Thursday, July 13, 2017

Competing views of history

I belong to a private facebook page that was created to discuss issues relating to generational theory.  It has a fairly broad range of opinion, including a few Trump acolytes.  The other day we got into a discussion of the nature of p.c. One poster, a bright young man who has just graduated from college, made the following comment to explain the modern leftism to which he has been exposed in college--but clearly without adopting it fully.  Keep in mind that the author is only 23, I believe, and probably has only some dim memories of Bill Clinton.  I have edited slightly just for readability. 

"Many view the progression from slavery -> Jim Crow -> what people call "New Jim Crow", as an all-around trajectory of progress.
Ta-Nehisi Coates views it as the culmination of an intentionally subtle and insidious web of formal and informal institutions descendant from slavery. Same with people who view crony capitalism and income inequality as more sophisticated incarnations of aristocratic and/or oligarchic systems from the past, designed to entrap citizens. Same with a Glenn Greenwald or Oliver Stone, who look at the military industrial complex + surveillance state + multilateral institutional architecture, and see an intentionally complex web of systems and institutions that entrench (what they call) Western imperialism and make it hard to step away from.

"A lot of it is based in Critical Theory/Marxism, which we discussed a ~month ago. Left philosophy/ideology is based in a goal of emancipation from old exploitative systems. Thus leftists (Coates, Stone, Greenwald) have far more cynical perspectives of America that say we're simply moving into more inconspicuous--thus unseen and difficult to prove to well-to-do decision-makers far away from issues of the underclasses-- incarnations of slavery in the social realm, an oligarchic + crony aristocracy in the economic realm, and imperialism in the foreign realm. You're right, it isn't the full story/perspective of history, but it is one side of the coin that we have to be aware of. It's why people on the left view incremental change as a non-starter. It's viewed as preserving or further entrenching descendant systems of: slavery, oligarchy, and imperialism.

"Imo, the tricky part is that those views of our social, economic, and foreign paradigms are more true than false. The part I've grown to criticize, is the inherent cynicism that accompanies this view of history. Coates says, we still have significant forms of oppression, inequality, and imperialism entrenched complex institutions; it's a tragedy that says exploitation is both feasible and profitable without much consequence. On one end, leftists may be driven to activism. On the other hand, leftists may say, "America is hopeless" while only despairing about our society without getting politically involved because the system is too icky to reformulate from the inside.

"Ideally for me, we'd recognize how complex and dichotomous America is, being conscious of our institutional history while not neglecting how we overcame/evolved beyond certain paradigms and behaviors. To me it's as simple as, positive and negative exists; it's part of life. In my more romantic view, challenges create stronger people and societies if we confront them without fear, but rather with an interest in creating success stories and improving life."

What struck me is that John had grasped the essential belief of Ta-Nehisi Coates, Oliver Stone, Glenn Greenwald, and many others: that the system is hopelessly rigged and always has been.  That is a slight oversimplification in Stone's case, at least, since he has made clear at various times that he thinks American history might have been very different if Henry Wallace had remained  Vice President in 1945, or if John F. Kennedy had not been assassinated. (For the record, I think things would have been quite different had JFK served out two terms in the short run but that we would probably be in about the same place now anyway.)  Coates, whose father was a Black Panther in the 1960s, has emerged as the Generation X's leading spokesman for black rage, in the tradition of James Baldwin (GI), Eldridge Cleaver (Silent), and Nathan MacCall (Boomer.)  Fame and fortune have if anything made him more shrill, and at a recent event on Harvard and slavery, he said,
“We talk about enslavement as though it were a bump in the road,” nd I tell people it’s the road, it’s the actual road.”  The idea that the United States is fatally flawed by original sins of racism, sexism, and homophobia is extremely popular in academia and has been eagerly embraced by many young protesters on campus.

My own view is close to John's, but I would put it differently.  Yes, racism has always existed in the United States and had terrible consequences, beginning with the introduction of slavery and continuing to this day.  Yes, corporate power has posed a potential or actual danger to liberty, as recognized by Presidents including Jefferson, Andrew Jackson, Teddy Roosevelt, Woodrow Wilson, Franklin Roosevelt, and John F. Kennedy.  Yes, women could not vote until 1920 and did not begin to secure equal rights in the workplace until the 1960s.  Yet I would always keep two things in mind.

The first and most important is to take a broader historical perspective to place US history in the context of world history.  White males in Europe and the US did not invent racism, economic oppression, racism, homophobia, or imperialism.  All those phenomena have characterized all the major civilization that we have been aware of since the beginning of time.  Few, if any major ethic groups now live on land which they did not take from some one else. Economic inequality has been the norm, not the exception, for most of human history, especially among developed civilizations.  To get specific, in the context of western civilization, Ta-Nehisi Coates is wrong: slavery in North and South America was a detour from the road. It had been abolished in western Europe well before the 16th and 17th centuries, when settlers introduced it into the Americas.  They did not bring their slaves form Europe, but bought them in the very active slave markets of West Africa, where different tribes continually enslaved one another.  The United States fought a successful and very bloody war to abolish it, after most of the Latin American nations and the colonial powers in the Americas had already done so.

What distinguishes western civilization in general and the United States in particular is that they were the first civilization to develop a doctrine of equal rights, and to design institutions based upon it.  Of course their original application of the doctrine was limited to free men, but they did not state it in that way--certainly not in the US Constitution--and inevitably, excluded groups were going to demand the rights proclaimed in founding documents. The same drama played out rather rapidly in the European colonies elsewhere, as soon as South Asians, Vietnamese and Africans were educated in the principles of British and French liberty.  Unfortunately, very few young people learn much about the true history of civilizations before the modern era nowadays, and are more likely to learn about the hopeless defects of the West.  In the last 30 years colleges and universities have usually replaced Western Civ with World History, which often turns into the story of the west's exploitation of the rest of the world.

The history of the United States has in fact been divided into periods tending towards more democracy (1801-1836, 1861-1876, and 1901-1980) and those tending towards oligarchy and corporate power (1787-1800, 1877-1900, 1981 to the present.)  An understanding of those different periods would allow young people today to see where the wretched state of the nation is coming from and how it truly could be improved.  Instead, young people are being taught a Manichean view of a society based upon oppression, faced with a vision of a world free of all evil which colleges are trying to bring to life on their own campuses.  It is not surprising that so many young people (although not my young friend) are completely disillusioned with politics in general and politicians in particular, and even hope for a kind of Democratic Donald Trump--Tom Hanks, Oprah Winfrey, or Mark Zuckerberg--as a presidential candidate.

My young friend, whose opinions I have learned to respect over several years, has not given up hope for the US, although he thinks today's leftist view is "more true than false."  I agree that inequality and imperialism have been on the rise again, although I'm not so sure about racial inequality.  What he seems to understand, however, is that the pessimistic left wing view simply can't be the basis for an effective political movement.  Having seen it first emerge in the late 1960s, take over academia, and now become mainstream within a good deal of the media and the Democratic party, I think that that is true.  Liberalism has declined as leftists have lost all faith in it.  My friend does have some ideas of pursuing a career in politics and government, and I hope he does--armed with a true sense of the place of the US in world history and the possibilities for change its history offers.

Wednesday, July 12, 2017

What the Russians wanted

My posts here are usually designed to provide a long-term perspective on events, not add to the cacophony about the news of the day, but there are times when the major media seem so brain dead that I feel I have something different to contribute.  It seems pretty clear to me what was going on last summer, but no one seems to be paying very much attention.

The Russian government and people have been hurt significantly--although hardly critically--by the American sanctions imposed after the annexation of Crimea, and other measures taken in response to human rights violations within Russia.  As the election campaign unfolded, they knew that Hillary Clinton would continue or even increase the sanctions.  On the other hand, Donald Trump had long-standing ties to Russia.  It is also possible,. according to news reports, that Russian intelligence possessed compromising information about Trump.  In any case, the Russian government had some reason to believe that Trump might be willing to ease the sanctions.

Now while I doubt that any of the participants in the famous meeting of a year ago among Donald Trump Jr, Jared Kushner, Paul Manafort and Natalia Vesenitskaya has been completely frank about their discussions as yet, the emails that surfaced yesterday, combined with Trump Jr.'s testimony, give a reasonable picture of what was up.  As the New York Times points out today, Ms. Vesenitskaya is a trusted Moscow insider with many high-level connections.   Working through the publicist Rob Goldstone, she offered dirt on Hillary Clinton developed by the Russian government to the Trump campaign in order to arrange a high-level meeting.  Such dirt may well have been discussed at the meeting, although no one has confirmed that as yet.  But in the course of the meeting, she turned the discussion to specific sanctions against Russians--the so-called Magnitsky Act--which she hoped a Trump Administration might lift.  She also brought up the ban on US adoptions of Russian children that Putin had imposed in retaliation for that act, in effect proposing a deal, and confirming, critically, that she was at least claiming to be acting on behalf of the Russian government.

Now this was not the only instance we have discovered of negotiations for a quid pro quo between teh Trump campaign and Russian officials during the campaign.  Last March my brother Charles brought some tweets from a statistician (not a journalist) named Carolyn O to my attention, in which she demonstrated the results of simple triangulation.  Here is what I said here then:

"On September 2, President Obama met with President Putin at a G-8 Summit.  They discussed US sanctions against Russia that Obama had imposed the day before, and Putin described them as an obstacle to cooperation between the two nations.

"Five days later, on September 7, James Clapper, the Director of National Intelligence, suggested for the first time that Russia had hacked the Democratic National Committee.

"On the very next day, September 8, Trump told a Russian TV correspondent that he did not believe Russia was behind the hack, and Sessions met with Kislyak. [n.b.: This was the meeting that Sessions did not disclose in his confirmation hearing.] Trump also said publicly that, 'If we had a relationship with Russia, wouldn't it be wonderful if we could work on it together and knock the hell out of ISIS?' And on that same day, Trump and Pence made a whole series of statements praising Putin's leadership style. and on the same day, Tass announced, 'Moscow expects Washington to display political will on building good relations with Russia after the presidential election," quoting Dimitry Peskov.'"

The July meeting, it seems, may have been the start of something.  By September, it looks as if a deal was in operation.  Russia would continue releasing hacked emails, and perhaps trying to hurt the Clinton campaign in other ways.  Trump would try to exonerate the Russians for the hack (as he still intermittently continues to do.) He and his surrogates would also promise better relations.

Trump did, of course, win the election, but the clear evidence that the Russians had hacked the DNC and the evidence of contacts between them and his campaign have made it difficult to carry out the deal.  Early last month it seemed that the Russians had won one victory since the Trump Administration was reported to be ready to allow them to re-open two listening posts in the US that the Obama Administration had ordered closed.  And the President himself still speaks intermittently about the possibility of more cooperation with Russia.  The Congress, however, has moved to impose more sanctions.

The Trump campaign, in short, appears to have secured help from a foreign government that carried out the modern equivalent of a Watergate break-in to help it win the election, in exchange for unknown promises of better relations which it has not been able to keep.  The situation would truly be parallel to Watergate were any evidence to surface that the Russians carried out the DNC attack after discussing it with the Trump campaign, but there does not seem to be any such evidence as yet.  The Russian hacks began perhaps a year before the meeting that is in the news this week.  A careful analysis in today's New York Times tends toward the conclusion that what has been revealed this week does not rise to the level of a crime.

Putin's investment in Trump has already paid off handsomely in the form of disarray within the NATO alliance and a general loss of respect for the US around the world.  But his government has not gotten what it wanted.  This raises the question of whether he can, or would, turn to sticks as well as carrots--perhaps threats to release compromising information about Trump, which a respected retired British intelligence officer concluded that he probably had.  The real story, in any case, is about the evolution of a long relationship between Trump and Russian interests, before, during, and perhaps after his campaign.  Given the level of indiscretion revealed in the recently released email chain, more evidence seems very likely to emerge.

Friday, June 30, 2017

What next for Eastern Europe?

While President Trump tweets, the United States and Russia drift towards war over Syria, and the new Thirty Years War between Shi'ite and Sunni continues on many fronts, another critical drama is playing out in the Eastern half of the European continent.  I find it particularly interesting because it is a replay of the drama I described about 40 years ago in my first book, Economic Diplomacy and the Origins of the Second World War, which is linked at left and available as an e-book.

For the first few centuries of the modern era the peoples of Eastern Europe lived under large empires.  The Ottoman Empire had reached Europe in the 15th century and eventually included what is now Bulgaria, Greece, Albania, Rumania, some of the nations of the former Yugoslavia, and Hungary.  The Tsar of Russia ruled what are now the Baltic States and, by the 19th century, Poland.  The Holy Roman Empire--which in 1806 became the Austrian Empire, and in 1867 the Austro-Hungarian Empire--included parts of Poland and the present-day Czech Republic, Slovakia, Croatia and Slovenia.  All these peoples, to varying degrees, developed nationalist movements during the 19th century.

The enormous strain of the First World War proved too much not only for the Russian, Austro-Hungarian and Russian empires, but also for the German Empire.  The Allies--France, Britain, Italy and eventually the US as well--sponsored the claims of some of the national movements in their territory.  In January 1918, in his Fourteen Points, Woodrow Wilson endorsed an independent Poland and autonomy (not independence) for the peoples of the Austro-Hungarian and Ottoman empires.  When those nations collapsed ten months later, various national movements proclaimed new states.

As the brilliant but eccentric English historian A. J. P. Taylor noted in 1961, the post-1919 settlement in Eastern Europe reflected the astonishing fact that both Germany and Russia had been defeated. Only that allowed for the re-creation of an independent Poland, the new states of Czechoslovakia and Yugoslavia,a larger Rumania, independent Poland and Finland, and the three Baltic states of Lithuania, Latvia, and Estonia.  It seemed in 1918-9 that things might go even further and that Ukraine might become independent as well, but the Bolsheviks managed to secure control over it in the Russian civil war.  These states were economically and politically weak.  Nearly all of them initially formed some kind of democratic government, encouraged down that path by the western powers.

In the short run, several of the new states--Czechoslovakia, Yugoslavia, and Romania--were threatened by Hungary, which had lost huge territories at the peace conference, while in the long run Czechoslovakia and Poland had to worry about a resurgent Germany. France, eager to cement its status as the leading power in Europe, offered all those states some kind of alliance.  Clearly the French would have trouble defending them once the Germans or Russians regained their military strength, but the French were counting on keeping the Germans weak.  The alliances faced no serious threats until after the rise of Hitler.

By then all these countries had undergone profound political changes.  While all of them had begun as democracies, only Czechoslovakia, Finland and the Baltic States were still electing their governments by the early 1930s--the rest had come under some form of authoritarian rule.  The agricultural states among them, as I showed in my book, came under German influence after 1935 because the Germans, desperate for food, offered them a market for their produce.  In 1938 Hitler managed to destroy Czechoslovakia when the French abandoned their alliance.  In 1939-40, Hitler and Stalin concluded the Nazi-Soviet Pact. They partitioned Poland and the Soviets incorporated the Baltic States.  Hungary and Rumania became allies of Hitler while Yugoslavia was occupied by the Italians and the Nazis.  In 1945,  the whole region (except Finland) came under Soviet occupation and the USSR installed Communist governments.

The collapse of the USSR in 1991--77 years after the start of the First World War--started this process over again.  Once again, as in 1919, the entire region was liberated from foreign rule.  This time the proliferation of new states has gone much further, with Czechoslovakia and former Yugoslavia giving way to no less than 8 new states, and not only the Baltic States, but also Ukraine and Belarus, becoming independent.  Once again the new states established various forms of democracy.  And once again, powerful nations from outside the region offered them alliances. NATO, led by the US, offered membership to virtually every new state in the region, including the Baltic states--after initially promising the new Russian government not to do so.  The EU also offered many of them membership, choosing to ignore the enormous economic and cultural differences that still divide Europe somewhere around the frontiers of Germany and Poland.

Germany is no longer an imperialist nation, although it leads the EU and played a key role in its enlargement.  Russia once again went through a chaotic period but by 2000 it was recovering its strength under Vladimir Putin.  He is clearly determined to reassert Russian influence--if not more--over many of the states of the former USSR.  Belarus lost any real independence very quickly, and Putin is actively contesting the West in a bid for influence in Ukraine, and using the Russian military at the border to do so. He also very obviously has designs on the Baltic states, which are extremely vulnerable militarily.  And while Putin cannot offer these states markets the way the Germans did 80 years ago, he can provide them with energy.

And once again, democracy has proven fragile in Eastern Europe.  Rightist parties now lead the governments of Hungary, Poland, and some of the other states of the region. The governments of the Czech Republic and Slovakia are weak and subject to corruption and outside influence.  These nations face a choice between  western-style democracy--which is having enormous problems in the west--and Russian-style authoritarianism.  It is not at all clear which path they shall take.

Only a gigantic war settled the question of Eastern Europe's future 80 years ago.  Such a war does not seem in prospect now, but limited wars, such as a lightning Russian occupation of one or more Baltic states, cannot be ruled out.  Russian and NATO aircraft are constantly confronting one another in the region.  The Russians also seem to be using cyberwar against Ukraine, and they may use it elsewhere. To reach a new equilibrium diplomatically would require a level of statesmanship which is not apparent on the world scene.  Nearly thirty years ago, when the Soviet empire collapsed, I commented frequently that this time, Eastern Europe had taken a new shape without a new world war.  Now it seems that the process may involve a larger conflict--albeit of a possibly different kind.

Tuesday, June 27, 2017

Health Care Update

As of Tuesday morning, it looks as if the Republicans in the Senate--like those in the House--will have to delay their initial scheduled vote on their health care measure.  The situation is exactly parallel to the House, insofar as both conservatives and moderates have refused to go along with the bill as written.  Once again, the mainstream media is jubilantly suggesting that the plan is bound to fail.  I  am sure however that the recess will become the occasion for an all0oyut pressure campaign against all the Republican Senators in an effort to reduce opposition to 2 and allow the Vice President to break the tie. There will be more cosmetic changes in the bill, as in the House, but I still think something like it will pass.  If it doesn't, we will have years of chaos as the Administration tries to destroy Obamacare from within.

Friday, June 23, 2017

Crunch Time

For the past 40 years, Republicans have been winning most of our political battles over economic issues, while social issues polarize the country.  Ronald Reagan swept into office in 1980 and eliminated the progressive tax system that was the legacy of the New Deal.  Deregulation began and has continued through Republican and Democratic administrations alike.  Bill Clinton did put through one tax increase, but he also signed a very unfortunate crime bill, cut back welfare, and put Glass-Steagall to rest.  George W. Bush immediately undid Clinton's tax cuts, and then some. Barack Obama's one major triumph, the ACA, looks set to expire over the next few weeks.

The election of Donald Trump, as I have said several times, must be viewed from at least two different perspectives. On the one hand, the election of an often-bankrupt businessman and TV star with little or no real knowledge of public affairs shows up the bankruptcy of our political system and threatens us with unprecedented dangers.  On the other hand, because Trump is a Republican, it gives Congressional Republicans--who in turn are bound hand in foot to extreme conservative contributors led by the Koch brothers--the chance to undo what remains of the New Deal and the Great Society, if not the Progressive Era.  In the Fourth Turning that began sometime in the last decade (in my opinion, in November 2000), the Republicans have generally been able to keep the initiative precisely because they were committed to the death of the old order, while the Democrats felt the country could continue to go in a more liberal direction.  Both sides believe their stances are morally right and their opponents are evil, but the Democrats, it seems to me, have tended even more to believe that LGBT rights, affirmative action, and even safety for illegal immigrants must prevail simply because they are such just causes.  If young men and women still learned any real history in schools and colleges, they would know that justice has never guaranteed victory.

Thus, the mainstream liberal media has been unable to face the scale of the impending Republican triumph.  It remains fixated on the very serious scandals implicating Trump and people around him and the controversies over the investigation of them.  I think those investigations will eventually turn up evidence of long-term financial and political connections between Trump and the Russian government and/or Russian oligarchs, but I do not know that thta could force him out of office.  The media has also pushed the line, from the beginning, that the repeal of the ACA could not go through.  They eagerly seized upon the GOP's problems in the House, only to see Paul Ryan overcome them. Then they assumed that the Senate could not possibly pass the House bill--but the conservative Republicans who drafted the Senate alternative in secret made it, in some respects, even worse.  Equally significant, the four Republican Senators who immediately announced that they would oppose the draft in its current form were conservatives, not moderates.  Their stance will probably keep the final draft from veering leftward, and I predict most of the moderates will be bullied into going along.  If Lisa Murkowski and Susan Collins refuse to vote aye, Mike Pence will break the tie and Republicans will break into a huge July 4 celebration.

Yes, the Republicans are making a mockery of the legislative process, holding no hearings, allowing almost no debate, and ignoring (presumably) the warnings of the Congressional Budget office. Yes, they are passing bills that the bulk of the American people oppose.  But they can do it--and they don't care.  They have won all the special House elections that have been held this year, and the Democrats do not appear to have much real traction in red states.  The Democrats are deeply divided among themselves, both between centrists and progressives and between the old and the young.

About 25 years ago Bill Strauss and Neil Howe predicted that their (and my) Boom generation would reshape America during the coming crisis.  What they did not see was that major Boomer politicians are almost all Republicans.  Although the Boom has now given us three Presidents--Clinton, Bush II, and Trump, all born in 1946--the most influential Boomer in American politics, I would argue, is Newt Gingrich, who has fought for more than 30 years for a new vision of America, one that is now coming to pass.  And the Boom did not produce a single Congressional leader of any note within the Democratic Party.  Chuck Schumer, a tool of Wall Street, is the first Boomer to lead the Democrats in either House of Congress.  Nancy Pelosi, a Silent, faced her leadership challenge from Tim Ryan of Ohio, who is from the second half of Generation X.  Another Silent, Bernie Sanders, is now the only real link to the New Deal, and he will be too old to run an effective campaign in 2020.  Both Bill Clinton and Barack Obama left the Democratic Party much weaker in Congress than they found it, and both built their careers around contacts with wealthy donors, not strength in the grass roots.

The ACA is only one key Republican initiative.  As Steve Bannon just admitted, many of Trump's cabinet selections were put in place to destroy the agencies they lead--starting with the EPA.  The Trump budget aims to take government money away from key Democratic constituencies.   And I expect some major initiative on immigration designed to remove much larger numbers of illegal immigrants from the US.

A number of my younger friends are convinced that Millennials will not only stop, but reverse, the Republican tide within the next ten years.  For reasons I cannot develop today, I am doubtful.  The Millennials have been infected during their education by the Boomer idea that right must inevitably prevail.  Few of them have been taught the kind of systematic thinking necessary not to only to figure out what the country needs, but how to achieve it.  They also face difficult economic conditions which will keep them focused on their private lives.  Eventually things will swing the other way, but it may take a very long time.

Friday, June 16, 2017

A civil rights milestone

On May 23, Mayor Mitch Landrieu of New Orleans--the scion of one of Louisiana's leading political families--gave a speech explaining the decision to remove statues of Robert E. Lee, Jefferson Davis and P.G.T Beauregard from their prominent outdoor place in the heart of New Orleans, with plans to move them indoors to a museum.  The mayor was undoubtedly moved, as he made clear, by the strong feelings of his black constituents that men who fought a war to preserve secession and slavery should not be celebrated publicly.  His speech, however, took full responsibility for the decision and argued for its necessity on very sound historical and political grounds.   And for that reason, the speech represents, I think, a milestone in American political history.  I cannot be sure of my facts here, but I suspect that Mitch Landrieu was the first white southern politician since the time of the Civil War itself to state publicly that the Confederacy was on the wrong side of history and humanity, as he put it, and that it rightfully lost the war.

We must not forget that quite a few white southerners held that view when the war began in the 1860s, and committed everything to the Union cause.  One such was Andrew Johnson, a poor white Tennessean, who remained in his seat in the Senate when Tennessee seceded and became Lincoln's vice president in 1864, with tragic consequences. (It turned out that Johnson hated free blacks even more than he hated southern planters.)  Others included George "Pap" Thomas, a Virginian, and David Farragut, a Tennessean by birth who had lived most of his life in the South, who became, respectively, the commander of the Union Army of the Cumberland and a leading Admiral of the northern fleet during the war.  The Texan Sam Houston also opposed secession.  Ironically, even Robert E. Lee--whose statue was among those removed--made it clear in 1861 that he felt secession was a terrible mistake, but opted anyway to fight with his native state of Virginia, and spent four years trying to preserve the Confederacy.  After the war, however, things changed.

Few historical forces and more powerful than bad consciences.  In the white South, it became essential in the decades after Appomattox to argue that the "war between the states" had been forced upon the southern states by the north, that it was not really about slavery, and that, fortunately, heroic southerners had preserved white supremacy after the war.  In the decades following the conflict southern politicians and northern Democrats managed to prevent Lincoln's birthday from ever becoming a national holiday, and agitated unsuccessfully to create a national holiday in honor of Lee.  They also, of course, established segregation and deprived their black citizens of equal rights.

Not until the wake of the Second World War, I believe, did a new type of white southern politician begin to emerge.  The New Deal had combined poor southern whites and black voters in the North within the same coalition, and many white southern politicians had supported it, while remaining opposed to integration.  But the GI generation spawned a number of white southern politicians who supported at least some progress on civil rights.  They included Estes Kefauver, a New Deal liberal from Tennessee who came quite close to winning the Democratic nomination for President in 1952, and Lyndon Johnson and Ralph Yarborough from Texas.  While Johnson, as Robert Caro showed, came into the Senate in 1949 as a loyal white southerner dedicated to white supremacy, he moved to the center on civil rights by 1957, largely because of his presidential ambitions  Another remarkable southern politician was Governor Jim Folsom of Alabama, who spoke bluntly on behalf of civil rights for black citizens in the mid-1950s.  On the Supreme Court, Hugo Black, a New Deal liberal from Alabama, joined in the Brown v. Board of Education decision in 1954 and in numerous other decisions affirming the rights of black Americans--but he, of course, was safely protected from the whims of the voters.  In 1948, Harry Truman, from Missouri, became the first President to endorse a modern civil rights program, and ordered the desegregation of the armed forces.  And when Johnson became President in 1963, he became of course the most effective civil rights advocate to occupy the White House since Lincoln, signing both the great Civil Rights Act of 1964 desegregating public accommodations and the Voting Rights Act of 1965.  Nearly every white southern politician, however, opposed those bills, although Mayor Ivan Allen of Atlanta testified for the 1964 act before Congress, and Al Gore, Sr., of Tennessee voted for voting rights.

Unfortunately, while much of the white South had embraced the New Deal, they were not ready for civil rights.  It was in the late 1950s and early 1960s, indeed, that South Carolina and certain other states began flying the Confederate flag in their state houses.  Southern schools continued to teach their white students about the "War of Northern Aggression," and white southerners grew up believing that the war was not really about slavery.  Just a few years ago I met a legal scholar from Virginia, roughly my own age, who declared that the world would have been better off if the North had allowed secession and said that as a Virginian, he inevitably had a low opinion of Lincoln.  In the 1990s millions of Americans watched the historian Shelby Foote fight off tears as he lamented the fall of the Confederacy in Ken Burns's documentary on the Civil War.

Following in LBJ's footsteps, the next two Democratic Presidents--Jimmy Carter of Georgia and Bill Clinton from Arkansas--forthrightly embraced civil rights for black Americans.  But neither of them, to my knowledge, every bluntly said what Mitch Landrieu said last month.  I quote from his speech.

"The historic record is clear, the Robert E. Lee, Jefferson Davis, and P.G.T. Beauregard statues were not erected just to honor these men, but as part of the movement which became known as The Cult of the Lost Cause. This ‘cult’ had one goal — through monuments and through other means — to rewrite history to hide the truth, which is that the Confederacy was on the wrong side of humanity. First erected over 166 years after the founding of our city and 19 years after the end of the Civil War, the monuments that we took down were meant to rebrand the history of our city and the ideals of a defeated Confederacy. It is self-evident that these men did not fight for the United States of America, They fought against it. They may have been warriors, but in this cause they were not patriots. These statues are not just stone and metal. They are not just innocent remembrances of a benign history. These monuments purposefully celebrate a fictional, sanitized Confederacy; ignoring the death, ignoring the enslavement, and the terror that it actually stood for.

. . .  "Should you have further doubt about the true goals of the Confederacy, in the very weeks before the war broke out, the Vice President of the Confederacy, Alexander Stephens, made it clear that the Confederate cause was about maintaining slavery and white supremacy. He said in his now famous ‘cornerstone speech’ that the Confederacy’s 'cornerstone rests upon the great truth, that the negro is not equal to the white man; that slavery — subordination to the superior race — is his natural and normal condition. This, our new government, is the first, in the history of the world, based upon this great physical, philosophical, and moral truth.'

"Now, with these shocking words still ringing in your ears... I want to try to gently peel from your hands the grip on a false narrative of our history that I think weakens us. And make straight a wrong turn we made many years ago — we can more closely connect with integrity to the founding principles of our nation and forge a clearer and straighter path toward a better city and a more perfect union."

Now I am not enough of an authority on 20th and 21st century southern politics to be sure of what I am about to say, and I would be delighted if any readers can cite evidence that will prove it wrong.   But to my knowledge, Landrieu is, literally, the first white southern office holder to bluntly state the simple truth that the Confederacy was wrong and to welcome its defeat.  That is what his fellow whtie southerners need to hear.  Meanwhile, white and black Americans throughout the nation--deluged to political correctness and false history on many fronts--also have to learn to give credit to the many white people who never accepted slavery, brought about and won the civil war, and laid the foundation for a better America.

This, indeed, the mayor also did at the very conclusion of his speech. 

"It is our acknowledgment that now is the time to take stock of, and then move past, a painful part of our history. 

"Anything less would render generations of courageous struggle and soul-searching a truly lost cause. Anything less would fall short of the immortal words of our greatest President Abraham Lincoln, who with an open heart and clarity of purpose calls on us today to unite as one people when he said: 'With malice toward none, with charity for all, with firmness in the right, as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation’s do all which may achieve and cherish — a just and lasting peace among ourselves and with all nations.'

"Thank you."

Thank you, Mayor Landrieu.  I hope we all hear a lot more about you in the future.

Friday, June 09, 2017

Trump, the Republicans, and History

Even before Donald Trump took office, comparisons between him and the right wing totalitarian leaders of the 20th century were flying freely around the net and social media.  I have made comparisons of my own here before, but my comparisons incline me to reject any equivalence between Trump on the one hand and Hitler, Mussolini, or Franco on the other.  Trump and the Republican Party with which he is working are simply not totalitarians.  They want less government authority, not more. Their model is the United States before the Progressive era, not Italy or Germany during the last great Atlantic crisis.  Yet in another way, as the President's speech withdrawing from the Paris accords showed, there is a profound similarity between Trump and the Republicans on the one hand, and all the totalitarian movements of the last century on the other, including not only National Socialism and Fascism, but Communism in both the USSR and Mao's China. Like the Nazis, the Stalinists and the Maoists, the Republicans and Trump have sold themselves on a view of the world that has little or no relation to reality.  Having developed that worldview over several decades, they are now trying to implement it.  But because it is a fantasy, this attempt is bound to do enormous harm--whether the American people find the strength to reject it during the next 20 years or so or not.

President Trump in his speech last week did not warn that the United Nations was planning to land a force in black helicopters to take over teh USA, but he might as well have.  The Paris accord, he said, "is simply the latest example of Washington entering into an agreement that disadvantages the United States, to the exclusive benefit of other countries, leaving American workers, who I love, and taxpayers to absorb the cost in terms of lost jobs, lower wages, shuttered factories and vastly diminished economic production."  The Green Climate Fund, he claimed, "is costing the United States a vast fortune," although our commitment of $3 billion amounted to just $10 per US citizen.  Incredibly, Trump claimed that the fund would cost us tens or hundreds of billions of dollars, with no evidence whatever. This is the way that Hitler (with more justification, actually) talked about the Versailles Treaty and the reparations settlements that followed it during the 1920s, and the way the Bolsheviks talked about the huge prewar loans from France, Britain, and other nations, which had funded the development of the Russian railway system.  Continuing, Trump claimed that the Paris accord was going to cost us 2.7 million jobs by 2025, citing a discredited study from a conservative think tank.  Their report painted a picture of incredible economic devastation which the President of the United States treated as fact.  Rather than give in, the President promised a renaissance of American coal mining and jobs for miners--which no one believes can possibly happen in the current energy environment.  The President talked about the rest of the world the way Communist leaders talked about the capitalism world, painting it as a vast conspiracy designed to cripple the United States for their own benefit. "The rest of the world," the President said, "applauded when we signed the Paris Agreement. They went wild.  They were so happy. For the simple reason that it put our country, the United States of America, which we all love, at a very, very big economic disadvantage. . . .The agreement is a massive redistribution of United States wealth to other countries."  Unspoken was the obvious conclusion, spread by Dinesh D'Souza and other conservative pundits, that President Obama signed it because he has always hated the United States.

The President specifically argued that China and India would take advantage of the agreement to increase coal production while the US had to cut it, but those countries are in fact moving away from it.  He said nothing, of course, about the rapidly falling price of clean energy and the jobs that could be gained by investing in it.  That is because the Republican Party is virtually a wholly owned subsidiary of the most conservative elements of the energy industry, led by the Koch brothers.  And that is a key difference between today's Republicanism on the one hand, and the National Socialists and Communists on the other. They were genuinely motivated by ideology; the Republicans are simply slaves to private interests.

The recurring theme of Trump's speech, that he is reasserting America's national sovereignty against illegitimate international authority, could be traced back to the 1950s and the founding of the John Birch Society--led, among others, by the Koch brothers' father. "It would once have been unthinkable that an international agreement could prevent the United States from conducting its own domestic economic affairs," he said. "But this is the new reality we face if we do not leave the agreement or if we do not negotiate a far better deal."  And the Paris agreement--which is based, in fact, entirely on voluntary compliance--will be, he warned, only the prelude to further attacks on our sovereignty. In the last 60 years, such fringe ideas have found their way to the summit of power.  That idea may also have led Trump to refuse to promise our NATO allies that he would defend them all against attack, and it will encourage him to take more and more unilateral steps in foreign affairs, just as Hitler boasted of freeing Germany from the shackles of the Versailles Treaty and the subsequent Locarno Pact before he unleashed the Second World War.

The situation with regard to health care is similar.  Committed to the belief that the free market will provide the most people with the best insurance, the Republicans have to ignore the unpleasant reality that insurance companies love writing policies for healthy people but would rather not insure sick ones.  Thus they are trying to eliminate the ACA, and insurance for at least 20 million Americans, while claiming that this will make things better.

Where will all this lead?  History is not especially encouraging.

National Socialism could not, as I pointed out in an earlier post, deliver on its promises to the German people, but totalitarian methods secured its hold on power .It destroyed itself because it was dedicated to a hopeless war of expansion that brought it into conflict with three superior industrial and military powers.  Fascism was not particularly successful, but it had survived for 18 years before Mussolini in 1940 made the fatal mistake of following Hitler into war.  Franco,. who carefully avoided that mistake, survived for the rest of his life, 36 years, after seizing power.  And the Soviet Union, with the help of totalitarian methods, survived for more than four decades after the Second World War despite its clear failure to meet the needs of its people.

Trump and the Republicans, it seems to me, will further enrich the fossil fuel industry, take away health care from millions of Americans, and roll back some of the regulations of the financial industry--which have never been severe enough as it is.  But given the entrenched power of the Republicans, the continuing movement of population to the Sunbelt, and the Democrats' inability to unite behind a compelling alternative set of policies, we cannot be sure that the Republican philosophy, which has been steadily gaining in power since the 1980s, will not remain dominant for some time to come.  The politics of the Gilded Age disgusted many educated and patriotic Americans from the time of the Grant Administration forward, but not until Theodore Roosevelt--30 years later--did any real reforms begin. 

The threat of climate change is, of course, very real.  In fact, serious students of the subject have argued for some time that the Paris accords were grossly inadequate to meet the threat and threatened to lull the public to sleep.  I have been convinced for some time that only a series of environmental catastrophes such as the flooding of Miami will mobilize the world to the necessary extent in any case.  Such a chain of events is, paradoxically, perhaps our best hope of recovering some civic spirit and mobilizing resources for good ends.   I can't see much else that would have that effect.

Thursday, June 01, 2017

The Dred Scott Decision

Some weeks ago I saw a reference to the Dred Scott decision and decided that it was time finally to read it. Delivered in March 1857, the decision was a key step towards the Civil War.  Chief Justice Roger Taney, a Marylander, ruled against Dred Scott, a Missouri slave who had sued on behalf of himself, his wife and two children, arguing that they had become free by virtue of years of residence (with their master) in the free state of Illinois, and in parts of the Louisiana territory north of the 36' 30" line that had defined the permissible area of slavery under the Missouri Compromise.  Taney argued that Dred Scott had no right to sue because the Founders, he claimed, had never imagined that either slaves or their free descendants could become citizens.  But Taney had not just ruled against Scott in this case: he had declared any Congressional attempt to limit the area in which slavery would be permitted to be unconstitutional, and he appeared to endorse the increasingly popular white southern view that slaveholders had a right to take slaves, like any other property, with them anywhere in the Union.  The Republican Party had just lost a fairly close election to Democrat James Buchanan, and the decision alarmed northerners who, while not abolitionists, wanted to keep slavery out of new territories and out of the North.  The principle behind the decision--that slavery could not be restricted--split the Democratic Party three years later in 1860, paving the way for the election of Lincoln, the secession of mot of the slave states, and the Civil War.

Slavery is the subject of renewed controversy nowadays, and Taney's opinion and the two dissents by Justices McLean and Curtis  raise critical questions about slavery's relation to the Constitution and its role in the early Republic.  The opinions make up one of the longest entries in the whole record of the Supreme Court, and I did skim parts of Tawney's and skipped a couple of concurring opinions.  But the whole experience was extraordinarily educational.

"Originalism" is of course the dominant right-wing judicial philosophy today, and Taney's opinion turns out to be originalism on steroids.  He began by asking whether Dred Scott had the right to bring suit in the first place, given that he was black, a slave, and the descendant of slaves, and answered the question with a resounding no.  The Founders, he argued, never believed that such beings could become citizens of the United States or full members of the community.   That was proven, he argued, by their status in all the original colonies, North and South, which treated all blacks as inferior beings.  It was also proven, he argued, by the text of the Constitution, which in at least two places specifically acknowledged and thereby endorsed the existence of slavery.  Now Taney, from the Compromiser generation (like Henry Clay and Daniel Webster), was old enough to remember the adoption of the Constitution, and he argued that no subsequent generation could disregard the views of the framers on this point.  Going even further backward to the Declaration of Independence, Taney argued that "all men are created equal" could not possibly be taken to include black men.

The question I am going to address at length with the help of Justice McLean's and Justice Curtis's dissents is whether Tawney was right.  This question now has far more than historic interest.  What immediately struck me was how closely Taney's view of the Constitution and the views of founders echoes what PC academics argue today:  that the Constitution specifically relegated black people to inferior status and that no one had the slightest intention of every changing this.  But it turns out that Taney sustained his argument only with the help of extremely selective evidence and highly tendentious reasoning--as the two dissenters made very clear.

Taney cited a number of colonial and even post-revolutionary statutes from New England states that did indeed mark out "negroes" (as the opinions used and wrote the word) as a separate class and denied them certain rights.  But almost without exception, the statutes that he quoted referred to the right to marry: they barred miscegenation and punished it with fines.  We shall see in a moment how incomplete this historical view was, but I might also remark that I see a great inconsistency in Taney's view.  He was using these colonial and state laws to argue that the people of the states in 1787 did not believe black people could be citizens, but arguing that that view bound the whole nation for all time, even though it was based upon state laws that obviously could, and sometimes were, changed at a later date.  It was incumbent upon him, it seems to me, to show that this view was actually reflected in the Constitution itself, and this, in my opinion, he most definitely could not do.

The two brief constitutional provisions that Taney cited to make his case deserve to be quoted.  The first, from Article I, Section 9, related to the importation of slaves: "The Migration or Importation of such Persons as any of the States now existing shall think proper to admit, shall not be prohibited by the Congress prior to the Year one thousand eight hundred and eight, but a Tax or duty may be imposed on such Importation, not exceeding ten dollars for each Person."  The second, from Article IV, Section 2, related to fugitives from one state to another: "No Person held to Service or Labour in one State, under the Laws thereof, escaping into another, shall, in Consequence of any Law or Regulation therein, be discharged from such Service or Labour, but shall be delivered up on Claim of the Party to whom such Service or Labour may be due."  Now both of these passages did refer indirectly to slavery.  The first allowed states to continue importing slaves for twenty years, or until such time as Congress prohibited the trade (as indeed it did in 1807, although enforcement of the prohibition was unfortunately lax.)  The second provided for the return of fugitive slaves from one state to another.  Yet in fact, Taney's interpretation of these clauses, in my opinion, is clearly backwards.  They do not enshrine a right to hold slaves, much less a permanent inferior status for black people, in the Constitution.  First of all, neither of these passages refers only to slaves.  The first covers "migration" as well as "importation," and "migration" could not possibly refer to slaves.  And the second obviously refers, in fact as well as in theory, to all those white people who were bound to masters for set terms of service, and to apprentices as well.  These provisions do not establish a separate status for any of the men and women to whom they refer: they are referred to simply as "persons," one of the framers* favorite words, for which we owe them our thanks.  And their language--like the language of the three-fifths clause, which Taney interestingly chose not to mention--was obviously designed to avoid putting the word "slave" into our founding document.  That tends to confirm the historical view of Abraham Lincoln (and many others), opposite to Taney's, that most of the founders regarded slavery as an evil that had unfortunately found its way to our shores, one that they had already kept out of the Northwest territories, and one that they hoped and expected to disappear.  And last, but hardly least, just as the Constitution includes no explicit reference to, or definition of, slavery, no one could possibly argue that it defined even a third group of "persons," free black people who could not be citizens, which Taney's argument assumed to exist then and for all time.

It was not necessary, however, to wait 160 years for an historian to discover the logical and historical weaknesses in Taney's argument.  Justice McLean (from Ohio) exposed both the logical and historical flaws in Tawney's argument in quite scathing terms.  To begin with, he argued, Taney was ruling against Scott on the grounds that he was a slave--but the question of whether he was in fact a slave was the one the case was supposed to decide.  (And Scott had in fact prevailed in a lower court!)  Then Curtis showed that Taney's argument about the historical view of black people within the United States was utterly without foundation in theory or fact.

"In the argument, it was said that a colored citizen would not be an agreeable member of society. This is more a matter of taste than of law. Several of the States have admitted persons of color to the right of suffrage, and, in this view, have recognized them as citizens, and this has been done in the slave as well as the free States. On the question of citizenship, it must be admitted that we have not been very fastidious. Under the late treaty with Mexico, we have made citizens of all grades, combinations, and colors. The same was done in the admission of Louisiana and Florida. No one ever doubted, and no court ever held that the people of these Territories did not become citizens under the treaty. They have exercised all the rights of citizens, without being naturalized under the acts of Congress."

In short, McLean simply reported that black people's status varied enormously from state to state and that there no prohibition, neither explicit nor customary, against them enjoying the rights of citizens, nor had there ever been.  He proceeded in another lengthy argument to show that Taney's arguments that Congress had no power to ban slavery from territories, or even to legislate for territorial governments, was without foundation, a tendentious claim reflecting a violent contemporary controversy over the extension of slavery.  And last but hardly least, drawing on older British precedents, he argued that Dred Scott's slavery had ceased when he took up residence with his master in a free state.  Slavery, he argued powerfully, existed only where it was protected by local law.  And while the Constitution did require free states to return fugitive slaves, a master surrendered his right to his slaves the moment that he crossed with them into a free jurisdiction.  In other words, taking the white southern argument head on, McLean argued that law did not regard slaves as property like any other, but rather as property only when explicitly sanctioned by local law.

But it was when I reached Justice McLean's discussion of the actual legal point that would decide the freedom of Dred Scott that I got a real shock.  That point was the issue of whether Dred Scott had become free by virtue of his residence with his master in Illinois and in free Louisiana territory where slavery had been outlawed by the Missouri Compromise.  From the moment I first read about the case when I was perhaps ten years old, I had assumed that Dred Scott, perhaps influenced by abolitionists, was asserting a novel right and that Taney's decision reflected precedent. I could not have been more wrong.  Many state courts, and the courts of Missouri in particular, had heard such cases in the previous decades and had frequently awarded the aggrieved slaves their freedom.  The Missouri Supreme Court had explicitly repudiated more than 20 years of precedence in denying him his freedom.    It was Taney who was making new law by fiat, reflecting new slaveholder militancy, just as the whole South was making new law by asserting the inability of Congress to prohibit slavery in the territories.  In fact, McLean noted that not only Missouri, but also Mississippi, Virginia, Louisiana, Kentucky, Maryland and other states had held that slaves taken by their masters to reside in free states became free.

Justice Curtis, who hailed from Massachusetts (and specifically from Watertown where I now live myself), began with a very lengthy technical argument about jurisdiction but then went straight to the heart of Tawney's argument that descendants of slaves could not be citizens.  The Constitution, he noted, referred to "citizens" of the United States, by which it could only have meant citizens under the Articles of Confederation, which in turn meant citizens of the various states.  There was no question that the citizenry included persons of African descent.   "Of this there can be no doubt.  At the time of the ratification of the Articles of Confederation, all free native-born inhabitants of the States of New Hampshire, Massachusetts, New York, New Jersey, and North Carolina, though descended from African slaves, were not only citizens of those States, but such of them as had the other necessary qualifications possessed the franchise of electors, on equal terms with other citizens."

Curtis proceeded to quote from an extraordinary 1838 decision from the Supreme Court of North Carolina defining the status of free black inhabitants in terms opposite to what Taney had said, and remarkable for its use of the terms "persons" and "property", keeping in mind that only the word "persons" is used to refer to slaves in the Constitution when such reference cannot be avoided.

"According to the laws of this State, all human beings within it, who are not slaves, fall within one of two classes. Whatever distinctions may have existed in the Roman laws between citizens and free inhabitants, they are unknown to our institutions. Before our Revolution, all free persons born within the dominions of the King of Great Britain, whatever their color or complexion, were native-born British subjects -- those born out of his allegiance were aliens. Slavery did not exist in England, but it did in the British colonies. Slaves were not, in legal parlance persons, but property. The moment the incapacity, the disqualification of slavery, was removed, they became persons, and were then either British subjects or not British subjects, according as they were or were not born within the allegiance of the British King. Upon the Revolution, no other change took place in the laws of North Carolina than was consequent on the transition from a colony dependent on a European King to a free and sovereign State. Slaves remained slaves. British subjects in North Carolina became North Carolina freemen. Foreigners, until made members of the State, remained aliens. Slaves, manumitted here, became freemen, and therefore, if born within North Carolina, are citizens of North Carolina, and all free persons born within the State are born citizens of the State. The Constitution extended the elective franchise to every freeman who had arrived at the age of twenty-one and paid a public tax, and it is a matter of universal notoriety that, under it, free persons, without regard to color, claimed and exercised the franchise until it was taken from free men of color a few years since by our amended Constitution."

Curtis, like myself a proud New Englander, proceeded to show that Taney's statements about the status of free blacks in revolutionary-era New England were simply wrong.   The Articles of Confederation, he noted, granted "the free inhabitants" of all the states "all the privileges and immunities of free citizens of the several states," and during the debate on the adoption of those articles in the Continental Congress,an amendment proposed by South Carolina to insert the word "white" between "free" and "inhabitants" was voted down.  The basic rule of citizenship, he showed at length was the one now enshrined in the 14th amendment, that it was conferred by birth.  Curtis also stood another of Taney's arguments on its head.  Taney had cited a 1792 federal law establishing the militia, to which "every free, able-bodied, white male citizen" should belong, as evidence that black people were not regarded as citizens. In fact, Curtis argued effectively, it proved the exact opposite, since if it were agreed that black people were not citizens it would have been unnecessary to add the word "white" in the first place.  And when Missouri was admitted in 1821, he showed, the Congress specifically invalidated a provision of its Constitution that would have barred free colored persons from settling in the state, on the grounds that it would have unconstitutionally deprived citizens of other states of privileges to which the Constitution entitled them. He also argued that international law was common law, and that international law had rejected slavery for some time.  He also argued that Scott's master had effectively recognized his freedom by allowing him to conclude, in the Wisconsin territory, a lawful marriage!

Curtis aggressively asserted the power of Congress to legislate against slavery in a territory, and did not hesitate to note " the social and moral evils of slavery, its relations to republican Governments, its inconsistency with the Declaration of Independence and with natural right." The attempt to argue that rules against slavery would discriminate against inhabitants of the southern states, he argued, was an attempt to write an exception into a categorical clause of the Constitution for which there was no basis.

Let us then put this decision in the context of American history, with particular reference to race and slavery.

Because so many of them believed slavery to be an evil, the Founders, while unable to do anything about it in southern states, did not specifically recognize or protect it in the Constitution. When the Constitution was first adopted the Confederation had just banned slavery in the Northwest territories, clearly anticipating that Congress would be able to do the same. Meanwhile, most of the northern states had just abolished it.  Many southerners also hoped to see it disappear, and a number of the founders, including Washington, freed their slaves upon their death.  However, with the invention of the cotton gin and the rise of a new generation of southerners, the view that slavery was a necessity and a positive good gained ground.  In  1820, when the Missouri Compromise banned slavery north of 36' 30" (except in Missouri), some southerners were arguing that slave property was protected everywhere--but they clearly lost that fight in Congress.

Like the NRA and its allies in recent decades, the slave owning South now began re-interpreting the Constitution to serve their own ends.  The controversy over slavery became more and more bitter in the 1830s and 1840s, and especially after the Mexican War added vast new territories to the Union.  More and more southerners began to argue that slaves were property like any other--a claim that could not really be justified at common law, since slavery had formed no part of the English common law which the new Republic had adopted.  What happened in the Dred Scott decision was perfectly parallel to what happened in the District of Columbia v. Heller decision in 2008, when the court, by a 5-4 majority, suddenly adopted the NRA's view, overturned two centuries of precedent, and created an individual right to bear arms.  In both cases, an organized, ideologically driven minority had imposed its will upon the Supreme Court, and thence upon the country.   In the Dred Scott case the reaction was swift.  Not even the entire Democratic Party would accept the view of Dred Scott, and the decision allowed Lincoln to win a huge electoral college victory in 1860.  With no hope of making its views prevail through law, the South seceded, and the Civil War both defeated the southern states and ended slavery.

The argument that the framers and their Constitution were deeply embedded in racism and never envisioned freedom for the slaves is false. It is also politically disastrous for the nation.  Again and again we have preserved our ideals by returning to the principles the framers enshrined.  That, in my opinion, is what we must do again now, rather than argue that the American society and government has always been inherently, irretrievably racist.  Racism certainly has never been absent from American life and is not now, but it has lost ground over the centuries precisely because it is alien to our founding documents.  To argue that it is not takes away our best hope for further progress.

Friday, May 12, 2017

The Hedge Fund Economy

This week I read Black Edge by Sheelah Kolhatkar, a reporter, about the battle between the SEC and the New York US Attorney's Office on the one hand, and SAC Capital, the hedge fund run by Steven Cohen, on the other.  Although no one seems to want to talk about it very much (including Terry Gross and Kolhatkar when the author appeared on Fresh Air), the story is obviously the inspiration for the superb HBO series Billions, which just finished its second season.  The book offers extraordinary insight into the world of hedge funds, which have become so important within our whole economy.  Rather than review it in detail, I am going to talk about the biggest lessons that I learned from it.

Although I also read a history of hedge funds by Sebastian Mallaby and blogged about it here, I am still quite unclear as to how this key new financial institution got off the ground and became so powerful.  Kolhatkar indicates that regulators allowed them to operate far more freely than banks, on the assumption that their investors would be wealthy enough to take risks. Many of their investors, of course, hvae turned out to be institutions like pension funds.  In any case, many of the funds--led by SAC Capital--generated extraordinarily, Madoff-like returns for decades.   The returns vastly exceeded the growth rate of the economy, and thus contributed to the growth of inequality in our society.  The question that hangs over the book, and became key to the prosecutions of various hedge fund traders, was exactly how they did it.

It is impossible, sadly, to disaggregate the answer to that question, but it is clear that many of the profits came from inside information.  The old model of investing, represented by Lou, the GI character played by Hal Holbrook in Wall Street, involved identifying a promising company and investing to secure a share of its profits.  That model seems to be moribund, if not dead.  A more common model involves bets on a sudden rise or fall of a stock, based on an event such as the release of an earnings report or the results of a clinical trial of a drug.  It doesn't matter whether the news is bad, what matters is to know what the news will be before it is public, in order to short the company's stock or buy more of it before the news has moved the market.  Traders are gamblers, and all gamblers prefer to bet on sure things.  The problem, of course, is that such trading on inside information has been illegal, for good reason, for more than 80 years.

In a rational world moved by civic virtue, I think, a Congressional committee would long ago have done a multi-year investigation of hedge funds in an effort to find out roughly how much of their profits come from illegal inside information.  I have no idea exactly what it would find, but it could be high enough to suggest that a law making their operation illegal would be in the public interest.  What Kolhatkar does show is that information has become a huge business.  Entire stand-alone firms have formed to become intimate with firms in various industries.  Hedge funds pay them retainers for their information.  They evidently feel that they are getting their money's worth.  I got the impression that these firms, as well as some traders, work more like intelligence agents than anything else, trying to win the confidence, or intimidate, or corrupt sources of valuable information by any available means.  We shall return to this issue in a few minutes, after looking at the ennvironment within the funds

I am increasingly depressed by the lack of institutional loyalty in today's world.  From academia through the financial world and into medical care, politics, and government, fewer and fewer people, it seems to me, seem to care about the long-term future of the institutions they work for, or for their fellow employees.  Most care only about what they can get out of their institution.  I have to admit that I have been a devoted fan of Survivor since it began, even though I am always depressed by the inability of most of the contestants to focus on the interests of their particular tribe, even in the first stage of the game when individuals' fortunes depend largely on the fortunes of their tribe.  And this tendency has if anything gotten worse as Millennials, who were supposed to be team players, replaced Gen Xers in the contestant pool.  This is the way many hedge funds are organized as well.  Cohen at SAC gave individual traders huge leeway and did not oversee their operations closely--but he expected them to provide him with their best information and allow him to profit from it.  That kept him at one remove from the information itself, and that is what in the end saved most of his fortune and his freedom from the US Attorney's office.

What is so maddening about the story of the insider trading prosecutions, to those of us who care about the law and have a reasonably good head for figures, is that insider trading is anything but difficult to detect.  Like large-scale bets on a fixed sporting event, the evidence is unequivocal and obvious.   To cite a related example, in the early 1980s, the Pennsylvania daily lottery was fixed to as to produce the number 666 by infiltrators into the TV studio that drew the number with the help of numbered ping pong balls.  On the afternoon before the drawing law enforcement received numerous calls from illegal numbers brokers predicting the fixed outcome--which was the only possible way to explain the deluge of bets they were receiving on 666.  A sudden, large purchase or short of a stock just days before important information about the stock reaches the public is virtually a confession of guilt.  But the courts do not accept that kind of evidence--it is necessary to show exactly whom the information came from and how it was acquired.  

Cohen was implicated in two trades. The first involved a leak of an earnings report from the computer manufacturer Dell.  An SAC trader named Michael Steinberg was indeed convicted of insider trading in that case.  But in a catastrophic decision in a similar case in December 2014, an appeals court overturned another insider trading case, rebuked Southern District prosecutor Preet Bharara for an overly aggressive strategy, and declared that traders who used inside information that they obtained from a third party, rather than from some one in the firm involved, were not guilty.  That led to the dismissal of Steinberg's case as well.  The Supreme Court has repudiated that decision, but the state of the law remains very unclear.   The second case, which was widely publicized, involved an Alzheimer's drug trial.  An SAC trader named Matthew Martoma had spent years cultivating an elderly University of Michigan Med School professor, Sid Gilman, who was involved in the trial.  (Martoma, it turned out, had previously forged his Harvard Law School transcript to try to get a prestigious clerkship.)  Gilman had collected hundreds of thousands of consulting fees from the financial industry, and eventually provided Martoma with his power point presentation on the disappointing results of a clinical trial.  Martoma had emailed these results to Cohen, who had promptly shorted the drug company's stock on a large scale.

Martoma, who refused to cooperate with the government and testify against Cohen, was convicted and received a long sentence.  But after a long conference with Cohen's well-heeled attorneys--essentially, a dry run for a trial, without judge or jury--Bharara's office decided not to risk a trial that they might lose.  Cohen escaped with a fine that, while huge by ordinary standards, represented a fraction of his assets.  He also had to shut down SAC capital but continues to trade on his own behalf.  (This was exactly the deal that "Axe," played by Damian Lewis, turned down during the first season of Billions.)  Martoma had actually sent Cohen an email just before Cohen began shorting the drug company's stock, but the prosecutors were worried that they could not prove that he had read it.  It has become notoriously easy for prosecutors to put any poor person in jail that they choose, by threatening them with draconian sentences if they will not plea.  Black Edge and the history of the Obama Administration and the big banks show that it is nearly impossible to put the superrich behind bars.

I was most struck, in all this, by the ethos--or pathology--that seems to rule the hedge fund world.  Everyone wants a spectacular result, and inside information is the easiest way to get one.  But when you have done it once, it seems, you feel greater pressure to do it again, forcing you to look harder for the next coup.  These traders, who siphon many billions out of our economy every year to inflate the high end housing and art markets, are addicted to large sums of money, which function, for them, like opiates for millions of their fellow citizens.  They are addicted to huge sums of money.  The cure is simple, and it is one that the country tried from about 1940 until 1964: 91% marginal tax rates above a certain amount.  But under current tax law hedge fund traders pay lower taxes than the rest of us, through the carried interest loophole.  We are all feeding their addiction.

And what it means for addicts to have such power was succinctly stated by Gus Fring, played by Giancarlo Esposito, in my favorite moment of Breaking Bad, when Walter White and his partner Jesse came to meet Gus at Pollos Hermanos, but waited all day without making contact.  Jesse eventually left, and Walter took the bull by the horns, went up to the counter, and confronted Gus.

Gus explained why he didn't want to work with Walter. "I don't think you are a cautious man, Mr. White," he said.  "Your partner was late. And he was high. He's often high, isn't he?"

Walter replied that while that was true, his partner was someone that he could trust.

"You can never trust a drug addict, Mr. White," Gus replied.

Saturday, May 06, 2017

Whom is health insurance for?

I was not planning to make another post this weekend, but my New York Times this morning includes an op-ed by a physician and medical school professor named Marc K. Siegel.  [Don't miss the post on Trump and Andrew Jackson, below.]  Dr. Siegel ran into an ambush when his thoughts reached my eyes, because he said something in simple, clear language, which had already occurred to me as the dirty secret of the Republican health care bill in general and the issue of "pre-existing conditions."  This is what he said.

"In addition to limiting the menu of essential benefits, the House bill would let states create high-risk pools for patients with pre-existing conditions who had let their insurance coverage lapse, and who could then be charged premiums more in keeping with their health care needs. This is the only way to make insurance affordable for most consumers; pre-existing conditions will continue to drive up premiums if everyone is compelled to pay the same price."

Now my idea of health insurance is that we all pay into it because we will all become sick from time to time, and we may become very seriously ill.  Many of us will never need extremely expensive treatments, but many will, and we can't tell who they will be. Thus our investment is very bit as reasonable as our investment in fire insurance.  But Dr. Siegel has a very different view.

What, in fewer syllabus, as a "patient with a pre-existing condition?"  Answer: a sick patient, one who needs treatment right now, and may need it for a long time. Alternatively, it may be someone whose medical history substantially increases the likelihood that they will get sick and need treatment in the future.   And I had realized as I read a news story about the House bill last week that this was the key to debate.  The insurance industry, bless their hearts, loves insuring healthy people but hates insuring sick people.  Like just about every other corporation in America they are focused on their bottom line, which healthy people improve and sick people make worse.  Somewhere in the course of his medical career Dr. Siegel seems to have forgotten the point of health insurance: to pay for treatment when people need it.  He doesn't think that healthy people's premiums ought to be high enough to pay for treatment for people who are actually sick. [Incidentally, Dr. Siegel, if this post comes to your attention and you want to reply to it here, you can have all the space you want.)

I have heard other stories over the years about the insurance industry's point of view.  A dear friend of mine who co-owned a thriving small business got cancer many years ago, and needed an expensive procedure.   The procedure was an unqualified success in the short and medium run, and he survived for 8 years of happy and productive life as a result.  But no sooner had he initially gotten well, than the insurance company that provided a group plan for his business (of a couple of dozen employees) hit the company with a tremendous increase in its premium.  Now that he had turned out actually to need the insurance, they wanted him and the company, in effect, to pay the claim.  Fortunately he was able to get insurance through his spouse instead, which solved the company's problem.  

Now, of course, if people waited, as many do, to seek  insurance until they are already sick, that's a problem about which insurers have the right to complain.  One solution is a mandate requiring them to buy it, which Obamacare includes but the new Republican bill does not.  A second solution which the Obama administration did not try to adopt is the Medicare solution in which payroll taxes (or conceivably other taxes) fund the health care system.  But the idea of "high risk pools," even if they work--which they generally have failed to do--is in my opinion a travesty that ignores the whole point of health insurance, by separating those who really need it from the rest of us.

It is quite possible that the Obamacare premium increases over the last couple of years reflected the need to include sick people, as well as the end of some payments to make such coverage more affordable that apparently ended after 2014.  And it is certain that health insurance is too expensive because of problems inherent in American medicine that Dr. Siegel also mentions, such as the cost of new devices.  (He does not mention overdiagnosis and overtreatment, or the enormous amounts spent on end-of-life care.)  Attacking those problems should have come next on our list.  But the fantasy that we can solve the health insurance problem by taking sick people out of the normal health care system needs to be abandoned.  It is unworthy of a civilized society.

Thursday, May 04, 2017

Is Trump really like Andrew Jackson?

Andrew Jackson is getting a lot of attention lately, none of it favorable.  Meanwhile, President Trump, while rather vague on certain details of American history, has expressed admiration for him.  And many commentators have argued that they are, in fact, similar in important ways.  All this is hard for me to assimilate, because when I was growing up, Andrew Jackson was something of a liberal hero, if not quite of the stature of Jefferson or Lincoln or FDR.  He believed in more direct democracy, he hated financial privilege, he was supported by a coalition of workers and farmers, and Arthur Schlesinger Jr. had specifically painted him as a kind of prototype for FDR.  Now, of course, we are paying more attention to Jackson's status as a slave owner, and his involvement in the removal of Indian tribes to the west of the Missisippi.  I decided to spend a few minutes to try to rediscover who Jackson actually was--with particular reference to the question of whether he in fact had anythng in common with Donald Trump.

Neither time nor space permits an exhaustive examination of this question, but it didn't take long to find some interesting excerpts in his lengthy, careful annual messages to Congress.  This one comes from his first, in December 1829--and calls for direct popular election of the President! Here are Jackson's words.

"To the people belongs the right of electing their Chief Magistrate; it was never designed that their choice should in any case be defeated, either by the intervention of electoral colleges or by the agency confided, under certain contingencies, to the House of Representatives. Experience proves that in proportion as agents to execute the will of the people are multiplied there is danger of their wishes being frustrated. Some may be unfaithful; all are liable to err. So far, therefore, as the people can with convenience speak, it is safer for them to express their own will.

"The number of aspirants to the Presidency and the diversity of the interests which may influence their claims leave little reason to expect a choice in the first instance, and in that event the election must devolve on the House of Representatives, where it is obvious the will of the people may not be always ascertained, or, if ascertained, may not be regarded. From the mode of voting by States the choice is to be made by 24 votes, and it may often occur that one of these will be controlled by an individual Representative. Honors and offices are at the disposal of the successful candidate. Repeated ballotings may make it apparent that a single individual holds the cast in his hand. May he not be tempted to name his reward? , , ,

" I would therefore recommend such an amendment of the Constitution as may remove all intermediate agency in the election of the President and Vice-President. The mode may be so regulated as to preserve to each State its present relative weight in the election, and a failure in the first attempt may be provided for by confining the second to a choice between the two highest candidates. In connection with such an amendment it would seem advisable to limit the service of the Chief Magistrate to a single term of either 4 or 6 years. If, however, it should not be adopted, it is worthy of consideration whether a provision disqualifying for office the Representatives in Congress on whom such an election may have devolved would not be proper."

The abolition of the electoral college has become a favorite liberal demand, all the more so because Jackson's proposal, had it been embodied in the Constitution, would have kept both George W. Bush and Donald Trump out of the White House.  I don't have time to find out exactly how and why Jackson's proposal failed of adoption, but it appears to mark him as a genuine champion of the people's rule, albeit, of course, within the framework of his time, in which women were not allowed to vote and slavery still existed in 15 states.  There is, however, another aspect to this proposal, which casts it in a different light.

Jackson was in effect complaining that he was only in his first year in the White House instead of his fifth.  The party system had broken down in 1824 and he had run for President against three other candidates from the Democratic Party: William Crawford, John Quincy Adams, and Henry Clay.  Jackson had won the popular vote handily, but he had not won a majority in the electoral college and the election had gone to the House of Representatives.  There he had been bested by Adams, to whom Clay had thrown his support.  Then Adams made the great political blunder of his career by naming Clay Secretary of States, and cries of "corrupt bargain!" rang through the land.  Rather than tweeting that he had been the real winner, Jackson was more discreetly referring to these events in his address.  He may have been a sincere Democrat--but he could also hold a grudge.  Many years later, in retirement, he reportedly said that he had only two regrets--that he had never been able to shoot Henry Clay, or to hang John C. Calhoun.

A year later, in December 1829, Jackson commented on the quick, nearly bloodless revolution that had replaced the conservative Bourbon monarchy in France with the more liberal and constitutional rule of Louis Philippe.  He put this development in the context of world history, in which the United States was now playing a key role,

"The important modifications of their Government, effected with so much courage and wisdom by the people of France, afford a happy presage of their future course, and have naturally elicited from the kindred feelings of this nation that spontaneous and universal burst of applause in which you have participated. In congratulating you, my fellow citizens, upon an event so auspicious to the dearest interests of man- kind I do no more than respond to the voice of my country, without transcending in the slightest degree that salutary maxim of the illustrious Washington which enjoins an abstinence from all interference with the internal affairs of other nations. From a people exercising in the most unlimited degree the right of self-government, and enjoying, as derived from this proud characteristic, under the favor of Heaven, much of the happiness with which they are blessed; a people who can point in triumph to their free institutions and challenge comparison with the fruits they bear, as well as with the moderation, intelligence, and energy with which they are administered -- from such a people the deepest sympathy was to be expected in a struggle for the sacred principles of liberty, conducted in a spirit every way worthy of the cause, and crowned by a heroic moderation which has disarmed revolution of its terrors. Not withstanding the strong assurances which the man whom we so sincerely love and justly admire [I do not know to whom this referred] has given to the world of the high character of the present King of the French, and which if sustained to the end will secure to him the proud appellation of Patriot King, it is not in his success, but in that of the great principle which has borne him to the throne -- the paramount authority of the public will -- that the American people rejoice."

On the eve of his death only four years earlier, Jefferson had reiterated the hope that liberty, as expressed in the Declaration of Independence, would come to the whole world.  Jackson's remarks, praising the French step down this path, were in this tradition.  Two years later Britain also took a small step towards popular rule, when the Reform Act of 1832 became law.  Today our President is also praising a worldwide political trend--but this time the trend is towards authoritarianism, not towards democracy.  The President's long-standing admiration for Vladimir Putin is well known, but in recent weeks he has congratulated the Turkish President Erdogan on a vote that gave him even more power, invited the murderous President Duterte of the Philippines to Washington, and offered to meet with Kim Jong Un.  His Administration shows signs of becoming the first American administration specifically to endorse a trend towards authoritarianism--the opposite of what Jackson and other 19th century Presidents did

In the same message Jackson mentioned that the government had had to put down a rebellion, or independence movement, among the Choctaw and Chickasaw tribes in Alabama and Mississippi, and endorsed their removal to Indian territory in what is now Oklahoma.  But he made no attempt to conceal the hardship involved in these measures, while trying to put them in historical context.

"Humanity has often wept over the fate of the aborigines of this country, and Philanthropy has been long busily employed in devising means to avert it, but its progress has never for a moment been arrested, and one by one have many powerful tribes disappeared from the earth. To follow to the tomb the last of his race and to tread on the graves of extinct nations excite melancholy reflections. But true philanthropy reconciles the mind to these vicissitudes as it does to the extinction of one generation to make room for another. In the monuments and fortifications of an unknown people, spread over the extensive regions of the West, we behold the memorials of a once powerful race, which was exterminated or has disappeared to make room for the existing savage tribes. [He appears to be referring here to the Mound Builders.] Nor is there any thing in this which, upon a comprehensive view of the general interests of the human race, is to be regretted. Philanthropy could not wish to see this continent restored to the condition in which it was found by our forefathers. What good man would prefer a country covered with forests and ranged by a few thousand savages to our extensive Republic, studded with cities, towns, and prosperous farms, embellished with all the improvements which art can devise or industry execute, occupied by more than 12,000,000 happy people, and filled with all the blessings of liberty, civilization, and religion?

"The present policy of the Government is but a continuation of the same progressive change by a milder process. The tribes which occupied the countries now constituting the Eastern States were annihilated or have melted away to make room for the whites. The waves of population and civilization are rolling to the westward, and we now propose to acquire the countries occupied by the red men of the South and West by a fair exchange, and, at the expense of the United States, to send them to a land where their existence may be prolonged and perhaps made perpetual.
Doubtless it will be painful to leave the graves of their fathers; but what do they more than our ancestors did or than our children are now doing? To better their condition in an unknown land our forefathers left all that was dear in earthly objects. Our children by thousands yearly leave the land of their birth to seek new homes in distant regions. Does Humanity weep at these painful separations from every thing, animate and inanimate, with which the young heart has become entwined? Far from it. It is rather a source of joy that our country affords scope where our young population may range unconstrained in body or in mind, developing the power and faculties of man in their highest perfection."

Today, our universities have for decades been preoccupied with the faults of western civilization and the injuries that has inflicted upon other regions of the world, with the implication that history's course should certainly be held in place, if not reversed.  And a great many Americans have come to regard their nation's founding and growth as a crime.  I would suggest that it was almost impossible for an American of Jackson's age (born in 1767) to hold that view. They had experienced the Declaration of Independence, the Constitution, the Louisiana Purchase, and the formation of many new states.  They saw all this as a great human experiment in which they were the leading actors. And when Jackson pointed out that Indian civilizations had warred against one another even to the point of extinction before the arrival of the Europeans, he was only speaking the truth. I shall let my readers make their own judgments about Jackson's words and actions, and how they fit into the whole history of the United States.  But I do think today's US citizens might ask themselves if they truly repudiate what our ancestors did in creating the United States as it now is--keeping in mind that so many of us, white, black, brown and yellow, would never have existed had they not done so, since our ancestors would have been so unlikely to have met elsewhere.

I turn now to Jackson's most famous state paper, his veto of the renewal of the charter of the Bank of the United States in July 1832.  The Bank enjoyed special privileges under the law that created it which turned it into the equivalent of a European central bank, and Jackson complained that it had used those privileges to accumulate enormous power over the banking system, and enormous wealth at the expense of ordinary Americans.  He continued:

"It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society--the farmers, mechanics, and laborers--who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing. In the act before me there seems to be a wide and unnecessary departure from these just principles."

It was this message, more than anything else, that established Jackson as the heir to the tradition of both political and economic democracy that was begun by Jefferson and elaborated upon by Wilson,  Franklin Roosevelt, and Lyndon Johnson in the twentieth century.  Today that tradition survives in Bernie Sanders and Elizabeth Warren--but they represent only one wing of the Democratic Party.  Donald Trump, needless to say, is completely outside that tradition and he and the Republicans in Congress want to destroy it.

It will not have escaped the reader's attention, meanwhile, that Andrew Jackson possessed a command of the English language of which Donald Trump never dreamed, and that he took his duties as President of the world's leading republic with a seriousness of which Trump would never be capable.  It has become fashionable to judge historical figures according to simple, binary moral standards, in which acts that even recognize, much less further, racism or sexism automatically mark men as evil.  I have attempted to suggest that Andrew Jackson is one of many figures from our history to whom these rules do less than justice.  And I have attempted to show clearly that any similarities between Trump and Andrew Jackson are far outweighed by enormous differences of political outlook and goals.