from The Great Debate UK:
Greenspan and the curse of counterfactual
- Laurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own. -
Suppose that, instead of appeasing Nazi dictator Adolf Hitler at Munich in 1938, Neville Chamberlain had taken Britain to war, what would today’s history books say about the episode?
It is of course impossible to know. Perhaps something along the lines: “the British prime minister’s stubborn refusal to compromise resulted in a war which dragged on for 6 months at a cost of over 300,000 lives.....” Make up your own scenario.
We can never know. But we can be 100 percent certain the history books would NOT now say anything like: “by refusing to appease the dictators, Neville Chamberlain saved more than 30 million lives, prevented the division of Europe and saved the world from 40 years of Cold War”.
In the same way, we can be absolutely sure that, if former Federal Reserve Chairman Alan Greenspan had raised interest rates and tightened credit in 2005 or 2006, putting a stop to the lending boom before it could become a risk to the banking system as a whole, he would not today be feted as the man who saved the world from the worst financial crisis in 60 years.
More likely, opinion would be divided over whether the ensuing recession, with the loss of maybe 1 percent of GDP and 100,000 jobs, was at all necessary.
Critics would have called for Greenspan’s head and possibly even for the Fed to lose its independence, while the defence would have been left lamely quoting the famous dictum of a previous chairman that it is the job of the Fed to take away the punchbowl just as the party gets going.
from The Great Debate UK:
September 1939 and the outbreak of war
- Terry Charman is Senior Historian at the Imperial War Museum in London. He studied Modern History and Politics at the University of Reading and while there interviewed Adolf Hitler's architect Albert Speer. He specializes in the political, diplomatic, social and cultural aspects of the World Wars, and wrote "The German Home Front 1939-1945" and "Outbreak 1939: The World Goes To War". He is curator of the exhibition Outbreak 1939 at the museum. The opinions expressed are his own. -
In September 1939, in marked contrast to August 1914, Britain went to war in a sombre mood of resigned acceptance of the inevitable. There was no Union Jack waving “hurrah” patriotism as there had been twenty-five years before. After Adolf Hitler had torn up the Munich Agreement in March 1939 and invaded the Czech lands, the British people recognized that appeasement had failed and that the German leader’s aggressive plans would have to be stopped, and if necessary by force of arms.
On September 3, 1939, when Prime Minister Neville Chamberlain announced on the radio that Britain was at war with Germany, for many the news came as a relief from the tension of the past few weeks and months. An anonymous diarist noted: “Even horrible certainty seems better to me than uncertainty.”
While in Bradford a young man of military age wrote in his diary: “I don’t think I’m sorry to die so that Hitler will be crushed, but I do want a final peace this time, without constant crises.” Chamberlain’s over-personal broadcast-“you can imagine what a bitter blow it is to me...”-was hardly a rousing call to arms, and it was followed almost immediately by the wailing of air raid sirens.
Many people thought that they were heralding a devastating air raid that had been dreaded for so long. That morning, writer George Beardmore experienced a sensation of utter panic. He, like so many others, had seen the film “Things to Come” and remembered all “the dire prophecies of scientists, journalists and even politicians of the devastation that would follow the first air raid.”
In the event, it was a false alarm and somehow wholly symptomatic the rest of 1939. These were the months which novelist Evelyn Waugh was to later describe as “that odd, dead period before the Churchillian renaissance”, but at the time was called the “Phoney War”. There were no great battles on the Western Front, and it was not until 9th December that the first British soldier, Corporal Thomas Priday, was killed in action, a victim of “friendly fire”.
After an abortive attack on German warships on 4th September, the Royal Air Force confined itself to dropping aerial propaganda leaflets on Germany.“Fighting with bloody pamphlets” was one sour comment recorded that autumn about the enterprise. Only the Royal Navy, under Churchill’s energetic and aggressive leadership as First Lord of the Admiralty, seemed to be taking the war seriously, tackling the combined threat from German U Boats, surface raiders and magnetic mines.
The British were left adrift by Chamberlain in terms of defense. They literally had no means with which to conduct a war against Hitler. And Chamberlain certainly conveyed a defeatist attitude throughout the runup to the war.Churchill took over at a time when the British were at low ebb, with no real hope for a military buildup significant enough and quickly enough to hold off the Nazis. It was really a hopeless situation.But, by bringing in the old warhorse Churchill, they did exactly the right thing. And Churchill was able to rally the Brits, engage FDR and the Americans, and begin the process of ramping up the British military strength, based largely on American military transfers (probably illegal at the time, but handled deftly by FDR.)The final impetus was given by the Japanese attack on Pearl harbor, which turned around the isolationist tenor in America and allowed FDR to declare a war on Japan (and soon after, on Germany) where a few months earlier that would’ve been political suicide.As the American industrial base was turned from consumer goods to war goods, the two nations — England and America — slowly became a giant German adversary, based largely on an amazing buildup of American war production, and eventually defeated the Axis powers in a long and costly war (the government-mandated and -funded manufacturing buildup for which, incidently, became the major cause of America finally climbing out of the ’30s depression.)But, all of that came after December, 1941. The years of ’39, ’40, and ’41 before that were grim indeed for England, and it was only the force of Churchill’s public speeches to rally a very desolate English people, and Churchill’s bulldog determination that kept the British Isles afloat until America could enter the war.
All we need is Banker’s salary/bonus should be consistent to other sectors. Huge bonus makes them greedy and force them doing creative accounting to boost bonus. We need to stop all bonuses, if they want to go away, they are most welcome. There will be no shortages of bankers in this job market.
Actually government and we the general public are responsible for their activities. We made them too greedy. In developing countries bankers doesn’t have those benefits,yet doing their job.
So I’m agree with Laurence and want lower payments for bankers. If they need more money, they are most welcome to leave job and do their own business. Only then they will realize life is not a bed of roses.