Tuesday, November 18, 2008

Patton and Fast Times

I watched Patton a couple weeks ago. The DVD began with Francis Ford Coppolla on a couch. I had to fast-forward through it, pushing the button, since under the DVD's menu system, the interview was part of the movie itself, not a separate feature. As a result your dense correspondent was made aware, by force, that Francis Ford Coppolla wrote the screenplay. Patton is the triumphal story of a brilliant commander and seems to fit snugly in the camp of movies about great heroes in good wars. But it's also a Coppolla movie and foretells the darker depiction of war in Apocalypse Now. What connects them is insanity. The movie Patton is an absolute nut. He reads Rommel's book on tank battle tactics before going to bed. Looking over a great valley, he hears the explosions from the Carthaginians' brave stand against the Roman legions. Omar Bradley tells him, "I do this because I was trained to do it. You do it because you love it." The movie is full of great lines. During a tank battle, Patton shouts, "Rommel you magnificent bastard. I read your book!" The 1970s were the golden age of great movies about not-great people, and Patton, from 1970, marks the transition, bridging the tough, heroic World War 2 movies like Bridge on the River Kwai with the dark 1970s take seen in Apocalapyse Now or The Deerhunter.

I left Fast Times at Ridgemont High off of my five favorites list earlier this year. I don't know how this happened. I think memory loss and confusion may be side effects of Lunesta. Fast Times was on cable TV a couple weeks ago and it never gets old. The brilliance of Cameron Crowe is his subtle, documentarian's interest in getting the quiet stuff just right. In reference to an old teacher, one teenager says to another, "You had Deegan?" Mike Damone's lines, such as "this is great iced tea!" and "I come here for the strudel," are not funny lines, but they are absolutely right for the character, who is very sharply drawn, as are many others. I've come across others over the years who know every line in the movie. It's a concatenation of episodes and it's remembered for the funny ones and the sexual ones, but what really sets it apart is the artistic freedom given to the writers and actors to create vivid, subtle, realistic characters. An added bonus: Jeff Spicoli has two mostly mute pals. Look closely and they are Eric Stoltz and Anthony Edwards!

Fast Times at Ridgemont High (Widescreen Special Edition)

Tuesday, October 28, 2008

buy land?

This really seems like a golden opportunity to do something about sprawl. Land is cheap. Sprawl causes increased driving and pollution, undermines the fiscal health of towns and cities, and undermines the property value of existing homes. Buying exurban land would address all these very important issues, and address falling home prices at the same time.

The only possible argument in opposition is that increasing land prices would hurt the new home construction industry. But homebuilders are not buying land in this environment. They would much prefer to sell it. If any homebuilders holding land are recapitalized with money instead, and undeveloped land was being bought at above market rates by land banks backed by the federal government, the homebuilders would turn their attention to existing homes, to buy and improve. A fine, non-polluting activity, and one that would help out the owners of those existing homes, a large group of people who have been getting socked with declining equity for about 4 years. I don't think the banks would mind seeing a rise in home prices either.

Friday, September 26, 2008

Proceed with Bailout and have Toll Brothers rebuild North Philadelphia

I'm very disappointed that the bailout failed. What I think many Americans don't understand is that we have nothing approaching a free market in the United States. We have a regulated, mixed economy in which government agencies provide many services, enfranchise businesses to provide many services, regulate businesses in an enormous variety of ways, and step in and save businesses when deemed necessary. Obviously, the size of this bail-out shows that huge mismanagement has occurred. Placing blame for it will be a fun parlor game for many years. But the credit crisis can be solved with this bold dramatic step. If the government also takes steps to improve the real estate market, they would not have to deploy the full face amount of the bailout and the investments they do make might well be pretty good ones. But the success of the legislation will itself have significant ameliorative effects on the credit market.

To improve the real estate market they should read my entry of January 26, 2008. I'd like to see the government buy some land and shrink new home development in overbuilt places like Las Vegas and Phoenix. That would be hugely helpful to existing homeowners and their creditors. Even if they bought the land someone like Toll Brothers has on inventory. I'd like to see them put Toll Brothers to work re-building North Philadelphia.

Saturday, September 20, 2008

Glass Steagall is not the Issue. Economic Fundamentals are the real story.

There's a lot of talk now about how John McCain is particularly ill-equipped to lead the country out of the current financial melt-down because he and Phil Gramm were proponents of deregulation and deregulation, including Gramm's dismantling of the Glass Steagall act that separated commercial from investment banking, is what got us into this mess. There are two main problems with this argument. First, Wall Street has been highly regulated in the last decade. Eliot Spitzer's prosecutions, Sarbanes Oxley, regulation FD, have left the business neck-deep in red tape. For example, communications between different functions of the firms are tightly constricted, and employees need permission to make personal investments or accept positions on corporate boards. Second, Glass Steagall might have made things worse. Bear could not have jumped into the arms of JPM had Glass Steagall been in place, nor could Merrill have merged with Bank of America. Past mergers may have been responsible for averting other potential crises as well. Could Citi's or UBS's investment banking arms have weathered the storm without their banking parents?

So regulation and oversight sound good (and appear to have worked in the case of commercial banks), but their application doesn't necessarily protect us, as illustrated by the recent crisis.

The problem this time around was really pretty similar to what happened in the dot-com bubble. Investors had a great appetite for a particular category of investment, in this case structured finance including mortgage-backed securities, and so Wall Street provided a great amount of it. The bizarre twist in this case was that a lot of what turned out to be rubbish was not equities, bets on promising technology, but AAA-rated debt. That made this bubble more toxic than the last one. Another realization that didn't really come up in the dot-com era: broker-dealers hold a lot of inventory and can suffer significant losses as a result.

The problems occurred in the unregulated "structured finance" realm rather than in the regulated world of corporate finance. One response would be to demand the kind of transparency and disclosure of structured entities that is demanded of public corporations. After all, if billions of dollars are being invested in them, the cost of disclosure might be worth the benefit. This might help, and we should probably do what we can, but it's safe to say it won't solve the problem. When investor appetites are in play, securities will flow and when the good stuff is gone, the junky stuff will be conjured up. The problems were flawed science, hopeful investing, and old-fashioned spin-meistering. These things can't be stopped.

So what ought to be done? First, a litle more diagnosis.

The root of the problem is the distribution of income. Wealth was quickly accumulating in the newly global investor class and it wound up spilling into these instruments that looked conservative, but in fact relied on a healthy American middle class. This group didn't exist anymore.

The US response to anemic economic growth was to keep interest rates really low. Growth was anemic because the American consumer saw no growth in earnings. Low interest rates permitted borrowing and grew asset prices in real estate, as well as sustaining politically presentable levels of consumption growth. Beggars can't be choosers, and this debt-based economic growth was all the US could muster.

Can anything be done about the skewed distribution of income which is essentially a technological phenomenon? Well, the appropriate public policy response is to recognize that economic growth as well as the basic health of a society depends on broad-based prosperity. If the dollars are flowing to corporations and the wealthy, tax them and make the middle class better off with free popular services that benefit everyone such as education, health care, infrastructure.

Historically, societies marked prosperous times by building great, lasting things, like universities, city boulevards, museums, skyscrapers. The prosperity of the 1990s and the more narrow prosperity of the mid-2000s didn't yield much public manifestation. I think that's the root of the problem here. The wealth wasn't shared. And as Obama says, the poverty trickled up.

Friday, June 27, 2008


I've read the new biography of James Polk, by Walter Borneman. It's a great read, and it's a long-overdue effort to explain how it was that Polk was able to accomplish so much in such a short period of time. What it comes down to is that Polk knew exactly what he wanted to accomplish but also that to get it done, you need to be shrewd and indirect. That's the dark horse strategy.

Just to take one example, for many years before Polk, the US and the British disputed sovereignty over a large area called Oregon, including, I think, what is now Oregon, Washington, and British Columbia. He campaigned on a Jacksonian expansionist platform, and implied that he supported the aggressive Westeners' slogan, "54-40 or fight," a reference to a latitude at the very northern end of the disputed territory. Once in office, however, he said that it was his duty to stand by a US offer to the British at around the 49th parallel, or a little south of it in some instances. So he gave the British an opportunity to accept this compromise, based on his need to honor an American promise. When the British negotiator said no, Polk said, fine, that offer is now off the table.

Many Americans were worried about war with the British and were eager to make counter-proposals. Secretary of State Buchanan was especially anxious to engage in new negotiations. (Another element of the dark-horse philosophy: keep your enemy, Buchanan, in the administration and keep your hands on his neck at all times. Buchanan was undermining Polk right and left, but Polk never fired him. Just kept slapping him down.) No communication with the British took place, and the British negotiator ended up getting in trouble for failing to get a deal done, and risking war. Ultimately they came back with a proposal like the one they had rejected, but a little more favorable to the US: the famous 49th parallel. Polk asked the Senate for advice and consent. They said fine. Oregon and Washington were then part of the US.

What interests me about this story is that an administration remembered for its aggressive postures in fact accomplished its aims through a careful communications strategy, encompassing a calculated obfuscation about Polk's position prior to the election and then a careful couching of the US position once he took power. It was this kind of poker-playing that got him elected in the first place and then permitted him to accomplish what he did in his four-year term.

Thursday, March 27, 2008

Five Favorites

On facebook, there's an application called Flixter that asks you to name your ten favorite movies. I did it and nobody noticed. I, however, was pleased with the list so I will reproduce it here, but with commentary, and a shorter tougher to make list. It occurred to me that these favorites are also products, so I've linked to amazon.com for your convenience!

Saturday Night Fever

How can you not like this one? The whole movie rides effortlessly along the seam between guilty-pleasure cheesy entertainment and cinematic glory. The music is cheesy pop but brilliant cheesy pop. The star is a television star in the tradition of David Cassidy but revealed in this movie to be a really good dramatic actor. The plot is a hackneyed dance contest and a hackneyed struggle to overcome class. But the sturdy story does the job: the local dancing talent isn't bad at all. The two-bit pals perfectly set off the star power of the king of the dicso, and the group's desperation is beautifully illustrated in a harrowing action sequence on the Verrizano Bridge . It's a great film from talented, unpretentious director John Badham.

Friday Night Lights

As a football fan, the topic - football is life itself for small-town boys in West Texas - interested me a lot, and I bought the book. But I didn't even get half way through. The kids just didn't come off the page and become three-dimensional people for me. But boy do they in the movie. The boys and the coach really mean it on the field and their home lives are tough too, with embarrassing atypical families, and not a cliche in sight. The action is extremely well-filmed; the football is riveting. The no-stars casting and naturalistic dialog make it feel real, and it's very affecting. And then Tim McGraw, like fellow country musician Dwight Yoakam did in Sling Blade, delivers a tough dose of redneck authenticity.

Dog Day Afternoon

Listen to how people talk in this movie. Look at the rubber in the legs of that pizza man, excited to get onto the evening news, for delivering a pie to bank robbers at work. Look at how a gathering of earnest New Yorkers, some of whom have strayed off the courses prescribed for them, but all of whom are trying to do the humane thing, push each other into impossibly difficult circumstances on a hot day in a tense time on the busy dirty streets of striving, thriving, jiving Brooklyn. Sidney Lumet keeps things ultra-tense, but you get some levity too. I like a little levity.

Broadway Danny Rose

Woody Allen transitioned from great stand-up to funny comedy movies in the late 1960s and 1970s. Annie Hall, Manhattan, and others mixed in poignant commentary, took on some big questions, and wowed the critics, but for me, they weren't great movies. They didn't have plots, drama, characters you cared much about, and they showed a cloying insular world. I became a big fan of Woody's with Broadway Danny Rose. The Danny character is an inspired exaggeration of the characters Woody played in previous movies. He's a joker, a mannered little man, trapped by who he is, nervous, elaborately polite, forever trotting out the trusty conversation starters, and in an original twist, he's an ultra-loyal talent agent, delivering well-intentioned, half-way capable representaion to a group who brings new meaning to the word motley. With an elaborate plot, a nutty mass of blue-collar/gray-market Italian-American characters including a tough tawkin' Mia Farrow, it's the story of a man who can't help being a sentimental fool and his so-called friends, who can't not be who they are either. The movie is framed in a conversation among a group of comics reminiscing about Danny Rose, the legend. The device adds a timeless nostalgic quality to the story, as does the use of black and white film, although the cars and the clothes are pointedly tacky and contemporary.

Poseidon Adventure

Please don't lump this one with The Towering Inferno. Inferno isn't terrible but it feels like a sequel; you can smell a formula afoot right from the start. Poseidon is a big mainstream Hollywood movie too, with its alotment of big stars, has-beens, and up and coming cuties. The difference between the first and second disaster movie is huge though, like the difference between Rocky and Rocky II or Star Wars and Revenge of the Jedi. The actors show it when something big is being taken on for the first time; you can see the rage in their faces and the audience can feel it in their spines. I don't think Gene Hackman is going through the motions when he preaches to newly arrived passengers on a cold and overcast day at the beginning of the film or when he's leading his little party through the pits of hell at the end. Shelley Winters is one of the great actresses of the 20th century and she left it on the field in this one.

On board ship is the world, including a priest, a cop, and a hooker (no joke), plus old people and children. The ship is a marvel, just as you'd guess. But nature has other plans for our little microcosm! The test is harrowing, and the response to it invokes great themes: perseverance, faith, intelligence, sacrifice. It feels historic. It feels biblical. It's a big, juicy drama with a great cast.

Friday, February 1, 2008

Memorial Day

On the Sunday before Memorial Day of this year my wife and I went to a cookout in New Rochelle. I was playing a cd in the car as we pulled away from our house. It was country or jazz. “I feel like rock n roll,” she said, “on the radio.” I noticed we were both wearing blue jeans, and I hoped her desire foretold a day or two of youthful fun.

I was in a different car, our Volvo, the next morning, when I loaded up our dogs and went out for my morning coffee. I remembered my wife’s preference from the day before, and tuned into a new station. I think they played Van Halen for the first leg of my outing. I don’t know hard rock too well, but it wasn’t bad, and I thought I’d stick with this station for the time being.

Loaded up with hot coffee, dark and sweet, from the Bagel Boys, I headed on to the video store. We got shafted earlier in the weekend with all the new releases we wanted gone when we stopped by after dinner. It was actually pretty stunning because they had about 25 empty cases of each one on the shelves. You’d think that would be enough of The Good Shepherd, say, but it was not. We love the new releases around here, I guess. A morning video run seemed like a savvy answer. Besides, what’s better than a little early beat-the-traffic tooling around with three dogs and a hot cup of coffee?

I took a right after the coffee, turned the radio back on and “Piece of My Heart,” was just getting started. “… and didn’t I give you everythang… that a woman possibly caaan?..” I turned it up a little louder. It was raw and real; she meant "everythang." It was a gorgeous morning too. No traffic on route 35. The mastiff sat in the back seat and pressed her rugby ball head against my right shoulder while I drove. The dogs love routine and this is what we like to do. They get a little down if the errand running goes past a half-hour or so.

I screamed along with Janis for another three minutes. Then they played, “Already Gone,” the Eagles song. I thought, what a good station. It’s a great song, not a classic that’s worn out a groove in your brain, but a familiar goodie. The sentiment is I don’t want you either baby and who can’t relate to that? “I will sing this victory song!”

But victory was not to be mine. Blockbuster opens at 10 am as it turns out. You can return videos in the slot, and I had to content myself with that. My hope of picking up an evening’s entertainment with a painless morning car ride had ended at 9:15 am.

Steve Miller made it all better. The chorus of The Joker is dull and overly familiar. I’m a joker, I’m a smoker, yeah yeah yeah. But the song starts out with the some wiggy stuff: “Some people call me Maurice because I speak of the pompitous of love.” I read an article about Steve Miller once that made me admire him. As I recall, he moved to San Francisco in the late sixties as a business proposition. He was a good blues guitarist and knew that the hippy bands there would need players who could actually play. His plan worked out well. So I enjoyed the Joker. Gimme Three Steps came next. My mood stayed fine although that one is doesn’t hold up all that well for me.

I arrived back in South Salem and took a left off the state route 35 onto Bouton, the same road where my wife said she wanted to hear the radio. Gimme Three Steps was over and the most richly produced drum beats I know of started to pound. It was Bruce Springsteen doing Born in the USA. Bouton Road goes up over a little mountain so its early stages give you a chance to engage the motor. And up over the mountain we went. I love how Born in the USA is a patriotic-feeling rock n roll anthem and a protest song. Inclusive and incisive at the same time. Quite a trick. I was rocking too.

We came down the moutain’s other side and cars were accumulating at the T, about 200 feet from my house. Six cars stopped at the yield sign, with someone at the bottom of the hill holding everybody up. I squinted and leaned forward to see. Suddenly, three men in tank tops came around the corner and charged up the hill. It was a race; the Memorial Day 10-K. The top guy looked like he was about 17 but two men breathing hard on his left and right were in their middle or late twenties.

The mastiff went nuts. Poor old Penny, our mutt, who’s 17 herself, had to scramble out of the way. Magda, 180 pounds and a deafening barker was drowning out Bruce and trying to scare the crap out of all the racers. They chugged by my car, which was literally rocking, heroically working the hill. A whole town’s worth of runners. After the leaders came the middle-aged majority, 30 men and women in better shape than I. Then the men with baby carriages, then a few hardy elderly. Penny joined the barking. So did our Shih Tsu. Their rage is contagious, and they show no mercy for the weak or old.

At first I was embarrassed by the barking, the fury, the fogged up windows. But then I thought: this is applause. They love this. I do too. The Memorial Day racers are reminding us to remember. I was missing the good song, but holidays are like that.

Saturday, January 26, 2008

The Right Stimulus Package

In the United States we have built too many houses in the last five years. The culprit here, in part, is a group of big public corporations like Lennar and Toll Brothers, with plenty of access to capital. Mom and pop construction companies would have had the capacity to slow down when demand tapered off after 2005 or so. But public companies need to keep up their sales in order to keep their stock price up.

The first couple years of the millennium were great for them, because demand for new houses was very strong. There was a notion afoot at the time that a single family residence was a great place to park your money. And if a $500,000 home was a good investment, why not build a million dollar one? Farms and other undeveloped properties two hours outside of major cities were subdivided a fresh batch of 3000 square foot colonials was harvested. The boom lasted longer than expected, and when demand for new houses started to peter the construction boom was sustained by the pernicious financing experiments we've heard so much about. Prices weren't going up anymore but houses were still getting built and the developers had to find a way to sell them. Why not partner up with mortgage providers and work out some way to get somebody's name on the deed. The mortgage banks needed to keep things moving too. Credit standards came down, and the houses got sold.

The economic consequences of this run-amok home construction are manifold. One direct victim is the new home construction industry, which is clearly in a deep recession. An indirect consequence of the excessive construction is a declining price for existing homes. A plethora of empty houses and uncertainty about the direction of prices make this an awful time to sell any house. When people can't sell things they want to sell, a lot of potential transactions are unconsummated. Geographically wider metro areas make for more traffic and longer commutes. Oh and by the way our transportaion "system" is emitting increasing amounts of carbon dioxide into the atmosphere and warming the earth.

Can the government do anything to help the market for existing homes? It can and it should. Home prices could be supported by taking some developable land off the table. The numbers are not easy, but I think you could make a difference by pouring fifty billion dollars into state land conservation programs, using matching grants, and letting the states aggressively acquire land around overbuilt metro areas, in an effort to concentrate development. The "downside" here is that new home construction will not be helped by less land and higher land prices. But the downside is an upside in my view: sprawl is terrible for the environment! New home construction on the outskirts of huge metro areas like Phoenix is a terrible idea, and public policy should discourage not encourage it. Conserving land will put dollars in the wallets of owners of existing homes and believe me, they could use a hand, as could our planet.