Watching History Happen

So Iceland's financial system collapsed over the weekend and the Icelandic government went hunting for a quick loan. Fifty years ago -- hell, ten years ago -- it likely would have turned first to the U.S. for the money. Not now.

So who did it turn to? Russia. And this country -- and the world -- have reached a historical turning point. The political alliances that have guided global politics since World War II are crumbling. The president of the U.S. may still be the "leader of the free world," but it may no longer matter.

McCain? Obama? Time to crawl out of the slime-pit and tell Americans what your plan is for dealing with this new reality.

History And The American Economy: Where Have We Been? Where Should We Go? Part 2 of 5

Part One --- Part Two --- Part Three --- Part Four --- Part Five In the early 20th century (around 1900), the economy shifted to what historians call a "consumer" economy. The engine of growth came from making goods purchased directly by consumers: New technologies like refrigerators and radios, as well as makeup, perfume, soap, cars, movies, curtains, and plumbing fixtures.

But in the mid-1920s, an economic meltdown began in western Europe in the mid-1920s, and soon spread to every part of the globe. The event we now call the Great Depression landed in the U.S. c. 1930 in the form of massive numbers of home and farm foreclosures, bank failures, and bankruptcies. In 1932, Americans elected Franklin Roosevelt as president, hoping he would fulfill his promise of a "New Deal" to repair and rebuild the economy.

The New Deal was designed to "prime the pump"; to put money back into people's pockets so they could get back to buying shoes, furniture, and clothes. Its programs can be divided into two main groups (this is a rough generalization). One set of programs rebuilt and strengthened the structural underpinnings of the economy.

Examples include Social Security and the Federal Deposit Insurance Corporation (FDIC), both of which are still with us. The FDIC, for example, protects money people have in bank savings accounts. If the bank fails, you still have your money, and you can participate in the consumption that keeps the economy going. Social Security was originally designed to provide a way for older Americans to retire with an income, so that even after they stopped working, they would spend money and contribute to the consumer economy.

The second set of programs were aimed at the nation's immediate crisis: Unemployment. The logic was simple. When businesses fail, they lay off workers; those workers can no longer spend money on things like shoes and furniture.

So the federal government began using tax revenues to create jobs.(*1) The jobs were offered and created by New Deal agencies such as the Public Works Administration, the Works Progress Administration, and the Civilian Conservation Corps. These agencies hired Americans to build dams, repair bridges, paint murals, landscape public parks. People went to work every day, earned a paycheck, and thus were able to buy food and other goods.

And the projects produced tangible results: new roads, new dams, and so forth. The Tennessee Valley Authority, for example, generated thousands of jobs for workers who built a massive hydroelectric system that brought electricity to millions of rural Americans who didn't have it.

Next up: the American economy after the Great Depression.

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*1: That, by the way, is why the president and Congress moved so quickly to legalize beer even while Prohibition was still in effect: brewers would contribute huge amounts of badly needed tax dollars.

Historical Tidbits: Beer. The "Rise" of Miller Brewing

It's rare that the presence or absence of one person makes a historical difference (I said "rare," not impossible). But I think that the death of Fred C. Miller in 1954 altered the course of American brewing. Miller was aggressive, ambitious, smart -- all on a grand scale. He was the first beermaker to come along in decades who showed the potential to go head-to-head with the Busch family, particularly Gus Busch, who ran A-B from the late 1940s until the mid-1970s.

Miller became company president in 1947, and over the next few years, he shoved, pushed, prodded, and otherwise steered his family's brewing company not-much-of-anything into the ranks of the top ten. But in late 1954, he died (in a plane crash) -- and Miller Brewing lost its way.

As Miller faltered, A-B solidified its position as the dominant player in American brewing. Had Fred Miller not died, I believe the course of American brewing would have turned out differently: Fred Miller would have transformed his family's company into a formidable powerhouse. He would have challenged A-B's dominance. He would have been able to command-and-direct in a way that, for example, Bob Uihlein was not able to do at Schlitz during the same period.

Put another way, in the 1950s, Gus Busch met his match in Fred C. Miller. Things might have turned out differently had Miller lived

. I can't prove that, of course, but hey -- what's all that research good for if I can't express an informed opinion.

Anyway -- consider the shifting brewery rankings and brewery outputs from the mid-1940s on:

1945:

  # 1 brewer: Anheuser-Busch (3.7 million bbl.)

# 16: Miller (729,000 bbl)

1946:

1: Pabst (3.3 million bbl)

17: Miller (644,000 bbl)

1947:

  1: Schlitz (3.9 million bbl)

20: Miller (806,000 bbl; Fred C. becomes company president)

1948:

1: Schlitz (4.2 million bbl)

19: Miller (911,000 bbl)

1949:

1: Schlitz (4.6 million)

11: Miller (1.3 million)

1950:

  1: Schlitz (5 million)

8: Miller (2.1 million)

1951:

1: Schlitz (5.7 million)

6: Miller (2.1 million)

1952:

: Anheuser-Busch (6 million)

5: Miller (3 million)

1953: 1

: A-B (6.7 million; A-B would hold onto number one rank into next century)

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8: Miller (2.1 million; Fred's one mistake: A strike during this year shut down his only plant; his major competitors all had multiple plants and could keep brewing.)

1957:

1: A-B (6.1 million)

10: Miller (2.3 million)

1958:

  1: A-B (6.9 million)

10: Miller (2.3 million)

1961:

1: A-B (8.5 million)

10: Miller (2.7 million)

1962:

1: A-B (9 million)

10: Miller (2.8 million)

1971:

  1. A-B (24.3 million)

6: Miller (5.2 million; Miller now wholly owned by Philip Morris, which dumped billions into the company

. 1972:

1: A-B: (26.5 million)

8: Miller: (5.4 million)

1975:

1. A-B (35.2 million)

4: Miller (12.9 million; in February, Miller introduced Miller Lite)

1978:

1: A-B (41.6 million; about what Miller made in 2007!)

2. Miller (31.2 million)

1980:

1: A-B (50.2 million)

2. Miller (37.3 million)

The rest, as they say, is history. By c. 2000, A-B was nearing 100 million barrels a year; Miller hovered around 40 million. In late 2007, Miller's new parent company, SABMiller, and MolsonCoors, the parent of Coors Brewing, announced they would merge their North American operations in a joint venture called MillerCoors.

Reading In A Wired World

In July, the New York Times began a series that examines reading in a wired world -- how/why/if reading is changing, and the implications of those changes. Part Two in the series ran today. You can read it here. Here's Part One. And here's my comment on Part One.

As I noted in my first piece, I'm a reader and have been since I was four. But it's not lost on me that what constitutes "reading" is changing and that people who grew up with computers and the internet think about reading differently than someone my age. (Old.)

History And The American Economy: Where Have We Been? Where Should We Go? Part 1 of 5

Part One --- Part Two --- Part Three --- Part Four --- Part Five As I've noted before, I'm a fan of Thomas Friedman, and in particular his call for a "green" economy. He argues that the climate crisis is real, it demands our immediate attention, and that repairing the crisis will, can, and should stimulate the American economy. Going green will produce jobs and fix the planet. (*1)

The New York Times recently ran a piece about one aspect of the shift to a green economy: Silicon Valley venture capitalists are investing money in green enterprises designed to transform American energy use, demands, and needs. It's worth reading, if only because, as the author points out, too often we think about fundamental economic change/repairs in terms of government leadership, whether through federally funded research or through subsidies.

As this article points out, however, private investors aren't waiting for government. They're already investing in this new engine of economic growth.

It's a fascinating piece, but of course I'm a historian, and I think both it and Friedman's plea for a green economy will make more sense if we can place them in historical context. Ditto for the current meltdown and various other problems plaguing our country and the planet.

So, let's take a tour of American economic history.

After the American Revolution and up to about 1870 or so, Americans focused on settling and transforming the continent: Moving west to the Mississippi, and laying out towns and farms. Land speculation. Building canals that could carry grain and other raw materials. Manufacturing on a small scale. They also began laying the groundwork of a metals- and machine-tool based manufacturing sector.

In the late nineteenth century, starting about 1870 (give or take), the pace of "industrialization" accelerated. There are lots of reasons: Inventors developed a way to make steel in large quantities. Foreign investors dumped billions into the American economy. The pace of railroad construction accelerated. Etc.

Historians describe the late nineteenth century as an era of a "producer" economy: Economic growth (and jobs) came from making things like railroad ties, engines (first steam and then internal combustion), machine tools, electrical wire. Yes, Americans also manufactured fabric, shoes, food, and furniture, but the fuel for growth was the manufacture of basic producer goods, the kind of stuff needed to build an infrastructure.

Next time: the shift from a producer economy to a consumer economy. [As always, I'm breaking this into multiple parts not so I hope you'll come back (although I do!), but because I'm aware that most people's days are broken into ten-minute increments. Ya got ten minutes today. You'll have another ten tomorrow.........]

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*1: See in particular his new book Hot, Flat, and Crowded.

Character Assassination = "Country First"?

The McCain campaign has announced its new strategy for the waning weeks of the campaign: " . . . McCain spokesman Tucker Bounds told FOX News they would continue to point out Obama's 'associations that are questionable and point to his character and his judgment.'" (*1)

But didn't McCain say that his campaign puts "country first"? Sounds more like his campaign is resorting to character assassination.

How does that put "country first"? And can a person's "character" really be reduced to occasional encounters with people who live in your town or city? Isn't "character" the result of a lifetime time of deliberate choices? Isn't "character" the sum of our ideas, our actions, our hard-won wisdom?

If McCain truly wants to put "country first," perhaps he ought to ponder the words of Dr. King: "I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character." (*2)

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*1: Source: McCain campaign spokesperson Tucker Bounds speaking on Fox News, October 4, 2008. Emphasis added.

2: Martin Luther King, "I Have A Dream" speech, August 28, 1963. Emphasis added.