Charles Carroll of Carrollton (1737-1832), the only Catholic to sign the Declaration of Independence, also served as a diplomat to Canada, a U.S. senator and a Maryland state senator. He was the last of the signers of the Declaration to die. Bradley Birzer is the Russell Amos Kirk Chair in American history and director of American studies at Hillsdale College in Michigan. His book “American Cicero: The Life of Charles Carroll” is scheduled for release Feb. 15, and can be pre-ordered on Amazon.com.

Q: What role did Charles Carroll’s faith play in his political life?

A: A huge role. Prior to 1774, as a Marylander and a Roman Catholic, he did not have any rights except for economic rights. So his faith had shaped everything in his life. His signing of the Declaration, at least as he saw it, was intimately related to his religious faith. He said in 1829, “When I signed the Declaration of Independence, I had in view not only our independence of England but the toleration of all sects, professing the Christian religion, and communicating to them all great rights.”

Q: How exactly did Colonial Maryland persecute Catholics?

A: In November of 1689, the state’s 1649 law of tolerance was undone. Roman Catholics could practice privately after that, but they could not practice publicly. In 1704, they started closing all Catholic churches in Maryland. I think the craziest law passed in 1715. It said that children who were raised in Roman Catholic fashion could be taken from their parents and be given permanently to Protestants. But all those laws were undone in 1774.

Q: How did Charles Carroll rise to prominence in the midst of that persecution?

A: His family was the single wealthiest family in Maryland. Carroll had been abroad until 1765, being educated in Europe for 17 years. But around the time he returns, there’s a huge debate about whether or not the province of Maryland should have the Church of England as its official religion. Connected to that was whether or not the governor had the right to issue taxes or whether only an assembly had that right.

So Carroll starts writing anonymously. He takes the name First Citizen, which is ironic because he doesn’t even have his citizenship. He takes the side that only assemblies are allowed to tax. And during these debates, his reputation just explodes. And that’s what really changes public perception of Catholics – Carroll’s reputation. He becomes a critical figure. John Adams even goes so far to say that Carroll will always be remembered as one of the greats of the founding.

Q: Carroll was the last of the signers to die. What did he have to say about America at the end of his life?

A: He was so critical of what happened to the republic after the founding. He’s very critical of the democratic element in the American republic – he’s worried that self-interest and greed are replacing republican virtue. So from the late 1700s, Carroll starts being called “the hoary-headed aristocrat.” He starts to be seen as a relic of an older age. But after Carroll dies, there’s a resurgence of his reputation. All across the country, the headlines read, “The last of the Romans is dead.”

And he was one of Alexis de Tocqueville’s main informants. So there are moments in de Tocqueville’s “Democracy in America” when he is being critical of the democratic spirit, and it seems very clear to me that he is taking that from his interview with Carroll.

Q: What does history get wrong about Carroll?

A: I’m always amazed at how much our own history, especially [in] our textbooks, tends to portray the founders as merely enlightened figures. And there’s no doubt they were. But the vast majority were Christian – Franklin and Jefferson being the exceptions that so many focus on. And the American people were intensely religious, mostly Protestant, at the time of the founding. I think it’s dangerous that we secularize the founding so much. We need to know the context – we need to know what inspired them to fight for liberty.

Q: What lessons does Carroll’s life hold for American citizens today?

A: Probably the most important thing is his understanding of virtue and the necessity of education in the republic. I also think he’s a great example of someone who was raised in a pretty bad situation, at least in terms of culture, since he didn’t have legal and political rights. He turned from that and did not become bitter, but instead, I think he learned the lesson that this is wrong, and once it’s fixed for me it needs to be fixed for everyone.

Liz Essley attends Hillsdale College and was a student of Bradley Birzer’s.

 

Richard Smith, a London-based capital markets information technology manager, was kind enough to provide an advance copy of his review for the book ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism by Yves Smith, the author of the well-known financial blog Naked Capitalism.

Mr. Smith (real name, and no relation to Yves) helped in the proofing of the copy and fact searches, so he was already well familiar with the text. Perhaps this makes him a not entirely dispassionate source, given the regard that even copy editors can obtain for their associated works. But I thought it was a very nice summary of many of the salient points, and that you would enjoy having the opportunity to read it.

I intend to read the book in order to both learn something, and to be entertained as well. I love reading accounts of this period of time that are both authoritative and well-written, and understandable by the non-expert. Given the author’s performance on her blog, and her detailed industry knowledge and experience, it looks to be a ‘must read’ for those following the financial crisis and its associated developments.

Reading ECONned
By Richard Smith

http://jessescrossroadscafe.blogspot.com/2010/03/guest-post-econned-book-review.html

 

Once the most famous and influential African American in the United States (and probably the world), Booker T. Washington has earned at best mixed reviews in the decades since his death in 1915. Black intellectuals and political activists, from W. E. B. Du Bois to the present day, have generally seen Washington as a conservative racial accommodationist, yielding to the repressive power of Jim Crow and urging American blacks to abandon their political struggles for equality and instead to set their sights on a future of manual labor and petty property ownership.

Nothing brought Washington more notoriety than the speech that he delivered in 1895 at the Cotton States and International Exposition in Atlanta when, before a racially mixed audience, he appeared to acquiesce to the imperatives of legal segregation (“in all things purely social we can be as separate as the fingers”) while encouraging African Americans to “cast down your buckets” in the Jim Crow South. Although he is still read in college (and some high school) classes, usually against Du Bois, and remains in the pantheon of black historical figures, Washington is widely ridiculed and derided in black communities for his seemingly shameless pursuit of white favor. For many, he is the classic “Uncle Tom.” Even his most distinguished biographer, Louis R. Harlan, could not do much better than find at Washington’s core a drive for personal power and a penchant for political manipulation. And now that we are in the Age of Obama, when a man of African descent who set his sights on higher education and threw himself into grassroots politics–in short, who did many of the things that Washing-
ton advised against–has been elected president of the United States, do we really need to reacquaint ourselves with the likes of Booker T. Washington? Do his life and views any longer have meaning for us? Do we need another biography?

We Now Have a Black President. Was Booker T. Washington Wrong? Steven Hahn

 

By the time of Trajan in 117 AD, the denarius was only about 85 percent silver, down from Augustus’s 95 percent. By the age of Marcus Aurelius, in 180, it was down to about 75 percent silver. In Septimius’s time it had dropped to 60 percent, and Caracalla evened it off at 50/50. read more…

 

The expansion of international “supply chains” from Asian factories to American consumers has certainly created global trade imbalances and international currency flows that are not necessarily sustainable over the long run. A readjustment of the world economy, not a slackening demand for inexpensive consumer products, strikes me as the greatest threat to the Wal-Mart business model. And, for its part, the chain is already adapting to new circumstances. In recent years, Wal-Mart has expanded well beyond the borders of North America into Europe, Mexico and Asia. It imports factory goods from China and also operates its own retail stores there. But the stores look very different from their American counterparts. In Kunming, near the border with Myanmar, Wal-Mart rents space inside its store to independent vendors, who pay $1.20 per day to hawk Yunnan coffee, tobacco bongs filled with local rice wine and condiments made from eggplant, soybeans and ginger. The atmosphere is “festival-like, even chaotic,” as vendors shout out their wares, sometimes through loudspeakers or while pounding on drums, and customers crowd a stall to fish pears out of a solution of sugar, salt and licorice root–”a Wal-Mart store sans Wal-Martism,” according to sociologist Eileen Otis. Another Chinese employee explains his loyalty to the company by suggesting that Sam Walton was, in fact, a student of Chairman Mao who “adopted the revolutionary strategy of ‘the countryside encircling the city.’&nthinsp;” And so the revolution continues.

How Wal-Mart’s Ruthlessness Led to Its Undoing – Jefferson Decker, Nation

 

Book Review: The Myth of the Rational Market

July 14th, 2009

 

By Ravi Nagarajan

While there have been countless books written regarding Warren Buffett’s track record in business and investing, along with many books of variable quality seeking to find formulas to replicate his success, there are only two full fledged biographies that have been written:  The Making of an American Capitalist by Roger Lowenstein and The Snowball by Alice Schroeder.

Lowenstein’s book was published in 1995 and I read it shortly after it came out.  Along with reading The Intelligent Investor around the same time, Lowenstein’s work was an inspiration for me to pursue a more careful study of value investing.  Schroeder’s book was published in 2008 after several years of work that included unprecedented access to Buffett’s private papers and circle of business and personal contacts.  I have read The Snowball as well and found it very insightful.  In my opinion, students of Buffett should first read Lowenstein and then proceed to Schroeder.  However, which book should be selected for those who only intend to read one biography on Warren Buffett?

Which Buffett biography should you read? (Manual of Ideas)

 

think not, but that is part of the fun. The reader can collect information — raw data — with real confidence. There will be many accounts of the financial crisis. Anyone seeking a complete understanding should consult many sources.

The Approach

Street Fighters tells an engaging tale focused upon how a mighty firm was reduced to rubble in three days. You know the ending before you start reading, but it is no less engaging. The author has a nice sense of the characters and has done extensive research into backgrounds. We not only learn about the major players, we learn what everyone else thought about them.

Such an approach is open to challenge. Kelly provides footnotes for sources, and acknowledges disagreement. It is convincing support for her narrative.

The Result

The reader is treated to a view from several perspectives. It is an insider’s take on the politics within an investment bank. There is genuine conflict over risk and which products to feature. Even the most jaded reader may have some sympathy for a wealthy guy who spent a lifetime building up his company and his position, only to lose it all in a few days. This is “inside baseball” at its best.

The story is dramatic and well-told.

Assorted Insights

The reader has raw data to draw conclusions on several interesting points. Here are some that stood out for us. Yours might be different. Please consider the following:

  • Significance of CNBC. David Faber had a story about firms not trading with Bear. It was big news, but it was later denied by those in question. The damage was already done. The issue is how much information one needs to go with a story like this, when the story itself can affect the outcome. Should Faber have verified more completely before going with this story? Would it have made a difference?
  • Significance of Kelly and the WSJ. Many readers will already be familiar with the three-part series in the Wall Street Journal. In the book, Kelly asserts that the series itself — criticizing Cayne’s leadership — had an impact within the firm.
  • Hank Paulson’s Role. Paulson is portrayed as dictating a punishingly low stock price for Bear. Historians will combine this information with additional information, includeing his reversal on the use of TARP funds, the decision to force TARP on all of the major banks, and other similar decisions. From our perspective as public policy experts, this is an extraordinary and arbitrary use of powers. It is on a scale that is without precedent for a Treasury Secretary.
  • The Fed Role. The decision of the Fed to expand lending to include investment banks, only two days after the Bear failure, was extremely arbitrary with respect to timing. We should all be concerned when public officials make decisions about which firms (and which investors) live or die, and do so without clear rationale. Bear was allowed to die while others were saved.

Conclusions

Kelly’s conclusion is that Ace Greenberg built a firm on some principles and Jimmy Cayne violated those and lost it all. We are not convinced.

We can now see what happened to many other firms. It would not have mattered if Bear’s leverage and risk had been a little less. Kelly is probably right in suggesting that Bear was an unloved firm on the Street, and therefore first to be challenged.

It was beyond her scope to consider other causes, although there is a paragraph or two on the trading in Bear stock. This was something we watched daily on our trading screen. Those betting against the firm could trade in the thin Credit Default Swaps market (CDS), buy puts (where premiums exploded in issues that were far out of the money), short the stock, pull your hedge fund accounts, and spread rumors.

These events were all taking place. The sequence of causation will never be determined. What we do know is that any business depending upon confidence and credit can be destroyed in three days. Those aiding the destruction can make millions as it happens. If that is a verdict on a business model, the entire banking industry is in question.

Final Take

The book is fun to read and has plenty of raw data with authoritative sources. You should read it, and combine what you learn with other information. The story of the 2008 crisis is complicated. We look forward to reviewing other books on the subject.

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In order to do this book review, I have to compare the book to five others that I have reviewed.

  1. Trend Following, (2), (3), (4), (5)
  2. Beat the Market: Invest by Knowing What Stocks to Buy and What Stocks to Sell
  3. The Fundamental Index
  4. The Alchemy of Finance, and Soros on Soros
  5. What Works on Wall Street

I chose these five, because they deal with factors that affect stock performance. With 1 and 4, you can learn a great deal about price momentum. With 4, you learn how price momentum and mean reversion interact, and even get taste of why even fundamentalists should grab onto this.

Today’s book, Quantitative Strategies for Achieving Alpha, takes a mix of factors, including price momentum, and attempts to show how investors can achieve above average returns. That is similar to what was posited in books 2 and 3 in rudimentary ways, and in book 5 in more sophisticated ways. The book that is most similar to this book is What Works on Wall Street. More on that later.

The author has seven “basics” that must be applied to all investments:

  1. Profitability
  2. Valuation
  3. Cash Flow
  4. Growth
  5. Capital Allocation
  6. Price Momentum
  7. Red Flags

These are the building blocks of good investment strategies, and the best strategies use 2 or more of the “basics.” This is consistent with the book What Works on Wall Street. The most important “basics” are Profitability, Valuation, Cash Flow, and Price Momentum. Good strategies will look at most of them.

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Book reviews of “Street Fighters” and “Quantitative Strategies for Achieving Alpha” (Dash of Insight, Aleph Blog)