Thursday, April 28, 2016

Distant lands of which we know nothing

Forty-some years ago, Le Monde, the most prestigious newspaper in France, ran a series of portraits of great cities. For the USA, it chose Chicago.

Among the reasons it gave for Chicago's rapid advancement was that, unlike Boston, it had never been ravaged by a great fire.


Chicago was then the second city of America and I wondered, is what I think I know about France's second city (Marseille) as weird as what Le Monde thinks it knows about Chicago?

Local knowledge counts for something. I think of the Monde story often, and again today when I read a story about Maui's last sugar harvest in The Guardian.

It is an awfully bad story, although no different from others I have read in the San Francisco and some other papers, all of them based on propaganda from the anticane folks. I am pretty sure that all of them were written by vacationers, either staff or free-lance, who write off their vacations on their taxes by claiming to be doing reporting work. The author, Stephen McLaren, is a freelance photographer.)

(A practice I consider unethical.)

A fair indication of the reliability of the story is that McLaren gets the name of Hawaiian Commercial & Sugar Co. incorrect.

He did not bother to interview anyone from HC&S or even from anyone in, say, the general ag community.

Saturday, April 23, 2016

The hemp campaigns

Perhaps I should explain that I am a man without party; a New Dealer. The 2016 Democratic Party has few things that appeal to me; and the Republican Party and its antidemocratic theocrats and degenerates nothing at all. But that doesn't mean I cannot enjoy the parade.

So these posts about the contest are merely about the race and imply nothing about the wisdom or rightness of any particular platform or policy proposal.

From Delaware, we have a weird report of a Trump (but ex-Carson) consigliere threatening Delaware party leaders about whom they should select as delegates. Trump hardly seems to be in a position to fulfill threats, and one thing I've learned from following party politics is that if you make threats, you had better complete them and leave no survivors. Because if you frighten or antagonize party men and women, they have a thousand ways of taking their revenge; especially in a small and probably tight-knit little party like Delaware's.

I can gleefully imagine the deputy chairman of the Republican Party of Kent (formerly Whorekill) County, Delaware, pop., 160,000, standing up in Cleveland and skewering Trump on worldwide teevee.

However, I doubt that will happen. despite his repellent persona and tactics, I still think Trump will win the nomination before the convention.

And he can thank Kasich. The only reason I can think of for him to keep running is the give-'em-enough-rope strategy: Trump and Cruz are so repellent that the party will, somehow, reject both and, for lack of anything better, turn to loyal Kasich.

This won't work, second because the pols are able to count. One-quarter of voters are Republicans, and one-tenth of those have shown themselves willing to vote for Kasich -- and sometimes then only because they would have  voted for a pinata stuffed with unwashed gym socks just to keep a vote from going to Trump.

Kasich is delusional if he thinks he can expand that core of one-fortieth of the electorate into a majority. And before the party leaders will let him try, they'll bring in somebody like Romney. Or Pence. There are several possibilities.

But first because there isn't going to be an open convention. Trump isn't going to do poorly in the Midwest and West. His supporters -- aggrieved white racist losers -- are distributed evenly throughout the country.

The Democratic campaign involves a different kind of hemp. 

In January, when the Sandersistas discerned a popular primary majority through clouds of pot smoke, they were saying that superdelegates should follow the vote of the rank-and-file. Now that even the stonedest of them understands that Clinton will easily win most of the votes, they are saying superdelegates should vote for the future of the party by switching to Sanders -- Clinton is currently ahead in superdelegates by 12 to 1.

Aside from the rank dishonesty of the argument, it neglects (as Trump's man Uddo neglected in Delaware) the way party politics works. What has Sanders ever done for the party? Why should people who have worked for the party -- often long, unpaid hours -- for 10, 20, 30, 40 years turn their organization over to a man who didn't even bother to join until a few months ago?

Not only that, but a man who has let his operatives accuse them incessantly of rigging the vote, being corporate whores, cheating and pulling dirty tricks?

Clinton will handily earn enough delegates to win without the superdelegates, but even if somehow she misses, the idea that over half of them would abandon the party in favor of a faction that degrades and insults them is beyond pot-happy. Those guys must be smoking batu.

Monday, April 18, 2016

Making themselves (almost) irrelevant

Not since 1972 and the credentials maneuvering at the Democratic National Convention (where young pol Gary Hart cleaned Boss Daley's clock) have the party rules meant as much as they look to do for 2016's Republicans. Nate Silver has a detailed look at them.

However, setting aside the way they are playing out tomorrow, I was struck by how remarkably foolish the New York party selection rules are; any year, not just this one.

The Democratic rules are uncomplicated and in almost any scenario will give the candidate with the larger statewide vote more delegates. There is one way in which that doesn't work.

Most delegates are awarded tree per congressional district, winner take all. Several states, including California, have similar rules. If Sanders, say, piles up huge margins upstate and, contrary to expectations, loses but by small numbers around New York City, then he could win the state popular vote but get fewer delegates than Clinton. But generally, each candidate should end up with delegates in close proportion to his vote totals.

Not so with the Republicans, who have a system that seems designed to keep New York from having much influence on the choice, in those uncommon years when the choice is sill unsettled this late.

In a two-candidate contest, the Republican rules work like the Democratic rules. But with three or more candidates, unless it's a runaway for one everywhere, the Republican rules are designed to cancel out advantages for  anyone.

In each district where there is no name with an absolute majority, the top finisher gets 2 delegates, and the second place name gets 1. So, if the two strong candidates are stronger in one region than another, for every advantage Trump gets by leading in a New York City district, he loses it to Cruz in upstate districts.

In a close contest, its seems probable that whoever gets the most delegates will end up with just a few more than the second-place man. It is not out of the question that the net impact of the millions of New York Republican votes could have less meaning at the Cleveland convention than the 130 Republican votes in the Virgin Islands.

Unlike at Cleveland, the delegates in the Vigin Islands were packing heat, but -- contrary to what Wayne LaPierre says -- that did not make their society polite. Far from it.

There is an additional complication in New York. In any district where third (or lower) candidates don't get 10%, those votes are thrown out, and it then becomes a winner-take-all district with the top finisher getting all three delegates.

Aside from the fact that throwing out votes sounds undemocratic (and unDemocratic), this makes predicting the delegate hauls tomorrow difficult.  Kasich has often shown himself unable to get to 10%, so I can (just barely) imagine Trump getting every district delegate. (There are an insignificant few statewide delegates.)

Or, I can imagine Cruz getting some threes upstate while Trump gets a majority of the delegates but not nearly the 60% the polls say he can expect in statewide votes.

I still think Trump wraps it up before the convention. The punditry expects him to do less well in the West, but he has not been a regional candidate like Wallace or Goldwater. Silver expects him to be around 75 delegates short of a first-vote majority.

I made a lot of money in the prediction markets in 2012, in part because I accepted Silver's analysis of the general election. But I don't think his poll-of-polls approach works so well, either for low turnout primaries or for Trump and his Trumpeters.

I do agree with Silver than Sanders has no chance and my expectation is that Clinton will get in the neighborhood of 160 delegates to Sanders's 131 tomorrow. But he won't drop out because he's ego-tripping. Has been since the start.

Also, if he was so smart, he should have become a Democrat a while back if he wanted the nomination of the Democratic Party. But I don't think he is so smart.


You cannot make things simple enough for some people.

Sunday, April 17, 2016

Words sting

It has been nearly 15 years since the attacks of September 11, 2001; and about 23 years since the first attack on the World Trade Center. It is a safe bet that most Americans knew little about Islam and antiAmerican Islamism then. And even less now.

The linked story concerns an Iraqi-American who was removed from a Southwest Airlines plane because a passenger heard him "talk about martyrdom in Arabic, using a phrase often associated with jihadists."

It was, of course, nonsense, in the sense that the complaining passenger does not know Arabic, so she could not have heard him "talk about martyrdom," even if that was what he was doing.

I would not bother linking to this story, interesting though it is, except for the reaction of Southwest Airlines. Here are the statements it provided to the Times:

  “We regret any less than positive experience a customer has onboard our aircraft,” the company said in a statement. “Southwest neither condones nor tolerates discrimination of any kind.”

 Brandy King, a spokeswoman for Southwest Airlines, said the company was unable to comment on the conduct of individual employees.
 Oh, really?  And who is stopping your company from explaining its outrageous conduct?

I have been reading a book (review coming soon) by a flight attendant about, among other things, the detailed training flight attendants get in how to deal with passengers and their complaints. How difficult would it have been to ask the complaining passenger, "Do you speak any other language than English?"

Friday, April 15, 2016

Which is bigger?

The national debt or the national ignorance about the debt?

I suppose one way to think about it is to propose that the American educational system has failed because almost no one understands the simple and basic concept of a national debt. Not the editors at Time:

Not the Tea Party.

Does Donald Trump, the Teadiot darling? That's a curious question. (Bear with me. I will leave the formal demolition of the debt-is-a-bad-idea to more formal people. This post will offer some facts that, I am willing to bet, not many people know.)

Trump is clearly not averse to borrowing when he can find someone stupid enough to lend to him, but his 4 -- count 'em, four! -- bankruptcies demonstate he doesn't manage debt well.

The first country to create a funded permanent national debt in the modern sense was England in 1694. The vehicle was the Bank of England, which is still in business and doing very well, thank you.
Britain has never been out of debt since and the debt keeps growing. Yet the British are among the most prosperous people in the world.

The British understood the value of a safe investment in which its growing middle class could park their savings, since placing them with private banks was extremely dangerous. (This is one of many examples of how governments can accomplish goals better than private enterprise. Nobody has even lost a farthing in the Consols, as British government stock used to be called.  Consols were finally paid off last year, now replaced with more modern forms of public debt.)

There were earlier "national debts," of course, but usually considered the personal obligation of the sovereign. Sovereigns were very bad people to lend to, as Jacques Coeur and many another rich man discovered. The few medieval and early modern republics issued what we would now recognize as national debt.

These were called, in Italy, mountains of piety, and they were not always voluntary. Venice made capital levies on its rich citizens to pay for war, issuing bonds. In light of the recent controversy about vulture funds buying discounted debt from Argentina, Puerto Rio and other places, it is interesting that when Venice eventually paid off its bonds (which were 100 at par), it paid 2 ducats to holders who had bought on the secondary market, but 8 ducats to heirs of the original "investors" of a century earlier.

The United States got its national debt down to nothing during the "National Period" by selling off lands it had stolen from the Indians. It had the advantage of not fighting expensive wars or providing much in the way of public services in those days, except lighthouses and harbors. Global trade was not a bad word back then.

The Civil War put the nation into permanent debt, but this did not damage prosperity, which -- in terms of percentage expansion -- has never been greater. Holders of Confederate bonds lost everything.

The United States has never levied on capital, although that might have been a good idea at some periods, like 2003-present. Nor has it ever raised forced loans, although the pressure to buy War Bonds was very strong in 1917-18 and 1942-45.

The end of World War I was followed by a sharp depression from which the country never recovered, and it was feared that World War II would also be followed by a depression, unemployment and business failures. Debt saved the country's bacon, however.

In 1917-18, ordinary workers, who were paid little over subsistnce, could not buy much debt, but in 1942-45, thanks to minimum wages, unionization and oher excellent New Deal innovations, ordinary workers bought $140 billion in governemtn debt. In 1946, as the economy converted to peacetime pursuits, this enforced saving was unleashed in a tidal wave of home buying, car buying and furniture buying that at last ended the depression that had started in 1921-22.

For perspective, in 1944 the government ran its biggest debt (as counted in constant dollars) ever, $244 billion. So the war debt in the hands of average Americans was equal to about six months of allout deficit spending.

It helped that much of that $244 billion was invested in new factories, mills and mines. Most of these were put to profitable use after the war. Very, very profitable, since many of these valuable properties were turned over to private corporations for a dollar each. That is not the kind of deal that you or I are ever offered, so when some heir of World War II profiteers bitches about taxes and spending, throw that in his face. (It was not because the holders of great wealth were such great managers that their share of national wealth went up and up.)

The Time cover story that sparked off this post was not written by a staffer (though it must have been editd by the paid help) but by James Grant. Here is how the magazine describes him:
Grant is the editor of Grant’s Interest Rate Observer. His latest book, The Forgotten Depression: 1921: The Crash That Cured Itself, won the 2015 Hayek Prize
 Ah! Time turned its cover over to a Teadiot. Not everybody has forgotten the Crash of '21. Not RtO, not by a long shot.

As I have mentioned many times (working off the research of Rexford Guy Tugwell, perhaps the best of all American political economists), in 1921 about 1 in 4 Americans was a farmer or other primary producer (timber, fish) or depended on farmers for income. Although US industrial production expanded in the '20s, giving rise to an illusion called "Coolidge prosperity," the farmers who were wiped out virtually dropped out of the money economy. After great exertions, the New Deal began to get the farm economy reviving by 1940, but by 1950 technological innovations had rewritten the playbook. The yeoman farmer never did recover. (As Harry Truman remarked, in 1949, there were 2 million farming mules in Missouri; but they were being replaced by tractors.)

It is no surprise that a moron like Grant would win a Hayek Prize.

Thursday, April 14, 2016

Book Review 367: How Rome Fell

HOW ROME FELL, by Adrian Goldsworthy. 531 pages, illustrated.Yale paperback

Adrian Goldsworthy felt obliged to spend the first and last pages of “How Rome Fell” explaining that the answer, whatever it is, cannot be copied over as a cautionary admonition to the United States today.

Not that he does not draw conclusions. Some historians claim history does not teach lessons -- a silly idea equivalent to saying that you cannot learn from experience -- but Goldsworthy does not do so. He claims that superpowers, when they fall, fall from within.

When I was a boy in the South, the fall of Rome was a favorite theme of holy roller preachers, although these men were so ignorant they could not have found Rome on an Esso map of Italy. They were persuaded that it was the moral depravity of the Romans. They were too stupid to note that the decline leading to the fall coincided with the Christianization of the empire.

Edward Gibbon thought the fall was the result of religion and barbarism. A German historian counted at least 200 proposed causes.

Goldsworthy is cautious. For one thing, the decline can be fairly precisely started in the third century, and he notes that we know so little about that time that if we were equally ignorant about the 20th century, we would know there had been a Great Depression and two world wars but would not understand how serious they were.

Still, he dates the beginning of the end to the murder of Emperor Commodus and the civil wars that followed. Surprisingly, he offers no discussion about why the murder -- not the first of an emperor -- was so dire.

The reason was that Augustus, 200 years earlier, had not devised a rule for succession in the constitution of the empire. There was a vague feeling that sons should follow fathers, but Roman emperors did not have many sons, or if they had one, tended to die (or be murdered) when he was an infant. There was no plan for the death of an emperor without an heir.

The empire was basically the army, so the strongest, best-placed general grabbed for the diadem. And others, too, often enough.

Goldsworthy identifies a structural change that this system of musical chairs began: the later emperors stopped using senators as legates to command armies or undertake other crucial tasks. They were afraid of creating a viable rival.

But if senators could not be trusted, the emperor had to do everything himself, which meant leading the army. If campaigns were necessary at opposite ends of the empire, one would be left unattempted.

Although he says relying on a small aristocracy -- around 600 men -- “may seem odd in this day and age,”  especially since they were “amateurs in the modern sense,” the method worked well in the Roman context.

By keeping the ruling class wieldy, it allowed emperors to judge whom to trust and whom to keep away from temptation. And until the breakdown in the third century, senators did not think of themselves as potential emperors, which helped keep them contented as subordinate servitors of the state.

Expanding the upper leadership to the class of equestrians -- perhaps as many as 10,000 men -- meant an emperor lost intimate knowledge of whom to rely on and whom to fear.

This is a more subtle argument than barbarism and religion, and Goldsworthy is at pains to show that the barbarians were never numerous enough, skilled enough or united enough to do critical damage to such a strong empire. He has much less to say about religion.

No empire ever lasted so long. The western empire lasted around 1,300 years (though much of that period as a republic), the eastern portion much longer.

The other kind of rightwing child sacrifice

RtO has long opposed the ammosexual  practice of child sacrifice by firearms. There is another kind, though. As the Guardian reports:

He lost his faith around the age of five, when a baby died in his arms in the course of a failed healing. While elders prayed, Hoyt was in charge of removing its mucus with a suction device. He was told that the child died because of his own lack of faith. Something snapped, and he remembers thinking: “How can this possibly be God’s work?” His apostasy set up lifelong conflicts with his parents and church elders.
In just one incident, when he was 12, Hoyt broke his ankle during a wrestling tryout. “I ended up shattering two bones in my foot,” he said. His parents approached the situation with the usual Followers remedies – rubbing the injury with “rancid olive oil” and having him swig on Kosher wine.

Intermittently, they would have him attempt to walk. Each time, “my body would just go into shock and I would pass out”.

“I would wake up to my step-dad, my uncles and the other elders of the church kicking me and beating me, calling me a fag, because I didn’t have enough faith to let God come in and heal me, while my mom and my aunts were sitting there watching. And that’s called faith healing.”

He had so much time off with the untreated fracture that his school demanded a medical certificate to cover the absence. Forced to take him to a doctor, his mother spent most of the consultation accusing the doctor of being a pedophile.

He was given a cast and medication but immediately upon returning home, the medication was flushed down the toilet, leaving him with no pain relief. His second walking cast was cut off by male relatives at home with a circular saw.

An Idaho Democrat lawmaker introduced a bill to allow gummint intervention to save the children -- you know, typical socialist overreach and nanny-state meddling.  How did the Republican-controlled Legislature react to that?

Lee Heider, chairman of the Senate Health and Welfare Committee, refused to hold a hearing. The Guardian reports:

Heider’s repeated response to these claims was a welter of contradictions and bluster.

After telling the Guardian that no bill was lodged (John Gannon confirmed that he did, as was reported in local media in February) and that he had been told by the attorney general and the Canyon County prosecuting attorney that the laws did not need to change (both men deny saying this), Heider took refuge in the US constitution.

“Republicans didn’t feel the need to change the laws. We believe in the first amendment to the constitution. I don’t think that states have a right to interfere in religions.”
When pressed on the fact that children are dying unnecessarily as a result of exemptions, Heider makes an odd comparison.

“Are we going to stop Methodists from reading the New Testament? Are we going to stop Catholics receiving the sacraments? That’s what these people believe in. They spoke to me and pointed to a tremendous number of examples where Christ healed people in the New Testament.”

Tuesday, April 12, 2016

Book Review 366: Death in Hamburg

DEATH IN HAMBURG: Society and Politics in the Cholera Years 1830-1892, by Richard J. Evans. 673 pages, illustrated. Penguin paperback

In the 19th century, Hamburg was called “the most English city in Germany,” meaning that it was run by a merchant clique on the lines of Gladstonian liberalism: what today we would call rightwing conservatism with libertarian aspects. Free trade uber alles. It was a disaster.

When Richard Evans published his massive analysis in 1987, he explicitly compared it with the AIDS health problem, particularly the blame-the-victim and don’t-do-anything policies associated with Reagan.  I don’t find that comparison especially strong, but Hamburg 125 years ago perfectly aligns with the rightwing health disaster in Flint, Michigan, in 2016.

As Hamburg business and population exploded, its government firmly refused to spend money on clean water, pure food, sewage disposal, decent housing, health care or education. It was quick to spend tens of millions on a new port, which required it to make 20,000 poor Hamburgers homeless. Nothing was done to rehouse them.

 The prosperity of Hamburg was illusory. 70% of its residents lived in poverty, which meant slow starvation, except for the poorest, who starved quickly. So was its status as a democratic republic. Workers did not have a vote in local elections (although after the Second Reich was created, they did in Reichstag elections, always sending Social Democrats).

Power resided in a Senate whose members were co-opted and served for life. “Most (senators) . . . were incompetent, because incompetent senators were never removed from office.”

It was even worse, because senators ran the government departments: the ideal of common sense amateurism by men who had met a payroll guaranteed that administration failed even in day-to-day operations.

When Asiatic cholera returned in August 1892, the authoritarian but efficient and modern cities of Germany had infrastructure, public services and policies in place that completely suppressed the spread of disease. (Even Moscow and St. Petersburg were able to do this, although cholera raged through the rest of the tsarist empire, as well as the decrepit Austro-Hungarian Empire. Evans mentions only in a footnote that 266,000 subjects of the Dual Monarchy died, apparently in the ungoverned rural districts.)

In Hamburg 10,000 died in six weeks, sickened through the city’s unfiltered central water mains. (Active disinfection of city water did not begin anywhere until 1904, but filtration through sand was adequate to kill the cholera vibrio.)

It was worse than that. The merchants who ran the government conspired to fake health clearances so that ships with infected passengers left Hamburg to sicken cities in England and America. Nothing was to be allowed to interfere with trade. In the most devastating indictment of the murderous absence of any moral sense among unfettered capitalists, even after the epidemic was over, after briefly accepting – under the force of international public opinion – a policy of transparency, the Senate returned to its policy of hiding the presence of disease, so that additional thousands and millions of innocent people were to be exposed to fatal disease rather than having trade restricted.

Later, as Evans notes, the merchant elite in Hamburg supported the Nazi extermination of the mentally enfeebled and cooperated cheerfully in the persecution of Jews.

It was not merely that the capitalists were indifferent to the lives of distant people of whom they knew nothing. They were happy to poison themselves to make an easy pfennig, and the Senate refused to interfere, citing personal freedom as its justification.

In the 19th century, Hamburg’s food was adulterated and poisoned to an incredible degree. Not only in Hamburg, of course. Evans quotes an historian of London, John Burnett, who noticed “a moral dimension to food adulteration, for here we have an important section of the middle class accepting fraud and deception as a normal agency of commerce.  ‘Business morality,’ concludes Burnett, in words that might equally apply to Hamburg’s merchant and manufacturing community as to London’s, ‘was never lower than at the time when Christian observance was at its most ostentatious.’ “

If it sounds exactly like Michigan under the Republicans, it is because it is exactly like Michigan under the Republicans. And all of the Bible-humping, immigrant-hating, crooked politicians of today’s Republican Party. (Yes, there was an anti-immigrant aspect to Hamburg’s immolation, which was blamed not on the rich murderers who caused it but on the poor Jews who were passing through on their way from tsarist persecution to America.)

Saturday, April 9, 2016

Book Review 365: King Leopold's Ghost

KING LEOPOLD’S GHOST: A Story of Greed, Terror and Heroism in Colonial Africa, by Adam Hochschild. 366 pages, illustrated. Mariner paperback, $15

Before the massacre of the Armenians, before the collectivization famine in Ukraine, before the Shoah, there was Congo. It lasted longer than all three of those put together and killed more people than any of them.

It was capitalism in its purest form. Possibly that explains why it is never included in lists of the great modern atrocities.

Adam Hochschild drops right in, without any background about how Congo got to be the way it was when Leopold II, king of the Belgians, first cast his eye upon its investment possibilities. But it is worth pausing to note that Congo was, for its era, a stable, orderly, centralized polity until the Portuguese arrived with their Catholicism and firearms in the 15th century. The African ruling elite adopted Catholicism and Portuguese names and, like European Christian kings, set about ruining the peasantry for the greater glory of their lines.

Leopold and most of his family were head cases, but the motivation for his Congolese business appears to have been mere house envy. As king of a rich but small country, his income would not support the splendid palaces of the other kings.

Congo had ivory. Later rubber would be the main attraction but the bicycle and the automobile had not yet been invented when Leopold started. Leopold, a modern man, set up a corporation to exploit the resources.

Over 25 years, the series of interlocking corporations attained a byzantine complexity that researchers have never been able to completely untangle, but the key point is that they were private businesses. The government of Belgium had no interest in or control over what went on, and the area did not become the Belgian Congo until 1908, when a dying Leopold, under pressure from international public opinion, sold his businesses to the government.

In most times and places, capitalist enterprises are tempered somewhat by competing interests of government, religion, custom, other ventures or – it may be in some cases – the humanity of the capitalists. None of these factors operated in Leopold’s Congo. Maximizing profit was the only goal.

There was no civil service or government department involved. Leopold’s managers recruited whom they pleased, including Joseph Conrad, who left as soon as his contract allowed. Later, he reported what he saw in “Heart of Darkness.” Kurtz was based on a real person.

However, complete vertical integration (and thus secrecy) eluded Leopold. In those days, Britain controlled half the world’s merchant marine. Leopold’s managers had to use British shippers. Into that chink stepped E.D. Morel, an English shipping clerk who handled the Belgian business because he knew French.

Morel noticed that the ships going out contained lots of rifles and ammunition but nothing – no cloth, pots and pans or canned herring – that could have been used to pay for the ivory and rubber that came back. The king was stealing the produce of the country.

The methods his agents used had already been observed, by the silent Conrad and also by a few reporters, missionaries and other visitors. But they had not been heard, in part because Leopold hired big PR names like Henry Stanley to tell lies about his businesses.

Morel, with nothing but an inexhaustible energy in writing letters, set out to expose Leopold. It took years but it worked. He was helped because, as Hochschild says, “It was the first major atrocity scandal in the age of the telegraph and the camera.” (Hochschild, not a specialist in history, is in error. The Bulgarian massacres were the first. From time to time Hochschild reveals he is not in complete command of his material, as when he says, “Bismarck wanted colonies in Africa” which is incorrect.)

The story is astonishing and deserves to be famous for that alone, notwithstanding its implications for understanding just where the organized violence of the modern era got its start.

Hochschild errs when he says hardly any Americans have ever heard of this event. The best-known actor in the story, Roger Casement, a consul who went on the ground to confirm what Morel was saying, later was shot as an Irish patriot, so millions of Irish-Americans have heard, at least generally, of how Casement was knighted for his work in Congo.

But although the scandal was a sensation in the early years of the 20th century, the details of how Leopold organized his businesses were not well known then. Surprisingly, the documents were preserved and another brave nobody, a retired civil servant, exposed them two generations later.

Conrad, the eyewitness, captured the essence without knowing the financial arrangements back in Brussels. He called it “the vilest scramble for loot that ever disfigured the history of the human conscience.”

Sunday, April 3, 2016

Trade talk

It is said that the primary Tuesday in Wisconsin will depend in part on how the voters think about trade. Now, I don’t for one moment believe that Trump voters really care about trade; and if they did, no one is stupid enough to believe that Trump can make good on this claim to be able to bring jobs back. But it is possible that the Democratic voting will in some sense be about trade.

Let’s consider how trade across borders works in the real world, in 6 anecdotes:

1.   A friend of mine used to be in the strategic team at TRW, the big auto parts manufacturer. Once (I don’t know the exact year, but it was the ‘80s, which is important to this discussion), TRW decided to test a potential supplier in China. So it sent a sample part (not engineering drawings) to China to be copied.

The original part had an inconsequential bump on it that had not been ground down. The sample came back with the bump reproduced exactly.

That is one marker of the end of the American auto parts sector.

2.   In1985, Firestone Tire closed a plant in Iowa. I asked why, since the rapid growth of countries like Japan, South Korea etc. was elevating tens and hundreds of millions of customers from shank’s mare to motorbikes and autos.

I was told (by the head of North American operations) that there was no growth potential in tires because automakers were phasing out spare tires on their new cars.
3.   Sometime in the mid-1990s, Maui Pineapple Company requested bids to supply tinplate can tops with “100% Maui pineapple” printed on them.

The potential was for billions of lids.

At this time, the American steel sector was shrinking and complaining mightily about unfair competition from imports.

The president of Maui Pine told me he would have preferred an American supplier, but not one made a proposal.

4.   In 1958, American automakers had their best year. Their cars were outmoded junk: you could not get a four-speed transmission or independent suspension. It would be 20 years before you could get radial tires. Drum brakes were barely capable of slowing down two-ton cars. Reliability was so poor that when my family bought a 1959 Chevrolet, the transmission failed as it drove off the dealer lot.
By 1987, General Motors cars were unsalable at any price to customers; only GM’s captive rental companies, Hertz and Avis, would buy them.

5.   In 1985, I was writing editorials in the Des Moines Business Record about the collapse of the farm-implement manufacturing business in Iowa.
Production was moving to right-to-work states. Reaganomics fans were cheering. I wrote that the jobs were not going to stop in South Carolina; they were going to go to South Korea.

I was wrong, because I did not foresee in that China would open up as fast as it did. The jobs went to east Asia, as I expected, but more to China than to South Korea or Taiwan.

I could go on, but you get my drift. NAFTA didn’t go into effect until 1994.

Despite what Trump, Clinton or Sanders like to say, it was not the international trade treaty that caused the collapse/migration of US industrial jobs. It was the unbelievable stupidity and incompetence of American industrial management.

It wasn’t unions, either. It was the unbelievable stupidity and incompetence of American industrial management.

6.   American industrial jobs would have migrated overseas anyway but it is true that Republican policies in the ‘80s hurried them along. It is possible that with smarter management the process could have been slowed, and with smarter investment, the total of lost jobs could have been lessened.

However, Reaganomics was in large part about impoverishing American workers. The idea was to break unions by exporting jobs.

It worked, although not exactly as planned. In the id-‘80s, an international business consultant told me this story:

He was discussing the offshoring not only of jobs but also of industrial machinery. As an example he took a large lathe that was moved to Taiwan. A Reaganite assured him that once American workers came to their senses about pay, the lathe would be brought back and the jobs reopened.

The consultant told me, “He did not understand that once the Taiwanese manager saw that he could generate a million dollars a month, he would get his own lathe.”

And so it happened. The discontent being mined by the Republicans was created by them.