April 24, 2009

In Memoriam—Evan Allan Larsen, 1934-2009



My father-in-law, Evan Allan Larsen, passed away yesterday after a short battle with cancer. I miss him terribly.


My first contact with Evan was a phone conversation we had the winter of 1980, when I called him to announce my intention to marry his daughter. That conversation remains clear in my mind, mostly for the disconcerting quiet that followed my announcement. I let a few seconds tick away, hoping he would offer me his blessing, but he said nothing. Meanwhile, a dozen thoughts tumbled in my head, among them:

Maybe he doesn’t even know who I am.

Maybe he does know me and thinks I’m an idiot.

Desperate to make a good impression, I commenced to prattle about my plans for the future—how I intended to go to business school and work diligently to provide a good life for his daughter. I waxed on and on. Still he said nothing and the silence was like a fart in an elevator: suffocating and uncomfortable. Expecting the worst, I finally asked him outright: “How do you feel about all this?”

That’s when I heard the sniffles and jagged breathing that must have been there all along. With a pinched voice that couldn’t hide the emotion behind it, he answered: “I always hoped my girls would marry good guys.” Hallelujah, I thought, but in the next instant Evan gathered his composure and drew a line in the sand in a way we would laugh about in the years to come: “But if you ever hurt my girl,” he said, “I will hunt you down and beat the hell out of you.”

Despite that inauspicious start, I would learn to think of Evan as the second-best reason I married Lori. In fact, on more than one occasion I was so moved by his fierce loyalty to family and everything decent that I would tell him: I married your daughter so I could be your son-in-law. There were so many reasons to feel that way.

Evan was once asked to be a regional representative for his church, a role that made him responsible for the spiritual welfare of many thousands of people. In that role he was asked to speak on the topic of leadership at BYU Hawaii. Standing before a roomful of students, he began his address by asking a question: “What’s the most important prerequisite to being a leader?”

Immediately hands went up and several young people offered opinions. One of them said humility was the most important attribute for a leader. Another said it was spirituality. Someone else said it was wisdom. After each reply Evan nodded, but he said there was another—more obvious—answer. In the end, he responded to his own question by saying the following: “The most important prerequisite to being a leader is BEING IN THE LEAD!”

And that’s Evan in a nutshell: He was first to begin a group task and the last to put a broom away once the work was done. Yet, it’s what put in the lead that makes his life so compelling. After Lori and I were married, we received numerous congratulatory cards from friends in Hawaii. Evan sat with us as we opened the envelopes and offered details about the life of each sender. He spoke of people’s aspirations and achievements and it surprised me how much he knew about them. So much pride was in his voice, a casual listener might have assumed he was talking about his own accomplishments. Suddenly, from one of the cards, a five dollar bill slipped out and Dad got misty-eyed. The money, he said, had come from a widow who lived on a fixed income and couldn’t afford the gift without cutting something important out of her budget. He wiped away a tear and said in a resolute way, “I’ll make it up to her.” Now, I don’t know what he did—whether it was to buy her a sack of groceries, or perform some chore she would have to pay a handyman for—but I have no doubt that in some quiet way he did make it up to her.

I also have little doubt that we will see him again. Noble men like Evan are bigger than death. In a way, he’s only graduated to something far grander. I look forward to walking good dogs along oak-lined trails with him once more. I look forward to hearing more of his stories and laughing with him again. I look forward to speaking the words of thanks I didn’t express in time: Thank you, Evan, for the example of love and loyalty you exemplified with your every deed and spoken thought.

And I love you tons.

April 19, 2009

Examining Our Assumptions

When I was just a kid, my mom drove me nuts with a sort of inquisition she conducted on a near-daily basis. As soon as I would walk through the door—before I could even think about getting a snack or turning on the television—she would say: “Did you ask any good questions at school today?”

That would mark the start of a drawn-out conversation. If my answer was no, she would want to know why (and if I intended to do anything with my life). On the other hand, if I answered yes, she would want to hear the question and understand its context. She would ask how the teacher and the other students had reacted, all of which subjected the event to considerable scrutiny. There was an upside, however, because on the occasions when I could report an especially clever question, it was enough to make my mom’s day. I could count on a favorite entrĂ©e at dinner that evening. I might even be allowed to stay up a little past my bedtime.

Back then I figured all mothers were like that, so it didn’t seem peculiar to me. Today, however, I find it interesting that she never once asked if I’d answered any questions. To her, the best indication of an active mind was the ability to probe and prod. Knowing a bunch of answers didn’t impress her, at all.

It wasn’t until I was an adult that I met someone else who loved good questions the way my mom did. His name was John Meriweather and he was, at the time, the president of Salomon Brothers. I received a call from him one day not long after joining the firm’s Tokyo office. He’d heard that I was working on a new deal and he wanted to know more about it. When I started to summarize the transaction, he stopped me and said it was best to have the conversation face-to-face. The following week, I traveled to New York to meet him.

Little did I know that two other people—Larry Hilibrand, who’d earned a $15 million bonus for his trading performance the year before, and Myron Scholes, who would later earn a Nobel Prize for his work in developing an option pricing model—would be in the meeting with us. We sat down and John promptly asked me to explain the structure of the deal I’d developed. It was, quite simply, based upon a quirk in the Japanese tax code, which could be used to minimize the tax liability of certain investors. It took me five minutes to offer a summary, after which I soon lost track of the conversation. Scholes, Hilibrand and especially Meriweather took the implications of the deal to a place I’d not foreseen and put it in a bigger picture that included its affect on other capital flows. For me, it was a fascinating glimpse into the way extraordinary minds worked. In particular, I noticed two things: one, their interaction was effective, in part, because they were willing to challenge each other’s assumptions and two, they were far more concerned with articulating the right questions than in reaching correct conclusions. As I heard Meriweather say: “Ask the right questions and the answers follow.”

To say Meriweather is a smart man is like saying Richard Petty can drive a car. To this day, I’ve never met anyone who compares with him in intellectual terms. I didn’t get to know him well—after all, I was just a grunt back then—but I knew enough about him to understand the source of his mental prowess: He had a boundless curiosity and a deep love for the question, “Why?” In fact, it soon became apparent to me that before asking him a favor, it was best to prepare answers to two questions: Why does it matter? Why should I believe it?

And therein is a powerful code for life that both my mom and John Meriweather would doubtless appreciate: Be curious and never stop asking questions. This, unfortunately, is the antithesis of what many Christian organizations teach. Their notions of faith often require unquestioning reliance upon church decrees and literal interpretations of scripture. Ask, “Why?” and brows furrow. It’s because God says so, is one inevitable reply. It’s a mystery not to be tinkered with, is another. Then to side with logic and evidence against any faith-based assertion is deemed sinful.

Isn’t it apparent that accusations of faithlessness are bludgeons no less harmful than the racks of the inquisition? After all, as I’ve said on multiple occasions in past blogs: Faith has far more to do with uncertainty than perfected knowledge. There is nothing inappropriate with accepting certain premises on faith—in fact, we must do so since logic takes us only so far—but we should also acknowledge the possibility of being wrong and be willing to change our views should evidence dictate the need. In short, we should from time to time, question our assumptions, because that will lead us to better places.

In this context, we must see certain Old Testament stories for what they are: morality tales meant for another time and place. Abraham’s attempted sacrifice of Isaac is a good case in point and a story I’ve written about in other blogs. But consider also the account of Job, in which God and Satan go into cahoots to tempt and test a good man. We are meant to take from the narrative the value of unquestioning faith and we’re encouraged to follow Job’s example by never questioning why. Mindless doing, it seems to imply, trumps understanding. Yet, should we also accept God’s apparently capricious behavior? I think it's best to question the account altogether.

April 18, 2009

The Wait for the Higher Law

In reply to my last blog regarding Christ and the Ten Commandments, Joe Huster said the following:
The law served its purpose, and this was not to provide moral guidance. The law showed us that we couldn't live up to even the most minimal moral standards. It, thus, convicted us as subjects in need of redemption.

Those who see the Ten Commandments as the complete expression of God's moral concern miss the boat entirely. Sam Harris pointed out that he, a devout atheist, could think of obvious improvements to the set of rules. "Do not allow children to be abused or exploited" is a perfect example of a rule that would have to be included in any comprehensive list of God's commandments.

That such a rule is lacking in the Ten Commandments is not an indictment of God’s failure to provide moral guidance. It is an indication that the Ten Commandments are simply lowball standards that reveal our fallen natures. The Sermon on the Mount makes that clear.
I like what he has to say, but the notion begs the very question I used to end the blog: Why didn’t God communicate the requirements of the gospel to Moses? Why, in other words, did He wait until Christ’s ministry to disclose the higher law?

I’ve touched upon a possible answer in an earlier blog, but let me reiterate it here. Recall the history of the Jews before the time Moses received the Ten Commandments. Prior to being led through the wilderness as vagabonds, they were slaves to the Egyptians and considered chattel. They lived what I can only assume to be a brutal hand-to-mouth existence. Their only laws were based upon the vicious and capricious whips of bondage. Under such circumstances, few (if any) rise above the law of the jungle—a law that rewards the fittest rather than the moral.

It might be said then that, for the children of Israel, their long trek through the wilderness was God’s way of exacting a new discipline that required His people to live in cooperation and faith. What’s more, it prepared them for what came next, because near the end of that long sojourn—prior to leading His people into the Promised Land—God granted the Ten Commandments to Moses. Yet, as Joe says above, it was not a complete rendering of God’s morality. The people weren’t ready for that. They had only recently learned to consider the needs of the greater community.

Here, an interesting point can be made: If God waited before bestowing the Mosaic Law and waited again before offering Christ’s gospel, what does that say about the standards by which we measure ourselves? To me, it suggests that as we rise to new standards, the standards are likely to rise again. Unfortunately, if Christ were here today, He would have to re-teach His entire gospel, since it never really supplanted the law it was meant to fulfill and remains a revolutionary ideal today. Do we insist upon forgiveness in all circumstances? No, our culture loves vengeance, as is evident in every cop show and legal thriller on television. Do we insist upon bridling all lust and anger? Not at all, rather unmitigated appetite and ambition are considered marks of a charmed life. Do we insist upon honesty? Every business I know possesses file cabinets full of legal opinions that serve as evidence against the notion and yet are considered smart thinking.

Assuming, however, that we could live Christ’s gospel more fully, I’m sure we would discover even higher laws. We might, for example, learn that God wants us to take better care of the earth and live with the kind of restraint that conserves it. Of course, it’s just a suggestion today.

April 11, 2009

Christ and the Ten Commandments

I friend of mine recently acknowledged that he’d read parts of my blog and considered some of the content objectionable. Specifically, he thought my assertion that there were higher and lesser laws to be incorrect, because in his words, “Christ didn’t do away with the Ten Commandments.”

We agreed that he was referring to Christ’s statement found in Matthew 5:17.


Think not that I am come to destroy the law, or the prophets: I am not come to destroy, but to fulfil.
As I’ve stated in a previous blog, Christ made the declaration just before introducing His gospel as a requirement of higher standing than the prevailing Mosaic Law. That should be obvious from reading the remainder of the chapter, but what’s not as clear is that Jesus established the Ten Commandments as a necessary, but insufficient, standard of moral behavior. I say that, because obedience to the gospel—as the higher standard—results in obedience to the Ten Commandments, too. (In case the rationale isn’t obvious: If my personal standard of safety is to never drive over 45 MPH, then I will naturally obey the highway speed limit of 65 MPH, as well). In this way the Law of Moses was never destroyed, but that’s not to say it represents a sufficient standard in defining Christian living.

So what does Christ’s declaration that he’d come to fulfill the law and prophets mean? To my way of thinking, He was: 1) pointing to Himself as the culmination of Old Testament prophecy and 2) establishing His gospel as the logical progression for those who'd mastered the Mosaic Law. The latter I can say with confidence based upon another instance in which Jesus uses the same words “law” and “prophets” in the same sentence. The statement I’m thinking of is found in Matthew 22:37-40, which is Christ’s reply to the question: Which is the great commandment?

His answer, as you will likely recall, is:

Thou shalt love the Lord thy God with all they heart, and with all thy soul, and with all thy mind. This is the first and great commandment. And the second is like unto it, Thou shalt love thy neighbour as thyself. On these two commandments hang all the law and the prophets.

The implication of this statement is that the Mosaic Law (the law and the prophets) was always designed to point people toward the gospel—a gospel that is (and this is going to sound schmaltzy, but I’ll say it anyway) all about love. Conversely, by adhering to the requirements of loving God and neighbor, we fulfill what the lesser law could only aspire to achieve. For this reason, we should be more preoccupied with how we practice the two great laws, rather than the ten.

This, however, raises a question: Why didn’t God just give the requirements of the gospel to Moses? Anyone care to answer?

Gifts to Be Appreciated

I don't like the word diversity, at least not the way we typically use it, because it has become a bit hackneyed. I do admire, however, that people are blessed with a wide range of what I can only call spiritual gifts. One of the gifts I appreciate most is the ability to see the world for its elegant mathematical symmetry and beauty. For example, my father-in-law, who worked most of his life as a carpenter, can look at a blueprint of a house and walk through it in his mind. To him, not only are the walls there to touch and see, but so are all the endless possibilities.

My son, Matthew, the physics PhD candidate, has a similar gift that causes me no small amount of envy. He was once invited to represent San Francisco in a math bowl. The invitation was based primarily upon his performance in a written test. After he'd taken it, I asked about the test and he recalled a few of the problems. One apparently gave the various dimensions to a cone and a cylinder and asked what the volume of their intersection would be at a certain location. I asked Matt if he'd been able to answer the question. His reply: That's one I did in my head. I wanted to cry--why wasn't I given that ability?

Another way in which some people see geometry where others don't is music. My youngest boy, Aaron, is studying at the Berklee College of music, where he is the most recent Jimmy Lyon scholar. I hate going to concerts with him, because he will invariably turn to me when I'm thinking the performance is most interesting or inspiring and he'll say something like: "Did you notice the use of the tri-tone substitution over the dominant seventh?" I shake my head, because I don't even understand the question. My point here is that he sees the music in a very computational way that enhances, rather than diminishes, its artistic value. As a jazz trumpet player, he can look at a sheet of chord changes--no notes, just the chords--and understand the endless possibilities that can be drawn out of them. And what he and I appreciate most about jazz is that the best improvisers don't always follow prescribed rules (e.g., only the set of X notes are to be played over Y chord) but will violate them occasionally in ways that are ingenious and add color and character to the music.

Select the following link to hear a performance of Toshiko Akiyoshi's Long Yellow Road. My son solos three minutes into the piece--he's the trumpet player second from the left in back. The performance occurred a year ago when Aaron was still in high school, but I think it holds up.


Happy listening. Try to pick out all the tri-tone substitutions.

April 10, 2009

William James


In an earlier blog, I wrote of my sincere desire that members of religious persuasions—mine included—refrain from using a phrase I find arrogant and damning: I know the church is true. (Let’s call this "The Phrase"). In response, a good friend of mine, a man whom I respect and admire, made the following comment.

Regarding your wish—it has already been granted! We testify of Christ's impact on our life. I think what the kids are saying is—somehow, I like church, it makes me feel good.

I take as the meaning of my friend’s comment that what people are really saying by The Phrase is: The church makes me “feel good” and this serves as proof that I’m being led along a path of righteousness that will make me happy.

I don't disagree with him. In fact, his response reminds me of ideas formulated by one of my personal heroes, William James. In his collection of essays, The Will to Believe, James crafted eloquent arguments on the intellectual and emotional risks of religious belief that form the underpinnings of his philosophy of pragmatism. To me, the most compelling piece in the collection is his title essay, which serves as a defense of faith. I understand that at one point James considered calling the essay, “The Duty to Believe,” but rejected the title, realizing it implied an obligation he hadn’t intended. Next, he thought to call it, “The Right to Believe,” but noted that such a heading called for a grantor of the right, which wasn’t consistent with his view.

In the end, he selected the eventual title, because it best described an attendant assumption that all human beings want to believe in a universe where goodness exists and truth can be apprehended. Without that possibility, he claimed, moral decisions are futile exercises. However, such a universe can't be defended by reason or logic alone. It exists for us only if we have faith—only if we show, in James’ words, “a passionate affirmation of desire” for both truth and goodness. To that extent, we will to believe that those qualities exist.

This isn’t a bad thing. In fact, James tried to temper the empiricism of his time by investing individuals with the authority to determine what is and isn’t true. He did so by arguing that ideas must be functional and, in his own words, that: “Truth happens to an idea (when) we can assimilate, validate, corroborate, and verify (it).” At the root of his pragmatism, he asks practitioners to consider the value of an idea in terms of its personal utility:

Grant an idea or belief to be true,…what concrete difference will its being true make in anyone's actual life? How will the truth be realized? What experiences will be different from those which would be obtained if the belief were false? What, in short, is the truth’s cash-value in experiential terms?

I admire this idea, which I find to be in complete harmony with my friend’s comment. Where I part ways with him, however, is how the idea is put into practice in most religious settings. Let me explain my point.

  • James, as I’ve indicated in other blogs, defined truth in roughly the following way: If it works for you, it’s true. Implicit in this statement is that truth is highly individualized, since what works for me doesn’t necessarily work for you. In practice, however, the faithful generally believe all people come to the same conclusion about spiritual matters, if only they follow an established protocol, usually requiring study and prayer. There’s a Book of Mormon scripture, commonly referred to as Moroni’s Promise, that people of my faith point to as a kind of guarantee of this. Similar passages, I’m sure, are found in other sacred texts. The upshot is that most followers of religious tradition assume that anyone who comes to a conclusion contrary to their beliefs has either: 1) sinned beyond spiritual repair, or 2) not tried hard enough to receive enlightenment. However, if by uttering the phrase, “I know the church is true,” people are actually only saying, “The church has been good to me,” we have to concur that an individual can reach a different opinion and still be correct. Not all people, after all, will think the church makes them “feel good.”
  • I have an acquaintance, who was once a high-ranking official of an organization that attracted members with promises of spiritual and financial remuneration in exchange for physical property and other assets. He tells fascinating stories of how this was accomplished and apparently no device was more effective than the repeating of affirmations at group assemblies. Shouting in unison, “God loves me. He wants to bless me. He will give me love and riches,” would put potential members in a euphoric and highly-receptive state. (The FBI, by the way, shut the organization down when my acquaintance became disillusioned and turned State’s witness). The point here is that, in a subtle way, the repeating of aphorisms can be used as a control mechanism and The Phrase, which is often supported by an emotional response, is a case in point. For example, when missionaries teach people who feel an obvious connection to the message, they will often say something like the following: “You’re feeling the spirit and it’s telling you that the church is true.” But is that what’s really happening and is it honest to say so? Instead, could the emotional response really mean: I like these clean-cut young men and their unbridled enthusiasm?
  • I don’t think members process The Phrase as, “I like the church. It makes me feel good.” Rather, they are made to believe that the church is infallible and, by extension, that all debate ends in the scriptures or authoritative pronouncements. I have, in other blogs, spoke of the danger of apologetic thinking. Once a person decides that the church is “true” in every respect, all experience and new learning must conform to the notion or be rejected, no matter the supporting evidence. Otherwise, the alternative is to experience a kind of cognitive dissonance that must be ignored or conflicts of conscience and faith will result.
Like William James, I’m a great believer in the value (even the necessity) of faith. After all, logic only takes us so far until we must take occasional leaps into canyons of wonder. What I hope for, however, is that the faithful acknowledge their beliefs to have more to do with uncertainty than an unambiguous knowledge of the truth. If we could admit that, there would be far fewer roadblocks to learning and less sanctimony.

April 6, 2009

Worldview


If you've read many of these blogs, you'll know that I have a fascination with physics, especially as it pertains to Einstein's theories and quantum mechanics. As a result of that fascination, I sat down a few years ago and wrote this short story, which was subsequently published in The Banyan Review. It's a bit longer than most of my postings. Nevertheless, I hope you enjoy it.
Shortly before his eleventh birthday, Mitch learned that his parents didn’t love each other anymore. Sixteen months later he was living in a tiny apartment, the only good change in his life a beagle puppy given to him as compensation for all the upheaval. Then on a rare evening when his mother and stepfather were both at home, he was on the kitchen linoleum playing tug-of-war with the dog. Suddenly Dill released the dishrag stretched taut between them and fell to her side.

“Get up, little girl,” Mitch said.

He stroked the puppy’s muzzle and looked at his mother. Candace was still dressed in one of the tight skirts and revealing blouses she wore selling mutual funds to old geezers. She set out plates and cartons of Chinese food, letting the dishes clatter as they hit the table.

“Stop playing with that dog and come eat,” she said.

“But Mom, look.”

Her gaze fell upon the trembling puppy and she whispered, “Oh, my.”

Mitch saw the alarm in his mother’s face and sprinted across the kitchen. He grabbed his stepfather’s shoulder and turned him from the pile of medical journals that seemed always to reside on their dinner table. In view of Dill’s torment, Mitch would do anything to help her, even speak to the new man in his mom’s life.

“You got to do something,” he said.

Frank didn’t rise or even push himself away from the table. He rubbed his overworked eyes and said, “She’s having a seizure.”

“What should we do?”

The man yawned. “She hasn’t eaten anything unusual, has she?”

“No, I make sure of that.”

“Has she been off her food?”

“She eats everything I set out.”

Frank dismissed the problem with a shrug. “As seizures go, it’s not a bad one. Let her ride it out. We’ll take her back to the breeder next chance we get.”

“Take her back?”

Mitch felt dizzy with the prospect of losing Dill. He adored everything about the dog, from her floppy ears to her happy feet. Now that they’d moved to Oregon, she was his constant and only companion.

“I think what Frank means,” his mother said, “is we might exchange her for another puppy—one that’s healthy. Isn’t that right?”

Frank raised his shoulders again.

“No,” Mitch said, wondering if his mom was voicing the adult solution to all problems. “We’re not trading her in. That’s what you do to an old truck—not to things you love.”

During the silence that followed, the puppy rolled to her chest and her eyes gained awareness. Mitch gathered Dill into his arms, saying she was fine—that maybe she’d only been joking—but his stepfather countered with cold logic and medical talk. A seizure, Frank told him, might be caused by a dozen different ailments, including liver disease and meningitis, brain tumors and encephalitis.

“The treatment will cost money and you have to ask yourself if the dog is worth it.”

Mitch clenched his fists. “I’ll call my dad, then,” he said. “He’ll pay for a doctor—a good one, too.”
“There’s no need for that.” Candace turned to Frank and her voice quieted. “We just dragged Mitch from the only home he’s ever known. Don’t make him give up the dog, too.”

###

Several days and another seizure later, Mitch and his mother visited an animal clinic where a lady veterinarian examined the dog. She said Dill’s spells were likely caused by epilepsy, then she drew blood to rule out other illnesses. While the doctor poked and prodded, looking for an enlarged liver or other symptom of disease, she told Mitch he could help the dog.

“Does she need one of my kidneys?” he asked.

The woman laughed. “Nothing that dramatic. Just keep track of her episodes and write down what you see.”

“Like how much she shakes—that kind of stuff?”

“Exactly. Include the time each spell occurs and any special circumstances. That’ll help me decide what medicine to give her.”

“Medicine? You can make her better?”

“I’ll have to check today’s test results, but there’s a good chance you two can be friends for a long time to come.”

Candace agreed to return early the following month and Mitch left the clinic as if on wings. He wanted to soar home and tell Frank about the visit, in part to say, “I told you so,” but also to hear the man’s reply. His stepfather was, after all, an intern at a Portland hospital and his opinion meant something.

But Frank offered no medical advice or support of the vet’s diagnosis. All he said was: “I don’t understand why you’d want a sick dog.”
There was no point in replying. For all his stepfather’s intelligence, the man didn’t see what it meant to be a boy—that once in a while you loved something weak, something that really needed your help.

###

Mitch felt a kinship to the weak things of the world, which explained his fondness for the comic book Quantum Master. The evening after his visit to the veterinarian’s office he retired to bed early, his nose in the newest issue. Before his gaze fell upon the final scene he was yearning to discuss the story’s hidden message and to speculate about its connection to the larger world, but that seemed impossible. All his buddies were back in Arizona.

He turned to Dill, who was lying beside him, and let her sniff the pages. “See this?” he asked, pointing to a drawing of Tommy Trifle, the comic’s young hero.

Mitch summarized the story’s genesis: Tommy Trifle, a research assistant at a secret NASA laboratory, was peering through a telescope one day, when he received a blast of radiation from a dwarf star. As a result he began to shrink, even as the star collapsed. After a few days no one could see him anymore. A week later even the lab equipment couldn’t detect his presence.
Mitch pointed to another Quantum Master panel that was full of strange objects floating in a dark void. “And just like that,” he said, “Tommy was in a world with extra dimensions—a world where time flowed back and forth. It was a strange place and a dangerous one, too.”

Dill sneezed, causing her whole body to shudder. She looked at Mitch and put a paw on his arm as if to ask for clarification.

“It was dangerous for a reason,” he said, and pointing to a caption, he read: “If chaos went by another name, it would be Dr. Discord.”

The doctor, Mitch explained, was once the world’s foremost particle physicist, but disillusioned with the military’s use of his work, he tried to end his life through exposure to the same cosmic radiation that had miniaturized Tommy Trifle. Failing in the attempt—but now small enough to influence the world on a subatomic level—Dr. Discord sought to end all existence.

Mitch closed the comic book and patted Dill on the head. “Do you see what’s going on?” he asked. “These two guys are battling it out and the world’s survival is at stake. Tommy’s doing his best to keep us safe, but no one even notices. He’s a hero, but his greatest wish is just to get back home.”

###

Frank was working a double shift at the hospital and Candace was entertaining a new client, when Dill had another spell. Mitch held the dog and sat on the living room couch. He buried his nose in her fur and took her scent into his lungs.

“You’re okay, little girl,” he said.

Suddenly the inexplicable happened. Mitch wasn’t in the room anymore, but in a strange world, like out of a Quantum Master comic. It was a dark place without distance in any direction. He couldn’t see, much less use, his arms or legs. In fact he didn’t seem to have a body at all. Frightened, he willed himself to move, but only managed to spin.

Mitch picked up speed trying to escape the blackness and lack of dimension, when he heard Dill bark. He couldn’t see her but knew she was with him, maybe even a part of him. Her presence gave him confidence and he sought new angles of rotation, looking for a passageway out of the world. Together they did summersaults and Dill howled as if chasing a squirrel.

Suddenly the dog barked a warning and Mitch sensed the presence of others. He stopped spinning and felt a new sensation, like hot breath on his skin. Though he still couldn’t hear or see, Mitch perceived the intruders’ thoughts.

“What are you doing here?” they asked.

Mitch didn’t have lips to speak, but he concentrated on the words: I don’t know.

“There is no redemption here,” they said, as if in reply.

In the next moment the world grew brilliant with orange light and Mitch woke with a chorus of voices still echoing among his thoughts. Dill licked his face and, as sensibility returned to him, he considered the last curious words he’d heard: “Behold, the worlds meet.”

###

A week later there was a knock at the door and Mitch’s father stood in the open courtyard. Randall was tall and tanned, all smiling eyes and swagger. He wore khaki pants and a button-down shirt that looked neatly pressed despite his long flight from Phoenix.

“I thought it would be pouring rain here,” he said.

Mitch wrapped his arms around his dad and said, “It usually is. But not now.”

Randall pointed to a cherry-red convertible parked in the street and suggested they take a ride. Mitch didn’t need a second invitation. He leaped into the rented Mustang and lifted Dill into his lap. They left with the top down and the dog raised her nose to the passing draft.

An hour later they were heading south along the coast, when a stretch of seashore beckoned to them. Randall pulled into a rest stop and grabbed a football out of the back seat. From the parking lot they walked down a steep trail to where curtains of sand raced and whirled at the foot of the bluff. Only a few people were on the beach and Mitch rejoiced at having his dad all to himself.

Randall kicked off his loafers and slapped the football twice. “Go long, Champ,” he said.

Mitch ran toward the water with Dill following. Where the sand grew damp and packed, he curled back and said, “Throw it, Dad.”

Randall waved him on. “Keep going.”

The boy turned again and Dill barked and nipped at his heels, her floppy ears trailing. Mitch was still running at an easy lope, when he looked over his shoulder and saw his father reach back and throw. The football came in a perfect spiral with hardly an arc in its path. Mitch accelerated forward, but the ball landed a dozen feet beyond him. It bounced several times before coming to rest and Dill leaped ahead to paw at it.

“I told you to go long,” Randall said, laughing.

The football was too big for Mitch to palm. He wrestled it away from Dill and tried to throw it back to his father, but it wobbled like an injured bird and landed less than half the distance between them. His dad laughed again and Mitch tried to smile. He retrieved the ball and ran it back, wondering if he would ever be as tall or strong as the man who’d given him life.

“This time run a post pattern,” Randall said.

Mitch nodded and ran all-out. Every wish of his life seemed small beside his desire to catch the ball. He counted ten steps forward, faked right and veered left. The ball was already in the air when he first glanced over his shoulder. He pleaded silently: Don’t let me drop it. Let me dance with my arms in the air and celebrate with my dad. But the ball came too fast. It stung his outstretched hands and careened away.

Mitch ran the ball back a second time and said he wasn’t feeling well. They found a place to sit and rested their backs against a driftwood log. Near the water a pair of gulls landed and Dill growled at them.

“I’ve got something to tell you,” Randall said. “It’s good news.”

The words felt as warm as a favorite blanket and Mitch wondered if he would be going back to Arizona. Sometimes he dreamed of a perfect world, one with both parents under his roof, but if that wasn’t possible, he would choose to live in his hometown, not sharing an apartment with a stepfather.

“What news?” he asked.

“Do you remember Patti Ann from church? Well, we’re thinking about tying the knot—even talking about going to Vegas in a couple of weeks to seal the deal. I would take you, too, but you wouldn’t be much fun on the honeymoon.” Randall elbowed his son playfully.

“Patti Ann? Isn’t she the one with the boy?”

“That’s right. Landon plays shortstop on his little league team. He’s quite a fielder. Anyway, I thought you ought to know. You’re okay with that, right Champ?”

Mitch swallowed away a lump in his throat. “I guess.”

“Good.” He patted his boy on the leg and pointed to the parking lot. “I’m going to visit that restroom up there. We can play catch again when I get back.”

Mitch watched his father disappear up the slope and Dill began to shake in a way that was familiar to him now. He gathered the dog into his lap and kissed her head. In that instant he was in another world, one that was tunnel-like, but without height or width. Except for a dim glow at one end of the passageway, darkness surrounded him.

This time he wasn’t frightened. He quickly located Dill, who resembled a tiny spark of light. Together they advanced through the tunnel, gaining speed and rotation as they moved. He was like Tommy Trifle, ready to combat the forces of chaos. Mitch laughed from the thrill of it, until he sensed the presence of others and heard his dog growl.

“Why are you here?” said a chorus of beings. “There’s no redemption in this place.”
I don’t understand, Mitch thought. Suddenly he felt himself being whisked out of the world, but before he awoke, orange light filled one end of the tunnel and he heard the phrase: “Behold, the worlds meet.”

###

The morning his father was getting remarried, Mitch and his mother returned to the animal clinic with a record of Dill’s seizures. In a side room that smelled of cat fur and disinfectant, the veterinarian studied the handwritten notes and counted aloud the number of episodes that had occurred since their last visit.

“They seem to come every three or four days,” she said, looking at Mitch.

He nodded.

“And they usually happen when you two are alone.”

Candace put a hand on her boy’s shoulder. “Mitch is home by himself a lot. But he takes good care of the dog. There’s no doubt about that.”

“Oh, I know. I can tell from his notes. But look at this. Here’s a strange entry—and there’s another one just like it.”

The boy knew without looking what the doctor was talking about. He’d kept two of the entries sketchy, doubting anyone would believe his recollection of events: Me and Dill was just sitting there and it happened. It didn’t hurt us though.

“What did you mean by that?” the doctor asked.

“I don’t remember. Is that a problem?”

“No, we’ve got enough information here.” She jotted down a few notes on a clipboard and added, “I’m going to dispense phenobarbitone. It might make Dill sleepy, but I’ve had good success with it in cases like this.”

Mitch winced at the mention of side effects. “Does she really need it?”

“I think it’s best. You don’t want her to get sick again, do you?”

“But the spells don’t hurt her.”

“We don’t know that for sure. Besides, she has a bigger problem than discomfort or pain. Dill loses control when her episodes occur and that makes her vulnerable. Do you understand that?”
Mitch nodded, but his mind was far away. He was remembering the strange places he’d visited while Dill was having her seizures. Hadn’t they enjoyed their travels? Hadn’t they kept each other safe?

###

The phenobarbitone did make Dill sleepy and it saddened Mitch to see her listless. So after four days of counting pills, wrapping them in scraps of lunch meat and slipping them to his dog, he began to flush each morning’s dose of medicine down the toilet. He felt bad about the deception, but excited for reasons still unfolding in his head. Mitch wasn’t sure what he looked forward to more: Dill’s return to activity, or the seizures that would likely occur again.

Two spells came in as many days. The first took Mitch to a world with length and width, one he likened to the space between tightly rolled sheets of plastic wrap. Dill was there, too, looking like a glowing piece of thread. Together they traveled a zigzag course, spinning and shouting as they went. Prior to regaining consciousness, Mitch noticed sparks of orange light in the distance. The light spread across the horizon and a host of beings spoke the same words he’d heard before.

The next episode took them to a world similar to Mitch’s own. He saw Dill as she was, a small beagle pup. They came across a flowered meadow and ran through it, leaping and twirling. From the summit of a small hill Mitch cuddled his dog and rolled down the slope. Dill licked his face, then she looked up and barked. An orange sphere rose from a distant place. It was surrounded by glowing angels, who lifted their voices, saying, “There is no redemption here,” and, “Behold, the worlds meet.”

###

While Mitch read from the newest Quantum Master comic, he wondered if it would be the last issue he would ever share with Dill. Dr. Discord, according to the story, was seeding the world with tiny black holes that threatened to collapse the entire universe. The idea made Mitch shiver and he snuggled further into his bed. Surely, nothing could prevent disaster.

But Tommy Trifle didn’t accept defeat so lightly. He was like the little Dutch boy working frantically to plug a leaky dike. No sooner did he repair one corner of spacetime, when another black hole threatened to swallow everything in its reach. He was on the verge of losing hope, when he discovered a reservoir of anti-gravitons and unleashed them to neutralize gravity’s imbalance. Once more the world was safe, but Tommy felt no desire to celebrate. He’d only won another battle in what promised to be a long war.

Mitch put the comic book away and sighed, believing he knew how his hero longed for home.

“Dill,” he said. “If Tommy could return to normal size, do you think he would?”

The dog yawned in a way that ended with a soft whine.

“I think you’re right. He’s stuck, isn’t he? Tommy has to stay in the quantum world to uphold the laws of physics. If you think about it, he’s a hero and a prisoner at the same time.”
Dill wagged her tail and it beat a steady rhythm on the bed.

###

The phone rang late one evening, just as Mitch finished his homework and stood to get ready for bed. Candace picked up the receiver, saying it was probably Frank calling, but the chill in her voice suggested otherwise.

“Oh, hi,” she said.

Mitch could tell she wasn’t talking to Frank, or a client either. He guessed it was his father on the line and he hung around to listen.

“Business?” his mother said. “What business? Here in Portland?”

Mitch tugged on her sleeve. “Is it Dad?”

She nodded and put a finger to her lips. “No, I guess dinner would be okay, but what do you mean by everybody?”

There was so much Mitch wanted to tell his father. School had started a week ago and he still hadn’t made any friends. He would sit alone during lunch, wishing he was home with Dill or in Arizona with his buddies. Mitch had never felt so lonely. He needed to hear his father say that the world was good and events would work out for the best.

“Can I talk to him?” he asked.

Candace frowned and shook her head. “I don’t know, Randall. I’ll have to check with Frank, first.”

She hung up the phone and Mitch pouted. “Why didn’t you let me talk to him?”

“Your father had to go. Anyway, he’ll be in town on business and wants to meet us for dinner Friday.” She smiled and added, “He’s bringing his new bride—like any of us need that.”

“Patti Ann’s coming?”

Mitch wished he could spend the time alone with his dad. With the others tagging along, the conversation would turn to grownup topics and he knew what that meant. They would smile through clenched teeth and talk about the weather, but their real feelings wouldn’t emerge until later.

When did your mom start wearing that? Why can’t your dad just grow up?

###

On Friday the same thoughts were taking a lap in his head as Mitch opened the restaurant’s double doors. He spotted his father sitting at a table near the bar and yelled, “Dad!” but three pairs of eyes turned to him in reply. Not only was Patti Ann there, but Landon was, too. They were sipping drinks and swapping stories like characters in a Brady Bunch rerun. Mitch looked away and hoped his legs wouldn’t collapse.

His father came to him with open arms and Mitch allowed himself to be hugged. He stared at his new stepbrother and whispered, “You brought him?”

“Didn’t your mom tell you? I’m trying to mix business with a little pleasure here. You understand, right?”

Mitch didn’t have time to answer. Patti Ann was leaning toward him, planting a moist kiss on his forehead. Her eyes were the color of smoke and her breasts were pushed up to expose the deep hollow in between. “You’ve become a handsome young man,” she said. “How are you getting along here in Portland?”

Like a load of crap, he wanted to say. I’m hundreds of miles from home. My parents are divorced. I don’t have any friends. And you’ve taken my dad from me. But Mitch had been taught better than that. He wouldn’t raise his voice, or speak of the ugly feelings in his chest. Look at the bright side, he told himself. If you can’t say anything nice, don’t say anything at all.

“I’ve got a dog named Dill,” he said. “She’s my best friend.”

“That’s sweet.”

Mitch might have cried then, but for the distracting events that followed. He tried to make sense of them, but each scene progressed to the next, like a cartoon played at high speed. Randall waved to the maitre d’, who ushered them to a window-side table overlooking the ocean. Waves pounded the rocks on shore. The sun bled into the sky. Mitch looked outside and thought: Behold, the worlds meet.

“I’m glad you could make it,” Randall said.

Candace waited as Frank drew a chair for her. “Wouldn’t have missed it,” she said.

No sooner had everyone been seated, when the waiter appeared with menus. Mitch asked for ginger ale and Landon grinned, saying he would prefer scotch on the rocks. Randall reached around his new wife and tousled the boy’s hair.

“Little chance of that, Champ,” he said.

Patti Ann giggled and turned to her son. “Behave yourself. Be more like Mitch over there.”
Everyone laughed—everyone except Mitch. He was too busy thinking: I’m Champ. That’s what my dad calls me.

“Well,” Patti Ann said. “Isn’t this nice?”

“Uh huh.” Frank studied the menu as if it were a body prepared for surgery. “They’ve got quite a wine list here.”

“That’s not what I meant, Silly. I was talking about us. Look at how we’re all getting along. Aren’t we just one big happy family?”

###

That night Mitch was lying in bed, trying to forget dinner, when he felt Dill shaking near his feet. He pulled her to his chin, and waited for the seizure to take them away. A moment later he was on the bank of a sparkling river, Dill by his side. The world was like his own, but it had a depth he couldn’t explain. His surroundings seemed to shimmer like the reflection on a lake.

They found shade under a cottonwood tree and Mitch lay back to be dazzled by its branches. The shimmering increased, until the whole tree seemed to flap like a tarp in the wind. Mitch wanted to see what was behind it and suddenly the surface peeled away as if it were an onion’s skin.

The tree continued to stand over him, but it had changed somehow. He willed more layers to be stripped away and realized that he was looking—no, traveling—into the past. The further he went, the smaller the tree became. It was a sapling, then a seedling, a fluffy seed, then it was nothing at all. He reversed the process and saw the tree’s future. It grew in size, until a great wind toppled it.

Mitch leaped up, eager to explore further. With Dill bounding ahead, he ran along the river, up hills, and across valleys. Everywhere they went the view twitched and shimmied and welcomed them into both past and future. After a while they came upon a large field, where winged angels hovered in the air.

“What are you doing here?” the beings asked.

“Please,” Mitch said. “Don’t send us home. We want to stay.”

The angels gestured toward the sky. “Behold, the worlds meet.”

A variety of orange objects descended. There were long strands of light and figures like out of a geometry book. As the objects touched down, people emerged. “There is redemption here,” the angels said.

The world had become a giant mural, and the visitors were peeling back its surface to step into the past. Where a man had once walked out of a bar and stumbled into his van, he remained sober and relived the scene. From there a chain of events glowed as if on fire and was suddenly transformed. A traffic accident was avoided. Lives were saved. Before long the world was throbbing with strings of light, adjustments to the tangled web of time.

Mitch was beginning to wonder if he could change his own past, when the living room of his boyhood home appeared. It was night and his parents were talking softly. Their voices seemed sad and empty.

“So, is this it?” his father asked. “Is being a wife so awful that you’ll give up on our dreams?”
Candace sighed. “They were your dreams, not mine. And no, being a wife wasn’t awful. It just never was enough.”

Mitch shut out their voices and thought of ways to end their talk of divorce. That’s when an idea occurred to him. He would walk into the past, pretending to be sick and in terrible pain. A week of that, he concluded, and his parents would forget their other problems. If that didn’t work, some other trick would. Here, it seemed, he had all the time in the world to put things right.

“I need to go with them, Dill,” he said. “You stay here, okay? Dill?”

Mitch turned and saw that his dog was a new-born puppy again, wet and blind, small enough to fit in his palm. He picked her up, knowing she was delicate and that he might injure her without proper care. The power to alter Dill’s future, he saw, was in his hands. Time moved forward and he watched her grow. She was wrestling with her littermates one second and playing tug-of-war with Mitch the next. They romped on the beach with Randall, and visited the animal clinic with Candace.

The next scene was unfamiliar to him. Morning had come and he let Dill outside. She bounded into the parking lot, sniffing oil spots and car tires in search of a place to relieve herself. Two boys stood at the open door with Mitch. They were sleepy eyed as if they’d spent the night there. A truck pulled into the parking lot, but Mitch wasn’t alarmed. Dill always came when called. “Come back, little girl,” he said.

But she didn’t hear. The dog had fallen to her side, quivering, and the boys’ screams came too late.

###

Sunlight trickled through Mitch’s window and he woke with Dill in his arms. He pulled the dog to him and said, “Are you okay?”

She stretched and yawned, before wriggling out of his grip and springing out of the room. Mitch wrapped himself in a bathrobe and followed. At the mouth of the hallway he saw Dill sitting in front of the door, wagging her tail as he drew near. He stopped and recalled the words he’d heard earlier: There is redemption here.

“No, Dill, not without me,” he said.

In the coat closet he found a leash and clipped it to Dill’s collar. They stepped outside and the dog tugged against the restraint. Mitch led her across the courtyard, thinking of the bad turns in his life, when he remembered Dill’s most recent seizure. It suggested he would make new friends and raised the possibility of mending his broken family, but what of its startling end? Was there a way to avoid that? He let various plans form in his head, but each scenario led him to an unsettling conclusion. After several minutes of reflection he thought: I would give up almost anything to have my family back, but not that.

Mitch cleaned up after his dog and led her back inside. He went to the kitchen, got the container of phenobarbitone and extracted two pills. From the refrigerator he found an old slice of bologna and wrapped it around the medicine. He called Dill to him and she came. The house was quiet. No one else was up.

“You got to eat this,” Mitch said, holding out the meat.

She sniffed it and sat. Her eyes were full of questions.

“Listen,” Mitch said. “Even if we could go back and put things right, you need to keep in mind what we saw—especially the last part. We don’t know when that’ll happen, do we?”

Dill barked.

“And if I lost you, how would I ever get to where we were last night? How would I ever bring you back? That’s why you got to take the medicine. You got to.”

He offered the pills again and Dill wagged her tail. As she took the medicine, these words sounded in Mitch’s head once more: Behold, the worlds meet.

Dimensions, Time and Separate Universes

After his longtime confidante, Michele Besso, passed away, Albert Einstein sent a letter of condolence to his friend’s family, in which he wrote:

He (Besso) has departed from this strange world a little ahead of me. That means nothing. For us believing physicists, the distinction between past, present and future is only a stubborn illusion.
Einstein’s point was rooted in his own scientific theories, an implication of which is that time is a façade disguising a deeper reality. He likened our understanding of that reality to the limitations a child experiences upon entering a library. The library is filled with books written in various languages, and though the volumes have their authors and appear to have been placed in some order, the nature of that arrangement is beyond the child’s grasp.

Our world, according to Einstein’s letter, is strange in that it hides the true nature of time as a physical property inextricably linked to space. If we could perceive the past, present and future as they truly are, we would see them as differing locations, rather than events that occurred or will occur. Time, in this way, is an illusion that humans comprehend imperfectly, because we’re three-dimensional beings who are incapable of perceiving that illusive fourth dimension of space time.

The idea of life in a world of limited dimension is not new with Einstein. In the book Flatland, which first appeared in 1884, Edwin A. Abbott tells a story set in a two-dimensional world without height. In this world any object—a circle on its side, for instance—is perceived by its inhabitants as a straight line across the horizon. The book is an interesting treatise on the conditions of such a universe and describes the difficulty one would have in perceiving other dimensions beyond it. After reading the book as a young man, I became fascinated with the idea of worlds with dimensional constraints and began to see physical corollaries all around me.

For example, let’s say you notice a wasp in your car as you travel 65 MPH down the freeway. Afraid of getting stung, you crack open your window and shoo the insect outside. That’s good for you, but think of what has happened to the wasp. Suddenly it has been whisked away from a world of limited space into one that seems upwardly and outwardly unbounded. The temperature, too, is probably different and because of the speed of the car, the wasp feels the effects of friction that quickly slows it down. The turbulence is so great, the poor insect offers up some wasp puke. For an instant, it must believe it has been sucked through a vortex into a very different universe.

I could go on and on with such examples, but here is my favorite. I took a bush flight into the Bristol Bay watershed one day, when we happened over a section of the Nushugak River. The Nushugak is known for many things, but it’s especially famous for large runs of king salmon and the bears that come to feed on them. As we flew over, the river didn’t disappoint. We spotted salmon—as numerous as maggots on a carcass—and a brown bear sow with two cubs.

What happened next, I will never forget. The sow leaped into the water in a manner that seemed without stealth or forethought and raised a commotion that scattered the salmon upstream toward an oxbow bend in the river. At first I thought the bear had clumsily missed her chance for a meal, but by her next actions it was apparent she’d been employing a stratagem, all along. The sow simply crossed to the opposite bank, ran up an incline through scrub willows, then back down to an upstream section of water, where she waited until the fish came to her. When they did—believe me—her reaction was swift and effective. She came out of the water with a salmon in her mouth and immediately fed it to her cubs.

The scene made me think about the separate worlds all around us. The fish—if they’re capable of such thoughts—may have believed due to the river’s undeviating flow that they were in a universe that stretched in a single unwavering direction. Moreover, unaware of the wormhole that crossed a fold in their universe, the fish may have assumed they’d encountered two different bears. The sow, on the other hand, had a different perspective of the salmons’ world and understood the twists and turns of it. That knowledge she used to great advantage.

This is my hope: If there’s really a future part of the universe and if a wiser and better me resides there, it would be nice if he could send a kind thought or two through the twists and turns of my universe in this direction. After all, there has to be a few wormholes he can use along life’s way.

March 30, 2009

My Apologies

Lori, who is brilliant and keeps me grounded, read my earlier blog entitled "For Mormons Only" and had some choice words. She reminded me of a principal by which I try to abide, namely that I must never, under any set of circumstances, ever be the reason someone's faith is diminished. I would do nearly anything—anything but lose my integrity—to be completely assured that God lives, that Christ died for my sins, and that there are absolute truths that, like a line of mileposts, will direct me home. The fact that I can't achieve this shouldn't be taken as a sign that those who can have been deceived. Since I believe uncertainty to be a necessary human condition, I must accept the possibility that I've been deceived—or at the very least, that the truth is so complicated that all of us are right.

However, here is a point I seemed to have missed or didn't emphasize sufficiently: Even when I'm wrong (for example, let's assume I'm wrong about Prop 8) sometimes I'd rather be wrong and suffer the consequences than to embrace the alternative. I've mentioned in a previous blog that if I were given Abraham's choice between sparing my son or earning some greater gift from God, I would choose my son and not think twice about the decision. That seems fair, doesn't it?

Sorry again. I hope I didn't offend anyone.

Capital Markets Musing

I’m getting off topic here since I’m going to jot down a few thoughts that aren’t in keeping with the idea of a new Christian ethic, but I can’t help it. As someone who spent a lot of time structuring CDOs and Credit Default Swaps, I’m pulling my hair out listening to all the opinions and plans about a roadmap to economic normalcy and I have to say something.
Now, here’s my first observation: When it comes to a host of policy issues, there appears to me to be at least two courses of action. There are:
  • Politically expedient solutions that will satisfy the citizenry’s desire for blood, but in the end will do nothing to fix the problem, or
  • Market-based solutions that can help put our economy on the right track, but will likely cost a politician his or her career to defend and implement

Let me start out by saying our current economic malaise was destined to happen as soon as subprime lending became commonplace. Do you realize that mortgage loans were going to borrowers with FICO scores of 580 and lower, and who had no money for down payments? To understand how crazy this is, consider the following: The likelihood of a 580 borrower to default on some portion of his or her consumer credit within the next 90 days is 50%. Combine that with a lack of equity to mitigate potential loss and we have the perfect combination for a financial powder keg. Who let this happen? In a way, it was caused by some of the same people who are squawking loudest today—people who from their positions on the Senate Finance Committee (you know who they are) were demanding lenders, Fannie Mae and Freddie Mac included, to put more people in homes.

That was a bit of a digression, but the point I wanted to make is that our foreclosure woes were bound to happen as long as there was a lack of prudence in the lending process and regulators were complicit in the boundless stupidity. Accepting those circumstances as given, what was the first big mistake regulators made as the house of cards began to slip? Here’s my suggestion: We should have never let those pesky Bear Stearns hedge funds collapse.

I’ll tell you why in a minute, but imagine what people would have said if the government had stepped in to bailout a bunch of rich bastards who were investing a million dollars at a pop. Holy smoke, the outcry would have woken the dead and led to a slew of congressional committee hearings, where our nation’s leaders would have waxed sanctimonious in their outrage and never gotten around to asking a single enlightened question. Editorials would have been so full of vitriol, newspapers would have combusted in readers’ hands. Average Joes would have taken to kicking dogs just for spite. But saving those hedge funds would have saved us a lot of heartache—not to mention hundreds of billions of dollars in market liquidity. Here’s why.

(For a review of how we got to our financial meltdown, see my earlier blog entitled “Honesty: The First Step to Progress”)
To understand the role the Bear Stearns hedge funds had in driving market liquidity, it’s important to know something about the structure of Collateralized Debt Obligations, or CDOs. Virtually all subprime mortgages were once sold into CDOs, where a kind of financial alchemy was used to turn them into various securities that could be bought by institutional investors. The securities came in various risk classes or tranches. The highest classes—generally rated AAA and perceived to be low risk—were purchased by insurance companies, banks, mutual funds and similar institutions. By comparison, the other classes were more prone to losses and received lower (or no) credit ratings.

The reason why some tranches were more risky than others is that they were placed in a payment hierarchy referred to as subordination. In a typical deal, the lowest subordinated tranche (often called the “hurdle” or equity class) was the first to be hurt by defaults in the mortgage pool. It would take the first losses—reducing its pro forma yield—until it was completely wiped out. At that point, the next higher class would begin absorbing defaults and so on according to the increasing level of seniority. Obviously, the higher in the hierarchy a tranche appeared, the less likely that it would ever suffer a loss.

The role many hedge funds played, including those controlled by Bear Stearns, was as the investor in the hurdle class securities. Now, you won’t get an argument from me that the loan programs the investment bank sponsored were unsustainable. The programs were clearly unsustainable—no question about it—but the point to be made here is that the relatively small investments made by Bear Stearns made huge loan programs possible. When those hedge funds went away, a black hole was created that sucked away $250 billion worth of liquidity and the marketplace couldn’t handle it.

Nothing happened overnight, but that, my friends, was the beginning of the end. When those loan programs went away, the liquidity that had fueled the real estate engine diminished, leading to lower property valuations and higher foreclosure losses. Subsequently, a stampede of mortgage investors exited the marketplace, diminishing liquidity further and closing the first circle in a financial death spiral. What was once an easily surmountable credit problem became a more serious liquidity problem, which subsequently turned into today's seemingly intractable fear problem.

Why didn’t anybody do something? Here is the truly scary part of the historical record. We are far better at explaining quantum mechanics to lay people than we are at describing capital markets dynamics. In fact, universities don’t teach what occurs on Wall Street. The trading floor, rather than the ivory tower, is where financial theories are developed and put into practice. For that reason, regulators have little basis for understanding, much less regulating, the plethora of financial instruments and the technicalities of capital flows. Even if they did, they would make a lot more money on a trading desk, so why stick around?

Now here is the scariest point of all. I’ve worked with many of the Wall Street executives whose names appear regularly in the financial press. A small number are brilliant. John Meriwether, for example, who was the former president of Salomon Brothers, is the smartest man I know, not to mention the most knowledgeable financial guru this side of Pluto. He, however, is an exception to an abysmal rule. Wall Street has undergone unprecedented changes that have resulted in risk management complexities the old guard are unable to fix or fathom.

Prior to joining Lehman Brothers many years ago, I interviewed with all the people who filled, or would subsequently fill, the top jobs at the firm. They included Dick Fuld, the Chairman who would preside over the company’s demise. I remember sitting with a former COO of the firm one day to explain a transaction my team had successfully concluded. The trade was complex, but no more so than those undertaken by hedge funds today. I wish I could tell you differently, but the man clearly didn’t understand the transaction and never would to the day he left. You see, he had started out on Lehman’s commercial paper desk, a place he'd never left until he took management positions elsewhere within the firm. Take my word for it, the commercial paper desk is not the place to learn how to manage risk.

Unfortunately, I suspect many Wall Street firms are similarly led.

March 29, 2009

For Mormons Only

In a way, I started this blog as a substitute for church attendance, which I curtailed some months ago. While I love the people of my old congregation and would gladly take a bullet for many of them, I can’t imagine rejoining them any day soon. In that regard I know what people are thinking. I’m sure that when my name comes up in conversation, some sigh and say I’ve given up a heavenly reward to feed a petty objection. They have, no doubt, assumed that anger and pride are what’s keeping me from God’s good grace and that the church’s support of Proposition 8 was at the root of my small-mindedness.

While I certainly opposed Prop 8, I was never angry with the church’s position. Rather, from the mix of emotions I’d felt at the time—shock and embarrassment among them—the one feeling that emerged most dominant was an overwhelming sorrow. As someone who has suffered long episodes of depression, I had to put distance between myself and the church, if for no other reason than to protect my health. My reckoning was this: If God really wants gay men and woman to miss out on the most growth-promoting and love-inspiring of human relationships, I will accept the consequences of not worshipping Him.

That being said, nothing Christ ever taught gives me reason to fear.

I, like many young LDS men and women, fulfilled a proselytizing mission for the church. In my case, however, there was no burning conviction that I was doing God’s work. I could have easily declined the call, since my parents didn’t share my devotion and were alarmed, even upset, by my decision. But I went eagerly, hoping and believing that by my efforts the truth would be revealed to me—that everything I’d been taught would piece together like a finished puzzle and express itself as logical, beautiful and perfect. Yet by the end of my mission, that hadn’t happened. Neither has it happened since.

Instead, it became clear to me that the truth is far more complicated than I, or any mortal, can comprehend, which is why God said, “Let there be light,” instead of, “Let the universe be filled homogeneously and isotropically with a high energy density.” In this way, I liken the words of the prophets to first grade readers that point us in the right direction but leave for us a world of learning ahead. With respect to the teachings of the LDS church, no matter how hard I tried, I couldn’t accept two primary claims supporting it as God’s only “true” religion: namely that the church was led by a prophet and it possessed additional scriptures that revealed more of the mind of God. Nevertheless, the church seemed to offer a helpful—if not imperfect—rule of thumb as to how people should live and I supported it on that basis. Now, I no longer feel that way, but Prop 8 was only one of many reasons leading me there.

To me, Christianity should conform to Jesus’ teachings and not some lesser throwback to Judaism. In this failing, the LDS Church is not alone, but that doesn’t make it right. Its belief in blood atonement, for instance, harkens more to Old Testament justice and animal sacrifice than Christ’s admonition to forgive. The many Mormon scriptural references that describe God’s nature as vengeful and jealous smacks less of John than Leviticus. As a person of color, I’m offended that God cursed his wayward Book of Mormon children with a dark skin and called them loathsome, just like He’d done in Genesis. The numerous oaths Mormons take (and they know what I’m taking about) is consistent with Israelite practice, but is counter to Christ’s directive to “swear not at all.” The prohibition against gay marriage is an extension of the Mosaic Law’s demand to stone homosexuals—not to mention the LDS Church’s early restrictions against miscegenation—but it’s inconsistent with Christ’s ideal of love unfeigned. On this point I could go on and on, but to summarize: Jesus wants us to be better than the Ten Commandments, yet we remain more Judeo than Christian. And while the points I’ve raised may seem minor, they sum to an intolerant worldview that causes its followers to be motivated by fear and a loathing for the very human attributes God imbues in us.

If the church would grant me a wish, I would ask it to eliminate the phrase Mormons everywhere teach their children to repeat like a poor affirmation: I know the church is true. The sentiment not only leads to self-deception, but it runs counter to the intersection of two of the church’s most important beliefs, that: 1) we came to earth, in part, to develop faith and 2) faith is not a perfect knowledge. If we took these two beliefs to heart—embracing uncertainty as a necessary human condition that demands humility and eschews judgment—we would see our dogmatism for what it is: a silly kind of boastful swagger unbecoming of Christ’s disciples. If we were to do that, we might learn to love unconditionally and be the better angels inside of us.

And here’s a final note. If we did practice that kind of humble and non-judgmental faith, we would pray fervently that God, in His infinite wisdom, would make us instruments in His hands to help His gay sons and daughters find solace and a place of welcome somewhere. We would pray that they find joy, not to mention alternatives to what seems like an epidemic of suicide. Unfortunately, they won’t find that in the Mormon Church—not today—where prayers are never uttered in their behalf, but where that adage, “We love the sinner, but hate the sin,” rings as often as it is hollow and hackneyed.

March 19, 2009

The Necessity of Making People Owners

Bankers are being excoriated as examples of how greed corrupts. On this point I have a strong opinion: There are greedy people in every industry and walk of life, and you don’t have to be rich to be self-indulgent.

There’s no doubt, however, that self-interest runs amok at Wall Street firms, a condition that has led to behavior that’s harmful to the marketplace and Main Street America. You would think it’s a problem we should fix. Yet, from where I sit, I see none of the TARP money and threats about increased regulation aimed at correcting what will amount to an ongoing series of excesses and subsequent corrections. The problem, you see, isn’t the amount of compensation Wall Street pays its people, but how that compensation is determined.

To make my point, consider how an auto company executive (let’s say his name is John) eventually proves his worth to his employer. John is given an assignment to design a new body style for a line of cars. It’s an important responsibility and he works diligently to fulfill its requirements. After a period of time, he offers several style options, one of which is chosen based upon market research and lengthy internal discussion. Before the design can be put into production, however, some of the major components—the engine included—must be modified. In other words, a considerable length of time ensues before the first newly designed car rolls off the assembly line. Furthermore, it will take many more months—years perhaps—to determine whether the change leads to increased sales. In short, John and his managers won’t know how successful his design will be until years after the project is completed.

Now, let’s look at how Jim, a proprietary trader, seeks to make a name for himself. Jim is told to look for arbitrage opportunities and so he examines the marketplace for cheap securities and uncovers a five-year maturity bond that is paying 5%. He decides it offers extraordinary value, so he purchases $100 million of it, using cash that he borrows at 3% interest. Jim is suddenly making a spread of 2% (5%-3%) on the $100 million, or $2 million per year. Pretty neat, huh? But that’s not all. A salesperson comes to him and says he has a client who needs a guaranteed $2 million per year for the next five years and is willing to pay $8 million today for that annuity stream. The trader says, “You’re done,” and money changes hands. He has booked a nice profit.

This is a simplified example of a trade known as a swap. In reality, a swap is far more complicated and can involve an exchange of cash flows based upon multiple currencies, credit events, indices, and interest rate movements. However, the simplification doesn’t obfuscate key points to be made.

  • While the auto executive’s contribution to his company’s bottom line isn’t discernible until years have passed, the trader knows immediately and unambiguously how well he is doing on any given day.
  • While the trader has generated $8 million—which immediately flows through the company’s income statement—he also retains other positions, namely: a $100 million bond (an asset), a $100 million loan (a liability), and an obligation to pay $2 million each year for the next five years (another liability). These appear on the company’s balance sheet and their values are subject to change.
While all companies try to compensate employees on the basis of individual contribution, few are able to track performance in the way of a Wall Street manager by simply glancing at the tally in a trading ledger. From this perspective investment bankers are like ballplayers and actors: Trading gains have their corollary in home runs and ticket sales as an irrefutable and real time metric of success. High contributors, therefore, have considerable negotiating leverage. On the other hand, there is no tolerance for individuals who don’t perform. In fact, a Wall Street manager’s primary responsibility is to determine who among the workforce should receive walking papers prior to bonus season. Layoffs are expected each year and are meant to reduce the number of ways the bonus pool is split.

That being said, there’s a problem in how trading profits are calculated and you might have noticed it already—particularly if you consider what has happened at AIG. In the example above, the trader booked $8 million in profits today, but he still holds positions that can turn on him tomorrow. In particular, the $100 million liability is huge in comparison to the profit he booked. To demonstrate what can go wrong, let’s say the asset (the bond) defaults. The trader no longer receives the 5% payment from the bond, but he’s still required to pay: 1) the 3% on the borrowed money and 2) the $2 million a year on the swap. In addition, when the loan comes due in five years, the trader will have to repay $100 million and may not receive any money from the maturing bond. In short, while he made $8 million today, he exposed the company to a potential loss that could be in excess of a hundred million dollars.

So where am I going with this? The way Wall Street employees are compensated is based upon income in a given period and doesn’t fully reflect the residual risks of their positions. This encourages traders to book as much income as possible today and deal with future problems only as they arise. After all, getting a multimillion dollar payout this year will go a long way to easing the disappointment of getting canned the next. Do you think those AIG swap traders will shed tears if the company doesn’t survive? I’m sure they’ll cry all the way to their yachts.

And that’s the problem in a nutshell. The traders were compensated in such a way that they were encouraged to book income today that subjected the company (and the entire marketplace) to enormous risks for an extended future. One might say that they felt ownership for the periodic income, but not so much for the risks in the positions they retained. If we really want Wall Street to act with more integrity and prudence, bankers must be made liable for their mistakes. Forcing companies to reserve against leveraged positions and restricting bonus payments until trading positions mature or are unwound is the right direction. That would accomplish more than any other regulatory change to the industry.

Furthermore, on a broader scale the notion reemphasizes a point I’ve made in earlier blogs: When we make people owners of creative resources and value-generating processes they are more likely to act with a social conscience.

March 17, 2009

Wall Street: Is Greed the Problem?

Lori and I stick to a budget today and we worry about the next tuition installment with three boys at school. We, like most people, have seen our 401K—not to mention the equity in our house—drop like a rock in value. We’d like to sell our place and buy something smaller, but that might not be possible for years to come. I don’t know when I’ll be able to retire.

One day, while I was pondering these circumstances, I began to apologize to Lori about the twists and turns in our lives. We didn’t start out wondering how to make paychecks last. At one time we didn’t worry about money at all. Saving was something we could do without much thought or planning, but not anymore. Before I could finish my apology, Lori interrupted with what I thought were the kindest possible words: “I love that you turned your back on a good paying career to be a better person.”

I had to look away so she couldn’t see the feelings running through me—emotions as varied as they were powerful. On one hand, I felt grateful that she believed I’d left Wall Street to become a better me, but in truth, I wasn’t sure it was the best explanation for what I’d done. In the back of my mind, I’ve always wondered if I simply wasn’t tough enough to keep going.

It took me a long time before I could think of those years without hyperventilating or feeling a wave of nausea. Today my memories of Wall Street are accompanied by a feeling I can only describe as a murky cloud. It’s the same cloud that sought to engulf me every day I sat at a trading desk. Perhaps you will understand a portion of what I’m saying if I mention that I started my career structuring CDOs and went on to run a Structured Product desk that turned out, among other esoteric instruments, Credit Default Swaps. Both, as you probably know, have been significant contributors to our current financial debacle.

What you won’t know, however, is how much of my business was about avoiding regulations that were meant to protect shareholders and the integrity of financial markets. Nevertheless, I can say without equivocation that I never did anything illegal. In fact, I can point to a mountain of legal opinions to prove it. But therein lies the conundrum: If you need a legal or accounting opinion to prove you’re in compliance with regulations, chances are you’re trying to get away with something.

I learned early on that the most profitable Wall Street deals never appear on trading screens or League Tables, but are consummated quietly in order to hide embarrassing situations or past mistakes. Since confidentiality is always essential for these quiet deals, they're seldom subject to open bidding. Many are meant to fabricate income that isn’t really there, or avoid losses that really are. Some are tax-related and designed to assign losses to a party that needs them.

Even as I tell you this, I know what you’re thinking. I know because I've heard dozens of people say it, including the President: There's too much greed on Wall Street. Yet, if that’s the case, then I must suggest the problem is not limited to high finance. I’ve met executives from a range of industries who were just as greedy as people working on trading floors. If greed is the underlying problem with our economic malaise, it’s a general problem of which the majority of Americans are at fault. I will, in future blogs, describe the cause of Wall Street's risk taking and management problem and what can be done to fix it (Surprise! The solution is related to ownership!) but for now let me say this: Maybe I wasn’t tough enough to survive Wall Street, but I’m certainly a better person for having left it.

March 15, 2009

On the Prospect of Being a Grandpa

Shh…this is just between you and me, okay? I have a secret. You see, it appears that I’ll become a grandfather in June. Consider yourself informed. Now, mum’s the word.

At first, the news wasn’t easy for me to accept. It was another reminder that I was heading inexorably toward creaky-limbed old-fart status. What was to come next? Adult diapers and soft food didn’t seem too far behind it. Then something remarkable happened: I saw that little girl on TV. You know the one—the precocious child who demonstrates how to email a photo of her pet fish and ends the commercial by saying, “I’m a PC and I’m four and a half.” Suddenly, I wanted one exactly like her.

My change of heart is due, in part, because my daughter-in-law, Piper, is a beautiful young woman from China, whose childhood pictures remind me of that PC girl. But there’s more to it than that. During the twenty seconds, or so, while the commercial played, I was reminded again of the reasons we cherish children and how much we can learn from them.

Here are a few ways they are infinitely superior to us old coots.

Children are refreshingly honest. Even when they stray, they don’t make excuses. Listen to a child ask for sweets and what do you hear? They don’t say, “Nine out of ten dentists claim this is good for your teeth.” It takes them a while before they can justify, cajole and haggle like an adult. All they say is, “I want it.”

Children believe in magic. They jump from stumps and fence posts, run like the wind and act like masters of the universe. And because they are unburdened by adult fears, they are free to be motivated by love and the best of all intentions.

Children invest in dreams. I'm not speaking of our day-time musings or even our night-time fantasies, but rather the sense for who we can become. This sense is important, because the alternatives to proper dreams are horrific. In fact, it’s difficult to imagine anything as frightening as a human being with evil intent, unless it’s the mass of humanity with no intent at all. And while most adults have spent their dreams, children continue to invest in them. In the end, it’s what will save us all.

Children are insatiably curious. Despite their natural tendency to believe everything we say, children still ask “Why?” It’s the best of words. I’m sure a youngster invented it and it’s the driving force behind a child’s incredible growth.

Children are fair to a fault. Take the youngest child out for an ice cream cone and he or she will insist that you take more home for the siblings. They are our fairness monitors and they fulfill their roles to perfection.

On second thought, tell the world my secret. I’m starting to feel pretty darn good about the prospect of being a grandpa.

March 8, 2009

Why Noblesse Oblige IS Important

Do you remember that awful moment in American history, when the big news of the day was about a stain on an intern's dress? Do you recall the incredulity we felt as the Starr Report was published for the world to read and how we weren't sure what was worse: the arrogance of a man who'd deemed himself untouchable, or the incredible waste of time and energy the arrogance had caused?

At the time the facts were emerging, my family and I were living in Japan and my children were going to the American School on the outskirts of Tokyo. One morning my oldest boy got into trouble for making a reference to subject matter that had been covered in great detail in the media. When the school called to tell me of the punishment he would receive, I couldn't help but see a terrible irony in the situation. Both disappointed and embarrassed, I wrote the following letter, which was published in the Japan Times. Please, let's not ever say character doesn't count.

Dear Sirs:

Today my fourteen-year old son was told that, as punishment for something he said, he won’t be welcome on the school bus next week. This action raises an interesting question regarding what is–and is not–acceptable behavior.

The facts are not in dispute. There was a conversation at the back of the bus regarding the Starr Report. A boy asked a question that, though tasteless, was consistent with the juvenile curiosity of those involved. He speculated as to whether Ken Starr asked Monica if she, “spit, or swallowed.”

As a course of observation, my son replied, “There’d be no reason to ask that since the evidence was on her dress.” People within earshot agree: This was his only contribution to the discussion. However, a parent, who happened to be sitting nearby, complained to school officials. As a result, several students, including my son will have to arrange alternative transportation next week.

I won’t fight the punishment. I think it’s reasonable to maintain standards of taste and decorum. But what of Bill Clinton? In a world where a young boy can be punished for making a comment no more vulgar than the factual events detailed in the Starr Report, what lesson have we taught the most powerful man in the world about the acceptability of his behavior?

Yet more importantly, what underlying message have we passed on to our children? One thing is for sure; my son has learned a lesson and it’s not a pretty one. He might say: If you’re the president, it’s okay to engage in illicit sexual activity. Moreover, you can lie about what you’ve done and even get others to lie with you.

But if you’re a fourteen-year old boy, watch yourself. Don’t even talk about what the president does. That would be too vulgar.