U.S. PRESIDENT, NY GOVERNOR | One Weak, One Strong

March 30, 2020—The President denied the gravity of the crisis and stuck with his free-market message. The Governor of New York State understood the crisis and took action at once. The Governor was a stronger leader than the President, or any other Governor. The President tried to squash the New York Governor, and failed. Aghast at looking like a wimp, the President took decisive action against a vulnerable group that desperately needed help. The President's callousness backfired and from then on, the President's reelection prospects were doomed.

Hoover (L) and FDR, March 1933

The context, of course, was October 29, 1929. After dropping 5 percent the day before, the NYSE index dropped another 20 percent on what is called Black Tuesday. GOP President Herbert Hoover announced that this was a temporary blip and that the economy was “sound and prosperous.” 

However, the market persisted with its decline  and by mid-1932 it was a mere 17 percent of its September 1929 peak. By early 1933, 45 percent of all farm mortgages and 40 percent of home mortgages were in default. 

Hoover's excessive optimism and lack of action was noted in early 1930 by New York State's Labor Commissioner, Frances Perkins. When Hoover said the job market was rebounding, she observed that the Bureau of Labor Statistics data did not support this statement, and the January 1930 job numbers had deteriorated. Governor Franklin Roosevelt believed Perkins, and told her so, and in March 1930, he created the first state commission on employment in the country. He then became the first Governor to support the idea of unemployment insurance. Hoover said in May that the worst was over, but Governor Roosevelt told Democrats at their annual dinner at the Commodore Hotel (now the Grand Hyatt Hotel) that he disagreed and that Hoover's crowd just didn’t care about the impact of the crisis on vulnerable members of the public. The next speaker called for FDR's reelection as Governor.

Hoover (L) and FDR, March 1933

In 1930, the GOP put up racket-busting Charles Tuttle to oppose FDR's reelection as Governor (until the Constitution was revised in 1938, New York's Governors were elected every two years). Tuttle attacked FDR for not repudiating Tammany Hall. Hoover sent three Cabinet members—(1) the Oklahoman Secretary of State, (2) a New Yorker who was Secretary of War, and (3) the Undersecretary and later Secretary of the Treasury, New Yorker Ogden Mills—to support Tuttle and attack FDR. 

FDR ignored Tuttle's attacks and instead stuck with promoting his programs for unemployment insurance and old-age pensions. Not until three days before the election did he address Tuttle's attacks on him for being too close to Tammany Hall. He said he would address the charges in the courts, where they could be proven, and not in the newspapers. He attacked one of the visiting spokesmen for Hoover as a carpetbagging outsider and the other two as defeated candidates for Governor who had already been rejected by the State. “We of the Empire State can take care of ourselves,” said FDR. Tammany’s Jim Farley meanwhile delivered the most lopsided victory of any New York Governor.

So FDR had some momentum in 1932 when he took on Hoover, who botched his reelection effort by looking savage when he should have looked kind, and vice versa. Having shown himself as a ditherer on the economy, Hoover decided to look strong by sending in the U.S. Army to rout the unarmed veterans who were assembled to ask for early payment of World War I bonuses. At the order of Secretary of War Patrick Hurley, General Douglas MacArthur led cavalry and tanks to force with tear gas the decampment of unemployed World War I veterans. The troops burned the makeshift shelters. The Capitol's Republican newspaper said: “If the Army must be called out to make war on unarmed citizens, this is no longer America.”

Meanwhile, Hoover was gentle where he should have been tough. To calm the financial markets, he needed to reassure the financial community that his Treasury policies would continue whether or not Hoover himself was reelected. He therefore asked FDR to commit himself to certain free- market and sound-money principles, though he knew that such a commitment would be incompatible with FDR’s New Deal proposals. FDR waited more than a week to respond, and then coolly replied to Hoover that it was too late for “mere statements,” showing Hoover up as too weak to take needed action. FDR stuck to that line right up to the inauguration, despite Hoover's rising panic as banks folded, gold flowed out to Europe, and unemployment rose, making the runup to the election and inauguration as disruptive as it could be. A good administrator, but not a leader, Hoover was helpless as tragedy washed over the country.

FDR beat Hoover in a huge landslide in 1932. The day before the inauguration, Hoover  told FDR, who had suggested calling on someone, “You will learn that the President of the United States calls on nobody.” FDR and Hoover famously rode together to FDR's inauguration. Hoover asked a favor of the President, to keep on a member of his staff. FDR was mostly silent. The two of them never again met.

After his first press conference, FDR paid a call to the I Street home of retired Supreme Court Justice Oliver Wendell Holmes, whose birthday it was, and asked Holmes for advice, thereby ignoring Hoover's advice. FDR took the advice of Holmes, who said, as a veteran of the Union Army: “Mr. President, you are in a war. Form your battalions and fight.”

The Great Depression, but not poverty, ended within weeks of the arrival of FDR, as the nation recognized that someone was in charge and people started going back to work. Key elements were: (1) Treasury Secretary William H. Woodin’s commandeering of the Bureau of Engraving and Printing to produce greenbacks, pack them up for the banks, send off the trucks to the banks, and film the entire process for the newsreels in movie theaters during the following weeks, all across the country. (2) President Roosevelt’s Fireside Chats, which showed that someone competent was in charge and that people could be confident that the country would get through the crisis. 

FDR showed public relations genius as well as an acute understanding of the nature of the problem the country faced and how it could be. He put a Republican CEO in charge of implementing the practical steps to address the panic and then rebuild the country. He told Will Woodin to handle the task of getting money out to the banks, while he crafted his Fireside Chats. The financial system they created lasted for 70 years. FDR's social safety net is still with us.

The story resonates today, as we watch President Donald J. Trump interface with Governor Andrew Cuomo. History doesn't repeat itself, but it often rhymes. 

P.S. (May 16, 2020) ProPublica, a nonprofit investigative news source, argues that in crucial days in early March, Governor Andrew Cuomo and Mayor Bill de Blasio were slow to listen to their health experts. The story contrasts New York State with California, which had a friendlier relationship between Governor and Mayor (or San Francisco) and lost fewer lives to the coronavirus. The story is long and full of details. It succeeds most effectively at conveying the difficulty of trying to make the right decision about something unexpected when there are legitimate arguments on both sides about how best to proceed (the health experts did not always agree).  https://www.propublica.org/article/two-coasts-one-virus-how-new-york-suffered-nearly-10-times-the-number-of-deaths-as-california

ECO-HERO | William Ruckelshaus, 1932-2019

Obama awards Ruckelshaus (1932-2019) the Medal
of Freedom, the highest U.S. civilian honor.

William D. Ruckelshaus died yesterday. He is someone I have looked up to all my life. In 1955 I entered Portsmouth Abbey (then Priory) School, in Rhode Island, four years after he graduated.

He was at Princeton, class of 1957, when I was at Portsmouth. He was enrolled at Harvard's Law School for two of the four years I was a Harvard undergraduate.

As a young lawyer in the 1960s, Ruckelshaus became a savior of Portsmouth Abbey School. With a Federal law suit, he fended off the siting of an oil refinery on Prudence Island in Narragansett Bay, opposite the school. He eventually slayed, or at least kept at bay, that oil company dragon.

It was not surprising that President Richard Nixon would appoint him, as a 38-year-old  lawyer, to lead the new Environmental Protection Agency in 1970-73 – or that he would return under President Ronald Reagan to run the EPA again in 1983-85. Ruckelshaus was a Republican and a conservationist by family tradition.  His grandfather was Chairman of the Indiana Republican Party in 1900.

What was surprising was Ruckelshaus's becoming one of the two heroes of the 1973 "Saturday Night Massacre". He had been recruited from his perch at the EPA by Attorney General Elliot L. Richardson to become the AG's top deputy. The Watergate prosecutor, Archibald Cox, had subpoenaed nine White House tapes. On October 23, Nixon ordered Richardson to fire Cox. Richardson refused and resigned. The order then went to Ruckelshaus, as next in command. Ruckelshaus also refused and resigned.

The third in command, Robert H. Bork, then followed orders, firing Cox and abolished the office of Watergate prosecutor.

The next day, 300,000 telegrams of outrage descended on the White House. Nixon decided to release the nine tapes after all. Three GOP members of the House Judiciary Committee who had voted against Nixon's impeachment–Reps. Charles Sandman (N.J.), Charles Wiggins (Calif.) and David Dennis (Ind.)–reversed themselves after hearing the tapes. They said they would vote for impeachment on the floor of the House. Nixon resigned before that could happen.

Not long after the Massacre, when Ruckelshaus was back in private practice of law, he kindly took me to lunch at the Hay-Adams Hotel to share with me his front-row experience of the events. In describing the President, he used the term "Unindicted Co-conspirator." I was deeply impressed with his courage and serenity in the face of all he had been through.

In the years that followed, it became clear in news reports that Ruckelshaus was increasingly distressed at the steady decline of the progressive wing of the Republican party. He ended up supporting Barack Obama for President and supported Hillary Clinton over Donald Trump.

Ronald Reagan once said that the didn't leave the Democratic Party; it left him. Ruckelshaus expressed similar sentiments about the Republican Party.

President Obama awarded Ruckelshaus the Medal of Freedom in 2015 for his environmental achievements. The race to succeed Obama was already under way and Donald Trump and Senator Marco Rubio were sparring for the GOP nomination. A few days before the Medal of Freedom ceremony, the Guardian interviewed Ruckelshaus and quoted him as follows:

"The Republicans aren’t helping, they are just responding to the convictions of the base that climate change isn’t a real problem and feeding that back to them – it’s a vicious cycle. Instead of treating it as a serious problem they are going through all the stages of denial. They are now at the stage of saying that it’s too expensive to do anything about climate change, which is no solution at all, they may as well just deny it’s a problem.

“I don’t know what Trump actually knows about climate change, I don’t think Trump thinks much about many of the issues. Rubio shifts around a lot because he hears a lot of different messages from his constituents but what he’s essentially saying is that climate change isn’t a big enough problem to address. That comes down to not dealing with it. It’s concerning and I don’t understand why they don’t see this as an opportunity rather than something to be denied.

“There was huge resistance from the auto industry, they pushed back very hard. The difference from then until now is that the public demanded something be done about pollution and the government listened. The four major auto companies sent their CEOs to lobby against the Clean Air Act and they got about three votes in the Senate and not many more in the House. They thought they’d get it reversed in the Senate.

“In those days you could smell and touch the pollution, it was a bit like how China’s cities are today. That had a galvanizing effect. The greenhouse gases of today, you can’t see or taste or feel them. And it’s got way too partisan. The atmosphere today is completely different to the 1970s; Republicans’ arguments are all partisan driven, they aren’t based on any legitimate analysis of science.”

Some Presidents' Records on the Environment, Since Nixon

President Nixon. In 1970, green issues then had bipartisan support. Clean Air Act amendments to the original 1963 Act created the EPA, William Ruckelshaus became its first head, and new water-pollution laws were passed after two years. But  OPEC's decision to create an oil shortage meant that inflation cascaded through private and public prices and economic concerns overtook environmental ones. The GOP took on the mantle of environmental deregulation in the name of promoting economic growth, although significant instances of environmental progress have occurred under Republican leaders since Nixon.

President Reagan. He cut social and environmental budgets, including one-third of EPA spending, but in his second term he noted the high cost of ozone-depleting chlorofluorocarbon (CFC) gases and he promoted a worldwide reduction via the 1987 Montreal Protocol. This Protocol has been described as the most successful international convention ever, signed by 197 countries and the European Union, and it has stopped the growth of the ozone hole although some aerosol substitutes, such as hydrofluorocarbons, continue to contribute to global warming even though they don't damage the ozone layer.

President George W. Bush. During most of his administration, Bush 43 was, like Reagan, antagonistic to environmental regulation. He did support greater energy efficiency. Also, toward the end of his presidency he championed significant conservation initiatives that became law.

President Barack Obama. Obama made solid appointments–Steven Chu as Secretary of Energy and Lisa Jackson as Environmental Protection Agency Administrator. He supported climate-change proposals at Copenhagen. He put energy efficiency and renewable energy on state agendas, with a $90 billion investment in green jobs in the stimulus bill, encouraging states and localities to focus on needed environmental initiatives. His EPA twice raised auto fuel-efficiency standards, using Nixon's Clean Air Act as the basis for the EPA's higher Corporate Average Fuel Economy ("CAFE") standards, first requiring 35.5 mpg fuel efficiency by 2016 and then 54 mpg by 2025. He regulated carbon emissions under the Clean Air Act. His EPA won a major victory in June 2012 when the U.S. Court of Appeals unanimously affirmed EPA's ruling in 2009 in favor of  measures to regulate carbon emissions. He saved the U.S. auto industry and its technology-generating capacity, keeping the United States as a strong player in electric-car technology and in the campaign to generate more efficient batteries. He used federal purchasing power to reduce carbon emissions.  He supported four rounds of the ARPA-E program for energy technology research. The Advanced Research Projects Agency made awards for research on electrofuels, carbon capture, batteries, electric grid, thermal energy storage, and rare earth substitutes. Obama faced the BP oil spill early in his first term, which discouraged offshore oil drilling. The Fukushima nuclear meltdown discouraged further nuclear power development, constraining his options. Most important, the Republican House of Representatives adopted a totally negative stance, especially after the 2010 Midterm elections,  toward the President's climate-change goals.

HAPPY YEAR OF THE DOG | Good Luck Year, But Not for Trump

Happy Chinese New Year!

It will be the Year of the Dog in the zodiac calendar. It is the Year of the Earth Dog. (The twelve years of the zodiac cycle within a larger 48-year cycle governed by the four ancient elements, fire, water, earth, air, similar to the length of the Kondratiev cycle.)

This can be a lucky year, because the dog is loyal. But it is an unlucky year for those born in a prior Year of the Dog.

Donald Trump was born in such a prior year, 1946 (he, Bill Clinton and George W. Bush were born within three months of each other).

Those who take the feng shui of the zodiac calendar seriously are predicting that Trump will have bad luck in this year, from February 16, 2018 through the beginning of the next year in February 2019, which will start the year of the pig.