Thursday, December 29, 2016

"Justin, how do you review 80 books in a year?"

Someone recently asked, so here's the answer.
This screenshot of my phone (a OnePlus One) explains a lot:


This is how I recommend spending your work commute, your walks down the hallway to the bathroom, and redeeming the time of chores around the house you'd rather not do: Listen to books, sermons, podcasts, and languages. I never just sit around and listen to a podcast or book-- I do it when driving or walking, to give myself time to do other things in my "free time" (like read other books and articles in print.)

I listen to these with my Mpow bluetooth earpiece which I keep with me at all times; I highly recommend this model as it stays in your ear well and the microphone works well enough for phone calls. (Neat feature of this device is that two Bluetooth devices can be connected to it at once.) Some people stigmatize those who wear bluetooth earpieces-- that's okay, you can worry about your ears while we're happy to be more knowledgeable and more productive than you all day long. This allows me to knock out about a book a week, plus about 25-50 other sermons and podcasts. Oh yeah, you can also stream music or whatever language you're learning. (Arabic at normal speed takes up a few hours of my time each week.) I don't wear this ALL day; I rarely ever wear it at home when I'm not working.



I listen to most books and all podcasts using the Pocket Casts app, which is designed for podcasts but has a Custom_Episodes folder where you can drop any mp3. Pocket Casts let's you speed up the playback and reduces the length of silent pauses-- especially handy for audiobooks and sermons that have long pauses. I've saved literally days of time this year just removing silence.

Here is my dashboard for roughly the last two years. Note that listening to things at 2x-3x speed has saved me almost two months and freed me to do things. I will note this post next year and compare.


I use Google Keep for my notes as I listen. It has a microphone dictation feature so I can dictate notes while I drive without looking at the screen. My book notes look like this, and I type them and add details later.


Listening to your device and talking on the phone is easier in the car if you have this Mpow magnetic device that clips onto your A/C vent. This stays right next to my hand on the steering wheel and makes it easy to keep Waze/Google Maps up as well. I have another device that plugs into the earphone jack that lets me listen to my phone/talk on the phone via my car's outdated sound system. (that way I don't wear the bluetooth earpiece ALL day, it charges in the car.)

See that circle next to my radio's Power knob? That's it. Best $5-8 you will ever spend.

I also always have a book on either my Kindle or Google Book reader for other times when I find myself sitting somewhere with time to fill. These can be read on my phone or my ipad at any time. Both Google Books and Kindle save your highlights and notes to the cloud for relatively easy copy/paste later. Goodreader is a must-have app for reading and taking notes on a PDF if you have an iPad. The Kentucky library system has a ton of audiobooks and ebooks available as free downloads (download them onto your PC then copy them onto your phone/tablet).

So, that's it. The downside? I probably need an intervention. But I try to do all of this as for the Lord (Colossians 3:23). See anything I'm missing? Let me know in the comments. 

Wednesday, December 28, 2016

Believer by David Axelrod (Book Review #80 of 2016)



Believer: My 40 Years in Politics

I began this book just before the November, 2016 election and finished it in those incredibly sobering days afterward. (The 2008 election was somewhat similar to 2016 in that voters went with the candidate that least resembled their perception of Washington.) I listened to this in Axelrod's own voice, which is the best way to do it. This might be a good look at what it's like to be a professional campaigner, writer, marketer. Axelrod is famous for being Pres. Obama's political adviser, but this book covers 40 years of campaigns mostly involved in Chicago politics. I followed it with Jonathan Alter's The Center Holds, which is a detailed account of Obama's 2012 re-election campaign, and found that Axelrod left out much of interest in that campaign and was perhaps not as self-deprecatory in this book as he could have been. Alter's more detailed account casts some doubt on Axelrod's spin here, and how Axelrod apparently left out some internal squabbles from his memoir.

In this book, and from what I've noticed following him on Twitter for a year or so, Axelrod seems to be a fairly stand-up guy. He's deeply committed to his family and keenly aware of his Jewish heritage. He's also for hire in a dirty business, but prefers to hitch his star to candidates he finds personally likable.

Axelrod is the son of Jews who fled the pogroms of Eastern Europe and migrated to New York. He tells the sad tale of his parents, who divorced and were ultimately unable to reconcile. His mother was an "elitist" career woman, and his father was not of that ilk. Axelrod's first campaign first political exposure was as a boy at a JFK rally, and he compares this to watching Obama in Iowa in 2012. He finds both men ideal candidates. He volunteered for Robert Kennedy and became a paid volunteer for a "hack" of the New York General Assembly. He quickly felt the stench of working for an empty-suit candidate whose seat was bought by the candidate's wealthy father. Axelrod went to the University of Chicago (where he teaches today) and got into journalism, originally writing for the Village Voice when he was back in New York. His willingness to do whatever it took to get a job landed him at the Chicago Tribune as a 23 year old working the late night crime beats and getting a view of the Chicago political machine. A big break came when he was assigned to follow an unlikely mayoral candidate's race and that candidate ended up winning--Axelrod was the only journalist who knew much about him.

While covering the mayor's office, Axelrod saw the outright Chicago corruption up close. There is much to dislike about Chicago in this book, and perhaps Axelrod does not realize how the label of "Chicago politics" follows him warily nationwide today. Somewhere while covering the mayor's office, the idea of writing for a candidate entered Axelrod's mind since he understood better how the media operated and had connections. He joined the 1984 Senate campaign of Democrat Paul Simon and was instrumental in shaping the message of the campaign. Axelrod's strategy was to run positive ads rather than attack, and Simon beat the Republican Percy despite Reagan's sweep nationally. This campaign also introduced Axelrod to Rahm Emanuel. From there, Axelrod starts his private campaign marketing firm and looks to build his career further. He specializes in creating ads that "tell a story." In each campaign, he seems to personally identify with the simple message he gives each candidate. The "jobs candidate" or the "big business" candidate, etc.

There's a shallowness to his thinking on policy that has tainted every race since--that trade is bad, or free enterprise isn't as noble as being a career politician, etc. For example, Axelrod defends the populist anti-trade, anti-outsourcing arguments that has made America more xenophobic, ignore the benefits of trade (that even Obama has espoused), ruined American politics, and precisely helped Trump create a platform on the issue in 2016. Axelrod writes as though he believes those things, even though some of his supported candidates have shown they have not actually. As a result, you have candidates today (Hillary Clinton most recently) who have to take one position publicly and another privately when they meet with donors (as her email leaks made clear of her "dream" of a hemispheric customs union while flip-flopping on her support for TPP).

Axelrod looks back on those days away from his wife and children with regret. His daughter was diagnosed early on with epilepsy and the family has since tried every treatment imaginable in the hopes of a cure or greater relief. This pushes him in the policy area of research and funding for special needs children. That does not come up a lot in the book, but his concern for his family does.

In 1987, Axelrod joined the re-election campaign of Harold Washington, Chicago's first black mayor, who died shortly after winning. It is here that the ugly racist side of Chicago politics comes out (this is the era that police are now being indicted for grave abuses now). In 1989, Chicago had the nickname of "Beirut on the Lake," for its ongoing gang violence, and Axelrod works on the campaigns of other black candidates. Around this time, he is introduced to Bill Clinton before Clinton officially declared his candidacy. Axelrod turned down an opportunity to be Communications Director of the Clinton campaign because of his lament of his long absences from his family and his epileptic daughter (the job went to George Stephanopolous). He then stays out of major campaigns until his daughter is more grown up. (Rahm Emanuel, meanwhile, joins the Clinton White House.) In 2000, he turned down a Gore campaign invitation because of his wife's cancer diagnosis. (His family-first philosophy makes him similar to Barack Obama, who also had strong family considerations and moved his mother-in-law into the White House with him.) He worked some on Hillary Clinton's Senate campaign.

Axelrod opines on the "evolution of Rahm Emanuel," who successfully ran for Congress in 2002 and became a good soldier of the Democratic party, recruiting successful Democratic candidates in Red States (the "Blue-Dog Democrats"). Axelrod worked for Emanuel in 2006 in helping elect that group. They maintained a good working relationship throughout the book and Axelrod tells stories about how Emanuel operates. Both have Jewish roots and are well-versed in Chicago politics, but perhaps no politician is more profane than Emanuel.

Axelrod worked on Barack Obama's successful Senate campaign and writes admiringly of the candidate who was raised by white grandparents from Kansas, which made him comfortable in white homes in conservative portions of the state. Barack was able to pick up white votes that black candidates had previously found difficult. Obama got newspaper endorsements and beat Hull for Senate. Obama was glad to to be against the 2003 Iraq war, he saw it as an easy call. As he made clear on the campaign trail (and later in his Nobel Peace Prize acceptance), he is not against all wars, just "stupid ones." (Axelrod does not mention Obama's like of Reinhold Neibuhr's philosophy.) Obama was a big proponent of charter schools but opposed to vouchers.

Axelrod also joined the John Edwards presidential campaign in 2004, which he now considers a mistake. He writes of a campaign in disarray, in which Elizabeth and he clashed and she had a way of micromanaging. When things started to go badly, Axelrod was blamed and demoted. But he got to work with Obama around the same time, which he liked. Axelrod writes of Obama's preparation for the now-famous 2004 DNC keynote speech and the circumstances in which it was delivered. He writes of these moments similar to how a boxing trainer might send someone out in the ring and then assess his performance between rounds.

What is interesting is that Obama's campaign debt is what pushed him to do the book tours that made him a "celebrity." Obama recruited staffer Pete Rouse by promising that he would not run for President. But Obama disliked all of the "talk" of the Senate, he was frustrated easily by the rules and process. He hated traveling away from family on weekends, fundraising for the party, and making political stands like voting against John Roberts. According to Axelrod, Obama saw Roberts as a suitable candidate, but ended up voting against him because perhaps there was something he did not know about Roberts that would lead Roberts to vote on issues that would further disenfranchise minorities. Axelrod writes that Bush's "Hurricane Katrina moment" created an opportunity for Obama to speak about race and class divisions like few could, and that helped nudge him toward a presidential campaign.

Obama wrote his second book (which is much worse than the first) very quickly, working with staff on late-night productions to get chapters finished. His Presidential campaign didn't take shape until after he had traveled abroad and published that second book. Axelrod writes of the meeting with Barack and Michelle in which Axelrod is sure to put the cost of campaigning to them bluntly in terms of lost family time. Obama proceeds with three rules: Grass roots, no leaks or internal divisions, and let's have fun. Axelrod adds another rule-- that Obama quit smoking.

Axelrod writes that the campaign was similar to the Oceans 11 movie, recruiting the right people and doing whatever they could to raise support and unseat the larger candidates. He had originally considered sitting out the 2008 race because all the candidates had been clients of his firm at one time. Hillary, in particular, had been a donor to the cause of finding a cure for his daughter's epilepsy. He retells the story of the early dates, the gaffes, the debates, and the Iowa Caucus win that put the Clinton campaign on the defensive. Hillary built her campaign attacking the GOP and Obama wanted a different tone, more positive. The appeal of Obama, writes the author, was that he seemed to unite Americans across various lines and was different than a typical Washington candidate. Voters judged Obama by his character. Hillary was the consummate political class candidate (implications for 2016, anyone?). At one point, Hillary angrily confronted Obama privately and Obama was surprised by the "fear in her eyes" of losing the election; the Presidency was obviously something she would do anything to get. It is no secret that it was a rough campaign and that Bill Clinton would remain rather estranged from the White House until years later.

Plouffe ran the campaign, Axelrod managed the message, and Obama did his best. I noted that even Steve Jobs complained about their communications strategy. When they went to Berlin they saw what a unique opportunity they had in the world. Shortly thereafter, they settled on a VP candidate, and the author recounts the short list-- Tim Kaine, Joe Biden, and Evan Bayh. Bayh was too "flat," and Kaine was "too alike" with Obama. I did not learn much about the 2008 general election, the candidate stayed on message and things turned out like they'd thought.

Bits I learned about the first term:
There was a Somali-based threat against the inauguration that the Secret Service took seriously, and staff kept secret-- knowingly putting their own friends and family at risk in attending. According to Axelrod, Rahm Emanuel did promise Larry Summers that he would replace Bernanke as Fed Chairman, and that's what got Summers to take the ill-suited job of National Economic Council chairman. Summers was, of course, twice passed up for that position. That may have had to do with Summer's behind-the-scenes role of making sure the AIG executives got their bonuses paid, something Obama was "livid" about when he found out later. The meetings and talk of how to capitalize the banks and handle the middle of the financial crisis were interesting, but I got more from reading Timothy Geithner's memoir on this subject (and will soon read Bernanke's). Rahm Emanuel made it clear that an economic stimulus package could not have the "t-word" (ie: trillion) in it.

There is much of interest about the health care reform battle, and how that was handled. Everyone was wary about how the Clinton White House had health care reform destroyed by running it from the Executive Branch, hence the decision that the bill had to be written and handled by Congress. Nonetheless, Obama spent long hours talking to Olympia Snow and others who might vote for it. The insurance company had their own "secret seat at the table" of healthcare reform in order to get them to sign on, another reason it was left in the hands of Congress. The reader gets to relive the Scott Brown win of Teddy Kennedy's seat, the tradeoffs, and the White House's relief at the bill that eventually passed.

Perhaps the only Republican that Obama got along with was Defense Secretary Robert Gates. Gates reportedly said "I love working for this President" when he re-upped for another year (Gates' memoir is more even-handed on Obama). Stan McChrystal's days may have been numbered long before the fateful Rolling Stones article; Obama was angry after McChrystal's Afghan troop recommendation were leaked to the media. Axelrod writes that "soldiers are nonpartisan but the Pentagon is highly political." Everyone, including Obama, is surprised when he wins the Nobel Peace Prize, particularly ironic as it was during talks about how big the Afghan troop surge would be and the likelihood of more war. Elie Wisel apparently influenced and "sobered" Obama in college, they worked on a book together in the White House. A foreign policy victory came when Russian President Medvedev says that America was right about Iran's nuclear ambitions and supportive of curbing them. One great frustration was the BP gulf oil spill and they were perhaps too mindful of staying ahead of it in the PR department at the expense of other needs.

Despite successes, they experienced a midterm election "setback," as the Tea Party was swept to power and this created a great crisis of insecurity in the White House. Suddenly, everyone was a critic with unsolicited advice for Axelrod on communications strategy. During the first term, an unflattering piece had been written on a seemingly over-worked Axelrod and Obama expressed his personal concern. Axelrod returns to Chicago in early 2011, writing that it was all part of a pre-planned departure to get ready for the upcoming re-election campaign. Daley would take on a role as Chief of Staff in a general White House shake-up (Alter writes that Obama personally moved up the timeline to get Axelrod off the job sooner.) Axelrod whines that Reagan had Tip O'Neill who would compromise, Obama had Boehner who was keen not to, especially when feeling the heat from a now much-more-conservative GOP. But Axelrod admits that Obama did not enjoy the phone calls and glad-handing that it takes to get things done in Washington.

It did not take long for Axelrod to have some "separation anxiety" and he sounds kind of pathetic in how he misses the President. A book published with dirt from insiders during the re-election campaign angered Obama greatly. Axelrod writes that they never seriously considered swapping Clinton on the ticket for Biden, as some had suggested. He admits, however, that some polling was done and they found it did not move the needle on voters' opinions-- Biden was a lock to stay.

Alter's book makes me think Axelrod had a more high-level advisory roll in the 2012 campaign since so much of the detail of the ground game and targeted marketing is left out of this memoir. 2012 was the most high-tech campaign on record and much of that intentional strategy was left out. One pointed detail is before Obama "loses" the first debate with Romney and the criticism pours on. Obama was "grossly under-prepared" and at one point during a debate prep gives his team a sharp "you _____ are never satisfied" comment. He gets out of his slump and goes on to win the election. Axelrod seems to have personal enmity for Romney, writing a campaign story that pits the middle class against Bain Capital Management and the elites who have written off the bottom 48%.

The campaign is a bittersweet ending for Axelrod, because he enjoyed the war and the family of friends. He starts the Institute of Politics at the University of Chicago. He reminisces on politicians of the past, like Dan Rostenkowski, that he admired for "good" policies but were morally, internally corrupt (Rostenkowski went the prison). Obama is admirable because he maintained solid character, sometimes to a fault, and had policies that Axelrod supported. Obama comes across as centrist to a fault in this memoir. Axelrod wonders about the state of politics today, where even sharing a meal with another candidate is considered "treason" or something worse. Obama campaigned in 2008 on a pledge to "fix broken politics," but did he? (Of course not. This is Axelrod again falling for his own marketing material.) Axelrod is concerned that hopelessly combative, divided politics is our fate.

Seeing the 2016 transition take place as I write this makes this book feel incomplete. It would be nice to have Axelrod's insights into the White House as Hillary Clinton's ship sunk could never quite pull away from Donald Trump. He was rather critical of her at times on Twitter, it would be good to have that retrospective in the book as well. I suppose an updated edition is unlikely. I give this book 3.5 stars out of 5.

Tuesday, December 27, 2016

The Myth of Certainty by Daniel Taylor - my favorite book of 2016


The Myth of Certainty: The Reflective Christian and the Risk of Commitment by Daniel Taylor (Book Review #79 of 2016)

This five-star work is Book of the Year 2016 for me. Like many reviewers, my reaction is one of "I now know I am not alone." It is not in Kindle format, so I took pictures of probably 1/3 of the pages to make highlights (hence page numbers are missing from most of the quotations below). He later wrote a sequel from an older-age perspective, and I hope to find that soon.

Reflective Christians (me): "have found in God, and in Jesus Christ, the proposed solution to the human dilemma to which they have made, with varying degrees of confidence, a commitment. At the same time they have been blessed and cursed with minds that never rest. They are dissatisfied with superficial answers to difficult questions, willing to defend faith, but not its misuse. Furthermore, these people find themselves in the church, members of a Christian subculture...they are both indebted to it and victimized by it. At the same, time they are often part of...another culture...hostile to their Christian commitment. This is the secular, intellectual world that deals in the manufacture and propagation of ideas" (p. 11).

 I stumbled across this at a used bookstore about the time Andy Stanley's 2016 mini-series on apologetics (directed toward those who had left the church for a "None" status) was sparking controversy. I listened to the entire series and read Stanley's explanation in Outreach Magazine,
stating his belief in inerrancy but challenging preachers to avoid saying "the Bible says..." These were on my mind along with John Piper's response to his personal dialogue with Stanley when I saw this book and was struck by the Introduction (above). I do not know if Stanley read this book, but I suspect he has. I noted that Barnabas Piper rated this book 5 stars and wrote his own book (Help My Unbelief) along similar theme, which I now hope to pick up.

The older I get and the more widely I read and interact with educated, biblically-skeptical non-Christians the more I am in tune with an apologetic that asserts a "reasonable faith"; one that begins either by 1) pointing out the attractiveness of the Christian worldview compared to the logical absurdity of life/values/ethics in the absence of a creator, or 2) the reasonable probability based on all the historical evidence that Jesus did indeed leave an empty tomb. With this approach comes a probability-- there is a chance I am wrong but I believe the odds are in my favor because... (and reasons follow). Nabeel Qureshi's testimony, in which he studied philosophy in college and began to use Western logic to examine the Bible and the Quran + Hadith literature to reach a conclusion that Christianity was likely true and made a faith decision, also weighed on my thinking.

Faith necessitates a level of uncertainty that does not contradict the "assuredness" of Hebrews 11:1. Doubting Thomas believed in a resurrected Jesus because he saw and felt his wounds himself. Jesus said "Because you have seen me, you have believed; blessed are those who have not seen and yet have believed" (John 20:29). None of us were there with our cellphone cameras, but we rely on the relayed testimony and historical evidences of those who were. Faith necessitates risk, another word for uncertainty. Without doubt, there can be no exercise of faith.

"Faith, however, is not a matter of rolling the dice. It is, or can be, a conscious expression of a great gift--human freedom...without this freedom, commitment would be inconceivable...Barth says freedom rightly understood is not freedom FROM something...'but freedom TO and FOR," a release to choice and action. And the greatest exercise of that freedom, Kirkegaard affirms, is to choose God, to choose commitment and responsibility.."

People do not like doubt or uncertainty, however, and we have a cognitive bias to believe with certainty things we cannot truly, absolutely know. An atheist maintains his certainty that I am a fool to be a Christian just as a fundamentalist may believe I am dangerous because he places his certainty on "because it's in the Bible." Within both camps there is also the presence of "True Scotsman fallacy," if you believe X, you must certainly believe Y, or else you're not a True Believer in X. (For example, before the GOP nominated Trump I would have said you have to believe in free trade to be a Republican, similar to how most Democrats say you have to be pro-choice to be a Democrat). Taylor deals with some of these cognitive biases without calling them such, (this was written before Kahneman and Tversky were household names).

"How does one survive as a thinker in the church and a believer in the larger world?"
Taylor's point is that people who may be well-read in non-religious Christian topics and yet maintain faith often struggle to fit into either our Church or among our non-Christian educated colleagues & friends, hence they/we feel alone. We need to be able to question institutions, which to some adherents is paramount to "attacking God" (p. 30), but need not be so. People defending institutions are often "protecting themselves, their view of the world, and their sense of security." The reflective Christian likewise questions the secular orthodoxy:

"Secularists don't generally think of themselves as having an orthodoxy, but they have one just the same...(with) articles of faith, each with its own history...like reason, inquiry, objectivity, tolerance... etc." The orthodoxy of the secular world today is pluralism. "Only 'friendly' diversity, like the pseudo-questions in the Christian subculture can be allowed. The intellectual world, like its Christian counterpart, exercises power first for the purpose of self-preservation..." As such, there are examples of closed-mindedness on both sides. Universities will bar creationists just as churches will bar atheist string theorists.

Taylor critiques the worship of reason by secularists, who do things with reason that it by definition cannot do. "There is no objective, neutral thing called 'reason' which anyone with some training can use to get at the 'truth' of things (especially nonphysical things). The closes we come perhaps is in the scientific method...or in the technical use of logic in formal philosophy." People who purport to use reason to equate faith with irrationality are as wrong as those who argue that reason and evidence PROVE the existence of God. "God is not reducible to proof and only our weakness makes us wish it were so." Reason is not at all useless, and the Christian can use it just as well as an atheist--the difference is the Christian is more likely to acknowledge its limitations.

Taylor likewise highlights "the myth of objectivity," noting that "objectivity is supposedly something that the intellectual can have, while the person of faith wallows in subjectivity." But "in deciding what is good and true and beautiful and worth living for in this world there is so much sheer humanness at work, that the claim of cool, rational objectivity is almost laughable. Only objects are truly objective" (p. 51).  He is standing on the shoulders of 150 years of secular thinkers who have used reason to critique and demonstrate its limitations. Pascal wrote "We must know where to doubt, where to feel certain, where to submit. He who does not do so, understands not the force of reason."

"The secular world will allow you to be a Christian, as long as your faith is kept in a quarantine and not allowed to influence your judgments or lead you to question secular presuppositions." The reflective Christian is "reluctantly" willing to be out of sync in both subcultures-- if he is convinced he is correct. "The reflective Christian does well, in my view, to freely admit this possibility of being wrong." I wish I held my own views with such humility. "One can hold beliefs passionately yet with humility...Humility helps us avoid confusing defense of the truth with defense of the self."

Though this work is non-fiction, Taylor sprinkles in an ongoing fictional illustration, the story of an English professor named Alex, who earned an advanced degree at a liberal institution but now teaches at a conservative Christian college. Alex is me. I taught at a politically and religiously conservative Southern Baptist school with its proud traditions and guardedness against anything that might be unusual. His field is English, mine is economics and both fields taught at Christian university may teach that only a particular type of literature or economics is truly "Christian." This was the most powerful passage in the book for me, a conversation between a frustrated Alex and an older, wiser fellow Reflective Christian colleague:

"But why (stay) in the middle of these people? Why not go where faith isn't mixed up with quite so many other things? I mean some of these people genuinely believe God is a free-market Republican."
"Why not, indeed...This is just one little, back-water spot in the river of faith. But it is the place where I have been put, and I have chosen to stay...Don't make the mistake of thinking there's another time or another place where following God will come easier...You have everything you need for your contentment or misery within the confines of your own heart. That will go with you wherever you go. Every place has its pitfalls and absurdities, just as each has its opportunities and measures of grace...Where do you walk to? To other people who are just as silly, who simply have a different mix of blind spots and prejudices?...(F)or me at least there weren't any greener pastures. Or, if there were, they were somewhere inside me."

Taylor writes about the importance of the faith community, both current and our historical forebears. "The church must remember well if it is to function well today." We Christians have two millenia of heritage that we inherit, respect, and are thankful for. "We" ended the slave trade in England and then the West, adopted abandoned children in ancient Rome and promote adoption and foster care today, preserved ancient literature during the Middle Ages, elevated the status of women, continue to feed and clothe the hungry, and so on. Our local faith community is not one we walk away from lightly, we accept one another, love one another, pray for each other, share with each other, and provide accountability and stability in relationships that all humans need.

"The community is (also) 'the place where the burden of doubt can be shared.'" Taylor writes that this particular aspect is "foreign to actual practice" but quite biblical. He warns the reader to guard against cynicism. The reflective Christian has trouble committing to something he is not completely certain about. We would rather think about it some more, and definitely not be looked at as an example. In doing so, however, we miss out on the benefits of exercising faith (and rob the community of the benefit as well).

My review cannot do this book justice, so I highly recommend it. 5 stars.

Monday, December 19, 2016

The Elements of Investing by Malkiel and Ellis (Book Review #78 of 2016)


The Elements of Investing: Easy Lessons for Every Investor

I read this book after Malkiel's Random Walk Down Wall Street. That's a good and thorough explanation of the WHY in this book, without so much the practical application for the individual-- hence he wrote this with Charles Ellis. The book has a foreword by the CIO of Yale University. If it's good enough for Yale...

Much of the book has the same advice as you'd find in a Dave Ramsey or other financial basics course. Pay off your debts, do not take on credit card debt, save all you can and take advantage of the "magic" of compounding interest, avoid insurance products you don't understand, etc. Where it differs is on investment advice, where some groups (Crown Financial, Dave Ramsey, etc.) advise you to pick one of their own certified investment managers, Malkiel would encourage you to open your own Vanguard fund. Use index funds. Only buy index funds with <=0.2% in fees. Once you factor in fees and risk, you're guaranteed to be better than 2/3 of actively managed mutual funds. (The book also looks a bit at index bonds.) Pick a strategy and stick with it (I recommend Jim Paul's What I Learned from Losing a Million Dollars as also helpful on this point). Asset allocation makes up more than 100% of investment returns. Consider an allocation according to your age, investing more heavily as a percentage of your portfolio in low-risk/low-return assets like AAA bonds as you age. The authors examine Warren Buffett and note his wisdom of avoiding the herd. Dollar cost averaging is one way to ensure you go against the herd, putting in a constant dollar amount that buys more during downturns and less during booms.

I give this book 4 stars out of 5. I would give it to someone before recommending a Dave Ramsey course, it's cheaper for one.

Nobel laureate Harry Markowitz reviewed it best: "These noted authors have distilled all you need to know about investing into a very small package. The best time to read this book is when you turn eighteen (or maybe thirteen) and every year thereafter."

Saturday, December 17, 2016

A Random Walk Down Wall Street by Burton G. Malkiel (Book Review #77 of 2016)



A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Ninth Edition)

"The entire investment industry is built on the illusion of skill." - Daniel Kahneman

This book has been on too many colleagues' bookshelves to have not read it before. Alas, I knew well what it was about from other books. I was glad to find a 2007 edition in which Malkiel can reflect on events since his first 1973 edition was published. I followed it with Malkiel's book The Elements of Investing. While he chronicles the development of other fields since 1973, such as behavioral finance, Malkiel's overall take is that they have added little to his own thinking on investing and only highlighted the cognitive biases that make fools think otherwise.

No one can "beat the market" because no one can say with 100% certainty that "the price is wrong." Malkiel begins by looking at the various strategies of portfolio analysis. Firm Foundation theory by Benjamin's Graham and David Dodd is what they still basically teach in business school. This involved looking at the "fundamentals" and relies heavily on projecting future revenue streams to discount and get the present value. Others have built on this work over the years but Malkiel, Eugene Fama, and others' criticisms are the same. Analysts are wrong, and not single analyst can know with absolute certainty all the information about one company AND all available information about ALL OTHER companies, which would be necessary to determine "right" price. Even if an analyst's analysis adds value, it costs something in fees. Once one accounts for fees and risk premium, returns from actively-managed portfolios picked by "fundamental analysis" do not beat the market. 75% of actively managed funds are beaten by index funds every year. Actively managed funds often have fees 15 times that of indexed funds-- study after study finds they underform AND cost you more.

Peter Lynch had returns at Magellan that outperformed the market for decades, if there is an exception to the rule it may be him. Lynch also holds to a form of fundamental analysis, advising investors to research heavily into companies and be familiar with its products-- "invest in what you know." Warren Buffet invests similarly, citing Graham as his model. But the above critique still applies--if so many others have applied the same analysis, why haven't they all beaten the market? Human psychology loves to pretend randomness doesn't exist. The "hot hand" has been proven time and again not to exist, yet people still "see it." As Nobel laureate Daniel Kahneman puts it "There is general agreement among researchers that nearly all stock pickers, whether they know it or not – and few of them do – are playing a game of chance." If 1,000 portfolio managers had a 50/50 chance of beating the market annually, then odds are that after a decade there would be one who had done it every year-- by randomness (try it with a coin yourself). Lynch also put premium on young, growth stocks. But if a stock is growing, why is it growing and how long will it continue? Analysts look for "momentum" and even financial officers at companies will try gimmicks like stock splits to add "momentum" to their company's price but which hundreds of studies have found worthless. IPOs underperform the overall market by 4% annually.

Malkiel investigates every rule and theory out there--CAPM and everything else--and presents plenty of evidence that convinces him they're inadequate. The modern "quants" have done no better (and as Nassim Taleb points out, they all get fired every decade or so when the next big crash happens) and modern portfolio theory has little to offer. Beta will always be impossible to measure correctly. While Markowitz showed that diversification rules, and Nobel laureates have devised equations for proper diversification, you cannot diversify away systemic risk. There is no evidence to support "dow theory" and "breaking barriers" and "support levels" that you might see some CFAs write about also has little demonstrated scientific support. Malkiel comments on recent books claiming the market is indeed predictable, a sad irony to the collapse of 2007.

Malkiel examines the history of crazes, manias, and bubbles. Schiller and others have written on this and come up with their own theories, but even these are difficult to prove. Even when one shows that fundamentals are way off, no one knows when the bubble will burst. The market can stay irrational longer than you can stay solvent if you're betting the other direction (Keynes). The author examines Keynes' chapter on storck markets in his General Theory-- his "castle in the air" theory. To Keynes, fundamental analysis did not matter as much as the "beauty contest," ie: what do you suppose everyone ELSE will think about this stock? That's half of what financial shows on CNBC are-- ways for people to make others think their stock is prettier than it is.

The author gives a rundown of behavioral finance, Kahneman and Tversky, experiments demonstrating irrational behavior and cognitive biases, etc. The investor does want to be aware of herding, but one can never know how long or how far the herd will run. So, the price is not always "right" but we have no way of identifying a more right price than the market-- we can never say when it will reach that "right" price and how much everything else in the world will have changed as it reaches that price.

Malkiel parlays all of the above into his basic advice on saving and purchasing insurance. Avoid active funds, avoid fees. In 1973 there were no index funds, now you have the ability to track the Russell 3000 Index. He answers the "guaranteed mediocrity" criticism that I see in some of the negative comments on this book.

Oddly enough, Malkiel closes by giving some advice on picking stocks. I suppose it's a "if you must pick stocks, here's how you should do it" but I found it really weakened his other premises. There are some tax-advantaged strategies, such as selling your losses at the end of the year to take a tax write off, which makes sense over a rigid "buy and hold." There are other strategies, for which I recommend Jim Paul's What I Learned from Losing a Million Dollars that Malkiel does not cover here-- such as set a hard rule for how much loss you're willing to take before you sell. That puts a floor on your losses. Pick a strategy/style/group of companies that you invest in and stay with it. Don't let someone talk you out of it as it's unlikely anyone can prove your strategy is any better, and you'll lose more money when you deviate from your rules.

Malkiel explains options and futures and their usefulness in hedging, while not recommended for the average investor. But it seems Malkiel totally believed from his 2007 publishing that there would not be a worldwide financial meltdown related to the derivatives traded on real estate. Hmm, that didn't work out well did it? The 2007 collapse is the ultimate example of the myth of skill-- no one has perfect information, and plenty missed the fact that CDOs and the credit default swaps written on them were a ticking timebomb that would drive a lot of fundamentally sound companies (many on Jim Collins' Good to Great list) out of business in months. That error brings the book down to 4 stars. Still the best book out there arguing against modern portfolio theory and actively-managed funds.

Thursday, December 15, 2016

Make It Stick by Brown, Roediger, and McDaniel (Book Review #76 of 2016)



Make It Stick: The Science of Successful Learning

This work is compiled by a writer working with a psychologist and a cognitive scientist. They answer the question: What works? This is useful if you're trying to learn something, but I found the most immediate application as an undergraduate faculty instructor (that is really the target audience. There are plenty of examples for teachers and it gets a bit repetitive in that regard). If you've ever read a Tim Ferriss book (4-Hour Workweek, etc.) you'll be familiar with some of the concepts. Other books that Make it Stick will encourage you to read are Daniel Kahneman's Thinking Fast and Slow, Angela Duckworth's Grit, and Joshua Foer's Moonwalking With Einstein. (If you have read these, don't bother with this one.)

My key takeaway from the book are that flashcards and quizzes are good. I have used Anki flashcards for year (free, powerful) to help retain languages and other needed info. Anki has an algorithm for displaying words in order of need-- spaced repetition. The authors give the science backing this up. Similarly, in a classroom setting frequent quizzes are shown to help students retain information better than infrequent exams. Cramming leads to fast forgetting, but consistent quizzing retains it. They cite the example of a professor who moved from giving a couple exams to nine quizzes explicitly dated in the syllabus. Students reported higher satisfaction and attendance was better as well.

When reading or studying something, you should not just read, highlight, and repeat. You need to rewrite chapters in your own words. (Basically, study it like you have to teach it.) Mistakes are good-- mistakes change the brain and build retention. Don't just practice one thing over and over again, mix it up.

The authors have a chapter on cognitive biases and various psychological studies you may have already seen in media (on in these authors' article in Scientific American). They cover Kahneman and Tversky's "System 1" and "System 2," as well as topics like false memories. They tell the story of the famous marshmallow test and the better outcomes of people who show resistance to immediate reward in exchange for greater long-term reward. Grit is important, as is understanding that there is no such thing as "learning styles." There are not "audio" or "visual" learners, etc. according to current science. Everyone can learn using the methods in the book-- it is a matter of time, repetition, and mixing up styles to exercise your brain. Our intelligence is "fluid" and we can increase them through doing exercises focusing on working memory.

The authors talk about memory champions such as Joshua Foer. These use mnemonic devices and have ways of compartmentalizing items in their brains to achieve truly astounding feats with memory. Having retrieval cues is also important.

The older I get, the more aware I am of the "curse of knowledge"-- we all underestimate how long it takes someone to learn what we have learned. I forget when talking to a 19 year old student that his thoughts will not be as well-developed as mine on a topic, nor does he have the various memories of various events that I do from having grown up in a different time period. This is one of the main challengers for an educator-- finding ways to present material to students in engaging ways such that they will retain it (and not bore yourself over time) and remember that incoming groups may know less and less about a topic every year. Frequent quizzes are one clearly-demonstrated way. I give this book 3 stars out of 5. You can get most of it from other books and articles. (This book may have been ground-breaking when it came out, but it's overpriced now.) But it's short and delivers.

Tuesday, December 13, 2016

American Diplomacy in Turkey by James W. Spain (Book Review #75 of 2016)



American Diplomacy in Turkey: Memoirs of an Ambassador Extraordinary and Plenipotentiary

I read this book after reading the 1893 memoir Diversions of a Diplomat in Turkey by American Minister Samuel S. Cox (available at archive.org, and see my review). Spain is writing 90 years later, as a true Ambassador, and from a different capital, but much of the observations and meanderings of the pen are similar. Diplomacy is boring. I write this review as a conditional hire of the State Department as a Foreign Service Officer; it's been my lifelong dream to work in diplomacy. I happen to also aspire to live and work in Turkey, which I did for a year once. Hence, this out-of-print book was a must-read and I gladly bought it used for a decent price. This book is a good read on life in the Foreign Service and how the staff of an embassy serves their Ambassador, and what he does all day/night. (Page numbers are missing from most of my citations because my camera did not capture them.)

Anyone interested in modern events in Turkey should enjoy the first couple chapters of this book which deal with Spain's early days in Turkey and the coup of September 12, 1980. The unrest and evacuation of American families in 2016 pales in light of the killing of several Americans in Turkey in the late 1970s, including one who had spent years in service to the consulate in Istanbul:
"(A)ttitudes toward personal security had changed (since 1974)...By February of 1980...seven U.S. citizens had been killed in the previous year--and one more, an old friend, was to die before that awful winter was over. Now, things were being taken seriously." (Spain doesn't mention it, but I think some of the 1979 deaths during the uprisings after the capture of the Grand Mosque in Mecca by Sunni radicals, for which America and Israel were wrongly blamed; there were attacks on US consulates in Turkey and elsewhere.)

The Turkish constitution at the time made it difficult for a ruling coalition to last and bring stability. As inflation and violence spiraled upward (at one point it seemed that every Turk was carrying a gun), civil services and political cooperation spiraled downward and it seemed inevitable the military would intervene. Spain's staff spent much of 1980 ferreting for information and sending it back to Washington. On the night of the coup, his team actually neglected a chance to tell Washington it was underway because there had been several false alarms.

He puts to bed the notion that the Embassy or CIA was somehow behind the coup, which was claimed by Soviet media and is almost accepted as fact by most today. (Probably won't change any minds, but American capabilities are always far less than conspiracy theorists dream up.) While the coup happened too late to be printed in Soviet morning newspapers, they were out the next day in the US. Soviet propoganda ignored the time zone differences, it was easy for US news channels to cover word of the coup on television as the event happened in the afternoon/evening in the US. But what was less easily deflected is that the Turkish General Staff that directed the coup were all acquainted with the Ambassador and had attended parties at his residence. As his wife remarked "I never knew even one member of a military junta before, and all six of these have been in our house the past couple weeks."

Spain writes about the relief of law and order that arrived with curfew. Gone were the marches, strikes, and violence. Soldiers worked to scrub grafitti off buildings and streets could be cleaned. He notes that "several hundred more terrorists were rounded up, including some from the Marxist-Leninist armed propoganda unit (which had killed a US Navy officer just prior)." While he writes that at least 50 parliamentarians were arrested, and several leaders put under house arrest, Spain does not delve much into the long-lasting implications of this. I doubt he could imagine that decades later Gen. Kenan Evren would stand trial (he was elected President with 90 percent of the vote in 1982), and the arrests and torture of citizens would become a focal point of Turkish art and culture in the early 21st century; the memories of the coup perhaps dooming 2016's attempt from the start.

From Washington's standpoint, stability had arrived. "Long-standing debts" were paid, long-stalled treaties were finally ratified. It suddenly became easier to provide security for US sailors and visiting parties. But Spain and other visiting US Congressmen (and other NATO partners) pressed the Turkish government on a timeline for a return to free elections, as well as better relations with NATO ally Greece, enough to be annoying. Spain notes that the new draft constitution put "restraints" on the press and universities but left "considerable domestic freedom... (and) what most Western nations call democracy."

The junta left Turgüt Özal in his post in charge of the economy and supported his plan of privatization, eliminating subsidies, a flexible exchange rate, reducing barriers to foreign investment, and bringing down inflation. The subsequent economic growth allowed Turkey to negotiate better credit arrangements.  Spain writes that "a few thoughtful Turks" pointed out that Atatürk's disciples had opposed such reforms due to the lack of contextual understanding of Atatürk's time. Atatürk had indicated he looked forward to the day when Turkey was attractive enough for foreign investment. Özal and Spain conversed on several occassions, and Spain was able to get Özal to listen to US business concerns when CEOs visited (Spain cheekily gives credit to "Allah, always a powerful force in both business and diplomacy"). Özal ran in opposition to the regime in 1983 and was elected Prime Minister.

In his official capacity, Spain attends and hosts several parties a week. (In this sense, the junta's curfew was a godsend.) He explains the pecking order of diplomats and some of the awkward occassions of conversing with a PLO representative or other sort. Parties are the chance to pass along messages to the Turkish government and bring up issues of importance. The US was looking for all the cooperation it could get on the Iranian hostage crisis, and Turkey was loathe to do much.

Any "tense" moments in the book are instances like when Spain pushes back on an official letter from President Carter, expressing concerns about wording and suggesting edits (via telegram) hoping for quick turnaround before he has to present said letter to Gen. Evren or others. In 1981, Spain and his team help during an airline hijacking and hostage taking by Dev Sol (The Revolutionary Left). At some point, a mysterious group of Dept. of Defense employees arrive in Turkey ostensibly in regards to scouting an operation in Iran to free the hostages (p. 201). Spain gets concerned about their mucking about without the Embassy or the Turkish government aware of what they're doing and he sends them packing; he later learns this annoyed unnamed people in DC but was wise in hindsight. (One wonders what this almost-chapter in history was.)

If you're a foreign affairs/diplomacy wonk you will also enjoy the tales in this book from his posts in Karachi and Dar es Salaam during the Nixon Administration and his dealings with Henry Kissinger. Spain happened to accidentally get in the middle of the Pakistanis' secretly carrying Nixon's overtures to China in 1969 before Kissinger secretly visited said country (p. 196). (Kissinger also once saved Spain from a Secret Service agent.) Kissinger had a strong personality known for sending strongly-worded telegrams on various subjects to be communicated to the powers-that-be, Spain's wording is diplomatic but you can tell his displeasure. I would enjoy Spain's later autobiography, this book contains few personal details about his life and early service days.

From a hopeful Foreign Service standpoint, there is much about embassy operations in this book. Hosting and coordinating visits of various US delegations is one difficulty, as is arranging various meetings with foreign dignitaries. Much of the work involves writing official communiques with Washington. There was one airline hijacking/hostage situation the Embassy had to work around-the-clock on in the book. The Ambassador makes decisions to benefit the most where possible, requires Solomonic wisdom in divvying up available housing, and they occassionally has to spend from his own pocket to host parties for US staffers or even to pay some of the staff at the official residence.

Spain had previously served at two posts in Turkey from 1970-1974 and clearly wanted to be appointed to return when the opening came up during the Carter administration. That whole process is as amusing as archaic bureaucratic processes can be-- you get used to it in working for the State Department. Spain's nomination is held up by an apparently well-meaning Senator Javits who is concerned about Spain having once had some connection in his early career to the CIA. Spain notes that such concerns by Congress were becoming less frequent; foreign policy has been increasingly centralized in Washington, DC and Ambassadors do not have as much autonomy as they did in, say, the late 1890s. He writes that JFK was the last President to regularly communicate with envoys going to and from Washington. "(T)he more decisions that are left to embassies, the better U.S. foreign policy interests are likely to be served," he moans (p. 207).

Spain and his wife desired a post in Turkey for a reason-- it is magical and important. They enjoy "'being in Turkey' more than the formal duties of our stay there" (p. 121).
There are always sights to see, new archaeology being discovered, no shortage of beaches, mountains, or other destinations. It also borders Iran (this is during the US hostage crisis) and the USSR, making the Embassy hugely important. The Ambassador is a Turkophile and seems to be well-read in old books he finds in the British Embassy's library and elsewhere. He writes that he could speak an "elementary school" Turkish, which was enough to give long toasts and put most other Western Ambassadors to shame. He fills many of the pages with stories of outings with family, shopping, etc. that seem more for his own family than a general audience. As such, the book lacks any information about the majority of Turkish people, you only get a view into the lives of the "elite."

When the Reagan Administration made controversial appointments to embassies upon taking office, Spain is one who is surprisingly replaced. He is diplomatic in his disappointment, not mentioning his replacement by name and only stating that he had pulled considerable political strings to get the job. (The fallout results in Congressional action to strengthen the career Foreign Service.) I give this book 4 stars out of 5, mainly because I want people to find it and read it.

Monday, December 12, 2016

Fault Lines by Raghuram Rajan (Book Review #74 of 2016)



Fault Lines: How Hidden Fractures Still Threaten the World Economy

This is one of the books on the 2007 financial crisis that is ostensibly worth reading due to the CV of the author-- former IMF Chief Economist, later in charge of Indian monetary policy as Governor of the Reserve Bank of India. (Writing this in late 2016, perhaps PM Modi's botched reforms show how much Rajan was missed in opting to return to academia than return as Governor for a second term). Rajan has international gravitas and has thought about poverty and development in multiple ways. I would probably have enjoyed Saving Capitalism from the Capitalists (2004) more, but this book was available and I trust it contains similar criticisms and policy prescriptions. I read a host of books on the crisis while/after it was happening because I was teaching undergraduate economics full-time. For a list of a few I would recommend with this, see below (or my Financial Crisis bookshelf on Goodreads).

Rajan is famous for showing up at the Federal Reserve's Jackson Hole retreat in 2005 and warning of the CDO time bomb that no one wanted to hear about; it was ticking while everyone just wanted to praise Maestro Greenspan out the door. Mr. Rajan is apparently unwilling just to rest on that career highlight for credibility, he seems to have to throw some bones to the liberal establishment in an effort to be taken seriously while he adopts some critiques of the US government that have been rejected by left-leaning economists. As a result this book pivots from the financial crisis to education and health care reform, sometimes using examples from India as prescriptive and ignoring the various nuances of programs like Medicaid across 50 separate states. He adds little to reform proposals made by others and closes with vague but wide-sweeping policy prescriptions and new spending programs while somehow ignoring the massive risk the US faces in its long-term debt position vis-a-vis Medicare, not to mention trillions in unfunded pension liabilities.

Rajan is interested in identifying systemic fault lines. This is difficult to do in practice, just read a Nassim Taleb book-- even if you identify it you cannot be assured of diversifying it away. (You might reduce volatility in the short run, but make the fat-tail risk larger.)
The biggest fault line is that the goals of capitalism and democratic politics do not align. Another is the rise of inequality, the top 10% relative to the bottom 90% (now the gap is widely debated after Pickety's book came out and Emmanuel Saez put out his paper that the gains to the top 0.1% explains almost all the 90/10 gap). Rajan speculates that the 90/10 wage differential is driven by the increasing college education premium-- those being left behind are largely the lesser-educated. Perhaps 1/3 of the inequality problem may also be a picture of entrepreneurs and graduate students going from very low incomes as they start out to very high incomes later--ie: mobility matters and may make the inequality problem look worse than it really is. Assortive mating may also explain some of the inequality-- similarly educated/income class people marry people from the same class.

Rajan explains the housing bubble as a response to "insecurity" of middle-class wage stagnation. People envy the upper incomes getting richer and compensate by saving less and borrowing more. One way to quence the insecurity is to buy a house. Housing demand aligns with the goals of politicians-- to increase private wealth, property values (and local tax revenue), create jobs for lower and middle class voters (construction), demonstrate "development" and so forth. There is also the belief espoused by every President in the last 100 years of the  "ownership society," when people own rather than rent they take better care of their property and society is better off. Hence, the government likes to find ways to encourage home-building, such as subsidizing low-interest loans and making mortgage interest tax-deductible. (See Ferguson's Ascent of Money for a more complete take on this history in the US in the 20th century.) Rajan begins his blame with the 1960s in privatizing Fannie Mae and Freddie Mac, and the 1970s-1980s deregulation of thrifts. While privatized, there was still an "implicit guarantee" on Fannie and Freddie's debts, particularly in the eyes of foreign creditors. (I once heard a talk by St. Louis Fed President Jim Bullard about the anxious days of the crisis when Bernanke was dealing with such creditors and quite angry. While Paul Krugman and others on the Left wanted to basically absolve Fannie and Freddie from guilt, Rajan rightly holds them and their political enablers accountable. While Rajan blames the Bush administration for further pushing home ownership, he neglects that Mankiw and others tried to deal with the implicit guarantee problem.) The Clinton Administration pushed to dramatically decrease the downpayment required for an FHA loan, and the Bush Administration further accelerated this. From 2002-2005, zip codes with lower incomes saw the most dramatic increase in housing investment. This is politically feasible until the buyer can't make payments, the adjustable interest rates go up, etc.

Chapter Two examines the export-led growth model (for which Yergin and Stanislaw's Commanding Heights is an excellent history and reference). Rajan critiques the "Washington Consensus" of limited government intervention in the economy to stimulate private-sector growth through exporting to the developed world (Stiglitz's Globalization and Its Discontents is another helpful book here). Rajan writes that while an export-led model allows for growth and innovation even in a command economy, export-led economies find it difficult to switch to the service sector after they have matured (ie: after incomes have risen considerably). Japan is one example of this phenomenon, having built an export-led model of exporting vehicles and electronics, and now being dependent on other countries' stimulating their own economies in order for Japan to grow again. This is a major fault line for the world economy. Rajan discusses the Chinese model as well, noting that China's one-child policy boosted its savings rate because the social safety net of parents relying on children can't be present with such a policy. Hence, capital flows to the US and boosts the value of the dollar and helps stimulate Chinese exports. The US' "jobless recovery" of the 2000s, which the Fed responded to with low interest rates, may also have been affected by China's refusal to revalue the yuan during that period.

Rajan recounts the controversial IMF decisions aiding the East Asian financial crisis of the 1990s. Surprisingly, Rajan never mentions the role of the collapse of Bretton Woods (under Nixon) in the capital imbalance problem. The US "closing the gold window" on the balance of payments made the US dollar the default reserve currency of the world and boosted it to a seemingly permanently strong status relative to other countries, which helped start the export-led model in the first place, as well as America's penchant to borrow to fund its deficits. These are not easily reversible. Rajan also seems to ignore the effects lifting of capital controls during the same time period. As a result of these things, which Rajan does not spell out clearly, the Federal Reserve's monetary policy is exported to the rest of the world. Rajan blames the Fed for "blowing up the housing bubble" without spelling out the history clearly.

In examining Fed policy, Rajan critiques the "Greenspan put," and the willfull ignorance of rapidly increasing asset prices at the end of the Greenspan era. Rajan essentially makes contradictory statements about the Fed's ability to identify and limit asset bubbles. He blames the Fed for not deflating the housing bubble while acknowledging the problems of such a policy change. He writes the Fed should have triple mandate of looking at asset prices and risk as well as inflation and unemployment. (Many economists have written on the difficulty of such a policy.)The Fed ignored the effects of strengthening the 1977 Community Reinvestment Act that was pushing banks into loans in communities where they would most likely be defaulted on. (Congress basically absolved the CRA, as did Ben Bernanke, but conservative economists and politicians have tended to agree with Rajan.)

He doesn't just blame the Fed, he examines why so many banks kept risky assets on their books, buying into their own fantasies (see The Big Short for how different arms of banks took sometimes opposing trading positions). The main problem was that the risk was not properly priced into the assets. Credit default swaps were undervalued and houses were overvalued. Rajan also explores the problem of "too big to fail" and systemic risk. Does the financial sector allocate capital efficiently? No, not if assets are mispriced due to the undervaluing of risk. He proposes the common-sense solution of ending government subsidies to financial institutions anad implicit guarantees. Given that little has been done to reduce the subsidization of housing in the US and institutions like the FHA still take very low downpayments and banks were allowed to get even bigger, even common sense solutions run into political realities and cognitive dissonance. Nevermind the "cycle-proof regulations" that Rajan proposes.

Beyond government subsidies, Rajan encourages actions in the private sector as well. We have to find ways to eliminate the temptation of bankers to take on "tail risk." That would require a real change in how CEOs are compensated. Rajan wants corporate boards to have members with more financial expertise. He also wants standardization of assets to make them easily comparable and easy to see what's inside. He calls for breaking the problem of "cognitive capture" of regulators and policymakers. He wants to end "too big to fail" and prohibit mergers and somehow measure intertwined exposures to measure the real systemic risk of institutions. Perhaps thinking from an IMF standpoint, he proposes a limited "systemic bailout fund." (The Fed and Treasury were able to use such thinking when they bailed out Mexico under the Clinton Administration.) But, how big should such a fund need to be and wouldn't it be tempting for Congress to tap into it for bailing out, say, an auto industry or defense contractor? Rajan doesn't give many details. All of these proposals have been echoed by economists and politicians on the Left and Right since 2010, but little has been done. Whatever little Dodd-Frank did to increase regulations of the financial sector, President-elect Trump publicly put immediate repeal into his platform.

Sadly, he would rather the Federal Reserve pursue the more complex triple mandate and makes no mention of the idea of a Nominal GDP target which is disappointing to me (a market monetarist whor reads Scott Sumner and David Beckworth). Instead, he goes on a longer rant with little to do with economic or monetary policy and sounds like he's running for public office with a bunch of vague policy prescriptions: We need to "work on things that work." The US needs a longer school year and better teachers. We need universal preschool and subsidies for nutrition education and free lunch. We need to reduce unequal access to education to attain human capital. Universal health care and other health care reforms that (look a lot like the Affordable Care Act). We need to examine a value added tax and a carbon tax to reduce the deficit (without mentioning how much wider the deficit would be with his other policy proposals). At the same time we need to reduce the deficit, we need to increase household savings. There's not much call for sacrifice here. No mention of the $2-$3 trillion in unfunded pension liabilities the 50 state governments and various localities have to deal with. I could go on.

Rajan closes by explaining IMF policy and the various debates and controversies that surround it. He advocates customized policy and not "one size fits all," "Washington Consensus"-style policies. He encourages multilateral cooperation, which always conflicts with the local politics of sovereignty, but multilateral agencies like the UN, IMF, World Bank "should be given the benefit of the doubt." Rajan doesn't seem to notice that history often repeats itself worldwide and people are largely ignorant of history. If he really thought about all the systemic risks out there, and how we're ignoring them (unfunded pensions, climate change, the growth of nationalism, etc.) it would basically spell doom for us. He somewhat addresses this in the epilogue, but not satisfactorily. Three stars out of five. He has succeeded in identifying several global financial fault lines but also ignored or not seen others.

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Other books on the global macroeconomy and financial crises I recommend as a prerequisite for this book:
The Commanding Heights by Yergin and Stanislaw.
The Ascent of Money by Niall Ferguson
Fooled by Randomness (or other works) - Nassim Taleb
The Misbehavior of Markets - Benoit Mandelbroit
Globalization and Its Discontents - Joseph Stiglitz
Irrational Exuberance - Bob Shiller
Specific to 2008 crisis:
Slapped by the Invisible Hand - Gary Gorton (recommended by Ben Bernanke)
13 Bankers - Johnson and Kwak (Johnson former IMF Chief Economist)
The Big Short - Michael Lewis
The Subprime Solution - Bob Shiller

Friday, December 09, 2016

1177 B.C. by Eric H. Cline (Book Review #73 of 2016)



1177 B.C.: The Year Civilization Collapsed (Turning Points in Ancient History)

This book presents Cline's research on the collapse of several societies around the Mediterranean during the Bronze Age and explores mysteries such as "Who were the Sea People?" It helps connect the dots between several peoples at the time and an attempt to recreate (with much uncertainty) what might have brought about the simultaneous collapse of these cultures.

It is not that this is a bad book, but the author has unfortunately chosen to sell it by linking the promo to the modern world and picking an arbitrary date in which "civilization collapsed." I was intrigued because Tyler Cowen seemed to like its promo: "The economy of Greece is in shambles.  Internal rebellions have engulfed Libya, Syria, and Egypt, with outsiders and foreign warriors fanning the flames.  Turkey fears it will become involved, as does Israel. Jordan is crowded with refugees. Iran is bellicose and threatening, while Iraq is in turmoil." This is silly as those nations as we know them today did not exist in 1177 BC and such words could be written about many time periods in history. Cline doubles down, however, by trying to draw parallels between the ancient and modern world. For example, what oil is to the modern economy tin was to the ancients. Those types of stretches are not necessary.

I was pleased to see that Cline collaborated some with Israel Finkelstein and Neil Silberman, whose book David and Solomon I reviewed shortly before picking up 1177 BC. But like those authors, you are just as well to skip the book and read the articles the author has posted online (for Finkelstein look at Academia.edu). This article Cline wrote in September does a decent job if you want the gist. http://asorblog.org/2016/09/07/ask-nep-sea-peoples/  Another help to me was having lived in Ankara, Turkey and visited the museum of Hittite culture there and seen the relics of Hattusa and elsewhere. Jared Diamond's Collapse is also probably a must-read, as is Acemoglu and Robinson's Why Nations Fail. If this part of the world doesn't interest you, you will be unlikely to enjoy it.

I study the Bible and recently spent a long time looking at Genesis to the exile, reading several books and commentaries comparing various hypotheses on the origins and possible dates of a Jewish migration from Egypt. Cline is pretty fair to all viewpoints, noting that biblical historians favor the 1400s as the time of the Exodus, whereas archaeologists favor the 1200s, and there is room for debate on either side. In some cases, Cline's work on the Sea Peoples rebuts some of what Finkelstein wrote rather confidently in his work. (Finkelstein claimed the description of Goliath's armor in 1 Samuel could only be that of a Greek hoplite of later post-exile Hebrew invention. But Cline writes that sketches found in Egypt of the Sea People from the 13th-12th centuries vary in their description and some sketches may contain either Sea People or ancient Greek warriors clad similarly to the biblical Goliath.) The book is a good reminder that archaeological theories change constantly with evidence, trends, and who gets funding or publicity. Hypotheses that solidify into theories in one century may be discarded the next, so take everything you read with a lump of salt.

Cline recounts what is known or suspected of three Sea Peoples invasions of Egypt and Palestine. Egypt was basically in decline from the 1500s until Shishak led a brief revival in the 900s. Egypt bore witness to struggles in Palestine among various peoples, some of whom Egypt had authority over during various periods. An example was the ~1480 BC battle of Megiddo in which Thutmose III fought to pacify a Canaanite people. (Gen. Edmund Allenby was conscious of this history when he fought the Battle of Megiddo in WWI.) There were also major battles between Egypt and the Sea Peoples but the various origins, tribes and distinctions named by the Egyptians are lost to us today--we can only hypothesize. Another mystery of this period is who razed several cities in the Mediterranean just before the migration of the Sea Peoples? Mycenaean cities were destroyed and their civilization was sent into decline. Was it the Sea Peoples? Earthquakes?

From Canaan, Cline shifts to the discovery and known history of the Hittite civilization in Anatolia. The Bible sometimes uses "Hittite" to describe the later descendants of these people in Canaan, the remnants of the empire. In 1595, the Hittite army sacked Babylon and apparently remarkably returned home, not expanding the empire. In 1430, there was an Anatolian uprising against the Hittites that may have some legendary connection to Homer's Trojan War. The Amarna letters showing Akkadian-written correspondence between Egypt and Canaanites give some insights into the Hittite world as well; some correspondence was between Pharoah and a Hittite king. Egypt allegedly supported the uprisings in Anatolia and perhaps supported other powers against the Hittites as well. Archaeologists have determined by looking at the range and type of artifacts originating in civilizations found in foreign cities that Hitties and Mycenaean on the island of Crete apparently did not trade with one another for centuries, they were in a deliberate state of war. The Hittites and Egyptians did fight in the 1200s, resulting in a treaty under Ramses II. The Egyptian-Hittite rivalry roughly prefigured the later Egyptian-Assyrian and Egyptian-Babylonian rivalries. THe rise of the Assyrians coincided with the decline of the Egyptian and Hittite empires, and the Assyrians began to assert their own will in places formerly under those kingdoms' influence.

So, from Anatolia to Canaan there was massive destruction around 1177BC. Cline believes there was a confluence of factors, a "perfect storm" that led to the collapse of these societies. There was widespread famine around 1250 BC that put stress on populations and led to migration. There were earthquakes in these regions that may be the cause of some of the devastation. Cline argues that the Bronze Age was a time of the first global economy and that their economies were too dependent on bronze. If you've read Jared Diamond's Collapse, you may remember a domino effect-- when societies are dependent on one another and specialize heavily and trade, they suffer greatly when something happens to one society, which then leads to the collapse of the other. Perhaps the Mycenaean decline hastened the Hittite decline which led to the collapse of Ugarit, Lachish, and other cities separated by considerable distance. Ugarit is one example of a city lost in that period around 1177 that had previously been at the intersection of Hittite and Egyptian influence; records indicate that it was overrun by Sea Peoples. Lachish, in Palestine, was destroyed around 1150 BC. Archaeologists and biblical historians have long suggested this was done by Hebrews in occupying the land, but the fact that it happened around the time the Sea Peoples were causing destruction elsewhere raises questions. Hattusa, the Hittite capitol, was destroyed by unknown culprits but presumably the Sea Peoples and perhaps with help from locals.

Along with the question of "Who destroyed Lachish?" is the question "Who were the Philistines?" and "When did Israelites arrive in Canaan?" It is thought that the Philistines are the later descendants of the Sea Peoples, but they could be the (migrants or descendants) from SW Anatolia as well. Archaeologists and anthropologists look for clues in commonalities in language, religion, structure, etc. Much remains mystery. But the archaeology does suggest that during this period Palestinian cities began to be overtaken by a technologically-inferior people, which fits the Biblical account of Joshua. The Philistines are recorded as having the ability to make iron tools, weapons, and chariots while the Israelites are not. Egypt's New Kingdom dynasty also ends, after a long decline, around the same period. War and an apparent decades-long drought (possibly due to volcanic activity somewhere, according to some scientists) contributed to this decline.

While the book really oversells its premise that we can learn much about today's complex society by learning from the apparent simultaneous collapse of many ancient societies, it is still a decent overview of what is known or believed about that period and what is still being learned by archaeology and ever-changing timelines and hypotheses. The author stresses that it is all still a mystery. It makes one sad to think of all the treasures and undiscovered information lost in Syria and Iraq due to ISIS looting and the battles there now. Perhaps even our 20th century history is just as good a lesson at how quickly nations can go from largely peaceful cooperation and trade to being overrun and borders redrawn. In all, I give this book 3.5 stars out of 5.

Tuesday, December 06, 2016

The Tenth Parallel: Dispatches from the Fault Line Between Christianity and Islam by Eliza Griswold (Book Review #72 of 2016)

The Tenth Parallel: Dispatches from the Fault Line Between Christianity and Islam

(This is one of several books I have reviewed recently that pertains in part to Islam and its relationship with Christianity, culture, and human rights and the review should be taken in the context of the other reviews. See the list at the bottom of the post.)

This is an excellent book that ought to be popular in missiological circles and might be required reading in a World Civilizations class somewhere. The author travels parts of the 10th parallel, a dividing line and uneasy mixing point of Christianity and Islam around the world. Christianity and Islam are both "in a revival" today and growing along the parallel, tribes on both sides increasingly competing for resources. There are 493 million Christians living below the 10th parallel, 367 Muslims above, writes Eliza Griswold. That's roughly 60 percent of the world Christian population, and about half the Muslim population. Both religions have distinctives in various locales, often times the religions grafting over earlier syncretic practices. But recent revivals also mean more conservative strains of both religions are growing; this has violent implications. This book is a great picture of these hotspots around the globe. My wife used to live along the 10th parallel in Niger, so I found the West African sections of the book most noteworthy.

If you're interested in learning more about the book, check out Terry Gross' interview with the author on  Fresh Air. I am not sure what motivates the author to write a book like this, she writes introspectively at times like she is on her own quest. That makes the book less boring, but might get in the way of her observations too much for others. Cultures along much of the 10th parallel are not kind to unaccompanied single women, but it's not clear if she had traveling companions in her seven years of travels. In one particular scene in 2003, she travels to Sudan with Franklin Graham to tour President Omar al-Bashir's palace where Graham and Bashir joke with each other about who would proselytize whom. Griswold is the daughter of a liberal Episcopalian minister who is opposed to Graham's evangelicalism. Graham would converse with Griswold over dinner, perhaps hearkening back to his own wandering past; she may have been skeptical but lets Graham lead her in the "sinner's prayer" and he later sends her a Bible (which she keeps for six years). Graham's charity, Samaritan's Purse, does an admirable amount of good around the world but there is a bit of a Western arrogance and awkwardness to his operation.

Non-Pentecostal American Christians have been concerned in recent years in the explosion of Pentecostalism in Africa, particularly that connected to the prosperity Gospel. 1/4 of African Christians are now Pentecostal and the number is growing faster than the population. The typical Protestant Christian is now an African woman, something that seems counter-intuitive. Likewise, 80 percent of Muslims live outside the Middle East even if the majority of literature on Islam tends to focus on the region of its birth.

Griswold wants to see "how both sides live," and attends events like an interfaith meeting in Nigeria. She recounts the history of the region, such as the story of Usman dan Fodio, a Muslim cleric who led his followers into exile in 1802 and preached reform that led to a West African-wide jihad/rebellion. The picture of a Muslim scholar publishing works in West Africa in a sort of caliphate seems somewhat unusual today. Sufi Islam mixes uneasily with Sunni Islam in these parts. In many places, Muslim tribes tend to have a more nomadic tradition whereas Christians are farmers.

The author notes an Emir in Nigeria who actively protects Christians from some of the violent uprisings of Muslim groups. Griswold notes that Muslim history records Muhammad showing mercy in his conquests, granting amnesty and giving up at least one opportunity for revenge. The author gives a brief history of African Christianity. One aspect was an early treaty with Christians in Nubia (Sudan) who had successfully repelled Muslim armies in the 7th treaty; the treaty lasted 600 years. (The Ashitname escapes the author's attention but is one historical document housed in Turkey in which Muhammad granted protection to monks and priests in St. Catherine's Monastery, including exemption from taxes, something that is long-forgotten in the 2016 mindset of ISIS.
https://en.wikipedia.org/wiki/Ashtiname_of_Muhammad)

Griswold traces the explosion in Christianity today to the evangelical missions push spearheaded by the YMCA in the 1800s. As the YMCA evolved, it went to port cities and other places where migrants might be likely to congregate. There are other Christian missions organizations, particularly as America grew and developed, that do not come onto Griswold's radar. Advancements in transportation also helped steadily increase attendance at the Hajj, which led to more Islamic missionaries as well. The post-WWII order put America at the front of operations involving aid and combating Communism. The author writes that this supported further evangelization. She cites a few anecdotes, such as Franklin Graham sending Bibles to Saudi Arabia in 1991 (and angering Gen. Schwarzkopff), but I would note that the the entire history of 20th century US foreign policy had mixed results for foreign missions and any aid benefiting Christian groups not quite so overt. My reading of works by missionaries and diplomats in the 1800s suggests that US policy was more overtly religious then, but the foreign policy itself was weak as the US was not a global superpower.

The British Empire often engaged in curbing missionary activities in areas, in order to keep the peace. In Sudan, Britain forbid Christians proselytizing above the 10th parallel. A would-be Mahdi arose and confronted Britain at great cost. When he died, there were decades of civil war and an actual line in the sand had to be drawn as a border. This legacy continues as most of the Christian work happens in the South of the country. After Sudan gained independence in 1956, lines were more tightly drawn as a new Muslim government seized mission schools and other Christian entities. The Muslim Brotherhood took root in Sudan after being ousted by Abdul Nasser in Egypt and did well in Sudan. In 1989, then-Col. Bashir led troops in a coup and has been in power ever since.

Famine has been one of the primary causes of war in the Sudan and elsewhere. Floods and drought both unite and divide in Africa. The author cites an Islamic belief that sin causes desert. Nigeria in the West had similar problems as in the East, there and elsewhere some Christian-affiliated groups are perhaps more well-known for atrocities against Muslims. She spent time among evangelical Christian and fundamentalist Muslims leading enthusiastic congregations in armed conflict against one another. The author also notes the conflicts in Ethiopia and Africa as well as their historic ties to Christianity. (Ethiopia even claims to house the Ark of the Covenant.) Now there are also Islamic-principled business entities that sound very similar to the Hizmet movement of Turkish cleric Fetullah Gülen, which is known to be active in Africa. (The author must have been ignorant of Gülenist work at the time of writing as she does not mention it or connect the dots.) Griswold writes that Christians in the East blame Christians in the West for not preaching the Gospel themselves, for not doing more in the way of aid, business, and other endeavors that might help their plight. Many in the West would agree with this criticism, particularly when they see the prosperity Gospel gaining such traction (the author visits a Nigerian megachurch). The author does note the increasing work of "creative access" missionaries, noting one connected to a major Western denomination that runs a fitness center in Africa.

From Africa, Griswold takes the reader to SE Asia. There, she witnesses a much more contentious atmosphere. She actually gets to interview and spend time with the Burnhams, the YWAM family that was kidnapped and held for 10 years. She notes the history of Dutch missionaries colonizing Indonesia. Now, there is increasing conservatism and division. Atrocities and revenge are becoming more common, as is weaponized rape on both sides. This part of the book paints Islam as darker. She notes one sector of Indonesia that has implemented Sharia law and the change now that vice squads keep tabs on young people as you might see in Saudi Arabia. She is clearly describing the spread of Wahabbism, (I would note that it was criticized as such by Sec. of State Clinton during the author's work) but does not spell that out. Griswold writes of American aid money flowing to Islamic causes with closer ties to the government while nothing goes to persecuted Christians. Christian charities and orphanages tend to be hated for proselytizing as well as educating girls. The pluralism ostensibly maintained by Suharto from 1967-1998 seems to have quickly given way to something else. After the rescue of the Burnhams, the US military quickly shifted from a hostage rescue to developing Indonesia's abilities to fight counterinsurgency as active Al Qaeda-affiliated cells were found in the country.

The same thing appears to be unfolding in Malaysia, perhaps the most technologically-advanced Muslim country in the world. Christians there may not proselytize or use the name of Allah for "God"-- which is difficult because that has been the traditional word for "God" in Malay (and other languages). Supposedly, the Malay government pays people to convert from other religions to Islam. A person'a religion is on their government-issued IDs, and that creates identification and pressure to convert. Sharia-based law is becoming more common.

Some Filipinos have publicly converted to Christianity only to go back to something else. Griswold notes a gathering of ex-Filipino pastors who are now Muslims. Some have converted for economic reasons, others because they have been caught in gross sin and were forced to resign. In all of these countries, native beliefs make contextualizing the Gospel a particular challenge. I was struck by one particular anecdote: a missionary/pastor explained the difficulty of sharing the Gospel and doing Church with one tribe because they believe that only evil spirits consume flesh, hence the Eucharist becomes difficult to explain even to the converted.

The author attends a Voice of the Martyrs conference. She is sympathetic with Christians who are being persecuted, particularly for Christian education, aid, and orphanage operations that are shut down in the name of Islam. But being a martyr is more complicated than just dying for faith. In Sudan, it had as much to do with tribe and race and history as it did faith. The author notes that in doing counterinsurgency and training foreign armies to fight terrorism, American weaponry simply increases the death toll on all sides. The most violent conflicts tend to be about the power of determining who gets to define what the "true" religion is-- who decides what it means to be a Muslim, Christian, or member of a particular tribe or ethnicity. In some cases, she's found stories of remarkable cooperation in the least-likely of situations. There is truth in Griswold's words, but her book does not reach any clear-cut conclusions in her mind; it's not particularly clear if or how her travels have changed her convictions.

The afterword is the story of Reverend Abdou in Niger. He travels some distance in the region to show a Jesus film. He doesn't seem prepared, has a clumsy approach, things don't go well. He evangelizes simply out of his love for Jesus and is glad to have converted, and makes no money from his efforts. From this, Griswold concludes that people and their internal faith are "complicated and not label-worthy."

I give this book four stars out of five. I note above some of the omissions, and there is a larger ambiguity about the text as the author seems to try hard not to draw conclusions or examine herself too deeply. I imagine she has seen much more than could fit in one volume. But it is a great view of several countries and very conversation-provoking.
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Other books helpful for understanding the above:
Books on reform, human rights, and the interaction of Islam with cultures:
Desperately Seeking Paradise - Ziauddin Sardar (5 stars)
Sam Harris and Maajid Nawaz - Islam and the Future of Tolerance (1.5 stars)
Reza Aslan - No god but God - The Origins and Future of Islam (2.5 stars)
Infidel - Ayaan Hirsi Ali (4.5 stars)
Heretic - Ayaann Hirsi Ali (4 stars)
Headscarves and Hymens - Mona Eltahawy (4 stars)
I Am Malala - Malala Yousafzai (5 stars)
I Am Nujood, Age 10 and Divorced by Nujood Ali (4.5 stars)
In the Land of Invisible Women -  Qanta Ahmed (4.5 stars)
Between Two Worlds - Zainab Salbi (5 stars).
City of Lies - Ramita Navai (3 stars)
Reading Lolita in Tehran -  (3 stars)
Half the Sky - Nick Kristof and Sheryl WuDunn (4 stars)
Seeking Allah Finding Jesus - Nabeel Qureshi (4.5 stars)

Books on the History of Islam, The Middle East, and Arab nations:
A Very Short Introduction to the Koran - Michael Cook  (4.5)
A Very Short Introduction to Islam - Malise Ruthven (3 stars)
In the The Shadow of the Sword - Tom Holland (4 stars)
In God's Path -  The Arab Conquests and the Creation of an Islamic Empire - Robert G. Hoyland (4 stars)
Great World Religions: Islam (The Great Courses)- John Esposito (1.5 stars)
Destiny Disrupted: A History of the World Through Islamic Eyes - Tamim Ansary (4.5 stars)
Brief History of the Middle East - Peter Mansfield (3.5 stars)
History of the Arab Peoples by Albert Hourani (4.5 stars)
The United States and the Middle East 1914-2001 (Great Courses) by Salim Yuqub (3.5 stars)
Islam Unveiled - Robert Spencer (1.5 stars)
Lawrence in Arabia - Scott Anderson (5 stars)