Trifecta!

The University of Chicago is a phenomenal place.  I had a once in a lifetime opportunity to attend a presentation of three- count them- three Nobel Laureates in economics this weekend:  Robert Lucas, Jr., Lars Peter Hansen, and James Heckman.  Moreover, I had the opportunity to spend some one-on-one time with Mr. Hansen at the cocktail reception that followed.  It was an amazing experience to have so much real intellectual heft in one room at one time...and an even more marvelous experience to be able to spend some time with Mr. Hansen.

Lucas spoke about the tremendous progress that the world has made since the industrial revolution (chart below), and pointed out that in Adam Smith's time, sustainable economic growth simply did not exist. And over the past 35 years, the per capita GDP of Asia has shifted completely over to the right.  He chided the Left's claim that income equality is THE MAJOR issue of our time.  "If Jeff Bezos has more money than I do, so what?"  The overall progress has been astounding. "We live in a lucky time," he said, "and it's going to get better.  If you really like equality, 1750 was your year," he joked, referring to the universally low per capita GDP.  

Heckman spent most of his presentation debunking the commonly held notion that Europe has more social mobility than the U.S. and showed that the U.S. pays a greater premium for education than European countries.  Denmark, in particular, provides free tuition because it has to.  There is no great economic incentive to pursue higher education.   Absent government transfer payments, there really isn't much difference.  Heckman also argued that the one place that government should spend money is in basic research.  "There is a huge return on that.  There is no return on police pensions."

Lars Peter Hansen talked about his work in risk and uncertainty and the limitation of models.  His slide of Mark Twain's quote that, "Education is the path from cocky ignorance to miserable uncertainty," was a succinct summary of his comments.  "Models are often very wrong," he asserted, and this notion has applicability in the current debate on climate change.

In my private conversation with him, I asked, "You said in your presentation that you had your own thoughts on the macro-economy, but then didn't elaborate.  What are they?"

"We are going to get back to historical growth levels.  Larry Summers is trying to argue that our economic performance is permanently altered and that we are in an era of secular stagnation.  He is trying to make the case for permanent stimulus [i.e. permanently bigger government].  I do not believe that."

After 6 1/2 years of a tepid, halting recovery, I came away with some optimism for the future.  And in any event, it was a tremendous experience to get the thoughts of three truly brilliant, world class minds.

I couldn't help but make the observations that Mr. Hansen won a Nobel Prize for what Yogi Berra recognized a long time ago, "It's hard to make predictions, especially about the future."

The King is Gone

I've been blessed with a wonderful memory.  I can selectively remember vivid and minute details of events decades after they occur.

I have a very clear recollection of watching Don Kirschner's Rock Concert in 1973 in which The Guess Who, Melanie and B.B. King performed.  All of them played so well that I remember that particular show to this day.

Of the three, the performer that enthralled me most was B.B. King with his rendition of "The Thrill is Gone."  That song remains in my top 5 songs of all time list to this day.

As I age, I'm piling up some regrets and the ever expanding bucket list.   Sadly, seeing B.B. King live was on that list and now it's not going to happen.   I made an earnest effort at it over the past few years but each time, a family or work obligation interfered.  Sigh.

I will leave it to others to appropriately eulogize and pay tribute to him and his contributions to the blues, to rock music in general, and to our lives.  But what most inspired me was not only his rise to stardom from being the son of sharecroppers to music legend,  but that he NEVER stopped.  Well into an age where many people have been retired for two decades or more, B.B. King kept up a full touring schedule, only recently slowing down to "only" 100 shows a year.  Sadly, in the last year of his life, he had to cancel some shows and in others, he began to falter.  But until then, he kept rolling, doing what he loved and what God gave him a tremendous gift for doing.

B.B. King, his guitar Lucille and his music left an indelible impression on me.  Rest in
peace.

Train Wreck

Illinois is dying.  People are fleeing the state in droves.  It has lost 300,000 manufacturing jobs over the past 15 years.  The state cannot pay its bills.  Its corruption is a national joke.  4 of the state's last governors have done time.

In the bluest of blue states--the state that gave us Barack Obama--a miracle happened.  The voters elected to dump the status quo and vote for a successful private equity guy to try to straighten out the mess.


I attended a Turnaround Management Association breakfast at which Governor Rauner spoke.  It was a breath of fresh air.  He spoke like a businessperson--focused, energized, and cognizant of the dire task at hand.  He wasted no time laying out the challenge.  Illinois has high sales taxes and the highest property taxes in the country and it is a bureaucracy dying of its own weight.   "The core challenge," he said, "is that the government is run for the insiders' benefit, not the benefit of the taxpayers." The default strategy of "wealthy people paying more is simply not going to happen."

Rauner talked about two fundamental problems.  First is lack of good management talent.  The state is rife with mismanagement, conflicts of interest, and inefficiencies and is especially lacking in IT.  The 800 lb gorilla in the room is its pension, which is enormously underfunded. Unfortunately, the pension had automatic COLAs baked in and a Constitutional provision prohibits the state from changing it except in case of emergency.  Rauner's plan entails maintaining the current pension benefit for current retirees and accrued benefit but to change the plan on a go forward basis for unaccrued benefits, which seems eminently fair and sensible.  However, that will entail a Constitutional amendment that will certainly be fought tooth and nail by the unions.

He evidently is close to Mitch Daniels, who got Indiana out of its mess.  "Living next door to you is like living next to the Simpsons," he joked.  But in other respects, it's not so funny.  Daniels asserted, "Illinois's hostility to business is dragging down the whole region."

Rauner, like a good executive, distilled his turnaround plan into a one page set of easily understandable bullet points.  I left feeling that there was an adult in the room and some hope.

A mere two hours later, the Illinois Supreme Court struck down a law to amend the pension system modestly, claiming it violated the Constitution, stating that "the state must pay" (even though COLAs exceed the inflation rate) and that  "The General Assembly may find itself in crisis, but it is a crisis which other public pension systems managed to avoid and ...it is a crisis for which the General Assembly itself is largely responsible."

Undeterred, Rauner is plowing ahead and will seek a Constitutional amendment and seek to implement a Tier 2 pension plan.  He did not see the law as going far enough.  In the meantime, Illinois is constrained.  Higher taxes will drive more taxpayers out and inhibit businesses from forming or coming to Illinois.

Rauner is seeking to uproot long entrenched symbiotic relationships between the unions and politicians.  Politicians granted fat pay and benefit plans.  Unions elected them and kept electing them.  It was a nice, comfy relationship.

Until we ran out of money.

True Artists

 A little bit ago, I wrote a post that contrasted the films The Imitation Game and Mr. Turner because I was interested in the genius behind their subjects.  Once again, I am compelled to do so, although this time the films are in documentary form.   I recently saw Seymour: an Introduction, an Ethan Hawke film about Seymour Bernstein, a piano teacher who abandoned his ascending playing career to teach piano.  I also saw Finding Vivian Maier (now on rental) about a photographer whose brilliant work was not discovered until after her death.

I was compelled to contrast these two individuals, and both gave me much to contemplate.  These artists had much to say about work, art, and life.  In Bernstein's case, we get to know him first hand through Hawke's interviews and filming of him.  Since Ms. Maier is gone, we get to know her (to the extent we can) through interviews with some of the people that touched her life, mostly the families for whom she worked as a nanny.

Maier was a complete eccentric and I couldn't help but wonder if she suffered from some neurosis that bordered on mental illness.  She apparently never married, did not appear to have any intimate relationships with any man or woman, and lived her life from job to job as a nanny.  She was intensely private, bordering on reclusive and was a hoarder (which got her fired at least once).  And there were hints she was sometimes abusive to her charges.  But she had this gift.   With her Rolleiflex camera, she took street photos, and had this marvelous ability to capture the essence of people.  Holding it at chest high, she captured ordinary individuals close up without the Hawthorne Effect (the phenomenon that subjects change their behavior when they know that they are being observed).   She never exhibited her work and she died alone and largely in obscurity.  While her work is deemed brilliant by many, she appeared to be a very lonely and tortured soul and never quite fitting in.  She seemed to have a passion for this art...and only this art, and worked only to support herself in this endeavor.

Bernstein, a man equally dedicated to his art, presents quite a different picture.  He is a man that seems at peace with himself and his life decisions to eschew performing to teach piano and live a simple life alone in a small apartment in Manhattan.  Seymour: an Introduction is an intimate portrayal of this man dedicated to his craft.  Hawke's film permits us to spend an afternoon with this wonderful human being.  He is easy and gentle and relates well to his students, who clearly revere him.  He is good humored and gentle with his students and at one point jokes with a student that it is against the rules to play better than him.  This film is about mentoring as much as it is the art.  and the message that accomplishment takes talent and enormous amounts of painstaking practice.  

The core of his philosophy was captured in a single, poignant quote: "When I was around the age of 15, I remember that I became aware that when my practicing went well, everything else in life seemed to be harmonized by that. When my practicing didn't go well, I was out of sorts with people, with my parents.  So I concluded that the real essence of who we are resides in our talent, in whatever talent that there is."

The difference between the two subjects is stark.  Spending an afternoon with Bernstein would be a joy, a dinner with Ms. Maier would likely to be awkward and difficult.  Bernstein forsake his career to help young people find their talent.  Maier used caretaking of children to focus on her own art, and indeed, was sometimes abusive to them.

But the two shared a striking similarity in one key respect---the need for solitude.  Vivian Maier's was more of a misanthropic, almost reclusive type.  Bernstein's came more naturally, I think.  But Hawke's film does not delve into Bernstein's relationships at all, so we don't know whether Bernstein was ever married or lived with anyone.  We just know (and he says this explicitly) that solitude was important to him.

Bernstein himself says that "monsters" are capable of having extraordinary talent and ability.   There nasty and incorrigible people that are unbelievably talented and creative.  (See, e.g. Mr. Turner) Clearly, Maier had a dark side.  But Bernstein evidences no such darkness.

But that leaves me with the question of whether true artists need to be solitary, of whether the art takes over so much of their soul that it leaves little room for someone else.   Or whether that time alone is needed for creativity or to synthesize and process the hours of practice and devotion.

In any event, these are both fabulous documentaries with interesting subjects and best seen back-to-back.

Bibi and the Iranian Bomb

When he campaigned for the presidency, Barack Obama promised that he would (a) talk to any dictator without precondition, and (b) take a more multilateral approach to foreign policy than his predecessor.  Faced with the most important foreign policy issue of our time- the Iranian nuclear program- president Obama has shown that he is willing to talk to dictators, but will shut down the voices of our key allies, especially the one ally that has real skin in the game.

The White House threw an absolute hissy fit over Israeli Prime Minister Netanyahu's address before Congress last week and acted as a six year old that sticks his fingers in his ears and hums to drown out every single word.

That Prime Minister Netanyahu isn't in a full fledged panic is a testament to his self restraint.  He is faced with a regime that has vowed on several occasions to "wipe his country off the map," and has repeatedly defied international pressure to halt the means to do so.  Most troubling for him, he has been repeatedly snubbed by this Administration, told he must roll back his borders to the pre-1967 borders, all while asking nothing of substance from the Palestinians.  And now he is being told by President Obama, "Trust me.  I guarantee if it's a deal I've signed off on, it's the best way to prevent Iran from getting a nuclear bomb."

Right.

What does Bibi have to go on to convince him that Obama's assessments are correct and that his negotiating tactics produce satisfactory results?

•  Pushed the "reset button" after Russia's invasion of Georgia and promised "more flexibility" after the 2012 election on nuclear matters. Putin responded by ramping up military modernization and invaded the Ukraine.  Next, the White House dismissed Russia as a "regional power acting out of weakness" in its incursion of the Ukraine.  Today, Russia threatens the Baltics and is carrying out simulated attacks on NATO ships.
  
• Dismissed ISIS as the JV team and declared them not to be Islamic (see link to Atlantic article to the contrary) (http://www.theatlantic.com/features/archive/2015/02/what-isis-really-wants/384980) .  Today, ISIS controls huges swaths of land in the Middle East and is now linking up with Boco Haram in North Africa.   It continues unabated on its orgy of murder and mayhem and is now on a campaign to destroy irreplaceable historical artifacts that are part of the birth of human civilization.

• Labeled Assad a "reformer" before he used chemical weapons on his own people, and did nothing after that self declared red line was crossed. 

• Without asking anything from the Castros, reversed unilaterally and without debate, moved to restore diplomatic ties with Cuba and declared that ""What I know deep in my bones is that when you have done the same thing for 50 years and nothing has changed, you should try something different if you want a different outcome."  Cuba immediately responded by delivering a list of its demands on us.

Worse, in an unstable country (which instability the US facilitated), we demonstrated that we could not even provide adequate security FOR OUR OWN PEOPLE.   Can we blame Bibi for wondering whether an Obama deal with Iran will be adequate to protect HIS people if we will not do what is necessary to protect our own?

Netanyahu raised substantive legitimate issues - leaving infrastructure in place, inadequacy of monitoring and a sunset provision.   Obama, in his response, dismissed the entire speech out of hand and addressed none of these issues.

In yesterday's New York Times, we learned that even the French don't like the terms of this deal.  The French?  The French are advocating a tougher stand?

Yet Obama continues to run after the mullahs like a lovestruck teenage girl.  

In each case---Russia, Cuba, and now Iran, Obama's opening move was a huge concession with no quid pro quo.  With Russia, he scuttled missile defense in Eastern Europe.  With Cuba, he opened diplomatic ties.  With Iran, he loosened sanctions.  All in the hopes that these tyrants would be nice and reasonable.

The results have been predictable....and frightening.

Bibi and the Israeli people should be scared out of their wits.

Choking Freedom

President Obama has had a great couple of weeks.  With his pen and his phone and without any debate or any input from the representatives of the people, his minions continued to push and bully, take away our freedoms and affirm his commitment to "fundamentally transform America."  Using the administrative apparatus of the State, Obama did another end around, attacking business and the Second Amendment.

• Congress has effectively blocked gun control legislation, so Obama turned to the ATF which decreed that a popular form of ammunition used in hunting (5.56mm steel tipped bullets) are deemed to be armor piercing and therefore banned.  This, despite not a single fatality suffered by a law enforcement agent from this type of ammunition in more than 10 years.
• HHS and the Department of Agriculture put out statements urging people to eat less beef, due to environmental sustainability issues.  Of course, other environmentalists have been urging us to eat less fish because of overfishing.  Enjoy your alfalfa sprouts, folks.
• And the biggie--- the FCC declared that it had jurisdiction over the internet and adopted "net neutrality" rules contained within a document that is in excess of 300 pages (which the FCC has not even released yet).  Except for a few George Soros sycophants, there has been no outcry over mismanagement or unfairness over the internet.  The internet, not Obama, has fundamentally transformed America and many business and technological innovations have arisen from it----remarkably with no government assistance or interference whatsoever.  No longer.

The Obama administration has created mechanisms to wield a club in three critical areas:  finance (Dodd Frank), health care (Obamacare) and communications (Net Neutrality).  Big Brother, through the apparatus of untouchable and unaccountable bureaucracies now hold tremendous sway over key areas of our lives.   Most pernicious are provisions that grant enormous power to create rules that we didn't even get to vote on or debate.  They are handed down by fiat.  

This is truly a frightening time for the Republic. We now have the president that the founders feared-- a Latin American type dictator that has contempt for the representatives of the people and for us.  

Not surprisingly, Rand Paul won the straw pole at CPAC.  That gives us some hope.  Paul's ascension tells me that the libertarian wing of the Republican party is gaining strength at the expense of the religious right and that, I think, is a positive development.   While I do not think Paul could carry the general election (and I think he is wrong in his isolationism in foreign affairs.), his showing tells me that there is a strong current that values individual liberty over the Big Brother nanny state in America.

I am happy I can still blog without an FCC license.  That may not be the case in the future if the Obama crowd prevails.

Narratives of the Left

The Left does not have a monopoly on distortion by any means, but it seems to be willing to play that game with a brazenness that would destroy the careers of most any conservative.  The false claims that Brian Williams served up reminded me of the barrage of falsehoods presented as fact to fit the story they want to tell.   And it's not a single incident-- it's a whole litany.   As a conservative writer and thinker, I am more that happy to argue with any progressive on fact and evidence.  But when narratives are simply MADE UP,  we conservatives end up spending more time refuting simple facts instead of having a substantive debate on issues.   When you string these incidents together, you see a disturbing pattern of many on the left that recount incidents as they would HAVE WANTED THEM TO OCCUR, not as they actually did occur.  Or, worse, as Barack Obama continues to do, put forth claims with absolutely no evidence to support them, and often with the knowledge that those claims are simply false.

• Hillary Clinton is the master at this.  She asserted that she came under fire on a tarmac in Bosnia and that was simply untrue.   Similarly, she asserted that she knew what it was to be flat broke, that the former first couple was deeply in debt and almost in penury when they left the White House.  While their balance sheet may not have been in great shape, Bill was capable of garnering a hefty income from his speaking engagements and Hillary received an $8 million advance from her book.  The Clintons have never missed a meal and probably never left the top 1% that is so reviled by the Left.
• "Hands up.  Don't Shoot."  This became the bumper sticker for the supposed epidemic of deaths of black youths at the hands of overzealous, racist white cops.  The trouble is, the Ferguson incident never happened that way.  It was pretty clear from the evidence that officer Darren Wilson was assaulted by Michael Brown and Wilson was duly acquitted by a grand jury.  Still the myth lived on in the media with the St. Louis Rams and other entertainers using that to make a statement.  There has been some research that shows some patterns of persistent racism (see, e.g. Marianne Bertrand and Sendhal Mullainathan on hiring), but that's where the debate should take place--on facts and defensible research--not on incidents that simply did not happen.
• Benghazi.  Susan Rice knowingly perpetrated a falsehood in the days after the Benghazi attack, putting forth the story that the attack was a reaction to a film, "Innocence of Muslims." We know that this simply  was not true, and that it was an attack planned and executed by Al Qaeda terrorists.  It was not spontaneous Muslim rage at this film.  Rice got it completely wrong (intentionally, I believe), yet holds the position of National Security Advisor.
• "Islam is woven into the fabric of our country since its founding."   That is the latest claim by President Obama in his over the top effort to detach Islam from the orgy of burning, beheading, raping and killing that is being perpetrated by some members of Islam in the Middle East and in Europe.   I must have missed that chapter in US history.   This is patently untrue.  Whether Barack Obama likes it or not, this is, and has been, principally a Judeo-Christian nation.  What makes this country special is that other faiths are tolerated and permitted to practice without any discrimination to speak of.   Yet to say Islam is woven into the fabric of this country is a patent falsehood.

In each case, we can have a discussion about the issue at hand--whether Hillary can empathize with the poor, whether and to what extend residual racism exists, whether Al Qaeda was truly on the run, and how extensive and pervasive is radical Islam in the Islamic faith.

Those are the real issues that need to be debated.  But it's hard to have an open and honest debate when you simply make stuff up.