Fed Lines and Headlines

September 7, 2013
Posted by Jay Livingston


The Fed has been optimistic about the economy and has been hinting that it might scale back its aggressive bond-buying program.  But the jobs report on Friday was not encouraging – an estimated 169,000 jobs added. The really bad news was the shrinking of the labor force.  Apparently a lot of people are giving up the search for a job. 

Did the new data on jobs make the Fed reconsider its plans?  It depends on which  headline you read – the New York Times or the Wall Street Journal.

Here’s a larger version of the Times headline:

Is the Fed undeterred, or have its plans been muddied?  Once you get past the headlines, the stories say pretty much the same thing.  Four sentences after that headline about “muddied” plans, the WSJ said, “Friday’s jobs data did little to move the needle in either direction.”  Which is pretty much agreeing with the Times that the jobs report did not “deter” the Fed.

Habits of the Holland Heart

September 2, 2013
Posted by Jay Livingston

I spent a week in Holland, Michigan at the end of August (family, wedding), but I didn’t find out until now that also in August, the Atlantic was running a series of blogposts (here, for example) about Holland by James Fallows, who was also hanging around town. 

Fallows writes admiringly of Holland.  A strong sense of civic engagement has kept the downtown vibrant while elsewhere in the US, downtowns have had their life sucked out by the malls and bigbox stores at the periphery. That civic sense probably has something to do with Holland’s history as a conservatively religious Dutch town.  It’s hard to miss the Protestant presence. Churches and church schools abound. So do Dutch names. Also windmills and tulips.

On Holland’s main street, this banner –  a spoof on “American Gothic” – conveys the dour Dutch Reform sensibility and the tulips. The civic engagement is less obvious, contained perhaps in the idea that the town can laugh at itself.

But Holland also has a healthy manufacturing sector – furniture, scrap and recycling, pickles – and Fallows attributes much of Holland’s vitality to the non-corporate ownership and therefore the non-corporate ethos and behavior of those companies. These are family-run companies, not large multinationals. For those big corporations, says Fallows. . .

. . . it is a compliment rather than a criticism to say that ultimately they care most about dividend growth and "maximizing shareholder value." Toward that end layoffs, outsourcing, cost-cutting, cheese-paring, union-busting -- you name it, and if it can arguably lead to greater long-run corporate profitability, then by definition it is what management is supposed to do.

A family or privately run business can do things differently, for better and worse. Worse: management jobs for relatives, whether competent or not. Better: deciding in some cases to take a temporary loss, or settle for less-than-maximized profit, in exchange for some other goal. (The full Fallows post is here.)

In the schema of Habits of the Heart, Holland weaves the Biblical and civic republican strands of the American tradition. The other strands – utilitarian individualism (a.k.a. greed) and expressive individualism – are less in evidence.  Holland’s big businesses are firmly in the international economy, but while they act globally, their owners and executives think locally. They seem to see themselves as part of the local community. 

I hadn’t read Fallows’s articles when I was in Holland so I knew nothing of its economics, but one thing immediately struck me as we drove around. (Missing a turn and ranging far from your intended direct route can have its advantages.)  It was obvious that there was wealth here, but the homes in Holland were relatively modest by US standards.  Where in other places McMansion developments or individual new monstrosities would be rising, Holland had normal ranch and two-story houses with lawns of a size that you could mow even without industrial-scale equipment.*
                               
It was as though the display of such opulence would violate community standards.  In fact, several people I spoke with mentioned the resentment that David and Carol VanAndel are incurring with their construction of a $3.6 million mansion overlooking Lake Michigan.  (VanAndel is heir to the Amway fortune.)

By standards of East Hampton and elsewhere, it’s not exactly a tear-down, but it’s certainly not top tier.  Yet for the people in Holland, it was literally enormous – outside the norm – even for the wealthy.  On top of that, VanAndel is indulging his individual wishes explicitly at the expense of the public. He is cutting off public access to Big Red, the landmark lighthouse.

The lighthouse and pier are public, but access goes through VanAndel property, and he wants to allow the public to walk that path only on Tuesdays and Thursdays. That is not the civic-mindedness that Fallows finds just about everywhere else in Holland.

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* Big problem with methodology here – journalistic impressionism rather than social science (I haven’t even scanned Zillow). Maybe Holland is rife with mansions, and I was just looking for conspicuous consumption in all the wrong places.

Reporting the News as You’d Like It to Be

August 31, 2013
Posted by Jay Livingston

The news media are supposed to report the news – things that actually happen, not things they would like to happen. That requirement – being factual – can be pesky, but it’s easily sidestepped. One effective head-fake is to put a statement in the form of a question. The question headline, a staple of supermarket tabloids, has a long history going back at least to the gossip columns of newspaper days.
 

In 2006, Jon Stewart skewered FoxNews’s Neil Cavuto for his extensive use of this technique. (The Daily Show clip is here).

But Fox doesn’t need to resort to the statement-as-question.  As long as it can find somebody somewhere to speculate, it can report crazy stuff as though it were factual news.  It’s not the Fox newsreaders or editors who are saying these things; it’s “some” people. 

I don’t know if there is any research on the effect of these techniques.  Maybe Fox viewers are more likely to ignore and forget these doubtful and hedged versions of “information.”  But I doubt it.  As the research by Brendan Nyhan and Jason Reifler*  has shown, ideas, even false once, are remarkably resilient.  Corrections of false statements don’t do much to change perceptions and can even have the reverse of effect –  strengthening people’s belief in the original untruth. 

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A blogpost by Nyhan with a link to news coverage and academic papers is here.

Bird – in Context

August 29, 2013
Posted by Jay Livingston

Charlie Parker was born 93 years ago today.

The conventional story is that in the 1940s, Parker and a handful of other musicians revolutionized jazz, with bebop taking precedence over swing.  The kernel of truth in that version is that Bird, Dizzy Gillespie, and others really were playing different notes and with a different sound.  “Go up to Minton’s and listen to how this kid plays Cherokee,” musicians would tell one another. And swing bandleader Cab Calloway told Dizzy to “Stop playing that Chinese music in my band.” 

But the Great Man version of history – great musicians getting together to create a new music – leaves out the economic, social, and technological context. For example, the 1942 musicians’ union strike primarily against the major record companies (RCA, Capital, Decca, and a few others) allowed smaller labels into the game.  Those labels recorded small groups, not the big bands. So we get Bird’s legendary quintet and sextet sessions for Dial. 

Even the idea of the jazz-musician-as-artist (or even genius) owes much to the decline of big bands.  Big bands are the medium of the leader (also of the composers and the arrangers, but they remain largely anonymous). The musicians are more or less interchangeable. But in small groups, it’s all about the soloists. The melody is merely something the horns play in unison at the beginning and end, just to let listeners know what the tune is. Far more important are the many choruses of solos in between. Most people who listened to Duke Ellington didn’t know or care who the trumpeters were. But if you’re listening to Charlie Parker, you really want to know whether the trumpeter is Dizzy or Miles.* 

Also, what seems like revolutionary change often incorporates conventional ideas. Here’s Parker’s 1953 recording of “Confirmation,” probably his best (and best-known) composition.**

The chord changes for first four bars are the substitute changes Parker often used for his solos on the blues – they’re sometimes known as “Bird changes.”  But they are just a logical way to get from F in the first measure of the blues to Bb in the measure five. 

F  | E-7 A7 | D-7 G7 | C-7 F7 | Bb . . .                   

Even this chord sequence is not completely new with Parker.  Tin Pan Alley composer Harry Warren used the same changes a few years earlier in  “There Will Never Be Another You.”

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 * I think that Marc Myers covers this territory and more in his recent book Why Jazz Happened, but I have not yet read it


**To see Bird’s solo go by in real time note by note, see this animation, which for some reason is written in the key of G, not F – which is fine if you’re playing along on trumpet or tenor sax.