Tuesday Night Links

• Few of today’s populists bemoan the declining reliance on agriculture jobs, but the phenomenon is the same as what’s seen in manufacturing. In both cases, people can produce more than in the past with less workers. Blame technology, not trade—and don’t fall for the populist nostalgia trap. It also turns out that those service jobs were not lower paying jobs, and that manufacturing jobs, in general, didn’t reliably provide higher income. (Even when they did pay more, they didn’t pay much more.) [Cato Institute]
• If you’re going to try and mount an intellectual defense of Trump’s tariff policies — instead of just screaming out memes, pointing fingers, and trying to distract people by talking about immigration instead — this is basically how you have to do it. Nothing good is coming of Trump’s tariffs right now, so if you’re going to defend them, you basically have to argue that they represent short term pain for long term gain. In this case, the long-term “gain” is economic self-sufficiency and a bonanza of factory jobs. Formally speaking, you can’t prove that this is wrong, except by waiting a bunch of years and then observing that reindustrialization didn’t happen. There are no hard and fast economic laws of the Universe; we have a lot of theories, but economies are complex beasts, and the past is an imperfect guide to the future. I can’t completely rule out the possibility that Trump’s tariffs will cause a vast crop of steel factories and shoe factories and semiconductor factories to spring up from the American topsoil like mushrooms after the rain. And yet when we look at what’s actually happening to American manufacturing in real time, it doesn’t look anything at all like the beginning of the reindustrialization that Cass imagines. [Noah Smith]
• Economists that seriously study the issue generally find that falling manufacturing employment doesn’t have much to do with corporate management, and surprisingly, it doesn’t even have that much to do with trade (although a few dissent on this latter point). Instead, 80% - 90% of the decline can be traced to higher manufacturing productivity combined with stagnant demand, the same thing that reduced employment in agriculture in a previous generation. This is why the decline in manufacturing employment dates all the way back to WWII: greater manufacturing efficiency generally translates to lower manufacturing employment, because there is some upper limit on the number of cars and light bulbs we want to consume. We take the dividends from more efficient manufacturing and redeploy it to deliver services, especially in education and health care. [MD&A]
  
• When you invest in a company, you are really buying two assets: Their current business, and the unique knowledge they have about adjacent businesses, which they can monetize by investing the firm’s capital. […] One reason successful investors emphasize the quality of the management team, particularly among growth companies and companies in fast changing markets, is that their ability to allocate capital and win in other fields is crucial to the outcome of an investment. A DCF of an existing business is inadequate to analyze the outcome in a fast changing field where yesterday’s assets are becoming obsolete, but the leading players have a huge head start on building the more durable assets of tomorrow. [MD&A]
• Zell realized that his replacement cost framework would apply to all long-lived capital investments, not just real estate. In the mid-1980s, his firm bought a fleet of railcars, which were then trading at half of replacement cost, following a construction boom a few years before. Same model, same bet, same result. In 1992 he flipped his railcar fleet to GE for a huge profit. This is not to say that Zell’s fortune can be entirely attributed to simply buying quality assets trading at a discount to replacement cost. Zell was a savvy operator and a talented dealmaker who boosted his returns through leverage and clever structuring. But at the same time, throughout his career, this was Zell’s big shtick: “to look for opportunities in places where others were ignoring the rules of supply and demand”. [MD&A]
• I would conclude that successful startups end up getting into venture investing because their early success and the economics of their industry creates a unique set of incentives whereby it just so happens they will sometimes achieve the best outcome by investing in companies that build complements. It cannot be overlooked also that early success allows a startup to raise a lot of cash, which makes it easier to get into a venture strategy. It certainly does not imply that most startups would be more successful if they started a venture capital arm. Indeed, this strategy mostly compounds the advantages of startups that are very successful in the first place, but we would not expect it to turn a struggling startup into a market leader. [MD&A]

PrairieSky Q1 2025

PrairieSky Royalty announced earnings (financials, MD&A, presentation) for the first quarter of 2025. Some highlights:

Oil royalty production volumes averaged a record 13,502 barrels per day, a 3% increase over Q1 2024.

Funds from operations totaled $85.8 million or $0.36 per share, an increase of 3% over Q1 2024 primarily due to increased oil royalty revenue with higher oil royalty production volumes combined with narrowed oil price differentials.
 
Realized oil pricing averaged $83.16 per barrel, an increase of 8% over Q1 2024, as the 7% decrease in average WTI crude oil benchmark pricing was more than offset by narrowed light and heavy oil price differentials and a weaker Canadian dollar relative to the US dollar. 

Purchased and cancelled 3,415,900 common shares under the Company's normal course issuer bid ("NCIB") for $90.0 million.

Completed acquisitions of both producing and non-producing royalty interests for $63.6 million. 

PrairieSky generated cash from operations of $65.5 million, they spent $46 million on acquisitions, $66 million on share repurchase, $43 million on dividends, and borrowed $90 million on their bank loan. (They took net debt from $110 million the prior quarter to $195 million.) Interest rate on the loan is floating, currently 5.9%.

The market capitalization is $4 billion so the CFO/EV yield is 6.6%.

Monday Morning Links

• When market veterans gather, the talk often turns to memorable crashes: Where they were in 2020, 2011, 2008, 1998, or for the older among them, 1987. Last week should join that list. Where were you when investors fled America? [WSJ]
• A future Trump impeachment seemed all but guaranteed by last Wednesday morning. It seems only slightly less likely now. It may even be desirable to restore America’s standing with creditors and trade partners. As sacrilegious as the comparison will seem, Mr. Trump faced a problem Abraham Lincoln and Franklin Roosevelt solved by dying once their greatest achievements were in the bag. Mr. Trump’s great achievement was his 2024 re-election, a rebuke to the injustices and insults meted out to him and his fans since 2016, some of which were even real. However, no consensus or even significant coalition exists for trying to force into existence a new American “golden age” with tariffs, which anyway is like asking a chicken to give birth to a lioness. He invented this mission out of his own confused intuition. [Holman W. Jenkins, Jr.]
  
• Time for a call. 81 days: that is how long Trump’s golden age lasted. Deportations now paused for agricultural and hotel workers. Musk’s chainsaw slashing of the federal bureaucracy replaced by departmental “scalpel”. And as of this morning, surrender in the tariff war. Trump and Musk didn’t even last as long as the 100 Days reformers, who failed to reboot Qing China. Somewhat longer-lasting than the wilting lettuce, Truss, that ran the UK into the ground in three weeks. The exemptions for iPhones and other electronics make a joke of the tariffs on China. It’s the second climb-down since Wednesday. This is before a single gesture of conciliation from China. And the week isn’t over yet. So, lessons... Trump’s mandate was an illusion. Trump, to use his own favorite expression, did not have the cards. In less than three months his approval has dropped to eight points underwater. Musk’s numbers are much worse. And this last week has displayed with fluorescent clarity: the numbers for Trump’s debt renegotiation do not work with 30-year bonds above 5%. A little reminder: China has barely played its cards yet. Tesla and Apple plants are still open. If China was behind some of last week’s sales of Treasuries, it exercised some tact. The latest unilateral trade concessions will be spun as another brilliant move by the deal artist, Trump. But Xi still has not called, despite White House pleas. So the only conclusion can be this: the Trump economic reforms are over; the dollar’s reserve currency status is already in question; and the grind you hear is of tectonic plates in motion. I don’t think China planned for 2025 to be the year. A patient approach — coordinated industrial investment and an ever-expanding trade links — was working fine. Ray Dalio notes that previous imperial transitions — from British to American, for instance — took decades. And some sectors, such as finance and culture, lag even more. With Trump, Musk and Vance as the triumvirate, China will never face opponents as easy to read, so easily tricked, so prone to make mistakes, and liable to fight among themselves. China could not contend with American soft power. Against Musk the Techbro, Vance the Hillbilly and Trump the Chud, the contest for global opinion is way easier. [Nick Denton]

Friday Night Links

• My biggest uncertainty is whether I’m right about the necessity of manufacturing as the foundation of an economy. A lot of conservatives were similarly dead wrong in the 1800s about agriculture, with a lot of political capital invested in hare-brained schemes like silver-based inflation. Recall William Jennings Bryan’s “Cross of Gold” speech in which he compared the plight of farmers paying back mortgages in gold-backed dollars to the sufferings of Christ. Bryan and his farmer supporters wanted to devalue the currency to relieve the debt load of a sector destined to fail as science increased crop yields and sank crop prices. Many a prominent American family were impoverished by trying to hold onto the family farm for too long, romanticizing the Jeffersonian ideal of the politically independent gentleman farmer as the foundation of the republic. The crushing economics of cheaper food and consolidation meant that there was no possible political intervention to save the family farm, as now fewer than 1% of Americans grow all our food. [The Tom File]
  
• The Republican majorities in both houses of Congress have been irresponsible in relinquishing their authority on tariffs to the executive branch. It amounts to an insult to history, and even to themselves. They are a coequal branch of government, and it is their job to protect their own standing. Instead, as Jonathan Martin notes in Politico, they have reduced themselves to “doing color commentary up in the booth.” Gosh, I hope the president is right. They spoke gently of their reservations, acting like “a parent praising a toddler about what a big boy he is in hopes he won’t melt down and ruin dinner.” They should stop this. It’s embarrassing to witness. [Peggy Noonan]
• USMCA is now a privileged tax status for corps. Everyone else paying a 10% tribute to the US helps Mexico labor cost advantage vs competitors. This situation has shown that even with someone willing to be as extreme as Trump clearly is, USMCA, as an agreement and an economic bloc, held together. At least for now. It seems clear that the path of least resistance forward for companies with overseas operations is to go to Mexico. It’s the one country with cheap labor, generally tariff free, where you can have relative certainty over the next four years and is a clear advantage over holding off all plans/growth until Donnie leaves the stage. Why is the Mexico bull story not stronger now than a month ago? [@invertedfragility]
• When not plotting with Q, Trump mostly dedicated himself to golf trips and petty feuds and vendettas waged against thousands of random media, business and political figures he believed had crossed him at some point or another during the latter half of the twentieth century. It was honestly an okay arrangement. He left the actual task of governance to a kind of Kushner-Mnuchin duumvirate caretaker regime which kept the economy and stock market humming along by simply leaving things be. This is probably what allowed a number of tech and Wall Street titans to convince themselves that a second Trump term would be fine because 'nothing ever happens,' etc. [Drew Pavlou]
• Remarkably, quality control is so variable that generic manufacturers, as a matter of course, grade their finished products and decide post-hoc upon the market into which they will be sold. Literally, the same drug from the same plant will be destined to an end-market differently from one day to the next based on final manufacturing test results. The product a market receives is directly proportional to the strength of that market's regulators. Africa, India, and developing world nations are at the bottom. China, Latin America, and Eastern Europe are next up in quality. Western Europe is third. United States and Canada (owing to US proximity more than actual Canadian regulatory muscle) at the top. But, make no mistake, like the best house in a bad neighborhood, the FDA is failing miserably. US consumers are merely getting the best of the worst when it comes to Indian and Chinese produced generics. [@pdxsag]
• Look at Kentucky’s economy: Our biggest foreign direct investor is Japan, and the president has launched a very aggressive tariff on Japan. I mean, the biggest Toyota plant in the world anywhere is in Georgetown, Kentucky, and so to act like our economy isn’t global and there aren’t repercussions on the ground, that there aren’t manufacturing jobs that are already supported by foreign direct investors, that’s just not reality. [Andy Beshear]

Monday Morning Links

• If Trump goes through with his tariffs and isolationism, this will have many effects, but probably not the one effect that he intends, namely, bringing back manufacturing jobs. Tariff policy has been changing on a weekly basis, and all of the tariffs could well be rescinded after Trump leaves office. No one is going to start building factories in the US when they don’t know what policies will be in place when the factory is ready to operate. [Nathan Cofnas]
• On the other hand, if we make improvident choices, the bright horizon I’ve described will not materialize. And let me put it very plainly. If we Republicans choose Donald Trump as our nominee, the prospects for a safe and prosperous future are greatly diminished. Let me explain why I say that. First on the economy. If Donald Trump’s plans were ever implemented, the country would sink into prolonged recession. A few examples. His proposed 35 percent tariff-like penalties would instigate a trade war and that would raise prices for consumers, kill our export jobs and lead entrepreneurs and businesses of all stripes to flee America. [Mitt Romney]
• The measure won’t pass the House, and the White House may dismiss the Senate vote as more criticism from the usual GOP dissenters. But that could change as economic events evolve. Iowa Sen. Chuck Grassley on Thursday introduced a bill with Democratic Sen. Maria Cantwell of Washington that would claw back Article I’s trade authority by requiring Congress to approve tariffs within 60 days. Tee that up for a floor vote, please. Congress could do the country a favor if it becomes jealous of its powers—or at least afraid of the political consequences that will accompany higher prices and slower economic growth. [WSJ]
• By employing this statute, Mr. Trump claimed a unilateral power to tax and regulate commerce—powers the Constitution vests in Congress under Article I, Section 8. The Supreme Court has signaled skepticism toward such executive improvisation. In West Virginia v. EPA (2022) the Court struck down the Obama Environmental Protection Agency’s Clean Power Plan, ruling that the agency couldn’t overhaul the energy sector without explicit congressional approval. [WSJ]
• Mr. Trump justifies his tariffs by declaring a national emergency under the 1977 International Emergency Economic Powers Act. No previous President has used that law to impose tariffs. Mr. Trump is stretching his authority much as Joe Biden did with his student-loan forgiveness. Congress has circumscribed the President’s power to impose tariffs, allowing it on imports that threaten national security (Section 232) or in response to “large and serious” balance-of-payments deficits (Section 122), a surge of imports that harms U.S. industry (201), and discriminatory trade practices (301). None of these trade provisions empowers Mr. Trump to impose tariffs on all imports from all countries based on an arbitrary formula. [WSJ]

Some thoughts on tariffs

What is Trump even trying to accomplish with the tariffs? You hear two purposes articulated by his administration and followers. First, that the tariffs are an aggressive, brash opening position in a negotiation that is intended to bring down other countries' tariffs and trade barriers. Second, that the tariffs are in place - "permanently" - to bring manufacturing back to America and to generate revenue.

Those two purposes are contradictory! The first would be a push for freer trade, in line with Ricardian comparative advantage. The second is the inverse of the first. It would reflect a belief that we are losing when Vietnam makes stuffed animals for us less expensively than we can make them ourselves. But anyway, the purpose, logically has to be one or the other, it cannot be both. 

I suppose it could also be the case that Trump is trying to achieve contradictory purposes without realizing it - that would be even worse. But it seems like the best hypothesis is that he has a longstanding dislike of trade per se and wants to have these large tariffs in place "permanently." 

The theory of Cornucopianism helps us to understand the transition away from manufacturing that the United States has made.

Herman Kahn writes about this in The Next 200 Years. As a country or civilization gets wealthier, the focus of economic activity shifts from primary (extractive) to secondary (construction and manufacturing) to tertiary (services) and then to quaternary (post-industrial) activities. 

And as you get richer, the theory of comparative advantage predicts that you would hire people who are not as rich to do physical tasks for you. Such as sewing fabric together. (Labor in Vietnam is even cheaper than in China.) 

You can buy an OCBD shirt made in the U.S. but it is expensive ($255) because people have higher and better uses for their time than making shirts. It's a flex, a status symbol, for your button-down to be made here instead of buying an shirt that's "globally sourced" for only $40.

For a country that has been supposedly "deindustrialized," the United States still produces a huge amount of manufactured goods. We do not make stuffed animals, we make jet engines. Essentially all of the commercial aircraft in the air right now throughout the world - probably 10,000 or more - are using American jet engines or British ones. China still cannot make them. 

Russia is truly deindustrialized. It produces virtually no complex goods for export and, unlike the U.S. does not export any impressive services either. Nobody is buying GPUs or analog semiconductors from Russia. (Imagine creating this chaos with tariffs to punish Vietnam for making us cheap shoes when we have a semiconductor ecosystem like this.)

The sad thing about the tariffs is that even if Trump set about them with the best of intentions and even if they could work in theory, they are not going to work in practice. Molson Hart has a great thread about why Trump's plan is not going to work from the level of an entrepreneur and factory owner. 

But Trump's plan is also not going to work politically.

Instead of attempting to legislate a durable trade policy, Trump tried to dictate, as one man, a clumsy and absurd system to govern the foreign trade of a $28 trillion economy. The problem is that the more arbitrarily and capriciously he acts, the less likely the tariffs are to be "permanent," and so the less likely that anyone would want to make a major investment in manufacturing a product in America that is currently manufactured overseas. 

Trump has blown 2026 (and likely 2028) for the GOP by causing a market crash and recession. The obvious conclusion by anyone with the capital to actually build a factory will be that these tariffs will not be in place long enough for the investment to be paid back.

In fact, Trump might be (and should be) put on a leash much sooner than 2026 or 2028. Senators Grassley and Cantwell introduced a bill (S 1272) that would cause any tariff imposed by the President to sunset after sixty days unless approved by Congress - it already has seven Republicans cosponsoring. So either Congress will get rid of the tariffs now or when Democrats win in 2026 or when a Democrat is elected in 2028. 

It looks like I was wrong to be optimistic about Trump in November. Notice that nothing on that list of things to be optimistic about pertained to tariffs or trade. It was a blind spot in not appreciating that Trump simply cannot grasp the concept of comparative advantage. Romney was correct all along - Trump does not have temperament of a stable, thoughtful leader.

Books - Q1 2025

Read 11 books this quarter. Pretty good, considering everything else going on. See also our Compendium of Credit Bubble Stocks 5/5 Books (as of January 2025) and our Q4 2024 reviews.

• Climbing the Vines in Burgundy: How an American Came to Own a Legendary Vineyard in France (4/5) Written by Alex Gambal, an American who moved to Beaune with his family and ended up in the Burgundy business. (He was the first non-Frenchman to own a Grand Cru vineyard in Montrachet.) In this interview he gives a great description, better than he does in the book: "It was a small but complicated business, an asset-heavy, balance-sheet-weak, complex business." He was quicker to be accepted by the French (brokers brought deals to him) because he worked for a Burgundy importer first and went to a wine school in Burgundy (where he met 2nd+ generation winemakers), but also because his kids were in the Beaune schools. So he was taking his kids on playdates and making friends with the local winemakers. He was in business from 1995-2022 (Maison Alex Gambal) when he sold out to a larger French competitor. His second wife had died, he was in his early 60s, his children did not want the business, and he wanted to work less hard. (The wine business may have led to a divorce from his first wife.) He got into the business at a time when most vignerons sold their grapes to négociants, who bottled and sold the wine under their own labels. That allowed him to go into business, and establish a brand, with just his name (label) and no land. As the supply of bulk grapes and wine was drying up (farmers vertically integrating into wine production), he was able to buy some parcels himself. (As he describes: "By 2004-2005, it was harder to source the grapes since small growers were starting to bottle more and more of their wine. At the beginning, the bigger négociants, like Girardin, Latour, Boisset and Jadot, left plenty of crumbs on the table; they didn’t care about the little ants. Eventually, however, there were fewer crumbs and more ants.") It is interesting that Burgundy vignerons were more successful than Scheid Vineyards at the vertical integration... maybe because they had much better product to offer? Gambal laments the rising prices of Burgundy wine, but it is a naturally expected outcome of the Cornucopian thesis! Most land in Burgundy is owned privately, although LVMH owns, via its Moët Hennessy subsidiary, the Domaine Chandon (acquired 1985) and the Domaine des Lambrays (acquired 2014) and Pernod Ricard owns Château de Chassagne-Montrachet and the Domaine de la Garde. These assets are too small to be meaningful for companies of that size, but if you could own Burgundy land, there is a question of whether "climate change" will hurt the productivity or quality of Burgundy wine. Warmer temperatures have maybe been good so far, with hot, dry - good - vintages happening more often than in the past: "grape ripening has improved everywhere, from the humblest regional Bourgogne appellation to village-level, premier cru and grand cru designations." Also: "Red wines need a little more sunshine and heat to ripen than white wines so red Burgundy is currently thriving. Burgundy is the most northerly of Europe's major regions for fine red wines. In the 1950s and 1960s, harvests took place at the end of September and often in October so many never ripened properly. Even in the 1970s and 1980s, the success rate was three or four vintages in a decade. This decade, 2012, 2015, 2016, 2017, 2018 and possibly 2019 have all been lovely. 2015, 2016 and 2018 are potentially great vintages.")
• What Is ChatGPT Doing ... and Why Does It Work? (3/5) This is by Stephen Wolfram who is impressed with LLM models but does not think that they will get all the way to AGI. The most interesting part was the beginning where he describes, more thoroughly than I have read before, how LLMs work. Highlight: "the reason a neural net can be successful in writing an essay is because writing an essay turns out to be a 'computationally shallower' problem than we thought." Better tell Paul Graham?
• Economic Laws and Economic History (3/5) By the economist Charles Kindleberger (1910-2003), who is much better known for his 1978 book Manias, Panics, and Crashes. The thesis: "Too many economists discover a relationship or a uniformity in economic behavior, develop a model, and use it to explain more than it is capable of, including on occasion all economic behavior. [a] powerful case against the idea that any one model or law could be used to unlock the basic secrets of economic history." As he says: "eclecticism rather than an all-encompassing system of interpretation is the wiser attitude to bring to the study of the economic past." He lectured about four laws: Engel's Law, the Iron Law of Wages, Gresham's Law, and the Law of One Price. Engel's: as income grows, the consumption of food per capital grows less than proportionately. Ownership of good land is prized in a poor country. One result: agriculture is over-represented in parliamentary governments. "One of the last acts of the farm sector when its power in state legislatures was slipping in the 19th century, was to transfer the capital of the state from the major urban centre to a modest city on the fall line." It would be interesting to read more Kindleberger work. He had the idea that the economic chaos between World War I and World War II that led to the Great Depression was partly attributable to the lack of a world leader with a dominant economy ("hegemonic stability theory"), which he wrote about in The World in Depression 1929-1939. He also wrote A Financial History of Western Europe, World Economic Primacy: 1500-1990, another collection of essays, and an autobiography. 
• The Vanished Landscape : A 1930s Childhood in the Potteries (5/5) As mentioned last quarter, we like British historian Paul Johnson (1928-2023). Our favorite so far is his biography of Napoleon (notes). This book is an autobiography of his childhood in Stoke-on-Trent, a town in central England known for pottery making thanks to a local abundance of both coal and clay. (Like how steel mills started in places where you could find coal and iron ore.) Johnson's father was the headmaster of the local art school. Johnson was the youngest with a brother and two older sisters who were very fond of him. What made this book so enjoyable to read was that Johnson had a very happy childhood. Also, he grew up in a high trust, homogeneous society where he had room to roam. "Crime played no part in our lives. No door was ever locked except when we went on holiday. I never was told of any theft. If you dropped something in the street the person who found it would go to considerable trouble to find out where you lived and return it. Poverty was everywhere but so were the Ten Commandments." We ordered a couple more memoirs of childhoods as a mini reading program.
• Rocket Boys: A Memoir (5/5) Just as enjoyable as Johnson's childhood memoir, this one by Homer Hickam was made into the movie October Sky (1999) starring Jake Gyllenhaal. Hickam (born 1943) grew up in a coal mining town in West Virginia called Coalwood. When Sputnik was launched (1957), he got caught up in the space race and started building rockets, with the help of machinists working for his father at the coal mine. Like Johnson, he also grew up in a high trust, homogeneous society. Key passage: "'Ike built your rockets,' Doc said resolutely, 'because he wanted the best for you, the same as if you were his own son. You and all the children in Coalwood belong to all the people. It's an unwritten law, but that's the way everybody feels.'" Even though 1950s West Virginia was desperately poor by modern standards, there was little of the social pathology that is blamed on poverty today.
  
• Gay as a Grig: Memories of a North Texas Girlhood (3/5) Written by a woman who grew up in Weatherford, TX, this is more of a family history with some memories sprinkled in than a memoir like the two above. The author Ellen Morland Holland (1894-1974) wrote this in 1963 at age 70. Some highlights: "At this time [1900] the world was almost incredibly sound and stable. A man was able to work out his future financial needs. He could tidily pit his annual income against his annual expenses and be able to neatly rely upon  his findings. Father could see that his future was safely grounded and so he decided to stop work in time to freely enjoy life." Her father told her: "You think you have no responsibilities, but you have. You must begin now to take care of a little old lady and that little old lady is you." "I have thought of him every day of my life since losing him, and always with a smile or with a feeling of gratefulness, that I was given so rich an experience in my life with him."
• The Quest for God: A Personal Pilgrimage (4/5) Also by Paul Johnson. It is about why (and how) he is Catholic. He keeps in his study "a large 18th-century crucifix, finely carved in wood and painted, which once stood on the refectory wall of a Spanish convent of nuns. It was looted in the Spanish Civil War and found its way to England, and I bought it some years ago for a modest price in London. It is immensely realistic as to Christ’s sufferings: some would say gruesome. But that is the Spanish manner and I think it right to be reminded forcibly of the sufferings Christ underwent for our sakes. So I was very pleased to buy it and originally intended to hang it in the hall of our London house, to gratify Catholic visitors, and administer a salutary shock to Protestant ones and agnostics." Great idea. Other highlights: "In contrast to architects, painters, and composers, writers have a mixed record in God's service." "As we are leaseholders [of the Earth], we must not diminish God's freehold needlessly and without warrant." "The early environmentalists, being mostly enthusiastic Christians, were never anti-human. But the movement has always had a tendency to slip into extremism and to attract fanatics, and in the last generation it has not only de-Christianized and paganized, but rendered irrational and destructive of the legitimate interests of the human race." "Certainly in English there is no beating the words with which the Anglican Church solemnizes a marriage or buries the dead. These services might have been scripted by Shakespeare." Johnson wrote three books about religion: History of Christianity, A History of the Jews, and Jesus: A Biography from a Believer.
• Creators: From Chaucer and Durer to Picasso and Disney (4/5) Another Paul Johnson. Of the creator he mentions, I like Durer, Bach, Jane Austen, Pugin, and Twain the best. Does anyone care about Victor Hugo or T.S. Eliot anymore?? (Although he quotes Eliot directly as saying, "There is nothing in this world quite so stimulating as a strong dry martini cocktail.") Highlights: "We live in a vale of tears, which begins with the crying of a babe and does not become any less doleful as we age." "The pull of the warm south, always strong among creative Germans..." "...German thoroughness usually lacking in Italian counterparts." He admits that Beowulf is dull and that the full Hamlet play is too long at five hours. Calls Bach "fervently philoprogenitive". "Whenever he could, Bach (like Durer) traveled to meet masters, such as Buxtehude..." Points out Bach's ecumenicism: "He could and did compose settings for the Latin liturgy and hymns. That, indeed, is how his Mass in B Minor began, with a setting for the Kyrie and Gloria, gradually expanding over the years into a complete Latin mass of astounding power and complexity, which could be, was, and still is - today more than ever - performed with equal devotion by Catholics and Protestants. His great St. Matthew Passion, which together with the mass marks the summit of his artistic achievement, is set in German, the vernacular regarded as suspect for services by south German Catholics. But, again, it is regarded with reverence by many Christians today as the most faithful and exalted musical presentation of Christ's suffering and death." Jane Austen: "plainness fostering genius" "I calculate that her social position, both in its strengths and its precariousness, was exactly such as to give her the best and most extensive materials for novels of gentile social satire." On writing fiction: "personal experiences are a novelist's capital, to be hoarded, and spent only with prudent avarice, because they are irreplaceable." "For the novelist, books cannot make up for the absence of direct knowledge and feeling." On Augustus Welby Northmore Pugin (1812-1852): "His close study and reproduction on paper of actual medieval creations were the key to designing his own, and helped him to enter the minds of medieval builders and decorators: they formed, as it were, his apprenticeship under experts who had lived hundreds of years before him..." "He dismissed the classical revival - which was powerful, even dominant in the England of his childhood and youth - as an anomaly, an inappropriate input from the Mediterranean, suitable only for blue skies and hot sun. To him 'Gothic north' was tautological: the north was Gothic, and Gothic stood for the north." Interesting about Picasso: "He believed, like many other people at that time, that the Communists would take over France." "He also took care that his various country houses and chateaus in France were always in areas where the party controlled the local government, just in case he fell afoul of the law (e.g. by seducing a minor)."
• The Essential Galbraith (2/5) No wonder economist J.K. Galbraith has been forgotten. He cranked out four dozen books that seem to have no insight to offer. He was 6'9" and worked in four Democrat presidential administration, pushing wealth redistribution. ("As society becomes relatively more affluent, private business must create consumer demand through advertising, and while this generates artificial affluence through the production of commercial goods and services, the public sector becomes neglected.") Here is something very embarrassing that he wrote for The New Yorker in 1984: "Partly, the Russian system succeeds because, in contrast with the Western industrial economies, it makes full use of its manpower." On Keynesian economics: "It did not overthrow the system but saved it." "[S]upplementing private expenditure with public expenditure [should] be the policy wherever intentions to save [exceed] intentions to invest." Good comment: "I understand that [Galbraith] had good solutions to the problems of the 30s and 40s (government stimulating the economy in recessions, government economic management during World War II). But by the time I began paying attention to economics, he was embarrassingly out of touch, repeating his old solutions (higher taxes, more government power) for the new problems of the 70s and 80s (stagflation caused by too much government, inept government management of the economy, and too few markets)." I do think his theory of the firm is interesting, though. He thought that the purpose of the largest firms (which would include the S&P 500 that generate more than half of all private sector profits) was not profit maximization (as neoclassical economics suggests) but both survival and growth so as to benefit the managers via employment security and financial rewards. Highlights: "No one in those bleak years of the Great Depression could reasonably be for the current system." "While there may be other deserving candidates, only two books by American economists of the nineteenth century are still read. One of these is Henry George's Progress and Poverty; the other is Veblen's The Theory of the Leisure Class. Neither of these books, it is interesting to note, came from the sophisticated and derivative world of the eastern seaboard. Both were the candid, clear-headed, untimid reactions of the frontiersman - in the case of Henry George to speculative alienation of land, in the case of Veblen to the pompous social ordinances of the affluent."
• Class: A Guide Through the American Status System (5/5) Reread of the timeless classic by Paul Fussell. Highlights: "The best places socially would probably be found to be those longest under occupation by financially prudent Anglo-Saxons, like Newport, Rhode Island; Haddam, Connecticut; and Bar Harbor, Maine. Los Angeles would rank low less because it's ugly and banal than because it was owned by the Spanish for so long." "Today one would probably wank to rank well up there a place that has experienced no dramatic increase in population since Mencken's time." "The degree of [workplace supervision] is often a more eloquent class indicator than mere income, which suggest that the whole class system is more a recognition of the value of freedom than a proclamation of the value of sheer cash. The degree to which your work is overseen by a superior suggest your real class more accurately than the amount you take home from it." "Classy people never deal with the future. That's for vulgarians like traffic engineers, planners, and inventors." "The understatement canon determines that the higher your class, the slower you drive." "To a startling degree, prole America is about sweet... you could probably draw a trustworthy class line based wholly on the amount of sugar consumed by a family." "Bold effects and vivid contrasts are always to be avoided." "The two top classes, as we've seen, have very few ideas. One of the few is that capital must never be 'invaded,' as it likes to put it." Regarding Ronald Reagan: "One hesitates even to speculate about the polyester levels of his outfits." Fussell predicted J.D. Vance: "Will the President soon proceed to eye shadow and liner?" Social class problems of engineers: "uncertain always where they fit, whether with boss or worker, management or labor." How things changed from Veblen's day: "the difference now is that it's less the upper than the lower orders who, to fulfill their fantasies, are moved to exhibit their purchasing power."
• Doing Battle: The Making of a Skeptic (4/5) This is Paul Fussell's autobiography: "the making of a skeptic" - that was how he defined himself, late in life. He was the son of a successful lawyer in Pasadena, born in in 1924, the same year as Charlie Munger, Jimmy Carter, Marlon Brando, and George H.W. Bush. (Of course, they were all two years younger than Herman Kahn. You know we believe in birth-year determinism.) Fussell said that Pasadena was a "moral oasis" in Southern California, "profoundly un-European in its self-satisfied Puritanism." His family summered on Balboa Island. Fussell went to Pomona and had the misfortune of being sent to Europe in 1943 becoming a 2nd LT in the infantry. He had made the mistake of signing up for an "Enlisted Reserve Corps" in college and had difficulty even making it into OCS. He was lucky to have survived the war and was seriously injured by an artillery shell explosion that killed the other two men with him. ("Shell fragments in a meaningless little forest in a trivial little battle in a war already won.") Some highlights: "The platoon leader's main function seemed to be that of an emblem, a visible testimony that officers shared the hardships of the men..." "All planning was not just likely to recoil ironically: it was almost certain to do so." "If you're any good, you understand that everything that happens to you is your own damn fault and you embrace that knowledge and go on from there." Fussell voted for Stevenson and did not like Nixon or Reagan. I'll bet he voted for Clinton, Gore, and Obama too. (He lived until 2012.) It turns out he is basically a liberal snob, afraid of being mistaken for a low status white prole. After the war, he got a PhD English at Harvard and then became an English professor, first at Connecticut College (for women) then at Rutgers. ("Because Harvard was not Nebraska State, most of the graduate students, it proved, had been in the navy, and a few had been admirals' aides." "The whole PhD program in English seemed based on the plausible assumption that there would always be significant demand for explicators of Shakespeare...") As a professor, he got to spend not only summers but sabbatical years in Europe! ("Inaugurated for me a serious European period... involving careful attention to wine and food, productive cynicism, sexual freedom, sun and water, the fun of languages, and enthusiasm for beneficent socialism...") Fussell and his wife divorced in 1981 and, though they had two children, seem not to have ever had any grandchildren. His academic writing is terribly, terribly boring literary criticism. As with Mencken, a life of too much criticism. Fussell was really not nearly as interesting as his fellow Paul (and contemporary) Paul Johnson, a much better and more learned man.