Over a Barrel

This piece was published a few days ago. It was a follow-up to another entry on the same subject in the same blog. Both were commentaries on a paper about oil shocks and their relation to recessions, written by the same author for the Brookings Institution.

The main thrust of the article is an interesting one, and one that goes much farther in explaining our current economic situation than many that simply try to point a flashy finger. It makes the case that the significant run up in gasoline prices last summer pierced the bubble and down everything tumbled. The reasoning goes like this:

Yes, there was risky lending going on, but by and large, people were able to make the payments on their too-much houses. Unfortunately, the buying and subsequent building spree caused people to farther out to find these homes, putting a greater share of their income in their gas tank with every few minutes extra commute. That was all fine and good for the consumer at $2 a gallon gas, but as it went quickly to $4 the additional strain on budgets was too heavy, and people could no longer meet their financial obligations. This caused the foreclosures that the banks hedged against by buying insurance, and so left AIG and others holding the bag.

$150 oil may not have been the only cause of the global recession, the article is quick to point out, but in my mind it goes a lot farther in explaining the global increase in food and commodities pre-bubble-pop, the cause and effect relations of prices, and the subsequent wildfire-like speed of the worldwide meltdown.

Stray Dog

I watched Akira Kurosawa's Stray Dog (1949) last night, and while it doesn't have the gravity of Rashomon (1950) or Seven Samurai (1954), it is still a very good film. Set in post-war Japan, the film explores human nature, and society's influence on one's decisions. Several great scenes explore the poverty and chaos of occupied Japan, and there exists the sense that one must participate in soft crime to stay afloat. In that, it reminded me of the blurred line of the law in Casablanca (1942). Kurosawa keeps his good guys good and his bad guys bad, but he calls into question the circumstances that determine the bad ones' descent.

Toshiro Mifune and Takashi Shimura star in this Kurosawa film as well, and they bookend the plot perfectly as rookie cop and cunning, soft-touch detective. Uncredited is the sweltering heat that plays an dominant role in keeping the characters agitated. The film also shows Kurosawa's interest in the American pulp detective novel; a genre he would revisit with more polish and success in High and Low (1963).

Definitely worth watching.

Decible Debate

I listened for a bit to the mayoral candidate debate last night, and one thing I heard (OK, more than one thing...) seemed so backward. On the subject of Austin as "The Live Music Capital of the World" (a contentious point, anyway), the candidates were asked if the development downtown would cause Austin to stop being the mecca for live music (sic). All but one said that we must preserve Austin's music scene and relax noise ordinances downtown to give the clubs freedom to operate so that everyone will come downtown to have a good time.

So wrong.

Why create a centralized zone in the city for entertainment? The idea is to create urban nuclei throughout the city so that everyone isn't driving from A to B to C, especially while intoxicated, but rather have A, B and C in their own neighborhoods. Austin's downtown development will bring with it the amount of services it needs. In fact, I would argue from first hand knowledge that making downtown Austin inhospitable to residents via the removal of noise ordinances will cause people to stay away from it, thereby wrecking any real community to support the clubs on more than just the weekends.

Make a special exception for SXSW weeks, sure. But don't provide incentive for bars to only open downtown or Austin will end up one giant suburban sprawl.

Meet the Boss

I collect watches. I used to be enamored with vintage Seikos, but in the last years I have been slowing turning over my collection. Now I concentrate on newer Seikos; they are built so well and keep such good time. They are a pleasure to own. I am eagerly anticipating the arrival of my most recent acquisition: the Seiko SKA 293, aka "the Boss". It earned the moniker because when it came out in 2005, it was of the biggest Seikos at 44mm wide and 14mm thick, and a sharp stylistic departure from traditional Seiko Divers. With its kinetic movement charging its battery from the motion of the wearer, it offers the accuracy of a quartz with the ease of an automatic.

Can't wait for it to show up in the mailbox!

(photo credit: Tarod of Spain. !Gracias!)

I Was Born a Keynesian

News of the current success (so far, so good) of the stimulus-funded projects reminded me of a conclusion I came to as a teenager.

As I drove across a bridge in bad shape in the late 1980s, it occurred to me that with high unemployment and low interest rates, municipalities could borrow cheaply to improve their sagging New Deal era infrastructure and put all them folks to work. Little did I know that I had arrived at a theory developed by John Maynard Keynes about 75 years earlier, and less did I know that those ideas wouldn't be in fashion for another 20.