Category: Society

What Does It Mean?

She’s a draw, no doubt.  She has a bestseller, a slot on Fox News, and she commands speaking fees of $100,000 a pop.  But can that translate into votes?  Does that mean she is a viable presidential candidate — as some seem to think?

A story on Politico last week raises doubts:  “Palin is great at the box office. Among modern American political figures, she is second only to Barack Obama in generating clicks (for Web sites such as this one) and ratings (for the cable news networks hungering around the clock for fresh material).”  (See, “Why the Mainstream Media Loves Sarah Palin.”)

The media’s insatiable appetite for entertaining news makes it more and more difficult to say what is really going on.  Lively, unpredictable, confident, a little wacky, she has just those qualities that attract attention, that make for a good story.  Her sudden accent to fame is still remembered, along with the rumors and gossip about her family.  The continuing frenzy of her fans gets a lot of play as well, as does the ridicule she arouses on Comedy Central.

But important and mesmerizing as celebrity is in our culture, one type does not fit all our needs.  A winner on American Idol wouldn’t necessarily be a competent Senator, or likely to be elected president of the United States.

To be sure, she has some credibility in the political realm.  She came on the national political stage as governor of Alaska and Republican Vice Presidential candidate.  On the other hand, she had little experience as Governor before the national election, and she quit the job before her first term expired.

Politico cited a Washington Post/ABC survey that showed:  “only a quarter of those polled said Palin was qualified to be president — and 71 percent said she was not.  What’s more, 52 percent of self-identified Republicans — more than half — said she wasn’t qualified to be president.”

But that doesn’t mean they wouldn’t continue to read stories about her or buy her books.  And it doesn’t mean she’s not enjoying the attention she’s receiving – or making money in the process.  If one stands back from the whole spectacle for a moment, it does seem as if she’s having fun.  And perhaps that is true for those of us who consume the news as well.

Politico concludes, she’s “good for business” – their business, that is, the business of news.  And that is what her popularity seems to mean.

‘Like a patient etherized upon a table’

If we think of the economy as an actual body, we can start to appreciate how difficult it is to assess its over-all state of health – and how misleading to isolate one indicator.

So is blood flowing through the arteries and veins robustly, like money and credit nourishing the organs and limbs, enabling them to function?

The brain, is it able to manage the whole system, detecting vital signals and sending out instructions that keep the whole effective and in balance?

Is there employment for the limbs, activities to keep the arms and legs busy doing what they need to do to stay in shape?

I don’t want to stretch the analogy too far because it breaks down quickly, but perhaps not before it helps us become aware of how multi-faceted and complex real health is — and real economies.

So while the Dow once again has surged above 10,000, which is being taken as a sign of economic health, here is another diagnostic observation from Bob Herbert in The New York Times:  “What you’re not hearing from the politicians and the talking heads is that the joblessness and underemployment in America’s low-income households rival their heights in the Great Depression of the 1930s — and in some instances are worse.”

Herbert cites a study complied by The Center for Labor Market Studies at Northeastern University that divided American households into 10 groups based on annual household income. “The highest group, with household incomes of $150,000 or more, had an unemployment rate . . . of 3.2 percent. The next highest . . . an unemployment rate of 4 percent.

“Contrast those figures with the unemployment rate of the lowest group, which had annual household incomes of $12,499 or less. The unemployment rate of that group during the fourth quarter of last year was a staggering 30.8 percent. That’s more than five points higher than the overall jobless rate at the height of the Depression.  The next lowest group, with incomes of $12,500 to $20,000, had an unemployment rate of 19.1 percent.”  (See, “The Worst of the Pain.”)

So what are the vital signs that count?  Chances are that those in the highest groups are reassured that the Dow is up.  Credit is flowing through their veins just fine.  On the other hand, the level of the Dow would be largely irrelevant to those in the lowest groups, comatose and inactive.

Put that way, it’s obvious.  But when we read in the papers or hear on the news that the Dow’s breaking 10,000 is a sign of the “economy’s recovery,” we might well be wise to question the implicit assumption that we have a single economy, at least one that can be measured so definitively.

What we don’t know we know is how easily our language shapes the world we see – and how casually it excludes much of what we might not want to think about.

. . . and Markets Spin Out of Control

Our society embraces competition.  It’s not just how we work, but also what we believe in.  Yet, in retrospect, the credit crisis of 2008 seems to suggest that there are times it doesn’t work at all.

The bankers, hedge fund managers and other investors who are theoretically supposed to monitor each other’s aggressive moves, relentlessly making sure that no one gets a competitive edge, seem in fact to have been collectively out of control.

John Cassidy in his account of the crisis, How Markets Fail, wrote:

“Consider what would have happened if [Chuck] Prince . . . chief executive of Citigroup from 2003 to 2007, had announced in 2005, say, that Citi was withdrawing from the subprime market because it was getting too risky. What would have been the reaction of Prince’s rivals? Would they have acknowledged the wisdom of his move and copied it? Not likely. Rather, they would have ordered their underlings to rush in and take the business Citi was leaving behind. Citi’s short-term earnings would have suffered relative to those of its peers; its stock price would have come under pressure; and Prince, who was already facing criticism because of problems in other areas of Citi’s business, would have been written off as a fuddy-duddy.”

Cassidy notes that Prince said to a Financial Times reporter in July 2007:  “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”

We might argue that real leadership would have required just such an abrupt departure from the party, but bankers recently have been complaining that there was no one to stop them from taking the risks that led to the collapse of the market.

This is a startling shift from the argument of classical economics that markets are inherently self-correcting:  all the information is there and it all comes into play.  Markets can be relied upon to determine real values – so long as government refrains from getting in the way.

But Prince’s comments suggest that investors are often not really able to take in the information that’s available.  They are looking at each other, mesmerized by the “music,” compelled to keep time with everyone else.  Their behavior indicates that markets often don’t work in the way that our prophets of economic rationality have been proposing they do.

So where does that leave us?  Certainly we will have to pay attention to the work of behavioral economists who call attention to the psychological underpinnings of investor actions.  But that’s just the start of what is required to grasp the full scope of human behavior – and economic behavior too.  It can be profoundly irrational and self-defeating.  Moreover, there are collective forces that are sometimes impossible to control.

What we don’t know we know is the power of the group to shape the choices we think we have.

Appearance or Reality?

We still have voters who call themselves “Democrats” and “Republicans.”  Congress is still formally divided along party lines.  But do these labels define a reality?  Perhaps, once again, we are trapped by habits of thought – or by conventions that have become obsolete without our having grasped the change.

A few weeks ago, in the wake of Scott Brown’s victory in Massachusetts, Drew Westen, the psychologist-turned-political consultant, faulted Obama on the Huffington Post for having tried to be bi-partisan.  “We have competing ideas in a democracy — and hence competing parties — for a reason. To paper them over and pretend they do not exist . . . is an abdication of responsibility.”  (See, “Obama Finally Gets His Victory For Bipartisanship.”)

Westen’s point is that Obama should have combated the Republicans more vigorously.  His failure to do so now saddles him with the requirement to work with Republicans, a need he didn’t have before.

Westen is not alone in deploring Obama’s lack of aggressive leadership.  But thanks to the splintering of the Democrats and the conflicting interests they represent, the health care bill that the Senate was so close to passing had been sliced up in dozens of ways.  To be sure, there actually was a bill in the works, before the Massachusetts election, but even most of the Democrats were unhappy with it.

On the other hand, who are the Republicans?  According to a Daily Kos poll:  “a large portion of GOP voters think that President Obama is racist, socialist or a non-US citizen.”

Some of the particulars:

39 percent believe Obama should be impeached,

36 percent believe he was not born in the United States,

31 percent believe Obama is a “Racist who hates White people” — the description once adopted by Fox News’s Glenn Beck.

63 percent think he is a socialist,

24 percent believe he wants “the terrorists to win,”

23 percent of Republicans believe that their state should secede from the United States, 19 percent aren’t sure, 58 percent said no.

53 percent of Republicans said they believe Sarah Palin is more qualified to be president than Obama.

Markos Moulitsas, founder and publisher of Daily Kos, commented: “This is why it’s becoming impossible for elected Republicans to work with Democrats to improve our country.  They are a party beholden to conspiracy theorists who . . . already want to impeach him despite a glaring lack of scandal or wrongdoing.” (See, Daily Kos, “Research 2000 Poll.”)

Bipartisanship requires two parties to work, but perhaps we have more of an illusion of parties today than a truly functioning set.  Few prominent politicians want to come out and say that the system is not working.  But perhaps what we don’t know we know is that, actually, it’s not.

“Rookie Camp”

Rather than exploit and blame sports figures who get embroiled in scandals for which they are unprepared, some team owners and managers are doing something to help young players.

According to a story in The New York Times last week:  “talented players are being prepared for the temptations and confusions of sudden fame, worse now than ever before:  The therapists and former major leaguers who work in the rookie program say the psychological challenges are the most daunting in its 18-year history — even more so than when the chief problem was illegal drugs.”

The story points out that “the culture of celebrity — aided by cellphone videos, social-networking Web sites and round-the-clock sports coverage — has grown so all-consuming that it has thoroughly invaded players’ lives. It can inflate their fame, or spoil it, far faster than most can mentally adjust.”

This is particularly troubling to baseball players, for whom the transition from the minor to the major leagues can be so sudden: “These guys come straight from playing in Elmira, Duluth, Tidewater, to the big stadiums and the media,” said Gene Orza, chief operating officer of the players union. “Their transition is far more abrupt than maybe any other sport.”

The camp uses small discussion groups, role playing and, even, brief skits to illustrate the issues the players are likely to face and put them on guard against the exploitation and loss of privacy they will inevitably face.  It also helps them to deal with frustration and disappointment.  A player who was the object of attention one minute, because of his exceptional promise, can be discarded the next if he suffers a significant injury.  A psychiatrist who works at the camp noted of one of them:  “Instead of a superstar, he was nothing. Nothing.”

“These guys play not only because they’re good at it but often because the performance euphoria is a good way to deal with their personal demons. Take the sport away, and, well, they need a way to cope with what’s left.”  (See, “Coaching Baseball Rookies for Life in the Limelight.”)

The preparation of the rookie camp can be good news for fans too, sparing youngsters the painful disillusionment of reading about the tabloid exploits of their new heroes.  It can give all of us fewer opportunities to indulge our appetite for schadenfreude.  And it might help to raise the general level of public expectations for those who stand out from the crowd.