Monday, January 15, 2018

Books: Tipping The Velvet By Sarah Waters

(Drivebycuriosity) - Sarah Waters belongs to my favorite authors. I enjoyed her novels "Paying Guests" & "Affinity" and I love the movie "The Handmaiden" based on her novel "Fingersmith". I love Water`s brilliant observations of human relations & society and her humor. I just finished "Tipping The Velvet", the best book of the Waters books I have read so far (amazon).

Waters sends her protagonist on a wild ride. The novel, set in England in the late 19th century (Victorian era), has three chapters which are very different, even though the protagonist doesn´t change and the plot is told chronological. The book is written in first person. Nancy, who grew up in a fishmonger family in an English coastal town, prefers girls. In the course of the book she makes new friends, which life changing results (I don´t tell you more. This is a spoiler free blog. You can find a synopsis here wikipedia).

The novel reads like a female 20th century version of Oscar Wild, just much more analytical & explicit, but the book also reminds me of Franz Kafka`s dark philosophical musings. Waters delivers an intense psychological study and describes the characters vividly & plausibly. The book is precisely & analytical written - but also entertaining and kept me curious till the ending of the book. Waters immerses the reader deep into Nancy´s thinking & feeling. This is for me, as a male, a glance into an alternate universe. The book is partly a steamy erotic novel, but also a portrait of England`society in the late 19th century, it is dramatic & kinky and sometimes funny - and there is one ridiculous funny slapstick scene which drove tears in my ears while reading - priceless.

I plan to read more books by Sarah Waters.

Politics: Are American Liberals Really Liberal?

(Drivebycuriosity) - Words have sometimes different meanings in Europe and in the USA. This holds true for the word liberal. In Europe the term stands for liberty and for individual freedom. European liberals are inspired by Adam Smith, Friedrich Hayek & Milton Friedman. European liberals believe in private property, free speech and self-determination. They don`t trust strong governments, instead they believe in competition and free markets. European liberals endorse low taxes and they disfavor regulation.

The word liberal has a very different meaning in the US. There it stands for the Democratic Party and her supporters. American liberals care less about individual freedom, self-determination and private property. They don´t believe in markets and they don´t trust corporations. Liberals in America prefer strong governments which have the mandate to regulate and to control almost everything. American liberals support high taxes and they endorse taking money from the rich.

The differences are visible on America`s political map. Liberal states (in the US sense) are marked with blue, the others with red (!). Nevada - home of Las Vegas - is maybe the most liberal US state in an European sense. Nevada has relatively low taxes and less regulation then the majority of the US states (regulation). Nevada´s citizens - and visitors - enjoy a lot personal freedom, they are permitted to gamble, to purchase weed, to sell and to buy sex. New York State, which belongs to the most liberal states in the US sense, has relative high taxes & strong regulations. New York`s citizens are not permitted to purchase weed and to sell or buy sex.

American liberals stand on the left side of the political spectrum. Many leading American liberals support socialist systems and even dictatorships. Liberal Senator Bernie Sanders declared: “These days, the American dream is more apt to be realized in South America, in places such as Ecuador, Venezuela and Argentina, where incomes are actually more equal today than they are in the land of Horatio Alger" ( New York`s mayor Bill de Blasio, another liberal, was an advocate of “democratic socialism" and admirer of of Nicaragua’s Sandinista party (observer  nytimes). De Blasio declared “government must focus on the needs of families, must be the protector of neighborhoods and must guard the people from the enormous power of moneyed interests" (observer). And even Barack Obama visited Cuba during his presidency and showed his sympathies for the regime.

The majority of the US news papers and online media sites belong to the liberal camp, including New York Times, Washington Post, Los Angeles Times, Atlantic Magazine, The New Yorker and others. Many liberal journalist have an anti-capitalism stance and are obsessed with alleged failures of corporations. Hollywood, a billion dollar industry, produces movies which are usually anti-business, anti-corporation and demonize capitalism. Actor & director Sean Penn, a liberal Hollywood star, described the late Venezuelan President Hugo Chavez as a Robin Hood of sorts, a revolutionary wonder (foxnews  google). Liberal movie director Michael Moore is also a supporter of the socialist regimes in Cuba & Venezuela (Moore). Liberal American university professors still teach socialist ideas ( No wonder that the prestigious Carnegie Mellon University is celebrating the 200th anniversary of Karl Marx`s birthday (carnegie  academia).

In the US the word liberal is a synonym for left wing and socialist. Anybody who stands left from the middle is called liberal, including people who are comparable to the German Social Democrats (SPD) and those who are similar with the socialist followers of the British Labour Party - even Lenin, Stalin & Marx would fit into the liberal camp.  There´s something wrong with people who label themselves with a tag they hate.

PS On top of this post I use a map I found on Wikipedia which summarizes US election results since 2004. States where the liberals won all 4 elections are deep-blue (wikipedia).

Saturday, January 13, 2018

Movies: Phantom Thread

(Drivebycuriosity) - Paul Thomas Anderson belongs to my favorite movie directors. I love his films "The Master" & "Inherent Vice". His newest creation, "Phantom Thread", came up to my elevated expectations (imdb). It´s a very special movie. "Phantom", set in England in the 1950s, tells the story of Reynold and Alma. Reynold is a fashion designer, a maker of awesome and very exclusive dresses, an artist - and he is very willful & abrasive. Alma is a waitress. They become a couple and the film focuses on a love story between two very different characters, a very special version of the beauty and the beast and a little bit like George Bernard Shaw’s "Pygmalion" (I don´t tell more, this is a spoiler free blog ).

It`s a very slow movie, a meditation about fashion, art, craftsmanship, perfectionism, luxury, food & devotion. Every shot was painstakingly crafted like the exquisite creations of the dressmaker. Many of the staff of Reynold`s couture house, as well as other bit parts, are played not by professional actors but by real seamstresses or persons connected with the fashion world. Anderson, who also wrote the script, gave the pair witty dialogues spiced with a sharp humor.  I really enjoyed watching Daniel Day Lewis & Vicky Krieps, who played the leading characters, and Lesley Manville, as Reynold´s sister & assistant.

It is remarkable that Anderson did also the cinematography, not even Stanley Kubrick & Alfred Hitchcock did that. He delivered a feast for the eyes. I watched the 70 mm version in New York´s AMC Loews Lincoln Square theater and got enchanted by the film`s visual magic. Paul Thomas Anderson created another work of art. Go and watch it!

Thursday, January 11, 2018

Economics: Oil - Why We Need More Drilling

(Drivebycuriosity) - I am basically an optimist. But there is one development which irritates me - the rise of the oil price. As the chart above shows, the oil price has been climbing since early 2016  and gained more than 100% (calculatedrisk). To make it worse, it looks like that the ascend is accelerating.

The recent rise is caused by a climbing demand, especially in the US. The Americans are moving again to the suburbs, buying more cars & driving longer distances. Stronger global economic growth is also fostering oil consumption. So the US demand for gasoline climbed already onto new records. Otherwise OPEC is curbing production because they want even higher prices. Oil is getting scarcer.

I am spooked by history. Nine out of ten of the U.S. recessions since World War II were preceded by a spike up in oil prices, writes Prof. James D. Hamilton, University of California, San Diego ( pdf econweb). Another study by Prof.  Hamilton shows that the oil price shock from 2008 - from summer 2007 through July 2008 the oil price spiraled from about $50 to $147 -  turned the economic slowdown into a severe recession (econbrowser).: "The oil price increase over 2007:H2-2008:H1 should be regarded as a key development that turned the slowdown in growth into a recession" (archives).

Other researchers came to the same results: "Oil prices played a role in eventually bursting the US subprime bubble....In 2003, the average suburban household spent $1,422 a year on gasoline, which rose to $3,196 in 2008 (oilprice). "Rising household energy prices constrained household budgets and increased mortgage delinquency rates" (oilprice). Low income suburban homeowners suffered most from the rising gas prices.  Poor homeowners are called "subprime" and their delinquencies are known as "subprime crisis."

                                    Preventing The Next Oil Price Shock

We are still far away from the danger zone, which certainly hovers above $100. But history also shows that oil price rallies attract speculators, including hedge funds, who purchase oil futures on the financial markets as a bet on further price gains, the so-called momentum players. Their herding behavior causes snow ball effects like the oil price spike of 2008.

How can an another oil price shock be prevented?  The answer is more drilling - especially in the US.  Rising American oil production - especially by fracking - caused the oil price drop in 2014. The hiked US oil production is now partly compensated by more oil demand and a curbed OPEC production. So we need more drilling in the US to compensate OPECs strategy. The Trump Administration announced a plan to expand drilling in US continental waters - this would be a step in the right direction  (washingtonpost).

Wednesday, January 10, 2018

Movies: I, Tonya

(Drivebycuriosity) - Figure skating is a very competitive sport, sometimes too competitive it seems. In the year 1994 the US figure skating society had a scandal: Olympic figure skater Tonya Harding got a live-long suspension from her sports because of an alleged attack on her rival & Olympic team mate Nancy Kerrigan. The movie "I, Tonya" tells her story (imdb).

The comedy-drama looks like a TV show with a lot staged interviews and flashbacks. I cared about Tony, a redneck girl, who got drilled & bred by a white trash and hyper-ambitious mother and chose an abusive boyfriend & husband with dubious friends. The reckless & moronic behavior of some characters reminded me of the movie "Fargo" even though the story lines are very different. The film had some awesome figure skating scenes - with the help of visual effects and CG - and gained a lot from its soundtrack of 80s pop songs.

Three actresses made the film remarkable: Allison Janney as the hyper-tough "tiger" mother (wikipedia ) will linger in my memory for a while, Margot Robbie, incarnated convincingly the leading character, and I also enjoyed Julianne Nicholson as her sympathetic coach. You might love the movie if you are in biopics and well acted movies.

Monday, January 8, 2018

Books: Margaret Thatcher - Downing Street Years

(Drivebycuriosity) - Europe is changing. The trouble with Greece and the deluge of immigrants create enormous challenges. The old continent could need a strong, smart and clearly thinking politician - a person like Margaret Thatcher. I reckon that she was the most important political leader since WWII besides Ronald Regan - and we miss her much.

I enjoyed her autobiography "Margaret Thatcher: Downing Street Years" even though the 832 pages were written in a very prosaic style (amazon). The book contains almost no personal information (except some mentions about teeth pain) instead she presents her insights about the political & economical developments during her a decade long reign. We can still learn a lot from her analyses.  Europe´s many crises - and the  exit of UK (Brexit) -  show that she was right in many points. The Thatcherite revolution,  the overhaul of the U.K. economy, is still a role model.

I enjoyed her precise, clear and economical style. The former UK prime minister possessed a strong analytical mind and an impressive understanding about economics. Many of her thoughts are still important. And she showed a strong will to fight for he believes which gave her the nickname  "Iron Lady", that she quoted sometimes in her biography.

The autobiography starts in the year 1979 when she took office. She defines her basic principles: "Orthodox finance, low levels of regulation and taxation, a minimal bureaucracy, strong defense & a willingness to stand up for British interests wherever and whenever threatened".

Her remarks focus on two main topics: The British economy & the  European Community. When she took Britain`s steering wheel she was confronted with a lot of economic challenges. UK`s economy was in a mess: Inflation was speeding up, unemployment was climbing, public sector pay was "out of control", public spending was rising as revenues fell, and the domestic problems were aggravated by rising oil prices which drove the world into a recession. Thatcher implemented a series of reforms to brake the vicious spiral and implemented tax cuts & deregulation. But she also had to curb the power of the trade unions which had a tradition to coerce economy & politics by many strikes.

A large part of the books describes her struggle against the European centralism. Over her whole regency she fought against a "standardized Europe"and insisted "that the institutions of the European Community are managed so that they increase the liberty of the individuals throughout the continent". She criticized the tendency in the community to be  "interventionist, protectionist, and ultimately federalist" and she condemned the protectionist policy to impede imports with high taxes and regulations. She criticized Jacques Delors, a French bureaucrat who was President of the European Commission from 1985 to 1995, and opposed his two "great dreams" for Europe  - an area without frontiers and monetary union. Instead she emphasize her credo that "competition between tax regimes is so far more healthy than the imposition of a single system. It forces governments to hold down government spending and taxation, and to limit the burden of regulations, and when they fail to do these things, it allows companies and taxpayers to move elsewhere".

                                                        Politics As An Elite Sport?

UK didn`t have an important role in the East-West relations but Thatcher was an analytical observer. She reminded that Ronald Reagan announced in 1983 his plan to mount a near-total defense against a massive sophisticated intercontinental ballistic missile attack, called "Star Wars". She seemed to admire him and to agree to most of his policy, but she also complained that the US President didn`t support her when Argentina invaded & occupied the British territory Falkland Islands which lead to the quick Falkland War. According to her Reagan ways too much influenced by his ignorant staff. I enjoyed her comments about other political leaders and her meetings with French president François Mitterrand, German chancellor Helmut Kohl and others. She wrote that French President Giscard d` Estaing had a mind-set of a technocrat and "saw politics as an élite sport to be carried on for the benefit of the people but not really with their participation".

The autobiography is another proof that Margaret Thatcher was no just a politician. The also was a brilliant analyst who understand economics. I enjoyed clear brisk style and learned a lot about history. UK still benefits from the Thatcherite revolution and we still can learn from her about the role of government, budget, monetary policy.

Saturday, January 6, 2018

Economics: Are The Old Really Eating The Young?

(Drivebycuriosity) - What was the stupidest headline of 2017? My candidate is a headline I found on Bloomberg: "The Old are eating the Young" (bloomberg). Holly Cow!

Satyajit Das, a regular Bloomberg commentator and the writer of the article, claims that the "old" are consuming too much and reducing so the living standard in the future - eating the "young". He´s wrong. Every machine, every factory, road, airport, university was created and financed by "the old". They saved a part of their incomes and invested it into the economy, into machines, factories, roads, airports, universities and more. By saving & investing they created the capital stock - factories, infrastructure,  technology & knowledge (human capital) - which is the source of the wealth we enjoy today. Without investments in the past, the savings of the "old",  their would be no incomes, no wealth, no economic growth. We all would be hunters and gatherers.

                                                           Useless Eaters?

Das laments that our society spends more money that it earns today and so is accumulating too much debts. These are loans on the future which have to be repaid by future generations, the "young". But these debts are mostly covered by the accumulated capital stock, including human capital, which generates economic growth. With an economic growth rate of annually 3% incomes double every 24 years (thanks to the compound interest effect). So in the average life time of the "young" they can expect to at least quadruple their income (GDP per capita) - a huge gain of wealth. Debts relative to wealth & income are shrinking and economic growth, initiated by the growing capital stock, is paying the debts. The prospective income & wealth gains are anticipated in the all-time highs on the stock markets, which reflect expected company earnings (discounted with an interest rate).

The graph above shows that we live in an accelerating world (accelerating). Almost everything is moving faster over the time. The acceleration process is caused by accumulation of capital (human capital plus physical capital) ergo savings & investments of the "old". Today we are experiencing a new industrial revolution. Rapid advances in software & Internet (including cloud computing), robotics, 3D printing, nanotechnology, genetic engineering and other technologies are all reducing costs, raising efficiency, lifting the productivity of the economy significantly and are creating new markets. The young will very much benefit from the acceleration process and the global wealth gains. They will have a higher standard of living as people today, the "old". It is just fair to participate the "old" on the coming wealth gains by taking some loans on the future.

The author also complains that the number of retirees is rising, a "growing burden on future generations" (sic)! His complaints and the headline "The Old are eating the Young" remind me of the Nazis who wanted to get rid of unwanted people: Homosexuals, communists, gypsies, Jews, artists, bohemians, nonconformists. The fascists called disabled people "useless eaters" ("unnütze Esser") and they eliminated them. The elimination program was called "euthanasia".

It seems that Bloomberg turned into a platform for economic illiteracy or worse.