Category: A few great lines …

Nobel Prize winning economist Joseph Stiglitz reviews Robert Skidelsky's new book about Keynes …

We should be clear about this: economic theory never provided much support for these free-market views. Theories of imperfect and asymmetric information in markets had undermined every one of the ‘efficient market’ doctrines, even before they became fashionable in the Reagan-Thatcher era. Bruce Greenwald and I had explained that Adam Smith’s hand was not in fact invisible: it wasn’t there. Sanford Grossman and I had explained that if markets were as efficient in transmitting information as the free marketeers claimed, no one would have any incentive to gather and process it. Free marketeers, and the special interests that benefited from their doctrines, paid little attention to these inconvenient truths.

…   As financial market regulations were stripped away, crises became more common: we have had more than 100 in the last 30 years. The present crisis should lay to rest any belief in ‘rational’ markets. The irrationalities evident in mortgage markets, in securitisation, in derivatives and in banking are mind-boggling; our supposed financial wizards have exhibited behaviour which, to use the vernacular, seemed ‘stupid’ even at the time.

If unemployment is caused by real wages being too high, the obvious remedy is to lower wages. Hence the standard call of conservative economists for more ‘labour market flexibility’, ensuring that the wages of workers – which have stagnated in the US for a quarter of a century – will drop even further. But traditional Keynesian economics argues that what matters is aggregate demand, and that lower wages reduce aggregate demand. The current crisis demonstrates what can happen: countries with stronger systems of social protection and less labour market flexibility have, in many ways, fared better.

…The financial markets that caused the crisis – which in turn caused the deficits – went silent as money was being spent on the bail-out; but now they are telling governments they have to cut public spending. Wages are to be cut, even if bank bonuses are to be kept. The Hooverites – the advocates of the pre-Keynesian policies according to which downturns were met with austerity – are having their revenge. In many quarters, the Keynesians, having enjoyed their moment of glory just a year ago, seem to be in retreat.

We can’t pass laws that ensure that people won’t suffer from irrational optimism or pessimism. We can’t even be sure that banks will make good lending decisions. What we can do, however, is ensure that those who make mistakes bear more of the consequences of their decisions – and that others bear less. We can ensure that those entrusted with the care of other people’s money do not use that money for gambling. This is true whether those decisions are based on flawed models of risk or irrational perceptions of uncertainty. Taxpayers, workers, retirees and homeowners all over the world suffered because of the mistakes of America’s financial markets. That is unacceptable, and it is avoidable.

“History permitting, I may sail back to my recovered kingdom, and with a great sob greet the gray coastline and the gleam of a roof in the rain.”

Nabokov, Pale Fire, p. 173 (1962)

Also: Did not know this about Nabokov: Vladimir's son Dimitri, aiming to become an opera star, had his debut in a 1961 production of La Bohème in Milan, a production which also featured another young rising opera star named Luciano Pavarotti!

“MacKenzie King hadn't expected to lose the [1930] election; he resentfully vacated his office and retired to his country home, Kingsmere, north of Ottawa, to await events. Bennett was the one, therefore, who had to confront a problem so far beyond his imagining that it would undermine his health, his government, and his career. Canadians' choice of political leadership in 1930 meant that it was the Conservative who would offer the first solutions for the Depression…. (p. 328) That was just as well, for King had absolutely no idea how to fix the Depression, and it may have made matters worse that he was a trained economist, for orthodox economics had no solution to offer. (p. 334)

– Robert Bothwell, The Penguin History of Canada, Toronto: Penguin, 2006

Vanity Fair Editor Graydon Carter writes in this weekend's New York TImes Book Review about a new biography of George Plimpton, George, Being George: George Plimpton’s Life as Told, Admired, Deplored, and Envied by 200 Friends, Relatives, Lovers, Acquaintances, Rivals — and a Few Unappreciative Observers edited by Nelson W. Aldrich, Jr. Carter's review is accompanied by the photo on the left, a cocktail party at Plimpton's place in 1963. (Plimpton is in the lower left). I am, like Carter, “someone who grew up in the Canadian provinces” and, perhaps again like Carter, I was pulled into the profession I'm in part because I thought it would be cool one day to hang out at such a swishy cocktail party like the one in the picture. But I'm sure I also wished to live the kind of life and meet the kind of people Plimpton did:

As literary lives go, Plimpton’s was a doozy. Well born, well bred, the father of four, a witness to the great, the good and the gifted, he epitomized the ideal of the life well lived. He sparred with prize­fighters and competed against the best tennis, football, hockey and baseball players in the world, and along the way he helped create a new form of “participatory journalism.” He palled around with Norman Mailer, Gore Vidal and William Styron, and drank with Ernest Hemingway and Kenneth Tynan in Havana just after Castro’s revolution. He also edited and nursed that durable and amazing literary quarterly, The Paris Review, which published superb fiction and poetry and featured author interviews that remain essential reading for anyone interested in the unteachable art of writing. For someone like me, who grew up in the Canadian provinces, Plimpton was, like Bennett Cerf before him, the public face of the New York intellectual: tweedy, eclectic and with a plummy accent he himself described as “Eastern seaboard cosmopolitan.”

There are no doubt young Plimptophiles who don’t know about his friendship with Muhammad Ali (who used to call him “Kennedy” because he looked like one), or that he was at the side of his Harvard classmate and real Kennedy, Robert F., when he was shot and killed in the kitchen passageway of the old Ambassador Hotel in Los Angeles 40 years ago. George was not only on a private plane with Bobby when he decided to run for president, he helped wrestle Sirhan Sirhan to the floor moments after the shooting.

He loved having well-born beauties around — I mean, who doesn’t? — but he was no snob. He could talk to anybody . . .

… I happened to be reading (or re-reading, I can't quite remember) Hugh MacLennan's Barometer Rising, reading it as the wood smoke from our fire at Rainbow Falls Provincial Park high on Lake Superior's north shore swirled about. I'd have posted this yesterday but Canada Day found me a few metres from the Trans-Canada Highway but kilometres away from a decent wireless signal that would have let me made a phone call let alone connect to the Internet (yes, Virginia, there are still places in Canada where there is no high-speed wireless Internet). So here's a little bit of an interior monologue from Neil MacRae, one of the heroes of Barometer Rising, as he walks through the streets of Halifax in December 1917, a day before the city would be levelled by the explosion of the Mont Blanc. Remember, MacLennan, (b. 1907, Glace Bay, N.S.) is writing this in 1941:

For almost the first time in his life, [MacRae] fully realized what being a Canadian meant. It was a heritage he had no intention of losing.

He stopped at a corner to wait for a tram, and his eyes reached above the roofs to the sky. Stars were visible, and a quarter moon. The sun had rolled on beyond Nova Scotia into the west. Now it was setting over Montreal and sending the shadow of the mountain deep into the valleys of Sherbrooke Street and Peel; it was turning the frozen St. Lawrence crimson and lining it with the blue shadow of the trees and buildings along its banks, while all the time the deep water poured seaward under the ice, draining off the Great Lakes into the Atlantic. Now the prairies were endless plains of glittering, bluish snow over which the wind passed in a firm and continuous flux, packing the drifts down hard over the wheat seeds frozen into the alluvial earth. Now in the Rockies the peaks were gleaming obelisks in the mid-afternoon. The railway line, that tenuous thread which bound Canada to both the great oceans and made her a nation, lay with one end in the darkness of Nova Scotia and the other in the flush of a British Columbia noon. (P. 79, New Canadian Library edition)

Technorati Tags: halifax, Hugh MacLennan, Canada

“…if we wish to grasp the true significance of evil—what Hannah Arendt intended by calling it “banal”—then we must remember that what is truly awful about the destruction of the Jews is not that it mattered so much but that it mattered so little.

“The question is not whether terrorism exists: of course it exists. Nor is it a question of whether terrorism and terrorists should be fought: of course they should be fought. The question is what other evils we shall neglect—or create—by focusing exclusively upon a single enemy and using it to justify a hundred lesser crimes of our own.

“Meanwhile, we should all of us perhaps take care when we speak of the problem of evil. For there is more than one sort of banality. There is the notorious banality of which Arendt spoke—the unsettling, normal, neighborly, everyday evil in humans. But there is another banality: the banality of overuse—the flattening, desensitizing effect of seeing or saying or thinking the same thing too many times until we have numbed our audience and rendered them immune to the evil we are describing. And that is the banality—or “banalization”—that we face today.

After 1945 our parents' generation set aside the problem of evil because—for them—it contained too much meaning. The generation that will follow us is in danger of setting the problem aside because it now contains too little meaning.”

– From Tony Judt, “The 'Problem of Evil' in Postwar Europe” in The New York Review of Books, Feb. 14, 2008, pp. 33-35

Technorati Tags: europe, evil, Hannah Arendt, holocaust, civil liberty

“The victories of the Cold War – and the giddy speculation that history had reached the ideological terminus of liberal democracy – revived illusions of omnipotence among an Anglo-American political and media elite that has always known very little about the modern world it claims to have made. Consequently, almost every event since the end of the Cold War – the rise of radical Islam, of India and China, the assertiveness of oil-rich Russia, Iran and Venezuela – has come as a shock, a rude reminder that the natives of Delhi, Cairo and Beijing have geopolitical ambitions of their own, not to mention a sense of history marked by resentment and suspicion of the metropolitan West. The liberal internationalists persist, trying to revive the Wilsonian moment in places where Anglo-American liberalism has been seen as an especially aggressive form of hypocrisy. Increasingly, however, they expose themselves as the new provincials, dangerously blundering about in a volatile world.”

– Mishra, Pankaj “Ordained as a Nation”, London Review of Books, Feb. 21, 2008, viewed online at: http://www.lrb.co.uk/v30/n04/mish01_.html

“…Brave New World [:] How does it stand up, 75 years later? And how close have we come, in real life, to the society of vapid consumers, idle pleasure-seekers, inner-space trippers and programmed conformists that it presents?

The answer to the first question, for me, is that it stands up very well. It's still as vibrant, fresh, and somehow shocking as it was when I first read it.

The answer to the second question rests with you. Look in the mirror: do you see Lenina Crowne looking back at you, or do you see John the Savage? Chances are, you'll see something of both, because we've always wanted things both ways. We wish to be as the careless gods, lying around on Olympus, eternally beautiful, having sex and being entertained by the anguish of others. And at the same time we want to be those anguished others, because we believe, with John, that life has meaning beyond the play of the senses, and that immediate gratification will never be enough.

It was Huxley's genius to present us to ourselves in all our ambiguity. Alone among the animals, we suffer from the future perfect tense . ..”

– Margaret Atwood, “Everybody is Happy Now”, in The Guardian, viewed online at http://books.guardian.co.uk/departments/classics/story/0,,2212319,00.html?gusrc=rss&feed=10

Sanjay Subrahmanyam casts a rather wry eye at V.S. Naipaul's latest collection A Writer's People: Ways of Looking and Feeling.

There is only one kind of narrative fiction that Naipual understands to be properly modern; a sort of late Victorian, realist, slightly constipated fiction with a thoroughly old-fashioned narrative, an economic use of words, plenty of natural description (countryside, gardens, townscapes) and so on. The nonsense of post-Joyce, post-Svevo, post-Musil narriative, the 'literature of exhaustion' once celebrated by John Barth, can and should be flushed down the latrine (one of Naipaul's favourite words).

Naipual is, first and foremost, a child of the Indian diaspora, but not the one that exists today of Telugu software engineers and Punjabi fast-food millionaires. The diaspora to which he belongs and by which he is marked is the 19th-century diaspora that emerged in the immediate aftermath of the British abolition of slavery in the 1830s.

– Sanjay Subrahmanyam, “Where Does He Come From?”, in The London Review of Books, Nov. 1, 2007, viewed online at http://www.lrb.co.uk/v29/n21/subr01_.html