Somewhere back around 1946 or 1947, Nick Etten–by now a pretty much forgotten first baseman for the Yankees–signed a one-year contract in the amount of $15,100. This sum struck many observers as an odd number, but not one canny New York baseball writer, possibly Red Smith. “The $100,” he wrote, “is for fielding.”
That pretty much sums up my reaction to the 150-year prison sentence handed out to Bernard Madoff. As I assay the punishment-to-crime ratio implicit in the judge’s decision, I attribute 25 years as penal recompense for Madoff’s particular peculations–his swindling of a few thousand institutions and individuals–and the balance of 125 years as society’s get-even for Wall Street’s recent crimes against humanity, for which Madoff can stand as an almost perfect symbol.
We cannot get at Stanley O’Neal, or Jimmy Cayne, or Joseph Cassano and his merry band of AIG rogues, or Dick Fuld–men whose actions and recklessness ultimately led to the destruction of trillions of dollars of personal wealth and the hopes and necessities that wealth was intended to underwrite and secure.
We cannot get at Goldman Sachs, which seems about to report as profitable a quarter as any in its history, a fact which, under the circumstances, will rank, if true, with the greatest moral obscenities and perversions of process I have witnessed in what is now starting to feel like quite a long life.
But we can get at Bernard Madoff, and if he must stand proxy for the fury we feel at Wall Street, and for our frustration that the real malefactors not only seem beyond adequate punishment, but are being rewarded with non-dues-paying membership in a tight little club of taxpayer-financed vulture finance, then so be it: 150 years and every penny for Madoff, not a nickel nor a month from the real bad guys.
This is not to say I don’t feel Madoff’s victims’ pain. Not possibly, not to that extent, to be sure. I am not bankrupt. But every morning now, when I arise, the first thing I do is some simple arithmetic that suggests I no longer have resources adequate to get me to my grave, assuming the actuarial tables are correct. Until last December, I never heard the name “Madoff.” I owned good stocks. The people who advised me never for one second showed themselves deficient in intelligence or good faith. And yet here I am.
Is Bernie Madoff Really Worse Than Dick Fuld? – Michael Thomas, Forbes
July 6th, 2009
uly 3 (Bloomberg) — So you think China’s 6 percent growth will power a global recovery. Think again.
Economists, for example, can’t put a gloss on how ugly Japan’s data are getting. Exports and output are plunging, unemployment is at a 25-year high and those all-important summer bonuses are evaporating. The best we can say is that sentiment among large manufacturers was less gloomy in June than expected.
Where is that smidgen of hope coming from? China, which rarely misses a chance to declare victory over the global recession. Officials in Beijing say stimulus spending and record lending are sparking a recovery in the third-biggest economy.
Export-led Japan would seem perfectly placed to benefit. That is, until you check the evidence. Shipments to Japan’s biggest trading partner fell 29.7 percent in May, more than April’s 25.9 percent. It suggests China’s growth isn’t helping the rest of Asia very much.
China acted quickly to shield its economy from the global crisis. Manufacturing in May expanded for a fourth month. Central bank Governor Zhou Xiaochuan says things may keep improving in the third and fourth quarters.
It’s also worth noting that Japanese exports to China are falling less severely than elsewhere. Shipments to the U.S. fell 45.4 percent in May. Exports to Europe slid by the same amount.
No Engine
China isn’t turning out to be an engine of growth for Asia.
One possible explanation is protectionism, as China works to encourage exports while curbing imports. The country objects to the “Buy American” provisions in U.S. stimulus efforts, yet it is using similar tactics. Another reason may be that China’s revival is more spin than reality.
Either way, talk that China would feed the “green shoots” dynamic that Federal Reserve Chairman Ben Bernanke introduced into Wall Street’s lexicon four months ago isn’t working out. Nor will the Asia-decoupling theory that’s being resurrected.
Yes, Asia is less reliant on the U.S. than it was a decade ago. Its fortunes are still intricately tied to what happens in the $14 trillion U.S. economy. The longer the U.S. is on its back, the harder it will be for Asia to maintain modest growth.
One reason for a resurgence of the decoupling argument so convincingly debunked last year is actual growth. Even with the U.S., Europe and Japan mired in recession, economies in China, India, Indonesia, the Philippines and Australia are still expanding. That’s impressive given the state of credit markets.
Fast Forward
Fast-forward one year, though. If the U.S. economy is still weak in July 2010, Asia will have a hard time supporting growth from within. At the moment, stimulus efforts are starting from a low base. Over time, government spending and low interest rates may get less traction.
The Asian market won’t close the gap. Much of the region’s internal trade involves intermediate goods used in the production of other products — many of which go to the U.S. and Europe. A world without growth will force Asia to retool economies toward greater domestic consumption without the cushion of robust demand.
What’s more likely is an inward-looking period as opposed to regional cooperation. Groups such as the Association of Southeast Asian Nations talk a lot about linking their combined fortunes and outlooks. Meetings, photo opportunities and communiques don’t hide the stark reality that Asian economies compete more with each other than join hands.
‘Buy China’
China has been expanding efforts to help exporters with bigger tax benefits, loans from state-owned banks and other steps. Many “Buy China” directives are coming from Beijing. And don’t expect China to allow the yuan to appreciate much in the second half of 2009, regardless of market pressures.
Such policies suggest China is losing confidence in its 4 trillion-yuan ($585 billion) stimulus plan. They are also a reminder of the limits to governments’ ability to boost growth with public largess alone.
Growth may slip as stimulus spending wanes amid political opposition to a widening fiscal deficit, says Ma Jun, Deutsche Bank AG’s Hong Kong-based China economist. That casts doubts on predictions that Chinese gross domestic product will expand 8 percent in 2010.
The omnipotent reputation many assign to leaders in Beijing is being challenged. Take this week’s Internet fiasco. China postponed the deadline for personal-computer makers to include state-backed anti-pornography software on new PCs after U.S. officials and business groups urged it to scrap the rule.
China is normally a model of implementation. The speed with which it builds state-of-the-art airports, high-speed rail lines and Olympic stadiums is impressive by any scale. Its censorship efforts were exactly the opposite: sloppy and ill-considered.
Economic-stimulus efforts appear to be benefiting from greater competence. That may be a boon for 1.3 billion Chinese trying to get a share of the nation’s growth. The benefits for those outside China are much more limited.
China Will Not Power a Global Recovery – William Pesek, Bloomberg
July 6th, 2009
I had a dream the other night. Shopping for a new car, I logged on to a manufacturer’s Web site. I found the model I wanted and clicked on my options. Days later, a deliveryman showed up with the car and the relevant paperwork.
Let’s Eliminate the Car Dealers – Charles Lane, Washington Post
July 6th, 2009
