Moisés Naím, editor of Foreign Policy:

In recent years, whenever other countries — Russia, Thailand, Indonesia, South Korea or Mexico — got themselves into an economic crisis, we lectured them about how they had to adopt 'shock therapy'.

But now that we are the ones in crisis and in need of shock therapy, everyone is preaching gradualism.

Dr. King, in 1963:

This is no time to engage in the luxury of cooling off or to take the tranquilizing drug of gradualism.

Recently:

It’s hard to get people to do something bad all in one big jump, but if you can cut it up into small enough pieces, you can get people to do almost anything.

And from 2007:

Fortune: And what happens next?

Bird: Well, then, this debt, this mortgage, this debt, is taken, bought by a bank and packaged together on Wall Street with a lot of other, similar debts.

Fortune: Without going into much detail about what is actually --

Bird: -- Without going into any detail, no, it's far too boring.

Bird: And so, this is put into a package of debt, and then it's moved onto Wall Street, and then, this ... it's extraordinary what happens then ... Somehow, this package of dodgy debts stops being a package of dodgy debts and starts being what we call a structured investment vehicle.

No Time for Gradualism

Thomas Powers, from last year:

At a moment of serious challenge, battered by two wars, ballooning debt, and a faltering economy, the United States appears to have lost its capacity to think clearly.

Saramago, from Blindness:

Were it not for the fact that we're blind this mix-up would never have happened, You're right, our problem is that we're blind.

From 43:

"You can't talk sense to them," Bush said, referring to terrorists.

"Nooooo!" the audience roared.

From 1961:

An Englishman said to me recently, "You Americans live on a much higher plane of expectancy than we do. You constantly work toward some impossible goal of happiness and perfection, and you unfortunately don't have our ability just to give up. Really, it's much easier to accept the fact that some things can't be solved." He is right; we never accept it, and we kill ourselves trying.

From 1941:

But for everyone, surely, ... this is the lesson: never give in, never give in, never, never, never, never -- in nothing, great or small, large or petty -- never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy. We stood all alone a year ago, and to many countries it seemed that our account was closed, we were finished. All this tradition of ours, our songs, our School history, this part of the history of this country, were gone and finished and liquidated.

Very different is the mood today.

Who remains unyielding to overwhelming might?

Transitioning: Continued

Hendrik Hertzberg:

A gangly Illinois politician whom "the base" would today label a RINO once pointed out that you can fool some of the people all of the time. We now know how many "some" is: twenty-seven per cent. That's the proportion of Americans who, according to CNN, cling to the belief that George W. Bush has done a good job.

What role the Bush Administration's downgrading of terrorism as a foreign-policy priority played in the success of the 9/11 attacks cannot be known, but there is no doubting its responsibility for the launching and mismanagement of the unprovoked war in Iraq, with all its attendant suffering; for allowing the justified war in Afghanistan to slide to the edge of defeat; and for the vertiginous worldwide decline of America's influence, prestige, power, and moral standing.

There can be no debate that a sizable proportion of the commentariat, and apparently of the public at large, cling to the belief that the Afghan campaign, writ large, is both strategically wise and satisfyingly winnable.

This provokes certain thoughts, and questions. First, the questions:

What drives this rage for complacency, this desperate contentment?

Are some people lying, or are they simply afraid to be honest?

From 1957:

Both mouse and cat survived, and the incident is recorded here as a reminder that things seem to be changing.

From March 2004:

At one level this election was about nothing. None of the real problems facing the nation were really discussed. But at another level, without warning, it actually became about everything.

The Democrats are going to be out for a long time if they can't be honest with themselves.

From November 2004:

Of course we had war plans.

From October 2008:

The solution for people who have spent a long time in Afghanistan was ... to work with the Taliban and somehow to uncouple the Afghan fighters from al-Qaeda. Seven years of killing later, it feels a bit too late to try that now. So, western policy seems glued to fighting a war that many people in the know are now saying the west is never going to win.

From October 2008:

"You Westerners have your watches," the leader observed. "But we Taliban have time."

From January 2009:

We will not be able to eliminate the Taliban from the rural areas of Afghanistan’s south, so we will have to work with Afghans to contain the insurgency instead. All this is unpleasant for Western politicians who dream of solving the fundamental problems and getting out. They will soon be tempted to give up.

How long will we cling to this belief? How soon will we give in to the temptation to be honest with ourselves?

Finally, two from Freeman Dyson:

You must have principles that you're willing to die for.

The moral imperative at the end of every war is reconciliation. In order to make a lasting peace, we must learn to live with our enemies.

Transitioning

Team,

I am sure all of you saw my letter last week sharing something very personal with the Apple community. Unfortunately, the curiosity over my personal health continues to be a distraction not only for me and my family, but everyone else at Apple as well. In addition, during the past week I have learned that my health-related issues are more complex than I originally thought.

In order to take myself out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June.

I have asked Tim Cook to be responsible for Apple’s day to day operations, and I know he and the rest of the executive management team will do a great job. As CEO, I plan to remain involved in major strategic decisions while I am out. Our board of directors fully supports this plan.

I look forward to seeing all of you this summer.

Steve

Text of Steve Jobs’s Letter to Apple Employees

Paul Kedrosky:

Quote of the day comes from an article about the revelation that former fugitive financier Marc Rich lost money on the Bernie Madoff scheme:

The idea that Mr. Rich, the onetime fugitive, may now turn to an American court to seek redress struck some lawyers as fraught with problems and unlikely at best.

“Fraught with problems and unlikely at best” should be the name of a new blog.

Upon reading this, I was reminded of this Gladwell story on This American Life:

Act Four. Tough News Room.

Malcolm Gladwell is a best-selling author and famous journalist at the New Yorker magazine. But not always. Witness his story—which was recorded live, on stage at the Moth theater in New York—about his first job in journalism, and how terrifying it was.

As Gladwell explains (starting at around 50:00 minutes into the broadcast):

There's a secret to this business ... it's not what you think.

We started something called Disease of the Week ... and every week we got a little bolder, ... We felt, like, drunk with power ... But it wasn't enough. We'd like to change the very language of American journalism. And that's when The Contest was born.

What we decided was to introduce the phrase "raises new and troubling questions" to American journalism.

As Slate explains:

The object is to determine who can insert the phrase "raises new and troubling questions" in his stories the most often over a month. Gladwell strikes first in the "contest," but it's then "back and forth" like "a horse race" until he leads 10-9. On the last day, his colleague William Booth wins the game with a "twofer," as the phrase appears in both his piece and its headline.

"I feel like I've been kicked in the stomach; it's devastating," Gladwell says.

But the real kicker comes in the next part:

Now, I don't need to tell you how hard it is to get the phrase "perverse and often baffling" into a newspaper.

Perhaps NYT's Alison Leigh Cowan is involved in a Contest? :)

Fraught With Perverse and Often Baffling Problems

Yesterday I found myself at the bookstore, in front of the "New in History" shelf, mostly facing a dazzling array of recently published tomes about America's sixteenth President. I briefly wondered how one human subject could occupy so much attention, year after year, both from readers and writers. I briefly reviewed the covers, but picked up none of the books. Then I moved on.

Today I read Jill Lepore's latest piece in the New Yorker (sadly behind the paywall, but well worth the read), in which I came above this excerpt from Lincoln's first inaugural address:

I am loath to close. We are not enemies, but friends. We must not be enemies. Though passion may have strained it must not break our bonds of affection. The mystic chords of memory, stretching from every battlefield and patriot grave to every living heart and hearth-stone all over this broad land, will yet swell the chorus of the Union, when again touched, as surely as they will be, by the better angels of our nature.

And I thought, oh.

The Speech

I think investors were put off by Obama's warnings of "trillion-dollar deficits for years to come."

Here, clarity is king, "free and frank" discussions are the way to proceed, here we not only call a spade a spade, but we pick it up and decapitate our inept enemies with it. True, plenty of people find that offputting, alarming, disturbing even. Luckily those people can put the mouse down, and step away from the keyboard.

There is nothing more irritating and off-putting than some expert airily declaring that it's all very simple really, when it self-evidently isn't.

"He was always put upon," she says. "He was always kind of the patsy. He didn't tell jokes -- he was the butt of the joke."

Why do we put off until tomorrow what we can do today?

We assume it's the economy -- people are putting off the procedures they can put off.

Consumers feel put-upon. They feel downright suckered by their government, their financial institutions, their employers and their unions. Consumers are fed up, and they're just not going to buy it any longer.

"We have put off putting the prices up for 22 months. We announced in September we were holding off putting prices up because of the credit crunch to help our customers, but unfortunately we are now in a position where we need to put the fares up."

The sheer volume of traffic was off-putting at first, but as our stay progressed it became clear that Jersey also has some of the most laid-back drivers I have come across. Although the roads were busy, not a single horn was sounded in anger.

It should greatly entertain girls 8 to 16. Many parents will wince at the movie's over-the-top stereotype of female lust for things and appearances. Even more off-putting is the implication that women alone are guilty of this, while boyfriends and husbands roll their eyes in loving tolerance.

The plot has the rigid predictability of a wedding march; and while it's funny to hear one of the girls' bachelorette guests desperately yelping, "I'm gonna do a quick head-count of the ... [ Read More (0.5k in body) ]

Freeman Dyson's Einstein Lecture appears in the February issue of the Notices of the American Mathematical Society.

Some mathematicians are birds, others are frogs. Birds fly high in the air and survey broad vistas of mathematics out to the far horizon. They delight in concepts that unify our thinking and bring together diverse problems from different parts of the landscape. Frogs live in the mud below and see only the flowers that grow nearby. They delight in the details of particular objects, and they solve problems one at a time. I happen to be a frog, but many of my best friends are birds. The main theme of my talk tonight is this. Mathematics needs both birds and frogs. Mathematics is rich and beautiful because birds give it broad visions and frogs give it intricate details. Mathematics is both great art and important science, because it combines generality of concepts with depth of structures. It is stupid to claim that birds are better than frogs because they see farther, or that frogs are better than birds because they see deeper. The world of mathematics is both broad and deep, and we need birds and frogs working together to explore it.

... I came to Princeton and got to know Hermann Weyl. Weyl was a prototypical bird ... I wrote his obituary for Nature, which ended with a sketch of Weyl as a human being:

"Characteristic of Weyl was an aesthetic sense which dominated his thinking on all subjects. He once said to me, half joking, 'My work always tried to unite the true with the beautiful; but when I had to choose one or the other, I usually chose the beautiful'."

People who solve famous unsolved problems may win big prizes, but people who start new programs are the real pioneers.

After Gödel, mathematics was no longer a single structure tied together with a unique concept of truth, but an archipelago of structures with diverse sets of axioms and diverse notions of truth. Gödel showed that mathematics is inexhaustible. No matter which set of axioms is chosen as the foundation, birds can always find questions that those axioms cannot answer.

Weak chaos gives us a challenging variety of weather while protecting us from fluctuations so severe as to endanger our existence. Chaos remains mercifully weak for reasons that we do not understand.

The subject of chaos is characterized by an abundance of quantitative data, an unending supply of beautiful pictures, and a shortage of rigorous theorems. Rigorous theorems are the best way to give a subject intellectual depth and precision. Until you can prove rigorous theorems, you do not fully understand the meaning of your concepts.

The archetype of the dead city is a distillation of the agonies of hundreds of real cities that have been destroyed since cities and marauding armies were invented. Our only way of escape from the insanity of the collective unconscious is a collective consciousness of sanity, based upon hope and reason. The great task that faces our contemporary civilization is to create such a collective consciousness.

Birds and Frogs

David Rosenberg says this is Must Read.

The idea that the American family will quickly spend us out of this recession is a fantasy.

In this article, WSJ profiles an Idaho family:

"We never go downtown anymore," says Mrs. Capp.

From the archive:

KRAMER: It's a whole different world downtown-- different Gap, different Tower Records, and she's a 646.
ELAINE: What? What is that?
JERRY: That's the new area code. They've run out of 212s, so all the new numbers are 646.
ELAINE: I was a 718 when I first moved here. I cried every night.

Also:

"I think you need to have a downtown that's hip and cool and that people really want to come to," he said.

From a few years ago:

"It's getting very chic down there."

It's gotten very chic almost everywhere in Manhattan.

And from just a few months ago:

“I wish I could go down there more,” said Ms. Clark.

The WSJ also profiles another family. The mother observes:

"Not many people know eggs freeze."

A parting thought:

"People loved comedies during the depression, too," said R. J. Cutler, executive producer of "Flip That House."

He's referring to GDI, but he's thinking about GDII.

Hard-Hit Families Finally Start Saving, Aggravating Nation's Economic Woes

Until David Rosenberg's recent research report is recovered (or is replaced by today's report), here's a roundup of recent media reporting in which Rosenberg appears.

On CNBC yesterday, he said:

"It’s pretty fool-hearted to believe that anything is going to reach any sustainable low until we put in a firm bottom on residential real estate valuation across the country."

He was brought in to CNBC to discuss his latest FT article:

We expect to be in recession through to the end of 2009 at the earliest, even with the help from intense monetary and fiscal stimulus before a recovery takes hold in 2010. Sustained negative wealth effects from the slide in housing and equity prices will reinforce the uptrend in the personal savings rate. This, in turn, creates a highly disinflationary environment as job losses mount and pushes the unemployment rate up towards 9 per cent in the US in the coming year.

What we probably need is a supply-side resolution, either creating regional land banks to ring-fence the inventory or a moratorium on new housing starts to prevent further corrosion in residential real estate values. Supply-demand divergences are likely to persist through 2009, in our view, and will require even further contraction in construction activity before balance is restored in the real estate market.

In a story for Reuters from earlier this week, he is quoted as saying:

"The pullback in consumer and business spending in the coming year will likely be so big that even under the latest leaks on the size of the coming fiscal package, we think it will barely offset half the retrenchment in organic private sector GDP."

Rosenberg is apparently quite vocal lately:

The [recent market] rally appears to hinge on a growing consensus view that the economy will start to rebound in the second half of 2009. And guess what? That view is almost certainly wrong, growls David Rosenberg, Merrill Lynch's North American economist, in reports published every day of the new trading year.

You see, he "growls" because he's bearish.

Here's another:

"The market may be focused less on the patient right now and more on the cure. This, in turn, means that the doctors better come up with something that is going to turn the economy around."

In the Monitor:

The US has experienced a two-decade expansion of credit availability – punctuated in recent years by phenomena such as mortgage loan... [ Read More (0.3k in body) ]

Rosenberg Roundup