Thursday, November 6, 2008

Pink-Slipped

Aficionados of my previous finance blog (http://www.charleston.net/blogs/real_money) will be well aware that I’m not a fan of some of the massaging the government does with its economic statistics, especially seasonal adjustments. I would much rather have real numbers than imaginary ones, and let me take the seasonal factors into account for myself, thank you very much.

Today’s 443-point drop in the Dow Jones Industrial Average is being attributed mainly to very weak October retail sales and gloomy earnings reports and forecasts. All of which is logical. But the decline is being said to have occurred “despite a decline in jobless claims.”

Well, no.

It’s true that the Bureau of Labor Statistics reported today that initial claims for unemployment insurance benefits fell 4,000 in the week ended Nov. 1 from the previous week – on a seasonally adjusted basis. But on a real basis – that is, based on the actual number of filings with state employment agencies – initial filings rose 3 percent.

Here’s the real picture, and it isn’t pretty:



(Click to enlarge)

What the chart shows is total claims for unemployment insurance benefits (that is, initial claims plus continued claims) this year to date vs. last year and vs. the average for the same week for the previous four decades. As is pretty obvious, this year is looking awful. In the latest week, ended Oct. 25 (continued claims are reported a week behind initial claims for some reason), total claims amounted to 3.77 million, the highest number for that week since 1982 and 1.2 million, or 47 percent, higher than the same week last year.

Another way of looking at it: Through the week ended Nov. 1 this year, 16.1 million Americans had filed initial claims for unemployment insurance benefits, 3 million more than in the same period last year, a 23 percent increase. In other words, layoffs this year are running about a fourth higher than last year, which already wasn’t exactly a great year.

So it shouldn’t come as a total surprise that retail sales are down, or that corporate earnings in general are down. The bean-counters at those corporations have prettied up their income statements by cutting costs – i.e., jobs – and the result is that sales have also fallen because those job cuts have led to less buying power on the part of consumers. This is pretty typical of the downside of every economic cycle, but that doesn’t make it any less illogical and self-defeating, nor does it lessen the pain of those people who’ve been tossed out.

Have any of the billions upon billions of our dollars that have been shoveled out to Wall Street and Detroit done any good for the average American? Not yet, obviously.

Wednesday, November 5, 2008

Breakthrough

I haven't had a chance to explore the blogosphere today, so there may be a zillion people out there saying the same thing I'm about to say, but I thought it was worth mentioning:

The mainstream media - by which I mean all of the TV network news shows, the cable news stations and the newspapers I've seen - are making the lead on the election story the fact that Barack Obama is the first African American elected president of the United States.

That's certainly true, and it's also certainly noteworthy. But it's also a rather exclusionary and perhaps divisive way of stating what happened yesterday. So here's something else to think about: Barack Obama is the first person elected president of the United States whose ancestry is not solely or predominantly Northern European.

The vast majority of our presidents have been of English descent. Then there was Kennedy, who of course was Irish (as was Reagan), the Roosevelts (Dutch) and Eisenhower (German). But we've never had a president whose forebears hailed from any of the Southern European or Mediterranean countries (the only major-party nominee from that region that I know of was Michael Dukakis, who is second-generation Greek), let alone anywhere outside Europe.

In other words, throughout the history of this country, our image of what a U.S. president looks like has been a white (very white) male. But now, as the U.S. population grows more diverse, we've finally broken away from that stereotype. And given the power of the president as a symbolic figure, not only in public life but also in the psyches of individuals, that's a pretty momentous change - maybe the beginning of a complete reimagining of what this country is all about.

Monday, November 3, 2008

When Oilmen Ruled the World



As the saying goes, "One picture is worth a thousand words." This one might be worth several thousand (click to enlarge; in case it isn't clear, the light blue line is oil, the darker line is the Dow). What it shows is the cumulative daily percent change in the Dow Jones Industrial Average and the same calculation for New York Mercantile Exchange crude oil futures, from Jan. 22, 2001, through last Tuesday (the most recent date for which the U.S. Department of Energy could provide crude prices).

In other words, the chart shows what an equal investment in the Dow and in oil would have returned on any given day since then, up to last week. Obviously, except for the first three years, oil would have been a much better investment than the stock market. Even after the steep decline from last summer's all-time high (when oil was up a staggering 65 percent while the Dow was up a piddly 9 percent), it's still up 29 percent overall. As of Monday's close, the Dow is down 5.5 percent over the same period.

The significance of the starting date, of course, is that it was the first trading day after George W. Bush was sworn in as president.

The Good, the Bad and the Evil

One of the things that seems most apt to discourage people about religion is the problem of “theodicy,” or how to reconcile the idea of a good and just god with a world in which evil exists. One way people look at this question was expressed in the title of a bestselling book of a couple of decades ago: “Why Do Bad Things Happen to Good People?”

Part of the reason people and churches have such a hard time with this issue is that the question isn’t expressed very well; the terms are ill-defined. Part of the fault for that lies with fundamentalists of the Pat Robertson or Jerry Falwell stripe, who tell us, for example, that Hurricane Hugo was God’s way of punishing New Orleans for its stubborn immorality.

What that sort of claim fails to recognize is that there are two kinds of good, and two kinds of bad: practical and ethical. On a practical level, Hugo was very bad for New Orleans, but whether New Orleans’ prior behavior was ethically bad is a subject that’s open to debate.

Another example may serve to clarify the distinction: Somewhere in the cold, snowy forest, a wolf catches a rabbit and eats it. This is very good for the wolf, very bad for the rabbit, and for the same reason in both cases: because life is good; that is, to have life, to be alive, is good. So for the rabbit to lose its life is as bad as it gets, on a practical level, while for the wolf, eating the rabbit helps sustain its own life, so that’s good.

As a loose definition, let’s say a “practical good” is anything that produces, sustains or improves life for whatever living thing has this good, while a “practical bad” is anything that injures or otherwise causes suffering in or shortens the life of the living thing that has that.

Where the moral or ethical dimension enters the fray is in the question of intent. No rational observer, for example, would suggest that our wolf killed our rabbit purely with the intent to harm it. Rather, the wolf’s intent (as far as that word can apply to a four-legged mammal) was to get a meal by the only means available to it; harming the rabbit was its only option.

As for Hurricane Hugo, no rational person would claim that a hurricane is capable of forming an intention to target a particular coastal region. Less easily dismissed, perhaps, is the notion that God – who presumably is capable of forming an intention – conjured up this storm and used it to express his displeasure toward the ostensibly loose morals of the Big Easy.

Leaving that aside for the moment, however, we might look around to see who else is capable of forming intentions of a similar type, for good or ill. And that would be us, of course: human beings.

To summarize: Practical goods or ills can come about because of purely natural events or processes, but moral goods or ills come about only through the decisions and actions of human beings (and perhaps gods).

Ancient religious writings tend to refer willy-nilly to harmful things as “evil” or “ill” or the like, without distinguishing the accidental or practical from the intentional and immoral. To avoid confusion, I’ll use the words “bad” or “ill” to refer to harm caused by natural processes, broadly speaking (which can include some psychological and social processes), and the word “evil” to designate the deliberate or unconscionably reckless infliction of harm by entities capable of thinking.

Now we can break the question of theodicy down into two parts.

First, why would a good and just god create a world in which natural events or processes sometimes cause harm to living things?

The answer to that one is quite obvious: because no other kind of world can produce or support life. For example, an atmosphere that enables living things like those on Earth to breathe, and therefore to live, must be dynamic; if it were to cease moving and changing, it would rapidly become unbreathable. Similarly with the Earth’s waters: Stop them from flowing, and they would quickly become poisonous. To put it a bit crudely, the occasional hurricane or tornado or flood is the price we must pay for having life in the first place.

Many traditional religious or philosophical systems acknowledge this as fundamental to the nature of the cosmos: Hinduism, with its cycles of creation and destruction; Buddhism, with its key recognition of “impermanence” as the essential character of material existence; Greek philosophy, with Heraclitus’ famous teaching that “Nothing is constant save change” and the idea that all physical things are either coming to be or passing away; and of course Taoism, with its teaching of the interplay of yin and yang and its Book of Changes. But in systems that posit a deity who’s prone to fits of anger, we find an inexplicable belief that storms or whirlwinds or deluges are somehow unnatural, and are visited upon the world only to chastise a rebarbative humanity – a bizarre projection of moral concerns onto the purely practical.

Now for the second part of the question: Why would a good and just god create beings who can intentionally cause harm to other beings for no good reason; that is, who are capable of doing evil (as defined above)?

Let’s return to the wolf and rabbit I mentioned earlier. The reason the wolf’s killing of the rabbit contains no moral or ethical component, as I said, is because the wolf has no capacity to form a different intention: If the wolf wants to live, it must eat the occasional rabbit. It cannot choose not to harm the rabbit.

But now suppose a different sort of creature, one that can choose not to harm rabbits, even when it’s hungry; in other words, a creature that can choose to bestow something good (life) instead of bestowing something bad (the loss of life). Being capable of making that choice is what renders this creature a moral or ethical being; if the choice were taken away, if this creature were allowed only to do good, then it would be no more a moral being than the wolf.

So to answer the second question, if beings are to exist who can intentionally do good for other beings, then they also must have the ability to do evil, and the responsibility for choosing the one over the other is theirs, not God’s. Or as Alexander Solzhenitsyn put it, “The line between good and evil runs straight through the middle of each human heart.”

What I’m saying, in sum, is that as far as good and bad, or good and evil, are concerned, we can leave God out of the question, even if we want to credit him or her or it as First Cause: We exist because the cosmos is the kind of constantly moving, changing thing it is, and wishing it were otherwise would be to wish ourselves out of existence. What we should be wishing instead is that we and those around us would prefer to contribute to the good in each other’s lives instead of adding to each other's suffering; in other words, that we might approach life and our fellow beings with goodwill, not ill-will.

Ill-will, then, is about as purely evil as anything can be said to be. Conversely, pure goodwill – unselfishly wishing good for others, without seeking or expecting any sort of reward or payback, out of nothing but the love of humankind (that’s “philanthropos” in Greek) – is, as far as I can see, the highest good of which a human being is capable.