Sunday, January 29, 2017

Reliving the 1930s - Part 3

In 2014 I posted two blogs as to how we are reliving the 1930s. The first dealt with President Obama's vacillation with respect to Putin's aggression in Ukraine and the second dealt with the rise Antisemitism in Europe. Here are the links: and

With only one week in office it now seems that President Trump put us into "hyper-drive" back to the 1930s. He is in the process of starting a trade war with Mexico, whose government is only now undoing the oil nationalizations of Lazero Cardenas in 1938. Perhaps President Trump wants a virulent left-winger heading up the Mexican government. Trust me if he is worried about Mexican immigration today, just wait for an economic upheaval in Mexico.

More frightening is his wholesale exclusion of Muslims by executive order from seven countries previously identified with terrorism by the Obama Administration in 2015. They are Iraq, Syria, Iran, Libya, Somalia, Sudan and Yemen. He also closed our borders to the admission of ALL refugees for 4 months. Although not an explicit Muslim ban, it certainly comes close. The message is loud and clear. Moreover, until restrained by a Judge, legal residents with green cards and immigrants with H1-B Visas were also banned from reentering the United States.

His act is a chilling reminder to the the world of 1939 where President Franklin Roosevelt closed our door to European Jewry seeking refuge from Hitler. In fact he refused to allow the refugee filled ship, the St. Louis, from coming ashore in the U.S. Similarly the UK government issued a White Paper sharply restricting Jewish immigration to Palestine. Just like in today's Syria, the refugees were trapped. If only only Obama enforced his Syrian red line in 2012. But that was then and this is now.

Until this weekend I poo-poohed the talk of Trump fascism. I now have to take it seriously as the 1930s come into clear view.

Wednesday, January 25, 2017

My Amazon Review of Daniel Todman's "Britain's War: Into Battle, 1937-1941"

A Comprehensive Look at Britain Going to War

History professor Daniel Todman has written an encyclopedic look at what the effects were of the onset of World War II and its actual beginning on the people of Britain. Aside from the broad geopolitical history which is well known, Todman details the internal politics of both the Conservative and Labour parties as well as discussing the day-to-day lives of the British people. It is a long book for the lay reader, 816 pages in the print edition, but the reader is rewarded. Still I would have preferred a shorter book, hence four stars, not five. Moreover for readers interested in a very accessible view into the lives of the average Brit during the war I would recommend the British television series, “Foyle’s War” available on Netflix.

Todman begins his book with the coronation of George VI in May 1937 and ends with twin debacles at the start of the Pacific War at Pearl Harbor and sinking of the prides of the British fleet off Singapore by carrier based Japanese aircraft in December 1941. It is a lot of history to cover and at home aside from the collapse of the old industrial regions of the north, the British economy was doing relatively well in the 1930s being governed by moderate conservative policies. For all practical purposes Labour was frozen out. However as the war clouds grow in Europe the British economy is put on a war footing increasing taxation and putting much activity under the command and control of the government. This is Labour’s opening to power.

With the collapse of France, Chamberlain resigns and Churchill becomes Prime Minister to rally the country after Dunkirk. The key Labour ministers in the government are Ernest Bevan and Clement Atlee. Their long term goals are to bring socialism to Great Britain. They succeed in 1945 so much so that their policies hold back the country for the next 30 years. (My comment, not the author’s.) Churchill’s goal is to preserve the British Empire; at this he fails. He also fails in the sense the liberal reform wing of the Conservative Party headed by Eden and Macmillan end up in control. Nevertheless he certainly wins the main fight in defeating the Nazis.

Todman has given us an excellent work of history and for the real history buff I highly recommend it, a little less so for the average lay reader.

Friday, January 20, 2017

President Trump: A New Age of Jackson?

President Trump, I never thought I would be saying it, but here we are. President Trump's inaugural address was not that of a traditional Republican; it was Jacksonian in style and substance with a flat out attack on the D.C. establishment of both parties. It was protectionist and nationalist. Gone was the outspoken internationalism of President Obama. He was speaking to his base, and unlike former inaugurals it was more a campaign speech than being broad and unifying. But then again Andrew Jackson's inaugural was far from unifying and it signaled a new age. 

The one fly in the Jacksonian ointment is that the new administration is populated with billionaires and Wall Street types. Whether this administration delivers to its populist base remains to be seen. Furthermore if Trump is going to govern the way he campaigned the stock market will be littered with a series of disappointments.

Nevertheless my best guess is that in four years time his fervent supporters will be disappointed and his critics worst fears will not be realized. Meantime I won't be surprised to see a foreign policy crisis emerge within his first 100 days. Stay tuned.

Wednesday, January 4, 2017

A New Take on the Fed: Doves become Hawks

Although there was no smoking gun in the release of today's Fed minutes, I suspect that the more Keynesian members of the board are frightened about the fiscal stimulus that will soon be coming from the Trump administration. With the economy at or very near the natural rate of unemployment, the economy has the very real potential of over heating.

Thus I suspect the the two perma-doves on the FOMC, Yellen and Brainard will soon switch from dove to hawk. Trust me the markets are not ready for this eventuality.

Tuesday, January 3, 2017

My Amazon Review of Robert Gerwarth's "The Vanquished: Why the First World War Failed to End"

The Never Ending War

Irish historian Robert Gerwarth certainly proves George Kennan’s notion that World War I was “the seminal catastrophe of this century.” To most of us in the West World War I ended on November 11, 1918. However in the East the war would rage on through 1923 and even today nearly a century later we remain prisoner of the forces it unleashed.

He also confirms the view of Ian Kershaw in his “To Hell and Back…..” that the Russian Revolution, an outgrowth of the war, paved the way for fascism by dividing the Left and hardening the Right. We see that at the outset where communists under the leadership of Rosa Luxemburg and Karl Leibknecht die in their attempt to seize power in 1919 Berlin. Similarly an attempt to form a Munich Soviet fails in that year as well. Put simply the Social Democratic government relied on the rightest Freicorps to put down the rebellion. In its aftermath Munich would become the festering ground for the rise of the Nazis. In Hungary Bela Kuhn, a communist, temporarily takes power only to be put down by a counter action from the Right. All the while the Russian civil war rages and within that there are the Russo-Polish and Russo-Finnish Wars, so much for the end of violence in November 1918.

For the Jews of Eastern Europe and Germany the situation turns from bad to worse. On top of the latent anti-Semitism that already existed we have the conflation of Jews with communism as much of the communist leadership in Russia, Germany, Austria and Hungary are Jewish. Thus the way was paved to broaden the appeal of anti-Semitism to much of the middle-class.

Where I think Gerwarth breaks new ground I think is in his discussion on the role of Mustapha Kemal’s success on Mussolini and Hitler. Kemal defeated the Greeks in Turkey and undid the toughest settlement against the Central Powers in the 1920 Treaty of Sevres which made Turkey a vassal of the Allies. In Kemal both Hitler and Mussolini saw his success in the ethnic cleansing of the Greek population in Eastern Anatolia by force and his willingness to stand up to the allies so much so that the 1923 Treaty of Lausanne completely undid the Treaty of Sevres. By the 1930s those lessons were well learned.

There is much more to Gerwarth’s book. He discusses why Italy ended up on the winning side; it still felt like a loser. And he discusses the chaos in the Balkans that we relived once again in the 1990s. Yes, World War I is still not over. Just look at the Middle East.