One philsophical claim is that definitions of social phenomena such as mental illness, justice and morality are socially constructed and reflective of power rather than truth. But more fundamentally, social construction has been insane as well as sane, false as well as true, and therefore it is difficult to discern whether a social construction is true or false. Since social construction has questionable validity and deliberation depends on social construction, political systems that depend on deliberation are as likely to result in false as well as true conclusions.
Every age is rife with delusion. Charles MacKay wrote Extraordinary Popular Delusions and the Madness of Crowds in the early 19th century and he details mass delusions such as the south sea bubble, tulipmania, witchcraft and superstitions. Because of the financial importance of such delusions in the stock market, the financial delusions have been studied more often and more carefully than others as in Charles Kindleberger's Panics, Manias and Crashes but mass delusions are not limited to market phenomena like tulipmania. Political scientists such as Irving Janis have been fascinated by delusions of small groups in making decisions, which Janis termed groupthink, but delusions are as characteristic of large as well as small groups. Nazi Germany, 19th century imperialism, racism and slavery were widespread delusions that had the support of entire societies.
Academics have been especially prone to systematic delusion, such as the belief that Stalin and Pol Pot were social reformers and not mass murderers, that Mao was a kind man who was successful in developing the Chinese economy (a belief stated by the leading economists of the mid-20th century in a 1972 New York Times article penned by John Kenneth Galbraith). As well, delusional academic belief such as in centralized economic planning, Keynesian economics, Freudian psychiatry, the use of econometric models to predict gross domestic product, belief in welfare as a cure for poverty, and belief in urban planning as a way to improve cities look quaint to us today, but these were beliefs actually held by twentieth century academics.
What does this say about deliberation and democracy as ways to govern society? Democracy is an information sharing device. People know best what they want. They are prone to mass delusions that they later regret, but democracy is the best way available to permit the state to reflect their intent. But given the likelihood that the public deliberates irrationally and with limited foresight, democracy ought to be limited. Not by autocratic or totalitarian rule, but by anarchy, or more accurately, markets. Markets perform better and are less prone to perceptual error than are state institutions becuase investments are easier to withdraw than laws are to change. Markets are more flexible than government. Thus, democracy ought to be limited where possible and replaced by markets.
Second, democratic decision making processes ought to be as easily reversible as possible. Since deliberative decisions are often erroneous, it must be possible to reverse them once errors are detected. State institutions must be made flexible. But in large units flexibility is absent because it is most difficult to change laws.
Third, the outcomes of deliberative processes should be voluntaristic when possible. The principle of voluntarism is consistent with basic precepts of fairness. Just because a majority prefers one way of doing things it may not be so for all. If it is not necessary to force a minority who thinks differently, then to be fair and to best incorporate information about the intention of the majority, force should not be used. To the extent force is used, democracy's ability to integrate information from all citizens is curtailed and democracy's value is limited. De Tocqueville wrote of the danger of a tyranny of the majority in America. The danger of majority tyranny can be limited if democratic decision making utilizes cafeteria criteria. Choice among democratic rules results in more information about the public's preferences than a unitary rule. Why one social security plan when there can be several or many? Why one set of federal rules when there can be a multiplicity? In the last century the ability to express diverse rules was limited by the economic need for a unitary market, but today computers can integrate diverse regulatory systems. Corporations choose to do business in 100 countries. Why should 50 states pose a problem?
There are many instances where government programs need not be forced upon all Americans. For example, the draft was mandatory until the 1970s. Its compulsory nature caused upheaval. After military service was made voluntary in the mid 1970s, the controversy subsided. Why not apply the voluntaristic principle to social security, regulated cable television service and regulation of financial disclosure?
Fourth, democratic institutions ought to be as local as possible. Representation of public insanity is best accomplished when those who represent the public understand their insane idiosyncracies. Experts are generally wrong, as per the twentieth century fields of economics, sociology and psychology, so experts are of little use to public deliberation. Moreover, public insanity is likely to vary regionally and in other ways. A Congressman who represents 37,000 citizens is better able to understand their oddities than a Congressman who represents 600,000 citizens. Although the American population has nearly doubled in my lifetime, the number of Congressmen remains at 435. The population of the City of Los Angeles today is about the same as the entire population of the United States in 1790. In 1790, there were 106 Congressmen representing all of America, today there are the equivalent of six or seven representing Los Angeles (it is difficult to tell the exact number because of gerrymandering). Bruce Bartlett has suggested increasing the number of Congressmen. How about increasing the number of states so that state governments can be more responsive to public needs? Why must upstate New York be conjoined to New York City, or Los Angeles and San Diego conjoined to San Francisco?
The social construction of reality is frequently wrong and therefore ought not to be cast in stone. But the principle of twentieth century deliberation resulted in outcomes of deliberative processes being cast in stone and then aggressively defended by "progressives" and "radicals" from being changed. A 21st century paradigm would require greater flexibility, greater localism, greater suscepitibility to change.
Tuesday, May 20, 2008
Monday, May 19, 2008
Open Letter to Herbert M. Allison, Jr., Chairman of TIAA-CREF, Re Threat of Future Stagflation to Account Holders' Funds
PO Box 130
West Shokan, NY 12494
May 19, 2008
Herbert M. Allison, Jr.
TIAA-CREF
730 Third Avenue
New York, NY 10017-3206
Dear Mr. Allison:
I hold a TIAA-CREF account through my employment at the City University of New York and have done so since 1991
TIAA-CREF should implement a commodity index fund and a foreign-currency denominated interest bearing fund. Doing so would fulfill your responsibility to be prudent to your account holders. I say this despite current short-term overheating in the commodities markets.
The 1970s were a period of significant challenge to TIAA-CREF because the stock market declined while inflation accelerated. This caused pensioners to receive reduced payments at the very time that inflation posed high costs. TIAA-CREF has a fiduciary duty to take action to anticipate the realistic risk that Federal Reserve Bank policy will again cause stagflation. Conversely, it is imprudent to pretend that stock and interest bearing investments provide all of the diversification that investors need when the Federal Reserve Bank has expanded the money supply by eight percent annually for the past two and one half decades.
To be prudent, you ought to diligently consider the risk of stagflation and take action. Both the stock market and interest bearing dollar denominated accounts are ultra-risky in a stagflationary period, yet those are the only alternatives TIAA-CREF currently has on offer. By failing to diversify into alternative currencies you are shooting craps with shareholders’ accounts. Inflation-indexed bonds are a crap shoot as well because interest rates may skyrocket at the very time that inflation goes up.
Sincerely,
Mitchell Langbert, Ph.D.
Cc: Chronicle of Higher Education
West Shokan, NY 12494
May 19, 2008
Herbert M. Allison, Jr.
TIAA-CREF
730 Third Avenue
New York, NY 10017-3206
Dear Mr. Allison:
I hold a TIAA-CREF account through my employment at the City University of New York and have done so since 1991
TIAA-CREF should implement a commodity index fund and a foreign-currency denominated interest bearing fund. Doing so would fulfill your responsibility to be prudent to your account holders. I say this despite current short-term overheating in the commodities markets.
The 1970s were a period of significant challenge to TIAA-CREF because the stock market declined while inflation accelerated. This caused pensioners to receive reduced payments at the very time that inflation posed high costs. TIAA-CREF has a fiduciary duty to take action to anticipate the realistic risk that Federal Reserve Bank policy will again cause stagflation. Conversely, it is imprudent to pretend that stock and interest bearing investments provide all of the diversification that investors need when the Federal Reserve Bank has expanded the money supply by eight percent annually for the past two and one half decades.
To be prudent, you ought to diligently consider the risk of stagflation and take action. Both the stock market and interest bearing dollar denominated accounts are ultra-risky in a stagflationary period, yet those are the only alternatives TIAA-CREF currently has on offer. By failing to diversify into alternative currencies you are shooting craps with shareholders’ accounts. Inflation-indexed bonds are a crap shoot as well because interest rates may skyrocket at the very time that inflation goes up.
Sincerely,
Mitchell Langbert, Ph.D.
Cc: Chronicle of Higher Education
Sunday, May 18, 2008
Correction in Gold and Oil Prices?
Is there going to be a correction in gold, oil and other commodity prices in the coming weeks? It seems like a distinct possibility.
Friday, May 16, 2008
Conservatism, Surgical Radicalism and the Four Party System
The current popular political debate occurs between two kinds of conservatives. The first, called liberals or progressives, argues that the current framework of American democracy, created during the Progressive era and New Deal and now roughly 100 years old, ought to remain in place. In their view introduction of additional institutions, plans and programs like national health insurance along the lines of earlier ones is needed, but today's framework is a good one.
The second kind of conservatives, popularly so called, are not comfortable with the New Deal project---Social Security, government regulation of industry, and large-scale federal social welfare programs, but do not want to repeal these programs either. They follow Edmund Burke, who argued against radical in favor of gradual change. Burke felt that gradual transformation of institutions while protecting liberty was a better path than the French revolution's authoritarianism, political correctness and executions. Rather, he preferred the American revolution's restraint.
Today's conservatives retain Burke's dislike for radical change. But the institutions that exist in America today were radically imposed during the first half of the twentieth century. They did not evolve logically from the market economy of the nineteenth and they did not reflect economic exigencies of the the early 20th century. Rather, they reflected the imposition of a political vision of specific rent-seeking special interest groups and agenda-drive political radicals.
Burke wrote in Britain in the late eighteenth century when barbaric institutions had gradually evolved into more democratic and liberal forms in Britain and to a lesser degree in Europe. Burke did not write about what to do to unravel the harm that the French revolution had caused. Rather, he wrote about how Britain and other liberal nations might best cope with change. This is not the problem that faces America today. An excessive application of Burke is inappropriate. America has had some radical change imposed while partially retaining liberal institutions. Conservatives who wish to create a new liberalism need to be surgical radicals. They need to undo New Deal radicalism's derangement of older versions of liberalism. The derangement has taken a number of shapes, to include social security, urban renewal, welfare, the Federal Reserve Bank, excessive application of eminent domain, and excessive regulation of business. Such radically instituted habits ought to be undone conservatively but radically.
Progressivism and the New Deal were radical upheavals. They rewrote American institutions that were not very old. A radical conservatism is one that is pragmatic, and asks that if radically imposed institutions fail that they be undone. This is a surgical radicalism that devises new liberal institutions where Progressivism and New Deal social democracy have failed.
Conservatives who wish to retain Progressive institutions, who are loyal to the old Federal Reserve Bank and its old-fashioned economic planning, high levels of government spending and support for business are Progressives. Conservatives who wish to retain New Deal institutions like Social Security and the National Labor Relations Act are social democratic liberals.
Perhaps Americans should think in terms of a four-party rather than a two-party system. Perhaps there should be a surgically radical conservative party; a Progressive-conservative Rockefeller-Republican Party; a New Deal Party; and a social democratic radical party. Of these, the surgically conservative radical party would be the most radical, liberal and progressive.
The second kind of conservatives, popularly so called, are not comfortable with the New Deal project---Social Security, government regulation of industry, and large-scale federal social welfare programs, but do not want to repeal these programs either. They follow Edmund Burke, who argued against radical in favor of gradual change. Burke felt that gradual transformation of institutions while protecting liberty was a better path than the French revolution's authoritarianism, political correctness and executions. Rather, he preferred the American revolution's restraint.
Today's conservatives retain Burke's dislike for radical change. But the institutions that exist in America today were radically imposed during the first half of the twentieth century. They did not evolve logically from the market economy of the nineteenth and they did not reflect economic exigencies of the the early 20th century. Rather, they reflected the imposition of a political vision of specific rent-seeking special interest groups and agenda-drive political radicals.
Burke wrote in Britain in the late eighteenth century when barbaric institutions had gradually evolved into more democratic and liberal forms in Britain and to a lesser degree in Europe. Burke did not write about what to do to unravel the harm that the French revolution had caused. Rather, he wrote about how Britain and other liberal nations might best cope with change. This is not the problem that faces America today. An excessive application of Burke is inappropriate. America has had some radical change imposed while partially retaining liberal institutions. Conservatives who wish to create a new liberalism need to be surgical radicals. They need to undo New Deal radicalism's derangement of older versions of liberalism. The derangement has taken a number of shapes, to include social security, urban renewal, welfare, the Federal Reserve Bank, excessive application of eminent domain, and excessive regulation of business. Such radically instituted habits ought to be undone conservatively but radically.
Progressivism and the New Deal were radical upheavals. They rewrote American institutions that were not very old. A radical conservatism is one that is pragmatic, and asks that if radically imposed institutions fail that they be undone. This is a surgical radicalism that devises new liberal institutions where Progressivism and New Deal social democracy have failed.
Conservatives who wish to retain Progressive institutions, who are loyal to the old Federal Reserve Bank and its old-fashioned economic planning, high levels of government spending and support for business are Progressives. Conservatives who wish to retain New Deal institutions like Social Security and the National Labor Relations Act are social democratic liberals.
Perhaps Americans should think in terms of a four-party rather than a two-party system. Perhaps there should be a surgically radical conservative party; a Progressive-conservative Rockefeller-Republican Party; a New Deal Party; and a social democratic radical party. Of these, the surgically conservative radical party would be the most radical, liberal and progressive.
Tuesday, May 13, 2008
Chinese Tragedy Ahead
The Chinese have decided to imitate American economic progress. But they have chosen to imitate the wrong thing. American economic success has come in spite of, not because of, government development schemes. In particular, the US government and the states granted large amounts of land and access rights to railroads in the nineteenth century. Although railroads contributed to economic development, they did so at much higher cost to the public than was necessary. The public donations of land were accompanied by considerable incompetence and corruption. More railroads were built than were needed. In today's world, the corruption associated with land grants has not disappeared. The Progressives of the early twentieth century believed that by rationalizing the corruption of the political bosses, government support for business could be rationalized and made honest. In the Progressive tradition, Robert Moses in New York and similar social democratic Progressives in other states involved state and federal governments in considerable grants to business. This tradition is not why America has succeeded. America has succeeded in spite of government support for business. Sadly, the Chinese have chosen to imitate the Jay Gould/Robert Moses tradition. They are attempting to modernize their country through government support for development coupled with inflation.
The way that America did succeed in developing its economy was entrepreneurship. Freedom of enterprise not only permitted entrepreneurial genius to innovate here, but also drew entrepreneurial geniuses from other countries. For instance, Nikola Tesla came to the United States because Europeans refused to invest in his concept of A/C electricity. Thomas Edison, Jonah Salk and an endless list of homegrown and immigrant innovators came here because of American freedom. But a long list of social democrats, media pundits, quack academic economists and socialists have done all they can to destroy America's freedom.
The development that occurred because of Jay Gould, Robert Moses and Bruce Ratner, the successor to the governmental welfare approach to business, is not the development that made America a great country. Rather, America became a great country in spite of Jay Gould, Robert Moses and Bruce Ratner. In the case of Robert Moses, the public housing on which he squandered billions of dollars and was supported by the New York Times caused massive increases in crime, destruction of neighborhoods and the near-bankruptcy of New York City in the mid 1970s. Jay Gould's and his contemporaries' railroads were incompetently run and cost the nation far more than they should have. Despite the massive tax on innovation that corrupt government support for business has posed, the US surged ahead because of the innovation of men like Edison and Tesla. The entrepreneur, free of government impediment and government welfare subsidy, thinks of ways to meet consumer needs and so makes himself wealthy and the world wealthier still.
Tragically, the Chinese perceived the spectacular image of large-scale development and have attempted to emulate Robert Moses's approach with large construction projects, continuing to limit the intellectual and economic freedom on which economic development depends. Equally sadly, Americans lost sight of the reason for their success, and passed laws and regulations, and imposed punitive taxes, that have inhibited entrepreneurship, slowing American economic progress, even as they have increasingly provided welfare payments to incompetent bankers, real estate developers, academics and Wall Street stock jobbers who do not produce wealth.
This country and China have squandered resources in stupid ways. The bubble will burst as all credit bubbles do. America may have enough resources to reassess its errors. The Chinese likely do not, and many there will be hurt.
The way that America did succeed in developing its economy was entrepreneurship. Freedom of enterprise not only permitted entrepreneurial genius to innovate here, but also drew entrepreneurial geniuses from other countries. For instance, Nikola Tesla came to the United States because Europeans refused to invest in his concept of A/C electricity. Thomas Edison, Jonah Salk and an endless list of homegrown and immigrant innovators came here because of American freedom. But a long list of social democrats, media pundits, quack academic economists and socialists have done all they can to destroy America's freedom.
The development that occurred because of Jay Gould, Robert Moses and Bruce Ratner, the successor to the governmental welfare approach to business, is not the development that made America a great country. Rather, America became a great country in spite of Jay Gould, Robert Moses and Bruce Ratner. In the case of Robert Moses, the public housing on which he squandered billions of dollars and was supported by the New York Times caused massive increases in crime, destruction of neighborhoods and the near-bankruptcy of New York City in the mid 1970s. Jay Gould's and his contemporaries' railroads were incompetently run and cost the nation far more than they should have. Despite the massive tax on innovation that corrupt government support for business has posed, the US surged ahead because of the innovation of men like Edison and Tesla. The entrepreneur, free of government impediment and government welfare subsidy, thinks of ways to meet consumer needs and so makes himself wealthy and the world wealthier still.
Tragically, the Chinese perceived the spectacular image of large-scale development and have attempted to emulate Robert Moses's approach with large construction projects, continuing to limit the intellectual and economic freedom on which economic development depends. Equally sadly, Americans lost sight of the reason for their success, and passed laws and regulations, and imposed punitive taxes, that have inhibited entrepreneurship, slowing American economic progress, even as they have increasingly provided welfare payments to incompetent bankers, real estate developers, academics and Wall Street stock jobbers who do not produce wealth.
This country and China have squandered resources in stupid ways. The bubble will burst as all credit bubbles do. America may have enough resources to reassess its errors. The Chinese likely do not, and many there will be hurt.
Monday, May 12, 2008
Letter to Congressman Maurice Hinchey Concerning Federal Reserve Bank
PO Box 130
West Shokan, New York 12494
May 12, 2008
The Honorable Maurice Hinchey
2431 Rayburn H.O.B.
Washington, DC 20515
Dear Congressman Hinchey:
Congress should abolish the Federal Reserve Bank and replace it with choice among monetary alternatives. The Fed has proven to be incompetent to manage the nation’s money supply. Choice among competitive money supply alternatives would be preferable to the current system.
The inflation of the 1970s followed the abolition of the gold standard. Inflation led to high unemployment in the early 1980s. Since 1983, when the Fed resumed its inflationary posture, price increases have been more moderate than in the 1970s because (a) house prices have been excluded from the CPI and (b) foreign dollar holders have absorbed much of the inflation. Now there are 5-10 dollars held abroad for every dollar held in the US. Nevertheless, the inflation rate since 1979 has been over 3.5%.
There are at least five additional problems that suggest that the Federal Reserve Bank has been incompetent to manage the nation’s money supply and that choice among competing money supplies would be a preferable alternative. The five problems are (1) food shortages, (2) excessive home and asset prices, (3) income inequality (4) corruption and (5) the threat of hyper-inflation.
First, the Fed’s excessive stimulus (or in plain language, printing of money) over the past 25 years has caused excessive real estate development of farm land. In turn, the elimination of farm land makes the land unavailable for farming. This in turn has caused food shortages around the world, including the US. It is not much of a stretch to say that the Fed has murdered third world children now starving to death because of food shortages. There are now numerous reports of rationing here in the US as well.
Second, home and other asset prices are excessive. In West Shokan, I have enjoyed house price appreciation but new buyers cannot afford current prices. The banking system, responding to the Fed’s monetary expansion, made illegitimate low interest loans that inflated real estate prices in the 2000’s. Some of the loans have not been repaid, and the Fed's response is to print more money, keeping the bloated house prices high. The high real estate prices make it difficult for moderate income citizens to afford a home. Likewise, the high stock prices of the 1990s made it difficult for the baby boomers to plan for retirement. Believing that there would be twenty percent returns on the stock market, many boomers did not save sufficiently or lost their savings in the tech and Internet bubble.
Third, the Fed has caused the flattening of real wages and income inequality that have occurred since the 1970s. This flattening began soon after the final abolition of the gold standard in 1971. The flattening of real wages and income inequality are caused by inflation, a process that the economics profession denies is important. Their prescription, taxation, is irrelevant to the underlying problem.
The beneficiaries of the current Federal Reserve monopoly on the money supply are of course the commercial banks and Wall Street and the sycophantic economists who support them. Low interest rates due to monetary expansion (printing money) cause the stock market to rise. That is, monetary expansion causes both stock market increases and price inflation, hurting the middle class and poor. Thus, the Federal Reserve Bank is little more than a redistributive vehicle that redistributes from poor to rich, from wage earners to stock holders.
Fourth, the Fed’s policies have been the cause of the corruption scandals of the past 30 years. All of the major corruption scandals of the past 30 years, to include Drexel, Enron, and Bear Stearns, have occurred because of the Fed’s credit expansion, because of easy money. The scandals amount to transfer of wealth from the general public, whose dollars have been depreciated, to criminals like Ken Lay to whom the Fed and the banking system have granted access to artificially created Fed money. The notion that the banking system is intellectually or morally equipped to assess credit risks seems to be contradicted by the recent collapse of Bear Stearns and by Ben Bernanke’s willingness to print even more money to subsidize these and a long list of earlier crooks. How much corruption is enough for the Fed?
Fifth, the Fed has significantly expanded the global supply of dollars. Now, its expansionary policy has international political implications that the economists who run the Fed are ill-equipped to assess. A global run on the dollar which might occur due to ordinary market behavior would have disastrous consequences for the American people, who have already been victimized in several ways by the Fed’s incompetence.
It is evident from what I am saying that:
1. The American economics profession has been incompetent in analyzing money supply and economic issues. They have widely supported policies that have been economically destructive. Most importantly, they have silently watched excessive investment in real estate resulting in large scale human suffering. This is brutal incompetence indeed, and the Fed and the economics profession should be held to account.
2. The Federal Reserve Bank has supported bad ethics.
3. The Fed is responsible for wealth transfers from poor to rich; flattening real wages; economic dislocation; food shortages; starvation in the third world; and the threat of hyper-inflation here in the US.
I urge Congress to abolish the Federal Reserve Bank. It is an institution that has failed, that has made Americans poorer and has served as a poor-to-rich welfare transfer device.
Sincerely,
Mitchell Langbert, Ph.D.
Cc: Senator Hillary Clinton; Senator Chuck Schumer, President Bush
West Shokan, New York 12494
May 12, 2008
The Honorable Maurice Hinchey
2431 Rayburn H.O.B.
Washington, DC 20515
Dear Congressman Hinchey:
Congress should abolish the Federal Reserve Bank and replace it with choice among monetary alternatives. The Fed has proven to be incompetent to manage the nation’s money supply. Choice among competitive money supply alternatives would be preferable to the current system.
The inflation of the 1970s followed the abolition of the gold standard. Inflation led to high unemployment in the early 1980s. Since 1983, when the Fed resumed its inflationary posture, price increases have been more moderate than in the 1970s because (a) house prices have been excluded from the CPI and (b) foreign dollar holders have absorbed much of the inflation. Now there are 5-10 dollars held abroad for every dollar held in the US. Nevertheless, the inflation rate since 1979 has been over 3.5%.
There are at least five additional problems that suggest that the Federal Reserve Bank has been incompetent to manage the nation’s money supply and that choice among competing money supplies would be a preferable alternative. The five problems are (1) food shortages, (2) excessive home and asset prices, (3) income inequality (4) corruption and (5) the threat of hyper-inflation.
First, the Fed’s excessive stimulus (or in plain language, printing of money) over the past 25 years has caused excessive real estate development of farm land. In turn, the elimination of farm land makes the land unavailable for farming. This in turn has caused food shortages around the world, including the US. It is not much of a stretch to say that the Fed has murdered third world children now starving to death because of food shortages. There are now numerous reports of rationing here in the US as well.
Second, home and other asset prices are excessive. In West Shokan, I have enjoyed house price appreciation but new buyers cannot afford current prices. The banking system, responding to the Fed’s monetary expansion, made illegitimate low interest loans that inflated real estate prices in the 2000’s. Some of the loans have not been repaid, and the Fed's response is to print more money, keeping the bloated house prices high. The high real estate prices make it difficult for moderate income citizens to afford a home. Likewise, the high stock prices of the 1990s made it difficult for the baby boomers to plan for retirement. Believing that there would be twenty percent returns on the stock market, many boomers did not save sufficiently or lost their savings in the tech and Internet bubble.
Third, the Fed has caused the flattening of real wages and income inequality that have occurred since the 1970s. This flattening began soon after the final abolition of the gold standard in 1971. The flattening of real wages and income inequality are caused by inflation, a process that the economics profession denies is important. Their prescription, taxation, is irrelevant to the underlying problem.
The beneficiaries of the current Federal Reserve monopoly on the money supply are of course the commercial banks and Wall Street and the sycophantic economists who support them. Low interest rates due to monetary expansion (printing money) cause the stock market to rise. That is, monetary expansion causes both stock market increases and price inflation, hurting the middle class and poor. Thus, the Federal Reserve Bank is little more than a redistributive vehicle that redistributes from poor to rich, from wage earners to stock holders.
Fourth, the Fed’s policies have been the cause of the corruption scandals of the past 30 years. All of the major corruption scandals of the past 30 years, to include Drexel, Enron, and Bear Stearns, have occurred because of the Fed’s credit expansion, because of easy money. The scandals amount to transfer of wealth from the general public, whose dollars have been depreciated, to criminals like Ken Lay to whom the Fed and the banking system have granted access to artificially created Fed money. The notion that the banking system is intellectually or morally equipped to assess credit risks seems to be contradicted by the recent collapse of Bear Stearns and by Ben Bernanke’s willingness to print even more money to subsidize these and a long list of earlier crooks. How much corruption is enough for the Fed?
Fifth, the Fed has significantly expanded the global supply of dollars. Now, its expansionary policy has international political implications that the economists who run the Fed are ill-equipped to assess. A global run on the dollar which might occur due to ordinary market behavior would have disastrous consequences for the American people, who have already been victimized in several ways by the Fed’s incompetence.
It is evident from what I am saying that:
1. The American economics profession has been incompetent in analyzing money supply and economic issues. They have widely supported policies that have been economically destructive. Most importantly, they have silently watched excessive investment in real estate resulting in large scale human suffering. This is brutal incompetence indeed, and the Fed and the economics profession should be held to account.
2. The Federal Reserve Bank has supported bad ethics.
3. The Fed is responsible for wealth transfers from poor to rich; flattening real wages; economic dislocation; food shortages; starvation in the third world; and the threat of hyper-inflation here in the US.
I urge Congress to abolish the Federal Reserve Bank. It is an institution that has failed, that has made Americans poorer and has served as a poor-to-rich welfare transfer device.
Sincerely,
Mitchell Langbert, Ph.D.
Cc: Senator Hillary Clinton; Senator Chuck Schumer, President Bush
Saturday, May 10, 2008
Why Chris Matthews Loves Barack Obama
Chris Matthews studied economics at UNC Chapel Hill. As a result, Matthews agrees that there are 57 states.
We Need a McCain-Obama-Clinton Sit-Up Contest
The Web is abuzz with Barack Obama's embarrassing mistake(see John Amato's Crooks and Liars post here and Michael Goldfarb's Weekly Standard post here , hat tip Larwyn). Mr. Obama said that there are 57 states. Just prior to his confused statement he had attempted to smear Mr. McCain by suggesting that Mr. McCain had "lost his bearings", due to his age. But it is Mr. Obama who is less mentally and physically fit.
I am not a wellness fanatic and even wrote a small book years ago attacking the idea of wellness programs in labor-management administered Taft Hartley Plans. But I base my prediction on a 2007 wellness report in Seek Wellness.com, which asks whether as a smoker Mr. Obama is qualified to be president:
For the record, Senator Obama claims to be a "moderate" smoker who wants to quit. That's good. He has stated many times that he HAS quit, often, but tends to lapse, due to insufficient resolve. A member of AA might suggest, "That ain't quitting." The candidate made this statement in an interview published by the Chicago Tribune: "It's an ongoing struggle. I've been chewing Nicorette strenuously." Well, chew on this, Senator: We all have ongoing struggles. Lose the smoking habit!...Americans haven't elected an unabashed, out-of-the-closet cigarette-smoking president since Franklin D. Roosevelt.
The matter ought to be resolved with a sit-up and push-up contest. Instead of televised debates that skirt important issues, the three candidates should be lined up to compete to see who is physically younger. Chronological age can be quite different from physical age. My prediction:
Sit ups: McCain: 550, Clinton 80, Obama 14
Push ups: McCain: 40, Obama 18, Clinton 2
Jogging: McCain: 1 hour, Clinton 1/2 hour, Obama, 8 minutes.
Let the contest begin!
I am not a wellness fanatic and even wrote a small book years ago attacking the idea of wellness programs in labor-management administered Taft Hartley Plans. But I base my prediction on a 2007 wellness report in Seek Wellness.com, which asks whether as a smoker Mr. Obama is qualified to be president:
For the record, Senator Obama claims to be a "moderate" smoker who wants to quit. That's good. He has stated many times that he HAS quit, often, but tends to lapse, due to insufficient resolve. A member of AA might suggest, "That ain't quitting." The candidate made this statement in an interview published by the Chicago Tribune: "It's an ongoing struggle. I've been chewing Nicorette strenuously." Well, chew on this, Senator: We all have ongoing struggles. Lose the smoking habit!...Americans haven't elected an unabashed, out-of-the-closet cigarette-smoking president since Franklin D. Roosevelt.
The matter ought to be resolved with a sit-up and push-up contest. Instead of televised debates that skirt important issues, the three candidates should be lined up to compete to see who is physically younger. Chronological age can be quite different from physical age. My prediction:
Sit ups: McCain: 550, Clinton 80, Obama 14
Push ups: McCain: 40, Obama 18, Clinton 2
Jogging: McCain: 1 hour, Clinton 1/2 hour, Obama, 8 minutes.
Let the contest begin!
Friday, May 9, 2008
President Michael S. Garrison of UWV Should Resign
The Chronicle of Higher Education (paid access) reports that Governor Joe Manchin's (D-WV) daughter, Heather Bresch, has been busted for having received an MBA degree that she did not earn:
"At around the same time last October that officials of West Virginia University were awarding Heather M. Bresch, daughter of the state's governor, an executive M.B.A. that she had not earned, they were also considering her for appointment to at least two advisory committees whose primary role is to raise money for academic divisions of the university."
The Chronicle states that Ms. Bresch had a high profile on campus and had been treated, according to an independent report, in an "unusual and unique manner".
The story indicates that Ms. Bresch claimed an MBA in a promotion announcement and the Pittsburgh Post Gazette made inquiries. She had been put forward for the two campus committees soon after she received the improper MBA.
The Chronicle writes of President Garrison and Ms. Bresch:
"The two have long been acquainted. Mr. Garrison worked directly with Ms. Bresch a few years ago, when he was a lobbyist representing her company, Mylan Inc. Mr. Garrison also told the panel that Ms. Bresch had called his office several times on the first day that her degree credentials were called into question by the Post-Gazette."
The appearance of impropriety is sufficent to warrant a university president's resignation. As well, there should be inquiries as to whether West Virginia Governor Joe Manchin was aware of the situation. It would seem possible that he did. If so, there should be an investigation of his administration.
"At around the same time last October that officials of West Virginia University were awarding Heather M. Bresch, daughter of the state's governor, an executive M.B.A. that she had not earned, they were also considering her for appointment to at least two advisory committees whose primary role is to raise money for academic divisions of the university."
The Chronicle states that Ms. Bresch had a high profile on campus and had been treated, according to an independent report, in an "unusual and unique manner".
The story indicates that Ms. Bresch claimed an MBA in a promotion announcement and the Pittsburgh Post Gazette made inquiries. She had been put forward for the two campus committees soon after she received the improper MBA.
The Chronicle writes of President Garrison and Ms. Bresch:
"The two have long been acquainted. Mr. Garrison worked directly with Ms. Bresch a few years ago, when he was a lobbyist representing her company, Mylan Inc. Mr. Garrison also told the panel that Ms. Bresch had called his office several times on the first day that her degree credentials were called into question by the Post-Gazette."
The appearance of impropriety is sufficent to warrant a university president's resignation. As well, there should be inquiries as to whether West Virginia Governor Joe Manchin was aware of the situation. It would seem possible that he did. If so, there should be an investigation of his administration.
Spreading Shortages Due to Greenspan-Bernanke Federal Reserve Policy--Woodrow Wilson Turns in His Grave
My wife just returned from a Food Emporium supermarket on the upper west side of Manhattan. She tried to buy light bulbs but all the light bulbs had been sold except for two packs in which one light bulb was broken each. Likewise, her best friend just returned from her house in Hawaii and said that there is rice rationing there. As well, my wife has repeatedly been unable to purchase spa and beauty products at our health club in Ulster County, New York and has been told by the sales people that there are backlogs on orders across the board. Suppliers have not been shipping. This is the first time that we have seen a shortage of light bulbs in the supermarket.
These shortages are directly attributable to Fed policy, specifically of the Greenspan-Bernanke Fed. Across the board shortages and price inflation result from malinvestment attributable to excessively low interest rates that fund Wall Street and the commercial banking industry. Thus, the public has subsidized Wall Street to build houses that no one can pay for. The inflationary consequences of the Greenspan-Bernanke policy over the next 30 years will cause many headaches. Although a shortage of spa products or light bulbs are inconvenient, and I can hedge by buying commodities indexes and the like, the Greenspan-Bernanke Fed's three decade-long Christmas for Wall Street, hedge funds and real estate developers has resulted in the death of children in the third world and significantly lower incomes for the average American worker.
It distresses me that double talk--e.g., blaming the results of the Fed's decades-long inflationary stance on third world trade--that characterized discussions about the inflationary recession of the 1970s is again appearing, this time among "conservatives". Social-democratic conservatives seem eager to claim that the interventionist Fed policies of the last three Republican and Clinton administrations have not caused across-the-board inflation in commodity prices, flat wages of workers, wealth transfers to speculators, and child starvation in the third world. They are the friends of big government.
The only solution to flat earnings, reduced wages, inflation and shortages is to get government out of our money supply. That means establishing the kind of gold standard in which Woodrow Wilson believed when he established the Federal Reserve in the first place in 1913. Wilson had voted as a "Gold Democrat" for the New Democratic (Gold) Party in 1896. He did not anticipate that the New Deal coupled with the social democratic (Roosevelt-Rockefeller-Nixon-Bush) wing of the Republican Party would declare against the gold standard. And who would have thought that following Richard ("We are all Keynesians now") Nixon, so-called conservatives have become bigger apologists for government control, regulation and debasement of our money supply than their left-wing social democratic colleagues.
These shortages are directly attributable to Fed policy, specifically of the Greenspan-Bernanke Fed. Across the board shortages and price inflation result from malinvestment attributable to excessively low interest rates that fund Wall Street and the commercial banking industry. Thus, the public has subsidized Wall Street to build houses that no one can pay for. The inflationary consequences of the Greenspan-Bernanke policy over the next 30 years will cause many headaches. Although a shortage of spa products or light bulbs are inconvenient, and I can hedge by buying commodities indexes and the like, the Greenspan-Bernanke Fed's three decade-long Christmas for Wall Street, hedge funds and real estate developers has resulted in the death of children in the third world and significantly lower incomes for the average American worker.
It distresses me that double talk--e.g., blaming the results of the Fed's decades-long inflationary stance on third world trade--that characterized discussions about the inflationary recession of the 1970s is again appearing, this time among "conservatives". Social-democratic conservatives seem eager to claim that the interventionist Fed policies of the last three Republican and Clinton administrations have not caused across-the-board inflation in commodity prices, flat wages of workers, wealth transfers to speculators, and child starvation in the third world. They are the friends of big government.
The only solution to flat earnings, reduced wages, inflation and shortages is to get government out of our money supply. That means establishing the kind of gold standard in which Woodrow Wilson believed when he established the Federal Reserve in the first place in 1913. Wilson had voted as a "Gold Democrat" for the New Democratic (Gold) Party in 1896. He did not anticipate that the New Deal coupled with the social democratic (Roosevelt-Rockefeller-Nixon-Bush) wing of the Republican Party would declare against the gold standard. And who would have thought that following Richard ("We are all Keynesians now") Nixon, so-called conservatives have become bigger apologists for government control, regulation and debasement of our money supply than their left-wing social democratic colleagues.
David Horowitz's Legal Response to U Wisconsin Anti-semitism
We have sent the following attorney's letter to the University of Wisconsin in connection with the anti-Semitic attacks on me and the obstruction of my speech.
The Becker Law Firm
23801 Calabasas Road, Suite 1015
Calabasas, CA 91302
May 9, 2008
BY FACSIMILE AND BY REGULAR MAIL
Dr. Carlos E. Santiago, Chancellor
University of Wisconsin-Milwaukee
P.O. Box 413, 2200 E. Kenwood Blvd.
Milwaukee, WI 53201-0413
Re: David Horowitz
Dear Dr. Santiago:
This firm represents David Horowitz and the David Horowitz Freedom Center. Mr. Horowitz was invited by The Conservative Union, a student organization, to speak on your campus on April 30, 2008. His visit met with an unusually malicious campaign orchestrated by students aligned with the Muslim Students Association (“MSA”) to disrupt it and to prevent his message from reaching its audience.
Colleges and universities have a duty to protect free speech on campus and to take reasonable steps to protect on-campus speakers and organizations from conduct intended to obstruct and undermine peaceful expressions of viewpoints that may be unpopular. In all candor, the tactics employed by the agitators, as detailed below, distinguish your institution as particularly hostile and indifferent to civil liberties and First Amendment protections. The purpose of this letter is to request UWM’s rules, regulations, policies, procedures and guidelines pertaining to visiting speakers and hate speech, and specifically instructions for handling demonstrators, including investigation and arrest policies and procedures. As set forth below, we also request additional information about the University's relationship with MSA.
A search of UMW’s web site does not yield the university’s policies but does generate a revealing statement of university policy contained in a report from the late 1960s:[1]
“The University of Wisconsin has a long-standing and consistent record of support for civil liberties, particularly the First Amendment freedoms of speech, press, and assembly.
“The University’s commitment to civil liberties is not only a commitment to popular causes, but involves (1) freedom for controversial persons invited to the campus to speak, and to communicate, and (2) the freedom of those who would join together with them to talk, listen, and engage in dialogue.
“Such freedoms of assembly, speech, and press are violated when unpopular speakers are banned from campus [and] when controversial speakers invited to campus are not permitted to be heard. . . .
“University policy permits peaceful, non-disruptive, protest – even peaceful picketing which does not interfere with the University’s orderly conduct of its affairs. However, University policy does not – and cannot – condone those actions undertaken either by a tiny minority of students, or by an overwhelming majority, which would violate the rights of other students (or faculty) to assemble, speak,, and exchange ideas and information. . . .”
The report observed that the American Civil Liberties Union “considers it important to emphasize that it does not approve of demonstrators who deprive others of the opportunity to speak or be heard, or physically obstruct movement, or otherwise improperly disrupt … legitimate educational or institutional processes.”
The report also noted that a proposed draft of a student bill of rights of AAUP “takes precisely the same position” and that “this position has been endorsed by many other groups in higher education.”
Is this the university’s current policy, and if it is, where can it be found and how is it enforced?
These questions bear on the rights of Mr. Horowitz, the Conservative Union, who sponsored the event, the students who were deprived of attending the event due to obstructive activities, and those who peacefully attended the lecture, whether their rights were violated and whether university policy was ignored or selectively enforced.
According to Mr. Horowitz and to officers of the Conservative Union, the following disruptive activities occurred in connection with the event:
A flyer titled “Getting to Know David Horowitz,” and featuring a section headed “Who is David Whorowitz?” at the top of the page was posted on a bulletin board outside the office of the Muslim Students’ Association. The flyer additionally featured a cartoon depicting Mr. Horowitz as an anti-Semitic caricature of a Jew in the classic style familiar from the Nazi posters of the 1930s, which have become ubiquitous in the Arab world. The Jew in the cartoon was standing in a garbage can with the cover on his head, dressed in a Nazi uniform, with an armband marked “H” for “Horowitz.” The caption read “Horowitz Awareness Week.” On the side of the garbage can one could read a series of false statements concerning Mr. Horowitz that have been given currency by radical professors and the secular left on college campuses: “Muzzling Academics, Blacklisting, Hate Mongering, Race Baiting, Spying…” The flyer describes Mr. Horowitz as an “Israeli apologist” and “Judeofascist”, and incorrectly claims that he ran an ad in the university newspaper “alleging that a UWM student group, the Muslim Students’ Association, is an extremist organization engaged in violent jihad.”The character depicting Mr. Horowitz states in the cartoon: “Mirror, mirror on the wall, who is the most fascist of them all?” The flyer goes beyond legitimate parody or editorial comment and purports to imitate the views Mr. Horowitz develops through rigorous research and scholarship. However, while purporting to mock Mr. Horowitz’ claims concerning Islamofascism, it offers no evidence of legitimacy and, instead, maligns Jews while casting Mr. Horowitz in a false light. (The flyer is attached to this letter.)
Prior to Mr. Horowitz’s appearance, members of the MSA had torn down approximately 2,000 flyers that had been posted to advertise the event.
Members of the MSA surrounded students distributing the Conservative Union’s pamphlet at a table. They shouted,“cancel the speech.” Because of these tactics, a threat of violent behavior at Mr. Horowitz’s lecture was taken seriously, and campus security ordered metal detectors and a security force of a more than dozen officers and staffers for the event.
Numerous individuals interrupted Mr. Horowitz’s remarks with the goal of silencing him. More than a dozen individuals associated with the MSA tried to drown out Mr. Horowitz’s comments, were warned to stop, and had to be ejectedfrom the Student Union auditorium.
It is our understanding that the university funds MSA, whose activities involving Mr. Horowitz’s appearance clearly transgressed the rights of students, Jews, Mr. Horowitz and others. We request information concerning the university’s financial relationship with and support of the MSA chapter, which, by virtue of the cartoon and comments described herein, appears to promote, endorse and engage in hate speech as well as other activities that violate the constitutional rights of speech and assembly.
We are advised that although campus security took some steps to avoid violence and disruption, it failed to gather the names of individuals who disrupted the lecture or to otherwise discipline them. We would also like to know why university policy appears not to have been enforced in connection with this event, or why the individuals who disrupted a peaceful assembly evidently have not been investigated.
In the interest of promoting robust First Amendment protections on the UWM campus, we thank you in advance for your prompt attention to this matter.
Very truly yours,
The Becker Law Firm
William J. Becker, Jr.
cc: David Horowitz, David Horowitz Freedom Center
Manny Klausner, Individual Rights Foundation
wjb/gm
Attachment
The Becker Law Firm
23801 Calabasas Road, Suite 1015
Calabasas, CA 91302
May 9, 2008
BY FACSIMILE AND BY REGULAR MAIL
Dr. Carlos E. Santiago, Chancellor
University of Wisconsin-Milwaukee
P.O. Box 413, 2200 E. Kenwood Blvd.
Milwaukee, WI 53201-0413
Re: David Horowitz
Dear Dr. Santiago:
This firm represents David Horowitz and the David Horowitz Freedom Center. Mr. Horowitz was invited by The Conservative Union, a student organization, to speak on your campus on April 30, 2008. His visit met with an unusually malicious campaign orchestrated by students aligned with the Muslim Students Association (“MSA”) to disrupt it and to prevent his message from reaching its audience.
Colleges and universities have a duty to protect free speech on campus and to take reasonable steps to protect on-campus speakers and organizations from conduct intended to obstruct and undermine peaceful expressions of viewpoints that may be unpopular. In all candor, the tactics employed by the agitators, as detailed below, distinguish your institution as particularly hostile and indifferent to civil liberties and First Amendment protections. The purpose of this letter is to request UWM’s rules, regulations, policies, procedures and guidelines pertaining to visiting speakers and hate speech, and specifically instructions for handling demonstrators, including investigation and arrest policies and procedures. As set forth below, we also request additional information about the University's relationship with MSA.
A search of UMW’s web site does not yield the university’s policies but does generate a revealing statement of university policy contained in a report from the late 1960s:[1]
“The University of Wisconsin has a long-standing and consistent record of support for civil liberties, particularly the First Amendment freedoms of speech, press, and assembly.
“The University’s commitment to civil liberties is not only a commitment to popular causes, but involves (1) freedom for controversial persons invited to the campus to speak, and to communicate, and (2) the freedom of those who would join together with them to talk, listen, and engage in dialogue.
“Such freedoms of assembly, speech, and press are violated when unpopular speakers are banned from campus [and] when controversial speakers invited to campus are not permitted to be heard. . . .
“University policy permits peaceful, non-disruptive, protest – even peaceful picketing which does not interfere with the University’s orderly conduct of its affairs. However, University policy does not – and cannot – condone those actions undertaken either by a tiny minority of students, or by an overwhelming majority, which would violate the rights of other students (or faculty) to assemble, speak,, and exchange ideas and information. . . .”
The report observed that the American Civil Liberties Union “considers it important to emphasize that it does not approve of demonstrators who deprive others of the opportunity to speak or be heard, or physically obstruct movement, or otherwise improperly disrupt … legitimate educational or institutional processes.”
The report also noted that a proposed draft of a student bill of rights of AAUP “takes precisely the same position” and that “this position has been endorsed by many other groups in higher education.”
Is this the university’s current policy, and if it is, where can it be found and how is it enforced?
These questions bear on the rights of Mr. Horowitz, the Conservative Union, who sponsored the event, the students who were deprived of attending the event due to obstructive activities, and those who peacefully attended the lecture, whether their rights were violated and whether university policy was ignored or selectively enforced.
According to Mr. Horowitz and to officers of the Conservative Union, the following disruptive activities occurred in connection with the event:
A flyer titled “Getting to Know David Horowitz,” and featuring a section headed “Who is David Whorowitz?” at the top of the page was posted on a bulletin board outside the office of the Muslim Students’ Association. The flyer additionally featured a cartoon depicting Mr. Horowitz as an anti-Semitic caricature of a Jew in the classic style familiar from the Nazi posters of the 1930s, which have become ubiquitous in the Arab world. The Jew in the cartoon was standing in a garbage can with the cover on his head, dressed in a Nazi uniform, with an armband marked “H” for “Horowitz.” The caption read “Horowitz Awareness Week.” On the side of the garbage can one could read a series of false statements concerning Mr. Horowitz that have been given currency by radical professors and the secular left on college campuses: “Muzzling Academics, Blacklisting, Hate Mongering, Race Baiting, Spying…” The flyer describes Mr. Horowitz as an “Israeli apologist” and “Judeofascist”, and incorrectly claims that he ran an ad in the university newspaper “alleging that a UWM student group, the Muslim Students’ Association, is an extremist organization engaged in violent jihad.”The character depicting Mr. Horowitz states in the cartoon: “Mirror, mirror on the wall, who is the most fascist of them all?” The flyer goes beyond legitimate parody or editorial comment and purports to imitate the views Mr. Horowitz develops through rigorous research and scholarship. However, while purporting to mock Mr. Horowitz’ claims concerning Islamofascism, it offers no evidence of legitimacy and, instead, maligns Jews while casting Mr. Horowitz in a false light. (The flyer is attached to this letter.)
Prior to Mr. Horowitz’s appearance, members of the MSA had torn down approximately 2,000 flyers that had been posted to advertise the event.
Members of the MSA surrounded students distributing the Conservative Union’s pamphlet at a table. They shouted,“cancel the speech.” Because of these tactics, a threat of violent behavior at Mr. Horowitz’s lecture was taken seriously, and campus security ordered metal detectors and a security force of a more than dozen officers and staffers for the event.
Numerous individuals interrupted Mr. Horowitz’s remarks with the goal of silencing him. More than a dozen individuals associated with the MSA tried to drown out Mr. Horowitz’s comments, were warned to stop, and had to be ejectedfrom the Student Union auditorium.
It is our understanding that the university funds MSA, whose activities involving Mr. Horowitz’s appearance clearly transgressed the rights of students, Jews, Mr. Horowitz and others. We request information concerning the university’s financial relationship with and support of the MSA chapter, which, by virtue of the cartoon and comments described herein, appears to promote, endorse and engage in hate speech as well as other activities that violate the constitutional rights of speech and assembly.
We are advised that although campus security took some steps to avoid violence and disruption, it failed to gather the names of individuals who disrupted the lecture or to otherwise discipline them. We would also like to know why university policy appears not to have been enforced in connection with this event, or why the individuals who disrupted a peaceful assembly evidently have not been investigated.
In the interest of promoting robust First Amendment protections on the UWM campus, we thank you in advance for your prompt attention to this matter.
Very truly yours,
The Becker Law Firm
William J. Becker, Jr.
cc: David Horowitz, David Horowitz Freedom Center
Manny Klausner, Individual Rights Foundation
wjb/gm
Attachment
Vote Every One of Them Out
The perspicacious JammieWearingFool has a useful suggestion:
"This has now gotten out of hand. Our U S Congress is the biggest collection of worthless, oxygen thieving parasites still being allowed to exist."
Definitely perspicacious, and articulate as well.
"This has now gotten out of hand. Our U S Congress is the biggest collection of worthless, oxygen thieving parasites still being allowed to exist."
Definitely perspicacious, and articulate as well.
Thursday, May 8, 2008
Jobs for Ulster County
Lance Matteson is president of the Ulster County Development Corp. and his job is to find Ulster County jobs. Recently, County Legislature Minority Leader Glen Noonan called Matteson’s job oxymoronic. But sustainable economic development is achievable. To create jobs, Ulster County needs to break bad habits. Like New York State as a whole, too much of Ulster County’s jobs strategy has depended on large-scale government funding. These include the $117 million Woodland Pond development in New Paltz, the $1 million Kings Highway project and the $8 million Solar Energy Consortium that depends on federal and state funding. These are worthy projects. But a better and more sustainable approach would be a micro-jobs strategy. The entrepreneurial spirit of the County’s hard working and creative citizens could be supported through encouraging loans and tax breaks to entrepreneurial business start ups rather than to big developers.
Capitalizing on Ulster County’s cultural and natural treasures requires creativity that builds on institutional and human capital. Museums, resorts and support for the arts are some of the directions a jobs strategy might take that amplify the County’s strengths. We can all imagine arts centers, Catskill museums and new IBMs reappearing in Kingston. But big ideas are not enough. In corporate America, for every product idea that succeeds, seven fail. Why should Ulster County be different? Many small ideas offer a better and more sustainable strategy than a few big ones rigidly controlled. Why focus on home run sluggers when Ulster County can encourage many base hitters?
Of all of Ulster County’s wonderful assets, its most important is its hardworking, entrepreneurial and imaginative citizenry. The best jobs strategy would not only amplify their skills and human capital, but would build on their imagination through a technique known as micro finance. Micro finance is a way to rebalance the economy’s bias toward big developers, large corporations and big banks back to individuals. It is the individual that made America great, not big business. What we remember as the biggest firms, Standard Oil (Exxon), McDonald’s and Dell Computer, started as ideas that were funded through personal saving. Exxon was founded by John D. Rockefeller, who in three years as an accounting clerk was able to save one year’s salary and bought his first store in Cleveland. McDonald’s was started by the McDonald brothers who closed their hot dog stand to open the first scientific-management designed restaurant. Dell Computer was started by a college student named Michael Dell. But in the past six decades New York has sacrificed its entrepreneurial spirit to big developers and state eminent domain schemes. High taxes discourage private citizens from saving the capital they need. And the capital is transferred to big firms like Bear Stearns that often squander it. Howard Schultz, born in Brooklyn, moved to Seattle to make Starbucks a great firm.
For too long New York State has relied on government solutions to economic problems. The result has been a consistent pattern of economic decline. The reliance on big government development comes from the State’s early and ambitious adoption of the Progressive ideas of Theodore Roosevelt, Al Smith and Robert Moses. More than other states, New York has relied on private use eminent domain, high taxes and subsidies to big business. The Progressive model has failed.
New York State’s population has grown by a 30 percent over the past 40 years and since the 1970s much of that growth is due to immigration. In contrast, the US population has doubled, a growth rate three times that of New York’s. In the post-World War II period, New York has lead the nation in both the numbers of people leaving the state and in the number of private use eminent domain actions taken. Upstate New York has become a ghost land of deserted factories and impoverished but hard working citizens while New York has consistently ranked among the top three states in taxation.
The State has relied on a flawed model of urban renewal and economic development that involves public subsidies to large projects. The Progressive model that Al Smith and Robert Moses pioneered assumed that the chief problem confronting society was to replace individual initiative with government intervention. New York advocated higher taxes, greater degrees of regulation and greater government involvement in the economy.
Among the most important of the policies replacing individual initiative with large institutions have been those that inhibit individual capital formation, savings, by private individuals. But private savings is how most of the nation’s important businesses, from Standard Oil to Dell Computer, have been formed. A jobs formation strategy ought to focus on re-orienting banks and public policies away from taxation and toward financing entrepreneurial start ups. This would involve encouraging banks and other lenders to finance and support start ups within Ulster County.
Economic growth comes not from attracting large businesses into Ulster County, but from creating conditions whereby Ulster County’s entrepreneurial, academic, artistic and idealistic spirit can best express itself. This can be done by re-balancing access to credit from big developers to small business and start-up entrepreneurs.
Microfinance is the idea that financial institutions can be encouraged, supported or created to provide financial services to entrepreneurs that enhance their ability to start businesses. The recent fiasco in the national credit market suggests that financial insitutions have lacked competence in assessing the best credit risks. They have tended to exclude small borrowers and taken reckless gambles that have ended up requiring public support. The scorning of entrepreneurial start ups by the nation’s financial institutions has caused the inefficient allocation of financing away from entrepreneurs toward real estate, big box retail and hedge funds.
A meaningful jobs strategy would start with Ulster County’s development of a loan guarantee program, much like student loans, whereby banks would be encouraged to lend to entrepreneurs along with arrangement for tax abatements and refunds for individuals who start businesses.
Capitalizing on Ulster County’s cultural and natural treasures requires creativity that builds on institutional and human capital. Museums, resorts and support for the arts are some of the directions a jobs strategy might take that amplify the County’s strengths. We can all imagine arts centers, Catskill museums and new IBMs reappearing in Kingston. But big ideas are not enough. In corporate America, for every product idea that succeeds, seven fail. Why should Ulster County be different? Many small ideas offer a better and more sustainable strategy than a few big ones rigidly controlled. Why focus on home run sluggers when Ulster County can encourage many base hitters?
Of all of Ulster County’s wonderful assets, its most important is its hardworking, entrepreneurial and imaginative citizenry. The best jobs strategy would not only amplify their skills and human capital, but would build on their imagination through a technique known as micro finance. Micro finance is a way to rebalance the economy’s bias toward big developers, large corporations and big banks back to individuals. It is the individual that made America great, not big business. What we remember as the biggest firms, Standard Oil (Exxon), McDonald’s and Dell Computer, started as ideas that were funded through personal saving. Exxon was founded by John D. Rockefeller, who in three years as an accounting clerk was able to save one year’s salary and bought his first store in Cleveland. McDonald’s was started by the McDonald brothers who closed their hot dog stand to open the first scientific-management designed restaurant. Dell Computer was started by a college student named Michael Dell. But in the past six decades New York has sacrificed its entrepreneurial spirit to big developers and state eminent domain schemes. High taxes discourage private citizens from saving the capital they need. And the capital is transferred to big firms like Bear Stearns that often squander it. Howard Schultz, born in Brooklyn, moved to Seattle to make Starbucks a great firm.
For too long New York State has relied on government solutions to economic problems. The result has been a consistent pattern of economic decline. The reliance on big government development comes from the State’s early and ambitious adoption of the Progressive ideas of Theodore Roosevelt, Al Smith and Robert Moses. More than other states, New York has relied on private use eminent domain, high taxes and subsidies to big business. The Progressive model has failed.
New York State’s population has grown by a 30 percent over the past 40 years and since the 1970s much of that growth is due to immigration. In contrast, the US population has doubled, a growth rate three times that of New York’s. In the post-World War II period, New York has lead the nation in both the numbers of people leaving the state and in the number of private use eminent domain actions taken. Upstate New York has become a ghost land of deserted factories and impoverished but hard working citizens while New York has consistently ranked among the top three states in taxation.
The State has relied on a flawed model of urban renewal and economic development that involves public subsidies to large projects. The Progressive model that Al Smith and Robert Moses pioneered assumed that the chief problem confronting society was to replace individual initiative with government intervention. New York advocated higher taxes, greater degrees of regulation and greater government involvement in the economy.
Among the most important of the policies replacing individual initiative with large institutions have been those that inhibit individual capital formation, savings, by private individuals. But private savings is how most of the nation’s important businesses, from Standard Oil to Dell Computer, have been formed. A jobs formation strategy ought to focus on re-orienting banks and public policies away from taxation and toward financing entrepreneurial start ups. This would involve encouraging banks and other lenders to finance and support start ups within Ulster County.
Economic growth comes not from attracting large businesses into Ulster County, but from creating conditions whereby Ulster County’s entrepreneurial, academic, artistic and idealistic spirit can best express itself. This can be done by re-balancing access to credit from big developers to small business and start-up entrepreneurs.
Microfinance is the idea that financial institutions can be encouraged, supported or created to provide financial services to entrepreneurs that enhance their ability to start businesses. The recent fiasco in the national credit market suggests that financial insitutions have lacked competence in assessing the best credit risks. They have tended to exclude small borrowers and taken reckless gambles that have ended up requiring public support. The scorning of entrepreneurial start ups by the nation’s financial institutions has caused the inefficient allocation of financing away from entrepreneurs toward real estate, big box retail and hedge funds.
A meaningful jobs strategy would start with Ulster County’s development of a loan guarantee program, much like student loans, whereby banks would be encouraged to lend to entrepreneurs along with arrangement for tax abatements and refunds for individuals who start businesses.
Wednesday, May 7, 2008
The Central Economic Question of Our Time Is Monetary
Dinocrat points out that emerging market nations now export and import to and from each other as much as they do to and from the United States and Europe. Dinocrat suggests that multilateral trade will lead to increased commodity prices if the US and Europe are in recession because the third world will continue to demand commodities given that their economies are independent of the first world's.
The increase in commodity prices is due not just to real demand for commodities but, more importantly, to monetary expansion by the Federal Reserve Bank. Monetary expansion (the Federal Reserve Bank's and the banking system's printing of new dollars) escalated when Richard M. Nixon abolished the gold standard for international dollar holders in 1971. The Federal Reserve Bank has increased the number of dollars in circulation by something in the area of 8 percent per year since then.
Until recently, this generous dollar inflation has not translated into higher prices for three reasons. First, the Department of Labor began excluding increases in home prices from their price inflation statistic, the consumer price index, in the early 1980s, and a significant share of the price inflation went into home prices. Second, international investors have held the majority of dollars. Approximately ten dollars are held internationally for every dollar held in the United States. The expansion of international holdings of dollars has permitted low interest rates to be coupled with relatively low price inflation. Should the international dollar holders decide to sell, there could be hyper-inflation in the United States, resulting in much increased commodity and general price inflation.
The recent increase in commodity prices is not especially long in the tooth. We could see much greater inflation in the coming years if global dollar holders decide to sell.
Third, Howard S. Katz has argued, convincingly, that the low commodity prices of the 1990s were attributable to the Greenspan Fed's high rate of monetary inflation. The initial effect of the Greenspan Fed's monetary expansion since the Reagan era was to reduce interest rates. The low interest rates led to an expansion of commodity production because miners and other commodity producers could borrow and so expand their production. The expanded production led to price competition in the 1990s, which in turn led to low commodity prices and low inflation. However, the producers closed their doors because of the lower prices. Mines and farms became less profitable. However, the monetary expansion has led to continued increased demand. It will take time before the mines can reopen, and therefore commodity price inflation will continue for several years.
As well, the Fed lent money to real estate developers who developed farm land. When President Bush pushed through the ethanol policy that increased demand for corn, farm land that had been previously available for farming was no longer available because it had been developed into shopping malls, residential housing and related real estate investments. This has been true globally as nations like China have also inflated their money supplies, malinvesting artificial, central bank-created money into real estate and reducing the amount of farm land available. Thus, the recent food, metals, energy and other commodity shortages are interrelated, and they are the result of the Greenspan Fed's and third world central banks' policies.
In order for commodity prices to fall, new commodity production will need to reopen. However, there is a multi-year lag because it is expensive and difficult to re-open mines once closed. In the case of agriculture, it is prohibitively expensive to reclaim farm land that has been converted into homes that cost six figures apiece.
If the recent secular upward trend in commodity prices were merely due to demand for specific commodities in the third world, increases in one commodity's price would be offset by reduced demand for that commodity. This is true whether third world nations trade with themselves, with the US or with the man in the moon. When all commodities go up in tandem the reason is that central bankers have increased the money supply.
One of the key effects of monetary inflation has been increasing asset values. Thus, the increases in the stock market since 1981 have been attributable to the same Federal Reserve policies that caused the post-2000 real estate bubble, the hedge fund and private equity boom, increased starvation in the the third world, and flat real wages among US workers (due to price inflation).
These ideas are expressed in the writings of Ludwig von Mises and in Howard S. Katz's Paper Aristocracy. In order to end price inflation, the Federal Reserve's monetary expansion (reduction of interest rates below their market level) would need to be ended. Because the stock and real estate markets depend on the wealth transfer that the Federal Reserve effects, this is unlikely to happen unless the public demands a metallic standard, a gold standard. Inflation will exist as will food shortages and third world (if not first world) starvation as long as the Fed transfers wealth to wealthy borrowers from wage earners.
The increase in commodity prices is due not just to real demand for commodities but, more importantly, to monetary expansion by the Federal Reserve Bank. Monetary expansion (the Federal Reserve Bank's and the banking system's printing of new dollars) escalated when Richard M. Nixon abolished the gold standard for international dollar holders in 1971. The Federal Reserve Bank has increased the number of dollars in circulation by something in the area of 8 percent per year since then.
Until recently, this generous dollar inflation has not translated into higher prices for three reasons. First, the Department of Labor began excluding increases in home prices from their price inflation statistic, the consumer price index, in the early 1980s, and a significant share of the price inflation went into home prices. Second, international investors have held the majority of dollars. Approximately ten dollars are held internationally for every dollar held in the United States. The expansion of international holdings of dollars has permitted low interest rates to be coupled with relatively low price inflation. Should the international dollar holders decide to sell, there could be hyper-inflation in the United States, resulting in much increased commodity and general price inflation.
The recent increase in commodity prices is not especially long in the tooth. We could see much greater inflation in the coming years if global dollar holders decide to sell.
Third, Howard S. Katz has argued, convincingly, that the low commodity prices of the 1990s were attributable to the Greenspan Fed's high rate of monetary inflation. The initial effect of the Greenspan Fed's monetary expansion since the Reagan era was to reduce interest rates. The low interest rates led to an expansion of commodity production because miners and other commodity producers could borrow and so expand their production. The expanded production led to price competition in the 1990s, which in turn led to low commodity prices and low inflation. However, the producers closed their doors because of the lower prices. Mines and farms became less profitable. However, the monetary expansion has led to continued increased demand. It will take time before the mines can reopen, and therefore commodity price inflation will continue for several years.
As well, the Fed lent money to real estate developers who developed farm land. When President Bush pushed through the ethanol policy that increased demand for corn, farm land that had been previously available for farming was no longer available because it had been developed into shopping malls, residential housing and related real estate investments. This has been true globally as nations like China have also inflated their money supplies, malinvesting artificial, central bank-created money into real estate and reducing the amount of farm land available. Thus, the recent food, metals, energy and other commodity shortages are interrelated, and they are the result of the Greenspan Fed's and third world central banks' policies.
In order for commodity prices to fall, new commodity production will need to reopen. However, there is a multi-year lag because it is expensive and difficult to re-open mines once closed. In the case of agriculture, it is prohibitively expensive to reclaim farm land that has been converted into homes that cost six figures apiece.
If the recent secular upward trend in commodity prices were merely due to demand for specific commodities in the third world, increases in one commodity's price would be offset by reduced demand for that commodity. This is true whether third world nations trade with themselves, with the US or with the man in the moon. When all commodities go up in tandem the reason is that central bankers have increased the money supply.
One of the key effects of monetary inflation has been increasing asset values. Thus, the increases in the stock market since 1981 have been attributable to the same Federal Reserve policies that caused the post-2000 real estate bubble, the hedge fund and private equity boom, increased starvation in the the third world, and flat real wages among US workers (due to price inflation).
These ideas are expressed in the writings of Ludwig von Mises and in Howard S. Katz's Paper Aristocracy. In order to end price inflation, the Federal Reserve's monetary expansion (reduction of interest rates below their market level) would need to be ended. Because the stock and real estate markets depend on the wealth transfer that the Federal Reserve effects, this is unlikely to happen unless the public demands a metallic standard, a gold standard. Inflation will exist as will food shortages and third world (if not first world) starvation as long as the Fed transfers wealth to wealthy borrowers from wage earners.
Tuesday, May 6, 2008
Rationality, Progressivism and the Market
The market and progressivism pose two alternative approaches to rationality. Progressives argue that social deliberation can be purposeful and that incentives that might distort rationality in deliberative decision making, such as special interest group incentives to lobby for political benefits, do not distort deliberative processes sufficiently to outweigh the benefits from deliberation. Market theorists argue that rationality depends on information appropriate to a given time and place that cannot be communicated or discerned by a deliberative body, and less so by society at large. Economic actors have specialized knowledge such as price and technological knowledge that is difficult to communicate and far too complex to be known by outsiders. This knowledge is not the knowledge of general experts, economists or the like but rather of people who understand narrow production and market demand problems because the information required is very specific. For instance, do the people of Oshkosh like a different kind of Italian food from the people of Rochester or of Madison? Do bagel consumers in Manhattan have a different taste from those in Queens, Brooklyn or Wisconsin? This kind of information can be learned through trial and error.
The organizational life cycle and organizational learning would be critical to the second kind of information but not the first. In order to survive, organizations would need to obtain and utilize the second form of information, and the incentive to do so would be the threat of organizational death. In contrast, organizations need not learn if knowledge is deliberative. All that would be required were knowledge deliberative in nature would be the hiring of outside experts to maintain or improve institutions.
This has been the claim of Progressives and New Deal social democrats who have instituted an increasing degree of government intervention. Knowledge is general in nature and so requires the help of experts trained in general theory.
There should be empirical tests available as to which approach to rationality works better. Where there are more bankruptcies, over a 40 year period do economies do better or worse? If they do better, then there would be some support for the market-based model of rationality. If they do worse over the long term, then the social democratic-progressive model would be better supported. Likewise, the possibility of organizational birth would be associated with the market-based model of rationality. Where there are more organizational births, one would expect to see greater economic vitality according to the market-based model. Deliberative processes would tend to lead to stability, hence organizational learning, death and volatility would be associated with long run economic vitality under the market-based model. But more gradual change, which would be limited by economic and scientific theory, would be associated with success under the social democratic-progressive model. Volatility and risk associated with responsiveness to price and demand fluctuations would be associated with economic success under the market-based model but not under the social-democratic-progressive model.
Another importatn question is where do innovations occur most frequently under this continuum:
total state control--->social democracy---->limited state
Which of the three is associated with the most innovation? This can be viewed within the United States. Does innovation occur more in states with the least government intervention or the most? Did innovation occur more frequently in the nineteenth century or the twentieth century?
The organizational life cycle and organizational learning would be critical to the second kind of information but not the first. In order to survive, organizations would need to obtain and utilize the second form of information, and the incentive to do so would be the threat of organizational death. In contrast, organizations need not learn if knowledge is deliberative. All that would be required were knowledge deliberative in nature would be the hiring of outside experts to maintain or improve institutions.
This has been the claim of Progressives and New Deal social democrats who have instituted an increasing degree of government intervention. Knowledge is general in nature and so requires the help of experts trained in general theory.
There should be empirical tests available as to which approach to rationality works better. Where there are more bankruptcies, over a 40 year period do economies do better or worse? If they do better, then there would be some support for the market-based model of rationality. If they do worse over the long term, then the social democratic-progressive model would be better supported. Likewise, the possibility of organizational birth would be associated with the market-based model of rationality. Where there are more organizational births, one would expect to see greater economic vitality according to the market-based model. Deliberative processes would tend to lead to stability, hence organizational learning, death and volatility would be associated with long run economic vitality under the market-based model. But more gradual change, which would be limited by economic and scientific theory, would be associated with success under the social democratic-progressive model. Volatility and risk associated with responsiveness to price and demand fluctuations would be associated with economic success under the market-based model but not under the social-democratic-progressive model.
Another importatn question is where do innovations occur most frequently under this continuum:
total state control--->social democracy---->limited state
Which of the three is associated with the most innovation? This can be viewed within the United States. Does innovation occur more in states with the least government intervention or the most? Did innovation occur more frequently in the nineteenth century or the twentieth century?
Party Affiliation and the Media's Lying Quality
In the nineteenth century news sources openly identified their party affiliations. That practice gradually eroded in the twentieth. The New York Times claimed that objective journalism was their goal. They made a good stab at it, but by now they are a Democratic (and social democratic) newspaper. Most other newspapers followed their lead because journalists believed that the Times was the best paper, the newspaper of record. As a result, the newspapers have tended to follow a Democratic Party line.
The television networks were established during a period when the Democratic Party was dominant. Although they do not express a party affiliation, they are mostly supportive of the Democratic Party. This is inequitable because the air waves are public property and should not all be allocated to one party. There needs to be open discussion of partisan dominance of the television networks.
It is time for consumers of news to demand that news sources openly affiliate with one party or another. It is pointless to claim, as do many conservatives, that a Democratic Party newspaper like the Times is biased toward the Democrats. Of course it is. Rather, readers should demand integrity from media. Integrity means that media ought to state the party or ideology with which it is affiliated. It is the false claim to objectivity that irritates conservatives, not the fact that media is biased. Objecting to bias is like objecting to the grim reaper. You can complain all you want, but you're going to be reaped anyway. The fact that social democrats do not make bias complaints about the media is significant evidence that the conservatives' complaint is true.
Many in the media vapidly claim that they are not biased. But it does not occur to them that conservatives frequently complain that they are biased and social democrats defend them. This alone closes the case. There is no reasonable doubt if all on one side complain and all on the other defend them. That is what bias means.
I agree with conservative attacks on the Times just as I agree with reasoned attacks on Barack Obama and Hillary Clinton. But isn't it time to call a social democrat a social democrat and start confronting real issues? These would include abolition of the Department of Education; abolition of the Federal Reserve Bank; privatization of the Post Office; privatization of social security, educational vouchers........
The television networks were established during a period when the Democratic Party was dominant. Although they do not express a party affiliation, they are mostly supportive of the Democratic Party. This is inequitable because the air waves are public property and should not all be allocated to one party. There needs to be open discussion of partisan dominance of the television networks.
It is time for consumers of news to demand that news sources openly affiliate with one party or another. It is pointless to claim, as do many conservatives, that a Democratic Party newspaper like the Times is biased toward the Democrats. Of course it is. Rather, readers should demand integrity from media. Integrity means that media ought to state the party or ideology with which it is affiliated. It is the false claim to objectivity that irritates conservatives, not the fact that media is biased. Objecting to bias is like objecting to the grim reaper. You can complain all you want, but you're going to be reaped anyway. The fact that social democrats do not make bias complaints about the media is significant evidence that the conservatives' complaint is true.
Many in the media vapidly claim that they are not biased. But it does not occur to them that conservatives frequently complain that they are biased and social democrats defend them. This alone closes the case. There is no reasonable doubt if all on one side complain and all on the other defend them. That is what bias means.
I agree with conservative attacks on the Times just as I agree with reasoned attacks on Barack Obama and Hillary Clinton. But isn't it time to call a social democrat a social democrat and start confronting real issues? These would include abolition of the Department of Education; abolition of the Federal Reserve Bank; privatization of the Post Office; privatization of social security, educational vouchers........
College Senior on Wal-Mart
A graduating college senior has written the following about Wal-Mart:
"Wal-Mart, the company that has changed the way business is being done today. Wal-Mart being the largest retail in the world has shifted businesses from the United States to China...Wal-Mart claims that it helps people in the middle class and lower class society, but who really benefits from their way of business practices?...
"What does Wal-Mart really offer to the public; do the prices really meat the consumers needs? Yes, Wal-Mart does have the lowest prices then anywhere else but through their stampede over other businesses they don't really leave much room for quality and expertise in the product that we as the consumer purchase. Through billions of dollars of merchandise that is imported through Chinese manufacturers not one has any long lasting quality..."
"Wal-Mart, the company that has changed the way business is being done today. Wal-Mart being the largest retail in the world has shifted businesses from the United States to China...Wal-Mart claims that it helps people in the middle class and lower class society, but who really benefits from their way of business practices?...
"What does Wal-Mart really offer to the public; do the prices really meat the consumers needs? Yes, Wal-Mart does have the lowest prices then anywhere else but through their stampede over other businesses they don't really leave much room for quality and expertise in the product that we as the consumer purchase. Through billions of dollars of merchandise that is imported through Chinese manufacturers not one has any long lasting quality..."
Monday, May 5, 2008
Saturday, May 3, 2008
In Spring, A Student's Thoughts Turn to GETTING OUT OF THE EXAM
When I was a student I viewed an exam as a competition at which I would try to excel. For the first time in my 16-year teaching career students in several classes have been trying to get me to delay or cancel my exam. My practice is to wait until very late in the semester to give an exam, and I warn the students from the first day of class that the exam will be competitive. There is only one week left to the semester. I received the following seven e-mails today all from different senders in three different classes. Are our educational system and culture on the right track?
I. Saturday, May 03, 2008 3:16 PM
Hello Professor Langbert,
The reading for the exam has been little much for me, because I'm taking 6 classes this semester and I'm also interning for 20 hours a week. I feel like I need more time and I want to ask if there is any chance you would consider moving the exam date later in May? We can present our papers this Sunday instead of having the exam now. I hope you understand, but if not, I certainly do understand.
Thank you professor,
II. Saturday, May 03, 2008 7:25 PM
Good morning professor Langbert,
How are you? I was wondering if you might be kind enough give the class an extention on the exam? I have 4 other classes and the materials are a lot to cover.
Thank you!
III. Saturday, May 03, 2008 8:57 PM
is there any way of postponing our exam tomorrow ???
wouldnt your rather see 80s and 90s than have to curve the exam ??
please advs
Saturday, May 03, 2008 11:11 AM
IV. Hi Prof. Langbert, this is...and I wanted to know if I can please have an extension on my paper and the exam on May 4. I wanted an extension because i have not finish all my reading.
Saturday, May 03, 2008 12:43 AM
V. Professor,
How are you doing sir?
I got email from the classmates and I found out that some of us are having a hard time preparing for the exam.
I would greatly appreciate if you could post-pone the exam for us.
Thank you very much for your understanding.
Best regards,
VI. I received an email from ... indicating that you may post pone the exam tomorrow. Since I did not see an announcement on blackboard, I was just wanted to confirm that the exam is tomorrow May 4th.
Thank you,
VII. Prof. Langbert -
A few of us were wondering if you would consider postponing the exam.
My response:
The exam is tomorrow at the stated time and place, and it is going to be hard.
I. Saturday, May 03, 2008 3:16 PM
Hello Professor Langbert,
The reading for the exam has been little much for me, because I'm taking 6 classes this semester and I'm also interning for 20 hours a week. I feel like I need more time and I want to ask if there is any chance you would consider moving the exam date later in May? We can present our papers this Sunday instead of having the exam now. I hope you understand, but if not, I certainly do understand.
Thank you professor,
II. Saturday, May 03, 2008 7:25 PM
Good morning professor Langbert,
How are you? I was wondering if you might be kind enough give the class an extention on the exam? I have 4 other classes and the materials are a lot to cover.
Thank you!
III. Saturday, May 03, 2008 8:57 PM
is there any way of postponing our exam tomorrow ???
wouldnt your rather see 80s and 90s than have to curve the exam ??
please advs
Saturday, May 03, 2008 11:11 AM
IV. Hi Prof. Langbert, this is...and I wanted to know if I can please have an extension on my paper and the exam on May 4. I wanted an extension because i have not finish all my reading.
Saturday, May 03, 2008 12:43 AM
V. Professor,
How are you doing sir?
I got email from the classmates and I found out that some of us are having a hard time preparing for the exam.
I would greatly appreciate if you could post-pone the exam for us.
Thank you very much for your understanding.
Best regards,
VI. I received an email from ... indicating that you may post pone the exam tomorrow. Since I did not see an announcement on blackboard, I was just wanted to confirm that the exam is tomorrow May 4th.
Thank you,
VII. Prof. Langbert -
A few of us were wondering if you would consider postponing the exam.
My response:
The exam is tomorrow at the stated time and place, and it is going to be hard.
Progressives and the Cone of Silence
The very phrase "cone of silence" evokes hilarity, and anyone old enough to have watched Get Smart will agree. Tom Elia notes on Ann Coulter's blog (hat tip Larwyn) that Progressives have been calling for Democratic candidates who appear on Fox News to only do so when the Cone is down:
"Washington (Rooters) -- Angry over appearances of prominent Democrats on the Fox News Channel, some netroots 'progressives' are demanding that Democrats now use only the 'Cone of Silence' when speaking out.
"In response to the report by The Politico's Mike Allen outlining the disgust in the 'progressive' community over the recent appearances by Hillary Clinton and Barack Obama on Fox, as well as DNC Chair Howard Dean's scheduled appearance Sunday, some 'progressives' are demanding that Democrats speak only when using the 'Cone of Silence' made famous by secret agent Maxwell Smart...
Good idea, Tom. Maybe the Democratic networks (CBS, NBC, ABC, HBO, etc.) might benefit from applying the cone full time!
"Washington (Rooters) -- Angry over appearances of prominent Democrats on the Fox News Channel, some netroots 'progressives' are demanding that Democrats now use only the 'Cone of Silence' when speaking out.
"In response to the report by The Politico's Mike Allen outlining the disgust in the 'progressive' community over the recent appearances by Hillary Clinton and Barack Obama on Fox, as well as DNC Chair Howard Dean's scheduled appearance Sunday, some 'progressives' are demanding that Democrats speak only when using the 'Cone of Silence' made famous by secret agent Maxwell Smart...
Good idea, Tom. Maybe the Democratic networks (CBS, NBC, ABC, HBO, etc.) might benefit from applying the cone full time!
Friday, May 2, 2008
Herbert Hoover as the Pardigmatic Progressive-liberal
Most people who have not read a biography of Herbert Hoover do not know that he was among the most assertive of the Progressives, and in many ways his ideas set the tone for much of progressive-liberalism in the eight decades that have ensued since his election to president. When he ran for president in 1928 almost all progressives supported him, including social worker Jane Addams, Ida Tarbell, Herbert Croly, Walter Lippmann, Franklin Roosevelt (before Hoover declared himself a Republican), and many progressive magazine and newspaper editors of the time. Hoover's ideas were quintessentially progressive: an elitist, he proclaimed his belief in democracy. He believed that firms should be motivated by social responsibility and individual interest. He argued for voluntary national planning and that progress depends on the establishment of trade associations that establish voluntary ethical codes. He believed strongly in efficiency and the importance of cooperation and associations. He advocated expansion of public works. He believed in tariffs and protectionism. Hoover's biographer Joan Hoff Wilson notes (p. 69)*:
"Where the classical economists like Adam Smith had argued for uncontrolled competition between independent economic units guided only by the invisible hand of supply and demand, he talked about voluntary national economic planning arising from cooperation between business interests and government. The aim was to eliminate waste through greater production efficiency, lowering prices, raising wages and controlling business cycles. Instead of negative government action in time of depression, he advocated the expansion of public works, avoidance of wage cuts, increased rather than decreased production--measures which would expand rather than contract purchasing power....'We are passing' he told the United States Chamber of Commerce in 1924, 'from a period of extreme individualistic action into a period of associational activities.'"
What made Hoover the prototypical Progressive-liberal was his belief (1) that rational planning guided by the state rather than markets can best solve problems and (2) that the state's role includes the positive inculcation of moral belief. In particular, Hoover pioneered the use of mass propaganda, not only as Warren G. Harding used it in campaigns, but as part of his political strategy. In 1920, Hoover became a moderate advocate of collective bargaining. Hoover believed that workplace conflict was an engineering problem. He was a supporter of scientific management, which was linked to the Progressive movement. Quoting Wilson (p. 56):
"The socioeconomic system [Hoover's ideas] represented could not accurately be described by such words as progressivism, laissez faire capitalism, communism, statism, socialism, corporatism, guildism or syndicalism. The absolute laws of progress that he believed in required a new and superior synthesis that he simply called the American system. What he had in mind was a pragmatic utopianism that defied standard economic and political classifications and was, in truth, progressive in the broadest sense--it was forward looking. Perhaps it could best be characterized as an informal brand of liberal corporatism.
"...idealism could be balanced with self-interest and technological innovation to counter the equally enervating system of state socialism or monopoly capitalism..."
(p. 59)"...Hoover hoped to change values at the grass-roots level by propagating an ideology of cooperative individualism and playing down materialism. Massive education and propaganda campaigns could transform traditional attitudes about private property and profit into a new sense of social responsibility..."
Hoover's elitism came from his background as an engineer who had achieved dramatic success in international mining. He seems to have believed that engineering principles could be applied to reforming society.
Now, what was the outcome of Hoover's presidential administration? What was the result of his elitist belief of his ability to outhink markets and to be able to reform society according to his values (which were very nice, by the way).
The result was the Great Depression. The result of the Depression was the New Deal (which Hoover opposed because he found it too statist). Thus we see the end result of Progressivism. Increasing coercion, government programs that stall progress, and inflation that supports wealthy speculators at the expense of productive workers.
Progressivism begins as an assertion of value superiority by an elite. The value superiority is moral or expresses a belief in democracy, as does Peter Levine. Government action (e.g., Wilson's establishment of the Fed in 1913) is taken to encourage the belief. Smart people (Hoover was very bright) are selected to implement the vision. But they blunder. The blunders are blamed on the people, on freedom and on markets. In turn, coercive statist violence attacks democracy and freedom further, institutionalizing Progressive-liberal neuroticism.
*Joan Hoff Wilson, Herbert Hoover, Forgotten Progressive. Prospect Heights, Ill.: Waveland Press, 1992 (Original Publication: 1975).
"Where the classical economists like Adam Smith had argued for uncontrolled competition between independent economic units guided only by the invisible hand of supply and demand, he talked about voluntary national economic planning arising from cooperation between business interests and government. The aim was to eliminate waste through greater production efficiency, lowering prices, raising wages and controlling business cycles. Instead of negative government action in time of depression, he advocated the expansion of public works, avoidance of wage cuts, increased rather than decreased production--measures which would expand rather than contract purchasing power....'We are passing' he told the United States Chamber of Commerce in 1924, 'from a period of extreme individualistic action into a period of associational activities.'"
What made Hoover the prototypical Progressive-liberal was his belief (1) that rational planning guided by the state rather than markets can best solve problems and (2) that the state's role includes the positive inculcation of moral belief. In particular, Hoover pioneered the use of mass propaganda, not only as Warren G. Harding used it in campaigns, but as part of his political strategy. In 1920, Hoover became a moderate advocate of collective bargaining. Hoover believed that workplace conflict was an engineering problem. He was a supporter of scientific management, which was linked to the Progressive movement. Quoting Wilson (p. 56):
"The socioeconomic system [Hoover's ideas] represented could not accurately be described by such words as progressivism, laissez faire capitalism, communism, statism, socialism, corporatism, guildism or syndicalism. The absolute laws of progress that he believed in required a new and superior synthesis that he simply called the American system. What he had in mind was a pragmatic utopianism that defied standard economic and political classifications and was, in truth, progressive in the broadest sense--it was forward looking. Perhaps it could best be characterized as an informal brand of liberal corporatism.
"...idealism could be balanced with self-interest and technological innovation to counter the equally enervating system of state socialism or monopoly capitalism..."
(p. 59)"...Hoover hoped to change values at the grass-roots level by propagating an ideology of cooperative individualism and playing down materialism. Massive education and propaganda campaigns could transform traditional attitudes about private property and profit into a new sense of social responsibility..."
Hoover's elitism came from his background as an engineer who had achieved dramatic success in international mining. He seems to have believed that engineering principles could be applied to reforming society.
Now, what was the outcome of Hoover's presidential administration? What was the result of his elitist belief of his ability to outhink markets and to be able to reform society according to his values (which were very nice, by the way).
The result was the Great Depression. The result of the Depression was the New Deal (which Hoover opposed because he found it too statist). Thus we see the end result of Progressivism. Increasing coercion, government programs that stall progress, and inflation that supports wealthy speculators at the expense of productive workers.
Progressivism begins as an assertion of value superiority by an elite. The value superiority is moral or expresses a belief in democracy, as does Peter Levine. Government action (e.g., Wilson's establishment of the Fed in 1913) is taken to encourage the belief. Smart people (Hoover was very bright) are selected to implement the vision. But they blunder. The blunders are blamed on the people, on freedom and on markets. In turn, coercive statist violence attacks democracy and freedom further, institutionalizing Progressive-liberal neuroticism.
*Joan Hoff Wilson, Herbert Hoover, Forgotten Progressive. Prospect Heights, Ill.: Waveland Press, 1992 (Original Publication: 1975).
6 Ways Greenspan Caused the Current Economic Crisis
Fiona King of CurrencyTrading.Net just forwarded an excellent blog that she posted concering Alan Greenspan's role in the current economic crisis. I disagree with her policy prescription, but most of her analysis is accurate. Her policy prescription (which is to increase financial regulation) will lead to more of the same problem. But King's blog is excellent.
The problem with more regulation is that, as Enron demonstrated, regulation is an infinite regress. Unscrupulous actors (be they government officials or corporate executives) find ways around the regulation, and the regulator (if not corrupt, which they usually are) has to increase control. But increasing control terminates economic actors' freedom and flexibility. Freedom and flexibility are necessary to growth. Without the ability to respond to market change and to innovate, the economy stagnates. The end result is a controlled system that is like North Korea's or Cuba's at worst and Europe's at best. Stagnant growth is associated with innovation's being forestalled by regulators, corruption, exclusion of people of low socio-economic status from economic opportunity and declining living standards. Regulation solves nothing. It creates poverty.
Moreover, King accepts the explicit purpose or ideological rationale for the Fed and misconstrues its underlying purpose. The Federal Reserve is a wealth transferral device that serves financial interests at the expense of workers (see Howard S. Katz's book Paper Aristocracy for a detailed discussion of this point). The idea that a small amount of inflation will help workers but a large amount of inflation will hurt them is fallacious. A small amount of inflation will transfer a small amount of wealth from producers to investors and bankers, and a large amount of inflation will transfer a large amount of wealth from producers to investors and bankers. Greenspan inflated alot, and alot of wealth has been transferred. Warren Buffett, George Soros and the folks who have bought up Greenwich, Connecticut and the Dakotas have grown wealthy while the average worker has seen flat wages. That is what the Fed will do so long as it is permitted unrestrained freedom to inflate the money supply.
It is the Fed that needs to be regulated through a metallic standard. Any other system leads to abuse and wealth transferral from poor to rich. How many decades of this do progressive-liberals need before they accept that their idea has failed?
The Greenspan Fed has done what the Fed does in a big way. In the 1920s, the Hoover Fed reacted stupidly to the banking crisis of that era, and the depression resulted. In the post World War II period, the Fed has generated inflation, and the result has been flat real earnings since the mid 1970s and reduced innovation. As the federal government responds by transferring even more wealth from producers to Wall Street and commercial banks, such as respecting the Bear Stearns bailout, the public becomes poorer and the assets of multi-millionaires and billionaires are protected.
There is no other purpose of the Fed. The idea that the few percent reduction in unemployment that results from short term stimulus really is the Fed's purpose is naive.
King points out that in response to the technology stock bubble (which, I add, also resulted from the Greenspan Fed):
"The Fed, under the leadership of Dr. Greenspan, moved quickly to slash its bechmark Federal Funds Rate to 1%, the lowest level in nearly 50 years. At the time, Dr. Greenspan was acclaimed by economists for mitigating business cycle volatility and returning the economy back into a period of rapid growth. In hindsight, however, this period of easy money may have enabled the run-up in housing prices that caused the current housing crisis...This in turn resulted in a weak dollar..."
King adds that Greenspan failed to stop incompetent lending strategies by the financial community that had been authorized by the Home Ownership and Equity Protection Act of 1994. As well:
"the inability of the financial system to absorb the shock from the unexpectedly high default rate on subprime loans. This failure to anticipate can be traced back to 1998, if not earlier, when the Federal Reserve spearheaded a bailout of Long Term Capital Management (LTCM), a large hedge fund which lost nearly $5 Billion trading complex securities. Some would say that this created a moral hazard situation, whereby banks became comfortable taking larger risks because of the foreknowledge that they would be bailed out if their bets went sour."
King adds that Greenspan was indifferent to asset bubbles. All of this is accurate. Although this analysis is accurate, I am concerned that the prescription that results is more of the same policy pattern that caused this problem. Regulation created the Fed. The Fed caused the asset bubble because of inflation. American workers have seen decreased opportunities and flattening real incomes because of the Fed's inflation and because of regulation.
King's prescription is even more regulation. I disagree.
The problem with more regulation is that, as Enron demonstrated, regulation is an infinite regress. Unscrupulous actors (be they government officials or corporate executives) find ways around the regulation, and the regulator (if not corrupt, which they usually are) has to increase control. But increasing control terminates economic actors' freedom and flexibility. Freedom and flexibility are necessary to growth. Without the ability to respond to market change and to innovate, the economy stagnates. The end result is a controlled system that is like North Korea's or Cuba's at worst and Europe's at best. Stagnant growth is associated with innovation's being forestalled by regulators, corruption, exclusion of people of low socio-economic status from economic opportunity and declining living standards. Regulation solves nothing. It creates poverty.
Moreover, King accepts the explicit purpose or ideological rationale for the Fed and misconstrues its underlying purpose. The Federal Reserve is a wealth transferral device that serves financial interests at the expense of workers (see Howard S. Katz's book Paper Aristocracy for a detailed discussion of this point). The idea that a small amount of inflation will help workers but a large amount of inflation will hurt them is fallacious. A small amount of inflation will transfer a small amount of wealth from producers to investors and bankers, and a large amount of inflation will transfer a large amount of wealth from producers to investors and bankers. Greenspan inflated alot, and alot of wealth has been transferred. Warren Buffett, George Soros and the folks who have bought up Greenwich, Connecticut and the Dakotas have grown wealthy while the average worker has seen flat wages. That is what the Fed will do so long as it is permitted unrestrained freedom to inflate the money supply.
It is the Fed that needs to be regulated through a metallic standard. Any other system leads to abuse and wealth transferral from poor to rich. How many decades of this do progressive-liberals need before they accept that their idea has failed?
The Greenspan Fed has done what the Fed does in a big way. In the 1920s, the Hoover Fed reacted stupidly to the banking crisis of that era, and the depression resulted. In the post World War II period, the Fed has generated inflation, and the result has been flat real earnings since the mid 1970s and reduced innovation. As the federal government responds by transferring even more wealth from producers to Wall Street and commercial banks, such as respecting the Bear Stearns bailout, the public becomes poorer and the assets of multi-millionaires and billionaires are protected.
There is no other purpose of the Fed. The idea that the few percent reduction in unemployment that results from short term stimulus really is the Fed's purpose is naive.
King points out that in response to the technology stock bubble (which, I add, also resulted from the Greenspan Fed):
"The Fed, under the leadership of Dr. Greenspan, moved quickly to slash its bechmark Federal Funds Rate to 1%, the lowest level in nearly 50 years. At the time, Dr. Greenspan was acclaimed by economists for mitigating business cycle volatility and returning the economy back into a period of rapid growth. In hindsight, however, this period of easy money may have enabled the run-up in housing prices that caused the current housing crisis...This in turn resulted in a weak dollar..."
King adds that Greenspan failed to stop incompetent lending strategies by the financial community that had been authorized by the Home Ownership and Equity Protection Act of 1994. As well:
"the inability of the financial system to absorb the shock from the unexpectedly high default rate on subprime loans. This failure to anticipate can be traced back to 1998, if not earlier, when the Federal Reserve spearheaded a bailout of Long Term Capital Management (LTCM), a large hedge fund which lost nearly $5 Billion trading complex securities. Some would say that this created a moral hazard situation, whereby banks became comfortable taking larger risks because of the foreknowledge that they would be bailed out if their bets went sour."
King adds that Greenspan was indifferent to asset bubbles. All of this is accurate. Although this analysis is accurate, I am concerned that the prescription that results is more of the same policy pattern that caused this problem. Regulation created the Fed. The Fed caused the asset bubble because of inflation. American workers have seen decreased opportunities and flattening real incomes because of the Fed's inflation and because of regulation.
King's prescription is even more regulation. I disagree.
Wednesday, April 30, 2008
Ratio of Democrat to Republican Donors at Brooklyn College
Huffington Post lists political donors by employer. The information is publicly available on the World Wide Web. I am not breaching confidentiality by copying the data.
The folks at the American Association of University Professors keep claiming that there is no imbalance between Democrats and Republicans in universities. They claim that the professoriate represents a balanced range of views. That is of course absurd.
The top of the Huffington Brooklyn College list states:
$16,093 was given by people who identified their employer as "Brooklyn College".
$0 to Republicans
$16,093 from 25 people to Democrats
The summary states that it all went to Democrats. However, that is inaccurate, as there is one Republican donor on the list. Me. If you look down the list you will see that I gave $540 to John McCain. I am the only Republican donor on the list. With 25 on the list, the politically interested faculty appears to be 4% Republican and 96% Democratic.
Moreover, the amounts contributed to the Democratic Party are surprisingly large. For example, Professor Leo Zanderer donated $4,600 to Christopher Dodd. Professor Madelon Rand donated $1,950 to Hillary Clinton in the first quarter of 2008. Librarian Howard Spivak donated $1,000 to Hillary Clinton. Professor Barbara Winsolow gave $2,000 to Howard Dean.
My question, friends, is: why does the heading of the list say that there are no Republican donors at Brooklyn when it lists me as having given $540 to John McCain?
Brooklyn College Political Donations
Leo Zanderer Professor Brooklyn College Christopher Dodd $4,600
Madelon Rand English Instructor Brooklyn College Hillary Clinton $1,950
Howard Spivak Director, Academic Information,Brooklyn College Hillary Clinton $1,000
Gail Gurland Professor Brooklyn College Hillary Clinton $600
Mitchell Langbert ASSOCIATE PROFESSOR BROOKLYN COLLEGE John McCain $540
Philip Thibodeau Professor Brooklyn College Barack Obama $465
Ellen Wayne Professor Brooklyn College John Edwards $450
Renison Gonsalves Updated Q1/2008 Hillary Clinton $420
John Van Sickle Professor Q1/2008 Barack Obama $400
Donald M Levine Professor Brooklyn College Updated Q1/2008 Barack Obama $391
Lindley Hanlon Professor Brooklyn College Updated Q1/2008 Barack Obama $308
Michael Hipscher Teacher Brooklyn College Updated Q1/2008 John Edwards $300
Matthew Moore Professor Brooklyn College Updated Q1/2008 Barack Obama $300
Mac Wellman writer/professor Dennis Kucinich $300
Andrew Meyer Professor Brooklyn College Q1/2008 Barack Obama $272
Sonia Murrow College Professor Brooklyn College Q1/2008 Barack Obama $250
Barbara Winslow University professor Brooklyn College Howard Dean $2,000
Charlene Forest Professor Brooklyn College Updated Q1/2004 DNC $500
Joe Fodor writer Brooklyn College Updated Q1/2004 DNC $500
Ellen Wayne College Professor Brooklyn College Updated Q1/2004 DNC $450
Clement Mbom Professor Brooklyn College Updated Q1/2004 DNC $408
John Van Sickle Professor Brooklyn College Q1/2004 John Kerry $375
Kathleen Axen Professor Brooklyn College Updated Q1/2004 DNC $300
Matthew Moore Brooklyn College Updated Q1/2004 DNC $300
Peter Wayne College Professor Brooklyn College Updated Q1/2004 John Kerry $250
Len Fox college professor Brooklyn College Q1/2004 DNC $250
Todd Holden Professor of Physics Brooklyn College Updated Q1/2004 DNC $250
David Bloomfield Educator Brooklyn College Q1/2004 John Kerry $250
Roni Natov English Professor Brooklyn College Updated Q1/2004 DNC $250
Daniel Mufson Assistant Professor Brooklyn College Updated Q1/2004 Howard Dean $250
Steven Jervis Brooklyn College Updated Q1/2004 John Kerry $200
Corey Robin professor Brooklyn College Updated Q1/2004 Howard Dean $200
Charles Ayes Architect Brooklyn College Updated Q1/2004 John Kerry $200
Len Fox College Professor Brooklyn College Q1/2004 John Kerry $200
Frederick Gardiner Professor Brooklyn College Q1/2004 John Kerry $200
Mac Wellman Professor Brooklyn College Updated Q1/2004 Dennis Kucinich $200
Gary Giardina Physician Assistant Brooklyn College Updated Q1/2004 DNC $150
Daniel Mufson Assistant Professor Brooklyn College Updated Howard Dean $150
John Van Sickle Professor Brooklyn College Updated Q1/2004 Howard Dean $100
Allison Dean Professor Brooklyn College Updated Q1/2004 Howard Dean $60
The folks at the American Association of University Professors keep claiming that there is no imbalance between Democrats and Republicans in universities. They claim that the professoriate represents a balanced range of views. That is of course absurd.
The top of the Huffington Brooklyn College list states:
$16,093 was given by people who identified their employer as "Brooklyn College".
$0 to Republicans
$16,093 from 25 people to Democrats
The summary states that it all went to Democrats. However, that is inaccurate, as there is one Republican donor on the list. Me. If you look down the list you will see that I gave $540 to John McCain. I am the only Republican donor on the list. With 25 on the list, the politically interested faculty appears to be 4% Republican and 96% Democratic.
Moreover, the amounts contributed to the Democratic Party are surprisingly large. For example, Professor Leo Zanderer donated $4,600 to Christopher Dodd. Professor Madelon Rand donated $1,950 to Hillary Clinton in the first quarter of 2008. Librarian Howard Spivak donated $1,000 to Hillary Clinton. Professor Barbara Winsolow gave $2,000 to Howard Dean.
My question, friends, is: why does the heading of the list say that there are no Republican donors at Brooklyn when it lists me as having given $540 to John McCain?
Brooklyn College Political Donations
Leo Zanderer Professor Brooklyn College Christopher Dodd $4,600
Madelon Rand English Instructor Brooklyn College Hillary Clinton $1,950
Howard Spivak Director, Academic Information,Brooklyn College Hillary Clinton $1,000
Gail Gurland Professor Brooklyn College Hillary Clinton $600
Mitchell Langbert ASSOCIATE PROFESSOR BROOKLYN COLLEGE John McCain $540
Philip Thibodeau Professor Brooklyn College Barack Obama $465
Ellen Wayne Professor Brooklyn College John Edwards $450
Renison Gonsalves Updated Q1/2008 Hillary Clinton $420
John Van Sickle Professor Q1/2008 Barack Obama $400
Donald M Levine Professor Brooklyn College Updated Q1/2008 Barack Obama $391
Lindley Hanlon Professor Brooklyn College Updated Q1/2008 Barack Obama $308
Michael Hipscher Teacher Brooklyn College Updated Q1/2008 John Edwards $300
Matthew Moore Professor Brooklyn College Updated Q1/2008 Barack Obama $300
Mac Wellman writer/professor Dennis Kucinich $300
Andrew Meyer Professor Brooklyn College Q1/2008 Barack Obama $272
Sonia Murrow College Professor Brooklyn College Q1/2008 Barack Obama $250
Barbara Winslow University professor Brooklyn College Howard Dean $2,000
Charlene Forest Professor Brooklyn College Updated Q1/2004 DNC $500
Joe Fodor writer Brooklyn College Updated Q1/2004 DNC $500
Ellen Wayne College Professor Brooklyn College Updated Q1/2004 DNC $450
Clement Mbom Professor Brooklyn College Updated Q1/2004 DNC $408
John Van Sickle Professor Brooklyn College Q1/2004 John Kerry $375
Kathleen Axen Professor Brooklyn College Updated Q1/2004 DNC $300
Matthew Moore Brooklyn College Updated Q1/2004 DNC $300
Peter Wayne College Professor Brooklyn College Updated Q1/2004 John Kerry $250
Len Fox college professor Brooklyn College Q1/2004 DNC $250
Todd Holden Professor of Physics Brooklyn College Updated Q1/2004 DNC $250
David Bloomfield Educator Brooklyn College Q1/2004 John Kerry $250
Roni Natov English Professor Brooklyn College Updated Q1/2004 DNC $250
Daniel Mufson Assistant Professor Brooklyn College Updated Q1/2004 Howard Dean $250
Steven Jervis Brooklyn College Updated Q1/2004 John Kerry $200
Corey Robin professor Brooklyn College Updated Q1/2004 Howard Dean $200
Charles Ayes Architect Brooklyn College Updated Q1/2004 John Kerry $200
Len Fox College Professor Brooklyn College Q1/2004 John Kerry $200
Frederick Gardiner Professor Brooklyn College Q1/2004 John Kerry $200
Mac Wellman Professor Brooklyn College Updated Q1/2004 Dennis Kucinich $200
Gary Giardina Physician Assistant Brooklyn College Updated Q1/2004 DNC $150
Daniel Mufson Assistant Professor Brooklyn College Updated Howard Dean $150
John Van Sickle Professor Brooklyn College Updated Q1/2004 Howard Dean $100
Allison Dean Professor Brooklyn College Updated Q1/2004 Howard Dean $60
Progressive-Liberal Economists Murder Children
Economist Ben Bernanke
Weep and pray for children in nations with food shortages, who have been starved by the progressive-liberal Fed policies of the Greenspan and Bernanke Fed. For the past three decades progressive-liberal economists have advocated creation of money, that is, liquidity or credit, to stimulate real estate investment. This misallocation of resouces inhibited food production by transferring resources away from commodities production to construction.
Keynesian progressive-liberal economists have caused a global food shortage. Too little food being produced and the transfer of land to developers mean that agriculture cannot adjust to increasing demand. The Fed's actions, in response to the claims of Keynesian economists, are starving children. The economists are murderers because they have induced the world's banking community to engage in policies that have starved children. Now, their chief concern is that the starvation not impede Wall Street's profit picture.
Recently economist James Galbraith responded to my blog about his television appearance, claiming that higher interest rates would be a catastrophe. But the policies that the Fed has adopted, i.e., creation of money by lending it to hedge fund managers and commercial banks at public expense, has resulted in starvation around the world. Keynesians don't view the starvation that their policies have caused to be a catastrophe. Only a decline in Wall Street's profit picture is a catastrophe to them. Starving children is a detail of no economic consequence to their models.
Weep and pray for children in nations with food shortages, who have been starved by the progressive-liberal Fed policies of the Greenspan and Bernanke Fed. For the past three decades progressive-liberal economists have advocated creation of money, that is, liquidity or credit, to stimulate real estate investment. This misallocation of resouces inhibited food production by transferring resources away from commodities production to construction.
Keynesian progressive-liberal economists have caused a global food shortage. Too little food being produced and the transfer of land to developers mean that agriculture cannot adjust to increasing demand. The Fed's actions, in response to the claims of Keynesian economists, are starving children. The economists are murderers because they have induced the world's banking community to engage in policies that have starved children. Now, their chief concern is that the starvation not impede Wall Street's profit picture.
Recently economist James Galbraith responded to my blog about his television appearance, claiming that higher interest rates would be a catastrophe. But the policies that the Fed has adopted, i.e., creation of money by lending it to hedge fund managers and commercial banks at public expense, has resulted in starvation around the world. Keynesians don't view the starvation that their policies have caused to be a catastrophe. Only a decline in Wall Street's profit picture is a catastrophe to them. Starving children is a detail of no economic consequence to their models.
Woodrow Wilson's Constitutional Government in the United States
Woodrow Wilson. Constitutional Government in the United States. New Brunswick, NJ: Transaction Publishers, 2004. (Original published 1908). 236 pages.
Woodrow Wilson's Constitutional Government in the United States is a great treatise. Wilson had been a fine political science professor before becoming president of Princeton, governor of New Jersey and then president of the United States. Wilson was a Democrat, but he shared some views with the Mugwumps, the Republicans who supported Democratic candidate Grover Cleveland in 1884. Wilson closely read Walter Bagehot and he supported the gold standard in the late nineteenth century. In 1896 he bolted the Democratic Party to support the National Democratic candidate John Palmer. As a proponent of sound money, that year of William Jennings Bryan's "cross of gold speech" Wilson opposed Bryan's free silver candidacy. The National Democrats were libertarian in orientation and favored not only reduced tariffs and the gold standard, but limited government as well. The first year of his presidency Wilson established the income tax and the Federal Reserve Bank, but these laws were not so statist as they sound. Many Mugwumps (who were largely free market and pro-gold) supported the Federal Reserve Bank because they thought it would be better to have an expert agency regulating the currency than to have Congress creating greenbacks. The gold standard that was in place in 1913 and for nearly two decades thereafter limited the Fed's ability to expand the monetary base and create the kind of inflation that we have had since the 1930s and especially since Richard M. Nixon's presidency, which Wilson would have opposed. Likewise, the income tax was an unknown concept in 1913, and he could not have anticipated its extension. Until 1913 federal tax revenue was raised chiefly by tariffs, and Wilson repealed most of the tariffs in the same law that established the income tax. Moreover, the income tax applied to about one percent of the population in 1913. He could not have foreseen the degree to which subsequent administrations extended it.
Wilson had begun to identify himself as a "progressive" during his tenure as New Jersey governor, but his reforms were not especially interventionist or statist in nature. He introduced primary elections, which were an affront to the preexisting boss system. He also established a workers' compensation law, but workers' compensation is as much a realignment of common law liability principles as an employee benefit or regulatory program. His progressivism was conservative.
Wilson's writing is more articulate and subtle than Herbert Croly's or Theodore Roosevelt's, and his ideas are more refined and sophisticated than either's. In contrast to Roosevelt, who was a Republican predecessor to the New Deal Democrats, Wilson's ideas were informed by Burke as well as Bagehot. He not only believed in preserving existing institutions, but also retained a suspicion of big government as well as big business. He was a progressive in that he advocates, in Constitutional Government in the United States, a Darwinian as opposed to what he calls a Newtonian theory of government. That is, he believed that the federal government needed to be reformed to enable some changes. This idea may not have been wrong in principle but it was wrong, in my view, in terms of fundamental errors Wilson made in failing to anticipate the results of the reforms he made as president. However, subsequent generations of conservatives as well as progressive-liberals rely on Wilson's ideas about government. It would be better to throw out government altogether, but unless you've joined the Libertarian Party you probably owe a debt to Wilson's thinking.
Wilson's writing is somewhat flowery but it is eloquent and clear. The book can be read in one or two sittings yet it packs a considerable punch. It contains many beautiful theoretical insights about government. It is probably among the best of the Progressive works on government, and if any one work of the Progressive era might be said to shine a flattering light on the Progressive movement, this is it. The trouble, of course, is that the folks calling themselves "progressives" today are not Wilsonian progressives and have little if any interest in Bagehot, Burke or Wilson.
The United States is fortunate that Wilson and not Roosevelt won in 1912, although Wilson's best efforts were subsequently overturned by his fellow Democrat, Franklin D. Roosevelt, in the 1930s. It is evident that the roots of the Democratic Party's rejection of freedom begins with Roosevelt. The New Deal was an ahistorical response to exigencies and circumstances that occurred in the early 1930s and had absolutely nothing to do with Wilson's ideas. Wilson was not a predecessor of Franklin D. Roosevelt. The one president who can claim that title was Theodore Roosevelt, a Republican.
Wilson argues that there are four stages of evolution of government. In stage one government is the master of the people. In stage two government is no longer master by force but remains master because of superior sagacity. In stage three the leaders of the people confront mastery and agitate to control it. In stage four the people's leaders become the government. The American constitutional government is an example of stage four, but Wilson prefers the British parliamentary system to the American separation of powers, which he believes to be a more primitive model. Wilson admires Hamilton, whom he feels was more comfortable with giving government power than with the system of checks and balances which inhibits government action and leads to the party system, which in his view is associated with corruption and failure of democracy. The party system and bossism was necessitated by American constitutional government because the division of powers made it impossible for the different branches to coordinate their thinking without some integrative device. In management theory this idea is called differentiation and integration, and it was first articulated in the 1960s by Lawrence and Lorsch. Wilson noticed the differentiation and integration problem with respect to the federal government in the first decade of the twentieth century, fifty years before Lawrence and Lorsch.
Wilson believed that there are crucial regional and social differences among Americans that lead to the need for decentralization. He writes (p. 49-51):
"our state governments are likely to become, not less, but more vital units in our system as the natural scope and limits of their powers are more clearly and permanently established...
"...Not only are the separate and independent powers of the states based upon real economic and social differences between section and section of an enormous country, differences which necessitate adaptations of law and of administrative policy such as only local authorities acting in real independence can intelligently effect; but the states are our great and permanent contribution to constitutional development. I call them a great contribution because they have given to the understandings upon which constitutional government is based an intimacy and detail, an adjustment to local circumstances, a national diversity, an immediate adaptation to the variety of the people themselves, such as a little country may perhaps dispense with but a great continent cannot...They have been an incomparable means of sensitive adjustment between popular thought and governmental method, and may yet afford the world itself the model of federation and liberty it may be in God's providence come to work...
"Constitutional government can exist only where there is actual community of interest and of purpose, and cannot, if it be also self-government, express the life of any body of people that does not consititue a veritable community. Are the United States a community? In some things, yes; in most things, no. How impossible it is to generalize about the United States!"
In his discussion of the presidential branch of the American constitutional system, Wilson emphasizes the Darwinian nature of government. Our government was founded by Whigs who, in his view, followed a Newtonian model. Rather, he argues (p. 57), "living political consitutions must be Darwinian in structure and in practice". The nature of the presidency depends on the individual occupying it, in Wilson's view. Although the Whig model is Newtonian, it is elastic. The Whigs who wrote the constitution may have believed that the president was only a legal executive, executing policy and applying the law. Instead, Wilson argues, the president had become "the leader of his party and the guide of the nation in political purpose, and therefore in legal action." The president must embody "the character and purpose (the public) wishes it to have". The president may still function as an executive, but he was becoming "more and more a political and less and less an executive officer" (p. 67). He is the leader of his party. "No one else represents the people as a whole, exercising a national choice; and inasmuch his strictly executive duties are in fact subordinated, so far at any rate as all detail is concerned, the President represents not so much the party's governing efficiency as its controlling ideals and principles" (p. 68).
The chapters on the House of Representatives, the Senate and the Supreme Court are all insightful and brilliant. He argues for an evolutionary view of the Court's role (p. 158-68):
"Expanded and adapted by interpretation the powers granted in the Constitution must be; but the manner and the motive of their expansion involve the integrity, and therefore, the performance, of our entire system of government...if they had interpreted the Constitution in its strict letter, as some proposed, and not in its spirit, like the charter of a business corporation and not like the charter of a living government, the vehicle of a nation's life, it would have proved a strait- jacket, a means not of liberty and development but of mere restriction and embarrassment. I have spoken of the statesmanship of control expected of our courts; but there is also the statesmanship of adaptation characteristic of all great systems of law since the days of the Roman praetor; and there can be no doubt that we have been singular among the nations in looking to the courts for that double function of statesmanship, for the means of growth as well as for the restraint of ordered method."
For me, a professor of management, the most intriguing chapter is the penultimate one on "the states and the federal government". Wilson writes that (p. 173):
"It is clear enough that the general commercial interests, the general financial interests, the general economic interests of the country were meant to be brought under the regulation of the federal government, which should act for all; and it is equally clear that what are the general commercial interests, what the general financial interests, what the general economic interests of the country is a question of fact, to be determined by circumstances which change under our very eyes, and that, case by case, we are inevitably drawn on to include under the established definitions of the law matters new and unforeseen, which seem in their magnitude to give to the powers of Congress a sweep and vigor certainly never conceived possible by earlier generations of statesmen, sometimes even almost revolutionary even in our own eyes...
"Almost every great internal crisis in our affairs has turned upon the question of state and federal rights. To take but two instances, it was the central subject-matter of the great controversy over tariff legislation which led to attempted nullification and of the still greater controversy over the extension of slavery which led to the war between the States...
"The principle of the division of powers between state and federal governments is a very simple one when stated in its most general terms. It is that the legislatures of the States shall have control of all the general subject-matter of law, of private rights of every kind, of local interests and of everything that directly concerns their people as communities, and that Congress shall have control only of such matters as concern the peace and commerce of the country as a whole." (p. 175)
"Which parts of the many sided processes of the nation's economic development shall be left to the regulation of the States, which parts shall be given over to the federal government? I do not propound this as a mere question of choice, a mere question of statesmanship, but also as a question, a very fundamental question, of constitutional law...
"...The war between the States established at least this principle, that the federal government is, through its courts, the final judge of its own power...Its power is to 'regulate commerce between the States,' and the attempts now made during every session of Congress to carry the implications of that power beyond the utmost boundaries of reasonable and honest inference show that the only limits likely to be observed by politicians are those set by the good sense and conservative temper of the country...
"The proposed federal legislation with regard to the regulation of child labor affords a striking example. If the power to regulate commerce between the States can be stretched to include the regulation o flabor in mills and factories, it can be made to embrace every particular of the industrial organization and action of the country. The only limitations Congress would observe, should the Supreme Court assent to such obviously absurd extravagances of interpretation, would be the limitations of opinion and circumstance...
"...Uniform regulation of the economic conditions of a vast territory and a various people like the United States would be mischievous if not impossible. The statesmanship which really attempts it is premature and unwise. Undoubtedly the recent economic development of the country, particularly the development of the last two decades, has obliterated many boundaries, made many interests national and common, which until our own day were separate and local....
"The United States are not a single, homogeneous community. In spite of a certain superficial sameness which seems to impart to Americans a common type and point of view, they still contain communities at almost every stage of development, illustrating in their social and economic structure almost every modern variety of interest and prejudice, following occupations of every kind, in climates of every sort that the temperate zone affords. This variety of fact and condition, these substantial economic and social contrasts, do not in all cases follow state lines. They are often contrasts between region and region rather than between State and State...
(p. 182)"We are too apt to think that our American political system is distinguished by its central structure, by its President and Congress and courts, which the Constitution of the Union set up. As a matter of fact, it is distinguished by its local structure, by the extreme vitality of its parts. It would be an impossibility without its division of powers...America...has come to maturity by the stimulation of no central force or guidance, but by an abounding self-helping, self-sufficing energy in its parts, which severally brought themselves into existence and added themselves to the Union...Communities develop not by external but by internal forces. Else they do not live at all. Our commonwealths have not come into existence by invitation, like plants in a tended garden; they have sprung up of themselves, irrepressible, a sturdy, spontaneous product of the nature of men nurturing in free air.
"It is this spontaneity and variety, this independent and irrepressible life of its communities, that has given our system its extraordinary elasticity...The distribution of the chief powers of government among the States is the localization and specialization of Constitutional understandings; and this elastic adaptation of constitutional processes to the various and changing conditions of a new country and a vast area has been the real cause of our political success.
(p. 186)"No two states act alike. Manufacturers and carriers who serve commerce in many States find it impossible to obey the laws of all, and teh enforcement of the laws of the States
As I have previously blogged, what intrigues me most about Wilson is his emphasis on the potential for states' rights as a biological evolution out of what in his view was the mechanistic federal system. Sadly, his ideas were ignored by the subsequent Republican administrations, which were conservative (i.e., Harding and Coolidge) and conservative-progressive (Hoover). Roosevelt's reforms made government too rigid to adopt Wilsonian progressivism with respect to decentralization. Subsequently, conflicts concerning civil rights made it impossible and inappropriate to give weight to his ideas (as my friend Norma Segal has pointed out, Wilson's upbringing was very much pro-Confederacy and Wilson stands accused of racism (see Jonah Goldberg's article in the Christian Science Monitor.
Wilson's emphasis on the importance of evolution of government puts him in the same category as the other progressives, but today's conservatives have largely adopted the progressivism that Wilson pioneered. The ideological differences between Taft and Wilson versus today's "conservatives" are non-existent. Wilson had at least the familiarly with Burke as any conservative of today and was enamored of Burke. He repeats Burkean ideas throughout this book. Today's conservatives are progressives, not conservatives in the 19th century sense. Today's libertarians are much closer to that. For instance, today's conservatives have adopted a Keynesian monetary stance. No 19th century conservative, including Wilson, would have supported abolition of the gold standard. Keynesian economic ideas, which were advocated throughout the 19th century, were crackpot to 19th century conservatives. Today's conservatives have backed Keynesian presidents since Richard M. Nixon in 1971. This is not progress. It is stupidity.
Wilson's emphasis on state's rights has important implications for today's political milieu. We have forgotten his insights and Wilson scholars do not emphasize them. But similar kinds of ideas are well known in the management field
Woodrow Wilson's Constitutional Government in the United States is a great treatise. Wilson had been a fine political science professor before becoming president of Princeton, governor of New Jersey and then president of the United States. Wilson was a Democrat, but he shared some views with the Mugwumps, the Republicans who supported Democratic candidate Grover Cleveland in 1884. Wilson closely read Walter Bagehot and he supported the gold standard in the late nineteenth century. In 1896 he bolted the Democratic Party to support the National Democratic candidate John Palmer. As a proponent of sound money, that year of William Jennings Bryan's "cross of gold speech" Wilson opposed Bryan's free silver candidacy. The National Democrats were libertarian in orientation and favored not only reduced tariffs and the gold standard, but limited government as well. The first year of his presidency Wilson established the income tax and the Federal Reserve Bank, but these laws were not so statist as they sound. Many Mugwumps (who were largely free market and pro-gold) supported the Federal Reserve Bank because they thought it would be better to have an expert agency regulating the currency than to have Congress creating greenbacks. The gold standard that was in place in 1913 and for nearly two decades thereafter limited the Fed's ability to expand the monetary base and create the kind of inflation that we have had since the 1930s and especially since Richard M. Nixon's presidency, which Wilson would have opposed. Likewise, the income tax was an unknown concept in 1913, and he could not have anticipated its extension. Until 1913 federal tax revenue was raised chiefly by tariffs, and Wilson repealed most of the tariffs in the same law that established the income tax. Moreover, the income tax applied to about one percent of the population in 1913. He could not have foreseen the degree to which subsequent administrations extended it.
Wilson had begun to identify himself as a "progressive" during his tenure as New Jersey governor, but his reforms were not especially interventionist or statist in nature. He introduced primary elections, which were an affront to the preexisting boss system. He also established a workers' compensation law, but workers' compensation is as much a realignment of common law liability principles as an employee benefit or regulatory program. His progressivism was conservative.
Wilson's writing is more articulate and subtle than Herbert Croly's or Theodore Roosevelt's, and his ideas are more refined and sophisticated than either's. In contrast to Roosevelt, who was a Republican predecessor to the New Deal Democrats, Wilson's ideas were informed by Burke as well as Bagehot. He not only believed in preserving existing institutions, but also retained a suspicion of big government as well as big business. He was a progressive in that he advocates, in Constitutional Government in the United States, a Darwinian as opposed to what he calls a Newtonian theory of government. That is, he believed that the federal government needed to be reformed to enable some changes. This idea may not have been wrong in principle but it was wrong, in my view, in terms of fundamental errors Wilson made in failing to anticipate the results of the reforms he made as president. However, subsequent generations of conservatives as well as progressive-liberals rely on Wilson's ideas about government. It would be better to throw out government altogether, but unless you've joined the Libertarian Party you probably owe a debt to Wilson's thinking.
Wilson's writing is somewhat flowery but it is eloquent and clear. The book can be read in one or two sittings yet it packs a considerable punch. It contains many beautiful theoretical insights about government. It is probably among the best of the Progressive works on government, and if any one work of the Progressive era might be said to shine a flattering light on the Progressive movement, this is it. The trouble, of course, is that the folks calling themselves "progressives" today are not Wilsonian progressives and have little if any interest in Bagehot, Burke or Wilson.
The United States is fortunate that Wilson and not Roosevelt won in 1912, although Wilson's best efforts were subsequently overturned by his fellow Democrat, Franklin D. Roosevelt, in the 1930s. It is evident that the roots of the Democratic Party's rejection of freedom begins with Roosevelt. The New Deal was an ahistorical response to exigencies and circumstances that occurred in the early 1930s and had absolutely nothing to do with Wilson's ideas. Wilson was not a predecessor of Franklin D. Roosevelt. The one president who can claim that title was Theodore Roosevelt, a Republican.
Wilson argues that there are four stages of evolution of government. In stage one government is the master of the people. In stage two government is no longer master by force but remains master because of superior sagacity. In stage three the leaders of the people confront mastery and agitate to control it. In stage four the people's leaders become the government. The American constitutional government is an example of stage four, but Wilson prefers the British parliamentary system to the American separation of powers, which he believes to be a more primitive model. Wilson admires Hamilton, whom he feels was more comfortable with giving government power than with the system of checks and balances which inhibits government action and leads to the party system, which in his view is associated with corruption and failure of democracy. The party system and bossism was necessitated by American constitutional government because the division of powers made it impossible for the different branches to coordinate their thinking without some integrative device. In management theory this idea is called differentiation and integration, and it was first articulated in the 1960s by Lawrence and Lorsch. Wilson noticed the differentiation and integration problem with respect to the federal government in the first decade of the twentieth century, fifty years before Lawrence and Lorsch.
Wilson believed that there are crucial regional and social differences among Americans that lead to the need for decentralization. He writes (p. 49-51):
"our state governments are likely to become, not less, but more vital units in our system as the natural scope and limits of their powers are more clearly and permanently established...
"...Not only are the separate and independent powers of the states based upon real economic and social differences between section and section of an enormous country, differences which necessitate adaptations of law and of administrative policy such as only local authorities acting in real independence can intelligently effect; but the states are our great and permanent contribution to constitutional development. I call them a great contribution because they have given to the understandings upon which constitutional government is based an intimacy and detail, an adjustment to local circumstances, a national diversity, an immediate adaptation to the variety of the people themselves, such as a little country may perhaps dispense with but a great continent cannot...They have been an incomparable means of sensitive adjustment between popular thought and governmental method, and may yet afford the world itself the model of federation and liberty it may be in God's providence come to work...
"Constitutional government can exist only where there is actual community of interest and of purpose, and cannot, if it be also self-government, express the life of any body of people that does not consititue a veritable community. Are the United States a community? In some things, yes; in most things, no. How impossible it is to generalize about the United States!"
In his discussion of the presidential branch of the American constitutional system, Wilson emphasizes the Darwinian nature of government. Our government was founded by Whigs who, in his view, followed a Newtonian model. Rather, he argues (p. 57), "living political consitutions must be Darwinian in structure and in practice". The nature of the presidency depends on the individual occupying it, in Wilson's view. Although the Whig model is Newtonian, it is elastic. The Whigs who wrote the constitution may have believed that the president was only a legal executive, executing policy and applying the law. Instead, Wilson argues, the president had become "the leader of his party and the guide of the nation in political purpose, and therefore in legal action." The president must embody "the character and purpose (the public) wishes it to have". The president may still function as an executive, but he was becoming "more and more a political and less and less an executive officer" (p. 67). He is the leader of his party. "No one else represents the people as a whole, exercising a national choice; and inasmuch his strictly executive duties are in fact subordinated, so far at any rate as all detail is concerned, the President represents not so much the party's governing efficiency as its controlling ideals and principles" (p. 68).
The chapters on the House of Representatives, the Senate and the Supreme Court are all insightful and brilliant. He argues for an evolutionary view of the Court's role (p. 158-68):
"Expanded and adapted by interpretation the powers granted in the Constitution must be; but the manner and the motive of their expansion involve the integrity, and therefore, the performance, of our entire system of government...if they had interpreted the Constitution in its strict letter, as some proposed, and not in its spirit, like the charter of a business corporation and not like the charter of a living government, the vehicle of a nation's life, it would have proved a strait- jacket, a means not of liberty and development but of mere restriction and embarrassment. I have spoken of the statesmanship of control expected of our courts; but there is also the statesmanship of adaptation characteristic of all great systems of law since the days of the Roman praetor; and there can be no doubt that we have been singular among the nations in looking to the courts for that double function of statesmanship, for the means of growth as well as for the restraint of ordered method."
For me, a professor of management, the most intriguing chapter is the penultimate one on "the states and the federal government". Wilson writes that (p. 173):
"It is clear enough that the general commercial interests, the general financial interests, the general economic interests of the country were meant to be brought under the regulation of the federal government, which should act for all; and it is equally clear that what are the general commercial interests, what the general financial interests, what the general economic interests of the country is a question of fact, to be determined by circumstances which change under our very eyes, and that, case by case, we are inevitably drawn on to include under the established definitions of the law matters new and unforeseen, which seem in their magnitude to give to the powers of Congress a sweep and vigor certainly never conceived possible by earlier generations of statesmen, sometimes even almost revolutionary even in our own eyes...
"Almost every great internal crisis in our affairs has turned upon the question of state and federal rights. To take but two instances, it was the central subject-matter of the great controversy over tariff legislation which led to attempted nullification and of the still greater controversy over the extension of slavery which led to the war between the States...
"The principle of the division of powers between state and federal governments is a very simple one when stated in its most general terms. It is that the legislatures of the States shall have control of all the general subject-matter of law, of private rights of every kind, of local interests and of everything that directly concerns their people as communities, and that Congress shall have control only of such matters as concern the peace and commerce of the country as a whole." (p. 175)
"Which parts of the many sided processes of the nation's economic development shall be left to the regulation of the States, which parts shall be given over to the federal government? I do not propound this as a mere question of choice, a mere question of statesmanship, but also as a question, a very fundamental question, of constitutional law...
"...The war between the States established at least this principle, that the federal government is, through its courts, the final judge of its own power...Its power is to 'regulate commerce between the States,' and the attempts now made during every session of Congress to carry the implications of that power beyond the utmost boundaries of reasonable and honest inference show that the only limits likely to be observed by politicians are those set by the good sense and conservative temper of the country...
"The proposed federal legislation with regard to the regulation of child labor affords a striking example. If the power to regulate commerce between the States can be stretched to include the regulation o flabor in mills and factories, it can be made to embrace every particular of the industrial organization and action of the country. The only limitations Congress would observe, should the Supreme Court assent to such obviously absurd extravagances of interpretation, would be the limitations of opinion and circumstance...
"...Uniform regulation of the economic conditions of a vast territory and a various people like the United States would be mischievous if not impossible. The statesmanship which really attempts it is premature and unwise. Undoubtedly the recent economic development of the country, particularly the development of the last two decades, has obliterated many boundaries, made many interests national and common, which until our own day were separate and local....
"The United States are not a single, homogeneous community. In spite of a certain superficial sameness which seems to impart to Americans a common type and point of view, they still contain communities at almost every stage of development, illustrating in their social and economic structure almost every modern variety of interest and prejudice, following occupations of every kind, in climates of every sort that the temperate zone affords. This variety of fact and condition, these substantial economic and social contrasts, do not in all cases follow state lines. They are often contrasts between region and region rather than between State and State...
(p. 182)"We are too apt to think that our American political system is distinguished by its central structure, by its President and Congress and courts, which the Constitution of the Union set up. As a matter of fact, it is distinguished by its local structure, by the extreme vitality of its parts. It would be an impossibility without its division of powers...America...has come to maturity by the stimulation of no central force or guidance, but by an abounding self-helping, self-sufficing energy in its parts, which severally brought themselves into existence and added themselves to the Union...Communities develop not by external but by internal forces. Else they do not live at all. Our commonwealths have not come into existence by invitation, like plants in a tended garden; they have sprung up of themselves, irrepressible, a sturdy, spontaneous product of the nature of men nurturing in free air.
"It is this spontaneity and variety, this independent and irrepressible life of its communities, that has given our system its extraordinary elasticity...The distribution of the chief powers of government among the States is the localization and specialization of Constitutional understandings; and this elastic adaptation of constitutional processes to the various and changing conditions of a new country and a vast area has been the real cause of our political success.
(p. 186)"No two states act alike. Manufacturers and carriers who serve commerce in many States find it impossible to obey the laws of all, and teh enforcement of the laws of the States
As I have previously blogged, what intrigues me most about Wilson is his emphasis on the potential for states' rights as a biological evolution out of what in his view was the mechanistic federal system. Sadly, his ideas were ignored by the subsequent Republican administrations, which were conservative (i.e., Harding and Coolidge) and conservative-progressive (Hoover). Roosevelt's reforms made government too rigid to adopt Wilsonian progressivism with respect to decentralization. Subsequently, conflicts concerning civil rights made it impossible and inappropriate to give weight to his ideas (as my friend Norma Segal has pointed out, Wilson's upbringing was very much pro-Confederacy and Wilson stands accused of racism (see Jonah Goldberg's article in the Christian Science Monitor.
Wilson's emphasis on the importance of evolution of government puts him in the same category as the other progressives, but today's conservatives have largely adopted the progressivism that Wilson pioneered. The ideological differences between Taft and Wilson versus today's "conservatives" are non-existent. Wilson had at least the familiarly with Burke as any conservative of today and was enamored of Burke. He repeats Burkean ideas throughout this book. Today's conservatives are progressives, not conservatives in the 19th century sense. Today's libertarians are much closer to that. For instance, today's conservatives have adopted a Keynesian monetary stance. No 19th century conservative, including Wilson, would have supported abolition of the gold standard. Keynesian economic ideas, which were advocated throughout the 19th century, were crackpot to 19th century conservatives. Today's conservatives have backed Keynesian presidents since Richard M. Nixon in 1971. This is not progress. It is stupidity.
Wilson's emphasis on state's rights has important implications for today's political milieu. We have forgotten his insights and Wilson scholars do not emphasize them. But similar kinds of ideas are well known in the management field
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