Tuesday, November 15, 2011


Bear with me on this. Remember, no analogy is perfect. This is not historically accurate (pertaining to Digitalis) or completely medically accurate either.

Let's pretend there's a sport called World Economy. There are different teams and the teams play games against each other. Of course, the goal is to come in first. There are some smaller teams, in the same geographic area, and they do alright. But they figure they can do better if they form one giant team. So that's what they do. They call this team the Euros.

In order to insure victory, they come up with a master-plan. First, they create certain rigid conditions for each smaller team to meet before they can be part of the Euros. This is the smaller team/player “physical” to make sure the smaller team, as a whole, is healthy. Second, they create what they believed are sufficient rules and controls for the larger team, the Euros, to remain in tip-top condition and health. For instance, only certain medications can be used if a Euros player gets sick. Additionally, there is a team diet, a team weight program, a team stretching program and a team conditioning program. All the players on the Euros have to follow these programs to the letter. Third, if a player becomes injured, or sick, that injured/sick player can't leave the game (The team has to continue to compete against other teams with the injured player.). Fourth, if a player develops an heart arrhythmia, no other drug but Pfizer's Digitalis can be used. Fifth, no one can quite the team. Sixth, if the rules, the training program, the weight program, the diet program, or the authorized medications need to be changed, or added to, the players on the Euros have to unanimously agree on any change. Seventh, even if a player follows all the rules and has a full heart attack, not an arrhythmia, there is a do not resuscitate (DNR) form on file that must be honored.

The Euros play with these rules for a while and they do quite well in the standings. But, after a while, some players start to have heart arrhythmias while playing in games. Because Pfizer's Digitalis is the only sanctioned drug, they started to use that. But a strange thing happens. When the players start to take the Digitalis some get better, but some don't. The team owner calls Pfizer to try to find out what's going on.

Generally, Pfizer's Digitalis, which has a molecular structure of C41H64O14, is a great drug for controlling heart arrhythmia. In order for Pfizer to keep the drug stable before it reaches the heart, it has to coat Digitalis with a special molecule called Goofus. Pfizer starts to research what's going on when their drug is used on the Euros players. In short order, their research reveals the problem is that, in some instances, in some players, Goofus breaks down. In turn, this causes the molecular structure of Digitalis to break down before the Digitalis can get to the heart. Sometimes, the molecule degrades to C32H17O1 other times it degrades to C21H34O4 , etc. After some further research, Pfizer discovers it can create specialized molecules for each player. These molecules can be introduced into the player's body. This molecule will bind with the degraded Digitalis so the degraded Digitalis molecule will become whole and functional again. They check the rules and regulations for team Euros and the specialized molecules are broadly within the definition of “Pfizer’s Digitalis”, so there is no reason not to try these specialize molecules. In this way, hopefully, at least the players' heart can reach rhythm again. The specialized molecules work. The players don't die. But no one can say Pfizer's Digitalis is really a satisfactory drug to treat heart arrhythmias for the Euros players.

The team owner hires some specialist and they find that, in fact, for some players, the mandatory training program, or the mandatory diet, not only cause the arrhythmia in the first place they also cause the Digitalis to break down. For this reason, if a player, who initially got sick but then returns to health because of the specialized molecules, continues with the training program and the diet, which he must, the player will obviously redevelop another heart arrhythmia. Then, the player will have to, once again, take both Pfizer’s Digitalis and the specialized molecule to get better.

All this raises some pretty interesting questions. First, if you are a healthy player on the Euros, would you want to remain on this team and have to continue to play the game against other teams knowing you are constantly going to have sick players on your team dragging you down? Second, say you are one of the players who gets sick. Even if you get well, would you want to go back to this team knowing you are just going to get sick again? Third, if you are sick, but by leaving the team and taking another medication (albeit with horrible side-effects), you would be permanently cured, wouldn't you do that?

Whether you believe it, or not, the preceding is a pretty good description of what is really at the core of the European Union (EU) crisis. Here’s why.

If one stops to think about it, there exists an astonishing boast at the center of the creation of the EU: We’ve got it all figured out! We have all the right rules, all the right safeguards and all the right medications. So, once your country is healthy enough to join the EU, you will remain healthy. This is why the EU Treaty had requirements on inflation rates, etc., before a country could join the EU. This is why the EU Treaty has but one currency. This is why the EU Treaty created the ECB. Oh, the Treaty drafters also decided if they make it so the ECB cannot bail-out a country, by throwing large sums of money at the country when that country is in trouble, a country will, of course, not act irresponsibly. How’s that working out? Also, the drafters didn’t conceive of trade imbalances, or sovereign bond price imbalances, developing between member states. Oops again. Or they did conceive of possible bond price or trade imbalances but, whatever they chose to naturally even-out the these imbalances, theses balancing mechanism failed because, right now, there are significant trade imbalances and inter-state bond price imbalances.

Furthermore, there exist legal questions that nobody seems to be addressing. Most everybody is saying the ECB is going to have to step in and save the day, even though many agree the legal mandate of the of the ECB appears to limit the ECB from taking the actions these very same people are saying the ECB must take.

As a person who used to be a lawyer, I have some questions. To begin, because there is some debate whether the ECB can take the actions, the ECB "could" try it. However, once this happens someone will challenge this in court and, I imagine, at least one of the courts would be the European Court Of Justice. But do we actually know precisely who the challenging party(ies) could be? A country? Any citizen within a country? Also, is the European Court Of Justice the only court with subject matter jurisdiction (where an action could be initiated)? Could a German court get involved, a French court, an Italian court? Further, do we know the remedies these courts would have at their disposal? Obviously, they would have the power to ultimately decide the issue? But could the court issue either a temporary or permanent injunction or against the ECB from taking action until the court decides the issue (Imagine the turmoil if the court had this power and it exercised it.)? What are the rights to appeal and to which court(s) of review? And, of course, all hell breaks loose if the ECB does it and then the court reverses.

It wouldn't surprise me that part of the calculus for the ECB might be: How messy is this going to get legally if we do pull the trigger? I think there is only one scenario where a mess could be avoided. Remember those westerns where the town's people take the bad guy out of town, circle around him, and then shoot him? Then the Sheriff, starts asking questions. As long as the town's people all agree to say nothing, "Game Theory-land," the Sheriff can't make an arrest. The point is: If the European Court of Justice is the only court with jurisdiction and only the member states of the European Union, through their governments, are the proper parties to a lawsuit, then the legal issue could conceivable be contained by an agreement from the member states not to act. However, if this isn't the case, things could easily get dicey.

Obviously, the preceding is just a small part of the list of what’s internally wrong with the EU and the EU Treaty. But, the point is, if you make a promise of a perfect plan, a single imperfection just might spoils the entire plan and several imperfections will be disastrous.

Certainly, it can be argued Greece found a doctor to fudge the results of Greece’s physical. Therefore, Greece brought its problems upon itself. But no one is claiming Italy, Spain, Ireland, Portugal, now maybe even France, found a compliant doctor. No, all of this chaos occurred after the countries were allowed into the EU. Furthermore, it really is of no consequence whether or not this country, or that country, followed all the rules, because, if they didn’t follow all the rules: 1) there weren’t sufficient controls in the Treaty to stop the country from misbehaving in the first place or; 2) the right interventions weren’t placed in the Treaty to keep a misbehaving country from continuing its poor behavior. Oops, again.

I’m not saying it isn’t vitally important to try to fix Greece’s and Italy’s problems. Although it seems questionable whether the EU can do this. What I am saying is fixing these problems is analogous to Pfizer coming up with the specialized molecules to compensate for Digitalis not working in the first place. Furthermore, fixing the problem now, doesn’t change the fact the very nature of the EU will make its players sick again and that the EU Treaty really doesn’t have enough of the right medicines to treat a player when it becomes sick.

Clearly, a lot of people don’t seem to see things this way because, when they see the player getting sicker, they panic. But, when they see the player maybe getting better, they feel optimistic. This is what’s going on with the stock market. But, in reality, there really are only five conceivable denouements to this play: 1) things continue to deteriorate and the EU is broken-up; or 2) somehow, the EU figure-out a way to fix it sufficiently so the EU doesn’t self-destruct this time (the specialized molecules); or 3) if the EU doesn’t self-destruct this time, there will be a repeat; or 4) a repeat is avoided because the members of the EU get together quickly enough to unanimously agree on the amendments to the Treaty and these amendments are absolutely perfect in ever respect, thereby satisfying the original goal of sufficient parity between member states so that the EU, as a whole, will remain perpetually relatively stable (any takers for a bet on this one?); or 5) there are amendments but they aren’t “perfect in every way,” consequently, we simply get a variation of what’s going on now.

When framed this way, I come to this conclusion: Dr. Kevorkian, your services are needed across the pond. On second thought, maybe we don’t need Dr. Kevorkian. Perhaps we need Jim Phelps because this just might be a Mission Impossible. Quite seriously, maybe instead of talking about an orderly default for Greece or Italy, maybe the better question is how quickly and orderly can the EU be voluntarily broken-up?

Before concluding, there exists an entirely different reason to break-up the EU: It was an unnatural fool’s errand in the first place. One of the premises of the EU was that twenty or so nations, mostly with hundreds of years of history behind them, with separate cultures and separate ethics, could form a stable union that would never break-up. History informs this is a pretty ridiculous premise. This type of union, save for possibly China, has never been successful whether the union was formed voluntarily or by force. Something exists in the very nature of mankind to render this sort of union unstable and, ultimately, impossible. The nations of Europe have forgotten a very simple old adage: “It’s not nice to fool mother nature.” The formation of the EU was as preposterous as claiming a margarine could taste the same as butter. The EU’s delusion is going to bite them on the ass, big-time. It is also going to cause significant harm to the entire world-wide economy.

November 15, 2011

© Copyrighted by James N. Perlman. 2011 All Rights Reserved.

Friday, September 30, 2011


On September 8, 2011, President Obama proposed the enactment of the American Jobs Act. Nearly everybody believes this proposal is not enough to return our economy to health but many believe it can be another restart. I believe there are some things the president could have said, and could have proposed, that would have considerably enhanced the core of his proposal. Additionally, these enhancements would have made his political base happier and could have put the Republican Party in a larger bind. My ideas follow in the balance of this essay and are based on seven underlying premises. The premises are:

1. The Republican Party wishes to create jobs. Let’s take them at their word, and the fact that H.R. 2 this year was entitled: Repealing the Job-Killing Health Care Law Act, should be understood to mean the Republican party favors job creation.

2. Republicans wish to expend as little as possible to create jobs.

3. In economics, the highest multiplier is when government expends money on goods and services. This is because all the money is spent and none is saved. Krugman I (http://krugman.blogs.nytimes.com/2011/09/03/the-austerity-economy/), Gordon Krenn Working Paper (http://faculty-web.at.northwestern.edu/economics/gordon/WPTheEndoftheGreatDepression.pdf)

4. Given the nature of President Obama proposed “American Jobs Act,” September 8, 2011, the vast majority of the benefits will come to an end by the end of 2012. While the CBO has not yet scored it, Macroadvisors, LLC reports (http://macroadvisers.blogspot.com/2011/09/american-jobs-act-significant-boost-to.html) it as follows: a) boost the level of GDP by 1.3% by the end of 2012, and by 0.2% by the end of 2013 and b) Raise nonfarm establishment employment by 1.3 million by the end of 2012 and 0.8 million by the end of 2013, relative to the baseline.

5. One of the problems with the fiscal stimulus in 2009, according to the Obama administration, was a lack of shovel-ready projects to create more jobs.

6. As the stimuli from 2009, and then late 2010, came to an end the economy began to sink again (http://krugman.blogs.nytimes.com/2011/07/29/stagnation-nation-2/) and, based on the projections of Macroadvisors, LLC, the same will happen when the stimulus created by the American Jobs Act comes to and end after 2012.

7. Even before September 2008, private industry was not creating enough jobs, and overall, unemployment rose during the years 2001-2008 (http://en.wikipedia.org/wiki/Economic_policy_of_the_George_W._Bush_administration#Unemployment). The seasonally adjusted unemployment rate rose from 4.2% in January 2001, peaking at 6.3% in June 2003 and reaching a trough of 4.4% in March 2007. After an economic slowdown, the rate rose again to 6.1% in August 2008 and up to 7.2% in December 2008. From December 2007 when the recession started to December 2008, an additional 3.6 million people became unemployed.

Using these premises, a slightly different address before Congress could have been given by President Obama on September 8, 2011.

The president would start by saying he will propose both short-term and long-term solutions for the lack of growth and employment in our country. These solutions need to be implemented before fiscal consolidation actually happens, but not before Congress can make plans for fiscal consolidation. This sort of strategy is consistent with what leading economists are suggesting, what the IMF has been suggesting [recent comments by Christine Lagarde (http://www.nytimes.com/2011/08/31/opinion/christine-lagardes-tough-message.html) and an IMF paper entitled Painful Medicine (http://www.imf.org/external/pubs/ft/fandd/2011/09/ball.htm)] and what Ben Bernanke is presently saying.

Both short-term and long-term solutions are needed in order to avoid past mistakes. The contours of the short-term, and especially the long-term, jobs solutions are informed by five facts. First, we know private industry has not created enough new jobs since 2008 as our unemployment rate remains 9.1 and over 14 million Americans are still out of work. Second, we also know private industry wasn’t consistently creating enough new jobs before the recession began in 2008. (Premise #7) Third, both Democrats and Republicans agree we need to create enough jobs to, once again, put our country back on sound footing and, obviously, it is best to do it as inexpensively as possible. (Premises 1 & 2) Fourth, our country’s most renown economists agree that, under the our present situation, the best, and cheapest, way for enough jobs to be created, is for government jump-starting the economy by creating the jobs through the direct purchase of goods and services. (Premises 3 & 4, Gordon Krenn Working Paper) Fifth, we didn’t have enough shovel-ready jobs ready in 2009, and we presently don’t have enough shovel-ready jobs to completely close the existing gap in unemployment. (Premise #1)

Given these five facts, the solution is actually fairly straightforward: Begin planning for the creation of shovel-ready jobs now so they are ready for implementation when the short-term stimulus begins to lose steam. If done right, this will truly close the unemployment and growth gaps. There are any number of ways to insure projects will be ready when needed, here’s mine.

The president asks each and every governor, from each and every state, to draft proposals for needed governmental jobs, service, works projects, etc. Think inside the box, think outside the box. Think big, think small. Then, after the first of the year, the president asks all the governors to come to Washington, D.C. for a two day conference on their ideas. This conference will be open to the public and can be broadcast on any cable/television station that wants to. The president will serve as moderator. This a great format for Barack Obama as he was stellar when he did this sort of thing with members of Congress about a month before the enactment of the Affordable Health Care Act.

While the majority of the time during the two days will be allocated to the requests from the governors, and discussions about many of their requests, the first three hours will be devoted to presentations from leading economists to simply explain our economic situation and what is needed. The value of this will become more evident by the end of this essay. Attendance by a governor, and proposals from a governor, are not mandated. But understand, no proposals, no opportunity for assistance from Washington, D.C. for jobs. And if this country’s leading economists are right, it will be a very nice experiment to compare in two or three years the employment rate in the states that participate and those that do not participate.

The virtues of this proposal should be apparent. First, it plans for the future so we are not back at this same place in 2013 when this next stimulus comes to an end. Second, to the extent possible, it hits the Republicans fairly hard. Private industry isn’t creating, and hasn’t created, enough jobs since 2001. Second, the Republicans say they want jobs, they say they want the most bang for the buck and this plan is what leading economists say will do the trick. Third, yes the stimuli tried before haven’t solved the problems, but each time the stimuli came to an end things got worse. This suggests that a larger “shock treatment” stimulus will have greater success (The economists will explain all this to the American public at the Washington, D.C. conference with the governors.). Fourth, there is little the Republicans can do to stop this and, from the point in time when the conference ends, the president will have months to sell the product of the conference to the American people.

The final component to this is the political necessity to explain to the American public that the actions to jump-start the economy with government spending will last only as long as necessary because, when the recovery becomes self-sustaining, the nation needs to address the remaining issue of bringing our debt down to better levels. I believe this means directly addressing the small government/big government debate within the context of our current economic situation.

Paul Krugman gave an address (http://www.palgrave-journals.com/eej/journal/v37/n3/full/eej20118a.html) in Moscow to the Eastern Economic Association the week of September 5, 2011. Towards the end he said:

But what became clear in the policy debate after the 2008 crisis was that many economists — including many macroeconomists — don’t know the simplest multiplier analysis. They literally know nothing about models in which aggregate demand can be determined by more than the quantity of money. I’m not saying that they have looked into such models and rejected them; they are unaware that it's even possible to tell a logically consistent Keynesian story. We’ve entered a Dark Age of macroeconomics, in which much of the profession has lost its former knowledge, just as barbarian Europe had lost the knowledge of the Greeks and Romans.

As long as monetary policy could bear the burden of macroeconomic stabilization, this didn’t seem to matter too much: even as equilibrium business cycle theory became increasingly dominant in graduate study, central banks, like medieval monasteries, kept the old learning alive. But once we were hit with such a severe banking and balance sheet crisis that monetary policy hit the zero lower bound, it was crucial that the economics profession be able to weigh in knowledgeably and coherently on other possible actions. And it turned out that it couldn’t.

Obviously, this is true. But there is another part to this that Krugman skirts around and it has to do with political philosophy and the small government/big government debate. In this country, we can generally lump people into two belief systems (I know over-simplification, but bear with me.). Some people believe in small government and some people believe in a more expansive role for government in solving the problems that face our nation. The monetary policy as the instrument of macroeconomic stabilization school of thought, that is a tenet of the Milton Friedman neo-classical school of economics, and that Krugman speaks about, is consistent with an overarching small government belief system. So, if one is a small government advocate, until this crisis, there could be unity between an overarching small government belief system and a small role for government in the realm of macroeconomics. However, once this crisis hit, a crisis that called for a Keynesian macroeconomics solution of a sizable governmental fiscal stimulus, people who possessed an overarching small government belief system couldn’t separate their overarching (small) role of government belief system from their macroeconomics views, despite the fact that macroeconomics isn’t so much a belief system as it is, or should be, a rigorous, empirical, endeavor. For this reason, they couldn’t see, or wouldn’t allow themselves to see, the difference between the two and how it could be possible to retain the overarching belief system of small government and, at the same time, allow for an exception to their belief system when it comes to macroeconomics when an economy descends into a liquidity trap.

For this reason, in order for President Obama to make head-way with the American public, he has to directly address this conflict and show how it is possible to have a rule (small government belief system) and an exception to a rule (The macroeconomic necessity of governmental fiscal stimulus in a liquidity trap. Krugman II (http://krugman.blogs.nytimes.com/2008/11/15/macro-policy-in-a-liquidity-trap-wonkish/), Krugman III (http://krugman.blogs.nytimes.com/2008/12/29/optimal-fiscal-policy-in-a-liquidity-trap-ultra-wonkish/) Note: Both of these were written in late 2008. Hence, the correct path forward was out there since that time.).

Krugman addresses this conflict at the ended of his address by saying:

What we really need is a change in the destructive social dynamics that brought us to this point. And I wish I knew how to do that. But my problem is obvious: I’m an economist, and it seems that we need some kind of sociologist to solve our profession's problems.

I admire Krugman greatly, but what is needed isn’t a sociologist but an educator and a great communicator to make sense for the American public what noted economists, like Paul Krugman, have been saying for the past three years. Fortunately, an educator and a communicator is living at 1600 Pennsylvania Avenue right now. Not only does the buck stop there, sometimes, it starts there too.

In conclusion, this whole matter is obviously more nuanced than what I have presented in this short essay. Further, the president will have to figure out a way to finesse his way around his mistakes of: 1) placing fiscal consolidation before job creating during the deficit ceiling debate and 2) the constraints he placed on fiscal expenditures for sufficient job-creation, that should bring to an end the gaps in unemployment and demand, when he agreed to creating a plan for fiscal consolidation before Thanksgiving of this year. Still, I firmly believe what I have written is an outline to a better approach than the one chosen by President Obama on September 8, 2011, And no reason exists that this approach can’t be added to the president’s approach.


© Copyrighted by James N. Perlman. 2011 All Rights Reserved.

Saturday, September 3, 2011


The first method for seeing the flaws in Barack Obama’s leadership abilities comes by way of considering what Niccolo Machiavelli wrote about leadership close to 500 years ago:

The prince "ought to be both feared and loved, but as it is difficult for the two to go together, it is much safer to be feared than loved.... Still, a prince should make himself feared in such a way that if he does not gain love, he at any rate avoids hatred...” The Prince, Niccolo Machiavelli, Chapter 19, 1532

At this point in Barack Obama’s presidency, there exists little support for a conclusion he is feared by anybody of significance, either in the United States or abroad. Similarly, while Obama arrived at the White House in 2009 with tremendous good will, not dissimilar from John Kennedy’s arrival in 1961, there now exists little support for a belief there is any widespread love for the man, even among members of the Democratic Party. Consequently, President Obama lacks both of Machiavelli’s primary leadership qualities.

However, it actually gets worse when we evaluate the third characteristic Machiavelli writes about, the one a leader should avoid at all costs: hatred. For whatever reasons, including displaced racism, Obama is genuinely hated by a fair segment of the electorate and inside Washington, DC. Therefore, summing-up Obama “the leader” from a Machiavelli perspective, what we see is a leader virtually no one fears and, for the most part, the best many of his supporters can muster is a “like” for him on a personal level. To make matters worse, Obama may be hated by more people than he is feared or loved. This is a far cry from Machiavelli’s ideal prince.

Of course, it can be argued much has changed in the 500 years since Machiavelli’s The Prince. Perhaps, a modern approach to presidential leadership will paint a more favorable picture. Sadly, this is not the case. Recently, a psychologist, Drew Westen, took a close look at the president and came to a similarly unfavorable conclusion: Obama lacks what it takes to be a great leader, particularly for these times. What Happened To Obama, Drew Westen, The New Your Times, August 6, 2011 http://www.nytimes.com/2011/08/07/opinion/sunday/what-happened-to-obamas-passion.html?_r=1&scp=1&sq=drew%20westen&st=cse Westen’s piece creates a strong argument that Barack Obama does not possess the psychological background, the predicate political skills or learning experiences to lead.

While Westen says quite a lot about Obama, I wish to add two things. First, Westen begins his essay commenting on his unease following Obama’s Inaugural Address. I agree. The day following the address, I e-mailed a friend expressing similar views. It was clear Obama wanted to say this was a new beginning, just like John Kennedy did in 1961, and Obama’s structure was similar. But, unlike Kennedy in 1961, or Roosevelt in 1933, there was not one single memorable phrase or idea. Further, it was extremely tacky for Obama to attack George Bush, while the former president was sitting a few feet away from Obama. This is something Kennedy did not do in 1961 with respect to President Eisenhower, even though Kennedy was calling for the beginning of a New Frontier. I ended my e-mail to my friend with this line: “It is time for everybody to look at this man, and this presidency, without rose-colored glasses.”

Second, Westen observes if one looks at Obama’s background it is very unremarkable. Westen makes the observation that in Obama’s twelve years of teaching at a law school he published nothing other than an autobiography. What I find more to the point is, if you look at Obama’s career as a lawyer, he seems to have done very little in terms of actually being a lawyer. He only worked for four years as a full-time associate for a law firm here in Chicago. During those four years, he worked on only 30 cases and had only 3,723 billable hours. Early Life And Career Of Barack Obama http://en.wikipedia.org/wiki/Early_life_and_career_of_Barack_Obama#1992.E2.80.931996 If one thinks about it, even if an attorney is not a pure litigator, he or she, one way or the other, should end-up developing sophisticated skills at negotiation, whether it occurs with clients, other attorneys, business people, etc. However, if one takes a look at Obama’s background, there is no apparent place where he could have honed such skills. Certainly a person cannot develop keen negotiation skills, as an associate at a law firm working on only 30 cases and billing slightly less than 4000 hours over the course of four years.

What is noteworthy about this apparent paucity of negotiation skills is Obama has made a cornerstone of his presidency the concept of “compromise.” But compromise, or at least successful compromise, requires negotiation skills. And if a person is negotiating in Washington, D.C., with Congress, lobbyist or negotiating with world leaders, it would be desirable for a person to be a highly skilled negotiator. Yet, nothing in Obama’s background indicates he had much, if any, of an opportunity to learn negotiation skills. Furthermore, from what we have seen in the past two and three-quarters years from Obama, very little exists to suggest Obama is a natural negotiator.

One way to test the conclusion Obama is a poor negotiator is to use Game Theory to evaluate how he actually handled a negotiation. So let’s do that using the recent negotiation over raising the debt ceiling.

As I wrote nearly a year and a half ago, in evaluating Obama’s performance during the health care debate (which culminated in the passage of the Affordable Care Act), Using Game Theory To Analyze Barack Obama’s Conduct During The Health Care Debate, http://jamesnperlman.blogspot.com/2010/03/using-game-theory-to-analyze-barack.html, there exist five central rules under Game Theory. And, in passing, it is really quite interesting to see how well Machiavelli’s ideal prince would embody these five Game Theory rules. The five rules are:

1. Figure out what you want before you try to get what you want.
a. Payoffs Matter
2. Put yourself in other people’s shoes.
a. Understand what the other player’s desired payoffs are and what, if anything, the other player would accept as a payoff.
3. We are evil.
4. Rational choices can lead to bad outcomes.
5. Don’t play a strictly dominated strategy.

Further, there can be a number of types of players in Game Theory including : Evil Gits and Indignant Angels. Being an Evil Git is always advantageous if the payoff is large regardless of what strategy the other players choose. As for the Indignant Angel, this can be a losing strategy because often it is a dominated strategy. For this reason, when an Indignant Angel is playing against an Evil Git he should always choose a comparable Evil Git strategy, i.e., choose a dominant strategy, in order to obtain the best possible result.

With regard to the health care debate, the end-game strategy, as devised by Rahm Emanuel, was as follows:

"Emanuel wants to jam a wedge into the fissure inside the Republican Party between, as he frames it, the descending wing that believes in small government and the ascending wing that believes in no government. Republicans lose, in this theory, whether they cooperate with Obama or not. “We’ve got to drive the ball at them,” a senior White House official told me. “Driving the ball at them, making them pick between small government and no government, putting them in their responsibility-and-accountability box. You walk away? You’re walking away from responsibility, and the public’s angry at you. You participate? Your base hates you.” The Limits Of Rahmism, Peter Baker, The New Your Times, August 6, 2011, http://www.nytimes.com/2010/03/14/magazine/14emanuel-t.html?scp=2&sq=rahm&st=cse

This strategy worked and Obama got his Affordable Care Act. But, as I pointed out in my earlier essay, Obama came to this winning strategy late in the game and after he had squandered time and policy.

When it comes to the raising of the debt ceiling issue, it truly appears Obama forgot nearly all of the things that ultimately worked during the health care debate. First, he reverted back to his natural state, Indignant Angel. He was the outraged “adult” in the conversation. And, really, no one likes the outraged adult. Second, he didn’t drive the ball at the Republican’s at all. He remained largely passive/dominated, dropping in from time to time, mostly when things weren’t going well.

For instance, putting aside whether the Fourteenth Amendment to the Constitution confers upon the president the power to raise the debt ceiling on his own, by announcing he wasn’t going to exercise this option, at least two weeks before the deadline for a decision, Obama took off the poker table his only Ace-In-The-Hole card: “Fine, you don’t want to raise the debt ceiling, I’ll do it under the Fourteenth Amendment and let the United States Supreme Court be the one to tank the economy with a decision I was wrong.”**

Third, under the successful Emanuel health care strategy, the Republicans were forced to choose between small government and no government, both losing strategies when it comes to the electorate at large. However, with respect to the debt ceiling deliberations, where was the wedge? Over raising taxes, something none of the Republicans subscribe to. And because there was unity on not raising taxes within the Republican party, the Republican Party was able to remain unified and true to their entire constituency. Furthermore, once you take raising taxes off the table, a loss in terms of Obama’s constituency, nothing is left other than a tiny philosophical/policy contrast (wedge) between what Obama wanted and the Republicans wanted as it pertained to debt reduction. The only possible discernable difference was the size of debt reduction and where the cuts were to be made. But this is a difference too fine for most in the electorate at large to discern. So, the Republicans win this one too.

Fourth, the only thing Obama stood firm on, and won, was raising the debt ceiling through the coming election cycle. Many, correctly, saw at least some selfishness on Obama’s behalf when it came to this. However, what the public wanted from its commander-in-chief was selflessness and leadership. They didn’t want Obama fighting for himself. They wanted Obama fighting for them. Instead, what they got, during the debt ceiling debate, was a president largely fighting for himself and chalking-up a total of one win. And that was a win for himself. There was no win for Obama’s Democratic constituency. For all these reasons, a fair perception of this is: Obama got what he wanted, less stress through the election cycle, the Republicans got what they wanted, debt reduction and no tax increase and the Democratic constituency, and the population at large, got...?

Some will argue Obama’s goal was to create a distinction between himself and Congress so he could run against Congress in some form of: “They’re bad and I’m better.” Again, that’s about Obama’s needs, not the country’s needs. Additionally, this is Obama’s inner Indignant Angel speaking. It may be true, given the current Republican presidential field, Obama’s strategy during the debt ceiling negotiations might get Obama reelected. But that’s only good for Obama, it certainly isn’t good for the country in the here and now.

Furthermore, there are a number of possible flaws with this strategy. First, running against Congress has a different meaning for Democrats than Republicans. As for Independents, the same is true, although it becomes more diffuse and on an issue by issue basis. Consequently, a contention that Congress is at fault has very different meanings for different people. This is why a recent poll found that 87% of Americans are pissed-off at Congress. http://www.nj.com/news/index.ssf/2011/08/87_percent_of_americans_disapp.html

Second, it is difficult to run against a group as opposed to a single person. In a sense, Sigmund Freud wrote about this phenomenon in his book Moses and Monotheism. In Part III, Section Two, Sub-Section 3, The Great Man, Freud writes:

[There exists] a significant discrepancy between the nature of our thinking-apparatus and the organization of the world which we are trying to apprehend. Our imperative need for cause and effect is satisfied when each possesses one demonstrable cause.

We are hardwired for this. This is why Rick Perry recently attacked Ben Bernanke, rather than the Fed as a whole, even though it is the Fed that makes the decisions, not Bernanke. It also bears noting that, when we dig deeper into what Freud writes, from the perspective of theism, western religions have deities that are both feared and loved. Sound familiar?

Along this line of overlap between Freud and Machiavelli, there is a flip-side to what Freud writes. Because we want to have singularity in terms of cause and effect, this can be a reason for certain expectations of a leader and for a belief a leader isn’t doing a good enough job when things go wrong or the leader doesn’t meet our expectations. My old school-mate, Jonathan Alter, wrote a piece recently challenging readers to actually come up with substantive examples of Obama’s failures: You Think Obama’s Been A Bad President?, Prove It. http://www.washingtonmonthly.com/ten-miles-square/2011/08/you_think_obamas_been_a_bad_pr031810.php# Part of my answer to Jon is: A president must accept what Freud writes as true and then prosecute his presidency cognizant of Freud’s truth, and Machiavelli’s truth for that matter. I’d bet the farm Harry Truman never even heard of Freud’s Moses and Monotheism. Nevertheless, Truman instinctively understood Freud’s truth, as proven by Truman’s most famous phrase: “The buck stops here!” This is something our current president really doesn’t get. Some of the other parts to a response to Jon are contained in this essay.

This is not to say campaigning against a group can’t be done. Hitler did this in terms of the Jews and the gypsies in the lead-up to, and during, World War II. The Republicans have had success with this strategy when it comes to issues like immigration. However, without going into detail, the psychology of this is different. The point is: Running against a group of people, an institution, is not a natural strategy and possesses the danger of discerning actual meaning. Furthermore, come some time next summer, Obama will have to run against one person. And, if either Romney or Perry is the nominee, neither one can be saddled with the sins of Congress. Consequently, it is by no means clear a strategy of running against Congress is a winning strategy in terms of Obama’s re-election campaign.

Still, the argument exists that what’s good for Obama’s re-election campaign will ultimate be good for the country once Obama is re-elected? So, let’s take a look at the possible scenarios for the future, commencing on January 20, 2013, the date when President Obama’s second term would begin.

The first scenario is the one where we have a Democratic/Republican breakdown similar to what we presently have in Congress. If this is the case, it is certain the Republicans will immediately start to run for their own re-elections, and the election of a Republican president in 2016, by hammering down the Democratic Party and Obama, just as the Republicans did during the previous four years. Their success at this, particularly since the election in November 2010, has been quite strong. Nothing exists to suggest Obama possesses the wherewithal to fight back, nor does it appear the Republicans will back-away from their winning strategy.

For instance, assume the draconian triggers take effect on defense and non-defense spending because no agreement comes out of the Congressional “Supercommittee”. As Richard Thaler recently observed, Washington Should Try a Little Prudent Self-Restraint, http://www.nytimes.com/2011/08/28/business/economy/washington-should-try-a-little-prudent-self-restraint.html?_r=1&scp=1&sq=%22richard%20thaler%22&st=cse, the cuts don’t actually take effect until 2013, and the new Congress in 2013 isn’t bound by the actions of the previous Congress. Consequently, the next Congress can simply vote to restore spending. Now, given the way Republicans are, and given the way Democrats are, who is going to fair better in restoring funds, Republicans (defense spending) or Democrats (non-defense)?

But beyond this, putting aside issues of actual efficacy of policy, when it comes to the overarching issue in this country, the economy, what will remain is: a) too little contrast between Obama and the Republicans and b) the real perception the Republicans have won, on substance, nearly all the battles with Obama. Of course, this is bound to happen when the distance between the players is small and one player is an Evil Git and the other player is an Indignant Angel.

The fact remains, Obama seems oblivious to the simple nature of the dialectic process (a process that should lead to Obama’s beloved “compromise”): The wider the gap between thesis and antithesis, the greater the number of possible syntheses. And, the greater the number of possible syntheses the greater the opportunity for a win in a zero-sum game or a win-win in a non-zero-sum game. However, because Obama nearly always narrows his options far too much by opening with what he believes is a “reasonable” plan (this is the thesis in the dialectic), particularly as it has pertains to the 800-pound gorilla in the room – the economy, Obama inherently narrows the number of possible syntheses. And, again, when one narrows the possible syntheses, one narrows the possible winning or win-win outcomes. This narrowing of the possible syntheses between himself (Indignant Angel-thesis) and the Republicans (Evil Gits-antithesis) nearly always results in Obama becoming the loser, as Evil Gits nearly always defeat Indignant Angels in a two player game.

But, if one thinks about it, in reality, the most important “player” in our game is a largely unrepresented player – the economy. Furthermore, if economists like Paul Krugman, Robert Gordon, Brad DeLong, Christy Romer, Jared Bernstein, Joseph Stiglitz, etc., are right, neither Obama, nor the Republicans, are pointing us in the right direction for the economy to recover. So, if this group is correct, in the non-zero-sum game of addressing the needs of the economy, it turns out everybody ends-up a loser, Obama, the Democrats, the Republicans and, the most important player of all, the economy. For an empirical study on the subject of what’s needed to turn this economy around, Robert Gordon’s and Robert Krenn’s working paper, The End of the Great Depression, http://faculty-web.at.northwestern.edu/economics/gordon/WPTheEndoftheGreatDepression.pdf (Downloadable .pdf file), is so well-documented that it presents a very persuasive case for at least two conclusions. First, had the fiscal stimulus during the first two years of the Obama presidency been far larger, both the unemployment gap, and gap between demand and capacity, presently in our economy, would be either quite small or nonexistent. Second, the right level of fiscal stimulus, along with proper monetary policy, would still bring an end to this downturn in a relatively short time.

Consequently, if the composition of Congress remains relatively unchanged, the scenario of some sort of replication of the past two or four years, for the two or four years starting in 2013, is, at best, not encouraging, and, at worse, disastrous in terms of the decision-making process in Washington, D.C.

The second scenario is a situation where the Republicans gain a veto-proof advantage in Congress as a result of the November 2012 general election. It is fairly clear what can happen if the Republicans obtain this level of control. To begin, we will get a balanced budget amendment to the Constitution (Raising a very interesting question: How does a country with debt, and a balanced budget amendment, prosecute a war? Inquiring minds want to know!). Additionally, not only will the Affordable Care Act be repealed, so will a whole slew of other “progressive” enactments of Congress. Finally, if the Krugman gang is correct, the economy will continue to deteriorate, or perhaps crater, assuming it doesn’t crater before January 20, 2013. Again, if we end-up with the worst case scenario, a cratered economy, the result will be a non-zero-sum game where everybody loses.

We don’t have to spend too much time on addressing the scenario where the Democrats retake the House, keep the Senate in 2013, but don’t possess a 60% majority in the Senate. The Republicans in the Senate will block anything meaningful from happening. So the outcome is akin to our first scenario.

The final scenario is the one where the Democrats possess a sizable lead in both the House and Senate to, on paper, pretty much do what they want. At this point in time, this is the least likely scenario. What can be said is this is something close to what we saw during the first two years of Obama’s presidency. During those years we did not see an actively engaged president in making the agenda happen (think an LBJ or an FDR). And, as we saw when it came to the enactment of the Affordable Care Act, or the 2009 stimulus package, most of the real work was done by Nancy Pelosi, Harry Reid, Joe Biden and Rahm Emanuel. Even when there exists a “bullet-proof” majority in Congress a president must often engage in actual negotiations to get votes for his agenda, including negotiations with members of the opposing party. From what we have seen to date from Obama, little exists to suggest he possesses the wherewithal, or even the desire, to make the most of a “bullet-proof” majority in Congress. In fact, it might be fair to say things would go better without his involvement as he tends to shoot too low and conceded too much. However, as this is the least likely scenario, we are not apt to find out if he learned anything about negotiation from a true position of power during his first term in office.

In conclusion, what it comes down to is this: 1) As Drew Westen shows in his essay, nothing exists in Barack Obama’s background to suggest actual greatness and true leadership or even the capacity for actual greatness and true leadership; 2) nothing we have seen in Barack Obama’s actual conduct during the first two and three-quarter years of his presidency has shown actual greatness and true leadership (actually the contrary is more true) and 3) whether one looks at Obama’s leadership abilities from a Machiavelli perspective, a Game Theory perspective, or a Freudian perspective, Barack Obama does not possess the capacity for actual greatness and true leadership. The presidency always requires the capacity for true leadership. Furthermore, the times in which we live require actual greatness from the president. Barack Obama can not make a legitimate claim to either. This is the reason he has largely failed, and will continue to fail, especially when it comes to the big issue of the day, and his presidency, the economy.

And to those who will claim Obama couldn’t have done any more because of the Republican opposition, or the changing nature of governing because of the twenty-four hour news cycle, cable TV, etc., the simple answer is: We don’t know that at all. What we do know, however, is, more often than not, throughout all of recorded history, great leaders, leaders who are cut in the image of Machiavelli’s prince and who can play politics at the highest level, find a way to prevail, even under adversity. We also know Barack Obama is not cut from this cloth. So, the only way to find out if the nature of the Republican opposition, etc., changes the calculus to such a degree that, even a great leader could not have prevailed under these circumstances, is to have a great leader and see what happens. Just a thought.


© Copyrighted by James N. Perlman. 2011 All Rights Reserved.

** And it’s because the United States Supreme Court wouldn’t want to tank the economy by ruling against the President on this that, more likely than not, the Court would find a way to write a narrow opinion affirming the president’s power to raise the debt ceiling.

Wednesday, August 10, 2011


My life is made of Patterns
That can scarcely be controlled. – Paul Simon

As a thought experiment, let’s put the United States and world economies in a hospital setting (Not much a stretch, right?). Now, suppose the disease is pneumonia. Where might this take us?

To begin, let’s take a closer look at the disease pneumonia from the perspective of a pattern that often forms with pneumonia. A person, and a person is really a system, can have pneumonia and recover. In fact, the first time a person contracts pneumonia, say in their mid-50's, recovery is nearly always the outcome. Still, in most cases, there is at least minor, albeit permanent, damage to the lungs. However, this damage doesn’t really compromise the body (system) at all.

Years pass. The person is now in their late 70's or early 80's. Again, he or she contracts pneumonia. Again, the prognosis is good and the patient nearly always recovers. But, as before, some further permanent damage to the lungs occurs. Now, things can start to get interesting because, quite often, the patient gets pneumonia again. And it isn’t twenty or thirty years later. Instead, it is five years later. Again, the patient recovers, but, as before, further permanent damage to the lungs occurs. Not infrequently, this leads to a series of pneumonia infections, with further permanent damage to the lungs and a shortening of the duration between the episodes of pneumonia. Ultimately, the patient dies of pneumonia, even if the patient has another “more serious” disease.

If we take a step back for a moment, and just look at the pattern, what we see is fairly obvious: A system that initially takes a hit, recovers and then, in some instances, takes hit after hit, without full recovery, and with a lessening of the duration between hits. I am going to call this escalating pneumonia. Let me submit this is precisely what we saw back in ‘07, beginning with Bear Stearns, and culminating with the implosion at the end of ‘08. Let me further submit, this is precisely what we are seeing right now in Europe (Forget what’s happening to the US stock market this week (8/1/11 - 8/5/11), this is just a symptom.). Europe is sick with escalating economic pneumonia. There exists a lessening of the duration between incidents of pneumonia and the patient is not really recovering from the last incident of pneumonia before the next incident of pneumonia occurs. This has all the makings of a financial crisis spiraling downward, just like our pneumonia patient. So, if we buy into a pattern analysis of this thing, the course seems set, at least in terms of the disease.

But more exists to disease in these days of modern medicine. There are two other factors: doctors and treatment options. Let’s take a look at these factors.

A few days ago, once again, I saw that famous photograph of Roosevelt, Churchill and Stalin at Yalta. Putting aside issues of morality for a moment, let’s pose a simple question: Were all of these men great leaders? The answer, of course, is yes. In fact, what happens if we broaden the picture and put Hitler, Mussolini and Emperor Hirohito in the picture. The answer remains the same: these too were great leaders (Remember we’ve taken out of the equation morality.). They are vile human beings, but great leaders.

When it comes to politics, and economics, our political leaders are the treating physicians. People like Paul Krugman are the research doctors. The research doctors can scream up and down the hallways of the hospital the best treatment option is such-and-such. But if the treating physician/leader isn’t a great leader, or a stupid leader, and he or she chooses the wrong treatment option, the patient doesn’t get better.

Now let’s pose this question: Is there one single leader in the mix of this economic mess who is a great leader? The answer I come up with is no. Say what you will about the intelligence of Obama, Sarkozy, Merkel or Cameron, I don’t think anyone can reasonably claim these are great leaders. Right now, perhaps, we have only one great leader of an important nation-state and that’s Putin. And Putin doesn’t have a pony in this race. So, from where I am sitting, we have a bad case of escalating economic pneumonia and less than stellar leadership.

Well, even with a bad case of pneumonia, and even a middling doctor, a patient can get better because, even a middling doctor can fumble into the right treatment option. (This is where I have to cheat a bit in terms of the title of this piece, but only a little.) Suppose research doctor Paul Krugman is running up and down the hallways of the hospital and screaming: “This patient is in need of a medication that treats gram-positive bacteria right now.” However, at the same time, research doctor Alan Greenspan is screaming, just as loud: “This patient is in need of a medication that treats gram-negative bacteria right now.” The treating doctor decides to listen to Dr. Greenspan. Unfortunately, the patient has a gram-positive bacteria. So the patient doesn’t get any better. In fact, the patient gets worse.

Of course, the doctor can simply change over to the gram-positive medication and still save the patient. But, what if the doctor has pretty much, out of the box, claimed: “I don’t believe in gram-positive bacteria.” Then, in order for this doctor to properly treat the patient, he or she would have to admit their belief system is flawed and change treatment protocols. Changing a belief system is tough. And, usually, it will take a few dead patients for this doctor to reconsider. Or, let’s say the doctor believes in gram-positive bacteria but, because of hospital politics, the doctor can’t prescribe medications that treat gram-positive bacteria (An example of this is the situation in Europe where, because of the single currency, individual nation-states can’t devalue their currency as a monetary strategy.). This can be an explanation for an action, or inaction, but the patient doesn’t benefit. Or, let’s say the doctor believes in gram-positive treatment medications, hospital politics don’t necessarily rule out gram-positive treatment options but, damn, the hospital pharmacist has a belief system that doesn’t allow the dispensing of gram-positive treatment medications (Hint: Does this sound just a little bit like the Republican Party in the United States Congress?). Again, this can be an explanation for an action, or inaction, but the patient doesn’t benefit. So, at least to me, this looks like a good time to print up the toe-tag for this pneumonia patient.*

Of course, the big difference between our pneumonia patient and the economies in the United States and Europe is the economies are not likely to completely expire. But, the point I am trying to make with the analogy, admittedly forced at times for the purpose of explication, is even if we ignore all the facts and figures, all of the macroeconomic theories, we are still in very dangerous territory. Further, I am suggestion that while all, or nearly all, depressions and deep recessions have a financial collapse at their inception, this is just a symptom. After the financial crisis has run its course, the underlying causative agents remain active until treated.

At the end of the day, or at the end of this day, where I think we are at right now is this: First, the treating doctors don’t even agree on what disease the patient has or the treatment course (And remember, at least for this factor, it is largely irrelevant what the research doctors believe or disbelieve.). Second, the treating doctors have to be objectively right in their diagnosis and treatment course. If they are not, the patient doesn’t get any better and could get worse. If economists like Paul Krugman are correct, we are even farther from this factor than the first factor as, presently, the dominant course of treatment, on both sides of the Atlantic, is short term fiscal austerity, while economists, like Krugman, support short term fiscal stimulus and long term fiscal consolidation (particularly for the United States.). Third, most, if not all, of the obstacles for proper treatment have to be removed. Certainly, this will mean removal of the obstacles to prescribing the correct medication. However, this might also require removal of the current treating physicians, and replacing them with great treating physicians, who are also great leaders, as great leaders are often required for removal of obstinate obstacles. Additionally, as history informs, in situations like we presently have: 1) inadequate leaders; 2) poor policy; and 3) disaffected segments of the population, before great political leaders can do their job, quite frequently, great grass-roots leaders must appear to successfully organize the disaffected. In this regard, concerning the United States, as there exist some similarities between where we are now, and where we were during the Gilded Age, it would be a mistake to summarily conclude the United States won’t need the appearance of grass-roots leaders as part of the recovery process.

So, if you are afraid, you have every right to possess this fear. It seems we have a long way to go before this starts to turn around.


* It bears noting that there is a variant of the gram-positive/gram-negative argument that would apply to the current economic argument in the United States. This variant is where Krugman calls for 20 cc. of a gram-positive antibiotic, Greenspan calls for 10 cc. of a gram-positive antibiotic and the treating physician chooses 10 cc. This is the analogy to choosing an insufficient fiscal stimulus program.

© Copyrighted by James N. Perlman. 2011 All Rights Reserved.

Thursday, January 27, 2011


Abigail Washburn's City Of Refuge contains many moments of sheer, breathtaking, beauty. It is always musically accessible yet, at the same time, musically challenging. Abby does something quit rare here. And it is something very few composers can pull off successfully. She mixes many, and varied, styles, sounds and instruments into her compositions. Working backwards, I can see how she pulled this off. But she was working forward when she co-wrote these songs with Kai Welch and there really is little musical precedence for some of the mixtures she conjures on this album. This is musical inventiveness of a very high order. It may be what makes Abby special and distinct.

Before going any further, some housekeeping is in order; a disclosure: I have been a friend of Abby's family for a very, very, long time. I knew her grandfather (he was an important teacher in my life), know her grandmother, her mother and her uncle (I know her father as well but for only 35 years or so.). One can read what I have to write as either the thoughts of a shill or the thoughts of someone who has been carefully following this young, talented, artist for the past five and a half years with great pride but with honesty (much of which has been shared with the artist :) ).

When Abby released her first album in 2005, Song Of The Traveling Daughter, many were astonished how this unknown could forge a perfect marriage of Chinese tonalities with root Americana music. It was a triumphant, fully realized, album. The follow-up, Abigail Washburn And The Sparrow Quartet, was a more ambitious and somewhat flawed effort. There were fine moments, and stellar playing (How could there not be with three virtuosos as part of the Quartet.). But the main import of the Sparrow Quartet was the fact that for close to two years Abby got to play music in the studio and on the road with Bela Fleck, Ben Sollee and Casey Driessen. I don't know if Abby sensed it was not really time to make such an ambitious record with these players. But I do know Abby was convinced she had to continue to play with the Quartet. And the payoff for that decision, and it is a glorious payoff, is the music on City Of Refuge. The music on City Of Refuge does not happen without what musically happened when the Quartet played together on tour. Now, a little bit about each song on City Of Refuge:

1. Prelude: This short "prelude" clears the palate, reminds the listener of Abby's affection for Chinese tonalities and, most importantly, tells us this is going to be an album and not a mere collection of songs.

2. City Of Refuge: A fine song that would have fit comfortably on Song Of The Traveling Daughter.

3. Bring Me My Queen: Queen's delicate start shows Abby's growing understanding of the value of space between notes and singing less. Very nice classical colors in the bridge.

4. Chains: A song by Kai Welch and Tommy Hans (two players on this album) and probably the most straightforward pop song in structure and instrumentation on this album. A note about Kai. Kai is very cool. A multi-talented musician and, as written above, he shares song-writing credit on almost all of these songs.

5. Ballad Of Treason: One of my favorites on this album, a chamber piece feel and presentation.

6. Last Train: This song contains some nice subtle colorations from the strings and a great sense of vocal harmony.

7. Burn Thru: Starts with the unmistakable intro that something special is gonna happen and it does; including a choir, violin, viola and some nice Hal Blaine influenced, but understated, drum playing.

8. Corner Girl: A fine song.

9. Dreams of Nectar: I am not gonna spoil this one. A staggering number of musical styles are placed, but never jammed, into this one song. When I first heard Song Of The Traveling Daughter I could tell Abby was a musical sponge of sorts. Here, she wrings that sponge out and creates a masterpiece. This is a major composition showing how completely unafraid and confident Abby is to just follow her musical instinct and, much more often than not, to be correct.

10. Divine Bell: This is the type of song that shows one of the many things that makes Abby special. Abby can write a new song and make you believe it is some sort of classic from the south. I defy you to not break out into a smile.

11. Bright Morning Stars: A largely a cappella coda to place the cherry on top of a first rate album. Nice subdued pump organ from Kai and fiddle from Jeremy Kittel.

When I look back to the summer of 2004, when I first heard Abby perform, I can't help but be personally pleased for her and her family. But, beyond that, I am pleased for the art of making music. A somewhat scruffy woman, in her mid-twenties at that time, has turned into, and grown into, a true artist. The type of artist capable of making music that will repay listening and has every indication of becoming a career that, over the course of time, will surprise with its ever increasing inventiveness and boldness. Please buy this album and make sure you see her on tour. She is developing into a wonderful live performer. These songs may not sound identical on tour. But another thing about Abby is she can re-arrange songs for touring that in no way leaves one feeling cheated when the songs are not presented in the same way as on the album. (OK, that was a little bit of shilling. I confess!)

© Copyrighted by James N. Perlman. 2011 All rights reserved.