The Dish

A reader emails to counter some of the pro-Rubin sentiment on the Letters Page. This argument strikes me as worth pondering:

The letter writer who defended Robert Rubin’s performance as Treasury Secretary overlooks the fact that Rubin and Greenspan together made a rising stock market the main pillar of their macroeconomic policy of the late 90’s. As the respected PIMCO bond fund manager Bill Gross said in a January 2002 column (see http://www.pimco.com) , “Prior to Robert Rubin, Secretaries of the U.S. Treasury conducted economic policy with an eye towards promoting the competitiveness of American industry, as well as services such as banking, insurance, and financial management. For the past eight years or so, the focus has been on the markets (stock and bond) as opposed to the marketplace.”

Greenspan and Rubin orchestrated the bailout of Long Term Capital Management in 1998, and in this and other ways they generally fostered the perception that Treasury and Fed policy would be aimed at supporting the stock market. [See Lowenstein, “When Genius Failed: the Rise and Fall of Long Term Capital Management” (2001); Brenner, “The Boom and the Bubble” (2002)]. By creating the impression that the government was creating a floor under which stock prices would not fall, they helped stoke the stock market bubble.

To be sure, Greenspan warned in 1996 of “irrational exuberance,” but in subsequent years when stock market valuations reached much higher levels, he dismissed concerns about the existence of a stock bubble in testimony before Congress, and bought into many of the more outlandish “New Era” claims, including the argument that high equity valuations were justified by the great productivity gains ushered in by the new economy.

Greenspan and Rubin favored a rising stock market because it: 1) made possible a strong dollar, even in the face of widening current account trade deficits, as foreigners invested their excess dollars in our bond and equity markets; 2) created wealth effects that stimulated consumer spending; 3) allowed for a stimulative monetary policy without risk of consumer goods inflation, as cheap credit went into margin purchases in the stock market, housing, and foreign goods purchases. But in the real economy, many unproductive and unsound investments in were made (e.g., the laying of billions of dollars worth of excess fiber optic cable, to name just one) whose liquidation will inevitably produce economic contraction.

The letter writer suggests that Rubin’s strong dollar policy was hardly a “horrible crime.” But if a high dollar value is achieved largely by means of a speculative stock market bubble, then the currency market for the dollar is itself a bubble — and it is a bubble that has done serious damage to our domestic industry. Moreover, the major correction of the dollar that many predict (George Soros has suggested that it may drop as much as 33% in the next two years) will inevitably lead to recessionary effects in domestic businesses that are tied to the import industry, as well as consumer goods inflation. Some analysts, like Charles Kindleberger, the author of a classic book on investment manias, believe that cheap credit (and the dramatically expanded role of the government sponsored enterprises, Freddie Mac and Fannie Mae, as purchasers of mortgage paper) may also have created a housing bubble that will eventually undergo a painful and destabilizing correction. (See 7-25-02 Wall Street Journal article, p. A-1).

The Greenspan/Rubin policies of promoting a rising equities market created a “virtuous cycle” of prosperity and low consumer goods inflation as long as the stock bubble was expanding. But, as recent events are demonstrating, the inevitable bursting of a bubble can just as quickly lead to a “vicious cycle” of destabilizing economic conditions.

I’d already smeared my Androgel over my upper torso when I sat down to read Jerry Groopman’s New Yorker piece on hormones for “andropausal” men. I should say I’m second to no one in admiring Jerry’s integrity, smarts and seemingly boundless energy. He’s my doctor, as well, and it’s no exaggeration to say I revere him. But I can’t help feeling that the most recent wave of anti-hormonal news has something a little preachy about it. I’m talking about a general conventional wisdom among the responsible upper-middle-classes that taking meds that make you actually feel good has something illicit about it. Scratch beneath some of the somber-toned analyses of new data, and you’ll find not a little puritanism underneath. Take the fuss over a recent study showing minuscule increases in cancer and other diseases as a function of women taking lots of estrogen after menopause. In a study of over 10,000, none of the groups with an increased risk of serious side-effects even broke into double figures. (Only Newsweek gave us a little side-bar showing why it’s a storm in a C-cup.) Even Jerry concedes that we don’t really know the long-term effects of men taking testosterone in modest doses. But we do know the short-term effects. It makes you feel marvelous. In lots of men with low testosterone, the extra boost makes them feel stronger, sexier, healthier, and more mentally alert. It seems to me that even in the worst case scenario of a small increase in the likelihood of, say, prostate cancer, this is worth considering. Would you rather live till you’re 85, gradually sinking into torpor and sexual collapse or have a great time and conk out at 65? I guess for me, the choice is an obvious one. The T-thing turned my life around and I’m not giving up now. (The chances of my living till 85 are also, shall we say, slim.) But I don’t see why it’s such a crazy trade-off for others as well. The point of life is not, it seems to me, to vie with one another to be clapped out network news droolers well into our 90s. The point, from a purely health-based point of view, is to have the most productive and energized time you can in a life-span you have some control over. For centuries, people didn’t have the luxury to make these trade-offs. Now we do, and all the medical scolds are telling us to grin and bear it. Why?

Joe Conason just emailed to ask me whether an item I wrote earlier this week about Robert Rubin had been changed without a formal correction. The answer is yes. Here’s my correction policy. If someone points out an error to me after an item has been posted for a while, and the error is a serious one, I post a formal correction. But when I post an item, I sometimes notice a typo or small error or mixed metaphor or dangling participle when I double-check the site to see if it’s updated. If I notice an error then, I just go back in and fix it straight away. Sometimes, I even get second thoughts when I see it in print and soften an item – or toughen it up. In the case of the Rubin item, I wrote Enron when I meant Citigroup, something I didn’t catch till I saw it on the site. I also wrote summer when I should have written fall of 1999 (I transposed the time Rubin left the administration with when he joined Citigroup.) Again, I saw this once I’d posted and within a few minutes, fixed it. The point of the item remains the same. With no fact-checker or copy-editor, I try and double and triple check myself. Sometimes this means I publish something and change it immediately after I publish. It seems silly to run formal correction after formal correction over matters like these. There’s nothing nefarious here – just an attempt to get things right and transparent in a medium that’s instant and personal.

The New York Sun is now online. Here’s a column.

“It all looks like a sordid tale of cronyism, of misuse of power, of cozy backroom money-grubbing — a more pressing threat to American business than outright criminality. Even Kazakhstan would blush at such practices. Some crusading liberal newspaper in New York really ought to run an editorial. Or at least a column.” So writes Jonathan Rauch in a fascinating column on how the New York Times is building its new headquarters.

ADDENDUM ON POWELL: A good point from an alert reader:

You are absolutely right in labeling Purdum’s July 25 piece on Powell the “Mother of all Puff Pieces.” May I suggest, however, that you did not point your readers to the most revealing line. Namely: “He has supported abortion rights and affirmative action and is a Republican, many supporters say, in no small measure because Republican officials mentored and promoted him for years.”

You correctly point out that there was not a “to be sure” paragraph in the entire – almost full-page – “story.” But isn’t this line the most damning criticism that the left can level against Powell? Forget the problem of sourcing (the “many people say” evidence has become prolific in the pages of the Times under Raines). Purdum has said in clear terms that Secretary Colin is really Uncle Tom. Forget his riveting “Why I Am A Republican” speech at the 1996 GOP convention. Powell is a Republican primarily because Massah Reagan and Massahs Bush have treated him well. Wasn’t this Donna Brazile’s take on Powell (and Rice, for that matter)? They are just the “house Negroes” on the Republican plantation.

Which Powell critic could Purdum have interviewed who would have said anything worse than this?

But isn’t it true that all minorities who don’t avow loyalty the Democrats hypocrites or self-serving? I guess the Times thinks that’s obvious.

I guess we should thank Al Gore for making his position clear on the war against Iraq. He says he’s for it, except he’s against it. The timing is wrong. The European allies are not on board. We need to debate it more. He’s for delaying it, but he’s against saying we will take on Iraq unless we do so soon. “I think the principle of ‘first things first’ does apply and has to be followed if we are to have any chance of success,” he expounded, arguing that we have to make Afghanistan a perfectly functioning democracy before we protect the homeland. Does he have any sense that Americans are under threat now, that we have already lost over 3,000 civilians to mass destruction, that the enemy is vowing to do more, and that Iraq is easily the most significant source of weapons of mass destruction? Yes, first things first. The first thing is ensuring the security of the citizens of the United States. Isn’t it clear what the strategy of Gore and perhaps some other Democrats now is? You use the corporate scandals to bring down Bush’s approval ratings and regain the Congress. You start making the case that a war against Iraq will be diplomatically inflammatory and militarily risky. You never actually have the balls to oppose the war outright, but you nitpick and cavil and undermine until you hope the president or the public blinks. If a hideous terrorist attack occurs, it’s Bush’s responsibility. If it doesn’t, you can claim he’s war-mongering unnecessarily. Win-win. Except for the security of the United States, in which it’s lose-lose. I used to be pro-Gore. Then I thought he was narrowly the worse choice for president. Now I think I’d rather have almost any Democrat in office than him.

WHY I CAN’T GET NO RESPECT: You’d be amazed how many liberals I meet who seem genuinely amazed I don’t actually have cloven hoofs. Charles Krauthammer charmingly exposes the reason why. A classic.

CLINTON ON FINANCIAL CRIMES: Jack Shafer has a point here. The man who pardoned Marc Rich is lecturing the president on corporate corruption? The worst that could be said about Bush is that he hasn’t been tough enough. At least he didn’t actively reward it, like the former president.

GAY MARRIAGE INEVITABLE? The polls in Canada show a narrow majority for equal civil rights for gay people in marriage – 48 to 43 percent. But in the 25 – 34 age group, the majority is 65 percent. Inevitable? Nah. But it’s clear which side is winning the debate, isn’t it?

A CLINTON FANTASY: “Under Clinton I believe there would have been no September 11, no Enron, no telecommunication meltdown, no collapse of the stock market, no deficits. Do you see what a little vision provides to this Great Country of Ours. Reagan had it, Clinton had it – and it showed. So do I pin this on this Administration, you bet I do.” This, a defense of Robert Rubin, a first-hand account of inter-racial marriage and much more on the Letters Page, edited by Reihan Salam.

What does Krugman mean by rhinoceri? Are they people with thicker skin than he has?

ALASKA CALLING: The best piece yet on Alaska’s warming is now up on TechCentral Station. Here’s the money section:

Twenty-two of the thirty individual locations defining Alaska’s temperature history show either no warming trend or a significant cooling trend after 1977. Nor does the USNA’s Alaska record show a meaningful man-made warming trend in the period beyond the Great Pacific Climate Shift of 1976 – 1977. Those facts contradict the predictions from the climate simulations. As for the future, University of Washington researchers find that the northern Pacific Ocean temperatures dropped back to a state of cold around 1998 – 1999. That should mean sharply colder temperatures in Alaska for the next twenty to thirty years.

The rise in temperature is largely a function of a big rise in 1977, caused most probably by a shift in Pacific ocean patterns. TCS even has a whizz-bang interactive map of thirty different measuring stations over the last thirty years. Surprise! Despite growing levels of greenhouse gases in the atmosphere, Alaska is getting cooler. Tim Egan should probably find an igloo somewhere and stay very quiet for a while.

WHY POWELL NOW? The MinuteMan suggests an obvious motive. The Times doesn’t want war with Iraq. This is an early puff-piece to justify later support for Powell’s alleged ambivalence about taking out Saddam.

THEY’RE USED TO IT: The Hill reports that gay and lesbian candidates are encountering less and less prejudice out there. Shhhh. Don’t tell Richard Goldstein. It’ll ruin his day.

THANKS: 41,000 visits yesterday. And it’s July.

RUBIN AND THE SEC: I published a letter from a financial analyst reader that claimed that Robert Rubin had cut the SEC’s budget by 60 percent. Other readers queried this notion. Here’s the letter-writer’s response:

I goofed. I have made a classic Washington D.C. error, by examining cuts in the rate of growth in the funding of the SEC funding, and calling them a real cut. Mea culpa. However, I have checked with the New York SEC office, which tells me that staffing levels in the New York SEC office have fallen by 60% and this is where I got the figure from. In fairness, this cannot be blamed on Rubin; likely that a private sector salary during a huge boom was too attractive for many securities lawyers. But the drop in staffing levels helps to explain why so many accounting abuses went undetected for so long.

This poem in praise of Colin Powell – he’s brilliant, such a great guy, a traditional conservative (as opposed to knuckle-dragging right-wing loonies), widely loved, adored even, a rock star abroad, a civil rights icon, and on and on and on – must surely be self-parody. There’s nothing new in it. The Times even almost gives Richard Holbrooke a joint by-line. I know it’s July, but this piece of Powell-spin truly ranks as one of the all-time greats of vapid media puffery. Every paragraph has a cliche. Count ’em. Then there is this weird locution:

As one of the world’s most admired celebrities for more than a decade, with approval ratings that rival President Bush’s, Secretary Powell has special status – and singular political value – in a Republican administration supposedly eager to demonstrate its commitment to compassionate conservatism.

So is Todd Purdum saying that the administration doesn’t even want to appear to be eager to be seen as compassionately conservative? Or is Powell part of this fraud? But how can it be fraud if the administration isn’t actually eager to perpetrate it? Dizzying. One other thing to note: there is not a single negative thing in this piece – not one. No dissenting quote; no ritual “to-be-sure” paragraph; not a single qualification to what, even for Powell, must be an embarrassingly fellatial profile. What next: formal beatification?

NOAH PILES ON: Tim Noah – no knee-jerk conservative, to say the least – chimes in on the need to subject Robert Rubin’s record at Citigroup to further scrutiny. Score one for Jake Weisberg’s editorship.

KRUGMAN VS. KAUS: The paleo-liberal boot goes in. Krugman calls Mickey a conformist. Conformist? Mickey is one of the most independent writers I know. He couldn’t conform if he tried to. Meanwhile Krugman has morphed from an independent thinker into one more hack churning out Rainesian propaganda.

KRUGMAN EXTRA!: Here’s a direct factual rebuttal of his recent column smearing the president for his role in the University of Texas Investment Management Co. (Utimco). It speaks for itself.

CENSORING RAPES: … If they’re committed by immigrants from Lebanon, and if those immigrants are Muslim, and if they regard Australian women and teenagers as “sluts.” That’s what some liberals have descended to, according to this recent editorial from the Sydney Morning-Herald.

HATING ASHCROFT? The New York Times would have you believe there’s a groundswell of conservative opposition to attorney-general John Ashcroft. I read that story too and found it unconvincing. So would anyone with a rudimentary awareness of that political constituency, like Jonathan Last. This is one aspect of liberal bias that is sometimes over-looked. It’s not a deliberate attempt to skew the news; it’s a level of such ignorance of the people who disagree with you that you make honest but fatal misjudgments. That’s what happens when nine out of ten reporters in the national press are liberal Democrats – however hard they try to stay neutral.

POSEUR ALERT: “3) Subway commercial for Dijon Horseradish Melt (Fox Sports Net, July 13)
One “Jim” (“a Dennis Miller-type of guy who tells it like it is,” says Subway publicist Les Winograd) pulls up to a burger joint in a car full of buddies. He’s about 40, tall, well-exercised: “Turkey breast, ham, bacon, melted cheese, Dijon horseradish sauce,” he says in the drive-through, exuding an aura of Supermanship all out of proportion to the situation. “That’s, like, not on our menu,” says the young, pudgy, confused person taking orders. “It’s not only not on your menu,” Jim says, “it’s not on your radar screen!” “Do we have a radar screen?” the clerk asks a supervisor as Jim peels out. “Think I made that burger kid cry?” Jim says to his pals, all of them now ensconced in a Subway with the new Select specials in front of them.
It seems plain that, finally, George W. Bush is making himself felt in culture. The commercial takes Bush’s sense of entitlement — which derives from his lifelong insulation from anything most people eat, talk about, want or fear, and which is acted out by treating whatever does not conform to his insulation as an irritant — and makes it into a story that tries to be ordinary. But the story as the commercial tells it is too cruel, its dramatization of the class divisions Bush has made into law too apparent. The man smugly laughing over embarrassing a kid is precisely Bush in Paris attempting to embarrass a French-speaking American reporter for having the temerity to demonstrate that he knew something Bush didn’t. (Real Americans don’t speak French.) Even someone responsible for putting this talisman on the air may have flinched at the thing once it was out there in the world at large, functioning as public discourse, as politics — the last time I saw the spot, the final punchline had been dropped.” – from a list of Greil Marcus’ “Real Life Rock Top Ten,” Salon.

I can’t do better than reprint this email from highly astute reader and financial analyst:

You’re right. Rubin’s nefarious role in Enron and his overall responsibility in helping to create the bubble (along with Greenspan) has not received proper attention. In my opinion, Rubin is even worse than Greenspan. If you recall, he was the one who initially dismissed Greenspan’s “irrational exuberance” comments, and I believe he virtually created government for and by Goldman Sachs during his tenure in office. He frustrated the development of legislation to make the derivatives market more transparent (along with Phil Gramm), which could have prevented the Enron bankruptcy, and managed to get Brooksley Borne of the CFTC sacked when she pressed for such derivatives to be regulated by the Comex. He also cut the SEC’s budget by 60% when he was in office, which frustrated the fine work of Arthur Levitt and enabled many of the unsavoury practices now coming to light to be perpetuated. He was the architect of the strong dollar policy which helped to create such huge imbalances in the US current account in order to attract more money into the US capital markets and thereby create a hugely destabilising bubble. I suspect that Rubin will ultimately undergo a historical revision in reputation comparable to Andrew Mellon (who in 1928 was viewed as the greatest Treasury Secretary since Alexander Hamilton and left office in disgrace in 1932). Rubin was smart enough to get out before things got really messy, but he is even more culpable than Mellon.

I think we’re due for a major re-evaluation of the Clinton-Rubin-Greenspan legacy, don’t you?

There’s an epidemic breaking out! Take this from the New York Observer:

Listen up, fellows: Rich, bored teenage girls in New York City are on the prowl for twentysomething (and in some cases, thirtysomething) men. And this time, they’re not just arming themselves with fake ID’s. Young women barely past puberty-and before, ahem, the age of consent-are sashaying onto the Internet, researching adult life, and constructing elaborate alter egos designed to dupe men all too willing to believe their lies.

Consider Alexis. By 14, she was fed up with the dopey guys in her age group. This 5-foot-9 private-school student and class treasurer likes them older-much older.

At first, Alexis employed a simple alias: She would tell the older men she met that she was a junior majoring in communications at the University of Pennsylvania. Everyone bought the lie. It went well until a 24-year-old man asked her out, and mentioned that he, too, went to U. Penn.

“I, like, totally bugged out,” Alexis said.

Hilarious, huh? Of course, there is an honest and coherent philosophy behind the social conservative blind eye to straight pedophilia and obsession with gay pedophilia. An email expresses it simply:

There is a difference too, according to biblical Christian principles. A boy seduced by an older woman is sinning, but a boy seduced by a man is seduced contrary to nature. The B-W relationship is a model of what he should end up doing (having sex inside of a relationship of sexual complementarity in marriage), a B-M relationship is not what he ever should be doing.

I disagree with this strongly. But don’t you think that if this really is the belief of Eberstadt et al, they should simply say so and make their hostility to homosexuality as such more explicit, instead of attacking it under the veil of being opposed to child abuse?