Never Just One Subject

THE EUROPEAN UNION AND DIGITALIS

2011-11-15T17:01:00.004-06:00

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.

PRESIDENT OBAMA’S “AMERICAN JOBS ACT” – PLUS

2011-09-30T19:20:00.006-05:00

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.

9/10/2011

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

ANYWAY YOU LOOK AT IT YOU LOSE – TWO METHODS FOR EVALUATING BARACK OBAMA’S LEADERSHIP ABILITIES

2011-09-03T17:44:00.007-05:00

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.

09/03/11

© 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.

2011-08-10T16:02:00.001-05:00

LOOKING AT THE WORLD ECONOMY WITHOUT LOOKING AT ECONOMICS

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.

08/04/2011

* 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.

ALBUM REVIEW -- ABIGAIL WASHBURN: CITY OF REFUGE

2011-01-27T14:12:00.004-06:00

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.

THE (HERETOFORE OVERLOOKED?) INNOVATION IN BANKING IN THE PAST 30 YEARS AND ITS EFFECT ON OUR PRESENT ECONOMY

2010-08-31T10:29:00.006-05:00

This piece is about something that I think people have sort of talked about, and around, but not really homed-in on adequately and placed in the proper economic historic framework. It is about another significant “innovation” that occurred over the past 30 years that has run the course of boom to bust and how people didn’t see this innovation in the proper historic boom to bust frame. As you know, I have previously framed much of the deterioration in the economy to the huge historic economic arch of a paradigm shifting innovation, that leads to a ramping-up in overall economic growth, which then ends in a mature “product” that has little room for enough growth to keep the economy growing. (See Below ***) Additionally because the creation of the product becomes more “efficient” this leads to higher productivity and, consequently, jobs are shed in the end-term process. The end result is either a severe recession or a depression. We have seen this time and time again beginning with manifest destiny (our country’s growth west) and also includes electricity, the transistor, the post-war baby boom and computers. The one that seems to have been left out of the discussion to date, at least in the context of the historic arch in which I have expressed interest, is the one I wish to write about: a paradigm shifting innovation in banking.

Through most of the twentieth century banking was local and, therefore, relatively small on a company-to-company level. State and federal regulations created this structure. However, starting in the late 70's, these regulations were lifted. As a result, banks became larger, crossed state lines, and, arguably, more efficient (See: The Real Effects of U.S. Banking Deregulation, http://research.stlouisfed.org/publications/review/03/07/Strahan.pdf). The author of this article, publishing in 2003, lays out the history of this deregulation and how it has seemingly lead to a significant amount of overall growth in the economy. He saw this is being “all good” but he didn’t see the dark side and he didn’t see the historic boom to bust frame I have referred to previously. In fact, all he saw was good times ahead. Of course, he was wrong.

One of the reasons he was wrong was he failed to consider the general historic boom to bust frame, more on this shortly. But another reason he, and others, were wrong, was that he/they didn’t see the inherent problems of taking small, largely privately held, banks away and leaving large, stockholder-owned, banks in their place. I believe this to be a significant mistake. As Paul Krugman summarized in a 2009 article in the NY Time Magazine:

By 1970 or so, however, the study of financial markets seemed to have been taken over by Voltaire’s Dr. Pangloss, who insisted that we live in the best of all possible worlds. Discussion of investor irrationality, of bubbles, of destructive speculation had virtually disappeared from academic discourse. The field was dominated by the “efficient-market hypothesis,” promulgated by Eugene Fama of the University of Chicago, which claims that financial markets price assets precisely at their intrinsic worth given all publicly available information. (The price of a company’s stock, for example, always accurately reflects the company’s value given the information available on the company’s earnings, its business prospects and so on.) And by the 1980s, finance economists, notably Michael Jensen of the Harvard Business School, were arguing that because financial markets always get prices right, the best thing corporate chieftains can do, not just for themselves but for the sake of the economy, is to maximize their stock prices. In other words, finance economists believed that we should put the capital development of the nation in the hands of what Keynes had called a “casino.” How Did Economists Get It So Wrong? http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?_r=1&scp=3&sq=krugman&st=cse (Emphasis added)

Now here’s the problem created by this “irrational exuberance” Krugman writes about. When there is an innovative “product”, “service”, “paradigm”, that begins its inevitable transition from maturity to petering-out, a company is caught between a rock and a hard place because growth declines as the innovative “product”, “service”, etc., matures. Declining growth means declining profits and declining profits mean declining stock prices. Yet, if one accepts the “efficient-market hypothesis” the solution for any company becomes the creation of “the appearance of growth” at any cost because, if you don’t, your company tanks in the stock market. Although it is a minor example, I see evidence of this “profit at any cost,” and the petering-out of the banking innovation, in the recent report that some financial institutions are looking into the possibility of purchasing grandpa’s and grandma’s insurance policies for needed cash (needed because of the market crash) and then packaging them into bonds as they did with the mortgages. http://www.nytimes.com/2009/09/06/business/06insurance.html?scp=8&sq=insurance&st=cse To me, this is evidence of how desperate these companies are for profit-making services and, if they have to stoop to this level, how bad the situation really is.

While it is not my area, I think that if someone looks at the development of these financial derivatives, loose mortgage and other lending practices (that were necessary to insure continued profits to satisfy the “efficient-market hypothesis” beast), you might just see they started around the same time as the banking expansion that started in the early 80's was losing some of its velocity. These large banking institutions needed these new revenue sources to prop-up their profit sheets (Rule “efficient-market hypothesis,” rule) and no one bothered to ask the question whether this was sound because the “efficient-market hypothesis” ipso facto conferred soundness on these practices.

So where does that leave us. Well, if I am right about this, and the other innovation I wrote about previously (computers), here’s what I see. First, I now see two, not one, innovations that have reached their post-economic growth creation phase: a) the banking innovation and b) the computer innovation (and remember how much a part of our economic growth these two “innovations’ have been in the past 20-30 years). Second, while I see the banking innovation running the usual course, as I wrote previously, the computer innovation will continue to cause problems because, unlike any previous innovation, the computer innovation will continue to make companies more efficient, and they will have to become more efficient in this economic climate, therefore jobs will continue to be lost. Third, as tax revenues continue to decline, particularly on the state and local levels, the one area that has seen genuine job growth over the past ten years, government jobs, will see both lay-offs and an increase in furlough days and the like. The effect on consumer spending of this is obvious. Fourth, we still have the commercial real estate and consumer debt bubbles to come. More or less, I believe this will remain the situation until: a) our economy flattens out vis a vis the rest of the world; and/or 2) we come up with that random paradigm shifting innovation to jump-start sustained, accelerated, growth sufficient to recapture the millions of jobs lost up to the point of the appearance of this new innovation.

*** 2/21/09

I am still caught in this thought pattern where I can't really see a way out even in five years, and remember the FED said this is predicated on nothing else really going wrong. In the column earlier this week, Krugman observes the CBO has projected there will be a $2.9 trillion difference over the next three years between what industry can produce and what can be consumed. When I went back to my text book on the economy, I saw that sort of discrepancy, between productivity and consumption, seems to be a factor in bringing about a depression. On the plus side, this is why we must, at any cost, create jobs. But, long term, I see this as possibly being very different because what has brought about increased productivity, computers, etc., will continue ad infinitum, meaning some sort of continued downturn in jobs. In fact, as business continues to worsen, existing businesses will be forced to become more efficient/productive and those changes will not go away upon recovery. Right now, I see this as possibly being some sort of reverse Malthus thing where there may never be enough consumers for full production, and jobs continue to decline until the next huge thing (like electricity, the combustible engine, etc.) that will result in the creation of a large number of jobs directly or indirectly. This sort of thing cannot be planned. It is like a mutation, it just happens. The other thing that worries me is during the Great Depression, it was the commercial banks, largely, that purchased the debt that drove the New Deal and then the War. As such, as my text book put it, our debt was largely contained within our boarders. Not so this time around. So when the time comes to pay the debt back, instead of the debt being in our economy, it will be in some other country's economy. Thus, ultimately, we will lose this potential multiplier.

© Copyrighted by James N. Perlman. 2010 All rights reserved.

THE GREATEST LOVE SONG OF THE MODERN/ROCK ERA

2010-04-25T19:44:00.005-05:00

A few days ago, a friend and I were discussing the greatest love songs of the modern/rock era. As we were going to see Mark Knopfler later that night, and his song “Romeo and Juliet” was on the radio at the moment this conversation was occurring, it was easy, and correct, to put that song in the top ten. Later that night, Knopfler proved the point at the Chicago Theatre.

Also on the list must be John Lennon’s “In My Life” even though it was inspired by you-know-who (Bring to the fore the importance of not getting confused between art and the object of the art.). David Bowie’s “Heroes” belongs at the top of this list too. But now that I have had the opportunity to think about it some more, and just happened to listen to this song this morning, I have come to realize the greatest love song of the modern era is Bob Dylan’s “Tangled-Up In Blue.” Allow me to explain.

The significance of Bob Dylan to the craft of song writing cannot be overstated. There is before Dylan and after Dylan. The after Dylan is that from this point on, a song, particularly a love song, could be as emotionally complex, as filled with white hot anger, as other forms of art. Dylan will start arguably his most important song with “Once upon a time” and then go on to prove there was never a once upon a time quite like this in any previous song. Previously, white hot anger had been only hinted at and some times hidden. Woody Guthrie’s “This Land Is Your Land” is actually an angry song (written as an angry response to Irving Berlin’s “God Bless America”). But Woody hid that so well, to his regret later in life, that even now people like Glenn Beck are surprised by its real meaning. But all you have to do is read the legendary, and forgotten, fifth and sixth verses, and the meaning is plain as day:

As I was walkin' - I saw a sign there
And that sign said - no tress passin'
But on the other side .... it didn't say nothin!
Now that side was made for you and me!

Chorus

In the squares of the city - In the shadow of the steeple
Near the relief office - I see my people
And some are grumblin' and some are wonderin'
If this land's still made for you and me.

http://www.arlo.net/resources/lyrics/this-land.shtml

Dylan added and built upon songs like this. One thing that Dylan did was to both obscure and yet deepen meaning, often at the same time. Interestingly, perhaps the best place to find this is in Dylan’s long poem “Last Thoughts On Woody Guthrie.” In this poem, Dylan goes on for line after line, something like nine minutes, seemingly at times not making any sense at all, and then he drops the bomb of simplicity and beauty right there at the end:

You can touch and twist
And turn two kinds of doorknobs
You can either go to the church of your choice
Or you can go to Brooklyn State Hospital
You'll find God in the church of your choice
You'll find Woody Guthrie in Brooklyn State Hospital

And though it's only my opinion
I may be right or wrong
You'll find them both
In the Grand Canyon
At sundown

http://www.bobdylan.com/#/songs/last-thoughts-woody-guthrie

And with these last few lines, you now know that every seemingly senseless line now makes perfect sense. No one in the pop idiom had ever done anything like this before. But Dylan has done it time and time again; just like he does in “Tangled Up In Blue.”

Let’s start with the title. The protagonist(s) isn’t blue, he’s tangled up in blue. As Johnny Slash would put it: “Totally different head, totally.” Delve deeper into the song and you find jumps in time and space. A lack of clarity as to whether there are one or multiple protagonists. Then there is the flood of lyrics and images, my favorite being:

And every one of them words rang true
And glowed like burnin’ coal
Pourin’ off of every page
Like it was written in my soul from me to you
Tangled up in blue

http://www.bobdylan.com/#/songs/tangled-up-in-blue

The brilliance of Dylan in this song is while each verse seems to change location, change time, he puts you right there with his images and you don’t know, you feel, exactly what he wants you to feel. And what he wants you to feel is the inevitability of the last verse, that starts out:

So now I’m goin’ back again
I got to get to her somehow

But still, by the end of the song, it isn’t clear whether he will or he won’t. It is also clear it is absolutely meaningless whether he does or doesn’t. Love’s like that. And so is Bob Dylan. No one wrote a love song quite like this before and no one succeeded better. Sounds like a Number 1 to me.

© Copyrighted by James N. Perlman. 2010 All rights reserved.

USING GAME THEORY TO ANALYZE BARACK OBAMA’S AND THE DEMOCRATIC PARTY’S FAILURES IN THE HEALTH CARE DEBATE

2010-03-15T17:53:00.003-05:00

Game Theory is a powerful tool to analyze and strategize a situation like the health care debate. Last week, I watched the first on-line lecture by Yale professor, Benjamin Polak, on Game Theory. http://academicearth.org/courses/game-theory It was during Prof. Polak’s presentation, in 2007, but founded on the most basic of Game Theory principles, that I began to analyze the health care debate under Game Theory.

At this point, without getting to the other lectures, which I haven’t seen but intend to, what seemed clear to me is President Obama selected the wrong opening strategy for framing the health care debate, which he is now correcting, but with the damage already done.

The five rules Prof. Polak set out in the first Game Theory lecture 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.

Prof. Polak also sets out two types of players: the Evil Gits and the Indignant Angels. He informs that being an Evil Git is always advantageous if the payoff is larger 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 choose a comparable Evil Git strategy, e.g. choose a dominant strategy, in order to obtain the best possible result. When I apply these rules to the health care debate, here’s what I see.

The Republicans have been nearly uniformly the student who is going for the A, the largest personal payoff, without thought to the other players. Further, we have known from the get-go what the Republicans want as the payoffs: a return to power. They never possessed an actual interest in a process of compromise that would result in a health care bill. Thus, in the health care debate they are the Evil Git. Obama failed to consider rules 3 and 1 above by putting himself in the Republicans’ shoes and thereby understand what the Republicans wished for as their desired payoff. Instead, Obama employed a rational course of action and, in the process, framed himself as largely an Indignant Angel. As a result of Obama’s failed analysis, under a Game Theory paradigm, he needlessly boxed himself into a largely dominated posture.

I am sure when I get to the other lectures by Prof. Polak the available options that Obama, and the Dems, possessed will become clearer. Quite possibly, there were other opening strategies that would have been more fruitful before Obama migrated to the end-game Evil Git strategy. But, at the very least, one can say that initially meeting an Evil Git strategy with an opening Indignant Angel strategy was flawed. Further, I believe Obama has waited too long to correct his mistaken opening strategy. He may still get a health care bill. But, in the process, he has incurred more damage than needed.

The potentially good news is now Obama is finally meeting the Republicans’ Evil Git strategy with an Evil Git strategy of his own. This started with the televised Health Care summit a couple of weeks ago where Obama began to reframe his strategy as less dominated Indignant Angel and more Evil Git. Obama finally understands what Nancy Pelosi has understood all along: that when the payoff is greater, in this instance the Republicans’ desired payoff to foil Obama and return to power in both Congress and the White House, this has to be met with a comparable Evil Git strategy. This is one of the reasons the right can’t stand Pelosi. Evidence of Obama’s conversion can be found in comments by, and about, Rahm Emanuel in this Sunday’s New York Times Magazine article about Rahm,
http://www.nytimes.com/2010/03/14/magazine/14emanuel-t.html?scp=2&sq=rahm&st=cse, where it was reported:

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.”

This is precisely, I mean precisely, the frame that Obama was crafting during the health care summit. Matt Drudge gets this. So do the other conservatives. This is why their rhetoric has become so strident and shrill since the summit.

Back in the Depression, Roosevelt's brilliance was: 1) he employed a largely dominating strategy; 2) he communicated often and powerfully with the American people and 3) he was a natural father figure. How perfect for the times and the problems he faced. Obama doesn't have #3. But he certainly possesses the skill to have done a better job with #2 and he chose to play a strategy that allowed the Republicans to dominate. All this should have been obvious under the known circumstance if he, and his advisers, had initially used Game Theory more fully to analyze the problem from the beginning instead of apparently coming to it this late in the process.

© Copyrighted by James N. Perlman. 2010 All rights reserved.

2009-10-22T16:56:00.012-05:00

SO, HOW DO THEY SOUND? THE HOWS AND WHYS OF THE 2009 RE-MASTERED MONO AND STEREO BEATLES CATALOG

GIVEN THE LENGTH OF THIS ESSAY, I RECOMMEND SIMPLY SELECTING ALL OF THE TEXT AND THEN PASTING INTO YOUR WORD PROCESSOR FOR BETTER READABILITY.

YOU CAN ALSO READ IT ON THE WEB WITH MUCH BETTER RESOLUTION AND GRAPHICS AT: HTTP://WWW.BEATLESWIKI.COM/WIKI/INDEX.PHP/REVIEW:_BEATLES_MONO_AND_STEREO_REMASTERS_BOX_SETS

INTRODUCTION

On September 9, 2009, EMI/Capitol released the entire Beatles catalog, both stereo and mono, in a re-mastered CD format. The primary purpose of this essay is to discuss the re-masters largely in terms of their sound. Listening occurred on what would be considered an audiophile system with Quad 988's and a Rel sub-bass as the speaker system. The conclusion I reach, after listening to both the mono and stereo re-masters, is that, overall, the mono re-masters are the better, truer, releases, not only in terms of content [as most of us know the monos were the mixes the Beatles and George Martin worked toward through The Beatles (The White Album)], but as also in terms of pleasure, and trueness, of the listening experience.

UNIVERSAL OBSERVATIONS ABOUT THE SOUND OF ALL OF THE RE-MASTERS

Before I address the primary subject of this article I want to address the first question many people ask when it comes to these re-masters: Why re-masters instead of remixes and re-masters, as has been done with other catalogs from other musicians and groups from this era? When we think about the process of getting Beatles material into commerce, it seem pretty logical that re-masters are probably the way it had to be in order to get these albums out. Sometimes we forget that in order for this enterprise, or most any Beatles enterprise, to get off the ground Paul, Ringo, Yoko and the Harrison Estate have to come to an agreement. It is one thing to start a new project, like Love, and do a remix. It is quite another thing to start down the path of a remix of the core, legendary, catalog. A deal breaker could be just as simple as someone complaining that in a proposed remix someone else had been mixed louder than in the originals. That would end the discussion. For this reason, we will always be “stuck” with re-masterings, or re-issues on advanced formats, rather than any form of remix. It is also the reason why EMI really didn’t involve any of the Beatles in this project. Instead, when the project was finished, EMI presented the finished products to the Paul, Ringo, Yoko and Olivia Harrison and they were simply asked for a thumbs up or down. Stereophile, October, 2009, Vol. 32, No. 10, p. 117

Once it is realized a remix just couldn’t be in the cards (thereby really improving the sound, as we heard in Love and Let It Be Naked), the re-mastering team was confronted with the original master tapes. Now, another problem crops up: the quality of the sound of the original recordings. Most people understand that from a technical perspective, at best, these were only OK recordings for the time. No one claims these were great recordings [save perhaps for Abbey Road and possibly The Beatles (The White Album)]. The reasons the bulk of the catalog can’t be considered "great" recordings are because of the technical limitations at Abbey Road Studios I discuss later in the individual review of the album A Hard Day’s Night. The reality of the matter is the Beatles monos do not even compare favorably with earlier American monos, such as Buddy Holly or, going back even further, Little Willie John. Similarly, overall, British stereo recordings from this era tend to lag behind American stereo recordings.

Consequently, the re-mastering team was confronted with two very significant inhibitors in terms of making these re-issues sound great: 1) they couldn’t re-mix the albums and 2) the actual sonic quality of the source material.

The aforementioned Stereophile article also provides additional technical information regarding the re-mastering process that is pertinent to my conclusions about how these re-masters sound:

1. Tape Recorder used: Studer 80.
2. Compression/limiting, yes on the Stereos but "gingerly" according to Allen Rouse. Specifically, according to Rouse, the average level of the mixes was raised 3-4 dB “to make better use of the CD’s dynamic window.” Stereophile, November, 2009, Vol. 32, No. 11, p. 3. Limiting was not performed on the monos. When asked why limiting was used on the stereo re-masters, Rouse replied: "When everybody stops limiting, then I guess that's probably the best thing that can happen, but everybody wants theirs louder... Everybody had phasing; it was a fashion, and then eventually people grow up and work out how far and how much you should use these things." Rouse stated they did not want to compromise the dynamics. But, as the graphic below seem to indicate, dynamics were affected.
3. Pro Tools, yes at 24 bits/192 via Prism A/D converter.
4. NoNoise, yes but only for a total of 5 of 525 minutes. If you want to read up on No-Noise, here is a link: http://akmedia.digidesign.com/products/docs/prd_3180_8544.pdf

Point No. 2 from the Stereophile article provides a launching point for one reason I find the mono re-masters more satisfying than the stereo re-masters.

If one takes a very simply oscilloscope, found in any commercially available CD burning software, it is clear very little was done to the mono re-masters, just as Rouse stated. Here is a graphic of the song “A Hard Day’s Night” taken from the 1987 mono re-issue (Because of the size limitations of pictures on this blog, you may wish to save the individual images to your hard drive and, thereafter, blow them up for better viewing.):

Now let’s look at the same track from the 2009 mono re-issue:
There is slightly less headroom in the 2009 re-master, and the track starts with a tad more gain. But, if anything, the 2009 mono actually shows a bit more definition in the dynamics without any clipping. On paper, this appears to be a good thing and a good job.

Regrettably the same cannot be said for the stereo re-masters. As written above, compression/limiting was used on the stereo re-masters. Compression changes the sound and wave form. It can make things sound uniformly, or more uniformly, loud. It can make a recording fatiguing and/or harsh. Dynamics at the peak of sound are almost always affected. Some sources for further reading on the subject of compression/limiting can be found at:
http://www.harmony-central.com/Effects/Articles/Compression/
http://en.wikipedia.org/wiki/Loudness_war

Again, the use of a simple oscilloscope reveals how this manifest itself in the 2009 stereo re-masters.

First, here’s a graphic of “A Day In The Life” from the 1987 CD:
Now here’s a graphic of the same song from the 2009 re-master:
Now look very closely at the graphs. In a few spots you can actually see where the tops of the volume are cut off by the compression in the 2009 stereo. One place is at the end of the song before the final piano chord. Notice how on the top channel the piano chord is as loud as the preceding orchestration as it reached its peak. Yet, in the 1987 graphic, you can see how the end of the orchestration is actually louder than the piano chord. Any question regarding the relative actual loudness of the orchestration versus the piano chord is resolved by looking at the graphic of the 2009 mono:
Ears can play tricks on us. Oscilloscope, not so much. Let’s be clear about this: Perhaps the most important moment in the entire Beatles catalog has been altered.

Another place is about 1/2 of the way into the song on the top channel. A third revealing part of the two graphics is near the beginning, after the crowd noise from “Pepper’s Reprise” dies down. Look at the relative bloom in sound, on both channels, when the 2009 graphic is compared with the 1987 graphic. While this bloom is most apparent at the beginning of the song, it continues on throughout. This bloom is separate from the fact the song starts out with slightly greater initial gain in the 2009 re-master. A further example of this bloom can be found by comparing the decay of the piano chord in the 1987 and 2009 graphics. Again, notice the bloom in the 2009 re-master. A final revealing portion is the funky “Answer me never” found at the end of the LP. All these artifacts are functions of the compression applied to the stereo re-masters.

Hence, there should be no mistake about this, the stereo re-masters have changed the music. One can argue whether this results in a better sound, but most would argue it doesn’t. What cannot be contended is that this is the “same” music from the standpoint of dynamics of the recordings. These graphics, and you can find many, many other examples in the 2009 re-masters if you look, explains to me why, overall, I find the stereo re-masters lacking. I can hear the artifacts that are prevalent in a compressed recording. This affects the “musicality” of the recording. And, at the end of the day, what counts most to me is the "musicality" of the recording.

All this provides objective evidence for the conclusion the stereo re-masters are lacking. But there is an addition reason the monos, overall, sound better. This reason flows from the actual recording process. It has been said, many times: the Beatles and George Martin spent most of the time working on the mono mixes. While emphasis has been placed on the notion the monos are the definitive mixes in terms of content, and in a purist sense they are, there is another, less obvious reason, the monos sound more musical. This reason has to do with the actual recording process. Remember, each track recorded (track used in the context of this and the following paragraph means track on a tape, not the full song; as in track on an album), that was later used in both the mono and stereo mixes, was designed to fit in with the overall sound of the mono mix of each song. Thus, at the end of the mix of the monos what exists is the full musical puzzle; with all the pieces in their proper place relative to the other. This results in the intended musical puzzle fully assembled.

When George Martin went to do the stereo mixes, he took many of the individual tracks, pieces of the puzzle, that were designed to fit into the final full mono puzzle, and separated them from the whole. Consequently, while, in almost every instance, these separate pieces of the puzzle sound clearer and more distinct in the stereo mixes (and this has its advantages when one actually wants to examine individual piece of the puzzle; say a Paul bass line or a John’s harmony), many times the individual pieces of the puzzle sound out of context or thin or harsh, etc. in the stereo mix. This may not have sounded so wrong to many of us, particularly to those of us living in the United States, as all we really knew were the stereo mixes. But now, as many of us are hearing this complete catalog of music in the mono format for the first time, we can now actually hear the full musical puzzle as it was intended, with all the pieces of the musical puzzle properly assembled. For this reason, it really shouldn’t come as much of a surprise that many are coming to the same conclusion: the monos, overall, sound more musical and, overall, provide the more satisfying listening experience. The reason for this is simple, the monos sound more musical because the intent behind each track was that it be used to assemble a mono mix, not a stereo mix. Sure, the vast majority of these same individual tracks were later used for the stereo mixes. And sure, they will sound individually clearer (Because they are, in varying degrees, separated from the sound as a whole.). But this doesn’t change the controlling point, that from a production perspective, a musicality perspective, it obviously makes a world of difference that these tracks were recorded to fit in a mono mix not a stereo mix.

While there are many songs from which to choose to illustrate this point, let’s examine one song, “Can’t Buy Me Love,” brought to my attention by S. Brauner. In the ‘09 mono Ringo’s drums drive the song. Ringo’s drums give the song it its energy. The volume is right up there with Paul’s lead vocal. However, when you go to both the ‘09 stereo mix and a mid-70's vinyl stereo mix, where Ringo’s drums come out of one speaker, they are muted and, consequently, there is a loss of energy to both of these stereo mixes. I think it is fair to conclude that when it came to the stereo mixes, George Martin, for production/sonic reasons, had to dial back the drums when he put them on one side of the mix. Still, the musicality and, arguably, the pleasure of the song is compromised by what Martin, no doubt, had to do in order to create a stereo mix. Obviously, there are any number of songs in this catalog where the same sort of analysis could be made.

All this said, I acknowledge that musicality is only part of the calculus, albeit a very large part. Clarity, tonality, dynamics, the ability to hear separate sounds, all play a role in creating the full listening experience. Thus, as will become evident in the individual reviews that follow, the heightened clarity of a stereo mix can overtake the mono mix, when the musicality is not compromised, or not, overall, compromised significantly (A Hard Day’s Night, The Beatles For Sale) or when the material cries out for stereo and the stereo mixes musicality isn’t significantly harmed (Magical Mystery Tour) as opposed to when the musicality is significantly harmed by the nature of the stereo mix (Sgt. Pepper’s Lonely Hearts Club Band). There are even instances where the compression applied provides a benefit. This is most prominent in the pre-Rubber Soul stereo re-masters where the compression adds a bit of needed body to the tracks. This compression is somewhat similar to what Capitol did with the early releases here in the United States when Capitol enhanced the tracks with reverb and the like.

Still, in the end, I cannot come to the conclusion the stereo re-masters are the definitive/best available stereo renderings. Instead, my recommendation is that people interested in the best stereo experience should stick with, or go to, either early EMI pressings or the Mobile Fidelity pressings. There are also some early 21 Century Japanese pressings, released at the same time as Let It Be Naked, which sound quite nice and quiet. As for the mono re-masters, as I only have one Beatles mono on vinyl, Sgt. Pepper’s, in a Japanese mid-1980's pressing, the only thing I can say is the two sound very, very, similar. As Pepper’s seems to be the most challenging recording in the Beatles’s catalog, this augers well for a conclusion the entire re-mastered mono project will compare favorably with mono vinyl pressings.

Now that my general impressions of the sound quality of the stereo and mono re-masters is complete, attention can be placed on the individual albums.

THE INDIVIDUAL ALBUMS

Please Please Me: The sound on the mono is just amazing. You can really hear the fullness of the echo as John sings Anna. The vocals just soar. Ringo was just so good, even at this early stage and so was Paul. They supported and framed the songs so perfectly. While the mono is the winner, the stereo has things to recommend. There is a bit more clarity, but this comes at the expense of fullness. If one is not bothered by the left right separation found in this, and With The Beatles, the stereos provide a complementary listening experience.

With The Beatles: As with Please Please Me, the mono sounds so, so, nice. The stereo is perhaps not quite as good PPM, but the same overall comments above about the stereo PPM apply.

A Hard Day's Night: Because of the way HDN was initially rolled out here in the states, soundtrack not the EMI version, I think HDN is a bit of an overlooked album by the group. The album seems better and more enjoyable in stereo as you do get the clarity, without some of the negative sonic artifacts I find troubling on Pepper's, etc. I think the reason is that they now had four tracks so George Martin could do proper stereo mixes and still have a mostly fresh first generationish sound. Remember, there were only two track available for Please Please Me. However, when they got to Rubber Soul and Revolver, four tracks weren't enough, which required, in some instances, numerous dubs of the four tracks to another four track tape, merging the four tracks to one track, thereby opening up three new tracks. While this degraded the sound somewhat it also made it difficult to back-track and do the after-thought stereo mixes, which is why we have the atrocious "stereo" of Rubber Soul and Revolver. Consequently, the reason the monos of these albums provide the better listening experience has mostly to do with technical limitations. While the mixes on A Hard Day's Night are stereo mixes, they carry George Martin's idiosyncratic, but really right, decision to put the vocals in the center, the rhythm section to the left and the other instruments to the right. I always have loved how Martin took care to isolate the brilliant work of Ringo and Paul so many times instead of just following the convention of placing the drums in the center. This is why one of Martin's memoirs is entitled: All You Need Is Ears.

All this said, if you really want to hear HDN in stereo, and it isn't too expensive, try to find an early EMI vinyl pressing (anything from the mid-'70's back.). But for the vast majority of listeners, the re-mastered HDN and Beatles For Sale too, will provide immense pleasure.

The Beatles For Sale: Comments, preference and reasons for preference similar to A Hard Day's Night.

Help: Well, thank God we have three different versions to compare to make life ever so easy. First, mono is the definitive mix, that's a plus. As a minus, while it sounds richer, it is also a bit cluttered compared with the stereo mixes. As for the stereo mixes, the re-master of George Martin's '87 remix does show some limiting in this new incarnation. A bit a hard to dial in the right volume. Sounds fuller, but that's the limiting. I am not sure I care for this version too much. As for the `65 stereo version, that comes on the same disc as the mono version, as this album is somewhat acoustic, the absence of the limiting that was done to the new stereo remix/re-master is a plus. The delicacy is there in “I Need You.” Overall, the "old" stereo is prettier than the "new" stereo. One can argue over whether the "new" stereo or the ""old" stereo is better, I come down on the side of the "old" stereo, I like pretty. But as you get both the mono and the "old" stereo on the single mono disc, the cheapskate in me screams if you had a pistol to your head and only had to purchase one version of Help, it would be the "mono" disc.

Rubber Soul: Mono over stereo, if for no other reason than the left/right channel mix that plagued Please, Please Me, With The Beatles and is most egregious in Revolver.

Revolver: There is a section of “I Want To Tell You” where Ringo is just so muscular and explosive in the mono that is missing in stereo and this is before we get to the issue of the left/right "stereo" of the stereo mix. Plus, there is just this overall richness of sound to the mono that is missing in the stereo. That said, it is a bit cooler to hear "Tomorrow Never Knows" in stereo. But, overall, mono, particularly considering there are parts of Revolver in stereo that sound a bit harsh.

Sgt. Pepper's Lonely Hearts Club Band: The things you have heard are correct about the mono mix, the clarity and control over the notes, instruments and vocals are all there. Overall, it just sounds better, fuller and richer than the stereo 2009 CD, plus it is what the boys intended. Oddly, the thing that was most breathtaking was “She's Leaving Home;” just a full, gorgeous, sound. In stereo, it just sounds relatively wrong; thin compared with the mono. That said, because “Day In The Life” is such a mind-f the stereo is the definitive version of this song.

As I live in Chicago, and have access to one of the country's remaining great stereo stores, that also boast three incredibly knowledgeable owners and an original Sgt. Pepper’s British Stereo pressing, following posting this review I went over there to compare the original vinyl with the two new CD re-issues. We listened to the reference system, Naim Audio electronic and Quad speakers. There was total agreement on what we heard. First, Pepper's mono CD had better tonal balance than Pepper's stereo CD. Pepper's stereo CD had better clarity than the mono, but this was defeated by the harshness of the sound (more on harshness shortly). Thus, overall, between the two CD's we preferred the mono CD. All that said, the original stereo British vinyl pressing crushed both. It had both tonal correctness, coloration and stereo effect.

Now as to the harshness issue, please be mindful that I have listened to these discs on two audiophile systems. Something like harshness is likely to be more prevalent the higher up you get in the stereo food chain. Thus, someone who doesn't have an audiophile system may not experience the harshness at all, but it is really there. This may render some of the stereo CDs more listenable for these people than they were for me, at least when it comes to Pepper's.

Magical Mystery Tour: While Pepper's sounded better in Mono, MMT sounds better in stereo, and remember good vinyl will be better in stereo.

The Beatles (The White Album): Both versions have their merits, you need both. If you can only go for one, it's the stereo. But remember, good vinyl will be better in stereo.

Abbey Road: The defining moment of these re-issues, and why it took four years, may be found on AR's “I Want You (She's So Heavy).” Because they couldn't take the tape hiss out without compromising the sound, they didn't. But when it came to John's final "yeah" which was over saturated and clipped previously, they were able to take the clipping out, and for the first time, you can hear all of John's vocal. All that said, remember, good vinyl will be better.

Let It Be: For this title I decided to compare three versions of LIB, an original 1970 EMI vinyl, this re-mastered CD and LIB Naked. Following this comparison, it turns out that LIB is one of the more interesting re-master releases. First, LIB Naked has it all. It is true to the original vision of the Beatles for this music. It has clarity, correct dynamics and musicality. One of the places you can hear this best is in the title track and the differences between the Martin and Spector mixes. Martin got the church-like nature of the song. Consequently, you get more organ and the choir-boy harmonies of John and George, which Spector dubbed over with horns, strings and over the top solos by George. And I'm with Sir Paul concerning the damage done by Phil to “The Long And Winding Road.” As for the 1970 LIB vinyl, it has its problems from a sonic standpoint, particularly as it is a Phil Spector production. This brings us to this re-mastered CD. It trumps the 1970 standard vinyl in clarity but not LIB Naked. The real surprise is that the compression added to this re-master actually makes this a more Phil Spectoresque production than the original. And, surprisingly, I like it, at least compared with the 1970 vinyl. Still, Naked is what you want.

Mono and Stereo Past Masters: As these are songs from the entire range of recording techniques used in the years of the Beatles’s career, for the most part, the general advantages and disadvantages of the mono and stereo recordings discussed above apply. The one thing to add is that the mono tracks from Yellow Submarine are wonderful; another reason, if another reason is actually needed, to purchase the mono box set. In fact, the Mono Past Masters would have been the knock-out winner between the two if they had added a stereo “Let It Be” and “The Ballad Of John and Yoko.” After all, the "stereo" Past Masters is actually a mixture of stereo and mono.

CONCLUSION

Somewhere along the line, during the weeks following the release of these re-masters, I started to draw an analogy between these remasters and the Sistine Chapel. Like the Sistine Chapel, we have works of great, timeless, art. And, like the Sistine Chapel, necessary restoration work has been done to a work of art. When it comes to the mono re-masters, the work done by Allen Rouse, and his team, was largely akin to removing all the soot and dirt that had accumulated on top of Michelangelo’s masterworks, thereby restoring the original work to much of its initial beauty. This is the true goal of a restoration, preservation, project. But when it comes to the stereo re-masters, what Rouse’s team did was exactly what later “artists” did to the Sistine Chapel: They colored over it to, in part, make it more fashionable for the time in an “attempt to enliven the appearance of the work.” http://en.wikipedia.org/wiki/Sistine_Chapel Rouse admits this in the Stereophile article mentioned above. But I contend altering a masterwork to align it with fashion, or to enliven it, is something that should never be done when the goal is to preserve timeless art for history. Eventually, as was the case with the Sistine Chapel, the layers added to the 2009 stereo re-masters will be removed. We’ll get the stereo mixes in a more natural state. Will this reveal the inherent faults in the stereo mixes? Sure. But these inherent faults cannot be changed. I think the true purpose, or value, of the stereo mixes is, primarily, to have a stereo mix to complement the mono mix. Mixes that, many times, will reveal more detail than the monos and provide a different perspective to this wonderful music. Having the stereo mixes in their original state is what is required for this role and for history.

© Copyrighted by James N. Perlman. 2009 All rights reserved.