Economics

The Washington Redskins–no more?

Posted on June 19, 2014. Filed under: Civil Rights, Economics, Politics | Tags: , , , |

The U.S. Patent and Trademark Office has ruled (we think that’s the word) that Washington, DC’s NFL team, the Redskins, can no longer trademark that name, saying: “the term ‘Redskins’ was disparaging of Native Americans, when used in relation to professional football services”. Five Native Americans brought the case to the Patent Office saying the name is disparaging. The upshot is that the team can no longer control who uses the name or profit from its use. (The image of the “redskin” that goes along with the name is still, somehow, protected.)

The team’s owners are contesting this, and will appeal; in fact, this decision seems to have been made before and overturned by a federal district court. So there is a chance that the name will go on, and continue making money for the team.

The list of team names, from professional sports to high school, that use Native American references is very long. “Indians” is a name used by hundreds of school teams; “Chiefs” and “Braves” are second in popularity. In most cases, it seems clear that the name was chosen to represent the team’s strength and fearlessness, and was considered a shout-out to the Native Americans who possessed those qualities. Usually the image that represented the team was a chieftain in full feather headdress, or a “brave” with one feather. On the high school level, the image was usually neutral; it’s at the college and professional level that they are uniformly racist (one notes the Cleveland Indians image and the (now defunct) Philadelphia Warriors image in particular).

In the case of the Washington team, its owners have leaned heavily on the historical defense: any name that’s 80 years old must be innocent. This is an oft-used argument that we cannot make sense of. There are many words that have been around a long time that are slurs. In 1890, Webster’s dictionary listed “redskin” as a “contemptuous” term for Native Americans. That predates the team choosing it as its name. But the league is standing by it: Adolpho Birch, the NFL’s senior vice president of labor policy and government affairs, said the name is not a slur:

“The team name is the team name as it has been for 80-plus years. And what we need to do is get beyond sort of understanding this as a point-blank situation and understand it more as a variety of perspectives that all need to be addressed, that all need to be given some weight, so that at the end of it we can come to some understanding that is appropriate and reflects the opinions of all. I think that is part of the issue with the question is that it is constantly being sort of put into a point-blank, yes-or-no, yes-or-no kind of context when that’s not the reality of the situation that we’re dealing with.”

Often here at the HP we present a block quote and break it down through analysis. We’ve done it for George Washington and William Jennings Bryan. Now we will attempt to do it for Adolpho Birch:

“The team name is the team name as it has been for 80-plus years.”

—If something is old, it can’t be racist. People in olden times were not racist.

“And what we need to do is get beyond sort of understanding this as a point-blank situation and understand it more as a variety of perspectives that all need to be addressed, that all need to be given some weight, so that at the end of it we can come to some understanding that is appropriate and reflects the opinions of all.”

—Instead of the name being… black and white, as it were, it is a complex issue where everyone’s opinion has equal weight and a solution exists that will please and reflect the wishes of everyone, even if they are diametrically opposed.

“I think that is part of the issue with the question is that it is constantly being sort of put into a point-blank, yes-or-no, yes-or-no kind of context when that’s not the reality of the situation that we’re dealing with.”

—The question of the name is an issue that is usually described as dichotomous, dichotomous, dichotomous when that’s not realistic.

We can see that our analysis makes good sense of Birch’s sputtering and panicky nonsense. The answer to “is that name racist” cannot be “yes” or “no”. That’s too point-blank. Reality is that nothing is ever clear, even to people who are clear that the name offends them. In “reality”, the only virtue of Birch’s “argument” is that it puts the onus of the racism on us, the public who have sat back and accepted the racist team name for so long. For 80 years, the team was allowed to perpetrate racism, and that’s not just the team’s fault.

So it can only be hoped that a district court does not overturn this latest ruling, and that a point-blank rebuke to the league’s and the team’s “complex” defense of a “contextual” racial slur is taken down.

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The Slaughterhouse Cases, or, corporations are actually people

Posted on February 27, 2012. Filed under: American history, Economics, U.S. Constitution |

Hello and welcome to this post on the 1869 Slaughterhouse Cases, legal decisions that changed the nature of business in the United States forever. It’s hard to believe that such a ground-breaking series of legal cases can be so invisible to the general American public today, but it’s sadly true. So we’re going to take a good look and see how we started down the path of legal rights for corporations and corporations being given the rights of individual citizens.

America, and then the U.S., had been viewed as a land where everyone had the right to rise by working hard from the start of European settlement. The immigrant, the poor person, the obscure and uneducated could always better their lot and improve themselves by working. Only in the U.S. was land freely available and relatively cheap, so anyone could farm if they really worked at it. Only in the U.S. were factories abundant, so anyone, even the unskilled laborer or the city poor, could earn a living wage. One of the most persuasive arguments anti-slavery groups made in the antebellum period was that slave labor robbed free men of the chance to work; the Free Soil political party made right-to-labor its main plank. The U.S. could only be great so long as its citizens had the opportunity to contribute their honest toil to the economy and improve both themselves and their nation.

But until 1869, no official body had made the claim that individuals had a legal right to pursue their occupation, no matter the consequences to others. Everyone had the opportunity to work, but no one had the legal protection to work in any way they saw fit. That would all change with a group of butchers in Louisiana.

In the mid-1800s, many butchers worked just north of New Orleans, throwing their offal into the Mississippi River. The end result was that low tide meant the reek of rotting animal carcasses filled the city, and the city’s drinking water was irredeemably polluted with blood and feces. To remedy this situation (at least for New Orleans), the city government requested that the butchers move their shops south of the city. But this wasn’t the simple offer it seemed: the land south of the city that the butchers were to remove to was owned by the state, which demanded a high rent for the new space. The butchers, fearing bankruptcy if they had to pay the high rents, sued the state and the corporation it had set up to administer the land.

Their claim was not just that the rents were unfair and that the state-owned company had no competition and could therefore raise the rents as high as it liked. That would be simple extortion. Instead, they took their argument to a new level by saying that they had a constitutionally protected right to pursue an occupation, and that forcing them to move deprived the butchers of their right to do their work as they saw fit. If they felt that working upriver from the city of New Orleans was good for their business, then any attempt to remove them—for any reason, even the disease their offal brought to the residents of the city—was an unconstitutional attempt to deprive them of the right to work.

The lower courts which heard this case found in favor of the state, but the butchers persisted, and in 1873 they took their case all the way to the Supreme Court. They also came up with an argument worthy of that highest of courts: the lawyers for the butchers actually went so far as to bring in the newly passed Fourteenth Amendment to support their case. This Amendment was meant to extend federal protection to formerly enslaved black Americans by overriding any possible state or local laws that would deny them due process and basically re-enslave them. The Slaughterhouse lawyers applied it to say that the state was depriving the butchers of their right to work and make a living while denying them due process under the law. You can’t just tell people to move because they’re poisoning a city’s water supply, the lawyers said; you have to take into consideration those people’s right to make a living, and if moving their business will harm that living, they can’t be made to move. People have a constitutionally protected right to work.

The Court found in favor of the state once again, but only by a 5-4 margin. It did not reject the butchers’ claims that they had a constitutional right to practice their profession in the way that seemed best to them. It decided, rather, that the Fourteenth Amendment was only about federal protection of citizenship; it was meant to preserve the citizenship of formerly enslaved people against state laws. Slavery was now illegal, and could not be reinstated by state laws. The butchers had not been deprived of their citizenship. The right to work could be managed by each state as it saw fit, and in the case of the butchers, the state had a clear right to uphold the common good by removing a clear threat to the public health—New Orleans had suffered nearly a dozen cholera outbreaks since 1832, which were clearly related to the offal in the drinking water. The state has a right and a duty to protect its citizens, stated the majority opinion, and the butchers must go.

But the minority opinion latched on to the idea that businesses themselves had a right to exist. Justice Stephen Field wrote in the dissenting opinion,

“It is contended in justification for the act in question that it was adopted in the interest of the city, to promote its cleanliness and protect its health, and was the legitimate exercise of what is termed the police power of the State. That power undoubtedly extends to all regulations affecting the health, good order, morals, peace, and safety of society, and is exercised on a great variety of subjects, and in almost numberless ways. All sorts of restrictions and burdens are imposed under it, and when these are not in conflict with any constitutional prohibitions, or fundamental principles, they cannot be successfully assailed in a judicial tribunal.  With this power of the State and its legitimate exercise I shall not differ from the majority of the court. But under the pretence of prescribing a police regulation the State cannot be permitted to encroach upon any of the just rights of the citizen, which the Constitution intended to secure against abridgment.

…It is contended in justification for the act in question that it was adopted in the interest of the city, to promote its cleanliness and protect its health, and was the legitimate exercise of what is termed the police power of the State. That power undoubtedly extends to all regulations affecting the health, good order, morals, peace, and safety of society, and is exercised on a great variety of subjects, and in almost numberless ways. All sorts of restrictions and burdens are imposed under it, and when these are not in conflict with any constitutional prohibitions, or fundamental principles, they cannot be successfully assailed in a judicial tribunal. ” [my italics]

The subtle change going on here is evident, first in the phrase “the just rights of the citizen”. While Field most likely meant it to refer to the men who worked at their jobs, later corporate lawyers and big business owners would morph “citizen” to mean the business itself—the corporation. If a person has the right to work, then doesn’t a business have the right to exist, so it can provide that work? And if a business has a right to exist, it has the right to operate in any way it sees fit. Successful business was determined by profits, and if a profitable company pursued certain business tactics like monopoly or price-fixing or child labor, who could tell that company it had to stop? It was providing work for thousands of people, creating jobs, and fueling the economy. What outside body could decide that those profitable tactics were wrong? How could anything that made money, jobs, and materials be wrong? The law as people knew it simply did not apply to business. Business was a new class of citizen.

Secondly, the right of a government to impose restrictions in the name of the common good and public health and safety is unimpeached only when it is “not in conflict with any constitutional prohibitions”. But if corporations have a constitutionally protected right to exist and conduct business as they see fit, then no government can impose any restrictions on them.

Field went even further, invoking the spectre of  “involuntary servitude” and using language [in italics] that seemed to refer to the forced removal of the butchers and the restriction that they work only in one allotted location:

“[It is] clear that [the words "involuntary servitude"] include something more than slavery in the strict sense of the term; they include also serfage, vassalage, villenage, peonage, and all other forms of compulsory service for the mere benefit or pleasure of others. Nor is this the full import of the terms. The abolition of slavery and involuntary servitude was intended to make every one born in this country a freeman, and as such to give to him the right to pursue the ordinary avocations of life without other restraint than such as affects all others, and to enjoy equally with them the fruits of his labor. …A person allowed to pursue only one trade or calling, and only in one locality of the country, would not be, in the strict sense of the term, in a condition of slavery, but probably none would deny that he would be in a condition of servitude. He certainly would not possess the liberties nor enjoy the privileges of a freeman. The compulsion which would force him to labor even for his own benefit only in one direction, or in one place, would be almost as oppressive and nearly as great an invasion of his liberty as the compulsion which would force him to labor for the benefit or pleasure of another, and would equally constitute an element of servitude.” [my italics]

(It is bitterly ironic that slavery would come up in this case, as one of the lawyers for the butchers was John A. Campbell, who had resigned from the Supreme Court to serve the Confederacy at the start of the Civil War and spent his post-war career thwarting black Americans’ attempts to enjoy the protections of the Fourteenth Amendment.)

The door was now open to other lawyers representing much bigger clients than the Louisiana butchers to claim that any restrictions on big business was tantamount to slavery. Price-fixing, monopolies, hostile takeovers, graft, child labor, inferior-grade materials (including foodstuffs), corrupt trusts, and other practices would all be protected or ignored by the law on the grounds that these were the necessary components of successful corporations. The U.S. government was particularly susceptible to this argument in 1873. Determined to grow the economy after the Civil War, and devastated by the financial panic of 1873 itself, the government was more willing to let profitable corporations do whatever it took to build the economy.

So corporations began to take on the rights of citizens, and very protected citizens at that, while workers, small businessmen, consumers, and others were relegated to second- or third-class citizens. It would take decades of Progressive reforms, beginning in the late 1800s and lasting into the mid-20th century, to undo the damage and make corporations accountable to the law.

We are seeing a pendulum swing now, though, in the early 21st century, as corporations have gained the status of private citizens so far as political campaign contributions go, and the federal government is loathe to tax corporations appropriately. Who knows what the next Slaughterhouse Case will be?

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The Cross of Gold, the 1896 presidential election, Scopes, and beyond

Posted on February 14, 2012. Filed under: American history, Economics, Politics | Tags: , , , |

Part the last of our series on William Jennings Bryan’s famous 1896 “Cross of Gold” speech brings us to the 1896 election, for which Bryan was the Democratic candidate. He ran against Goldbug William McKinley who, like most Republicans, blamed the Democrats and their bi-metallism platform for the economic Panic of 93. The McKinley campaign issued fake dollar bills that read “IN GOD WE TRUST…FOR THE OTHER 53 CENTS” to illustrate the Republicans’ belief that a dollar backed by silver instead of gold would only be worth 47 cents. McKinley looked for support not only from the big businessmen, financiers, and bankers Bryan decried in his Cross of Gold speech, but also from rich farmers, skilled workers, and small businessmen who had more to gain from reducing the flow of currency and curbing inflation.

McKinley was successful in winning this portion of the electorate, which included the wealthy farming states of the Great Lakes region and gold-mining California. McKinley’s alliance with stable, wealthy sections of the populace seemed more promising for the nation’s economic future than Bryan’s rag-tag army of small farmers, coal miners, and social reformers. The 176 electoral votes won in the poor southern and midwestern states that went to Bryan in the election could not match the 271 electoral votes of the wealthy northern and eastern states, and California that went to McKinley.

President McKinley was blessed by incredible good luck: shortly after his election, word of the gold finds in the Klondike reached the continental U.S. California’s gold had pretty much dried up, and McKinley had been faced with the problem of getting enough gold to replace the silver he was going to remove from the currency. That problem was solved by the Klondike, and McKinley was credited at the time with restoring the boom economy.

Bryan ran against McKinley once again in 1900, still pushing for bi-metallism and the little guy, and accusing McKinley of imperialism because of the Spanish-American War of 1898. McKinley won easily, as gold and the war were both very popular with the average American. 1908 saw Bryan run once again, and once again advocating silver while attacking the Republicans for trust-busting that helped big business and hurt small business. His slogan was “Shall the People Rule?” Their response was to elect William Howard Taft in a landslide.

After 1908, Bryan gave up his attempts on the presidency and became a much sought-after public speaker. He was asked to deliver his Cross of Gold speech hundreds of times, and he did so, never tiring of its populist message, and taking heart from its continued popularity. He was made Secretary of State in 1913 by President Wilson but resigned after Wilson declared war on Germany in 1915. Bryan continued to promote reform politics, supporting both Prohibition and women’s suffrage.

But his most famous second act was acting as the prosecution counsel in the famous 1925 Scopes Trial (the Scopes “Monkey Trial”) in which Tennessee teacher John Scopes was put on trial for teaching evolution. Bryan’s reputation made him a seemingly knockout choice, but he was humiliated and outwitted by defense counsel Clarence Darrow, and while the jury returned the guilty verdict everyone had expected they would, the Supreme Court overturned the ruling on a technicality. If you have ever seen a cartoon or show that has a southern lawyer facing a big-time lawyer, and the southern lawyer says “Now, I’m just a country lawyer, but…” then tells a folksy anecdote, then goes in for the kill on the uppity, smug lawyer, that is a reference to Darrow’s skewering of Bryan. It’s unfair in that the big-time lawyer is usually represented as a rich, big-city, corporate lawyer, which is a 180 from who Bryan was, but that is the image that has gone down to posterity. Bryan’s reputation was shattered by the daily newspaper accounts of his humiliations in court at the hands of Darrow; fortunately for him, Bryan did not live long with the embarrassment. He died from complications from diabetes five days after the trial ended.

Thus the curtain closes on Bryan and the Cross of Gold. He recorded the still-popular speech in 1921, and you can hear it here. It’s worth our while to understand this speech and its importance, and to see that while Bryan never won the presidential office he sought, his ideas and reforms were in large part successful, and part of our lives today.

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The Cross of Gold speech: a close reading

Posted on February 8, 2012. Filed under: American history, Economics, Politics | Tags: , , |

Part 3 of our series on William Jennings Bryan’s famous 1896 “Cross of Gold” speech focuses on the text of the speech itself. We’ve looked at the battle over bi-metallism fought by Silverites and Goldbugs that the speech addresses in part 2, and now we’ll see how Bryan lays out his argument for silver.

The text is from History Matters; the following are excerpts, not the entire text (it’s too long for us to consider here). All italics are my own unless noted. So let’s begin:

“I would be presumptuous, indeed, to present myself against the distinguished gentlemen to whom you have listened if this were but a measuring of ability; but this is not a contest among persons. The humblest citizen in all the land when clad in the armor of a righteous cause is stronger than all the whole hosts of error that they can bring. I come to speak to you in defense of a cause as holy as the cause of liberty—the cause of humanity. When this debate is concluded, a motion will be made to lay upon the table the resolution offered in commendation of the administration and also the resolution in condemnation of the administration. I shall object to bringing this question down to a level of persons. The individual is but an atom; he is born, he acts, he dies; but principles are eternal; and this has been a contest of principle.”

—Remember that Bryan was speaking at the Democratic National Convention, so the distinguished gentlemen his audience have already listened to are the candidates vying to become the party’s presidential nominee, and their supporters. Bryan, while a Democrat, was in spirit a Populist; he was a supporter of the “common man”, the farmer and laborer, as opposed to the big businessman, banker, and machine politician. He immediately begins by positioning himself as a somewhat common man who has every right to speak to such a high-powered convention because he is “clad in the armor of a righteous cause”. He may be but “an atom”, but he speaks in the name of an eternal principle “as holy as the cause of liberty” itself, and, indeed the cause of humanity itself. Anyone who studies rhetoric will see a master practitioner in Bryan. He is in just one paragraph humble yet charged with integrity, a defender of humanity. Anyone who could listen to him and not choose the “resolution in condemnation of the [current president's] administration”, the resolution against the gold standard, is basically an inhuman criminal.

“Never before in the history of this country has there been witnessed such a contest as that through which we have passed. Never before in the history of American politics has a great issue been fought out as this issue has been by the voters themselves.”

—Never? There’s never been such a great issue as this? Not federalism, states’ rights, or slavery? Technically Bryan is covering himself by saying that this issue will be fully decided by votes, not war or acts of Congress. But all the same it’s a dramatic overstatement.

“On the 4th of March, 1895, a few Democrats, most of them members of Congress, issued an address to the Democrats of the nation asserting that the money question was the paramount issue of the hour; asserting also the right of a majority of the Democratic Party to control the position of the party on this paramount issue; concluding with the request that all believers in free coinage of silver in the Democratic Party should organize and take charge of and control the policy of the Democratic Party. …Our silver Democrats went forth from victory unto victory, until they are assembled now, not to discuss, not to debate, but to enter up the judgment rendered by the plain people of this country. …Old leaders have been cast aside when they refused to give expression to the sentiments of those whom they would lead, and new leaders have sprung up to give direction to this cause of freedom. Thus has the contest been waged, and we have assembled here under as binding and solemn instructions as were ever fastened upon the representatives of a people.”

—This is the important point: the bi-metallist platform of the Democratic party is the result of grass-roots activism; the “common men” of the party, the voters, have sent the clear message that they want the party to support silver coinage. Party leaders who wouldn’t go along with the people were voted out, and new leaders, like Bryan, voted in. Thus, Bryan, and his listeners, are under “binding and solemn instructions” to support silver. This is how Bryan represents the cause of humanity, and liberty: he is truly a representative of the majority of the people of his party, who lives only to do their will.

“The gentleman who just preceded me [Governor Russell] spoke of the old state of Massachusetts. Let me assure him that not one person in all this convention entertains the least hostility to the people of the state of Massachusetts. But we stand here representing people who are the equals before the law of the largest cities in the state of Massachusetts. When you come before us and tell us that we shall disturb your business interests, we reply that you have disturbed our business interests by your action. We say to you that you have made too limited in its application the definition of a businessman. The man who is employed for wages is as much a businessman as his employer. The attorney in a country town is as much a businessman as the corporation counsel in a great metropolis. The merchant at the crossroads store is as much a businessman as the merchant of New York. The farmer who goes forth in the morning and toils all day, begins in the spring and toils all summer, and by the application of brain and muscle to the natural resources of this country creates wealth, is as much a businessman as the man who goes upon the Board of Trade and bets upon the price of grain. The miners who go 1,000 feet into the earth or climb 2,000 feet upon the cliffs and bring forth from their hiding places the precious metals to be poured in the channels of trade are as much businessmen as the few financial magnates who in a backroom corner the money of the world.”

—Bryan claims that farmers, small businessmen, miners, and common laborers are just as important to the U.S. economy as big businessmen, bankers, lawyers, and Wall Street traders because the former does the exact same thing as the latter: they generate wealth. They put money into the economy. They grow the economy. But he goes further: the small businessman and farmer are actually better than the bankers and big bosses because the little guy actually does real work—he “by the application of brain and muscle to the natural resources of this country creates wealth”. Big guys grow fat off the sweat of the little guy’s brow. Bankers don’t do anything but collect interest, bosses make money off their workers. Miners risk life and limb, while traders sit in nice rooms betting on what the market will do. Does the trader really deserve as much respect and consideration as the miner? Bryan thinks not.

“Ah, my friends, who have made the desert to blossom as the rose—those pioneers away out there, rearing their children near to nature’s heart, where they can mingle their voices with the voices of the birds—out there where they have erected schoolhouses for the education of their children and churches where they praise their Creator, and the cemeteries where sleep the ashes of their dead—are as deserving of the consideration of this party as any people in this country. It is for these that we speak. We do not come as aggressors. Our war is not a war of conquest. We are fighting in the defense of our homes, our families, and posterity. We have petitioned, and our petitions have been scorned. We have entreated, and our entreaties have been disregarded. We have begged, and they have mocked when our calamity came. We beg no longer; we entreat no more; we petition no more. We defy them!”

—Here Bryan builds on his theme of the virtue of the laborer and takes it into truly melodramatic realms. The little guys are all pioneers and mystical seers, “rearing their children near to nature’s heart, where they can mingle their voices with the voices of the birds”, and can be found “out there where they have erected schoolhouses for the education of their children and churches where they praise their Creator, and the cemeteries where sleep the ashes of their dead”. Apparently only country people love nature, provide an education for their children, love God, and bury their dead. Since the little guys of the Democratic party voted for silver, Bryan and all the leaders of the party are speaking for these people, but it goes beyond that; suddenly, Bryan and his audience are those people. “They” turns to “we” as Bryan goes on: “We are fighting in the defense of our homes, our families, and posterity… We beg no longer; we entreat no more; we petition no more. We defy them!” For someone who started out assuring a Massachusetts Democrat that no one in the room had any hostility toward the east coast, Bryan has quickly turned the east coast into a hideous “them” who the Democrats are not just fighting but defying.

“Mr. Jefferson, who was once regarded as good Democratic authority, seems to have a different opinion from the gentleman who has addressed us on the part of the minority. Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business. I stand with Jefferson rather than with them, and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business.”

—If putting democratically elected government representatives rather than rich, corrupt bankers,  in control of U.S. economic policy was good enough for Thomas Jefferson, it’s good enough for Bryan.

“The gentleman from New York says that he will propose an amendment providing that this change in our law shall not affect contracts which, according to the present laws, are made payable in gold. But if he means to say that we cannot change our monetary system without protecting those who have loaned money before the change was made, I want to ask him where, in law or in morals, he can find authority for not protecting the debtors when the act of 1873 was passed when he now insists that we must protect the creditor.”

—A New Yorker (of course–east coast!) says he’ll go along with bi-metallism, which reduces the value of the dollar, only if contracts that were signed before the bi-metallism law is passed are mandated to be paid in gold. So if I lend someone $10 in gold, I want them to repay that loan with ten valuable, gold-backed dollars, not ten silver-backed dollars that are only worth about $6 in the international markets. This would basically protect banks, the enemy of the farmer and small businessman who have to borrow a lot of money under the gold standard. But Bryan says, You’re very concerned about protecting lenders—why didn’t you care about protecting borrowers during the Crash of 1873, when many were forced into bankruptcies as banks called in loans? The New Yorker, of course, is biased against the little man.

“Now, my friends, let me come to the great paramount issue. If they ask us here why it is we say more on the money question than we say upon the tariff question, I reply that if protection has slain its thousands the gold standard has slain its tens of thousands. If they ask us why we did not embody all these things in our platform which we believe, we reply to them that when we have restored the money of the Constitution, all other necessary reforms will be possible, and that until that is done there is no reform that can be accomplished.”

—Why is the party focusing its entire platform on one issue, bi-metallism? Doesn’t the country have other problems that need to be addressed? Bryan replies that bi-metallism is the source of nearly all the problems in the country: debt, small business failure, monopoly, etc. If silver is restored, “all other necessary reforms will be possible.”

“Why is it that within three months such a change has come over the sentiments of the country? Three months ago, when it was confidently asserted that those who believed in the gold standard would frame our platforms and nominate our candidates, even the advocates of the gold standard did not think that we could elect a President… Mr. McKinley was nominated at St. Louis upon a platform that declared for the maintenance of the gold standard until it should be changed into bimetallism by an international agreement. Mr. McKinley was the most popular man among the Republicans ; and everybody three months ago in the Republican Party prophesied his election… Why this change? Ah, my friends, is not the change evident to anyone who will look at the matter? It is because no private character, however pure, no personal popularity, however great, can protect from the avenging wrath of an indignant people the man who will either declare that he is in favor of fastening the gold standard upon this people, or who is willing to surrender the right of self-government and place legislative control in the hands of foreign potentates and powers…”

—Goldbugs had this 1896 election locked up with their pro-gold Republican candidate McKinley, and were sure bets to steamroll the Democrats into accepting the gold standard as well, but the sheer and pure power of the People, the little guys, won out. McKinley’s “personal popularity, however great”, cannot protect him from “the avenging wrath of an indignant people”. McKinley’s decision to act bilaterally with the United States’ international trading partners and adopt a currency policy that everyone agreed on, was in effect a move to “surrender the right of self-government and place legislative control in the hands of foreign potentates and powers…” Thus the rise of the Democrats, against all odds, in the election.

“If they tell us that the gold standard is the standard of civilization… we can tell them this, that they will search the pages of history in vain to find a single instance in which the common people of any land ever declared themselves in favor of a gold standard. [This] is a struggle between the idle holders of idle capital and the struggling masses who produce the wealth and pay the taxes of the country; and my friends, it is simply a question that we shall decide upon which side shall the Democratic Party fight. Upon the side of the idle holders of idle capital, or upon the side of the struggling masses? [The] sympathies of the Democratic Party, as described by the platform, are on the side of the struggling masses, who have ever been the foundation of the Democratic Party. There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it.”

—The only people who want the gold standard are the parasitic, idle, undemocratic rich. There is no trickle-down economics, where legislation that makes the rich richer also benefits the poor (“their prosperity will leak through on those below”). What does exist is poor men working their way up the ladder through their smarts and hard work and democratic principles, which benefits the whole nation.

“You come to us and tell us that the great cities are in favor of the gold standard. I tell you that the great cities rest upon these broad and fertile prairies. Burn down your cities and leave our farms, and your cities will spring up again as if by magic. But destroy our farms and the grass will grow in the streets of every city in the country.”

—Immediately after this, Bryan will insist once again that he accuses the east coast of no wrong; it is clear, however, that this is a west v. east battle for him, great cities against small farms, “broad and fertile prairies” against cities. Farms are the backbone of the economy and the virtue of the nation, and it is farms that are irreplaceably important, not cities and banks and smokestacks.

“If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.”

—There is power in our union: the battle for silver will be won by the little man, the “producing masses of the nation”, and not the inactive parasites sitting on their golden thrones in New York or Boston. The poor man will not be crucified with a crown of thorns, will not be sacrificed to the gold standard; and since the little guy is humanity, “you shall not crucify mankind upon a cross of gold.”

One can only imagine the torrential applause this speech was concluded with. Bryan was elected the Democratic Party’s presidential candidate, and newspapers across the country reverberated with the story and the speech, which was reprinted ad infinitum. Next time, we’ll see how it all played out.

Next time: the 1896 election

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Silverites, Goldbugs and the Cross of Gold

Posted on February 2, 2012. Filed under: American history, Economics | Tags: , , , , |

Part 2 of our series on William Jennings Bryan’s famous 1896 Cross of Gold Speech provides background on the issue at the heart of that momentous address to the Democratic National Convention.

When gold was discovered in California in 1848, there was a Gold Rush that opened the west and changed the nation. When silver was discovered in the west in the 1860s, however, there was no Silver Rush. For decades the federal government had valued silver at 16:1 against gold—that is, it took 16 ounces of silver to equal 1 ounce of gold in value. It was much more lucrative to find gold than silver.

But the U.S. was not on the gold standard. Anyone could turn in gold or silver in any form—jewelry, bars, coins, etc.—to a U.S. Mint and receive dollars for their metal. Gold and silver could both be turned in for dollars, and this is called bi-metallism. Our currency was backed by silver and gold.

This system was threatened, however, by the Gold Rush. Gold flooded the market, making silver relatively scarce. While the Mint still offered the 16:1 ratio, silver could be sold privately for more—12:1, 10:1, etc. People stopped taking their silver to the Mint and began hoarding it or selling to it private or foreign buyers.

Such was the situation when silver was discovered in Nevada in the 1860s. While there was no Silver Rush, silver did begin to flood the market, and those private buyers and great 12:1 deals for silver dried up. Now you had to take 20:1 or 25:1 deals. But the U.S. Mint was still offering 16:1, and people who found themselves with too much silver on their hands flocked back to the Mint to turn it in for dollars. As a result, more silver dollars were minted.

All of this silver being turned in for dollars was good news for westerners, rural farmers, and the poor because it put more dollars into circulation. You can’t spend your silver jewelry, but you’ll spend the dollars you get for it. More money in circulation means there’s less of a need for people to borrow money, and that drives down interest rates. Farmers who needed to buy the new farm equipment that the Industrial Revolution was making necessary could buy it without going into debt with a loan. Poor people could buy more goods. These were the Silverites, who welcomed the liquidity of bi-metallism during a silver boom.

But not everyone was happy. The heart of business in the U.S. was in the east, on Wall Street and in the big industrial cities, and eastern banks had made fortunes loaning money to westerners, especially farmers, and charging high interest rates. With the boom in silver, that was diminished, and big business cried foul to the government through its lobbyists. These were the Goldbugs, who wanted to make dollars scarce by stopping the conversion of silver to dollars.

The situation came to a head in 1873. All that basically worthless silver pouring into the federal government for a decade had caused an economic crisis. The dollar was being backed more and more by silver, and less and less by gold. And since silver had lost so much value, the dollar might lose its value abroad. If a European won’t buy your silver, they’re not going to accept your silver-backed dollars. So Congress passed the Coinage Act of 1873, which stated that the dollar would no longer be backed by silver, eliminated the silver dollar, and severely limited how much silver Mints were allowed to accept from the public. Bi-metallism was over.

Silverites called it the  “Crime of ’73,” and claimed that justice was thwarted by rich businessmen. Goldbugs celebrated this embrace of the gold standard and claimed it was “sound money” policy.

Now you see what Bryan is driving at. He was from Nebraska, a western farming state whose people were hurting from the clampdown on silver. In his speech he is saying that he will not let the U.S. crucify the common man on a cross of gold—he will not let the government stay on the gold standard at the expense of the poor, the farmer, the western rancher or small businessman. If elected president, he will bring back bi-metallism, the dollar will be backed by gold and silver, and there will be more dollars in circulation, reducing debt.

Next time: close-reading the speech

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The “Cross of Gold” speech: what is it about?

Posted on January 27, 2012. Filed under: American history, Economics, Politics | Tags: , , |

Welcome to a series on William Jennings Bryan’s famous 1896 Cross of Gold speech. This speech, delivered at the Democratic National Convention, helped win the Bryan, former Representative to Congress for Nebraska, the presidential nomination of the Democratic party. It’s a very famous speech and it was powerfully delivered, and was so popular that for decades after the convention Bryan was asked to deliver the Cross of Gold speech, and did.

But let’s start by being frank: this speech suffers, for the 21st-century reader, from two major drawbacks: first, and foremost, it never makes clear what on Earth the problem is that it’s addressing; and second, it is written in the bombastic 19th-century style that thrives on rhetorical flourishes and long, drawn-out analogies. Thus it’s hard for modern-day readers to make much headway through Cross of Gold. One might read the entire speech and not understand what issue Bryan is addressing. The reason for this is that by the time he gave this speech, the issue of coining silver v. remaining on the gold standard had been a violently contested political, social, and economic issue for decades. Bryan’s audience didn’t need a lesson on what the issue was. Everyone in that convention hall knew what their party’s stand was on silver, and all Bryan had to do was to reinforce the righteousness of that stance by talking about how it would help the farmer and other “common men”. It would be like giving a speech today where you just kept saying “Tea Party ideas”—your audience would know what that shorthand means. You wouldn’t have to explain it. You could just talk about how a) harmful or b) good those ideas were, depending on your political stance.

But today, we know little about the savage war over the coinage of silver, and this has created a terrible vacuum where we continue to study Bryan’s famous speech with almost no background on what it was addressing and no conception of what it means. It has become a ritual with no meaning. Let’s rectify that here.

We’ll move into the background of the speech next time with a history of the battle between Silverites and Goldbugs, as they were called, and the principles they were fighting over. It is actually fascinating, and focuses on themes that are still very much front-and-center in 21st-century U.S. politics, including “class warfare”, business v. individual rights, how much control the federal government should have, financial booms and busts, and more.

Next time: Silverites v. Goldbugs

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Taxation = Slavery

Posted on August 1, 2011. Filed under: American history, Civil Rights, Civil War, Economics, What History is For | Tags: , , , , |

As always, when history is being made in the present, or the present is clearly marked in a historical cycle, we delve into it here on the HP.

In this case, it is the debate in Congress over whether to raise the debt ceiling or default. The main sticking point has been the refusal of a sizable minority of Republicans, mostly belonging to the Tea Party faction, to allow the federal government to collect tax revenue. This group demands tax breaks for the wealthy, including corporations, and the maintenance of tax loopholes that allow millions of dollars of tax revenue to go uncollected.

This is not the place to go into the details of their platform, or the response by moderate Republicans and Democrats. Here, the issue is the extreme instransigence of the Republican minority on the issue of taxation. It has become, to them, a crime for the government to raise taxes or even to collect taxes. To them, there is no compromise on taxation: you are either for it (and therefore un-American) or against it. Again, we’ll leave aside for this post the historical fallacy of anti-tax advocates calling themselves “Tea Party”; read about that here. For now, we’ll focus on the black-and-white issue they have turned taxation into. It’s hard to think of a time when Congress was so completely divided, so unwilling and unable to compromise on an issue; when you look back at our history, only one comparable time comes up—the slavery debates of the late 1850s.

You could not compromise on slavery during those Congresses. You were for it or against it, and this divide worked its way into many other, seemingly unrelated issues, and the uncompromisable issue of slavery could not be resolved. Congress could no longer function to govern the country, and civil war ensued at the 1860 election.

Today, Congress’ refusal to accept compromise on taxation is quite similar to those Congress’ refusal to accept compromise on slavery. But there are two key differences: first, the American people were becoming just as divided over slavery as their representatives; second, slavery really is an issue you can’t seriously compromise on.

Americans in the 1850s didn’t want to fight a war over slavery, but they were rapidly becoming more polarized over it. Even those who didn’t particularly want abolition for morality’s sake blamed slavery for all of America’s ills, and would have gotten rid of it for economic or political reasons. Their representatives’ furor over slavery was not out of line, then, with Americans’ feelings about slavery. It does not seem accurate to make that claim today. Many Tea Party Congress members have said their constituents contacted them to say it’s okay to raise taxes to avoid default, but those members refused to do so out of principle. The extreme polarization in Congress today does not really have its roots in how Americans are feeling.

And taxation is not slavery. It’s not a black-and-white, moral issue that no one can take a moderate stance on. The government raises taxes in order to provide services. It’s a very simple and fundamental tenet of government. We have representation to our government to decide what services and how much taxation, not to stop the collection of tax revenue.

The taxation issue is part of a larger move to reduce the federal government to a negative function: the federal government will not provide social services (no Medicare, Social Security, Head Start, etc.), will not regulate business (protect the environment, police Wall Street, etc.), will not really legislate (instead, Constitutional Amendments will be put in place to handle social issues), amd will not extend civil rights to immigrants, gay people, etc. All it would do under this plan, apparently, is fund wars.

No one really wants to live in that world. It is undemocratic, and unself-sustaining. This experiment with such negative chaos is a dangerous one. The first experiment ended in civil war; it remains to be seen where we are headed in the next 20 years.

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The 2010 Census data is in!!

Posted on March 29, 2011. Filed under: American history, Economics, Politics | Tags: , , |

It’s a very exciting historical moment when census data is published. It is a real example of the historic present; you see where your every day lived reality fits into much bigger, much longer historical frames—where you are in an era. We’re going to take a look at the census data from a few angles. The first step is to dive in to the raw data, which you can do in a fascinating way at Mapping the U.S. Census. Rollover a county to see general data, enter an address, zip code, or city at top right to get amazingly detailed maps–for example, if you put in your zip code just that area comes up (your very own “census tract”).  Take a look at where you live, or have lived, and see the changes.

Then take a look at Prof. John Logan’s census analysis . Logan is a sociologist at Brown University who has studied census data for decades. He has interesting analysis on segregation and the impact of race—as in, what difference does it make if Asians begin moving to white neighborhoods, as opposed to Latinos, as opposed to black people?

Next time: How we are sorted

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The federal government invents Social Security

Posted on September 6, 2009. Filed under: American history, Economics, Politics | Tags: , , |

Our final post in the series on whether the federal government is capable of guarding the public health and well-being focuses on Social Security.

The reputation of the federal Social Security program is tarnished today because it is being strained by huge numbers of retirees and near-retirees, and there are justifiable fears that it will go bankrupt. But this cannot make us forget how important, how groundbreaking the program was. What, after all, is the fuss all about? Why care if Social Security goes bankrupt? The answer is that the Social Security program created and managed by the federal government was the first, and remains the only, safety net for elderly and other at-risk members of our U.S. citizenry.

The Social Security Act of 1935 was a response to the Great Depression. In the 1930s, the only form of financial support for the elderly was a government pension. You received a pension if you had served in the U.S. armed forces or worked for the U.S. government. This, of course, meant that only men could receive pensions. Widows and children of pensioned men could receive their male relative’s pension once he died, but only if they applied for it. And men who were not veterans or former federal employees had nothing unless their employers offered pensions, which was not usual.

These pensions were nothing to write home about. They were extremely small. Elderly people, widows and children with pensions lived very meagerly, and those without pensions had to have relatives willing to support them and even take them in. If you had no pension and no family to fall back on, you were forced to beg for public charity. End of story.

After the stock market crash in October 1929, many elderly, widows, and children lost their pensions and/or the support of their families. Their families had lost their income and were now penniless as well. It is estimated that by 1934 over half of all elderly Americans were unable to support themselves financially. That’s over half of Americans over 65 living on charity—charity that was drying up fast. Thirty states set up state pensions to try to relieve elderly poverty, but the states themselves were poor and the relief was slight, and only about 3% of elderly Americans were receiving any state money by 1935, when the Social Security Act was passed.

There was resistance to the idea of Social Security. Americans had convinced themselves that they weren’t a people who accepted charity, or even a helping hand, especially from the government. People were reluctant to admit that they had no family to depend on for help. One of the ingenious components of the Act was that it paid the elderly with money taxed on wages, taxes that would begin to be collected in 1937 so payments could begin in 1942. In other words, workers paid into the fund, so that when they retired, they would simply be taking back money they had set aside, rather than taking charity from others. This overcame the reluctance to lose face by taking a handout.

In a way, it wasn’t even the payments the elderly received that were so groundbreaking. It was the idea that the federal government, the government of any nation, would make it one of its responsibilities to provide for people in their old age. Government policies for the poor up to that date had consisted of various “poor laws,” which usually mandated prison for those poor who were deemed able to work but did not have jobs and those unable to work, or work farms/workhouses where the poor performed slave labor. If workers were to be taken care of once they grew too old to work, which was not a popular idea at all, then the companies they had worked for should provide a pension, but no one thought those companies should be forced to do so. Basically, no country thought the elderly poor needed or deserved special care, and in the U.S. there was an especially powerful idea that Americans could take care of themselves that foiled any attempt to help the vulnerable.

The Social Security Act included all workers, male and female. It was expanded in 1939 to include widows and children of working men. These people—the elderly, widows, and their children—quickly came to depend on Social Security, and the whole nation supported the idea that they should be reimbursed in their old age for the work they did in their youth. There was no shame attached to accepting Social Security by the 1950s, and the program came to be an accepted part of the American system.

Social Security was well-managed by the government that created it, although it is in serious danger now simply because of our massive population growth. It is perhaps the most important of the government programs put in place in the U.S. for the protection and care of its citizens. It is proof, along with federal highway safety programs and the FDA, of the ability and desire of the federal government to protect the public health and well-being. The fears expressed in 2009 about the federal government becoming involved in health care are just another example of Americans wishing to believe that we are different from all other nations and peoples, that we alone can always take care of ourselves without any help, and that we alone need to keep our federal government constantly at bay, as if it were a dangerous threat to our liberty.

But it is our federal government, our system of representative democracy, that truly makes us unique by creating our liberty. We should give it every opportunity to protect our equality of opportunity (that is, access to good and affordable health care) and justice for all (who seek health care). Our government is as good and as just as we demand it to be, and it is only by continually engaging with it, not fending it off, that we remain American.

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Federal regulation of car safety–a success!

Posted on September 2, 2009. Filed under: American history, Economics, Politics | Tags: , |

Last time in this series on successful federal management of public health and safety, we looked at Ralph Nader’s expose of automakers’ decision to put style ahead of safety. Now we see the federal government step in.

The 1966 Highway Safety Act mandated that the states create their own highway safety programs to reduce accidents, develop (or improve) emergency care for car accidents (this was when the paramedic program or EMS really came on the scene), and created the Department of Transportation (DOT), including the National Highway Traffic Safety Administration (NHTSA), to oversee these efforts. From now on, drivers would not be blamed for all car accidents.

We have the NHTSA to thank for crash-test dummies, fuel economy standards, safety belts, air bags, auto recalls, and consumer reports (not Consumer Report itself, but the concept of giving car buyers objective analyses of how safe cars are).  These are safety features we take for granted today, but I remember the 1970s, when older cars I rode in didn’t have seat belts, and even when cars did have them, drivers misled by automakers believed that the belts wouldn’t help in an accident, and that the best way to stay safe while driving was to not make mistakes that led to an accident—remnants of the “it’s the driver’s fault” mentality pushed by automakers prior to 1966.

Automakers have continued to fight the federal government on safety, delaying HID and halogen headlights, air bags, and safety features to promote seat belt use, such as those pinging alarms you get when you don’t have yours on.

In all, federal regulation of car and road safety has contributed significantly to American health and well-being. Next time, we’ll begin our conclusion to this series with perhaps the biggest federal health-and-well-being program of them all: Social Security.

Next: How big is Social Security?

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