Wednesday, November 26, 2008


It's amazing how tiring continual pain is. I'm having a rheumatoid arthritis flare, which I'm convinced (despite my doctor's insistence that there's no relationship) is related to the damp, rainy weather.

It started last night - I reached out for something in the car and my hand (my right hand, of course, that being the one I use) went crazy with pain. Oddly enough, it didn't hurt when I used the hand, like to write, or drive, or even pick up heavy objects like full teapots; it hurt when I extended the fingers. This isn't something we do all that much, but once it started to hurt, of course I kept doing it to see if it was still as bad. (Don't ask. Also, people with arthritis learn pretty soon that an unworked joint is an unworkable joint.) Over time it settled into a throbbing ache in my right knuckle, which it's been doing pretty much continuously since, somewhat eased by chemicals. The knuckle is reddish and looks enlarged to me, although my rheumatologist regularly tells me I have no deformation in my hands. It isn't warm or sore to touch as the last flare was.

I didn't sleep very well last night, at least partly because I was waiting to see if my hand still hurt (even though I took Tylenol). The trouble with RA flare pain is that it does slack off from time to time; but when it does, you can't quite believe it, so you sit there wondering when it's going to start again. Today was rainy, damp, and chilly (50's), and I spent most of the day trying to get my hands warm. A cold aching hand is much harder to live with than a merely cold hand. Also, I've been having little spikes of pain in other hand joints, and even in my left hand; just my immune system going crazy, I guess. They last 30 seconds or so, so they're mostly just annoying.

Based on previous experience, I think this is beginning to ease off. I first wrote "chronic pain," but it isn't really chronic; "chronic" is constant. I had "chronic" before my first knee replacement and it was Much Worse than this. RA flares come and go, and in a few days it'll probably be fine again.
But after roughly 24 hours of it, I'm a basket case; I'm exhausted. As I think about it, the fact that I went out to lunch with some friends and walked 3 miles in the course of it may have some impact on that; but I should be able to walk 3 miles, in 2 segments, without becoming an amoeba.

I started trying to rate it in terms of the 1-10 "pain scale" Kaiser uses. Except that I can't remember Kaiser's stupid pain scale; they gave me a xerox when I had knee surgery but I threw it out. Their web site says "zero is no pain and 10 is the worst pain imaginable." A little Googling of "pain scale" brings up a number of blog posts from medical personnel who think the pain scale is garbage anyway, not to mention the fact that there are multiple pain scales. I give it a 3-4 (the initial spike was at least a 5, really nasty), whatever that is; I can work past it, but unless I'm doing something really interesting, the pain has some of my attention, and I'm always rubbing it to see if it will get better.

You do what you can, you take the pills, you keep things exercised, and it still does this. There Ain't No Justice.

Tuesday, November 25, 2008

Paulson's Bailout, Take Two

Some time ago, I explained why I think the credit markets are hosed up; one of my readers was even kind enough to say he thought it was well written and well thought out. In short, I think the banks aren't lending to each other because none of them knows what overblown totals in credit default swaps the others may be sitting on, so they're afraid to lend to anyone. If this sounds as though I think the banking system is insolvent, I'm afraid that's what I think these days.

So now Mr. Paulson has conjured another huge sum of money out of his top hat, only a quarter of which will come from the money Congress actually authorized. He's going to throw this money at the consumer lending industry, so people will be able to borrow again; he's doing this by promising to buy up securitized packages of car loans, consumer debt, credit card debt, etc.

I'm still not sure where he thinks he got the authority to print all this money. Congress didn't authorize it. Does the Federal Reserve really have the authority
to print up $800 billion just because the Treasury Secretary says so? I know they can increase the money supply to fight inflation but this seems out of line.

In my previous post, I didn't go into why people aren't spending money because, frankly, I thought it was obvious: the economy is in the tank, job losses are hitting levels not seen in nearly 30 years, mortgages are still resetting higher, everybody's 401K investments have lost 40% of their value, and there's no obvious end in sight. Nobody's spending, even if they still have jobs and can still afford their mortgages, because they're scared shirtless. So to speak. Not to mention the fact that all the credit card issuers (which, to be honest, is the main source of consumer credit in this country) have raised their rates and lowered their credit ceilings.

Is it really necessary for me to explain why offering to buy up bundled securities of credit card and auto loans isn't going to make the American consumer go back out and buy that flat-screen TV?? Apparently it wasn't obvious to Mr. Paulson.

Does Mr. Paulson honestly not understand that nobody is buying houses because house prices are still losing 17.4% a year (per today's Bloomberg article)? Who would go into debt for hundreds of thousands of dollars for an asset that may be worth less next year than what you owe on it? After all, he's supposed to be a brilliant investor.

I'm afraid my paranoia is getting out of control again. I actually just had the thought that Paulson is doing this (assuming he actually has a reason and isn't just flailing) in order to pump the government deficit to even more ridiculous heights, in a deliberate attempt to hamstring the incoming Obama administration's efforts to fix the economy. If I can't fix it, says Hank, it's not going to be fixed.

On the other hand, maybe he's just flailing. That would explain why he never explains what he thinks he's doing.

I flagged this post "we can do this better" - but I have to admit I don't know what we could be doing better. I'm just sure that everything I've seen the administration do to date has not worked, and has not worked for fairly obvious reasons, like being poorly thought out and badly designed. I still think we should force an audit of all the outstanding credit default swaps, publish the results, and let the chips fall where they may. It would destroy a number of insolvent banks; but they're probably going to die eventually anyway, and at least it would make clear where everyone stands.

Monday, November 24, 2008

More About Money

I haven't read them in awhile, but I have several collections of essays by Robert Benchley, the newspaper columnist and humorist from the 1920's and 30's. In a book called The Early Worm (Harper, 1927), his essay, A Plan to Stabilize the Franc, contained this tidbit:
It is much simpler for a nation to go on a budget than for a private family, because a nation never uses real money anyway. A nation says "Here are twenty million francs," or "Give me a hundred million dollars' worth of chips," and, if you push right up close to the counter and ask to see it, what do you find? A couple of theater-ticket stubs, a right-hand glove, and a piece of paper saying, "I.O.U. $100,000,000. . . . A. Mellon." There probably isn't $125 in actual cash in the whole United States Treasury at this very minute. And $45 of that belongs by rights to me, on account of the Government having disallowed my deduction for hotel expenses in my 1925 income tax."
Does that sound familiar? Here's more, from the same essay:
This system of dealing in dream-dollars, which seems to be the special prerogative of governments and large corporations, is called "Credit," and a pretty how-do-you-do it is, too. "Credit," as applied to you and me, means that we have until the fifteenth of the month to dig up the actual gold ore with which to pay our bills. But for a large corporation or a nation it means that, so long as the Treasurer can sign his name, they are on Easy Street. I sign a check, in a kidding way, and give it to Altmeyer's Meat Market. And what does Altmeyer do? Right away he presents it at my bank! And then hell breaks loose. Telephone-calls, registered letters, night-sweats - you'd think the whole world had gone money-mad. And I have to go and get a printing-press and print him his money in half a day.

But let Mr. Mellon sign a check for a billion dollars and no one even looks at the signature to see if it is genuine.
What amazes me about this is how little has changed in the 81 years since Benchley wrote that...


I'm still listening to the Planet Money podcast on NPR, and this week they'll be well worth listening to. They're doing an entire week's podcasts around the theme, "What is money?" And listening to today's interview with Niall Ferguson, the author of The Ascent of Money (a book I think I have to read), I began to get the weirdest question about the banking system. How is the banking system like a Ponzi scheme?

First, what is a Ponzi scheme? A Ponzi scheme is a fairly common scam (Colombia just had a bad one) which works because of the human urge to get something for nothing. The schemer (the original one actually was named Charles Ponzi) offers to double your money in six weeks, or some other outrageously high interest rate. So you and all your friends give him a lot of money; and six weeks later you get double the amount back. So you give him more money. What you don't realize is that the money you got back after six weeks came from the people who invested with him at 5 1/2 weeks. The Ponzi schemer keeps paying people back for some time, because satisfied customers are the best advertisement to bring in more investors. (If you have to invest in a Ponzi scheme, be one of the first. And don't reinvest.) At some point he judges that he has as much as he can pull in on this round, and he puts it all in a bag and skips town.

The point that Ponzi schemes have in common with banks is: they're both based on trust. You give your money to a bank, and you trust that when you want it back you can get it. And when depositors stop trusting that the bank will give them back their money when they want it, there's a run on the bank. Because at any given time, the bank doesn't have all the money that was deposited with it. It's loaned it out, and is collecting interest on it. (More interest than it's paying you.)

So is the main difference between a bank and a Ponzi scheme the fact that the bank actually intends to give you your money back, on demand, and the Ponzi schemer doesn't? Because in both cases, when you get money back, it isn't "your" money (in the sense that it's the same dollar bills you gave them earlier). It's money that someone else just deposited, which hasn't been loaned out yet. And when that person writes a check, the money that changes hands came from yet someone else.

Money is based on trust. Money is not the dollar bills in your pocket; it's your confidence that when you give enough of those dollar bills to the barista at Starbuck's, the barista will give you a latte in return. And it's Starbuck's confidence that when it gives those dollar bills to the barista as a salary, he'll be able to spend them on rent.


It hasn't all been politics lately. My husband and I went to Mendocino the other week, to celebrate his birthday; and I didn't even take the computer. No connectivity for three days. We drove up the coast on Highway 1, because it was clear and sunny; we stayed in Ft. Bragg, in Weller House, which used to belong to a lumber baron in the Good Old Days, and which is distinguished by the ballroom (paneled and ceiled entirely in redwood) on the top floor.

We spent 2 full days just poking around the Mendocino coast: we walked around Cleone Lake in MacKerricher State Park, and later poked through the park's fabulous tide pools. Even with a digital camera, it's remarkably hard to get a reasonable still shot of a hermit crab in a tide pool, because the only thing you can see about them is that they move. Next time I'll have to try video; I think my new camera can do video.

The next day we spent the morning in the Mendocino Coast Botanical Garden, wandering around checking out the fall plantings and trying to see some of the 4 species of hummingbirds that frequent the place. We drove into Mendocino and had lunch at the Cafe Beaujolais, then hiked out to the newly restored Pt. Cabrillo light station. They have an inn there, too. On a sunny warm calm day, what a wonderful way to spend an afternoon, to walk out to the point, gradually getting better and better photographs of the Fresnel lens. If you've never seen a Fresnel up close, on a sunny day, you've missed a treat - they shine like jewels in the light station tower. What a place this would be to stay if you want to be "away from it all", and yet you're just outside Mendocino.

The economy isn't being kind to the tourist industry here. We walked into Cafe Beaujolais and got a table, no reservation; I remember when you had to reserve 6 weeks out. We drove into Mendocino at 3 in the afternoon and got a parking place on the main drag. None of the restaurants we ate in was full; the Rendezvous Inn and Restaurant in Fort Bragg, where we ate Thursday night, had only 3 tables full, and the food was fabulous - this place is Zagat rated #1 in Mendocino County for food. The Rendezvous dining room is also fully paneled in redwood - another lumber baron leftover. An added treat: we could walk to it from Weller House.

Saturday night we got a surprise. Remember the ballroom on the top floor of Weller House? The manager of Weller House is a tanguera - she dances the tango for fun. And Weller House was the site of an evening of tango, with a couple of local people providing live music. This isn't the exhibition dance in Tango Forever, which I haven't seen - this is people who dance the tango for fun. They must have had 15 or 20 couples, too, some of whom came a considerable distance - it was quite an evening. The women who danced that night had the most sculptured calves you could imagine, tango is really good for the leg muscles! Most of them wore 3 inch heels, too. In fact, most of the women dressed up for the tango, in elegant cocktail dresses; the men, I'm afraid, were more casual. I saw one guy take off his running shoes and put his leather soled dancing shoes on over his white athletic socks. Sigh. The men generally danced very well, but style? No so much.

I watched them dance for most of an hour, just watching feet. The patterns are hypnotic.

Capitalists, My Eye

Now the election is over, we can look back at the mess in the economy. I see the latest members of the queue at the federal trough are the auto manufacturers. Bail us out, they cry; we're too big to fail. What's bad for GM will be really bad for the country. Give us money or we'll make a big mess when we fail.

But I have to ask: why is GM in this shape? Why are Ford and Chrysler in such straits? And the answer that comes to my mind is, because for thirty years they've all been making stupid, short-sighted marketing decisions. They've been going for the quick, easy buck, selling oversized SUVs getting nothing to the gallon. Their vehicles are junk, too; they routinely score below average on the Consumer Reports reliability scale. It's true that Ford has recently produced a couple of vehicles that score better; but I haven't seen a sign of it from GM.

Worse, they've actively fought attempts to require them to make more efficient (i.e. higher gas mileage) products. The reason it's taken 25 years to get the CAFE standards raised is because of the money the auto industry has poured into lobbying against it.

So Congress says, show us a plan and we'll consider a bailout. Now, this is uncharacteristically business-like for Congress; but I don't think it's unreasonable. There isn't a lender in the world (especially now!) who would hand out money without some idea of what the borrower planned to do with it, and how they expected to pay it back. And the auto CEOs have slunk back to Detroit.

I'll be very interested to see whether they present a plan as requested. I don't think they will, because I don't think they have a plan. I'm not the only one, either - I heard John Boehner, the House minority leader, was quoted on NPR the other day saying he'd been talking to the auto execs, and he didn't think they had a plan. It's very unusual for me to be in agreement with John Boehner.

Does this remind you of Henry Paulson and the $700 billion? Give us a lot of money and we'll fix things. They're tottering on the edge of oblivion and they can't be bothered to convene a strike team to decide what they would do with bailout money if they got it! We'll see what they present to Congress next week, but by God, if they don't have a business plan - three business plans, one each - they shouldn't get any money.

Wednesday, November 05, 2008

Conduct Your Triumph As A Funeral

The line is from the Tao Te Ching and the context isn't really relevant here because it refers to war. But it's how I feel.

Last night, as Obama's victory was being proclaimed, I checked my email, and received a blow. A man I've known since high school, probably my first true male friend (as opposed to "boyfriend"), dropped dead of a bilateral pulmonary embolism on Saturday. I've known him over 45 years; and now he's gone. We lost touch somewhat, over the years, as people do; but I knew that I could always pick up the phone and Bill would answer, and we'd pick up the conversation where we left it off. He won't answer any more. Why didn't I call more often? I don't have an answer.

I wish Obama all the best, and he'll need it; but I can't rejoice with him now. I have to mourn.

Tuesday, November 04, 2008

The First Black President

And when can we stop using the Jim Crow definitions of "African-American"??

Barack Obama is "black" only under the 19th century definition that "one drop" of "black blood" makes you black. I regularly drink tea that's darker than his skin color.

It is now legitimate to list yourself on the census as "mixed race", and that's what he is, and that's what a lot of people in California are. They aren't all mixed with white, either - I've known African/Japanese, and Hispanic/Chinese, and California has a whole lot of other couples of various backgrounds who have decided that the special person they wanted to marry was from a different ethnic background and didn't have the same color skin they had. My husband works with a guy in the Albuquerque office of his firm whose last name is Hispanic - and whose mother was Japanese. All these people are American.

Can we all just be Americans, please, and start worrying about the real problems?? (Yeah, I know this is hopeless.)

Election Day Wandering

It's 10:50 AM in Oakland, and I'm sitting in Spasso Cafe on College Avenue. In addition to Election Day, this is also House Cleaners Day, and I usually take the opportunity to walk down to the avenue and hang out. I stopped in at my polling place to say hi, even though I voted last week; and they gave me an "I voted" sticker, so I look politically correct.

The lady in the Chimes drugstore agreed with me that she's nervous about the election.

The gift shop called Heartfelt had a chalk board out front that said, "VOTE! Then step back, take a deep breath, and relax - it's a nice day!" (And it is.)

The elderly street guy, with the beard down to his belt buckle, swung his fist and said, "Landslide! Mandate!" and I said, "Damn straight it better be."

In front of Cole's Coffee, a man blowing across a coffee cup into the ear of a baby in a belly pack (mom, wearing the pack, was on the phone) asked me where my polling station was; he had an absentee ballot to drop off. I told him mine was pretty far away; he thought he'd seen one closer.

Waiting to cross the street, I stood next to 2 youngish guys, also wearing "I voted" stickers. We discussed where we'd watch election returns, and agreed we were all going to have to find a new hobby tomorrow.

Everybody's waiting for the shoe to drop.

Election Day

It's 9:10 AM on Election Day in California. I voted a week ago, so I'm just observing things today. I live about a block from my polling station in the music room of the local elementary school, so about 15 minutes ago I stepped out the front door to see if I could see a line at the polls. I couldn't see a line, but I did see a steady line of people coming back from the polls: early election day voters. It's a beautiful sunny morning, crisp and clean after a big rain storm, and everybody looked cheerful.

If you haven't voted yet, get off your butt. This is the biggest election in my lifetime and probably yours - what are you waiting for??

Saturday, November 01, 2008

Reality Check

For the last month or so I've been obsessing over the election and the economy to the point that I got almost nothing else done. Today I got my chain yanked; I got a reminder of what's really important.

It started so normally - my husband picked me up from a dress rehearsal, and we drove home on the streets because the freeway alternative was a parking lot, for some invisible reason. To protect as much privacy as possible, I won't name the exact location, and I don't know the names of most of the people.

Anyway, as we drove up this main street, I saw a woman in an orange-brown jacket, crossing the street in a crosswalk. We were in the right lane and she was past us, so we didn't slow.

Then there was a thump, and the next thing I saw was the orange-brown jacket draped across the right front fender of a small station wagon. I can still see it. The woman fell off into the street, and didn't move.

The station wagon rolled a little farther and stopped, and the driver got out.

As my husband pulled our car over to the curb, I dived for my cell phone, entered the password, and speed-dialed the police department emergency number. Then I waited. (Our local dispatch center is notoriously understaffed.) After 1 minute 40 seconds (per the call duration meter), I climbed out of the car and looked around.

I have to give my fellow citizens credit. There were at least 7 or 8 people out there. Five or six were gathered around the woman in the street: reminding each other not to move her, covering her with a blanket, feeling her pulse.
Protecting her. The rest had put out flares, parked cars sideways, and were very professionally directing traffic around the accident. One man had a cell phone to his ear, and I yelled, "I'm still trying to get through to 911!"

Eventually I got through (I estimate in about 2 minutes).
Since she landed in the street, the woman in the orange-brown jacket hadn't moved. Dispatch asked if she was bleeding; I yelled, "Is she bleeding?" to the group in the street, and relayed the "yes" back to the operator.

After that, response was very quick: first the nearest patrol team, then the ladder truck from the fire station, finally a pair of ambulances. One of the policemen asked me for a statement, and we adjourned to the patrol car to get his paper report form out of the rain. The police, fire, and EMT personnel scurried professionally around, and in about 45 minutes the whole area was cleaned up.

One of the officers told me the injured woman was alive when they put her into the ambulance. I was glad.

But this is a reality check. We Americans, especially younger ones, have an unspoken assumption that we're invulnerable and immortal. If we're older, we know we are neither, but we sometimes think, nothing will happen to me, I don't have time for it. But sometimes it happens anyway. I hope very much that everyone will come out of this intact (or at least, not permanently damaged); but the victim put a hole the size of her head in the car's windshield. And the EMTs took the driver off in the second ambulance, just to make sure she wasn't hurt.

You hear a lot of rhetoric from the anti-abortion zealots about the sanctity of life, as if once those two cells merge, the resulting entity has some kind of right to a full life, the threescore-and-ten or whatever we live to these days. It's because of that "Right to Life" statement in the Declaration of Independence, and it's baloney. It's a nice sentiment, but people get killed all the time, by disease, accidents, and by other people. Life is very uncertain; modern drugs save lives that used to be lost to pneumonia and measles and tuberculosis, and they actually cure many cancer patients these days; but traffic accidents kill 40,000 - 45,000 people every year, or over 110 people a day, every day. And you get no warning, and no chance to clean up those things you were going to get to someday.

I'm not even sure what point I'm trying to make, except maybe: let's cut each other a little slack, and try to listen to each other, because we don't know how long any of us will be here. And maybe, there but for the grace of God go I.