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What Do Trump and Marx Have in Common? - The New York Times - 0 views

  • How was anger hijacked?
  • In its pure form, anger is a wonderful force of change.
  • Karl Marx was a Wutbürger. So were Montesquieu, William Wilberforce, the Rev. Dr. Martin Luther King Jr.
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  • Globalization and its masters have capitalized on enormous pay gaps between West and East, at a huge profit for them, and huge cost to others.
  • Unfortunately, a lack of maturity and prudence today exists among not just the new populist class, but parts of the political establishment
  • . A growing number of voters are going into meltdown because they believe that politicians — and journalists — don’t see what they see.
  • Sadly, the leaders of today’s Wutbürger movements never grasped the difference between anger driven by righteousness and anger driven by hate.
  • The upper class has gained much more from the internationalization of trade and finances than the working class has, often in obscene ways.
  • Bankers get bonuses despite making idiotic decisions that trigger staggering losses.
  • Giant enterprises like Facebook or Apple pay minimal taxes, while blue-collar workers have to labor harder — even taking a second or third job — to maintain their standard of living.
  • In Germany a recent poll showed that only 14 percent of the citizens trusted the politicians. This is an alarming figure, in a country where faith in a progressive, democratic government has been a cornerstone of our postwar peace.
  • Amid their mutual finger-pointing, neither populist nor established parties acknowledge that both are squandering people’s anger, either by turning this anger into counterproductive hatred or by denouncing and dismissing it.
  • Mrs. Clinton has the chance to change, by leading a political establishment that examines and processes anger instead of merely producing and dismissing it
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Why the Economy Doesn't Roar Anymore - WSJ - 1 views

  • The U.S. presidential candidates have made the usual pile of promises, none more predictable than their pledge to make the U.S. economy grow faster. With the economy struggling to expand at 2% a year, they would have us believe that 3%, 4% or even 5% growth is within reach.
  • But of all the promises uttered by Donald Trump and Hillary Clinton over the course of this disheartening campaign, none will be tougher to keep. Whoever sits in the Oval Office next year will swiftly find that faster productivity growth—the key to faster economic growth—isn’t something a president can decree.
  • It might be wiser to accept the truth: The U.S. economy isn’t behaving badly. It is just being ordinary.
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  • Historically, boom times are the exception, not the norm.
  • Over the past two centuries, per capita incomes in all advanced economies, from Sweden to Japan, have grown at compound rates of around 1.5% to 2% a year
  • these distinctly non-euphoric averages mean that most of the time, over the long sweep of history, people’s incomes typically take about 40 years to double.
  • looking from one year to the next, the improvements in living standards that come from higher incomes are glacial. The data may show that life is getting better, but average families feel no reason to break out the champagne.
  • that is no longer good enough. Americans expect the economy to be buoyant, not boring. Yet this expectation is shaped not by prosaic economic realities but by a most unusual period in history: the quarter-century that began in the ashes of World War II, when the world economy performed better than at any time before or since.
  • The Golden Age was the first sustained period of economic growth in most countries since the 1920s. But it was built on far more than just pent-up demand and the stimulus of the postwar baby boom. Unprecedented productivity growth around the world made the Golden Age possible. In the 25 years that ended in 1973, the amount produced in an hour of work roughly doubled in the U.S. and Canada, tripled in Europe and quintupled in Japan.
  • Many factors played a role in this achievement.
  • The workforce everywhere became vastly more educated.
  • As millions of laborers shifted from tending sheep and hoeing potatoes to working in factories and construction sites, they could create far more economic value.
  • New motorways boosted productivity in the transportation sector by letting truck drivers cover longer distances with larger vehicles. Faster ground transportation made it practical, in turn, for farms and factories to expand to sell not just locally but regionally or nationally, abandoning craft methods in favor of machinery that could produce more goods at lower cost.
  • Six rounds of tariff reductions brought a massive increase in cross-border trade, putting even stronger competitive pressure on manufacturers to become more efficient.
  • Above all, technological innovation helped to create new products and offered better ways for workers to do their jobs.
  • The 1973 oil crisis meant more than just gasoline lines and lowered thermostats. It shocked the world economy.
  • But it wasn’t the price of gasoline that brought the long run of global prosperity to an end. It just diverted attention from a more fundamental problem: Productivity growth had slowed sharply.
  • The consequences of the productivity bust were severe. Full employment vanished. It would be 24 years before the U.S. unemployment rate would again reach the low levels of late 1973
  • and the infinitesimal unemployment rates in France, Germany and Japan would never be reached again. Through the rest of the 20th century, the jobless rate in 28 wealthy economies would average nearly 7%.
  • the world’s overall economic growth rate dropped from 4.9% a year from 1951 through 1973 to an average of just 3.1% for the balance of the century.
  • With economic planners and central bankers unable to steady their economies, voters turned sharply to the right
  • Conservative politicians such as Margaret Thatcher in the U.K., Ronald Reagan in the U.S. and Helmut Kohl in West Germany swept into power, promising that freer markets and smaller government would reverse the decline, spur productivity and restore rapid growth.
  • But these leaders’ policies—deregulation, privatization, lower tax rates, balanced budgets and rigid rules for monetary policy—proved no more successful at boosting productivity than the statist policies that had preceded them
  • Some insist that the conservative revolution stimulated an economic renaissance, but the facts say otherwise: Great Britain’s productivity grew far more slowly under Thatcher’s rule than during the miserable 1970s, and Reagan’s supply-side tax cuts brought no productivity improvement at all.
  • It is tempting to think that we know how to do better, that there is some secret sauce that governments can ladle out to make economies grow faster than the norm. But despite glib talk about “pro-growth” economic policies, productivity growth is something over which governments have very little control
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Donald Trump and the end of history - The Washington Post - 0 views

  • Fukuyama, you see, believed that just because we'd reached the end of history didn't mean we'd stay in the end of history. That peace and prosperity might not be enough for some people who would, "struggle for the sake of struggle" simply "out of a certain boredom" from living in a world that doesn't seem to have meaning or identity any more.
  • the white working class is letting out a wail across the Western world against a political system they don't think recognizes them, and a society they don't recognize themselves. Add in the monotony of day-to-day life—why not smash it up just to see what happens?—and you've got a global revolt against the global order.
  • the first 25 years of the postwar liberal order had maybe the best and most broadly-shared growth in all of human history. We built the UN to keep the peace, NATO to defend Europe, the IMF to help countries out of economic trouble, and a middle class that, if you were white, got the help it needed to own a home and go to college.
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  • Really, though, it's white men who are the ones rebelling against an economy that they feel like devalues their work, against a culture that they fear is devaluing their once-preeminent place in it, and against a mundane existence that devalues any kind of meaning.
  • Productivity growth stalled in the 1970s, and, at least in the United States, what economic growth there was overwhelmingly accrued to the top 1 percent in the 1980s and beyond. Part of this was due to Western workers having to compete with billions of Chinese, Indian, and Indonesian ones after the Berlin Wall came down. An even bigger part was good-paying jobs being automated into obsolescence. And the rest was policy—tax cuts for the rich, deunionization for the rest, and deregulation for Wall Street—which is why inflation-adjusted median incomes stagnated even more in the U.S. than in Europe
  • Trump supporters aren't any more likely to have come from places that have lost a lot of manufacturing jobs or have a lot of immigrants. The opposite, actually. Nor are they just people who are barely getting by. They tend to be a rung or two above that—decently middle class or more—who nonetheless might feel economically insecure because they haven't gotten a raise in a long time, and see everyone else around them doing even worse.
  • It's no surprise that these kind of economic grievances can ratchet up racial ones.
  • as Harvard economist Ben Friedman found in The Moral Consequences of Economic Growth, "a rising standard of living for the clear majority of citizens more often than not fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness, and dedication to democracy." So a stagnant one can make people meaner, less generous, and more suspicious of people who don't sound, look, or worship like they do.
  • it's important to point out that a weak economy isn't necessary for this kind of backlash. Any time white people—and really white men—feel like their position in society is being challenged in any way, this has happened. Like it did, for example, even when the economy was booming during the civil rights movement.
  • The fact is that a lot of white people don't like being around minorities who haven't assimilated, and they don't want to assimilate to a culture where they'll soon be a minority themselves
  • even white liberals who aren't used to hearing Spanish in public became much more opposed to increased immigration and much less in favor of letting kids who were born here stay here if their parents were undocumented once they were exposed to Spanish-speakers during their morning commutes. Which seems to explain why, as the Wall Street Journal found, the counties that experienced the fastest minority growth between 2000 and today voted so heavily for Trump.
  • As researchers Maureen Craig and Jennifer Richeson found, all you have to do is remind them that the country is on track to being majority-minority to make them endorse these kind of racially conservative policies.
  • But it's not just minorities who white men are worried about. It's women too—or one woman in particular.
  • There's still a socially-accepted hostility to women being in charge, a fear that this would make a man not a man, and a feeling that women shouldn't even try to act like men. Researchers Tyler Okimoto and Victoria Brescall found that people experienced "moral outrage" when they were told that a hypothetical female politician was ambitious, but nothing when they were told a male was.
  • For a lot of people, there is no great cause, no great conflict, no great meaning to it all. The big battles have already been won, and now there are just bills to pay and weekends to look forward to.  The problem with this, Fukuyama wrote, is that "if men cannot struggle on behalf of a just cause because the just cause was victorious in an earlier generation, then they will struggle against the just cause."
  • it's something that his supporters don't seem to mind. Earlier this the year, 84 percent of them said that "what we need is a leader who will say or do anything to solve America's problems." Constitutional conservatism this is not.
  • It's not clear what is to be done. It's true that for almost 35 years now the liberal international order has failed to give rich world workers the rising standard of living they expect. Insofar as that was what was motivating Trump's supporters, we could redistribute more to try to make the economy work for everyone. But Europe already does that, and it hasn't stopped the rise of right-wing nationalists there.
  • But insofar as Trump's voters were really driven by a fear of a future where white men are no longer politically, economically, and culturally dominant, there's nothing we should do. Some things should not be accommodated
  • It's possible that 2016 will be our own 1914. Not that we'll descend into a paroxysm of suicidal violence, but that a world that was defined by openness might give way to one that's not.
  • For the last 70 years, liberal democracy has guaranteed people's individual rights, and the U.S. has guaranteed liberal democracy's right to exist. All of that is doubt now.
  • Whatever its flaws, the liberal international order gave us peace and prosperity on a scale heretofore unknown in human history. And perhaps in our future too.
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Donald Trump just forfeited in his first fight with China - The Washington Post - 0 views

  • the real reason to support the TPP wasn't economics so much as geopolitics. It was about keeping an economic foot firmly planted in China's backyard, and writing the trade rules so they couldn't.
  • this kind of logic was a part of almost all our trade deals the past 70 years. Initially, these were about setting a system to promote prosperity abroad so fragile postwar democracies could resist Communist pressure. But even after the Berlin Wall came down, they were still a way to not only open up markets, but also reward countries for reforming their economies like we wanted.
  • that was why NAFTA made more sense than any economic model would have told you. If we rejected Mexico's liberalizing government, it might have collapsed — and an anti-American one could have taken its place.
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  • he simple story is that we've already pushed tariffs about as low as they can go, and all that's left is to negotiate over non-tariff trade barriers
  • NAFTA really did move a decent chunk of our manufacturing base south of the border
  • And granting China Permanent Normal Trade Relations status in 2000 really did seem to give companies the confidence they needed to shift production there on a far larger scale than they had before, since they no longer had to worry about the risk of tariffs rising.
  • the era of big trade deals is over. And that was true even before Trump announced his candidacy before a raucous crowd of paid actors.
  • that's not to say that all trade deals are economically irrelevant. They aren't.
  • the problem is that those sorts of things — say, rules about intellectual property or government procurement — are what we used to think of as the sole province of domestic policy.
  • Which is why they can feel like they're infringing on a country's sovereignty.
  • The result is that these new trade deals are more difficult politically and less useful economically than previous ones.
  • what's changing with Trump is that we aren't even trying to lead on trade anymore. He doesn't see these deals as a way to win friends and influence people, but rather to win manufacturing jobs and influence his approval rating.
  • That might sound like common sense to some people, but it does leave an opening for other countries — yes, China — to negotiate where we're not. The risk, then, is that globalization might not proceed on our terms or with our values.
  • there's a greater danger. It's not that Trump won't make further progress on trade, but rather will backtrack on where we are. New trade deals might not help much, but unraveling old ones would hurt. At that point, we wouldn't have the luxury of worrying about whose globalization we had. The answer would be nobody's. And the whole world would be a little bit poorer.
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Obama in Hiroshima: Why It's So Hard for Countries to Apologize - The Atlantic - 0 views

  • When Barack Obama goes to Hiroshima on May 27, becoming the first sitting U.S. president to visit the site of the world’s first nuclear attack, he will not apologize on behalf of his country for carrying out that strike 71 years ago.
  • But he will affirm America’s “moral responsibility,” as the only nation to have used nuclear weapons, to prevent their future use. He will recognize the painful past, but he won’t revisit it. When it’s all over, we still won’t know whether or not he thinks there’s something about the atomic bombings to be sorry for.
  • This is especially true with the Hiroshima bombing, where the competing stories about what happened are so morally complex. Nevertheless, political apologies do occur.
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  • Lind compared Trudeau’s statement to President Bill Clinton’s apology for America’s failure to intervene in the Rwandan Genocide. Clinton was saying sorry for inaction rather than action, she said, and there was no American constituency to be offended by his expression of regret.
  • Germany’s various apologies for the crimes of the Nazis, Lind added, are the shining exception in international affairs, not the rule: “The world we live in is one in which countries routinely whitewash their past violence. They routinely even lie about their past violence. They sometimes glorify their past violence.”
  • ut Lind has found that apologies and reparations for those wrongs can be damaging as well, since such actions are likely to polarize people within those countries. The best approach, she says, is recognizing and remembering wrongs in ways that unify rather than divide—that emphasize shared suffering, not perpetrators and victims.
  • “Liberals have this idea that the way to be a strong nation is to be transparent about the past, and to be self-critical, and to constantly question your leaders, and constantly ask, ‘Are we living up to our own values?’ And so this kind of historical reckoning with the past [that Obama is undertaking in Hiroshima]—they love that
  • “For most Japanese, Obama’s visit actually fits with the Japanese story about the bomb—that the atomic bomb gave Japan its postwar mission for peace,”
  • Politics. Everyone has their own story.
  • The vast majority of Japanese don’t think the atomic bombings were justified, and that belief has only become more widespread over time. But Japanese leaders have not demanded that the U.S. government apologize for the attacks, in part because they don’t want to jeopardize the flourishing U.S.-Japanese alliance or encourage calls for Japan to apologize for its own wartime aggression.
  • This lack of a demand from the Japanese, Lind argues, has created the friendly space in which a visit like Obama’s can take place—and in which the two countries can adopt a common narrative about the atomic bombings.
  • Lind compared the situation to the way in which American and European leaders, including German leaders, now gather in Normandy to commemorate the Allied invasion of Nazi-occupied France
  • Conservatives, meanwhile, “say that national strength comes from national unity, and national unity is best served by instilling pride in people, and pride comes from remembering the really great things that we’ve done, and remembering what’s different and great about America. … And so they would say, ‘What are you doing talking about all the people we killed? Why aren’t you celebrating that we brought democracy to Japan?
  • that the atomic bomb ended the war and saved American lives. So the Japanese bomb story begins in 1945 and goes forward in the mission for peace. The American bomb story ends in ’45. Those are two separate stories. They will not cross. And the president’s position that the lesson of the past is for a non-nuclear future, it’s almost like a third story.”
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    Another view on reflecting about Hrioshima
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Obama's Hiroshima Visit Is a Reminder that Atomic Bombs Weren't What Won the War - 0 views

  • opportunity to reconsider some of the myths surrounding the historic decision to use the atomic bomb
  • loss of 135,000 people made little impact on the Japanese military
  • Japan had been willing to sacrifice city after city to American conventional bombing in the months leading up to Hiroshima
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  • The historical record also makes clear that American leaders fully understood this.
  • Japan was likely to surrender with the sole proviso that Japan be allowed to keep its emperor in some figurehead role.
  • The U.S. military had long planned to keep the emperor in such a role to help control Japan during the postwar occupation.
  • they too judged that this would end the war.
  • the United States allowed Japan to keep its emperor as a way to help control Japan during the occupation
  • the use of this barbarous weapon at Hiroshima and Nagasaki was of no material assistance in our war against Japan
  • What can be proved is that the president was advised that the assurances were, in fact, likely to end the war without the bombs
  • So there was plenty time to use the bombs if Japan did not surrender once assurances for the emperor were given.
  • Close attention to some key dates is also instructive.
  • the Red Army attack on or around Aug. 8. Hiroshima was destroyed on Aug. 6 and Nagasaki on Aug. 9.
  • What really happened in the days leading up to the decision to destroy Hiroshima and Nagasaki may never be known.
  • The only serious answer to the threat of nuclear weapons is an all-out effort to abolish them from arsenals throughout the world
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"Pretty Tame" - 0 views

  • Short answer: This is pretty tame compared to 1968. I’ll try to avoid the “back in my day, sonny” routine, but here are some things to consider.
  • 1) We were at war.
  • Just about everybody was as crazy as a teapartier about the war, one way or the other.
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  • 2) Every single day there were dozens of demonstrations going on around the country somewhere or another, some big, some small. But they weren’t demonstrations like today, they were confrontations.
  • 3) Bernie v Hillary? Small potatoes. Half of dems despised LBJ; I would say a lot worse than how Dems felt about GWB (yes).
  • Whatever some crackpot percentage of conservatives think about Hillary, multiply it by 10 to get a sense of how half of the country (many Republicans, too) felt about Dick.
  • 4) Trump? People claim Trump is like Wallace. In ’68 there was actual Wallace, and Trump is a pussycat compared to him
  • Race relations aren’t great but they are indisputably improving over the years. Then: No one really knew how things would break. The south was still very very raw and not far removed from lynchings, half of the public was proudly & openly racist and the good half mostly thought “gee, why are those negroes so angry all the time.”
  • You hear nitwit RWers howl that BLM is like the Black Panthers; back then were the actual Black Panthers, and whatever we think today of their size & scope, they were openly espousing violence and walking Main Streets (esp in the lax gun law West) armed to the teeth.
  • 6) And then of course there were MLK and RFK killed within 2 months of each other.
  • 7) Finally, *your* biz. While we all blab about being media saturated today, you can avoid news you don’t like if that’s what you want.
  • In ’68, people over 30 (who lived thru the golden postwar years) were barraged with changes & uncertainty unlike anything they had ever imagined -- re feelings about the country, about their leaders, about the military & our place in the world, about women’s roles, about civil rights, etc., etc.
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Scathing report on Blair's Iraq War role prompts contrition, defiance and a reckoning -... - 0 views

  • With exacting detail, the report catalogues a succession of failures.
  • British intelligence painted a flawed picture of Iraqi military capacity, with agencies never doubting the existence of WMDs. In fact, the report concluded, Iraq posed “no imminent threat” to Britain. In making their case to the public, Blair and other British officials described the case against Hussein “with a certainty that was not justified.”
  • In their private deliberations, they ignored warnings that the invasion of Iraq could be a boon to Islamist extremists. Groups such as al-Qaeda gained key footholds amid Iraq’s chaos, and militant offshoots later became the foundation for the Islamic State
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  • The British relied almost exclusively on their American counterparts for postwar planning, then failed to deliver the manpower and resources needed to make good on promises to transform Iraq into a functioning, stable democracy.
  • Yet he stood firm on the question of whether he had deceived the public, saying he had taken the country to war “in good faith,” and that the report had validated his contention that “there were no lies” from his government.
  • Speaking in the House of Commons, Cameron urged politicians to learn the lessons of the inquiry, the first being that “taking the country to war should always be a last resort.”
  • The report does not have a direct bearing on the country’s current political chaos, but it is likely to revive for many Britons memories of a rush to war that has come to epitomize betrayal by the nation’s elites. The cynicism of British voters that the Iraq War helped to spawn was on display last month, when many seemed to blithely ignore the warnings of experts that a British exit from the E.U. could spark economic and political chaos.
  • the reaction in Iraq was relatively muted among people too focused on daily survival to worry about another report documenting the West’s failures in their country. After 13 years of violence, the war to depose Hussein hardly seems worth it even to those who celebrated his fall. world europe Get 2016 Olympics updates by email Our best news and analysis from Rio, delivered to your inbox. post_newsletter333 magnet-olympics2016 true endOfArticle false
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The Trump-Berlusconi Syndrome - The New York Times - 0 views

  • Within a decade or so, in 1994, Berlusconi was prime minister, at the head of a right-of-center political party he’d concocted the previous year, thrust to power on the basis that he would break with Italy’s dysfunctional politics and that, as a self-made billionaire, he knew how to fix problems. He used television unsparingly to buttress his meteoric rise through the wreckage of Italy’s post-1945 political order, which had recently collapsed with the end of the Cold War.
  • Nobody who knows Berlusconi and has watched the rise and rise of Donald Trump can fail to be struck by the parallels. It’s not just the real-estate-to-television path. It’s not just their shared admiration for Vladimir Putin. It’s not just the playboy thing, and obsession with their virility, and smattering of bigotry, and contempt for policy wonks, and reliance on a tell-it-like-it-is tone. It’s not their wealth, nor the media savvy that taught them that nobody ever lost by betting on human stupidity.
  • No, it’s something in the zeitgeist. America is ripe for Trump just as Italy was ripe for Berlusconi. Trump, too, is cutting through a rotten political system in a society where economic frustration at jobs exported to China is high. He is emerging after two lost wars, as American power declines and others strut the global stage, against a backdrop of partisan political paralysis, in a system corrupted by money. To Obama’s Doctrine of Restraint, Trump opposes a Doctrine of Resurgence. To reason, he counters with rage
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  • In the same way, Berlusconi emerged as Italy ceased to be a Cold War pivot and the Christian-Democrat-dominated postwar political alignments imploded. Everything was in flux as the “mani pulite” (clean hands) investigation started by Milan magistrates in 1992 exposed what everyone knew: that graft and corruption were cornerstones of Italian politics. No matter that Berlusconi was also a target of the investigation: He was new, he talked the talk, he would conjure something!
  • the deregulation of broadcast media in the United States and Italy — in contrast to Britain or France or Germany where state media companies still “act as a kind of referee for civil discourse” and “commonly accepted facts” — has fostered the fact-lite free-for-all of “alternate realities” conducive to Trumpism.
  • What Berlusconi teaches is that Trump could go all the way in a nation thirsting for a new politics. The man known as “The Knight” ended up convicted of tax fraud and paying for sex with an underage prostitute — but it took 17 years of intermittent scandal and incompetence, from 1994 to 2011, for Italy to rub the stardust from its eyes.
  • Take note, America, before the die is cast.
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When Did Liberals Become So Unreasonable? - 0 views

  • Liberals are dissatisfied with Obama because liberals, on the whole, are incapable of feeling satisfied with a Democratic president. They can be happy with the idea of a Democratic president—indeed, dancing-in-the-streets delirious—but not with the real thing. The various theories of disconsolate liberals all suffer from a failure to compare Obama with any plausible baseline. Instead they compare Obama with an imaginary president—either an imaginary Obama or a fantasy version of a past president.
  • For almost all of the past 60 years, liberals have been in a near-constant emotional state of despair, punctuated only by brief moments of euphoria and occasional rage. When they’re not in charge, things are so bleak they threaten to move to Canada; it’s almost more excruciating when they do win elections, and their presidents fail in essentially the same ways: He is too accommodating, too timid, too unwilling or unable to inspire the populace.
  • Activists measure progress against the standard of perfection, or at least the most perfect possible choice. Historians gauge progress against what came before it. By that standard, Obama’s first term would indeed seem to qualify as gangsta shit.
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  • His single largest policy accomplishment, the Affordable Care Act, combines two sweeping goals—providing coverage to the uninsured and taming runaway medical-cost inflation—that Democrats have tried and failed to achieve for decades. Likewise, the Recovery Act contained both short-term stimulative measures and increased public investment in infrastructure, green energy, and the like. The Dodd-Frank financial reform, while failing to end the financial industry as we know it, is certainly far from toothless, as measured by the almost fanatical determination of Wall Street and Republicans in Congress to roll it back.
  • Beneath these headline measures is a second tier of accomplishments carrying considerable historic weight. A bailout and deep restructuring of the auto industry that is rapidly being repaid, leaving behind a reinvigorated sector in the place of a devastated Midwest. Race to the Top, which leveraged a small amount of federal seed money into a sweeping national wave of education experiments, arguably the most significant reform of public schooling in the history of the United States. A reform of college loans, saving hundreds of billions of dollars by cutting out private middlemen and redirecting some of the savings toward expanded Pell Grants. Historically large new investments in green energy and the beginning of regulation of greenhouse gases. The Lilly Ledbetter Fair Pay Act for women. Elimination of several wasteful defense programs, equality for gays in the military, and consumer-friendly regulation of food safety, tobacco, and credit cards.
  • Of the postwar presidents, only Johnson exceeds Obama’s domestic record, and Johnson’s successes must be measured against a crushing defeat in Vietnam. Obama, by contrast, has enjoyed a string of foreign-policy successes
  • liberal melancholy hangs not so much on substantive objections but on something more inchoate and emotional: a general feeling that Obama is not Ronald Reagan.
  • In terms of lasting change, Obama probably has matched Reagan—or, at least, he will if he can win reelection and consolidate health-care reform and financial regulation and tilt the Supreme Court further left than he already has.
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Interview with World War II Historian Andrew Roberts - 0 views

  • You write that Hitler's war aims were impossible—how so? The Germans were trying to win a straightforward conventional war and, at the same time, trying to fight an ideological war: a specifically Nazi war as opposed to a German war. I believe that a true German nationalist—Otto von Bismarck, say, or Helmuth von Moltke—could have won the Second World War, because he wouldn't have made the kind of demands of the German military that Hitler did, which was to win a two-front conventional war while at the same time imposing the policies of the "Aryan master race." Those aims were directly in opposition.
  • Could the Nazis have won, had they done something differently? Absolutely. If they had not invaded the Soviet Union in 1941, and if they had instead thrown at the Allies even a fraction of the 3 million men they eventually unleashed against Russia, they would have chased us out of the Middle East and cut off access to 80 percent of the Allies' oil. We simply would not have been able to continue the struggle.
  • Was Hitler solely responsible for Germany's military blunders? No, there were plenty of people to blame. Luftwaffe chief Hermann Göring is a perfect example: He promised Hitler that no Allied bombs would fall on Germany; he promised to destroy the British Expeditionary Force at Dunkirk solely through airpower; he promised to completely supply the German forces at Stalingrad by air. Yet he could not deliver on any of these promises.
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  • In the end, all of these poor military leaders were appointed or promoted by Hitler, many solely because they were Nazis, and that's no way to fight—or win—a war.
  • Who were the most effective combat generals of the war? The Russian Georgy Zhukov, because he was given every impossible task and succeeded at all of them. For Germany, Erich von Manstein, who came up with the "sickle cut" maneuver that in May 1940 defeated France and was the most effective German general on the Eastern Front.
  • The Germans saw the Japanese as adjuncts to the greater effort they were putting in. The Japanese never trusted the Germans; they didn't even tell Berlin they were going to attack Pearl Harbor. Neither country put in the diplomatic work required to really coordinate their efforts. Essentially, the Second World War was two separate conflicts fought simultaneously.
  • The major problem with the historiography of World War II is the Cold War—it was not in the West's postwar interest to acknowledge that it was the Russians who destroyed the Wehrmacht, at an unbelievable cost to themselves. We are just now beginning to acknowledge the Soviet Union's contribution.
  • Statistically, the Eastern Front was where the war was won—out of every five Germans killed in battlefield combat, four died on the Eastern Front
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The Great Stagnation of American Education - NYTimes.com - 0 views

  • For most of American history, parents could expect that their children would, on average, be much better educated than they were. But that is no longer true.
  • From 1891 to 2007, real economic output per person grew at an average rate of 2 percent per year — enough to double every 35 years. The average American was twice as well off in 2007 as in 1972, four times as well off as in 1937, and eight times as well off as in 1902. It’s no coincidence that for eight decades, from 1890 to 1970, educational attainment grew swiftly. But since 1990, that improvement has slowed to a crawl.
  • The premium that employers pay to a college graduate compared with that to a high school graduate has soared since 1970, because of higher demand for technical and communication skills at the top of the scale and a collapse in demand for unskilled and semiskilled workers at the bottom.
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  • Growth in annual average economic output per capita has slowed from the century-long average of 2 percent, to 1.3 percent over the past 25 years, to a mere 0.7 percent over the past decade.
  • The gains in income since the 2007-9 Great Recession have flowed overwhelmingly to those at the top, as has been widely noted. Real median family income was lower last year than in 1998.
  • There are numerous causes of the less-than-satisfying economic growth in America: the retirement of the baby boomers, the withdrawal of working-age men from the labor force, the relentless rise in the inequality of the income distribution and, as I have written about elsewhere, a slowdown in technological innovation.
  • Education deserves particular focus because its effects are so long-lasting. Every high school dropout becomes a worker who likely won’t earn much more than minimum wage, at best, for the rest of his or her life.
  • The surge in high school graduation rates — from less than 10 percent of youth in 1900 to 80 percent by 1970 — was a central driver of 20th-century economic growth. But the percentage of 18-year-olds receiving bona fide high school diplomas fell to 74 percent in 2000
  • the holders of G.E.D.’s performed no better economically than high school dropouts and that the rising share of young people who are in prison rather than in school plays a small but important role in the drop in graduation rates.
  • For most of the postwar period, the G.I. Bill, public and land-grant universities and junior colleges made a low-cost education more accessible in the United States than anywhere in the world. But after leading the world in college completion, America has dropped to 16th.
  • The cost of a university education has risen faster than the rate of inflation for decades. Between 2008 and 2012 state financing for higher education declined by 28 percent
  • Two-year community colleges enroll 42 percent of American undergraduates. The Center on International Education Benchmarking reports that only 13 percent of students in two-year colleges graduate in two years; that figure rises to a still-dismal 28 percent after four year
  • Compared with other nations where students learn several languages and have math homework in elementary school, the American system expects too little. Parental expectations also matter: homework should be emphasized more, and sports less.
  • family breakdown is now biracial.” Among lower-income whites, the proportion of children living with both parents has plummeted over the past half-century
  • research has shown that high-discipline, “no-excuses” charter schools, like those run by the Knowledge Is Power Program and the Harlem Children’s Zone, have erased racial achievement gaps. This model suggests that a complete departure from the traditional public school model, rather than pouring in more money per se, is needed.
  • Lacking in the American system is a well-organized funnel between community colleges and potential blue-collar employers, as in the renowned apprenticeship system in Germany.
  • In Canada, each province manages and finances education at the elementary, secondary and college levels, thus avoiding the inequality inherent in America’s system of local property-tax financing for public schools. Tuition at the University of Toronto was a mere $5,695 for Canadian arts and science undergraduates last year, compared with $37,576 at Harvard. It should not be surprising that the Canadian college completion rate is about 15 percentage points above the American rate.
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Japan to Form Own National Security Council - WSJ.com - 0 views

  • A bill to create a Japanese National Security Council is set to pass in the nation's parliament, as China's rising maritime assertiveness and North Korea's nuclear ambitions give Prime Minister Shinzo Abe greater leeway to tighten his grip on foreign and defense policies.
  • Seen as an important step in Mr. Abe's push for Tokyo to expand its role in regional security, the new council is also viewed as a backdoor for the premier to ramp up Japan's military, which is strictly bound under the nation's postwar constitution to a self-defense role.
  • The idea of creating a U.S.-style NSC has gained traction in recent years as Japan experienced a string of national-security related incidents that prompted it to boost its defense spending and capabilities. These policies have been viewed with caution by Beijing and Seoul amid tensions over historical and territorial issues.
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  • confrontation with Beijing over disputed islands in the East China Sea have created a series of testy situations that has underscored the importance of sound decision-making at the top of the government.
  • Pyongyang's pursuance of its nuclear and ballistic missile programs has also forced Tokyo to confront more urgent weapons threats, adding fuel to Mr. Abe's push to reinterpret the nation's pacifist constitution and lift the self-imposed ban on exercising the right to "collective self defense," or the right to aid allies being attacked.
  • By integrating the flow of information and providing speedy analysis, the NSC hopes to accelerate the prime minister's decision-making process on various issues involving national defense, including foreign military attacks and other serious emergencies.
  • Mr. Abe's plan has faced a fair amount of criticism. A state-secrecy bill that goes hand-in-hand with the draft legislation to enact the NSC has generated widespread concern by those who fear it could infringe on journalistic freedom and the public's right to information.
  • The bill, currently under discussion in parliament, toughens penalties against those who leak sensitive information related to defense, foreign policy, terrorism and other harmful activities, and has grabbed attention in the wake of Edward Snowden's leaking of classified U.S. intelligence information.
  • NSC will function properly and achieve its aims, or lose substance and become another ineffective bureaucratic institution.
  • The creation of the council also coincides with Beijing's plans to establish a similar state security committee that could boost President Xi Jinping's grasp over the military, domestic security and foreign policy as China flexes its military and diplomatic muscle in the region.
  • The NSC will be the control tower for Japan's diplomacy and defense," Mr. Yachi said during a speech he gave in Tokyo earlier this month, explaining that staff will be recruited from the foreign ministry, the police agency and the private sector.
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Why the Rich Are So Much Richer by James Surowiecki | The New York Review of Books - 0 views

  • Historically, inequality was not something that academic economists, at least in the dominant neoclassical tradition, worried much about. Economics was about production and allocation, and the efficient use of scarce resources. It was about increasing the size of the pie, not figuring out how it should be divided.
  • “Of the tendencies that are harmful to sound economics, the most seductive, and…the most poisonous, is to focus on questions of distribution.”
  • Stiglitz argues, what we’re stuck with isn’t really capitalism at all, but rather an “ersatz” version of the system.
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  • Stiglitz has made the case that the rise in inequality in the US, far from being the natural outcome of market forces, has been profoundly shaped by “our policies and our politics,” with disastrous effects on society and the economy as a whole. In a recent report for the Roosevelt Institute called Rewriting the Rules, Stiglitz has laid out a detailed list of reforms that he argues will make it possible to create “an economy that works for everyone.”
  • his entire career in academia has been devoted to showing how markets cannot always be counted on to produce ideal results. In a series of enormously important papers, for which he would eventually win the Nobel Prize, Stiglitz showed how imperfections and asymmetries of information regularly lead markets to results that do not maximize welfare.
  • He also argued that this meant, at least in theory, that well-placed government interventions could help correct these market failures
  • in books like Globalization and Its Discontents (2002) he offered up a stinging critique of the way the US has tried to manage globalization, a critique that made him a cult hero in much of the developing world
  • Stiglitz has been one of the fiercest critics of the way the Eurozone has handled the Greek debt crisis, arguing that the so-called troika’s ideological commitment to austerity and its opposition to serious debt relief have deepened Greece’s economic woes and raised the prospect that that country could face “depression without end.”
  • For Stiglitz, the fight over Greece’s future isn’t just about the right policy. It’s also about “ideology and power.
  • there’s a good case to be made that the sheer amount of rent-seeking in the US economy has expanded over the years. The number of patents is vastly greater than it once was. Copyright terms have gotten longer. Occupational licensing rules (which protect professionals from competition) are far more common. Tepid antitrust enforcement has led to reduced competition in many industries
  • The Great Divide is somewhat fragmented and repetitive, but it has a clear thesis, namely that inequality in the US is not an unfortunate by-product of a well-functioning economy. Instead, the enormous riches at the top of the income ladder are largely the result of the ability of the one percent to manipulate markets and the political process to their own benefit.
  • Inequality obviously has no single definition. As Stiglitz writes:There are so many different parts to America’s inequality: the extremes of income and wealth at the top, the hollowing out of the middle, the increase of poverty at the bottom. Each has its own causes, and needs its own remedies.
  • his preoccupation here is primarily with why the rich today are so much richer than they used to be.
  • the main reason people at the top are so much richer these days than they once were (and so much richer than everyone else) is not that they own so much more capital: it’s that they get paid much more for their work than they once did, while everyone else gets paid about the same, or less
  • while incomes at the top have risen in countries around the world, nowhere have they risen faster than in the US.
  • One oft-heard justification of this phenomenon is that the rich get paid so much more because they are creating so much more value than they once did
  • as companies have gotten bigger, the potential value that CEOs can add has increased as well, driving their pay higher.
  • Stiglitz will have none of this. He sees the boom in the incomes of the one percent as largely the result of what economists call “rent-seeking.”
  • from the perspective of the economy as a whole, rent-seeking is a waste of time and energy. As Stiglitz puts it, the economy suffers when “more efforts go into ‘rent seeking’—getting a larger slice of the country’s economic pie—than into enlarging the size of the pie.”
  • The work of Piketty and his colleague Emmanuel Saez has been instrumental in documenting the rise of income inequality, not just in the US but around the world. Major economic institutions, like the IMF and the OECD, have published studies arguing that inequality, far from enhancing economic growth, actually damages it. And it’s now easy to find discussions of the subject in academic journals.
  • . After all, while pretax inequality is a problem in its own right, what’s most destructive is soaring posttax inequality. And it’s posttax inequality that most distinguishes the US from other developed countries
  • All this rent-seeking, Stiglitz argues, leaves certain industries, like finance and pharmaceuticals, and certain companies within those industries, with an outsized share of the rewards
  • within those companies, the rewards tend to be concentrated as well, thanks to what Stiglitz calls “abuses of corporate governance that lead CEOs to take a disproportionate share of corporate profits” (another form of rent-seeking)
  • This isn’t just bad in some abstract sense, Stiglitz suggests. It also hurts society and the economy
  • It alienates people from the system. And it makes the rich, who are obviously politically influential, less likely to support government investment in public goods (like education and infrastructure) because those goods have little impact on their lives.
  • More interestingly (and more contentiously), Stiglitz argues that inequality does serious damage to economic growth: the more unequal a country becomes, the slower it’s likely to grow. He argues that inequality hurts demand, because rich people consume less of their incomes. It leads to excessive debt, because people feel the need to borrow to make up for their stagnant incomes and keep up with the Joneses. And it promotes financial instability, as central banks try to make up for stagnant incomes by inflating bubbles, which eventually burst
  • exactly why inequality is bad for growth turns out to be hard to pin down—different studies often point to different culprits. And when you look at cross-country comparisons, it turns out to be difficult to prove that there’s a direct connection between inequality and the particular negative factors that Stiglitz cites
  • This doesn’t mean that, as conservative economists once insisted, inequality is good for economic growth. In fact, it’s clear that US-style inequality does not help economies grow faster, and that moving toward more equality will not do any damage
  • Similarly, Stiglitz’s relentless focus on rent-seeking as an explanation of just why the rich have gotten so much richer makes a messy, complicated problem simpler than it is
  • When we talk about the one percent, we’re talking about two groups of people above all: corporate executives and what are called “financial professionals” (these include people who work for banks and the like, but also money managers, financial advisers, and so on)
  • The emblematic figures here are corporate CEOs, whose pay rose 876 percent between 1978 and 2012, and hedge fund managers, some of whom now routinely earn billions of dollars a year
  • Shareholders, meanwhile, had fewer rights and were less active. Since then, we’ve seen a host of reforms that have given shareholders more power and made boards more diverse and independent. If CEO compensation were primarily the result of bad corporate governance, these changes should have had at least some effect. They haven’t. In fact, CEO pay has continued to rise at a brisk rate
  • So what’s really going on? Something much simpler: asset managers are just managing much more money than they used to, because there’s much more capital in the markets than there once was
  • that means that an asset manager today can get paid far better than an asset manager was twenty years ago, even without doing a better job.
  • there’s no convincing evidence that CEOs are any better, in relative terms, than they once were, and plenty of evidence that they are paid more than they need to be, in view of their performance. Similarly, asset managers haven’t gotten better at beating the market.
  • More important, probably, has been the rise of ideological assumptions about the indispensability of CEOs, and changes in social norms that made it seem like executives should take whatever they could get.
  • It actually has important consequences for thinking about how we can best deal with inequality. Strategies for reducing inequality can be generally put into two categories: those that try to improve the pretax distribution of income (this is sometimes called, clunkily, predistribution) and those that use taxes and transfers to change the post-tax distribution of income
  • he has high hopes that better rules, designed to curb rent-seeking, will have a meaningful impact on the pretax distribution of income. Among other things, he wants much tighter regulation of the financial sector
  • t it would be surprising if these rules did all that much to shrink the income of much of the one percent, precisely because improvements in corporate governance and asset managers’ transparency are likely to have a limited effect on CEO salaries and money managers’ compensation.
  • Most importantly, the financial industry is now a much bigger part of the US economy than it was in the 1970s, and for Stiglitz, finance profits are, in large part, the result of what he calls “predatory rent-seeking activities,” including the exploitation of uninformed borrowers and investors, the gaming of regulatory schemes, and the taking of risks for which financial institutions don’t bear the full cost (because the government will bail them out if things go wrong).
  • The redistributive policies Stiglitz advocates look pretty much like what you’d expect. On the tax front, he wants to raise taxes on the highest earners and on capital gains, institute a carbon tax and a financial transactions tax, and cut corporate subsidies
  • It’s also about investing. As he puts it, “If we spent more on education, health, and infrastructure, we would strengthen our economy, now and in the future.” So he wants more investment in schools, infrastructure, and basic research.
  • The core insight of Stiglitz’s research has been that, left on their own, markets are not perfect, and that smart policy can nudge them in better directions.
  • Of course, the political challenge in doing any of this (let alone all of it) is immense, in part because inequality makes it harder to fix inequality. And even for progressives, the very familiarity of the tax-and-transfer agenda may make it seem less appealing.
  • the policies that Stiglitz is calling for are, in their essence, not much different from the policies that shaped the US in the postwar era: high marginal tax rates on the rich and meaningful investment in public infrastructure, education, and technology. Yet there’s a reason people have never stopped pushing for those policies: they worked
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As Putin Talks More Missiles and Might, Cost Tells Another Story - The New York Times - 0 views

  • “Everybody should understand that we are living in a totally different world than two years ago,” said Alexander M. Golts, an independent Russian military analyst.“In that world, which we lost, it was possible to organize your security with treaties, with mutual-trust measures,” he said. “Now we have come to an absolutely different situation, where the general way to ensure your security is military deterrence.” Advertisement Continue reading the main story
  • “The Russian Army is returning to normal combat activities and training,” said Igor Korotchenko, the editor in chief of National Defense, a monthly Russian magazine. “We are doing exactly what our Western partners are doing.”
  • From a Western point of view, Russia shattered the postwar, and certainly post-Cold War, European order by seizing Crimea and destabilizing Ukraine with a not-terribly-covert military program. That left former Soviet client states next door feeling vulnerable.
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  • “Russia has been making aggressive statements, insisting that it lives in a world of mutual military deterrence, while thinking that the West will not pay attention,” Mr. Golts said.But the West paid attention, he said, and Russia is not ready. It is one thing to use a force of up to 100,000 well-trained, well-booted soldiers to seize Crimea or even to destabilize a neighbor, but it is a very different matter to take on NATO, he noted.
  • Russia, which had long given up on military exercises, then started sending long-range bombers and fighter aircraft on patrol along the edges of European or American airspace. The West, and the United States in particular, felt the aggressive attitude warranted a military response. Hence, a new program of maneuvers and talk of deploying tanks and other heavy equipment.
  • Russia, lacking both the manpower and the weapons systems, will not be ready to do so any time soon, which is why Mr. Putin resorts to asymmetrical responses like nuclear weapons, analysts said.The war with Ukraine severed cooperation with some critical defense industries there, while Western sanctions cut off some technology used in military applications, like microchips.
  • The steep drops in the price of oil and the value of the ruble mean Russia is facing a recession this year, although recent figures suggest it will not be as bad as originally anticipated.
  • Yuriy Borisov, a deputy defense minister, told the Moskovsky Komsomolets newspaper this year that the military had underestimated how much it would need to spend to acquire new Armata tanks. Mr. Putin had pledged the government would buy 2,300 by 2020.“We miscalculated on the Armata,” Mr. Borisov was quoted as saying. “The money allocated for that project turns out to be too little.” Production costs are 250 percent higher than anticipated, he said, without further details
  • He and other analysts suggested that maintaining the image of a robust military being resupplied on schedule was a political necessity, speaking to the large constituency that supports Mr. Putin because he has promised to restore Russia to its great power status.
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Peter Gordon Reviews Matthew Specter's "Habermas, An Intellectual Biography" | The New ... - 0 views

  • During its early years of reconstruction, the Federal Republic labored under a constant suspicion that its democratic institutions rested upon dangerously thin supports. A cottage industry of liberal historians (many of them refugees from the Third Reich) produced innumerable volumes that set out to show how Germany’s intellectual tradition diverged from the democratic West. Allied programs for de-Nazification added further credence to the notion that the future of democracy for Germany required a break from its undemocratic past. An historical consensus began to emerge that traced the Central European catastrophe back to something deep and intractable in German culture: the peculiarity of a “Germanic ideology” or a “German idea of freedom.” 
  • the idea of a zero-hour also left Habermas and his generation with a major dilemma. If the German political and philosophical tradition was corrupt to its core, then how was the fledgling West German democracy to survive, and upon what ideological foundations? 
  • earnest young intellectuals on the left found themselves in a more serious quandary. Rejecting West Germany’s official policy of uncritical alliance with the United States, they also stood apart from the postwar consensus that celebrated Anglo-American style bourgeois capitalism as the only valid model for the future. Were there in fact no native resources in the canons of German philosophy to which the younger generation might appeal?
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  • The project would demand that Habermas reconsider the major philosophers of world-rationalization—Kant, Hegel, Weber—to wrest from their theories all that might enrich a new model of truly human freedom while dispensing with their impoverished conception of reason as a mere instrument for the mastery of nature.
  • The very armature of the Enlightenment tradition had to be excavated and reset, like a bone that had once broken and never properly healed.
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The Experience Economy - NYTimes.com - 0 views

  • until sometime around 1974, the American economy was able to experience awesome growth by harvesting low-hanging fruit. There was cheap land to be exploited. There was the tremendous increase in education levels during the postwar world. There were technological revolutions occasioned by the spread of electricity, plastics and the car.
  • But that low-hanging fruit is exhausted, Cowen continues, and since 1974, the United States has experienced slower growth, slower increases in median income, slower job creation, slower productivity gains, slower life-expectancy improvements and slower rates of technological change.
  • He argues that our society, for the moment, has hit a technological plateau.
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  • But his evidence can also be used to tell a related story. It could be that the nature of technological change isn’t causing the slowdown but a shift in values. It could be that in an industrial economy people develop a materialist mind-set and believe that improving their income is the same thing as improving their quality of life. But in an affluent information-driven world, people embrace the postmaterialist mind-set. They realize they can improve their quality of life without actually producing more wealth.
  • many of this era’s technological breakthroughs produce enormous happiness gains, but surprisingly little additional economic activity
  • Jared’s other priorities also produce high quality-of-life gains without huge material and productivity improvements.
  • For Sam, income and living standards were synonymous. But for Jared, wealth and living standards have diverged. He is more interested in the latter than the former. This means that Jared has some rich and meaningful experiences, but it has also led to problems. Every few months, new gizmos come out. Jared feels his life is getting better. Because he doesn’t fully grasp the increasingly important distinction between wealth and standard of living, he has the impression that he is also getting richer. As a result, he lives beyond his means. As Cowen notes, many of our recent difficulties stem from the fact that many Americans think they are richer than they are.
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Exorcising Hitler - By Frederick Taylor - Book Review - NYTimes.com - 0 views

  • The story of the denazification of Germany after 1945 comes in two versions. The one we know best allows us to congratulate ourselves on a job well done. We turned the most powerful and frightening dictatorship in Europe into a stable, peaceable and functioning democracy for the first time in its history. This is the story we grew up with during the cold war, one that justified the partition and occupation of the country over many decades.
  • there is also a much less self-­congratulatory version of denazification. It dwells on the darker side by exposing once taboo subjects like the expulsion of millions of Germans from Eastern Europe and the apparently countless rapes carried out by the Red Army.
  • there were then — and remain to this day — two mysteries in the conduct of the German people at the war’s end, mysteries that go to the heart of Taylor’s book. One was the question of why they continued to fight so resolutely, for so long, against obviously overwhelming odds, even after it must have been clear that the war was lost. Taylor stresses two completely counterproductive messages sent by the Allies: the policy of unconditional surrender, and especially the draconian Morgenthau Plan advanced by the American Treasury secretary, which called for the destruction of Germany’s industrial base and the pastoralization of the country. He also highlights the Germans’ sheer terror at the approaching Red Army, a terror that had been fanned, as he notes, by Goebbels’s publicizing of an early Soviet atrocity in an East Prussian village. Finally, there was straightforward Nazi coercion as the regime rounded on its own people, killing more and more of them.
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Exorcising Hitler - By Frederick Taylor - Book Review - NYTimes.com - 0 views

  • Apparently, there was something in the popular state of mind by the winter of 1944-45, some sense of being alone in the world, some intuitive understanding of what their own country had done, that led the Germans to fulfill the regime’s ultimate goal — producing a society capable of withstanding the shock of war far more effectively than the one that had collapsed so ignominiously in 1918. This was a country that would fight to the bitter end.
  • Which leads directly to the second mystery. Why was the end, when it came, so definitive, without any underground resistance to speak of?
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The Real Story of How America Became an Economic Superpower - The Atlantic - 0 views

  • a new history of the 20th century: the American century, which according to Tooze began not in 1945 but in 1916, the year U.S. output overtook that of the entire British empire.
  • The two books narrate the arc of American economic supremacy from its beginning to its apogee. It is both ominous and fitting that the second volume of the story was published in 2014, the year in which—at least by one economic measure—that supremacy came to an end.
  • “Britain has the earth, and Germany wants it.” Such was Woodrow Wilson’s analysis of the First World War in the summer of 1916,
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  • what about the United States? Before the 1914 war, the great economic potential of the U.S. was suppressed by its ineffective political system, dysfunctional financial system, and uniquely violent racial and labor conflicts. “America was a byword for urban graft, mismanagement and greed-fuelled politics, as much as for growth, production, and profit,”
  • as World War I entered its third year—and the first year of Tooze’s story—the balance of power was visibly tilting from Europe to America. The belligerents could no longer sustain the costs of offensive war. Cut off from world trade, Germany hunkered into a defensive siege, concentrating its attacks on weak enemies like Romania. The Western allies, and especially Britain, outfitted their forces by placing larger and larger war orders with the United States
  • His Wilson is no dreamy idealist. The president’s animating idea was an American exceptionalism of a now-familiar but then-startling kind.
  • That staggering quantity of Allied purchases called forth something like a war mobilization in the United States. American factories switched from civilian to military production; American farmers planted food and fiber to feed and clothe the combatants of Europe
  • But unlike in 1940-41, the decision to commit so much to one side’s victory in a European war was not a political decision by the U.S. government. Quite the contrary: President Wilson wished to stay out of the war entirely. He famously preferred a “peace without victory.” The trouble was that by 1916, the U.S. commitment to Britain and France had grown—to borrow a phrase from the future—too big to fail.
  • His Republican opponents—men like Theodore Roosevelt, Henry Cabot Lodge, and Elihu Root—wished to see America take its place among the powers of the earth. They wanted a navy, an army, a central bank, and all the other instrumentalities of power possessed by Britain, France, and Germany. These political rivals are commonly derided as “isolationists” because they mistrusted the Wilson’s League of Nations project. That’s a big mistake. They doubted the League because they feared it would encroach on American sovereignty.
  • Grant presents this story as a laissez-faire triumph. Wartime inflation was halted. Borrowing and spending gave way to saving and investing. Recovery then occurred naturally, without any need for government stimulus. “The hero of my narrative is the price mechanism, Adam Smith’s invisible hand,
  • It was Wilson who wished to remain aloof from the Entente, who feared that too close an association with Britain and France would limit American options.
  • Wilson was guided by a different vision: Rather than join the struggle of imperial rivalries, the United States could use its emerging power to suppress those rivalries altogether. Wilson was the first American statesman to perceive that the United States had grown, in Tooze’s words, into “a power unlike any other. It had emerged, quite suddenly, as a novel kind of ‘super-state,’ exercising a veto over the financial and security concerns of the other major states of the world.”
  • Wilson hoped to deploy this emerging super-power to enforce an enduring peace. His own mistakes and those of his successors doomed the project,
  • What went wrong? “When all is said and done,” Tooze writes, “the answer must be sought in the failure of the United States to cooperate with the efforts of the French, British, Germans and the Japanese [leaders of the early 1920s] to stabilize a viable world economy and to establish new institutions of collective security. … Given the violence they had already experienced and the risk of even greater future devastation, France, Germany, Japan, and Britain could all see this. But what was no less obvious was that only the US could anchor such a new order.”
  • And that was what Americans of the 1920s and 1930s declined to do—because doing so implied too much change at home for them: “At the hub of the rapidly evolving, American-centered world system there was a polity wedded to a conservative vision of its own future.”
  • The Forgotten Depression is a polemic embedded within a narrative, an argument against the Obama stimulus joined to an account of the depression of 1920-21. As Grant correctly observes, that depression was one of the sharpest and most painful in American history.
  • Then, after 18 months of extremely hard times, the economy lurched into recovery. By 1923, the U.S. had returned to full employment.
  • “By the end of 1916, American investors had wagered two billion dollars on an Entente victory,” computes Tooze (relative to America’s estimated GDP of $50 billion in 1916, the equivalent of $560 billion in today’s money).
  • the central assumption of his version of events is the same one captured in Rothbard’s title half a century ago: that America’s economic history constitutes a story unto itself.
  • Americans, meanwhile, were preoccupied with the problem of German recovery. How could Germany achieve political stability if it had to pay so much to France and Belgium? The Americans pressed the French to relent when it came to Germany, but insisted that their own claims be paid in full by both France and Britain.
  • Germany, for its part, could only pay if it could export, and especially to the world’s biggest and richest consumer market, the United States. The depression of 1920 killed those export hopes. Most immediately, the economic crisis sliced American consumer demand precisely when Europe needed it most.
  • But the gravest harm done by the depression to postwar recovery lasted long past 1921. To appreciate that, you have to understand the reasons why U.S. monetary authorities plunged the country into depression in 1920.
  • Monetary authorities, worried that inflation would revive and accelerate, made the fateful decision to slam the credit brakes, hard. Unlike the 1918 recession, that of 1920 was deliberately engineered. There was nothing invisible about it. Nor did the depression “cure itself.” U.S. officials cut interest rates and relaxed credit, and the economy predictably recovered
  • But 1920-21 was an inflation-stopper with a difference. In post-World War II America, anti-inflationists have been content to stop prices from rising. In 1920-21, monetary authorities actually sought to drive prices back to their pre-war levels
  • James Grant hails this accomplishment. Adam Tooze forces us to reckon with its consequences for the rest of the planet.
  • When the U.S. opted for massive deflation, it thrust upon every country that wished to return to the gold standard (and what respectable country would not?) an agonizing dilemma. Return to gold at 1913 values, and you would have to match U.S. deflation with an even steeper deflation of your own, accepting increased unemployment along the way. Alternatively, you could re-peg your currency to gold at a diminished rate. But that amounted to an admission that your money had permanently lost value—and that your own people, who had trusted their government with loans in local money, would receive a weaker return on their bonds than American creditors who had lent in dollars.
  • Britain chose the former course; pretty much everybody else chose the latter.
  • The consequences of these choices fill much of the second half of The Deluge. For Europeans, they were uniformly grim, and worse.
  • But one important effect ultimately rebounded on Americans. America’s determination to restore a dollar “as good as gold” not only imposed terrible hardship on war-ravaged Europe, it also threatened to flood American markets with low-cost European imports. The flip side of the Lost Generation enjoying cheap European travel with their strong dollars was German steelmakers and shipyards underpricing their American competitors with weak marks.
  • American leaders of the 1920s weren’t willing to accept this outcome. In 1921 and 1923, they raised tariffs, terminating a brief experiment with freer trade undertaken after the election of 1912. The world owed the United States billions of dollars, but the world was going to have to find another way of earning that money than selling goods to the United States.
  • Between 1924 and 1930, world financial flows could be simplified into a daisy chain of debt. Germans borrowed from Americans, and used the proceeds to pay reparations to the Belgians and French. The French and Belgians, in turn, repaid war debts to the British and Americans. The British then used their French and Italian debt payments to repay the United States, who set the whole crazy contraption in motion again. Everybody could see the system was crazy. Only the United States could fix it. It never did.
  • The reckless desperation of Hitler’s war provides context for the horrific crimes of his regime. Hitler’s empire could not feed itself, so his invasion plan for the Soviet Union contemplated the death by starvation of 20 to 30 million Soviet urban dwellers after the invaders stole all foodstuffs for their own use. Germany lacked workers, so it plundered the labor of its conquered peoples. By 1944, foreigners constituted 20 percent of the German workforce and 33 percent of armaments workers
  • “If man accumulates enough combustible material, God will provide the spark.” So it happened in 1929. The Deluge that had inundated the rest of the developed world roared back upon the United States.
  • From the start, the United States was Hitler’s ultimate target. “In seeking to explain the urgency of Hitler’s aggression, historians have underestimated his acute awareness of the threat posed to Germany, along with the rest of the European powers, by the emergence of the United States as the dominant global superpower,” Tooze writes. “The originality of National Socialism was that, rather than meekly accepting a place for Germany within a global economic order dominated by the affluent English-speaking countries, Hitler sought to mobilize the pent-up frustrations of his population to mount an epic challenge to this order.”
  • Germany was a weaker and poorer country in 1939 than it had been in 1914. Compared with Britain, let alone the United States, it lacked the basic elements of modernity: There were just 486,000 automobiles in Germany in 1932, and one-quarter of all Germans still worked as farmers as of 1925. Yet this backward land, with an income per capita comparable to contemporary “South Africa, Iran and Tunisia,” wagered on a second world war even more audacious than the first.
  • That way was found: more debt, especially more German debt. The 1923 hyper-inflation that wiped out Germany’s savers also tidied up the country’s balance sheet. Post-inflation Germany looked like a very creditworthy borrower.
  • On paper, the Nazi empire of 1942 represented a substantial economic bloc. But pillage and slavery are not workable bases for an industrial economy. Under German rule, the output of conquered Europe collapsed. The Hitlerian vision of a united German-led Eurasia equaling the Anglo-American bloc proved a crazed and genocidal fantasy.
  • The foundation of this order was America’s rise to unique economic predominance a century ago. That predominance is now coming to an end as China does what the Soviet Union and Imperial Germany never could: rise toward economic parity with the United States.
  • t is coming, and when it does, the fundamental basis of world-power politics over the past 100 years will have been removed. Just how big and dangerous a change that will be is the deepest theme of Adam Tooze's profound and brilliant grand narrative
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