28 March 2010

Kudos to Brian Deer

Who is Brian Deer? He is a reporter who works for the SUNDAY TIMES, who did a thorough investigation of the alleged connection between the MMR vaccine and autism, an investigation that forced the Lancet into its retraction on January 28 of this year.

I had heard of that retraction, of course. I noted the news thereof casually in stories like this one soon after it happened. But Deer's role had not registered for me, until I saw a write-up in the latest issue of Health Care News, a publication of The Heartland Institute.

Heartland quotes Trisha Greenhalgh, a professor of primary health care at University College, London: "The hero of this story is Brian Deer, who persevered for years even after the Lancet editors had apparently done their investigation. Increasingly the knowledge to nail people like Wakefield is in the public domain, so journalists can play the 'free market' to their advantage."

Greenhalgh is referring there to the fact that back in 2004, the Lancet ran an internal investigation and issued a partial retraction. But Deer continued to research the matter for six years, producing in time a full retraction.

The cause of autism remains unknown, but the notion that it is due to vaccines seems to derive its plausibility from the matter of timing -- symptoms manifest themselves at around that time in a growing child's life when he receives these shots. One might as plausibly say, though, that going to junior high school causes acne, on precisely the same evidence.

Anyway: Kudos for Deer.

27 March 2010

March Madness

The big story of the early rounds of the NCAA basketball tournament this year was Cornell. They beat two higher-ranked teams to get into the "Sweet Sixteen" round, the first time in 30 years an Ivy League team had done so.

After all, Ivy League teams are composed of genuine "student athletes" in the old sense. There are no athletic scholarships.

The clock struck 12 for Cornell this Thursday, though, when Kentucky beat them soundly 62 to 45. What was left for Cornell was a triumphant return to the home campus. What was ahead of Kentucky was the Elite Eight round, where they will be matched against West Virginia tonight.

I have to wonder: will the Cornell students watch that game? And, if so, for whom do they root? Will they be cheering for the downfall of those who caused their own? Or will they hope that Kentucky wins, and indeed that Kentucky goes on to win the whole tournament? There is after all something neat about being able to say "we only lost to the team to whom everybody else lost -- the team that went on to become the national champion."

And of course there is the classic post-defeat cheer by Ivy Leaguers. "That's all right. That's okay. You'll work for us, anyway."

26 March 2010

An SEC Office of the Inspector General (OIG) Report

I've been reading through the report by the SEC's Inspector General about the Allied Capital matter.

It is, as the saying goes, "heavily redacted." All those smudges from a magic marker covering up names and facts we aren't supposed to know about yet get annoying. But if you persevere, there is a fair amount that is legible.

Sports fans will remember: back in the spring of 2002, short seller David Einhorn gave a speech about Allied Capital, a publicly traded company PE investment firm. You can see the whole speech for yourself by clicking here.

Word of Einhorn's bearishness on Allied Capital got out of that hall at light speed (many audience members using their blackberries to get the word out as he spoke), and the following day the NYSE closed trading in Allied shares because they had received too many sell orders to process in an orderly fashion. Allied's suits were understandably unhappy about this. They began immediately demanding that Einhorn be investigated over his alleged manipulation of their stock price.

Their unhappiness was understandable, but characterizing truth-telling as market manipulation is pathological. Shorts are as entitled to talk their book as longs. If Einhorn had been lying about Allied for the purpose of driving down its price and making money, that would have been another matter. That does not appear to have been the case. Indeed, the OIG report is a vindication of Einhorn's position.

One of the names that seems to have been redacted is that of Mark Braswell. But you just read it here. [Let them redact THIS.] Braswell, as I noted three months ago was a lawyer for the SEC during the early period of the Allied/Einhorn brouhaha, who left the SEC in September 2003 to join the Venable law firm. Thirteen months after that, Braswell registered as a lobbyist for Allied Capital, according to Einhorn's book, published by Wiley in June 2008.

Einhorn quite sensibly asks, "How could it be proper, or even legal, for a lawyer who obtained confidential material from us, including e-mails, trading records and testimony about Allied, to leave the government and go work for Allied while our dispute was ongoing?" Much of the IG report addresses this question.

On p. 33 of the report (p. 40 of the pdf) we read: "Directly after leaving the SEC [redacted] joined the law firm Venable [redacted]. ...[Redacted] told the SEC that he went to work for Venable because he followed [redacted] and [redacted] in Enforcement, with whom he had worked at the SEC."

Later, we learn that starting in October 2004, this individual (psssst, Braswell), "became a registered [redacted] for Allied on behalf of Venable."

There is no evidence, the OIG says, that this individual's lobbying for Venable "violated any specific rule, regulation, or statute." Also, an ethics official told the OIG that even if Mr. Braswell/redacted had specifically worked on the Allied Capital matter for SEC and then gone to work as a lobbyist for Allied, this would not be an ethics infringement, since lobbying [or whatever this redacted activity might be!] "typically involves some prospective action that the company wants Congress to take," rather than interference with ongoing administrative proceedings.

Just about makes you want to deterg yourself, doesn't it?

25 March 2010

Musical birthdays

Today, March 25, is a big day for the birthdays of musicians.

Arturo Toscanini, the great conductor, was born this day in 1867; Bela Bartok, Hungarian composer, 1881; Aretha Franklin, 1942; Elton John, 1947.

Toscanini would live until 1957, and become a star of the early days of television broadcasting.

Bartok died of leukemia in September 1945. For a musicological study of his significance: go here

Aretha Franklin is still with us, thank goodness, as is "Sir Elton." The same birthday may be the only thing those two have in common.

You, dear readers, will get R-E-S-P-E-C-T from me, even if you happen to spend this whole day doing the Crocodile Rock.

21 March 2010

Moral objectivism

Let us talk for a moment about moral objectivism. I don't mean "Objectivism" with a capital-O, by the way. Anyone who wants to talk about that may be excused.

No, "objectivism" with a lower-case letter is simply the view that some fact is what it is whether or not it is perceived as such. And "moral objectivism," naturally, is the view that there are moral rights and wrongs that are "objective" facts in the same way that yellow and green are objective facts, whatever that way is. We don't have to be sure that we understand "knowledge of the yellowness of the wall" before we can move on to the more complicated questions of morality. We can simply point to that sort of knowledge and say that however we might end up describing it, it will be the paradigm of what we mean by objective knowledge. The implicit contrast is to a proposition such as "french vanilla is the most delicious flavor of ice cream," which we might take as paradigmatically subjective.

When a moral objectivist claims to know that, say, throwing the switch of a certain specified runaway trolley is wrong, he is claiming to know something analogous to the yellowness of the paint on the wall, not something analogous to the deliciousness of ice cream.

The point I'd like chiefly to make today is this: the question of objectivity is different from the question of relativity. A wall may be "relatively" yellow -- it may look yellow in certain lighting conditions or in comparison with another wall. These relative situations are themselves objective facts, i.e. they are what they are regardless of my tastes. So let's not confuse "relative" with "subjective" or demand that something be an absolute before you call it objective.

I'm just mulling things over....

20 March 2010

Shafer's Takedown of an Urban Myth

There's an urban legend in circulation about "pharm parties." You can read about it in David Emery's Urban Legends Blog for example.

The gist of it is that teenagers get together and mix up pills they've stolen from their parents' medicine cabinets into a big bowl, then they each grab pills from the bowl -- randomly of course -- and toss the fistful down their throats, with whatever high, or other consequences, might follow.

Now that I've just mentioned this legend, I'll say this: Please don't anyone cite me as a source for that! I have absolutely no reason to believe any such thing has ever happened anywhere!

What is fascinating, though, and sad, is the way such legends some times make it into the "mainstream press." At its most innocent, an easy example of this is the some-large-number-of-words-that-Eskimo-have-for-snow meme, which makes it into print because some lazy writer figures that "everyone knows" this. And when he puts it into print, that serves as a legitimate source for somebody else to do so.

But leave snow out of this, except perhaps for snow jobs. Jack Shafer of SLATE has been commendably industrious in dogging the legend of the pharm parties, devoting seven columns to the subject since June 2006. (That link will take you to the first of them.) Kids certainly steal their parents' pills now and then. That has been happening for at least as long as medicine cabinets have been a fixture in bathrooms. And even this business of mixing them in a bowl at a party -- for all we know it may have happened somewhere. The point though is that all the 'evidence' seems to be of the 'a friend of a friend went to one' variety, and that has become the basis for scary stories about a 'troubling trend.'

Here is Shafer's latest takedown of sloppy reporting of this variety.

This time it is the San Francisco Chronicle that's been caught using sloppy non-source sources because it makes a scary tale. I have done enough, in an Ed Sullivan kind of way, and I now ,move to the side of the stage so you can click on that link and enjoy Shafer's column for yourself.

19 March 2010

Madoff fallout and translation

Last fall, investors who had lost money -- lots of it -- in the LuxAlpha Sicav-American Selection fund filed lawsuits against E&Y and UBS in Luxembourg.

The reason they had lost so much money in LuxAlpha was that the geniuses managing same had invested 95% of it with Bernard Madoff. Maybe you've heard of him?

Anyway, investors claimed that they were entitled to be made whole by UBS, which was LuxAlpha's custodian, and/or by Ernst & Young, its auditor. Unfortunately for said investors, a Luxembourg court said in a ruling on March 4 [the only date in the year that is also a command -- "march forth!"] that the investors will have to pursue their claims through the liquidator of the fund, some French-speaking equivalent of Irving Picard. The claims are otherwise "irrecevabilites," a French word that literally translates "inadmissible."

This raises an issue about the nature of translation from one language to another. In Ango-American jurisprudence, of course, "admissibility" is an evidentiary principle. A court that wants to say that it can not "receive" a certain lawsuit will call that lawsuit non-justiciable or speak of the absence of subject matter jurisdiction. So, in a translation of the French-language decision of a Luxembourg court, should "irrecevabilites" be rendered "inadmissible" or something more like "non-justiciable"? And if one opts for the latter, is one in effect smoothing out systemic differences? For example, in translating a Dostoyevsky novel that uses the term "borscht," should one render it "Campbell's soup"?

Anyway: the investors will appeal, but for the moment the defendants have won.

You may ask: what the heck kind of name is LuxAlpha Sicav? That one I can answer.

"Lux" of course refers to the Grand Duchy of Luxembourg, an important center for the domicile and for the administration of hedge funds.

"Alpha" is conventional finance jargon for the difference between a particular actively-managed fund's performance and that of the market. A "positive alpha" means that the investors did better than they would have done had they owned a piece of a passively managed fund that was indexed to, say, the S&P.

"Sicav" is a French-language acronym, from "la société d’investissement à capital variable," an open-ended investment company.

As Governor Duke said to Mac, "I'm glad we've had this little talk."

18 March 2010

Two years ago

It was two years ago this week that the bigwigs of Wall Street and Washington were scrambling to answer the question, "What do we do about Bear Stearns," in a hectic prelude to the even graver crises of that autumn.

It was also on March 18, 2008, that Lehman Brothers put out an optimistic press release, reporting quarterly earnings of $489 million, or 81 cents per share. Investors loved that number. Lehman's shares went up $14.74 that day, to close at $46.49. Michael Hecht, an analyst with Banc of America Securities, called the quarterly results "all in all solid."

The commonality? The bad news on the Bear side was overstated (the $2 a share the Bear shareholders thought they'd be getting two years ago today was, in few days later, quintupled -- still, a devastating loss, but $10 per share was a mite better than $2.)

The good news on the Lehman side was also overstated. Indeed, "overstated" is kind. Hence the now notorious Examiner's Report to the bankruptcy court.

That's our brief anniversary lesson on the oldest of subjects: the difference between reality and appearance.

Of course, two years ago this week we were also learning -- at least New Yorkers interested in the goings-on in Albany were learning, about the world's oldest profession, at least the high-level variant of that profession patronized by the Spitzers of the world.

14 March 2010

Random Quote from Paradise Lost

Satan, given a lemon, turns it into lemonade, as they say in self-help books. Confined to Hell? make the best of it!

So farewell, hope; and with hope farewell, fear;
Farewell, remorse! all good to me is lost;
Evil, be thou my good; by thee at least
Divided empire with Heaven's King I hold,
By thee, and more than half perhaps will reign;
As Man ere long, and this new world, shall know.

13 March 2010

Leibniz and the Mind-Body Problem

The trickiest questions in modern philosophy, i.e. those with which I have struggled most for decades, are those that involve the body/mind (or body/soul) connection.

Does the thinking-stuff that is "me" really interact with the material-stuff that the rest of the world sees and knows as me? If not, how can the two "Mes" be said to be one? Yet if they do interact, how is that possible? It seems to "me" that the two are so very different that it is hard to get a grasp on this.

I recently encountered the blog of a self-described "contemplative scholar," a Quaker who teaches philosophy at a small college. You can make this discovery for yourself here.

He said he has recently been teaching Leibniz to his students in the Modern Philosophy class. So I free-associated on Leibniz in his comments section. I'll just reproduce most of that comment below:

Leibniz, if I remember my college years at all, had a drastic solution to [mind body issues], -- preestablished harmony. Mind and body only seem to interact, as two trains running on parallel tracks at the same (predetermined) speed might seem to be moving deliberately in concert.

This calls for a rather distinctive conception of God, one at odds with much of the revelation offered to each of the "peoples of the book," and it all seems a very high price to pay for the resolution of the mind/body muddle.

Just my two cents.

To which the Contemplative Scholar replied with a fuller account of what Leibniz said in that line, and with his own thoughts on the matter. I'm sure that any of my readers who follow the above link will appreciate his reaction.

12 March 2010

3D Rugby

Ben Fenton wrote for Wednesday's Financial Times a story about his experiment in 3D -- watching a rugby match. I don't know anything about rugby but I thought this was a nice piece of writing, and I will share it with you in that spirit.

"It must be decades since a London cinema audience stood for the national anthem. But then, watching one of the sport's most visceral encounters live on a big screen, with a beer in one hand, in 3D to boot, prompted several odd experiences.

"Few though were much to do with a third dimension. Dramatic moments of perspective -- explosions in space that send debris over your left shoulder -- don't happen in rugby, thankfully; they are fodder for Imax technology. Drama on the rugby field is more about depth, and England versus Wales had plenty of that -- if only depth of ordure as two poor teams battled to be the least incompetent."

I like the use of "ordure," a word for manure more often used, I'm sure, on his side of the Atlantic than on this one -- but of course so is the word "rugby"! Ordure also suggests "odor," both as a homonym and because of the rather intense relationship of the meaning of the two words.

Ialso like the play on the word "depth," as a feature of a visual field (the third of those Ds) and as a sport's team's attribute, i.e. the "depth" of talent. Yet other meanings of the multi-faceted term "depth" lie about and complicate our reaction to this passage.

Good work, Mr. Fenton.

11 March 2010

Our Anniversary

As of this week, Pragmatism Refreshed has been on blogspot for three years.

We're just basking in the anniversary glow here at PR headquarters.

Now let's begin our fourth year together with a big cheer for the movie "The Hurt Locker," and its Oscar wins. I wasn't all that impressed when I saw the movie, frankly, but it is very likely there is much I missed and that would impress me better on a second viewing, which I am willing to give it some time soon.

Who among my readers saw The Hurt Locker? What were your impressions? I'd love to read them here.

Reportedly Kathryn Bigelow, who won the Best Director Award for helming this movie, will next be working on something called "Triple Frontier," for Paramount. It's an action-adventure thing set in the area where Argentina, Paraguay, and Brazil all meet, by screenwriter Mark Boal.

07 March 2010

Selling America Short

Richard Sauer has written a book, published by Wiley, entitled "Selling America Short: The SEC and Market Contrarians in the Age of Absurdity."

The official publication date is late next month, but if you're impatient, you can read large chunks of it via the amazon webpage.

So: who is Richard Sauer? He is a very prominent securities lawyer, a partner at Vinson & Elkins LLP, who is also an adjunct professor at Georgetown Law. Most pertinent perhaps for the book, he was recently on the SEC staff. He was Assistant Director of the Division of Enforcement in the Securities and Exchange Commission.

So should the title of the book be: Why we didn't catch Madoff? Well, no ... his attention is elsewhere, and on another day I'll discuss his thesis. But for today, I'll content myself with quoting a brief passage relating to Bernie.

"Sad to say, it is not realistic to hope we can greatly improve the effectiveness of our regulatory agencies. Talent runs out of the government lke water through a colander, pulled out by the bigger dollars available, or pushed out by administrative folly. ...The SEC's failure to catch Bernie Madoff until he confessed was not a fluke. So poorly do government agencies understand the entities they regulate, they can sometimes be confounded by even thinly disguised frauds."

06 March 2010

Some wisdom from Singapore

US equities will rise again.

So says Josh, of "Josh Reviews Everything," while riffing and ripping on a Paul Farrell panic attack.

I won't seek to add anything more.

05 March 2010

The Marne, 1914

I've been reading a book by Holger H. Herwig, THE MARNE, 1914: The Opening of World War I and the Battle That Changed the World (2009).

Herwig is a professor of history at the University of Calgary.

A random quote. Herwig notes that although the onset of war in 1914 was cheered by crowds in the capital cities involved -- St. Petersburg, Berlin, Paris -- the countryside took matters in stride, or perhaps glumly.

"The July Crisis found the agricultural sector at a critical stage. Grain and legume fields were maturing, as were fruit orchards and vinyards. Soon, armies of farm laborers would hasten to bring in the produce before the sudden arrival of fall rains. War would mean the conscription of young male labor needed in the villages; the loss of secure urban markets; the requisitioning by the army of thousands of horses and wagons; and the likely imposition of price controls."

04 March 2010

A Thought from Macaulay, Not De Tocqueville

There is a pseudo-quotation that is often attributed to De Tocqueville:

"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."

The quote is all over the place these days. I'm told that if you google "de toqueville congress bribe" you'll get almost a quarter of a million hits. It has everything to recommend it as a meme -- it speaks to current anxieties, and is attached to a source whose name we all recognize from school.

But he didn't write it. Or, at least (since I can't prove a negative) nobody ever cites a specific source for it. Successful meme: lousy scholarship. It is sad how often those two things go together.

Anyway, where did this misattribution come from? Is there a real quotation (of de Tocqueville or anybody else of roughly the same era) of which that is the distorted form? I think there is.

Indeed, the first time I encountered this pseudo-quotation I said to myself, "Wasn't that Macaulay?" -- not because I sit around reading Macaulay, but because I have a vague memory of William F. Buckley once quoting Macaulay to this effect in an episode of Firing Line. So I went on Snopes, the wonderful "urban legends" resource. It told me that very similar sentiments are sometimes attributed to Alexander Fraser Tytler, a Scottish historian of some prominence in the early 19th century. He is supposed to have written, "A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the Public Treasury. From that moment on the majority always votes for the candidates promising the most benefits from the Public Treasury with a result that a democracy always collapses over loose fiscal policy always followed by dictatorship."

Usually, when this attribution is made, Tytler's name is mis-spelled Tyler, which hardly gives one confidence. Anyway, Tytler appears not to have written this, either.

Then I did some more eclectic research. I found someone claiming that sentiments like this have been a regular part of the armory of conservatives in the US since the mid 1950s, when William F. Buckley gathered some bright intellectuals around himself and started putting out the National Review, in an effort to redefine conservatism as something more principled than the Eisenhower administration, but less wacky than the John Birchers. Well, yes, I thought, that fits nicely with my own first impression, though the Buckley observation I recall was televised, not printed, and was from the 1970s.

Anyway. it does appear that Macaulay said something like this in a letter he wrote to a friend in May 1857.

Here is part of Macaulay's argument -- you'll find that it isn't as snappy as the above variants. "I have long been convinced that institutions purely democratic must, sooner or later, destroy liberty or civilization, or both. In Europe, where the population is dense, the effect of such institutions would be almost instantaneous. What happened lately in France is an example. In 1848 a pure democracy was established there. During a short time there was reason to expect a general spoliation, a national bankruptcy, a new partition of the soil, a maximum of prices, a ruinous load of taxation laid on the rich for the purpose of supporting the poor in idleness. Such a system would, in twenty years, have made France as poor and barbarous as the France of the Carlovingians. Happily the danger was averted, and now there is a despotism, a silent tribune, an enslaved press. Liberty is gone: but civilisation has been saved."

So there IS a respectable 19th century source for this sort of connection between "purely democratic" arrangements and the threat of "a national bankruptcy." Further, Macaulay was also making the point that the US would be safe from this threat for awhile -- because the US doesn't have so dense a population as Europe -- there is/was the safety vent of western expansion. Once that vent was closed, though, the same dark choice that faced France, and that it resolved by recourse to the second Bonapartist dictator, would face Americans.

In 1953, Russell Kirk wrote a book called The Conservative Mind, which has gone through several editions and is still revered by many conservatives with an academic flavor to their minds. If you use the neat "look inside" feature at this book's amazon dot com page, you'll find that Macaulay is treated as an important link in the chain Kirk is forging between Edmund Burke's writings and mid-20th century figures like Santayana or Eliot. And on p. 163 you'll see a quotation from that letter to Randall. Kirk renders it thus: "I have long been convinced that institutions purely democratic mustsooner or later, destroy liberty or civilization, or both. In Europe, where the population is dense, the effect of such institutions would be almost instantaneous....Either the poor would plunder the rich, and civilization would perish; or order and prosperity would be saved by a strong military government, and liberty would perish."

Which brings us again to Buckley. For it was just two years after the publication of the first edition of this book that Buckley founded National Review. Kirk was one of the first bright young men he brought into that fold, although Kirk held to a sort of traditionalist conservatism rather at odds with the market-oriented elements of the thought of some of the other founders of NR, including to some extent Buckley.

Anyway, whether the above expressed thought is right or wrong: it is not de Tocqueville.

Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.