Howzit Howard

Progress report on "The Decline and Fall of the Roman Empire"

Several weeks ago I wrote in this space that I had downloaded "The Decline and Fall of the Roman Empire" and was resolved to read all of it unless it bored me terribly. I am, according to my Kindle, 16% of the way through its six volumes and continue to find it fascinating. I promised you a progress report from time to time and this is one.

The early chapters recount what we know or think we know about the late emperors. Did you know there were four emperors at one time, and six at another time? And that to some extent they actually worked together for awhile? They also formed alliances by marrying off sons and daughters to each other's families. Indeed, I begin to suspect that the author of "Games of Thrones" got many of his best ideas from the history of Ancient Rome.

Now I am into the first chapters where Gibbon describes the early history of Christianity, which occurred during and within the Roman Empire. I knew before starting on his history that Gibbon took a cynical view of organized religion, did not spare Christianity, and in turn was not spared by his own critics. The version of his magnum opus that I am reading has footnotes not only by Gibbon himself but by several subsequent editors, and up to now these later editors have intruded from time to time to say Gibbon was wrong about something or to defend Gibbon against such a charge by one of the other commentators. But these comments have multiplied as Gibbon turns his attention to religion, and it becomes clear that many people have devoted a lot of effort to debunk Gibbon in defense of the Christian church, or, having read the debunkings, to debunk the debunkers. I'm reading the footnotes as carefully as the original text, focusing a journalist's eye on factual citations as opposed to mere debating.

Last night it struck me that this was - familiar - somehow. And on reflection I realized that this open debating of what was originally asserted reminds me of Wikipedia.

Could there be an innocent reason for the Abercrombie administration exodus?

A spokesman for Neil Abercrombie said "shame on them" to those who hypothesize reasons for the departure of three top aides to the governor in a matter of days. While I've heard some hypothesizing that might fairly be described as unkind, it is, I think, unreasonable not to expect questions when six senior people leave in a month. Still, let's consider whether there may be an innocent explanation.

Here are the six people who have reportedly resigned:

1. Amy Asselbaye, chief of staff.
2. Andrew Aoki, deputy chief of staff.
3. Josh Levinson, communications director.
4. Sunshine Topping, human resources director.
5. Civil defense COO Ed Teixeira.
6. Public housing chief Denise Wise.

While it is human nature - the direct result of the way human brains are wired - to take note of clusters and ascribe meaning to them, statisticians know that clusters are a natural phenomenon. It would, to a mathematician, be odd if your office didn't have two or three people who share the same birthday. We saw this as recently as this past weekend, when there was a cluster of fatal motorcycle accidents which, on the evidence of news reports, were in no way connected.

As for this list of six people, it is really two lists of three. The last three are managers of specific agencies or functions whose resignations did not excite speculation until the more recent resignations of the first three, all of whom are senior aides who work with the governor every day.

I might mention that it hasn't been an easy time to be either the HR chief, while the state government is economizing, or public housing agency executive director, when there is an unprecented homeless problem exacerbated by mainland street people raising funds to fly here and be homeless in good weather. As for Ed Teixeira, he has always been a driven, blunt-spoken fellow, and I have no trouble imagining him (1) deciding he's done enough and it's time to retire, or (2) snapping at someone and saying he's outtahere. Either way it's too bad for us - the guy was good - but it wouldn't necessarily reflect badly on the administration that he chose to leave. And if I may indulge in some shameful speculation of my own, I suspect he left systems in place that will help us in disaster response long after his departure.

Now, about those three senior aides leaving, all citing the desire to spend more time with their families. People instinctively don't buy it for two perfectly good reasons. First, their families were there last month. Why did all three leave in the space of a few days? Second, we've all heard the same reason given in cases where it later came out that something was going on. Maybe it's also a factor that Neil Abercrombie is a verbally combative guy; that makes it easier to imagine a big argument in which the staff revolts.

An innocent explanation? If all three seniors aides were under pressure from family to find a job that doesn't tie them up all day and all night, the decision of one of them to drop out may have triggered a campaign by the other families to make the same thing happen. What do you think?

Music post: Solos the world forgot

Classical music has always had lots of concertos... 3-movement works, usually, where a pianist or violinist or cellist is the star while the orchestra plays back-up. There are hundreds that get performed regularly and thousands that don't.

Franz Liszt was one of the greatest pianists of all time, and one of the first to memorize his solo parts, but we rarely hear his own piano concertos any more. For a guy who wrote bombastic tone poems his concertos are models of concision. The finale of his first lasts four minutes.

Beethoven composed five excellent piano concertos, a famous violin concerto and a triple concerto for violin, cello and piano, but a piece that is far less known is his Romance for Violin & Orchestra, a single movement 6-minute piece that is quite beautiful.

Carl Nielsen, the Danish composer usually represented by a couple of his symphonies or his violin concerto, also wrote one for flute, which is very nice and shows off the sensitivity to winds and brass that this one-time band conductor had.

Minimalist music has been widely recorded; I'm not sure how widely played those CDs are. But it has been my pleasure to several times feature on my Saturday morning radio show the Steve Reich composition "New York Counterpoint," in which a clarinettist plays with several tapes of himself. Reich's contemporary Philip Glass has been cranking out concertos in recent years and I rather like the the finale of his Concerto Fantasy for Two Timpanists and Orchestra.

When classical music buffs think of William Walton, the English composer who spent so much of his adult life on an island off the coast of Naples, we tend to think mainly of the Crown Imperial march, which Prince Charles once said was his favorite piece of music. Well, I like it, too, but Walton composed concertos for viola and cello both of which are excellent.

Francis Poulenc composed five keyboard concertos, but one of them is for two pianos, one is for organ, and one is for harpsichord. Paul Hindemith, who sought to write sonatas and concertos for every instrument for educational purposes, did an especially nice one for clarinet. Rodrigo, so famous for two guitar concertos, actually did three - the third one was written late in life and went mostly unnoticed because orchestras kept programming the other ones - and he also wrote fine concertos for other instruments including harp.

And then there is Keith Emerson of Emerson Lake & Palmer, whose piano concerto is good enough to entrust to a better pianist - and, if I may be allowed to say so, to an orchestra prepared to take it seriously. The recording with the composer and the London Philharmonic is filled with mistakes by soloist and symphony alike. But it still packs a punch.

Every piece I've mentioned here, and others besides, will be sampled on my show tomorrow.

Howard Dicus produces and hosts "Howard's Day Off," 5-7 a.m. HST Saturdays on KHPR Honolulu, KKUA Wailuku (Maui) and KANO Hilo (Big Island). The program streams live on http://www.hawaiipublicradio.org . All of the music is from his personal CD collection. Max Cacas of Washington, D.C., founded the Howard's Day Off Listener Appreciation Society on Facebook.

Nice mortgage rates if you can get them

Hawaii lenders are quoting 30-year mortgage rates below 4%, as are lenders on the mainland, yet there hasn't been any soaring of home sales. Sales are up, but they're not exploding. And ordinarily, with home loans rates like these, they ought to be.

Without question there are some would-be homebuyers who are too frightened or cautious to proceed, because the economic rebound is still really slow and they don't feel comfortable about keeping their jobs and their houses. So they continue to stay where they are, even if they're currently renting, or, as one local real estate firm CEO likes to say, paying someone else's mortgage for them.

But a greater problem right now is that many banks, including, I am sorry to say, some local ones, are dragging their feet granting mortgages to customers whom they've known for years. The national trend is to demand 20% down - on $300,000, that's $60,000 - and bulletproof credit scores. Many people who are absolutely good for their loans have slightly damaged credit scores from the recession.

Here's the problem with that.

Two-thirds of U.S. economic activity is consumer spending, much of which can be postponed when necessary. Of that consumer spending, 35% is done by the top 5% earners, who tend to hold back when their stock portfolio are shrinking, even though they actually have plenty of money to spend. The middle class hold back when they must, in many cases because their debt grew during a period of unemployment. I'm talking about people who have new jobs, mind you; obviously the situation is more dire for those who haven't been so fortunate.

In this environment, what is the one major kind of spending that isn't driven by how one feels after watching CNBC for awhile? It's buying your first home. Couples do that as soon as they can, because in America it's part of the cycle of life. Cue the animated lions. If banks could work with young couples with secure incomes, they could do more to stimulate the economy than all the Democratic jobs programs or Republican tax cuts on the wealthy could ever do. And those couples would be customers for life, because no one ever forgets which lenders said no and which said yes.

I've heard it said that banks have their hands tied by regulators, but it seems to be that it's shareholders who are regulating banks by pressuring them to make their money from fees instead of from loans. They're not taking the long view. This is the direct result of a stock market where the big players buy stocks for short-term profitable resale instead of long-term dividends. It is an older phenomenon than the casino-like gambling that caused the 2008 meltdown, so the players are more used to it and don't discuss it as often.

Banks do have regulations to follow. Put simply, they must do some math and make an educated guess about how many of their outstanding loans could go bad - "non-performing" is the industry term, which means the borrower has stopped making payments - and then set aside a certain percentage of their cash in case it happens. I hope this next statement doesn't make a banker have a giggling fit, but it's my impression that there isn't a lot of wiggle room in doing these calculations. So banks may be taking credit positions so cautious that they harm the community, but a bank's hands are not entirely unfettered.

Still, in the real world, you can be denied a loan by one bank and then get one from another. The second bank may be in better shape and better able to take a chance on you, or it may have a board of directors less obsessed with quarterly performance at the expense of the long view, or its credit policies may be more conducive to building the community.

Hawaii prepares for Obamacare

I have four pages of notes from today's Chamber of Commerce panel on the future adoption of President Obama's plan to reform U.S. health care, and it's hard to know where to start. I think I'll start with what the local panelists said about the problem that needs fixing.

"In a few years, health care may consume one in every five dollars spent in our economy," said Beth Giesting, the Abercrombie administration official in charge of transitioning from the current system to the one that Washington is preparing to impose on the country.

It's 16% of all economic activity today, something closer to 13% in Hawaii. Hawaii has lower Medicare costs (by far) than most states, probably due to a combination of healthier residents and the broader health care coverage that results from Hawaii's wrongly-maligned "Prepaid Health Care Act."

How fast are health care expenses growing? From 1999 to 2007, U.S. wages grew 27%. Commercial health care premiums grew 114%. And, please note, those premiums don't equal total health care costs, as you know from the ever-rising co-pays that come directly from your own wallet.

The health care industry has had good reason to grow. We're living longer thanks to miracle drugs and magnificent machines that see deep inside our organs. These things cost money. We're spending more hours working, usually while sitting, raising U.S. productivity, but at cost to our health, and this, too, costs money. We're living longer, which means more years of doctor visits, and this costs money also. 

But medical costs are also growing for bad reasons. While Medicare has 3% administrative costs, health care plans nationwide average 13% administrative costs. Maybe Medicare is spending too little on administration, but I'll bet you have a very different explanation. Giesting must agree with you, becayuse she says America pays twice as much as the average industrial nation on health care without actually getting a particular good quality of care.

"Any additional amount of money spent on health care is money that an employer can't spent on salaries, expansion, or research and development," Giesting said. 

Our nation of 330 million people has 50 million insured. Three people on this panel of eight people said they grew up uninsured. One of them was Dr. Tom Tsang, senior advisor to Gov. Abercrombie on health matters. Tsang, born in Hong Kong but raised in New York by parents who had a Chinese restaurant, says his octogenarian parents have several chronic health problems and each takes more than a dozen different medicines a day.

"How many of their health problems could have been spotted, and treated, less expensively, years ago, if they only had medical insurance back then?" he asked.

When someone is uninsured, three things can happen:

1. They get sick, and go to the emergency room, the single most expensive way anything can be dealt with, and the cost, not paid by them, is shifted to everyone else.
2. They stay well, and "get away with it," but because they and their employer are not paying premiums, the cost of health care rises for everyone else.
3. They develop chronic conditions that can be treated later, but at much greater cost, then if the problems were spotted in early stages. This is what Tsang is referring to.

Until today, I thought most uninsured fell in the second column, mostly getting away with it but not paying their fair share of premiums. But Tsang says that may have changed, now that so many young people are sedentary, obese, and are getting problems we used to associate with middle age. That would put them more into the third category, the one the doctor is talking about.

Obamacare aims to get more people insured and care for, while embracing cost savings that were already being tried across the country, including here, like electronic patient records, a greater focus on preventive care, and new ways of paying doctors and hospitals that reward cures, penalize readmissions, and tie less compensation to the number of tests and procedures ordered.

The state has a group already at work to develop an online portal for health care insurance comparison shopping. Joan Danieley of Kaiser Hawaii repeatedly compared it to Travelocity. The interim board should have systems, procedures, and the Web site ready to show in one year. Jennifer Diesman of HMSA says the online exchange will be called the Hawaii Health Connector.

Attorney John Knorek says there will likely be some tweaking of the national plan before it really kicks in, probably in 2014. Knorek has spotted one potential issue: the law expressly allows the Hawaii health care law to remain in force, but at one point refers to its original version. Well, the original version had a sunset provision that the state legislature later repealed. This could be a Catch 22 if not resolved. Knorek also explained how, in some cases, a company might find it more expensive to offer coverage to employees than to not do so and simply pay the fines.

Jennifer Sabas, chief of staff to Sen. Dan Inouye, offered an intriguing comment about the politics of the health care plan. Offered an opportunity to discuss the attempts to change the plan on Capitol Hill, she remarked that there might be further changes to the plan but she felt all sides knew at this point that the plan will not be repealed.

 

 

Goodbye to Steve Jobs

Steve Jobs lived six weeks after resigning from Apple Inc., dying Wednesday at the age of 56, and there has been an outpouring of affection for him online, as well there should be for the man who brought us the Mac, the iPod, the iPad and Pixar.

Wall Street Journal computer columnist Walt Mossberg, whom I've met and whose intelligence I esteem, wrote, "He was a historical figure on the scale of a Thomas Edison or a Henry Ford."

Rupert Murdoch said, "Steve Jobs was simply the greatest CEO of his generation."

Interesting guy, Jobs. His biological father was Syrian, his mom's maiden name was Schieble, they gave him up for adoption, and he was raised by the Jobs family. He went to India as a teenager and came back with his head shaved. He dropped acid and once called LSD one of the two or three most important experiences in his life. Like Bill Gates he was a college dropout.

Bill Gates said, "Steve and I first met nearly 30 years ago, and have been colleagues, competitors and friends of the course of more than half our lives."

President Obama said, "There may be no greater tribute to Steve's success that the fact that much of the world learned of his passing on a device he invented."

 

 

 

What they're not telling you about deficit reduction

The payroll company ADP reports stronger than expected hiring by the private sector: 91,000 jobs created in September.

But the employment consulting firm Challenger Gray says employers announced 115,000 layoffs in September, two-thirds of them from just two employers: Bank of America and the U.S. Army.

This is an ongoing trend: the private sector is hiring - it's the government sector that's killing jobs - because governments are cutting back on their spending.

Until now, most of the government job cuts have been at the state and local levels, and much of it has been effectively unavoidable because so many state constitutions, like Hawaii's absolutely require that state budgets be balanced.

But now we're seeing evidence of job cuts by the federal government, the direct result of the Tea Party freshmen, who made such specific campaign pledges that they do not feel able to support any deficit reduction that sunsets the recent tax cuts for the top 1% earners.

Unfortunately, given that the tax cuts were always billed as temporary and should have sunsetted by now, the top 1% earners do not create jobs as many politicians keep saying. Only a small minority of them are small business owners. Restoring the previous tax rates for the rich, while cutting taxes on actual small businesses, would be a wiser course of action.

In the meantime, putting so many things off the table means deficit reduction will invariably mean federal job cuts as well as contract reductions that lead to private sector job cuts. The question is whether those jobs should be cut now, or a year or two from now when there has been further improvement in parts of the economy that don't depend on job cuts?

The way this is being handled, deficit reduction is itself a job killer.

 

He won't run, and maybe that's why we like Gov. Christie

New Jersey Gov. Chris Christie, who had already decided not to run for president, reconsidered after a whole lot of people begged him to, but announced today he still doesn't think it's a good idea.

And though this will disappoint the people who wanted him in the race, in a way it also validates their high opinion of him. Because Christie is staying out for the right reason.

At various points Christie has cited a number of disincentives, from the financial challenges of getting a late start to the hard work of campaigning to the sadness of being away from his family. That last factor was clearly a big deal for Christie even after his wife gave her blessing to running.

But what Christie said today was, "I could not get by, in my mind, in my heart, the idea that I was going to leave here 20 months into my term. I just couldn't get by that." Christie has been governor for less than two years, he was getting stuff done, and he didn't feel right leaving work undone.

There are all kinds of other issues in play in this presidential campaign, and the people who wanted Christie in the race, apparently including George W. Bush, Nancy Reagan, Henry Kissinger and some big Republican donors, may have thought that the race needed a popular Republican from a traditionally Democratic state who can criticize President Obama in an earnest way that doesn't alienate those who voted for him last time.

For the average person, it was more about the guy they see: intelligent but nice, thinks on his feet rather than relying on sound bites, and he's a big guy, so he's human, not a Stepford candidate. All of that was simply reinforced by his decision to finish the job he has rather than yield to pressure from those who want him to run because they don't care for the existing GOP field much.

If you came in late and you're wondering who this guy is, he's 49 and was born and raised in Newark. He and his wife Mary Pat, who was a fellow student at the University of Delaware, have two sons and two daughters.

He was U.S. Attorney for New Jersey for five years, a George W. Bush appointment. An alleged member of the Genevese crime family, prosecuted in those years, was a brother-in-law to one of Christie's aunts. Christie recused himself from the investigation. His office got convictions or guilty pleas from more than 100 public officials including two county executives, the former mayor of Newark, and the former president of the New Jersey Senate. There were questions asked about some of Christie's lucrative contract awards to people he knew but he was never charged. Christie has been sued a couple of times for things he said about other people - and he filed a similar suit himself once. Some of his prosecutorial and administrative decisions were controversial.

Since becoming governor on Jan. 19, 2010, Christie has shown a surer political compass, but continues to be controversial. He gained support when he declined to move into the gubernatorial mansion, preferring to stay in his family home. People liked that. He declared a state of fiscal emergency and announced spending cuts to a joint session of the legislature in Trenton. Lawmakers said they should have been consulted. He fired his education commissioner after the state lost $400 million in Race to the Top funds over what amounted to a clerical error. The more I read about the guy's background, the more I think he needs at least one highly successful term as governor before he could be taken seriously as a presidential candidate, or else his rivals would eat him alive by bringing up all the controversies he's being through in New Jersey politics.

 

 

 

Seoul, Sydney, Southern California save shoulder season

We're in the off-season for Hawaii tourism, but a combination of strong air connections and hotel deals has made it a stronger shoulder season than anyone had a right to expect.

This is the very first look at September arrivals, weeks before we see the monthly reports from the state or from Hospitality Advisors. Not only are there no revenue numbers here, but these numbers don't even dial out returning locals, who can make up 10% to 15% of the arrivals totals. Yet the September numbers are so good, it will be a surprise if the later reports are bad.

The first thing to notice is that September arrivals, while well below June, July and August as they always are, came in better than April or May, both in raw numbers and year-to-year percentage change:

• April - 602,726, up 18,000 (+3.1%).
• May - 634,630, up 1,000 (+0.2%).
• June - 725,517, down 13,000 (-1.8%).
• July - 781,613, down 7,000 (-1.0%).
• August - 740,093, about the same (0.0%).
• September - 620,476, up 25,000 (+4.1%).

That 4.1% figure is significant. It suggests visitor traffic increased more than air capacity did. Air capacity for the last three months of the year is up only about 1%, so it will be very nice indeed if planes fly fuller to Hawaii than they did last year.

September arrivals highlights:

• Japan arrivals, down 9% in August and more than that during each of the previous four months, were up 2.6%.
• International arrivals other than those from Japan and Canada (Canada isn't broken out until the state does the monthly report) were up 41.4% from September 2010. This is where the extra airlift from Seoul and Sydney is really helping.
• Oahu got 3,000 fewer arrivals from the mainland but Maui got 5,000 more, while Kauai and the Big Island shared 10,000 more arrivals than they got a year ago.

We can infer from airline adjustments to their West Coast capacity this month through the end of the year that September business was stronger through LAX, but perhaps a little softer in the San Francisco Bay Area, where capacity expansion from Oakland and San Jose doesn't make up for all of the capacity shrinkage from SFO.

As always, Hawaii attracts mostly affluent visitors who are not too badly affected by the slow economic recovery. Our visitors are more likely to be thrown off their game by concerns about the effects of Wall Street panics on their investment portfolios. But they're also more likely to see an opportunity to stay in five-star hotels for lower rates than during better economic times.

 

Denmark has a fat tax

For decades, governments have heavily taxed cigarettes, on the theory that since cigarettes kill so many people it's a good thing to make them cost more. In recent years, talk about a fat tax, which at first was mostly facetious, has gradually become serious.

Several European governments looking for more revenue have raised taxes on sugar, and now Denmark has gone one step further by enacting - not just discussing, enacting - a tax on butter and oil in foods: 16 kroner, or about $2.90, per kilogram of saturated fat in a food product.

That works out to about 15 cents on a burger and 40 cents on a stick of butter.

You will hear officials discuss, as I mentioned, the idea of taxing something that's bad for you until it costs so much that you're motivated to consume less; others may argue that the resulting revenue can defray the cost of people making themselves sick. This is baloney (which is also bad for you). So what is the real thinking?

The real thinking is this: We all hate to pay taxes, and we hate even more to pay new taxes, but when the tax is on something we're supposed to cut back on, and we can avoid the tax by doing so, we're less likely to complain about the tax because in a sense it feels like something we brought on ourselves. So if Washington needs to raise taxes maybe they can tax something new that we really ought to be consuming less of.

Maybe a tax on Danish pastries.