The Blog

Susan Pease Gadoua: 5 Signs Your Spouse May Be Hiding Money

2012-05-16T08:30:30Z

Whenever a client tells me that her husband has said, "We don't need lawyers," I become wary. When he is self-employed, I become downright suspicious. If his career is in high finance, my suspicion grows twofold.

My reaction is based on years of seeing this same pattern play out. I'm not a financial divorce specialist, but I am an experienced divorce therapist and one of the main reasons I began working with people (primarily women) in this realm is that I saw the less financially savvy spouse or the "outspouse" (the term used by the court for the spouse who does not own the business from which income may be hidden) fall victim to the spouse in charge of the finances.

All too often, the reason the knowledgeable spouse doesn't want attorneys or accountants involved is that they don't want their schemes to be uncovered.

Divorce is hard enough, especially if an affair is involved, but add to it an additional layer of deception and betrayal and it can make the trusting spouse wonder if the entire marriage had been a sham. It's nothing short of devastating.

People hide income to avoid paying taxes -- a federal crime -- and, during a divorce, people hide income and assets to avoid paying higher child and spousal support.

In March of this year, a new book came out by forensic accounting expert, Mark Kohn. The book is entitled How They Stash the Cash and it is filled with anecdotes from some of Mark's cases. The book provides the tools and methods used by most people when they hide income. These include having two sets of books, hiding files in secret places, and funneling money into hidden business entities.

Mark feels strongly that hidden income can be uncovered and the outspouse can receive his or her fair share of income.

If you are concerned that your spouse is covering up finances, consult with your attorney first to make sure that a search would be worth your time and money. Forensic accountants can be quite costly so you'd need to weigh whether you'd want to pursue $20,000 in assets if it was going to cost you $10,000, for example. Some people would absolutely pursue that while others may not feel it's worth it.

Some Red Flags to Watch For

1. If your spouse is self-employed and/or more knowledgeable about the family finances than you are and is overly averse to using attorneys in your divorce.
2. Look at the lifestyle and compare this with the reported income. If there is a mismatch, further investigation is warranted.
3. Look at the ratio of living expenses to income. If a mortgage payment is 75 percent of the reported income, it's a good bet that there is hidden income.
4. Observe whether a business owner has multiple tax entities that do not seem to be necessary.
5. Observe whether there are unusual business expenses. In one of Mark's cases, a business expensed $15,000 for a transplant of four trees -- but the business operated in a treeless industrial park. Upon further investigation, it was revealed that this was a personal expense.

Why Doesn't the IRS Catch These People?

According to Mark, there are four main reasons that the IRS does not usually uncover hidden income, which is now estimated to amount to $2 trillion, annually:

1. The IRS does not hire private investigators and issue subpoenas at early stages of their review.
2. The IRS is discouraged from cases in which the taxpayer already has large net operating losses, which often is the case when income is hidden. (Because the true income is hidden, the business reports losses.)
3. The IRS does not have access to lifestyle information, from which a discrepancy between lifestyle and income could be noted.
4. The IRS does not usually investigate cases when a taxpayer is already reporting high income.

Mark's advice for those who believe their spouse is hiding assets/income:

1. Hire a private investigator. While private investigators can be expensive, they are useful in obtaining physical observations or documentary support.
2. Dig through the garbage -- a treasure trove for people looking to find hidden income.
3. Search for hidden files. Hidden income usually manifests itself as income that is hidden from the IRS, but it usually is not completely hidden. Real numbers usually exist somewhere but you may have to hire an expert to find them.

Mark Kohn's book, How They Stash the Cash, can be ordered in print or kindle editions from Amazon.com.

Iara Lee: The Only True Revolution in Syria Is Nonviolent

2012-05-16T02:53:00Z

The present conflict in Syria is a rather ugly mutation of the Arab uprisings that erupted across the Middle East and North Africa over a year ago. As in other countries, the uprising in Syria began with peaceful demonstrations for democratic reform, only to devolve into a violence that has now brought the country to the brink of a full-blown civil war. With a regime that still exercises considerable control over the population, the prospects of such a war are grim, and the nature of the conflict is likely to be protracted, complicated, and bloody, with an equally uncertain aftermath if and when the regime falls.

What the Assad regime doesn't realize (or perhaps does understand, cynically) is that the refugee crisis occurring is only fanning the flames of conflict. The types of "extremists" he decries are born in refugee camps, and the camps I've visited across the border, in southern Turkey, are no exception. Tens of thousands of people have fled their homes with fear, sadness, and hatred in their hearts, and justifiably so: Most have witnessed unspeakable brutality; watched their friends and family killed, raped, or disappeared; and, in the face of such horrors, see no room for negotiating with the regime anymore. And so they find themselves abandoning the peaceful revolution and supporting the Free Syrian Army (FSA), a nebulous entity composed of defected soldiers, angry civilians, and, sometimes, plain criminals. The FSA began as a collection of soldiers who refused to fire on peacefully protesting civilians, who then left the army and began to form militias aimed at protecting these demonstrators. Soon, this purely defensive function gave way to small raids and ambushes of government troops, thereby fuelling the regime's claims that protestors are not peaceful, and that they cannot be dealt with peacefully.

Allowing violence to overtake the revolution would represent a wholesale descent into passion, an abandonment of strategic thought into what could be seen as miniature version of a regime itself, a regime that brutalizes, lies, and has lost its humanity altogether. Such a revolution would not bode well for a successor regime. Already there is some evidence of this taking place. Rumours abound that tell of more desperate members of the opposition mimicking their ugly opponent: creating and disseminating false videos and propaganda, staging offensive operations against government targets, and encouraging more violence, when their goal at inception was to lessen violence, not inflame it.

While most Syrians desire a complete return to the peaceful revolution that began over a year ago, the regime seems quite content with an armed opposition, and rightly so: Assad has been the recipient of billions of dollars in sophisticated Russian military hardware, the kind that no rebel group, or at least not this rebel group, could hope to match. This also makes a Libya-style NATO intervention (as some seem to desire) much more complicated, and not at all productive in bringing about a truly peaceful, free Syria. A military solution, for all practical purposes, does not exist, at least not without destroying the nation it hopes to liberate.

Amidst the violence, there are signs of hope. Women travel through checkpoints from Damascus to Homs, smuggling medicine under their abbayas; classrooms are improvised wherever they can be found so that children can continue their education despite the disruptive violence surrounding them; children write poetry and make drawings of a dictator-gone-mad who, contrary to mythology, does not stand up to the Israelis or to the Americans but uses his tanks to kill his own people. Peaceful resistance does not mean no resistance, nor does it mean simply paper banners in the street. Many refugees that I spoke to, private citizens of Syria with no interest in political power, think peaceful direct action, like general strikes, are capable of paralyzing the country and wreaking havoc on the regime. Should the revolution return to its peaceful origins, it is likely to grow in size and intensity. Bashar al-Assad enjoys very little popularity among his people, but it is the violence -- of the regime and the opposition both -- that has alienated so many into remaining silent.

Such peaceful resistance would be doubly effective in conjunction with unanimous diplomatic force, which would require that Russia and China participate in sanctions against the Assad regime. Of course, this is where the conflict becomes bigger and more complex, as Syria is itself the unfortunate pawn in a larger power struggle. The Assad regime's affiliation with Iran, and their relationship to the two ascendant superpowers in the world (Russia and China), put them at odds with the reigning (and waning) superpower, the United States, and its chosen successor, Israel. The geopolitical context of the Syrian crisis is now causing rifts among international activists who are normally unified in their opposition to American imperialism and Israel's policies toward Palestine but now find themselves on opposite sides of the divide when it comes to Syria and the Assad regime. I find this baffling. In my mind, if you believe in a free Palestine, you must also believe in a free Syria. For all his bluster, what has Assad really done for Palestinians? The Palestinian-Syrian refugees I spoke with were as anti-Assad as any native-born Syrian, and it seems that this is because they recognize that oppression is oppression; it lacks any color, race, or religion and is its own language.

With the continued perseverance of the Syrian people, the fall of Bashar al-Assad is inevitable. But in order to ensure this outcome, they must transcend the confessional, political, economic, and ethnic boundaries that the Assad regime is so keen to use against them, and rise as a united whole. But perhaps most important of all is that they do so without resorting to the same violence that characterizes their opponent. The use of violence will represent a failure of the revolution and a victory for Bashar al-Assad and the false narrative he has created.

Iara Lee is currently in post-production on her new documentary, The Suffering Grasses, which was filmed at the Syria-Turkey border.

PHOTOS:

About the film: Over a year later, with thousands dead and counting, the ongoing conflict in Syria has become a microcosm for the complicated politics of the region and an unsavory reflection of the world at large. Against the backdrop of the Arab Spring, NATO's toppling of Muammar Gaddafi in Libya, and the complicated politics of the region, this film seeks to explore the Syrian conflict through the humanity of the civilians who have been killed, abused, and displaced to the squalor of refugee camps. In all such conflicts, large and small, it is civilians -- women and children, families and whole communities -- who suffer at the leisure of those in power. While focusing on the plight of those caught in the crossfire of the hegemons, we seek to unravel the conflict by exploring the motivations of its actors: the Ba'athist regime of Bashar al-Assad, the Free Syrian Army, and other geopolitical players like the United States, Israel, Russia, China, Iran, Lebanon, Turkey, and the Gulf countries. When elephants go to war, it is the grass that suffers. This is a film about the elephants, but made for the grasses.

Arianna Huffington: My Conversation With The Dalai Lama: The Convergence Of Science And Spirituality (Part 2) (VIDEO)

2012-05-16T00:35:26Z

London -- At a lunch in the crypt at St. Paul's Cathedral before the Dalai Lama received the Templeton Prize on Monday, I was seated next to Canon Mark Oakley. "We need to move beyond relevance to resonance," he said.

It was a call to move beyond the shallows to the depths, beyond the passing novelties of the moment to the echoes of the soul. The Canon summed up the vicious circle we too often find ourselves caught in: "We are," he said, "spending money we don't have on things we don't want in order to impress people we don't like."

To find the peace of mind that alone can replace this aimless search which has led to an epidemic of stress, anxiety, and drugs -- legal and illegal -- the Dalai Lama is looking to science (specifically neuroscience) to convince a skeptical, increasingly secular society of the power of contemplation and compassion to change our lives and our world.

As he wrote in his 2005 book, The Universe in a Single Atom: The Convergence of Science and Spirituality:

The great benefit of science is that it can contribute tremendously to the alleviation of suffering at the physical level, but it is only through the cultivation of the qualities of the human heart and the transformation of our attitudes that we can begin to address and overcome our mental suffering... We need both, since the alleviation of suffering must take place at both the physical and the psychological levels.

It is for this decades-long passion to bring together science and spirituality that he was awarded the Templeton Prize, a $1.7-million honor given to "entrepreneurs of the spirit" who make "an exceptional contribution to affirming life's spiritual dimension, whether through insight, discovery, or practical works." The prize, the motto of which is "how little we know, how eager to learn," has been given annually since being established in 1972.

In awarding the Templeton Prize to the Dalai Lama, the organizers cited his "engagement with science and with people far beyond his own religious traditions," and the fact that "for the past 25 years, he has focused on the connections between the investigative traditions of science and Buddhism and encouraged serious scientific investigative reviews of, for instance, the power of compassion and kindness and its broad potential to address the world's fundamental problems."

Contained within that citation are three themes I focused on in my interview with him: his work combining scientific investigation with religious exploration; his thoughts on compassion; and his techniques for increasing our capacity for it, including, of course, sleep!

Of course, these three themes are all inextricably bound together. According to the Dalai Lama, science and Buddhist thought share many things:

On the philosophical level, both Buddhism and modern science share a deep suspicion of any notion of absolutes. ... Both Buddhism and science prefer to account for the evolution and emergence of the cosmos and life in terms of the complex interrelations of the natural laws of cause and effect. From the methodological perspective, both traditions emphasize the role of empiricism.

While the Dalai Lama contends that religious claims must give way to the empirical findings of science, he also believes we must "ensure that science never becomes divorced from the basic human feeling of empathy with our fellow beings."

Or, as he put in his 2004 book, The Wisdom of Forgiveness, co-authored with Victor Chan, "To utilize technology more constructively, inner peace is the most important factor. That's the main reason to have closer relations between modern science and ancient human thought."

When the two come together, the result is the cultivation of connection -- of empathy and compassion. What's extraordinary about the Dalai Lama is his capacity for empathy in the face of all that he's endured -- sustained onslaughts not just against his people but against him, as well. China, of course, has been brutally occupying his homeland since 1951, and he has been in exile since 1959. The list of human rights abuses against the people of Tibet is appallingly long, and those abuses continue to this day. According to the Human Rights Watch, China responded to a 2008 uprising in Tibet by "brutalizing detainees and torturing suspects in custody." In the past year alone, some 30 Tibetan monks have self-immolated in protest.

And though the Dalai Lama has been in exile for over 50 years and strictly advocates non-violence, such is the power of his teachings that the Chinese government treats him as an enormous threat. Among the attacks it has made on him are claims:

That he encourages the monks to set themselves on fire: "The Dalai Lama is deliberately encouraging Tibetans to self-immolate."

That he enjoyed the deaths of Chinese earthquake victims: "Sources said that the Dalai Lama was in inexplicable ecstasy."

That he's like Osama bin Laden: Obama meeting with the Dalai Lama was as if China met with "Osama Bin Laden and Al-Qaeda leaders."

That he's like Hitler: "The Dalai Lama's speeches can't help but make people think of the fanatical Nazis during the second world war."

That he loves Hitler: Because he's said that his rules of compassion must apply even to Hitler, the official news agency Xinhua says he "cherished the memory of Hitler."

Despite this relentless demonization, he's remained among the world's foremost practitioners of the cultivation of compassion.

"We have to make every effort to promote human affection," he says. "While we oppose violence or war, we must show there is another way -- a nonviolent way. Now look at humanity as a whole. Today's reality: whole world almost like one body. ... Our future depends on global well-being."

At the heart of this approach is the Buddhist belief in the mutability of consciousness -- the idea that we can, through certain practices, change our inner being. "It means that the cultivation of loving-kindness can over a period diminish the force of hate in the mind," he explains. Unlike our physical qualities, "the qualities of the mind have the potential for limitless development," which means that "it is possible for a mental quality like compassion to be developed to a limitless degree."

How can this be done? One way is through the practice of mindfulness, focusing one's mind by focusing on a single process, most commonly breathing. Another technique is one he calls "giving and taking." This is how he describes it: "I make visualization: send my positive emotions like happiness, affection to others. Then another visualization. I visualize receiving their sufferings, their negative emotions. I do this every day. I pay special attention to the Chinese -- especially those doing terrible things to the Tibetans."

One of his goals in bringing science and Buddhism together is to study and enhance the transformative effects of these practices. Since 1987, he's been organizing dialogues between scientists and Buddhist thinkers and practitioners on a range of subjects, from physics and astronomy to empathy and compassion.

"These are times," he says:

...when destructive emotions like anger, fear and hatred are giving rise to devastating problems throughout the world. But I believe we have a valuable opportunity to make progress in dealing with them, through a collaboration between religion and science...

Experiments have already been carried out that show some practitioners can achieve a state of inner peace, even when facing disturbing circumstances. The results show such people to be happier, less susceptible to destructive emotions, and more attuned to the feelings of others. These methods are not just useful, but cheap: you don't need to buy anything or make anything in a factory. You don't need a drug or an injection.

So how can we spread these ideas? How can we scale them to meet the huge challenges we're facing all over the world? A good way to start is by trying to emulate this remarkable man's approach to living: "The important thing is that my daily life should be something useful to others," he said last year. "As soon as I wake up in the morning, I shape my mind. The rest of the day, my body, speech, mind are dedicated to others."

Call it step one on our journey from "relevance to resonance."

Watch my conversation with the Dalai Lama here (with a video slideshow here).

Add your voice to the conversation on Twitter: twitter.com/ariannahuff

Edward Zwick: Chut Wutty and the Heroic Fight Against "The Resource Curse"

2012-05-15T23:52:25Z

On April 26th, a Cambodian environmental activist named Chut Wutty was killed by military police. Two journalists present at the incident reported that Wutty was shot after refusing to hand over photographic evidence he had been collecting. A subsequent government inquiry -- open and shut within three days -- not only failed to address the details of his death, but also prohibited further inquiry into the issue Wutty was investigating: namely, the systematic stripping and selling-off of Cambodia's forests.

Wutty was part of the Prey Lang Network -- a grassroots group of activists fighting to save the Prey Lang forest, Southeast Asia's last remaining intact lowland evergreen forest. His death is the latest episode in a long and sorry history of Cambodian dissenters being intimidated or even silenced by a kleptocratic elite ransacking the country's natural resources for personal gain. Home to the Kuy indigenous people for centuries, the Prey Lang forest possesses significant biodiversity value as well as being a critical source of water for the country's rice-growing areas. In fact the battle the Kuy are fighting against the march of logging, plantations and mining companies into the forest holds an uncanny resemblance to the plot of Avatar -- and in what might otherwise be a charming example of life imitating art, they have even tried using the film to bring media attention to their cause...

Except this is real-life. And the bullets are real.

Cambodia has a sad history of state abuse and violence, but Wutty's death and the attention it has begun to receive provides an unprecedented opportunity for the international activist community to pressure the Cambodian government to reform. A growing chorus of NGOs -- including Global Witness -- are calling for a full inquiry into Chut Wutty's death, reform of Cambodia's notoriously corrupt natural resource sector, and an end to the persecution of those who defend forest and land rights. The time has come for the Cambodian government to afford its citizens a meaningful say in what happens to the country's resources; rather than line the pockets of a small, corrupt elite, the riches of Cambodia must serve to lift its people out of poverty.

This problem -- and its possible solution -- is not as distant as it might appear. With savagely ironic timing, on the day Wutty was killed, USAID announced a $20m grant to "support forests and biodiversity" in Cambodia. The potential for this kind of aid money as a powerful force for good has too long been squandered on landmark conservation projects, many of which have been fatally undermined by the Cambodian Prime Minister and his cronies who habitually plunder resources that might otherwise drive development. To make matters worse, little of this money ever reaches the kind of grassroots organizations Wutty worked with. As a mark of respect for his work -- and to signal our desire for change -- we as US citizens must call on our government to ensure our tax dollars be used to support such groups. The forests they are fighting to defend are not only their homes, but ours as well. They are nothing less than the essence of the natural world.

The work of the Prey Lang group is but one example of the heroic and dangerous work being done every day by activists around the world in the essential fight against "the resource curse." We must let them know they are not alone. Making sure our aid money reaches its target is the right place to start.

Edward Zwick is a member of the Global Witness Advisory Board.

Mohamed A. El-Erian: The Global Economy: What the Next Three Years Will Look Like

2012-05-15T23:34:00Z

Editor's note: The following post is adapted from a document originally sent to clients of PIMCO, an investment firm led by William H. Gross and Mohamed A. El-Erian. It summarizes discussions that took place at the PIMCO 2012 Secular Forum, an annual event that brings together investment professionals from PIMCO's 12 offices around the world with thought leaders from outside PIMCO to discuss and debate global financial trends. Here El-Erian relays their collective attempt to lay out for PIMCO's clients what the next three years will look like in the global economy.

This year's Secular Forum was particularly interesting and, also, very challenging. For 2 ½ days, we debated a range of issues, with lots of time spent on the familiar -- such as the twin problem of too much debt and too few jobs, and the related austerity versus growth debate -- but also on the less prominent but equally consequential -- including the game theoretics of large debt overhangs, as well as how technology is redefining economic, political and social interactions. In the process, we iterated to findings that, we believe, are both consequential and actionable for investment strategies including ... but, wait, I am trying to fast-forward a summary write-up that warrants proper introduction and context.

The Secular Forum has proven enormously important for PIMCO's ability to deliver consistent value to you, our clients. Indeed, if we were to pick the handful of factors that have enabled us to serve you well for more than 40 years, this annual event would certainly be among them. It gathers investment professionals from PIMCO's 12 offices around the world. Collectively, we engage in a lively debate aimed at identifying the major trends that will play out over the next three to five years (and, critically, not what should happen but, rather, what is likely to happen). Think of the outcome as providing medium-term guardrails for where and how we invest the funds that you have entrusted to us.

It is never easy to take an individual -- let alone a group -- out of the day-to-day routine and focus on issues that are not urgent now, but will prove both urgent and important over the next few years. To help us do so, we turn each year to thought leaders from outside PIMCO to act as catalysts and to challenge our views, thus also reducing the risk of groupthink; and again this year we were privileged to interact with terrific thinkers who brought lots of interesting ideas to the table. We also listened to our brilliant new class of MBAs and PhDs; and, once again, they provided us with valuable, fresh and provocative perspectives. And all this was mixed with quite a bit of background work and back-and-forth discussion.

Context

To provide context for our discussions, we explicitly started with our priors -- the conclusions of previous Forums, adjusted for recent developments, new information and additional analysis.

A year ago, PIMCO concluded that the world would continue to exhibit multi-speed characteristics. Specifically, advanced countries would appear to cyclically recover. But, with lagging policy mindsets, growth would prove insufficient to overcome problems of unusually high (and persistent) unemployment, large budget deficits, rising debts, and worsening income and wealth inequality. For some countries with acute economic and balance sheet stress, we postulated the "virtual certainty of at least one (and probably more) sovereign debt restructurings" during our secular horizon.¹

We painted a different picture for emerging economies. Because they are powered by higher growth, we argued that they would continue to close the global income and wealth gap, lifting millions more out of poverty in the process. We recognized that this would not be linear as countries confront inflationary concerns, disruptive surges in capital inflows and tricky internal transitions (including what Mike Spence, Nobel Laureate in Economics and author of the recent book on "The Next Convergence," calls the "middle income transition").

At the global level, we anticipated that the international monetary system would experience stress in accommodating these historic global realignments. Remember, not only would emerging economies grow faster, but they would also have an increasing and ultimately defining influence on the structural behavior of the global economy. Yet, due to deeply entrenched entitlement mindsets in advanced economies and outdated mechanisms in multilateral organizations, global governance would find it difficult to catch up with the evolving new reality, let alone get ahead of it.

This, of course, is what PIMCO had labeled the "new normal" back in early 2009 -- one that spoke to delevering in advanced economies, structural imbalances, and global convergence.² It thus portrayed, as reiterated in last year's write-up, a post-2008 global financial crisis world that "heals only slowly and unevenly," "transitions ... in a rather messy and uncoordinated fashion," becomes "increasingly fragmented in terms of cognitive recognition," and in which "social cohesion is uneven."

Our medium-term baseline was seen as being subject to two-sided risk scenarios. It could tip into a much better equilibrium if policymakers came up with three "grand bargains" -- in Europe, the U.S. and China. But it could also fall victim to a more rapid and disorderly delevering.

These two scenarios were important enough for us to argue for a gradual morphing in the distribution of expected outcomes that underpins many investors' behavior (and analytical constructs): away from the traditional bell curve that exhibits a dominant mean and thin tails (both very comforting), to a flatter distribution with much fatter tails that, in certain circumstances (Europe), could even go bimodal.

Much of what has transpired over the last 12 months is consistent with these priors. Indeed, at times it has felt as if the fast-forward button had been pressed on our secular themes.

In the run-up to the Forum, we found longer-term issues featuring more prominently in our cyclical discussions, as well as in the deliberations of the Investment Committee (which meets four times a week for two to three hour sessions). And with incrementalism dominating way too many policy reaction functions, these developments also help explain why the world/markets now face potential inflection points over the next three to five years -- some probable and others possible.

Key Issues

It did not take us long last week to figure out that this would be one of the more challenging Secular Forums. After all, we were analyzing a global economy buffeted by complex realignments yet lacking proper historical precedents. Meanwhile, monetary policy is in full real-time experimentation mode, political anti-incumbency is growing, and extreme polarization is amplifying rising social tensions. And if this were not enough of a complex cocktail, let us not forget what our colleague Ramin Toloui called the disparate adherence to "alternate realities." The resulting disagreements -- which, increasingly, cover the past, present and future -- further undermine any convergence to a common analysis of what ails individual countries, let alone the vision and sense of shared responsibility to solve it.

This combination results in what Jerome Schneider described as a self-reinforcing cycle of largely reactive partial responses, subsequent complacency and recurrent localized crises. The longer this persists, the greater the probability of a series of market inflection points in the next three to five years. Indeed, it should come as no surprise that both policymakers and economists are struggling with what has been oversimplified into the growth versus austerity debate. And the resulting confusion, together with a pronounced tendency for politicians to bicker and dither, has made the problems more complex and the solutions more demanding.

In such a world, we believe that it is particularly important to differentiate well between what one knows with a high degree of both foundation and conviction (the "knowns"), and where sufficient knowledge and confidence can only be built through additional data and analysis ("known unknowns"). This should be combined with enough intellectual agility to change the composition as more information become available; and also with the operational responsiveness required to evolve investment strategies accordingly.

Knowns

The knowns speak to the likely persistence of what has become a familiar combination for too many advanced economies -- too little growth, too much debt, high joblessness (particularly among the young and long-term unemployed), excessive political polarization and growing calls for greater social justice.

Given current policies, none of these are likely to go away any time soon absent a major crisis and/or a big political pivot. Moreover, the adjustment processes in certain countries (with Greece being the lead example) have already been undermined by "policies that hurt but don't work," a phrase used by British politician Ed Miliband in a different context. As such, they risk a frightening economic, financial, political and social implosion.

This reality will continue to play out most distressingly in a few European countries where the institutional setup is already under strain. Indeed, politicians will find it increasingly difficult to reconcile what Andy Bosomworth labeled as the requirements of democracy, mutualization and conditionality - thus robbing the region of the type of mutual assurances that are critical to a cooperative orderly solution. With that, allocating balance sheet losses becomes even more difficult, both within and across countries.

Simply put, the status quo is no longer an option for Europe over the three to five year horizon. The higher probability outcome is that the eurozone will evolve into a smaller and less imperfect entity -- namely, a closer political union of countries with more similar conditions. We believe that this smaller union would likely include the big four (France, Germany, Italy and Spain) which, together with other remaining members, would be underpinned by much stronger regional coordination and financing mechanisms.

We did not come to this view easily -- especially as there is no orderly, easy and costless way to get there. Evolving into a smaller and less imperfect zone -- as leaders need to do in order to save their important and historical European project, and thus also avoid a major disruption to the global economy - is expensive and uncertain. It requires a lot of proper coordination, a more balanced policy mix, stronger financial circuit breakers (well beyond the ECB's lender of last resort facilities), less vulnerable banks, and quite a bit of luck too. It could even take a major fragmentation scare to force political leaders to act in a sustained manner.

All this also means that risk of a big derailment (an "existential risk" for the European project) is far from de minimis. Given the series of sustained negative shocks that this would entail -- for individual nations, the region and the world as a whole -- every political avenue should be pursued to avoid it. But we cannot count on that.

As Thomas Kressin noted, it is not just about the willingness of politicians to keep the eurozone intact. If it does fragment, it will most probably be because the population loses patience, resulting in political and social rejection that is aggravated by a tsunami of private capital outflows. Fortunately, politicians and policymakers still have the ability to get ahead of this, but they need to do so very seriously and very quickly. And for that, they also need a common analysis, a shared vision, and sufficient support.

Over the next three to five years, the U.S. will look good relative to Europe, outperforming in terms of growth and financial stability. That is the good news. The bad news is that Americans live in an absolute and not a relative dimension.

Our political analysis led us to conclude, using Libby Cantrill's notion, that political scrimmages rather than grand bargains would dominate Washington -- a forecast that reflects not only the reality of extreme polarization, but also the impact of significant disagreements among "technocrats" and related policy confusions. The fiscal cliff debate, which is certain to get louder in the coming months, will provide insights in this regard.

In a world that is so far away from any notion of a policy first best, look for the Federal Reserve to maintain its pursuit of financial repression for a number of years; and look for other regulatory bodies to pursue similar avenues in the context of a generally more restrictive regulatory environment. The resulting policy mix, however, will do little to alleviate legitimate concerns about growth, jobs, inequality, debt and deficits. In the process, the underlying structural fragilities of the economy will grow, in both economic and financial terms.

Turning to the emerging economies, we expect them to continue to outpace both Europe and the U.S. over our secular horizon. But don't look to them to compensate fully for problems elsewhere in the global economy. Also, you should expect them to deliver a more volatile growth path, especially as some countries undertake needed and tricky transition in growth models (including China). Along with all this, also look for greater differentiation among countries in what will become an increasingly heterogeneous grouping.

Yes, we expect emerging economies will account for more than 50% of global GDP in the next three to five years (in purchasing power parity terms). And yes their size and growth rate will influence even more the functioning of the global economy. But this will not overwhelm developments in the advanced countries anchoring the core of the international monetary system. Moreover, with advanced economies attempting to hold on to outdated entitlements, the undeniable shift in economic gravity will not be accompanied by sufficient changes in the manner the global system is governed, wired and interconnected -- changes that are important for laying a proper foundation for more balanced global growth and a more robust international system in the future.

So, turning to illustrative numbers, we expect growth in advanced economies to average some 1% annually over the next three to five years (compared to 2'ish% at the 2011 Forum); and some 5% for emerging economies (6% previously). Meanwhile, look for the inflation versus disinflation debate to continue unabated as the tug of war between stimulus and debt deflation plays out.

On balance, we believe that over the next few years, inflationary pressures will slowly build in the global system due to several drivers. Too many cyclical dislocations risk becoming embedded as structural impairments to long-term growth potential, particularly when it comes to the labor markets in advanced economies. With other government entities doing too little, central banks will likely maintain highly accommodating policies for too long. And do not forget the political appeal of resorting to inflation as a means to delever.

Known Unknowns

What about the known unknowns? There are quite a few, including some with the potential to turn some of the slow burn dynamics into sudden shocks, either negative or positive.

Elections and transitions could certainly be game changers. According to calculations by our MBAs/PhDs, more than 50% of global GDP will face a potentially defining change in 2012. Moreover, eight out of 17 eurozone governments have been voted out of office in the last couple of years. So the potential for political upheavals is certainly with us.

Armed with strong new mandates, governments could deliver the "Sputnik moment" that acts as a catalyst for a series of beneficial grand policy bargains. And the impact would be amplified by the crowding-in of significant private capital that is now on the sidelines. More likely, however, is that elections result in a further polarization that complicates economic management. And, as illustrated recently in Greece, the mounting loss of credibility of traditional political parties facilitates the emergence of fringe parties that are eager to dismantle the past but have as yet no coherent and comprehensive plan for the future.

Over the next few years, elections will compound the pressures that governments feel from increasingly restless populations (especially in countries with high youth unemployment, including 51% in Greece and Spain and 36% in Italy and Portugal). As one of our new colleagues, Min Zhang, put it, her generation is looking for "hope and opportunity." Instead, and also lacking control of the ballot box, they are being saddled by an older generation's debt and growth impediments. And demographic trends will accentuate the challenges. Under such circumstances, we should not dismiss the possibility of unpredictable sociopolitical reactions that end up further complicating long-standing social compacts and the related functioning of an already stressed international monetary system.

What happens in advanced countries will be of more than passing interest to the healthier part of the global economy, namely the emerging world -- a point that Francesc Balcells, Michael Gomez, Ramin Toloui and others stressed.

The longer it takes for the advanced countries to grapple with their growth and debt problems, the greater the imperative for emerging economies to transition to sources of domestic demand to sustain growth. Nowhere is this more important systemically than China.

History suggests that economic, political and social frictions are inherent to such transitions, requiring careful and responsive management. Moreover, as the emerging world itself starts with a set of different initial conditions among individual economies -- and a few differences are quite pronounced -- some countries will likely be more successful than others, with related surprises.

Have no doubts, the "concentric circle" construct underpinning the international monetary order will be pressured in significant ways in the next three to five years. This is not to postulate a different system. As Rich Clarida argued, there is no alternate system and, therefore, you cannot replace something with nothing. Rather, it is about an increasingly hobbled international order whose anchoring core is weakening on a daily basis, thus undermining the standing of global public goods over the secular horizon. Also, don't be surprised to see countries in the outer circles (particularly some emerging economies) increasingly establish direct links that bypass the core. Indeed, changing clusters of global influence are likely to be a notable feature of the next three to five years; and the systemic impact is inevitably uncertain.

Technology also provides for meaningful two-sided tails for our baseline hypotheses, especially given that disruptions in this domain easily catch people by surprise.

You would have to be in North Korea to deny that the world is in the midst of empowerment advances that fundamentally alter the relationship between individuals, between states, and between these sets of global actors. As discussed, it is a changing ecosystem that results in two worlds operating simultaneously -- but with different protocols, speeds and legal protections: a physical world with government and institutional control, and a virtual one with individuals dominating the creation, dissemination and sharing of content. Over time, the latter will have even greater economic, political and social impact -- and do so at times through unanticipated channels.

This provides for the exciting possibility of leapfrogging structural impediments through what Mike Spence calls off-sequence development. Several specific examples were put on the table where technology could serve as a beneficial accelerator. And if we are really lucky (and we mean really, really lucky), perhaps this could also help in dealing with some of the real dangers of self-limiting growth patterns, including those associated with society's past abuse of the environment. But, again, we should not count on that.

Yet this phenomenon has more than one potential outcome. Some of the empowering technical revolutions can be negatively used to undermine social cohesion and security. Others offer the likelihood of disruptive revolutionary dynamics that are easy to start but prove difficult to control and complete, especially in the absence of sustained leadership.

Implications -- The "What"

Our 2012 Secular Forum discussion confirmed that the distribution of expected outcomes for the global economy is both flatter in its belly and fatter in its tails. This is a potentially unstable situation, especially when compared to the conventional bell curve. Moreover, its density has shifted unfavorably in the past 12 months as a result of growing uncertainty, complexity and policy risk premia. In Europe, it has already morphed into a bimodal distribution -- a phenomenon that colleagues in our five European offices confront on a daily basis.

In such a world, investors need to retain a claim on the upside while protecting against the downside, including gap risk. They need to be highly differentiated, positioning portfolios for the knowns (both for return generation and for risk mitigation), while also maintaining the right level of optionality in the face of the unknowns. And they must ensure sufficient operational agility to evolve as more data become available, as will inevitably be the case.

In the short run, investors are well advised (indeed, urged) to supplement careful bottom-up security selection with macro, and in particular a deep understanding of the implications of the different policy approaches being used to deal with over-indebted economies generating insufficient growth -- directly in advanced economies and indirectly in how this impacts the behavior of others. Specifically, and in the words of Bill Gross, they must seek to engineer a "great escape" from a range of actual and likely realities -- be it financial repression in the U.S., default in Greece, or other forms of de facto confiscation elsewhere.³

This, of course, translates into a sizeable quality bias for sovereign and company exposures, the latter both in corporate credit and equity space. Focus on names with high cash balances, low financial leverage, high operating margins and exposure to growth areas. Higher quality sovereign exposure should be concentrated in parts of the yield curve that offer meaningful roll down and are anchored by credible central bank policies. Exposure further out the curve should be taken with caution, focusing on sovereigns with a lower risk of inflation and also utilizing inflation-protected securities. Meanwhile, higher-quality equity exposure should be supplemented, where possible, with a dividend dimension as a means of de facto shortening duration.

Consider real assets when thinking of the range of responses to minimize the multi-faceted risk of financial confiscation, especially as inflationary pressures slowly mount. Again, differentiation will be essential, with emphasis placed on those with low supply elasticities and offering a degree of geopolitical protection.

Currencies are the hardest to call in the world we have described. On the one hand, emerging market currencies will likely be supported by continued productivity gains, strong balance sheets and capital inflows. On the other hand, policymakers there will be hesitant to see their currencies strengthen in a world that is so uncertain, especially if the appreciation is turbocharged by leakages from what they view as excessive liquidity creation in the U.S. Also, expect the U.S. dollar to continue to be the main recipient of flight-toquality capital, at least for the first part of the secular horizon.

These considerations speak to relatively limited scaling of currency positions pending additional information. And they also shout for careful differentiation.

The bottom line here is a simple one: Wherever you are in the capital structure and in geographical space, be very alert to situations where valuations do not reflect the confiscation risk. And remember, confiscation is not just default. It is also a function of poor protection against inflation, nationalization or the large preemption of company and currency earnings by governments.

And...

The emphasis on minimizing exposure to financial repression will remain as long as central bankers are in control, including a Federal Reserve that is both able and willing to compress interest rates while underwriting the mounting collateral damage and unintended consequences. At some point during the secular horizon, however, investors will most likely need to pivot. Why? Because, absent a much more comprehensive policy response, central bank measures will prove insufficient by themselves to ignite growth dynamics and safely delever over-indebted segments in advanced economies.

Think of two corner solutions anchoring the range of possibilities in this pivot. At one end, central banks end up providing a bridge for other government entities with more effective measures, including on the structural front. And this serves to crowd in private capital currently on the sidelines. At the other end, central bank policies become not just ineffective but also counterproductive as the collateral damage and unintended consequences eventually overwhelm the intended benefits.⁴ In addition to the direct negative impact, this would encourage the private sector to de-risk further, thus sucking more oxygen out of the economy.

For investors, the essence of this pivot involves an overwhelming emphasis on capturing solid and growing value streams that reflect company and sovereign ability to "earn" them through sound fundamentals rather than to "buy" them through financial wizardry. Its exact nature depends on whether other policymakers, with better tools, finally step up to their challenges.

If they do, then an across-the-board risk-on posture would make sense; and government bonds would prove a bad place to be. But this requires the type of political decisiveness and effectiveness that sadly eludes most advanced economies; and it also necessitates better global policy coordination. Accordingly, the other pivot involves even greater emphasis on principal protection -- or, to use Bill's recent characterization, reinforcing the coming of age of investment defense.⁵ And, together, all this speaks to the need more than ever to allow for portfolio repositioning as new data come in and circumstances dictate.

Implications -- The "How"

So far, we have discussed "what" investors should consider if they agree with our secular analysis. It does not stop here however. The analysis suggests that the "how" is equally consequential.

Given the likelihood of inflection points, investors will need to be extra careful of traditional market capitalization indices that underpin not just conventional benchmarks but also many passive investment approaches. These can be particularly counterproductive in fixed income when debt is growing beyond safe levels (remember, they encourage the allocation of large and rising sums to increasingly vulnerable credits). In equity space, many of the traditional indices and approaches risk missing out on disruptors that will thrive in dislocated and changing markets and ecosystems.

It is also high time to revisit a whole host of backward-looking labels and dividing lines that often lurk in asset allocation, investment guidelines and mindsets. Are "domestic equities" really domestic when a large and growing portion of company revenues and profits come from other countries? Are advanced government bonds really interest rate risk when countries continue to slip down the credit curve? And are all emerging market sovereign bonds as risky as the term is often seen to imply?

All this speaks not only to increasingly outdated historical distinctions, but also to correlations among asset classes and the flexibility to react to (and combine more optimally) different risk factors. Remember, as Josh Davis, David Fisher and Curtis Mewbourne note, it is about how an investment behaves rather than what it is called.

Led by our analytics and solution capabilities, PIMCO has done a lot of work on this. This particular effort was initiated back in 2006 and we now have encouraging results to share with you -- from forward-looking indices (including "Global Advantage" that just celebrated its third anniversary) to solution methodologies and risk factor analysis.

Finally, and perhaps most disappointing for many, society will need to lower its return expectations in general, and particularly its risk-adjusted return expectations. Having produced what Scott Mather called a period of "false economic prosperity," the enormous multi-year levering of both the public and private sectors in advanced economies also involved the front-loading of investment returns. This can only be maintained and enhanced now through additional leverage (and the set of binding constraints here is set to grow) or through the lifting of structural impediments to growth (a much better approach but unfortunately problematic, at least for now).

As return expectations come down, the asset side of the balance sheet will not be sufficient on its own to meet the objectives of many investors. An even stronger linkage to the liabilities side will be paramount. In many cases, this requires a concurrent evolution in portfolio construction. Moreover, as demonstrated by Vineer Bhansali and Jim Moore, an investment approach that places risk mitigation just on the shoulders of asset class diversification will suffer. It will need to be appropriately supplemented by more sophisticated asset-liability management, cost-effective tail hedging, and a solution (as opposed to just product) mindset.

Bottom Line

In July 2010, the Chairman of the Federal Reserve Board, Ben Bernanke, came up with an elegant term to characterize the United States' cyclical outlook -- he called it "unusually uncertain." PIMCO's 2012 Secular Forum suggests that this term could well prove as resilient as our May 2009 forecast for a "new normal." Given our analysis, Bernanke's unusual uncertainty applies to more than the cyclical timeframe, and to more than just the United States. It is both secular and global.

Now uncertainty, even of the unusual variety, does not -- and should not -- translate into investor paralysis. We believe that specific areas of the secular horizon are already clear and actionable today; others are subject to significant two-sided fat tails that should be detailed and managed accordingly.

Over the next few weeks, we will provide you with several more detailed notes from our specialists on how the Forum's conclusions affect their individual sectors. We will also continue to fill out the secular topology, especially as we learn more about how the global economy is accommodating historic multi-dimensional changes -- be they in advanced countries, in emerging economies or in the functioning of the international monetary system. And you can be assured that we will work very hard to do so well ahead of others.

References:

1. "Secular Outlook: Navigating the Multi-Speed World," PIMCO, May 2011.

2. "Secular Outlook: A New Normal," PIMCO, May 2009.

3. "The Great Escape: Delivering in a Delevering World," PIMCO, April 2012.

4. "Evolution, Impact and Limitations of Unusual Central Bank Activism," PIMCO, April 2012.

5. "Defense," PIMCO, March 2012.

Robert Reich: Romney Has Public and Private Morality Upside Down

2012-05-15T22:24:00Z

Mitt Romney's reaction to J.P. Morgan Chase's mounting losses from reckless trades is "the market will take care of it." His spokesman says "no taxpayer money was at risk" so we don't need more financial regulation. Romney has even promised to repeal Dodd-Frank if he's elected president.

Yet at the same time, Romney has come out strongly against same-sex marriage. He's also against abortion. He has no problem with government intruding on the most intimate of decisions a person makes.

He's got private and public morality upside down. He doesn't want to regulate where regulation is necessary -- at the highest reaches of the economy, where public immorality has cost us dearly, and will cost even more unless boardroom behavior is constrained. Yet he wants to regulate where regulation is least appropriate -- at the level of the individual, in bedrooms and other intimate spaces, where private morality should govern.

This is a dangerous confusion. It should be a matter of personal choice whom to marry and when to have children. But it is undoubtedly a matter of public choice whether big banks should be allowed to take the kind of risky bets that plunged the economy into the worst downturn since the Great Depression, and whether people with great wealth and should be able to buy our democracy with huge campaign contributions.

Please see the attached video and pass it on.

Marten Weber: Let's Make Out In Public!

2012-05-15T22:00:00Z

Last month I kissed my boyfriend on the subway. We've been together for 12 years, and I like kissing him in public. It feels good to show the world that I have a person to love and who loves me back. Suddenly a guy who had just kissed the girl next to him came over and said, "It is disgusting to have to watch you people make out." We were not making out. It was a brief, loving peck on the cheek, nothing more. I was tempted to punch the idiot, but the coward slipped through the closing doors before I could confront him.

I have a dear straight friend who keeps telling me that the gay movement has got it all wrong. He says that sexuality is a private matter and that people should not go on and on about it. I think such views are nonsense. Sex may be a private matter, but sexuality is not.

No matter how often conservatives repeat the privacy argument, sexuality is a public matter. It is a matter of record. We take our mates to public functions, we hold their hands on the sidewalk, and we show them off at our friends' parties. As innocuous as these displays may seem to straight people, they are difficult, courageous public statements of sexuality for gay people. Our partners, by the very nature of their gender, define our sexuality.

It is understandable that conservative straight people who are not accustomed to gay lifestyles may at one point in their lives find gays offensive. I do not hold it against them. Tolerance is a difficult learning process, and acceptance is an enormous challenge, especially for people who actually believe that ancient holy texts offer some kind of guidance in our complex modern world. But for attitudes to change, visibility is paramount.

If we want to make the world a more tolerant place, gays do need to be more visible, and not just in the Castro. (We did our kissing on the Tokyo subway, by the way.) There is enough room to challenge people's attitudes without breaking the law or ending up as a censored YouTube clip. You can express your pride and sexuality; a sweet kiss is enough. If another passenger tells you that "you are disgusting," you are not infringing on his freedom, but you are challenging his bigotry, and bigotry must always be challenged.

So back we went for another ride, and again we kissed, this time on the mouth, tongues and all. My hubby tasted of pineapple. And would you believe it? Two guys saw us, gave us a thumbs up, and started kissing themselves. It's nice to see affectionate people in public. Our next plan is to join a kissing marathon. Unfortunately, the last one did not allow same-sex couples. Well, we'll just have to do it on the subway, then. Come here, baby... get your chapstick out.

Marten Weber is a published author. Find out more on www.martenweber.com.

Dr. Peggy Drexler: Obama and the Bully: The Cornering of Mitt Romney

2012-05-15T21:41:04Z

Ok. Let me get this straight. Vice President Joe Biden happens to mention that he has no problem with same-sex marriage. Then President Obama says that he supports it. Then some schoolmates of Mitt Romney say he and his buddies held down a shy, quiet student they thought to be gay, and chopped off his hair.

The Republicans might want to reconsider their talking points about this "community organizer" who is in over his head. As political theater, Karl Rove could not have scripted this any better.

First, you learn all about Romney's school days -- and you realize you have some credible ammunition. But how to use it? You trot out well-known gaffe-meister Joe Biden to make the statement. If all hell breaks loose, duck and cover -- it's just Joe being Joe. If all looks clear, come out with a presidential position that dominates the news cycle. Then -- wait a couple beats -- let loose the news that Romney was a teenage gay basher -- forcing him into an "I don't remember" non-apology apology -- with a chuckle -- for "dumb things" he did in high school. He is sorry if -- always if -- anyone was offended; the implication being that being held down by a gang and attacked with scissors is more upsetting to some than others.

Adding to the no-win column is the lack of recall. Two options here: either you're lying, or a horrific act of bullying was so trivial to you that it failed to lodge in your memory.

Certainly Obama felt his support was the right thing to do but any scenario other than brilliant political positioning says that all these events happened independently and coincidentally. Really? Nobody gets this lucky.

Putting your opponent in a no-win position is time-honored politics. The Republicans backed Clinton into don't ask don't tell with a threat of an outright ban on gays in the military -- something Clinton couldn't let happen on his watch, leading to a compromise he says he regrets.

What's interesting in the latest round of using gays and lesbians like sumo wrestlers use leverage is how the nation has changed since don't ask, don't tell. Look at virtually any opinion poll, and we are a nation moving on -- leaving politicians at a loss about what to do with their voting blocks of well-organized intolerance.

The heart of the Republican dilemma is the Millennials -- roughly mid-teens to late 30s. There are 79 million of them -- making them bigger than the boomers. The boomers see them as entitled, lazy, and happy to live in mom and dad's basement. A recent Boston Consulting Group study found something very different.

In spite of being raised amid the debris of the epic failures of multiple institutions, they are a generation that believes business and government can change the world. They believe in collective action -- and as the first generation of digital natives, they have an easy command of the opportunities to share their opinions.

They are very clear on social issues. One marketing study listed ten ways the generation describes itself. Number one is "friendly." A close second, at 81 percent, is: "open minded." Other studies show they are less religiously affiliated than their parents, and they feel government is too deeply involved in morality. They believe Christianity has good values, but they see it as judgmental, hypocritical and intolerant -- particularly on gay issues.

Most telling of all, they largely see issues like gay marriage as beside the point. A Harvard Institute on Politics survey found the economy and jobs as their top concern -- at 58 percent. Nothing else got out of the single digits, and social issues barely registered.

So to a generation of current and future voters, Obama has deftly offered a choice: a respectful and inclusive voice of the future; versus a schoolyard tormenter aligned with the intolerant voices of the past.

Not bad for a community organizer.

Peter J. Woolley: Fox News Does Not Make You Dumb: Researchers Respond to Critics

2012-05-15T21:29:14Z

Does Fox News make you dumb? No, but that was the headline generated by news aggregators re-reporting research by Fairleigh Dickinson University's PublicMind.

The initial study found that the least informative media were two partisan cable news channels, Fox and MSNBC, which came out at the bottom of twelve sources tested. NPR and Jon Stewart's Daily Show came out on top as the most informative, making the schadenfreude all the more delicious for Fox-haters, and the twisting of the liberal knife-in-the-back all the more painful for Fox fans. But how did it come to that?

Respondents were asked to identify which, if any, news sources they had used in the past week. The same respondents were questioned about current political and economic events. Some questions were deliberately easy; others were hard. The study then looked at the relation between which news sources people used, and how well they could answer the questions. In modified geek-speak, the idea was to isolate the effects of individual news sources on the ability to answer questions about current events, controlling for all of the other news sources, as well as things that tend to predict political knowledge, such as partisanship, age and education.

Overall, Fox viewers were not better or worse than the average respondent at answering the questions. That said, and all salient variables being geekily controlled for, there was not merely a zero effect but a negative effect of Fox News on viewers' ability to answer the questions; meaning that Fox viewers would have done better had they been using almost any other news source, or no news source at all. Results for the similarly partisan MSNBC were... well, similar.

The big surprise was that news reports focused almost exclusively on Fox's last place showing, and that the reports went viral. Then the unexpected bonus was the number of Fox-defenders who sent emails and snail mails, left voice messages, and blogged intensely, making every sort of criticism, especially argumentum ad hominem. As a matter of course, the investigators had a variety of mental, moral, and physical deformities. The most predictable of these was that the researchers, being college professors, were by definition mindless, meming, bed-wetting liberals, who drew their conclusions first, and arranged the data accordingly, or gleefully over-interpreted the results to gratify their prejudices.

The most substantive critique was that some questions were ambiguous, and therefore skewed the results. Critics pointed to one question in particular which asked whether the Egyptian people had been successful in "bringing down their regime." Alert readers suggested that while Egyptians were successful in forcing President Mubarak from power, one could not definitively say that they had overthrown the regime, since the same military which secured Mubarak for many decades continued to run the country, and the same protesters who were fed up with Mubarak's rule continued to agitate for the military to relinquish its control.

The perspicacity of this observation was matched only by the peculiar number of people who made the argument, frequently in identical language. Still, the answer is that an ambiguous question answer should have an equivalent effect on many different kinds of media consumers. Bias arising from poor question construction should not be systematic, but random. Fox-defenders were unintentionally positing that the effects of ambiguous language, or an arbitrary correct answer category, would affect Fox viewers disproportionately to all other media consumers.

One can suppose that this is within the realm of possibility if Fox viewers were systematically being presented with, and paying attention to, more news about the Egyptian Spring than other citizens, and were more thoughtful about it, and thus more likely than others to all draw similar conclusions. As one enthusiast put it, "Fox viewers got it right, and you got it wrong. My advice is to leave international affairs to someone else, or start watching Fox."

But were this alternative hypothesis true, it should have applied uniquely to scores for the poorly constructed question. In fact, a "wrong" answer to the Egyptian question correlated strongly to "wrong" answers on the all the other questions.

Critics also made points about the size and scope of the sampled population; some suggested that because it was done in New Jersey the results could not be imputed to other states, much less to the entire nation. New Jersey is, after all, demographically different from many other states. It leans to the Democratic Party. More than one in four speak a language other than English at home. And it has an elevated percentage of people with graduate education.

Other critics suggested too few people were included in the study and too few questions employed. The study used five questions, primarily because space on the omnibus questionnaire was limited. The same poll included voter assessments of the president and of New Jersey's governor, as well as a series supported by the New Jersey Farm Bureau, an annual sponsor of the poll.

The answer to all these criticisms was to run the experiment again, this time using a national sample, increasing the number of questions, and doubling the number of interviews. A new, national study thus included eight questions; four domestic and four international. The N increased from 612 to 1185, though it must be said that this was not at all a matter, as some critics thought, of having enough cases in certain cells to compare them using conventional tests to pronounce their differences significant. It was never a matter of examining crosstabs.

What the researchers searched for were the marginal effects of exposure to one news medium compared to any other. Their figures represented expected, not observed, values and all were relative to a hypothetical construct of someone who had no recent news exposure. Of course, most people get news from multiple sources, but the effect of each source, or of no source, can be calculated using multinomial logistic regression. All results controlled for partisanship, age, education, and gender, so that conclusions were presented ceteris paribus.

The re-study produced the same result as the original, but attracted few headlines. The news aggregators had already had their fun.

Fox came out on the bottom, even below "no news exposure." NPR came out on top, along with The Daily Show. Responses to the question about Egypt, now rephrased to specifically name Mubarak, were no different. We concluded again that NPR is one of the "most informative news outlets," while "exposure to partisan sources, such as Fox and MSNBC, has a negative impact." But perhaps that latter phase was misleading.

We never said, nor meant to say, that Fox viewers are dumb -- or MSNBC viewers for that matter. They're no better or worse than the average respondents. Clearly, anyone who is dumb and watching TV was dumb when he or she sat down in front of the tube. Some news sources just don't help matters any.

Dan Cassino and Peter J. Woolley are professors of political science at Fairleigh Dickinson University in Madison, New Jersey. Cassino is Director of Experimental Research for the University's research group, PublicMind: Woolley is its founding Executive Director.

John Feffer: America the Serial Killer

2012-05-15T19:35:53Z

Everybody loves Dexter. He’s handsome. He’s helpful. He works at the Miami Metro Police Department, and he’s very good at his job as a blood-splatter analyst. Oh, did I mention that he moonlights as a serial killer? Don’t worry: he only kills bad guys. That’s part of the code that Dexter’s adoptive father, himself a police officer, passed down to his son. As a child who had watched his mother die a horrendous death, Dexter couldn’t overcome the murderous impulses that surged within him. His father, channeling those impulses in the only constructive way he could think of, created a better monster of his son’s nature: a serial killer of serial killers.

The other essential rule of Dexter’s code: don’t get caught. He is very precise in the way he dispatches his victims, and he will do almost anything to evade detection. Dexter works for the law, but his second job is most definitely above the law.

During its six seasons on Showtime, the popular TV show Dexter has asked a vexing moral question: can a person do good by doing bad? Let’s throw in one more twist. Sometimes Dexter makes mistakes and kills people who don’t fit his definition of Really Bad. He must then wrestle with his (rudimentary) conscience and, more importantly, try to resolve the paradoxes of his father’s code. One last painful element of the Dexter story: his efforts to wipe out bad guys occasionally endanger and even lead to the death of his own nearest and dearest. Dexter has a serious problem, in other words, with blowback.

By this point, you’ve probably figured out my theory. Dexter is all about U.S. foreign policy and the moral calculus of a superpower. Our government has likewise been on a killing streak for a long time, and there’s no end in sight. But we are also, as a country, conflicted about this propensity toward murder. We try to tell ourselves that we only kill bad guys like Osama bin Laden and his ilk. We maintain that we intervene in the affairs of other countries for only the best and purest of reasons. But we also suspect that we have deviated from our code — many times and with devastating consequences.

The first season of Dexter aired in 2006, and it’s tempting to draw the parallels between the serial killer and our serial wars in Afghanistan, Iraq, and Pakistan. But let’s go post-partisan here and instead look at what the Obama team is doing today. “More recently, there has been hope for a more humane set of policies from the Obama administration,” writes Foreign Policy In Focus (FPIF) senior analyst Adil Shamoo in an excerpt from his new book Equal Worth. “However, such hope has not materialized in the form of a new policy toward the [Middle East]. The Obama administration is bent on proving its ‘national security credentials’ by following the old policy of vengeance and not of justice.” This tension between vengeance and justice, a major preoccupation of Dexter, was on display last week when a U.S. drone strike killed Fahd al-Quso, a top al-Qaeda operative in Yemen.

Quso helped plan al Qaeda’s attack on the USS Cole in Yemen in 2000, and he would certainly fit Dexter’s definition of Really Bad. He pledged to attack any and all Americans, soldiers and civilians alike. Maybe, you say, we should have apprehended him. Actually, Quso had been apprehended — several times. The FBI interrogated him prior to September 11. He escaped from prison in 2003 only to be recaptured in 2004 and then released by the Yemeni government in 2007. Maybe Washington should have tried extraordinary rendition. But the Obama administration has largely backed out of the business of extraordinary rendition in favor of extrajudicial killing.

Dexter would have no compunction about taking out Quso. Extrajudicial killing is what he’s all about. America’s favorite serial killer is judge, jury, and executioner all wrapped up in one.

But how do we feel about the U.S. president occupying that role? To make a final judgment, we must consider the legal issues, the foreign policy implications, and finally the practical matter of blowback.

The Obama administration only admitted publicly back in January to the existence of its CIA-directed drone attacks in Pakistan. Talk about open secrets. The New American Foundation estimates that the Obama administration has expanded the drone program sixfold over what the Bush team had initiated in Pakistan. And that doesn’t include the expansion of drone warfare to Yemen and Somalia or the drone strikes that the Air Force conducts over Afghanistan.

Two weeks ago, in an effort to increase transparency in one of the most opaque overseas operations the United States conducts, White House counter-terrorism advisor John Brennan was more expansive about the program. "One could argue that never before has there been a weapon that allows us to distinguish more effectively between al-Qaeda terrorists and civilians," Brennan said. "It's this surgical precision, the ability, with laser-like focus to eliminate the cancerous tumor called an al Qaeda terrorist while limiting damage to the tissue around it that makes this counter-terrorism tool so essential."

Next time I need surgery, I’m certainly not going to employ Brennan. Tasked with removing a tumor in my toe, he’d lop off my entire leg, remove an arm from an attending nurse, and accidently cut away a couple limbs from patients waiting in pre-op. That’s how “surgical” the drone strikes have been. The New America Foundation estimates that they have a 17 percent error rating (in other words, we’ve killed 300-450 non-militants). This corresponds to the calculations of the Bureau of Investigative Journalism, which has compiled a list of 317 civilians killed by drones in Pakistan.

There are two major categories of drone strikes. The first, dubbed the personality strike, goes after a known bad guy. The second, the signature strike, targets unidentified individuals and groups according to their pattern of behavior. Neither type qualifies as “surgical.” In the first case, U.S. drones killed Zabet Amanullah on the presumption that he was a top Taliban commander when in fact he was a human rights advocate. Even Dexter would have felt bad about that. In the second case, the United States is expanding its definition of enemy combatants to include groups in Yemen and Somalia, and this makes even the State Department uncomfortable.

We should all be uncomfortable. It’s bad enough when the president directs the extrajudicial killings by handpicking a set of discrete targets. But signature strikes give the CIA even more latitude in drawing up kill lists and racking up “collateral damage.” As William Saletan explains in Slate, “in the Pakistani frontier regions, the CIA has license to take out fighters who appear to be involved, or intent on getting involved, in the Afghan insurgency. The drone campaign has spread from counterterrorism to counterinsurgency.”

So, the United States doesn’t do so well with the first rule of Dexter’s code — only kill bad guys. It works a great deal harder to abide by the second rule: don’t get caught. It has done its utmost to conceal the drone program and create plausible deniability. “To absolve itself in the most sensitive strikes, the CIA has become skilled at using lawyers to cover its tracks. "They use paper when it is going to help them," says the former official. "Or they get on the secure phone. Or they get in an elevator casually with a lawyer and ask for his advice, like, 'There's nothing preventing me from destroying those tapes, is there?'" writes Michael Hastings in an in-depth article on drones in Rolling Stone.

Wait, you might say, what Dexter does is clearly illegal. Murder is illegal. But aren’t drone strikes legal? It’s a war, they’re combatants, we’re combatants, we take them out. Why bring in any lawyers?

Back in the 1970s, the United States banned the practice of assassination until Congress passed a law in the wake of 9/11 that empowered the president "to use all necessary and appropriate force" in going after those responsible for the terrorist attacks. But the targeted killing of American citizens, the “collateral damage” inflicted on innocent bystanders who happen to be in the vicinity of targeted drone strikes, and the dispatch of unknown targets based on unreleased evidence of their behavior all raise difficult legal questions. That’s a polite way of saying that these are lawsuits waiting to happen.

Moreover, what if other countries made the same claims in assassinating individuals in the United States? Washington might rethink the legality of its actions when China or Russia authorizes a drone attack on a Uygur or Chechen “terrorist” hanging out in Chicago. They too could use the self-defense argument.

So, strictly speaking, targeted killings are legal because the Congress passed a law declaring them legal. But they still fly in the face of international law and establish a dangerous precedent that will one day be used against the United States.

Meanwhile, the blowback continues. In a drone strike last year, the United States killed an American citizen, Anwar al Awlaki, a leading al Qaeda militant. A subsequent strike took out two of his close relatives. “The October drone strike that killed Awlaki’s 16-year-old son, Abdulrahman, a U.S. citizen, and his teenage cousin shocked and enraged Yemenis of all political stripes,” writes Jeremy Scahill in The Nation. “'I firmly believe that the [military] operations implemented by the U.S. performed a great service for al-Qaeda, because those operations gave al-Qaeda unprecedented local sympathy,’ says Jamal, the Yemeni journalist. The strikes ‘have recruited thousands.’ Yemeni tribesmen, he says, share one common goal with al-Qaeda, ‘which is revenge against the Americans, because those who were killed are the sons of the tribesmen, and the tribesmen never, ever give up on revenge.’”

Dexter is an individual driven by his nature to kill. He can’t help himself. The United States is not an individual, but rather a collection of institutions subject to the democratic control of more than 300 million individuals. Like Dexter, the United States was baptized in blood —the slaughter of Native Americans, the enslavement of Africans — and has been steeped in blood ever since. But it need not be part of our nature any more than the Holocaust defines Germany today or King Leopold’s monstrous crimes compel modern-day Belgium to behave in like manner. If the U.S. government argues, as Dexter does, that the system is broken and the Really Bad act with impunity, Washington can do something Dexter can’t — use its unprecedented power and influence to strengthen international law rather than undermine it.

If Dexter turns himself in, the show is over. The United States, in its last flush of unipolar glory, fears the same ending should it suddenly adhere to international law. With its expanded drone program, the Obama administration has kept America’s serial killer persona on the air for too long. More and more Americans are just saying no, as Medea Benjamin chronicles in her new book on drones. It’s time for the United States to stop breaking bad and behave like a proper, law-abiding member of the international community.

Subscribe to FPIF's World Beat here. Sign up with FPIF on Facebook. Follow FPIF on Twitter.

Crusade 2.0 is available here.

Sarah Lacy: The Irony of the Social Media Era: It Was Created By the World's Least Social People

2012-05-15T19:18:49Z

Facebook was created in 2004. A year later came the launch of 'TechCrunch,' the first major blog to obsess over 'web 2.0' and the companies and personalities that created it. Thanks to TechCrunch, and rival blogs like GigaOm and All Things D, Facebook became the first Silicon Valley Web giant to have nearly every move watched, reported, analyzed, over-analyzed and analyzed again since birth. The traditional media outlets played a big part, particularly as Facebook picked up tens, then hundreds, of millions of users -- but it was the bloggers who picked every minute detail.

Many at Facebook will tell you that's been a disadvantage. One of the nice things about being a private company is operating without the intensity of public glare. It's hard to grow a company under a microscope of constant second guessing. Now Facebook is preparing to go public and the interest in the company has never been higher. If you're thinking about buying Facebook stock, Mark Zuckerberg's eight-year headache is your gain. You may not have watched this company every day of the last eight years, but tech reporters certainly have. Ahead of the IPO we assembled some of the best of those reporters and asked them to share their insights into the people behind Facebook, the Facebook product itself, the ethical challenges that have dogged the company since its earliest days, the $2 billion in private equity it raised to get to this point, its revenues and business model. The result is a 25,000 word ebook: Buy This Book Before You Buy Facebook.

In the book, we start by examining how founder and CEO Mark Zuckerberg has grown from awkward Harvard dropout to the head of a $100bn public company. After all, one of the great ironies of the social media era is that some of the least social people in the world created it.

Back in 2007, when I asked Netscape founder Marc Andreessen why he was investing so heavily in social networking, he said simply, "People love people." I looked at him askance. From anyone else this would have been an unremarkable statement, but Andreessen hates people. Being around them all day at Netscape made him "manage like the Incredible Hulk," in his words. This is the man who would several years later spend the office warming party for Andreessen Horowitz Partners holed up in his office with a glass of scotch and a handful of friends before packing his bag, hopping off the balcony and going home. "I mean, I don't like people," he clarified. "But most other people do."

Investor Peter Thiel -- who would provide the first risky money into companies like LinkedIn, Facebook, Slide and Yelp -- isn't much better. He speaks in a staccato halting rhythm seemingly lost within the logic of his own head, then waves his head from side-to-side when he gets in the rhythm of the argument. You can know him for years and still have that awkward do-we-hug-or-not-hug exchange each time you see him.

Evan Williams, cofounder of Twitter and one of the company's three CEOs to date, answers most questions with a shy smile and almost pathologically avoids confrontation.

And then there's the most awkward of them all: Mark Zuckerberg. The first time I interviewed Zuckerberg in person, he -- astoundingly -- thought he was doing a good job at being natural. After all, he was answering all of my questions in short single word bursts. Like many coders, he places efficiency next to Godliness. He built Facebook so you could be in-and-out within minutes, but come back many times a day -- even though this was anathema to anyone who knew anything about building an ad business online. Surely an interview was the same, right?

Not really, no. I asked broader and broader questions hoping to tease a useful quote out of his mouth. Anything that might betray his thinking. Just anything polysyllabic, really. I asked more and more off-topic, vague questions, grappling for anything that couldn't be answered in one word.

It was a bizarre chess match. I would ask a question and rather than simply answering it, he'd try to parse why I was asking, what I really wanted to get out of the exchange and then answer in the fewest number of words possible. It was almost like he was a living natural language search engine. Then I would respond by asking something even more confusing.

After one particularly awful question from me, Zuckerberg broke down like a cartoon robot that simply could not compute. His eyes darted from place to place, like a bird. He furrowed his brow and looked up at me after several moments of silence. "That's a really broad question. I don't know how you want me to answer that," he said. 404 error. I had crashed Mark Zuckerberg.

I put down my notebook. I'd spent weeks negotiating this interview. The success of my very first cover story was on the line, and it was an absolute train wreck. I leveled with him. "I don't care how you answer it. It was a stupid question. I'm just trying to get you to say more than one word."

"That's. Really. Hard." He stammered, looking very intently into the distance, trying to make sense of what I was saying.

"Three words," I said. "Congratulations." We were making progress. By the end of the meeting, he'd sweat through his T-shirt.

Everything about Mark Zuckerberg is pure hacker. Hackers don't take realities of the world for granted; they seek to break and rebuild what they don't like. They seek to outsmart the world. If Mark Zuckerberg doesn't understand something, it's not defeat. It's not even something he has to accept. It's merely a challenge he needs to engineer his way out of, and that includes human emotions and relationships.

At the end of the interview, he thanked me for being honest. "I never knew that's why reporters asked questions like that," he said. "It helped me that you told me what you wanted." The next time he was better. Today, to see Mark Zuckerberg interviewed is to watch a media-trained pro.

This is emblematic of how Zuckerberg built Facebook, which is at its essence a company that combines human-entered data and the efficiency of computers to make sense out of, organize and categorize something inherently messy -- every kind of human relationship. Friendships, marriages, families, coworkers and the ties between them are the ultimate unstructured data in the world, and Facebook seeks to structure it. It is like teaching a robot how to love.

For Facebook to become an unfathomably large $100 billion giant, Zuckerberg had to become the world's most unlikely expert in people. He had to learn that they didn't want their data to be too accessible. He had to learn there was only so fast he could push his "social graph" idea -- which he sometimes forgets is really made up of hundreds of millions of people's very personal relationships -- into the broader Web. He had to learn that one man's increased efficiency was another man's massive breach of privacy.

But there was another less public level on which Zuckerberg had to learn about people. As a 19-year-old, he knew he never wanted to hand the reins of his company over to anyone else, but he also knew what he didn't know. He knew he'd need to surround himself with the right mentors, executives, programmers and -- as much as it pained him -- marketing and press types if he was going to make it. He'd need to know who he could trust and who he couldn't. He'd need to know who he could learn from. He'd need to know when to listen to his gut and when to listen to someone with more experience. He'd need to go from being someone who didn't get people at all, to someone who got precisely what he needed out of them to keep Facebook growing and keep the education of Mark Zuckerberg the CEO going.

Of all of the things Zuckerberg's hacker mentality has pulled off this is probably the most important.

Having known him since those early very awkward days, it's also the most remarkable. Few people would doubt that Mark Zuckerberg would build a great product. But I, at least, would never have expected him to become so great at hiring, motivating, managing and ultimately getting whatever it is his company needs from people.

Adapted from "Buy This Book Before You Buy Facebook: A PandoDaily Expert Guide On The Internet's Hottest IPO", available now as an ebook from Amazon.

Taylor Trudon: The Only Living Girl in New York

2012-05-15T19:18:15Z

Dear Taylor,

Remember when fellow Connecticutian John Mayer crooned, "'Welcome to the real world,' she said to me"? John's words were so deep back in seventh grade. Between unfortunate orthodontia and an equally unfortunate obsession with sparkly blue eyeshadow, middle school was rough. But as John wisely predicted, "Something's better on the other side."

The other side is New York.

But first, flash back to exactly one year ago. You graduated from college and moved in with your grandparents for the summer. By day, you neurotically checked mediabistro.com on the hour. By night, you ate dinner at exactly 6 p.m., then watched Jeopardy! and Wheel of Fortune with Grandma and Grandpa on the couch. You realized two things: 1.) Your grandparents are really smart and 2.) Alex Trebek is kind of a silver fox.

After a summer of nannying and writing freelance articles, you'll get rejected from that "dream job" you applied to. I know you spent an entire week slaving over that edit test and spent the Fourth of July in an air conditioned Starbucks Googling "sex tips." I know you rushed off to New York on less than 24 hours notice for that final interview. I know that when you found out you didn't get the job, you cried outside in your car because you were too proud to have anyone hear you. But you'll get to New York a few short weeks later, so don't worry (we hear things might kind of work out).

When you do get to New York, instead of Jay and Alicia waiting for you at Grand Central to welcome you to the concrete jungle, you'll find that finding a three-bedroom apartment is almost as challenging as finding a job. After a brief stint in Spanish Harlem, you'll find yourself on the Upper East Side. While visions of Blair Waldorf's headbands and mimosa-filled brunches float in your head, you'll quickly touch down on reality when you come to the sad realization that a substantial part of your salary will be spent on rent and that there are no Joseph Gordon-Levitts in sight at IKEA when apartment shopping on a Sunday (but there are, in fact, an abundance of pregnant women).

You'll spend too much money on "going out" dresses from Forever 21, watered down drinks in the East Village and cab fares. You'll read Bethenny Frankel's A Place of Yes before bed, hoping the pages hold the secret to finding your own Jason Hoppy and self-branded line of margaritas.

You'll scream and jump up and down for one of your friends that you've known since middle school, as she runs the New York City marathon. You'll eat too much Chipotle. You'll get stranded in Brooklyn with friends at 5 a.m. with no cash and not a cab in sight (mental note: always bring cash with you). You'll do karaoke in Korea town. You'll watch Ryan Adams perform at Carnegie Hall. You'll tweet at him the next day, and when he tweets back at you with a wink emoticon, you'll die a little inside.

Sometimes, the only reason you'll go to the gym is because you don't have cable and want to watch Khloé & Lamar while on the elliptical. You'll spend $50 on a black swan costume for Halloween, but because of a freak snowstorm in October, will end up canceling your plans and spend your night putting together a futon instead. You'll bail on Friday night plans because sometimes, you just want to sit at home in yoga pants with absolutely no intention of going to yoga.

Sometimes you'll feel overwhelmed -- not just when you think about your student loan payments or when you're trying to pick out a DVD from the Redbox at Duane Reade. Usually, it's when you're walking home at night, dodging puddles and listening to Paul Simon on repeat through your headphones. You'll think deep thoughts to yourself, wondering how in a city of 8 million, you can feel so alone at times. You'll ask yourself, when does New York start to feel like home? After six months? A year? Is it when a tourist stops you in Union Square to ask for directions and you can actually point them in the right way? Is it after you sign your very first lease? After you file your New York state taxes? When did you become an adult? Instead of your childhood bedroom, it's like John Mayer showed up unannounced at your apartment doorstep 10 years later with longer, greasier hair, to tell you that this so-called 'real world' has arrived. But then you realize that it already happened.

And while it was happening, being an adult made you a bit jaded. Or was it New York's fault? You'll get sick of how the subway smells like pee, your overpriced strawberries (yes, Gram, I know that they cost only $2 at Costco back home), how little kids with cooler clothes than you are always cutting you off on their scooters, the lines at Whole Foods after work, the way your monthly metrocard always expires on the mornings you're running late to work.

But mostly, you'll love it. Like when you're slouched into the backseat of a cab crossing the Williamsburg Bridge, half-asleep with your best friend's head on your shoulder, and the Manhattan skyline comes into view -- a postcard against a sheet of blues and purples. You'll still get that fluttery feeling in your stomach. Or like when the spring air is the perfect combination scent of laundry detergent and falafel -- kind of strange, but comforting all at the same time. A little like how a new home should be. Your home.

Here I am.

xoxo,
Me

Michael Giltz: In New Novels, Hilary Mantel Triumphs (Again) & John Irving Is Confused (Sexually)

2012-05-15T18:51:29Z

BRING UP THE BODIES BY HILARY MANTEL *** 1/2 out of ****
IN ONE PERSON BY JOHN IRVING ** out of ****

BRING UP THE BODIES BY HILARY MANTEL *** 1/2 out of ****
$28; 410 pages
Henry Holt

Hilary Mantel's Wolf Hall was the literary event of 2009, winning the Man Booker prize, breaking onto the bestseller list and ultimately becoming inescapable. Simply everyone read it and loved it. Mantel's accomplishment was multifold: she brought history to life, turned the very familiar event of Henry VIII dumping his wife for Anne Boleyn into a nail-biting political thriller and upended our image of Thomas Cromwell from a villain who persecuted the saintly Thomas More into the most modern and likable of men.

She does it all again with Bring Up The Bodies, the second of what Mantel now promises will be a trilogy of tales about Cromwell. (The third book will be called The Mirror And The Light and it can't come soon enough.) It is just as good as Wolf Hall and if I couldn't help myself and started casting the movie (surely Gary Oldman and the team behind Tinker Tailor Soldier Spy would be marvelous with this intrigue?) don't think this is a film or play waiting to happen. (Though it would be a fine riposte to the musty A Man For All Seasons.) It is a novel both literary and page-turning and confirms her status as a writer of the first rank.

The sheer audaciousness of what Henry VIII demanded in Wolf Hall came across thrillingly. Even the most casual fan of history knows Henry dumped one wife after another in search of an heir and blithely risked war and a schism with Rome by creating his own church just so he could get a divorce. Cromwell made it happen despite the overwhelming odds against it. Even the king of England is not so free and omnipotent as he'd like to believe but it happened and Henry was wedded to Anne Boleyn.

Now -- brazenly -- he wants to do it again. Anne has produced no male heir but many enemies with her sharp tongue and undiplomatic ways. Henry's eye is caught by the demure Jane Seymour and her family wisely keeps her within sight but out of reach of the monarch. Can't a king have what he wants? Henry wants Jane. Cromwell moved heaven and earth and prevented a military catastrophe in holding England together and placing Anne on the throne. Can he do it again? And if he's successful will Henry hate him for it, deciding that Cromwell was the mover and shaker that "pushed" him towards Anne in the first place?

The entire novel takes place over nine months but it lasers in on the few sharp, dangerous weeks when Cromwell must act. The pure pleasure Mantel provides is the joy of being inside the mind of the smartest person in the room. Cromwell is prone to flattery and revenge as much as anyone. But seeing him spar with courtiers, parry with diplomats, bow to royalty without ever debasing himself and always, always striving to both give the king what he wants and anticipate how quickly such desire can change is genuinely exciting.

Cromwell is above all a practical man, something the nobility despise in him but a character trait that the common born Cromwell learns to prize above all else. Watching him out-think, out-maneuver and out-wit them all is deeply satisfying. After pulling off this literary feat twice, you realize the smartest person in the room isn't Cromwell after all -- it's Mantel.

IN ONE PERSON BY JOHN IRVING ** out of ****
$28; 425 pages
Simon & Schuster

What is a bisexual? A bisexual is a person who can have an emotionally and physically satisfying relationship with someone of either gender. It's not strictly about sex. Anyone can have sex with anyone or anything and that merely makes them indiscriminate or horny or bored or adventurous or -- if they're a frat boy -- "really really drunk" and determined to pretend they don't remember a thing the next day. Sex is not the same thing as love.

Author John Irving (profiled here by Time magazine) knows this intellectually and having a bisexual at the center of his latest novel is not a big deal. As he points out, Irving has always embraced sexual suspects, as he calls them. The wikipedia entry for Irving even amusingly details recurring topics in his books (like Vienna and bears, for example) and you can see sex and violence in all their permutations appear again and again: homosexuality, lesbianism, incest, pedophilia, sex workers, transexuals, adultery, swinging (as they called it in the Seventies), rape, gang rape, self-mutilation, May-December romance and on and on.

But emotionally, as a writer, I don't think Irving quite "gets" bisexuality, despite his public avowal of schoolboy crushes on other guys. I think that explains the emotional flatness and odd repetitiveness of this book.

The story is eccentric and filled with memorable characters, like all of Irving's books. Billy is our bisexual hero, which can't have been easy at an all boy's boarding school in the early 1960s. Still, for all the insistence of how hard this was, Billy sure had about as welcoming and accepting an environment as one could hope for outside of a gay commune. His step-father is very open to sexual variety (something Billy appreciates once he gets over an awkward crush on the man), his grandfather is so good at playing female roles in the local community theater that it's clear to everyone grandpa ain't just acting and the local librarian is a woman of deep understanding and empathy who always provides the perfect book at the perfect time for Billy's education. He also enjoys a transgender role model (which will become a life-long attraction for him) and ultimately even more positive gay role models.

Billy can "pass" so he doesn't even endure taunting from fellow students except for one guy on the wrestling team that is merciless. But then everyone wants to sleep with that guy anyway and he's soooo merciless that it doesn't take much thought to realize there's more going on here than bullying.

The novel stretches from childhood to the age of AIDS but it returns again and again to the small town where Billy was formed emotionally. The plot twists are hard to swallow. Billy and another student both suffer from severe speech defects that banally signal their aversion to this or that sexual possibility. Difficulty in saying "vagina?" Check. That other boy -- Tom -- becomes Billy's first boyfriend and they cap off graduation by touring Europe. But Tom is a hopelessly jealous lover so averse to the idea of women and that dreaded vagina that he literally throws up again and again at the possibility. Once he throws up simply because Billy is reading Madame Bovary to him.

Time and again Irving seems to be worried that we'll forget Billy is bisexual or exactly what bisexual means. If Billy isn't interested in a girl, we're told not to worry, he likes breasts. It's just her breasts that don't interest him. This would be fine once but Irving seems pushed to explain Billy's proclivities again and again as if we might be confused. It doesn't help that Billy feels cursed never to be satisfied with just a man or a woman (or just guys or girls), playing into the old stereotype that a bisexual could never be faithful or satisfied with just one person. Now any particular individual can be incapable of monogamy, of course, be they straight or gay or bisexual. But it seems more general here, hence Billy's fascination with those who are transgendered and/or transitioning, as if only thus could he find "in one person" everything he needs.

This book has the odd tone of a memoir in which the writer can't distinguish between what is important and what's not. Stories are repeated again and again; at one point, Irving even acknowledges it, though the slightly new detail added to that anecdote hardly made it worth rehashing. A deflating finale in which Irving panders to the current vogue for not putting labels on people (as if gay, straight and bisexual weren't quite handy descriptions for the vast majority of people) doesn't help matters. As always, he writes with empathy and can spin a tale. But here his imagination is lacking and the erotic quotient is quite low. Billy agonizes a lot over who he is but rarely if ever do we sense the pleasure of desire.

BOOKS I'VE READ SO FAR IN 2012

1. The Underneath by Kathi Appelt ***
2. Jack Holmes and His Friend by Edmund White ***
3. The Last Unicorn by Peter S. Beagle **
4. Fun Home by Alison Bechdel ***
5. Death Walks In Eastrepp by Francis Beeding ***
6. Lumious Airplanes by Paul La Farge ***/
7. The Professionals by Owen Laukkanen ** 1/2
8. Unterzakhn by Leela Corman **
9. The Child Who by Simon Lelic ***
10. Hinterland by Caroline Brothers ***
11. The Yard by Alex Grecian *** 1/2
12. The Alienist by Caleb Carr ***
13. On The Wings Of Heroes by Richard Peck *** 1/2
14. A Princess Of Mars by Edgar Rice Burroughs *
15. The Gods Of Mars by Edgar Rice Burroughs **
16. The Warlord Of Mars by Edgar Rice Burroughs ** 1/2
17. Undefeated: America's Heroic Fight For Bataan and Corregidor by Bill Sloan ** 1/2
18. Stoner by John Williams ****
19. The Sisters Brothers by Patrick DeWitt *** 1/2
20. The 500 by Matthew Quirk **
21. The Age Of Innocence by Edith Wharton ****
22. The Alienist by Caleb Carr ***\
23. Crispin: The Cross of Lead by Avi **
24. Rogue Male by Geoffrey Household ***
25. The Perks Of Being A Wallflower by Stephen Chbosky **
26. Traitor's Gate by Avi ** 1/2
27. Cogan's Trade by George V. Higgins ***
28. 2312 by Kim Stanley Robinson *** 1/2
29. The Twelve Rooms Of The Nile by Enid Shomer ** 1/2
30. Bring Up The Bodies by Hilary Mantel *** 1/2
31. In One Person by John Irving **
32. A Million Heavens by John Brandon ***
33. The Case Of The Deadly Butter Chicken by Tarquin Hall ***
34. Seward: Lincoln's Indispensable Man by Walter Stahr *** 1/2

Thanks for reading. Michael Giltz is the cohost of Showbiz Sandbox, a weekly pop culture podcast that reveals the industry take on entertainment news of the day and features top journalists and opinion makers as guests. It's available for free on iTunes. Visit Michael Giltz at his website and his daily blog. Download his podcast of celebrity interviews and his radio show, also called Popsurfing and also available for free on iTunes. Link to him on Netflix and gain access to thousands of ratings and reviews.

Note: Michael Giltz is provided with free galleys and/or final copies of books to consider for review.

Mary Phillips-Sandy: Four Myths About Politics and Comedy

2012-05-15T18:50:41Z

It's an election year, which means two things: there's a lot of politics news, and there's a lot of politics news to mock. Before we get too deep into the silly season, let me clear up a few of the most common myths about politics and comedy.

Making fun of politics undermines American democracy.
People really say this, with straight faces. If it happens in a social setting, I chuckle and excuse myself for a drink. If it happens at a public event or panel discussion, I say something like, "American democracy is a centuries-old institution that has withstood seismic changes of the economic, political and sociocultural varieties, not to mention more than 12,000 members of Congress. No amount of joking could put a crack in its foundation, not even this ridiculous mashup of political leaders and Game of Thrones." Then I excuse myself for a drink.

When we make fun of people in power, when we talk about corrupt or malfunctioning institutions but refuse to "take them seriously," we're strengthening the American political organism. In its mildest forms, comedy adds to the national conversation, perhaps broadens it. In its strongest, most scathing forms, comedy focuses attention and forces reaction. Whether that reaction is outrage or an eye-roll, it's important. American democracy gets weak when we forget that it's there, it's flawed and it's ours to improve.

People who mock the news are hurting journalism.
You know what's hurting journalism? Bad journalism. Also not helping: business decisions stemming from the (entirely mistaken!) belief that journalism is not and never can be a viable business, which leaves newsrooms starved of the resources they need to produce good journalism, which leads to more bad journalism -- or good journalism that can't reach an audience that might sustain it. "Mocking the news" might mean mocking the substance of the news, not the reporting of it -- or it might mean mocking the reporting itself, if it is laughably bad, in which case see above.

People who do political comedy do it because they're not smart enough to do real news/People who read, watch or listen to political comedy are getting a dumbed-down version of real news.
Writing a 3,000-word feature on campaign spending is hard. Writing ten funny jokes about campaign spending is also hard. Some people are good at the former, some people are good at the latter and some people are good at both, but those people are unicorns.

And we are not the ones who've dumbed down real news. We are not the ones who used Weebles to explain how a caucus works.

Conservatives aren't funny.
It's funny (ha): Liberals seem to be the people who are most concerned about the lack of conservatives in comedy, perhaps because liberals know their side is great at comedy, and they don't like to win if it's not a sporting contest. (This is why they hate fox hunting.)

Saying conservatives aren't funny is like saying women aren't funny, or rich people aren't funny, or Asians aren't funny -- it's a silly false construct in which entire groups are excluded from the realm of humor, which is one of the most subjective things there is. If a conservative joke falls in the liberal woods, does anyone laugh?

Speaking of rich people, some say you need an underdog POV to be funny, and that conservatives tend to hold positions of power. Perhaps, but Democrats are in power right now, even if they're sort of blowing it, and I think we can agree that there are many hilarious non-conservative people in very powerful positions in the media generally, and comedy specifically.

Bottom line: good comedy requires intelligence, imagination and perspective. That's it. Partisan material can deliver huge laughs, but if your perspective turns into tunnel vision, the funny dries up fast. This is true whether you're a Republican, a Democrat, an Independent, a libertarian, a socialist, a Tea Partier or a member of the Green Party, although if you are a member of the Green Party, you don't need me to tell you about comedy -- you're the ones who ran Cynthia McKinney in 2008.

Mary Phillips-Sandy is the editorial producer of Comedy Central's Indecision.

Barbara Hannah Grufferman: The Travesty of Being a Post-50 Woman in America

2012-05-15T18:47:23Z

It seems we're living in a country that penalizes women for:

Taking time out of their own lives and careers to care for others
Getting older
Living longer than men

According to a new study just published by OWL (Older Women's League National Board), women over 50 are in dire straits.

In the report, OWL, an advocacy group, begins its executive summary with some positive news by stating:

Midlife and older women are the fastest-growing sector of the U.S. workforce, and their participation in the nation's productivity is at an all-time high. As greater numbers of older women delay retirement, their presence in the workplace will continue to increase.

But, the report goes on to highlight a few of the stark realities of life as a woman over 50 in America:

The past few years of economic decline, slow recovery and related job cuts in state and local governments were particularly devastating for women. Along with the negative impact of the recession, older women workers are facing an array of obstacles in the workplace including age and gender discrimination; pay inequality; under-representation in business ownership, high-paying science, technology, engineering and math (STEM) jobs; caregiving demands and penalties; underemployment; and a lack of retirement security.

Generally speaking, women still earn only 77 cents for every dollar men earn, and this disparity widens dramatically with age.

"We've got women who have a lot of skills and who have experience, and that should be used. We need them, you know, contributing to the social system, and we need them to get compensated for it," said Margaret Huyck, president of OWL, in a recent interview.

One possible explanation for the pay gap is that women are more likely than men to leave the workforce for a period of time to take care of children, aging parents and spouses that are ill. The report finds "most caregivers are female and middle-aged and drop out of the workforce for an average of 12 years to care for young children or aging parents." The end result is often the same: the woman who chooses this path gets penalized by earning less than her male counterpart or not getting the job at all.

Working fewer years and earning less money can make it difficult for women when they retire. According to the report, almost twice as many retired women (12 percent) live in poverty as retired men (6.6 percent), and that without Social Security benefits half of women age 65 and older would live below the poverty line. And because there are so many more older women than men, many women live alone and don't benefit from the lower living expenses enjoyed by couples. Men, by contrast, are much more likely to live with a spouse and tend to remarry if their wife dies.

Even for those women over 50 who are lucky enough to have a job, many are woefully underemployed. According to the study, for women ages 55 to 61 who have a job, nearly 21 percent of them are underemployed, compared with only 7 percent of men that age.

To underscore the statistics, another study just published by Wider Opportunities for Women (WOW), a Washington, DD non-profit organization, states that older women are at greater risk of economic insecurity than older men. Its analysis of U.S. Census data found that 60 percent of women and only 40 percent of men age 65 and older who live alone or with a spouse do not have enough money to pay for their basic needs.

The OWL report -- which can be downloaded for free by going to their website -- offers many recommendations, including tougher anti-discrimination laws to discourage age and gender discrimination, incentives for companies to hire older workers and support for women entrepreneurs. They also suggest changes that could help all workers, such as more flexible work schedules.

This is a national travesty, and every woman in America -- regardless of age -- should be outraged. The fact that this didn't make headline news is disappointing and very telling.

What can you do?

Start by sharing this article. Download the report. Read it. And get really, really mad.

Next, buy products and services from companies that have a history of supporting women and especially older women.

And finally, in November, choose government officials who will make sure this is fixed, once and for all, for you, and future generations of women.

Take a quick look at this 30-second snippet from a speech I gave recently at the UniteWomen March and Rally in New York City. I hope it will become your mantra, too.

Barbara Hannah Grufferman is the President of Best of Everything Media, Inc., author of "The Best of Everything After 50", a guide to positive aging, and is at work on her second book, "Fifty Rules: What Every Woman Needs to Know Before Turning 50" which will be published in late 2012. Visit www.bestofeverythingafter50.com for more tips on living your best life after 50. She can also be found on Facebook, Twitter, and Pinterest.