Obama After 100 Days

After the American Century

The idea that one should evaluate a president after the first hundred days in office is not particularly old. It began with the Franklin Roosevelt Administration, in 1933, when the United States had been in an economic depression for almost four years. The Democrats had won a landslide victory, with majorities so large in both House and Senate that the Republicans were unable to be an effective opposition. In this situation, Roosevelt was able to push through a wide array of legislation in his first 100 days. This precedent is virtually impossible for any subsequent president to live up to, because no otter president since that time has both entered office when the nation was gripped by such a severe sense of crisis and also had the large majorities in the legislative branch that FDR had.

No one until now, one might say, but that would be inaccurate. Imagine that the meltdown in the Bush economy had begun in 2005 instead of 2008, and further imagine that the Republicans had been unable to do anything to overcome the Depression in those three years. Then the situation would be more similar. Even more to the point, President Obama has not had the 60 senators he needs to push through any legislation he desires, at least not yet. However, with the seating of Minnesota's Senator Franken imminent and with the defection of Senator Specter from Pennsylvania, it appears that during Obama's second hundred days he may have the unassailable majority that FDR had in 1933. In the second hundred days, not the first, major legislation, for example on health care, will first be possible.

As for the first 100 days, a great deal has been accomplished. President Obama has dramatically improved relations with Latin America by showing more openness to Cuba and by promising to close the Guantanamo prison. Recall that a bipartisan group of former Secretaries of State called for that closure last year. This is good policy, and puts the United States back where in should be, as an opponent of torture and a champion of legal due process and human rights. These actions and his successful trip to Europe have cemented in world opinion the understanding that the United States has taken a fundamentally new direction.

Domestically, the Obama Administration has shown that it can address many crises at once, as it has coped with the meltdown of the banks, the private mortgage crisis, the collapse of General Motors and Chrysler, and now the flu epidemic, while still pursuing its primary goals, notably that of achieving energy independence. In dealing with these and many other problems, President Obama has evinced excellent qualities in a leader. (1) The ability to reach decisions quickly. (2) The ability to explain his policies in clear language to the public. (3) The grace to admit when he has made a mistake and move to rectify it quickly. (4) Calmness in the face of multiple adversities. (5) An emphasis on dialogue. The character he has shown bodes well for his ability to guide the US through what still looks to be a difficult future.

Why No Quarantine for Travelers from Countries with Swin Flu Outbreaks?

After the American Century

This semester I have been teaching a course on disasters and culture. Eerily, each time we took up a new kind of disaster as a topic, the news media reported on just such a catastrophe. We read about earthquakes and shortly afterwards several Italian towns were rocked to their foundations. We examined fires, and immediately a large area in Australia broke into flames. We took up floods, and in Fargo and vicinity the Red River rose to the highest levels ever recorded. So I had some trepidation as we took up the subject of epidemics, a case study based on a documentary film about the 1918 flu epidemic. And sure enough, shortly afterwards, the swine flu burst out in Mexico. Before going further, I want to reassure readers that we have completed the assigned readings now, so even if the course was somehow provoking disasters, that should be over now.

As the swine flu outbreak heads towards what seems certainly to be pandemic status, I keep thinking about the familiar notion that all human beings are potentially no more than six degrees of separation away from one another. I realize that being able to reach just about anyone with no more than five or six intermediaries, using telephones, emails, and other communication systems, is not at all the same thing has the movement of a disease through direct human contact. The flu virus enters someone's body about a week before he or she knows it, during which time the illness spreads to strangers, friends, and family. The epidemic spreads rapidly because during the early stages the illness has not yet manifested itself. During this period, when the flu is only latent, an infected person can unintentionally give the flu to countless other people, especially if they travel during that time. And all of these newly infected people are just six degrees of separation from me, or you.

I am not a mathematician, but it seems obvious that as the disease spreads, its separation from me diminishes not as a straight line, but geometrically, and my increasing proximity to being exposed to someone with it would be graphed as a sharply curving line. In short, avoiding exposure is not going to be easy. So far, at least, no one taking my course has come down with swine flu. But then, it has not yet officially reached Denmark, though it has been diagnosed in a German patient in Hamburg and one man suspected of having the illness is being held for observation in Copenhagen.

The disease seems to be moving very fast, and it seems that health authorities are only able to react to help those who are sick, not retard the swine flu's progress. Curiously, back in 1918, an illness moved more slowly, because almost no one then flew. And yet in 1918 it was common to hold travelers in special quarantine facilities if they were merely suspected of carrying a deadly illness. Ninety years ago, it was likely an illness would manifest itself before a ship passenger crossed either the Atlantic or the Pacific. Don't we need to establish quarantine facilities near all airports? If a planeload of people arrives from Mexico, where the swine flu began, does it make sense to let them disperse into the general population? Or does it make sense to hold them all for observation, regardless of whether they seem ill or not? That would be expensive, you say. Well, how much is a human life worth?

Real Test of Obama Begins Now

After the American Century

President Obama has now been in office for three months or so, and his first hundred days will be over soon. While he clearly has had some successes and remains far more popular with the voters than George W. Bush was last year, this is still a period of transition. The massive deficit spending is only beginning to have an effect on the economy, which has continued to weaken overall, measured in terms of rising unemployment, the drop in housing starts, and declining real estate prices. GM and Chrysler remain on the brink of collapse, and banks are still struggling. These are not problems the Democrats created, but the weak economy does distract from attempts at larger reforms. Obama knows this and has kept calling for an overhaul of health care, energy policy, pollution control, education, and defense procurement. In all of these crucial areas, the new administration has not yet achieved very much, precisely because of the financial mess that had to be cleaned up first.

The question now is whether his own party will keep itself disciplined and rise to the occasion. In 1933 FDR's Democratic Party made fundamental changes. We have not seen a 100 days to match his achievements. Arguably, the crisis is not (yet?) as dire, but it is serious and the Democrats need to stick together. Obama has been abroad more than any other president at this point in his administration, and he has shown once again that he is exceedingly popular overseas, whether Germany, the UK, the Czech Republic, France, Turkey or Mexico. This is a good thing, but it may not translate into legislative achievement at home. Arguably, he should stay in Washington most of the time for a good while, and let Secretary of State Clinton do the globe trotting for a while. The real test of whether Obama can deliver his program has begun.

Is the Mortgage Crisis Being Solved?

After the American Century

According to the Financial Times, in the United States more than one out of every nine homeowners (11.9%) is in trouble with mortgage payments. This is the personal side of the larger banking crisis. If these millions of homeowners go down, the rest of the economy goes with them.

For those who are confused about the Obama plan to refinance American banks, there is an excellent short article in the New York Times by a Nobel Prize winning economist to explain things. In it, Joseph Stiegltiz argues that what the Obama team is doing is (Step one) to separate profitable assets from unprofitable ones and then (Step two) agreeing to protect investors from losses on those that are unprofitable. This might sound good, but in practice it will mean that US taxpayers will definitely lose while the bankers who over-leveraged their investments will be protected. For more details, see his article.

Stieglitz argues that nationalization of the banks would be cheaper and preferable. I think he is right. The Obama solution seems to be a case where American laissez-faire ideology has gotten in the way of common sense. In order to protect the "free market" this rescue plan makes sure that there is no free market, for if there were one, then many banks would collapse or be taken over by the FDIC, which insures the ordinary citizens' deposits.

I am missing something? What is so wrong with letting the free market decide which banks live or die, with the government taking over those that die, running them for a little while, and then selling them as soon as possible? This is what the government has been doing for years, after all.

For millions of Americans the problem is quite personal. In February, there were 290,631 legal foreclosures, an increase over January. Assuming an average family size of a bit less than 4, that means one million people lost their homes. About 300,000 of these people are in California. The hardest hit state appears to be Nevada, where one out of every seven houses has been foreclosed in just one month!

Yet often the problem is worse, because sometimes the bank refuses to foreclose on people who cannot afford to pay. In other words, they are abandoning foreclosures. Such banks have begun foreclosure proceedings, meaning that people are told to move out, only for the bank to discover that the legal costs are so great that the value of the building does not warrant the effort. So, the owners, having been evicted, suddenly find that they still own the empty property even though they cannot afford it. Often this news comes in the form of a letter demanding real estate taxes. It gets worse. Empty, low value (often inner-city) properties are often vandalized, and become uninhabitable. This drives down the value of adjacent properties and hurts the already weak market.

Banks that initiate foreclosure and then do not follow through leave property in limbo and people on the street. Do such banks deserve to live? Are they not community destroyers who act irresponsibly?

In other words, the situation is even worse than the statistics suggest. In the end, who cares about the banks? The homeowners should be the government's absolute top priority.

Danish Awareness of "Earth Hour" Dim

After the American Century

Across the world, in 88 countries, cities turned out their lights last night for one hour, starting at 20:30 local time. The Houses of Parliament and Big Ben, dark. The Eiffel Tower? Noir. The Chinese Olympic stadium, Sydney's harbor bridge and opera house, Atlanta's Coca Cola Building, dark. Toronto reduced its total electricity consumption by 15% during "Earth Hour," more than twice as much as last year. It may have been the biggest global demonstration in history.

In most of the participating 2800 cities and towns, the local newspapers and politicians were actively promoting Earth Hour. However, I looked in vain for anything about Earth Hour II in two Danish newspapers this morning. Last night, the City of Odense turned out its streetlights at 20:30, as we did at our house. Yet, as I walked around our neighborhood, few others seemed to have done so. Using the simple test of looking for lighted candles showing in windows, it appeared that most people had lots of light bulbs on, and that perhaps one in ten actively supported "Earth Hour." I hope I am estimating incorrectly, but in the last week I have not sensed any awareness of this event. Not a single student, colleague, or neighbor has mentioned Earth Hour to me, or showed any interest in it when I mentioned it. Not one journalist has called or written an email asking for my view of Earth Hour, from the viewpoint of an energy historian.

This morning, the local newspaper (Fyens Stiftstidende) has not written a single word about "Earth Hour" that I can find. The front page features a photograph of two girls eating ice cream. The three stories on page one are about increasing service charges on house loans, Conservative tactics for the next (hypothetical) election, and an extremely important piece on the development of a cardboard, biodegradable "Paradise coffin" for pets, available in five sizes. On the plus side, the same newspaper has five pages about energy-saving forms of electric lighting in its second section, without, however, mentioning Earth Hour anywhere that I can see.

Apparently, for all-too-many Danes, global warming is only an issue of concern for thousands of cities in other parts of the world. Judging by this event, you would never know that Denmark is hosting a major climate conference that will seek a replacement for the Kyoto Accords. Political parties paid lip service to the event, but except for a single concert in Copenhagen, the event was a non-event in Denmark. For 2009, the clear message from Denmark seems to be that hardly anyone cares very much about Earth Hour or about forging a world consensus to reduce global warming. To anyone familiar with the current government, this should come as no surprise. Maybe next year they will use their wall switches to vote for change, to proclaim the solidarity with others, and to send their politicians a message.

Why You Should Turn Off the Lights Tonight

After the American Century


Turn off the lights for one hour, tonight. Why?

(1) Because this is a way for people all over the world to demonstrate, quite painlessly, that we are concerned about global warming and the over-intensive use of fossil fuels.

(2) Because all of us can use less energy every day, without sacrificing anything, and we need to remember that we are not passive spectators, watching global warming. We are actors. We can make a difference, if we act together. In 1997, the average home in the OECD countries used 38 watts every day just to keep appliances on standby. These 386 million households were wasting 14,634 megawatts a day. Does anyone think this waste is necessary? Of course not. But we need to make an effort.

(3) Because the electrified world is historically new, and once in a while we need to remember what darkness looks like. Human beings evolved without artificial light, and during this hour we might reflect on where we stand in relation to the more than 100,000 years of human history. Human beings have used electricity for light and power for less than one tenth of one percent of human history. In that blink of an eye, historically speaking, we have polluted the atmosphere and the sea and unbalanced ecological systems in ways that we are struggling to understand.

(4) Because your house and your family seen by candlelight are beautiful in ways that you may not have seen lately. The human eye did not evolve to see the world blanketed in electric light, but rather evolved to see somewhat differently by day and by night.

(5) Because if the sky is clear, you will get a good look at the heavens. The urban landscape especially can be improved by reducing electric light. Most urbanites scarcely see the heavens at night, because excessive artificial light reflects into the atmosphere, making it impossible to see more than the brightest stars.

So why let this night be like all the others? Why not turn out the lights, and look for a local arrangement celebrating "Earth Hour" as it is called in many places, following the Australians who began this ritual in Sydney. The Danes are calling it something else, and starting not on the hour but at 20:30.

As the Toronto Star put it last year, “This event is an opportunity to show how individuals acting together as a community can have a huge impact. Ultimately, we hope it gets people thinking and talking here in Toronto and in cities around the world about real solutions to what is arguably the most important issue of our time.”

The Bureaucratic Dream of Quantifying Research Results

After the American Century

I can see the attraction for bureaucrats and politicians of giving a numerical score to every book and article that every academic produces. If one could find a way to do this accurately, then individuals, departments, universities, and whole nations could be ranked, and money handed out to the most productive. It seems so logical and easy. Of course, university researchers will resist, but the effort surely would be worth it.

This fantasy has been pursued in different nations, and for the last year has been a key project of the Danish Ministry of Research. As it happens, I was dragooned (not asked) to serve as one of 300 experts charged with drawing up the lists of all scholarly journals and academic publishers, and then dividing them into groups based on quality. More points would be given to work published in the "best" journals. The Ministry considered this task to be so easy that it provided no release time or extra funding for it, and the work was to be done in just a few months. Each sub-committee would send in its lists and the Ministry would combine them into a complete overview.

This reminds me of a story I heard about the Spanish king (centuries ago) deciding to produce a map of his empire by asking each region to prepare a map of itself, the idea being to combine them all into a map of the realm. Each governor had a map drawn, but of course the scale employed and the methods of representation were by no means the same. The King tried to put the pieces together, but instead of a map he had a misshapen patch-work quilt of no value.

Yet making a map of Spain is easy compared to making a map of academic knowledge production. Land, surveyed according to a single system, can be mapped pretty accurately - even if it is not as easy as it might appear, for one one must take account of the curvature of the earth and of slight deviations in measurement due to equipment that reacts to changing temperatures, etc.

But a numerical system to measure knowledge production? Here are some of the problems. First, some fields are intensive, others extensive. In philosophy, for example, the closely reasoned article is the central form of publication, and even a very fine philosopher may not produce so very many in a decade. In my field of history, articles are more frequent, which makes a certain sense, since its subject matter is extremely extensive, with every nation, organization, and institution providing ample areas for study.

Second, in some fields, books are the most important units, in others, articles. Scientists mostly write articles, often of less than 10 pages. For historians, the most significant unit of production is the book. The typical academic book is 250-400 pages, more than ten times the length of the typical history article. How does one compare the two forms? Some university departments in the United States establish "conversion tables" ranging from five articles equals a book to as many as eight articles equals a book. There is no consensus.

The subcommittee of five persons on which I served developed a list of more than 700 English language journals from Britain, Ireland, the United States, Canada, Australia, and New Zealand. The same committee was also responsible for the Spanish and French journals, most of which I cannot offer a qualified opinion about. Imagine that we used only ten minutes to consider the ranking of each of the 700 English language journals. That is far too little time, yet that would take 7000 minutes, or 116 hours. The problem is that even a committee of five will not know all 700 journals.

Nor was this all. We also had to compile a list of academic publishers, a formidable task in itself, for many universities in the English speaking have presses, including some of the most prestigious. We were provided a list to start with, but it was rather useless, as it omitted many of the finest publishers and was not drawn up according to any principles that I could discern. We were told it was a Norwegian list, but I think the Norwegians are far more clever.

Well, we did our best, as did the other sub-committees, but our map of academic knowledge production could not possibly become coherent. And to make matters worse, unidentified persons in the Ministry (none of them with even a Ph.D. so far as I can tell) tried to adjust the rankings without consulting the specialists involved. They made the mess worse and called their own intelligence into question. Example. A physics article published in Science is considered by any university a great achievement. Unfortunately, the Danish Ministry of Research did not know this and assigned Science a low ranking. That should have been a no-brainer. Readers in Denmark will know that this fiasco became part of an on-going news story about the attempt to create a what is called (in rough translation) a "bibliometric measurement system."

For the record, let me say that from day one I felt this was a misguided enterprise, whose real purpose was to take decision-making about quality out of the hands of professors and give it to bean-counters in the Ministry. Furthermore, such experiments in other nations, notably the UK, have shown that it does not foster world class research. Rather, it encourages a calculated response to whatever point system is established. For example, suddenly several short articles are better than one long one, several articles accepted by mediocre journals are "worth more" than one really great article that took years to write and place in a top journal. A book that can be researched quickly is worthwhile, but scholars are, in effect, punished for attempting anything that takes more than a few years. Textbooks are not worth any points, so no one wants to write them. Book reviews are also worth little or nothing, so this essential and very public part of the peer review system is weakened.

Worst of all, academics may possibly come to believe that every article published in a "top" journal is automatically better than one appearing in a "lesser" journal. In fact, innovative work often finds a home in new journals or new publication series, created by upstarts or dissenters. Judging and rewarding academic research based on a point system reifies the present hierarchy and punishes innovators. The goal may be stimulating research, but the result can be ossification.

It may seem astonishing to bureaucrats, but the best judges of what is great research are the specialists themselves - the peers in peer review. Why judge the content of an idea by the venue where it appears? Why suppose that quantity can make up for quality? Why imagine that knowledge is quantifiable in the first place?

General Electric Models the Past and Future

After the American Century

Back in 1980s I was something of an expert on the history of General Electric, having written a book about it. Since then I have casually followed the company, as part of my interest in the history of technology, but I have not done any research directly on GE itself. Nevertheless, from a historical viewpoint, GE is a fascinating study in what has happened to the American economy during the last century.

GE began as a merger in the 1890s between a number of electrical manufacturing companies, including those of Thomas Edison. It held a large clutch of valuable patents in electrical lighting, transmission, and so forth, and it was also wise enough to establish the first corporate research and development center in the United States, in 1900. It gave inventors and scientists security in return for patent rights, and managed to parlay its early dominance in the industry into a long-term dominance in most things electrical, including radio, television, and much else.

GE also bought promising small companies that made consumer goods, such as irons or toasters and developed these products. At first each kept its own brand identity, but around 1920 the company was convinced by the legendary advertising man, Bruce Barton, to consolidate all its consumer goods and sell them under the single logo of GE. For generations afterwards the GE label was an assurance of quality, and many consumers bought their refrigerators, stoves, televisions, and other large electrical purchases from GE, which remained one of the largest corporations in the United States for all of the twentieth century.

Of course GE made some mistakes, like missing the emerging computer revolution, and it was unlucky in taking a leading role in nuclear power, which became unacceptable to the American public after the Three Mile Island Accident. Still, until the last quarter of the twentieth century it remained a powerhouse, and a corporation loved by investors, because from the 1930s it just never missed a dividend, and usually paid a little more than expected. GE was the definition of a blue-chip stock.

But last week GE was on the ropes, as it announced a big cut in its dividends. Its stock price fell to little more than $6 a share, a two-thirds drop over just a few months, and even since 2007 when it was selling for $37.

What happened? GE changed its winning strategy. Instead of focusing exclusively on being the best in the world at its core businesses, electrical power generation and electrical consumer goods, its management decided to branch out. It bought coal mines, for example, and got into medical services. This seemed to make sense, as Asian companies were making the appliances at prices so low there was little profit in it, compared to the 1950s. Most tellingly, GE made a lot of money by lending other people money. GE competed with banks, through a financial division.

For years that finance division was the most profitable part of the company. No more. In the late Bush marketplace, GE's lending was apparently no more profitable than the banks' mortgages. Depending on what rumor you believe, the debt ranges from a paltry billion (which I can easily handle) or two to maybe 40 billion. No one outside the company seems to know. And so the stock falls.

Is this not, in miniature, the history of the American economy since 1900? From blue collar jobs and heavy industry to white collar jobs in finance? From patent control and market dominance to loss of control over markets? From blue chip stocks, rock solid in value, to a faltering stock price amid uncertainties about the company?

If GE was the model company for the 20th century, can it revive to be a model for the new century? I submit that GE should get back to its roots. It still has terrific research labs, excellent consumer products, and exciting new alternative energy technologies. It could help to develop a national smart transmission grid, new mass transit, and much else. But to do so, it might need to split itself into two companies, letting the financial arm go it alone, and if necessary, fall into bankruptcy.

[Update: On June 26, 2009, GE was selling for just under $12.00 a share, and had been trading at higher prices since this piece was written, briefly even getting over $16.]

Shootings Plague Normally Placid Copenhagen

After the American Century

In Denmark one almost never gets a message from the American Embassy warning that a certain part of the country is dangerous and should be avoided. In fact, I cannot remember getting one before. But I did receive such an email a few days ago.

Denmark generally is regarded as one of the most peaceful nations on earth. The Economist regularly places it among the three or four safest nations. But in Copenhagen for months casual and unmotivated shootings, with a few dead and many wounded bystanders, have become an almost daily byproduct of a gang war. Sometimes the press presents these shootings as matters of mistaken identity, which would suggest that if you don't look like a drug dealer there is no danger. But many of those shot do not fit that profile, and other motives seem behind the shootings.

Indeed, the City of Copenhagen had to suspend delivery of food to elderly shut-ins because those who make the deliveries were being threatened. (No one is suggesting that these city employees were delivering illegal drugs to the elderly!) When city police were then told to protect workers delivering food to the elderly, there were threats against the police.

So how safe is Copenhagen? And for tourists, is it still worth visiting? My own sense is that most of the city remains quite safe compared to American or British cities, for example. But if the city cannot find a way to stop these shootings, it it cannot control the areas where they most frequently occur, notably Nørrebro and parts of Amager, the image of Copenhagen will suffer. And that will undo the millions being spent to attract tourists to the City.

The world press has begun to take note. The Times of India estimated that there have been at least 60 shootings since last August. Bloomberg.com called Copenhagen "a shooting gallery." Stories have appeared in The China Post, The Hindustani Times, and in The International Herald Tribune. Tourism to Denmark, already suffering due to the weak world economy, can only be hurt further, as people decide where to take their summer vacations.

An Aside: Danger does draw a certain class of visitors,. "Riot tourism" is promoted by at least one website, promoting the excitement and learning potential of disorder. For those looking for confrontations with the state and solidarity with fellow radicals, Copenhagen might become an attractive destination. If the city is really to draw such tourists, however, the current drug war would have to be politicized, so that it seemed like something else, for example class warfare (the long proclaimed collapse of capitalism?) or perhaps official discrimination against immigrants.

But leave speculation aside. Denmark is not really so dangerous that tourists should avoid it, whatever you may read in the press. However, unless you are a "riot tourist," stay out of Nørrebro.