Is the Stock Market Rigged?

It has already been promoted on 60 Minutes, but even without the boost Michael Lewis’s new book, Flash Boys: A Wall Street Revolt is guaranteed to be a best seller.

More importantly, it might very well make history.

Lewis is telling us that the stock market, the ultimate free market, is being rigged. He will show how an intrepid group of young people has been trying to restore fairness to the market.

Naturally, the story about how big banks and brokerages are using high-frequency trading to skim a miniscule profit off of every trade has attracted the attention of ambitious politicians.

It is almost inevitable that they will draw up new regulations and portray themselves as the champions of fairness. Unfortunately, unscrupulous traders seem always to be able to find a flaw in the regulations. They will exploit the flaw until they are caught.

Lewis does not tell how government bureaucrats cracked down on market skimming. He shows how people like Brad Katsuyama, Ronan Ryan and Rob Park are changing the system by introducing a trading platform that can eliminate the skim.

More importantly, for my purposes, Lewis emphasizes that markets can only work fairly when their participants behave ethically.

In the excerpt that the New York Times Magazine has published, Lewis emphasizes that when a young Canadian trader named Brad Katsuyama moved to Wall Street he was struck by how offensive the people were.

You may think, perhaps correctly, that the Occupy Wall Street crowd was especially offensive. You may believe that young radicals are extremely offensive. But, if you believe that college students are missing a couple of ethical behavior genes, you must accept that many of Wall Street’s high frequency traders are similarly deprived.

A free market is not a free-for-all. It is not a dog-eat-dog jungle where everyone is trying to rip off or to screw everyone else. Market participants are morally obligated to maintain market fairness. If they reduce it to the lowest common moral denominator—their personal greed-- it will fail.

Lewis explains what Katsuyama found when he moved from Canada to lower Manhattan in 2007:

It was his first immersive course in the American way of life, and he was instantly struck by how different it was from the Canadian version. “Everything was to excess,” he says. “I met more offensive people in a year than I had in my entire life. People lived beyond their means, and the way they did it was by going into debt. That’s what shocked me the most. Debt was a foreign concept in Canada. Debt was evil.”

Katsuyama should have known, and he certainly should know by now, that debt, public and private, is as American as cherry pie. If Americans were living beyond their means in 2007, afloat on a sea of debt, they have, of late, outdone themselves.

In fact, there’s so much debt that no one knows how to solve the problem except by creating more debt.

Katsuyama was working for the Royal Bank of Canada, a place where the culture was defined by, God help us, niceness. The concept defined the way RBC did business:

There was even an expression used to describe the culture: “RBC nice.” Although Katsuyama found the expression embarrassingly Canadian, he, too, was RBC nice. The best way to manage people, he thought, was to persuade them that you were good for their careers. He further believed that the only way to get people to believe that you were good for their careers was actually to be good for their careers.

Again, business involves ethics. It involves doing the best for clients. And you cannot be doing the best for your clients while you are messing with their trades and skimming money off the top to enrich yourself.

One might believe that real men do not want to be nice. They prefer to cultivate their capacity for ruthlessness. Don't nice guys finish second?

And yet, the concept of the gentleman derives from the concept of gentility. Not because it is trying to weaken men, but because no one becomes an adult without playing the game according to the rules. Niceness is about good sportsmanship, and good sportsmanship means respecting the game. If the game is not fair, then no one will respect the results.

The same applies to democratic nations. If everyone believes that both parties are playing fair, the results of elections, even the results of administrative fiat will be respect. If, however, everyone believes that politicians are in it for themselves, or worse, that they are imposing their ideology on an unwilling electorate, democracy will fail.

It is not easy to describe high-frequency trading. In truth, next to no one understands it. That’s why its adepts have been getting away with doing what they are doing… screwing not only the individual investor but many institutional clients.

Lewis makes an excellent effort to describe how the system works:

Broadly speaking, it appeared as if there were three activities that led to a vast amount of grotesquely unfair trading. The first they called electronic front-running — seeing an investor trying to do something in one place and racing ahead of him to the next (what had happened to Katsuyama when he traded at RBC). The second they called rebate arbitrage — using the new complexity to game the seizing of whatever legal kickbacks, called rebates within the industry, the exchange offered without actually providing the liquidity that the rebate was presumably meant to entice. The third, and probably by far the most widespread, they called slow-market arbitrage. This occurred when a high-frequency trader was able to see the price of a stock change on one exchange and pick off orders sitting on other exchanges before those exchanges were able to react. This happened all day, every day, and very likely generated more billions of dollars a year than the other strategies combined.

Since Lewis counts among those who explained the financial crisis of 2008, he is well qualified to explain the connection between the two kinds of market corruption:

The same system that once gave us subprime-mortgage collateralized debt obligations no investor could possibly truly understand now gave us stock-market trades involving fractions of a penny that occurred at unsafe speeds using order types that no investor could possibly truly understand. 

Dangerous Psychiatric Medication

The science of psychiatric medication is still unsettled.

A recent study has shown that anti-anxiety drugs and sleeping pills are potentially very dangerous.

The New York Times reports:

A large study has linked several common anti-anxiety drugs and sleeping pills to an increased risk of death, although it’s not certain the drugs were the cause.

For more than seven years, researchers followed 34,727 people who filled prescriptions for anti-anxiety medications like Valium and Xanax, or sleep aids like Ambien, Sonata and Lunesta, comparing them with 69,418 controls who did not.

After adjusting for a wide variety of factors, the researchers found that people who took the drugs had more than double the risk of death. The study appears online in BMJ.

It would be churlish to point out that the risk of death, for any human being is already 100%, and thus, that author is talking about the risk of premature death.  Clearly, these drugs are dangerous and are likely to shorten  your lifespan.

Of course, the researchers tried to control for all other possible causes of premature death:

The researchers tried to account for the use of other prescribed drugs, age, smoking, alcohol use, socioeconomic status, and other health and behavioral characteristics. Most important, the investigators also controlled for sleep disorders, anxiety disorders and other psychiatric illnesses, all of which are risk factors for mortality.

The Times continues:

The lead author, Dr. Scott Weich, a professor of psychiatry at the University of Warwick, said that while he and his colleagues were careful to account for as many potential risks as possible, they were not able to control for the severity of the illnesses suffered by the study participants.

Still, he said, the research “adds to an accumulating body of evidence that these drugs are dangerous.” He added: “I prescribe these drugs, and they are difficult to come off. The less time you spend on them the better.”

Some of these drugs are addictive. All of them appear to be dangerous. Many of them have been in use for a very long time.

We often hear about the wonders that psychiatric medication can offer. We rarely hear about the risks.

As the brave new world of psychopharmacology dawns we should be aware that we do not know very much about the potential dangers from these miracle drugs.

Malcolm Gladwell on David Koresh and the Siege at Waco

As one would expect, Malcolm Gladwell does an excellent job of telling the inside story of the 1993 FBI siege of the Branch Davidian compound in Waco, Texas.

He focuses on cult leader David Koresh himself and the way the FBI handled the negotiations. As you know, the negotiations failed and the compound was incinerated, killing scores of people, among them many children.

Given his limited focus one understands why Gladwell ignores the larger context of the Waco holocaust, but still, one is struck by what is missing from the story.

It feels like the dog that didn’t bark.

If you had not known it beforehand, you would not know, from reading the article, who was running the American executive branch at the time. The name of Bill Clinton does not appear anywhere in the story. Neither does that of the attorney general who was ostensibly in charge: Janet Reno. Nor does Gladwell mention the name of the deputy White House counsel at the time, one Vince Foster, former law partner of Hillary Clinton. You recall that Foster killed himself a few months after Waco.

After all, the siege dragged out for weeks. To imagine that top administration officials were not involved is to blind oneself to the obvious.

And yet, Gladwell may be more subtle than we imagine. He convincingly knocks down one of the pillars of the standard media narrative.

  

From the beginning the media has placed the blame squarely on David Koresh. It painted him as a fanatic who wanted to die in a blaze of glory.

Gladwell points out that that was not the case. And he adds that the FBI negotiators manifested a high level of incompetence.

Undoubtedly, he does not have the true story about the inner workings of the Clinton administration. Yet, in omitting the larger context he has pointed us to the higher-ups who were surely pulling the strings.

If the American press had been more diligent and less corrupt the events at Waco would have been investigated. They might even have become a signature event in the Clinton administration. A full investigation might even have shown that future presidential candidate Hillary Clinton might have been personally involved.

Let’s give Gladwell the benefit of the doubt and say that, by emphasizing how badly the FBI handled the situation, he is inviting us to speculate about who was in charge of the agencies that were handling the crisis.

How to Connect While Disagreeing

The idea comes down to us from Maria Popova at BrainPickings. She found it in Daniel Dennett’s Intuition Pumps and Other Tools for Thinking. Dennett himself found it in the writings of social psychologist Anatol Rapoport.

What is it?

It’s a formula for engaging in productive debate and discussion. Or else, as Dennett and Popova describe it, it’s a formula for criticizing someone else’s work, constructively. By that I assume that they mean, without it costing you a friend.

Dennett summarizes Rapoport’s formula for “a successful critical commentary:”

1.      You should attempt to re-express your target’s position so clearly, vividly, and fairly that your target says, “Thanks, I wish I’d thought of putting it that way.

2.    You should list any points of agreement (especially if they are not matters of general or widespread agreement).

3.    You should mention anything you have learned from your target.

4.    Only then are you permitted to say so much as a word of rebuttal or criticism.

Evidently, this provides a useful antidote to the habit of demonizing one’s opponents and declaring that one holds a monopoly on the truth.

Surely, it was what Chief Justice John Roberts had it mind when he told a law school audience that those who do best at arguing their cases before the Supreme Court recognize the possible validity of their opponents’ arguments. After all, Roberts noted, if one side is all right and the other is all wrong, the case would never have gotten before the court anyway.

It reminds me of the structure of the Summa Theologica of Thomas Aquinas.

Evidently, you are not going to persuade anyone of anything if you start by dismissing everything he says and disdaining his character. Yet, the purpose of the exercise proposed by Popova, Dennett and Rapoport is not so much to persuade as to connect.

In the best of circumstances you can connect with an individual without agreeing on every point of politics or theory. Doing so requires a mutual display of respect.

Of course, there’s a kicker. Following the guidelines requires work. Most people believe it feels more natural to ignore whatever is salient in someone else’s point of view. Otherwise, they would have to feel less of a thrill tearing into it.

People prefer to express their feelings and demand complete acquiescence. After all, you are the ultimate authority on what you feel.

In the meantime, those who wish to avoid the hard work of finding something valuable in an opposing point of view often compensate for their failing by making a conspicuous show of empathy.

Instead of granting credence to their opponents’ ideas they say that they understand how he feels.

If it sounds dismissive and rude, that’s because, in addition to being lazy, it is.

What Has Atheism Done for You Lately?

As atheism has been gaining adherents and prestige pious believers have been dismissed, disparaged and discounted. Among the cognoscenti the long knives have been out for religion.

Of course, it isn’t all that clear what it means to adhere to atheism. Perhaps you can believe fervently in nothing, but, dare I say, it isn’t self-evident.

You can, for example, believe in Reason, but that feels like recycled idolatry. Isn’t Reason the Greek god Apollo?

Today’s atheists would not shy away from this form of paganism. To their minds, anything is better than God, especially the Judeo-Christian deity.

The late Christopher Hitchens famously declared that religion poisons everything, but for someone of surpassing intelligence, the statement is an embarrassment. It conflates all religions and it’s an overly broad generalization. To refute it you need but show that religion is good for something. You might even demonstrate that the irreligious among us are handing out their own mental poison.

If we ask what religion has done for anyone lately, Byron Johnson and Maria Pagano respond that, in the world of drug and alcohol abuse, it offers distinct and measurable benefits.

Their forthcoming article in the Alcohol Treatment Quarterly will  show that young people who believe in God and religion are less likely to become alcoholics or drug addicts. If they are already addicted, religion will facilitate recovery.

They explain:

Young people who regularly attend religious services and describe themselves as religious are less likely to experiment with alcohol and drugs, a growing body of research shows. Why? It could be religious instruction, support from congregations, or conviction that using alcohol and drugs violates one's religious beliefs.

Moreover, frequent involvement in spiritual activities seems to help in the treatment of those who do abuse alcohol and drugs. That's the conclusion of many reports, including our longitudinal study of 195 juvenile offenders that will be released in May in Alcohol Treatment Quarterly.

What psychological trait draws a young person to alcohol and drugs? It is anomie:

The problem is more fundamental than missing church on Sunday. Young people in our study of juvenile offenders seem to lack purpose and are overwhelmed by feelings of not fitting in.

The psychosocial distress of not belonging to a group and having no purpose in life, no direction, no hope for the future… leads children to self-medicate.

Belonging to a religion seems to be an effective solution to anomie.

Led by psychiatry our culture sees the human brain as a biochemical soup that needs psychopharmacological spicing up. It sees biochemistry as the best way to solve all psychological problems.

The debate is as old as Alcoholics Anonymous. Many psychiatrists have happily directed their patients to AA, but others have been offended by the fact that it relies on God or a higher power. Some psychiatrists have been especially upset because AA meetings are free.

Given their druthers, most psychiatrists believe in a biochemical solution to the problem of addiction.

Obviously, AA does not work for everyone. It works best for those who keep with the program. But, the same is true of any treatment. If you do not take you antibiotics and do not get better, no one will say that treatment is ineffective.

Worse yet, from the standpoint of those who believe in science, AA was not discovered by scientists working long hours in laboratories. It was cobbled together by two drunks in Akron.

The basis for AA also contradicts one of the articles of therapy faith. It tells patients not to engage in a mental struggle against their impulse to drink.

It tells them that they will never be strong enough to control the impulse, and should rely on a higher power, one that is strong enough.

In practice, this means, among other things, learning to help others. It’s a simple idea: instead of getting lost in your mind, you should reach out to other people. Telling someone to get over himself is better than telling him to get into himself.

It’s impossible to beat alcoholism on your own, with your own resources.

Johnson and Pagano explain:

Those who help people during treatment—taking time to talk to another addict who is struggling, volunteering, cleaning up, setting up for meetings, or other service projects—are, according to our research, statistically more likely to stay sober and out of jail in the six months after discharge, a high-risk period in which 70% relapse.

Worse yet, those who had abandoned their irreligion in favor of religion also did much better:

Our study showed daily spiritual experiences predicted abstinence, increased social behavior and reduced narcissistic behavior. Even those who enter addiction treatment without a religious background can benefit from an environment where they are encouraged to seek a higher power and serve others.

Nearly half of youth who self-identified as agnostic, atheist or nonreligious at treatment admission claimed a spiritual affiliation two months later. This change correlated with a decreased likelihood of testing positive for alcohol and drugs during treatment.

Religion, through AA programs provides:

… a deep sense of purpose, opportunities to provide help to other people, connections with others, and the chance to make a difference in the world. This reduces self-absorbed thinking, something AA cites as a root cause of addiction.

Admittedly, none of this proves that God exists. It does not prove that God doesn’t exist, either. But it does demonstrate that religion and spirituality contain something of value, something that, if you have an addiction problem, might be of great value.

A Sino-Russian Alliance?

Many Republicans, and some people who are not Republicans, want to fight back against Vladimir Putin’s Russia by imposing sanctions. Even President Obama likes to threaten Russia with sanctions.

One suspects that Republicans are using the crisis in Ukraine to score a few political points. Who was it who said: never let a good crisis go to waste?

For his part Spengler is appalled by the short sightedness of his “conservative colleagues.”He is encouraged that German Chancellor Angela Merkel does understand what is happening and what is at stake.

Merkel sees that Western sanctions against Russia would push Russia into an alliance with China. If there is one thing that American national interest should fear, it’s a Sino-Russian alliance.

Spengler writes:

Sanctions would throw B’rer Putin into the Briar, er, Bamboo Patch.

A specter is haunting Europe, and that is the specter of a Russian-Chinese alliance at the expense of Europe. China is dynamic, and its dynamism is transforming the “Silk Road” countries that lie across Russia’s southern border. China is building high-speed rail and high-speed internet south to Rangoon and eastward to Istanbul, intent on transforming its neighbors into an export market for high-value-added manufacturing and high-tech products. It’s one of the most remarkable ventures in world economic history, and the most underreported story of the year. My conservative friends have been predicting China’s economic demise every year for the past dozen, and have been wrong each time. They notice the elephant dung, but ignore the elephant.

China’s appetite for Siberian resources, including hydrocarbons and perhaps including water, is limitless. The Russians and Chinese have every reason to suspect each other. But if they put their differences aside, the economic synergies would be extensive. What should worry the West is the prospective synergies in military technology as well. Russia is rolling out the S500 air defense system. We shuddered at the prospect that Russia might provide its 20-year-old S300 system to Damascus or Tehran; we really don’t know how much better the new iteration is, but it might be a great deal better. Chinese rocketry already is good enough to sink any American ship within several hundred miles of its coastline. We really don’t want them to get together.

That’s precisely what may happen if the West succeeds in “isolating” Russia, as Germany’s leading news organization Der Spiegel has been warning.

Since this aspect of the situation has largely been ignored by the media, it deserves special emphasis:

Presently, we may undo the work of the Cold War era and stand godfather to a new Sino-Russian alliance. This without doubt would be the stupidest move in the history of American foreign policy. Russia’s economy is weak, but Russia has considerable latent resources in military technology. Russia has a limitless market for natural resources in China and a prospective partner in military technology. If we continue to dismantle our defense capacity while Russia and China nourish theirs, we will be in deep trouble.

Gwyneth and Chris: Unconscious Coupling

All things considered, Gwyneth Paltrow is best ignored. Nothing can really be gained by musing over her New Agey pronouncements.

And yet, Paltrow is culturally relevant. She set herself up as a role model. She offered lifestyle advice for those who want a life just like hers. And she declared her marriage to be one that people should emulate.

Thus, when Paltrow announced that she and her husband, Coldplay frontman Chris Martin were undergoing what she and her gurus called “conscious uncoupling” the news instantly went viral.

But what is “conscious uncoupling?”

If “conscious uncoupling” is what happens when a couple separates, what were they doing when they were together?

Unconsciously coupling?

Apparently, the New Age gurus who dreamed up this infelicitous phrase meant to reduce the negative emotions and outright rancor that often accompany separation and divorce.

One has to admit that those are worthy goals.

Paltrow’s gurus, Dr. Habib Sadeghi  and Dr. Sherry Sami apparently believe that separation and divorce are new developmental stages. Since human being live longer than they used to be, it is right and normal for them to have a series of marriages.

And yet, if these same gurus were counseling Paltrow before her marriage broke up, their psycho-flakery does not seem to have had a very beneficial effect.

While it is altogether possible that the Paltrow-Martin marriage was doomed from the start, for reasons that had nothing to do with the state of anyone’s soul, it seems slightly unseemly to conjure up a silly phrase in order to sugarcoat a failure. Whether it is a failed marriage or failed counseling, a divorce is not something to celebrate.

Apparently, Paltrow and Co. believed that “conscious uncoupling” was a more felicitous phrase that “separation.” And it sounded much nicer than that horrible word “divorce.”

And yet, as Shakespeare might have said, divorce by any other name smells as foul.

We know that divorce is bad for children and we are pleased to see that Paltrow and Martin seem to want to remain on good terms for the sake of their children. Knowing how rancorous and destructive divorce can be, we are happy to see that one couple is avoiding the destructive bitterness.

But, one suspects that by glossing over the pain of separation and divorce Paltrow and her gurus are obscuring the reality of what has taken place.

It is also fair to note that they are both fabulously wealthy. Since they are not going to have a real problem dividing money and property, they are not going to deal with one of the major sources of contentious divorces. It has nothing to do with frilly language.

And yet, by making divorce a developmental stage, Paltrow and her gurus are also normalizing divorce. Effectively, they are encouraging people to divorce. They are telling people to disrupt their lives and traumatize their children in order to find self-realization.

So, we are faced with something of a cultural phenomenon. Or better, we are faced with a couple of gurus who are apparently promoting their own New Ageism through a failed marriage.

One assumes that Hollywood is awash is such gurus. They appeal to people to have too much money and too few IQ points.

Enquiring minds now want to know what went wrong.

By all appearances Paltrow bears much of the responsibility. She chose to make her marriage into a public spectacle, embarrassing herself and humiliating her husband. She held herself up as a role model, someone who had it all, who had achieved the perfect life, who had the perfect husband, who had given birth to the perfect children.

Worse yet, she presented herself as a mini-guru, doling out marital advice to any and all. Where did she get the idea that she should be teaching the art of a great life?

Hang on tight: she was told it by a rock.

In her words:

I’ll never forget it. I was starting to hike up the red rocks, and honestly, it was as if I heard the rock say: ‘You have the answers. You are your teacher.’ I thought I was having an auditory hallucination.

One forgives those members of Paltrow’s audience for greeting the news of her breakup with Schadenfreude.

To everyone but her, it felt like she was flaunting her wealth, her fame and her success. Apparently, her gurus did not teach her not to flaunt it.

Beyond the fact that speaking openly and honestly and publicly about her marriage must have humiliated her husband, Paltrow also, unconsciously, expressed contempt for him. When asked how to deal with a spousal spat, she told Chelsea Handler:

Whatever you’re feeling, do the opposite. Go at him with love and you give him a b–wjob.

Of course, if fellatio were the cure for marital discord, most divorce lawyers would go out of business.

At the same time, Paltrow recommended acting like a housewife, holding down the home front while husband was off touring.

Call this the Patti Hanson way of sustaining a marriage with rock star husband—you know that Hanson is married to Keith Richards—but is it true?

She once told E!:

I think it’s different when you have an office job, because it’s routine and, you know, you can do all the stuff in the morning and then you come home in the evening. When you’re shooting a movie, they’re like, ‘We need you to go to Wisconsin for two weeks,’ and then you work 14 hours a day, and that part of it is very difficult. I think to have a regular job and be a mom is not as, of course there are challenges, but it’s not like being on set.

She has been severely criticized for her lack of empathy, but, to some extent her point was well taken. It is easier to establish an organized home life when routines are established and followed.

Paltrow is not making very many movies these days, but, by her admission working on one requires either long separations or a disrupted family routine.

Ultimately, hers is a sad story. You don’t even have to consult with an osteopath to find out what went wrong:

Pride goeth before destruction, and a haughty spirit before a fall.

Speak Loudly and Don't Carry a Stick

In March, 2012 President Obama told Russia’s then-president Dmitry Medvedev that after his next election he would have more flexibility in dealing with missile defense issues.

He suggested that since he would never have to run for office again, he would be free to  be the transformative president he had always wanted to be.

Obamacare was part of it. But, apparently, reducing America’s leadership role in the world was also a major, albeit unspoken part of it.

Polls are showing that more and more Americans believe that President Obama has diminished America’s role in the world. They see a reactive and pusillanimous American president ceding authority to the president of Russia.

Americans have the unmistakable impression that the Vladimir Putin is leading and that Obama is following. This has reduced America's status and stature. Besides, it is demoralizing.

No one should have been surprised. President Obama has consistently believed that America should be just one among many nations of the world. In his “cosmopolitan” view America should be less active in leading the world. To his mind America’s authority makes other nations feel badly about themselves.

In Obama’s gauzy multicultural view of the world, all cultures are equal. Those that have been more successful—think America and Israel—could only have achieved what they achieved by cheating.

Since winners are exploiters and oppressors they must cede authority and territory to the less fortunate, that is, their victims.

Obama has effectively shrunk America. Yet, he still knows how to bluster and bluff. He still issues empty threats, the better, one imagines, to keep American public opinion more or less with him.

Unfortunately, there is no substances behind the bluster and everyone knows it.. You cannot bluff very well when everyone knows you are bluffing.

Some pundits have called it a “speak loudly and carry a baguette” policy, but I prefer: “speak loudly and don’t carry a stick.”

This morning the Washington Free Beacon reports on administration efforts to disempower the American military:

President Barack Obama is seeking to abolish two highly successful missile programs that experts say have helped the U.S. Navy maintain military superiority for the past several decades.

The Tomahawk missile program—known as “the world’s most advanced cruise missile”—is set to be cut by $128 million under Obama’s fiscal year 2015 budget proposal and completely eliminated by fiscal year 2016, according to budget documents released by the Navy.

In addition to the monetary cuts to the program, the number of actual Tomahawk missiles acquired by the United States would drop significantly—from 196 last year to just 100 in 2015. The number will then drop to zero in 2016.

The Navy will also be forced to cancel its acquisition of the well-regarded and highly effective Hellfire missiles in 2015, according to Obama’s proposal.

What are the likely consequences of this strategy?

Military historian Victor Davis Hanson reminds us of what happens when leaders speak loudly while showing weakness.

Remember Pearl Harbor? Hanson explains how FDR’s bluster helped incite that attack:

The Roosevelt administration once talked loudly of pivoting to Asia to thwart a rising Japan. As a token of its seriousness, in May 1940 it moved the home port of the Seventh Fleet from San Diego to Pearl Harbor — but without beefing up the fleet’s strength.

The then-commander of the Pacific Fleet, Admiral James O. Richardson, an expert on the Japanese Imperial Navy, protested vehemently over such a reckless redeployment. He felt that the move might invite, but could not guard against, surprise attack.

Richardson was eventually relieved of his command and his career was ruined — even as he was later proved right when Japan attacked Pearl Harbor on December 7, 1941.

For obvious reasons, this side of the story has been largely eliminated from history books.

Not to be outdone, the Truman administration made a similar error in a different context:

By 1949, the U.S. was pledged to containing the expansion of Communism in Asia — even as Secretary of Defense Louis Johnson (who had been chief fundraiser for Truman’s 1948 campaign) declared that the Navy and Marines were obsolete. He began to slash both their budgets.

A “revolt of the admirals” followed, to no avail. But Mao Zedong’s China and Stalin’s Soviet Union took note of the new disconnect between American bluster and massive defense cuts. So they green-lighted a North Korean invasion of South Korea in June 1950.

And then there is Russia. Hanson reminds us of how Putin got the idea that he could fill the leadership vacuum left by President Obama:

  

Consider also Russia. We forget that “reset” in 2009 was a loud Obama attempt to reverse the Bush administration’s efforts to punish Russia for its aggression against Georgia — a Russian gambit itself perhaps predicated on the impression that the United States was bogged down in Afghanistan and Iraq, and that the Bush administration had been weakened by the midterm elections of 2006. Bush’s efforts to promote new missile-defense initiatives with Poland and the Czech Republic, suspension of nuclear-arms-limitation talks, curtailment of official communications with Moscow, and bolder efforts to isolate Iran from Russian interference were all intended to advise Moscow not to bully its neighbors.

Yet Obama entered office declaring that it was the Bush administration’s reaction to the Georgia aggression, and not the Russian invasion itself, that had cooled U.S.–Russian relations. The result was a red plastic reset button that presaged loud lectures about human rights in Russia without any real, concrete follow-through.

Our relationship with Russia is far worse now than during the Bush administration. Vladimir Putin is not just not deterred — who would be, after the U.S. fickleness in Libya, Egypt, and Syria, and in dealing with Iran? — but quite eager in the Crimea and Ukraine to show the world how to deflate American moralistic sermonizing. Putin believes that his amoral show of power impresses others who admire not his strength — for in truth he has little of it — but the simulation of strength that wins him support at home and a sort of sick admiration abroad.

So, we have a president who came into office believing that America was at fault and that if only America would cease its belligerent ways, world peace would break out.

Of course, the American people are responsible for their votes. Having been duped by the Obama campaign they are now paying the price.

But, if they go out and vote in 2016 for one of the major architects of the Russia “reset” policy, that is, for Hillary Clinton, they will deserve what they are going to get.

The California Blues

Thanks to Silicon Valley, California is in better shape than it was. Governor Jerry Brown has done well in reducing the state’s deficit and leading something of an economic recovery.

Unfortunately, the recovery exists largely within the hugely profitable tech world. The benefits have not trickled down to the rest of the state.

Extreme inequality reigns in another of the bluest of blue states. And blue state policies have been contributing to it.

The Schumpeter column in The Economist tells us that California is still decidedly unfriendly to businesses:

Those observing from afar the valley’s burgeoning entrepreneurial scene could be forgiven for concluding that California must truly be a Golden State for business. But beyond the gilded strip of land between San Francisco and San Jose is another California, an inhospitable place plagued by over-regulation, mindless bureaucracy, high taxes and endless lawsuits. Last May, six months after the state raised its top income-tax rate to the highest in the land, Chief Executive magazine named it America’s worst for doing business—for the ninth year in a row. Four months later Governor Jerry Brown signed a bill raising the minimum wage from 2016 to $10 an hour, also the highest of all the states.

Entrepreneurs who survive the ordeal of gathering all the permits needed to start a business—opening a restaurant can take more than two years in California—are then micromanaged by labour laws telling them when to pay overtime, and how much. They suffer electricity prices that are already among America’s highest, and which may rise further to meet the state government’s ambitious carbon-emissions goals.

Then there is the California Environmental Quality Act (CEQA). A well-intentioned law to curb the damaging effects of development has mutated into a monster. Almost anyone can file a CEQA lawsuit against any project they dislike; plaintiffs win half of the cases they enter, and when they lose they do not need to cover defendants’ legal fees (the reverse does not apply). Builders are compelled to hire expensive unionised labour to ward off union bosses’ threats of spurious CEQA suits. Shops and petrol stations file cases to prevent competitors from opening up. A longtime observer sums up the attitude of Californian state government to business as follows: “Fuck you, fuck you, fuck you, fuck you, fuck you, fuck you, fuck you, fuck you and fuck you.”

High tech oligarchs are flocking to California.

But, they have convinced everyone that their clean work of coding should never be fouled by the dirt produced by other businesses.  Outside of Silicon Valley people are looking the exit.

Schumpeter explains:

And partly it is because many of California’s most onerous [environmental] regulations hit manufacturers hardest and creative types least: iPhones are “designed by Apple in California” but made in Shenzhen. Indeed, Silicon Valley’s greenish tech folk are among the biggest supporters of the sort of rules that they can live with, but which make life hard for other types of businesses. 

Is there hope? Schumpeter suggests that there is, but within limits:

It seems unlikely that California will ever challenge the likes of Texas or North Dakota at the top of business-friendliness tables. It is a progressive, high-tax, high-regulation place, and most voters like it that way. So reformers speak not of scrapping CEQA but of making it harder to file frivolous lawsuits; they urge not a relaxation of workplace rules but an end to their capricious implementation. If he wants to ensure that California’s recovery lasts, Mr Brown must back these efforts. He must also resist pressure from some Democratic allies for a renewed spending splurge, which might eventually mean even higher business taxes. Above all, he should apply himself to making the daily lives of California’s businessfolk a little easier and more predictable. Only then might the rush of businesses out of the Golden State be halted.

New York's Segregated Schools

Are you looking for a racially segregated school system? Well then, come to New York.

In New York City and New York State public schools are more segregated than anywhere else in the country. And yes, that includes the South.

The New York Post reports on a study performed by researchers from UCLA:

New York state has the most segregated public schools in the nation, UCLA researchers said Wednesday.

And within the state, New York City schools are among the most segregated.

Nearly 30 percent of the state’s public schools had minority enrollments of 90 percent or more, even though 51 percent of the state’s students were white in the 2010-2011 school year covered by the report.

In New York City, the percentage of white students dropped from 21.3 percent in 1989-90 to 14.5 percent in 2010-11, the researchers said.

In 19 of the city’s 32 community school districts, minorities comprised at least 90 percent of the student population.

As everyone in New York City knows, most white parents prefer to send their children to private schools. Obviously, these schools are very expensive, but parents pay the price… in order to keep their children out of substandard minority-dominant public schools.

As it happens, there are a handful of Manhattan districts that have good schools, but, for the most part, white New Yorkers prefer to exercise their privilege by sending their children to private schools.

Often this causes significant financial hardship, but, compared to the hardship of sending their children to the city’s schools, parents feel morally obligated to do what is best for their children.

Of course, New York City is an extremely blue city in an extremely blue state. Its citizens are among the most reliably Democratic voters in the nation. Among other things, this means that the topic is largely ignored by the media.

People who have the right feelings about race and who would destroy any politician or pundit who used a racially charged epithet would never consider sending their children to a racially integrated school. 

Is it cognitive dissonance? Or, does parental duty trump politics?

Evidently, it takes more than the right feelings to solve the American racial divide.

Likeability Matters

In the very old days students were taught rhetoric.

Rhetoric is the art of persuasion. It’s about how to influence people. It’s about convincing an audience to accept or to respect your point of view.

The art extends to everyday relationships: how can we use language more effectively to connect with others, to inspire confidence, and even to convince others to do what we want them to do?

Note well that the art of rhetoric involves other people’s feelings. It does not emphasize how closely you are in touch with your feelings. It directs you outward toward others, not inward toward yourself.

Could it be that people rationalize their failure to connect with others by saying that they are in touch with themselves?

Of course, persuasion is not the same as manipulation. Demagogues are most adept at the latter, but, most often, they succeed with groups more than with individuals.

Moving a large audience is not the same as connecting with an individual and conducting a friendship over time. A moving dramatic performance is a one-off event. It is difficult to judge anyone’s character by a one-off event.

When friendship is at issue, a series of different interactions will tell you what you need to know about the person’s character.

Taking on the topic in the Wall Street Journal Sue Schellenbarger rightly emphasizes the fact that your ideas or proposals will better received if you are more likeable.

She refers to an excellent book by Tim Sanders, The Likeability Factor. Several years ago I wrote a post on the book. If you read to the end of the post you will see that Sanders himself graciously offered some comments on it.

Schellenbarger concerns herself with the way likeability helps you on the job:

Likable people are more apt to be hired, get help at work, get useful information from others and have mistakes forgiven. A study of 133 managers last year by researchers at the University of Massachusetts found that if an auditor is likable and gives a well-organized argument, managers tend to comply with his suggestions, even if they disagree and the auditor lacks supporting evidence.

The basis for likeability is good character. Aristotle said that good character makes you more persuasive, too.

You will like and believe someone you can trust, someone who is responsible and reliable. At a time when we are implored, on a daily basis, not to be judgmental, it turns out that your ability to present yourself as a person of good character is essential to the way people accept or reject what you have to say.

Ostensibly, Schellenbarger wants to address how people can project likeability when they are speaking to a camera. And yet, the same lessons apply off-camera. They even apply in personal relationships:

Listeners tend to like speakers who seem trustworthy and authentic, who tell an engaging or persuasive story and who seem to have things in common with them, says Noah Zandan, president of Quantified Impressions in Austin, Texas, a provider of communications analytics. 

As Sanders has emphasized, likeability is not an innate quality, but it is something that can be taught and that can be worked on.

Schellenbarger explains:

But coaches say that likability can be taught. "Likability isn't something you are born with, like charisma. It's something you can learn," says Ben Decker, chief executive officer of Decker Communications, San Francisco, a training and consulting firm.

Decker explains that a speaker who wants to be likeable should make eye contact, smile naturally and vary the tone of his voice.

More important he should work to find common ground with his interlocutor:

Mr. Decker also urges clients to "really think about the listener" and figure out goals he or she might share with you. The ability to find common ground with others is a cornerstone of likability.

You connect with others by sharing an experience or by referring to the same facts. That’s why people often open conversations with strangers by referring to the weather.

You will make a better connection if you remark about the cold winter than if you share some details about how you really, really feel.

Who Are the Real Misogynists?

Yesterday, Frank Rich tweeted a link to an article on the Heritage Foundation site, The Foundry.

Rich exhorted us to read through the article to the comments. There, he said, we would find ample evidence of right wing misogyny.

But, he missed the obvious. Before you even get to the comments, you will find, in the body of the article, several examples of blatant and flagrant misogyny.

You will find an author calling women parasites. You will find another author saying that women should not have a right to choose. And you will find a writer denouncing women as mindless and infantile creatures.

Of course, these statements did not move Rich’s misogyny needle because they were made, respectively, by Gloria Steinem, Simone de Beauvoir and Betty Friedan.

One might say that these three great feminist heroines were not maligning all women. They were merely slandering and defaming housewives. But, unless I miss my guess, housewives are women too. Don’t they deserve some respect for their independent and autonomous decisions about how they want to conduct their lives?

To the great feminists, they do not.

Gloria Steinem said this:

[Housewives] are dependent creatures who are still children…parasites.

Simone de Beauvoir offered her view of a woman’s right to choose freely:

No woman should be authorized to stay at home and raise her children. Women should not have that choice, precisely because if there is such a choice, too many women will make that one.

The prize goes to Betty Friedan, not merely for misogyny but for stupidity:

[Housewives] are mindless and thing-hungry…not people. [Housework] is peculiarly suited to the capacities of feeble-minded girls. [It] arrests their development at an infantile level, short of personal identity with an inevitably weak core of self…. [Housewives] are in as much danger as the millions who walked to their own death in the concentration camps. [The] conditions which destroyed the human identity of so many prisoners were not the torture and brutality, but conditions similar to those which destroy the identity of the American housewife.

Think about it, that housewife who is going to make dinner for her children, and perhaps even her husband tonight is doing no better than the concentration camp victim.

Because what really mattered in the death camps was the psychological damage inflicted on the victims. Think of it, the prisoners were deprived of their ability to actualize their full human potential.

Imagine this scene: a bright young feminist meets a concentration camp survivor. She says: I know how you felt when you were in the camps; I had to make dinner for my children last night.

Can you imagine a more egregious insult?

Friedan is channeling Abraham Maslow and perhaps some other titans of the therapy culture. But, shouldn’t the failure to distinguish between feeding your children and being gassed to death disqualify her from ever being taken seriously?

Apparently, it doesn’t.

Think what you will about feminism, but three of its leading lights are misogynistically contemptuous of women. On top of it, Better Friedan was not a very sophisticated thinker, either.

It’s one thing to adhere to a position because it has been presented cogently and persuasively. It’s quite another to buy into nonsense because you have been intimidated and threatened.