An enjoyable page turner about modern print journalism (the news room) and CIA black operations (headed by the chair). We have the lightly disguised Washington Post news room with its Watergate famous investigative reporter Woodward (Don Grady), executive editor Adam Sanger, and night editor Stanley Belsen, a raisin passing for white. The three interned together at the paper and we understand Stanley didn’t advance, not because of his color which few even know about, but because he is overly considerate and kind.
A plane or helicopter has just crashed into the Potomac directly across from the Watergate and an anonymous caller from the (Bush) White house has informed someone at the paper that a helicopter with POTUS (President of the United States) on board has gone down. At 2AM Adam and the important editors all converge on the newsroom relegating Stanley to the background. They quickly dismiss the POTUS report but can’t get any more information and are left to run a picture of a fire with the Watergate in the background.
Mary Goodwyn, Air Force Captain, pilot of the F16 Viper, that she has ejected from when the plane stop responding to the controls and heads for the Potomac, awakes in a giant oak. She notices the great view of the Lincoln Memorial and reflecting pool before going into shock. She wakes up later in Walter Reed Hospital. There is no explanation for the plane’s malfunction and she is not charged with pilot error. Soon she is flying again and heading for her second tour of duty in Afghanistan. On her first mission she is directed to a target where she drops a 500 pound pound. Pictures are later released of girls dressed in white who were killed by her bomb. The novel and Mary quickly forget this incident.
The air force admits that it was an f16 that crashed but do not reveal the name or fate of the pilot. The story dies.
We meet the chair, Will Holmes, CIA black ops, former military, current head of MECS Media Exploitation Component Services housed in an unmarked office in Vienna Virginia. His group has originated a technology to remotely take control of a fly by wire modern plane such as a commercial airliner (or an F16) The program is code named “Potomac Pilot”. No more need for the VP (who Will call the Mean Man) to order the shooting down of hijacked commercial airliners. The CIA can just bring any plane down at will once the technology is fully deployed.
A secret document the Sissy (Senate Select Committee on Intelligence) report is leaked to the competitive paper who publish a report of surveillance of the President. There is great embarrassment in the news room and heads will roll. Don has had a copy of the Sissy report all along but is saving it for his next book, unknown to Adam. When reports don’t appear, another copy is leaked to Don’s wife Mabel who is a columnist for the paper. She attempts to deliver it to Adam but he is too busy to see her so he puts it into Stanley’s mail slot at home. Only Stanley among all journalists at either paper who seems to have actual read the report where he finds buried the “Potomac Pilot” program.
Stanley has assigned a black reporter, Vera, on the metro police beat to investigate the F16 crash. She finds a 14 year old street prostitute, Baby, who was on Roosevelt Island when the crash occurred and saw the pilot in the tree and her rescuers (dressed in black). Vera finds a sign on the Island saying he park is closed. Implausibly the Letters MECS are on the bottom of the sign. It later transpires that the newly promoted Managing Editor of the paper is a regular customer of Baby and other underage prostitutes. No consequences for the Managing Editor – some tale huh! Now Stanley gives Vera the Sissy report so she can wrap up her story of the “Potomac Pilot” program and the crash. Vera never uncovers Mary. The VP gets the paper to kill the story. The end? Not quite.
Now a side plot in the already thin tale; In a previous incarnation, Will ran spies and his highest value recruit was Persian Nuclear Scientist Hoseyn who supposedly died but recent intelligence reports indicates may be alive. Will conceives a plan right out of the Carter administration to go into Iran snag Hosein and fly him in a stolen commercial airliner to Iraq. He picks Mary as his pilot and they will disguise themselves as Kurdish peasants until the snatch.
The book is filled with overly smart and sometimes incomprehensible language and expressions. It is best on the inner dynamics of the news room where the author worked for several years and where no reporter or editor reads the paper any more. The expose on the almost total absence of investigative reporting, the repression of news, the new focus on writing books as opposed to reporting the news sounds about right. Disappointing in that nothing is ever resolved, or reported, or corrected. Life at the paper blunders on. It is not only the Internet that is killing print journalism.
Age of Greed, The Triumph of Finance and the Decline of America, 1970 to the Present, Jeff Madrick, 2011
Madrick begins his account around 1970 when CEOs made an average of 12 times the compensation of the average worker and bankers were paid less than the CEOs of major non banking corporations. Today the CEOs make 200-300 times the average worker and CEOs of finance companies can join the ranks of the top 400 wealthiest Americans, far outreaching the wealth of the average CEO. This 40 year period also saw the greatest decline in American industrial innovation and research in history. He tells the story of this decline through the careers of the most notorious characters of the period.
Citigroup’s Wriston, Inventor of Too Big to Fail
He starts with Walter Wriston, who headed what later became Citigroup from 1967 through 1983 as it became the first “too big to fail” financial institution. Writon worked tirelessly to undermine, eliminate, or circumvent all banking regulation while repeatedly requiring the Federal government to come to his rescue when his bank got into financial difficulties. During his tenure, state usury laws were eliminated, the limits on interest banks could pay depositors were eliminated, and the prohibition against interstate banking were eliminated. Both Carter and Reagan were responsible for these banking changes.
Pickens, Greenmail specialist and Milken, junk bond specialist
He then moves to the aggressive acquisitions and mergers period of the 80s highlighting such innovations as insider trading (Ivan Boesky), greenmail, the launching of a fake bid to buy a company to induce other bidders to enter a bidding war. T Boone Pickens repeatedly used greenmail launching bids without ever completing a company purchase building enormous wealth in the process. He uses GEs Jack Welsh to illustrate that acquisitions with no strategy other than maximizing profits and driving up the price of the company stock. Welch perfected the art of manipulating accounts to show increased profits every quarter for 13 straight years. In the process GE shed hundreds of thousands of jobs, closed countless divisions, and moved GE steadily toward becoming a financial giant accounting for more than half of GEs profits. To provide money for all these acquisitions, Michael Milken perfected the junk bond, a way to raise money from investors outside normal financial regulations. Milken was brought down, not from abuses in junk bonds, but because he began to illegally “park” stock purchases for those quietly buying stock in a target company above the 5% disclosure limit.
Welch strips GE and exports jobs
He illustrates how destructive acquisitions have become to the companies involved and to the overall economy. The goal is to become the dominant player in a field after which reducing labor and research (innovation) can be used to drive profits without fear of competition. The consumer and the economy as a whole suffers. The biggest example comes out of the mergers in media, cable, and entertainment with the mergers of Warner, Time, Turner, and AOL which destroyed enormous wealth and turned the unique 24 hours news CNN network into a news-less shell.
After junk bonds became a dirty word and helped to bring down the entire S&L industry, the new hot investment vehicle became the hedge fund. Hedge funds are limited to 100 very wealthy investors. He uses George Soros, who claims he never broke the rules with his investing then admits that there were no rules, and John Meriwether of LTCM who introduced the VAR volatility measure and hiring of mathematical “quants” to the business of risk managed investing. LTCM collapsed in 1998 but Soros is still going strong.
Weil Too Big to Manage
He returns to Citigroup with CEO Sandy Weil, illustrating the nutty progressing of acquisitions and divestitures. Weil came by way of Shearson merging with AMEX who when acquired by Prudential. Weil then bought back Shearson from AMEX and bought Travelers. Weil then merged with Citi to form Citigroup. The only problem was the Glass-Steagall separation of investment from retail banking. Weil approached Alan Greenspan who offered a two year waiver to allow the merger and a year later Glass-Steagall was history. Citigroup continued its various flirtations with disaster, coming to the brink of collapse time after time only to have the government rescue it. An early colleague of Weil, Jimmy Dimon followed his own circuitous route to eventually head JP Morgan.
He then leads us through the corrupt world of stock analysts, featuring Frank Quattrone, and IPOs leading to the dot com crash of 2000. By 2000 virtually every analyst was recommending buy or strong buy for every new stock issue. A hold or sell meant simply that the analysts company had been cut out the commissions involved in the IPO. Allocations of IPO shares was a rewards – punishment labyrinth of conflicting interests. Hundreds of billions were lost as the companies folded in the crash. Similar things happened in communications with analysts like Jack Grubman pushing Worldcom, Global Crossings, Tyco, and Adelphia stocks ever higher. To add to the mix, accounting giant Anderson, was approving the crazy accounting of companies like Worldcom and Enron. Banking giants were also using “creative accounting” to show profits and hide losses or risky exposure.
Finally he turns to the current mess featuring Bear Stern’s Jimmy Cayne, Lehman Brothers’ Richard Fuld, Merrill Lynch’s Stan O’Neil, and Citigroup’s Robert Rubin. Derivatives for currencies, commodities, and other securities have been around since the 1960s and were applied to mortgages by Fanny Mae in the 1980s but for conventional or conforming loans only. Dividing securities into tranches or slices to tailor risk and insuring derivatives have also been around a while. What was new after the dot com crash was that mortgage backed derivatives became the new best way for financial institutions to earn huge fees. Everyone from Freddy and Fannie, to Wall Street, to the banks, to the hedge funds all jumped on board, creating an enormous demand for new mortgages. The only way to meet this demand was to create new types or mortgages (ARMS, interest only, pay what you can) and sell them to an ever wider collection of consumer. Enter specialized mortgage firms like Countrywide under Angelo Mozilo. When the quality of mortgages started to get B ratings, ever creative geniuses of finance created the CDO 2 which was made up of B rated derivatives somehow magically transformed into AAA instruments.
Masterminding the big crash
Estimates put the federal exposure to mortgages backed by government guarantees at $12 Trillion, too big to fail on steroids. Despite TARP and institution bas debt writedowns in the hundreds of billions, we still don’t know the extent of toxic assets still sitting on the books. Madrick is particularly critical of the failure of government not to insist that the books be cleaned and the institutions forced to lend to business and consumers as a price for the bailouts. He also thinks the government should have been better compensated for the extreme risks the public took. He doesn’t however call for a breakup of the too big to fail finance organizations.
There are excellent books covering specific periods and incidents covered here but the primary benefit of this work is to pull together a 40 year overall look at the transformations of American business and finance. His conclusion is that the entire period is one of wasted opportunities and massive loss of wealth that could have been used to build a better, sustainable America. From the Latin American loans in the 1970s to the destructive acquisitions binge of the 1980s via junk bonds and the collapse of the S&Ls to the telecom bubble of the 1990s to the technology bubble of 2000 to the mortgage crisis of 2008, trillions of investment dollars were simply flushed down the toilets. Some of that enormous investment found its way into the pockets of a handful of very wealthy investors which was the driving motive for all the investment activity in the first place. In the process, finance became the new way to wealth in America, replacing entrepreneurship and innovation. He sites a study that shows that Harvard graduates now going into finance can expect to earn three times more than their classmates.
In a heavily and properly regulated environment, none of this need have happened but every President from Carter on has led to more and more deregulation. Obamas efforts at reform fall far short and Madrick is pessimistic that government is up to the task to putting into place an adequate regulatory environment.
Having read and commented on several works detailing the financial meltdown, including IOU, How Markets Fail, Too Big To Fail, and House of Cards , this reader still felt that something was missing from the account; how could all these “masters of the universe” have been so monumentally stupid as to not see the disaster they were inevitably creating?
Along comes Lewis, who chooses to focus on four individuals who saw the disaster coming before others and found ways to personally profit from the disaster by inventing new “shorting” strategies. Some reviewers have focused on David Einhorn who features in Sorkin’s work for his alleged role in leading the charge to short Bear Sterns and ultimately bring down the first Wall Street firm to fail. But this book puts the focus where it properly belongs on Dr. Michael Burry, a medical doctor who first became interested in investing while working long hours as an intern. He not only found time to research and invest while working long hours but started blogging about his research and investment strategies, thus coming to the attention of other investors. Interestingly, unlike Einhorn, whose primary investment strategy was looking for firms to short, Burry started out as a value investor in the mold of Warren Buffet. A value investor looks for companies whose stock price is so depressed, the company would be worth more if it were liquidated. Burry became so successful in his strategy he actually (thanks to his blog) got some New York investors to create a fund that he would manage. This fund effectively put an end to Burry’s career as a practicing doctor.
Dr. Michael Burry
Then, around 2004, for whatever reason but probably simply curiosity, Burry started researching the new sub-prime mortgage instruments deemed by most too complex to understand. Lewis believes that Burry was perhaps the only person in the entire world (perhaps other than the lawyers who created them) to read and understand the documents used to create these new instruments. Burry immediately intuited that these instruments were ticking time bombs and he picked a few to study in depth to understand the probable time line of their demise. But Burry had a problem. There was no obvious way to profit from his advanced knowledge of what was about to unfold in the market.
David Einhorn
Burry had been aware for a couple years of something called a credit default swap (CDS) which was actually an insurance policy one would take out on a corporate bond. Burry thought such an instrument was need for sub-prime mortgage “bonds” and convinced some wall street firms to offer them starting around 2005. The CDS then allowed Burry and others, like Einhorn, to place bets against specific sub-prime mortgage “bonds”. The really interesting thing I hadn’t previously realized was that one could buy a CDS on a mortgage bond without actually buying the bond itself. This is a bit like companies buying life insurance policies for their employees with themselves as beneficiaries. Burry is thus “patient zero” in the creation of an entire industry (admittedly small) dedicated to shorting the sub-prime mortgage market. Curiously, only a handful of people and institutions (four of which feature in this book) followed Burry into this market for shorting bonds. It was only at the end toward the collapse, that most of wall street who were holding these ticking time bombs started buying their own “insurance”. It was this last minute flurry that caused such huge losses at AIG (the biggest underwriter of CDS) and which resulted in much of TARP money making good on insurance payouts.
Most reviews of this book are misleading and lead one to wonder if reviewers actually bother to read the books they review. A somewhat lengthy excerpt was published in Vanity Fair around the time of publication that gives a an accurate sense of the book and of Burry’s central role in the market for shorting sub-prime mortgage bonds.
For this reader, one of the best aspects of Lewis’ book was not the figuring out how to bet against the collapse of this huge financial market, but the actual living through the demise from the point of view of those who had made huge bets that the market would collapse. First, sub prime mortgage bonds were not sold in a normal market with transparency and a readily available marketplace where they could be traded under fair and regulated conditions. So if a sub prime mortgage bond has clearly failed and insurance is owed, who exactly is responsible for declaring it worthless.
Our small group of shorters were shocked to discover how many of these bonds were still held by big Wall Street and banking firms as they failed. They naturally assumed that since it was obvious to them these bonds would blow up, the smart people running the big firms would know this as well and would have long since sold the ticking bombs to some other dumb suckers. They didn’t and when it finally dawned on the big firms they quickly started buying their own insurance policies at the last minute, transferring at least some of their liability to the underwriters like AIG. During this period while they were busy buying their own policies they had every incentive to hide the fact that the bonds had already failed. But here again, some firms were also underwriting and holding the bonds at the same time (monumental stupidity) and they reacted to the failure of the bonds by denying the bonds were worthless.
Without defined marketplaces and without well understood and enforced rules how were the shorters to get clear declarations that the bonds they were betting against had actually failed and the insurance was therefore owed?
Finally the scales tipped with TARP and some of the most toxic bonds were declared to have failed. The next big hurtle to getting paid was the likelihood that the insurers would themselves become insolvent and no insurance would be forthcoming. Again, step in the federal government to prop up the insurers and allow the shorters to be paid.
So these handful of people foresaw the collapse, figured out a way to bet that it would collapse, and profited by that collapse. Did they celebrate? By Lewis account most were shocked by the magnitude and breadth of the disaster they themselves predicted. After months of concern that they would ever see their bets pay off, most were equally shocked that Federal government intervention was almost the sole means by which their bets were made good. So there doesn’t seem to have been celebrations that these few had got it right and had been able to profit from being right. Many are now in new lines of work or have reverted to previous investment modes like Burry’s original value investing.
Shorting a world wide economic collapse didn’t, in the end, feel too good. Good reading, fascinating characters, and even a moral tale. who would have thought.
The Great American University, Jonathan R. Cole, 2009
This important work is a plea for the preservation of the unique American Research Universities that are currently the best in the world but that are unstable and vulnerable institutions. Cole, a lifelong Columbia University product, is uniquely qualified for this work because of his specialized training in the sociology of science and his career which culminated as provost (in charge of curriculum) at Columbia. He begins with a brief history of the American University, starting with the first, Harvard, and including a small number of private colleges, two of which, the University of Pennsylvania and the University of Virginia were founded by Benjamin Franklin and Thomas Jefferson respectively. He focuses on the period from 1870 to 1930. During the Civil War, the prescient Abraham Lincoln oversaw the creation of the land grant colleges where Federal land was made available to the states to establishes new colleges, and the establishment of the Federally funded agricultural extension services whereby advanced agricultural research and technical assistance to farmers could be conducted at the newly established land grant institutions. These acts led to the dramatic increase in the number of institutions of higher learning throughout the United States. An unanticipated result was the key role these new public “agricultural” colleges were to play in the increasingly urban and industrialized country that grew rapidly after the civil war. Cole also notes the critical influence of the “Robber Baron” class of monopolists whose extreme wealth led to several individuals endowing entire colleges (Stanford, Carnegie, Rockefeller) and establishing large foundations and grant organizations funding college research. But the rise in power of the monopolists also led to a backlash in the form of the Teddy Roosevelt led progressive movement which aimed to reign in the power and corruption of these wealthy monopolists. The impact on the colleges was a revolution in governance as a new level of professionalism, professional journals, and peer review came to replace the college presidents and board of governors or trustees as the focus of power and decision making in the schools.
Vannever Bush
By 1930, the American universities were in the ascendancy but not yet recognized as the best in the world. Then came the great depression and the inauguration of two leaders in January 1933, FDR in the US and Hitler in Germany. By October 1933, Hitler had fired all Jewish public servants including University professors and started the greatest brain drain in educational and scientific research history. Some non Jews such as the theologian Paul Tillich, who openly opposed the Nazi regime were also fired and many other non Jews left German universities of their own accord. The exodus was not limited to Germany and many Austrian, Hungarian (Leo Szilard), and even Scandinavian (Danish Niels Bohr) professors who went on to make key contributions to the Manhattan project. By the end of WWII half of all German theoretical physicists had migrated to the US. The German Universities fell in stature from the best in the world in 1930 to mediocre and to this day have not recovered their former eminence. It is this sudden precipitate and seemingly permanent fall from dominance that leads Cole to fear for the fragility of the American research university system. By the end of WWII the American research university with its rich infusion of foreign talent was poised to become the best in the world. Enter Vannevar Bush, a key administrator for the Manhattan project and science visionary with the ear of FDR who wrote a treatise “Science-The Endless Frontier” outlining his vision of a unified federal grant agency with huge funds to support scientific research at American universities. The actual implementation was not a single agency (with Bush as its head as he envisioned) but a number of separate agencies, the NSF for general science, the NIH for biological and medical research, the DOD and its unique ARPA agency that supported social and scientific research without immediate military application and others. This set of agencies led to the huge infusion of grants and research monies that allowed the American Research Universities to enter their golden age of worldwide dominance and leadership in research.
Clark Kerr
What was this uniquely American research university like? Clark Kerr, the man most responsible for the development of the national trend setting University of California system wrote in 1963 about the uniquely American universities:
A university anywhere can aim no higher than to be as British as possible for the sake of the undergraduates, as German as possible for the sake of the graduates and the research personnel, as American as possible for the sake of the public at large — and as confused as possible for the sake of the preservation of the whole uneasy balance.
Cole calls the period from 1963-1968 (LBJ) the golden age of the American research university. It was in this golden age that the social sciences received large grants for research and even the arts and humanities found large and sustained support. Vietnam was to put an end this golden age as campus protests and unrest led to the dismissal of at least two University leaders, the president at Columbia was fired for overreacting to student protests, and Clark Kerr at Berkeley, was removed by newly elected governor Ronald Regan for under reacting to protests at Berkeley. Cole asserts the it took two decades for Columbia to recover from this period and incident.
Frederick Terman
Cole spends some time looking at Stanford’s meteoric rise to become one of the leading research universities in the nation under Frederick Terman. Two of Terman’s students, Hewitt and Packard, were pioneers in establishing HP in the first industrial park wholly owned by Stanford, creating the legendary Silicon Valley with start ups like Fairchild, Intel, Sun, Apple, Google and hundreds of others. even Boston with Harvard, MIT and six other universities pales in comparison with the impact of Stanford (Berkeley and Cal tech deserve some credit) on the creation of Silicon valley.
Starting in the 1970s research grants moved almost completely away from the humanities and and social sciences and even to some extent away from pure science into computers and technology and most heavily into biological and medical science. Today about half of all Federal support for university research is spent on biomedical research. Until 1980 any patents resulting from Federally funded research belonged to the government. Then the Bayh – Dole act of 1980 assigned these patents to the universities where the research took place. This led to a profound change as the Universities were suddenly pushed into the role of technology licensers with huge potential payoffs. Stanford made $380 million from licensing the Google search patents to Google and similar windfalls have come from licensing drug and medical device patents.
Cole identifies three distinct types of research, pure science such as particle physics and space exploration where immediate application and benefits are unknown. Pure science is curiosity driven and it may be no accident that the world’s largest particle accelerator CERN was built in Europe. The second type of research is in areas that are likely to result in immediate application such as computer and nano-technology as well as solar and wind technologies. These areas of research are increasingly attractive to American universities because they can lead to immediate patents and revenue for the university. The third area is pure research that may lead to applications if breakthroughs are made in the research. This is typical of the biological, genetic, and medical areas where progress is uncertain. Much has been learned about cancer but cures are still rare and disorders like autism, Parkison’s disease, and Alzheimer are still beyond any possible cure. But these area remain hopeful that scientific breakthroughs will occur.
Cole spends the middle section of his book reminding us all of the contributions our Universities have made to improving our lives. This section is a useful reminder of the importance these institutions have had in our lives.
He ends with a history of three threats that severely endangered our universities, the red scares of 1917-1924 and 1949-1954 where faculty members were fired or at least silenced, and the post 9/11 Bush terror scare from 2001-2009, which Cole argues is the most serious of the three in its implications for the survival of the preeminent research University. First, the Patriot Act gives the FBI unprecedented and secret powers to gain access to university records on individual professors and students including library records. Cole argues that this leads to unnecessary self censorship and fear among members of the university community far beyond any actual prosecution. Second, the anthrax scare actually ruined several careers and new catch 22 rules about the handling of pathogens has led to a mass exodus of researchers from the study of infectious diseases. Third, the imposition of arbitrary religious convictions regarding embryonic stem cells has virtually stopped research progress in promising areas which delay had undoubtedly caused unnecessary death and suffering. When Nancy Reagan questions the ban you know something has done badly wrong. Finally the overt and successful censorship of professional journal articles and government research efforts, particularly in regard to global warming and sex education by the Bush administration bodes very ill for the continuing freedom and integrity of the peer reviewed scientific communication system. The Bush administration also attempted to completely suppress publications that they arbitrarily believed would be be useful and exploitable by potential terrorists.
The other big impact of the Bush terror war is on the admission of foreign students and hiring of foreign professors. There has been a huge drop in intellectual capital that cannot be met by American high schools. Increasing percentages of enrollment in the University of California system come from Asia but this rise has leveled under restrictive immigration policies. Even active professors working at American universities have lost their ability to return to their positions at great cost to the research they were conducting.
Perhaps the most interesting aspect of the book deal with trying to preserve a structure that is inherently a meritocracy (elitist), where only a few of the most talented are responsible for most of the gains and breakthroughs of the entire huge system. Cole talks about the internal threat posed by orthodoxy and dogma where a few individuals can gain control of a school of thought and close it to all possible challenges, killing criticism and any possibly of progress. He doesn’t give examples but this reader would offer the Chicago School of Economics where is seems to have happened. Milton Friedman and his associates so dominated discourse with their free market notions that empirical evidence simply was ignored. It was left to other schools to criticize the Chicago school (Stieglitz and Galbraith father and son) but the Chicago School held a stranglehold on government and government institutions like the IMF and World Bank throughout recent history. About the only positive thing about this example is the universe of research institutions is large enough that meaningful critical work can continue in these periods of orthodoxy.
Another risk comes from the increasing need of research universities to compete for the best talent and resources. The public universities like the California system are under enormous pressure as their states cut back on funding. They can only compensate by raising tuition and competing more effectively for research grants or by producing revenue generating licenseable technology. Somehow the states must be convinced to stop short changing their valuable research institutions and decrease this pressure before irreversible damage occurs.
Cole is also a strong believer the research university must remain strong in all areas including the social sciences, the arts and humanities. The research university must never divorce its research from its teaching function. The best and most productive members of the faculty in terms of research are usually the best at replicating themselves, training the next generation of researchers. It is also true that most innovation comes from young minds but that the rewards of grant moneys and laboratory facilities goes to older, established individuals. These gifted older individuals must train and offer laboratory opportunities to their students who will generate the next breakthroughs by bringing fresh perspectives to their work and research. The German system (as well as the Russian, Chinese, and Japanese) are authoritarian and hierarchical with absolute respect being owed to the senior professor. Visitors to American universities are always struck that professors and their graduate research assistants are on a first name, very informal basis. It is natural in this setting for the professor to offer gentle guidance based on experience but also to listen to new and even wild ideas from his assistants. This is the way to new discoveries.
Cole also talks a bit about the continuing struggle to broaden admissions to account for gender, racial, and income differences. Some universities like Harvard in the early 20th Century went on a campaign to rid its faculty and student body of Jews but other schools like Columbia and the University of Chicago simultaneously added disproportionate numbers of Jews to their faculties and student bodies. The great diversity of great American universities had no problem absorbing the large influx of Jewish European professor in the Nazi period. Cole finds it ironic the the Israeli lobby today is attacking those same institutions that offered refuge from the Nazis for hiring middle east professors and setting up programs to teach middle east language and culture. This lobby even attacks Jewish professors like Tony Judt for criticizing Israeli actions and policy. Columbia came under enormous pressure from the lobby when Palestinian Edward Said taught at Columbia.
How do you describe the unique American Research University? Here is Cole:
Great universities are designed to be unsettling. They challenge orthodoxies and dogmas as well as social values and public policies. They are the most effective instrument for creating skepticism and discontent with established institutions…Great teachers challenge the biases and presuppositions of their students and colleagues. They present unsettling ideas and dare others to rebut them and to defend their own beliefs in a coherent and principled manner. The American research university pushes and pulls at the walls of orthodoxy and rejects politically correct thinking.
Unsettling by nature, university culture is also highly conservative. It demands evidence before accepting novel challenges to existing theories and methods. The university ought to be viewed in terms of a fundamental interdependence between the liberality of its intellectual life and the conservatism of its methodological demands…We permit almost any idea to be put forward – but only because we demand arguments and evidence to back up the ideas we debate and because we set the bar of proof at such a high level. These two components — tolerance for unsettling ideas and insistence on rigorous skeptics about all ideas — create an essential tension at the the heart of the American research university.
So for all his fears about outside interventions from special interests, government, and industry, Cole ultimately fears most the threats from within the university itself if this unsettling tension is lost.
Finally Cole believes that competition among the leading universities is not only healthy but essential to maintain the absolute highest levels of achievement. This competition involves competing for endowments, grants, faculty, students, and even athletic achievement. He most worries that the wealthiest universities (Harvard dwarfs all other schools with its endowments) will increasingly have a competitive advantage and this will result in greater concentrations of talent and production. Only the Federal and state governments are in a position to redress this imbalance with increased infusions of support spread over the whole range of private and public universities. The new crop of super wealthy Americans like Gates and Buffet could also do a lot to redress the balance and create a more level playing field for the universities but currently Gates and Buffet are looking elsewhere where their money can have a global impact.
While we are vaguely aware of secret bank accounts in Switzerland and the Caribbean, few actual studies and little journalism are done, maybe because facts are so hard to come by. Here is a compact work delving into the history and current state of offshore banking. It is short of figures because of the secrecy but Shaxson argues offshore banking is at the heart of recent financial crises and seemingly beyond the control of any government. The author, Shaxson, is British and perhaps only a Brit can adequately tell the story.
At the heart of this tale is the City of London which this reader thought was just a part of London where banks locate but is in fact a state within state, much like the Vatican, which traces its origins back to the Magna Carta – it predates Parliament. The City of London, covering a single square mile in the heart of London, has its own government with a Lord mayor at its head elected, not by people, but by corporations who have a vote in the City. The City of London was useful to the monarchs of England because they could borrow to pay for their domestic and international adventures. Then when England created its empire, the City of London was essential in financing that empire. The City reached its old zenith in the roaring twenties when even America had opened subsidiaries of their biggest banks in the City of London. This golden era ended with the crash of 1929, the great depression, the rise of fascism, and WWII. By the end of the war the City of London was a sleepy backwater whose bankers took three day weekends. Nonetheless, every November the City holds its Lord Mayor’s show an arcane ritual with guided coaches and elderly men in long satin robes.
John Maynard Keynes and Harry Dexter White at Bretton Woods
In 1944 John Maynard Keynes, the most brilliant Economist in history, helped negotiate the Bretton Woods agreement to control and limit international finance and create the IMF and the World Bank. This set of principals were to govern international banking until about 1970 and ushered in a period of continuous growth and prosperity for all leading economies.
The debts from WWII led to the breakup of the colonial empires, for Britain starting with the independence and partition of India in 1947 and culminating in the shocking nationalization of the Suez canal by independent Egypt in 1956.
Omar Bongo’s Paris
But something else was going on in this period. Shaxon, working for Reuters, was interested in why oil producing countries in Africa were doing so poorly. The light finally went on during a trip to Gabon in 1997. Gabon became independent of France in 1960 and in 1967 France installed Omar Bongo, then only 32, from a small minority group who combined cunning, charisma, and loyalty to France. France stationed a small contingent of troops to assure Bongo could not be overthrown in a coup. Bongo was to rule Gabon continuously til his death in 2009. Gabon was to become the cornerstone of the Elf (Elf Aquitaine) system, a global system of corruption using Switzerland and Luxembourg as tax havens and secretly connecting former french colony African oil producers to politics in France. The Elf system allowed African oil money to secretly control the politics of France for the benefit of France’s biggest corporations.
Caymans Hong Kong
Shaxon was led to look again at the moribund City of London after the breakup of the British empire. Starting in the 1950′s, the City of London was busily constructing its own labyrinth of offshore banking havens in an elaborate three tier system made from the remnants of the empire. The first tier were the crown dependencies, the islands of Jersey, Guernsey, and Man. The second tier consisted of seven of Britain’s Overseas Territories with the Queen as head of state; Antigua, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Montserrat, and the Turks and Caicos Islands. The third tier consisted of Hong Kong and a scattering of other small remnants of empire in the Pacific and elsewhere. The City of London was to keep two sets of books, one for onshore banking and another for offshore banking. Secrecy and an absence of regulation or oversight was the mainstay of the offshore system. Big American banks like Citibank and Chase quickly realized that they could get around the restrictions of the Glass Steagall Act of 1933 which prevented banks from investment or casino banking, by opening subsidiaries in the offshore side of the City of London. By 1960 in France, Britain, and America the highly regulated banking systems and the Bretton Woods conventions were fast eroding. While Thatcher and Reagan continued the national erosion of regulation in the 1980′s the horses had long before left the barn for the offshore system. The Reagan – Thatcher liberalization efforts were attempts to allow domestic financial institutions to catch up with the runaway Euromarket. The Lord Mayor of the City regularly lobbies for liberalization and deregulation, making twenty trips a year to places like China and India. Insider trading has been a regular feature of activities within the offshore system where secrecy and the lack of any regulations lead to an anything goes environment. Out of the ashes of European empire and the fall of Suez rose the Euromarket, an unregulated new empire with its heart in the City of London. A 1957 commission studying the City of London concluded “Logic has its limits and the position of the City lies outside them.”
In 2008 the City accounted for half of international equity trades, 45% of over the counter derivatives, 70% of Eurobond turnover, 35% of international currency trades, and 55% of international IPOs. Yet the City remains all but invisible to historians, political analysts, and the media. The AIG subsidiary that cost US taxpayers $180 Billion operated from the City.
We think of the offshore world as the domain of organized crime, and so Shaxson treats us to a brief history of the pioneering work of mob boss Mayer Lansky who perfected the art of money laundering through Bermuda and Switzerland, converting illicit gains into south Florida real estate. Lansky built the casino and entertainment system in Cuba then “retired” to Miami Beach in 1959 when Castro overthrew the Batista government. Lansky died in 1983 in Miami Beach where he was locally portrayed as this nice grandfatherly benign old man.
Shaxson also treats us to a history of the origins of the modern multinational corporation via the Vestey brothers who built a fully integrated meat monopoly in the early 20th Century around Latin American and Australian producers. The brothers controlled every aspect of the business from production to shipping and storage to marketing. Their principals of operation were – create a monopoly, squeeze the ends (producers and markets) to push the profits to the middle, don’t tell anyone what you are doing, avoid taxes at all costs. By the first world war the brothers were the wealthiest people in Britain yet they paid no taxes at all. They ignored all suggestions that they were not patriotic and were given honorary titles. Their secret weapon of choice to disguise their activities and avoid taxes was the trust. The Vestey brother’s principals are practiced by virtually all modern multinational corporations. Oil multinationals are a classic example of the Vestey style in the modern multinational corporation. The resource owners are squeezed with low royalties as are the consumers with high prices. The profits are squeezed into the middle where they may be opaquely hidden from tax collectors and other stakeholders. It is impossible for shareholders, auditors, let alone management, to figure out how the oil companies actually operate. The Elf system is alive and well in the oil industry.
While trusts are still used offshore, modern secrecy assures that governments cannot trace activities or tie them to individuals or corporations. With the Swiss system, individuals or corporations must fully disclose their identities and the Swiss promise not to tell anyone. With modern offshore systems, accounts are created by proxy and queries will only lead to a lawyer someplace that can protect the identity of the owner by invoking attorney-client privilege. If this is not enough, accounts can be set up to trigger instant electronic closure and movement and erasure of all banking records when an inquiry is detected. Some offshore jurisdictions not only criminalize disclosure of account information, but criminalize the making of inquiries. It is little wonder that so little is known about offshore banking.
So what do we know about this offshore system? The Euromarket grew from a net $500 Billion in 1980 to $1.7 Trillion in 1988. By 1997 90% of international loans were made through this market. We know that Enron had 881 offshore subsidiaries when it went bust; that in 2008 Citigroup had 427 tax haven subsidiaries, Morgan Stanley had 290, and News Corporation (Fox News) had 152. We know that the Cayman Islands had deposits in 2007 totally $1.7 Trillion, that Hong Kong in 2007 had deposits totaling $149 but growing fast. Hong Kong is the center of most corruption activity in China. It is estimated that the United States loses $100 Billion a year in taxes to tax havens. About a third of deposits come from corrupt individuals and organized crime including terrorist networks. Drug sales alone account for $500 Billion annually, more than twice Saudi Arabian oil revenues. That leaves two thirds of deposits to multinational corporations. This makes it virtually impossible to attack or control off shore banking due to the political power of these corporations. And all multinational corporations seem to engage in offshore activities including Cisco and Google, putting a lie to their “do no harm” slogan. Bono, raiser of millions through charitable concerts, uses off shore tax havens. More than 60% of total international trades take place between subsidiaries of the same multinational corporation. The purpose of these trades is opacity from shareholders and auditors and tax avoidance. In a generally ignored detail, LTCM which collapsed in 1998 operated offshore from the Cayman Islands.
For the US, twenty five years of tax cuts “has produced not trickle down — but Niagara up. Much of this new concentration of wealth finds it way offshore.
While wealthy countries lose taxes and regulatory control to the offshore system, the biggest impact is felt in the developing world. Shaxson says that the principal foundation of modern democracy is taxation with representation. It is the interaction between elected officials and the citizens to determine the level of taxes and the use to be made of those taxes by government that underpins the entire system of proper governance. This system is undermined or never allowed to develop in countries that are dependent on minerals for financial resources or become dependent on international aid and finance. And when wealthy individuals lack confidence in the local institutions of government there is an irresistible urge to move their wealth to safe (i.e. hidden) offshore locations, denying the governments both tax revenues and pressure to develop and build stable institutions. A US Federal Reserve official noted “The problem is not that these (latin American) countries don’t have any assets. The problem is, they’re all in Miami.” South Florida banks do not share their deposit information with Latin American countries. As a measure of the damage of capital flight, it is estimated that for every $1 given in foreign assistance $10 flows out to offshore locations at the same time. Much of the $1 itself finds its way soon enough in flight. A study estimated capital flight from 40 African countries from 1970 to 2004 at $607 Billion. Total external debt for these countries in 2004 was $227 Billion. Taken as a whole Africa is a net creditor to the rest of the world. But — “The subcontinent’s private external assets belong to a narrow relatively wealthy stratum of its population, while the public external debts are borne by the people through their governments.” Another study showed that most of Argentina’s external public debt was owed to wealthy Argentines operating offshore.
First bankers lent these countries far more than they could productively absorb; then they taught the local elites the basics of how to plunder their countries’ wealth, then conceal it, launder it, and sneak it offshore. Then the IMF helped bankers pressure these countries to service their debts under threat of financial strangulation.”
He also talks about the race to the bottom in offshore, this time including individual US states which practice a type of offshore activity by promoting lenient regulation and secrecy. All the corporations or entities need do is find some legal jurisdiction somewhere in the world to do their bidding and the rest of the world immediately jumps on board. He uses the example of the dismantling of US usury laws which were repealed first in South Dakota and then in Delaware. Most credit card issuers moved immediately to these states around 1980 and credit card issuance and debt took off. His next example involves the big four accounting firms who audit most multinational corporations books and were organized as limited partnerships. As off book subsidiaries and other accounting tricks came into common use, the big four started to worry about their personal liabilities. The collapse of Enron also destroyed their accounting firm Arthur Anderson LLP, showing the the big four had reason for concern. The big four chose Jersey to create a legal framework for organizing as limited liability partnerships. After a fight in Jersey, the law was changed and in 2001, the City of London approved the same legislation. The big four immediately converted from partnerships to LLPs.
How damaging is offshore? Between 1940 and 1971 there were no banking crisis and only 16 currency crises. Since 1971 there have been 17 banking crises and 52 currency crises. Looking back at 800 years of banking, liberalization of banking always leads to banking crises.
Who populates this offshore world. A bizarre mixture of old continental European aristocrats, Ann Rand libertarians, members of the worlds intelligence communities, global crime networks, assorted lords and ladies and bankers everywhere. Their common enemies are governments, laws, and taxes. Their code of silence rivals the Sicilians and even those who leave the world in disgust are reluctant to talk about it and refuse to reveal identities.
Carl Levin Graham at UBS
In conclusion, Shaxson believes that the richest nations can bring the off shore banking system under control even acting unilaterally, one by one. He gives the example of Carl Levin, long seeking transparency in offshore banking, who, after the departure from the Senate of Phil Graham of Texas for Swiss investment bank UBS, was able to pass a simple measure banning transfers between US banks and foreign shell banks, those operating anonymously. Overnight, thousands of shell banks were reduced to a few dozen. Levin appears repeatedly in this account for his statements and attempts to limit offshore banking.
Shaxson urges all nations to return to the original bargain made between their governments and corporations, a guarantee of limited liability for individual stakeholders and the granting to the corporation of many of the rights of the individual in return for operating transparently for the benefit of all stakeholders whether management, stockholders, customers, or suppliers, and the payment of taxes in full and without delay. Any corporation refusing to abide by the bargain should have their charters revoked and should be banned from doing business within the country. The problem with carrying this out is the degree to which the rich nations have become client states of the multinational corporation. Shaxson believes this would pose a particular difficulty in Britain where the ancient traditions of the City of London have almost always thwarted any attempts at reform. As to the threat that the multinationals will move their business elsewhere, Shaxson believes their offshore activities are so toxic to the host country that their loss may not be such a bad thing. And if the wealthy nations can deny multinational corporations and offshore banks access to their citizens and markets, the huge system would soon wither.
Here is a history of the rise and fall of information empires including telephone, radio, television, cable, film, and the Internet. It focuses on the bigger than life empire creators: Theodore Vail of the Bell telephone system, David Sarnoff of the RCA/NBC radio and television empire, Adolph Zukor of Paramount Pictures, one of the five studios comprising the movie empire, and Ted Turner of Turner cable. This history is viewed through the lens of Joseph Schumpeter’s cycle of corporate birth and death he called “Creative Destruction”. Wu argues that these empires did not crumble when a new and destructive innovation emerged but consistently exhibited the “Kronos effect” after the Greek legend of Kronos, the rule of the universe, who so worried that his children would dethrone him that he ate them.
Bell labs invented a devise to record telephone conversations in 1934 using magnetically recorded tape. This invention was so “eaten” by the Bell system that researchers only uncovered the patents in 1990. Magnetic recording which was the foundation of audio and video recording and is still the foundation of mass computer storage depend instead on German patents of a much later time.
David Sarnoff Philo Farnsworth Edwin Armstrong
FM radio was invented by Edwin Armstrong of Columbia University in 1934 in work funded by David Sarnoff of RCA. Sarnoff correctly recognized FM as a destructive technological advance and prevented its introduction until the 1970′s when it was carefully introduced under the full control of RCA. Armstrong killed himself in 1954.
Philo Farnsworth invented electronic cathode ray television in 1928 in the San Francisco bay area. Sarnoff sent his top scientist under the guise of consideration an investment to try to uncover the secrets of the invention. Rather than license or buy the patent, RCA labs spent years reinventing television. While Britain and Germany introduced broadcast television by 1935, the US did not see broadcast television until after WWII in 1946 all thanks to the efforts of Sarnoff. After extensive litigation, Sarnoff was forced to license Armstrong’s invention for $1 million in 1939. Sarnoff did prevent television from undermining his radio empire. In an incredible rewriting of history, Sarnoff has been widely recognized as the inventor of both FM and television.
John Baird
The British inventor of television, John Baird, would go on to invent high definition analog color television decades before either were introduced. For a time Baird and Armstrong teamed up in Britain but their research was destroyed in the Crystal Palace fire of 1936.
The role of government comes under scrutiny here as well particularly anti trust activity and the mostly tarnished history of the FCC which is charged with regulating communications commerce. To prevent its breakup by active anti trust activities, AT&T agreed in 1913 to divest itself of its Western Electric manufacturing arm and to become a “common carrier” a benign public utility operating in close cooperation with the government to provide universal and non discriminatory telephone service to all Americans. Thus AT&T was allowed to continue its monopoly until the 1970′s when it broke its non discriminatory vow in an attempt to kill MCI, the first real threat to its long lines monopoly. MCI built a backbone using microwave radio but needed to connect through Bell for the “last mile” connections to most customers. AT&T engaged in extensive litigation, discriminatory pricing, and finally thug tactics of damaging MCI equipment and “accidentally” dropping service connections. The Federal government finally had enough and brought anti trust action to break up AT&T in 1984 into eight regional “baby Bells” and AT&T long distance company.
Clay Whitehead Nixon’s Telecommunications Czar Breaks Up Bell
AT&T in the 1970′s had already lost the battle to prevent foreign devices from being attached to their network when the government ordered them to install standard RJ45 connecting jacks to all their phone lines. After this decision, customers were free to connect their own telephones, answering machines, facsimile machines, and data modems to their phone lines. There was an overnight explosion of equipment and services following this one simple change to the monopoly.
Today AT&T has once again consolidated itself into a near monopoly, merging five of the baby Bells into long distance AT&T. Verizon has its own long distance network and combines two East coast baby Bells. USWest merged with independent QWest to form the third regional telephone company. This new consolidation made the illegal wiretaps requested by W Bush to be implemented on a vast scale. Senator Obama voted to give AT&T and other carriers immunity from prosecution for participating in this illegal activity.
The FCC has a very tarnished record in both telephone and radio television regulation. Except for one brief moment when the FCC opened up spectrum in the early radio days, the FCC has been heavily on the side of entrenched monopolies and against innovation. They have gone out of their way to block new companies and new ideas and to make life as difficult as possible for new entrants like moving the FM spectrum for no technical reason, forcing companies and consumers to discard their old equipment and buy new. The tarnished record continues, in Wu’s view in the approval of the Comcast NBC merger and in the compromised net neutrality provisions.
Paramount’s Adolph Zukor 1929 man of the year
The early Edison film trust used its patents on projectors and cameras to create a monopoly on the early production and distribution of film. But by the 1910′s independent film companies were springing up outside of New York, particularly in Hollywood where they could quickly decamp to Mexico if the trust came after them. The Edison trust emphasis on short (ten minute), cheap (no movie stars) productions quickly fell victim to the more lavish, longer films featuring stars. Five studios emerged in Hollywood and they quickly formed a cartel controlling stars, prices, and distribution. The Hollywood cartel reached its zenith when the studios acquired ownership of virtually all theaters in the hundred largest US markets. Now they could effectively prevent the screening of independent and foreign films. The only movies seem by wide audiences from 1920 through the 1950′s were studio films. Worrying about anti trust breakup, the studio imposed on themselves a bizarre code of self censorship in an attempt to convince the government their product promoted national values and morals. This strategy worked until the late 1940′s when anti trust broke up the studios, ordering them to sell their theaters. What emerged from this breakup was the film industry we have today with producers, distributors, and exhibitors (more and more self exhibits via VHS, DVD, and now Internet streaming.
Ted Turner Television Revolutionary
The discussion of cable focuses on the television innovations of Ted Turner (Turner Classic Movies), sports, and CNN. But also emerging are MTV, ESPN, Discovery, Weather, and other specialized cable (or satellite) only channels. But he quickly turns to the attempts at conglomeration, where media companies are combined with film companies with cable companies. He covers the disastrous merger of Time Warner with the dying AOL that destroyed most of Ted Turners fortune. But he also covers the Disney mergers and worries about the effects of an NBC Comcast merger which was completed shortly after the book’s publication.
Paul Baran Inventor of the Packet Network
Vinton Cerf Bob Kahn created TCP/IP using Encapsulation
Finally, after all this history of information empires, Wu turns his attention to the Internet with a good brief history of its origins in the ARPANET. The architects reveal that the structure of the Internet was an inevitable outcome of the problem of interconnection so many incompatible machines in the Universities and government. They had to invent and impose a standard protocol TCP/IP that all computers would need to support and implement. Used initially for messaging, it was quickly understood that any digital content could be carried from point to point via the packets and the world wide web, HTML, packet voice and video were invented. Most importantly, the system is open by its very design and architecture. Proprietary computers and products can be attached and used, but the architecture of the Internet itself remains open and free.
WU asks the question that is central to the book: Will the Internet remain free and open or will it succumb to an information empire or cartel who will close the Internet to all but approved content and application? He poses two alternate visions: Apple (closed system) and Google (open system at present).
Cable companies are merging with media giants into ever larger combines with NBC Comcast as the largest yet. Today’s cable companies offer telephone service and broadband Internet in addition to their traditional television broadcasts. To access the Internet today, consumers must have service from a telephone or a cable company. There is some talk of building wireless Internet access networks (WIFI) but beyond a handful of business locations and most motels, WIFI is not a practical way for consumers to get Internet access. Will the telephone companies and cable companies close the Internet (a la China) or leave it open?
Steve Jobs, starting with the creation of the Macintosh in the 1980′s has moved apple from an open to a closed technology company. You needed a special key to open the Macintosh case and were not invited to engineer any add ons to the computer. This was a dramatic change from the Wozniak designed Apple II which was open and its engineering details available to anyone. Jobs has continued the closed designs with ever slicker desirable products including the IPOD, the IPHONE, and now the IPAD. All start with I for Internet, but Jobs view of the Internet is very different from that of open system advocates. With the IPOD, Jobs negotiate special deals with music producers to market their products via a closed ITunes store where the user can purchase a single song to download to his computer and IPOD. The entire system is closed, proprietary, and exclusive. With the IPHONE, Jobs negotiated an exclusive deal with AT&T for two years. Now the IPHONE can be used with a second carrier, Verizon. The IPHONE includes down loadable applications which must be written to Apple specifications and must be approved by Apple and are available for download only from Apple. The latest IPOD now runs many of the IPHONE applications. The IPAD, which by all accounts is another hit for Apple is available in either an IPOD or an IPHONE version. It is an IPOD, IPHONE with a bigger display. What they all have in common as far as the Internet is concerned is that access is filtered by Apple approved applications. For Wu, this is very worrying, since Apple has a propensity to make its exclusive deals with companies having inherently closed system and monopolistic histories.
Google was created as an open system at Stanford using Stanford computing resources. Their professed philosophy of “do no evil” is reminiscent of the professions of AT&T “universal affordable telephone access” and the studio’s self censorship, and NBC and CBS emphasis on values and public service. Wu argues that search is the Internet’s “master switch”, the key to finding Internet content, and that at 65% of Internet search dominance, Google easily qualifies as a monopoly. Will Google remain the benign, neutral presenter of search results or will they evolve into something more ominous? Wu finds it encouraging that Google has not used its vast resources to create access infrastructure or to buy content. They seem content to digitize libraries, offer shared videos (Youtube) and stay away from owning content.
Apple and Google Battle of the Phones
Apple and Google used to sit on one another’s boards and were quite close. When Apple showed signs of limiting Google with its approved IPHONE applications, Google countered by creating a competing and open operating system based on Linux specifically designed for mobile telephones called Android. Android is now found in a number of manufacturers phones and is being promoted openly by those manufactures as IPHONE killers. Google offers Android free of charge with the only provision that Android phones will offer unfiltered Internet access. Clearly Google is worried about monopolistic limitations on the Internet that AT&T, the cable conglomerates, and Apple may impose to limit free and unfettered access to the Internet. Google attempted to work within the constraints imposed by the Chinese government, decided this wasn’t who they were as a culture and pulled out of China. We hope, with Wu, that this remains who Google is and what they stand for. Google is today’s master switch.
The novelist is the oldest son of writer Paul Theroux who featured in the authorized biography of V.S. Naipaul. This end-of-civilization genre novel is actually quite entertaining. Civilization and human industrial life is slowly coming to an end and one of last places where humans are struggling to survive is in northern Siberia.
The main character, Makepeace, is writing an account of this life, for whom we don’t know. Makepeace is born in Siberia of American parents from Chicago who become Quakers and move to Siberia in a small group to buy land from the Russians and start a new life. The father speaks six languages but is ill suited to the harsh pioneering life of the far north. Makepeace is a survivor, a skilled gardener and hunter and a constable dedicated to keeping the peace. Makepeace’s face is badly mutilated from a lye attack, a part of a feud between the father’s group and a rival family that has moved to town.
Siberia
After a few chapters, everyone in town has died or left and Makepeace is alone. Makepeace scavenges the abandoned town for books and garden seeds. Makepeace forges bullets for the many guns used. The books are locked in the armory for safe keeping. One day Makepeace spots a Chinese throwing books out a window. When the Chinese goes to draw, what Makepeace assumes is a gun, the Chinese is shot and wounded and Makepeace discovers the Chinese is a young pregnant woman. We finally discover that Makepeace is a woman who has a wiry build, a deep voice, cuts her hair short, and wears men’s clothes to make encounters with strangers less risky. The Chinese girl, Ping, practice tai chi and acupuncture. Ping dies in childbirth along with the baby.
Siberia From Air
A depressed and lonely Makepeace sees a plane fly overhead and crash near the town killing all onboard. She decides to travel East to try to find where the plane came from hoping to find a still functioning industrial society capable of the miracle of flight. Instead she encounters a village presided over by a mad preacher who trades her to a slave caravan. The slave caravan heads southwest and stops in a fertile region at an old military base where several hundred slaves farm, garden, and generally keep the place running. Everyone eats well and Makepeace stays for several years.
Occasionally a few slaves are selected for work in the Zone which is reputed to be a manufacturing center. It is considered a great honor to be selected. Makepeace is selected as guard on a trip to deliver workers to the Zone which turns out to be due north of the base in the old town of Polyn on the 66th Parallel. The Russian had built a modern center for secret scientific research in Polyn and when they abandoned the city they left behind a permanent anthrax contaminant so the city cannot be reoccupied or scavenged. The slave workers are instructed to scavenge in the city for 24 hours and bring back scientific discoveries like fuels, seeds, and other items. The workers are then shot (they will die soon anyway) and the things scavenged will be decontaminated and returned.
Yakut Horse
Makepeace has seen enough, she steals the head guard’s horse and escapes into the city knowing the guards won’t follow her. She encounters the last slave who has found a glowing blue jar. They wait for the guards to leave then leave the city themselves. The slave and horse soon sicken and die but Makepeace, though sick, survives. Later it is rumored that the anthrax has been targeted at males only so that women can survive to breed a new generation.
Air Base Siberia
Makepeace heads for home but spots another plane heading for the base. She can’t resist, returns to the base where her old family nemesis, now living in Alaska, is brewing ethanol to refuel his plane for a trip to Polyn followed by a flight back to Alaska. He wants Makepeace to find more of the glowing jars and takes her will him. After retrieving the jars, they assume Makepeace will die anyway so they leave for Alaska. Makepeace returns home and magically has a child for whom the journal is perhaps intended.
Louis Auchincloss, author of more than 60 books was named a Living Landmark of New York. For this reader, Last of the Old Guard is his first encounter with Auchincloss. Auchincloss died on January 26, 2010.
Rough Rider Teddy Roosevelt <> Henry Adams
This novel is a bit of a tongue-in-cheek look a New York Law firm from the age of the robber barons like the Vanderbilts and Goulds, of the late 19th Century through the New Deal. The two founding partners, one, Ernest, a Scotsman and one, Addie, a Knickerbocker are classmates at Harvard studying under Henry Adams. Another classmate is Teddy Roosevelt who Addie calls Thee. Embarrassed that his father bought his way out of the Civil War, Addie, almost 40 years old, joins Teddy and the Rough Riders in the Spanish American War and later serves in an administrative capacity in WWI.
Addie, descended from Peter Stuyvesant, who socially looks down on the nouveau riche 400 of the Astors, is the social and diplomatic partner with the old name contacts, and Ernest is the smart, tough, no holds barred lawyer, assuring their robber baron clients that the courts hold no fear or threat to their empires. The novel is written as a reminiscence of the Partner’s careers with accounts of famous, sometimes scandalous cases and family secrets.
Henry James
The partners are fond of the works of Henry James but Auchincloss’ own style is very matter of fact if old fashioned. Still, worth reading for the insight into the mindsets of some true masters of the universe.
Here is an update on the activities of Mortenson, the Central Asia Institute (CAI) and his self selecting “Dirty Dozen” following up on his previous Three Cups of Tea. Greg begins with an event from 1999 while he was visiting the Charpurson Valley. He had just met Sarfraz Khan, former mujahedin fighter with a disfigured hand who is making his living trading across the mountains into the Wakhan Corridor of Afghanistan (“no much success”) when they spot a group of 14 Kirghiz (nomadic Afghan) horsemen straight out of the 13th Century riding toward them. Their leader is the young son of the Kirghiz headman and he has heard that Mortenson is in the area and has ridden across the mountains to meet him and see if he would be willing to build a school for their children. Greg is so moved that he impulsively promises their school knowing full well he can’t go into Taliban controlled Afghanistan. It takes him ten years to keep his promise.
Video by Sarfraz Khan
Greg is so impressed with Sarfraz, who speaks seven languages and whose ancestors are Waki from the Corridor, that he hires him as his remote areas project manager. Thus begins what Greg calls the closest friendship of his life.
The promise of the school and the hiring of Sarfraz are the sort of impulsive decision making that make the CAI unique among NGOs. The other unique feature is their “last place first” philosophy, probably owing its origin to the first school Greg built in Korphe Pakistan a village so remote he first had to raise more money so he could build a bridge across a river in order to transport building materials to the village. Korphe was the village that rescued and nursed Greg after his failed attempt to climb nearby K2 and its headman Haji Ali is credited with Greg’s first and best education in the area (“After 3 cups of tea you will be friends forever.”). Haji Ali wanted a school for his grandaughter Jahan Ali, who became CAIs first high school graduate. The emphasis on girl’s education Greg acquired while growing up in Africa (where his father ran a hospital near Mount Kilimanjaro) and where he learned the expression “educate a boy and you educate an individual, educate a girl and you educate a community”. Greg has observed his girl students teaching their mothers to read and write proving to him the truth of this saying.
CAI offers scholarships to the smartest girls to continue their eduction. Once offered, these scholarships can be accepted at any time in the future. One girl was unable to accept a scholarship to become a health worker because of the opposition of the local headman. She married, raised children, and ten years later, the new headman asked her to accept her scholarship. She did, received her education, and returned to her village to help pregnant woman and their babies. Childbirth and infant mortality rates in her village fell to zero. She thinks that her own experiences as a wife and mother have helped her become a better trained health worker and she is grateful for the delay. This type of patience both by CAI and the students is one of the important lessons Greg has learned from his experience.
Wakhan Corridor
After 9/11 and the US displacement of the Taliban, Greg and Safran entered the Wakhan Corridor of Afghanistan and Safran began his education of Greg into Afghan “style“. Safran not only speaks the various languages of the area, but he adapts his accent to the specific region, speaking a fast, clipped Dari in Kabul, and slowing, softening, and rounding the language as he travels further into the Corridor until he morphs seamlessly into the next language of the region. He also adjusts his dress according to region and teaches Greg to follow him. Greg must have felt a little like Sir Richard Burton, the master of disguises. Safran also taught Greg about identifying the real decision makers during a Jirga (meeting of elders) just from their subtle gestures and body language. They develop close friendships with the leaders of the Waki and Tajik groups of the Corridor as well as the border security commander, Wohid Khan, who comes to their aid time after time. They build a series of more than 20 schools in the area. Safran also taught Greg the skills of avoiding kidnapping by never revealing your destination and changing transport frequently. This also assures that the driver is familiar with local conditions. They are constantly moving large sums of money from the Kabul bank to their remote schools to pay teachers, buy supplies and pay for construction. They are never robbed.
In 2005 the report that Americans had put a Koran down the toilet in an Iraqi prison set off riots throughout the Islamic world. NGO workers fled to Kabul and their offices and abandoned vehicles were destroyed. Greg stayed put as a guest in a house where he met for the first time the headman of the Kirghiz, Abdul Rashid Khan the father of horseman Greg and Safran had met in 1999. Abdul Rashid is returning empty handed from several months in Kabul where he had hoped to get help for his isolated people. Hamid Karzi made some half hearted promises which he had no intention of keeping. Abdul Radhid had spent much of his remaining capital to finance the trip. The government eventually sent one rusted out van to the Kirghiz who have no roads. Greg is able to again promise that CAI will build a school in Kirghiz so the old man can return home with some hope. The next day Greg traveled through scenes of destruction (the NGO offices) on his way to determine the fate of his nearby school. The school stood untouched because the village elders had stood in front of it explaining that the school belongs to the village. The rioters departed elsewhere. Greg credits the CAI strategy of making sure the local community takes full pride and ownership of their own schools with saving this school in the riots. The school was not viewed as international by the elders. Again on the NGOs, Greg comments that they insist on dressing in western clothes, drive the latest SUVs complete with nine foot satellite antennas, and generally just scream rich foreigners to the impoverished Afghanis. No wonder they find themselves targets of violence and resentment.
Greg is constantly approached by people wanting schools for their villages. Among those was the desk clerk at the Kabul guest house where Safran and Greg stay when in town. The clerk is a young Pashtun, Wakil Karimi, who grew up in Pakistani refugee camps and speaks several languages including English which is how he got the guest house job. Wakil persists about his school in visit after visit and Safran and Greg get to like him for his intelligence, energy, and persistence. They offer him a job as Afghan project manager and Safran begins Wakil’s boot camp training in Afghan “style“. Wakil’s village is in Taliban country but they visit and decide to let Wakil build his school once they see that the village elders really want it.
Azad Kashmir
Then, in 2005, a massive earthquake devastates much of Pakistani controlled Kashmir. The CAI rushes to the area to see what they can do. Most schools in the area have collapsed and many students have died. The CAI manage to get some tents for temporary schools and start traveling among their tent schools to give aid and pay the teachers. They can’t rebuild schools because people are on the move, farming terraces and drinking water springs have disappeared, the students are afraid to be inside buildings, and their usual stone construction would just collapse in the next earthquake. The CAI scrounged some PVC piping and found itself restoring water supplies so the girls could stop carrying water and return to school. This infuriated some NGOs who had lucrative contracts to restore water but CAI could care less. They just wanted to get their schools functioning again and the NGOs would probably never get the job done.
Greg is always emphasizing the importance of listening. His daughter asked him one day how the earthquake victim children played. Greg thought maybe they didn’t play at all so his young daughter launched a personal effort to round up jump ropes. Mothers joined in and soon he returned to Pakistan carrying hundreds of jump ropes. They were a big success in Kashmir and soon CAI is buying jump ropes locally. Greg starts thinking that while a couple of school have play fields (for soccer), none have a playground with slides, swings, and see-saws. CAI starts adding these to their schools. He relates a story on Bill Moyer’s Journal and in this book about a group of pro Taliban elders who come to see one of CAIs schools. They spend 30 minutes playing on the playground equipment and then started to leave. Greg asked them if they don’t want to see the school. They say no, they already decided they want CAI to build them a school like this one but they insist it must have a playground.
In another instance of listening carefully, Greg finally got one traumatized girl to relate the experience of the earthquake in her tent class. When Greg asked her why so few students had returned to class she said it was because there were no desks and it didn’t seem like a school. The students somehow associated having a desk with the learning and security of school. Greg immediately set villagers to work finding salvageable desks in the school’s rubble and building new ones. The students returned to school, some even without tents sitting under a tree once the desks were available.
Greg returned home to Montana to raise more money but Safran meanwhile uncovered some Chinese engineers in Pakistan who have experience building earthquake resistant structures in Xinjiang Province China. He arranges for the Chinese to design and fabricate three schools in Xinjiang, arranges transport for the materials from Xinjiang, and sets the logistics in place to compete the schools on site in Kashmir in only one month. Lastly, (after already committing CAI to the schools without authorization) he faxes Greg in Montana for the $54k needed for the schools catching Greg by total surprise. Greg takes the schematics for the buildings which are prefabricated from wood and designed to move in a quake to a civil engineering professor in Bozeman. they are to be assembled on a floating concrete pad which can also move in the quake. They are designed to withstand a magnitude 8.2 earthquake. The professor declares the designs sound and Greg gets CAI board approval, as always, to proceed. The schools are ready for occupation in 19 days. Just another typical CAI project.
Greg comments that they encountered very few NGOs in remote Kashmir but the extremists groups including the one that later bombed Mumbai were very effective at reaching the remotest villages and setting up madrasas, extremist Islamic schools often led by illiterate teachers who have memorized a little of the Koran. They feed most effectively on remote and ignorant villagers.
Greg and Safran are terrible at dealing with bureaucracies and are busy building schools throughout the outer regions of Afghanistan without any license or sanction from the central government. They initially tried to register CAI as a NGO with the government but quickly gave up. One official contradictorily claimed 1) there are already hundreds of schools in the Wakhan (there were none); 2) the Corridor is actually a part of China (never); and 3) no one lives in the Wakhan (there are three distinct ethnic groups in the Corridor, each with several thousand members).
Wakil took upon himself the task of getting CAI an NGO license. He spent a full month in the process, finally yelling and shaming the bureaucrats into stamping his final document. Unstated but implied is the refusal of CAI ever to pay a bribe to a government official even when it is clear all other NGOs have paid bribes to get their paperwork approved. CAI stretches their dollars and can construct a typical school and fund it for five years for about $40k. In this context, the cost of even a modest bribe would be intolerable to them.
Greg knows that some of the elders that support his schools make much of their income from poppies and the drug trade. He acknowledges that there are few other opportunities to make money in Afghanistan and praises those that give most of the proceeds back to the people in the form of low cost loans, seed, and other assistance. He regrets the some Afghanis become opium addicts, the cost of which further impoverishes them.
Greg discusses his strange relationship with the US military. He was initially opposed to the US military actions in Afghanistan while welcoming the removal of the Taliban from power, allowing CAI to operate to build schools in the country. As he saw it, a single US missile costing $850k could be used instead to build 20 schools which is a far more productive use of resources.
Then the earthquake struck in Kashmir and the US military loaned a number of Chinook helicopters from Afghanistan to transport supplies in and wounded earthquake victims out and Greg came to see the now popular crews in a new humanitarian light. The crews themselves, after Iraq and Afghanistan also came to see themselves in this new popular humanitarian light and liked it.
The other strange thing that happened was that military wives came across the Parade magazine article about the CAI and started reading “Three Cups of Tea” and discussing the book at their women’s clubs. Their enthusiasm spilled over and soon their husbands, serving or having served in Afghanistan started reading the book, particularly, counter insurgence soldiers. Pretty soon, “Three Cups of Tea” was required reading in counter insurgence academies. Greg discovered all this when forward base commander Christopher Kolenda asked if CAI could build a school near his base in Kunar Province. Kunar Province certainly fits the description of an “end place” but it is also Taliban country. Nevertheless, Wakil and Safran visit Kolenda then sat down with the village elders and decided to build the school.
Soldier Invites CAI to build school in Kunar Province
Thus began a major effort by CAI to build schools across the heart of Taliban country including Kunar Province and Nangarhar Province, the location of several Al Qaeda camps that includes the now famous Tora Bora caves where Bin Laden was thought to have hidden before slipping across the border into Pakistan. For one particularly vulnerable school they convinced a respected local Mullah to be headmaster. When warnings started appearing on the school, the Mullah went directly to Taliban leaders and convinced them to leave the school alone. They did. While CAI has had a little violence and threats at their schools, none have been damaged or closed unlike many other new schools that have been closed, students and teachers killed, and girls attacked with acid. Greg attributes the difference to the strong support the schools have had from the local elders and leaders. Even though CAIs schools are secular, they receive strong support from the local Mullahs.
CAI has by now received widespread recognition. Great Britain’s Prince Charles and his wife, Camilla, visited one of the Kashmir earthquake resistant schools; Greg became the recipient of the Star of Pakistan the highest civilian award in Pakistan; Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, opened one of the Panjshir Valley schools; and Gen. David Petraeus and Gen. Stanley McCrystal are both Mortenson fans.
Admiral Mullen with Mortenson
Greg quotes Mike Mullen to show how far the military has come:
The Muslim community is a subtle world we don’t fully – and don’t always – attempt to understand. Only through a shared appreciation of the people’s culture, needs, and hopes for the future can we hope to supplant the extremist narrative. We cannot capture hearts and minds. We must engage them; we must listen to them, one heart, and one mind at a time.
Quite a contrast to the usual nightly news Neanderthal general spouting nonsense about getting the bad guys like he’s playing some kind of video game, which incidentally, is how young military minds are recruited these days – through video games.
Kirghiz porting their school
In late 2009 the nomadic Kirghiz finally got their school built on the very roof of the world at 12,500 feet. The logistics of getting materials and workers to the site required some miracle planning and an approach from three sides. Money and lighter materials like the door and window frames traveled across the Wakhan Corridor to the end of road where they were loaded onto Yaks for the three day journey to the site. Trained masons hiked over the mountain passes from the Charpurson Valley in Pakistan. A truck laden with cement, roof beams and other heavy construction material drove across Tajikistan to an old Soviet tank trail leading south toward a lake in Kirghiz. To get permission for the truck to cross Tajikistan, border commander Wohid Khan agreed to personally accompany the truck. From the lake, more Yaks and men transported the heavy materials the final 15 miles to the building site. Greg considers this his last best school even though illness has prevented him from seeing it. In fact fate has twice prevented Greg from entering Kirghiz. But after 10 long years, he has finally kept his promise.
For those wanting a good introduction of this region this book is one of the best. Greg furnishes a series of maps but it is hard to grasp the impact of all those massive mountain ranges. For a while Safran shuttled overland between Kashmir and the Wakhan Corridor to supervise his various building projects. Although the bird flight distance is only 200 miles. Safran needed to cross three different mountain ranges. For two he could drive CAIs 28 year old Land Cruiser across but for the third, into the Wakhan, he used his horse. His first horse died of exhaustion in 2006 and he acquired a new horse which is pictured in the book (They mistakenly identify the horse in the picture as the one who died, probably in the rush to publish. There are a few nonsense sentences in the book as well.). The most startling of the maps shows the ethnic distribution of the area (Pakistan and Afghanistan). There are 18 distinct ethnic groups shown here, one of which is “other” which implies there are even more groups. With the mountains and the ethnic diversity no wonder everyone is confused.
For an account of how the boundaries defining the various countries, including Afghanistan and Pakistan came to be and why Kashmir ended up in India (none of which has very much to do with ethnic boundaries) read the untold story of India’s Partition the tragedy that set off the chain of events leading to our current state. The “Great Game” between Russia and England, which contributed to the partition and boundaries predates the Cold War by a hundred years.
For a recent history of Afghanistan, the Soviet occupation, the CIA (Charlie Wilson’s War) and Pakistani intelligence backing of the Afghan mujahedin, followed by the abandonment of Afghanistan after the Soviet pullout giving rise to the Taliban read Steve Coll’s Ghost Wars.
Bomb Power; the Modern Presidency and the National Security State, Garry Wills, 2009
A tight history of the Presidency since WWII as the American constitutional form of government was transformed, according to Wills, into an unconstitutional Monarchy that would have been the envy of England’s King George III, against whom America rebelled.
He puts the origin of this transformation in the Manhattan project that created the Bomb. The realities of the nuclear era meant the need for instant decision making in the event of a nuclear attack. Instant decisions can only be made by a single individual, not a committee or a congress, and that individual must necessarily be the President. Will argues that this single reality transformed the Presidency and led to all the other unprecedented changes in peacetime American democracy, secrecy, and the activities that must be kept secret from the public including assassination, overthrow of governments, bombing of peaceful countries (Cambodia and Laos among others), special rendition, torture, surveillance of ordinary citizens, etc.
Groves and Oppenheimer
He begins with an extensive review of the organization of the ultra secret Manhattan Project directed by Gen. Leslie Richard Groves (played by Paul Newman in the film Fat Man and Little Boy). Groves had access to virtually unlimited resources with his AAA priority, including all the leading scientists in the country. He existed outside the military reporting structure and no one in that structure was allowed to even know what he was doing. He created his own air force complete with secret military bases. His three central facilities at Hanford (Plutonium enrichment), Oak Ridge (Uranium enrichment), and Los Alamos, (where the scientists were housed and where the bomb was created and assembled), covered thousands of acres each, and employed hundreds of thousands of workers, yet only a handful of people outside the facilities knew of their existence. Grove’s only restraints were imposed by his chief scientist Robert Oppenheimer, who needed an environment in which the scientists could collaborate and live in a suitable environment. This project, according to Wills, laid the foundations for the modern security state and the imperial presidency. Its primary legacy, of course, was the Bomb.
James Forrestal with Truman <> <> <> <> <> <> George Kennan
Truman gets harsh treatment here. Almost all the secret apparatus of government post WWII was created under Truman. Truman and his administration, particularly George Kennan and James Forrestal, pioneered the use of fear tactics, overstating the Soviet threat, to push through changes expanding the military and powers of the President. W was to use the same tactics after the attack of 9/11. The Presidency since WWII perfected the state of permanent emergency. After the collapse of the Soviet Union ended the cold war many thought the state of perpetual emergency had ended. W and his administration cynically used the attacks of 9/11 to recreate this state of perpetual emergency telling us we must be in constant fear of future terrorist attacks and that only the powerful President can protect us.
A strange thing about this history which probably reflects the reality of the times is the absence of attention to China and its communist takeover. The focus was totally on the Soviet threat, even when massive Chinese troops poured across the border into Korea. Ironically, the insistence of the US that Taiwan represented China on the UN Security Council and the consequence boycott of the Council by the Soviets was what allowed Truman to get the UN resolution passed by the Council that he used to justify, unconstitutionally, the Korean war.
Korea was not a UN “police action.” It was not even a UN war. It was an American war, a President’s war, Truman’s war. And Truman found out what others would learn after him, that presidential wars may be easy to start, but they are almost impossible to end.
Korea was only the first in a long line of Presidential Wars, of which we are currently engaged in two simultaneously. The last war declared by Congress was WWII.
Wills spends a lot of time on secrets, mere possession of which is a source of power and authority. He quotes Max Weber:
Every bureaucracy seeks to increase the superiority of the professionally informed by keeping their knowledge and intentions secret…The concept of the “official secret” is the specific invention of bureaucracy, and nothing is so fanatically defended by the bureaucracy as this attitude.
The problem with intelligence secrecy is that it excludes information of the real experts who are not members of the intelligence priesthood. McNamara later admitted that the administration knew very little about Vietnam as they made their decisions. Obama is repeating the same mistake in Afghanistan. The real experts are outside the sacred priesthood. We previously reviewed an excellent account of secrecy in the CIA who missed virtually every important world event since its inception.
Bobby and Jack “Let’s Kill Fidel”
Will also spends much time demonstrating that the primary purpose of secrecy and secret classification has been to cover up government malfeasance and embarrassment, to cover up incompetence more often than illegal activity. Unless documents are destroyed as in the case of the CIA experiments with LSD, the secrets are usually revealed 50 or 60 years after the fact. Thus historians are getting their first looks at the top secret military plans for reacting to a nuclear attack. FUBAR doesn’t begin to describe the incoherent and inconsistent mess they are finding. This may keep historians busy, but it does little to stop illegal activities or reveal incompetence in time to correct things. The need for secrecy is always justified by the need for national security, hence Will’s “national security state”, as a state of secrets, a government conducted in the shadows.
Henry “Hit Man” Kissinger
After the Watergate and other Nixon excesses, there was Congressional push back with increased congressional oversight and a weak attempt to regain a share of war-making authority which is under the constitution the sole responsibility of Congress. Congress passed the the War Powers Resolution, CIA oversight, and constituted the FISA court of authorize surveillance. The administrations pushed right back. According to Kissinger:
It is an act of insanity and national humiliation to have a law prohibiting the president from ordering assassination.
Wow!
W Issues Signing Statement “The Law is what I say it is.”
Push back is now instantaneous, as when W simply issued a “signing statement” that he would not enforce the McCain Anti-Torture provision, even as he signed it into law. Take that Congress!
All this executive power is hard to resist as Dick Cheney (aka Darth Vader) proved on 9/11 when, without consulting W, he unilaterally (his favorite word) assumed the powers of the President and ordered the military to shoot down a civilian aircraft UA 93. There was never an inquiry into this action.
Will sites a study by Steven Kinzer, who counted 114 cases where the US denied a country the right to choose its own government. Some involved direct and indirect American assassinations. Kinzer says the long term results of these interventions were usually damaging to the US. Virtually every President since Truman with the sole exception of Jimmy Carter was responsible for these interventions. In each case the people in the countries involved knew exactly what was happening and who was behind it. The secrecy was only for the benefit of the American public.
Where is the real Leon?
He ends on a really bright note. The Obama administration has already demonstrated an unwillingness to give up the powers accumulated by past administrations. This includes continuing special rendition and interrogations. The powers just seem to swallow everyone who assume the office. An insider, commenting on the transformation of CIA’s Leon Panetta; “Its like Invasion of the Body Snatchers.”
Dr. Michael Burry
David Einhorn
Vannever Bush
Clark Kerr
Frederick Terman
John Maynard Keynes and Harry Dexter White at Bretton Woods
Omar Bongo’s Paris
Caymans 
Hong Kong
Carl Levin 
Graham at UBS
Philo Farnsworth 
Edwin Armstrong 
