Friday, August 8, 2008

TALK BACKWARDS

8/8/08

Back in the Spring when the dollar was trading at record lows against the euro and multi-year loans against the yen, the stock market/economy bulls told us how terrific the weak dollar was for the U.S. economy and for stocks. That callow argument, which completely ignored the U.S.’s status as a huge and getting more in hock by the minute debtor, came straight from the econ textbooks of the ‘70s: our weak dollar would make our exports more competitive and currency translation would have a eupeptic effect on the earnings of American multinationals. But this particular post does not deal with the merits of that argument.

Now that the dollar is strengthening at a breathtaking pace (up over 3% this week vs. the euro), the bulls are arguing that a strong dollar is terrific for the U.S. stock market/economy. Part of this protean argument is that a strong dollar puts downward pressure on commodity prices. This is a more formidable argument than the almost risible contention that a weak dollar helps us by making our export more competitive, but, again, the purpose of this particular post is not to argue the merits of the various arguments regarding the salubriousness, or lack thereof, of a strong dollar for our economy and equities markets.

So, if you’re a bull, a weak dollar is good for the economy/stock market and a strong dollar is good for the economy/stock market. Sure, this argument is contradictory on its face, but I am convinced that such cant is not duplicitous but merely a reflection of human nature. We all tend to talk our positions. We all have a tendency to decide what we think on largely subjective or visceral grounds and then find facts and “logical” arguments to support those positions. The task of a good investor, trader, or an open minded, inquisitive human being is to overcome this tendency and work from the facts to an opinion rather than the other way around. To paraphrase St. Paul, we have all fallen short in this endeavor. But the best of us at least try to put the argument before the conclusion once in awhile.

The late great Chicago folksinger Steve Goodman ended his classic “Turnpike Tom” with the old and obscure adage that “We only fall for lies and stories when we really want to.” One of life’s tasks is to stop wanting to fall for lies and stories and instead seek the truth.

6 comments:

Clay Eals said...

Mark:

Wonderful to see your post summoning the "moral of the story" of "Turnpike Tom" by Steve Goodman. He often doesn't get his due. You might be interested in my 800-page biography, "Steve Goodman: Facing the Music." The book delves deeply into the genesis of "Turnpike Tom" (in the rest room at The Other End club in Savannah, Georgia) and Goodman's more than 100 other stellar songs.

You can find out more at my Internet site (below). Amazingly, the book's first printing sold out in just eight months, all 5,000 copies, and a second printing of 5,000 is available now. The second printing includes hundreds of little updates and additions, including 30 more photos for a total of 575. It just won a 2008 IPPY (Independent Publishers Association) silver medal for biography: http://www.independentpublisher.com/article.php?page=1231. To order a second-printing copy, see the "online store" page of my site. Just trying to spread word about the book. Feel free to do the same!

Clay Eals
1728 California Ave. S.W. #301
Seattle, WA 98116-1958

(206) 935-7515
(206) 484-8008
ceals@comcast.net
http://www.clayeals.com

The Pontificator said...

8/9/08

Thanks, Clay; Steve always gets his due in the Quinn household. I never met the man but had the pleasure of seeing him live on several occasions. It's almost a shame that most people now know him for the dreadful "Go Cubs Go."

Surely you also noticed the title of the post.

I will check out both your book and your blog; thanks for the heads-up. And be assured that the streetlights are on in Chicago tonight.

Mark

The Pontificator said...

8/9/08

I just went to your website, Clay, and it appears that you are a big fan of "Go Cubs Go." Sorry if I was a little harsh in my assessment of that song in my post.

But you have to admit that, compared to "Turnpike Tom," "Election Year Rag," "Jesse's Jig," "Lincoln Park Pirates," "You Never Even Call Me By My Name," or even "A Dying Cub Fan's Last Request," "Go Cubs Go" is weak.

And that admittedly subjective opinion has nothing to do with my being a native southsider and cultural Sox fan!

Godspeed on the book, Clay; it sounds intriguing.

Mark Quinn

Clay Eals said...

Mark:

Thanks for your comments. No worries about negativity. As Yogi Berra might say, "90 percent of this game is half-subjective."

Yes, "Go, Cubs, Go" is not a complex tune or picture-in-your-mind narrative like many of Goodman's other songs. But it does hearken to the early years of Steve and many other Chicago folkies whose day job was to record radio commercial jingles in the nation's ad-agency capital so that they could ply their more heartfelt art and craft at night. It also is a genuine rouser, otherwise why all the attention nearly a quarter-century later? Besides, look at it this way: Because of "Go, Cubs, Go," many people who would not otherwise have gotten to know Goodman's music might now do so.

Finally, the story of how "Go, Cubs, Go" came to be is in itself a reason to root for the song, for it is clearly the alter ego to "Dying Cub Fan," arguably the best song about baseball (and futility) ever written. I hope you get a chance to check out the book for that detailed etymology -- and if you do, please let me know what you think of the bio: good, bad, ugly, or all three!

Clay Eals
ceals@comcast.net

Clay Eals said...

And yes, Mark, I forgot to say that I did indeed notice the headline for your post. "Talk Backwards" is one of Goodman's funniest songs, penned with Michael Smith, author of "The Dutchman."

By the way, surely you must know that your namesake, the lieutenant governor of Illinois, declared last Oct. 5 to be Steve Goodman Day throughout the state, largely because of the "Go, Cubs, Go" phenomenon.

Clay
ceals@comcast.net

The Pontificator said...

Thanks, Clay, and thanks for writing the book.

Mark Quinn