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Monday, August 17, 2009
Sunday, August 16, 2009
Political Greed and Crony Capitalism
Ever since Michael Douglas’s character Gordon Gekko in the movie Wall Street declared “Greed is Good” capitalism has been cast in a sinister role that it has yet to overcome.
The movie speech was rumored to be taken from a speech given by Ivan Boesky at a college address. Boesky was indicted for insider trader, served time in jail and paid millions in fines.
Capitalism is not about greed; it is about economic self interest, and this is far more than a semantic distinction. When you take a job paying $10 an hour over the job paying only $8 an hour you are displaying economic self interest, not greed. And when you decide to take the job paying $8 and hour over the job paying $10 an hour because you like the conditions or the work at the lower paying job enough to sacrifice the higher pay you are also acting in your own economic self interest. Economics is about far more than money.
When you decide to take a steady job in a traditional workplace rather than make much more money in drugs and prostitution you are also acting in your economic self interest. It is when your economic self interest disconnects from moral and ethical considerations that it becomes greed.
The ultimate power is the power over your own destiny and environment, but power is most often considered in the control over others. Whereas economic self interest in about control over your own destiny, political self interest is about controlling others.
Capitalism is about people acting in each other’s own self interest and the society benefiting as a result. This works because achieving your self interest requires serving others.
Advanced economic theory also realized that self interest and sharing is not mutually exclusive. In “A Beautiful Mind” John Nash had a Eureka moment courting ladies at the beer hall with his college buddies. He realized that Adam Smith was wrong, or at least incomplete. He developed a theory of equilibrium in competitive game theory. Basically this meant that he realized that your best outcome was not to grab as much as you can for yourself, but that your chance of success was enhanced by assuring at least some success for your competitors. Not only are consumers’ well being enhanced by competition, but the outcome for the competitors themselves is improved.
In order to profit you have to provide a product or service some one else values. Bill Gates, Michael Dell, and Stephen Jobs are very, very wealthy because everyone values Microsoft Windows and Office, iPhones, Macs, and laptops.
Few people complain about the wealth of these techno entrepreneurs because they all provide value we understand. The same can be said of Warren Buffet.
Yet we are outraged at the fortunes made in the financial industry where record amounts of value have been destroyed while CEOs made millions in bonuses. We do not understand derivatives, collateralized debt obligations, and financial models: Apparently neither did the CEO’s and boards of the companies selling these products.
The Wall Street mess was the product of “crony capitalism” which is to capitalism what National Socialism (Nazism) is to socialism. Crony Capitalism is a perversion of the principles of capitalism that includes the freedom “for every man to make himself” to use the phrase of Abraham Lincoln. “Crony capitalism” has its roots in the mercantilist tradition of Alexander Hamilton. During our early years Hamilton saw a need for financial interests and the government to work “closely”. He favored a central bank and such “public private partnerships.”
Hamilton was strongly opposed by Jefferson who favored decentralization and saw the favoritism fostered by mercantilism and the influence such financiers could have over our government as a threat to liberty.
Fannie Mae for example was given special treatment and access to low interest funds available to no other financial institution, and exempted from both SEC and FDIC regulation, Fannie Mae lobbied Congress and plied their special regulators with large campaign contributions. Senator Chris Dodd, head of the Senate Banking Committee and then Senator Barak Obama were the two largest recipients.
But the real damage was not compromising two high profile Senators. Fannie Mae was given special privileges in order to carry out the political will of Congress to make housing affordable for people who shouldn’t buy homes. They created the hunting grounds for the unscrupulous.
Bonuses and bailout funds for Fannie Mae did not elicit near the outrage of AIG and the Wall Street Banks. The public still thinks it was the Gordon Gekko greed of Wall Street rather than the political greed of K Street.
We still blame the economic self interest instead of the political self interest. Articles decry the old capitalism and herald the new era of state capitalism. The last time we heralded state capitalism was in Italy in the 1920’s and 30’s.
Crony capitalism was not limited to Fannie Mac and Freddie Mac. There has been a revolving door between Wall Street and Washington for decades. As long as the complicated instruments served the political greed, political leaders were willing to ignore prudent financial principles and assume that the overpaid magicians knew what they were doing.
The financial scandals of the 1980’s, the S&L collapse under George H Bush, the collapse of Long Term Capital in 1998, The collapse of the High tech Bubble should have been a warning that high salaries and bonuses are not synonymous with competence.
But the solution is not to promote more crony capitalism, also called state capitalism or my favorite term used in The New Republic, “Libertarian Paternalism” (my vote for oxymoron of the year).
By now we should have learned that when business gets in bed with the government, somebody gets screwed.
The movie speech was rumored to be taken from a speech given by Ivan Boesky at a college address. Boesky was indicted for insider trader, served time in jail and paid millions in fines.
Capitalism is not about greed; it is about economic self interest, and this is far more than a semantic distinction. When you take a job paying $10 an hour over the job paying only $8 an hour you are displaying economic self interest, not greed. And when you decide to take the job paying $8 and hour over the job paying $10 an hour because you like the conditions or the work at the lower paying job enough to sacrifice the higher pay you are also acting in your own economic self interest. Economics is about far more than money.
When you decide to take a steady job in a traditional workplace rather than make much more money in drugs and prostitution you are also acting in your economic self interest. It is when your economic self interest disconnects from moral and ethical considerations that it becomes greed.
The ultimate power is the power over your own destiny and environment, but power is most often considered in the control over others. Whereas economic self interest in about control over your own destiny, political self interest is about controlling others.
Capitalism is about people acting in each other’s own self interest and the society benefiting as a result. This works because achieving your self interest requires serving others.
Advanced economic theory also realized that self interest and sharing is not mutually exclusive. In “A Beautiful Mind” John Nash had a Eureka moment courting ladies at the beer hall with his college buddies. He realized that Adam Smith was wrong, or at least incomplete. He developed a theory of equilibrium in competitive game theory. Basically this meant that he realized that your best outcome was not to grab as much as you can for yourself, but that your chance of success was enhanced by assuring at least some success for your competitors. Not only are consumers’ well being enhanced by competition, but the outcome for the competitors themselves is improved.
In order to profit you have to provide a product or service some one else values. Bill Gates, Michael Dell, and Stephen Jobs are very, very wealthy because everyone values Microsoft Windows and Office, iPhones, Macs, and laptops.
Few people complain about the wealth of these techno entrepreneurs because they all provide value we understand. The same can be said of Warren Buffet.
Yet we are outraged at the fortunes made in the financial industry where record amounts of value have been destroyed while CEOs made millions in bonuses. We do not understand derivatives, collateralized debt obligations, and financial models: Apparently neither did the CEO’s and boards of the companies selling these products.
The Wall Street mess was the product of “crony capitalism” which is to capitalism what National Socialism (Nazism) is to socialism. Crony Capitalism is a perversion of the principles of capitalism that includes the freedom “for every man to make himself” to use the phrase of Abraham Lincoln. “Crony capitalism” has its roots in the mercantilist tradition of Alexander Hamilton. During our early years Hamilton saw a need for financial interests and the government to work “closely”. He favored a central bank and such “public private partnerships.”
Hamilton was strongly opposed by Jefferson who favored decentralization and saw the favoritism fostered by mercantilism and the influence such financiers could have over our government as a threat to liberty.
Fannie Mae for example was given special treatment and access to low interest funds available to no other financial institution, and exempted from both SEC and FDIC regulation, Fannie Mae lobbied Congress and plied their special regulators with large campaign contributions. Senator Chris Dodd, head of the Senate Banking Committee and then Senator Barak Obama were the two largest recipients.
But the real damage was not compromising two high profile Senators. Fannie Mae was given special privileges in order to carry out the political will of Congress to make housing affordable for people who shouldn’t buy homes. They created the hunting grounds for the unscrupulous.
Bonuses and bailout funds for Fannie Mae did not elicit near the outrage of AIG and the Wall Street Banks. The public still thinks it was the Gordon Gekko greed of Wall Street rather than the political greed of K Street.
We still blame the economic self interest instead of the political self interest. Articles decry the old capitalism and herald the new era of state capitalism. The last time we heralded state capitalism was in Italy in the 1920’s and 30’s.
Crony capitalism was not limited to Fannie Mac and Freddie Mac. There has been a revolving door between Wall Street and Washington for decades. As long as the complicated instruments served the political greed, political leaders were willing to ignore prudent financial principles and assume that the overpaid magicians knew what they were doing.
The financial scandals of the 1980’s, the S&L collapse under George H Bush, the collapse of Long Term Capital in 1998, The collapse of the High tech Bubble should have been a warning that high salaries and bonuses are not synonymous with competence.
But the solution is not to promote more crony capitalism, also called state capitalism or my favorite term used in The New Republic, “Libertarian Paternalism” (my vote for oxymoron of the year).
By now we should have learned that when business gets in bed with the government, somebody gets screwed.
Thursday, August 13, 2009
Gun Grandstanding
Retail sales are down sharply. Steel mills are running under 50% capacity. Auto sales have skidded to a stop. Several restaurant chains have shut down. Circuit City has closed, abandoning its newest local location without ever turning on the lights. Bankruptcies and unemployment are still rising to historical highs.
Yet there is one business that is doing very well: guns.
Gun dealers are having record sales. In fact certain sizes of ammunition are almost impossible to find. .380 caliber used in many small semi-automatics is practically unobtainable, and 9mm, also commonly used in small concealed carry weapons was getting harder to find.
It isn’t hard to figure out why. There is a perception, right or wrong, that a Democratic House and Senate with a Democratic President will eliminate or sharply restrict the right to bear arms. On the campaign trail Obama spoke of a big tax on ammunition; today we have a shortage as consumers are hoarding guns and ammo.
Even controversial rights become dear when we fear we are about to lose them. Just the discussion of curbing gun ownership is enough to create the demand and fear that leads to hoarding.
The last time we saw such activity was during the Clinton administration’s enactment of the Brady Bill. Guns sales went through the roof. People who had never thought of buying a gun bought several because they thought they were about to lose their right. Many of these people knew little about the weapons they were buying.
The Brady Bill restricted the magazine capacity you could buy with a gun to ten rounds; yet you could buy a higher capacity magazine later and use it with the gun. A .223 rifle with a wood stock was a hunting rifle and Ok but the same gun with a black plastic stock was deemed an assault rifle.
Few voters realized that fully automatic weapons had been banned since 1938, and that such weapons were very rarely used in criminal activity except on television fiction.
But the irony here is that two relatively anti-gun Democratic presidents both earned the gun salesman of the year award (figuratively). Clinton and Obama have each done more to sell more guns to more Americans than any other president. And President Obama has barely mentioned the gun issue since his election.
There are a few lessons:
1. The law is not the only or the best way to enact social change. We have reduced smoking through education and public policy campaigns without outlawing cigarettes, though we have restricted where they can be used.
2. People will often ignore an option or a right until they fear losing it. The cost of a public perception of losing the right to own a firearm undid any potential intended result of reducing firearm ownership.
3. There is a difference between making a political statement and achieving a desirable political result. Such laws as the Brady Bill touted the aims of moral supremacists who wanted fewer guns in American society. Some believe that independent citizens should not be trusted with such power; some just want a reduction in gun violence. While the Brady Bill made a strong political statement it did not achieve the result of reducing gun ownership or have a material impact on gun violence. In fact it dramatically increased gun ownership.
Gun ownership symbolizes a uniquely American relationship with their government. It says that our government does not fear an armed citizenship because they can be removed from office with a very non violent vote. Even such controversial close elections as the Bush Gore decision was resolved peacefully. The power of private gun ownership is more about the sanctity and power of the vote than about the importance of being able to freely own a snub-nosed .38 or a Glock with a laser sight.
Other than perceived pending legal threats to gun ownership the only other motivation to own a gun (other than collectors’ value) is safety. It is a commonly accepted myth that a gun is more likely to be used against the owner than in his defense. Privately held guns stop more crime than the police, most often without ever being fired. Several different researchers have documented this. (Gary Kleck, John Lott, Lee Nisbet)
Making the streets safer will reduce gun ownership far more than restricting the clip capacity of a new pistol. Guns crimes should carry stiff penalties. It seems odd that many of the moral supremacists who object to gun ownership the most are the most lenient towards violent criminals.
We can also reduce gun ownership by stopping the absurd political grandstanding on gun control. If American feels safe in their homes they will see less need to own guns. If Americans are secure in their gun ownership rights they will see even less need to exercise it.
Yet there is one business that is doing very well: guns.
Gun dealers are having record sales. In fact certain sizes of ammunition are almost impossible to find. .380 caliber used in many small semi-automatics is practically unobtainable, and 9mm, also commonly used in small concealed carry weapons was getting harder to find.
It isn’t hard to figure out why. There is a perception, right or wrong, that a Democratic House and Senate with a Democratic President will eliminate or sharply restrict the right to bear arms. On the campaign trail Obama spoke of a big tax on ammunition; today we have a shortage as consumers are hoarding guns and ammo.
Even controversial rights become dear when we fear we are about to lose them. Just the discussion of curbing gun ownership is enough to create the demand and fear that leads to hoarding.
The last time we saw such activity was during the Clinton administration’s enactment of the Brady Bill. Guns sales went through the roof. People who had never thought of buying a gun bought several because they thought they were about to lose their right. Many of these people knew little about the weapons they were buying.
The Brady Bill restricted the magazine capacity you could buy with a gun to ten rounds; yet you could buy a higher capacity magazine later and use it with the gun. A .223 rifle with a wood stock was a hunting rifle and Ok but the same gun with a black plastic stock was deemed an assault rifle.
Few voters realized that fully automatic weapons had been banned since 1938, and that such weapons were very rarely used in criminal activity except on television fiction.
But the irony here is that two relatively anti-gun Democratic presidents both earned the gun salesman of the year award (figuratively). Clinton and Obama have each done more to sell more guns to more Americans than any other president. And President Obama has barely mentioned the gun issue since his election.
There are a few lessons:
1. The law is not the only or the best way to enact social change. We have reduced smoking through education and public policy campaigns without outlawing cigarettes, though we have restricted where they can be used.
2. People will often ignore an option or a right until they fear losing it. The cost of a public perception of losing the right to own a firearm undid any potential intended result of reducing firearm ownership.
3. There is a difference between making a political statement and achieving a desirable political result. Such laws as the Brady Bill touted the aims of moral supremacists who wanted fewer guns in American society. Some believe that independent citizens should not be trusted with such power; some just want a reduction in gun violence. While the Brady Bill made a strong political statement it did not achieve the result of reducing gun ownership or have a material impact on gun violence. In fact it dramatically increased gun ownership.
Gun ownership symbolizes a uniquely American relationship with their government. It says that our government does not fear an armed citizenship because they can be removed from office with a very non violent vote. Even such controversial close elections as the Bush Gore decision was resolved peacefully. The power of private gun ownership is more about the sanctity and power of the vote than about the importance of being able to freely own a snub-nosed .38 or a Glock with a laser sight.
Other than perceived pending legal threats to gun ownership the only other motivation to own a gun (other than collectors’ value) is safety. It is a commonly accepted myth that a gun is more likely to be used against the owner than in his defense. Privately held guns stop more crime than the police, most often without ever being fired. Several different researchers have documented this. (Gary Kleck, John Lott, Lee Nisbet)
Making the streets safer will reduce gun ownership far more than restricting the clip capacity of a new pistol. Guns crimes should carry stiff penalties. It seems odd that many of the moral supremacists who object to gun ownership the most are the most lenient towards violent criminals.
We can also reduce gun ownership by stopping the absurd political grandstanding on gun control. If American feels safe in their homes they will see less need to own guns. If Americans are secure in their gun ownership rights they will see even less need to exercise it.
Monday, August 10, 2009
It Just Takes One Voice
The episode of Joe McCarthy’s communist witch hunt including the blacklisting of Hollywood writers with suspected, rarely proven (as if that should even matter), communist ties was one of our most embarrassing episodes in our recent history.
McCarthy was able to capitalize on the fears of world communist domination to scare us into trashing our most basic liberties such as free press and due process. The actual arrest of a few communist spies was just like adding gasoline to the fires of fear.
Anyone who opposed McCarthy was deemed suspect and thus was dissent squashed and reason trampled. Apparently the witch hunt started with an uneventful speech that was surprisingly given legs by unexpected press coverage. But once the story got legs McCarthy rode it for all it was worth until the fateful hearings when the Senator starting charging the Army with harboring communists; It was then that Joseph Nye, the army's chief legal representative, startled the Senator and the Chamber with his famous smack down, “"Let us not assassinate this lad further, Senator. You've done enough. Have you no sense of decency, sir, at long last? Have you left no sense of decency?"
That comment was greeted with applause, and McCarthy quickly descended into shame and oblivion, and faced censure in the Senate. Edward R. Murrow also took a courageous stand on his show, “His primary achievement has been in confusing the public mind, as between the internal and the external threats of Communism. We must not confuse dissent with disloyalty. We must remember always that accusation is not proof and that conviction depends upon evidence and due process of law. We will not walk in fear, one of another. We will not be driven by fear into an age of unreason, if we dig deep in our history and our doctrine, and remember that we are not descended from fearful men. [...] We proclaim ourselves, as indeed we are, the defenders of freedom, wherever it continues to exist in the world, but we cannot defend freedom abroad by deserting it at home. The actions of the junior Senator from Wisconsin have caused alarm and dismay amongst our allies abroad, and given considerable comfort to our enemies. And whose fault is that? Not really his. He didn't create this situation of fear; he merely exploited it — and rather successfully.”
In spite of a free press and unlimited sources of information we have not escaped the dangers of a sycophantic press who fear being called ‘racist’ for challenging the reason or policy of a minority, or a ‘denier’ (i.e. as in ‘holocaust denier’ ) for challenging the claim ‘the debate is over’ (Al Gore's response to challenges about global warming) when in fact the debate never occurred. Such accusations bring the same chill to dissent as 'communist' did from Joe McCarthy.
Any challenge to a political orthodoxy must come from within its own party to be effective. The opposition is never taken seriously and in this new era where most seek or filter the news to confirm their existing opinion, calls for change and contrary evidence cannot even be heard.
But we should remember Joseph Nye and Edward Murrow that it just takes one voice to expose a fraud and stop it dead in its tracks.
Friday, August 7, 2009
The Real Cost of Raising the Minimum Wage
July 13, 2009
The wages of guessing
Randall Hoven
From American Thinker
read the accompanying article here
Wednesday, August 5, 2009
A Cuban Tragedy
A Cuban massacre we never heard about..
from American Thinker
July 13, 2009
Anniversary of a Castroite Massacre
By Humberto Fontova
read whole story here
excerpt:
So what's the alternative if you can't flee Cuba? Well, in 1986 Cuba's suicide rate reached 24 per thousand - making it double Latin America's average, making it triple Cuba's rate during the unspeakable Batista era, making Cuban women the most suicidal in the world, and making death by suicide the primary cause of death for Cubans aged 15-48.
At that point the Cuban government ceased publishing the statistics on the self-slaughter, disguising them as "violent deaths," etc. The implications horrified even Cuba's Stalinist rulers.
from American Thinker
July 13, 2009
Anniversary of a Castroite Massacre
By Humberto Fontova
read whole story here
excerpt:
So what's the alternative if you can't flee Cuba? Well, in 1986 Cuba's suicide rate reached 24 per thousand - making it double Latin America's average, making it triple Cuba's rate during the unspeakable Batista era, making Cuban women the most suicidal in the world, and making death by suicide the primary cause of death for Cubans aged 15-48.
At that point the Cuban government ceased publishing the statistics on the self-slaughter, disguising them as "violent deaths," etc. The implications horrified even Cuba's Stalinist rulers.
Saturday, August 1, 2009
A Death of a Thousand Cuts
The question that belies the new administration’s infinite number of programs is whether each additional initiative adds followers or deletes them.
Will the gain of union support for the attempt at the card check legislation be more than offset by the loss of business owners, managers, and entrepreneurs? Will the quasi nationalization of the major auto companies gain or lose support? Will his stand on the Middle East gain or lose followers? Will his huge deficits attract or detract supporters?
Obama won with 52.9 % of the vote, and that was running against a very unpopular party tied to a very unpopular war with a disastrous economic collapse just months before the election. Many supported the new president, hoping he would govern more to the center than he ran.
There are liberals who are disappointed that he has not been as aggressive in winding down the war as they hoped, that he has not fully endorsed gay marriage as much as they wished. And there are independents whose support dwindles with each new program.
The danger of so many and such ambitious programs is that each one will erode a little support and the total will turn his support upside down.
Yet even this erosion may be moot if the Republicans cannot articulate a clear alternative and present a leader that can effectively deliver the message. Recycling Newt and Sarah will not work.
While the Republicans still seem lost in the wilderness, every new program Obama announces may be costing him support. With such an ambitious agenda he may sow the seeds of his demise- one cut at a time.
Will the gain of union support for the attempt at the card check legislation be more than offset by the loss of business owners, managers, and entrepreneurs? Will the quasi nationalization of the major auto companies gain or lose support? Will his stand on the Middle East gain or lose followers? Will his huge deficits attract or detract supporters?
Obama won with 52.9 % of the vote, and that was running against a very unpopular party tied to a very unpopular war with a disastrous economic collapse just months before the election. Many supported the new president, hoping he would govern more to the center than he ran.
There are liberals who are disappointed that he has not been as aggressive in winding down the war as they hoped, that he has not fully endorsed gay marriage as much as they wished. And there are independents whose support dwindles with each new program.
The danger of so many and such ambitious programs is that each one will erode a little support and the total will turn his support upside down.
Yet even this erosion may be moot if the Republicans cannot articulate a clear alternative and present a leader that can effectively deliver the message. Recycling Newt and Sarah will not work.
While the Republicans still seem lost in the wilderness, every new program Obama announces may be costing him support. With such an ambitious agenda he may sow the seeds of his demise- one cut at a time.
Thursday, July 30, 2009
The Great Compression and Its Aftermath
Paul Krugman referred to the period between 1930 and 1980 as the Great Compression, referring to a flattening of the incomes from the very rich and the very poor of the Gilded Age and the growing income inequality from the Reagan era onward.
In “the Conscience of a Liberal” he credits this compression to FDR’ New Deal and its higher taxes on the wealthy and on the rise of unions in the American workplace.
He further notes that the higher wages and benefits had no negative consequence for the auto and steel industries. While that seems foolish in light of GM and Chrysler being bankrupts wards of the government it is correct for the period between 1930 and 1980.
But that economic environment was also very different. The stock market crash like our recent collapse brought the rich down much faster and further than the poor. And while the unions were able to bargain better conditions and wages they were bolstered by the wartime demand stimulation and more so because all of American industry’s overseas competition was destroyed by the war.
The growth of global completion changed everything as we tended to import low wage jobs and export high wage jobs, increasing the wage spread. The growth of the technology sector added to the spread.
Like the Crash of 1929 we are seeing a replay of a flattening of incomes but it should not be compared to a period stimulated by war and protected by the destruction of its trading partners.
There has been outrageous bonuses and pay on the high end, but the market will likely correct it without government interference.
Higher taxes and union pressure should not be expected to yield the same result as it did in very different time. Without the protections enjoyed during the Great Compression it would have just been call a longer Greater Depression.
In “the Conscience of a Liberal” he credits this compression to FDR’ New Deal and its higher taxes on the wealthy and on the rise of unions in the American workplace.
He further notes that the higher wages and benefits had no negative consequence for the auto and steel industries. While that seems foolish in light of GM and Chrysler being bankrupts wards of the government it is correct for the period between 1930 and 1980.
But that economic environment was also very different. The stock market crash like our recent collapse brought the rich down much faster and further than the poor. And while the unions were able to bargain better conditions and wages they were bolstered by the wartime demand stimulation and more so because all of American industry’s overseas competition was destroyed by the war.
The growth of global completion changed everything as we tended to import low wage jobs and export high wage jobs, increasing the wage spread. The growth of the technology sector added to the spread.
Like the Crash of 1929 we are seeing a replay of a flattening of incomes but it should not be compared to a period stimulated by war and protected by the destruction of its trading partners.
There has been outrageous bonuses and pay on the high end, but the market will likely correct it without government interference.
Higher taxes and union pressure should not be expected to yield the same result as it did in very different time. Without the protections enjoyed during the Great Compression it would have just been call a longer Greater Depression.
Tuesday, July 28, 2009
Heebs of the Revolution
Our trip to Cuba was sponsored by the United Jewish Communities as an outreach to the Jewish community there. We visited three congregations in Havana and a small community in Santa Clara, about a four hour ride from Havana.
There are about 1500 Jews in Cuba. Before the Revolution there were closer to 15,000. Many left when the getting was good between 1959 and 1965. Because of Castro’s compression of incomes many professionals departed until the brain drain caused such a problem that Castro called a halt to emigration. Many more Jews were assimilated into the ultimate of western egalitarian societies.
The first Jews probably landed in Cuba during the initial European explorations. Some moved to Cuba during our colonial phase to manage sugar cane fields and other enterprises. But the majority of the Jews ended up in Cuba leaving Europe and Russia before World War II.
There were restrictions on Jews coming into the United States, and the British kept immigration to Palestine very low to appease Arab terrorists in their mandate. Havana became an immigrant hotel for those hoping to get to America later. Havana, before the revolution, was a spectacular city, the Paris of the Caribbean. Only Buenos Aires compared. It was nice enough to stay.
The underbelly of Cuba before Castro was that while industrious it was also corrupt and many of the poor in the countryside were terribly neglected for the lucrative franchises in Havana. Organized crime was welcomed as were large corporations as long as they stuffed the dictator’s coffers. You may recall the scenes in the Godfather II as Michael Corleone struggled with his indecision to invest in Havana with fellow gangster Hyman Rothstein (the character was modeled after Meyer Lansky, a Polish born Jew). Corleone left just ahead of the advancing coup with his money intact. The overthrown dictator Batista, escaped with all the cash he could carry, one estimate was $300 million, and lived the rest of his life off the coast of Spain
But liberation is far from synonymous with liberty and Cuba merely exchanged one dictator for another, even if it was one with a drastically different social and political view.
We saw no signs of anti-Semitism and this was emphasized by several community leaders including one who spoke of Castro’s visit to their congregation with pride. During the rise of the Cuban Utopian Revolution the Communist Party frowned on all religion, and it was hard to rise far if in the party if you openly expressed your faith of any sort. But the Cuban revolution lasted initially only because of the Russian largess and support in search of a base so close to their number one enemy.
During the early 1990’s, Russia pulled their financial support from the Cubans and it caused tremendous hardship on the island. Maybe coincidentally (maybe not) Castro and the party at that time relaxed their stance on religious affiliation and even created a ministry of religious affairs. Perhaps since he could not give them prosperity, he elected to give them religion, the “opiate of the masses”. Religious observance started a rebirth.
With help from the American Jews and others, the Jews in Cuba starting searching for those who had Jewish connections and synagogues started to attract observers. We went to small Jewish cemeteries in Havana and Santa Clara and they both had Holocaust memorials which were small (like a monument) but beautiful and shown with a great sense of pride. The cemeteries were being repaired and were carefully manicured.
An Israeli entrepreneur has partnered with the government to develop orange groves, and it furnishes much of the orange juice served on the island, for tourists like us and a few others than can afford it.
The Jews in Cuba face the same problems as anyone else on the large island. The Communist utopia turned the Paris of the Caribbean to a third world country. Average income is $15 a month, but the state provides health care, education, housing and transportation for free to everyone. The magnificent buildings are commonly in terrible decay, except for public buildings like government offices and museums.
Cuba is a common tourist spot for Canadians and Europeans and sports beaches on the north part of the island. It seems foreign to us because of the embargo, yet it is only 90 miles away. They do not have a free press and there are few news outlets, but there are art galleries- Castro is a big supporter of the arts and art school is also free. I can only assume that most of their knowledge of Americans and world affairs comes from interaction with the tourists and government propaganda.
Yet what strikes any Jew visiting a synagogue in a foreign country is the nearly identical Hebrew prayers and even the melodies to chant them. It’s the same in Mexico, Australia, China, Europe, Africa and … Cuba as it is in Israel. There have been changes but the services would likely be recognizable with prayers in Israel over a thousand years ago. Conversations are peppered with Yiddish expressions that could be heard in any Jewish family gathering.
The Roman enforced Diaspora scattered Jews all over the world to squelch repeated attempts at revolution against the Roman Empire. It is an historical oddity that for 2,000 years the Diaspora would so still define the homeland that Moses led them to after he came down from Mt. Sinai and….
… started a revolution.
There are about 1500 Jews in Cuba. Before the Revolution there were closer to 15,000. Many left when the getting was good between 1959 and 1965. Because of Castro’s compression of incomes many professionals departed until the brain drain caused such a problem that Castro called a halt to emigration. Many more Jews were assimilated into the ultimate of western egalitarian societies.
The first Jews probably landed in Cuba during the initial European explorations. Some moved to Cuba during our colonial phase to manage sugar cane fields and other enterprises. But the majority of the Jews ended up in Cuba leaving Europe and Russia before World War II.
There were restrictions on Jews coming into the United States, and the British kept immigration to Palestine very low to appease Arab terrorists in their mandate. Havana became an immigrant hotel for those hoping to get to America later. Havana, before the revolution, was a spectacular city, the Paris of the Caribbean. Only Buenos Aires compared. It was nice enough to stay.
The underbelly of Cuba before Castro was that while industrious it was also corrupt and many of the poor in the countryside were terribly neglected for the lucrative franchises in Havana. Organized crime was welcomed as were large corporations as long as they stuffed the dictator’s coffers. You may recall the scenes in the Godfather II as Michael Corleone struggled with his indecision to invest in Havana with fellow gangster Hyman Rothstein (the character was modeled after Meyer Lansky, a Polish born Jew). Corleone left just ahead of the advancing coup with his money intact. The overthrown dictator Batista, escaped with all the cash he could carry, one estimate was $300 million, and lived the rest of his life off the coast of Spain
But liberation is far from synonymous with liberty and Cuba merely exchanged one dictator for another, even if it was one with a drastically different social and political view.
We saw no signs of anti-Semitism and this was emphasized by several community leaders including one who spoke of Castro’s visit to their congregation with pride. During the rise of the Cuban Utopian Revolution the Communist Party frowned on all religion, and it was hard to rise far if in the party if you openly expressed your faith of any sort. But the Cuban revolution lasted initially only because of the Russian largess and support in search of a base so close to their number one enemy.
During the early 1990’s, Russia pulled their financial support from the Cubans and it caused tremendous hardship on the island. Maybe coincidentally (maybe not) Castro and the party at that time relaxed their stance on religious affiliation and even created a ministry of religious affairs. Perhaps since he could not give them prosperity, he elected to give them religion, the “opiate of the masses”. Religious observance started a rebirth.
With help from the American Jews and others, the Jews in Cuba starting searching for those who had Jewish connections and synagogues started to attract observers. We went to small Jewish cemeteries in Havana and Santa Clara and they both had Holocaust memorials which were small (like a monument) but beautiful and shown with a great sense of pride. The cemeteries were being repaired and were carefully manicured.
An Israeli entrepreneur has partnered with the government to develop orange groves, and it furnishes much of the orange juice served on the island, for tourists like us and a few others than can afford it.
The Jews in Cuba face the same problems as anyone else on the large island. The Communist utopia turned the Paris of the Caribbean to a third world country. Average income is $15 a month, but the state provides health care, education, housing and transportation for free to everyone. The magnificent buildings are commonly in terrible decay, except for public buildings like government offices and museums.
Cuba is a common tourist spot for Canadians and Europeans and sports beaches on the north part of the island. It seems foreign to us because of the embargo, yet it is only 90 miles away. They do not have a free press and there are few news outlets, but there are art galleries- Castro is a big supporter of the arts and art school is also free. I can only assume that most of their knowledge of Americans and world affairs comes from interaction with the tourists and government propaganda.
Yet what strikes any Jew visiting a synagogue in a foreign country is the nearly identical Hebrew prayers and even the melodies to chant them. It’s the same in Mexico, Australia, China, Europe, Africa and … Cuba as it is in Israel. There have been changes but the services would likely be recognizable with prayers in Israel over a thousand years ago. Conversations are peppered with Yiddish expressions that could be heard in any Jewish family gathering.
The Roman enforced Diaspora scattered Jews all over the world to squelch repeated attempts at revolution against the Roman Empire. It is an historical oddity that for 2,000 years the Diaspora would so still define the homeland that Moses led them to after he came down from Mt. Sinai and….
… started a revolution.
Thursday, July 23, 2009
Wednesday, July 22, 2009
Understandable Vandalism
At the Kroger gas station there is the little machine attached to the pump that dispenses engine additives as an upsale to your gasoline purchase. As you go about your normal fueling the machine introduces itself with the annoying four notes and then the irritating digital voice tries to sell you the various products that will get better gas mileage and extend the life of your car.
At the bottom right of the machine is a button that you can push to stop the message in the event you just want to pump gas in peace and quiet. I have noticed that the button to shut up the message has been damaged beyond use on most of the machines I encounter; like someone has stabbed it with a knife or a pen.
I am assuming that this act of vandalism is triggered by the annoying intrusion of the message, and the refusal of the machine to shut up immediately when the consumer pushes the button to end the message. One friend avoids these pumps because he finds them so annoying.
I don’t encourage vandalism but I certainly understand it in this case.
At the bottom right of the machine is a button that you can push to stop the message in the event you just want to pump gas in peace and quiet. I have noticed that the button to shut up the message has been damaged beyond use on most of the machines I encounter; like someone has stabbed it with a knife or a pen.
I am assuming that this act of vandalism is triggered by the annoying intrusion of the message, and the refusal of the machine to shut up immediately when the consumer pushes the button to end the message. One friend avoids these pumps because he finds them so annoying.
I don’t encourage vandalism but I certainly understand it in this case.
Tuesday, July 21, 2009
Nassim Taleb on The Best Way to Deleverage
I have been a fan of Nassim Taleb since I read "Fooled by Randomness". I remember stumbling in it the bookstore at Columbia University in New York. I quickly grabbed his most noted book, "The Black Swan" which continued his philosophy of human behavior and our poor understanding of risk and statistics. His warning of the fragility of our financial system was prescient.
On MSNBC (read and view the interview here) Taleb recommended that the banks convert mortgage loans to partial equity in an effort to drastically deleverage the economy, which he sees and our main problem and very little is being done to address.
I thought it was a great idea. It helps the homeowner get a fresh start. The most debt is not in the Wall Street firms but in mortgage debt to the consumers. Instead of bailing out failing organizations we could reduce crippling bank debt and help consumers at the same time.
Taleb is a great intellect with an uncommon depth on the subject. He may a bit of a hard read for some and many consider him too far out of mainstream to be credible, but look where mainstream thinking got us. I found him insightful and claryfing.
If you are not inclined to read such material for fun, check out his many interviews on YouTube.
Tips to Douglass Ott.
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