The Idiocy of the Chicago Teachers' Strike

I'm a big supporter of teachers and unions. Normally, at least, I am. I am the son and brother of public school teachers. I was skeptical of the decision by the Chicago Teachers Union to go on strike, primarily because I was very concerned that, because it is so disruptive of parents' lives, it would erode the natural goodwill that teachers enjoy from the public.

My opinion on the decision to extend the strike, however, does not have any ambiguity: I think the decision to extend the strike is sheer stupidity, a spectacular failure of leadership on the part of the union, and political malpractice.

The decision on whether or not to ratify the agreement reached with the city will be made on Tuesday. There are 2 possible outcomes. 1) The decision is ratified, the strike is over, and kids go back to school on Wednesday. 2) The decision is not ratified, and negotiations resume, presumably on Wednesday.

Let's look at the most optimistic scenario under option 2. Let's say the talks resume quickly, and an agreement is reached quickly as well, say by this Friday. It's ratified by teachers over the weekend, and kids go back to school the following Monday.

This raises some immediate questions: if an agreement was reached so quickly, then why was the strike extended? Presumably the sides weren't that far apart. Did the teachers get a dramatically better deal than the first agreement? If not, then why did they extend the strike?

Public support for the strike is eroding quickly. The teachers' union is paying a high price in political support literally every day that the strike goes on. I've been following it closely, and although I don't know the very fine details, I highly doubt that the teachers will get a much better deal if they reject this agreement and negotiate for another one.

I also highly doubt that they will get a deal that is worth whatever they lose in public support. The union leadership has to be aware of this. So there is almost no chance that, come Tuesday, the union will reject the current offer, because the price of extending the strike is too great.

So there is a very high likelihood that the agreement will be ratified on Tuesday. Assuming that it is, what has the union gained from an extra 2 days of the strike? They will have pissed off more parents, but they won't be getting anything, because they could have ratified it over the weekend.

I've heard various explanations for why the agreement was not ratified, but none of them hold water for me. I find it bizarre that the union members needed more time to study the proposal. In this day and age, the details of the agreement should have been communicated to all of the members of the union within an hour of said agreement being reached. The union leadership should have known by the next morning whether or not their members would agree to it. Heck, they should have known that within a couple of hours.

There's almost no chance that the agreement will not be ratified on Tuesday. There's no reason why it should not have been ratified over the weekend. The union seems to be making Chicago parents wait for this ratification for no reason other than the failure of the union leadership.

As I wrote above, I'm a big fan of teachers. I had a fantastic public school education, particularly in high school. Which is why it pains me to see the Chicago teachers union basically shooting itself in the foot.

Mitt's Biggest Problem: He Doesn't Like Politics

Mitt Romney suffers from one disadvantage in this presidential campaign: he just doesn't like politics.There are, obviously, lots of reasons not to like politics or politicians. But if you're going to be a politician, you will probably be a better one if you actually like politics.


Ronald Reagan and Bill Clinton had very little in common ideologically, but both of them loved the pomp and circumstance of the political game. Reagan particularly enjoyed the performance aspect of it, and Clinton was never more at home than when he was pressing the flesh in the middle of a crowd. 

Romney, however, doesn't like either the show or the personal interaction with voters. He likes the challenge of being in charge, and it doesn't take much Freudian analysis to figure out that he's following in his Dad's footsteps. But his troubles at the Olympics highlighted his lack of interest in basic showmanship. He didn't just commit several gaffes in a couple of days, he didn't just "blow what was seemingly an un-blowable opportunity." He was totally unprepared for some simple gladhanding because he hadn't prepared any opportunities for self-promotion. He held a fundraiser in London, which is his kind of environment - close, personal interaction with other rich people. But if Reagan had made this trip, he and his team would have had the entire thing very carefully stage-managed. The candidate would have had several photo-ops with American athletes, he would have made vague and probably inaccurate references to his experience as a lifeguard and a radio sportscaster, he would have waved and smiled a lot, and he would have spouted platitudes and cliches about how sports transcends the nasty business of politics. It would have been totally cheesy and sentimental, as well as a blatantly hypocritical attempt to appear above politics while scoring political points. And it would have worked brilliantly. As a liberal Democrat, I would have gnashed my teeth about the superficiality of it all, but there would have been nothing I could have done about it. Particularly because none of the three candidates that I supported during the '80's had the foggiest clue how to do anything like it.


Romney, on the other hand, made no effort to participate in the showmanship of the Games. He didn't even show any interest in watching his wife's horse. He didn't meet the athletes. He could have talked about how the technological innovations showcase American ingenuity and creativity - nope. He made very little mention of his own experience running an Olympics. He didn't show people he was having a good time at the biggest party on the planet. He's like the guy who goes to the library when everyone else is at the homecoming game. The ultimate goal of politics is not to pass legislation; it's to give people the opportunity to enjoy their lives. 


Obama understands all of this. He likes the intense policy debates and the games he has to play with Republicans, but he also genuinely enjoys standing in front of thousands of people and inspiring them. Most fortunately for Obama, Michelle clearly enjoys the attention of the public as well. 


One of the great ironies of politics is that the really important stuff - the intricacies and details of policy and legislation - is really boring, and generally impenetrable to the public at large. Symbols matter because they translate the boring stuff into something that the average citizen can understand. Great politicians don't just get the importance of symbols and the show - they like translating the language of the boring stuff into the language of the public. 


Mitt Romney doesn't just not like this process, he doesn't appreciate how important it is, or why he should do it. Which means that he has surrounded himself with people who think the same way. Most of them stayed home and didn't even join him on this trip.


People who enjoy the games they play are almost always better at them than people who don't derive the same satisfaction. Just ask anyone in London this week.

Memo to Mitt: Politics is tougher than business

Mitt Romney is making two mistakes in this presidential race. His first mistake is that he thinks that he's tougher than Barack Obama because he's a businessman, and Barack Obama is a politician, and business people are tougher than politicians. His second mistake is that he expects the American people to automatically give him greater respect and deference because of that. He expects that when he says that something is true, or he gives his perspective on how events unfolded in his life, his explanation will be accepted at face value. 

My favorite example of people in business making this mistake of thinking that they are tougher than people in government is a tech company (I think it was Microsoft) that was being sued by the US Department of Justice. The Microsoft folks assumed that they were much tougher than the dweeby government lawyers, because they operate in the hypercompetitive environment of the computer industry, whereas government lawyers are bureaucrats who spend their hours trying to figure out how to interfere with businesses making money. What the Microsofties forgot was that prosecutors at the DoJ deal with foreign intelligence agencies (remember the KGB?), Mafia kingpins, drug lords, and other people who will lie, cheat, steal, and kill to achieve their goals. On a toughness scale, Microsoft's competitors - geeks with fast calculators who drink too much coffee - do not compare well to spies, assassins, and gangsters. Steve Jobs was a tough competitor. Unless you compare him to, say, Saddam Hussein, John Gotti, or the Soviet Union.

What people in business fail to appreciate is that they spend most of their time with people who agree with them, whereas politicians spend a lot of their time with people disagree with them. Most people in business do not have daily, direct contact with their competitors. They spend most of their time with people in their own company, with whom they have common goals. Or they spend time with their customers or vendors, people with whom they are trying to reach a mutually satisfactory accommodation. It's not necessarily easy negotiating with your co-workers, customers, or vendors. But those people generally are not doing everything in their power to stop you from achieving your goals. They may disagree with you, or even dislike you. But they're not out to destroy you. Your competitors may be trying to do that. But you don't have to deal with them literally face-to-face every day. And they rarely make it personal. In business, it's perfectly legitimate to question a competitor's product or strategy, but it's off-limits to attack their character.

The Democrats are going to attack every facet of Mitt Romney's experience, in the public and private sectors, in a way that none of his competitors in the private sector ever did. They're going to raise as many questions about his character as they possibly can. It's a nasty, unpleasant business, but anyone who thinks that the practice of democracy is all about the grandiose articulation of principles has done a very selective reading of history.

This is where Romney's second mistake is potentially fatal. The Democrats are going to raise questions in the minds of voters, and a fair number of voters are going to consider those questions legitimate. Mitt Romney is having trouble answering questions like when did he actually, officially, really, truly, honest-to-God-cross-my-heart leave Bain Capital, because he has never had to face those questions before. He has lived his life according to these precepts: the explanations of him and his lawyers will always be sufficient to answer questions about whether or not his actions were proper. If he signs a piece of paper, he and his associates have cleared it with the lawyers, so it's OK. Period, end of story. He simply has no experience with people who do not automatically accept his ability to explain fine legalistic details of his professional life. He assumes his own credibility, so he has no idea how to establish that credibility. His lawyers have both assumed that credibility as well, and worked hard to prevent anyone from even raising any questions about it. Mitt Romney has always had people around him who ran interference for him on questions of legality. It's been a closed loop; he hired people who assumed that what he was doing was legal and proper, and they then kept him in a bubble of legality and propriety. He's never had to question his own assumptions. So the Democrats are doing that for him.

Professional politicians, however, operate on the assumption that they will be questioned on those details, and they will have to explain them. They know they will be expected to release their tax returns. They know that their personal credibility is something that they have to establish very carefully, and then work very hard to maintain. They deal on a day-to-day basis with people who questions their assumptions and their legitimacy. 

Mitt Romney thinks that he, the son of a wealthy father, who had every possible advantage in life and who has spent most of his life surrounded by people who are very much like him, and who think like him, is tougher than the son of a single mother who had to use his own personal discipline and focus to rise to the highest levels of a society that, not so long ago, erected substantial barriers to success for people like him. Mitt Romney's formative experiences were in offices and boardrooms. Barack Obama's formative experiences were on the streets of Chicago. Mitt Romney may never realize that he has substantially underestimated how tough Barack Obama can be. But even if he realizes it tomorrow, it will probably be too late.


One of the toughest jobs in the world is selling yourself to someone who doesn't necessarily trust you, particularly when they can choose an alternative with one simple push of a button. Welcome to American politics on the national stage, Mr. Romney.

One Question for Ron Paul

So Ron Paul published some newsletters, but doesn't want to talk about them. I find this odd, because I thot that the whole reason a person would publish newsletters - particularly if said person named them after himself - they would want to talk about them. Not Mr. Paul! This may be because the content of said newsletters is proving to be somewhat toxic and controversial. I've seen enough quotes from them that I have serious questions about his ideas on racial equality. He doesn't seem like he is overtly racist, and I'm willing to grant - at least for the sake of argument in this blog post - that he isn't. But he also doesn't seem to really care that much about working towards healing the wounds of the past, and he doesn't seem to care that much about taking strong moral stands against racism. That's putting it very mildly, but that's also not my concern here.

What bothers me far more is his reluctance to take any kind of responsibility for these newsletters. When some incendiary rhetoric from his pastor surfaced during the 2008 campaign, Barack Obama took responsibility for addressing the concerns raised by that rhetoric. He didn't give the sermons, but he understood that, as the first African-American presidential candidate for a major party, he was expected to addresses issues of racial inequality in America. Which he did. When Obama made the decision to run for president, he knew he was simultaneously taking on a certain responsibility for addressing moral issues. That's the deal. That's sort of the point of being president - or any kind of leader - in a democracy. You're asking for an opportunity to present your ideas to the public, and, ideally, shape the public debate, and thereby determine the policies of the country.

I would just like to ask Ron Paul one question: you claim that you did not read these newsletters before they were published. Then why did you publish them? Presumably it cost you a certain amount of money to do so. There's the basic costs for incorporating, registering trademarks, etc. Then there's the cost of paying the writers, paying whoever did the layout, and, of course, the actual printing and mailing. All of those things require money, and some of them - like, say, actually hiring the writers - take time. I'm going to assume, Mr. Paul, that you are the person who hired the writers to write these newsletters. If that is not the case - if you outsourced that rather fundamental management decision - then this conversation is over, and the remaining shreds of my respect for you are gone.

So that's the question: if you did not intend to exercise editorial control over newsletter that went out under your name, presumably designed to publicize your political views, then why did you publish them in the first place?

Steve Jobs, an appreciation

I first started using Macs when I was in college. Macs were brand new. My family had had an Apple IIe (I think that was the model), but I never used it much. I remember my Dad being amazed that we had upgraded all the way to 64k of memory. But the screen was the classic green screen, and you couldn't do much more than type. But you could do lots of stuff with a Mac.

I wrote a paper in college about James Joyce's Ulysses. I argued that Joyce had achieved in literature what Einstein had achieved in physics. One of Einstein's great insights was that space and time were not separate, but were part of a continuum. Joyce, I wrote, understood form and content the same way. They are not separate, but part of a continuum. The (possibly pretentious) way that I put it was that form is infinitely refined content, and content is infinitely refined form. I'm not sure I could explain that today as well as I did then, so you're going to have to trust me on this one.

Part of Steve Jobs' genius is that he understood the relationship between art and technology in the same terms. Most people think of design and engineering as separate; Jobs understood that they are not just inextricably linked, but inseparable, and one informs the other. It's easy to design a machine without thinking about it's design; it's easy to design a machine without worrying about how well it works. It's very difficult to combine both. But, as Jobs understood, it's worth it. And because it's so hard, it's important to do it really, really well. Steve Jobs was not just a perfectionist because he wanted to be one; he was a perfectionist because he had to be one.

But it wasn't just art and technology that he understood as being parts of a continuum. He had the same understanding of art and commerce. The fact that Apple products are visually appealing isn't just a nice side effect of good design; that is part of what makes them useful. It's really easy to use an iPhone. The concept of a "user-friendly" computer was revolutionary in 1984. That simplicity is both aesthetically pleasing and technologically empowering. Again, that combination is very hard to pull off, but also worth it. And worth high prices. It's not just a nice idea to make something that beautiful that people also like using - it's a great business model.

Finally, this idea - that art and technology combine to make great products that are worth their price - is what drives Steve Jobs' other great contribution to American culture, Pixar. It's very technologically challenging to make a Pixar movie. But the fact that it's so technically difficult also means that the story has to be just as good, to justify the cost. Computer animation is nice to look at, but the charm of the images won't get enough people in theaters. Just like Apple, the perfectionism at Pixar isn't there just because the people there are neurotic obsessives. They're perfectionists because, like Steve Jobs, they have to be.

Sarah Palin's Presidential Ambitions

Will Sarah Palin run for President? That's one of the most intriguing questions in politics today.

Here's my definitive, unequivocal answer: yes and no.

Actually, that's my definitive, unequivocal answer to the question: "Does Sarah Palin want to be president?"

To understand Sarah Palin's presidential ambitions, it's important to understand two things:

1. Sarah Palin does not want the problems and headaches that come with being president of the United States. She doesn't want to have to make tough decisions. She doesn't like being held to a strict schedule. She doesn't have a lot of personal discipline.

2. Sarah Palin is really, really ambitious, and loves the fame, power, glory and, most of all, the attention that would come with being president.

Sarah Palin wants to be famous, and loves having lots of adoring fans. She would love nothing more than almost being president.

Consider how well the 2008 campaign worked out for her. She spent two months flying around the country on someone else's dime, rallying the troops, and establishing her brand. She didn't have to make a single difficult policy decision. The fact that McCain failed was largely laid at his feet. So Palin got lots of attention with very little responsibility. She would have loved being vice president. Vice presidents don't do much. Talk about a job with glory, attention and power, but very little responsibility.

Almost all politicians in a democracy - Democrat and Republican - understand that politics in a democracy is about enlightened self-interest. You have to be able to cooperate with people who disagree with you - at least occasionally - as well as compete with them. But that only applies if you want to accomplish something within the legislative system. Sarah Palin has zero interest in passing legislation. She therefore has zero interest in cooperating with people who disagree with her, and every intention of simply competing with them - or just criticizing them. She doesn't just have no interest in cooperating with Democrats who disagree with her. She also has no interest in cooperating with Republicans who disagree with her. This is unfortunate for most other establishment Washington Republican politicians, because it means that the day may come when acting in her own best self-interest means acting in a way that is contrary to the best interests of the party. Which she will do without hesitation.

The 2012 campaign presents her with a conundrum: she doesn't really want to win, but she wants all of the attention that she would get from a presidential campaign. Her ideal 2012 experience would be for her to campaign vigorously for president, and then lose in the primaries in a way that allows her to blame the Washington establishment for her failure. Her problem is that the person with the best chance of serving as her foil is Mitt Romney, who is a weak candidate.

But her solution is simplicity itself. All she has to do is be herself, because she will inspire her fans, continue to piss off Democrats of all stripes, and alienate independents and moderate Republicans. Traditional presidential campaign theory says that candidates must campaign in the primaries to win over the base, but be prepared to move to the center in the general election. But because Sarah Palin has no interest in winning the general election, she has no interest in preparing to move to the center. She can do whatever she wants to stir up her base, because that's all she wants to do. If she keeps her fans' fires of devotion going, but alienates enough centrist/mainstream/moderate Republicans that she doesn't get the nomination, she still comes out ahead. If she does ultimately get the nomination, she can continue to inspire her most loyal followers without worrying about convincing any moderates or Democrats to vote for her, because she ultimately doesn't really want to be elected president. We're talking about a woman who would love nothing more than to have yet more reasons to claim being a martyr.

Sarah Palin doesn't even really care whether or not the GOP wins the presidential election. She might even prefer Obama winning a second term, because it gives her a perfect foil. If Romney is elected, she can stay on the sidelines and be critical of him if she doesn't consider him conservative enough. But eventually most Republicans would get tired of her. But if Obama wins, she can keep presenting herself as channeling the base's frustrations.

What's wonderfully, deliciously ironic about this - at least from the perspective of a liberal Democrat - is that Sarah Palin is the perfect embodiment of conservative Republican capitalist ideology. She is motivated entirely by her own self-interest.

But it's also unfortunate for Sarah Palin, because, while none of those Washington Republicans are as good looking as her, many of them are smarter than her. And there are lots of them. And they have lots and lots and lots of money. Sarah Palin can keep this charade going unless, at some point, she makes a complete and utter fool of herself. At that point, the likes of Karl Rove might be able to diminish her influence on the party; they might be able to contain the damage she does in the future. But at that point, the damage to the GOP will have been done.

And Sarah Palin will have millions in the bank.

Obama, Israel, and the Arab Spring

So I watched Obama's speech on the Middle East. Many commentators seem to have focused on his comments on Israel, bluntly making it clear that the US favors a two-state solution. Nothing terribly unusual there; it's been clear for a while that will be required for a solution to this problem. He also spoke at length about the Arab Spring, and the hopes for democratic change. Again, doesn't seem very far out of the norm for a speech by an American president. Republicans, of course, attacked him for allegedly bailing on Israel. Part of this is appealing to hardline Israelis, hard of this is appealing to conservative Christians, and part of this is just a need on their part to attack Obama. More of the same.

But I haven't seen any commentary (although it's entirely possible that I missed it) on how the Arab Spring has completely changed the calculus in the Mideast, and how Obama grasps the importance of that. The Israeli-Palestinian issue has seemed intractable; both sides are dug in, neither trusts the other, and neither seems willing to compromise. But the Arab Spring has changed the debate, because it relieves a great deal of pressure on the Arab side of the equation. Corrupt Arab dictators have used Israel as a distraction; they've demagogued about Jews as a way of distracting their people from their own failings as leaders. The fact that many of them have access to oil wealth as a means of bribing their populations into complacency has, of course, been a big help.

But, as Lincoln said, you can't fool all of the people all of the time. Some of the countries undergoing transformation in the Mideast will become stable, secure democracies. Some won't. Some may very well see one dictatorship replaced with another. The best historical precedent that I can think of is what happened in with the dissolution of the Soviet empire in 1989. East Germany was absorbed into West Germany, and the Central European states are free, while some in the Caucasus are not. The same will probably be the case in the Arab world; some countries will make a successful transition to democracy, some won't.

But those that do, it can be reasonably hoped, will flourish. And with that flourishing will come, again it is to be reasonably hoped, a lessening of the pressure to blame Israel and the Jews for the problems of Arabs. It won't be easy, but it's been done before.

Netanyahu and his Republicans allies don't see things this way. Hardline Israelis, at this point, just don't have a lot of faith in the ability of Arabs to become peace-loving neighbors. It's not hard to understand why they think that. But it's also not hard to understand that they can not afford to think that very much longer. Likud will be very reluctant to negotiate. And, of course, there are more than a few Jews in Israel who believe that the land is there by divine right. There are also a fair number of fundamentalist Christians and Jews in this country who agree with that. In this respect, the interests of conservative Israelis and conservatives Republicans are aligned.

Their interests are also aligned in the sense that they want to see Obama fail. In Netanyahu's ideal world, a Republican wins in 2012, and he gets to spend another few years resisting pressure from around the world to compromise on a two-state solution.

But a key difference between Netanyahu and Republicans is that Bibi isn't stupid, and he doesn't have a fallback option. If Mitt Romney doesn't become president, he'll still be a rich, comfortable American. What is at stake for Netanyahu is the survival of the state of Israel. Republicans don't mind a state of permanent war; it keeps the defense contractors happy. Israelis know that, ultimately, it is not sustainable. But right now, they are also scared that, if they give an inch, the Arabs, like Hamas, will take full advantage of their weaknesses, and destroy them. This is why the Arab Spring is so important: it provides a glimmer of hope that peace may, in fact, be a viable option. Hardline Israelis are still very skeptical of this, for very good reason. But the whole point of Obama's speech was to take that tiny flowering of hope, that smidgen of optimism, and make it grow. That is, after all, his specialty.

Obama and Netanyahu do not like each other, and they don't really trust each other. But they do respect each other. Each is a very smart man, and each is a brilliant politician. The key difference between Netanyahu and his Republican allies is that Netanyahu, in the long run, doesn't care whether or not Obama is reelected. But he does care a great deal the survival of the state of Israel, and he knows that peace is required for that. Republicans also want the survival of the state of Israel, but they also prefer a mindset that encourages Americans to be afraid of terrorists, so the Pentagon budget stays at its absurd levels. But what is most important to Republicans is delegitimizing Obama. If Obama can convince Netanyahu that he can at least make progress towards peace, he can split Likud and the Republicans. It won't be a wide split, but Obama can make it clear that their interests are not as solidly aligned as it seems they are today. Besides, Obama also knows that there are lots of American Jews - most, actually - who are liberal Democrats, and therefore agree with him. Part of the purpose of his speech was to mobilize them to be on his side. Obama has a chance of convincing Netanyahu to work with him, because Netanyahu respects Obama's political abilities. Obama's chief of staff was a Jew from Chicago. Rahm Emanuel is one of the toughest politicians in America, and he worked for Obama. Many Republicans look at Obama and see an effete liberal intellectual. Netanyahu does not make that mistake.

The possibility of achieving peace between Israelis and Palestinians seems almost impossible to achieve. But a year ago, if you had said to anyone in the world that Hosni Mubarak would be overthrown by mobs in the streets of Cairo, you would have been laughed at. And if, in 2003 you had said that a black guy with a Muslim name who was an obscure state senator in Illinois would become president of the United States in 2008, every single person in the world would have thought you were crazy.

Every single person in the world except for two: Barack Obama. And Michelle Obama.

Obama: The Anti-Reagan

I haven't posted here in a long, long time, but a friend texted me that Obama is losing him. Time to get back on it.

Obama is the anti-Reagan. The superficial contrasts are obvious, apart from the skin color; Obama is a young president; Reagan was our oldest. Reagan came from the heartland, Obama literally from the geographical fringe of the country. Reagan was a movie star; Obama is a policy wonk. Reagan had a long history with both America and the conservative movement long before he became president; Obama sprang into Democrat consciousness literally overnight with one speech. They had similar family backgrounds, both from dysfunctional or non-traditional families of modest means. But where Reagan was divorced and a famously distant father, Obama is a devoted family man, with zero skeletons in his closet.

It is on policy political strategies where the differences are, of course, most important. The policy differences are obvious, although the argument could be made that Obama shifted closer to Reagan after he was elected. On the other hand, just about any president could be accused of changing in ways that make their constituencies uncomfortable.

But what was gone unnoticed and unremarked - probably because it's very difficult to tell - are the stylistic and strategic differences. Both, of course, are excellent public speakers, but the similarity basically ends there. Reagan had three basic beliefs: lower taxes, smaller government, and a strong defense. He believed in capitalism and the basic goodness of the American people. That was pretty much it.

Obama's political philosophy cannot, on the other hand, be reduced to a slogan, and he's barely tried to do so. He believes in the broad spectrum of liberal ideas; feminism, civil rights, gay rights, empowering the poor, protecting the environment, etc. The closest he's come to a tag line of late is "Winning The Future," which translates into a very poor choice of acronym, and which seems to be fading quickly. In 2008, he was all about hope and change, the epitome of nebulous campaign promises. It's hard to pin Obama down to specifics, either in terms of policy or even tenets of his ideology. Many of his supporters are uncomfortable with this, because it looks like he's waffling, or not making a commitment, or compromising too early or too often.

The other great contrast between Reagan and Obama is in terms of political strategy. Reagan would outline a basic goal, give uplifting but vague speeches, challenge his opponents directly, and refuse to compromise. But then he would compromise at the last minute, declare victory, and move on, so it looked like he won. This is one reason conservatives idolize him. They buy into the myth that he was a rigid ideologue, when he was also very much a realistic, pragmatic politician.

Obama is famously willing to compromise, and constantly reaching out to his political opponents, trying hard to reach consensus, broker deals, make sure everyone is involved in the process. Again, many of his supporters are uncomfortable with this approach, because it looks like he's compromising when he doesn't have to, or he's letting his opponents dictate parts of the agenda.

But the most important difference between Reagan and Obama - and this is where Obama beats Reagan, hands down - is that Obama is an absolutely masterful political tactician. Obama is very good at seeing the big picture politically, and defining a successful strategy. Hillary Clinton learned this too late - the 2008 campaign was a great strategic success. Obama and his team mapped out how they were going to win, followed the plan, and won.

But what is almost impossible for the public to see is how good Obama is with political tactics. His work on gay rights is the best illustration of this. He campaigned on ending the ban on gays serving in the military. For a long time, it looked like he wasn't doing much to advance that cause, and his supporters were grumbling. He had set up a commission to look into it, and the commission was set to issue its report in early December, 2010. That would be after the election, but before the new Congress took office. The results of the commission's study therefore would not be released in time to be an issue in the election, but they would be released in time for Congress to act on them.

I don't remember exactly how repealing the ban went down. It happened between Christmas and New Year's, when the American public is not paying much attention to politics. There was some kind of parliamentary maneuvering going on, but the Democrats got enough Republicans on board to make it happen. I think some of the Republicans who voted for it were about to retire, so they could "vote their conscience." I seem to recall Joe Lieberman being a strong advocate of it.

I have roughly the same perspective on his actions on the Defense of Marriage Act (DOMA). There isn't much Obama can do on this. It's not going to be repealed by Congress any time soon. Obama's position on gay marriage is "evolving," which is a very politically convenient way of not making a commitment for it, but not rejecting it either. That may even be true. But it's a classic politician's finesse - he doesn't want to piss of his gay supporters by coming out (sorry, couldn't resist) against gay marriage, but he's also aware that there are many independents and conservatives who are strongly against it. So he had his Attorney General come out with a hair-splitting position - the Dept. of Justice will not defend part of it in court, but they will continue to enforce it. I'm not quite sure how it works, and I work for a law firm.

It's all very confusing.

Which is exactly the point.

The fact that these processes - of repealing the ban on gays in the military, and challenging DOMA - were confusing is part of Obama's political strategy. Republicans had a hard time finding a point to challenge repealing the ban on gays in the military, other than the vote itself - which took place at the end of a lame duck session. Who would argue against a commission set up to study the issue? Now that the law has been passed, the Pentagon still has to draw up plans for implementation. Once it's official, most gay members of the military will probably come out slowly. The whole process is long, drawn out, and involved lots of people besides Obama himself - Bob Gates at the Pentagon, Harry Reid in the Senate. It's an incendiary issue, but Obama's process - long, bureaucratic, mostly behind the scenes - obscured the opportunities for heated rhetoric, and therefore diffused the anger. There is time between when the debate happened, when the law passed, and when it's implemented, giving the American people time to adjust to the issue.

But homosexuals in the military will be a fact of life by November 2012, and Barack Obama will take the lion's share of the credit. He'll tell his gay supporters that he delivered on a key campaign promise.

We see the same thing in DOMA. Obama's DOJ is not defending it, but is enforcing it. The DOJ informed Congress that it could DOMA in court if it wanted to, but that, of courses, puts the pressure to do so on John Boehner. I can barely follow it, and I work for a law firm. But it's a win-win for Obama. If DOMA is partially overturned, he will declare victory, but claim that it was a decision by a court. If he doesn't win, he can claim that he tried, but that it's either the fault of Republicans, or a court. Tactically, it's great. But it's very difficult to understand unless you are a hardcore political geek.

One problem with this approach is that while it confuses his opponents, it also confuses his supporters, even those who are smart and fairly politically savvy, like Matt Damon and other celebrities. This article explains why he and other celebrities are disillusioned. Unfortunately for both Obama and his supporters, it's in the media's best interest to play up how disappointed Obama fans are. But this particular article is both incredibly sloppy and clearly intent on playing up the disappointment. The picture of Matt Damon shows him scowling, to accentuate the point that he's unhappy. But the wall on the background reads "TIFF," or Toronto International Film Festival. That takes place in September. Since then, Matt Damon has been nominated for an Oscar, and photographed dozens, if not hundreds, of times. He's generally a very upbeat guy. But they somehow managed to find a picture of him looking unhappy.

Barbra Streisand is quoted as being unhappy that Obama didn't use executive privilege to repeal Don't Ask Don't Tell. The quote is from some time "in December," i.e. before Congress repealed it. I think we can safely assume that Barbra Streisand is now happy with Obama's strategy to repeal DADT given that THE STRATEGY ACTUALLY FRICKIN' WORKED. Matt Damon is not happy about testing kids in schools. Neither am I, but that's a product of the Bush administration, and Obama has not been able to undo it. Jane Lynch is disappointed that Obama has not been able to do anything about gay marriage. The quote from her is from early January, again, well before Obama ACTUALLY DID SOMETHING ABOUT GAY MARRIAGE.

Other celebrities who are unhappy with Obama about a particular issue include Hugh Hefner, Spike Lee, and Robert Redford. You know what? Give me 10 minutes, and I can find a whole bunch of celebrities who are unhappy with Obama. There were lots of liberals unhappy with Clinton. Lots of conservatives grumbled about Reagan. That's the nature of politics. As someone (I think Maria Cuomo) said, you campaign in poetry, and you govern in prose. The nuts and bolts of actually governing are always less exciting, and infinitely more frustrating, than the campaign. Obama waits a long time to move before he does so. But in the process, he's refining his plans and laying the groundwork. Which is difficult, if not impossible to see. But absolutely necessary.

What's the best possible evidence that Obama moves quickly? This is a man who went from being an Illinois state senator to being president of the United States in four years.

There is one more similarity between Obama and Reagan: both of them were seriously underestimated by their opponents. And, occasionally, their supporters.

Defending Derivatives and Responsible Financial Innovation

I'm a big fan of making bets on opening weekend box office grosses - that's the raison d'etre of my other blog, TEQP-HSX. I've used real money on Intrade, although not for a while. So I was very excited about Cantor Exchange, the real-money spin-off of the Hollywood Stock Exchange. Cantor works just like HSX, except that the stocks have a shorter lifespan, and there is real money involved. The securities on Cantor are technically derivatives, and, as such, trading them has to be approved by the Commodities and Futures Trading Commission. A great explanation of the potential benefits from Richard Jaycobs, president of Cantor, can be found here.

Most of the debate around trading in futures based on box-office receipts has revolved around technical questions, such as whether or not such contracts could be manipulated, how they would work, etc. There hasn't been much examination of the philosophical issues. That's what I am going to look into.

The core issue is innovation. Trading in box office receipts represents financial innovation. I'm not surprised that the major studios are opposed to it; this is the same industry that fought the VCR all the way to the Supreme Court. They were worried that machines that gave people the ability to watch movies at home would cut into their revenue; those machines are now a major source of that revenue. I can understand their initial opposition to VCRs - at the time, the idea that videotapes would generate lots of money for the studios seemed absurd. The lesson is that we don't know what the future holds, but that it's a usually a good idea to err on the side of more innovation, rather than less.

There's a saying in the movie business that movies are a great art form, but a terrible business. Consider: every movie is effectively a completely new product, almost a new company. Studios invest millions of dollars in products that can technically last forever, but really have a shelf life of a couple of months. Every product has to be completely different from, and yet very similar to, every other iteration of the product that has come before it.

Movie studios and movie theaters have come up with many different ways to control the chaos and hedge against the uncertainty of this wonderful and maddening business. Studios take out insurance against various kinds of calamity. They look for franchises, so they can make several movies that are fairly similar, and therefore likely to generate predictable returns. They use famous stars and directors who can dependably "open" a movie. They follow trends and jump on bandwagons. They test-market potential audiences. They scour film festivals for undiscovered gems that they can buy cheap, hoping for a hit. Theater chains build multiplexes, so that if one movie is not successful on a given weekend, they have others that are. They charge astronomical amounts for junk food.

All of these trends and business practices represent different instances of innovation, except sequels, which have been around since the Iliad and Odyssey. Each of these also has its downside; stars can be expensive, and many eventually lose their allure for audiences. Many sequels are not as good as the original. Many movies based on books or TV shows are not as good as the property they were based on. Trends burn out. Failure is inevitable with any widespread innovation. But learning from failure is part of what fosters further innovation.

I've read the statement by the MPAA before the CFTC on why they think these derivatives are a bad idea. I don't know whether or not all of the terrible consequences that they predict from trading in box office futures will come true. Nobody knows. That's the beauty of democracy: we experiment, and, if we're wrong, we change.

There is one aspect of this debate of which I am confident: this represents - and I realize that, given the current economic environment, this may sound almost like a contradiction in terms - responsible financial innovation. Our current economic crisis was brought about in large part because of irresponsible financial innovation. But box office derivatives are very different from exotic financial instruments like CDO's. First, CDO's are extremely opaque and obscure - most people had never heard of them before 2008, and even many sophisticated financial professionals have no idea how they work. Box office numbers, on the other hand, are public information; there are few pieces of financial information more widely available to the public. It's also very simple: that's why there are hundreds of thousands of players on HSX. There are some risks, but there are regulatory structures in place to deal with those risks that raise ethical or legal issues. Again, I don't know whether or not those structures will be adequate to address the risks and contain bad behavior. No one knows. What we do know is that those regulations, rules, and institutions can be adjusted and changed. Given the public nature of the information and the simplicity of the securities, I am confident the US government can handle the challenges of regulating these securities. The total value of the market will be a fraction of the market value of a single large company. It will not necessarily be easy to police this market, but it certainly won't be impossible.

At the end of the day, there is only one reliable way to make money in the movie business: make good movies. The problem, of course, is that no one - other than Pixar - has really figured out how to do that on a consistent basis. Some people are better at it than others - those are the ones that get to do it again. The market rewards those who make good movies. A market in box office futures will have the same effect: it will reward people who make and invest in good movies, and it will punish people who make and invest in bad movies. It will also have the opposite effect: it will punish people who bet against good movies, and it will punish people who invest in bad movies.

The movie studios have legitimate concerns, particularly about piracy and market manipulation. But the best defense against both of those is the same: make good movies. Seeing a movie at a movie theater is still a great entertainment value. Actually, I'd like to qualify that: seeing a good movie at a movie theater still is, and always will be, a great entertainment value. Markets in box office derivatives will be vulnerable to rumors. But so are all securities markets. The best defense against rumors is, once again, the same thing. Many, many very successful movies - from Jaws to Titanic and even the remake of The Karate Kid - have suffered from rumor, innuendo, and just bad analysis. The Karate Kid was a remake of an 80's movie at a time when the audience was supposed to be hungry for originality and tiring of remakes. It opened on the same weekend as The A-Team, which was also a remake of an 80's entertainment property. Both movies were predicted to open between $30 and $35 million. The A-Team opened at $26 million. The Karate Kid opened at $56 million. No one - not even the studio - had any idea it was going to do that well. But the optimists (I, unfortunately, was not among them) made a killing. The best way to manipulate this market is to make a good movie.

Trading in box office futures represents responsible financial innovation that rewards people who make and invest in good movies. For that reason, I think they should be approved.

Bloomsday and Bloody Sunday

There are a lot of things going on right now that I am interested in - Obama's speech last night, the Lakers about to crush the Celtics in the NBA Finals, the World Cup, the sort-of failure of The A-Team at the box office. But I noticed an interesting convergence of Irish historical moments today. June 16 is Bloomsday, the day that Ulysses takes place: June 16, 1904. Which is the day that Joyce went on his first date with Nora, his wife.

Tim Rutten, in the LA Times, reminds us of a great line: "History is a nightmare from which I am trying to awake." This is eerily appropos of the second moment in Irish history that is being dealt with - not merely observed - today. The British government released a report about Bloody Sunday, the day in 1972 when British soldiers opened fire on unarmed civilians. That unleashed "the Troubles," the years which saw 3,000 people die in sectarian violence.

This is the nightmare from which we are trying to awake. In America, it is hard for us to comprehend differences between two branches of Christianity as being so violent as to cause thousands of deaths. We have, in a sense, awoken from that nightmare.

We have also awoken from a nightmare that afflicted Joyce, that of censorship. The link above in the title of his masterwork goes to Amazon, where you can buy many different copies of this book, and lots of other books about Joyce. That wasn't always the case: it was initially banned in this country.

Every culture needs something to be good at, something that its people take pride in, something that they are better at than other peoples, other countries. For the Irish, this is literature. Novels, plays, poetry - the Irish are genius at creating art with words. Joyce personified this: what he gave the world was a beautiful but difficult work, a spectacularly gorgeous and challenging ode to his hometown of Dublin. He challenged himself, he challenged his readers, he challenged other artists.

What the British government has done today is to rise to a challenge, one that it imposed on itself: the challenge to live up to its own ideals. The United Kingdom demanded of itself that it hold itself accountable for its own failures. That is an extraordinarily difficult task. It was also extraordinarily necessary.

I'm going to end this post by quoting Ulysses, because I've read it. I've been to Dublin, and even read the first chapter in the tower where it takes place. I'm only going to quote one word, but it's the most famous word in the book, the one everyone who finishes it remembers, because it's the last word:

"Yes."