Reviewed by Bill Breakstone, October 27, 2010
For music lovers who appreciate the music of Robert Schumann, Carnegie Hall was the place to be last night. The brilliant Hungarian pianist offered a very interesting program devoted to Schumann’s early piano compositions in a recital that was intriguing, fascinating and, in ways, highly unusual.
There is no living pianist who I admire more than Schiff. I have known his work for over 35 years now, from the early period of his career when he mostly concentrated on Bach keyboard compositions, to stunning effect. His development as a keyboard artist expanded to include his native Slavic composers—Bartok, Smetana and Janacek, then the masterpieces of the classical literature, including Mozart, Haydn, Beethoven and Schubert. In 1999, Schiff toured several European cities performing some of the piano compositions of Robert Schumann, to critical acclaim. One concert was given in Zurich that May, and was recorded “live,” subsequently released on CD by ECM. The program consisted of Schumann’s Humoresque, Op. 20; the complete Novelletten, Op. 21; the Klaviersonate in f-minor, Op. 14; and the Nachtstucke, Op. 23. That recording is as fine an example of Schumann performance as one could come by, and is one of the most treasured possessions in my musical library.
Schiff has turned once again to the music of Schumann during his current North American tour, and appeared last night at Carnegie Hall for a rather long and engrossing reading of some of the composer’s piano works. The program this time included the Waldszenen, Op. 82; the Davidsbundlertanze, Op. 6; the Kinderszenen, Op. 15; the Symphonic Etudes, Op. 13; and as encores, the Papillons, Op. 2; and, finally, the final movement of the Phantasie, Op. 17.
My pedagogical grandfather Ernest Hutchison wrote of Schumann, “All too often does genius encounter tragedy. Beethoven’s deafness, Schubert’s grinding poverty and early death, Chopin’s unhappy life—“an episode with no beginning and with a sorrowful end”—the blindness of Milton, the suicide of Chatterton when help was near, the broken heart of Keats—these are but a few of the historic catastrophes of art. With them we must place the insanity of Schumann, the ultimate disaster of a chequered life. Having lamed a hand and ruined his prospects as a pianist, he earned the gratitude of posterity by diverting his talents to composition. His fecund imagination gave birth to a long series of vivid works before it grew barren under the approaching decay of his mind.”
Schumann was a compositional revolutionary. He moved classical music to new frontiers, highly emotional and expressive, sometimes bound by traditional conventions of composition, other times not. The piano was his natural medium of expression. Even his lieder are written not solely for voice, but for voice and piano, and feature an equal partnership between vocal expressiveness and that of the keyboard instrument, on an equal basis.
His output for the piano is predominated by compositions that could be classified as miniatures, on the one hand, and works of a larger scale, either in sonata form, variations that combine a unity of expression that are interconnected thematically, harmonically or rythmetically; or revert to other traditional compositional forms, such as the toccata. Schiff’s program last night mainly concentrated on the former. The Waldszennen, Davidsbundlertanze, Kinderszenen and Papillion’s all represent rather unconnected musical expressions, relatively short in duration, character pieces that invoke a mood, scene, emotion, or literary reference. The two exceptions were the Symphonic Etudes and the final encore, the last movement of the Phantasie.
With the exception of the Phantasie, there exists in Schumann’s writing a wide shift in moods from the lyrical to the impulsive, from a legato style to a much more up-tempo and frenetic pace. Schiff is a master performer who is perfectly capable of balancing these opposites, but I must admit that last night he seemed more at ease with the former and less so with the later.
As I mentioned to the artist back stage, I doubt a concertgoer had ever heard a movement of the Phantasie performed as an encore, nor ever would again. This work is one of the masterpieces of the piano literature, and to offer an excerpt of it as an encore was, in the words of a famous fellow musician I chatted with before talking with Schiff, highly unusual. It would have been far more appropriate to delete one of the “miniatures,” and performed the entire Phantasie. Those reservations having been stated, the recital was an engrossing evening of music making.
Thursday, October 28, 2010
Saturday, October 23, 2010
THANK YOU MR. OSBORNE
This week, the cable channels and print media were abuzz with news stories coming out of London reporting on the Government's new deficit reduction program. This followed somewhat less intense coverage of Britain's defense cuts on Tuesday. On Wednesday, the New York Times ran two detailed articles on the total package of spending cuts [see below]. This morning, the Times ran a very critical editorial on Britain's misguided austerity program.
I think that America owes a huge "thank you" to George Osborne for making Great Britain the economic guinea pig and allowing the country the opportunity of proving wrong all the lessons learned from the Great Depression, and documented by one economist after another. How courageous to turn economic logic on its head and disprove the lessons of history. But more importantly, we owe thanks to Osborne and Cameron that they are taking the economic gamble instead of American policymakers. Now we will all see if the "deficit hawks" have it right, or as Stiglitz and Company say below, there is absolutely nothing to gain in Britain's policy, and everything to lose.
The first Times article, written by financial reporter Landon Thomas, includes the following:
"In Britain, George Osborne, chancellor of the Exchequer, delivered a speech on Wednesday arguing forcefully that Britons, despite slowing growth and negligible bank lending, must accept a rise in the retirement age to 66 from 65 and $130 billion in spending cuts that would eliminate nearly 500,000 public sector jobs and hit pensioners, the poor, the military and the middle class because of what he insisted was the overwhelming need to reduce the country’s huge budget deficit.
In Ireland, devastated by a historic property crash and banking bust, the Irish government is preparing another round of spending cuts and tax increases.
Combined with what Dublin has already imposed, the cuts could add up to as much as 14 percent of Ireland’s gross domestic product, an extraordinary amount for a modern industrial country. Ireland’s budget deficit reached 32 percent of total economic output this year.
Indeed, across Europe, where the threat of a double-dip recession remains palpable, governments from Germany to Greece are slashing public outlays. But even as students and workers in France clash with the police and block fuel shipments to protest a rise in the retirement age, the debate in Europe is more on how fast to cut government spending rather than whether such reductions are the right thing to do under the circumstances.
Joseph E. Stiglitz argued that the British government’s plan was “a gamble with almost no potential upside” and that it would lead to lower growth, lower demand, lower tax revenues, a deterioration of skills among the unemployed and an even higher national debt. [Emphasis mine.]
“We cannot afford austerity,” he wrote in The Guardian.
The stiff upper lip with which Mr. Osborne delivered his call for sacrifice on Wednesday in the House of Commons reinforces that point. It is grounded in memory of Britain’s economic collapse in the 1970s, when the International Monetary Fund had to come to the rescue just as it has done recently in Greece.
Even the previous Labour government of Prime Minister Gordon Brown proposed substantial budget cuts before losing office in May, many of them incorporated by Mr. Osborne into his four-year spending plan.
“There is nothing fair in running huge deficits that we are not prepared to repay,” Mr. Osborne said in his speech, responding to arguments that cuts would fall hardest on the country’s poorest.
It is this institutional memory — combined with the widely accepted view that bond market demands to follow through on promised austerity plans cannot be ignored — that underpins not only Mr. Osborne’s approach but also that of his European peers.
That contrasts sharply with the United States, where White House policy makers are urging caution in reducing deficits too quickly, fearing that ending stimulus efforts before the economy is clearly on the road to recovery risks making a mistake similar to President Franklin D. Roosevelt’s budget cutting in the middle of the Great Depression, which extended the downturn.
“In the U.S., central bank memory is ingrained in the Depression, while in the U.K. it is being bailed out by the I.M.F.,” said Michael Saunders, an economist with Citigroup in London. “That gives policy makers different sets of priorities.”
To be sure, the prospect of the once munificent British state sharply cutting benefits for children of middle-class families, making students pay much more for their schooling and cutting jobs and the pay of public sector workers has led to a backlash from the country’s labor unions.
“Today, the fight begins,” David Prentis, the general secretary of Unison, the country’s largest union, exhorted participants at a rally on Tuesday. “Hands off our public services.”
The second Times piece was written by Sarah Lyall, reporting from London, and Alan Cowell from Paris. Julia Werdigier contributed reporting from London. Here are some selected excerpts:
"The coalition government is gambling that the reductions in public outlays will stimulate the private sector and restart growth, rather than send the economy back into a tailspin, [Sue, the emphasis is mine, and I must comment that I have never heard anything so stupid in all my years of studying economics] as liberal economists have warned.
Britain has been bracing for the cuts for months, after Mr. Osborne announced in June the details of the so-called spending review, but Wednesday was the first time the government had set out its plans, department by department.
Mr. Osborne said that 490,000 public sector jobs would be lost over the next four years, some to attrition. At the same time, payments to the long-term unemployed who fail to seek jobs will be cut, he said, saving $11 billion a year. Additionally, he said, a new 12-month limit will be imposed on long-term jobless benefits, and measures will be taken to curb benefit fraud.
Mr. Osborne said an increase in the official retirement age to 66 from 65 would start in 2020 — four years sooner than planned — saving $8 billion a year. Britain has already said it will stop paying child benefit payments to people earning more than around $70,000 a year.
This morning's Times editorial is worth quoting in full:
BRITAIN'S AUSTERITY OVERDOSE
There is a time and a place for aggressive deficit reduction. Now is not the time, especially not in Britain. The deep spending cuts announced by Prime Minister David Cameron’s government will hobble public services, strain poor families’ budgets and weaken Britain’s influence abroad. They could suffocate a feeble recovery.
Mr. Cameron and his team appear to be driven solely by Conservative Party articles of faith. They are gambling on the improbable theory that in a period of weak consumer demand, the private sector will generate enough business activity to replace the $130 billion the government will be withdrawing from the economy over the next four and half years. We are not sure why the Liberal Democrats, the coalition’s junior partners, are going along.
On average, government departments will have to slash their spending by an average of nearly 20 percent. The National Health Service was shielded from cuts, and after a last-minute intervention by Mr. Cameron at Washington’s behest, the military budget will be cut by only 8 percent.
Most military reductions will come through sensible retrenchments like delaying the replacement of Britain’s nuclear missile submarines and drawing down British forces stationed in Germany. But they will still require significant reductions in the number of British troops available for any new major NATO operations.
Shielding the military and the health service, while essential, required cutting more recklessly elsewhere. Nearly 500,000 public jobs (out of 6 million) will be eliminated. Long-term unemployment benefits will be cut off after 12 months. Public housing tenants will pay higher rents. School construction will be cut by 60 percent.
Recession, bank rescues and short-term stimulus spending pushed Britain’s deficit up to 11.5 percent of total economic output, even higher than the United States’ 10.7 percent. Both countries will have to bring those numbers down over time. But otherwise healthy economies can afford to run fiscal deficits in times of weak private sector growth. In fact, they cannot afford not to.
Britain’s deficits did not spawn bond market panics. Interest rates remained low. That left room for a nuanced policy that relied on a reviving economy to boost tax receipts and deferred major spending cuts until a solid recovery was under way. Unfortunately, Britain’s leaders chose posture over sound economics.
I think that America owes a huge "thank you" to George Osborne for making Great Britain the economic guinea pig and allowing the country the opportunity of proving wrong all the lessons learned from the Great Depression, and documented by one economist after another. How courageous to turn economic logic on its head and disprove the lessons of history. But more importantly, we owe thanks to Osborne and Cameron that they are taking the economic gamble instead of American policymakers. Now we will all see if the "deficit hawks" have it right, or as Stiglitz and Company say below, there is absolutely nothing to gain in Britain's policy, and everything to lose.
The first Times article, written by financial reporter Landon Thomas, includes the following:
"In Britain, George Osborne, chancellor of the Exchequer, delivered a speech on Wednesday arguing forcefully that Britons, despite slowing growth and negligible bank lending, must accept a rise in the retirement age to 66 from 65 and $130 billion in spending cuts that would eliminate nearly 500,000 public sector jobs and hit pensioners, the poor, the military and the middle class because of what he insisted was the overwhelming need to reduce the country’s huge budget deficit.
In Ireland, devastated by a historic property crash and banking bust, the Irish government is preparing another round of spending cuts and tax increases.
Combined with what Dublin has already imposed, the cuts could add up to as much as 14 percent of Ireland’s gross domestic product, an extraordinary amount for a modern industrial country. Ireland’s budget deficit reached 32 percent of total economic output this year.
Indeed, across Europe, where the threat of a double-dip recession remains palpable, governments from Germany to Greece are slashing public outlays. But even as students and workers in France clash with the police and block fuel shipments to protest a rise in the retirement age, the debate in Europe is more on how fast to cut government spending rather than whether such reductions are the right thing to do under the circumstances.
Joseph E. Stiglitz argued that the British government’s plan was “a gamble with almost no potential upside” and that it would lead to lower growth, lower demand, lower tax revenues, a deterioration of skills among the unemployed and an even higher national debt. [Emphasis mine.]
“We cannot afford austerity,” he wrote in The Guardian.
The stiff upper lip with which Mr. Osborne delivered his call for sacrifice on Wednesday in the House of Commons reinforces that point. It is grounded in memory of Britain’s economic collapse in the 1970s, when the International Monetary Fund had to come to the rescue just as it has done recently in Greece.
Even the previous Labour government of Prime Minister Gordon Brown proposed substantial budget cuts before losing office in May, many of them incorporated by Mr. Osborne into his four-year spending plan.
“There is nothing fair in running huge deficits that we are not prepared to repay,” Mr. Osborne said in his speech, responding to arguments that cuts would fall hardest on the country’s poorest.
It is this institutional memory — combined with the widely accepted view that bond market demands to follow through on promised austerity plans cannot be ignored — that underpins not only Mr. Osborne’s approach but also that of his European peers.
That contrasts sharply with the United States, where White House policy makers are urging caution in reducing deficits too quickly, fearing that ending stimulus efforts before the economy is clearly on the road to recovery risks making a mistake similar to President Franklin D. Roosevelt’s budget cutting in the middle of the Great Depression, which extended the downturn.
“In the U.S., central bank memory is ingrained in the Depression, while in the U.K. it is being bailed out by the I.M.F.,” said Michael Saunders, an economist with Citigroup in London. “That gives policy makers different sets of priorities.”
To be sure, the prospect of the once munificent British state sharply cutting benefits for children of middle-class families, making students pay much more for their schooling and cutting jobs and the pay of public sector workers has led to a backlash from the country’s labor unions.
“Today, the fight begins,” David Prentis, the general secretary of Unison, the country’s largest union, exhorted participants at a rally on Tuesday. “Hands off our public services.”
The second Times piece was written by Sarah Lyall, reporting from London, and Alan Cowell from Paris. Julia Werdigier contributed reporting from London. Here are some selected excerpts:
"The coalition government is gambling that the reductions in public outlays will stimulate the private sector and restart growth, rather than send the economy back into a tailspin, [Sue, the emphasis is mine, and I must comment that I have never heard anything so stupid in all my years of studying economics] as liberal economists have warned.
Britain has been bracing for the cuts for months, after Mr. Osborne announced in June the details of the so-called spending review, but Wednesday was the first time the government had set out its plans, department by department.
Mr. Osborne said that 490,000 public sector jobs would be lost over the next four years, some to attrition. At the same time, payments to the long-term unemployed who fail to seek jobs will be cut, he said, saving $11 billion a year. Additionally, he said, a new 12-month limit will be imposed on long-term jobless benefits, and measures will be taken to curb benefit fraud.
Mr. Osborne said an increase in the official retirement age to 66 from 65 would start in 2020 — four years sooner than planned — saving $8 billion a year. Britain has already said it will stop paying child benefit payments to people earning more than around $70,000 a year.
This morning's Times editorial is worth quoting in full:
BRITAIN'S AUSTERITY OVERDOSE
There is a time and a place for aggressive deficit reduction. Now is not the time, especially not in Britain. The deep spending cuts announced by Prime Minister David Cameron’s government will hobble public services, strain poor families’ budgets and weaken Britain’s influence abroad. They could suffocate a feeble recovery.
Mr. Cameron and his team appear to be driven solely by Conservative Party articles of faith. They are gambling on the improbable theory that in a period of weak consumer demand, the private sector will generate enough business activity to replace the $130 billion the government will be withdrawing from the economy over the next four and half years. We are not sure why the Liberal Democrats, the coalition’s junior partners, are going along.
On average, government departments will have to slash their spending by an average of nearly 20 percent. The National Health Service was shielded from cuts, and after a last-minute intervention by Mr. Cameron at Washington’s behest, the military budget will be cut by only 8 percent.
Most military reductions will come through sensible retrenchments like delaying the replacement of Britain’s nuclear missile submarines and drawing down British forces stationed in Germany. But they will still require significant reductions in the number of British troops available for any new major NATO operations.
Shielding the military and the health service, while essential, required cutting more recklessly elsewhere. Nearly 500,000 public jobs (out of 6 million) will be eliminated. Long-term unemployment benefits will be cut off after 12 months. Public housing tenants will pay higher rents. School construction will be cut by 60 percent.
Recession, bank rescues and short-term stimulus spending pushed Britain’s deficit up to 11.5 percent of total economic output, even higher than the United States’ 10.7 percent. Both countries will have to bring those numbers down over time. But otherwise healthy economies can afford to run fiscal deficits in times of weak private sector growth. In fact, they cannot afford not to.
Britain’s deficits did not spawn bond market panics. Interest rates remained low. That left room for a nuanced policy that relied on a reviving economy to boost tax receipts and deferred major spending cuts until a solid recovery was under way. Unfortunately, Britain’s leaders chose posture over sound economics.
Wednesday, October 20, 2010
BOOK REVIEW--"DJIBOUTI" by Elmore Leonard
Reviewed by Janet Maslin, The New York Times,
October 10, 2010 with a post note by
Bill Breakstone
Monday, October 11th, is Elmore Leonard’s 85th birthday. It is also Columbus Day 2010, a national holiday. Coincidence? Perhaps. But this is as good a time as any to acknowledge America’s hippest, best-loved, most widely imitated crime writer as a national treasure
In honor of the occasion Mr. Leonard seems to have given himself a couple of birthday presents. First of all, he calls his 44th and latest novel “Djibouti” just because he loves the sound of that name. Second, he gives “Djibouti” Xavier LeBo, a studly 6-foot-6-inch black leading man who, at 72, has lost none of his appeal to pretty young women. And he puts Xavier on a small boat with a smart, tough and alluring younger woman, a pale-skinned blonde who also happens to be a prizewinning filmmaker.
Mr. Leonard was very taken with Kathryn Bigelow (“The Hurt Locker”) when he met her years ago and took care to send her an early copy of this novel. “Djibouti” follows a very Bigelow-like director named Dara Barr as she heads for East Africa to make a film about pirates. Dara specializes in documentaries about tough subjects, so she has made films about Bosnian women, neo-Nazis and Hurricane Katrina. (“Dara, you nailed that hurricane,” somebody tells her.) Now she wants to find out about the very dangerous Republic of Djibouti, whose port is conveniently located near both the Gulf of Aden and the home turf of Somali pirates. Dara thinks real pirates might be great on camera.
Neither Dara, Xavier nor, apparently, Mr. Leonard is exactly sure what opportunities Djibouti will provide. In a book without a powerhouse plot but with plenty of the old familiar crackle, Mr. Leonard simply flies his principals to this exotic spot and then imagines which other opportunists might be drawn to the place. He hits pay dirt with a noisily ostentatious Texan named Billy Wynn, who can count a big boat, an elephant gun and a model named Helene among his favorite possessions. Helene, this book’s funniest character, is willing to sail around the world with Billy on the off chance that he will marry her and write her into his will.
The pirates’ paradise of this novel turns out to be a lot more civilized than it sounds. For one thing, the pirate kingpins are a gentlemanly lot, what with their European pretensions and large sums of discretionary income. Dara has the gift of charming these people while filming them covertly for possible use in her magnum opus. She gets to know the courtly Idris, whose day job as a pirate leader does nothing to diminish his skills as a debonair party host, and Ari Ahmed Sheikh Bakar, a Saudi diplomat who has done his best to anglicize his name into “Harry.” Then Dara goes back to the boat that she and Xavier have rented and tries to figure out what she has captured on camera and what, exactly, is going on.
“Xavier LeBo believed was he 10 years younger, they’d be letting good times roll all over this boat,” Mr. Leonard writes of the book’s never-say-die hero. But Xavier’s dealings with Dara are professional, at least until he goes and purchases something called horny goat weed from a local merchant. Mostly, the two engage in a nonstop debate as to what kind of film Dara ought to make. What soon becomes clear to both of them is that the idea of Somali pirates as misunderstood underdogs is not going to fly. The hijacking of a tanker filled with liquid natural gas is one good reason to think that this region is getting ready to explode.
Mr. Leonard is on familiar turf when it comes to the pirates’ punk aspirations to live large. (Xavier’s explanation of what the pirates do: “They on the sauce gettin millions for their ransom notes.”) And he’s great with eccentricities, particularly Billy’s, once Billy starts reminding Helene of the Sterling Hayden character in “Dr. Strangelove.” But “Djibouti” has links to serious business that the book can’t just take lightly. Real events, like the 2009 attack by Somali pirates on the Maersk Alabama and rescue of Captain Richard Phillips by United States Navy seals, are used to lend gravitas to the novel’s exotic setting.
Mr. Leonard also allows the shadow of terrorism to loom. He creates a character who has an Arab’s name, Jama Raisuli, but an American’s rap sheet and criminal record. And he derives most of his suspense this time from the question of how dangerous Jama will be. In a novel not otherwise overly concerned with plot, there is drama attached to whether Jama’s real name can be found. If he turns out to be a real American-born jihadi, he may be worth serious reward money from the American government. But characters in “Djibouti” who get too inquisitive about Jama’s identity have a way of winding up dead.
How does Dara’s filmmaking figure in all this? Perhaps autobiographically, since it lets Mr. Leonard regularly step back to contemplate the storytelling process. We watch Dara and Xavier talk over the material they’ve collected and the different ways they might put it together. Are they making a documentary? Should they turn it into a drama? Are there scenes they need to boost artificially or does the truth speak for itself? The 85-year-old birthday boy already has the how-to manual “10 Rules of Writing” to his credit, but he delivers a little more literary advice here by demonstrating how these filmmakers work. It’s simple: Ask the right questions. Then come up with the right answers.
A NOTE ON “DJIBOUTI” by Bill Breakstone,
October 20, 2010
My first introduction to the novels of Elmore Leonard came when my neighbor and I exchanged birthday gifts many years ago. John and I shared the same birth-date, January 27th, along with Mozart. My gift to him was a recording of two Mozart piano concerti; John’s present for me was an Elmore Leonard novel. I can’t remember which one it was, but I totally agreed with him that this writer was “hip!” That must have been twenty years ago. Of course, Leonard’s writings go back much farther than that. His first novels were all about the “Wild West,” the most famous of which was “Hombre.” Who will ever forget that movie with the young Paul Newman in the title role?
Starting with his 11th novel, Mr. Majestyk, Leonard shifted gears, focusing on crime stories, with casts of the most outrageous characters one could imagine. Two were made into movies, really bad movies—“Get Shorty” and “Be Cool.” If these two duds turn off potential Leonard readers, they are missing out on some of the most enjoyable reading in the fiction library. Among the most memorable, and laughable of these tales, are: “Freaky Deaky”; “Maximum Bob”; “Cuba Libra”; “Tishomingo Blues”; and “Mr. Paradise”.
This latest novel, “Djibouti,” is as good as any of Leonard’s previous output. As Janet Maslin writes in her review, the author is a national treasure. The book is just shy of 300 pages, but it reads like lightening. Another one you just cannot put down.
If you’ve never read any of Leonard’s novels, and it’s amazing how many readers I run into who have not, this is not a bad one to start with. Enjoy!
October 10, 2010 with a post note by
Bill Breakstone
Monday, October 11th, is Elmore Leonard’s 85th birthday. It is also Columbus Day 2010, a national holiday. Coincidence? Perhaps. But this is as good a time as any to acknowledge America’s hippest, best-loved, most widely imitated crime writer as a national treasure
In honor of the occasion Mr. Leonard seems to have given himself a couple of birthday presents. First of all, he calls his 44th and latest novel “Djibouti” just because he loves the sound of that name. Second, he gives “Djibouti” Xavier LeBo, a studly 6-foot-6-inch black leading man who, at 72, has lost none of his appeal to pretty young women. And he puts Xavier on a small boat with a smart, tough and alluring younger woman, a pale-skinned blonde who also happens to be a prizewinning filmmaker.
Mr. Leonard was very taken with Kathryn Bigelow (“The Hurt Locker”) when he met her years ago and took care to send her an early copy of this novel. “Djibouti” follows a very Bigelow-like director named Dara Barr as she heads for East Africa to make a film about pirates. Dara specializes in documentaries about tough subjects, so she has made films about Bosnian women, neo-Nazis and Hurricane Katrina. (“Dara, you nailed that hurricane,” somebody tells her.) Now she wants to find out about the very dangerous Republic of Djibouti, whose port is conveniently located near both the Gulf of Aden and the home turf of Somali pirates. Dara thinks real pirates might be great on camera.
Neither Dara, Xavier nor, apparently, Mr. Leonard is exactly sure what opportunities Djibouti will provide. In a book without a powerhouse plot but with plenty of the old familiar crackle, Mr. Leonard simply flies his principals to this exotic spot and then imagines which other opportunists might be drawn to the place. He hits pay dirt with a noisily ostentatious Texan named Billy Wynn, who can count a big boat, an elephant gun and a model named Helene among his favorite possessions. Helene, this book’s funniest character, is willing to sail around the world with Billy on the off chance that he will marry her and write her into his will.
The pirates’ paradise of this novel turns out to be a lot more civilized than it sounds. For one thing, the pirate kingpins are a gentlemanly lot, what with their European pretensions and large sums of discretionary income. Dara has the gift of charming these people while filming them covertly for possible use in her magnum opus. She gets to know the courtly Idris, whose day job as a pirate leader does nothing to diminish his skills as a debonair party host, and Ari Ahmed Sheikh Bakar, a Saudi diplomat who has done his best to anglicize his name into “Harry.” Then Dara goes back to the boat that she and Xavier have rented and tries to figure out what she has captured on camera and what, exactly, is going on.
“Xavier LeBo believed was he 10 years younger, they’d be letting good times roll all over this boat,” Mr. Leonard writes of the book’s never-say-die hero. But Xavier’s dealings with Dara are professional, at least until he goes and purchases something called horny goat weed from a local merchant. Mostly, the two engage in a nonstop debate as to what kind of film Dara ought to make. What soon becomes clear to both of them is that the idea of Somali pirates as misunderstood underdogs is not going to fly. The hijacking of a tanker filled with liquid natural gas is one good reason to think that this region is getting ready to explode.
Mr. Leonard is on familiar turf when it comes to the pirates’ punk aspirations to live large. (Xavier’s explanation of what the pirates do: “They on the sauce gettin millions for their ransom notes.”) And he’s great with eccentricities, particularly Billy’s, once Billy starts reminding Helene of the Sterling Hayden character in “Dr. Strangelove.” But “Djibouti” has links to serious business that the book can’t just take lightly. Real events, like the 2009 attack by Somali pirates on the Maersk Alabama and rescue of Captain Richard Phillips by United States Navy seals, are used to lend gravitas to the novel’s exotic setting.
Mr. Leonard also allows the shadow of terrorism to loom. He creates a character who has an Arab’s name, Jama Raisuli, but an American’s rap sheet and criminal record. And he derives most of his suspense this time from the question of how dangerous Jama will be. In a novel not otherwise overly concerned with plot, there is drama attached to whether Jama’s real name can be found. If he turns out to be a real American-born jihadi, he may be worth serious reward money from the American government. But characters in “Djibouti” who get too inquisitive about Jama’s identity have a way of winding up dead.
How does Dara’s filmmaking figure in all this? Perhaps autobiographically, since it lets Mr. Leonard regularly step back to contemplate the storytelling process. We watch Dara and Xavier talk over the material they’ve collected and the different ways they might put it together. Are they making a documentary? Should they turn it into a drama? Are there scenes they need to boost artificially or does the truth speak for itself? The 85-year-old birthday boy already has the how-to manual “10 Rules of Writing” to his credit, but he delivers a little more literary advice here by demonstrating how these filmmakers work. It’s simple: Ask the right questions. Then come up with the right answers.
A NOTE ON “DJIBOUTI” by Bill Breakstone,
October 20, 2010
My first introduction to the novels of Elmore Leonard came when my neighbor and I exchanged birthday gifts many years ago. John and I shared the same birth-date, January 27th, along with Mozart. My gift to him was a recording of two Mozart piano concerti; John’s present for me was an Elmore Leonard novel. I can’t remember which one it was, but I totally agreed with him that this writer was “hip!” That must have been twenty years ago. Of course, Leonard’s writings go back much farther than that. His first novels were all about the “Wild West,” the most famous of which was “Hombre.” Who will ever forget that movie with the young Paul Newman in the title role?
Starting with his 11th novel, Mr. Majestyk, Leonard shifted gears, focusing on crime stories, with casts of the most outrageous characters one could imagine. Two were made into movies, really bad movies—“Get Shorty” and “Be Cool.” If these two duds turn off potential Leonard readers, they are missing out on some of the most enjoyable reading in the fiction library. Among the most memorable, and laughable of these tales, are: “Freaky Deaky”; “Maximum Bob”; “Cuba Libra”; “Tishomingo Blues”; and “Mr. Paradise”.
This latest novel, “Djibouti,” is as good as any of Leonard’s previous output. As Janet Maslin writes in her review, the author is a national treasure. The book is just shy of 300 pages, but it reads like lightening. Another one you just cannot put down.
If you’ve never read any of Leonard’s novels, and it’s amazing how many readers I run into who have not, this is not a bad one to start with. Enjoy!
Monday, October 11, 2010
BOOK REVIEW--ANSEL ADAMS IN THE NATIONAL PARKS
Edited by Andrea G. Stillman
Reviewed by Bill Breakstone, October 11, 2010
I became aware of this new collection of Ansel Adams’ photographs through the newsletter published by the U. S. Forest Service’s National Parks Magazine. The famous photographer needs no introduction to anyone interested in nature or fine photography. This volume contains many images heretofore unpublished, and accompanying narratives that are pertinent to his art and his life.
Being a lover of both nature, especially the National Parks and his beloved Sierra Nevada, and photography, I could not resist pre-ordering this book a month ago. It arrived this afternoon, and I spent a good two hours perusing the first 183 pages of this 344-page volume. All the photographs are black and white, and under the supervision of the Ansel Adams Publishing Trust, are superb reproductions.
On these pages are exhibited the grandeur of the natural environment, captured by one of the greatest photographers and naturalists who ever lived. Being a California native, Adams was drawn to the Sierra Nevada from a very early age, and that high country became a love of his life that lasted until his death in 1984. He had an innate sense of photographic composition, which, combined with his love of natural elements, resulted in images that were and remain unique.
Although the Sierra was closest to his heart, he travelled throughout North America and captured images of almost all our national parks and monuments. The text reveals that the skills he possessed were not only behind the lens of a camera, but equally important, in his photographic studio, where he would spend hours insuring that darkroom exposures of his negatives were just right. How I wish that I possessed original prints of those negatives. I will have to settle for several fine reproductions that I purchased from his gallery in Yosemite this past August, and now hang in one of my galleries at home.
The book is published by Little, Brown and Company, Adams’ official and only authorized publisher. I ordered it through Barnes & Noble on-line, at an amazingly affordable price of $27.00, a 33% discount from its advertised cost of $40.00. Even at that price, the volume is an astounding value, and belongs on the bookshelf of any nature lover.
Reviewed by Bill Breakstone, October 11, 2010
I became aware of this new collection of Ansel Adams’ photographs through the newsletter published by the U. S. Forest Service’s National Parks Magazine. The famous photographer needs no introduction to anyone interested in nature or fine photography. This volume contains many images heretofore unpublished, and accompanying narratives that are pertinent to his art and his life.
Being a lover of both nature, especially the National Parks and his beloved Sierra Nevada, and photography, I could not resist pre-ordering this book a month ago. It arrived this afternoon, and I spent a good two hours perusing the first 183 pages of this 344-page volume. All the photographs are black and white, and under the supervision of the Ansel Adams Publishing Trust, are superb reproductions.
On these pages are exhibited the grandeur of the natural environment, captured by one of the greatest photographers and naturalists who ever lived. Being a California native, Adams was drawn to the Sierra Nevada from a very early age, and that high country became a love of his life that lasted until his death in 1984. He had an innate sense of photographic composition, which, combined with his love of natural elements, resulted in images that were and remain unique.
Although the Sierra was closest to his heart, he travelled throughout North America and captured images of almost all our national parks and monuments. The text reveals that the skills he possessed were not only behind the lens of a camera, but equally important, in his photographic studio, where he would spend hours insuring that darkroom exposures of his negatives were just right. How I wish that I possessed original prints of those negatives. I will have to settle for several fine reproductions that I purchased from his gallery in Yosemite this past August, and now hang in one of my galleries at home.
The book is published by Little, Brown and Company, Adams’ official and only authorized publisher. I ordered it through Barnes & Noble on-line, at an amazingly affordable price of $27.00, a 33% discount from its advertised cost of $40.00. Even at that price, the volume is an astounding value, and belongs on the bookshelf of any nature lover.
MUSIC REVIEW--THE NEW YORK PHILHARMONIC ENSEMBLES
Merkin Concert Hall, October 10, 2010
Reviewed by Bill Breakstone
There are several chamber music ensembles that consist of principal players who are members of our major symphony orchestras. The Boston Symphony is sponsor of the Boston Symphony Chamber Players; the Philadelphia Orchestra features several chamber ensembles, most notably the Philadelphia Woodwind Quintet. And the New York Philharmonic offers a series of concerts performed by its principal players, under the title New York Philharmonic Ensembles. All these ensembles offer a distinct advantage: they allow groupings of instrumentalists beyond the reach of most chamber groups.
The New York Philharmonic Ensembles are composed of principal or assistant principal players from the Orchestra. All are first class musicians and teachers, faculty members of our leading music schools. Yesterday’s concert offered a perfect example of the instrumental variety that can be achieved. The program featured three works, two completely unfamiliar and one a masterpiece of the chamber literature.
The concert began with the Chants d’arriere-saison by Bernard Andres for harp and bassoon, composed in 1995, and performed by Nancy Allen, harp, and Judith LeClair, bassoon. Andres is a little-know French composer, born in 1941. This seven movement tonal composition varies in mood among its short movements. There are dissonances, but they are few in number and very brief. The overall impression is a leisurely tone painting featuring this unusual combination of instruments, especially the dark coloration of the bassoon. Both performers are among the finest practitioners on their instruments and are principals in the Orchestra. Their performance had an effortless quality belying the difficulty of the parts.
The program continued with another rarity, the Sextet in B-flat major, Op. 271 by Carl Reinecke, written in 1905. The work is scored for flute, oboe, clarinet, bassoon and two horns.
Reinecke was a German composer, born in 1824. He was a composer, teacher, administrator, pianist and conductor. He was known by Mendelssohn, Robert and Clara Schumann, and Liszt, whose daughter was later taught by Reinecke in Paris, and who spoke of ‘his beautiful, gentle legato and lyrical touch’. He was appointed as director of the Leipzig Conservatory in 1897, and transformed it into one of the most renowned teaching institutions in Europe. Among its students were Grieg, Muck, Sullivan and Weingartner. Reinecke considered it his responsibility to perpetuate the example of the Classical composers; he was very conscious of his position as a representative and guardian of tradition, and also made it his business to foster the music of the pre-Classical composers, particularly Bach.
In Leipzig, he was also the conductor of the Gewandhaus Orchestra until 1895, when Arthur Nikisch succeeded him. As a composer, Reinecke was best known for his numerous piano compositions, representing virtually every musical form of the time and, despite being influenced by Mendelssohn’s melodic style, was stylistically nearer to Schumann.
His Sextet is a late work, and is very Brahmsian in all respects. The opening Allegro moderato is written in true sonata allegro form, and contains a majestic first theme introduced by the first horn; the second movement is a lyrical Adagio molto with an up tempo trio section, featuring a very virtuosic flute part; the finale, marked Allegro moderato, is the briefest of the three movements and is in rondo form. The Philharmonic performers were flutist Mindy Kaufman, oboist Liang Wang, clarinetist Pascual Martinez Fortesa, bassoonist Kim Laskowski, and horns Philip Myers and R. Allen Spanjer. To these ears, the Sextet was a true gem, a complete surprise given its obscurity, and yet another example of how the chamber literature is replete with so many relatively unknown masterpieces.
The concert closed with an energetic and masterly performance of Antonin Dvorak’s Piano Quintet in A major, Op. 81, performed by Michelle Kim and Hae-Young Ham, violins, Robert Rinehart, viola, Ru-Pei Yeh, cello and guest artist Eric Huebner, piano. This masterpiece of the chamber repertoire is an audience favorite, and is often performed. This reading was as fine as any I’ve ever heard, and I’ve had the pleasure of listening to the Quintet on numerous concert programs, the last one at the Aspen Music Festival several years ago when the first violinist was Sylvia Rosenberg and the pianist Anton Nell. It was a delightful afternoon of chamber music, and I look forward to the remaining four programs with great anticipation.
Reviewed by Bill Breakstone
There are several chamber music ensembles that consist of principal players who are members of our major symphony orchestras. The Boston Symphony is sponsor of the Boston Symphony Chamber Players; the Philadelphia Orchestra features several chamber ensembles, most notably the Philadelphia Woodwind Quintet. And the New York Philharmonic offers a series of concerts performed by its principal players, under the title New York Philharmonic Ensembles. All these ensembles offer a distinct advantage: they allow groupings of instrumentalists beyond the reach of most chamber groups.
The New York Philharmonic Ensembles are composed of principal or assistant principal players from the Orchestra. All are first class musicians and teachers, faculty members of our leading music schools. Yesterday’s concert offered a perfect example of the instrumental variety that can be achieved. The program featured three works, two completely unfamiliar and one a masterpiece of the chamber literature.
The concert began with the Chants d’arriere-saison by Bernard Andres for harp and bassoon, composed in 1995, and performed by Nancy Allen, harp, and Judith LeClair, bassoon. Andres is a little-know French composer, born in 1941. This seven movement tonal composition varies in mood among its short movements. There are dissonances, but they are few in number and very brief. The overall impression is a leisurely tone painting featuring this unusual combination of instruments, especially the dark coloration of the bassoon. Both performers are among the finest practitioners on their instruments and are principals in the Orchestra. Their performance had an effortless quality belying the difficulty of the parts.
The program continued with another rarity, the Sextet in B-flat major, Op. 271 by Carl Reinecke, written in 1905. The work is scored for flute, oboe, clarinet, bassoon and two horns.
Reinecke was a German composer, born in 1824. He was a composer, teacher, administrator, pianist and conductor. He was known by Mendelssohn, Robert and Clara Schumann, and Liszt, whose daughter was later taught by Reinecke in Paris, and who spoke of ‘his beautiful, gentle legato and lyrical touch’. He was appointed as director of the Leipzig Conservatory in 1897, and transformed it into one of the most renowned teaching institutions in Europe. Among its students were Grieg, Muck, Sullivan and Weingartner. Reinecke considered it his responsibility to perpetuate the example of the Classical composers; he was very conscious of his position as a representative and guardian of tradition, and also made it his business to foster the music of the pre-Classical composers, particularly Bach.
In Leipzig, he was also the conductor of the Gewandhaus Orchestra until 1895, when Arthur Nikisch succeeded him. As a composer, Reinecke was best known for his numerous piano compositions, representing virtually every musical form of the time and, despite being influenced by Mendelssohn’s melodic style, was stylistically nearer to Schumann.
His Sextet is a late work, and is very Brahmsian in all respects. The opening Allegro moderato is written in true sonata allegro form, and contains a majestic first theme introduced by the first horn; the second movement is a lyrical Adagio molto with an up tempo trio section, featuring a very virtuosic flute part; the finale, marked Allegro moderato, is the briefest of the three movements and is in rondo form. The Philharmonic performers were flutist Mindy Kaufman, oboist Liang Wang, clarinetist Pascual Martinez Fortesa, bassoonist Kim Laskowski, and horns Philip Myers and R. Allen Spanjer. To these ears, the Sextet was a true gem, a complete surprise given its obscurity, and yet another example of how the chamber literature is replete with so many relatively unknown masterpieces.
The concert closed with an energetic and masterly performance of Antonin Dvorak’s Piano Quintet in A major, Op. 81, performed by Michelle Kim and Hae-Young Ham, violins, Robert Rinehart, viola, Ru-Pei Yeh, cello and guest artist Eric Huebner, piano. This masterpiece of the chamber repertoire is an audience favorite, and is often performed. This reading was as fine as any I’ve ever heard, and I’ve had the pleasure of listening to the Quintet on numerous concert programs, the last one at the Aspen Music Festival several years ago when the first violinist was Sylvia Rosenberg and the pianist Anton Nell. It was a delightful afternoon of chamber music, and I look forward to the remaining four programs with great anticipation.
Saturday, October 9, 2010
BOOK REVIEW--"APE HOUSE" by Sara Gruen
Reviewed by Bill Breakstone, October 9, 2010
There are four species of great apes in the world: all belonging to the taxonomic family Homindae: chimpanzees; bonobos; orangutans and gorillas. A fifth member of the species is the human being. These apes are our closest wild relatives. According to The Great Ape Trust, a scientific facility located in Des Moines, Iowa “all members of this family of apes share possibly more than 97% of their DNA with humans. The great apes have all been documented using tools, and communicating with amazing complexity. The great apes are found primarily in Central Africa with the exception of orangutans, which are native to the islands of Borneo and Sumatra in Asia. All of the great apes face serious threats and are all endangered, some critically endangered. Habit loss, climate change, infectious disease and illegal hunting for both meat and the live pet trade have combined to push these species to the brink of extinction. If we don’t act soon, we will lose our closest relatives forever.”
“If you know what a bonobo is, or can tell them apart from a chimpanzee, then you are one of a few very special people. . . . . . Chimpanzees and bonobos look very similar. But if you look closely, you’ll see that bonobos are a little smaller, with pink lips, black faces, and a very attractive hairstyle with long black hair neatly parted in the middle. The first two toes of bononbos have a little bit of webbing. While chimpanzees have low, loud voices, bonobos are very high pitched. Also, bonobo mothers have breasts that look a lot like humans.
But when you get to know bonobos, you’ll see they couldn’t be more different [than chimpanzees]. Like humans, chimpanzees have war. The males are in charge, and they can occasionally be very violent. Sometimes, they even kill each other. Bonobos do not kill each other. The females are in charge of the group and they seem to keep everyone’s temper under control with sexual activity. It doesn’t matter how old you are, or if you’re male or female—if you’re a bonobo, sex plays a big part in living together peacefully.”
Sara Gruen, author of the best-selling novel “Water for Elephants,” has written a fascinating thriller, Ape House, based upon the sub-species of great apes named bonobos. A group of eight of these apes is being studied in a facility at the University of Kansas. The conditions there are the best man can provide, and the care given them is thorough and loving. The focus of the study is the ape’s cognitive communication skills. Though their vocal chords do not allow the apes to use the human language, they actually do speak and interact, not only with each other, but humans as well.
Into this scene come other humans set on exploiting the animals for profit. The apes are kidnapped and moved to another, far less kind environment, where they become subjects for mass entertainment. A scientist from the Kansas facility and a journalist for a national magazine come to the rescue of the brood in a year-long effort to return them to a suitable scientific facility for care and further study. Sara Gruen weaves an exciting tale filled with great character development and scientific knowledge. The book is a real page turner if ever there was one. It is based on fact, and is well-documented in an interesting postlogue. The reader will cheer the rescuers on and be fascinated with the abilities of the apes. All in all, a most enjoyable read.
There are four species of great apes in the world: all belonging to the taxonomic family Homindae: chimpanzees; bonobos; orangutans and gorillas. A fifth member of the species is the human being. These apes are our closest wild relatives. According to The Great Ape Trust, a scientific facility located in Des Moines, Iowa “all members of this family of apes share possibly more than 97% of their DNA with humans. The great apes have all been documented using tools, and communicating with amazing complexity. The great apes are found primarily in Central Africa with the exception of orangutans, which are native to the islands of Borneo and Sumatra in Asia. All of the great apes face serious threats and are all endangered, some critically endangered. Habit loss, climate change, infectious disease and illegal hunting for both meat and the live pet trade have combined to push these species to the brink of extinction. If we don’t act soon, we will lose our closest relatives forever.”
“If you know what a bonobo is, or can tell them apart from a chimpanzee, then you are one of a few very special people. . . . . . Chimpanzees and bonobos look very similar. But if you look closely, you’ll see that bonobos are a little smaller, with pink lips, black faces, and a very attractive hairstyle with long black hair neatly parted in the middle. The first two toes of bononbos have a little bit of webbing. While chimpanzees have low, loud voices, bonobos are very high pitched. Also, bonobo mothers have breasts that look a lot like humans.
But when you get to know bonobos, you’ll see they couldn’t be more different [than chimpanzees]. Like humans, chimpanzees have war. The males are in charge, and they can occasionally be very violent. Sometimes, they even kill each other. Bonobos do not kill each other. The females are in charge of the group and they seem to keep everyone’s temper under control with sexual activity. It doesn’t matter how old you are, or if you’re male or female—if you’re a bonobo, sex plays a big part in living together peacefully.”
Sara Gruen, author of the best-selling novel “Water for Elephants,” has written a fascinating thriller, Ape House, based upon the sub-species of great apes named bonobos. A group of eight of these apes is being studied in a facility at the University of Kansas. The conditions there are the best man can provide, and the care given them is thorough and loving. The focus of the study is the ape’s cognitive communication skills. Though their vocal chords do not allow the apes to use the human language, they actually do speak and interact, not only with each other, but humans as well.
Into this scene come other humans set on exploiting the animals for profit. The apes are kidnapped and moved to another, far less kind environment, where they become subjects for mass entertainment. A scientist from the Kansas facility and a journalist for a national magazine come to the rescue of the brood in a year-long effort to return them to a suitable scientific facility for care and further study. Sara Gruen weaves an exciting tale filled with great character development and scientific knowledge. The book is a real page turner if ever there was one. It is based on fact, and is well-documented in an interesting postlogue. The reader will cheer the rescuers on and be fascinated with the abilities of the apes. All in all, a most enjoyable read.
Sunday, October 3, 2010
BOOK REVIEW--AFTERSHOCK by Robert Reich
Reviewed by Bill Breakstone, October 2, 2010
THE AUTHOR
Robert B. Reich is Chancellor’s Professor of Public Policy at the University of California, Berkeley. He served as Secretary of Labor under President Bill Clinton, and has written twelve books. His articles have appeared in the New Yorker, the Atlantic, the New York Times, the Washington Post, and the Wall Street Journal. He is also co-founding editor of The American Prospect magazine and provides weekly commentaries on public radio’s Marketplace, as well as appearing regularly on MSNBC, CNBC, CNN and NPR. In 2003, he was awarded the prestigious Vaclav Havel Foundation Prize for pioneering work in economic and social thought. He holds an MBA and PhD in economics from Harvard University, where he taught for many years prior to and after his career in public service.
His most recent book, Aftershock, is both an economic and sociological treatise, brief in length but concise, penetrating and filled with, from this reviewer’s point of view, insightful commentary on our present economic malaise and some of its sources. Times Op-Ed columnist Bob Herbert quoted from it extensively in one of his pieces early last week, and the book was reviewed yesterday in The New York Times Sunday Book Review Section, to less than outright enthusiastic support, by Sebastian Mallaby, a Senior Fellow at the Council on Foreign Relations. This review, though laudatory in part, did no justice to what I consider to be an important contribution to the present economic literature.
As his fellow colleagues in economics such as Ben Bernancke, Joseph Steiglitz, Paul Krugman, Nouriel Roubini and others have closely studied and analyzed public policy in the aftermath of the Great Depression, so has Reich. However, this author brings a fresh perspective to the table, and that is one of a sociologist.
In addition, he focuses in part on the work of Merriman Eccles, who served as Federal Reserve Board Chairman from November 1934 through April of 1948, under Presidents Franklin Roosevelt and Harry Truman. As Reich states: “While Eccles is largely forgotten today, he offered critical insight into the great pendulum of American capitalism. His analysis of the underlying economic stresses of the Great Depression is extraordinarily, even eerily, relevant to the Crash of 2008. It also offers, if not a blueprint for the future, at least a suggestion of what to expect of the coming years.”
DEALING WITH THE GREAT DEPRESSION
Merriman Eccles, a conservative banker by nature, was a reluctant adherent to Keynesian economic thought. In the aftermath of the Depression, Reich relates, “economists and the leaders of business and Wall Street sought to reassure the country that the market would correct itself automatically, and that the government’s only responsibility was to balance the federal budget.” Sound familiar? “Lower prices and interest rates, they said, would inevitably ‘lure natural new investments by men who still had money and credit and whose revived activity would produce an upswing in the economy.’ Entrepreneurs would put their money into new technologies that would lead the way to prosperity. But Eccles wondered why anyone would invest when the economy was so disabled.”
The answer, so said our conservative brethren, was that economic downturns were a natural phenomenon, part of the economic cycle, a Darwinian view that here, as in Nature, the fittest would survive and the economically strong would move on. This trend of thought harked back to the works of Austrian economist Joseph Schumpeter, who Roubini states in his excellent recent book Crisis Economics “developed a powerful theory of entrepreneurship that is often distilled down to a pair of powerful words: creative destruction. In Schumpeter’s worldview, capitalism consists of waves of innovation in prosperous times, followed by a brutal winnowing in times of depression. This winnowing is to be neither avoided nor mineralized. It is a painful but positive adjustment, whose survivors will create a new economic order.”
Reich goes on: “They further explained that we were in the lean years because we had been spendthrifts and wastrels in the roaring twenties. We had wasted what we earned instead of saving it. We had enormously inflated values. But in time we would sober up and the economy would right itself through the action of men who had been prudent and thrifty all along, who had saved their money and at the right time would reinvest it in new production. Then the famine would end.” Now keep in mind that we are here talking about the Great Depression, not the Great Recession. Yet the parallels could not be more vivid.
In any case, as Reich recounts, “Eccles thought this was nonsense.” As a leading banker in the national arena, Eccles testified before the Senate Finance Committee in February 1933, just weeks before Roosevelt was sworn in as president. “Others had advised the Committee to reduce the national debt and balance the federal budget, but Eccles had different advice. Eccles told the senators that the government had to go deeper into debt in order to offset the lack of spending by consumers and businesses. Eccles went further. He advised the senators on ways to get more money into the hands of the beleaguered middle class. He offered a precise program designed ‘to bring about by Government action, an increase of purchasing power on the part of all the people.’ ” It should be noted that this advice was given three years before John Maynard Keynes’ similar theories were first published in his famous General Theory of Employment, Interest and Money.
Eccles biggest and most important insight was this: the major cause of the Depression had nothing to do with excessive spending during the Roaring Twenties. It was, rather, the vast accumulation of income in the hands of the wealthiest Americans, which siphoned purchasing power away from most of the rest. “As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth to provide men with buying power equal to the amount of goods and services offered by the nation’s economic machinery. Instead of achieving that kind of distribution, a giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth.”
Without adequate financial resources, consumers had to borrow to fund purchases. The borrowing took the form of mortgage debt on homes and commercial buildings, consumer installment debt, and foreign debt. Eccles understood that this debt bubble was bound to burst. And when it did, consumer spending would shrink. And so it did. Debtors were then forced to curtail their consumption, which naturally reduced the demand for goods and services of all kinds and brought higher unemployment. Unemployment further decreased consumption, which further increased unemployment. For Eccles, widening inequality was the major culprit.
Eccles realized back in 1933, and Reich and other economists are repeating now in the wake of another severe economic downturn, that recovery will be dependant on increasing aggregate demand, and that will be impossible to accomplish without the participation of middle class Americans. The inequality that Eccles saw regarding income distribution in 1930 is being repeated today, and that inequality must be re-balanced.
DECLINE OF THE AMERICAN MIDDLE CLASS
Reich goes on to detail the decline of middle class purchasing power over the period from roughly 1975 to the present. The New York Times Bob Herbert, in that Op-Ed piece, summarized the present plight: “Analysts have tracked the increasing share of national income that has gone to the top 1 percent of earners since the 1970s, when their share was 8 percent to 9 percent. In the 1980s, it rose to 10 percent to 14 percent. In the late-’90s, it was 15 percent to 19 percent. In 2005, it passed 21 percent. By 2007, the last year for which complete data are available, the richest 1 percent were taking more than 23 percent of all income. The richest one-tenth of 1 percent, representing 130,000 households, took in more than 11 percent of total income in 2007. That does not leave enough spending power with the rest of the population to sustain a flourishing economy. This is a point emphasized in “Aftershock.” Mr. Reich, a former labor secretary in the Clinton administration, writes: ‘The wages of the typical American hardly increased in the three decades leading up to the Crash of 2008, considering inflation. In the 2000s, they actually dropped. A male worker earning the median wage in 2007 earned less than the median wage, adjusted for inflation, of a male worker 30 years earlier.’ A typical son, in other words, is earning less than his dad did at the same age. This is what has happened with ordinary workers as the wealth at the top has soared into the stratosphere.”
Reich continues, drawing a parallel between government action to alleviate the effects of the Great Depression and current attempts to create a sustainable recovery after the Great Recession. Government policies in the wake of the Depression led to a new economic order, including many of the programs that Marriner Eccles proposed on the eve of Roosevelt’s inauguration—social insurance, improvements in the nation’s infrastructure, and improved educational opportunities, including an expansion of public universities, all initially financed by government borrowing. They made the American middle class vastly more secure, prosperous and productive.
“The Great Recession that started at the end of 2007, however, has produced no new economic order. Instead, the government stepped in quickly with enough money to contain the downward slide. . . . . . But little was done to reduce the underlying, cumulative problem of widening inequality—Eccles’s insight into what caused the Great Depression. After the stimulus and loose money wear off, therefore, it is unlikely that growth can be sustained. . . . . . This will constitute the Great Recession’s aftershock. From it will emerge either a political backlash—against trade, immigration, foreign investment, big business, Wall Street, and government itself—or large-scale reforms that reverse the underlying trend.”
We are already witnessing the former—the Obama Administration is suffering greatly in the polls as the mid-terms approach. Incumbents have fallen by the wayside in droves, Congress may fall into the hands of the opposition party, the Tea Party movement is attracting more and more followers, there is outrage among congressmen over China’s currency manipulation, Wall Street and big business have become targets of voter anger. On the other hand, there are no signs of the type of reforms that will aid the vast majority of Americans. And the clock is ticking. Time is running out. Unemployment remains high, with little signs that it has peaked. Although American corporations are making record profits once again, GDP is stagnant at best.
The middle chapters of “Aftershock” trace economic policy from the end of the Depression and World War II, through that period Reich names The Great Prosperity, encompassing the years 1947 through 1975, and finally the three-decade long period from 1980 through the current crisis. It was during those years that economic policy was reversed through deregulation, privatization, reduced public services, reduced aid to higher education, restriction on unemployment benefits, and reduced taxes, especially for the wealthiest Americans. At the same time, income taxes were greatly increased for the less advantaged among us, sales and payroll taxes were boosted, both actions taking a bigger chunk out of the middle class and poor.
“Significantly, Washington deregulated Wall Street while insuring it against major losses, in doing so turning finance—which until then had been the servant of American industry—into its master, demanding short-term profits over long-term growth, and raking in an ever larger portion of the nation’s profit.” In essence, the basic bargain between American business on the one hand and the public welfare on the other was broken.
FROM THE GREAT PROSPERITY TO THE GREAT RECESSION
Reich rhetorically asks how the pendulum could have swung back in the opposite direction of social progress. He proposes three answers:
First, there grew a consensus that there was simply no need for government intervention. The proof lay in the great expansion of the 1980s; the long recovery of the 1990s; the wildly exuberant bull market of the era. And Reich states: “This argument is bunk. It equates the stock market with the economy, and turns a blind eye to the revocation of the basic bargain. The argument does not acknowledge the consequences for an economy when the middle class lacks the means to buy what it produces.”
Second, the reversal could be viewed as the inevitable result of declining confidence in government. “The tax revolts that thundered across America starting in the late 1970s were not so much ideological revolts against government . . . . . as against paying more taxes on incomes that had fattened. When government services consequently deteriorated and government deficits exploded, the public’s cynicism was confirmed.
Third, the more important cause of the pendulum reversal had to do with power. People with great economic power have an undue influence in making the rules of the economic game. “The rich and powerful also have substantial influence in conditioning the attitude taken by people as a whole toward rules. “They generously finance think tanks, books, media, and ads designed to persuade Americans that free markets always know best. Ronald Reagan, Margaret Thatcher, Alan Greenspan, Milton Friedman, and other apostles of free-market dogma reiterated a simple story: The choice was between free market and big government. Government was the problem. Free markets were the solution.”
“But how could the public have been so gullible as to accept this story? After all, America had gone through a Great Depression, suffering the consequences of an unfettered market and unconstrained greed. . . . . . America had also experienced the Great Prosperity, which depended so obviously on public improvements, safety nets, and public investment. Now that the basic bargain was coming apart once again, the need for them was even greater.”
One way to understand the paradox is loss of generational memory. . . . . . . When the latest generation became adults (from around the end of the 1970s onward), all they recalled was the failure of government and the success of the market. This made them particularly susceptible to the seductive rants of the free marketeers, who wanted to blame government for the economy’s failings. Moreover, they had no clear memory of a society whose members were all in it together. They witnessed instead an economy in which, increasingly, each of us was on his own.”
Personally, this writer has an alternative explanation: government had simply over-reached. The tide turned against the Great Society because it had gone too far. Unions had become too powerful. Handouts became too many. The social net became too wide. When civil riots broke out, public revulsion set in. Then, along came “Ronnie.” The new conservatives from the South and others flocked to him and his apostles with their simplistic solutions: decrease the role of government; deregulate industry and the markets; bust the unions. And the public bought it!
The middle class struggled on. “Starting in the late 1970s, the American center honed three coping mechanisms, allowing it to behave as though it was still taking home the same share of total income as it had during the Great Prosperity, and to spend as if nothing substantially had changed.”
Number 1: Women moved into paid work in greater and greater numbers;
Number 2: Everyone started working longer hours. What families failed to get in wage increases, they made up for in work increases;
Number 3: Middle class workers drew down on savings and borrowed up to the hilt.
After exhausting the first two coping mechanisms, the only way Americans could keep consuming as before was to save less and go deeper into debt. Americans borrowed from everywhere—credit card debt exploded; student loans increased dramatically; mortgage debt increased exponentially; auto loans were easy to obtain. “And, as housing values continued to rise, homes doubled as ATMs. Consumers refinanced their homes with even larger mortgages and used their homes as collateral for additional loans. As long as housing prices continued to rise, it seemed a painless way to get money. Between 2002 and 2007, American households extracted $2.3 trillion from their houses, putting themselves ever more deeply into the hole.” All these borrowings were aided by the Federal Reserve’s easy money policy, as Greenspan and the Fed did everything they could on the monetary side to prolong economic prosperity from 2000 through the onset of the Great Recession, when the credit and housing bubbles burst. When that happened, the last of the coping mechanisms disappeared.
Paul Volker thought the underlying cause of the Great Recession was that Americans had been living beyond their means. But Laura Tyson, the former chair of Bill Clinton’s Council of Economic Advisors, disagreed: “The real problem was their means hadn’t been growing.”
Reich comments: “The fundamental economic challenge ahead is to lift the means of middle-class Americans and reconstitute the basic bargain linking wages to overall improvements—providing the vast American middle class with a share of economic gains sufficient to allow them to purchase more of what the economy can produce.”
“The Great Recession accelerated the structural change in the economy that began in the late 1970s. More companies have found means of cutting their payrolls for good. Consequently, large numbers of Americans will not be rehired unless they are willing to settle for lower wages and fewer benefits. . . . . . . Nor will households be able to borrow as before. . . . . . Housing values will not regain their speculative peak for a long time, which means homeowners cannot use their homes as sources of easy money through home equity loans and refinancing deals. . . . . . . Americans are paying off, paying down, or walking away from trillions of dollars of outstanding loans—in a vast “deleveraging” of household finances that is likely to continue for years. Even as the economy returns, people won’t want to be burdened by much additional debt.”
“All this means relatively less middle-class consumption than before the Great Recession. . . . . . . Where will sufficient demand come from without a buoyant American middle class? . . . . . . Government can fill the gap for a time, but government cannot continue indefinitely to stimulate the economy with deficit spending or by printing money.”
“It should be apparent that there will be no return to ‘normal,’ because the old normal got us into our present predicament and can’t possibly get us out. So what comes next?
“Economic gains are so meager that the wealthy fight harder to maintain their share. The middle class, already burdened by high unemployment and flat or dropping wages, fights ever more furiously against any additional burdens, such as tax increases to support public schools or price increases resulting from regulations limiting carbon emissions. It’s a vicious cycle.”
The question, then, is how to move from a vicious cycle to a virtuous one—how to restore the widespread prosperity needed for growth, and how to get the growth necessary for widespread prosperity. The challenge is both economic and political. A fundamentally new economy is required—the next stage of capitalism. But how will we get there? And what will it look like when we do?”
Leaders throughout history have learned the hard way how inextricably bound together are politics and economics. Just look at what fate bestowed on many of our presidents over the past 35 years. Jimmy Carter lost his reelection bid because the economy had been suffering double-digit inflation. George H. W. Bush suffered the same result when Alan Greenspan raised interest rates to ward off inflation, which also raised unemployment. As James Carville said: “It’s the economy, stupid.” George W. Bush eventually took the blame for the latest economic catastrophe, and that blame also spilled over to John McCain. “All that can be said with confidence is that jobs and the economy are almost always at the forefront of voters’ minds.”
Reich moves on to examine the source of voter dissatisfaction and anger. He concludes: “Given the chance, most members of the middle class want to join the ranks of the rich and gain all the perks that come with great wealth. The real frustration, and the final straw, will come if and when they no longer feel they have a chance because the dice are loaded against them.”
That is happening right now. Presidents Bush and Obama may have saved America, and the world, from falling off the economic cliff. However, they did so partly by favoring the rich, the powerful, and the most advantaged among us. Namely, the banks, the large corporations and Wall Street. “The giant bailout of Wall Street [and corporate America] was sold to the American people as a way to save Main Street and jobs. But it appeared to do neither. . . . . . . Little or nothing trickled down to Main Street. Small business could not get loans. Few homeowners were able to renegotiate their mortgages, and large numbers lost their homes. Wall Street lobbied successfully against a proposal to allow homeowners to declare bankruptcy rather than forfeit their homes. The proposal would have given distressed homeowners more bargaining leverage with the banks that owned their mortgages. . . . . . . The whole thing began to look like a giant insider deal.”
TWO PATHS FORWARD
Reich believes there are two alternatives available to address the diminished role and opportunities of middle-class Americans, and, in turn, the future health of the American economy. The first way forward is illustrated by the following hypothetical scenario that Reich lays out:
NOVEMBER 3, 2020
The newly formed Independence Party pulls enough votes away from both the Republican and Democratic candidates to give its own candidate, Margaret Jones, a plurality of votes, an electoral college victory, and the presidency. A significant number of Independence Party members have also taken seats away from Democrats and Republicans in Congress.
The platform of the Independence Party, as well as its message, is clear and uncompromising: zero tolerance of illegal immigrants; a freeze on legal immigration from Latin America, Africa, and Asia; increased tariffs on all imports; a ban on American companies moving their operations to another country or outsourcing abroad; a prohibition on foreign “sovereign wealth funds” investing in the United States. America will withdraw from the United Nations, the World Trade Organization, the World Bank, and the International Monetary Fund; end all “involvements” in foreign countries; refuse to pay any more interest on our debt to China, essentially defaulting on it; and stop trading with China unless China freely floats its currency.
Profitable companies will be prohibited from laying off workers and cutting payrolls. The federal budget must always be balanced. The Federal Reserve will be abolished.
Banks will be allowed only to take deposits and make loans. Investment banking will be prohibited. Anyone found to have engaged in insider trading, stock manipulation, or securities fraud will face imprisonment for no less than ten years.
Finally, but not least: In order for the government to balance the budget, provide for national defense, guard our borders, and pay down the national debt, all personal incomes will be capped at %500,000 per year; earnings in excess of that amount will be taxed at 100 percent. Incomes above $250,000 are to be taxed at 80 percent. The capital gains rate will be 80 percent. All net worth above $100,000 will be subject to a 2 percent annual wealth tax. Any American found to be sheltering his income in a foreign nation will be stripped of his U.S. citizenship.
In her victory speech, president-elect Jones is defiant:
“My fellow Americans: You have voted to reclaim America. Voted to take it back from big government, big business, and big finance. To take it back from the politicians who would rob us of our freedoms, from foreigners who rob us of our jobs, from the rich who have no loyalty to this nation, and from immigrants who live off our hard work. (Wild applause.) We are reclaiming America from the elites who have rigged the system to their benefit, from the money manipulators on Wall Street and the greed masters in corporate executive suites, from the influence peddlers and pork peddlers in Washington—from all the privileged and the powerful who have conspired against us. (Wild applause and cheers.) They will no longer sell Americans out to global money and pad their nests by taking away our jobs and livelihoods! (Wild applause and cheers.) This is our nation, now! (Wild applause and cheers that continue to build.) A nation of good jobs and good wages for anyone willing to work hard! Our nation! America for Americans! (Thunderous applause.)
Her opponents concession speeches are bitter. George P. Bush, the Republican candidate, is irate. “I cannot stand before you and congratulate my opponent, who based her entire campaign on fear and resentment,” he tells his supporters.
Chelsea Clinton, the Democratic candidate, is indignant. “I would very much like to offer Margaret Jones my best wishes for the future. But I have to be honest: She and the Independence Party pose a grave danger to this nation.”
Foreign leaders try to be respectful but cannot hide their anxieties. The British prime minister issues a terse statement “wishing Americans well.” The German chancellor offers “condolences,” but the German ambassador to the United States insists the chancellor’s remark has been mistranslated and is best understood as “commiserations.” The president of China appears before news cameras and says, simply, “The United States has committed a grave error.”
The presidents of the U.S. Chamber of Commerce and the Business Roundtable issue a joint statement warning that Margaret Jones and the Independence Party “will push America into another Great Depression.” The CEOs of the four remaining giant Wall Street firms predict economic collapse.
On November 4, the day after Election Day, the Dow Jones Industrial Average drops 50 percent in an unprecedented volume of trading. The dollar plummets 30 percent against a weighted average of other currencies. Wall Street is in a panic. Banks close. Business leaders predict economic calamity. Mainstream pollsters, pundits, and political consultants fill the airways with expressions of shock and horror. Over and over again, they ask: How could this have happened?
The second alternative Reich proposes is to face head-on the currently existing inequities and remedy them through legislative and executive actions. His specific suggestions are enumerated at the end of this review.
Reich next examines the power and influence of lobbyists, and here, here he is getting to one of the underlying systemic roots the dilemma. No one will deny the corrupting influence of money. It drove, in part, the bank rescues, and the “people” were left behind holding the bag. It funds politicians’ campaigns, who then cow tow to contributors’ interests rather than the public welfare they swore to protect. Thus, the cause of the problem is political, and that will require a political solution. If our elected officials didn’t need so much money, their vulnerability to its corrupting influence would diminish. Could the answer lie in having fewer elections at more infrequent intervals? Why do members of the House of Representatives need to face reelection every two years, while across the aisle, senators serve six year terms. It’s obscene! Why do presidents have to run for reelection every four years? It severely limits their effectiveness as leaders—they in essence have a two-year period after being elected to put their programs to work, and then spend the following two years running for reelection. Why not, as many have suggested, have a six-year term for our presidents?
Both of these changes would encounter fierce resistance from exactly those whose undue influence such changes would address, i.e., the lobbying industry itself. But it’s a fight worth taking on. Reich does not advocate anything in this regard, and that is the first fault I find with his work. The following is the second:
Reich proposes nine steps to restore the balance between middle-class opportunities and the rich and powerful—restore what he refers to as the “bargain”—that intellectual or ideological agreement giving workers a proportionate share of the fruits of economic growth. I will simply state his proposals without elaboration.
First, a reverse income tax. Instead of money being withheld from workers paychecks to pay taxes to the government, money would be added to their paychecks by the government, according to a graduated or progressive formula; second, a carbon tax; third, higher marginal tax rates on the wealthy—up to 55%--and elimination of the capital gains exemption; fourth, a reemployment system rather than an unemployment system, including wage insurance; fifth, school vouchers based on family income; sixth, college loans linked to subsequent earnings, to be repaid during the first ten years of a student’s gainful employment; seventh, Medicare for all; eighth, a sizeable increase in public goods such as transportation, public parks, recreational facilities, public museums and libraries, with free public transportation, including high speed rail; and, finally, the removal of money from politics.
Reich maintains “This is not an unrealistic agenda. It is practical and doable.”
It is said that one of the dangers of an academic life can be isolation from reality. Living in the ivory tower of academia can blur a person’s reasoning powers. If Reich thinks his nine-step program is doable, he is deceiving himself. To end such a brilliant study of our economic and political systems with these kinds of proposals is a true shame.
CONCLUSIONS
I have seldom read a book as thought-provoking as this one. I regularly read 25 pages or so before bedtime, and found myself awakening hours later and writing notes to myself about one insight or another that Reich had brought to mind. I have also found the many quandaries that the author describes to be deeply troubling, for no one seems to be addressing the underlying causes of our economic malaise. Rather, all things seem to be pointing to a breakdown in effective government, in our national leaders’ ability to overcome political rancor in order to solve our nation’s problems.
Is there a basic flaw in our political system? Our founding fathers created a lasting document over 240 years ago, our Constitution. It has served the nation well for a long, long time. However, those founders never conceived that effective leadership would be so compromised by political parties totally unwilling to cooperate and put the common good ahead of partisanship and the striving for power. In fact, the party system did not even exist at the time of the Constitutional Convention. But the Signers did bequeath to future generations the ability to modernize the document through the passage of Constitutional Amendments. It is in that direction that we must proceed. As mentioned above, the contentious effect of our party system must be corrected, and the only way this can be accomplished is to reduce party and lobbying influences; reduce the predominance of special interests, and put the reins of government back in the hands of our elected officials, allowing them to represent both their constituents and their own conscience.
THE AUTHOR
Robert B. Reich is Chancellor’s Professor of Public Policy at the University of California, Berkeley. He served as Secretary of Labor under President Bill Clinton, and has written twelve books. His articles have appeared in the New Yorker, the Atlantic, the New York Times, the Washington Post, and the Wall Street Journal. He is also co-founding editor of The American Prospect magazine and provides weekly commentaries on public radio’s Marketplace, as well as appearing regularly on MSNBC, CNBC, CNN and NPR. In 2003, he was awarded the prestigious Vaclav Havel Foundation Prize for pioneering work in economic and social thought. He holds an MBA and PhD in economics from Harvard University, where he taught for many years prior to and after his career in public service.
His most recent book, Aftershock, is both an economic and sociological treatise, brief in length but concise, penetrating and filled with, from this reviewer’s point of view, insightful commentary on our present economic malaise and some of its sources. Times Op-Ed columnist Bob Herbert quoted from it extensively in one of his pieces early last week, and the book was reviewed yesterday in The New York Times Sunday Book Review Section, to less than outright enthusiastic support, by Sebastian Mallaby, a Senior Fellow at the Council on Foreign Relations. This review, though laudatory in part, did no justice to what I consider to be an important contribution to the present economic literature.
As his fellow colleagues in economics such as Ben Bernancke, Joseph Steiglitz, Paul Krugman, Nouriel Roubini and others have closely studied and analyzed public policy in the aftermath of the Great Depression, so has Reich. However, this author brings a fresh perspective to the table, and that is one of a sociologist.
In addition, he focuses in part on the work of Merriman Eccles, who served as Federal Reserve Board Chairman from November 1934 through April of 1948, under Presidents Franklin Roosevelt and Harry Truman. As Reich states: “While Eccles is largely forgotten today, he offered critical insight into the great pendulum of American capitalism. His analysis of the underlying economic stresses of the Great Depression is extraordinarily, even eerily, relevant to the Crash of 2008. It also offers, if not a blueprint for the future, at least a suggestion of what to expect of the coming years.”
DEALING WITH THE GREAT DEPRESSION
Merriman Eccles, a conservative banker by nature, was a reluctant adherent to Keynesian economic thought. In the aftermath of the Depression, Reich relates, “economists and the leaders of business and Wall Street sought to reassure the country that the market would correct itself automatically, and that the government’s only responsibility was to balance the federal budget.” Sound familiar? “Lower prices and interest rates, they said, would inevitably ‘lure natural new investments by men who still had money and credit and whose revived activity would produce an upswing in the economy.’ Entrepreneurs would put their money into new technologies that would lead the way to prosperity. But Eccles wondered why anyone would invest when the economy was so disabled.”
The answer, so said our conservative brethren, was that economic downturns were a natural phenomenon, part of the economic cycle, a Darwinian view that here, as in Nature, the fittest would survive and the economically strong would move on. This trend of thought harked back to the works of Austrian economist Joseph Schumpeter, who Roubini states in his excellent recent book Crisis Economics “developed a powerful theory of entrepreneurship that is often distilled down to a pair of powerful words: creative destruction. In Schumpeter’s worldview, capitalism consists of waves of innovation in prosperous times, followed by a brutal winnowing in times of depression. This winnowing is to be neither avoided nor mineralized. It is a painful but positive adjustment, whose survivors will create a new economic order.”
Reich goes on: “They further explained that we were in the lean years because we had been spendthrifts and wastrels in the roaring twenties. We had wasted what we earned instead of saving it. We had enormously inflated values. But in time we would sober up and the economy would right itself through the action of men who had been prudent and thrifty all along, who had saved their money and at the right time would reinvest it in new production. Then the famine would end.” Now keep in mind that we are here talking about the Great Depression, not the Great Recession. Yet the parallels could not be more vivid.
In any case, as Reich recounts, “Eccles thought this was nonsense.” As a leading banker in the national arena, Eccles testified before the Senate Finance Committee in February 1933, just weeks before Roosevelt was sworn in as president. “Others had advised the Committee to reduce the national debt and balance the federal budget, but Eccles had different advice. Eccles told the senators that the government had to go deeper into debt in order to offset the lack of spending by consumers and businesses. Eccles went further. He advised the senators on ways to get more money into the hands of the beleaguered middle class. He offered a precise program designed ‘to bring about by Government action, an increase of purchasing power on the part of all the people.’ ” It should be noted that this advice was given three years before John Maynard Keynes’ similar theories were first published in his famous General Theory of Employment, Interest and Money.
Eccles biggest and most important insight was this: the major cause of the Depression had nothing to do with excessive spending during the Roaring Twenties. It was, rather, the vast accumulation of income in the hands of the wealthiest Americans, which siphoned purchasing power away from most of the rest. “As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth to provide men with buying power equal to the amount of goods and services offered by the nation’s economic machinery. Instead of achieving that kind of distribution, a giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth.”
Without adequate financial resources, consumers had to borrow to fund purchases. The borrowing took the form of mortgage debt on homes and commercial buildings, consumer installment debt, and foreign debt. Eccles understood that this debt bubble was bound to burst. And when it did, consumer spending would shrink. And so it did. Debtors were then forced to curtail their consumption, which naturally reduced the demand for goods and services of all kinds and brought higher unemployment. Unemployment further decreased consumption, which further increased unemployment. For Eccles, widening inequality was the major culprit.
Eccles realized back in 1933, and Reich and other economists are repeating now in the wake of another severe economic downturn, that recovery will be dependant on increasing aggregate demand, and that will be impossible to accomplish without the participation of middle class Americans. The inequality that Eccles saw regarding income distribution in 1930 is being repeated today, and that inequality must be re-balanced.
DECLINE OF THE AMERICAN MIDDLE CLASS
Reich goes on to detail the decline of middle class purchasing power over the period from roughly 1975 to the present. The New York Times Bob Herbert, in that Op-Ed piece, summarized the present plight: “Analysts have tracked the increasing share of national income that has gone to the top 1 percent of earners since the 1970s, when their share was 8 percent to 9 percent. In the 1980s, it rose to 10 percent to 14 percent. In the late-’90s, it was 15 percent to 19 percent. In 2005, it passed 21 percent. By 2007, the last year for which complete data are available, the richest 1 percent were taking more than 23 percent of all income. The richest one-tenth of 1 percent, representing 130,000 households, took in more than 11 percent of total income in 2007. That does not leave enough spending power with the rest of the population to sustain a flourishing economy. This is a point emphasized in “Aftershock.” Mr. Reich, a former labor secretary in the Clinton administration, writes: ‘The wages of the typical American hardly increased in the three decades leading up to the Crash of 2008, considering inflation. In the 2000s, they actually dropped. A male worker earning the median wage in 2007 earned less than the median wage, adjusted for inflation, of a male worker 30 years earlier.’ A typical son, in other words, is earning less than his dad did at the same age. This is what has happened with ordinary workers as the wealth at the top has soared into the stratosphere.”
Reich continues, drawing a parallel between government action to alleviate the effects of the Great Depression and current attempts to create a sustainable recovery after the Great Recession. Government policies in the wake of the Depression led to a new economic order, including many of the programs that Marriner Eccles proposed on the eve of Roosevelt’s inauguration—social insurance, improvements in the nation’s infrastructure, and improved educational opportunities, including an expansion of public universities, all initially financed by government borrowing. They made the American middle class vastly more secure, prosperous and productive.
“The Great Recession that started at the end of 2007, however, has produced no new economic order. Instead, the government stepped in quickly with enough money to contain the downward slide. . . . . . But little was done to reduce the underlying, cumulative problem of widening inequality—Eccles’s insight into what caused the Great Depression. After the stimulus and loose money wear off, therefore, it is unlikely that growth can be sustained. . . . . . This will constitute the Great Recession’s aftershock. From it will emerge either a political backlash—against trade, immigration, foreign investment, big business, Wall Street, and government itself—or large-scale reforms that reverse the underlying trend.”
We are already witnessing the former—the Obama Administration is suffering greatly in the polls as the mid-terms approach. Incumbents have fallen by the wayside in droves, Congress may fall into the hands of the opposition party, the Tea Party movement is attracting more and more followers, there is outrage among congressmen over China’s currency manipulation, Wall Street and big business have become targets of voter anger. On the other hand, there are no signs of the type of reforms that will aid the vast majority of Americans. And the clock is ticking. Time is running out. Unemployment remains high, with little signs that it has peaked. Although American corporations are making record profits once again, GDP is stagnant at best.
The middle chapters of “Aftershock” trace economic policy from the end of the Depression and World War II, through that period Reich names The Great Prosperity, encompassing the years 1947 through 1975, and finally the three-decade long period from 1980 through the current crisis. It was during those years that economic policy was reversed through deregulation, privatization, reduced public services, reduced aid to higher education, restriction on unemployment benefits, and reduced taxes, especially for the wealthiest Americans. At the same time, income taxes were greatly increased for the less advantaged among us, sales and payroll taxes were boosted, both actions taking a bigger chunk out of the middle class and poor.
“Significantly, Washington deregulated Wall Street while insuring it against major losses, in doing so turning finance—which until then had been the servant of American industry—into its master, demanding short-term profits over long-term growth, and raking in an ever larger portion of the nation’s profit.” In essence, the basic bargain between American business on the one hand and the public welfare on the other was broken.
FROM THE GREAT PROSPERITY TO THE GREAT RECESSION
Reich rhetorically asks how the pendulum could have swung back in the opposite direction of social progress. He proposes three answers:
First, there grew a consensus that there was simply no need for government intervention. The proof lay in the great expansion of the 1980s; the long recovery of the 1990s; the wildly exuberant bull market of the era. And Reich states: “This argument is bunk. It equates the stock market with the economy, and turns a blind eye to the revocation of the basic bargain. The argument does not acknowledge the consequences for an economy when the middle class lacks the means to buy what it produces.”
Second, the reversal could be viewed as the inevitable result of declining confidence in government. “The tax revolts that thundered across America starting in the late 1970s were not so much ideological revolts against government . . . . . as against paying more taxes on incomes that had fattened. When government services consequently deteriorated and government deficits exploded, the public’s cynicism was confirmed.
Third, the more important cause of the pendulum reversal had to do with power. People with great economic power have an undue influence in making the rules of the economic game. “The rich and powerful also have substantial influence in conditioning the attitude taken by people as a whole toward rules. “They generously finance think tanks, books, media, and ads designed to persuade Americans that free markets always know best. Ronald Reagan, Margaret Thatcher, Alan Greenspan, Milton Friedman, and other apostles of free-market dogma reiterated a simple story: The choice was between free market and big government. Government was the problem. Free markets were the solution.”
“But how could the public have been so gullible as to accept this story? After all, America had gone through a Great Depression, suffering the consequences of an unfettered market and unconstrained greed. . . . . . America had also experienced the Great Prosperity, which depended so obviously on public improvements, safety nets, and public investment. Now that the basic bargain was coming apart once again, the need for them was even greater.”
One way to understand the paradox is loss of generational memory. . . . . . . When the latest generation became adults (from around the end of the 1970s onward), all they recalled was the failure of government and the success of the market. This made them particularly susceptible to the seductive rants of the free marketeers, who wanted to blame government for the economy’s failings. Moreover, they had no clear memory of a society whose members were all in it together. They witnessed instead an economy in which, increasingly, each of us was on his own.”
Personally, this writer has an alternative explanation: government had simply over-reached. The tide turned against the Great Society because it had gone too far. Unions had become too powerful. Handouts became too many. The social net became too wide. When civil riots broke out, public revulsion set in. Then, along came “Ronnie.” The new conservatives from the South and others flocked to him and his apostles with their simplistic solutions: decrease the role of government; deregulate industry and the markets; bust the unions. And the public bought it!
The middle class struggled on. “Starting in the late 1970s, the American center honed three coping mechanisms, allowing it to behave as though it was still taking home the same share of total income as it had during the Great Prosperity, and to spend as if nothing substantially had changed.”
Number 1: Women moved into paid work in greater and greater numbers;
Number 2: Everyone started working longer hours. What families failed to get in wage increases, they made up for in work increases;
Number 3: Middle class workers drew down on savings and borrowed up to the hilt.
After exhausting the first two coping mechanisms, the only way Americans could keep consuming as before was to save less and go deeper into debt. Americans borrowed from everywhere—credit card debt exploded; student loans increased dramatically; mortgage debt increased exponentially; auto loans were easy to obtain. “And, as housing values continued to rise, homes doubled as ATMs. Consumers refinanced their homes with even larger mortgages and used their homes as collateral for additional loans. As long as housing prices continued to rise, it seemed a painless way to get money. Between 2002 and 2007, American households extracted $2.3 trillion from their houses, putting themselves ever more deeply into the hole.” All these borrowings were aided by the Federal Reserve’s easy money policy, as Greenspan and the Fed did everything they could on the monetary side to prolong economic prosperity from 2000 through the onset of the Great Recession, when the credit and housing bubbles burst. When that happened, the last of the coping mechanisms disappeared.
Paul Volker thought the underlying cause of the Great Recession was that Americans had been living beyond their means. But Laura Tyson, the former chair of Bill Clinton’s Council of Economic Advisors, disagreed: “The real problem was their means hadn’t been growing.”
Reich comments: “The fundamental economic challenge ahead is to lift the means of middle-class Americans and reconstitute the basic bargain linking wages to overall improvements—providing the vast American middle class with a share of economic gains sufficient to allow them to purchase more of what the economy can produce.”
“The Great Recession accelerated the structural change in the economy that began in the late 1970s. More companies have found means of cutting their payrolls for good. Consequently, large numbers of Americans will not be rehired unless they are willing to settle for lower wages and fewer benefits. . . . . . . Nor will households be able to borrow as before. . . . . . Housing values will not regain their speculative peak for a long time, which means homeowners cannot use their homes as sources of easy money through home equity loans and refinancing deals. . . . . . . Americans are paying off, paying down, or walking away from trillions of dollars of outstanding loans—in a vast “deleveraging” of household finances that is likely to continue for years. Even as the economy returns, people won’t want to be burdened by much additional debt.”
“All this means relatively less middle-class consumption than before the Great Recession. . . . . . . Where will sufficient demand come from without a buoyant American middle class? . . . . . . Government can fill the gap for a time, but government cannot continue indefinitely to stimulate the economy with deficit spending or by printing money.”
“It should be apparent that there will be no return to ‘normal,’ because the old normal got us into our present predicament and can’t possibly get us out. So what comes next?
“Economic gains are so meager that the wealthy fight harder to maintain their share. The middle class, already burdened by high unemployment and flat or dropping wages, fights ever more furiously against any additional burdens, such as tax increases to support public schools or price increases resulting from regulations limiting carbon emissions. It’s a vicious cycle.”
The question, then, is how to move from a vicious cycle to a virtuous one—how to restore the widespread prosperity needed for growth, and how to get the growth necessary for widespread prosperity. The challenge is both economic and political. A fundamentally new economy is required—the next stage of capitalism. But how will we get there? And what will it look like when we do?”
Leaders throughout history have learned the hard way how inextricably bound together are politics and economics. Just look at what fate bestowed on many of our presidents over the past 35 years. Jimmy Carter lost his reelection bid because the economy had been suffering double-digit inflation. George H. W. Bush suffered the same result when Alan Greenspan raised interest rates to ward off inflation, which also raised unemployment. As James Carville said: “It’s the economy, stupid.” George W. Bush eventually took the blame for the latest economic catastrophe, and that blame also spilled over to John McCain. “All that can be said with confidence is that jobs and the economy are almost always at the forefront of voters’ minds.”
Reich moves on to examine the source of voter dissatisfaction and anger. He concludes: “Given the chance, most members of the middle class want to join the ranks of the rich and gain all the perks that come with great wealth. The real frustration, and the final straw, will come if and when they no longer feel they have a chance because the dice are loaded against them.”
That is happening right now. Presidents Bush and Obama may have saved America, and the world, from falling off the economic cliff. However, they did so partly by favoring the rich, the powerful, and the most advantaged among us. Namely, the banks, the large corporations and Wall Street. “The giant bailout of Wall Street [and corporate America] was sold to the American people as a way to save Main Street and jobs. But it appeared to do neither. . . . . . . Little or nothing trickled down to Main Street. Small business could not get loans. Few homeowners were able to renegotiate their mortgages, and large numbers lost their homes. Wall Street lobbied successfully against a proposal to allow homeowners to declare bankruptcy rather than forfeit their homes. The proposal would have given distressed homeowners more bargaining leverage with the banks that owned their mortgages. . . . . . . The whole thing began to look like a giant insider deal.”
TWO PATHS FORWARD
Reich believes there are two alternatives available to address the diminished role and opportunities of middle-class Americans, and, in turn, the future health of the American economy. The first way forward is illustrated by the following hypothetical scenario that Reich lays out:
NOVEMBER 3, 2020
The newly formed Independence Party pulls enough votes away from both the Republican and Democratic candidates to give its own candidate, Margaret Jones, a plurality of votes, an electoral college victory, and the presidency. A significant number of Independence Party members have also taken seats away from Democrats and Republicans in Congress.
The platform of the Independence Party, as well as its message, is clear and uncompromising: zero tolerance of illegal immigrants; a freeze on legal immigration from Latin America, Africa, and Asia; increased tariffs on all imports; a ban on American companies moving their operations to another country or outsourcing abroad; a prohibition on foreign “sovereign wealth funds” investing in the United States. America will withdraw from the United Nations, the World Trade Organization, the World Bank, and the International Monetary Fund; end all “involvements” in foreign countries; refuse to pay any more interest on our debt to China, essentially defaulting on it; and stop trading with China unless China freely floats its currency.
Profitable companies will be prohibited from laying off workers and cutting payrolls. The federal budget must always be balanced. The Federal Reserve will be abolished.
Banks will be allowed only to take deposits and make loans. Investment banking will be prohibited. Anyone found to have engaged in insider trading, stock manipulation, or securities fraud will face imprisonment for no less than ten years.
Finally, but not least: In order for the government to balance the budget, provide for national defense, guard our borders, and pay down the national debt, all personal incomes will be capped at %500,000 per year; earnings in excess of that amount will be taxed at 100 percent. Incomes above $250,000 are to be taxed at 80 percent. The capital gains rate will be 80 percent. All net worth above $100,000 will be subject to a 2 percent annual wealth tax. Any American found to be sheltering his income in a foreign nation will be stripped of his U.S. citizenship.
In her victory speech, president-elect Jones is defiant:
“My fellow Americans: You have voted to reclaim America. Voted to take it back from big government, big business, and big finance. To take it back from the politicians who would rob us of our freedoms, from foreigners who rob us of our jobs, from the rich who have no loyalty to this nation, and from immigrants who live off our hard work. (Wild applause.) We are reclaiming America from the elites who have rigged the system to their benefit, from the money manipulators on Wall Street and the greed masters in corporate executive suites, from the influence peddlers and pork peddlers in Washington—from all the privileged and the powerful who have conspired against us. (Wild applause and cheers.) They will no longer sell Americans out to global money and pad their nests by taking away our jobs and livelihoods! (Wild applause and cheers.) This is our nation, now! (Wild applause and cheers that continue to build.) A nation of good jobs and good wages for anyone willing to work hard! Our nation! America for Americans! (Thunderous applause.)
Her opponents concession speeches are bitter. George P. Bush, the Republican candidate, is irate. “I cannot stand before you and congratulate my opponent, who based her entire campaign on fear and resentment,” he tells his supporters.
Chelsea Clinton, the Democratic candidate, is indignant. “I would very much like to offer Margaret Jones my best wishes for the future. But I have to be honest: She and the Independence Party pose a grave danger to this nation.”
Foreign leaders try to be respectful but cannot hide their anxieties. The British prime minister issues a terse statement “wishing Americans well.” The German chancellor offers “condolences,” but the German ambassador to the United States insists the chancellor’s remark has been mistranslated and is best understood as “commiserations.” The president of China appears before news cameras and says, simply, “The United States has committed a grave error.”
The presidents of the U.S. Chamber of Commerce and the Business Roundtable issue a joint statement warning that Margaret Jones and the Independence Party “will push America into another Great Depression.” The CEOs of the four remaining giant Wall Street firms predict economic collapse.
On November 4, the day after Election Day, the Dow Jones Industrial Average drops 50 percent in an unprecedented volume of trading. The dollar plummets 30 percent against a weighted average of other currencies. Wall Street is in a panic. Banks close. Business leaders predict economic calamity. Mainstream pollsters, pundits, and political consultants fill the airways with expressions of shock and horror. Over and over again, they ask: How could this have happened?
The second alternative Reich proposes is to face head-on the currently existing inequities and remedy them through legislative and executive actions. His specific suggestions are enumerated at the end of this review.
Reich next examines the power and influence of lobbyists, and here, here he is getting to one of the underlying systemic roots the dilemma. No one will deny the corrupting influence of money. It drove, in part, the bank rescues, and the “people” were left behind holding the bag. It funds politicians’ campaigns, who then cow tow to contributors’ interests rather than the public welfare they swore to protect. Thus, the cause of the problem is political, and that will require a political solution. If our elected officials didn’t need so much money, their vulnerability to its corrupting influence would diminish. Could the answer lie in having fewer elections at more infrequent intervals? Why do members of the House of Representatives need to face reelection every two years, while across the aisle, senators serve six year terms. It’s obscene! Why do presidents have to run for reelection every four years? It severely limits their effectiveness as leaders—they in essence have a two-year period after being elected to put their programs to work, and then spend the following two years running for reelection. Why not, as many have suggested, have a six-year term for our presidents?
Both of these changes would encounter fierce resistance from exactly those whose undue influence such changes would address, i.e., the lobbying industry itself. But it’s a fight worth taking on. Reich does not advocate anything in this regard, and that is the first fault I find with his work. The following is the second:
Reich proposes nine steps to restore the balance between middle-class opportunities and the rich and powerful—restore what he refers to as the “bargain”—that intellectual or ideological agreement giving workers a proportionate share of the fruits of economic growth. I will simply state his proposals without elaboration.
First, a reverse income tax. Instead of money being withheld from workers paychecks to pay taxes to the government, money would be added to their paychecks by the government, according to a graduated or progressive formula; second, a carbon tax; third, higher marginal tax rates on the wealthy—up to 55%--and elimination of the capital gains exemption; fourth, a reemployment system rather than an unemployment system, including wage insurance; fifth, school vouchers based on family income; sixth, college loans linked to subsequent earnings, to be repaid during the first ten years of a student’s gainful employment; seventh, Medicare for all; eighth, a sizeable increase in public goods such as transportation, public parks, recreational facilities, public museums and libraries, with free public transportation, including high speed rail; and, finally, the removal of money from politics.
Reich maintains “This is not an unrealistic agenda. It is practical and doable.”
It is said that one of the dangers of an academic life can be isolation from reality. Living in the ivory tower of academia can blur a person’s reasoning powers. If Reich thinks his nine-step program is doable, he is deceiving himself. To end such a brilliant study of our economic and political systems with these kinds of proposals is a true shame.
CONCLUSIONS
I have seldom read a book as thought-provoking as this one. I regularly read 25 pages or so before bedtime, and found myself awakening hours later and writing notes to myself about one insight or another that Reich had brought to mind. I have also found the many quandaries that the author describes to be deeply troubling, for no one seems to be addressing the underlying causes of our economic malaise. Rather, all things seem to be pointing to a breakdown in effective government, in our national leaders’ ability to overcome political rancor in order to solve our nation’s problems.
Is there a basic flaw in our political system? Our founding fathers created a lasting document over 240 years ago, our Constitution. It has served the nation well for a long, long time. However, those founders never conceived that effective leadership would be so compromised by political parties totally unwilling to cooperate and put the common good ahead of partisanship and the striving for power. In fact, the party system did not even exist at the time of the Constitutional Convention. But the Signers did bequeath to future generations the ability to modernize the document through the passage of Constitutional Amendments. It is in that direction that we must proceed. As mentioned above, the contentious effect of our party system must be corrected, and the only way this can be accomplished is to reduce party and lobbying influences; reduce the predominance of special interests, and put the reins of government back in the hands of our elected officials, allowing them to represent both their constituents and their own conscience.
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