Sunday, June 18, 2017

FOOD BIZ | Le Canard Enchaîné, Kingston, N.Y.

A Vegetarian Napoleon—Eggplant sandwiching red peppers, in sweet sauces.
Photos by JT Marlin.
June 18, 2017—We had a fine dinner at Le Canard Enchaîné in Kingston, N.Y., a site of great historic importance as an early capital of what became New York State.

We were sent to the Canard by the manager of the Hurley Stone House, a B&B a few miles south of Kingston.

Originally known as Esopus, after the tribe of Indians that lived in the area, Kingston was a significant early settlement of the Dutch in New Amsterdam. It was there in September 1777 that John Jay and other rebels declared the independence of the New York colony from the British Crown. When, the following month, Kingston was burned to the ground, the colony's capital was moved for a while to Hurley.

A 600-page history available online, dating back to 1888, records the distinguished role of Kingston back to 1609 when Henry Hudson sailed up, on behalf of the Dutch, the river now called after him the Hudson River, in his ship the Haef Maen (Half Moon). In 1620 the Dutch formally claimed the area within the 40th and 45th parallels, between what was then the Commonwealth of Virginia and New France.

But... back to the dinner at Le Canard Enchaîné. Karen had as a starter the Vegetarian Napoleon, which was red pepper sandwiched between layers of eggplant, with an endive leaf on top to give the dish some panache, and sweet sauce all round.

Warren had the pea soup, guaranteed no cream in it. Alice had the duck and I had the shrimp Indochine.

The Canard (Long Island Duck).
We were all impressed with the quality of our food and—doubtless encouraged by our enthusiasm—the chef-propriétaire came out to recommend the desserts. He told us that under the restaurant is hidden a 4,000-square-foot wholesale bakery, in which pastries are made daily for the huge New York City market, going to fancy places like the Carlyle Hotel.

It reminded me of my 1963 and 1969 visits to French West Africa, where Air France delivered fresh croissants every morning to Abidjan in the Côte d'Ivoire and Dakar in Senegal. It's hard to get croissants right and sometimes you just have to go a long way to find the pastry chef that really knows from flakiness.

We tried four pastries — the tarte tatin, crème brûlée, a chocolate mousse cake, and a tarte au citron. Five-out-of-five stars all round.

My FOOD BIZ posts focus on the inexorable economics of the culinary industry. If they were chapters of a book,  its title could be Your Food is a Harsh Mistress.

I had a conversation about restaurant economics with the restaurant's chef-propriétaire, Jean-Jacques.

He calls his restaurant a bistro to give himself a little freedom from nonfood distractions. He does not want to be trapped by the fussy elegance that makes the restaurant business so exhausting for its workers. Jean-J
acques says:
"The people who decide on the stars for Michelin can keep you from getting a star for many reasons that have nothing at all to do with the food. Par exemple, the flowers on the table may not be fresh enough. A detail of service may not be comme il faut. Many young chefs now want to keep their attention on the food. Other things are distractions that push up the cost of the meal, that keep restaurant staff from having enough time with their families. Today, chefs want to take off two days a week, like everyone else."
Indo-Chinese Shrimp. Shrimp served on barbecue sticks with a noodle
planted on top like a flag, with a generous portion of ginger below.
I know what he is talking about. I think back especially to Jacques Dejoux's introducing us to the Maison Pic in Valence. That's a restaurant where the chef-propriétaire Anne-Sophie Pic is the third generation of outstanding chefs. She maintains all the traditions of service, and Michelin shows its respect with continuing the family's three-out-of-three stars. Service in her restaurant is conducted like a Cathedral High Mass. Hard to do.

By contrast, the closest thing to an altar in Le Canard Enchaîné is a corner where Jean-Jacques showed us several deeply venerated Edith Piaf posters and a sketch of the great chanteuse.

What Piaf sang so well and defiantly about the vicissitudes of her life could sum up what the four of us thought about our food here, more than 100 miles up the Hudson River from New York City, a place we knew had a great history but place that we did not, in our blithe ignorance, fully appreciate was a site of haute cuisine:
"Non, je ne regrette rien." (With lyrics here.)

Thursday, June 8, 2017

JOBS | Suffolk County, NY

How is Trump doing?
In 2010, Randy Altschuler attacked the incumbent congressman from Suffolk County, NY, Rep. Tim Bishop, for not doing enough for the Long Island economy.

He said that 30,000 jobs had left Long Island during Bishop's incumbency. I pointed out in an article on Huffington Post that the number was a lie. The correct figure was a gain of 36,000 jobs. Altschuler stopped using the number, but not until after he sent a glossy card to every voter with the lie plastered all over it.

Lee Zeldin was next to campaign against Bishop, in 2008. He lost badly in a Republican-leaning district. But in 2014 he adopted a straight Tea Party program, one of the first campaigners to do this. Here were his four main programs:
  1. Oppose raising the Federal minimum wage.
  2. Curtail Medicaid benefits. 
  3. Simplify the Federal tax code and cut taxes on the rich. 
  4. Cut Federal spending.
Zeldin was one of the first of the Tea Party electeds, in 2014. The GOP gained a majority in both the House and Senate in the 114th Congress, 2015-16. So how have Zeldin and the GOP Congress been helping Suffolk County? Let's ignore the first year, during which Zeldin was finding out where the bathrooms are in the maze of Capitol offices. Few Members of Congress make a dent in Washington in their first year (one reason for respecting seniority). Let's look at the second year of his term of office. How has the Suffolk County economy performed in 2016?

County-level numbers for jobs and wages are released quarterly and the numbers for the fourth quarter of 2016 were just released by the BLS on Wednesday. Here is the story for Suffolk:

Jobs. Suffolk's nonfarm payroll jobs rose to 661,400 in the fourth quarter of 2016, an increase of 900 jobs.

That's fewer than 1,000 jobs, compared with Bishop's presiding over growth of   36,000 jobs when he was attacked by the GOP for not doing enough for the economy.

The tiny growth rate during 2016 ranks 205th of 345 large counties for which the BLS computes this information, about 60 percent down the list. Within New York State, the growth rate is in the bottom half of the 18 large counties on the BLS list.

Wages. But maybe, has the quality of the jobs improved under Zeldin? What has happened to weekly wages? The news is much worse. Wages in Suffolk County declined by 3.5 percent, placing the county 289th out of 345 large U.S. counties, i.e., in the bottom fifth. Only two counties out of the 18 in New York State did worse.

This is not a good record. Since November 2016 the GOP has not only Congress but the White House, and a president who promised more jobs. We are waiting and watching.


Monday, June 5, 2017

FDR | June 5, 1933 — FDR & Woodin Nullify Gold Contracts

Instant Relic, Gold-Backed Currency.
June 5, 2017 — On this day in 1933, the United States took the third of several steps in going off the gold standard.

Under the gold standard, contracts guaranteed payment in a certain quality of gold.  Certain greenbacks were designated as "gold certificates" that could be exchanged for gold (others were call "silver certificates," allowing an expansion of the reserves backing currency to include silver).

Going off the gold standard allowed for the expansion of the money supply, which had been previously restricted by the requirement that currency be backed by gold reserves.  Christina Romer at the NBER concluded in 1991 that the main reason that the United States eventually recovered from the Depression is that the money supply was expanded by gold inflows in the 1930s and this stimulated investment.

Origin of the Problems.  In some ways policies of both the Federal Reserve and the Treasury were at the heart of the cause of the Great Depression. For one thing, the Treasury Secretary was also the ex officio Chairman of the Federal Reserve Board in Washington. The person who best understood how the Fed's actions were affecting the financial markets was Benjamin Strong, President of the Federal Reserve Bank of New York. The Fed began raising its the target short-term interest rate, the Federal Funds rate, in the spring of 1928 because it felt the stock market had become frothy and inflation was taking its toll. It kept increasing interest rates, even though the economy turned down in August 1929. The Fed’s action helped generate the stock market crash in October 1929.

After the Crash of 1929, speculators began trading their dollars for gold, creating a serious drain on reserves in late 1931. Dollar-holders lost confidence in the dollar, which had two consequences

  • Banks ran out of gold to exchange for gold certificates and their cash reserves dwindled. Then they ran out of cash completely as depositors lined up to withdraw all their deposits.
  • The Treasury worried about their loss of gold reserves as overseas claims for gold to settle accounts.
To preserve the value of the dollar and stop the outflow of gold, the Fed raised interest rates again. But that further restricted the availability of money for businesses. More bank closures followed and the Fed still did not try to calm the markets by increasing liquidity.

Investors withdrew their deposits from banks and banks failed, creating panic. (The scene is well recreated at the small town level in It's a Wonderful Life (Frank Capra, 1946). The Fed did not respond to the panic by lending money to the banks. More people withdrew their deposits and took their cash home. The money supply fell 30 percent. When FDR was inaugurated many states had declared a bank holiday and their banks were closed until further notice.

1.  No Bank Payouts of Gold. Part of the problem was that the United States had been on a gold standard since 1879, except for an embargo on gold exports during World War I. When FDR was inaugurated on March 4, 1933, he and his Treasury Secretary, Will Woodin declared a national bank holiday. Woodin personally supervised round-the-clock printing of $2 billion in greenbacks by the Bureau of Engraving and Printing, filming of the presses at work late at night and the dispatch of vans filled with currency for banks, and distribution of the film clips to cinemas around the country to be screened along with the latest movie offerings. Advisers had previously suggested issuing "government scrip" and Woodin scratched his head, noting the ban on banks' redeeming gold certificates in gold coin, and advised FDR: "What are greenbacks if not government scrip?"

From the first day of his presidency, FDR embargoed payment in gold.
At the same time as the bank panic spread within the United States, reaching its apex just as FDR was sworn in, foreign creditors were cashing in their claims on the U.S. Treasury and demanding gold, as was their right under the gold standard regime. Gold was flowing out of the United States at an alarming rate. So along with the bank holiday, FDR and Woodin prohibited banks from paying out gold or exporting it. This was a suspension of gold payments similar to what occurred in the Great War (World War I).

2.  Ban on Private Holding of Gold. On April 5, 1933, Roosevelt ordered all gold coins and gold certificates in denominations of more than $100 turned in for other money. Everyone had to turn in all gold coin, gold bullion and gold certificates they owned to the Federal Reserve by May 1 for the set price of $20.67 per ounce. By May 10, the government had taken in $300 million of gold coin and $470 million of gold certificates.

Will Woodin, a world-class coin collector, co-author of the definitive book on American pattern coins (i.e., unique American coins that were samples of a new design), obtained a valuable specific exemption from the new law for coin collectors. They were allowed to keep their collectible coins.

3. Nullification of Contracts Defined in Gold. Different from WWI, on June 5, 1933, Congress made the exit from the gold standard permanent, and in the absence of a war. It enacted a joint Senate-House resolution nullifying the right of creditors to demand payment in gold. This applied to both public and private contracts.

The impact of this was possibly clear to Wall Street experts right away, and would become clear the following year, when the government price of gold was increased to $35 per ounce. This effectively increasing the gold on the Federal Reserve’s balance sheets by 69 percent, and reduced the value of all contracts defined in gold. This increase in assets allowed the Federal Reserve to further expand the money supply, but it reduced the wealth of contract-holders by 69 percent.

The theory behind this action was not yet developed, as it would be three years before John Maynard Keynes would publish his General Theory. But FDR either learned from the Bank of England, which has already gone off the gold standard in 1931 in response to the Crash of 1929, or he understood instinctively that greenbacks had more credibility if the issuer had a lot of gold reserves, and this allowed the Treasury to print more greenbacks and the Federal Reserve to put them into circulation, expanding the most basic definition of the money supply.

Treasury Secretary Will Woodin, being a life-long Presbyterian and Republican, disagreed with FDR on this move. He felt bound to honor contractual commitments to pay back in gold. He had campaigned on the hard-money platform in 1998 when he ran for Congress in his home district around Berwick, Pennsylvania. However, his loyalty to FDR made him swallow his doubts and support FDR in his action.

But it was FDR-Keynes theory, already implemented by the Bank of England, that expanding the money supply and making credit easier would spur investment and economic growth. The Great Depression created an unemployment rate of 25 percent, and Britain's going off the gold standard two years before justified an equivalent action in the United States, an action that Herbert Hoover could not take because of his own commitment to hard money.

Aftermath. The American economy turned around as soon as FDR came into power. The Depression formally ended in the quarter he was inaugurated, although it would be years before the economy recovered to the pace it was running at in the steaming 1920s.

The U.S. Treasury held the $35 per ounce price until August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus completely abandoning the gold standard. Since there was no longer any need to back the dollar currency with gold, President Gerald Ford in 1974 signed legislation that permitted Americans again to own gold bullion as an investment independent of jewelry, dental or industrial uses.

Related Posts: Are Fed Models Out of Sync? . Mnuchin Testimony, May 18, 2017 . Glass-Steagall . FDR's First Fireside Chat

Sunday, June 4, 2017

FOMC | Questions About Fed Models

Gov. Lael Brainard (top center) addressing the NYABE,
Cornell Club, NYC, May 30, 2017.
On Tuesday, Federal Reserve Board Governor Lael Brainard spoke to the New York Association for Business Economics. 

At the heart of the Federal Reserve System is the Federal Open Market Committee (FOMC), which since the days of Ralph Young in the 1950s and 1960s has, as its primary task, engaged in carrying out open market operations in Treasury bills to influence interest rates.

The idea behind FOMC intervention in the marketplace is that the Fed can fine-tune the economy, by buying Treasury bills to inject cash and lower short-term interest rates, or by selling Treasurys to remove cash and raise interest rates. 

Lower interest rates create "easy money" and that is supposed to encourage investment. However, the Fed has been at the "zero bound" in its interest-rate targeting since its statement of December 16, 2008. I wrote a piece for Huffington Post  on January 17, 2009, that quoted former Fed Vice-Chair Laurence Meyer. Speaking to the New York Association for Business Economics, Meyer said that the FOMC could go on vacation "for the next two years" until it lifted off from its zero-bound policy.

It's been more than eight years now and the Fed's interest-rate target is still below 1 percent. A quarter-point increase is expected at the next FOMC meeting in mid-June.

The worry about raising interest rates is that it will discourage investment, and also that in the absence of inflation it is not necessary. 
A full table of reporters in the back.
Bloomberg, Dow-Jones...

It is a time when basic questions are being asked about the implicit model on which FOMC model is based. Is it possible that the model-builders have lost touch with the data on which the models are based? Is inflation understated, for example?

After the lunch I asked Gov. Brainard what she thought about this. Her answers were helpful:
Marlin: "When I was working at the Federal Reserve Board more than fifty years ago..."
Brainard: "Fifty!?"
Marlin: "Fifty, under Chairman William McChesney Martin. The prevailing faith then was that higher [but moderate] inflation would encourage demand, and lower interest rates would stimulate investment. Is this still the faith?"
Brainard: "I think we are less confident now than we were then."
Marlin: "Is that because of a new theory, or less faith in the data?"
Brainard: "It's not because of change in the theory. It's more a question of alternative views about the econometrics, rather than the data."
The data and econometric issues are related, because models use high-level aggregate averages. For example, "inflation targeting" at 2 percent per annum is based on a few overall-average price levels. The expansion of the money supply during and after 1933 is given full credit by Christina Romer for the stimulus to the economy that ended the Great Depression.

But what if average-price components move in different directions and then one of them changes direction? As the economy changes, the time horizons over which averages are computed may also need to change. Here are some charts from the "Fed Dashboard" of how prices have been diverging.

Similarly, both the slow response of the economy to massive new debt creation since 2008 and the zero-bound interest target from January 2009 raise questions about the Keynesian narrative in changed financial markets. The markets responded as predicted when short-term interest rates were hiked, but lowering rates to the zero bound did not spur investment as expected.

If the theory on which FOMC policies are based hasn't changed, and interest-rate and inflation-targeting policies based on the theory have not achieved their goals, doesn't that imply problems with the models or the data?

Related Posts: FDR Nullifies Gold Contracts . Glass-Steagall . FDR's First Fireside Chat

Wednesday, May 31, 2017

BOOK BIZ | Nonprofit Indie Publishing

Jorge Rivera at BookExpo 2017.
Photo by JT Marlin.
On Thursday, May 31, I registered myself at BookExpo in New York City's Javits Center and went to the press room to see if there were any handouts. The pickings were slim.

However, I arrived at the same time as Jorge Rivera, who was with an associate Elizabeth Pierce promoting three of his books and three other books by someone else, maybe her under a nom de plume. His six-book backlist is promoted as Hamilton Rand Publishers, which he says is a nonprofit organization that is a successor to a company formed in London in 1907. It is incorporated as a 501-c-3 company and is based in the Los Angeles area.

His six-book backlist focuses on adult nonfiction. Rivera's own three books are about weaknesses in the international financial system. The Hamilton Rand website establishes the concept of the nonprofit as pursuing the goal of reducing financial illiteracy by bringing in strategic partners (an impressive group of logos is provided on the website) to make possible publication of new books in this arena.

Rivera worked for several decades at the World Bank and IMF in Washington before he launched himself on a publishing arc.

One question I started asking him was: What is the minimum size that a publisher needs to be to justify a booth or table at an event like BookExpo, especially when two people are traveling from Los Angeles?

A quick answer is that Rivera is a startup and is aware that his backlist is not big enough or popular enough (six Harry Potter books would be enough, of course!) to justify his paying for a publisher booth. So instead he has paid for half an hour at the BookExpo to sign books, at Table 16, on the second day, June 2, from 1 to 1:30 pm. This is less costly than paying for a booth. The cheapest show-long space  at BookExpo is $1,900 in the Indie Book area; that pays for a table with enough space behind it for two or maybe even three people. A proper booth is regularly $2,500 and a good-sized booth that I have seen shared between two book-related companies is $3,000. In other words, you get more for your money once you have pierced the $1,900 threshold.

Rivera's first two books identify him as having a Ph.D. degree, I think he said in economics. He did not have a copy of his latest book, Money & Greed, to give me, so I am summarizing what he told me. His book is based on a true story. A young woman had three summers interning at the U.S. Treasury to investigate fraud. She was then hired by the FBI White Collar Crime unit to look at the handling of long-term deposits from disabled customers, a vulnerable group.

She went to work for the bank under investigation, which was in Louisville, Kentucky,  and she became executive assistant to the President. She got an inside look at how the bank worked, and it deceived its depositors. Money was taken out and used to purchase collectibles for the collecting-addicted bank officers, the president, chief financial officer and the corporate secretary.

In the final chapter of the story, the art collection and real estate assembled by the banksters had to be sold in a hurry to make restitution to the depositors. The book's author confesses to having some empathy for the guilty bankers because they were apparently charming and had real taste in art.

Rivera's new book sells for $25 in hard cover and $20 in paperback. Usually I see more of a spread in the price between these two formats, like $30 hard cover and $20 paper, or $25 hard cover and $15 paper. I will be interested in seeing how the nonprofit indie publishing model works in this case — it is of course the model for academic publishers.

Related Posts: Tracking Down Bank Fraud . BOOK BIZ | Outsourcing Design . BOOK BIZ | Critical Mass . BOOK BIZ | Goodman's Plan for Indie Stores

Saturday, May 20, 2017

TREASURY | Mnuchin Testimony, Senate Banking Committee

President Trump and Treasury Secretary
Steven Mnuchin
The Senate Banking Committee heard Treasury Secretary Mnuchin on Thursday, May 18. The following report on Mnuchin's testimony is from Dana Chasin, reposted by permission:

The Senate Banking Committee hearing with Treasury Secretary Mnuchin exhibited a coordinated effort among the Democrats on the panel to press the administration on all the priority issues for the minority. One by one, Democratic members challenged Sec. Mnuchin about promises made by the Trump administration for supporting the middle class:

The CHOICE Act —seems to renege on promises to the middle class and actually sacrifices the middle class for tax cuts.

The "Mnuchin Rule" — while he was Secretary-Designate, Mnuchin told reporters immediately after his nomination that the Trump tax plan would not net the wealthy a tax cut. Mnuchin continues to stand by it.

Passthroughs — Sen. Warren appears to have exacted a promise from Sec. Mnuchin that the S-corp passthrough will only be available to small and medium-sized business owners.

Foreclosures — Sen. Cortez Masto grilled Sec. Mnuchin about why his leadership team has no one advocating for borrowers or homeowners.

Export-Import Bank — the Secretary heard appeals for full Bank reauthorization from both sides of the aisle.

Orderly Liquidation Authority — Sen. Warner advocated preserving the authority extended to the FDIC to resolve non-banks.

Here are more detailed highlights:

Warren's Passthrough Reform Bid
Sen. Shelby called on Sec. Mnuchin on the S-corp pass-throughs and how Mnuchin had promised to not give a tax cut to the wealthy. Mnuchin responded that "we are committed to make sure that rich people do not use pass-throughs as a loophole to pay lower rates. … So we do want small and medium sized businesses to have the benefit of lower taxes."
How about big law, for example? Mnuchin: "... we will make sure that not every single accountant, lawyer, and doctor who should be paying higher personal rates sets up an LLC or a pass-through to get around the system.”
This point was brought up again later by Sen. Warren, in the most productive exchange in the hearing. Mnuchin enumerated the key elements of the administration's new passthrough policy: "specifically, people who are making lots of money will not be able to use pass throughs. There will be criteria as to whether you're eligible for the business tax if you're pass through. It will not be available to everyone.”

OLA: Backstop against Bailouts
Sen. Reed said giving up the Orderly Liquidation Authority would deprive the system of its main defense against bailouts and sought assurance that taxpayers wouldn't bear losses under OLA.
In a critical exchange, Sen. Warner asked Sec. Mnuchin,
“If we have a large, trillion-dollar-plus SIFI institution headquartered in the United States and operating across the world with multiple subsidiaries, if it runs into a credit crunch and the rest of the financial industry stops doing business with this SIFI and it therefore fails, in order to have an orderly failure and wind in Congress this week-down, would you agree that shareholders need to be wiped out in that SIFI institution?”
Mnuchin concurred that something drastic would be necessary in such a situation. Sen Warner reiterated that the OLA is necessary as a backstop for this sort of systemic risk, and Mnuchin demurred again.

EXIM Bank: Two Takes
EXIM came up several times, with Sen. Heitkamp arguing for protection of it and Senator Shelby supportive but asking for reform. Mnuchin made no promises, but it does seem to be understood that the Bank is not on the chopping block anymore -- now that the president knows it “makes us a lot of money.”

Events Next Week
The following events are scheduled:
Tuesday
House Ways and Means Committee: Hearing entitled, "Increasing U.S Competitiveness and Preventing American Jobs from Moving Overseas," focused on the border-adjustment tax, 10 a.m.
The American Enterprise Institute event on the CHOICE Act with House Financial Services Committee Chairman Jeb Hensarling, 11 a.m. The bill is Hensarling's overhaul of Dodd-Frank.
Wednesday
House Budget Committee: Hearing on the White House fiscal 2018 budget with OMB Director Mick Mulvaney, 9:45 a.m.
House Ways and Means Committee: Hearing on the White House fiscal 2018 budget, with Treasury Secretary Steven Mnuchin, 10 a.m.
Thursday
Senate Budget Committee: Hearing on the White House fiscal 2018 budget proposal with OMB Director Mulvaney, 9:45 a.m.
Senate Finance Committee: Hearing entitled "Fiscal Year 2018 Budget Proposals for the Department of Treasury and Tax Reform", witness is Treasury Secretary Steven Mnuchin, 10 a.m.

Other Takes on the Testimony: Sen. Warren on Reinstating Glass-Steagall . Video of Exchange with Sen. Warren . Video of testimony (CNBC)

Monday, May 15, 2017

THEATER BIZ | Best Contest Practices

Some contests and festivals can be exploitative. They may require large submission fees and then grab rights from the winning writers or photographers based on language in the submission contract.

In some entry guidelines (for instance, in the Emerging Writer Awards), submitting an entry grants publishing rights. 

Writers who don't read the fine print carefully enough may find themselves trapped by such provisions. See: http://accrispin.blogspot.com/2015/06/awards-profiteers-how-writers-can.html

To reduce such exploitation, the Dramatists Guild has issued a statement on "Best Practices for Festivals and Contests". A good idea. 

Now it is up to contest organizers and playwrights today attention to these guidelines. Here is the one-page statement with the language of the release preceding it.
http://www.dramatistsguild.com/news2/

Sunday, May 7, 2017

ART BIZ | Ashawagh Hall 2018 Summer Space... Gone!

Ashawagh Hall is an art gallery and village center. Photo by JT Marlin 2016.
Ashawagh Hall is the center of Springs. It used to be owned by the Miller/Collins family, which lives across the road. They donated the original building to be used as a schoolhouse, with the understanding (they told me) that if the use of the building changed, the property could not be sold; instead, it would revert to the family.

The Springs School moved to larger quarters (!) and Ashawagh Hall now doubles as an art gallery and a village hall. I have frequently reviewed community events there, such as the award to the late Herb Field last year. 

I have also reviewed art shows at Ashawagh Hall, with an economic perspective, for example:

Search Results

Eternal Springs Hope (2016).

Hot Dots and Collage Credit (2016).

Meckseper and Troemel (2014). 

Ten Artworks Sold (2014).


Over the years I have figured out the system for allocating space in the gallery, which is that members of the Springs Improvement Society on May 15 call in to reserve space at the gallery for the following year at 8:00 a.m., and everyone else calls in at 10 a.m. The instructions for 2017 are still shown on the Ashawagh Hall website, although the space that would be allocated on May 15, 2017 is for 2018.

That system gives a little edge to long-term residents, members of the Society, and people who watch the calendar and the clock. A little quirky, but it seemed fair enough.

As I checked out this year's timing, I find that this year it has changed. Artists calling on May 15 will discover that all the 2018 summertime space was already allocated. It was done during the winter. A special discount was reportedly emailed (to all members? to a list of artists?) in February.

Sorry to be the bearer of this bad news if you were planning on something in 2018. If you think the change in the system is capricious, comment below or send me an email. 

Monday, May 1, 2017

ART BIZ | Fantastic Exhibit at One Art Space (Updated May 15, 2017)

Multiple Points of View, One Inspiration — Ernst Fuchs
The "Visionary Alchemy" Exhibit opened with buzz Friday evening, April 29, at One Art Space at 23 Warren Street, New York City. The exhibition remained open until May 13. 

This gallery is a fine white cube — actually more of a white rectangular brick — half a block west of Broadway and City Hall Park. Phone 646-559-0535.


In keeping with the theme of this blog, the Art Biz, I can report that the highest price for a painting in this Exhibition is $25,000 (#2 by Isaac Abrams) and the lowest is $280 (#27 by Marnie Pitts), a range of nearly 100 to 1.


Artists Exhibiting at One Art Space, 23 Warren St., NYC

The 51 listed paintings and 48 listed artists came from all over the world — Austria, Belgium, Britain, Canada, Dom. Republic, Finland, France, Germany, Peru. U.S. painters came from the New York area and Ohio.

They are all members of the Society for Art of Imagination, which was founded by followers of Austrian artist Ernst Fuchs.

Brigid Marlin in front of a painting
of hers, #21B.

Fuchs, which is German for Fox, is pronounced like "Looks" with an "F" (or listen to this).

Fuchs viewed himself as the reincarnation of the great German Renaissance artist Albrecht Dürer (1471-1528).

The exhibition is open Tuesday through Saturday, 11 am to 5 pm, until Saturday, May 13.

The Society for Art of Imagination is the successor group to Ernst Fuchs' own society, the Vienna School of Fantastic Realism, which he co-founded in the 1940s.


If I may simplify, Fuchs and his colleagues in Vienna sought to explore spiritual fantasy using the hard-won schools of early Renaissance painters and engravers.
Miguel Tio, Treasurer of the
American Society and painter
(see "Heartbeats", #43, the
purple lady behind him).


The Vienna School expired with the death of Prof. Fuchs himself in November 1915

He became President of the Society of Art of Imagination before he died. 

He called Brigid Marlin, who founded the Society, "my best student".

One Art Space is curated by Diego Ponce, who can be reached by email at curator@oneartspace.com. A catalog of the art show is available via email.

The exhibition was co-curated by France Garrido, Olga Spiegel and Miguel Tio, who are leaders in the American Society for Art of Imagination.


One of the visitors to the exhibition came up from Washington, D.C. She prepared the following video clip of her visit: https://quik.gopro.com/v/qYb7EXCmBR/.

Wednesday, April 19, 2017

R.I.P. | Sage of Springs, Herb Field (Updated Apr 27, 2017)

Apr 19, 2017 – Herbert E[dwards] (Herb) Field, the Sage of Springs, passed to his eternal reward yesterday at 92 years old, according to his pastor, Rev. Nancy Howarth.

A memorial service for Herb Field will be held at 10 a.m. on Saturday, May 20 at the Springs Community Presbyterian Church, at the intersection of Old Stone Highway and Springs Fireplace Road.

Herb Field's father and two uncles died tending their traps during the 1938 Hurricane when Herb was just 13. (His obituary, based on information from his son Thomas F. Field, was published in the East Hampton Star on April 27.)

Last year, he received a well-earned temporal award at an end-of-summer meeting of the Springs Community Advisory Council in Ashawagh Hall.

East Hampton Town Councilman Fred Overton presented him with a Proclamation testifying to his contributions to the Springs community. Overton's presentation was on behalf of East Hampton Town by its Supervisor, Larry Cantwell.

At the presentation, the crowd attending the meeting gave Herb a standing ovation for his contributions to his country and his community.
The Proclamation.

The citation, signed August 22, 2016 by Supervisor Cantwell, proclaimed that Herbert Edwards (Herb) Field was born at Franklin Farm on August 3, 1924 to Herbert Stone Field and his wife Abigail Rebecca, née Edwards.

Herb was the eldest of four sons. After the death of his father and uncles, he worked for Ferris Talmage to help support his mother and brothers. Talmage remained a lifetime mentor.

Herb enlisted at 17 in the U.S. Navy in April 1943. He served as a motor mechanic on board destroyer escorts.  He was sent on tours in the Pacific, Europe and the Americas. He was honorably discharged on December 18, 1945.

After his military service he managed Sylvester Prime’s farm on Shelter Island and then in 1949 moved to Morrisville, N.Y., where he purchased and managed two dairy farms covering 316 acres.

After 15 years upstate, he purchased the Baker and Baker dairy farm in Amagansett and lived there until his death.

Herb faithfully attended the Springs Community Presbyterian Church starting in the 1970s and sat consistently in the second row behind the organ donated by Robert Mulford.

For what must have been four decades he arrived an hour before the service every Sunday morning and started the coffee pot brewing, until one day not so long ago he announced he couldn't keep doing this any more.

When I first came to Springs in 1981 as a seasonal visitor, I started singing in the Springs Church choir and was invited, faute de mieux, to join "The Men of Springs," a church-related activity. My wife Alice Tepper Marlin was dubious about this. It sounded macho. Who knew what sinister plans these local deer-hunters, who probably looked askance at seasonal families "from away", might not be up to?

Herb Field with Tina Piette and
me, next to Ashawagh Hall. Photo
by Dr Carter Dodge.
Then we found out that the principal public activity of the Men of Springs was to cook and serve a community chicken dinner with no apparent female support. Her attitude to the group mellowed.

So I was a seasonal participant in the program, but over time the number of men who composed the Men of Springs dwindled, lost to illness or death or retirement to a place where they could get assisted living — or unassisted living — at an affordable price.

In time, the remaining men could not keep up the tradition of the annual chicken dinner. The event was continued, like so much else, through the devotion of the hard-working women of the church.

Herb was, I think, the last of the Men of Springs who were there when I arrived in Springs 36 years ago.

Herb earned the title of Sage of Springs because he knew more about the history of Springs than anyone else alive. He commented as an aside that he remembered when Supervisor Cantwell was "in short pants."

Over the years Herb told me more truly funny stories than I can count. He had a keen understanding of farming, canning, clamming, milling and human nature and he communicated it with his dry Bonacker humor, of which he was acutely aware and proud.

For example, during the period of my Men of Springs membership, I was in the kitchen, and everyone there was highly aware that I was a city guy out of my element in the Springs culture, which for centuries was built on faith, farm, fish and family. I came in for a lot of teasing as the country bumpkins enjoyed showing the city slicker how little he knew about what was important.

At one point they explained to me that how nutritious the food was, and that the delicious ginger gravy they were serving with the chicken had no sugar or flour in it.

I was amazed. How could they do that? They swore on the bible they added no sugar or flour. But I saw a glint in Herb's eye, and I demanded that he tell me, based on my rights as a fully vested seasonal member of the Men of Springs,  what the ingredients were.

Herb with Dr Dodge.
Photo by JT Marlin.
He said: "Well now, we have the juice left over from the chicken and we filter out any skin and the heavy fat. We cook it all in a pan and stir in some green onions and celery, and some garlic, about 4 minutes..."

"And...?"

"We add some pepper, thyme and sage..."

"And... what else?" I demanded, getting a little impatient.

I learned over time to look for the signal that Herb was about to deliver the punch line to his story, which he loved doing. He would become super-serious.

"Then, well now, you know, for every quart of gravy," he said, "we mix in five ginger-snap cookies."

After God created Herb, He threw away the mold.

Saturday, April 15, 2017

VOTE | Choosing Where

The following is reposted with permission from Resist and Replace, a blog started by David Posnett.

A suggestion from Pamela Keen:

It is completely legal in NY State to choose where you wish to vote as long as you don’t vote twice (in different locations), which is voter fraud.

Second homeowners and those who rent for the summer months may choose to vote in their summer residence, such as CD-1.  They will need evidence of having lived in the district, such as a copy of utility bills. Here are four useful online resources:

3. How to register on-line.
4. How to download the registration form online and then send in by mail— particularly useful if you want to help someone fill out the form.

Get some forms and have them handy.  Bring them to events and share them with your friends. For example, hand out registration forms at your July 4 barbecue! It is a good idea to start now.

Wednesday, April 12, 2017

DODD-FRANK | House Bill Takes Aim, by Dana Chasin

Dodd-Frank applied CPR to the 1933 Glass-
Steagall Act, which gave banks deposit insurance
in return for bank and securities regulation.
Hensarling wants a GOP-branded Act...
The following is slightly abbreviated from a summary by Dana Chasin of the new Hensarling bill:

Jeb Hensarling (R, TX-5), Chair of the House Financial Services Committee, has announced a beefed-up Financial Choice Act to eliminate some key Dodd-Frank provisions.

It would reduce Sarbanes-Oxley and JOBS Act regulations.

The bill, Hensarling 2.0 (H2O), proposes major structural changes to the Consumer Financial Protection Board (CFPB) and the SEC. Hensarling has said he would get H2O through his Committee to the House floor by the end of April.

The Major Changes

Major Dodd-Frank-related provisions in Hensarling's H2O bill include:
• weakening of provisions protecting against systemic risk, increasing the threat of “too big to fail” financial institutions, holding up taxpayers for another bailout
• rolling back safeguards protecting ordinary investors and consumers on financial transactions involving everything from derivatives trading to retail banking
• repealing restrictions on the kind of subprime mortgages that caused the 2008 financial crisis.
Jeb Hensaring (R, TX-5).
Chair, Financial Services
Committee.
[Hensarling says on his website that H2O will do what Dodd-Frank failed to accomplish after the 2008 financial crisis. “It would end bank bailouts,” he says. “It would give regulatory relief for community financial institutions, and we would also have the strongest penalties for Wall Street wrongdoers that have ever been on the books.” Though Republicans want to roll back Dodd-Frank, Hensarling says they don't want a repeat of the 2008 financial crisis and so his bill would require banks to hold on to more loss-absorbing capital than is currently required. “We’re not trying to save any individual institution,” says Hensarling. “We’re trying to save the entire financial apparatus and our whole financial system.”]

Hensarling Needs Votes

Hensarling believes that his Financial Choice approach should replace Dodd-Frank entirely. But if Dodd-Frank reforms were passed in present form, they would undermine the 2010 financial regulation law. The skeleton will still exist, and the new bill would act as a disable-and-disregard "remedy" to Dodd-Frank.

With that in mind, the bill will most probably not make it to the floor until the summertime, per Rep. Patrick McHenry, vice chair of House Financial Services. Although passing the Senate would require a Herculean legislative effort to create a bipartisan measure, some Republicans are still looking for ways to roll back Dodd-Frank while avoiding working with Democrats. GOP Senator Pat Toomey suggested last week that the reconciliation process to repeal regulations on a simple majority vote basis is still available.

The Role of Capital Requirements

What is interesting is the Republican interest in capital regimes, which monetize regulations. Another way of looking at these is effectively as a corporate tax. So instead of ducking a regulation by imposing a corporate tax, the GOP could weigh that out during their tax reform efforts as a means to compromise with Democrats.

Hensarling’s new plan also includes reducing the frequency of bank stress tests performed by the Federal Reserve (once every two years as opposed to annually). The plan would also give the president the authority to fire the directors of the CFPB and restrict its oversight, as well as changing the code of conduct between the SEC and private companies.

Republican Strategy vs. Street Sense

Seeking to learn from the health-care-reform failure, the Congressional leadership may be of the view that H2O provides a strongly conservative approach to repealing and replacing Dodd-Frank, bridging the gap in the GOP between the Freedom Caucus and House leadership. It’s hard to see it get through the House without compromise, though. All the while, Dodd-Frank has quietly been picking up support in the last couple of months from the banks and their main news source: the Wall Street Journal, featuring masthead editorials opposing repeal of Dodd-Frank. [Treasury Secretary Steven Mnuchin has expressed interest in restoring aspects of the Banking (Glass-Steagall) Act of 1933.]

With some banks backing key portions of the 2010 law, such as the need to preserve the Financial Stability Oversight Council and the Orderly Liquidation Authority from Titles I and II, the bill's road to the President's desk will not be an easy one. If it passes the House, the Senate will almost certainly reject it.

Related Posts: Economic Hotspots Banking (Glass-Steagall) Act of 1933 . Dodd-Frank Act .

Friday, April 7, 2017

JOBS | March Disappoints (Updated Apr 8, 2017)

The 1990s saw steady job growth with Bill
Clinton and in 2009-2016 with Obama.
Sources: BLS, FRED (St Louis Fed).
March 7, 2017—The BLS reported this morning on the March jobs data.

Total nonfarm payroll employment rose by only 98,000 in March, following gains averaging 217,500 in January-February 2017.

Professional and business services continued to grow (+56,000), as did mining (+11,000). These are good-paying jobs:
  • Services to buildings and dwellings (+17,000) and architectural and engineering services (+7,000) did well. 
  • Most of the gain in mining occurred in support activities (+9,000). Mining employment has risen by 35,000 since a recent low in October 2016.
However, retail trade lost jobs (-30,000). Competition from the Internet is likely hurting bricks-and-mortar retailers. Employment in general merchandise stores declined by 35,000 in March and has declined by 89,000 since a recent high in October 2016. The good news is that with higher levels of technology the jobs that remain are better paid.

Health care continues to create jobs, as it has for decades, added 14,000 in March, with gains in hospitals (+9,000) and outpatient care centers (+6,000). In the first 3 months of this year, health care added an average of 20,000 jobs per month, compared with an average monthly gain of 32,000 in 2016.

Financial activities, the best-paying jobs, continued to trend up in March (+9,000) and jobs in the sector have increased by 178,000 over the past 12 months.

Construction employment changed little in March (+6,000), following a gain of 59,000 in February. It has been trending up since late last summer, largely among specialty trade contractors and in residential building.

Postscript (Saturday, Apr 8, 2017)

Neil Irwin in The New York Times today (p. B2) says that "it was a mistake" for Trump to point out the strong growth in jobs in February, because he drew attention to a number that in March didn't work out so well for the new administration.

Irwin goes on to say that payroll jobs are not the best economic indicator...

What? Trump promises more jobs, and he shouldn't focus on the monthly job numbers? I have been working with the job numbers for a long time, and I don't think Irwin is correct in advising the President to shift attention away from them, certainly not at this early stage.

Trump's biggest campaign commitment was to "Jobs, Jobs, Jobs". The number he has to beat is payroll jobs as shown in the chart below. Sure, these numbers are revised periodically, but they are the coin of the realm. BLS collects job numbers from each state based on unemployment insurance filings within each state. If a monthly number is out of line, it gets looked at more carefully. These numbers are well grounded.

Irwin's two alt monthly job numbers, by contrast, are not so well grounded—
  • Yes, the employment/population number is a good way of comparing long-term job-creating performance, because it eliminates issues involved in unemployment questions asked of the survey respondents in each sampled household. ("Who is not working? Have they been recently looking for work?") It is more resistant to survey-question creep. But the denominator, population, is not a reliable number for month-to-month comparisons.
  • No, probably, to Irwin's proposal to pick age groups within the employment/population ratio. It would require tagging each unemployment insurance report with a year of birth and dividing the monthly job change according to age groups. Maybe this could be done—or the numbers could be estimated based on a sample—but will the new information be worth the effort? Might be something for a state government with a strong Unemployment Insurance staff to experiment with.
  • Yes, finally, tracking wages is indeed important. We know that real wages over the long term have been falling in manufacturing as American factories compete with lower-wage supplies in other countries. But the real hourly earnings of private-sector employees is an aggregate of many different private-sector stories and is less useful for measuring the President's progress toward his stated goal than the aggregate job numbers. A rise in wages may simply reflect fewer jobs in a low-paying industry and more jobs in a higher-paying industry. The quarterly census of jobs and wages is conducted only quarterly and is published with a substantial lag that diminishes the value of the numbers. (But better late than never, and better late than inaccurate.)
Related Posts

Phony Numbers? . Job Numbers for Trump to Beat . Economic Hotspots

Job Growth by Month since the post-Glass-Steagall Meltdown of 2008.

ECONOMIC HOTSPOTS | by Dana Chasin

The U.S. Economy at Risk as Washington Debates.
My friend Dana Chasin sent me a summary of economic issues before the Congress at the end of the first quarter of 2017. 

With his permission, I have re-posted it below.

The issues add up to some strong challenges that will not be easy for the GOP to address. 

Having struck out on replacing Obamacare, Trump is facing the likelihood that the First 100 Days may go by without a single significant piece of legislation.

Here is Dana's guest post. I have added only a number to identify each of his five sections:

1. Dodd-Frank Action

One of the subtlest but surprising developments of the year to date is the sense that Wall Street itself (the financial industry) is not as warm to the idea of repealing the law as Trump is.  Several major firms and the Wall Street Journal -- yes, even its masthead editorial page -- have signaled caution when it comes to the president’s actions on Dodd Frank. More and more investors believe that the administration is unlikely to deliver any significant jolt to the economy. 

As Trump vowed again this week to “do a number” on Dodd-Frank, it’s expected that the SEC, under Jay Clayton who will likely be confirmed, will soften enforcement and rules that the 2010 law put in place.  That is not to say that rolling back Obama-era regulations will be easy for the SEC.  Per the Journal:  “The SEC doesn’t have the authority to revoke Dodd-Frank, which is an act of Congress.” 

Given that the vast majority of rules and regulations from the Dodd-Frank Act have already been implemented, the best that the SEC can do is amend them or grant exemptions on a case by case basis.  If legal objections were motioned as a result of the SEC’s actions, it would slow down the already drawn-out process.

2. Tax Reform

It seems that the already difficult tax overhaul process just got a lot more complicated for Trump.  The GOP in Congress are having trouble agreeing on a bill that Democrats won’t filibuster.  This all started when two senior economic officials who served in the Obama administration, David Kamin and Brad Tester, published an article that found that the much talked about Border Adjustment Tax will not produce the kind of revenue the President has suggested. If their report is confirmed by, say, the CBO, then it would throw the whole tax agenda off because they would not be able to produce a bill that wouldn’t add to the debt.

The Trump administration is working hard to ensure a legislative success before the year is up.  There are a lot of opportunities and a lot of road blocks (think Blue Dog Democrats and the Freedom Caucus). Recently, the President’s legislative director met with moderate House Democrats to propose working with them on the tax reform plan. One of the Democratic lawmakers who attended the meeting said that the legislative director declared the border adjustment tax dead on arrival.  If that is the case, then Donald Trump’s protectionist campaign promises will be broken, a prospective trillion dollars in revenue will be lost, and tax reform, lacking a pay-for, will limp forward, or not.  

There have been rumors this week that the White House is considering a carbon tax and a value added tax to make up for the loss of revenue that will be induced by the massive tax cuts Republicans are aiming for, both on the income and corporate side.  If the carbon tax is in the bill, the Freedom Caucus had have reason to vote against it.  

The White House has flip-flopped on the VAT and carbon tax, saying that it was considering them at first and soon after disavowed them completely.  Given the collective lack of experience this administration has, their negotiation efforts are very transparent and their tactics are easy to dodge so far.

This flip-flop shows that the Freedom Caucus should have reason to be cautious of their trust in the House leadership to put forth a plan with their inputs taken into account. This is precisely why the plan is showing signs of ripping apart at the seams.  This and the BAT may get debated extensively over the next few months.  Don't be deceived: they are dead letters in Congress. 

3. Infrastructure

For some reason, the administration decided to pick tax reform as its next big ticket item after the health care debacle, opting for the more difficult and partisan route.  The president may once have had a shot at working with Democrats who have been asking for infrastructure investment for a long time, but it seems that Trump is ditching that train for now.

The president’s infrastructure plan might, accordingly, also be too ambitions.  With a goal of a trillion dollars, Trump aims to pass large tax subsidies to investors willing to pour money into infrastructure investment.  There are many reasons this plan is risky, one of which is that large firms will be getting nothing short of massive government handouts for investments they are probably going to make anyway. 

Last year, Congressman Delaney came up with a plan that could give the president a pass around Democratic obstruction.  His proposed infrastructure bill combines infrastructure investments, which Democrats have been eying for quite some time, and international tax reform, an issue that Republicans have been keen to tackle.  And here’s the catch: it has strong bipartisan support with 40 Democrat and 40 Republican cosponsors. 

By going with tax reform first and seeking more money than Obama's stimulus package, this administration’s legislative agenda and self imposed August deadline suggests remarkable legislative incompetence.  

4. Budget

Despite being able to check off submitting a statutorily required budget to Congress from his to-do list, Trump can hardly consider this any sort of accomplishment at this point.  As it was not even dead on arrival -- Congress will not consider or even hold hearings on it -- and grossly increased the deficit, there is nothing to see here as an accomplishment. 

5. What the GOP Might Do

The biggest obstacle to a sweeping tax reform is the Democrats in the Senate, who could easily filibuster a bill if it adds to the national debt. The reason for that is that tax legislation that adds to the debt cannot be passed by a simple majority vote as per the reconciliation process that passed the budget resolution earlier this year.  That said, there are still ways around the filibuster with a model similar to the Bush Tax Cuts which passed in 2001. 

Per the Washington Post:  “Republicans could avoid Democrats in the Senate altogether by putting forward a plan that would expire after 10 years, the approach they adopted when they reduced taxes under President George W.  Bush. They could also rely on a different set of estimates than those produced by the JCT if that agency's analysis is unfavorable to their plan.” 

The budget resolution passed earlier this year through a reconciliation process could give the GOP some leverage in the legislature. While it may miss on major reforms, the administration could push through several smaller tax reforms that could pave the way for the president’s infrastructure plan.  If Trump were serious about infrastructure, Republicans could look to Congressman Delaney’s plan and set a less ambitious goal than $1 trillion.

In regard to repealing Dodd-Frank, Republicans are having a much harder time than they had anticipated.  As noted, the intricate law has recently picked up an unlikely supporter base: Wall Street itself. The industries main newspaper has cautioned against repealing the law, and several key players have joined the Dodd-Frank chorus.  That won’t stop Republicans, however, from at least seeking to chip away at some parts of the law.  

This is just the beginning of what is going to be a drawn out process, with several wins and many losses.  The question is can the president pull a rabbit out of a hat and pass tax reform or will this administration be legislatively stillborn come August recess?  Money can buy many things and every administration  has a learning curve but it is already beginning run out of the one thing it keeps trying to buy: time.

Related Posts: Banking (Glass-Steagall) Act of 1933 . Dodd-Frank Act .
Hensarling's H2O Bill

,