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Post How Much Influence Do US Presidents Have on the Economy?
Created by John Eipper on 12/04/12 4:43 AM

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How Much Influence Do US Presidents Have on the Economy? (Cameron Sawyer, USA, 12/04/12 4:43 am)

John Heelan's analogy (19 November) between national policy and tankers is a good one, and relevant to the discussion about elections and policies. It reminds us that the effects of policies are often felt only years later, something people often forget. I think it is far too early to know from observing the economic performance of the US how good or how bad Obama's economic policies are. So far what we are experiencing is more the result of the policies of previous administrations.

Another important fact to consider is that US presidents do not actually have so much control over economic policy. Monetary policy is formulated almost entirely by the Fed, and Obama did not even appoint the Fed chairman who has been making monetary policy all throughout the crisis; Bush II did. Presidents have no power to spend money or impose taxes--that power belongs to Congress, and the House is in the hands of the Republicans. So ideas like "Obama is doing a pretty good job with the economy because my neighbor found a job last week" are ridiculous.  Obama has little to nothing to do with it--so far, at least.

Now presidents do influence economic policy, of course--they can invent their own programs and try to persuade Congress to implement them. If the president is a strong leader, and especially if he has a sufficient number of like-minded people in Congress supporting him, and if there is public pressure on Congress to cooperate with the President, then of course the President's ideas might become policy. In this manner, for example, both Carter and Reagan managed to push through significant economic and tax reforms in the late ‘70s and early ‘80s, the effects of which were felt for years later.

But Obama has not had much of a chance to shape economic policy. He took office just at the beginning of the severest economic crisis of our generation. An all-out world-wide depression was avoided by massive increases in the money supply, and deficit spending, measures which were taken all over the world. Obama had very little to do with this and there was not much controversy about what to do. Nearly everyone agrees that you can't increase taxes or cut spending when you are under threat of a severe economic contraction.

Politicians themselves exploit our ignorance of the complex and long-term nature of economic policy. As much as I respect Ronald Reagan, I really disapprove of his campaign shtick of asking the public "Are you better off than you were four years ago?" As if Carter had directly caused the recession of the late 1970s. Now Reagan had a very good understanding of economics, and was perhaps the best economist of all of our modern presidents. I have no doubt that he understood that the economic malaise of the late '70s was caused by the policies of the Johnson and, especially, Nixon administrations, who spent (that is, persuaded Congress to spend) vast sums of public money on an utterly useless war, who vastly expanded the Federal government, took us off the gold standard and immediately debased the currency, and then implemented wage and price controls, with disastrous effects. The reforms which delivered us from this madness and turned us back into something more like a normal, healthy market economy were actually started by Carter, who especially deserves credit for the sharp turn in monetary policy which ensued after Carter appointed Volcker to the Fed. Reagan continued all of these policies, and left Volcker in place, and then added to them the logical step of tax cuts. Reagan really should have given Carter some credit.

Now Carter and Reagan were presidents who really did influence economic policy. Bush I and Clinton were not. Clinton deserves credit for pushing through a very significant welfare reform program, but otherwise he simply coasted on the achievements of the Carter and Reagan administrations--the good economy of the Clinton years was the direct result of the reforms of the late ‘70s and early ‘80s, which like all significant reforms take years to work their way through the system.

Unfortunately, Bush II was another president who influenced economic policy, this time, however, for the worse. Bush II's mission in life, after the September 11 attacks, was to make war in the Middle East, and make war he did, with unprovoked invasions of two countries, followed by lengthy and vastly expensive occupations. In order to put together support for these incredibly foolish wars, which wasted vast amounts of public wealth for no benefit to US interests whatsoever, Bush II allowed Democrats in Congress to spend just about whatever they wanted to. As a result of expensive wars and ballooning domestic spending, we ran very large deficits just at a time when should rather have been paying down our debts--during a period of fairly strong growth. This left us in the worst possible position when the 2008 global financial crisis started--already deeply in debt, just when we need to take on more debt in order to prevent the economy from melting down.

So this is the mess which Obama inherited, and it would be ridiculous to blame him for it. Likewise, it is too early to give him any credit for anything at all which concerns economics. Not only has not enough time gone by for the effects of new economic policies to be felt, but there haven't really even been any significant economic policies from the Obama administration so far. The most important role in economic policy has been played, during the last four years, by the Fed chairman appointed by Bush II. If in his second term, Obama pushes through a sharp increase in taxes which kills off the recovery, now then we might have something to talk about. Or if, on the other hand, he got us out of Afghanistan and sharply cut military spending, averting a debt crisis and laying the foundation for a healthy recovery. But with the House in the firm grip of the opposing party, I really don't know how much chance he will have to do any of these things. My guess is that Obama will not turn out to be one of those presidents who had much influence on the economy. We shall see.

JE comments:  That Carter did a poor job with the economy is one of those truisms of US collective memory, rather like the notion of Clinton's Midas touch.  Cameron Sawyer with his characteristic out-of-the-box thinking invites us to question these shibboleths.  I thank him for this interesting summary of fifty years of US economic policy.

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  • How Much Influence Do US Presidents Have on the Economy? (Paul Levine, Denmark 12/05/12 1:55 AM)

    Cameron Sawyer's 4 December contribution is, as always, insightful (though we may
    disagree on Ronald Reagan's presidency). But for a perceptive look at
    the failure of Obama to deal successfully with the banking crisis, I can
    recommend Ron Suskind's Confidence Men: Wall Street, Washington, and
    the Education of a President

    JE comments:  Paul Levine has become one of the best WAISers for recommending follow-up reading.  I'd love to visit Paul's library some day.

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    • Suskind's *Confidence Men* (Cameron Sawyer, USA 12/05/12 7:36 AM)
      It is not quite right to write about a book which one has not read, but I have read enough reviews of Ron Suskind's book, Confidence Men, to think that I at least understand what the main themes are. (See Paul Levine's post of 5 December.)

      The themes seem to be, more or less, that Obama has failed to get control over quarreling, infighting lieutenants and advisors, and that he has failed to implement the bold agenda he was elected to implement. In particular, Obama was betrayed by Larry Summers and Tim Geithner, and thus failed to fix Wall Street.

      Well, in Suskind's view, "fixing" Wall Street would have meant, among other things, spending $700 billion (!) to nationalize the banks. We can thank God, I think, that such a thing was not done. The ostensible reason for taking this Hugo Chávez-esque measure was to prevent the final collapse of the banking system, although I suspect there were deeper, longer-range ideological reasons in the minds of the more passionate advocates of this approach. As it turns out, the banking system has not, by a long shot, collapsed, and in fact has now come through the crisis in remarkable health. So perhaps Summers and Geithner did a better job than Suskind gives them credit for.

      I don't know everything, of course, and might well have missed something, but I am not aware of any larger thing concerning the financial system which could have obviously been done differently.

      As to infighting advisors and lieutenants--that is par for the course. It could well be that Obama is not the strongest leader we've ever had as president, but I'm not sure we really know yet. And being a strong leader, able to impose a more or less disciplined, unitary line on the complex team of strong personalities which is every White House, is not necessarily always for the better--for example the most disciplined White House in living memory is surely Bush II's, and where did that get us? Reagan's White House was a mess, as was Clinton's. If the the Obama White house avoided nationalizing US banks as the result of being unable (or unwilling) to force Geithner to do it (or try to do it), against his better judgement, then maybe that is a healthy outcome in terms of process as well as results.

      The other specific policy initiative which Suskind attacks Obama for is his failure to deliver a more radical health care plan. Again--does anyone think that something more radical could ever have been achieved? Even if you believe in a more radical solution (and for what little it may be worth, I do not), then surely you understand the value in formulating imperfect reform which can actually be implemented, as opposed to perfect reform, which will never get through Congress or the courts?

      I'm not sure that such a strong case against Obama has been even stated, much less proved.  But I will try to actually read the book over the Holidays.

      JE comments:  Ah, Cameron--you wax eloquently on a book you haven't read.  Ever thought of a career as a literature professor...? (!)

      Seriously now, I'd like to discuss the legacy and "contributions" of Lawrence Summers.  WAISer John Torok just called my attention to a fascinating essay by Paul Cohen, in indignant reaction to Summers' claim in a NYT op-ed that foreign language study for the Anglophone is a waste of time.  I'm in shock--stay tuned for the link and my anything-but-impartial commentary.

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      • Did We Nationalize the US Financial System in 2008-'09? (David A. Westbrook, USA 12/05/12 4:14 PM)
        In response to Cameron Sawyer (5 December), we did in effect nationalize the financial system in 2008/09. We picked winners and losers, and took market risk off the table for winners. We even took enormous equity stakes in AIG and Citi, and facilitated the financing of the mergers of the rest of the losers, save Lehman. We directly nationalized commercial paper, for a while, and student lending, largely still.

        We did almost nothing about moral hazard. Even granting that radical intervention was necessary, as I do, this wasn't necessary.

        That's capitalism of a sort, but one thinks of Africa, as pointed out by Simon Johnson (MIT and IMF).

        While Dodd Frank (which I've taught in seminar, but it's deathly boring) has done some sensible things, it's tough to be too impressed. As a legislative achievement, Dodd Frank isn't in the same solar system as the 1933 and '34 Acts. Market concentration is worse (albeit far better than in Europe); nobody believes the systemic risk mechanisms will work under stress. Some of the consumer protection stuff is good, but ho hum.

        Turning to the traditional role of finance, allocation of capital, we've seen notable unwillingness to lend, in part because of negligible interest rates. (I think the effective bound for using monetary policy for stimulus is considerably above 0%.) I need not remind you that growth in this country is horrible, inequality is rising, unemployment is high... and the country is more polarized than ever in my lifetime, perhaps excepting Vietnam. So as a matter of political economy, and while I completely support the need to intervene, I give the Bush/Obama response at best a B at the time, and a C since.

        Intellectually--and the real failing of Dodd Frank--we've not come very far. And surely traditionalists who annoy people, like Summers, was a stupid way to try to get serious thinking done.

        A lot more was possible. But that would have required confronting Greenspan's correct claim that "the edifice collapsed," and asking for the reformation of finance as an intellectual discipline, and ultimately, of political economy. I did a lot of work on this at the time, issuing it in a book, Out of Crisis: Rethinking Our Financial Markets.

        See http://law.buffalo.edu/Faculty_And_Staff/submenu/Westbrook/reviews.asp#2

        Since then, I've been thinking in large part about the stasis of elites on both sides of the Atlantic. I'm also trying to think about what may be hoped from political economy.

        JE comments:  Who needs a refresher course on moral hazard?  Please forgive this language teacher--Economics 101/102 was a long time ago:


        Really smart and provocative stuff on WAIS today.


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      • Suskind's *Confidence Men* (Paul Levine, Denmark 12/07/12 2:04 AM)
        I am a great admirer of Cameron Sawyer's contributions to WAIS. But I am astonished that he would opine on Ron Suskind's Confidence Men (5 December) without reading it. Perhaps some reviews have misled him? Suskind's book is less a polemic than a detailed narrative of Obama's first term as president, with the focus on domestic policy. He is critical of aspects of the president's policies--or rather policy failures. Here is a summary of his criticisms:

        1) There was a lack of focus in Obama's policy. "When Obama took on three great challenges at once--the economic crisis, financial restructuring, and health care reform--it seemed no one had the temerity to say, 'Mr. President, any one of those three would be more than enough to challenge a new president with so little executive experience.'"

        2) There was a failure to put together the best team for making economic policy. As a result, there was more of what Walter Lippmann called "drift" than "mastery." Obama's choice of Summers and Geithner was unfortunate when better people were available. Faced with economic crisis, an inexperienced president relied on the retro policies of the former Clinton administration. Summers and Geithner had been part of the Clinton team that had gutted and then destroyed the Glass-Steagle Act and rejected regulation of derivatives. Summers's outsized ego and Geithner's timidity created dissonance and ended up undermining Obama's reform policies. Early on, a powerful colleague, Sen. Byron Dorgan, told Obama bluntly he had made a mistake in choosing Summers and Geithner whom he knew well. "You've picked the wrong people," he said. "I don't understand how you could do this. You've picked the wrong people!"

        3) There was dysfunction in the running of the executive. Obama's choice of Rahm Emanuel to run the White House ended in an often chaotic administration. Moreover, a macho blunderer, Emanuel conspired with Summers to sideline the considerable female talent in the administration who called for more positive action: Christina Romer, Sheila Baer and Elizabeth Warren.

        4) There was a pattern of inaction: of deferring decisions to more discussion or, what Obama called "relitigation." Even when Obama made a decision to act boldly, Geithner subtly subverted or diluted decisive action. "When dramatic reform or restructuring was proffered--for Wall Street, for jobs programs, for deregulation of all kinds, he'd often say, Let's assess the 'Hippocratic risk.' The risk, in short, of doing harm. For a new president, with a powerful intellect but little experience, this stance was always available as a sensible course. As Obama learned the limits of pure intellect, in hour after hour of relitigations, Geithner's posture increasingly felt like a prudential path, rather than backing away from history's call to arms."

        5) The consequence was that Wall Street would be rewarded without extracting a cost: the banks were revived but not reformed. Even Obama's supporters realized this. Alan Krueger, a top labor economist, observed, "We lost the country with those AIG bonuses." A prominent banker said: "For Washington not to demand anything when it saved us, even stuff that we knew is for our long-term good, was one of the stupidest moves in modern times. I figured Obama understood that--it wasn't a nuanced point--and that he'd act as we started to pull out of the abyss six months ago. But he didn't, and I don't know who to thank. I feel like I should go over and hug Tim. It's a shame we can't pay him, 'cause that's a guy who really earned a big-time bonus."

        As Suskind concludes: "A titanic crisis . . . had come and gone, and neither Washington nor Wall Street had fundamentally changed."

        In closing, let me ally myself with the comments offered by David Westbrook on the economy (5 December) and Gilbert Doctorow on Larry Summers (6 December). And let me leave the final words to Paul Volcker, one of the legendary figures Obama bypassed in choosing Summers and Geithner:

        "The trouble with the United States recently is we spent several decades not producing many civil engineers and producing a huge number of financial engineers. And the result is shitty bridges and a shitty financial system!"

        JE comments: Ah, the AIG bonuses. How much indignation they caused, but most of the nation has now forgotten them.  America doesn't keep grudges long.

        My thanks to Paul Levine for this excellent overview of the Suskind book. I'd especially like to continue our discussion on point 5, above. Should we blame Geithner for reviving but not reforming the banking system?  Or Summers, WAISdom's whipping boy of the week?  How much genuine change was even possible, given the gridlocked Congress?  To revive the financial system was a "national security threat" that everyone could support; to impose any significant reform would involve ideological debate and endless accusations of government meddling and socialism and the like.

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  • How Much Influence Do US Presidents Have on the Economy? (Istvan Simon, USA 12/06/12 2:09 PM)
    I do not agree with Cameron's analysis of 4 December, which I believe leaves important and very relevant considerations entirely unmentioned.

    First, I do not buy at all that a President does not have the power to change much the direction of the "economic ship," the analogy used for the economic engine of a country. There are of course policies that have enormous influence on the future. For example, the adoption of Social Security and Medicare in the United States had obvious, long-lasting economic consequences, much beyond the terms of the Presidents who enacted them. They also had immediate effects on the reduction of poverty and well-being of retired older people. Similarly, Obamacare is a historic achievement of the Obama administration that will have a long-lasting and major effect on the well-being of the United States population, and also will have major long-term effects on the economy of the United States.

    Second, Cameron's analysis of the Carter and Reagan administrations are faulty. Cameron mentions the appointment of Paul Volcker to the Fed. Indeed this had major and long-lasting effects on the economy, not all of which were positive. Under Volcker interest rates sky-rocketed to levels rarely seen in the United States. Indeed for a decade or so, cash was a major asset, with very high real interest rates. This slowed down inflation to nothing, but also caused a major slowdown of the US economy.

    The Carter Presidency was a disaster both in terms of major Foreign Policy failures (e.g. the Iranian hostage situation and the spectacular failure of the military mission to rescue our diplomats, but also in a ridiculing of the United States on the world stage), as well as in terms of a general economic malaise and a climate of pessimism and lack of confidence in the long-term prospects of the United Sates. Indeed, one of the great accomplishments of the Reagan Presidency was to restore a sense of optimism on the economic and political prospects of the country, which had been badly shaken during the Carter Presidency. President Carter had one major and long-lasting achievement in Foreign Policy: The Camp David accords between Israel and Egypt.

    Cameron also mentions the abandonment of the Gold standard, which happened earlier, in the Nixon presidency. Cameron seems to be in the camp of Dr. Ron Paul, who would like to return to the Gold standard, but in fact most economists, including major ones like Paul Krugman, think that this would be a very bad idea.

    Now for the economic policies of Ronald Reagan. Reagan had one major accomplishment in my opinion, that I mentioned already. He restored a climate of confidence and positive expectations, but Reagan's economic policies were at least partly disastrous. Termed Vodoo Economics by his Vice President, George H. W. Bush, and indeed they turned out to be exactly that. This was the idea of "supply-side" economics, with the very strange and false idea that you could decrease taxes which paradoxically would result in an increase in government revenue. In fact it did not, and caused instead major deficits.

    Reagan also went on a major spending spree, modernizing the US military. This was essentially classical Keynesian economic policy, with huge deficit spending, which indeed stimulated the economy much like it was supposed to do, while the deficits were made even worse by the decrease of taxes. The National Debt increased sharply under Ronald Reagan. Reagan also introduced a policy which from the economic or military standpoint made little sense, and which was a major waste of enormous amounts of money. This was Star Wars. While from the economic or military viewpoint, Star Wars was a huge mistake, from the political viewpoint it was a major triumph. For Star Wars scared the moribund Soviet System to its core, scared the Russians, and forced them to spend money that they could not afford, and which eventually completely bankrupted the Soviet Union. The result was the collapse of Communism and the "winning" of the Cold War by President Reagan.

    The cumulative effects of these policies was in fact both in the short term and the long term enormous, which disproves Cameron's assumption that a President can have no major effect on the economy during his presidency. He can and he often does.

    Cameron also under-estimates the effects of the wars in Iraq and Afghanistan, which he calls total waste. It was not. Whether or not the results justified the expenditures in lives and money is a legitimate subject of debate, the effects of the Iraq and Afghanistan wars were major, though it is possibly too soon to reliably judge how positive they were. The Iraq war obviously got rid of a tyrant in the Arab World. Perhaps the Arab Spring is a consequence of the Iraq war. I invite historians in WAIS to comment on this intriguing possibility. The Afghan war got rid of the Taliban in power, and while the Taliban has a successful insurgency, I find it very unlikely that it would ever regain power in Afghanistan. Finally, the Afghan war led to the successful elimination of Osama bin Laden.

    Wars have many times major unintended consequences, that a superficial broad-brush analysis, as that of Cameron miss. For example, look at the Korean War. On the surface it changed little on the Korean Peninsula. It maintained South Korea, which became a major economic power in a couple of generations, while North Korea is still one of the most backwards countries in the world. The Korea War thus failed to liberate North Korea from the Communists.

    Nonetheless, the Korean War had a huge effect in the region. One of its major unintended effects was that Mao Zedong's son was killed by the United States in the war. Had this not happened, China would most probably be ruled by Mao's son, and grandson, who would have established a hereditary empire, much like North Korea has. Instead we had Deng Xiaoping with the enormous changes that China underwent under his leadership.

    JE comments:  Pres. George H. W. Bush was recently in the hospital.  Any update on his health?  My sources in Houston say that he has been very frail in the last year or so.

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    • Why Did the Cold War End? (Gilbert Doctorow, Belgium 12/07/12 1:48 AM)
      I extend a nod of appreciation to Istvan Simon (6 December) for bringing out the "contingency factor" as a key force directing the course of history, as opposed to the broad abstractions of social movements, technological developments and the like which today's historians like to focus on. The human dimension, meaning the personal decisions of national leaders, is often unpredictable and adds a large measure of spice to what would otherwise be boring determinism. This comes out most clearly in Istvan's mention of the death of Mao's son, though it runs like a red thread through the rest of his narrative, when he calls attention to the inputs of individual presidents to the shaping of the economy by their respective policy initiatives.

      At the same time, tucked in Istvan's posting is the dissemination of the essentially false notion that policies launched in Washington under Ronald Reagan, namely the Star Wars program, brought down the Soviet Union. His conclusion that the Soviet military response broke their failing economy and so ended the Cold War with an American victory has fed into the triumphalism we have seen in the American foreign policy establishment since 1992. This triumphalism brought the Neocons to power in the second half of the Clinton administration (yes Clinton, with the swearing in of Madeleine Albright) and the first term of the Bush administration, with all the terrible consequences for American finances and moral standing in the world that we have seen following the invasion of Iraq.

      This misinterpretation of the fall of the Soviet Union should have been dealt a death blow by the writings of the key personality in the Reagan Administration who advised the President as he negotiated with Gorbachev over dismantling the military confrontation and easing relations, and who then was sent over to Moscow to see to their implementation, providing him with a perch to witness Gorbachev's domestic reforms first hand and to meet all the leading players. I am speaking about Ambassador Jack Matlock, whose most direct challenge to triumphalism was his last book Superpower Illusions. Matlock insists that the fall of the Soviet Union was the direct result of the political and economic reform programs that Gorbachev was able to pursue because he had eased tensions with Washington through negotiations so as to end the Cold War. On which date the Cold War ended is something that historians may debate, but those who are serious put that day well before the Soviet Union collapsed.

      JE comments:  Gilbert Doctorow is correct that the personality-based, Carlylean interpretation of history has lost favor in Academe, but it shouldn't be dismissed out of hand.  Regarding the thesis that the US bankrupted the Soviets by outspending them militarily, couldn't a case be made that the USSR in the 1980s was better situated for unchecked military spending, because the Soviet citizens had few expectations for material comfort and consumer goods?  This would seem to line up with Matlock's interpretation.

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      • Government Policies and "Contingency Factors" (John Heelan, -UK 12/07/12 2:39 AM)
        Gilbert Doctorow's post on "contingency factors" affecting longer term governmental policies (7 December) reminded me of a (disputed) quote by UK Prime Minister, Harold Macmillan. The story goes that when questioned by a journalist what was most likely to blow governments off course, patrician SuperMac apparently replied, "Events, my dear boy, events!"

        Macmillan was referring to unexpected major happenings at home or abroad. Perhaps a good example would be the lasting effect on the policies of governments worldwide of the 2008 collapse of the US sub-prime mortgage market and its derivatives.

        JE comments: A jewel of a quote. If Macmillan didn't say it, he should have. Funny thing about events: they never stop happening, inexorably...

        I am leery about reviving discussion on the US elections, but how about the event known as Sandy?  Would Obama have triumphed so decisively if he hadn't posed for photos with his new amigo, New Jersey Governor Chris Christie?

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      • History's "Contingency Factors" (Angel Vinas, Belgium 12/07/12 6:00 AM)
        I agree with the posts by Istvan Simon and Gilbert Doctorow (6 and 7 December, respectively). May I mention another case of the "contingency factor" at work?

        It has to do with Hitler´s decision to help Franco after the military rebellion of July 17, 1936. It depended on Franco´s ability to commandeer a postal plane of Lufthansa plying the Canary Islands route. Thanks to that plane he sent a mission to Berlin. Thanks to the personal acquaintance of the former Landesgruppenleiter of the small Nazi party in Spain, Friedhelm Burbach, with one of the emissaries, Burbach got in touch with Alfred Hess, brother to Rudolph, who opened the way to Hitler.

        The leader of the coup, General Mola, also appealed to Germany and fell back on the acquaintance of Spanish monarchists with leading but second-rank figures in the Third Reich. This went back to the mid-1920s. When Mola´s emissary arrived in Berlin, Hitler had already decided in favor of Franco. The carefully constructed plans of Spanish Monarchists with Italian fascists also favored Franco. The Italian war matériel contracted for supply on July 1, 1936 was eventually directed to him.

        Above all, the nominal leader of the rebellion, General Sanjurjo, died in a plane crash near Lisbon. The way was open for Franco to become the leading military figure in the insurgents. The rest is history.

        JE comments: "Contingency factors" may just be a fancy term for Macmillan's "events, events." Much of twentieth-century Spanish history was determined by one plane crash, just as the US post-1865 was defined by an assassin's bullet. And then there are the historical actors who didn't die: what if Corporal Hitler had been ground up in the slaughterhouse of the Western Front?

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        • History's "Contingency Factors": Spain (Robert Whealey, USA 12/09/12 4:08 AM)
          Angel Viñas's account (7 December) about what happened in Berlin on 25-26 July 1936 is indeed an innovation. All the accounts, including the books of Viñas himself, up to 1989, when my book on Hitler was published, assumed that Johannes Bernhardt and Adolf Langenheim were the two Nazis on that Lufthansa plane. The role of Friedhelm Burbach, who went to Alfred Hess before the two emissaries got to see Rudolf Hess, Deputy to the Fuhrer, adds a new wrinkle to Hitler's thinking about Spain in July.

          It is still unclear to me the importance of this "contingency factor." It certainly proves that Angel Viñas is one of the foremost researchers on the role of the Axis intervention into Spain's civil war.

          JE comments:  I think Angel Viñas had in mind the contingencies that led to Franco as the leader of the rebellion.
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          • Friedhelm Burbach (Angel Vinas, Belgium 12/10/12 1:31 AM)
            Thanks to Bob Whealey for his post of 9 December. Burbach´s role is described in a memo which he wrote to Franco after WWII, so as to prevent his deportation to occupied Germany. I also spoke to Burbach's family both in Spain and Portugal, which ratified it. Burbach died in an accident at the end of the 1950s.

            I am one of the guys who fell for Bernhardt´s self-interested account. Unfortunately the person who spent many years trying to document Bernhardt´s dark side suddenly died some fifteen years ago, and his family sent all his material to the rubbish bin. I came in too late to try to save it.

            In general one can say that the political and military Spanish archives have now been opened (although important exceptions remain, as in the UK or Russia). New evidence is coming to the fore in masses regarding the Civil War and the post-war period.

            We´re now in a position to rewrite the Civil War on an expanded documentary basis. Many of previous accounts will become obsolete. I´m happy to say that Bob Whealey's will withstand the test of time, since it was based on primary evidence. This won´t be the case with the many books which are "refritos" of (based upon) secondary literature.

            JE comments:  A question for Angel Viñas and other WAISer historians:  what's a historian to do when you realize you've been hoodwinked or "taken in" by a self-interested individual?  This must be a painful epiphany, both professionally and personally.

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            • When a Historian Gets "Hoodwinked" (Angel Vinas, Belgium 12/11/12 5:51 AM)
              I thank John Eipper for his follow-up query to my post of 10 December.  He raises an important question. When I realized that Johannes Bernhardt had hoodwinked me, I tried to set the record straight and published a new version of Franco's fateful mission to Berlin. Obviously I didn´t disguise the previous account. It wouldn´t have been right. I must say that Bernhardt´s version squarely fit into then available documentary evidence. He was a very clever man, and rose from nothingness to becoming Göring´s representative in Spain during the Civil War and the post-war period, always gravitating towards the center of power. As SS-Standartenführer, he also got into Himmler´s good graces.

              From the operational point of view, the experience with Bernhardt made me suspicious of oral sources. I turned to documentary evidence as the mainstay for any further analyses. Obviously not all the past is encapsulated in documents, but historians have long mastered the technique of how to critically handle documentary evidence.

              This is not to deny, however, the importance of oral sources altogether. There are fields of inquiry in which such sources are literally invaluable. In the Spanish case, many instances of brutal repression and killing wouldn´t have come to light if oral information hadn´t become available.

              JE comments: A historian's integrity is only enhanced if s/he acknowledges getting "taken for a ride" by an informant. I thank Angel Viñas for sharing this valuable lesson.

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      • Why Did the Cold War End? (Cameron Sawyer, USA 12/07/12 12:30 PM)
        In response to Gilbert Doctorow (7 December), the Cold War ended for a very simple reason--the Soviet Union went, absolutely literally, bankrupt. The impending financial collapse of the USSR--which was already being felt in the early 1980s--is what allowed Gorbachev to come to power with his radical reform program. But Gorbachev was unable to save the USSR, which simply disappeared in 1991. Gorbachev was already working on a negotiated end of the Cold War with Reagan in the early days of his regime, and there were some great achievements, particularly in arms control. But query whether it mattered very much: by December, 1991, the Soviet Union simply did not exist anymore. Gorbachev was a bit of a dead end in the larger picture of Russian history, although he has been much rehabilitated in recent years. Lately Putin is fond of comparing Gorbachev to the reformist Tsar Alexander II, who ended serfdom in Russia, and was murdered by leftist terrorists for his trouble. "Gorbachev gave us our freedom," Putin has said from time to time.

        Did Reagan's "Star Wars" program have anything to do with the bankruptcy of the USSR? I think that there is something to this idea--the Soviets were certainly allocating resources based on maintaining military parity with the US, and Reagan's willingness to spend vast sums of money on rebuilding the US military capability, which had been much degraded by our disastrous war in Vietnam and by Ford's and Carter's military budget cuts, certainly influenced Soviet budgets. But it would be a gross oversimplification to say that Reagan's military spending was the cause of the collapse of the USSR. Oil prices, the Soviets' own disastrous misadventure in Afghanistan, and the failure of the Soviet economy to modernize in the face of accelerating technological progress, were also factors, and probably any one of those was more important than "Star Wars."

        The "triumphalism" referred to by Gilbert, based on a lack of serious understanding of what really happened in the USSR, shaped US policy towards the new Russian Federation in the 1990s. A historic opportunity to realign world politics was lost due to the hubris which underlay this "triumphalism."

        JE comments: Is there any validity to the analogy (I just thought of it) that the "victors" of the Cold War learned nothing from their counterparts at Versailles in 1919?

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        • Why Did the Cold War End? Stephen F. Cohen (Gilbert Doctorow, Belgium 12/08/12 4:36 AM)
          In a few days I will be issuing a very belated review of the latest book by Stephen F. Cohen, Soviet Fates and Lost Alternatives: From Stalinism to the New Cold War. This originally came out in 2009, but its 2011 paperback edition which I read includes an important Epilogue, an updated discussion of how the new cold war has played out under Obama and "reset."

          Among all historians of the Soviet Union, Cohen stands by himself as the most intellectual, the most concerned with the fabric of history, with causality and with precisely "lost alternatives," as suggested in the subtitle.

          I have serious reservations about the book, which I will set out separately. What I wish to do here is to recommend to WAISers the chapters 4, "Was the Soviet System Reformable?" 5, "The Fate of the Soviet Union: Why Did It End?" 6, "Gorbachev's Lost Legacies," and 7, "Who Lost the Post-Soviet Peace?"

          Cohen grapples with the questions Cameron Sawyer (7 December) has put on the table in magisterial fashion. Though he was never an actor on the scene, as was Jack Matlock, Cohen got to know Gorbachev and others in his inner circle. He supported their cause of a genuinely democratic and social-market Soviet Union.

          While we can count many reasons why the USSR finally had to come apart, in the end Cohen places its demise at the door of contingencies, meaning the personality of Boris Yeltsin, his lust for power, and the complicity of the thieving Russian nomenklatura who found an ally in Tsar Boris. Read Cohen to enjoy all the angles.

          JE comments: Look forward to Gilbert Doctorow's full review of the Cohen book.

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