Roundup: Historian's Take
This is where we place excerpts by historians writing about the news. On occasion this page also includes political scientists, economists, and law professors who write about history. We may from time to time even include English profs.
SOURCE: The New Republic (10-20-11)
Michael Kazin’s latest book is American Dreamers: How the Left Changed a Nation. He teaches history at Georgetown University and is co-editor of Dissent.
“This occupation is for you.” The protestor with a trim grey beard smiled a bit as reporters and tourists snapped pictures of the small, handmade sign he was holding at the entrance to Zuccotti Park. His simple slogan—and the month-long occupation that inspired demonstrations in over 900 cities last weekend—may represent the beginning of a new chapter in the history of the left. Or the whirlwind of activism could end up sharing the fate of other protest campaigns since the 1960s, from anti-apartheid to global justice, leaving its organizers wondering how they let so splendid an opportunity slip away.
The greybeard’s slogan, a variant of the ubiquitous chant “We are the 99 percent!” makes an audacious claim: We may be just a few hundred people willing to camp out on a concrete slab a few blocks from Wall Street. But we are angry about how the economic elite and their neoliberal system caused a global economic crisis, and we have discovered a way to turn that anger into studying up on and debating the possibilities as fast as we can. But we do know that the crisis has battered the jobs, wages, and benefits of million of people all over the world. And, until the global economy is restructured in the interests of the battered majority, the very rich and extremely irresponsible will continue to have their way with us.
This deeply moral and democratic message represents a leap beyond what most left-leaning activists, both in the U.S. and in Europe, have been saying since the 1960s. Gender equality, multiculturalism, opposition to military intervention, and global warming are all worthy causes. So was the sometimes disjointed attack on the World Bank and the IMF that briefly shut down Seattle in 1999. But each of these causes represented the passions of discrete groups whose opponents were able to belittle them as “special interests.” For all their virtues, each cause was either absorbed into the political culture (like feminism) or (like environmentalism and the movement against the invasion of Iraq) confronted powerful enemies able to wage a grossly unequal fight....
Posted on: Thursday, October 20, 2011 - 10:01
SOURCE: The Collegian (CSU-Fresno) (10-19-11)
Ethan Kytle is a history professor specializing in 19th century American history and the Civil War at Fresno State.
This weekend thousands of Valley residents will descend upon Kearney Park for Fresno’s annual Civil War Revisited reenactment. They will be treated to “the sights and sounds of the 1860s,” as self-styled “living historians” — most clad in Union blue or Confederate gray — set up camp, march in formation and demonstrate antebellum crafts. The centerpiece will be a reenactment of the Battle of Bull Run, pitting Yanks and Rebs against one another as if it were 1861.
This year’s event takes on a special significance. It comes on the 150th anniversary of the start of a war that nearly tore the nation in two. It is high time that we take stock of how we remember this pivotal moment, both at our annual Kearney Park event and beyond.
I confess that as a Civil War historian I find events like Civil War Revisited frustrating. On the one hand, I am thrilled to see people engage history — especially my period of expertise — with enthusiasm. Many of the students who turn up each year in my classes say that trips to the reenactment stoked an early interest in the past.
On the other hand, I am discouraged by what tends to be remembered and forgotten at such events....
Posted on: Thursday, October 20, 2011 - 08:43
SOURCE: NYT (10-19-11)
OCCUPY WALL STREET, the protest encampment at Zuccotti Park in Lower Manhattan, has many historical inspirations. After all, the tactic of sitting down and refusing to move was used by angry veterans marching on Washington in the early Depression years, striking automobile workers in the late 1930s and civil rights protesters in the 1960s. But there is a local precedent, one that few people remember today: the sit-ins and “occupations” that followed New York City’s deep budget cuts in 1975 and 1976.
In the spring of 1975, amid a recession and mounting anxiety about municipal bookkeeping, the banks that had long marketed the city’s bonds refused to do so any longer. To regain access to the bond market, and under pressure from Albany and Washington, Mayor Abraham D. Beame proposed a series of austerity budgets, slashing funds for schools, libraries and firehouses and, for the first time, charging tuition for the City University of New York.
Leaders of public sector unions organized a mass march on Wall Street to protest the cuts. They criticized the First National City Bank (forerunner of Citibank) for failing to support the city in its hour of need. They urged members to cancel their accounts and withdrew union funds from the bank....
Posted on: Thursday, October 20, 2011 - 08:02
SOURCE: The New Republic (10-19-11)
David Greenberg, a contributing editor to The New Republic, teaches history at Rutgers University and is at work on a history of presidents and spin.
It was the spring of 1968 and the Columbia University campus was in revolt. “You must come right up, Dwight!” F.W. Dupee, a Columbia professor and one of the original Partisan Review editors, beseeched Dwight Macdonald. “It’s a revolution! You may never get another chance to see one.”
Macdonald raced uptown. “He was right,” the critic said of Dupee, delighting in the “atmosphere of exhilaration, excitement” they found at Columbia, where “communards” made decisions through a deliberative, democratic process. Here were hopeful signs, thought Dupee and Macdonald, a new generation productively channeling its radical energies.
I don’t think that Occupy Wall Street represents the coming revolution any more than did Columbia ’68—which, of course, ended disastrously, with university president Grayson Kirk calling in the cops to bust heads. But having visited Zuccotti Park, having shared drinks with a handful of its (self-identified) instigators, having found myself drawn to reading compulsively about the plans and politics of the movement (if this heterogeneous outburst can be even labeled with a singular noun), I plead guilty to a frisson of the excitement Dupee and Macdonald felt more than four decades ago. At a time of quiet despair about the failure to reform the catastrophic pro-business policies of the Bush years, this spontaneous outpouring of mass support—sustained day after day, spreading from city to city—offers a sense of hope that can hardly fail to inspire....
Posted on: Wednesday, October 19, 2011 - 09:09
SOURCE: New York Post (10-18-11)
Arthur Herman is the Pulitzer Prize-finalist author of Gandhi and Churchill.
Ten years ago today, the first American Special Forces landed in Afghanistan as part of Operation Enduring Freedom. Five weeks later, the fighting was over, as Osama bin Laden and al Qaeda fled across the border into Pakistan and the Taliban regime collapsed.
Some obvious questions demand answers: Why that victorious tide of war became reversed? Why we are still fighting there a decade later -- and what do we hope to achieve? And, on the other hand, what happens if we don’t stay -- if a war-weary America gives up on that rugged, forbiddingly primitive country and its tough, valiant people?
Make no mistake: Afghanistan is now the vital front line in our fight with Islamicist terrorism; abandoning it now could make the difference between ultimate victory and suffering another, even more deadly, 9/11.
Certainly we’ve made a host of mistakes until now. For one, it was never clear whether the goal of Operation Enduring Freedom was to destroy al Qaeda, topple their Taliban protector or to establish a new government in its place. Somewhat to our surprise, we ended up doing all three so quickly that no one was prepared for what came next…
Posted on: Wednesday, October 19, 2011 - 08:50
SOURCE: WSJ (10-13-11)
Mr. Fleming, a former president of the Society of American Historians, is the author, most recently, of "The Intimate Lives of the Founding Fathers" (Smithsonian, 2009).
'We demand the forgiveness of all debts." After several days of listening to the Occupy Wall Street protesters, I had begun to lose all hope of grasping exactly what they wanted, beyond some sort of "change." I was almost relieved to hear this endorsement of a solution to a specific problem, especially pertinent to protesters in their age group who owe millions of dollars to the federal government for the money they borrowed to go to college....
Did they know, on this point, they were echoing Thomas Jefferson? If so, these protesters and their sympathizers might want to think twice.
Debt forgiveness was not original with Jefferson, who enunciated it in a letter to his favorite correspondent, James Madison, on Sept. 6, 1789, when the French Revolution was picking up steam in Paris....
In a masterpiece of understatement, James Morton Smith, the editor of "The Republic of Letters," a three-volume collection of their correspondence, says Madison's reply to Jefferson's proposal was "a severe test of their friendship." Point by point, the younger man demolished Jefferson's silliness with polite but irrefutable logic....
Posted on: Monday, October 17, 2011 - 19:26
SOURCE: WSJ (10-17-11)
Miss Shlaes, author of the forthcoming "Coolidge" (HarperCollins), joined the George W. Bush Institute this week as director of its economic growth project.
Sometimes two separate news events turn out to be related. That's the case with the Wall Street protesters and the extraordinary mourning at the death of Steve Jobs.
Some protesters have praised Jobs as the billionaire who was different—unlike the callous Wall Streeters, he was "beneficial to society." There's a second connection. More than anything else, the Wall Street protesters feel powerless, mere individuals against great banks. Maybe the mourning over the Apple founder is so intense precisely because Jobs gave individuals power. It's hard to think of a gift more empowering than your own personal computer.
Also fueling the grief is a more general suspicion that another Jobs won't come along soon. He was a creature of his times, the late 1970s, the 1980s and 1990s. There wasn't merely Jobs; there was also that economy in which he and other venture-capital recipients operated. Americans fear that the opportunities Jobs enjoyed won't come again.
It's worthwhile therefore to go back and look at what happened in those years, and then to look at how policy changes may have affected innovating firms that received venture capital.
The era didn't start well. The mid-1970s were a dead period. Then suddenly, from 1977 to 1978, new private capital devoted to venture capital increased by 15 times, to $570 million in 1978 from $39 million the year before....
Posted on: Monday, October 17, 2011 - 15:29
SOURCE: NYT (10-15-11)
Jill Lepore is a professor of history at Harvard and the author of “The Whites of Their Eyes: The Tea Party’s Revolution and the Battle over American History.”
...Lately, Mr. Cain has risen in the polls, buoyed by Tea Party populism, which is curious because when the word “populism” was coined, in 1890, it meant opposition to a monopoly on wealth held by businessmen and bankers.
Henry George, the most popular American economic thinker of the 19th century, was a populist before populism had a name. His economic plan was known as the Single Tax. His plan wasn’t 9-9-9; it was just: 1....
In 1879, George finished a draft of his most important book. “Discovery upon discovery, and invention after invention, have neither lessened the toil of those who most need respite, nor brought plenty to the poor,” George wrote. He thought the solution was to abolish all taxes on labor and instead impose a single tax, on land. He sent the manuscript to New York. When no one would publish it, he set the type himself and begged publishers simply to ink his plates. The book, “Progress and Poverty,” sold three million copies....
George was neither a socialist nor a communist; he influenced Tolstoy but he disagreed with Marx. He saw himself as defending “the Republicanism of Jefferson and the Democracy of Jackson.”... [H]e thought that speculative, industrial capitalism was destroying democracy by making economic equality impossible. A land tax would solve all....
Posted on: Monday, October 17, 2011 - 09:28
SOURCE: LA Times (10-16-11)
Andrew J. Bacevich is professor of history and international relations at Boston University. He is the editor of The Short American Century: A Postmortem, to be published next year.
In the United States, despite a Constitution that mandates the separation of church and state, religion and politics have become inseparable. To lend authority to their views, presidential aspirants of both parties regularly press God into service. They know what he intends.
So the claims made by Republican front-runner Mitt Romney in a recent speech at the Citadel managed to be both striking and unexceptionable. "God did not create this country to be a nation of followers," Romney announced. "America must lead the world." Absent the "clarity of American purpose and resolve, the world becomes a far more dangerous place," with freedom itself in jeopardy. To avert this catastrophe, Romney declared, "this century must be an American century," with the United States economically preeminent and wielding "the strongest military in the world."
Whence do these insights derive? "Why should America be any different than scores of other countries around the globe?" Romney asked rhetorically. His answer captures the essence of our present-day civic religion: "I believe we are an exceptional country with a unique destiny and role in the world."..
Posted on: Monday, October 17, 2011 - 08:19
SOURCE: Politico (10-11-11)
Alan Brinkley, a history professor at Columbia University, is the author of “Voices of Protest: Huey Long, Father Coughlin & the Great Depression.” His most recent book is “The Publisher: Henry Luce and His American Century.”
Protests are usually messy, noisy and often confused. But they have produced some of the most important changes in American history — the Sons of Liberty, the abolitionists, the populists, the labor movements, the civil rights movements, the anti-war movements and many others. All were first attacked as rabble and mob rule. But our democracy would be far more fragile without them — seldom more so than during economic crises.
The Occupy Wall Street protests are the product of the 2008 economic crisis and the growing anger toward the financial world. Whether this new movement will survive, no one knows — but it is a continuation of a long-standing tradition.
Three years after the beginning of the 2008 economic crisis, protesters have begun to march in cities across the nation demanding efforts to reduce inequality and to support the needs of the thousands of Americans out of work. Three years after the beginning of the Great Depression, frustrated, unemployed Americans — many of them veterans of earlier local protests — began to organize national protests to help desperate, unemployed people. There are many differences between these two movements — but also significant similarities.
More than 40,000 veterans, many of them homeless, gathered in Washington to persuade Congress to distribute the bonus. A sympathetic Congress passed the bill; President Herbert Hoover vetoed it. Most of the veterans left the city soon after — but several thousand remained. Some lived in empty government buildings near the Capitol, others in a makeshift shantytown just across the Anacostia River. They stayed through the summer, serving as a constant embarrassment to the president — who refused to see them. Security around the White House intensified, picketing was banned, streets closed off....
Posted on: Saturday, October 15, 2011 - 15:02
SOURCE: Philadelphia Inqurier (10-13-11)
Jonathan Zimmerman teaches history at New York University and lives in Narberth. He is the author of "Small Wonder: The Little Red Schoolhouse in History and Memory" (Yale University Press).
Last week, I bumped into one of my students on her way to the "Occupy America" protest near Wall Street. I told her I was glad she was participating in the most exciting political development I'd seen in years. "You're right," she replied cheerily. "It's like our own Arab Spring."
No, it isn't. Such analogies demean demonstrators in the Middle East, who have risked torture and death. And they discount America's rich tradition of free speech, which has been on vibrant display since the Occupy America movement began.
...By every measure - income, home ownership, education - the gap between our haves and have-nots has widened. That's why I'm a fan of the Occupy America demonstrators, who have shone a bright light on these facts.
But it's also why I deplore facile comparisons to the Arab Spring, which harm the credibility of anyone who makes them. Consider that an estimated 2,900 people have already lost their lives in Syria alone, according to the United Nations' human rights office. More than 800 died in the protests in Egypt, and nearly 500 in the demonstrations in Tunisia, Yemen, and Bahrain....
Posted on: Thursday, October 13, 2011 - 14:16
SOURCE: Guardian (UK) (10-12-11)
Timothy Garton Ash is a historian, political writer and Guardian columnist. His personal website is www.timothygartonash.com.
What if it falls apart? For all my adult life, I have been what in England is called a pro-European or Europhile. For most of that time, European history has been going our way. Now it may be on the turn. Soon, it could be heading the Eurosceptics' way. What then?
Over the last half-century, the institutional organisation of Europe has progressed from a common market of six west European states to a broader and deeper union of 500 million individual Europeans and 27 countries, from Portugal to Estonia and Finland to Greece; 17 of them share a single currency, the euro. There are no border controls between 25 European countries in the Schengen area. Enveloping it all is the fragile skin of the European convention on human rights (now under facile attack from some British Conservatives) which allows any individual resident of no less than 47 countries, including Russia, to contest a violation of their inalienable human rights all the way to a European court of human rights in Strasbourg.
Never has Europe been so united as this. Never have more of its people been more free. Never before have most European countries been democracies, joined as equal members in the same economic, political and security community. Our continent still has a grotesque amount of poverty, injustice, intolerance and outright persecution. (Try living as a Roma or Sinti in eastern Europe for a taste of all that.) I prettify nothing. But – to adapt a famous remark about democracy by that great pro-European British conservative, Winston Churchill – I do say that this is the worst possible Europe, apart from all the other Europes that have been tried from time to time.
Now all this is under threat...
Posted on: Thursday, October 13, 2011 - 06:43
SOURCE: NYT (10-12-11)
Posted on: Wednesday, October 12, 2011 - 11:18
SOURCE: National Review (10-11-11)
We are told there are lots of reasons why borrowing $5 trillion in less than three years and federalizing health care have not yet restored prosperity.
The residents of George Orwell’s Oceania daily screamed at the infamous visage of arch-enemy of the people Emmanuel Goldstein. In the same way, almost every week for the last 140, Americans have been reminded just how nefarious and lasting was the work of George W. Bush. Now ensconced somewhere in Texas, Bush, in insidious ways, somehow still blocks our collective recovery.
Wall Street likewise continues to conspire to thwart Americans. “Fat-cat bankers,” “millionaires and billionaires,” people who fly in “corporate jets,” and those who “don’t pay their fair share” and who junket to Las Vegas or jet to the Super Bowl “on the taxpayers’ dime” have all ignored the president’s warnings. Did they not hear that “now is not the time for profit” and “I do think at a certain point you’ve made enough money”?...
Posted on: Tuesday, October 11, 2011 - 14:10
SOURCE: Charlotte Observer (10-7-11)
Peter A. Coclanis is Albert R. Newsome Distinguished Professor of History and director of the Global Research Institute at UNC Chapel Hill.
Food and foodways are often linked closely with place, culture and memory. What would Indian cuisine be without chili peppers, Italian cuisine without tomatoes and the Swiss without chocolate? That in each one of these cases the food so closely identified with a particular place and culture was native not to that place or culture, but to the Americas is one of the key takeaways from Charles C. Mann's provocative new book, "1493."
Although globalization has been well talked about for decades, scholars have been tireless in pointing out that globalization is neither new nor irreversible. Because these scholars often write for their peers rather than for general audiences, their findings seldom make it off campus, which makes works by smart, accessible journalists such as Mann so valuable. Mann also wrote "1491," a best-selling history of the Americas before Columbus.
In "1493" Mann makes the case that Columbus' profound significance relates to the fact that his landing on the Caribbean island of Hispaniola (in what is now the Dominican Republic) marked the true beginnings of globalization....
Posted on: Monday, October 10, 2011 - 12:40
SOURCE: China Daily (10-9-11)
Han Dongping is Professor of History and Political Science at Warren Wilson College, NC. The views expressed here do not necessarily reflect those of the China Daily website.
...As the only superpower of the world, the U.S. has a tendency to blame its problems on others. It wants other countries to take the medication for its illness, and it wants other countries to pay the price for its mismanagement of its finance and economy. The most recent bill the U.S. Senate passed on Monday is to pressure China to value its currency is such a measure again. This bill is arbitrary and unreasonable, and will not help the U.S. solve its financial and economic crises in the end....
One of the protesters in New York said it as well. America has so much wealth that would allow everybody to live adequately if it had been distributed more evenly.
The U.S. government should stop blaming others for its own problems, and stop forcing others to take the medication for its own illness. Instead, it should start by doing three right things: cut its senseless military overspending, end the senseless wars overseas and give the middle class a break by taxing the rich more. With these three right measures, America will surely be able to solve its problems gradually....
Posted on: Monday, October 10, 2011 - 12:36
SOURCE: CNN.com (10-10-11)
Julian E. Zelizer is a professor of history and public affairs at Princeton University. He is the author of "Jimmy Carter" (Times Books) and editor of a book assessing former President George W. Bush's administration, published by Princeton University Press.
...In some ways, Obama is looking back to President Harry Truman's 1948 campaign against Republican Thomas Dewey. In a stunning come-from-behind campaign, where most of the pollsters were wrong in their predictions, Truman railed against the "Do-Nothing Congress" and appealed to core Democratic constituencies such as organized labor to win re-election.
But this style of campaign poses many risks to the president in 2012. Obama does not have the same kind of huge foreign policy record that helped Truman neutralize the GOP in 1948, a campaign that came one year after the Truman Doctrine and the same year as the Marshall Plan....
A populist, anti-Washington campaign is at odds with the Obama whom the nation has seen up close since January 2009. While the president clearly shares many concerns with the left wing of the party, it's also clear that he is much more comfortable staying close to the center. He governs much more like President Bill Clinton than one might have expected from his 2008 primary campaign. Obama is a pragmatist and a politician, less concerned about ideological purity than about political outcomes.
The president's relationship with the left has been extremely tense. During a series of legislative battles, including the one over health care reform, Obama kept his distance from the base of his party in an effort to find legislation that could win over the handful of centrists in his own party and the GOP. Some members of his administration, including former press secretary Robert Gibbs, have made tough statements about the need for liberals to be more realistic about their goals.
Unlike Truman, who had his own problems with the left, Obama cannot point to a huge record from his party of successful policies that have bolstered the security of America's middle class. When Truman ran in 1948, FDR and the New Deal were still fresh on the minds of most voters....
Posted on: Monday, October 10, 2011 - 12:33
SOURCE: Newsweek (10-10-11)
Niall Ferguson is a professor of history at Harvard University and a professor of business administration at Harvard Business School. He is also a senior research fellow at Jesus College, Oxford University, and a senior fellow at the Hoover Institution, Stanford University. His latest book, The Ascent of Money: A Financial History of the World, was published in November.
This essay is not about Steve Jobs. It is about the countless individuals with roughly the same combination of talents of whom we’ve never heard and never will.
Most of the 106 billion people who’ve ever lived are dead—around 94 percent of them. And most of those dead people were Asian—probably more than 60 percent. And most of those dead Asians were dirt poor. Born into illiterate peasant families enslaved by subsistence agriculture under some or other form of hierarchical government, the Steves of the past never stood a chance.
Chances are, those other Steves didn’t make it into their 30s, never mind their mid-50s. An appalling number died in childhood, killed off by afflictions far easier to treat than pancreatic cancer. The ones who made it to adulthood didn’t have the option to drop out of college because they never went to college. Even the tiny number of Steves who had the good fortune to rise to the top of premodern societies wasted their entire lives doing calligraphy (which he briefly dabbled in at Reed College). Those who sought to innovate were more likely to be punished than rewarded...
Posted on: Monday, October 10, 2011 - 07:25
SOURCE: The Atlantic (10-7-11)
Yoni Appelbaum is a social and cultural historian of the United States. He is a doctoral candidate at Brandeis University, and a lecturer in history at Babson College. He previously contributed to TheAtlantic.com under the name Cynic.
For the first time in a century, monetary policy stands at the center of our political debate. A number of leading contenders for the Republican presidential nomination are vying to persuade voters of the depth of their hostility to the Federal Reserve. Last month, Texas Governor Rick Perry suggested that further action from the Fed might be "treasonous," and that if it were pursued, "we would treat [Fed Chairman Ben Bernanke] pretty ugly down in Texas." Rick Santorum called for a "sound-money Federal Reserve," Newt Gingrich labeled the Fed "dangerous" and Michele Bachmann accused it of wielding "almost unlimited power over the economy." And then there's the Fed's most passionate critic, Ron Paul, who accuses it of being "a full time counterfeiting operation to sustain monopolistic financial cartels."
The idea that it is not merely mistaken, but positively immoral, for the federal government to manipulate the money supply is as old as the republic. It has found its greatest popularity during moments of economic crisis, as voters search for a single identifiable cause, and cure, to the tangled problems they face. That poses an almost-irresistible temptation to politicians hoping to win office by tapping popular frustrations. But they are playing with fire. The last time a major political party fused moral fervor and monetary policy in this fashion, it plunged a stalling economy back into recession and sentenced itself to two decades of political irrelevance.
THE LESSONS OF 1896
The Depression of 1893 paralleled, in many ways, our current plight. It started as a financial panic, and soon deepened into the worst economic crisis the nation had ever faced. Confidence plummeted, banks failed, businesses went bankrupt, and unemployment soared.
The economic crisis struck amidst a simmering political insurgency. The People's Party, better known as the Populists, had enjoyed considerable success in the election of 1892, particularly in agricultural regions that were already suffering economically. To build on its triumphs, the party searched for a defining issue that could speak to the economic malaise. Out of the mass of proposals emerged a single, simple idea that almost all factions could back: bimetallism....
Posted on: Sunday, October 9, 2011 - 10:20
SOURCE: Salon (10-6-11)
H.W. Brands taught at Texas A&M University for sixteen years before joining the faculty at the University of Texas at Austin, where he is the Dickson Allen Anderson Centennial Professor of History. His books include “Traitor to His Class,” “Andrew Jackson,” “The Age of Gold,” “The First American,” and “TR.” “Traitor to His Class” and “The First American” were finalists for the Pulitzer Prize.
This is an excerpt of an excerpt from his latest book, "Greenback Planet."
...The nineteenth century had been the era of the gold standard, the twentieth of the dollar standard. What the twenty-first century will be is anyone’s guess. But some guesses have been more credible than others. The dollar has had a good run. It made America rich; it saved democracy; it defeated communism. Yet it suffered from its very success. As the closest thing to a world currency, it knitted the planet into a single economy more fully than any currency before. In doing so it spread prosperity more widely than prosperity had ever been spread, but it diluted prosperity for those steelworkers in America, maize farmers in Mexico, cobblers in Italy who found they couldn’t compete in the new world market.
And it magnified the effects of the instabilities that have always afflicted dynamic markets. The financial panics of the early nineteenth century in America were local affairs, confined to a modest number of firms and affecting comparatively few people. The panics of the late nineteenth century had national effects, with some transatlantic connections via the gold standard, yet most of the world hardly noticed. In the modern era — the era of the dollar — the world couldn’t help noticing. The panic of 1929 helped trigger the global crisis of the 1930s. Not by accident did the nations of the world, gathered in London in 1933, listen for Franklin Roosevelt to declare the value of the dollar and thereby decree their fate. Richard Nixon’s closing of the gold window in 1971 rocked financial markets from London to Tokyo and Buenos Aires to Bombay. The dot-com bubble of the late 1990s burst in Silicon Valley but blew out lights in Bangalore and Mumbai (Bombay’s new name), Shanghai and Taipei, Seoul and Sydney...
The dollar’s demise, if it came to that, would be America’s problem, but the world’s as well. Much of the planet has come to depend on the dollar, and replacing it would be difficult and painful. No alternative reserve currency made a compelling claim. Use of the euro is spreading, but the EU’s money lacks the ubiquity of the greenback, and efforts to rescue the Greek government have revealed deep rifts in the euro zone. China’s currency, the yuan, isn’t even traded on world markets. Japan’s once-mighty yen still floundered two decades after Tokyo’s swoon. Besides, with so much of the world invested in the dollar, the costs of changing over to another root currency would be prohibitive.
But the alternative to the dollar need not be a single currency. When Gao Xiqing and others spoke of a second Bretton Woods conference, they envisioned replacing the dollar with a market basket of moneys. No one of the currencies need be as strong as the dollar had been; together they could do what the dollar no longer could. The market basket approach had its own problems, but as time passed and the American deficit continued to grow, the dollar doubters seemed ever more likely to have their way. Financial power talked, just as it had for the Americans at the first Bretton Woods conference....
Posted on: Thursday, October 6, 2011 - 16:05