Tuesday, February 28, 2023

Talking Peace in Ukraine

The Biden administration is all-in. It seems to be unwilling to accept anything less than Ukrainian victory over Russia. It has been throwing major money at the problem and has joined Pres. Zelensky in insisting that there will be no compromise.

As you know, China has proposed its own peace plan, plan that the administration has summarily dismissed.

But then, according to the Wall Street Journal, France and Germany are far less sanguine about Ukrainian prospects. These countries have not gone completely public with their doubts, but still, when it appears in the press, you know that something is happening. Moreso since this story has not been reported very widely:

But the public rhetoric masks deepening private doubts among politicians in the U.K., France and Germany that Ukraine will be able to expel the Russians from eastern Ukraine and Crimea, which Russia has controlled since 2014, and a belief that the West can only help sustain the war effort for so long, especially if the conflict settles into a stalemate, officials from the three countries say.

Whereas we keep hearing about how great the Ukrainians are doing-- and they are certainly doing far better than expected-- European officials do not believe that Ukraine can hold out indefinitely:

“We keep repeating that Russia mustn’t win, but what does that mean? If the war goes on for long enough with this intensity, Ukraine’s losses will become unbearable,” a senior French official said. “And no one believes they will be able to retrieve Crimea.”

Leaders of France and German told the Ukrainian president that he should start thinking in terms of peace talks:

President Emmanuel Macron of France and Chancellor Olaf Scholz of Germany told Ukrainian President Volodymyr Zelensky that he needed to start considering peace talks with Moscow when the three leaders met in Paris earlier this month, people familiar with the conversation said.

Over dinner at the Élysée Palace, the sumptuous seat of the French presidency, Mr. Macron delivered a more sober message, the people said, telling Mr. Zelensky that even mortal enemies like France and Germany had to make peace after World War II.

And this means that France and Germany are not going all in on weapons deliveries. This means that America is going it alone.

France and Germany have signaled that they won’t be delivering new types of weapons to Ukraine as the fighting continues in the coming weeks. And while Britain is training Ukrainian pilots on jet fighters, officials say this is part of the longer-term objective to deter Russia from future attacks.

So, if you thought that Ukraine was going to defeat Russia, you should think again. While the American administration has been playing international tough guy, the better to revive the moribund Biden presidency, those who are closer to the situation on the ground are looking for a way out of the conflict, a way that will not involve Russian defeat.

It is, dare I say, worth considering.

Monday, February 27, 2023

Toxic Positivity

Once upon a time psycho professionals accepted the Freudian theory, namely that life was a tragedy. They imagined that it made them tough minded, willing to confront reality.

Yet, all the negativity made people unhappy. At times it made them depressed. So the great minds in the psycho world came up with positivity, seeing the bright side of things, seeing the glass half full, which quickly morphed into-- ignoring the reality of the situation and dismissing the sufferer as inadequate.

When the Daily Mail reports the story, it tells us that the suffering person ought to be getting in touch with his feelings, that he ought to be processing his emotions. Such is the standard therapeutic wisdom. It is bad advice. Often the suffering individual ought to be doing something to alleviate the suffering, even to solve the problem. Telling him that it’s not a problem does nothing for him.

The Daily Mail reports:

Psychologists have suggested that 'toxic positivity' - the belief that no matter how dire a situation is people must maintain a positive mindset - could be just as dangerous. 

While intentions may come from the right place, telling someone in a difficult spot to 'stay positive' may minimise or brush their problems under the carpet - when it may have taken some effort to bring them to the fore in the first place.

What happens when you shower someone with toxic positivity? They feel dismissed and demeaned. They imagine that their problems are unimportant, something that any sensible, rational adult could easily deal with it. Toxic positivity tells people to ignore problems:

When somebody comes to you with a problem, telling them to ignore what they are feeling to focus on what they should be grateful for in their life may do a lot more harm than you think.


When discussing your emotions and feelings it is always best to let that person speak and explain what they are feeling.

Instantly dismissing that and telling them to focus on something good in their lives may not be the best advice. 

It could lead to someone burying down that bad feeling, which can then create further problems down the road. 

Unfortunately, therapy speak emphasizes feelings. In truth the authors should have said that people should address their problems, their difficulties, their conundra. Getting in touch with their feelings will not advance that cause. It will not help them to deal with their problems.

With that caveat, it is mindless and dismissive to tell someone that things could be worse. It’s like knowing that someone’s child has just died and you respond that at least one child survived.

Similar to 'everything happens for a reason', 'it could be worse' is another dangerous saying that can make people avoid addressing their true feelings. 

Negative feelings don't have to be such a frightful thought and actually delving into what is making you unhappy can help.

Telling someone 'well, at least you're not dead' ignores the real problems at hand.  

Dealing with the problems does not mean dealing with the emotions. It means, overcoming suffering by taking consequential action:

When somebody comes to you with a problem your instinct might tell you to deflect away from the issue and compliment them on something to make them feel happy. 

However, telling someone their hair looks gorgeous when they're going through a break-up can again lead to a build up of repressed negative feelings. 

Someone who is clearly in a difficult space does not want to hear how glowing their skin looks... 

True enough. Such comments are banal and dismissive. It suggests that they have no right to their problems, and that you, if you had the problems, would easily solve them.

The moral of the story is that the psycho world traffics in banalities. It turns useful insights into mindless slogans. Among them the notion that positivity is the solution to all problems, and that a friend will  naturally help a friend to feel more competent, by diminishing the problem and by offering excessive praise.

Sunday, February 26, 2023

It's Not Just the Kids-- No One is All Right

By now everyone has had a say about the mental health crisis experienced by America’s adolescents. Most especially, everyone has something to say about the fact that American girls are especially prone to be depressed, anxious and suicidal.

I have opined on the subject before. Now, its Niall Ferguson’s turn:

According to Haidt, there has never been a generation as “depressed, anxious and fragile” as Generation Z, Americans born between 1997 and 2012. They have “extraordinarily high rates of anxiety, depression, self-harm, suicide and fragility.” Haidt lays the blame firmly on social media — to be precise, apps such as Facebook and Instagram on smartphones — and is working on a book making that case. (He’s already published much of his data and a series of related academic articles.)

Now, Ferguson joins me and several others in being unwilling to blame it on social media. The crisis, he says, extends to American adults, too:

There’s only one glitch with this harrowing narrative: The reality is that there is a mental illness epidemic throughout the population. It’s not just the kids who are not all right.

How does he explain the problem? Simply put, and these are not his terms, we live in a therapy culture. In a therapy culture we are all obliged to admit to having some form of mental illness, lest we be dismissed from normal social groups:

The issue remains a battleground for social scientists, but I remain firmly persuaded that the creation of vast online networks greatly increased our vulnerability to contagions of the mind, including conspiracy theories and “mind viruses” of all kinds.

He continues:

There is, however, another possibility that cannot be ruled out. With the number of therapists growing faster in the US than average for all occupations — and with mental health services booming in college campuses — young Americans surely have more access to psychotherapy than any previous generation of teenagers and twenty-somethings.

The daughter of an English friend of mine began her undergraduate studies at a renowned American university last year. She chose to leave because she found the social atmosphere oppressive. “Everyone seems to have their mental health problem that they want to talk about,” she told me. “I said I didn’t have one and was pretty well-adjusted. They said: ‘Ah, your trauma must be really deeply buried.’”

And also:

In America today, the peer group pressure among teenagers is to get counseling rather than to get crazee. I feel sorry for Generation Z. Compared with being a teenager in the 1970s, being a teenager in the 2020s seems like no fun at all. But can there really have been as many suicide attempts by high schoolers in 2021 as the YRBS implies — which would be around 2.5 million?

I find the point well taken. In a therapy culture you define yourself in terms of your emotional distress. If you do not suffer any emotional distress, you are in denial. If you are not working on your emotional problems, you are a fraud-- unfit for therapy culture.

It’s an intriguing idea, one with which I find useful. The large number of mental cases in America signifies a new and more ominous turn in American culture. 

Saturday, February 25, 2023

The Downside of Sanctions

I have long had my personal doubts about the effectiveness of sanctions as a political weapon. America has been using sanctions to punish Russia for its Ukraine war, so we are within our rights to ask how well they have been working. 

Now Andrew Cockburn takes the measure of our sanctions war against Russia. He does not find that it has been very effective at all. It has certainly not forced Russia to abandon its Ukraine aggression.

He discovers that the Russian economy is doing fine, thank you. Those who told us that sanctions would cripple Russia were simply wrong:

True to form, nothing of the kind has come to pass. The Russian currency is trading slightly higher than at the time of the invasion. Inflation is at almost the same level. Moscow shops continue to offer a full range of western consumer goods, while e-commerce trade with the outside world has actually grown by 30 percent. The IMF is projecting that the Russian economy will actually grow this year and next. Despite baroque efforts to crimp Putin’s oil export income, “Urals crude” continues to flow at levels — roughly four million barrels a day — unchanged from pre-war levels, not least through Indian, Turkish, Chinese, and Senegalese refineries, whence it moves unimpeded into European gas tanks and power plants.

Apparently, it is not very difficult to get around sanctions:

Such blatant circumvention of the sanctions regime is studiously ignored by the sanctioneers, since it is necessary to ward off catastrophic energy price inflation in western economies. Efforts to at least crimp the price at which Russia sells its oil via a “price cap” mechanism appear to have had little effect: Asian refiners are reportedly paying full price. (In a less publicized example of officially endorsed sanctions evasion, Russian exports of enriched uranium, originally mined in Kazakhstan, are duly labeled “Kasakh” and continue to power U.S. reactors.)

Sanctioning other countries is a sign of weakness. It ends up hurting the sanctioning country as much as it hurts the sanctioned country. Surely, it has not been doing much damage to the Russian economy.

Cockburn continues:

It has become clear that he or whoever planned the sanctions strategy didn’t really understand the Russian economy very well, especially its place in the global system. Instead, U.S. strategy appears to have proceeded on the assumption that Russia, in the words of the late John McCain, was merely “a gas station masquerading as a country” as opposed to an essential source for everything from oil to grain to metals such as nickel, well able to feed itself and maintain industrial output at a high level.

Furthermore, this mode of economic warfare inflicts penalties on the perpetrator of a kind escaped by the latter’s military counterparts. Apart from the moral obloquy attendant on incinerating German and Japanese cities, or obliterating Afghan families with Hellfire missiles, the air-attack strategy incurs only the cost of a bloated arms budget and, most recently, defeat in the relevant war.

The economic war against Russia is likely to have more serious consequences for U.S. power, since it accelerates the de-dollarization of the global economy – quite certainly accelerated by the ill-considered “shock and awe” initiative in seizing $300 billion of Russia’s foreign exchange reserves lodged in Western banks.  In response to this mammoth heist, China is overseeing a shift away from the dollar in energy trades, most significantly in paying for Saudi oil in renminbi, an ominous development for the U.S.

True enough, we have occasionally mentioned the risk inherent in weaponizing the dollar, in seizing foreign assets held in Western banks. The result has been a dedollarization of the world economy, an effort by China, India, Russia and Middle Eastern nations to circumvent the dollar, by doing business in yuan.

Dare we say, this is a dangerous game, especially for the United States. We owe our hegemony to the fact that the dollar is a reserve currency. Losing that status would be a massive calamity, especially for us.

Treating Depression

This should not come as news. I have on occasion reported on this area of research, as a public service. Now, we have more research showing that aerobic conditioning exercise is a good treatment for depression. In fact, some researchers consider it more effective than pills. Considering how many pills are overprescribed, we do well to consider alternatives.

From the New York Post:

A run a day keeps the depression away.

Researchers from the University of South Australia have discovered regular exercise may be more effective than medication for the treatment of mental illness, such as depression.

Published in the British Journal of Sports Medicine, the study used 97 reviews, 1,039 and 128,119 participants, marking it as one of the most extensive pieces of research to date. Based on their findings, they concluded that exercise improved symptoms of depression and anxiety.

“Physical activity is known to help improve mental health. Yet despite the evidence, it has not been widely adopted as a first-choice treatment,” lead researcher Dr. Ben Singh said in a statement.

And that’s not all:

Past research has shown exercise to positively impact mental health, as well as a slew of other health benefits, including cancer growth reduction, cognitive decline prevention and even life longevity.

Physical activity has also been shown to ward off cardiovascular disease, Type 2 diabetes and some cancers, and can also strengthen bones and muscles.

Friday, February 24, 2023

Heidegger and Nazism

You might not remember, but the late 1960s were a heady time at American universities. Most especially within the world of literary studies. At that time a French intellectual by the name of Jacques Derrida introduced a practice that he called deconstruction. It was a variant on a practice introduced by German philosopher Martin Heidegger, Germany’s most famous Nazi thinker.

In brief, and as I argued in another work, deconstruction is yet another word for pogrom. It is not about taking things apart but about identifying alien elements in literary and philosophical texts, then neutralizing them, lest they contaminate the culture.

The alien ideas were associated, Derrida argued, with repressing the importance of writing in favor of speech. Western civilization had run afoul by degrading writing and elevating speech. If you have the courage to see this structure as a reprise of the Nazi idea that Western civilization has been corrupted by Judaic thinking or even Jewish memes, you are getting closer to the stakes here.

Naturally, no one at the time really noticed that this was all a bunch of Nazi thinking, sanitized for American graduate students. But alas, it was.

Leftist intellectuals happily embraced a Nazi practice because they imagined that it was radical and even revolutionary. Derrida was a grand master, but the great genius of the movement was Martin Heidegger.

The mania broke somewhat in the late 1980s when a Venezuelan academic named Victor Farias wrote a book arguing that Heidegger’s association with Nazism was not just some incidental quirk. It was not extraneous to his philosophy, but was basic to his philosophy.

Ever since that moment academics, especially those who had been duped into becoming carriers for Nazi practices, have been arguing the point. For the most part deconstruction has faded into oblivion. Where it certainly belongs.

Now, everyone knew that Heidegger was a Nazi. Everyone knew that he was a staunch supporter of Hitler and the Nazi program. He had been forbidden from teaching in the post war period because his appeal was deemed too dangerous.

Among those who have offered the most cogent analyses of Heidegger and Nazism is Professor Richard Wolin. On the occasion of his new book on the topic, wherein he continues to argue that Heidegger was always a Nazi, and an anti-Semite, Jeffrey Herf reviews the book for Quillette. I will not go into too much detail, but the case is highly persuasive.

Herf offers a picture of Heidegger’s most important public speech about Nazism, from 1933. And he follows Wolin in painting the background of that speech:

On April 21st, 1933, the German philosopher Martin Heidegger, then famous as the author of the 1927 philosophical treatise Being and Time, gave one of the most famous speeches delivered by any scholar living in the dictatorships of the 20th century. It was titled, “The Self-Assertion of the German University,” and it called upon students at the University of Freiburg to abandon objectivity and academic freedom and instead join the “spiritual mission which impresses onto the fate of the German Volk [people] the stamp of history” while the “moribund pseudocivilization” of the West “collapses into itself.”

By the time Heidegger delivered that speech, the Nazi regime had already declared a national emergency and suspended civil liberties following the Reichstag Fire of February 28th. The regime had violently destroyed the Communist and Social Democratic Parties, thereby clearing a path to dictatorship, and it had introduced national legislation calling for the expulsion of all Jews from the civil service. The antisemitic clauses of the Nazi Party were now government policy, and purges of Jewish professors were underway in the universities, including at Freiburg, where Heidegger had just been elected rector. Over the summer and into the fall, he openly declared his support and admiration for Hitler and the new regime and called upon all to vote for the Nazis in elections.

As it happens, many theorists have refused to accept that Heidegger’s philosophy had anything to do with his Nazi convictions. After all, he wasn’t a conservative Republican:

But a spectrum of theorists across the Left and Right have stubbornly refused to accept that the reputation Heidegger acquired in 1927 as a serious philosopher was dented by his support for Nazism, which they maintain was merely an irrelevant (albeit embarrassing) deviation.

Wolin and many others have debunked the notion that the philosophy had nothing to do with Heidegger’s politics:

An array of historians and philosophers, including Wolin, compellingly argue that there was a clear connection between the concepts of Being and Time and Heidegger’s support for Hitler, that his support for Nazism never wavered, that his antisemitism shared the genocidal characteristics of Nazi ideology and propaganda, and that he was dishonest after the war about what Nazism was and about his own role in lending it respectability. If all of that and more is true, then surely it is long past time that we recognize Heidegger’s philosophy as “irreparably contaminated” with fascism and Nazism.

College Admissions

In the Dumbing America Down category, I share this Tweet about college admissions today. I trust you understand that POC means-- people of color.

Peachy Keenan


College admission season update - From a friend: “Niece got 1450 SAT, 4.2 GPA, competitive athlete. She didn’t even get into her safety schools. Going to junior college this year and is very depressed. The POC kids in her class, C students at best, are all headed to Berkeley, UCLA, USC, and Stanford.”

9:19 PM · Feb 23, 2023·1.5M Views


Thursday, February 23, 2023

Trump Violates the Eleventh Commandment

You probably recall, wistfully, that Ronald Reagan once counseled Republicans against speaking ill of other Republicans. He called it the Eleventh Commandment and clearly he designed it to promote Republican electoral fortunes. Didn't Benjamin Franklin say that his fellow revolutionaries should hang together, lest they hang separately?

 But now, we live in a different time and we have a different species of politician. Consider the case of Donald Trump. In truth, the former president seems these days to be doing nothing but speaking ill of his fellow Republicans. Perhaps he has a better idea. Perhaps he is rejecting Reagan’s commandment. 

 If he has a better idea I am confident that my readers will enlighten us all. Tearing the Republican Party apart does not feel like a winning strategy. Then again, perhaps Trump knows that he is going to lose the nomination, but that he wants to destroy the Republican Party by running as a third party candidate. Perhaps he feels underappreciated.

Then again, perhaps he is simply a sore loser, and cannot accept that the party might have moved beyond him, thus, that the presidential nomination is not just his for the asking.

 Anyway, Powerline elicited these thoughts with the following post (via Maggie’s Farm):

 Former President Trump has railed against the New York Post, one of the nation’s top tabloid newspapers, after it published an extensive profile of possible 2024 White House candidate Florida Gov. Ron DeSantis (R) over the weekend.


“In writer Salena Zito’s Fake News “puff piece” about DeSantis, which supposedly appeared in the dying New York Post, which is way down in readership just like FoxNews is way down in Ratings, why doesn’t she mention that he wants to cut Social Security & Medicare, loves losers like Jeb Bush, Paul Ryan, and Karl Rove, and is getting CLOBBERED in the polls by me,” Trump wrote on Sunday on Truth Social. “DeSantis is a RINO who is trying to hide his past. I don’t read the New York Post anymore. It has become Fake News, just like Fox & WSJ!”

 Now, Trump has a new enemies list. Powerline tells us who has made the list:

 Former President Trump has railed against the New York Post, one of the nation’s top tabloid newspapers, after it published an extensive profile of possible 2024 White House candidate Florida Gov. Ron DeSantis (R) over the weekend.


“In writer Salena Zito’s Fake News “puff piece” about DeSantis, which supposedly appeared in the dying New York Post, which is way down in readership just like FoxNews is way down in Ratings, why doesn’t she mention that he wants to cut Social Security & Medicare, loves losers like Jeb Bush, Paul Ryan, and Karl Rove, and is getting CLOBBERED in the polls by me,” Trump wrote on Sunday on Truth Social. “DeSantis is a RINO who is trying to hide his past. I don’t read the New York Post anymore. It has become Fake News, just like Fox & WSJ!”

So, let’s add it up. Trump now hates:

* The New York Post, increasingly a top outlet for conservatives, having been vindicated in its coverage of Joe Biden’s corruption.

 * Salena Zito, who more than any other journalist has covered Trump’s voters intelligently and sympathetically.

 * Ron DeSantis, America’s most outstanding governor and a top presidential contender.

* Fox News.

 * The Wall Street Journal.

 And of course, these are not the only bridges Trump has burned. One has to wonder what is left for Trump. How much more selective can he afford to make his appeal?

 Burning bridges-- that seems to summarize it. But, clearly, Trump is not presenting himself as a confident winner. He is presenting himself as someone who is getting ready to lose. 

 I trust that I have missed the genius of this approach, and I anxiously await those of you who will set me straight.


Wednesday, February 22, 2023

The Problem with Onshoring

I have dutifully covered the current rage about how we must onshore industry and manufacturing. What objection could anyone have to bringing business back to America?

Congress has been passing laws and doling out money for infrastructure projects and for new factory construction. How can anyone oppose that?

And yet, as I have occasionally noted, with precious little real evidence, it is not self-evident that we have the human capital to do the jobs. It’s nice to have the money and even the good intentions, but if you do not have the people, you are whistling in the dark.

Yesterday, the Financial Times reported on the simple fact that in many cases our workforce is not up to the new jobs. I cannot link the FT, so I will quote their observations at length.

As it happens, no one else has been reporting this story, so I am happy to bring it to your attention.

First, as regards infrastructure spending:

Con­struc­tion com­pan­ies are warn­ing that the Biden admin­is­tra­tion’s plans for a massive infra­struc­ture boom are on a col­li­sion course with a tight labour mar­ket. One industry group says the coun­try is short of 500,000 work­ers, des­pite plans for $1.2tn in spend­ing on projects from chip­mak­ing to clean energy. 

Immig­ra­tion reform to meet demand is unlikely. ‘A shovel-ready project with nobody to oper­ate the shovel is worth­less,’ says one observer.

A short­age of con­struc­tion work­ers is put­ting at risk Joe Biden’s plans to fuel a his­toric build­ing boom in the US, accord­ing to industry exec­ut­ives.

Similarly with manufacturing… and especially with our wish to compete with China:

The pres­id­ent has signed off on spend­ing of more than $1.5tn to boost the nation’s infra­struc­ture and catch up with China in man­u­fac­tur­ing. But after dec­ades of off­shor­ing and dis­cour­aging Amer­ic­ans from voca­tional work, con­struc­tion com­pan­ies warn that the coun­try’s indus­trial policies and labour mar­ket are on a col­li­sion course.

The US will need an extra 546,000 work­ers on top of the nor­mal hir­ing pace this year to meet labour demand, estim­ates the ABC. 

Con­struc­tion job open­ings aver­aged a record 391,000 in 2022, up 17 per cent on the pre­vi­ous year, the Bur­eau of Labor Stat­ist­ics said.

“We’re put­ting mil­lions and mil­lions of dol­lars into infra­struc­ture without any­body to install it,” said Ed Brady, chief exec­ut­ive of the Home Build­ers Insti­tute, a non-profit organ­isa­tion that pro­motes con­struc­tion train­ing. “A shovel-ready project with nobody to oper­ate the shovel is worth­less.”

The fed­eral stim­u­lus includes $1.2tn in infra­struc­ture spend­ing, $369bn from the Infla­tion Reduc­tion Act for clean energy projects, and $39bn from the Chips and Sci­ence Act to spear­head the coun­try’s pro­duc­tion of semi­con­duct­ors.

A ton of money and no one who is capable of doing the jobs. Somehow or other training children to be social justice warriors does not prepare them for these jobs:

Des­pite increas­ing wages, 80 per cent of con­struc­tion com­pan­ies say they are strug­gling to hire work­ers, accord­ing to a sur­vey by the Asso­ci­ated Gen­eral Con­tract­ors of Amer­ica last month.

In Colum­bus, Ohio, Intel has pledged $20bn to build two semi­con­ductor factor­ies, and Honda is build­ing a $4.4bn bat­tery plant with LG Energy Solu­tion. The projects will require nearly 10,000 con­struc­tion work­ers.

“The entire state of Ohio does not have the num­ber of pro­fes­sion­als to per­form this alone,” said Cath­er­ine Hunt Ryan, man­u­fac­tur­ing and tech­no­logy pres­id­ent of Bechtel, one of the com­pan­ies build­ing Intel’s factor­ies.

Put those facts in your hookah and smoke them. And wipe that smirk off of the faces of those who are filling the airways with optimistic accounts of how we are going to upgrade our infrastructure and compete over semiconductor production.

Tuesday, February 21, 2023

What Now for New York City?

New York City’s descent seems inevitable and inexorable. 

This morning we saw a story about the impact of migrants on local businesses. Since the city has chosen to house migrants in local hotels and motels, the local businesses that depend on tourism are being killed. You see, migrants have no money. They do not spend money in restaurants or even bars. These street level businesses are now dying.

As for the tourist hotels and motels, they are being destroyed by the migrant population. And the city has rented them for another couple of years-- so, say goodbye to more and more small businesses. And say goodbye to more and more tourism.

And then there is remote work. As we noted yesterday, the more remote work there is the less need there is for office buildings. So, developers are now beginning to default on their mortgages.

The Wall Street Journal has the story:

The loan backing the office tower at 1740 Broadway in Manhattan became distressed because a major lease was expiring.

The number of big office landlords defaulting on their loans is on the rise, fresh evidence that more developers believe that remote and hybrid work habits have permanently impaired the office market. 

The giant investment manager Brookfield Asset Management recently defaulted on a total of over $750 million in debt for a pair of 52-story towers in Los Angeles, according to a February securities filing. Real-estate firm RXR is in talks with creditors to restructure debt on 61 Broadway, a 34-story tower in Manhattan’s financial district, according to people familiar with the matter. Handing over the building to the lender is among the options under consideration, these people said. 

Very few people are paying very much attention to this, but surely it is relevant to the ability of the city to stay afloat:

Five to 10 office towers each month join the list of properties at risk of defaulting because of low occupancy, expiring leases or maturing debt that would have to be refinanced at a higher rate, according to Manus Clancy, senior managing director with data firm Trepp Inc.

How bad is it? Perhaps not bad enough to destroy the financial system, but certainly bad enough to be cause for serious concern.

The delinquency rate for office loans that back commercial-mortgage-backed securities remains low, but it is heading higher. The rate last month rose by a quarter of a percentage point to 1.83%, its largest increase since December 2021, according to Trepp. Loans backed by office buildings in Philadelphia, Denver and Charlotte, N.C., have also either been transferred to special servicers in recent weeks or have been parts of bond issues that have been downgraded by credit-rating firms.

For most landlords, losing buildings to creditors after a default would be painful but not devastating. Many investors structure buildings as separate financial entities. If they default on debt, creditors generally can foreclose on the building but have no recourse against the rest of the company. 

But the pain from foreclosures is likely to ripple through the financial system. About $1.2 trillion of debt was backed by office buildings at the end of the third quarter last year, according to Trepp.

But then, what happens when it all ripples through the financial system. Assuredly, nothing good happens. 

Few media outlets are following this story closely. And yet, it deserves attention, even if only as a canary in a coal mine.

Monday, February 20, 2023

The Future of Work

The debate about the future of work is ongoing. Surely, it manifests itself most clearly in the empty office buildings in New York and other major American cities. Considering how many of these buildings are mortgaged, remote work is about a lot more than more than worker satisfaction.

And yet, many corporate executives have tired of the scattered nature of remote work and are trying to force their staff back into the office. Workers have been resisting, either because they crave work/life balance or because they are incapable of the sustained effort required to interact with other people.

Now,  Wharton professor Adam Grant has argued for more remote work. He proposed that executives should adapt to their new workers, and especially to the new therapeutic mindset, to say nothing of the ingrained habit of sloth.

To which Matthew Andersson responds in the American Thinker (via Maggie’s Farm):

In a recent Wall Street Journal article (“What CEOs Are Getting Wrong About the Future of Work -- and How to Make It Right”), University of Pennsylvania Wharton School of Business professor Adam Grant advances what he thinks will be the future of work: digital interaction. He also asserts what he thinks future CEOs must do, in order to accommodate his vision: make workers “happy” and let them operate in a more personal, domesticated way.  He’s wrong in both assertions, because most university professors continue to misunderstand the economy and what it actually consists of.  They also misunderstand what a country must do competitively.

Surely, Andersson has raised the salient point. The goal of work is not to produce worker contentment. It is not even, to produce therapeutic benefit. American companies are competing internationally. If you become less effective and less efficient by working from home, then the competitive marketplace will offer an eventual verdict.

And yet, he adds, the foundation of the world economy lies in manufacturing, construction, hospitality and tourism. These cannot be done remotely:

For some types of work, a distance and on-line format can indeed be efficient: many professional services and some retailing are examples.  They make up nearly half of the world GDP economy: But they rely on the other half that is made up of manufacturing; oil, gas and coal extraction; construction; rail, air and sea shipping; and restaurants, apparel and tourism, among others. 

So, Andersson wants to revive the work ethic. One understands that the push toward remote work is a direct attack on the work ethic, the one that built the country and even the world:

Future work, and future effective CEOs, will not be defined by idealism concerning worker happiness, environmental posturing, or even artificial intelligence, but by working hard, solving physical problems, and making reliable profits in a competitive framework that creates national advantage. 

Well said.

Sunday, February 19, 2023

John Fetterman Hospitalized for Depression

If it isn’t criminal, at least it’s rank cruelty. I am thinking of the fact that physicians, politicians, the media and family promoted John Fetterman’s candidacy to be Pennsylvania senator. They did it because they were horrified at the chance that the state could be represented by Dr. Oz. 

Of course, Fetterman was literally brain damaged. He had suffered a severe stroke and had serious heart problems. He had bad aphasia and could not process spoken language. This meant that he could not engage in conversation with other human beings. 

That these problems would make it impossible for him to serve seems not to have bothered his supporters. Now, in an ultimate rebuke to their disgraceful cruelty, Fetterman has checked himself into a psychiatric hospital, the better to be treated for severe depression. We are told that the treatment will take weeks.

I am far from being expert in such matters, but I suspect that a multi week treatment program can only be necessary when the patient’s condition is very bad. One suspects that Fetterman tried outpatient treatments, but that they failed. Now, reports have it that he needs to spend many weeks in the hospital because the doctors want to try out different medications on him.

Does that sound familiar? It should.

A mere ten days ago we reported on the case of one Lindsay Clancy. You recall that the Massachusetts housewife checked herself into a hospital for treatment of postpartum depression. The doctors tried a multitude of different medications on her. The result: she murdered her three children and tried to commit suicide.

Another triumph for modern psychiatry.

Similarly, for the case of Dr. Peter Marks, a man whose depression was treated by all known medications, but who still killed himself.

One brings forth these examples because one wishes to emphasize that the media drivel about how great it is that Sen. Fetterman is getting treatment is so much drivel. Treatment for depression is not so great. And Fetterman’s chance at recovery is very small indeed. After all, his depression is associated with brain damage. 

Speaking on CNN last week, Dr. David Scheiner explained calmly that he had no expectation that Fetterman would recover at all. Among Dr. Scheiner’s patients was former president Obama.

Anyone who is spinning the Fetterman breakdown as a positive, because it is showing people how to deal with mental illness, needs some help himself.

Writing in the Atlantic, Jen Senior explains that a United States Senator must be in constant communication with other people. Obviously, such is impossible for the brain damaged Fetterman:

As a senator, you can never not be on, in other words. Your life is an Ironman Triathlon of outward-facing obligations: constituent sit-downs, committee meetings, caucus lunches, votes on the floor, home-state parades and fairs and school visits and town halls and barbecues where you’re asked to don a puffy chef’s hat.

Techno gadgets make it somewhat easier, but in truth Fetterman is completely lost:

Illness, too, can be cruelly isolating. Fetterman was trying valiantly to adapt to a demanding, high-intensity job with closed-captioning at his desk and audio-to-text transcriptions of committee hearings; he carries a tablet that converts what his colleagues say into text. This technological wizardry might make his work easier to do, but it also sets him apart, accentuating how different his lot is from everyone else’s. I’m guessing it isn’t easy to experience this difference during every interaction he has—not when his condition is so new, not when he hasn’t had ample time to adjust.

It isn’t just that he has had to adjust. Others have had to adjust to dealing with his infirmities. In most cases they will go through the motions for a period of time and then turn away.

And then, Senior adds, Fetterman’s family is not with him in Washington. They have effectively abandoned him:

On top of this, Fetterman was spending his weekdays alone, apart from his wife and three children, who are still in Braddock, Pennsylvania. For most of the week, he doesn’t have his loved ones by his side, the people with whom he could safely pull off the mask. Instead, he had to perform all day long, then return to an empty home.

Now he is going to spend some weeks in the hospital. Senior is optimistic about his chances for recovery. I suspect that she is blowing smoke and that the junior senator from Pennsylvania will be obliged to resign his office before too long.