Wednesday, October 11, 2017

My Amazon Review of Glenn Frankel's "High Noon: The Hollywood Blacklist and the Making of an American Classic"

High Noon in Hollywood

I recently attended a screening of “High Noon” with Glen Frankel giving a short talk. I forgot how good this 1952 movie is. In his book Glen Frankel tells the story of the making of this low-budget black and white movie, his protagonist the screen writer Carl Foreman, the producer Stanley Kramer, the star Gary Cooper, the composer Dimitri Tiomkin,  and the very strong female roles of Grace Kelly and Katy Jurado against the backdrop of the growing “red scare” in Hollywood. Who knew Dmitri Tiomkin, a Ukrainian Jew,  wrote the musical score for such westerns as “Red River,” “Duel in the Sun,” “Giant,” “Gunfight at the O.K. Corral and of course, “High Noon.”  Frankel notes that Tiomkin’s biographer likened him to putting a musical score to the classic western paintings of Frederic Remington and Charles Russell. He also discusses how the movie’s theme song “Do Not Forsake Me Oh My Darlin” became such a big hit.

But Frankel is not only interested in the creation of this classic, he is also interested in the role of the Communist Party in Hollywood and the blacklist that was to come in the late 1940s and early 1950s. Screenwriter Carl Foreman was a communist for a while and then abandoned the Party, but he along with the Hollywood 10 (screen writers who refused to talk before the House Un-American Activities Committee and were jailed) refused to name names and ended up in exile in England.

In Frankel’s view “High Noon” is an allegory to Foreman standing up to the committee. Gary Cooper as Marshall Kane successfully stands alone as the townspeople abandon him to face four returning outlaws seeking revenge. The townspeople represent those in Hollywood who cringe in the face of the committee, many of whom were like the liberals Dore Schary, Elia Kazan and Ronald Reagan (a big liberal at the time).  The story brings to mind Henrik Ibsen’s “An Enemy of the People” where the bravest are the ones who stand most alone.

Frankel is clear-eyed when he discusses the perfidy of the American Communist Party in the late 1930s and the early 1940s. But somehow he seems to me to be way to forgiving of the Hollywood communists. He leaves out that Moscow targeted the New Deal, the C.I.O., the defense industry and Hollywood as pathways for subversion. The Hollywood 10 writers were following orders from Moscow and were working towards bringing Soviet Communism to America. They weren’t all that successful, but the intent was clear. I wonder if instead of being communists they were Nazis would Frankel have been so forgiving? Yes it was a bad time and yes civil liberties were being trampled upon and yes the fears of the public were legitimate. Frankel recognizes this when he cites the Venona transcripts which describe Moscow’s control of American Communism.


Despite my disagreements, Frankel has written an excellent book that tells us how a great movie was made and the fears that bestrode liberal Hollywood in the 1950s.





Sunday, October 8, 2017

My Amazon Review of Diana B. Henriques' " A First-Class Catastrophe: The Road to Black Monday, The Worst Day in Wall Street History

The Sorcerer’s Apprentice

On October 19, 1987, the very day of the crash that brought stocks down by 22%, I was flying to Colorado Springs to present a paper at the annual Q Group conference. Many of those in attendance were in up to their eyeballs in the quantitative finance that was putting the market decline into overdrive. New York Times reporter Diana Henriques has written an intriguing story about the plumbing of the financial markets where conflicting regulators, the rivalry between the cash market in New York and futures market in Chicago, and the emergence of quantitative finance in the form of portfolio insurance/dynamic hedging forced the stock market to turn in on itself much like the sorcerer in the Hall of the Mountain King.

She tells a very good story about the personalities that fueled the rivalry between the SEC and the Commodity Futures Trading Commission and its parallel rivalry between the New York Stock Exchange and the two Chicago futures exchanges, the “Merc” and the Board of Trade. The upshot driving the controversies was that, contrary to what most people expected, the futures market drove the cash market, a phenomenon that the regulators were not ready for.

She also is very good describing the academic and business origins of portfolio insurance where the theories of two Berkeley business school professors, Hayne Leland and Mark Rubinstein merged with the business smarts of John O’Brien to form Leland O’Brien Rubinstein & Associates (LOR) to market their new product. By the way, I overlapped with Rubinstein in the UCLA finance Ph.D. program in the early 1970’s. At its core the problem with portfolio insurance is that it required a continuous trading in the cash, futures and options markets. A breakdown in anyone of these markets would trigger a massive dislocation. None of this mattered when only a few investors were engaging in the dynamic hedging necessary to insure a stock portfolio, but once it became popular among pension managers the assumption of continuous markets became questionable. By way of example when all is calm, fire insurance is readily obtainable, but when the whole city is burning down, there are very few sellers of fire insurance. That is precisely what happened on October 19th.

Henriques rightly notes that the real risk to the system occurred a day later when trading halts in both the cash and futures markets occurred. The markets were rescued by the newly installed Fed Chairman Alan Greenspan acting as lender of last resort and the timely buying of an obscure index product by traders Stanley Shopkorn (a friend) of Salomon Brothers and Bob Mnuchin of Goldman Sachs.

Although Henriques is very good at describing the drama of the minute by minute trading on the exchanges she glosses over the big macroeconomic causes of the crash.  It was part and parcel of the great 1980s bull market that took the Dow Jones Industrial Average up from 776 in August 1982 to 2722 just five years later.
In fact the Dow Stood at 1890 as 1986 drew to a close and then skyrocketed to 2722 in less than eight months, a gain of 44%. So no one should be surprised that a correction occurred. Indeed if you were in a coma for most of the year and you woke and saw that the market closed at 1739 on October 19th it would have been logical to surmise that not a whole lot happened in 1987.

The mid-1980’s bull market was fueled by the 1985 Plaza Accord that was designed to lower the value of the dollars by dramatically increasing global liquidity, a Fed easing cycle in 1986 caused by a collapse in the price of oil, and the emergence of leveraged buyouts. By October of 1987 all three of these factors were called into question as the Fed began a tightening cycle in early 1987, a very public currency dispute between the U.S. and Germany broke out into the open thereby questioning the Plaza Accord and Congress was considering proposals to limit the tax deductibility of interest deductions associated with leveraged buyouts. Thus the stock market had every reason to go down. What portfolio insurance and the regulatory cacophony did was put the decline into overdrive.


Thus I wish Henriques would have devoted her writing talents to place what happened in 1987 into a broader macroeconomic context. But make no mistake much of the regulatory issues she discussed remain with us today and were partially responsible for the 2008 meltdown.





Friday, September 29, 2017

"Economy Growing Amidst Washington Chaos," UCLA Anderson Forecast, September 2017

We came into the year optimistic about pro-growth economic policies being initiated by the incoming Trump Administration. Those policies included substantial tax cuts, a major investment in infrastructure and regulatory relief. There has been real progress on the regulatory front, but nothing has really happened with respect to tax relief and infrastructure spending. Instead we have witnessed chaos with respect to immigration, healthcare and trade policies and a loss of confidence in the Administration over its handling of the neo-Nazi demonstration in Charlottesville, Virginia and the North Korea nuclear issue. Along the way there has been a revolving door with respect to the staffing of the White House. You need a scorecard to keep track of who is in and who is out.

Nevertheless, notwithstanding the chaos in Washington D.C., the economy continues to plow ahead with modest growth in real GDP and rather strong gains in employment. (See Figure 1 and 2) The employment gain has been even more impressive because it is occurring against a backdrop of a year-over-year decline in retail employment caused by the ongoing restructuring of that industry as online competition takes its toll. (See Figure 3) We would also note that the only other times we have witnessed year-over-year declines in retail employment has been during recessions.

Specifically we forecast that growth will continue with real GDP increasing by 2.1%, 2.8% and 2.1% in 2017, 2018 and 2019, respectively. The impact of tropical storms Harvey and Irma will modestly lower growth in the current quarter and possibly the fourth quarter from what it would have been and increase it in early 2018.  Although not intended the post-hurricane rebuilding, which could amount to $200- $300 billion of governmental and insurance funding, will act as if Congress passed a formal infrastructure package.  Indeed the dollars will flow far more rapidly compared to Hurricane Katrina in 2005 because FEMA is accepting applications via smart phones. But make no mistake, wealth was destroyed and that destruction is not measured in GDP. We would note that our 2018 optimism is based on the belief that Congress will ultimately enact tax cut and a formal infrastructure package later this year, more on that below. In this environment the unemployment rate will remain at or below the current 4.4% for the forecast horizon. (See Figure 4)

Figure 1. Real GDP Growth, 2007Q1 – 2019Q4F
FIG1.EMF
Sources: U.S. Department of Commerce and UCLA Anderson Forecast






Figure 2. Payroll Employment, 2007Q1 – 2019Q4F
FIG2.EMF
Sources: Bureau of Labor Statistics and UCLA Anderson Forecast

Figure 3. Retail Trade Employment, 2000 –Aug. 2017, Monthly Data, Change from Year Ago, In Thousands


Source: Bureau of Labor Statistics via FRED

Figure 4. Unemployment Rate, 2007Q1-2019Q4F
FIG4.EMF
Sources: U.S. Bureau of Labor Statistics and UCLA Anderson Forecast

Fiscal and Regulatory Policy

Despite the chaos we cited above we believe that Congress will pass both a tax and an infrastructure bill this year. Why? Nothing focuses the minds of Republican legislators than the thought of losing their majority. Thus the leadership on tax policy will come from Congress, not the White House. As a result we are assuming for modeling purposes that Congress will pass a $1.6 trillion tax over 10 years split evenly between corporations and individuals. Congress will set a 25% corporate tax rate while eliminating several business deductions and allow for the repatriation of overseas profit at a 10% tax rate. We would note that the tax reductions outlined here are well below the $5 trillion we were looking for last December. Moreover should President Trump’s recent dalliance with Democratic leaders Schumer and Pelosi become a longer term relationship then the cuts would tilt more towards middle and lower income constituencies than a more traditional Republican plan.

Of course to use an old economist joke, we are assuming more than a few can openers. Nevertheless President Trump and the Congress came together on postponing the debt ceiling issue and on an initial Harvey relief package. Although the debt ceiling agreement expires in December the temporary lifting of the ceiling will enable the Treasury to engage in extraordinary measures that will postpone a vote until the spring. Thus the risk of a government shutdown has been pushed back into next year.  However if we are wrong on the tax cuts, growth in 2018 will be slower than what we are now projecting.

On the spending side we anticipate at $250 billion infrastructure program and a material increase in defense appropriations coming from increased global tensions and especially with respect to North Korea which will make missile defense a top priority.  (See Figure 5) The tragedies along the Texas gulf coast and Florida resulting from the tropical storms will certainly light a fire underneath the Congress to act on infrastructure. The net result of these policies will increase the federal deficit to about $700 billion dollars in 2019. The deficit declines in 2018 because of proceeds from the repatriation tax. (See Figure 6)

Figure 5. Real Defense Purchases, 2007-2109F
FIG5.EMF

Sources: U.S. Department of Commerce and UCLA Anderson Forecast

Figure 6. Federal Deficit, FY 2007 – FY 2019F
FIG6.EMF
Office of Management and Budget and UCLA Anderson Forecast

On the regulatory front the Trump Administration has started to roll back environmental, energy, financial and labor regulations. Whether this is good policy or not, it has begun to lift the regulatory burden on businesses and to be very frank, had there been a Clinton Administration businesses would have faced with a continuation of the regulatory onslaught that was characteristic of the Obama Administration.

Sources of Modest Strength 

Aside from defense the sources of growth over the next two years will come from consumption, housing (in 2018) and equipment spending. Real consumption spending is forecast to grow at just under a 3% clip next year and remain strong into 2019. (See Figure 7) Growth here is being underpinned by continued job growth, rising wages and tax cuts. In addition the automobile industry will benefit from the replacing of hundreds of thousands of cars lost along the Texas/Louisiana gulf coast.

Figure 7. Real Consumption Spending, 2007 – 2019F
FIG7.EMF
Sources: U.S. Department of Commerce and UCLA Anderson Forecast

Given the economic backdrop housing activity should be doing much better than it has been. To be sure housing starts are continuing to increase, but the pace is rather modest. After recording 1.18 million starts in 2016, activity is forecast to increase to 1.21 million, 1.35 million in 2017 and 2018, respectively, and decline modestly to 1.31 million in 2019 under the weight of higher interest rates. Part of the sluggishness appears to be due baby boomers staying put in the houses they are already living in making it harder for millennials to enter the market.

Figure 8. Housing Starts, 2007Q1 – 2019Q4F, SA
FIG8.EMF
Sources: U.S. Department of Commerce and UCLA Anderson Forecast

In response to improved global growth, a rebound in oil drilling activity and the prospect of lower corporate taxation, real equipment spending is forecast at 4%+ pace though 2019. This will be a decided improvement over the 3.4% decline occurred in 2016.(See Figure 9) Further as labor markets continue to tighten the incentive to substitute capital for labor will increase.

Figure 9. Real Equipment Spending, 2007 -2019F
FIG9.EMF
Sources: U.S. Department of Commerce and UCLA Anderson Forecast

Gradual Tightening of Monetary Policy

We have forecast rising inflation over the past several years. Although we were right in terms of direction, we have certainly been wrong with respect to the magnitude of the increase. In part the sluggishness in average compensation growth has been due the fact that higher paid retiring baby boomer are being replaced by lower paid millennials. Nevertheless both the monetary and Keynesian Phillips Curve (wage growth being a negatively correlated with the unemployment rate) explanations have been found wanting. But with the unemployment rate as low as it is, we believe that compensation increases will soon surpass 4% and the consumer price index will be increasing at a rate of at or above 2%  over the next two and half years. (See Figures 10 and 11) Simply put all of the kindling is in place to ignite a round of wage increases that will in turn elevate service sector inflation. It has just taken longer than we thought.

Figure 10. Compensation per Hour, 2007Q1 -2019Q4
Fig10.EMF
Sources: U.S. Bureau of Labor Statistics and UCLA Anderson Forecast

Figure 11. Consumer Price Index vs. Core CPI, 2007Q1 -2019Q4
FIG11.EMF

Sources: U.S. Bureau of Labor Statistics and UCLA Anderson Forecast

In response to an economy operating at full employment and with inflation expected to run at around the Federal Reserve’s target rate of 2%, we expect a continuation of the moderate tightening policy that began last December. Aside from increasing the federal funds rate the Fed will be gradually reducing its bloated balance sheet that was created by three rounds of quantitative easing designed to offset the negative effects of the Great Recession.

In terms of the federal funds rate we are forecasting quarterly increases of 25 basis points starting this December, with a pause in March, and running through 2019. By then the federal funds rate would reach 3%, up from the current 1.125%.  (See Figure 12) Similarly the yield on 10-Year U.S. Treasury bonds is forecast to be on a path to 4%, up from 2.1% in early September. Because we have been forecasting a 4% 10-Year U.S. Treasury rate for a long time to no avail, this forecast is yet again another triumph of hope over experience. Nevertheless we are hard pressed to visualize say a 3% rate, in an environment of 4% unemployment, growing GDP, inflation over 2% and a rising federal deficit.

Figure 12. Federal Funds vs. 10-Year U.S. Treasury Bonds
FIG12.EMF

Sources: Federal Reserve Board and UCLA Anderson Forecast

Conclusion

The economy has grown despite chaos in Washington and will continue to grow at moderate 2+% rate while operating at full employment. In response to a 2018 tax cut growth will pick up to about 3% before falling back to 2.5% and lower in 2019.  Growth would be underpinned by higher defense outlays and moderate gains in consumption, housing and equipment spending. Unemployment will remain at or below the recent 4.4% over the forecast horizon. Inflation will increase modestly running at a 2+ percent rate. The combination of full employment and somewhat higher inflation will put the Fed to continue its modest tightening path by raising interest rates roughly 25 basis points a quarter into 2019. Should we be wrong on the tax cuts, growth would be slower. Of course there is always the risk that dysfunction in Washington will spill over to the real economy.


Monday, September 18, 2017

My Amazon Review of Katy Tur's "Unbelievable: My Front -Row Seat to the Craziest Campaign in American History"

In the Eye of a Political Hurricane

In the spring of 2015 Katy Tur was living large as an NBC correspondent in London. She had a French boyfriend with whom she was going on a Mediterranean vacation in July.  However on a home trip to New York, of a sudden, the powers that be at NBC/MSNBC drafted her to cover the nascent Trump campaign. All the parties involved thought it would be a short term assignment. Little did they know it would last for 17 months and lead to a Cronkite Award for Excellence in Political Journalism for Tur.

In a very personal, candid and breezy style Katy Tur tells us of her getting caught up in a Category 5 political hurricane that was the Trump campaign. From the beginning she is attacked by Trump and as the campaign goes on she legitimately fears for her safety. So much so that NBC hires a security detail for her. Through her eyes we see Trump’s love/hate relationship with the press. He hates them personally but he is validated by them.

She gets very personal about her life on the campaign trail. She changes clothes in a car and falls in the snow while racing to catch a plane out of LaGuardia Airport. She lives on a diet of junk food and alcohol that makes it difficult for her to zip up her pants and look in the mirror. By reading her book I got to appreciate the hard work that journalist do to bring the news to me.

Although she does not like Trump, she is very respectful of his voters. To paraphrase Bill Clinton, she feels their pain. She recounts a vignette about a middle-aged woman who happens to be a hair dresser helping her with a curling iron in a restroom. Later that woman would be cheering Trump on with his personal attacks on the press. Tur gives a real sense of how decent people can get caught up in the madness of crowds.  Further, she practically alone at NBC sees Trump winning.

I have previously written what great team of female reporters NBC has put together. I call them Oppenheim’s girls, after Noah Oppenheim, NBC’s current news director. (See https://shulmaven.blogspot.com/2017/09/from-murrows-boys-to-oppenheims-girls.html)                                                                                                                       Along with Katy Tur, there is Kasie Hunt, Hallie Jackson and Kristen Welker. I honor them by calling them “girls” because they are the modern day equivalent of Murrow’s Boys. They truly represent an all-star team in any journalism league.

I have one last and very personal point. While she was growing up she had a family dog named Daisy. My three children who are roughly Katy’s age also grew up with a dog named Daisy. She was the best dog.


I highly recommend “Unbelievable” for anyone interested in the 2016 election and the role of journalist in the hothouse of a presidential campaign.



Saturday, September 16, 2017

My Amazon Review of Richard White's "The Republic for Which it Stands: The United States During Reconstruction and the Gilded Age, 1865-1896"

History with a 21st Century Liberal Bias

Stanford professor Richard White is a distinguished historian; I only have amateur status. While reading White’s encyclopedic history of post-civil war America you get the impression that he is looking to shock the sensibilities of 21st Century liberals by highlighting racism, the plight of laborers and farmers, the corruption of government and the greed of the emerging capitalist class.

To be sure the post-civil war era was no bed of roses, but if Lincoln came back from the dead and looked upon the America of 1896 he would have been largely pleased. The Whig in Lincoln, after all he was an admirer of Henry Clay’s American  System,  would have been pleased to see the success of the Pacific Railway Act, the Homestead Act and the Morrill Act (land grant colleges). America truly became a country from sea to shining sea, surpassed Britain as an industrial power and was about to take its place on the world stage. Of course as White rightfully notes the Native Americans were far from being partners in this process. Nation building is messy.

The free labor Lincoln might have been a bit disappointed in that industrial workers instead of being free were in fact “slaves” to the industrialists. This last point White makes over and over. However industrial workers were far from being slaves and far from being a majority of the workforce and even with the urbanization that took place in the 30 years after the civil war, America was still an agricultural country with a small town economy. And as bad as factory conditions were, immigrants from Europe continued to pile in. Simply put higher real wages and freedom remained a big draw.  Moreover, White ignores the rise of the middle class who would read the muckraking journals that were just beginning to make their appearance in the 1890s.  

The idea that White doesn’t seem to get is that the America of the 1870s was an “emerging market.” Where he is shocked about the governmental corruption that took place, I view it as a stage in the growth of the economy. Industrialization is messy and that is why crony capitalism and emerging markets go hand in hand. He also makes a side comment that American growth was slow compared to some of the faster growing economies of the 20th century. Of course it was because America was inventing the stuff that the 20th century economies had the benefit of copying.

Although White cites the excellent work in Robert Gordon’s “The Rise and Fall of American Growth,” he doesn’t take it to heart. (See https://shulmaven.blogspot.com/2016/02/my-amazon-review-of-robert-j-gordons.html )   Productivity growth was strong and real wages were rising. The U.S. was experiencing a “good” deflation, not a bad one as gains in productivity were translated into lower prices. Indeed the return to the gold standard, which White is critical of and it had a lot to do with the deflation, but it laid the basis of America becoming a global economic power at the dawn of the next century. The late 1800s truly were truly an age on invention and the locus of invention was largely in America.

All of the class issues that White discusses were fought out in the election of 1896. William McKinley’s defeat of William Jennings Bryan was a resounding vote for the gold standard and against the class-based reforms proposed by Bryan. Highlighting the rise of the new middle class is the fact that 750,000 people visited McKinley’s home to hear him give campaign speeches. These folks weren’t the tribunes of capitalism or White’s downtrodden workers and farmers, but rather they were of the rising middle class.

The one area where I know Lincoln would have been disappointed is the failure of reconstruction. Here the Republicans punted and turned the south over to the Ku Klux Klan, the armed wing of the Democratic Party. As White notes, the Republican traded the south for the west. I wish he would have spent more time on President James Garfield, whose was shot at the beginning of his term. If there was anyone who could have halted Jim Crow, it would have been him. We will never know.


I am sure White’s book will win its share of awards, but for me it was a disappointment. He should take off his liberal blinders and look at the world as it was.




Thursday, September 7, 2017

From Murrow's Boys to Oppenheim's Girls

At the start of World War II in Europe Edward R. Murrow, the legendary CBS news chief operating out of London, put together a team of radio broadcasters that would bring the realities of the war in Europe into millions of American homes. His team included such luminaries who would build CBS news into a television powerhouse in the postwar era included William L. Shirer, Eric Severeid, Charles Collingwood, Howard K. Smith and Richard C. Hottelet.

The modern day analogue to Murrow's Boys appears to be what I would characterize as Oppenheims's Girls. Oppenheim being Noah Oppenheim, NBC's current news chief. His "girls" are anchor/correspondent Katy Tur, chief White House correspondent Hallie Jackson, and political correspondents Kasie Hunt and Kristen Welker. These four women acting as a team are covering Washington and the Trump Administration as if it were a foreign country and just as Murrow's boys did 77 years ago they are bringing insightful reporting into the homes of millions of Americans.  

Nevertheless there is one problem that this all-star team has to deal with; they are associated with highly partisan Left that appear nightly on MSNBC at night thereby hurting their credibility. So my advice to Noah Oppenheim is not to let the partisans get in the way of straight news.




Friday, September 1, 2017

My Amazon Review of Sean McMeekin's "The Russian Revolution: A New History"

Russia Turns Red

Historian Sean McMeekin has written a very readable revisionist history of the Russian Revolution.  The perspective of the book is to look at the revolution from outside in. Hence we learn more about the opposition to Lenin rather than an inside out view which would focus more on the Bolshevik leadership. According to his archival sources McMeekin clearly portrays Lenin as a German agent who brought the financial resources of Hohenzollern Germany with him to overwhelm both his critics on the left and the forces of the provisional government.

In McMeekin’s view both the Tsar and the Russian army were in far better shape than what other historians have argued. I think he stretches here, because if it were that strong the army would not have collapsed as fast as it did under the weight of the Leninist policy of turning an imperialist war into a civil war by subverting the Russian draftees.

He argues, I think correctly, that Lenin was blessed by his opponents. The liberals who brought on the February/March Revolution were inept and the Socialist Revolutionary government under Kerensky was perhaps even more inept. When the time came for Lenin to strike in October/November, the provisional government was a mere shell.  Thus the revolution was more a coup d’├ętat than a real revolution. The revolution would come with the bloody civil war that followed the coup.

During the civil war period McMeekin highlights how split the opposition was and how unified the newly formed Red Army was under the leadership of Trotsky. Trotsky wisely utilized the officer corps of the defeated Tsarist army to build his new army and utilizing Russian gold reserves, Lenin was able to keep the army in the field. Nevertheless millions of lives were lost in the three year civil war as the country nearly starved to death and was saved by Herbert Hoover’s relief mission. One last note McMeekin tells us that the Cheka, the predecessor to the KGB, was founded to break the strike of banking, railroad and communication workers, so much for proletarian solidarity.


Therefore I highly recommend the ”The Russian Revolution” for history buffs like myself. 




Thursday, August 24, 2017

My Amazon Review of David Thompson's " Warner Bros: The Making of an American Movie Studio"

From Youngstown, Ohio to Hollywood

David Thompson knows how to write. He has written a very entertaining book about four Jewish immigrant brothers from Youngstown, Ohio who make it in Hollywood and America. The book is a fitting edition to Yale’s Jewish Lives series, despite it being a biography of a movie studio rather than an individual.

As with most of the early movie studios Warner Brothers evolves from operating theaters to running a major studio in Hollywood. Along the way we witness the sibling rivalry among the bothers mostly pitting the oldest, Harry against the youngest, Jack. Harry stays true to his religion and his wife, not so much for Jack. Ultimately Jack wins and sells the company out from the other brothers in the 1950s and then buys it back to become its sole owner.  Harry dies of a stroke shortly thereafter.

The real guts of the book is how Warner’s evolved from making Rin Tin Tin movies in the early 1920s, to pioneering sound with Al Jolson’s “Jazz Singer.” From there we go on to the realistic gangster movies that brought us such stars as Edward G. Robinson and James Cagney. Warner’s also brings us the great Busby Berkeley song and dance spectaculars. In “Gold Diggers of 1933” Joan Blondell sings one of the two great anthems of the 1930’s, “My Forgotten Man.” The other anthem was “Brother Can You Spare a Dime.”   So if you add to the gangster movies, “Gold Diggers”, “I Am a Fugitive from a Chain Gang,” and “Petrified Forest” you get a real flavor of America in the 1930s. Because this is in the Jewish Lives series Thompson highlights the rolls of such Jewish actors as Edward G. Robinson, Paul Muni, Peter Lorre and Lauren Bacall.

Of course no book on Warner Brothers would be complete without a full discussion of “Casablanca,” the best movie ever made that starred Humphrey Bogart and Ingrid Bergman and was directed by the Hungarian Jew Michael Curtiz. In a few short pages he takes us into the inside of making that movie.


There is much more in book with vignettes on Bette Davis, Errol Flynn, Howard
Hawkes and Joan Crawford. My one minor quibble with the book is that Thompson throws in a few gratuitous comments about Donald Trump. Nevertheless it is a very enjoyable read. 





Saturday, August 19, 2017

My Amazon Review of Craig Shirley's "Reagan Rising: The Decisive Years, 1976-1980"

The Return of the Gipper

Reagan biographer Craig Shirley has written a hagiographic account of how Ronald Reagan rebounded from his defeat at the Republican convention in 1976 to his nomination four years later. Shirley has written a breezy telling of what happened with lots of inside baseball. Reagan, of course is the hero and the villain of the piece is John Sears his campaign manager who deliberately kept Reagan out of the limelight in 1979. That gave rise to serious opposition, especially from George H.W. Bush. The unsung hero of the Republican return to power is party chairman Bill Brock who picked up the pieces after the narrow defeat of 1976 to Jimmy Carter and an across the board loss in the congressional elections of that year.

My problem with Shirley’s account is that there are too many errors in the book. Among those errors is his view that the economy was weak in 1978. To the contrary, the economy was in an all-out boom. That is the reason the Republicans made only marginal gains in the House and Senate races. He pays lip service to the roll of California’s Proposition 13 which set off a wave of tax cutting in the states and it help legitimize the Kemp-Roth tax cut the Republican were advancing. Without Proposition 13 there would be no Kemp-Roth. He also omits the Steiger Amendment which lowered the capital gains tax in an overwhelmingly Democratic Congress in 1978. Change was in the air and Reagan knew it.

Shirley also misstates Lyndon Johnson record on civil rights. To be sure Johnson was slow to civil rights, but it was through his efforts that the first civil rights legislation since reconstruction passed in 1957 and 1959.

Shirley spends a great deal of time on Reagan’s opposition to the Panama Canal Treaties which became a cause celeb among the Republican right. The treaties passed and now 40 years later nothing really bad has happened. He should have noted that it was a political gimmick from the beginning. But it worked.


Finally although breezy reads well, the book needed much better editing and fact checking. Thus I can only rate it a modest three stars. 




Tuesday, August 15, 2017

My Amazon Review of Graham Allison's "Destined for War: Can America and China Escape Thucydides's Trap"

Collision Course?

Graham Allison the Director of Harvard’s Belfer Center and former Dean of its Kennedy School has written a thought provoking book that should keep leaders on both sides of the Pacific awake at night. To Allison the rise of China to challenge the United States is a replay of the ancient Peloponnesian War where “it was the rise of Athens and the fear that it instilled in Sparta that made war inevitable” in the memorable words of Thucydides. By going through sixteen case studies where a rising power challenged an incumbent power Allison is careful to note that war is not inevitable, but it is likely.

The most glaring case study is that of the rise of Germany in the late 19th century to challenge the hegemony of England and the parallel rise of post-1905 Russia to challenge Germany on the continent created so much fear among the parties that the spark of an assassination in the Balkans heralded the onset of World War I.  In contrast the American challenge to England during the same time period led to a rapprochement between the two powers that exists through today. But what it took was England’s willingness to give America a free hand in the America’s. In the two cases I just cited economic rivalry preceded geopolitical rivalry.

So it is today with the U.S. and China. On purchasing power parity basis the Chinese economy is now larger than that of the U.S. and the fear of Chinese economic power is a constant drumbeat among American politicians. The question for the U.S. and China is the same that was presented to Sparta and Athens is whether or not an accommodation can be made. That would require either China pulling back on its ambitions to establish a sphere of influence in Southeast Asia or for the U.S. to accept the fact that Chinese ambitions are legitimate. Given what is going on with North Korea today it hard to tell whether diplomatic accommodations can be made. Of course for the U.S. to  cede Southeast Asia to China there would have to a high degree of confidence that the Chinese goals are limited just as the U.S. goals towards Latin America were limited at the turn of the 20th century.


To accomplish a modus vivendi will take a lot of hard work and remember the rise of China economically left in its wake abandoned factories throughout America just as the rise of Germany placed great stress on the British economy in the late 1800s. It is not going to be easy, but Allison is asking the right questions and pointing us in the right direction.  




Tuesday, August 8, 2017

Donald Trump and the Big Lie

"The essential English leadership secret does not depend on particular intelligence. Rather, it depends on a remarkably stupid thick-headedness. The English follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous."

Joseph Goebbels

"All this was inspired by the principle—which is quite true within itself—that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods.
It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying."

Adolf Hitler, "Mein Kampf"

"His primary rules were: never allow the public to cool off; never admit a fault or wrong; never concede that there may be some good in your enemy; never leave room for alternatives; never accept blame; concentrate on one enemy at a time and blame him for everything that goes wrong; people will believe a big lie sooner than a little one; and if you repeat it frequently enough people will sooner or later believe it."

OSS Psychological Profile of Hitler

It seems that Donald Trump has been taking lessons from Hitler and his propaganda minister Joseph Goebbels. Trump tells lots of small lies, but it all evolves around his Big Lie attack on "fake news." He characterizes every news story that is critical of him as "fake news." And he repeats it over and over so after awhile people come to believe it. To further his goal he set up his own propaganda Trump TV channel on Facebook. 

Nevertheless because more than a few Americans rightly believe that much of the news media is biased against Trump, it behooves the news media to get the story right. Otherwise if the news media gets it wrong it supports Trump's "fake news" argument and further entrenches his big lie. 

Friday, August 4, 2017

My Amazon Review of Richard J. Evans' "The Pursuit of Power: Europe, 1815-1914"

The European Century

The distinguished Oxford Historian Richard Evans has given us a kaleidoscopic view of European civilization during the century it came to dominate the globe. A reader will learn a lot by going through this very long book (848 pages in the print edition without footnotes or endnotes.) In my opinion too long for the average lay reader. Evans offers us a bottom-up socio-political history where the focus is more on the average citizen and culture than the political elite.

In essence Evans discusses how Europe came to terms with the political earthquakes brought about by the French Revolution and the Napoleonic Wars and the industrial revolution. In 1815 the so called Concert of Europe is brought into being by Metternich as a conservative reaction to the French Revolution. That framework largely keeps the peace until 1848.  Nevertheless the ideas of the French Revolution bubble up and gradually work to democratize European society as the franchise is extended to more and more people. He highlights the conflict between the liberal reformers in the bourgeoisie and their more democratic counterparts whose visions extend to feminism and socialism.

Along the way nationalism becomes the most powerful force in Europe as Italy and Germany unify and the minorities within the decaying Austrian and Ottoman Empires revolt. It is those revolts that light the match that starts World War I.
Nationalism also becomes the motivating force in the establishment of European colonial empires in Asia and Africa. Territory abroad yielded political prestige home. The power of nationalism proves itself in 1914 when the previously anti-war socialist parties all vote for war credits in their respective nations.


All told The Pursuit of Power is well worth the read, but it will take a patient lay reader to get through it all.



Tuesday, July 25, 2017

My Amazon Review of George Melloan's "Free People, Free Markets: How The Wall Street Journal Opinion Pages Shaped America"

The Making of an Editorial Page

Because I have been reading The Wall Street Journal since I was a kid I looked forward to reading “Free People, Free Markets..” George Melloan did not let me down and as a former reporter, columnist and deputy editor of the editorial page has written a definitive history of The Wall Street Journal’s editorial page. He covers the page’s evolving politics and personalities during it’s over a century history. He is particularly adept at chronicling the roles of Vermont Royster and Robert Bartley in shaping the page from the 1950s to the dawn of the 21st Century. It was those two editors who catapulted the page into a major force in conservative thought and American journalism. And Melloan had a ringside seat in writing those editorials and serving as Bartley’s deputy.

To me the highlight of the book was Melloan’s recounting his commute from New Jersey into Manhattan on 9/11. I made the same commute on a different New Jersey Transit line and witnessed the second plane hitting the World Trade Center. I worked next door to the then WSJ headquarters and immediately went home. Melloan had a paper to put out and by the efforts of their heroic staff the WSJ was put together at their Princeton printing plant. It was journalistic grace under fire.

What perhaps made the editorial page was their walk on the supply-side in the late 1970s where fiscal orthodoxy was abandoned in favor of broad-based tax cuts. The results came a few years later with the Reagan revolution.


I have a few quibbles though. Sometimes the book reads like a very long newspaper article. I would have liked to see full reprints of a dozen or so editorials that Melloan considers to be the most important. Lastly Melloan leaves out the views of the editorial board prior to America’s entry into World War II. My guess he was not proud of them, but they should have been discussed for the sake of history. 

The full amazon URL appears at: https://www.amazon

Tuesday, July 18, 2017

My Amazon Review of Michael S. Neiberg's "The Path to War: How the First World War Created Modern America"

Over There

Military historian Michael Neiberg history of America’s entry into World War I is the mirror image of Michael Kazin’s “The War Against War…” Where Kazin looks America’s entry from the point of view of the anti-war coalition, Neiberg tracks the views of the broad American public and the war proponents, especially former President Theodore Roosevelt who was incensed by Woodrow Wilson’s initial “Too proud to fight” slogan.  He notes that the American public was sympathetic to the Allies from the get go, but he doesn’t really explain why the neutrality sentiment was so strong and why it took so long for the public’s sympathy for the Allies to be realized.  

But when America entered the war the public went all-in and he notes how quickly George M. Cohan’s “Over There” became such a national hit. However to get the public it would take the German resumption of unrestricted submarine warfare, the Zimmermann Telegram and the abdication of the Russian Czar in the early months of 1917 to enter a war that was in the broad strategic interests of the United States.

Neiberg discusses how elite America with their Anglophile sympathies were especially important in bringing America into the war. Unlike today it was the Ivy League college students who were the most hawkish and many volunteered to fight for England and France before America’s formal entry into the war. Many of them would become disillusioned in the 1920's.

Where Neiberg is especially good is his deep sourcing on the changing attitudes of the hyphenated Americans. He discusses how German-Americans, Italian- Americans, Irish Americans, Jewish-Americans and African-Americans moved from initial ambivalence to full throated support for the war. In essence those groups identified more as Americans than their ancestry.  As a result the stature of the four White groups was much improved after the war ended. However African-Americans faced the revival of the Klan in the 1920’s.


Unfortunately Neiberg leaves out the role of the large banks, the munitions suppliers and British propaganda in pushing America towards war. Further his title over promises. He doesn’t say much about how the war created modern America. For insight into that I would recommend Adam Tooze’s “The Deluge…..” Thus for me it is hard to get too excited about the book.

Friday, July 14, 2017

My Amazon Review of William Christie's "A Single Spy"

Double Agent

William Christie has written a fast-paced spy thriller. His protagonist is Alexsi Smirnov, a street and desert smart Azeri teenager who is very handy with a knife. He would ultimately become a well-placed KGB agent inside the Abwehr. Smirnov is a library educated autodidact who is fluent in Russian, Farsi and German. We trace his adventure from being a teenage smuggler in the Trans Caucasus to his capture by Russian authorities that sends him to a prison/orphanage where he spotted as potential spy materiel.

From the orphanage he is transported to KGB headquarters in Lubyanka prison. There under the tutelage of a master spy he is groomed to enter Germany by impersonating the nephew of a senior Nazi diplomat. With the aid of his “uncle” he becomes an intelligence officer in the Abwehr where he discovers Hitler’s plans to invade Russia. Of course Stalin does not believe the report he files.

Later in the book Smirnov becomes involved in the mythical plot (Operation Long Jump) to assassinate the Big 3 at Tehran led by the Germany’s star commando Otto Skorzeny. This plot has been the subject of more than a few spy novels.


Along the way Christie paints a very realistic picture of life in 1930s Russia and wartime Germany. “A Single Spy” is well worth the read!





Wednesday, July 12, 2017

Breaking out the Vodka at the SVR and the GRU

No matter what the outcome of the Trump Jr., Kushner and Manafort meeting with Russian lawyer/intelligence operative? Natalia Veselnitskaya, the Russian security services have won bigtime. Break out the vodka in Moscow. Why? They have succeeded magnificently in creating total chaos in Washington by putting the Trump Administration in complete meltdown mode. And who knows what additional information the SVR (Russian Foreign Intelligence Service) and the GRU (Russian Military Intelligence) has on the Trump Administration. Remember the Russian intelligence services have information on every single contact the Trump people had with them and/or their cutouts. So my guess is there are more shoes here to drop to than in Imelda Marcos’ legendary closet.


Nevertheless there is far more to this story. Why are all of the leaks occurring now just days after Trump’s meeting with Putin? Did “The Donald” give away the store to Putin causing our national security apparatus to start leaking like a sieve or was he surprisingly tough on him causing the Russians to do the leaking? My guess is the former, but either way Putin wins.