These Two Posts Remind Me of Each Other

Posted on by

Here, at Sarah Hoyt’s blog, we have her as-usual well-articulated musings about those folks who, confronted with a leaking roof, conclude that the remedy is to start jerking stones from the building’s foundation walls as fast as possible.  And here we have a searching inquiry into what Oswald Spengler, a German writing during the Great War, may have to say about how 21st Century Americans understand themselves.  These two posts remind me of each other, and I’m sure it’s because they both have a tie-in to the Great War, which is among my particular fetishes. 

Mme. Hoyt is a writer, science fiction I gather, and so her post has a heavily literary cast to it.  She also was born and brought up (as we say around here) in Portugal — admittedly a very socialistic Portugal, but no one gets all that far above his raisin’, not societies and not their members.  So I’d wager that a good deal of the Portugal in which she grew up fairly resonated with, and way down deep in her bones she can still feel, the tugs of Iberian heritage, not least of which would be the restless gaze of Henry the Navigator (even perhaps more than England, where no spot of dirt is more than 90 miles from salt water, I just don’t think you can grow up Portuguese and not have the enormous Fact of the ocean soak into your pores).  That would of course mean that she’s got some coils that are still tuned to a European frequency (never met the ol’ gal, but I don’t get any points for figuring that out; she’s forever pointing out how tiresomely conventionally leftist are the standard bearers of today’s American Deep Thinkers; “been there, done that, you might take a look at how it’s workin’ out in Europe” is a big theme in the blog posts of hers I’ve read).  Portugal did fight on the Western Front.  Fact.  Didn’t take quite the killin’ that the other Allies did, but in a country the size and population of Portugal it wouldn’t have taken a very large number of corpses to hit the point at which the entire populace internalizes the war’s trauma.

We Americans forget what a catastrophic event the Great War was, at every level, for the peoples caught up in it.  We got into the war, legally at least, in 1917.  But even comparatively late into 1918 we still didn’t have a whole lot of doughboys on the front.  Beyond Belleau Wood (look: I like Marines, even though I’m ex-navy, but you can’t read how clumsily that battle was fought and not want retroactively to court-martial the commanders; they were fighting in 1918 using essentially the same tactics the Brits used at Loos in 1915, viz. march lines of infantry across open ground against concealed machine guns, and with very predictably similar results) and the Meuse-Argonne — another badly botched battle, from the commanders’ perspective — we just didn’t really get into it.  As a professor of mine in college pointed out, the principal effect on American consciousness of World War I was the fact that before the war the only interaction most Americans had with their federal government was the local post office.  All that changed, radically, in consequence of the mobilization effort.  My professor pointed out how many of FDR’s socialistic New Dealers had cut their teeth in 1917-18; Jonah Goldberg provides a very helpful exegesis of the extent to which Wilson looked upon the exercise as an opportunity.

For Europeans, the Great War was the End of the World.  I mean, Serbia lost 16% of its gross pre-war population.  Huge slices were taken from the British and French male populations of service age.  And that’s just the dead; it doesn’t count the maimed, or those so wounded in spirit as to be dead losses to society for, in some cases, decades.  Phrased in terms of Hoyt’s and Merry’s respective posts, there was legitimate reason to look about oneself and ask, if We, where “we” is Western Civilization, had done this — to ourselves, no less — were we at the end of the line?

Mme. Hoyt makes her central point:  “World War I was terrible, and for many reasons, including the prevalence of pictures and news, the fratricide/civil-war quality of it, the massive number of casualties.  It shocked an entire generation into … writing an awful lot about it, and into trying to tear down the pillars of civilization, believing that Western Civilization (and not human nature, itself) was what had brought about the carnage and the waste. * * *  So, I say – break the cycle.  Speak real truth to power.  Write of war and evil, sure, but as human ills, and not as the result of the unique badness of Western Civilization (or civilization) or capitalism, or affluence, or industrialization.  Dare point out that while humanity has had savages aplenty, few of them were noble.  Dare point out that while civilized man can be conventional, conventional behavior is often decent and moral and better for everyone.”

Hoyt’s post is mostly about how the Deep Thinkers “throw off” on Agatha Christie and Robt Heinlein, for their supposed . . . well, because they just don’t seem to have had the right villains, or their characters don’t Think Correctly or don’t want the Right Things, as far as I can tell (I don’t read fiction as a general rule, and when I do it seems it’s either Kafka or Wodehouse, so I’m just dead-reckoning from Hoyt).  Their communists and fellow-travellers are depicted as “poseurs” and charlatans (compare Charlotte Corday Rowbotham, anyone?).  Today’s (very conventional, always very conventional, and predictable) lefties just get all of a twitter that they didn’t think of it first.  And if they didn’t think of it first, it means they’re . . . well, they’re maybe not so special as they demand to be treated, maybe?  The personal is political, and vice versa.  The failure of one’s politics to be accepted in toto is not just verification that lot of folks don’t think like I do.  No, failure is a total rejection of oneself.  Not acceptable, in other words.

Per Merry’s post on Spengler, some guy who took two shots to pass his university examinations (and you must understand how traumatic to a German is the experience of Not Passing one’s examinations; I have personally known German students who failed for a second time, and after seven years in college were faced with the alternative of starting all over in another field or crawling back home to be . . . well, whatever Failed People became in 1980s Germany) made some incredibly prescient observation about cultures in general and Western Civilization in particular.  More particularly, from a reading of Spengler it seems that the question relevant to today’s Americans is whether we of Western Civilization find ourselves on a terminal glide path, and whether our (Americans’, that is) popular and political urges are symptomatic of imminent triumph or imminent catastrophe. 

More to the point, Spengler it seems identifies certain phases or trajectories of major civilizations (or probably better expressed, civilizational families).  Accordig to Spengler each goes through a period of genesis, of growth and development — self-actualization we’d most likely say nowadays — and then eventually decline and death (not merely eclipse, by the way, which implies some continuing existence, but extinguishment).  One of the characteristics of the decline — what he calls the “civilizational” phase — is characterized by a “surge of imperial fervor and a flight toward Caesarism. Hegemonic impulses come to the fore along with forms of dictatorship.”  One would have to be monumentally purblind not to see the implications of that observation for 21st Century America.  Nation-building, anyone?

A couple of random notes.  Robt Merry does not point it out, but in the German original, Spengler would have used the expressions “Kultur,” “Zivilization,” and “Bildung,” which do not mean the same things.  Without going too deeply into it, for a German, and German understanding, the distinctions are fundamental and of extreme importance.  See, e.g., Peter Watson’s German Genius, which I’ve linked to on this blog repeatedly and which has as one of its over-arching themes the societal and political play of the German distinction between Kultur and Bildung.  So in any translation one might read, one must be careful to observe the fact that there may be points of distinction that lie outside the text.

Secondly, and of more immediate importance to us, American society was founded 400 years ago explicitly as the City on a Hill.  Our zeal to project outward our image of ourselves is inseparable from the notion of Who We Are.  Can America’s understanding of itself survive a Spenglerian filter?  As Merry makes clear, the fundamental points of Spengler come down to the points that We Are Not Special.  We are not universal.  The universal striving towards commonly understandable human-centered goals is a pious fraud.  We too are bound to the Wheel of Fortune (a concept which, as Barbara Tuchman points out, Medieval understanding would have grasped very quickly); the conceit of the “Idea of Progress” is traced to its first tentative beginning in the 13th Century, the bitter, bloody, fag-end of the Middle Ages.

Either we are or we are not on a trajectory that ends in a hillside.  Either decline is a choice or it is not.  Spengler wrote at a time when he had not the advantages of modern economic theory, modern game theory, modern data analysis tools.  The Austrians and their progeny, Mises, Hayek, Friedman, and others, do extremely well explaining the past, accounting for the present, and thus far at predicting the future.  But what if a great deal — at least insofar as I’ve been exposed to it, which is admittedly not comprehensively — of why their ideas seem to work so well is that what we’re looking at are essentially Western modes of existence, even in “non-Western” societies.  What if those ideas have no application outside the confines of our own civilization?  To phrase it in terms of mathematics, what if we’re exercising ourselves over Fermat’s last theorem, all the while we’re about to be swamped by a world in which 2+2>4?

Merry chides Spengler somewhat for being too “deterministic,” and identifies this as being a “philosophical” objection to his thesis.  That is as it may be.  But Spengler was looking at several thousand years of recorded human history (which is, by the way, only a fraction of its total history).  To identify a pattern which holds true across times, places, and peoples who have nothing in common other than their physiological similarity is not to leap to a conclusion.  If you look at groups of anything (whether it’s stars, or terrestrial species, or human societies) which start from different places, are exposed over their lives to very different stressors, evolve distinct internal rules of action . . . yet still end up following very similar upper-level pathways, does not that suggest that there is an element of commonality which transcends the specifics which we can observe on a ground-level basis?

And here we get to the concepts of metacognition and Heisenberg.  As I understand the technical concept, “metacognition” may be described as the awareness of awareness.  Heisenberg of course enunciated the principle of uncertainty, in that we can know a body’s location or its velocity, but not both simultaneously.  The very act of observation alters at least one or the other.  I won’t claim that today’s humans are the most self-absorbed creatures, ever, but if not we’re really in the running for it.  We are intensely aware of what we are aware of; we study it, ruminate over it, argue over it constantly.  And in our self-observation of where we are, do we or not alter our velocity (which has both amplitude and direction)?

May, in other words, our awareness of the truths as observed by Spengler enable us to confound them?  Unless, of course, we indulge the puerile logic of the Deep Thinkers described by Hoyt.

I’ve not read Spengler, but by God I’m going to.

They Obviously Didn’t Get the Memo

Posted on by

Via the Daily Mail, we have some nice color pictures of what the latter days of the Soviet Union looked like.

I like color pictures, and not just because I’m simple-minded.  Color pictures show you . . . well, they show you the color.  They convey a more-or-less faithful visual impression of the reality that other people, in other parts of the world, and at other times, confronted in their day-to-day lives.  I just wish there were some technology by which we could have captured the smells of scenes depicted in pictures.  Bureaucratic antiseptic, institutional scrubbed, masses of unwashed human body . . . for me at least smell has some of the most evocative powers.  In evolutionary terms, we humans probably, like most animals, evolved a sense of smell very early on.  Smell can’t be hidden behind a tree, or in tall grass.  You can be as quiet as you please but you can’t hide the stink.  Born by air’s movement scents can be detected by the sensitive much farther away.  For a hunter as well as for prey smell is important.

I could be, of course, full of it.

But back to my point, the other reason I like color pictures is that color shows things that simply don’t show up well in black-and-white.  Specifically, dirt shows as dirt, not just some miscellaneous shadow that might be of any particular origin.  A dark area in a picture showing X will look pretty much a shade of gray that tells you very little about the specific X you’re looking at.  There’s a picture — I think it’s in Anne Applebaum’s history of the Gulag — showing the inside of a Cheka execution cellar.  It shows just bare floor, bare walls, and some ceiling.  On one wall and the adjoining floor, there’s an enormous dark smear that runs from the floor all the way up the wall, and well across the ceiling.  Most of the smear is solid black/dark gray in the photo, but there are loops, spatters, and so forth around the edges.  It shows, of course, human blood.  A color picture would have shown all the different tints within that enormous blood stain.  We might have seen something of how recently the cellar had been put to use.

And what, if you dare think of it, might that room have smelled like?

In any event, the linked pictures from the latter days of the Soviet Union are instructional.  Remember, while looking through them, that the world depicted in them had, and had for decades had enjoyed —

      (i)  free, universal, single-payer healthcare;

      (ii)  effectively no privately-held for-profit corporations;

      (iii)  no government-established religion, or even so much as prayer in schools;

      (iv)  universally free education at all levels;

      (vi)  comprehensive government regulation of pretty much everything, every last little facet of social or economic interaction between humans;

      (vii)  no corporate CEOs making $20 million per year;

      (viii)  fully-nationalized natural resources and exploitation of same;

      (ix)  fully-nationalized transportation networks;

      (x)  fully-nationalized means of production of every tangible object of any significance;

      (xi)  no private banking or other financial services industries, all such being provided exclusively by government-owned providers; and,

      (xii)  last but far from least, a cohort of cheerleaders, admirers, and would-be imitators all over the Western world, including a fellow born to an American marxist female who hated her country as only the wealthy white can, and a sub-Saharan African marxist father, who just wanted to bed every woman he could and drink himself into oblivion (which he later did).

Russia has always been desperately poor.  But Russia hadn’t always looked like that, in color.  For a view of the world Dear Leader’s heroes destroyed, the Library of Congress has a collection of rare color pictures taken between 1900 and 1915, all across Imperial Russia.  Some of them are obviously staged (like the peasant girls, got up in their finest, cleanest clothes), but even in them the background is not staged.  Take a hard look at the buildings in the villages and on the farms, at the interiors of the factories, at the roads, rivers, and horses.  Those are not dressed up in their Sunday-go-to-meetin’ best.  No one has scrubbed the sides of the buildings for the photographer’s benefit.  In the country which invented them, these are not Potemkin villages and factories.

Now go back and look at what 70 years of the proletarian dictatorship accomplished.

This is what Dear Leader and his friends have in mind for us.  We’re promised heaven on earth if we’ll just run our country like the Soviets did theirs.  From the pictures at the Daily Mail, it seems the Soviets didn’t get the memo that when you run your country that way, what you’re supposed to end up with is heaven on earth, not 18 year-old whores plying their trade on the most prominent thoroughfares in your nation’s capital city.

 

 

Well . . . How Noble of Them

Posted on by

Today’s Frankfurter Allgemeine Zeitung has an article on why sanctions only help tyrants, specifically the Iranian ones.

This seems to me to be a rather curious position to be taken by folks who twice in the past century were brought to and in fact past the brink of starvation and collapse precisely by successful efforts to intercept their trade relationships.  In both those situations the Germans were the subject of dictatorships, in the Great War a military dictatorship run through the mouthpiece of a monarch and in the second round by a political dictatorship.  In both instances the final collapse of the system was brought about by battlefield collapse which had its origins in economic collapse.

By March 20, 1918, the German civil populace had survived the “turnip winter,” in which that’s exactly what they were reduced to eating in their freezing houses, coal being almost unobtainable across wide areas.  But they’d knocked Russia out of the war and in fact were in the process of establishing military occupation of parts of the country to ensure the timely delivery of supplies which the Bolsheviks had agreed to fork over.  That military occupation wasn’t just a bunch of desk-jockeys, either.  The Germans, down to their last throw of the dice in the West, devoted dozens of thousands of troops (and their associated supply chains) to that occupation of a defeated enemy.  Why?  The British blockade had reduced their war-making capacity that far that the Germans absolutely, at whatever cost, had to have those supplies.  It was a race to see whether they could get them flowing in time.

The thousands upon thousands (I’m thinking it was well over 100,000, but I’ve slept since I last read the specifics, so don’t hold me to that) of coal-scuttle helmets remaining in the East to pacify and plunder prostrate (but thoroughly chaotic) Russia were not in the line on March 21, 1918, when Ludendorff launched his last gambit against the Western allies.  He almost won the bet, too.  Exhausted, famished, unreinforced, the German offensive petered out just a couple of miles from breaking the line between the British and French.  German soldiers were literally stopping in the middle of battle to raid Allied kitchens, they were that hungry.  What difference might — say, another 50,000 — fresh troops have made?  How different might European history for the last 90 years have looked with the British pinned against the Channel ports, and French armies collapsing back on Paris (sort of like what happened in 1940), and the Kaiser in a position actually to negotiate if not from a position of strength then at least not from desperation?

Fast forward to 1944.  Albert Speer has taken over German war production.  It’s going through the roof.  There are more guns, more tanks, more aircraft coming off the assembly lines than ever before.  Production would continue to rise until the very end, by which time, with the transportation network wrecked by Allied air forces, the factories literally choked on their own output.  But there was a problem:  Germany couldn’t make enough synthetic fuel to run its tanks or aircraft.  It had no domestic supplies of chromium and several other strategic minerals.  When it lost access to Ploesti (the Romanian oil fields) and imports of Turkish chromium, Speer went to Hitler and explained to him, down to the day, how long Germany’s war effort could continue.  By the end Germany’s armies were reduced to foot and horse transportation.  A good part of the reason that the Western allies so rapidly advanced across France was air superiority.  When they didn’t have it, as in the Ardennes in December, 1944, they didn’t do so well.  And it took Hitler just about siphoning gas from every tank he could lay hands on to scrape up the fuel to launch the offensive we know as the Battle of the Bulge.

Compare and contrast:  In Italy, where the terrain was much less favorable to the material preponderance the Allies brought to bear, and aircraft, while important and operational, could not exercise nearly the dominance of the battlefield they could on the open plains of northern Europe, it took the Allies nine months to advance from the Straits of Messina to Rome, and then even by the end of the war, nearly ten months later, they’d still only fought their way into the northern reaches of Italy.

To put a bow on it:  Both World Wars were first and foremost battles of material.  It took a lot of bleeding and dying by the “P.B.I.” (as the other British services called the “poor bloody infantry”), but in both cases the winner was the guy with the biggest shopping basket.

The FAZ article, written by some fellow identified as a German-Iranian political scientist currently earning his doctorate at the School of Oriental and African Studies at the University of London, recites all the usual theoretical objections to sanctions — they hit the “innocent” civilians; they only widen the disparity in power between the tyrant and his subjects; they don’t even stop the tyrants from in fact achieving the material advances in aggressive capacity which is the principal moral foundation for them; by demoralizing the civilians they make it less likely rather than more that the middle orders which have without exception been the backbone of democracy everywhere will rise up against their tormenters.  The author observes (truthfully) that thirty years ago when sanctions were first pasted on Iran, it had no centrifuges; now it has thousands.  He recites (again, truthfully) that the Revolutionary Guard, far from being hollowed out, has taken over enormous swathes of the Iranian economy.

The author allows that with sanctions, the West has constructed a “narrative” under which both it and the Iranian regime may “conveniently” live.  From the regime’s side arises the author’s objections that sanctions don’t work.  From the Western side arises the objection that it’s a question of “human rights” which are being denied to the Iranian people, and the author turns his cards face-up in rhetorically asking whether everyone, no matter under how oppressive a regime, has or does not the same human rights.

As an initial matter, the reader can draw some very useful conclusions about this author’s understanding of the world in his pretty-much explicit  moral equation of the West with the Iranian theo-criminal thugocracy, which has announced as its objective of state the eradication of Israel from the map and the slaughter of every Jew it can lay hands on.  He sees no worthwhile distinction between the two sides, or at least not one he thinks sufficiently exercised to comment on.  He points out that the Iranian populace suffers under the regime, and it suffers under the sanctions.  Therefore both sources of its suffering are morally equivalent.  I’m sure there’s an expression in formal logic for this sort of fallacy, but I prefer Lincoln’s comments:  “‘Woe unto the world because of offenses; for it must needs be that offenses come, but woe to that man by whom the offense cometh.’ If we shall suppose that American slavery is one of those offenses which, in the providence of God, must needs come, but which, having continued through His appointed time, He now wills to remove, and that He gives to both North and South this terrible war as the woe due to those by whom the offense came, shall we discern therein any departure from those divine attributes which the believers in a living God always ascribe to Him?”

Allow me to repeat a point I made a number of years ago to someone, genuinely pious, who stated, in exactly so many words, that there was “no difference” between “Christian fundamentalists” and “Muslim fundamentalists.”  Seriously; this person actually said that.  I allowed that I was not (and remain not) interested in any god who cannot discern any distinction between a group of people on the one hand who express the opinion that homosexuality is sinful and should be discouraged, or that abortion is the killing of a human being, or that the Ten Commandments should not be hustled off from every location where they might be seen by a random passer-by, and on the other hand people who will slaughter a fifteen year-old daughter (mom doing the holding down, dad doing the stabbing) because she dated someone from another faith, or will strap a remotely detonated explosive vest to a retarded child and send him into a crowded market place, or throw sulfuric acid in a woman’s face because she had the effrontery to show it in public.  I’m not interested in that god; I’m not interested in his teachings; I’m not interested in worshipping him.

On a more practical level, I’ll just observe that nothing works that is not taken seriously by the person doing it.  You’d think that dynamic would be sufficiently obvious that someone getting his doctorate would have tumbled to it by now.  But no.  And here we must ask just how seriously has the West taken its sanctions against Iran?  Well, not very, if what you’re thinking of is the € 25 billion in business that Germany has done with Iran just since 2005.  It’s currently running at € 3 billion per annum.  And Germany’s not the only sinner, not by a long shot.  The Chinese are propping them up, as are the Russians.  In fact, Germany’s not even the only Western country merrily doing business while wiping the blood off the currency they get.  Through the end of 2009, the EU had done € 65 billion of business with Iran in the preceding three years.  Top traders?  Germany, Italy, France, Holland, Spain, and Belgium.

The author of the FAZ article mentions none of the above in his denunciation of sanctions as ineffective.  Of course they’re not effective, if your own side is undercutting them.

In terms of whether the populace is so demoralized as to be incapable or unwilling of uprise, the author also (“conveniently,” to use his own expression) omits to mention the massive uprising of summer, 2009.  Millions of Iranians took to the streets, at first to protest vote fraud in elections, but then rapidly expanding their demands for fundamental changes in government.  And what did the West do to help them?  Beyond words, nothing of any substance.  It came out later that Dear Leader at the time was trying to initiate negotiations with the folks killing the protesters (much in fact as he’d announced as a candidate, to meet with them “without preconditions”).  This past fall Romney foolishly claimed Dear Leader had been “silent,” when in fact — after dithering for weeks, while the Revolutionary Guard slaughtered the protesters in the streets — he offered them . . . words.  No, what Romney should have claimed was that Dear Leader was inert.  But Dear Leader was in good company; no one in the West did a damned thing to help the people in Iran throw the bums out.

It’s those two omissions in the FAZ article which reveal it to be no more than propaganda.  In tyrannies the effectiveness of propaganda relies on deprivation of alternative sources of information; in societies which at least nominally endorse freedom of speech its effectiveness must rely on ignorance.  Fortunately for our German-Iranian omissionist, he’s got extremely fertile soil to plow in that respect.

While we’re at it let’s . . . ah . . . contrast how the West responded to civilians trying to overthrow an overtly Islamist regime (nothing more than words) with how it responded to Islamists trying to overthrow non-Islamist regimes (active military intervention in support of the terrorists, expressions of “relief” by Dear Leader, and money, always money).  The U.S. is in the process of handing over top-of-the-line F-16 combat planes to the Muslim Brotherhood in Egypt, in fact.  A man (former Sen. Hagel) is presently still in the running to be appointed Secretary of Defense, when he has a long, long track record of vehement anti-Israel statements and actions to his credit. 

Dear Leader and his ilk can’t quite seem to make up their mind on Syria, though.  The people on both sides want to slaughter Jews.  It must be so confusing for the Deep Thinkers in the West.

I don’t know whether the author of today’s FAZ article is just a conventional lefty Jew-hater, or whether he’s a paid stooge for the likes of the Muslim Brotherhood.  Someone’s paying his tuition, after all.  Maybe he’s working down the local Tesco’s.  Maybe not.  But no matter his motivation, his article is demonstrably nonsense.

Defender of the Realm

Posted on by

Is the subtitle of the third and last (posthumous) volume of Wm. Manchester’s biography of Winston Churchill, The Last Lion.  Manchester died in 2004, before he could begin writing this final installment, which covers the period from Churchill’s first appointment as prime minister in the chaos of the German invasion of France, in May, 1940, up through his death.  I ran across and bought the first two volumes during the summer of 1993, when I was working my 1L summer out in the middle of nowhere and had little to do of an evening but read, drink beer, and sweat in my un-air-conditioned apartment.  I ran through those books pretty fast (in fact I may have read them twice during the course of the summer) and enjoyed them tremendously.

In the first two volumes I thought Manchester did a phenomenal job of communicating just how unusual a person Churchill really was.  There’s one vignette that’s very telling.  Churchill’s still a young man, and was visiting some people at their ancient country house.  The house caught on fire, and ended up destroying everything, including some priceless manuscripts from the Middle Ages.  Churchill writes about the fire to his then Sweetie Pie, later wife, Clementine Hozier.  The fire was tremendous fun, he writes, very exciting, the blaze consuming everything before it, etc. etc. etc.  All his best efforts in the bucket brigade, as he climbed up on the roof, were unavailing, and the place was a total loss.  One mourned for the devastated owners, of course, but what fun and excitement it all was.  Manchester notes several revealing things about the letter, the first being his thoughtlessness in scaring the bejesus out of Clementine.  She fully expected to marry him, and here he’s just sort of off-handedly relating how he almost got himself killed traipsing about on the roof of a house that’s in the process of burning to its foundations.  That thoughtlessness of others, especially those nearest to him and fondest of him, is a recurring theme throughout his life (and one that he learned at mommy and daddy’s knees).  Secondly is the apparent callousness of his description of the fire which destroyed centuries of this family’s existence in a matter of minutes:  it’s all great fun, a tremendous spectacle, and a stage for Churchill’s enactment of his own prominence.  But last and ultimately of greatest importance is the salient point that, jolly fun though he found this family’s tragedy, it was Churchill alone who climbed onto the roof, risking his life to try to douse the flames.

Of Manchester’s other books I’ve read only A World Lit Only By Fire: The Medieval Mind and the Renaissance Portrait of an Age, his placing of Magellan’s circumnavigation in its socio-historical context, and The Arms of Krupp: The Rise and Fall of the Industrial Dynasty That Armed Germany at War, the title of which is self-explanatory.  The former is as much about a world and humans’ understanding of themselves in it as it is about a specific person; the latter is a book which spans the period 1587 to 1968 and includes within it some truly unsavory characters (Alfried Krupp, who during the war so abused his slave laborers that even the SS complained about it, comes as close to the incarnation of what the Occupy “movement” thinks of business in general as anyone I’ve ever heard tell of).  So I can’t tell if it’s a Manchester trait to identify as warmly with his subjects as he so obviously does with Churchill.  It’s pretty clear that Manchester just plain likes Winston, in addition to being massively impressed with him.  In several passages in the book (I’m speaking specifically of those relating to the Gallipoli campaign, but there are others) he comes across as nearly an advocate.  That may or may not be true; certainly that particular campaign, had it succeeded, might well have been the game-changer it’s portrayed as having had the potential to be.  That is, however, as it may be.

I’ve spent the past 19 years waiting for the next chapter, and was mightily disappointed when Manchester died without having published it.  I’d understood (incorrectly, as it turns out) that he’d got the book more or less written, but ran out of time and energy before getting it in final form.  As it was, by the mid-1990s Manchester was so enfeebled that he wasn’t able to write any more at all, and had not even started the writing of this final book.  So the book is listed as by William Manchester and Paul Reid.  Manchester had done the vast majority of the research, the note-taking, the collating into themes, and so forth, although there was still quite a bit to be done, and of course all the actual text is Paul Reid’s (they’d become friends several years before, and it was Manchester who out of the blue one day asked him to finish the book when he was gone).

Reid’s and Manchester’s writing styles are not dissimilar, although certainly not identical.  I don’t pick up from Reid quite the reverential tone towards the subject that I did from Manchester.  For example, Churchill is portrayed in this final book as being more given to alcoholic intake than in the first two, and in fact being noticeably elevated on more than one occasion.  This is in marked contrast to the same topic as treated in the first two volumes.  In numerous places Reid goes out of his way to describe specific meals eaten by Churchill and company during the war, and more particularly to describe their sumptuousness.  While he doesn’t say as much, the contrast must be intentional with the constant hunger that the vast majority of British, and especially the urban populace, experienced both during the war and for several years afterward.  But is it really necessary to go into that kind of detail, repeatedly?

Churchill’s war ended up being divided into three phases, the first being his period close to power, but without the ability to grasp the wheel alone.  He came back to the Admiralty on September 3, 1939, but with Chamberlain stll in charge Churchill was both responsible and muzzled.  Then of course the debate of May, 1940, after the disaster of Norway and the launch of the German western campaign, brought Churchill what he’d been after since about 1895.  That phase lasted until December, 1941, and was in the epitaph of his long-time personal doctor, Lord Moran, “his finest hour” during which he “held inviolate” the soil of his beloved England.  And in point of fact, if the first step in winning is not losing, and the key element of not losing is not admitting, even to yourself, that you might lose, then what Churchill did for England during those months alone will ensure him immortal memory, or at least as long as Western memory endures.

The final phase, which lasted until his ousting from power in his moment of victory, can best be described as a long slide towards the contumely which must have grated on him more than nearly anything else.  As he told Violet Asquith (as she then was, in 1906, when he was 32 and she nineteen), he did believe himself to be a glowworm.  Which he was.  Yet once Britain had been drained financially, bled down physically, its capital bombed into rubble over wide areas, and the United States had swept into the room, Churchill inexorably became Yesterday’s Girl.  The progress of his relationship with Roosevelt takes on the character of supplicant and high-handed adored object. 

It’s only to be expected, of course, that three allies as different from each other as the U.S., Britain, and the Soviet Union would have war objectives different from each other.  It’s also only natural that each ally should attempt to extend its vision as far as possible in the post-war world.  Stalin spoke a great truth when he observed that in that war, the winner would not merely seek territorial relief but also impose his own social system on the conquered.  That in fact happened, both in the areas occupied by the West and of course in Eastern Europe as well.   But Reid’s portrayal of FDR and how dismissively he dealt with Churchill casts a sobering (and IMHO necessary) corrective across the hagiographic understanding of Roosevelt which pervades American consciousness.  On any number of occasions Churchill would propose things to FDR, from meetings to clarify and resolve conflicts of strategic vision to dealing with Stalin, who apart from Hitler and Chiang Kai-shek may have been the most difficult ally of any nation ever.  And FDR would — literally — blow off answering for days or even weeks.  He treated Churchill like he treated his cabinet members, as someone to be lied to as desired or convenient in order to get what he wanted. 

Whatever other faults Churchill may have had, and he had them in abundance, no one ever departed a meeting with him under any misapprehension of what he thought.  Lying through his teeth was a Roosevelt trademark, which he indulged with Congress, with his cabinet, and with the press.  He was the kind of fellow who’d pat you on the back, piss down your pants leg, and tell you it was raining, all the while smiling in your face.  No one can deny FDR his crown as master politician, in the sense that he clung grimly to power through a whatever-it-takes program, and in the process crafted a theory and practice of politics which is still very much alive and well.  Cobble together as many different constituencies and promise to beggar the world to line their pockets, and they’ll vote for you.  Thanks to exactly this approach to electoral alignment we are looking forward to another four years of the only expressly anti-American president ever.  If partisanship was the lodestar of Churchill’s political life, dishonesty was that of his ally.

I would also note here that FDR was very much a late-comer to the notion that Hitler and national socialism were things which needed exterminating at any cost.  If Hitler had as his next-door neighbor Japan, instead of Poland and France, you really have to wonder whether the U.S. would have gone to war against him at all.  If he’d undertaken to rid the African continent of its native population, instead of Europe of its Jews, would Roosevelt have put any effort behind amending the neutrality laws, or pushing Lend-Lease through?

In any event, the story of the U.S.-British alliance in World War II is an illustration of the thought Stalin was getting at when he once asked someone what he thought the Soviet Union weighed.  The unspoken question being of course what was to happen to the poor individual on whom that weight chose to fall.  Once the wealth and manpower of the U.S. were tossed into the scales of the Western alliance, Churchill and the British were doomed to becoming what they in fact did: junior partners asked to shoulder the burden and die in the process, but beyond that to take what scraps might be handed them.

Not that Churchill and the British were necessarily the saviors and strategic geniuses that might have Won the War Overnight if only the U.S. had done as told.  One of my favorite quotations from Geo. C. Marshall, when — yet again, for the umpteenth time — Churchill was flogging his notion of invading the Balkans, a man-killing battleground in which the chief advantages of the U.S. — massive hardware in the air and on the ground, deployed on massive scales — would have been effectively neutralized, all to be launched by invading Rhodes, was the blunt observation, “Not one American soldier is going to die on that goddam beach.”  End of conversation.

A recurring element in this book is quotation from the diary kept by Field Marshall Alan Brooke, the chief of the Imperial General Staff.  To say that he thought poorly of everyone except himself is understatement beyond the call of duty.  He thought everyone in every room he was in was a moron who had no strategic vision at all, didn’t know his business, was a footling amateur.  It was Brooke’s self-consciously shouldered cross to have to bear with all those drooling imbeciles.  This is a book about Churchill, of course, and so we don’t get much idea of what alternatives Brooke proposed, in light of the constraints of both the political realities of the situation and the material realities of time, manpower, and hardware (a quick check on Amazon.com shows only an edition of his war diaries, but no proper biography).  Reid does observe in several places that a key element in understanding the differences in strategic visions between the Americans and the British is that the British commanders, being raised with the dynamics of sea power as part of their background intellectual fabric, thought like sea generals, the Americans thinking like land generals.

Perhaps that’s true.  And perhaps in a war of smaller scale the strategic approach would work of continually shifting about the perimeter of a vast land power, probing for weak spots to attack and exploit, and if not playing it by ear then nonetheless allowing one’s specific actions to be guided by results on the ground as they unfolded.  But I beg leave to question whether when you’re steering around hundreds of thousands of troops, backed by logistics chains thousands of miles long, with the days of living off the land decades in the past, and the outcome of battle driven as much by how fast a magneto can get from Dayton, Ohio to the Meuse River in France as it is by the niceties of wheel, pivot, and entrenchment, that approach of we’ll just nip ashore here and there, and see what happens will work.  I am surely doing them an injustice on at least some level, but in a world in which the Dodge 2½-ton truck has claim to be the weapon that won the war (the Red Army marched to battle in U.S.-made lined boots, and its equipment rode Mopar), I get the impression that F.M. Brooke’s thinking was more than a little tilted towards the world of the Retreat from Mons.  The Old Contemptibles marched themselves out of the tidal wave of field gray.  In contrast, those trucks don’t run on hay that you can get from any pasture you pass.  They and their fuel and parts have to move as seamlessly as possible from their point of manufacture to the front.  Places with poor transportation networks, lack of access to deepwater ports, and with rugged terrain are just not conducive to moving modern armies.  Going ashore in the Balkans would have frittered away the one advantage the inexperienced Americans brought to the table: sheer mass of men and material.

At any rate, I think Reid did a worthy job of discharging his promise to Manchester.  There are a few places in the book where ordinary bad editing sets one’s teeth on edge (this seems to be my fate, that some of my favorite books have stuff that wouldn’t pass a WordPerfect spell checker, like several spots in Paul Johnson’s The Birth of the Modern).  There’s a place where the French soldier is a “poliu,” even though elsewhere it’s invariably given correctly.  Then there is the bad fact-checking of identifying Tirpitz as a “battle cruiser.”  And then there’s the statement that Churchill was “nearing early middle age” when the Wright brothers flew at Kitty Hawk.  Huh?  Churchill was born in 1874; the Wrights flew in 1903.  My math tells me that would make Churchill in the neighborhood of 29 years old.  Whatever 29 may be it is emphatically not middle age or even close to it.  But all those are penny-ante quibbles.

The book’s a terrific read, and coming to the end is a disappointment.  If that’s the measure of a book’s success then Brer Reid’s done a very good day’s work.  I just wish Manchester were here to enjoy his friend’s success with him.

Aversion Therapy 101; Or, the Bourbons Ride Again

Posted on by

The French discover that in an era when you don’t have a captive tax base, you can’t just start ratcheting up folks’ tax burdens.  If they can leave, they will.  Once upon a time the French kings, like kings everywhere, plundered the Jews until there was nothing left to plunder, at which time they kicked them out (not omitting to kill several thousand on the way out the door, of course, just because, dontcha know).  Today’s functional equivalent of the Jews aren’t quite so constrained in their movements; they can get out the door first.

Nowadays when people and capital are ever-more detached from any particular situs, if you start doing stoopid things like enacting taxes on financial transactions, well, they’ll just up and move their dealings elsewhere.  Or they’ll shift into transactions that aren’t so heavily taxed.

This is news to the French government.

Without waiting for its EU neighbors, France enacted a tax on financial transactions in certain securities of firms having a net worth of € 1 billion as of 1 July 2012.  If a security subject to the tax is traded on a French exchange, the purchaser (not the seller) owes the tax.  The tax is not levied on all financial transactions, nor among the securities of all issuers.  Some securities traded on the Paris exchange are subject to the tax (mostly securities of the larger firms), and some issuers (mostly smaller firms) are not subject to the tax, and some kinds of securities (such as derivatives) are not subject to the tax.  In other words, the French, bless their little Gallic hearts, have created a laboratory experiment.  If you have two securities identical in all material respects (say, one share each of common stock in two firms in the same industry, with similar earnings per share, similar debt loads, similar cash flows, etc.) except that one is issued by an entity subject to a specific tax levied on transactions in that security and the other not, which security would you expect to see traded more frequently?  Or let’s say that you have the same issuer, but of two distinct securities, one of which (say, a share of common stock) is subject to the tax, and the other of which (say, a derivative) is not.  Again:  Which gets traded more frequently?

The results are in:  In August the French cranked up their already-introduced tax.  Granted, it’s only 0.2% of the value of the transaction, but that percent of a sufficiently large number is still a pretty damned big number.  So someone has compared the May-July trading data for securities traded on the Paris exchange versus the same securities from August-December.  What they found is that 99 securities subject to the tax experienced a 18% drop in trading volume, while 93 securities not subject to the tax saw an 16% growth in volume.  Hmmm.  They also noted that investors seem to be moving as well into securities that are exempt from the tax, such as derivatives.

The Paris exchange’s competitors (the DAX, among others) also experienced volume loss, but by less than ten percent.  So while pegging a specific number to the shift is difficult, it’s pretty clear that the increase in the tax is in fact moving would be “donors” (for quite a few years I was on our local humane society’s board of directors, and during that time I got familiar with the fact that most veterinary practices keep one or more “donor” animals around the premises, for the specific purpose of having blood drawn from them; the same logic applies here) from taxed to untaxed issuers, and from taxed securities to untaxed securities. 

Of the two trends the more worrisome, I’d suggest, is the shift to derivatives and other exempt issues, rather than that from larger to smaller issuers.  The reason that those securities are untaxed is that their actual value is so hard to determine because . . . because they’re so risky.  And their actual value to the purchaser is contingent upon events that generally have not occurred as of the date of purchase.  Mind you, one of the (at least stated) objectives of the Dodd-Frank financial abortion bill (or whatever its actual name is) was to get some sort of regulatory handle on derivatives precisely because they were so risky that not even super-savvy financial institutions, with guys dragging around sheaves of Ph.D.s in mathematics and statistics, knew how accurately to price them or to weigh their risks.  Thus, when they started to blow up back in 2008, they really blew up because all these suddenly-matured risks were theretofore unknown to the holders.  And so forth.  And now the French have adopted a tax policy which encourages more large investors to move their activity into precisely those issues.

Explain to me again how this is a good idea, as a policy matter?

And oh by the way:  The French had expected to raise € 1.6 billion from this little soak-the-rich scheme.  Looks like something more on the line of € 300 million is going to be the net.  That’s 80% less than expected.  Folks, you know what happens to a chief executive officer in the private sector when one of his signature initiatives falls flat by 80%?  He tends to become “the former CEO of BLANK.”

Predictably, the chorus is not questioning whether it’s a dopey idea to have such a tax in the first place.  No, the debate is around the proposition that it must be introduced on a pan-European basis.  Don’t these drooling savants have any idea that money is fungible, and that the same people who’ve bolted the French exchanges for the German or British will bail out for the NYSE, or Chicago, or Tokyo?  If you can’t keep your Jews in place, you can’t bleed them.  And the latter-day Jews aren’t going to sit still and take it; they don’t have to.  The socialists just don’t seem to get it that snuffing kulaks these days is like chasing gobs not just of mercury, but gobs of cyber- and synthetic-mercury around a plate that is spinning phenomenally fast in all three axes.  Stalin, their hero, could send his troikas of Chekisty into the countryside and liquidate them by the hundred.  They couldn’t move fast enough to avoid him.  Times have changed since the 1930s.

All of which goes to show that it wasn’t just the Bourbons who neither learned nor forgot anything.

Sounds Like a “Reasonable Restriction” to Me

Posted on by

Let’s see:  You’re in a country which is — at least insofar as the riff-raff are concerned — explicitly run according to the precepts of the Religion of Peace.  We ignore for the moment that the personal lives of the super-dooper wealthy, including pretty near all the members of the ruling family, more closely resemble something from the latter days of the Roman Empire, only with less restraint and vastly more money.  One of the precepts of the government is that public practice of any religion other than the Religion of Peace is a disturbance to public order, which is not that far-fetched, in that one of central tenets of the Religion of Peace involves the forcible conversion or extermination of the adherents of any religion other than the Religion of Peace.

 Thus, if you catch, say 40-odd Christians plotting — privately — to celebrate Christmas, well, you’ve done a good day’s work by arresting them and seeing to it that the gross provocation to the adherents of the Religion of Peace does not in fact occur.  Which is what just happened in Saudi Arabia.  This, folks, is crime prevention as it ought to be. 

The Saudis’ swooping down on a house of Christians because they just might be a-fixin’ to observe Christmas is, I humbly suggest, no more unreasonable a restriction on those folks’ freedom of conscience than the proposals by Dear Leader, his unpaid interns (for which read: the mainstream media), and his sycophants in Congress that my rights under the Second Amendment must be infringed (gosh; where have I seen that verb before?) because someone other than I may — just might — use the same freedoms that I enjoy in order to commit something that is and would be a crime no matter whether he used the same rights or something else.  I mean, Adam Lanza’s slaughtering 20 children and six adults (other than himself) would have been the crime of murder whether he did it with piano wire, a machete, a baseball bat, a full-automatic Uzi machine gun, or by tying their hands behinds their backs and shoving tennis balls down their throats.  He’s willing, perfectly willing, to commit mass murder, but Dear Leader expects him to flinch before a ban on scary-looking semi-automatic weapons?  Because the Lanzas of this world just maybe might use a scary-looking semi-automatic weapon to commit mass murder — just like those 40-odd Christians in Saudi Arabia might have provoked the Religion of Peace into yet another public rampage — my ability to defend myself and my family must be pruned back to a level thought “reasonable” by people who receive armed protection whenever they’re out and about.

Many years ago Justice Oliver Wendell Holmes, Jr., set up a rhetorical question suggested by a particular argument.  He then observed (I’d thought I’d run across this line in a Supreme Court opinion, but a quick Westlaw scan didn’t pull it up; maybe it was in an article, book, or interview), that “to ask the question is to answer it.”  To assert that a liberty interest guaranteed to me by the explicit language of the Constitution itself must be infringed because of what some unknown person, under unknowable circumstances, might hypothetically do if extended that same liberty, is to refute the assertion.

Well, Yes Little Boy, in Fact You’re Right: He IS Naked

Posted on by

The Germans, who as one of the world’s top exporters have an incredible amount to lose if and when the shenanigans in Washington crash the American economy for the second time in just over four years, are getting more than a little tired of sermons from the Mount of Blather.

The “Hochmut” (which you can easily translate as “condescension,” or “arrogance,” or even “chutzpah” to some extent) with which Tim Geithner instructs the Europeans is now called out.  What they call “the American Kaiser” is officially pegged as naked.

What’s interesting is that, while the author notes that the Republicans are blamed for the impending fiscal disaster, they’re not the only ones to blame.  He specifically calls out Dear Leader for indulging his populistic urgings.  The Republicans are concededly correct that tax hikes for the rich will burden both the economy in general and numerous businesses in particular.  The authors notes that the confidence of business has collapsed and consumer confidence is following in its footsteps; he mentions that this year’s Christmas shopping season was the worst since 2008.

Looks as though our wonderful governing classes are scaring the bejesus out of pretty much everyone, not just Main Street.

Don’t Worry; It’s For Your Own Good

Posted on by

I’ll believe that statement coming from the government right about the time that they convince me that “committees of public safety” have anything to do with the public’s safety.

The feds want to require all new vehicles sold after September, 2014 to have a black box, an “event data recorder,” installed by the manufacturer.  We have to presume that they’ll be forbidden to include an operator over-ride.

We are told these recorders will measure things like throttle position, number of passengers, speed, seat belt usage, braking, etc.  They don’t mention steering wheel position but since that’s something measurable you have to assume that would be on the list.  We’re told that recording and transmitting this data — possibly via remote link — is supposed to increase automotive safety.  Really?

Given the number of accidents that are caused by operator error, expressed as a percentage of overall accidents, what precisely about vehicle design, which is the only thing that can be changed by the manufacturer, is going to smarten up the driver?  They can already simulate perfectly head-on collisions at any speed they choose, off-set collisions, t-bone collisions, rear-end collisions, roll-overs of any particular length and launch speed.  In these simulations they can with remarkably advanced test dummies measure all manner of physical forces to which the occupants are exposed.  They can measure all these things much, much more comprehensively and precisely than they ever will be able to using these data boxes.  We’re going to have the boxes “trigger” during, say, an evasive maneuver.  Since the principle stress point of evasive maneuvering (which they can also replicate and measure precisely in tightly controlled environments) is the contact between the tire and the road surface, and half of that equation is the quality and character of the road surface, these black boxes are going to be missing half the necessary data to make an intelligent evaluation of their collected information.

The long and short is that I simply do not accept that the physics of automobile operation are of such a nature that these recorders will be of any material assistance in improving automotive design.  Where they’ll come in jolly handy is in defending bogus lawsuits alleging things like “sudden vehicle acceleration” (see P. J. O’Rourke on the subject).  They’ll also be a gold-mine of revenue for the manufacturers to sell to insurance companies and credit ratings agencies (persistently risky behavior is not a good credit risk).  That’s something that can be regulated as between the manufacturer and its customers.

My particular concern is that they will also prove very helpful to a government intent of surreptitiously monitoring its citizens.

The government routinely subpoenas cell phone and landline records.  It can obtain the location data from any cell phone out there.  The government at least can tap into any telephone call, anywhere.  It is in the process of establishing an enormous center the purpose of which will be to monitor every e-mail that crosses a U.S. server, and to parse it for . . . well, we don’t know what they’re looking for.  It can and does obtain credit card transaction histories.  Do not tell me that remotely-accessible vehicle data recorder information will not be equally routinely accessed, and used.  Certain administrations have a habit of — inadvertently, I’m sure — leaking confidential information regarding its enemies to people who know how to use it.

In The Lives of Others, the Stasi at least had physically to bug the guy’s apartment, and then physically station a live agent up in the attic with headphones.  That need alone puts some limit on the ability to monitor and therefore tyrannize a population.  With the ability to squash 64 gigabytes or more onto a thumb drive, and storage available by the terabyte that can fit into the palm of your hand, where is the technical limitation?  These data recorders are supposed to “trigger” only during certain events?  Right; I believe that.  A chip the size of my little finger nail could record several hours’ trip worth of data, and then be remotely accessed, the data transferred, and the memory dumped and ready for re-use.  By people unknown to me.  With Bluetooth technology now available on even lower-end cars, how hard would it be to include in the data collection software a voice recorder?

You tell me that manufacturers will not be told that either they build in the ability to record indefinitely and on remote command, and disclose to the government the protocols necessary to do it, or they can expect the IRS and the SEC to audit them, their directors, their officers, their secretaries, and the guy who runs the lunch counter into bankruptcy.  Don’t think that will happen?  It’s already happened once.  That’s how the Chrysler secured creditors were “convinced” to give in to Dear Leader’s theft of their collateral.  Their CEOs were told that not only their companies but they personally and everyone who worked in their offices — everyone — would be ruined by audits.  The pernicious thing about such goings-on is that such a directive will not appear anywhere in the Federal Register or the Code of Federal Regulations.  Congress sure isn’t going to be told.  Such paper trail as does exist will not even be in the NHTSA but in some other agency.  The NHTSA may not even know it’s being done.  Maybe the DOJ, which just wrapped up an illegal gun-running operation, will do it.  Maybe the NSA or the CIA, or even the Pentagon, which runs the clandestine center from which Dear Leader’s “disposition matrix” is implemented, will be the point-man.

 I’m just waiting for someone to tell me that, “It’s for the children.”

Here is where you can find out how to contact your Congressional delegation and demand that they strangle this monster in its cradle.

Well Which Is It?

Posted on by

Asks the parole board of H. I. McDonough in Raising Arizona, when he tells them he’s done re-formed himself.  “Are you just tellin’ us what we want to hear?” asks one.  Another joins in, “‘Cause we just want to hear the truth,” in response to which H. I. observes that in that case he reckons he is telling them what they want to hear.  “Well, which is it, young man?” asks the first.

For ten years now we’ve been assured, just positively assured by all the Deep Thinkers™ that them Horrible Bush Tax Cuts (passed by a Republican House and a Democrat Senate:  Folks seem to have forgot that Bush 43 only had a solid Republican Congress from January, 2003 until January, 2007; his first and last two years he had split Congresses) was just nothin’ more than a flagrant give-away to the rich.  Now they tell us that if those cuts expire the Clinton-era taxes on everyone and his cousin will go right through the roof.  Including my taxes.

Now wait just a damned minute here people.  Either those tax cuts provided no relief for middle-income America or they did.  If they provided no such relief then their expiration can impose no burden.  If they did provide such relief, then in fact they were tax cuts for everyone who in fact paid taxes (you can’t give a tax cut to a guy who’s not paying them in the first place; a “refundable credit” is a bogus marketing gimmick used because “direct wealth transfer” doesn’t sell very well) and were not just “tax cuts for the rich.”

So when I’m now told that expiration of them Awful Bush Tax Cuts will crank my tax burden up to the breaking point (and it will, by the way), and I’m told that by the same people who for a decade have labelled those tax cuts as having been just for “the rich,” I’ve a good mind to call bullshit on them all.

Which I now do.

™”Deep Thinkers” is trademarked by (well, maybe not exactly trademarked or copyrighted, but I got the phrase from him) Thos. Sowell.  I use it without attribution but with much gratitude for his work.

Dots, Connected

Posted on by

“No good deed goes unpunished” is a maxim that pretty much everyone except the irredeemably foolish learn at some point, if only temporarily.  “No good intention goes unperverted” would be the corresponding maxim of government.

The Community Reinvestment Act was passed in 1977, back in the waning days of blind faith in government “initiatives” to accomplish just about anything, with the stated goals of increasing the number of Americans who lived in their own house.  On its face this seems to be not just a morally commendable goal — “landlord” comes in neck-and-neck with “tax collector” and “kulak” for most-reviled occupation — but Good Policy as well.  There are hosts of desirable socio-economic data which are positively correlated with home ownership, and equal numbers of undesirable data which are negatively correlated.  So by increasing home ownership we increase the Good Things and decrease the Bad Things.  All at the margins, of course, but hey!, it’s still a twofer and every step forward is a step forward.  And all that, right?  So let’s throw it against the wall and see how much closer we can get.

How the statute worked was that it loosened the loan underwriting requirements that banks were otherwise required to observe in making residential loans.  “Loan underwriting” is the technical term for “those criteria by which a bank determines whether any particular loan is an acceptable risk.”  Much shorter and easier to remember, in other words.  Generally banks, the deposits of which are insured by the FDIC or its S&L counterpart, FSLIC, or those which are to be guaranteed by an agency of the federal government, such as the VA or the FHA, or which are to be purchased by an entity which is backed by the federal government, are required to make some sort of effort to figure out ahead of time whether any particular loan is likely to be paid back, and not to make the loan at all if the answer is too close to “no.”  There are a whole host of things that banks look at, such as income-to-fixed expense ratios, the amount of the loan expressed as a percentage of the collateral’s value, the prospective borrower’s track record in paying his other creditors, whether the borrower has, within a certain period of time before, sought the protection of the bankruptcy system, the prospective borrower’s other unencumbered assets expressed as some percentage of the prospective loan, etc. etc. etc.  Generally those lenders are required to verify what their borrowers tell them.  They do that by requiring the production of tax returns, bank or investment account statements, or obtaining information from unrelated third parties like appraisers of the proposed collateral, or credit reporting agencies which collate information about the proposed borrower.  All well and good, and proper when you consider that, however imperfect it may be in that function, the past is in fact the only thing we have to rely on in figuring out what the future is likely to look like.

The CRA explicitly provided that for certain borrowers, in certain locations, and under certain circumstances, a lender was permitted to look at a loan application that fell into the “don’t make this loan” territory and ignore the warning signs.

A quick aside:  Those folks who think that banks just made up all this stuff about loan underwriting requirements in order to deny loans to people actually able to pay the money back, just because . . . well, just because, are fools.  Banks do not make money if they do not make loans.  OK?  They owe the money on their deposits, including interest; those deposits are obligations on the bank’s books.  Banks cannot get money to loan without themselves borrowing it, from their depositors, or from the Fed, or from other banks.  The only way they can pay the interest is by charging interest and then actually collecting it.  If they make good loans, they stay in business.  If they make bad loans, they cannot pay their debts and, once they’ve exhausted their own capital, they go out of business.  Period.  Banks which willingly pass up good loans are leaving money on the table.  Banks which by bigotry exclude entire classes of borrowers or depositors because they’re . . . well, not people like us, create business opportunities for others who are savvy enough to court those good loan and deposit customers.  Like the Italian-American Immigrant Bank, which loaned to that group because they understood that Italian immigrants paid their bills.  You may have heard of them; they’re now known as Bank of America.  Don’t think I’m just making this up, either; Gary Becker won a Nobel in economics in part for his study of the economics of unjustified invidious discrimination.  He showed that actors who indulged their bigotry under circumstances where there was not some concrete basis for doing so (such as, for example, not serving a drunk stinking of his own piss and who also happened to be black, versus someone who just decided he wasn’t going to do business with the 20% of the town’s population that was black) paid a price for it, and that in a free market, without direct or indirect government subsidy of such behavior, it tended to go away because the people who paid the price realized they were paying it.

The mildly-common-sensical reader will immediately note a few problems with the thinking behind the CRA.  For starts, it treats the genuine economic considerations behind loan underwriting as if they in fact did not exist.  Telling Lender X that it may ignore adverse loan underwriting results for a specific loan application does not mean that the loan is now less likely to prove to be a bad loan.  Secondly, it assumed that because A and B are positively correlated, it must be because A causes B, where A is home ownership and B is positive socio-economic attributes.  This of course not only confuses correlation with causation (the first is a statistical phenomenon that can be determined based upon counting instances of A and B within a population; the second is a logical relationship the existence  and directionality of which can only be determined by experiment and examination of the specifics of the population in question), but it made the assumption that the direction of causality was from A to B.  Of course, what if it’s B that causes A, or what if A and B have no direct causal relationship but rather are both results of (that is, both are caused by, rather than cause) some other factor C?  Artificially increasing A is simply not going to produce more of B in either such case.

In 1995 the enforcement mechanisms under the CRA were significantly sharpened.  Now your examiners were authorized to determine how many CRA loans you ought to be making, and if they found you weren’t making enough, they could fine you.  Really.  No kidding.  You exposed yourself to liability to the government if you did not make sufficient loans to people who could not reasonably be expected to pay them back.  At about the same time, Fannie Mae and Freddie Mac decided, on their own, that they were going to increase the percentage of their total loan portfolios represented by “sub-prime” loans (in other words, loans made to people who weren’t likely to pay them back, including specifically CRA loans) to up to 50%.  You read that number right:  Fannie Mae decided that it wanted to have half of its loans consist of paper that was more likely than not worthless.

Well now.  What happens next?  In point of fact sub-prime loans, as a percentage of the total loan market, went through the roof.  And the race was on.

Audit of a bank’s CRA compliance was no empty threat.  Bank of America within the past few months paid $25 million to settle a CRA enforcement action brought by the DOJ.  That’s a lot of money to pony up because you tried not to lose money on bad loans.  But that’s the perversity of the incentive system we created.

Bank of America is of course a large bank.  But what about smaller banks, community banks?  Well, let’s say that I work for Community Bank X, and I know that my bank has a corresponding relationship with Fannie Mae.  That means that I know, for a fact, that every loan which I make which fits within the loan standards established by Fannie Mae, whatever those standards may be, I can originate and have sold and off Community Bank X’s books before the ink is even dry on the closing documents.  In other words, I know that, so long as I have a loan applicant who fits within Fannie Mae’s underwriting requirements, I can make that loan with zero effective risk to my bank.  Community Bank X only has a re-purchase obligation in the event the loan didn’t comply, at the front end, with whatever requirements Fannie Mae had in place at the time.

Let’s see how that plays out:  I have a loan applicant come to see me.  I can look at their application and just about guarantee that they’ll never, ever be able to repay this money.  But wait:  This application in fact does fit within the You-Gotta-Be-Kidding-Me program recently rolled out by Freddie Mac or Fannie Mae.  So I can make this loan and in less than 24 hours Fannie or Freddie will have taken it off my hands and if three years later the whole thing blows up, it doesn’t do so on my desk.  Do I make the loan?  Well, if I do not make the loan, and the applicant is a member of a pet constituency, or the proposed property is located in a CRA area, what I am doing is risking tens if not hundreds of thousands of dollars in defending either a private civil action alleging illegal discrimination or a DOJ enforcement action for failing to comply with the CRA or Fair Housing Act, or whatever.  Those risks are uninsurable, meaning the bank gets to pay to defend them and then pay out of pocket any liability.  Even if the bank wins the discovery process will absorb hundreds of thousands of man-hours and attorney’s fees and forensic accountant’s fees.  So do I make the loan?  Hell yes I make the loan.  Have I done anyone any favors?  No.  Is this person any more likely not to lose his home to foreclosure at some point down the line?  Not in the slightest.  But I’ve protected my bank from liability; we can even brag on our website about how we aggressively support the Community Reinvestment Act.

Note, by the way, that even if my lender is for whatever reason not subject to the CRA, or the loan in question is not a CRA loan, so long as the prospective borrower fits within whatever cock-eyed Fannie Mae loan programs are within the scope of my lender’s corresponding relationship with Fannie, if I refuse the loan my lender is still subject to liability.  And in truth how do I justify refusing to make a loan that someone solvent has already promised to buy off me so that my risk in making the loan is zero or close to it?

And now some folks have come along and demonstrated by precise examination that yes, in fact the CRA and its enforcement did increase the loan risk accepted by large lenders in CRA areas.  They conclude pretty plainly that the Community Reinvestment Act in fact materially contributed to the subprime lending bubble and therefore to the subsequent crash.  In fact they allow that because of the constraints of their data sampling it’s likely that their study understates the impact of that misconceived statute.  They only looked at large lenders who were in the midst of CRA examinations.  They observe, “If adjustment costs in lending behavior are large and banks can’t easily tilt their loan portfolio toward greater CRA compliance, the full impact of the CRA is potentially much greater than that estimated by the change in lending behavior around CRA exams.”  In other words, the study’s authors admit that their sampled lenders might have been engaging in Potemkin lending, but that they can’t exclude that the observable behavior extended outside their window of observation.

The above link is to Reason magazine; the actual study is not downloadable for free (except to certain people), but here’s the link for those who wish to pay.

By the way, the Community Reinvestment Act remains out there, unchanged, over four years after the disaster it contributed to exploded into the worst economic downturn the country has experienced since the Great Depression.  Just like the Belgian farmers still plow up, and occasionally get blown up by, old artillery shells from World War I, the CRA still harbors its lethally defective assumptions beneath the American banking system.