Friday, June 15, 2018

Review "On Grand Strategy" by John Lewis Gaddis

Sydney M. Williams

Burrowing into Books
Reviews of Selective Readings
                                                                                                                                      June 15, 2018
“On Grand Strategy”
John Lewis Gaddis

Grand Strategy:The alignment of potentially infinite aspirations
 with necessarily limited capabilities.

This, then, is a book about the ‘mental’ Hellespont that divide such leadership,
on one shore, from common sense on the other. There ought to be free and 
frequent crossings between them, for it’s only with such exchanges that grand
strategies – alignments of means with ends – become possible.”
                                                                                                            John Lewis Gaddis
                                                                                                            On Grand Strategies

This is a short book (313 pages), with a large sweep of (mostly) Western Civilization, especially of its military leaders and observers. Professor Gaddis is the Robert A. Lovett Professor of Military and Naval History at Yale. As well, the book is, as Victor Davis Hanson wrote in a review for The New York Times, “…a thoughtful; validation of the liberal arts, an argument for literature over social science, an engaging reflection on university education and some timely advice for Americans that lasting victory comes from winning what you can rather than all that you want.” 

In ten essays, Professor Gaddis carries us from Xerxes, Pericles and Octavian to the Founders, Napoleon and Bismarck. He juxtaposes Augustine with Machiavelli, Elizabeth I with Philip II and Clausewitz with Tolstoy. He focuses on three U.S. Presidents: Lincoln, Wilson and Franklin Roosevelt, showing us why Lincoln and FDR were successful, while Wilson failed to realize his dream “to make the world safe for Democracy.”

He cites maxims. Isaiah Berlin quoting the Greek poet Archilochus of Paros: “The fox knows many things, but the hedgehog knows one big thing.” Augustine: “The higher glory is to stay war itself with a word, than to slay men with a sword.” Machiavelli: “…a man who wants to make a profession of good in all regards must come to ruin among so many who are not good.” Clausewitz, author of the unfinished On War: “war…must be subordinate to politics and therefore to policy.”  F. Scott Fitzgerald, who said brilliance is the ability “to hold opposing ideas in [one’s]mind, while retaining the ability to function.” 

Professor Gaddis instructs us on Thucydides, who wrote of the distinction between resemblance and reflection – between patterns surviving across time and repetitions degraded by time. George Canning – the late 18th-early 19thCentury British statesman – who prophesied that the “new” world would one day correct the imbalances of the “old” world. Edmund Burke on proportionality, which leads to the conflict between what we would like to do set against what we can do. He writes of Sun Tzu, the 5thCentury BC Chinese author of The Art of War, who “sets forth principles, selected for validity across time and space, and then connects them to practice, bound by time and space.” He describes Napoleon at Moscow being like the dog that caught the car. What do I do now? Lincoln who told us that power and liberty can co-exist. And 92-year-old Oliver Wendell Holmes who said of newly elected President Franklin Roosevelt: “A second class intellect. But a first-class temperament.”

This is a book one can read not only to learn of the successes and failures of famous and infamous military strategists, but one from which we can better understand today’s polarized politics. Isaiah Berlin, the Latvian born British historian and a hero to Professor Gaddis, came to see (in the 1950s) politics as a polarity, with “inequivalent” concepts of liberty at either end. “One,” Professor Gaddis writes, “offered freedom from the need to make choices by yielding them to some higher authority…The other the freedom to make such choices.” Taken to extremes, the first leads to tyranny, the second to anarchy.

One can also derive life-lessons, for we are all strategists (though mostly not grand), knowingly or unknowingly, in all the decisions and choices we make. We alternate between the focused but myopic hedgehog and the versatile but peripheral fox. We would be wise to periodically step back and conduct self-analysis. We may find ourselves changing from one animal to the other, as conditions warrant, so to lead more balanced, productive lives.

In an interview last Month with Brian Lamb on C-Span, Professor Gaddis spoke of the summer odysseys into small-town America he asks of his students: “…It is just our small effort to try to break down some of the isolation that somehow the elite universities have locked themselves into, the bubbles into which they have placed themselves.” His is a voice of reason. With many of us concerned as to what is happening on college campuses, Professor Gaddis restores a measure of confidence. However, since most of us cannot take his class, we can, at least, do the next best thing – read his book.

Monday, June 4, 2018

"Confessions & Thoughts from a Descendant of Slave Owners"

Sydney M. Williams

Essay from Essex
“Confessions & Thoughts from a Descendant of Slave Owners”
June 4, 2018

If scientists can be confident of anything, it is that whatever we currently believe
about the genetic nature of differences among populations is most likely wrong.”
                                                                                                David Reich
                                                                                                Professor of Genetics, Harvard University
                                                                                                The New York Times, March 23, 2018

I am descended from slave owners. In 1796, at age 26, Joseph Washington (my great-great-great grandfather), left Southampton County, Virginia and headed west. (His great-great grandfather John Washington had emigrated from England to Surry City, Virginia in 1655.)Arriving in Robertson County, Tennessee that same year, Joseph bought 60 acres from Hugh Lewis for $360.00, near Cedar Hill. He brought with him slaves, some of whose descendants still live in the area. Joseph died in 1848 and left the farm – by then larger and called Wessyngton – to his son, George Augustine Washington. The latter added land, and the farm became – both before and after the Civil War – the largest producer of Dark Fire-cured tobacco in the United States. George was the last owner of slaves, dying in 1892. Ownership of the main house, barns and some of the land went to George’s son Joseph Edwin Washington. Joseph was a planter, but also a lawyer and politician. He served ten years in Congress, 1887-1897. After Edwin died in 1915, the farm was operated by his widow, Mary Bolling Kemp Washington. (Their second daughter Elizabeth Wyndham Washington [1888-1962] was my maternal grandmother.) In 1930, George Augustine Washington II, the bachelor son of Joseph and Mary, left his law practice in New York City and, at age 51, returned to Wessyngton to help during the Depression and War years. He remained there until his death in 1964. The place was then owned by eight first cousins, one of whom was my mother. It was sold in 1983. Completing the circle:in the two summers before it was sold, my oldest son worked on the farm. He worked for “Dit” Terry, whose ancestors had travelled to Tennessee as slaves with Joseph Washington in 1796.

I am also descended from indentured servants. Indentured servants were not slaves, but their economic well-being and their social status was far below the merchants who paid their passage to America. Once in this country, they had to work for four to seven years to pay back passage, room and board. Most of us whose American ancestry can be traced back a couple of hundred years could say the same. This is not to impugn guilt, victimhood, privilege or unfairness. We are who we are, and I believe the Bible is wrong when in Exodus it is written: “…for I the Lord your God am a jealous God, visiting the iniquity of the fathers on the children to the third and fourth generation…” Our fathers and mothers, slaves and slave owners, lived in different times. For most of human history, slavery was a fact of life. It was always morally wrong, but it always existed and still does, in too many places, despite being out-lawed by the United Nations on December 2, 1949. We, the living, should be judged by the standards of our time, for who we are, our character – our honor, civility, empathy and respect for others.

The truth is that slavery was ubiquitous throughout the Colonies, as it was throughout most of the world. While it was far more common in the South, it extended throughout the North. Many of our edifices were built with slave labor, like parts of the U.S. Capitol and the White House in Washington; Trinity Church in New York; many of the buildings on the campuses of the University of Virginia in Charlottesville and UNC at Chapel Hill, and Mount Vernon, Monticello and Montpelier (James Madison’s home). Should they be destroyed as reminders of an evil legacy, or should they be seen as historical markers and memorials to their owners and to the enslaved men and women who built them? It has become faddish to redact memories of our imperfect past, like the removing or destroying of statues of Confederate generals. I can understand not celebrating those who defended slavery, but I also believe we must confront our past honestly. We must acknowledge the good and the bad. America is not perfect, just as none of us are, but no nation has accomplished the good we have. Tearing down statues does not alter what happened. Ignorance of one’s past is not enlightenment. So, why are we so intent on erasing the past? Is it to atone for the sins of our forefathers? Or, do we believe that if we see no evil there is (or was) no evil – that blindfolds provide moral courage and comfort? We can run, but we cannot hide. Providing safe places may offer temporary reprieve, but they do not address historical facts. 

In recent years, group think has replaced individual thought. Its carrier is identity politics, the progeny of affirmative action grown large and reckless. It is manifested in such groups as Women’s March, Black Lives Matter and in those groups whose members constitute a single sex, race ethnicity or religion. They are like the fraternities and sororities of my day, in that they appeal to like-minded people, but with a self-proclaimed mission riddled with arrogance and bounded by ignorance. They are an anathema to free and independent thought. Ironically, it is not diversity in substance they call for but diversity in appearance. They threaten the fact that success is individual – a function of ability, aspiration and a willingness to work hard and smart. We are not all equal and never can be. If I stand next to LeBron James would anyone doubt who was the better physical specimen? If I were to match wits with Neil deGrasse Tyson would there be any question as to who was the smartest? If you were to see me alongside George Clooney would anyone think I was the more attractive? We should be judged for the individual we are, not by the group into which we have been placed.

It is condescending to treat as victims those whose race, sex or creed are unlike one’s own. It is proclaiming that success is not one’s own – that it was attributable to outside help. Certainly, parents, teachers and mentors guide us, but we are not widgets to be stamped out on an assembly line, numbered and compartmentalized. We are individuals, hopefully living civilly and respectfully in communities. One may be a better athlete, another a better scholar and a third a better artist. What we have in common are the opportunities that we, as Americans, have – the right to speak out, to succeed or to fail and to know that we are all equal before the law. 

What truly separates us is not our racial or religious differences, but our ideas. Just as books should be judged by their content, not their covers, we should be judged by our character, not our sex, religion or race. Most of us have simple, common goals: We want to live peacefully and securely; we want work that provides for our physical needs, as well as for the dignity that satisfies our soul; we want a good education for our children; we want to be loved and respected. Where we differ is in the means to achieve those goals. Some prefer to emphasize the person, others the state. Both can lead to extremism – anarchy or socialism. We should share ideas, to find mutually acceptable solutions. Compromise is not a four-letter word. We are one nation; we should be able to accommodate all people and ideas.

It has become common to ignore personal responsibility, to blame failures on victimhood – that “white privilege” has disadvantaged those of different cultures. Yet, among all nations, America has the best history of accommodating cultural diversity. In a recent Wall Street Journal, Jason Willick interviewed James Davison Hunter, a professor of religion and culture at the University of Virginia: “It is not perfect(our cultural diversity) and certainly not linear, and certainly race has been one of those elements of our past and present that resists that kind of absorption. But look at Catholics, Jews, Mormons. My hope is that we can continue to absorb diversity. But it’s certainly being tested right now.” There is no question it is being tested, in part because of politicians who place us into identifiable and easily accessed groups. But, time is on the side of assimilation. Consider how far we have come from a segregated south in the 1950s. Look at the composition of schools and colleges today versus sixty years ago – the numbers of women, Asians, Hispanics and African-Americans. Consider marriage. According to a PEW Research study, the number of newlyweds married to a spouse of a different race or ethnicity has risen from 3% in 1957 to 17% in 2015. Progress may be slow, but there has been progress.

Slavery once existed in this country, as it did in most parts of the world, and it still does under the euphemism “human trafficking” in parts of Africa, the Middle East, Latin America and Asia. It is [and was] not limited to African-Americans; though slaves in this country were overwhelmingly from Africa. But the fact that it was both ubiquitous and accepted does not (and did not) justify it. There is no question that it was sinful – in fact, there is no crime more morally outrageous than enslavement – but we cannot let that fact consume our conscience today. We live in a different age. We have the advantage of being able to know the past. We should acknowledge and honor those who fought against slavery, from rebels like Nat Turner to the fictional Elizabeth who crossed the ice-covered Ohio River to freedom. We should remember and honor those who fought and died in the Civil War and the abolitionists who marched for freedom. We should think of and honor African-American heroes, like Frederick Douglas, Booker T. Washington and Martin Luther King. There are African-Americans on both sides of the political aisle; we should welcome their intellectual diversity.

Treating humans as chattel is evil incarnate. But most who fought on the side of the south had never been beneficiaries of slave ownership. They were too poor and too ignorant to understand the implications of slavery, other than their repugnant belief that because they were White, they were superior. Their officers told them they were fighting for states’ rights and against an invading army, which they were. But, their leaders romanticized an idealized, agrarian world – a world whose economy was predicated on the institution of slavery. Essentially, it was economics that was behind the South’s decision to secede from the Union. (Thomas Jefferson, did not endorse slavery, but Monticello depended on it.) Most in the South, it is my guess, gave little thought to the demeaning nature of bondage, but ignorance does not excuse bad behavior. Enslaving people and creating dependency is always wrong. It diminishes the human spirit and ignores the dignity and celebration freedom brings. 

The issue of race is complex. The “Jim Crow” years and the segregation policies that followed hurt assimilation. The Civil Rights movement brought the benefits of integration and affirmative action, but it also fostered a sense of dependency and victimhood, something politicians have since milked to their advantage. As an aside, one cannot help but get a sense that issues, like immigration, guns, abortion and race are ones that many politicians do not want to resolve. They serve as rallying points for those who prefer polarized views. The truth is, we all have weaknesses as well as strengths. The key to individual success is to minimize the former and emphasize the latter. As Americans, we are part of at fortunate community that comprises the greatest experiment in liberalism and self-government the world has ever known. As Abraham Lincoln said at Gettysburg a hundred and fifty-five years ago, we lucky people live under a government “of the people, by the people, for the people.” We cannot let that ideal perish. We should be civil in our dealings with others. We should live within the law, and if we break it we should be punished. But, we should not stigmatize anyone for what or how their ancestors lived. We should be responsible for our own actions, including mistakes. In our relations with one another, it is sincerity that is wanted, not sanctimony; honesty, not hypocrisy; personal pleasantries, not perfidious pieties.

As Americans, we are advantaged in that almost all of us (or our ancestors) came from somewhere else. Greeks, Poles, Chinese, Persians, English, Spanish, Japanese, Italians and others have national heritages that stretch back centuries. Apart from Native Americans, we don’t have that, as a sense of pride or as an encumbrance. Even during our colonial days, we were never subject to imperialism, as were so many, especially in parts of Africa, the Middle East and Asia. We are Americans. We are truly a melting pot, a composite of rugged individuals. With each generation we have become more multiracial. In time, as my paternal grandmother used to say, we will all be of the same color. Diversity, then, will be manifested in ideas, not the pigments of our skins.

None of us just appeared. Eve did not emerge from Adam’s rib. We all descend from those who came before. Humans have been around for about 60,000 years. Yet, if we just go back ten generations – about 300 years – we each descend from 1024 individuals. I doubt there is a man or woman alive who could name all those from whom they descend going back just 200 years. Because of the large numbers of ancestors from whom we each descend, we must all be related. Mathematically, it cannot be otherwise. The population of the world in 1700 was about 650 million, and there are seven billion of us today. An interest in ancestry has become more common. Almost 12 million people have had their DNA tested. (Last year the number tested doubled.) Anecdotal evidence suggests backgrounds are more diverse (and more integrated) than had been previously thought. Given the geometric nature of our ancestors that should not surprise.

One example among thousands:On a farm in Tennessee, around 1831, my great-great grandfather George Augustine Washington, at age 16, fathered a son, Granville Washington. He was born to a young, 15-year-old woman named Fanny, a slave on George’s father’s farmGranville, became a house slave and later, as a free man, valet to his biological father. After the Civil War, Granville went to Nashville where he married and had two sons. Later he returned to the farm and died in 1898. Granville’s story and that of other slaves on that Tennessee farm and their descendants are described by John F. Baker, Jr., a descendant of slaves, in a book The Washington’s of Wessyngton Plantation, published by Simon & Schuster in 2009. The book traces his family back ten generations. It is sobering to realize that some of his ancestors were enslaved longer than the 153 years they have been free. And I am proud to acknowledge that because of two young people, in a passionate moment 188 years ago, John Baker and I are cousins with a common heritage.


Thursday, May 31, 2018

The Month That Was - May 2018

Sydney M. Williams

The Month That Was – May 2018
May 31, 2018

As full as spirit as the month of May,
And as gorgeous as the sun in midsummer.”
                                                                                                Henry IV, Part I
                                                                                                Williams Shakespeare

What a month! The anti-Trump venom persisted…and worsened. It came into sharper focus with the news that the FBI, under the Obama Administration, had inserted Stefan Halper as a spy (or informant, as the New York Times euphemistically called him) into the Trump campaign – ‘Operation Crossfire,’ as it was dubbed – “benign information gathering,” as James Clapper put it[1]. This is in addition to the dubiously obtained FISA warrants to surveil the Trump organization. Not since Lyndon Johnson spied on Goldwater in 1964 has the FBI been so blatantly used for political purposes. But, where is the outrage over the use of government to silence the opposition? Incredibly (and fortunately), it is having little effect on Mr. Trump’s policies here or abroad – like the tax bill, deregulation, North Korea, Jerusalem and Iran

As for the latter, the EU is upset over Mr. Trump’s failure to recertify the Iran nuclear deal. Only a people who viewed Mr. Obama’s Iran deal through the commercial lens of their largest companies would be so unconcerned with a rogue nation that has used its new-found wealth to fund militarization and terrorism. Only a people protected by their big brother in North America would not fret about the nuclear ambitions of Iran.(Despite the EU having a slightly larger economy, the U.S. spends more than two and a half times what the EU does on defenseand a big slice of that spending is in defense of Europe.)


Consider the month’s news: The spiking of the Iran nuclear deal (a deal which Mr. Obama realized the Senate would never support); setting a date (possibly) to meet with Kim Jong-un, and re-locating (finally) the U.S. Embassy in Israel from Tel Aviv to Jerusalem. Curiously, but not surprisingly, the Left derided all three decisions. Nancy Pelosi criticized the President for meeting with Mr. Kim and then criticized him for renegotiating the terms. The movement of the U.S. Embassy to Jerusalem was accomplished, but both Iran (financial sanctions and a new deal) and North Korea (denuclearization of the Peninsula) remain works in progress. The Left is in denial: How does an outsider, a boorish, unprincipled ignoramus, with dyed-blonde hair, accomplish what sanctimonious political elites could not? 

North Korea released three American hostages and blew up tunnels at its Punggye-ri testing site. (Admittedly, that site was probably unusable.) To protest the opening of the U.S. Embassy, Hamas (and Iran) showed their true colors, sending (paid) demonstrators to their deaths in Gaza. Iran fired rockets at Israel’s Golan Heights from bases in Syria, which were knocked down by Israel’s superior technology. Later, a number of Iranian bases in Syria were destroyed by Israel’s air force. Trade wars spurted, spluttered and spurted. Republicans in Congress took issue with Mr. Trump’s decision to rescue China’s telecom company ZTE. But, we must remember that Mr. Trump, like the fox to Congress’s hedgehog, is playing multiple hands with China – North Korea, relations with Iran, a laser attack from an air base in Djibouti and military bases in the South China Sea. Congress, playing to special interests and the media, like the hedgehog, takes on one issue at a time.

Nicolas Maduro’s re-election in Venezuela was fore-ordained and will worsen the condition of its people. Following imposition of new sanctions, the U.S. Envoy in Caracas was expelled. In a surprise, Iraq’s Muqtada al-Sadr’s coalition was the big winner in his country’s Parliamentary elections. Mr. al-Sadr was strongly anti-American during the 2003 invasion but is now strongly anti-Iran. Shia terrorist groups Hezbollah and Amal were the big winners in Lebanon’s election. Ninety-two-year-old former Malaysian Prime Minister Mahathir Mohamad defeated his former mentee, current Prime Minister Najib Razak. The latter has been embroiled in corruption charges. This was the first defeat for the Barisan Nasional coalition since Malaysia was untethered from Great Britain in 1957. In Italy, President Sergio Mattarella’s decision to reject the attempt of two rival populist parties – 5-Star Movement and the League – to form a government was applauded in Brussels and y the liberal media, but it risks democracy in the Eurozone’s third largest economy. In a decision that could have come from Lewis Carroll, Syria was named president of the United Nation’s Conference on Disarmament. For virtually the entire month Hawaii’s Kilaueu’s volcano on the Big Island has been spilling lava, releasing toxic gasses and erupting molten rocks. 


The latest school shootings in Texas, in which ten people died, means we must re-think our response to mass gun violence. We are living with an epidemic that is expanding geometrically. The Left says curtail guns. The Right insists on adherence to the 2ndAmendment. We must think outside the box. Stricter rules regarding gun-ownership make sense and I see no civilian need for automatic assault rifles. But guns have always been common. Our home in the small New Hampshire town where I grew up was likely the only one without weapons, yet even gun accidents were rare. Personally, I am not a fan of guns; nevertheless, it is not the weapon that is at fault. It is the individual who pulls the trigger.

Wikipedia lists school and college shootings by decade. While perhaps not precisely accurate, the numbers suggest a trend. In the 1940s, there were eight such shootings, with eleven dead. In the 1950s, the number doubled to sixteen, with fourteen dead. In the 1960s, nineteen shootings left forty-four dead. In the 1970s, there were thirty-one attacks, leaving thirty-seven dead. In the 1980s, that rose to forty-one, with fifty-one losing their lives. In the 1990s, sixty-six shootings left ninety-three dead. In the 2000s, sixty-five shootings caused one hundred and eleven to die. And, in the 2010s, just through 2014, there have been 93 shootings, with ninety-one dead. If we take this contagion seriously, as we must, Congress will have to consider, besides gun laws, the role of mental health and the culture of violence that permeates our lives, from Hollywood to rock music, video games and late-night talk shows. Families and communities must be unafraid to call-out mental issues where they exist. Political correctness should be abandoned. Parents and schools must re-focus on old-fashioned rules: civility, respect, manners and decency. 

During the month Connecticut joined eleven states and the District of Columbia in approving a National Popular Vote compact, which would require each participating state to allocate its electors to the winner of the national popular vote, regardless of how its citizens voted. What they want: eliminate the Electoral College. Connecticut’s vote, hasty and unwise, was taken in response to the 2016 election. Keep in mind, Mrs. Clinton’s popular victory was made possible because of only two states – New York and California. What is being implied (but unsaid) is that smaller states don’t count. Ironically, at the Constitutional Convention in 1787, the author of the Great Compromise, which gave Congress its bicameral structure, was Connecticut’s Roger Sherman. The Compromise ensured that small states would get equal representation in the Senate, while the House would reflect population. It is one of the fundamental elements in the checks and balances that have allowed our government to survive over two hundred years. “I do not, gentlemen, trust you,” said Gunning Bedford of Delaware. “If you possess the power, the abuse of it could not be checked; and what then would prevent you from exercising it to our destruction?” Wiser heads than those in Connecticut, I hope, will prevail.

In a case that pitted the National Collegiate Athletic Association against the State of New Jersey, the Supreme Court, in a 6-3 decision, struck down a 1992 law, the Professional and Amateur Sports Protection Act, which prohibited states from authorizing gambling. The federalist in me said that was a good thing, individual states should make such decisions. The financier in me said this will help states in economic distress. However, the moralist in me said this was a terrible decision. It will encourage gambling – the belief that riches can come from little or no effort. Gambling is addictive and encourages bad behavior. It can lead to depression, criminal activities and bankruptcy. The National Council on Problem Gambling claims that 16% of Americans gamble at least once a week. Like the lottery, it will provide funds to states but do so via a regressive tax. If not accompanied by fiscal restraint, it will do nothing to reduce deficits. 

Elsewhere, domestically, Gina Haspel was confirmed as the first woman Director of the CIA. Midterm and state elections are under way. Primaries and conventions were held in Connecticut, Indiana, Ohio, West Virginia, Idaho, Nebraska, Oregon, Pennsylvania, Arkansas, Georgia, Kentucky and Texas. 


Stocks meandered, on light volume, with diminished volatility. For the month, the DJIA closed up 2%. It is the bond market where attention should be paid. James Grant, in the May 4 issue of “Grant’s Interest Rate Observer,” wrote: “For the first time since 1981, Treasuries (U.S.) have delivered a negative, inflation adjusted return over the trailing three years.” The U.S. bull market in bonds began in September 1981 when the yield on the Ten-year reached 15.68%. It troughed two years ago (thirty-five years later), with the yield at 1.39%. It closed this month at 2.8%. Like any market, prices (and yields) don’t go in straight lines, but one can infer whether one is in a long-term bear or bull market. My conclusion is that a bear market in bonds began two years ago; but tops and bottoms of markets can extend across months, if not years. Central banks around the world have become (or are becoming) less expansionary, but you wouldn’t know it when looking at yields on some European bonds. The yield on the U.S. Two-year, at 2.4%, exceeds the yield on government Ten-year bonds in Germany, France, the UK and Spain. I find it hard to believe that Europe, with its slower economic growth and more socialist ways, is more credit worthy than the U.S. However, that spread differential – undeserved, in my opinion – has strengthened the Dollar and could cause U.S.  Treasury yields to moderate in the near term, but I suspect that in ten years yields will be higher. 

The concern for stocks is liquidity. Increasingly, trading is dominated by machines: High Frequency Traders (HFTs), index funds and ETFs, where individual company fundamentals matter less than asset allocation decisions. The floor of the NYSE is almost fully automated, not dissimilar to the NASDAQ. The question, to which no one has an answer: what happens when a mini flash-crash turns into a full-blown panic? Ultimately fundamentals would carry the day, but the short term could be scary. Markets are based on faith, trust and confidence – characteristics of people, not machines. One answer: dividends – the ultimate return on stocks. And the IRS could treat dividends as returns of capital, which is what they are. 

The month also saw further declines in the Argentina Peso and the Turkish Lira. Currency depreciation is a concern and reflects a lack of confidence in government and its monetary policy. (The Venezuela Bolivar has fallen 90%, since Maduro came to power in April 2013.) To stem the decline, Argentina’s central bank raised rates to 40%, while the Turkish Central Bank raised its lending rate to 16.5%. The price of crude oil was volatile but flat on the month, but still on an upward path that began in January 2016. The Dollar nudged higher, driven by higher yields on U.S. Treasuries, and Bitcoins were lower by about 20%. Investment manager AllianceBernstein announced a move from Manhattan to Nashville, following other money managers, like PIMCO, Charles Schwab and Fidelity, who are opening offices in Austin, Phoenix, Denver and Dallas. High state and local taxes (and regulatory practices) arewatched by businesses. The second revision to first quarter U.S. GDP showed the economy gaining 2.2 percent.


The number of births in the U.S., according to the National Center for Health Statistics, dropped by two percent last year, to 60.2 for every 1000 women between the ages of 15 to 44 – the lowest in forty years, giving the U.S. a fertility rate of 1.76. We were at 2.12 in 2007. While there are those who are not concerned about these numbers, lower birth rates reflect a pessimistic view of the future and imperil economic growth. Pope Francis, straying from his spiritual responsibilities, declared that financial derivatives, like credit default swaps are “amoral” and “a ticking time bomb.” This is a man not particularly fond of capitalism, which he has described as “terrorism against humanity.” All Catholic Bishops in Chile offered to resign following revelations of a sex abuse scandal. President Trump announced he wanted to form a fifth branch of the military – a space force. UK reporter Tommy Robinson was jailed on breach of peace charges in Leeds for filming Muslims charged with rape and pedophilia. Missouri Governor, Republican Eric Greitens resigned over a sex scandal. ABC cancelled Roseanne Barr’s show because of a racist Tweet about Valerie Jarret. Ms. Barr blamed Ambien. Ms. Jarrett blamed President Trump. Meghan Markle married her Prince.

Speaking at a tech conference, President Obama said, “I didn’t have scandals, which seems like it shouldn’t be something to brag about.” Has he forgotten Lois Lerner at the IRS, targeting conservatives, or letting Nakoula Basseley Nakoula take the fall for the Benghazi attack that caused the death of Ambassador Chris Stevens?  Does he no longer remember Uranium One or ‘Fast and Furious?’ Ireland voted to allow women to have abortions in the first twelve weeks of pregnancy. While I agree that women should have control over their bodies, there was something unseemly about young women gloating over receiving permission to take a life.  What about personal responsibility? A male student in an Indiana high school opened fire before being tackled by seventh-grade science teacher Jason Seaman. Mr. Seaman was wounded, as was one other student. But his action prevented more casualties.


In sports, “Justify” won the Kentucky Derby and the Preakness, both on sloppy tracks. He will head to New York for the Belmont Stakes and a chance at the Triple Crown. The Golden Knights (Las Vegas) and the Capitals (Washington) will play for the Stanley Cup, and the NBA Championship will pit the Golden State Warriors (Oakland) against the Cleveland Cavaliers.

Death took Tom Wolfe, best known for his novel that captured the ‘80s, The Bonfire of the Vanities. He died at 88. Philip Roth – author of Goodbye Columbusand Portnoy’s Complaint– died at 85. Professor Bernard Lewis, one of the great scholars of Islam, died at 101. Richard Pipes, the leading intellectual opponent of d├ętente and an escapee from Poland in 1946, died at 94. Alan Bean, the fourth man to walk on the moon died at 86. And I lost a good friend, former classmate of my wife and former Lieutenant Governor of Connecticut, Eunice Groark. Eunice was 80.


We approach the midpoint of the year and the year’s longest day. Like all months, it will bring good news and bad, the expected and the unexpected. Let us hope that wisdom prevails, that respect dispels disdain and crudity makes way for comity. Above all, I hope the month brings peace and good health.

[1]I wrote that Halper was a spy; that is an opinion; however, one based on extensive reading and strong belief.