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Another New Book Available: States of the Union, The History of the United States through Presidential Addresses, 1789-2023

Mount Greylock Books LLC has published States of the Union: The History of the United States through Presidential Addresses, 1789-2023.   St...

Friday, October 28, 2022

The Democratic Failure

This morning fivethirtyeight.com shows the Republicans with an 81 percent chance of winning control of the House of Representatives and a very nearly 50-50 chance of controlling the Senate. They might actually outpoll the Democrats in the national popular vote for the House.   Even if they win only the House and not the Senate, Donald Trump will immediately become the favorite for the 2024 presidential election, and gridlock, shutdowns, and investigations of Hunter Biden and various Democratic officials will dominate the next two years. The January 6 investigation will shut down at once. I regret to say that the Democratic Party will bear a lot of responsibility for these results.

They are not, to be sure, solely to blame.  A lot of people like to claim nowadays that racism lies at the root of Republican success, but I do not agree.  Looking at the last 40 years, it seems to me that Ronald Reagan's insistence that government was the problem, not the solution, has remained part of the fabric of American politics.  We have seen this political movie before, twice.  Bill Clinton was elected in 1992 with a Democratic Congress.  He had only one major legislative accomplishment in his first term, his economic plan, whose tax increases allowed him to begin balancing budgets six years later.  It passed by a single vote in both the House and the Senate, and it led to a devastating defeat in his first midterm election, in which he lost both Houses of Congress.  Barack Obama was elected by a far more decisive margin in 2008 and brought veto-proof majorities in Congress along with him.  He too passed just one important piece of legislation, the Affordable Care Act, without a single Republican vote, and he too suffered a devastating loss in the midterms, in which the Republicans won the House of Representatives.  Four years later they added the Senate, and Obama had no more legislative accomplishments to boast of for the rest of his term.  Joe Biden got some bipartisan support for a big COVID relief passage, and also for an infrastructure plan, but none for the Build Back Better Act, which some Democratic lunatic--I'd like to know who--disastrously renamed the Inflation Reduction Act.  (It had nothing to do with inflation and hasn't reduced it.)   Now his house majority appears to be doomed, and with it any hope of future legislative progress.  The swing voters in the American electorate appear to react instinctively against any attempt to mobilize economic resources to solve national problems. 

Yet the Democrats have their own problems as well.  After 2008, strategists like James Carville argued that they had created a new long-term majority of women, black voters, and Hispanic voters--an argument, in effect, that they could rely entirely on identity politics.  That view tallied with the feelings of many party activists, who learned postmodern theory in college and had come to believe that greater representation for those groups was in itself a critical political goal.  In the long run, however, it has been a political disadvantage in my opinion, because it encourages--and in some cases even requires--Democrats to select candidates from those groups, who may appeal to parts of the Democratic base but whose demographic characteristics will not help them among swing voters.  In addition, Hispanic voters in particular have remained far more diverse politically that Carville assumed, and increasing numbers have apparently decided that cultural and economic issues--such as inflation--matter a lot more than solidarity among nonwhites.  They are significantly trending Republican.   

And this Democratic disease, in a different but related form, may well cost them control of the Senate--which will make it impossible to put any Democrats on the federal bench for two years. John Fetterman, Pennsylvania's lieutenant governor, suffered a fairly serous stroke just before he defeated Representative Conor Lamb in this year's Senate Democratic primary contest.  It turns out that he had had some heart-related problems for years.  I have nothing against Fetterman personally, but party leaders should have made clear to him that the party simply could not take the risk of fielding a candidate with serious health issues in this critical election and forced him to step down in favor of Lamb.  Ill or disabled people, however, are among the "marginalized groups" that Democrats are now taught to favor, and they did not.  Fetterman in his one debate with Mehmet Oz this week showed very clearly that he has not recovered his ability to understand quickly and communicate clearly.  These are skills that ordinary voters very reasonably expect their elected officials to have.  Yesterday a new poll showed Oz leading Fetterman 48-45. 

Educated Democrats tend to believe that voters today owe their votes to Democrats because the Republican Party has become an irresponsible personality cult.  Voters however are clinging to the eternal American right to vote against the party in power when they are unhappy.  That is the dynamic, as I tried to show a few weeks ago, that has dominated American politics since 1992.  And if they do lose Congress, the Democrats will have to overcome another structural failure of theirs--their reliance on vice presidents and family members as presidential candidates.  They are already suffering from this right now.  No one ever took Joe Biden seriously as presidential timber for his 36 years in the Senate, and his two attempts to win the Democratic nomination went nowhere.  When Barack Obama chose him as running mate, however, he got the name recognition and access to key donors that candidates depend on.  He yielded the field in 2016 to another candidate who had become a national figure thanks to her marriage, but returned to win the nomination in 2020 with the help of the party establishment.  Then he attempted (on frankly identity politics grounds) to bring Kamala Harris into the charmed circle, even though her presidential campaign had not made it to the first primary vote. Neither Biden nor Harris, in my opinion, will be a strong candidate against Trump or Ron DeSantis in the next presidential election.  I can't see now who the alternative will be either.

Another disastrous aspect of the new American politics is also on display.   The Watergate investigation dealt with terrible political and legal abuses and justly secured Nixon's resignation, but it became a terrible precedent.  Investigations have replaced policy initiatives as political weapons ever since.  The Democrats tried and failed to use Iran-Contra to bring down Reagan and Bush. The Republicans used Whitewater--a non-issue--and Bill Clinton's sex life to try to bring him down, but impeachment failed.  They revived this tactic against Hillary Clinton in the run-up to the 2016 election and it may have worked then.  Now the Democrats seem to be relying on various investigations, rather than policy victories, to remove the threat of Donald Trump from our politics.  The Deep State is in fact their main weapon in this battle, as it was when Trump was first elected.  It's another symptom of the failure of our democracy.

Sunday, October 23, 2022

Versions of War

 I needed a day off yesterday, and I went to see the one performance of the new German film version of All Quiet on the Western Front at one of our three surviving local arthouses.  It was 2:00 PM and there were about eight patrons in the audience.  I still have the paperback of the original book that I bought in college for $.50 [sic] on my shelf, and I remembered much of it vividly.  I have of course seen the earlier film version but I remember it less well.  This film recreates the combat of the First World War with reasonable accuracy, but it failed completely, in my opinion, to capture the spirit of the book or the generation to which the author Erich Maria Remarque, himself a veteran, belonged. Warning: I can't write this analysis without a lot of spoilers about both the book and movie. 

The Paul Baumer who narrates the book joined, apparently, right of high school, but he seems to have joined quite early in the four-year war, when enthusiasm had swept Germany and grown with big early successes on both the western and eastern fronts. By the time the book begins in 1917 or 1918 he is a seasoned veteran who speaks with the authority of having seen everything, including the deaths of many of his friends.  He and his fellow soldiers have become masters of their craft, knowing how to find cover behind a one-foot rise in the ground, to distinguish various different types of shells and to use all their weapons with maximum effectiveness.  Their superiors alternate their time in the trenches with more relaxing weeks in the rear area, when they eat, drink, smoke, and one one occasion, arrange an assignation with some French girls--an incident left entirely out of the movie.  The movie delays Baumer's enlistment until the last year of the war, and he never seems to lose his innocence, which in the book did not even survive rigorous boot camp.  He has the frightened, traumatized look that the Baumer of the book identifies in new, undertrained recruits, most of whom fall in battle almost at once. 

The film's writer and director Edward Berger, it turns out, is 52, but I think the change in tone from the book reflects the sensibilities of today's younger generation both in Germany and elsewhere. Very few of them have known war first hand and they probably know little military history.  They cannot imagine battle as anything but a traumatizing catastrophe.  Don't get me wrong--battle is a traumatizing catastrophe, but soldiers only get through war by finding ways to cope--led by black humor and camaraderie.  

The film also attempts to incorporate high-level history, but winds up using it to cheapen the basic plot.  It includes scenes of the armistice talks between a civilian-led German delegation and allied Supreme Commander Marshal Foch, and a right-wing German general who appears to be based on Erich Ludendorff, even though he is a battlefield commander whereas Ludendorff had effectively ruled at German Army headquarters and had in fact been dismissed by the Emperor more than two weeks before the end of the war.  This anonymous general becomes the cause of hero Paul Baumer's death.  In the book, Baumer dies randomly and anonymously like so many of his fellows, with a few weeks left in the war.  Berger insists on making him literally the last casualty of the conflict, killed at the exact moment the armistice took effect because the aforementioned general insisted on a last-minute attack to salvage German honor.  I have been reading about this war for more than half a century and I have never heard of such a German attack.   In a further historical inaccuracy, the film's closing credits inform us that from the time the western front first stabilized in 1914, it hardly moved at all.  That was largely though not entirely true until March 1918, but from then until November--roughly the period covered by the movie--the opposite was true.  First, Ludendorff's last great offensive brought the Germans nearly in sight of Paris again by July.  Then, beginning in early August, an allied counteroffensive made dramatic gains as the German Army began to collapse, leading to the armistice negotiations that began in late September. 

It was my own generation--including most, though not all, of my own generation of historians--that decided, in effect, that the past need not be taken seriously, since it was simply a record of the evil follies of the ruling class.  It had been taken very seriously in western civilization since the French and American Revolutions because most (including even many Marxists) saw it as a story of human progress.  Such a view gave historians the incentive to get it right.  Now, as James Sweet wrote some weeks ago as president of the AHA before pressure forced him to recant, history has become the slave of present-day sensibility and present-day politics.  Bad politics breed bad history.                                 

Sunday, October 16, 2022

How the Federal Reserve has Changed America

 Matt Taibbi recently interviewed journalist Christopher Leonard about his new book, The Lords of Easy Money, which tells the story of the Federal Reserve Bank's response to the Great Recession and its consequences. I decided to read it.  I am glad that I did.

Let me make one thing clear to potential readers at the outset: while the book tells a very important story makes very convincing arguments about its significance, its execution is a bit erratic. Leonard has to talk about a lot of complex financial instruments and transactions, and I often felt that he failed to explain them adequately to laymen, or even to convince me that he completely understood them himself. "Leveraged loans," which have become very important in corporate America, were an excellent example of this.  Yet he often makes up for this by emphasizing a few basic facts and figures, and his account of the impact of Fed policy in the last fifteen years and earlier opened my eyes to various key developments of which I was not aware.  I finished the book quite convinced that the foundations of our economy are now very unsound, that some kind of new collapse is almost inevitable, and that our economic powers that be remain in denial about these issues.

Most newspaper readers understand that when the big banks and our whole financial system nearly collapsed because of the subprime crisis of 2007-8, the Fed, led by Ben Bernake, embarked on a program called "quantitative easing."  Essentially, it created more than $1 trillion within a few months to purchase worthless assets from the big banks to save them from collapse. Leonard gives the impression that the Fed has the legal power to create as much new wealth as it wants, any time that it wants.  If that is true--and it seems to be--I couldn't help wondering when it became true.  I had the impression that when the Fed was founded in 1914 or so it was capitalized by existing financial institutions and that the size of its capital put some limit on its ability to make transactions.  If that was true, then the law must have changed at some point, and I am very curious as to when it was. There is, however, no dispute about the magnitude of what the Fed did beginning in the last quarter of 2008 when the crisis became dire. The Fed's balance sheet $910 billion at that moment increased to $2.1 trillion in one month.  It held fairly steady for about two years, but at that point, with unemployment still peaking, it began to increase fairly steadily and went from $2.31 trillion in November 2010 to $4.5 trillion in 2015, where it remained for about three more years. Meanwhile, the Fed's open-market operations kept interest rates at or near zero, in an attempt to force financial institutions to lend money to stimulate enterprise, instead of keeping it in treasury obligations that would not turn any profit.  It is here that I want to leave Leonard's argument behind for a minute and reflect on these developments from my own perspective.

In 1933, faced with an even more serious financial collapse and 25 percent unemployment, the New Deal had consciously attempted to increase the purchasing power of farmers and workers to get the economy moving again and stop the decline of GDP.  While those policies didn't cure the Depression until we began mobilizng for the Second World War, they did help, and they did increase economic equality within the United States.  This time, however, Bernanke, Tim Geithner, Larry Summers and the rest of the policy makers decided to increase the purchasing power and the lending power of our richest class.  Leonard does not make this analogy, but it occurred to me that quantitative easing was a new form of supply-side economics.  The Reagan tax cuts--the application of supply-side economics--were supposed to unleash a torrent of productive investment and set up a new round of dramatic economic growth.  Instead, they began increasing the wealth gap, and although the country slowly came out of the 1980-82 recession, the average American stopped making any serious economic gains.  In subsequent years much of corporate wealth and corporate borrowing went into new factories overseas, while high-paying jobs in the US became scarcer.  

Quantitative easing, Leonard shows, had a similar effect.  The loans it and zero-interest encouraged lenders to make did not create new factories or new infrastructure.  They simply increased the price of assets like stocks which rich people can buy.  That is why, as many have noticed, the movements of the stock market have become quite disconnected from the state of the economy, so that the Dow and other industries reached new highs during the recession that the pandemic triggered. I would go further and blame the same trends for the explosion of the housing market in major metropolitan areas, where those connected to the financial community and a few other growing sectors like health care have bid up the price of single-family homes until they are out of the reach of young couples.  

I strongly suspect that there is another dimension to all this as well, involving the ethos of our financial sector.  That sector, which the New Deal reforms like Glass-Steagall and the SEC put under significant control, regained much more freedom under the deregulation of the 1990s, which Bill Clinton, I had discovered, allowed without ever discussing it at any length with the American people.  These reforms and fed easy money policies allowed financial interests to accustom themselves to dramatic and continuing increases in their income.  That, I believe, is what led them into disastrous financial experiments such as the new derivatives market and subprime mortgages--bubbles that were bound to burst.  Quantitative easing ensured that they would not pay the price of having the bubbles burst, and encouraged them to create new ones, and that is what they have been doing ever since.  And over the last 30 years at least, Wall Street has become the leading destination of our brightest young men and women, trained in our elite educational institutions.  There they become committed to the new model and devote their tremendous ambition, energy, and intelligence to maintaining it and the wealth that it gives them. 

Leonard's book relies very heavily on interviews with Thomas Koenig, the one-time chief of the Federal Reserve Bank of Kansas City and a long-time member of the Fed's policy-making board.  Koenig, who was born in 1946 and thus grew up (as I did) in a very different time, opposed quantitative easing from the beginning because he thought it would create bubbles and, crucially, because he thought that it would be very hard to reverse when the economy became overheated or when financial interests became over-extended again.  Events have proven him right. Jerome Powell replaced Bernanke as Fed Chairman in 2018.  He too had been somewhat doubtful about  quantitative easing, and he initially decided that the time had come to raise interest rates, sell assets, and reduce the Fed's balance sheet.  It fell from $4.41 trillion in February 2018 to $3.82 trillion in July 2019.  That, however, as Leonard shows in detail, triggered a serious crisis in short-term money markets comparable to what had happened in 2008 and brought down Lehman Brothers. This time Powell reversed course, stepped in, and refunded the short-term money market that many hedge funds depended on on a massive scale.  The Fed's balance sheet was already rising again when the pandemic struck in the early spring of 2020.  It roes from $3.78 trillion in August 2019 to $7.17 trillion in June 2020--and it has continued to rise up to $8.96 trillion in late April of this year.  

Until the last two years, the Fed took comfort from low rates of inflation.  Now, a combination of factors including supply chain problems, the Ukraine war and its impact on energy prices, labor shortages in the US, and the huge deficits the federal government ran during the pandemic has returned inflation almost to the levels of the late 1970s, and Powell is rapidly raising interest rates to try to halt it.  Orthodox economic authorities seem to agree that we need a new round of unemployment to control inflation.  German authorities made a similar calculation in 1930-2, cutting government spending in the midst of a depression--and the result was the electoral advance of Nazis and Communists and the end of the Weimar Republic.  The United States stands at a similarly perilous political moment and our establishment really can't afford to alienate the working class, but they don't seem to understand this.

The rise in interest rates has already reversed the steady increase of the stock market.  If Leonard's argument is correct, it seems almost certain to trigger some kind of new financial crisis as well, since our whole system has come to depend on easy money.  That might lead the Fed to reverse course again as it did in 2019.  Thomas Koenig was right: it has become impossible not only to undo quantitative easing (now known under new names) but also to even halt it.  The Obama Administration in 2009 missed its chance to revive New Deal principles, and the bill for that decision may now be coming due.

Occasionally a lifelong newspaper reader like myself reads or hears a news item that is so unsettling that he immediately goes into denial.  One such moment occurred in the winter of 2008-9 when I read that Barack Obama had appointed Larry Summers as his chief economic adviser.  A second occurred a few days ago when I was nearing the end of Leonard's book, and read that Ben Bernanke had been awarded a share of the Nobel Prize.  When disastrous policies receive the highest imprimatur that our civilization offers, we are in real trouble.

Friday, October 07, 2022

A Scandal from the Past

I recently completed the chapter of my new book dealing with Ronald Reagan and George Bush I, and I had to revisit the Iran-Contra affair. Earlier this year, as I mentioned, I had revisited Watergate writing a talk for a conference.  I was sufficiently intrigued to get Firewall, Special Prosecutor Lawrence Walsh's account of his investigation of Iran-Contra, out of the library, and once I opened it I could hardly put it down.  It's an interesting story of the continuing struggle by the post-1945 executive branch to escape any accountability for anything it does in the national security realm.  The Nixon administration lost that battle, but the Reagan administration eventually won it,   No subsequent administration has had any serious problems doing what it wanted to do.

Many younger readers will know little about Iran-Contra, and older ones may need their memories to be refreshed.  The United States had broken diplomatic relations with Iran after an Islamic regime took power there in 1979 and took and held US Embassy personnel hostage for over a year.  Iran had subsequently become involved in a war with Iraq, and pro-Iranian groups had taken several American hostages in Lebanon, then in the midst of civil war.  At the same time, in the early 1980s, the Reagan Administration CIA had set up a covert war against  the Sandinista regime in Nicaragua, which Reagan defined as an expansionist Communist enemy of the United States.  In 1985, after protracted controversy, the Congress passed what was known as the Boland Amendment, banning any US support of the Contras and prohibiting all intelligence agencies from assisting the Contras.

The Reagan Administration had immediately begun raising money from domestic and foreign sources, including foreign sources such as the Saudi government, for the Contras.  This was overseen by National Security Adviser Robert McFarlane and his replacement John Poindexter while Marine Lt. Colonel Oliver North did most of the actual work.  North enlisted a retired Air Force General, Richard Secord, to help acquire arms for the Contras, and CIA personnel continued to work with him in violation of the law.  Not until November 1986 did any of this surface, after an airplane carrying a CIA agent was shot down by the Sandinistas (the agent survived.)

Meanwhile, in late 1985, the Israeli government--which wanted to re-establish a relationship with Iran, a long-time covert ally--suggested that Iran might secure the release of the American hostages in Lebanon if Israel could ship some Hawk missiles to Iran on behalf of the United States, which would then replace the missiles.  Ronald Reagan, desperate to secure the release of the hostages, approved the deal at McFarlane's request in the presence of Secretary of State George Schultz.  Other shipments followed.  Reagan retroactively authorized the first shipment, which was contrary to the Export Control Act, with an official finding authorizing it as a covert operation, but no one informed key Congressmen and Senators as the law required.  As shipments continued--even though the Iranians only released a couple of hostages, and seized a couple more as well--North and Secord began overcharging the Iranians, depositing the money in secret Swiss bank accounts, and using that money to buy supplies and fund operations for the Contras.  Some of the money was reserved for North and Secord's personal use.

Lebanese sources broke the story of the arms for hostages deal in early November 1986, and Reagan promptly denied that he had violated his pledge not to negotiate with terrorists or traded arms for hostages.  He asked his long-time aide and Attorney General Ed Meese to investigate what had happened for him.  Meese's real task, it becomes clear from Walsh's book, was to design the administration's cover story and get everyone on board for it.  While he was doing that, North and his secretary were shredding numerous documents detailing his activities.  Meese decided to endorse Reagan's false claim that he had not approved the first shipment--which was clearly illegal--to save the President from a possible impeachment.  Meanwhile, he discovered how North, with Poindexter's approval, had been using the proceeds of the arms sales to help the Contras. To deal with that equally serious problem, he and chief of staff Donald Reagan decided the North and Poindexter would have to be fired on the spot, making them the scapegoats for the diversion of funds, which had never been formally authorized.  Reagan had to appoint his own investigating commission led by Senator John Tower, and Congressional committees began investigating as well.  After the revelation of the diversion he gave in to pressure to appoint Walsh, a former judge and prosecutor and a Republican, as special counsel with broad investigative powers to identify and prosecute any crimes that had been committed.

What followed was a long, multi-front struggle by the administration of protect itself and to try to make sure that no loyal administration officials were convicted and sent to jail.  The cases against North and Poindexter were complicated by the joint Congressional investigating committee's decision to grant them both immunity to get them to testify and give the committee the headlines that it wanted. That meant that Walsh, at their trials, would have to be able to show that all the evidence against them had been collected without any reference to their testimony, which he and the other lawyers on the case could not even watch.  More seriously, the administration and North's and Poindexter's lawyers--who may have been working together to some extent--found a way to get the presiding judge to throw out Walsh's most serious constitutional charge against them, that of a conspiracy to violate both the Export Control Act and the Boland Amendment--a conspiracy that might easily have included Reagan, Schultz, and Defense Secretary Caspar Weinberger, all of whom were involved in the arms sales if not the diversion, as well. As part of their defense, North and Poindexter subpoenaed reams of classified documents from the CIA and other agencies.  When the agencies refused to release them, Walsh had to drop that critical count.

Both North and Poindexter were tried and convicted on various charges, including preparing false evidence for Congress, accepting illegal gratuities from Secord, and destroying documents.  Assistant Secretary of State Elliot Abrams pled guilty to one count of making false statements to Congress--a misdemeanor--because he had denied raising funds for the Contras, after soliciting a large contribution from the Sultan of Brunei.  Two CIA officers involved in the operation and former National Security Adviser Robert McFarlane were also convicted of withholding information from Congress. Then, after the convictions of North and Poindexter, Walsh opened a new front in his investigation.

Bit by bit, Walsh discovered that Secretary of State Schultz, Secretary of Defense Weinberger, and Vice President George H. W. Bush had all kept private notes of many important meetings relating to Iran-Contra, including key meetings in November in which the Administration put its cover story together. All of them had concealed these notes from investigators, Weinberger most flagrantly of all.  Although Schultz and Weinberger had both opposed the arms sales to Iran--and no proof surfaced that they knew about their proceeds going to the Contras--they had kept important evidence of who knew what when away from the Congressional investigators and prosecutors, and Weinberger, Walsh decided, had made clearly false statements denying that he had any such material.  The material would have confirmed that Reagan had approved the first illegal 1985 arms shipment to Iran and that Bush, who successfully ran for President in 1988, had supported the Iranian policy.  It took until 1992 for Walsh to find out what Weinberger had done, at which point he prepared to indict him.  The Washington Republican political establishment, led by Senate Minority Leader Bob Dole, mounted a sustained attack on Walsh's whole operation as a politicized waste of money, and called upon George Bush to pardon Weinberger. Weinberger's lawyers did what they could to delay the indictment--although Weinberger steadfastly refused to plead to a misdemeanor charge--with the result that the indictment was finally issued at the climax of the presidential campaign, in which Bush was soundly defeated by Bill Clinton.

On December 24, 1992, President Bush issued the following proclamation.
Today I am exercising my power under the Constitution to pardon former Secretary of Defense Caspar Weinberger and others for their conduct related to the Iran-Contra affair.

For more than 6 years now, the American people have invested enormous resources into what has become the most thoroughly investigated matter of its kind in our history. During that time, the last American hostage has come home to freedom, worldwide terrorism has declined, the people of Nicaragua have elected a democratic government, and the Cold War has ended in victory for the American people and the cause of freedom we championed.

In the mid 1980's, however, the outcome of these struggles was far from clear. Some of the best and most dedicated of our countrymen were called upon to step forward. Secretary Weinberger was among the foremost.

Caspar Weinberger is a true American patriot. He has rendered long and extraordinary service to our country. He served for 4 years in the Army during World War II where his bravery earned him a Bronze Star. He gave up a lucrative career in private life to accept a series of public positions in the late 1960's and 1970's, including Chairman of the Federal Trade Commission, Director of the Office of Management and Budget, and Secretary of Health, Education, and Welfare. Caspar Weinberger served in all these positions with distinction and was admired as a public servant above reproach.

He saved his best for last. As Secretary of Defense throughout most of the Reagan Presidency, Caspar Weinberger was one of the principal architects of the downfall of the Berlin Wall and the Soviet Union. He directed the military renaissance in this country that led to the breakup of the communist bloc and a new birth of freedom and democracy. Upon his resignation in 1987, Caspar Weinberger was awarded the highest civilian medal our Nation can bestow on one of its citizens, the Presidential Medal of Freedom.

Secretary Weinberger's legacy will endure beyond the ending of the Cold War. The military readiness of this Nation that he in large measure created could not have been better displayed than it was 2 years ago in the Persian Gulf and today in Somalia.

As Secretary Weinberger's pardon request noted, it is a bitter irony that on the day the first charges against Secretary Weinberger were filed, Russian President Boris Yeltsin arrived in the United States to celebrate the end of the Cold War. I am pardoning him not just out of compassion or to spare a 75-year-old patriot the torment of lengthy and costly legal proceedings, but to make it possible for him to receive the honor he deserves for his extraordinary service to our country.

Moreover, on a somewhat more personal note, I cannot ignore the debilitating illnesses faced by Caspar Weinberger and his wife. When he resigned as Secretary of Defense, it was because of his wife's cancer. In the years since he left public service, her condition has not improved. In addition, since that time, he also has become ill. Nevertheless, Caspar Weinberger has been a pillar of strength for his wife; this pardon will enable him to be by her side undistracted by the ordeal of a costly and arduous trial.

I have also decided to pardon five other individuals for their conduct related to the Iran-Contra affair: Elliott Abrams, Duane Clarridge, Alan Fiers, Clair George, and Robert McFarlane. First, the common denominator of their motivation -- whether their actions were right or wrong -- was patriotism. Second, they did not profit or seek to profit from their conduct. Third, each has a record of long and distinguished service to this country. And finally, all five have already paid a price -- in depleted savings, lost careers, anguished families -- grossly disproportionate to any misdeeds or errors of judgment they may have committed.

The prosecutions of the individuals I am pardoning represent what I believe is a profoundly troubling development in the political and legal climate of our country: the criminalization of policy differences. These differences should be addressed in the political arena, without the Damocles sword of criminality hanging over the heads of some of the combatants. The proper target is the President, not his subordinates; the proper forum is the voting booth, not the courtroom.

In recent years, the use of criminal processes in policy disputes has become all too common. It is my hope that the action I am taking today will begin to restore these disputes to the battleground where they properly belong.

In addition, the actions of the men I am pardoning took place within the larger Cold War struggle. At home, we had a long, sometimes heated debate about how that struggle should be waged. Now the Cold War is over. When earlier wars have ended, Presidents have historically used their power to pardon to put bitterness behind us and look to the future. This healing tradition reaches at least from James Madison's pardon of Lafitte's pirates after the War of 1812, to Andrew Johnson's pardon of soldiers who had fought for the Confederacy, to Harry Truman's and Jimmy Carter's pardons of those who violated the Selective Service laws in World War II and Vietnam.

In many cases, the offenses pardoned by these Presidents were at least as serious as those I am pardoning today. The actions of those pardoned and the decisions to pardon them raised important issues of conscience, the rule of law, and the relationship under our Constitution between the government and the governed. Notwithstanding the seriousness of these issues and the passions they aroused, my predecessors acted because it was time for the country to move on. Today I do the same.

Some may argue that this decision will prevent full disclosure of some new key fact to the American people. That is not true. This matter has been investigated exhaustively. The Tower Board, the Joint Congressional Committee charged with investigating the Iran-Contra affair, and the Independent Counsel have looked into every aspect of this matter. The Tower Board interviewed more than 80 people and reviewed thousands of documents. The Joint Congressional Committee interviewed more than 500 people and reviewed more than 300,000 pages of material. Lengthy committee hearings were held and broadcast on national television to millions of Americans. And as I have noted, the Independent Counsel investigation has gone on for more than 6 years, and it has cost more than $31 million.

Moreover, the Independent Counsel stated last September that he had completed the active phase of his investigation. He will have the opportunity to place his full assessment of the facts in the public record when he submits his final report. While no impartial person has seriously suggested that my own role in this matter is legally questionable, I have further requested that the Independent Counsel provide me with a copy of my sworn testimony to his office, which I am prepared to release immediately. And I understand Secretary Weinberger has requested the release of all of his notes pertaining to the Iran-Contra matter.

For more than 30 years in public service, I have tried to follow three precepts: honor, decency, and fairness. I know, from all those years of service, that the American people believe in fairness and fair play. In granting these pardons today, I am doing what I believe honor, decency, and fairness require.

Now, Therefore, I, George Bush, President of the United States of America, pursuant to my powers under Article II, Section 2, of the Constitution, do hereby grant a full, complete, and unconditional pardon to Elliott Abrams, Duane R. Clarridge, Alan Fiers, Clair George, Robert C. McFarlane, and Caspar W. Weinberger for all offenses charged or prosecuted by Independent Counsel Lawrence E. Walsh or other member of his office, or committed by these individuals and within the jurisdiction of that office.

In Witness Whereof, I have hereunto set my hand this twenty-fourth day of December, in the year of our Lord nineteen hundred and ninety-two, and of the Independence of the United States of America the two hundred and seventeenth.

The phrase "criminalization of policy differences" had apparently been coined in 1988 to excuse the Iran-Contra offenders--by whom I have not been able to establish.  As Walsh immediately pointed out, it was not policy differences for which these men had been charged, but rather lying about what the Administration had been doing.  Bush was arguing in effect that the executive branch had a right to pursue policies covertly that had not been approved according to law, and to respond falsely when Congress or prosecuting authorities asked about what they had been doing.  This was the last and decisive act of a coverup that had begun in November 1986 when the scandal first came to light.  President Reagan, unlike President Nixon, had completely escaped accountability for his illegal acts, North and Poindexter had used the importance of their role to get immunity and overturn their convictions, and Bush, unlike Nixon, had pardoned nearly all the convicted criminals in the enterprise. Republicans, it seems, had learned how to get away with it.

Republicans who had called for the repeal of the law authorizing the appointment of independent counsels found their own use for them during the Clinton administration, when they used their influence to prolong an investigation of Bill Clinton's Whitewater investments that eventually mutated into an inquisition about his sex life and led to his impeachment.  Clinton, like Bush, issued a burst of pardons in his last days in office, although not to conceal evidence of his own wrongdoing.  The Bush II administration allowed the CIA to embark on a torture campaign against terrorist suspects, many of them completely innocent.  Congress eventually outlawed these practices thanks largely to John McCain, but Barack Obama made no effort to hold anyone accountable for them after becoming President.  Donald Trump shamelessly used the pardon power to exonerate at least four close associates, Paul Manafort, Roger Stone, Michael Flynn, and Stephen Bannon, of various crimes--and was twice acquitted in impeachment trials nonetheless.

Watergate seemed at the time to restore executive branch accountability in the midst of the Cold War.   It did not.  Walsh's book tells the story of a long, unsuccessful struggle against a partisan background.  Partisanship has only grown worse, and may doom the current attempts to hold Donald Trump accountable for various out-of-office misdeeds as well.  

Saturday, October 01, 2022

The Destruction of American Politics--A Brief History

 I am now on the last lap (if not the home stretch) of my political history of the United States based on presidential addresses, having finished the draft chapter on Ronald Reagan and George Bush I and begun researching Bill Clinton.  Reagan's rule, I concluded, marked a turning point in American politics comparable to Franklin Roosevelt's, albeit in a very different direction.  Our economic and political elites have been very comfortable with the changes he made, but they left large segments of our population behind.  Those segments became the swing votes in a series of presidential and midterm elections that enabled dissatisfied voters to express their anger, but not to change the country's direction.  Eventually, in 2016, a whole party turned against the establishment completely, and we are still living with the consequences of that shock.

Although Ronald Reagan and Paul Volcker did stop the inflationary spiral of the years 1965-82, they were never all that successful against unemployment, which remained at 5.3 percent when Reagan left office.  The Bush I administration showed that the nation remained vulnerable to recession, and after unemployment reached 7.4 percent, Bush's vote percentage fell from 53 percent in 1988 to 37.5 percent in 1992, with  Bill Clinton winning 43 percent and Ross Perot 19 percent.  Clinton's victory did not however change the direction of the country.  He did raise income taxes on the highest bracket from 31 percent to 39.6 percent, but he also focused on cutting the size of the federal government, getting tougher on crime, "ending welfare as we know it," and moving forward on NAFTA, which he had refused to endorse as a candidate.  He warned that health care costs might rise from 14 percent of GDP to almost 20 percent by 2019 without a major reform, but Congress refused to act.  And in the 1994 midterms the Republicans won the popular vote for Congress handily and gained 54 House seats for a 230-204 majority.  They also gained 8 seats in the Senate and emerged with a 54-46 majority after two Democrats switched parties.  The economy grew during the remainder of his term and he defeated Bob Dole handily in 1996 with 49 percent of the vote, as Perot's vote fell to 8 percent, but neither then nor in 1998 did the Democrats seriously challenge the Republican hold on Congress. And in 2000, eight years of economic growth and the achievement of a balanced budget only allowed Al Gore to defeat George W. Bush in the popular vote by 48.4 percent to 47.9 percent.  Florida, which a post-election recount indicated that Gore might actually have won, was awarded to Bush without a recount by Republican officials and a Republican Supreme Court majority, giving Bush the election.  The Republicans maintained their House majority but lost control of the Senate 51-49 because of another party switch early in 2001. 

The reaction to 9/11 and the Republican exploitation of social issues led by gay marriage allowed the Republicans to narrowly regain control of the Senate and increase their majority in the House in 2002, and Bush managed to win another narrow victory in his 2004 re-election campaign, with a 51-48 percent margin in the popular vote and 286-251 in the Electoral College. Bush also reversed fiscal policy with two rounds of tax cuts to go with a new series of wars, and the deficit ballooned again.  The unpopular war in Iraq led to another popular revolt in 2006, when the Democrats regained control of the House for the first time since 1992, winning 31 seats, and secured a narrow majority in the Senate with 5 new seats.  Then came the housing market bust and the onset of a very severe recession in 2008.  Hillary Clinton, the candidate of the Democratic establishment, had been the overwhelming favorite for the Democratic nomination, but a new face, Barack Obama, excited the nation and defeated her in the primary campaign.  Obama won the biggest Democratic victory since Lyndon Johnson over John McCain, winning the popular vote 53-46 percent and the Electoral College 365-173.  The Democrats also scored another big win in Congress and emerged with majorities of 60-40 and 254-181.  Many believed that a new Democratic era was at hand.

Unfortunately, Barack Obama proved even before he took office that he would not depart from the new post-Reagan economic and foreign policy orthodoxy, appointing Larry Summers as his chief economic adviser and Hillary Clinton as his Secretary of State.  His economic team reacted to the crisis by bailing out the big banks, rather than directly assisting the ordinary Americans who were losing their houses and jobs, and he failed to mobilize the anger in the country against financial interests, as Franklin Roosevelt had done.  Meanwhile, he withdrew troops from Iraq, but increased them in Afghanistan, and orchestrated another disastrous change of regime in Libya. The Affordable Care Act--a very controversial measure--was his only major legislative achievement, and the Republicans regained the House with 63 new seats, 257-178, and wiped out most of the Democratic majority in the Senate with 6 more seats there in 2010.  Obama nonetheless managed to win re-election over Mitt Romney with a 51-47 popular vote margin and 332-206 in the electoral vote, but the Democrats regained only 13 House seats, cutting the Republican edge to 234-201, while increasing their Senate majority to a still-narrow 53-47.  Those margins made any new legislative achievements impossible, and in 2014 the Republicans regained control of the Senate, 54-46, with nine victories, and gained 13 more seats in the House for a margin of 247-188.

Dynasties had become fashionable in this era of American politics, and pundits in 2015 expected Hillary Clinton--Obama's annointed successor--to contest the presidential election against Jeb Bush.  Clinton as it turned out faced a surprisingly serious challenge from another outsider, socialist Bernie Sanders, but defeated him for the nomination.  Neither Bush nor any other elected Republican official, however, stood a chance against the real estate mogul and reality  TV star Donald Trump, who not only ran explicitly against the establishment's policy positions but reveled in violating various taboos of elite American politics and culture.  As I have pointed out here in previous analyses, neither Trump nor Clinton really excited the voters, and neither did as well in the polls as Romney and Obama in 2012.  Clinton won the popular vote 48-46 percent with huge popular majorities in the northeast and on the west coast, but Trump flipped six key states to his side and won the electoral vote 304-227.  The Republicans also won the nationwide popular vote for the House and retained a 241-194 majority, and held on to the Senate, 52-48.  

Trump's main legislative achievement--parallel to George W. Bush and Ronald Reagan--was another round of tax cuts for corporations and the rich, and he was no more successful than Obama in winning the nation to his side.  Two years into his term the Democrats won the popular vote for the House by a whopping 9 percent, gained 41 seats, and emerged with a majority of 235-200, their first since 2008. The Republicans, however, completed their takeover of several red states and gained 2 net seats in the Senate, increasing their majority to 54-46.  

Trump proved in dozens of ways that he was utterly unfit to serve as president, and he was less successful than Bush II or Obama in winning the American people over to his side, particularly after the COVID epidemic struck.  Although in 2020 a number of key states were quite close, Joe Biden--another establishment Democrat--defeated him solidly, 51-47 percent in the popular vote, and 306-232 in the Electoral College.  Yet nationwide--thanks in part to Republican gerrymandering in several states--the deadlock continued.  The Democrats did manage to tie the Senate 50-50, winning control thanks to the Vice President's vote, but they lost 15 House seats, reducing their majority to 220-215.  Biden and the Democrats managed to pass a trillion-dollar infrastructure bill and an important measure focusing on climate change, but neither one has as yet had any real impact in the country.  Meanwhile, inflation has returned with a vengeance after remaining under control for 40 years, and as I write, Republicans and Democrats are estimated to have 68 percent chances of regaining the House and keeping the Senate, respectively.  Social issues, led by abortion and education, have become more important than ever.

On the one hand, the failure of either party to reverse the economic trend towards inequality in the last 40 years has kept the electorate swinging back and forth, punishing first one party and then the other and contributing to gridlock.  Meanwhile, one party--the Republicans--have completely abandoned modern political traditions, denying the validity of elections, contesting them by various strategies up to and including insurrection, and relying on the Supreme Court to implement much of its agenda.  Biden and the Democrats are not simply trying to hold onto power, but to save US politics as we have known them--and so far Biden has been less successful than either Clinton or Obama in forging a real bond with the electorate. Meanwhile, long-term problems such as the status of immigrants and the cost of health care have only gotten worse.  Clinton warned in 1993 that health care already cost us 14 percent of our GDP and warned that by 2020 that figure might reach almost 20 percent.  He was exactly right: it cost 19.8 percent of GDP in that year. The trend towards greater inequality has continued almost unabated, and the influence of money over politics has grown.  With the Federal Reserve Board actively trying to bring about a recession to check inflation, Democratic prospects look dreadful in 2024.  A very large, intergenerational mass of voters clearly has little or no faith in our political establishment--and I can't say that I blame them.