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NOVEMBER  2017
The Rise of the Billionaires Leaves the Middle Class Stranded

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Friday, December 10, 2010

INTO THE WOODS

I would call Jimmy Kennedy a lyrical genius. Thank God he turned down a job offer from the English Foreign Service in Nigeria, otherwise we would have been cheated out of such evocative lyrics as, “South of the bor-der, down Mexico way. That’s where I fell in love when the stars came out to play. And now as I wander, my thoughts ever stray, south of the bor-der, down Mexico way”. Jimmy wrote that, in classic Tin Pan Alley fashion, after seeing a post card of Tijuana.
Jimmy was an Irishman, and so English was a second language to him: which may help explain his lyrics for... “Every gal in Cons-tan-tinople, lives in Istanbul not Con-stan-tinople. So if you've got a date in Cons-tan-tinople, she'll be waiting in Istanbul.” (The name was officially changed in 1930, at the behest of the Turkish Post Office.)
But my favorite Jimmy Kennedy lyric remains the vaguely ominous drumbeat of... “If you go down to the woods today you’re sure of a big surprise. If you go down to the woods today you better go in disguise. For every bear that ever there was will gather there for certain because, today’s the day the teddy bears have their pi-cnic.”
I have a long held the image of the “Teddy Bears Picnic” being sung by that looming giant of economists, John Maynard Keynes. Can’t you just hear him croaking in his perfectly correct Eton English? “If you go down to the woods today you better not go alone. It’s lovely down in the woods today, but safer to stay at home.” I can.
And by woods, I mean "Bretton Woods", the New England ski resort invaded in June-July of 1944 by 730 of the best economic brains in the world, of which Mr. Keynes was the very best. The American economists were the bears and they were there to picnic upon the corpse of the British Empire, and John Maynard Keynes had the unenviable (for an Englishman) assignment to act as the America's maƮtre d'.
Would you like to know what kind of an economist Keynes was? He was married to a ballarina (above), that's what kind of an economist he was. He was attracted to drama, which was unusuaul for a student of "the dismal science" of economics.
Amongst the things settled at Bretton Woods was how to structure the world’s economy after World War II. It was clear to everyone that the lead would have to be taken by the United States, because we were the only nation that ended the war with more gold than we had started with. It’s the golden rule; he who has the gold makes the rules. But it just seemed less tacky that the idea would be put forward by a Brit rather than by an American.
So the Bretton Woods accords, presided over by Keynes, tied all of the world’s monetary systems (the pound, the franc, the yen) to the American dollar, because each and every ounce of gold in America’s vaults was officially represented by 35 dollars . And nobody else in the world could make that claim in post WWII. But all things change over time, and eventually we Americans were feeling so rich and all powerful that we tried to pay for our “Great Society” and our Vietnam War both at the same time, and both without raising taxes. You know what? You can’t do that, no matter how many voters may want to believe that you can, you can’t.
Newly elected President Richard Nixon tried to close the budget deficit Johnson created by shutting down many of the anti-poverty programs started by the Democrats. But those programs were far too small a fraction of the Federal budget to stop the bleeding of dollars. A Massachusetts Institute of Technology study done in 1971 calculated the real cost of the Vietnam War (in 1971 dollars) was about $750 billion, equal to the first Wall Street bailout thirty-five years later which caused all fiscal conservatives to flinch.(“Vietnam; Past and Present” by D.R. SarDeasai).
The pressure by 1970 was for Nixon to increase taxes to pay for the war. But that would have made the war even more unpopular than it already was. Nixon didn't yet have a way to meet his pledge of ending the war “with honor”, so he continued the war, and he did not raise taxes. Instead he borrowed to pay for the war. Businesses couldn’t expand because the government had sucked up all the credit. Wages were stuck while prices inflated. And, as I recall, that was when hamburger jumped from 35 cents a pound to something closer to a $1.25 a pound. It is was an untenable situation. But “Tricky Dick” eventually found a way to make it "tenable".
Nixon took America off the gold standard. In the stroke of a pen the dollar was no longer backed by gold. That’s when the treasury stopped issuing real dollars and started issuing “silver certificates” - read your dollar sometime. With out the limit of gold reserves on the treasury we could afford any war we wanted, and all the oil we wanted. Economists call the economy Nixon placed us on a “Floating Currency” but I call it the “Trust Economy”. There is no longer any gold behind your dollar, and, really, there is no silver, either. You trust that your dollar will provide you with goods and services of value. But trust depends upon the bankers and the investors and the politicians being worthy of that trust.
I don’t blame Nixon for our economic mess. Politicians are not hired to create perfect systems, just systems that function for the time being. But what the sub-prime mortgage fiasco has proven, and the dot-com bubble proved before that, and the Savings & Loan debacle proved before that, is that without regulation there can be no trust. To quote Ronald Regan; “Trust and verify.” And to quote French President Sarkozy, “We must rethink the financial system from scratch, as at Bretton Woods”. And this time we (the United States) ain’t got the gold, so we ain’t making the rules. Those days are past.
Or as Jimmy Kennedy put it, “No, you can't go back to Con-stan-tinople, been a long time gone, Con-stan-tinople, Why did Con-tan-tinople get the works? That’s nobody's business but the Turks.” Words of wisdom to ponder as we enter the woods again.
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Wednesday, December 08, 2010

BLIND LOVE

I am certain William Johnson believed he was dying in the name of love. And the object of his passion, Mrs. Jane Housden, may have believed the same thing. The official record tells us merely that this anti-Romeo and Juliet were charged with the murder of an innocent man in front of several hundred witnesses – they being witness, jailers, lawyers and judges. Murder in a open court is such an irrational act that you don’t see it very often. So when you do, it inspires contemplation, which follows.
The year was 1714, and the place was London. To describe life in this age as brutal and short is accurate, but a bit misleading. Average life expectancy was under 40 years of age, but that was because 12% of all children died before their first birthday. If you made it to thirty years of age in 1714 you could expect to live to sixty, unless you lived in Newport Market section of London, where the overcrowding and lack of sanitation almost seemed to guarantee you would still be dead by forty. But if you made it to sixty, even in Newport Market, you could expect to live till you were 72. There just weren’t very many who made it that far.
William Johnson (aka William Holloway) had been born in Newport Market (above). He was apprenticed as butcher, and then became a surgeon’s assistant. By 33 he fell into the profession of footpath, a thief who waylaid fellow pedestrians at gunpoint and robbed them. William was suspected of much more. He was known to have badly beaten several of his victims, and was suspected in at least two murders. But William also had the ambition to be a highwayman. And, alas, William fell victim to his ambitions.
 Early in 1710 he stole a bay gelding, the property of Mr. Evelyn Pierrpoint, a member of the peerage and a leader in the House of Lords. Pierpont was very popular in upper crust social circles, and closely tied to the crown. Being thus connected, the outrage against him was investigated with zeal, and it was not long before William was incarcerated for the theft.
It was not unusual for convicted thieves to be condemned to death, and on June 4, 1711, in the Old Bailey Courthouse, William was so convicted. But because he pleaded guilty his sentence was commuted to transportation to America. Five weeks later, while William was confined in the pestilent Newgate prison (above) awaiting shipment, he escaped. It was a singular achievement and was it may have been this further insult to the honor of the upper crust that resulted in the arrest of William’s own lady love, Jane Housden, charged with her third “coining” offense.
At the other end of the criminal hierarchy from highwaymen were clippers. In a world without paper currency, every coin was literally worth its weight in silver. In England the basic unit of currency was the “Pound Sterling”, which was minted from 16 ounces of real silver. This meant that merchants could short change their customers with the simple application of a file. Many “honest” shopkeepers rented out their cash boxes overnight to clippers, and many a shop’s customers found their change shaved of 2 or 3% of its face value, thus inspiring the descriptive phrase, “a clip joint” as a shop where you were cheated. This was the reason coins came with a date stamped on them. The longer a coin was in circulation the less reliable was its face value.
In the 1690’s the English Secretary to the Treasury, Mr. William Lowndes, wrote “it is a thing so easy…even women and children…are capable of the act.” The act was filing off silver from a coin, melting the filings and pouring them into a counterfeit mold. It was not uncommon for a raiding constable to discover “a woman sitting beside the fire finishing a pile of counterfeits with a knife and file, while her husband occupied himself with hot flasks and other coining tools.” It was estimated at the time that a pair of crooks …could produce twenty-five pounds of silver filings in a day - and this when a family could live quite comfortably on fifty Pounds a year.
Mrs. Jane Housden (aka Jane Newsted) had been arrested in 1701 for “coining”, and given a pardon. She was arrested again on September 9th, 1710, and pardoned again on June 6th. But officials then had warned that if she were arrested a third time for the same offense, there would be no pardon; which made it so serious when Jane was arrested once again on August 13th, 1714. I suspect that this time Jane’s arrest was part of a trap. From informers the authorities knew that Jane had often alerted William to wealthy travelers. (about 20% of all women in London worked at least part time as prostitutes.)  And they knew that Jane was William’s mistress. A warrant had been prepared in advance for William’s arrest, signed by Lord Chief Justice Parker, himself, just in case William should appear at Jane's trial.
The date was Wednesday, September 10th, 1714. Driven by passion William slipped into the central court room at the Old Bailey with two loaded pistols in his coat pocket. He waited by “Door at the hole”, where under guard, visitor were allowed to pass food, drink and money to prisoners waiting in the docket. He managed but a few whispered words with his Jane before a constable and a turnkey placed him under arrest.
The instant they attempted to clap him in handcuffs, William drew a pistol. The turnkey leapt upon him, knocking the gun from his hand. Both men tumbled to the floor, the turnkey knocked silly. Jane seized the weapon, but another constable knocked her to the ground. Enraged, William fought to his feet, and leveled the second weapon. The constable jerked William’s arm up and drove a shoulder into his waist, as the head turnkey, Richard Spurling, raced forward to help. In the struggle, the gun went off, firing over the Constable’s head, but striking Mr. Spurling in the chest, killing him instantly.
The judges, shocked at the interruption, decided there was no point in continuing Jane’s trial for coining, and immediately tried her and William for the murder of poor Mr. Spurling, A jury made up of witnesses to the murder was impaneled. The case was argued by other witnesses to the murder. The verdict was guilty for both defendants, delivered by even more wittnesses to the murder. The punishment was set by yet a third group of witnesses to the murder, as death -  all while the corpus delicti was still warm. It had been a singular day in the Old Baily.
This time there was no pardon and no escape. At 9:00 on the morning of September 19th, 1714, William and Jane were loaded into a cart along with their hangman and the prison chaplain. Lead by constables and followed by a squad of soldiers, the sad procession passed through Holborn Street, St. Giles Road, to Tyburn Road (now Oxford Street), with several stops along the way at pubs where the condemned were encouraged to imbibe. Finally they reached the traditional site of execution, where a large crowd waited, at a spot where there once had stood a tree.
As the old poem went, “I have heard sundry men oft times dispute, Of trees, that in one year will twice bear fruit. But if a man note Tyburn, 'will appear, That there’s a tree that bears twelve times a year.” And there, from a rude gibbet, a rough wooden beam, William and Jane, hopefully blind drunk, danced together at the end of their ropes. The prison chaplain read Pslam 51 3; “For I acknowledge my transgressions: and my sin is ever before me.” There was very little comfort in that passage, but then comfort was not the point.
The sin, in this particular case, was that William Holloway had murdered a man in open court, in front of witnesses, and Jane Housden had been foolish enough to love him. They were both sins that were to be repeated untold times over the next 300 years, and probably for another 300 after this.
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Sunday, December 05, 2010

1920 - THE YEAR WITHOUT A REVOLUTION

I don't believe that Ed Barrow (above) was capable of playing the idiot. Now that the 1920 baseball season was over, the Boston manager made it clear to Red Sox owner Harry Frazee that he wanted out. Frazee, who may have been a fool, was not a mean man. He agreed to give Barrow his freedom, knowing that New York would snatch him up. And on October 29, 1920 Ed Barrow became the General Manager for the New York Yankees.
"Cousin Ed" as Barrow was called, now spent nearly half a million dollars of Col Rupperts beer money buying up every player of talent still on the Red Sox roster, dismatling the Boston team, while building around Babe Ruth a dynasty that would dominate baseball for the next twenty years, winning 14 pennants and 10 World Series, before Barrow retired in 1945. Over that same period Boston did nothing but disappoint.
The American election of 1920 was the most disappointing one of the 20th century. It was women’s first opportunity to add their voices to the political life of the country, and led to the conclusion that they could not sing. In Boston, women eligible to vote even outnumbered eligible men by 10,000. Still, the actual turnout favored men by 18%. And like the men, the women overwhelmingly voted for Warren G. Harding ( above, shaking hands with Ruth) -
 - and his running mate Massachusetts governor Calvin Coolidge (above), even though, in the inimitable words of Alice Roosevelt Longworth, Coolidge looked “as though he'd been weaned on a pickle.”
Harding and Coolidge (red counties) won 60% of the popular vote, and 404 electoral votes. Mr. Cox and his running mate, pre-polio Franklyn Roosevelt (blue counties), won 34% of the popular vote and only 127 electoral votes. Eugene Debs, a labor leader running on the Socialist ticket, won 3% of all votes, and Parley Parker Christianson representing the Farmer-Labor party represented another 1% of the American electorate. The remaining 1% of voters split their support between James Ferguson of the American Party, William Wesely Cox, of the Socialist Labor Party, and Robert MaCauley, representing the Single Tax Party. And, strangest of all, there was Aaron Watkins of Indiana, running for President on the Prohibition Party ticket, in this the first year of national prohibition.
Harding and Coolidge won the Bay State by 40 points, 681,000 Republican votes to 277,000 Democratic votes. Massachusetts merely mirrored the nation. The Harding landslide was the biggest in American history until 1984 when Ronald Reagan took every state in the union, except Massachusetts. But given that success, in the election of 1920, given the hopes of feminists and the subsequent Harding scandals, the reality of suferage remained disappointing.
In a way, it should have been anticipated, given the way women won the right to vote. The entire struggle for women’s rights had come down, by happenstance, to a 24 year old Tennessee State Representative. And Harry Burn, who had a long record of voting against suffrage, had finally decided to vote for the 19th Amendment to the constitution because his mother told him to. That made Tennessee the 36th state to ratify. But in Boston, which had never been cordial to woman’s suffrage, over the next ten years, only three women would be elected to the school board, and it would be 1937 before a woman would be elected to the city council, and then only because her brother had held the seat before her.
So, despite the predictions and the hopes of a social revolution, female suffrage changed almost nothing in American politics. In Beverly, a Boston suburb with 22,500 inhabitants, only 47% of eligible women actually voted. Even more depressing was that in the reality, women voted like men, and less by 3 to 2; “every known instance of available data in the United States has revealed a lower rate of turnout or registration among women as compared to men…the difference between male and female turnout is in the neighborhood of 20 percentage points…”
Of course the news media of 1920 were no more eager to let go of their much ballyhooed image of the election than they are at present. Facing clear proof that no gender gap existed, the media insisted that it did, and that women had voted for Warren G. Harding because he was a handsome ladies man. In fact he was a hound, and his sexual proclivities were not directed toward monogamy with either of his wives. The reality was that women did not “elect” Harding. He won for the simple reason that in 1920 America wanted to go back to sleep.
Harding was helped by the Democrats, who, in shades of the 2000 election, could not decide if they liked their leader enough to vote for him.  Wilson was despised by everybody. German Americans felt he had betrayed them at by going to war, and Irish Americans felt he had betrayed them at the Versailles peace conference. James Cox (above), the Democratic candidate for President in 1920, vacillated between support for Wilson’s League of Nations and rejection of it, and so lost both Wilson’s endorsement and the support of those Democrats who disliked Wilson. But none of that mattered
Harding also “waffled” on the league. But the voters did not care what he thought. Harding never left Ohio. His best known campaign slogan was “A return to normalcy”, although what that exactly meant was never explained.
Over the sixty-one days of the official campaign, over 600,000 people took the train to the Harding homestead in Marion, including Henry Ford, Thomas Edison and movie stars Douglas Fairbanks and Mary Pickford. And despite all that energy pounding on his own door, Warren G. Harding remained proudly boring, defiantly placid and belligerently dull, a vacuous lump at the center of the universe, a black hole if you will, by choice. He was not an idiot, but he was smart enough to play one in public.
The lesson is of 1920 then, it seems to me, is that democracy exists in America both of because and in spite of the venality of the American public. And that only those ammendments to the constitution which enlarge rights, such as female suferage, even when done for the worst of reasons, make the nation stronger. But those attempts to limit freedom, even when done out of the best of motives, such as prohibition, fail, and are doomed to fail, and fail our democracy as well. And 1920 proved that once again.
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