Sunday, November 01, 2020

New book available! David Kaiser, A Life in History

Mount Greylock Books LLC has published my autobiography as an historian, A Life in History.  Long-time readers who want to find out how the author of this blog became the historian he is will find information about the book in a new blog,  

My talk at the Harvard Coop last May 28 about A Life in History, can be viewed here.  Enjoy! An interesting radio interview with a Denver talk show host about the book can be streamed or downloaded here.

The book can be ordered here.
I look forward to seeing your reactions. For the time being I am pinning this post. Thanks in any case to all of you for your faithful support.

Check below for more recent posts.

Friday, February 14, 2020

The Collapse of American Politics, Part II

The election of 2016, I have often remarked, showed that American politics as we have known them at least since 1960 had collapsed.  A serial bankrupt and reality tv star  had ridden fame and resentment to the White House--and neither major party had come up with a candidate who could beat him.  The situation was obviously particularly critical within the Republican Party, which could not field an effective candidate.  Hillary Clinton did, after all, win the popular vote by 3 million votes, although the Democratic nomination process showed her vulnerabilities as well.  Unfortunately, the biggest lesson of the 2020 primary process so far is that the collapse of our political system continues.   The Democratic Party this year is having the same problem that the Republicans had last time: it has not produced a national political figure who can win the nomination.

Many of the Democrats I know expected something completely different.  They saw AOC and the squad as the wave of the future after 2018 and thought that progressives were taking over the party as a prelude to taking over the country.  I think the early signs tell us clearly that this is not going to happen.  Yes, Bernie Sanders narrowly won the popular vote in both Iowa and New Hampshire, but he got less than half the votes in New Hampshire that he got in 2016, and his fellow progressive Elizabeth Warren is rapidly dropping off the radar. shows him with the best chance of winning the nomination among the candidates, but it also shows a deadlocked convention as more likely.  On the Republican side, a consensus unity candidate might have beaten Trump in 2016, but no such person existed.  That is happening among the Democrats this year as well.  Joe Biden, upon whom the party establishment counted, is flaming out quickly, just as he did in 1988 and 2008.  The relatively centrist candidates from Generation X--Beto O'Rourke, Kamala Harris, and Cory Booker--crashed and burned before a single vote had been cast.  Pete Buttigieg (a Millennial) and Amy Klobuchar (a late-wave Boomer) have drawn some support based on their personalities and their demographic novelty, but neither one has shown much polling strength around the country.  The really interesting question about Buttigieg, it seems to me, is whether his big-tent moderation will prove to be more characteristic of Millennial politicians than Ocasio-Cortez's left wing militance. I suspect that the answer is yes.

The Democratic establishment needs a savior, but they are not turning to any elected Democratic official Instead, they have seized upon Michael Bloomberg, listed this month as the ninth-richest person in the U.S., with a net worth estimated by Forbes at $61.8 billion.  Bloomberg won his two terms as mayor of New York as a Republican.  Like Biden, he was born in 1942 and would turn 80 in the middle of his presidential term.  The billionaire (or, in Trump's case, self-proclaimed billionaire) candidate may become the norm in our politics.  The other Democratic candidate who has been gaining some ground lately is hedge fund manager Tom Steyer, whose net worth is estimated at $1.6 billion.  He has spent ten times more money than the next-highest candidate in both Nevada and South Carolina.  Such men can finance their own big tv ad campaigns, and they seem to have a stature among the public at large that politicians lack.  Our politicians, of both parties, have failed to address very real problems such as immigration, climate change, the impact of globalization, and the cost of health care for decades, and the public, at some level, knows it.  From Bill Clinton to George W. Bush, Barack Obama, and Donald Trump, the less experienced major candidate has won every one of the last seven elections.  That should tell us something about the American public's taste. Meanwhile, Donald Trump has used emergency powers that accumulated during the Cold War era to rewrite our Constitution.  He is building a border wall with Defense Department money that Congress appropriated for entirely different purposes.  This too could be a portent of things to come.

I am afraid that the reputation of politics and politicians may get worse as the year goes on. In 1956, when I was 9, I saw the Democratic convention take two ballots to decide a hot race for the vice-presidential nomination between Estes Kefauver and John F. Kennedy.  It was one of the most exciting things I had ever seen, but I did not know that it would be the last time that a convention had to take more than one ballot on anything for the next 60 years at least.  There is a good chance that it will happen at Milwaukee when the Democrats meet this summer--and if it does, the result will probably be disastrous.  Neither the convention chairman nor the delegations will have any experience with actual balloting, and the spectacle may make the Iowa caucuses look like a model of efficiency.  Donald Trump would benefit in such a case.  All this has profound causes on many fronts, and I hope to discuss them further in months to come.

Friday, February 07, 2020

Romney for Vice President?

I have said many times that we are in the fourth great crisis of our national life, parallel in its own way to the periods 1774-94, 1860-68, and 1929-45.  Because the George W. Bush Administration squandered the feeling of national unity after 9/11 in disastrous, useless wars, and because the Republican party remains determined to undo the domestic order we inherited from the last crisis, this one has been marked by an increasing erosion of our political traditions and a disintegration of our political order.  A serial bankrupt and reality tv star now occupies the White House and rules the Republican Party with an iron hand, and he has survived his impeachment for perverting foreign policy to promote false allegations against a political rival.  We also face tremendous economic and environmental problems, but I am beginning to think that we will not really be able to address them without a major change in our political climate.  We need something dramatic to restore a sense of civic virtue to the nation.  A bipartisan government might do it.

Both Lincoln and FDR used this tactic in our last two great crises.  Three members of his wartime cabinet--Secretary of War Edwin M. Stanton, Secretary of the Navy Gideon Welles, and Postmaster General Montgomery Blair--came from the opposition Democratic Party.  In 1864, facing what looked like a difficult re-election campaign, Lincoln replaced his first Vice President, Hannibal Hamlin of Maine, with Tennessee Demorat Andrew Johnson, the only Senator from the Confederacy to remain in his seat and support the war for the Union after secession.  That selection, of course, turned out disastrously after Lincoln's assassination, when Johnson moved to allow the South to restore white supremacy without slavery, but it did help re-elect Lincoln and make victory possible.  FDR also drew on progressive Republicans from the beginning of his Administration, including Harold Ickes, his Secretary of the Interior and head of the Public Works Administration.  He took another critical move in June 1940, when the fall of France and the threatened defeat of Britain had forced him to make serious preparations for war.

In that  month, Roosevelt replaced his Secretaries of War and of the Navy with two very prominent Republicans.  His fellow New Yorker Henry M. Stimson had already served as Secretary of War under Taft and Secretary of State  under Herbert Hoover, and he was now a key figure in efforts to sanction Japan for its war on China, and an advocate of a peacetime military draft.  Roosevelt's selection of him confirmed his own interest in a sudden, vast increase in the US Army.   Even more interesting was his choice of Chicago newspaper publisher Frank Knox as Secretary of the Navy.  Knox, who had served in both the Spanish-American and First World Wars, had run for Vice President on the Republican ticket in 1936, violently attacking the whole New Deal in general and the new Social Security Act in particular.  Two years later, he had published an anti-New Deal Polemic, We Planned it that Way,  "Without fully recognizing it," he wrote, "Mr. Roosevelt has taken us far along the path of socialism.  This path leads straight into Communism, Nazism, Fascism,  or whatever 'ism' the fancy of the moment dictates it be called."  But Knox also believed in a strong US Navy, and he and Roosevelt had maintained friendly relations.  About 8 months earlier, in the fall of 1939, Roosevelt had offered him the Navy Department, but Knox had declined so as not to anger his fellow Republicans. Now he accepted.  Senior Republicans blasted both men of joining the hated New Deal Administration, but Roosevelt won another smashing election victory in November 1940, and Stimson and Knox remained at their posts through all or most of the war.   Meanwhile, Britain had moved in the same direction.  Winston Churchill took office as Prime Minister in May 1940 partly because Britain obviously needed a truly national government in its time of trial, and the leaders of the Labor and Liberal Parties would not serve with Neville Chamberlain.  Ministers from those parties sat in the Cabinet all the way through the war.

This year's Democratic candidate, whoever it turns out to be, might take a comparable step by selecting Mitt Romney as his vice presidential candidate.  Since his decision to vote to convict President Trump of abusing his powers, Romney has become a symbol--almost our only one--of nonpartisan commitment to our fundamental civic values.  He decided that the fate of the country was more important than his standing with his fellow Republicans--and the Democrats' chances in November depend to some extent on convincing Republican voters of the same thing.  His policy stances in 2012 were those of a mainstream 21st century Republican and there were few if any of them that I agreed with, but he showed a lot of political flexibility as governor of Massachusetts, and he need not have any great influence upon policy in a Democratic administration in any event.  Alas, one aspect of the current situation militates against such a choice. now lists Bernie Sanders as a narrow favorite to win the most delegates (although not necessarily to win a majority before the convention.)  Sanders will turn 79 this year and recently had a heart attack, and many Democrats would oppose the risk of Romney succeeding him should he become the candidate.  Vice President Biden is nearly as old, although his chances have taken a big hit and may well take another next Tuesday in New Hampshire.  The process of selecting a presidential nominee threatens to be long and difficult.  Whoever wins, the party and the nation might benefit from a selection clearly designed to foster greater national unity.

Both sides, in our current political struggle, cherish the fantasy that it can end with a complete victory of the competing ideas of either Republicans or Democrats.  I do not believe that it can.  We need more of a consensus and we may need to build it upon genuine respect for our institutions, rather than specific policy outcomes.  This week, Mitt Romney did his part to contribute to that process.

Friday, January 31, 2020

Keynes and Us

In the last week I finished a remarkable book, Money and Government, by the British historian Robert Skidelsky.  Eight years older than I am, Skidelsky made his reputation writing a three-volume biography of John Maynard Keynes, which appeared between 1983 and 1992.   This exhaustive work--most of which I have not read--paid tribute to the man who provided the theory behind the enormous economic success of the middle third of the twentieth century.  I too had learned to revere him in my youth, and have been almost as astonished to find him become unfashionable in my middle and old age.

Keynes was the hero of by far my most important course as a Harvard freshman in 1965-6, Economics 1.  As I described in my autobiography (see above), the course spent the first term on microeconomics and the second, more important term on macroeconomics.  Microeconomics focused on the theory of competitive markets and the Pareto optimum, which, it was easy to see then, was an ideal type (a concept I learned later) with only very intermittent relation to reality.  Firms large and small were always looking for edges that would make markets less competitive, to prevent the market from driving profit down to the affordable minimum.  Macroeconomics, on the other hand, were in the midst of the climax of the Keynesian era, which had saved both capitalism and civilization.

Classical theory held that national economies naturally reached an equilibrium, and that disturbances came from non-economic factors like famine, war, or unwise government policy.  Classical economists and their allies in national banks and treasury ministries believed that economies would self-correct, provided the banking system maintained stable prices.  For much of the 19th century this seemed like a reasonable approximation of the truth, since all the advanced economies grew quite impressively and prices remained stable, even though serious panics occurred at least every 20 years or so.  Things changed, however, in the wake of the First World War, and especially, of course, during the Great Depression.  Keynes, a Cambridge academic who had also worked in the British Treasury during the war, had too much respect for reality to stick to the old theory in the midst of inflation and depression in the 1920s and 1930s.  He eventually argued in The General Theory of Employment, Interest and Money that national economies could reach a kind of equilibrium that involved high unemployment, without any natural countervailing force operating to reduce it.  He also realized that savings did not necessarily turn into investment, and argued that when private interests failed to invest enough of their wealth to stimulate the economy, the government had to use that money itself--obtained if necessary by borrowing--for investment in public goods that would stimulate the economy effectively.  That was, of course, also the theory, in a very raw form, of FDR's New Deal, although Roosevelt got the nation and the world economy back into serious trouble again in 1937 when he decided to try to balance the budget,  helping to trigger another serious recession.  In Keynes' own Britain, however, no government tried his prescription seriously until the Second World War came.  And indeed, Skidelsky's first book--probably his Ph.d thesis--entitled, Politicians  and the Slump, described how the Labour Government of 1929-31 failed to try to Keynesian remedy when the Depression hit, and split itself and formed a government with the Tories instead.

I used that book to write one of the presentations I gave in my first-year graduate school colloquium in the spring of 1972.  I had been brought up in a New Deal household, I had read Arthur Schlesinger's New Deal histories at a pretty early age, and I had also learned in Economics 1 how well the Keynesian theory had been working the Kennedy and Johnson Administrations.  Indeed, I recall how my section man, David Major, in our very last class, remarked that the economics profession had made remarkable strides in solving macroeconomic problems in recent years, but not in microeconomic ones.  I also remember that he spent about 20 minutes of one class talking about the bizarre ideas of a rogue economist named Milton Friedman, then regarded as an oddball. "I think it's good for you to be exposed to this," he said.

Skidelsky's new book is a survey of large-scale economic thought since th 18th century, focusing on the rise and fall of Keynesianism.  Clearly he, like me, never imagined that the man to whom he devoted several decades of his life, and who had done so much to create the benevolent world that he and I grew up in, could become so unfashionable.  But he has, and Skidelsky explains how.  The pretext for discarding him was the advent of stagflation--a combination of high unemployment and veyr high inflation--that hit the western world, and especially Britain, in the 1970s and 1980s.  Keynesians had not anticipated this and had no remedy for it.  Others, however, eagerly seized upon this to repudiate the whole Keynesian model, because they wanted to restore the economic sovereignty of private enterprise and eliminate the government as a competitor for the use of capital, and accumulator of revenue, and a serious regulator of private enterprise.  Margaret Thatcher, Ronald Reagan, and Paul Volcker of the Fed tossed the Keynesian idea out the window, and in the 1990s Bill Clinton and Tony Blair did not really pick it up again.  The idea of the economy as a benevolent self-regulating mechanism returned to favor, and from about 1990 to 2006,  the combination of steady growth and lower inflation seemed to favor it.

I cannot take the time to summarize Skidelsy's academic arguments. Suffice it to say that the neo-classical model of economics that once again dominates the profession relies on an absurd view of human nature, as he realizes.  Economic men and woman ruthlessly maximize their well-being, always buying at the lowest available price, investing eagerly at equilibrium interest rates, and willingly working for the prevailing wage.  Unemployment, this view holds, occurs when prevailing wages are too high, period.  Markets, such as the housing market (!!) regulate themselves far better than any government bureaucrat could.  Economics, I think, attracts a lot of scholars attracted to the beauty of mathematical theory--but not to the study of actual reality.  Such is the hegemony of a certain set of ideas, however, that one can spot only a few dissenters such as my old friend Jamie Galbraith here and there on the horizon, and they do not exert significant influence in either Republican or Democratic administrations, or Labour or Tory governments in Britain.

The great financial crash of 2008 grew out of the absurd new faith in unregulated markets, which, combined with cheap money, had allowed the big banks to create an enormous subprime mortgage bubble, one that would have destroyed the world economy when it burst without the massive intervention of the government.  This time however Ben Bernanke and Tim Geithner showed no interest in Keynesian intervention as the primary solution (although the Obama stimulus was a significant Keynesian move.)  Indeed, Bernanke in particular wanted to show that Hoover and FDR had chosen the wrong remedy by spending more government money instead of just restoring liquidity in the banking system--a term which meant, in practice, buying up all the worthless trillions of assets on the balance sheets of the banking system with money created by the federal reserve.  That, and the stimulus, did lead to a fairly successful recovery in the US, although inequality continued to increase.  But it has not done so in Europe, where economies have grown very slowly now for well over a decade, while central bankers, just like their counterparts in the 1920s and 1930s, continue to insist on austerity.  And as a result, the established parties in nearly every European country are losing ground, particularly to right-wing populists.

Skidelsky's last chapters are chilling.  He was trained as an historian, not an economist, and he knew at an early age that bad, traditional economic policy had done a lot to destroy democracy in parts of Europe--most notably in Germany--in the 1920s and early 1930s.  Now, he argues, the insistence on neoclassical economic principles and on depriving national governments of a major economic role has crippled politics in much of the West.  Private interests and national banks, not elected officials, are the most important actors in our economic system, which they have organized for their own benefit.  The financial community in particular has taken advantage of deregulation to find many new ways to create, and hoard, enormous sums of money that benefit no one but themselves.   The most advanced western nations face critical shortages of many public goods such as infrastructure.  Millions of voters in the west now understand this and are repudiating the established politicians who have gone along with it.  Free trade and globalization are two other shibboleths of modern economic thought, and Skidelsky feels they need to be held back as well because of their disastrous economic impact in older industrial areas and their political consequences.  Many nations in past eras such as the late 19th century, he points out, prospered under protectionist regimes.  We need, he argues, new policies, and new economic thinking to go with them.  He does refer at one point to Thomas Piketty's 2014 work Capital in the Twenty-First Century and to its principle finding--borrowed, actually, from Karl Marx--that capital naturally grows more quickly under capitalism than the economy.  This still seems to me to be the biggest single reason that a Keynesian approach involving high taxes (including taxes on capital) and high spending on public goods is necessary to get us off the path that we are on now.

I completely agree with Skidelsky that the hegemony of the idea of self-regulating economies has crippled political power in the West.  The problem continually gets worse, of course, because our unregulated economies channel more and more of our wealth into a very few hands, increasing both their political and economic influence.  Our generations--Skidelsky's and mine--are victims of our parents' success.  They had to focus on public goods, broadly defined, to defeat the Depression, win the Second World War, and set up the western alliance for the Cold War.  Now that those threats have faded, the government seems to lack a compelling reason to mobilize private resources.  Worst of all, deeply flawed classical theories of economics remain hegemonic because they benefit the wealthy--whose largesse universities now need more than ever.  Like me, Skidelsky has remained faithful to what he learned in his youth--but he is now 80, and few replacements seem to be emerging either from our politics or from academia, and his remarkable book has gotten very little attention.  I learned about it from a very favorable review in The New York Review of Books, but even that review, I know think, didn't do justice to its scope.  It was panned, not surprisingly, in the Wall Street Journal, and it has not been reviewed at all in the daily or Sunday New York Times or in the Washington Post. 

Friday, January 24, 2020

Endless War and Political Collapse

18 years after 9/11, American foreign policy in the Middle East lies in tatters.  In Afghanistan, the US government is searching for a way to end its military involvement that will not result in the immediate victory of the Taliban, which we invaded the country in 2001 to overthrow.  Iraq, which the Bush Administration saw as the keystone of a new Middle East, remains wracked by civil war, and its government, for the second time, is trying to force the withdrawal of American forces from its territory.  President Trump, we have just learned, is about to issue a Middle East peace plan that will give the Israelis more concessions than they have ever dared to ask for in public.  The Arab spring overthrew the authoritarian government of Egypt with US encouragement, only to see a democratic experiment end in a military coup just a few years later.  The US decision to help bring down the Libyan government created chaos in yet another state, and triggered a destabilizing flood of refugees into Europe.  A similar attempt in Syria has failed completely.  Russian influence in the region has substantially increased, the US abandoned its Kurdish allies on the Turkish-Syrian border, and the Trump Administration foolishly abandoned the nuclear agreement with Iran, a significant step towards peaceful coexistence in the region.  Now Iran and the US stand on the brink of armed conflict.

Yet for all that, the foreign policy consequences of the Bush Administration’s decision to reshape the Middle East—which the Obama Administration in many ways adopted for itself—are no more significant, I think, than its domestic consequences.  The election of 2016 marked the collapse the American political system.  Neither major party could field a candidate who could defeat an oft-bankrupted businessman and reality television star who obviously lacked both the intellectual and temperamental qualifications to be President.  At least 50% of the voting-age population had evidently lost all confidence in our governing elite.  One reason, undoubtedly, was the complete failure of the US government’s major enterprise in the new century, our attempt to subdue or influence large areas of the Middle East.

About 25 years ago, William Strauss and Neil Howe, two amateur historians, discovered an 80-year rhythm in American history in two books, Generations(1991) and The Fourth Turning(1997).  The great crisis of 1774-1794 had thrown off British rule, written the Articles of Confederation and the Constitution, and given the nation a new government.  About 80 years later, in 1860-65, the Civil War had restored the union, ended slavery, and changed the relationship between the federal government and the states forever.  80 years after that, Franklin Roosevelt once again transformed the government’s role both at home and abroad during the Depression and the Second World War.  Each of these crises had created a new order and established a new ideological and social consensus.  That consensus, in each case, had begun to erode 20-40 years after the crisis, and the erosion accelerated when the generation that had lived through it as young adults aged, lost power, and died off.   One of the many things I learned from their books is that no government wins the support of its people simply because of the design of its institutions: it must win their trust by accomplishing great things and mobilizing resources for common aims.  That is what Washington, Hamilton and Jefferson had done in the first crisis, Lincoln and Grant in the second, and Roosevelt and Marshall and many others in the third.  But this was not all. Doing the math back in the 1990s, Strauss (who died in 2007) and Howe observed the decline of the post-1945 order that went along with the aging of the GI (or “greatest”) generation, and predicted a new great crisis that would once again reshape the United States during the first 15 years of the 21st century.  That prediction has now come true, but with disastrous consequences they did not predict.  This time our luck ran out and our leaders embarked upon a hopeless crusade.

2001 was only 72 years after the stock market crash had kicked off the last great crisis, but the new Administration of George W. Bush had big plans in both foreign and domestic policy which it eagerly moved to implement after 9/11.  Specifically, they wanted to take down hostile dictatorships in at least three countries—Iraq, Iran, and North Korea—under a new doctrine that asserted the right to move unilaterally against any regime that sought weapons that the United States did not think it should have.  That was, among other things, a risky strategy domestically.   During the preceding 60 years American military power had first defeated Nazi Germany and imperial Japan, and then held the line, on many fronts, in the Cold War.  The tragic decision to deploy hundreds of thousands of Americans in Southeast Asia—which failed to achieve its objective—had dealt the first huge blow to the postwar consensus.  The foreign policy elite, as Andrew Bacevich showed in Washington Rules, had not abandoned its belief in the utility of American force around the world, but our political and military leadership had stayed out of any major conflict during the rest of the 1970s and 1980s, allowing them to maintain their prestige.  George. H. W. Bush had fought a limited war against Iraq in 1991, but he had done so only as the leader of a very broad coalition, and with the limited objective of restoring the independence of Kuwait.  After 9/11, however, the new Bush Administration cast caution to the winds, defining a new generational task of spreading democracy through the Muslim world, largely by eliminating hostile regimes.  To do so, they took advantage of an outburst of national feeling after 9/11, which, like Fort Sumer and Pearl Harbor, created a bipartisan consensus behind new wars.  At the same time, they embarked upon a crusade for energy independence, one that drew little notice at the time, but which has now succeeded—in its own terms, at least—with other huge economic, environmental and political consequences. And the decision to combine new wars with tax cuts instead of tax increases turned a budget surplus into a huge permanent deficit that has made it much harder for the government to deal with domestic problems.

Karl Rove and George W. Bush clearly hoped to create a new Republican majority based in part on successes overseas.  This they failed to do when the war in Iraq went badly, and other failures at home, culminating in the financial crisis, reduced the Republican Party to minority status once again from 2006 to 2010.  Barack Obama could probably have reversed key Bush policies both at home and abroad, but for the most part, he declined to do so.  He did eventually withdraw our troops from Iraq, but he increased them in Afghanistan.  As we have seen, he too adopted regime change as a Middle East policy in Egypt, Libya, and Syria, with similarly disastrous results.  He had to put US troops back into Iraq to cope with ISIS.  He continued the spread of the “war on terror” into more continents, and it has now become business as usual in the US military establishment.  In 2016 the Democratic Party fielded former Secretary of State Hillary Clinton, a frequent supporter of military action abroad and the architect of the Libyan disaster. 

Tens of millions of American voters have lost confidence in our political leadership for domestic reasons as well.  Both parties embraced and pushed globalization without regard to its impact on many American communities.  Both deregulated the economy in ways that have allowed inequality to increase.  Both are more responsive to special interests of one kind or another than to the needs of average Americans.  Yet the decision of both parties to pursue endless, worse than useless wars in distant lands has surely contributed a great deal to the fraying of their relationships with the electorate.  These wars have turned out to be a political luxury that the nation could not afford.