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The Rise of the Billionaires Leaves the Middle Class Stranded

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Friday, February 03, 2012

THE CONTINENTAL LIAR

 
I blame the Democrats for what happened to James Gillespie Blaine (above). The donkeys were supposed to be doing their nominal job of keeping Republicans honest, but because the Democrats jumped the ideology shark with their "Southern Strategy" in the run up to the Civil War, there weren’t a lot of them around when Republican James Blaine was first elected to congress in 1862. Nor was it James’s fault that his brother-in-law, Eben C. Stanwood, was so greedy. There is always a lot of money floating around Washington during a war, the kind of easy money even a brother-in-law could get his hands on. And James Blaine would have been a saint if he hadn’t been tempted by the offer by the money to be made selling stock in the Little Rock and Fort Smith Railroad. Of course James didn’t have to jump in quite so enthusiastically…
The Little Rock Railroad was supposed to have been completed before the civil war broke out, but it went bankrupt. And that was when Boston speculator Josiah Fisher convinced a group of investors (including the brother-in-law, Eben) to buy up the worthless stock. It was Eben - and another crooked “investor” named Joshua Caldwell - who dangled fat sales commission checks in front of the new Congressman James Blaine. And from the second he heard about the idea, James wanted in. In fact, the Maine Congressman wrote to Fisher on the 10th of September 1867, in a letter marked “Strictly Private”, “…my position will enable me to render you services of vital importance and value….I do not feel I shall be a dead head....Are you not willing to aid me (elsewhere) where you can do so with profit to yourself at the same time?” Fisher did not reply to this crude solicitation, so evidently James paid him a visit in person. We know about the agreement they reached because Blaine was helpful enough to lay out the details in a second letter he wrote to Fisher, which he helpfully marked “Burn after Reading.”
By September of 1869 James Blaine had sold over $130,000 in Little Rock railroad bonds (worth about $2 million today), mostly to other railroad barons, who, of course, did not need or want paper they knew was worthless. But still, James was paid very handsome commissions for those sales. By then passengers could actually board the train in Little Rock. However they were required to cover the last fifty miles to Fort Smith in a stagecoach, a 3 ½ hour living hell of dust, mud and potholes. Not surprisingly, the railroad went bankrupt yet again. But despite the business having failed twice, Congresman Blaine was still demanding that he be “compensated” in addition to the commission checks he had already cashed. Fisher was ready to tell Blaine to drop dead,  until one of the other robber barons reminded Fisher, “…it is important that he should be conciliated…However unreasonable in his demand he may appear to you…he should in some manner be appeased.” So Speaker Blaine was “appeased” with loans he was not expected to repay. But Banker Fisher was not likely to forget he had been made to feel like one of the suckers of his own scam.
After serving three very profitable terms as Speaker of the House, James Blaine stepped down so he could concentrate on a run for the White House. Just think how much money he could make there! As the campaign season of 1876 approached, he was a serious possibility. However, things had changed in Washington by then. The Democrats were back, and had captured control of the House of Representatives. That gave them the power of subpoena, and they used it to subpoena a certain Mr. James Mulligan, who was a Boston bookkeeper in the employ of Banker Josiah Fisher. Remember him?
It seems that Mr. Mulligan had never burned an incriminating letter in his life. On May 31st , 1876 under the gentle guidance of Judiciary Committee Chairman, Democrat Proctor Knott (I love that name!), Mr. Mulligan casually admitted that he had in his possession “certain letters written by Rep. Blaine to Mr. Fisher”. Given the high sign by Blaine, the senior Republican on the committee immediately moved to adjourn for the day. That night Rep. Blaine appeared at Mr. Mulligan’s door at the Riggs House hotel, and proceeded to chase Mulligan all over his room, begging and whining and reminding Mulligan what disgrace would mean to Blaine's poor children. Finally, because he was embarrassed and cornered, Mulligan allowed the Congressman to read the letters. But once he had his hands on them Blaine announced that since they were “his” letters, he was going to keep them, and left with the letters safely in his own pocket.
On the floor of Congress over the next several days the Democrats demanded that Blaine hand the letters back over. Finally, on June fifth, James Blaine rose to speak in front of packed House galleries. He thundered, “I have defied the power of the House to compel me to produce these letters…but, sir,…I am not afraid to show the letters. Thank God Almighty, I am not afraid to show them.” As proof of his willingness to show the letters, he showed the letters. He waved them over his head. “These are they…and with some sense of humiliation,…with a sense of outrage which I think any man in my position would feel, I invite the confidence of 44 million of my countrymen while I read those letters from this desk.” And so he did, with commentary and asides in his own defense. The Republicans were persuaded, but the Democrats were not.
Having earlier read the letters himself, Chairman Knott (above) knew that Blaine had avoided reading certain incriminating sections of the letters, and he rose to challenge Blaine’s version. And that was when James Blaine pulled the rabbit out of his...hat. Suddenly changing the subject, he asked Knott if the committee had received a transatlantic cable from Joshua Caldwell (remember him?), supporting Blaine’s version of events. In fact Caldwell had sent such a cable. But Caldwell was a well known liar, and nobody in their right mind would believe anything he said - certainly Proctor Knott didn't. Still, that was not the question. Rep. Blaine stomped right up to Proctor’s desk and accused him, nose to nose, of suppressing the Caldwell cable. Blushing, Proctor was forced to stammer that indeed they had received such a cable. The galleries erupted in thunderous applause for Blaine.
Chairman Proctor Knott himself described the challenge as “…one of the most extraordinary exhibitions of histrionic skill, one of the most consummate pieces of acting that ever occurred upon any stage on earth.” Blaine had so completely turned the tables on the Democrats that nobody except them seemed to notice that he had not, in fact, denied the basic allegations of bribery in the letters.
Still, the effort had extracted a toll on Congressman James Blaine. That Sunday he collapsed on the front steps of his church, and passed out. If he was stricken going into the church or coming out I have been unable to confirm.  He was bedridden for several weeks, during which time the committee investigation faded until it simply evaporated. But James G. Blaine's dreams of the White House had to be put off for the time being. Of course, being one of the biggest egomaniacs of his age, he never said never. And come 1884 he would try for the White House yet again. Which is when those letters would resurface, again.
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Wednesday, February 01, 2012

U SUCK


I want to tell you about the most improbable machine in all of human history, a machine so brilliant that it has no moving parts. In fact, it works because it has no moving parts. Next to this invention, the invention of the wheel looks like the work of a simpleton. And if you didn't know the history of this machine, you would have said that could never have been invented, that it must have required a genius to have even conceived of the need for such an invention. But that is only because this brilliant machine was not invented to do what it does. The inventors were trying to solve an entirely different problem. And their solution to that other problem did not really work very well. See, before this improbable machine could be invented, first people had to invent an almost equally improbable thing - beer.
Now, beer was not invented by people trying to get drunk. That was just a happy side effect. They were trying to make bread. But when they screwed up their dough, they got fremination, which ruins the bread, but produces beer. So, put yourself in the position of a Sumarian alcoholic, hanging around a Babyolonian bakery, waiting for the workers to throw out their mistakes. When they do you are presented with a mildly acoholic stew,  filled with floating chunks of dough, stalks and stems and seads and smelling like mold. In wine circles this is called the bouquet. So, how do you get the mind numbing neuron killing elixir into your body without jamming a soggy chunk of dough over your wind pipe and catching the express ferry over the river Styxx? You need a machine which will allow you to filter out the chunks and still deliver the booze to your throat.
And right in front of your face, floating in the jug with the booze, is the solution - stems. Stems are Mother Natures way of carrying water from the roots of a plant to the leaves and seeds, by tapping into the tendency of a water molecule to attract an adjacent water molecule – called capillary action.. This is how paper towels work, but it is an unacceptably slow method of devlivering fluid to a thirsty person's throat. To do it faster you need a partial vacuum. So a straw is not just a hollow stem, it is a hollow stem in which the air pressure is lower at the higher end than at the lower end. When you suck in, the fluid is drawn to the low pressure in your mouth, and rises in the stem. In fact the oldest image we have of people drinking beer shows Sumarian guzzlers sucking on staws almost 7, 500 years ago. Hidden in this carving is the corporate structure of Budweiser and Coco-Cola. Seriously, this stone carving is like finding a note written by an ancient ceolacanth that reads, “Today, I grew a lung.”
But while a straw will prevent dough from blocking your esophagus, you now have the problem of the dough blocking the straw. This is why brewers did not start making real dough from their beer until the got the dough out of their beer .And once you no longer needed a straw to drink beer, you really no longer needed straws. So the development of straws languished, an alcoholic afterthought, a mere garnish to the twin sciences of marketing and fluid dymamics until the re-invention of drinking for fun.
Over the intervening thousands of years the only straws were actual straw, made out of grass stems, in America, usually rye grass. The drawbacks were obvious – first, whatever you drank through the straw now tasted like rye grass and second, the only unniversally fun drink, alcohol, had a tendency to do to the cell structure of the straw what it does to the cell structure of your brain. You dare not dally over your mint julep least your straw decompose in mid-suck. And that problem was not solved until Mr. Marvin Chester Stone, of Washington, D.C. was about to get shafted in a business deal in the 1880's.
Marvin was working as a journalist in Washington, D.C. when James Bonsack invented a machine capable of rolling 200 cigarettes every minute. Marvin immediately saw an opportunity and in his spare time designed and built a machine to mass produce cigarette paper (above)  fast enough to keep Bosnack's machine supplied. Marvin started a factory on Ninth Street in Washington, and became the exclusive suppler for tobacco magnate James Buchanan Duke, who had bought the rights to Bonsack's machine. Marvin was now making pretty good money, except... Duke started gobbling up his competors, building what would eventually become the American Tobacco Company, also known as the “Tobacco Trust”.  Marvin knew that eventually his only customer, Mr. Duke, would demanded that he lower his prices until he was squeezed out of the business. And while contemplating his predicament one night over a mint julep, Mavin came up with a solution.
What he needed was another product. It had to be made out of paper, since he had already had a factory to handle paper. So, the story goes, Marvin glued a roll of paper around a pencil, removed the pencil and sucked his mint julep through the resultant tube. His mint julep now tasted like glue, and the paper tube fell apart faster than the natural stem straw. But Marvin knew how to solve that. He repeated the experiment, but this time, after he rolled the paper around the pencil, he dipped it in wax, and again after he removed the pencil. The paper was now water proof enough that it lasted through an entire mint julep before it came apart.  And his mint julep now tasted like just a mint julep. Rather than being shafted, Marvin would suck. He quickly designed a machine to mass produce his new wax paper straws (above), “adapted for use in the human mouth without injury”,  as he claimed on his patent application. 
His patent was granted on January 3rd , 1888, (now offically “Drinking Straw Day”) and one year later Marvin was selling more wax paper straws than he was cigarette paper. He even had to open another factory on F Street, just to keep pace with demand for sucking in mint juleps, Coke-a-Cola, Pepsi and Doctor Pepper. Marvin was financilly set for life, which was, unfortunatly, only ten years long. He died on May 17th, 1899. at just 57 years of age. And that really sucked.
There were minor tweeks to straw technology until 1935, when a San Francisco office manager, part time real estate agent and amature inventor observed his daughter Judith struggling to suck in a milk shake at the Varsity Sweet Shop in that city. She just wasn't tall enough to comfortably reach the top of the standard 8” high straight wax paper straw. And in the girl's frustraition her father, Joesph Freidman, saw a fortune. He inserted a metal screw about 1/3 of the way down a wax-paper straw. Then he wound dental floss around the outside of the straw, creasing it to match the screw's threads. And when he removed the screw, he had an invented the “bendy staw”.
It seemed like a simple modification to existing technology, and to be worthy of a patient Joesph would have show his invention filled a not previously recognized need. So on his application, Joesph waxed dramatic. “A view of any soda fountain on a hot day,” he wrote, “with the glasses showing innumerable limp and broken straws drooping over the edges thereof, will immediately show that this problem has long existed. Where...no inventor...has seen fit or has been able to solve this problem, whereas applicant did, that situation alone is prima facie evidence of invention.” It was enough to bring tears to the eyes of an idealistic capitalist. The patent for this “Drinking Tube” was granted on September 28, 1937, creating what Judith's younger sister, the adult Pamela Friedman Leeds, recently describe as “the family icon”. They called it the Flex-Straw.
But why do we still use the straw today, in any form? They are rarely used at home. But why are straws so popular in fast food restaurants, where the drinking cups are one time use wax paper and disposable, and the straws are usally one time use polypropylene and also disposable. Sanitation is not an issue. And modern beverages are not in need of filtration. There are two possible explinations, offered at John Elder Robinson's web site, “Look Me In The Eye”, (http://jerobison.blogspot.com/2007/04/ulterior-motive-behind-free-drinking.html”.
“Our bodies evolved to associate wet lips with satisfied thirst. Drinks that are ingested via straw don't touch our lips, and so do not satisfy our thirst as quickly. The result: we drink more...Did you know that the plastic straws at today's fast food restaurants are 50% larger than the straws at soda fountains 50 years ago?...Stimulation of consumption is the only reason I can see for increasing the diameter of a straw.”
Thus the straw has become just another marketing tool, like stock derivatives and bottled water. It may still be true that you get what you pay for, but thanks to the machine of marketing, you no longer get what you thought you were paying for. And that just sucks.
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Sunday, January 29, 2012

ET TU Part Two Gambling With History

I have no doubt there were spies in Ravenna on January 11th. There are always spies in border towns, and traveling north out of Roman territory, the first town you reached in Cisalpine Gaul was the little fishing village of Ravenna. A man could be a governor here, even a dictator. But just fifteen miles to the south in Ariminum, he would command no soldiers, no bureaucrats, he would be not the governor but governed by the politicians 200 miles to the southwest, the self described center of the civilized world; Rome. And the man the spies from Rome were watching this winter day in 49 B.C. E., was the governor of both CisAlpine and TransAlpine Gaul - Julius Ceasar.
Ceasar's stated reason for being in Ravenna was to check up on his investment in a gladiator's school. That was logical - given that the tens of thousands of slaves Ceasar had captured in his conquest of TransAlpine Gaul (i.e. France) and during his recent invasion of Britian, had be converted into cash. Laborers and house servents could quickly be sold, but Gadiators always sold at a premium, so, of course, Ceasar was here to inspect the progress of construction of his school, and to witness a display of his gadiators in training. Then, after a light lunch, Ceasar went to the baths, another public appearance for a Roman politician. And in the evening he sat down for a banquet, the kind of thing public officals are still expected to do almost daily. And as the sun set, according to Plutarch, “...he left the company, having desired them to make merry till his return, which they would not have long to wait for." It was enough to lull most spies to sleep. But the Romans were about to learn what the Gauls had learned before them - if you want to know what Ceasar is about to do, you did not watch Ceasar. You watch his troops.
Three years earlier, in December of 53 B.C., a member of the ruling First Triumvirate, the primary ally of Ceasar, Crassus, a had been killed in Parthia. At about the same time another Ceasar supporter, Tribune Publious Clodius Pulcher, had been killed in a staged brawl – something which had become common in the dieing Roman Republic. The Tribune's angry supporters had built Plucher's funeral pyre in the Senate House, which resulted in the Senate House burning down. The Senate aristrocrats used this act of vandalism as justification to elect the second member of the Triumvirate, Gnaeus Pompeius Magnus, as Sole Counsul, with powers to put down what was described as an insurection. When some nervous Senators hinted that there were few soldiers in Rome to protect them, Pompey reasssured them, “I have only to stomp my foot to raise an army” And while he began to arrest Ceasar's supporters, on January 7th 49 B.C, the Senate voted to order Ceasar to disband his own legions and return to Rome for trial. That law was vetoed by the two Tribunes who were were stll loyal to Ceasar, Mark Antony and Quintus Cassius Longinus. They were promptly driven out of the Rome at sword point.
Ceasar (above), the third member of the Triumvirate, was still in Gaul. And he offered a compromise. He was willing to give up his command and return to Rome, if Pompey gave up his post as Sole Counsul. And, Ceasar also requested the Senate allow him to stand for election as Counsul while he was still in Gaul, with, presumably, Pompey standing for re-election as co-Counsul at the same time. It seemed a fair compromise. If elected both men would have immunity from prosecution in the courts, and would jointly rule the city of Rome for a year. Pompey could have accepted the deal simply by resigning. But he did not trust Ceasar enough to take the offer. And the aristrocrats in the Senate rejected their half of the comprimise out of hand. Ceasar's ten year term as Governor of both Gauls was about to run out, and as soon as he was no longer legally protected by his legions, the Senate could deal with him. So the Senate could afford to wait and watch
Ceasar could not, and did not. His 6,000 veterans of the 12th legion were in winter barracks near present day Trieste, Serbia, at the head of the Adriatic. Early in January, before the Senate had even rejected his compromise, Ceasar had odered these men to sail for Ravenna. The advance elements had arrived at the little fishing village a week later. And on the afternoon of the 11th,  5,000 infantry and 300 cavalry marched out of the “Rimi” gate, headed south.
After dusk, having slipped out on his dinner party, Ceasar made his way on foot to a mill on the outskirts of the Ravinna. Here his aides had a hired carraige waiting. Pulled by four mules he followed a back road across the surrounding marshes. In the dark he got lost, and his carraige got stuck in the mud. Dawn found the great Ceasar on foot, asking for help from a lowly farmer. By mid morning he had joined his men, on the banks of the River Rubicon (or the red river).
This was the traditional border of Rome. Beyond, in the village of Rimi, was the end of the 200 year old great “Northern Road”, the Via Flaminia (above), which wound its way across the Apennines, the central mountain spine of Italy, through narrow gouges and bridging rushing torrents, to the Field of Mars, through the Flaminia gate in the city's walls, right to the base of Capitoline Hill, the central citadel of Rome itself. Crossing this border at the head of an army had been forbidden for a Roman general for two hundred years. Crossing this border would brand Ceasar and his soldiers as outlaws, subject to execution by any citizen at any time. So this called for a bit of theatre.
The veterans of the 12th, had followed Ceasar from conquest to triumph across Gaul, had even crossed the Rhine and invaded Germania. But this was something different, this was an assault on the Senatus, Populusque, Romanus - the Senate and the People of Rome, symbolized by the S-P-Q-R atop every banner the soliers followed, on the very coins they were paid with. Nervously the ledgionaires awaited the stirring speech they expected Ceasar to give before asking them to commit an act of treason.
Instead, a man suddenly grabbed a trumpet from one of the musicians, raced across the shallow stream blowing “the advance”. Ceasar turned to his officers, and said, “We can still retreat. But once we pass this little bridge, there is nothing left but to fight..” Then he turned toward the bridge, and called out, “Let us go where the omens of the Gods and the crimes of our enemies summon us” As he crossed the bridge himself, he is supposed to have said, almost to himself, “ Alea iacta est”, the Latin phrase usually translated as “The die is now cast!”
Across the river Mark Anthony and Cassius Longinus waited, physical evidence of the arrogance of the Senate. Here Ceasar drew the troops into a square, tore his robes in a show of humility, and led the soldiers in a personal pledge of fidelity to himself, to Ceasar. The Roman Republic was now dead. All that had yet to be done was to bury it. According to Suetonius, his legion now “marched so fast the rest of the way that he reached Ariminum before morning and took it.”
Rome was electrified by the news. Ceasar began his march down the Via Flaminia, and it quickly became clear that the Senate's previous arrogance had turned it a triumphal parade. So great was the frustration with the Senate that city after city threw their gates open to Ceasar. Forces sent to stop him, went over to him. '
Senator Favonius suggested it was high time that Pompey (above) stomped his foot. Pompey's own legions were in Spain. The city had raised two legions and was assembiling a third, but they were new recruits, and Pompey was not interested in matching them against Ceasar's veterans from Gaul.  Pompey did not increase his popularity when he informed the aristrocratic members of the Senate that they should get out of town. Many denouced Pompey as a coward. But they still followed Pompey and their fellow aristrocrats when they grabbed their wealth, and ran for Brundisium, the traditional port at the heel of the Italian boot. In their haste they left behind the treasurey of Rome, the horde of gold and silver looted from Carthage, stolen from Egypt, taxed from Spain and Maccidonia. It was the first place Ceasar went, when he got to town.
They couldn't find the keys to the vaults. Ceasar sent for locksmiths. A Tribune reminded Ceasar he was violating the law. Ceasar suggested, “If what I do displeases you, leave.” The doors were forced open, and Ceasar had enough money to pay his soldiers, and build his empire. But murder stepped through that door, right next to him.
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