QE & Inequality

I believe that the policies we have undertaken have been meant to generate a robust recovery.1

Effective demand is dead in the water.2

Quantitative easing…is that, like, making math easier?3

Well, goodbye to all that.  Until the next time, Quantitative Easing.

For normal people with more interesting lives, I imagine articles headlined with the words “quantitative easing” prompt a mild degree of nausea and / or disinterest.  As for me, for the last six years4 I’ve found it hard to avoid reading pieces on the unparalleled series of unconventional monetary policies: QE 1, QE 2, Operation Twist, QE 3.  So much juicing of the financial markets, so much time I will never have back, so many unintended consequences nobody can foresee. (more…)

Entropy: The Defining Characteristic of Global Affairs

Expanding prosperity contributed to the popularity of the doctrine [of harmony of interests] in three different ways. It attenuated competition for markets among producers, since fresh markets were constantly available; it postponed the class issue, with its insistence on the primary importance of equitable distribution, by extending to members of the less prosperous classes some share in the general prosperity; and by creating a sense of confidence in present and future well-being, it encouraged men to believe that the world was ordered on so rational a plan as the natural harmony of interests.1

Politics are made up of two elements — utopia and reality — belonging to two different planes which can never meet. There is no greater barrier to clear political thinking than failure to distinguish between ideas, which are utopia, and institutions, which are reality.2

Stocks are near their all-time highs and show few signs of correcting anytime soon; debt markets appear frothy; the VIX is low—the capital markets are telling us that we’re living in “the best of all possible worlds.”3 Even TV commercials show us people dancing on their decks while telling us “the fun is back!”

But in the real world, for a while now I’ve been nagged by this feeling of entropy in global affairs; that order and institutions are giving way to chaos and ungovernability. (more…)

Vox on Millennials, Risk Aversion, Investing and Success in Life

OMG. Millennials are idiots. They put less than half of their savings in stocks. When they’re old, they’ll subsist on a cat food diet because they were terrible investors.

Reading this article on Vox.com raised my blood pressure and left me baffled/speechless.1 Conor Sen (@conorsen) asked me why, so I’ve pulled together some thoughts on why the piece was misleading.

Seven Ways a Vox.com Article Provided No Context

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Lagos: Reflections on the Epicenter of the Frontier Market Phenomenon

Nigeria is not a great country. It is one of the most disorderly nations in the world. It is one of the most corrupt, insensitive, inefficient places under the sun … It is dirty, callous, noisy, ostentatious, dishonest and vulgar. In short, it is among the most unpleasant places on earth!1

It’s dirty and an environmental nightmare, with piles of rubbish literally everywhere, and its natural resources have been stripped bare. Nothing works and everything is seriously dilapidated, the infrastructure is totally inadequate, there are frequent shortages of fuel, electricity and water, and vehicle traffic and human congestion are tremendous … It’s appalling and awful, fascinating and appealing, and funny and sad, all at the same time; Nigeria is that extreme … But if you’re up to the challenge, it’s one of the most exciting and engaging countries in the world and I have been treated with nothing but friendliness and helpfulness at all times.2

I would say that Ikoyi island is fine to wander but VI might be a bit dodge. I can only share the story of a [brewing company] employee who wandered home from a bar in VI drunk and, after a brief express kidnap, found himself deposited in the middle of the third mainland bridge wearing only his Y-front underpants and facing a long walk home …3

To say my expectations for Lagos, Nigeria were low would be an understatement. They were positively subterranean. Despite the intervening three decades since Chinua Achebe composed The Trouble with Nigeria—source of the opening quote to this post—virtually everyone I knew who had visited Nigeria believed it to be an accurate description of the country today, and they left me with the distinct impression that I (1) was an idiot; (2) had signed up for a miserable experience; and (3) may very well not make it home alive. I was half convinced I was going to be kidnapped by Boko Haram. (more…)

The Reckoning

I am unable to understand why a society that complains of unemployment should encourage and embrace every conceivable possibility of replacing human labor by mechanical devices.1

We are suffering, not from the rheumatics of old age, but from the growing-pains of over-rapid changes, from the painfulness of readjustment between one economic period and another…We are being afflicted with a new disease…namely, technological unemployment.2

I don’t understand what’s happening to my country.3

In my previous post, I mentioned how George Packer’s latest book The Unwinding evoked a visceral sense that the country’s political and economic trajectories are untenable, and that it was hard to avoid the conclusion that we’re heading toward A Reckoning.

Over the holiday, I found myself driving along U.S. Route 220 in Virginia, about an hour north of the hometown of Dean Price, one of the central characters of The Unwinding.  As I traveled that road, which I’d cruised down several times before, I was reminded of Packer’s chronicling of the decline of the textiles and tobacco industries in the Carolina Piedmont, and how in a very real way, America has been gutted. (more…)

Favorite Books of 2013

In light of the holiday season and year end, I thought I’d share the best books I read this year.  While most of these weren’t published in 2013—a number of them dutifully collected dust on bookshelves in no less than three apartments until they were summoned—the following eight books stand out as my favorites over the past 12 months. (more…)

Pope Francis’s Critique of Capitalism and the Quest for the Good Life

Raphael’s The School of Athens. Taken on a visit to the Apostolic Palace in the Vatican, 2004.

Last month, FT Alphaville’s Izabella Kaminska picked up a potent critique of free-market capitalism from Pope Francis’s first Apostolic Exhortation.1  I must confess, I’m not a regular reader of papal exhortations—indeed, papal pronouncements of any variety tend not to make my “to read” list2—but the snippets Kaminska selected gave me pause. (more…)