March 22, 2017—David W. Chen writes wide-ranging stories that put New York City in a global economic context.
He interviewed me in 2008 during the fiscal meltdown and again this month in a story about university technology centers in New York City.
The new story appears in The New York Times online today and will be in the printed edition tomorrow, Thursday.
Wednesday, March 22, 2017
|George Grenville (1712-1770)|
The Act lasted only until the next year, but in the meantime it angered so many of the colonists that it started stiff opposition to the Crown that resulted in American independence.
The British Government at that time was led by two Georges, George III and George Grenville.
A previous Prime Minister, savvy William Pitt the Elder (alumnus of Trinity College, Oxford) had been popular in the colonies. Pitt had urged the King to relinquish his obsession with what was happening in the German duchies and had the vision to see the value of securing the North American continent by using British troops to defeat the French and Indians. The colonists were so grateful to Pitt they named Pittsburgh after him. That was where the last battle of the formidable Gen. Edward Braddock took place. Before his death, Braddock gave his general's sash to his second-in-command, Col. George Washington.
Although victorious against the French, the British Government ran up debts to send over their redcoats and faced having to borrow more to defend the vast new American territories won in the French and Indian War (known in Europe as the Seven Years’ War, 1756-1763).
The parliament of George Grenville therefore passed the Stamp Act as a revenue-raising attempt, following on the Sugar Act of 1764.
Grenville entered Parliament in 1741, one of the men interrelated by blood or marriage dubbed Cobham's Cubs who united in opposition to Sir Robert Walpole. Walpole was the first person to be considered by historians to have the primus inter pares status of Prime Minister and he held this power from 1721 to 1742 — a length of service not subsequently equalled. Walpole practiced a policy of benign neglect toward the American colonies, which had the advantage of not costing the Crown any money.
Grenville was a graduate of Eton and Christ Church, Oxford. His ministry 22 years after the end of Walpole lasted only two years (1763–65). It was disastrous. He never developed a close relationship with the king because George III continually consulted with Bute, who had recommended Grenville as his successor.
The Stamp Act levied a tax on all materials printed for commercial and legal use in the colonies, from newspapers and pamphlets to playing cards and dice. This was a common fundraising vehicle in England, but stirred up protest in the colonies, which had already been burdened with three new major taxes: the Sugar Act (1764), adding duties on imports of textiles, wines, coffee and sugar; the Currency Act (1764), which reduced the value of paper money used by colonists; and the Quartering Act (1765), which required colonists to provide room and board to British troops.
The Stamp Act raised the issue for the colonists of taxation without representation. They started to organize against the British government. By October of 1765, nine of the 13 colonies sent representatives to the Stamp Act Congress, where they drafted a “Declaration of Rights and Grievances.”
Grenville’s ministry ended in the year he pushed through the Stamp Act. Realizing that it would be more expensive to enforce the Act, Parliament abolished it in 1766. But it was too late. The damage had been done. Resistance to the Mother Country had started and did not stop until the Treaty of Paris was signed.
Most important of the organizing groups was the Sons of Liberty in Boston and other ports. In the south, wealthy landowners were the leaders. Societies continued to meet to address what they saw as the abusive policies of George III and the newly consolidated British empire.
Frederick North (1732-1792) was the son of the Earl of Guilford. Like Pitt, he was an alumnus of Trinity College, Oxford. He served in the Treasury from 1759 to 1766, when the government of George Grenville fell following the disaster of the Stamp Act (not to mention other stumbles). North became Chancellor of the Exchequer in the second ministry of Pitt the Elder, and then became Prime Minister during the years when the American colonies broke away.
Sources include (besides links) - http://www.ouramericanrevolution.org/index.cfm/people/view/pp0031 and Encyclopedia Britannica
Tuesday, March 21, 2017
|Sen. Carter Glass (D-Va.) and Rep. Henry Steagall (D-Ala.) co-sponsored|
a good law that traded deposit insurance for bank regulation.
It is lean and clear and it served the American people well for nearly seven decades.
It created the Federal Deposit Insurance Corporation (section 12B), which was much wanted by the banking community to reduce the threat of panics.
In exchange for deposit insurance, the law establishes multiple constraints on banks to protect the insured deposits from speculation. It separates commercial banking from insurance and investment banking.
It also creates the Federal Open Market Committee (12A), which becomes the main body for ongoing monetary policy for the Federal Reserve System.
The limits on deposit insurance were gradually raised until the FDIC decided that it was most efficient to take over failing banks, thereby essentially insuring all deposits.
Also, over time, the separation of commercial banks from investment banks and insurance companies was eroded. Investment bankers sought access to government-insured funds and banks—protected by the taxpayer from risk—saw no reason not to hunt for the highest yield. This led to the meltdown of 2008.
Monday, March 20, 2017
Treason in general is criminal disloyalty to one's country. Here is the U.S. definition of treason, and the penalty, from the Cornell Law School Legal Information Institute:
18 U.S. Code § 2381 - Treason
Sunday, March 19, 2017
The Opening at One Art Space, 23 Warren Street, is 6 to 9 pm on Saturday,
Artists I know who are exhibiting include: France Garrido, Laurie Lipton, Brigid Marlin, Olga Spiegel and Miguel Tio.
The show is open Tuesday through Saturday, 11:30 to 5 pm, until May 13.
The gallery, 23 Warren St., is just a half-block west of Broadway by City Hall Park. Chambers Street is a good stop to get off at on the subway.
Related post: Opening Night, April 29
Saturday, March 18, 2017
The Oxford blog has reached 200,000 page views.
Thank you for reading. Comment, please, or contact the blog owner directly at email@example.com.
Here are the top ten most-read Oxford posts since May 2013.
|WW2: Why Wasn't Oxford Bombed? (21K Views, Feb. 11... |
Jun 8, 2013, 3 comments
|OXFORD IN FICTION: Top Six Fictional Colleges (Upd... |
Jul 2, 2016
|HERALDRY: Oxford Stars (Updated Feb. 24, 2017) |
Nov 21, 2014, 2 comments
|BOAT RACE: Dinners 2015 |
Mar 1, 2015
|HERALDRY: Douglas, Moray, de Vere (Updated Sep. 16... |
Nov 23, 2014, 2 comments
|R.I.P.: Peter V. Darrow (1950-2013) |
May 20, 2013
|BRITISH PMs: Universities Attended (Updated Aug. 1... |
Jul 14, 2016
|THERESA MAY: Time at Oxford (Updated Oct. 29, 2016... |
Jul 27, 2016
|R.I.P.: July 11–Oxonian John Brademas, NYU Preside... |
Jul 25, 2016
|R.I.P.: Oxonian Geoffrey Hill, Poet |
Jul 2, 2016
Labels: Boat Race, Bomb, Colleges, Darrow, deVere, Dinners, Douglas, Fiction, Geoffrey Hill, Heraldry, John Brademas, Moray, NYU, Oxford, Poet, President, Prime Minister, Stars, Theresa May, WW2
Tuesday, March 14, 2017
Sunday, March 12, 2017
|Different messages: FDR and Trump.|
FDR's radio broadcasts were as revolutionary then as President Trump's Tweets are today. But their messages are very different.
FDR in his first Fireside Chat took on the banking system and promised to calm the markets and make them work for ordinary Americans. Obama in 2009 promised the same kind of policies, as incorporated in The Credit Cardholders Bill of Rights passed in early 2009 and the following year the Dodd-Frank Act, which addressed the worst abuses that had led to the meltdown of 2008.
President Trump is now seeking to roll back Dodd-Frank and is calling for more of the deregulation of financial markets that got the country in trouble in 1929-33 and in 2008-2009. In so doing Trump is pushing the opposite way from FDR.
In his Rendezvous-with-Destiny speech before the 1936 Democratic National Convention, Philadelphia, Pennsylvania, June 27, 1936, FDR described the job of government in reining in privileged financiers:
In 1776 we sought freedom from the tyranny of a political autocracy — from the eighteenth-century royalists who held special privileges from the crown. It was to perpetuate their privilege that they governed without the consent of the governed; that they denied the right of free assembly and free speech; that they restricted the worship of God; that they put the average man's property and the average man's life in pawn to the mercenaries of dynastic power; that they regimented the people.
And so it was to win freedom from the tyranny of political autocracy that the American Revolution was fought. That victory gave the business of governing into the hands of the average man, who won the right with his neighbors to make and order his own destiny through his own government. Political tyranny was wiped out at Philadelphia on July 4, 1776.
Since that struggle, however, man's inventive genius released new forces in our land which reordered the lives of our people. The age of machinery, of railroads; of steam and electricity; the telegraph and the radio; mass production, mass distribution — all of these combined to bring forward a new civilization and with it a new problem for those who sought to remain free.
For out of this modern civilization economic royalists carved new dynasties. New kingdoms were built upon concentration of control over material things. Through new uses of corporations, banks and securities, new machinery of industry and agriculture, of labor and capital — all undreamed of by the Fathers — the whole structure of modern life was impressed into this royal service.
There was no place among this royalty for our many thousands of small-businessmen and merchants who sought to make a worthy use of the American system of initiative and profit. They were no more free than the worker or the farmer. Even honest and progressive-minded men of wealth, aware of their obligation to their generation, could never know just where they fitted into this dynastic scheme of things.
It was natural and perhaps human that the privileged princes of these new economic dynasties, thirsting for power, reached out for control over government itself. They created a new despotism and wrapped it in the robes of legal sanction. In its service new mercenaries sought to regiment the people, their labor, and their property. And as a result the average man once more confronts the problem that faced the Minute Man.
The hours men and women worked, the wages they received, the conditions of their labor - these had passed beyond the control of the people, and were imposed by this new industrial dictatorship. The savings of the average family, the capital of the small-businessmen, the investments set aside for old age - other people's money — these were tools which the new economic royalty used to dig itself in.
Those who tilled the soil no longer reaped the rewards which were their right. The small measure of their gains was decreed by men in distant cities.
Throughout the nation, opportunity was limited by monopoly. Individual initiative was crushed in the cogs of a great machine. The field open for free business was more and more restricted. Private enterprise, indeed, became too private. It became privileged enterprise, not free enterprise.
An old English judge once said: "Necessitous men are not free men." Liberty requires opportunity to make a living — a living decent according to the standard of the time, a living which gives man not only enough to live by, but something to live for.
For too many of us the political equality we once had won was meaningless in the face of economic inequality. A small group had concentrated into their own hands an almost complete control over other people's property, other people's money, other people's labor - other people's lives. For too many of us life was no longer free; liberty no longer real; men could no longer follow the pursuit of happiness.
Against economic tyranny such as this, the American citizen could appeal only to the organized power of government. The collapse of 1929 showed up the despotism for what it was. The election of 1932 was the people's mandate to end it. Under that mandate it is being ended.
The royalists of the economic order have conceded that political freedom was the business of the government, but they have maintained that economic slavery was nobody's business. They granted that the government could protect the citizen in his right to vote, but they denied that the government could do anything to protect the citizen in his right to work and his right to live.
Today we stand committed to the proposition that freedom is no half-and-half affair. If the average citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the market place.
These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power. Our allegiance to American institutions requires the overthrow of this kind of power. In vain they seek to hide behind the flag and the Constitution. In their blindness they forget what the flag and the Constitution stand for. Now, as always, they stand for democracy, not tyranny; for freedom, not subjection; and against a dictatorship by mob rule and the over-privileged alike.
The brave and clear platform adopted by this convention, to which I heartily subscribe, sets forth that government in a modern civilization has certain inescapable obligations to its citizens, among which are protection of the family and the home, the establishment of a democracy of opportunity, and aid to those overtaken by disaster.
But the resolute enemy within our gates is ever ready to beat down our words unless in greater courage we will fight for them.
For more than three years we have fought for them. This convention, in every word and deed, has pledged that the fight will go on.
The defeats and victories of these years have given to us as a people a new understanding of our government and of ourselves. Never since the early days of the New England town meeting have the affairs of government been so widely discussed and so clearly appreciated. It has been brought home to us that the only effective guide for the safety of this most worldly of worlds, the greatest guide of all, is moral principle.
We do not see faith, hope, and charity as unattainable ideals, but we use them as stout supports of a nation fighting the fight for freedom in a modern civilization.
Faith — in the soundness of democracy in the midst of dictatorships.
Hope — renewed because we know so well the progress we have made.
Charity — in the true spirit of that grand old word. For charity literally translated from the original means love, the love that understands, that does not merely share the wealth of the giver, but in true sympathy and wisdom helps men to help themselves.
We seek not merely to make government a mechanical implement, but to give it the vibrant personal character that is the very embodiment of human charity.
We are poor indeed if this nation cannot afford to lift from every recess of American life the dread fear of the unemployed that they are not needed in the world. We cannot afford to accumulate a deficit in the books of human fortitude.
In the place of the palace of privilege we seek to build a temple out of faith and hope and charity.
It is a sobering thing, my friends, to be a servant of this great cause. We try in our daily work to remember that the cause belongs not to us, but to the people. The standard is not in the hands of you and me alone. It is carried by America. We seek daily to profit from experience, to learn to do better as our task proceeds.
Governments can err, presidents do make mistakes, but the immortal Dante tells us that Divine justice weighs the sins of the cold-blooded and the sins of the warm-hearted on different scales.
Better the occasional faults of a government that lives in a spirit of charity than the consistent omissions of a government frozen in the ice of its own indifference.
There is a mysterious cycle in human events. To some generations much is given. Of other generations much is expected. This generation of Americans has a rendezvous with destiny.
In this world of ours in other lands, there are some people, who, in times past, have lived and fought for freedom, and seem to have grown too weary to carry on the fight. They have sold their heritage of freedom for the illusion of a living. They have yielded their democracy.
I believe in my heart that only our success can stir their ancient hope. They begin to know that here in America we are waging a great and successful war. It is not alone a war against want and destitution and economic demoralization. It is more than that; it is a war for the survival of democracy. We are fighting to save a great and precious form of government for ourselves and for the world.
|FDR Delivering a "Fireside Chat"|
In their way, they were as revolutionary as President Trump's Tweets.
FDR had told his Republican Treasury Secretary, William H. Woodin, that he didn't want to be bothered with the details of actions to solve the bank panic because he was going to concentrate on communicating the resolution to the public. FDR began his first address with the words:
“I want to talk for a few minutes with the people of the United States about banking.”Columbia Prof. Raymond Moley had been serving as FDR's adviser on the banking crisis, wanted to consult with FDR at every point. He was disappointed that FDR didn't want to be involved, but the President wanted to concentrate on honing his message.
Secretary Will Woodin had been a manager and a CEO a quarter of a century and knew exactly what he had to do. He went right to work. His contribution to calming the panic has never been adequately appreciated and remembered.
The Friday before FDR's inauguration, most banks had already been closed because so many states had initiated their own bank holidays, to give the banks some breathing room as depositors were lining up to withdraw all their money (outgoing President Hoover wouldn't act without FDR's agreement, and FDR's position was that he was not going to try to second-guess Hoover until he became President on March 4).
The local scenes of panic throughout the banking system were exemplified vividly in Frank Capra's movie It's a Wonderful Life (1947), starring Jimmy Stewart as small-town banker George Bailey, who is considering suicide as he sees his depositors destroying his bank, one depositor at a time, while others not in line were desperately worried about their deposits.
FDR's first act was to announce a Federal "bank holiday" – i.e., a presidentially ordered closing of all banks – pending examination of the banks, starting with the largest ones first. The idea was that only "sound" (solvent) banks would be reopened.
Secretary Woodin knew what to do as a top manager, because he had been Chairman of a locomotive company and President of a railway car manufacturer that in 1928 were two of the 20 companies in the Dow Jones Industrial Average. He started working around the clock as if it were a three-shift factory, pushing government staff to:
- Print $2 billion more greenbacks for the banks to have on hand.
- Publicize the printing and packing of the greenbacks with filmed news clips for the cinemas, the equivalent of today's YouTube posts.
- Ensue that all the banks in the country were closed.
- Examine the banks one by one for solvency, with priority given to the largest banks.
- Reopen the sound banks.
- Take steps to close and liquidate the unsound banks.
- Prepare new legislation to prevent a recurrence of the banking crisis–the legislation being passed within months as the Banking Act of 1933, aka the Glass-Steagall Act, named for the bank-regulatory provisions proposed by Senate Banking Chair Carter Glass (D-Va.) and the deposit-insurance plan proposed by House Banking Chair Henry B. Steagall (D-Ala.).
- Prepare new legislation to provide oversight over non-bank financial institutions, which became the Securities Exchange Act of 1933.
In his first radio Fireside Chat, FDR explained the closure of the banks as necessary to stop a surge in withdrawals by depositors afraid of losing their savings. Many banks would be reopening within days, FDR said, and he thanked Americans for their “fortitude and good temper” during the period of the bank holidays.
When FDR took office, the United States was at the low point of the Great Depression, with the unemployment rate between 25 and 33 percent (the reporting of unemployment became more precise during the next decade).
The Fireside Chat got its name from radio journalist Robert (Bob) Trout, called "the Iron Man of Radio" for his ability to keep up a patter during a breaking news story when new information arrived in dribs and drabs.
FDR's purpose was to inspire confidence in himself and in the nonfunctioning banking system. While the chats sound folksy, FDR took great pains to make them that way, using simple vocabulary and anecdotes. Presidents had previously communicated with their citizens almost exclusively through journalists. The Fireside Chats were without precedent and they were effective because radios were still magical and were owned by 90 percent of U.S. households. They were the 1933 equivalent of what Tweets are in the very different America of 2017.
Labels: #GlassSteagall, #William H. Woodin, 1933, Banking Act, Carter Glass, FDR, Fireside Chat, Franklin Delano Roosevelt, Glass-Steagall Act, Henry Steagall
Sunday, March 5, 2017
|Elections to the Reischstag, by party, 1928-1933—Nazis got 38 percent of |
seats in July 1932, 34 percent in November 1932, 45 percent in the
manipulated election of March 1933. By November 1933
all parties other than the Nazis were banned.
It was also, chillingly, the day German voters elected 288 Nazi Party members to the Weimar Republic's parliament, the Reischstag.
Nazi Party leader Adolf Hitler had been appointed Reich Chancellor by German President Paul von Hindenburg, the formal head of the German Government since 1925. An aristocrat (in Germany, the von prefix signifies that someone has the title at least of Baron), von Hindenburg did not think much of upstart Adolf Hitler. However, he was at his wit's end dealing with Hitler's appeal to a totally demoralized German people. Hindenburg hoped to establish control over the Nazis by bringing Hitler into his tent.
Hitler swiftly trashed the tent...
He laid out his 1933 campaign early in the year, in a radio Appeal to the German People on February 1. He wrote most of the text of the Appeal himself. He said:
- The Weimar coalition that ruled the country since Nov. 9, 1918, generated 14 years of "Marxist" rule (i.e., under the largest party, the Social Democrats) that dominated the other parties in the Weimar coalition.
- Unless the German People reacted against this "Bolshevism" there would be anarchy.
- Germany's fate was in the hands of Almighty God and German voters.
- It is an appalling inheritance which we are taking over. The task before us is the most difficult which has faced German statesmen in living memory. But we all have unbounded confidence, for we believe in our nation and in its eternal values. Farmers, workers, and the middle class must unite to contribute the bricks wherewith to build the new Reich. The National Government will therefore regard it as its first and supreme task to restore to the German people unity of mind and will. It will preserve and defend the foundations on which the strength of our nation rests. It will take under its firm protection Christianity as the basis of our morality, and the family as the nucleus of our nation and our state. Standing above estates and classes, it will bring back to our people the consciousness of its racial and political unity and the obligations arising therefrom. It wishes to base the education of German youth on respect for our great past and pride in our old traditions. It will therefore declare merciless war on spiritual, political and cultural nihilism. Germany must not and will not sink into Communist anarchy. [Bold face added. That Hitler claimed Christianity was the basis of his morality was a shocker to me. On the racial front, he turned out to be as evil as he promised he would be.]
|Hitler pays his (last) respects to |
democracy in 1933.
The March 1933 election made the Nazis not only the largest party, but a party large enough to exceed comfortably any likely coalition. With just 33 percent of the German voters, the Nazi Party gained 44.5 percent of the votes in the Reichstag.
Hitler's Nazi Party had previously gotten nowhere, with less than 3 percent of the German electorate before the Crash of 1929 (see table above). Between 1928 and 1930, the Nazi Party grew from the ninth-largest party to the second-largest, with 18 percent of the vote in the Reichstag.
Two years later, the Nazi Party was the largest. The reason was a series of financial disasters that became global with the Wall Street Crash of October 1929. The disasters crushed the German economy and the Weimar Government seemed powerless to do anything about it. When the cost of rampant speculation in the 1920s is evaluated by history, the rise of Hitler, the Holocaust and the Second World War should be put on the ledger sheet.
|Nazi "Ballot", 1938 edition. Vote "YES"|
[Ja] for Hitler, or "No" [Nein] for
Trouble. [Vote No, and we will find you.]
Approval of the Reichstag became unnecessary. Within months Hitler banned all parties other than the Nazi Party. As of November 1933, the Reichstag became a vestigial assembly of Nazi party members.
That left in Hutker's way just von Hindenburg, who in July 1934 was 86 years old and dying of lung cancer. On August 1, Hitler's cabinet passed the "Law Concerning the Highest State Office of the Reich," which stipulated that upon the death of von Hindenburg, the offices of president and chancellor would be merged. Hitler would then be accountable to no one, becoming Führer und Reichskanzler des deutschen Volkes.
|In 1922 Hitler's anti-Semitism was|
dismissed as "not so genuine or violent..."
Conveniently, the President died the very next day. Hitler consolidated his dictatorship and that was the end of democracy in Germany until the Bundestag was formed in West Germany after the war.
Democracy for all of Germany did not return until reunification in 1990.
In the United States, meanwhile, FDR took office and quickly turned around the financial panic with the round-the-clock help of his Republican Treasury Secretary, William H. Woodin. U.S. financial markets were restored to stability, and economic recovery was started.
Unfortunately, it was too late to change the dim view in Europe of American democracy and capitalism since the Crash. Desperate German voters were an easy mark for Nazi demagogues. In the wake of the Panic and Depression, a mad hater had taken control of that country. FDR and other world leaders would have to confront this for the rest of his presidency.
Hitler's assumption of sole power had not been expected in the United States. On Nov. 21, 1922, The New York Times reported that Hitler's anti-Semitic propaganda was just "a bait to catch masses of followers and keep them aroused, enthusiastic and in line[...]" (see clip). The New York Times story refers to the "Hitler organization" as a violation of the military clauses of the Versailles Treaty, and refers to "its predecessor" — the Orgesch.
The Orgesch was named after a forgotten forerunner of Hitler, Georg Escherich (1870-1941). Escherish was a forester and politician with the Bavarian People's Party, which had 18 members elected to the Reichstag on the last ballot in March 1933 (see table at top). Since 1919 he headed the Bavarian Einwohnerwehren, the anti-communist home guard groups. In 1920 Escherich organized his supporters into the Orgesch (from "Organization Escherich"), an anti-Semitic paramilitary group, which violated the Versailles Treaty limit on the size of the German army to 100,000 troops referred to in the NY Times clip. The Orgesch established links with the Heimwehr in Austria, an early harbinger of the Anschluss. The Orgesch was disarmed and disbanded on the orders of the Allies in 1921 as part of wider moves against private armies that had sprouted up in Germany since the Armistice.
But as one devil was killed, seven new ones rose to take its place – the militias of the right, such as the Sturmabteilung and the Stahlhelm, Bund der Frontsoldaten, which grew in size until they were disbanded in 1933 in favor of Adolf Hitler's personal bodyguard, the super-sadistic Schutzstaffel or S.S.
One year ago, Timothy Egan's Op-Ed column today, "The Beast Is Us," suggests why everyone alive today who is concerned about keeping American democracy should remember March 5, 1933 — the day one-third of Germans voted and elected a dictator bent on a world war, enough voters to end contested elections while Germany took the world into war.
Postscript, April 2, 2017: Christopher R. Browning, Professor Emeritus at the University of North Carolina at Chapel Hill, reviews a 998-page book by Volker Ullrich in the April 20 issue of The New York Review of Books (pp. 10, 12, 14). The book, Hitler: Ascent 1889-1939 (Knopf), shows how Hitler rose out of a weak democracy to become Germany's Führer. While noting major differences, Browning also notes some disturbing similarities between the Weimar era in Germany and American democracy in 2016-2017. He concludes:
Weimar parliamentary government had been supplanted by presidentially appointed chancellors ruling through the emergency decree powers of an antidemocratic president [Paul von Hindenburg] since 1930. In 1933 Hitler simply used this post-democratic stopgap system to install a totalitarian dictatorship with incredible speed and without serious opposition. If we can still effectively protect American democracy from dictatorship, then certainly one lesson from the study of the demise of Weimar and the ascent of Hitler is how important it is to do it early. (My emphasis.)A Time Line on Hitler's ascendancy to power shows the erosion of Germany democracy over many years.
|Dorothy Pechman Rice (1922-2017)|
She was 94. She was associated as a professor at the Institute of Aging at School of Nursing at the University of California, San Francisco.
The UCSF Institute website shows photos of 32 faculty and staff associated with it today. But Rice was working in a new field when she was an analyst at the Social Security Administration in 1964. A study she worked on highlighted that half the population 65 and over had no health insurance. The number was then 8.5 million uninsured older people, she wrote in a 1964 issue of the Social Security Bulletin. Jonathan Oberlander, author of The Political Life of Medicare (2003), called Mrs. Rice an “extraordinary researcher.” The timing was good, as President Lyndon Johnson had widespread support for an expansion of government services in the wake of the assassination of JFK.
Interest in elderly people as a political force as well as a market was growing at that time in part because of the creation of the American Association for Retired People, backed by the Colonial Penn Insurance Company. My father, E. R. Marlin, was recruited after he retired from the State Department to create the International Federation on Ageing [sic] in the late 1960s. He had devoted two decades creating and then helping to manage the International Civil Aviation Organization, the U.N. agency devoted to commercial airline safety. http://warriors-families.blogspot.com/2015/10/october-24-un-opens-for-business-and-my.html
Rice was born in Brooklyn on June 11, 1922. She attended Brooklyn College for a year, then transferred to the University of Wisconsin, earning a B.A. in economics. She moved to Washington to become a statistical clerk for the Department of Labor, then worked as an economist at the U.S. Public Health Service. She said she "did well" as a female economist because of the shortage of analytical staff during World War II. http://www.abhow.com/news/2010/12/24/a-pioneering-perspective-dorothy-rice.192976.
Dorothy Rice became director of the National Center for Health Statistics, where she worked on estimates of the costs of treating people with heart disease, cancer, Alzheimer’s, disabilities and strokes. This is the work that Rice said in her 2010 interview that she was proudest of.
At UCSF, she participated in studies on the financial costs of cigarette smoking, estimating in 1998 that smoking-related illnesses cost Medicaid $12.9 billion a year ($19.2 billion today). Mrs. Rice told The Los Angeles Times: “Any global settlement with the tobacco industry should go beyond $368 billion.” It was eventually cut to about $250 million over 25 years.
Rice is survived by her sons Tom, a UCLA economist, Kenneth and Donald. Her brother, Joseph A. Pechman, a well-known tax scholar and director of economic studies at the Brookings Institution, died in 1989. Her husband died in 2005.
Sources: Obituary by Richard Sandomir, The NY Times, and sources cited above.
Saturday, March 4, 2017
|The Brains Trust with President-elect FDR.|
L to R: Cary Grayson, Norman Davies, Raymond
Moley, Redford Tugwell, Will Woodin, FDR.
For his rained-on Inaugural Address outside the east wing of the U.S. Capitol, FDR had to ascend the steps to the podium to take the oath of office.
To do this, an elaborate series of wheelchair-accessible ramps was constructed and hidden. FDR walked the last few yards leaning heavily on the arm of his son James.
FDR then outlined his New Deal–an expansion of the federal government to create jobs and improve the quality of life for Americans. He told Americans that “the only thing we have to fear is fear itself.” His Inaugural March, composed for the occasion by FDR's Treasury Secretary, William H. Woodin, was played in the rain. Despite the downpour, FDR delivered a speech that conveyed an upbeat, can-do spirit.
The President then had to face serious the bank panics and gold outflows. He turned that job over entirely to Treasury Secretary Woodin so that he could focus on the message that he wanted to deliver to his country.
Woodin immediately focused on printing more bills, getting them to the banks to solve the liquidity problem, publicizing the generation of liquidity, opening solvent ("sound") banks, and closing down banks that were insolvent. Meanwhile, Woodin worked on the passage of the Banking Act of 1933—the Glass-Steagall Act—and the Securities Exchange Act of 1933. The turnaround in the financial markets was almost immediate and endured.
FDR was born in 1982 to an old Dutch family in Hyde Park, NY, the fifth cousin of Theodore (Teddy) Roosevelt, who served two terms as the 26th U.S. president in 1901-1909. In 1905, FDR, then a student at Columbia University Law School, married Anna Eleanor Roosevelt, Teddy Roosevelt's niece. After three years practicing law, FDR followed his cousin Teddy's lead and campaigned for, and won, election to the NY State Senate in 1910 as a Democrat. He soon earned a reputation as a reform-oriented charismatic politician.
After supporting progressive N.J. Governor Woodrow Wilson in his successful 1912 bid for the Democratic presidential nomination, FDR was appointed assistant secretary of the U.S. Navy, a post that Teddy Roosevelt once held. In 1920, FDR won the Democratic nomination for vice president on a ticket with James Cox. The Democrats to Republicans Warren Harding and Calvin Coolidge, and FDR returned to his law practice and some business ventures.
In 1921, FDR was stricken with polio and became nearly totally paralyzed. His wife, Eleanor, kept the Roosevelt name alive in Democratic circles. In 1924, partly recovered (although he could never again walk unaided), FDR returned to politics, nominating NY Governor Alfred E. Smith for the presidency with a rousing speech at the Democratic National Convention.
In 1928, he again nominated Smith, and the outgoing New York governor urged Roosevelt to run for Governor. Roosevelt campaigned across the state by automobile and was elected even as the state voted in the presidential election against their favorite son and for Republican Herbert Hoover.
As governor, Roosevelt worked for tax relief for farmers and in 1930 won a resounding electoral victory just as the economic recession brought on by the October 1929 stock market crash brought on the Great Depression. Governor Roosevelt mobilized the state government to play an active role in providing relief and spurring economic recovery. His aggressive and effective approach to the economic crisis won him the Democratic presidential nomination in 1932.
The contrast between FDR's activist response in NY State to the Depression and President Hoover's laissez-faire inaction nationwide couldn't have been greater, and FDR had no trouble defeating Hoover in 1932. Many blamed Hoover for the Depression, and FDR carried all but six states. During the next four months before the inauguration, bank panics increased, the economy continued to decline. When Roosevelt took office on March 4, 1933, most banks were closed, farms were suffering, 13 million workers were unemployed, and industrial production stood at just over half its 1929 level.
FDR's Treasury Secretary, Will Woodin, was a Republican industrialist who had once run for Congress on a hard-money program. He was a fan of Teddy Roosevelt and helped FDR with his Warm Springs Foundation and with fundraising for his runs for Governor and President.
Woodin was a key player during the financial reforms of the first 100 days of FDR's presidency. Aided by a Democratic Congress, Roosevelt took prompt, decisive action, and most of his New Deal proposals were approved during these 100 days. Most important for the financial sector were the Banking Act or Glass-Steagall Act of 1933, a trade of tough bank regulation for a limited deposit insurance program sought by the banks, and the Securities Exchange Act of 1933. Woodin as Treasury Secretary was deeply involved in the passage of these laws.
Job-creating programs also passed in the first 100 days included the Agricultural Adjustment Act, National Industrial Recovery Act, and the Public Works Administration and Tennessee Valley Authority.
Although many in the business community stubbornly criticized FDR's regulatory and job-creating programs—both FDR and Secretary Woodin were called traitors to their class—the programs unquestionably improved America’s economic climate and FDR was reelected handily three more times. Woodin became sick from the long hours and stress of his job, and died in May 1934; FDR called him a "martyr to public service."
Labels: #FDR, #GlassSteagall, #WillWoodin, #Woodin, Banking Act of 1933, FDR, Franklin Delano Roosevelt, Glass-Steagall Act, Treasury Secretary, Treasury Secretary Woodin, Will Woodin, William H. Woodin
Friday, March 3, 2017
NYC Pensions Revamp Asset Mgmt Unit after Scathing Report
The office has overhauled its asset management unit after a damning report last year found a widespread lack of operational and risk processes.
The $170.5 billion system has adopted formal investment committee processes, hired risk management staff and adopted new technology as part of sweeping efforts to improve middle- and back-office processes, compliance and risk controls.
The pension system this month outlined 59 separate changes to its Bureau of Asset Management (BAM). These cut across six risk and operational categories and have, or will be, completed throughout 2016 and 2017, according to a Feb. 15 presentation seen by FundFire. These changes are led by former TIAA technology and operations v.p. Cara Schnapel, who was , a month after found (NYCERS) had compromised its ability to act as a fiduciary or manage operational risk due to having such poor oversight.
New York City Pension Funds is part of the NY City’s Comptroller’s office and oversees five pensions including NYCERS, the and the .
One change the system has made is to standardize BAM’s investment committee, creating, for the first time, a formal investment committee process.
"Over the past two years we have formalized and standardized both our due diligence and manager approval processes. All BAM proposals that are heard by our five Systems boards must be pre-approved by this internal investment committee," a spokesman for the comptroller writes in response to emailed questions.
Another change listed in the presentation states the system "proposed new asset allocations" in Q3 although no further detail is given.
Risk management has been a key theme of the changes.
The pension will install a new risk management system, for which it is reviewing responses to an RFP released in Q4, 2016. A vendor will be chosen in Q1, according to the presentation document. The system also shifted to a product after dropping the QED accounting platform and moving away from using spreadsheets.
In addition, BAM will work with the NYC Comptroller’s Bureau of Accountancy to streamline fund accounting processes.
A number of changes are directed at revamping middle office functions, which will be run by Lynne Fleischman, director of investment operations support. She was brought on in 2017 and previously worked at and Citi, according to a . She oversees 24 support roles, which will grow to 27 throughout 2017. Nine of these roles were new in 2016, including a research and management support function and system support and change management role, while a further three – all third party services roles – will be created this year, according to the presentation. A comptroller spokesman did not break out the cost of the staff increase, but says it was accounted for in the 2016 budget.
The Comptroller’s office says no single change was more important than others, but that "the critical difference is that the Comptroller and BAM leaderships now have a new focus on addressing long-standing, complicated organizational issues, from updating the accounting platform to building compliance and middle-office capacity," the spokesman writes.
Large public plans can often resemble sizeable asset managers, but often fall short on operational resources, says Freeman Wood, principal for Sentinel, the investment consultant’s operational unit.
"We’re seeing a very significant increase in public pension as well as private organizations, asset managers, private corporate pensions, endowments and foundations, all really starting to look at this type of analysis – internal controls, associated risks. This is definitely growing and there is increased demand for doing that," he says.
There are risks to a pension executing a campaign of sweeping changes, but the immediate friction is often worthwhile, he says.
"There are clearly short-term costs, but the longer-term objective is to make things more efficient. That leads to lower risk. Trying to make a process stronger, well controlled, but also efficient – getting to a spot where you’re not adding incremental costs in the long haul."
Another area the pension system is targeting is on-site manager due diligence, according to comments made by Scott Evans, deputy comptroller for asset management, chief investment officer for New York City Retirement Systems, .
Prior to his arrival in 2014, the pension system did no site visits as part of its external manager due diligence, he said.
"It’s just not good due diligence. You have got to go out, you have got to meet not only the heads, but you have to meet the 14 people who are in the shop, running the organization, meet the compliance people, talk to the operations people, see for yourself what kind of firm you are investing in," he said.
The system’s $300,000 travel budget will go towards visiting managers, including those overseas, he adds.
"Our people will travel to Edinburgh, Scotland to visit them. They will not be playing golf on the trip. They will not be staying in fancy hotels; they will not be flying first class… But if we can’t afford to send people to Edinburgh to kick the tires of the manager that we have hired from Edinburgh, we shouldn’t hire an Edinburgh fund manager."