New Geography

Author: Matthew Stevenson

  • Demographics: The Elderly Dividend

    Some 40 million Americans are now over age 65, and about 6 million are over 85. In the land of Denny’s, anyone over 55 can order the senior platters. Would I be right in guessing that 30 million American children spend part of their time looking after their parents?

    Like many baby boomers, I spend a considerable amount of my time in the company of my ninety-something parents. That involves fixing meals, opening car doors, reading Maureen Dowd aloud from the newspaper, adjusting hearing aids, listening to doctors, cleaning out the garage, and cajoling them to eat more or less food.

    Many care days are a blur of pill administration, shopping, desk sorting, gas-filling, and lunch preparation, to the point that, instead of actually visiting with my parents, I become just another worker on the assembly line of old age.

    Keep in mind, too, that my parents are among the luckier senior citizens, in that they have savings to invest in their quality of life, and the time that I devote to them is, while considerable, part-time. Both are sustained by a devoted network of caregivers who do the heavy lifting into the showers or out of the chairs. .

    In the last four years, my mother has had several bouts of pneumonia, a broken hip, and memories closer to the summer of 1938 than to yesterday’s events. In January of this year she was consigned to hospice, only to “graduate” some weeks later. After the doctors stopped her medications, with only the medicine of love — daily visits from my father, the company of my sisters, and a companion — she willed herself more time, and even now walks to dinners.

    My father does not see, hear, or walk particularly well, yet thanks to his courage and his care group, he still occasionally commutes to his office in New York and leads inspirational seminars for those less fortunate than he is. On a recent visit, I took him to a New York City book party, a Revolutionary War museum, and a high school graduation. On his own, he attended a board meeting.

    In economic terms, my parents’ old age is a cottage industry, providing all sorts of work for aides, nurses, orderlies, doctors, hospital staff, gardeners, and the like. They live in a retirement community, which has many benefits, mostly the company of stimulating friends.

    Across much of the United States, golden years are seen in much the same way that Eskimos look upon a beached whale. It makes sense that the elderly would be easy marks. They have savings from a lifetime of work, are vulnerable and need help, and staying alive is a good use of their time and money.

    In the cost-benefit analysis of old age, is it worth it? This question came up during the recent health care debate, in which the specter of “death panels” was raised as a coded phrase to ask whether the elderly use up too much of society’s assets.

    The projection is that twenty percent of the population will be over age 65 in 2030, when the U.S. will have the same demographics that Florida has today. Like everyone else, I have watched the television reports about ninety-five year old patients, terminally ill with cancer, being given hip replacements.

    No wonder the annual budget of the American Association of Retired People is $5.5 billion, in part to block a rise in the retirement age to 70 or 72. When 65 was chosen, only two to three percent of the population lived beyond that age. Think of 85 today.

    As an investment, old age does not look like much of a deal. Caring for older people is ruinous to public and private balance sheets. Medicare and Social Security, if left unattended, will bankrupt the United States.

    Even if the country picks up some of the $51 trillion in projected medical and retirement benefits, families themselves will still pay billions for private nurses, retirement homes, and uninsured medical costs. Think of how many families lose their life savings in the last years of their parents’ lives. The nursing home “tax” precedes that of inheritance.

    Admirable as is the goal of universal health care, its bottom line is to transfer even more money into the accounts of those in the senior-citizen business. Health care is approaching twenty percent of the domestic economy, and a disproportionate amount of that money goes to profit centers that benefit from the elderly. Does America have crumbling infrastructure because its seniors are living well into their nineties?

    Here is a contrarian view: Rather than looking at old age as a bad investment, I tend to see it as a gift that cannot be measured in economic terms — something closer to Thomas Jefferson’s “life, liberty, and the pursuit of happiness” than to a negative cash flow statement.

    To be sure, looking after elderly parents is an emotional and physical strain. The days start early and end late, and involve sadness and frustration. I can say, however, that I enjoy my parents’ company, in their nineties, as much as I did when I was growing up or when they were in their fifties and sixties.

    For starters, older parents are great listeners, and mine love nothing more than the narrative of their children’s and grandchildren’s lives. I am just back from three weeks in their company, and in many ways all we did was talk—old age as a Viennese café. From friends I got snatches of conversation while they glanced at their iPhones or rushed off to meetings. From my parents I got hours, even days, of their undivided attention.

    Thanks to my parents’ old age, I have also learned a lot about the American Revolutionary War, as on each visit to them I lead an expedition to a New Jersey or Pennsylvania battlefield. In recent years, between all the medical crises, I have driven them to Monmouth, Valley Forge, Brandywine, Trenton, Princeton, Germantown, Morristown, Rockingham, and Somerville, and we have talked endlessly about Washington’s failings as a general, General Charles Lee’s court martial at Monmouth, and the British preoccupation with the spice islands, diverting subjects that we all prefer to dementia’s 36-hour day.

    I like also the laughter of old age. When not too tired, my sisters and I joke about the everyday amusements that we encounter. Ever the gracious hostess, my mother, during an early meeting with the hospice team, whispered to ask me if we had “any cheese and crackers” to serve them. In the hospital, she assumed that two of her doctors, in white lab coats, were hairdressers, and asked them, “How much for a trim?”

    More than the pills, I think it’s the shared company and the laughter that keeps my parents alive. I read Onion headlines to my father (such as “Supreme Court Upholds Freedom of Speech in Obscenity-Filled Ruling” or “Pope Forgives Molested Children”). While we were watching golf, my mother gave me a knowing look when the announcer mentioned Tiger Woods.

    During my mother’s illness this winter, we adult children rushed to her bedside. But then, as we had not been together in a while, we started talking and laughing amongst ourselves, even though the doctor had given her about three days to live. Although we were sitting around a hospital bed, it could have been the patio of our childhood home. Later that day, my mother said to my younger sister, “This is fun. We should do this more often.” She’s still with us.

    Flckr photo by Bensons

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited,winner of Foreword’s bronze award for best travel essays at this year’s BEA. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives in Switzerland.

  • McChrystal Exit: Obama and His Generals

    General Stanley McChrystal may be the first commanding general in the history of warfare to be relieved of his command because he groaned over the receipt of an email from an ambassador, or because one of his aides whispered to a Rolling Stone reporter that the president had looked “intimidated” in a meeting with the military brass.

    In terms of carrying out strategy, it has been stated that the president had no military complaints about the heavy metal general, who was walking the impossibly thin red line between a general war in Afghanistan and a campaign waged only with assassinations and drone missiles.

    Just a month before his firing, McChrystal successfully packaged a tour of the White House and Capitol Hill for President Hamid Karzai. In earlier media campaigns — notably when the president flew into Kabul in the dead of night to lecture a pajama-clad Karzi over corruption — the Afghan president was deemed unworthy of an American war effort.

    However briefly, McChrystal had succeeded in integrating the Afghan government into the order of battle. So why was he sacked for humming a few bars of Satisfaction in the presence of a rock reporter?

    No doubt McChrystal had his enemies within the bureaucracy, including the ubiquitous ambassador Richard Holbrooke, and the U.S. ambassador in Kabul, former general Karl W . Eikenberry. Along with these two add in a legion of jealous Army politicos, all of whom would love to wear combat fatigues to a presidential photo-op.

    In relieving General McChrystal, perhaps as part of a search for his mojo, President Obama joins a long line of presidents who never figured out how to command their commanders. Here’s a brief summary of some of the more complicated relationships between American presidents and their field generals:

    President Lincoln— Often praised for his habits of command in the Civil War, he nevertheless promoted, endorsed, and endured the incompetence of such generals as McClellan, Meade, Burnside, Pope, and Rosecrans before winning the war with Grant and Sherman, both of whom would horrify a Senate confirmation hearing, let alone the editors of Rolling Stone.

    Grant was a drunk who killed thousands at Shiloh and Spotsylvania, and Sherman once celebrated the drowning of a boatload of reporters, pointing out that maybe their “heavy thoughts” had taken them to the bottom. He also burned Atlanta. Both understood how to win modern wars.

    President Madison— In the war of 1812, he had to endure generals who botched several invasions of Canada, allowed Washington to burn, and, in the case of Andrew Jackson at New Orleans, fought battles after the peace was signed. (But the Battle of New Orleans did more than Yorktown to forge American independence.)

    President Kennedy— He loathed his top generals, blaming them for the Bay of Pigs fiasco and for pushing him into Vietnam, saying “They always give you their bullshit about their instant reaction and split-second timing, but it never works out. No wonder it’s so hard to win a war.” Kennedy’s skepticism about the military command, however, pushed him to ignore their advice for invasion and air strikes in the Cuban Missile Crisis, possibly averting nuclear war.

    Presidents Carter and Johnson— In the style of the Obama White House, these two both micro-managed their war efforts. Jimmy Carter was the air traffic controller for Operation Blue Light, the failed attempt to rescue American hostages in Iran. Lyndon Johnson boasted that the Air Force could not hit so much as “a shithouse” in Vietnam without his authorization. Both presidencies were lost due to the foreign entanglements of the commander-in-chief.

    President Roosevelt— A successful example of a commander-in-chief; no president handled generals better than FDR, who was a shrewd judge of character. Roosevelt spent many months of the war in proximity to his fighting forces (including his own sons, who were serving officers). He vested authority in a number of competent commanders, starting with General George C. Marshall.

    Roosevelt was clear in his strategic objectives and did not meddle, for example, in the deployment of 30,000 troops. Nor did he fire General Patton when he slapped a fatigued soldier. Imagine what General MacArthur would have said about FDR to Rolling Stone? Would FDR have cared? (Eisenhower remarked: “I spent seven years under MacArthur studying dramatics.”)

    Despite all the media visibility around his decisions on Afghanistan, we know little about President Obama’s habits of military command. When he’s before large audiences, he is good at articulating the role he sees for the United States in the world. For better or worse, he is unafraid to offend traditional allies, such as Israel and Great Britain. He even sided against England in a recent flare-up around the Falkland Islands.

    Strategically, however, Obama rarely contradicts his military-industrial complex. Yes, he fired McChrystal, but he replaced him with his boss, mentor, and near Siamese twin, General David Petraeus, as if to imply that the only problem in Afghanistan was McChrystal’s joke about Vice President Biden.

    While hitching his political star to the Nobel Prize for Peace, Commander-in-Chief Obama continues to fund Israel’s war footing, stations forces in Iraq, widens the commitment in Afghanistan, attacks Pakistan with drones, and pushes for war sanctions against Iran. In the pulpit, he is Woodrow Wilson; in action, he’s George W. Bush.

    Nor has the Obama administration been able to articulate a coherent war aim behind the commitment of additional forces in Afghanistan. Look at the many mixed messages sent to Karzai, who depending on the week is “our man” or the next Diem.

    The president’s current directive to his generals is to avoid casualties, hold a mountainous country the size of Texas with eight divisions, foster rural development in places like Helmand, find bin Laden, pacify the federal tribal areas, make President Karzai look democratic, train the Afghan army and police, leer across the border at Iran, and prop up a wobbly government in Pakistan — although, politically speaking, all the administration wants is enough shock and awe so that the Republicans in the 2010 mid-term elections cannot paint it as “weak on terror” or having “lost” Afghanistan.

    In turning the strategic decisions about Afghanistan into an endless university teach-in (with all the allusions to “accountability,” “transitions,” and “benchmarks”), the president acts as if all the timing questions in this war were on his side. Let’s hope that the Taliban and other insurgents, especially those now planting car bombs in Islamabad, Baghdad, and Kabul, got the departmental memo that the United States would be on sabbatical in 2011.

    In 1815, Andrew Jackson felt he had to attack the British the very night he heard they had landed near New Orleans. By contrast, President Obama spent a leisurely year pondering the Weltanschauung of Afghanistan and publicly ruminating about strategic options. He now feels he can afford the luxury of sacking a field general for failing to sound reverential in an interview. Aren’t there better measures of a commander? (At Bellow Wood, a Marine officer said: “Retreat? Hell, we just got here.”)

    Before Lincoln could become the wartime president that we admire, he needed to find a general “who fights,” and he needed to articulate an acceptable and collective war aim, which he achieved with his Gettysburg address and Second Inaugural. He also had to come to the conclusion that Grant, drunk, made more sense than his other generals sober.

    President Barack Obama meets with Army Gen. Stanley McChrystal. Official White House photo by Pete Souza.

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, winner of Foreword’s bronze award for best travel essays at this year’s BEA. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives in Switzerland.

  • Is Pennsylvania History?

    On a recent whirlwind through Pennsylvania, I thought of James Carville, who popularized the notion that “It’s Philadelphia on one side, Pittsburgh on the other, and Alabama in the middle.” It’s a clever line, but between the Ohio and Delaware rivers he is missing a great American tapestry: the wreck of the Penn-Central, United flight 93’s final frantic moments, the social history of the Johnstown flood, and whether a state of steel and coal is past or present.

    Pennsylvania also reflects some broad truths about the nation, in particular, that stimulus plans can take forty years, the Amish have it right, the Civil War remains a personal wound, and Amtrak will never be the agent of high-speed rail.

    My first stop was Harrisburg, and I got there on a train that crossed through Amish country. I would imagine that as a community the Amish have the lowest debt-to-equity ratio in the country. There is something timeless and inspiring about their red barns and silos that flickered across the train windows, and no one needs to exhort the Amish to “Go Green.”

    In Harrisburg, as if a character in a novel by Theodore Dreiser, I walked with my grip from the station to a restaurant in the shadow of the state capitol. Later that evening I went to a high school graduation in the Concert Forum Hall, an elegant rotunda that was finished in the depths of the Depression.

    Around the circular walls are huge maps and timelines of world history. I passed the slow moments of the ceremony following Hadrian on his way into the Syrian desert and Marco Polo to the court of the Great Khan.

    Will the current stimulus money produce any buildings of such greatness? Somehow I doubt it. When the train went through Philadelphia, I saw a cheerful sign in an empty rail yard, with wording to the effect that the hot government money would get Americans back to work. The boast sounded unconvincing, as if everyone knows that stimulus money will end up funding deficits, national security advisors, and weapons contractors.

    General Robert E. Lee thought so much of Harrisburg and its strategic rail bridges that twice he embarked on campaigns to cut the main line of the Pennsylvania Railroad, and twice he failed, first at Antietam and then Gettysburg. The bridges over the Susquehanna remain, and their stone arches echo Avignon. The downtown — which looks in need of some stimulus — recalls the urban loneliness of Edward Hopper.

    From Harrisburg I drove west to Chambersburg and Mercersburg, strategic hamlets in the Civil War, but now a long way from the information superhighway. In 1864 Lee’s general, John McCausland, burned Chambersburg to the ground when the citizens failed to post his demanded ransom, which was $100,000 in gold, or $500,000 in currency (even terrorists are leery of inflated money); later, Chambersburg was the only northern town razed during in the war.

    President James Buchanan grew up in Mercersburg, a sleepy town notable today for its distinguished prep school. The log cabin in which he was born is now on the campus of Mercersburg Academy, and a nearby plaque notes that Buchanan served as U.S. Senator, ambassador to Russia and Great Britain, and Secretary of State before becoming the fifteenth president, impressive achievements for someone whose presidency is remembered as a failure, ruined by the Dred Scott decision and the drift to Civil War, which he did little to prevent.

    In a more recent conflict, United flight 93 crashed west of Mercersburg, near Shanksville, which echos the lonely farmland over which so much of the Civil War was fought. Conspiracy theories (a rare American growth industry) postulate that no plane crashed at Shanksville or that the one that did was destroyed by a missile, perhaps on orders from the trigger-happy Dick Cheney. (President Bush was finishing up My Pet Goat with the school kids.) Other theories claim that engine parts were found eight miles from the crash site and no plane debris larger than small fragments were located.

    A visit to the temporary Flight 93 memorial, however, puts to rest these and a number of other 9/11 conspiracy theories. About eighty percent of the plane was found at the site, although much of its was buried in the soft earth that had been strip mined; many local residents saw the plane hurtling intact toward the ground; the only debris found miles from the crash site was paper; and one of the engines flew several hundred yards — not miles — from the impact crater.

    The memorial to the victims of Flight 93 is budgeted to cost about $50 million, some of which has been privately raised. In design, it looks like the Vietnam Memorial in the middle of nowhere. No doubt it was a flush Congress that authorized the expenditure, even though the temporary memorial, a simple American flag at the crash site and a makeshift observation deck, looks like a better use of government resources. (Think of American tragedies remembered only with a statue in a traffic circle.)

    Forty Americans died at Shanksville. The death toll at Johnstown, just up the road, was more than two thousand when in 1889 a dam above the city broke and a wall of water washed over the gritty mill town. The tragedy is recalled in a series of memorials around the Little Conemaugh River Valley, and at a flood museum in Johnstown, which more recently has lost most of its steel production and its jobs.

    Not even the local filming of the 1977 movie Slap Shot with Paul Newman could save the economy of Johnstown, now laced with boarded storefronts, although it’s fun in the main square to imagine the presence of Coach Reggie Dunlop and the Hansons (“They brought their fuckin’ TOYS with ’em!”).

    A morality tale as well as a local disaster, blame for the Johnstown flood falls on The South Fork Fishing & Hunting Club, a mountain retreat of the super rich — Carnegie and Frick were members — that callously ignored warning signs that its South Fork Dam might give out. No wonder its so hard to win as a Republican in central Pennsylvania.

    I spent the night in Pittsburgh, no longer a steel city, but one given over to the service economy: in this case, sports stadiums, universities, finance, and hospitals. Old America made steel rails; new America entertains the masses.

    I left Pittsburgh on the The Pennsylvanian, Amtrak’s daily service to Philadelphia and New York, a remnant of the Pennsylvania Railroad, once the largest corporation on earth. After the Pennsylvania Railroad merged with the New York Central in 1968, the combined company failed less than three years later. The writer L.J. Davis said “it was more a death watch than a merger.” Penn-Central was the Enron of the 1970s. When it failed, it was the biggest bankruptcy in U.S. history.

    Here’s an overlooked cautionary tale about the delayed time reactions of government’s economic interventions: played out over thirty years, the Penn-Central merger was a big success. It took, however, the deregulation of the freight railroad business and the sale of the assets of Conrail (the successor to the bankruptcy) to the Norfolk Southern and CSX. When the dust settled, Penn-Central left the Northeast with two privately-owned railroads that are everything the shareholders had hoped for in 1968.

    On my return trip east, the train crossed the Allegheny Mountains on the Horseshoe Curve, ambled through Altoona and Lewistown, and then paused for almost forty-five minutes in Harrisburg and Philadelphia—an odd schedule for a railroad now talking up high-speed rail. Keep in mind that all the rail stimulus billions will bring is a return to the train speeds reached in the 1920s… the perfect metaphor for the illusions of government investment.

    What makes me hopeful about Pennsylvania’s future? I see optimism in the Amish red barns, the three rivers in Pittsburgh, the endurance of Johnstown, the four tracks of the main line, the federal-era houses in Harrisburg, the life of the Susquehanna, and the roadside markers like one in Chambersburg that reads: “On June 26, 1863, Gen. Robert E. Lee, and staff, entered this square.”

    What’s not to admire about a state that keeps its history so alive? I only wish it still had a steel industry and the Broadway Limited.

    Flickr Photo by Runner Jenny: 155th Pennsylvania Zouave Monument, Little Round Top, Gettysburg.

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, winner of Foreword’s bronze award for best travel essays at this year’s BEA. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives in Switzerland.

  • BEA Report: Printed Word Surplus? Brave New Books at Book Expo America

    If the future of the printed word lies inside the sleek case of Apple’s new iPad, get ready for illuminated manuscripts that will turn most books into animated cartoons. It was all on display at Book Expo America (BEA), the just-ended annual trade fair extravaganza that pulls together under one roof all the players in the publishing industry.

    BEA met in the vast caverns of New York’s Jacob Javits Center, which for two days was clogged with booksellers, librarians, authors distributors, packagers, literary agents, ghost writers, designers, and editors, all searching for the holy grail of the next bestseller.

    The former Duchess of York, Sarah Ferguson, known to the tabloids as Fergie, was hyping her new book, which I daydreamed might have the title, “Diary of a Bag Woman.” She wasn’t alone: To tout their wares, at BEA, every publisher that can do so arranges for its star authors to sign advance copies of their forthcoming books.

    Other authors on display at this year’s exposition were Ian Frazier, of New Yorker fame, who has a new book about his travels in Siberia, and Gary Trudeau, Doonesbury’s creator, who was flogging an anthology of Zonker’s forty years. The publishers of L. Ron Hubbard accosted me in the aisles with some raptures on Scientology. And I sat through several presentations on the future of electronic books, which are best understood as clouds of literacy delivered with the whoosh of an email.

    The eight hundred pound gorilla in the rooms at the Javits Center was, of course, Amazon, which delivers an endless river of books to readers, but which shaves the margins of publishers and writers.

    There was little evidence of Barnes and Noble or Borders, the overweight gorillas of earlier years. Both retailers now appear in the guise of suburban dinosaurs, heavy on inventory, coffee, and “gift ideas.”

    Who needs to venture to the mall for a book when Amazon can deliver it to your mailbox, or an ebook to your Kindle, seemingly in seconds? Amazon also offers “print on demand” services that, based on your digital file, can print a quality paperback edition of a book in about four hours from when an order is received, sparing the industry the headache of remaindered copies and large warehouses.

    The next step in retailing was on display, as well: the so-called Espresso Book Machine, a $75,000 on-demand printing press that, almost instantly, can print top quality paperback books. Imagine printing out War and Peace as you are waiting to board a (delayed) flight.

    The model of the book publishing industry hasn’t changed since Gutenberg printed his bible. As in the Renaissance, publishers recruit authors to write compelling stories, print them between cardboard, and try to sell the products to captive audiences.

    The author’s take from this production line is about fifteen percent, after expenses have been paid. For a book that sold 20,000 copies with a cover price of $30, the publisher might gross $200,000, while the author could hope to take home about $30,000 — one reason why publishers at BEA entertain each other with expense account lunches while writers live in garrets.

    Even Amazon has no lock on the future of book publishing, especially that of ebooks. Its Kindle, despite being early in the game, is proprietary to Amazon, and the future of electronic publishing may be in the sale of “open format” devices, so that consumers can read their book files on whatever portable reader they happen to own.

    The question of which format will become the ebook industry standard was certainly a buzz topic at BEA. Don’t bet on the iPad sweeping the field; many conventioneers complained that it was heavy. The hot concept at BEA was the enhanced manuscript, which marries the traditional electronic book with Internet hyperlinks.

    Imagine that your child is struggling through a school text on the treaties of Westphalia (the end of the Thirty Years War in 1648). On encountering the word “Münster,” the child is invited to click through to a short film that shows the Papal legate arriving in the German city with his dog or to listen to simulated dialogue between Cardinal Mazarin and the German princes. Elsewhere, maps of Europe’s new nation-state configuration pop up on demand.

    Some of the most crowded stands were those of small and independent publishers. Is the traditional publishing business doomed? Many publishers would appear to be heading to the exits. Their business model is laden with costs (staff, paper, printing, distribution, and warehousing), and their profits are squeezed by Amazon and other online sources.

    The only reason to publish a book with a house like Simon & Schuster is because they have the access to sales and distribution markets. Anyone with a Mac and some patience can turn out an ebook and post it to Amazon. The big publishers may garner shelf space at Barnes and Noble, but big box stores themselves may be going the way of all flesh.

    My guess is that most reading in the future will be done online and electronically, and that readers who want a hard copy of the book will print one from something like the Espresso Book machines.

    The big retailers are likely to fade away, but small independent book shops, places like Margot Farris’s Pages in Manhattan Beach, California, will survive as local centers of literacy, gathering like-minded reading spirits that want something more than an e-file, even if it’s just wine and cheese.

    As a reader, what excited me at BEA? Very little, I confess. Despite wandering a convention center the size of the Astrodome full of books, I saw little that I wanted to read.

    For a long time, publishing has served up specialty books about self-improvement, wine, dogs, antiques, exercise, home repair, and the like. Books about things that interest me — that’s history, travel, essays, classical fiction, baseball, Theodore Dreiser, and the Russo-Japanese War of 1904-05 — seemed lost in the glitzy displays.

    I did pick up a biography of Montaigne, Frazier’s travels to Krasnoyarsk, and an invitation to visit Oman’s Department of Education, whose booth staff, next to the glitter of Harper Collins, looked like contestants on “Lost.”

    As for writers, I fear that printed words will remain an oversupplied commodity, abundant on all sorts of devices, pages, and sites that are notable for their inability to pay writers for their work, even if it is hyperlinked, profusely illustrated, gold embossed, or dedicated to the lives of the saints.

    As a book writer, I might wish it otherwise, and pine for the days when typeset words, printed on heavy stock paper, were all that were required to prod the reader’s illumination. To use the words of E.B. White, who wrote Charlotte’s Web, I write “to amuse myself and for children.” That’s not something iPads, Fergie, or L. Ron Hubbard can take away.

    Photo of Abrams Books’ giant typewriter display, Book Expo America, May, 2010 by gruntzooki: http://www.flickr.com/photos/doctorow/4639586151/

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, winner of Foreword’s bronze award for best travel essays at this year’s BEA. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives in Switzerland.

  • Currency Crisis: Fool’s Gold, The Euro, The Pound and The Dollar

    Lost in the obituaries of the Euro — the European currency — is the extent to which the continent remains a fractured reservoir of national monies. To be sure, the Euro circulates in the larger economies of Western Europe, notably France, Germany, Italy, Spain, and the Netherlands. But as a traveling European, I also have in my wallet Polish złoty, Czech crowns, Serbian dinars, Swiss francs, and British pounds, testaments to the nationalist sentiment that every country should have it own money. (Which is similar to the notion that every country should have its own airline, no matter how much it costs.)

    Countries, like Poland, which are in the European Union, have their currency pegged to the Euro, but because of local budget deficits, they stick with their old notes. Countries like Britain and Switzerland cling to their currencies out of distrust for the common currency. In theory, what they lose in terms of trading convenience, they gain in the coin of economic independence.

    By holding on to the pound, Britain partially sidestepped the recent financial crisis in Europe; London was only on the hook as a member of the common market, not in the currency union.

    At the same time, Britain, as the only issuer of pounds, was left to deal with its own banking crisis without the mutual assistance of Germany and France, one reason why the United Kingdom has such high borrowing obligations.

    Which is better, national money that floats on international markets — the pound is a good example — or a transnational currency like the Euro?

    The rap now against the Euro is that the European Union lacks the authority to impose fiscal discipline in member states. Countries within the Union, it is feared, can borrow to their budget deficit’s content, given that any country in the monetary union enjoys an implicit guarantee from the rest of the pact. For example, Greece could fund its deficit with debt that was issued at rates that equated Greek risk with that of Germany.

    Now that this mug’s game is up, the stronger members of the European Union will only let the weaker names borrow in exchange for surrendering a degree of fiscal and budgetary independence. Will that be enough to save the Euro?

    In answering, it is useful to recall what money is: a zero-coupon bond, issued by an organization, company, or government. Currency may represent value, but underneath the crisp paper it is a sovereign loan. The dollar bill is best understood as the world’s smallest government bond.

    Before there was fiat money, the currency that circulated was either coins or bank drafts, passed around to settle transactions in local markets. The stronger currencies were those of silver or gold, or negotiable instruments issued by a solid creditor, such as a Florentine bank or a London merchant.

    In the early days of the American republic, circulating specie included Peruvian coins (valued for their silver) and Spanish dubloons, sometimes mined in Mexico.

    Now, instead of a private script, money is a national instrument, based on the full faith and credit of sovereign governments, which, as everyone knows, are run by profligate spenders. (If you owned a bank, would you put Nancy Pelosi on the credit committee?)

    Anyone holding U.S. dollars is betting that the Congress will not bankrupt the country with medical, retirement, and national security schemes. In Europe, the Euro gamble is that the large governments, and by extension the European Union, will honor their obligations, many of which were drawn to fund retirement plans that kick in at age sixty-two or to subsidize corporate elephants like the Airbus.

    To be sure, the Euro will survive its current crisis, because neither France, Italy, nor Germany — the big engines of the continental economy — want to rerun the political consequences of a fractured Europe. But just because the Euro will remain in circulation does not mean that it will trade at an exchange rate of €1 = $1.50.

    Keep in mind that Europe is gleeful at the decline of the Euro against the U.S. dollar, which, measured in Europe, has been at an artificially low exchange rate for the last few years. The weak dollar and the strong Euro meant that U.S. industry and exporters had a competitive advantage against European companies. Now that advantage is less pronounced.

    For fun, have a look at the Big Mac Index of The Economist, which prices the global hamburger in world currencies. For the Euro zone, a Big Mac costs $4.62 versus $3.58 for the same happy meal in the United States. China’s triple-decker only costs $1.83, a statistic that is a good measure of the extent to which China keeps its currency, the yuan, artificially low.

    Exchange rates are the new tariffs. In the bad old days of Senator Smoot and Congressman Hawley — co-authors of the 1930 tariff bill that so prolonged the Depression — countries sought competitive trade advantages by slapping on tariffs and import quotas to protect national industries.

    Even today, tariffs protect local farmers and manufacturers from low-priced international competition, but they are considered “unfair,” the trade equivalent of gunboat diplomacy.

    Instead of enacting tariffs, governments now play the game of currency manipulation, and, to use a 1930s expression, “beggar their neighbors” by driving down the value of their money’s exchange rates in international markets. Central banks generally accomplish this by failing to defend, i.e., purchase their currency in world markets.

    Two of the very best currency manipulators are the U.S. and China, one reason for their economic success. The U.S. let the dollar fall after the 2008 crisis, which gave American exporters an advantage over European competitors. The price of European products in the U.S. went up about 25 percent.

    For years China has fueled its economic miracle by pegging the yuan at low exchange rates to the dollar, to make sure that, no matter what the industry, it would be selling the equivalent of Big Macs that cost $1.83.

    In the Euro collapse over the potential Greek default, many see an end to the European common currency. But that will happen only if German taxpayers get tired of bailing out pensioners throwing darts in Dublin or the café klatch on Mykonos.

    In the meantime, by letting its currency fall by twenty percent against the dollar, Europe has shown that it understands the power politics of international exchange rates and that it is willing to take on the Americans and the Chinese at the shell game of cheaper money.

    What’s the risk? The problem in the manipulation racket is that investors can have a hard time judging when a currency is being depreciated for a reason — to stimulate jobs, say — or when it’s broke. The wheelbarrow money of Weimar was bust while the Euro is just overvalued. In most cases, the vital sign of a currency’s health is its rate of inflation, and for the Euro right now it’s negligible.

    For all that diplomatists busy themselves over questions like Israeli settlements and Iranian sanctions, the issue of exchange-rate parity is rarely discussed in world councils.

    The story of unfettered money rarely has a happy ending. Breton Woods, which pegged many currencies to the dollar, and the greenback to gold, was signed in 1944 and broke down in 1971, when Richard Nixon unilaterally took the U.S. off the gold standard.

    Since then, world money has traded like over-the-counter options, even when it’s backed by less collateral than most subprime packages. My own view is that currencies should be pegged to baskets of global commodities, including gold and silver. But governments, like Greece today, or even the U.S., hate the idea of external limits on their ability to raise and spend money.

    Italy was among those countries that thought the 1971 U.S. withdrawal from the gold standard set a dangerous precedent for economic stability. But its warnings went unheeded, and prompted an undeleted response from President Nixon, who on the White House tapes was heard to say, “I don’t give a shit about the lira,” words that might express how many investors will come to think about paper money.

    Latent print developed on US Currency ($1 bill) using fluorescent magnetic power. http://www.flickr.com/photos/jackofspades/1376867166/

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

  • City Rankings: An Alternative View

    Why is Austin, Texas the inevitable winner or runner-up on every ranking of the most “livable” cities in the United States? The downtown is a wasteland, the hip barbecue joints are dismal, and the bookstores, despite the population’s admirable intellectual mix, are heavy with espresso westerns.

    If Austin were in Europe, its place in the power rankings would be just ahead Bratislava but behind Faro, which, in turn, would be way down the list of great European cities.

    Herewith is an idiosyncratic assessment of Europe’s most livable cities, based on my continental wanderings (I live in Switzerland). Confession: I haven’t, sadly, been recently to Paris, and I often judge a city by its rail service and bookstores. Put simply, I see cities as works of art, and wonder in which paintings I might like to live:

    Geneva: I love it because it’s home. But it’s not really a city. Swiss cities are villages that have gelled together, like drifting icebergs. Geneva works because it’s a civil society. The public schools impressed even Benjamin Franklin, and Calvin ended the practice of lawn mowing on Sundays.

    Berlin: It’s flat, so it is perfect for biking, has many open spaces, affordable housing (thanks to the worker flats left behind by the German Democratic Republic), history from every tragic era, superb public transportation, enough museums to fill up a month of Sundays, ethnic food, three airports, and a diverse economy. Downside: the North European climate is unspeakable.

    Moscow: It has, by far, the greatest metro in the world, with fast trains every minute, easy changes, and mosaics of the Great Patriotic War, not to mention Stationmaster Lenin. In winter, Moscow is an ice bowl. In summer it has bright nights, terrific walks, a wild west economy, quirky museums (one is devoted to border guards), and funky modern architecture. Caveat: the traffic is becoming Asian, housing is expensive, and only the quick and the dead can cross the wide boulevards, not to mention the mafia.

    Cambridge, England: The streets are uncrowded, the colleges world class, and the bookstores exhaustive. I get around by bike. London is now less than an hour by privatized rail, and the Fens, the nearby marshlands, are enchanting for walks. The only “new” roads are Roman.

    Barcelona: Easily Europe’s favorite summer city, if you don’t mind dinner after midnight. The tourist crowds are oppressive, and the sidewalks crowded. There’s a beach downtown, trade from Europe and Africa, and cultural links to Madrid and Paris.

    Prague: Go in April, and you will love it. Go in August, and you will flee the crowds in desperation. For a weekend the old town in Prague rivals Venice and St. Petersburg, although native son Franz Kafka caught the dark undertones.

    Rome: Classical history; quirky neighborhoods — I try to like Rome for these reasons. But I despair at its devious taxi drivers, dirty sidewalks, Basil Fawlty hotel clerks, and overpriced and often bad meals. Nor do I like the airports or the railroad stations. That said, I go often. It’s the price for wallowing in the shadows of Cicero and Hadrian.

    Bucharest: It’s the European leader in vacant lots. I love the Hotel Rembrandt, the outdoor ethnographic museum, the Romanian railways, with their sleepers to Transylvania and Iasi, and I love the sense that the city is starting over after communism. The history museum could have more exhibits about the Russo-Turkish war of 1877-78, but I can’t ask for everything.

    Edinburgh: It has a great station hotel, a castle, the moors and highlands nearby, the aura of golf, many great companies, historic if insolvent banks, Harry Potter, single malt Scotch, Robert Louis Stevenson, and a new parliament building. I should like it more than I do. When it’s rainy, windy, and cold, which is often, it feels like the end of the earth.

    Dublin: I hated the banks and their balance sheets, the pubs and the spilled booze sticking to the sidewalks, and the forlorn neighborhoods, Ulysses notwithstanding; and I hated my hotel, which reeked of cigarette smoke and felt like a hangover.

    Athens: For $10 billion of Olympics money, all Athens gained was a tram. Don’t harbor any allusions that it works as a city. Like the economy, the train station is a dead end. Further, the small hotels are crummy, the tourist food inedible, and the traffic a nightmare. Business meetings all take place at midnight, in a haze of smoke. But to gaze at the illuminated Parthenon, even from a gridlocked taxi, is to look up at heaven.

    Istanbul: Economically it faces north-south and east-west, and it’s the only city both in Europe and Asia. The traffic is stifling, the touts are everywhere, the population is on a Los Angeles scale — but it’s hard to beat for its visual and historical sweep. The ferry views rival those of Hong Kong, and the climate is close to ideal, with cool nights and warm days. It has trains to Berlin and Tehran, a nonstop parade of ships on the Bosphorus, and the sultan’s harem (to accommodate his speed dating habits).

    Amsterdam: I try and try with Amsterdam, but am close to writing it off. I guess it would help if I were interested in recreational drugs, Heineken beer, red light districts, or the art of Van Gogh. I do love canals, the Anne Frank house, anything to do with bicycles, and Dutch landscape paintings. But what a terrible climate, and, to paraphrase Spiro Agnew, if you have seen one cobblestone street, you have seen them all.

    London: What’s not to love about the Globe Theatre, the bookstores, the Underground, the Imperial War Museum, the double-decker buses, the walks along the Thames, the pubs in Chiswick, business lunches in the City, or the morning phalanx of newspapers?

    What’s my ideal European city? It would look something like Venice, but have the Moscow metro and lots of sidewalks and bike lanes. The climate would be that of Rome. The city population, like that of Geneva, would not exceed 500,000, and the last stop on the metro, as in Munich, would be a lake with terraced cafes and little beaches. To get to work, everyone would bike, walk, or ride the underground. Electric cars and buses would transport the elderly. The ferries would run all night, as in Istanbul, and serve fresh orange juice and tea on deck.

    The business day would end at 2:00 PM when, as in Barcelona, many would take lunch overlooking the sea. There would be several grand railroad stations, operated by the Swiss, and affordable overnight rail connections to London, Berlin, Florence, and Madrid. At night, there would be concerts in the parks, as in Vienna in summer, or book lectures, as in Oxford.

    Tourists would take breakfast on small balconies. Coffee and wifi would be free. The local industries would be several universities, a teaching hospital, book publishing, glass blowing, cartography, high-tech, ship building, and railways. Night ferries would connect the city to the Greek islands. The library would be open all hours, and many cafes and bookstores (all open late) would have well-fed cats.

    Photo by Suzanne Bouron: Pause Café, 100% Aribica

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, and editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine.
    He lives in Switzerland, commutes on a bike, dreams about night trains, and loves long weekends in places like Chisinau, which did not make this list.

  • Guns, Guts, And Geithner

    Calls for more bank regulators remind me of a regulatory go-round with an erratic European bank chairman to whom I once reported. Almost eighty years old, with a failing memory and a fondness for mid-day Martinis, he once interrupted a luncheon to call his wife and ask that she send his revolver over to the bank.

    At one time in his life he might have had a license to carry a firearm, but the permit had long expired. He wanted the great equalizer on this particular afternoon because the television was full of possible terror threats against financial interests, and he figured, after his second highball, that outside agitators might rush the corporate dining room.

    The meal continued, and in due course his chauffeur arrived carrying a white plastic bag, which looked like it was packing lunch more than heat. The chairman removed the pistol, checked it for ammunition, and tucked it into the waistband of his Savile Row suit, as if he had made a loan against a Maltese Falcon.

    News of the lock-and-load chairman circulated around the bank, and eventually reached the ears of the board of directors and the regulators, who, as part of their mandate, had to insure the fitness of the chairman to serve in his capacity. I was present when the regulators were informed that the bank had a chairman who was eighty years old, had no memory, and was loaded not just with booze but for bear.

    Regulators are being celebrated everywhere today as the champions of free markets and fair competition. You might think that they had earned a track record in this regard and — for example, in this instance — would have questioned the chairman’s ability to remain in office.

    Instead, even after they heard about his piece and judged his inability to understand the business of the bank, the regulators did nothing to change the composition of the board. They took the position that there was nothing that they could do, and left him on the job for another few years, during which time the gun would come and go in his briefcase, and occasionally fall on to the conference room table when he was searching for a document. It brought new meaning to the corporate phrase, “Let’s stick to our guns.”

    Does my experience necessarily mean that all banking regulators, notably those charged with implementing financial reform, will be slow on the draw when it comes to cleaning up Dodge City’s balance sheets?

    In general, regulators tend to be recent college graduates who are padding their resumes until going to business or law school, or they are career bureaucrats, immersed in one or two minor regulatory issues. Most miss the big picture, as nearly every regulator did in reviewing the balance sheets of A.I.G., Merrill Lynch, or Washington Mutual. For better or for worse, financial profits — to regulators challenged to understand the strike prices of futures contracts — look like magic.

    The problem with entrusting them with the health of the financial system is that few, at least in my experience, understand anything about how banks, brokerage businesses, and hedge funds operate or how they make money.

    As the ideal regulator, look no further than Treasury Secretary Timothy Geithner, who now is pushing financial reform as hard as he once peddled deregulation and “market solutions” for most banking problems.

    Geithner owes his financial expertise to political expedience, first to that of Henry Kissinger and his associates, and later to presidents Clinton and Obama, all of whom take the view — to use the phrase of historian Richard Hofstadter — that they came to office to defend property as opposed to democracy.

    Had Geithner been a claims adjuster in the arson division of Geico, he might have been less inclined to believe that Wall Street was doing “God’s work.”

    Think, too, of the iconography of Goldman Sachs, which within the last three years has gone from the “culture of success” to America’s most wanted. In between, depending on the country’s mood, it was either the stock pond for Treasury secretaries or in need of a bailout. All the while, the regulators no more understood Goldman’s businesses than did their counter-parties, who were loading up on subprime while the partners went short.

    Despite the high moral tone of Senator Dodd’s proposals to fit bankers with bespoke hair shirts, the challenge of the proposed new financial regulations is how Congress can dress up yet more loopholes and shop them as reforms.

    What Congress will pass is lofty legislation that promises to unleash “consumer watchdogs,” with Volker Rules against proprietary trading and denunciations of derivatives, and it will extend the amount of time that homeowners can live in a house on which the mortgage is in default. Even better, members of Congress will finally have a good safe menace, Wall Street greed and ruin, to run against in November 2010.

    In exchange for the effigy, many of the proposals could have been written by bank lawyers, as these “reforms” subsidize, rather than challenge, bank earnings. Banks love nothing more than a guarantor of bad loans. My feeling is that, whatever the particulars of the federal financial reform package, it will use government dollars to bailout underwater consumers and feed banking bottom lines, much the way health care reform could well have been called the Insurance Industry Full Employment Act of 2010.

    Rather than buy into the prowess of regulators, time and effort should be spent in setting guidelines that will allow the market to ensure the health of good financial institutions or the failure of bad ones. The effect of most regulations, however, is to prop up speculation, if not bad banks, in the interest of preserving “the system” (which sounds a lot like Michael Corleone’s “family”).

    For example, if the financial reform bill did nothing more than require that all banks and bank-like companies maintain 20 percent of their risk assets in capital that is liquid and available within seventy-two hours, it might constrain economic growth. But few banks would fail. Nor would be they be in a position to pay out fat bonuses, as most would have returns on equity like those of hardware stores.

    What wiped out many banks in the recent financial crisis was inadequate capital and mismatched balance sheets. At its risk peak, Lehman had assets thirty-one times its capital, so even a small down move in markets made it insolvent. Even now, Goldman’s balance sheet is more that of a pyramid scheme than a bank.

    A second proposal might mandate the close matching of all financial assets and liabilities, so that future Lehmans could not fund mortgage-backed securities (with the tenors of underlying loans extending to thirty years) using ninety-day commercial paper. Mortgages are fine if they have a cushion of capital and are match funded.

    To protect credit card consumers, cap the interest charged on credit cards to five percent more than three-month interbank borrowing rates, and require that once every two years consumers “clean up” their outstanding balances. The mall will be less crowded, but the banks will not swell with bloated profits.

    The limits of bank regulators could be seen even in fifteenth century Florence, where a financial reformer asked Cosimo the Elder to help stop gambling in the clergy. In response, the head of the Medici clan said: “Maybe first we should stop them from using loaded dice.”

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, and editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine.

  • March Madness: Good Sports In The White House?

    Given the news spin cycle, is it any wonder that the presidency has been reduced to a talk show, or that March Madness has better ratings than the wars in the Middle East? But American presidents might think about adopting a SportsCenter model — snappy replays, contrite Tigers — and drop Rush Limbaugh and James Carville as their founding fathers. The continental divide in American history isn’t that between Democrats and Republicans, or conservatives and liberals, but whether or not the president should be a good sport.

    I realize that embracing a president by his or her ability to play sports, or least talk about them, would saddle the country with leaders like Derek Jeter, Scottie Pippin, or Peyton Manning. But my take on the run of political leaders since Teddy Roosevelt cluttered up the White House with big game trophies is that modern presidents have had a complicated relationship with the national pastimes. Maybe it was the German strategist Clausewitz who said that sports is the extension of politics by other means?

    To be sure, presidents up to and including Barack Obama have played sports, and many have played their games well. I have no doubt that Bill Clinton shoots a reasonable, if erratic game of golf, or that former Yale baseball player George Herbert Walker Bush throws competitive horseshoes. But how many presidents would you have wanted in your fantasy league, and how many (think Richard Nixon) picked up the clubs only when a few photographers were in the rough?

    To see if there is a correlation between good presidents and good sportsmen, let’s sort out the players from the duffers. Those who could play the games: Teddy Roosevelt (rod and gun), Franklin Roosevelt (excellent at golf before polio, and sailing afterwards), Jack Kennedy (golf, girls, and touch football, although not in that order), Gerald Ford (football in college, tennis in the White House, the Pro-Am circuit in retirement), and the George Bushes (speed golf, cigarette boats).

    On the bench, so to speak, place: William Howard Taft (of sumo proportions), Woodrow Wilson (hard to imagine him playing much pond hockey, although he did ride horses), Warren Harding (are cards considered a sport?), Calvin Coolidge (“harrumph”), Herbert Hoover (a fan of the medicine ball), Harry Truman (although he was brisk walker), Lyndon Johnson (beagle handling does not count), Richard Nixon (despite the bowling poster in “The Big Lebowski”and installing lanes in the White House), Ronald Reagan (lifeguarding, horseback riding, the original Brush Clearer), and Jimmy Carter (knocked silly by a killer rabbit).

    I have my doubts about Dwight Eisenhower, who played 800 rounds of golf as president but still only had an 18 handicap, and Barack Obama, who despite his pick-up basketball and vacation golf has the shadow of a 37 (in bowling) hanging over his presidency. (Kids without barriers usually score better than 37. If the Birthers want proof of alien associations, they should look into this.)

    Sports and politics came together harmoniously with Franklin Roosevelt, who could never walk after his 1921 bout with polio. When he ran for the presidency in 1932, however, he began his campaign with a long sailing trip in the waters off New England, and the image of Roosevelt at the helm quelled whatever fears there might have been about his incapacity. Roosevelt was, in fact, an excellent sailor.

    Likewise, Jack Kennedy used sports to cover up a chronically bad back, Addison’s Disease, and a host of other ailments that had him under constant medical care. Instead of a bed-ridden presidential candidate, the public saw a “vigorous” man playing touch football on the lawn at Hyannis Port or heading out in a sailboat. In retrospect, the images of a robust president were as manufactured as those of Family Man Kennedy.

    The ability to talk about sports might add more to presidential success than the ability to play the games. Sports talk is one of the few common languages for much of the United States. Without any ability to speak it, a candidate on the campaign trail would find himself with a lot awkward pauses in the company of local politicos.

    The former radio sportscaster Ronald “Dutch” Reagan could obviously talk a good game. For much of his broadcasting career, all he had were the wire service reports of the action, and he would have to conjure the play-by-play, much as he later was attracted to invented economic theories (the Laffer Curve) or history (“I did not trade arms for hostages”). Few had the Gipper’s gift of small talk, and a lot of it revolved around sports.

    By this logic, President Obama ought to be one of the more successful American presidents. He occasionally joins the broadcast at half-time in key college basketball games, he picked the NCAA champion in his 2009 bracket, and he seems to enjoy golf. Why, then, are his approval ratings on a par with presidents who never hit a three-pointer?

    Part of the explanation can be gleaned in one of the many health care posts I have read recently. The correspondent was despairing of the President’s ability to convince the American people that health care reform was actually good for them, which prompted a digression into Obama’s wounded-duck throw with last year’s All-Star ceremonial pitch (apparently George W. Bush threw high heat) and, of course, the 37. Meaning: he’s losing the sports-bar, call-in radio constituency, which, when it comes to medicine, is only interested in steroids.

    By my logic, Bill Clinton got impeached not for groping an intern but for boasting he had broken 80 in a golf game. (In the words of Jack Nicklaus: “Eighty with fifty floating mulligans.”) Nor did Gerald Ford’s presidency ever recover from his erratic tee shots. Doubts surfaced about W not so much over Iraq as when it was reported that he had watched the Super Bowl by himself.

    The hope for the Obama presidency is that it will return to his sporting roots. On the campaign trail, he watched a lot of ESPN, and he is a long-time White Sox fan, perhaps even from the days of their Disco Demolition Night. After all, the athletically-challenged Nixon won four national elections on the strength of owning his own bowling ball (but was he a “sandbagger”?) and calling in a few plays to the Washington Redskins coach, George Allen (which, by the way, never worked.) Clearly, Obama has affection for his basketball, and my guess is that he spends more time than a president should thinking about the NBA draft. All are hopeful signs for his time in office.

    Matthew Stevenson is the editor, along with Michael Martin, of The Rules of the Game: The Best Sports Writing from Harper’s Magazine, published by Franklin Square Press, and the recently published Remembering the Twentieth Century Limited. He lives in Europe.

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  • Newspapers: The Search for A Killer Saviour

    The publishers and staffs of many daily newspapers would love to think of themselves as hip bloggers, tweeting to an eager and mobile public. But the reality is that newspapering came of age with railroads and steel mills, and the balance sheets of many companies are heavy with long-term debt, inflated valuations, unfunded pension liabilities, and the usual write-downs of smokestack America.

    It does not take a degree from Harvard Business School or a partnership at McKinsey to explain why newspapers and many magazines are struggling: readers don’t want to pay for anything, and advertisers, as was said of Chicago Bears owner George Hallas, “throw nickels around like manhole covers.”

    Newspaper companies cling to the illusion that Amazon’s Kindle reader or perhaps the Apple iPad will give the industry a killer technology that will allow readers to surf for news and the companies to collect money for providing it. But even charging four dollars a month to deliver an electronic file to subscribers probably does not cover the pension, salary, and real estate costs that are associated with old media. (The new headquarters of the New York Times has a birch forest in the lobby.)

    Which brings us to one of the more absurd suggestions of the recent stimulus debate: the consideration that newspapers might themselves be in line for some bailout money, in the interests of maintaining a free press and a vibrant democracy. Maybe taxpayers could check a box indicating whether they want to save the Detroit Free Press, the city of Detroit, or just General Motors?

    Everyone has their own theories on why newspapers are failing — internet pricing models, to postage rates, and the cost of paper — but mine center on the written content. Many daily papers have read for years like a variation on a collection of press releases.

    Too often, articles are self-serving political messages out of Washington, or based on anonymous and biased sources. For readers, there’s no recourse in the cases where the paper has got things wrong. Is it any wonder that they’ve migrated to vibrant, interactive Web sites?

    For models of editorial salvation, newspapers should look to the formulas that allowed them to prosper in the first place, and serve as showcases for lively local coverage and debates, with writing that comes from correspondents in the true sense of the word: letter writers.

    Many newspapers confine their opinion sections to two pages, and then fill up the rest of the paper with stale news which today’s readers know by the time they stumble to the front porch. Add to that the celebrity-driven features (“Dateline Bradgelina” or “Tiger Hunting”).

    Most newspaper readers of my acquaintance have reversed their reading habits, and now start with the opinion columns and the letters-to-the-editor, and then glance over the news headlines. Why not fill a newspaper with what the readers look for and enjoy? Would it not be a pleasure to read twenty columnists, not simply three or four?

    Needless to say, newspapers are run for their shareholders, and investors take more pleasure in full-page ads than in lively or argumentative columns. But in my mind, a newspapers run and financed by the readers, and not by corporate hierarchs, could succeed financially. If you are looking for a working model, think of a privately-funded university or even a mutual savings bank (one owned by its depositors).

    Under these models, a newspaper would have revenue (more like tuition) from subscribers, its own capital (assuming any is left), advertising (but it would not be the lifeblood, as is the case now), and contributions (fund raising campaigns).

    With whatever money is available annually to the editors, they would produce a newspaper that most closely matches the charter of the association or trust. It could report on local news, support Democrats or Republicans, devote itself to sports or foreign reporting, or cover the arts or fashion. That would be for the reader-members to decide.

    In the current market, readers own few newspapers. Since 1936 a trust has owned the Guardian (London), which may explain its consistent editorial independence and the high quality of its writing. That said, the Guardian loses money annually, and the trust needs third-party assets to make up the losses.

    Similarly, the ownership structure of The Economist, via several classes of its shares, insures that the magazine (technically it calls itself a newspaper) reports to a board of trustees, rather than to its shareholders, to insure editorial independence. In 2009, when the rest of the industry was looking for a handout, The Economist increased its worldwide circulation (by 6.4 %) to 1.4 million, its revenue (by 17 %), and its profits (by 26 %, to £56 million).

    Nor could anyone accuse The Economist editors of dumbing down the product, given the publication’s relentless coverage of foreign affairs, finance, business, and economics. By comparison, the New York Post reportedly loses about $50 million a year for Rupert Murdoch. So much for pandering.

    The problem for many large American newspapers—such as the New York Times—is that, while operating profits shrink, they are hoping to whistle past all sorts of electronic graveyards. In the last decade, for example, the Times squandered more than $2 billion to buyback its own overpriced shares rather than pay down debt or find a model that would sustain the paper in the age of what George W. Bush called “the Internets.”

    Now it faces falling advertising, dropping circulation, higher paper and delivery costs, unfunded pension liabilities, and convertible debt and warrants due to a Mexican oligarch. Meanwhile, its competition is the ethereal and cost-free World Wide Web.

    Regarding so called “pay walls” — the idea of charging Internet readers, lately embraced by the Times — columnist Michael Kinsley has written: “Every English-language paper published anywhere in the world is now in competition with every other. Competition is what has driven the price down to zero and kept it there.”

    The same points are made in “The Curse of the Mogul” by Jonathan A. Knee, Bruce C. Greenwald, and Ava Seave, authors affiliated with Columbia University who make the point that “the Internet may be somebody’s friend — most notably, the consumers of media — but it is not the friend of incumbent media companies.” They believe that only those print franchises with a locally dominate position will make it, writing “…if print newspapers are to survive, it will be through single-minded focus on the only area of coverage in which they have an advantage.”

    Their thesis on “what’s wrong with the world’s leading media companies” is that the dealmakers behind many companies made a string of terrible acquisitions that have wiped away $200 billion in shareholder value. (The Times contributed $1 billion to this figure, when it had to write down its investment in the Boston Globe.)

    Will I miss the morning newspaper as we knew it? Not very much, I confess. I grew up in a world of monopoly-voice journalism, where getting a letter to the editor of the New York Times printed was not unlike receiving a papal indulgence.

    As for regional or small town papers that only publish hints from Heloise or boosterism for local teams: have you ever spent a Saturday morning with the Bangor Daily News or the Kansas City Star? It strikes me that many American newspapers bailed out years ago.

    Does anyone out there have a formula that will save the traditional daily? I didn’t think so. If you did, instead of reading this online, you would be in a closed-door conference with the publisher of the New York Times or the Baltimore Sun, explaining how web-site hits or those Pulitzer Prizes from 1987 can be transmuted into gold.

    Matthew Stevenson is author of the recently published Remembering the Twentieth Century Limited. He lives in Europe.

  • Olympic Games: Greece’s Gold Medal For Debt

    Although I cannot imagine that it will have much appeal in the ratings beyond C-Span 2, a terrific new reality program, Euro Bomb, could be produced around the survival of the Greek economy.

    The founder of both the ancient and modern Olympic games is in the midst of a debt crisis that threatens not just to send a few bondholders off the island, but has the potential to blow up the European Union’s currency zone.

    The first indication of a problem with Greeks bearing debts was when the yield on the country’s sovereign debt soared past seven percent; in Germany, similar paper pays only three percent, although, in theory, both countries are members in good standing of the Euro zone, and thus have an implicit guarantee from the community.

    Greece joined the European Union in 1981, embraced the Euro in 2002, and staged the summer Olympics in 2004, steps that were intended to lead the country out of its Balkan past. Alas the only Greek medal was for the cost overrun, leaving Athens with garlands of high-priced debts.

    Then it turned out that the Greek government had cooked the books that report the country’s budget deficit. It was actually 13 percent of Gross Domestic Product (GDP), as opposed to the 3 percent that Athens had been reporting to Brussels. As late as 2009, Greek Prime Minister George Papandreou was assuring voters (some of whom were in the streets) that there was no need for austerity programs or budget cutbacks.

    Issuing phony financial statements has been a Greek sport of Olympian dimension since the time of Socrates. But the consequence of the latest illusion has been that the European Union is now confronted with the invoice for its continuing unity.

    For Greece, the choices are stark, but clear. It can default on its debts and get bounced from the European Union; it can cut public expenditures and watch the streets fill up with unemployed public sector workers; or it can throw itself on the mercy of the European Union or the International Monetary Fund (IMF), which would put in place a stabilization fund to keep the country afloat.

    The hard decisions are for the European Union, which, if it bails out Greece, could be forced to do the same, at a later date, for Portugal, Spain, Italy, Ireland, and possibly the United Kingdom, all of which took to borrowing as if it were pitchers of sangria.

    To be sure, the European Union could deliver Greece to the IMF, the vulture that normally descends on the roadkill of bankrupt countries. In recent years, the IMF has picked through the ruins of Argentina, Turkey, South Korea, and Mexico, and then returned them to the investment community, minus a few state assets and plus a lot of unhappy voters.

    But what does it say about the financial stability of the European Union — remember all the press releases about the United States of Europe and its standing as a global economic zone? — if Brussels cannot clean up the Greek mess, which only represents two percent of the European economy.

    Further, in weighing options for Greece, there is the specter of the political rivalry between the French president, Nicholas Sarkozy, and the IMF President, Dominique Strauss-Kahn, who is thinking of running for the French presidency in 2012 as the Socialist candidate.

    President Sarkozy has an Olympian-sized ego, and the last thing he wants is to run against someone who could claim that he, not Sarko, had saved the European Union.

    Without the full faith and credit of the international financial community, the European Union (read the taxpayers of Germany) might not want to bail out the Greeks, who are perceived as lounging at the beach on the dole while the bail-posters trudge off to a factory in Dortmund.

    Plus, the numbers in the great Greek unraveling are substantial: $20 billion is needed by April. National debt is approaching 100 percent of GDP ($380 billion), while the country has a budget, trade, and current account deficit, and a contracting economy. And these numbers are nothing when compared with the debts in Portugal, Spain, and Italy.

    The central weakness of the Euro zone is that it has a common currency and a European Central Bank, but none of the political control that normally comes with monetary responsibility.

    Decisions on the issuance of debt, on budget deficits, and public spending are made in each EU country, not Brussels, which thus finds itself as a lender of last resort in an economic zone over which it has only moral suasion (and very little cash).

    Normally when a country tanks, its currency depreciates, which stimulates exports and promotes recovery. (This explains some of the American recovery.) But Greece is tied to the Euro, which remains overvalued in relation to the dollar, so things like tourism and exports are expensive.

    For the moment, the United States feels itself to be above the Greek crisis. Even the dollar has rallied in the wake of Greek illiquidity. But writing in the Financial Times, the historian Niall Ferguson makes the point that “a Greek crisis is coming to America.”

    His argument is that the projected budget deficits and international borrowings of the Obama administration give the United States Greek-like financial qualities, such as debt equal to GDP, and that it is only a matter of time before vulture capitalists come to roost in Washington, concluding, “Yet even a casual look at the fiscal position of the federal government (not to mention the states) makes a nonsense of the phrase ‘safe haven.’ US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941.”

    While waiting for an international rescue, the Greek government can rail against hedge-fund speculators (who went short the country), international banks (who sold them all this expensive, junk-grade paper), and world capitalism (which is treating Greece as if it were the beach house of the Lehman brothers).

    Or, in the spirit of reality television, it can invoke the economic philosophy of Alexis Zorba, aka Zorba the Greek, whose idea of a bailout package involved a lot of grilled lamb and ouzo. “No more fooling around, not in this place,” he said. “We’ll pull our pants up and make a pile of money.”

    Matthew Stevenson is author of the recently published Remembering the Twentieth Century Limited. He lives in Europe.