It is remarkable to witness the revolutionary changes in information dissemination, just during my working lifetime as a publisher, from the Gutenberg era to the Internet era over the course of only a few decades. I remember attending a conference at the New York Public Library in 1965 about the urgent need to use permanent durable, acid-free paper in all new publications. The NYPL’s collection was rapidly deteriorating, particularly those books and periodicals that were printed on groundwood pulp paper, the same as used in newspapers, and the library was beginning to spend as much on preservation as it was on acquisitions. Microfilm and microfiche (particularly “ultrafiche”) as well as mainframe computers, were being cited as possible solutions to preserving information. At the same time photocopying was becoming ubiquitous and libraries looked upon that as a possible method of disseminating information through library systems.
Today’s ambitious projects – basically Google’s objective to digitize just about everything (more than 7 million books scanned thus far) – makes the related copyright issues I was concerned with at the time, particularly The Williams and Wilkins Supreme Court decision (http://en.wikipedia.org/wiki/Williams_&_Wilkins_Co._v._United_States) look like a trivial warm-up act. I wrote an essay for a special 1974 issue of Confrontation – The Great Copyright Debate on that case (below). Focused on the then relatively “new” technology of photocopying, it seems antiquated, but the fundamental issues of fair use and the extent to which the rights of individuals or corporate authors, the creators of the information, can be usurped by the informational needs of the majority are even more alive in today’s Internet world. One only needs to check out Google’s ambitious project to understand the far-reaching impact the digital world is having on how we access information as well as who “owns” the information. http://googleblog.blogspot.com/2008/10/new-chapter-for-google-book-search.html.
Copyright
A Publisher's Viewpoint
By Robert Hagelstein
Nothing stirs the emotions of the educational and publishing communities more today then the copyright issue. For decades a tacit agreement between librarians and publishers (the "Gentlemen's Agreement" of 1939) had successfully governed photocopying by libraries of copyrighted materials. But that agreement was established before the advent of widespread use of relatively inexpensive electrostatic copying equipment and audio-visual duplicating equipment. It also preceded exponential information growth, increasingly expensive research materials, and higher education for the masses.
These factors have resulted in the large-scale copying of copyrighted audio visual and printed works by libraries, with the approval of the courts to the dismay and general disapproval of publishers and authors. Congress will ultimately decide whether such copying will continue.
On February 16, 1972, the United States Court of Claims found that the federal government was liable for infringement of copyrights held by Williams and Wilkins, a medical publisher. For years the National Library of Medicine had systematically copied, upon the request of researchers connected with those institutions, parts of periodicals (in some cases, complete articles) published by Williams and Wilkins.
On November 27, 1973, the Court of Claims reversed its historic opinion. The Williams and Wilkins Company appealed the reversal to the Supreme Court. Recently, the Supreme Court decided to review the case.
The Supreme Court's decision will undoubtedly influence the copyright revision bill, which for years has been under consideration by Congress. As the Court of Claims stated in its reversal decision, "the truth is that this is now preeminently a problem for Congress: to decide the extent photocopying should be allowed, the questions of a compulsory license and the payments (if any) to the copyright owners, the system for collecting those payments (lump-sum, clearinghouse, etc.), the special status (if any) of scientific and educational needs."
The issue has divided publishers and librarians, creating an adversary position where traditionally there has been one of cooperation. Publishers feel that the Williams and Wilkins reversal demands that they oppose almost any kind of library photocopying, while librarians are reportedly considering the decision as a green light to proceed with wholesale copying.
Robert Wedgeworth, Executive Director of the American Library Association, referred in the May 1974 issue of American Libraries to the Williams and Wilkins reversal as one "of our most impressive triumphs of the century." A letter from a librarian to Library Journal (February 15, 1973) states that "publishers and librarians are in adversary positions ... No amount of discussion will bridge that gap ... If you think you are on the winning side, why offer to compromise?" Publishers have been equally vocal and adamant concerning their position.
Though rights have been aired, there has been little discussion of the need to find a compromise solution-such as a rule for the use of copying equipment, and a means of compensating authors and publishers.
The rhetoric has also obscured recognition of the dissemination of knowledge as a common goal shared by all serious publishers and librarians. This recognition cannot be achieved without understanding of each group's respective roles, and the implications of what the lack of a compromise solution means.
The librarian's role is fairly clear. However, the inside workings of a library-acquisition, cataloging, and circulation of library materials-are complex. One can fully appreciate why--especially in a large academic library-the idea of keeping track of photocopies for the purpose of paying royalties is abhorrent.
Publishers of materials normally acquired by academic libraries must have highly specialized knowledge and formidable financial resources. Making information available in a structured manner so that it can be easily used is not a simple task. To ensure the participation of private industry in such an endeavor, the potential for a reasonable profit must be evident.
The burgeoning costs of research materials may prompt some to question why private industry is needed to publish information and to produce information systems. The Government Printing Office in Washington is capable of handling this responsibility, and libraries, as protectors and purveyors of information, can also be publishers.
The preservation of a truly free society, however, requires a diversity of information sources and opinions. Uncontrolled copying of information without proper compensation to authors and publishers would ultimately reduce the sources of information. Conceivably, more and more publishing would, out of necessity, be taken over by the federal government. Hence, the Government Printing Office, already one of the world's largest publishers, would be encouraged to support and control all kinds of research and writing. Government control of the dissemination of information is not in the best interest of librarians, publishers, authors, or of the public.
To prevent such a trend, a copyright law is needed which protects the rights of authors and publishers as well as librarians, providing for a method of compensation for photocopying copyrighted materials.
If the Court of Claims reversal were upheld and backed by Congress, not all publications and publishers would be equally affected. It is important to make a distinction here between trade publishing and information publishing. Trade publishing is the publication of books intended for a general market of readers, usually reached through bookstore distribution. The product of information publishing, however, is highly specialized and is destined for a relatively limited audience, especially libraries. Included in this category are scholarly and professional journals, information banks on microfilm or computer tape, scientific, technical, professional, and scholarly monographs, and proceedings and symposiums.
Since information materials are exclusively published for educational or research uses, commercial information publishers depend mostly on the education market for financial support. Trade publishers generally derive much of their income from other sources such as the sale of book club, paperback or movie rights. Therefore, any attempt to justify unlimited library photocopying as "fair use" because it is for "educational purposes only" would deprive the information publisher of its sole potential income source.
Although some forms of trade publications may be subjected to photocopying, it is unlikely, even if photocopying were condoned, that a novel or a general historical work would be systematically photocopied. Most libraries want to buy original editions for their collections, anticipating heavy use. Bound printed copies generally last longer than photocopies, bound or unbound. Because trade works are printed in much larger quantities for broader audiences, an original copy would probably be far less expensive than a photocopy. Furthermore, this kind of book is meant to be read in its entirety and does not lend itself to being photocopied in part only.
The converse is true of the information publication, which is especially structured so that it can be used in part. Because the audience for such a product is comparatively limited, unit costs and retail prices are higher; a photocopy, therefore, may indeed be far less expensive than an original copy.
Although the journal that you are reading is not an "information" publication per se, it can be grouped here because it is intended for a limited literary audience. Any kind of publication has certain fixed costs such as typesetting and overhead which are unaffected by the number of copies printed and sold. Confrontation may have cost $10 per page to typeset, yet you or your library may have paid only a few cents per page for it. If Confrontation were to become a casualty of uncontrolled photocopying with a resulting fifty percent circulation drop, that $10 per page would have to be absorbed by half the number of copies. Hence, the price would have to be raised. Photocopies would become less expensive in relationship to the escalating retail price. One can see why certain kinds of publications could become obsolete or prohibitively expensive.
An upholding of the Williams and Wilkins reversal by the Supreme Court and Congress could also indirectly encourage the growth of the cooperative library movement and photocopying of interlibrary loan material. The cooperative library system is a necessary means of dealing with information growth, and interlibrary loans by mail give wider access to little used materials. With photocopying equipment, however, one library could become a duplicator or a "publisher" of materials for another. Cooperative libraries could become publishing centers.
In 1949 ten universities formed a cooperative, which has grown to include seventy-eight institutions in a nationwide system called Center for Research Libraries. Two years ago the Center for Research Libraries received a $450,000 five-year grant from the Carnegie Corporation of New York to develop a national lending library of journals. If copying without restriction is allowed to persist, it is not impossible to imagine that someday the Center could be handling the publisher's traditional printing and distribution functions, purchasing the only copy of each journal issued by each publisher. Of course, the cost of each single copy to the Center would be the publisher's typesetting and overhead costs with a fair royalty for the author, plus a profit margin for the commercial publisher.
Another major cooperative was announced by the Research Libraries Group, which includes the New York Public Library, Columbia University, Yale University, and Harvard University. Joseph Rosenthal, who did the feasibility study on the group, although stating that he thought that publisher's sales loss would be "insignificant," did admit that publications that are "marginally economic will die out," and that those remaining would be more expensive should uncontrolled photocopying be allowed. The April 15, 1974 issue of Publishers Weekly states that "it has been widely reported that the consortium is taking the Court of Claims decision in that photocopying case as a go-ahead signal for wholesale copying."
Obviously, that is not to argue against cooperative library systems. They perform valuable services for smaller institutions, which would otherwise be deprived of access to library collections that only the largest universities can afford. However, by photocopying original materials instead of acquiring them, a library cooperative could compete with a private publisher, reprinting that publisher's materials. To discourage such activity and to compensate the creator of the information, publishers and authors should be in a position to grant reproduction rights and to collect royalties.
There is no simple solution to the problem; the endless discussion on copyright revision in Congress during these past few years attests to that fact. One criteria has frequently been applied to photocopying and possible copyright infringement: if photocopying saves the researcher the trouble of transcribing by hand, there should be no need for him to seek the copyright owner's permission (if such copying is not done for publication purposes). Copying should be prohibited, however, if it is done to enable the user to avoid purchasing the work. The former is an example of "fair use," the latter is not.
In 1968 the National Library of Medicine made 120,000 copies of journal articles, which amounted to about 1,200,000 pages. In 1970 the National Institute of Health made 86,000 copies from medical and scientific journals totaling 930,000 pages. This is what the United States Court of Claims had condoned.
Chief Judge Cowen stated in his dissenting opinion in the Williams and Wilkins reversal that "what we have before us is a case of wholesale, machine copying and distribution of copyrighted material by defendant's libraries on a scale so vast that it dwarfs the output of many small publishing companies… [the] defendant's photocopying ... meets none of the criteria for 'fair use…' While the library may look at the giving of a photocopy as a substitute for a loan, the user and would-be purchaser gets an exact copy of the original article which is a substitute for a purchased copy ... [they] are intended to be substitutes for, and serve the same purpose as the original articles; and serve to diminish plaintiffs potential market for the original articles ... "
A problem which has blocked a compromise solution --- one that has partially vindicated the libraries' position --- is the complex logistics of seeking permissions and processing payments for copying. It would be an overwhelming burden for each library to attempt to deal with each publisher's rights and permissions department. Also, keeping track of the exact number of copies and specific pages is a nearly impossible administrative task, especially when copying is done on a large scale.
It has been suggested that a central clearinghouse be established for processing permissions and payments for photocopying activities. This still could leave a complex bookkeeping function for libraries. Perhaps a more viable solution would be the establishment of an escalating pricing structure. There would be two prices for an order of the same book; the choice of price would be determined by the purchaser's option of photocopy rights. A lower price would be set for libraries and individuals who do not wish the right to photoduplicate the purchased book; a higher price would obtain for libraries which want the right to photocopy the work in whole or in part for their potential users. This latter price would be derived from a formula based on the number of potential users multiplied by the regular list price. (The number of potential users can be arrived at by using student enrollment if an academic library; library cardholders if a public library; or even the size of the library budget.) A cooperative library system would have to consider the multiple institutions it serves.
Representatives of the major library and publishing associations should be able to work out a fair and equitable formula. There is some precedent for such a system. One publisher has sold indexes to certain periodicals, basing the price on the number of periodicals held in the purchaser's collection, or on the library's periodicals budget.
Publishers and libraries must seek compromise solutions and make appropriate recommendations to Congress. If inflationary pressures continue to mount and orders for materials being copied remain static or begin to wane, the retail prices of these publications will undoubtedly rise. Those which are marginal will come under even greater pressure as prices rise. Even a slight loss of orders could condemn a host of journals, symposiums, and technical and reference works to extinction. As these information sources are smothered, pressures for government intercession would mount. Education would lose more than it gained.
The information explosion is indeed a reality. Modern techniques of storing and disseminating this information --- computers, microfilm, and photocopying equipment --- are necessary. Suitable copyright protection and appropriate licensing arrangements would ensure an adequate supply of information for a free society with growing information needs.
Saturday, December 13, 2008
Wednesday, December 10, 2008
Anecdotal Headline Annotations
If I was handed a copy of today’s Wall Street Journal only a couple of years ago, I would have thought the headlines were a forecast of an ethical and economic Armageddon. How otherwise does one interpret the following captions, from just one day’s newspaper?
Governor Jailed in Alleged Crime Spree
In Illinois, Blagojevich Is Accused of Seeking to Sell Obama’s Senate Seat; Five-Year Corruption Probe
AIG Faces $10 Billion In Losses On Trades
The Stock Picker’s Defeat
The Fallen; Bill Miller. The declining fortunes of leading business figures. Second in a series.
Hard Times for Parmigiano Makers Have Italy Ponying Up the Cheddar
Government Tries a Bailout, ‘Just as There Was for Banks,’ to Help Struggling Producers
Fannie, Freddie Executives Knew of Risks
Restaurant Jobs, Like Tips, Shrink
Big US Employer Traditionally Has Served as a Fallback for Jobless, Immigrants
Panel to Criticize Handling of Bailout
Specifics of Stimulus Take Shape
Democratic Leaders Resist Growing Push for a Package Larger Than $500 Billion
Rangel’s Problems Dog Democrats
Pressure Mounts on Merkel for Bigger Fiscal Boost
Drop in Japan Tool Orders Exposes Global Spending Cutbacks
Developing Countries Feel Slump
Auto Bailout Moves Closer; Senate Battle Next Hurdle
China Urges Its Airlines to Curb Plane Orders
Pirate Attacks Keep Law Firm Buzzing
Sony to Cut 8,000 Jobs, Close Factories
Electronics Giant’s Turnaround Effort Undermined by Slumping Demand, Holiday Discounts
Resorts Feel Chill From Recession
Businesses and Consumers Curb Travel Plans; ‘AIG Effect’ Helps Create New Tone
GM Sees Sales Plunge in Brazil
NFL to Cut Jobs in Face of Recession
New York Times Holds Talks With Lenders
Safety Trumps Yield in Bill Sales
Investors Scoop Up 0% Short-Term Notes
Fed Weighs Selling Own Line Of Debt
Securities Firms Claw Back at Failed Bets
Some Commodities Investors Find Another Way to Lose Money
Reddy Ice Executives Gain On Prearranged Trading Plans
Tycoon’s Fall Is a Warning for Europe
Sanahuja Patriarch Loses Control of Metrovacesa; the Perils of Heavy Debt
Families Cut Back on Day Care As Costs – and Worries – Rise
These headlines are pretty much in order as they appear and although they are selective, there are no offsetting, positive ones. Perhaps that is merely a tendency towards yellow journalism to sell papers. But no wonder we all live in a state of anxiety without any real explanation as to how we have arrived at this point (although many commentators are adept to spinning plausible stories with the advantage of hindsight) and, certainly, without understanding how the forces behind these stories might play out in the future.
Governor Jailed in Alleged Crime Spree
In Illinois, Blagojevich Is Accused of Seeking to Sell Obama’s Senate Seat; Five-Year Corruption Probe
AIG Faces $10 Billion In Losses On Trades
The Stock Picker’s Defeat
The Fallen; Bill Miller. The declining fortunes of leading business figures. Second in a series.
Hard Times for Parmigiano Makers Have Italy Ponying Up the Cheddar
Government Tries a Bailout, ‘Just as There Was for Banks,’ to Help Struggling Producers
Fannie, Freddie Executives Knew of Risks
Restaurant Jobs, Like Tips, Shrink
Big US Employer Traditionally Has Served as a Fallback for Jobless, Immigrants
Panel to Criticize Handling of Bailout
Specifics of Stimulus Take Shape
Democratic Leaders Resist Growing Push for a Package Larger Than $500 Billion
Rangel’s Problems Dog Democrats
Pressure Mounts on Merkel for Bigger Fiscal Boost
Drop in Japan Tool Orders Exposes Global Spending Cutbacks
Developing Countries Feel Slump
Auto Bailout Moves Closer; Senate Battle Next Hurdle
China Urges Its Airlines to Curb Plane Orders
Pirate Attacks Keep Law Firm Buzzing
Sony to Cut 8,000 Jobs, Close Factories
Electronics Giant’s Turnaround Effort Undermined by Slumping Demand, Holiday Discounts
Resorts Feel Chill From Recession
Businesses and Consumers Curb Travel Plans; ‘AIG Effect’ Helps Create New Tone
GM Sees Sales Plunge in Brazil
NFL to Cut Jobs in Face of Recession
New York Times Holds Talks With Lenders
Safety Trumps Yield in Bill Sales
Investors Scoop Up 0% Short-Term Notes
Fed Weighs Selling Own Line Of Debt
Securities Firms Claw Back at Failed Bets
Some Commodities Investors Find Another Way to Lose Money
Reddy Ice Executives Gain On Prearranged Trading Plans
Tycoon’s Fall Is a Warning for Europe
Sanahuja Patriarch Loses Control of Metrovacesa; the Perils of Heavy Debt
Families Cut Back on Day Care As Costs – and Worries – Rise
These headlines are pretty much in order as they appear and although they are selective, there are no offsetting, positive ones. Perhaps that is merely a tendency towards yellow journalism to sell papers. But no wonder we all live in a state of anxiety without any real explanation as to how we have arrived at this point (although many commentators are adept to spinning plausible stories with the advantage of hindsight) and, certainly, without understanding how the forces behind these stories might play out in the future.
Wednesday, December 3, 2008
The Press is the Enemy
Amazing to read some of the latest Nixon tapes, particularly his comments on the media and academics, a leitmotif of the 2008 campaign, as Republicans condemned the media and intellectual conservatives deserted the Party.
"Never forget," Nixon tells national security adviser Henry Kissinger in a taped 1972 Oval Office conversation, "The press is the enemy. The establishment is the enemy. The professors are the enemy. Professors are the enemy," he repeated. "Write that on a blackboard 100 times and never forget it."
Here is Sarah Palin’s response to Katie Couric’s question “Do you think the coverage of you has been sexist?”
No, I don't. I mean, I know that there--it's obvious there's some double-standards here, you know, in terms of what the media has been doing, but I think that's more--I think more attributable to just the media elite, the Washington elite, not knowing who I am and just asking a whole lot of questions and not so much based on gender though, but based on just the fact that I'm not part of the Washington herd.
"Never forget," Nixon tells national security adviser Henry Kissinger in a taped 1972 Oval Office conversation, "The press is the enemy. The establishment is the enemy. The professors are the enemy. Professors are the enemy," he repeated. "Write that on a blackboard 100 times and never forget it."
Here is Sarah Palin’s response to Katie Couric’s question “Do you think the coverage of you has been sexist?”
No, I don't. I mean, I know that there--it's obvious there's some double-standards here, you know, in terms of what the media has been doing, but I think that's more--I think more attributable to just the media elite, the Washington elite, not knowing who I am and just asking a whole lot of questions and not so much based on gender though, but based on just the fact that I'm not part of the Washington herd.
Wednesday, November 26, 2008
Coming to America
It took a local concert to briefly snap me out of my funk.
We live near a local theatre, the Eissey Campus Theatre, of the Palm Beach Community College. Over the years we’ve seen some wonderful performers and concerts there, subscribing to series featuring The Florida Sunshine Pops, a 65 piece orchestra under the direction of the venerable Richard Hayman who at the age of 18 started as a harmonica virtuoso in the Harmonica Rascals and became a leading arranger and conductor. And he is still conducting an orchestra at the age of 88!
The series always includes some of the finest singers – light opera and Broadway voices – and the genre is generally the Great American Songbook, my favorite. http://lacunaemusing.blogspot.com/2008/01/great-american-songbook.html
The first concert of the season, last night, was Coming to America -- Celebrating The American People, Armed Forces and the individuals who chose America. It was a night filled with memorable patriotic songs and marches. One of the very talented singers was Teri Hansen, a soprano, who has that something extra for the stage – a great presence, a performer who gives her all to an appreciative audience. http://www.terihansen.net/index.htm. One of her numbers was a rousing rendition of Boogie Woogie Bugle Boy of Company B and during the orchestral interlude she boogied down to the front of the stage and grabbed me out of my seat and we did a Jitterbug, one of the two dances I’ve mastered (the other equally complicated one being the Twist). I think Teri was a little surprised.
But the surprise was mine, walking to our car afterwards, remarking to Ann that the night had a special meaning to me because the outcome of the election made the patriotic theme all the more poignant. Where else but in the United States of America can a Barack Obama rise to the highest office? I wrote an open letter to the then Senator Obama about my hopes last May: http://lacunaemusing.blogspot.com/2008/05/open-letter-to-senator-obama.html.
The greatness of this nation is its ability to constantly reinvent itself. I wonder what Washington, Adams, Jefferson, and Franklin would think of their masterpiece that has managed to survive wars, both internal and external, slavery and reconstruction, depression, assassinations, and the constant ebb and flow of the political tides and, now, more than 200 years later, faces an epic economic crisis. Looking back at some of my prior postings, I lost sight of this underlying strength, our best hope of avoiding the fate of other great nations throughout history. It took a refrain from the Boogie Woogie Bugle Boy of Company B to remind me of our capacity to rise to such challenges.
We live near a local theatre, the Eissey Campus Theatre, of the Palm Beach Community College. Over the years we’ve seen some wonderful performers and concerts there, subscribing to series featuring The Florida Sunshine Pops, a 65 piece orchestra under the direction of the venerable Richard Hayman who at the age of 18 started as a harmonica virtuoso in the Harmonica Rascals and became a leading arranger and conductor. And he is still conducting an orchestra at the age of 88!
The series always includes some of the finest singers – light opera and Broadway voices – and the genre is generally the Great American Songbook, my favorite. http://lacunaemusing.blogspot.com/2008/01/great-american-songbook.html
The first concert of the season, last night, was Coming to America -- Celebrating The American People, Armed Forces and the individuals who chose America. It was a night filled with memorable patriotic songs and marches. One of the very talented singers was Teri Hansen, a soprano, who has that something extra for the stage – a great presence, a performer who gives her all to an appreciative audience. http://www.terihansen.net/index.htm. One of her numbers was a rousing rendition of Boogie Woogie Bugle Boy of Company B and during the orchestral interlude she boogied down to the front of the stage and grabbed me out of my seat and we did a Jitterbug, one of the two dances I’ve mastered (the other equally complicated one being the Twist). I think Teri was a little surprised.
But the surprise was mine, walking to our car afterwards, remarking to Ann that the night had a special meaning to me because the outcome of the election made the patriotic theme all the more poignant. Where else but in the United States of America can a Barack Obama rise to the highest office? I wrote an open letter to the then Senator Obama about my hopes last May: http://lacunaemusing.blogspot.com/2008/05/open-letter-to-senator-obama.html.
The greatness of this nation is its ability to constantly reinvent itself. I wonder what Washington, Adams, Jefferson, and Franklin would think of their masterpiece that has managed to survive wars, both internal and external, slavery and reconstruction, depression, assassinations, and the constant ebb and flow of the political tides and, now, more than 200 years later, faces an epic economic crisis. Looking back at some of my prior postings, I lost sight of this underlying strength, our best hope of avoiding the fate of other great nations throughout history. It took a refrain from the Boogie Woogie Bugle Boy of Company B to remind me of our capacity to rise to such challenges.
Thursday, November 20, 2008
It’s Different This Time
Those are the famous words that have been used to explain any stock market anomaly. They were used in the dot.com era as the NASDAQ approached 5,000 to justify the heady prices at the time, or when oil was leaping towards $150 per barrel. But any parabolic rise or fall must regress to the mean. Or so it’s been in my lifetime
I need not go into detail here concerning all the dominant economic undercurrents of today, the toxic assets the TARP program was thought to be resolving, the government’s support of the Bear Stearns takeover, the collapse of Lehman Brothers, the bailouts of AIG, Freddie and Fannie, the discussions of bailing out Detroit’s automakers, the reverberations in the financial markets throughout the globe. However, as a child of depression era parents, I guess subliminally I’ve always feared the unspeakable: a deflationary spiral with no bottom in sight. And somehow if does FEEL different this time.
Having lived through several economic cycles and piloting a business through them, the implosion of equity values in the 70’s, the subsequent threat of hyperinflation, the high interest rates of the early 80’s, the collapse of real estate in the 90’s, the dot.com run-up on the heals of dire Y2K warnings, and finally the easy money that led to this decade’s real estate run up and the interconnected toxic financial instruments engineered by financial institutions and hedge funds to make them rich, leaving someone else (us) to hold the proverbial bag. But as a society we were willing participants, eagerly spending what we didn’t have; let future generations do the worrying! Our entire culture cried out buy, why postpone what you can have today, so we bought McMansions, Hummers, luxury goods, vacations, whatever our consumptive libidos desired, using our homes and credit cards as piggy banks.
And that is why this economic era does feel different than prior ones, at least to me, someone who has lived through these various cycles but only in the shadow of the Great Depression. We are just beginning to embark on the convulsive purging of these excesses. How it will end is anyone’s guess. Even Secretary of the Treasury, Hank Paulson, looks like a deer in the headlights, changing his mind about using the $700 billion to buy bad mortgage debt securities (the very $$ Congress had to immediately authorize as financial Armageddon was imminent), probably because he knows it’s not enough. And humbled Alan Greenspan, looking completely bewildered in his testimony to Congress in late October: “I made a mistake in presuming that the self-interests of organizations, specifically banks, were such as that they were best capable of protecting their own shareholders and their equity in the firms. Free markets did break down, and I think that, as I said, that shocked me. I still don't fully understand how it happened or why it happened.”
We had long placed Mr. Greenspan on a pedestal, trying to decipher “Greenspeak,” looking for little nuggets of wisdom to reassure ourselves that this time it was different as he ratcheted down interest rates for our borrowing pleasure. Now he is clearly admitting he has no clue why the present economic catastrophe has devolved. At least he can afford to admit his misjudgments, as he is no longer the Chairman of the Federal Reserve. But we now listen to Mr. Bernanke and Mr. Paulson, desperately clinging to the hope THEY know what they’re talking about. The only certainty now is nothing is predictable. It’s different this time.
I need not go into detail here concerning all the dominant economic undercurrents of today, the toxic assets the TARP program was thought to be resolving, the government’s support of the Bear Stearns takeover, the collapse of Lehman Brothers, the bailouts of AIG, Freddie and Fannie, the discussions of bailing out Detroit’s automakers, the reverberations in the financial markets throughout the globe. However, as a child of depression era parents, I guess subliminally I’ve always feared the unspeakable: a deflationary spiral with no bottom in sight. And somehow if does FEEL different this time.
Having lived through several economic cycles and piloting a business through them, the implosion of equity values in the 70’s, the subsequent threat of hyperinflation, the high interest rates of the early 80’s, the collapse of real estate in the 90’s, the dot.com run-up on the heals of dire Y2K warnings, and finally the easy money that led to this decade’s real estate run up and the interconnected toxic financial instruments engineered by financial institutions and hedge funds to make them rich, leaving someone else (us) to hold the proverbial bag. But as a society we were willing participants, eagerly spending what we didn’t have; let future generations do the worrying! Our entire culture cried out buy, why postpone what you can have today, so we bought McMansions, Hummers, luxury goods, vacations, whatever our consumptive libidos desired, using our homes and credit cards as piggy banks.
And that is why this economic era does feel different than prior ones, at least to me, someone who has lived through these various cycles but only in the shadow of the Great Depression. We are just beginning to embark on the convulsive purging of these excesses. How it will end is anyone’s guess. Even Secretary of the Treasury, Hank Paulson, looks like a deer in the headlights, changing his mind about using the $700 billion to buy bad mortgage debt securities (the very $$ Congress had to immediately authorize as financial Armageddon was imminent), probably because he knows it’s not enough. And humbled Alan Greenspan, looking completely bewildered in his testimony to Congress in late October: “I made a mistake in presuming that the self-interests of organizations, specifically banks, were such as that they were best capable of protecting their own shareholders and their equity in the firms. Free markets did break down, and I think that, as I said, that shocked me. I still don't fully understand how it happened or why it happened.”
We had long placed Mr. Greenspan on a pedestal, trying to decipher “Greenspeak,” looking for little nuggets of wisdom to reassure ourselves that this time it was different as he ratcheted down interest rates for our borrowing pleasure. Now he is clearly admitting he has no clue why the present economic catastrophe has devolved. At least he can afford to admit his misjudgments, as he is no longer the Chairman of the Federal Reserve. But we now listen to Mr. Bernanke and Mr. Paulson, desperately clinging to the hope THEY know what they’re talking about. The only certainty now is nothing is predictable. It’s different this time.
Wednesday, November 12, 2008
Ron's Vietnam Trip
I met Ron in 1985 when my company acquired a publishing company of which he was the editor-in-chief. During the due diligence he looked me in the eye, shook my hand, and introduced himself. He didn’t fit the stereotype of a scholarly/professional editor and later I learned why. Although he had the requisite academic training as a graduate of William and Mary and was a student of military history, particularly the Civil War period, he was also an ex-marine, and served in the Vietnam conflict. He was extremely personable, while his demeanor was all business.
In addition to being colleagues, we became friends, and later in his career he left our company to lead the Naval Institute Press, an ideal position that combined his professional expertise as well as his passion for military history. He ultimately retired from that job and we remain friends to this day.
During company picnics Ron and I would “throw the pill” around before the requisite softball game. We both played baseball in our youths, we’re both lefties, and, we would like to think we can still throw a ball as we did in the “old days.” But now in retirement, he has been working on golf and he is a very good golfer. So good in fact, he was asked by a national golf magazine to serve as a consultant for a story about golf in Vietnam today as seen through the eyes of a U.S. veteran going back there to play. The Vietnam tourist agency wants to try to promote golf so they and the magazine supported the trip.
Ron accepted and recently returned from the assignment. Barbara, his significant other, met him there for part of the trip. I had sent Ron pictures of our recent southwest tour, which I wrote about in a prior blog entry. This is how Ron responded. It is such a remarkable, thoughtful document, with interesting observations about his trip to Vietnam, how America is now perceived there, that I include it below. Consider it a “guest blog entry:”
Enjoyed the photos of your trip. Your pictures are so well composed. The vibrant colors and magnificent landscapes/architecture of the SW were so alive. Lots of real postcards in the group. They brought back memories as my first job in publishing was a college traveler for Prentice-Hall based in Albuquerque. I drove most of the highways in NM, Eastern AZ, and West Texas. It was a fun job because out there and in those times professors were happy to talk to a salesman about books. They felt kind of cut off from mainstream academic American; and in their eyes, I represented the intellectual East. While this was certainly a misperception of me, I had great access to profs and sold lots of books.
I’m decompressing from my Vietnam trip. Vietnam is zooming down the market economy road (on their 80cc Hondas) with not a commie in sight! I had a wonderful trip on a number of levels (emotional, informational, etc.) and the golf courses I played were fabulous. While in Vietnam I celebrated my 65th in the same place I turned 25. Nice symmetry. Didn’t even think about Medicare! The magazine put me up in the most fabulous hotels (the Caravelle in Saigon where the journalists watched the fall of Saigon in ’75 from the rooftop bar, a former colonial French mansion/Emperor Bao Dai retreat in the 5,000 foot cool, alpine climate of Dalat, and a beautiful new beachside resort at the site of our old China Beach in country R&R spot near DaNang. Here I had a spectacular cottage right on the water. So there I was in a country where thousands of Americans died and hundreds of thousands of Vietnamese were killed; and, 40 years after the war, I’m playing golf!! And the Vietnamese like us and surprisingly bear no ill will towards Americans! So what was it all about? Nothing! Iraq, of course, will be the same. Those who believe the surge is working (or even ultimately relevant to the situation) need to review the history of the Vietnam War. We “surged” from 150,000 troops (same as Iraq) to 500,000 and it ultimately did no good. How quickly they forget.
I was able to spend some time in I Corps (around DaNang and Hue) and visit the places where I served. I even sat down in a village and talked with a former Viet Cong. His life has been tough because of Agent Orange but he was very polite. Once we determined that we were fighting each other in the same area at exactly the same time (Tet), a sort of bond developed between us. Over 70% of the population of Vietnam was born after the war and have no memory of it – only old farts like me and the VC! After the golf, Barbara came over and we spent a week touring places I never saw during the war e.g. Saigon, Hanoi, etc. Hanoi was terrific with lots of French Colonial architecture and large, beautiful lakes scattered throughout the city. Barbara and I ambled all through the old quarter of the city. We also took in a number of interesting and surprisingly good museums. Throughout the Barbara/Ron portion of the trip, we stayed in wonderful colonial hotels and ate in great restaurants with terrific food. You would have liked the hotel bars. In the evening they always had a pianist (accompanied variously by a saxophone, violin, singer) who played haunting “love and life” numbers from the 40s and 50s. The French influence in music still survives as many tunes were of the melancholy Charles Aznavour café type. It was quite nice, relaxing, and romantic.
In addition to being colleagues, we became friends, and later in his career he left our company to lead the Naval Institute Press, an ideal position that combined his professional expertise as well as his passion for military history. He ultimately retired from that job and we remain friends to this day.
During company picnics Ron and I would “throw the pill” around before the requisite softball game. We both played baseball in our youths, we’re both lefties, and, we would like to think we can still throw a ball as we did in the “old days.” But now in retirement, he has been working on golf and he is a very good golfer. So good in fact, he was asked by a national golf magazine to serve as a consultant for a story about golf in Vietnam today as seen through the eyes of a U.S. veteran going back there to play. The Vietnam tourist agency wants to try to promote golf so they and the magazine supported the trip.
Ron accepted and recently returned from the assignment. Barbara, his significant other, met him there for part of the trip. I had sent Ron pictures of our recent southwest tour, which I wrote about in a prior blog entry. This is how Ron responded. It is such a remarkable, thoughtful document, with interesting observations about his trip to Vietnam, how America is now perceived there, that I include it below. Consider it a “guest blog entry:”
Enjoyed the photos of your trip. Your pictures are so well composed. The vibrant colors and magnificent landscapes/architecture of the SW were so alive. Lots of real postcards in the group. They brought back memories as my first job in publishing was a college traveler for Prentice-Hall based in Albuquerque. I drove most of the highways in NM, Eastern AZ, and West Texas. It was a fun job because out there and in those times professors were happy to talk to a salesman about books. They felt kind of cut off from mainstream academic American; and in their eyes, I represented the intellectual East. While this was certainly a misperception of me, I had great access to profs and sold lots of books.
I’m decompressing from my Vietnam trip. Vietnam is zooming down the market economy road (on their 80cc Hondas) with not a commie in sight! I had a wonderful trip on a number of levels (emotional, informational, etc.) and the golf courses I played were fabulous. While in Vietnam I celebrated my 65th in the same place I turned 25. Nice symmetry. Didn’t even think about Medicare! The magazine put me up in the most fabulous hotels (the Caravelle in Saigon where the journalists watched the fall of Saigon in ’75 from the rooftop bar, a former colonial French mansion/Emperor Bao Dai retreat in the 5,000 foot cool, alpine climate of Dalat, and a beautiful new beachside resort at the site of our old China Beach in country R&R spot near DaNang. Here I had a spectacular cottage right on the water. So there I was in a country where thousands of Americans died and hundreds of thousands of Vietnamese were killed; and, 40 years after the war, I’m playing golf!! And the Vietnamese like us and surprisingly bear no ill will towards Americans! So what was it all about? Nothing! Iraq, of course, will be the same. Those who believe the surge is working (or even ultimately relevant to the situation) need to review the history of the Vietnam War. We “surged” from 150,000 troops (same as Iraq) to 500,000 and it ultimately did no good. How quickly they forget.
I was able to spend some time in I Corps (around DaNang and Hue) and visit the places where I served. I even sat down in a village and talked with a former Viet Cong. His life has been tough because of Agent Orange but he was very polite. Once we determined that we were fighting each other in the same area at exactly the same time (Tet), a sort of bond developed between us. Over 70% of the population of Vietnam was born after the war and have no memory of it – only old farts like me and the VC! After the golf, Barbara came over and we spent a week touring places I never saw during the war e.g. Saigon, Hanoi, etc. Hanoi was terrific with lots of French Colonial architecture and large, beautiful lakes scattered throughout the city. Barbara and I ambled all through the old quarter of the city. We also took in a number of interesting and surprisingly good museums. Throughout the Barbara/Ron portion of the trip, we stayed in wonderful colonial hotels and ate in great restaurants with terrific food. You would have liked the hotel bars. In the evening they always had a pianist (accompanied variously by a saxophone, violin, singer) who played haunting “love and life” numbers from the 40s and 50s. The French influence in music still survives as many tunes were of the melancholy Charles Aznavour café type. It was quite nice, relaxing, and romantic.
PS Attached is a picture of the old convoy commander at the top of the Hai Van pass on the road from DaNang to Hue – a route I ran many times. Notice the old French fortifications in the background. We always felt briefly safe when we got to this spot as it was manned by a platoon of marines.
Wednesday, November 5, 2008
President-Elect Obama
We were up most of the night watching the election returns, hoping on the one hand, but afraid of the “Bradley effect” on the other, and almost resigned to that possibility. When the election was called at 11 o’clock, we let our guard down and had a joyous celebration of hugs, high fives and kisses with our son Jonathan who is visiting. It was a time for some tears alongside our brimming happiness.
Ann said she wishes she were thirty years younger just to see what the real outcome of this election might be. But we’ve already lived through some of the most tumultuous years in American history with perhaps only the Revolutionary and the Civil War eras rivaling the events our lifetimes: WWII, the Cold War, the Civil Rights movement, Kennedy’s New Frontier and his assassination, the Vietnam War and its aftermath, the assassinations of Martin Luther King and Robert Kennedy, the ignominious resignation of Richard M. Nixon, the tearing down of the Berlin Wall, 9/11 and its aftermath including the uncalled-for war in Iraq, and finally the decline of our reputation abroad and our near economic bankruptcy.
I have no illusions that much will change in the near term, but at least we've set a new direction and I believe that is the main responsibility of a President, to establish a moral compass, define objectives, and rally the nation to participate in achieving them. No doubt this will require sacrifices and I think we’re finally prepared to make those.
What an historic night. It makes me think of how we felt when we watched Neil Armstrong walk on the moon -- it was with complete wonderment. To think our country has come this far. I wonder what our founding fathers would think of this election, a real validation of the ideals of our constitution (although it specifically postponed any action on slavery for at least the first twenty years of our young nation). However, like the Declaration of Independence, this election is also a statement to the rest of the world, something all Americans can take pride in, even with all the problems we must begin to address.
So we pass the baton to another generation, a generation that waged an incredible campaign – with the liberating technology of the Internet -- to achieve what I thought would not be possible in my lifetime, electing an African American to our nation’s highest office. Last May I wrote an “open letter” to Senator Obama, before he was officially designated the Democratic Party’s nominee. I still feel the same way: http://lacunaemusing.blogspot.com/2008/05/open-letter-to-senator-obama.html
One of the reasons I write this blog is to provide a personal, grassroots perspective on some of the major events of my lifetime. Last night was one of those moments.
Ann said she wishes she were thirty years younger just to see what the real outcome of this election might be. But we’ve already lived through some of the most tumultuous years in American history with perhaps only the Revolutionary and the Civil War eras rivaling the events our lifetimes: WWII, the Cold War, the Civil Rights movement, Kennedy’s New Frontier and his assassination, the Vietnam War and its aftermath, the assassinations of Martin Luther King and Robert Kennedy, the ignominious resignation of Richard M. Nixon, the tearing down of the Berlin Wall, 9/11 and its aftermath including the uncalled-for war in Iraq, and finally the decline of our reputation abroad and our near economic bankruptcy.
I have no illusions that much will change in the near term, but at least we've set a new direction and I believe that is the main responsibility of a President, to establish a moral compass, define objectives, and rally the nation to participate in achieving them. No doubt this will require sacrifices and I think we’re finally prepared to make those.
What an historic night. It makes me think of how we felt when we watched Neil Armstrong walk on the moon -- it was with complete wonderment. To think our country has come this far. I wonder what our founding fathers would think of this election, a real validation of the ideals of our constitution (although it specifically postponed any action on slavery for at least the first twenty years of our young nation). However, like the Declaration of Independence, this election is also a statement to the rest of the world, something all Americans can take pride in, even with all the problems we must begin to address.
So we pass the baton to another generation, a generation that waged an incredible campaign – with the liberating technology of the Internet -- to achieve what I thought would not be possible in my lifetime, electing an African American to our nation’s highest office. Last May I wrote an “open letter” to Senator Obama, before he was officially designated the Democratic Party’s nominee. I still feel the same way: http://lacunaemusing.blogspot.com/2008/05/open-letter-to-senator-obama.html
One of the reasons I write this blog is to provide a personal, grassroots perspective on some of the major events of my lifetime. Last night was one of those moments.
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