That a martini counts as two drinks, not one, was just one of the startling facts I learned from addiction doctor Arnold Washton at the Princeton Chamber breakfast on January 14. Washton counsels CEOs, doctors, and lawyers who realize they have a problem but who don’t want to declare themselves alcoholics. As financial problems rise, so will addiction rates, he predicts. Neither animals (lab rats) nor humans handle uncertainty well.

Washton is a substance abuse consultant for Princeton House Behavioral Health who has his own consulting practice, and he spent 10 years working with heroin addicts in Harlem. He says it is hard to pick out a substance or alcohol abuser in the workplace. “I can’t remember the last time somebody walked in my door looking high or drunk,” he says. Abusers build up tolerance.

It doesn’t matter what you choose – beer, wine, or distilled spirits – to relieve your anxiety, says Washton. The brain responds to the concentration of alcohol in your blood. “Every time you take a drink, you are playing with your brain chemistry.” Some alcoholics don’t drink every day – they go on binges, or maybe they drink on the weekends.

“People gravitate to substances that work, but the substance betrays them,” he says. Caffeine and nicotine are addictive, but they do not induced aberrant or psychotic behaviors that lead people to do crazy, self destructive things. For information, go to SAMHSA’s National Clearinghouse for Alcohol and Drug Information.

For those whose problem falls short of addiction, Washton offers the hope of continuing to drink in moderation. The upper limits for what can be considered a moderate drinker: For a man, three to four units of alcohol per day, but no more than 14 per week. A unit is 5 ounces of wine, 12 ounces of beer, or 1 shot of distilled spirits (martinis count for two). It’s that “14 a week” that’s key. You can’t drink three beers a day every day and still be counted as a moderate drinker.

For women, the moderate level is 2 to 3 drinks per day, and only 7 per week. (I’m such a cheap date that I’m pretty much done in by 4 ounces of wine.) Those with a family history of addiction should observe a lower limit. Medication affects the limits, and alcohol makes sleep problems worse.

To cut down to “moderate” levels, his patients must abstain for one or two weeks. He presents it as “an interim period of abstinence” versus requiring them to attend an AA meeting. “It doesn’t work to tell them to stop drinking for the rest of their lives. For my patients, that’s unthinkable. The more severe the problem, the more reluctant they are to give it up.” After the abstinence period, the patients help set their drinking rules. “When they fail miserably, they see it is what they did.”

Some eventually realize they need to abstain. “I pair them up with another high profile business executive who is already going to AA.”

The best advice: Don’t drink when you are upset. Break the cycle of self medication.

Eric Maskin, the Albert O. Hirschman professor of social science at the Institute for Advanced Study, has addressed several business groups in the last year, including chambers of commerce in Italy and China. Based on his theory of mechanism design – for which he shared the 2007 Nobel prize in economics – he explained the basics of this financial crisis to the Princeton Regional Chamber of Commerce today. His 20 minute lecture, at first, might have seemed almost elementary. But Maskin’s “elementary” is also “elegant” in its simplicity.

It reminded me of how my father taught human anatomy, presenting the information like a story, on a very basic level. Often the medical students thought they knew it already. Years later they would come back and say, “Remember that lecture you did on such and such? It really stayed with me.”

So although I considered myself ‘well-read’ on the sub-prime debacle, the credit crisis, and the bailouts, I realized — as Maskin took us through it, comparing the credit market to, of all things, the potato market — that I didn’t really comprehend the whys and wherefores. Then he introduced the economists’ term “externality,” the effect your actions have on others that you
don’t take into account. That added a whole new facet to my understanding.
I asked him for his Power Point notes, and he obliged.

Financial Crises: Why They Occur and What to Do about Them

Eric Maskin

Institute for Advanced Study

Princeton Regional Chamber of Commerce

January 8, 2009

• Current financial crisis

– only latest in long sequence

– history of credit crises goes back hundreds of years

• probably crises will continue in future

– each crisis somewhat different

– even if we “fix” mortgage loan market, something else will happen

• Today’s topic:

– why do credit market have repeated crises and other markets don’t?

– why does credit market require substantial intervention (and others don’t)?

Why is credit market different?

(1) credit lifeblood for rest of economy

− if crisis in market for potatoes, won’t bring down market for automobiles

− if credit market doesn’t work, enterprises in all markets will have trouble investing and meeting payrolls

(2) small shock to credit market often magnified

− if some potato growers fail, won’t cause other growers to fail

− if some banks fail, may well cause other banks to go under

(3) credit market not self-correcting

− if some potato growers fail, others will step into breach no outside intervention needed

− if some banks fail, credit market can get “stuck” – – no banks willing to lend

Elaboration on points 2 and 3

• Suppose drought wipes out potato crop in Idaho

• What will happen?

– immediate effect is fall in overall potato output

– but demand hasn’t changed – – fewer potatoes to go around

– so price of potatoes will be bid up

– induces other potato suppliers to grow and sell more

• So potato market “self-correcting”

– crop failure hurts consumers in short run – – higher prices

– but high prices induce suppliers to expand output

– so effect of drought mitigated in long run

• Government intervention not needed

• Government interference in potato market likely to make things worse

• Suppose puts cap on potato price or taxes “windfall” profits

– discourages expansion of output that can make up for crop failure

– this creates potato shortage or black market in potatoes

• Credit market is just the opposite

• Suppose a few banks get into trouble

– make subprime mortgage loans

– borrowers can’t repay loans and housing prices fall, so can’t refinance

• these banks have other borrowers

– have to call loans in on these borrowers

– so borrowers have to scale back activities that depended on these loans

– thus will have harder time repaying loans from other banks

• so these other banks now may get into trouble

– may have to call in loans from their borrowers

– and refuse to make new loans

• what started as a local problem (subprime mortgage lending) spreads

to entire credit market

• initial problem not self-correcting (as in potato market)

– gets aggravated

– end up with credit crunch

• in economics jargon, bank exerts an externality on other banks by calling in loans

– externality: effect your actions have on others that you don’t take into account

– when bank calls in loans, puts other banks in jeopardy

– but doesn’t factor this effect in when calls in loans (not harmed by it)

• markets with significant externalities often don’t work well on own

– take clean air, for example

• Why isn’t there a market for clean air?

• in fact, there is such a market, but so limited we hardly see it

• suppose laundry next door to steel plant

– smoke from steel plant interferes with laundry

– laundry may offer to pay steel plant to reduce smoke (so market for smoke reduction exists)

– but smoke doesn’t just affect laundry – – affects many others

– by paying for reduction, laundry confers benefit on these others (externality)

– laundry doesn’t take this into account

– so likely to underpay for reduction – – smoke not reduced as much as should be

• solution: government imposes cap or fine on smoke emissions by steel plant

Solution for credit market:

If some banks get into trouble,

• government can bail them out

– infuse with capital so can continue to lend

• but bailout important primarily for other banks that would be hurt if bailed-out banks failed

Bailout policy comes at cost:

• if banks anticipate being bailed out when get in trouble

– have incentive to take on highly risky loans, e.g., subprime mortgage loans (moral hazard)

• so solution to financial crisis actually makes crisis more likely!

• Hence, bailout policy only partial solution

• Also need to regulate banks

– e.g., impose rules preventing subprime loans

• bailouts and regulation go together

• Actually, two reasons why regulation needed

– prospect of bailouts induces banks to make too risky loans

– bank ignores externality imposed on other banks by too-risky loans – – undervalues cost of these loans

• If credit crisis allowed to spread to rest of economy, bailout policy may be insufficient

• just as important externalities in credit market, important externalities at level of whole economy

• Suppose one employer lays off workers (because it loses credit line)

– workers lose income

– demand less

– other employers get into trouble

– they lay off workers

• So, “stimulus” for real (nonfinancial) economy needed

– purpose: to prop up demand, so employment kept high

• temporary measure: until credit market healthy again

• Well-designed regulation/bailout package

– can prevent “many” crises from getting started – – rules against subprime loans would have prevented this one

– can resolve them if do occur

• stimulus package needed if bailout applied too late

• can’t hope to prevent credit crises completely and still allow for creativity

– can’t anticipate all possible innovations by banks

– so can’t have rules that prevent only harmful innovations

• But can do a lot better than we’ve done this time.

College professors may tut-tut about their students’ writing these days, and I like to blame the Microsoft Word program for fostering mediocre grammar skills, but elderly laments about this are nothing new. I remember a particular Christmas Eve day when my father memorably complained about the composition skills of his first-year medical students.

December 24th was generally the day after the practical exam at the University of Maryland Medical School, where my father taught gross anatomy, edited an atlas of anatomy, and did cancer research. On that day my parents would surreptiously stow Santa’s treasures in the trunk of the 1948 two-door Ford and drive up Route 1 from Baltimore to my grandparents’ house near Philadelphia, enjoying the colored lights and singing Stille Nacht, in German, on the way.

But until dusk fell we would spend our time grading those exams – my father, my older sister, and I. That may seem shocking, but from an early age, we helped out. It was like being in retail and living over the store.You mixed business with pleasure, and you did what you could to contribute to the family business. A four-year-old can put handfuls of sawdust in a mouse bowl. A six-year-old can transfer mice from a dirty bowl to a clean bowl.

For the bluebooks, my sister and I, probably ages 10 and 7, were each responsible for one simple question, and our cue cards told how many points to award each of the possible answers. On one of those Christmas Eve days he turned the air blue when he read this answer: “The body is a mechanical mechanism.”

I didn’t really know the meaning of the vocabulary word “redundancy,” but that night I learned to avoid it. It was just one of the life lessons I learned that Christmas Eve. From my mother I learned that nothing is ever too much trouble to do to make loved ones happy — not just making wonderful presents for children, but also making the trips, unfailingly on Christmas, to grandparents.

The Princeton Regional Chamber of Commerce finished up 2008 with a December 3 gala at Jasna Polana that honored Jack Morrison (the restaurateur), Kurt Landgraf (of Educational Testing Service) and Janet Vergis, of Janssen, McNeil Pediatrics & Ortho-McNeil Neurologics.

It was the first chamber gala I’ve attended, and I must say I was pleasantly surprised about what a delightful evening it was. It was twice as long as the usual chamber function, and in luxurious surroundings, and everyone was in quite a festive mood — in spite of the fact that eight of the people attending had had a grueling day (the previous day) interviewing potential candidates for the CEO job.

I am on the board of this chamber and thankfully not on that search committee, which was inundated with lots of highly qualified applicants. But I am quite happy with the search committee’s choice, voted on today, the name to be released next week.

Odetta died, at age 77, on December 2. I’ll always cherish her music, but I will especially cherish the message that she delivered to me, directly, just to me.

It happened a couple of years ago at the Trenton War Memorial, in a weeknight “on stage” concert that was one of Molly Sword McDonough’s many triumphs at that venue. At these intimate concerts, tickets were limited to how many could fit on stage with the performer. My ebullient friend and I – the two of us are unquenchable extraverts – could barely contain our excitement at seeing, live and in person, our folk song idol, and we arrived early to get front row seats.

Obit writers do a better job of telling about Odetta Holmes than I can here. The New York Times notes that she was one of the most widely known folk-music artists of the 1950s and ’60s, and that she influenced Bob Dylan, Joan Baez, and Janis Joplin. Richard Corliss of Time magazine says, “In her commanding presence, charismatic delivery and determination to sing black truth to white power, Odetta was the female Paul Robeson.”

What I can tell is about this concert. Odetta walked onstage on the arm of pianist Seth Farber (a fabulous performer in his own right, by the way). She would sing her trademark spirituals and protest songs, plus some less well-known challenge blues, as “Rich man, you’re living in your mansions, you don’t know what hard times mean…. If it wasn’t for the poor man, mister rich man, what would you do?”

Her very first song, though, was “This Little Light of Mine,” and she opened with a quote from Marianne Williamson’s “A Reason to Love.” She looked right at me, saying “I want to bring you something about you.”

For unquenchable extraverts like me, these words are validating, liberating. They make it OK to be myself, and they make it OK for you to be yourself.

“Our worst fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness, that most frightens us. We ask ourselves, who am I to be brilliant, gorgeous, talented, fabulous. Actually who are you not to be? You are a child of god. Your playing small does not serve the world. There is nothing enlightened about shrinking so that other people won’t feel insecure around you.”

“We were born to make manifest the glory of God within us. It is not just in some of us. It is in every one. And as we let our own light shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.”

Odetta didn’t really speak just to me, of course. It just seemed so. Everyone in the audience – white, or black, at that moment, we all felt we were brilliant, gorgeous, talented, fabulous, children of God. That’s the power of a great performer. The power of a person with a great spirit is to inspire others to manifest the glory of God.

It’s Thanksgiving morning, and as I wake up, from dreams about what spices to put in the stuffing, I hear the consecutive headlines from my NPR station in Philadelphia: Door to door shootings targeting wealthy Americans in Mumbai and balloons and bands in the Thanksgiving Day parade, a surreal juxtaposition, the top two stories of the day, delivered in the same matter-of-fact newsman voice.

Thunk. Back to the scary world, with its echoes of 9/11.

Wince, my previously okay back goes into stress-mode pain.

Resentment – how can that station make those two topics almost equal, one right after the other? They wouldn’t do that if the terror were in Philadelphia.

Reason kicks in. Of course not, because the parade would have been canceled. The terror is overseas, remember? What makes it different from all the other attacks and suicide bombings is the scale, and what makes it different from other large scale attacks, like the trains in Madrid, is the focus on Americans and British civilians. Yesterday my husband and I personalized the news, thinking about his colleague who will travel to that city next month, and about the family of Gupta, the student from Bombay (yes, it was that long ago, when it was still called Bombay) whom we added to our family Christmas celebration in Pittsburgh.

Bad things happening far away bring one degree of pain, but the pain ratchets up when you have a friend there. (Are we, in Princeton, taking full advantage of the opportunities we have to achieve world peace by befriending the thousands of overseas visitors that spend time here every year?)

Still, I resent the “both things are equal, both things are OK” tone of the Philadelphia announcer. Then Steve Inskeep, the national newsguy in DC (pictured above) comes on, with the same news. My news nose kicks in. I met this guy once. How will he handle this?

Inskeep starts off with an advantage over the local announcer. Because the headline summary is over, he can put all his focus on Mumbai, and he matches his voice to the story, his voice filled with concern. Then he unpacks the story, adding details. Horrible details to be sure, but knowledge is power, as they say, and the details are somehow reassuring. He drills down one layer, to the reporter on the scene, 700 foot from the Taj Mahal hotel. More details. Again, knowing more helps. Then another layer, to an Indian restaurant owner who saw the shootings, and an unidentified man, apparently American, who was in the hotel lobby when the shooting began.

How can these details possibly be soothing? Maybe because, as bad as they are, they are not as bad as my worst fears.

Maybe because Inskeep tells them with the utmost empathy, giving me the assurance that he is distraught as I am about this.

Maybe because – now that I know exactly what happened, I can fashion my own scenarios. What would I do if gunmen stormed my room? Would I be brave, scared, or full of faith and ready to meet my Maker? I hope I would be all three. I guess I’d better start working on that last one.

Twyla Tharp always seemed so New York – frantically quick, unexpected turns of phrase, “distracted from distraction by distraction,” to quote T.S. Eliot. Or so Hollywood, languorously glamorous. So when I heard her 12-year-old Quaker/Shaker work, “Sweet Fields” would come to McCarter, danced by the Aspen/Santa Fe ballet, nothing could keep me away. She had gone back to some Quaker ancestors for her inspiration and used Shaker-like hymns and William Billings for music. I craved the simple lines of a simpler time, the message that faith-filled movement might bring. Had she done it? Had this impatient, wise-cracking choreographer managed, with a straight face, to summon purity, faith, devotion, and simplicity.

Yes. I’m not going to try to describe it on the Sunday morning I’m writing this, as I listen to the Anonymous Four sing similar music on NPR and get ready for church, but the answer is yes.

Aspen Santa Fe came to McCarter on Tuesday, November 18, bookended by the Soweto Gospel Choir on Monday and followed by Emmanuel Ax and Yefim Bronfman playing two pianos on Wednesday. What a lineup.

Re the Soweto – since we moved to Princeton some 25 years ago McCarter has had “diverse” programming. It was here that I first encountered Sweet Honey and the Rock, for instance. Apparently it was not always so. At the memorial service for Fannie Floyd earlier this year, her husband Jim, a former borough mayor, said that Fannie had been instrumental in pointing out to McCarter that Princeton’s African American community were not seeing themselves on stage. Thank you, Fannie.

We bought tickets to Ax/Bronfman early in the season because they were playing my very favorite, Brahms Variations on a Theme by Haydn. My request to use the Haydn theme for my wedding march was rejected by the organist, so I hear it every chance I get.

It’s been way too long since we’ve seen a recital. When I worked a five day week, if I went out at all, it was to see dance, or maybe a symphony. It boggled my mind, to use a cliché, to watch two old masters put their hearts and souls into the old masters. In addition to the Brahms they played a Mozart Sonata in D (K.448) and Rachmaninoff’s Symphonic Dances (Opus 45) plus a Latin-styled confection, “Recuerdos’ by a living composer, William Bolcomb.

To make it even more special, I encountered a third “old master,” Moshe Budmor. (Sorry Moshe, even though we both take Pilates with Anthony to keep us young, we both get senior citizen rates). Moshe is a child at heart; his musical work is play and he loves toys. Together we perused the array of puppets at the McCarter shop, and I was ready to buy the fabulous Snowy Owl, with a head that can turn 360 degrees, but Moshe, an even more experienced grandparent than I, advised against it, because the turning mechanism is too difficult for that age. Perhaps I’ll buy it for myself, to remember the moment.

(A note to the sponsors of the Bronfman/Ax evening, printed as the Robert J. Ciattos and Mary and Ted Cross and the Aspen Santa Fe evening – Katherine Benesch, Adam Burrows, and Mr. & Mrs. Edward B Matthews. Thank you.).

Baryshnikov can etch the smallest movement in your memory, and so can Tina Fehlandt, as she showed last night, Friday, November 21, when she danced ‘Peccadillos,’ a Mark Morris solo that has been danced by the famous Russian and by no woman, until now. It opened a program called “Now Dance,” choreography and/or performances by faculty and guests at the Hagan Dance Studio on the Princeton University campus and repeats tonight. The performance is sold out, but first-comers can usually snag an uncollected ticket.

Fehlandt, who danced with Morris’ company for 20 years, was accompanied on the requisite toy piano by music of Erik Satie, played sensitively by a scrunched-up David Tenney. From toy soldier-sharp angles, to sweeping-open circles, to breathfilled swings, to angst-filled clutches, she and Tenney made little jewels out of each variation.

Rebecca Lazier, the acting department chair, brought a four-person company for two works, this year’s ‘Terminal,’ with Ravel’s Bolero-based music by Gregory Spears, and excerpts from an in progress work, “Coming Together,” with a voice and sound score by Frederick Rzewski, referring to the massacre at Attica state prison. I found the prison one more compelling. Though in its current version it lacks a discernable climax, the coupling of the four dancers had a compelling ebb and flow. Jennifer Lafferty, Rommel, Salveron, and Storme Sundberg are all beautiful dancers, but Emily Stone – very tall, she towers over the three – was especially wonderful to watch.

Todd Allen and Ying-ying Shiau’s excerpt from Zvi Gotheiner’s ‘Interiors’ was a tour de force of elasticity. Confined to a chair, they moved back and forth, in and out, over and under, coming apart and returning together in an endless number of ways, just gorgeous dancing.

Jason Herbert was impressive as a young boxer in a work by Dyane Harvey-Salaam, against a background of Cassius Clay/Mohammed Ali photos and words, a collage of interviews, and music from a film. It was witty, poignant, and inventive, and it is perfect for touring to schools and youth programs.

Patricia Hoffbauer took a 1962 Yvonne Rainer piece, ‘Three Seascapes,’ out of mothballs. I tried to call up that Judson Church period, when this dance was a protest, and I could imagine just how revolutionary it was. First she jogged around with her hands stuffed in her raincoat pockets, exuding determined energy in complicated floor patterns. Then a too-strong chorus of coughers gathered at a mike while she danced repeated phrases of exhaustion and sickness. In Rainier’s version of Fokine’s ‘Dying Swan,’ she used tulle to have a tantrum. Audience members without any historical context laughed out loud. It did look funny, out of context. Just a little program note, just a little verbal introduction, would have clued them in and helped them to appreciate it.

Ze’eva Cohen’s ‘Cloud Song’ was a more effective throwback to the past. Nicely danced by Elizabeth Schwall, a Princeton senior and the only student dancer on the program, it ended with a film of the young Ze’eva. Beautiful.

I’m going to post this right now, without much proofing, without adding all that I might like to include, on the odd chance that someone may see it and try to get to the program tonight. It’s been years since I wrote dance reviews on a regular basis, and it’s really hard to make myself do it again. If I labor over them, I’ll never get around to them. So – what you see is what you get. Though I may add some second thoughts later.

I started this Friday night and finished it Saturday morning. Now I’m off to the electronic recycling day, which comes only six times a year, with my car full of old technology – used hard drives, discarded phones, yards of wire. Dance may be evanescent. Old dances may be hard to reproduce. But it’s certainly more useful and important to the world than old technology.

PS. Anybody who sees errors, please tell me. Anybody with a different or similar opinion, please comment.