The Great Deformation -- Introduction to the "Good Money" debate

In my previous essay I introduced his book and talked some about what he was saying. As I noted a lot of what he says is on the money, though not completely for the reasons he says. Where he is right is when he as he says "zeros in on the skunk in the woodpile" (page xv) of AIG. It's a theme in his book. Time and time again the Federal Reserve, it's shill economists and the corrupt Security Exchange Commission (SEC) used the excuse of "protecting" the economy to bail out fat cats and protect their cronies on Wall Street -- at the expense of the economy and main street. But the common reality is that our modern Wall Street ran a multilayer and ongoing con on the American people. He traces it back to Roosevelt, which is not surprising considering he despises Keynes, despises Democrats and despises Roosevelt. But I'd trace it all the way back to Alexander Hamilton and the founding generation, and specifically what happened when Alexander Hamilton was removed from the scene and lesser lights took over his project. If I can I'll talk about some of the same subject but call it "Hamilton's Revenge" and discuss the subject from a very different POV. His shibboleth of "Good Money" is actually part of the problem. And the alternatives he seems to feel would save the economy are so unrealistic and crazy that they are the reason that the cons felt they had to run cons and fool people instead of come up with an economic approach that was fair to everyone.

In his opening paragraphs he despises Paulson's "150 billion one-time tax rebate", Noting:

"President Reagan's great accomplishment had been the burial of the Keynesian predicate: the notion that Washington could create economic growth and wealth by borrowing money and passing it out to consumers so they would buy more shoes and soda pop."

Which of course is a misrepresentation of what Keynes actually said. (Though he fleshes out that even Reagan hadn't buried that notion at all later in the book). He then proceeds to blame Obama's 800 billion stimulus for the red ink that in later chapters he will note had already been spilled by George Walker Bush. But I can forgive him for this. He's talking about his "road to Damascus" moment in realizing that the whole country was being swindled and conned by his colleagues on Wall Street -- which after all is where he worked as a private equity investor.

Then he lays out his "revisionist history of our era" blaming the whole thing, of course, on FDR and making a Neo-Liberal/Austrian case for the why's and wherefores of the mess:

"At the heart of the Great Deformation is a rogue central bank that has abandoned every vestige of sound money. In so doing it has enabled politicians to enjoy 'deficits without tears' by monetizing massive amounts of the public debt.

But I don't see this bait and switch reality as a switch that rewards politicians or common folks. It rewards Wall Street executives and a few mega-rich folks at the expense of a short term pile of debt that will eventually crash. Yes AIG was running a corrupt derivatives operation, but the "politicians" bailed out the monied class not the ordinary people. Yes, we did away with sound money, but we did away with "sound money" because it created centuries of deflation and depression for ordinary people and really didn't do that much for the rich except putting an artificial and weak check on banks, bankers and their ability to print money for free and lend it at interest. If "Sound money" had been such a great concept it wouldn't have been permanently abandoned. And if "Eisenhower in the White House" and "William McChesney Martin at the Fed" brought back "sound money and Fiscal Rectitude" it was by investing in good capital investments by creating our interstate highway system and not breaking much. Yes, defaulting on the "Bretton Woods gold standard" ... "was the starting point for the present era of floating money" and "massive debt creation" but Stockman, sociopath that he is, is blithely uncaring about the consequences of the alternatives. He describes a world of policy where Low wages and long hours are what the rest of us 99% should expect and only his class of wealthy investors and silver spoon legacy babies matter in deciding economic affairs. What he inadvertently is describing in his book is an investor/political class that shamelessly looks out for the top tiers of the investor/political class -- and doesn't give a snit about who gets hurt by their fights as long as they are paid in Gold. I would even agree that the collapse of fixed exchanges and the fake Gold standard of the Bretton Woods system was not an optimal situation. But his notion that a fixed rate alternative and the Gold Standard was a viable alternative is unrealistic.

The IMF notes about Bretton Woods:

"During the 1930s states had experienced a series of connected problems: shortage of gold, exchange rate instabilities, the movement of "hot" money in and out of their realms, and the lack of a mechanism to adjust balance of payments problems. The IMF was designed to deal with these difficulties by putting in place an international monetary system that contained a stable exchange rates regime with some scope for revaluation ("pegged but adjustable"), provided for the convertibility of currency, provided a mechanism for overcoming short-term liquidity crises and an organizational actor for managing the system (J. Williamson, The Failure of World Monetary Reform, New York, 1977, pp. 2-28). The World Bank was designed to help the economic and industrial reconstruction of Europe and to help developing countries achieve industrialization. The purpose of the ITO was to propel states down the path of free trade, to stop them from defecting to protectionism as a way of responding to balance of payments problems (e.g. by imposing import quotas as an alternative to devaluing their currency). The ITO never emerged, because of US concerns. Instead, a weaker agreement known as the General Agreement on Tariffs and Trade took its place. In this grand plan for international institutions in the postwar era tax, as an object of regulation, was absent. Keynes' letters and reports around the time of Bretton Woods do not discuss the coordination of tax policy between states. Tax policy, the implication seems to be, would be retained by the nation-state."

Bretton Woods in other words was Keynes creation. He apparently believed in "Good money" too. Stockman talks about his subjects in isolation as if our trade deficits had nothing to do with the breakdown of Bretton Woods and as if we could have stayed on the Gold standard without some coordination of tax policy between nations and without dislocations at home. Stockman does talk about those things but he doesn't seem to make the connection to why Nixon wasn't "perfidious" because he ended the gold standard (he was for other reasons) and couldn't maintain a gold standard or why FDR had to do what he did with our Gold Supply. [More later] The IMF article quoted goes on:

"It is an exaggeration to say that the whole Bretton Woods system broke down. What did break down was the rules of cooperation for the convertibility of the dollar into gold and the exchange rates regime. After the war, the US dollar became the international reserve currency. The US also went from being in surplus to running trade deficits. States at first wanted US dollars to meet their trade obligations. They were also happy to let the US run deficits since this provided liquidity in the international monetary system. This situation led, however, to a crisis first anticipated by the economist Triffin in 1960 (R. Triffin, Gold and the Dollar Crisis, New Haven CT, 1960). The problem was that if the US attempted to correct its balance of payments deficit it would cause a liquidity crisis. If it allowed its deficit to continue, other states would lose confidence in the dollar as a reserve currency and seek to convert their dollars into gold. US deficits continued to increase, partly because the US had to pay for its war in Vietnam. Confidence in the dollar started to slide. States began to seek, as the gold standard allowed them to, the conversion of their dollars into gold. The US reacted by announcing in August 1971 that it was going to abandon the convertibility of the dollar."[https://www.globalpolicy.org/component/content/article/209/42675.html]

Now Stockman does explain the string of bad policies that led to Nixon being forced to abandon Bretton Woods. And Nixon comes out smelling like Nixon always comes out smelling (machiavellian & ruthless). But Stockman's narrative doesn't hold up to even a cursory examination. Yes, the trainwreck that is our current deficit and the 2008 collapse was a long time coming. No it had nothing to do with the Gold Standard. Yes, it had everything to do with the class of vulture privateers that Stockman exemplifies, and the politicians they pay off and bribe. Pirates always want to be paid in Gold.

"The Great Deformation: The Corruption of Capitalism in America Hardcover – April 2, 2013 by David A. Stockman (Author)"

http://ecx.images-amazon.com/images/I/51QAdjH7ypL.jpg

Winter is coming

Winter is coming.

The grass is still green,

but all the summer life has seeded

and is putting itself into a deep deep sleep,

Husbanding energy for the dark days ahead.

 

Sleep so deep,

that one would think life is dead.

The birds have fled

Down to the south

where it will be warm far from here.

And the sun will keep it's presence high above

While the dark creeps longer into morning and evening

and shadows arise.

 

Meanwhile we are here in the north

where the sun shines more brightly,

for the cold coming near.

And when the dark days come we will remember the sun.

And soon enough the cold will pass,

and the seeded life reawake at last.

Christopher H. Holte, written 10/28/2014 while visiting the 311 Fukushima group at facebook.

The Sun sent her a ray

In reaction to the wonderful yet sad reaction to his mother's death of my friend, the activist Andy Gunderson.

The Sun Sent Her a Ray.

She lay down to sleep

begging her family not to weep

while the sun was shining in her window.

The sun sent her a ray

that drew her away

to where the light is waiting with a smile

 

Oh those gates swung open

all her loves awaiting

sending a spirit of joy echoing

with the smell of jasmines lingering

...and a breeze carrying her soul

to fresh places where this world falls behind.

 

Christopher H. Holte 10/22/2014

Fixing the Political Farm System

I've been talking about the need for progressives to run for low level offices at county, city, state as well as at Federal level. It's a great idea, but it turns out we need to fix our "farm system" as Chris Hayes just referred to it to make it more of a reality. He interviewed Brenda Carter and Jelanni Cobb today and referred to fixing our "broken farm system" for politicians. They went all the way down to the County level, cataloguing 42000 elected office holders from County to National. They found that "people of color are actually less represented at the county level".

Jelanni Cobb of the New Yorker pointed out that our use of "at large districts" allows majorities to dominate districts where there are minorities by diluting their votes.

The website "Who Leads us" notes:

71% of elected officials are men, 90% are white, and 65% are white men.

White men are 31% of the U.S. population but hold 65% of all elected office.

White men have 8 times as much political power as women of color.

They essentially are describing what used to be described as "Old Boy Networks."

And that is what we have to challenge in the Party System. They really don't tell us how to challenge this, but I have some suggestions -- Get involved in the Chambers of Commerce, in the Democratic Party, and don't be afraid to challenge the "old boys network" by creating new networks. This is why I've been talking about creating a "green democrats" or a "progressive democrats movement" to challenge insider domination of the Democratic party (and eventually use parallel orgs to do same with Republicans. But she notes that local political donors (rich people) dominate local politics along with the parties -- so this has to be a battle!! Have to break the gates open!

References and further reading:

Womens Donor Network

opensecrets.org

Sources:

http://www.nola.com/politics/index.ssf/2014/10/men_hold_71_percent_of_elected.html

http://wholeads.us/

More from Brenda Carter:

http://wamu.org/news/14/10/08/congress_too_white_male_and_wealthy_to_truly_represent_us_study_says

http://www.womendonors.org/brenda-choresi-carter-reflective-democracy-campaign-director/

http://www.womendonors.org/tag/reflective-democracy/

Jelani Cobb:

http://www.newyorker.com/magazine/2014/09/01/bullets-ballots

We can't fix "The Deep State" til we fix this farm system of Democracy:

The Deep State:http://billmoyers.com/2014/02/21/anatomy-of-the-deep-state

Getting Federalism backwards

Chris Edwards in his webpage claims:

"Under the U.S. Constitution, the federal government was assigned specific, limited powers and most government functions were left to the states. To ensure that people understood the limits on federal power, the nation’s founders added the Constitution’s Tenth Amendment: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” - See more at:http://www.downsizinggovernment.org/fiscal-federalism

However, looking at the Constitution that might be how Chris E. and most of our cons, interpret it. But I'm not sure that it's intent was t obe "specific" or "limited" or to limit functions to the states. On the contrary in Federalist One Hamilton warns against this view:

"Among the most formidable of the obstacles which the new Constitution will have to encounter may readily be distinguished the obvious interest of a certain class of men in every State to resist all changes which may hazard a diminution of the power, emolument, and consequence of the offices they hold under the State establishments; and the perverted ambition of another class of men, who will either hope to aggrandize themselves by the confusions of their country, or will flatter themselves with fairer prospects of elevation from the subdivision of the empire into several partial confederacies than from its union under one government."

Which seems to have been the plan of cons from Aaron Burr, the man who killed Hamilton to Jefferson Davis who led the Confederacy in it's rebellion against the Nation. And it certainly seems to be the attitude of modern cons who resist the will of the people as a whole by appealing to this notion that somehow he "Federal Government" should not be a General Government with the General roles of a general government. Hamilton as an ex Staff Officer of George Washington saw this as a threat. And there is nothing in the constitution about "specific" powers, but instead the preamble says:

"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

The General Welfare is not advanced by sectarian violence, sectional rebellion, or the misuse of the courts and misinterpretations of the constitution for the "private, separate advantage" [Locke's definity of Tyranny] of contentious oligarchs. The founders, not even Jefferson or Madison envisioned a government that would be ineffectual with only "specific" powers. They would not have created a General Executive with monarchal powers like the President if they had had such a vision. Hamilton wrote his opinion in what gets rendered as All Caps in present day type. He thought it was that important.

"THE UTILITY OF THE UNION TO YOUR POLITICAL PROSPERITY THE INSUFFICIENCY OF THE PRESENT CONFEDERATION TO PRESERVE THAT UNION THE NECESSITY OF A GOVERNMENT AT LEAST EQUALLY ENERGETIC WITH THE ONE PROPOSED, TO THE ATTAINMENT OF THIS OBJECT THE CONFORMITY OF THE PROPOSED CONSTITUTION TO THE TRUE PRINCIPLES OF REPUBLICAN GOVERNMENT ITS ANALOGY TO YOUR OWN STATE CONSTITUTION and lastly, THE ADDITIONAL SECURITY WHICH ITS ADOPTION WILL AFFORD TO THE PRESERVATION OF THAT SPECIES OF GOVERNMENT, TO LIBERTY, AND TO PROPERTY."

Now there was a dialogue between the Federalists and the Anti-Federalists with the Anti-Federalists later joined to Republicans such as Jefferson and Madison to limit the Federal Government from becoming a tyranny. But that is not the same as intending to emasculate it's role as a general government. Limited Government is achieved best when, contrary to my other Chris, the Federal role is "General" with the specifics left to local government. Which in many case should be much more local than the "partial confederacies" of often tyrannical states.

http://avalon.law.yale.edu/18th_century/fed01.asp

The Tenth Amendment states:

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."[10th Amendment US Constitution]

I believe that Hamilton, Franklin and to a lesser extent even Jefferson and Madison, envisioned a Collaborative Federation. A place where States and the Federal Government worked together, with neither ruling over the people but all exerting their power under the watchful eyes and with the consent of ALL the people. The right forgets that "the people" are as important in the 10th Amendment as the States and that that is why it was not anymore a successful avenue of appeal for State Tyranny than it should be for Federal Tyranny.

The Right wing savants like to make appeals to their own authority wrapping that authority in the Constitution or "Founders" or some other source like it was so much "Fresh Fish."

Disenfranchising people is unconstitutional. State or Federal. And the Constitution is meant to protect people at all levels of government from doing so.

Oh and his article is chock full of misrepresentations. Yes in 1817 President "James Madison vetoed a bill that would have provided federal aid to construct roads and canals" (See more at: http://www.downsizinggovernment.org/fiscal-federalism#sthash.KzUyjah8.dpuf)

"Having considered the bill this day presented to me entitled 'An act to set apart and pledge certain funds for internal improvements,' and which sets apart and pledges funds 'for constructing roads and canals, and improving the navigation of water courses, in order to facilitate, promote, and give security to internal commerce among the several States, and to render more easy and less expensive the means and provisions for the common defense,' I am constrained by the insuperable difficulty I feel in reconciling the bill with the Constitution of the United States to return it with that objection to the House of Representatives, in which it originated."

Madison vetoed the bill not because he objected to it's object or functionality but because he objected to the fact that the constitution didn't provide specifically for roads and canals. It appears that he intended that the United States would pass a constitutional amendment instead. Something that never happened. As Steve Lackner of the Free Republic notes: http://www.freerepublic.com/focus/news/2767135/posts

"Madison continued in his veto message, "and believing that it can not be deduced from any part of it without an inadmissible latitude of construction and reliance on insufficient precedents; believing also that the permanent success of the Constitution depends on a definite partition of powers between the General and the State Governments, and that no adequate landmarks would be left by the constructive extension of the powers of Congress as proposed in the bill, I have no option but to withhold my signature from it, and to cherishing the hope that its beneficial objects may be attained by a resort for the necessary powers to the same wisdom and virtue in the nation which established the Constitution in its actual form and providently marked out in the instrument itself a safe and practicable mode of improving it as experience might suggest [i.e., the Amendment process of Article V]."

It was his last act and it through a monkey wrench into the countries modernization programs only for his term. Because the constitution did include the power "To establish Post Offices and Post Roads", that would be the justification for road building for the next 200 years it didn't impede development but the purpose of that veto has been misconstrued ever since. It did make it impossible to create a national canal and railroad system as those systems were privateered instead. The author notes:

"What then could the nation do if it felt it was prudent as a matter of public policy to allow for internal improvements? To Madison, the answer was provided only in Article V of the Constitution. The Constitution would have to be amended to allow for a measure that Madison himself as a matter of public policy actually supported. This may seem perplexing to some, because as Supreme Court Justice Hugo Black famously said, "The layman's constitutional view is that what he likes is constitutional and that which he doesn't like is unconstitutional." I would add that Supreme Court Justices all too often fall prey to this constitutional view as well. But matters of public policy, and matters of Constitutionality are not one and the same and cannot be confounded. Regardless of whether a policy is considered needed or unnecessary, we must always independently ask whether the Constitution permits it. Madison even stated, "I am not unaware of the great importance of roads and canals and the improved navigation of water courses, and that a power in the National Legislature to provide for them might be exercised with signal advantage to the general prosperity."

Many of our problems are due to the fact that our constitution is an imperfect instrument and instead of improving the constitution of our government we've used tricks and cludges to get around it's weaknesses.

Some things I don't forget

I've got a list of lawyers & senior staff who I think need to be held accountable for our opening up of the gates of hell in 2002. It was a long slide that started with "extraordinary rendition" and has wound up with Prison guards routinely pepper spraying prisoners to make them more cooperative.

The ACLU is working to publicize the full extent to which the Bush Administration opened those gates, and our own Obama POTUS has helped them get away with it. The ACLU notes about this:

"Nevertheless, the Obama administration is still fighting to keep the full truth about torture – including photos the public hasn't yet seen – from the American people. But recently the courts and the Senate have been pushing back, resisting the government's claims that it can't reveal its torture secrets. As a result, those secrets may finally be dragged into the light."

A lot of the information has been published from leaks, and of course denied, and I've written about it before. The spigot was actually more open when Bush was still doing it.

"The government is holding back as many as 2,100 never-released images from Abu Ghraib and other detention centers overseas. The ACLU first sued for their release 10 years ago, and in August, District Court Judge Alvin Hellerstein ruled that the government must publish the photos unless it can defend withholding them on an individualized basis."

I don't need the images. My imagination fills in the details and they haunt my nightmares sometimes. I've got a list of folks in my head. I'm not going to get revenge. That's up to Divine Causality. But I won't forget either.

https://www.aclu.org/blog/human-rights-national-security/torture-secrets-are-coming

Other things I don't forget:

Corruption in our SEC:

http://www.huffingtonpost.com/rj-eskow/top-regulator-says-bank-c_b_6021296.html

Rewriting History

I grew up in a world where Christopher Columbus was the hero who "sailed the ocean blue" and "discovered America" too. A world where local Indians saved innocent religious Pilgrims from starvation, and John Smith wooed Pocahontas and she became an English Baroness. It was only later that I learned that it was "more complicated." Nothing has changed much. I walked 5 miles to Harpers Ferry today and saw various paeons to Robert E Lee, a wax image of John Brown that depicted him as a black man, when he was in fact as white as I am. A paeon to some black fellow who resisted the assault on the Federal Arsenal at Harpers Ferry. In a world where Robert E. Lee is a hero and John Brown a blood thirsty black person it's no wonder that folks still have delusions of what the South was up to in 1859, much less understand the present. Of course it's "more complicated" than any mythologized narrative. But that is why we need to tell the truth. Columbus wasn't a demon and he didn't "discover" America except from the POV of Christian Europeans looking for loot and slaves. The Pilgrims were indeed saved from starvation by help from local indigenous folks, but they weren't innocent and they were endangered of starvation because they had arrived with dreams of plantation farming or finding gold and silver. Pocohantas did save John Smith from death, and she did marry a gentleman and live in Britain. There is some truth in the legends.

Liberal Fascism

We see folks rewriting history everywhere. Jonah Goldberg wrote a book "Liberal Fascism" which is a prime example of rewriting history. Yes, there were common ideological elements between 20's and 30's liberalism and 20's and 30's Fascism. But Goldberg's thesis of identity involves rewriting (or at least spinning) the actual record. He's not the only one.

Alternet notes:

"Jonah Goldberg that contends that Hitler and Mussolini were committed left-wingers, and that today's liberals are fascism's natural intellectual heirs. While this may sound like yet another Coulteresque quickie aimed at prying some money out of Dittohead Nation, Goldberg insists that it is actually a Very Serious Work that "isn't like any Ann Coulter book" because it presents an argument that "has never been made in such detail or with such care. Goldberg also goes to great lengths from the start of the book to say that he's not really saying liberals are fascists, but hey, here are 400 pages of similarities between liberals and fascists, and if you start associating the two of them by the end of the book, then that's not his fault."[http://www.alternet.org/story/72960/jonah_goldberg's_'liberal_facism'_brings_historical_revisionism_to_comical_new_heights

Brad Reid continues later:

"But what in the world do Hitler's Germany, Soviet Russia and America under the Roosevelts all have in common, you ask? For one thing, Goldberg contends that all of these regimes gained popular support by using sinister populist rhetoric that painted wealthy capitalists in a negative light. Through sheer ignorance or ideological blindness, Goldberg never explores why trashing wealthy plutocrats during the Gilded Age and the Great Depression had become both politically profitable and morally sound. Rather, he deems all populist rhetoric as a key piece of the anti-individualist "totalitarian political religion" that American liberalism shares with Communism and Fascism.">

"While a lot of this stuff is easy to laugh off, some of Goldberg's historical revisionism is downright sickening. In one particularly grotesque passage, he tries to obfuscate the Nazis' treatment of homosexuals by calling their attitudes toward homosexuality "a source of confusion." Oh sure, he writes, "some homosexuals were sent to concentration camps," but it's also true that the early Nazi party was "rife with homosexuals." I'm sure the 100,000 men who were arrested for being homosexuals in Nazi Germany, as well as the thousands more who died in concentration camps, were proud to see their brethren so well-represented in the SS."

What is funny (not in the nice way) to me is the observation that many publicly homophobic individuals in the modern anti-Homosexual movement among the Far Right in our own country are also "rife with" closet cases who keep getting outed by folks in the gay movement. From Roy Cohn in the late 40's and 50's to "Mister spread my legs" Congressman. It's not a new thing that the vanguard of any angry movement is replete with folks who hate themselves; women who are misogynistic, gays who are homophobic, minorities who are self hating, etc... So again "it's complicated.

If Goldberg were the only one engaging in revisionism we could sigh and laugh a little. But of course he's joined by Amity Schlaes, who wrote "The Forgotten Man" with the primary objective of rewriting the history of the Great Depression. The author of one mostly positive review notes that aside from trying to paint Calvin Coolidge and Hoover as heros the book turns economic history on it's head. David Warsh writes;

"What then /did/cause cause the Great Depression? According to Shlaes, an overheated market, culminating in the October Crash of 1929, had something to do with it. So did bad banking policy and protectionism. "But the deepest problem was the intervention, the lack of faith in the marketplace. Government management of the late 1920s and 1930s hurt the economy... Fear froze the economy, but that uncertainty itself might be a cost was something the young experimenters simply did not consider." But for the air of emergency fostered by "the world of theory, the world of the pilgrims," the economy would have quickly equilibrated by itself, with wages and share prices quickly "marked to market." The Depression would have gone into the history books as no more severe than the short, sharp "liquidation" that began the '20s -- a "quarter-hour" in the history of the American republic in Andrew Mellon's memorable phrase." [http://economistsview.typepad.com/economistsview/2007/07/david-warsh-on-.html]

In short her argument is the true believer argument that insufficient "faith" in free markets drove the great depression; the idea that somehow letting the economy completely crash would enable debts to be discharged and businesses to get rid of excess industry and get back to the work of making things. A theory that is not economics or ethics, but ideological dogma. As the author notes:

"There is very little support for this idea among professional economists. Consult Essays on the Great Depression by Ben S. Bernake, for example, and you will learn that a majority of macroeconomists have concluded in recent years that prolonged adherence to the gold standard played a dominating role in determining the worldwide monetary contraction of the 1930s. "We do not yet have our hands on the grail by any means," he writes, but countries that left the gold standard early were able to reflate their monetary supplies and price levels, while countries that remained on gold were forced into further deflation. In other words, some approaching a consensus exists among economists that poorly-designed institutions and short-sighted policies were at the heart of the Great Depression. ... (About this considerable volume of work, Shlaes has very little to say. ...) ..."[http://economistsview.typepad.com/economistsview/2007/07/david-warsh-on-.html]

But of course Krugman gets on her for going after (Our hero) Keynes with pure BS spin:

Grr. Keynesianism says that deficit spending can help create jobs when the economy is depressed. The Great Society wasn’t deficit spending, it wasn’t intended to create jobs, and the economy of the 1960s wasn’t depressed. It was social engineering; we can talk about how well or badly it worked, but it had nothing whatsoever to do with Keynesian economics."

When Roosevelt did his efforts to alleviate the Great Depression Keynes hadn't even made a name for himself. Instead the Chicago School of Economics and economists in our own country had to discover the principles that Keynes would later talk about by trial and error. Krugman continues:

"Now, LBJ did engage in some Keynesian economics: namely, he imposed a contractionary fiscal policy in the form of a tax surcharge in an effort to cool an overheating economy."

And unfortunately such measures do "work" somewhat. Even con economists have discovered that monetary policy rarely impacts the economy the way theoreticians predict (Mostly because banks are privateering institutions and not agencies of good government). But hte whole prupose of rewriting history is to substitute myth (lies) and legends (half truths and exaggerations) for concepts that someone doesn't like. Krugman continues:

"Alas, pretty soon we’ll have all the usual suspects saying that the Great Society proves that Keynesian economics doesn’t work — after all, the “experts” told them so."[http://krugman.blogs.nytimes.com/2008/11/19/amity-shlaes-strikes-again/?_php=true&_type=blogs&_r=0]

So Secessionist traitors like Lee are painted as heros. The Generals who fight them are portrayed as drunks. Causality is turned on it's head and modern Neo-Fascists call their opponents fascists because young folks have been groomed to rewrite history.

All this is intentional. Whether it's Schlaes, Anne Coulter, Goldberg, or Dinesh D'Souza, these rewrites give license to folks for whom "free enterprise", "oligarchy" and "markets" are a religion. The right recruits, grooms and trains intellectuals who will carry on family tradition and spread convenient propaganda. As he notes about Goldberg, William Krystal and Podhoretz:

"William Kristol and John Podheretz, Goldberg was raised by prominent figures within the right-wing movement and was trained from the start to be an influential public "intellectual." And just as Kristol and Podheretz's writings closely mirror the neoconservative views espoused by their parents, Goldberg's penchant for attacking liberals in the most shameless and slimy ways imaginable is unsurprisingly similar to the style of his mother Lucianne, a right-wing literary agent who first came to national prominence when she helped Linda Tripp break the Monica Lewinsky scandal to the press." [http://www.alternet.org/story/72960/jonah_goldberg's_'liberal_facism'_brings_historical_revisionism_to_comical_new_heights]

That might border on being "ad-hominem" except that the author has already shown the misrepresentations, spins and outright lies of his targets.

And it "works" -- if repeating easily avoided policy mistakes is your definition of "working."