Well, Lisa Kron and Jeanine Tesori have shattered the walls of that Venn diagram with a delightful and painful new musical, based on Alison Bechdel’s graphic memoir of the same title, Fun Home, now running at New York’s Public Theater.
By “graphic memoir” I don’t mean that the material is graphic – though it certainly is at times. I mean that the narrative is conveyed graphically. Ms. Bechdel has been writing and drawing the comic strip, “Dykes To Watch Out For,” a Doonesbury-esque soap opera with social commentary, for decades; when she set out to write the story of her father’s life and (most likely) self-inflicted death, she turned to the same form, and produced an absolutely searing portrait that both could serve as a definition of “dysfunctional” and that breaks radically with the tradition of such works by the utter absence of self-pity, the painful empathy for the tyrannical father whom she knows she resembles.
When I first heard someone had adapted Fun Home into a musical, I said: that’s impossible. First of all, the book is incredibly close to the consciousness of the Bechdel character – we spend a huge amount of time alone with her thoughts and behaviors. Second, it’s wildly non-linear, jumping around between childhood, her college years (the era of her father’s death), and a present-tense that provides the narrative voice. Third, as a comic it’s naturally cinematic, directing the eye, framing what it wants us to see. That’s not how the stage works. And finally, a musical?!? This painful, beautiful but impacted work is going to launch into song?
But Kron and Tesori have accomplished the impossible. They’ve created a work that is true to the original story and material without being beholden to a vision crafted for another medium. And they’ve made it sing.
How did they do it?
They kept the non-linearity of the book, but structured it more clearly as a classic memory play. The mature Alison (Beth Malone), now roughly the age her father was when he died, is struggling to write the book that serves as the basis for the play, and in that capacity she guides us back to her childhood, and then her college days, and then mixes periods as she needs to. She talks to us, but she also talks at the characters in her past – those memories are still alive to her, and so she is a dramatic character, not just an observer.
They – and director Sam Gold, and his design team, David Zinn (set and costumes), Ben Stanton (lighting) and Jim Findlay and Jeff Sugg (video) – managed to reference the graphic origins without trying to recreate them, instead taking full advantage of the possibilities of the stage. We start in the mature Alison’s loft, but pieces of furniture from her childhood home (her father obsessively restored their Victorian pile to museum-level perfection) litter the stage – the memories she lives with, or has conjured up for us. Other scenes intrude on the same space – her Oberlin College dorm room, for example, where Alison (played at this age by the winningly nerdy Alexandra Socha) has her first proper sexual experience with her first girlfriend (the way-too-perfect Roberta Colindrez). But we never forget that this is being staged for us by the mature Alison. Then, for a while, a black curtain isolates a narrow downstage playing area, hiding everything behind; this is when the young Alison visits New York with dad, a trip whose harrowing emotional quality fully justifies the emersion in blackness. And then, on a visit home with the girlfriend, right after Alison’s come out of the closet, the curtain rises to reveal her childhood home in all its glory, and we are finally and fully there. It’s a breathtaking moment – and entirely theatrical; you couldn’t ever get the same effect in a comic strip.
They changed the young Alison (Sydney Lucas, who will be, as they say, going places) in key ways, making her far more winning and outgoing than the Alison of the book, and dropping the obsessive-compulsive behaviors that occupy a great deal of the book’s narrative; in general, this Alison seems to have emerged far healthier than the Alison of the book. She’s angry and sad about her father, yearning for him and wishing she could put him behind her, but she doesn’t come off as deeply damaged. And they’ve played some creepy scenes for comedy, to magnificent effect. For example: the book and play are called Fun Home because that’s the ironic name the kids gave to the family business, a funeral home, which adjoined the house. And the first real number of the musical is a Jackson Five-style advertisement the kids (Alison has two brothers, played by Griffin Birney and Noah Hinsdale, both of whom do a fine job but neither of whom has been given a proper character – but that’s true of the book as well) have put together which they start singing from inside the coffins, and which contains rhymes like “condolence book” and “aneurism hook” (yes, I know that’s just rhyming “book” and “hook” – that’s not the point). Everyone in the audience fell in love with little Alison during that number – and it’s nothing the Alison of the book would have done.
And they let us see her father’s neediness. In the book, we necessarily see him entirely through Alison’s eyes. But on stage, the father (Michael Cerveris, giving an almost too-painfully real performance) is an independent presence. He doesn’t speak to us – only the mature Alison is allowed to do that – but he sings his own songs, and we see into his inner life. The inner life of a closeted gay man, whose life was shattered by the possibilities of liberation.
That’s what both the book and the play are ultimately about. Alison’s father grew up in an era when homosexuality was first stigmatized but culturally ignored, then medicalized, then finally ceased to be defined by the larger culture, as gay people decided for themselves who they were and what recognition they deserved. Bechdel does not flinch from showing the ugliness and danger of the closeted life her father led – he has repeated affairs with much younger men, including some who are underage; he turns to hustlers; he brings home disease – and Malone is scathing in her commentary on those choices. But it was a life whose order he understood, and meticulously, even ruthlessly, maintained.
After his daughter comes out, though, and his wife (played with tightly reined-in hatred by Judy Kuhn) decides enough is enough and leaves him, that order is shattered. And the suggestion of the play is that he just wasn’t psychically capable of picking up the pieces and building something new, and more open. So he stepped in front of a truck.
If you have a heart, it’ll break it. But you’ll be laughing as you cry, because for all its darkness and pain, this play is actually a lot of fun.
Fun Home plays at New York’s Public Theater through December 1st.
Just a few quick observations on last night’s major results.
First, Bill DeBlasio is a pretty standard liberal Democrat who ran a very good campaign against a weak opponent in a very Democratic city. It’s hardly surprising that he won. What’s surprising is that New York has not trusted a Democrat to be mayor in twenty years. And Ed Koch was not a standard liberal Democrat; there’s more continuity than not from the Koch years through the Giuliani years to the Bloomberg years, certainly in terms of their respective electoral bases. And, given that history, it’s surprising that he won by such overwhelming margins, winning nearly three-quarters of the vote overall, and basically every meaningful demographic slice of the city (the New York Times has a handy map that lets you look at the actual vote tally in different districts, and you can filter by districts that are in a certain income category, or have a certain racial makeup – it’s fascinating to play around with).
I interpret the overwhelming margin to be a version of a bandwagon effect. The city as a whole decided it was time for a change, and decided to give the agent of change their collective blessing. DeBlasio has a mandate not just from those New Yorkers who never liked Bloomberg and what he stood for, but from many New Yorkers who voted for a third Bloomberg term and still like him. (DeBlasio carried districts that voted for Bloomberg in 2009 by a 14.5% margin.)
Bloomberg, after all, is not leaving office under a cloud of scandal or being widely acknowledged a failure. The city is doing extremely well by most measures, and he’s leaving office reasonably popular. The huge margin for a candidate who ran explicitly as a candidate of change isn’t a repudiation of Bloombergism as such but an all-but-unanimous declaration that Bloombergism has achieved its proper objectives, and now it’s time to try a new tack to accomplish other objectives.
Second, Chris Christie is now officially the only Republican with broad popular appeal. No, that appeal is not deep – most people know absolutely nothing about him, and they may come to hate him once they get to know him. Yes, he won against an extraordinarily weak opponent – but if the Democrats thought they had a solid chance of beating him, they would have put up someone stronger. And yes, some of the juicy targets he’s aimed at in New Jersey are not nearly so juicy at the Federal level. None of that matters right now. Right now, the Electability Caucus in the Republican Party has a reasonable candidate. And his most plausible opponent for that title is surnamed “Bush.”
All that speaks to his political prospects, which I see as very good right now. It doesn’t say anything about the meaning of his political prospects – because I don’t think there is any meaning to them. I don’t think Chris Christie represents a particular wing or faction or disposition within the Republican Party – in the way that, say, Rand Paul or even Marco Rubio does. His agenda as governor has been substantially identical to the agenda of Republican governors across the country – and has born some similarity to the agenda of the Democratic governor across the river, Andrew Cuomo. That fact reflects the particular balance of pressures on statehouses in the post-financial-crisis era more than anything, which has produced austerity to one degree or another all around the country, and Republicans have done as well as they have electorally at the state level because an agenda of austerity pleases rather than angers their electoral base.
All of which is a roundabout way of saying that if Christie wins the Republican Presidential nomination in 2016, he will do so because he appears electable, but not because he mounts any kind of ideological challenge to the Republican center of gravity – on any substantial issue.
Finally: I know very little about the Virginia gubernatorial race, but I confidently predict that Terry McAuliffe will prove a really unpopular governor. I just can’t imagine any electorate warming to him. It’s a testament to how rapidly Virginia is changing and how unpopular Cuccinelli must have been that he could lose to McAuliffe. But if I were Hillary Clinton, I’d be mildly worried about being dragged down in Virginia in 2016 – where she should still be favored, all else being equal – because of my association with McAuliffe.
I was delighted this morning to join Rod Dreher in his ruminations on rock music, which he loves but has difficulty justifying in terms of his Christian commitments. The post is worth reading in full; I’m going to take as my own jumping-off point his conclusion:
I end this digression almost as conflicted and as confused, and as “dialectic and bizarre,” as I started. The one thing my theologian friend’s question helped me to learn, by sending me back to Auden, is that the answer, or answers, will likely emerge out of a reflection on the distinction between what is Real and what is True, and how the two relate dialectically in art, including the art of rock music.
I think that’s very much the right place to start. If I understand Auden, or Dreher’s take on Auden, correctly, then the difference between “Real” and “True” is the difference between phenomenology and ontology – between an experience and an objective reality independent of subjective experience. From Dreher’s perspective, that realm of “True” includes moral truths, and he’s asking a question, as old as Plato, about the effects of art that allows us to participate in an experience that is “untrue” in a moral sense. Which, to me, devolves back to a question about whether it’s a good idea to have experience as such – because, clearly, from a moral perspective it’s better to understand from the inside what it’s like to be, say, a Nazi, or a prostitute, or whatever, through an encounter with great art that really takes you inside that experience, than to have to actually become a Nazi, or a prostitute, or whatever.
But I wanted to make another observation. Dreher comments in passing that he can’t appreciate rap music in part for aesthetic reasons: he just doesn’t like it. And there’s no point in trying to argue somebody into or out of an aesthetic appreciation – you can learn to like something you don’t appreciate initially, but you can’t really be taught to like it in the way that you can be taught to understand it. But he also says that he can’t imagine what music, what aesthetic experience, would make him capable of appreciating the experience of the lyrics of a rap like “Big Pimpin’” – a rap he calls “animalistic.”
I just wanted to point out that Jay-Z himself had conflicted feelings about that bit of writing, and used the same terminology that Dreher did to describe it:
WSJ: A lot of musicians claim to never go back and listen to their old material, but you obviously took some joy in digging back into your archives for “Decoded.”
Jay-Z: I believe that it’s necessary. Especially for rap music, where the words are fast and for the most part there’s not a consistent melody that people can sing along to. So a lot gets lost in translation. Because rap music is poetry, I thought it was important to describe it as such.
WSJ: You’re famous for not writing your lyrics down as you compose them. What changes about them when you see them on the page like this?
Jay-Z: Some [lyrics] become really profound when you see them in writing. Not “Big Pimpin.” That’s the exception. It was like, I can’t believe I said that. And kept saying it. What kind of animal would say this sort of thing? Reading it is really harsh. [emphasis mine]
If I take Jay-Z at his word (and that’s my inclination in the absence of a reason not to), he’s saying that this particular lyric came from someplace he’s a little alarmed to discover in himself. He doesn’t read his words and say: wow, I got at something important and complex. He reads them and says: did I say that? How could I have? Must I this thing of darkness acknowledge mine?
Is that, perhaps, a stance from which the lyric can be experienced more effectively by someone like Dreher? Does framing the lyric that way, as something that came out of the artist almost involuntarily, and that disturbed him when he looked at what he created, make it something that can be appreciated from within a moral framework that Dreher would respect? Or does it do the opposite – suggest that the artist himself should have suppressed it?
That interview with Jay-Z went on:
WSJ: What would you change about hip-hop if you could?
Jay-Z: We have to find our way back to true emotion. This is going to sound so sappy, but love is the only thing that stands the test of time. “The Miseducation of Lauryn Hill ” was all about love. Andre 3000, “The Love Below.” Even NWA, at its core, that was about love for a neighborhood.
We’re chasing a lot of sounds now, but I’m not hearing anyone’s real voice. The emotion of where you are in your life.
“The emotion of where you are in your life” – that isn’t always love, and may not always stand the test of time, but it’s something we, as a species, are not very good at living in. If great art enables us to do that, connecting us more deeply to ourselves by connecting us to somebody else who has connected deeply to him- or herself, then I’m for it. And if we can’t make moral sense of that experience, well, sometimes it’s hard to make moral sense of life. But we can’t escape that problem by not living.
A commenter on yesterday’s monetary policy post explains how NGDP targeting works:
The process is iterative.
In t=1, the Fed says “we want to get back to the level in one year. Therefore we will start by buying $100b of whatever this month, and check in in a month and see if that gets us there.”
In t=1+1month, the Fed says “OK, checking in. Looks like $100b/mo doesn’t quite get us there. $150b this month it is!”
The key is – as long as you think the Fed really will buy as much whatever as it takes to hit the target by the date, then you will act accordingly.
The thing about nominal growth is that it could be, in theory, all inflation. So RGDP growth over a certain timeframe could, theoretically, be zero or even negative while NGDP growth is hitting a target simply because the Fed is printing so much money.
So if the Fed can hit an NGDP target through purely inflationary money printing regardless of RGDP, it is credible that they can hit whatever NGDP target they want. And because they’re credible, you will act as though NGDP will be at the level in future periods and act accordingly, and that “acting accordingly” will tend to increase RGDP growth, meaning that you don’t actually HAVE to inflate very much to hit the NGDPLT.
I understand this argument. If the central bank can credibly claim that they will continue to buy bonds in ever-increasing numbers until the NGDP target is hit, and that nothing whatsoever will dissuade them, then yes, it makes sense that the market would expect that it will actually do that, and act accordingly.
But how do you earn that credibility? Presumably, the central bank would have to do something to demonstrate that steely-eyed resolve. What would it take?
Presumably, again, what it would take would be a willingness to persevere in its course in the face of substantial evidence that its policies were having deleterious effects. If the policy worked easily, after all, the market might conclude that the policy would only be followed if it worked easily.
So: the central bank announces an open-ended QE, much larger than previous rounds. It announces that it will not curtail the program if inflation goes above 2%, nor if real growth stalls – it will continue to buy bonds, in ever-increasing numbers, until the price level is restored to its previous path, and it is targeting to achieve this in a year.
Now: what happens if, after one quarter, inflation ticks up – but real growth drops, unemployment goes up, and business investment is in free-fall? Alternatively, what if inflation hasn’t ticked up much, growth remains anemic, the yield curve remains flat, and the financial markets look very frothy, leading to fears of a new financial crisis? (Which is where the Bill Grosses of the world think we are today.)
In either case, it would look like the policy was failing. And in either case, to remain credible, the central bank would have to continue in its course. It would have to say: no, our goal is reflation above all, and we are not going to be dissuaded by any short-term hiccups. In the long run, this is right policy, and we’re going to follow it no matter how bad things get.
After a couple of years of that kind of steely determination, yes, the financial markets would probably conclude: the Fed is serious about this. They are not going to permit deflation. They will always reflate, aggressively. So we don’t ever have to worry about deflation. At which point, deflation will become much less likely.
That’s pretty analogous to the situation Paul Volcker found himself in when he was appointed to chair the Fed. He settled on a policy of aggressively fighting inflation, and basically ignoring the other economic consequences of his policy. Unemployment went through the roof; America entered into a deep recession. Many (rightly or wrongly) trace the deindustrialization of America to this period; certainly, Volcker’s policy had a significant impact on the currency, and hence on patterns of trade. In 1982, this policy looked like a failure, and the Reagan Administration begged for relief. They didn’t get it – and suffered through a massive mid-term repudiation at the polls.
And then it started to work.
In the real world, the political circumstances that would permit an analogous reflationary policy to be adopted are fairly extreme. They certainly don’t persist today. There is substantial opposition, elite and popular, to QE even though there has been no uptick in inflation.
Moreover, even if the markets become convinced that monetary policy will produce Goldilocks conditions, that has a downside as well. Remember the “Greenspan put?” This was the conviction, based on Greenspan’s record at the Fed as a whole but strongly underscored by his brokering of a solution to the Long Term Capital Management situation, that a major financial crisis would never be permitted. Anything that threatened the fundamental stability of the system would lead to rapid Fed easing. So nobody need worry seriously about systemic risk – the Fed had that covered.
We all remember how that worked out, right?
In any event, my points about the inefficiencies of QE relative to the normal open-market operations of the Fed just mean that we should expect QE to have more negative side-effects than Fed easing normally does. In which case, it will be that much more expensive, politically and economically, to demonstrate the kind of resolve necessary to establish credibility.
All of which does not mean that we should raise rates. From my perspective, it definitely means that we should look forward to a cashless society where negative nominal rates are possible. And I would also argue it means we need to think about how the fiscal side can help the monetary side out, since both sides have associated costs and inefficiencies.
I’m not entirely sure how to feel about The Landing, the new musical from the May-December creative team of young playwright Greg Pierce and veteran composer John Kander (Cabaret, Chicago, and many more), currently being staged at The Vineyard Theatre (directed by Walter Bobbie).
On the one hand, I’m kind of a fan of the chamber musical as a genre, and I get exhausted these days by the sheer exertion on view in Broadway musicals. (I seem to be the only person I know to have felt assaulted rather than exhilarated by Matilda.) And I also like to encourage experiments with storytelling. So I started out predisposed to like the show.
And I wound up liking it, but only after almost giving up on it. In the end, I decided it’s a piece with potential, but that still needs work. So I’ll write about it in the spirit of constructive criticism, on the assumption that Kander and Pierce similarly consider it something of a work in progress.
The show is composed of three short one-act musicals, each about half an hour. Each segment is a completely independent story, and each has a different tone and style, but there’s a common cast and a common theme: that the apparent cures for your discontent may in fact be your doom.
From where I was sitting, the first segment, “Andra,” is the weakest of the three, narratively and musically. The protagonist is a young boy, Noah (Frankie Seratch), extremely bright and somewhat sensitive, with no friends, a distant father (he’s never on stage, in fact), and a cold, brittle mother (Julia Murney). When his mother hires a carpenter (Paul Anthony Stewart) to redo the kitchen, Noah gloms onto him as a surrogate father figure, and the two begin to bond. And then Noah, using the telescope that the carpenter gave him, learns that someone else has been bonding with the good looking interloper, in a rather different fashion. The discovery ruins any possibility of a relationship between Noah and the man. And then the job is done, and the man leaves. The playlet ends on mother and son, wordlessly united in wistful longing for what they just lost.
I say the segment has a narrative problem first and foremost because of the way it’s told – it relies heavily on narration (the narrator is played by David Hyde Pierce), and that narration felt more like a short story than it did like something integral to a play. If you’re going to talk to the audience, I think it’s important to acknowledge that you are doing that, and this narrator wasn’t written that way. As a consequence, he distanced me from the action rather than drawing me in, and I kept wondering whether he was actually necessary. Then, the relationship between music and narrative felt very muddy – the piece wasn’t all sung, but neither was it punctuated by emotional moments that required song; it just wasn’t clear to me what the music was doing (plus there were no memorable tunes). Ultimately, the story felt to me very second-hand, something I’d seen before many times, and told better.
A lot of critics have called out the second segment, “The Brick,” for being the big problem with the show, but I don’t agree. There’s a huge swerve in tone from the autumn leaves of “Andra,” to the neon expressionist sketch comedy of “The Brick,” but I found that to be all to the good. In this segment, the narrator is played by Seratch, but he’s also a character integral to the story: a boy who’s visiting his aunt (Murney) and uncle (Stewart) for the summer. And he’s clearly talking to us – he has a relationship with the audience. So the narrator works.
And what about Hyde Pierce – who does he play? He plays the title character: a brick – supposedly taken from the wall of the St. Valentine’s Day massacre. You see, the aunt is crazy for old gangster films, and the brick (which she orders by dialing 1-800-4ABRICK) is the mechanism for her nocturnal Don Quixotefication, the Clyde to her incipient Bonnie.
The segment does have problems, the primary one being a need to explain too much. (The nephew at one point goes on line and learns from a website that the brick is cursed. Did the playwright really think we didn’t already know that?) But the brick is a hoot, his duet with the aunt is lovely – actually, every song the brick sings is great. And he’s not a knowing, calculating force of evil; he’s not really diabolical at all – he’s just naturally destructive. (Pretty much all he sings about is committing acts of horrific and senseless violence, and he warms to the aunt when he sees she has a taste for same.) The problems the segment has are all fixable, and are worth fixing, because the cornerstone is solid.
The last segment, “The Landing,” is, by general acclaim, the best – best songs, best characters, eeriest, most intriguing story. The narrator this time is the social worker who has helped a gay couple adopt an orphan boy – she’s part of the action, but on the periphery, and her narration is minimal. The couple’s relationship is briefly but effectively sketched in (and the lucite set realistically evokes their neat-as-a-pin apartment). One of them (Stewart) always wanted a child; the other (Hyde Pierce) has finally given in. And when he arrives, he’s perfect.
Too perfect. There’s something obviously wrong about him from the outset – he’s too well-behaved, too instantly comfortable, too easy to please. The adoptive couple don’t actually have to do any parenting – the kid goes to school, paints, plays piano (a Sloop-John-B-esque tune that starts off seeming sweet but gets more sinister as the segment goes on), and organizes an outing with Stewart to a mysterious place called The Landing.
Hyde Pierce senses something’s off about the kid, and confronts his partner; Stewart, convinced he’s just jealous of an interloper into the family, reacts angrily. He talks to the social worker – and admits that, yes, he is jealous. He wants his lover all to himself. He thought he was enough. And then he confronts his adopted son, and learns that he’s right: the boy’s not at all what he seemed. And Stewart won’t be coming back from the Landing, whatever it is. Hyde Pierce has the chance to sing a plaintive goodbye, and then he’s left alone.
It is indeed the best segment – but I admit, I have no idea what it “means.” Like “The Brick,” “The Landing” isn’t really cautionary tale – it’s not warning audiences not to adopt children, anymore than “The Brick” is warning audiences not to watch gangster movies (or order trinkets from 1-800 numbers). The message, if there is one, is not one that is typical for an American musical. It would seem to be simply that this kind of thing can happen. Sometimes, almost by accident, you discover your dark side – a taste for violence, perhaps – and that knowledge destroys you. Sometimes, with all the proper planning, you do something – like adopting a child – that looks like growth, like completion – and that destroys you, or someone you love.
The surface sweetness of the music may keep of from feeling it, but that’s a pretty hard place to land.
The Landing runs at the Vineyard Theatre through November 24th.
And as long as I’m reading Kevin Drum’s blog, he had a piece about monetary policy yesterday that I’m still trying to figure out how to answer. It relates to a longstanding debate about whether monetary policy is sufficient to pull the economy out of the low-growth doldrums that it’s been in since the financial crisis. Fundamentally, I don’t believe it is.
To follow the argument, it’s probably a good idea to start here with Bill Gross’s piece that prompted the subsequent debate. The heart of Gross’s argument is: currently there is little return to risk, as evidenced by low absolute returns on risky assets – low yields on long-term government bonds, low yields on high-yield bonds, low earnings yield on stocks, you name it. And when there is little return to risk, there’s little return to the game of capital allocation. Asset prices may rise because the Fed is pumping money into the system, but capital is not being redeployed away from unproductive to more productive assets.
[P]rices on financial assets have soared and central banks have temporarily averted a debt deflation reminiscent of the Great Depression. Their near-zero-based interest rates and QEs that have lowered carry and risk premiums have stabilized real economies, but not returned them to old normal growth rates. History will likely record that these policies were necessary oxygen generators. But the misunderstood after effects of this chemotherapy may also one day find their way into economic annals or even accepted economic theory. Central banks – including today’s superquant, Kuroda, leading the Bank of Japan – seem to believe that higher and higher asset prices produced necessarily by more and more QE check writing will inevitably stimulate real economic growth via the spillover wealth effect into consumption and real investment. That theory requires challenge if only because it doesn’t seem to be working very well.
Why it might not be working is fairly clear at least to your author. Once yields, risk spreads, volatility or liquidity premiums get so low, there is less and less incentive to take risk. Granted, some investors may switch from fixed income assets to higher “yielding” stocks, or from domestic to global alternatives, but much of the investment universe is segmented by accounting, demographic or personal risk preferences and only marginal amounts of money appear to shift into what seem to most are slam dunk comparisons, such as Apple stock with a 3% dividend vs. Apple bonds at 1-2% yield levels. Because of historical and demographic asset market segmentation, then, the Fed and other central banks operative model is highly inefficient. Blood is being transfused into the system, but it lacks necessary oxygen.
Paul Krugman responds as follows:
When I read Gross and others, what I think is lurking underneath is a belief that capitalists are entitled to good returns on their capital, even if it’s just parked in safe assets. It’s about defending the privileges of the rentiers, who are assumed to be central to everything; the specific stories are just attempts to rationalize the unchanging goal.
Interest, classically (and I do mean classically, as in Mr. Keynes and the [sic]), is the reward for waiting: there’s supposedly a social function to interest because it rewards people for saving rather than spending. But right now we’re awash in excess savings with nowhere to go, and the marginal social value of a dollar of savings is negative. So real interest rates should be negative too, if they’re supposed to reflect social payoffs.
This really isn’t at all exotic — but obviously it’s a point wealth-owners don’t want to hear. Hence the constant agitation for monetary tightening.
To which Kevin Drum in turn responds:
Real investment yields aren’t low because the Fed is keeping treasury rates low. They’re low because the economy sucks and nobody has much confidence in the future. This lack of confidence keeps cash on the sidelines, and this in turn means there’s a huge supply of investment capital competing for a small number of good investment opportunities. When this happens, any project that’s even halfway promising can demand very low rates because investors are all clamoring to be let in. They bid each other down, which produces low yields even on risky investments.
I suppose Gross has some baroque explanation for why this is the fault of low Fed rates, but if he does, it’s nowhere to be found in his investment letter. The boring truth is that if we want higher investment yields, what we need is a stronger economy, one where the middle class is likely to thrive and consumption will increase robustly. In that economy, there are lots of great investment opportunities and yields will increase.
Allow me to offer a fourth perspective on this mess of an argument.
Let me start with Drum’s response. The problem with it is that, supposedly, the Fed has the power to engineer a growing economy – or, an economy that grows at its natural maximum rate without triggering accelerating inflation. If QE hasn’t achieved that (and it hasn’t) then the question is why not. Gross isn’t really making an argument for tightening. He’s making an argument that QE is failing to achieve its objectives. Drum appears to be agreeing to the degree that he refers to “real” investment yield being low, and posits lack of confidence “in the future” as the reason why the economy sucks – rather than, say, a lack of confidence that the Fed will engineer higher inflation.
Now let me move on to Krugman. Why would rentiers object to a rising stock and bond market? Anyone who already has money has done very, very well. Gross is complaining that people like him are having trouble doing their job – and their job is allocating capital. When yields on everything are low, that job doesn’t pay very well. But that’s a job; it’s not just collecting rents.
Now, on to Gross. His understanding of what the world’s central bankers are up to is that they are trying to engineer a recovery in the real economy by pumping up asset prices and counting on the wealth effect to boost investment and consumption. But he presents no evidence that this is what the world’s central bankers are trying to do – in fact, there’s plenty of anecdotal evidence that at least some central bankers are, just like Gross is, worried that this is what they’ve done, but all the evidence is that they were trying to stimulate borrowing and lending the old fashioned way.
So if they’re all wrong, what’s going on?
From where I sit, what’s going on is that, contrary to the hopes of the advocates of QE, the zero bound still matters, because the shape of the yield curve still matters.
Classically, the Fed controls the Fed Funds rate, and it controls it by engaging in open-market purchases designed to manipulate the effective rate down to their target. This rate is the rate at which institutions that can borrow at the Fed window will lend excess balances to other banks that need to augment their balances. And this rate is effectively the left-most point of the yield curve – the yield for overnight money on which the rest of the curve is based.
The various rounds of QE have involved engaging in open-market purchases across the yield curve because the effective Fed Funds rate can’t go below zero. Now, if you buy what the market monetarists are selling, the point of QE has not been to bring down rates at the long end (and thereby stimulate investment by making term-borrowing cheaper); rather, the point has been to raise nominal growth expectations, which in turn would cause rates to rise at the long end of the curve (i.e., to cause bond prices to fall).
How is that possible? How could buying pressure cause the price of something to go down? Well, think of it this way. Every buyer implies a seller. So the real question is where the clearing price is – and what the presence of a new buyer does to that clearing price. Could the presence of a new buyer stimulate selling? It depends on what information the presence of said buyer communicates to the rest of the market.
The Fed is not a speculative buyer. So its purchases do not tell the market that prices are too low. If the Fed buys $1 trillion of bonds, then investors know the Fed has $1 trillion of inventory to liquidate. And the Fed’s mandate is to liquidate that inventory when either inflation has picked up or unemployment has dropped or both – in other words, when nominal growth has increased. Which, in turn, should imply higher long rates for government bonds. Investors, in other words, should expect the Fed to sell in the future into a falling market, which should not make them sanguine about buying alongside a Fed that was bidding bond prices up and up. So, following this logic, Fed buying would not result in bond prices being bid up and up.
Bill Gross is looking at the market, though, and saying: that’s not what’s happening. It looks like prices keep going up, yields keep going down, and that’s the sign of a weak economy. Which, as everyone in this discussion agrees, it is!
But does that mean we need long rates to go up? Yes it does – but the Fed doesn’t control long rates directly; it controls the overnight rate. (Well, it doesn’t actually control that either, but close enough for government work.) What drives long rates is expectations about nominal growth. If the Fed ended QE, and the market monetarists are right, that would make long rates drop. Carry would get even worse. To make long rates go up, the Fed needs to raise expectations about future nominal growth change.
The market monetarists argue that the Fed can with relative ease engineer that shift in expectations simply by declaring a relevant target. Just say you’re going to buy stuff – any stuff – until nominal growth hits 5%, and nominal growth expectations will relatively quickly go to 5%, which in turn will encourage investment to take advantage of those expected returns, which in turn will make them a self-fulfilling prophecy.
I’ve never been entirely comfortable with that contention, and a major reason is that I’ve never understood the channel by which open-market transactions reliably drive changes in expectations. Basically, how do you convince the market that the Fed can and will credibly engineer its desired outcome in a specific timeframe.
The last part – the time frame – is crucial, because if the argument is simply that, yeah, eventually nominal growth rates will get to the target, but there’s wide disagreement about how long it will take, then it might make sense for many market participants to ride along with Fed buying in an inflating bubble – the opposite of what the market monetarists want them to do.
I’m a bit out on a limb with the foregoing, but that’s how I reconcile what Gross is observing with the theory behind the central bank’s actions.
So what’s the solution?
The right solution is for short rates to go negative. When a normal recession hits, the Fed drops short rates well below where long rates are, resulting in an upward-sloping yield curve. That both reflects expectations of recovery and creates the conditions for one. The most basic carry trade is banks borrowing short and lending long – borrowing from depositors and lending to real businesses – but every other carry trade is some more exotic version of the same thing. That’s what Bill Gross is looking for.
But banks can’t pay a negative interest rate on balances because otherwise people will stuff cash in mattresses.
If we didn’t have cash – if all money were electronic – this would not be a problem. Then short rates could go negative, which basically means you’d earn a negative yield on balances and would get paid to borrow money overnight. That would create immediate and obvious incentives to deploy capital in ways that generated a return, even a small one in nominal terms.
I note that Krugman also agrees that what we need is negative real rates. But if short-term inflation expectations are very low, the only way to get negative real rates is to have negative nominal overnight rates. And even if you could convince people that inflation will go up in the future, you can’t convince them that it’s higher right now than it actually is. So without the possibility of negative nominal short rates, short rates will always be too high in our situation. And carry will be too low.
Unfortunately, eliminating cash is not a short-term option – though I do think it’s something to work on, and I hope the Japanese are working on it right now. With their negative population growth rate, they should expect low to negative nominal growth rates as far as the eye can see. That shouldn’t mean immiseration – indeed, it should mean more real resources for the rising generation – but they are going to need to have negative nominal short-term rates if they don’t want persistent economic distortion.
The other lever we have is fiscal policy. I need to think a bit more about whether the information flow implied by a rise in Federal borrowing versus the information flow implied by an increase in buying by the Fed. I think it makes a big difference what activity is being financed. Market monetarists don’t believe there’s really any role for fiscal policy in macro-economic management – in part for the very good reason that they think the Fed can neutralize any fiscal stimulus if it doesn’t change its targets, and in part for the other very good reason that they assume government spending involves some dead loss relative to private allocations of capital. I think that there are arguments to be made on the other side of the ledger, however. But this post has gone on long enough.
The website where you’re reading this is called “The American Conservative,” as is the magazine with which it is affiliated. I admit to being ambivalent about the name – partly for my own personal reasons (I don’t particularly identify as a conservative these days) and partly for marketing reasons (I’d like us to reach an audience beyond self-identified conservatives and opinion journalism junkies, and I think the name gets in the way of that – in a way that a name like, say “The American Scene,” where I used to write, would not).
But we have that name for a reason: because the magazine is dedicated to framing itself as a coming from a conservative perspective. We writers all disagree on precisely what that might mean, and we also may disagree on how much it matters whether a perspective is so defined – but to those who edit and publish the magazine, it matters a lot.
All of which is a roundabout way of getting to my whine that, in a post entitled “Can Conservatives Be Persuaded To Raise the Minimum Wage” there’s no recognition that a year ago “The American Conservative” published a big piece by the publisher calling for a substantial rise in the Federal minimum wage, and followed it up with many subsequent pieces on the same subject.
We’re not going to persuade anyone, after all, if people don’t remember what we’ve argued.
Amazingly enough, until this past Sunday I’d never actually seen a production of Thornton Wilder’s Our Town, nor even read the play. I think I assumed that it was an exercise in sentimentality – a love letter to a lost world – as well as a theatrical museum piece, using techniques that might have been avant-guard in 1938 but that would seem quaint today. After taking in Stratford’s magnificent production of The Matchmaker back in 2012, you’d think I would have learned that I have an affinity for Wilder, but apparently not yet. Now, having just seen the very traditional production on view at the Shakespeare Theater of New Jersey, I think I won’t forget. Although, if I take Wilder’s own play to heart, I know I eventually will.
Our Town is, as the name would imply, the story of a town. As traditionally staged, though, we never see it. There’s barely any scenery, and basically no props. We are asked to imagine our way into the town based on the acting (which is uniformly excellent in this production) and the historical, anthropological, even geological information provided by the Stage Manager and his guest lecturers. At the time Wilder wrote it, it might well be possible for audience to imagine their way in through memory, real or quasi-real (most audience members wouldn’t have grown up in places like Grover’s Corners, but small town life was part of the larger social memory). Any nostalgia that a contemporary theater audience were to indulge in would likely be third hand or even further from reality. We are asked, even more than in Wilder’s day, to awake our faith.
Faith in what, though? Faith that such a place as Grover’s Corners was real.
Was it? I said that the play isn’t sentimental, but on the surface it looks like it very much is. The people we see are, after all, good people, decent people, to a man. This is not a town divided by strife, or secretly perverse. Heck, two major plot points are when George Gibbs (Jordan Coughtry, who seems perhaps too good for a boy who’s always been shamed) is shamed into chopping wood for his mother, a chore he has been neglecting, and when he is shamed, by his future wife, Emily Webb (a delightfully fresh-faced Nisi Sturgis) into admitting that he’s been rather conceited lately since his triumphs on the baseball diamond.
It’s not a town without troubles of course. Promising boys go off to war for no particularly good reason, and some don’t come back. Women die in childbirth. Five percent of the cast is so beset by troubles as to be moved to suicide. But still, one might be forgiven for thinking it’s the kind of picture that Tom Lehrer satirized in “My Home Town.”
You might think that – until you get to the terrible (as in inspiring terror) third act, with its message that life, the essential truth of life, that we are present here together, is almost impossible for the living to appreciate. Those people we saw going about being so decent to each other – they didn’t appreciate it, not really. And then they died, and (this is the kicker) lost interest in that very life that they were unable to appreciate while they had it. That’s a brilliant touch, saying that the dead don’t yearn for life – they learn indifference to it, and to focus on, of all things, the future.
The old saw says that if you want to send a message, use Western Union, and Our Town seems constructed to belie that line. Because the Stage Manager (played with fine assurance and a deep-buried darkness by Philip Goodwin), our guide to Grover’s Corners, will not stop talking to us, telling us what we’re supposed to know. He’s not a Brechtian alienation device – his reminders that this is a play, thanking the players and pointing out the limited scenery and so forth, don’t cause us to think about any underlying substructure of the society depicted; they just bring us back to, closer to, him. He is the bearer of a message, a message to the audience, a message that had to be dramatized for us to receive it, hence the play. He’s our Virgil, but he’s guiding us not through the afterlife but through this life, and that’s the message: this is life. Not this is the good life or real life or a life properly lived, and isn’t it a shame we’ve fallen away from it. Life.
The characters we see are decent, but they aren’t notably happy – that state we’ve all got an inalienable right to pursue. Some, like Julia Gibbs (a twinkle-eyed Marion Adler with a bit of the Widow Paroo in her manner) or Emily, her eventual daughter-in-law, project a certain lust for life, but not one that ever breaks the bounds of propriety. Others, like the editor of the local paper, Charles Webb (an quietly sardonic James Michael Reilly), have long since figured out that life is just to be got through, and are trying to put a good face on it. A few, like the choir master Simon Stimson (an angrily repressed Mark Dold) can’t quite manage that much. We never find out why Stimson kills himself, because it doesn’t matter why (though I have my suspicions about the source of that repressed anger); he’s had a heap of trouble, and to pry further would be to miss the point. Troubles are just part of life. Sometimes and for some people, an overwhelming part.
If there were more conflict in the town, this would merely be a distraction, would delude us into thinking that there would be happiness if that conflict were resolved. Ditto if there were any especial heroism. The most fundamental thing, our inability to be present in our lives, really present, cannot be solved. It’s part of the nature of life that it passes by. Not because we’re too busy doing this, nor because we aren’t doing that – life isn’t not lived because we aren’t living rightly or nobly or with sufficient excitement. It’s not lived because it’s beyond the capacity of the living, except for saints and poets. Sometimes.
Which explains why there are no props, almost no scenery; why most of what we see we see only in our own mind, assisted by the actors. The Stage Manager isn’t distracting us by taking us somewhere else; he’s asking us to be here, where we actually are. He wants us to listen to, and look at, him, as the deceased Emily wishes her family would look at her when she was alive. That’s his notion of what the theater is for. I don’t think it’s a quaint idea. Not yet, anyway.
Our Town plays at the Shakespeare Theater of New Jersey through November 17th.
I’m beginning to think that our failure at staging a compelling Romeo and Juliet means something. Over and over again, I attend productions crippled by a lack of chemistry between the leads. The most recent was the production currently running at Classic Stage downtown, which had such a long list of problems that I almost didn’t notice this most fundamental one, but honestly, I could ignore Mercutio (T. R. Knight) played as a speed freak, Romeo (Julian Cihi) wearing a Winnie-the-Pooh head for the sonnet scene, “sword fights” staged as fist-fights with packets of stage blood in the combatants’ fists, clichéd eruptions in Spanish and inexplicable eruptions into Serbo-Croatian (I think), Lady Capulet (Kathryn Meisle) conducting an illicit affair with a Tybalt (Dion Mucciacito) dressed as a circus lion tamer, and don’t know what else – I could ignore it all if only the love story played, even a little.
But it didn’t. Some people are blaming the leads, but I thought Elizabeth Olsen (who plays Juliet) was very powerful in “Martha Marcy May Marlene;” I don’t see any reason why should couldn’t have been a powerful Juliet. And besides, it’s not just this production. It’s a pattern.
Lack of chemistry between the principals was the biggest problem with this past summer’s Stratford production, directed by Tim Carroll, which was stylistically the opposite of Tea Alagic’s throw-the-kitchen-sink-on-the-gym-floor concept. And it’s apparently the problem with the Orlando Bloom/Condola Rashad version, directed by David Leveaux (which I haven’t yet seen). And with the new movie version, directed by Carlo Carlei in the sumptuous Merchant/Ivory-style version of “period.” And with the last Stratford production of the play, directed by Des McAnuff, which cleverly married period and modernity to try to have its cake and eat it, too. Even in the put-the-play-in-a-blender production that Sean Graney mounted in Chicago, there was more chemistry between Romeo and Mercutio than between the two titular lovers.
Has it really been discontented winter ever since the definitive R&J of the summer of love?
I don’t want to think so, but something is going on. There’s been a noticeable decline even since the days of Leo and Claire. I’m not such a bardolator that I’m above deciding that it’s just not that great a play, but it has been a cultural a touchstone for centuries, and it has been for a reason. I’ve argued before that social change didn’t kill the romantic comedy – and I stand by that argument. But, as I intimated in that piece, something does indeed seem to be killing Romeo and Juliet.
I wish I knew what.
Romeo and Juliet plays at Classic Stage Company through November 10th.
I want to emphatically endorse what my colleague Daniel Larison says here about the wrongheadedness of thinking about foreign policy in terms of rewarding friends and punishing enemies. It’s wrongheaded for all the reasons that Larison articulates, but it wouldn’t even work as a guide to relations between individuals. One of your neighbors is your friend, so you lend him money on a regular basis and never punish him by demanding he pay you back. Your other neighbor and you have a dispute about where the property line is, so he’s your enemy; you punish him by knocking over his garbage cans and refuse to mediate the property dispute outside of court. Who thinks this is the way to behave?
Of course, the better approach would be to say: the guy who keeps borrowing money and never paying you back seems to be taking advantage of your friendship – maybe he isn’t a friend anymore. (Or maybe he’s going through a really tough time financially, and he needs a more permanent solution than borrowing from you every other week – and if he’s a real friend, you should be able to approach him about the question.) And both you and your neighbor would benefit from settling the property dispute; it behooves you to determine whether a negotiated settlement is possible, and to incur the costs of going to court only if it’s clear it isn’t possible on any terms that you see as reasonable and if there’s a reasonable likelihood of victory in the courts.
The whole paradigm of “reward and punish” is derived from the game theory strategy of “tit for tat” which, indeed, reliably produces the best results in simulations. But those simulations are one-dimensional. The real world isn’t. India and the United States have common interests in fighting Islamist terrorism and in providing a strategic counterweight to China. But India has a fruitful relationship with Iran that they see no reason to sever. Should we “punish” them for that? How would we do that without also “punishing” them for being our allies against the Taliban? Should we have “punished” our ally, France, for not supporting our war in Iraq by not supporting their war in Libya? Or should we have supported our ally Britain for its staunch support in Iraq by joining the very same war against Libya? Should we have rewarded Russia for its support for our war in Afghanistan by dropping our support for Georgian membership in NATO? Or should we have rewarded Georgian support for the Iraq war by pushing harder for their membership in NATO?
That’s why when we talk about relations between states, we talk about common interests – indeed, the cliché line (paraphrasing Lord Palmerston) is that states have no permanent friends, only permanent interests. But even that isn’t true. Interests change with changes in circumstances. A China following an economic policy of autarky will have different interests from one following a policy of export-led development. An America that is a massive importer of oil will have different interests from an America that is a net exporter thereof. A West Germany divided from its Eastern half, and facing the massive Red Army poised to advance westward will have different interests from a united Germany protected from a reduced Russia by a buffer layer two states deep. Change, as Heraclitus said, is the only constant.
And I don’t see how anything is gained by saying that we should pretend nothing ever changes in the world for the sake of a purported friendship.