My Review of Mike Wallace's Gotham at War: A History of New York City, 1933-1945

 Big Apple History Through a Socialist Lens

 

Self-professed leftist historian and John Jay College professor, Mike Wallace has written a history of New York City through the New Deal years and World War II. In reading this long book (976 pages in the print edition), it seemed that it took the full thirteen years of his history. Needless to say, the book is way too long and covers way too much minutia.

 

Wallace discusses at length how the city’s various ethnic groups approached the coming of World War II. His view of New York’s ethnic groups is through the lens of cultural pluralism. Although that view has some merit, he ignores the fact that New York was becoming more homogenized and, on its way, to being a melting pot. He ignores two facets causing this. This first is that the public schools were inculcating Americanism into the minds of its students. Second, he ignores the roll of baseball which put sometimes antagonistic ethnic groups in rooting for their respective teams. Indeed, the Yankee-Dodger subway World Series was a classic and no matter which team they were rooting for, fans marveled at Joe Di Maggio's 56 game hitting streak.

 

With Hitler’s coming to power in 1933 New York’s Jews, the largest Jewish community in the world, stood as one against him. They had to face off against local Nazi’s in the German American Bund and plea with Roosevelt, to no avail, to open immigration for Jews fleeing Europe. Here Wallace ignores the role of the New York mob which stood foursquare behind the Jews in breaking up Nazi rallies. ( Shulmaven: My Amazon Review of Michael Benson's "Gangsters vs. Nazis" ) Wallace rightly notes the perfidy of New York Times publisher Arthur Sulzberger in his downplaying of the Holocaust.

 

Wallace is all-in on the New Deal and LaGuardia’s social democratic vision for New York. What he ignores is that LaGuardia’s vision was funded by a hugely disproportionate amount of dollars flowing from Washington D.C.  Those who followed him did not have the largess of Washington behind and that put the city on an unsustainable fiscal path. Simply put, to him business was bad and government was good.

 

True to his beliefs Wallace spends an inordinate amount of time on the three-way split between, the communists, the socialists, and the New Deal liberals. This would play out in the dumping of Henry Wallace as Roosevelt’s VP in 1944. He also ignores the real gravity of the Rosenberg spy ring which went well beyond atomic spying.  

 

Wallace is particularly good at discussing the policy differences between the Fighting Liberals and the Wall Street Warriors in their focus on bringing the U.S. into the war. Both groups had decidedly different war aims. The Fighting Liberals wanted to globalize the New Deal while the Wall Street Warriors following Henry Luce's "Amercian Century,"  wanted to establish U.S. hegemony.  Incidentally, both supported free trade. Many of the architects of the Cold War who came out of Wall Street banks and law firms are here. They include Dean Acheson, James Forrestal, Paul Nitze, and John Foster Dulles, who by the way was too cozy with Nazi Germany in the 1930’s.

 

We also have a whole bunch of folks who featured in childhood growing up in New York City in the 1950’s. The include future U.S. Congresswoman Bella Abzug, feminist Betty Friedan, governors Dewey, Harriman, and Rockefeller, expert builder Robert Moses, Congressman Adam Clayton Power, Mayor Robert Wagner Jr., Attorney General Herbert Brownell, civil rights leader Bayard Rustin, and builder Bill Zeckendorf.  All-in-all, quite a cast of characters.

 

The book ends with a discussion on planning for the postwar world. There were many plans drawn up under the belief that the New Deal was still alive. It wasn’t and it pretty much died after the 1938 election. To my mind the planners failed to understand that what New Yorkers wanted were automobiles, houses, and babies. They did not want to be cooped up in apartments the planners imagined. Those desires set off the race to the suburbs of Long Island, Westchester, and New Jersey and if you really think about it represented a continuation of the trend that was established in the 1920’s that was interrupted by the depression and the war.

The Economic Obsolescence Risk to NVIDIA GPU's

The financial press has had a field day in discussing the depreciation risk associated with high end NVIDIA GPU chips. However, lurking beneath the surface is the risk of economic obsolescence. That risk will come from the availability of lower cost chips such as the Google Tensor processor. Moreover, additional competition will come from Amazon and Elon Musk who are developing their own chip sets.

The arithmetic is simple. A high-end NVIDIA GPU chip set costs about $60,000 of that $43,800 represents NVIDIA’s extraordinarily high 73% gross margin. In this example NVIDIA’s cost is $16,200. Herein lies the risk. Lower cost chips produced, at say a more normal, but still high 60% gross margin would yield a price of $40,500. Thus, AI competitors using the newer chips would have a significant 1/3 cost advantage thereby rendering the existing NVIDIA chips economically obsolete. In a way NVIDIA could very well become a victim of its own success.

To be sure, NVIDIA is a technological behemoth, and it has its CUDA software to lock in existing customers. Nevertheless, the mere existence of a 73% gross margin will ultimately bring price competition into the GPU landscape.

The Fed is a Prisoner of the Stock Market

After a 6% sell-off from its all-time high the S&P 500, New York Fed Governor John Williams said on Friday that “I still see room for a further adjustment in the near term to the target range for the federal-funds rate to move the stance of policy closer to the range of neutral,” Stocks immediately responded to the signaled rate cut with a strong rally ending the day well off their highs, but up 1% at the close.  Yes, the Fed put is still alive and well.

 

It was no accident that Williams spoke when he did. Put bluntly the economy is being fueled by the bull market in stocks which is enabling the huge investment boom in artificial intelligence and spending by high income investors. Should the stock market falter, both investment and consumption will stall out, triggering a recession.

 

While the stock market has been chugging along the labor market has been weakening and inflation is running at a 3% rate, 1% above the Fed’s target. Were it not for the recent stock market weakness, the Federal Reserve Open Market Committee would be facing a close call in its upcoming December meeting in trying to meet its dual mandate of maximum employment and price stability.  Instead, it will likely opt to lower interest rates to appease the stock market.

 

By lowering rates, the Fed will run the risk that investors will soon realize that supporting stock prices will be added to the dual mandate. In the short run that could add fuel to the bull market, but over time investors will realize that the 2% inflation target has given way to 3% or higher to the detriment of both the inflation and labor market mandates. Thus, by being a prisoner of the stock market the Fed will have lost control of its dual mandate and ultimately it will fail because the stock market is too big for the Fed to tame.

American Jews: Between a Rock and a Hard Place

American Jews are between a rock and a hard place politically. With the Democratic Party increasingly dominated by Hamasnicks and the DEI ideology of oppressors versus oppressed where Jews are characterized as oppressors, belonging to the party of our ancestors no longer seems to make sense. For a while, the Republicans appeared to be immune from the antisemitism of the Democrats, but that immunity is no longer there.

 

With Heritage Foundation president Kevin Roberts sucking up to the antisemitism of Tucker Carlson, the American Right has moved closer to whiffing the noxious fumes of antisemitism. Adding insult to injury, Tucker Carlson’s friendly interview with the noted antisemite and Hitler/Stalin lover, mainstreamed Nick Fuentes, and his Groypers into the heart of the Republican Party. I would note here that Tucker Carlson’s son Buckley is now on JD Vance’s staff. History could very well record that the assassination of Charlie Kirk took from us on of the few conservatives who could take on Carlson and Fuentes.

 

To be sure there is real opposition to Fuentes and his gang coming from more establishment Republicans, notably Ted Cruz, but just like the Democrats the energy is with the extremists. Indeed, supporting antisemitism and anti-Zionism is part of a proxy war within both parties to overturn the current status quo. 

 

As a result, it is not comfortable to be a Jew in either party today. However, we have no choice because we have to take the world as it is rather than as we want it to be.

 

So, what is a Jew to do? To me Jews in both parties should fight and fight hard. They should not cower to the bullies in either party and instead take them on aggressively in party councils, the media and in every social interaction. We should remember the lessons pf the 1930’s where cowering in the face of evil does not end well. Further, pressure should be put on all of the Jews who make common cause with the antisemites. Those Jews should either mend their ways or be regarded as fifth columnists.

 

In the meantime, it would not hurt to take self defense classes and weapons training in the event things turn really ugly. As the saying goes, prepare for the worst, and hope for the best.

The Democrats Snatch Defeat from the Jaws of Victory

The way I see it the Democrats won the political battle over the government shutdown, but as soon as they attacked the deal they committed an unforced error and gave Trump and the Republicans a victory.  Instead of looking like winners the Democrats became losers. How so? With the shut down the Democrats proved they were no longer comatose and were ready to fight Trump and that stance along with Trump voter buyer's remorse set the stage for huge victories in the off-year election.

On the governing side the Democrats achieved robust funding for the SNAP program, the rehiring of riffed workers during the shutdown and were guaranteed a vote on the Obama Care subsidies in December. The Dems have made short shrift of the pledge for a vote on the subsidies. but here they are wrong. The vote will place the Republicans at the horns of a dilemma. If they do nothing, the Dems will have the perfect issue for the mid-terms and if the Republicans compromise with a lower income limit and a minimum premium the Democrats would have achieved their major goal policy goal for the shutdown. The Dems win either way.

Thus, instead of vilifying the eight Democrats who broke the filibuster, they should in turn, commend them for their political savvy and common sense. Sometimes, in politics, you have to know when to take a win.  

My Review of Ray Dalio's "How Countries Go Broke: The Big Cycle"

 Paying the Piper

Ray Dalio, the founder of Bridgewater Associates, which became the world’s largest macro hedge fund, has written an important book on the inexorable reality that accumulated debts have to be extinguished one way or another. He utilizes a host of international examples and aside from the U.S. he focuses in on Japan and China. No matter the country, the piper has to be paid. Dalio’s big cycle lasts approximately 80 years, and it is in many ways similar to the long cycles discussed in Neil Howe’s “The Fourth Turning.” (See: Shulmaven: My Review* of Neil Howe's "The Fourth Turning is Here: What the Seasons of History......" ) It seems that we are on the precipice of Dalio’s big cycle joining  the crisis point  of Howe’s generational cycle. If that is the case, the turbulent time we are now living in is only in its early stages.

 

Dalio’s debt/credit/economy cycle big cycle is made up of a series of short cycles where credit expands and contracts. However, overtime debt increasingly accumulates because it does not generate the revenue needed to service it. The monetary authorities accommodate the increase in debt by going from MP0 where money is tied to a fixed standard, like gold to MP1 where policy is tied to a policy rate to MP2 where through quantitative easing money is printed. At the end of the day when the debt can no longer be serviced at reasonable interest rate, the debt is either directly repudiated or inflated away in order to deleverage the economy. If the debt is not denominated in local currency, it will be repudiated.

 

Overlapping the credit cycle are two other cycles and exogenous events such as acts of nature and the introduction of major innovations that spur growth. The cycles are an internal political cycle evolving around order/disorder and an external cycle similarly revolving around order/disorder. Today the confluence of the big credit cycle with disorder in both internally and externally means Howe’s fourth turning is upon us. What can mitigate this eventuality or make things worse will be the impact of innovative artificial intelligence on our society.

 

Dalio’s solution to the big cycle calls for reducing the federal deficit as a share of GDP from the current 6% to 3% by increasing taxes, lowering spending and lower interest rates. Similar to the 1990’s deficit reduction, if credible, would work to lower interest rates. Some of these nostrums sound similar to what the Trumpies are arguing, except the part about tax increase, tariffs aside. The Trump way of lowering the debt/GDP ratio relies heavily on much lower long-term interest rates that would bring with it other issues.

 

Dalio is clearly worried, and he makes a compelling case to be worried. My criticism of the book is that although he highlights his main points in bold, it still is way to repetitive and because I read the book on my Kindle, the numerous charts were too difficult to read. I therefore would recommend the hard copy.

Havana on the Hudson - Part 2

The Democrats had a great election night winning in New Jersey, Virginia, California, Pennsylvania and Georgia; Donald Trump and the Republicans had a terrible night as voters, especially Latinos, suffered from buyers’ remorse over their votes in 2024; and New York City, especially its large Jewish community, had a horrible night with the election Zohran Mamdani, the antisemitic socialist as mayor. With Mamdani’s plans to build socialism in New York, the city is now further down the road to becoming Havana on the Hudson. (See: https://shulmaven.blogspot.com/2025/06/havana-on-hudson.html )

 

Mamdani plans called for a rent freeze, a massive public housing program, free childcare, free buses, city owned grocery stores, handcuffing the police, $30/hour minimum wage, and much higher taxes on businesses and high-income New Yorkers. For much of this he needs legislative action from Albany. Although most believe that action will not be forthcoming, you can’t count on the wimpy Democrats on holding firm against him. They could very well cave.

 

Mamdani’s program more than anything else is focused on reducing New York’s high rents. Building more apartments will certainly help, but that will not bring relief in the short run, and a rent freeze will actually raise rents on city’s non-rent-controlled apartments. Indeed, the only way Mamdani could lower rents would be for the city to return to hellhole it was in the 1970’s with crime running rampant. Although Mamdani said he would reappoint Jessica Tisch, the highly regarded police commissioner, they have yet to speak and one wonders what Tisch’s conditions would be for her to stay. In a straw in the wind Fire Commissioner Robert Tucker resigned today over Mamdani’s severe anti-Israel stance.

 

For those Jews who are complacent about Mamdani, I would warn them the Mamdani is anti-Israel to his core. Anti-Zionism is what got him into politics in the first place. My question is with Mamdani as mayor, who will protect the Jewish community from street and subway attacks and the defacement of synagogues which actually started last night?

 

Mamdani is no joke, this TikTok Jacobin will have real power and for those with the means it might just make sense to leave the city before it is too late.