Streetwise Professor

November 12, 2018

Bugger Off, M. Macron, and Take Your Buddies With You

Filed under: History,Politics — cpirrong @ 8:02 pm

Trump’s blunt statement that he was a nationalist has set off paroxysms of rage from the usual quarters.  This culminated with French president Macron intoning (under a monument to French national pride and military conquest–but we’ll see that’s just a sliver of the hypocrisy) that “patriotism is the exact opposite of nationalism.”

Upon reading this, my initial reaction was: bugger off, froggie.  Here’s my more considered reaction, though I have to confess it pretty much arrives at the same conclusion, only with bigger words 😉

Macron, and most of the other people European and American who have seized on Trump’s remark, are playing a slippery rhetorical sleight-of-hand.  They are trying to equate Trump’s use of the word with European-style blood-and-soil nationalism, which in the 1930s fueled fascism, and contributed to conflict–but not to the degree that Macron and his ilk claim.

This is categorically false, and in fact a slander.  It is clear that by “nationalism” Trump means putting American national interest first. Moreover, Trump’s assertion relates primarily to means, not goals.  He views collective international organizations to be an impediment to, and at times inimical to, the advancement of American interests.  He believes that a more transactional, bilateral approach better achieves American goals, and that collective organizations (even Nato, not to mention the WTO or UN or whatever) are beneficial only to the extent that they lower the transactions costs of the US making deals that benefits it.

That is, the antonym to Trump’s nationalism is globalism.  It has little if anything to do with ethno-nationalism of the blood-and-soil variety, as Macron and others ceaselessly insinuate.

You can disagree with Trump’s belief that a more unilateral, transactional approach is more beneficial to US interest than alternatives, but at least it is bluntly honest, as opposed to the hypocrisy of the EUropeans, as epitomized by Macron.  For they too want to advance national interests, but do not have the heft to do so as individual nations.  So Germany and France in particular have found that the most effective way to leverage their national interest is through collective organizations, such as the EU, Nato, and the UN, which they then tart up as high-minded humanitarianism.

In other words, the US is Gulliver, and the European Lilliputians are incensed and frightened that under Trump Gulliver-America is no longer willing to remain tied down.  So spare me the condescending lectures.

The Macron et al criticisms are false and slanderous as well because they grotesquely mischaracterize American nationalism–perhaps because the Europeans are projecting their own failures on us.  As many have pointed out over the years, American nationalism derives from a creed and an ideology, rather than ethnicity.  To confuse American nationalism with European nationalism is a category error.

American nationalism has assumed an ethnic or religious tinge primarily during times of large-scale immigration from countries and regions with cultures (political, social, religious) that were feared to be incompatible with American ideals of liberty and democracy.  Those fears usually turned out to be overblown, precisely because the United States has proved uniquely able to assimilate people from about everywhere, many of whom rapidly and eagerly adopted American identity–something Europe has never done, and continues to fail to do.  (Small illustration.  As a kid I was in a Civil War reenacting unit.  I was struck that most of the men in this group had eastern European names, and had no possible family connection to the Civil War, let alone the Revolution or the Mayflower.  But they were enthusiastic about the Civil War and American history, and all were vocally patriotic.)

So the sneering criticisms of Trump’s avowed American nationalism emanating from Macron et al are a mixture of ignorance, slander, and advancement of national self-interest by multi-lateral means.  Which is why he–and they–can bugger off.

Another point.  Why should we trust the judgment of soi disant international(ist) elites? Especially when their prescriptions have varied wildly over time.

Note: national self-determination was a bedrock Liberal Internationalism 1.0.  Look at Wilson’s 14 Points, one of the foundational documents of liberal internationalism: points VI through XIII–that is, more than half–were dedicated to nationality questions.  Furthermore, the thrust of these points was that ethnic nations should have their own states, or at least a major voice in the states in which they perforce lived as minorities.  Further, the post-WWI settlement created ethnicity-based nation states in Europe, and embodied the principle in colonial areas given mandate status.

This component of liberal internationalism was in part based on a view of right: the oppression of ethnic groups by multi-national empires (Austro-Hungarian, Ottoman, Russian in particular) was considered a grave injustice.  It was in part based on pragmatic considerations. A major contributor to the outbreak of war in 1914 was the efforts of teetering multi-ethnic empires to maintain control over increasingly restive ethnic minorities.  Hell, the reason that Austria-Hungary felt compelled to strike at Serbia was that if it didn’t, it would encourage the Czechs, Slovaks, Slovenians, Ruthenians, Poles, and on and on to attempt to break away.

The belief that national self-determination would reduce the risk of world war was a very reasonable conclusion.  Wars between empires are dangerous and bloody.  Wars between empires are more likely when said empires are rent by ethnic turmoil–especially when Empire A deems itself the big brother and protector of an ethnic group in Empire B.  Yes, little national states may be prone to conflict, but such conflicts are localized and unthreatening to continental or world peace.

It’s also interesting to note that the idealization of nationalism on the left has deep roots, notably the Romantics of the 19th century (who had influence on the early-20th century internationalists): think of Byron and the Greeks.  The 1848 revolutions–often lionized by the left–had a decidedly nationalist thrust.

But what about the inter-war years, culminating in World War II?  Didn’t ethnic nationalism set the stage for it?

Europe did not have a nationalism problem, generally speaking.  It had a German problem, as it had had since 1870.  To generalize about nationalism and national self-determination from Germany is another category error.  Germany is its own category both intellectually/psychologically (Adenaur: “Germans are just Belgians with megalomania”), and due to its economic power.  Fascist Romania–no big deal.  Fascist Germany–very big deal.  (Which is one of the reasons why today’s Germans want to condemn nationalism generally, in order to obscure their uniquely malign historical legacy.  Another reason is that by keeping down the Poles, Hungarians, etc., Germany can achieve dominance by means other than panzers and the Shleiffen Plan.)

Liberal Internationalism 2.0 is the inversion of Version 1.0.  It is predicated on the abnegation of national identity, based on the claim that pursuit of national identity and interest will cause the next general conflagration.

In brief:

Liberal Internationalism circa 1918: Poles, Hungarians, Slavs, etc. should have their own nation states in order to prevent war.
Liberal Internationalism circa 2018: Poles, Hungarians, Slavs, etc. should subordinate their nation states to the EU in order to prevent war.

So what is the claim to authority based on, given this 180 degree turn?

Let us also remark on the ahistorical cluelessness of Version 2.0.  The reason that Macron and Merkel and all the other EUputians are particularly vexed by nationalism is that a majority of Poles, Hungarians, and English, and large and arguably growing minorities of Italians, Swedes, and yes, French, and yes!, even Germans, do not want to subordinate themselves to a supra-national, supra-ethnic government under primarily German domination.  (Hey–sounds kind of like the Austro-Hungarian Empire, no?) Their response to this is not to attempt to accommodate the desire for some national autonomy, but to crush it.  THAT is a subtext of Macron’s remarks.

But again redolent of Austro-Hungary (and the Russian Empire, and the Ottoman) these attempts to assert central (imperial) control over national groups only stoke more resistance.  This could not be more obvious.  Hell, even Merkel’s agonies are directly attributable to her mulish refusal to accommodate national sentiments within her own country, but she and her ilk insist on doubling down on Moar Europe, not realizing that the refusal to accommodate is a far greater threat to their dear project than Poles or Hungarians wanting to do things their way.

Merkel and Macron never tire of lecturing us about the Lessons of History, and in this just-past centennial of the end of WWI, about the Lessons of the Great War.  Before lecturing us any further, they should have a séance with Franz Josef and see how the suppressing national sentiments thing works out.  Sort of a Ghost of Christmas Past moment, if you will.  Or they should contemplate more honestly the sources of their current problems–like the Ghost of Christmas Present.  They really don’t want to see Ghost of Christmas Future.

In sum, the contretemps over Trump’s avowed American nationalism is just more bleating from a failed and failing elite who have learned nothing and forgotten nothing.  What’s more, for those bleating the loudest–Marcon, Merkel, and their lot–entities like the EU are just a way of advancing national interest through other means.  It is not an intelligent criticism.  Anything but–it is deeply ignorant.  Further, it is not a principled criticism.  Anything but–it is hypocritical to the core.

 

Print Friendly, PDF & Email

November 10, 2018

A Job That Americans Are All Too Eager to Do

Filed under: History,Politics — cpirrong @ 6:36 pm

That job?  Voter fraud.

In three states where major elections are within the margin of fraud, ballot boxes are miraculously appearing in solid Democratic counties after Republicans appeared victorious.

This is a time-honored tactic.  It’s how “Landslide Lyndon” Johnson obtained his nickname.  After it appeared that LBJ had lost a Senate primary to Coke Stevenson, several ballot boxes containing 20,000 votes miraculously appeared, giving Johnson victory by an 87 vote margin.

So spare me chin pulling–and hysteria–about foreign interference in American elections.  American interference in American elections is a far greater threat to democracy.  And it’s a job Americans have been doing–and doing all too well–since the beginning of the Republic.

Reading about the shenanigans in Florida, Arizona, and Georgia spurred me to Google “Landslide Lyndon” to refresh my memory about his 1948 “victory.” The first several hits were from MSM (NYT, WaPo) reviews of Robert Caro’s biography of Johnson that documented the fraud.  Given how Johnson had been savaged by the left during Vietnam, it was astounding to see the lengths to which mainline liberal/leftist publications went to defend Johnson and criticize Caro.  It was like T-cells attacking a foreign body.  Yes, LBJ was a bastard–but he’s our (Democratic) bastard!

This is particularly revealing given the incredible research that Caro had done.  But he attacked one of the tribe, so he must be destroyed.

I remember vividly reading this Caro volume.  I finished about half of it, and had to put it down.  Johnson was such a loathsome human being–to put it charitably–it was nauseating to read the details.   I cannot think of one redeeming quality in the man.  Not a single one.

I was already pretty cynical about American politics by that time.  Caro’s Means of Ascent turned me into a die-hard cynic.   It was a perfect illustration of Hayek’s principle: the worst always get on top.

What is going on in the aftermath of the 2018 midterms is putting an exclamation point to that cynicism.  (Not that there were no reinforcing events in the intervening years–far from it.)   And we should not be surprised.   As government has grown in scope and power, the stakes of winning elections have grown commensurately.  If fraud paid in 1948 (or 1960), it pays far more now.

Indeed, I suspect that the obsession with idiotic Facebook posts or tweets allegedly posted by Russians is driven by the fact it is a very convenient distraction from far more real–and far more enduring–threats to the integrity of American elections.  Homegrown threats. But if you read the MSM, Russian meddling is a real and important threat, but even entertaining the possibility that American elections are rife with domestic fraud is to advance a conspiracy theory.  This is another illustration of their incomparable ability to invert reality.

 

Print Friendly, PDF & Email

October 15, 2018

Elizabeth Warren’s Indian Heritage: From Absence of Evidence, to Evidence of Absence

Filed under: History,Politics — cpirrong @ 7:41 pm

Elizabeth Warren’s DNA test showing that she is infinitesimally Indian has supposedly put her in the pole position for the Democratic presidential nomination.  Well, that might be true, actually, for the whole episode shows that she’s a raving loon, which is a prerequisite for an aspiring Democrat these days.

The test results allegedly show “strong evidence” of Amerind heritage.  What they actually show is strong evidence of a trivial connection: that is, she provided strong evidence of how farcical and exaggerated her previous claims were.

The Cherokee Nation’s response brings to mind the punchline to the old joke about the Lone Ranger and Tonto: “what you mean ‘we’, paleface?”:

“Using a DNA test to lay claim to any connection to the Cherokee Nation or any tribal nation, even vaguely, is inappropriate and wrong,” said Chuck Hoskin Jr., the tribe’s secretary of state.

“It makes a mockery out of DNA tests and its legitimate uses while also dishonoring legitimate tribal governments and their citizens, whose ancestors are well documented and whose heritage is proven.”

. . . .

“A DNA test is useless to determine tribal citizenship,” Hoskin said in the statement Monday, which was released by the tribe. “Current DNA tests do not even distinguish whether a person’s ancestors were indigenous to North or South America.

“Sovereign tribal nations set their own legal requirements for citizenship, and while DNA tests can be used to determine lineage, such as paternity to an individual, it is not evidence for tribal affiliation.”

This is particularly important because Warren did not just claim some non-specific Native American heritage: she expressly identified herself as Cherokee.  On multiple occasions.  Actual Cherokees say “don’t bring that mess in here.”

Warren clearly believes this test provides vindication.  In fact, it makes her a laughingstock.  The test itself is dubious, on multiple grounds.  The connection is six to ten generations in the past: to put in context, my ancestor a mere seven generations back, incidentally the last white man killed by an Indian in Washington County, Ohio, was tomahawked in . . . 1794.  (Perhaps I should sue for a hate crime violation. Has the statute of limitations elapsed?) Further, as alluded to in the Cherokee Nation statement, the genetic test inferred Warren’s ancestry, such as it is, from South American genes (Peruvian, Columbian) because North American Indian DNA samples are lacking (precisely because they are adamantly opposed to people–like, say, Elizabeth Warren?–using DNA test results to claim Indian heritage).  Moreover, the average American of European ancestry has as much or more Indian DNA as Warren.  Meaning that Liz is pretty much your average white person.  Only whiter.

Beyond the levity, there are serious issues here.  Warren used her claimed Native American heritage to advance her academic career.  She did so repeatedly, and with specificity–for instance, the story (ludicrous in light of the “strong evidence” Liz trumpeted today) that her mother’s appearance was so Indian that she had to elope due to the racism of her husband’s parents.  (But hey, Liz’s mom was twice as much Indian as Liz!)  At whose expense did she advance?

Further her story about her mother, she specifically claimed that mom was part Cherokee and Delaware.  Which would require two Indian ancestors–which her DNA test has ruled out.  The DNA test gives a “fail” to this story on another ground.  A Delaware-Cherokee union would have been possible, say, post-1860s, when the Delawares were moved to the Indian Territory from points east, and settled within Cherokee territories.  But Liz’s own DNA evidence puts her Indian ancestor no less than six generations back–roughly the end of the 18th century or early-19th century–and perhaps as far as 10 generations back–sometime early in the 18th century.  But at the later date the Delawares were in Ohio (fighting my ancestors!) and the Cherokees were in the Carolinas–not much of a chance of a tryst there.  At the later date, the Delawares were along, well, the Delaware River in New Jersey and New York, with some on Long Island, and the Cherokees were in the Carolinas.  Even less of a chance of a coupling.

But bah to such pesky details! Two prestigious universities–Penn and Harvard–touted her as a “person of color” to establish their diversity bona fides.   It is clear that both she and they did so shamelessly and self-interestedly in the complete absence of evidence.  Then there was an absence of evidence: now there is evidence of absence.

In other words, Elizabeth Warren is an opportunistic fraud, and Ivy League universities were accessories.

Which perhaps means that indeed, she is well-suited to be the Democratic front runner.

Run, Liz! Run! In your desperate search for validation, you just provided Trump with even more ammunition to ridicule you until the cows come home–if they ever do.* Meaning that you could be ridiculed for-evah.

*If you read the link regarding my ancestor Abel Sherman, you’ll learn that he was waylaid and scalped while searching for a wayward cow who had wandered off while Abel and his family were hunkered down in a fort at Olive Green (near the junction of the Ohio and Muskingum Rivers) to defend themselves against Indian raids. So sometimes the cows don’t come home.

To extend the riff, TV’s Tonto was portrayed by Jay Silverheels.  Abel Sherman was killed by a Shawnee named . . . Silverheels.  Whom I’m sure would have been far more likely to scalp Warren, then embrace her as a compatriot.

Print Friendly, PDF & Email

The Media on Trump on Lee: Don’t Trust, But Verify

Filed under: Civil War,History,Military,Politics — cpirrong @ 11:08 am

The latest media Trump freakout derives from his statement during a campaign rally in Ohio last week that Robert E. Lee was “a great general.”  Since every Confederate is beyond the pale 153 years after the end of the Civil War, any praise of any Confederate is deemed evidence of racism.

As we’ll see, that spare characterization of Trump’s remarks was grotesquely misleading.  But hit pause on that for a moment, and just consider the objective truth of the part of the statement that was reported.  (Does truth even matter any more?)  There is little doubt that Lee displayed excellent generalship and leadership at the operational level.  Some of his campaigns–Second Manassas and Chancellorsville in particular–are justifiably renowned as examples of a smaller force defeating a larger one through maneuver.  His defense during the Overland Campaign was also laudable. Other campaigns–notably Gettysburg–were less creditable: but no modern general (not even Napoleon pre-Waterloo) was uniformly successful in campaign or battle.  The main objections to his generalship were that his operational success was not achieved pursuant to a broader strategic vision, and relatedly, that his tactical methods produced casualties that the Confederacy could not afford.  (Indeed, the casualties at his greatest victory–Chancellorsville–cast some shade on the achievement.)

Further note that acknowledging that someone was a great general does not imply an endorsement of the cause for which he fought.  Were Manstein and Rommel great generals?  Yes–much to the world’s cost.  Similarly, Zhukov.  The greatest generals in world history–Alexander, Caesar, Genghis Khan, Tamerlane, Napoleon–drowned their worlds in blood in their pursuit of grandeur.  Alas, one of the tragedies of history is that generalship exhibits some correlation with the depravity of the cause in which it is employed.  (This raises interesting questions regarding causation.)

So even if Trump said only what was widely reported, the facts were on his side.  But what was reported was not all he said.  Here are his remarks in full:

But maybe someday he will. It also gave you a general, who was incredible. He drank a little bit too much. You know who I’m talking about, right? So Robert E. Lee was a great general. And Abraham Lincoln developed a phobia. He couldn’t beat Robert E. Lee. He was going crazy. I don’t know if you know this story. But Robert E. Lee was winning battle after battle after battle. And Abraham Lincoln came home, he said, “I can’t beat Robert E. Lee.”  And he had all of his generals, they looked great, they were the top of their class at West Point. They were the greatest people. There’s only one problem — they didn’t know how the hell to win. They didn’t know how to fight. They didn’t know how. And one day, it was looking really bad. And Lincoln just said, you — hardly knew his name — and they said, don’t take him. He’s got a drinking problem. And Lincoln said, I don’t care what problem he has, you guys aren’t winning. And his name was Grant. General Grant. And he went in and he knocked the hell out of everyone. And you know the story. They said to Lincoln, you can’t use him anymore. He’s an alcoholic. And Lincoln said, I don’t care if he’s an alcoholic. Frankly, give me six or seven more just like him. He started to win. Grant really did. He had a serious problem. Serious drinking problem. But, man, was he a good general. And he’s finally being recognized as a great general. But Lincoln had almost developed a phobia, because he was having a hard time with a true great fighter and a great general, Robert E. Lee. But Grant figured it out, and Grant is a great general, and Grant came from right here.

So in a campaign rally in Ohio, Trump was praising Ohioans–a staple of stump rhetoric.  One Ohioan he praised was Ulysses S. Grant.  In the process of praising Grant, he touted the generalship of Grant’s most famous foe–Robert E. Lee.  This wasn’t about Lee, except indirectly.

Trump employed a standard rhetorical technique: he enhanced the achievements of the person he was praising by emphasizing the personal obstacles he had overcome (in Grant’s case, alcohol) and the brilliance and strength of the enemies that he vanquished (here, Lee).  Would David have become a legendary figure had he felled Irving, the Philistine Dwarf, instead of Goliath, the Philistine Giant?  Er, obviously not.  Nor would Grant have been as famous if he had vanquished Benjamin Huger or Leonidas Polk or any of the many non-entities that achieved general rank in the Confederacy.  (Indeed, one reason to question Lee’s brilliance is that his victories were won against a parade of incompetents.)  But beating Lee is a true accomplishment.

But the media ignored this in its haste to find another charge to add to the Trump indictment, and to further the narrative that he makes racist appeals to the Confederacy.   Indeed, some media couldn’t satisfy its frenzy by stopping merely at ripping a sentence fragment out of context: NBC falsely enhanced the narrative by claiming that Trump had said that Lee was “incredible.”   Actually, that is a classic case of projection: It is NBC, and the rest of the media that ran with the “Lee is great” meme that lacks credibility.

Yet they whine when he blasts them for spreading “fake news.”  Here’s a thought: if you don’t want Trump to accuse you of spreading false news, don’t spread false news!

If there’s anything objectionable in Trump’s remark, it is the first part of that rhetorical technique: Trump arguably exaggerated seriously Grant’s alcohol problem, at least as of the time of the Civil War.  There is still much debate over whether and when and how much Grant consumed alcohol.  Many of the reports of his abuse of liquor were insinuations by nasty backbiters (e.g., Henry Hallack) that exploited the reputation Grant developed in the 1850s while marooned at Fort Humboldt in California.  There is no credible report that he was impaired at any time in the conduct of his duties 1861-1865.

And as Lincoln said when those backbiters criticized Grant: “I wish some of you would tell me the brand of whiskey that Grant drinks. I would like to send a barrel of it to my other generals.”  For Grant carried out one, and arguably two, of the greatest campaigns of maneuver in the Civil War.  The Vicksburg campaign, in fact, is one of the most brilliant campaigns in modern military history anywhere.  The crossing of the James in June, 1864 was also operationally brilliant, though barren of results due to the blundering of the generals in charge of carrying the attacks at Petersburg home–and arguably due as well to the exhaustion and casualties and loss of aggressiveness brought on by the relentless grinding of the Overland Campaign of the prior 5 weeks.

Further, Grant excelled Lee in that his operational successes all advanced broader strategic goals.  By March, 1864 Grant had responsibility for Northern grand strategy, and seized the opportunity with a relish, whereas Lee invariably avoided this responsibility.  Although the frictions of war–notably the incompetence of Franz Sigel, Benjamin Butler, and Nathaniel Banks–prevented the immediate consummation of Grant’s strategic vision, its breadth and flexibility eventually led to its success.  (There is some similarity between the fate of Grant’s strategic plan and his grand tactical scheme at Chattanooga in November, 1863.  Neither scheme worked according to plan, but since neither was dependent on the success of any single element, the failure of one or two aspects of the plans did not preclude their ultimate success.)

This sorry episode illustrates yet again what should by now be obvious.  If the media reports anything about Trump, modify Reagan’s famous remark about the USSR: don’t trust, but verify.

Print Friendly, PDF & Email

October 7, 2018

The Apotheosis of an American Army: The Meuse-Argonne, 100 Years Ago

Filed under: History,Military — cpirrong @ 4:38 pm

The next few days are the centennial of some of the bloodiest fighting in the history of the American army.  The Lost Battalion underwent its horrific ordeal 2-8 October, 1918.  On 8 October, one of the 82nd Division soldiers who attacked in the desperate effort to rescue Major Whittlesey and his men–Corporal Alvin York–killed an estimated 25 Germans and captured 132 more.  On 7 October, John Barkley clambered into an abandoned tank and used its machine gun to beat back several German counterattacks.  On 12 October, Samuel Woodfill took out several German machine gun nests with expert marksmanship, and out of ammunition, dispatched two Germans with a pickaxe.

All of these men (two from the Lost Battalion) won the Medal of Honor.  I could go on.  Forty-three American soldiers won the MoH in action in the first two weeks of October, 1918.

If you read the medal citations, you will find that most of them were for single-handed attacks on German machine gun positions.  Yes, machine guns were major killers on the Western Front, but the Meuse-Argonne was different than say, the Somme, or the Chemin de Dames, where Allied armies attacked established trench lines in fairly open terrain.  Instead of extensive linear trench lines, the German positions in the Argonne Forest and the more open terrain to the east consisted of a dense thicket of machine gun nests.  The terrain was appalling.  Much of it was heavily wooded, cut by dense ravines.   The Americans had to crawl their way through it, yard-by-yard, taking out nest after nest, all the while subject not just to the fire from chattering Maxim guns, but to horrific shelling of high explosive, shrapnel, and gas from German guns posted on the high ground to the north and east.

Most of the American units in the initial waves had not been blooded before.  For instance, the 77th Division (in which the Lost Battalion served) and the 82nd Division (York’s) were rookies.  They had to learn the hard way, through bitter experience against an experienced foe fighting from prepared positions.

The inexperience showed initial phases of the  American assault.  Although the pivot that the 1st Army made from its attack on the St. Mihiel salient to the east to the Meuse-Argonne sector to the north and west was truly marvelous–and under-appreciated–the attack itself was beset by all of the problems of World War I offensive action, compounded by American greenness and a stubborn refusal to learn from bitter British and French experience.  American artillery support was inadequate.  The logistics–admittedly made difficult enough to start with by the wretched state of the roads–were botched.  American tactics, inspired by General Pershing’s belief in “open warfare” and the primacy of the offensive (heedless of the horrific fate of the French operating on the same beliefs in 1915 and 1917) were suicidal.

Yet the Americans learned quickly–by necessity.  It was adapt, or die.  Adaptation, combined with an almost preternatural self-confidence and aggressive spirit, ultimately prevailed.

Even as early at the battles of late-May/early-July 1918 (Chateau Thierry, Belleau Wood, Soissons) the Germans were taken aback by the aggressiveness of the Americans in the offense and their stubbornness in the defense.  “The Americans kill everything” wrote a shocked German grenadier.  “They showed a bestial brutality.”

Yes, tens-of-thousands of Americans leaked to the rear during Meuse-Argonne, but hundreds of thousands stuck it out–often sticking their bayonets in German bellies, as if to confirm the grenadier’s assessment.

World War I was a ghastly combination of inept leadership (often overwhelmed by the mismatch between the defense and offense) and individual courage.  Though the US army came late to the war, its experience from 26 September-11 November 2018 re-enacted this same combination.   And in the end, the incredible bravery and tenacity of the American soldier–farm boys and cowboys and immigrant slum dwellers alike–prevailed, and dealt the Germans body blows from which they reeled, and in the end, from which they could not recover.

But today, the centennial is passing almost completely unnoticed.  Where else but here are you reading about it?

In the aftermath of the war, the federal government, and many state governments, erected large monuments commemorating American service in the war.  Although the remains of most of the tens-of-thousands slain in the Meuse-Argonne were brought home, many thousands more were interred in large cemeteries,  most notably the Aisne-Marne Cemetery to the west of Rheims, and the Romagne Cemetery to the east.  The monuments are truly epic in scale–the US erected nothing comparable in the aftermath of WWII.  The cemeteries are immense–Romagne is larger than the cemetery at Omaha Beach.

Yet these places are almost forgotten and unvisited today.*  Located in an isolated pocket of France, commemorating a war that is largely outside of the consciousness of modern Americans (for whom even WWII is a vague memory), few Americans see them, either on purpose or by accident.

The isolation and loneliness makes them truly haunting places.  I visited the Argonne battlefields with my dad in June, 2010.  We were alone everywhere.  We seldom saw even a car on the road as we wound our way across the Argonne, from the ravine to where the Lost Battalion bled to Chatel-Chéhéry where Alvin York started his advance to Montfaucon and Romagne where the Americans clawed for yards day after day, to the Heights of the Meuse from where German guns ruthlessly pounded the Americans.  The monuments and cemeteries were inhabited only by the ghosts.

In many ways, America came of age in the Meuse-Argonne, but today those who fought in that epic battle are not just forgotten–they have never even been known by most Americans.  So please, take a moment in these October days to remember, and pay tribute to, men who do not deserve the oblivion to which an easily distracted nation has consigned them.

*But fortunately, not abandoned.  The American Battle Monuments Commission has done a marvelous job  of maintaining and preserving these testaments to the bravery of American soldiers.

Print Friendly, PDF & Email

August 28, 2018

Shed a Tear for Central Bankers Facing Obsolescence? Uhm, No. Jump for Joy.

Filed under: Economics,Financial crisis,History,Regulation — cpirrong @ 7:00 pm

Scott Sumner rightly skewers this central bankers’/macroeconomists’ angst:

That’s according to a paper presented Saturday by Harvard Business School economist Alberto Cavallo at the Federal Reserve Bank of Kansas City’s annual symposium in Jackson Hole, Wyoming.

Cavallo’s main finding was that competition from Amazon has led to a greater frequency of price changes at more traditional retailers like Walmart Inc., and also to more uniformity in pricing of the same items across different locations. He found that the shift has led to a greater influence of movements in the U.S. dollar exchange rate and gas prices on retail prices.

. . . .

The Cavallo study also showed that from 2008 to 2017, as online purchases accounted for an ever-growing share of total retail sales, the average duration of prices of goods sold at large U.S. retailers like Walmart fell from about 6.5 months to about 3.7 months.

The implications have subtle significance for monetary policy because so-called “sticky prices” — the notion that sellers aren’t able to change prices right away in response to changes in supply and demand — is precisely what gives interest rates power in mainstream models to have any effect on the economy at all. In those models, if prices adjust instantaneously in response to shocks, then there is no role for central bankers to guide supply and demand back into equilibrium.

“For monetary models and empirical work, my results suggest that the focus needs to move beyond traditional nominal rigidities,” Cavallo wrote. “Labor costs, limited information, and even ’decision costs’ (related to inattention and the limited capacity to process data) will tend to disappear as more retailers use algorithms to make pricing decisions.”

Come on.  The right response to Cavallo’s finding is NOT: “OH NOES! Monetary policy will be less effective when prices aren’t as sticky!”  The right response is: “Thank God we won’t need to rely on monetary policy–which can go horribly wrong because central bankers are humans operating with limited information and flawed theoretical understanding–to counteract shocks!”

Sticky prices create a potentially–and I emphasize potentially–beneficial role for monetary policy.  When prices are sticky, monetary shocks–including shocks to the demand for money–can have real effects.  Monetary authorities can in theory–and again I emphasize in theory–counteract these shocks and keep output closer to the optimum level.

However, the actual results often fall far short of the theoretical potential, because (as Sumner argues happened in 2007-2008, and Friedman and Schwartz argued happened regularly in US monetary history from 1867-1960) monetary authorities may misdiagnose economic conditions, and adopt a suboptimal policy, especially when they operate based on flawed heuristics, such as using the level of interest rates as a measure of whether monetary policy is tight or loose.

Thus, having more flexible pricing that allows nominal prices to adjust to shocks to the demand and supply of money makes us less reliant on central banking wizards–a very good thing, when they are often quite like the Wizard of Oz.

As Scott notes, more flexible/less-sticky prices do not eliminate the impact of monetary policy altogether, though for the most part that role should be less interventionist and more rule-based.

One nominal rigidity that more flexible goods prices won’t eliminate is that most debt will be denominated in nominal terms, and thus its real value will change with the prices of goods and services.  More flexible good prices may actually exacerbate the economic impact of nominal debt on real activity.  Although it is possible to imagine financial innovations that lead to more effective indexing or debt, whether the innovation is adopted widely remains to be seen, and there is room for doubt given the coordination issues involved.  Moreover.  there will still be a stock of existing nominal debt to work off even if new debt is indexed in more clever ways.

But even if nominal rigidities disappear, monetary shocks can still cause real fluctuations.  Remember that the Lucasian Rational Expectations models and their successors do not include rigid prices, yet they exhibit real responses to nominal shocks.  Indeed, that was the entire reason why Lucas and his contemporaries devised these models in the first place, as a way of resolving the Friedman conundrum: “money is a veil, but when the veil flutters, the economy stutters.”

In such a world, however, the role of central banks is much more limited.  In such a world, rule-based, rather than discretionary, policies that reduce the frequency and intensity of nominal shocks, are warranted.  That doesn’t leave much for central bankers to do.  They can’t be masters of the universe!

Central bankers no doubt look with dread on such a world.  That dread is implicit in the fretting over more flexible pricing reducing and perhaps eliminating the role of activist central bankers.  But their dread should be our joy.

 

Print Friendly, PDF & Email

July 19, 2018

Freakouts Cause Flashbacks–to Montenegro, of All Places

Filed under: History,Military,Politics — cpirrong @ 6:55 pm

The freakout du jour–Trump’s questioning whether it made any sense to have Montenegro in Nato–triggered a flashback (from inauguration day, in fact):

Another example of dysfunction is Montenegro’s impending bid to join Nato. Just what is the rationale for this? There is none: Montenegro brings no military capability, but just adds an additional obligation.

But it’s worse than than. Nato’s biggest weakness is its governance structure, which requires unanimity and consensus in major decisions. This is flagrantly at odds with one of the principles of war–unity of command–and makes Nato decision making cumbersome and driven by the least common denominator. Nato’s governance, in other words, makes it all too easy for an adversary to get inside its decision loop.

Coalitions are always militarily problematic: Napoleon allegedly rejoiced at the news that another nation had joined one of the coalitions against him. Nato’s everybody gets a vote and a trophy philosophy aggravates the inherent problems in military coalitions.

Put differently, decision making power in Nato bears no relationship to contribution and capability. This is a recipe for dysfunction.

So what is the point of adding yet another non-contributor (population 620K!) whose consent is required to undertake anything of importance? This is madness.

It is especially insane when one considers that Montenegro is a Slavic country with longstanding ties to Russia, and in which Russia has a paternalistic interest. Parliamentary elections last year were extremely contentious, with the pro-western incumbents barely hanging on. Post-election, there were allegations of an attempted coup engineered by the Russians. The country is extraordinarily corrupt. All of which means that if you are concerned about Russia undermining Nato, Montenegro is the last country you would want to admit. It is vulnerable to being suborned by Russia. Outside of Nato-who cares what Russia does there? Inside of Nato-that is a serious concern, especially given the nature of Nato governance.

But apparently current Nato members believe that it would be really cool to collect the entire set of European countries: frankly, I can think of no other justification. There is no better illustration of how Nato has lost its way, its strategic purpose, and its ability to think critically.

Now Trump’s particular objection (that Montenegrins are excitable types who might trigger WWIII) was typically Trumpian, in that it was a rather bizarre thought process/formulation that ultimately led to the right conclusion: it makes no sense to include Montenegro in Nato, and doing so can only cause trouble.  Arriving at the correct conclusion based on fractured reasoning–or a fractured articulation of the reasoning–usually occurs only by accident, but it happens enough with Trump that it is unlikely to be totally accidental.  But given that the establishment places undue emphasis on articulateness and verbal polish, the convoluted explanation completely prevents people from taking the conclusion seriously–in part because they are too busy freaking out.

Something that I pointed out in my post goes double–or triple–today.  Simultaneously freaking out about the existential threat posed by Russia and the outrage of objecting to including Montenegro in Nato is utterly illogical to the point of idiocy, and no amount of verbal acuity is going to change that fundamental fact.  That circle cannot be squared.

So here’s what we have on offer: articulate and invariably wildly wrong, or wildly inarticulate and sometimes right, especially on big issues.

Print Friendly, PDF & Email

June 6, 2018

Putting Germany First

Filed under: History,Politics,Russia — The Professor @ 1:24 pm

Angela Merkel is set to challenge Donald Trump’s America First agenda at the G-7, presumably to the strains of Deutschland über alles.

This is just another illustration of Germany’s utter lack of self-awareness, because criticizing America First is rather jarring coming from Merkel and her country’s political elite, which espouses Germany First in all but the slogan.  But actions speak louder than words.

Consider the record of the last few weeks.  The German elite threw an absolute tantrum at the prospect of an anti-EU government in Italy, and strongly backed the Italian president when he rejected such a government.  The German budget minister, Guenther Oettinger said “The markets will teach the Italians to vote for the right thing.”

This was yet further evidence of German tone-deafness, because the backlash against his remark, and the real possibility that the Italian reaction would be to have another vote that would strengthen the populists even more, unleashed another market meltdown. This forced the EU, led by Jean-Claude Juncker, to go into damage control mode and force Oettinger to apologize and to get German politicians to put a cork in it generally, lest they do even more damage.

Oettinger, in other words, had committed a gaffe.  That is, he said exactly what he really believed–and you know that the German establishment believes exactly the same.

Another case in point.  Completely oblivious to the optics of Germany and Russia cooperating to benefit at the expense of the Poles (e.g., the three partitions, Molotov-Ribbentrop), Merkel and Germany are unwilling to give the time of day to the Poles’ objections to the Nord Stream II pipeline. Germany has also been extremely critical of Poland’s democratically elected government, and is leading the charge in the EU to cut aid to Poland (and Hungary) for “violating the rule of law.” Like the Italians, the Poles apparently just got it wrong when they voted and are in need to Teutonic guidance.

Altogether now: “Deutschland, Deutschland über alles, Über alles in der Welt . . . ”

I’ve already mentioned in a previous post the obliviousness of Germany’s anger at Trump for interfering with its ability to do business with a state that has vowed-repeatedly-to exterminate Israel.  Yes, Angela did criticize Khamenei’s characterization of Israel as a “cancerous tumor” that Iran would eliminate, but again, actions speak louder than words.  Germany’s preferred policy–a continuation of the JCPOA, with a bonanza of European (and especially German) investment in and trade with Iran-would do far more to assist Iran in realizing its objective than Merkel’s words will impede it.

Merkel is apparently of the belief that she’s not advancing German interests.  Oh, no! She’s the defender of the “liberal international order”:

Chancellor Angela Merkel of Germany told Mr. Obama that she felt more obliged to run for another term because of Mr. Trump’s election to defend the liberal international order. When they parted for the final time, Ms. Merkel had a single tear in her eye. “She’s all alone,” Mr. Obama noted.

What self-sacrifice!

Tell me: just exactly where does Iran fit into the “liberal international order”? Russia? China? All of these are avowedly opposed to that order, and say so at every opportunity.  All are clearly revisionist powers. But in her hatred for Trump (and likely for the US generally), Merkel is more than willing to reach out to them.  Subjectively, Angela is all about the “liberal international order.” Objectively, quite the opposite.

You may dislike Trump’s America First/MAGA agenda and rhetoric.  But it does have one thing all over Merkel’s: honesty.

Print Friendly, PDF & Email

May 24, 2018

Gazprom and Its Connected Contractors: The Credit Mobilier Scheme, With Russian Variations

Filed under: Commodities,Economics,Energy,History,Russia — The Professor @ 6:05 pm

A couple of SWP friends were kind enough to send me a copy of the swan song of one Alex Fak, an erstwhile senior analyst at Sberbank.  Alex lost his job because he committed a mortal sin: telling the truth, in this instance about the monstrosity that I have savaged for years–Gazprom.

Alex said that the oft-heard question “why does Gazprom do such stupid things?” is off base because it presumes that the company is run in the interest of shareholders: if it were, its unmatched record of value destruction would indeed be stupid.  However, Mr. Fax opined that the company’s actions over the decades are definitely not stupid if you evaluate them from the perspective of its contractors, who make massive amounts of money building obscenely negative NPV projects.

Why does this persist, in the Putin era, which allegedly cracked down on oligarchic thievery? Well, one reason is that the biggest contractors happen to be owned by–wait for it–the two biggest friends of Vova: Gennady Timchenko (a hockey buddy) and Arkady Rotenberg (a judo buddy).*  Putin did not eliminate oligarchs, so much as replace them with his cronies.  Calling out such connected men by name is no doubt why Mr. Fax is an ex-Sberbank analyst.  And saying this kind of thing puts him at risk of being an ex-person.

The Gazprom MO described by Mr. Fak  represents a continuation of, and a mega-sizing of, the bizness model of the 1990s, when the “red directors” of state-owned firms tunneled out huge amounts of funds by having their firms buy supplies and services at seriously inflated prices from firms owned by their relatives.

Indeed, in the pre-Cambrian days of this blog–2006(!)–I hypothesized that Gazprom and its contractors were in effect a Russian version of Credit Mobilier, the construction firm that the Union Pacific hired to build the railroad.

The WaPo article also mentions that Gazprom’s pipeline construction costs are two to three times industry norms. To me this suggests a Credit Mobilier-Union Pacific type situation, where inflated prices for materials and equipment flow into the pockets of companies owned by Gazprom managers. Just thinkin’.

Thomas C. Durant was the president of the Union Pacific–and the major shareholder in Credit Mobilier.  The UP paid Credit Mobilier around $94 million, and Credit Mobilier incurred only about $50 million in costs to build the UP.   The Gazprom arrangement is somewhat different given that neither Timchenko nor Rotenberg are executives at the Russian gas giant, but the basic idea is very similar. (I also noted early on that Transneft, the oil pipeline monopoly, operates on the same model.)  Gazprom and its contractors operate on the Credit Mobilier model, with Russian variations.

Once upon a time Gazprom CEO Alexei Miller boasted that he would make Gazprom the world’s first trillion dollar company.  Today it’s market cap is south of $55 billion.  Hey! anybody can be off by two orders of magnitude, right?

This is not surprising, because maximizing value to shareholders is not, nor has it ever been, the objective of Gazprom.  The objective is, and always has been, to divert resources to the politically connected via wasteful capital expenditures (that happen to be the revenues of the likes of Timchenko and Rotenberg).  Alex Fak understood this, and paid the price for shouting that the emperor had no clothes.

Both Gazprom and Rosneft are world leaders in destroying value, rather than creating it.  But this is a feature, not a bug, given the natural state political economy of Russia, which prioritizes rent creation and redistribution to the elite. And this is precisely why Russia’s pretensions to great power status rest on economic quicksand.  That should be blindingly obvious, and I am sure that Putin understands this at some level.  But revealed preference suggests that he values enriching his friends more than implementing the economic changes that would make his nation economically and militarily competitive.

*The sums tunneled from Gazprom to Timchenko make me laugh when I think about the oft-repeated allegation that oil trader Gunvor (half-owned by Timchenko) was a source of massive personal wealth for Putin (via Timchenko).  There was much more money to be made much closer to home, and completely outside the scrutiny of bankers and regulators.

Print Friendly, PDF & Email

May 15, 2018

Merkel Seems Intent on Proving Churchill (“Germany Is Either At Your Feet or At Your Throat”) Right

Filed under: History,Military,Politics — The Professor @ 6:25 pm

The political and commercial elite in Germany generally, and Angela Merkel in particular, are having quite the meltdown of late.  Angela angrily said that Germany would no longer hold back its anger against the United States. And a mere few days after lamenting that Europe could no longer depend on the US to defend it, Merkel huffily said Germany would not comply with Trump’s “demand” that it increase its defense spending.

The proximate cause of Merkel’s rage was Trump’s decision to withdraw from the Iran “deal”–a secretly negotiated, and largely undisclosed, transaction negotiated between Obama and the mullahs, never submitted for ratification, and which therefore is a legal nullity insofar as the US is concerned.  Obama refused to formalize it because he knew such an attempt would fail, but figured that it would live on because Hillary would succeed him.  Ah, Barack, the best laid plans, eh? Your personal agreement as president could be undone by your successor, and with the same effort that was exerted to give it the force of law: that being none whatsoever.

Germany is particularly distressed at the prospect of losing investment in and trading with Iran.  Even if Europe does not reimpose sanctions, it knows that is irrelevant because the secondary US sanctions of the kind that cost BNP Paribas a cool $9 billion, and risk destroying Rusal, make it suicidal for any European company to deal with any Iranian entity the US sanctions.

One reason that Merkel, and other Europeans, are beside themselves is that their utter impotence is exposed.  They pretend as if they are an independent geopolitical force, but can act only at the sufferance of the US.   Being exposed as powerless and subordinate does breed rage, no?

The evidence of this is all around, both in Trump’s punitive actions (the sanctions on Rusal or ZTE, for instance), and in his proffers of mercy (again to Rusal or ZTE).  Mercy is the prerogative of the powerful: masters can extend mercy, and doing so is the most powerful demonstration thereof.

This whole episode also demonstrates the irrelevance of the Europeans to the process from its beginning.  What is happening now demonstrates that German, French, and British participation was utterly irrelevant to imposing economic hardship on the mullahs.  The US could have–as it is doing now–unilaterally deterred the Europeans from offering Iran aid and comfort.  Including them only led to a more Iran-friendly deal.  (Actually, it just basically cheer-led for Obama’s Iran friendly deal, because he was about as friendly as could be imagined to the mullahs.)

It must also be noted that the German posture towards Iran is beyond unseemly, given Germany’s history.  The moral obtuseness of Germany, of all nations, panting after the business of a nation that has vowed to destroy Israel is mind boggling.

It is especially mind boggling given the German predilection for moral preening, and their tendency to lecture all about their moral superiority.

If you think this is too harsh, consider the fact that Germany’s Incitement to Hatred law (i.e., its Holocaust Denial law) makes it a felony punishable by five years imprisonment for those who:

  1. incites hatred against a national, racial, religious group or a group defined by their ethnic origins, against segments of the population or individuals because of their belonging to one of the aforementioned groups or segments of the population or calls for violent or arbitrary measures against them; or
  2. assaults the human dignity of others by insulting, maliciously maligning an aforementioned group, segments of the population or individuals because of their belonging to one of the aforementioned groups or segments of the population, or defaming segments of the population,

So, if the mullahs did in Germany what they do in Iran on a daily basis, they’d be in the slammer for a nickel.  But they’re OK to do business with, even though they have far more power to act on their threats than some skinhead in Leipzig. AfD is beyond the pale, but the mullahs–now there’s somebody to do business with!

Got it.

As for Merkel’s threats to show her displeasure–who’s stopping you? Go ahead.  Act like any respectable Resistance member. Stomp your feet.  Roll around on the floor screaming.  Hold your breath until your face turns blue.

I won’t say that it won’t have any effect on me–because I’ll genuinely enjoy the spectacle, primarily because it just makes all the more clear your impotence.

As Putin is fond of saying: the dog barks, but the caravan moves on.

As for Trump’s “demand” regarding defense spending.  Um, this was a commitment that Germany voluntarily made to Nato, on more than one occasion long before Trump came to office.  So I guess it’s utterly outrageous for the US to walk away from a deal with the mullahs that did not involve the imprimatur of America’s designated representative body (the Senate), but it’s totally OK for Germany to stiff the US and other Nato allies–all European, mind you–because they are just too fucking cheap (despite having the healthiest fiscal condition of any large nation).  (I further note that Germany is more than happy to “stitch up” (Tim Newman’s phrase) its European confreres when there’s money to be made, kumbaya rhetoric notwithstanding.)

Churchill came close to the truth when he said that the Germans were either at your feet or at your throat.  They certainly go for the throat of the weaker members of the EU, and now at the UK for having the audacity to leave. These days, however, they don’t have the might to tear at the US’s throat, their presumptions notwithstanding.  So while they practice proskynesis at Persian feet, the best they can muster is to nip at Donald Trump’s ankles.

Print Friendly, PDF & Email

Next Page »

Powered by WordPress