Tuesday, September 30, 2008

Vox Populi

Yesterday, the Paulson bailout bill was voted down in the House of Representatives. Apparently, Henry Paulson had thought that dealing with Congress was like dealing with the partners at Goldman Sachs.

Apart from that, the bill got drowned in partisan rancor, largely because each side wanted to control the narrative of what went wrong.

But the larger reason was simply that the American people rose up and shouted: No bailout for Wall Street.

Given the choice between systemic financial collapse and the hides of Wall Street's masters, the populace decided that anything would be better than giving Wall Street a reprieve. In the eyes of the public, the financial community deserves humiliation. Nothing less.

Surely, Wall Street is not entirely at fault. Many people on the Street will tell you that the problem began with an act of Congress, the 1995 Community Reinvestment Act, that forced banks to write mortgages for people who did not quality for them. If they did not comply they could lose their charter. These were sub-prime mortgages. Lawyers and community organizers stoked the flames of the sub-prime fire.

It did not matter that much whether the mortgages were going to be paid off-- especially after the interest rates were adjusted-- because the banks were not holding on to them. They were selling them to Fannie Mae, which was on a sub-prime mortgage buying spree.

After Fannie Mae bought the mortgages, it repackaged them and magically transformed them into investment grade securities. Ratings agencies and investment bankers colluded, because, after all, if they said they were AAA then they must be AAA.

Efforts to regulate Fannie Mae were scuttled by the same Congressional leaders who are today blaming the debacle on free market capitalism.

So, Congress forced banks to write sub-prime mortgages. Wall Street simply gamed the system. But it did not just accumulate obscene profits; it also flaunted its success. Ironically, the nation's leading capitalists became the most visible beneficiaries of an anti-free market policy.

Of course, it was a Ponzi scheme and it did collapse, damaging the masters of the universe. It damaged their careers, their reputations, their status, and their portfolios.

Many did not have the means to deal with the damage. Those who had followed the counsel of therapists or the nostrums offered by the therapy culture were especially at a loss.

Therapy had told them to ignore what other people thought of them and to generate their own self-esteem. The result: these masters of the universe had no idea how they looked to people who were on the outside.

And then, one day, they looked up and noticed that the nation had risen up en masse to say that it would bear any burden, suffer any loss, even undermine the world financial system... if only it would cause the masters of Wall Street some serious pain.

What were the people saying? They were making an ethical point. Or better, a point about the absence of elementary ethics on Wall Street.

The problem was: it is one thing to amass a great fortune; quite another to earn it. And it is one thing to feel good about yourself; quite another to earn the respect of others.

You can tell when someone respects what he has earned, and, by extension, if he respects his labor he probably respects himself. Someone who has earned what he has spends it judiciously, does not flaunt it, does not waste it on trifles, and does not throw it in the face of those less fortunate.

If you have money you have not earned, if there is no correlation between what your work and your wealth, you will start to function like a dimwitted celebrity. You will believe that one day you will be found out as a fraud, and that someone will take it away from you. Thus, the compulsion to spend.

Profligate spending does not make you look good to those who have more modest means. They know that when someone who is wealthy flaunts it, he is building up his self-esteem at someone else's expense.

The masters of Wall Street knew how to make lots of money, but they lacked humility and benevolence.

They did not have enough humility to believe that participating in a market entails an ethical obligation, not to your raw self-interest, but to the orderly functioning of the markets. Your self-interest comes second.

Those who have missed this point are often humbled by the markets.

And these masters lacked benevolence, even as they gave fortunes to charity. Benevolence is not just generosity, and it goes beyond giving money to those who are neediest.

Benevolence involves being kind, considerate, and respectful to others. It is about how you talk to the dry cleaner or the waiter in the restaurant. However important you are on the Street you owe your fellow citizens gestures of respect. Most of them do not want your charity anyway.

Saturday, September 27, 2008

Recommended Reading

Reasonably enough, many people are preoccupied with the current financial crisis. Even more so since it is both vitally important and very, very difficult to understand.

I have previously linked (see outside links, at left) to some financial and investing sites, and, given the interest in these topics I have added a few more. These have provided me with valuable insights into what is going on, and I recommend them to your attention.

I have already linked to RealClearMarkets, a compendium of the best in financial journalism, and to Brett Steenbarger's Trader Feed, a site that looks at trading strategies through a psychological perspective. I have written several posts about TraderFeed.

I am also adding Corey Rosenbloom's excellent blog, Afraid-to-Trade, which provides a wealth of information the functioning of markets along with valuable trading advice.

Among the professional columnists I find John Dizard at the Financial times to be consistently brilliant.He has an exceptionally good feel for the workings of the markets.

Among the better known sites I have linked to MSN Moneycentral for two writer I have found to be consistently illuminating. Jim Jubak writes Jubak's Journal twice a week. At times he offers stock picks; at times he provides an analysis of the current economic situation. Also, MSN Moneycentral contains weekly commentaries by William Fleckenstein, called Contrarian Chronicles. Fleckenstein has a distinct approach to the markets and the financial system that is well worth your attention.

Finally, I added one site that is mostly for subscribers, but that has some material available to the public. It would be difficult to find a more qualified analyst of the current financial crisis than James Grant. His newsletter, Grant's Interest Rate Observer, is holy writ for many of those who are most active in the financial markets. It is always informative and valuable. I am happy to recommend it to your intention, if you do not know about it yet.

Friday, September 26, 2008

Know Thy Gut

The word did not come from Delphi, but Omaha. It did not come from Apollo, but from Warren Buffett.

In the midst of the current financial uncertainty Warren Buffett stepped forth to offer a vote of confidence in the system. He took a large stake in Goldman Sachs.

I will not comment on the wisdom of the investment but on the way Buffett made his decision. As he puts it, he trusted his gut and made a quick judgment.

When I first read this, I thought that it was surely bad advice. In my coaching practice-- a place where questions of decision-making are often crucial-- any time anyone tells me that he has decided to go with his gut, my own starts to feel queasy.

If he adds that he is simply following the counsel and example of Warren Buffett he does not calm my disquiet. I start thinking that he has misunderstood the oracle.

There is a Buffett mystique. The world's richest investor makes occasional pronouncements, just like Apollo's oracle at Delphi. And just as the god's message was communicated by a young woman sitting on a stool, so too Buffett's wisdom is offered to us by Becky Quick and Liz Claman.

What does it mean to follow your gut? Is it simply an affectation, a form of down-home folksiness that Buffett puts on to lure unsuspecting bankers into selling their assets as fire-sale prices? Or is there more to it?

How did Warren Buffett decide to take a major position in Goldman Sachs? (See link for the larger story.) One day he was sitting in his office in Omaha, feet on his desk, sipping Cherry Coke, nibbling on some nuts, when some guy called him and asked him if he wanted to invest in Goldman Sachs. A few conversations later Buffett owned $5 billion worth of preferred stock, paying 10%, along with a ton of warrants that could net him untold profits.

Not a bad deal for a country boy.

It was not the first time one of New York's major financial institutions had put in such a call. But, it was the first time there had been a deal.

As Buffett told the story, he did not enlist an army of lawyers and did not comb through the Goldman books: a chat between friends, a few meetings on the phone... and, bingo... a deal was struck.

His gut was saying yes, so he said yes.

Does this mean that the next time you are facing a difficult decision you should be reading the signs welling up from your digestive tract? It all depends on how you understand the oracle.

Buffett's is not just any old gut. It possesses a mind of its own, a mind that has been trained by decades of experience and considerable investing success, to say nothing of a few failures. Saying that Buffett can follow his gut does not mean that you and I should grant quite as much credence in our respective guts.

Any time you are thinking about making a decision-- saying investing in something-- you will have some anxiety over the risk. That much is normal. But, it might also happen that you feel anxious because there is something wrong with the investment, something that you do not fully understand. Sometimes your gut thinks faster than your mind. Sometimes it knows more than you do.

Knowing your gut means knowing which is which, whether your gut is telling you that you are taking a risk or that you should not take the risk.

All of this assumes that you know something about businesses. The phone call last week was not the first time Buffett had heard of Goldman Sachs. It was not his initiation into the world of financial services companies. He knew the principals of the company, had studied its annual report, and had examined its balance sheet. The result was that he could size up a deal for Goldman Sachs stock much quicker and with more accuracy than you or I could.

Had he already mulled over the possibility of investing in that company? Surely,he had. Was he already thinking of where and how he was going to invest in the newly-available financial assets? Surely, he had.

His decision was not an impulse buy. His quick judgment was more like what happens when suddenly you grasp something that you have been working on and working on. It's like a mental tipping point.

But why does he dumb in down by saying that he is just following his gut? Is it an affectation, or is something else involved.

Obviously, Buffett likes to present himself as an ordinary guy. He has a ribald sense of humor, and never touts his own brilliance. By giving credit to his gut, he ensures that success does not go to his head.

But how does he maintain the right attitude and the right frame of mind? Strangely enough, he does it through lifestyle, not through self-knowledge. And he does it through disciplined restraint, not just in his investing, but in the way he lives his life.

Buffett famously lives on Cherry Coke and cheeseburgers, not caviar and champagne. He has always lived in the same suburban house in Omaha, and has never aspired to a palatial triplex on Park Avenue or a mega-mansion in Greenwich. He buys his suits off the rack, not on Savile Row. And he still drives a Cadillac, not a Maybach.

He seems to have known that abrupt changes in status and lifestyle are difficult to handle. You cannot just bounce from one community and one lifestyle to another without putting in a great deal of work to readjust and acclimatize yourself. All the time that that takes is time you will not be using to work on your investments.

Besides, what is your mega-mansion really worth if it merely gives you a severe case of anomie.

Buffett's lifestyle keeps him from getting too full of himself. It is one reason why, as the Masters of the Universe quiver in fear as they watch their empires fall apart, this country boy is standing ready to pick up the juiciest pieces, at fire-sale prices.

So, if you want to invest like Warren Buffett, start with Cherry Cokes and cheeseburgers, trade in your Maybach for a Cadillac, and downsize your living quarters. Remember, the best time to do it is before you have to.

[Added note: If you have read this far I would recommend that you also check out Adam's remarks in the comments section.]

Wednesday, September 24, 2008

Notes on the Passing Strange

A good coach must know how to help a client to read a situation objectively. They he must help him to formulate a plan to deal with the situation, and to put it into action.

Whether the problem concerns personal or professional life, the structure is the same.

You may not be a CEO, but you ought to be the CEO of your own life. And rest assured, if you cannot manage your life, no one is going to want you to manage their company. But if you have no sense of how a CEO functions you will have great difficulty dealing with your everyday life.

Coaching is about leading people to take action. It is not about reading minds, you own or anyone else's. And it is not about gaining a richer fantasy life. If those are your goals, stick with psychotherapy.

An effective coach must first know how to analyze a real-world situation objectively. That means not overlaying it with fantasy, not turning it into a mythic narrative, and not becoming emotionally overwrought.

A coach learns this through experience. But, he or she also learns it by observing and analyzing situations that are in the public domain. Contrary to what therapy seems to imply, there is more to your existence than your private life.

You hone your objective analytic skills by working on those in which you have no direct personal involvement. If you cannot analyze a situation in which you do not have an immediate emotional stake, you will be at a loss when you need to deal with a person problem.

Take the election. Some people have so little interest in politics per se that they have decided to make a public spectacle of their emotional reaction to Sarah Palin.

Theirs is a good example of what not to do. One among many newspaper articles has described their reactions as running the gamut from incandescent anger to visceral hostility to a desire to "vomit with rage."

It is a sad day when political debate has been reduced to a my-paroxysm-is-bigger-than-yours contest. In my view the two clear winners of this contest are Sarah Bernhard and Naomi Wolf. Bernhard wins her award for a torrent of misogynist obscenities that are unfit to link. Wolf wins hers for giving Palin a starring role in her own paranoid delirium.

If this is the way they all deal with problems in their everyday lives, this can only mean that they have overdosed on therapy.

Now, take a step back and look at Bill Clinton's remarks about Palin on The View: "My view is... why... say anything bad about a person. Why don't we like them and celebrate them and be happy for her elevation to the ticket? And just say she was a good choice for him and we disagree with them."

Why, indeed. The answer is not that difficult. Where Bill Clinton speaks from a depth of political experience, the celebrities and attention-seekers have none. Where Bill Clinton would revel in the chance to debate policy, most celebrities do not have either the knowledge or the intelligence to debate anything at all.

I have already blogged about the notion that policy, not personality, will be decisive in the election. Some complementary views have been expressed by Jacob Weisberg and Christopher Hitchens, both on Slate.com.

Weisberg argues more persuasively than I did that winning candidates most often have a clearer message, call it a slogan, that sticks in people's minds and tells the world what they are going to do when in office.

And Hitchens offered a similar point, declaring that with John McCain having a very bad week Obama should be running away with the election. The reason he is not, Hitchens avers, is that he has nothing like a message, he has never stated clearly what his policies will be.

Weisberg and Hitchens explain this differently. Weisberg suggests that it is lack of executive experience. Hitchens believes that Obama does not really want to win the election, because he had never intended to be the candidate.

To know this you would have to be a mind reader, so I prefer Weisberg's explanation.

The fact is, McCain, Obama, and Biden are all legislators. And legislators spend their time trying to get noticed. They do not have to watch what they say because everyone knows that their words do not risk becoming policy.

Last week McCain tried to be decisive about the financial crisis, and he sounded like he was flailing. When you solution to a seized-up credit market is to fire the head of the SEC, it means that you do not understand what is going on. This does not inspire confidence in your leadership.

McCain's flailing undermined him, even while Obama was retreating into gauzy populist platitudes.

Of course, Joe Biden has been the champion of this season's gaffes. This also demonstrates a lack of executive experience. His best was the assertion that when the market crashed in 1929 FDR went on television to address the nation.

Of course, the only candidate who has remained on message is Sarah Palin. Perhaps because she is the only one who has exercised executive authority.

I will mention in passing that understanding leadership does not just matter to executives. Every individual has domains where he or she must exercise leadership. Perhaps it is in organizing a household, perhaps it is in choosing a course of study, perhaps it is in getting a group of friends together to throw a surprise party. And you must know that these are not the times for tirades and tantrums.

As for the policy/leadership question look at the debate surrounding the Paulson bailout plan.. Let us stipulate that I do not understand very much, if anything, about the financial system, and so will nor presume to offer an opinion about whether the plan is good, bad, or indifferent.

One thing I will say: it is clear, concise, and to the point. It requires exactly one and a half pages. It is an action plan. It represents an effort to do something, not everything.

That was, until it hit Congress. There it looks as though our Solons are engaged in public posturing. One day Chris Dodd says the plan is unacceptable, and then, the next morning Charles Schumer says that it will likely pass Congress.

The great thing is that Congress-- on a bipartisan basis-- has introduced layers of nuance and obscurity, thereby confusing the markets.

What they should do is heed the advice offered by Franklin Roosevelt in May, 1932-- that is, before his nomination, before the election, and before the invention of television. Speaking in Georgia FDR said this: "The country demands bold, persistent experimentation. It is common sense to take a method and try it. If it fails, admit it frankly, and try another. But, above all, try something."

Sunday, September 21, 2008

Out of Work

What happens when a Master of the Universe loses his job, retires to the living room couch, and tries to reflate his ego by becoming the master of all her surveys? How should his wife manage the situation?

That is the question asked of Lucy Kellaway in the Financial Times this week. It is a timely question, and it has elicited many comments. Here is the letter, in full:
"My husband has just lost his job on Wall Street. When he was in [sic] work he was impossible, living on the adrenaline of deal-making. Now he loafs around the house, sullen, full of self-pity, and criticizing everything the children or I do. I have spent years living with his over-sized ego, but now his ego has collapsed it is even worse. Is there anything I can do? Should I be sympathetic? Or shall I tell him to suck it up and be grateful we are not under any financial pressure? I am not going to divorce him, because of the children, but I'd like to know, do damaged Masters of the Universe ever recover?
Wife, 42"

One is tempted to say: these two sound like they deserve each other. And, recovery will surely require a more supportive spouse. As one reader said, he has been supporting her for these many years. It is time for her to return the favor.

One comment stood out for me. A woman who had found herself in the same situation offered that she had decided not to express her feelings. "If I had revealed how shocked and scared I was I would have sounded like that wife..." That is, like the letter-writer.

How does she sound? Not so much shocked and scared, but as exasperated and contemptuous. She seems mildly grateful that they have no financial problems, but she does not find him any better now than he was before.

When her husband was Master of the Universe, he was full of himself. To her he was "impossible." Now that he has been dethroned, she finds him insufferable.

Of course, she did marry him, so this cannot all be a surprise. And she does not want to divorce him.

So, she is stuck. He is stuck. They have attained a special kind of togetherness.

Imagine that the content of her letter is what she communicates to her husband. What is she telling him? That he is deficient no matter what he does? Why would that motivate him? In her eyes he is damned if he does and damned if he doesn't.

Anytime a person is put in a position that he loses no matter what he does, then he will normally sink further into the living room sofa. It is a classical definition of depression, as Martin Seligman described it in Learned Optimism.

Surely, he was acting like an arrogant Master of the Universe. And now he is acting like the proverbial bull in the china shop. But just as surely, this wife's own management skills need an extreme makeover.

When a man loses a job that was the focus of his existence, he has also lost his social network and the organization of his everyday life.

That is the time when he should be able to count on his wife and family, to restore his morale, to cheer him through adversity, and to respect the time he needs to recover.

This not what this wife is offering. She is contemptuous, disengaged, and critical. She imagines showering him with sympathy. For all we know she already looks at him with pity. How better to feed his own self-pity?

In response many readers wanted this wife to understand that marriage is a partnership. As one said, she must choose between manning the pumps or abandoning ship.

This means that her first duty should be to let him know that they are in it together, that she believes in him, and that she has confidence in his ability to move on.

Had she, perchance, been expressing pride in her husband's accomplishments when he was doing well, she would be having an easy time expressing confidence in his ability to overcome his current setback.

Instead, she labeled him impossible. Having shown contempt for his boisterous, frat-boy antics, she seems to have defined their relationship as adversarial. If that is true, that would explain why he has no interest in taking her into his confidence.

Given that the situation is dire, given that she knows that she has become part of the problem and not the solution, what advice can we offer her?

First, spare us all the sympathy and pity. It suggests that he is a victim and works to stifle positive motivation.

Second, spare him the criticism. His criticism of her and the children is probably a last ditch effort to retain some pride, but she should avoiding returning like for like. This creates drama, and nothing more. (I suspect that she has not refrained from showering him with criticism.)

Third, don't tell him what to do. It never works. His pride cannot absorb the blow that would be implied if his stay-at-home wife knew more about his business than he did.

Fourth, as one reader recommended, this means that if she is going to introduce suggestions, she must label them as his. Remember when you wanted to start your own business, manage our investments full time, go back to school, travel the world, run the marathon.

Fifth, be counter-intuitive. Thank him for showing an interest in the household and the children's schoolwork. Do not denounce him as obnoxious and incompetent. He is probably feeling like he failed at his job, so he will never accept that he is also failing as a father and husband.

Sixth, send him off to the gym. Hire him a trainer, sign him up for classes. As one reader wrote in, this will organize his time, get him out of the house, and improve his mood and energy. Since this does not concern his professional competence, she can be more assertive here. Best would be if she signs him up for some training sessions with a man who has completed Marine basic training.

Seventh, jump start their social. Few things organize a household more efficiently than an incipient dinner party. She might invite other men who are in similar straits. He is surely not the only person to have been fired recently. New opportunities most often arise from current contacts.

Eighth, lightly shame him. If she is friends with women whose husbands are in similar conditions she can report on how these other men are dealing with their down time.

Ninth, appeal to his sense of responsibility. She should tell him that she understands why he wants to chill out for a while, and that she has no objection. But instead of accusing him of hurting the children, she should mention that the children look up to him, adore him, and imitate his example. Does he want them to emulate the sullen soul who has commandeered the sofa and does nothing all day?

Wednesday, September 17, 2008

Panic on the Street

That thud you just heard was the sound of arrogance hitting the Street. Many of Wall Street's Masters of the Universe are being humbled.

In good times 80-to-1 leverage produces obscene profits. It also produces people who believe that they as good as their bonuses say they are. Trouble is: in bad times the same leverage will obliterate your firm in the blink of an eye.

Unfortunately, justice is imperfect. Some of those most responsible for the debacle are walking away with their fortunes intact. Many lesser lights in the financial firmament, people who did their jobs effectively and who trusted their superiors, have been wiped out.

Too many people thought that they had found a way to make enormous profits without putting in a commensurate amount of work. Like Icarus they flew too close to the sun and did not realize that their wings were made of wax.

Lest anyone looking at this from the outside start to gloat, the misfortune that is overtaking the financial services industry will eventually affect all of us.

As Wall Street goes, so go New York City and State. And that is just for starters.

Is everything coming apart? Probably not. Remember what Baron Rothschild said nearly two centuries ago: "Buy when there's blood in the street, even if the blood is yours."

Loss traumatizes, and a lot of people have lost a great deal, whether in their portfolios or their careers.

The standard psycho-therapeutic template does not seem to fit. Usually it promotes introspection as the best way to turn a trauma into a story. Mostly, this does not work. It will certainly not show you the way to deal with the disintegration of the financial system.

With my coaching clients I approach it differently.

I find that they first need to understand that trauma compromises judgment. What feels right after a trauma is usually the wrong course of action.

To overcome trauma you need someone whose judgment you trust. Hopefully you knew who you could call on before the blank hit the fan.

Keep in mind that trauma wants to maintain its influence. It will manipulate your emotions so that they will direct you toward doing exactly what you need to do in order to stay traumatized.

Trauma puts us in pain-avoidance mode. If something is truly painful we want to make sure it never happens again. Trauma will want us to believe that we need to withdraw from any and all situations that expose us to risk.

If we follow its lead, we give up, we freeze, we do nothing. Sometimes we even take the occasion to rummage through our psyches.

We might even engage in a form of therapy that encourages these bad tendencies. Like trauma, therapy wants you to lie on a couch and introspect while putting off major decisions.

The conclusion: when you have been traumatized, get out of your mind as quickly as you can. Take small steps to connect with people, professionally or personally.

Trauma threatens us. It makes us feel that we are alone and isolated, that the people we rely on to support and protect us have let us down.

It produces a rush of narcissism. It makes us feel that we can only rely on ourselves. Everyone else is a potential threat. We become thin-skinned and overly cautious, even withdrawn.

Trauma will tell you to puff up your self-esteem in defiance of the world that has betrayed you.

Trauma tells you that you are alone. It is lying to you. You cannot go it alone.

As everyone knows, when looking for a new job, the best resource is the contacts you have built up over the years.

Trauma also tells you that you are such a wonderful person, so full of goodness, that you did not deserve to lose what you lost. Some people imagine that since trauma is punishing them unjustly, the world owes them something.

Right away, without delay.

This makes them feel that they can and must trust their impaired judgment. They might begin to act impulsively. They think that the casino owes them. They become reckless. They double down on losing bets. They replicate the atmosphere that got Wall Street into the mess in the first place.

People act impulsively because they want to make back everything they lose... all at once.

Evidently, they only lose more.

Neither introspection nor self-puffery nor impulsive actions will cure the pain of trauma. What is left? How about... work.

If you seem to have lost everything, if the world is falling apart around you... you can get it back... but only through hard work.

Wouldn't it be nice if Wall Street went back to the motto on the old Smith Barney commercials: We make money the old-fashioned way; we earn it.

And this is true even for those of my clients who have worked very hard, and who are victims of someone else's errors.

Pondering the injustice of it all will not make it better.

I always advise my coaching clients to get back to work, whether this means starting immediately to look for a new job or putting extra time and effort into their personal financial plans.

When the world changes, you must change with it. Nostalgia is your enemy. Self-pity will not rectify your situation.

The danger every trauma victim faces is procrastination. Indulged, procrastination produces bad habits.

Wallow too long in the pain of your trauma and you will get good at introspecting or acting impulsively. Once such habits become ingrained, you will have far more difficulty breaking them.

If you don't know what to do, do something. Take a small step in the right direction. As the old saying goes: every journey begins with a single step.

Monday, September 15, 2008

There's Something About Sarah

So, the shock of Sarah Palin has thrown the Obama campaign off message. Instead of advancing its agenda the campaign has been wasting time trying to demean and diminish the GOP vice presidential candidate. Everyone seems to agree that this is a bad tactic.

Epitomizing this failure is the image of the pig with lipstick. Did Obama mean to slight Palin? Did he intend to insult her?

Take the facts as we know them. Sarah Palin's signature, her brand, even her totem... is the image of the hockey Mom as a pitbull with lipstick.

Any reference to an animal with lipstick in the course of this year's presidential campaign must refer to the Palin brand. Unless you believe that the Obama campaign is being run by a bunch of dimwits, they clearly felt the need to diminish the appeal of the brand, by putting a different image in people's minds. Every time Palin says "pitbull" the Obama campaign wants people to think: "pig." You might have noticed that pig and pit sound alike.

Some have insisted mightily that Obama's remark did not refer to Palin. Relying on a legalistic parsing of the text they have demonstrated that when Obama used the word "pig" the immediate referent was not Palin. But, so what. Given the larger context, given the totemic force of the image, everyone-- and that means everyone-- understood what he meant.

You don't have to be a mind reader to know it. Here's the way you can tell. In normal conversation when you make a slip that might be understood to be offensive, you apologize. If you do not apologize, then the correct inference is that you meant it, that it was intentional.

Last week the issue was not the Obama agenda for change; the issue was the Obama campaign. Obama had claimed that he had demonstrated executive ability by running a flawless campaign. He even managed to say that his campaign was bigger than the city of Wasilla, thereby seeming even more disrespectful for failing to acknowledge that Palin is the sitting governor of Alaska.

The media has chimed in with a barrage of attacks on Palin. The problem with these has been simple: if Obama is really a strong leader why does he need so many media surrogates defending him. The extent of the media attacks on Palin signifies Obama's weakness.

In this regard the media's top gun was Charlie Gibson. Place Gibson's Palin interview in a larger context. Remember that during the Democratic candidate debates Gibson once asked Obama a question that flummoxed him. He asked why Obama was saying the increased capital gains tax rates would increase government when everyone knew that just the opposite was the case. The higher the cap gains rates, the lower the revenue generated.

Obama did not know how to answer. He had never considered this possibility. No one is perfect.

The more important point is that, for his pains, Charlie Gibson was viciously attacked by his fellow media mavens. People who have tossed out their journalistic integrity to promote Obama did not want to see anything like that ever happen again. So they heaped opprobrium on Charlie Gibson as a warning to him and to anyone else who might dare ask Obama a difficult question.

Gibson certainly learned his lesson. The next time he interviewed Obama, one-on-one, his questions were therapy culture softballs: "How does it feel to win?" "How does it feel to break to break a glass ceiling?" "How does your family feel about your winning?"

Obviously, these questions are insulting. Gibson was treating the candidate as though he would melt away if he ever had to address a substantive issue. Clearly, Charlie Gibson had been brought back onto the reservation.

He had a better chance to demonstrate it when he interviewed Sarah Palin last week. Of course, he was looking for a gotcha moment. He was looking to diminish the new phenom, especially for her shaky command of foreign policy. A report this morning also suggested that ABC set up camera angles to make her look smaller in relation to him. The New York Times declared that his attitude was "supercilious."

The ultimate curve ball was the question about the Bush doctrine. Clearly, Palin was not sure what it was, so Gibson could look down his nose at her-- literally-- and explain it.

She did not look good. The problem is: Gibson got it wrong himself. The first person to use the phrase, Charles Krauthammer, wrote an article explaining that there were at least three different interpretations of the Bush doctrine.

Unfortunately, the news did not reach Obama supporters. They spent three days railing about Palin's inexperience, not yet having realized that experience is not a great issue for their own candidate.

While Obama's supporters were throwing up a fog of drama to obscure the McCain message, they were obscuring their own.

Watch the entirety of the Palin interview and you will see that outside of foreign policy she was completely on message and mostly in control of the material. She articulated the campaign agenda clearly and precisely: lower taxes, more drilling, controlled spending, earmark reform, victory in Iraq.

As I said in an earlier post, called Forever Nuance, voters are more likely to prefer a clear policy agenda over one that is more complicated and more nuanced. By this hypothesis clarity matters more than right or wrong.

I will mention in passing that this idea is a variant on what philosophers call Occam's razor. The fourteenth century theologian, William of Occam, posited that if you have two possible explanations for a phenomenon and one is simple while the other is more complex, the chances are that the more simple one is closer to the truth.

Wednesday, September 10, 2008

A Woman in Full

How to explain Sarah Palin? How did this Alaskan huntress throw the presidential race out of kilter with a half-hour speech?

Prior to "the speech" Sarah Palin had been the subject of lurid rumors. The media had placed her at the center of an intense family drama. (I wrote about it last week in a post entitled: Drama on the Right.) Her speech did not make it all go away, but it did inoculate her against further attempts to obscure her record and confuse the Republican campaign.

Why so? Because she defied stereotyping and mythmaking. Is she the ultimate feminist, a post-feminist icon, or simply antediluvian?

Or else, why not say that Sarah Palin reached out to the American people, cut through the fog of media images, looked people in the eye, and became everyone's good friend.

The public liked Sarah Palin. They saw her as their friend and neighbor, a familiar presence they could trust. And this made it more difficult to criticize her. People do not take kindly to direct attacks on their friends.

Now the attacks are tinged with desperation. She has been called a witch and a dominatrix-- to each his own fantasy-- and even Obama, who knows better, seemed to compare her to a porcine being.

The attacks also did not work because, as Democratic consultant and columnist Kirsten Powers noted, they were disrespectful.Calling the governor of a state a mayor is demeaning.

Sarah Palin also resonated because she seemed to be something new and different on the American political scene. I would call her: a woman in full.

Up there on the stage, in the floodlights, surrounded by cheering throngs, she was not a persona. We were not watching an image crafted for the political stage. Here was someone for whom the ridiculous word personhood seemed largely inadequate.

She was who she was. The word that seemed to fit her best, as many noted, was: "real."

Sarah Palin is a woman in full in the sense that she has had a full life as a woman. Wife, mother, huntress, marathon runner, mayor, governor... she was all that, and she still had sex appeal.

"Sexy" is not the term people associate with very many female politicians. Some do not seem to have it; some hide it well. But few women with important jobs seem to exude sexual self-confidence, a sex appeal that is not contrived.

It's easy to understand why this should be so. People assume that feminine sex appeal is antithetical to the exercise of power. Women often believe that they will not be able to lead if they do not emulate male leadership styles. They fear that a hint of cleavage, a flash of leg, will detract from their professional demeanor.

To some extent they are probably right. In another, they are reinforcing a stereotype.

Sarah Palin broke the stereotype by being a successful and popular governor without being an ersatz man. She understood that you cannot show leadership by pretending to be someone you're not.

How many women would be more involved in their careers, and would compete for advancement more seriously if they felt that they could do it without leaving their femininity outside of the board room?

Leadership is about getting other people to do things. If you bark orders and no one follows them, you are not a leader. If you wink and smile and people do their jobs more effectively, then you are a leader.

For now Sarah Palin also seems to have redefined toughness.

It is not about macho bravado or empty assertions of self or constant criticizing and complaining. All of these make you look defensive and weak.

Toughness involves being good to your word and holding your ground. It involves saying what you are going to do and then doing it.

But toughness also involves confidence, poise, and composure. When you walk on a stage in front of tens of millions of people and deliver a speech, that as former San Francisco mayor Willie Brown put it, makes you sound like you are chatting with the meter maid, you are tough.

And her speech was political hardball. Palin might have used a soft touch, but she was certainly going for the jugular... with charm.

Where does the confidence come from? Surely not from an extreme makeover. I would assume that Sarah Palin shows confidence because she has accomplished some things as mayor and governor. Hers is not the empty self-puffery of the self-esteem movement.

In reaction, many pundits have been trying to ignore her record and her achievements. They have been trying to denigrate her as a woman.

Palin has been accused of not being a good mother, of not supervising her pregnant teen-aged daughter, and of neglecting her special need baby.

But why, pray tell, have they all assumed that only a child's mother can raise him or her. Didn't they read: "It Takes a Village" where the author famously argued that members of extended families and neighbors have always cooperated in raising children?

Some critics have argued that there is something essential to the bond a child forms with a mother. They have said that a mother's place cannot be duplicated or imitated by a father. Point taken. But have they forgotten that other women can and always have filled in for working mothers, and even for stay-at-home mothers?

And then there is the argument that if Sarah Palin takes a larger job than governor of Alaska, her family will suffer. As a friend once told me, you cannot be both a great mother and a great professional. Of course, it is equally impossible to be a great father and a great professional.

But who said that you have to be great at everything you do. Perhaps we make nurturance more decisive than it really is. A famous psychoanalyst once said that when it came to parenting, "good enough" was fine.

Even if parents do not spend as much time as they would like with their children, even if they cannot put as much energy as they would wish into raising them, this does not mean that their choice is merely a loss for their children.

Parents who work harder often succeed more than those who do not. And the advantages that accrue to a family from parental success in the outside world surely offset the disadvantages of not having Dad around to play catch after school.

Sunday, September 7, 2008

Pacman and Deion

If HBO had thought that a reality show about the Dallas Cowboys training camp would be full of drama, they must have been disappointed. This motley crew of outsized personalities and recovering criminals spent their training camp ... working hard, being coached, and creating team spirit. No drama there.

It was not just HBO that had their hopes dashed. Sportswriters had been drooling in anticipation at the chance that Terrell Owens (aka TO)would says something, anything, to cause trouble in Cowboyland. After all, TO had been benched by the Eagles for being a disruptive influence. How could anyone believe that Jerry Jones had magically transformed him into the ultimate team player?

Even if TO was likely to let the sportswriters down, they still held out hope for the new Cowboy cornerback-- Adam Jones, aka Pacman.

Where TO was merely benched by a team, Pacman has been suspended from football for a year, by the Commissioner, Roger Goodell. The reason: an incident in a Law Vegas strip club. I will spare you the details, which involved throwing around cash and bullets. Eventually, Pacman copped a plea to a misdemeanor and did some community service.

As if that was not enough, the Cowboys had also signed a great middle guard named Tank Johnson. Tank had one-upped even Pacman: he had done time on a weapons charge.

Like I say, sportswriters could barely contain their anticipation.

The rest of us can learn a few things from this. If you are in business and are responsible for managing difficult characters, you could do worse than to emulate Jerry Jones.

Cowboy owner Jerry Jones appeared often in "Hard Knocks," mostly saying that he could be anywhere, doing anything with his time. He had chosen to be at training camp. He chose to be there with the players because he loved the game and loved the players.

It matters that the owner is there, on the field, at practice and at scrimmages, in his shorts and golf shirt. It shows that he cares about his players, and not just as they performed for him.

Jones was something of a contrarian investor in talent. He did not merely pick up players that no one wanted; he signed players that no one knew how to deal with.

How did he deal with them? Simply. He showed them respect, he treated them like men, and he cared about their lives beyond football. If a player had a problem with a coach-- as TO did with Bill Parcells-- Jerry Jones had lunch with him and talked it out.

Let's not forget: the Cowboys have a large and efficient player personnel department to keep track of the players and to offer them guidance.

Supposedly, Pacman was going to be a challenge and a half. To manage their potentially great cornerback the team enlisted the help of Michael Irvin and Deion Sanders. Irvin himself knew well how to get into trouble and how to get out of it. Deion Sanders, a former Cowboy and resident of Dallas, was probably the greatest cornerback to play the game. Besides, he was an idol and a hero to Pacman Jones.

Deion especially had decided to mentor Pacman. He welcomed him into the Sanders family, invited him to picnics, and showed him what a good family life was like and how it felt to spend time with friends.

It's one thing to tell someone to stay out of strip clubs and to avoid the wrong people. It is quite another to show him a viable alternative. As Aristotle said, it is not enough to repress bad habits; you need to replace bad habits with good ones.

For me, one exchange epitomized the greatness of Deion's mentoring. In the last episode of "Hard Knocks" we saw Deion and Pacman out fishing. This is the kind of scene that brings out the cynical side of sportswriters.

The scene had been filmed a couple of days after the NFL Commissioner had reinstated Pacman for the entire season. Obviously, it was very good news.

So Pacman and Deion were discussing the reinstatement, when Deion turned to the younger man and asked him whether he had called the Commissioner to thank him.

Pacman replied that he had sent a letter.

Deion suggested that that was not quite enough. The situation required a phone call.

(You would have thought you were listening to an etiquette coach!)

Anyway, Pacman was not persuaded.

So Deion changed his tactics and offered a hypothetical: Which would you rather receive, he said, a letter from Oprah or a phone call from Oprah.

Pacam got the point.

Call it a dialogue between youth and experience, between the troubled 24 year-old and the forty-something All Star. Obviously, Deion understood something that young people simply do not think about: the way that small gestures can improve relationships and build character.

A phone call is more personal and more gracious than a letter. It is certainly better than a text message. A phone call requires you to stand up like a man. Roger Goodell had given Pacman a great opportunity; Pacman owed him that much respect.

More than that, Deion knew how to persuade Pacman to do it. He taught him to put himself in someone else's shoes. How do you feel when someone important sends you a letter? How do you feel when that same person calls you on the phone?

The least we can say is that this approach does not lend itself to drama. Thankfully, for everyone involved.

Friday, September 5, 2008

Will the Real Creationist Please Stand Up

The debate continues. Was God an intelligent designer or did the universe fall into place at random? Should we teach creationism or Darwin or both? Must we choose between science and superstition, between enlightened reason or mindless faith?

Of course, most people know that God and science are not contradictory. While you can always find a backwoods preacher who will tell you that the world was literally created in seven days and that Lot's wife was literally turned into salt, no serious person would say that the Bible should be taken as scientific fact.

Does this mean that we should scrap God and become atheists? Or, as the politically correct crowd might say: Is God a social construct?

Before rushing off to embrace atheism-- the latest intellectual fad-- consider a line of reasoning offered by Jacques Lacan a few decades ago. It may not have been original, but it is compelling.

Four hundred or so years ago Johannes Kepler worked out the law that determined planetary orbits. Of course, he did not think that he had proven that God did not exist. Quite the contrary, he thought that he had gained an insight into God's mind.

If the planets were-- obviously-- obeying this law before Kepler discovered it, where had the law been before that time. If it is reasonable to think that the law existed before any humans wrote it down, is it also reasonable to say that a mind was thinking it? If so, what kind of mind? Clearly, it was not a human mind.

The same can be said for any scientific laws, including the laws of evolution. Thus, many have stated that there is no inherent contradiction between physical laws and metaphysical minds. But metaphysics is not the same as physics, and has no real place in a science course.

That is not the issue. Lurking in the wings of this debate is the following problem. Do the enlightened masses who have brandished the truths of science to smite the demons of creationism and intelligent design really believe in science? Would they throw out one of their politically correct prejudices if science proved it was not true.

Several years ago Harvard president Lawrence Summers made a few remarks about the biology of gender differences, some of which derive from Darwin.

As you recall, he was instantly attacked for having committed blasphemy. He was eventually run out of office on a rail. We all remember the furor. Did it sound like a rational, enlightened debate or a witch hunt?

Many of those who are fighting to exclude creationism from 10th grade biology-- position I would support-- believe that gender is a social construct, that sexual roles are a social construct, and that fatherhood and motherhood are socially constructed. Some of them also believe that all science, from physics to chemistry to geology, is one large social construct.

For social construct, read: creation. They really believe that the socio-sexual whirl was created by design. They believe that gender roles were designed intentionally by dominant males in order to serve the interests of an entrenched patriarchy. Some believe that the purpose was to repress human libido and oppress women.

This is a creationist view. Instead of God creating human beings, the politically correct crowd proposes that a trans-historical patriarchy did the dirty deed. They object to this design because they consider it to be unintelligent.

This creationist view has previously led to a re-creationist vision. If a criminal conspiracy created human nature to serve someone's will-to-power, then it should be possible to re-create human nature, the better to liberate the impulses that patriarchy has oppressed. Manifestations of this new human being are the Nietzschean Superman and the New Socialist Man.

You cannot hold fast to these beliefs and tout the virtues of Darwin. Among the better known aspects of Darwin's theory is the notion that sexual selection is based on a reproductive calculus. People are hard-wired to seek out sexual partners who will aid in the successful reproduction of the species.

This theory-- call it a scientific fact-- does not jibe with the notion that gender roles are social constructs or social creations. Nor does it jibe with Freud's Oedipal theory that everyone's true desire is to copulate with his or her mother. Nor does it jibe with the notion that sex is fundamentally about obtaining pleasure and that it does not much matter how, when, where, and with whom you go about it.

If you believe that the species is hard-wired to reproduce itself, then any theory that tries to explain sex by saying that human beings are merely seeking pleasure.. is unscientific. Call it neo-creationist dogma, if you like.

Thursday, September 4, 2008

Just in Case...

Obviously enough, many readers of this and other blogs do not read through the comments. For that reason I would like to direct your attention to Adam's comment on my post: "Learning to Win." Adam offers some excellent advice on the corollary skill... learning to lose. It is invaluable.

Tuesday, September 2, 2008

Drama on the Right

Having sworn up and down that I would have nothing to say about Sarah Palin, I am about to eat my words. In response to several emails and phone calls encouraging me to say something, anything about this all-too-interesting personality and her pregnant teenage daughter, I politely demurred.

After all, Sarah Palin's private life, her personal choices, is none of anyone's business. I am certainly not going to explain to a woman-- or anyone else-- how to be a mother.

Nor do I want to get involved in the culture wars aspect of this situation. Not because I am not amused by it. After all, some liberal feminists are horrified because Sarah Palin is pro-life, while others, like Camille Paglia, are, at the least, intrigued.

Sarah Palin would not only be the first woman to hold the office of vice president, she would also be the first babe. Who but Camille would notice that.

On the right, many moral crusaders are lining up to say that they are happy Bristol Palin will be having her baby, while others, like Bill Bennett, are horrified at the notion of a high school student having a child.

To the Democrats McCain's choice looks like a golden opportunity. And many Republicans agree. However much the base has been fired up, more sober Republicans have been saying that their party should simply not play identity politics. They are like amateurs competing against professionals.

Since the Palin selection the polls have been running against McCain. This suggests that the general public has not been quite so enamored of this choice. And I suspect that the markets were not very happy about it either. As the polls started coming out today, the stock market began to fall. Eventually it gave up all of its early gains, and more.

Anyway, before the Democratic convention I offered some advice about how we could judge what was happening. It is contained in my post: Forever Nuance.

Why not apply the same predicate to the Republican extravaganza. My hypothesis was simple and unoriginal: politics is about policy-- the word is a give-away-- and the candidate who articulates the clearest policy proposals is most likely to win the election.

For all the hubbub about image and drama, it all comes down to policy. That was my point. I am sticking to it.

I had thought that Obama would be done in by excessive nuance. I should have added that if policy is drowned out by drama, whether during the convention or during the campaign, the candidate's chances will diminish.

How did I think Obama did at his convention? Not very well. The speech to end all speeches did not produce much movement in the polls. First, it did not articulate any clear policies; second, its message was muffled by the tumult of the event itself.

Now, here come the Republicans. they do not have to worry about John McCain's nuance or charisma. Now, however, they have to deal with the outsized personality and unconventional life of Sarah Palin.


The more the public debate concerns the Palin family drama, the less it will focus on public policy. It might just be the case that the nation is ready for an African-American president. And it might be the case that we are ready for a vice president who is a babe.

The trouble is: do we want another administration generating headlines that are worthy of the National Enquirer. We hire presidents and vice presidents to do the people's business, not to regale us with tales of their private dramas.

For Republicans there is still hope. Bill Clinton showed all politicians that it is possible to overcome nasty Enquire headlines and refocus a campaign on policy. It remains to be seen whether John McCain can repeat the feat.