A U.S. history of abandoning allies?

I wrote this post originally when Islamic State was still ascendant in Iraq.   The U.S. and allies have defeated  ISIS for now, but the post is still interesting.  Here it is:

Most of us agree we should stand by our friends, and that we should keep our promises. However, the U.S. has a decidedly mixed record in doing this. I will look at that record, but the reason to really think about it are recent events:

Lets start by looking at our record in picking friends, and standing by them.

In an article “What Really Happened at the Bay of Pigs” Humberto Fontova tells this story:

“They fought like tigers,” writes the CIA officer who helped train the Cubans who splashed ashore at the Bay of Pigs 53 years ago this week. “But their fight was doomed before the first man hit the beach.”

Grayston Lynch
Grayston Lynch

That CIA man,Grayston Lynch, knew something about fighting – and about long odds. He carried scars from Omaha Beach, The Battle of the Bulge and Korea’s Heartbreak Ridge. ..Lynch trained, in his own words, “brave boys who had never before fired a shot in anger” — college students, farmers, doctors, common laborers, whites, blacks, mulattoes. They were known as La Brigada 2506, an almost precise cross-section of Cuban society of the time. The Brigada included men from every social strata and race in Cuba—from sugar cane planters to sugar cane cutters, from aristocrats to their chauffeurs. But mostly, the folks in between, as befit a nation with a larger middle class than most of Europe.

Short on battle experience, yes, but they fairly burst with what Bonaparte and George Patton valued most in a soldier: morale. No navel-gazing about “why they hate us” or the merits of “regime change” for them. They’d seen Castroism point-blank.

…[They knew of the Mass graves that] dotted the Cuban countryside, piled with hundreds who’d crumpled in front of Castro and Che Guevara’s firing squads….

“Where are the planes?” kept crackling over U.S. Navy radios two days later. “Where is our ammo? Send planes or we can’t last!” Commander Jose San Roman kept pleading to the very fleet that escorted his men to the beachhead. Crazed by hunger and thirst, his men had been shooting and reloading without sleep for three days. Many were hallucinating. By then many suspected they’d been abandoned by the Knights of Camelot.

…”If things get rough,” the heartsick CIA man Grayston Lynch radioed back, “we can come in and evacuate you.”

“We will NOT be evacuated!” San Roman roared back to his friend Lynch. “We came here to fight! We don’t want evacuation! We want more ammo! We want PLANES! This ends here!”

Adm. Burke [pleaded with John F Kennedy] “Mr. President, TWO planes from the Essex! (the U.S. Carrier just offshore from the beachhead)” that’s all those Cuban boys need, Mr. President. Let me order…!”

JFK was in white tails and a bow tie that evening, having just emerged from an elegant social gathering. “Burke,” he replied. “We can’t get involved in this.”

“WE put those Cuban boys there, Mr. President!” The fighting admiral exploded. “By God, we ARE involved!”

Admiral Burke’s pleas also proved futile.

The freedom-fighters’ spent ammo inevitably forced a retreat. Castro’s jets and Sea Furies were roaming overhead at will and tens of thousands of his Soviet-led and armed troops and armor were closing in. The Castro planes now concentrated on strafing the helpless, ammo-less freedom-fighters.

“Can’t continue,” Lynch’s radio crackled – it was San Roman again. “Have nothing left to fight with …out of ammo…Russian tanks in view….destroying my equipment.”

“Tears flooded my eyes,” wrote Grayston Lynch. “For the first time in my 37 years I was ashamed of my country.”

So what is the lesson from Fontova’s account? I think it is that if you encourage people to fight, and say you will back them, you have to do just that. You can’t have a strategy of deniability – that you are not behind their efforts. You have to do what it takes.

Then there was the Vietnam debacle. It was certainly a terrible and long war, and we lost 58,000 soldiers in it. We also put a general, Westmoreland, in charge of the war, a man who believed in a strategy of attrition and body-counts, which was not the way to fight guerrillas. In addition, for quite a while, we did not arm the South Vietnamese, except with cast-off World-War II equipment, because we were going to do the job ourselves. So the South Vietnamese did badly in their confrontations with the enemy, and their morale deteriorated. (We never learn, because a few years earlier in the Korean war we did not arm the South Koreans, for fear they would attack the Communist North, and so when the North attacked, they were overwhelmed)

When we finally pulled out of Vietnam, we made promises to the South Vietnamese. Those promises were not kept, because the Democrats in Congress cut off funding.

Historians have directly attributed the fall of Saigon in 1975 to the cessation of American aid. Without the necessary funds, South Vietnam found it logistically and financially impossible to defeat the North Vietnamese army. Moreover, the withdrawal of aid encouraged North Vietnam to begin an effective military offensive against South Vietnam… Historian Lewis Fanning went so far as to say that “it was not the Hanoi communists who won the war, but rather the American Congress that lost it.”

The NVA began its final assault in March of 1975 in the Central Highlands. Ban Me Thout, a strategically important hamlet, quickly fell to North Vietnam. On March 13, a panicked Thieu called for the retreat of his troops, surrendering Pleiku and Kontum to the NVA. Thieu angrily blamed the US for his decision, saying, “If [the U.S.] grant full aid we will hold the whole country, but if they only give half of it, we will only hold half of the country.” His decision to retreat increased internal opposition toward him and spurred a chaotic mass exodus of civilians and soldiers that clogged the dilapidated roads to the coast. So many refugees died along the way that the migration along Highway 7B was alternatively described by journalists as the “convoy of tears” and the “convoy of death.” 6On April 21, President Thieu resigned in a bitter televised speech in which he strongly denounced the United States.

So what is the lesson here? If you do get involved in a war, then make sure you get feedback, not just from an inept General in charge, but from the few officers who are succeeding in the field. And don’t shortchange the allies who eventually will be left with the burden of defending themselves. And don’t defund those allies.

But wait a minute. What about the Iraq war?  Didn’t we arm the Iraqi army to the hilt? And didn’t we spend a huge amount of money over there? Didn’t we sacrifice for many years, losing limbs, as Glenn Beck says, and worse?

That raises the following issue. In Iraq, former president George W Bush says in his book “Decision Points”, Maliki told him that his Shiite constituents didn’t want any Americans there. So the friendship of our allies was problematic to begin with. And later events showed that the Sunnis did not want to fight for a Shiite dominated government that had already accused two Sunni politicians of treason.

But let’s continue with another example of American ambiguity to an ally:

In 1973, Israel almost ceased to exist. It was attacked by Egypt from the south, and Syria from the north. The U.S. Secretary of State, Henry Kissinger, tried to withhold arms from – Israel! It was President Nixon, a man who ranted anti-Jewish epithets, who countermanded this. In delaying the arms supply to Israel, Kissinger now says he wanted to signal to Egypt and Syria that the U.S. was not interested in humiliating the Arabs. He wrote in “Years of Upheaval”, he had thought Israel would get out a little bloodied, but still win the war. But…

In view of the losses Israel was taking on October 6 and for the first week of the fighting, Israel was losing the war. Had this happened, the entire population of Israel would have been slaughtered Nazi style by the Arab haters. In face of these developments, Kissinger, himself a refugee from Nazi Germany, refused to supply Israel with the ammunition and weapons needed to defend themselves. It was only when the then Prime Minister of Israel, Golda Meir, appealed directly to President Nixon and also threatened to use the atomic bomb that Israel was given the needed tanks, guns and ammunition to turn certain defeat into victory. In fact, General Ariel Sharon and his troops crossed the Suez Canal and came within 50 miles of Cairo when Kissinger threatened to cut off all aid to Israel unless they retreated back to the Suez. Israeli troops had surrounded 50,000 Egyptian troops and utterly defeated both the Egyptian and Syrian armies….

Although Kissinger held up arms shipments to Israel, he told the Israelis that the then Secretary of Defense, Schlesinger, was responsible for the delays. He also told Moshe Dayan, Israel’s Minister of Defense, that the Soviets were about to attack Israel with nuclear weapons. This was not true, but led the Israelis to agree to Kissinger’s demands.

So what can we learn from this? Here one man in the State Department lied several times to an ally, and tried to weaken that ally. You cannot play such games with allies who are faced with the prospect of total annihilation.

In the same region of the world, we gave really bad advice to the leader of Iran, according to an article by James Perloff.

We know that Iran is now a radical Islamist state, with government meetings often starting with the chant “Death to America.”

However, suppose a progressive, pro-Western regime ruled Iran, representing no threat? ….. Yet many forget that, until 30 years ago, exactly such a regime led Iran, until it was toppled with the help of the same U.S. foreign policy establishment recently beating war drums.

From 1941 until 1979, Iran was ruled by a constitutional monarchy under Mohammad Reza Pahlavi, Iran’s Shah (king).

Although Iran, also called Persia, was the world’s oldest empire, dating back 2,500 years, by 1900 it was floundering. Bandits dominated the land; literacy was one percent; and women, under archaic Islamic dictates, had no rights.

The Shah changed all this. Primarily by using oil-generated wealth, he modernized the nation. He built rural roads, postal services, libraries, and electrical installations.

Long regarded as a U.S. ally, the Shah was pro-Western and anti-communist, and he was aware that he posed the main barrier to Soviet ambitions in the Middle East. A voice for stability within the Middle East itself, he favored peace with Israel and supplied the beleaguered state with oil.

On the home front, the Shah protected minorities and permitted non-Muslims to practice their faiths.

Houchang Nahavandi, one of the Shah’s ministers and closest advisers, reveals in his book The Last Shah of Iran: “We now know that the idea of deposing the Shah was broached continually, from the mid-seventies on, in the National Security Council in Washington, by Henry Kissinger, whom the Shah thought of as a firm friend.”…

Suddenly, the Shah noted, the U.S. media found him “a despot, an oppressor, a tyrant.” Kennedy denounced him for running “one of the most violent regimes in the history of mankind.”

At the center of the “human rights” complaints was the Shah’s security force, SAVAK. Comparable in its mission to America’s FBI, SAVAK was engaged in a deadly struggle against terrorism, most of which was fueled by the bordering USSR, which linked to Iran’s internal communist party, the Tudeh. SAVAK, which had only 4,000 employees in 1978, saved many lives by averting several bombing attempts. Its prisons were open for Red Cross inspections….

For Western TV cameras, protestors in Teheran carried empty coffins, or coffins seized from genuine funerals, proclaiming these were “victims of SAVAK.” This deception — later admitted by the revolutionaries — was necessary because they had no actual martyrs to parade. Another tactic: demonstrators splashed themselves with mercurochrome, claiming SAVAK had bloodied them……

Meanwhile, internationalist forces rallied around a new figure they had chosen to lead Iran: Ruhollah Khomeini. A minor cleric of Indian extraction, Khomeini had denounced the Shah’s reforms during the 1960s — especially women’s rights and land reform for Muslim clerics, many of whom were large landholders….

The Carter administration’s continuous demand upon the Shah: liberalize. On October 26, 1978, he freed 1,500 prisoners, but increased rioting followed. The Shah commented that “the more I liberalized, the worse the situation in Iran became. Every initiative I took was seen as proof of my own weakness and that of my government.” Revolutionaries equated liberalization with appeasement. “My greatest mistake,” the Shah recalled, “was in listening to the Americans on matters concerning the internal affairs of my kingdom.”

… “Air Force General Robert Huyser, deputy commander of U.S. forces in Europe, was sent to pressure Iran’s generals into giving in without a fight.” “Huyser directly threatened the military with a break in diplomatic relations and a cutoff of arms if they moved to support their monarch.”

…U.S. officials pressed the Shah to leave Iran. He reflected:

You cannot imagine the pressure the Americans were putting on me, and in the end it became an order…. How could I stay when the Americans had sent a general, Huyser, to force me out? How could I stand alone against Henry Precht [the State Department Director for Iran] and the entire State Department?

He finally accepted exile..

When the Islamists took charge, at least 1,200 Imperial Army officers, who had been instructed by General Huyser not to resist the revolution, were put to death. Before dying, many exclaimed, “God save the King!” “On February 17,” reported du Berrier, “General Huyser faced the first photos of the murdered leaders whose hands he had tied and read the descriptions of their mutilations.”

What is the lesson of this? If you see an allied leader as an obstacle to Democracy, and a person who is alienating people you want to court, take a look at the opposition first. Are they humane? Are they believers in freedom? Is your allied leader being portrayed to you accurately? Does he trust you? Does he support the West? Should you really throw him under the bus?

Back to Iraq:

Philip Dermer served in Iraq, and says this:

A former colleague with whom I served in the coalition forces in Iraq recently sent me one of the slick YouTube productions by the Islamic State of Iraq and Syria, or ISIS, now rampaging through the country. I was extremely reluctant to watch the video by this al Qaeda spin-off. I was already depressed about the chaos in Iraq, given how much effort my colleagues and I spent with Iraqis after 2003 attempting to forge the great democratic experiment in the Middle East.

As the video of jubilant ISIS members extolling their bloody conquests slipped by, I began to fast forward to get through the madness, but I froze when I saw ISIS thugs attacking captured Iraqis. Many of the men being taunted, tortured and killed were leaders of the Sahwa, the Sunni militants who once fought against the American military and the Iraqi government before they realized that their bigger enemy was al Qaeda and joined us in the fight. U.S. forces, grateful for their support, dubbed them Sons of Iraq…..

[After the victory on the battlefield ] the coalition’s payment program for the Sahwa necessitated gathering personal identification data on every member, close to 100,000 names; continuing the payments was going to be under the obligation of the Iraqi government after the coalition turned over governing authority to Baghdad. I remember when we delivered the database to Prime Minister Maliki’s office. The rest is history. He never attempted to fulfill his part of the bargain. Instead, the Sahwa were dismembered piecemeal, including extrajudicial killings, internment and expulsion from Iraq. After U.S. forces withdrew from Iraq in 2011, U.S. diplomats sat idly by behind concrete walls.

…. America’s promises and moral commitments must stand for something. If not, we may pay an even greater price as events unfold. No one will believe anything we say and will act strictly in their own interests. The Sahwa from 2007-09 is no more. And, yes, the Sunni are now doing what it takes for their own political interests, so things have come full circle because ISIS is the new al Qaeda—the vanguard.

It could be added, that if you don’t identify your true allies, and stand behind them, you lose the people who could stand up to your enemy. Israel is guilty in that regard too. As in this last story:

In southern Lebanon, which borders on Israel, Lebanese Christians were exposed to the Palestinians’ gangster-like presence. Consequently, these Christians turned to Israel for help. This transformed what were Israel’s incursions into southern Lebanon in response to PLO insurgency warfare into an enduring alliance of interests with southern Lebanese residents.

In 1975, as part of Israel’s security policy against the Palestinians, a young IDF intelligence officer named Ya’ir Ravid organized a militia force that was first called the Free Lebanese Army, then renamed the South Lebanon Army (SLA) in 1984. Over time, the SLA added Druze and Shi‘ite elements to the Maronite Christians who constituted its ideological pillar….

This Israeli-Lebanese alliance began to unravel in the Israeli public mind. The loss of approximately twenty to thirty soldiers per year in south Lebanese warfare was the backdrop to a popular campaign for withdrawal.. As a result, during the Israeli election campaign in mid-1999, Ehud Barak promised that as prime minister he would “bring the boys home from Lebanon.” The IDF was not winning the war and Hizbullah, the primary adversary, demonstrated that it had the religious conviction and tactical capabilities to continue its adamant resistance against Israel.

The new prime minister’s pledge, which enjoyed much popularity among the Israeli public, seized the south Lebanese in general and members of the SLA in particular with uncertainty and insecurity, if not panic. Israeli political leaders, military commanders, and other officials never stated clearly what the future might hold for the SLA. The result within the ranks of the SLA and the south generally was demoralization and trepidation that they might be abandoned at the last moment.

…For Israeli and SLA personnel, officers and soldiers alike, the events of late May unfolded without prior preparation, notice, or warning.

A soldier named Roni, with six years experience in the SLA, related that on “Monday night at eleven o’clock we got a call from the Israelis telling us that Hizbullah is approaching and telling us to leave.” Another soldier said, “We could have stopped them with our weapons,” but the IDF did not shoot and would not allow the SLA to shoot either….

Thus did the decision for an IDF withdrawal cause the SLA to disintegrate and create havoc among its forces. Southerners feared being massacred immediately by Hizbullah or being tried and tortured as “enemies of the state” by the Beirut authorities…

In effect, the Israeli government abandoned an SLA that very much wanted to stay in existence. This clearly was not what the SLA desired. Over 600 of its men had lost their lives in the many years of warfare but its fighters showed no inclination to leave their country….

Two meetings that I attended with senior Israeli officials prior to the withdrawal confirmed the government’s ambiguous intentions toward the SLA. From Reserve General Menachem Einan, appointed by Barak to conduct peace negotiations with the Lebanese government, I learned in March that there was no Israeli inclination to strengthen the SLA as the sole and credible military alternative to the IDF in south Lebanon.

Nevertheless, many SLA fighters later felt that their army had been strong enough to sustain the war. After the SLA had been exiled to Israel, therefore, the sad refrain was repeated: “Israel betrayed us. The IDF and SLA were one… and we thought it was possible to befriend Israel. We helped them in our land. For twenty-five years we were with her.” The nephew of ‘Aql Hashim, himself an SLA soldier, commented on the connection with Israeli soldiers in Lebanon: “We ate with you together, we fought with you together, we went to funerals with you together. We were your allies…”

Expressions of general Israeli concern and responsibility for her allies in the end served as an elusive formulation that culminated in betrayal.

These are harsh words, but again, it illustrates some of the points that came up with American behavior in other situations.  Now Hezbollah has enough missiles to carpet Israel from corner to the other, and their leader, Nasrallah, has said that the good thing about Israel is that the world’s Jews will gather there, so they can all be destroyed at once.

Standing by your ally, if the ally really is an ally, is good policy. Unfortunately, we have fallen short in that regard. Kissinger, of all people, said this “To be an enemy of America can be dangerous, but to be a friend is fatal”.

Lets hope he was wrong.

Sources:

(a note on the following sources, none of them are “primary sources” though some do quote primary sources.  I found them by remembering some historical events, and then searching for them on the internet.  I try to leave out speculation (for instance, the Perloff article is full of speculation that I disagree with).  Not being a historian, I cannot really evaluate the sources too well.  I use what rings true, based on what I already know.)

The story told by Humberto Fontova is at: http://townhall.com/columnists/humbertofontova/2014/04/19/what-really-happed-at-the-bay-of-pigs-n1826030/page/full

The Vietnam story is told by Lauren Zanolli at: http://hnn.us/article/31400

The story of Henry Kissinger & Israel is told by Dr. Gerhard Falk at http://www.jbuff.com/c081210.htm

Philip Dermer tells the story of the fate of the “Sons of Iraq” at: http://online.wsj.com/articles/philip-dermer-the-sons-of-iraq-abandoned-by-their-american-allies-1404253303

James Perloff tells the story of how we treated the Shah of Iran at http://www.thenewamerican.com/culture/history/item/4690-iran-and-the-shah-what-really-happened .

Whose fault was the financial crash of 2008?

In 2008, there was a financial collapse in the United States. It happened under a Republican President, George W. Bush, and naturally, he attempts to explain in a book that he later wrote about his presidency titled “Decision Points”. I’ll give you some quotes here, and then some commentary.

George W. explains:

“‘Wall Street got drunk, and we got the hangover.”
That was an admittedly simplistic way of describing the origins of the greatest financial panic since the Great Depression. A more sophisticated explanation dates back to the boom of the 1990s. While the U.S. economy grew at an annual rate of 3.8 percent, developing Asian countries such as China, India, and South Korea averaged almost twice that. Many of these economies stockpiled large cash reserves. So did energy-producing nations, which benefited from a tenfold rise in oil prices between 1993 and 2008. Ben Bernanke called this phenomenon a “global saving glut.” others deemed it a giant pool of money.
A great deal of this foreign capital flowed back to the United States. America was viewed as an attractive place to invest, thanks to our strong capital markets, reliable legal system, and productive workforce. investors bought large numbers of U.S. Treasury bonds, which drove down their yield. Naturally, investors started looking for higher returns. One prospect was the booming U.S. housing market. Between and 2007, the average American home price roughly doubled. Builders constructed homes at a rapid pace. Interest rates were low. Credit was easy. Lenders wrote mortgages for almost anyone—including “sub-prime” borrowers, whose low credit scores made them a higher risk.
Wall Street spotted an opportunity. Investment banks large numbers of mortgages from lenders, sliced them up, repackaged them, and converted them into complex financial securities. Credit rating agencies, which received lucrative fees from investment banks blessed many of these assets with AAA ratings. Financial firms sold numbers of credit default swaps, bets on whether the mortgages underlying the securities would default. Trading under fancy names such as collateralized debt obligations, the new mortgage-based products yielded the returns investors were seeking. Wall Street sold them aggressively
Fannie Mae and Freddie Mac, private companies with congressional charters and lax regulation, fueled the market for mortgage-backed securities. The two government-sponsored enterprises bought up half the mortgages in the United States, securitized many of the loans, and sold them around the world. Investors bought voraciously because they believed Fannie and Freddie paper carried a U.S. government guarantee.
It wasn’t just overseas investors who were attracted by higher returns. American banks borrowed large sums of money against their capital, a practice known as leverage, and loaded up on the mortgage-backed securities. Some of the most aggressive investors were giant new financial service companies. Many had taken advantage of the 1999 repeal of the Glass-Steagall Act of 1932, which prohibited commercial banks from engaging in the investment business.
At the height of the housing boom, homeownership hit an all-time high of almost 70 percent. I had supported policies to expand homeownership, including down-payment assistance for low-income and first-time buyers. I was pleased to see the ownership society grow. But the exuberance of the moment masked the underlying risk. Together, the global pool of cash, easy monetary policy, booming housing market, insatiable appetite for mortgage-backed assets, complexity of Wall Street financial engineering, and leverage of financial institutions created a house of cards. This precarious structure was fated to collapse as soon as the underlying card—the nonstop growth of housing prices—was pulled out. That was clear in retrospect. But very few saw it at the time, including me.

Personally, I think the fact that if lenders to homeowners had not been able to shift the risk to others, there would not have been a house of cards that eventually collapsed. However, the ability to sell the loans (with the promised repayments) in bundles to investors – investors who trusted the AAA ratings that these bundles often got, meant that the lender didn’t really have to care whether the loan was repaid. The three companies who gave ratings had a conflict of interest.

The question arises as to why the credit (interest rates) was so low. We know one reason was the fear of the head of the Fed (Ben Bernanke) of the danger of deflation.
But lets avoid detours, and go back to Bush, and then note the ironies here.

In mid-2007, home values had declined for the first time in thirteen years. Homeowners defaulted on their mortgages in increasing numbers, and financial companies wrote down billions of dollars in mortgage related assets…
Early in the afternoon of Thursday, March 13, we learned that Bear Stearns, one of America’s largest investment banks, was facing a liquidity crisis. Like other Wall Street institutions, Bear was heavily leveraged. For every dollar it held in capital, the firm had borrowed thirty-three dollars to invest, much of it in mortgage-backed securities. When the housing bubble popped, Bear was overexposed, and investors moved their accounts. Unlike the run on First National Bank in Midland, there were no paper sacks.
I was surprised by the sudden crisis. My focus had been kitchen-table economic issues like jobs and inflation. I assumed any major credit troubles would have been flagged by the regulators or rating agencies. After all, I had strengthened financial regulation by signing the Sarbanes Oxley Act in response to the Enron accounting fraud and other corporate scandals. Nevertheless, Bear Stearns’s poor investment decisions left it on the brink of collapse. In this case, the problem was not a lack of regulation by government; it was a lack of judgment by Bear executives.
My first instinct was not to save Bear. In a free market economy, firms that fail should go out of business. If the government stepped in, we would create a problem known as moral hazard: Other firms would assume they would be bailed out, too, which would embolden them to take more risks.
Hank shared my strong inclination against government intervention. But he explained that a collapse of Bear Stearns would have widespread repercussions for a world financial system that had been under great stress since the housing crisis began in 2007. Bear had financial relationships with hundreds of other banks, investors, and governments. If the firm suddenly failed, confidence in other financial institutions would diminish. Bear could be the first domino in a series of failing firms. While I was concerned about creating moral hazard, I worried more about a financial collapse.
“Is there a buyer for Bear?” I asked Hank.
Early the next morning, we received our answer. Executives at JP Morgan Chase were interested in acquiring Bear Stearns, but were concerned about inheriting Bear’s portfolio of risky mortgage-backed securities. With Ben’s approval, Hank and Tim Geithner, the president of the New York Fed, devised a plan to address JPMorgan’s concerns. The Fed would lend $30 billion against Bear’s undesirable mortgage holdings…
Many in Washington denounced the move as a bailout. It probably didn’t feel that way to the Bear employees who lost their jobs or the shareholders who saw their stock drop 97 percent in less than two weeks. Our objective was not to reward the bad decisions of Bear Stearns. It was to safeguard the American people from a severe economic hit. For five months, it looked like we had.

“Do they know it’s coming, Hank?”
“Mr. President,” he replied, “we’re going to move quickly and take them by surprise. The first sound they’ll hear is their heads hitting the floor.”
It was the first week of September 2008, and Hank Paulson had just laid out a plan to place Fannie Mae and Freddie Mac, the two giant government sponsored enterprises, into government conservatorship.
Of all the emergency actions the government had to take in 2008, none was more frustrating than the rescue of Fannie and Freddie. The problems at the two GSEs had been visible for years. Fannie and Freddie had expanded beyond their mission of promoting homeownership. They had behaved like a hedge fund that raised huge amounts of money and took significant risks. In my first budget, I warned that Fannie and Freddie had grown so big that they presented “a potential problem” that could “cause strong repercussions in financial markets.”
In 2003, I proposed a bill that would strengthen the GSEs’ regulation. But it was blocked by their well-connected friends in Washington. Many Fannie and Freddie executives were former government officials. had close ties in Congress, especially to influential Democrats like Congressman Barney Frank of Massachusetts and Senator Chris Dodd of Connecticut. “Fannie Mae and Freddie Mac are not facing any kind of financial crisis,” Barney Frank said at the time.

Barney Frank and Chris Dodd

I should point out here that the main law that was passed after the disaster was the “Dodd-Frank” law – oddly enough, two people that Bush mentions as being culpable were then put in charge of writing a law to prevent the future collapse.

G.W continues:

By the summer of 2008, I had publicly called for GSE reform seventeen times. It turned out the eighteenth was the charm. All it took was the prospect of a global financial meltdown. In July, Congress passed a reform bill granting a key element of what we had first proposed five years earlier: a strong regulator for the GSEs. The bill also gave the treasury secretary temporary authority to inject equity into Fannie and Freddie if their solvency came into question.
Shortly after the legislation passed, the new regulatory agency, led by friend and businessman Jim Lockhart, took a fresh look at Fannie’s and Freddie’s books. With help from the Treasury Department, the examiners concluded the GSEs had nowhere near enough capital. In early August, both Freddie and Fannie announced huge quarterly losses.
The implications were startling. From small-town banks to major international investors like China and Russia, virtually everyone who owned GSE paper assumed it was backed by the U.S. government. If the GSEs defaulted, a global domino effect would follow and the credibility of our country would be shaken.
With Hank’s strong advice, I decided that the only way to prevent a disaster was to take Fannie and Freddie into government conservatorship. It was up to Hank and Jim to persuade the boards of Fannie and Freddie to swallow this medicine. I was skeptical that they could do so without provoking a raft of lawsuits. But on Sunday, September 7, Hank called me at the White House to tell me it had been done. The Asian markets rallied Sunday night, and the Dow Jones increased 289 points on Monday.

I spent the next weekend, September 13 and 14, managing the government’s response to Hurricane Ike…
That same weekend, a different kind of storm was battering New York City. Like many institutions on Wall Street, Lehman Brothers was heavily leveraged and highly exposed to the faltering housing market. On September 10 the firm had announced its worst-ever financial loss, $3-9 billion in a single quarter. Confidence in Lehman vanished. Short-sellers, traders seeking to profit from declining stock prices, had helped drive Lehman stock from $16.20 to $3.65 per share. There was no way the firm could survive the weekend….this time, we weren’t going to be able to stop the domino from toppling over.
… time had run out for Lehman. Ihe 158-year-old investment house filed for bankruptcy just after midnight on Monday, September 15.
All hell broke loose in the morning. Legislators praised our decision not to intervene. The Washington Post editorialized, “The U.S. government was right to let Lehman tank.” The stock market was not so positive. The Dow Jones plunged more than five hundred points.
A panic mentality set in. Investors started selling off securities and buying Treasury bills and gold. Clients pulled their accounts from investment banks. The credit markets tightened as lenders held on to their cash. gears of the financial system, which depend on liquidity to serve as the grease, were grinding to a halt.

I’ve often reflected on whether we could have seen the financial crisis coming. In some respects, we did. We recognized the danger posed by Fannie and Freddie, and we repeatedly called on Congress to authorize stronger oversight and limit the size of their portfolios. We also understood the need for a new approach to regulation. In early 2008, Hank proposed a blueprint for a modernized regulatory structure that strengthened oversight of the financial sector and gave the government greater authority to wind down failing firms. Yet my administration and the regulators underestimated the extent of the risks taken by Wall Street. The ratings agencies created a false sense of security by blessing shaky assets. Financial firms built up too much leverage and hid some exposure with off-balance sheet accounting. Many new products were so complex that even their creators didn’t fully understand them. For all these reasons, we were blindsided by a financial crisis that had been more than a decade in the making.

There is more, but this a blog, not a book. I will however put in some cutting remarks from Thomas Sowell, and from a discussion I started on Quora:

Here is Sowell, who mainly blames, not the Republicans, but the Democrats:

Fact Number One: It was liberal Democrats, led by Senator Christopher Dodd and Congressman Barney Frank, who for years — including the present year — denied that Fannie Mae and Freddie Mac were taking big risks that could lead to a financial crisis.
It was Senator Dodd, Congressman Frank and other liberal Democrats who for years refused requests from the Bush administration to set up an agency to regulate Fannie Mae and Freddie Mac.
It was liberal Democrats, again led by Dodd and Frank, who for years pushed for Fannie Mae and Freddie Mac to go even further in promoting subprime mortgage loans, which are at the heart of today’s financial crisis.
Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush’s Secretary of the Treasury, five years ago.
Yet, today, what are we hearing? That it was the Bush administration “right-wing ideology” of “de-regulation” that set the stage for the financial crisis. Do facts matter?
We also hear that it is the free market that is to blame. But the facts show that it was the government that pressured financial institutions in general to lend to subprime borrowers, with such things as the Community Reinvestment Act and, later, threats of legal action by then Attorney General Janet Reno if the feds did not like the statistics on who was getting loans and who wasn’t.
Is that the free market? Or do facts not matter?
Then there is the question of being against the “greed” of CEOs and for “the people.” Franklin Raines made $90 million while he was head of Fannie Mae and mismanaging that institution into crisis.
Who in Congress defended Franklin Raines? Liberal Democrats, including Maxine Waters and the Congressional Black Caucus, at least one of whom referred to the “lynching” of Raines, as if it was racist to hold him to the same standard as white CEOs.

We have an irony here. Supposed Compassion for people who, due to poverty have to rent instead of buy a house, helped lead to the very uncompassionate results of the crash of 2008. Another lesson is that lowering interest rates to encourage people to borrow and invest is not always a good idea.

From the Quora conversation I started, one person replied:

… the myth started to grow that home and real estate prices will never collapse. When a bubble starts to inflate because of an expansion of the supply of money and credit, which is what the Fed was doing with its 1% interest rate, people lose their objectivity. Manias naturally result, and people began to think that any investment in real estate and housing was safe. This made investors willing to take on risks which looked safe because of all this Moral Hazard created by expansionary monetary policy.
Mortgage lenders were being required to take on more risk, and were thus eager to divest themselves of riskier mortgages. Because housing prices were rising, and just kept going up, more people were willing to invest in taking on that risk, which they perceived to be minimal.

Another respondent says this:


The cause of the failure is a bit more complex than just “bad loans” but bad loans were important to the failure. If I am offered a simple bond, I can look at the bond and determine if it is likely to be repaid. Would I buy a bond offered by GE today? Maybe not. Would I buy a bond offered by Wal-Mart? Yeah, probably. Those are pretty easy to sort out. Would I buy a bond backed by portions of 200,000 different mortgages when I can’t know who is liable for those mortgages? Sheesh, how could I ever figure that one out? How would I analyze that?
Standard & Poor to the rescue. For a fee, they will do all the heavy lifting of analyzing that security and give it a rating. Even better, you don’t have to pay the fee! It’s paid by the guy who is offering to sell you the security. Why did he choose S&P? Because S&P always came back with a good rating of the security. You were assured that it was a good investment by S&P. S&P was incentivized to give all these securities (that are truly incapable of being evaluated) a good rating and so they did. The whole system was rigged to cheat you and it worked. Of course, there are other rating agencies doing exactly the same thing as S&P. If not, there would have been no incentive to give good ratings. My anger is not at the people bundling the mortgages. It is at the rating companies who inflated all the ratings for their own profit. There should have been a law that would have jailed every one of them.

Another respondent weighs in:


HUD, which Congress had made the regulator of Fannie Mae and Freddie Mac in 1992, began to pressure these agencies to set numerical goals for affordable housing, even if that meant buying subprime mortgages. The media cheered the agencies on.”
Banks suddenly found that regulators had the power to refuse their branch expansions or reject a merger if they weren’t making enough loans to otherwise unqualified minority borrowers. So they played along. They made the loans, and Freddie and Fannie bought the loans right back. It was like a game of musical chairs, and the Fed kept the game going in the early 2000s by cutting interest rates.
Every time Republicans in Congress or President Bush talked about reforming housing programs, Democrats like Rep. Barney Frank of Massachusetts and Sen. Chris Dodd of Connecticut threw fits, threatening to gum up Congress and implying that GOP lawmakers were racists. The Republicans backed off.

This opinion also is worth quoting:

Few people expected defaults on the scale that actually ended up occurring, and financial wizardry was employed to create CDOs squared, taking tranches of existing CDOs, and treating them as if they were mortgages to create new CDOs, so there was a whole pyramid ready to collapse when it was discovered to be built on quicksand. Institutions like pension funds and insurance companies had to invest in high-rated bonds, whether the ratings bore any relation to reality or not, and they sometimes didn’t; there were only three rating agencies, and if they were all wrong together, someone with a fiduciary duty to buy high-rated bonds had to do so, even if he might be of the personal opinion that it would be more prudent to buy gold coins and hide them under his mattress.

Now having written all this, I am still confused. I made a causal diagram with nodes and arrows, and questions and gaps arise. Why did people believe the real estate market could only go up, and not down? If one cause was the government threatening banks until the banks made bad loans, why did commercial real estate also suffer from the speculative bubble? Where were the signals that the market is supposed to give as to when to buy and when not to buy? Why did a few people see the crisis coming, but most people did not? Why could bad ideas such as “Option adjustable mortgages” get put into practice, when they didn’t require payments at least cover interest charges, which meant that the total principal could grow over time, and then the borrower could just walk away and abandon his house?

I think we can conclude that something that was often valueless (loans to people that were made without any requirement for credit-worthiness) was made to look as if had value. Perhaps in a very general sense, we should heed Milton Freedman’s observation: “Unless it is politically profitable for the wrong people to do the right thing, the right people will not do the right thing either, or it they try, they will shortly be out of office.” He speaks of politics, but in economics too, we have to keep an eagle’s eye out on counterproductive incentives and lack of transparency and market signals that get buried.

Sources:

Decision Points – by George W Bush

The Financial Crisis: Facing the Facts – Thomas Sowell (https://www.creators.com/read/thomas-sowell/10/08/do-facts-matter)

https://http://www.quora.com/The-financial-crisis-of-2008-was-caused-by-lenders-passing-the-risks-of-their-bad-loans-to-others-How-did-they-convince-those-others-Why-did-Canada-avoid-this-trap

https://www.conservapedia.com/Financial_Crisis_of_2008

How we lost the Vietnam war at the last minute – Former President Gerald Ford explains:

The U.S. defeat in the Vietnam war did not happen when the American troops pulled out. The South Vietnamese army held for two years, but congress refused to fund them any more, contrary to promises that had been made to South Vietnam. I once said as much in a forum, and a person who was probably a former soldier replied that when we left, we made sure the South Vietnamese army was well supplied, and the defeat was really due to a badly executed retreat by the South, which was complicated by large number of fleeing refugees.

Recently, I found out, from reading part of former President Gerald Ford’s memoirs, that we were both right. This is what Ford says:

Meanwhile, other foreign policy crises were demanding more and more of my time. Foremost among them was the stepped-up war in South Vietnam and Cambodia. From the beginning of our involvement in the area, I had always thought that we were doing the right thing. Our policy was a natural outgrowth of decisions we had made at the end of World War II. In the immediate postwar period, the U.S. mounted a foreign aid program to help rebuild the shattered economies of countries all over the world. We helped scores of nations—allies, potential allies and even potential adversaries—and those aid programs formed an integral part of America’s foreign policy and national defense strategy. The basic thrust behind them was the desire to eliminate, or at least contain, Communist aggression around the globe.
In the late 1940s and early 1950s, our aid programs in Vietnam were not too different from the programs we maintained elsewhere, with the exception of the fact that the French were still a major factor there. Then Dienbienphu fell to the Communists; the French withdrew and the U.S. role began to change. Slowly we became the military backup for one of the two contending factions in the country. Even by the late 1950s, we were only providing the Saigon regime with military and economic aid plus the services of several hundred advisers. We were not committed fully to the nation’s defense. Yet. A decisive change in our level of commitment came, of course, in April 1962, when JFK sent 15,000 military advisers to help the South Vietnamese in their struggle against the Viet Minh, later called the Viet Cong. From that point on, escalation followed escalation, and at one point in the mid 1960s we discovered that we had committed 550,000 Americans to save our beleaguered ally.
In retrospect, legitimate questions can be raised about our involvement in the war. Had our civilian and military leaders made a sufficient analysis of the conditions there? Had they stopped to consider that our world commitments might already be too great, and did they have a clear idea of what their military objectives were? The answer to these questions is probably no. The question can also be asked: Could we have won the war? There, I think, the answer is yes, although I’m not as sure of that today as I was in the late 1960s when, as House Minority Leader, I called upon LBJ to stop pulling our best punches in Vietnam. At that time, I felt certain—given four basic assumptions—that we would prevail:
The first assumption was that we would use our military power fully and appropriately.
The second was that the South Vietnamese forces would build to a level sufficient for them to defend themselves.
The third was that the people of South Vietnam would support the war effort, and the final assumption was the continuing support of the U.S. Congress.
To varying degrees, none of these assumptions proved out.
The war dragged on and on, and the damage it caused this country both domestically and internationally was truly staggering. Our greatest loss, of course, was the 57,000 American dead and the more than 100,000 who suffered serious injuries. Next came the loss of U.S. prestige around the world. The conflict created deep divisions among the American people and discredited our military. Lastly, LBJ’s decision to provide both guns (the war cost us $150 billion) and butter without a tax increase had resulted in a terrible disruption of our economy. It would take America a long time to recover from these wounds.
In January 1973, the U.S. finally negotiated a settlement that made it possible for us to remove our combat forces and bring home our prisoners of war. If necessary, we agreed at the time, the U.S. would back up the terms of the Paris peace accords, and we would continue to provide adequate military and economic assistance to South Vietnam. The North Vietnamese, however, never considered the Paris peace accords as the end of the conflict. They had an estimated 160,000 troops in South Vietnam at the time, and they violated the agreement flagrantly by sending an additional 300,000 men into the south. They also sent in massive amounts of modern equipment and launched offensive military operations.
In the face of this situation, the U.S. failed to respond. Watergate had so weakened the President that he was not about to take a major military action, such as renewed bombings. Moreover, by November, Congress had succeeded in passing the War Powers Act of 1973,which severely limited his ability to enforce the peace agreement. North Vietnam could violate the accords with impunity. Next, Congress reduced our economic and military assistance to the Saigon regime. Finally, Congress signaled an increasing desire to cut off all support. Unsure of any more help, President Nguyen Van Thieu ordered a quick withdrawal to more defensible positions. This maneuver, decided upon without consulting us, was executed poorly and hampered by floods of refugees. Predictably, panic ensued, making the situation worse.
In January 1975, the North Vietnamese gained control of the first province they had won in fifteen years of war. Toward the end of March, they captured thirteen additional provinces, encountering little resistance. The South Vietnamese were running short of ammunition and supplies. They thought they were being abandoned, not only by the U.S. but also by the leadership in Saigon. Trapped, they tried to get out any way they could.

Rather than give comprehensive quotes on the failure to supply aid, I’ll select one of Ford’s remarks here:

Ford asked for aid and gave this speech to congress:

The situation in South Vietnam and Cambodia has reached a critical phase requiring immediate and positive decisions by this government. The options before us are few, and the time is very short.
Members of the Congress, my fellow Americans, this moment of tragedy for Indochina is a time of trial for us. It is a time for national resolve.
It has been said that the United States is overextended, that we have too many commitments too far from home, that we must examine what our truly vital interests are and shape our strategy to conform to them, I find no fault with this as a theory, but . . . we cannot, in the meantime, abandon our friends while our adversaries support and encourage theirs, We cannot dismantle our defenses, our diplomacy or our intelligence capability while others increase and strengthen theirs. Let us put an end to self-inflicted wounds. Let us remember that our national unity is a most priceless asset. Let us deny our adversaries the satisfaction of using Vietnam to pit Americans against Americans. At this moment the United States must present to the world a united front.

Unfortunately, Ford’s pleas did not work.

Sources:
A Time To Heal – Gerald Ford (1979)

The anti-fossil fuel movement in the decades before the popular fear of Global Warming began

When we are told that ideally we should get rid of all fossil fuels, to avoid global warming and a resulting global catastrophe, it helps to look at prior warnings that we should replace our energy sources. A book written in 1984 by my parents: titled The Coercive Utopians – Social Deception by America’s Power Players describes the mindset of at least some of those who pushed for this idea in the recent past.

The book shows that multiple agendas can converge on a seemingly straightforward scientific question, and I think a corrollary is to be suspicious of socialists who act like born-again converts to environmentalism.

But lets go to the book:

Earth Day 1970, NY

Ecological panic struck the United States in 1970. The earth, up to then, a comfortable, taken-for-granted dwelling place, suddenly seemed in imminent danger of becoming uninhabitable. And just as millennial sects provide a date for the world’s end, so the enthusiasts of the ecological crisis offered a limited time span—unless radical steps were taken immediately—for the continuance of life. “We are already 5 years into the biosphere self-destruct era” read a sign in the Berkeley office of Ecology Action, one of the two hundred environmental groups that mushroomed in the San Francisco area alone during the panic. “The generations now on earth may be the last” read the cover of The Dying Generations, a book of readings published in 1971.

Earth Day

Public emotion reached its peak on April 22 with Earth Day, in which millions of Americans took part. Congress closed down as its members fanned out to make speeches on the environment to their constituents…reporters estimated that a hundred thousand people poured into Union Square…Mayor John Lindsay addressed the throng [saying that] the environmental issue could be summed up simply: “Do we want to live or die?” Other parts of the country produced more imaginative demonstrations. In Bloomington, Indiana, coeds dressed as witches pelted participants in the Earth Day rally with birth control pills.

The authors of the book consider the new left as made up of utopians. In this case, there were both environmental and political utopians.

Both groups wanted minimal production of energy. The political activists wanted to minimize energy production as a means to overturn the existing political and economic order, which they saw as incapable of continuing without abundant energy. Environmentalists..foresaw increased pressure for development of American resources, especially coal, offshore oil and hydroelectric, all of which, in their view, would have far-reaching undesirable environmental impact.

[Both types of utopian] have been opposed to further development of all forms of power that are viable economically. The Natural Resources Defense Council has used its money, including almost five million dollars from the Ford Foundation alone, to hire 20 lawyers who have brought suit against projects involving most kinds of power development: nuclear, coal, oil and hydroelectric. Similarly the Sierra Club’s energy platform not only opposes nuclear plants but asserts that strip mining of coal should be prohibited. (This would eliminate more than half our supply of coal.) The platform calls for moratorium on offshore oil drilling programs, opposes geothermal operations except under restrictive conditions, and opposes the “sacrifice for water power of any . . . high quality scenic resource area.” The same pattern of opposition to all forms of energy development characterizes the suits of the Environmental Defense Fund, which is frank in stating in its 1973 report to members that the foremost priority of its energy program is “to slow the rate of growth in demand for energy thus reducing the need for environmentally destructive generating and transmitting facilities.” The entire environmental movement has opposed synfuels, which are described with typical relations flair as “sinful.”
The environmental movement is of course associated with advocacy of “renewable” energy, above all solar power. But when the Department of Energy and NASA proposed developing a $2.5 trillion system of solar collection satellites to beam microwave energy from the sun to collectors on earth, environmental groups promptly banded together in Coalition against Satellite Power Systems. Since the complaint of
these groups is constantly that the government is not investing enough in solar energy, the cost was not what upset them. Rather, in the words of one of the groups, Ralph Nader’s Critical Mass project, it was that yet another energy technology would be “centralized.”

Some political radicals, proposed the transformation of society into decentralized pre-industrial communities: the medieval manor without its lord. This required radically reduced quantities and new forms of energy, not involving centralized generation.

Environmentalists were receptive to the anti-Capitalist ideas of the political radicals.

To them, it seemed that economic growth required fostering unnecessary appetites in the consumer to obtain corporate profits. The unnecessary products filling unnecessary appetites exacerbated pollution. And so economic growth, traditionally highly valued in American society, was portrayed by some environmentalists literally as a disease. In The Environmental Conscience, editor Robert Disch assails “the cancer-like expansion of the GNP” and Environmental Ethics, produced by the Science Action Coalition, similarly decries “the cancer of modern material growth.” Barry Commoner, both a recognized environmental leader and a political radical, asserts that since “environmental pollution is a sign of major incompatibility between our system of production and the environmental system that supports it,” capitalism will have to go.

Perhaps the most mysterious aspect of the campaign for de-development of the United States is the respectful hearing it has won. That a sect subscribed to a belief system that calls for rolling back the Industrial Revolution would entail no surprise. We would expect to see the sect’s visions of the future and roadmap for its achievement detailed in the magazines and bulletins of small groups of the faithful. But the visions of the environmental utopians are published in quintessential establishment journals like Foreign Affairs, whose editor told a reporter that he was prouder of having published Amory Lovins’ essay than of any other article. They are given lengthy and respectful treatment in such opinion-setting journals as The New Yorker, and a avalanche of books detailing the sect’s analysis of our problems and solutions for them have poured from virtually every major publishing house. The spokesmen for eliminating complex technology are consulted by President Carter and have been respectfully attended by committees of Congress. A number of those subscribing to the solutions were put in charge of major government energy programs in the Carter administration.

Why solar power? For anti-nuclear activist Harvey Wasserman, solar energy should be “a revolutionary vehicle with which people can take charge of their own power supplies, leaving the world’s richest corporations out in the cold.”

An article in Ralph Nader’s Critical Mass objects to corporate investment in development of photovoltaic cells on the grounds that solar energy should be an opportunity “to redistribute social and economic power.”

Self-proclaimed ecological anarchist Murray Bookchin, a guru not only of the counter-cultural Mother Earth News, but of Friends of the Earth, has announced: “Neither sexism, ageism, racism, the ‘energy crisis,’ corporate power . . . bureaucratic manipulation, militarism, urban devastation or political centralism can be separated from the ecological issue.”

My parents conclude their book, most of which is on political radicalism of the 60’s and 70’s with this:

And while they cannot build Utopia, “dystopia,” the antithesis of Utopia, men have the power to create. Long time New York Times correspondent, Arthur Krock, quoted a Czechoslovak student who visited the United States during the 1960s. He observed that the Americans he met were “pampered children of your permissive society, throwing temper tantrums because father gave them only education, security and freedom—but not Utopia. The student, experienced in “dystopia,” declared: “You simply haven’t faced up to the fact that you can’t build a Utopia without terror, and that before long, terror is all that’s left.

Sources:
The Coercive Utopians – Rael Jean Isaac and Erich Isaac (Regnery Books – 1983)

The ethics of amplifying American Paranoia

There is a book on the effect of conspiracy-theories on history. It is called Political Paranoia. It has some good insights, including a chapter where talks about a movie made by director Oliver Stone, who treated truth as a relative value in speculating about John Kennedy’s assassination. Most of this post is straight quotes from the book, and I close with an obvious irony – the elephant in the room that Oliver Stone doesn’t see.

The authors say:

One of the most remarkable examples of conspiracy portrayed as entertainment is the film JFK, directed by Oliver Stone (Warner Brothers 1992)….
Films are not simply entertainment; they are also cultural, intellectual, and political influences. Research demonstrates the influence on beliefs, attitudes, emotions, and behavior of such films as the anti—nuclear war The Day After, the anti-Soviet Amerika, and the multigenerational saga of a black family, Roots… A survey and analysis of viewer reaction to JFK demonstrated that this film and others like it can produce ‘markedly altered emotional states, belief changes spread across specific political issues, and . . . an impact on politically relevant behavioral changes.’ [JFK viewers] reported emotional changes, [became] significantly more angry and less hopeful . . . Those who had seen the movie were significantly more likely to believe [the various conspiracies depicted in the film.]

Oliver Stone

JFK is not a historical film in the way that William Makepeace Thackeray’s Henry Esmond, Alexandre Dumas’ Three Musketeers, and Margaret Mitchell’s Gone with the Wind are historical novels. Stone does not take fictional characters and put them in a historical context, as the fictional Scarlett O’Hara and Rhett Butler are placed in Civil War Georgia. Stone takes genuine historical characters—New Orleans District Attorney James Garrison and civic activist Clay Shaw, for example—and presents his version of what happened. Films of this sort are called docudramas because they dramatize historical events and historical characters for the screen. A film like Gone with the Wind attempts to tell the viewer what sorts of things happened in a past historical period. In contrast, a docudrama like JFK attempts to convey a particular version of history; the film does not simply lay out the director’s version of history but also seeks to persuade the viewer that the director’s version is the truth.
Film as media presents opportunities and limitations that are absent in a written work. These strengths and restrictions were first demonstrated in D. W. Griffith’s seminal American film The Birth of a Nation (Epic 1915). This film, which set the “grammar and syntax” of cinema as narrative entertainment, carried a powerful racist message. It idealized the Old South, praised slavery, described Klansmen as heroic saviors of the white South from bestial blacks and their Northern white allies, and opposed racial “pollution.” Financially it was very successful. Politically it facilitated the revival of the Ku Klux Klan. Its racism was so simplistic and offensive that, even in an era tolerant of racism, it was banned in several cities and became the object of small riots. Griffith saw himself as the victim of the forces (blacks and their Northern sympathizers) that he “exposed” in the film.
From The Birth of a Nation’s release in 1915 to the appearance of JFK in 1992, American historical films developed a cinematic pattern with the following characteristics:
• The story is presented in a filmic style of seamless visual and aural pattern; the viewer seems to be looking directly at reality.
• The story has a strong moral message.
• The story is simple and definitive. Alternate versions are rarely suggested; if suggested, they are dismissed or mocked.
• The story is about individuals, usually heroic ones, fighting for good in the interest of humanity (that is, the audience).
• The story has a strong emotional tone.
JFK adds several other techniques. It seamlessly interweaves newsreel footage from the assassination with fictional material, so that the boundary between historical fact and the director’s or writer’s fictional elaborations are progressively blurred. It is crammed with information, presented in words and suggested in pictures. It contains not only many short speeches and several long orations but much dialogue. More important, it includes many scenes without dialogue, some seemingly only one or two seconds long, which impart or suggest information. Not one locus of conspiracy is suggested but eight: the CIA, weapons manufacturers, the Dallas police, the armed forces, the White House, the establishment press, renegade anti-Castro Cubans, and the Mafia. The persuasive value of such an onslaught is to leave the viewer, if not convinced, at least believing that “there has to be something to it.” One viewer said that she and her companion “walked out of the movie feeling like we had just undergone a powerful ‘paranoia induction.’
These facts, inventions, and insinuations do not necessarily come from the director’s private beliefs. They are driven by the commercial and narrative needs of the form. Popular art requires continuity and order—elements generally lacking in genuine events. The film depiction of events must grab the viewer’s attention, keep him fixed in his seat, cause him to identify with the action and principal characters, and induce him to tell his neighbors to buy a ticket for the next performance. The paranoid perspective advances these commercial and artistic ambitions:
• It too gives a simplified view of reality. Indeed, the paranoid worldview demands coherence, even when such consistency is lacking.
• It too takes a moral stand: us against them, good against evil, openness against conspiracy.
• It too presents the “truth” as simple in essence but highly complex in details.
• It too describes a struggle, not between abstract forces but between individuals and groups.
• It too brings powerful emotions to the narration.
Thus, the paranoid message is uniquely suited to the form of a historical film drama, or docudrama. This message is seen most powerfully in JFK but also in other paranoid films: Silkwood, Missing, and The Parallax View.
The paranoid theme complements another influence: deconstruction, a prominent feature of late-twentieth-century criticism and art. The most important part of the deconstructive position for our purposes is its contention that “texts” (novels, films, poems) have no meaning apart from how they are perceived. If the audience receives the “true” story, then the “facts” in the text are true. Truth is itself a shifting concept whereby the political interests of the creator and the audience (generally expressed in terms of race, gender, and economic position) define what is true. If what is presented persuades people that it is true and if this truth is “politically progressive,” then the events presented in the text are true.
The political commentator Ronald Steel identifies this dynamic in JFK: “Because of the director’s ability to cut, splice, fuse, restage, and invent, it is virtually impossible for a viewer of his film to tell if he is seeing a real or a phony event. Stone mixes real black-and-white footage, such as the Zapruder film of Kennedy’s murder, with restaged black-andwhite episodes that may or may not have happened. The result is a deconstructionist’s heaven. Every event becomes a pseudoevent, fictions become fact, imagination becomes reality, and the whole tangible world disappears.
Stone acknowledges that what he shows as happening need not ever have happened. Asked whether he has a responsibility to historical fact, Stone replied that the questioner was getting “into the area of censorship” and that it is “up to the artist himself to determine his own ethics by his own conscience.” In any event, Stone argues that he was creating a myth that “represents the inner spiritual meaning of an event.
Stone’s reference to myth as central to the film is an appropriate one. Myths are meta-explanations: they explain beyond what we can see or understand. A paranoid message can also have a great role in developing and enhancing a myth.
The life of John F. Kennedy has become an American myth, symbolizing youth, vigor, progress, and glamour. In fact, the historical Kennedy was quite different from the mythic Kennedy, but for the most part the public has set aside the facts in favor of the symbols. There are many reasons for the generation of this myth in the face of the facts. The Kennedy family (and Kennedy himself when he was alive) and their partisans fostered it; they presented Kennedy as associated with other mythic figures (Lincoln, Jefferson, Roosevelt), and they made use of mythic archetypes (New Frontier, Camelot). Most important, however, were the timing and circumstances of Kennedy’s death. Had Kennedy lived, he might be remembered as a successful or an unsuccessful president, but not as a legendary hero.

Lee Harvey Oswald

What is required in myth-creating circumstances is a destructive force proportional to the event. A nerdish left-wing sympathizer who manages to fire a couple of lucky shots from a cheap mail-order rifle is not a suitable instrument for the destruction of a mythic hero. [So there is a ] natural inclination to believe in a conspiracy. It completes the story and fulfills the audience’s desire for understanding. People cling to this belief with remarkable tenacity. For example, Gerald Posner, who wrote the well-reviewed anti-conspiracist Case Closed, was the object of threatening telephone calls and picketing by demonstrators carrying signs saying ‘ ‘Case Not Closed.” Some conspiracists even advocated a day of national resistance to the book.

The authors don’t like this type of film:

The social harm that the film commits goes beyond the distortion of history. It creates a broader intellectual pollution. Each paranoid film gives weight to a popular mentality of paranoid belief, If event after event is “shown to be” the product of a malign conspiracy, then the public will accept that that is how the world works.

On reading the above, an irony occurred to me. The assassin, Lee Harvey Oswald, was a hater of “decadent capitalism”, and had applied to be a Soviet Citizen. None of the conspiracies that Mr. Stone comes up with have to do with Lee’s ideology, even though President Kennedy had approved the failed invasion to topple Fidel Castro of Cuba. Jacqueline Kennedy didn’t seem too confused about who her husband’s killer was. “He didn’t even have the satisfaction of being killed for civil rights. It’s — it had to be some silly little Communist,” she said shortly after her husband’s death. Also telling is the fact that a spokesman for the Soviet Union rushed to lay blame on “Barry Goldwater and other extremists on the right.”
Even today, Russian propaganda fuels paranoid ideas in the USA and elsewhere. Now there’s a conspiracy!

Sources:
Political Paranoia” by Robert S. Robins and Dr. Jerrold Post M.D.
https://www.weeklystandard.com/mark-hemingway/the-kennedy-assassination-right-wing-blame-game

Paul Johnson’s paragraph on the Nazi Doctors

The following paragraph is from historian Paul Johnson’s book “Modern Times: The World from the Twenties to the Eighties.” Its a few words, but there are ironies – doctors whose job is murder and torture, presumably to rid the world of contamination, SS men who see themselves as superior but prove themselves as morally inferior, and horrible abuse of Jews, Poles, and Russians, the latter two people’s who had rocky relations with Jews. Here is the paragraph:

350 SS doctors (one in 300 of those practising in Germany) took part In experiments on camp inmates. Dr Sigmund Rascher, for instance, conducted low-temperature tests at Dachau, killing scores, and asked to be transferred to Auschwitz: ‘The camp itself is so extensive that less attention will be attracted to the work. For the subjects howl so when they freeze!’ Polish girls, termed ‘rabbits’, were infected with gas-gangrenous wounds for sulphonamides tests. There was mass sterilization of Russian slave labourers, using X-rays. Other projects included injection of hepatitis virus at Sachsenhausen, of inflammatory liquids into the uterus to sterilize at Ravensbruck, the all-women camp, phlegmon-induction experiments on Catholic priests at Dachau, injections of typhus vaccine at Buchenwald, and experimental bone-transplants and the forced drinking of seawater by gypsies. At Oranienburg selected Jews were gassed to provide specimens for Himmler’s skeleton collection of ‘Jewish-Bolshevik commissars who personify a repulsive yet characteristic sub-humanity’.

An American President who considered pacifists to be ‘poltroons’ and his passionate arguments:

There is an old book (published 1916) on my bookshelf titled “Fear God and Take Your Own Part” by Theodore Roosevelt. TR was no longer president when he wrote the book, but he was alarmed at the pacifist policies followed by President Woodrow Wilson while England and France were fighting in the first years of World War I. In a prior post, I write on how one of his sons, after himself fighting in World War I, spoke out strongly against any involvement in a European war. You can see why: the total number of military and civilian casualties in that war were about 40 million: estimates range from 15 to 19 million deaths and about 23 million wounded military personnel, ranking it among the deadliest conflicts in human history. The U.S. eventually did participate in World War I, and lost over 53,000 dead and missing. But this book was written by TR before America got into the war.


In the First World War Germany attempted to blockade the British and French coastlines from not only French and British ships, but also from neutral ships. As in the second World War, Germany used submarines to torpedo ships, including American ships. But it was in a British ship that more than a hundred American citizens lost their lives: RMS Lusitania was an ocean liner and briefly the world’s largest passenger ship. The ship was sunk on 7 May 1915 by a German U-boat 11 mi (18 km) off the southern coast of Ireland.
Two days after the Lusitania sank, TR made a speech, which is in an appendix of the book. Here are some paragraphs:

The day after the tragedy the newspapers reported in one column that in Queenstown there lay by the score the bodies of women and children, some of the dead women still clasping the bodies of the little children they held in their arms when death overwhelmed them. In another column they reported the glee expressed by the Berlin journals at this “great victory of German naval policy.”…

Blogger note: German Grand Admiral Alfred von Tirpitz stated it was sad that many Americans “in wanton recklessness, and in spite of the warnings of our Ambassador, had embarked in this armed cruiser, heavily laden with munitions” and had died, but that Germany had been within her rights to sink the ship.

TR then says:

In the teeth of these things, we earn as a nation measureless scorn and contempt if we follow the lead of those who exalt peace above righteousness, if we heed the voices of those feeble folk who bleat to high heaven that there is peace when there is no peace. For many months our government has preserved between right and wrong a neutrality which would have excited the emulous admiration of Pontius Pilate-the arch-typical neutral of all time.

In that speech TR did not call for war, but added:


I do not believe that the firm assertion of our rights means war, but, in any event, it is well to remember there are things worse than war.

In the book, in a chapter about defense, he argues for universal military service, writing that

The poltroon and the professional pacifist are out of place in a democracy. The man fit for self-government must be fit to fight for self-government. Universal service means preparedness not for war but primarily against war….

Today we have a volunteer army, but TR did not like the concept back then:


People speak in praise of volunteers. I also praise the volunteer who volunteers to fight. But I do not praise the volunteer who volunteers to have somebody else fight in his place…

As for budgetary constraints:


The question of expense is of wholly secondary importance in a matter which may as well be of life or death significance to the nation. Five years hence it may be altogether too late to spend any money! We will do well at this time to adopt, which a slight modification, the motto popular among our forefathers a century ago: Millions for defense but not a cent for either tribute or aggression.

TR was dismayed that despite the war raging in Europe, the U.S. had not invested in preparedness.

For eighteen months, with this world-cyclone before our eyes, we as a nation have sat supine without preparing in any shape or way. It is an actual fact that there has not been one soldier, one rifle, one gun, one boat, added to the American Army or Navy so far, because of anything that has occurred in this war…such national folly is almost inconceivable…

American opinion did eventually swing toward war, because of the Zimmermann Telegram, which was a secret diplomatic communication issued from the German Foreign Office in January 1917 that proposed a military alliance between Germany and Mexico. It proposed that in the event that the United States entered World War I against Germany, Mexico would recover Texas, Arizona and New Mexico. The telegram was intercepted and decoded by British intelligence. Revelation of the contents enraged Americans, especially after German Foreign Secretary Arthur Zimmermann publicly admitted the telegram was genuine.

Could the U.S. have stayed out anyway? Even at that time, there was a slogan of “America First”. (Woodrow Wilson’s campaign slogan was: “ He kept us out of War, America First.”) After the war was over, there was a period of seeming peace, until the Nazis rose to power in Germany and conquered Europe and were bombing Britain, and even then, the slogan “America First” resonated among many, including TR’s son, Teddy Jr.. Some people still argue today that we should have stayed out of the First World War.

TR was not only a believer in defending Americans lives, he was also a believer in rescuing other peoples. He writes in frustration about the German invasion of neutral Belgium and also the Turkish massacre of the Armenians that “…this government has not raised its hand to do anything to help the people who were wronged or to antagonize the oppressors.”

In the case of Germany, there was also American self-interest, from TR’s point of view, since American lives being lost in the Atlantic, and American munitions factories were being dynamited – the arson and destruction was blamed by TR on German propaganda. He backs up his blame with several examples including this:

The Austrian Ambassador, Dr. Dumba, wrote to the Austrian Minister of Foreign Affairs: “We can disorganize and hold up, if not entirely prevent, the manufacture of munitions in Bethlehem and the Middle West.” …Three months after this was written, the threat was made good as regards Bethlehem, and the Germania Herald in Milwaukee expressed joy over the deed, saying on November 12th: “We rejoice from the depths of our heart over the destruction of these murderous machines.”

But the issues are still relevant today – the power of the U.S. is limited, and we can ask in what cases are we defending ourselves by also rescuing others, and in what cases is a pre-emptive war necessary for self-defense, and so forth. Should Woodrow Wilson have made war on Turkey to rescue the Christian Armenians? Would the U.S. today, in 2019, be better off if we had?

One argument of TR’s that I find hard to disagree with is on preparedness. In 2019 the oceans on our borders would not be any defense against a sudden attack by a high-tech enemy supplied with nuclear weapons, intercontinental missiles, and futuristic weapons such as swarms of drones controlled by Artificial Intelligence. There would be no time to prepare. And yet our 20 trillion dollar deficit and our huge expenses for social-services make preparedness very hard to achieve. Perhaps this is a weakness of all Democracies that will be fatal to us one day..