Links 12/11/08

Black hole confirmed in Milky Way BBC

Sarah Palin tops 2008 Google search Telegraph

The Best and the Brightest Have Led America Off a Cliff Chris Hedges, TruthDig. Not a rant, actually explains some of the conditioning processes (note: I am an old fart, and these patterns were operative, but at a considerably weaker level, when I was young. There was not much in the way of a sense of entitlement [certainly not among those who had not gone to prep school], not the conformity he describes, and much less career orientation, except among pre-meds. From what I can tell, that pattern kicked in starting in the 1980s and has increased over time. Even passing by college campuses, the dress code became more conservative).

Inflation Concerns Remain High in Latest WSJ/NBC Poll WSJ Economics Blog. The writer is surprised that consumers are worried about inflation. I’m not. I cannot get over how much food prices have increased, and are continuing to increase (a lot of prepared food makers held off raising prices as long as they could). The frequency of food purchases means it has a disproportionate psychological impact.

Goldman to tighten retirement rules FT Alphaville. Just like rustbelt companies, Goldman is giving employees an incentive to leave. Now.

German institute forecast minus 2% economic growth Eurointelligence

Global trade is shrinking, fast Brad Setser

“Measuring the Effect of Infrastructure Spending on GDP” Mark Thoma. Useful, but the paper cited does not appear to consider that the “ready to go” projects that Obama is pushing may have a high purchased equipment component (at least that’s what well informed readers contend), which in many cases is imported, and thus does not contribute to domestic stimulus.

AIG’s Speculative CDS Bets Felix Salmon. Felix calls AIG about the e-mail they sent harrumphing about a Wall Street Journal story on AIG losses resulting from purely speculative activity. I got the note, and frankly couldn’t be bothered, because it was neither forthcoming nor informative, but to his credit, Felix did a bit of spade work.

When the Going Gets Tough, Some People Lay Off the Nanny Wall Street Journal. If you want to get cheesed off, be sure to read to the last sentence.

Commodity crash tests faith in supercycle Ambrose Evans-Pritchard, Telegraph

World Bank’s ‘Wrong Advice’ Left Silos Empty in Poor Countries Bloomberg

Antidote du jour:

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  1. John Rosevear

    Yves, I can’t say I’ve done any sort of formal survey, but… here in the Boston suburbs at least, milk and (to a lesser extent) meat are definitely less expensive than they were three months ago, and produce prices don’t seem to have risen outside of seasonal ranges (that is, the tomatoes etc. are always more expensive and less tasty in December than in September in this part of the world. Surely it is the same in NYC.) Is it possible that the prepared-food price increases you’re seeing are a matter of passing along higher costs from earlier this year? What kinds of products are you seeing these rises on — I’d love to try to figure out if those are national trends.

  2. River

    Yves, milk, meat, have gone down in the last three months. We do not buy many frozen foods except Mr Smiths pies and they seem about the same price as last year. One item that is up about a buck is Marie Callenders chicken pot pies. All brands of ice cream are packaged in smaller containers for a larger price. Since these are seldom purchased items this is strictly anecdotal info.

  3. Anonymous

    “Nothing deters me from my Botox treatments.”

    Lots of fat still to be cut. Wait until that woman has to deal with depression on her own when hubby loses his job completely. LoL

  4. Richard Kline

    I buy very few prepared foods, and shop in comparatively high cost stores specializing in produce, bulk, and specialty fresh meats. My costs are high to begin with: it’s where I spend my nickel. Costs _jumped_ this Fall. Yes, cost increases were delayed through the Summer when commodities were parabolic, but real costs had to come through in the end.

  5. Andrew Bissell

    Today Germany’s finance minister slammed the UK’s bailout efforts for their “crass Keynesianism.” Awesome.

  6. Anonymous

    Nothing deters me from my Botox treatments.

    How freaking oblivious are these people? It’s like they WANT there to be some sort of class revolt. Hell, I make six figures (for now, at least) and I’d be happy to pick up a pitchfork and torch and join in.

  7. Peripheral Visionary

    The move away from domestic servants is a welcome one in my view. The increased use of domestic service led to a disturbing return to class distinctions, further deepening the distinctions between the aspiring affluent–mostly white Americans–and domestic servants–mostly Hispanic immigrants.

    The loss in both asset appreciation and high-income jobs (specifically in real estate and finance) will reduce the numbers of jobs available to immigrants, but at the same time will, ironically, put both the formerly affluent and the immigrants in the same pool of job seekers. I do not celebrate the loss of prosperity, but a return of a more egalitarian society is welcome.

  8. LJR

    Chris Hedges, of course, being a Pulitzer prize winner, is more moral and of an altogether better consitution than all those intellectual drones he had to school with. Poor baby.

    He rants on and on and on. If only Obama would see the light and appoint Chris to some important position I suspect Chris wouldn’t have time to be disaffected. He’d suddenly have a Plonkserian change of heart.

    Dear readers – of COURSE the elite schools are clubs. Always have been. Liberal bleeding hearts have always had the illusion that at some time in the past the elite schools were dedicated to “the whole man” as it were. Whatever that means. Generally whatever the user of the term wants it to mean. In most cases a generally fuzzy warm glow of moral self-righteousness coupled with a lack of intellectual rigor. Bunch of cotton heads if you ask me.

    The fact is that the “liberal educational tradition” is an abject failure. There is no whole man. We are, at this point, a highly technical collective and there is no individual POV that’s going to lead from it’s systemic imperatives. Not even Volcker. Where is it going? To hell, my friends. And it is taking a lot of us with it.

    Remember King Crimson’s line:

    “Our machines feed the furnace. If they catch us they will burn us.”

    Do I have an answer? Hell no.

  9. Kevin Smith

    re: Nothing deters me from my BOTOX treatments.

    I have lots of patients who report feeling better after BOTOX, and who make a point of coming in when something bad is happening (mom is dying, dog has to be put down, etc). Now there is an increasing body of scientific evidence that BOTOX treatment really does make people feel better.

    Botulinum toxin and the facial feedback hypothesis:
    Can looking better make you feel happier?
    Murad Alam, MD,a Karen C. Barrett, PhD,b Robert M. Hodapp, PhD,c and Kenneth A. Arndt, MDd,e,f,g
    Chicago, Illinois; Fort Collins, Colorado; Nashville, Tennessee; Boston and Chestnut Hill, Massachusetts;
    New Haven, Connecticut; and Hanover, New Hampshire
    The facial feedback hypothesis suggests that muscular manipulations which result in more positive facial
    expressions may lead to more positive emotional states in affected individuals. In this essay, we
    hypothesize that the injection of botulinum toxin for upper face dynamic creases might induce positive
    emotional states by reducing the ability to frown and create other negative facial expressions. The use of
    botulinum toxin to pharmacologically alter upper face muscular expressiveness may curtail the appearance
    of negative emotions, most notably anger, but also fear and sadness. This occurs via the relaxation of the
    corrugator supercilii and the procerus, which are responsible for brow furrowing, and to a lesser extent,
    because of the relaxation of the frontalis. Concurrently, botulinum toxin may dampen some positive
    expressions like the true smile, which requires activity of the orbicularis oculi, a muscle also relaxed after
    toxin injections. On balance, the evidence suggests that botulinum toxin injections for upper face dynamic
    creases may reduce negative facial expressions more than they reduce positive facial expressions. Based on
    the facial feedback hypothesis, this net change in facial expression may potentially have the secondary
    effect of reducing the internal experience of negative emotions, thus making patients feel less angry, sad,
    and fearful. ( J Am Acad Dermatol 2008;58:1061-72.)

    It is unfortunate to juxtapose the layoff of a $50,000 a year nanny on a $2,000 a year program of BOTOX treatment.

    Try BOTOX — you’ll probably like it!

  10. Anonymous

    couple of points

    1. it was hard to read hedges’ article because of his tone (“I’m from poor stock but morally superior to my ivy classmates, but we all are smarter than you”) but the point is well taken. Most prep schools and colleges don’t teach students to think. Any kid that wants to learn that has to go to law school and only then to certain law schools that require thoughtful analysis — not most law school in this country which are strictly tuned to the best memorizers. Sad. And the law schools that do this are not necessarily all the top tier. Some yes, some no.
    I know this from having 1 kid who was an econ major, now working at a prestigious economics consulting firm. Kid is really smart, but mostly a parrot. I have another, a senior at a top univ who can’t wait to get to law school. I myself am a lawyer and a former banker.

    2. Were it not for availability of household help/child care, for many professional women, careers would be impossible dreams. Its no lie that if someone has to ditch their ambition and stay home with the kids, its 9 times out of 10 the female that has to give up the dream. And men may actually believe that women deep down want to do this rather than work in an intellectually/socially/financially satisfying environment, but men are stupid. This is a myth that “enlightened” men use to assuage their guilt at the feelings of superiority they get when they do a deal at work, come home tired, and the highlight of the (advanced degreed, professionally trained, former executive) wife was the playground or some stupid PTA meting — and then they make fun of her for being a stay-at-home loser.


    It’s getting real bad out there and someday these Ivy Leaguers will wise up and get a little humility. If not, they will get some humiliation!

  12. Anonymous

    echoing/parroting LJR:
    Its impossible to identify any type of school that “cultivates” good scholarship, now or then. To hope for this in the future is to ignore reality. For the sake of brevity, it suffices to say that that dynamics inherent in school/department management and budgeting, the weird world of faculty, the bizarre campus/townie divide, and basic intellectual contention all conspire with the stuff the author identifies to turn a potential education into an empty credential.

  13. Tortoise

    Re: “Inflation Concerns Remain High in Latest WSJ/NBC Poll”

    For a good reason. Commodity prices have gone down and technology items continue their downward trend.
    But, let us look where we really spend our money. If you have a kid in college, you know that the cost is going up about 4% a year (and now colleges announce big increases in tuition and fees to compensate for losses in endowment and state support). Health care continues getting even more expensive. I went to my usual dentist last week and realized that he had raised his prices quite dramatically (I guess he needs to recoup his losses at the stock market. But he is a great doctor and a good guy, so I just paid up.) Housing is not getting cheaper for the average family unless they downsize or refinance an existing mortgage at a lower rate. Services, like barbers or plumbers or electricians, are NOT becoming cheaper.

    So, I find all this talk about deflation rather premature. It may happen in the future but it certainly is not in consumer prices yet.

  14. halbhh

    In the last few days we now have reported evidence:

    a)Sharp declines in sales, exports and imports.
    b)Sharp declines in prices
    c)Consumers and Businesses both delaying purchases
    d)Layoffs in response to the above.

    These fit all the pieces of a feedback loop of deflation and job loss reinforcing each other. (aka “deflationary spiral”, aka “great depression onset”)

  15. Anonymous

    no sometimes kids need to learn how to think and analyze

    only law school is (or at least should be) dedicated to develop thinking — taking a problem, applying potential solutions, seeing how each plays out, articulating why something works or it doesn’t, following the decision tree as played out far enough under all imaginable scenarios to see repercussions of any given action

    more law professors cultivate this in students than teachers in other disciplines and law school classwork should be making students practice this over and over again until it becomes part of the student’s nature

    it also helps to have student’ intellectual curiosity rewarded but sadly, those students are generally shafted as professors of most disciplines, having none themselves, are incapable of doing so

  16. Anonymous
    December 11, 2008
    Blame me for job losses
    By C. Edmund Wright

    When the jobs report for November came out last week, many so-called “experts” were shocked at the massive loss of an estimated 533 thousand jobs. Even a Time /CNN organization called “The Curious Capitalists” were at a loss to explain it.

    Let me attempt to help out these “curious capitalists” (though I am still skeptical that anyone working for CNN or Time is either curious or a capitalist). I caused part of this job loss and I know precisely why; the election. The results portend big trouble for small business.

    The job destruction process has started. We are about 20% of the way through our ramp down process and on schedule to complete the shut down by spring 2009. Watch the financial news and you will see continued job cuts each month. We are not alone in our strategy. Far from it. Atlas has shrugged all over the country.

  17. Anonymous

    Hedges’ rant is weirdly apolitical: he blames elite schools for our politics. I think he’s got it wrong. Blame our politics!

    A reality check: universities, elite and not, are largely Democratic. We’ve had Republican governance for decades. It matters: look at the stats on inequality, economic growth, tax burden, etc.

    It’s laughable to blame our elites for what has happened to our government. Bush made a point of appointing folks who were poorly trained (e.g. from Christianist universities and law schools) political hacks.

    If we’re to recover from that disaster, we have to hope that the fact that Obama is (for example) appointing a Nobel prize winning physicist to be energy sec will make a difference. At least give competence a chance.

    As for the perversion of our economic elites with free-market deregulation garbage, there is a simple explanation: greed. Which took over because the conservative political climate removed the regulatory barriers to speculation and cronyism.

  18. STS

    Hedges sure is bitter. I can relate. But he’s wrong to blame some select set of schools for the behavior of our elites. Elite schools traffic in ‘prestige’ that facilitates the pursuit of power, but don’t directly control either minds or the larger institutions of power.

    Our political class has done us severe damage and the elite universities play a bit part in the drama. I would attribute the root cause to the process of globalization. Our overclass can globalize easily by rotating their portfolios and offshoring components of their business empires. The rest of us watch our standards of living stagnate or decline as the developing world begins to gain ground on us.

    Elite ideology is a symptom of these deeper realities, not their cause. The detached, complacent focus on abstract economic theories is a way of studiously averting one’s gaze from the fundamental crisis of American power. There is very little anyone can do about it, and real ‘players’ don’t waste energy on lost causes.

    btw. I had to laugh at the idea that law school is the one true place to learn to think ;) Ever heard of the sciences?

  19. Anonymous

    I’ve been fortunate to attend MIT and Yale. I found no conformism at MIT and not much at Yale either.

    On the other hand I was studying mathematical and scientific subjects.

    I can believe there might be conformity pressure in non-mathematical fields, which I have often thought are breeding grounds for political agendas. And I fear that could happen at schools of high or low rankings. The problem may not be the university but what we classify as an academic field of study, the professional standards therein, and what sorts of training we deem suitable for our public and private leadership.

  20. donna

    The weirdest part is that to buy good, unprocessed food is the most expensive thing, when it should be the cheapest. The food processing business gets everything so cheaply that it costs less to buy the preprocessed crap, which is the worst thing for people.


  21. Richard

    1) Re the botox lady: 9 out of 10, she voted for Obama.

    2) Re Hedges: Buckley said 20 years ago, he’d rather be governed by the first 2,000 names in the Boston phone book than the faculty of Harvard.

    Re LJR: He trashes liberal education (which actually was pretty good when I got mine at a regional private college in the 60s, but before The Sixties wrecked). His clincher: King Crimson? An Aristotle for our age.

  22. Anonymous

    The writer of the article seems to get carried away.

    We learned a long time ago that the elitist school grads were asses as well as the quotas allowed entry into the club.
    The best actually come from the top percentage at many other universities where competition and reality life training exists.

    Maybe, their power and influence will be broken up into regional pieces.

    Had to laugh at law school as the place to learn to think!

    We concluded years ago that law school required students leave brains and morals at the door. Law school brains get seeped in absurdities of arguing every technicality possible– for their own profits. Facts, fair play, just result be damned.

    smart independent

  23. Anonymous

    “We concluded years ago that law school required students leave brains and morals at the door. Law school brains get seeped in absurdities of arguing every technicality possible– for their own profits. Facts, fair play, just result be damned.”

    Who’s we?

    Clearly not ones trained in analytical technique. ANd clearly fools, who, knowing nothing of which they speak, keep saying it, clinging to the “truth”, like flies stick to fly paper.

    Indeed there are many lawyers with suspect morals but they were corrupted by financial professionals, but there are even more fools like the writer of the cited post, who confuse lawyers with their clients.

  24. Peripheral Visionary

    Anonymous: “Were it not for availability of household help/child care, for many professional women, careers would be impossible dreams.”

    The professional woman may be able to realize her dreams, but only at the cost of the working-class woman’s dreams who steps in to take her place as caregiver. That’s a net zero gain for women, and another indication of the creep of class distinction, where the professional woman’s aspirations are more important than the working-class woman’s aspirations.

    ” . . . but men are stupid.”

    This is level of analysis they’re teaching in law schools these days? Only reinforcing my opinion that lawyers are severely overpaid.

  25. Yves Smith

    I buy a rather odd food basket, but I see no price relief in anything I buy, and continuing price increases in some items (dairy products ex milk, some vegetables to a degree that seems larger than seasonal). In my cruises through supermarkets, it also appears that the sale items are at higher price points.

  26. curlydan

    I read the Hedges article and was unimpressed.

    Mostly, he seems to fall into the trap that the Ivies already are in–thinking too much about themselves. So the Ivy author spends more time talking about himself and his classmates.

    I’ve seen graduates of the elite schools in elite positions, regular white collar positions, and back down to blue collar positions like driving a cab.

    At every company I’ve worked for, I’ve never had an Ivy League CEO, so they’re not running the world. A lot of elite university grads are doing great things, some are doing stupid things, and others are just commenting on blogs while at work or while taking care of their kids.

    Mostly what I see is that the Ivy degree is a good way to open the door, but it’s up to the ability of the person to step through the door if they want to get somewhere.

    In fact, a study revealed that kids with similar test scores entering college had very similar incomes years later, regardless of the school they went to. Talent reveals itself in the long-run.

  27. Anonymous

    By the comments here I think Hedges’ article hits a little too close to home. I have now taught for 20 years, adjunct mind you, but that allows me a position of observation at a particular institution, and not direct involvement or pressure. And he hits the nail of the head.

    My description of most students at these schools are that they have always been told they are smart, therefore they believe that they are. The vast majority are not. They just know how to get a good grade and say the right things. But few actually know how to think. And in industry, I struggle to think of one graduate of any upper-level schools that has been with me in an executive suite that I thought was worthy of that level of privilidge.

    If I had my way, talking about any vocation at the undergraduate level would be banned, and everyone would be a liberal arts major. Those that then learn to think, could begin to apply their talents to the vocation of their choice. Because, I can tell you firsthand, the atmosphere at any of the institutions he mentions is exactly as presented. And rocking the boat is NOT encouraged. But some lights do make it through the system. For that we should be grateful.

  28. Anonymous

    Post Script re Anonymous:

    No, not just some ex-client.
    Legal system is about power and money vs. people without a care to the consequences in people’s lives. Have seen it over and over again and for years.

    Attorneys deal in circular reasoning, in a British court style, with ridiculous processes continued for profit making.

    Attorneys have been hemorrhaging this economy.

    Will spare the time re elaborating further.


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