Today I cast my first ever Democratic primary vote.  A few things I observed:

I voted at my local polling place, Barrier-Free Living on 2nd Street.  Eight years after the 2000 debacle, we had a single antiquated manual voting machine at my polling place.  There was a large red lever which had to be reset for each voter which stuck occasionally; the woman who voted before me, a young woman in her teens or twenties, needed help moving it.  There were two poll workers who were handling the lists of names; both were in wheelchairs and had been working since six AM.  The voting machine was in a hallway; in the short time I was there, the line was well out the door both when I arrived and left.  While I saw numerous volunteers and so on throughout the city today, not a single one was outside my polling place, which covered some of Alphabet City, including Loisaida and its various largely Hispanic housing projects.

Mike Gravel was not on the New York ballot.  And hilariously, the only Republican candidate who had any delegates listed in my district was Ron Paul.

Don argues in the book and in the podcast that to point to an American steel worker put out of work by imports of Brazilian steel and say that he is “harmed by trade” is to misunderstand the nature of trade and its winners and losers. He says it’s like saying that a man whose wife leaves him for another man is harmed by love. After all, the man married because of love. The man is the product of his parents who were touched by love. So it is with the steel worker. His steel job exists because of trade. His whole life is supported by trade of various kinds. So in what sense is he “harmed by trade?”

It’s a profound point. It forces you to see just how trade and specialization and the division of labor create the incredible lives we lead, lives of wealth and health unimagined by previous generations.

But having said that, I think there is something else to add, something about the way our self-worth and pride and satisfaction are tied up in our work. An out-of-work steel worker still has a very good life compared to generations past and the success of his life up until the loss of his job is indeed due to trade (and sometimes to the protectionism that worker would like to see made stronger). But there’s no denying that it’s very tough on a person who has invested most of his life in a particular skill to suddenly find that there’s no demand for that skill. Yes, it’s the price of progress and it’s a price worth paying. Yes, it’s not particular to foreign trade, as Don points out, but is the result of all kinds of economic change. But there is something deeply poignant about it, nevertheless.

It is a mistake to use protectionism to keep that worker from having to deal with change. But that doesn’t change the potential sadness of the situation. I’ve argued that the real consolation for that worker who loses his job and struggles to find another that is as satisfying is knowing (if he knows any economics) that his children and grandchildren will lead better lives because we tolerate economic change.

Russell Roberts, Café Hayek

Like many people, I have friends who attended the University of Texas.  And like most people who attended Texas, they are passionate fans of the Longhorns, the University’s sports, particularly football, teams.  And while, to them, every Longhorns game is important, none of them are as important as the annual matchup between the Longhorns and the Aggies, the team of Texas A&M.

This is not merely a Texas thing; one can find the same phenomenon in locations as disparate as Florida (the Florida Gators versus the Florida State Seminoles), Michigan (the Michigan Wolverines and the Michigan State Spartans), and California (the UCLA Bruins versus the USC Trojans).  And while these intrastate games have real significance occassionally, often all these programs are among the nation’s best, and have other more significant games on their schedules.  Yet the bitter rivalries between in-state rivals persist over generations, and often surpass the more significant games in importance to both the students and the players.

This does not, upon casual inspection, make sense.  There is not a vast or significant difference between the students of Michigan and Michigan State – both groups are generally made up of mostly kids from in the state, a similar percentage of out-of-state kids, nearly all between the ages of 18 and 25.  The players for both teams are also similarly made up – mostly black men from urban or rural backgrounds on scholarship, generally performing below the average academic level of their peers.  Stranger still, the students and alumni at each school have much more in common with their opposite than either group has with either team’s players, and vice versa.  

So why does the rivalry exist at all?

If you’re gonna lose then

might as well lose big then

as always it was always it shall be

do you really love me?

If you promise me you do

I’ll take that job you want me to

and do my best

swear that I can pass this test.

some girl told me last night

she found my rhythms so tight

I swear she only bought me one or two

I told her all about you.

you should try to be more kind.

you know how i need to unwind

when it gets dark

and i wanna see some sparks.

europe’s gonna love me

all in different countries

there is no way that i could turn it down

and, anyway, it’s for us

promise i’ll be home before

that baby’s knocking at the door

ill be right there

to let it in i wont be scared

well if we’re gonna lose then

might as well lose big then

as always it was always it shall be

do you really love me?

do you really love me?

~Eef Barzaley

Listen to Taste by Magik Markers (my first foray into mp3 blogging).

Happy New Year, and to 2007, good fucking riddance.

One thing I find is a constant experience in my life, as well as a major thread in human history, is that nearly everything I and we believe is untrue.

For example, I believe that I am sitting on a chair as I write this, a chair I have sat in many times before.  But the truth is that I am not sitting on the chair, but levitating just ever so slightly above the chair, and I have never in my life made actual contact with the chair, or with any chair for that matter.  The atoms making up my body and the atoms making up the chair wisely refuse to touch (as touching would make those atoms explode) and instead repel one another, holding me and the chair apart with an electromagnetic field of sub-microscopic proportions.

That much of what we think we know is incorrect is true no matter how intelligent or insightful we are into certain matters.  Isaac Newton was as devoted to attempting to expand the knowledge of alchemy as he was in physics.  But as laughable as his belief that there was a secret formula which would turn lead into gold was, his belief in Descartes’ concept of the Luminiferous ether was even more false, and far more influential.  The belief that the universe was permeated by an invisible and weightless medium which permitted the movement of light waves through space lasted until Albert Michelson, the first American to win the Nobel Prize in Physics, disproved it by accident in 1887, exactly two hundred years after the publication of Newton’s Principia.

Part Three: The Rise of Long-Term Capital Management and the Superportfolio

This is an extremely compressed version of the story of Long-Term Capital Management, perhaps the most written about corporate failure besides Enron of the last two decades.  If you wish to learn more, I highly recommend Lowenstein’s book When Genius Failed, linked below.

John Meriwether launched the limited partnership of Long-Term Capital Management in 1994.  Limited partnerships are the actual name of the entities commonly known as “hedge funds”.  The name hedge fund is in fact a misnomer; they originally developed that name because the funds were designed to “hedge” against losses by being more conservative than mutual funds, but have developed into the opposite.  The appeal of such funds is that limitations on the number of partners and the overall wealth of those allowed to join (no more than 99 people or entities of a total value of over $1 million, or 500 people or entities worth over $5 million – with those worth less entirely excluded) are coupled with a nearly total lack of government regulation.  Mutual funds are forced to disclose their portfolios and to maintain certain levels of diversification and leverage; limited partnerships are not.

Joining Meriwether as the partners of LTCM were former Salomon arbitrage group members Larry Hilibrand, Eric Rosenfeld, Victor Haghani, Greg Hawkins, and three very notable additions: economists Robert Merton and Myron Scholes, and David Mullins, who was the number-two at the Federal Reserve under Alan Greenspan and had previously been considered his heir apparent.  With such a roster, LTCM launched with capital of $1.4 billion, the largest such launch in financial history.  It had such disparate investors as the national bank of Italy and the President of Merril Lynch, and had an elegant and innovative structure, with the company that employed the partners and traders being a Delaware-registered management services company employed by a Cayman Islands partnership (the fund itself) financed by six international dummy corporations from whom investors in different nations would buy their shares.

This is a question for people here.  Recently, I found out that shortly after the Supreme Court decision ending mandatory minimums for crack cocaine, President Bush commuted the fifthsentence of his Presidency.  He commuted the sentence of Michael D. Short, who had served fifteen years for conspiracy to distribute crack cocaine, and will be released in February, less than a year before his sentence will expire.

Now, this is something I consider good news.  I am a member of Families Against Mandatory Minimums, as is Mr. Short.  But I couldn’t help but to be curious as to why this one particular individual was given clemency by President Bush, with no explanation given, mere hours after the Supreme Court made its decision public.  So I dug a little deeper.

Mr. Short, as it turns out, was convicted in a trial of 26 members of what was called the “Woodridge group”, a cocaine dealing ring in Washington D.C. in the 1980s.  His trial was part of a large group of trials known at the time as the Winestock trial.  Mr. Short, along with nearly all the other people convicted in that trial, have filed many appeals, all of which have been denied, but Mr. Short, unlike other co-defendants, only appealed on procedural and inadequate counsel grounds.  Beyond numerous recorded phone conversations, the main witness in the Winestock trial was a member of the Woodridge group who gave testimony in exchange for leniency at his own sentencing.  That witness was Brian Lee Tribble, who had previously been accused and then cleared of providing basketball star Len Bias with the cocaine that killed him the night after he was selected second in the NBA draft.

I have, of course, a lot more details, but none of it really goes anywhere.  I can’t answer why Bush chose this individual out of all the people in America serving long sentences for crack distribution.  But the whole thing seems odd.  Is this worth blogging in detail?  Or am I wasting my time?  

Read Loaded, an essay by Garret Keizer.

I hope that I shall never have to confront anyone with my gun, but owning a gun has forced me to confront myself. Anyone who owns firearms for reasons other than hunting and sport shooting (neither of which I do) has admitted that he or she. is willing to kill another human being – as opposed to the more civilized course of allowing human beings to be killed by paid functionaries on his or her behalf. Owning a gun does not enhance my sense of power; it enhances my sense of compromise and contingency – a feeling curiously like that of holding down a job. In other words, it is one more glaring proof that I am not Mahatma Gandhi or even Che Guevara, just another soft-bellied schlimazel trying to keep the lawn mowed and the psychopaths off the lawn.

If the authorities attempted to confiscate my gun in a house-to-house search, I believe I would offer resistance. What I would not offer is a justifying argument; the argument is implicit in the ramifications of a house-to-house search. But all of this is so much fantasy, another example of the disingenuousness that tends to color our discussion of guns. The Day When All the Guns Are Gathered Up – what the paranoids regard as the end of the world and the Pollyannas as the Rapture – it’s never going to happen. There are nearly 1.4 million active troops in the US armed forces; there are an estimated 200 million guns in private hands. The war over the proper interpretation of the Second Amendment is effectively over. The most reasonable and decent thing that gun groups could do at this point is to declare victory and negotiate terms with the generosity that is so becoming in a victor. Five-day waiting periods? Agreed, but our sense of honor compels us to insist on ten. (Oh, to have been born in a time of so many guns and so little gallantry! Perhaps we ought not to have shot Sir Galahad after all.) No assault rifles owned by civilians – also agreed, so long as, no assault rifles are used on civilians.

Of course, none of this is going to happen either. It would require a confidence that scarcely exists. One need only peruse the ads and articles in gun magazines to see the evidence of its rarity – to see that poignant, ironic, and insatiable obsession with overwhelming force. That cry of impotence. The American Rifleman I recall from my boyhood was closer to Field & Stream than to Soldier of Fortune, more like Popular Mechanics than National Review. My father and my uncles were do-it-yourself guys; their guns were just something else to lube. When I was a kid, I thought a liberal was a person who couldn’t fix a car. But the cars aren’t so easy to take apart anymore; the “check engine” light comes on and only the dealership has all the codes. As in Detroit, so in Washington: the engineering works the same. I am not the first to point out the sleight of hand that bedevils us: the illusion of power and choice perpetuated to disguise a diminishing sphere of action, A person dry-fires his Ruger in the same reverie of preparedness as another aims her cursor at her favorite blog. What precision, what access, what an array of options! Something’s going to happen one of these days, and when it does, man, I’m going to be ready. In the meantime, just listen to that awesome sterile click.

Recently, there was something of a scandal that took place on several blogs.  Accusations were made that Oprah Winfrey, a major supporter of Barack Obama’s candidacy for the Democratic nomination for President, was an anti-union employer.  This was in rather short order, proved untrue, although many people voiced concern that the creative staff of Oprah’s talk show are not members of the Writers Guild of America, as is common for the staffs of most talk shows.

This was of particular concern to me.  I am a member of the WGA, but for a longer time and more importantly, I am a member of the International Association of Theatrical Stage Engineers, or IATSE.  It has been demonstrated by others that Oprah does employ members of the IATSE, but I called the offices of IATSE Local 2, which represents stagehands in Chicago, and IATSE Local 476, which represents studio mechanics there.  Both offices confirmed that Oprah employs members of both unions.

Another major issue regarding the WGA and the strike happened yesterday, as The Tonight Show with Jay Leno and Late Night with Conan O’Brian announced that they would resume airing, without writing staffs, this January.

As this is a major issue, for pretty much everyone, since whether or not you are a supporter of unions (and if you read this site, you almost certainly are) you are probably a consumer of television and film.  To do this, I must explain some basic things about unions in my industry, film and television.