Reading while traveling

This is the latest edition (mailed out June 29) of my occasional e-mail newsletter, which you can subscribe to right here:

Hello, readers!

You travel to see and experience new things, and meet new people. But also to read a lot, right?

Reading is something to do while you’re in transit, when you’re wide-awake from jet lag at 2 a.m., and when you’re worn out from all that seeing and experiencing and meeting and need a break. It’s also a way to learn about the places you’re visiting. And if you’re someplace where the internet doesn’t work very well, and you’ve already downloaded a bunch of books on your Kindle or iPad, it’s something to do when you can’t get online.

So, yeah, I’m in China at the moment, and I’ve been reading a lot.

I left San Francisco last Wednesday morning and arrived in Beijing Thursday afternoon. About half of the difference was time zones, but that still left lots of hours in the air. I had meant to spend a bunch of that time writing a column, but the wifi on the plane wasn’t working and I didn’t have a plan for a column that wouldn’t require research and hyperlinks. Because I had committed to getting some work done, watching movies felt like cheating. So I read.

First I went through the big pile of newspapers I had collected in the United lounge at SFO (FT, NYT, WSJ, San Francisco Chronicle and San Jose Mercury-News). Then I started in on one of the books about China that I had downloaded onto my iPad: Michael Schuman’s Confucius and the World He Created.

Michael and I worked together at Time, although he was in Hong Kong and I was in New York and we only met once. Now he too writes for Bloomberg View, amongother places, and lives in Beijing with his wife, CNBC reporter Eunice Yoon. I was planning to have dinner with them Friday night, and figured it would be good form to have read his book first. As it turns out, dinner got moved up to Thursday night and I had to report to Michael that I was only 71% done, according to Kindle. But the remaining 29% included many pages of footnotes, so I was closer than I thought.

It was totally worth the effort — the book is an entertaining tale that gave me a much better sense than I had before of the constants in Chinese civilization over the past two millennia. Continuity is also a major theme of Tim Clissold’s Chinese Rules: Mao’s Dog, Deng’s Cat, and Five Timeless Lessons from the Front Lines in China, which was the ebook I moved onto after Schuman’s. I had wanted to download Clissold’s memoir of his early days in the country, Mr. China, which my Beijing-based friend Mina Guli had recommended, but that wasn’t available in electronic form. So I bought Chinese Rules instead, and discovered at the end of the first chapter that Mina — Clissold’s former business partner — was a major character in the book.

The two of them had spent several years, starting in 2005, helping Chinese companies get carbon credits under the United Nations’ Clean Development Mechanism. Clissold tells that story quite entertainingly, and deftly weaves in a lot of Chinese history. The five “Chinese rules” come across as awkward add-ons intended to package the book as management advice, but the rest is so good that it really doesn’t matter.

After I finished Clissold’s book I started in on Jonathan Spence’s Emperor of China: Self-Portrait of K’ang-Hsi, which assembles the scattered writings of the great 17th and 18th century Qing-dynasty ruler into something like an autobiography. I’ve started sleeping through the night and haven’t been on any more airplanes, so I haven’t gotten all that far into it yet. But this passage seemed worth sharing:

Usually, north of the Wall, we drink river water all the time, and it’s not harmful; but in summer one has to be careful of mountain streams if no rain has fallen for some time to wash away the impurities, just as one has to watch out for dysentery if the springs have been stirred up by rain. While on the march it’s dangerous to drink from the ditches at the roadside—they can give you cholera. If there’s no decent water to be found, you must just distill what there is, and make tea with it.

This was more than a century before John Snow figured out that a contaminated well in London was the source of a cholera epidemic and that boiling water was a good idea. The Chinese knew some stuff that Europeans didn’t.

Maybe they still do. Another book that I’ve been reading in actual paper is The China Model: Political Meritocracy and the Limits of Democracy by Daniel A. Bell, a Canadian political theorist who teaches at Tsinghua University in Beijing. In this age of Brexit and of Trump, that sounds like a pretty timely topic, so I’ll be meeting with him tomorrow. Expect a column, or two, out of that.

So far the columns I’ve written here have been on Brexit and the experts and on theGreat Firewall. Before I came to China I wrote about the inevitable weaknesses of corporate boards, the meaning of affluence, the non-zero-sum side of Uber,PreCheck and graphene, among other things.

I’m in China (including Hong Kong) for another week and a half. And I’m hoping I can finish another book or two while I’m here.

Till next time,

Justin

How to enjoy a Southern snowstorm

Birmingham 1993

That’s me in front of my apartment building in Birmingham, Alabama on Saturday, March 13, 1993 — the day after the Storm of the Century dumped more than a foot of glorious snow on a city not used to such stuff.

I remember that as a magical weekend. I spent it with a pack of friends who lived in the neighborhood, which was just off Highland Avenue on the city’s Southside. On the night of the storm most of us lost power, but one guy didn’t, so we hung out in his apartment for most of the evening till the lights began going back on elsewhere. The next day was all about tromping around Southside and throwing snowballs, then walking two miles to the Alabama Theatre in downtown Birmingham to watch Garrison Keillor’s Prairie Home Companion. None of us had tickets, but it didn’t matter. The inhabitants of Birmingham’s wealthy and hilly southern suburbs who did have tickets were mostly stranded in those hilly suburbs, so new audience members were needed. My main memories of the show were of Keillor using part of the segment where he reads notes from the audience to help arrange SUV-pools home through the snow, and of Emmylou Harris — who had spent the entire day making the normally less-than-three-hour drive from Nashville — making her way onstage about halfway through.

After the show we walked to one of the few restaurants open on the Southside, where Keillor then showed up and everyone applauded him, to his apparent discomfort. Before that we had stopped by the offices of my employer, The Birmingham News, where I shared a few Prairie Home tidbits with the reporter writing a story about it, and realized I probably should have been helping out all day. Still, hardly anybody was actually going to see the Sunday paper, there was of course no online edition to worry about, and I also don’t remember the storm requiring the kind of all-out disaster coverage that last week’s two inches of snow in Birmingham did, for the simple reason that nobody was on the roads when the snow fell. The weatherpeople had seen the storm coming days before, and all of Alabama battened down for it. There were complications: Hundreds of thousands of people lost power for a couple of days, and my memory is that while Jefferson County stationed the four snowplows at its disposal at strategic locations on the eve of the storm, it then sent the drivers home and they weren’t able to get to the plows the next morning. But it still took Emmylou Harris less time to drive from Nashville than it did to cross metropolitan Birmingham or Atlanta last Tuesday or Wednesday.

This time the storm was much smaller, but the weatherpeople totally whiffed on it and it happened on a Tuesday morning instead of a Friday night. It was also a colder-than-usual Birmingham snow day, meaning that nothing melted. Plus, people in Birmingham don’t have much experience driving in snow, snow falls infrequently enough that it makes no sense to have massive snow-removal infrastructure, and the city’s main commuter routes almost all involve curves and steep hills. Same goes for Atlanta, although I don’t know that the hills are quite as steep.

Yeah, maybe the response could have been organized better, and metro Atlanta is a bit of a public-transit disaster. But the only clear lesson I can take from this, and from every snowstorm I’ve ever been through, is that snowstorms are a lot more fun if you live where you don’t have to drive to get to the stuff that matters.

Joe Nocera’s Microsoft Trial Coverage

I have a column in the January-February Atlantic on the tendency toward monopoly of Internet businesses. The initial inspiration came from an executive education class that a bunch of us Harvard Business Publishing managers took at HBS in the fall. Felix Oberholzer-Gee and Bharat Anand taught us about modern media business models, and I was struck by how many of the terms and concepts they were using reminded me of the Microsoft trial 15 years ago.

Once I started working on the piece, I needed a refresher on the trial, and while I briefly thought about checking Ken Auletta’s book out of the library, I remembered liking Joe Nocera’s trial coverage in Fortune much more than Auletta’s in The New Yorker (Joe’s my friend, and I worked at Fortune at the time, so I’m biased, but his articles were better). So I went to CNNMoney.com and dug up the full collection. And now that I’ve gone to all that effort, I figured I should share. For any future students of the Microsoft trial, this is your one-stop Nocera shop (that is, until CNNMoney or Time Inc. goes and changes all the URLs) (Update: with Fortune and CNN no longer part of the same company, the URLs did in fact all change. The old URLs are, impressively enough, all redirecting to the new ones for now, but just in case I updated everything):

Microsoft Goes to Court Big Question: What If They Lose? Oct. 26, 1998

High Noon: Both sides came out with lawyers blazing as federal antitrust chief Joel Klein’s prosecutors went gunning for the Bill Gates gang. Behind the scenes at the Microsoft trial, Nov. 23, 1998

His Own Worst Enemy: Bill Gates flops on video. The judge rebukes a Microsoft lawyer. An Intel exec testifies for the feds. In round two of our coverage of U.S. v. Microsoft, software’s heavyweight takes it on the chin, Dec. 7, 1998

Spin City: As the Microsoft trial proceeds, the appearance of truth is becoming as important as the truth itself. At least, that’s what the spinmeisters for both sides seem to believe, Dec. 21, 1998

The Empire Strikes Back: As the antitrust trial slogged into the holidays, Microsoft and its CEO tried to make nice and plead their case to the press. But something didn’t quite ring true, Jan. 11, 1999

Muddied, But Unbowed: After three months of testimony, the government closed its antitrust case with two witnesses, one powerful, one pathetic. As Microsoft emerges to present its defense, one thing is clear: Gates & Co. have been embarrassed, but the government has not landed a knockout blow, Feb. 1, 1999

Hang-’em-High’ Boies: The government’s lawyer says he’s not a showman, but he’s putting on some performance, February 15, 1999

Witnesses in Wonderland: On trial in Washington, Microsoft saw its witnesses get skewered, its video crash, and its prospects for victory take a serious turn for the worse, March 1, 1999

Let’s Go To The Videotape: Armed with dueling tapes, the government and Microsoft quibbled over download times and modem speeds. Thanks to one strong witness, the software giant actually turned this sideshow into a moral victory — but was it too little, too late? March 15, 1999

Is Boies’ Paper Trail Microsoft’s Burial Ground? As the trial headed into a recess, Microsoft had one foot in the grave — thanks mostly to its own witnesses and its own documents, March 29, 1999

Microsoft And Me: With the trial on hold, talk of a settlement emerges. Our diarist heads to Redmond to see if the defendant really has compromise in mind, April 26, 1999

Microsoft Tries To Crack AOL’s Case: With the trial set to resume, our diarist returns to check in on a key deposition, and finds that Microsoft is still…well, Microsoft, June 21, 1999

The Big Blue Diaries As the trial resumed, the government produced a Microsoft competitor with a telltale journal. But did the evidence show a crime? July 5, 1999

Curtain Call: In the last act of the antitrust trial, Microsoft made another dogged attempt to plead its case. But the judge was obviously unmoved, July 19, 1999

Microsoft’s Trials: Thou Shalt Not Lie, Dec. 6, 1999

Post-trial:

Inside the Minds of Joel Klein and Bill Gates, May 1, 2000

I Remember Microsoft: Once computing’s red-hot center, Microsoft now has a tough time retaining its best and brightest employees. Here, some who left reflect on what they learned–and why they find life on the outside so much more alluring, July 10, 2000 (special bonus: current People magazine movie critic Alynda Wheat was the reporter/fact-checker on this one)

 

Ryan Lizza puts Myth of the Rational Market in the New Yorker, and other news

In that other blog I write, I have whined a teensy little bit about Paul Krugman and The Economist failing to throw in a mention of my book in their recent pieces on what went wrong with economics. So it was great to see, in Ryan Lizza’s epic account of economic decisionmaking in the Obama White House in this week’s New Yorker, a largely unnecessary reference to The Myth of the Rational Market:

Summers told me that, as a graduate student, he first studied claims, made famous by economists at the University of Chicago, that financial markets are always rational and self-correcting. He said, “I encountered a sentence that was much quoted: ‘The efficient-market hypothesis is the best established fact in social sciences.’ Any sentence like that is a red flag to an ambitious academic.” Summers produced a body of work that undermined the efficient-market hypothesis, or E.M.H. A memorable paper on the subject, which he wrote in the early eighties but never published, began, “THERE ARE IDIOTS. Look around.” According to Justin Fox’s recent book, “The Myth of the Rational Market,” that paper persuaded Fischer Black, one of the leading theorists of E.M.H., to essentially abandon his belief in the hypothesis.

I don’t know that I’d say Fischer Black abandoned his belief in the efficient market hypothesis. He just loosened it a lot. But I’m thrilled that Lizza, whom I’ve never met, saw fit to bring up the book. We have reached the point in Myth‘s sales trajectory where little mentions here and there seem essential to keeping it from fading into, if not oblivion, some place I’d rather not see it go. So little things, like a short review in the October Harvard Business Review that doesn’t appear to be available online to non-subscribers, or a rave in the Las Vegas Business Press, or a brief mention in the New Yorker, start mattering a lot.

In that vein, I guess I ought to mention that I’ll be on Leonard Lopate’s radio show on WNYC on Thursday, Oct. 8, and on Consuelo Mack’s WealthTrack on a PBS station near you next week.

How electorates and markets change their minds

I spent election night 1994 shuttling between the Montgomery campaign headquarters of Jim Folsom Jr. and Fob James, the candidates for governor of Alabama that year. Incumbent Democrat Folsom was a decent if unimpressive man. Republican James, who had been the Democratic governor about a decade before, was a know-it-all-who-didn’t-really-know-anything jerk. James won, Folsom lost, and I was kind of sad about that.

Then I got in my car and began the drive back home to Birmingham. I switched the radio to AM to listen to election news, and began taking advantage of that wonderful property of AM in the middle of the night to listen to election news from all over the country. The story was similar on pretty every much station I tuned to. Democrats who had been in office for decades were being turned out everywhere.

My personal politics are all over the place, but I nonetheless found the news thrilling. The House of Representatives, in the hands of the same ossified party since the mid-1950s, had been given new bosses.

Last Tuesday night’s turnaround was less historic and dramatic, but I found it similarly exciting. I’m always very dubious of claims that election results represent “the will of the people,” given how conflicted and ill-defined and malleable that will tends to be. But every once in a while the electorate expresses in pretty clear terms its dissatisfaction with the way things are going. And therein lies the beauty of a functioning democracy — a nation can change course, can change its mind, without violence or other disruption.

Financial markets are capable of changing their minds, too. When they do it on a micro-level, differentiating between individual companies or securities (or even individual political candidates in something like the Iowa Electronic Markets), it’s a cleaner, more efficient process than an election. But when markets really need to change course, when investors’ expectations about the future are suddenly dashed in an across-the-board way (like in the U.S. in 1929-1931, or Asia in the late 1990s) the result can be a really big mess. There are a few things, it turns out, that politicians actually handle better than free markets do.

Here Is New York

Mrs. By Justin Fox, whom some of you know as Allison Downing, is deeply involved in the fundraising operation at Manhattan’s P.S. 163, the fine educational establishment where The Boy attends second grade.

One of the many P.S. 163 fundraising efforts involves selling books in front of the school on Fridays, when the 97th Street sidewalk is also host to a wonderful farmers’ market. Friday of the week before last was an especially beautiful day. Many books were sold. And the niece of a recently deceased resident of a nearby apartment building stopped by, wondering if she could offload some of his books. She was in from Illinois, and was more than a little daunted by the prospect of clearing out her uncle’s cluttered apartment in a city with which she was entirely unfamiliar.

By the end of the day, several loads of books had been hauled down to the sale, and another P.S. 163 parent had effectively become co-executor of the man’s estate. Allison was up in the apartment a week later, helping clear things out. While there, she found a first-edition copy of E.B. White’s Here Is New York, a book I’ve been meaning to give to her ever since we first moved here in 1996, but which has a nasty habit of disappearing from stores around Christmastime.

Writes White:

The oft-quoted thumbnail sketch of New York is, of course: “It’s a wonderful place, but I’d hate to live there.” I have an idea that people from villages and small towns, people accustomed to the convenience and friendliness of neighborhood over-the-fence living, are unaware that life in New York follows the neighborhood pattern. The city is literally a composite of tens of thousands of tiny neighborhood units.

We’ve been living in this particular tiny neighborhood unit for a bit less than three years now. At the farmer’s market last Friday I saw at least three people I know (not counting the people selling stuff, whom I feel like I know although I’m sure we customers are all just a blur to them), and talked one of them into buying a couple of porgies (it’s a kind of fish) to be baked later in a bed of kosher salt. Allison sold books much of the day, when she wasn’t helping clean out that apartment. Over the weekend we went to The Boy’s soccer game in Central Park, which I coached, attended a college football game (Columbia vs. Princeton) where we met up with friends, went to two (!) church services, had lunch with friends, and went out for a drinks with other friends who also happen to be our neighbors. That we didn’t have anybody over for dinner was mainly a product of Saturday night being our 11th wedding anniversary.

I’m familiar with the whole “Bowling Alone” argument, that we Americans have been loosening the bonds that tie us together and thus squandering precious social capital, or something like that. But I think that’s a trend that played itself out a few years back, a product of suburbanization, both spouses going to work (which isn’t a bad thing in itself, but leaves less time for bowling leagues), idiotic urban “redevelopment” efforts, and the economic pressures that have left American livelihoods less secure (even if, on average, far more bounteous) than they were before the 1970s. New York in 2006 seems headed in the opposite direction. I don’t bowl, but if I did, I don’t think I’d be able to get away with doing it alone.

This is what happens when you mess with FASB

I’ve been meaning for a while to write a tongue-in-cheek post about how the real reason Joe Lieberman lost to Ned Lamont was his wrong-headed stance on stock-option expensing in the 1990s.

When the Connecticut-based Financial Accounting Standards Board proposed in the early 1990s that options grants be counted as a cost and subtracted from earnings, Lieberman led the successful charge in Washington to bully FASB into backing down. Among his most vocal partners in accounting crime was California’s Barbara Boxer, although I’m a little bit more sympathetic to her stance because it was pretty much impossible to find anyone in her (Northern) part of the state in the 1990s who wasn’t brainwashed into thinking that options had magical economic powers and expensing would kill the magic. Only after the corporate scandals of the early ’00s was FASB finally able to push through with options expensing (and even then Congress might have thwarted it if not for the resolute stance of, of all people, Alabama Republican Richard Shelby, chairman of the Senate Finance Committee).

It turns out, though, that I’d been beaten to the punch. Jack Ciesielski today alerted readers of his often-entertaining accounting blog to an Aug. 9 post by economist Dean Baker on the topic.

Wrote Baker:

There may not have been a single person in the state of Connecticut who voted against Senator Lieberman yesterday because of his harassment of FASB. Other issues loomed larger. But those who think that honest accounting is essential to the working of the economy might believe that some justice was done in this election.

It turns out Baker wasn’t even the first to bring this up. On Aug. 6, a Daily Kos poster named Treebeard offered a detailed account of Lieberman’s role in the options travesty. So maybe the issue did swing a few votes (although I guess any Connecticutter reading Kos was already voting Lamont). In any case, watch out, Barbara Boxer. The accounting purists may be coming to get you.

Germans chanting “U-S-A!”

I had hopes of blogging during my World Cup visit to Germany a week-and-a-half ago, but the demands of looking after a seven-year-old on the road, plus the fact that I forgot my laptop and thus had to share computer time with a 13-year-old in possession of gaming software, got in the way of that. And then I got sick after my return.

So it’s now a little late to weigh in on the U.S.-Italy match in Kaiserslautern, except to say this. Much has been made of the fact that the U.S. fans outshouted the Italian ones, and that this cheering advantage may have played a role in the result (it certainly seemed to reflect the referee’s calls over the last 20-30 minutes of the game). This was a great thing, one of the few bright spots of this World Cup for the U.S. But it wasn’t because there were more dyed-in-the-wool U.S. supporters on hand than Italian ones. It was because the neutrals — the Germans, that is — turned on the ref and the diving Italians toward the end of the first half.

manyflagmanThe Germans with tickets to the World Cup matches not featuring their country’s team have endearingly adopted a policy of rooting for the underdogs, and in particular for the teams least likely to bring tens of thousands of supporters. At the Netherlands-Ivory Coast match we attended, lots of the Germans had gone so far as to buy Ivory Coast shirts. With U.S.-Italy, things were of course more complicated. We were the soccer underdog, but are the overdog in so many other ways that the Germans weren’t going to be comfortable dressing up in red-white-and-blue. Some, like the fellow pictured here, split the difference. Others dressed as disinterested civilians.

But once the game got going, and the Italian team played as its wont (defensively, cynically, etc.), sentiment shifted toward the Americans. We were sitting in a section that seemed to be filled mostly with locals, supporters of the team that usually occupies the stadium, FC Kaiserslautern. And at some point around the middle of the game, they all began chanting “U-S-A! U-S-A!” They did get bored with that after a while, and began chanting “Deutschland!” and singing “Wir fahren nach Berlin” (We’re going to Berlin) instead. But they kept cheering U.S. attacks and whistling derisively at the Italians.

It may not be much to be able to claim that your country’s soccer team is more beloved (outside of Italy) than Italy’s is. But these days we Americans ought to take whatever we can get.

Okay, so maybe we’re not ready for globalization

After Monday’s debacle against the Czech Republic, I seriously considered writing another fortune.com column using the World Cup to make exactly the opposite point as last week’s plea for U.S. optimism in the face of globalization.

Landon Donovan was too much of a wimp to stick it out at Bayer Leverkusen and learn how to be tough rather than just talented, I could have written. DaMarcus Beasley’s lack of worldliness is dooming him to second-rate status at PSV and has halted his development as a soccer player. We Americans can’t hack it in a world that doesn’t revolve around us. Those Czechs, meanwhile, all have to go abroad and learn new languages if they’re to get anywhere in the sport. They’re the ones who are ready for globalization. Or something like that. That’s the great thing about opinion journalism. Starting with a given set of facts, you can make almost any point you want.

Back in the saddle

I just did my first bit of Fortune work in a month. It’s a web column on the World Cup and U.S. economic competitiveness. Kind of a stretch, I know. But I needed to make some use of all those hours I spend reading soccer news online every day, right?

I’ve been off working on my book. I had initially thought I might post comments about whatever chapter or subject I was working on each day, but that didn’t happen. I got into full I Am a Book Writer and I Cannot Be Interrupted mode. Not that it got me to finish the thing. I’ve still got some big empty spots to fill toward the end. But I’m getting there. And maybe, now that I’m back to the daily interruptions of life at Fortune, I’ll actually get around to discussing the book occasionally here. Which was the whole idea of this blog in the first place.