"Eleven Years After the Credit Crisis: Debt, Interest Rates and Inflation"

Sydney M. Williams

30 Bokum Road – Apartment 314

Essex, CT 06426

swtotd.blogspot.com

Thought of the Day

“Eleven Years After the Credit Crisis: Debt, Interest Rates and Inflation”

July 31, 2019

“At the end of the day, it is not a normal condition to have interest rates at zero.”

                                                                                                            Lloyd Blankfein

                                                                                                            Former Chairman, Goldman Sachs

The TED spread – the difference between Three-month U.S. Treasuries and Three-month LIBOR and an indicator of perceived credit risk in the general economy – declined from 314 basis points to 131 basis points during the fourth quarter of 2008, after reaching a high of over 458 basis points on October 6. (Historically, the yield spread had been closer to 50 basis points). The S&P 500 bottomed on March 9, 2009 at 676.53. The Second Quarter of 2009 marked the end of the 2007-2009 recession. The rate on Fed Funds, which began 2008 at 4.25%, ended the year at 0.25%. Despite having spent almost half a century on Wall Street, I am an observer not an expert on credit markets, so what follows are opinions that should be taken with the proverbial grain of salt. It is my contention, however, that monetary policy over the past decade has been driven by political wants not economic needs. 

In my opinion, the incoming Obama Administration, in 2009, used the credit-driven recession to justify a political agenda of increasing the role of government and “…fundamentally transforming the United States of America,” as Mr. Obama put it five days before the 2008 election. Apart from demonizing Republicans, the first thing the new Administration did was to call the seven-quarter recession a “Great Recession,” reminding people of FDR and the Great Depression. Certainly, the bankruptcy of Lehman on September 15, 2008, and the ensuing credit crisis, made for a frightening few weeks, but the scare was over by the end of the year. While Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, and President of the New York Federal Reserve Bank Timothy Geithner have been criticized by some for their handling of the crisis, it is my belief they saved the system. Monday morning quarter-backing may argue that there were some things they did they should not have done and other things they did not do they should have done, but the bottom line is that, while Lehman want bankrupt and other banks were forced to sell out, by the end of December the crisis was largely resolved, as could be seen in the decline of the TED spread mentioned above and in the fact that high-yield bonds had begun to rally a month before year end.

For six and a half years, while the economy expanded from $14.2 trillion in 2009 to $18.2 trillion in 2015, the Federal Reserve left the Fed Funds Rate at 0.25%. It was only in the fourth quarter of 2015 that the Federal Reserve finally lifted the rate to 0.50%. The rate remained at that level until December 2016 when it was increased to 0.75%, just before the Trump Administration took office. During 2017, the rate rose, in three increments, to 1.50%. In 2018, the rate rose in four increments to 2.50% where it remains today – higher than it was but still low by any historical measure. However, once again, political pressure is being put on the Fed, this time by President Trump – and silently acquiesced to by members of Congress – to lower rates, a mistake, in my opinion. It is expected that this afternoon the Fed will reduce rates by twenty-five basis points. 

Low rates trouble me for three reasons: first. they incentivize borrowing, discourage savings and hurt the retired. Second, they mask the cost of the debt our government has accumulated, which makes more difficult economic expansion. Third, low rates and cheap money make more likely a return to inflationary forces.

Non-financial corporate debt has increased to about 45% of GDP, or about $9 trillion, roughly where it was prior to the last two recessions. The $13.7 trillion in household debt is at record levels, driven by growth in student loans, but, as a percent of GDP, household debt is below where it was in 2008. The U.S. personal savings rate, at 6.2% of disposable personal income, has been flat for the past ten years, despite rising incomes in a recovering economy.

The size of government debt has increased political pressure to keep rates low. In 2000, the U.S. economy generated $10.3 trillion in GDP on total local, state and federal borrowings of $7.2 trillion. By 2018, the U.S. economy had doubled to $21 trillion, while debt more than tripled to $25 trillion. Interest expense is a rising cost. Should interest rates return to their average post-War levels, interest expense for the federal government would approximate 20% of the budget, or close to $1 trillion of a $4.7 trillion budget. This was a problem foreseen by our Founders. In his pamphlet, “Poor Richard’s Almanac,” Benjamin Franklin wrote: “Think what you do when you run in debt; you give to another power over your liberty.” An unsustainable debt load, made easier by lower interest rates, makes more likely systemic risk to the economy.

Inflation can be seen as a Janus, depending on whether one is a borrower or lender, a progressive or a conservative. There are those who are concerned with the “Japanification” of the economy, where deflation becomes entrenched in a vicious, downward cycle. Japan, however, is different than the U.S. in many respects, but particularly in terms of demographics. Its total fertility rate (TFR) is 1.46 and has been below the replacement rate of 2.1 for several years, while the U.S. has a TFR of 1.8 and only recently went below replacement rate. We have an abundance of raw materials. They have little. They have an homogeneous culture, while we are diverse. 

Milton Friedman, in his 1963 text Inflation: Causes and Consequences, wrote: “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” Today, money is cheap in all Western and developed nations, as interest rates inform us. For decades, many economists have claimed inflation is a function of slack or tautness in spare capacity in the economy, including labor. But, as well, positive forms of deflation are affected by productivity gains associated with disruptive technologies and by the importation of cheap consumer goods from abroad. But, now big technology companies have been coming under government scrutiny and tariffs are making more difficult the import of lower-cost goods. 

Low rates are a world-wide phenomenon, especially in Europe and Japan. The key short-term interest rate in Japan is -0.01 percent. In Europe, benchmark interest rates are set by the governing council of the European Central Bank (ECB) and are set at zero, while they are -0.75% in Switzerland. Mario Draghi, out-going president of the ECB is concerned about the EUs economy; last week he said this is a “whatever it takesmoment,” suggesting he is considering negative rates and possibly some form of renewed quantitative easing – to, hopefully, stimulate growth while cheapening the value of the Euro. Low rates are good for borrowers but bad for savers. Some inflation is wanted by governments, as it eases the repayment of debt. However, the lender suffers as he receives depreciated dollars. Two percent inflation reduces by half the value of a dollar every generation. Very low and negative interest rates are the last resort of politicians who failed to implement fiscal policies, probably because the latter would require a reduction in regulations and tax cuts to stimulate private demand, something inimical to progressives who favor big government. 

Populations in all western countries and Japan are aging and declining, with fewer in the work-force and more in retirement, a trend that is accelerating. The lack of an intelligent immigration policy only aggravates the situation. In an environment with a shrinking labor force, greater needs of retirees and minimal investment returns, politicians have promised more than they can deliver, particularly in funding the social welfare state. No one wants to see people starve, the ill unable to receive medical care, or the aged unable to live well, but there is also a need to keep the economic engine going. Without economic growth, our civilization will collapse. Politicians see low interest rates and inflation as a way out of their predicament. But, is not this a temporary reprieve?Is it not future generations who will bear the cost? Consider the advice George Washington offered in his 1796 Farewell Address. He was speaking of the dependency of the new country’s strength and security on public credit and on how we should use it sparingly:“…avoiding likewise the accumulation of debt, not only by shunning occasions of expense but by vigorous exertions to discharge the debts…not ungenerously throwing upon posterity the burthen, which we ourselves ought to bear.” A voice of reason in a politically-heated time.The 2008 credit crisis was an existential threat that had to be responded to with unconventional means. Today, in more conventional times, in relying on central bankers rather than legislators, we are creating self-inflicted wounds.

"Thoughts on Trump's Tweets and What We Ignore at Our Peril"

Sydney M. Williams

swtotd.blogspot.com

Thought of the Day
“Thoughts on Trump’s Tweets and What We Ignore at Our Peril”

July 25, 2019

“Sticks and stones may break my bones,

But words will never harm me.”

                                                                                    “The Christian Recorder,” March 1862

                                                                                    African Methodist Episcopal Church

Those of us of a certain age were brought up in a time when spiteful words were common, unpleasant to endure, but not “harmful.” In those long-past days, if we came home in tears we were told to ignore what words may have hurt our pride or our sensibilities. Today, “harmful” words create victims, especially if directed at women, people of color, gays or those of the Muslim faith, and are deemed “harmful;” perpetrators must be punished. This attitude is prevalent in educational institutions, the media, the entertainment industry and among progressive politicians. The prohibition of uncomfortable remarks and dissenting opinions is reminiscent of Nazi Germany and Communist Russia. It brings to mind a letter from E.B. White written to the New York Herald Tribune in 1947. The Tribune had defended the movie industry for requiring its employees to state their political beliefs: “…I can only assume that your editorial writer, in a hurry to get home for Thanksgiving, tripped over the First Amendment and thought it was the office cat.” We are at the same point today, only now it is the Left doing the blacklisting, not the Right.  

This is not to suggest that words cannot have effect. They can and they do. We find solace in words from the Bible, beauty in poetry from Keats and Shelley, and meaning in writings from Shakespeare to Hemingway. “The pen is mightier than the sword” is a metonymic adage coined by the English author Edward Bulwer-Lytton in 1839. In speeches, Thomas Paine rallied Americans for independence. Adolph Hitler used the power of his voice to incite hatred of Jews, while Churchill’s speeches held a nation together as it fought alone against the tyranny of Nazism for over a year. Saul Alinsky was a master wordsmith. In his 1971 Rules for Radicals: A Pragmatic Primer for Realistic Radicals, a book that influenced Barack Obama as a community organizer in the early 1990s and later as a politician, Alinsky emphasized that ridicule was man’s most effective weapon. Political rallies are used to gin up enthusiasm. But just as we should ignore the words used in political rallies for those we support, we should not take seriously those used in rallies for those we oppose. 

President Trump is condemned for his Tweets, not just by those who oppose him but by many who support him. While supporting most of his policies, I find myself wincing when he takes to Social Media or stages a rally. For also, like those of us of a certain age, I was brought up to respect the opinions of others, that ridicule was wrong, and that gentility was expected. But, as has been said many times, politics is a blood sport. To be successful, a politician needs the hide of a rhinoceros, the fearlessness of a honey badger, the deviousness of a black heron and the roar of a lion. Mr. Trump has those qualities.

The media has never been shy about applying appellations to describe those in power: Reagan was termed “simple-minded,” in spite of having master-minded the collapse of the Soviet Union. George H.W. Bush was called a “wimp,” despite his heroic war record. Bill Clinton was a “horn-dog,” which was hard to deny given the number of women who alleged sexual harassment. George W. Bush was seen as “stupid,” no matter that his grades at Yale were higher than those of the pompous John Kerry. Barack Obama, probably because of his being African-American, was spared such indignities, though he was criticized. But now we have a man as President who is a master at providing disparaging nick names to his opponents: “Low-energy Jeb” Bush, “Lyin’ Ted” Cruz, “Little Marco” Rubio, “Crazy Bernie” Sanders, “Crooked Hillary” Clinton and “Sleepy Joe” Biden. Wikipedia lists about a hundred of these creations. The nick-names stick because most of us understand why the pejorative adjective was applied. But they have created powerful enemies.

My point in all this is that one should not take too seriously Trump’s language. It is his actions, not his words, that bear watching. Deregulation has led to a surge in economic growth – necessary if one wants to see the environment improved and the poor and the elderly receive care. The tax cut, widely ridiculed by the Left as favoring the rich, has done the opposite in high-taxed states like California, New York, New Jersey, Illinois and Connecticut – all Democratically-run states. Despite the cuts, federal revenues are estimated to increase three percent in fiscal 2019 and six percent in fiscal 2020, the largest increases since fiscal 2015. He has forced our allies to face up to the fact that defense is not free, and that Obama’s Iran deal was neither good for the Middle East nor for counter-terrorism. He has alerted China that they cannot run rampant in the South China Sea, has increased sanctions on Putin’s Russia and has ended North Korea’s nuclear testing. 

But my biggest concern is that the Left’s fixation on Trump’s coarseness is a red herring to much bigger problems our nation faces – out-of-control federal spending, especially in the “mandated” category; a growth in globalism, which has had negative consequences for positive aspects of nationalism, including a misunderstanding of what it means to be a country; and most significant, a decline in liberalism and distrust of capitalism, a concern not just in the U.S., but throughout the West.

The fiscal budget for 2020, released by the President in March, calls for the spending of $4.746 trillion and estimated revenues of $3.645 trillion, creating a deficit of $1.1 trillion. Of that spending, $2.841 trillion is “mandated” spending and $0.479 trillion is interest expense, which explains the pressure to keep interest expense down. Together, those items constitute 70% of the federal budget. Of the $2.841 in mandated spending, $2.199 trillion is for Social Security, Medicare and Medicaid, which should make you wonder what those who would propose Medicare for all are thinking. Discretionary spending, which includes defense, is $1.426 trillion, meaning that little can be done to address the $1.1 trillion deficit without touching mandatory spending. It is the third rail of politics that no politician has yet dared touch. In 1962, when President John Kennedy promised to get a man to the moon by the end of the decade, mandatory spending was 25% of the federal budget. By the end of the decade, following the “guns and butter” programs of Lyndon Johnson, mandatory spending was 35% of the budget. It has risen inexorably since, now at 65%. 

Patriotism, it was claimed by Ambrose Bierce, was the first resort of a scoundrel, not the last as Samuel Johnson had earlier declared. Certainly, there are those who wrap themselves in the flag, claiming benevolence as they fleece their fellow man, but nevertheless, nationhood is imperative to the concept of a country and borders are what define it. The United States is unique among nations in that it has the largest economy, most powerful military, the oldest democracy and is comprised of people from every nation, race and religion. It has been a beacon for the poor and the down-trodden since its inception. But it cannot operate with open borders, for immigrants would overwhelm our systems and everyone, immigrants as well, would suffer. The United States is not perfect, but it comes closer to that ideal than any other nation, which is why so many wish to live here. Does anyone think that any of the Congresswomen in the so-called “squad” could have achieved the success they have in any other country, especially the countries from which they or their forebearers emigrated? In their impetuosity to denigrate America, they risk destroying the culture that attracted them and their families to this country.

The Indian movie director Saeed Akhter Mirza has said we are living in “an age of amnesia” – that we have discarded or boarded over our past. Because past leaders did not have the sensitivities of what is acceptable today, we must block them from our collective memories. Nike stopped selling Betsy Ross sneakers because of one man’s rant. We paint over “offensive” murals and topple statues erected in the memory of those we no longer regard as worthy, forgetting that those dishonored today were honored in their time as among the most enlightened. Our universities, once founts of liberalism, inquiry and debate have become bastions to conformity. Conservatives are not welcome. Our media rejects ideas and politicians that cannot be reconciled to preconceived Leftist notions. It is as though a new dark age has descended on what was once an open, tolerant and curious nation. Those in our academies and newsrooms utilize identity politics and ideas that are “politically correct,” which conform with today’s views on race, gender and class. They seek out victims of “harmful” speech. They ignore the fact that history has not ended, that it is a continuum. We who are older were once the future. Now, it is the turn of our children and grandchildren. But, in time, they, too, will become the past. It is this never-stopping conveyor belt of human existence that is the reason why we should ensure our youth learn concepts of liberty, freedom and free-market capitalism, ideas that have withstood attack, ideas which have given us the success we all enjoy today, including our standard of living, the value of our citizenship and the right to dissent. It is not enough to teach only what is “au courant.” 

No serious conservative was happy when Mr. Trump used the words: “Send her home.” But all presidents and leaders have used words that hurt, and/or they have lied. Were rural Pennsylvanians happy when they were summarily and smugly dismissed by Mr. Obama as clinging to guns and religion? Were the families of those whose fathers, husbands and sons had been killed in Benghazi happy when Mrs. Clinton lied about the cause of the attack? Watch what politicians do, not what they say is another adage. It applies to both Parties, as they explain or confound what had been promised in campaigns. Politicians are masters of saying what their followers want to hear. Political rallies are partisan; they are used to build enthusiasm, to get their followers excited and motivated. It is, in my opinion, an argument against early voting. What politician would not want to send his or her followers directly to the polls when fired up emotionally? Most politicians would prefer their followers not consider the relative merits of the candidates and their positions. 

President Trump knows what hot buttons to push – those which fire up his base and inflame his opponents. But it is the policies that he and his opponents propose that should catch our attention. Words can be unkind and may raise our rancor, but it is the laws that get written, the regulations that are enforced, conformity that is imposed that affect us. Those are the “sticks and stones that can break our bones.” But beware that the discourse to which we are all subject, especially in an election year, does not distract from those far larger problems that threaten to alter the nation we love and that the world envies.

    

Burrowing into Books - "After the Party" by Cressida Connolly

Sydney M. Williams

swtotd.blogspot.com

Burrowing into Books

“After the Party” by Cressida Connolly

July 16, 2019

“England feels so reassuring and safe to me.

I couldn’t stand the thought of another war.”

                                                                                  Phyllis Forrester on her return to England after years abroad

                                                                                  After the Party, Cressida Connolly

                                                                                  Penguin Random House, UK, 2018

The story Ms. Connolly tells is one of how easy it is to be subsumed by innocuous-seeming decisions that have long term negative consequences. From the perspective of several decades, we know the evil done by Sir Oswald Mosely and his British Union of Fascists (BUF) – that he (and his followers) wittingly, or unwittingly, supported the monstrous programs of Adolph Hitler. But this story is best understood if the reader is able to divorce him or herself from the knowledge we have today and to place ones’ self into that time, twenty years after the Great War in which 700,000 British soldiers lost their lives.Ms. Connolly writes aboutmothers of children who attend the BUF camp run by Nina and Eric, sister and brother-in-law to the heroine Phyllis Forrester: “Their conviction and commitment to the cause of peace was very real. Many women would already have lost brothers, uncles, fathers – even, among the older generation, sweethearts – to the dreadful toll of the 1914-18 War. Another such conflict simply could not be countenanced.”

Ms. Connolly begins her novel with a rubric, a line from Iris Murdoch’sA Word Childabout how a wrong turn taken and persisted in – a single mistake – can wreck the rest of one’s life. This story, which bounces back and forth between 1938 and 1979, opens in 1979, with Phyllis reflecting on why her life turned out so miserably. She recalls her release from prison in the fall of 1943. She had been imprisoned in late spring 1940, along with her husband Hugh, for being a member of Mosely’s BUF Party. In March of 1940, two months before she was taken to Holloway Prison, Phyllis thinks: her justification and her naivetéare exposed, “…people outside the Party were apt to mistake the Peace Campaign for a lack of patriotism, little understanding that those within it felt a passionate loyalty to very notion of Great Britain.”

In 1938, Phyllis and her much-older husband, a former Commander in the British Navy during World War II and now retired from the rubber business, return to England after many years abroad. They go to Sussex in England’s southeast where Phyllis’ two married sisters, Patricia and Nina live. Nina and her husband manage a BUF camp about which Nina is discrete, describing it as educational, promoting peace and a place where the children will have fun and meet others. “Phyllis found it electrifying to be among such a number of fellow souls, all united in in their passion for the cause. It was a wonderful feeling to belong. When Sir Oswald took to the stage to address them, she joined others in giving him a standing ovation.” Most of these women were not political, nor were they aware of the evil Fascism and Nazism represented. It was the memory of the last war that was fresh in their minds and that dictated their actions.

By spring 1940, the war had been underway for eight months, in what was called the “Phoney War” – so-called because all was quiet along the western front. Nevertheless, English lives had been lost in naval encounters. Mrs. Manville, who takes care of the mother of Phyllis and her sisters (their father recently died), suffered the loss of her sister’s nephew when HMS Courageous was torpedoed off Ireland in September 1939. She knows Mosely for what he is and calls out Phyllis and her sister Nina for “your salutes and uniforms and speechifying…,” but Phyllis is not traitorous, though one could not say the same about others in the organization, including her sister Nina and brother-in-law Eric. She is, however, naïve. She tells Mrs. Manville: “If ourPeace Campaign had been put into operation, this calamity might have been averted.”  Mrs. Manville’s response: “That’s balderdash!”

Phyllis and her husband are imprisoned. Through Ms. Connolly’s telling, we learn how families turn on one another. We read of a single incident in December 1938 that happened to Phyllis, for which she was not to blame, but that will nag her for the rest of her life, as she believes it led to her best friend’s death. We learn of the emotional strings of women like Phyllis on which Mosely played so adeptly. We come to better understand why so many wanted to believe that a second war could and should be averted; thus, were willing to follow Mosely down his path toward sedition. On a lighter note, this being a book by a British author writing of events eighty years ago, we meet new words, at least new to me, like “trug,” “jibbed,” secateurs” and “fug.” We learn about Holloway Prison and the Isle of Man and of the fact that those imprisoned were without recourse to habeas corpus or even to lawyers. Phyllis and her husband are separated and there are rumors of executions. “Phyllis didn’t really believe that her husband had been executed; yet if she could be taken from her home, locked up without trial, without committing any crime, without explanation, perhaps anything was possible after all.” She questions British justice.

Life rarely turns out as expected when we are young and dream of the future. Luck plays a role, but actions we take, decisions we make, the people with whom we associate have long term consequences, thus a word of caution permeates the story. When well-researched, historical fiction has advantages, which straight history does not. It allows the reader to get inside the minds of people portrayed. The title is a “double entendre,” in that it could refer to Mosely’s BUF Party, or it could refer to the party in December 1938 that held such consequences for Phyllis. What makes this story so compelling, though, is it could happen to anyone. The reader who sanctimoniously concludes that it was either Phyllis’ stupidity or deliberate complicity that caused this tragedy misreads the author’s interpretation of how decisions are made, without benefit of hindsight. Retrospectively, we are all wise. Prospectively, few of us are.

"Reparations"

Sydney M. Williams

swtotd.blogspot.com

Thought of the Day

“Reparations”

July 15, 2019

“The most important thing to keep in mind about reparations is that it is never going to happen.

No Congress is going to pass, and no President is going to sign, a bill that takes money from

the great majority of American voters to pay a debt they don’t feel they owe.”

                                                                                                Thomas Sowell (1930-)

                                                                                                “Risks of Slave Reparations Campaign”

                                                                                                The Kitsap Sun, Bremerton, Washington

August 4, 2001

Periodically, the issue of reparations resurfaces, brought on not by those who might stand to gain, but by politicians who see political advantage in issues that never come to fruition, like immigration or climate, neither of which they would like to resolve, as long as they serve a higher purpose – their re-election.

Slavery was the blemish on our founding. Most of the Founding Fathers understood that. Nevertheless, the decision made was to proceed with unification of thirteen separate states under a Constitution and Bill of Rights to which all attendees agreed. Was it perfect? No, because it allowed the practice of slavery to continue. But liberty was the essence of our founding. It was understood by the Founders that at some point a Civil War would have to be fought, but they wanted to delay that inevitability until the Union had solidified into a unified and respected country. They knew it would have to be able to withstand the rending of its heart, which a civil war would cause. As the first half of the 19^thCentury advanced, it became obvious that the cancer that was slavery did not fit a country whose values were based on individual freedom. The abolitionist movement grew stronger and advocates of slavery more isolated. It was felt that if the curse of slavery persisted it would mean dissolution of the union. But if it were abolished the union would be preserved, even though the cost would be high and the time for healing long.

In 1775, slavery was to be found in most of the northern states. As late as 1820, there were still an estimated 20,000 slaves in New York. But by 1860, slavery had been abolished in the north. Virginia had fewer slaves in that year than they did in 1820. It was not that they had been freed but were sold to cotton plantations in the deep south. And, while northerners railed against slavery, some were conflicted. For example, cotton brokers in New York became wealthy selling the slave-produced commodity to buyers in England.

The Civil War was fought and, while it was initially couched in terms of preserving the union, both sides understood the real cause – slavery. On January 1, 1863, with more than two years to run in the War, Lincoln issued the Proclamation Emancipation, declaring “…that all persons held as slaves within the rebellious states are and henceforward shall be free.” Over four years and 620,000 deaths, slavery in the United States ended. The Union held, and the slow process of reconstruction began – not just of broken families, farms, homes, mills, factories and towns, but of men’s souls. With the adoption of the 13^thAmendment in December 1865, slavery in the U.S. and its territories was constitutionally abolished. With the passage of the 14^thAmendment in 1868, all persons born in or naturalized in the United States were declared to be citizens. But the path forward was not easy: Lynchings were common, especially in rural parts of the south. The Ku Klux Klan peaked, in terms of membership, in the 1920s, sixty years after the Civil War. Segregation was a fact of live. It was more than eighty years after the Civil War before President Harry Truman signed Executive Order 9981in 1948, integrating the armed forces. Racially segregated public schools were common, under the misguided concept of “separate but equal,” until 1954 when the Supreme Court ruled the practice unconstitutional in Brown v. Board of Education of Topeka. Miscegenation was a crime in some states until the Court in Loving v. Virginia ruled it unconstitutional in 1967. And it took a hundred and one years from the signing of the Emancipation Proclamation to pass the Civil Rights Act of 1964, which outlawed discrimination based on race, color, religion, sex or national origin. Progress advances, but at rates too slow for us who must be content with life spans of eighty years. But, as Richelle Goodrich wrote in Slaying Dragons, “Progressing at a snail’s pace is still progress, and slow progress is better than no progress.”

So, while the history of slavery is ugly, we have moved forward. We should never stand still. We should advance in unison, and we should acknowledge progress when it is made. We should never be satisfied, but we should never be hateful. There are those who gain by fomenting dissension – race hustlers and ideologues. Apart from the power that comes with political success, there are others who gain, as Mr. Sowell wrote in the essay quoted above, “self-righteous satisfaction from denouncing other people.” We are a different people today than we were fifty and a hundred years ago. Almost eighty million have immigrated to the United States between 1865 and 2017. With their progeny, they account for about two thirds of the American population. Despite those who see us a “salad bowl” rather than a “melting pot,” our backgrounds are increasingly mixed. Most Americans do not solely descend from one nationality, but rather from multiples. The number of interracial marriages rose from 3% in 1967 to 17% in 2015. A 2017 Pew Research survey said that 39% of those surveyed felt that interracial marriages were good for society, up from 10% in 2010. So, while if one only listened to politicians, one might conclude we are more segregated than we were a few years ago, while the opposite is true. At a hearing on reparations in mid-June, Senator Cory Booker said: “As a nation, we have yet to truly acknowledge and grapple with the racism and white supremacy that tainted this nation’s founding and continues to cause persistent and deep racial disparities and inequalities.” This is an odd statement from a man who is a product of a mixed heritage, grew up in middle class environs, captained the Stanford football team, won a Rhodes Scholarship and graduated from Yale Law School. Kamala Harris’ call for reparations was even more conflicted: as her father, a professor of economics at Stanford, noted, she is a descendant of slave owners in Jamaica.

In the demand for reparations, a comparison can be drawn with the radicals of the French Revolution. In Reflections on the Revolution in France, Edmund Burke took aim at the seizure of property belonging to the Catholic Church. The revolutionaries who seized the property were not, as Liam Warner wrote recently in The Wall Street Journal, “avenging the vices of the current clerical generation;” they were “seeking retribution for centuries of crimes.” Mr. Warner concluded his op-ed: “Our efforts would be better spent directing the future than auditing the past.”

One of my eight great-great grandfathers, George Augustine Washington, as proprietor of a tobacco farm in Tennessee, was a slave owner. Because he sired a son, Granville Washington, around 1830, I have African American cousins, one of whom, John Baker, Jr., authored a well-received history of his family, The Washingtons of Wessyngton Plantation[1]He wrote toward the book’s conclusion: “African American descendants from Wessyngton now live all over America. They became physicians, lawyers, poets, teachers, civil rights activists, ministers, painters, artists, authors, bankers, brokers, professional athletes, movie stars, airplane pilots, business owners, accountants, genealogists, writers, singers, entertainers, policemen, and government and public officials.” They are part of the fabric of America. This is the spirit of America we should celebrate – the strides made by descendants of those once enslaved – not the separation of people into compartments that serve the interests of a few politicians. There is more to be done, but as Thomas Sowell wrote, a call for reparations is an empty promise.

---

[1]The Washingtons of Wessyngton Plantation, John Baker, Jr., Atria Books, 2009.

Review: "Conservatism," by Sir Roger Scruton

Sydney M. Williams

www.swtotd.blogspot.com

Thought of the Day

Review: “Conservatism,” by Sir Roger Scruton

July 10, 2019

“Conservatives are not reactionaries. As Burke said, ‘we must reform in order

 to conserve,’ or, in more modern idiom: we must adapt. But we adapt to change

 in the name of continuity, in order to conserve what we are and what we have.”

                                                                                                Conservatism, 2017

                                                                                                Roger Scruton (1944-)

                                                                                                Philosopher and Writer

Labels are misleading. The terms “liberal” or “conservative” confuse substance with abstractions. To paraphrase Humpty Dumpty, labels mean whatever we want them to mean. If told I am conservative is it meant I am a tightwad in fiscal matters? Does it mean I favor martial law to a democratic process?Does it mean I am antediluvian in cultural ways? Does it mean I am anti-progress, preferring the past to the future? Does it mean I am racist, xenophobic or misogynist?Does it mean all, or none of the above? I know what I mean when I claim to be conservative, but do others?  For me, conservativism is about freedom – free to speak, write, assemble and pray. But it also includes respect for tradition and for the opinions of others; being responsible for one’s actions and accountable to other. It means a belief in the ideals expressed in the Declaration of Independence and in our Constitution and Bill of Rights, and a commitment to values, like honor and duty. I believe strongly in family and in loyalty, and that the Constitution provided freedom for religion, not from religion. I believe government is an instrument of the people, not the other way around; that we must be ruled by laws, not men; it assumes a vigorous military, but one reflective of the nation’s citizens and under the control of a civilian president; it is the welcoming of legal immigrants and those legitimately seeking asylum; and it is an understanding that debt, while having useful purposes, when excessive has consequences, including political pressure to keep interest rates artificially low. 

The subtitle of Mr. Scruton’s short book is “An Introduction to the Great Tradition,” and that is what this book is – a primer on conservatism, a guide through the history of the discipline.  “…modern conservativism arose as a defence of the individual against potential oppressors, and an endorsement of popular sovereignty.” But it also recognizes the role communities and government must play in civil society. In institutions and traditions, there are kernels of wisdom without which, Mr. Scruton writes, “…the exercise of freedom is as likely to destroy human rights and entitlements as to enhance them.” 

We are taken on a sleigh ride from Aristotle to Niall Ferguson. He writes of Edmund Burke (1729-1797), “…the greatest of British conservative thinkers…” and Adam Smith (1723-1790), who “…provided the philosophical insight that gave intellectual conservatism its first start in life.” He cites Thomas Jefferson’s (1743-1826) contribution to conservativism, in his “insistence on continuity and custom as necessary conditions for constitution building and also for his warnings against the centralization of political power.” He writes of Ludwig von Mises (1881-1973) and Friedrich Hayek (1899-1992) and their belief that “only in a free market do prices provide a guide to the economic needs of others.” He notes the role of cultural conservatives, like T.S. Eliot (1888-1965), G.K. Chesterton (1874-1936), C.S. Lewis (1898-1963), J.R.R. Tolkien (1892-1973), George Orwell (1903-1950) and Allan Bloom (1930-1990). He quotes George H. Nash (1945-) on William Buckley (1925-2008), as “the pre-eminent voice of American conservatism, and its first great ecumenical figure, ecumenical because Buckley attempted to synthesize in his writings and his life the three principal aspects of the American conservative movement: cultural conservatism, economic liberalism and anti-communism.” 

Scruton differentiates conservatism from libertarianism, where the latter is interested only in the bare minimum of government necessary for the maintenance of individual freedom, while conservatives believe more is at stake: “Society depends for its health and continuity on customs and traditions that are at risk from individual freedom, even if they are also expressions of it.” He adds, “The philosophical burden of American conservatism has been to define those customs and traditions and to show how they might endure and flourish from their own inner dynamic, outside the control of the state.”

Conservatism has long been portrayed in pejorative terms, as privileged white males who, as Franklin Roosevelt once said, “stand on two legs but never go forward.” Conservatism has been under attack more recently by intolerant liberals purporting to fight for equality and fairness. It has been most common in universities, where administrators and professors blindly reject alternative opinions. We have seen “liberal” entertainers call for the assassination of President Trump. We have witnessed this hatred manifested in violent attacks by Antifa, most recently on journalist Andy Ngo in Portland, Oregon. Roger Scruton has not been immune from this scourge. George Eaton a deputy editor of the New Statesman interviewed him last November. By taking Scruton’s responses out of context and resorting to Twitter, Eaton was able to get Scruton fired from his unpaid position as chairman of the UK commission, Building Better, Building Beautiful. Indicative of his own character, Eaton then posted a photo of himself online clasping a bottle of champagne: “The feeling when you get right-winged racist and homophobic Roger Scruton sacked as a Tory government advisor.” He later deleted the photo.

Perhaps, though, there is a shift in the winds. There are a few on the Left who have begun to realize that they may have gone too far, that they are partaking in a “sort of progressive feeding frenzy,” as Victor Davis Hanson recently wrote. This tendency toward extremism is not new to the left. It periodically surfaces. We saw it in 1968, in the attack on police in Chicago at the Democrat National Convention, and in the militaristic occupying of college campuses in the late 1960s by groups like SDS. When attacked by George McGovern on his policies in 1968, Lyndon Johnson, who had pushed through Congress the Civil Rights Acts of 1964 and 1968, told a reporter: “You know the difference between cannibals and liberals? Cannibals eat only their enemies.” But attitudes may be changing. In his 2019 book, A Thousand Small Sanities, the left-of-center Adam Gopnik wrote: “The contemporary left can sometimes seem to have an insufficient respect for the fragility of the very same liberal institutions that allow its views to be broadcast without impediments.” In These Truths, Harvard professor Jill Lepore bemoans that studying the United States as a nation fell out of favor. She has migrated from the progressive fascination with identity politics to the Declaration of Independence as her guiding star. While she does not whitewash America’s past, she wrote: “There is also, in the American past, an extraordinary amount of decency and hope…” There are defenders of conservatism, like Boston College professor Kenneth Kersch’s recent book Conservatives and the Constitution. As well, the “Intellectual Dark Web,” or IDW, has become prominent, a group that includes Ben Shapiro, Jordan Peterson and Joe Rogan, all who have articulated opposition to identity politics, political correctness, multiculturalism, intersectionality theory and perpetual grievance.

So where does President Trump fit into this discussion. I like what he has done overseas, in terms of accentuating the hypocrisy of global institutions, bringing attention to supercilious Europeans who have taken advantage of the U.S. in terms of their own defense; I like him for calling out the Chinese for having done the same in trade and in stealing our technology, for naming the Iranians for what they are  – seekers of the bomb and exporters of terror; and I admire him for defending Israel and being honest about the Paris Agreement, which was nothing more than a glorified mechanism to transfer wealth. I like what Mr. trump has done for the economy, in terms of taxes and regulation. But he is coarse, inarticulate and egotistical. However, like George M. Cohan (as played by James Cagney in the 1942 film “Yankee Doodle Dandy”), he knows what ordinary people want. But he is not a defender of classical conservatism. Just look at the increase in national debt. As well, conservatism incorporates contrition, manners and respect for others. One might argue those traits are no longer possible in today’s dog-eat-dog world. Perhaps? I hope they are simply taking a temporary leave of absence.

Sir Roger’s book is timely. Freedom is fragile and must be constantly tracked. The risk to our democracy is less the threat of terrorism, global warming or an attack by Iran or China, and more dissolution from within. When the central government assumes too much power, over-regulates and/or puts in place laws that constantly monitor and govern people’s behavior, freedom is the loser. To ward against that threat, Secretary of State Michael Pompeo established a Commission on Unalienable Rights at the State Department to be chaired by Harvard Law School professor Mary Ann Glendon. The purpose: to ensure that our human rights – those granted by government – are grounded in America’s founding principle of unalienable rights, which are universal and not granted by government. They include life, liberty and the pursuit of happiness. In this post-Soviet Union period, those rights have been challenged by ad hoc (or human) rights, which include healthcare, old age pensions, education and basic income. Real freedom depends on the pursuit of unalienable rights. A focus on human rights, while desirable in a compassionate community, can detract from those that make us a free and independent people.  It is not that human rights should be abolished; though we must be wary of suffocation by kindness. It is that we cannot lose sight of those rights that are unalienable. Keep in mind, anything that government grants, they can take away, and that as dependency waxes independence wanes. 

In the 2006 revised edition of The Conservative Intellectual Movement in America, George H. Nash asked: “Whether conservatives could thrive indefinitely without victory in the context for our culture wars was, perhaps, the great unanswered question about American politics.” The question, in my opinion, remains unanswered, as intolerant professors and skittish administrators dominate our universities and colleges, as the incident regarding Oberlin College and the Gibson Bakery so vividly demonstrated, and as mainstream media serves as advocates for progressive causes, rather than as skeptical reporters indifferent to political philosophies. Scruton writes of the need to adapt – to change in the name of continuity, “in order to conserve what we are and what we have.” He emphasizes the importance of the first-person plural “we,” as it binds us together. Our identity is not one of gender, race, sexual preference or religion; it is one of being American – citizens of a sovereign state, governed by laws not men, where we are free to write, speak or act, subject only to rules of civility – that what we write, say or do does not infringe on the same rights of our neighbors. 

Roger Scruton has done a public service in producing this small book (155 pages). Not all will agree with his conclusions. He is controversial, scorned by the left and too often undefended by the right. But a reading should cause thinking people to question their assumptions and to decry the use of labels that do more to confuse than clarify.

Book - "Dear Mary: Letters to and from Italy - January 1945-July 1945."

Sydney M. Williams

 This book is to be published in July 2019 and is available on Amazon or your favorite bookstore.

Introduction

“Dear Mary: Letters to and from Italy, January 1945 – July 1945”

                                                                                                                                      July 8, 2019

“Please Mr. Postman, look and see.

Is there a letter, a letter for me?”

                                                                                    The Marvelettes

                                                                                    “Please Mr. Postman,” 1961

My father was drafted in March 1944. He was thirty-three years old, married with three children and a fourth on the way. After basic training at Fort McClellan in Alabama he was transferred to the 10^thMountain Division, which was then stationed at Camp Swift in Texas. In December they were sent to Fort Patrick Henry in Virginia, and on January 4^ththey boarded the USS West Point (built in 1940 as the SS America) for the trip to Naples, Italy. He was a PFC, in the 87^thRegiment, 1^stBattalion, C Company, 2^ndPlatoon, 2^ndSquad. In six years of marriage, my parents had not been separated. This is their correspondence during a trying time for the country, but especially for those who were sent overseas and for loved ones who remained at home.

In his new biography, Churchill: Walking with Destiny, Andrew Roberts writes of the future Prime Minister writing to his wife when he went to France in November 1915: “His letters,” Mr. Roberts writes, “allow us to peer into his mind better than at any other period in his life.” All letters do that, but especially those between spouses. Unlike Churchill’s my parents’ letters were never written with the prospect of being published. That was something to consider when weighing the appropriateness of having the letters transcribed and made available for all to read. In the end, their value as a window onto a special time in our history seemed worth whatever embarrassment might accrue to those no longer alive.

One could argue that letters between one man and one woman reflect only their thoughts and, thus, have little universal value. But their significance, in my opinion, is more ubiquitous. Sixteen million Americans served in uniform during the three years and eight months the United States was at war. More than a million became casualties. For every soldier serving, there were two or three (or more) family members at home. In all, they represented almost half of the United States’ population of 132.1 million in 1940. This was truly a total war.

For those who did remain at home, life was not easy, even excluding fears of the unknown. Lives were disrupted in many ways. There was a breakdown in in social values: Divorce rates increased, as did truancy, juvenile delinquency and venereal disease. Alcoholism was a problem. With women needed in the workforce, there was a growth in unsupervised, “latchkey” children. While unemployment declined due to conscription and expansion of war industries, so did safety nets, as spending on defense needs preempted funds for support programs, so poverty increased, and income gaps widened. Gasoline rationing meant restricted travel and food rationing meant substitutions, like powdered eggs and milk, and liquid paraffin for cooking oil. At one point during the war, 50% of the nation’s vegetables came from “Victory Gardens.”

As these letters show, my parents were more fortunate than many. My mother moved back to her parents in Madison, Connecticut, where we lived in idyllic conditions—a large house on Long Island Sound, a barn with animals and a mother and grandparents who were attentive and who loved us. We were too young to understand what was happening, and we were never deprived of food or a comfortable place to sleep. We were protected from the worries that consumed my mother and grandparents. My family was fortunate in other ways. All immediate family members survived. My mother’s three brothers served as Naval officers; all experienced combat and all returned uninjured. Of my father’s two brothers, one was a medical doctor who remained state-side, the other an Army Lieutenant who was wounded on Okinawa but made it home with no visible scars. Both my father’s brothers-in-law served as Naval officers; neither was wounded.

This generation was the last of the letter writers. My generation wrote letters when in school, college and the army, but we lived into an age of cell phones, e-mail, Instagram, Twitter and social media; so, the letters we write now are mostly ones of condolence or expressing thanks for a gift. But for those born earlier, the writing of letters was the most important means of communication.

Because of the personal nature of these letters, especially their reference to people and places, footnotes have been added where appropriate. The book also includes commentary about the War that allows the reader to follow the course of the 87^thRegiment while in combat. Fortunately, there is a surfeit of literature about the 10^thMountain Division, especially Hal Burton’s The Ski Troopsand Charles Hauptman’s Combat History of the 10^thMountain Division. Particularly informative was History of the 87^thRegimentby Captain George F. Earle, written in 1945, which includes a day-by-day history of their time in combat. It also includes a listing of all the men who served in the 87^th. And, of course, the book of photographs, which have been used, with permission, to illustrate this book.

Besides letters to and from my parents, included are a few letters from my father’s parents, his two sisters and one of his two brothers.

Minor changes have been made to the letters. Paragraphs have been created where none existed. As well, commas and other punctuation marks have been added, to clarify what was written. While not all letters survived, a surprising number did—especially given that those from home were carried by my father in his backpack, across fields of battle. They traveled over the Apennines and through the Po Valley. They crossed the Po River, to the shores of Lake Garda (where they were when the War in Europe ended). The 10^thremained in Italy, guarding the Yugoslav border against threatened incursions by Marshall Tito. They were there until the end of July, before sailing home from Naples. Since the expectation was that the Division would be sent to Japan for the planned invasion of Japan (Operation Downfall), included are letters written during those two and a half months after the war in Europe was over. All of these letters carry the voices of those who wrote them seventy-four years ago.

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My father, a skier since the late 1920s, died in 1968 at the age of 58. He had grown up in Wellesley, Massachusetts and Peterborough, New Hampshire. He graduated from the Belmont Hill School in 1928 and left Harvard College, at the depths of the Depression in 1932, at the end of his senior year but without a degree. His love was art—he had drawn cartoons for the Harvard Lampoon—but jobs for cartoonists were scarce. He got a job as a receptionist in a brokerage firm, where he spent time carving pipes. Finally, he volunteered in the Entomology Department at Harvard, modeling backgrounds for display cases at the Fogg Museum. He did well enough that he was invited to join the Faculty Club, despite never having received a degree. In 1936, he resigned to study sculpture with George Demetrious at his studio in Gloucester, Mass., where he met his future wife, Mary Hotchkiss.

My mother, who died twenty-two years after my father, grew up in New Haven, Connecticut, in a large house at the top of Hillhouse Avenue, a house that belonged to her paternal grandfather. She graduated from the Foxcroft school in 1929 and spent a year in Italy at Madame Boni’s finishing school in Rome. Her life changed in 1933. Her grandfather had died in 1930. Her father, a director and vice president of U.S. Rubber Company in charge of their world-wide rubber plantations, had invested [sic] most of his money with Ivar Krueger, the Swedish “Match King,” a Ponzi-scheme operator whose empire toppled in 1933. The house on Hillhouse Avenue was sold. Their summer place in Madison became their year-round home. For two years my mother taught art at Foxcroft and, in the early summer of 1936, she went north to study sculpture with Mr. Demetrious, where she met my father. They were married two years later. At the time of their engagement, in October 1937, my mother wrote a revealing letter to her brother Henry about her fiancé: “His tastes are similar to mine, though perhaps he is more of the earth while I am off the earth, but his realm is comprehensive of both. He is an animal of instinct – does not bite, however – and stands for simplicity and nature.” They were married May 28, 1938 in New Haven.

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My mother spent most of that year and a half that he was in the Army with her parents in Madison, Connecticut. She brought with her three children and a fourth who would be born in August 1944. (I was the second oldest.) My earliest memories are of that period. I remember the house, the barn and the animals (which play a large part in these letters). I remember leaving my father at Union Station in New Haven in late August 1944, as he went off to Camp Swift in Texas, prior to being shipped overseas with the 87^thRegiment of the 10^thMountain Division, in early January 1945. He would be there until late July, before being shipped back to the U.S., ostensibly for a home leave before heading to the Pacific for the planned invasion of Japan. For me, those months were filled with the joy and wonder of childhood, a place where the guns and bombs that devastated Europe, the Middle East and Asia were not heard and had no meaning.

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My mother did not often display emotion, but there were tears in her eyes when I left for Fort Dix on August 11, 1962. The United States was not at war. I was fulfilling my military obligation, in serving six months of active duty. There was little chance I would be endangered. But for her, my leaving was a reminder of a time less than two decades in the past. It took me time to realize the emotions she must have felt. Time is long when one is young, but short, as one ages. It had been only seventeen years since my father had returned from Europe on VJ Day. Memories of those years must have haunted her, as it did millions of others. During the War, people like her lived in a cocoon, absent of information—until the next letter arrived, a letter censored to remove any information as to exactly where the writer might be, or what casualties his unit may have suffered. Battles would be reported by the press, but families did not know where their loved ones were or how they had fared—if they had been wounded or killed; there were no cell phones, e-mail or instant-messaging. What no wife, mother or child wanted was a telegram or, worse, a visit from the military.

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The lives of those left at home was surreal, like an Ingmar Berman movie, with past memories appearing in mist-like conditions and with vague glimpses of a what the future might hold. A few years after my mother died, I had a chance to read through the letters my parents had written one another. My mother’s letters provided a sense of the sacrifice she made, the gaiety she showed us children, the normalcy she expressed to my father and the torment that rendered her heart, which she was unable to disguise. It was not politics or the War as a whole that consumed her; it was the personal. In an appendix to War and Peace, Leo Tolstoy wrote of the contrast between the way historians view war and artists: “…for the artist there cannot and should not be any heroes, but there should be people.” These letters show people. Footnotes have been added to provide context, to explain, for example where his regiment was and had been, and to provide color regarding people mentioned. Unlike many returning soldiers, my father did speak of some of his experiences, but he always omitted the horror and fear he had to have experienced and felt.

None of these letters say anything about the geo-politics of the time, but they do show people, as individuals – not made-up and not idealized. This book is an attempt to derive a better understanding of that time and what life was like, for those in combat and for those left at home.