Charts the course of the US Federal Reserve since the 1970s, highlight refinements prompted by the difficulties of operating at the lower bound of interest rates. Bernanke underlines the benefits of signaling and also macroprudential policy to address systemic instability. The celebrated economist seems not to have considered that his own successes may not be repeated by successors. Further, there is no principled assessment of where technocracy stops and democratic accountability takes over.
The Fed exists largely as founded in 1913 and reformed in 1935; it had failed to address the monetary side of financial stability, worsening the Depression. (Bernanke does not address Roosevelt’s fiscal policies). The 1951 Treasury-Fed Accord freed the latter of any financing responsibilities). The heart of the book focuses on inflation as it relates to unemployment (i.e., the Phillips curve), long-term decline in normal rate of interest (there is no natural rate of inflation since it reflects fiscal policy), and increased systemic instability.
In the 1970s, the Phillips curve was refined to segregate supply and demand shocks. Inflations having been tamed in the 1980s, financial disruption has since caused the major downturns, with credit-market failures generally worse than stock-market collapses.
Greenspan succeeded in risk management but was too involved in fiscal policy. The Global Financial Crisis was a classic bubble: a buildup in risky lending; loss of investor confidence in loans; runs on lenders by short-term funders; fire sales of trouble assets; and procyclical insolvencies. The difficulties of working at the lower bound of interest rates – a 1% reduction in the 10-year yield is equivalent to a 3% reduction in the Federal funds rate, thereby magnifying its stimulus – prompted the Fed to become lender of last resort: asset purchasing (quantitative easing) and related maneuvers.
Bernanke adjudges his own term as successful for introducing transparency and steerage (i.e., communications), paying closer attention to systemic stability, and introducing new policy tools (e.g., apart from purchasing assets, the need for ample lending reserves). The US entered the 2020 pandemic better prepared than 2008. Somewhat blithely, he rates Yellen highly.
The final quarter is given to emerging policy tools as well as the threats of populism (i.e., Trump), inequality, and so on. Apropos of the Fed’s cherished independence, Congressional oversight is hazing even though elsewhere the Fed is said to work for Congress and the president –mainly Trump – is the institution’s foe. Modern Monetary Theory is problematic not because ‘deficits aren’t important’ but as government spending crowds out private use of productive resources, productivity being limited: fiscal policy is responsive to politics whereas monetary policy, though blunt, is better insulated. Does risk taking always migrates to the least regulated part of the system?
United States
Garrow’s Rising Star: an Obama retrospective
A long-form interview between two Obama historians, assessing the president’s character and comparing him with Martin King, generally unfavorably. David Garrow’s
- Rising Star
‘is a tragic story about a young man who was deeply wounded by the abandonment of both his white mother and his Black father—a wound that gifted him with political genius and at the same time made him the victim of a profound narcissism that first whispered to him in his mid-twenties that he was destined to be president.’ Of interest:
To an extent that has never been meaningfully reported on, the Obamas served as both the symbolic and practical heads of the Democratic Party shadow government that “resisted” Trump—another phenomenon that defied prior norms.
In the absence of what was once American journalism, it is hard to know which portrait of Obama’s post-presidency is truer to life: Obama as a celebrity-obsessed would-be billionaire, or as a would-be American Castro, reshaping American society from his basement, in his sweats.
I think Barack in that winter of ‘08, ‘09, realized there was no way that his presidency could actually live up to the expectations. And I think even the fanboy journalists would acknowledge, under a little bit of pressure, that it ended up being an underwhelming, disappointing presidency. It will, in the long run, be seen as a failed presidency because of the international failures.
Samuels: How do you write a biography of a fictional character authored by someone who’s deliberately created and obscured and erased their actual life and replaced that self with a fiction?
For Barack, everything has to be a success. Everything has to be a victory. I mean, I’m not a health policy expert by any stretch of the imagination, but I’ve always thought that the whole Obamacare thing was, in large part, a fraud. It’s a great achievement for the health insurance industry.
Barack is actually just as insecure as Trump, but in ways that are not readily perceived by the vast majority of people. I think that’s probably my most basic takeaway.
it’s inescapable that Barack’s success in ‘08 is rooted in white people seeing him as an easy ticket toward racial absolution. It’s a need that white people in this country have. And what we’re still seeing week after week now for these past two or three years, especially with places like the Times and the Post, is that this white need for absolution was not cured by the Obama presidency. I frankly don’t understand it.
‘The Obama Factor: A Q&A with historian David Garrow’, 2 August 2023, Tablet.
12. Wood, The American Revolution (18 Aug 2007)
Authoritatively summarizes the War of Independence, featuring political and military events plus social and ideological transformation. After sketching colonial America, Wood moves briskly through the conflict. The book is more powerful in discussing the consequences of triumphant republicanism and the course toward the Constitution. Locating sovereignty in the people not only sealed the Federalists’ case but also clinched the defeat of egalitarianism, which was already bested in trade, culture, and religion. The national charter further converted Montesquieu’s assumption that democracy requires small polities into the Madisonian ‘balance of conflict’ model. There are interesting sections on the dysfunctions of state government, notably legislative overreach on behalf of special interests, which extends the normal portrayal of powerless national government. A very useful bibliographic essay.
***16. Cannadine, Mellon (15 Dec 2007)
An exhaustive (and sometimes exhausting) biography of an oligarchic, reticent banker who became an admired Treasury secretary, until the Great Depression turned the tables on the socioeconomic assumptions he had lived by. Mellon, whose father was an austere, Scotch-Irish magnate of western Pennsylvania, grew very wealthy by financing vertical businesses in heavy industries as well as banking. Mellon fils expanded into chemicals, electricity, and oil, extending the Judge’s model. He was, however, emotionally stunted and his marriage a disaster. In Washington, he should have left after the end of the Coolidge administration (his second); not only did the Hoover era end badly, but Roosevelt deliberately pressed trumped-up (and sensationally dismissed) tax fraud charges. Notwithstanding, Mellon saw fit to donate the whole of his grand art collection as well as build the National Gallery to his country (and adopted city). Fine scholarship.
4. Schales, Forgotten Man (7 Apr 2009)
Reevaluates the Great Depression’s political economy, finding FDR’s policy to be statist, jejeune, and ultimately ineffective. After an overview of the Coolidge and Hoover administrations’ failure to grasp secular changes, the book describes the baleful effects of seeking to balance the budget, the Smoot-Hawley tariff, and decreased liquidity. The incoming Democrats showed themselves heavily enamored of the social engineering and centralized planning of Soviet Russia. Their conceits (not least FDR’s vanity) were most evident in the Tennessee Valley Authority, Rex Tugwell’s utopian settlements, and the scheme to pack the Supreme Court. FDR used demagoguery (via radio), politicized prosecutions, and taxation to hound the ‘rich’ while rewarding the favored socioeconomic classes that carried him to reelection in 1936. He then caused the 1937 downturn, and blamed capital for staying out of the market. Eventually standards were lowered from the goal of recovery to the cause of improvement. Figures like Wendell Wilkie are woven into the narrative, while the title refers to the contest for popular opinion — was the government to help the ward of the state or the defenseless taxpayer? Persuasive and provocative: the Obama administration is heading the same route with its questionable, phony stimulus.
13. Wood, Revolutionary Characters (21 Nov 2010)
Sketches the moral and political sensibilities of the Founding Fathers: Washington, Franklin, Jefferson, Hamilton, Adams, and Madison along with Burr and Paine. Each of the core six was conscious of belonging to a new meritocracy, of setting an example for the Revolutionary generation. Washington and Jefferson receive the fullest historiographical treatment; Franklin’s portrait is most revealing. Paine and Burr are present to serve as counterpoints, as well to illustrate the code: even as the Founding Fathers proved themselves a brilliant cohort of elites, the 18th-century American aristocracy was ending, sped along by the example of these (largely) self-made men and their rhetorical appeals to the common man. That essay, which treats the story of the Revolutionary- and Federalist-era newspapers, also makes a telling explanation of the overheated, lugubrious prose so often found in the century’s polemics: the elites were talking amongst themselves, above the proletariat.
5. Brand, American Colossus (8 May 2012)
Surveys postbellum political economy, concluding capitalism outstripped democracy to the benefit of a few and disadvantage of many. Federal power was used to spur the development of railroads, settlement of the West (including Indian pacification), the growth of cities over agriculture, foreign trade (via tariff), and a national currency. The almost inevitable result was a series of financial crises (especially 1873 and 1895), the latter requiring the intervention of JP Morgan. Other titans such as Rockefeller and Carnegie lacked the influence on government (or fail to illustrate the thesis); incidents such as the Homestead riot or the Molly Maguires also are case in theme. Erudite and readable, the book nonetheless feels a bit freighted with ideology: it is not clear ‘capitalism’ triumphed at the expense of a still-burgeoning democracy. Indeed, by the first decade of the 20th century, Teddy Roosevelt embodied the rise of progressivism; the economy failed again in 1907 and then 1929; and what a murderous time was the century of communism and progressivism.
9. Atkinson, Rugby-Playing Man (12 Jul 2012)
Remember America’s ‘tavern league’ era, when ill-resourced, player-coached teams contested lightly organized leagues while celebrating the cultish, borderline behavior of 20- and 30-year-olds?
These days, most do not. The game is predominated by students, most of whom weren’t born at the time of its heyday in the 1980s and early 1990s. So what do we really know of the stereotype?
Jay Atkinson’s
- Memoirs of a Rugby-Playing Man: Guts, Glory, and Blood in the World’s Greatest Game
, a well-crafted autobiography of a senior-grade player in Florida, Boston, and elsewhere, is a poignant, representative snapshot of the men who identified with rugby beyond all else.
- Rugby-Playing Man’s
dust jacket sensationalizes its contents, but the narrative is more nuanced. As the author begins, ‘There are the things we do for love, and the things we do for rugby, which are pretty much the same, at least in my case’.
To be sure, there are any number debauched adventures, some of which could still transpire today. It is one thing to revisit tales among teammates, however, and another to bring them to life – without pandering – for a new audience. This is a primary achievement of Atkinson’s effort.
Still more interesting are recollections of how Atkinson found his home at hooker, a controversial state championship match, or a tour of Wales. Anyone who played in the era will relate. Though the book is consciously neither historical or sociological, later generations and outsiders will glimpse the game as commonly experienced.
Disgust with the tavern-league era – homespun administrators as much as outre players – is one explanation for American rugby’s latter-day obsession with professionalizing. The union’s present constitution seals the board off from the grassroots: only well-heeled capitalists need apply. Most have no affinity for American rugby culture, always a weakness for any government.
Atkinson’s
- Rugby-Playing Man
surpasses its author’s narrative, portraying the good and bad of a bygone time. America’s modern era, which has fallen short of its self-declared goals, will do well to find an equally skillful telling.
See also http://www.gainline.us/gainline/2015/02/on-the-tavern-league-era.html
16. Kempe, Berlin 1961 (25 Dec 2012)
Narrates the construction of the Berlin Wall, along with Sputnik perhaps the Soviet zenith of the Cold War era. Under pressure stemming from Ossie migration, the Communists were surprised to find the tactics unopposed by West Berlin and German as well as American leaders. Well researched and readable; but only a small piece of the puzzle.
5. Ricks, Generals (14 Jun 2014)
A whirlwind study of US army leadership from the time of George Marshall. The military has all but abandoned the practice of rewarding officer success and treating failure by giving another a chance at command (and the relieved officer another chance elsewhere), thereby deferring personnel decisions to civilian oversight, which the army abhors for operational reasons. The trend began with McArthur and has persisted through the Iraq and Afghanistan wars. The army reached its quotidian / tactical nadir in Vietnam and then recovered, but has has yet to come to grips with a strategic doctrine for winning (i.e., ending) 21st-century, asymmetric conflict. This remaining gap, Ricks asserts, is attributable to conventional, insular career paths. A fine organizational study free of jargon.