Thursday, March 30, 2006

America In-the-Money

Whenever I am in the United States, I find myself lingering in bookstores, what my friend Joseph Epstein calls “the intellectual equivalent of pool halls.” In Princeton, New Jersey, when visiting my parents, I like to stop at the college U Store, actually a co-operative, where my membership card shows a presumably erudite Bengal tiger. (To which eating club does he belong?) There I inspect the required reading for various courses, figuring what’s good for a Princeton undergraduate is good for me.

In New York City, I drift toward Borders at 57th and Park Avenue, which has a huge collection of military, American, and world history. How they can afford to carry inventory that includes histories of Turkmenistan is beyond me. I am grateful to replenish there the tanks of what I call “readable Roman histories”: that is, books about classical history where all the footnotes are not in Latin or Greek. If I have time and energy, I make a pass at the Strand, the Greenwich Village used book loft, where the shopping bags make claim to its 12 miles of books, most of which, I sometimes think, were written by Salman Rushdie. (A good friend of mine actually went to university with Rushdie, who enjoyed the same unpopularity, although for different reasons, on campus that he does in the Arab world. In fact, in a show of their affection, his classmates formed a Page Ten Club, open for all those who failed to get past page 10 in the Rushdie’s novels. The other 450 pages are on sale at The Strand.)

For all that I enjoy book browsing, I end up shopping for essentially the same books year after year. For the children I buy what in the trade is known as young adult fiction. Authors like Joan Aikin or Rosemary Sutcliffe come to mind. For my wife, I gather up the latest contemporary fiction, provided it is below the radar of Oprah’s Book Club and does not have an appendix of questions that can be discussed at reading groups (as in: “Is there any indication that Richard Parker, the main character in Life of Pi, ever attended Princeton University?).

For myself, I divide my purchases between biographies, European and American history, Yankeeography (accounts of the New York Yankees), battle memoirs, and classical fiction, although with novels I tend toward financial realism—Dreiser, Howells, and Balzac are among my standbys—as opposed to Latin American fabulism (when it comes to Pablo Neruda, include me out). But most of my reading is connected to specific places, and my dream gift would be an atlas that showed the best books—fiction or non-fiction—that could be read in various cities or countries. For example, in the last year I have loved reading “Rubicon” by Tom Holland in Italy, “Mary, Queen of Scots” in Edinburgh, and “The Beleaguered City” by Shelby Foote in Vicksburg, Mississippi. I would boast of some other highbrow reads, but then my wife might reveal that on my bedside table is an account of the 1986 Mets, entitled “The Bad Guys Won.”

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One book that has eluded me for years is a readable economic history of the United States. I have lots of histories on my shelves that are unreadable, beginning with Charles A. Beard’s “An Economic Interpretation of the Constitution” and including some old textbooks about the Second Bank of the United States and the Texas Railroad Commission. But in recent weeks I have read with great appreciation a new book by John Steele Gordon, “An Empire of Wealth: The Epic of American Economic Power.” Gordon writes a regular column, The Business of America, for “American Heritage” magazine. Even if in his column and books he celebrates the achievements of American businessmen, it would be wrong to dismiss him simply as an acolyte of capitalism—leaving aside that his last column sings the visionary praises of one John D. Rockefeller. (His point there was that since wells were drilled in Titusville, Pennsylvania in 1859, doomsayers have been wringing their hands that we’re running out of oil.)

Published by HarperCollins and with an elegant book jacket from a Thomas Hart Benton painting, “Empire of Wealth” tells the narrative of the American economy from the Jamestown settlement to the Internet revolution, noting the many successes (such as the cotton gin and telegraph) and the occasional failures (Herbert Hoover is quoted: “The trouble with capitalism is capitalists. They’re too damn greedy.”). Gordon’s thesis is that in the great initial public offering that is American history, a genius for new products and markets (from mills to assembly lines and e-mail) has expanded the economic frontier. By contrast, in the novels of Theodore Drieser, the typical robber baron-protagonist corners a grain or trolley car market only to unravel in the arms of a chorus girl. In Gordon, however, pluck and luck usually win out over Warren Harding’s cronies or Daniel Drew’s “watered stock” (cattle readied for market with salt and then lots of water).

A pleasure of reading Gordon is that he writes with energy and precision, and he has a love of historical words and obscure facts. Thus in telling the epic of American economic power, he slips in numerous linguistic origins. For example: The word cowboy “was first applied to the black slaves who herded cattle in colonial Carolina.” Jefferson coins the word “dime” and popularizes the idea of “cents.” “Those who invested money in an enterprise were called adventurers, a word that is still echoed today in the term venture capitalist.” The word “dollar” comes from the German “Thal,” which means valley and gave its name to a productive Bohemian silver mine, which later issued much sought-after coins (‘thalers’ became dollars). “A Scottish engineer named John McAdam, in the early part of the of the nineteenth century, would perfect the technology of road building using layers of stone and gravel and give his name (slightly misspelled as macadam) to the process…” The term civil engineer evolves because until the 1750s most engineers worked for the military. The “right whale” was the one that “was easy to catch, and floated when dead.” James Gordon Bennett, founder of the New York Herald, first coined the word ‘leak’, in the 1830s, to describe “stories slipped to reporters by politicians for their own purposes.” Thomas Edison invented the world “hello.” The word “debugging” literally comes from the insects that got into the vacuum tubes of early computers and made them run poorly.

As recounted in Gordon, the story of American capitalism is a triumph of native invention. Colonists and pilgrims arrive in what one Puritan calls “a howling wilderness,” cultivate gardens full of corn, tobacco, and wheat, circulate currencies of convenience, establish banks and stock markets, mechanize farms and factories, lay railroad track, welcome immigrants, endure the odd panic or recession, grow rich on foreign wars, and finally bestride the world’s markets with iPods and Wal-Mart. Near the conclusion he writes: “The late 1990s in the United States were the greatest period of wealth creation in the history of the world.” But it is a period of economic growth that has antecedents, for example, in the railroad industry, which in 1830 had, nationwide, 23 miles of track and which, by 1860, had laid down 30,626 miles of rail.

* * *

If Gordon’s book were only an invitation to celebrate the Robber Barons’ Ball, it would not be worth plowing through its 419 pages. But where the argument becomes more subtle and provocative is in his perspective on the history of American money and banking. Because the US was founded in a new world without trade guilds or Venetian banks, its financial markets started nearly from scratch. Since the drafting of the constitution, the argument about monetary policy has defined many of the fissures in the country’s political and economic debate.

In the last almost two hundred and fifty years, the nation has failed to reach agreement on whether the success of American enterprise is a tribute to efficient, self-correcting markets, inventive genius, and hard work or whether the American economy is a succession of rigged markets, government bailouts, and inside trades. For example, the 1824 Supreme Court decision, “Gibbons v. Ogden,” is described as the “Emancipation Proclamation of American Commerce,” in that it freed interstate commerce from local, state-enforced monopolies. But the historian Charles Francis Adams, as quoted in Gordon, describes an earlier-day Enron, Crédit Mobilier, as follows: “The members are in Congress; they are trustees for the bondholders; they are directors; they are stockholders; they are contractors; in Washington they vote the subsidies, in New York they receive them, upon the plains they expend them, and in the ‘Crédit Mobilier’ they divide them.”

Many arguments about the nation’s concentration of wealth have been focused on whether the United States needed a national bank and a single currency. One reason no one liked the economic consequences of the Continental Congress or the Articles of Confederation is that financial markets were multi-ring circuses, giving rise to the phrase “not worth a continental,” to denote worthless paper currency. During the drafting of the Constitution and the George Washington presidency, Alexander Hamilton supported the creation of a quasi-national bank (although the government would only hold 20 % of the shares), and his redemption of near worthless revolutionary war bonds, at par, is an example either of early monetary prudence and the first step toward a sound national currency, or a scam worthy of the 1980s savings and loan bailouts or the taxpayer subsidies for Chrysler and Long-Term Capital Management. Opposed to the Federalist national bank were the Arcadian visions of Thomas Jefferson, who believed that “banks are more dangerous than standing armies,” and who saw the U.S. economy as a variation on a landscape painting—the province of yeomen and village markets, not bankers on bended knees to kings and princes.

Hamilton got his Bank of the United States, although it disappeared in 1811, and later Andrew Jackson shuttered the Second Bank of the United States. Nor did the U.S. get a true central bank until 1913, when the Woodrow Wilson administration created the Federal Reserve Bank and its regional branches. Gordon writes: “Thomas Jefferson, one of the most brilliant men ever to live, was psychologically unable to incorporate the need for a mechanism to regulate the emerging banking system or, indeed, banks at all, into his political philosophy.” For most of the nineteenth century, without an instrument either to regulate banks or the liquidity of the financial system, booms and busts were an inevitable part of the laissez-faire system. Gordon concludes that: “bank failure, thanks in large part to Thomas Jefferson and his political heirs, was to become as American as apple pie.”

During this period of frontier capitalism, banks were local affairs, closer, in today’s terms, to Web sites or supermarkets than branches of Bank of America. Gordon writes: “Still others were known as wildcat banks because their headquarters (the only place their notes could be redeemed for gold and silver) were located ‘out among the wildcats’ where they were, quite deliberately, hard to find.” In addition, it was the banking system, not the U.S. Treasury, that was responsible for the circulating currency. “In the 1850s,” Gordon describes, “there were more than seven thousand kinds of more or less valid banknotes in circulation and more than five thousand that were fraudulent or counterfeit.” Actually as early as 1690, the American colonies had created paper money. Warehouse receipts, indicating crops held in storage, functioned as early money. Bank drafts were cut in half, into quarters, and then eights (hence “pieces of eight”). Later goldsmiths floated vouchers that could be redeemed for gold. At the outbreak of the Civil War, Gordon recalls, “the number of paper money issues in circulation numbered in the thousands and created a monetary cacophony quite as bad as the colonial hodgepodge of bits of foreign coins, warehouse receipts, and provincial letters of credit.”

* * *

It took the Civil War for the United States to adopt a national currency. A run on confidence after the engagement at Fort Sumter sent American gold to vaults in London and Paris. President Lincoln had no choice but to detach the Northern economy from the gold standard. He noted wryly that “the bottom is out of the tub” as he watched the country’s gold reserves retreat as hastily as Union forces at Bull Run. In their place, he had Congress authorize the Treasury to issue paper money, so-called “greenbacks,” because, as Gordon writes, “they were printed in green ink on the reverse.” After that, legal tender was either greenbacks or the drafts of nationally chartered banks.

With the passage of the act creating the Federal Reserve Bank in 1913, Thomas Jefferson finally lost his argument with the moneychangers. Despite his faith in free enterprise, Gordon concludes that central banking alone is the greatest weapon to keep banks and currency sound, and the economy on an even keel. He believes Jefferson’s hostility to banks gave the nineteenth century endless cycles of boom and bust. At the same time, it was the US central bank, according to Gordon, that accelerated and locked in the 1930s Depression. He writes that “the Federal Reserve moved aggressively to defend the dollar and maintain the gold standard as foreign central banks and investors moved to repatriate gold. It was an utterly disastrous decision, perhaps the greatest of all the mistakes made in these years.”

By most accounts the Depression was the perfect storm of economic mismanagement. As the Fed raised interest rates to defend the US dollar, commercial banks, in turn, called in loans or foreclosed on mortgages. But deflation in the US market made it that much harder for farmers or other debtors to repay their loans. To make matters worse, President Hoover then asked Congress for a tax increase so that he could balance the budget. Congress dutifully went along with the request, and then raised the stakes in this game of incompetence by passing the Smoot-Hawley Act, which increased a variety of import tariffs. Higher interest rates, taxes, and tariffs choked economic development while the accompanying deflation left debtors unable to pay off their loans, thus collapsing more than 5000 banks. Gordon believes than opposition to centralized wealth froze the government’s ability to respond to the 1929 stock-market crash, and he cannot help but attribute some blame for the Depression to his favorite whipping boy, writing about Congress in 1931 that “the ghost of Thomas Jefferson was abroad in the its halls.”

In the glory days of American capital, when recession had threatened the American economy, wealthy industrialists, like J.P. Morgan, had stepped up to buy gold, securities, or collapsing railroads, and the panics had been averted or, at least, minimized. In the modern era the government has become the benevolent robber baron, and, in theory, Depressions are no longer possible because the Federal Reserve can pump enough liquidity into the system to keep banks solvent and consumers in credit. After the attacks of September 11th, which had followed the collapse of the technology stock bubble, a lingering US recession might have been among the damaged collateral, had the Fed not intervened. In the meantime, the US has run up unprecedented budget and trade deficits, at a time when the oil supply is tight and real estate is as expensive as Dutch tulips. But if I am reading Gordon correctly, he concurs with the Reagan administration in believing that “deficits don’t matter.”

* * *

Here’s one of the ironies of American economic history: that backing currency with gold, balancing the budget, running a trade surplus, avoiding wars, and letting the market sort out the good banks from the wildcats, is, in general, bad for the economy. The business of America flourishes in times of war (during WW I, GM’s stock climbed from 39 to 500), responds favorably to government subsidies (New York State financed the Erie Canal), lives well off the government’s easy money (during WW II, the national debt went from $43 billion to $296 billion), and doesn’t mind bank runs so long as the government is the lender of last resort (cf. the Reagan administration’s $200 billion bailout of the savings and loan industry). Native inventiveness and hard work certainly count for something, but there’s nothing like other people’s money, especially that of the government, to jump-start economic activity.

Aligned against these deficit-spending interests have been the likes of Thomas Jefferson (who opposed central banking), John Adams (who said: “Every dollar of a bank bill that is issued beyond the quantity of gold and silver in the vaults represents nothing and therefore is a cheat upon somebody”), Andrew Jackson (who devoted his presidency to paying off the national debt and getting rid of the Second Bank of the United States), and even the much maligned Herbert Hoover (who, in the teeth of the Depression, tried to balance the budget). Although these men had their differences politically, all of them associated moneyed interests with the European aristocracy that had been swept away in the American Revolution. Wealth was something found on farmland or in a producing factory, not deposited in banks or hedge funds, with those William Jennings Bryan, quoting Thomas Carlisle, called “the idle holders of idle capital.”

Woven into Gordon’s history is an excellent summary of American taxation. As he writes: “Governments have only three ways to raise money to pay their bills. They can tax, they can borrow, and they can print.” After Hamilton paid off the revolutionary war debt at par, the government relied mostly on import tariffs to fund its relatively moderate expenditures. Only during the Civil War did the government impose an income tax, which lapsed during the period of Reconstruction. It was not until the administration of Woodrow Wilson, and with the costs of World War I, that America got a federal income tax of more than 50 percent (in the Civil War it was 3 percent). FDR imposed a tax on inheritance and later introduced the idea of withholding a portion of everyone’s income. When tariffs were the source of government revenue, Gordon notes that the national debate was between “sections of the country.” New England mill owners wanted high tariffs on cloth. The South wanted low tariffs. “With income tax, the debate was now one between economic classes.”

Although Gordon has many kind words for the likes J.P. Morgan, Herbert Hoover, and John Jacob Astor (whose “only regret” on his death bed was not having bought all of Manhattan), I sense between the lines of “Empire of Wealth” a grudging appreciation for Keynesian economics. Jefferson and his oft-quoted ghosts preferred the economy divided among forty acre plots and mules. In opposition, Hamilton and the Federalists believed in central banking, an industrial class, and the occasional government bailout, beginning with those revolutionary-era bonds.

Applied to the modern era, the government of George W. Bush would seem to be living the Federalist dream. The trade deficit is close to $1 trillion. 25 % of all mortgages are valued at more than 80 % of the appraised worth of the financed properties. In the last six years the accumulated budget deficits have approached $2 trillion. Jefferson and Jackson should be turning in their graves. But clearly the joke is on fiscal probity, at least when it comes to a nation. For all the Bush administration’s war mobilizations and spendthrift habits, from 2002-2005, real GDP grew more than 3 % in 10 successive quarters. Alas, in this instance, the robber barons bailing out American markets were not the heirs of J.P. Morgan, but leveraged customers, delirious in the aisles of Home Depot, who have maxed out their home equity lines.

Gordon ends his book on September 11, 2001, with a quote from Cicero (“the sinews of war are infinite money”) and a saber-rattling conclusion: “The American economy at the dawn of the twenty-first century was more nearly capable of producing those sinews than any other economy the world has ever known.” In that sense, the United States should prevail in the war on terrorism as it did in the Cold War—by spending the enemy into submission. But when you look at the Battle of September 11th, the costs to the attackers were some Wal-Mart box cutters, 19 plane tickets and flight-school tuition in Florida. In response, the American government has spent more than $1 trillion on homeland security and foreign wars, not to mention posting runaway trade and budget deficits. For those amounts, the US is mired in Iraq, and the enemy can enlist suicide bombers from recruitment posters that run daily on global television. Which side is burying the other with the sinews of expenditure?

Monday, March 13, 2006

Branch Davidian Waco

Not long ago at Baylor University, I found it impossible to be in Waco, Texas and not to try to find the world of David Koresh that Attorney General Janet Reno had reduced to ashes. In another version of this history, it was Koresh himself who put his own parish to the torch. But the few people that I asked about the Branch Davidian house didn’t know exactly where it was located. It was only later that I met a professor of journalism, Sara Whelan, who was willing to track down its location. She had recently escaped from New Orleans to Waco, and thus she still had a newcomer’s curiosity. We stopped at an Interstate tourist office, and a few minutes later Professor Whelan proudly emerged from the building with pre-printed directions to “Mount Carmel,” the formal name of the building complex that, in April 1993, burned to the ground after officers from the Federal Bureau of Investigation (FBI) and the Bureau of Alcohol, Firearms, and Tobacco (ATF) moved in with tanks and nerve gas.

In trying to find the Double EE Rand Road on lonesome prairie, we made a few wrong turns and actually pulled into the driveway of the Double EE Ranch, which is as impressive as that of J.R. Ewing’s Southfork. A ranch hand corrected our mistake—we had turned left one road too early—and in a few moments we parked Whelan’s car on the edge of Mt. Carmel, in front of a makeshift museum that had a hand-painted sign offering tours of the grounds for $5. A few hundred yards into the property is a newly built white church. Between the road and its front door there are rows of freshly planted trees and small headstones, memorializing the names of the 81 Davidians who died in the1993 firefights. In effect, the Koresh church (although this is contested within the sect) still owns or controls the land, which is used partly for the congregation and partly as a parable on freedom of religion and government violence.

If, when I had stood in the drive of the Koresh estate, I had been asked to recount the events that had defined the first year of the Bill Clinton presidency, I would have said trigger-happy members of the FBI and ATF had attacked a rural commune—one that worshipped polygamy and guns as much as the second coming of Christ. I believed Attorney General Reno had used what is called “excessive force,” but I knew nothing about the cult’s leader, David Koresh, other than sensing that he and his followers had gotten their wish of having their judgment day coincide with a fiery conflagration. But mostly I would have been guessing, not having seen any of the siege on television, and never having read any histories of either Koresh or his followers. Nevertheless, standing in the Texas sunshine, I believed Mt. Carmel to be a variation on the themes of Jonestown, only this time the ATF had spiked the Kool Aid.

It was only several weeks later, after leaving Waco, that I managed to read several histories of the 1993 barn burning. In Waco itself, the local Barnes & Noble had no books on either Koresh or his demise. (The city would prefer more positive associations.) But from the Internet I purchased The Ashes of Waco: An Investigation by Dick J. Reavis, which from reading the promotional quotes I hoped might be free from the many conspiracy theories that this Armageddon has inspired. From Reavis, I was finally able to connect the grounds on which we parked Whelan’s car to the events of winter and spring, 1993. Alas, the museum promising $5 tours was closed, and the Mt. Carmel church doors were locked. Nor were any pilgrims on the road. Thus we had walked the grounds in eerie silence, as if on a movie set that had lost its audio feed or on a civil war battlefield where it was difficult to recall the exact circumstances in which Union soldiers had ambushed men, women and children it had deemed Rebels.

To give a bare minimum of the church’s background, it is necessary to start by saying that David Koresh was his adopted Biblical name, and that the leader of the Branch Davidians (not a name the group used to describe itself) was born Vernon Howell. He grew up in a broken Texan home, his mother having been 14 when he was born and his father absent from his life. Long before Howell drifted to Waco in 1980, the rural complex of wooden building had been associated with a schismatic group of Seventh-Day Adventists. Reavis calls them “perhaps renegade, but heirs nonetheless” of the “eight-million member Seventh-Day Adventist (SDA) Church,” which, among others, can count among its early believers John Harvey Kellogg, the father of corn flakes. In 1942, a splinter group had renamed itself the “Davidian Seventh Day Adventist Association,” and it was from a lease in that name on Mt. Carmel lands that the press got the notion that Koresh’s followers should be known as “Branch Davidians.”

In fact, textual inspiration for the Koresh faithful came from the Seven Seals in the Book of Revelation, and those living at Mt. Carmel—a potluck of communal Europeans, Australians, and Americans—would have thought themselves nothing more exotic than students of the Bible, with emphasis on the Seven Seals. Although some of the men trained with firearms, it was not a gun cult, as you would find in rural Montana. Indeed, Reavis writes: “The people who had lived at Mt. Carmel were more akin to the Shakers and to the Onieda community—parts of today’s Americana—than to the members of the Charles Manson cult.” But if all they were doing out there on the Double EE Ranch Road was reading the Bible or baking communal bread, how did it come to pass that they found themselves under siege and then under attack from the combined arms of the FBI, the ATF, and the National Guard?

In reality, the G-men were attacking David Koresh more than they were laying waste to a rural congregation, near nothing and no one, 12 miles outside the city of Waco. Deserved or not, he had gained a reputation among local law-enforcement officials as a new-age preacher who was dredging up quotations from the New Testament to justify polygamy, dope dealing, and the stock-piling of assault rifles. In 1992 a UPS man had sounded the alarm after he spotted some hand grenades at the church.

Koresh had become a marked man. While thundering in his pulpit, he had found time to father 17 children, some with girls under the legal age of consent and others by women married to fellow Davidians. He had also amassed a formidable gun collection, notably from a co-religionist who made the rounds of the Texas gun shows. Although a man of the cloth—he told his flock that he was a third Christ, “a mortal embodying the spirit of God,”—Koresh enjoyed jamming with a communal rock band long into Texas summer nights. Had the Davidians not been armed, the encampment might well have seemed an out-take from Life of Brian. (Brian’s mother: “He’s not the Messiah. He’s a very naughty boy.”) In the makeshift cemetery in front of the rebuilt Mt. Carmel church is the wreckage of a Harley Davidson, a Koresh favorite when he wasn’t preaching about the “investigative Judgment of the dead.” One of his followers recalled: “David didn’t read anything but the Bible and Camaro magazines.”

In retrospect, had local police officials wanted either to question or arrest Koresh (although being a Messiah is not a crime in Texas or anywhere else), all they needed to do was pick him up on one of his frequent trips into Waco. The residents of Mt. Carmel may have had their own views on the Book of Revelation, not to mention their special take on marriage laws, but they did come and go from their compound. Instead the ATF cooked up one of those police raids that you see on television when it is airing “Real Tales from the Highway Patrol” or covering some narcotics bust.

At around 10 AM on February 28th, various law-enforcement officers, backed up by armed helicopters, tried to take Mt. Carmel by storm. Standing at the front door, Koresh was badly wounded in the initial assault. But in an amazing feat of arms (no matter which side of this story you believe), the Davidian militia fought off the ATF raiders, including the armed helicopters that had strafed the church buildings. 20 attackers were wounded, and four were killed. The Davidians suffered 6 killed. In a truce negotiated over the phone, the government withdrew from the property and laid down its siege lines, which isolated the compound for almost two months. Hence began the Texas standoff that attracted more than 1000 members of the world media, not to mention the FBI and U.S. army brass, including those in General Wesley Clark’s chain of command, who later would have supplied the assault armor.

On April 19th, under rules of engagement signed by Attorney General Reno, the government attacked again, this time using tanks to pierce the Mt. Carmel Center’s walls and to shoot canisters of CS nerve gas into the wooden compound. (As the tanks rolled forward, an FBI public address system blared: “This is not an assault. This is not an assault.”) Not reassured, the Davidians fought the mechanized agents, although this time the buildings caught fire and consumed all but nine of the 84 residents, including twenty-one children under age 16. From these ashes have come the conspiracy theories, many of which dwell on who started the fatal fire.

In the accounts of the US and state governments, Koresh devoured his own, as if fulfilling a prophesy in the Book of Revelation, rather than submit to the laws of civil society. Other histories, however, explain how CS nerve gas can become combustible, especially when shot by a tank into a wooden building. None of the nine Davidian survivors saw the fire start. But there is agreement that Koresh had the corridors at Mt. Carmel lined with hay, either as part of its primitive defense network or to feed the flames of judgment day. (During the standoff, Koresh told an FBI negotiator over the phone: "you're behind the Bradley [armored personnel carrier] we're here behind the walls of sheetrock.")

In weighing the evidence against Koresh, Reavis, who has been Nieman Fellow at Harvard University and who was an editor at Texas Monthly, disputes much official testimony. He quotes numerous witnesses to say that Koresh did not deal in drugs, and he cites the FBI, itself, to confirm that child abuse was not a variant at Mt. Carmel. Uncomfortably, he also reminds readers that “…there is no federal or Texas statute against stockpiling arms; anyone who can legally buy one weapon can legally buy a hundred, or even a thousand of them.” He describes Koresh the progenitor and Koresh the gunsmith as inhabiting legal worlds of his own construction, backed up by odd quotes from the Bible. (He once described Mt. Carmel’s extraterritorial status with a reference to Vatican City.) But the Waco story lays bare all sorts of troubling constitutional issues about freedom of religion, the right to bear arms, what constitutes a church, private property, and the uses of federal troops to enforce state laws. Is it Biblical or state law that should govern what goes on in the backseat of a Camaro?

As the church doors were locked and the museum was closed, there wasn’t much to see on the grounds of Mt. Carmel. Near the church are the burned remains of a bus and numerous headstones, as you would find on a battlefield. We lingered over the marker that reads: “In remembrance of all the men, women and children who were victimized and brutally slaughtered in the bombing of the Oklahoma City Federal Building on April 19, 1995. We pray that they and their families find comfort and peace in Our Lord.”

Two years to the day after Mt. Carmel burned, Timothy McVeigh detonated his U-Haul explosives in anger over what he perceived as government-sponsored murder of the Davidians. During the initial siege at Waco, McVeigh had even tried to get close to Mt. Carmel and, while near the barricades, had passed out leaflets that read: “A Man With A Gun Is A Citizen, A Man Without A Gun Is A Subject.” But I still find it difficult to decode the symbolism of this monument, placed where it is. Is it just condemning all random violence or acts of terror? Does it imply indirect sympathy with McVeigh who believed that ATF officers were at work in the Alfred P. Murah Building in Oklahoma City? In a larger sense, all the monuments in front of the church, including those placed by the ATF, raise the difficult question about who are the victims at Waco: the dead government officers, the Davidian women and children, or the US Constitution?

Leaving Mt. Carmel, Professor Whelan and I stopped at the only other house on the road and chatted at length with a man who for years had been David Koresh’s next door neighbor. I never did learn his name, but during the siege the FBI had taken over his house—and only months later had paid him compensation. He now regretted that he had come to live across the street from a cult, and he told the story of how late one night, a family had escaped from Koresh’s heavy-handed control and asked the neighbor to drive them into town, which he did. The next morning, when an angry Koresh confronted him about hustling away these wayward sheep, the neighbor played it coolly dumb, saying: “But, David, I thought you had wanted me to take them into town.” His feeling was that Koresh, himself, had ignited the last fire, but he hardly believed the Davidians a threat to anyone but themselves. He and his wife had kept a polite distance from the commune, which often acted as though the Messiah had returned as Led Zeppelin. But the rock music annoyed the neighbors more than the guns or the Bible classes. (What house in Texas isn’t stockpiled with rifles and Bibles?) And the neighbor could well be the source of a quote in Reavis: “I’ll tell you what does bother me. This is a big fuss over nothing. These people have been here a long time and never bothered nobody.”

Sunday, March 05, 2006

Third-Party Time

I must say that I cannot get excited over the furor about whether a holding company from the United Arab Emirates will compromise the national security of the United States if it owns the shares of P & O—the Peninsula & Oriental Steam Navigation Company of yore—which, in turn, has interests in various East Coast ports. As I get the drift of this outrage du jour, the U.A.E. is feared to be in the murky shadows of Arab fundamentalism, if not an al-Qaida oasis. Thus the risk on the waterfront is that containers swinging ashore in Staten Island or Baltimore could be the primitive delivery system of a so-called dirty bomb, the kind of nuclear Molotov cocktail that everyone fears Osama bin Laden is brewing under his desk in the Tora Bora.

The reason I can’t get excited is that if you decide that Arab capital is seditious or un-American, what kind of loyalty oath is required of the Fortune 500, which is replete with shareholders from shores more hostile than those of the U.A.E’s Barbary capitalists? For example, a Saudi Arabian prince, for a while, controlled about 10 percent of Citibank. (Dubai had 2 of the 19 hijackers; Saudi had 16.) Interests in American ports, already, are spread among a number of international companies. On other fronts German conglomerates own most of the large American book publishers, not to mention defense contractor Chrysler. Or take, for example, the national debt, which is largely pawned to countries like Japan, South Korea, China, and Taiwan. Why get worked up about container facilities in Philadelphia (essentially parking lots for large boxes) but turn a blind eye to the fact that the American dream is carrying a large mortgage with Far East lenders that have had—how shall I put it—mixed historical relations with the United States.

At the same time I take the theatrics over terminal investments to be the first skirmishes in the 2008 presidential election, which thus far has lacked both candidates and emotion. Among those in the bully pulpit, railing against terror’s strategic plans, is Senator Hilary Clinton, who clearly is looking to hoist the Bush administration on its own petard of homeland security. With U.A.E. shareholders, the senator has a good, safe menace—a convenient scapegoat without a lot of votes in the precincts of Nassau County. It’s a free shot at international capitalism, which can be cast as a bloated monster, one of Thomas Nast’s trust caricatures, not to mention a feel-good story for the Longshoremen’s Union, who cannot want their stevedores unloading the cargoes of terrorism. Even better, anger at Dubai Ports World outflanks Karl Rove’s permanent state of emergency, in that it shows the Bush administration cutting the corners of favoritism by quickly and quietly approving the transaction, and thus putting the interests of fat cats above those of guard dogs.

The question of who owns the shares of P & O is an electoral sideshow, something that cannot easily translate into congressional hearings or the storyboards of political action committees. If the Democrats and Republicans have to campaign on who will do a better job witch hunting the share registries of American stock markets, my sense is that both of the major parties have run out of serious ideas. Indeed, I often think it remarkable that America has been able to hang on to its two-party system for as long as it has, given that the parties strike me as being distinctions without any differences.

Analyze this: while Senator Hilary Clinton tries to position herself as the Democratic nominee for the 2008 election, her former-president husband, in theory the leader of the Democratic opposition, has decided that he and his party’s image are best served if he plays the role of the Bush family’s best friend. On any given day, he and the presidents Bush can be seen giving comfort to hurricane or tsunami survivors, if they are not squeezing in a round of golf. What this tells me is that parties count for little in the game to govern America, which since the 1960s has been run by a series of interchangeable political oligarchies—ones that have names like Kennedy, Bush, Clinton, and Dole. Indeed since 1976, a Bush, Dole, or Clinton has been a candidate in every election. If we are to believe those handicapping the 2008 election, the chances are good that a Clinton or a Bush will again be on one of the tickets, assuming that they don’t dispense with democratic niceties and run the country with a triumvirate of Hilary Clinton, Jeb Bush, and Elizabeth Dole.

What do the major parties stand for? I wish I knew. In theory, and according to the received wisdom, Republicans favor big business, budget restraint, low taxes, free trade, and isolationist tendencies in foreign policy. Imagine someone like Robert Taft or Henry Cabot Lodge. In contrast, the Democrats are there for labor unions, federal programs, farm subsidies, environmental protection, social security, and the odd war to end all wars. Hubert Humphrey comes to mind. Then what explains the seemingly Republican administration of President Bill Clinton, who balanced the budget, busted unions, posted surpluses, threw bones around Wall Street, and restricted jingoism to bombs over Belgrade? By extension, the current Bush administration would appear to have cornered the same markets in deficit spending that so enticed Democratic President Lyndon Johnson to go abroad in search of monsters and, at home, to federalize everything from school lunches to oil depletion allowances.

In the higher echelons of government, I fear, America is a one-party state, at service only to maintain the privileges of power. Party politics remind me of post-republican Rome, after the death of Caesar, when Cato was called “a doomed man in a doomed state” and when Augustus managed “to break the old combinations of nobles and clients and organize all the citizens of Rome in a single ‘party’, or, more correctly, into a group of clients, united in loyalty to the ruler.” What else explains the current absence of a Democratic opposition, save for some anger against port shareholders or the odd denunciation of torture, at a time when the country is losing a colonial war abroad, and the national debt is $8.2 trillion, of which your family’s share is $131,000?

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In the American past, whenever political parties have failed to offer the electorate choices on issues or government, third-party candidates have emerged. It happened in 1912, 1948, 1968, and 1992, although during many other elections through the 20th century third-party candidates both appeared on the ballots and in some cases may have altered the outcome of the election. Who does not, for example, believe that in 2000 Al Gore lost Florida, and thus the presidency, because of the presence on that confusing ballot of the consumerist, Ralph Nader?

As a joker in the American political deck, third parties lend drama and excitement to what can otherwise be as humdrum as choosing between a Buick and a Pontiac. They even have better names than Democrats and Republicans. Who wouldn’t want to be a member of a party called Whig, Mugwump, Anti-Masonic, Know-Nothing, Abolitionist, Free Soil, Greenback or Populist? But they never seem to get anywhere against the entrenched interests. Nevertheless, in recent weeks, I have spent considerable time reading and thinking about third parties—speculating that 2008 might be yet be another wild card election, decided by a candidate for a party that has yet to exist, but which could go by the name Abortionist, Second Amendment, Divine Inspiration, Flat Tax, Out of Iraq, Constitutional, or, to name my own cause, Anti-Astroturf.

Leaving aside 1860 and the accidental election of Abraham Lincoln, the mother of all third-party elections was 1912, a story recently retold in James Chace’s “1912: Wilson, Roosevelt, Taft and Debs—The Election That Changed The Country.” Chace, who died last year, served as editor of “Foreign Affairs.” In 2004 he published his account of how Theodore Roosevelt, running on the Progressive line (nicknamed the Bull Moose Party), received 27 percent of the vote, thus effectively handing the presidency to Woodrow Wilson. In that election, President Taft, standing for re-election as the Republican, was consigned to 23 percent of the popular vote and 8 electoral votes—Vermont and Utah—as if maybe his only supporters were Mormons. The irony is that Roosevelt had picked Taft to succeed him in 1908, but Chace writes: “Theirs was a breach that would never be fully healed.” At his third-party nominating convention, Roosevelt proclaimed: “We are warring against bossism, against privilege social and industrial,” positions he defended on another occasion by saying: “If that is revolution, make the most of it.”

I disagree with Chace that the 1912 election “changed the country.” But it was colorful. Roosevelt, in addition to breaking with his protégé Taft, called Wilson “the apothecary’s clerk.” Debs, a socialist, ran for President while awaiting a Supreme Court decision on whether, in fact, he had violated the Espionage and Sedition Acts. Wilson dreamed of running as a populist and as a reformer, but, as another biographer wrote, the preacher “had a profound contempt for the Farmer’s Alliance, the Populists, greenbackers, bi-metallists, trades unionists, small office seekers, Italians, Poles, Hungarians, pensioners, strikers, armies of unemployed.” In fact, he owed his nomination to machine politicians. Chace breaks down the positions of the various candidates as follows: Roosevelt (“pragmatic nationalism”), Wilson (“self-righteous moralism”), Taft (“judicious conservatism”), and Debs (“socialist absolutism”). But he might well have quoted the McKinley power broker, Mark Hanna, who said, “all questions of government in a democracy are questions of money.” In 1912 the Democrats had the most money.

What’s interesting about the 1912 election is how skewed were the positions of the candidates, in relation to their party’s campaign buttons. Nominally one of the fathers of American conservatism, Teddy Roosevelt, according to Chace, “endorsed the graduated income and inheritance tax, a comprehensive workmen’s compensation act, prohibition of child labor, downward revision of the tariffs, and increased power for the Interstate Commerce Commission to supervise all corporations engaged in interstate business.” Labor agitator Debs spent as much time in prison as he did running for the presidency (he did both about five times). He was associated with radical socialism, although the man he most admired was Abraham Lincoln, for his “education, frugality, integrity, veracity, fidelity, diligence, sobriety, and charity.” Taft, a strict constitutional constructionist, was depicted as holding the moneybags of the party bosses, who instead were selling Saint Woodrow as if he were a patent medicine. Wilson won forty states and 435 electoral votes, and then spent the next four years assiduously incorporating the Bull Moose platform into Democratic sponsored legislation.

The eloquent American historian and Columbia University professor, Richard Hofstadter, observed that “third parties are like bees; once they have stung, they die.” Progressivism as a presidential party lasted a few more decades. But it never approached Teddy Roosevelt’s high water mark of 27 % of the popular vote, because by 1916 the Democrats had appropriated the third-party’s ideas. Wilson pushed through a federal income tax and various regulatory bodies. TR did try again in 1916 “to protect those who, under Mr. Wilson’s laissez-faire system, are trodden down in the ferocious scrambling rush of an unregulated and purely individualistic industrialism,” but during the 1916 campaign he was shot and by then, in any case, the Reverend Wilson was preaching from Teddy’s prayer book. He may even have fought the war to end all wars to get Roosevelt off his back.

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In 1924, Wisconsin Senator Robert La Follette got 17 % of the vote as a third-party candidate, although the Jazz Age preferred Calvin Coolidge (54 %) to either the Progressive senator or the Democratic corporate lawyer, John W. Davis, who himself only secured the Democratic nomination on the 103rd ballot. Coolidge beat both of them although he never left his house to campaign. (How could they tell?) But the evolution of the Progressive party confirms the thesis of political scientist, Ronald Rapoport, that the success of third parties depends on voters either “pushing” away from major parties or the “pull” or attractiveness of dissident candidate ideas. In that, they are almost the push-me, pull-you creations of that noted political thinker, Dr. Doolittle.

During the four presidential elections that gave victory to Franklin Roosevelt, third parties candidates were seen but not heard. Norman Thomas replaced Eugene V. Debs as the perpetual candidate on the Socialist line, and ran on every occasion between 1932 and 1944. But he never got more than one percent of the vote, in part because the major parties offered clear, divergent platforms. If you wanted to soak the rich, you voted for Roosevelt; if not, you went Republican. In 1948, leaving aside the grammatical tautology, there were two third-party candidates: Henry Wallace for the Progressives and Strom Thurmond under the States’ Rights banner (sometimes called Dixiecrats). But collectively those on the fringe only stirred regional, not national enthusiasm, winning less than 5 % of the vote, although the Thurmond breakaway candidacy was the beginning of the end for the Democrats in the Deep South.

One of Thurmond’s spiritual heirs was Governor George C. Wallace of Alabama, who in 1968 ran on the American Independent Party, along with General Curtis Lemay, who thought the war in Indochina could be won if North Vietnam was “bombed back into the Stone ages.” (It was already there.) Pushing the segregationist line, Wallace got almost 14 % of the vote and 46 electoral votes, although it is not clear whether Wallace, nominally a Democrat, denied Humphrey a majority or Nixon a landslide. But as Rapoport has written: “All successful third-party candidates follow Wallace’s strategy of emphasizing the absence of a 'real choice' between the two major parties.” In 1972, after Wallace was wounded in an assassination attempt, his party ran a space orbiter by the name of John G. Schmitz (of National Rifle Association, John Birch, and American Legion credentials), who said during the campaign that “if people think you get up early, you can sleep until 11 AM.” He also came up with the campaign slogan that “When you’re out of Schmitz, you’re out of gear,” a play on the beer jingle of Schlitz. But Schmitz, with 1 % of the vote, didn’t even carry Milwaukee or make it famous.

Technically, in 1980 Congressman John Anderson was not a third-party candidate, in that he ran as an independent, without party affiliation. He won 7 % of the vote, but caused bigger damage to President Jimmy Carter in that he exposed the missing mojo in the Democrat’s presidency. In 1984 and 1988, the choices between the major parties, and their candidates were distinct (“Senator, you’re no Jack Kennedy.”), and thus no third-party candidates emerged. But that changed in 1992, when out of the thrilling days of yesteryear came that masked rider from the plains, H. Ross Perot, a Lone Ranger who, according to Rapoport and his co-author Walter Stone, changed the complexion of American politics more than any third-party candidate since Teddy Roosevelt.

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Rapoport and Stone, respectively chairmen of the departments of political science at the College of William and Mary and the University of California at Davis, have recently published “Three’s a Crowd,” an account of the 1992 election and the subsequent Perot phenomenon. One of the surprising conclusions from the book, published by the University of Michigan Press, is that while Perot may well have cost Republican George Herbert Walker Bush his chance for re-election in 1992, his followers influenced the subsequent Republican revolution—beginning with the 1994 Contract with America and culminating after 2000 with victories for the White House, Senate and House of Representatives.

Two descriptions from the 1912 election could be applied to H. Ross Perot. In describing the German Kaiser, Wilhelm II, Teddy Roosevelt once said: “I found him vain as a peacock.” And Hofstadter, in writing of the likes of Woodrow Wilson, spoke of “the ruthlessness of the pure in heart.” Despite his peacock looks and ruthless purity, in 1992 Perot got almost 20 million votes, 19 % of those cast, and denied Bill Clinton a popular majority. His nominating convention was, in effect, an appearance on the Larry King Show when he dared his supporters to get him on the ballots of all 50 states. Collectively 5.3 million citizens signed petitions for Perot, who then campaigned as a classic outsider—for deficit reduction, against immigration and the North American Free Trade Agreement (NAFTA), for term limits, and against government waste. But 1992 wasn’t a good year for the major parties. Despite earlier Gulf War popularity, President Bush the elder was laboring under a cratering economy while voters were having a hard time inhaling the nightlife of the Democratic candidate, Bill Clinton. As an aide said of his boss, Perot was someone there to “fix the damn problem.”

One reason that successful third parties “sting and die” is that one or both of the major parties make takeover bids of the insurgent ideas. Beginning in 1994, the Republicans courted Perot’s supporters and their issues, about which the Democrats were largely indifferent. But according to Rapoport and Stone, Perot’s faithful remain a loose but powerful cannon in American politics. When it rolled to the Republican decks, they won control of the Congress and finally the Presidency. Rapoport and Stone write that, after 1992, “the Republicans reached out to Perot and to the Perot constituency.” They conclude that: “By migrating to one of the major parties, Perot activists carried the potential to change that party’s stands on core Perot issues, such as reform, economic nationalism, and the federal budget.” Even though Perot himself polled only 8 % of the vote 1996 and by 2000 the Reform Party had become a joke—reduced to a scrum for federally-matched funding between the likes of Jesse “the Body” Ventura, Pat Buchanan, and Donald Trump—the bee’s pollen was already allowing the Republicans to flower.

Thinking he could tell me who might be elected the next president in 2008, I called Professor Rapoport at his William and Mary office, where he has worked since 1975. Other than having read his provocative book, I did not know him personally. But I do know and admire his parents, who have made The Bernard and Audre Rapoport Foundation a model of generosity for the causes of literacy and the disadvantaged—although their gift is not so much money but enthusiasm for individuals and ideals.

On the phone Ronald Rapoport compared the looming 2008 election with 1992, in that there is a burgeoning deficit, the aftermath of a Persian Gulf invasion, and little perceived difference between the major political parties. He still believes that the Perot constituency “remains distinctive,” an underground political current looking to vent its populist anger on one of the major parties. But the outcome of the 2006 mid-term election will give him a better idea if the conditions might be ripe, in 2008, for the emergence of a third-party candidacy. He emphasized that the “major parties have to create the opportunity for a third party.” He recalled a line from the book that “one of the ironies of the Perot movement was that it [nominally non-partisan] contributed to one of the greatest upsurges in partisan politics in American history.”

Rapoport speaks about political candidates, third parties, and presidential politics with insight and irony. He thinks the conditions could well be ripe for a third-party in 2008, with all its attendant threats to the established order. (Alexander Pope called political parties “the madness of many for the gain of a few.”) Rapoport speculated that if the 2008 election were between Hilary Clinton and John McCain, he could imagine the Perot bloc swinging toward the Arizona senator, who in 2000 gave his campaign bus the Perot sounding name, “Straight Talk Express.” Ironically, push me, pull-you Perotism might explain, after all, why Bill Clinton has become best friends with the Bushes. Is it to move Hilary’s image into the safe middle ground? Too bad for the Democrats that Perot doesn’t play golf.