*michael parekh on IT*

ON AMERICAN DYNASTIES

ALL IN THE FAMILY

Only a couple of days after my ruminations on the role of dynasties in American politics, I come across this op-ed piece by Nicholas Kristof in the New York Times.  He starts out by stating:

"Does it diminish American democracy if we keep the presidency in the same two families that have held it since 1989?"

Which leads to some interesting math:

"If Hillary Rodham Clinton serves two terms, then for 28 years the presidency will have been held by a Bush or a Clinton. By that point, about 40 percent of Americans would have lived their entire lives under a president from one of these two families."

And some interesting questions:

"Wouldn’t that make our democracy seem a little, er, Pakistani?"

Not to mention a fascinating observation:

"We Americans snicker patronizingly as “democratic” Sri Lanka, Bangladesh, Pakistan, Singapore, India and Argentina hand over power to a wife or child of a former leader.

Yet I can’t find any example of even the most rinky-dink “democracy” confining power continuously for seven terms over 28 years to four people from two families. (And that’s not counting George H.W. Bush’s eight years as vice president.)"

Which then leads to an out there web-site:

"A tongue-in-cheek Web site called Bush-Clinton Forever is already proposing Jeb Bush in 2017, Chelsea Clinton in 2025, Jeb Bush’s son George P. Bush in 2033, Chelsea Clinton’s husband in 2041 and George W. Bush’s daughter Jenna Bush from 2049-2057."

There's at least a book in all this, if not feature-length documentary.  Someone call Michael Moore already.

ON SHIFTING WINDS FOR POLITICIZED NEWS

BOOMERANGS

There's a timely piece in Media Matters titled "Fox News is in for a very tough 2008", that's worth reading since it provides a good review of how for-profit media organizations tie their fortunes to politicians and political trends for ratings, and then live or die by the cyclically of their political fortunes.

Here's how the piece sets it up:

"Bottom line is that Fox News is in for a very rough 2008. And the umbrella reason for that is quite simple: Eight years ago the all-news cable channel went all-in on the presidency of George Bush and became a broadcast partner with the White House..."

"The point is that Fox News years ago made an obvious decision to appeal almost exclusively to Republican viewers. The good news then for Fox News was that it succeeded. The bad news now for Fox News is that it succeeded..."

Amongst the head-winds faced by Fox News, is the following:

" D) The Democratic candidates' blanket refusal to debate on Fox News during the primary season."

Which has lead to a ratings drop vs. CNN in this election season:

"The most obvious signs of Fox News' downturn have been the cable ratings for the big primary and caucus votes this year, as well as the high-profile debates. With this election season generating unprecedented voter and viewer interest, Fox News' rating bumps to date have remained underwhelming, to say the least.

For instance, on the night of the big New Hampshire primary, CNN, which habitually trails behind Fox News in the prime-time race, attracted nearly 250,000 more viewers than its top competitor, marking a changing-of-the-guard of sorts."

This has all of course resulted in good things for CNN:

"No wonder CNN's so giddy these days. Here's the spin CNN president Jonathan Klein put out following its New   Hampshire ratings win: "There's a freshness and exuberance to our coverage that the others just aren't matching. ... Fox almost seems downright despondent in their coverage."

I wouldn't cackle too loud if I were CNN though. 

They've done their fair share of taking sides on explosive political issues on a persistent basis in the name of "news" and good "journalism". 

One has to look no further than Lou "Broken Borders" Dobbs and his relative ratings success, that has been earned at the expense of an irresponsible poisoning the debate on immigration with barely concealed racism.

This of course has been condoned and encouraged by the senior management at CNN and Time Warner, both explicitly and implicitly.

If what's happening to Fox News/News Corp. is any indication, these cycles will likely turn for CNN News as well, over time.  The immigration issue is likely to be a big contributor to the Republican party losing the Presidency.  And this is sad for me to observe as a moderate Republican.

The political winds are shifting to the center.  For profit news organizations ignore them at their peril, and of course risk to their shareholders.

DISCLOSURE:  I've personally boycotted watching Lou Dobbs for over two years now.  I also remain a reluctant shareholder in Time Warner.

ON A SPECIAL AMERICAN MOMENT

A CRITICAL DIFFERENCE

It was tough not being affected by the endorsement of Barack Obama by senior Democratic Senator Ted Kennedy, and Obama's acceptance speech, regardless of one's political leanings.  The New York Times, in an article titled "Camelot '08 overshadows Bush Speech", put it as follows:

"The day began in Camelot and ended in Southfork.

Viewers on Monday were treated to a rare look at three dynasties working out their psychodramas at once: In his final State of the Union address, President Bush, the rebel Texan who defied his father, struggled to avoid the gloom of recession that darkened his father’s final days in the Oval Office.

On the campaign trail, Senator Hillary Rodham Clinton tried to patch over the pricklier parts of her husband’s legacy, while in Washington, the Kennedy clan sought vindication — and renewed vigor — by passing the torch to an adopted heir."

Both speeches are impressive indeed, both in their passion, their technical elegance and sparkling delivery.  And they're worth the half hour or so it'll take to watch them (links below).

But as a first generation American, I couldn't help but be touched by this observation by the New York Times:

"...the image of Caroline Kennedy and Senator Edward M. Kennedy anointing Senator Barack Obama as the true successor to John F. Kennedy.

That tableau from a rally at American University, shown over and over throughout the day, was powerful and also poignant — the camera showed all too vividly that in passing the torch to Mr. Obama, the patriarch of the Kennedy clan was bypassing his own scions."

Despite  our country's unique history and system of government, America is no less susceptible to dynastic political leadership than any other country in the world, developed or developing.

We have our own political dynasties, be they the Kennedys, or the Bushes, the Gores, and of course the Clintons, who aspire to have their own members carry the baton of political leadership and service.  And this is just as prevalent in so many other countries with political systems very different than ours.

But we have rarely seen the passing of the torch to someone outside the family for the greater good, not only in America, but in other countries as well.

It made today's endorsement all the more extraordinary to watch and ponder from this viewer's perspective.

Links:

Ted Kennedy's endorsement speech.

Barack Obama's acceptance speech.

ON AN UNSTIMULATING STIMULUS PLAN

SHOW-TIME

I'm still shaking my head at the speed with which the administration and the leaders of the House from both parties have been able to "come together" on a $150 billion plus stimulus package, and send it on to the Senate. 

The objective of course is to get $500 plus rebate checks to over a 100 million families by the summer, so that they may go ahead and "stimulate" the economy.  And to provide investment tax rebates to small businesses to the tune of $50 billion.

And of course, members of Congress in both houses and from both parties are trying to figure out how to add "infrastructure" investment incentives to the package that would benefit their various constituencies back home.

The Washington Post has a great piece  written by Economics professor Steven Landsburg, that gets to the heart of the matter:

"As a general rule, economic policies command bipartisan support only when they're incoherent."

It goes on to add:

"Take, for example, the fiscal stimulus package now bulldozing its way through the legislative process. It's poorly conceived, it's unlikely to work, and it's sure to do a lot of collateral damage.

The idea, we're told, is to stave off an all-out recession by stimulating both investment (through tax cuts for businesses) and consumption (through tax rebates to individuals). But hold it right there.

Investment and consumption are natural rivals.

Investment means converting resources into machines and factories; consumption means converting those same resources into TV sets and motorboats. In anything but the very short run, more of one means less of the other."

The piece goes onto explain how the terms of the package are at odd with the specified economic goals.

Of course, the real heart of the matter is that the real goals that matter here of course are political ones. 

The package is really designed to provide major political cover for both parties and the administration, as proof that they "really care" about the pain that people and businesses are going through in a Presidential election year.

Let's all try and keep that in mind, and use it as a filter, as we evaluate the earnest efforts underway by our various political representatives.

ON SOME TOUGH PRESIDENTIAL MATH

DOUBLES AND SNAKE-EYES

Following on the heels of yesterday's results in the South Carolina Democratic primary, and as we all get ready for "Super Tuesday" on February 5th, this simple conclusion is becoming more clear than ever, for supporters of both major parties.

And that is if the majorities of both parties, (aka "the Base") go with their gut instincts, as they likely are to do, they're likely to hand the Presidency to the opposing party in the General Elections in November.

The New York Times' Frank Rich explains this from the Democratic perspective, in an op-ed titled "The Billary Road to Republican Victory".  It's a very readable piece, with one of the punch lines being obviously that a Hillary nomination would be much easier for the Republicans to counter in the General Election, especially if they had John McCain as their nominee.

Ironically, the Republicans are likely to fall in the same trap as the Democrats, given that their majority (base), is likely to vote for Mitt Romney, who would be a much easier opponent for the Democrats to counter with Hillary Clinton as their nominee.

But amazingly enough, each party also has a strong "aspirational" candidate this election, that can also draw votes from Independents and moderate members of the opposing party.  Of course that'd be Obama for the Democrats and McCain for the Republicans.

So here are the predicted outcomes given the possible scenarios,

Base vs. aspirational from each party:

1.  Clinton vs. McCain:  good for Republicans.
2.  Romney vs. Obama:  good for Democrats.

Aspirational vs. Aspirational

3.  Obama vs. McCain:  tough for both Base and Independents.  The Base in both parties have two unpalatable choices, and Independents and Moderates have two pretty palatable ones.

But the most likely scenario given that mainstream, majority voters from each party are likely to be short-sighted and vote their embedded inclinations gives us this outcome,

Base vs. Base

4.  Clinton vs. Romney, bad for Independents and moderates from both parties.

Of course each of these four scenarios could look change a lot as they're paired up with various running mates to season and off-set the perceived negatives of each candidate to their base and Independent/moderate voters.

But it really is ironic that in one of the most interesting Presidential races in recent times, voting for the candidate that most appeals to the base of a given party is likely to be a positive for the opposing party.

I'm an optimist in most things, but as a moderate voter, I'm girding myself for the most likely scenario after the primaries and nominations are done, i.e., the last scenario above. 

Especially during tough, unsettled times, when human nature is likely to drive voters more by fear than hope.

P.S.  This analysis obviously precludes other "out-of-the-blue" scenarios like potentially Al Gore and/or Michael Bloomberg joining the race.

ON BEING BRITISH

DEFINING VALUES

This article in the weekend New York Times almost made me spill my tea. 

Titled "Britain looks for it's essence, finds punch lines", it's very amusing for anyone with the mildest interest in anything British.  The articles sets the stage as follows:

"It was a lofty idea: formulate a British “statement of values” defining what it means to be British, much the way a document like the Declaration of Independence sets out the ideals that help explain what it means to be American..."
"The proposal, part of a package of British-pride-bolstering measures announced by Prime Minister Gordon Brown’s new government over the summer, raised a host of tricky questions. What does it mean to be British?

How do you express it in a country that believes self-promotion to be embarrassing? And how do you deal with a defining trait of the people you are trying to define: their habit of making fun of worthy government proposals?"

The idea of course took a life of it's own:

"Nor did it help when The Times of London cynically sponsored a British motto-writing contest for its readers.

The readers’ suggestions included “Dipso, Fatso, Bingo, Asbo, Tesco” (Asbo stands for “anti-social behavior order,” a law-enforcement tool, while Tesco is a ubiquitous supermarket chain); “Once Mighty Empire, Slightly Used”; “At Least We’re Not French”; and “We Apologize for the Inconvenience.”

The winner, favored by 20.9 percent of the readers, was “No Motto Please, We’re British.”

My favorite though, was this bit:

"In the House of Lords, there was a surreal debate on the nonmotto, even after Lord Hunt of Kings Heath, an official in the Ministry of Justice, said flatly that there were no plans to have one.

“I do not think I will go down that route,” he said. “But I will say that the motto of Birmingham City Football Club is ‘Keep right on ’til the end of the road.’ ”

Maybe they should settle for "We're British".  Kind of says it all, past, present and future.

ON OVER-THE-TOP FINANCIAL FOLLIES

BELIEVE IT OR NOT

By now people are familiar with the broad outlines of the staggering story of a low-level, rogue trader being able to create losses of around $7.2 billion at Societe Generale, France's second largest bank.

If not, the Wall Street Journal has a good account of what's known so far about this extraordinary story:

"The rogues' gallery of banking has a new candidate for membership: 31-year-old trader Jérôme Kerviel.
In one of the banking world's most unsettling recent disclosures, France's Société Générale SA said Mr. Kerviel had cost the bank €4.9 billion, equal to $7.2 billion, by making huge unauthorized trades that he hid for months by hacking into computers.
The combined trading positions he built up over recent months, say people close to the situation, totaled some €50 billion, or $73 billion..."

But here's the part of the story that is the most astounding from my perspective:

"Société Générale Chairman Daniel Bouton declined to provide details about the exact positions the trader built up over the past months. But he warned: "Had we not acted swiftly, the loss could have been 10 times worse."

Ten times worse, i.e., over $70 billion dollars.  That's billion with a "B".

And it looks like the fraud may have been at least an indirect factor in the Fed taking the unusual step of cutting the discount rate by 75 basis points last Monday.

The New York Times article on this sheds more light on the story, and also explains why it was so unusual that this happen at Societe Generale of all places.  The firm had a major reputation as being a powerhouse in derivatives:

"It is a remarkable turn of events for Société Générale, which since the mid-1980s has built itself into a global powerhouse in trading derivatives like futures and options..."

"Until now Société Générale, unlike many Wall Street banks, had seemingly sailed through the turmoil in the financial markets with its reputation intact. The January issue of Risk, a monthly magazine about risk management and derivatives, named the bank its “Equity Derivatives House of the Year.”

It goes to show that no financial institution anywhere, large or small, is immune from random catastrophic risk. 

When all is said and done, there'll be a lot more to learn from this story, in terms of how and why this happened.  There's likely much more here than meets the eye.

This is a story we're going to see more of, in both book and movie form soon enough.  Maybe even a TV mini-series.

ON LESSONS FROM VIETNAM

A DIFFERENT TAKE

This post from the Wall Street Journal's "Informed Reader" blog, titled "The Real Lesson Vietnam Teaches about Iraq", is not the political partisan piece one might expect.  It actually offers a different twist on the subject:

"Vietnam offers guidance for the challenges facing Iraq, but the lessons are economic, not military, says historian Stephen Kotkin in the New Republic.

In a review of a new Ho Chi Minh biography, Mr. Kotkin credits Vietnam’s entrepreneurialism, falling poverty and rapid economic growth to its trading ties with China and South Korea. In the long aftermath of the war and U.S. withdrawal, both countries provided capital for businesses and a large market for Vietnamese products.

There are of course vast differences between Vietnam in the 1970s and Iraq in 2008. But Vietnam’s post-war experience suggests that regional economic shifts might have more impact on Iraq than anything the U.S. does there now.

Mr. Kotkin says there are some countries that might serve as Iraq’s China and South Korea. Turkey is growing fast and is close enough to fill the bill. As India’s economic influence broadens, it might become a key trading partner with Iraq. And China itself could be an important player in Iraq’s future.

Mr. Kotkin, a professor of history at Princeton University, makes no guarantees that these countries will serve that role.

But, he notes, the U.S. has become Vietnam’s biggest trading partner, which has the political side effect of encouraging reconciliation between the two nations. “Who foresaw such a turn of events during the apocalyptic 1970s, or the 1980s,” says Mr. Kotkin of Vietnam. “Impossible as it now seems, such a future may one day await Iraq.” – Robin Moroney."

Definitely thinking different.

ON SOME NEEDED APPLE CHEER

JOY TO THE WORLD

Here's about the only thing that can possibly make an Apple shareholder smile today*:

Can't get the damn song out of my head.

I'd buy "Hit me on my iPhone" on iTunes if it were available. 

The tune is rattling in my head even as I go through the spreadsheets on Apple's quarter just reported, and the quarters yet to come.

*See this Techmeme thread and the adjacent Yahoo! Finance chart if you're not sure why most Apple shareholders aren't smiling today.

If you're a shareholder, I share your pain.

ON A POSITIVE CHANGE IN SAUDI ARABIA

RAY OF LIGHT

Here's something I didn't expect to see quite this soon.  The UK Telegraph reports:

"Saudi Arabia is to lift its ban on women drivers in an attempt to stem a rising suffragette-style movement in the deeply conservative state.

Government officials have confirmed the landmark decision and plan to issue a decree by the end of the year.

The move is designed to forestall campaigns for greater freedom by women, which have recently included protesters driving cars through the Islamic state in defiance of a threat of detention and loss of livelihoods.

The royal family has previously balked at granting women driving permits, claiming the step did not have full public support. The driving ban dates back to the establishment of the state in 1932, although recently the government line has weakened."

That this is finally happening is important for a whole number of reasons, not the least of which because it represents a fundamental societal change long needed in Saudi Arabia.  It's a country where the government is based on a historic, but increasingly teetering balance between religious and secular forces.  And it's a country that's trying to figure out how to create social and economic opportunities for it's rapidly growing, young population beyond it's bounty of oil riches. 

As the article goes on to explain:

"Saudi Arabia maintains a strict segregation of the sexes outside the family home.

An unaccompanied woman must shop behind curtains and cannot hail a taxi.

Critics believe allowing women to drive would be the first step towards a gradual erosion of the kingdom's modesty laws. A woman would have to remove the traditional abaya robe to get a clear view behind the wheel."

The Economist earlier this week had a great piece providing a broader background on the world as seen from an Arab perspective going into this new century.  Here's a taste:

"IT IS not easy to be an Arab these days. If you are old, the place where you live is likely to have changed so much that little seems friendly and familiar. If you are young, years of rote learning in dreary state schools did not prepare you well for this new world.

In your own country you have few rights. Travel abroad and they take you for a terrorist. Even your leaders don't count for much in the wider world. Some are big on money, others on bombast, but few are inspiring or visionary.

These are gross generalisations, of course. Huge differences persist among 300m-odd Arabic speakers and 22 countries of the Arab League. With oil prices touching record highs, some Arab economies are booming.

The gulf between a Darfuri refugee and a Porsche-driving financier in Dubai is as great as between any two people on earth. Yet to travel through the Arab world right now is to experience a peculiar sameness of spirit. Particularly among people under 30, who make up the vast majority of Arabs, the mood is one of disgruntlement and doubt."

Remember we're just talking about the Arabs here, not the broader Islamic world in the Middle East in beyond.  We're not talking about Iran and Pakistan in these pieces, which are going through some of these issues as well.

The Saudi move on permitting women to drive, is but a tiny step forward that has yet to be taken.  But that it's being considered, is important to note in the broader perspective.