What's in the New York Times Magazine, the Economist, Time, Vanity Fair, and The Nation.

Summaries of what's in Time, Newsweek, etc.
Jan. 2 2009 6:13 PM

Black Swan Song

The New York Times Magazine on the deceptions in financial risk assessment.

New York Times Magazine, Jan. 4
Joe Nocera's cover story is a biography of the Value at Risk banking metric, which tends to conceal the small probability of massive losses. For example, Nocera notes, the odds that a $20 million Value at Risk trade will lose more than $20 million are only 1 percent. The problem, Nicholas Nassim Taleb tells Nocera, is that "more than $20 million" includes both $21 million and $21 billion, and in reality those who relied on Value at Risk failed to foresee those massive "black swans"—Taleb's phrase for extremely rare but catastrophic events. Taleb's hedge fund, designed to exploit such foul fowl, is up more than 65 percent this year. But a risk manager says of Value at Risk: "It's like an altimeter in aircraft. It has some margin for error, but if you're a pilot, you know how to deal with it." ... Caroline Kennedy's desired Senate appointment prompts one author to suggest an updated notion of "experience" that is more fair to women, whose career trajectories are less likely to fit male-imposed norms. "Let's stop with this talk of inexperience when we mean a range of experiences."

Economist, Jan. 3
The cover editorial characterizes Israel's decision to bomb the Hamas-controlled Gaza Strip as an understandable response to Hamas' continuous firing of rockets into Israel. But it goes on to argue: "Since Hamas is not going to disappear, some way must be found to change its mind. Bombs alone will never do that." For its part, Hamas is justified in seeing a casus belli in Israel's economic blockade. While the magazine does not see the hundreds of Palestinian and few Israeli dead as necessarily disproportionate if only combatants are being killed, they assert that too many Palestinian civilians have perished. … An obituary for Samuel P. Huntington honors the intellectual who was able to predict in 1992 that "the future was being forged in the mosques of Tehran and the planning commissions of Beijing rather than the cafés of Harvard Square." But Huntington's broader and endless pessimism over the future of the West may (and hopefully will) be less prophetic.

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Time, Jan. 12
The cover story champions energy efficiency, "often ignored" amid the search for cheaper and cleaner fuels, as the solution to the United States' energy problem. "Doing less with less may be admirable," the author says, "but efficiency is about doing the same or more with less." The government should encourage efficiency by establishing strict auto and appliance standards, rewarding power plants that save power, and targeting economic stimulus toward green technologies. ... Joe Klein cheers the elevation of top George H.W. Bush foreign-policy adviser and consummate realist Brent Scowcroft from stigmatized outsider during the past eight years to informal adviser to Barack Obama, as well as mentor to the president-elect's picks for defense secretary and national-security adviser. Klein says Scowcroft's resurrection is evidence that "[n]uance, negotiation, alliances, diplomacy—and the use of force only in concert with others or when U.S. interests are directly threatened—are back."

Vanity Fair, February 2009
An "Oral History of the Bush White House" includes musings and remembrances from Treasury Secretary Henry Paulson, U.N. weapons inspector Hans Blix, and roughly three dozen more officials, advisers, and eminences. While covering many events, the article concentrates on the Iraq war and the response to Sept. 11, about which Bush/Cheney '04 pollster Matthew Dowd bemoans, "There's this West Texas thing in him, which is the—you know: Bad people are comin' to town. Everybody go back to their house. I'll take the burden on. Which, you know, may work in a Western town, but doesn't work for a country that wants to be part of that conversation." ... Michael Wolff reports on how scarce capital and credit are preventing Blackstone, KKR, and other private equity firms from buying up underpriced public companies.

The Nation, Jan. 12
Two authors call for "a permanent expansion of the social contract," proposing $1 trillion in infrastructure spending plus financing for an expanded social safety net. Getting the former would be easy for Obama; to accomplish the latter, "He'll have to forget about the 'postpartisan' era of good feeling that is all the rage. The creation of a new New Deal will be the mother of all battles." ... Another author says Obama should urge those countries whose economies are in current-account surplus—China, the petrostates, Japan, and Germany—to stimulate domestic demand so they can be "the collective substitute for the American locomotive." ... Eric Alterman indicts Charles Rangel, Harlem's longtime Democratic congressman, for engaging in extensive corruption and lumps him in with Illinois Gov. Rod Blagojevich as "exactly the kind of politician—regardless of ethnicity—from whom Obama and Company need to disassociate themselves."

Must Read
Joe Nocera's Times magazine story is ultimately agnostic on how well Wall Street risk analysis works, or could work, and so those hoping to find hard-and-fast answers about the financial crisis should look elsewhere. But the story is still an exciting piece of ideas journalism and worth the time.

Must Skip
Where Robert Draper's GQ article presents a genuinely complex portrait of George W. Bush sure to give pause to supporters and detractors alike, Vanity Fair's oral history of the Bush administration announces nothing apt to unsettle the administration's critics and contains nothing potent enough to dislodge anyone who is still standing by the president.

Best Politics Piece
Charles Krauthammer's impassioned call for a net-zero gas tax in the Weekly Standard outlines several new arguments for a much-argued-for initiative. He manages to make the policy appealing to conservatives beyond the fact that it theoretically will cost nothing, while environmentalists are unlikely to quibble at his repeated declarations of uncertainty concerning global warming given the green-friendly character of the proposal itself.

Best Culture Piece
An appreciation of book editor Robert Giroux (he of Farrar, Straus, and), who died last September at 94, offers obligatory nostalgia for the golden days of publishing while using the example of Giroux to debunk that very mirage: Giroux, after all, came to FSG because of the "same frustration with bottom-line publishing that drives literary editors to drink today." As publishing finds itself on the ropes, houses will need to continue to sustain the balancing act of publishing editor-pleasing and culturally valuable literature along with the "junk" that really sells.

Consensus of an Emerging Consensus
A New York piece quotes Obama as having " 'enormous sympathy' for 41's global approach" to diplomacy, points out that "the younger Bush has shifted during his second term away from crazy-ass neoconservatism to a posture more like Bush the elder's," and concludes that George H.W. Bush's "pragmatic realism looks more and more like the essence of an emerging new consensus in foreign policy." In Time, Joe Klein identifies the dramatic rise in influence of the realism espoused by Brent Scowcroft—Bush 41's national-security adviser. And Vanity Fair's oral history contains realists such as former Colin Powell chief-of-staff Lawrence Wilkerson testifying as to how a greater dose of realism in Bush 43's first term might have led the administration to evade some of its greatest failures.

Marc Tracy is a writer living in New York.