Robot's Encomium of Herbert Hoover

Writing in Slate today the eminently readable (and prolific) economic writer Daniel Gross (no relation) takes some shots at the 31st President of the United States. With his ineptitude and "hands-off" economic policies Hoover, Gross asserts, is one of the few U.S. Presidents to have actually made a short-term difference on the economy: in this case, one so bad that he somehow plunged us into or exacerbated the effects of the Great Depression. Gross's tale is certainly consistent with what I learned in AP History, but contradicts the growing consensus in the historical field that argues that Hoover actually was pretty darn activist.

Recall his background. By the time he was elected President Hoover was one of the most accomplished men in American history. Born into humble, Quaker origins by the end of WWI he had grown to become one of America's most successful engineers, businessman, and humanitarian for his efforts organizing food supplies to Belgium as head of Wilson's emergency war-time Food Administration. While today we might think of Hoover as a consummate Republican--the third in that memorable 1920s triumvirate beginning with Harding and Coolidge--he was in fact more like an Eisenhower or Colin Powell: non-partisan until snatched up by one of the political parties to run on their ticket or join their cabinet. If he had any political sympathies as a youth it was toward the insurgent progressive Republicans that splattered the canvas of his Upper Midwest origins. While the right-wing of this insurgent group included men like Theodore Roosevelt who were anything but hostile to capitalism, no progressive was "hands-off" when it came to the economy. Roosevelt's era, after all, embodied the philosophy of the New Nationalism: the conscious decision by the federal government to increase its powers at the expense of a Gilded Age monopoly capitalism that was seen as the real movers and shakers in U.S. political life.

The key point here is that Hoover's presidency in large part reflected this philosophy. For much of his life as an engineer and later government administrator he had advocated collective bargaining, mine safety, and an eight hour work day. His work on behalf of the U.S. federal government during WWI was seen as having actively repaired European economies from the devastation of war. After the Stock Market Crash he forced the Federal Reserve to ease credits by lowering the discount rate, and agreed to maintain wage rates contrary to the bellicose screams of the pro-business lobbies. He got a $140 million appropriation from congress for public works in a time when the federal government's largest peacetime expenditures was typically for the Postal Service. Despite federal expenditures accounting for only 3% of GDP (whereas now they're closer to 20%) Hoover doubled federal public works expenditures in three years. Rightly believing that the Great Depression was a global phenomenon--a position that FDR himself denied--he temporarily suspended German reparations payments to the U.S.

As the 1932 election approached, Hoover's "second program" laid the foundation for FDR's New Deal. The Reconstruction Finance Corporation and first Glass-Steagall Act provided taxpayer dollar transfers to local government and industry to spur economic recovery in addition to making loans to banks, building and loan associations, railroads, and agricultural corporations. The Federal Home Loan Bank Act was a predecessor to the New Deal's Home Owners Loan Corporation, helping home owners refinance their mortgages and prevent foreclosures. The one true blemish on Hoover's record, the Hawley-Smoot Tariff, many historians consider to be the work of Congress, and fundamentally opposed to the many anti-isolationist measures Hoover initiated.

Historians like David Kennedy (whose work I'm drawing from extensively here) have in my view correctly noted that Hoover's failures were more due to his timing than his actions. America in 1929 simply did not have the political imagination, will, or infrastructure to engage in the kind of massive and wholly unprecedented peacetime activity on the federal level witnessed in the New Deal. Far from absolving Hoover of responsibility, however, such historicization allows us to acknowledge the short end of the stick he has received over the years as his reputation continues to get unjustifiably punished. Without Herbert Hoover's sputtering and altogether insufficient response to the Great Depression, the New Deal's more robust measures would have been impossible.

Saudi Nukes

What will bring down the price of oil? When the US allows the Saudis nukes, to counter Iran of course. This was a concept introduced to me by a fellow wash uer weeks ago and it is slowly being confirmed by the presses: Link

Banking.

Sorry to bump Robot's rather fabulous post. But there is a real possibility of another major non-bank failure(bear stearns wasn't a 'bank', it was a broker-dealer, like lehman) in the next couple weeks - and a subsequent sure meltdown of the financial system.

Me to South Koreans: Why Are You Guys (Not) Having Such a Cow?

If someone can explain to me what exactly is going on with South Korean protests over U.S. beef imports I would greatly appreciate it. I've been following this story for some time--ever since a South Korean student of mine this past semester passionately brought it up to me in a meeting. Are the protests products of mass hysteria? Are they really anti-globalization protests? Pent up anger over many years of hearing about various cases of U.S. military personnel abuse of Koreans? I just don't see how a one in a billion or so chance of mad cow disease can inspire such vehement unrest. Any insights?

End of Exceptionalism

Der Spiegel, in "The Shrinking Influence of the US Federal Reserve," (hat tip reader Saboor) discusses how the US is submitting to a detailed, comprehensive investigation of it financial system under the Financial Sector Assessment Program.

While Der Spiegel claims that this program is a humiliation to the US, the real significance may be that this is another blow to American exceptionism. While the exam is far-reaching, which means intrusive, Canada, the UK, Italy, indeed 2/3 of the IMF members have participated in the program. However, the Bush Administration has resisted it strongly, and agreed only on the condition that it be completed after a new President is at the helm.

One has to wonder whether a president less dismissive of international organizations would have been this high-handed. The FSAP was created in 1999; it's unlikely its sponsors, the IMF and the World Bank, would have wanted to road test a new program on a large, complex financial system like America's. Thus it is unlikely any request would have been made under the Clinton Administration. However, there could well have been predecessor exams that went under different names, so this practice may be long-standing.

Similarly, a very quick check on Google raises some questions. Canada proudly announced in February 2008 that it was the first G-7 member to participate in the FSAP. Yet an FSAP report on the UK is dated 2003. Perhaps there are targeted and more comprehensive versions of the exam. If so, there may indeed be more to the politics of this than meets the eye.

From Der Spiegel:


No Fed chief in US history has been forced to submit to the kind of humiliation that Ben Bernanke is facing.
This is partly down to circumstances,,,

After years of growth, the United States is now on the brink of a recession, one that is more likely to be deepened than softened by a tight money policy...

Some of Bernanke's personal adversaries are also contributing significantly to his current humiliation. In the past, the chairman of the Federal Reserve was a pope among the priests of the financial elite. But unlike his predecessor Alan Greenspan, Bernanke is finding that his policies are not universally accepted, even within the Fed.

The last seven decisions reached by the Federal Open Market Committee, which sets monetary policy, were accompanied by a growing number of dissenting votes. Bernanke's critics say that with his policy of cheap money -- in other words, recurring rate reductions -- he in fact helped fuel the inflation problem he is now trying to combat....

Officials with the International Monetary Fund (IMF) have informed Bernanke about a plan that would have been unheard-of in the past: a general examination of the US financial system. The IMF's board of directors has ruled that a so-called Financial Sector Assessment Program (FSAP) is to be carried out in the United States. It is nothing less than an X-ray of the entire US financial system.

As part of the assessment, the Fed, the Securities and Exchange Commission (SEC), the major investment banks, mortgage banks and hedge funds will be asked to hand over confidential documents to the IMF team. They will be required to answer the questions they are asked during interviews. Their databases will be subjected to so-called stress tests -- worst-case scenarios designed to simulate the broader effects of failures of other major financial institutions or a continuing decline of the dollar.

Under its bylaws, the IMF is charged with the supervision of the international monetary system. Roughly two-thirds of IMF members -- but never the United States -- have already endured this painful procedure.

For seven years, US President George W. Bush refused to allow the IMF to conduct its assessment. Even now, he has only given the IMF board his consent under one important condition. The review can begin in Bush's last year in office, but it may not be completed until he has left the White House. This is bad news for the Fed chairman.

When the final report on the risks of the US financial system is released in 2010 -- and it is likely to cause a stir internationally -- only one of the people in positions of responsiblity today will still be in office: Ben Bernanke

- from calculated risk/derspiegel

DOWN AMERICA DOWN

I MADE OVER 6,000 TODAY BUYING SWISS FRANCS ON SUNDAY!!!!! AND DOWN AMERICA DOWN, DOWN:

-FED IS IN TALKS WITH CARLYLE GROUP(IE THE GROUP WHOSE ADVISORS AND BANKERS CONSIST OF GEORGE HW BUSH, GEORGE W BUSH, JOHN MAJOR, ARTHUR LEVITT, THE GOTLIEBS, THE BIN LADENS) TO HAVE THEM BUY OUT BANKS THAT NEED TO BE RECAPITALIZED IN THE UNITED STATES. OTHERWISE, FOREIGN ENTITIES COULD POTENTIALLY OWN THESE BROKEN BANKS(THEY ARE THAT DESPERATE)
-QATARI SWF BUYS 10% OF BARCLAYS BANK
-WORST JUNE SINCE THE GREAT DEPRESSION
-WILL THE FED HAVE THE BALLS TO RAISE INTEREST RATES OR WILL WE SUFFER FROM OUT OF CONTROL INFLATION
-THE ECB IS GOING TO RAISE ITS RATES TO DAMPEN INFLATION - GET READY FOR 150 DOLLAR BARREL OF OIL AS THE EURO WILL DECREASE RELATIVE TO THE DOLLAR!!

THE STOCK MARKET IS GOING TO 9,000 - BUT, GET READY FOR A MAJOR ONE DAY STOCK MARKET CRASH SOON AS THE EQUITY MARKETS HAVE NOT EVEN COME CLOSE TO THE KIND OF CARNAGE AND DEVALUATION THAT HAS OCCURED IN THE CREDIT MARKETS. EQUITY MARKETS WAY BEHIND. THERE WILL BE A MASSIVE DISLOCATION.

THE BUBBLES POPPING NOW ARE NOT JUST BUSH BUBBLES - THEY ARE BUBBLES FROM THE 90S TOO. THIS IS LIKE THE 'BIG ONE' YOU ALWAYS HEAR ABOUT IN REFERENCE TO EARTH QUAKES.

Reading with Youtube

"Thus, among works of music, the Well-Tempered Clavier and the Concerto for the Left Hand (which, as will become aooarent, are distinguished by the modes of acquisition and consumption which they presuppose), are opposed to the Strauss waltzes and the Saber Dance, pieces which are are devalued either by belonging to a lower genre ('light music') or by their popularization (since the dialectic of distinction and pretension designates as devalued 'middle-brow' art those legitimate works which become 'popularized'), just as, in the world of song, Georges Brassens and Leo Ferre are opposed to Georges Guetary and Petula CLark, these differences corresponding in each case to differences in educational capital." Bourdieu, Distinction - p. 14.

Glenn Gould, JS Bach - Well-Tempered Clavier


Leon Fleisher et al, Maurice Ravel - Concerto for the Left Hand


Wiener Philharmoniker, Johann Strauss - The Blue Danube


Berlin Philharmoniker, Aram Khachaturian - Sabre Dance from Gayane


George Brassens - La Mauvaise Reputation


Léo Ferré - "La Solitude"


Georges Guetary - "Le berger Mexicain"


Petula Clark - "Downtown"

Movement for the Emancipation of the Niger River Delta

They are not on the State Department's List of terrorist sponsors. I am going to give them money.

Nigeria pipeline explosion.

Who wants to take a trip?

Note: Author is a supporter of the Movement for the Emancipation of the Niger River Delta.

U.S. to the World: "We Have No Idea what Isreal Is Up to But it Sure Looks Like They're Going to Bomb Someone We'd Like to Bomb Soon"

Note the odd ambiguity in the article: Israel's military exercise "seemed directed at Iran," "appeared to be an effort to develop the military’s capacity to carry out long-range strikes and to demonstrate the seriousness with which Israel views Iran’s nuclear program. “There’s a lot of signaling going on at different levels,” one Pentagon official said. Are we really to believe that the United States of America is just guessing what's going on in Israel? This from an administration that just sent its secretary of state to Israel this week, received its prime minister earlier this month, gives $3 billion annually to Israeli defense, and which has been off-and-on planning a military strike against Iran for the past two years? Let's hope that the ongoing Israeli talks with Syria and Lebanon are not just distractions for what would be a devastatingly huge mistake.

Money.

Oil will fall. It will bring with it railroad companies, coal companies, and airlines will rise considerably.

Media Trends.

A trend in television - which will soon become ubiquitous - is for people on television to say what people think but can't say for whatever reason. You may think that Howard Stern pioneered this - but that is not the case - in actuality he was really the pioneer of taking entertainment to a whole new level of filth.

I am talking about news shows, culture, and political shows saying what people think but can not say. Keith Olbermann is the one who started this trend with his outright radical and indignation laced show. Here is CNN's version: "Ronald Martin's Sound-Off"

It is based on the evidence that on cable people watch shows which reinforce their own existing views. This has been known since O'Reily. But it is expanded in that these new shows are adaptations whereby the hosts say the things that not everyone can say.

Of course, in the end, it means people will feel it is ok to say them. The media sets the norm and thus the law.

Money.

Short Railroad companies. Buy Cattle Futures. Buy CER Carbon Futures. Keep Shorting I-Banks. This whole industry is full of conformists; they can't see the future.

Oh and get ready for a major market crash in the next two-three months.

The Decline

This is perfectly symptomatic of America's decline. In America, unlike Dubai, this building would be thought ridiculous!



"Remember way back last May when we talked about the twirling tower that seemed, well, off the wall? Surprise, surprise, it is set to start construction in Dubai this month.

Each of the 59 floors of the tower will be able to rotate independently of each other, and in between them will be wind turbines to generate all the power needed to run the tower, plus, apparently, several others. The tower is expected to generate 10 times the power it needs through solar panels on the roof and 48 wind turbines, each of which are expected to generate as much as 0.3 megawatts of electricity, creating an estimated 1,200,000 kilowatt hours of energy annually. These are some seriously big numbers…and we’ll see how they pan out.

As for the construction, the floors will be made of 12 individual units all created in a factory and spit out fully complete, with plumbing, electrical, air conditioning and everything else in place. The floors will then be fitted to a concrete tower core According to architect David Fisher, designer of the building, this construction will make it highly earthquake resistant, as well as just plain neat to watch as folks push the button that makes their floor spin."

There is a Policeman Inside all our heads, he Must be Destroyed

A good friend recently lent me several documentary productions by Adam Curtis, and I must say I've been enjoying them. The two I've watched so far have been The Mayfair Set and The Century of the Self. The former documents "Four Stories on the Rise of Business and the Decline of Political Power" mostly in England, but in the US as well. The latter looks at "how those in power have used Freud's theories to try and control the dangerous crowd in an age of mass democracy."

Curtis' method is quite elegant; he focuses in many cases on the actions and activities of individuals, but at no point does his narrative collapse the historical events he is analyzing into hagiography or conspiracy (for the exact opposite of this approach, see Alex Jones' innumerable conspiracy-mongering films). Especially in the Mayfair Set, where the story is really about the rise of Finance Capital and what David Harvey would call "Fictitious Capital" and "Accumulation by Dispossession," the narrative uses its individual players and actors to paint what is ultimately a structural critique. The Century of the Self starts earlier, with the prewar period, but chronicles roughly the same late-20th century arc to examine the rise of psychology and psychoanalysis in marketing and political governance. Here he uses the twin figures of Edward Bernays (Freud's nephew) and Anna Freud as placeholders for the influence of Freud in capitalism and the state, respectively.

While excellent pieces of criticism on their own, watching the two together creates a powerful interplay; one could conceivably alternate between episodes of the two (4 episodes each) following two sides of much the same story. Psychoanalysis and political economy dovetail into one another, the former providing the symbolic kernel within the latter's material effects. For all of the seeming negativity, Curtis does not let the narratives fall into the fatalistic despondency of the current left; there is no ressentiment of "the masses" or characterization of people as gullible, stupid, or the like. In Curtis' picture, strong structural forces roll out changes in subtle and slow ways, and even the blameworthy in his view can hardly take much of the credit.

In the self-obstructing fashion of the documentary, Curtis lays out his critiques but cannot or does not 'document' ways out or possible futures and alternatives. As critic he is not to be blamed for this, I suppose. I'm hoping to watch The Take later this week, made famous to me by our Latin American graduate student friends, which seems to take up on the stage set by Curtis, but looks at at least putative types of resistance to the millstone of our recent 'history'.

Dog bites man, or, Thomas Friedman upholds privilege in the face of starvation and political injustice

From Friedman's NYT column today -- after a vivid description of Egypt's terrible living conditions, this amazing paragraph:

But Egypt today is one country with two systems. Along the Alexandria highway, we pass one gated community filled with McMansions — with names like “Moon Valley,” “Hyde Park” and “Beverly Hills.” One has a 99-hole golf complex. They are populated by Egyptians who have worked hard and made money in the gulf or who are part of the globalized business class here. They are entitled to their McMansions as much as Americans. But the energy and water implications of all these new gated communities is also fueling the soaring global demand.

May I just point out how absurd (not to mention callous) it is to talk with such confidence about what people are "entitled to" when you've spent your column explaining that the populace has no political rights.

This kind of thing makes one yearn for a day when neoliberal twits like this get expropriated.

Attacking Iran

The recent unusually strong statements of a senior Israeli official have raised the prospect of an attack on Iran. I invite you to read comments made by ex-German Foreign Minister and geopolitical thinker Joschka Fischer here.