NOVEMBER 2017

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

Translate

Amazon Contextual Product Ads

Friday, March 28, 2014

A WOODEN LEG NAMED SMITH

I recently read that the historian Bernard Lewis was once considering writing an essay on economics, but confessed he couldn't get past his own first paragraph. He had written, “In the history of human thought science has often come out of superstition. Astronomy came out of astrology. Chemistry came out of alchemy. What will come out of economics?” Its such a good joke, Lewis figured saying anything else would just be repeating himself. Luckily, I have no such inhibitions. But then I also have no problem describing the World War One slaughter of Armenians as a holocaust, which Professor Lewis refuses to do. I guess we all tend to underestimate the power of our own psychology to confuse us...much as the ideologues of economics continue to do.
“Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”
The Wealth Of Nations
The godfather of capitalism was the fatherless Scotsman, Adam Smith (above). He presented to the world a “large nose, bulging eyes, a protruding lower lip, a nervous twitch, and a speech impediment” He had no love life that we know of, admitting “I am a beau in nothing but my books” And he wrote just two books – which was good because he was a really boring writer. He may be the most quoted lest read author since Moses. He wrote “The Theory of Moral Sentiments”, first published in 1759, and “An Inquiry into the Nature and Causes of the Wealth of Nations”, first published in March of 1776 - a month before the start of the American Revolution.
“If [justice] is removed, the great, the immense fabric of human society... must in a moment crumble into atoms.”
The Theory Of Moral Sentiments
I give the date for the first publications of Smith's books because he never stopped re-writing them. Where the modern author fixes his mistakes by issuing an entirely new manifesto, yearly, Smith reworked his books until he ran out of time. There were four editions to “Moral Sentiments”, and five editions of “Wealth of Nations”. And with each edition they got longer, and more verbose. More than one reviewer has described “Wealth of Nations” as“tedious” and Thomas Jefferson recommend readers consult another author because he “treats the same subject on the same principles, but in a shorter compass and and more lucid manner” than Smith did.
“To widen the market and to narrow the competition, is always the interest of the dealers…who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.”
The Wealth Of Nations.
The defining moment in American economics was the great depression. Fundamentalists adhere to the Old Time Religion of Roosevelt's New Deal; in time of business down turn, government should prime the pump, putting money into circulation to fuel a business recovery. Reform Theorists, like the Chicago School, contend the New Deal was actually a total failure. The key to economic stability, in their view, is faith in private enterprise and distrust of government enterprise. Why the generation which actually experienced the depression and recovery refused to believe the New Deal was a failure, is never explained in their ethos. And they expend a great deal of energy ignoring the godfather of capitalism, Adam Smith, when he virtually screams in both of his methodical works, that private enterprise, if left to its own devices, may be relied upon to destroy its own markets. To paraphrase Karl Marx, capitalism will bury itself. 
“The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities...”
The Wealth Of Nations.
Of course the first thing you notice when reading Adam Smith is that he never uses the word “capitalism ”. It had not been invented yet. And neither had the word psychology. But both were Professor Smith's subject when he wrote: “Every individual... intends only his own security; and...intends only his own gain, and he is in this...led by an invisible hand to promote an end which was no part of his intention.” And thus we meet Smith's magical “invisible hand”, used ever since he wrote that sentence to justify the greed, waste and “gluttony of the wealthy”, to also quote Adam Smith. But that same invisible hand, says Smith, must also be guiding the tyranny of a socialist majority - for the greater good. It is the balance of the two which Smith promotes in his works, not a domination of one over the other. At times he seems to be channeling thinkers like Karl Marx - from a century in front.
“Our merchants and masters complain much of the bad effects of high wages in raising the price and lessening the sale of goods....They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.”
The Wealth of Nations..
Dubious legend says that Adam Smith was once awakened from a muse to the sound of church bells. Dressed only in his nightshirt, he had walked, lost in thought, fifteen miles from his home on High Street in Kirkcaldy (below), to the outskirts of Durnfermline (above), Scotland. To have made that journey he would most likely have followed the Invertiel Road southwest to the village of Dalgety, before turning north west to Durnfermline. If he had done so, why did no one from Dalgety stop the lunatic wandering about in his night shirt? The story reads like the old joke about the man with a wooden leg named Smith. The punch line is "What is the other leg called?"  But the two towns did play an important role in Smith's thinking.
“The man of system…seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that...every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it.”
The Theory Of Moral Sentiments,
Durnfermline had been the ancient seat of Scottish royalty, and had caught the first wave of industrialization, growing rich by mass producing the luxury damask weaves. But the feudal center had been outstripped by the hand looms of the port city of Kirkardy, which had tripled its output of simple linen over ten years (1733 -1743). As a youth Smith had thus seen first hand the power of capitalism to create and to waste, both markets and the lives of the workers and consumers. The citizens of Durnfermline were now left without work, starving and abandoned by a social structure designed for a field workers, who grew what they ate. Smith admitted that his invisible hand was always ready to pick a pocket, even if only its own. And the legislature he derided in the above example might be a liberal “socialist” body, or a conservative body protecting its wealth. Neither brand of political theater impressed Adam Smith. He  believed in the bible, and in particular its ancient warning about the love of money being the root of all evil. He knew, and preached, that capitalism was not about the "job creators", but about the consumers, the middle class - created by capitalism and feeding capitalism. They are the wealth of a nation - not gold or stock values or stock brokers. Without a healthy, growing middle class there can be no capitalism.  That was the lesson Adam Smith was trying to teach.
“No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”
The Wealth Of Nations
- 30 -

Wednesday, March 26, 2014

A BLACK DAY FOR BASEBALL

I am writing this on yet another oppressive August afternoon. It is baseball weather, when all Americans should be surrounded by the comradely of strangers in shirtsleeves, with a penciled box score in hand and green pastures before them, a land upon which time dare not intrude. Baseball in August is an endless limitless existence,  from which other realities retreat, and which may be savored patiently until the final out is called.  And on such afternoons my mind floats back to one particular afternoon, almost a century before this August, the hot and humid afternoon of August 16, 1920. In my mind's heart I am at the Polo Grounds, a bathtub shaped ballpark along the Harlem River, at the very northern tip of Manhattan. It is home to the National League New York Giants, but since 1913 the American League Yankees have also leased time on the field. And as fans gather in the Coogans Bluff stands beyond right center field, we are witness to a battle of the two best teams in the league. For the Yankees are hosting the powerful Cleveland Indians. And time is about to pause, to catch its breath, to teeter, balanced for a micro-second between one era and another. And as the fifth inning begins, this is the instant of transition.
The Yankees are using their best pitcher, the crafty right hander Carl Mays. He once praised another pitcher, saying, “That fellow has no friends and doesn’t want any. That’s why he’s a great pitcher.” The friendless Carl Mays may be the greatest pitcher in baseball at this moment. He was part of the Boston Red Sox dynasty that dominated baseball in the first two decades of the 20th century. But in 1919 he demanded to be traded. The Yankees paid $40,000 and gave up two players to be named later to put Carl in Yankee pinstripes. They wanted his “submarine” (underhanded) pitch, his blazing sidearm delivery, his un-hitable spitball, and his reputation for brushing back batters who crowded the plate. He was on his way to a 26 win -11 loss record with six shutouts in 1920. Today, August 16th,  he is pitching out of rotation because the game is so important and because Carl Mays is going for his 100th major league win.
The batter is the top of Cleveland's order, the veteran Indian speedster, short stop Ray Chapman. The cheerful songster is fondly known around the league as “Chappie”. After nine seasons in the majors he is at the very top of his game. So far this season he is batting .303, and he has a lifetime 93 runs scored and 671 runs batted in. Chappie also has 233 stolen bases and he wields one of the finest defensive gloves in the league. But he made his reputation laying down the bunt. He crouches down, huntched over the plate, at the very back of the batter's box, thus leaving the pitcher with almost no strike zone to aim for. It is this stance, and his blazing speed to first base - he once rounded the all four bases in 14 seconds - that have given Chappie an impressive on-base average of .358. But only a few close friends know that Chappie is planning on getting out while he is on top. He was married the year before, and has made plans to go into business with his new father-in-law. And some World Series earnings would certainly smooth his way to retirement.
As Chappie steps to the plate at the top of the fifth inning, it is a humid 82 degrees under a cloudless blue sky. The 24,000 fans lean forward in their seats. When Chapman is at the plate, things happen. In the first inning Chapman had laid down his 34th successful bunt of the season. Thanks in part to Ray's speed on the base path, Cleveland is now leading the game, 3 – 0. In the third inning Chapman had popped up. And now, as the fifth inning begins, Ray steps into the batters’ box and digs in.
On his very first pitch Carl Mays delivers a winding, rising, side armed fast ball bullet. With extraordinary velocity the spinning ball hurtles toward the plate, almost faster then the eye can register it. And in that second of time, between the ball leaving Carl's fingertips and it's arrival at the plate, baseball changes forever -  an era ends and an era begins - what might have been becomes what once was, what used to be. It is the blink of an eye. It is the passing of a shadow through a life. 
There is a loud ringing thud. As Mays steps out of his delivery he sees the ball is rolling quickly back toward the mound. Thinking Chapman has hit it with the handle of his bat, Mays adroitly retrieves the ball and throws a peg down the line to first base. And only then does Carl Mays realize that Ray Chapman is crumpled on the ground. 
The Polo Grounds gasp as if a single soul. The umpire, Tommy Connolly, sees blood coming out of Chapman’s right ear and nose. He asks Ray if he is alright. Receiving no reply he calls into the crowd for a doctor. At that shout, Ray opens his eyes and staggers to his feet. A few people in the crowd began to applaud. But after taking only a few steps down the first base line, Ray Chapman collapses again, in a broken heap. His teammates carry Ray into the club house where he mumbles a request for his wedding ring, which he’d given to a trainer for safe keeping. Feeling the ring in his hand seems to comfort Ray.
Meanwhile, on the field and with a new ball, the game resumes. Mays retires the next nine batters in a row and the Yankees fight back to tie the game at 3 - 3. It is a Yankee relief pitcher who gives up the winning Cleveland run; 4 – 3. Called in Cleveland, Ray’s wife, Katie, boards the next train for New York City.
Hospital X-rays show Chapman has a depressed fracture of his skull. The doctors operate and remove a 3 ½” section of Ray's cranium to lessen the pressure on his brain. The surgeon tells the Cleveland manager that not only is the right side of Ray's brain lacerated from the impact with the ball, but so is the left side, where it  bounced off the other side of his skull.  At 4:40 the next morning Ray Chapman is declared dead, the only person to ever die while playing a Major League Baseball game. A family friend met Katie’s train from Cleveland at 10:00 am that morning. But she does not tell the young woman of her husband’s death until they got to the hotel. Once behind closed doors, and told the horrible news, Katie collapses in a faint.
That one pitch can stand as the unofficial end of the "Dead Ball Era", when the game was hit and run, steal and bunt, when the leather was mightier than the wood. It was a time when the game was more strategy than brute force, more brains than brawn, more spunk and more a team sport than it is today. It was a time when  baseballs' greatest slugger was Cliford "Cactus" Gravath,  who in 1915 hit a record 24 home runs, 11 more than his closest rival.  It was not unusual for a league batting champion to have fewer than 10 home runs in a single season. It was a  time when Owen "Chief" Wilson, playing for Pittsburgh, set a record of 35 triples in a single season  - a record which still stands today, a century later.
And then, in 1920 the New York Yankees decided that their new $100,000 acquisition, Babe Ruth, who had earned fame as a pitcher, should stick to batting. In 1920, his first year as a Yankee, "The Sultan of Swat" hits a record 54 home runs, more than all but one of the other entire teams in baseball combined.  He also batted for a .376 average, and his .847 slugging average (total bases earned divided by total at bats) was a Major League record until 2001. The game had changed in a fundamental way after 1920, and the tipping point had come at the moment between Carl Mays releasing the ball, and it impacting Ray Chapman's skull.
Wearing black arm bands in Chappies’ honor, The Cleveland Indians beat out the New York Yankees for the pennant that year, and went on to win the World Series. The Yankees finished a distant third. The Cleveland team voted Katie Chapman a full share of the winners’ purse, about $4,000 (worth $45,000 today). Six months after Chappie's death, Katie gave birth to his daughter and named her Rae. A few years later Katie remarried, to businessman J.F. McMahon and he moved them to California. But she still mourned Chappie. In 1926 Katie committed suicide by drinking cleaning fluid. Three years later little Rae contracted German measles and died as well. Both bodies were brought back to Cleveland,  to be buried in Calvary Cemetery under the name “Chapman”. Ray is buried alone about five miles away in Lake View Cemetery, where fans still leave baseballs, bats and memorabilia against his tombstone. If you have a chance, you should do the same.
Carl Mays played for the Yankees for only one more season. In 1921 he won 27 games and lost only 9. And he  batted .343, unheard of for a pitcher in any era of the game. Despite that achievement, part way through the 1922 season he was traded to the National League Cincinnati Reds, where he went 20 and 9, making him the first pitcher to win 20 games in both leagues.
Carl Mays spent 15 years in the majors, earning 208 wins and 31 saves against a mere 126 losses, with an amazing 862 strikeouts in 490 games. His lifetime batting average of .268 makes him one of the best hitting pitchers of all time. And yet, despite what are clearly Hall Of Fame statistics Carl Mays has received only 8 votes for that honor. Some may believe in the absurd story that he fixed a World Series game in 1922. But the facts deny that. No, what haunted Carl Mays until his death in 1971,  what kept him out of the Hall of Fame, was that one pitch out of the thousands of pitches he threw over his career, the one pitch he threw in the August heat of the 1920 pennant race. It is something to ponder, as the dog days of summer approach once again, and the finality of September hints at the winter which shall soon to envelope us all. 
- 30 -

Sunday, March 23, 2014

ETERNAL TRIANGLE Pt Two

I have been in love and been  stupid. You have been in love and been  as stupid as members of this "triangle of delinquency" in our story. Or you will be. It is part of the human condition to be in love and be this stupid at least once in your life. And there is even little shame in being this stupid twice. And although Edward Stokes had the opportunity to break free from his love sick stupidity when the judge threw out his arrest for embezzlement in early 1871, he did not. He could not. And there was no excuse for being that stupid. Like a Tom Cat with his eyes locked on a caged bird, Edward Stokes had lost what the Hindus refer to as his third eye -  the ability to see himself from afar, detached from the emotion of the moment.  Edward Stokes was in love with Josie Mansfield, and love makes you stupid. But Edward and Josie were also in love with money. And greed makes you doubly stupid. And that made made all three members of our triangle, triple threats. 
The judges’ decision throwing out Edward's arrest was based on a technicality. He ruled the Brooklyn Refinery was not a corporation but a partnership between Edward and “Big” Jim Fisk. As a partner Edward could not steal money owed to the refinery, since he would have been stealing from himself.  So Edward walked out of court a free man. And if Edward had just left it there, he might have stayed a winner. But being Edward, it was in his nature to carry things too far. That was one of the things that made Josie fall in love with him. That made her a triple threat, too.
So Edward sued “Big” Jim for slander, asking for that $200,000 again. “Big” Jim counter sued, demanding that his love letters be returned. Why Josie had given the letters to Edward passes beyond common sense, but I think we are well beyond sense of any kind in this case. Edward's lawyers argued that the letters might provide evidence of Erie railroad stock fraud, and might be needed in some future criminal trial. In truth, the only crime the letters were proof of was blackmail, which Edward and Josie were attempting to commit. . And they were using the courts to carry out this crime.  That was what “Big” Jim’s lawyers argued.  So the judge ordered the letters be read by an arbiter, to determine just what they proved, if anything. 
The arbiter came to the conclusion that the love letters were maudlin, melodramatic, meretricious and – surprisingly – mundane, and contained no evidence of stock fraud. Given that the letters had only prurient value, the judge issued a restraining order preventing anyone, including the newspapers, from publishing them as long as the various slander cases continued. And with that their value as blackmail material against “Big” Jim, evaporated. After all, as James Gordon Bennet, Jr., publisher of the New York Herald, used to say, “The purpose of a newspaper is not to instruct but to startle.” 
It was at about this point that Edward’s wife took their daughter and fled to Paris. And "Big" Jim's wife, living in far off Boston with her female lover, did the same. Clearly the married women in this case were smarter than their husbands, because they thus escaped being tainted with what that blue-nosed blue-blooded lawyer George Templeton Strong described as “a special stinkpot”.  All of New York was snickering about the tri-cornered stench.  The newspapers kept fanning the stink, even without the letters, and day after day they mocked the participants’ peccadilloes. Now, “Big” Jim had long ago chosen to ignore the opinions of others, and Josie never had even the pretense of virtue. So the only member of the triumphant with sense of public pride left, and with a super abundance of that, and thus the only individual wounded by the continued public mocking, was Edward. And he had been the one who had pushed the letters into court.
Having lost the letters as a weapon, Edward was forced to settle out of court.  “Big Jim" allowed him to keep the $27,500 he had filched from the refinery,  plus $10,000 compensation for the weekend he had spent in jail, and $5,000 for his legal fees. Edward exchanged all of that for his half of the refinery. Edward was now freed from his immediate financial difficulty. Of course he was also now $38,000 in debt to five different attorneys, all for lawsuits against “Big:” Jim Fisk,  and Edward had yet to win a single one. But being a pompous popinjay, he was convinced that he deserved to win at least one. And so he urged Josie to push ahead with her lawsuit against “Big” Jim.  Not that he could have stopped her.
Josie was claiming that during their multi-year affair, James Fisk had invested $25,000 for her, and now she wanted it back, with interest.  “Big” Jim’s lawyers argued that the money had never been hers, just a wooing point, and that Josie’s entire life had been one scam based on lies after another.  On the witness stand Jose began with another lie. “I will be twenty-four years of age on the 11th of December next.” She was actually 28. 
It was perfectly predictable that under cross examination, Josie's sordid past would be used to impeach her. She was asked if, in California “a pistol was pointed in your presence at a man's head?” Reluctantly Josie replied, “There was a circumstance of that kind happened.” “Was it a man by the name of D. W. Perley…Was (the gun) pointed at him by (Josie's stepfather)? (And) did (Perley) sign a check before he went out?” All of this, Josie was forced to admit, was the truth. The jury, and the press, knew a badger game when they heard one.
During over three hours on the stand,  Josie was also forced to admit that Fisk had bought her the house on 23rd Street, from the knocker on Josie's front door to the curtains in the parlor and the commode in the bedroom. She was even forced to admit that she had handed over her love letters from Fisk because Edward thought they “would benefit him in the case…pending between him and Mr. Fisk.”  All of this was predictable, as her lawyer must have predicted. But Josie had insisted on proceeding. She was also three times stupid; she was in love, she was in love with Edward, and she was greedy. 
And then, on January 6, 1872, Edward took the stand in Josie’s case. Even under friendly direct examination, the spectators could not suppress a giggle when Edward insisted he and Josie were “just friends”.  When court broke for lunch at 1:00 p.m. Edward stormed out, infuriated at the snickers. He was willing to be thought a liar, and a cad. But he was deeply offended by being laughed at. He lunched at Delmonico’s on 14th street, and it was there that he learned from "a friend" that he and Josie had been indicted for blackmailing “Big” Jim Fisk. It was the last straw.
- 30 -

Blog Archive

Amazon Deals