Their findings were picked up by bloggers at Business Week and U.S. News -- but with a difference. Both bloggers interpreted the article as saying the idea of capping presidents' salaries was a good one. Business Week asked its readers to share their views.
The authors' irony escaped their attention.
One of my fundamental findings over the past three years was learning who is in charge of higher education. In a nutshell, there is a vacuum, and students, parents, and taxpayers need to fill it. The great thing about higher education in the United States is that it is competitive. But that means caveat emptor.
At the Pope Center, we have just published a a dialog among reformers and educators that discusses what the role of the federal government, if any, should be in forcing transparency. The discussion uncovers two clear alternatives: “top-down” pressure (mostly from the feds) and a Hayekian decentralized pressure that will arise spontaneously, at least under some conditions.
In this dialog (two more parts will be published later) Neal McCluskey of Cato, Michael Rizzo of the University of Rochester, and I (to a small extent) offer the Hayekian perspective. And Roger Ream of the Fund for American Studies throws a monkey wrench into the entire transparency movement by saying that he has access to all the information he needs, thank you. If the topic interests you, the dialog will, too.
Norrell challenges the negative images of Washington that have been engrained in the modern mind--one as an “Uncle Tom” compromiser and another as a “cunning and ruthless strategist” (the latter phrase is Sanneh’s, reflecting Louis Harlan’s 1972 portrait). Sanneh says that Norrell describes Washington as “more like a man under siege, projecting strength and flexibility because he knew how precarious his empire was.”
It will be interesting to see if Norrell’s view of Washington as a “heroic failure” gains traction.
Sanneh, for one, never quite accepts that view. He seems to minimize the value of compromise and accommodation, implying that Washington should have acted differently, perhaps more like his rival W. E. B. Du Bois. And Sanneh suggests that Washington had a character flaw that made him act deceptively, including toward fellow blacks (although his five-page article doesn’t list outright deceptions).
I haven’t read Norrell’s book yet, but I did read his 2005 The House I Live In: Race in the American Century, which gives plenty of reasons to believe that Washington’s position was precarious. It underscores the viciousness of race relations in turn-of-the century and early-20th-century America (and not just in the South). Just as Washington was trying to give blacks a blueprint for progress, laws were proliferating that solidified white control, backed by lynchings (nearly 200 a year in the 1890s) and other violent actions.
In that environment, would Washington have been more successful with something other than a strategy of practical education, social separation, and avoidance of politics? And perhaps he was successful, building a foundation (symbolized by Tuskegee Institute) that served blacks well during a time of oppression, even though its philosophy was eventually rejected.
Others who know much more about this than I do are the ones to evaluate Booker T. Washington's successes and failures for the current generation. But that evaluation should, at the least, be based on the environment in which he lived, not on the one we live in today.
The federal government pressured banks to lend money to unqualified homebuyers. The federal government backed Fannie Mae and Freddie Mac, which bought up those home loans, making them essentially risk-free for the original lenders.
The Federal Reserve made money readily available. (On these pages, there has been some dispute about that, but the disagreement reflects the time period under discussion; I don’t think there is any doubt that from 2002 to 2004, under Greenspan, the Federal Reserve increased the money supply, and some would say to an extreme degree.)
The Center for Public Integrity is taking a selective look backward to see who offered subprime mortgages and whether they were the same companies that accepted TARP funds. That's almost tautological.
You will recall that Henry Paulson brought the leading banks into his office and told them that they had to accept funds from the federal government before they could leave the room.
I welcome any improvements on this chronology.
But EJW also points out the establishment's erroneous assumptions and illogic and offers more market-oriented alternatives. For example, David Henderson challenges the
smug assumptions of two economists arguing that smoke-free ordinances raise restaurant profits (May 2008).
And William Davis and Bob Kennedy point out that most establishment economists write as though American democracy is a "wise, reliable, melioristic" process (May 2009). Then they discuss a survey revealing that these same economists are actually quite skeptical of the political process; thus, establishment economists' policy prescriptions tend to be at odds with their personal beliefs (May 2009).
The peer-reviewed journal is sponsored by the American Institute of Economic Research in Great Barrington, Massachusetts. It is not a blog and doesn't accept online comments, but it has good readership for an academic journal (you can see the number of hits under "Archive") and its cites are quite respectable. In spite of its belligerence against the current economic establishment, it's gained quite a bit of traction since it started in 2004. Do historians have such a thing?
Born in 1915 to educated parents living in an all-black town in Oklahoma, Franklin lived in “dignified, abject poverty.” Only his prudential virtues -- determination, thrift, discipline, attention to detail -- and his natural brilliance enabled him to overcome the racial hostility that was endemic in the South but that also touched him when he attended Harvard.
Through Herculean efforts, he received an outstanding education, and over time he began obtaining the honors due him -- professorial appointments at schools such as the University of Chicago and Duke, the presidency of the American Historical Association, awards such as the Presidential Medal of Freedom. By his own account, his life was rich and satisfying, professionally and personally. He experienced the reward of a loving marriage of nearly sixty years, and he dedicated his book to students “from whom I have learned more than they will ever know.” He does not seem to have been an unhappy person.
But even with such deep satisfactions, Franklin never set aside the righteous anger that racism engendered in him. This is the contradiction that puzzled me: his life was good, but the memory of racism (and the racial barriers that he perceived even late in life) was unrelenting.
The pain of these barriers pervades his book from the first page: “Born in 1915, I grew up in a racial climate that was stifling to my senses and damaging to my emotional health and social well-being,” he writes. On the second page, he calls racism “a challenge to the strongest adult” but “cruelty” to children. He alludes to a famous incident; when he was 80 years old at a Washington, D.C., club to receive the Presidential Medal of Freedom, a woman gave him her coat check and asked him to get her coat.
Given his constant consciousness of deprivations, slights, and indignities, it is not surprising that Franklin agreed to head President Clinton’s advisory panel on race. But the experience disappointed him because the nation never got the conversation on race that he had hoped to initiate.
Franklin is, of course, absolutely right about the shameful racial divide in this country in the past. And many will consider it admirable that Franklin refused to let go of this past -- why should he, or anyone, make his peace with mistreatment and prejudice?
After much thought, however, I have concluded that his refusal is better understood as a “conflict of visions.”
As readers of Thomas Sowell’s writings know, a person’s ideological and policy views tend to reflect a consistent way of looking at life -- a consistent “vision.” In his book Conflict of Visions, Sowell identified two leading visions. The unconstrained vision sees unlimited possibilities in human nature, anticipating the unfolding of better and better qualities. The constrained vision accepts human nature as flawed; rather than expecting human nature to change, this vision looks to changes in institutions (laws and customs) to spur people to act differently.
Franklin, like many liberals, seems to have had an unconstrained vision. That is, he was an idealist who kept believing that people would someday live up to the nation’s ideals. For example, if people would talk forthrightly about race, they would understand more and thus act more humanely; race might disappear as an issue.
For those who hold the constrained vision, however, such hopes are quixotic. They believe that the elimination of Jim Crow laws reduced racial barriers by changing people’s incentives, not their nature. And market forces, rather than forced persuasion, are more likely to improve racial relations in the future.
An incident from Mirror to America may indirectly corroborate Franklin’s “unconstrained vision.” In his second chapter, Franklin explains that his home town was divided into two factions -- the Baptists and the Methodists. Because his family was Methodist, the Baptist-run school board refused to let his mother take a maternity leave, telling her to resign instead; only the intervention of the white county school superintendent let her keep the job. This factionalism actually got worse -- leading to shots fired at their home -- as Franklin’s father’s independent spirit continued to offend the Baptists.
Initially, I thought that Franklin started his story as he did to make an ironic point. I thought he was going to reveal that flaws in human nature are universal, that racism is one -- one of the ugliest, yes, but still just one -- manifestation of underlying human failings. But he didn’t make that point. The anecdote seems to have simply been a way of explaining the circumstances around his birth (and his family’s eventual departure to Tulsa). His lifelong mission, after all, was to eradicate racism.
But isn’t this factionalism the same kind of petty and inhumane behavior that finds expression in racism?
Franklin’s long and productive life reveals that it is possible to overcome enormous barriers. His devotion to the highest standards of scholarship, his dedication in the face of obstacles, and his personal rapport with his students all make his life exemplary -- more exemplary, in fact, than his philosophy. Guided by the unconstrained vision, his philosophy may have distorted his view of reality and, as it does for many liberals, led to profound disappointment.
There is but one means, the progressive believes, to free mankind from the misery and degradation produced by laissez-faire and rugged individualism, viz., to adopt central planning, the system with which the Russians are successfully experimenting. It is true that the results obtained by the Soviets are not yet fully satisfactory. But these shortcomings were caused only by the peculiar conditions of Russia. . . .
Such is the philosophy taught at most present-day schools and propagated by novels and plays. It is this doctrine that guides the actions of almost all contemporary governments. The American "progressive" feels ashamed of what he calls the social backwardness of his country. He considers it a duty of the United States to subsidize foreign socialist governments lavishly in order to enable them to go on with their ruinous socialist ventures. In his eyes, the real enemy of the American people is big business, that is, the enterprises which provide the American common man with the highest standard of living ever reached in history. . . . He never mentions the new or improved products which business almost every year makes accessible to the masses. But he goes into raptures about the rather questionable achievements of the Tennessee Valley Authority, the deficit of which is made good out of taxes collected from big business.
The most infatuated expositors of this ideology are to be found in the university departments of history, political science, sociology, and literature. The professors of these departments enjoy the advantage, in referring to economic issues, that they are talking about a subject with which they are not familiar at all. This is especially flagrant in the case of historians.
Often, a long time must pass before we see facts clearly. By the time historians can be objective, most of the relevant people who really knew what happened (and were reluctant to tell it) are dead.
That is also the case with the question of whether FDR withheld knowledge of the pending attack on Pearl Harbor. I have been convinced--by John Toland especially--that Roosevelt and George Marshall knew about the attack and let it happen, but that idea is so offensive to many FDR partisans that it has been mostly ignored. Amazon just informed me that a new book, by George Victor, says somewhat the same thing. I can't wait to read it.
Wall Street may have had its collective head in the sand and it certainly reaped where it did not sow, but far worse than Wall Street's evils is for the government to dictate what can and cannot be paid in compensation.
Okay, the government already does that with the minimum wage, and the government obtained power over Wall Street because it "rescued" some of those companies. (In some cases, Henry Paulson forced them to submit, in a scene reminiscent of, oh, say, Henry VIII forcing Thomas More to cede power. Thomas More didn't, and he was murdered.)
Even liberals despise the term "dictator" but they are apparently happy when their government is a dictator.
It's funny -- I remember reading long ago a shocked reaction to John F. Kennedy's successful effort to "persuade" steel companies to hold down their prices. I was a liberal back then (and very young!) and I couldn't understand the negative reaction, as if this was some kind of precursor to greater government power. Of course, we have seen that greater government power, from Nixon's wage-and-price controls to today's unprecedented interventions.
Intervention is just a part of the scene now (even though, I just read, Nixon said in his autobiography that wage-and-price controls were a mistake). We learn, but we learn too late. And the learning today is at the kindergarten level.
Well, my head is spinning. It could be the wine at dinner, but, rather, I suspect it is trying to read the emotional and combative reactions in the" comments" section.
The topic is provocative and worthy of reaction. But as David Beito encouraged us to do, next time could we bring such comments into the"open"? It would be better to engage in conversation that all can conveniently read. When one's response to controversial statements is encased in a section that is specialized and difficult to reach (well, lengthy scrolling may not be difficult but surely it reduces readership), the commentators are likely to be less thoughtful, more antagonistic, and even less logical.
So I encourage commentators to be generous -- share your views with all. Simply respond in a new post.
Ford’s approach to inflation was WIN (“Whip Inflation Now”) buttons, which were silly, perhaps, but much better than the wage-and-price controls of his predecessor. I am told that he vetoed more bills than any other president since Dwight D. Eisenhower--many of them big spending bills pushed by the Democratic majority in Congress. And although he was a congressman for 25 years, he never wrote a major bill.
Ford pardoned Nixon, which lost him re-election but ended what could have been a long, bitter, and divisive perpetuation of the “hate-Nixon” mood. When Ford died, even Ted Kennedy and the New York Times agreed that his pardon was the right decision.
I was always sorry that he hadn’t coupled the pardon with amnesty for Vietnam objectors. It would have helped to ease the pain caused by the previous decade and it might have won him re-election.
Leef: Would you suggest the three best books for someone – President Obama, Governor Perdue, a soccer mom, a college student, Joe the Plumber or anyone else – to read for a good start on understanding economics?
Munger:
Todd Buchholz, New Ideas from Dead Economists
Paul Heyne, The Economic Way of Thinking
Burton Malkiel, A Random Walk Down Wall Street And, the SINGLE best, ONE thing to read is: Leonard Read’s essay"I, Pencil."
Herman convincingly argues that the Scottish Enlightenment thinkers such as Adam Smith, David Hume, and Adam Ferguson discovered the principles and concepts that ushered in the Industrial Revolution, forever changing the face of the world.
But how did that happen in that tiny, chilly, and rather poor country? Herman offers some hints but doesn’t quite pull it together. At the top of his list is “the Kirk.” At the end of the 17th century, the Scottish Presbyterian Church was narrow, rigid, and cruel, and Herman begins his story with the vicious execution of Thomas Aikenhead, a boy who foolishly said something blasphemous and died as a result.
But Herman also gives the Kirk, and especially John Knox, the fiery 16th-century preacher who brought Protestantism to Scotland, priority of place. Knox and his church initiated a long process of freeing men’s minds from obeisance to authority and moving toward freedom of conscience. The Kirk didn’t carry out the ideals of freedom but it seems to have embodied some habit of mind—something—that laid a foundation. It also played a role in achieving the high level of literacy that Scotland acquired.
Another contributing factor was the 1707 treaty of union, “a merger that fully absorbed Scotland into the kingdom of England,” in Herman’s words. Scotland’s submission was “drastic,” says Herman, and was expected to lead to disaster. Oddly enough, it “launched an economic boom” (probably because it opened up Britain’s overseas markets to Scottish trade). The new wealth must have made possible the leisurely contemplation that intellectuals engaged in (in Edinburgh and Glasgow, aided by large quantities of claret).
Stern Protestantism, widespread literacy, lack of political power (and thus finagling), economic growth—could these explain the Scottish Enlightenment? Maybe, if we add (as Herman does) the fact that Glasgow and Edinburgh were just a half a day apart by post coach, so that Adam Smith and his friends could share ideas, whichever city they lived in.
As a former president of APEE, I can tell you that there is always a bit of a scramble to get panels together, so an early proposal is a bonanza. But just as assuredly, your reputation for an interest in liberty precedes you and commends you. And you are a philosopher, to boot! (APEE attendees tend to be economists.)
Loury criticizes Gates for having neglected their condition while a prominent scholar of African-American studies for the past 30 years and chastises President Obama for not taking a stand against the incarceration of so many black men when he had a chance to do so in his campaign.
Stressing the tragedy of these millions of incarcerated men, Loury doesn't simplify the causes, but he does come out against"three-strikes" laws and in favor of decriminalizing drugs.
