Pity the poor witch.Long-vilified in literature (Shakespeare’s “Macbeth”), folklore, and in films ranging from “The Wizard of Oz,” to “The Blair Witch Project,” those broomstick-riding, spell-casting sisters just can’t catch a break.Why, in Romania (a country where a substantial percentage of the population still believes in witchcraft), the government even passed labor laws in 2011 that forced fortunetellers and self-proclaimed witches to pay income taxes.Practitioners of the “dark arts” like Bratara Buzea spoke out against the law, and even threatened to cast spells on the offending lawmakers.
Witches don’t get any more respect in court, where apparently they’re not welcome as expert witnesses.In Manhattan’s State Supreme Court in New York recently, a defense attorney attempted to introduce “expert” testimony on witchcraft during the murder trial of 42 year-old Bakary Camara.Mr. Camara, a Senegalese immigrant, is accused of killing ex-girlfriend Rita Morelli last fall; he pleaded not guilty, saying he was under the influence of evil spirits (psychiatrists have already ruled out Camara’s previous assertion that he was delusional during the killing).Defense attorney Seema Iyer sought to introduce testimony from Cheikh Ndao—a self-described imam from Africa who claims to be an expert on Senegalese curses and witchcraft.Prosecutors were skeptical of the man they called a “witch doctor,” and so was Justice Juan Merchan.He ruled that the defense had failed to demonstrate that Mr. Ndao satisfied the definition of an expert.Perhaps if he had turned the judge into a newt?
Yes, witches aren’t feeling the love in our courtrooms.Despite this, the descendants of some accused witches are turning to the legal system to seek formal exoneration for those executed for witchcraft during the 17th century.Bernice Mable Graham Telian is one such person, seeking to clear the name of her ancestor Mary Barnes, who was hanged as a witch for “familiarity with Satan” in Connecticut in 1663.Connecticut executed 11 women for witchcraft between 1647 and 1663, and in fact witchcraft remained a capital crime until 1750.
Telian has been aided in her quest by the Connecticut Wiccan & Pagan Network.But she faces an uphill battle.Although the governor can issue a pardon for someone convicted of a crime (essentially removing or reducing the sentence that was imposed, but not reversing the conviction itself), Telian is seeking something more: a formal declaration that Mary Barnes was not a criminal.In 2008, the Connecticut state legislature weighed a resolution that would have formally acknowledged victims of the witch trials, but the measure failed.Other activists have suggested that Governor Dannel Malloy should issue a proclamation apologizing for the colonial-era executions and exonerating the convicted “witches.”
Three other New England states that executed women accused of witchcraft—Massachusetts, New Hampshire, and Vermont—have already formally acknowledged the injustice of these executions.The most notorious, of course, took place in Massachusetts during the Salem witch trials of 1692.Nearly 200 people were accused of engaging in witchcraft or “consorting with the Devil” during the hysteria that swept Salem in the summer of 1692.Twenty of those accused—15 women and 5 men—were executed; 19 were hanged, while octogenarian farmer Giles Cory was crushed to death for refusing to enter a plea.Another four of the accused, three women and one man, died in jail.One of the accused, a girl named Dorcas Good, was only four years old.
The accused were predominantly people who were perceived as outsiders by the rigid Puritan society.Sarah Good, for example, was a local beggar who rarely attended church.Sarah Osborne, one of the first women accused, had scandalized the village by having an affair (while unmarried) with an indentured servant from Ireland.Martha Cory was accused of being a witch after giving birth to an illegitimate biracial child.A number of other residents of Salem were accused after expressing skepticism at the cries of witchcraft by the young girls who started the madness in the village.These included people like John Proctor and his wife Elizabeth, Susannah Martin, Sarah Cloyce, Dorcas Hoar, and George Jacobs.Many of the accusations were leveled by members of the Putnam family, who just months before had lost power in Salem after they and their supporters were replaced on the village’s governing committee.Eight members of the Putnam family were involved in the prosecution of about 50 accused witches.
Typically, these cases would begin with a formal complaint by a party allegedly injured by someone’s “witchcraft,” but any resemblance to our modern criminal proceedings ended there.Accused witches were presumed guilty, not afforded any right to legal counsel, and the magistrates and presiding judges would usually ask leading questions that presumed that acts of witchcraft had taken place.And although juries were empaneled to consider guilt or innocence, on at least one occasion, a jury that had acquitted a defendant was ordered to “reconsider” their verdict; not surprisingly, the jury reversed itself.The “evidence” presented was a joke: nine accused witches were convicted based on nothing more than testimony from an alleged victim who testified to having been visited during the night by a spectral figure who resembled the defendant.Others were convicted when they had difficulty reciting the Lord’s Prayer.
Eventually, the hysteria died down.Reverend Increase Mather, a respected clergyman from Harvard, questioned the reliability of the “evidence.”The trials, which had begun in June 1692, formally ended when Massachusetts Governor William Phipps dissolved the presiding tribunal in October of that year.In spring 1693, Phipps ordered all of the remaining incarcerated accused witches released.
Meanwhile, in Connecticut, Bernice Telian seeks justice for Mary Barnes—even if it is nearly 450 years too late.
This past Sunday the celebrant, a missionary, focused on this passage in the Sunday gospel: “It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.” (Matthew: 19:24). The priest went on to explain to the parishioners the evils of storing up riches or, aspiring to be wealthy. He continued to say what good is wealth if one, who is rich, didn’t do good works with his or her possessions.
As I listened with an open mind I suddenly remembered my dear and wonderful friend and ex-boss, Carl Motheral, owner of Motheral Printing Co. Carl, in my humble opinion was a business genius. When I went to work for Motheral Printing in 1967, the company was a small company. Wanting to expand the business, Carl’s brothers, Foist and Wes asked their younger brother, Carl, who had a thriving export business in Mexico to join the company, which he did. Within 2 to 3 years the company grew tremendously. After he joined the company, Carl bought most of the properties around the once small company and within time the company encompassed two full city blocks. Carl then hired some of the most talented printing salesmen in Fort Worth and expert journeymen rotary pressmen. Within a few short years the company was thriving with lucrative business accounts like: General Dynamics, Bell Helicopter, American Airlines, Mary Kay Products, Alcon Laboratories and scores of other thriving companies in the Dallas/Fort Worth Metroplex. Needless to say, the company thrived and Motheral’s employees were reaping the benefits in enjoying great benefits and salaries. Besides being a great businessman, Carl was a generous man. It wasn’t uncommon for us to get a rewarding bonus every Christmas. And, during summer, the company would take all of its employees along with their families to Six Flags to enjoy a wonderful outing and a catered picnic free of cost. Having won several awards for the company with my typesetting skills, Carl and I became close friends. So close, that when his son, Jim, got married, my wife and I were invited to the wedding reception at a prestigious country club. So here you have me, a typesetting American Hispanic, rubbing elbows with Fort Worth’s elite.
During the course of my employment at Motheral’s, Carl begged me to join the company’s Profit Sharing Plan. Eventually, I did. After 18 wonderful years at Motheral’s I was offered a lucrative position at General Dynamics as an Engineer Illustrator due to my computer typesetting skills. Carl encouraged me to take the well paying job and then gave me a check for 50 thousand dollars from my Stock Sharing Plan. Folks, all I had contributed in 6 years was 6 thousand, which grew into 50 grand. Carl then told me to roll over my check. I asked, “Carl, what the hell is roll over?” He instructed me to reinvest my money otherwise the government would take one third of it if I spend it. Carl then found me an investor and today that initial 6 thousand dollar investment has grown beyond my wildest expectations, which allows my wife and I to be financially secure and am able to help my daughter send our grandkids to Catholic school that is rather costly.
Another wealthy businessman I worked for part time as a typesetter in the 1960s was Mr. George Levitan, a Jew, who owned Good Publishing. Mr. Levitan hired whites, blacks and Hispanics as pressmen, lithographers and bindery workers where many learned good printing trades. To him color didn’t matter as long as you were a good worker. Most of Mr. Levitan’s office personnel were black women who ran a very efficient business office. Daily, Mr. Levitan would feed all of his workers during lunch with a hot meal prepared at the company cafeteria. During the Fat Stock Show, Mr. Levitan would outbid all his competitors winning the prized 4H Club bulls and later he’d have the bull slaughtered and give the meat to needy families.
Besides Carl Motheral and George Levitan, one man sticks out in my mind as a wealthy, yet, generous business gentleman. His name was Nick Dieb, an Arab, who for years owned a department store in my Hispanic barrio (neighborhood) in North Fort Worth where I grew up in the 40s and 50s. One must remember that back then most didn’t have credit cards as we do today. If you got credit at a store it was all up to the owner and the honest word of the purchaser. Most of the poor Hispanic households would purchase school clothes, shoes, toys, and school supplies at Nick’s. I remember vividly my mom sending me to buy shoes and told to tell Nick to charge it. I don’t recall Nick ever denying me, a young kid, from purchasing shoes on credit at his store. Nick would take out a little book with ‘REZA’ written on it and mom later would pay him.
Again, I ask the question are all rich people mean and calloused towards the poor? My honest assessment is “no!” In contrast there’s not a week that goes by where I read in the newspaper or see on the news supposedly poor folks who rob, kill, rape, molest children, and Lord knows what else. I ask, “Is it easier for them to go to heaven because they are poor?” I also read where some clergymen of all faiths abuse children, women, and live lavish lifestyles, plus use a lot of their money they collect for their own use rather than helping the poor and hungry. Does anybody recall the shenanigans of the Rev. Jim Bakker and his wife Tammy Faye and the bawling Rev. Jimmy Swaggart? Again I ask, “Is it also easier for abusive clergymen to enter heaven than the rich?”
When the mass ended the missionary told the congregation that he was selling candles at $10 each to offset his gas expenses that he said was very costly. I felt like asking the missionary, “Father, would it upset you if I bought a candle with the money I made from the evil rich guys in the Stock Market?”
Show me a particular occupation, and I’ll find you a superstition or two unique to that group.Whether it’s sailors and their many nautical beliefs, architects designing buildings without a thirteenth floor, or theatrical performers insisting on hearing “break a leg” instead of “good luck,” everybody has their own lore.Athletes are perhaps the most notorious for their superstitions, from wearing lucky colors or equipment to sticking to ritualistic meals during a streak or taking specific steps (however nonsensical) to break a slump.But what about lawyers; those rational beings who dwell in the realm of logic and reason?Surely, they are the exception to the superstition rule.
Nope.It seems that lawyers can be just as superstitious as the next person, and trial lawyers are perhaps the most superstitious of the bunch.I’ll admit it—I always wear a lucky tie on the first day of trial, and I frequently will stick with the same lunchtime spot close to the courthouse.Once, I even managed to park in the same parking space every day (no mean feat at a busy urban courthouse), convincing myself that this little ritual had something to do with how well the trial went.
Often, the superstition is associated with a talisman or lucky object.For most lawyers, that’s a lucky tie or suit (one prosecutor used to wear her “hanging suit” during every capital murder trial).Ira Lee Sorkin, who represented Bernie Madoff during his big Ponzi scheme legal wranglings, always wears a particular type of Hebrew University tie during his opening statement.Celebrity lawyer Benjamin Brafman wore a “bendel” (a slender bracelet of red thread from Israel that is supposed to ward off evil) every day while defending P Diddy (aka Sean Combs) during a 2001 weapons possession trial.Combs was acquitted, and Brafman has been wearing the bendel at trial ever since.Brafman insists he’s not superstitious, but says “I just wear it because since I’ve put it on, I’ve enjoyed good luck, both personally and professionally.Do I think about just breaking it off and throwing it away?Yes, the thought has occurred to me, But I haven’t.”In California, Van Nuys Deputy District Attorney Terese Hutchison would never try a case without her trademark Batman watch, saying “My Batman watch is sacred to me.”For Houston criminal defense attorney Jack Zimmerman, it’s his lucky boots that he feels make the difference.Another Houston defense attorney, Joe Bailey, swears by his lucky shoes.He says “The last success, or catastrophe, dictates which pair I wear.They must be newly polished.The left one goes on first and cannot be tied before the right one is on.Even though they may develop a hole, I refuse to deviate from a ‘successful pair.’They can be resoled.”
For other lawyers, it’s not the lucky talisman or article of clothing that brings out their superstitious side, it’s what they put in their stomachs.New York defense attorney Murray Richman repeatedly eats the same meal—a Mayan sun salad with a sautéed filet of salmon—at the same restaurant every day during trials that can last for weeks at a time.For Peter Quijano, his ritual meal during trial was a cheddar burger and bloody Mary from the same restaurant (the Whiskey Tavern), served by the same waitress and eaten at the same booth.Quijano also has another quirk to ward off jinxes; he tries to insert the name of his Scottish terrier, Watson, into every closing argument.“The trial gods are very powerful,” he says.“You respect them.You make little offerings.”
And for many attorneys, the superstition has nothing to do with items of food or clothing.David Ruhnke, who specializes in defending capital murder cases, avoids the color black at all costs.“I believe that black is a color particularly associated with death and mourning, so I will not write in black ink.”He sends emails with blue letters, and uses blue, green, or white binders.Maybe he’s on to something—he’s won 14 out of 16 capital trials, and hasn’t had a client executed.Other lawyers ritualistically take the same route to the courthouse or always go in a particular entrance during trial, like Deirdre van Dornum of the federal public defender’s office in New York.Meanwhile, still other attorneys refrain from getting their hair cut, while some listen to particular songs as part of a pre-trial ritual.For Houston appellate specialist Brian Wice, it’s always Eminem’s “Lose Yourself” (a favorite of mine as well).Bill Rosch, another Houston lawyer, is particularly fond of a classic, Aaron Copland’s “Fanfare for the Common Man.”
Whether it’s a rabbit’s foot in your pocket, a lucky tie around your neck, or a ritualistic meal, why do otherwise rational professionals allow themselves to be governed by superstition?Frances Cattermole-Tally of the UCLA Center for the Study of Comparative Folklore and Mythology has a theory.“They’re in a profession where they’re sort of under the gun all the time,” she notes.“When people are under a lot of stress—and lawyers are—they do things they might later recognize as irrational but which don’t hurt anyone.And they might help.”Arthur Miller, a law professor at NYU, says it really amounts to lawyers behaving much like, say, a baseball player tapping his cleats or a stage actor not whistling backstage—they’re only human.“It’s part of the human condition that no matter how many years of education you’ve had, you still have faith in certain totems,” Miller observes.
Ultimately, trial lawyers are people, too.And, hey, if wearing lucky socks makes your heart surgeon, airline pilot on your flight, or even the lawyer handling your case, feel better about his or her performance, should you really care?
When I read my local newspaper (Fort Worth Star Telegram) I seldom find any balanced views of current event news. Like most newspapers, the Star Telegram in my opinion is a liberal rag. Most of their editorial writers are left wing nuts, so I don’t even waste my time in reading their pieces because I can almost predict the outcome of their one-sided liberal dribble. Folks, I don’t have any objections in liberals blasting conservatives in the news media, but, I’d like to see a fair and balance debate of whatever, as does Fox News in presenting their news to viewers and let viewers decide who’s arguments are more palatable to them. Fox News by the way cleans the clock of all TV news outlets.
Some days ago however, I read something in the Star Telegram that cheered me up considerably. The headline read: “Workers vote against joining union at Coca-Cola plant in Fort Worth”. According to a statement by Teamsters organizer, Chris Rosell, this was the union’s second failed attempt in less than two years to unionize the Coke facility. Coca-Cola employees, by a vote of 215 to 191, rejected a bid to make their company the first corporate-owned unit in the South with a union.
“Why were you happy about the union being ousted of the Coke plant James?” some might ask. My friends, we baby-sit for my daughter a lot (works the graveyard shift in the ER in JPS) and man the kids go through Cokes, Big Red, Dr. Pepper, and Caprisun big time. Thus, I foresaw that if Coke went union, the price of Cokes would skyrocket like almost all products made or represented by unionized companies or businesses. Thus, I would have to shell out more for Coke products, which are high already, but not due to unions, but rather, the high cost of fuel to transport them to market.
I’ve never been a fan of unions. Nor have I ever had a need for them. As a youngster, I remember Swift and Armour’s, two huge packinghouses in my former turf in North Fort Worth being unionized. I remember dad telling me how he hoped I’d get hired there to earn a good wage after I graduated. Little did dad know that I had zero interest in working at a packinghouse. My sights were already set in being a typesetter. A trade I learned at Tech High. Sadly, after I graduated and had won several statewide titles in typesetting competition, the Typographical Union in Fort Worth wouldn’t hire me without going through a two-year apprenticeship training at a low wage. Dejected I resume working at a mobile home company I worked during my high school days making cabinets and as an electrician at a salary much higher than as an apprentice typesetter.
At my mobile home job I worked with Rudy Martinez, a school and neighborhood chum who was a senior when I entered the 10th grade and when I graduated Rudy was still a senior. Poor Rudy was never able to grasp the curriculum at Tech High. Most of his credits he earned in PE and Auto Shop. After I graduated Rudy quit school.
Within time I got a job as a typesetter at a non union shop and later became a specialized computer typesetter. Rudy, on the other hand got hired at General Motors in Arlington, Texas, making darn good money I might add, as a union autoworker. Rudy’s brother, Victor Jr., on the other hand was a bright student. Their dad, Victor Sr., was a chef at TCU, a highly acclaimed college and thus Victor through his dad’s job at TCU got a low cost tuition and earned a degree in business. Later, Victor, Jr. married and moved to California where he earned mega bucks in an international company.
Sometimes as I drove to work, I’d see Rudy, who lived less than a block from my dad’s house for days on end. One day I asked Rudy if he was laid off from GM. He told me that GM was on strike and he loved it because he got 80% of his pay for the duration of the strike. I’d ask Rudy if he thought he’d work again. He’d tell me, “James, I’m sure the union will get us more money and benefits.” I’d asked him, “How Rudy?” He’d tell me laughing, “GM will just increase the cost of their autos and you, the purchasers, will have to shell up more at the dealerships!”
As they years passed, Swift’s and Armour’s shut down their doors at the Stockyards in North Fort Worth and thousands of workers were let go. After all the money the workers paid in union dues they were left out in the cold with no job, no benefits, no retirement, and many were plain broke. That also occurred in many union typesetting and print shops in Fort Worth, where many printers I knew worked. As the printing methods got more into computers and highly specialized printing methods, most typesetting companies and print shops couldn’t compete with the new technology and closed their doors. This left many printers who for years had paid the unions to protect their jobs out in the cold.
Today, one reads where unions around the country are demanding more in wages and benefits while the economy is in the tank and tons of workers are laid off. The teachers union in Chicago is a classic example of the greedy unions. The city of Chicago is in debt up to their neck and the teachers there went on strike demanding more money and benefits. And from where was the teachers union going to get the money? From the poor Chicago taxpayers whose unemployment rate is 9.10% that’s who.
Prior to writing this piece I searched the Internet for pros and cons of unions. In most evaluations unions got six plus reasons for their existence and 16 against their usefulness to business, workers and we the consumers. In fairness, here are two reasons from the pro and con comments: Unions protect workers from various company abuses such as unsafe/uncomfortable working conditions, long hours and arbitrary hiring & firing. They give workers a chance to speak at the same negotiating & power levels of the managers and owners. Unions lead to higher prices for consumers since companies must pay more for wages & benefits, which are passed on to customers. Society and companies are often held hostage to the essential services of certain unions (e.g. teachers, police, construction workers, pilots, etc.); thus, negotiation becomes less about fairness to workers than about companies meeting the demands of union extortion.
I discussed last week how Ben Bernanke’s easy-money policies could be reversed, should Mitt Romney win the Presidency and wish to reverse them. It is only fair, therefore, to discuss the other possibility: should Barack Obama be re-elected and (ignoring his fiscal and regulatory policies, which in any case would be modified by Congress) allow Bernanke to run free with U.S. monetary policy for another four years. In modern history, since Bernanke’s policies are unprecedented, we have no easy benchmark by which we can measure this outcome. As in many cases however, Adam Smith, writing before economic growth was taken to be universal and inevitable, has an admirable template for our future in a Bernanke-driven United States, in his analysis of the declining fortunes of 18th century Bengal.
In “Chapter VIII – The Wages of Labor,” having discussed the flourishing economies of Western Europe, the American colonies and the static but wealthy China, Smith turns his attention to the problem of decay: ”But it would be otherwise in a country where the funds destined for the maintenance of labor were sensibly decaying,” he begins.
That is of course precisely the situation in which the United States finds itself after nearly seven years of Bernankeist monetary policy, which followed 11 years of monetary over-expansion under Alan Greenspan. A decade or more of balance of payments deficits in excess of $500 billion annually, accompanied by interest rates that have depressed the U.S. savings rate far below the capital needs of the economy and four years of $1 trillion plus budget deficits, have hollowed out the U.S. capital base. Historically the U.S. economy has been noted for its gigantic readily available stock of capital, giving every U.S. worker the knowledge that he had the world’s largest pool of capital behind him. This is no longer the case; a recent Congressional Research Services study shows that the U.S. has the lowest manufacturing fixed capital formation of any major OECD economy.
This is having the same effect in today’s United States as it had in Smith’s Bengal. Median U.S. real household income has declined by $4,000 in the last decade, and the decline is accelerating. As Smith put it of Bengal “Every year the demand for servants and laborers would, in all the different classes of employments, be less than it had been the year before. Many who had been in the superior classes, not being able to find employment in their own business, would be glad to seek it in the lowest. The lowest class being not only overstocked with its own workmen, but with the overflowings of all the other classes, the competition for employment would be so great in it, as to reduce the wages of labor to the most miserable and scanty subsistence of the laborer.”
If that’s not a description of many people’s experience in the U.S. economy of 2009-12, I don’t know what is. So far the social safety net, food stamps etc. have prevented utter destitution, while minimum wage legislation has substituted unemployment (or more usually, withdrawal from the workforce) for plunging wage levels.
However the qualitative description is sound, and four more years of severely negative real interest rates, hollowing out the U.S. capital base still further, will make it ever more accurate. While nominal benefit levels may be maintained, at enormous cost to the declining number of solvent taxpayers, rising inflation will doubtless reduce real wage and benefit levels, producing an ever more realistic alignment with the Bengal of 250 years ago.
Reading Smith makes it quite clear that, however much the Obama administration may wish to shift the burden of economic difficulties to the rich, the adverse effects of the Obama/Bernanke policies will fall mainly on the working poor. “The liberal reward of labor, therefore, as it is the necessary effect, so it is the natural symptom of increasing national wealth. The scanty maintenance of the laboring poor, on the other hand, is the natural symptom that things are at a stand, and their starving condition, that they are going fast backwards.”
If we regard Bernanke’s loose monetary policy as immovable before 2017 (or January 2018, when Bernanke’s 2014 term will end) then the economic management problem becomes clear. Economic managers, whether in a possibly Republican Congress or those appointed by Obama in his second term, will need to stem the loss of capital from the U.S. economy. Ultra-low interest rates, by depressing U.S. savings rates and encouraging excessive leverage and speculation, will make this very difficult, but there are nevertheless some steps that can be taken.
First, the $500 billion annual U.S. balance of payments deficit must be lowered. The best way to do this is to lower the dollar against the currencies of U.S. trading partners. “King Dollar” policies will only hasten the outflow of capital and inflow of imports. Protectionism, which would slow the latter, runs the risk in the current global recession that it would lead to retaliation from U.S. trading partners. It would also wreck the World Trade Organization, which has played a valuable if modest role in discouraging the world from lapsing into Smoot-Hawleyism in the global downturn. World trade in 2011 recovered to a level above that of 2007; given the depth of the recession that is a remarkable achievement, incomparably better than the 65% collapse of world trade in the 1930s.
Bernankeism, by printing far more dollars than can be absorbed by world demand, tends to weaken the dollar in any case; this tendency should be encouraged, and exports should be encouraged by any means possible.
Secondly, in a situation in which Bernankeism is tending to de-capitalize the U.S. economy, reduction of the Federal deficit becomes a top priority. The Republicans in Congress will be seen as more or less powerless; they should take advantage of this to cave to the Obama administration on taxation, allowing a large tax increase, as far as possible achieved by closing loopholes rather than raising rates. A Value Added Tax, while a dangerous instrument to leave in the hands of greedy legislators, would have the virtue of shifting taxation from income to consumption, thereby encouraging saving and reducing imports and the payments deficit.
Conversely, Congressional Republicans should adopt the “root-canal” approach on spending, forcing massive reductions in discretionary spending, entitlements and even defense in return for their flexibility on taxes. A long-term solution of the medical financing problem along the lines of the Ryan Plan, in return for a modest VAT, would be worth it on balance, provided overall spending was kept on a sufficiently tight leash.
Politically, Congressional Republicans should be able to shift most of the blame for both tax increases and spending cuts onto the Obama administration, while any loss of the United States’ international position as a result of the defense cuts could also be blamed on Obama’s foreign policy. The objective should be the smallest possible government, financed as far as possible from current revenues; this will reduce the cash outflow from the depleted U.S. savings base. Any unpopularity from root-canalism will on balance redound to the GOP’s benefit in 2016, but, more important, the long term budget problem will be solved, and the drain of capital from the U.S. economy will be minimized. U.S. middle class living standards will continue to decline, but not as quickly as they would have without the “root-canal” policy, and the seed-corn of growth will be preserved for future generations.
There is of course the possibility that Bernankeism will collapse of its own accord before 2017. The most likely form such a collapse would take is a sudden upsurge in inflation. Given Bernanke’s “quantitative easing” policy and the extreme nature of his interest rate policies it’s likely that an inflation burst, if it occurred, would come suddenly, rather than gradually as in the 1970s. Alternatively, an uncontrollable surge in commodity and energy prices could cause an economic downturn, as was partly the case in 2008.
In either of these cases, policies of a weak dollar combined with extreme austerity in budget policy would make the danger of a Weimar or Great Depression scenario less severe. In the event of a collapse, policymakers should concentrate on using it to ensure the removal of Bernanke, reducing the damaging period during which his monetary policies are in effect. In this respect a weak dollar policy would be helpful; it could cause a foreign exchange crisis similar to that of 1978-79, forcing Bernanke’s removal as that crisis forced the removal of G. William Miller and his replacement with the estimable Paul Volcker.
In summary, even the prospect of another four years of Bernankeism is not grounds for excessive pessimism. While his policies, if allowed to combine with massive budget and payments deficits, could turn the United States into a 21st Century version of Adam Smith’s Bengal, there are tools of budget austerity and currency depreciation that can be used to counteract them. That these tools are likely to result in a reversal of Bernankeism and its replacement with sound policies is another very good reason for adopting them. Passivity in this case would not be a virtue.
Martin Hutchinson is the author of “Great Conservatives” (Academica Press, 2005)—details can be found on the Web site and co-author with Professor Kevin Dowd of “Alchemists of Loss” (Wiley—2010). Both now available on Amazon.com, Great Conservatives only in a Kindle edition, Alchemists of Loss in both Kindle and print editions.