Category: Economics – Economy Types

Martin Van Buren

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WARNING: VERY LONG POST

The Book of the Week is “Martin Van Buren, America’s First Politician” by James M. Bradley, published in 2024.

In this hodgepodge of a volume, the author recounted many of the historical events to which Van Buren was witness in his lifetime. Throughout, the reader can see the evolution of American politics, and how some bad situations have become reversed, and others have stayed the same or gotten worse.

Van Buren was born in December 1782 in Kinderhook, New York State, now a part of Columbia county, a couple of hours’ drive north of New York City. For most of his teenage years, he was apprenticed to an attorney. His preliminary training was spent in a version of “night court” in a tavern– the courthouse of his generation.

Republicans were the “bleeding heart liberals” of the 1800’s, while the Federalists were the free-market capitalists who believed the country should be governed by a centralized authority. Van Buren began his political career as a Republican. Nevertheless, he accumulated great wealth while practicing law. There were wealthy politicians who bought the votes of the lawmakers to make themselves richer. He became one of them through the decades. Back in the day, there were no campaign finance laws, so no one was required to disclose any information on campaign donations.

Van Buren was elected New York State senator, and began his first term in November 1812. The governor of New York State appointed him to be that state’s attorney general in early 1815. Politics were fickle, so his job security was poor. At the same time, he was allowed to finish his term as senator before starting the attorney general job. By December 1821, the Republicans were the only political party in the United States.

In the last half of the 1820’s, Congress frequently succeeded in opposing president John Quincy Adams’ initiatives. For months, senator Van Buren and his cronies fought against one initiative Adams managed to push through: funding for a diplomatic trip to Panama, to make nice with various countries in South America. Adams and his vice president Henry Clay (of the Whig party he founded in the mid-1830’s) had wasted resources on this project that ended up a bust anyway, because a few of the key diplomats passed away. Meanwhile, Van Buren had been building a bipartisan coalition to oppose his political enemies on hot-button issues such as race and slavery.

In the early 1800’s, ninety percent of federal revenue came from tariffs, as a federal income tax wouldn’t be levied until 1913. Various parties were hurt or helped by those tariffs. New York City’s business stakeholders, as did the southern states of Virginia, North Carolina, South Carolina and Alabama, mostly agricultural, were hurt. Commercial entities located around the Erie Canal, and states in New England began to favor tariffs as they built new factories. At the dawn of the 1830’s, the federal government was able to purchase its own Treasury bills and pay off its debt entirely.

At the same time, President Andrew Jackson, claiming it was an anti-corruption measure, imposed a policy of mandatory turnover of federal office holders every four years. Only about ten percent of the workforce was affected, but drawbacks included: disruption of corporate culture and loss of institutional memory in the workplace, so that new hires had to re-invent the wheel, and the replacement-workers would likely be inexperienced. Jackson later named his party the Democrats.

In 1836, Van Buren ran for president as a Democrat. He was the only candidate on the ballot at the Convention in Baltimore. Separate states were allowed to push various Whig-party candidates, and they did, so they all became spoilers of one another.

Then then-philosophy had been to leave the economy alone, and not grant bailouts. President Jackson’s Democrats blamed the banks on hard times. But after the president himself enacted banking legislation, that wouldn’t fly. A financial crisis hit the fan in 1837. Van Buren’s presidency was the first in which ordinary Americans blamed the bad economy on the federal government.

President Van Buren proposed an Independent Treasury– a federal entity that would simply be a conduit for collecting federal revenue and paying bills. It should be unconnected to commercial and savings banks, which were proft-seeking and had to answer to shareholders. It should not be subjected to political meddling.

Nonetheless, the politicians were greedy hypocrites all, of both parties. Ordinary Americans of course, were brainwashed by propaganda, and didn’t know the half of it. The legislation for the Independent Treasury was finally passed in June 1840.

By the late 1830’s, America’s government consisted of a two-party system. The party that was out of power trashed the one in power. But, presidential candidates didn’t travel around campaigning. They promoted themselves by writing letters that got published in various newspapers (which were partisan). Whig candidate William Henry Harrison broke tradition by traveling around the country, smearing Democrat Van Buren.

Read the book to learn much, much, much more about Van Buren’s life and times.

Trotsky in New York 1917

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The Book of the Week is “Trotsky in New York 1917, A Radical on the Eve of Revolution” by Kenneth D. Ackerman, published in 2016. This volume had a misleading title, in that it described not only Trotsky’s activities, but those of his contemporaries and their times. There were backstories and flashbacks– insulting the intelligence of a reader who desired to read the book from cover to cover, rather than use it as a reference book. It repeated itself as history does; “When war [WWI] hysteria hit, people began to look for scapegoats, traitors, and spies. And the first accused of disloyalty were always the same: immigrants and socialists.”

Anyway, in January 1917, the man latterly known as Leon Trotsky, his second wife and their two sons arrived in New York City by boat. He and his wife confidently lied to immigration officials who had visited them personally in their cabin. They were able to bypass the Ellis Island third-degree inquisition because they were first-class passengers. The Spanish government paid the extra cost of upgrading them from second class because it was so eager to exile them.

Trotsky worked in the East Village office of Novy Mir (“New World”), a Russian socialist newspaper with a circulation of eight thousand. He had numerous intellectual and political friends in high places. Trotsky was a spellbinding speaker and prolific writer on socialist ideology. He doubted the elitist president Woodrow Wilson could help make peace in Europe because America was capitalist and ruled by its moneyed class. That class wanted to maintain the status quo of the gravy train of great profits derived from weapons contractors. Trotsky thought similiarly of the American Socialist Party leader– Morris Hillquit, who, as a lawyer, charged big bucks to represent labor and radical political activists and wasn’t opposed to using violence to get candidates elected.

In March 1917, after the tsar in Russia was deposed, Trotsky was on the move again, as he was a member of the Russian revolutionary organization. He and his family acquired proper identity papers and booked passage on a boat back to Russia. However, he was detained in a prison west of Halifax by Canadian authorities (ultimately ruled by Britain) for fear his native Russia would ally with Germany to defeat the French and British. He prepared several telegrams to inform various parties of what was happening with him; one of which was actually sent. This spawned letters, demonstrations, telegrams and newspaper articles in America, Canada, Britain and Russia that put pressure on officials to allow him to return to Russia.

By late 1917, Trotsky and the gang were well on their way to forming a dictatorship in Russia– breaking their previous campaign promises. Via violence, they eliminated free speech and all political activity except their own. Trotsky made the excuse that such measures were necessary to head off a French-Revolution-style peasant-uprising. However, in order to stay in power as the top leader, Vladimir Lenin scaled back the brutality by instituting the New Economic Policy. Because the common people were starving, he actually allowed them to engage in capitalist initiatives in agriculture. Of course there was corruption. Hilarity did NOT ensue.

As is well known, hilarity is associated with the American sitcom, a bygone era. Trotsky’s scene was more like a modern-day reality show– whose viewers vicariously release their rage along with the overpaid noisemakers on the idiot box. Here are the sentiments of some other Americans.

TRIPE

sung to the tune of “Escape” with apologies to Rupert Holmes and whomever else the rights may concern.

I’m tired of the president.
He’s been in office too long.
He’s a worn out recording of a boatload of wrongs.
So while he’s hiding and golfing, he’s trying to clear his head.
And his personal consultants, keep the media fed.

I don’t like this queen’s drama.
He’s GOT mush for brains.
All the negative emotions, and the race to defame.
I don’t like his fluff night AFTER night, the views, and the hype.
It’s not fluff I voted for.
I TUNE out the tripe.

I don’t think about the president.
He’s always so mean.
He and his media slaves,
require a staged and scripted routine.
It should be in all the papers– his mind is going bad.
GOP doesn’t want to SHOW it. GOP is power-mad.

I don’t like this queen’s drama.
He’s GOT mush for brains.
I don’t like the xenophobia, the greed campaign.
I hope Vance steps up soon,
and cuts through all this red tape, via the 25th Amendment,
and changes the leadership landscape.

The prez can’t TALK off the cuff.
He’s in an embarrassing place.
It’s another Reagan instance.
Billionaire boys set the pace.

Vance MUST be less shady.
He’s a Millennial coup.
You can laugh for a moment.
But he’s dangerous, too.

I don’t like this queen’s drama.
He’s GOT mush for brains.
All the negative emotions, and the race to defame.
I don’t like his fluff night AFTER night, the views, and the hype.
It’s not fluff I voted for.
I TUNE out the tripe.

I don’t like this queen’s drama.
He’s GOT mush for brains.
I’m into sane healthcare, NOT the greed campaign.
I don’t like his fluff night AFTER night, the views, and the hype.
It’s not fluff I voted for.
I TUNE out the tripe.

I don’t like this queen’s drama.
He’s GOT mush for brains…

==================

Anyway, read the book to learn much more about Trotsky’s life and political career.

We Were the Future

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The Book of the Week is “We Were the Future, A Memoir of the Kibbutz” by Yael Neeman, published in 2016. Readers might argue that the author and her cohorts were raised in a cult– brainwashed from birth. The kibbutz movement strove for 100% socialism– the economic system in which all the people (not the State) collectively owned everything; and collectively governed themselves.

In 1947, the total population of kibbutzim as a proportion of Israel’s (Jewish) population reached a high of 7%. It waned after Israel achieved sovereignty in 1948. The first half of the 1950’s saw global historical events (the trials of: Prague [1952], the Doctors in the U.S.S.R. and the Rosenbergs in the U.S. [both 1953]) that were jarring to Jews. The kibbutz movement split over ideological disagreements, especially after Stalin died in 1953 and his crimes were revealed in 1956. Adults around the author held zero discussions about this recent history.

Neeman was born in 1960 in Kibbutz Yehiam (founded in 1946) in Western Galilee near the border with Lebanon. Her kibbutz was a branch of Hashomer Hatzair (meaning “Young Guard”), the movement’s umbrella organization that began in 1913. Their motto was, “For Zionism, Socialism and Brotherhood Amongst Nations.” Her children’s group consisted of eight boys and eight girls, who did everything together, every day. She was raised among them by women who collectively took care of the kibbutz’s children grouped by age; she visited with her biological parents, but didn’t live with them in the same building.

The lifestyle encompassed a number of major ideas:

  • “Family and education in the rest of the industrial world were considered bourgeois institutions.”
  • “Everyone knew after all, that work [on the kibbutz] was more important than school, more important than anything.”
  • Egalitarianism for all the people was key– all decisions were made by committee.

Contradictorily:

  • There was a hierarchical division of labor– upper and lower. The former consisted of high-level positions in the fields and factories; held by the founders of the kibbutz, the (mostly Hungarian) First of May group. The latter consisted of low-skilled, dead-end jobs such as peeling potatoes.
  • The kibbutz undertook a number of enterprises through the years, including a banana “plantation” which was the most “profitable.” [these words with nuanced meanings were translated from Hebrew, but even so, these were capitalist endeavors.]

Kids whose behavior was troublesome were exiled from the kibbutz, and sent to a “special institution.” At twelve years old, all the conforming kids began to attend what amounted to boarding school, located off the kibbutz campus. They had previously received an eclectic education of hands-on instruction on a myriad of topics. Beginning in adolescence, they were allowed to shape their own education, or lack thereof.

Currently, analogous experiments are underway in American education in which adolescents are placed in front of computer screens with no teachers. Educrats and profiteers expect the software to teach them. At that age, most kids have neither the judgment nor the discipline to acquire the knowledge and skills required for becoming mature, responsible adults who can financially support themselves.

Kibbutzniks were afforded too much freedom and not enough guidance and supervision within their tiny, limited community in their early childhood. So they had a rude awakening when they were permitted (on rare occasions) to see how other kids in the rest of the world lived.

One other interesting factoid: Neeman wrote, “In our biological home, we [she and her three siblings] were already allowed to smoke on Purim when we were in the first grade.”

Read the book to learn about a boatload of other ways Neeman’s upbringing was extremely unconventional due to her fledgling homeland’s exceptionalism.

Cuba on the Verge

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The Book of the Week is “Cuba on the Verge, 12 Writers on Continuity and Change in Havana and Across the Country” edited by Leila Guerriero, published in 2017.

After Cuban leader Fidel Castro died in November 2016, there was a slight relaxation of economic restraints on the common people. Under the one-party rule of Castro’s brother Raul, Cubans could engage in entrepreneurial pursuits– serving tourists through renting out their homes or turning their cars into taxis, supervised by the government. Americans have begun doing the same in the last two decades, but through centralized corporate entities such as Airbnb and Uber.

Ironically, under Fidel’s leadership, Cuba developed a reputation for literacy and affordable, quality healthcare; during which time, America developed a reputation for deleterious (greedy!) practices in education and healthcare.

At the book’s writing, Cuba required working mothers to take paid maternity leave halfway through their eighth month; the paid leave continued for four and a half months after the births. An additional year was optional, for which mothers received sixty percent of their wages. Further, abortions were not only legal, but used as a form of contraception, with neither shame nor emotional hysteria generated by political activists, attached. On the other hand, the Cuban government spies on its people 24/7.

Cuban children are taught sex education beginning in the fifth grade. So kids are sexually precocious, as they learn from their older siblings. They are casual about relationships, so there are no hard feelings when families become fragmented, but there are many latchkey children, and males dominate.

After the Soviet Union broke up, Moscow’s government no longer funded Cuba’s economy. Beginning in the 1990’s, this “Special Period” saw severe shortages of basic consumer goods such as health and beauty aids and clothing, not to mention food. Unsurprisingly, domestic violence spiked.

People sold their jewelry at government trading posts in order to survive. They received mostly Panamanian goods in return. They adopted casual dress all the time– flip-flops, shorts, T-shirts– even where formal clothing had been worn previously, such as the theater. Counterfeit big-name goods flooded the market, sourced mostly from Miami, Panama, Madrid and China.

Yet another cultural change included males’ taking on of domestic chores and child-rearing, as more women could earn money through prostituting themselves. Socially-skilled men collected and sold coconuts from private properties, or sought out sexual relationships with visiting of out-of-town women who paid their everyday expenses.

Read the book to learn of the numerous other ways Cuba changed in the 1990’s, and ways it hasn’t– such as in its practices of numerology and witchcraft and in its love of baseball.

The Six Days of Yad-Mordechai – BONUS POST

The Bonus Book of the Week is “The Six Days of Yad-Mordechai” by M. Larkin, originally published in 1965.

Passionate, mostly Polish Holocaust survivors who were able to make their way to the Gaza Strip in Palestine in late 1943 worked tirelessly to establish a new kibbutz called Yad-Mordechai. The socialistic ideal of their farm collective was this: “Since economic dependence upon the father was what gave him power, such dependence was abolished in their society.”

Still, the community fell short of total gender equality, as the males did the hard manual labor on the infrastructure; an all-male militia except for one female fought against attacking Egyptians, and females did all the food preparation and childcare.

In November 1947, a majority of United Nations (UN) members voted in favor of partitioning Palestine between an Arab state and a Jewish state. The situation was to become official in mid-May 1948, when the British were to withdraw its officials from Palestine. Arab countries broadcast propaganda that gave their fellow tribesmen the impression they were only temporarily evacuating their homes by that same deadline, and would eventually conquer the Jews and return to take over the entire strip of land that was slightly larger than the state of New Jersey.

The Yad Mordechai kibbutz just happened to be located in the Arab state. The Arabs refused to recognize the UN vote, and decided to fight the Jews for the entire territory. The villains of WWII– ex-Nazis and Italian Fascists, plus Lebanese, Egyptians, Syrians and Trans-Jordanians fought on behalf of the Arabs. The Jews had poorly equipped militias and intelligence cells called the Hagana, Palmach, Irgun and the Stern group.

Nevertheless, as of this writing, Wikipedia says this kibbutz still exists today, and its population is 737. It might be recalled that pure socialism thrived for a short time when the State of Israel was born. That was an extremely special exception, for the following major reasons; the kibbutzniks:

  • were forced to work together in order to survive in the desert, geographically surrounded by enemies;
  • were like-minded– oppressed for their religion– seeking a safe place in the world;
  • had a common goal bigger than themselves– building a country for themselves from the ground up– creating the political, social and cultural systems and infrastructure when everything was simple and their population was low;
  • had in common the shared, traumatic experience of WWII and/or the Holocaust; and
  • had substantial financial and military help from the United States.

Lo and behold, Yad Mordechai has since turned to capitalism to survive, selling certain brands of foods. However, the dangers of capitalism become apparent when financial scandals and crashes plague the nation due to EXCESSIVE DEREGULATION.

As is well known, there was consolidation through the 1980’s and 1990’s of the corporate auditing industry, and “Big Six” became the “Big Four” eventually, prompting businesses across the country to become even more incestuous (corrupt) in their relationships with their auditors.

In 1994, the big-name auditor Ernst & Young fired their in-house legal department and hired outside legal counsel. They must have been hiring employees from the competition, who brought a certain corporate culture to their legal department. In 2002, the Enron / Arthur Andersen scandal broke.

Certain wise folks can see a scandal coming. Like Ernst & Young. They don’t know exactly when it will hit the fan, but they know they don’t want to be there when it happens. James Baker of the Reagan administration was one of those sharp individuals. He switched positions with Donald Regan so that he would be far away when the Iran-Contra scandal became publicized.

In 2019, BB&T, a government bond broker, merged with Sun Trust Banks. Excessive deregulation can do wonders for the bottom lines (when they go hog-wild) of any profit-making organizations in the short term. BUT– it seems as though as the decades pass, financial-industry-players gain more and more experience in preventing lawsuits brought against them from their customers and clients by:

having the latter sign legal documents they never had to sign before, and placing disclaimers galore on all of their communications. The latest disturbing trend is for (previously low-risk) government-bond(!) brokers to do this.

Anyway, read the book to learn of the spirited beginnings, independence-warfare death toll and traumas suffered by the Yad Mordechai kibbutzniks, and their eventual fate. [And stay tuned for more traumas in the government bond market.]