Book Review: Grant and Sherman by Charles B. Flood

This is not your usual Civil War book, which makes it well worth reading, particularly by anyone interested in our current political and economic crises. Standard books cover the early successes of Robert E. Lee against McClellan and a host of other incompetent Union generals, Lee’s eventual loss at Gettysburg, Lincoln’s selection of Grant to lead the Union Army, and Lee’s surrender at Appomattox. For one thing, as this book explains, Lee’s surrender to Grant did not end the Civil War. It was followed by a crucial and not automatic surrender of Gen. Joseph Johnston and his army to Sherman 17 days later. Without some skillful political maneuvering by Grant and Sherman, it might well have degenerated into years of guerrilla warfare.

Grant and Sherman: the friendship that won the Civil War, tells the rest of the story. It is a fascinating and humanly messy tale of two deeply flawed West Point graduates: Ulysses S. Grant ―who had been forced to resign in 1854 for being drunk―and William Tecumseh Sherman―who voluntarily resigned in 1853 to run a business in San Francisco.  It is also a story of political intrigues, petty jealousies and radical politicians which repeatedly threatened these two during and after the Civil War, the bonds of mutual respect and trust which enabled them to survive.  

Grant, re-entered the Union army on June 17 1861, after considerable difficulties which included a personal rebuff by McClellan. He was made a Colonel, by acclamation, and placed in command of the Illinois Twenty-first, a regiment of 1000 volunteers who were in complete disarray when he arrived. Sherman, whose family connections included a brother who was a United States Senator from Ohio, went to Washington D.C. in May of 1861 where he was admitted to the army as a Colonel by Gen. Winfield Scott. He was soon given command of one of the brigades defending the Capitol, about 3400 men. Within one year, Grant was a Major General and Sherman a Brigadier General who first served under Grant at the battle of Shiloh, in Tennessee. During the battle Grant turned an initial defeat into the first Union victory of the war by boldly attacking when conventional military wisdom dictated retreat. Their success at Shiloh created bonds of friendship and mutual trust which were frequently strained, but never broken.

Grant and Sherman were military entrepreneurs. They developed a clear roadmap of what had to be done to win the Civil War. They operated from this roadmap. They became the Union Army’s most successful generals because of their abilities, relentless dedication to their joint vision, and their risk taking and military innovations which won battles. One of Grant’s innovations― which Sherman used in his march that cut the South in half― was to move great distances rapidly by abandoning supply wagons and foraging off the land for weeks at a time.

The story of Grant and Sherman includes valuable lessons for the present when CEOs of major corporations are routinely selected from pools of managerial bureaucrats who have dutifully acquired credentials, kept their skirts clean, gamed politicians and manipulated boards of directors. McClellan and the other failed generals who preceded Grant were selected from pools of career officers who followed conventional wisdom to the letter, accumulated military credentials and political connections, lost battles and lengthened the carnage by years.

Since our economy is dominated by cautious, narcissistic McClellan’s, we endure a perpetual carnage of unemployed workers and unbalanced budgets.

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“No new taxes” is destructive, narcissistic BS!

Eric Cantor and John Boehner, repeatedly chant their mantra: “No tax increases (on the wealthy)!” They quickly add: “tax increases will cost jobs during a recession.” This is total bullshit. The richest 1% of individuals and major corporations now own over $1.0 trillion in funds from the Bush tax cuts of 2001; cuts which added that amount to the budget deficit. These funds have either been lent to the government to cover the deficit or sent offshore. Little or nothing was invested in the domestic economy.

There is no credible evidence that the Bush tax cuts stimulated the economy. They did accelerate the concentration of wealth. So, what motivates Republican Senators and Congressmen to maintain their irrational intransigence in budget negotiations?

Higher taxes on the rich and large corporations would be fairer because most of the Federal government’s expenses (other than for Social Security and Medicare) protect the value of property rather than the welfare of individuals! From our nation’s founding, property rights have been protected as the source of personal liberty. The military, police, fire, transportation, public education, judicial systems, prisons and many other government agencies protect property first and foremost. In the ante bellum south, slaves were property and a measure of wealth, kept in perpetual servitude and forbidden basic educations by law. Even married women were treated as property of their husbands.

Government institutions protect real, personal and other forms of property, including corporations, patents, copyrights and money. They enhance the value of property by providing a peaceful, educated society; a society in which the overwhelming majority voluntarily accepts property rights and the rule of law. That society includes a substantial skilled and conditioned workforce which develops and maintains the value of properties. (I’d love to see the Koch brothers move their wealth to Afghanistan and set up shop there. They’d have to start off by paying a bundle to import mercenaries to protect their property and teachers to educate their workers. Good luck!) The role of education in protecting and maintaining the value of property seems to be overlooked by those who have systematically degraded public education so that the rich and legally entitled can keep more.

The biggest freeloaders are large corporations, like BP and Exxon, large banks like Wells Fargo and Bank of America, and the wealthy like the Koch brothers. Continue reading

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Could Fox News be next?



James Murdoch, son and heir apparent to Rupert Murdoch’s News Corporation, wrote a letter announcing the closure of News of the World as of this coming Sunday. In the way that Fox News selectively edits political news to enhance Rupert’s wealth and political clout, I’ve abbreviated James Murdoch’s much longer letter and substituted “Fox News” for “News of the World.” It’s a letter which needs writing, and who knows? 

 

“I have important things to say about Fox News and the steps we are taking to address the very serious problems that have occurred. The (few) good things that Fox News does has been sullied by behaviour that was wrong. Fox News is in the business of holding others to account. But Fox News failed to get to the bottom of repeated wrongdoing that occurred without conscience. The Company paid out-of-court settlements approved by me. This was wrong and is a matter of serious regret. Apologising and making amends is the right thing to do. I have decided that we must take further decisive action with respect to Fox News. This Sunday will be the last broadcast of Fox News. In addition, I have decided that all of the Fox News revenue this weekend will go to good causes. These are strong measures. They are made humbly and out of respect. I am convinced they are the right thing to do. Many of you, if not the vast majority of you, are either new to the Company or have had no connection to Fox News the years when egregious behaviour occurred.

Thank you. Rupert Murdoch CEO, News Corporation “

 Ed Lee

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Modern Medicines for Sick Economies: Introduction (Part 3 of 3)

(Part 1,    Part 2)

Modernizing economic medicine

The practice of medicine became modern and effective only after people began to understand and analyze the human body as an evolved, complex system and its diseases as attempts by pathogens and parasites to purloin its rich pools of resources. We discovered that all living systems, from viruses to humans, perpetually compete for resources in their struggle for survival. Each species has strategies for acquiring its resources and defenses for keeping them. These strategies are shaped by biological strengths. For example, we use our minds to find food, drink and shelter, and to defend ourselves from predators. We use our sophisticated, multi-level immune systems to defend our bodies from pathogens and parasites. Modern medicine only helps our immune systems win their battles; it does not cure us on its own.

Computers and the internet also contain rich pools of resources in the form of valuable data and programs. Early versions of these systems didn’t include protections from hackers and viruses. Devastating attacks quickly committed system designers to a perpetual race developing and installing defenses to outwit them. As new defenses were added, hackers regrouped, found weaknesses and exploited them with ever more sophisticated attacks. This unending race goes on.

Computers now contain sophisticated and continually updated protections, which add complexity and tie up substantial software, hardware and processing resources. Nevertheless, without them, hackers would quickly steal our identities, our privacies and our properties, and computer viruses would sicken or destroy the systems themselves.   The defenses are most effective when we are informed and careful about how we use computers and the internet safely.

Governments manage vast and rich pools of resources ripe for gaming. The framers of the US Constitution understood this and built in an embryonic immune system to reduce the risk of having an elite group convert the Federal Government into a monarchy or dictatorship. First they left most governmental powers in the hands of the various States. Then they divided Federal powers into three separate and equal branches of government and further divided the Legislative branch into a House and a Senate. These checks and balances were tradeoffs, which made governing more complicated and decisions slower to come by in exchange for resisting administrative tyrannies.

One exception was made for wartime. An effective national defense required, fast acting, single minded leadership in times of war.  Attacks by Britain or France were of immediate concern. So they permitted the President, as Commander in Chief, to have primacy over the other branches whenever Congress passed a declaration of war. The primacy was limited to the duration of that war.

Unfortunately, these embryonic immunities haven’t evolved to adequately protect the Federal or state governments from increasingly sophisticated human parasites, predators and pathogens. They still allow individuals and groups to game the government with Continue reading

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Modern Medicines for Sick Economies: Introduction (Part 2 of 3)

(Part 1)

Economies are living systems

Economies are living systems which operate within national boundaries.[2] They have two principal functions: to produce and distribute products and services, and to produce and distribute capital; the means to acquire those goods and services. For a healthy economy, the volume and the distribution of the two functions are balanced. Similarly, for a healthy woman, the volume and distribution of blood flowing from her heart balances the volume and the distribution of blood returning through her veins.  Businesses are pumps and arteries of these functions. They produce and distribute products and services for customers while they produce and distribute capital to employees’ in salaries, to suppliers in purchases, and to investors in dividends. These product and capital flows eventually meet in markets in where the return flows are initiated.

While businesses grow, they pump vigorously and disperse widely, driven by people anticipating future profits for accepting the interim risks. They hire workers, add equipment, improve designs and widely disperse capital and goods among suppliers and distributors. So long as enough industries within an economy expand, sufficient capital is risked, working, widely dispersed and flowing. Buyers are well heeled and vendors well stocked. All boats are lifted. The economies of China and India are in this period of growth.

As businesses mature, prudence, concern and risk avoidance replace anticipation as sources of energy. Growth becomes less important than profitability and market share. Industries reduce their work forces with innovations, with mergers and acquisitions, and by exporting jobs to other nations. More capital flows into corporate war chests, to executives who’ve extorted exorbitant compensations and golden parachutes, and to entitled employees. A little of it trickles back to investors. Thus, capital concentrates into fewer hands, so that fewer people and businesses are well heeled, demand drops, surpluses of goods pile up and businesses cut back. This is a natural process of growth, maturity and eventually death for businesses and for industries. The United States economy is in a period of economic decline partly because it is dominated by large, mature corporations and industries.

A healthy economy needs processes and institutions to facilitate the orderly deaths of its mature and sick businesses. The US economy has a bankruptcy system which works reasonably well for all but the largest businesses. It also has the FDIC which systematically liquidates unhealthy local and regional banks and redistributes their assets and liabilities to healthier financial institutions. However, we don’t have a process for dealing with institutions which are large enough to drag down their industries or national economies with them. We indulgently allow them to become too big to fail. Then, we reluctantly put these senile behemoths and their parasitic loads (particularly their overpaid executives) on life support, which weakens governments and burdens taxpayers.

We will outline how to go about economic apoptosis for big banks and global corporations; merely allowing them to collapse or go bankrupt is not a viable alternative. It is equivalent to biological necrosis with deadly economic consequences. However, as in modern medicine, the best economic answers are primarily in proactive, internal, continual, self-directed preventions rather than in dramatic cures from outside business institutions.

Healthy economies

Economies are manageable and adaptable systems, but only when they have adequate reserves of appropriately distributed vital resources. The ability to manage or even to influence the behavior of any system requires immediately available reserves. This is a characteristic of all systems from the simplest to the most complicated; as I’ll explain further in Chapter 1. A car needs a competent driver at the wheel (appropriate, actionable mental reserves), tread on its tires, linings on its brakes, gas in its tank and time to travel from place to place. A basketball team requires a coach on the sidelines, talented and conditioned players on the floor and on the bench, many competitors, and times to practice, to eat and to rest. A factory needs managers, and surpluses of skilled workers, raw materials, work in process, and finished goods. A supermarket needs enormous surpluses on its shelves and in its back room as well as access to distant warehouses storing even larger surpluses.

Every economy requires a skilled, appropriately distributed middle class which contains nearly all of its irreplaceable reserves of essential mental systems driving it with choices and actions. A large, educated, socially conditioned, gainfully employed middle class was an unintentional consequence of the printing press and the Industrial Revolution. It is more crucial to economic health than the steam engine and printing press combined. Prior to the industrial revolution, educated middle classes were the exception and small at best, and consequently national economies were minuscule.

Inherited control of real property determined membership in minute, wealthy, educated groups from prehistoric times when agriculture replaced hunting and gathering until well into the 19th century. These tiny tribes controlled education, as well as economic, political and religious power. They easily ruled over uneducated and impoverished populations. From time to time, these elites warred with one another or intermarried to Continue reading

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Modern Medicines for Sick Economies: Introduction (Part 1 of 3)

“I will prescribe regimens for the good of my patients…. and never do harm to anyone.” 
Part of Hippocratic Oath

On the damp, frigid Thursday morning of December 12, a robust, 67 year old George Washington, rested and content from three years of retirement at his beloved Mt. Vernon, hoisted his 6’3” frame into the saddle and road his horse for 5 hours in snow, sleet and rain to inspect his farms.  The next day he complained of a sore throat, but that afternoon went out again in a heavy snow to mark some trees which were to be cut down. During the evening he felt increasingly ill from “an inflammatory affection of the upper part of the windpipe.”[1] Well before sunup the next morning he awoke with a painful and swollen throat, struggling to take each breath through his constricted windpipe.

Modern medicine could easily have insured his recovery, probably with antibiotics or an anti-inflammatory drug, or possibly a tracheotomy to bypass the blockage. Unfortunately for him, it was 1799 and medicine was still a collection of folk lore and potions.

Washington directed his estate overseer, Mr. Albin, to prepare a mixture of molasses, vinegar and butter. This potion sent him into episodes of convulsive suffocation when he repeatedly tried to swallow it. Then he directed Mr. Albin to drain half a pint of blood from his arm.  When this didn’t improve his condition, messengers were sent to fetch 3 of the best doctors in the vicinity, including his friend, neighbor and personal physician Dr. James Craik.

When Dr. Craik arrived at 11 am, he was alarmed at what he saw, placed a preparation of dried beetles on Washington’s throat, and then ―over the next few hours―drained him of 5 pints of blood.

Bloodletting dated back to Hippocrates. It was based on observations that bleeding often broke fevers and a supporting hypothesis that bleeding let out the “bad humors” responsible for illness. It was thought to be most effective when done close to the pain and swelling, so it is possible that some of George Washington’s blood was drained from his neck or from the back of his tongue.

The other two physicians arrived later that afternoon and one of them drained yet another 2 pints of blood, and evacuated Washington’s bowels with one dose of calomel and repeated doses of emetic tartar. Over a 9 hour period, his well intentioned physicians inflicted useless sufferings and indignities on George Washington, about which he stoically commented at 5 pm: “Doctor, I die hard; but am not afraid to go.” More significantly they drained away over half his blood. He was dead by 11:00 pm.[2]

Had these medical professionals done nothing he might have died anyway or his immune system might have pulled him through. But, the shock of losing so much blood made his death certain and swift. [3]

Economic ills

In 2011, the US economy is seriously and chronically ill. It suffers from high unemployment, chronic trade and budget deficits, an enormous Federal debt, and growing social inequities. It doesn’t lack for well intentioned professional help to restore its health. Economists and politicians are eager and able to implement their folk remedies like tax cuts, budget cuts, easy money and free trade. However, these solutions are motivated by casual observations of short term results and by supporting economic theories which date back to the time of George Washington. A core thesis of this book is that most of these economic theories are as unscientific as the theory of bad humors. Blindly continuing these practices are as destructive to the nation as repeated bloodlettings were to George Washington.

This book develops a clear, quantifiable theory of economies as complex but comprehensible living systems and offers actionable answers to these questions:  What is needed to produce and sustain a healthy economy?  What constitutes healthy economic growth? What does healthy growth look like? How should it be measured?  What can be done to restore the US economy to robust health? What is the role of government? What kinds of taxes and what tax rates are healthy? What makes open markets and open societies more productive than managed ones?   Continue reading

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