Category Archives: History

The People, NO—Thomas Frank’s new book on anti-Populism


Thomas Frank is a brave man. He has decided to discover how the political movement of Populism has been degraded into a term of slander. This is a project long overdue because only a tiny fraction of those who use the term populism have any idea that this was once a fiercely debated set of ideas passionately believed by many people struggling to solve extremely difficult problems. In my experience, most people worldwide with a university education believe that a populist is an ignorant hick who is terrified of learning and modernity—a bad person to be shunned.

Like Frank, I believe that is a terrible, historically inaccurate, lie. Unfortunately that's the conventional "wisdom". Correcting this terrible ignorance requires far more patience than I have. When confronted with people with fancy degrees from name colleges who wrongly use the word populism to demonstrate their intellectual horsepower, I find it difficult to contain my rage. The reason is that their definitions of Populism bears almost zero relationship with the historical movement that invented the term. Frank got a Ph.D. from the University of Chicago so believes that these rotten examples of useless protoplasm can be reasoned with. The People, NO doesn't pull many punches. It is lovingly crafted—a graceful result of thousands of hours of hard work. Whether that is enough to change any minds...we'll see. But we can hope because real Populism is probably the only system of organized thought that has any chance of addressing the serious problems facing humanity these days.

Waiting for packages was a well-practiced skill of my youth. It was an unavoidable hazard of my small town life. I wanted to read Thomas Frank's latest book on the history of Populism, The People, NO, badly enough to go through the rituals of preordering and I still had a five-week wait. The reasons I wanted a first crack at this book include:
  • I have tried to read everything Frank has written ever since I got hooked by reading his The Conquest of Cool. Frank's writing is graceful, accurate, nuanced and complex without lapsing into pretentiousness. In Conquest, he tries to explain how and why the political and cultural passions of the 60s quickly faded into a costume show. As a survivor of the antiwar movement, I had seen multiple examples of exactly that phenomenon including in myself—long hair, bell-bottomed jeans, Red Wing work boots, army surplus shirts, etc. I was especially impressed when he wrote, "If I got it wrong, remember, I wasn't there." Yes, but he still got it very right. There's a lot to be said for diligent research.
  • Kansas is Frank's home. Over the years he has reminded us that historically, the Sunflower State can lay legitimate claim to having birthed the People's Party. And even though I have spent most of my life in Minnesota, Kansas has played an out-sized role in developing my own Populist inclinations. My father came from Kansas and his father farmed his whole life. My great grandfather came to Kansas from Sweden in 1873, the very year the USA would return to the gold standard after the Civil War—triggering the nasty agricultural depression that would essentially last until the outbreak of WW I. But he had two years of horticultural studies at the University of Lund so he not only survived, but had six 160 acre farms to distribute to his children after my great grandmother died during the Spanish Flu pandemic in 1918. Meanwhile, my mother's parents were struggling to keep their tiny farm alive in central Minnesota. This grandfather was a voracious reader and spent a significant fraction of his meager disposable income buying the Appeal to Reason and later, the Little Blue Books, both published in Girard Kansas.

So, if Frank had anything to add to my incomplete knowledge of Kansas Populism, I wanted badly to read it. And sure enough, when it arrived I blazed through it in one sitting. Two days later, I would re-read it at a more respectful speed mostly because The People, NO followed a POV that I have pretty much ignored in my quest to understand the history of rural progressive movements. For instance, Franks cites numerous examples of known intellectuals dismissing Populism because (as everyone "knows") farmers are just a bunch of ignorant hayseeds. Where I come from, we just call such folks "cityots"—the kind of people who assume milk comes from convenience stores.

The natural conditions that faced farmers in pioneer Minnesota were extremely difficult. We found this out between 1990-1995, when the Minnesota boyhood home of political economist, Thorstein Veblen, was restored to match photographs taken in 1892. What was discovered was a masterpiece of a home necessary to cope with a harsh environment, and the isolation of few neighbors, that was built by his father Thomas using only hand tools. For example, a well was found under the kitchen which eliminated the need to go outside for water (it usually gets to -30° a few times each winter.) There was a large loom room used to provide the family's need for clothing. Thomas would experiment with cross-breeding until he had produced a strain of Merino sheep that could survive those cold winters. He would also raise flax so that they would have linen work clothes and extra-strong thread to hold everything together. He built his wife a magnificent loom—unfortunately, his hand tools proved insufficiently accurate enough to build a well-balanced spinning wheel so he had to import one from Norway (This is a tiny fraction of an amazing tale of survival at the edge of a wilderness. See more )

Of course, not every Norwegian immigrant would build three farms in USA AND father two Ph.D. college professors and a half-dozen other accomplished college grads. But he wasn't especially rare either. My Kansas grandfather was not only a solid citizen with local community clout, a 35-year deacon in the local Lutheran church, he played a cello in his town string quartet and manged to get a college education for his two sons during the depths of the Great Depression—a Lutheran clergyman and a multi-patented chemical engineer.

The relevance of Veblen to the agrarian radicalism that was manifest in the People's Party formation is that he is an almost pure distillation of how the Nordics viewed their economic dilemmas. Already in 1867, The Grange was founded in Minnesota by an agrarian philosopher named Oliver Kelly. His organization encouraged his Patrons of Husbandry followers to regularly gather to exchange best-practices information. The Grange was more a fraternal organization that had a few radical tendencies so as economic conditions deteriorated for farmers after the reintroduction of the Gold Standard in 1873, more aggressive organizations began to replace the Grange including the Greenback Party—the brainchild of Peter Cooper who had masterminded Lincoln's decision to finance the Civil War with Greenbacks.

Former Congressman and Lt. Governor turned Grange traveling lecturer named Ignatius Donnelly switched his efforts to the Texas-based National Farmer's Alliance—a precursor to the People's Party in the 1880s. In 1892, he would author the preamble to the People's Party Omaha Platform—arguably the most famous and important political document the Populists would ever have. After the loss in 1896 to the massively funded William McKinley, the People's Party would sputter and run out of gas. Even so, Donnelly would be their vice-presidential candidate in 1900. He lost but in 1901 McKinley died at the hand of an assassin only to be replaced by Theodore Roosevelt. Donnelly would also die in 1901 so the last great link in Minnesota to the People's Party was severed. But by then, the political arguments of the Pops were pretty well known and were soon absorbed by several of the follow-on movements.

The most obvious starting point were the Progressive Republicans. Teddy Roosevelt was was already making noises as a "Square Deal" Reformer in 1901 and would become the head of the Bull Moose party in 1912 because his hand-picked successor, William Howard Taft, was not nearly progressive enough. Roosevelt was beloved in Minnesota. He was famous for actually trying his hand as a working rancher in North Dakota after graduating from Harvard. That the ranch actually worked at some level cemented his tough-guy image for the rest of his life. And yes, when the faces of the four most significant presidents were chosen for Mount Rushmore, the folks from neighboring South Dakota just HAD to include TR.

Minnesota also had a running head start on Progressive Republican thought because Robert La Follette was a towering political figure in next door Wisconsin. He spent his whole career tinkering with the ideas of Progressivism. His last campaign was as the Presidential candidate for the Progressive Party in 1924. His lifelong pet project was his beloved University of Wisconsin which he insisted have a branch no further than 50 miles from any citizen of the state. The main campus in Madison would be walking distance from the capital building itself.

The Republican Party was created in Ripon WS as an abolitionist organization thanks largely to the efforts of Wisconsin's numerous 48ers—the revolutionaries run out of Germany in the repression following the Revolution of 1848. Wisconsin had just become a state in 1848 so these folks, many with advanced educations and political organizing skills, would become important political actors almost immediately on arrival.

Many settlers in Minnesota had first tried settling in Wisconsin. The Veblen family had tried to create two different farms in Wisconsin before moving to SE Minnesota. When Thorstein Veblen discovered he could not get a job as a philosophy professor even with a Ph.D from Yale, he relocated to Madison to soak up the UW intellectual scene while deciding what to do next. And when La Follette would visit Minnesota, he was welcomed by large and enthusiastic crowds.

Between TR in the White House and La Follette making big noises next door, Minnesotans took a political breather. But the problems of farmers and factory workers didn't go away as the 20th century began. The state had begun to adjust to its latest immigrants and since Minnesota's greatest attraction was its rich black soils, many would try their hand at farming. The largest group were the Germans. In the little town where I grew up and attended school K-10, those Germans had actually come from Russia where they had gone to farm at the invitation of Catherine the Great. They left Russia when Alexander II began to change their arrangement in 1874. Since nearly all the people in my home town were practicing Mennonites, the change they refused to tolerate came when the new Tsar started drafting their young men into his army. They came to Minnesota carrying with them their amazing skills, work habits, and Hard Red Spring Wheat which could be successfully grown in cold weather climates. They organized their work and social lives around their faith and for the most part, shunned politics. And while the Mennonites formed but a small slice of the German-speaking farmers, Germans were amazingly quiet considering they formed the largest ethnic minority in the state.

Minnesota politics would belong to the Scandinavians. When they were not politically organizing, they organized cooperatives. And like in Scandinavia itself, their culture was heavily influenced by their Lutheranism and their extensive experience with cooperatives.

The Norwegians were often apolitical but a subset of their tribe followed a religious leader named Hans Nielsen Hauge. Hauge was the Peitist's Peitist who believed that the Church of Norway was hopelessly corrupt (which they probably were). State churches often get that way. In North America, the Hauges would become influential enough to eventually have their own Lutheran Synod. But far more interesting were his economic ideas. He believed that common folk could advance their and their community's interest through a combination of thrift, hard work, and initiative, and these teachings led to the new rise in Norwegian economics some years after national independence in 1814. In this matter Hauge was but one of several contributors, but he was one of the most influential – especially so in the way he combined economics and Christian morals: modesty, honesty and hard work among them. In 2005, the Norwegians founded a Hauge Institute to study and promote his economic ideas with headquarters in Bergen.

While there were plenty of Hauges in Minnesota, the greatest of the Norwegian-American contributors to Populist thought was, of course, Thorstein Veblen.

The Danes also had a religiously guided social and economic movement inspired by Nikolaj Grundtvig. He eventually became a Lutheran bishop and wrote over 1000 hymns. But he was perhaps best known for founding the folk school movement which taught young Danes not only practical skills such as increasing agricultural efficiency but their cultural history (how did Vikings become Scandinavians?) Danes in Minnesota opened a handful of folk schools but the most famous one in USA was in Tennessee called the Highlander Folk School. It helped educate Rosa Parks.

Alvin Hansen was the son of Danish immigrants who farmed near Viborg South Dakota. After graduating from nearby Yankton College, he would pursue an economics graduate degree at the University of Wisconsin-Madison, studying at the feet of the towering progressives Richard Ely and John R. Commons. He got a job at the University of Minnesota in 1919 and became a full professor by 1923. He was wildly popular and soon added several important books to his CV. In 1937, he took his act to Harvard where he taught a small army of New Deal economists. He was often labeled "America's Keynes" though in fact, he was far superior intellectually to the more-famous currency speculator from Cambridge.

The Finns tended to be the hard-core leftists. Finland was in the grip of a cultural uprising in the late 19th century. She had been ruled by outsiders for hundreds of years—first the Swedes and then the Russians. Many of the Finns had grown increasingly resentful of their second-class status and began to demand reforms such as making Finnish the official language of the university system. In 1899, Jean Sibelius wrote his stirring national hymn to independence called Finlandia. Actual independence wouldn't happen until 1917 when The Russian Revolution would cause them to lose their grip on Finland. In the meantime, Finns had to make survival decisions. Would they stay and hope that independence would bring material improvements? Would they copy their big neighbor and install a Marxian government? Or would they just choose to emigrate? Many did but since Finns were not so big on farming and most of the super-prime agricultural land in Minnesota had been claimed, they went to work in the mines of NE Minnesota and the Upper Peninsula of Michigan.

Mining by its very nature is a brutal occupation. In fact, throughout most of history, mining was done by convict or slave labor. Cecil Rhodes, the guy who organized the massive material plunder of South Africa was reported to have said that the most essential piece of equipment for running a mine was the machine gun.

In 1910, Arvo Kustaa Halberg (Gus Hall) was born into one of those radical Finnish families on the Mesabi Range. The family had 10 children. His father had been black-balled for participating in an Industrial Workers of the World (IWW) strike so they teetered on the thin edge of survival. The IWW was very important to Finnish culture—in fact, the weekly IWW paper headquartered in Duluth was also printed in Finnish.

At 15, Hall would leave home to work in a timber camp. Two years later in 1927, he was recruited to the CPUSA by his father. Hall became an organizer for the Young Communist League in the upper Midwest. In 1931, an apprenticeship in the YCL qualified Hall to travel to the Soviet Union to study for two years at the International Lenin School in Moscow. Hall ran for president four times — in 1972, 1976, 1980, and 1984 — the last two times with Angela Davis as his VP running mate.

That leaves the Swedes who came to dominate important state offices representing both Republicans and Democrats (as well as the the very Populist Farmer-Labor Party in the 1920s and 30s.) The story is long and interesting with some towering politicians but arguably the most interesting was Charles August Lindbergh, a lawyer from the 6th congressional district and one of the founders of the Farmer-Labor Party. If the Swedes had a ringer, he was it.

In 1808, a boy named Ola Månsson was born in Smedstorp, Sweden, a small town in the southern agricultural province of Skåne. Through his marriage to Ingar Jönsdotter, who brought in a substantial dowry, and his own hard work, Månsson became a well-to-do farmer and in 1847 was elected to the Swedish Riksdag of the Estates, representing the farmers' estate. He also worked as a bank director. When accused of bribery and embezzlement, Månsson changed his name to August Lindbergh. He left his wife Ingar Jönsdotter and their seven children, and fled to the United States with his mistress (a Stockholm waitress, Lovisa Jansdotter Carlén) and their illegitimate infant son Carl in 1859. Lovisa became Louisa and little Carl became Charles August (our budding Minnesota congressman).

Yes, there are Swedish women who could cause a member of the Riksdag to take such a rash step away from a respectable life but since young Charles would grow to be an extraordinarily handsome man, we can assume she was a stunning beauty. But just because Ola Månsson / Lindbergh was no longer a member of the Riksdag representing Swedish agriculture during the political upheavals of the late 19th century did not mean he had forgotten the life lessons of his political career. Charles apparently soaked up everything his father could teach him and when the time came, he attended the University of Michigan Law School—probably the best such institution anywhere close to Minnesota. He established a law practice in Little Falls and would spend considerable time and energy representing farmers in disputes with lenders.

In 1906, Charles A. Lindbergh would be elected to the US House of Representatives as a Progressive Republican. He was extraordinarily diligent and would become best-known for his opposition to the USA entry into WW I and against the establishment of the Federal Reserve system in 1913. He believed (correctly) that the Federal Reserve was unconstitutional. In 1917 Lindbergh brought articles of impeachment against members of the Federal Reserve Board of Governors, including Paul Warburg and William P. G. Harding, charging that they were involved "... in a conspiracy to violate the Constitution and laws of the United States ..."

Taking on both the war-mongers and the bankers turned out to be (not surprisingly) political suicide. He would never win another election. This was not for lack of effort. In 1918, Lindbergh would become one of the founding members of the Minnesota Farmer-Labor Party. He would die from brain cancer in 1924 while campaigning for Governor as a Farmer-Laborite.

(Oh, and Congressman Lindbergh would father a son in 1902, Charles Jr., who would become at the age of 25, the first person to fly non-stop from New York to Paris in a custom-built Ryan monoplane, built to his specifications, on a mission planned to the last detail by the young pilot. Like his father, the Lone Eagle was tall and incredibly handsome and soon would become the first global superstar.)

The Farmer-Labor Party was really an odd combination. Farmers were largely self-employed owner-operators and were largely at the mercy of the bankers and monetary policy. The laborers were also at the mercy of these forces but probably didn't know it because they were mostly at the mercy of their factory-owning employers. Labor could strike—farmers could not. My grandfather, who had moved to Lindbergh's congressional district in 1921 to become a farmer after spending his first 22 years in USA as a union steelworker in Chicago, had become an enthusiastic Farmer-Laborite but would insist to his dying day that labor and agriculture had nothing in common. He had a point. The Laborites were an outgrowth of the IWW, were largely Marxists in philosophy and eventually Trotskyites, and were concentrated in urban areas. The farmer's side were an outgrowth of the Jeffersonians, the progressive agricultural organizations, the Populists, and most recently, the Nonpartisan League (NPL) which had in 1916, taken over the government of North Dakota.

Minnesotans liked to claim they were the country's most successful true Populists (Because the F-L Party largely dominating Minnesota politics during the Great Depression, it was one of the most successful statewide third party movements in United States history and the longest-lasting affiliate of the national Farmer–Labor movement. At its height in the 1920s and 1930s, party members included three Minnesota Governors, four United States Senators, eight United States Representatives and a majority in the Minnesota legislature.) And they would be right...except for the spectacular success of the North Dakota Nonpartisan League  (NPL).

In August of 1913, Arthur C. Townley was a successful farmer with a huge acreage of flax nearly ready for harvest near Beach North Dakota. Within minutes, a freak weather system (either hail or an early snowstorm) had wiped out the "Flax King of the Northwest". Townley was a man not inclined to go into a corner and sulk and after a trip to Bismarck, North Dakota's capital, he hatched a set of ideas that would make ND arguably the most Progressive state in USA with new institutions that other states are trying to imitate to this day. (See the partially successful efforts to bring state-run public banking to California organized by Ellen Brown—a big fan of North Dakota's State Bank.)

Townley's plan would prove be a masterpiece of agenda-driven politics. It worked like this:

  • Townley created a set of demands that addressed the big complaints of ND farmers:
  • The NPL, born in 1915, united progressives, reformers, and radicals behind a platform that called for many practical changes, ranging from improved state services and full suffrage for women to state ownership of banks, mills and elevators, and insurance.
  • The NPL dispatched agents trained to explain their new agenda across the state. These agents consisted mainly of young farmers who thoroughly understood the problems faced by anyone who tried to make a living growing food in ND. They charged $2.50 to new members of NPL.
  • Armed with this list of potent activists, the organizers approached folks running for office who were told that it made no difference the political party they represented, they could only get votes and other political support if they pledged to support the NPL agenda.
Using this method, the NPL basically won the 1916 election even though it required until 1919 to enact their whole program. Their most ambitious goal, the creation of the State Bank of North Dakota, required at least 15 more years to overcome the organized objections of private banking interests.

Business vs Industry—Veblen's class distinctions between elites

Populist is easily the most misunderstood and misused political term in existence. Anyone with a high-end USA education usually means it as a drive-by slur meant to sum up in one mega-sneer their open contempt for people who are the "hayseeds" of the social order. The myth to be defended is that the predators who run things know what they are doing and any serious deviation from their classical / neoliberal norms will plunge us all into the abyss.

The defenders of the neoliberal economic order have many valid reasons to be worried about Populism. Historically, it is a political movement of the people who actually run the real economy—farmers, builders, tradespeople, etc. They are the essential workers—Hillary's "deplorables." Or as Gene Wilder (Jim) explained Rock Ridge to Cleavon Little (Sheriff Bart) in Blazing Saddles, "You’ve got to remember that these are just simple farmers. These are people of the land. The common clay of the new West. You know… morons."

It turns out that the citizen-builders may be politically naive and so caught up in their honest and rational world that they often become the easy prey for the practitioners of force and fraud who devote their lives perfecting the various lies necessary to keep their schemes afloat. But morons they are not. Not. Even. Close.

In 1899, Thorstein Veblen, a lowly assistant professor at the newly opened University of Chicago, would publish perhaps the most important book on Political Economy ever written. Entitled The Theory of the Leisure Class, (TOLC) Veblen would utterly destroy the smug idea that the people who did the community's necessary work were, you know...morons. In his world, the people who sought to achieve status with open displays of waste represented such a significant fraction of the population, they should be considered culturally dominant. Chapter titles include: Conspicuous Leisure, Conspicuous Waste, and of course Conspicuous Consumption—some of the strategies used by our would-be rulers to prove that their social uselessness is actually a virtue AND a sign of high status. The main reason TOLC has never been out of print since 1899 is that it is still intellectually relevant. The insights are just easier to see because the worst excesses of Leisure Class status seeking and emulation have been amplified by advertising and "industrialized" by sophisticated communication advances such as radio, TV, the Internet, and smartphones.

It took until 1914 for Veblen to publish the bookend to TOLC entitled The Instinct of Workmanship and the State of the Industrial Arts. Unlike his original masterpiece where absolutely deadpan factual descriptions of Leisure Class antics can often provoke genuine laughter, his description of the producing class celebrates some rarely mentioned insights and is as serious as a heart attack. They include:
  • Like the Leisure Classes, the Industrial Classes also stratify. As there is a huge social and economic gap between the predations of a pickpocket and a hedge-fund owner, so there is a gap between a strawberry picker and Tesla's senior engineer for battery development—even though both are clearly members of the Industrial Class.
  • The advances of the industrial classes are derived from advances in efficiency and accuracy. Both are extreme manifestations of the virtues of honesty and trustworthiness. The more honest the culture, the more sophisticated the technology.
So why is this even interesting—not to mention important?
Veblen's context

Anyone who has attended a Veblen conference will soon encounter a serious chin-stroking session whose purpose is to address the question, "What were the sources of Veblen's ideas?" If there are academics in the house, the answer is usually some variation on Immanuel Kant (because he was the subject of Veblen's Ph.D. thesis at Yale) or Charles Sanders Peirce (the father of Pragmatism who taught Veblen during his brief stay at Johns Hopkins).

He also encountered William Graham Sumner who was his doctoral adviser at Yale and while the two maintained a respectful relationship and Veblen took to calling himself an evolutionary economist, he was a lifelong critic of Sumner's Social Darwinism and so this link is generally perceived as negative. In fact that was Veblen's pattern—most of the people Veblen encountered in his pursuit of the "higher learning" turned out to be intellectual opposites. John Bates Clark, the man who introduced Veblen to economics at Carleton College, spent significant intellectual energy trying to debunk Institutionalism—the school of thought Veblen helped co-found. Veblen returned the favor by trashing Clark's pet idea—The Theory of Marginal Utility—at every opportunity.

And no, Veblen was never a Marxist. But academic conferences usually cough up a few Marxists who believe the following:
  • Veblen and Marx were both strong critics of "capitalism."
  • Both used class analysis in their critiques
  • Because Marx preceded Veblen in the chronological order, it is appropriate to think of Veblen as Marx Jr.

The problem with this line of "reasoning" is that it mimics the let's-worship-the-gods strategy so beloved by the Leisure Classes. Fundamentalists by their very nature retard growth in all sorts of forms of understanding. Marx's economic theories were based largely on David Ricardo's so are not especially sophisticated. Therefore, people predisposed to quoting Marx tend to get a LOT of economic analysis wrong—often murderously wrong. Comparing Veblen to Marx because both were Political Economists is a little like comparing an ox cart to a cargo jet—both may be means of transporting goods but that is where the similarities end.

Veblen vs Marx
Epistemology—why learning methods were extremely important

Veblen was in many ways, the leading intellectual for the Populist movement. Marxists, at least back in 1968 when I got sucked into those all-night sophomoric debates over grand political theory, would pretend to identify with the working class. Yet mostly they ridiculed the backwardness of the proles and thought of themselves as virtuous missionaries tasked with bringing Marxian theory to their poor dark souls. Not surprisingly, the real working classes absolutely despised these posers. In May 8, 1970, an anti-war demonstration in New York was set upon by construction workers. The ensuing brawl, called the hard-hat riot, lasted two hours. The Marxists pretty much gave up on the working classes after that.

So back to where did Veblen get his ideas? They were an extremely accurate and scholarly manifestations of Minnesota Populism combined with Wisconsin Progressivism. There really IS a difference between getting your worldview while reading in the British Museum Library (like Marx) and forming one while participating in nation-building at the ragged edge of civilization. BIG. Huge. Veblen and Alvin Hansen were prime examples of the "sons of the pioneers" economists.

What makes Veblen especially fascinating is that he understood from life experience that while the producing classes had spent most of history at the bottom end of the social order, the order was changing dramatically. The enemies of the Producing classes could claim that Producers were morons but as they increased their abilities by incorporating the 19th century explosions in science and engineering, that slander became increasing absurd. In Veblen's world view, the Leisure Classes were ridiculous in spite of their educational credentials. (See Veblen's destruction of the pretensions of the University of Chicago in his 1918 masterpiece called The Higher Learning in America. Review.) By contrast, the "morons" had figured out mass-produced steel, radio, electric illumination and thousands of other examples. Turns out there's nothing average about the "average" man. The Producers have created new elites—the scientifically and technologically literates and the world they have created. Interestingly, Frank's central theses is that the anti-populists have barely changed their critiques since 1892. The leisure classes are like that—they rarely improve unless one is willing to argue the George W. Bush was an improvement over Lincoln.

Why is this important?

Perhaps the central criticism of the Populists was their persistent refusal to accept the expertise of their "betters." Of course, how could it be otherwise? The basic thrust of the Pops was that those in power were doing it wrong—and those in power believed things that were making the lives of the Producing classes absolutely miserable. Ergo, the whole point of Pop political organizing was to overthrow ruling / Leisure Class expertise.

Of course, the elites were not "failures"—they were conducting class warfare. This was the heart of Veblen's class analysis. The Producing Classes were responsible for organizing the community's necessary work. The Leisure Classes made their living off the labors of the Producers. The Leisure Classes seized their wealth through the time-honored methods of force and fraud including warfare, slavery, the Gold Standard, and usury. IF the Leisure Classes allowed the Producers to keep more of the community's income, their own income would drop—theoretically to zero. So the destruction of the Populists was necessary for Leisure Class survival.

Frank cannot avoid the subject of elite "failures". In some ways, that is the whole point of The People, NO. He provides a raft of examples but perhaps the most amusing is his example of a 2018 work citing the dangers of populism. As an example of goofy squared, he mentions Yascha Mounk, the Johns Hopkins professor who claimed in his 2018 book The People vs. Democracy: Why Our Freedom Is in Danger and How to Save It which tries to explain the causes of the latest populist rise and investigates how to renew liberal democracy. His latest book has been translated into eleven languages, and hailed as one of 2018's Best Books of the Year by multiple publications, including the Financial Times. On Pg. 114, Mounk claims that the first significant populist was a right-wing Austrian politician named Jörg Haider who was most prominent in the 1980s and 90s. Good grief—getting your facts wrong by 100 years is NOT good form.

For me, the ugliest example of elite nonsense during my life was provided by Robert Strange McNamara. the head of the Department of Defense during the Kennedy and Johnson administrations. He was an intellectual prodigy who would earn a Harvard MBA 1939 and then would become a Harvard professor in 1940. During WW II, following his involvement there in a program to teach analytical approaches used in business to officers of the United States Army Air Forces, he entered the USAAF as a captain in early 1943, serving most of World War II with its Office of Statistical Control. In 1946, Tex Thornton, a colonel under whom McNamara had served, put together a group of former officers from the Office of Statistical Control to go into business together. Thornton had seen an article in Life magazine portraying Ford as being in dire need of reform. Henry Ford II, himself a World War II veteran from the Navy, hired the entire group of 10, including McNamara. The "Whiz Kids", as they came to be known, helped the money-losing company reform its chaotic administration through modern planning, organization, and management control systems. The "whiz kids" may have "saved" Ford but the introduction of Leisure Class MBA types into the automobile industry would cause severe long-term problems that would eventually cripple car-making in USA. In Detroit, folks tended to divide MBAs and traditional management into "Bean Counters" and "car guys". As the bean counters gained influence, the cars became cheap and nasty. McNamara's claim to fame as President of Ford was the Falcon. "Cheap and nasty" is a compliment for the vile pile of junk that was Falcon.

When he became the Secretary of Defense, he would bring his bean counting ideas to war fighting. The obsession with body counts in Vietnam came from his core belief that if you cannot count something, it doesn't exist. This belief turned the Vietnam War into a war crime. Of course, McNamara wasn't the only mega-fool in this effort. David Halberstam would critique the experts who authored this disaster in his seminal 1972 book, The Best and the Brightest.

The Producer-Class Merger

The DFL was created on April 15, 1944, with the merger of the Minnesota Democratic Party and the larger Farmer–Labor Party. Leading the merger effort were Elmer Kelm, the head of the Minnesota Democratic Party and the founding chairman of the DFL; Elmer Benson, effectively the head of the Farmer–Labor Party by virtue of his leadership of its dominant left-wing faction; and rising star Hubert H. Humphrey, who chaired the Fusion Committee that accomplished the union and then went on to chair its first state convention.

By the party's second convention in 1946, tensions had re-emerged between members of the two former parties. While the majority of delegates supported left-wing policies, Humphrey managed to install a more conservative ally, Orville Freeman, as party secretary—who became Secretary of agriculture during the Kennedy and Johnson administrations. Some Farmer–Labor leaders such as Benson moved to the Progressive Party. Hubert Humphrey did many things to destroy the central ideas of the Farmer-Labor Party. He could give amazing speeches on the importance of farmers, but when it came to legislation, he favored the interests of the grain traders. He was a loyal supporter of his patron's ideas as formulated by Dwayne Andreas of Archer-Daniels Midland. The best example of this partnership was the Food for Peace legislation.

The Democratic Party convention of 1948 devolved into an angry mess. Hubert Humphrey, the mayor of Minneapolis gave his landmark civil rights speech which caused the walkout of the Dixicrats led by Strom Thurmond. There went a significant fraction of the "New Deal" coalition. President Truman had a very unenthusiastic following who blamed him for everything from the nuking of Japanese cities, the creation of the national security state with the formation of the CIA, and creation of the Cold War.

My father absolutely loathed Truman who he called a "cheap mobster" because of his ties to the Pendergast Gang in Kansas City. Both parents were absolutely NOT going to vote for Thurmond as they both had a history of civil rights activism. The Farmer-Labor dead enders supported Progressive Party Henry Wallace, the former Agriculture Secretary and Vice President for FDR. So in the election of 1948, my parents voted for Wallace. I was born in July of 1949—something my mother would mention whenever I tried to brag about my radical credentials during my anti-war years in the late 1960s. She would actually giggle about supporting Wallace as a radical AND quite lusty choice.

When the votes were counted in the little town where my father was the young Lutheran clergyman, the published results indicated that Wallace had only gotten two votes and my parents knew who those two were. This example demonstrated (again) that the Lutheran clergy were often (a lot) to the left of their congregations and that party politics would be debated only within our home.

Even so, my father was quite political. In the spirit of the "Cooperative Commonwealth", he had a sermon where he asserted that Jesus was the first Cooperator. In 1957, he strongly backed the integration of Little Rock schools and gave several sermons on that dilemma. And he was always on hand to support farmers who were losing their farms as a result of policies advocated by Republican reactionaries such as Eisenhower's assistant Agriculture Secretary Earl Butz.

The Farmer-Labor Party pretty much died in the election of 1948. We still call the Democratic Party in Minnesota the DFL, but there is almost no one who still remembers what the F-L stands for. Humphrey purged all the Marxists during the McCarthyite era which removed both intellect and muscle from the labor wing. Guys like Lindbergh were long gone. The rural population continued to shrink because almost all jobs are less strenuous than farming. Lot of really smart farm kids in Minnesota became doctors, engineers, and inventors, etc. The people who stayed in farming joined niche organizations such as Farm Bureau (well-to-do Republicans) Farmer's Union (the default farm organization in North Dakota) and my personal favorite, The National Farmer Organization (mostly struggling young farmers).

My NFO experience was a real accident. When I was in Junior High, I became fascinated with building flying model airplanes. The BIG problem with this hobby is that building models is governed by the same aerodynamic laws as real planes. The outcome of this problem is these models are really only successfully built by skilled adults. So I talked six other kids into forming a club and went looking for adult supervision. The guy we found was beyond perfect. He was a licensed pilot with a commercial rating. He owned 1/4 of a Mooney Mk. 20. And he built really spectacular models and flew them well. His day job was signing up members for the NFO.

When he discovered I was interested in his sales pitch, he decided to see if he could get me to understand it. And so I learned the NFO position on banking and monetary policy and soon discovered that these subjects were central to virtually every discussion of agricultural economics I would hear in my youth. I heard them in barber shops and church basements. I heard them in the stands at fast-pitch softball games. A few years back I read that the Bank of England had published a paper on fractional reserve banking that exactly mirrored the official NFO position I heard in 1963.

And then came the recession of 1981-2. The Federal Reserve System led by Paul Volcker decided that the best way to fight inflation was to raise the prime rate to 21.5%. Many sectors of the economy were sent reeling but here in Minnesota, the small and medium-sized family farms were essentially wiped out. Some had been operating successfully for four generations. Even the best-managed farms could not withstand 21.5% interest. Yes indeed, monetary policy was a matter of life and death.

Predatory monetary policy made my grandfather's life extremely awful in the 1920s and 30s. This made him angry and bitter and made my mother's life sad and miserable. When she graduated from the eighth grade with seriously good grades, her father could not afford to send her to high school, a pain she felt for the rest of her life. She was often in rooms where she was the best read, best qualified, and the most poorly educated. Her mother was ground down by overwork and eventually became so homesick, she would cry herself to sleep. In 1936 she died from a botched gall bladder surgery but a better diagnosis was that she died from a broken heart. This misery took place in a poorly heated house in one of the colder parts of Minnesota. (For a much better description of northern rural living conditions, read Ole Rolvaag's  Giants in the Earth). 

Mother's younger brother was so desperate for a little spending money that he joined the National Guard because it paid $1 a month. When the Japanese attacked in 1941, he was one of the first sent to the Pacific where he spent the whole war. He managed to escape injury but returned with a nasty drinking habit. During his occasional dry periods, he taught himself computer programming and calculus but would eventually die in a corner of the Salvation Army in Chicago.

The Little Blue Books

Frank's descriptions of the anti-Populists are often tragic and depressing. But anyone who doesn't know the history of the real Populists should consider his work required reading. Even though The People No can easily be read in three hours, I would NOT recommend it because there are hundreds of deliciously well-crafted sentences that should be savored and will likely be missed in a hasty reading. I would quibble about some small things like the casual treatment of Minnesota and North Dakota in his telling of Populism's effect on Progressive politics in USA. I think his descriptions of the anti-Pops is pretty bloodless considering the immense suffering and damage they caused the honest and inventive nation builders whose hard work they plundered and destroyed.

When my mother informed me that my grandfather, who only had a fourth-grade education but was still fluent in three languages, had learned the skills necessary to be good at specialty metalwork and operate an independent farm, was also an enthusiastic reader of the Little Blue Books, I was determined to read some of them. I met a guy who had collected them whenever he found them at garage and yard sales. He had around 2000. Some were duplicates. Some were damaged. Some looked like they had never been opened. I had no idea which of them my grandfather had read so just started reading those I thought would have interested him. After reading about 400, I decided it was statistically likely I had read some of the same books my grandfather had. What an experience! These were sophisticated books covering difficult subjects and my grandfather was reading them in his second language. Wow, just wow!

So I just assumed that Frank would cover this literary output of the publishing house in Girard Kansas. He did, but he makes us read to almost the last pages of his book. Thankfully, his descriptions of the Little Blue Books were lovingly accurate. 

Thank you Thomas Frank!

Jamie Galbraith explains his interesting life



Watching the career path of James Galbraith has been a minor hobby of mine ever since I discovered that my interest in economics was directly related to how many of his father's books I had read. The fascination with whatever Galbraith's economics was called was based in my mind on the fact that papa John Kenneth (Ken) Galbraith grew up on a working farm in Ontario and entered the economics profession through the door of agricultural economics. He gave speeches for the Farm Bureau when starting out.

I believed this was important because:
  1. I trust the intellectual habits and practices of those really smart farm kids. Farming is an Ur profession. Providing for the community’s nourishment is a LOT harder than it looks. It is the basis of civilization itself. Out of this scramble came the people who literally built the country. And they created social structures as enlightened as any in human history.
  2. Yea, for the home team. While I envied the childhood of James and wished I could have sat in a corner as JKG discussed the affairs of the world with the best educated economic minds of his generation, I could not. Northwest North Dakota is a LONG way from Harvard. What I could do, however, was recreate the education the farm kid from Ontario got watching his parents and neighbors as they sought to invent a way to get farming to pay the bills out at the thin edge of civilization. Products of this struggle have a reality base that informs the rest of their thoughts. Done right, the resulting thinking can be quite spectacular.
And so, while I avidly read JKG’s books and articles and tried very hard to emulate his thought processes, I was really interested in Jamie’s life because, after all, he is only three years younger than I. If the economics that JKG and friends had been perfecting since the earliest days of Roosevelt’s New Deal was to survive, the next generation of economists would have to learn the institutional practices that actually pushed forward the project of eliminating grinding poverty while attempting to overcome the Great Depression. It is not beyond reasonable speculation that JKG would want at least one of his sons to follow in his intellectual footsteps. And so Jamie would become the crown prince of JKG’s explanations for how the American Industrial System actually worked.

If you read James’ memoir below, you will see that he got a training that was the product of JKGs best ideas. Harvard AND Yale. Professors with international reputations and probably a friend of the family. A “visiting scholar” appointment at Brookings when it was still relevant. And finally he wound up at University of Texas—Austin. This school had enthusiastically embraced all the neoliberal rationalizations in its school of economics so of course, young Jamie would not be welcomed there. However, UT-Austin had long been home to the best Institutionalists in the land led by the spectacular Clarence Ayres. Their wisdom was no longer welcome in the economics department either but they knew a fellow creature of the New Deal so gave him the job of Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the LBJ School of Public Affairs.

The career contrasts between JKG and James are extremely interesting. JKG was by the end of the 1960s arguably the most famous face the economics profession would ever have. His books were read in dozens of countries. He wrote for Henry Luce’s Fortune magazine. He taught at Harvard and had acolytes all over the world. His 10-part video series on economics called The Age of Uncertainty (some episodes can be found on YouTube) was co-produced by the CBC, BBC and PBS. His breed of economic thought was accepted as the rational middle because the practitioners had done a mostly excellent job of running things—post-WW II reconstruction being the best example.

By comparison, James had a modest career that was useful. The man did not waste his life. But he was not the titan like his father—mostly because he had about 1/100 the opportunities to do a good job. In my humble opinion, the factor that explains this most simply was the change in zeitgeist. The economic theories of JKG had ceased to be cool. Where I come from, the enlightened, passionate Keynesians who had run the economics department at the University of Minnesota since the glory days of Alvin Hansen in the 1920s had long since forgotten the reason why Hansen was so enthusiastic about activist government economic intervention. Where he came from (Viborg South Dakota) such economic policy was literally a matter of life and death. This passion also informed JKG.

But Jamie did not grow up on a working farm, he grew up in a splendid home large enough to entertain a steady stream of guests eager to swap ideas with the leading light of what was coming to be called Keynesianism. Jamie's childhood economic demonstrations taught him that economics was this delightfully difficult problem to be solved, not a dangerous test against arctic-like winters and you must be clever enough to still have food in the spring.

Jamie's also suffered wrong intellectual turns even (or especially) considering his gee-whiz educational paths. Economics was changing through the addition of computing power. The math geeks would pose the big questions for the high-powered mainframes to crunch and suddenly, the great mysteries would be revealed through the statistical wisdom of regression analysis. Analysis as modeling guided by machine-perfect math sure sounds like a good idea.

Personally, I was not impressed. I wasted much of my youth building model airplanes and learned a profound lesson. The reason that model airplanes don't look or fly like real airplanes is that all sorts of problems are introduced when you try to scale the outcome. There are guys who want their scale models so authentic, they even want the rivets in the right place. Unfortunately, if the rivets get too small, they no longer can work as fasteners so they are reduced to decoration. Worse, there are physics problems that cause small airplanes to fly differently than large planes. For example, the governing bodies who make the rules for judging scale models have modified those rules so that models are still considered authentic even if the tail surfaces are oversized. Why? Because a WW II fighter with accurately-sized tail surfaces will barely fly—if at all. Oh those Reynolds numbers.

Then there are the problems of predicting behavior using mathematical formulas. Try, for example, to animate the walking behavior of a small toddler in a 3D animation. Using math formulas to predict such random behavior is virtually impossible. In fact, realistic cartoon behavior is really only possible if one puts markers on a real child, let him walk across the floor, take those marker locations and attach them to the model and animate the result. And yet, there are economists from around the world who actually believe they can predict large-scale human motion like market behavior with a few elegant math formulas. I am reminded of that arrogance when I watch just how difficult it is to make a self-driving car. And this is an EASY problem. There are states in USA that issue driver's licenses to 15-year olds.

When Jamie Galbraith lists the learning experiences that were mostly a waste of time he includes learning matrix algebra. (See paragraph #4 below.) So essentially he learned the same lessons as I only in a Harvard classroom. Unfortunately, this mislearning sunk the whole econ profession for at least 50 years. Worse, because this mislearning was so difficult and time consuming, other necessary things had to be dropped. The most serious is the fact that one can now get an advanced degree in economics without knowing the history of the subject. It's no wonder that economists have gotten almost everything wrong for the past 50 years.

So here's to James K. Galbraith who devoted his life to recreating the methods employed by the economists who guided the industrialized west to the greatest prosperity in human history. Historians are important too.

James Galbraith’s memoir of lifelong struggles to make economics a force for good

James Galbraith, 06/01/2020

Economics is sometimes portrayed as a contest between saltwater and freshwater, between the coastal pseudo-Keynesians and the Great Lakes neo-Walrasians, between the flaws-and-friction model-builders and the free-market hard-liners. As evolutionists know, both habitats are fairly sterile. Evolution occurs in the backwaters, in the mudflats, bogs, lagoons, cypress swamps and wetlands, in the shadows of perpetually endangered habitat. In this article I will sketch my personal journey through the backwaters. Intellectually they are my home, as they have been for every other recipient of the Veblen-Commons prize, with just one exception.

The exception was my father, who lived and worked on high ground, which he reached out of nowhere or more precisely Southern Ontario and Giannini Hall, by a unique combination of gifts including practical knowledge of price control and strategic bombing, the principled and imaginative use of state power under emergency conditions, and surpassing grace in command of the English language. But the high ground was barren ground. John Kenneth Galbraith’s influence spread around the world but it could not take root at home.

My father’s lasting gift to me has been a solid sense that an economist is either a practical player in policy battles or nothing at all. Economics is not a theology of the human condition. Nor is it a branch of pure logic, however much the attempt to make the notion into grist for undergraduates may warm academic seats. Catherine the Great had it right in 1765 when she chartered the Free Economic Society of Russia, suppressed in 1917, revived in 1982 and of which I’m the only known American member, and endowed it with the logo of a beehive and a one-word motto: “Useful.”

At Berkeley in 1969 one lecture, by Abba Lerner, did not deflect me from French literature and the anti-war movement. Then at Harvard I took my first economics course from Wassily Leontief, from whom I absorbed a fascination with hierarchical category schemes and matrix algebra, two misleading guides to the field, which spent thirty years in remission before breaking out to decorate a research agenda. I also became, uselessly, an expert on the production of ammunition for the Vietnam war.

In a year at Cambridge I saw Sraffa on his bicycle, absorbed enough capital theory to be inoculated against production functions, skirted the theatrics between Hahn and Robinson as much she inspired reverence and terror, drew close to Kaldor on the eve of his great last stand against Thatcher and monetarism, was amused by the geometric pyrotechnics of Richard Goodwin, entranced by the beautiful matching of Sraffa to Keynes in Pasinetti’s lectures, and admired Adrian Wood’s quasi-Galbraithian theories of profit and wages. Adrian, my tutor, to whom I owe a deep debt, also sensed the barrenness of high ground, and soon gave it up for the World Bank and China.

Henry Reuss extracted me to Washington in June 1975, just in time for two great events. One was the invention of the Conduct of Monetary Policy hearings, soon re-christened Humphrey-Hawkins, the first formal and regular congressional oversight of the Federal Reserve. They were my baby for five years, and they led to the “dual mandate” – full employment and price stability – the most Keynesian and most successful charter of any central bank. The other was the New York City financial crisis, the dawn of disaster capitalism, three weeks into my Hill career. I was thrown into it at 23 and never emerged, a life-long ambulance chaser of debt debacles.

Of my PhD years at Yale, 1976-1979, little comes to mind – routine drill on dying topics, logic-chopping whose flaws I already understood. Sid Winter generously lent his protection. With help from Lucy Ferguson, for a dozen years my wife, I explored numerical taxonomy and applied it to budget expenditure categories in a thesis only one person ever read: Paulo Du Pin Calmon, now of the University of Brasilia, who became my first PhD student and would help launch the inequality project. Otherwise I diverted myself, a week each month, by going back to Washington and the Banking Committee to skirmish with the resident monetarists and to harass the central bankers, from Arthur Burns to Paul Volcker, and eventually to Maryland for a year, marked most by a first major paper, a comparative institutionalist study of credit and industrial policies in France, West Germany, Great Britain and Sweden, published by the Joint Economic Committee in 1981.

Then the Revolution came. A dog’s breakfast of damaging dogmas – supply-side economics, monetarism, deregulation and privatisation, each among the rising academic doctrines of the previous decade, softened in ultimate effect only by an aggressive tax-cut and military Keynesianism. The problem of the early Reagan revolutionaries was not that they were academically disreputable as many claimed, but that they actually weren’t. At the Joint Economic Committee we fought them all, cooks and bakers in the front lines, backed by stalwarts like Bob Eisner, Walt Rostow – and also great luminaries, Tobin, Leontief and Klein, who appeared together in 1982. The New York Times ran their picture on the front page with a caption, but no story; I was shattered until my Republican colleagues emerged from their offices, one by one, to offer strictly professional congratulations. A policy triumph followed: the collapse of monetarism, and a political triumph, 26 House seats in the 1982 midterms, aided by ten percent unemployment. It was enough to stall the revolution, for a time.

Thereafter the economy recovered but the damage was done. The rise of finance and technology, disinflation, globalisation, debt peonage and the decline of industry, the rise of bicoastal inequalities, and the rusting away of the Midwest, giving rise first to Clinton and then to Trump – for all of these the course was set by Reagan and Volcker in the early 1980s. And the dogmas too morphed and lived on, shapeshifting zombies reinvented as exportable commodities in the form of the Washington Consensus, inflation targeting and neoliberalism, each eventually squeezed dry of doctrine until only the policy shells remain – tax cuts, central bank independence, fire-sale privatisations, deficit – and debt-aversion, all too useful to require the foundation of thought.

I came to Texas as the Old Institutionalists – Ayres, Gordon, Marshall – were fading out. Yet their ethos lingered even if few could detect it. For me the path forward lay in merging Institutionalist mesoeconomics with Keynes’s monetary-production economic space-time, modelled on Einstein – a thought planted by Skidelsky at Rostow’s poolside – and the lot with Leontief’s matrix-sensibility, eigenvectors and eigenvalues complete, to complement neoclassically-inflected econometrics with a non-parametric paradigm revealing the half-hidden structures in economic data. Peter Albin caught the gist and urged me forward. All this was far beyond my abilities but somehow just the right group of students coalesced at just the right time – from China, Portugal, Korea, Mexico, and later on Spain, Belarus, India, Sudan, Colombia, Argentina, France, Poland, and Iran.

Two currents emerged from this work. One applied numerical taxonomy to time-series vectors, notably wage change, reconstructing industrial and national-income classification schemes to distil the underlying structural affinities revealed by co-evolution through time. Steven Weinberg told me this was “cladistics.” We combined it with the extraction of discriminant functions – eigenvectors and eigenvalues complete (!) – which isolate and rank the dominant forces of economic change in each place and time. A referee reported that “economists do not use these techniques.” Seismologists, I later learned, had worked them out to distinguish earthquakes from nuclear explosions.

The second current was the measurement of economic inequalities from administrative statistics – payroll and employment records, mostly – using a generalised entropy measure, the between-groups component of Theil’s T statistic. The advantages of this Institutionalist approach are depth, range and precision, with results that largely mirror the best household surveys but with dense and consistent matrices of measures, suitable for panel analyses using standard techniques, from which time-and space patterns emerge with great clarity, showing on a global scale how debt and exchange-rate crises and regime changes drive inequality up, and how better export prices, lower interest rates and sustained social-democratic growth can bring it down. After an early presentation to the American Philosophical Society in Philadelphia John Archibald Wheeler came up to encourage me; my circle back toward economic space-time was complete.

Our approach to inequality has proved impossible to ignore entirely – it’s easy, cheap, accurate and replicable. It can be applied to many problems; most recently Jaehee Choi and I have shown how US states with the greatest increases in inequalities drift toward Democrats in presidential elections. But the larger point is the relocation of distributive analysis from labour markets and micro theory to macroeconomics on a global, interdependent scale, driven by structures of financial hegemony and power. Once again extracting information from matrices, this empirical and descriptive work yields a merger in practice of Keynes, Minsky, Galbraith père and Pasinetti, with distributive dynamics and a potential to unify economic analysis under an Institutionalist, Post Keynesian, Structuralist, MMT common front, buttressed by evidence and an expansive research agenda. Charles Saunders Peirce on Kepler comes to mind, that his gift to astronomy lay in impressing on men’s minds that the thing to do was to sit down to the figures and work out what the places of Mars actually were. Once again, the mainstream turns a deaf ear, to this day the macroeconomics of inequality – let alone the global macroeconomics of anything – does not exist in the JEL classification codes.

A further and ongoing evolutionary development is an elaboration, with Jing Chen, of the biophysical principles that must underpin a unified, reconstructed economics as they do every living and mechanical system. Only through this lens can economics understand scale, duration, resource costs, climate change and above all the essential role of regulation, without which mammals die, machines break, companies fail and banks and financial systems melt down. Our metaphors are already biophysical, somehow our thought and teaching and research should begin to catch up.

Still and finally, at least for now, an economist must be useful. For an academic like a politician this means taking your chances as they come along. In 1989 I helped to trigger debt default and the Brady Plan in Brazil, making of Luiz Carlos Bresser Pereira a lifelong friend. From 1993 to 1997 I was of some use as Chief Technical Adviser for Macroeconomic Reform and Strengthening Institutions to the State Planning Commission of the People’s Republic of China, my advice was largely to steer clear of Western economists and above all, not to open the capital account. Those results speak for themselves. Economists for Peace and Security kept me busy for twenty years. In 2015 I joined Yanis Varoufakis in Greece’s struggles against debt peonage and neoliberal austerity; we continue to work together on Democracy in Europe, the Green New Deal and the Progressive International. In 2017 I lectured in St Petersburg on the pragmatic economics of John Kenneth Galbraith, on the centennial of the storming of the Winter Palace and the 50th anniversary of The New Industrial State.

And when Bernie Sanders who does not need my advice becomes President next year, I’ll throw in with him for what it may be worth. I have hopes for a better world, free of imperial delusions, maximally demilitarised, authentically democratic, not too unequal, working together on common problems, saving the planet for a while longer. Well, anyway, one can dream.

Thank you very much.

Remarks by James Galbraith on receiving the Veblen-Commons Award of the Association for Evolutionary Economics. More information.
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The Dismal Forecasts of the Dismal Scientists


How economists keep getting things wrong and not learning from their mistakes

by James K. Galbraith
January 10, 2020

No matter where; of comfort no man speak:
Let’s talk of graves, of worms, and epitaphs;
Make dust our paper and with rainy eyes
Write sorrow on the bosom of the earth.
(Richard II, Act III, Scene 2)

So it was in San Diego in early January at the annual meetings among the gathered economists, dismal professionals to a man and (occasional) woman. The New York Times on January 8 aptly summarized the concerns: high deficits and public debt, low interest rates, trade wars, and slow productivity growth. According to the Times, these warnings were echoed by economists from the World Bank, the Federal Reserve, from Washington think tanks and, of course, from Harvard.

Beneath the ominous prognoses lie two impulses. One is the natural human desire not to be embarrassed—yet again—by failing to have warned that things may go bad. The academics quoted in the Times were in several cases architects of past disasters, or at best blind and mute as disasters approached. It would not do to have the same said again, and if a disaster does not occur, few will remember the warnings. The other impulse is intellectual inertia: The economists, like France’s Bourbons, learn nothing and forget nothing; they cast their omens in terms of parables read in textbooks many decades back. To change ideas now would call into question the very foundation of their careers.

Thus we read that trade wars are bad for growth. For a country running a large deficit, the opposite is actually true: Tariffs divert demand from imports and so support domestic expansion, unless the retaliation against exports is even more extreme, which has not been the case. Economists cannot admit this because they are tied to the doctrine of comparative advantage and the virtues of free trade, textbook principles at odds with the whole history of successful industrialization and development, including in the United States.

Low interest rates are said to be a risk because some day they will end. But the Federal Reserve has been trying to raise rates—or at least talking about it—for almost a decade. Every move in that direction brings financial turmoil, here or in the wider world, and the Fed backs off. The reality, at last bleakly admitted by the president of the New York Federal Reserve Bank, is that low interest rates are locked in—in technical terms, by the shallow yield curve. That is, you can’t raise short-term rates without pushing them up above sticky long-term rates, which is perhaps the world’s most reliable recipe for credit market chaos.

But if the likely permanence of low interest rates were fully admitted, then the Congressional Budget Office would have to revise its forecasts for future interest rates, which have for many years projected that they would rise far above current levels. And lowering those forecasts would, to a large degree, make the scary projections of high future federal deficits and rising debt ratios go away. This would undercut the third pillar of the pessimistic case, already weakened by devastating criticism of its feeble theoretical foundation and flawed empirical support. And yet, amazingly, there at the meetings was Harvard’s Kenneth Rogoff yet again, preaching to a large crowd about the public debt.

The Times accurately notes that economists are coming around to the view that even under the best conditions economic growth will remain slow—a position argued at book length by yours truly five years ago, but never mind. Part of my argument in The End of Normal concerned the fourth pessimistic pillar, slow productivity growth. I argued that in our age of technological upheaval capital goods have become cheap, therefore business investment as a share of total output has declined, and so the economy relies more than ever on the strength of consumer demand, bolstered by credit cards and student and automotive debt. The evidence since then bears this out. Alas, this means that otherwise worthy calls for new spending on brick-and-mortar infrastructure and on research and development bear no relation to the supposed problem of low productivity growth.

Recessions happen not when public deficits are large and interest rates low, but when the private sector takes on more debt than it can handle and interest rates rise.

In reality, as an unquoted presentation at San Diego by modern monetary theorist Randall Wray of the Levy Economics Institute showed, recessions happen not when public deficits are large and interest rates low, but when the private sector takes on more debt than it can handle and interest rates rise. This is what happened in the late 1990s and in the mid-2000s, in the run-ups to the NASDAQ crash and the mortgage debacle. It hasn’t happened this time—yet. So far this recovery, thanks to federal spending and to tax cuts, however regressive, the overall private sector in the United States is still solvent. It is so precisely because private saving and public deficits are mirror images, and because lower import prices and surging onshore energy production have kept the trade deficit under control as the economy grew. And while household debt has grown, lower interest rates have kept the burden of that debt manageable, so far.

Does all this mean there are no downside risks? Alas not. It means only that you won’t learn about them from brand-name economists who never outgrew their textbook models. A new paper, “Into the Abyss,” by an obscure young Finn, Tuomas Malinen, should however be considered for a prizewinning doomsday scenario.

Malinen is a financial economist, which means he studies a sector that most mainstream economists pretend doesn’t exist. What he finds, in a nutshell, is over-leveraged banks and hedge funds propped up with increasing desperation by central-bank operations in the repo market—overnight repurchase agreements for Treasury bills—which is today the major source of central-bank liquidity for the financial sector. The over-leverage is the result of inveterate speculative reach-for-yield, an instance of Hyman Minsky’s rule that stability creates instability, and that safe financial practices naturally degrade into Ponzi schemes. On top of this, securitized corporate loans (CLOs) have begun to look shaky, and could lose value massively in a downturn affecting corporate profits.

Those financial losses would in turn trigger bank failures, perhaps starting with Deutsche Bank, a vast operation with, Malinen says, “it is rumored” over $30 trillion in derivatives contracts—a nominal value roughly 40 percent larger than U.S. annual GDP. A failure at DB would quickly lead to bank failures throughout Europe, in countries that lack the will or the capacity to offset the calamity with the vast increases in public spending and reduced tax burdens that would be required, alongside other emergency measures such as capital controls. He further argues that China would be unable to pick up the slack—a point I’ll dispute in a minute.

Malinen has a free-market streak, and his main scenario leans toward an Andrew Mellon–style mass liquidation, followed by recovery of the survivors. He would prefer this, for all the carnage, including physical death and destruction, to a “Green-Left fascism, suppressing both individual rights and unpopular economic activities.” Even if it were true that “Nature could be saved … but at the expense of humanity reverting to slavery and oppression.”

This seems a bit over the top. Europe may well be at extreme risk as Malinen fears; the experience of Greece in the financial crisis shows that the financial and political leadership of the European Union is ruthlessly self-protective and predatory; there is no accountability for the suffering caused or recourse for the victims. China is, however, different. The government may be authoritarian but it responds quickly—and massively—to crisis because otherwise it would not survive. Financial analysts have a bit of a blind spot with respect to China; many see that country’s banking sector through Western eyes. In reality, China’s banks are backed by the government and protected by capital controls, making them essentially inseparable from the Chinese state.

And in the next crisis, the United States may finally be moved to free itself from the deadweight of mainstream economic thought, to retire a worn-out generation of policy advisers, and to move on with the great social, economic, and environmental project known as the Green New Deal. There is a history of radical experiment and popular mobilization in this country, from which democracy emerged stronger, not weaker, than it ever was before. And for many Americans, to escape from the debt trap and from domination by bankers and billionaires into a world of work and public purpose would be the very opposite of slavery and oppression. A better word would be liberation, along with a new freedom, and a new hope. more

James K. Galbraith holds the Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the LBJ School of Public Affairs and a professorship in government at the University of Texas at Austin.

Thoughts on 30 years since the Berlin Wall came down


November 9, 1989, the night the Berlin Wall was breached, I spent the evening with an incredibly interesting woman from Finland. I had met her at a book signing of my impossibly difficult attempt to explain why pollution was a function of design and that the only effective solutions for our over-polluted world would come from the efforts of environmentally responsible designers. She had a job in radio with a voice to match but assured me that she wanted to ask questions for the book review she was writing for a newspaper.

The book signing was in February but we were still an item nine months later. I was hopelessly smitten because not only did she have those physical characteristic that make Nordic women world famous—icy-blue eyes, true ash-blond hair, high cheekbones, and those impossibly-toned legs from a life-time of commuting by bicycle and cross-country skis—but she was also a walking advertisement for Finland's justly admired educational system. She spoke five languages, was astonishingly well-read, and had that remarkable Finnish ability to summarize complex arguments into a few profound and insightful sentences. (The Finns don't like to talk any more than they absolutely have to so coming to the point is a well-practiced cultural skill.)

When I met her, I had just spent almost 8 years researching, writing, and revising my thoughts on elegant technology. I emerged from this extended self-inflicted solitude into the sunlight to be met by someone who had not only read my book but had decided it was a work of historical genius. She offered those opinions in the dulcet tones of a professional radio personality. Her book review occupied two full newspaper pages. And that wouldn't have turned your head?

November found us hanging out in central Florida (long story) so the fall of the Berlin Wall came as a complete surprise (we were distracted). I was so excited I immediately went out to buy a bottle of champagne. On the way to the cash register, I said to myself—events like this are rare, why not buy two bottles?

And so the evening was set—sufficient champagne and interesting live TV. The pictures were mostly of very happy and deliriously drunk young Germans dancing on the wall that had divided their country, while simultaneously proving that hand-held hammers were no match for hardened concrete. And while I worried that the partying kids would hurt themselves, I also concluded that I had never been that happy about anything, ever. I found the sheer joy incredibly infectious.


I had managed to visit DDR (East Germany) for only one day in 1970. The experience was very grim. Just crossing the border at Checkpoint Charlie took an hour and a half—time mostly spent looking at amount of civil engineering that had been employed in order to stop the movement of humans. While I waited, I wondered at least a couple of dozen times whether I really wanted to get inside that wall.

But then I was in. The streets were mostly empty of both traffic and people. There were occasional piles of rubble to remind us that in 1945, Berlin had been one of history's most intense battlefields. It's easy to understand that recovery from such a battle would require serious time and effort...but 25 years? If there were WW II rubble piles in West Berlin, I certainly had not seen them.

And then I saw it. A Trabant. This ugly contraption was supposed to be DDR's "people's car" and it sported such features as a smoky-smelly 2-stroke engine, the build quality of a junior-high shop project, and performance you could measure with an hour-glass. And did I mention UGLY? I was utterly stunned. Less than three weeks earlier, I had spent three hours on an industrial tour of the Porsche works at Stuttgart-Zuffenhausen where they were constructing the world-famous 911s. The distance in industrial sophistication between the 911 and the Trabant could be measured in light-years. I wondered how on earth Germans! could build something so stupid.

Soon, I discovered that the Trabi had been manufactured in Zwickau. This city has a long history in automobile manufacturing beginning with the Horch factory in 1904 followed by Audi in 1909. Digging deeper, I discovered why the ugliness of Trabant was so personally disgusting. It's a long story but I'll try to make it short and sweet.

When I was only four years old, my father moved the family to a small town in Southwest Minnesota. It was largely populated by a tiny Protestant sect called Mennonites. These people had settled the area in the late 1870s and although they had emigrated from Russia, they were German speakers. They had gone to Russia at the invitation of Catherine the Great in the 1760s who needed expert farmers. She had promised them that they could keep their language, schools, and religious practices which included their pacifism. In 1874, the new Czar, Alexander II, reneged on those promises and started drafting Mennonite young men, closing their German-speaking schools, and confiscating their German Bibles. The last outrage included the invasion of German homes looking for those now-outlawed Bibles and arresting the heads of the household if any were found. Time to get out of Dodge. Most fled to North America and settled in places such as Kansas, Minnesota, the Dakotas and Saskatchewan. They brought with them their excellent farming practices, their beliefs, and hard Red Wheat.

Even though my father was a Swedish-Lutheran pastor, he joined the local Ministerial Association and was almost immediately elected its leader. He got on famously with the Mennonites and soon enrolled us children in their local Christian Day School. I attended K-6. We were taught in English but roughly 1/4 of my classmates spoke German at home and many of the rest used some German grammar in their English. My mother, who spoke Swedish at home until she was ten, found their Germanized English quite amusing. Even so, my parents kept sending us to the Mennonite school because they were such strict pacifists—no pledge of allegiance, no war-like hymns like Onward Christian Soldiers, no playground war games, etc. My grandfathers were quite different men but both had refused to cooperate with the draft when USA had entered WW I. Turns out, the Swedes have a strong anti-war tradition too. These descendants of Vikings stopped going to war in 1814 and have not gone since.

As I grew older, I learned a great deal about the traditions of the German speakers in a preserved form. The Mennonites I got to know were not opposed to modern technology as long as it was useful—they had telephones, and tractors, and cars. My father struck up a long-lasting friendship with a Mennonite evangelist who had an airplane—a Cessna 195. One neighbor had a ham radio he built himself that he used to communicate with a missionary brother in Brazil. The preserved-in-amber forms of Mennonite / German culture came in three basic flavors—their love of music, their memory of when their religious practices had led to real physical harm, and their incredible work habits.


Music was taken very seriously. At my school, we produced a Christmas concert / play that was very popular in the town. We literally started rehearsal on the first day of school. The high school choir was so good that a few years after the director left town for a bigger school, he was named National Teacher of the Year for all of USA. My sister took pipe organ lessons from a man who gave her a teacher-student genealogy that went back to J.S.Bach. The community organized concerts of Handel's Messiah. And the Mennonite churches could sing hymns with gusto and musicality. Several could sing the Doxology in 6-part harmony A Capella (four-part at link). But my favorite memory came during small performances our grade school sang in German each Christmas at the local retirement home. My first year, we sang Silent Night (Stille Nacht) and the old folks smiled and nodded because now they were assured the we children could properly communicate with God when we got to heaven. The next year we sang Stille, Stille, Stille, the Austrian lullaby to the Christ child. The reaction was stunningly different. By the time we finished, there wasn't a dry eye in the room. I was quite upset and when I got home, I asked my mother if we had done something wrong. She speculated that they were happy. I said they didn't look happy. Then she reminded me that sometimes people weep when music is beautiful. Good enough for me. I would go on to learn much serious music sung in German—the Brahms Requiem, Bach's St Matthew's Passion, Beethoven's Ode to Joy, and a concert version of Wagner's Tannhäuser. Like most schools in USA Midwest, the teaching of German was banished in 1917 so this was as close as I got to learning the language.

Their tales of religious persecution were not for the faint of heart. One fall morning when I was in sixth grade, an old man came to our classroom and asked to speak. Our teacher was not sure what was happening but decided to give him a forum. He proceeds to tell us what it was like when the Tsar's thugs decided to barge into their tidy little home. They smashed almost everything in sight. His mother fainted from the trauma. They grabbed his father and then began to beat him savagely. The "point" of this violence was to find their German Bible. Like a good pacifist, he offered no resistance—but also gave no clue where the Bible was hidden. Eventually the thugs found the Bible, arrested the father, and hauled him off to jail. The story ended when the old man admonished us to memorize as many Bible verses as possible because "they will never find them if you have them hidden in your heart (Psalm 119:11). Not long after, one of the kids in my class showed up with a version of Foxe's Book of Martyrsthe sordid tales of the lovely ways Protestants were murdered during the Counter-Reformation. I only made it through about 40 pages. It made the old man's terrifying story seem like a day in an amusement park.

Easily the most interesting part of having Mennonite neighbors was that all adults, of both sexes, were graceful with tools. The men could build complex buildings and maintain high-powered machinery while the women had no trouble with looms and sewing machines. My most revealing moment came one day as I watched a neighbor finishing up the trim of the house he was building. "Supervising" construction projects was my favorite childhood activity and I had learned the fine art of getting as close as possible without getting in the way. My neighbor was about to install a minor piece of base molding in a closet when he discovered he had cut it about 1/2" too short. Since no one ever invented a board stretcher, this was one of those time consuming and costly mistakes. As he stood there fuming, I suggested that this was probably one of those times when he could just cut a patch or fill the gap with caulk. "Who would know?" I asked. He replied, "God would know." I suggested that God had a whole universe to run so maybe he would pass on a small piece of closet trim. He replied somewhat sternly, "But I would know." It was my first lesson in what Thorstein Veblen called "The Instinct of Workmanship."

And yes, this all has to do with my reaction on seeing that smelly, ugly Trabant. The Protestant Reformation was made up on the fly. When Luther was declared an outlaw (which meant that anyone could kill him if he got within range) he was taken into custody and hidden in the Wartburg Castle in Eisenach. He spent his time translating the New Testament from the Greek into German. When he got done, the news arrived that some of his "followers" had decided to upgrade his newfound belief set. The new zealots came from Zwickau where they had caused enough trouble so they had been banished to Wittenberg. They called themselves the Zwickau Prophets. Their "improvements" on Luther were essentially three: 1) they objected to infant baptism, 2) they believed that guidance from the Holy Spirit was as good as lessons learned from studying the Bible, and 3) they believed in the equality of man.

Infant Baptism was a minor annoyance. After all, there is no such practice in the Bible so Luther could not create much of a fuss over that issue. Luther's Reformation had already reduced the number of sacraments from seven to two and Baptism was one of them. He kept it mostly to keep parishioners happy. His insistence on the primacy of Bible study was far more intense. Luther was a scholar and wanted his followers to be literate. Besides, he had just translated the New Testament at considerable effort and risk to his life. But asking them to buy their own Bibles, catechisms, and hymnals was a financial burden that those who sought guidance from the Holy Spirit could avoid. Even today, the Protestants in poorer areas of the world are usually some variation of the charismatics (the label given to those who believe in the primacy of the Holy Spirit.) The teachings concerning the equality of man was a major trigger for the Peasant's Revolt led mostly by Thomas Müntzer. Luther wanted his followers to be solid and orderly citizens and encouraged the ruling classes to put down the Revolt. This turned into a bloody affair that killed between 100,000 and 300,000 and troubled Luther for the rest of his life. These events led to the formation of the Anabaptists. Mennonites are Anabaptists.

What this meant for our family was that on occasion, we were quizzed about Luther's hostility to the Anabaptists. At first, my father, who genuinely liked his Mennonite neighbors, would sputter some form of apology. But eventually, he would point out that their precious German Bibles were often the translations of Luther. "that was a long time ago—can't we all just get along?" As for me, I had enough problems trying to fit into a school run by Mennonites. It was one of the major reasons I absolutely hated school as a child.

The Fall of the Wall was oddly exciting and interesting for me. Why, you might wonder, would I even care. Why in 1970, when all the cool kids of my age cohort traveling though Europe that summer chose to visit places like Rome and Paris, I wanted to see Berlin and Stuttgart.
  • Berlin—that's easy. I had read a big fat book on the history of the Berlin Airlift and had become convinced it was the epicenter of the Cold War that defined and frightened my youth.
  • Stuttgart was chosen because it was such a perfect example of Wirtshaftswunder (German economic miracle)—the rise from absolute destruction to world-class enterprises like Porsche.
As I watched the joyous celebrations of the fall of the Wall, I was pretty much convinced that both questions were about to be answered simultaneously. The Wall was there because USSR wanted it there. It came down because Gorbachev no longer wanted to extract revenge on the nation that pretty much destroyed his homeland.

Our little "celebration" soon produced multiple examples of different intellectual approaches to this obvious historic event. I was the autodidact. What I knew about Berlin and DDR was a combination of my personal history and the curiosity this stimulated for readings related to this history. Example. My father had a fellow divine who would sputter in rage that the USA had traded both Thuringia and Saxony for a corner of Berlin in 1945. So now the heart of Luther's Reformation was going to be in the hands of murderous atheists who were probably going to plunder the area of its objects of history and terrify the citizens into total disbelief.

And what was a corner of Berlin worth, after all? So I read up on the Berlin Airlift. The USSR was certain that it would fail. They had watched as the Germans tried to supply their armies by air at Stalingrad and fail miserably. They had seen Leningrad suffer a million+ deaths because of a siege. And yet, as soon as USA discovered this was essentially an airplane problem, they settled in and solved it. New air traffic control. New weather forecasting. New blind landing radar. New maintenance methods. By the spring of 1949, the Airlift was even supplying special food for the Berlin Zoo. And better transport planes were on the way. I knew this stuff because I wanted to know it. I like to joke that my fascination for things related to flight came from being born in a hospital that was literally walking distance from Charles Lindbergh's boyhood home in Little Falls Minnesota.

My partner, being Finnish on the other hand, had a deep academic understanding of DDR, and the mothership USSR. She spoke both Russian and German fluently. She had an incredible understanding of the political structure of the Soviet satellite states. She knew what the USSR was capable of and what it took to remain independent in spite of a shared 1000 km border. Compared to what she knew, I was the village idiot. And yet, compared to what the USA's Deep State claimed to know about DDR and the USSR, I knew enough to debate the experts of the Warsaw Pact.

She asked me what I thought would really change when the Wall came down. I assured her that because Berlin was both the symbol and the focal point of the Cold War, the Cold War was now over. I think she rolled her eyes. I assured her that without their pointy-haired (Dilbertian) Marxist bosses, there would be no more Trabants and DDR could finally have their own Wirtschaftswunder. Peace and Prosperity—what more could you want? And I raised my glass in another champagne toast.

She shook her head slowly and sadly stated, "I believe it will not take very long for these celebrating volk from DDR to realize how much they miss of their old country." I'm sure I had a look of complete disbelief. So she continued, "The people of DDR may not have the riches or consumer choices of West Germany, but they have many things that are much more important. Everyone has a job. In spite of their perennial housing shortages, no one is homeless. In spite of the fact that people must stand in line to buy food, there is no malnutrition, hunger, or starvation. The women of DDR have more benefits and job security when they decide to have children than any other women on earth. And you know those world-class schools we have in Finland? A great many of our pedagogical theories came straight from DDR."

As she talked I came to understand that what was really bothering her was that this was the end of an era. I was not clear what her politics had been when she was a University Student in the 1970s but it was possible she had been a member of the Finnish Communist Party. She had even won a scholarship to study for a year in Leipzig DDR. Socialism was on a roll. Mao's little red book was outselling the Bible and Koran worldwide. The Vietcong were kicking American Neo-imperialist butt. The Social Democrats, a socialist interpretation of industrialization, had been running Scandinavia for nearly 50 years. They were the future! And now they weren't anymore.

The more she talked, the more morose she got. I was beginning to think that I should have only bought one bottle of champagne. Suddenly she brightened and smiled, "But I forget the greatest tragedy of them all. With the Berlin Wall down, where are the American politicians going to go to give their hopelessly embarrassing speeches about democracy?"

I exploded in laughter. It was easily the funniest political crack I had ever heard in my life. I was still laughing about it a week later. In fact, just recalling it tonight while I tell this story made me giggle. Whatever the term democracy ever meant in USA, there was certainly not much left after the presidency of Ronald Reagan.

Giggling, we hauled the last of the champagne into the bedroom. When it came to sex, I was still the autodidact and she was still the product of a world-class education that included sex education starting in second grade. The streaks of a false dawn were beginning to creep along the eastern sky when we finally called it a night.

After 30 years, it is useful to look at how our Nov 9, 1989 predictions turned out. My predictions turned out especially badly. The Cold War has been revived and it is still as ugly as it was during my childhood. Worse, the promises of prosperity were buried under the neoliberal BS that had swept the West during the 1970s and 80s. I knew that Thatcherism / Reaganism had seriously altered the global economic landscape but I had assumed that the Germans would not fall for that idiocy. I forgot that the USA economists who supervised the rebuilding of Germany after WW II were trained in the notions of the New Deal—it was their ideas that had produced Wirtshaftswunder. By 1989, they had been replaced by the acolytes of the Chicago School of pirate capitalism. And their ideas produced the monstrosity called Treuhandanstalt.

Treuhand was set up just months after the fall of the Wall and well before German reunification became a reality. After a few false starts including the assassination of its first director a few weeks after its founding, they got down to the business of serious plunder The job of Treuhand was to privatize the public property of DDR. It was financed by the West German public with a "solidarity tax." The corruption was massive. Over 2.5 million in DDR lost their jobs. Very few enterprises were successfully privatized. Not surprisingly, the Trabant was no more.

When my partner had suggested that soon people would be longing for the old DDR, I thought it very unlikely. After all, if there were things worth saving, I had been taught, why would a country go to all that trouble to keep the inmates from escaping. They actually shot people. I am pretty certain that in the first 40 years of my life, NO ONE had ever suggested that Socialism had produced anyone who would willingly choose such a political organization.

And yet, nostalgia for DDR soon sprang up like mushrooms after a spring rain. The Germans even created a word to describe it—Ostalgie. This movement wasn't widespread and was often just a hobby for collectors but it produced some restaurants and shops. It also produced an utterly charming movie called Goodbye Lenin—which tells the tale of a devoted son who for medical reasons, tries to recreate DDR for his mother so she wouldn't die from the shock of DDR being gone forever. This movie was first released in 2003 and came to USA in May of 2004. I almost never go to movies but I had to see this one. It was subtitled but a group of German speakers sat just down the row from me and judging from their nearly continuous laughter meant that apparently, with the right background, this movie is hilarious. It was also a hit. Produced for a mere 4.8 million Eur, the movie would gross almost $80,000,000. I walked out muttering about my 1989 partner, "She was right, she was right." Because even though the movie was an exaggeration, it was also believable.

After that, I had to admit that I had lost the prediction battle in a blowout. Yes Trabant had been unmercifully buried but its more enlightened replacement has taken 30 years. Volkswagen has announced that its Zwickau factory will be their first that produces nothing but electric cars. Elon Musk just announced that Tesla's first European gigafactory will be built just southeast of Berlin. In other news, the former areas of DDR are still an economic mess.

On October 9, 2009, a concert was held in The St. Nicholas church in Leipzig. It was conducted by a very aged Kurt Masur to celebrate the 20th anniversary of the night when the rumblings from below spilled out into the streets. All day long in 1989, people had been worrying about the reaction from the authorities backed by the notorious secret police of DDR, the Stasi. The worries were not unfounded. In June of 1989, a young man protesting the government of China stood in front of a tank to give symbolic action to his grievances. He was driven over and killed on live TV. Rumors swept Leipzig that the hospitals were stocking up on blood.

The meeting of the dissatisfied of DDR had become a regular feature since September. The clergy of St. Nicholas provided a space for the would-be demonstrators on Mondays. The demonstration planned for Monday October 9th promised to be a doozy. The police certainly thought so and turned out 8000. All day, significant citizens like Masur of the Gewandhausorchester-Leipzig went on radio and called for calm. When the march began, over 70,000 had shown up (in a town of 500,000). The protests against the government of DDR had entered a completely new phase. One month later, the Berlin Wall had been breached and soon the DDR was no more.

My father's friend who bemoaned that USA had traded away Saxony for a corner of Berlin would never have believed it. He was sure that the occupation of USSR Marxists would have destroyed the Lutherans of Saxony. And statistically, he was right. Yet here was the Lutheran church being led by a pastor who was giving his complete support to a movement that would topple a government.

One of the selections for the 20th anniversary concert was Bach's double motet "Fürchte dich nicht" BWV 228 (Be not afraid). It was sung magnificently by the Thomanerchor Leipzig—the organization directed by Bach himself from 1723-50. Luther himself had faced down the Holy Roman Emperor at Worms. Lutherans almost never show great moral courage, but we have that tradition and on Nov 9, 1989, the Lutherans of Leipzig got a chance to prove it once more. And like good Lutherans, they got courage from singing.

The triumph of the squares


The 50th anniversary of the first moon walk has caused me a full-blown geek-out. I remember the space race with fondness. Aerospace was the biggest story out there. The 50s and 60s saw an explosion of technological growth. Some favorites of mine from that era include the F-104, the U-2, the SR-71, the Boeing 707, 727, and 747—the "jet age" planes that changed travel and even music by democratizing flight.

I "graduated" from my Erector Set stage straight into model airplanes—the ones that flew and made a bunch of noise. And even though the space race was on, I was never seduced into model rocketry. It was expensive and the available examples didn't do much—restricted as they were by the same sort of regulations as fireworks (which where I lived were essentially outlawed.)

Real-world rockets were kind of boring as well. The most notorious of the test pilots out at Edwards Air Force Base (Chuck Yeager) even labeled the early astronauts as nothing more than "spam in a can." After all, the first "American" in space was a chimp. But that wouldn't last long. The original astronauts were extremely competent test pilots and before long, they were demanding greater control of their missions.

Even so, I was far more interested in the flight testing at Edwards where they pushed the limits of supersonic flight with real airplanes like fighters jets. But soon, they eventually embraced rocketry with the incomparable X-15. They had to. If you want to set speed and altitude records, eventually you run out of atmosphere where air-breathing power-plants simply do not work. The X-15 was insanely fast, complex and dangerous. It wasn't going to be piloted by a chimp. In fact, these things required the skills of the best pilots we could find. And I had a favorite—Neil Armstrong.



Armstrong was a superb pilot. On one mission a failure of a new instrument caused him to fly nearly 50 miles beyond where he was supposed to turn back to Edwards. His propulsion was spent so he was flying a glider with the aerodynamic performance (4:1 glide ratio) of a brick. He nursed that X-15 back to Edwards coming over the lake bed at less than 100'. This would be the same guy who landed on the moon with less than 30 seconds worth of fuel.

His degree in aeronautical engineering came from Purdue. This is NOT a school that grants engineering degrees to goof-offs. In fact Purdue would contribute a serious fraction of the top engineers to the space program. The rest mostly came from State Universities in the USA Midwest like Michigan.

He grew up in Wapakoneta, Ohio about an hour north of Dayton—the home of the Wright Brothers. His father paid for a ride in a Ford Tri-motor at 6. He soloed an airplane on his 16th birthday (the legal minimum age) and spent much of his childhood building model airplanes. This last fact is what endeared him to me. I too built model airplanes which were insanely difficult to get to fly well. The problem is that models and real airplanes conform to the same laws of nature which means to indulge in this hobby, it really helps to learn things like fluid dynamics, lightweight structures, and drag coefficients. You know—kid stuff.

Yes that is me with a model that required at least 150 hours to build. Didn't fly very well—too little power and too much paint.



Flying is something that only happens on the boundaries of perfection. You can get 15,000 things right and one wrong and your precious airplane is a flaming heap. Good pilots are followers of check lists—as diligent on the 1000th time through as the first. They read the operator's manuals. They know what all those switches do. They understand that dishonesty and corner-cutting could end their lives.

Armstrong was notorious for insisting on understanding every part of his aircraft. He wanted to know what everything was supposed to do and what it COULD do in an emergency. But even better, he understood that flying is a team effort and it was critical for every member of the team to take their jobs seriously. Here's what he says about the people who built Apollo.
Armstrong: Each of the components of our hardware were designed to certain reliability specifications, and for the majority, to my recollection, had a reliability requirement of 0.99996, which means that you have four failures in 100,000 operations. I've been told that if every component met its reliability specifications precisely, that a typical Apollo flight would have about [1,000] separate identifiable failures. In fact, we had more like 150 failures per flight, [substantially] better than statistical methods would tell you that you might have.

I can only attribute that to the fact that every guy in the project, every guy at the bench building something, every assembler, every inspector, every guy that's setting up the tests, cranking the torque wrench, and so on, is saying, man or woman, "If anything goes wrong here, it's not going to be my fault, because my part is going to be better than I have to make it." And when you have hundreds of thousands of people all doing their job a little better than they have to, you get an improvement in performance. And that's the only reason we could have pulled this whole thing off.

The Triumph of the Squares

Nearly a year after the landing of Apollo 11, NASA head Thomas Paine gave a commencement address at Worcester Polytechnic Institute where he declared that the successful moonshot was a triumph of the squares, the validation of the values of "Squareland" which he listed as foremost a profound faith in reason. It was "outward looking and mathematical," was "time oriented...and deeply concerned with future consequences." It "accepts as true only rational facts and theories which predict future events with mathematical precision under rigorous standards of reproducibility. Only Squareland's rationality could ensure the "crops yield, lights light, bridges carry loads, children avoid polio, and men walk on the moon." In fact. to Squarelanders, a solid definition of "truth" might be "that which successfully takes two men to the moon."

This speech made me groan and roll my eyes. On one hand, going to the moon really DID require the "square" virtues that Paine so celebrated. Beside, I was clearly a prototypical "square" (see photo above.) Building airplanes sort of demands squareness. I was also the son of a small-town clergyman—building airplanes was one way of staying above the reproach of the church ladies. On the other hand, this speech set off the scolds who assumed that "square" virtue included an unquestioning support of the Vietnam War, a marked preference for booze over pot, white shirts and neck ties, and above all, short hair for men.

Unfortunately, the space race had been sold as Cold War macho and a real-live Nazi named Wernher von Braun was chosen to head the effort. So the link between the space race and unbridled militarism was pretty damn short. NASA was acutely aware of this problem. It was one of the reasons that Neil Armstrong was chosen to take the first step—he was the only civilian pilot to have reached his advanced status. This turned out to be an excellent choice. In the goodwill tour following the moon landing, he charmed his listeners around the world into believing that this was a triumph of human (not American) genius. The reason this worked is because Armstrong deeply believed it was true.

But while the moon landing was clearly a triumph of the squares, the squares would not triumph. By 1972 the Apollo program was ended and no human has gone beyond low-earth orbit since. The can-do attitude of Apollo has so completely disappeared from American culture that many now actually believe the landing was a hoax. It is probably more accurate to call Apollo "Peak Square" because the vast majority of my fellow citizens in 2019 look on a profound faith in reason as a weird psychological disorder.

BBC calling

In the summer of 1970, I found myself in UK. I kept running into people who wanted to talk about the moon landing. Most of them were very well informed. I had to scramble to keep up at times. One night in London, a waitress in a pub sat down next to me and asked if I was the American space expert she had overheard. I humbly admitted I was probably who she was looking for but I was FAR from being an expert. Then she asked, "How did they know how long the burn for the lunar insertion midflight correction should be? And how did they know they were pointing the engine in the right direction?" I didn't have a canned response so I pulled out my understanding of inertial navigation. It wasn't a very good answer but she seemed to understand, smiled and went back to work. I was left wondering just how a random London barmaid knew enough to even ask such good questions.

In 1978, PBS would air a 10-part series called Connections starring a fascinating storyteller named James Burke. (There was a companion coffee-table book by the same name). Burke had carved out an awesome assignment for himself. He wanted to explain the products of the modern world (computers, plastics, powered flight, etc.) in such a way that his listeners would understand how their world came to be. It was absolutely brilliant. Episode #1 The trigger effect traced the development of a modern city like New York back to the invention of the plow. The nine that would follow were equally good. Somewhere along the way we are informed that Burke was the man who covered Apollo for BBC.

AHA! That explained why the Brits knew so much about the moon landing—at least partly. So in the near-infinity of Apollo 11 at 50 coverage on YouTube, I went looking to see if I could find any of Burke's descriptions. I found a good one—an hour of Apollo highlights.




Just in case you need a reminder of how utterly lame the Apollo coverage was on USA corporate media, here is an example from ABC. I am pretty sure all the CBS and ABC coverage of the whole mission can be found at YouTube.

Of all the footage of the Apollo 11 mission that I have uncovered in the past few months, the following may be my favorite. It was done by NASA and has even more in capsule footage than the recently released Blu-Ray of Apollo 11. Of course, the new version has far superior imagery because restoration techniques are so much better. But this one is narrated by Wernher von Braun himself and the technique he used is to compare the 1969 effort against the description of a trip to the moon from Jules Verne's 1865 From Earth to the Moon.





As for the speculation that the Apollo program could provide a template for how this nation should take on the challenges of climate change, my responses are:

It might work
  • If we can restock our seriously depleted supply of "squares."
  • If we can find leadership that understands that this problem will be at LEAST 1000 times more difficult than the moon landing—and that's the best reason to do it.
The HILL looked at this possibility in more depth: Apollo as model for climate change.

It’s payback time, folks


There are moments when I simply cannot muster the energy to be a "good sport." Whenever I think about how this country just wasted 2+ years playing an ultra-corny version of spy vs. spy,  I literally want to see heads roll. It was not just the non-stop lying, it's that the lies were so stupidly unbelievable. And for extra fun, these lies were retailed by some of the writers I have read over the years on sites I once visited regularly—The Guardian, Smirking Chimp, Crooks and Liars...

Karma can be a bitch. Smirking Chimp is having trouble paying the bills. The Guardian will have serious problems recovering from Luke Harding's crazed book Collusion. Ms. Russiagate hoaxer, Rachael Madcow has taken a serious hit to her ratings.

I could be talked out of demanding the return of the guillotine, I guess, if we could all agree to stop listening to these partially developed minds stuck in their "tell me a story" phase of intellectual development. Personally, I am stunned that in a country of 315 million souls we cannot come up with the few thousand functioning adults necessary to organize a government.

Bob Mueller is 74. He probably won't be with us much longer. Writing his epitaph won't be easy. It difficult to say nice things about someone who knew his "investigation" was utter BS yet wasted the lives of the nation for years while he tried to come up with a reason to not tell us he had no case.

Robert Mueller Is in Serious Legal Trouble - Here's Why

James Howard Kunstler, 5/10/19

For the Progressive Democratic “Resistance” (PDR), post-Modernism is in full flower. They have ruled objective reality inadmissible. There are only stories — his story, her story, they’s story, zhe’s story, and you must believe them because they come out of lived experience — for instance the lived experience of having lost a sure-thing presidential election to a cartoon character with zero political experience, and then having lost the grand inquisition to oust him. For the PDRs, the metaphysical concept of reality refers to some land of dark make-believe over a distant horizon where numbers supposedly add up (ha!) and the actions of persons are said to entail a strange cosmic condition known as consequence.

Now that the Mueller Investigation has concluded empty of charges — despite two-plus-years of sedulous effort by fiercely dedicated antagonists of its target — everything about it, including the sacred Mueller Report, begins to emit odious vapors like unto a rump roast that has laid uncovered in a pantry for three weeks, attracting the attention of flies. The PDRs might think twice about a closer examination of all that festering material. What they’re liable to find is evidence of how slovenly and dishonest it was and how the revered legal maestro in charge of composing it may well be subject to charges himself of obstructing justice and malicious prosecution.

Information emerged over the weeks since the Mueller Report’s release that Mr. Mueller and his team knew unequivocally that the Special Counsel’s mission and the FBI operations that preceded it were based on concocted political bullshit supplied by Mrs. Clinton and her network of flunkies and fixers, ranging throughout the permanent DC bureacuracy (a.k.a. the Swamp), to outposts in foreign intel services and the political kitty-litter box known as Ukraine. Mr. Mueller must have suspected this from the outset, but knew for sure by the summer of 2017, and omitted to advise the American public that he had uncovered a fraud. Rather, he rode on the back of that fraud for two years, as if touring a political landfill on a donkey, leaving the public to stew in anxious hallucinations.

What else did Mr. Mueller do, or omit to do? He never engaged US government forensic computer analysts to examine the DNC servers at the heart of RussiaGate story. Rather, he allowed the conclusions to stand of a company called CrowdStrike, hired by the DNC itself to supposedly investigate the theft of emails, especially those of Clinton campaign chairman John Podesta. (See Craig Murray’s commentary on all this.) Mr. Mueller never bothered to interview the one person who might have known exactly who supplied the purloined emails to Wikileaks, namely Julian Assange. Mr. Mueller also did not bother to interview several dozen retired Intel Community computer experts, led by William Binney, former Technical Director of the NSA, who determined that the hack was accomplished by direct download by an insider onto a flash drive.

What could possibly be the explanation for these blunders. Well, we’re going to find out in the months ahead. The DPR chairs of various House committees have threatened to ask Mr. Mueller to testify. Bring it on, I say. He sure has some ‘splainin’ to do, if not in those venues, then in a more than a few grand juries that will be convened to assess the actions of his confederates-at-law from every hummock and gator pool in the Swamp. These various parties may also seek to understand why Mr. Mueller omitted to mention the now reeking Steele Dossier in his 444-page report, and why in his 20-plus page recounting of the oh-so-crucial Trump Tower meeting he never disclosed that the two Russians present were on the payroll of Hillary contractor FusionGPS, and met with its principal, Glenn Simpson before and after the meeting. It does give off a scent of “colluding with Russians,” except obviously the odor came from the wrong direction.

House Speaker Nancy Pelosi declared yesterday that we are in a constitutional crisis. You’re darn tootin’ we are, but it’s not coming from the flaccid threats of legal imbecile Jerrold Nadler (D-NY), who wants to prosecute the Attorney General, Mr. Barr, for refusing to make public grand jury records in the Mueller report — since the law requires Mr. Barr to not disclose the material. The crisis she mis-identifies is the coming indictment of so many supposedly untouchable and hallowed public figures, up to and including the former president, Mr. Obama, and the former heads of CIA, Mr. Brennan, and Director of National Security, Mr. Clapper, former Attorney General Loretta Lynch, the sainted Mr. Mueller, a whole posse of former Intel Community subalterns, and an unholy host of creeping, crawling, and flying swamp creatures from Glenn Simpson to the shyster lawyers at DNC law firm Perkins Coie, to the errand boys at the Cable News Networks, Wash-Po and The New York Times who trafficked in leaked perfidious documents — that the cumulative institutional damage will destroy public confidence in constitutional government per se.  more