Redirect


This site has moved to http://economistsview.typepad.com/
The posts below are backup copies from the new site.

August 31, 2007

The Plot against FDR

An email brings a link to a radio program at the BBC on an attempted coup during the Roosevelt presidency:

The Whitehouse Coup, BBC: Document uncovers details of a planned coup in the USA in 1933 by right-wing American businessmen  The coup was aimed at toppling President Franklin D Roosevelt with the help of half-a-million war veterans. The plotters, who were alleged to involve some of the most famous families in America, (owners of Heinz, Birds Eye, Goodtea, Maxwell Hse & George Bush’s Grandfather, Prescott) believed that their country should adopt the policies of Hitler and Mussolini to beat the great depression. Mike Thomson investigates why so little is known about this biggest ever peacetime threat to American democracy. [Listen to this programme in full] [View a picture gallery of images related to this edition]

I'm not overly familiar with this episode, so here's what Wikipedia has to say:

Business Plot, Wikipedia: The Business Plot, The Plot Against FDR, or The White House Putsch, was an uncovered conspiracy involving several wealthy businessmen to overthrow President Franklin D. Roosevelt in 1933.

Purported details of the matter came to light when retired Marine Corps Major General Smedley Butler testified before a Congressional committee that a group of men had attempted to recruit him to serve as the leader of a plot and to assume and wield power once the coup was successful. Butler testified before the McCormack-Dickstein Committee in 1934. In his testimony, Butler claimed that a group of several men had approached him as part of a plot to overthrow Roosevelt in a military coup. One of the alleged plotters, Gerald MacGuire, vehemently denied any such plot. In their final report, the Congressional committee supported Butler's allegations on the existence of the plot, but no prosecutions or further investigations followed, and the matter was mostly forgotten.

General Butler claimed that the American Liberty League was the primary means of funding the plot. The main backers were the Du Pont family, as well as leaders of U.S. Steel, General Motors, Standard Oil, Chase National Bank, and Goodyear Tire and Rubber Company. A BBC documentary claims Prescott Bush, father and grandfather to the 41st and 43rd US Presidents respectively, was also involved. ...

Partial corroboration of Butler's story

Portions of Butler's story were corroborated by:

  • Veterans of Foreign Wars commander James E. Van Zandt. "Less than two months" after General Butler warned him, he said "he had been approached by 'agents of Wall Street' to lead a Fascist dictatorship in the United States under the guise of a 'Veterans Organization.' "
  • Captain Samuel Glazier—testifying under oath about plans of a plot to install a dictatorship in the United States.
  • Reporter Paul Comly French, reporter for the Philadelphia Record and the New York Evening Post.

...Historical treatment

Several scenarios have been proposed in explaining why the affair did not become a cause celebre, among which are:

  • The story was an embarrassment to people of influence, and it was best to sweep it under the rug as quickly as possible.
  • In 1934, newspapers were controlled by a relatively small elite — according to then-Interior Secretary Harold L. Ickes, 82% of all dailies had monopolies in their communities. Proponents of the theory thus suggest that the media downplayed Butler's testimony based on the interests of their advertisers and owners.
  • Some of Roosevelt's advisors were in on the plot, and downplayed it when it was exposed to prevent their dirty laundry from being aired in public.

Those who doubt Butler's testimony claim that it simply lacked evidence.

  • Historian Robert F. Burk: "At their core, the accusations probably consisted of a mixture of actual attempts at influence peddling by a small core of financiers with ties to veterans organizations and the self-serving accusations of Butler against the enemies of his pacifist and populist causes."
  • Historian Hans Schmidt: "Even if Butler was telling the truth, as there seems little reason to doubt, there remains the unfathomable problem of MacGuire's motives and veracity. He may have been working both ends against the middle, as Butler at one point suspected. In any case, MacGuire emerged from the HUAC hearings as an inconsequential trickster whose base dealings could not possibly be taken alone as verifying such a momentous undertaking. If he was acting as an intermediary in a genuine probe, or as agent provocateur sent to fool Butler, his employers were at least clever enough to keep their distance and see to it that he self-destructed on the witness stand...MacGuire repeatedly perjured himself...Butler may have blown the whistle on an incipient conspiracy..."
  • Historian Arthur M. Schlesinger Jr.: "Most people agreed with Mayor La Guardia of New York in dismissing it as a "cocktail putsch... As for the House committee, headed by John McCormack of Massachusetts, it declared itself "able to verify all the pertinent statements made by General Butler" except for MacGuire's direct proposal to him, and it considered this more or less confirmed by MacGuire's European reports. No doubt MacGuire did have some wild scheme in mind, though the gap between contemplation and execution was considerable and it can hardly be supposed that the republic was in much danger."
  • Historian James E. Sargent reviewing "The Plot to Seize the White House" by Jules Archer: "Thus, Butler (and Archer) assumed that the existence of a financially backed plot meant that fascism was imminent and that the planners represented a wide spread and coherent group, having both the intent and the capacity to execute their ideas. So when his testimony was criticized and even ridiculed in the media and ignored in Washington, Butler saw (and Archer sees) conspiracy everywhere. Instead, it is plausible to conclude that the honest and straightforward, but intellectually and politically unsophisticated, Butler perceived in simplistic terms what were in fact complex trends and events. Thus he leaped to the simplistic conclusion that the President and the Republic were in mortal danger. In essence, Archer swallowed his hero whole."

If you know more about this, I'd be interesting in learning more.

Brad DeLong: Robert Samuelson's "Intellectual Three-Card-Monte"

Since Brad took the time to do this good deed, I should help out as I can, so here's his reaction to Robert Samuelson's latest column:

Carbon Blogging: "In That Case, We Have No Time to Lose. Plant [the Trees] This Afternoon!" (Why Oh Why Can't We Have a Better Press Corps?/Robert J. Samuelson Is a Bad Person/Washington Post Edition), by Brad DeLong: Mark Thoma does an evil deed by telling me that somebody should take note of Robert Samuelson. And he's right: somebody should. But why does it have to be me?

First, some history: The last time we tried to put a "Pigou tax" on carbon emissions--back in 1993 with the Gore BTU tax proposal--Robert Samuelson opposed it: "Congress," he said, "should... deliver a firm message: We won't pass this [energy] tax... [without] more spending cuts. This would give Congress more time to evaluate the energy tax and put more pressure on the White House to cut spending.... Congress... [should not] be stampeded."

Remember that: Robert Samuelson did not want Congress to be "stampeded" into including a carbon tax in the 1993 reconciliation bill.

Economists believe that things work well when the incentives individuals face--the good or ill that their actions cause for themselves--match up to the good or ill of the impact that their actions have on society as a whole. Thus our liking for energy taxes...: ...a tax on carbon makes [individuals] feel that harm in their pocketbook and so matches up individual incentives with social outcomes. That's what the Gore BTU tax proposal was trying to do.

There are in general two ways that you can match private incentives with social outcomes.

The first is to take individuals' preferences over material goods as given, and use taxes and subsidies to raise the prices of goods that have negative and lower the prices of goods that have positive "externalities"... The second is to try to shift individuals' preferences: appeal to altruism, or to the moral sense ... to get people to feel good about doing deeds that have positive externalities, and rearrange social markers of status and approval to shift people's preferences over goods without changing their material characteristics or prices. Economists generally prefer to work on the tax-and-subsidy side rather than on the preferences side, out of a disciplinary commitment to the idea that cash-on-the-barrelhead is strong and pats-on-the-back are weak. But we do what we can: if we cannot pass a BTU tax, telling people who fund carbon offsets or drive fuel-efficient cars that they are good, responsible, moral people is a perfectly orthodox and constructive thing to do.

But somehow Robert Samuelson doesn't think so today. Attempts to work on the preferences side by saying "good for you!" to Prius drivers get him really, really angry:

Robert J. Samuelson: Prius Politics: My younger son calls the Toyota Prius a "hippie car."... [L]ike hippies, [Prius drivers] are making a loud lifestyle statement: We're saving the planet; what are you doing?... Prius politics is... showing off, not curbing greenhouse gas emissions. Politicians pander to "green" constituents who want to feel good....

California Gov. Arnold Schwarzenegger is the champ of Prius politics, having declared that his state will cut greenhouse emissions to 1990 levels by 2020.... However, the policies to reach these goals haven't yet been formulated; that task has been left to the California Air Resources Board. Many mandates wouldn't take effect until 2012, presumably after Schwarzenegger has left office. As for the 2050 goal, it's like his movies: make-believe. Barring big technological breakthroughs, the chances of reaching it are zero.

But it's respectable make-believe. Schwarzenegger made the covers of Time and Newsweek. The press laps this up; "green" is the new "yellow journalism."... Even if California achieved its 2020 goal (dubious) and the United States followed (more dubious), population and economic growth elsewhere would overwhelm any emission cuts. In 2050, global population is expected to hit 9.4 billion....

[H]ere's what Congress should do... gradually increase fuel economy standards for new vehicles... raise the gasoline tax over the same period by $1 to $2 a gallon... eliminate tax subsidies... for housing.... But practical politicians won't enact these policies, except perhaps for higher fuel economy standards. They'd be too unpopular.

Prius politics promises to conquer global warming without public displeasure.... Deep reductions in emissions... might someday occur if both plug-in hybrid vehicles and underground storage of carbon dioxide from coal-fired power plants become commercially viable.... Prius politics is a delusional exercise in public relations that... [is] not helping the environment [and] might hurt the economy.

In my view, Robert Samuelson is a bad person: when a carbon tax was on the agenda and we had a real window of opportunity, he fought it; now when the only things on the agenda are preference-shaping tools that I regard as very weak compared to a carbon tax, he's against them as well on the grounds that "hippie... Prius politics is... showing off" and that a carbon tax would be good. A little intellectual three-card-monte here, doncha think?

Let me contrast Robert Samuelson's sneering at the "hippies" who want to take the weak "Prius politics" steps at fighting global warming we can take now with one of the favorite stories of somebody I once knew--somebody whose place on the ideological spectrum was the same as Robert Samuelson, but who I think was a good person--the late Lloyd Bentsen, who liked to tell this story and claimed he'd gotten it from John F. Kennedy when they were freshmen in the House of Representatives together:

If you travel through Lorraine, between Neufchateau, Toul, Epinal, and Nancy you find the Chateau de Thorey-Lyautey, retirement home of the French Marshal Louis Hubert Gonzalve Lyautey. Around 1930 the nearly eighty year-old Marshal had a conversation with his landscaper:

Lyautey asked his landscaper if he would on the next day start planting a row of oaks to line the road up to the chateau.

"But Mon Marechal," said the gardener, looking at the aged Lyautey. "The trees will take more than fifty years to grow."

"Oh," said the Marshal. "In that case, we have no time to lose. Plant them this afternoon!"


Notes: Here's the tape from 1993:

Robert Samuelson, Washington Post: March 25, 1993: The Clinton... BTU tax would increase the price of oil by $3.50 a barrel, or about 18 percent of today's price. A ton of coal would increase $5.60, a 26 percent jump. A thousand cubic feet of natural gas would rise about 13 percent.... Yes, it would depress oil imports - but not by much.... Likewise, the tax wouldn't reduce pollution or greenhouse gases because it doesn't cut overall energy use. Economic and population growth will raise energy consumption an estimated 15 percent in the 1990s; the tax might shave the total by 2 percent, says the administration.... The CBO has estimated how big a tax would be required to stabilize emissions of carbon dioxide, the main greenhouse gas and a byproduct of fossil fuels. Compared with the Clinton proposal, the overall tax would have to be twice as high and the tax on coal three times as high....

Clinton... is simply trying to stampede his program through Congress. He envisions a one-time spasm of deficit reduction. By fall, all the political dirty work would be done. This means... accepting a Clinton package that has too many taxes and too few spending cuts....

Congress should separate the energy tax from the Clinton package and deliver a firm message: We won't pass this tax - or its equivalent - until you propose more spending cuts. This would give Congress more time to evaluate the energy tax and put more pressure on the White House to cut spending. Unfortunately, Congress shows no interest in asserting itself. It prefers to be stampeded.

As Robert Samuelson knew back then--and as we all know now--there were no Republican votes for deficit reduction in 1993, no matter what program Clinton proposed. The Republican leadership had decided that they were going to make Clinton's presidency a failure, and would oppose the 1993 budget no matter how many spending cuts were included. Additional spending cuts would have lost left-wing Democratic votes for the reconciliation package. As it was, the reconciliation bill passed by a single vote in each of the houses. Thus a call for Congress to refuse to be "stampeded" was a call for no budget reconciliation bill at all, and thus a call for no increases in taxes--not even on carbon.

Jeffrey Sachs: Peace through Economic Development

Jeff Sachs uses Darfur to illustrate the connections between the natural environment, poverty, population growth, and war:

No development, no peace, by Jeffrey D. Sachs, Project Syndicate: Anyone interested in peacemaking, poverty reduction, and Africa's future should read the new United Nations Environment Program (UNEP) report "Sudan: Post-Conflict Environmental Assessment." ... It is a vivid study of how the natural environment, poverty, and population growth can interact to provoke terrible human-made disasters like the violence in Darfur.

When a war erupts, as in Darfur, most policymakers look for a political explanation and a political solution. This is understandable, but it misses a basic point. By understanding the role of geography, climate, and population growth in the conflict, we can find more realistic solutions than if we stick with politics alone.

Extreme poverty is a major cause, and predictor, of violence. The world's poorest places, like Darfur, are much more likely to go to war than richer places. This is not only common sense, but has been verified by studies and statistical analyses. ...

Extreme poverty has several effects on conflict.

First, it leads to desperation among parts of the population. Competing groups struggle to stay alive in the face of a shortage of food, water, pasture land, and other basic needs. Second, the government loses legitimacy and the support of its citizens. Third, the government may be captured by one faction or another, and then use violent means to suppress rivals.

Darfur, the poorest part of a very poor country, fits that dire pattern. Livelihoods are supported by semi-nomadic livestock-rearing in the north and subsistence farming in the south. It is far from ports and international trade, lacks basic infrastructure ..., and is extremely arid. It has become even drier in recent decades because of a decline in rainfall, which is probably the result, at least in part, of man-made climate change, caused mostly by energy use in rich countries.

Declining rainfall contributed directly or indirectly to crop failures, the encroachment of the desert into pasturelands, the decline of water and grassland for livestock, and massive deforestation. Rapid population growth - from around one million in 1920 to around seven million today - made all of this far more deadly...

The result has been increasing conflict between pastoralists and farmers, and the migration of populations from the north to the south. After years of simmering conflicts, clashes broke out in 2003 between rival ethnic and political groups, and between Darfur rebels and the national government, which in turn has supported brutal militias in "scorched earth" policies, leading to massive death and displacement.

While international diplomacy [is] focused on peacekeeping and on humanitarian efforts to save the lives of displaced and desperate people, peace in Darfur can be neither achieved nor sustained until the underlying crises of poverty, environmental degradation, declining access to water, and chronic hunger are addressed. Stationing soldiers will not pacify hungry, impoverished, and desperate people.

Only with improved access to food, water, health care, schools, and income-generating livelihoods can peace be achieved. ... The way to sustainable peace is through sustainable development. If we are to reduce the risk of war, we must help impoverished people everywhere, not only in Darfur, to meet their basic needs, protect their natural environments, and get onto the ladder of economic development.

links for 2007-07-25

The First Mach 3 Flight: The XB-70A

Seeing an uncle of mine this summer reminded me to make an image of this, which is getting very old and brittle. I don't mean to bore you with my scrapbook, this is just so I have a digital copy, but maybe someone will be interested. It's a postcard, and the test pilot signatures (Al White and Joe Cotton) from the first flight to break the Mach 3 barrier:

Xb70apostcard
[click on image for a larger, clearer version]

My uncle was a civilian engineer at Edwards Air Force base and worked on this project. He sent me this card when I was eight years old.

Here's a bit more on the first test flights, and on a later crash where one of the test pilots who signed the card, Al White, was the only survivor. The postcard flew on the October 14, 1965 flight (as is evident from the postmark), which was apparently the third attempt:

Flight test history, Wiki: The first XB-70 made its maiden flight on September 21, 1964. The first aircraft was found to suffer from weaknesses in the honeycomb construction, primarily due to inexperience with fabrication and quality control of this new material. ... In flight on May 7, 1965, the divider separating the left and right halves of the engine inlet broke off and was ingested into the engines, damaging all six beyond repair. On October 14, 1965, on the first flight exceeding a speed of Mach 3, the stress again damaged the honeycomb construction, leaving two feet (0.6 m) of the leading edge of the left wing missing. These construction problems resulted in the imposition of a speed limit of Mach 2.5 on the first aircraft.

These honeycomb construction deficiencies were almost completely solved on the second aircraft, which first flew on July 17, 1965. On May 19, 1966 aircraft number two flew 2,400 miles (3,840 km) in 91 minutes, attaining Mach 3 for 33 minutes of that flight.

On June 8, 1966, aircraft number two was flown in close formation with four other aircraft, an F-4, F-5, T-38, and an F-104, for the purpose of a photo shoot at the behest of General Electric, manufacturer of the engines of all five aircraft. With the photo shoot complete, the F-104 rolled inverted, passed overtop, and struck the Valkyrie... The Valkyrie entered a spin and crashed following the mid-air collision. NASA Chief Test Pilot Joe Walker, piloting the F-104, and Carl Cross, copilot aboard the XB-70, were killed in the crash, while Al White, the XB-70's pilot, successfully ejected.

The exact cause of the collision is still debated. ... Lt. Colonel Joe Cotton, the USAF's Chief Test Pilot ..., flying a T-38 in the formation, has speculated that Walker, unfamiliar with flying in formation with such a large delta wing aircraft, lost reference to his position relative to the B-70, and simply closed up the formation until the T-Tail of the F-104 struck the Valkyrie's wingtip. Chuck Yeager has also gone on record to echo this position...

On the Editorial Pages

People have, rightly, jumped all over the David Brooks column today in the New York Times that tries to spin a positive story about rising inequality. He is effectively rebutted at:

There are also questions about whether he came up with this himself, or whether he was fed (and willingly ate) the data and arguments:

If so, and it's hard to believe he did this by himself, I wonder who's feeding him?

There is another editorial today, this one in the WSJ, that also deserves a little scrutiny. Apparently Paul Krugman's column on competition among high-speed internet service providers rattled some cages and brought this response from Robert McDowell, a commissioner on the Federal Communications Commission. ("Mr. McDowell is a George W. Bush appointee. He is a former FCC lobbyist from Virginia for telephone companies.")

As you read this keep in mind that when you don't have an argument to offer in rebuttal, a common tactic is to attack the data. The scare tactics, beginning in the second paragraph with every "heavy-handed" possibility he could come up with, also point to the lack of effective counterargument Modern market-based telecommunications regulation that promotes competition through correct market incentives does not fit the "mandates" description he gives, not at all, e.g. see "Designing Incentive Regulation for the Telecommunications Industry," by David E. M. Sappington and Dennis L. Weisman. So his "heavy-handed government mandates" are nothing more than scare tactics. And when argument actual is provided, it's less than convincing:

Broadband Baloney, by Robert M. McDowell, Commentary, WSJ: American consumers are poised to reap a windfall of benefits from a new wave of broadband deployment. But you would never know it by the rhetoric of those who would have us believe that the nation is falling behind, indeed in free fall.

Looming over the horizon are heavy-handed government mandates setting arbitrary standards, speeds and build-out requirements that could favor some technologies over others, raise prices and degrade service. This would be a mistaken road to take -- although it would hardly be the first time in history that alarmists have ignored cold, hard facts in pursuit of bad policy.

Exhibit A for the alarmists are statistics from the Organization for Economic Cooperation and Development. The OECD says the U.S. has dropped from 12th in the world in broadband subscribers per 100 residents to 15th.

The OECD's methodology is seriously flawed, however. According to an analysis by the Phoenix Center, if all OECD countries including the U.S. enjoyed 100% broadband penetration -- with all homes and businesses being connected -- our rank would fall to 20th. The U.S. would be deemed a relative failure because the OECD methodology measures broadband connections per capita, putting countries with larger household sizes at a statistical disadvantage.

I need to jump in here. This whole thing about household sizes, which he makes a big deal of, is a red herring. If you look at this table you see that if you do it as subscribers per household, not per capita, France goes from having slightly more penetration than the US to slightly less. Big deal. And Japan still has higher penetration. Back to the "counterargument":

Furthermore, the OECD does not weigh a country's geographic size...

This is followed by an argument where the author, surprise, "does not weigh a country's geographic size." Comparing the number of "Wi-Fi hot spots" in the U.S. to the number in smaller countries doesn't tell us much:

The OECD conclusions really unravel when we look at wireless services, especially Wi-Fi. One-third of the world's Wi-Fi hot spots are in the U.S., but Wi-Fi is not included in the OECD study...

Most American Wi-Fi users do so with personal portable devices. It is difficult to determine how many wireless broadband users are online at any given moment, since they may not qualify as "subscribers" to anyone's service.

In short, the OECD data do not include all of the ways Americans can make high-speed connections to the Internet, therefore omitting millions of American broadband users. Europe, with its more regulatory approach, may actually end up being the laggard because of latent weaknesses in its broadband market.

The portable device usage isn't included for other countries either, so it's not clear how this adjustment would turn out without actually doing the calculations. Also, when he says "Europe ... may actually end up being the laggard," he implies Europe is not the laggard now, contrary to the impression he is trying to give. Oh well, that's what happens when you are grasping for any argument that might convince the unwary. Continuing:

Our flexible and deregulatory broadband policies provide opportunities for American entrepreneurs to construct new delivery platforms enabling them to pull ahead of our international competitors. For instance, newly auctioned spectrum for advanced wireless services will spark unparalleled growth and innovation.

Soon, we will auction even more spectrum in the broadcast TV bands to spur more broadband competition. In addition, we are in the midst of testing powerful new technologies to use in spectrum located in the "white spaces" between broadcast TV channels.

This is all wonderful news for our future.

But the point is that we are behind now. What happens in the future is a guess, not a certainty, and does not rebut the existing statistics on high-speed access that have been given. He also says:

In a competitive market, consumer demand compels businesses to innovate. ...

Yes, in a competitive market that's true. But these markets are not competitive and that's why we need incentive based regulation to ensure a robust, competitive, telecommunications market. Continuing again:

When it comes to broadband policy, let's put aside flawed studies and rankings, and reject the road of regulatory stagnation. ... Belief in entrepreneurs and a light regulatory touch is the right broadband policy for America.

Better yet, "when it comes to broadband policy, let's put aside flawed" editorials and reject scare tactics. Belief in regulation of monopoly power "is the right broadband policy for America."

Update: Tyler Cowen has more on the WSJ commentary.

Jagdish Bhagwati: Treat Illegal Immigrants Decently

Jagdish Bhagwati on illegal immigration:

Treat illegal immigrants decently, by Jagdish Bhagwati, Commentary, Financial Times: ...US immigration reform ... collapsed in the Senate on June 28 and the nation was left more polarised than ever. What went wrong? ...

The main problem ... was that the 1986 Immigration Reform and Control Act had tried similar reforms ... but had failed. Many who opposed the proposed reforms knew this and would not go along..., convinced that history would repeat itself. As John Kenneth Galbraith once said about his foe Milton Friedman: “Milton’s problem is that his policies have been tried.”

The IRCA had a two-pronged strategy. The amnesty would take care of the stock of illegals, estimated at 6m. Only half took advantage of it, leaving an equal number in illegal status... The flows of illegals were to be taken care of through enforcement at three levels: enhanced border enforcement, employer sanctions and raids against illegals who were already in the US.

None of these worked. Borders could not be controlled unless you were willing to be rough. But you could not be, because illegal immigrants are human beings... [T]hose caught were not incarcerated but simply sent across the border and came back again and again till they got through. ...

As for employer sanctions, hardly any legal actions against employers were undertaken. But even if there had been, few judges would have used draconian punishment against those giving employment to the “huddled masses” seeking work. Equally, few Americans could contemplate with equanimity a manifold increase in disruptive raids against illegals that many considered inhumane.

So, the IRCA predictably did not eliminate the problem. By the time the new reforms were being proposed, the stock of illegals had in fact doubled to an estimated 12m ..., with a yearly absorption of 300,000 illegal workers in the labour force.

The only significant change proposed from the failed IRCA approach was that Mr Bush had asked for a temporary guest-worker programme. The idea was that it would siphon off most of the illegals into a legal channel. But by the time it had been moulded and mauled through successive compromises, it could not be expected to do much...

But all is not lost. Once passions aroused by the proposed reforms have cooled, Americans should be ready to see that a way must be found to treat illegals with the decency and respect that humanity requires, while respecting equally the innate American sense that laws matter. ... Perhaps a different and more realistic approach might get us what we could not achieve with uncompromising proposals.

In particular, why not build on the unappreciated fact that the illegals are not today the underclass with few rights that they were for many years? ... With vastly increased ethnic minority populations, especially Hispanic, the illegals enjoy a higher comfort level than at the time of the IRCA. ... There are numerous non-governmental organisations, such as the National Council of La Raza and civil rights groups such as the American Civil Liberties Union, that give the illegals a substantial sense of protection.

If asking for full citizenship through the amnesty is currently impossible, we can work instead to raise this comfort level to something much closer to what citizenship brings, without asking for full citizenship. Cities such as New Haven have begun to do this. It never makes sense for the best to be the enemy of the good.

Here's more on the reference to New Haven:

New Haven opts to validate its illegal residents, csmonitor.com: At a time when a rising number of states and cities are cracking down on illegal immigrants, New Haven, Conn., is reaching out to them with a unique perk: an ID card.

Besides serving as identification for bank services and if police ask for ID, the card can be used at municipal locations such as libraries, beaches, and parks – and as a debit card for city parking meters and at 15 downtown shops.

Cities – and critics – ... are watching closely as New Haven prepares to hand out its first batch of cards July 24. The idea: integrate illegal immigrants into the community, protect them from crime that can happen because of a lack of documentation, and encourage them to be more willing to report crimes to police. Reaction to the first-of-a-kind program has been swift and sharp, illustrating the wide divide in US public opinion over the issue. ...

In New Haven, the main motivation for the ID cards was public safety, says Kica Matos, the city's community services administrator and a main initiator of the program. One reason the illegal immigrant community doesn't trust the police and doesn't come forward to report crimes is that police invariably ask to see ID. ...

The card isn't just for illegal immigrants, either, Matos says. It was designed to be useful for all residents, she adds, so it wouldn't be regarded as a "scarlet U" for "undocumented."

The city has fielded calls from governments and immigrant-rights groups in New York, San Francisco, and Washington State, she says. "There's a lot of buzz around the card, but they're waiting for us to get our program rolling."

Should Rawls be Banished?

John Rawls seems to be showing up in discussions quite a bit lately:

Liberals' misplaced love of John Rawls, by Linda Hirshman, TNR: The year 2006 marked the thirty-fifth anniversary of the publication of the Bible of twentieth-century liberalism, John Rawls's A Theory of Justice. ... In over 500 densely argued pages, Rawls claimed that politics had to be conceived in fundamentally moral terms." ...

Rawls's appeal is that he created a justification for the liberal state that did not require a lot of apparatus. No appeals to history, no metaphysics about how people differ from animals, no lists of virtuous political values to constrain the process. Just close your eyes, Rawls said, and think of what kind of political society you would make if you didn't know who you were. Black, white, male, female, smart, dumb--you might be anyone who would then have to live in the society you imagined. Rawls said if you did this, you'd produce unlimited free speech and moderately redistributive capitalism. ...

Perversely, Rawlsian liberalism also produced a slippery slope into its opposite, complete selfishness. After all, unless you could achieve the degree of selflessness he required, there was no other place to stop. John Gray, the wandering Brit of contemporary philosophy, correctly called Rawls's hegemony "the legal disestablishment of morality." The game that Rawls set in motion, designed to eliminate common preexisting political values, could also produce the result that everybody simply advocated for himself.

It is not a coincidence that the only successful two-term Democratic presidency of the Age of Rawls was engineered in part for Bill Clinton by Bill Galston, a political theorist with a background in classical thought. Although Galston pays due homage to Rawls, his crucial work is ends-driven, not justified on the blindness of the procedure... Rawls's work--the best effort to take a tradition grounded in the bourgeois revolutions of the seventeenth and eighteenth centuries--and make it relevant to a modern, industrial state simply left the country to the conservatives.

As intellectuals have struggled to get the basic Rawlsian framework to work in the real world, none have made the argument for the metaphysical assumptions that must be a part of their political prescriptions. Even now, liberal thinkers like Paul Starr and Michael Tomasky, who are trying to generate richer visions for liberalism, cannot completely free themselves from Rawls's legacy.

This failure is but the sorry hangover of the years of Rawls. Make a public, political argument for classical political virtues of courage, philanthropy, and temperance, and armies of philosophy professors and various amateurs emerge from the blogosphere to remind you that Aristotle's metaphysics supported slavery. What is then left? But such insistence on purity is a victory only for those for those who would rather the Right be President. It is time for the thinkers of the Democratic revival to leave the senior common room.

I don't know as much about Rawls as I should - it's not something I rely upon when I think about government intervention - so for a bit more on Rawls I'll turn it over to Brad DeLong. He wrote this in response to a recent op-ed by Greg Mankiw that mentions Rawls as a basis for redistribution, though I've cut the part that responds directly to Greg:

Let's Not Tell Hilzoy!, by Brad DeLong: ...Rawls does not think that the primary goal of public policy should be to redistribute resources to help those at the very bottom. Rawls thinks that the first goal of public policy is to maximize liberty for all. He thinks that the second goal of public policy is to make everybody better off. Redistribution plays third fiddle in Rawls's orchestra: it is a constraint on social wealth maximization--things that make people better off must be shared: choose that set of social and economic arrangements that makes everybody better off, but don't choose a set of social and economic arrangement that makes some people better off at the price of making the worst-off even worse off.

Here is what I think is the best way to think of this third point, of Rawls's "Difference Principle":

A group of people are sitting around the campfire, after a hard day's worth of work and pay in which what jobs people did and how hard they worked and how they were rewarded was determined by some complicated and not very transparent process.

Looking around, the person who is worst off says: "Hey! Wait a minute! This isn't fair. Everybody else is better off than I am."

And one of the others replies: "I'm sorry. You do get less than everybody else. But we set things up in the best way we could. Given the constraints imposed by human psychology and the natural world, we couldn't have set things up in any way so that you would have been better off."

"Oh. That's OK then."

According to Rawls, an arrangement that passes this test is "just" and "fair."

Now I don't think that Rawls has it correct: I don't think that socioeconomic arrangements that pass Rawls's test are necessarily just, and I don't think socioeconomic arrangements that are just necessarily pass Rawls's test. There are too many lexicographic orderings wandering around Rawls's setup for any economist to be happy with it...

George Borjas on Immigration and the Minimun Wage: "Am I the Only One Who Finds the Contradictory Inferences Disturbing?"

George Borjas is puzzled:

The Minimum Wage And Immigration: A Puzzle, by George Borjas: The federal minimum wage is rising today for the first time in a decade, from $5.15 to $5.85 an hour. And this reminds me of an important puzzle in labor economics that remains unresolved ... between the studies that examine the impact of a rising minimum wage on employment and those that examine the impact of immigration on wages.

Many studies in each of these literatures calculate correlations between wages and employment across cities or geographic regions. The minimum wage studies, for instance, relate changes in employment across states to changes in the minimum wage across states. The immigration studies relate changes in wages across regions to immigration-induced changes in supply. ...

The ... two sets of studies draw completely contradictory inferences from the data. On the one hand, the minimum wage literature often finds that a regression of employment on wages reveals a near-zero coefficient on the wage, and this is interpreted as saying that changes in the minimum wage have little effect on employment. On the other hand, the immigration literature often finds that a regression of wages on employment reveals a near-zero coefficient on employment, and this is interpreted as saying that immigration has little effect on the wage.

In the minimum wage literature, the inference is that the labor demand curve is almost vertical (or very inelastic), while in the immigration literature, the inference is that the labor demand curve is almost horizontal (or very elastic).

Let me rephrase the puzzle another way. If one were to believe the zero-effect result in the minimum wage literature, one would be forced to conclude that immigration must have huge adverse effects on the wage of native workers (at least in the short run). But if one were to believe the zero-effect result in the immigration literature, one would then have to conclude that minimum wage increases would have huge disemployment effects.

The only thing in common between the two sets of studies is that there is a zero correlation between wages and employment across geographic areas. What one puts on the left-hand side and the right-hand side of the regression model doesn't change this fundamental empirical fact.

Am I the only one who finds the contradictory inferences disturbing? It seems to me that at least one (and perhaps both) of the inferences economists draw from these cross-region correlations must be wrong.

links for 2007-07-24

Northern California before the Gold Rush

There were less posts than usual today. One reason is that I started reading this history of the town I grew up in, a small town in Northern California called Colusa, and it captured my attention. This probably interests me more than you since the places, names, etc. are all so familiar to me, but if you are interested, here's the chapter I just read.

If you know Northern California at all, Sutter's Mill where gold was discovered in 1848, Bodega, Sacramento, Yerba Buena, Chico, etc., this will be familiar to you too. It's an account by John Bidwell of his early experiences in California (this is in the 1840s just before the Gold Rush, he was one of the first to arrive in many areas of Northern California, there's a Bidwell Mansion in Chico adjacent to the CSU Chico campus). Toward the end, he describes an encounter with native Americans where he was the first white person they had ever seen, and his account also describes, among many other things, the harsh treatment the native Americans received from the new arrivals. The bear hunting lessons given in two places might be of interest, there's a woodsman who can't find his way home, and there's some economics here and there as well if you look for it:

Colusa County: Its History Traced from a State of nature through the Early Period of Settlement and Development to the Present Day with a Description of its Resources, Statistical Tables, etc., Biographical Sketches of Pioneers and Prominent Residents. Orland. 1891: Explorations of Colusa County, Chapter 3, Furnished by Gen. John Bidwell.

[General John Bidwell, of Chico, was one of the first to cross the plains from the Missouri River, making his journey to California between May 5 and November 5 1841. But as the first-known white explorer of Colusa County, his travels and experiences form necessarily an interesting chapter in the early periods of Colusa County. General Bidwell kindly consented to furnish us with his autobiography, of which we gladly availed ourselves, taking down his narrative as he dictated to us. As the autobiography is complete and somewhat lengthy, we are obliged to cull only those passages therefrom which pertain to Colusa County. The narrative as a whole is most interesting, in some places thrilling, and is told in such simplicity of style and attractiveness of manner that, feeling obliged to omit it, we do so with regret. Only a fear of marring the unities of our purpose to treat here solely of Colusa County caused us to forego the pleasure of giving his autobiography in its entirety.-Author.]

I may premise what I have to say further on concerning what is now Colusa County and as I saw it then in a state of nature, which no white man had ever entered except a few wandering trappers till I passed through it, by giving a brief outline of my earlier experiences in California. These may be necessary, in order not to lead up too abruptly to my little narrative concerning Colusa County.

After completing my journey across the plains, which occupied six months of the year 1841, I went to Sutter's ranch, near Sacramento, and entered the employ of Sutter, where I remained till the January following. There was at that time no fort yet built, only a station for a few ranchers, hunters, and fur traders. Sutter employed Indian hunters and trappers. They used carbines chiefly, though a few had rifles. The settlement, if it could then be so designated, was in an embryo state. No crops had been raised; grain had been sown, but, owing to an unprecedentedly dry season, it had failed to mature. There was no such thing as bread, so we had to eat beef, and occasionally game, such as elk. deer, antelope, wild geese, and ducks. Our Christmas dinner that year was entirely of ducks.

The country abounded in these, besides crane, beaver, and otter. The grizzly bear was an hourly sight. In the vicinity of streams it was not uncommon to see thirty or forty in a day. The same may be said of the Colusa region at that period. In this connection let me relate an incident.

Becoming tired of beef, James John, one of the first overland party, declared he would have some bear meat. An old Rocky Mountain hunter named Bill Burrows offered to go with him to get his bear meat. It was only a walk of one, two or three miles to find bear, so they started and soon came in sight of one, a monster in size, feeding in the tall grass not far from the river timber, on the west side of the Sacramento River, opposite to where Sacramento now stands. A man who knows anything about the grizzly is cautious. Old hunters always keep to the leeward of a bear, and so take advantage and take a dead shot, but raw hunters, till experience has taught them caution, are often careless, and so Jimmy John went to within fifty yards of the bear and fired, the old mountaineer screaming at him, "You fool! don't go there! Come back!" But Jimmy, as we used to call him, was one of those strange individuals you may see once in a life-time, who never seem to know what fear is. When the grizzly heard the shot, he broke into one of the dense thickets of grape-vine and willows along the river bank. Jimmy followed right along after the bear into the thicket, and was gone about fifteen minutes, when he came out greatly disappointed, because he had not succeeded in killing his game. He said he had bad luck because he got within six feet of the bear and fancied he was wounded, and when the animal opened his mouth, he wanted to make sure work of it by thrusting his muzzle into it, but the bear suddenly took to his heels and scampered off still deeper into the thicket.

The people I found at Sutter's belonged to various nationalities. Robert Livermore had charge of the stock, cattle and horses, of which Sutter had about two thousand head. This same Livermore had a farm in Livermore Valley (now in Alameda County), and gave his name to it. He was a runaway English sailor and had grown up in this country, was familiar with the customs of the people, and spoke the Spanish language fluently.

Without imputing dishonesty to the people - cattle and horses were so plentiful that the loss of one was scarcely noticed. Herds of them roamed at will; they got mixed up, and unlawful appropriation was not uncommon, and sometimes designedly. Livermore was, as I have said, a stockman, and there was quite a competition between him and a neighbor in the pride of owning the largest herd or securing the greatest number of hides. One day, so the story ran at the time, a friend of Livermore's hurried breathlessly, telling Livermore that his competing neighbor had just killed one of his, Livermore's, bullocks, and if he would be quick about it he would catch him in the act of skinning it. Livermore coolly replied, "No, I'm too busy just now skinning one of his bullocks myself."

It was just at that time that Sutter had come into possession of Russian property on the coast at Fort Ross and Bodega. He purchased all the property which the Russians could not remove on leaving the country. I allude to the Russian settlement which was a branch station of the Russian-American Fur Company, and of which the Czar of Russia was president. This company held a charter from Old Spain authorizing it to establish stations for the purpose of taking furs along the coast near Fort Ross. Their charter having nearly expired, they sold to Sutter nearly everything, including a schooner of twenty tons burthen, forty pieces of cannon, and a lot of old muskets, some or most of which were of those lost by Napoleon I. in his disastrous retreat from Moscow. There were also about two thousand head of cattle, five hundred head of horses, and a few old buildings.

I was now sent by Sutter to Bodega and Fort Ross. My first occupation in California was at these points, taking charge, in conjunction with Robert T. Ridley, who had preceded me there, of the Russian property still remaining, and removing the same as fast as practicable to Sutter's settlement, whither everything was eventually transferred.

In 1843 a company came by land from Oregon, composed partly of immigrants who had arrived in Oregon the year before, having crossed the plains via Fort Boise and Pitt River. They journeyed down the west bank of the Sacramento River into what is now Colusa County, crossing it below the mouth of Stony Creek. I met them shortly afterwards on the Feather River. This party had with them men, two at least, who might be styled "Indian killers," and on the way very frequently fired at Indians seen in the distance. The better portion tried to dissuade them from this uncalled-for conduct, with, however, only partial success. On arriving at the present site of Red Bluff, the company camped early in the day, intending to remain during the night, but broke up camp hastily, owing to the following incident: One of the "Indian killers," seeing an Indian on the opposite side of the river, swam over, carrying a butcher-knife in his mouth. The Indian allowed him to approach till he came very close, but at last ran away. The man with the knife pursued him, threw a stone, and, crippling the Indian, completed his barbarous work by killing him with his knife. The party in camp now fearing Indian retaliation, concluded to travel on. After a few miles an Indian was observed following them, no doubt out of curiosity and not because he had heard of the killing of a member of his tribe a few hours previously. One of the "Indian killers," seeing the opportunity for another murder, hid in the brush till the Indian came up, and shot him. The company continued to travel on the west side of the Sacramento River with more than ordinary haste, feeling very insecure lest the Indians, who were very numerous in the valley at that time, should exhibit hostility on account of what had occurred. One of the encampments, I remember, was near the river, below what is now called Stony Creek, then Capay River, in Colusa County. The Indians, however, came near in considerable numbers, and hence evidently had not heard of the shooting and kniving just mentioned. In the morning, as they were packing up to leave camp, one of the "Indian killers" missed his bridle and, swore the "damned Indians" had stolen it - a most unreasonable thing, since the Indians had no horses and never had. In his rage he fired at an Indian who stood by a tree about one hundred yards distant. The Indian fell back into the brush, while the rest of his frightened companions fled in great haste. The company was again rendered panicky by the blood-thirsty imprudence of the "Indian killer," hastened on their journey, and found the missing bridle in a few minutes under a pile of blankets.

All that day the Indians on the east side of the river manifested great excitement as the company moved along down on the west side. For more than forty miles there was at that time no place where water could be found for the horses to drink, the banks being so steep or so grown up with jungle and grape-vine as to be unapproachable. The day following, however, the company encamped on the spot where Colusa now stands. The excitement among the Indians had now preceded them, and consequently numbers of them swarmed on the opposite side of the river. When the horses were led down to get water, in an almost famished condition, the Indians fired at them with their arrows, but no one was hit or hurt. For some unaccountable reason, when the party arrived at Sutter's place a few days afterwards and reported what had transpired, Sutter came to the conclusion that the Indians who shot arrows across the river were hostile and ought to be punished. Let me say right here that the Indian village then on the site of Colusa was one of the largest in the valley, but there were many other villages in the vicinity on both sides of the river, both above and below the Colus village, and I believe I can truthfully say that the number of Indians within ten miles of this point numbered not less than fifteen or twenty thousand. They lived largely upon fish, mostly salmon, which they caught in great numbers in the river. For the purpose of fishing they had formed a fish-weir some miles above Colusa, by using willow poles, the ends of which had been rounded and sharpened by burning, and then in some manner being made to penetrate the sandy bottom to a depth sufficient to resist the force of the current, and by use of cross-sticks, lashed with grape-vines, the structure formed a bridge not less than eight or ten feet wide for them to pass and repass over it. At this point the river was very wide, the bottom very sandy, and the water not more perhaps than four or five feet deep.

The immigrants told their story at Sutter's place, and some here thought that the Indians where the shooting was done were hostile, but most of them, and the best informed as I thought, did not blame the Indians, in view of previous occurrences. Sutter, however, concluded to punish them, and went, with about fifty men, and attacked the Indian camp at daylight. His forces were divided, a part of them going above and crossing on the Indian bridge. They were ready to begin a simultaneous attack at daybreak. The Indians fled and mostly jumped into the river, where they were fired on, and great numbers of them killed, after which the Indians in that part of the valley were never known to exhibit any purpose of hostility. I do not believe there was sufficient reason to consider them hostile before. At any rate, I remember no offensive act on their part, having occasion to go among them almost a year afterward, twice at least, and once with only five men with me, when we camped all night near a village without any molestation. Two years later, in 1846, I went from Sacramento during the prevalence of a great flood, passing not up the river but over the plains, which were like a sea of waters, and arriving in a canoe near the place where the Indians were killed in 1843, to trade for Indian twine, with which to make seines for taking salmon. No white man was with me, only two Indians to paddle the canoe, and I found the natives perfectly friendly.

I might mention here another fact that might have had some relation to the present county of Colusa. A part of the before mentioned party from Oregon left the main body somewhere about the time, or a little before, it entered the Sacramento Valley, and reached Sutter's Fort some days in advance, and had seen nothing of similar occurrences which caused the campaign against the Indians just described. Among this advance party, in fact its leader, was one L. W. Hastings, a man of great ambition. He was from Ohio, and was afterwards a member of the first Constitutional Convention. His purpose in coming to California was to see the country and write a book to induce a large immigration here, declare the county independent, and of which he should become the first president. It did not take him long to learn that the Mexican Government was in the habit of granting large tracts of land. Not knowing how long it would require to establish here an independent republic, and having an eye to business, he at once took the preliminary steps, with a view of securing a large grant of land of ten or twelve square leagues lying on the west bank of the river between Colusa, and extending from the town towards what is now Knight's Landing. To that end Hastings employed me to make a map of his land, which was to be kept a profound secret. True to his purpose of bringing in immigrants, he made his way across California through Mexico and Texas to the Eastern States. On his way he conferred with Sam Houston, President of Texas, in regard to the aid and encouragement he expected from that source. He was not, however, in the least discouraged. He wrote a book, called the "Emigrant's Guide," of two or three hundred pages, describing, in most glowing terms, the country of California; but it so happened that the accomplishment of his purpose was largely interfered with, owing to the trouble which arose between Mexico and our government, simultaneously with its publication. The book, however, induced six or seven hundred to cross the plains in 1846. Hastings preceded them late in the previous fall to lay the foundations of his republic. Let me give a little incident in the career of this active, ambitious man.

After Hastings had written his book, it was some time before he could raise money with which to publish it. Among other efforts to procure funds he took to delivering temperance lectures in Ohio and adjoining States, and while on his tour became acquainted with a Methodist preacher named McDonald, who rendered him some aid, and thereby became friends. Late in the fall of 1846 Hastings having returned again to California after meeting his immigrants, he arrived at Yerba Buena, now San Francisco, in the midst of a cold rain. His friend, preacher McDonald whom he had never expected to see in California, had preceded him to the bay, and, for want of other employment, was actually attending the only bar in town. Hastings, the temperance lecturer, drenched in a chilling rain went up to this bar, called for some brandy, and poured out a glassful. As he was about to drink it, McDonald, the barkeeper, recognized him, and said, "Why, my temperance friend, how do you do?" Hastings, then recognizing the preacher who had helped him in Ohio, and reaching out his hand, said, "My dear old preacher, I'm glad to see you."

I might say that my first visit in 1843 to Colusa County and beyond was the result of a fortuitous circumstance. I had lost some animals at a place now known as Washington, opposite Sacramento, when I was returning from Bodega to Sutter's Fort. I spent much time in endeavoring to recover them. I had scoured the Sacramento Valley for them, but could hear nothing of them, but heard of something which led to their discovery, viz., that a company had started for Oregon.

I was advised to overtake it. The leaving of a company for Oregon was an event, as I was advised, of sufficient importance to make people look out carefully for their horses. Sutter furnished an Indian to go with me. The company had been gone over a week. Peter Lassen, whose name now attaches to Lassen Peak and Lassen County, happened to be at this time at Sutter's Fort in search of a place to locate a ranch. He joined me to come up the valley for that purpose. At Hock Farm, on Feather River, forty miles from the fort, we took fresh horses, traveling as rapidly as possible. At a place now called Nicholas, on Feather River, a German named Joe Bruheim also joined us. We were on no trail, but simply pushed through the center of the valley. Approaching Butte Creek, we camped for the first time since leaving Hock Farm. Here we had an episode with grizzly bears, which will afford some idea of that region in its natural state.

In the spring of the year the bear's chiefly lived on clover, which grew luxuriantly on the plains, especially in the little depressions on the plains. We first saw one, which made for the timber two or three miles away; soon another, then more, all bounding away to the creek. At one time there were sixteen in the drove. Of course we chased, but had no desire to overtake them; there were too many of them. As we advanced, one, the largest of them all, diverged to the left. I pursued him alone. He was the largest bear I have ever seen; his hair was long and shaggy, and I had the keenest desire to shoot him. I rode almost up to him, but every time I raised the gun to shoot, the horse would commence bucking. My desire to fire into him became so great that it overcame my prudence. I charged as near as I dared and dismounted, intending to give him a shot and mount again before he would get me, but the moment I alighted on the ground, it was all I could do to hold the horse, who jumped and plunged and sawed my hands with the rope. When I could look toward the bear, I found that he had stopped, reared on his hind legs, and was looking toward me and the horse. My hair, I think, stood straight up, and I was delighted when the bear turned and ran. The Indian with us killed a large one, and skinned him, leaving all the fat on him, but the fat was always useful to us in frying our bread, taking the place of lard. Horses and mules are always frightened at bears or with the smell of bears. It was difficult to control the horses; they snorted and tried to get away all night. The next morning I took another lesson in the pastime of chasing a bear, a very large and very swift one. When you chase a bear, you must run by his side and not immediately behind, for if he turns he can catch you more easily if you are directly behind than if you are at his side. I was chasing directly behind, and before I could turn, the bear turned, and was so close that his claws struck my horse's tail. Coming to better ground, I widened the distance between us. As soon as he began turning from me, I made after him, when I heard him plunge into the stream and swim across it. Stationing myself where I could see him when he got across, I waited and saw him as he gained the bank, standing on his hind legs. I shot, and the blood flew out of his nostrils two or three feet high, when he bounded off a hundred yards and fell dead. These scenes were a common occurrence, in fact, almost of hourly occurrence.

Hastening up the valley, we at last struck the trail of the Oregon company, on what is now known as the Rancho Chico, and to me the loveliest of places. The plains were dotted with scattering groves of spreading oak while the clover and wild grasses, three or four feet high, were most luxuriant. The fertility of the soil was beyond question. The water of Chico Creek was cold, clear, and sparkling; the mountains, flower-covered and lovely. In my chase for stolen horses I had come across a country that was to me a revelation. And as I proceeded up the valley, through what was later Colusa County, and beyond it, I was struck with wonder and delight at this almost interminable land of promise.

This was early in March, 1843. It is not easy now to conceive the changed condition of this county caused by the extensive pasturage of horses, cattle, and sheep since I first gazed upon it. We were seldom or never out of sight of game,--deer, elk, antelope, and grizzly bears, - while the snow-capped mountains on either side of the valley, seen through the clear atmosphere of spring, with the plains brilliant with flowers and luxuriant herbage, combined to lend both romance and enchantment to one's surroundings. We were now on the trail of the Oregon company, which lay on the east side of the Sacramento River. The streams flowing into it, with the exception of Butte Creek, had not at that time been named, so I had the rare good-fortune to name them. Seeing some Sabine pine on the stream where we camped, it was dubbed Pine Creek. The next stream we came to was beautiful and clear, and flowed swiftly from the mountains with considerable force. On its banks appeared numerous deer, seemingly in droves, and so we named it Deer Creek. The next flowing stream, ten or twelve miles, having a greater fall where we crossed it, suggested its value as a water-power, and hence received the appellation of Mill Creek. Further on, the next stream of living water presented to our view not only its well-timbered borders but expanses of fertile and grassy plains, over which roamed innumerable herds of antelope, and hence it was named for that magnificent wild creature.

Crossing Antelope Creek, and following on the trail of the Oregon party, we came to the Sacramento River opposite the present site of Red Bluff. Here we found the company had crossed the river and were encamped on the opposite bank. As they had no wagons, they had swum their animals across, a feat of no little difficulty, for the river here was deep and swollen, swift and very cold. With simply a small hatchet, scarcely larger than a tomahawk, I set about making a raft to cross on, which was no easy task to construct out of dry willow, brush, and such dead sticks as we could secure. At last it was completed, being barely sufficient to bear me above the water.

However, to insure a dry passage, a second story was built on it, consisting of dry brush tied securely, resembling in size a small load of hay. Fearing I could not manage it alone, I persuaded a wild Indian to get on it with me. He consented with great reluctance, but a few beads and a cotton handkerchief were so tempting as to be irresistible. The only thing I had to propel the raft with was a couple of willow poles, and none proving long enough to reach the bottom when we got into the middle of the river, we had to use them as paddles. We were high and dry when we started, but the displacement of the water by the brush was so little and the material became so quickly waterlogged that the frail raft was soon under water. The swift current carried us so swiftly down that it was with great difficulty we got over at all, but we finally made the other side, nearly two miles below. Most of the time we had been up to our arms in cold water, and only knew by the brush under us that we were on the raft at all. If ever men labored for their lives, we did. Safely on land, I soon found my way to the Oregon camp, leaving Peter Lassen and the others of my party on the opposite side of the river. In the Oregon camp I found several who had crossed the plains with me in 1841, notably Ben Kelsey, Andrew Kelsey and Dawson, generally called Bear Dawson, from a circumstance in the Rocky Mountains. I at once made known the object of my visit - to find my mule and horse. These men at once declared that if these animals were there and I could identify them, I should have them, but nearly all protested there were no such animals there. It was now agreed that all their horses and mules should be driven up for my inspection. As a result, I soon discovered my animals, and demanded their surrender. There was some opposition to this but Ben Kelsey, a very resolute man, and on this occasion a very useful friend, declared stoutly that I should have them. All opposition being now withdrawn, the animals were driven to the river and made to swim across. And now having accomplished my object, we at once set out on our return journey.

I have already mentioned Peter Lassen as being of our party. Peter was a singular man, very industrious, very ingenious, and very fond of pioneering - in fact, of the latter stubbornly so. He had great confidence in his own power as a woodsman, but, strangely enough, he always got lost. As we passed Butte Mountain going south, our route of course lay between the Sacramento and Feather Rivers. The point we wished to reach that night was Sutter's Hock Farm, on Feather River. Night had overtaken us when some fifteen miles from it. Peter Lassen insisted on keeping the lead. Our Indian vaquero, however, who knew the country well in that vicinity, pointed to the eastward as the way we should go. Lassen, however, could not be persuaded to diverge to the east, and finally at midnight we concluded to tell him he must go to the east or we would leave him. But this had no effect on Lassen; he kept on to the south, while we, following the Indian, came to the farm. The only place Lassen could reach was the intervening tule marsh. Now if you have any curiosity to observe a man's humor after being in a tule swamp full of mosquitoes all night, you ought to have seen Peter Lassen. The next morning, when he came to camp at Hock Farm, he was so mad he would not speak to any of us; would not travel in the same path, but kept a hundred yards to either side of us all day. I think he never forgot nor forgave us. Still he was a man possessed of many good qualities. He was always obliging in camp. He was a good cook and would do any and everything necessary to the comfort of the camp, even to the making of coffee, provided those traveling with him would pretend to assist. If they did not offer to aid him, they became the target for the best style of grumbling that any man born in Denmark was capable of inventing. Of course, everyone would offer to assist him, and that is all one had to do, for then Lassen was sure to drive him away, and do everything himself, even to staking the tent. On our return from the trip, I sketched, as best I could, the country visited, laying down and naming the streams as I have already stated.

My second trip, which was somewhat in the nature of an exploration, through Colusa County and around it, was made in the summer of 1844. his is how it came about. Thomas O. Larkin was a prominent American at that time in California, to which he came as early as 1832. He was consul and navy agent of the United States Government, and a patriot in every sense. He resided in Monterey, and had a large store there, perhaps the largest in California at that period. His wife was the only American woman at that time in California, except Mrs. Kelsey, who came in our party across the plains. Larkin's children were also American born, and he wished to obtain for them from the Mexican Government a grant of land of ten or twelve square leagues. For this purpose I engaged to find him a suitable tract, and began my explorations about the first of July, 1844. I ascended the valley on the west side of the Sacramento River as far as the present town of Colusa, having with me only one man, and he an Indian, who had been civilized at the Mission San Francisco de Solano, in Sonoma Valley. My first encampment hereabouts was on a slough some miles west of Colusa. Before reaching camp I had killed a large grizzly bear, and carried with me the only part fit to eat - the foot. The next day we went directly west across a large plain. It was a hot, terrifically hot day, and we found no water in our march, except toward night, and this was so salty that neither ourselves nor our animals could drink it, so we were obliged to sleep without water. [This evidently was the salt lake on Peter Peterson's farm, near the present town of Sites, where J. P. Rathbun is now manufacturing salt.-Author.] We observed many deserted Indian villages, which had been abandoned because the springs had dried up. I should here mention the fact that the summer of 1844 was an exceptionally dry one, because the previous winter had been almost rainless. We were in the saddle by daylight, making our way toward the high mountains that lay to the southwest, feeling sure of finding water there. About ten or eleven o'clock in the morning, from the top of a ridge we beheld the grateful sight of a large, clear, flowing stream. We reached it as soon as possible, and our nearly famished horses were soon plunged into the middle of it. At the same time we observed large numbers of Indians, men, women, and children, in a state of flight, running and screaming. Unsaddling our horses under a widespreading oak, they began eating the wild oats which grew in abundance around them, and were here obliged to give them rest. In less than an hour the Indians whom we had seen fleeing from us, that is, the men, were discovered coming toward us from many directions. The Indian who accompanied me became greatly alarmed. I had a gun with me, but he had none. By certain signs we gave them to understand that they must not approach us, but still large numbers came closer and very near. We saddled our horses, jaded as they were, so as to be ready if obliged to retreat. Four or five of the Indians, chiefs or head men, I have no doubt, came nearer than the others. We tried to converse in Spanish, but they understood not a word of it. My Indian, who came originally from the country between Sonoma and Clear Lake, was able to understand a few words spoken by a very old Indian. They asked what I came for. They said they had never seen a white man before. Here I felt obliged to show them what I could do, by exhibiting to them what I had done, so I pointed to the bear's foot which I had with me, and told them I wanted to kill grizzly bears - the grizzly being regarded by the valley Indians, and I thought by those of the Coast Range, with superstitious awe. They regarded these animals as people, but very bad people, and I have known Indians to claim that some of their old men could go out in the night and talk with the bears. I told them I did not want to kill Indians, because I considered them good people, but bears I regarded as very bad people.

Under the circumstances I concluded it prudent to mount our horses and go on, we following the beautiful stream down, that is to say almost due north, knowing that it must find its way into the Sacramento Valley. To our surprise, the number of Indians increased to many hundreds. In half a day we passed seventeen large villages. They had evidently come from their permanent villages and made their temporary homes by this fresh, flowing stream. These Indians certainly proved anything but hostile; they were evidently in great awe of us, but showed no signs of displeasure. There were hundreds before and behind us, and villages were made aware of our coming before we reached them. I generally found the ground carpeted with branches and made ready for me as a place to stop at and be interviewed. The women would here run in great haste and bring baskets of all kinds of provisions, apparently to pacify me, supposing, perhaps, that I was hungry and had come to lay in a supply of food. In fact, their consideration for me was so great that I found myself barricaded with baskets full of acorn bread, grasshoppers, various kinds of seeds, etc. Among them I observed a kind of meal made by pounding the cone or berries of the juniper, which made a sort of yellowish flour, very good, and in taste somewhat resembling gingerbread. The Indian name for it I remember was mun.

The sun was beginning to go down, and we were still traveling in the midst of a vast multitude of Indians, every village sending out large deputations and swelling their numbers. The old Indian before mentioned I took care to keep near me, so that through him I might communicate with the others. I should have mentioned before that at our first talk with these aborigines, I had tried to present the chiefs with a few beads and a fancy cotton handkerchief, articles always carried as peace offerings or tokens of friendship among the Indians, and much prized by them. Seeing a conical hill, I determined to make it my camp for the night [General Bidwell here describes the high hill just east of the present town of Elk Creek - Author.]. I now told the old Indian that I was going there to sleep, and that his people must all go to their villages and not come near me during the night, as it would make me very angry if they approached me after dark. Careful to obey this injunction, the Indians scattered to their villages and were soon all out of sight.

We then barricaded the top of the hill as best we could, by piling rocks around, and then tied the horses near us. My Indian companion lay awake half the night and I the other half in keeping guard, but not an Indian approached us, for we had a full view in every direction from the position of our camp. Soon after daybreak the mountains seemed fairly alive with Indians. Thinking it best to continue my journey down stream, I passed by, as before, many large villages, and at noon came to the largest of all, and it was a permanent one. [This was undoubtedly on what is now I. W. Brownell's farm, where evidence remains of a large Indian village, with sweat-house and burying-ground.-Author.] Here the Indians had built a large dance-house in the usual Indian fashion, using long poles for rafters, it being nearly circular in form, and were finishing it by covering it with earth in the usual way. Here, for the first and only time in my life, I saw that the Indians had procured poles for the rafters of the house by cutting down cottonwood and willow trees with stone axes, leaving the stumps a mass of bruised, fibrous material, resembling a well-worn broom. They appeared to be bruised down rather than cut. This was on the fourth day of July, 1844. It seemed to be a gala day with the Indians, or else they made it so for my especial benefit. Male and female were attired in their gayest costumes, consisting chiefly of ornaments, such as feathers, beads, and shells, and, to cap the climax, to round up the day's festivities they got up the gayest and largest dance, accompanied by not unmusical chants, I ever saw or heard. I still continued to carry with me the bear's foot, thinking it best through it to make my new acquaintances believe that my errand among them was to kill bears. They asked me what I killed them with, and I told them with my gun; then they wanted me to shoot, but this I declined to do, not wishing to frighten them. The stream I have just mentioned proved to be what is now Stony Creek. Its Indian name was Capay, and by this name it went till Peter Lassen and Wm. C. Moon made grind-stones on one of its branches, after which it took its name. Lassen and Moon and an Indian fighter named Merritt made their grind-stones late in 1845, and, taking them in a canoe, disposed of them at Sutter's and in San Francisco. They were the first manufactured article turned out of what is now Colusa County. On July 5 , or the next day after the big Indian dance I have just spoken of, I reached the Sacramento River, and met Edward A. Farwell, with two canoes. He was coming up to begin the occupancy of a grant located on the east side of the river and south of Chico Creek. Thomas Fallon was also with him. Finding no considerable extent of level land in the mountains, I mapped out the Larkin grant on the Sacramento River above Colusa. This was on July 6, 1844. On my return to Sutter's Fort, and on my describing the country I had seen and the streams in the Coast Range Mountains, some trappers thought it would be a country to catch beaver in. A man by the name of Jack Myers raised a company of twenty or more men and went to trap. The first thing they did, however, was to become alarmed at the great bodies of Indians, and, regarding them as hostile, they, without proper cause, made war upon the natives, killing a great many of them. I asked them why they shot down the Indians who had been so friendly with me. They said they made a great noise, wore white feathers in their head-dress, or caps, and these they considered evidences of hostile preparations. Jack Myers said. "When you see an Indian wearing a white feather, shoot him!" I told him that they ran and screamed and wore white feathers when I was there, but none of them showed any signs of evil intent. I was sorry they felt obliged to kill them. The party caught some beaver, but not many, because of the Indians. I should have mentioned that before the party started to trap for beaver, I made another trip to Colusa County, going up on the east and returning on the west side of the river. I had five or six white men with me, and during that time we explored to some extent the north or west fork of Stony Creek, and saw some Indians, but found them friendly. I recall now the names of a few of these tribes, but there were many times more of them which I have forgotten. I remember the Willy, Colus, Copte, Duc Duc, Chary, and Sohole, while as to the number of Indians in Colusa County at that time, 1844, there could not have been less than ten thousand.

Peter Lassen started in the fall of 1843 to take possession of his ranch on Deer Creek, which was the first place mapped out and settled upon north of Sutter's Fort, but did not reach his future abode till January or February, 1844, the heavy rains detaining him at Butte Mountains, or Marysville Buttes, as they are generally called now. Nearly all the large grants of land made by the Mexican Government were conferred in that year, and it was also in 1844 that nearly all the settlements thereunder were either begun or were contemplated, but there were many interruptions and obstacles in those days, the chief of which was the insurrection which resulted in the expulsion of the Mexican Governor, Manuel Micheltorena, in February, 1845. The Larkin's children's grant, which I had selected, was first located on by John S. Williams, who was employed by Larkin for that purpose, and was stocked with cattle and horses. I met him there in 1847. He remained there nearly two years, and left some time in 1848, C. B. Sterling taking his place. In these days of early land concessions and settlement, I remember most of those Americans who were prominent by their activity in endeavoring to make homes. Bryant, whose Christian name has escaped my memory, was the first settler in Colusa County, and was located at the mouth of Stony Creek; John S. Williams was the second, and lived on what is now the John Boggs ranch. Chas. B. Sterling, who took Williams' place in managing the Larkin grant, was the next, and Frank Sears and Granville P. Swift followed, they locating on Stony Creek, on the south side, in, I think, the year 1847. Swift and Sears held no grant from the Mexican Government, but they grew prosperous by taking a number of the Stony Creek Indians over to the Feather River mines and working them very cheap. John S. Williams, whom I have several times mentioned, built the first house in Colusa County. This was in 1846, and was built for Thomas O. Larkin on his children's grant. What is now the town site of Colusa and a good deal more land once belonged to me, for in 1845 I received a grant of two square leagues, which included that present thriving place.

"Maybe the People Who Think There's a Conspiracy Out There are Right"

Haven't seen much about this, so thought I'd note it here. This is an editorial from the local paper about the Bush administration's refusal to allow Homeland Security Committee member Congressman Peter DeFazio to examine plans for government action following a terrorist attack or natural disaster:

Access denied, Editorial, Register-Guard: If the Bush administration wanted to fuel conspiracy theories about its classified plan for maintaining governmental control in the wake of an apocalyptic terror attack, it could not have come up with a better strategy than refusing to let Congressman Peter DeFazio examine it.

The Oregon Democrat recently requested permission to enter a secure "bubbleroom" in the Capitol and examine the secret White House plan. As a member of the Homeland Security Committee, DeFazio has the requisite security clearance - and a compelling rationale for reviewing the documents.

Last Wednesday, DeFazio received word that his request had been denied. Through Homeland Security Committee staffers, he learned the White House had initially granted his request, but that it later was rejected. There was no explanation of why - and no word about who made the final decision.

Bush administration spokesman Trey Bohn refused to shed any light. "It is important to keep in mind that much of the information related to the continuity of government is highly sensitive," he said.

Ummm, yes. That's why there are established procedures to make certain that only those members of Congress with the proper security clearance see classified documents. DeFazio has such clearance and has used it numerous times to gain access to sensitive materials. Until Wednesday, he had never been denied permission.

It's difficult to think of any reasonable explanation why any member of Congress should not be able to review this plan. As a member of the Homeland Security Committee, DeFazio's case for access is simply beyond any doubt.

The plan is intended to maintain governmental control in the wake of terrorist attacks, or an overwhelming natural disaster, in the United States. It reportedly envisions 15 crisis scenarios, and shifts doomsday planning for the first time from the Federal Emergency Management Agency to officials inside the White House.

Not surprisingly, the plan has generated plenty of buzz among both legal scholars and conspiracy-minded bloggers on the Internet. Given the Bush administration's penchant for secrecy and history of favoring the steady expansion of presidential powers, some have suggested the policy may be written in such a manner that makes it too easy to invoke presidential powers such as martial law.

By denying DeFazio's reasonable request to view these documents, the White House has done much to encourage and nothing to quell such speculation. The administration would be wise to reverse its decision and allow DeFazio, or any other member of Congress with the required clearance, full and immediate access.

If the White House doesn't do so, the American public is left with this unsettling thought from Congressman DeFazio: "Maybe the people who think there's a conspiracy out there are right."

Caroline Baum: 'Imported' Inflation?

Caroline Baum on the source of inflation:

'Imported' Inflation? Try 'Made in the U.S.A.', by Caroline Baum, Bloomberg.com: For years globalization was touted ... in terms of the low prices it delivered to consumers. It was unqualified bad news only if you happened to be the fellow who made the goods now being produced in China.

Now the tide has turned. After more than a decade of 'exporting' deflation, ... the ... price of Chinese imports to the U.S. has risen in the last few months, triggering predictable reactions based on faulty assumptions.

Specifically the question is, can one country import inflation from another? In the case of China and the U.S., it depends on whether one is flying from east to west or west to east. China pegs its currency to the U.S. dollar. ... If the U.S. inflates, China inflates, not the other way around. ...

The broader issue is whether a sovereign nation with an independent central bank can import inflation -- or deflation -- from overseas. ...

Forget about borders and exchange rates for a moment and think about individual prices in the domestic economy. Let's say the price of oil goes up because demand increases. Is that inflationary?

Former Federal Reserve Chairman Alan Greenspan used to explain to Congress that relative price changes are not inflationary per se. ... For a given stock of money, a rise in the price of oil may translate into a one-time rise in the price level. With time, the price of something else will fall as consumers cut back on non-oil purchases.

The same is true for the price of imports. If consumers have to pay more for items made in China, they will have less money to spend on domestic goods and services and other foreign imports --unless the central bank accommodates those higher prices by allowing the money supply to increase.

So it is always and everywhere the province of the central bank to determine its domestic inflation rate. ... As long as globalization doesn't mean one world central bank -- Trilateral Commission and Bilderberg Group conspiracy theorists, restrain yourselves -- 'flexible exchange rates give countries the independence to set their own inflation goals,' Glassman says. 'That insulates everyone else from what you choose to do.'

And as for price shocks, the central bank has the ability to offset them, whether they occur at home or abroad. Inflation isn't transmitted via spores in the air. It's a monetary phenomenon, and as such, starts and ends on native shores. Globalization hasn't made central banks impotent. ...

Let me add a bit to the last paragraph. Inflation is caused by money growth and in the long-run inflation and money growth move together, but there can also be episodes of inflation in the short-run as relative prices adjust to oil price or other shocks. However, whether or not the movement of prices from one level to another in response to shocks should be called inflation is a matter of definition, some monetary economists reserve the term inflation for a continual run-up in the price level, not a one-time change to a new level, but whatever such movements in prices are called there's still a role for central banks to play in response to shocks that cause short-run movements in the price level.

Paul Krugman: The French Connections

Paul Krugman discusses how lack of competition among providers of high-speed internet service has caused the U.S. to fall behind other countries:

The French Connections, by Paul Krugman, Commentary, NY Times: There was a time when everyone thought that the Europeans and the Japanese were better at business than we were. In the early 1990s airport bookstores were full of volumes ... promising to teach you the secrets of Japanese business success. Lester Thurow’s 1992 book, “Head to Head: The Coming Economic Battle Among Japan, Europe and America,” which spent more than six months on the Times best-seller list, predicted that Europe would win.

Then it all changed, and American despondency turned into triumphalism. Partly this was because the Clinton boom contrasted so sharply with Europe’s slow growth and Japan’s decade-long slump. Above all, however, our new confidence reflected the rise of the Internet. ...[M]ost of Europe except Scandinavia lagged far behind the U.S. when it came to getting online.

What most Americans probably don’t know is that ... as dial-up has given way to ... high-speed links — it’s the United States that has fallen behind.

The numbers are startling. As recently as 2001, the percentage of the population with high-speed access in Japan and Germany was only half that in the United States. In France it was less than a quarter. By the end of 2006, however, all three countries had more broadband subscribers per 100 people than we did.

Even more striking is the fact that our “high speed” connections are painfully slow by other countries’ standards. ... Oh, and access is much cheaper...

What happened to America’s Internet lead? Bad policy. Specifically, the United States ... forgot — or was persuaded by special interests to ignore — ...that sometimes you can’t have effective market competition without effective regulation.

You see, ... to get [to the internet] you need to go through a narrow passageway, down your phone line or down your TV cable. And if the companies controlling these passageways can behave like the robber barons of yore, levying whatever tolls they like on those who pass by, commerce suffers.

America’s Internet flourished in the dial-up era because federal regulators ... forced local phone companies to act as common carriers, allowing competing service providers to use their lines. Clinton administration officials ... tried to ensure that this open competition would continue — but the telecommunications giants sabotaged their efforts, while The Wall Street Journal’s editorial page ridiculed them as people with the minds of French bureaucrats.

And when the Bush administration put Michael Powell in charge of the F.C.C., the digital robber barons were basically set free to do whatever they liked. As a result, there’s little competition in U.S. broadband — if you’re lucky, you have a choice between ... the local cable monopoly and the local phone monopoly. The price is high and the service is poor, but there’s nowhere else to go.

Meanwhile, as ... Business Week explains, the real French bureaucrats used judicious regulation to promote competition. As a result, French consumers get to choose from a variety of service providers who offer reasonably priced Internet access that’s much faster than anything I can get, and comes with free voice calls, TV and Wi-Fi.

It’s too early to say how much harm the broadband lag will do to the U.S. economy as a whole. But it’s interesting to learn that health care isn’t the only area in which the French, who can take a pragmatic approach because they aren’t prisoners of free-market ideology, simply do things better.

_________________________
Previous (7/20) column: Paul Krugman: All the President’s Enablers
Next (7/27) column: Paul Krugman: The Sum of Some Fears

Update: Paul Krugman emails:

I wrote a piece on this, "Digital Robber Barons?", back in 2002 - unfortunately, it looks my worries were justified. Also, Matthew Yglesias had a piece 2 years ago (which I somehow missed).

The broadband penetration statistics are at http://www.oecd.org/document/7/0,3343,en
_2649_34223_38446855_1_1_1_1,00.html

Connection speeds are at http://www.websiteoptimization.com/bw/0705/

 And he adds his personal experience:

When Robin and I moved into our current house, which is in Princeton Township a few minutes' drive from the university, we had NO broadband available. We actually got a satellite dish - which provided lousy access, but better than dialup. Eventually Verizon offered DSL - pretty slow DSL. And last year Patriot Media, our cable monopoly, finally came up with its own offering. But that's it.