Words Matter

Owen D Young, who served as president and chairman of GE from 1922-1939, told a story on himself (quoted in the Ida Tarbell biography) about his days as a young lawyer working for Stone & Webster. His assignment was to obtain streetcar franchises for the company in various cities, and he was particularly proud of the contract he negotiated with El Paso…it explicitly gave S&W the right to run trolley tracks “in every street, present and future of the city.”

Shortly after Young left El Paso, though, another guy–a real operator named Theodore Barnsdall–visited the city, and after paying $25000 to the owner of a tiny, mule-powered street railway (which Young had viewed as having no value other than the $50 that the mule was worth) got introduced to the city council. He also obtained a contract from the city–identical to Young’s except for the words “in the middle of every street, present and future.”

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Book Review: The Bloody White Baron

The Bloody White Baron: The Extraordinary Story of the Russian Nobleman Who Became the Last Khan of Mongolia by James Palmer

Special note: It was Lexington Green who brought this book to my attention.

The 20th Century was remarkable for its voluminous bloodshed and civilizational upheaval yet for inhuman cruelty and sheer weirdness, Baron Roman Nikolai Maximilian Ungern von Sternberg manages to stand out in a historical field crowded with dictators, terrorists, guerrillas, revolutionaries, fascists and warlords of the worst description. Biographer James Palmer has brought to life in The Bloody White Baron an enigmatic, elusive, monster of the Russian Civil War who is more easily compared to great villains of fiction than real life war criminals. Palmer’s bloodthirsty Mad Baron comes across like a militaristic version of Judge Holden from Cormac McCarthy’s Blood Meridian or perhaps more like Hannibal Lecter with a Mongol Horde.

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The USA/China Relationship: Obama’s Conflict of Interest

For years we’ve been selling China a lot of our bonds. We need the money and they want a safe place to put their money. Some people said that we were at their mercy, but really we had them by the balls. A big borrower always has leverage against his main creditor, because creditors want their money back and are reluctant to do anything that might interfere with the big borrower’s earning ability.

Since our government is increasing its spending substantially, and borrowing to cover much of the new spending, we need China more than we used to. If we can’t sell more bonds we will have to print even more money or raise tax rates even higher than is already planned. Either course of action would eventually be politically costly, perhaps ruinous, for the Obama adminstration. So Treasury Secretary Geithner has been spending a lot of time trying to persuade the Chinese to buy more US bonds.

I think it’s reasonable to ask what price our country will pay in exchange for Chinese financial cooperation (we are asking them to take more risk, after all), and whether the Obama administration has a conflict of interest. Obama can do things to benefit the Chinese government — such as by muting actions that we might otherwise take in response to China’s military expansion or its hostile behavior toward our ally Taiwan or its human-rights abuses or its lack of cooperation on North Korea — that will be costly for us but whose costs will not be obvious for years. Obama has a strong political incentive to get his expensive programs passed. Could his personal political interest be allowed to trump the national interest? It might if the rest of us don’t pay attention.

(BTW, we’ve also been selling a lot of our bonds to Gulf oil states. Might there be some worrisome quid pro quos there as well?)

Deterrence

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In October 2004, I visited the National Air and Space Museum in Washington DC. One of the exhibits there is a Minuteman III ballistic missile. It’s not a very impressive-looking object, and I hadn’t paid much attention to it on previous visits. But this time, I stopped in front of it for a while.

It was only about a month since the terrorist attack on a school in Russia, in which 186 children were murdered. And it struck me that had this missile ever flown, it would quite possibly have killed thousands of Russian children very much like those who were murdered by the terrorists.

I am not a pacifist or a nuclear disarmer, and I am not making a moral equivalence argument here; not in any way suggesting that American missileers are somehow similar to child-murdering terrorists. At the dawn of the age of strategic airpower, George Orwell summed up the situation: “If someone drops a bomb on your mother, go and drop two bombs on his mother.”

While the argument that the only defense against air attack was retaliation proved to be somewhat overstated during WWII, in which radar-directed fighters and AA guns did provide some meaningful defense against bombing, the argument was quite true throughout most of the Cold War era, given the existence of unstoppable ballistic missiles. I think that as a country we did the right thing in building and deploying Minuteman–and Atlas, and Polaris, and Trident, and the rest of them. But we must never forget that these things are the instruments of nightmares, and words like “deterrence” and “nuclear umbrella” and “massive retaliation” should never be allowed to hide the underlying realities.

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