Two Sides to the Storm

It’s natural to think a problem is solved when your problem is solved. For instance, when you get a new job, “the recession is over!” I got to observe this pattern in myself when I got my power restored after a 4-day outage that followed the most damaging ice storm in my county’s history. With power on, I had to turn my attention to getting my house working again. At that point 1/8 of the county was still without power. As of this morning, the outage rate had fallen to 1 in 250, but that is a lot of people. It took 6 days to restore the electric lines to the level of trouble that people gripe about after a more typical severe summer thunderstorm.

There is a big difference among people in the way they view a crisis depending on the random chance of their own experience. If you talk to those who were most affected and those who were least affected, you hear the two sides of the story. People who never lost power may already have forgotten that the storm happened. Those still waiting for the lights to come back may understandably see the storm as one of the defining events of the year.

This Week in Bank Failures

A German court worries that the European Central Bank’s Outright Monetary Transactions (OMT) program may not be permitted under the bank’s charter. The Constitutional Court worries about the selectivity of bond purchases under the program, though the bank has yet to make any such purchases. The Constitutional Court has referred the matter to the European Court, which is now obliged to take up its own review of the legal questions involved.

In China, an insolvent bank-sponsored hedge fund, Credit Equals Gold No. 1, was rescued somehow. An investor, who has not been identified, bought the problem coal-mining debts that had provided the starting point for the hedge fund. The investor is thought to have been financed by the banks involved in the fund, along with government authorities wanting to save both the shadow banking system and the coal industry from collapse. The coal executive behind the loans was removed and charged with securities fraud in 2012.

First S&P, then Moody’s, downgraded Puerto Rico, so that its bonds are no longer considered investment-grade. Puerto Rico has faced public financing troubles for about eight years. Its financial situation has been compared to Detroit and Greece. Political difficulties and policy stagnation have prevented obvious partial solutions from being implemented. The heart of Puerto Rico’s problems, though, is the weak U.S. economy.

Ice Storm

A snowstorm turned to ice early yesterday and by sunrise, with the weight of the ice, I could hear trees and large branches falling in all directions, one after another. Several fell onto my street; one hit the roof of my house and bounced off. It did no damage but had to be cut in four places to restore access to my back door. When so many branches fall, some are sure to hit power lines, and a day later, most of the county and large parts of about eight nearby counties are without electricity. Trees fell onto expressways, and stretches of highways remain closed today because of downed trees. But there aren’t always alternate routes; some side streets and back roads are too icy to drive on.

I had heard about this kind of damaging ice storm, particularly the one that had shut down Quebec for two weeks some years ago, but this was my first time being in the middle of one. Facing the prospect of being without electricity, heat, running water, and Internet for five days, my best option was to evacuate to another county, less hard hit, where I could keep working. Others staying home have had to find places where they can wash, recharge cell phones, connect to the Internet, or warm up — actions that on better days are more or less automatic at home.

The sudden loss of electricity offers an abrupt change in perspective. You don’t realize how much you rely on electricity until it is not there. Even then it can be confusing. At a supermarket running on backup power, I saw one customer who didn’t understand why the conveyor belt at the checkout wasn’t running. Others were perplexed that stores and restaurants closed their doors when the power went out. The inaccessibility of transportation and communication have their own effects. I saw firsthand how the difficulty of driving and walking on tree-strewn streets leads to a risk-averse mentality, in which even a three-block shopping trip is avoided if possible. Similarly, after a day of not being able to make cell phone calls because of declining batteries and limited network capacity, I found that I stopped thinking in terms of voice calls. The resulting changes in habits won’t reverse immediately when the crisis is over.

European Commission Measures Culture of Corruption

How widespread is corruption across Europe? The European Commission released a report on the subject, and the English-language electronic title of the report includes the prefix “Microsoft Word,” as if to say, “Even naming rights for our official reports are for sale!” Of course, it is also possible that the inappropriate product placement was the result of a questionable government software purchase followed by a series of editorial errors and omissions, but I am not sure that is the more charitable interpretation.

The substance of the report is itself cause for concern, with the overwhelming majority of citizens surveyed across every EU country saying that official corruption is widespread and getting worse. Only 4 percent said corruption was “very rare.” One likely indication that corruption is indeed getting worse is that respondents between 15 and 24 years of age and students were far more likely to see corrupt practices as an everyday part of government operations, when compared to respondents 55 years of age and older and retirees.

But the electronic form of the report is perhaps the most stark reminder of how widespread government corruption has become. How could the signs of corruption go unnoticed on the government’s own report on the subject, but that government officials see these signs so often that they have stopped noticing?

NFL Beats Storm Front

The NFL’s big cold-weather outdoor game was last night, and the big snowstorm also arrived during the night. There wasn’t time to take a deep breath between getting the cars out of the parking lots and watching the first snowflakes hit the ground. The NFL may have avoided having its biggest television event of the year fouled by winter weather, but it was a close call.

Everyone knows that when you plan on the weather, you take your chances. The NFL had a range of contingency plans, but it must be happy it did not have to use them. My guess is that the NFL won’t worry so much about what might have happened if the storm front had arrived a few hours earlier as it will about the lopsided halftime score. I happened to be out in the early minutes of the third quarter last night, and the traffic jams were not formed by people trying to beat the storm. They were fans who had seen the part of the game that mattered, and with the party breaking up, were making their way home.