “frame” the evidence on climate change, and the policy implications, in a way that will appeal to those on the political right are all doomed. Whether or not it was historically inevitable, anti-science denialism is now a core component of rightwing tribal identity in both Australia and the US. The only hope for sustained progress on climate policy is a combination of demography and defection that will create a pro-science majority.
With my characteristic optimism, I extract a bright side from all of this. This has three components
I expect lots of commenters here will disagree with one or more of these, so feel free to have your say.
fn1. Or, in the case of young people, not to start.
The statue of Abraham Lincoln in Westminster arrived in 1920. The former US Secretary of State Elihu Root presented it in July, noting its place of honor on Parliament Square among “memorials of British statesmen” and in a place “where the living tides of London will ebb and flow about it.”1 The somber and elegant piece is a product of the great sculptor Augustus Saint-Gaudens – son of a French father, Root noted, born in Ireland – artist of the memorial to the 54th Massachusetts and the Double Eagle as well as the Adams memorial. Saint-Gauden’s Lincoln is a fine sculpture.
It is also a bit of a cuckoo: it took the place meant for George Barnard’s Lincoln, which now stands in Manchester, because Barnard’s Lincoln was alleged to look like a “tramp with the colic.”
The Lincoln who stands in Manchester is a copy of the Lincoln who stands in Cincinnati. An American Peace Commission originally meant to send this Lincoln to London. But Robert Todd Lincoln, the president’s son, hated it – “grotesquely absurd,” he said; he thought it a “general deformity.” Others who remembered Lincoln described the Barnard as “uncouth and slouchy,” and “ungainly,” as well as “too lugubrious.”
Speaking for himself, Barnard had said he wanted a Lincoln who looked like a laborer, and took for his model a man who had cut wood for a living until the age of 40.2
Ultimately the Barnard-haters won, and secured the Saint-Gaudens statue for London. The Barnard would go to another suitable British city. Manchester stepped forward. The Guardian welcomed it, saying it
is anything but conventional, and to those accustomed to the sentimentalism which marks most of the statues in our squares and buildings it comes as something of a shock.… the sculptor almost fiercely thrusts forward the clumsiness and disproportion of Lincoln’s figure, as though to say, ‘Here is a man who needs no sentimental treatment.’…
[N]othing could better recall that great, self-sacrificing complement to the civil war which Americans will never forget, when the Lancashire [mill] operatives were content to go hungry that America might be united and free.3
The dearth of southern cotton during the US Civil War deprived Lancashire’s mills of their raw material. Workers did indeed suffer. But at the end of 1862, the mill workers met at Free Trade Hall in Manchester and passed a motion in support of Lincoln, the blockade, and the end of slavery.
Lincoln replied, saying he had “reckoned on the forbearance of nations” on the supposition that “[a] fair examination of history has served to authorize a belief that the past actions and influences of the United States were generally regarded as having been beneficial toward mankind.” But the gesture of the Manchester workers, in the depth of their own suffering, he thought “an instance of sublime Christian heroism” and “an energetic and inspiring assurance of the inherent power of truth and of the ultimate and universal triumph of justice, humanity, and freedom.4
Manchester’s Lincoln arrived earlier than London’s, in September 1919.5 But it was not until 1986 that Manchester’s local council (with a Labour majority) moved the statue to a new location, near Bright and Cobden.6
At the moment, if you wander by the Lincoln statue, you can touch your mobile phone to it and get a telephone call from the man, voiced by Tom Conti, as part of the Talking Statues project. Or you can hear it here.
The University of California, Davis, is located immediately next to – across the street from – the city of Davis, California. Davis has a population of about 66,000, about 70 percent of whom have completed at least a bachelor’s degree from university. It is a low crime area.
The Davis police force has recently acquired a Mine-Resistant, Ambush-Protected vehicle (MRAP) from the Defense Department under the program described here.
The acquisition “is a reflection of the reality that officers need protection as they try to subdue gunmen barricaded inside buildings and elsewhere,” police say.
Reading Jon Chait this morning:
With predictable fury, supply-siders have denounced this heresy [that Reagan-era supply-side policies might not be optimal today, even granting that they were in 1980]. You can get a flavor of the intra-party debate in columns appearing in places like Forbes or The Wall Street Journal, the later of which retorts, “Good economic policy doesn’t have a sell-by date. (Adam Smith? Ugh. He is just so 1776.)”
The quote is a few months old, but – wow! – what an evergreen formula for zombie economics!
Good economic policy need not be formulated with reference to the economy.
I think maybe we need something a bit more science-fiction-y. Instead of the Laffer Curve, we have the Laffer Event Horizon, which is located in 1974, when Laffer sketched his famous curve on a napkin. After 1974, the economy fell into a black hole, for tax purposes. Specific facts about it could no longer cross the boundary of the Laffer Event Horizon, for policy purposes. A bit more precisely: within the black hole, all tax-like-paths – must be warped down and down, eventually to zero. Especially taxes on the rich.
Just a thought.
Watching the nightly demonstrations and confrontations from Ferguson, I was reminded of James C. Scott’s discussion in chapter 1 of his Two Cheers for Anarchism of the role of riots, confrontations, violence and disorder in effecting social change. They don’t always, or even usually, make things better. They sometimes makes things worse. But police violence, racism and radical social inequality are not going to be ended just by voting for the US Democratic Party, or even by a black President.
It is a cruel irony that this great promise of democracy is rarely realized in practice. Most of the great political reforms of the nineteenth and twentieth centuries have been accompanied by massive episodes of civil disobedience, riot, lawbreaking, the disruption of public order, and, at the limit, civil war. Such tumult not only accompanied dramatic political changes but was often absolutely instrumental in bringing them about. Representative institutions and elections by themselves, sadly, seem rarely to bring about major changes in the absence of the force majeure afforded by, say, an economic depression or international war. Owing to the concentration of property and wealth in liberal democracies and the privileged access to media, culture, and political influence these positional advantages afford the richest stratum, it is little wonder that, as Gramsci noted, giving the working class the vote did not translate into radical political change. Ordinary parliamentary politics is noted more for its immobility than for facilitating major reforms. (pp. 16–17)
Patrick Nielsen Hayden on Twitter today wished bad cess on a Hugo nominee apparently belonging to the richly-deserving-of-the-worst-cess-possible class. ‘Bad cess’ is an Irish expression; I suspect Patrick got it from Flann O’Brien, but I wouldn’t put it past him to have come across it somewhere else. This reminded me that I’ve been meaning for years to record a couple of Irish country expressions, mostly from my father and through him, from Gid, a Westmeath woman who worked at the farm he was born on, and who died when I was ten or so.
Gid was fond of two maledictions. One is a little opaque to me; “May the curse of Scotland be on you.” If I were to guess, I’d say it was a reference to the fact that multitudes Irish farm labourers had to go to Scotland to find seasonal work; many of them stayed and ended up, sooner or later, in the slums of Glasgow or other cities. The other is more transparent; “May the curse of the seven snotty orphans be on you.” ‘Snotty’ here means ‘badly behaved and presumptuous,’ rather than with noses in need of a good wiping. It wasn’t unusual for relatives to have to take orphans in unexpectedly- my own father’s father was brought up by two bachelor uncles after his parents died when he was an infant. And of course, he was very lucky – the history of orphanages in Ireland is a wretched one indeed.
Gid would also say that someone was “that hungry, he’d eat a chap’s arse through a chair,” a chap being country argot for a small child. Stephen King uses the word “chap” in a similar way in one of his novels, suggesting that the slang made its way to Maine (and of course, ‘chappie’ is a somewhat dated English diminutive for a very young boy). And of someone knocking on death’s door for a long while, but never quite managing to expire, “it’s the creaking door that hangs the longest.” This last seems from an Internet search to have had some circulation in nineteenth century England, where likely it originated.
I like these sayings; there’s some flavor to them. Feel encouraged in comments to provide your own, if you have any.
Yesterday evening, Missouri Governor Jay Nixon declared a state of emergency, including a curfew, for Ferguson.
On Friday, Ferguson police had released the name of the officer who shot Michael Brown. They did not release details of the shooting, but did release a report indicating Brown was a suspect in a strong-arm robbery, including photographs and video showing someone resembling Brown in a physical altercation with a convenience-store clerk.
Last night there were arrests of people violating the curfew.
This morning, on Meet the Press with Andrea Mitchell, Nixon criticized the police report.
Yeah, we and our security team and the highway patrol did not know that was going to be released. I don’t think the attorney general knew that. And quite frankly, we disagree deeply I think for two reasons. Number one, to attempt to in essence disparage the character of this victim, in the middle of a process like this is not right. It’s just not right. And secondarily, it did put the community and quite frankly the region and the nation on alert again. These are old wounds. These are deep wounds in these communities. And that action was not helpful.
Meet the Press included a report beginning with the note, “Prison sentences for black men are 20% longer than those for whites convicted of the same crime. And on average, 100 black people are killed each year by white police officers.”
Also today, US Attorney General Eric Holder has ordered a federal medical examiner to conduct a further autopsy of Michael Brown’s body.
Eyewitness accounts of the shooting have begun to emerge.
Two stories are very prominent in the UK media at the moment. The Yazidis and Christians fleeing from the “Islamic State” group in Iraq, and the death of a man in a container on Tilbury docks. One story is presented as human tragedy, the lives of ordinary human beings destroyed by sectarian bigotry; the other has been spun as a tale about criminality, illegality and “human trafficking”.
This morning, the details of the Tilbury case were not entirely clear. The 35 people in the container there were reported to have come from “the Indian sub-continent”. They might have been economic migrants or they might have been Tamils fleeing from persecution in Sri Lanka, or Shia or Christians fleeing persecution from Sunni fanatics in Pakistan. As it turns out they seem to be Sikhs from Afghanistan, that is, a persecuted religious and ethnic minority. This didn’t stop the UK’s immigration minister, James Brokenshire from opining that this is “a reminder of the often devastating human consequences of illegal migration”. His Labour shadow, David Hanson was also clear that this was “a stark reminder of the human consequences of the trafficking trade”. And the “human trafficking” charities and campaign groups such as Unseen have been calling for increased vigilance. It seems they all already knew what was going on, even in advance of an investigation and independently of whether the people in the container sought asylum and asked for refugee status (which they may or may not do [UPDATE: in fact they have all now claimed asylum). The former head of the UK Border Force, Tony Smith, shared in this consensus about what had happened. He also offered a solution:
"We really need to get a message out to migrants that if they want to come to this country there are legal routes that they need to explore and they need to apply for visas and permits."
It is somewhat shocking that a former senior immigration official should be so ill-informed. Everything in UK policy is oriented to keeping the vulnerable out.
Matthew Gibney in his superb book The Ethics and Poltics of Asylum recalls that back in 2002 the then UK Minister of State for Immigration, Jeff Rooker was asked
"whether there existed any legal avenues by which legitimate refugees might enter the UK. [He] answered bluntly ‘No’.” (p.153).
In the intervening twelve years, things have become still more difficult. As soon as the Syrian conflict blew up, for example, British Home Secretary Theresa May took action to stop Syrians from transiting via UK airports for fear that they might claim asylum. (Many of those trapped in camps at Calais and subject to violence there are Syrians who cannot get into the UK.)
Though the UK (like many other states) is a signatory to the Refugee Convention and though its politicians make lots of fine noises about persecuted minorities overseas, it also does it best to make sure that people suffering persecuting can never get here to claim asylum. It does this by a variety of measures: by refusing visas for travel, by fining airlines and shipping companies who transport people without adequate papers, and by enforcing the EU’s Dublin protocol that keeps those who do reach Europe in their first country of entry. If those Yazidis or Iraqi Christians do want to make it to the UK, they will almost certainly have to depend on traffickers or people smugglers, they will have to risk drowning in the Mediterranean, being crushed under a lorry or being asphyxiated in a container. If they do arrive, they will be stigmatized as “illegal” and their stories of rape, murder and persecution will be treated with the utmost scepticism by the UK Border Force and the Home Office. But just so long as they stay in Iraq they will elicit words of concern from Brokenshire, Hanson and their ilk.
This is the ten-thousandth post we’ve published on Crooked Timber and we thought we ought to mark that moment. I’ve been looking for suitable music, but the best I’ve come up with is the incomparable, tragic and heroic Nic Jones singing “10,000 Miles”. Since the lyric includes “fare you well, I’m going away, but I’ll be back …” that probably sends the wrong message! In truth, I’d rather have used the Proclaimers (one of the best live bands I’ve ever seen), but they only walked 500 miles, which would have got them rather wet, even though they declared their willingness to walk 500 more.
Ten thousand is a lot of posts, a lot of words. Wikipedia tells me that there’s even a Greek word for it, μύριοι, the source of “myriad” in English. Henri Cartier-Bresson apparently said that “Your first 10,000 photographs are your worse”, and if Malcolm Gladwell’s 10,000 hours rule counts for anything, we probably ought to be quite good at this blogging business by now.
Here’s to a myriad more!
And so, as readers of my Twitter account might be aware, I’ve had a life event recently. As of today (I’m posting this from the WiFi at Geneva airport) and for the next year, I am doing less of the stockbroking, and more of the travelling round the world with my family.
It is often traditional for articles by downshifting investment bankers to do a big deal about how they have got tired of the iniquity of the industry, want to seek meaning in their lives and so on. Don’t go looking for that here. I’m not at all bitter about the industry (probably because I wasn’t sacked), and if I had thought it was an intrinsically immoral or destructive business I was in, I wouldn’t have done it for sixteen years. We bought and sold shares – if you wanted some shares we’d sell you some, and if you had some shares you didn’t want any more we’d make you an offer for them.
My job was what is called a “sell side equity analyst”. Which is to say, “a writer of a very specialist news service, covering somewhere between three and twelve companies, provided by a stock brokerage firm for the benefit of its clients”. Every day I used to be responsible for knowing anything that was going on in the world which might be relevant to the advisability or otherwise of an investment in banking sector stocks, and then either write it down for distribution to our full list of clients, or call up a couple of dozen of the most important ones if I knew they’d be specifically interested in it. Once a quarter, clients would file a “broker review”detailing how useful they had found our brokerage firm and if they had liked my research that quarter they would say so.
It was also my job to make sure that my own firm’s trading desk was as well-informed as we possibly manage, because as a brokerage firm, we provided firm quotes for clients to deal against. If you’ve just agreed a price for a block of shares, and then some negative news comes out before you’ve had a chance to move them on, you can lose a lot of money. And one reason why a client might be looking for a firm price om a block of shares is that he or she has a strong suspicion that something nasty might be about to happen to them. So it was always in the interests of my employers to ensure that we were better informed than the clients – basically an impossible task since there were dozens of them and some of them were bloody sharp cookies, but we tried.
That’s the nature of the business of being an analyst – protect your market-maker as much as you can, and try to produce material that will reflect well on your firm’s reputation as good people to deal with. From dot com bubble to high-frequency and beyond, it really didn’t change all that much as long as it was there. Lots of people thought that we didn’t add any value – an opinion to which they were entitled, although personally if I had been regulating the industry I’d have made more of an effort to find out what I was talking about. While I was there, average commission levels fell from 0.2% to around 0.008%, so I don’t think people can really claim to have been ripped off too badly by the agency brokers at least. From day one to day 5500, people constantly foretold the end of equity research – it was going to be done in by quant funds, index trackers, buy-side hiring their own analysts, hedge funds poaching all the talent, the Global Settlement regulations on capital markets business and finally by high frequency trading (ie, quant funds, again). But equity research is still here, although many of the people who forecast its demise are no longer. In the final analysis, I always took comfort from the fact that my own part of the industry, along with M&A advisory, had the distinction of being the only part where anyone had ever set up a new business using their own money – there are no boutique CDO traders, no startup derivatives structurers and no offices with two men and a dog originating subprime securitisations. But there are loads of small research firms and stockbrokers, and I was happy to work at a few of the best.
Some of my recommendations were great and some were awful, but on average I don’t think I can have been too bad because people kept giving me jobs and bonuses. Towards the end of my career, I was part of a research organisation that was voted best in Europe in two years’ industry surveys and that’s pretty much the level where I topped out; sports fans would probably recognise me as a John Toshack figure – a solid contributor to some great teams, the kind of guy who would always be promoted to Director (because of good specialist knowledge) but never to Managing Director (too weird, too disorganised). I’m happy with the results.
But it’s not such a great job that you’d keep doing it if you didn’t have to – none of them are, hence the name “job”. So I’ve taken my various bonuses, plus the profits from the London housing market and so on, and used them to move on to a new big adventure. Watch this space, but as far as investment banking is concerned, I am imagining a tinny loudspeaker ringing out above the screaming crowds with a calm voice saying “Davies has left the building”.
One of the really fun (?) things about blogging is that you get to make confident assertions that are permanently recorded and subject to immediate disproof. So, almost as soon as I suggested that (propertarian) libertarians were running out of issues on which they could distinguish themselves from Republicans in general, we saw the police occupation of Ferguson. The issue of police militarization is one that has been pushed for years by Radley Balko at Reason (and more recently at the Washington Post), and this (rather than the older left-liberal framing around “police brutality”) has informed much of the reaction both from the centre-left and the libertarian right[^1]. On the other hand, mainstream Republicans have either ducked the issue or backed the police.
There’s certainly some room for common ground here, and perhaps even some actual progress. But I still think there are some pretty big obstacles. Most obviously, there’s the militarization of the far-right, represented by “open carry” and the heavily armed mobs that have been seen backing Cliven Bundy and threatening immigrant children, with the enthusiastic support of Fox News.
To their credit, writers at Reason haven’t gone along with the presentation of these thugs as heroic defenders of the Second Amendment. On the other hand, they have been concerned to play down the threat they pose, as against that represented by warrior police. This piece, suggesting that licensing restrictions and teacher unioons are more racist than Bundy (described, fairly enough as a racist “federal lands moocher”), is fairly typical.
So, while it would be great to see libertarians of all stripes combining against the over-reach of the security state, the idea that weapons proliferation (and, for that matter, comprehensive surveillance) are only a problem when governments get involved is likely to impose some severe limits to progress.
[^1]: Politicians of all stripes were slow out of the gate, and cautious in their wording, understandably perhaps given the backlash against Obama last time he sided with a black man against a cop. But Justin Amash, Rand Paul and even Ted Cruz have issued statements questioning police militarization, as have Obama, Holder and (Missouri Dem Senator) Claire McAskill.
Following the police shooting of Michael Brown, protesters have taken to the streets of Ferguson, Missouri. Police deployed there wear uniforms and carry weapons that look more like the desert camouflage and armaments of US armed forces in recent Central Asian wars than like the traditional uniforms of American peace officers.
Indeed, military gear used by the US overseas has been finding its way to American streets. Police forces in the US receive surplus military gear from the Defense Department under a program whose motto is “From Warfighter to Crimefighter.”
“Veterans on Ferguson” has become something of a social media phenomenon devoted to former soldiers’ (and other members of the armed forces) criticism of police tactics in Ferguson.
Governor Jay Nixon, a Democrat, has issued a statement of concern and will visit Ferguson this morning.
The governor may relieve the police of duty.
Ferguson’s police chief says “it’s a lot of outside agitators causing the violence.” He also says they police will shortly release 911 recording from the time of the Michael Brown shooting, following the release of what is supposed to be the dispatcher recordings.
US Attorney General Eric Holder has said the Department of Justice will investigate the shooting and is to talk with Senator Claire McCaskill of Missouri today.
I don’t see any point in adding my comments, but you should add yours…