New Geography

Author: Matthew Stevenson

  • Mapping the College Culture Gap

    Although the television series “Mad Men” has yet to take up the subject of college applications, I could well imagine an episode in which ad man Don Draper spends his day consuming vast quantities of Scotch and cigarettes, only to come home and have his wife say (while ignoring the lipstick on his collar): “I spoke to Millie today, and she had some good things to say about Williams.”

    When Britain still had an Empire, what mattered most was to get your daughters married and your sons into a good regiment. In Homeland America, all that matters to middle-class and affluent parents is getting their children into the best colleges that money can buy or that the Standardized Aptitude Test will allow.

    Friends of mine who have college-bound children talk only about test schedules, AP credits, summer programs for gifted children, sports highlight reels, and the easiest routes to Duke or Pomona.

    They search family trees for ancestral connections or minority status, and make charts of other friends who might know someone at Yale. Editors at the New Yorker are consulted about personal statements. During school downtime, kids are dispatched to examine China’s terra-cotta warriors or Seattle’s soup kitchens, all with the goal of padding the college application.

    I say all this as a parent who is about to launch his third child in the direction of the ivory towers, with no better idea than what guided us in sending off the first two. For years my wife and I have talked about colleges the way other couples play canasta. We use it to fill the lazy hours in the car or after dinner, as each of us is already familiar with each other’s reading lists and views about Rick Santorum.

    What prolongs these familiar exchanges is that we are the parents of American children who have grown up in Switzerland, attending public schools in French. The college conversation has become a proxy for whether we are Europeans or Americans. Whatever decisions we make, they feel like the wrong ones.

    When the children stay in Switzerland, I feel they have missed out on what I had in the American liberal arts, although when they leave for the States, it feels far away, expensive, and obsessed with the cult of Goldman’s Sachs-ism.

    Swiss secondary education is roughly similar to U.S. high school, although collège, as it is called in French, has a thirteenth year and every year students are weeded out of the university track. Our daughter Helen was the only member of her sixth grade class to graduate from a Swiss university. Of the 350 students who started with her in the tenth grade at collège, only about 200 graduated; the rest were relegated to apprenticeships or trade schools.

    For anyone in Switzerland who earns their high school diploma (known as a maturité gymnasiale), the entire university system is an open door, and tuition is $1000 a year. The country has little college testing and applications. To attend law or business school, a student merely adds his or her name to a list. The trick to staying at university is maintaining a B average, and only about two-thirds of each class does.

    University in Switzerland is much closer to American graduate school than a U.S. liberal arts education. Students specialize in a branch of study, say, law, economics, literature, or engineering. Classes, at least in the first year, are large lectures, and the best grades are given to those students who write down what the professor has said and recall this wisdom on the final exam.

    Readings only supplement the lectures. In later years, there are more seminars and papers, but the system recalls the hierarchy of a German universität more than a Berkeley teach-in. Facts count far more than expressing your feelings about Siddhartha.

    In physical layout, Swiss universities look like inner-city high schools. Few offer social clubs, sports programs, psychological counseling, toga parties, or alumni gatherings. Their goal is to teach a specified curriculum. If the Ivy League is best understood as the first class ticket of higher education, a Swiss university is more like Southwest or easyJet—the seats are cramped and the champagne is extra.

    With another daughter at an American college, I am struck—in comparison with the Swiss system—by the engagement that the U.S. professors have with their students, and at their goal of inspiring undergraduates to think for themselves. One professor said to my daughter, early on in her studies: “Laura, you’ve written a Swiss paper. I want an American paper. Tell me what you think.”

    Of course, such independence of mind costs $200,000 over four years, so that your child can then spend another eighteen months as an unpaid intern at Sterling Cooper, gaining what the market, as well as Balzac, might call “experience.”

    With our nineteen-year-old son, now in his last year of collège, we decided to split the geographical and financial differences between the U.S. and Switzerland, and encouraged him to apply to British universities, which are a cross between America’s liberal arts and Europe’s narrow focus.

    Three years’ tuition in England is about $50,000, and London is only an hour’s flight from where we live. We liked the idea that he would be studying in English and in small tutorials with eccentric professors. When I went with my son to his interview at Cambridge (he did not get in), I was struck by how detached Britain is from the rest of Europe. Not a single Swiss student has been admitted to the university in three years, and the translation of Swiss transcripts into English grades makes it clear that it might be another decade before any more are admitted.

    Britain, like America, suffers from grade inflation, so everyone comes out of high school sounding terrific, with great marks and astonishing teacher recommendations. By contrast, the Swiss take great pleasure in grade deflation (the motto might be: “Every Child Left Behind”), and do a terrible job of promoting their students to the rest of the world.

    An excellent average in a Swiss collège gets reported to Britain or the U.S. as someone with C+ grades. My daughter finished third in her Swiss class, and her recommendation letter from the school, in its entirety, read: “Laura Stevenson has fulfilled all the requirements of Collège de Saussure.” Little wonder that she was turned down at many American universities.

    What do I want from a university for my children? I want them to be able to write clear, forceful English (or French) that is informed and, if they choose, amusing. I want them to have the intellectual ability to challenge accepted assumptions—for example, that the New Deal ended the Depression, George Washington had a great military mind, or Shakespeare wrote all his plays.

    I would like them to learn to read critically, so that can they scoff at cant and pretense: for example, to see that Yale man Bob Woodward writes in language that looks as if it has been translated from Slovakian. I would also like them to view their education as a plant that needs watering on most days following graduation.

    If my older son goes to college in England, we might be tempted to send our last child, also a son, to university in either France or Germany. That way, each of our children will have been educated in a different system. Then, in ten years, as we judge their successes or failures, we can rail about the rigidity of the Confederation of the Rhine, the British class system, Swiss banality, or U.S. careerism—or we can sing the praises of German rigor, the legacy of the English enlightenment, Swiss precision, or the iconoclastic American mind.

    Photo: Prof Believeau’s Yale University by Ina Centaur

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He lives in one of the wine regions of Switzerland. His next book is Whistle-Stopping America.

  • The Geography of Investment Grade Wines

    The world produces more than eight billion gallons of wine each year (including those Algerian reds that taste like lighter fluid). All fifty American states, including Alaska, have thriving local wine industries. The eastern end of Long Island now looks like the Médoc, and one reason that the European Union is suffering its debt hangover is because of the huge subsidies that are paid each year to growers who produce wines that no one wants to drink. But perhaps the biggest success of the industry has been to ferment demand for an oversupply of these barrels.

    Wines have evolved into that most delectable of American tastes: an asset class. The châteaux of Bordeaux are best understood as option houses, existing to serve up financial swaps and derivatives as much as their enchanting blends of Cabernet Sauvignon and Merlot. The street value of a year 2000 case (six bottles!) of Lafite-Rothschild is about $20,000. In fine wines, you can have your subprime and drink it, too.

    I live amongst vineyards in western Switzerland, hard against the French border, but I didn’t understand the evolution of fine wine into a futures contract until I spent time in Shanghai and then went to Hong Kong. (Even though the drink of choice on the train from Shanghai was warm Budweiser served in plastic cups.)

    Once in Hong Kong, I learned that almost a third of the world’s fine wines are stored there in local warehouses, waiting for Chinese billionaires to order up another $12,000 case of Château Ausone, perhaps to wash down a bucket of KFC chicken. (‘Infanticide’ is the term used to describe the practice, prevalent in China, of pulling the cork way too early on wines that need to mature for eight to ten years.)

    The presence of so much Bordeaux wine washing around Chinese treaty ports pushed my curiosity about the direction of the elusive “wine market.” Through bike rides across the Loire Valley, and meetings in places like London and Burgundy, I encountered an industry that has more the bouquet of the petroleum standard, West Texas Intermediate, than of those charming Napa haciendas that get written up in Food & Wine.

    Even the fabled BRICs (Brazil, Russia, India, and China) have been laying out vineyards as though they were steel foundries. And some time back, in Kosovo, while looking at the ravages of war, I was driven to a field that, despite its legacy of atrocity, I was told “would be perfect for Chardonnay.”

    IGW (Investment-Grade Wine) is immune from the laws of supply and demand partly thanks to the genius and perseverance of Robert M. Parker, Jr., a former lawyer from Monkton, Maryland, who managed to transmute the world’s glutted wine market into something as easy to understand, and thus invest in, as municipal bonds rated by Standard & Poor’s.

    Parker, 64, who is officially the editor and publisher of the Wine Advocate magazine, has been described as having “the nose of a dog.” He is said to have tasted some 200,000 wines in his peripatetic career and boasts to his friends that he can remember each of the wines and the scores that he gave them on his scale of 50 to 100, the latter number representing perfection.

    Even if he sounds like the Wilt Chamberlain of wine, Parker has succeeded in translating obscure French and Californian wines into easily indexed numbers, insofar as most liquor stores will post on their shelves little markers that read: “Robert Parker…94.” There’s a New Yorker cartoon of a hesitant man in a wine shop with the punchline: “What do you have in investment-grade reds?”

    Neither Chinese mandarins nor traders from Goldman Sachs would be caught dead drinking anything less than a 90, and those now selling participations in listed fine-wine investment funds need to do little more research than thumb through Parker and scoop up wines listed between 95 and 100.

    Parker’s accomplished biographer, Elin McCoy, quotes the English wine writer Andrew Barr as saying that Parker’s scores are a “victory of American pragmatism over French mysticism;” it has also been said, that “Parker’s genius was to marry Americans’ love of numbers with their equal love of hedonism.”

    Parker started out as a wine consumer advocate, a Ralph Nader of corks, there to warn gullible Americans about the sleazy French châteaux that were unsafe at any sip. By securitizing the wine industry with his easy-to-comprehend scores, Parker enabled la place de Bordeaux, the secondary wine market that buys from the châteaux, to cash millions from futures that he helped to legitimatize.

    In part thanks to Parker’s scoring system, en primeur wine (new vintages still aging in barrels) is sold off each spring to investors and merchants, who pay in advance and only collect their bottles two years later. These sales are the IPOs of the wine industry, and prices are set by Parker’s nose and Asian front money.

    In the wake of Parker, numerous online trading platforms have developed, including one in London, ‘Liv-ex: The Fine Wine Exchange’, that could evolve into a legitimate futures market, like those for soybeans and sugar. For the moment it only matches spot buyers and sellers of fine wine, and benchmarks prices with its Liv-ex indices, which allow investors to see that fine wines were off 12 percent in 2011, but up 121 percent in the last five years.

    What keeps online traders from expanding the reach of their exchanges is the French word provenance, which is a calculation of a wine’s pedigree in the after-sales market. Parker or Wine Spectator can tell you that a 1982 St.-Emilion grand cru rates a 95-point score. But a connoisseur will not buy a bottle in the back-vintage market until he or she knows under what conditions the wine has been stored during the last thirty years.

    The ideal cellar has a consistent temperature of about 54 degrees, humidity of 60-65 percent, and neither vibration nor light. As charming as are those open racks in modern kitchens, they are death to fine wines.

    Another provenance black hole is China, which not only pays top prices for anything decent with a cork, but which has devoted familiar energy and resources to counterfeiting the best Bordeaux. As with Vuitton luggage and Rolex watches, a few Chinese wine masters have matured the fermentation of fraudulent vintages. An ersatz bottle of Château Petrus 2000, if undetected, could be sold for $5000.

    Although some of the world’s finest wines are made in California and Burgundy, investment hot money remains fixed on Bordeaux, which established its classification system in 1855 and, in that French way, decided it did not need to rush through an update in the intervening years.

    The problem with investing in Burgundy is that the vineyards are Byzantine, as a result of French inheritance laws and other arcane transactions, making it hard for inexperienced outsiders to know exactly what wine they are buying. The same estate might have dozens of producers, all bottling their wine with similar labels. In Bordeaux, all you have to do is pony up $1000 for a Château Haut-Brion 2000, and you will have something special now or in twenty years.

    Extraordinary wines made in California routinely place higher than the great French vintages in blind tasting contests. The most celebrated was the so-called “Judgment of Paris” that in 1976 humiliated the French, when the Californians ran the tasting tables. But Californian wines are not where the serious investment money is thrown, in part because it’s hard to get allocations from the exceptional vineyards, which prefer to place their bottles in the hands of Hollywood A-listers or San Francisco divorce lawyers, as opposed to Hong Kong middlemen or London hedge funders.

    Given that there is roughly $4 billion invested in fine wines around the world, does the top tier taste any better than that bottle of Mateus you bought to impress your high school girlfriend? Living for twenty years in a Swiss winemaking village, I can attest that at least our locally consumed wines have gotten dramatically better.

    When we first arrived in this region not far from Beaujolais, the Gamay and Chasselas tasted like something between astringent chalk and raclette cheese. Now there are interesting Pinot Noirs and Chardonnays, although I doubt Parker ever will put a number on the local Gamaret.

    Sadly, one side-effect of the investment capital swirling around grapes has been to “Parkerize” tastes and wines, to increase scores and returns-on-capital. I am sure Parker the oenophile loves the profusion of boutique winemakers that are flourishing around the world. But Parker the ratings agency has inbred his numismatic personal tastes onto an industry desperate for bankers’ acceptances.

    Simon Hoggart, the engaging London Spectator wine columnist and my friend, reports a telling comment made to him by a wine aficionado after a high-end business dinner: “All the wines had been scored 100 by Parker, and I could see why….Of course, they were quite undrinkable.”

    Flickr photo of a fine wine auction by LexnGer.

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He lives in one of the wine regions of Switzerland. His next book is Whistle-Stopping America.

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  • Bicycle Commuting: A US System and A World-Wide Guide

    To my pleasure, there is now a United States Bicycle Route System that goes more places than Amtrak and Greyhound do. Have a look at the proposed map of the national corridor plan.

    The goal is to create clearly marked north-south and east-west routes, as romantic as the Oregon Trail or as functional as the Erie Canal. The trail of Lewis and Clark is on one of the routes.

    I can only hope that the plan serves as an inspiration to would-be cyclists and every-day bike commuters. To be fair, it takes years to master the dark and often wet arts of cycling. My riding-to-work garb includes reflective gear from London, Alaskan socks, a headlight from San Diego, a lock from Amsterdam, and a rain jacket from Ohio. On my first commute, after a year of wondering of “whether I could do it,” I searched so hard to find a safe route that I got lost.

    Serious bike commuting requires owning two or three bikes, as one or two will always have flats or breakdowns, and, you need a rain bike. Plus, strategic wardrobe planning can take hours. But bike commuters get to have the satisfaction of passing cars stuck in traffic, and tired legs at the end of day leave you feeling more virtuous than Mother Teresa (if you want more inspiration, there’s a cycling jersey with her picture).

    Just to be clear: No one behind the car wheel likes a cyclist, because bicyclists run red lights, hop up on curbs, pound on hoods, drop F-bombs, and give drivers the middle finger salute. Politically, cyclists fall on the spectrum somewhere between Greens and Anarchists. In some 300 cities — it’s a global movement— to protest local (car-inspired) injustices, they have formed into Critical Masses that parade around like errant storm troopers.

    I am surprised that no one has articulated a bicycle foreign policy — in German it would be Fahrradweltanschauung — given that there are more bikes in the world than cars and they are used more often. Fifty million bikes are manufactured annually worldwide, versus twenty million cars. China’s market share is 400 million. But many American states and counties fight having a bicycle coordinator on their payroll.

    Here’s a highly personal comparison of where some cities and regions currently stand in relation to a world of bicycles:

    Geneva: My hometown, so I know the roads well. The city is trying to expand its bike lanes and trams. Whenever road construction is completed, a new bike lane emerges from the rubble. Biking works in Geneva, despite the hills, wind and rain, but many bike lanes are stopped by dead ends or traffic. I am forever lifting my bike over curbs, cobblestones, or rails, and searching for a better way around the medieval town.

    New York: I can thank former New York mayor Ed Koch for converting me into a bicycle romantic. In spring 1980, he decided to accept a strike from New York’s Transport Workers Union that, for eleven days, mothballed the city’s buses and subway. (Koch referred to the strikers as “wackos.”) The only way to get around New York was to walk or ride a bike. I dusted off my childhood Raleigh Grand Prix and rode off to work, never looking back on a life that did not involve bicycles.

    Although I no longer live in New York, I still like riding there. The West Side, Central Park, and the Brooklyn Bridge are bike friendly. If you want to understand why George Washington lost the battle of Harlem Heights (as I do), a bike is the only way to get there. But, as much as biking has improved in and around New York in the last thirty years, it remains a “car” city. Cyclists are an afterthought, and poorly represented by messengers flying down Seventh Avenue, no hands on their bars, talking on their cell phones, flipping off confused pedestrians.

    The administration of Mayor Michael Bloomberg has proposed a master plan of 900 miles of bike lanes around New York, up from 400 miles, bringing out pools of angry car drivers who hate sharing the road with cyclists and haunted pedestrians. A New York Magazine cover story called it “Bikelash.” But 100,000 riders mount a bike every day in Manhattan.

    Hanoi: In 1993, before the Politburo began importing waves of noisy scooters and small motorcycles, to bike around the old French quarter and West Lake (past General Giap’s house and Ho’s mausoleum) was a delight. Everyone rolled at slow speeds, and no one stopped at the intersections; the bike traffic just melded together, like DNA. In the Vietnam War, bikes beat B-52s.

    Berlin: It’s expansive, like Los Angeles, but flat as a dish and with many bike lanes, all of which go to places of historical interest: the Reichstag, the Holocaust Memorial, the remnants of the Berlin Wall, or Checkpoint Charlie. Each time I am there, I rent a bike, and it takes me everywhere. The only downside to Berlin biking is the weather, which has a lot of cold rain. Bikes make Berlin.

    Amsterdam: I find the biking to be hair-raising. The Dutch power through intersections or along bike paths as though they were in a bonus sprint on the cobblestones of Paris-Roubaix (the famous bike race). Yes, the lanes go everywhere, and bikes in Holland — at least those not stolen and thrown into the canals — are sacred objects. But think about wearing some body armor.

    Beijing: My favorite bicycle city. To be in the saddle enables you to go almost anywhere. Bike lanes are wider than many Western boulevards, and you can bike around Tiananman Square, to the Forbidden City, down to South Station, and out toward the Marco Polo Bridge (where World War II began in China). The way to see the hutong — ancient alleys — is on a bike. Beijing treats its citizens with more respect when they are cycling than it shows them at other times.

    London: Cyclists wear reflective vests, stretch rubber bands on their pants legs, and blow strange whistles at anything in their way. Coming out of the mist, they look prehistoric and think nothing of biking in rain, sleet or snow, doing battle with buses, cars, and pedestrians, or riding bikes that look like they survived the Blitz. The London mayor has introduced a fleet of shared bikes that can be used around town, based on annual membership. Because traffic is on the “wrong side,” I find biking in London scary, but it delivers the goods.

    Suburbia, USA: I have spent more time that I would have wished biking around suburbs, exurbs, malls, highways, and developments. It’s the least satisfying bicycle experience. I grew up in the suburbs, with baseball cards in my spokes. Suburban drivers hate cyclists. Integrating bicycles into suburban life, with its SUV panzer divisions, will be a national challenge.

    Toronto: Canada’s guerrilla team, the Urban Repair Squad, goes out at night to paint bike lanes onto city streets. (“They say the city is broke. We fix it. No charge.”) So effective is their painting that the city of Toronto maintained the counterfeit lanes for two years, thinking they were official.

    Southampton, New York: Southampton prohibits riding a bike through town. It’s fine to thunder through the Potemkin village of million dollar boutiques in a gas-guzzling, tinted-windowed pimp mobile, but God forbid that anyone should roll through on their own power. It gets my vote as the worse bicycle town in America.

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    Like all bikevangelists, I dream of highways given over to cyclists, and see cycling as the way wean the U.S. from Middle Eastern oil and solve every problem from global warming to obese children. Consider this: Compared to the costs of high-speed rail and highway construction, the U.S. Bicycle Route System requires only maps, sign posts, imagination… and strong legs.

    Photo by the author: “My bike in Beijing. One gear. Heavy as bricks, but very smooth”.

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives and rides in Switzerland.

  • High Speed Rail: The Dream Scheme Scenario

    Ever since Jay Gould, Leland Stanford, and Cornelius Vanderbilt acquired their first legislatures, railroads have been best understood as political networks, rather than as transportation lines. The Obama administration is hyping high-speed rail (HSR) with a $53 billion proposal not because the president is a trainspotter or because he collects back copies of the Official Guide of the Railways (like I do). Rather, it’s because politicians understand that the states blew their money on generous pension plans, pretentious sports stadiums, and bridges to nowhere, and now need billions to plug their budget deficits. It’s easier to funnel money into tapped–out state capitals under the smoke and mirrors of a feel-good rail project than it is to announce that the federal government stands behind states’ subprime debts. The Government Accounting Office estimates unfunded state liabilities at $405 billion, which is probably what HSR would, in the end, cost. Think of it as the Stimulus Express.

    The high-speed scheme is a dream of superfast trains, traveling at 150 m.p.h., linking Portland, Maine, and Charlotte, North Carolina; Chicago with St. Louis and Kansas City; the Orlando corridor in Florida (which the governor there has rejected); and express trains in Texas and California. Another way to look at the proposed HSR network is to imagine it connecting the cities and states that Obama needs to carry if he is to have a chance of winning the 2012 election.

    Along the high-speed tracks-to-be are stops in Michigan, Ohio, North Carolina, Florida and Pennsylvania, which are key 2012 electoral contests. Red states west of the Mississippi, by contrast, will have to wait for Amtrak’s Southwest Chief to arrive three hours late in Dodge City.

    Before the U.S. goes into hock over HSR, it might consider making a virtue of low-speed rail. Slow food has it followers. Why not the same for slow trains, since that’s the best that Amtrak can offer? Herewith are ten ideas that will get more (fare-paying) Americans back on the (less-than-perfect) rails. Implementing them wouldn’t cost anywhere near $53 billion. Done right, they would even make money.

    • Privatize the corridor services between Boston and Washington, Chicago and St. Louis, and San Diego and Los Angeles. But mandate that at least two competing companies operate passenger service on the lines. If American railroads are not interested in the job, French or German national rail companies would bid on the service.
    • Sell off the franchise rights to Amtrak passenger cars to mall stores, restaurants, and bars. A movie car could run between Philadelphia and Pittsburgh, and a discotheque (Pullman 54) could operate, for example, on the night train from New Orleans to Atlanta. I am sure the Outback restaurant chain would want some cars in the West. Who cares about speed if you are having fun or can use the time productively? I would happily ride the Barnes & Noble to Charlotte or the L.L. Bean to see my family in Maine. Why can’t Amtrak add a few FedEx Kinko cars?
    • Auction off Amtrak’s sleeping car services to Hyatt, Holiday Inn, Embassy Suites or Motel 6. They know more than Amtrak does about making beds.
    • Instead of catering to the gun lobby (Amtrak now allows passengers to pack heat), work with the car rental agencies to create a car-sharing alliance at Amtrak stations to solve the problem of getting anywhere from far-flung places like the Richmond station, which is located miles from downtown.
    • Spin off Amtrak Vacations to Outward Bound, the American Youth Hostel Association, Carnival Cruises, the Boy Scouts, or the Green Tortoise (a hippie bus tour company), and let them offer rail cruises to national parks, jazz festivals, fall foliage, major league stadiums, and jamborees.
    • Create Amtrak University, and outfit trains to take high school and college students to places like Gettysburg, Little Big Horn, Bunker Hill, the Grassy Knoll, Mark Twain’s museum in Hannibal, Missouri, and Marion, Ohio (where Warren Harding ran the local newspaper).
    • Invent a clean steam engine that runs on scrubbed American coal, and market passenger railroads as green travel, locally grown.
    • Retrofit some baggage cars to carry bicycles easily and cheaply, and develop a national network of “Rails and Trails,” so that passengers can have a seamless connection between the train and their bikes. At the moment, it’s easier to ship a gun on Amtrak than it is to take a bike.
    • Deregulate passenger service, to encourage the flourishing short-line rail industry to carry passengers on some of their freight lines, as the Housatonic R.R. Is proposing to Pittsfield, Massachusetts.
    • Invest surplus funds in commuter rail projects, including the proposed Hudson River tunnels that New Jersey Governor Chris Christie turned down. Commuter rail is a proven, if dreary commodity. High-speed rail dreams are the stuff of State of the Union addresses, but the top ten commuter systems together transport about 1.63 million passengers daily (Amtrak has 74,000 a day).

      Most commuter systems need nicer stations, easier links to other lines and buses, and to provide comfort zones with better coffee (not a federal budget concern), clean restrooms, and Wifi. I love the coming Long Island Rail Road link to Grand Central and the new BikePorts of the Massachusetts Bay Transportation Authority.

    Had the United States integrated high-speed rail into the Interstate Highway system — imagine tracks in the median strips — the idea might have worked. Imposed on a society addled with cars and planes, it has the risk of becoming a cost-overrun nightmare of $82 million a mile versus $2.4 million for traditional rails.

    Much of the infrastructure is already in place to develop a national revival of low-speed rail, at a fraction of the costs of subsidized HSR. The trains we have can be privatized, franchised, hot spotted, double-bedded, and showered, and no one will care about the engine speed. To save billions, if not to make money, why can’t the U.S. subscribe to the words of author Paul Theroux: “Better to go first class than to arrive.”

    Photo by Jeramey Jannene of train tracks right outside of Havenwoods State Forest in Milwaukee, Wisconsin.

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine.

  • Regional Efficiency: The Swiss Model?

    Given that no one likes Switzerland’s banks, coo-coo clocks, high prices, smugness, dull cities, cheesy foods, or yodeling, I realize that it is too early to speak politically about “the Swiss Model.” But it needs to be pointed out that while the European Union evaporates and Homeland America goes for broke, the world’s second oldest democracy (1291) has trade and budget surpluses, a multi-lingual population, a green network of trains and buses to every village, excellent public schools, and a federal-style government that is closer to Thomas Jefferson’s America than the bureaucratic monarchy that gives the king’s speeches in Washington.

    Yes, the Swiss recently voted against the construction of minarets (NIMCP or “not in my cow pasture”) and for the eviction of immigrants convicted of serious crimes. (Would you vote “for” protecting the immigration rights of the rapist next door?) But a quarter of the students in Geneva’s public schools are foreign, and—in the age of focus groups and slick pollsters—the democracy remains in the hands of its citizenry, for better or for worse, which every two months votes on the referendums of the critical issues. On this month’s ballot is gun control.

    A mythical Swiss story involves a man on a morning bus, chatting with someone standing near him, exchanging pleasantries about work and the weather, and discovering that his commuting friend is also the president of the Swiss confederation.

    I had a similar experience. I had arrived at the Geneva Press Club on my bike, and discovered that the woman sitting near me was also the president, Micheline Calmy-Rey. To be clear, she was at the front of the room, and I was in the audience. But her unassuming manner was that of a bus commuter, and had she walked into the room unescorted, I would not have marked her as the leader of the country.

    In a way, she is not. To be president of Switzerland is to be the head of a seven person federal council, whose members are apportioned according to the political parties in the parliament. Real power in the country remains vested in the villages and in the twenty-six cantons. Think of the Swiss president as the unlucky committee person who has to keep the minutes.

    After the European revolutions of 1848, Switzerland adopted a federal constitution, in part modeled on the American system, although instead of the imperial presidency (which Jefferson called “a bad edition” of the Polish king), the Swiss went for an executive council. Benjamin Franklin had the same idea earlier for the U.S., but lost out to the more presidential Adams and Madison.

    Each year, the members of Switzerland’s federal council draw straws for the presidency and the other executive offices, such as the portfolios for justice, sport, and economics. Technically, the chief executive is composed of the entire collective.

    Recent presidents include Hans-Rudolph Merz and Doris Leuthard (often the Swiss president is a woman). The Merz administration, however, proved the limits of a referendum democracy in the fast-paced, somewhat dictatorial age of globalization.

    From the German-speaking part of the country, and regarded by his critics as a small town politician, Merz had the misfortune to horse trade with Libya’s Muammar el-Qaddafi. The diplomatic row began when Hannibal, the son of the Libyan president, was arrested in a Geneva hotel for having mistreated his servants.

    No one in Geneva doubts that Hannibal Qaddafi’s servants were treated little better than Arab slaves. The staff at the posh hotel reluctantly called the police to intervene. Warming to the Ali Baba-like themes of the crime, the local press published Hannibal’s mug shot, and the crisis was off to the camel races.

    After picking up two Swiss businessmen in Tripoli with expired visas, Father Muammar — Qaddafi, that is — threw them into solitary confinement and vowed to release them only if the Swiss punished the Geneva police, apologized to Hannibal, and groveled inside the colonel’s tent.

    Agreeing to Qaddafi’s terms, because the great Swiss trait is accommodation, Merz flew to Tripoli, thinking he had a Clintonian deal to return triumphantly to Bern with the Swiss hostages.

    Instead, the colonel-for-life lectured Merz on the finer points of visa legislation, and the Swiss president flew back to Bern with only the hostages’ luggage, which had been loaded onto the presidential executive jet. The hostages had to serve humiliating prison terms, and a grateful nation watched Merz retire at the end of 2009. A government of “sapeur pompiers” (volunteer firemen) is not without its comic charms.

    As she was then minister of foreign affairs, Calmy-Rey was not blameless in what the press calls the “Affaire Qaddafi,” but that didn’t prevent her from becoming president this year, her second time in the position.

    At a press conference, she admitted, in so many words, that a rotating federal council perhaps wasn’t the best way to deal with erratic strongmen. Her actual words were much more diplomatic; she suggested that the council had lacked the “resources” to manage the crisis.

    In person, I liked Calmy-Rey much more than I expected. Her image in the press is as a glad-hander, someone unwilling to tell Swiss detractors to stick it. She wore a head scarf to meet Iranian president Mahmoud Ahmadinejad.

    In person she’s thoughtful, well spoken, conversationally direct, up on the details of government, ever-so-slightly humorous, and modest, as if she were mayor of a small commune, which is another way to understand Switzerland.

    I have been in Washington press conferences, and they are like a Versailles levée compared with a Swiss question-and-answer session. Calmy-Rey shared the modest dais with two officials and the head of the press club, as if they were panelists at a Rotary meeting.

    Her formal remarks were confined to a budgetary review of the pluses and minuses of supporting “international Geneva,” the sprawling network of UN-related organizations that have come to roost in the city. At the cost of billions, laid on in office infrastructure and tram lines, the hope is that peace becomes part of the Swiss brand.

    Everyone in the room who wanted to ask a question did, and Calmy-Rey stayed as long as it took to recite the liturgy on Brazilian floods, Middle East protest riots, banking secrecy, bilateral relations with the European Union, Kosovo’s future, nuclear Iran, building plans at the United Nations, Armenia and Turkey, the surplus of the federal budget, and more, until the room felt like a class eager for the break.

    The conference hardly made the daily papers. The only sound bite was her answer to a question about whether the Swiss were prepared to give asylum to the WikiLeaks founder and publisher, Julian Assange. Calmy-Rey gave a broad, politically evasive smile, and said, in somewhat fractured English, “We cannot give what we have not been asked to give.”

    Meaning: Neither Assange personally, nor any government, had approached the Swiss to grant him asylum. If I had to guess, I would say the Swiss would pass on granting asylum to Assange, just to avoid more aggravation with the Americans, who routinely use the Swiss as punching bags on banking secrecy and their nonaligned status in world affairs. In another context Calmy-Rey said, “We know we’re alone,” and that was a weakness in dealing with Qaddafi.

    I found Calmy-Rey realistic and self-effacing on Switzerland’s diplomatic nether world. The country has to straddle “international Geneva” and its many world agencies with another Swiss impulse, which, in the words of George Washington, is to avoid “foreign entanglements.”

    Switzerland has come through the recent economic horrors with its budget in surplus ($3 billion), and without any of the Euro debts that followed the long weekends in Ireland and Greece. Power remains in the cantons and the communes, which decide what to teach in the schools, how much tax to collect, and who lives in the villages.

    Refreshing, as well, is that the Swiss president can travel in a motorcade of one (I noticed that her driver is a woman), if not on the bus. When Calmy-Rey was in her first term as president, my daughter Laura was in high school. One night at dinner she described shopping after school in a discount department store. In the checkout line she stood next to Calmy-Rey, who, by herself, was buying a blouse.

    Photo by Juerg Vollmer; Micheline Calmy-Rey, Zuerich, 2009

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives in Switzerland.

  • Super Bowl XLV: The $10 Billion Bag of Chips

    I am raining on the big parade by equating the Super Bowl with trade deficits, budget shortfalls, state bonds on the edge of default, and unemployment close to ten percent. But if thirty-second ads that cost $2.7 million or The Black Eyed Peas at halftime can’t lift the economy out of its doldrums, how can we expect the same miracles from Troy Polamalu or Aaron Rodgers?

    From the perch of anyone staring at a TV or looking down from a skybox, what industry could be more bullish for America than the National Football League? Revenue for this year will top out between eight and nine billion dollars, which is roughly shared among the thirty-two professional teams. Does it not speak of economic recovery when even the fan-owned Green Bay Packers, with their retro stadium and rust-belt market, are given a market valuation in Forbes Magazine at more than $1 billion?

    How can it be fourth-and-long for America if, at the Super Bowl, tickets on the thirty yard line cost $10,366? Or if half of a sky box is fetching $384,993 at the Dallas stadium, which itself cost $1.5 billion to build?

    For the partners in what Theodore Roosevelt might have called “the football trust,” the economics of the game puts every NFL team owner in the Super Bowl. That the Buffalo Bills chose to pocket their subsidies instead of investing in a quarterback who didn’t graduate from Harvard is their business, and a good one at that. In 2009, they earned $28 million while the New York Giants, fresh from a Super Bowl win, only made $2 million.

    A closer look at football economics, however, makes the touchdown business a perfect metaphor for an industry—not unlike the nation—that talks up competition, “good conduct”, fair play, and free enterprise, but then goes to the subprime bank with hand-offs from sweetheart contracts, congressional subsidies, tax breaks, restrictive labor agreements, and underwater municipal bonds.

    Twenty-eight of the thirty-two NFL stadiums were financed with some public money, and eleven were built entirely on the dole. The NFL has enjoyed something like $10 billion in stadium subsidies in recent years. I wonder how many depleted state and city governments (Cincinnati gave the Bengals $450 million for their stadium) wish that a financial booth review could challenge the ruling on the field. As China built steel mills and high-speed rail, American cities went with skyboxes and entertainment venues that are used on about twelve days a year.

    The MVP of subsidies for the NFL is its antitrust exemption, which limits the number of teams at the professional level. Were free enterprise to govern the sport, instead of a medieval guild, anyone could put together a club.

    The NFL would simply be the best thirty-two teams in any given year. Teams that were improving would move up; bad teams, like the Browns, would be relegated to lesser leagues. Golf is played by this principle. Every town and city in America could compete.

    With Congress stuffing the competition at the line, the NFL enjoys a football monopoly, which allows it to dictate the prices of everything from official jerseys to cable subscriptions. “You want the NFL?….Go to the NFL…with about ten grand for an upper deck seat.”

    To be sure, the NFL has an engaging product and, if you can sit through the hours of time-outs and commercials, even some exciting games. But given that football is staged to sell things, what trots out on the field at the Super Bowl has more in common with billboards or beach banners than with sport.

    The advertisers at this year’s Super Bowl, paying $90,000 a second, include Volkswagen, Bud Light, Cars.com, Mars, Pepsi, Pizza Hut, CareerBuilder, Coca-Cola, and no doubt the knowing leer of the Viagra man, looking over his wife as if she were a Dallas Cowboys cheerleader.

    Their products will be seen in forty-eight million homes and by almost 100 million Americans. Fifty million Americans, myself among them, watched the first Super Bowl in 1967, in which a hung-over Max McGee twice took it to the house against the Kansas City Chiefs. The networks thought so little of the spectacle that no videotape of the game remains.

    The Super Bowl is a windfall for caterers, pizza joints that deliver, beer distributors, and guacamole middle men, not to mention the Dallas escorts who are charging $24,000 for a week of bump-and-run. But does it not also suggest a spectator nation, day dreaming about cars, sex, and getting a job?

    Under the current NFL contract, which expires March 3, the salary cap for each team is between 56 and 60 percent of the league’s revenues. The fans are told that the cap is to insure parity in the league, so that on any give Sunday the Panthers might not lose by more than twenty points. The salary cap also keeps the word “free” out of the enterprise, and fixes the game to insure a profit for every team owner (except maybe the Lions).

    Few NFL player contracts have much in the way of long-term financial guarantees, and teams can cut veterans, even those who have sustained serious injuries, to clear “space” from their cap.

    Very much in the spirit of earlier monopolists, NFL owners are not content with their billion dollar team valuations, subsidized stadiums, cozy TV contracts, and parking lot rebates.

    Now owners are asking the players’ association to accept an 18 percent pay cut in the next Collective Bargaining Agreement. Among the owners’ negotiating demands are a reduction in player salaries, especially for rookies, and an addition of two more games to the schedule.

    Owners are threatening to lockout the players (as if they were Pullman workers) and suspend football for next year. Or the games could be played with scabs, as happened in 1987. Shutdown losses would run into the billions.

    Fans can only hope that Taft-Hartley would be invoked to keep the Oakland Raiders on the field, or that President Obama would pass a Football Recovery and Mall Consumption Act to rush stimulus money into the red zone.

    After such a diatribe, will I be watching Super Bowl XLV? Of course I will. From the first Super Bowl (which was really an exhibition game at which tickets were $12) onward, I have seen some or all of the other forty-three games. Along with cheering McGee, I have seen the Packers’ Donny Anderson knock out the Chiefs’ Fred Williamson (aka “The Hammer”), the reigns of Terry Bradshaw and Joe Montana, and even those four terrible Super Bowls that the Buffalo Bills lost in a row.

    As a fan of the New York Jets, I remember Super Bowl III more clearly than some others. (As Joe Namath said, “I never drink at halftime.”) But I know where I was when the “Refrigerator” (William Perry) scored in Super Bowl XX, and I cannot read anything about Armenia without thinking about Miami Dolphin kicker Garo Yepremian and that absurd pass.

    Despite my institutional memory for the Super Bowl, I wonder whether it makes sense to elevate a sporting event into a national consumer revival meeting (“brought to you by Cialis…when shopping isn’t enough”). Nor do I think that the hoopla fulfills Vince Lombardi’s dreams, unless they involved Janet Jackson.

    Although he wasn’t speaking about economic competitiveness, former Washington Redskin and current TV announcer Joe Theismann revealed a truth about the big game when he said, “Nobody in football should be called a genius. A genius is a guy like Norman Einstein.”

    Photo by americanistadechiapas

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine.

  • Forged in Pittsburgh: The Football Industry & The Steelers

    When will the Labor Department come up with a statistic (GEP or Gross Entertainment Product) to measure to extent to which the economy is dependent on fun? The Pittsburgh Steelers are, at the very least, the emotional heart of Pittsburgh. In season on Sundays, the faithful wear their jerseys to church, and the city takes a reverential pause during the games, as it did during last Sunday’s AFC championship competition. Football wins in Pittsburgh are best understood as divine rapture, delivered by Steelers quarterback Ben Roethlisberger, despite his pre-season time in purgatory.

    The football industry has its factory lines across the river from downtown Pittsburgh. A joint venture between the Pittsburgh Steelers, the University of Pittsburgh, and local government accounted for the financial package that replaced Three Rivers Stadium with Heinz Field, a hulking monolith that, instead of producing steel by night, hosts football games on about twenty days a year.

    At the same time, the city replaced the baseball stadium and added on to the convention center, for a total expenditure of $809 million. Costs allocated to Heinz Field are estimated to be $281 million, although the accounting is more impenetrable than the Steel Curtain.

    Why would a city struggling to replace jobs lost to Asia put millions into two stadiums that are little more productive than Crusader fortresses in the Levant?

    Some answers might be found in the Obama appointment of the Steelers’ owner, Dan Rooney, as U.S. ambassador to Ireland. Presumably, Rooney and some local unions had delivered Pennsylvania to the Democrats over the course of many elections, and their reward was a sweetheart contract to build a football stadium and an ambassadorship.

    The arrangement casts professional football in the guise of a protected guild, although perhaps one as vulnerable as steel tubing is to competitive destruction.

    Were professional football not to enjoy an antitrust exemption, the Koreans and the Chinese might be supplying games for costs far less than those requiring a publicly funded stadium ($158 million directly) in which the Rooneys pocket the $125,000 per year from each of the high-end sky boxes.

    The first time I went to Pittsburgh, in 1972, I came up the Ohio Valley on a series of buses that stopped in places like Moundsville, Wheeling, Steubenville, and Weirton. Pittsburgh was an iron and steel city, although the London fog of soot no longer hung over the downtown. Still, it looked more like the past than the future, with the riverbanks lined with rusting barges and empty steel mills as forlorn as an Edward Hopper painting. The trip came after two weeks in Appalachia, studying coal mining for a High School project, together with my friend and classmate, Kevin Glynn.

    Approached from the south, Pittsburgh felt like the coal and iron ore capital of America, where train, road, and river traffic came together to form the crossroads of the carbon revolution. Opposition to cap-and-trade explains why Pennsylvania recently voted Republican.

    As we made our way up the Ohio Valley, Kevin and I went by car plants, rail yards, smelters, and gas flares, which, had I known more about economics, I might have recognized as the eternal flame of industrial America. Heavy industry was then moving to the Far East, which left downtown Pittsburgh with the air of a frontier settlement in which the saloon and the company store had closed.

    We stayed in a shabby hotel, went to a baseball game, and caught a night train home to New York, having liked Pittsburgh more than we expected. After the narrow valleys of West Virginia and claustrophobia of the fading coal mines, Pittsburgh had felt expansive, and the three rivers that converged off Fort Pitt suggested that the city had currents to wider worlds, as Abraham Lincoln found when he drifted from Kentucky to New Orleans.

    Thirty-eight years after my first visit, I recently came back to Pittsburgh, this time on the aft, open deck of a private railroad car, as if whistle-stopping in a political campaign.

    Although the private rail car offered excellent food, wine tasting, and good company, what interested me most was to see how Pittsburgh had changed since 1972. A friend who owns the car, New York Central 3, invited me to join him, and the excursion gave me the feeling that I was touring Rust Belt America in a steel gondola.

    I made much of the trip west on an outdoor folding chair that gave me a box seat as the train crossed the Alleghenies and moved toward Pittsburgh through the historically drenched valleys around Conemaugh and Johnstown, site of the flood, nature’s 9/11. At each stop I wondered the extent to which Smokestack American was underwater.

    In 1889 the dam of the South Fork Fishing and Hunting Club, above Johnstown, is said to have contained 20,000,000 tons of water before it broke, equivalent to the amount that goes over Niagara Falls in 36 minutes. A wind tunnel preceded the wall of water that killed 2,000. Another kind of tsunami has since swept over the modern American steel industry.

    Along the banks of the Monongahela and Allegheny rivers, the Pittsburgh steel mills that once belched fire are gone, replaced by highways, empty spaces, apartment blocks, and hotels. Much of the local steel production has been outsourced to Eastern Europe, reminding me that I had seen a train emblazoned “US Steel Serbia,” on a trip to the Balkans.

    The extent to which Pittsburgh has shifted into the service economy was clear, with universities, hospitals, government office buildings, and sports complexes accounting for the local growth industries.

    At the Western Pennsylvania Sports Museum, I collected some notes on the extent to which football is among the region’s thriving investments. A wall map shows the location of the many local quarterbacks exported to the professional ranks. I marveled at finding names like Dan Marino, George Blanda, Joe Montana, and Jim Kelly in places that once produced things like barbed wire.

    My Pittsburgh touring ended in nearby Beaver Falls, Pennsylvania, in homage to quarterback Joe Namath (of the New York Jets), who grew up on several of its gritty streets. A steel products company still operated in the town, but the mill appeared to be closed. Beaver Falls lives on the fumes of a community college and its sporting legends. In his memoirs, Namath writes that the area is “the home of more All-Americans per square mile, I’ll bet, than any other section of the country.”

    I found the houses where Joe Willie grew up, including rooms over a bar & grill then called the 1223 Club, which may explain Joe’s remark that he liked his girls blond and his Johnny Walker Red. Inside the bar both are still available.

    On the way back to the station, I drove past the location of Fort Pitt, the battles for which, as Fort Duquesne, had ignited the global Seven Years War (1756 – 1763) between the English and the French. A young officer, George Washington, conducted a blundering campaign against the then-French held fort, but his reputation survived.

    In the 1750s, Pittsburgh was the heart of the New World, as it was later the industrial capital of an industrial nation. Today, the only wars being fought around the Ohio Valley relate to foreign trade and the Super Bowl.

    Pittsburgh Steelers Photo by pitt6rng

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine.

  • Presidential Travel: Around the World in Eighteen Hours

    As a corrective for the struggles of American diplomacy, I am surprised that no one has proposed mothballing Air Force One. The jet of state is almost the perfect symbol of modern presidents, who fly around the world as if on a magic carpet, but come home with little more than passport stamps. In recent months, President Obama has flown to Indonesia, India, South Korea, Japan, Portugal, Iraq, and Hawaii, but, other than for his Christmas vacation, the reasons for any of these trips are a blur.

    The hope is that presidential frequent flyer miles can be redeemed for peace, prosperity, and global harmony. Instead, we seem to have traded the miles for undeclared wars, ballooning national debt, and diplomatic unease. Do the WikiLeaks sing songs of success?

    Not every president has felt the need to adopt the persona of an international courier. Until Teddy Roosevelt visited the Panama Canal, no sitting president ever left the country. (It just wasn’t “done.”) The designation “Air Force One” dates to the Eisenhower administration. In the last thirty years of his life, Thomas Jefferson never visited a northern city. When he traveled in Europe, it was with one servant and his notebooks. But some presidents were more eager to wander.

    During his entire lifetime Abraham Lincoln never left the United States, although twice as a young man he journeyed down the Ohio and Mississippi rivers, from Kentucky to New Orleans — the future president as Huckleberry Finn.

    To negotiate the Peace of Paris after World War I, Woodrow Wilson spent almost six months in France, where he was greeted by rapturous crowds. On location, he only muddled the disastrous peace at Versailles. (“Making the Hun pay…”) On his return to the U.S., however, he failed to persuade the Senate to ratify the treaty.

    Other presidents have traveled to escape the clouds of scandal. With his popularity ebbing, Warren Harding went on a tour of the Pacific Northwest (avoiding Teapot Dome, Wyoming), and Richard Nixon clogged the streets of Egypt and Romania during the depths of the Watergate scandal.

    John F. Kennedy, before his election, traveled like a foreign correspondent. In 1951 he journeyed, often by car, for twelve weeks, first from England to Yugoslavia, and later from Israel to Pakistan, India, Indochina, and Korea.

    Without a doubt, FDR was the most courageous presidential traveler. He spent countless days at sea, crossing the Atlantic during World War II, when there was the high chance of a U-boat attack. Unable to walk, Roosevelt was often winched from one rocking destroyer to another, in the middle of the rough ocean. He persevered to attend conferences in Casablanca, Argentina, Tehran, Malta, and Cairo.

    Although Harry Truman is remembered for giving entrenched interests “hell” off the rear platform of a private railroad car, what he liked most were road trips. Matthew Algeo’s Harry Truman’s Excellent Adventure is an account of how, after his presidency ended, Harry loaded Bess into the family Chrysler and drove her from Independence, Missouri, to New York and Washington, DC. They stayed in motels along the way, and he paid for his own gas.

    George W. Bush always looked like a reluctant traveler, only comfortable shuttling to Camp David or his ranch in Texas. By contrast, Teddy Roosevelt was not just a traveler, but an explorer. After his presidency he embarked on epic journeys across Africa and South America, nearly killing himself up the Amazon River.

    How does Barack Obama fare as a traveler? I read somewhere that he is gracious in his encounters with troops stationed abroad, and that speaks well for his compassion. On his diplomatic missions, though, he seems to travel in circles, and to be impatient with a world not always so adoring.

    In November 2010, he flew from Washington to India, and then to summit meetings in South Korea (which went nowhere). No sooner was he back in Washington than he flew to Lisbon for a NATO summit. A week later he went back to Asia, in the dead of night, this time to Afghanistan. He spent all of four hours there on the ground. Why fly thirteen hours to Afghanistan and miss seeing President Karzai, only to head directly back to Washington?

    Couldn’t his schedulers have doubled up on some of these excursions? After all, it costs $181,000 an hour to fly Air Force One, and millions more for the cavalcade.

    As an international traveler, Obama strikes me as being like many American executives who zip in and out of Europe as though it were St. Louis, and who always need to be back in Washington by Friday afternoon. Obama has made more foreign trips, for his time in office, than any other president. To what end?

    In 2009, Obama went twice to Copenhagen, in the space of about ninety days, first to lobby for Chicago’s chances at Olympic swag, and then to lecture the developing world about carbon emissions. (This from someone who travels with an entourage of about seven hundred, chaser jets, and a motorcade caravan worthy of a sheikh.)

    On his first trip to Copenhagen (for less than a day), the Olympic committee was indifferent to the presidential fly-by, which no doubt disappointed the Daley brothers, who were hoping for some Olympic-sized contracts in Chicago. Some weeks later at the climate change conference, an obviously jet-lagged Obama burst in on the Chinese, jawboned for a while (in the manner of Basil Fawlty), and went back to the airport with little to show for the carbon emitted.

    If global warming is such an important issue, maybe he could have stayed the weekend in Copenhagen? A week earlier he had flown in and out of Oslo. He was there for twenty-six hours, to collect the Nobel Prize, but in his rush he snubbed the Norwegian king.

    Last November, when the president went to India for three days, he took with him six armored cars and about forty planes, not to mention a naval fleet stationed off Mumbai. That’s along with the four chefs, food tasters, helicopter pilots, schedulers, stewards, generals, spin doctors, secret service officers, fifteen dogs, and Washington officials that numbered in the hundreds. The travel costs were estimated at $200 million. You tell me what was accomplished. Maybe he needed the miles to get to Hawaii?

    Photo by http2007 Thierry of Air Force One at the Prima Air & Space Museum in Tucson, Arizona.

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives in Switzerland and travels under the motto that, “A good hotel is never good enough, but a bad hotel is a joy forever.”

  • The NFL: Running the Numbers in the Football Business

    Why does America — and I include myself — invest so much psychic energy, not to mention hard dollars, in professional football, a sport that on many levels combines the worst aspects of roller derby and professional wrestling?

    Sometimes when I am watching Dan, Boomer, Phil, Chris, Rod, Coach Cowher, Prime, Jamie, Mike, Shannon, and the rest, wearing those pink ties and crisp suits and seated on the high alters of cable television, I feel as if I am watching the Supreme Court deliberate on taunting, end-zone celebrations, the Raider Nation, clock management, Ochocinco, booth reviews, Cover Two, the wildcat, and Brett Favre’s shoulder, if not the ‘junk’ in his text messages.

    Sadly, most Americans are clearer on what happens in the red zone than they are about the decisions of the Supreme Court. The business of America is football, much more than it is Main Street stores, the national budget, or the small print of the Patriot Act.

    Maybe when the Decatur Staleys were playing the Chicago Cardinals, or when teams like the Massillon Tigers, the Shelby Blues, and the Ironton Tanks were on the field, football was a sport. It was played in local stadiums by players who worked in nearby steel mills and earned $25 a game.

    The forward pass, national television, and the deification of Vince Lombardi turned the sport into an $8 billion bonanza that, to cover expenses, relies upon subsidized stadiums, sky boxes full of corporate bonus babies, enough violence on the field to render many ex-players vegetables, and a relationship with television that has reduced the airing of the games to violent You Tube clips spliced around ads that blur the attractions of Cialis and McDonald’s (“I’m lovin’ it!”)

    What is the reality of football “franchises,” the right to own a team in a select market? Because football is absurdly given an antitrust exemption (as if the play of the Cincinnati Bengals is in the interest of national security), franchises are best understood as local protection rackets.

    Except for the Green Bay Packers, which is owned by its fans, most NFL teams are owned by corporate hierarchs who have paid millions to buy a team. Fair enough; free enterprise is in the playbook of capitalism.

    But instead of a sporting club that enjoys competition and fair play, what owners buy is a cooperative share of the national football monopoly. Its purpose is to browbeat cities and states for subsidized stadiums. Players are expected to perform under barbaric working conditions, and advertisers and television networks join a never-ending race for the rights to broadcast the spectacles on the Circus Maximus.

    If you are doubtful of football’s influence–peddling in smoke-free political rooms, consider this: President Obama appointed Pittsburgh Steelers owner Dan Rooney to be the U.S. Ambassador to Ireland, no doubt for his go-routes to the Democratic Party. Or that the insolvent state of New Jersey encouraged the Jets and the Giants to build a new $1.6 billion stadium in the Meadowlands, even though the state still owes $110 million on the stadium it replaced, which has since been torn down.

    Keep in mind that most NFL sweetheart deals are hidden as carefully as Jimmy Hoffa would have been spiked into the end zone at Giants Stadium. Revenue-sharing, sales tax increases, municipal bonds to buy stadium land, and parking-lot concessions are among the many ways local political establishments pay obeisance to team owners, who did not get their, on average, $1 billion in net worth by reaching into their own pockets.

    New Jersey loves to boast that the Jets and Giants paid privately for New Meadowlands Stadium. Actually, the fans paid, via PSLs (that’s personal seat licenses), and by paying $200 a pop for many seats. But the NFL owners chipped in $300 million, and the state has poured some $2 billion into the nearby Xanadu project (shops, offices, malls, etc.) that has little to show for the spent money except upgraded swampland, and a train line to the new stadium.

    To pay for their subprime stadium debts, NFL owners are now threatening to “lockout” the players from the 2011 season, unless the players’ union agrees to lower the league’s salary cap, which sets how much each team can spend on its players.

    The fans are told that the salary cap (59% of league revenue) is in place so that teams can compete as equals, and that “on any given Sunday,” every team has a chance of winning. Actually, the cap is just another example of the extent to which the NFL is a closed shop and exists to limit owners’ expenses.

    To be sure, football players are not like you and me, and are paid hundreds of thousands of dollars for relatively short careers. (Running backs last less than four years in the league.) But for all the stars that you read about getting $7 million in signing bonuses, most players earn the league minimum (about $400,000) and are cut, usually after suffering a career-ending injury.

    More life–threatening is the extent to which a career in football renders players prone to dementia: 6.2% of NFL players are affected, as opposed to 1.2% in the general population. In dealing with this issue, what most interests the owners isn’t player safety, but rather juking class-action liability, were it to be proven in court that NFL play causes dementia.

    The bling for NFL owners, along with those subsidized stadiums, is its $20 billion in television contracts from the various networks, including CBS, NBC, Fox, and ESPN. The owners divide this swag, and the networks parse the schedule: there are games on Sunday afternoon, Sunday night, Monday night, and often on Thursdays — roughly the slots of Gregorian rituals in the middle ages.

    Football’s thirty-two teams are a closed shop that enjoys antitrust exemption (hence, no competition), and the games are not “news”, and thus available to anyone to broadcast. Football is studio entertainment, played before a “live stadium audience.”

    Why do we need billion-dollar stadiums in each market, when a handful at Universal Studios would suffice? And they could be “themed” to simulate snow bowls, mud games, or even the Black Hole, Oakland’s biker digs.

    Ratings of televised football games continue to go up and up, dominating national life not just on Sundays, but increasingly on holidays, too. Strangers could easily get the impression that Mayflower pilgrims got together with local Indians to watch the Lions get stuffed yet again on Thanksgiving. Can an indebted nation really give up so many hours to the Bills and the Buccaneers?

    The biggest risk to football as we now know it is if new technology (will today’s mainstream networks really survive?) diminishes advertising from the NFL games and waters down the $20 billion in television contracts. And, although I have no proof or evidence, I wonder if another risk to the sport could be a gambling scandal.

    Developments that range from the NFL’s Red Zone broadcast to Fantasy Football have the feel of gimmicks that appeal to gamblers, who, like derivative traders, seek ways to bet on the fractional aspects of the games. One revelation of the Tiger Woods humiliations was the amount of time pro athletes spend in Vegas, rubbing shoulders with high rollers, if not cocktail waitresses. Didn’t the golfer Phil Mickelson once bet $20,000 on the 28-1 Ravens to win the Super Bowl?

    For the fans, the game is about their teams winning and getting to the Super Bowl. For the owners, it’s about maintaining membership in the football oligopoly (worth about $250 million a year for each team, including the woeful Cleveland Browns). For the hot money, the games are a variation on off-track betting.

    As a fan of the New York Jets, now in the forty-first year of their rebuilding program, I might take a bleak view of the NFL, as part of my denial over Mark Sanchez’s wobbly arm and his “happy feet.” Maybe I am remorseful for all the time I spend listening to Mike Mayock explain zone blocking schemes or the A gap.

    At the same time, I share the views of former French president Georges Clemenceau, about an earlier League, that “of Nations.” At the Peace of Paris in 1919, he said: “I like the League. I just don’t believe in it.”

    Photo of NY Jets v Eagles game by Ed Yourdon

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives in Switzerland.

  • General Motors’ IPO: Deal Or No Deal?

    Those who are looking for a feel-good stimulus story, notably members of the Obama administration, cite the recent initial public offering (IPO) in which the federal government sold off 28 percent of its General Motors shares for about $15 billion.

    When the government-owned shares went public, President Obama said: “American taxpayers are now positioned to recover more than my administration invested in GM.” From the headlines and sound bites, you might think that the government was in the money on the $49 billion that the Troubled Asset Relief Program invested in GM during the dark days of the Great Recession.

    To believe that the U.S. government made money on its GM investment is to imagine that former republics of Yugoslavia will get back together so that they can restart the production lines of the Yugo.

    In the GM story, there have been many winners and losers on the road from bankruptcy to IPO. For the most part, the losers include investors, bondholders, taxpayers, and the 65,000 workers laid off so that, in the showroom of American politics, the bailout money could look like a rebate.

    The winner was the United Auto Workers union, which delivered Ohio and Michigan to the Obama campaign in the 2008 election. Without the union’s support in 2012, the president’s handling and maneuvering ability in the electoral college might resemble the torque on a Chevy Vega.

    The GM that went bankrupt in 2008 was not just a car company; it was also an unfunded pension plan, a bad bank (partial ownership of General Motors Acceptance Corporation or GMAC), and a health maintenance organization notable for padded bills.

    As it hit the crash wall, GM had negative equity, $88 billion in losses since 2004, 92,000 workers, 500,000 retirees, and 22% of a domestic car market that had shrunk to 13 million cars a year.

    What sleight of an accountant’s hand turned the originator of the Chevy Nova into an emerging juggernaut (maybe one with “soft Corinthian leather?”) that the market now values at $51 billion?

    Instead of letting GM go through Chapter 11 liquidation, and winding up the company according to bankruptcy laws, the U.S. government stepped in and allocated the spoils according to political rather than legal precedents. In theory, the move was designed to “protect American jobs.” What did these jobs cost?

    The immediate losers were GM shareholders (largely wiped out), and the holders of $95 billion in corporate bonds, now worth about $0.30 on the dollar.

    If you check the price of GM shares today, you will see them trading at around $34 a share. “Not bad,” I can hear you saying, recalling GM at $22 or even $8. But these are the new Government Motors shares; the old ones, which your grandfather owned, are trading for less than $1 on penny stock exchanges. Maybe the certificates are selling at flea markets?

    In the restructuring, the new owners of GM became the U.S. (61%) and Canadian (12%) governments, and the United Auto Workers (17.5 %), whose generous health and retirement packages would have been watered down or lost in a commercial liquidation.

    In the bankruptcy, the UAW retirees were moved ahead of the bondholders to the front of the disassembly line, no doubt because their rust-belt votes count more in presidential elections than those of bi-coastal hedge funders.

    Stakes in the new GM were granted to the union in lieu of cash due on health care and other benefits, which survived the reorganization. In the recent IPO, the unions netted $3.4 billion for a third of their stake.

    Other options thrown into the car deal included the $17 billion given to GMAC, whose losses became a ward of the state, and whose profits go to the hedge fund, Cerberus. It’s been renamed Ally Bank, just so you won’t associate its bad debts with the GM bailout. (“Test drive the new Ally… from zero to $17 billion in six point four seconds.”)

    GM was also allowed to carry forward $45 billion in Net Operating Losses through bankruptcy, a deduction rarely, if ever, granted to other scrapped companies. Clunkers for cash? The company also got a $6.7 billion loan, at below market rates.

    And finally, to promote Chevy Volts, buyers of the new hybrid electric car are given $7500 in federal tax credits. Maybe Ford dealers can match the subsidy on their hybrids by throwing in a set of snow tires?

    The new GM is allowed to operate with an unfunded pension liability, which remains on the books to the tune of about $30 billion. Mark that claim to market (those accounting rules that did so much to collapse the likes of Merrill Lynch), and GM’s IPO stake is hardly worth $15 billion.

    The contrived GM liquidation also kept the auto maker from dumping about $14 billion in promises onto the Pension Benefit Guaranty Corporation, a nominally private company — the board, however, consists of the secretaries of Labor, Commerce, and Treasury — that, with government benedictions, backs up politically correct pension payments.

    There is almost no way to know the total losses that can be attributed to the government’s GM restructuring. But, clearly, the government played Three-card Monte with the company’s bad assets, and kept the good ones for themselves. On Wall Street — the object of so much government venom — this is called “asset stripping.”

    Little wonder that everyone, including its government shareholders, are now upbeat about GM’s prospects. Morningstar writes: “GM can break even at near-depression-like sales volume, and it is selling more units in the U.S. with four brands than old GM did with eight brands in 2009.”

    At the time of GM’s IPO, President Obama sounded like Mr. Goodwrench: “Just two years ago, this seemed impossible. In fact, there were plenty of doubters and naysayers who said it couldn’t be done, who were prepared to throw in the towel and read the American auto industry last rites.”

    What he might have said is this: “We hosed the shareholders and suckered the bondholders down to $0.30 on the dollar. We propped up GMAC with $17.5 billion and then buried the losses in bad bank accounting. We leaned on the accountants to keep $45 billion in Net Operating Losses. We learned something from Bernie Madoff and are letting GM continue to carry $30 billion in unfunded pension liabilities. We dumped GM’s health care obligations, for shares, into a union trust. The rest we moved off the lot. Home run.”

    The government originally threw $49 billion at GM’s cash guzzling problems and then forced another $100 billion on the market in losses. In exchange thus far, it has recouped $15 billion, for about half of it stake in the new GM.

    In Washington, that might pass for a good deal. It might also seem fair in a remake of The Godfather (“The Corleone Family wants to buy me out? No, I buy you out, you don’t buy me out.”) Elsewhere, it sounds like a lemon.

    Photo of Classic Cadillac 2 by Shiny Things: “For-sale Cadillac parked in Morro Bay. How tempting is that?”

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives in Switzerland.