We are overdue today for another wave of creative thinking about everything—politics, the culture, education and morality. But this time, hold the roaring.
By Daniel Henninger January 2, 2020
If time travel were real, nearly half the U.S. population—and all the Democrats—would ship Donald Trump back to the Roaring ’20s, an era presumably more in sync with his instinct for creative outrage. But voters then would have been as startled by Mr. Trump’s political personality as voters now. Despite the dawn of the Flapper Age, their taste in presidents ran more toward Warren G. Harding, elected in 1920, whom no one would mistake for Donald J. Trump.
Harding’s campaign slogan was “a return to normalcy.” When he died in office 2½ years later, his successor was the uber-normal Calvin Coolidge, who won election on his own in 1924.
Other than the American presidency, though, the 1920s were in no way normal. In the U.S. and much of the world, the decade witnessed a remarkable economic and industrial boom. If we’re going to compare the ’20s then to the ’20s being born this week, an economic footnote is in order about a main cause of the first “roaring.”
When the 16th Amendment created the personal income tax in 1913, the original top marginal rate was 7%. By 1920 it was 77%, in part because of the Great War.
At the urging of Treasury Secretary Andrew Mellon, Congress enacted tax cuts in 1921, 1924 and 1926, with the top rate falling in middle-decade to 25% on incomes above $100,000. Prosperity followed, just as it did after the Kennedy tax cuts in the 1960s, Reagan’s reductions in the 1980s, and today—undeniably—after the Trump corporate rate cut of 2017. As in the 1920s, the consumer is again king, with disposable income available to buy an innovative economy’s extraordinary array of new products.
Pessimists say the Great Depression silenced the 1920s’ roar. It did, and some of its lessons deserve mention.
This is an article you have to read as there is so much new information in it regarding China and how our financial markets are being used to finance China’s expansion of their technological and military advances. Nancy
Roger W. Robinson, Jr.
Chairman, Prague Security Studies Institute
Roger W. Robinson, Jr. is president and CEO of RWR Advisory Group and co-founder and chairman of the Prague Security Studies Institute. He earned a B.A. from Duke University and an M.A. from George Washington University. He served as senior director of international economic affairs on President Reagan’s National Security Council, where he was the principal architect of the secret economic and financial strategy that proved decisive to the defeat of the Soviet Union. He later served as chairman of the Congressional U.S.-China Economic and Security Review Commission. Prior to his government service, he was a vice president in the international department of the Chase Manhattan Bank.
The following is adapted from a speech delivered at Hillsdale College on September 9, 2019, during a conference on the topic, “Understanding China.”
In the early 1980s, I served on President Reagan’s National Security Council. Prior to my time at the White House, I was a vice president at Chase Manhattan Bank, in charge of its USSR and Eastern Europe division. It was my job to assess the creditworthiness of the countries in that part of the world, and I had come to realize that the Soviet Union had relatively modest hard currency income—and that what little it had came largely from the West.
In 1982, the Soviets had an empire stretching from Havana to Hanoi, but their hard currency revenue totaled only about $32 billion a year—roughly one-third the annual revenue of General Motors at the time. They were spending about $16 billion more annually than they were making, with the funding gap—the USSR’s life support—being financed by Western governments and banks.
President Reagan had long believed that the Soviet Union was economically vulnerable, because he knew it lacked the entrepreneurship, technological dynamism, and freedoms that are the prerequisites of a strong modern economy. And when he learned that we in the West were financing its brutal regime, he committed to slowing, and ultimately terminating, that flow of discretionary cash.
Our European allies had a completely different approach. Their belief in Ostpolitik, as the Germans called it, presupposed that commercial bridge-building would lead to geopolitical cooperation. If the West would offer financing and trade with the Soviets, peace and prosperity would result. Meanwhile, the Soviets were using the proceeds of Western loans, hard currency revenue streams, and technological support to build up their military, expand their empire, and engage in anti-Western activities.
The Reagan administration drew the line on a project called the Siberian Gas Pipeline, a 3,600-mile twin-strand pipeline that stretched from Siberia into the Western European gas grid. If completed, not only would it become the centerpiece of the Soviets’ hard currency earnings structure, but Western Europe would become dependent on the USSR for over 70 percent of its natural gas, weakening Western Europe’s ties to the U.S. and leaving the continent open to Kremlin extortion. Moreover, the pipeline was being financed on taxpayer-subsidized terms, since France and Germany viewed the USSR as a less developed country worthy of below-market interest rates.
The U.S. at the time had a monopoly on oil and gas technology that could drill through permafrost—which we had developed for Alaska’s North Slope—and we imposed oil and gas equipment sanctions on the USSR and European companies that were helping to build the Siberian pipeline. At one point, despite the strain it placed on relations with our NATO allies, we closed the U.S. market entirely to companies that continued to supply the pipeline project over our objections. Four of the six affected companies went under within six months, and Europeans woke up to the fact that they could do business with us or the Soviets, but not both.
As a result of these efforts we capped Soviet gas deliveries to Western Europe at 30 percent of total supplies, delayed the first strand of the pipeline by years and killed the second strand, and eventually helped dry up the bulk of Western credits to the USSR. In a secret deal, we also persuaded the Saudis to pump an additional two million barrels of oil per day and decontrolled prices at the wellhead in this country, knocking oil prices down to about $10 a barrel—significant because for every dollar decrease in the price of a barrel, the Soviets lost some 500 million to one billion dollars. In short, the Soviet Union never recovered from these economic and financial blows. It defaulted on some $96 billion in Western hard currency debt shortly before the total collapse of the Soviet empire.
The story with China today has certain similarities, but with one big difference: the U.S. has been playing the role of the naïve Europeans. Since adopting the Kissinger policy of engaging with China in the 1970s, our government has operated on the assumption that economic and financial relations with China would lead Beijing to liberalize politically. And since 2001, when we backed China’s entry into the World Trade Organization, the pace at which we have given China access to our best technology and capital and trade markets has accelerated. Yet China has shown no signs of embracing individual freedoms or the rule of law.
Instead, with our support, the Chinese have launched a massive campaign to become the world’s leading superpower. We know about the “Belt and Road Initiative,” a strategic undertaking to place huge segments of the world under China’s influence or outright control. We know about “Made in China 2025,” a strategy designed to dominate key technology sectors—from artificial intelligence and quantum computing to hypersonic missiles and 5G. We know about China’s practice of forced technology transfers: requiring American companies to share their trade secrets and R&D in order to do business in China. We know about China’s predatory trade practices. We know many of these things only because President Trump has brought them to the forefront of national attention, for which he deserves credit. And the ongoing tariff war is a good thing in the sense that we’ve finally begun to take a stand.
This is an excellent video that explains exactly how Democratic Socialism, Socialism, and Communism are all connected. Dr. Kengor is speaking to a group of Young Americans at the Reagan Ranch. Please share with your email lists. Nancy
From your friends at the Institute for Faith and Freedom
What is “democratic socialism” and what makes it different than socialism or communism? In a speech at the Ronald Reagan Ranch in Santa Barbara, CA, Dr. Paul Kengor unpacks this complex leftist ideology, putting all the pieces on the table.
Click here to watch this video on our website to get the facts you need to have:
VIDEO – MARK LEVIN ON SEAN HANNITY, FRIDAY, MARCH 29, 2019
Mark Levin gives a very informative history of how past Democrat presidents (FDR, Woodrow Wilson, Johnson, Kennedy, and Obama used their powers to spy on their political enemies by using the IRS, the Justice Department and the FBI. He questions how it could be possible that Obama did not know that his people in the Justice Department, the FBI and the IRS (remember the IRS intimidating the tea party groups during the Obama Administration) were targeting President Trump. Mark Levin also talks about the role that the media has played in covering up this whole sordid coup against President Trump Nancy
The Mark Levin segment on the Hannity video begins at 22:18
Watch–Nancy Pelosi: New Immigrants Must Not Have Their Votes Suppressed
House Speaker Nancy Pelosi (D-CA) said the United States must not suppress the vote of newly arrived legal immigrants — including those foreign nationals who arrive en masse at the U.S.-Mexico border.
by Charles R. Kesler Editor, Claremont Review of Books
Charles R. Kesler is the Dengler-Dykema Distinguished Professor of Government at Claremont McKenna College and editor of the Claremont Review of Books. He earned his bachelor’s degree in social studies and his A.M. and Ph.D. in government from Harvard University. A senior fellow at the Claremont Institute for the Study of Statesmanship and Political Philosophy and a recipient of the 2018 Bradley Prize, he is the editor of several books, including Keeping the Tablets: Modern American Conservative Thought(with William F. Buckley Jr.), and the author of I Am the Change: Barack Obama and the Future of Liberalism.
The following is adapted from a lecture delivered at Hillsdale College on September 27, 2018, during a two-week teaching residency as a Eugene C. Pulliam Distinguished Visiting Fellow in Journalism.
EXCERPT FROM THIS ARTICLE : Until the 1960s, most liberals believed it was inevitable that their living Constitution would replace the conservative Constitution through a kind of slow-motion evolution. But during the sixties, the so-called New Left abandoned evolution for revolution, and partly in reaction to that, defenders of the old Constitution began not merely to fight back, but to call for a return to America’s first principles. By seeking to revolve back to the starting point, conservatives proved to be Newtonians after all—and also, in a way, revolutionaries, since the original meaning of revolution is to return to where you began, as a celestial body revolves in the heavens.
The conservative campaign against the inevitable victory of the living Constitution gained steam as a campaign against the gradual or sudden disappearance of limited government and of republican virtue in our political life. And when it became clear, by the late 1970s and 1980s, that the conservatives weren’t going away, the cold civil war was on.
Trevor Loudon speaks of the Far Left in our government and how they work with the Marxists and the Islamists. He names influential members of congress and those running for congressional seats in last weeks election. Absolutely frightening. Please share with your email lists. Nancy
Charles R. Kesler is the Dengler-Dykema Distinguished Professor of Government at Claremont McKenna College and editor of the Claremont Review of Books. He earned his bachelor’s degree in social studies and his A.M. and Ph.D. in government from Harvard University. A senior fellow at the Claremont Institute for the Study of Statesmanship and Political Philosophy and a recipient of the 2018 Bradley Prize, he is the editor of several books, including Keeping the Tablets: Modern American Conservative Thought(with William F. Buckley Jr.), and the author of I Am the Change: Barack Obama and the Future of Liberalism.