[The following is a revised and slightly expanded version of a talk I gave to the Polytechnic Retired Professors on November 8, 2010.]
“The Great Recession and Beyond: A Pessimistic Perspective”
1. CAUSES of what Paul Krugman and Robin Wells call “the great North Atlantic real estate bubble” in The New York Review of Books (9/30/10). They argue that the 1997-8Asian financial crisis induced East Asian and Middle East countries to accumulate large hoards of foreign assets as insurance against another debacle. And so they bought US bonds. Add in China’s doing the same with its enormous export receipts and what resulted were low long term interest rates. These led to low mortgage rates and a real estate boom. And then “animal spirits” (in Keynes’ words) took over. Financial shenanigans were the icing on the cake–they made the bubble much bigger, the complications greater and the recovery much harder.
2. STIMULOUS–now a bad word, like liberal and government was $787 billion. It was too low. Christina Romer, chairwoman of Obama’s Council of Economic Advisers (but unfortunately without much clout), argued for $1.2 trillion, but key figures on the Obama team vetoed this effort. There are two possible reasons: (a) conceivably, Larry Summers and Timothy Geithner felt it wouldn’t fly politically. I suspect, however, given the bully pulpit that a new president has, $990 billion was possible, or thereabouts, and a 30 % increase in the stimulus would have helped.
b) Apparently, Summers and Geithner thought unemployment would peak at 8 % (although 9 % is occasionally mentioned) and then apparently felt the recovery would be stronger. In other words, a larger stimulus was not needed.
Geithner, and especially Summers, are extremely smart men, but neither saw, apparently, the seriousness of the housing bubble. Both have an unrealistic faith in market solutions but, apparently, they didn’t realize this recession was different. Instead of Summers and Geithner, we would have been better off had Obama chosen any two of the following for his chief advisers: Joseph Stiglitz, Christina Romer, Alan Blinder (former VP of the Federal Reserve, from Princeton), or former Berkeley Professor, Laura Tyson (who was also Chairwoman of Clinton’s Council of Economic Advisers).
3. HAS the stimulus worked? Tyson says that without it, the unemployment rate would be about 11.5 %. She, Stiglitz and Krugman, and many others, argue for a large 2nd stimulus, but that’s politically dead or so it appears. A spurious argument against a 2nd stimulus is that the problem is structural–jobs here, people there--or jobs needing skills A, B & C, when what exist are skills X, Y & Z. But this argument is unconvincing and Paul Krugman, on a recent blog posting, offered a convincing statistical analysis that refutes it.
Krugman has written that he hopes that Peter Diamond, who recently won the Nobel Prize in Economics for his work on structural problems, and whose appointment to the Federal Reserve is being blocked by Republicans, can get by their obstructionism. Then he will be in a position to explain why the current situation is not a structural problem, but one in which there is a lack of demand, although structural elements always exist, but at present only to a small degree.
Fresh water economists, from Carnegie Tech or Chicago (as opposed to salt water economists from Berkeley, MIT, Harvard or Princeton), argue more Government leads to less Investment, an argument of merit, perhaps, when we are at full employment, but not very convincing when both unemployment and excess capacity is high. Conservative Nobelist Robert Lucas believes people cut their spending, when the deficit increases, because they believe they need to save for future increases in taxes. I highly doubt this can be significant and I have a bridge for him to buy.
4. UNEMPLOYMENT. The publicized rate of unemployment (U3), as I write, is 9.6 %. But this is a gross understatement as it leaves off so many–those who have given up looking for a job, because they feel no jobs are available, and those who work part time but who want to work full time, both included in U6. Although there are debates about the various measures of unemployment, U6 seems appropriate. Published by the government, it is about 17 %, more than 75 % higher than the publicized figure.
Actually, the rate of unemployment was, for a while, higher in 1982, than it was a year or so ago, at the peak of the Great Recession, but virtually everyone believes that this past recession was more severe than that one. The unemployment of 1982 was brought about by the tight money policy of Federal Reserve Chairman, Paul Volcker. He sought to reduce the inflation caused by OPEC, ultimately a more tractable problem than a bubble with excessive leveraging, credit default swaps, collateralized debt obligations and the rest of the financial kit and caboodle.
The Fed’s job was made harder when Ronald Reagan pushed through a tax cut that began in 1981, arguing it would lower our deficits. Bush senior was right: voodoo economics, justified by the laughable Laffer Curve. Volcker was forced to adopt an even tighter money policy out of fear that inflation, already in, or just out of, double digits, would increase even more because of the tax cut. (He pushed the prime rate up–briefly–to over 21 %.) I have a friend who says he is a Republican because he is a fiscal conservative. But he has it wrong. On fiscal irresponsibility, Reagan takes the cake. He quadrupled our national debt from about $1 trillion to $4 trillion during his two terms, a record increase, if we exclude major wars. And a case can be made that George W. Bush comes in second. His tax cut reversed the huge fiscal surplus of the ending years of the Clinton Administration and created its opposite, a huge increase in the National Debt, although there were other factors at work–the recession and Iraq.
5. TWO VIEWS: (A) Fiscal Hawks. These are persons who believe the deficits will weaken the dollar and cause inflation. They want to cut government spending–now–to avoid the threat of future inflation, even though inflation is only about 1 % and has been declining. There are two nasty precedents: 1937-38, the recession within the Depression. Unemployment had dropped since its trough, in 1932-33, from 25 % to 13 %. But the fiscal hawks reduced the deficit from about 5.5 % in 1936 to virtually 0 % in 1938 and this (along with some monetary tightening) sent unemployment soaring to 19 %. Had the fiscal hawks not had their way it is conceivable–even likely–that we would have been out of the depression before WW II (and not had this stigma hanging over us, that capitalism depends on war to get us out of depressions).
The second nasty precedent is Japan, 1997. Fiscal hawks, by raising taxes in that year–designed of course to reduce the deficit–only succeeded in pushing the Japanese economy back into its decline. The lost decade continued and another lost decade followed.
But why are the hawks fearful? Treasury interest rates are at, or near, record lows–5 year notes are 1 % and 30 year bonds are 4 %. There are no signs of interest rate increases. Moreover, inflation rarely or never rises when unemployment is very high. Critics of fiscal hawks, like Paul Krugman, think that in the future, if needed (and almost surely at some point will be needed), the Fed can beat down inflation. There is an asymmetry: the Fed can stop inflation with tight money, but it can’t jump start the economy with easy money. As Keynes said, in a “liquidity trap,” when interest rates do not lead to greater investment, making money easier is “like pushing on a string.” It simply doesn’t work.
Deficit hawks and others point to the fact that our national debt is rising compared to our Gross Domestic Product, and at this point is about 70 % of GDP, if you exclude debt owed to the Social Security Administration. This could be, in truth, a matter of long term concern. But it depends. After WW II, for a few years, our national debt was more than 100 % of our GDP. By the mid-1970's, however, it was down to only about 30% of our GDP. There are three reasons the percentage dropped. First, there was the post-war inflation, approaching 40%. (Arithmetical explanation: double the GDP through inflation and the national debt as a percentage of GDP is halved.) Also, GDP grew fast enough, in the 25 years after the war, to lower the debt/GDP ratio and interest payments were low enough as well.
The difference now is that it is unlikely that our growth rate (of GDP) will be as great as it was during the period from 1945 to 1970. Also, there is a reasonable fear that interest rates will rise considerably above the low levels that exist now. But keep in mind that as of the day I am writing this, core inflation is about 3/4 of 1 %, and has been heading downward since 2006. Recovery must be our priority, if utter disaster is to be avoided. Implicitly, what this means is that sometime in the future--maybe years down the line--we will probably have to have modest increases in taxes to keep the debt/income ratio from rising. However, nothing I have seen indicates this will be a big problem, unless we live in a world where Republicans rule and they continue to believe that under no circumstances can taxes be raised. If so, this might lead to cutbacks in medicare, medicaid and social security (and maybe the Department of Education) that will be serious or, if unable to do this, and unwilling to raise taxes, the national debt as a percentage of GDP will eventually rise to unsustainable levels. But this is long term and as Keynes once said, in exasperation, with those opposing what was needed immediately, “In the long run we are all dead.”
Until recently, Paul Krugman hoped that raising the acceptability of the inflation rate from 2 % to 3 % would help. But on his blog posting of November 1, he writes: “What I’d do if I were really in charge of the Fed, however, is the same thing I advocated for Japan way back when: announce a fairly high inflation target over an extended period, and commit to meeting that target. What am I talking about? Something like a commitment to achieve 5 percent annual inflation over the next 5 years.” He hopes investors will invest more because they would not fear that the Fed will choke off the recovery because of a small rise in inflation.
Bernanke is in the process of instituting QE2–a 2nd attempt at quantitative easing. This means the Fed will buy more long term bonds, although from what I read not really long term bonds–15 or 30 year bonds--but shorter period bonds and notes of 5 and 10 years. The hope is to lower long term interest rates even more, thereby stimulating investment. To the extent the Fed buys 5 year notes, it’s hard to believe we’ll have more investment if this rate declines from 1 % to 4/5 of 1 %. Similarly, for longer length bonds. I think Paul Krugman agrees since his latest argument, knowing all about QE2, is to raise the inflation target to astronomical heights–just quoted–implying that he doesn’t believe very strongly in QE2. I doubt he believes very strongly in an astronomical target for inflation. But he’s stuck–what he wants is another stimulus and these are weak substitutes for what seems to be politically unreachable.
(B) The anti-fiscal hawks–the deflationists (which include Krugman). Deflation means declining prices–we’re not there yet, but, at 1%, it seems to be around the corner. (Disinflation is a declining rate of inflation, from say 4 % to 2 %.) Deflation means prices actually go down, below zero. So why is deflation bad? First, people might postpone purchases, to enable them to buy goods in the future at lower prices, but I suspect in America this is limited. It will also be harder for debtors, just as inflation makes it easier for debtors. Mostly, I think, deflation reminds Krugman, and others, of Japanese stagnation–the lost decade--in the 90's and even the last decade, and is mostly an expression of their fear of stagnation.
6. STAGNATION. In 1938, the president of the American Economic Association, Alvin Hansen delivered his presidential address and warned of “secular stagnation.” (In this usage, secular means long run.) Hansen argued that the end of colonialism would slow down foreign exploitation, profits and national income. Indeed, with the recent rise of China and to a lesser degree many other former colonies (or near-colonies), including India, the world is changing, seemingly along Hansen’s lines.
200 years ago, 60 % of the world’s GDP was developed in Asia. By 1950, that figure had dropped to 18% (interesting figures thanks to Stiglitz’ “Free Fall”). Clearly, as China rises, that 18% is being increased, and a lot (especially if one adds in India, South Korea, Bangladesh, Indonesia and Singapore). In short, we are probably seeing the relative decline of Western Europe, the US and other first world countries and the relative rise of what hitherto had been considered the 3rd World. (Relative or absolute decline is a big difference, with enormous significance, but an alternative only the future will reveal.) Recently, China’s GDP surpassed Japan’s and maybe it will surpass ours by 2050 (if not sooner), though it will take at least a century or two, one assumes, before it surpasses us in living standards. Obviously, this is conjectural, but the signs surely point in this direction.
Hansen worried about the sufficiency of new investment. That is, as the economy grows over time, one needs ever greater generators of growth. Railroads did it for us in the 19th century and automobiles to a great extent did it for us in the 1920's and (unbeknownst to Hansen) would do it for us in the 50's and 60's. But a larger economy needs an ever larger new industry to stimulate sufficiently the economy. I think Hansen had a point. In short, a big new industry like computers (for example), and the accompanying software, didn’t bring prosperity to America, partly because the economy is much bigger now than it was 50 years ago and partly it was not as big an industry as automobiles. Also in large part these products are sold here (and of course elsewhere) but produced, in large part, elsewhere.
The United States has been having recessions since before the Civil War and while many different and often contradictory explanations exist as to why this happens under capitalism–there is no consensus–it seems that one factor always lurking around is that the ability to consume is almost always a problem. By 1970, it seemed the problem was reappearing. The 70's were complicated by OPEC and high oil prices and the tight money policies by the Fed to counter this inflation and the recessions these created. But I pick this period for two reasons–(1) real wages–wages adjusted for inflation--haven’t risen since about 1972. And to the extent median income is rising, it is mostly the effect of a greater number of hours worked. (Oh, to have the lengthy vacations our European friends have!) The 2nd reason, in a moment, after the aside.
[Aside: recessions are different. They used to be, in general, two or three years of “prosperity” followed by one year of recession. But since the 1960's–but not counting the 1970's–upswings have lasted close to a decade, including a record upswing in the 1990's. Leave off the 1960's. This upturn lasted a long time because the economy was stimulated by the Vietnam War. To some extent, a similar argument can be made of the 1990's, in that the weakness from 1990 to about 1995 ended because of the dot-com bubble. Why, though, are we having long upturns? The optimistic answer is that the economy is performing better. But I think this answer is, well, too optimistic. The pessimistic answer is that the upturns were not strong enough to generate inflation, so that the reason upturns in the past turned into recessions was the tight money policies of the Fed. Of recent, the Fed’s policies have not been as tight since inflation was not appearing (at least as strongly as in the past) and the reason for this is that the economy was, decade by decade, getting weaker, ultimately (in my view) because the ability to consume problem had reasserted itself.]
What was needed, as the ’70's began, was a new solution, to the ability to consume problem. And, inadvertently, it was found. What it was, curiously, is that the haves loaned their money to the have-nots and thus the ability to consume was increased. Prior to 1970, Carte Blanche, Diner’s Club and other credit cards were for the elite and, except for air fare, required that its users pay in full each month. These were convenience cards. But then, in about 1970, Visa and MasterCard appeared and consumer indebtedness took off. Credit cards helped solve the problem of the inability to consume, on the part of the average American, and in doing so gave new life to old-fashioned capitalism, at least here in the United States. This past decade, of course, the loaning practice spread to borrowing on the value of the house one owned. Of course, this borrowing has all come crashing down.
As international trade and investment soared these last 2 or 3 decades, the problem got more complicated. US corporations increasingly built their factories in 3rd world countries. The result is that manufacturing as a percentage of total GDP has dropped to just over 10 %, last time I looked, from over 20 % a decade or so ago and about 40% just after WW II. This increased the problem of the ability to consume. Wages in Wal-Mart, where persons now work, are much lower than wages in manufacturing–where one used to work.
But we’re also talking about the soaring incomes of executives–the ratio of what the top CEO of a large corporation makes to the average worker’s income is more than 13 times what it was 45 years ago. In addition, there are the astronomical incomes of the hedge fund operators and financial firms. As Bob Herbert reports–column of November 2–these increases are no accident. He cites a new book, Winner-Take-All Politics, by Yale professor Jacob Hacker and Berkeley professor Paul Pierson, both political scientists, who argue that the policy changes that made it this way “were the result of increasingly sophisticated, well-financed and well-organized efforts by the corporate and financial sectors to tilt government policies in their favor, and thus in favor of the very wealthy.” (I am reading this book and highly recommend it.)
The result is that income inequality is undoubtedly at a record high. As Robert Reich sums it up, “In the late 1970's, the richest 1% of American families took in about 9% of the nation’s total income: by 2007, the top 1 percent took in 23.5 percent of total income.” Or, as Bob Herbert writes, the “richest one-tenth of 1 percent, representing just 13,000 households, took in more than 11 percent of total income in 2007.” That is a fourfold increase since 1974. The top 1/100 of 1% garnered 1% of income in the 70's and 6% of income in 2008.
In summary, what is new? (1) Income inequality, the huge trade deficit and the enormous growth of the financial sector and each undermines the ability to consume, and with it, prosperity.
Conclusion: Looking at things from the GDP perspective: It is highly unlikely that exports will do much for us in the foreseeable future, with Europe and Japan in trouble, and the Chinese unwilling to adjust their currency to allow for increased imports of goods produced here. Investment is low because there is excess capacity, consumers aren’t buying and producers find they can get more out of their frightened workers than they used to be able to get and therefore don’t need to invest in new plants. But I would agree that one never knows in advance what might come along, but nevertheless, pessimism seems justified.
Moreover, a principal component of investment, in the GDP accounts, is housing construction and I suspect we are talking about something that, as the expression goes, is as dead as a door nail. Consumption is low because people are unemployed or working fewer hours, because many are trying to replenish their nest eggs which were hit hard, because people, understandably, are saving for a rainy day and, finally, because of more stringent credit card and home borrowing standards. In addition, consumers just 5 years ago “only” owed 80 % of their incomes, on average, while in 2009 they owed 110 % or their incomes. They are, more or less, being forced to save. The only area left, as economists define the GDP, is government spending and we are not likely to have the politics that increases this sector. And if Republicans take power, cutting government spending while lowering taxes for the wealthy, the mildest feeling one should have is alarm.
Or as Krugman puts it–column of October 29: “Right now we very much need active policies on the part of the federal government to get us out of our economic trap. But we won’t get those policies if Republicans control the House. In fact, if they get their way, we’ll get the worst of both worlds: They’ll refuse to do anything to boost the economy now, claiming to be worried about the deficit, while simultaneously increasing long-run deficits with irresponsible tax cuts. So if the elections go as expected next week [and of course they did], here’s my advice: Be afraid. Be very afraid.” Is his “be afraid” more optimistic than my alarm? I suspect so. But let’s not quibble.
Conclusion Part 2: To the income mal-distribution argument as a cause of stagnation, I would add the cheap wages in China, and elsewhere, and finally, perhaps, the problem of Bubble Recoveries. Burst bubbles provoke unusual caution in consumer buying and in investment spending that seems unusually hard to reverse. Secular stagnation does not mean there will be no ups and downs. But stagnation does mean that living standards for the average family are unlikely to increase very much and more likely to erode. It also means that unemployment is likely to remain high. High unemployment and stagnant or lower living standards have political repercussions that are extremely dangerous, including erosion of things we take for granted, such as our civil liberties and our democratic processes. If we’re lucky we’ll have the British experience of the 20th century–downhill but liveable–but if we’re very unlucky we might have the experience of the country that in 1939 was ranked 10th in GDP per person–Argentina. And Argentines for decades then went through Hell. Virtually no one who is knowledgeable is optimistic–including or especially the Fed–read its latest report–NY Times, p A3, 11/4/10.
November 17, 2010
Suggested Books: Joseph Stiglitz, Free Fall; Jacob Hacker & Paul Pierson, Winner-Take-All Politics; Web Sites (all preceded by http://): krugman.blogs.nytimes.com (top choice); baseline scenario.com; calculatedriskblog.com; nakedcapitalism.com (often excellent); delong.typepad.com (often excellent); robertreich.org; Movie: Free Fall; Also: (highly recommended): www.dailykos.com and www.openleft.com
Wednesday, November 17, 2010
Correction
In the posting just after this one, on TIAA-CREF, it was suggested that the Real Estate Fund had to sell buildings, because of the Great Recession. It did not. Other parts of TIAA-CREF, as I understand it, stepped in and enabled the Real Estate Fund to hold on to its buildings. Its price declined so because its buildings were overvalued, as I understand it. Hopefully, and it would appear so, that period is over. In addition, it is less leveraged than before. That is, it owns outright most of its buildings and more than previously. Lastly, my source for this–and I spoke to this person on the phone and did not take notes–also confirms that the directors of the fund are first rate.
TIAA-CREF
(Thoughts for those who have their investments in TIAA-CREF. This fund is mainly for college teachers and also for persons who work for non-profit organizations. As far as I know, others cannot be part of the TIAA-CREF “family.”)
I am not a financial adviser. I have no professional expertise. Please understand this and do not hold me responsible for suggestions that lead to losses. I do state that I have done well over-the-years, but I do things that people, like my cousin, an accountant and lawyer, think is absolutely indefensible, like putting almost all my money in a single basket. More on this, shortly.
At the moment, I am most unsure about the stock funds. That is, I think that, barring a double dip, which is less talked about, but nonetheless possible, stocks are more likely to go up over the next 6 months or a year, but not likely enormously so. (And certainly, as I write, there is, increasingly, evidence of fear about QE2, which is driving stocks downward, somewhat dramatically.) And even if there is no double dip, the recovery may simply fizzle and any upside will be limited. My bet, though, is that it (the Dow) will approach 12,000, during the next 6 months or a year, but not reach it, or just reach it, before there is a significant decline. If you’re brave, and time it right, maybe you can pull off 8 % for a year.
The bond and linked bond funds are going nowhere and although QE2 could push up bond prices, for a while, and for that reason one might stay in the bond fund if you are already there, be prepared to get out. If and when interest rates rise, the bond fund will go down, at least until the higher rates on newly required bonds offset the decline in prices of bonds still being held. I think the linked fund is probably so-so, or at least not bad, if you stay in it for 5 years or so. But even then its goodness will reflect the fact that there is inflation and one’s after-inflation return will not be especially high. The time to get out of the linked fund is after it has risen in expectation of inflation. By the time inflation actually hits, or hits its peak, it’s probably time to get out. If real estate is location, location, location, investment is timing, timing, timing. I have no idea when future inflation will peak. Core inflation is about 3/4 of 1%, down from its last peak of just under 3 %, in 2006, and if Paul Krugman is to be believed, we are in for a relatively long period of deflation, barring an unexpected stimulus or unexpected pick-up of investment. Deflation will hurt the linked fund although fears of inflation will help it.
But basically, I’d keep away from the bond funds and the stock funds.
But the TIAA Real Estate Fund is another kettle of fish. Before it swooped downward, it hit a high of about 310. Then it fell to about 180. It is now, as I write, about 212. Of recent, it has been going up at about 15 % a year. Why has it been going up while nothing I read about commercial real estate indicates that things are going well. A good question, which I wish I had a better answer for.
About 80 % or more of its holdings are in commercial real estate. Or specifically, they are in specific buildings. It is not a REIT–a real estate investment trust. REIT’s are traded on markets. The TIAA real estate fund is not. In this sense, speculation doesn’t directly affect the value of the TIAA fund. It therefore is a unique fund. [Indirectly, speculation may have an effect. The evaluators of the fund–and they make daily evaluations–may be affected by the value of comparable buildings, to upgrade or downgrade a building’s worth, and speculation may therefore affect the values they assign to the buildings they own.] Keep in mind, there is geographical diversity involved as well.
Leave to one side that a sophisticated financial adviser I know thinks it is a good place to put your money in and leave to the same side the fact that the brother-in-law of a friend of mine knows those who run the fund and thinks highly of them.
Information about the fund is a little secretive. They tell you about all the 150 or so buildings they own. Elsewhere, they tell you, day by day, from its inception what happened every day of its existence (or they used to do this). But they don’t exactly tell you how they evaluate all their buildings and they do so every day. I can understand a lost rental or a new tenant or a new rental price but nonetheless it is hard to understand how they figure it all out each and every day.
Recently, they put out a statement that as of February (or was it March?) of next year they are limiting the amount of money you can put into this fund. I think they are doing this because a lot of people did what I did. They saw the fund heading South–for me, the year to date gain in early 2008 went from about +1.2 % to +0.5 % and out I went–and people took their money out (in my case I immediately put it in the money market fund, which paid next to nothing then and even less now!). What I think this may have caused–and thus the reason for the new rules–was a forced sale of buildings. And this contributed to the enormous decline the fund had–about 40 %, if I divided correctly. However, I think what remained were buildings of worth, which were undervalued. That is, I am assuming they sold the buildings with the poorest prospects and got low prices.
Maybe this is all a misunderstanding. But the decline was enormous and the recovery from this decline, so far, has been minimal. We are a long way from the level that once existed (and keep in mind that commercial real estate did not have the bubble that ordinary housing had). Since I bought in, in August, the fund has gone up about 9 days out of 10 and it has been increasing at about a 15 % a year clip. This ain’t hay.
But the true magic for this fund–the one that more or less refutes the argument about all your eggs in one basket–is that the fund is, with occasional exceptions, incredibly non-volatile. A very big day is an increase or decrease of 1/4 of 1%, and this is rare. Once in a blue moon there might be a movement of 1 /2 of one percent. And a few years ago, I went over its entire history since the late 1990's and my memory is that it never came close to having a movement of 1% in a day. (In the down period, of 2008-2010, I did notice an occasional decline of greater magnitude–actually, one day it declined 2 %. So, there can be volatility during a major decline.)
Fiddle around and you can check it out for yourselves (or you used to be able to do this–I’m not sure now). What this lack of volatility means, duly noting the exception, is that you can get out without a big loss. Or to put it positively, you can make good gains, as I did between 2001 and 2008, and then get out without losing more than 1 or 2 %. (Or a super worst case is 3 or 4 %, which isn’t bad, if you’ve had a 10 % gain, not to speak of 15 % gain.) Of course, you have to be able to face up to the fact that the worm some day will turn. And most important, when you do get out, while it is always good to sell on an up-tick, don’t look for an up-tick that gets you back to a recent high point. Accept that you will lose a little.
Without using real numbers, I had about 95 % of my holdings in stock in the bubble of the nineties and 2000, having bought in at 500. When it reached 1000 and then dropped to 940, I decided the bubble was over–and I should get out–and when an up-tick took it to 960, out I went. If I had waited for 1000, I would have lost most of my gains from 500 up. To me, that’s one of the most important lessons in investing. Don’t try to recover the peak price, when you feel the trend is down.
Of course, the real problem is knowing when to get out. For the real estate fund, I would think that if it fell as much as 2 %, OUT. My personal hope is that it will rise to the neighborhood of 250, at which time I’ll keep my eyes open even wider than they already are.
Should you switch to the real estate fund? It’s up to you, of course, but I can’t believe it is less safe than the stock and bond funds, though (of course) I could be wrong. And the Traditional (clearly safest) does not exactly pay the highest, although what you get may depend on when you put the money in. If you form an IRA and put the money in Traditional, you get 3 %, although you are not locked in, as you more or less are in the non-IRA Traditional, having put your money in years ago–in the sense you can only take out 10 % a year. (And of course, the money market fund is almost a sad joke, safe, but paying zilch.)
I am not a financial adviser. I have no professional expertise. Please understand this and do not hold me responsible for suggestions that lead to losses. I do state that I have done well over-the-years, but I do things that people, like my cousin, an accountant and lawyer, think is absolutely indefensible, like putting almost all my money in a single basket. More on this, shortly.
At the moment, I am most unsure about the stock funds. That is, I think that, barring a double dip, which is less talked about, but nonetheless possible, stocks are more likely to go up over the next 6 months or a year, but not likely enormously so. (And certainly, as I write, there is, increasingly, evidence of fear about QE2, which is driving stocks downward, somewhat dramatically.) And even if there is no double dip, the recovery may simply fizzle and any upside will be limited. My bet, though, is that it (the Dow) will approach 12,000, during the next 6 months or a year, but not reach it, or just reach it, before there is a significant decline. If you’re brave, and time it right, maybe you can pull off 8 % for a year.
The bond and linked bond funds are going nowhere and although QE2 could push up bond prices, for a while, and for that reason one might stay in the bond fund if you are already there, be prepared to get out. If and when interest rates rise, the bond fund will go down, at least until the higher rates on newly required bonds offset the decline in prices of bonds still being held. I think the linked fund is probably so-so, or at least not bad, if you stay in it for 5 years or so. But even then its goodness will reflect the fact that there is inflation and one’s after-inflation return will not be especially high. The time to get out of the linked fund is after it has risen in expectation of inflation. By the time inflation actually hits, or hits its peak, it’s probably time to get out. If real estate is location, location, location, investment is timing, timing, timing. I have no idea when future inflation will peak. Core inflation is about 3/4 of 1%, down from its last peak of just under 3 %, in 2006, and if Paul Krugman is to be believed, we are in for a relatively long period of deflation, barring an unexpected stimulus or unexpected pick-up of investment. Deflation will hurt the linked fund although fears of inflation will help it.
But basically, I’d keep away from the bond funds and the stock funds.
But the TIAA Real Estate Fund is another kettle of fish. Before it swooped downward, it hit a high of about 310. Then it fell to about 180. It is now, as I write, about 212. Of recent, it has been going up at about 15 % a year. Why has it been going up while nothing I read about commercial real estate indicates that things are going well. A good question, which I wish I had a better answer for.
About 80 % or more of its holdings are in commercial real estate. Or specifically, they are in specific buildings. It is not a REIT–a real estate investment trust. REIT’s are traded on markets. The TIAA real estate fund is not. In this sense, speculation doesn’t directly affect the value of the TIAA fund. It therefore is a unique fund. [Indirectly, speculation may have an effect. The evaluators of the fund–and they make daily evaluations–may be affected by the value of comparable buildings, to upgrade or downgrade a building’s worth, and speculation may therefore affect the values they assign to the buildings they own.] Keep in mind, there is geographical diversity involved as well.
Leave to one side that a sophisticated financial adviser I know thinks it is a good place to put your money in and leave to the same side the fact that the brother-in-law of a friend of mine knows those who run the fund and thinks highly of them.
Information about the fund is a little secretive. They tell you about all the 150 or so buildings they own. Elsewhere, they tell you, day by day, from its inception what happened every day of its existence (or they used to do this). But they don’t exactly tell you how they evaluate all their buildings and they do so every day. I can understand a lost rental or a new tenant or a new rental price but nonetheless it is hard to understand how they figure it all out each and every day.
Recently, they put out a statement that as of February (or was it March?) of next year they are limiting the amount of money you can put into this fund. I think they are doing this because a lot of people did what I did. They saw the fund heading South–for me, the year to date gain in early 2008 went from about +1.2 % to +0.5 % and out I went–and people took their money out (in my case I immediately put it in the money market fund, which paid next to nothing then and even less now!). What I think this may have caused–and thus the reason for the new rules–was a forced sale of buildings. And this contributed to the enormous decline the fund had–about 40 %, if I divided correctly. However, I think what remained were buildings of worth, which were undervalued. That is, I am assuming they sold the buildings with the poorest prospects and got low prices.
Maybe this is all a misunderstanding. But the decline was enormous and the recovery from this decline, so far, has been minimal. We are a long way from the level that once existed (and keep in mind that commercial real estate did not have the bubble that ordinary housing had). Since I bought in, in August, the fund has gone up about 9 days out of 10 and it has been increasing at about a 15 % a year clip. This ain’t hay.
But the true magic for this fund–the one that more or less refutes the argument about all your eggs in one basket–is that the fund is, with occasional exceptions, incredibly non-volatile. A very big day is an increase or decrease of 1/4 of 1%, and this is rare. Once in a blue moon there might be a movement of 1 /2 of one percent. And a few years ago, I went over its entire history since the late 1990's and my memory is that it never came close to having a movement of 1% in a day. (In the down period, of 2008-2010, I did notice an occasional decline of greater magnitude–actually, one day it declined 2 %. So, there can be volatility during a major decline.)
Fiddle around and you can check it out for yourselves (or you used to be able to do this–I’m not sure now). What this lack of volatility means, duly noting the exception, is that you can get out without a big loss. Or to put it positively, you can make good gains, as I did between 2001 and 2008, and then get out without losing more than 1 or 2 %. (Or a super worst case is 3 or 4 %, which isn’t bad, if you’ve had a 10 % gain, not to speak of 15 % gain.) Of course, you have to be able to face up to the fact that the worm some day will turn. And most important, when you do get out, while it is always good to sell on an up-tick, don’t look for an up-tick that gets you back to a recent high point. Accept that you will lose a little.
Without using real numbers, I had about 95 % of my holdings in stock in the bubble of the nineties and 2000, having bought in at 500. When it reached 1000 and then dropped to 940, I decided the bubble was over–and I should get out–and when an up-tick took it to 960, out I went. If I had waited for 1000, I would have lost most of my gains from 500 up. To me, that’s one of the most important lessons in investing. Don’t try to recover the peak price, when you feel the trend is down.
Of course, the real problem is knowing when to get out. For the real estate fund, I would think that if it fell as much as 2 %, OUT. My personal hope is that it will rise to the neighborhood of 250, at which time I’ll keep my eyes open even wider than they already are.
Should you switch to the real estate fund? It’s up to you, of course, but I can’t believe it is less safe than the stock and bond funds, though (of course) I could be wrong. And the Traditional (clearly safest) does not exactly pay the highest, although what you get may depend on when you put the money in. If you form an IRA and put the money in Traditional, you get 3 %, although you are not locked in, as you more or less are in the non-IRA Traditional, having put your money in years ago–in the sense you can only take out 10 % a year. (And of course, the money market fund is almost a sad joke, safe, but paying zilch.)
Hungary (2010)
Hi all,
Back home from Hungary, safe and sound. (Umm, not so sure about sound.)
Left on the 26th, from JFK, non-stop via Delta to Budapest–9 hours. Then, 4 nights in Budapest (pronounced Budapesht); a train to Pecs (perhaps pronounced Pecht or Paycht) for two nights; a train to Sopron (pronounced Showpron) for two nights, and then a train back to Budapest, for a night, returning on the 5th.
Hungary is a great place to visit as a tourist, an A+. Safety A+ (don’t need money belts). Fantastic things to look at, both on foot and (in Budapest) by subway (easily handled). In Budapest, we stayed at a hotel, adjoining a street of restaurants–maybe 30–with only occasional cars on the narrow street. We usually ate outside, whether here or elsewhere. The weather was excellent–upper 70's during the day, evenings in the mid-60's–although it rained twice, in Pecs and Sopron.
We stayed in 4 and 5 star hotels in Pecs and Sopron, with swimming pools and more. (These were just outside the walled cities, 10 minute walks away. We walked to and from the train stations, on the far sides of the walled cities, except the one time it was raining, in Pecs.)
In general, prices were inexpensive. Excellent meals were half what we would pay in New York. The train from Budapest to Pecs, 1st class, just under three hours, was $22. Meals were generally excellent, although we had a few that missed. It was, however, sometimes hard to tell whether or not we were getting sauces with cheeses or whether the chicken was grilled. The menus, in general, were in Hungarian, German and English. Most of the tourists seem to be from Germany, as well as a few from Holland, the US and England. We heard no French or Spanish.
Vast fields of sunflowers, but vast (many as much as 20 acres worth, perhaps), seen from the train, along with fields filled with vast numbers of bales of hay, as well as fields of corn.
Many highlights: painters we had never heard of–Csontvary, of whom Picasso said that Chagall could learn from–and Odon Marffy (who perhaps deserves to be up there among the greats). There was the super-special porcelain museum (and use of the porcelain in the structures we saw) and the Storno House–porcelain, furniture, art, sculptures–in Pecs and Soporo, respectively
But in the end, Budapest takes the cake. We were in Pest, which is flat, and where most in Budapest live, and across the Danube is hilly Buda. Buildings in general were fascinating and delightful, such as the Opera House or Parliament or the special museum of “terror” dedicated to those killed by Fascism and Communism–which we did not enter. But on the walls outside were the pictures of about 100 who were killed after the unsuccessful uprising of 1956 (maybe 3 or 4 of which were women).
But the most interesting, in my view (and maybe Marianne’s) was the Synagogue in Budapest, the 2nd biggest synagogue in the world. Inside, it is enormous and ornate, with gold and so much more. Outside, on the synagogue grounds, were buried (against Jewish law) more than 500 who were killed by the Fascists. [Hungarian history is incredibly complex, from way back, and Hungary is a small fraction of what it once was. But those Jews eventually killed were mostly done in, I believe, by Germans, under the leadership of Adolf Eichmann, who was there in person, supervising the trips to Auschwitz and the other camps, even if Horthy, a Hungarian Fascist, was in control from the late 30's, and actually protected Jews some, if I got this right. At the end, if I recall, Hungarian troops were killing Jews and partly this was related to the imminent take-over by the Russians, for complex reasons (not understood by me). In all, close to one half million Hungarian Jews were ultimately killed, about 70 % of the Jewish population. Only Poland and the Ukraine exceeded Hungary in total numbers killed, while Greece, Bohemia-Moravia, Lithuania, Netherlands and Poland exceeded Hungary in percentage of Jews killed.
Outside the Synagogue, on the grounds, there was also a memorial (and metallic) tree of life, with leaves on which were written the names of 1000's of Jews who had died, from Budapest and Hungary. There was also, outside, a memorial to Raoul Wallenberg. Interestingly, listed below the name of Wallenberg, were other consulate members who had saved Jews, including one from Franco Spain, and also there were people identified as Catholic priests. Wallenberg himself may have saved 15,000. At this point, Budapest has about 2 million people, about 100,000 of which are Jews. (Hungary has about 10 million in all and I think few Jews now live in the countryside, though many did at the beginning of WWII.
Without reservation, I recommend Hungary as a place to visit and tour. (And there is so much more, including areas we did not visit, as well as monuments, statues, and buildings we did see.) And by the way, Marianne thought the coffee was very good. Also, Hungary is an important producer of wine and one glass Marianne had (red) was one of the best she ever tasted. Also, the local Hungarian draft beers were excellent. And the people were always helpful, although many were probably tourists. Few Hungarians speak English, although most of the waiters and waitresses and hotel clerks knew enough to meet our needs.
David (and Marianne)
Back home from Hungary, safe and sound. (Umm, not so sure about sound.)
Left on the 26th, from JFK, non-stop via Delta to Budapest–9 hours. Then, 4 nights in Budapest (pronounced Budapesht); a train to Pecs (perhaps pronounced Pecht or Paycht) for two nights; a train to Sopron (pronounced Showpron) for two nights, and then a train back to Budapest, for a night, returning on the 5th.
Hungary is a great place to visit as a tourist, an A+. Safety A+ (don’t need money belts). Fantastic things to look at, both on foot and (in Budapest) by subway (easily handled). In Budapest, we stayed at a hotel, adjoining a street of restaurants–maybe 30–with only occasional cars on the narrow street. We usually ate outside, whether here or elsewhere. The weather was excellent–upper 70's during the day, evenings in the mid-60's–although it rained twice, in Pecs and Sopron.
We stayed in 4 and 5 star hotels in Pecs and Sopron, with swimming pools and more. (These were just outside the walled cities, 10 minute walks away. We walked to and from the train stations, on the far sides of the walled cities, except the one time it was raining, in Pecs.)
In general, prices were inexpensive. Excellent meals were half what we would pay in New York. The train from Budapest to Pecs, 1st class, just under three hours, was $22. Meals were generally excellent, although we had a few that missed. It was, however, sometimes hard to tell whether or not we were getting sauces with cheeses or whether the chicken was grilled. The menus, in general, were in Hungarian, German and English. Most of the tourists seem to be from Germany, as well as a few from Holland, the US and England. We heard no French or Spanish.
Vast fields of sunflowers, but vast (many as much as 20 acres worth, perhaps), seen from the train, along with fields filled with vast numbers of bales of hay, as well as fields of corn.
Many highlights: painters we had never heard of–Csontvary, of whom Picasso said that Chagall could learn from–and Odon Marffy (who perhaps deserves to be up there among the greats). There was the super-special porcelain museum (and use of the porcelain in the structures we saw) and the Storno House–porcelain, furniture, art, sculptures–in Pecs and Soporo, respectively
But in the end, Budapest takes the cake. We were in Pest, which is flat, and where most in Budapest live, and across the Danube is hilly Buda. Buildings in general were fascinating and delightful, such as the Opera House or Parliament or the special museum of “terror” dedicated to those killed by Fascism and Communism–which we did not enter. But on the walls outside were the pictures of about 100 who were killed after the unsuccessful uprising of 1956 (maybe 3 or 4 of which were women).
But the most interesting, in my view (and maybe Marianne’s) was the Synagogue in Budapest, the 2nd biggest synagogue in the world. Inside, it is enormous and ornate, with gold and so much more. Outside, on the synagogue grounds, were buried (against Jewish law) more than 500 who were killed by the Fascists. [Hungarian history is incredibly complex, from way back, and Hungary is a small fraction of what it once was. But those Jews eventually killed were mostly done in, I believe, by Germans, under the leadership of Adolf Eichmann, who was there in person, supervising the trips to Auschwitz and the other camps, even if Horthy, a Hungarian Fascist, was in control from the late 30's, and actually protected Jews some, if I got this right. At the end, if I recall, Hungarian troops were killing Jews and partly this was related to the imminent take-over by the Russians, for complex reasons (not understood by me). In all, close to one half million Hungarian Jews were ultimately killed, about 70 % of the Jewish population. Only Poland and the Ukraine exceeded Hungary in total numbers killed, while Greece, Bohemia-Moravia, Lithuania, Netherlands and Poland exceeded Hungary in percentage of Jews killed.
Outside the Synagogue, on the grounds, there was also a memorial (and metallic) tree of life, with leaves on which were written the names of 1000's of Jews who had died, from Budapest and Hungary. There was also, outside, a memorial to Raoul Wallenberg. Interestingly, listed below the name of Wallenberg, were other consulate members who had saved Jews, including one from Franco Spain, and also there were people identified as Catholic priests. Wallenberg himself may have saved 15,000. At this point, Budapest has about 2 million people, about 100,000 of which are Jews. (Hungary has about 10 million in all and I think few Jews now live in the countryside, though many did at the beginning of WWII.
Without reservation, I recommend Hungary as a place to visit and tour. (And there is so much more, including areas we did not visit, as well as monuments, statues, and buildings we did see.) And by the way, Marianne thought the coffee was very good. Also, Hungary is an important producer of wine and one glass Marianne had (red) was one of the best she ever tasted. Also, the local Hungarian draft beers were excellent. And the people were always helpful, although many were probably tourists. Few Hungarians speak English, although most of the waiters and waitresses and hotel clerks knew enough to meet our needs.
David (and Marianne)
Turkey and Greece (2001 or 2002)
Hello everyone. This is a description of our trip to Turkey and Greece, the latter half in good part a search for Marianne’s roots. It is part travelogue, part letter from abroad, written ex post, an occasional political or personal comment and a bit of old-fashioned Mermelino.
Before we left, on April 19, two events occurred, one trivial, one enormously important. The trivial event is that I somehow hurt my back which made it hard for me to walk for more than an hour, without a great deal of pain, and though reassured by a chiropractor, I was concerned.
Ten days before we are to leave, my sister, Norma, calls to say she is having brain surgery in a week, to remove a tumor, which had just been discovered. I spend Monday and Tuesday (the 16th and 17th ) in Baltimore, leaving after it is clear she is going to be all right, both in the short run sense and in the long run sense–the tumor was not malignant. (The ordeal of waiting, especially when you’re told the operation is going to be 4 hours and it takes 7 hours, is a story for another day.)
We ended up purchasing in advance round trip tickets from JFK to Istanbul (stopping in Amsterdam both ways, returning on May 14), round trip tickets from Istanbul to Antalya (a coastal Turkish city on the Mediterranean and round trip tickets from Istanbul to Athens, costing just over $1000 per person. [One-ways cost nearly as much as round trips, and occasionally more, a pricing policy I simply can’t understand.]
In general, we both loved Turkey, felt it was safe and fascinating and enjoyed both our big city experience (Istanbul) and our small city experience (Antalya). The food was sensational–delicious and low (or non) fat. If I was sentenced to choose between eating either US food, whatever that means, or Turkish food, for the rest of my life, it would be hard to resist choosing Turkish food. Of course, prices were considerably less than in the US. We felt free to eat fruits and vegetables, which we didn’t dare risk in India, and Turkish tomatoes and other fruits and vegetables were like it used to be in the US decades ago, when our food had taste.
We stayed in Istanbul within walking distance of the Blue Mosque, the Aya Sofya (Hagia Sofia) and Topkapi palace, three big Istanbul sights. [Postcard recipients, please forgive the mistake in my joke about the Topkapi movie being better than the actual palace, where I alluded to Sophia Loren as starring in the movie–it was Melina Mercouri.] Our tourist hotel area was filled with young Aussies, of all people. Once in a restaurant, I said cheers to Pat Rafter and 8 Aussies in their 20's, sitting in a nearby table, asked us old foggies to join them, treating us to drinks and yukking it up with us. And why were the Aussies there? Of course, it was to commemorate the battle of Gallipoli, a Churchillian mistake during World War I, when vast numbers of Aussies were killed (although one of them said it was historically the coming together of the Australian nation). Gallipoli was, I believe, a few hundred miles away and our neighborhood emptied after the Aussies went on their pilgrimage. Well maybe not emptied, but the raucousness declined.
A highlight of our Istanbul phase was our venture, using public transportation, including their subway–nicer than ours–to the Chora church, just outside the old city walls. In it were breathtaking mosaics, even for one whose breath is not likely or easy to take away at seeing mosaics–meaning me. We also boated up the Bosporus, ending at an old interesting fort. And we walked. One of my back exercises, and the one that brought the most relief, was one that had me on the ground looking like a devout Muslim praying to Allah. Whenever I did this, I was fearful I would be sentenced to life imprisonment for mocking their religion. I took great care to do this in out of the way naves and apses and their outdoor equivalents. The weather, by the way, in both Greece and Turkey, at this time of year was delightful–70's during the day, maybe lower 80's in Antalya, 50's or 60's at night (a little lower on Skopelos–more on this). It rained lightly maybe twice.
The only other thing I’ll mention is that it was hard to walk by a restaurant, jewelry or rug store without the proprietor hustling us, in a friendly way, to be sure. One is perplexed at how the jewelry and rug stores can all survive, if they do, since there are more of them than you can ever imagine. In general, I thought of Istanbul as 1/3 New York City, with tourists from all over, 1/3 Paris with few big buildings and roofs similar to what you see in Paris and 1/3 Istanbul, with its mosques and Euro-Asian Islamic caste.
Antalya has an old city where we stayed, with streets (often unnamed) snaking around, maze-like, like a Casbah. Lost once, we asked help of a merchant and he had to call on his cell phone to find out our hotel was one block away. We took one guided tour of Perge, Side and Aspendos, the latter containing an amphitheater still used–Carmen was being presented in about a week. We also rented a car for a day and went to Termessos, where you climb for about an hour to an extinct mountain city able to resist conquest from everyone, being in such a rugged and inaccessible area, though one wonders how they ever brought up all the heavy building equipment. It too had a wonderful theater. I climbed down to the bottom where the stage must have been while Marianne sat on what might have been row Z–way up from where I was. I spoke lines from Twelfth Night (I was Malvolio in a high school presentation) and I spoke them in a normal conversational mode–or a bit higher–and Marianne heard perfectly. Driving in this part of Turkey was easy–the roads were wide enough and with less potholes, traffic or other impediments than here and the drivers were sane.
In general, people were exceedingly helpful. But old ways die slowly. One Turk said the Greeks were OK but lazy. (The Greek who drove us from the airport to the hotel, a delightful and charming young man, more or less believed that much of Turkey and much of Yugoslavia was really Greek territory.) The rug salesmen were often engaging, with a sense of humor. One spoke almost perfect English and during a long conversation I learn he was a Kurd. Later, out of the blue, a hotel proprietor who didn’t look Turkish, spoke to us as we passed by and said very quickly, upon learning we were Americans, that we shouldn’t be deceived. Turks were still Turks, by which I took it to mean they were warlike and not yet up to civilized standards. I mentioned that the Kurd we had just met didn’t say anything about what was happening out east to the Kurds. The man we were talking to said that was because he was afraid to. I had a feeling this man may have been Jewish but didn’t ask, regretfully.
Athens, as many know, is a bit noisy and we didn’t like it as much as Turkey. The food in Greece is good, but smothered in olive oil. We were walking distance from the Acropolis and the Parthenon and it’s hard not to be fascinated by what we saw. We also happened upon the Jewish Museum of Greece and spent an interesting hour or two there.
We arrived on May Day and though it may mean next to nothing here, in Greece it is still big stuff. Our taxi had to take a roundabout route from the new airport–new, may I mention, in preparation for Athens’ hosting of the 2004 Olympic games–since streets were closed off. We leave Athens, incidentally, a few days later on the day the Pope arrives (we leave early enough to avoid the jams caused by streets again being closed). The day before His Holiness arrives we witnessed a demonstration by militant Orthodox who have never forgiven the Catholics for what happened in the 11th century. The Herald Tribune in Greece has a special Greek supplement and was filled with news of the Pope’s visit–one piece I saved because it was so well written.
On the plane to Greece, Marianne is teary. All her life she wanted to go to Greece where her grandfather (her mother’s father), Nick Koleas [or in Greece, Kollias], was born, on the island of Skopelos. Skopelos is way up in the north (east), in the Sporades. I have since found out that it is about 30% larger than Manhattan and 2/3 the size of Staten Island. It is a beautiful island and most Greeks, I think, know of it while few Americans know of it. It is nowhere near Crete or Rhodes or any of the famous and more commercialized islands in the south such as Santorini in the Cyclades. In Marianne’s last conversation with her grandmother, then in her 90's and dying, who though not Greek by birth, had married Nick, she said to Marianne: I guess we didn’t make it to Greece (a trip long talked of). This was why we had come to Greece–to see Skopelos and get in touch with Marianne’s living roots.
So after 4 days of Athens, off we go to Skopelos. We “know” the following: the names of some distant relatives (people several cousins removed–that tenuous) who supposedly still lived on the island, learned of, from an aged distant cousin, living in Florida; that Nina, the daughter of Nick’s sister (and hence the first cousin of Ora, Marianne’s mother, now in her 80's) lived in Volos, a modern city that Frommer’s says you should not spend time in; that Nina had last communicated with Ora (and other relatives) in the early 60's–was she still alive?; and that the Skopelos relatives lived in a village on the island of Skopelos, called Glossa. We find out there are boats to and from Skopelos from Ayios Konstandinos and from Volos.
We get to St Constantine, which is closer to Athens, by bus, only to learn that the schedule we had been given was incorrect and that the next boat was 5 hours away to one of the two ferry stops on Skopelos (one is the town of Skopelos and the other is called Loutraki-Glossa, Loutraki being the port, with hotels and restaurants, but still smaller than Glossa, I believe, which is on a hill and a 20 minute hike away from the port, by a steep path or an hour hike by the winding road (and 5 minutes by car). We have a post card from Nina, mailed in the 50's, with a picture of Glossa–maybe 50 houses on a hill and some old photographs of Nick and a few others.
We enjoy our 5 hours waiting in this lovely town and then board what we thought was a regular ferry boat and learn it was a hydrofoil. The people who run it think they are literally flying us there, with hydrofoil attendants and a movie on safety similar to what you get on an airplane. After stopping at another island, where 50 passengers board heading for Skopelos, we arrive at the town of Skopelos, without a room at 9pm. Marianne, fearful that the 50 had taken all the rooms, believed we would end up sleeping on the beach, with evening temperatures in the upper 40's. But no problem. A man renting hotel rooms meets the boat and we sign up for the night. Then we go out to eat, at 10pm at one of the 10 outdoor, partially protected, restaurants that face the harbor, each having maybe 5 customers each. It’s a beautiful setting, but Marianne is disappointed. Expecting to find a primitive island, she thinks it looks like Fire Island and the way it was laid out, where the cars were behind us out of sight, indeed it did.
In the light of day, we find that the village of Skopelos is charming and primitive enough, its Fire Island restaurants notwithstanding. We are off by bus at about 10:30 to the other end, which takes about an hour. The bus makes its stop at Glossa and we have to decide whether to get off or wait until it gets down the hill to Loutraki, where there are presumably more hotels. The bus driver advises Loutraki, as does an elderly Greek woman on the bus, but there to the other side of where the bus is parked is a hotel–in clear English:Hotel–so I say let’s do it, which is what Marianne wanted to do in any case. And as the bus pulls away, we then notice the sign obscured by the bus, indicating in English the hotel was closed.
The town, such as we can see it–its outskirts maybe 30 yards away--is mostly above us (and its streets would not be big enough to accommodate a vehicle the size of a bus). But nearby, just across the street, next to a church (of which there may be, literally, as many as 50 on this island-- all Greek Orthodox, of course) is a dinky taverna, where a young woman is painting chairs and a handful of people are sitting around drinking. It is obvious that preparations are being made for the coming summer season. So we walk over and order a coffee and a clarifying question, in excellent English, by the young woman, indicates she is someone we can talk to about what to do next. She was born in Australia, lived there until recently, but is married to a Greek. Her mother has a boarding house 10 minutes away and both of her sisters also live in Glossa. Marianne names her names (of her grandfather’s family).. The Australian consults with a few of the people hanging around and her husband. Pictures are looked at. At some point it appears a connection made. And then at a later point, she points to the name of the Taverna, over the door. It is named–in Greek letters, which more or less from my Amherst fraternity experience I can recognize–Kollias (without the sigma, for some reason). Well. Well. Well. The Australian, Elani (Helen in Greek, but pronounced to rhyme with Melanie) is married to John. John’s father is Costa. Costa is the son of Nick’s brother. Our taverna, the one we almost literally stumble on, is owned by Marianne’s flesh and blood relatives.
Costa and Marianne’s mother, Ora, are first cousins. Soon Costa’s sister, Helen, comes over. And she and Marianne hug and though she knows next to no English (and we, no Greek), Helen is wonderfully simpatico. Before long, we are having lunch at her house. I am forced to eat scrambled eggs for the first time in 15 years! That afternoon, we also meet an uncle. We end up staying at the Aussie’s mom’s boarding house, which is very nice but more appropriate for somewhat warmer weather. It is unheated. I kept putting the burners of the stove on and Marianne, fearing a fire, kept turning them off. Meanwhile, I should mention, I had contracted a minor cold, which plagued me a bit throughout the last week of the trip, but except for two walks I didn’t take, didn’t slow me down. We walk out of our quarters the next day–it is Sunday–and meet a couple, apparently walking back from another church than the one I mentioned, who ask Americana? We say yes. It is Costa and his wife.
We were later told that the uncle, who is about 70, would have invited us to stay with him, but being unmarried, his place was in no shape for guests. We invited the Australian and her husband, Marianne’s 2nd cousin, or whatever the relationship is between the children of cousins, to have dinner with us, but in the end, the timing was wrong. They had to leave the island for two days to print menus and were too tired to go out at 9pm when they returned. I was grateful.
The next day we left but we had hiked all around where we were staying and had revisited the town of Skopelos. I can’t emphasize enough how beautiful the island was. Every time you turned, you saw another view of mountains and the Aegean Sea. And if you looked down, exotic plants and butterflies. If you walked in the town, it was just as Marianne had hoped it would be, apart from TV antennae and dishes, which didn’t bother her, of course. Also, before we left, helped by the Australian, we made contact with Nina. Nina had to be wooed a bit, since years ago someone from America was coming from America to visit, but didn’t show up. Volos, where she lived, is a little off the beaten track, but not if you are already up north, in Skopelos. Marianne spoke to the granddaughter whose English was good enough to set a time for our visit.
We take the boat from Glossa (or Glossa’s port, so to speak) to Volos, this time by regular ferry, disembark, find a hotel and then taxi ourselves to Nina’s. We had a last name, so we rang at the name we had. A young woman, maybe 21, answers. She has a towel wrapped around her body and another around her head. She was getting ready and we had pushed the wrong bell. The grandmother lives on one floor and her son’s family on another. The toweled one–can I say the following?–is a sexpot. She is the older sister of the granddaughter Marianne has spoke to. She is obviously extremely attractive, but later we learn she also has an infectious laugh, a refreshing sense of humor and along with her younger sister, who was maybe 15, a sense of responsibility that made the two girls want very much to help her grandmother and mother understand what was going on, since they spoke no English, while the two girls knew some. We soon meet the other daughter and their mother. And then–tata–Nina. Near 80, she is as spunky as they come. Her husband had died about a year ago and she was asking us if we had anyone in America she could hook up with. There is another relative (and where she fits, I’m not sure), but before long we are having a lovely lunch with the family. Then Nina is showering gifts on us, including a tapestry she herself has made. She brings out pictures she has saved, of Marianne and her brothers, when Marianne was maybe 13. We see pictures of her son and Marianne’s first impression (and mine too) is that he very much looks like one of her two brothers, the older one who lives in Memphis. And soon Nina’s son arrives. He is an air traffic controller for the military and knows some English, on a level with the granddaughters.
After a few hours of talk, we are invited to dinner. They drive us to our hotel and then pick us up again a few hours later at 9pm and take us to a wonderful neighborhood restaurant, where obviously they go often and which I learn, since I ask, you needed to make a reservation for. It was packed. And Dad keeps ordering the ouzo’s. Marianne tells mom that her ring is beautiful. Mom takes it off her finger and gives it Marianne, who in the end accepts it because to do otherwise would seem to be insulting. The cell phone of the sexpot rings–apparently clients for her hair cutting business. Not boyfriends I ask? No. Do you have boyfriends. Oh, yes, 5 of them. I go out with one at 2pm, another at 3pm, etc. She likes to play basketball. I throw one boyfriend in the basket, then another, still another. Who knows what her love life is really like? She does, after all, live at home, with a father who appears to be very smart and engaging, but also on the conservative side. I asked her why she doesn’t have a nose ring? She uses international sign language–her finger across the neck, indicating her father would kill her if she had a nose ring. The younger one was taking some English tests soon. Apparently, she practices by watching American movies. Had she heard of You’ve Got Mail? I say it’s about our neighborhood, the Upper west side, which indeed it is, to some extent. She not only knew the movie but knew who starred in it–Meg Ryan and Tom Hanks. We finish at midnight, get driven to the hotel and say our goodbyes. We had found her roots and what a delightful experience. Postscript: they’ve invited us back in summer time when we could stay at their summer house on Glossa and I know Marianne would love to do this. And maybe, soon, we will.
We brought small gifts, not knowing who we would find or even if we would find anyone–New York City T-shirts and coffee cups. I’d like to send the younger daughter a video of You’ve Got Mail, but Louis tells me we have to transform it for European VCR use. And for the older daughter, I thought of sending her a subscription to some chic hairdressing magazine.
We left Volos and got convinced by a cab driver to take a cab to Delphi and in the end, though it cost a little, it was probably a wise choice since we were exhausted and we saved many, many hours, especially since the cabbie often went over 150 kilometers an hour (over 100mph!) . Delphi isn’t very big. You can walk from one end to the other in about 10-15 minutes. It has a wonderful Museum and ruins I didn’t see, since this is one of the walks I didn’t take. I think, however, that almost everything you would want to see of importance was at the museum, next to the ruins. The view from our hotel room, or from the restaurants we went to, was breathtaking. In these places, we were at the edge of the town, which then dropped into a deep valley and there, maybe half a mile away, mountains rose. It was spectacular. One more night in Athens. Then up at 5am for a 8am flight to Istanbul, a five hour wait in Istanbul, a two hour wait in Amsterdam and then arrival in JFK–a 23 hour day, by the time we got home. Somewhere en route I picked up conjunctivitis, which I hope has been cured. Marianne picked up a bad case of jet lag, which took almost a week to get rid of. Our pictures came out, and along with postcards I had bought, are all assembled in an album.
After we get home, I call my sister, learn all is well and also learn that both my postcards from Turkey had arrived. This was of concern since at the first Turkish post office I went to, they told me a certain amount of stamps were needed and off goes this batch. When I go to another post office with batch two, they say I need a larger amount of stamps. And in post office three, for batch 3, still a larger amount. Go figure.
[I hope I can figure out how to send this. It’s being typed in Corel WordPerfect 8. I want to send it as an attachment. I’d like to avoid having it arrive all choppy, which I think is what happens when I move it to its email location.]
Love to one and all, David
Before we left, on April 19, two events occurred, one trivial, one enormously important. The trivial event is that I somehow hurt my back which made it hard for me to walk for more than an hour, without a great deal of pain, and though reassured by a chiropractor, I was concerned.
Ten days before we are to leave, my sister, Norma, calls to say she is having brain surgery in a week, to remove a tumor, which had just been discovered. I spend Monday and Tuesday (the 16th and 17th ) in Baltimore, leaving after it is clear she is going to be all right, both in the short run sense and in the long run sense–the tumor was not malignant. (The ordeal of waiting, especially when you’re told the operation is going to be 4 hours and it takes 7 hours, is a story for another day.)
We ended up purchasing in advance round trip tickets from JFK to Istanbul (stopping in Amsterdam both ways, returning on May 14), round trip tickets from Istanbul to Antalya (a coastal Turkish city on the Mediterranean and round trip tickets from Istanbul to Athens, costing just over $1000 per person. [One-ways cost nearly as much as round trips, and occasionally more, a pricing policy I simply can’t understand.]
In general, we both loved Turkey, felt it was safe and fascinating and enjoyed both our big city experience (Istanbul) and our small city experience (Antalya). The food was sensational–delicious and low (or non) fat. If I was sentenced to choose between eating either US food, whatever that means, or Turkish food, for the rest of my life, it would be hard to resist choosing Turkish food. Of course, prices were considerably less than in the US. We felt free to eat fruits and vegetables, which we didn’t dare risk in India, and Turkish tomatoes and other fruits and vegetables were like it used to be in the US decades ago, when our food had taste.
We stayed in Istanbul within walking distance of the Blue Mosque, the Aya Sofya (Hagia Sofia) and Topkapi palace, three big Istanbul sights. [Postcard recipients, please forgive the mistake in my joke about the Topkapi movie being better than the actual palace, where I alluded to Sophia Loren as starring in the movie–it was Melina Mercouri.] Our tourist hotel area was filled with young Aussies, of all people. Once in a restaurant, I said cheers to Pat Rafter and 8 Aussies in their 20's, sitting in a nearby table, asked us old foggies to join them, treating us to drinks and yukking it up with us. And why were the Aussies there? Of course, it was to commemorate the battle of Gallipoli, a Churchillian mistake during World War I, when vast numbers of Aussies were killed (although one of them said it was historically the coming together of the Australian nation). Gallipoli was, I believe, a few hundred miles away and our neighborhood emptied after the Aussies went on their pilgrimage. Well maybe not emptied, but the raucousness declined.
A highlight of our Istanbul phase was our venture, using public transportation, including their subway–nicer than ours–to the Chora church, just outside the old city walls. In it were breathtaking mosaics, even for one whose breath is not likely or easy to take away at seeing mosaics–meaning me. We also boated up the Bosporus, ending at an old interesting fort. And we walked. One of my back exercises, and the one that brought the most relief, was one that had me on the ground looking like a devout Muslim praying to Allah. Whenever I did this, I was fearful I would be sentenced to life imprisonment for mocking their religion. I took great care to do this in out of the way naves and apses and their outdoor equivalents. The weather, by the way, in both Greece and Turkey, at this time of year was delightful–70's during the day, maybe lower 80's in Antalya, 50's or 60's at night (a little lower on Skopelos–more on this). It rained lightly maybe twice.
The only other thing I’ll mention is that it was hard to walk by a restaurant, jewelry or rug store without the proprietor hustling us, in a friendly way, to be sure. One is perplexed at how the jewelry and rug stores can all survive, if they do, since there are more of them than you can ever imagine. In general, I thought of Istanbul as 1/3 New York City, with tourists from all over, 1/3 Paris with few big buildings and roofs similar to what you see in Paris and 1/3 Istanbul, with its mosques and Euro-Asian Islamic caste.
Antalya has an old city where we stayed, with streets (often unnamed) snaking around, maze-like, like a Casbah. Lost once, we asked help of a merchant and he had to call on his cell phone to find out our hotel was one block away. We took one guided tour of Perge, Side and Aspendos, the latter containing an amphitheater still used–Carmen was being presented in about a week. We also rented a car for a day and went to Termessos, where you climb for about an hour to an extinct mountain city able to resist conquest from everyone, being in such a rugged and inaccessible area, though one wonders how they ever brought up all the heavy building equipment. It too had a wonderful theater. I climbed down to the bottom where the stage must have been while Marianne sat on what might have been row Z–way up from where I was. I spoke lines from Twelfth Night (I was Malvolio in a high school presentation) and I spoke them in a normal conversational mode–or a bit higher–and Marianne heard perfectly. Driving in this part of Turkey was easy–the roads were wide enough and with less potholes, traffic or other impediments than here and the drivers were sane.
In general, people were exceedingly helpful. But old ways die slowly. One Turk said the Greeks were OK but lazy. (The Greek who drove us from the airport to the hotel, a delightful and charming young man, more or less believed that much of Turkey and much of Yugoslavia was really Greek territory.) The rug salesmen were often engaging, with a sense of humor. One spoke almost perfect English and during a long conversation I learn he was a Kurd. Later, out of the blue, a hotel proprietor who didn’t look Turkish, spoke to us as we passed by and said very quickly, upon learning we were Americans, that we shouldn’t be deceived. Turks were still Turks, by which I took it to mean they were warlike and not yet up to civilized standards. I mentioned that the Kurd we had just met didn’t say anything about what was happening out east to the Kurds. The man we were talking to said that was because he was afraid to. I had a feeling this man may have been Jewish but didn’t ask, regretfully.
Athens, as many know, is a bit noisy and we didn’t like it as much as Turkey. The food in Greece is good, but smothered in olive oil. We were walking distance from the Acropolis and the Parthenon and it’s hard not to be fascinated by what we saw. We also happened upon the Jewish Museum of Greece and spent an interesting hour or two there.
We arrived on May Day and though it may mean next to nothing here, in Greece it is still big stuff. Our taxi had to take a roundabout route from the new airport–new, may I mention, in preparation for Athens’ hosting of the 2004 Olympic games–since streets were closed off. We leave Athens, incidentally, a few days later on the day the Pope arrives (we leave early enough to avoid the jams caused by streets again being closed). The day before His Holiness arrives we witnessed a demonstration by militant Orthodox who have never forgiven the Catholics for what happened in the 11th century. The Herald Tribune in Greece has a special Greek supplement and was filled with news of the Pope’s visit–one piece I saved because it was so well written.
On the plane to Greece, Marianne is teary. All her life she wanted to go to Greece where her grandfather (her mother’s father), Nick Koleas [or in Greece, Kollias], was born, on the island of Skopelos. Skopelos is way up in the north (east), in the Sporades. I have since found out that it is about 30% larger than Manhattan and 2/3 the size of Staten Island. It is a beautiful island and most Greeks, I think, know of it while few Americans know of it. It is nowhere near Crete or Rhodes or any of the famous and more commercialized islands in the south such as Santorini in the Cyclades. In Marianne’s last conversation with her grandmother, then in her 90's and dying, who though not Greek by birth, had married Nick, she said to Marianne: I guess we didn’t make it to Greece (a trip long talked of). This was why we had come to Greece–to see Skopelos and get in touch with Marianne’s living roots.
So after 4 days of Athens, off we go to Skopelos. We “know” the following: the names of some distant relatives (people several cousins removed–that tenuous) who supposedly still lived on the island, learned of, from an aged distant cousin, living in Florida; that Nina, the daughter of Nick’s sister (and hence the first cousin of Ora, Marianne’s mother, now in her 80's) lived in Volos, a modern city that Frommer’s says you should not spend time in; that Nina had last communicated with Ora (and other relatives) in the early 60's–was she still alive?; and that the Skopelos relatives lived in a village on the island of Skopelos, called Glossa. We find out there are boats to and from Skopelos from Ayios Konstandinos and from Volos.
We get to St Constantine, which is closer to Athens, by bus, only to learn that the schedule we had been given was incorrect and that the next boat was 5 hours away to one of the two ferry stops on Skopelos (one is the town of Skopelos and the other is called Loutraki-Glossa, Loutraki being the port, with hotels and restaurants, but still smaller than Glossa, I believe, which is on a hill and a 20 minute hike away from the port, by a steep path or an hour hike by the winding road (and 5 minutes by car). We have a post card from Nina, mailed in the 50's, with a picture of Glossa–maybe 50 houses on a hill and some old photographs of Nick and a few others.
We enjoy our 5 hours waiting in this lovely town and then board what we thought was a regular ferry boat and learn it was a hydrofoil. The people who run it think they are literally flying us there, with hydrofoil attendants and a movie on safety similar to what you get on an airplane. After stopping at another island, where 50 passengers board heading for Skopelos, we arrive at the town of Skopelos, without a room at 9pm. Marianne, fearful that the 50 had taken all the rooms, believed we would end up sleeping on the beach, with evening temperatures in the upper 40's. But no problem. A man renting hotel rooms meets the boat and we sign up for the night. Then we go out to eat, at 10pm at one of the 10 outdoor, partially protected, restaurants that face the harbor, each having maybe 5 customers each. It’s a beautiful setting, but Marianne is disappointed. Expecting to find a primitive island, she thinks it looks like Fire Island and the way it was laid out, where the cars were behind us out of sight, indeed it did.
In the light of day, we find that the village of Skopelos is charming and primitive enough, its Fire Island restaurants notwithstanding. We are off by bus at about 10:30 to the other end, which takes about an hour. The bus makes its stop at Glossa and we have to decide whether to get off or wait until it gets down the hill to Loutraki, where there are presumably more hotels. The bus driver advises Loutraki, as does an elderly Greek woman on the bus, but there to the other side of where the bus is parked is a hotel–in clear English:Hotel–so I say let’s do it, which is what Marianne wanted to do in any case. And as the bus pulls away, we then notice the sign obscured by the bus, indicating in English the hotel was closed.
The town, such as we can see it–its outskirts maybe 30 yards away--is mostly above us (and its streets would not be big enough to accommodate a vehicle the size of a bus). But nearby, just across the street, next to a church (of which there may be, literally, as many as 50 on this island-- all Greek Orthodox, of course) is a dinky taverna, where a young woman is painting chairs and a handful of people are sitting around drinking. It is obvious that preparations are being made for the coming summer season. So we walk over and order a coffee and a clarifying question, in excellent English, by the young woman, indicates she is someone we can talk to about what to do next. She was born in Australia, lived there until recently, but is married to a Greek. Her mother has a boarding house 10 minutes away and both of her sisters also live in Glossa. Marianne names her names (of her grandfather’s family).. The Australian consults with a few of the people hanging around and her husband. Pictures are looked at. At some point it appears a connection made. And then at a later point, she points to the name of the Taverna, over the door. It is named–in Greek letters, which more or less from my Amherst fraternity experience I can recognize–Kollias (without the sigma, for some reason). Well. Well. Well. The Australian, Elani (Helen in Greek, but pronounced to rhyme with Melanie) is married to John. John’s father is Costa. Costa is the son of Nick’s brother. Our taverna, the one we almost literally stumble on, is owned by Marianne’s flesh and blood relatives.
Costa and Marianne’s mother, Ora, are first cousins. Soon Costa’s sister, Helen, comes over. And she and Marianne hug and though she knows next to no English (and we, no Greek), Helen is wonderfully simpatico. Before long, we are having lunch at her house. I am forced to eat scrambled eggs for the first time in 15 years! That afternoon, we also meet an uncle. We end up staying at the Aussie’s mom’s boarding house, which is very nice but more appropriate for somewhat warmer weather. It is unheated. I kept putting the burners of the stove on and Marianne, fearing a fire, kept turning them off. Meanwhile, I should mention, I had contracted a minor cold, which plagued me a bit throughout the last week of the trip, but except for two walks I didn’t take, didn’t slow me down. We walk out of our quarters the next day–it is Sunday–and meet a couple, apparently walking back from another church than the one I mentioned, who ask Americana? We say yes. It is Costa and his wife.
We were later told that the uncle, who is about 70, would have invited us to stay with him, but being unmarried, his place was in no shape for guests. We invited the Australian and her husband, Marianne’s 2nd cousin, or whatever the relationship is between the children of cousins, to have dinner with us, but in the end, the timing was wrong. They had to leave the island for two days to print menus and were too tired to go out at 9pm when they returned. I was grateful.
The next day we left but we had hiked all around where we were staying and had revisited the town of Skopelos. I can’t emphasize enough how beautiful the island was. Every time you turned, you saw another view of mountains and the Aegean Sea. And if you looked down, exotic plants and butterflies. If you walked in the town, it was just as Marianne had hoped it would be, apart from TV antennae and dishes, which didn’t bother her, of course. Also, before we left, helped by the Australian, we made contact with Nina. Nina had to be wooed a bit, since years ago someone from America was coming from America to visit, but didn’t show up. Volos, where she lived, is a little off the beaten track, but not if you are already up north, in Skopelos. Marianne spoke to the granddaughter whose English was good enough to set a time for our visit.
We take the boat from Glossa (or Glossa’s port, so to speak) to Volos, this time by regular ferry, disembark, find a hotel and then taxi ourselves to Nina’s. We had a last name, so we rang at the name we had. A young woman, maybe 21, answers. She has a towel wrapped around her body and another around her head. She was getting ready and we had pushed the wrong bell. The grandmother lives on one floor and her son’s family on another. The toweled one–can I say the following?–is a sexpot. She is the older sister of the granddaughter Marianne has spoke to. She is obviously extremely attractive, but later we learn she also has an infectious laugh, a refreshing sense of humor and along with her younger sister, who was maybe 15, a sense of responsibility that made the two girls want very much to help her grandmother and mother understand what was going on, since they spoke no English, while the two girls knew some. We soon meet the other daughter and their mother. And then–tata–Nina. Near 80, she is as spunky as they come. Her husband had died about a year ago and she was asking us if we had anyone in America she could hook up with. There is another relative (and where she fits, I’m not sure), but before long we are having a lovely lunch with the family. Then Nina is showering gifts on us, including a tapestry she herself has made. She brings out pictures she has saved, of Marianne and her brothers, when Marianne was maybe 13. We see pictures of her son and Marianne’s first impression (and mine too) is that he very much looks like one of her two brothers, the older one who lives in Memphis. And soon Nina’s son arrives. He is an air traffic controller for the military and knows some English, on a level with the granddaughters.
After a few hours of talk, we are invited to dinner. They drive us to our hotel and then pick us up again a few hours later at 9pm and take us to a wonderful neighborhood restaurant, where obviously they go often and which I learn, since I ask, you needed to make a reservation for. It was packed. And Dad keeps ordering the ouzo’s. Marianne tells mom that her ring is beautiful. Mom takes it off her finger and gives it Marianne, who in the end accepts it because to do otherwise would seem to be insulting. The cell phone of the sexpot rings–apparently clients for her hair cutting business. Not boyfriends I ask? No. Do you have boyfriends. Oh, yes, 5 of them. I go out with one at 2pm, another at 3pm, etc. She likes to play basketball. I throw one boyfriend in the basket, then another, still another. Who knows what her love life is really like? She does, after all, live at home, with a father who appears to be very smart and engaging, but also on the conservative side. I asked her why she doesn’t have a nose ring? She uses international sign language–her finger across the neck, indicating her father would kill her if she had a nose ring. The younger one was taking some English tests soon. Apparently, she practices by watching American movies. Had she heard of You’ve Got Mail? I say it’s about our neighborhood, the Upper west side, which indeed it is, to some extent. She not only knew the movie but knew who starred in it–Meg Ryan and Tom Hanks. We finish at midnight, get driven to the hotel and say our goodbyes. We had found her roots and what a delightful experience. Postscript: they’ve invited us back in summer time when we could stay at their summer house on Glossa and I know Marianne would love to do this. And maybe, soon, we will.
We brought small gifts, not knowing who we would find or even if we would find anyone–New York City T-shirts and coffee cups. I’d like to send the younger daughter a video of You’ve Got Mail, but Louis tells me we have to transform it for European VCR use. And for the older daughter, I thought of sending her a subscription to some chic hairdressing magazine.
We left Volos and got convinced by a cab driver to take a cab to Delphi and in the end, though it cost a little, it was probably a wise choice since we were exhausted and we saved many, many hours, especially since the cabbie often went over 150 kilometers an hour (over 100mph!) . Delphi isn’t very big. You can walk from one end to the other in about 10-15 minutes. It has a wonderful Museum and ruins I didn’t see, since this is one of the walks I didn’t take. I think, however, that almost everything you would want to see of importance was at the museum, next to the ruins. The view from our hotel room, or from the restaurants we went to, was breathtaking. In these places, we were at the edge of the town, which then dropped into a deep valley and there, maybe half a mile away, mountains rose. It was spectacular. One more night in Athens. Then up at 5am for a 8am flight to Istanbul, a five hour wait in Istanbul, a two hour wait in Amsterdam and then arrival in JFK–a 23 hour day, by the time we got home. Somewhere en route I picked up conjunctivitis, which I hope has been cured. Marianne picked up a bad case of jet lag, which took almost a week to get rid of. Our pictures came out, and along with postcards I had bought, are all assembled in an album.
After we get home, I call my sister, learn all is well and also learn that both my postcards from Turkey had arrived. This was of concern since at the first Turkish post office I went to, they told me a certain amount of stamps were needed and off goes this batch. When I go to another post office with batch two, they say I need a larger amount of stamps. And in post office three, for batch 3, still a larger amount. Go figure.
[I hope I can figure out how to send this. It’s being typed in Corel WordPerfect 8. I want to send it as an attachment. I’d like to avoid having it arrive all choppy, which I think is what happens when I move it to its email location.]
Love to one and all, David
My Lai: A Day of Remembrance
[This was written in 2003, after visiting My Lai, in the fall of 2002. The LA Times, which has often printed me in the past, said it was considering the piece, but then backed down. Apparently, the war fever over Iraq took precedence.]
Today is the 35th anniversary of the My Lai massacre.
This past November, at the My Lai memorial site, I stood around a glass-topped table containing a replica of the area and listened as a local Vietnamese woman recounted in excruciatingly painful detail the cold-blooded murders––often preceded by rapes and mutilations--by US troops that took place there. I was one of several faculty members accompanying a group of students from Brooklyn’s Polytechnic University, touring East Asian countries on an educational trip. The woman wept: guilt-stricken US veterans had paid their respects, but ours was the first busload that included young Americans who cared enough to visit the memorial.
Actually, there were two massacres, one at a hamlet called My Lai 4 and the other at a nearby hamlet, My Khe 4. An official Vietnamese government list, by name, gender and age, indicates that 504 civilians were killed––mostly women, older men and children. Of the last, 50 were three years old or younger. Various studies, including the official army report prepared under the leadership of General William R. Peers, all point to the plausibility of these figures. There were no extenuating circumstances: there was no evidence in contemporary eyewitness accounts, or later army inquiries, of the presence of any Vietcong soldiers.
Although brief––barely four hours––My Lai is one of the greatest atrocities in American military history. Much is known of what happened at My Lai, but there are still at least two questions to be seriously wrestled with. Why is it that prior to coming to Vietnam none of our students had ever heard of My Lai? Moreover, my daughter, who was born 40 years ago on the very date of the My Lai massacre,
March 16, had also never heard of My Lai. Nor had her friends and it is my impression that few Americans under 40 know of it.
The other question is for those who are older and have never forgotten My Lai and Lt. William Calley, the only American soldier convicted of a crime at My Lai (though pardoned soon thereafter by President Nixon): Why is it that none of those I know, who had been anti-war activists, had ever heard of the heroic actions of the three man helicopter crew, headed by Warrant Officer Hugh Thompson, who saved directly at least ten lives, including a child of about five years of age, buried in dead and dismembered bodies? Amazingly, he did so by having one of his crew point his M-60 at the American soldiers who were involved in the killings. On returning to his base, Thompson’s angry report helped stop the operation from moving on to other villages, saving many hundreds from being similarly massacred.
Our ignorance of the heroic intervention of Thompson and his crew is even more puzzling in light of the fact that they were eventually given the Soldier’s Medal, the highest army award for bravery in non-combatant situations (one posthumously, since he was later killed in action). Not wanting to rake over old coals, the army delayed the actual presentation of the medal to Thompson and sought to do this in a quiet office ceremony, but he refused and insisted his crew be equally honored and that this be done publicly in front of the Vietnam Wall that has come to mean so much to Vietnam veterans. The medals were finally awarded at this site, in early March, 1998, in a ceremony broadcast live on CNN and widely reported in the press. Moreover, days later Thompson and the surviving crew member, Larry Colburn, returned to My Lai, to be honored by the villagers, including some whose lives they saved. They were accompanied by CBS’s Mike Wallace, and the visit was later featured on 60 Minutes.
One can easily understand why hawks who supported the war, as well as those who want to avoid publicizing an atrocity which discredited the honor of the army, might not allow Thompson’s brave act to enter their consciousness. But what is to explain the ignorance of the doves? Perhaps the answer lies in their alternative vision––that the Vietnam War was evil. Such a vision allows no place for soldiers who, like Thompson, acted honorably. Nor does it acknowledge those heroic few on the ground at My Lai, who refused to participate in the savagery committed by Calley and his platoon. And it does not recognize the moral commitment and persistence of the Vietnam veteran, Ronald Ridenhour, a helicopter door gunner, who was so shocked and disturbed when he learned of the massacre, that he later wrote a long letter to many in Congress, a letter which not only led to the indictment of Calley but is what ultimately led My Lai to be publicly exposed.
But the larger issue is why My Lai in general has seemingly been forgotten or ignored by Americans. In our unwillingness to face up to an atrocity we have committed there, we seem to be closer to the Japanese who refuse to admit their war crimes than to the Germans who dwell on their war guilt and the holocaust. Ignoring My Lai, and other dark moments in our history, we are smug in our self-righteousness and are determined to shape the world in our image. We seem unaware that much of the world sees us as flawed––perhaps deeply flawed––not merely unwilling to face up to our moral failures but utterly oblivious of the fact that such failings exist.
For this reason, it would be fitting if, in our zeal to Americanize the world, we step back and acknowledge our moral shortcomings by issuing a formal statement of apology to the hamlets of My Lai 4 and My Khe 4. In the spirit of honesty, as exemplified by courageous career soldiers like General Peers and other military officers appointed to examine what happened at My Lai––and were horrified––and at a moment when war clouds gather, we must resolve never again to whitewash barbaric acts engaged in by our military.Such resolve can be symbolized by making March 16––the date of the My Lai massacre––a nationally recognized day of remembrance.
In the "patriotic" fervor of that era, after his conviction, but before his pardon, there were rallies for Rusty Calley, as he was known. One Southern governor urged that motorists drive with their headlights on to "honor the flag as ‘Rusty’ had done." Nothing would be more fitting than to have, as leader of a campaign to designate March 16 as a day of remembrance, the author of that statement, our most recent Nobel Peace prize recipient, Jimmy Carter.
Today is the 35th anniversary of the My Lai massacre.
This past November, at the My Lai memorial site, I stood around a glass-topped table containing a replica of the area and listened as a local Vietnamese woman recounted in excruciatingly painful detail the cold-blooded murders––often preceded by rapes and mutilations--by US troops that took place there. I was one of several faculty members accompanying a group of students from Brooklyn’s Polytechnic University, touring East Asian countries on an educational trip. The woman wept: guilt-stricken US veterans had paid their respects, but ours was the first busload that included young Americans who cared enough to visit the memorial.
Actually, there were two massacres, one at a hamlet called My Lai 4 and the other at a nearby hamlet, My Khe 4. An official Vietnamese government list, by name, gender and age, indicates that 504 civilians were killed––mostly women, older men and children. Of the last, 50 were three years old or younger. Various studies, including the official army report prepared under the leadership of General William R. Peers, all point to the plausibility of these figures. There were no extenuating circumstances: there was no evidence in contemporary eyewitness accounts, or later army inquiries, of the presence of any Vietcong soldiers.
Although brief––barely four hours––My Lai is one of the greatest atrocities in American military history. Much is known of what happened at My Lai, but there are still at least two questions to be seriously wrestled with. Why is it that prior to coming to Vietnam none of our students had ever heard of My Lai? Moreover, my daughter, who was born 40 years ago on the very date of the My Lai massacre,
March 16, had also never heard of My Lai. Nor had her friends and it is my impression that few Americans under 40 know of it.
The other question is for those who are older and have never forgotten My Lai and Lt. William Calley, the only American soldier convicted of a crime at My Lai (though pardoned soon thereafter by President Nixon): Why is it that none of those I know, who had been anti-war activists, had ever heard of the heroic actions of the three man helicopter crew, headed by Warrant Officer Hugh Thompson, who saved directly at least ten lives, including a child of about five years of age, buried in dead and dismembered bodies? Amazingly, he did so by having one of his crew point his M-60 at the American soldiers who were involved in the killings. On returning to his base, Thompson’s angry report helped stop the operation from moving on to other villages, saving many hundreds from being similarly massacred.
Our ignorance of the heroic intervention of Thompson and his crew is even more puzzling in light of the fact that they were eventually given the Soldier’s Medal, the highest army award for bravery in non-combatant situations (one posthumously, since he was later killed in action). Not wanting to rake over old coals, the army delayed the actual presentation of the medal to Thompson and sought to do this in a quiet office ceremony, but he refused and insisted his crew be equally honored and that this be done publicly in front of the Vietnam Wall that has come to mean so much to Vietnam veterans. The medals were finally awarded at this site, in early March, 1998, in a ceremony broadcast live on CNN and widely reported in the press. Moreover, days later Thompson and the surviving crew member, Larry Colburn, returned to My Lai, to be honored by the villagers, including some whose lives they saved. They were accompanied by CBS’s Mike Wallace, and the visit was later featured on 60 Minutes.
One can easily understand why hawks who supported the war, as well as those who want to avoid publicizing an atrocity which discredited the honor of the army, might not allow Thompson’s brave act to enter their consciousness. But what is to explain the ignorance of the doves? Perhaps the answer lies in their alternative vision––that the Vietnam War was evil. Such a vision allows no place for soldiers who, like Thompson, acted honorably. Nor does it acknowledge those heroic few on the ground at My Lai, who refused to participate in the savagery committed by Calley and his platoon. And it does not recognize the moral commitment and persistence of the Vietnam veteran, Ronald Ridenhour, a helicopter door gunner, who was so shocked and disturbed when he learned of the massacre, that he later wrote a long letter to many in Congress, a letter which not only led to the indictment of Calley but is what ultimately led My Lai to be publicly exposed.
But the larger issue is why My Lai in general has seemingly been forgotten or ignored by Americans. In our unwillingness to face up to an atrocity we have committed there, we seem to be closer to the Japanese who refuse to admit their war crimes than to the Germans who dwell on their war guilt and the holocaust. Ignoring My Lai, and other dark moments in our history, we are smug in our self-righteousness and are determined to shape the world in our image. We seem unaware that much of the world sees us as flawed––perhaps deeply flawed––not merely unwilling to face up to our moral failures but utterly oblivious of the fact that such failings exist.
For this reason, it would be fitting if, in our zeal to Americanize the world, we step back and acknowledge our moral shortcomings by issuing a formal statement of apology to the hamlets of My Lai 4 and My Khe 4. In the spirit of honesty, as exemplified by courageous career soldiers like General Peers and other military officers appointed to examine what happened at My Lai––and were horrified––and at a moment when war clouds gather, we must resolve never again to whitewash barbaric acts engaged in by our military.Such resolve can be symbolized by making March 16––the date of the My Lai massacre––a nationally recognized day of remembrance.
In the "patriotic" fervor of that era, after his conviction, but before his pardon, there were rallies for Rusty Calley, as he was known. One Southern governor urged that motorists drive with their headlights on to "honor the flag as ‘Rusty’ had done." Nothing would be more fitting than to have, as leader of a campaign to designate March 16 as a day of remembrance, the author of that statement, our most recent Nobel Peace prize recipient, Jimmy Carter.
Thursday, June 3, 2010
Partisanship and Nastiness
Recently, I attended my 55th year reunion at Amherst College. It is traditional to hold panels on topics of contemporary relevance. One of these, sponsored by my class, was entitled: Political Bipartisanship: Why and How It Has Failed in Current American Politics. I had wanted to be one of the panelists, but there wasn’t time. However, the chairman of the panel allowed me to make a four minute comment, using the mike (and I was grateful). Below, in capital letters is more or less what I said and then added, in regular type, are some of things I would have added, had I more time.
1. I POINTED OUT THAT CONTEMPORARY PARTISANSHIP, AND THE NASTINESS WHICH ACCOMPANIES IT, HAD A RECENT ANTECEDENT–1993. IN THAT YEAR, EVERY REPUBLICAN IN THE SENATE AND HOUSE VOTED AGAINST BILL CLINTON’S TAX INCREASE, DESIGNED TO REDUCE THE DEFICIT AND THEREBY LOWER INTEREST RATES AND INCREASE INVESTMENT. (The vote was 51-50 in the Senate–Al Gore–and 218 -216 in the House.) SOME OF THE NASTINESS INCLUDED ACCUSATIONS THAT BILL AND/OR HILLARY HAD KILLED VINCENT FOSTER.
There were also accusations about White Water and endless attempts to prove criminal behavior, but nothing criminal was ever found. Also, I admit the nastiness of that period doesn’t come near what it is today, but as one will see in one of my arguments as to why partisanship has triumphed, the causes of both 1993 and 2008-10 have similar roots.
I THEN GAVE 5 REASONS WHY WE HAVE THE SITUATION WE HAVE.
1. 9/11: IT GENERATED FEARS THAT DON’T GO AWAY AND FOR MANY ARE INCREASED BECAUSE WE HAVE A PRESIDENT NAMED BARRACK HUSSEIN OBAMA. (Perhaps, also playing a role in contemporary anger, fears and nastiness is the humiliation many still feel about losing the Vietnam War.)
2. ENTITLEMENT: CONSERVATIVE REPUBLICANS FOR YEARS WERE SHUT OUT OF POWER BY THE EASTERN MODERATES, SUCH AS THOMAS DEWEY (THE GOP CANDIDATE IN 1944 AND 1948) AND NELSON ROCKEFELLER. EVEN MR. REPUBLICAN, ROBERT TAFT, WAS KEPT FROM GETTING THE NOMINATION IN 1952. WHEN THEY DO GET POWER, IN 1980 (WITH REAGAN) AND AGAIN IN 2000 (WITH GEORGE W. BUSH), THEY FELT THEY WERE ENTITLED TO THE POWER THEY HAD FINALLY ACHIEVED. (MOSTLY, MODERATES WERE NO LONGER PART OF THE PARTY.) THE CONSERVATIVES FELT THAT NOW THEY WOULD HAVE A CHANCE TO RECONSTRUCT THE ECONOMY AND SOCIETY THE WAY THEY FELT IT SHOULD BE–MEANING, IN GENERAL, A REVERSAL OF THE NEW DEAL AND WHAT FOLLOWED (SUCH AS THE FAIR DEAL AND GREAT SOCIETY). DENIED THIS POWER, NOT ONCE BUT TWICE, THEY IN EFFECT THREW PUBLIC FITS. THE CURRENT LACK OF BIPARTISANSHIP AND NASTINESS REFLECTS THIS ENTITLEMENT DENIED. I might add that when, in 1964, Goldwater did receive the nomination, some of the epithets hurled at the Rockefeller-ites were as nasty as much of what are hearing these days, just different.
But also, in an article I read since reunion weekend, written by the respectable writer, Peter Beinert, in Time, to the above psychological argument we should add a situational factor. In the 1970's, the filibuster rule was adopted. This meant that aggressive Republicans, like Newt Gingrich, Tom DeLay, Trent Lott and Grover Norquist decided they could use the filibuster to discredit government, and the Democrats–in the first instance, the Clinton Administration–to position themselves for taking power again (except that under Gingrich, in 1994, it backfired). As Beinert points out, since 2009, the Republicans have increased their filibustering, increased their attacks on any waverers amongst them, crippled reforms in general and in part, health care, in particular. But, ultimately, it is because they feel entitled and have an unwavering view of their virtuosity.
Along different lines, two points: First, Democrats also changed, since after the Civil Rights Act of 1965, the “Solid (Democratic) South,” (essentially the segregationist South) turned Republican and more or less over time became the “Solid (Republican) South. Secondly, the ferment of the 1960's–the Free Speech Movement, the marijuana days–drugs and sex–(perhaps we could call this the Spirit of Woodstock–since I have a summer house there) led to an anti-government attitude among leftists, who thought the government had no right to tell them what to smoke and who thought the Great Society was being manipulated by liberal politicians who didn’t know what they were doing (or perhaps didn’t care and were in the pockets of corporations). This leftist critique of authority intriguingly led years later to a critical right wing view of governmental authority–examples being the belief that climate experts don’t know what they are talking about and school officials shouldn’t force evolution down student throats–leading, in part, to home schooling.
3: IGNORANCE. IN THIS COUNTRY, POLITICS OPERATES IN A CULTURE OF EXTREME IGNORANCE. THE AVERAGE AMERICAN, FOR EXAMPLE, BELIEVES THAT 20 % OF OUR GDP GOES TO FOREIGN (ECONOMIC) AID, WHEN THE REAL PERCENTAGE IS LESS THAN ONE HALF OF 1 %. PEOPLE IN EFFECT BELIEVE THEY ARE BEING TAXED HEAVILY FOR SPENDING THAT IN REALITY DOESN’T EXIST.
4. COLOR. IN MY VIEW, THE SITUATION WOULD NOT BE SIGNIFICANTLY DIFFERENT HAD HILLARY CLINTON WON THE PRESIDENCY, RATHER THAN OBAMA. BUT THERE ARE MANY OLD-FASHIONED AMERICANS OUT THERE WHO, MORE OR LESS, LIVE IN THE PAST. THEY LIKED IT WHEN GAYS WERE IN THE CLOSET, BLACKS KNEW THEIR PLACE (AND IT WAS DEFINITELY NOT 1600PENNSYLVANIA AVENUE) AND WOMEN (OR AT LEAST ONE OF THEM) RULED THE HOME AND NOT THE HOUSE.
5. THE ECONOMY. EVERYONE KNOWS, OF COURSE, OF HOUSING FORECLOSURES AND HIGH LEVELS OF UNEMPLOYMENT. I WOULD ALSO FOCUS ON INCOME DISTRIBUTION. WE HAVE THE GREATEST INCOME INEQUALITY OF ANY IN THE DEVELOPED WORLD. AND IT IS WORSENING. FOR NEARLY 40YEARS, REAL WAGES–WAGES ADJUSTED FOR INFLATION–HAVEN’T INCREASED. MEANWHILE THE RICH ARE DOING SO MUCH BETTER. FOR EXAMPLE, THE TOP 1/100 OF 1 % “EARNED,” IN 1972
1 % OF OUR TOTAL INCOME. IN 2008, THIS HAD RISEN TO 6 %. (This statistic comes to us from a Berkeley professor named Emmanuel Saez, who was given the highest award the economic profession can give–the Nobel is given by others–the John Bates Clark award, given every other year (then) to that economist under 40 who makes the biggest contribution (and it is now given every year).
FEW, WHO ARE STRUGGLING, KNOW (OF COURSE) THIS STATISTIC, BUT I THINK THEY FEEL IT, FOR NOT ONLY DO THEY KNOW FRIENDS WHO ARE UNEMPLOYED (OR ARE THEMSELVES UNEMPLOYED) OR HAVE HAD THEIR HOMES TAKEN FROM THEM, OR LOST THEIR NEST EGGS, BUT THEY ALSO READ OF BANKERS TAKING HOME MILLIONS IN BONUSES. (Enough, even, to enrage me.) A friend points out that Tea Baggers have above average income. That they do, it appears. And most, I read, want to keep Medicare and Social Security, even though Big Government is of course bad, but not if it helps them. But many of the Tea Baggers do not earn above average income and many who are outraged about the bankers are not Tea Baggers. The impact of inequality is, I think, real.
What I did not have time for is any mention of what should be done. One panelist listed dozens of things, none of which were significant, in and of themselves, but could change things if adapted or made legal. I would have preferred that he acknowledge that while these proposals have little chance of having an immediate impact, they can provide a guide when the time for meaningful change is ripe.
From my perspective, the necessary condition, but not sufficient one, for lessening vitriol and restoring a greater degree of bipartisanship, is having a much improved economy. Unfortunately, the short term prospects are not good. Paul Krugman sees perhaps a Lost Decade here, similar to what Japan experienced in the 1990's (and to some degree experienced in the decade which followed). Robert Shiller, of Yale, who amazingly predicted both the dot-com bubble and the real estate bubble, is fearful that the economy will turn down before it gets above where it was in 2007 (what is typically called a double dip). And just a few days ago, the very much respected OECD (the Organization for Economic Cooperation and Development) forecasts that the unemployment rate in the fall of 2011–almost a year and a half from now–will be at 8.4 %. This is incredibly high, so many years after the cyclical peak, especially when one considers that in the late 1990's, the unemployment rate fell to 4 %.
But the long run prospects are also not good. In brief, what is needed is more infrastructure spending, more funding of lower level education, given what our international competition is doing in math and science, and more spending to cleanse our environment. And all of this implies greater taxation, not less. And, unfortunately, it is not something to be paid for by the upper 1/100 of 1 % (or even the upper 10 %). By emphasizing no new taxes on people making less than $250,000 (which is appropriate now), Obama is (unwittingly) undermining what will be needed in future years.
The upshot is that we are not likely to do what is economically needed. Thus, the future may give us a positive (but unhappy) answer to what was discussed in another panel: Is America in Decline?
1. I POINTED OUT THAT CONTEMPORARY PARTISANSHIP, AND THE NASTINESS WHICH ACCOMPANIES IT, HAD A RECENT ANTECEDENT–1993. IN THAT YEAR, EVERY REPUBLICAN IN THE SENATE AND HOUSE VOTED AGAINST BILL CLINTON’S TAX INCREASE, DESIGNED TO REDUCE THE DEFICIT AND THEREBY LOWER INTEREST RATES AND INCREASE INVESTMENT. (The vote was 51-50 in the Senate–Al Gore–and 218 -216 in the House.) SOME OF THE NASTINESS INCLUDED ACCUSATIONS THAT BILL AND/OR HILLARY HAD KILLED VINCENT FOSTER.
There were also accusations about White Water and endless attempts to prove criminal behavior, but nothing criminal was ever found. Also, I admit the nastiness of that period doesn’t come near what it is today, but as one will see in one of my arguments as to why partisanship has triumphed, the causes of both 1993 and 2008-10 have similar roots.
I THEN GAVE 5 REASONS WHY WE HAVE THE SITUATION WE HAVE.
1. 9/11: IT GENERATED FEARS THAT DON’T GO AWAY AND FOR MANY ARE INCREASED BECAUSE WE HAVE A PRESIDENT NAMED BARRACK HUSSEIN OBAMA. (Perhaps, also playing a role in contemporary anger, fears and nastiness is the humiliation many still feel about losing the Vietnam War.)
2. ENTITLEMENT: CONSERVATIVE REPUBLICANS FOR YEARS WERE SHUT OUT OF POWER BY THE EASTERN MODERATES, SUCH AS THOMAS DEWEY (THE GOP CANDIDATE IN 1944 AND 1948) AND NELSON ROCKEFELLER. EVEN MR. REPUBLICAN, ROBERT TAFT, WAS KEPT FROM GETTING THE NOMINATION IN 1952. WHEN THEY DO GET POWER, IN 1980 (WITH REAGAN) AND AGAIN IN 2000 (WITH GEORGE W. BUSH), THEY FELT THEY WERE ENTITLED TO THE POWER THEY HAD FINALLY ACHIEVED. (MOSTLY, MODERATES WERE NO LONGER PART OF THE PARTY.) THE CONSERVATIVES FELT THAT NOW THEY WOULD HAVE A CHANCE TO RECONSTRUCT THE ECONOMY AND SOCIETY THE WAY THEY FELT IT SHOULD BE–MEANING, IN GENERAL, A REVERSAL OF THE NEW DEAL AND WHAT FOLLOWED (SUCH AS THE FAIR DEAL AND GREAT SOCIETY). DENIED THIS POWER, NOT ONCE BUT TWICE, THEY IN EFFECT THREW PUBLIC FITS. THE CURRENT LACK OF BIPARTISANSHIP AND NASTINESS REFLECTS THIS ENTITLEMENT DENIED. I might add that when, in 1964, Goldwater did receive the nomination, some of the epithets hurled at the Rockefeller-ites were as nasty as much of what are hearing these days, just different.
But also, in an article I read since reunion weekend, written by the respectable writer, Peter Beinert, in Time, to the above psychological argument we should add a situational factor. In the 1970's, the filibuster rule was adopted. This meant that aggressive Republicans, like Newt Gingrich, Tom DeLay, Trent Lott and Grover Norquist decided they could use the filibuster to discredit government, and the Democrats–in the first instance, the Clinton Administration–to position themselves for taking power again (except that under Gingrich, in 1994, it backfired). As Beinert points out, since 2009, the Republicans have increased their filibustering, increased their attacks on any waverers amongst them, crippled reforms in general and in part, health care, in particular. But, ultimately, it is because they feel entitled and have an unwavering view of their virtuosity.
Along different lines, two points: First, Democrats also changed, since after the Civil Rights Act of 1965, the “Solid (Democratic) South,” (essentially the segregationist South) turned Republican and more or less over time became the “Solid (Republican) South. Secondly, the ferment of the 1960's–the Free Speech Movement, the marijuana days–drugs and sex–(perhaps we could call this the Spirit of Woodstock–since I have a summer house there) led to an anti-government attitude among leftists, who thought the government had no right to tell them what to smoke and who thought the Great Society was being manipulated by liberal politicians who didn’t know what they were doing (or perhaps didn’t care and were in the pockets of corporations). This leftist critique of authority intriguingly led years later to a critical right wing view of governmental authority–examples being the belief that climate experts don’t know what they are talking about and school officials shouldn’t force evolution down student throats–leading, in part, to home schooling.
3: IGNORANCE. IN THIS COUNTRY, POLITICS OPERATES IN A CULTURE OF EXTREME IGNORANCE. THE AVERAGE AMERICAN, FOR EXAMPLE, BELIEVES THAT 20 % OF OUR GDP GOES TO FOREIGN (ECONOMIC) AID, WHEN THE REAL PERCENTAGE IS LESS THAN ONE HALF OF 1 %. PEOPLE IN EFFECT BELIEVE THEY ARE BEING TAXED HEAVILY FOR SPENDING THAT IN REALITY DOESN’T EXIST.
4. COLOR. IN MY VIEW, THE SITUATION WOULD NOT BE SIGNIFICANTLY DIFFERENT HAD HILLARY CLINTON WON THE PRESIDENCY, RATHER THAN OBAMA. BUT THERE ARE MANY OLD-FASHIONED AMERICANS OUT THERE WHO, MORE OR LESS, LIVE IN THE PAST. THEY LIKED IT WHEN GAYS WERE IN THE CLOSET, BLACKS KNEW THEIR PLACE (AND IT WAS DEFINITELY NOT 1600PENNSYLVANIA AVENUE) AND WOMEN (OR AT LEAST ONE OF THEM) RULED THE HOME AND NOT THE HOUSE.
5. THE ECONOMY. EVERYONE KNOWS, OF COURSE, OF HOUSING FORECLOSURES AND HIGH LEVELS OF UNEMPLOYMENT. I WOULD ALSO FOCUS ON INCOME DISTRIBUTION. WE HAVE THE GREATEST INCOME INEQUALITY OF ANY IN THE DEVELOPED WORLD. AND IT IS WORSENING. FOR NEARLY 40YEARS, REAL WAGES–WAGES ADJUSTED FOR INFLATION–HAVEN’T INCREASED. MEANWHILE THE RICH ARE DOING SO MUCH BETTER. FOR EXAMPLE, THE TOP 1/100 OF 1 % “EARNED,” IN 1972
1 % OF OUR TOTAL INCOME. IN 2008, THIS HAD RISEN TO 6 %. (This statistic comes to us from a Berkeley professor named Emmanuel Saez, who was given the highest award the economic profession can give–the Nobel is given by others–the John Bates Clark award, given every other year (then) to that economist under 40 who makes the biggest contribution (and it is now given every year).
FEW, WHO ARE STRUGGLING, KNOW (OF COURSE) THIS STATISTIC, BUT I THINK THEY FEEL IT, FOR NOT ONLY DO THEY KNOW FRIENDS WHO ARE UNEMPLOYED (OR ARE THEMSELVES UNEMPLOYED) OR HAVE HAD THEIR HOMES TAKEN FROM THEM, OR LOST THEIR NEST EGGS, BUT THEY ALSO READ OF BANKERS TAKING HOME MILLIONS IN BONUSES. (Enough, even, to enrage me.) A friend points out that Tea Baggers have above average income. That they do, it appears. And most, I read, want to keep Medicare and Social Security, even though Big Government is of course bad, but not if it helps them. But many of the Tea Baggers do not earn above average income and many who are outraged about the bankers are not Tea Baggers. The impact of inequality is, I think, real.
What I did not have time for is any mention of what should be done. One panelist listed dozens of things, none of which were significant, in and of themselves, but could change things if adapted or made legal. I would have preferred that he acknowledge that while these proposals have little chance of having an immediate impact, they can provide a guide when the time for meaningful change is ripe.
From my perspective, the necessary condition, but not sufficient one, for lessening vitriol and restoring a greater degree of bipartisanship, is having a much improved economy. Unfortunately, the short term prospects are not good. Paul Krugman sees perhaps a Lost Decade here, similar to what Japan experienced in the 1990's (and to some degree experienced in the decade which followed). Robert Shiller, of Yale, who amazingly predicted both the dot-com bubble and the real estate bubble, is fearful that the economy will turn down before it gets above where it was in 2007 (what is typically called a double dip). And just a few days ago, the very much respected OECD (the Organization for Economic Cooperation and Development) forecasts that the unemployment rate in the fall of 2011–almost a year and a half from now–will be at 8.4 %. This is incredibly high, so many years after the cyclical peak, especially when one considers that in the late 1990's, the unemployment rate fell to 4 %.
But the long run prospects are also not good. In brief, what is needed is more infrastructure spending, more funding of lower level education, given what our international competition is doing in math and science, and more spending to cleanse our environment. And all of this implies greater taxation, not less. And, unfortunately, it is not something to be paid for by the upper 1/100 of 1 % (or even the upper 10 %). By emphasizing no new taxes on people making less than $250,000 (which is appropriate now), Obama is (unwittingly) undermining what will be needed in future years.
The upshot is that we are not likely to do what is economically needed. Thus, the future may give us a positive (but unhappy) answer to what was discussed in another panel: Is America in Decline?
Economic Update
Every so often I put forth an economic update which essentially says the same thing and probably bores the hell out of the few who read it. So warning: there is more of the same. That is, in brief, the short run prospects are bad and the long term prospects even worse (probably). [Keep in mind that economists are known for being able to be excellent predictors of the past.]
Short run: but how short is short? The interesting question is whether the recovery will continue long enough so that a new peak will be achieved, after which any downturn will be termed a new recession. If, however, the downturn occurs before the new peak, what we then have is a double dip. At the moment, we have at least two prominent economists predicting a possible double dip: Dr Doom, Nouriel Roubini, (who when I last read him a few weeks ago gave the possibility of a double dip at about 25 or 30 %. (Roubini was regarded by many as a crank in the late 1990's, because he was predicting dire straits after the bursting of what he saw as a dangerous bubble, but is now regarded as a prescient genius.) But there is also Robert Shiller, of Yale, who is giving hints he expects a double dip, but not in the very immediate future. Shiller, in my view, is at least Roubini’s equal as prescient genius–see his cleverly-named book, “Irrational Exuberance”--in that he not only predicted dangerous consequences from the bursting of the dot-com bubble, but also–early on–saw we were developing a dangerous housing bubble.
Paul Krugman (PK)is perhaps less daring but possibly more pessimistic. He fears we are in for a Lost Decade, the phrase used to describe the decade of the 1990's for the Japanese, one of stagnation after having more than forty years of fantastic growth. (And as PK notes the decade that followed was not that big an improvement.) For Krugman, it is a fear that the problem before us is not inflation, but its opposite, deflation. If prices actually fall, buyers hold out on their purchases in order to get whatever it is they want–cheaper.
People like Krugman, Roubini and Shiller see a frighteningly weak recovery. To be sure weak recoveries have been the recent pattern–there was one after the recession of 1990-91 and 2001. However, in time the first of these recessions led to a boom–in the late 1990's unemployment fell to 4 %--while the second did not. Playing into contemporary weakness are the basic factors: exports are not strong, in a world where our wages are high, as well as a European world that is literally shaking in its boots, even if the weakest–the PIIG’s (Portugal, Ireland, Italy and Greece) and Spain–do not buy that much of our exports. It is simply that a weak world economy is never good for economies in general and exports in particular.
Investment is low, not only because banks are reluctant to loan (or don’t have the funds), but also because one of its biggest components–construction (of houses and commercial real estate)–is in the doldrums and will undoubtedly remain there for a good while.
Most important is consumption, but here we have deep fears (though these rise and fall) along with less ability to borrow against houses or even borrow as much using credit cards. What is needed is a second stimulus, since the first was too small (even if it sounds big–at $787 billion it was far below what Christina Romer (the woman who heads Obama’s Council of Economic Advisers) was calling for, which was $1.2trillion. But politically a second stimulus is dead as a doornail.
Given all this, it is not surprising that the prestigious Organization for Economic Cooperation and Development (OECD) is predicting that a year and a half from now, approximately, unemployment will still be at 8.4 %. Krugman–whose blog I highly recommend–is unhappy with groups like the OECD, because they are calling for higher interest rates (fearful of an inflation that does not exist) and others are calling for a reduction of the deficit. If either monetary or fiscal policy (or both) veer towards tightness, then I think “1933–here we come.” Fortunately, so far, Bernanke is resisting this pressure, but good policies have a way of being driven out by bad thoughts.
Some think the economy has recovered more than it has because the stock market has recovered more than expected. Why it has done as well as it has I am not sure of (and don’t read stock market studies), although I suspect it ultimately relates to the fact that the corporations listed on the exchanges are able to substitute cheap labor from China and elsewhere for American labor and thereby end up making more profits, even if none of this shows up in improved unemployment rates, lessening of the length of time workers are unemployed or significant improvements in the hiring of workers entering the labor force, even those who graduated from college. In any event, one should always separate the financial data from the real economy, when one evaluates how an economy is doing (although in the end, of course, there is a correlation of sorts.)
The long run situation is of course fuzzier. Who knew there were automobiles before there were automobiles or computers before there were computers? Who knows what lies ahead? But I do think, even given this ignorance, there is still something to be said. We need a huge improvement in our infrastructure. We need a huge improvement in our pre-college education. We need a huge improvement in our environmental programs. We need, in short, a huge improvement in our Federal government at a point when politically people are more anti-government that they have been in decades–or perhaps in my lifetime (and like Jack Benny I am an older 39).
In short, we are becoming ungovernable (a national version of California) at a time when we need to be increasingly governable. To solve our future problems we will need to spend and tax. In the end, I think it could be argued that many who hate government have enough pet projects–earmarks in their states, disaster relief, farm supports, and so forth, that increased Federal spending remains a possibility–although I fear much of this sentiment can be Reagan-ish, in that he had no trouble saying government was the problem but increasing military spending by many billions and there’s where the increases may take place. But whatever possibilities exist on the spending front for infrastructure–bring back Ike and his highway program (concealed as a necessity for defense)–or education and the array of possible environmental programs–more wind power, more electric cars, more use of solar power, more conservation (including insulation and energy efficient public transportation), it is clear we are reluctant, as a culture, to give up gasoline and oil, coal, and the overuse of products that use energy. But even more upsetting, we are a something for nothing culture, like Greece. We want this and that but we don’t want to be taxed for what we get.
The possibility of a good economic future requires changing age-old habits. I suppose there will come a time when it is realized there are limitations of how we utilize our power to get what we want–Iraq and Afghanistan will help move us in the right direction, one hopes–but will there come a time when we are willing to transform ourselves into what we are not. That is, can we live more simply, live without gas-guzzling (or perhaps without cars at all in places like Manhattan), live without endless numbers of energy-using products? And on top of this are we willing to be taxed at higher rates to pay for what is needed–health and education.
If your answer to these questions is that we can make the changes needed, then we have a potentially successful economic future. If, however, you think, like me, this is a transition we cannot make (or cannot make in the degree needed), then our long term future is weak, if not grim.
Short run: but how short is short? The interesting question is whether the recovery will continue long enough so that a new peak will be achieved, after which any downturn will be termed a new recession. If, however, the downturn occurs before the new peak, what we then have is a double dip. At the moment, we have at least two prominent economists predicting a possible double dip: Dr Doom, Nouriel Roubini, (who when I last read him a few weeks ago gave the possibility of a double dip at about 25 or 30 %. (Roubini was regarded by many as a crank in the late 1990's, because he was predicting dire straits after the bursting of what he saw as a dangerous bubble, but is now regarded as a prescient genius.) But there is also Robert Shiller, of Yale, who is giving hints he expects a double dip, but not in the very immediate future. Shiller, in my view, is at least Roubini’s equal as prescient genius–see his cleverly-named book, “Irrational Exuberance”--in that he not only predicted dangerous consequences from the bursting of the dot-com bubble, but also–early on–saw we were developing a dangerous housing bubble.
Paul Krugman (PK)is perhaps less daring but possibly more pessimistic. He fears we are in for a Lost Decade, the phrase used to describe the decade of the 1990's for the Japanese, one of stagnation after having more than forty years of fantastic growth. (And as PK notes the decade that followed was not that big an improvement.) For Krugman, it is a fear that the problem before us is not inflation, but its opposite, deflation. If prices actually fall, buyers hold out on their purchases in order to get whatever it is they want–cheaper.
People like Krugman, Roubini and Shiller see a frighteningly weak recovery. To be sure weak recoveries have been the recent pattern–there was one after the recession of 1990-91 and 2001. However, in time the first of these recessions led to a boom–in the late 1990's unemployment fell to 4 %--while the second did not. Playing into contemporary weakness are the basic factors: exports are not strong, in a world where our wages are high, as well as a European world that is literally shaking in its boots, even if the weakest–the PIIG’s (Portugal, Ireland, Italy and Greece) and Spain–do not buy that much of our exports. It is simply that a weak world economy is never good for economies in general and exports in particular.
Investment is low, not only because banks are reluctant to loan (or don’t have the funds), but also because one of its biggest components–construction (of houses and commercial real estate)–is in the doldrums and will undoubtedly remain there for a good while.
Most important is consumption, but here we have deep fears (though these rise and fall) along with less ability to borrow against houses or even borrow as much using credit cards. What is needed is a second stimulus, since the first was too small (even if it sounds big–at $787 billion it was far below what Christina Romer (the woman who heads Obama’s Council of Economic Advisers) was calling for, which was $1.2trillion. But politically a second stimulus is dead as a doornail.
Given all this, it is not surprising that the prestigious Organization for Economic Cooperation and Development (OECD) is predicting that a year and a half from now, approximately, unemployment will still be at 8.4 %. Krugman–whose blog I highly recommend–is unhappy with groups like the OECD, because they are calling for higher interest rates (fearful of an inflation that does not exist) and others are calling for a reduction of the deficit. If either monetary or fiscal policy (or both) veer towards tightness, then I think “1933–here we come.” Fortunately, so far, Bernanke is resisting this pressure, but good policies have a way of being driven out by bad thoughts.
Some think the economy has recovered more than it has because the stock market has recovered more than expected. Why it has done as well as it has I am not sure of (and don’t read stock market studies), although I suspect it ultimately relates to the fact that the corporations listed on the exchanges are able to substitute cheap labor from China and elsewhere for American labor and thereby end up making more profits, even if none of this shows up in improved unemployment rates, lessening of the length of time workers are unemployed or significant improvements in the hiring of workers entering the labor force, even those who graduated from college. In any event, one should always separate the financial data from the real economy, when one evaluates how an economy is doing (although in the end, of course, there is a correlation of sorts.)
The long run situation is of course fuzzier. Who knew there were automobiles before there were automobiles or computers before there were computers? Who knows what lies ahead? But I do think, even given this ignorance, there is still something to be said. We need a huge improvement in our infrastructure. We need a huge improvement in our pre-college education. We need a huge improvement in our environmental programs. We need, in short, a huge improvement in our Federal government at a point when politically people are more anti-government that they have been in decades–or perhaps in my lifetime (and like Jack Benny I am an older 39).
In short, we are becoming ungovernable (a national version of California) at a time when we need to be increasingly governable. To solve our future problems we will need to spend and tax. In the end, I think it could be argued that many who hate government have enough pet projects–earmarks in their states, disaster relief, farm supports, and so forth, that increased Federal spending remains a possibility–although I fear much of this sentiment can be Reagan-ish, in that he had no trouble saying government was the problem but increasing military spending by many billions and there’s where the increases may take place. But whatever possibilities exist on the spending front for infrastructure–bring back Ike and his highway program (concealed as a necessity for defense)–or education and the array of possible environmental programs–more wind power, more electric cars, more use of solar power, more conservation (including insulation and energy efficient public transportation), it is clear we are reluctant, as a culture, to give up gasoline and oil, coal, and the overuse of products that use energy. But even more upsetting, we are a something for nothing culture, like Greece. We want this and that but we don’t want to be taxed for what we get.
The possibility of a good economic future requires changing age-old habits. I suppose there will come a time when it is realized there are limitations of how we utilize our power to get what we want–Iraq and Afghanistan will help move us in the right direction, one hopes–but will there come a time when we are willing to transform ourselves into what we are not. That is, can we live more simply, live without gas-guzzling (or perhaps without cars at all in places like Manhattan), live without endless numbers of energy-using products? And on top of this are we willing to be taxed at higher rates to pay for what is needed–health and education.
If your answer to these questions is that we can make the changes needed, then we have a potentially successful economic future. If, however, you think, like me, this is a transition we cannot make (or cannot make in the degree needed), then our long term future is weak, if not grim.
Fiscally Conservative; Socially Moderate
Often, we hear of moderate Republicans saying they are fiscally conservative and socially moderate. A contemporary example is Tom Campbell, who is running in the California primary for Senator, to be held on June 22. In his case, being socially moderate means he favors allowing abortions.
But there is an assumption made by these moderate Republicans that I think is untrue. And that is that the Republican Party is the party of fiscal responsibility. Perhaps, once, when Eisenhower was President a case could be made, although in making it you come up against the problem that he was fiscally “responsible” when he should have been “irresponsible.” That is, during the serious recession of 1957-58, he refused to allow a tax cut to take place (in the name of fiscal responsibility) but it would have been a needed stimulus. The result was a weak recovery which soon thereafter led to another recession in 1960. (Politically, it probably led to the victory of Kennedy over Nixon in the election of that year.)
I suspect a good case can be made that in the last one hundred and ten years–yes,
110, starting in 1900–the most fiscally irresponsible President was the conservative hero, Ronald Reagan. He cut taxes while we were in the midst of double digit inflation, leading the Federal Reserve under Paul Volcker to raise interest rates astronomically–the prime rate briefly rose to 21 1/2 percent (it is now just above
3 %) and mortgage rates for financially stable borrowers were about 17-18 %. As a result of the weak economy tight money produced, which almost automatically leads to less revenue coming into the Federal government, along with the tax cut, the national debt quadrupled under Reagan during his eight years, from approximately $1 trillion to $4 trillion. This takes the cake.
But probably the second most fiscally irresponsible President was George W. Bush, who inherited from the Clinton Administration an enormous and unprecedented fiscal surplus. This led Bush to propose a huge tax cut, extremely favorable to the wealthy, that led shortly to a monumental deficit. Yes, there were other factors–namely the brief recession of 2001–but the surplus itself was considered by people like Alan Greenspan (and presumably Bush) to be bad in and of itself. (Greenspan feared, for reasons only he knows and can explain, that a continued surplus would eliminate the national debt.) Heavens to Betsy!
On the other hand, it can be argued that the most fiscally responsible President was none other than Bill Clinton, who increased tax rates (almost totally on the upper incomes) in 1993. And while other factors were involved–namely the increased taxes on capital gains during dot-com bubble–this tax increase helped generate at the end of the decade unprecedented surpluses.
What Republican politicians are really interested in is tax cuts and these inevitably create deficits, though (out of power) they may decry deficits. In justifying their votes, it would seem to me that Republican voters need another explanation for their choices than “fiscal responsibility.”
But there is an assumption made by these moderate Republicans that I think is untrue. And that is that the Republican Party is the party of fiscal responsibility. Perhaps, once, when Eisenhower was President a case could be made, although in making it you come up against the problem that he was fiscally “responsible” when he should have been “irresponsible.” That is, during the serious recession of 1957-58, he refused to allow a tax cut to take place (in the name of fiscal responsibility) but it would have been a needed stimulus. The result was a weak recovery which soon thereafter led to another recession in 1960. (Politically, it probably led to the victory of Kennedy over Nixon in the election of that year.)
I suspect a good case can be made that in the last one hundred and ten years–yes,
110, starting in 1900–the most fiscally irresponsible President was the conservative hero, Ronald Reagan. He cut taxes while we were in the midst of double digit inflation, leading the Federal Reserve under Paul Volcker to raise interest rates astronomically–the prime rate briefly rose to 21 1/2 percent (it is now just above
3 %) and mortgage rates for financially stable borrowers were about 17-18 %. As a result of the weak economy tight money produced, which almost automatically leads to less revenue coming into the Federal government, along with the tax cut, the national debt quadrupled under Reagan during his eight years, from approximately $1 trillion to $4 trillion. This takes the cake.
But probably the second most fiscally irresponsible President was George W. Bush, who inherited from the Clinton Administration an enormous and unprecedented fiscal surplus. This led Bush to propose a huge tax cut, extremely favorable to the wealthy, that led shortly to a monumental deficit. Yes, there were other factors–namely the brief recession of 2001–but the surplus itself was considered by people like Alan Greenspan (and presumably Bush) to be bad in and of itself. (Greenspan feared, for reasons only he knows and can explain, that a continued surplus would eliminate the national debt.) Heavens to Betsy!
On the other hand, it can be argued that the most fiscally responsible President was none other than Bill Clinton, who increased tax rates (almost totally on the upper incomes) in 1993. And while other factors were involved–namely the increased taxes on capital gains during dot-com bubble–this tax increase helped generate at the end of the decade unprecedented surpluses.
What Republican politicians are really interested in is tax cuts and these inevitably create deficits, though (out of power) they may decry deficits. In justifying their votes, it would seem to me that Republican voters need another explanation for their choices than “fiscal responsibility.”
The National Debt
[May I suggest Paul Krugman’s blog site, June 3 posting, entitled Rashomon in the OECD (just Google Paul Krugman’s blog).]
At this point, Krugman shows that gross debt as a percentage of GDP at the end of 2009 was about 80 percent. He acknowledges this is high (and we are near the percentages of countries like Portugal and Italy, but also near are countries like the UK and we are all well below Japan’s percentage). But as he points out, interest rates right now on 10 year bonds are 3.59 in the UK; 3.36 % in the US; (and 1.29 % in Japan). These rates are incredibly low and tend to mean that holders of our debt are not worried about being paid off. He ends by offering two conclusions: (a) there will be a Wile E. Coyote moment, when the markets will realize that America is Greece and all hell will break loose. Or (b), the crisis countries are in the eurozone, while the US, UK and Japan are not and that makes all the difference. By saying this, he chooses (b).
These figures show gross debt, so I assume they include the $2 trillion or so owed by the US Government to the Social Security fund. (Sometimes, debt comparisons subtract this amount.)
So are we staring at the end of the world? Historically, one might say no, since just after WW II, our gross debt was higher than our GDP (and today, Japan’s national debt is far higher than its GDP). Ours was reduced to less than 30 % of our GDP by the mid-1970's. This was partially due to the inflation that followed the war–1946-1948–which in effect meant that holders of the debt ended up holding bonds that in real terms were much lower in value. But mostly, the reduction of our debt to GDP over time was due to our economic growth being high enough to shrink the debt/GDP percentage, even though during this period we almost always ran small deficits. What also existed was relatively low interest payments.
Can this happen again? None of the three factors that reduced the debt/GDP percentage are operating or likely to operate. Inflation is not on the horizon and should it even appear, it is likely the Fed would raise rates high enough to stop it (for many reasons it was difficult for the Fed to do this after the war). Second, it is likely, in time, that we will have a deterioration in the value of the dollar and this will mean that interest rates will rise and probably be too high to enable us to reduce the debt/GDP percentage. But it should be noted that the likelihood of a declining dollar is probably a number of years away. But most important, it is unlikely that we will have, in the world we now live in–with China on the rise–the growth rates we had in the decades following the 2nd World War. (On this, see my other posting–Economic Update.)
It is possible, however, that the debt/GDP percentage could level off, not much higher than where it is now. But, But, But. To re-establish our economic vitality, we need to spend on infrastructure, education and the environment. This may or may not be done. If it is done through tax increases then there is no debt problem. If it is not done through tax increases, but is done, the debt problem will be serious. But the third alternative is that it will not be done at all. Then the debt problem might be serious, because what reduced it so after the war–rapid economic growth–will not likely take place.
In the short run, nothing–BUT NOTHING–should be done to reduce the deficit, since doing so will choke off the recovery. On this, read the last year of so of Krugman’s blogs. He thinks raising interest rates today is sheer insanity and I agree.
One final note: those who believe that the government is the source of our problems should reconsider their positions. (Unless you are, like me, critical of the government for not doing more to regulate drilling and regulate derivatives, banking and financial manipulations.) Not only was government always key to our development–from canals to railroads; highways; deposit security; and the off-shoots of war spending, like airplanes and the like–it is all but inconceivable in the complex world we now live in that an economy like ours can thrive without a considerable government input. Libertarianism might sound right, to some, but in practice, it can’t work. Debate over what the mix should be, of private enterprise and government, is desperately needed. But there is no sign of this. Only partisanship and nastiness. All this leaves me fearful and pessimistic, not only of our economic prospects but of our ability to maintain a meaningful democracy.
At this point, Krugman shows that gross debt as a percentage of GDP at the end of 2009 was about 80 percent. He acknowledges this is high (and we are near the percentages of countries like Portugal and Italy, but also near are countries like the UK and we are all well below Japan’s percentage). But as he points out, interest rates right now on 10 year bonds are 3.59 in the UK; 3.36 % in the US; (and 1.29 % in Japan). These rates are incredibly low and tend to mean that holders of our debt are not worried about being paid off. He ends by offering two conclusions: (a) there will be a Wile E. Coyote moment, when the markets will realize that America is Greece and all hell will break loose. Or (b), the crisis countries are in the eurozone, while the US, UK and Japan are not and that makes all the difference. By saying this, he chooses (b).
These figures show gross debt, so I assume they include the $2 trillion or so owed by the US Government to the Social Security fund. (Sometimes, debt comparisons subtract this amount.)
So are we staring at the end of the world? Historically, one might say no, since just after WW II, our gross debt was higher than our GDP (and today, Japan’s national debt is far higher than its GDP). Ours was reduced to less than 30 % of our GDP by the mid-1970's. This was partially due to the inflation that followed the war–1946-1948–which in effect meant that holders of the debt ended up holding bonds that in real terms were much lower in value. But mostly, the reduction of our debt to GDP over time was due to our economic growth being high enough to shrink the debt/GDP percentage, even though during this period we almost always ran small deficits. What also existed was relatively low interest payments.
Can this happen again? None of the three factors that reduced the debt/GDP percentage are operating or likely to operate. Inflation is not on the horizon and should it even appear, it is likely the Fed would raise rates high enough to stop it (for many reasons it was difficult for the Fed to do this after the war). Second, it is likely, in time, that we will have a deterioration in the value of the dollar and this will mean that interest rates will rise and probably be too high to enable us to reduce the debt/GDP percentage. But it should be noted that the likelihood of a declining dollar is probably a number of years away. But most important, it is unlikely that we will have, in the world we now live in–with China on the rise–the growth rates we had in the decades following the 2nd World War. (On this, see my other posting–Economic Update.)
It is possible, however, that the debt/GDP percentage could level off, not much higher than where it is now. But, But, But. To re-establish our economic vitality, we need to spend on infrastructure, education and the environment. This may or may not be done. If it is done through tax increases then there is no debt problem. If it is not done through tax increases, but is done, the debt problem will be serious. But the third alternative is that it will not be done at all. Then the debt problem might be serious, because what reduced it so after the war–rapid economic growth–will not likely take place.
In the short run, nothing–BUT NOTHING–should be done to reduce the deficit, since doing so will choke off the recovery. On this, read the last year of so of Krugman’s blogs. He thinks raising interest rates today is sheer insanity and I agree.
One final note: those who believe that the government is the source of our problems should reconsider their positions. (Unless you are, like me, critical of the government for not doing more to regulate drilling and regulate derivatives, banking and financial manipulations.) Not only was government always key to our development–from canals to railroads; highways; deposit security; and the off-shoots of war spending, like airplanes and the like–it is all but inconceivable in the complex world we now live in that an economy like ours can thrive without a considerable government input. Libertarianism might sound right, to some, but in practice, it can’t work. Debate over what the mix should be, of private enterprise and government, is desperately needed. But there is no sign of this. Only partisanship and nastiness. All this leaves me fearful and pessimistic, not only of our economic prospects but of our ability to maintain a meaningful democracy.
Obama and Afghanistan
At my Amherst reunion, Robert McCartney, a columnist from the Washington Post, delivered a talk entitled, “America in Decline.” He was excellent. If I get a chance in the not-too-distant future, I will try to summarize his arguments and indicate why I think his “no, we are not in decline” is less convincing than his “yes, we are in decline.”
But after the session, I briefly met with him and asked if Obama’s Afghanistan position reflected his real views or whether he has made such a big deal of Afghanistan because he was arguing that we have to take the troops out of Iraq and wanted to avoid being seen as a wimp. McCartney’s immediate response was: the second. But then he qualified it by saying that he is not doing anything other than what he indicated he would do when he campaigned. On that, I agree. But I also think that by indicating during the campaign he was taking our troops out of Iraq–and I think you had to listen carefully, because maybe he said he was taking our “combat” troops out of Iraq, which leaves a lot of troops still there–he probably needed to show his “masculinity,”–i.e., indicate he was not a coward (or wimp) and able to lead America bravely into wars, when needed. (If true, the problem is less Obama’s but our culture.)
But then, which do I consider worse? Is it worse that he feels that we can actually “win” in Afghanistan and even be taking troops out by next year or that he knows it is all pretense, but is doing it anyway because that is what is politically needed. I haven’t made up my mind on this.
McCartney did say that the chickens will come home to roost–my phrasing–next year when the troops will either have to be withdrawn, with nothing accomplished (or very little) or Obama will have to backtrack on his pledge to begin withdrawal. (I suspect there will be a withdrawal, but it will be so insignificant it will hardly be noticed.)
But after the session, I briefly met with him and asked if Obama’s Afghanistan position reflected his real views or whether he has made such a big deal of Afghanistan because he was arguing that we have to take the troops out of Iraq and wanted to avoid being seen as a wimp. McCartney’s immediate response was: the second. But then he qualified it by saying that he is not doing anything other than what he indicated he would do when he campaigned. On that, I agree. But I also think that by indicating during the campaign he was taking our troops out of Iraq–and I think you had to listen carefully, because maybe he said he was taking our “combat” troops out of Iraq, which leaves a lot of troops still there–he probably needed to show his “masculinity,”–i.e., indicate he was not a coward (or wimp) and able to lead America bravely into wars, when needed. (If true, the problem is less Obama’s but our culture.)
But then, which do I consider worse? Is it worse that he feels that we can actually “win” in Afghanistan and even be taking troops out by next year or that he knows it is all pretense, but is doing it anyway because that is what is politically needed. I haven’t made up my mind on this.
McCartney did say that the chickens will come home to roost–my phrasing–next year when the troops will either have to be withdrawn, with nothing accomplished (or very little) or Obama will have to backtrack on his pledge to begin withdrawal. (I suspect there will be a withdrawal, but it will be so insignificant it will hardly be noticed.)
My Doctor's View of Health Legislation
Recently, I had a doctor’s appointment. I told him that one of the panels at my
55th reunion was entitled: “Is America in Decline?” The lecturer, journalist Robert McCartney of the Washington Post, argued that the health bill offered half a loaf, since it totally left out how it was all to be financed. My doctor shut the door and then spent almost ten minutes arguing the following.
He began by talking about oil. He argued that American needs to end its dependency on foreign oil (although the rest of his remarks indicated that he had a wider view, in that we must end our dependency on oil, in general). It’s not whether we should adjust this safety procedure, or that. Or drill here but not there. It’s that we need to completely revamp the way we think and live. He would love it if Obama would say: “Folks, we’re all upset by the oil spill. But what we need is not better drilling, but discontinuation of being an oil-using society. My goal is to finance new technologies so that in 5 years 50 % of our automobiles will be run electrically.”
If you are wondering why he was talking about oil and not medicine, so was I. But then he turned to medicine and essentially argued that here too, we have to stop tinkering. We have to fact up to the fact that minor changes at the margin are not going to do much. He mentioned that every year some Congressional committee, involved with health, has hearings and these are attended by pharmaceuticals, private hospital people, insurers and many others who have a financial stake in what already exists. They don’t want changes. He even mentioned that someone from the pork industry argued what a good buy pork is, especially for high school students.
His point is that it is all well and good to give bypasses–which incidentally I had in 1993 and is undoubtedly why I am still alive–and stents and use all the great medical techniques at our disposal, but what is ultimately needed is a different and healthier way of living. He of course has in mind, among other things, the enormous obesity problem we now have and specifically mentioned that it’s well and good that McDonald’s now offers a salad, but we have to go far beyond where we are now to attain a healthier intake of food. (Recently, at one of the stops on the NY Throughway, I looked at the enormous vending machine offerings, all “delightful,” but not one of which was healthy.)
Implicitly, finding a way to pay for what we get medically is not the right approach. What is, is changing our living patterns so that we need less medical help, thus reducing medical costs. I realize this is ultimately obvious, but often people overlook the obvious–I think Robert McCartney did–and I thought my doctor told me this with great eloquence (which alas I cannot capture).
55th reunion was entitled: “Is America in Decline?” The lecturer, journalist Robert McCartney of the Washington Post, argued that the health bill offered half a loaf, since it totally left out how it was all to be financed. My doctor shut the door and then spent almost ten minutes arguing the following.
He began by talking about oil. He argued that American needs to end its dependency on foreign oil (although the rest of his remarks indicated that he had a wider view, in that we must end our dependency on oil, in general). It’s not whether we should adjust this safety procedure, or that. Or drill here but not there. It’s that we need to completely revamp the way we think and live. He would love it if Obama would say: “Folks, we’re all upset by the oil spill. But what we need is not better drilling, but discontinuation of being an oil-using society. My goal is to finance new technologies so that in 5 years 50 % of our automobiles will be run electrically.”
If you are wondering why he was talking about oil and not medicine, so was I. But then he turned to medicine and essentially argued that here too, we have to stop tinkering. We have to fact up to the fact that minor changes at the margin are not going to do much. He mentioned that every year some Congressional committee, involved with health, has hearings and these are attended by pharmaceuticals, private hospital people, insurers and many others who have a financial stake in what already exists. They don’t want changes. He even mentioned that someone from the pork industry argued what a good buy pork is, especially for high school students.
His point is that it is all well and good to give bypasses–which incidentally I had in 1993 and is undoubtedly why I am still alive–and stents and use all the great medical techniques at our disposal, but what is ultimately needed is a different and healthier way of living. He of course has in mind, among other things, the enormous obesity problem we now have and specifically mentioned that it’s well and good that McDonald’s now offers a salad, but we have to go far beyond where we are now to attain a healthier intake of food. (Recently, at one of the stops on the NY Throughway, I looked at the enormous vending machine offerings, all “delightful,” but not one of which was healthy.)
Implicitly, finding a way to pay for what we get medically is not the right approach. What is, is changing our living patterns so that we need less medical help, thus reducing medical costs. I realize this is ultimately obvious, but often people overlook the obvious–I think Robert McCartney did–and I thought my doctor told me this with great eloquence (which alas I cannot capture).
Health Note
About three months ago, my glucose count rose to 110 (in units I am not clear about, but in my lab report it is listed as mg/dL). This was somewhat higher than the recommended range and higher than what it had been. Recently, it was recorded at
90, which is just fine. High levels of glucose come about, in good part, from excessive intake of sugar. The excessive intake I ingested came about because I had started drinking a lot of fruit juice. This was a mistake. As soon as I learned of the excessive level of my glucose, I stopped drinking fruit juice and my glucose count came down. As my doctor says, eat apples but don’t drink apple juice. And ultimately, less sugar intake will help prevent diabetes. Or in short, as my doctor stressed, eat less sugar and try to avoid white flower.
90, which is just fine. High levels of glucose come about, in good part, from excessive intake of sugar. The excessive intake I ingested came about because I had started drinking a lot of fruit juice. This was a mistake. As soon as I learned of the excessive level of my glucose, I stopped drinking fruit juice and my glucose count came down. As my doctor says, eat apples but don’t drink apple juice. And ultimately, less sugar intake will help prevent diabetes. Or in short, as my doctor stressed, eat less sugar and try to avoid white flower.
Wednesday, April 7, 2010
The Rush to Limbo: The Rise of Reactionary Zealots (2)
This is a shortened (and I think better version) of what appeared here in February. I sent it to the LA Times, which has published many of my pieces, but I haven't received any kind of notice from them whatsoever. Ah, life!
********
The vitriolic assaults on Democrats by Republicans during the health care debate were distressing, not to mention, after the bill passes, bricks being tossed through windows by unknown malcontents, coffins dumped on lawns, and most alarming, Congressional Democrats receiving anonymous murder threats. Republicans and conservatives, in and out of office, have implicitly adapted Nancy Reagan’s slogan, “just say no,” originally directed at drugs, and later at premarital sex, and have applied it to anything emanating from the White House or Democratic policy makers. The nastiness and brutishness of this partisanship is symbolized by the empty tables in the private dining room where members of both parties used to eat. The Congressional Quarterly confirms what our eyes and ears tell us, calling 2009 the most partisan year ever, at least since it began this kind of analysis in 1953.
How are we to understand this rise of right wing fanaticism? I would posit that the roots of modern political ugliness, and extreme partisanship, were touched off by the Civil Rights Act of 1964, signed by Lyndon Johnson, who is purported to have said to an aide, “We have lost the South for a generation,” (which turned out to be an understatement). Before 1965, it was much harder for the solid but conservative Democratic South to attack Democratic liberals in the North, since both were in the same party. At that point, there were also a larger number of Republican liberals and moderates. But, over time, an almost solid Republican South has made it easier for conservatives to be more partisan since now they all sit on the same side of the aisle.
By 1993, every Republican in both houses of Congress voted against President Bill Clinton’s tax increase, designed to reduce the deficit and increase investment by lowering interest rates. It passed the Senate only with Vice-President Al Gore’s tie-breaking vote in the Senate and squeaked by in the House, 218 to 216. But partisanship seems lately to have risen to a new level. We are now in what some might call “The Tea Bagger Era.”
The proximate cause of Tea Bagging seems to be the severe economic decline of the last few years, known by many as the Great Recession, and the fact that an eloquent President has not been able to snap his fingers and restore our prosperity. In their fear and rage, the Tea Baggers (and others like them) yearn, it would seem, not only for prosperity but for the America they once felt at home with, in which blacks (and, for some, women) knew their place and gays were in the closet. To these persons, a black President is symbolic of everything that has gone wrong.
Their seething may also reflect the fact that many Americans cannot face the fact that our country is no longer “beautiful” and unique, but flawed like all others. The Great Recession, however, is a heightened continuation of economic weakness that has plagued America ever since the early 1970's, with exceptional moments of prosperity–the late nineties and the year 2000, for example, in which unemployment briefly dropped below 4 per cent. Real wages–wages adjusted for inflation–are lower now than what they were in 1972.
In addition, income inequality is increasing by leaps and bounds. The distinguished Berkeley Professor, Emmanuel Saez, has calculated that in 1928 the top 1/100th of one percent of American earners took home 5% of total income, a peak that in the earlier post-war years seemed freakishly out of line. That is, from about 1943 to 1978, this group earned “only” 1 % of the total, not the 5% it had garnered just before the Great Depression. But by 2007, the earnings of this group rose to an even higher level, 6 % of the total–an all-time high. Not surprisingly, studies reveal that income inequality is closely correlated with political polarization.
Worse, many are even unable to earn any income at all, or very little. Unemployment, measured by the publicized figure is about 10 %. But this gauge excludes those who have given up looking for jobs and those working part time who would like to work full time. “Real” unemployment is almost twice that of the figure given in the headlines. In essence, we have a nation in which a substantial proportion of our society is living as many lived in the Great Depression of the 1930's. No wonder Tea Parties and other extreme groups are fuming, and growing, with overt or covert racism, and loony but dangerous ideas.
The present crisis reminds one of the movie, Network, which might be said to be a fictionalized version of the Tea Party movement, without its political partisanship. In it the newscaster, Howard Beale, induces untold numbers to go to their windows and shout, “We’re mad as hell, and we’re not going to take this anymore.” (Glenn Beck, the conservative talk-show host, has, on more than one occasion, compared himself to Howard Beale.) The fact that the film appeared in 1976 points to the reasons why Beale’s harangue was so appealing: economic factors, such as the high unemployment associated with the severe downturn of 1974-75 and the high inflation associated with OPEC’s pushing up the price of oil, coupled with the humiliating defeat of America in Vietnam.
Tea Party ferment varies. “It is an amorphous, factionalized uprising with no clear leadership and no centralized structure,” to cite analyst, David Barstow. It includes libertarians who, following Ron Paul, would like to abolish the Federal Reserve; anti-immigration advocates; those who believe people who warn of global warming are frauds in the pockets of elitists; Ayn Randists, John Birchers and Lyndon Larouchers; secessionists; subtle or not so subtle racists such as birthers; militia groups who not only oppose gun controls, but flagrantly display guns at meetings; anti-government types who opposed the stimulus and oppose Social Security and Medicare; and on and on–patriots all, of course. Some Tea Partiers wear T-shirts, on which are written “Proud To Be A Right Wing Extremist.”
Those inclined to allay our fears argue that there have always been fascistic fringes that gain a degree of prominence, and point to McCarthyism or George Wallace, or reaching back to the 1930's, Huey Long and Father Coughlin. These movements, it is argued, flare up but invariably recede and disappear. But there are differences that should be cause for deep concern. Most of these movements had a central figure at the helm, and while there are Tea Party and right wing figures of national prominence–Rush Limbaugh, Sarah Palin, Glenn Beck, Dick Armey, and Rick Perry (governor of Texas)–to name a few, the movement is not solidified around a Savior. It exists independently of any one individual and is thus likely to have greater durability as it is not subject to the mistakes and idiosyncrasies of a leader that often cause a political “Crusade” to unravel.
On the other hand, being leaderless, it may only remain a powerful thorn, unable to take power, but capable of inflicting considerable social pain. This right wing movement, stemming from the failures of the economy (but also fired up by foreign policy failures–from the humiliation in Vietnam to our evident inability to impose our will on the world, by force, and stop terrorism or “insults” by Iran, China and others), can only be reduced significantly if our economy rights itself.
Unfortunately, no saving grace–no prosperity–is on the horizon. To the contrary, many indicators suggest that not only will our recovery continue to be weak, the recent jobs report notwithstanding, but that we may be in the early stages of an endless stagnation, a precedent being the “lost decade” in Japan. Supporting this view is the fact that for years we have been importing far more than we export, with no signs of correction. Our manufacturing, as a percentage of our GDP has dropped to incredibly low levels and there is no evidence that technological prowess in services can take up the slack. What needs to done politically–a 2nd stimulus; infrastructure appropriations; Federal aid to developing greenness; implementation of technological advances that use American workers (not Chinese workers); fundamental repair of pre-college education; and other “salvations”–appear unattainable, as Federal ungovernability gradually grows, just as it already exists in many states.
Republicans in Congress oppose all of the above measures, if not out of ideology, then out of fear. Moderates know they would face far right opponents in the primaries and what happened to Dede Scozzafava in New York’s 23rd Congressional District can happen to them. (A moderate Republican, she was forced to drop out, leading to a Democratic victory in an area East and North of Syracuse that had not elected a Democrat in more than a century). That effort ultimately backfired but it appears that with Tea Party support, the ultra-conservative, Marco Rubio, is significantly ahead of the previously popular Governor of Florida, Charlie Crist, in the Republican Senatorial primary. Crist’s crimes: he appeared on stage with President Obama and he supported his stimulus plan. Horrors!
Democrats might behave similarly, and attempt to oust conservative deviants, if there existed a movement of size capable of doing this. But it is of great political significance that a left wing variant of the Tea Party movement does not exist. That doesn’t mean that a conservative Democrat–say, Arkansas’ Blanche Lincoln–will not be challenged in a primary (she is in fact being forcefully challenged by the liberal, Bill Halter), but mostly such Democratic challenges are isolated and limited and that is so because our culture is conservative and left wing organizations like MoveOn.org were formed to oust Republicans, not shape up Democrats.
If genuine prosperity continues to elude us, the political dangers are obvious. Can we, in such a world, maintain our democracy? How, in such a world, can we contain the Glenn Beck’s and Howard Beale’s, and the Sarah Palin’s and Rush Limbaugh’s, and all who seek to transform our society in unknown but clearly frightening ways?
********
The vitriolic assaults on Democrats by Republicans during the health care debate were distressing, not to mention, after the bill passes, bricks being tossed through windows by unknown malcontents, coffins dumped on lawns, and most alarming, Congressional Democrats receiving anonymous murder threats. Republicans and conservatives, in and out of office, have implicitly adapted Nancy Reagan’s slogan, “just say no,” originally directed at drugs, and later at premarital sex, and have applied it to anything emanating from the White House or Democratic policy makers. The nastiness and brutishness of this partisanship is symbolized by the empty tables in the private dining room where members of both parties used to eat. The Congressional Quarterly confirms what our eyes and ears tell us, calling 2009 the most partisan year ever, at least since it began this kind of analysis in 1953.
How are we to understand this rise of right wing fanaticism? I would posit that the roots of modern political ugliness, and extreme partisanship, were touched off by the Civil Rights Act of 1964, signed by Lyndon Johnson, who is purported to have said to an aide, “We have lost the South for a generation,” (which turned out to be an understatement). Before 1965, it was much harder for the solid but conservative Democratic South to attack Democratic liberals in the North, since both were in the same party. At that point, there were also a larger number of Republican liberals and moderates. But, over time, an almost solid Republican South has made it easier for conservatives to be more partisan since now they all sit on the same side of the aisle.
By 1993, every Republican in both houses of Congress voted against President Bill Clinton’s tax increase, designed to reduce the deficit and increase investment by lowering interest rates. It passed the Senate only with Vice-President Al Gore’s tie-breaking vote in the Senate and squeaked by in the House, 218 to 216. But partisanship seems lately to have risen to a new level. We are now in what some might call “The Tea Bagger Era.”
The proximate cause of Tea Bagging seems to be the severe economic decline of the last few years, known by many as the Great Recession, and the fact that an eloquent President has not been able to snap his fingers and restore our prosperity. In their fear and rage, the Tea Baggers (and others like them) yearn, it would seem, not only for prosperity but for the America they once felt at home with, in which blacks (and, for some, women) knew their place and gays were in the closet. To these persons, a black President is symbolic of everything that has gone wrong.
Their seething may also reflect the fact that many Americans cannot face the fact that our country is no longer “beautiful” and unique, but flawed like all others. The Great Recession, however, is a heightened continuation of economic weakness that has plagued America ever since the early 1970's, with exceptional moments of prosperity–the late nineties and the year 2000, for example, in which unemployment briefly dropped below 4 per cent. Real wages–wages adjusted for inflation–are lower now than what they were in 1972.
In addition, income inequality is increasing by leaps and bounds. The distinguished Berkeley Professor, Emmanuel Saez, has calculated that in 1928 the top 1/100th of one percent of American earners took home 5% of total income, a peak that in the earlier post-war years seemed freakishly out of line. That is, from about 1943 to 1978, this group earned “only” 1 % of the total, not the 5% it had garnered just before the Great Depression. But by 2007, the earnings of this group rose to an even higher level, 6 % of the total–an all-time high. Not surprisingly, studies reveal that income inequality is closely correlated with political polarization.
Worse, many are even unable to earn any income at all, or very little. Unemployment, measured by the publicized figure is about 10 %. But this gauge excludes those who have given up looking for jobs and those working part time who would like to work full time. “Real” unemployment is almost twice that of the figure given in the headlines. In essence, we have a nation in which a substantial proportion of our society is living as many lived in the Great Depression of the 1930's. No wonder Tea Parties and other extreme groups are fuming, and growing, with overt or covert racism, and loony but dangerous ideas.
The present crisis reminds one of the movie, Network, which might be said to be a fictionalized version of the Tea Party movement, without its political partisanship. In it the newscaster, Howard Beale, induces untold numbers to go to their windows and shout, “We’re mad as hell, and we’re not going to take this anymore.” (Glenn Beck, the conservative talk-show host, has, on more than one occasion, compared himself to Howard Beale.) The fact that the film appeared in 1976 points to the reasons why Beale’s harangue was so appealing: economic factors, such as the high unemployment associated with the severe downturn of 1974-75 and the high inflation associated with OPEC’s pushing up the price of oil, coupled with the humiliating defeat of America in Vietnam.
Tea Party ferment varies. “It is an amorphous, factionalized uprising with no clear leadership and no centralized structure,” to cite analyst, David Barstow. It includes libertarians who, following Ron Paul, would like to abolish the Federal Reserve; anti-immigration advocates; those who believe people who warn of global warming are frauds in the pockets of elitists; Ayn Randists, John Birchers and Lyndon Larouchers; secessionists; subtle or not so subtle racists such as birthers; militia groups who not only oppose gun controls, but flagrantly display guns at meetings; anti-government types who opposed the stimulus and oppose Social Security and Medicare; and on and on–patriots all, of course. Some Tea Partiers wear T-shirts, on which are written “Proud To Be A Right Wing Extremist.”
Those inclined to allay our fears argue that there have always been fascistic fringes that gain a degree of prominence, and point to McCarthyism or George Wallace, or reaching back to the 1930's, Huey Long and Father Coughlin. These movements, it is argued, flare up but invariably recede and disappear. But there are differences that should be cause for deep concern. Most of these movements had a central figure at the helm, and while there are Tea Party and right wing figures of national prominence–Rush Limbaugh, Sarah Palin, Glenn Beck, Dick Armey, and Rick Perry (governor of Texas)–to name a few, the movement is not solidified around a Savior. It exists independently of any one individual and is thus likely to have greater durability as it is not subject to the mistakes and idiosyncrasies of a leader that often cause a political “Crusade” to unravel.
On the other hand, being leaderless, it may only remain a powerful thorn, unable to take power, but capable of inflicting considerable social pain. This right wing movement, stemming from the failures of the economy (but also fired up by foreign policy failures–from the humiliation in Vietnam to our evident inability to impose our will on the world, by force, and stop terrorism or “insults” by Iran, China and others), can only be reduced significantly if our economy rights itself.
Unfortunately, no saving grace–no prosperity–is on the horizon. To the contrary, many indicators suggest that not only will our recovery continue to be weak, the recent jobs report notwithstanding, but that we may be in the early stages of an endless stagnation, a precedent being the “lost decade” in Japan. Supporting this view is the fact that for years we have been importing far more than we export, with no signs of correction. Our manufacturing, as a percentage of our GDP has dropped to incredibly low levels and there is no evidence that technological prowess in services can take up the slack. What needs to done politically–a 2nd stimulus; infrastructure appropriations; Federal aid to developing greenness; implementation of technological advances that use American workers (not Chinese workers); fundamental repair of pre-college education; and other “salvations”–appear unattainable, as Federal ungovernability gradually grows, just as it already exists in many states.
Republicans in Congress oppose all of the above measures, if not out of ideology, then out of fear. Moderates know they would face far right opponents in the primaries and what happened to Dede Scozzafava in New York’s 23rd Congressional District can happen to them. (A moderate Republican, she was forced to drop out, leading to a Democratic victory in an area East and North of Syracuse that had not elected a Democrat in more than a century). That effort ultimately backfired but it appears that with Tea Party support, the ultra-conservative, Marco Rubio, is significantly ahead of the previously popular Governor of Florida, Charlie Crist, in the Republican Senatorial primary. Crist’s crimes: he appeared on stage with President Obama and he supported his stimulus plan. Horrors!
Democrats might behave similarly, and attempt to oust conservative deviants, if there existed a movement of size capable of doing this. But it is of great political significance that a left wing variant of the Tea Party movement does not exist. That doesn’t mean that a conservative Democrat–say, Arkansas’ Blanche Lincoln–will not be challenged in a primary (she is in fact being forcefully challenged by the liberal, Bill Halter), but mostly such Democratic challenges are isolated and limited and that is so because our culture is conservative and left wing organizations like MoveOn.org were formed to oust Republicans, not shape up Democrats.
If genuine prosperity continues to elude us, the political dangers are obvious. Can we, in such a world, maintain our democracy? How, in such a world, can we contain the Glenn Beck’s and Howard Beale’s, and the Sarah Palin’s and Rush Limbaugh’s, and all who seek to transform our society in unknown but clearly frightening ways?
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