Picture yourself in England at the start of Queen Victoria’s reign. If you have some skills as a part of the growing middle class, things look better every day. That life comes in part from unskilled workers driven into the growing (and filthy) cities who are more productive than ever before. The great symbol of the improving standard of living greets you in the morning as a cup of this once luxury beverage, tea. It comes from China, traded under the barrel of the guns of the Royal Navy through the new colony of Hong Kong. The latest in technology, the Clipper Ship, brings it to you with great speed and makes it possible to run this enterprise at a distance. The sun never sets on the British Empire, and tea is both its greatest commodity and emblem of success.
Today, in the waning daze of the American Empire that isn’t an empire, things could hardly be different even as they are the same. Coffee is the beverage of choice for 54% in the US. It has always been the workingman’s drink, but it is moving more yupscale – even though 35% of us still drink it black (as it is meant to be, damnit). It is shipped from tropical, underdeveloped nations in unromantic cargo containers as the second most traded commodity in the world by value ($15B per year), behind only oil. The nations that produce it are rapidly urbanizing into filthy cities. The trade is managed over the internet by a cadre of traders and speculators.
History doesn’t repeat, but it rhymes like a street poet hitting a beat.
The big story of the last 20 years has been a tale of two worlds coming together. While the developed world experienced a decade of growth in the 1990s followed by stagnation and decline in the 2000s, the developing world saw nothing but growth. The two phenomena are related in the tremendous expansion of credit and general money supply over this time, and are now starting to come together. The developing world is feeling the pinch the same as the developed world.
When the summer livin’ is easy, I enjoy sitting out on the porch with a few tunes. Today’s lazing soundtrack was “Three Views of a Secret” by Jaco Pastorius as I went over some old posts to see if anything needed revisiting. And this piece from July 2011 popped out as a debate that is still raging – but with some resolution. It seemed to fit the tension that always builds in a Jaco piece.
Economists, as noted before, have widely divergent views about the economic situation and what should be done about it. But the experiments that have been running through various economies are teaching us all a little bit along the way as to who may be right. It’s worth revisiting.
Nate Silver has left the biz. The most celebrated political reporter in a long time jumped from the New York Times to become a sports reporter at ESPN. It’s not really a mystery, given Silver’s love for sports and outsider status at the fossilized Times. As Public Editor Margaret Sullivan put it, “A number of traditional and well-respected Times journalists disliked his work. … They were also tough on me for seeming to endorse what he wrote, since I was suggesting that it get more visibility.”
Not long ago that political reporters were more or less the top of the journalistic heap and sports writers were at the bottom. Silver’s new gig turns that upside down. It’s not a mystery given how much political writing is horserace driven and sports reporters have become the true celebrities of the biz. But there is much more to it than that. I believe Silver’s popularity brilliantly displays what journalism must be for a new generation.
Here is my obituary praising Silver’s career as a political journalist, written not as the end of Silver but as the end of good political reporting – for now.
What charges can be brought against the biggest rogue traders out there? The answer, apparently, is just about anything the SEC can get to stick. After being humiliated in the US Senate and severely beaten to the punch by an aggressive NY District Attorney, they’re ready for action. But they can be forgiven if the actual charge is a bit less than impressive – it comes with a lifetime ban on trading, if not a jail sentence.
It’s a start. It comes about 5 years too late and may be a bit short of a landmark conviction, but it appears that a cadre of prosecutors and regulators are getting serious about doing their jobs. Is it in time to save Wall Street?