Chapter 1 of Robert J. Shiller’s book, over at Princeton University Press:

The subprime crisis is the name for what is a historic turning point in our economy and our culture. It is, at its core, the result of a speculative bubble in the housing market that began to burst in the United States in 2006 and has now caused ruptures across many other countries in the form of financial failures and a global credit crunch. Th e forces unleashed by the subprime crisis will probably run rampant for years, threatening more and more collateral damage. The disruption in our credit markets is already of historic proportions and will have important economic impacts. More importantly, this crisis has set in motion fundamental societal changes—changes that affect our consumer habits, our values, our relatedness to each other. fRom now on we will all be conducting our lives and doing business with each other a little bit differently.

Allowing these destructive changes to proceed unimpeded could cause damage not only to the economy but to the social fabric—the trust and optimism people feel for each other and for their shared institutions and ways of life—for decades to come. The social fabric itself is so hard to measure that it is easily overlooked in favor of smaller, more discrete, elements and details. But the social fabric is indeed at risk and should be central to our attention as we respond to the subprime crisis.

History proves the importance of economic policies for preserving the social fabric. Europe after World War I was seriously damaged by one peculiar economic arrangement: the Treaty of Versailles. The treaty, which ended the war, imposed on Germany punitive reparations far beyond its ability to pay. John Maynard Keynes resigned in protest from the British delegation at Versailles and, in 1919, wrote The Economic Consequences of the Peace, which predicted that the treaty would result in disaster. Keynes was largely ignored, the treaty remained in force, and indeed Germany never was able to pay the penalties imposed. The intense resentment caused by the treaty was one of the factors that led, a generation later, to World War II.

A comparable disaster—albeit one not of quite the same magnitude—is brewing today, as similar concerns are hammering at our psyches.

Nassim Nicholas Taleb in Edge:

The current subprime crisis has been doing wonders for the reception of any ideas about probability-driven claims in science, particularly in social science, economics, and “econometrics” (quantitative economics).  Clearly, with current International Monetary Fund estimates of the costs of the 2007-2008 subprime crisis,  the banking system seems to have lost more on risk taking (from the failures of quantitative risk management) than every penny banks ever earned taking risks. But it was easy to see from the past that the pilot did not have the qualifications to fly the plane and was using the wrong navigation tools: The same happened in 1983 with money center banks losing cumulatively every penny ever made, and in 1991-1992 when the Savings and Loans industry became history.

It appears that financial institutions earn money on transactions (say fees on your mother-in-law’s checking account) and lose everything taking risks they don’t understand. I want this to stop, and stop now— the current patching by the banking establishment worldwide is akin to using the same doctor to cure the patient when the doctor has a track record of systematically killing them. And this is not limited to banking—I generalize to an entire class of random variables that do not have the structure we thing they have, in which we can be suckers.

And we are beyond suckers: not only, for socio-economic and other nonlinear, complicated variables, we are riding in a bus driven a blindfolded driver, but we refuse to acknowledge it in spite of the evidence, which to me is a pathological problem with academia. After 1998, when a “Nobel-crowned” collection of people (and the crème de la crème of the financial economics establishment) blew up Long Term Capital Management, a hedge fund, because the “scientific” methods they used misestimated the role of the rare event, such methodologies and such claims on understanding risks of rare events should have been discredited. Yet the Fed helped their bailout and exposure to rare events (and model error) patently increased exponentially (as we can see from banks’ swelling portfolios of derivatives that we do not understand).

Are we using models of uncertainty to produce certainties?

(If anybody feels like perspiring [cough], I’d advise you to go ahead, because I’m sure going to. In fact I’m gonna [mumbles while pulling up his gown and taking out a handkerchief from his pocket].) Greetings [“parents”?] and congratulations to Kenyon’s graduating class of 2005. There are these two young fish swimming along and they happen to meet an older fish swimming the other way, who nods at them and says “Morning, boys. How’s the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes “What the hell is water?”

This is a standard requirement of US commencement speeches, the deployment of didactic little parable-ish stories. The story [“thing”] turns out to be one of the better, less bullshitty conventions of the genre, but if you’re worried that I plan to present myself here as the wise, older fish explaining what water is to you younger fish, please don’t be. I am not the wise old fish. The point of the fish story is merely that the most obvious, important realities are often the ones that are hardest to see and talk about. Stated as an English sentence, of course, this is just a banal platitude, but the fact is that in the day to day trenches of adult existence, banal platitudes can have a life or death importance, or so I wish to suggest to you on this dry and lovely morning.

more here (h/t Alan Koenig).

IT IS, or was, fashionable to look down on Bernard-Henri Lévy, a French writer and intellectual. The left tends to despise him for questioning its idols. It doesn’t help that he is rich, talks intelligibly and has a beautiful wife. The right condescends to him for being vain, glib and writing too many books.

So it was satisfying for Mr Lévy to get a begging call from Nicolas Sarkozy last year when he was running for the French presidency. The two men knew each other from Mr Sarkozy’s former constituency, Neuilly, on the edge of Paris, where Mr Lévy lives and votes. As France’s star intello de gauche, could Mr Lévy write “a nice article” endorsing him? No, he couldn’t, Mr Lévy told him. The left was his family. “Your family?” Mr Sarkozy retorted, “These people who’ve spent 30 years telling you to go fuck yourself?” Mr Lévy held firm. Despite everything, he still belonged on the left.

more from The Economist here.

///
–Reality check

Our Revels Are Now Ended
William Shakespeare

Our revels now are ended. These our actors,
As I foretold you, were all spirits and
Are melted into air, into thin air:
And, like the baseless fabric of this vision,
The cloud-capp’d towers, the gorgeous palaces,
The solemn temples, the great globe itself,
Yea, all which it inherit, shall dissolve
And, like this insubstantial pageant faded,
Leave not a rack behind. We are such stuff
As dreams are made on, and our little life
Is rounded with a sleep.
///

Recent accounts of murderous violence in the capital cities of two of our allies, India and Afghanistan, make it appear overwhelmingly probable that the bombs were not the work of local or homegrown “insurgents” but were orchestrated by agents of the Pakistani ISI. This is a fantastically unacceptable state of affairs, which needs to be given its right name of state-sponsored terrorism. Meanwhile, and on Pakistani soil and under the very noses of its army and the ISI, the city of Quetta and the so-called Federally Administered Tribal Areas are becoming the incubating ground of a reorganized and protected al-Qaida. Sen. Barack Obama has, if anything, been the more militant of the two presidential candidates in stressing the danger here and the need to act without too much sentiment about our so-called Islamabad ally. He began using this rhetoric when it was much simpler to counterpose the “good” war in Afghanistan with the “bad” one in Iraq. Never mind that now; he is committed in advance to a serious projection of American power into the heartland of our deadliest enemy. And that, I think, is another reason why so many people are reluctant to employ truthful descriptions for the emerging Afghan-Pakistan confrontation: American liberals can’t quite face the fact that if their man does win in November, and if he has meant a single serious word he’s ever said, it means more war, and more bitter and protracted war at that—not less.

more from Slate here.

In front of Costner is a glass of mineral water.

As he leans forward to take a sip, he reveals his highlighted, balding head and a parcel of flab around his midriff. At 53, with his goatee and deep tan, he looks like an ageing golf pro. It’s only when Costner cracks his wonky half-smile that he resembles a movie star, but, in the course of our time together, he has little cause to do so.

Outside, a gaggle of publicists are twittering away, comparing BlackBerrys. When the interview is over, they ask an obligatory question: “How did it go with Kevin?” I’m not sure what to say. Our conversation encompassed Costner’s views on death and failure. He became irritated. At one particularly frosty moment, he demanded: “What is with these questions?” He also called me “weird”. It was, I tell them, a mixed bag.

In Los Angeles, Costner is, like Bernard in Death of a Salesman, “liked, but not well liked”.

more from The Times here.

From The New York Times:

The principal rationale for the $3 billion spent to decode the human genome was that it would enable the discovery of the variant genes that predispose people to common diseases like cancer and Alzheimer’s. A major expectation was that these variants had not been eliminated by natural selection because they harm people only later in life after their reproductive years are over, and hence that they would be common. This idea, called the common disease/common variant hypothesis, drove major developments in biology over the last five years. Washington financed the HapMap, a catalog of common genetic variation in the human population. Companies like Affymetrix and Illumina developed powerful gene chips for scanning the human genome. Medical statisticians designed the genomewide association study, a robust methodology for discovering true disease genes and sidestepping the many false positives that have plagued the field.

But David B. Goldstein of Duke University, a leading young population geneticist known partly for his research into the genetic roots of Jewish ancestry, says the effort to nail down the genetics of most common diseases is not working. “There is absolutely no question,” he said, “that for the whole hope of personalized medicine, the news has been just about as bleak as it could be.”

“It’s an astounding thing,” Dr. Goldstein said, “that we have cracked open the human genome and can look at the entire complement of common genetic variants, and what do we find? Almost nothing. That is absolutely beyond belief.”

More here.

Liu Zheng. 135 – A Young Girl with Her Bare Head.

More here and here.

Jo Becker, Peter S. Goodman and Michael Powell in the NYT:

Gov. Sarah Palin lives by the maxim that all politics is local, not to mention personal.

So when there was a vacancy at the top of the State Division of Agriculture, she appointed a high school classmate, Franci Havemeister, to the $95,000-a-year directorship. A former real estate agent, Ms. Havemeister cited her childhood love of cows as a qualification for running the roughly $2 million agency.

Ms. Havemeister was one of at least five schoolmates Ms. Palin hired, often at salaries far exceeding their private sector wages.

When Ms. Palin had to cut her first state budget, she avoided the legion of frustrated legislators and mayors. Instead, she huddled with her budget director and her husband, Todd, an oil field worker who is not a state employee, and vetoed millions of dollars of legislative projects.

And four months ago, a Wasilla blogger, Sherry Whitstine, who chronicles the governor’s career with an astringent eye, answered her phone to hear an assistant to the governor on the line, she said.

“You should be ashamed!” Ivy Frye, the assistant, told her. “Stop blogging. Stop blogging right now!”

Ms. Palin walks the national stage as a small-town foe of “good old boy” politics and a champion of ethics reform. The charismatic 44-year-old governor draws enthusiastic audiences and high approval ratings. And as the Republican vice-presidential nominee, she points to her management experience while deriding her Democratic rivals, Senators Barack Obama and Joseph R. Biden Jr., as speechmakers who never have run anything.

But an examination of her swift rise and record as mayor of Wasilla and then governor finds that her visceral style and penchant for attacking critics — she sometimes calls local opponents “haters” — contrasts with her carefully crafted public image.

Mahmood Mamdani in The Nation:

On July 14, after much advance publicity and fanfare, the prosecutor of the International Criminal Court applied for an arrest warrant for the president of Sudan, Omar Hassan Ahmad al-Bashir, on charges that included genocide, crimes against humanity and war crimes. Important questions of fact arise from the application as presented by the prosecutor. But even more important is the light this case sheds on the politics of the “new humanitarian order.”

The conflict in Darfur began as a civil war in 1987-89, before Bashir and his group came to power. It was marked by indiscriminate killing and mass slaughter on both sides. The language of genocide was first employed in that conflict. The Fur representative at the May 1989 reconciliation conference in El Fasher pointed to their adversaries and claimed that “the aim is a total holocaust and no less than the complete annihilation of the Fur people and all things Fur.” In response the Arab representative traced the origin of the conflict to “the end of the ’70s when…the Arabs were depicted as foreigners who should be evicted from this area of Dar Fur.”

The ICC prosecutor, Luis Moreno-Ocampo, has uncritically taken on the point of view of one side in this conflict, a side that was speaking of a “holocaust” before Bashir came to power, and he attributes far too much responsibility for the killing to Bashir alone. He goes on to speak of “new settlers” in today’s Darfur, suggesting that he has internalized this partisan perspective.

Oliver Sacks in the NYRB:

The special qualities of mania have been recognized and distinguished from other forms of madness since the great physicians of antiquity wrote on the subject. Aretaeus, in the second century, gave a clear description of how excited and depressed states might alternate in an individual, but the distinction between different forms of madness was not formalized until the rise of psychiatry in nineteenth-century France. It was then that “circular insanity” (folie circulaire or folie à double forme)—what Emil Kraepelin later called manic-depressive insanity and what we would now call bipolar disorder—was distinguished from the much graver disorder of “dementia praecox” or schizophrenia. But medical accounts, accounts from the outside, can never do justice to what is actually experienced in the course of such psychoses; there is no substitute here for firsthand accounts.

There have been several such personal accounts over the years, and one of the best, to my mind, is Wisdom, Madness and Folly: The Philosophy of a Lunatic by John Custance, published in 1952. He writes:

The mental disease to which I am subject is…known as manic depression, or, more accurately, as Manic depressive Psychosis…. The manic state is one of elation, of pleasurable excitement sometimes attaining to an extreme pitch of ecstasy; the depressive state is its precise opposite, one of misery, dejection, and at times of appalling horror.

Michael Reiss, director of education at the Royal Society, in the Guardian:

What should science teachers do when faced with students who are creationists? Definitions of creationism vary, but about 10% of people in the UK believe that the Earth is only some 10,000 years old, that it came into existence as described in the early parts of the Bible or the Qur’an and that the most evolution has done is to split species into closely related species.

At the same time, the overwhelming majority of biologists consider evolution to be the central concept in biological sciences, providing a conceptual framework that unifies every aspect of the life sciences into a single coherent discipline. Equally, the overwhelming majority of scientists believe that the universe is of the order of about 13 to 14 billion years old.

Evolution and cosmology are understood by many to be a religious issue because they can be seen to contradict the accounts of origins of life and the universe described in the Jewish, Christian and Muslim Scriptures. The issue seems like an ongoing dispute that has science and religion battling to support the credibility of their explanations.

I feel that creationism is best seen by science teachers not as a misconception but as a world view. The implication of this is that the most a science teacher can normally hope to achieve is to ensure that students with creationist beliefs understand the scientific position. In the short term, this scientific world view is unlikely to supplant a creationist one.

Also see Chris Bertram on the piece over at Crooked Timber.

And here’s the transcript.

Melissa Del Bosque in The Texas Observer:

That’s when he heard the yowling.

It was a high-pitched wail, like infants crying, coming from inside the Cherokee. Garcia peered inside the blue crates. There were no bundles of cocaine, no kilos of marijuana. Instead, he saw six tiny tiger cubs peering back at him. It turned out they were endangered Bengal tiger cubs (four white and two orange) bound for a private animal dealer in Mexico.

Garcia could do little. The tiger smugglers hadn’t committed a state crime. You might think it’s illegal to buy or sell an endangered tiger cub in Texas, but it isn’t. For $500, you can buy an orange Bengal tiger and tie it up in your yard, no questions asked (a white tiger will cost you $5,000). It’s all perfectly legal in Texas.

More here.

///

A Nostlagist’s Map of America
Agha Shahid Ali.

The trees were soon hushed in the resonance

of darkest emerald as we rushed by

on 322, that route that took us from

the dead center of Pennsylvania.
………………

(a stone marks it) to a suburb ten miles

from Philadelphia. “A hummingbird”,

I said, after a sharp turn, then pointed

to the wheel, still revolving in your hand.
………………

I gave Emily Dickinson to you then,

line after line, complete from heart. The signs

on Schuylkill Expressway fell neat behind us.

I went further: “Let’s pretend your city
………………

is Evanescence – There has to be one –

in Pennsylvania – And that some day –

the Bird will carry – my letters – to you –

from Tunis – or Casablanca – the mail
………………

an easy night’s ride – from North Africa.”

I’m making this up, I know, but since you

were there, none of it’s a lie. How did I

go on? “Wings will rush by when the exit
………………

to Evanescence is barely a mile?”

the sky was dark teal, the moon was rising.

“It always rains on this route”, I went on,

“which takes you back, back to Evanescence,
………………

your boyhood town”. You said this was summer,

this final end of school, this coming home

to Philadelphia, WMMR

as soon as you could catch it. What song first
………………

came on? It must have been a disco hit,

one whose singer no one recalls. It’s six,

perhaps seven years since then, since you last

wrote. And yesterday, when you phoned, I said,
………………

“I knew you’d call,” even before you could

say who you were. “I am in Irvine now

with my lover, just an hour from Tuscon

and the flights are cheap.” “Then we’ll meet often.”
………………

For a moment you were silent, and then,

“Shahid, I’m dying”. I kept speaking to you

after I hung up, my voice the quickest

mail, a cracked disc with many endings,
………………

each false: One: “I live in Evanescence

(I had to build it, for America

was without one). All is safe here with me.

come to my street, disguised in the climate
………………

of Southern California. Surprise

me when I open the door. Unload skies

of rain from distance drenched arms.” Or this:

“Here in Evanescence (which I found – though
…………………………

not in Pennsylvania – after I last

wrote), the eavesdropping willows write brief notes

on grass, then hide them in shadows of trunks.

I’d love to see you. Come as you are.” And
…………………………

this, the least false: “You said each month you need

new blood. Please forgive me, Phil, but I thought

of your pain as a formal feeling, one

useful for the letting go, your transfusions
…………………………

mere wings to me, the push of numerous

hummingbirds, souveniers of Evanescence

seen disappearing down a route of veins

in an electric rush of Cochineal.”

///

From The National Geographic:

Put it this way: The universe is a tough nut to crack.

Go back a little more than a century to the late 1800s, and look at the field of physics: a mature science, and rather complacent. There were those who believed there wasn’t much more to do than smooth out some rough edges in nature’s plan. There was a sensible order to things, a clockwork universe governed by Newtonian forces, with atoms as the foundation of matter. Atoms were indivisible by definition—the word comes from the Greek for “uncuttable.”

But then strange things started popping up in laboratories: x-rays, gamma rays, a mysterious phenomenon called radioactivity. Physicist J. J. Thomson discovered the electron. Atoms were not indivisible after all, but had constituents. Was it, as Thomson believed, a pudding, with electrons embedded like raisins? No. In 1911 physicist Ernest Rutherford announced that atoms are mostly empty space, their mass concentrated in a tiny nucleus orbited by electrons.

Physics underwent one revolution after another. Einstein’s special theory of relativity (1905) begat the general theory of relativity (1915), and suddenly even such reliable concepts as absolute space and absolute time had been discarded in favor of a mind-boggling space-time fabric in which two events can never be said to be simultaneous. Matter bends space; space directs how matter moves. Light is both a particle and a wave. Energy and mass are inter- changeable. Reality is probabilistic and not deterministic: Einstein didn’t believe that God plays dice with the universe, but that became the scientific orthodoxy.

More here.

Michael Dirda in The Washington Post:

Renée Michel is the dumpy, nondescript, 54-year-old concierge of a small and exclusive Paris apartment building. Its handful of tenants include a celebrated restaurant critic, high government officials and members of the old nobility. Every day these residents pass by the loge of Madame Michel and, unless they want something from her, scarcely notice that she is alive. As it happens, Renée Michel prefers it that way. There is far more to her than meets the eye.

Paloma Josse also lives in the building. Acutely intelligent, introspective and philosophical, this 12-year-old views the world as absurd and records her observations about it in her journal. She despises her coddled existence, her older sister Colombe (who is studying at the École normale supérieure), and her well-to-do parents, especially her plant-obsessed mother. After careful consideration of what life is like, Paloma has secretly decided to kill herself on her 13th birthday.

These two characters provide the double narrative of The Elegance of the Hedgehog, and you will — this is going to sound corny — fall in love with both.

More here.