In Search of a Lost Decade

Japan in better days (1856) -- Picture courtesy of Wikipedia

by blogSpotter
For an American looking at 1990’s Japan, it’s a little like looking into a reflective pond, with a few minor details changed. Japan of 1989 was on a massive borrowing binge, fueled by easy credit and a powerful yen. Land speculation pumped Tokyo’s residential prices to thousands per square foot. The Nikkei index broke an all-time record in December 1989, reaching 38,957.44. Stocks and real estate were puffed into an unsustainable bubble that burst, leading to a market crash as well as a credit crisis. Does any of this sound familiar?

The events that followed created what I call a “sloth market” -- neither bull nor bear. It was (and is) more a moss-covered, sleepwalking mammal clinging to a branch. The Finance Ministry bailed out companies “too big to fail”; some of these propped-up enterprises were called “zombies” as they became the walking dead, never to regain profitability. The cautious Japanese also fell into a deflationary liquidity trap caused in part by their own frugality. There was retrenchment all around as businesses and families tightened their budgets. The Finance Ministry tried to finagle a recovery with 0% interest rates, to no avail.

Now we fast-forward to 2010 and what can we say? Japan never really recovered. The Nikkei only reached half its former height in 2007 before being knocked asunder by the same worldwide tsunami that took down Wall Street and most of Europe. As of this writing (and 21 years into Japan’s greed-induced coma), Japan is still laid low by insolvent banks that can’t issue loans while waiting for bad risks to turn around. Insolvent companies hire foreign contractors and fund any paltry improvements from their savings, not from loans.

All of this makes an American wonder if President Obama was right in suggesting that we might be headed to the same place. Japan’s crisis is not precisely a crisis -- their unemployment has never been as high as ours is now. It’s more like an Epstein-Barr virus that has given them (and us) a dull malaise that will neither kill us nor energize us. It will just take us down for an interminable nap time where factories and able-bodied men develop rusty joints and faulty wires.

I find it sad that purely capitalistic systems can only engage forward gear if someone is hitting a financial jackpot. Speaking as an unrepentant, Krugman-loving Keynesian, I can’t help but think that a Works Progress Program (a la FDR) could set us back on the right path. While Dow and Nikkei basically flatline, the Chinese are building airports, bridges and miles of new highway. Is any of China’s output pegged to a financial market index? Does it matter?

We in the USA have a Barnum and Bailey system that’s been based on gluttons who dream of getting rich quickly, be it with blue chip stocks, blue chips on a poker table or a 7-11 lottery ticket. The engine of work and progress is geared towards cranking out plasma TV’s and stainless steel appliances -- the material contrivances of the bored and the terminally uninspired. How tragic, ironic and altogether fitting it will be when somewhere down the road, the Chinese have bridges and plasma TV's to boot.

Can it be that forethought, fairness and sensible assessment might actually give you what you need? Fairness and forethought smack of socialism, it's true. I’m not recommending socialism outright -- it's possible to strike a balance between a command economy and one that's purely capitalistic. Harrah’s Casino is certainly not a model to admire. When the gamblers get wise and realize that probability and house rules don’t work to their advantage, they’ll quit placing bets.

Capitalism sputters and stalls when high rollers switch over to the slot machines. That looks like what happened in 1990's Japan and it bears an eerie resemblence to what we have here.

© 2010 blogSpotter

Retaking Woodstock

Ode to joy in Bethel, NY -- Picture courtesy of Wikipedia

by blogSpotter
I recently had the pleasure of listening to Elliot Tiber’s personal memoir, Taking Woodstock; I then watched Ang Lee’s movie version of it a day later. Elliot Tiber was the 30ish president of the Bethel, New York Chamber of Commerce back in 1969. He helped his parents, two curmudgeonly, Russian Jewish immigrants manage their dilapidated roadside motel, El Monaco. He also did whatever desperate things he could do to attract new business -- art house movie night, swinging singles night, pancake buffets, etc. Elliot also lived a dual existence -- he was a straight-arrow motel manager on weekdays, and a very gay, Manhattan art director/designer on weekends. Batman’s Bruce Wayne would’ve been tested by this frequent change of identity.

Tiber is known for a Holocaust book he wrote, High Street (popular in Europe) but is more broadly known as the brave soul who offered his small town of Bethel to Woodstock Ventures, Inc, for staging of the world-shaking ‘69 rock music festival. He endured racist assaults, nasty graffiti, mob extortion attempts and innumerable spit wads from various angry neighbors and greedy onlookers. He withstood these many trials, and Woodstock went forward.

Tiber actually coordinated things with good friend, neighbor and dairy farmer Max Yasgur two miles down the road from his motel. El Monaco was a cramped, 10 acre swamp; Yasgur’s Farm was hundreds of verdant acres in the natural shape of a sloped amphitheater. Tiber was blessed to have Yasgur on his side -- the rest of Bethel was ready to tar and feather him. I won’t go into the details of Woodstock -- we all know it was a sun-and-rain drenched festival of sex, drugs, music and self-discovery. It was quite possibly (as described in the book) the center of the universe in August 1969. Editorial aside -- Woodstock Ventures repaired all damages and even gave the City of Bethel a 25K donation. 3,000 workers were engaged for the cleanup effort after the landmark event was over. Woodstock put the small town on the map, and Tiber was fully vindicated by the success and handling of the event.

I like to see how a multi-dimensional book gets condensed to a credible, two hour screenplay. Tiber’s book is a detailed autobiography which covers everything from Hebrew schools and sisters’ weddings to gay, coming-of-age stories. Woodstock only occupies the last part of the story and is more the backdrop than the story itself. Ang Lee’s movie starts with Woodstock -- the festival is actually the main focus and Tiber’s family is nearly a side story. Also some colorful characters are compressed into one or two for the sake of brevity. I guess a movie narrative has to pick up the pace where a book can meander all over the place and still maintain the reader’s attention.

There were a couple of passages that caught my attention in the book (and more obliquely) in the movie. This almost made Taking Woodstock worthwhile all by itself… Tiber’s father was an elderly (75ish) Jewish man, tired and spent from a life of grueling labor putting tar on roofs. Tiber’s mother was portrayed unsympathetically as a loud, bossy, money-grubbing nag. You might think that Tiber’s father would be at his wit’s end. Also, just prior to the Woodstock contract the father had been diagnosed with colon cancer. You might think he'd be ready to fold up shop, then and there.

But Tiber Senior was so invigorated by the Woodstock event that he came almost supernaturally alive -- he directed traffic, hired temporary help, cooked mass quantities of food and helped protect the motel from various would-be evil-doers. This stoic, quiet conservative Jewish man became fast friends with Vilma -- a transsexual security guard hired to patrol El Monaco. In fact, he became friends with a host of people he previously might’ve shunned. His mind opened to a whole new world and he was blissfully blown away by it. The colon cancer finally caught up with him a year after Woodstock and he made a special request to Elliot on his death bed… “Bury me in the small cemetery next to Yasgur’s Farm, facing Woodstock. That’s the best time I ever had in my life.”

I don’t know what special epiphany, if any awaits me for my future life -- hopefully something will blow my socks off. Must add, it’s always preferable that doors open when you’re young and healthy, not at death’s door. But it’s somehow encouraging to know that something from the 11th hour of this man’s life gave it way more meaning and joy. His body was old, decrepit and diseased and yet he laughed and danced -- he probably tacked a good, very good eight months to his time left. I think it's possible for us to schlep through a whole life devoid of anything so rewarding -- perish that thought. If you have six hours to devote, you might listen to the (sometimes shocking) audio memoir. For a less jolting experience, you can still “turn on” to the two-hour movie and travel back to 1969’s center of the universe -- Woodstock and the El Monaco motel.

© 2010 blogSpotter