A Taxing Question

How rich is too rich? Actually, I published a book by that title almost twenty years ago and some of its ideas are as relevant today as it was then (How Rich Is Too Rich; Income and Wealth in America by Herbert Inhaber and Sidney Carroll: Praeger, 1992). Two points from that book stuck with me. First, there is the very descriptive opening chapter of looking at income distribution as an imaginary "sixty minute grand parade," tax payers being the marchers, grouped by their height which would be representative of their incomes, the first marchers having the lowest income and the last the highest, with "height" determined by the "average" taxable income being equal to the "average" height of an individual American. The "parade" in effect is an X/Y graph, the Y axis being the income (height), and the X axis being the minutes of the "parade." The first few minutes one sees no marchers even though we can hear some noise. These are people with negative height, those who report the loss of money in that taxable year. It isn't until about ten minutes into the parade that we see marchers between 10 and 24 inches in height and it isn't until 36 minutes we see the so called "average height" taxpayer march by. With about only 20 minutes left, heights begin to rise dramatically. With the last five minutes giants appear, people whose heads are so high we can hardly make out their faces without binoculars. The marchers in the very last minute of the parade are so tall we can only see their feet. These are people of accumulated, sometimes inherited, wealth and in the last few seconds the marchers are the size of sky scrapers. In effect, the parade shows a slowly rising gradient until the far right of the curve when it begins a parabolic rise and then shoots straight up off the graph.

While the numbers might have changed over the last twenty years, the concept has not. Probably, if anything, the "parade" has become even more dramatic, more parabolic, with a steeper rise at the end. And, those at the end of the parade pay now less as a percentage of their income to the government than at any time before.

To listen to the Tea Partiers, a roll back of taxes of the very wealthiest to pre-Bush rates, is an evil, evil thing. Just think of the trickle-down effect that would be lost to the little folk who stand in line for the crumbs falling from the tables of the fabulously wealthy. It is ironic that these dire warnings of the effects of a tax increase on the wealthy are carried into battle on banners hoisted by "Joe the Plumbers" -- it shows the power of the conservative media and the most virulent impact of the Internet. It just makes no sense that the people near the middle of the parade should become pawns for the people at the very end.

Actually, I think the converse is true: it is an evil thing for people who have benefitted from being able to accumulate wealth in the greatest of all capitalist democracies, not to give back more for that opportunity. The argument goes that asking these people to pay more will remove the incentive for them to work, and maybe if we're talking about 70 percent of one's income that might be true. But in 2000, people reporting AGIs of more than $1 million paid 28% of their income as taxes vs. 23% five years later. In 2005 there were 304,000 households reporting income of more than $1 million, more than a trillion dollars of income or $3.375 million per household. And mind you of those, there are a few at the very end of the "parade" with incomes that have so many zeros they would be hard to read. The latter are sports stars, entertainers, and, of course, very, very successful entrepreneurs. Are they going to work "less hard" by paying an additional five percent overall? That five percent would mean another $50 billion going to the US Treasury, at least a beginning to address the ongoing deficit. And, of course, if you look at the $250,00 level as the cut off as suggested by President Obama, there is much more to be gleaned, but given the midterm elections, that level is probably going to be raised if it is not eliminated altogether.

The alternatives that are occasionally pushed by the Tea crowd, such as a flat tax, is, in effect, a regressive tax, with the lower income people having to pay the same taxes on necessities as the wealthy, which just further splits the great economic divide in this country. A national sales tax does the same thing and as we are now so dependent on consumer spending, that could be the death knell for the economy. No, a progressive tax structure has been this country's basis for supporting it's national programs and we have been able to grow in spite of these supposed "disincentives" of higher taxes at a higher bracket.

No doubt the current tax structure is hopelessly and needlessly complicated and THAT is where the discussion should also be focused. There are so many loopholes, that a revised graduated tax structure would not have much teeth without addressing those as well. And then there is the issue of capital gains and dividends. We certainly want to encourage taxpayers to reinvest in our equity markets.

The other point I never forgot from that book was its commentary on the estate tax, arguing against the estate tax altogether, provided there was an alternative system of "estate dispersion." Rather than taxing one's estate at death, it suggested a tax-free dispersement up to a certain level per recipient (rather than per estate). For argument's sake, call that $1 million per recipient. Amounts exceeding that would begin to be taxed on some kind of graduated basis. Those would be life time totals, so if an individual receives money from different inheritances, they would be accumulated and taxed on that scale. "No longer would the estate tax system generate an American royalty -- those freed from the need ever to be economically productive. This alternative system would generate for all the incentive that most of us have in the outcome of our own economic lives. No longer would a large part of our national wealth be beyond responsive use."

Now, the incredibly wealthy could give a million dollars each to a thousand different people, all tax free (if those recipients also received no other inheritances in their lifetimes). The point is that those thousand people would put that capital to work, rather than vesting a billion dollars in one's immediate family who might decide to simply live off the income and pass it on to the next generation, and the next. Or he/she could still leave more to the immediate family, but it would be subject to taxation, perhaps substantial taxation on a graduated basis.

"Wealth great enough to entitle one to membership in the elite comes from two sources -- enormous earnings or inheritance. Prudent public policy should allow those, who, through individual ingenuity, talent, or luck, gain a fortune to use and enjoy it for life...but if these individuals have the power to transmit immense wealth to others after death...they can write the rules controlling this wealth, possibly many generations into the future. This breaks the chain of personal effort that is tightly bound, for most of us, to personal reward. Economic resources, controlled by rules set up by the dead, are denied to those who might well be more productive."

If the Republicans and Tea Partiers interpret their gains to mean they now have carte blanche to keep the Bush tax cuts for the highest wealth tier -- people who would not be hurt by some roll back to pre-Bush tax levels -- the result will only increase the deficit further. There would seem to be no upside to such an action; in effect it is a spending initiative something they claim to condemn. Failure to make tax reforms that lead to a more graduated income tax and closing loopholes, and not having a sensible inheritance tax also just further drives a stake between the haves and the have-nots.

On a related subject, the so called "wealth effect" the Federal Reserve is trying to engineer with its QE2, is still another factor favoring the haves. This is convincingly analyzed by my fellow blogger over at Fund My Mutual Fund in his posting Who Will Any Form of Intermediate Term Wealth Effect Really Help? Not the Masses. It is well worth reading.

A tranquil reprive from QE2 and the upcoming taxation battle in Congress

The Widow Maker

There is a fine line writing this blog, expressing my views on a number of subjects, but sometimes struggling about how much personal information I am willing to reveal, and this entry is one of those, somewhat crossing the line to recount a recent health issue as a "public service" piece.

I remember when Forbes' Wealthiest 400 List was first published, noting that among the foremost "professions" that led to wealth was "inheritance." I made a mental note to make that my college major in my next lifetime. Being born into such a family such as DuPont or Rockefeller made succeeding generations instant lottery winners!

Here's the connection to the topic at hand: The reverse lottery is being born into a family that has a history of coronary heart disease. Eating a reasonably healthy diet and exercising might delay or mitigate the effects of being dealt poor genetic cards, but last week I found that no matter what I do, I am going to battle this disease for the rest of my life. That is the depressing part of the problem. I have always approached life with the thought I can do something about affecting the outcome. Well, I have no direct control over the progression of coronary heart disease; both my parents suffered from it, in one form or another.

Now other people have been dealt much worse hands on matters of health and cancer has to be among the most cruel and frightening. Coronary heart disease, however, is stealth like and a bigger killer. It develops over years and years. No doubt I compounded my genetic problem as a young adult, smoking by my late teens into my early 30's. My parents both smoked and the rooms of our home sometimes looked like they were in a fog. Also as I kid I ate foods like Wonder Bread ("builds strong bodies 8 ways!") and drank massive amounts of whole milk (which I did into my college years). Meat was also a staple "health" food, and Coca-Cola at 5 cents a bottle was consumed like water.

Over the past summer I noticed that I was having difficulty climbing steep hills during my morning power walks, with a noticeable tightness in my chest. So until we returned home to Florida, I just avoided hills. That was stupid. I should have seen someone immediately, but I didn't think much of it and I was fine otherwise. Once I returned, my Doctor did not like anything I reported, and he said let's skip the usual stress test and go directly to a radial catheterization. Going through the wrist is a newer technique, with faster recovery for the patient. So I went into our local hospital which has an excellent catheterization unit on Monday last week, made a mental note of the time I was wheeled into the cath lab and found myself in recovery less than a half hour later. I then knew there was something wrong. Even if they did merely a balloon angioplasty it would have taken longer than that.

When the Doctor showed up in recovery, he explained I had a 99% blockage in the "Widow Maker" an apt name for the left anterior descending artery which usually gives little warning of being blocked and most who have a heart attack because of that particular blockage die then and there. This blockage could not be addressed with drugs and most interventionist cardiologists would simply refer me to surgery for bypass surgery, an invasive procedure, painful, and with some real risks.

He suggested another option, inserting two drug eluding "kissing" stents where the arteries form a "V." He said it would be tricky, but given my age it might be a better option than a bypass we might have to do all over again in ten years. One bypass per lifetime is enough.

So the next day I was prepped early for a femoral procedure and at 8.00 am was back in the cath lab saying hello to the same technicians and nurses again (we're on a first name basis). I didn't get out until after 10.00 so I knew it was a complicated procedure, but awaited the word from my Doctor about how it went. He explained I received three new drug eluding stents, two in the left anterior descending artery and a kissing one in the diagonal. That makes six total stents in my system and I am now known as a catheterization lab "frequent flyer."

It's been quite an experience. As I said, not half as bad as many people have to go through with their health issues, but bad enough. The message: listen to your body and know your family history.

I am hopeful that I can continue to successfully manage this, but that hope is sort of dependent on being reasonably tethered to my cardiologist and cath lab. In that regard, Dr. Paul Teirstein of Scripps Clinic wrote a reassuring editorial, "Drug-Eluting Stent Restenosis. An Uncommon Yet Pervasive Problem", published online June 21, 2010 in Circulation. His advice for physicians:

Do not underestimate the emotional impact of repeated procedures on patients, particularly the “frequent flyers” who have experienced multiple visits to the catheterization laboratory. These patients often describe significant frustration and fear. They feel a loss of control, mostly due to an inability to plan their lives and predict when a restenosis will occur. It is helpful to reassure these patients by emphasizing they do not have an incurable, lethal disease.... Patients can be told if they stay in close contact with their cardiologist, the risk of death and infarction is low.... It may sound obvious to the physician, but most of our patients are seeking this kind of reassurance.... I also emphasize that recurrences are unlikely to go on forever. Finally, it is worth communicating that they are not the only patient to encounter this problem, and ultimately, patients with restenosis who seek treatment usually have good outcomes.

Take Tea and See

The electorate has spoken and so has the Federal Reserve. The Party of No will now be in a position to speak words of more than that one syllable.

Meanwhile, Mr. Bernanke's monetary gift to the markets of quantitative easing is propelling them to new highs, especially assets benefitting from a weak dollar. Like sheep investors are being herded into a pen of commodities, export-focused stocks, and corporate bonds, anything but prosaic government bonds and CDs. QE2 is to stem deflationary forces and to stimulate the economy but the Fed is entering uncharted waters with its actions and will it create jobs? Beware of Federal Reserve economists bearing gifts to stimulate inflation and then be careful of getting more than what we wish for. The markets might party while Bernanke plays out QE2, and maybe even QE3, but what is the end game and don't markets ultimately discount what IT perceives as the end? I refer again to John Hussman's important observations on the subject

As to the election, the results were no surprise. I remember being "amused" by the rhetoric heard immediately after Obama's victory into his first few months in office, the Dow dropping almost two thousand points in that short period of time as being "evidence" of his "dangerous" economic agenda. It was immaterial that the markets had already been in a swoon for a year before by even a greater percentage. As the Dow recovered, up more than four thousand points since the "Obama low" not a peep about his policies being responsible.

Of course, neither the decline shortly after his taking power, or the Dow turnaround have much to do with his policies. The Federal Reserve can take responsibility for markets on steroids. A year ago I said "I still think the President could have devoted more of his first year to policies addressing what I called a 'new economic morality.' But Main Street seems to have been sacrificed at the altar of Wall Street and we are angry. Who truly believes the economic crisis is solved rather than being merely postponed?" That anger has spilled over into the midterm elections and, now, we will have the help of the Party of No -- and, who knows, perhaps they will have something positive to say and do. Time to take some tea and see?



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Telling It the Way It Is

You have to admire Bill Gross, the eponymous bond king who runs PIMCO's portfolio. His latest monthly Investment Outlook in part takes on the silly season of the midterm elections and its outrageous campaign tactics. The election nearly neatly coincides with Halloween and the ghoulish nightmare of the endless direct mailings and automated phone calls insult the intelligence of the American voter. The negativity is overwhelming. Being on the National Do Not Call list is irrelevant as apparently the people who make the laws can easily bend them for their own benefit so night after night negative recorded messages besiege our land line. If you do not answer, the recording ends up on your answering machine -- some of them can last minutes. When we're home, call recognition winnows most so we can easily answer and hang up almost simultaneously.

The mailbox is stuffed with dire warnings, black and white photos of the opponent which makes he/she look like a ghost and then a nice colorful photo of whomever the mailing supports. Fill in any politician's name you want "[Blank] Is Sucking the Life Out of the Economy." Or another one we received today: "[Blank] Has a Secret She Doesn't Want You to Know." Some are sent by a major party while others are sponsored by "organizations" that sound mighty impressive but are totally unknown such as "Citizens for Lower Taxes and a Stronger Economy, Inc." Hey, I want a stronger economy and lower taxes -- I should be for what they're for!

But I say elect Spiderman!

Just imagine a political system with campaigning that relies totally on televised public debates and published position papers (on the Web, in newspapers) but NO PAID ADVERTISEMENTS or CALLS. Imagine saving all those wasted resources and putting them to better use, especially in these dire economic times.

I'm sick of it and so is Bill Gross. As I said, you have to admire his stance, a risk he takes as he is not a politician, but represents a major financial institution. He's also a damn good writer. Good riddance to the midterm elections. When will we ever learn? The link to Gross' article is above, but I conclude by quoting part of his statement on the subject. It's just too good to be buried in the link.

Each party’s campaign tactics remind me of airport terminals pre-9/11 when solicitors only yards apart would compete for the attention and dollars of travelers. “Save the Whales,” one would demand, while the other would pose as its evil twin – “Eat Whale Blubber,” the makeshift sign would read. It didn’t matter which slogan grabbed you, the end of the day’s results always produced a pot of money for them and the whales were neither saved nor eaten. American politics resemble an airline terminal with a huckster’s bowl waiting to be filled every two years.

And the paramount problem is not that we contribute so willingly or even so cluelessly, but that there are only two bowls to choose from. Thomas Friedman, the respected author of The World Is Flat, and a weekly New York Times Op-Ed author, recently suggested “ripping open this two-party duopoly and having it challenged by a serious third party” unencumbered by special interest megabucks. “We basically have two bankrupt parties, bankrupting the country,” was the explicit sentiment of his article, and I couldn’t agree more – whales or no whales. Was it relevant in 2004 that John Kerry was or was not an admirable “swift boat” commander? Will the absence of a mosque within several hundred yards of Ground Zero solve our deficit crisis? Is Christine O’Donnell really a witch? Did Meg Whitman employ an illegal maid? Who cares! We are being conned, folks; Democrats and Republicans alike. What have you really heard from either party that addresses America’s future instead of its prurient overnight fascination with scandal? Shame on them and of course, shame on us. We’re getting what we deserve. Vote NO in November – no to both parties. Vote NO to a two-party system that trades promises for dollars and hope for power, and leaves the American people high and dry.

Tale of Two Economists

In an ironic twist, an economist turned entrepreneur writes a rigidly academic critique, The Recklessness of Quantitative Easing, and an academic pens an anecdotal piece of writing on a different but related subject, I Can Afford Higher Taxes. But They’ll Make Me Work Less.

Recklessness by John Hussman, whom I’ve quoted before in this blog as I consider him to be one of the clearer thinkers about the uncharted territory we call today’s economy, argues that the Federal Reserve’s announced intention to pursue a second round of QE is to drive “interest rates to negative levels in hopes of stimulating loan demand and discouraging saving” and to “increase the supply of lendable reserves in the banking system.” But will this increase output and employment?

Hussman thinks not as “interest rates are already low enough that variations in their level are not the primary drivers of loan demand.” There is simply a lack of confidence – both for the consumer and businesses -- that they will have the income in the future to pay off loans. So low or even negative interest rates is not a barrier and “removing a barrier allows you to move forward only if that particular barrier is the one that is holding you back (the economic term being "constrained optimization" as he explains.)

“Instead, businesses and consumers now see their debt burdens as too high in relation to their prospective income. The result is a continuing effort to deleverage, in order to improve their long-term financial stability. This is rational behavior. Does the Fed actually believe that the act of reducing interest rates from already low levels, or driving real interest rates to negative levels, will provoke consumers and businesses from acting in their best interests to improve their balance sheets?”

The effect of all the talk about QE2 has been to propel gold to new highs and to further erode the value of the US dollar as the Fed dramatically expands its balance sheet. “But once the Fed has quadrupled or quintupled the U.S. monetary base from its level of three years ago, how will it reverse its position?” Hussman’s answer is that many years down the road it will be forced to sell off the instruments it is buying, driving interest rates much higher as foreign buyers might be absent from such auctions, and undermining whatever recovery might have begun of its own accord, just further accentuating the boom bust cycle.

He has constructive suggestions, fiscal responses that might include “extending unemployment benefits, ensuring multi-year predictability of tax policy, expanding productive forms of spending such as public infrastructure, supporting public research activity through mechanisms such as the National Institute of Health, increasing administrative efforts to restructure debt through writedowns and debt-equity swaps, abandoning policies that protect reckless lenders from taking losses, and expanding incentives and tax credits for private capital investment, research and development.” Of course many of these require the cooperation of Congress and watching the mud slinging of the mid term elections, one has to wonder.

But Hussman’s article is must reading it its entirety, especially if you are an individual investor and wondering how to position a portfolio in this strange new economic world. The net effect of the Fed’s actions, besides the obvious nearly zero return on any CD you might buy, is to “force” the investor to move into riskier assets commodities in particular and equities as well. One could also “play” the decline of the dollar by investing overseas or in US multinational companies, which derive a majority of their income abroad. But to what extent QE2 is already baked into the prices of these riskier assets is anyone’s guess. There is also the possibility of a more protracted deflationary period than anyone can imagine right now, with the ongoing real estate crisis and high unemployment having a continuing impact. There seems to be a heavy reliance on the Fed’s future actions leading to an idyllic outcome. I think Hussman would disagree.

One of his suggestions as noted is “ensuring multi-year predictability of tax policy” which leads me to the other economist, Professor Mankiw who is professor of economics at Harvard and was an adviser to President George W. Bush, whose administration has to share some if not a majority of the responsibility of our present economic morass.

Professor Mankiw op-ed piece in the October 9th New York Times, through a convoluted and highly subjective mathematical exercise, argues the proposed tax increase on the 2% wealthiest Americans – some attempt at least to close the budget abyss -- will lead to such people not working much, including, alas, movie and rock stars and even novelists! Outraged, and disappointed that I might not see another Harrison Ford movie, or see my first Lady Gaga “concert” or that Jonathan Franzen will put down his pen, denying us his next novel in protest, I immediately shot off a letter to the editor of the NY Times business section, in which Mankiw’s article appeared. Some very good letters were published in response, but not mine. The nice thing about a blog is I can publish my own rejections! So here is what I wrote:

While it is hard to argue with Professor Mankiw’s math (“I Can Afford Higher Taxes. But They’ll Make Me Work Less”) of what his incremental income might become thirty years in the future in a halcyon tax-free world, his conclusion that movie stars, novelists, rock stars, and surgeons might work less if taxes are increased is based more on his own anecdotal view of working. By his own admission: “I don’t aspire for much more than a typical upper-middle-class lifestyle,” and that’s fine, but don’t blame the tax code for declining his next free lance opportunity. If he should climb down from his Ivy tower and look at the real world with real unemployment around 15%, people trying to work to simply support their families and hold onto their homes rather than handing down wealth to succeeding generations, he might have a little more empathy for a progressive tax code that did not seem to destroy incentives during the Clinton years, the last years in which our country actually had a surplus. And even Warren Buffett and Bill Gates see the fairness in having some sort of an inheritance tax.

Maybe the Times found it too preachy or politically oriented. Perhaps I should have concentrated on the nature of work itself. Remember Hussman’s comment about constrained optimization, that removing a particular barrier only has a beneficial impact if indeed it was that particular barrier holding you back? If Mankiw is entitled to personalize his argument, so can I. I worked as hard when in a higher incremental tax bracket as I did when they were lowered. Why? I loved work, simple as that. And, that is what is missing not only from Mankiw’s formula but how our society looks at work and values workers.

I remember my first visit on business to Japan in the 1970’s, the taxi cab drivers waiting at the hotel for a fare, their cabs gleaming as between fares they would polish and clean their cars. The refuse collector doing his job well was as highly valued by society as a company executive. Japan today, of course, suffers some of the same maladies as ours, with a twenty-year head start on the phenomenon of deflation, so perhaps that has taken its toll on their workers. Somehow, as a society, we need to value all workers and restore work as something to be embraced.

Of course we don’t always have an idyllic choice of the work we do in our lifetimes, but we do have a choice of doing it well or not and by choosing the former, we open a path to finding it meaningful. I’m sorry Prof. Mankiw chooses whether he will write an article or accept an invitation for a speech merely based on what his incremental income bracket might be, although I think most people would envy that he actually has a choice.

I like what the great short story writer, Raymond Carver, wrote thinking about a friend who admitted he wrote something just to make a deadline and make a buck, knowing he could have written something better if he took the time. “If writing can’t be made as good as it is within us to make it, then why do it? In the end, the satisfaction of having done our best, and the proof of that labor, is the one thing we can take into the grave. I wanted to say to my friend, for heaven’s sake go do something else. There have to be easier and maybe more honest ways to try and earn a living. Or else just do it to the best of your abilities, your talents, and then don’t justify or make excuses. Don’t complain, don’t explain."

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Cruise to Canada and New England

Although we lived in the northeast all of our adult lives before moving to Florida, and still spend the summers there on our boat, we had never taken our own boat north of Nantucket, so this summer we planned a trip to the Canadian Maritimes, but on a cruise ship, leaving the driving to someone else. And although we had navigated New York harbor on our own boat, there is nothing like leaving New York on a 93,000 ton vessel, where you pass Lady Liberty at eye level and

the entire panorama of New York slowly unwinds as you leave the pier at 55th Street and 12th Avenue and make your way towards and under the Verrazano Bridge, barely clearing the bridge in such a vessel. Passing Ellis Island stirred stories in my memory of my ancestors who were processed there, arriving from Cologne, Germany before the Civil War and afterwards building a photography business on the Bowery in lower Manhattan.

Having departed NY in the late afternoon, we emerged into the open waters of the Atlantic on way to the first port of our itinerary, Halifax NS. Our departure coincided with the arrival of Hurricane Igor in the Atlantic and although we were no closer at any time than about 1,000 miles, the storm stirred up the seas, resulting in considerable swelling. But for old salts such as ourselves, the 8 to 10 foot seas were very tolerable, particularly in such a large stabilized vessel. I felt sorry for the passengers who were wearing their wristbands and their patches behind their ears to ward off mal de mare, real or imagined. One could easily recognize such people from a slight glaze of fear in their eyes.

This first leg to Halifax took a full day and night from NY and we entered the harbor early in the morning, a special moment for me as several years ago I edited a book, New York to Boston; Travels in the 1840’s, which included selections from Charles Dickens’ American Notes (1842). Halifax was Dickens’ first stop after transiting the Atlantic Ocean on one of the early steamers -- and in January no less. One can understand his relief at arriving in Halifax, writing the following about his Atlantic journey: “Imagine the wind howling, the sea roaring, the rain beating: all in furious array against her. Picture the sky both dark and wild, and the clouds, in fearful sympathy with the waves, making another ocean in the air. Add to all this, the clattering on deck and down below; the tread of hurried feet; the loud hoarse shouts of seamen; the gurgling in and out of water through the scuppers; with, every now and then, the striking of a heavy sea upon the planks above, with the deep, dead, heavy sound of thunder heard within a vault.”

His ship went aground entering the Halifax Harbor and after being reassured that there was no danger of the ship sinking, or rolling over as the tide was on the rise, Dickens went to bed at 3:00 AM. Upon awakening the next morning, he wrote: “When I had left it over-night, it was dark, foggy, and damp, and there were bleak hills all round us. Now, we were gliding down a smooth, broad stream …the sun shining as on a brilliant April day in England; the land stretched out on either side, streaked with light patches of snow; white wooden houses; people at their doors; telegraphs working; flags hoisted; wharfs appearing; ships; quays crowded with people; distant noises; shouts; men and boys running down steep places towards the pier: all more bright and gay and fresh to our unused eyes than words can paint them.” They finally got off the ship for the first time in fifteen days, Dickens describing Halifax as follows: “I carried away with me a most pleasant impression of the town and its inhabitants, and have preserved it to this hour… The town is built on the side of a hill, the highest point being commanded by a strong fortress, not yet quite finished. Several streets of good breadth and appearance extend from its summit to the water-side, and are intersected by cross streets running parallel with the river…. The day was uncommonly fine; the air bracing and healthful; the whole aspect of the town cheerful, thriving, and industrious.”

I include Dickens description as remarkably it mirrors our own impression of Halifax, and I could not help thinking of his visit while there. Of course, things are more modern now, and the fort he referred to as being unfinished, The Citadel, was completed in 1856, fourteen years after Dickens’ visit.

It was a clear chilly day with nary a cloud in the sky when we were there, the wind having whipped around from the north after the passage of Hurricane Igor far to the east. We walked the extensive hills of Halifax. In some ways, it reminded us of a small Vancouver, with many ethnic groups, Halifax’s Pier 21 having served as the “gateway to Canada” as did Ellis Island in NY.

Our departure followed Dickens into the Bay of Fundy, but his ship went directly to Boston whereas we were on our way to Saint John, New Brunswick, on the north shore of the Bay of Fundy and at the mouth of the St. John River. The Bay of Fundy has always fascinated me because of its extreme tidal changes, an unthinkable fifty-five feet along with the strong currents that accompany such change. As a boater, I wondered how one would navigate and tie off to fixed docks for such a change (answer: time activity to avoid low tide or just sit on the bottom waiting for the tide to rise). Intent on seeing as much as we could of this phenomenon and the caves gored by tidal action, we wanted to travel parts of the Bay of Fundy trail and therefore we booked a private guide to be driven to all the highlights.

This turned out to be a fascinating part of the trip, not because of the scenery per se, which was not as memorable as we had hoped (we were there at the wrong tide, closer to high than low) but because of our driver, a woman in her early forties, and her unusual and remarkable life story.

She was born to a French-Canadian father and a mother who is part native Indian and actually was raised on a Reservation. In fact, her Uncle is currently a chief of one of the Micmac tribal villages. Our guide has twelve half brothers and sisters, all fathered by different men! Her mother had problems, too personal to go into detail here. But remarkably, our driver raised many of her half siblings from her early pre-teen years, and her own two sons and a daughter as well, completely on her own. Through much personal sacrifice and hard work, they have become upstanding citizens and she is currently a very proud homeowner and successful in her business, and is reconciled with her parents who rent a room in her house!

So while we toured and she explained the various sites, we were equally fascinated by this larger than life person, and her perspective on living in St. John, a beautiful part of the world.

From St. John the ship moved on to Bar Harbor, Maine, my friend Emily’s favorite place. Although our son went to Bates College in Lewiston, and we used to visit him there, regretfully we never found our way to Bar Harbor, a town that reminded us a little of Nantucket. Emily’s “go to destination” in town is Sherman’s Bookstore where she advised Ann to buy, Contentment Cove, a novel written by Miriam Colwell, which although she actually wrote in the 1950’s was published only four years ago. Ann loved the book, finishing it during the rest of the cruise (I was reading Jonathan Franzen’s Freedom)

Acadia National Park, with its striking views of the Porcupine Islands and much of Maine’s extensive coastline was a special treat. Before the fire of 1947, Bar Harbor had large, Newport-like “cottages” but most of these were consumed in the fireball that was fed from the Acadia woods by a dry strong wind. Today Bar Harbor’s 4,000 resident population grows ten times that in the summer. One can see why.

From Bar Harbor we cruised overnight to Boston, where we eagerly anticipated seeing our son, Chris. We decided to meet at The Institute of Contemporary Art where we were treated to highly interesting and imaginative work of Charles LeDray, an exhibition entitled workworkworkworkwork, “consisting of handmade sculptures in stitched fabric, carved bone, and wheel-thrown clay.” These are all “smaller-than-life formal suits, embroidered patches, ties, and hats, as well as scaled-down chests of drawers, doors, thousands of unique, thimble-sized vessels, and even complex models of the solar system.” The gestalt was to make the viewer’s life feel tiny in the continuum of time and space. This exhibit will tour, so be on the lookout! Afterwards, we had a wonderful lunch overlooking the Boston Harbor. The sun set over Boston as we departed.

The last port was one we had once visited on our own boat, many years before, Newport, RI. Here is one of the most beautiful, venerable NE seafaring towns, with its “cottages” for the rich and famous. Newport always has a breeze blowing and I remember having to back our boat down a corridor at the old Treadway Inn, currently another hotel, its docks now rearranged for mega vessels, with a crosswind that made the boat almost unmanageable. I think I made a mental note to avoid Newport thereafter, at least on our own boat. Nonetheless, I love the architecture in Newport.

Returning to New York early the next morning was dramatic as we caught the dawn and then the sunrise. The Williamsburg Bank tower in Brooklyn as well as the Brooklyn and Manhattan bridges marked my return to an area I had spent a good part of my early adult life.

It was strange to see these landmarks from the perspective of the ship, four decades later, almost as if I am now a stowaway from another land.

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Freedom

I will not attempt to formally “review” Jonathan Franzen’s Freedom as it justifiably has been thoroughly reviewed and highly praised since publication. But having recently read it, here is my opinion. It is a tour de force of our times covering the entire canvas of American culture, politics, and the forces that now shape our personal relationships and our society. It is stunningly and ingeniously written, with a fresh originality, a postmodern view of who we are and how we got here. In so doing, Franzen excoriates the worst aspects of American culture.

It is a story about the enmeshment of relationships, the extent to which we create our own hell (or heaven) having been dealt the hand of the families we are born into. Do we assume the roles of our parents or rebel against them? To what extent do we really have free will or become victims of abuse and misbehavior inflicted by prior generations? It is about competition and power, survival of the fittest, fathers vs. sons, almost echoing the Darwinian themes of Dreiser. It is about the conflict of personal freedoms and the need to protect the environment and control population growth. Will “the American bourgeoisie…voluntarily accept increasing restrictions on its personal freedoms”?

It is also a novel about a unique development in American life, new generations not having it better than previous ones, perhaps the consequence of having too many choices. As Franzen writes about the main character, Patty, “she was struck…by how much better off and more successful her parents were than any of their children, herself included.” Her mother cursed her husband’s genes “for her kids’ weirdness and ineffectuality.” At times the characters are “bludgeoned by depression,” another leitmotif of the novel and certainly characteristic of our Prozac plagued times.

I couldn’t help but think of Updike’s Rabbit novels, written about every ten years, capturing the Zeitgeist of each decade, and Franzen, now, encapsulating the state of the first decade of the millennium. There is also the eerie coincidence of Patty being a basketball star in her youth, like Rabbit Angstrom. In many respects, there is a decidedly Updikian feel to the novel.

The novel is a shot across the bow of a society that values the culture of American Idol and the worst aspects of capitalism more than the environment and intelligent political choices. At one point Patty’s son, Joey, wishes “there were some different world he could belong to, some simpler world in which a good life could be had at nobody else’s expense,” summing up the modern conundrum.

While it is a novel of social commentary, it is also a page-turner with memorable characters, ranking with the best in American literature. The writer who shared similar concerns in the early 20th century, Sinclair Lewis, said America is “the most contradictory, the most depressing, the most stirring, of any land in the world today.” I think Franzen would agree.
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