Steve Reads

The reporting on budget cuts is just all wrong. The Times reports that the House is set to cut $60 billion, but doesn’t really go into detail on what those cuts include.

Among the cuts that it does describe are an amendment to deny funds to Planned Parenthood. Now, this is really stupid. As of 2008, only 3% of Planned Parenthood’s expenses went toward abortion; about 13 times that much went to contraception, and 9 times more toward STD treatment.

So what does a “smaller budget” in the Planned Parenthood context mean? It means more unplanned pregnancies. This may or may not increase expenses in the future (you can imagine scenarios under which it increases, and others under which it decreases), but you miss the entire picture if you focus narrowly on how much avoids going into the budget today.

Or take the IRS, everyone’s favorite bad guy. The GOP is predictably going after it. But we know what happens: cut from the IRS budget, and more people avoid paying the taxes that the law requires them to pay. If you think the tax burden is onerous, fine; then change the law so that it’s less so. But if you want to enforce the tax law, that enforcement costs money. The IRS budget pays to enforce the tax law. If you think that a marginal dollar of IRS expense leads to less than a dollar in taxes recouped from cheats, then suggest ways to improve the ratio. The way the press talks about the budget, however, avoids discussing benefits, and the GOP is in no rush to debate the merits of a marginal dollar in IRS expenditures. (Far be it for me to suggest that the very point of cutting the IRS’s budget is to make it easier for wealthy people, the GOP’s natural constituency, to cheat on their taxes.)

Or take the $131 million the GOP wants to cut from the Securities and Exchange Commission’s budget. Greater SEC oversight might have prevented the financial crisis that we’re just now digging out of. That would have saved us trillions of dollars in bailout money. If a marginal dollar of spending on the SEC yields more than a dollar of savings, we should spend that dollar; if it doesn’t, we shouldn’t. But narrowly focusing on expenses without focusing on results is the essence of foolishness.

Everyone loves to attack regulation of the sort that the SEC engages in. And yes, it confers costs on businesses. When the EPA fines firms for dumping toxic waste into the water, that’s regulation too, and that’s an expense. But it also saves money: keeping toxic waste out of the water keeps people safer, lets them live longer lives, keeps them in productive economic activity for more hours every day, etc.

The SEC’s and the EPA’s budgets are visible costs: the numbers are written down in a book and debated. Their benefits — birth defects prevented, financial crises averted — are longer-term, and the connection is not always visible. In fact, if government is working well, we often don’t notice the regulation’s benefits. Had the SEC been working perfectly, we might have avoided a financial crisis altogether. When FEMA fell apart under the Bush administration and New Orleans drowned, we noticed that failure; had FEMA done its job, there would have been nothing to notice. We had 30 or 40 years of financial stability after the Great Depression, in no small part because banks were kept highly regulated and boring. I suspect this invited people to think that regulation was unnecessary, because the world seemed to do fine without it. But that doesn’t mean the regulation went away; it just means the regulation was invisible.

Invisible, properly-functioning regulation — from FEMA, from the SEC, from the EPA — means invisible benefits: cities that don’t flood, financial crises that don’t drive us into recession, rivers that we can swim in without thinking of the agencies that made it possible. The costs, though, are there for everyone to see in the budget books every year.

To every decision there are costs and benefits, but somehow government policies are treated as though they conferred costs and never benefits. This same refusal to see the forest for the trees came up when the Affordable Care Act was being debated. Democrats insisted on keeping the cost of the bill below an arbitrary limit of $1 trillion over 10 years. But don’t focus on “how much the government spends on health care”; focus on “how much the average taxpayer is spending on health care”; whether the taxpayer’s expense comes out of taxes or from his wallet is largely immaterial. Presumably when the government spends $1 trillion on health reform, that’s going to lower the amount that we consumers have to spend out of pocket. So it’s just transferring expenses from one bucket (out-of-pocket health-care expenses) to another (taxes). Does a dollar taken from taxes reduce out-of-pocket expenses by more than a dollar? If so, there’s a good argument that we should spend that dollar; if not, there’s less of a good argument.

Granted, you could argue that government expenses are always worse than personal expenses, no matter the ratio. This is an argument from principle, which you get from dyed-in-the-wool libertarians, and it’s crazy. I think most Americans would reject it out of hand, and it absolutely wouldn’t sell. Suppose a dollar of government health-care expense, or a dollar spent regulating the private insurance industry, saved $10 off the average American’s out-of-pocket health expenses. Would you be willing to let the government handle this and charge you your dollar of tax? I know I would; I hope you would too.

Sometimes what government gives us for our taxes is something that the private market just couldn’t provide. Medicare provides insurance for old people, which they couldn’t get at any price beforehand. Here it’s not even a question of how much it costs the government to provide something that the market also provides; it’s the government creating a functioning market where none existed before.

Again: to every policy there are costs and there are benefits. We live in a time when government policies are assumed to consist solely of costs with nary a benefit. Republicans rejoice in this assumption, which allows them to talk about “cutting $60 billion” without having to answer the question: are they also cutting more than $60 billion in benefits?

We need to stop considering government expenses in their own separate bucket. At the very least, we need two expense buckets: out-of-pocket expenses and tax expenses. We simply cannot view the federal budget in isolation from the rest of the economy.

I promised on Facebook that I’d say some things about the Agile software-development idea. I’m by no means an Agile expert, but it made a lot of sense to me. There were a few components that I really liked when we used it at my last job. They’re pretty dyed-in-the-wool Agilists; I probably would be if I really dove into it, but as it is I’m picking and choosing the bits I liked. Here goes:

• Daily stand-up meetings. You and your team literally stay standing long enough for each of you to explain a) what you did yesterday, b) what you’re going to do today, and c) what’s holding you back, if anything. If you spend too many days in a row saying, “I meant to finish x, but I didn’t, and I swear it’ll be done today,” eventually those on your team are going to ask if they can help you get past whatever roadblock you’re encountering. Which is a polite way of saying, “Come on, now; hurry it up.”

  Staying standing is vital here. Meetings get over a lot more quickly if you’re on your feet rather than kicking them up and sipping a cup of coffee.

• Feelings of human shame. I feel like the last bullet calls out one important part of Agile: it’s built on the very deep-seated need not to fail in front of others. It’s certainly possible in a lot of organizations to hide in a corner and fail for a long time before anyone notices. Agile makes that much less likely: if you fail, you’ll fail within a few days in front of your whole team. Better to ask for help than flounder pridefully.

• Monthly kick-off: You tell everyone what you’re going to do. They get a chance to ask you why you chose to prioritize one thing over another.

• Monthly show-and-tell: You and your team stand up in front of everyone in your organization (sensing a pattern?) and show what you did; they get to evaluate, among other things, whether you did what you said you would do during the kickoff. Preferably everyone on the team does this for his or her own part of the project. Again, you do not want to be the person who failed to get your thing done.

• Small teams with a few defined roles. In our case the roles were developers (the people actually writing the code), QA engineers (testing), and “product owner.” The product owner is the voice of the customer. She (and I’m happy to say that this isn’t just political correctness overcompensating: we really did have a delightful, brilliant, energetic product owner who happened to be a woman, along with plenty of kick-ass male product owners) tells the developers what we need to build and lets us figure out how to build it. Then she talks to customers and figures out what to have us do. And she tries as hard as she can to clear shit out of our way so that we can get work done. I was a part of at least one meeting filled with three or four engineers, that our product owner interrupted halfway through to say, “Do the engineers really have to be here for this?” whereupon, the answer having been in the negative, we got up and left. See “Few meetings, fast, standing up,” below.

• Short iterations: The interval between planning and show-and-tell is pretty critical. You don’t want it to be too long: saying, “This project will take a year to complete” is as good as saying that it’ll never be done. But you don’t want a show-and-tell every week; that’s too much bureaucratic overhead — or maybe not, if that’s what your team decides is right. But it certainly feels to me like there’s a tradeoff: keep going until the marginal benefit of shortening deadlines is just offset by the marginal cost of larding the process up with meetings.

  There are several important reasons to have these short cycles. One is, as I mentioned, that planning for a small task is (duh) easier than planning for a long one; you’re much more likely to end up accomplishing what you said you would. Second is that you’re outrunning your customers, namely those inside and outside your company who want you to do things for them. The faster you can get something rough and ready in front of them, the less likely they are to say, “You know what would be really nice? …” or “Oh, sorry, turns out that we fired the CEO and now we’re looking for something different.” You’ve also given them something to anchor their expectations: now instead of comparing what’s in their head to a blank canvas, they’re comparing it to something real. That’s likely to focus people and ground them.

  Certainly the most exhilarating work experience I’ve had since leaving college was building a rough prototype at my last job. We got something out the door in, if memory serves, 3-4 weeks (might’ve even been more like 2) and in front of customers. We asked them right away: is this something you want? Yes, the UI is crappy, but ignore that; we’ll make it look nice later. (Those of you objecting here that design — of software, of posters, of books, of whatever — is fundamentally bound up with the functioning of the product and isn’t just about “making it pretty”: yes, you’re right, but I’m pretty damn convinced that rough-and-ready is a tradeoff worth making.) Does it do, functionally, something you’d want? What else would you want it to do? Does this replace something you use in your everyday work? After you get done using this tool, what’s the very next thing you’d go do?

  Once we had those answers, and we were convinced that real people would really use this thing, we sat head down at our computers for a couple weeks (I think we were on two-week cycles here) and got another block of interesting work done. People came by during the show-and-tells, looked at it, critiqued it, and told our product owner what else it needed to have. Heads back down. After a few months of this, I looked up and — hot damn! — we had a really nice piece of work in front of us. I can’t say I was responsible for big chunks of the code, but I did what I could, and I felt proud of what we’d accomplished.

• Few meetings, fast, standing up: This isn’t part of according-to-Hoyle Agile, and you could have it as part of any organizational structure, but I suspect that organizations which take Agile to heart will want to use this too. At my last job we took Paul Graham’s notion of maker time versus manager time to heart. The idea there is that, for a manager, the hourlong meeting is the quantum of work; the manager’s day is scheduled in one-hour blocks. Whereas writing software — and maybe this is true of other focused endeavours — takes a few hours to get into. Me, I needed the music to be set up right, I needed maybe a cup of coffee, I needed to knock off some smaller programming challenges to get the muscles limbered up … it could take me an hour or two just to get going. An hourlong meeting thrown into the middle of that bungs everything up: by the time you get out of the meeting, you forget where you left off and need to do the coffee, the programming exercise and so forth all over again.

  Meetings are good for some things. If you’re hashing out a strategy, or the structure for a few weeks of work, you probably need meetings. But to the extent that you can shunt them onto email, or onto quick in-person chats in the hallway, you’re creating space for your makers to make stuff. (By the way, I was extremely cautious — maybe too cautious — about approaching people, for exactly this reason. First I emailed them, which seemed like the least-intrusive way to get in touch. Then I IMed them. Then I walked over to them and chatted. Yes, the last method is likely to be fastest for me, but it’s also likely to break their concentration.)

• Test-driven development. This is even less a part of classic Agile, and if you’re a certain sort of person maybe you feel you don’t need it. Me, I needed it. The idea here is that you write the tests for your code first, then write the code, then confirm that your code passes the tests, then write some more tests, then write some more code. At every iteration, write a failing test just as fast as possible. For me, this was a way to combat my own inertia, so this is sort of like Feelings of human shame: Agile fundamentally seems like a way of adapting an organizational structure to fit human behavior. When I forced myself to write a failing test as fast as I could, I was fighting my own habit of overthinking a problem before I started solving it. Yes, thinking is important, particularly when it comes to design, but there’s a certain kind of thinking that is either a) telling you why a certain thing won’t work, or b) pre-emptively making a solution elegant before you’ve made it at all. Test-driven development (TDD) says that elegance can wait just a bit. Write your test, then write your solution, then confirm it works (test passes), then make it elegant (i.e., more general, i.e., refactored). You’ll get the elegance soon enough, but in the meantime you’ll have working code. And who knows: by skipping the elegance for a bit, maybe you’ll find that a whole different approach works better.

Like I said, this isn’t really by-the-book Agile. But these are all things that make a lot of sense to me, and worked great for us.

I hate to return to the blog, after such a long silence, on this note, but I find it impossible to read Ezra Klein today — frustrated at the cheap sentimentality in one part of President Obama’s Arizona speech — without thinking of this passage from The Brothers Karamazov:

“Listen! I took the case of children only to make my case clearer. Of the other tears of humanity with which the earth is soaked from its crust to its center, I will say nothing. I have narrowed my subject on purpose. I am a bug, and I recognize in all humility that I cannot understand why the world is arranged as it is. Men are themselves to blame, I suppose; they were given paradise, they wanted freedom, and stole fire from heaven, though they knew they would become unhappy, so there is no need to pity them. With my pitiful, earthly, Euclidian understanding, all I know is that there is suffering and that there are none guilty; that cause follows effect, simply and directly; that everything flows and finds its level—but that’s only Euclidian nonsense, I know that, and I can’t consent to live by it! What comfort is it to me that there are none guilty and that cause follows effect simply and directly, and that I know it?—I must have justice, or I will destroy myself. And not justice in some remote infinite time and space, but here on earth, and that I could see myself. I have believed in it. I want to see it, and if I am dead by then, let me rise again, for if it all happens without me, it will be too unfair. Surely I haven’t suffered, simply that I, my crimes and my sufferings, may manure the soil of the future harmony for somebody else. I want to see with my own eyes the hind lie down with the lion and the victim rise up and embrace his murderer. I want to be there when every one suddenly understands [pg 268] what it has all been for. All the religions of the world are built on this longing, and I am a believer. But then there are the children, and what am I to do about them? That’s a question I can’t answer. For the hundredth time I repeat, there are numbers of questions, but I’ve only taken the children, because in their case what I mean is so unanswerably clear. Listen! If all must suffer to pay for the eternal harmony, what have children to do with it, tell me, please? It’s beyond all comprehension why they should suffer, and why they should pay for the harmony. Why should they, too, furnish material to enrich the soil for the harmony of the future? I understand solidarity in sin among men. I understand solidarity in retribution, too; but there can be no such solidarity with children. And if it is really true that they must share responsibility for all their fathers’ crimes, such a truth is not of this world and is beyond my comprehension. Some jester will say, perhaps, that the child would have grown up and have sinned, but you see he didn’t grow up, he was torn to pieces by the dogs, at eight years old. Oh, Alyosha, I am not blaspheming! I understand, of course, what an upheaval of the universe it will be, when everything in heaven and earth blends in one hymn of praise and everything that lives and has lived cries aloud: ‘Thou art just, O Lord, for Thy ways are revealed.’ When the mother embraces the fiend who threw her child to the dogs, and all three cry aloud with tears, ‘Thou art just, O Lord!’ then, of course, the crown of knowledge will be reached and all will be made clear. But what pulls me up here is that I can’t accept that harmony. And while I am on earth, I make haste to take my own measures. You see, Alyosha, perhaps it really may happen that if I live to that moment, or rise again to see it, I, too, perhaps, may cry aloud with the rest, looking at the mother embracing the child’s torturer, ‘Thou art just, O Lord!’ but I don’t want to cry aloud then. While there is still time, I hasten to protect myself, and so I renounce the higher harmony altogether. It’s not worth the tears of that one tortured child who beat itself on the breast with its little fist and prayed in its stinking outhouse, with its unexpiated tears to ‘dear, kind God’! It’s not worth it, because those tears are unatoned for. They must be atoned for, or there can be no harmony. But how? How are you going to atone for them? Is it possible? By their being avenged? But what do I care for avenging [pg 269] them? What do I care for a hell for oppressors? What good can hell do, since those children have already been tortured? And what becomes of harmony, if there is hell? I want to forgive. I want to embrace. I don’t want more suffering. And if the sufferings of children go to swell the sum of sufferings which was necessary to pay for truth, then I protest that the truth is not worth such a price. I don’t want the mother to embrace the oppressor who threw her son to the dogs! She dare not forgive him! Let her forgive him for herself, if she will, let her forgive the torturer for the immeasurable suffering of her mother’s heart. But the sufferings of her tortured child she has no right to forgive; she dare not forgive the torturer, even if the child were to forgive him! And if that is so, if they dare not forgive, what becomes of harmony? Is there in the whole world a being who would have the right to forgive and could forgive? I don’t want harmony. From love for humanity I don’t want it. I would rather be left with the unavenged suffering. I would rather remain with my unavenged suffering and unsatisfied indignation, even if I were wrong. Besides, too high a price is asked for harmony; it’s beyond our means to pay so much to enter on it. And so I hasten to give back my entrance ticket, and if I am an honest man I am bound to give it back as soon as possible. And that I am doing. It’s not God that I don’t accept, Alyosha, only I most respectfully return Him the ticket.”

“That’s rebellion,” murmured Alyosha, looking down.

“Rebellion? I am sorry you call it that,” said Ivan earnestly. “One can hardly live in rebellion, and I want to live. Tell me yourself, I challenge you—answer. Imagine that you are creating a fabric of human destiny with the object of making men happy in the end, giving them peace and rest at last, but that it was essential and inevitable to torture to death only one tiny creature—that baby beating its breast with its fist, for instance—and to found that edifice on its unavenged tears, would you consent to be the architect on those conditions? Tell me, and tell the truth.”

As promised a month ago, the Adam Smith reading starts Monday. I was late, myself, to buy the books, so I only discovered a few days ago that the editions I mentioned before — Modern Library for Wealth of Nations, Great Minds for Theory of Moral Sentiments — are hard to come by. They don’t look hard to come by on Amazon, but my favorite bookseller — from which I buy all my books, if I can help it — tell me that it would be hard for you fine people to find them in your own favorite local retailers.

So. What I have here next to me is the University of Chicago Press edition, which is a reprint of the apparently canonical Cannan edition. This one is unabridged, five books long, and about 1200 pages.

I hope this new edition doesn’t screw people up. I was aiming for unabridged editions before, and this is an unabridged edition. So whatever edition you have won’t be too far from what I have.

I’ve got my best people at the Harvard Book Store working ’round the clock to find me the proper edition of Theory of Moral Sentiments. When I have that one in hand, I’ll mention it here as well. But we have our hands full with Wealth of Nations for a little while.

Matt Yglesias today looked at the change in disposable personal income over the last few years, and I wanted to check that the definition of the term didn’t count “disposable income” as income less, say, mortgage and credit-card payments. If it did, then you’d expect to see disposable income go down as people pay down debt.

Turns out the definition doesn’t deduct debt payments, but it confuses me in other ways. Here it is:

Personal income is the income received by persons from participation in production, from government and business transfer payments, and from government interest. Personal income includes income received by non-profit institutions serving households, by private non-insured welfare funds, and by private trust funds. Income from production is generated both by the labor of individuals and by the capital that they own. Private income not earned in production, such as from capital gains or the sale of assets, is excluded. Personal income is calculated as the sum of wage and salary disbursements, employer contributions for employee pension and insurance funds, proprietors’ income, property income (personal interest, dividend and rental income), and transfer payments to individuals, less personal contributions for social insurance.

Disposable personal income is personal income less personal tax payments. While personal income does not include capital gains realized through the sale of assets, personal income taxes do include the taxes paid for these capital gains.

(Internal footnote omitted.)

I’m puzzled by a couple aspects of this definition:

1. “[E]mployer contributions for employee pension and insurance funds” makes it in? So when my employer contributes to my 401(k), that counts as disposable income? Okay, I can half-see that: if need be, I could raid the 401(k). But I’d pay a penalty if I did, so I hope that something less than 100% of my contribution counts toward my disposable income. But then what about the “insurance funds” part? My employer’s contribution to unemployment insurance counts toward my disposable income? The employer contribution to long-term disability? To health insurance? This would seriously inflate this measure of disposable income: as has been well-documented, health-care costs have been rising, so a lot of money that might otherwise have gone toward rising salaries has instead gone into health-insurance payments.

2. Disposable income doesn’t include capital gains? But why? That’s income I can spend, just as much as is income earned through honest toil. And if they’re not going to include capital-gains income, then why do they deduct capital-gains taxes?

I’ll look around for a more in-depth discussion of this definition. If anyone can clarify, please do.

…namely the “it’s all a bunch of ironic hipsters whose lives are so comfortable that they don’t feel any real commitment to anything” brush, I ask: isn’t it just possible that much of Stewart’s audience voted for Barack Obama expressly because they feel sadness for those who can’t afford health insurance, and want to help those less fortunate than themselves? For instance, maybe, just maybe, the young liberals in the audience wanted universal health care for entirely non-ironic reasons?

I resist the temptation to close with an unironic fuck-you.

The greatest danger of a book like this is that it could become catastrophe tourism — the sort of book that you read, then recite to your friends with excessive condescending blinking that says, “Yeah, it’s real tough out there in the shit, man.” Fortunately, Gang Leader for a Day is very much not like that. The author himself also isn’t trying to impress you with the friends he made in the gang, and he removes himself as much as possible from the story. That story is about the people living in the projects; the author only appears when he explains — always briefly — how he got the access he did.

Venkatesh entered graduate school in sociology at the University of Chicago in the early 90s, he tells us, and rapidly found himself dissatisfied with the rarefied, high-level statistical approach to understanding groups of people. In order to feel that he knew something about these groups, he had to get to know actual people. So off he goes to the now-demolished Robert Taylor Homes, on the south side of Chicago. He walks into one of the homes, and just happens to run into a charismatic gang leader named JT. JT is central to the rest of the book: he shows Venkatesh how gangs work at the lowest levels, he eventually introduces Venkatesh to the very wealthy men at the top of the Chicago gang pyramid, and — as the title suggests — he lets Venkatesh “run” the gang for a day.

Let’s back up a little bit, though. The remarkable thing about this introduction is how short it is: there’s only a few pages between the start of the book and when Venkatesh starts spending serious time with JT. A more self-absorbed author would have spent lots of time laboring over the start of grad school, and would have even celebrated his remarkable stroke of luck at happening upon JT so quickly. But no: Venkatesh is in a hurry to tell us about the people he met. He’s got a heck of a story to tell, so he dives right in.

The eventually goal of his Ph.D. dissertation was to map out how the underground economy in the projects works. Central to that economy is the utter failure of official institutions to support a humane life. I would say that Venkatesh “portrays” the Chicago Housing Authority (CHA) as hopelessly corrupt and inept, if it weren’t, instead, that Venkatesh takes this as a basic fact of life. Everyone in the book knows that the CHA is a massive scam, and besides: the book offers endless examples of its criminality. Why bother arguing a point when you can instead show its obvious truth?

The folks living in the projects know, for instance, that the CHA will never replace the front doors to their apartments if those doors get busted down. On freezing, windy, snowy Chicago winter days, with the homeless and the drug-addicted squatting in the hallways, the missing doors can be fatal. Here’s where the gang, and Ms. Bailey (the grand dame of her swath of the Robert Taylor Homes) move in. Favors get traded: the CHA and Ms. Bailey have an I-scratch-your-back-you-scratch-mine policy going, someone knows someone else, someone else owns a spare door, someone else can offer a temporary apartment while the one’s getting repaired.

There are shootings and stabbings all over the place, but no one expects that the police will come investigate them. There are rumors, in fact, that a crooked cop forced one of the project’s women to perform oral sex on him in front of her boyfriend. The police are mostly not the projects’ friends: they stay away when they’re needed, and abuse the residents when they do stop by.

There’s no legal support for the poor folks there. The CHA provides almost no housing support. Upwards of 90% of the projects’ residents are unemployed; those who do manage to get an education and a job leave and never come back. … Well, except for JT: he left the projects, got a business degree, and returned to a managerial role within the Black Knights gang. I couldn’t help but picture Stringer Bell from The Wire playing the role of JT, almost from the start of the book.

In fact, I couldn’t help imagining The Wire as a film adaptation of Gang Leader for a Day. The guiding idea behind The Wire is that there aren’t good guys and bad guys; there are just forces operating on everyone from above and below. You do certain things to placate your boss at your company, and your boss is doing things to placate his. Go up a few levels, and the CEO is trying to get what he wants, subject to the whims of his board and the stockholders. Turns out the same thing is true in the Robert Taylor Homes: JT and the other managers are trying to keep their gang wars as quiet and contained and predictable as possible, because there’s nothing the police hate more than unpredictable violence that spills beyond the confines of the projects. CHA employees don’t need to demand the occasional sexual favor from Taylor Homes residents, but everyone knows that nothing’s going to get done if those favors aren’t forthcoming. (There’s a lot of casual prostitution in the Homes. It’s not a job; it’s a response to a pressure.)

Of course Venkatesh is subject to his own pressures. He has to get out a Ph.D. thesis. And it takes him a while to realize that he should consult a lawyer: he can’t watch over the illegal activities of a drug-selling gang without eventually inviting a police inquiry. In a really astonishing passage, he realizes that everyone else within the Homes has known this from the start. From the start, they’ve been keeping the really incriminating stuff away from him. Everyone other than Venkatesh is aware of the Wire-like world they’re living in.

Which makes sense, of course: most of the book’s readers live in a world with well-regulated, formally contracted transactions between well-behaved actors. Things break; we get them repaired. We hear gunshots, we call the cops, the cops come. Enough middle-class white people band together to make the South End a nice place, and eventually it works out. Ours is a world where everything functions more or less as it should. Peel back just a layer or two, though, and you lay bare the quid pro quo underlying it all. Informal institutions subject to their own rules govern everything, because the formal institutions have utterly failed. (This book makes economics look comical. Economics often studies only rigorously formalizable contracts; it’s as though medicine only studied diseases that aren’t cancer.)

I can’t recommend Gang Leader For A Day highly enough. Like Common Ground, it ends up speaking larger truths by never wavering in affection for its subjects. This affection translates into a relentless need to portray them honestly, warts and all. It’s a triumph of storytelling.

Jessa Crispin linked via Twitter to a piece about novelists’ difficulty talking about the Internet. Should their characters be like a lot of us, constantly switching between Facebook, Twitter, email, phone calls, text messages, and the rest? Should their books deliberately avoid writing about those things, and instead focus on (here I adopt a Brahmin chin tilted 30 degrees up from the horizontal; imagine Bill Buckley saying this) “the eternal present”?

Listen, the Internet is important. Many of us spend a lot of our time on it. But we spend a lot of our time doing lots of other things, too. How about focusing on rampant job insecurity, for instance? How about focusing on what happens when people lose jobs and realize that there’s virtually no social safety net left?

I’m not saying that writing has any obligation to be socially relevant; it doesn’t. As a practical matter, writers only have an obligation to do what pays the bills. (Or not! They might not be able to make money writing, so they do whatever else they need to do to pay the bills, like sling lattes at Starbucks while they write on the side.)

What I am saying, though, is that we have a tendency — either when we look at the world we live in now, or at former worlds — to focus on one detail and obsessively assert that That’s What Everyone Spent All Their Time Thinking About. Look at slavery, for instance: it’s really hard to read about the era between the signing of the Constitution and the Civil War without getting this picture of everyone just counting the days until society was torn apart by war. Or England from the late 18th century through the mid-19th: there’s this picture of people toiling away in the dark Satanic mills and thinking nonstop about What Industrialization Meant when they weren’t Suffering The Ill Effects of Industrialization. Surely these things were important — world-historical, even — but so were lots of other things.

And in the grand scheme of modern living, the Internet is time-consuming, but it’s not at all clear that it’s important. Spending time with your family is important. Getting enough sleep, eating well, and exercising are important. Not needing to drink yourself to sleep at night is important. Inasmuch as work-related stress impinges on all of these things, work is very important. Facebook is not important.

So why are there so many more stories and essays about the effect of the modern media environment on fiction writing than there are about the effect of job insecurity? David Foster Wallace, for instance, spent just about his entire career obsessing over television’s and the web’s effect on fiction writing: his essay “E Unibus Plurum” [sic], which was included in A Supposedly Fun Thing I'll Never Do Again; Infinite Jest itself (about a movie so addicting that you’d sacrifice anything to keep watching it); an essay or two in Consider the Lobster; and a good fraction of the post-Infinite Jest interview with Wallace in Although Of Course You End Up Becoming Yourself focus on the media. Wallace is considered an “important writer” largely on that basis.

Where are the people writing novels about job insecurity? It sounds a little silly when phrased that way; no one would really want to read that. But it’s not clear, stated abstractly, that anyone would want to read a novel about the effects of television on American ennui, but there you have the shortest possible description of Infinite Jest.

Hypothesis: Wallace’s fiction — and all other fiction coming from people who obsess more about the media environment than they do about the rest of life — appeals more to urbane single dudes in their 20s and 30s, whose biggest concern is that they use Twitter too much, than it does to folks who are having trouble making ends meet.

Then again, the last piece of fiction I can remember reading from someone who was self-consciously trying to Engage With The People was George Packer’s Central Square, about my beloved neighborhood. I give Packer credit for trying, but that book was condescending, as virtually all of Packer’s writing since then has been. (Though you really, really, really need to read his Blood of the Liberals.) Condescension may be inevitable when you’re deliberately trying to make a point through your fiction; you engage in telling rather than showing.

So maybe the idea should be: don’t write a novel that tries to talk about income inequality, or talk about job insecurity, or talk about the pernicious effects of Angry Birds. Just write a novel that respects its characters enough to depict them honestly, and hope that anything you want to say will emerge naturally from that. When I find such a novel, I’ll let you know.

(Attention-conservation notice: 1,600 words on why it may be a good idea not to read cranks. Also some words on academic orthodoxy. Scattered thoughts on building institutions for seeking the truth.)

My friend, who blogs pseudonymously and will hereafter be known as “PB” (for Pseudonymous Blogger), takes me to task for suggesting the existence of cranks. (Note that I didn’t dismiss any specific people out of hand.) PB has long invited me to read the heterodox folks that he follows, including some “with a large collection of old John Birch Society literature.” As my readers know, I tend to read more from the academic wing; PB attacks academia like so:

Academics in the social science to do not get fired or demoted if they get things wrong. They do not get additional grad students if they are right. The grad school and peer review process reward one thing – conforming to the current intellectual fashions.

I believe I’ve heard about other places where leaders reward servants less for their objective correctness and more for hewing to what the leaders believe. I believe that’s called every single human institution ever.

I tease. If the problem is as PB describes, it’s an institutional incentives problem, and the question is how to build better institutions. Think of the various institutions we have in this world whose purpose is (ostensibly, anyway) to seek out truth. We have juries, to find truth in the legal realm; academia, to find it within more abstract domains; the media, to find what our leaders are hiding and bring policies to the broader public; and many others. Every one of them is guilty in some way of confirmation bias. Cass Sunstein, who’s now the head of OIRA, is famous for documenting how groups of people who believe the same things and only speak with one another are likely to arrive at a more-extreme conclusion than if they had some dissenters in their midst. He’s also famous for taking this line of research and using it to suggest that the Internet needs “general-interest intermediaries”, like the New York Times and the Wall Street Journal, to help soothe society’s emergent extremism. Of course it’s an open question whether the general-interest intermediaries serve the purpose that he thinks they do.

PB focuses on a couple successes from his heterodox sources, but recall the proverb about stopped clocks. The question is how well an institution works overall. We statisticians talk about “type I” and “type II” errors, or “false positives” and “false negatives,” respectively. A false positive, in the context that PB and I are talking about, is when you identify something as true when it’s false; a false negative is when you identify something as false when it’s true. Suppose, for instance, that I adopt as a decision rule that I will never read anything written by someone who’s been a member of the KKK. I may well reject some smart writers because my rule is too crude; these would be false negatives. The basis for my rule is that I expect most of what the KKK member utters to be false; by rejecting KKK writers out of hand, I’m trying to minimize my rate of false positives (again, accepting something as true when it’s in fact false). There are costs associated with false positives, and costs associated with false negatives. To compute the total expected cost of a decision rule, multiply the cost of a false positive by the probability of a false positive, and add to it the cost of a false negative times the probability of a false negative. Going along these lines eventually gets you to the Neyman-Pearson Lemma, which is fundamental to statistics.

Rejecting too many people as cranks may give you a high rate of type-II errors: you may reject some good people out of hand. If PB’s right, mis-labeling cranks is also likely to give you too high a rate of type-I errors: you’re just confirming the conventional wisdom, which has a terrible track record. If I’m reading PB right, then, his claim is that academia’s error rate is terrible in both directions, hence “dominated” in the game-theoretic sense. My response would be twofold: first, find me an institution that balances type-I and type-II errors better than academia. This isn’t a rhetorical question; if there is such an institution, I’d like to find it. But the point is not to focus on isolated instances where someone predicted something better than someone else; the point is to look at overall error rates in both directions. Second, I’d ask PB to suggest institutional improvement that would make academia — or juries, or the media, or pick-your-favorite-institution — do its job better.

Based on what PB wrote, I suspect we’d both look for changes in the incentive structure. If it’s empirically true that academia hires on the basis of confirming what the incumbents already believe, how do we change that? To pick one example out of the air: is there any way to make academics put their money where their mouths are? The examples PB cites from macroeconomics, for instance … is there any way to make Ben Bernanke suffer financially if the economy goes south and benefit if GDP rises? You can look to what corporations do — stock options, for instance — to put some skin in the game, but we also know all the sorts of gaming that go along with those incentives. Unless you structure them properly, you have the epidemic of “I’ll Be Gone, You’ll Be Gone.” Structuring incentives is an incredibly nontrivial problem. To pick but one book on the subject out of the air, take a look at Managerial Dilemmas: The Political Economy of Hierarchy. Or, from another angle, read Herbert Simon’s paper on “The Proverbs of Administration”, wherein Simon notes that most every managerial proverb has an equal and opposite proverb that gets thrown around just as confidently.

So in short, I’m not at all confident in my ability to construct incentives that reward the right behavior within institutions, and I certainly don’t feel as though, if I were made Dictator of Academia, I could build better incentives than those that are already in place.

Also, I’m fairly convinced that PB is just empirically wrong about the ideological homogeneity of academia. I think he may be confusing what happens within one institution with what happens in the academy as a whole. Does PB really contend that the University of Chicago and Princeton University are hiring the same economists? No, of course not: they argue bitterly. Just look at Princeton’s Nobel laureate Paul Krugman denouncing the U of C’s Nobel laureate Ed Prescott. Or look at a good century of arguing in statistics over whether we ought to be Bayesians or frequentists. And that’s in statistics, where empirical and mathematical confirmation are, at least in principle, much more readily available than in the social sciences or the humanities. I’m curious what PB’s standard for homogeneity is. Are academic disciplines homogeneous whenever they avoid pistols at dawn?

If academia is argumentative, it may well be so because the incentives encourage it. Judge Richard Posner, in Public Intellectuals: A Study of Decline, argues that academics have every incentive to be contentious — at least within the public sphere — because it gets you attention when you reject the status quo. I see very few books entitled Most Everything You Know About The World Is Basically Correct.

All of that said, PB and I would surely agree that the conventional wisdom often gets things disastrously wrong. To take but one example, you can look at conventional views of market regulation. From the New Deal through World War II and up until the 1960s, the conventional wisdom — which took canonical form, perhaps, in the great Paul Samuelson’s 1948 textbook — was that the goal of economics was to control markets toward desired ends. Eventually the conventional wisdom switched to the idea that markets were best left on their own. You can argue both sides of this — and, importantly in this context, academia has argued both sides of it, continuously, for half a century. What made the switch happen? Well, it’s complicated, but surely a part of it is that it’s convenient for businessmen to argue that they’re best left unregulated. They were going to argue this anyway; academic economics just offered them some tools. But a whole set of entirely orthodox economic results says something quite different: what individual actors do rationally on their own can lead to a disastrous, unwanted result in the aggregate. You can look anywhere within orthodox economics for confirmation of this idea (see Bowles, Microeconomics: Behavior, Institutions, and Evolution; and Schelling, Micromotives and Macrobehavior). The problem probably isn’t academic rejection of heterodoxy; it’s that economics can be used as a tool of ideology in a more direct way than can mathematics, so it is used as such a tool.

Of course PB is right that there were big glaring warning signs that we were in an unsustainable bubble. Dean Baker flagged a lot of these in Plunder and Blunder. Lots of very intelligent keepers of the conventional wisdom, like Bernanke and Greenspan (Ph.D.s both), who should have known better, got it wrong. All this tells me is that, when the economy’s booming and lots of people are making money, it’s very hard to be the guy who (as the conventional saying goes) “takes the punch bowl away.” Now that everything’s collapsed, we’ll have more people honoring the conventional wisdom. The wisdom was always there; the will to follow it was not.

As for PB’s generous invitation to read along with him on one or more topics: it’s a generous offer, but take a look at how much other stuff is either in my queue or sitting on my floor, tempting me. Add to that a chapter-by-chapter read of Adam Smith, a heretofore-unnannounced chapter-by-chapter read of Gerard Debreu’s Theory of Value, and a couple bits of big news that I’m waiting to fully ferment before I mention them here; the result is that I don’t have the time to read in what sound like fascinating areas. But I appreciate the offer.

This is a bit more fun and quite a bit less dark than The Maltese Falcon. Though both here and there, someone is dead within the first couple pages, basically within mere moments of contacting the narrator or main character.

Here the narrator is a lovably lazy, bibulous man named Nick Charles. He used to be a private investigator, but he’s long since retired to attend to the investments left to him when his wife’s father died. Charles jokes on a few occasions about marrying her for the money, and you’re never quite sure if it’s a joke or a “joke.”

He comes semi-unwillingly out of retirement to investigate Just One More Case, when his old lawyer friend and war buddy calls him up to say that an old eccentric client has gotten back in touch; soon after, a confidant of that client is dead, and we’re immediately to wonder: did the crazy guy do it? (Answer: maybe!)

The Thin Man‘s main allure is the nutty family from which the crazy man comes; they’re brilliantly drawn characters. Years ago he’d divorced his capricious, violent, unpredictable wife Mimi, who lights up this book’s pages (even if it’s a blacklight) and leaves you just a little terrified every time you meet her. She’s such a caricature that she belongs on stage where she can be rendered operatically. (I imagine this was deliberate. The Thin Man got turned into a series of six movies and a television show.) Mimi’s son reminds me of Elijah Wood’s character from Sin City, only without the violence but with the capacity, lurking just below the surface, for utter terror.

Every Hammett novel in this collection must feature a gorgeous 20-something blonde. The one here is Mimi’s daughter, who has apparently grown from a gorgeous child to a delicious adult. At one point she passes out drunk, and Nick and his wife undress her for bed — seemingly for no purpose other than so that Hammett and the audience can gaze lovingly upon her “beautiful little body.” Whenever she shows up, someone is drooling over her; clearly we’re meant to as well.

Again, since we know that we’re going to be led bewilderingly through twist after twist and turn after turn, the plot is incidental. Phone calls, letters, and chance meetings seemingly deflect Nick from finding the killer, but we know that in the back of his capacious mind he’s keeping it all together and ploddingly unmasking the bad guy. Meanwhile he does some copious drinking. It’s great fun.

I’ve had ramen now at two Boston-area establishments: Sapporo, within the Porter Exchange; and now Ken’s, within the Super 88 Market in Allston. I’d heard from multiple sources that Ken’s was the best around here, but I was sorely disappointed. One item on the menu advertised a rather more intense pork flavor, and the waiter recommended that, so I got it. It was not intense. The broth was thin and uninspiring. The only real plus side to their ramen was the combination of boiled egg and nori. Plus the noodles were maybe a bit more substantial than Sapporo’s.

Sapporo … I’m kind of obsessed. They advertise their broth as being filled with “rich collagen” after cooking for “over ten hours.” It really is an intense, flavorful, buttery, full-bodied broth. That’s broth you want to bring home to mother. But you wouldn’t, is the thing, because it is soup rather than a person.

Next time I’m at Sapporo, I’ll ask them if they can throw in a couple sheets of nori to their house ramen. With that added, it won’t even be a contest.

P.S.: I need to check out Men Tei, it seems. I’m always glad to explore the area’s ramen.

P.P.S. (14 October 2010): Verdict on Men Tei: Nice noodles, and a lot of noodles, but uninspiring broth. Also not much in the broth. I got the pork cutlet, which definitely felt as though it came from a package of frozen cutlets. This is of a piece with the octopus balls, which people on ChowHound suggests really do come from a frozen package. Men Tei seems to have very little kitchen at all, so this isn’t surprising. But in any case: nothing to write home about. I think my Sapporo homecoming will come soon.

(Attention conservation notice: just about 1100 words, plus some block quotes, on the systematic perversion of American history to serve ideological ends, and Jill Lepore’s remarkable stand for viewing our history through clear eyes.)

Let’s take it as an axiom, to begin, that the Constitution is not perfect. I’ll hand the mic here to Justice Thurgood Marshall, to whom Lepore handed it as well:

The focus of this celebration invites a complacent belief that the vision of those who debated and compromised in Philadelphia yielded the “more perfect Union” it is said we now enjoy.

I cannot accept this invitation, for I do not believe that the meaning of the Constitution was forever “fixed” at the Philadelphia Convention. Nor do I find the wisdom, foresight, and sense of justice exhibited by the Framers particularly profound. To the contrary, the government they devised was defective from the start, requiring several amendments, a civil war, and momentous social transformation to attain the system of constitutional government, and its respect for the individual freedoms and human rights, we hold as fundamental today. When contemporary Americans cite “The Constitution,” they invoke a concept that is vastly different from what the Framers barely began to construct two centuries ago.

The Civil War is refutation enough of the eternal wisdom of the Framers. The fact that the Constitution explicitly counts a slave as three-fifths of a human should have long since put to bed any rumors of its perfection. African-Americans are in a better position than most to recognize the Constitution’s defects.

Yet we accept the mythology that we’re dealt. In this country, the Constitution’s perfection, and the immortality of the Framers, is as close as we get to gospel (quite literally — see below). Everyone wants the Constitution for himself. Whenever someone wants to make a change to the existing order, the most resonant thing he can say about it is that it brings the U.S. closer to the perfection that lies latent within the Constitution and the Declaration of Independence. The Brown v. Board decision sought integration to bring us closer to the ideals of the Constitution, while at the same time parents in Boston who opposed forced busing declared Arthur Garrity’s decision the end of American liberty.

The history of the U.S. can in many ways be viewed as the history of misrepresenting our history. Everyone wants to make the story of the founding his own, so everyone has to find a way to mold the founding into his preferred shape.

Take, for instance, the famed “Christian nation” story. According to this story, the country was Christian at its founding, the Framers knew that religion is inseparable from good government, they knew that the purpose of government is to bring people closer to God, and the separation of church and state is a myth. In this Christian nation, Connecticut’s 1639 Fundamental Orders decreed that one of its purposes was “to mayntayne and presearve the liberty and purity of the gospell of our Lord Jesus.” Which is why it’s important to observe, as Lepore does, that

Following the faith of their fathers is exactly what the framers did not do. At a time when all but two states required religious tests for office, the Constitution prohibited them. At a time when all but three states still had an official religion, the Bill of Rights forbade the federal government from establishing one.

Meanwhile, when conservatives insist that we read the Federalist Papers, they seem less insistent that we read the parts where the Framers were inveighing against the evils of standing armies — hence the part of the Constitution which embodies that revulsion by giving Congress the power

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years

That two-year limitation is in there expressly because the Framers thought — like many classical small-r republican thinkers over the centuries — that standing armies were a great evil.

Lepore’s ingenious little book is meant to revisit points like these: to remind us that the Framers by no means spoke with one mind and that when they did speak with one mind they often contradicted their modern interpretation; and to ensure us that if they returned to us today they would probably not be horrified by what we’ve made of their document. It was broken at birth. The U.S. has spent centuries trying to repair it.

Lepore interviews dozens of Tea Partiers on a cold day when they visited Boston (Lepore’s town — she’s a professor at Harvard) in early 2010. Every time a Tea Partier says something about what the Framers would have wanted, or how liberals are destroying America, she steps back as a good historian would and studies the truth of their claim. Liberals believe that America is always wrong, say Tea Partiers? You need to go back a ways if you want to find the first person to believe that about the U.S. Try Frederick Douglass:

What, to the American slave, is your 4th of July? I answer; a day that reveals to him, more than all other days in the year, the gross injustice and cruelty to which he is the constant victim. To him, your celebration is a sham; your boasted liberty, an unholy license; your national greatness, swelling vanity; your sounds of rejoicing are empty and heartless; your denunciation of tyrants, brass fronted impudence; your shouts of liberty and equality, hollow mockery; your prayers and hymns, your sermons and thanksgivings, with all your religious parade and solemnity, are, to Him, mere bombast, fraud, deception, impiety, and hypocrisy-a thin veil to cover up crimes which would disgrace a nation of savages. There is not a nation on the earth guilty of practices more shocking and bloody than are the people of the United States, at this very hour.

If they’re even guilty themselves of hating America, liberals didn’t invent that hatred. Hating what the country stands for is as American as slavery.

So what the Tea Party advances is a strange kind of fundamentalism, in the literal sense of that word. Fundamentalism (the OED traces the word to 1923, when it was used to refer to American Christians) believes in returning to some original text which it believes to be flawless and true. Constitutional fundamentalists believe that they can find a single, true meaning in the original document, even though we know that the origins of that document were far from holy. The origin was a compromise between northern and southern states meant, for one, to keep the country from flying apart. (It did anyway, 70 years later). Yet this fundamentalism, for whatever reason, chooses to ignore the supporting texts and the all-too-well-documented history surrounding it.

Academic historians, for their part, have not helped. As Lepore notes, historians have long resisted the urge to “presentism” — the idea that you can naïvely map the past onto the present and draw some sort of easy moral. (One thinks of “The past is a foreign country; they do things differently there.”) The academy has become more cloistered, and as a result has stopped engaging with the public on the great themes. Instead, when historians interact with the world nowadays, they tend to narrow the lens as far as they can and write little biographies. The last historian to engage with the great themes, says Lepore, was my hero Richard Hofstadter, of the magisterial Anti-Intellectualism in American Life; it’s truly a stellar example of the great-theme brand of history. “The historians will have a field day [with his The American Political Tradition And the Men Who Made It]“, he said, “but I am in hopes that some of the non-academic people will like it.”

Having largely left the field, historians have allowed all manner of charlatans to move in and define what our history is. The Texas School Board could leap in and define Thomas Jefferson — “who once wrote about a ‘wall of separation between Church & State’” — out of our history, and instead add Thomas Aquinas to the list of thinkers who inspired the Revolution. (Poor Thomas Jefferson. The man has been endlessly defined into and out of American history so many times since his death; see The Jefferson Image in the American Mind for the final word on this score.)

Lepore, with The Whites of Their Eyes, has forcefully retaken the field. She’s a historian engaging directly with an anti-historical ideology. In a remarkably concise and deceptively simple way, it returns to the tradition of grand history. She clearly rushed it into print to engage with a current controversy, but didn’t skimp at all on historical rigor. It’s a treasure, and something you’ll want to hold in your back pocket for the next few troubled years.

There’s been a bit of a debate about Greg Mankiw’s recent New York Times column, with Kevin Drum giving it a rather nice smackdown. Mankiw comes back today with some responses. I didn’t get past the first one:

If no one is proposing eliminating taxes, why compare the Obama policy to a world without taxes?  Economists understand that, absent externalities, the undistorted situation reflects an optimal allocation of resources. [...]

My first thought was that that’s a very narrow description of “optimal allocation of resources.” If you don’t pay taxes, the government doesn’t build roads, doesn’t fund a Defense Department to keep the borders safe, doesn’t keep your food safe via the FDA, doesn’t regulate airlines via the FAA, etc. How exactly will the corn (the “resource” in this example) arrive at your grocery store (that is, be “allocated”) without a system of roads to get it there? And how will those roads be built without taxes? This is the economists’ magical definition of “optimal allocation of resources”.

That’s when I realized: all the things I mentioned are hidden within Mankiw’s “absent externalities”. Those are two bizarrely overloaded words in this context. As Justin Fox makes clear in his terrific Myth of the Rational Market, there’s been a long divide in economics between the institutionalists and the rest. (I think the rest have a name, but I’ve forgotten it.) The institutionalists emphasize that when Mankiw talks about “optimal allocation of resources,” he’s brushing aside most of what makes the world interesting.

Take contracts, for instance, which are the most basic weapon within the economist’s arsenal. Economists assume that transactions can be “completely contracted,” meaning that every detail of the transaction can be spelled out and its violation quickly detected. But a contract, so described, is an abstraction hiding a lot underneath it. What happens if I violate a contract that you and I signed? You take it to a court, presumably. The court rules against me and orders me to pay up. What happens if I don’t? The full weight of the state comes down on me to make me pay you. So even talking about “complete contracting” — which is an essential element leading to Mankiw’s “optimal allocation of resources” — requires you to talk about some sort of enforcement mechanism. That enforcement mechanism could be a government, or it could be a mafia that’s willing to break my legs, but in any case there’s an institutional structure underneath the contract. Getting the institutions to ensure complete contracts costs money: either the government has to be willing to bring cops with guns to my house to make me pay up, or the mafia has to employ dudes with baseball bats, but someone somewhere needs to be standing ready to enforce that contract.

Now then. I hope we agree that we need to give up something — be it taxes or Vinny’s valuable free time — in order to allow contracts to be signed and enforced. I hope we agree that signing contracts is vital to the optimal allocation of resources. Therefore, I hope we agree that we need to give up something to attain the optimal allocation of resources. So how does it even begin to make sense for Mankiw to say that a tax-free world is relevant in any discussion at all? I contend that it’s only relevant if you ignore institutions — which is exactly what Mankiw is doing.

(Note also that the most basic contract of them all — the labor contract — cannot be completely contracted, as has been known since 1951.)

(Attention conservation notice: 800 words documenting the near-perfection of the iPhone user interface. Plus a small suggestion for how they could improve it still more.)

Things the iPhone does that I’ve not seen anyone else do:

• There’s a ‘.com’ button when you’re typing in a field that accepts domain names (like an email-address field, for instance). I only realized recently that you can press and hold the .com button to get .net, .edu, .org, and .us.

• It gets cooler. Add an international keyboard (Settings -> General -> Keyboard -> International Keyboards -> Add New Keyboard…), then go back to an URL field (like in Safari, say). Suppose you added an Arabic keyboard. Now look at what the .com button has: top-level domains for Arabic countries, like .ae. Similar things happen if you add French keyboards, etc.

• Spell-check will not flag words if those words are in your address book. It does better than just not flagging them, actually: if you type a friend’s name in lowercase, it’ll correct the case for you.

• Probably most every iPhone/Touch user has noticed by now that you can go into the Maps application and start typing the name of someone in your contacts for whom you have a physical address; the Maps app will offer you any matching physical addresses.

  You’d expect — or at least, I’d expect — Google to get this right, too. After all, when you’re signed into your Google account, Google knows about your contacts; it should be easy enough to carry that contact information over into Google Maps. But they don’t.

• This next one is easier to describe by example. I have a friend, Chris Rugen, whom I’ve jokingly put into my iPhone contacts as “Chris Rügen”; my iPhone contacts sync with Google. In the iPhone, if I start typing “rug”, it offers up “Rügen” as a completion — even though the “u” that I typed has no umlaut over it.

  I’ve found no other system that does the completion this intelligently. Thunderbird doesn’t. Google itself doesn’t, either: searching within my Gmail contacts for “rugen” doesn’t return the accented contact. In either Thunderbird or Google, I need to start typing Chris’s actual email address — which contains no accent, of course — in order for them to find Chris.

These are all just little things, but that’s exactly what makes the iPhone what it is: nearly all the little things are done perfectly. You get a sense of calm when you play with an iPhone (and “play,” by the way, is exactly the right verb), because nothing is out of line with what it should be. Computers have a habit of steadily accumulating frustrations; the iPhone does not.

One thing the iPhone does need to do differently is related to the Archive button in the email client, which only arrived in one of the new iOS releases (I want to say 4.0). If you have a Gmail account, the Archive button will do the same thing on the phone that the Archive button does on Gmail’s website. That’s great. But there’s no Archive operation available for non-Gmail accounts. Worse, the Archive button gets replaced with a delete button for non-Gmail accounts. So if you’re used to archiving messages by tapping the leftmost button, muscle memory alone will often make you delete messages accidentally. This gets especially to be a problem now that iOS 4 does a single combined universal inbox: you don’t know which account a given message is coming from (could be Gmail, could be not), so the very same inbox view can sometimes make that button do archival, sometimes do deletion. It’s a dangerous combination. (Though not too dangerous: you can always retrieve the deleted message from the Trash, if you notice soon enough that you deleted rather than archived.)

What’s odd is that fixing this to work with all account types wouldn’t be that hard, unless I’m missing something. Right now you can configure which folders on your remote server will be used for drafts, sent mail, and deleted messages: go to Settings -> Mail, Contacts, Calendars -> [account name] -> Account Info -> Advanced and look under Mailbox Behaviors. If the folders you’ve specified don’t exist, I believe the iPhone mail client will create them. It would be easy enough to add an ‘Archives Mailbox’ item under there.

I can see a reason why they might not do this. Gmail’s archives folder is called ‘All Mail’ on the server side, so a sensible default name for the archives folder would be ‘All Mail’. But on a non-Gmail account — IMAP, say, or Exchange — maybe that name would be confusing. Maybe on those sorts of accounts, it would be smarter to call the folder ‘Archives’. But then you’ve got an inconsistency between the name of the archives folder on different types of server; that may confuse users.

If I understand my intellectual history correctly, Adam Smith is much-misunderstood. We typically quote two passages from The Wealth of Nations:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens.

and

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

And that’s about it. But it’s a large book, no? Just about 600 pages, as a matter of fact. And he has a second book, The Theory of Moral Sentiments, that’s almost as long. That’s 1200 pages, from which we usually extract about two paragraphs. How about this other paragraph, in which Smith makes the case for what we’d today call progressive taxation?

The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich; and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be any thing very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.

That’s three paragraphs, anyway. Let’s do all 1200 pages, shall we? Starting about a month from today — Monday, November 15th — I’m going to start reading The Wealth of Nations and The Theory of Moral Sentiments and offer a chapter-by-chapter excursus on this here blog. Let’s have a big old book group about What Adam Smith Really Said. I predict that we’ll be surprised. I expect that he’s not nearly the libertarian, every-man-for-himself, minimal-government-is-the-best government guy that we’ve come to know.

But I don’t know! I’ve not read Smith (apart from three paragraphs). It’ll be a surprise. Let’s do it.

The editions I’m thinking of are linked above, but again:

• The Wealth of Nations (Modern Library, unabridged)
• The Theory of Moral Sentiments (Great Minds, not sure if it’s unabridged but seems to be)

Get them out of the library, buy them from your favorite bookseller, etc. Starting in a month, let’s talk Adam Smith.

P.S.: My homedogg Paul noted that the initial Wealth of Nations link I provided was an abridged Great Minds edition. I’ve corrected that to the Modern Library edition.

Somehow I’ve been entirely innocent of detective novels, though I’ve really enjoyed what I’ve seen of the genre on film; I loved The Big Heat and The Big Sleep, for instance. But somehow I’ve never seen The Maltese Falcon on film, even though I love Humphrey Bogart and have long been told that the movie is a must-see. So when my friend Dan Milstein emailed me to say that the book has some of the best dialogue he’s ever read ever, I had to pick it up.

It doesn’t disappoint. Actually, maybe there’s one disappointment, namely that I have no choice but to envision Bogart in the role of Sam Spade. Spade, if you’re not aware, is the prototypical (I wonder if he actually is the prototype) private detective. He’s practically a rock moving through the world: he’s entirely self-sufficient, impermeable to outside influences of any kind, and keeps his own council. The reader is just as uncertain as any of the characters about what drives him. Consequently, from moment to moment you have no idea what he’s going to do. But you can be sure that he’s never going to lose his cool. He’ll never strike anyone in anger, because it’s not clear that he ever gets angry. He’s cool as a cucumber, always plotting his next move. He’s always one step ahead of the bad guys. You know that everything will be wrapped up at the end with a nice bow, and that Spade’s hands will remain perfectly clean.

I used to frown on this sort of genre, because it’s very formulaic. Nowadays I’m inclined to believe that most popular entertainment (some of which deserves to be called “art,” some of which doesn’t) is formulaic, and that most innovation comes within formulae. You know a lot of things already about detective novels and movies. There’s going to be a drop-dead gorgeous dame who’s going to double-cross the hero, possibly before triple-crossing the bad guys and redeeming herself. All the women will be straight out of Hitchcock: bombshell seductresses who are strong-willed right up to the moment that they swoon into the protagonist’s arms. There are going to be many reversals of fortune. There’s going to be a MacGuffin that everyone’s going to be obsessed with chasing. You can’t be sure that the police are good guys. Finally, the character of the private dick himself will be sweet and sensitive beneath a surly exterior. So the plot is already very constrained; it takes a brilliant writer to keep the story gripping even within those constraints.

The Maltese Falcon is brilliant indeed — gripping and intensely readable the whole way through. The plot is basically incidental, but let’s summarize it anyway. Right from the start, the beautiful dame, a Miss Wonderly, is waiting for him in his office. She tells Spade that her 17-year-old sister has run off with a man named Floyd Thursby, and that Wonderly has a date with him that very night to convince him to bring her sister back. She asks Spade and his partner to follow Thursby, perchance to find her sister and bring her back before Wonderly’s parents find out what’s happened.

Spade’s partner is dead within the first eight pages, Thursby’s dead within 19, Wonderly’s name isn’t actually Wonderly, we never hear again about the sister, and everything is actually baroquely related to a priceless antiquity that gives the book its name. I think I’ll stop there; the great joy in this novel is finding out how everything unwinds and how Spade navigates it all without getting the slightest bit of muck on his suit.

It’s a sheer joy, and Hammett is a superb prose stylist. His writing is as deliberate and forceful as Spade: we picture Hammett walking into a room, quickly sketching out the people and objects within it, and chopping the dialogue out of blocks of marble with a few clean hits on the chisel. All the lines are clean and neat, and we picture every scene perfectly with seemingly no effort on Hammett’s part.

I foresee myself developing a Hammett-and-Chandler obsession.

P.S.: As you might be able to tell from the cover photo at right, The Maltese Falcon comes from a collection of three novels in a single Everyman edition. I’ll review them individually here.

Reading documentation of a case where the Obama Administration continues to subject a man to indefinite detention on the basis of highly unreliable evidence, one has to think of 1984:

The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power. Not wealth or luxury or long life or happiness: only power, pure power. What pure power means you will understand presently. We are different from all the oligarchies of the past, in that we know what we are doing. All the others, even those who resembled ourselves, were cowards and hypocrites. The German Nazis and the Russian Communists came very close to us in their methods, but they never had the courage to recognize their own motives. They pretended, perhaps they even believed, that they had seized power unwillingly and for a limited time, and that just round the corner there lay a paradise where human beings would be free and equal. We are not like that. We know that no one ever seizes power with the intention of relinquishing it. Power is not a means, it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power.

Roger Ebert is fond of saying that a movie is not about what it is about; it’s about how it’s about what it’s about. Likewise, what’s great about Cooking with Fernet Branca is not that it’s about meals made of dog and cat, but how it’s about meals made of dog and cat.

This is one of the most satisfying books I’ve read in a very long time, start to finish. Not only is it one of the funniest things that I wager you’ll read this year; it’s also enjoyably written from the perspective of unreliable narrators. In fact a lot of what’s funny and inventive about it is the wildly different takes that both narrators have on the same events.

Marta and Gerry occupy neighboring villas on the top of some remote Italian mountain, each looking for solitude for his or her own reasons. Gerry is a writer, pounding out ghostwritten biographies of vapid celebrities (race-car drivers, downhill skiers); Marta composes scores for artistically important films. From Gerry’s perspective, Marta is some frumpy Eastern European peasant with a vague command of English. From her perspective, Gerry is an insular, probably homosexual Brit with a strange, characteristically British absence where his bottom should be. Unexplained helicopters visit Marta in the dead of night. Gerry interviews one of his emptyheaded celebrities on the night of one of these helicopter arrivals, and his credulous-hippie mind swears that Marta has been visited by an alien. The confusions pile up between Marta and Gerry.

Most of what’s hilarious about Cooking with Fernet Branca, though, has nothing to do with a comedy of errors. Indeed, I think most of the plot is incidental; it serves as ornamentation draping off the outlandish stylistic frame and one of the absurd central premises of the book — namely, that you can cook anything with Fernet Branca.

Fernet, for those of you who are unware, is an Italian after-dinner bitters which the inestimable mrz tells me is used in Italian households to soothe an upset stomach; it quite often pulls off this trick by doubling as an emetic. (Personally, I love the stuff, and I find that it does wonders for the digestion.) Fernet shows up on most every page of Hamilton-Paterson’s book; not only does Gerry toss it liberally into all his dishes, but the characters consume quantities of the stuff that are well beyond the realm of reasonableness. [1] Glasses, bottles, cases of the stuff get slurped down throughout the course of this book — with, it must be said, truth-to-life about just how devastating that much Fernet would be to your head. Among the recipes containing Fernet:

• Garlic and Fernet Branca Ice Cream, whose intended purpose is to make Marta get the point that she’s not welcome but instead awakens Gerry “with a series of awesome farts…on the ground by [his] front doorstep with dawn breaking all around.”
• Rabbit in Cep Custard, containing “1 kg fresh rabbit chunks”
• Alien Pie, containing “1kg smoked cat, off the bone”
• Otter With Lobster Sauce, containing “1.5kg otter chunks”

These recipes are all, it seems to me, entirely possible, if horrifying. (Stay away from my cats.) I’m curious to what extent Hamilton-Paterson replicated them in his own kitchen.

Hamilton-Paterson’s sense of humor is wicked and completely tweaked. Some examples:

1. On the plane just now I was toying with the idea of Poodles in Noodles. Who knows, its consonance may be more promising than the actuality and I’ll have to consult a Filipino friend of mine about it first. The same goes for Pekes in Leeks.

2. Have you ever embarked on something that looked completely straightforward but which has turned out to be bafflingly technical? For instance, I was completely flummoxed some time ago in a dentist’s waiting room when trying to kill time with the crossword in the current number of JAPEDA, the Journal of the American Pedophilia Association — a scholarly magazine I had not encountered before. … I labored in vain for half an hour, although it did occur to me later that American may spell “pyjamas” with an “a” in place of our “y”.

3. Meanwhile, I have gone right off my beautiful idea of pears in Gorgonzola with cinnamon cream. It’s all Marta’s fault. Had she not drenched that putty ball of hers in the cinnamon cream I was experimenting with the other day it might still be a possibility. But the whole idea now reeks of linseed oil and bullying and has been ruined for me. Imagine Bach busy writing a soulful aria for the Saint Matthew Passion when in the street outside a butcher’s boy goes past whistling a popular ditty about three jolly swineherds. Suddenly poor old JSB realizes it’s the very tune he’s now writing, only much faster and in a major key. “God damn,” he mutters softly to himself as he slowly tears up the manuscript, having unwittingly had a preview of what in a hundred and fifty years will be known as the unconscious. That’s pretty much how I feel about the irreparable damage Marta has done my cinnamon cream.

I laughed constantly while reading this book — or, when on the T, where outright laughter is maybe frowned upon, I carried a devilish grin on my face at all times. Such a delight, this book. Go out, grab a copy, and enjoy the next few hours of your life.

[1] — (You drink maybe an ounce at a time. The people at Drink mixed me a flip based on it once. Looks like Cocktail Slut long ago discovered the Fernet Flip, as has Cocktail Chronicles.)

I’ve recently become obsessed with a cocktail they make at Drink called a Trinidad Sour (so named because Angostura bitters are from Trinidad). The recipe I use is

• 1 part Angostura bitters
• 1 part lemon juice
• 1 part rye. I’ve been looking around for 100-proof Rittenhouse Rye, but what I have on hand is 90-proof Russell’s Reserve and 80-proof Old Overholt; I think higher-proof ones wouldn’t hide so easily under the rest of the ingredients.
• 1 part orgeat. I use a brand called Ferrara, which sells it as ‘orzata’. Around these parts it’s available at Capone Foods (at least at the Cambridge location near Davis Square).

The recipe I started with used 3 parts orgeat, 3 parts bitters, 2 parts lemon juice and 1 part rye. Another variant used 2:2:2:1. I found that 1:1:1:1 suits me best; it’s a bit more astringent than the other recipes. Not that the Trinidad Sour is actually sweet; it’s really quite tart. It’s some bizarre magic trick whereby a full ounce or more of bitters lands in a cocktail that is … not bitter. One night I forgot to put in the orgeat; that was bitter. So the orgeat is the thing, I guess.

Last night Drink constructed for me a variant on the Trinidad Sour called Don’s Little Bitter, or DLB; it apparently originates at a pretentious bar I’ve been to in New York City called Please Don’t Tell, or PDT. Its recipe is

• 1 part Peychaud’s bitters
• 1 part Angostura orange bitters (available around here at The Boston Shaker, along with the Peychaud’s)
• 2 parts Angostura bitters
• 2 parts lemon juice
• 2 parts Fernet
• 2 parts simple syrup
• 4 parts Barbancourt 8-year rum

It’s like a Trinidad Sour, but you can taste the bitters much more decisively — still not overwhelmingly, but they peek out over the top just a bit. If I had more of them, or had mulled more over the one I had last night, I might be able to tell you more about it. Fernet, for instance, has a distinctive taste, and I imagine I should be able to spot its effects more.

(My buddy Jon and I have a longstanding, lighthearted debate going over whether Fernet is, as the kids say, “narst.” In my queue is a novel called Cooking with Fernet Branca, which I gather is based around the absurdity of trying to cook with something which The New York Times describes as “bottled bile.” Anyway, I really enjoy the stuff. After-dinner bitters are great for the stomach. Trust me on this. Or go buy a bottle.)

The idea of using more than a splash of bitters — of, in fact, making bitters central to the drink — is novel and awesome. I approve.

(Attention conservation notice: 1600 words reviewing two books from the perspective of securities traders. Run right out and read Diary of a Very Bad Year, and skip Das.)

These books need to be reviewed together, because they overlap in a lot of ways. For one, the author of Traders, Guns, & Money is unbelievably self-aggrandizing, while the subject of Diary of a Very Bad Year is just literally unbelievable.

Traders came out in 2006, before the world had fully melted down, so it gets some credit for being out in front about how incomprehensible certain derivatives, particularly the famed Collateralized Debt Obligations (CDOs) and Credit Default Swaps (CDSes) are. To review: a Collateralized Debt Obligation is essentially a piece of a mortgage (or some other asset backed by collateral, as opposed to something like credit-card debt). Typically these are assembled into “tranches,” which are groups of mortgages containing similar risk of default. If many mortgages default, one tranche — the “equity” tranche — gets wiped out first; its risk is therefore higher than that of the other tranches, so its return is correspondingly higher. As the defaults mount, the other tranches get wiped out in sequence. This is how you can end up with a collection of poor mortgages bundled into a security that gets labeled “AAA” (investment-grade): the later tranches, which are less likely to get wiped out, are AAA, while those which are first in line when the revolution comes are higher-risk. It looks like magic, but it’s actually sensible.

Mathematically, there are a few troubles with this. One is that you need to know some things about the correlation of the assets in the mortgage pool. That is, does knowing that one mortgage is in default tell you anything about whether another is in default? Suppose all the mortgages in your pool came from the same neighborhood; it’s likely that their defaults would be highly correlated. If the one mortgage defaulting means that all mortgages will default, then we say that their correlation is 1; if there’s absolutely no relation between whether one defaults and whether another does, then we say they have correlation zero. Obviously a lot depends on the correlation: if the correlation is 1 between the defaults of all the mortgages in your pool, then dividing into tranches doesn’t matter in the least: all mortgages will default at once, so all tranches will be wiped out at the same time, so it doesn’t make sense to call one tranch AAA and another junk. And it’s hard to estimate correlations when few people typically default on their mortgages. Recent experience suggests that correlation is near 0 most of the time, but near 1 when the economy is in a certain kind of recession; this is not helpful information. But in any case, you need to know the correlation if you hope to get any sense of how risky each tranche is. Since higher risk should yield higher return, you need to know the correlation to figure out what the yield on each tranche is.

A second, related problem with this sort of tranching is that it’s very sensitive to slight mis-estimation of the correlations. This is especially the case if you build new securities from a collection of CDOs, which are called “CDO-squared.” An excellent paper called “The Economics of Structured Finance” gives the clearest examples I’ve seen of this phenomenon. Bottom line: getting the correlations, or the individual default probabilities, just slightly wrong can drastically change the value of the security.

The people who assembled these complicated things are called “quants,” though Traders, Guns & Money and many other books make clear that complicated securities existed before quants did. So you’d think that Traders, Guns & Money would go easy on the quants. But no. Like a lot of books from the crisis, Satyajit Das likes to take cheap shots at the nerds hovering over their computers and their formulae. And like all the rest (I’m thinking, inter alia, of When Genius Failed, Roger Lowenstein’s depiction of the Long-Term Capital Management crisis), it misses the crucial question: maybe quantitative modeling is bad, but what’s the alternative? Does “going by gut feel” really have a better track record than using numbers?

Das’s own argument strongly suggests that the answer is no. Traders, Guns & Money is essentially a long litany of catastrophic explosions in the finance industry. Underlying all of them is the basic idea that you never destroy risk; you just shift it around. Or take the most recent mortgage meltdown. One problem seems to have been that the process went like this:

1. A bank issues a mortgage.
2. The bank immediately sells that mortgage to another company.
3. The company packages up many mortgages into tranched CDOs, as discussed.
4. The company constructs something called a Credit Default Swap (CDS) that’s sort of like, but importantly different from, an insurance policy. The CDS pays off if the mortgagee defaults. The company is now “hedged”: if they did the math right, they carry no risk at all — the insurance policy will cancel out any losses on the mortgages.
5. Lots of companies follow steps 1-4, so lots of CDOs and lots of CDSes go out.
6. CDOs and CDSes are profitable, so companies rush in to sell them, so banks are strongly encouraged to pump out mortgages as fast as they can. After all, they’re going to sell them right away, so they’ll hold no risk on their books but they’ll collect all the fees that go along with issuing mortgages.
7. Banks are supposed to identify good and bad credit risks; they’re the ones that are issuing the mortgages, after all. But what incentive do they have to identify those credit risks if they’ll be selling the mortgages just as soon as they can? They have no “skin in the game,” as the saying goes. So they start issuing mortgages to people who probably shouldn’t have them. They don’t tell this information to the CDO issuers; again, what incentive do they have to do so?
8. Mortgages start defaulting, and (to skip a bunch of steps) everything collapses.

Now the question for the class: which parts of 1-8 look to be the mathematicians’ fault? The mathematicians’ main nefarious role here, maybe, was to underestimate the default risk of a CDO. But they had nothing to do with the incentive structure that encouraged banks to issue junk mortgages. You can look through that list and find lots of failure points that have nothing to do with the geeks.

When it comes to doling out judgmentally wagging fingers, then, Traders, Guns & Money is on thin ice. Add in that Das is a remarkably self-serving author: whenever possible, he wants to convince you that he knew all along that finance was a bunch of hocus-pocus. He’s too cool for school, that Mr. Das, while all the rest of the industry are self-deluded assholes. The result is that Traders is an unsatisfying book that leaves me feeling icky. Its big strength is in describing, at a very detailed level, how various complicated securities work: swaps, swaptions, and the rest of the arsenal that we’ve become all too familiar with in the past couple years.

It was nice timing for me to move right from that to Diary of a Very Bad Year. The Anonymous Hedge-Fund Manager is everything that Satyajit Das is not. The HFM (as his interviewer at n+1 calls him) is erudite, calm, literary, and panoptic. He’s not stuck down in the muck of individual trades, although those are what he deals with day in and day out; instead he can take a broader view of the economy, and can identify when we should be scared and when we shouldn’t. He explains what commercial paper is, and why we should care when the CP market dries up.

He explains the contagious nature of financial crises, which is really the crucial detail to all of this. In earlier eras, the contagion was the sort of thing we see in It's a Wonderful Life: word gets around that a bank is failing, and people line up at the doors to claim their money before it all disappears. So the New Deal created the FDIC, which guarantees that your money will be there if you come calling for it. The certainty that it will be there, as J.K. Galbraith noted in Money: Whence It Came, Where It Went, assures that no one ever needs to run to the bank to check that it’s there. The modern version of banging on the bank’s doors is when there’s a run on an investment bank, which has nothing like the FDIC to insure it.

The HFM explains all of this with almost George Clooney levels of cool. He’s just too cool, too scholarly, too journalistic in his ability to explain complicated concepts to a lay audience. I have a hard time believing he exists; if he does, he needs to drop the anonymity and use his skills for the greater good. By the end of Diary of a Bad Year, we find that the HFM has retired from New York City to Austin with his fiancée, so he’s got time. He’s used that time recently to sketch out his economic plans for Ezra Klein, so maybe he has a future as an educator. (I’m still not convinced that he’s real, even after writing for Klein. It seems entirely plausible to me that the HFM is a clever synthesis of the n+1 writers themselves.)

If you’re interested in the mechanics of constructing derivatives, by all means pick up the Das book. But the fact that the country even bothered to obsess about the details of swaptions and inverse floaters is a sign of great moral rot. Better to talk with the HFM, who unlike Das can see the forest for the trees.