Monthly Archives: August 2008
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Volume 24, Number 11
The New Deal Debunked
Thomas J. DiLorenzo
Macroeconomic model builders have finally realized what Henry Hazlitt and John T. Flynn (among others) knew in the 1930s: FDR’s New Deal made the Great Depression longer and deeper. It is a myth that Franklin D. Roosevelt “got us out of the Depression” and “saved capitalism from itself,” as generations of Americans have been taught by the state’s education establishment.
This realization on the part of macroeconomists comes in the form of an article in the August 2004 Journal of Political Economy entitled “New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis,” by UCLA economists Harold L. Cole and Lee E. Ohanian. This is a big deal, since the JPE is arguably the top academic economics journal in the world.
“Real gross domestic product per adult, which was 39 percent below trend at the trough of the Depression in 1933, remained 27 percent below trend in 1939,” the authors write. And, “Similarly, private hours worked were 27 percent below trend in 1933 and remained 21 percent below trend in 1939.”
This should be no surprise to anyone who has studied the reality of the Great Depression, for US Census Bureau statistics show that the official unemployment rate was still 17.2 percent in 1939 despite seven years of “economic salvation” at the hands of the Roosevelt administration (the normal, pre-Depression unemployment rate was about 3 percent). Per capita GDP was lower in 1939 than in 1929 ($847 vs. $857), as were personal consumption expenditures ($67.6 billion vs. $78.9 billion), according to Census Bureau data. Net private investment was minus $3.1 billion from 1930–1940.
Cole and Ohanian write as though they were surprised—even shocked—to discover these facts, not so much because they were bamboozled by the Myth of the New Deal, but because of their devotion to “neoclassical model building” as opposed to the study of economic reality. They label as “striking” the fact that the recovery from the Great Depression was “very weak” (a dramatic understatement). And why is it so striking? Because “[t]hese data contrast sharply with neoclassical theory.”
The neoclassical theory of depressions might well be thought of as a Frankenstein’s Monster theory. As explained by Cole and Ohanian, “The weak recovery is puzzling because the large negative shocks that some economists believe caused the 1929–33 downturn—including monetary shocks, productivity shocks, and banking shocks—become positive after 1933.” Thus, according to neoclassical theory, the economy during a depression is somewhat like a prostrate Frankenstein’s Monster, with economists playing the role of mad scientists who “shock” the beast into becoming a living being once again. They do this with various “injections” of government spending or easy credit that will supposedly cause a “roaring” recovery (just as the rejuvenated beast roared as he left the laboratory to terrorize the townsfolk in the movie, Young Frankenstein).
“The monetary base increases more than 100 percent between 1933 and 1939,” the authors write, making the case that such a “monetary shock” should have returned the economy to normalcy. They invoke the authority of well-known macroeconomists Robert Lucas and Leonard Rapping, who once proclaimed that “positive monetary shocks should have produced a strong recovery, with employment returning to its normal levels by 1936.”
But as Murray Rothbard showed in America’s Great Depression, it was the easy money policies of the early and mid-1920s that created all the malinvestment that was the trigger for the Great Depression. The only wise thing to have done was to allow the liquidation of hundreds of overcapitalized businesses to occur. Instead, the Fed increased the monetary base by 100 percent in five years, causing more of the same overcapitalization problems that were the source of the problem in the first place.
On top of that, virtually every single one of FDR’s “New Deal” policies made things even worse and prolonged the Depression. Austrian economists have known this for decades, but at least the neoclassical model builders have finally caught on—we can hope.
Cole and Ohanian apparently emerged from the rarified world of macroeconomic model building for a long enough period of time to discover that the so-called First New Deal (1933–1934) was one giant cartel scheme, whereby the government attempted to enforce cartel pricing and output reductions in hundreds of industries and in agriculture. This of course was well documented in John T. Flynn’s book, The Roosevelt Myth, first published in 1948. Henry Hazlitt had also written about it some 15 years earlier. “New Deal cartelization policies are a key factor behind the weak recovery, accounting for about 60 percent of the difference between actual output and trend output,” the authors write.
The fact that it has taken “mainstream” neoclassical economists so long to recognize this fact is truly astounding. For generations their own neoclassical textbooks have taught that cartels “restrict output” to raise prices. It has also been no secret that the heart and soul of the First New Deal was to use the coercive powers of government to prop up wages and prices by cartelizing the entire economy.
FDR and his advisors mistakenly believed that the Depression was caused by low prices, therefore, high prices—enforced by threats of violence, coercion and intimidation by the state—would be the “solution.” Moreover, it is hardly a secret that if less production takes place, fewer workers will be needed by employers and unemployment will subsequently be higher. Thus, the First New Deal could not possibly have been anything but a gigantic unemployment-producing scheme according to standard neoclassical economic theory.
FDR’s tripling of taxes, his regulation of business, and his relentless antibusiness propaganda also contributed to a worsening of the Great Depression, but his labor policies were probably the most harmful to the employment prospects of American workers. In this regard the most disappointing thing about the Cole-Ohanian article is that they do not even cite the pioneering work of Richard Vedder and Lowell Gallaway—Out of Work: Unemployment and Government in Twentieth-Century America—first published in 1993.
Indeed, it is somewhat scandalous that they do not cite this well-known work while making essentially the same arguments that Vedder and Gallaway do. They recite many of the same facts about labor policy: The NIRA codes established minimum wages for less-skilled and higher-skilled workers alike; employers were told that they must bargain collectively with unions, which were given myriad legislated advantages in the bargaining process, all enforced by the newly-created National Labor Relations Board. All of these policies made labor more expensive. Consequently, as the economic law of demand informs us, the inevitable result has to be less employment.
Strike activity doubled from 14 million strike days in 1936 to 28 million a year later, and wages rose by about 15 percent in 1937 alone. The union/nonunion wage differential increased from 5 percent in 1933 to 23 percent by 1940. Newly-enacted Social Security payroll and unemployment insurance taxes made employment even more expensive. What all of this means is that during a period of weak or declining derived demand for labor, government policy pushed up the price of labor very significantly, causing employers to purchase less and less of it.
Vedder and Gallaway conducted an econometric evaluation of these labor cost-increasing policies and concluded that most of the abnormal unemployment of the 1930s would have been avoided were it not for these policies. They estimated that by 1940 the unemployment rate was eight percentage points higher than it would have been without the legislation-induced growth of unionism and government-mandated employment costs. They conclude that “The Great Depression was very significantly prolonged in both its duration and its magnitude by the impact of New Deal programs” (p. 141).
Cole and Ohanian reach the exact same conclusions, but express them in the somewhat convoluted language of the “top economic journals”: “New Deal labor and industrial policies did not lift the economy out of the Depression. . . . Instead, the joint policies of increasing labor’s bargaining power and linking collusion with paying high wages prevented a normal recovery by creating rents and an inefficient insider-outsider friction that raised wages significantly and restricted employment . . . the abandonment of these policies coincided with the strong economic recovery of the 1940s.”
This last conclusion—that the abandonment of FDR’s policies “coincided” with the recovery of the 1940s is very well documented by another author who is also ignored by Cole and Ohanian, Robert Higgs. In “Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War” (Independent Review, Spring 1997), Higgs showed that it was the relative neutering of New Deal policies, along with a reduction (in absolute dollars) of the federal budget from $98.4 billion in 1945 to $33 billion in 1948, that brought forth the economic recovery. Private-sector production increased by almost one-third in 1946 alone, as private capital investment increased for the first time in 18 years.
In short, it was capitalism that finally ended the Great Depression, not FDR’s harebrained cartel, wage- increasing, unionizing, and welfare state expanding policies. It’s good to see that the Journal of Political Economy, the University of Chicago, and UCLA are finally beginning to catch up to the libertarian scholarship of Richard Vedder, Lowell Gallaway, Robert Higgs, Jim Powell (author of FDR’s Folly) and such predecessors of theirs as Henry Hazlitt, John T. Flynn, Murray Rothbard, F.A. Hayek, William H. Hutt, Benjamin Anderson, and others associated with the Austrian School.
Better late than never.
Thomas J. DiLorenzo is professor of economics at Loyola College in Maryland and author of The Real Lincoln (Three Rivers Press/Random House, 2003). His latest book is How Capitalism Saved America: The Untold History of Our Country, From the Pilgrims to the Present (Crown Forum/Random House, 2004) (tomd@ mises.org).
1 Gary North, Political Polytheism (Tyler, TX: Institute for Christian Economics, 1989), xxii.
2 Gary DeMar, “The Religion of Evolution,” Biblical Worldview (October 2002).
3 William Blackstone, Commentaries on the Laws of England, 4 vols. (Chicago: The University of Chicago Press, [1765–1769] 1979), 1:38, 41, 42.
4 Joseph R. Biden, Jr., “Law and Natural Law: Questions for Judge Thomas,” The Washington Post (September 8, 1991), C-1.
5 John Stott, Involvement: Being a Responsible Christian in a Non-Christian Society, 2 vols. (Old Tappan, NJ: Fleming H. Revell, 1984, 1985), 1:23. Emphasis added.
6 Finney, quoted from “Letters on Revivals—No. 23,” The Oberlin Evangelist (n.d.) in Donald Dayton, Discovering an Evangelical Heritage (New York: Harper & Row, 1976), 21.
7 George M. Marsden, Fundamentalism and American Culture: The Shaping of Twentieth Century Evangelicalism, 1870–1925 (New York: Oxford University Press, 1980), 252, note 5.
8 Finney, quoted from “Letters on Revivals—No. 23 in Dayton, Discovering an Evangelical Heritage, 20.
Now Discover the Reality Behind the Rhetoric
“Outstanding exposé of the ultimate political opportunist. From his ultra-liberal views to his multitude of shady associates, this book gives a glimpse of the man behind the messiah mask.”
“My liberal grandmother is reading The Case Against Barack Obama, and is almost choking over her sharp inhales.”
In The Case Against Barack Obama: The Unlikely Rise and Unexamined Agenda of the Media’s Favorite Candidate, investigative journalist and National Review Online political reporter David Freddoso removes the gilt from the golden candidate, exposing Obama for who he really is: the #1 most liberal U.S. senator whose policies and inexperience could put our country in serious jeopardy.
Like any convincing argument, Freddoso supports The Case Against Barack Obama with sound evidence and facts. Delving into Obama’s legislative record, interviewing his colleagues, and analyzing Obama’s books and speeches, Freddoso does the research that the media has neglected. His conclusion? Obama the Orator is very different from Obama the Legislator. From his history of supporting corrupt Chicago politics to his extreme liberal voting record, The Case Against Barack Obama proves that Obama is not the politician of “change”, but the politician of status quo.
In this shocking exposé, Freddoso builds his case by revealing what the nightly news hasn’t told you, including:
- Obama’s extensive connections to corrupt Chicago politics—while he claims to be a reformer
- Obama’s plans to increase taxes—amid rising fuel and food prices, he just voted to raise taxes for anyone making more than $32,000
- Obama’s dangerous mix of inexperience and poor judgment—evident in his shifting policy positions and the Rev. Wright scandal
- Obama’s radical voting record—he repeatedly voted against legislation to protect babies born alive during failed abortions
No doubt there will be other books about Barack Obama, but The Case Against Barack Obama is the first comprehensive and critical look at the man who would be president. Freddoso builds a rock-solid case against Obama’s “bipartisan reformer” façade, going where most journalists—and books—refuse to tread.
|Signs in the Heavens Return for the Umpteenth Time|
By Thomas Sowell
http://www.JewishWorldReview.com | Random thoughts on the passing scene:Government bailouts are like potato chips: You can’t stop with just one.
Anyone who is honest with himself and with others knows that there is not a snow ball’s chance in hell to have an honest dialogue about race.
I wonder what radical feminists make of the fact that it was men who created the rule of “women and children first” when it came to rescuing people from life-threatening emergencies.
Barack Obama’s motto “Change you can believe in” has acquired a new meaning‘ changing his positions is the only thing you can believe in. His campaign began with a huge change in the image he projects, compared to what he was doing for 20 years before.
Despite the New York Yankees’ awesome record over the years, no one has ever made 3,000 hits in his career as a Yankee, nor has any pitcher ever had 300 lifetime victories with the Yankees. Despite their well-deserved reputation as “the Bronx Bombers,” there is only one Yankee among the top ten career homerun hitters.
After getting DVDs of old “Perry Mason” TV programs and old “Law & Order” programs, I found myself watching far more of the “Perry Mason” series. The difference is that too many “Law & Order” programs tried to raise my consciousness on social issues, as if that is their role or their competence.
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What is amazing this year is how many people have bought the fundamentally childish notion that, if you don’t like the way things are going, the answer is to write a blank check for generic “change,” empowering someone chosen not on the basis of any track record but on the basis of his skill with words.
With all the big-name entertainers who have put on shows in prisons, why have so few put on shows for our troops in Iraq?
To me, the phrase “glass ceiling” is an insult to my intelligence. What does the word “glass” mean, in this context, except that you can’t see it? Yet I am supposed to believe it without evidence because, otherwise, I will be considered a bad person and called names.
When New York Times writer Linda Greenhouse recently declared the 1987 confirmation hearings for Judge Robert Bork “both fair and profound,” it was as close to a declaration of moral bankruptcy as possible. Those hearings were a triumph of character assassination by politicians with no character of their own. The country is still paying the price, as potential judicial nominees decline to be nominated and then smeared on nationwide television.
Some of the most emotionally powerful words are undefined, such as “social justice,” “a living wage,” “price gouging” or a “fragile” environment, for example. Such terms are especially valuable to politicians during an election year, for these terms can attract the votes of people who mean very different‘ and even mutually contradictory‘ things when they use these words.
It may not be possible to have machines call balls and strikes in baseball, since the vertical strike zone depends on the height of each batter. But a machine can tell whether any part of the ball passed over any part of the plate, so that umpires won’t be able to call their own “wide strikes” any more.
It is hard to get the supporters of Barack Obama to give a coherent reason for their support. The basis for their support seems to be guilt, gullibility or‘ in the case of some conservatives‘ a hatred of John McCain.
It is heart-warming to see the Williams sisters maturing as people. They made tennis history from the beginning but they had a lot to learn about human relations‘ and now they seem to have learned it.
How many in the media have expressed half as much outrage about the beheading of innocent people by terrorists in Iraq as they have about the captured terrorists held at Guantanamo not being treated as nicely as they think they should be?
Although most of the mainstream media are still swooning over Barack Obama, a few critics are calling the things he advocates “naive.” But that assumes that he is trying to solve the country’s problems. If he is trying to solve his own problem of getting elected, then he is telling the voters just what they want to hear. That is not naive but shrewd and cynical.
***Weekend With Felicia***
August 7, 2008
As far back as I can remember, the Games were supposed to be about a friendly gathering of nations’ athletes to compete for the title of the world’s greatest athlete in various sports. The Games are not to show the world how crass and smothering a nation can be.
It would seem to be the case as athletes from around the world make their way to China and upon arriving, find a not so hospitable welcome. Such is the case of the US Cycling Team as they decided to bring their own smog masks ahead of landing in China. In doing so, they angered Chinese authorities and ended up apologizing to Chinese officials for a simple act as safeguarding their health.
As President Bush makes his way to China for the Opening Ceremonies, the issue of China’s dismal human rights record was on his mind. In Bangkok, Thailand, President Bush said, “The US believes the people of China deserve the fundamental liberty that is the natural right of all human beings.”
China shot back, saying, “We firmly oppose any words or acts that interfere in other countries’ internal affairs, using human rights and religion and other issues.”
China’s approach to handling the 2008 Olympic Games is a testimony to how a Communist regime handles business. Everyone else in the world is to butt out, and regular oppressive measures are taken against their people (however subtle they seem at first glimpse). Those who dare speak out suffer dire consequences.
China started early, jailing those who would be trouble before the Games. Hu Jia, a well-known activist in China was imprisoned in April because the First Intermediate People’s Court in Beijing believed he would be trouble to “the state’s political and socialist systems.” He is among the many protesters jailed for daring to speak their mind.
So called “protest parks” have been set up to protest China’s policies. But what good will these “parks” do if those who wish to air their grievances cannot do so because they are in prison?
There was even a crackdown on international media attending the games. The international media arriving in China were given booklets and instructions on what they were to do if they wanted to interview someone in China. They must first obtain permission.
The security for the 2008 Olympic Games in China seems to rival the security of the 2004 Games in Athens. Chinese officials say it is out of concern for terrorism, but also, it could be used to keep tabs on every individual walking around that may engage in some “nefarious” activity Chinese officials don’t like.
Don’t try to come to China and hand out political information or information about another religion on the street. You are likely to catch hell for that.
Already protesters from the United States have attempted to make their voice heard among the people of China. Some protesters were bold enough to make their way up a large pole, managing to post a banner that read, “One World, One Dream, Free Tibet.” They were quickly detained by police.
No matter how much China has tried to show the world that it is somehow “moving forward”…that it values capitalism and trade, communism is still the country’s way of life. Communist countries are no different than countries ruled by extreme regimes, dictators that oppress their people.
I am reminded of the comment by notorious Nikita Khrushchev of Russia:
“We can’t expect the American People to jump from Capitalism to Communism, but we can assist their elected leaders in giving them small doses of Socialism, until they awaken one day to find that they have Communism.” — Khrushchev
Nikita Khrushchev was not a dictator, but relished the thought of communism as it is something that is eventually pushed on a populace, granting the powerful ultimate control.
As one can see from many instances in China, communism is not yet dead. And considering Khrushchev’s comment above, it could very well hit the shores of America if we are not wise to see it.
But this year, as the Olympics debut in Beijing, China communism is on full parade. It is an oppressive model that civilized nations and civilized people must refuse as many have done in the past. Remember Tiananmen Square? Protesters are not being challenged by tanks in the street or slaughtered unmercifully in the open as they were in 1989, but freedom of speech is limited in China.
China cannot use the Olympic Games as a cover up to show that they are willing to open their arms to the world when their human rights record has been challenged many a time. And others will keep challenging the country to change their ways as they should, until significant change has been done.
To be a host country for the Olympic Games, the Olympic spirit of friendly competition and treating all people of the world the same as he/she were your brother or sister, cannot exist in China unless Chinese officials stop their oppressive tactics on those who wish to see positive change.
Bush chides Beijing over rights
Clandestine Olympic protests
**Must Read: China’s voices of dissent
Felicia Benamon is a conservative columnist who writes from a political perspective, but occasionally deviates to write about other concerns facing her country. A patriotic American, Felicia hopes to motivate others to be more conscious of the current state of affairs in America, and to hold true to the wonderful traditions that make America great.
Felicia comes from a military background and is proud to support the men and women who put their lives on the line daily to protect American citizens and who reach out to help those in need across the globe.
Write to Felicia at: FeliciasDesk@aol.com
© Copyright 2008 by Felicia Benamon
By Gary DeMar
The latest economic proposal coming from Barak Obama is a socialist’s dream. The president-in-waiting wants to steal money from oil companies and, in an act of blessedness and benevolence, give a check of $1,000 to American “middle class” families, hoping, of course, that more people will vote for him in the upcoming election. The ripple effect of Obamanomics would be a disaster. Retirement portfolios would be hit hard since $10.1 billion was paid to shareholders in the form of dividends and stock buybacks by the oil companies. With profits down, exploration for new oil would be jeopardized. Supply and demand, something Obamanomics does not believe in, would be hit hard. With shortened supplies, prices would rise further with fewer profits, and the cycle would continue downward. Once downturn effects were felt in every economic sector, Obama Hood will look for new streams of income. He might go after the industry you work for. It’s easy being a benefactor with someone else’s money.
Obamanomics has been described as Robin Hood economics, taking from the rich to give to the poor. Actually, Robin Hood took back from the king (and in some traditions of the story from corrupt clergymen) what had been taken from the people by the government. In terms of popular culture’s understanding of Robin Hood, mostly through the Robin Hood movies and TV series (too many to list here but see the 1938 Adventures of Robin Hood starring Earl Flynn, Claude Rains, and Basil Rathbone; also see here and order here), the archer in green tights was against the political tyrants of his day, most notably Prince John, Sir Guy of Gisbourne, and the sheriffs who extracted taxes from the common people to pay the king so they could retain their political positions.
If a Robin Hood movie were being cast today, Barak Obama would be cast as Prince John. The producers would have their pick of securing a supporting cast for Prince John’s court of governmental thieves by any number of Congressmen and Senators from both major political parties. These Obamacists believe that passing a law can overturn the law of supply and demand. Given enough time, I believe we will see the day when politicians will pass a law that states that no one will die in an automobile crash because Congress has so decreed.
The hard working oil companies have already been treated to Obama Hood-style economic policies for some time. “In addition to making hefty profits,” a CNNMoney article reports, “Exxon also had a hefty tax bill. Worldwide, the company paid $10.5 billion in income taxes in the second quarter, $9.5 billion in sales taxes, and over $12 billion in what it called ‘other taxes.’” Actually, Exxon didn’t pay a penny in taxes. We consumers paid all of it! Of course, this is true of all corporate taxation. A tax is considered a business expense. As an expense it’s passed on to consumers, and there is no law that will change this reality. Any company forced to eat the cost of taxation will go out of business or be subsidized by the State. Once again, a subsidy is an extraction of capital from workers, either in taxes paid to the State for the subsidy or by inflation (increasing the money supply). Since a large minority of Americans knows almost nothing about economics, they serve as cheerleaders for “tax the rich” rhetoric and economic policy and vote the Prince Johns into office, all the while blaming poor economic conditions on those under the thumb of the Sheriff of Nottingham.
The oil companies are easy targets for the politics of envy because their profits seem so extreme. But what other industry offers such a service so trouble free by locating its commodity in easily accessible filling stations up and down highways all across the United States open nearly 24 hours a day, every day of the week? And don’t forget that it’s Prince John who is charging you and me about fifty cents on every gallon of gasoline we buy. And here’s the kicker: Prince John is making the oil companies play the role of the Sheriff of Nottingham by making them collect the tax and giving the impression to consumers that the added fifty cents goes to the oil companies.
Here’s what the oil companies should do: Post the price of gas as a list of costs with the tax consumers pay clearly designated. So if a gallon of gas costs $4.00, the sign would read:
The oil companies also should make available at every pump how much profit is being made on each gallon as compared to ALL the taxes that are paid. The oil companies need a new public relations department. I would like to apply for the director’s job.
Gary DeMar is the President of American Vision.
Behind this development lay the stark commercial fact that since the mid-nineties, conservative titles had been showing up in profusion on the nation’s bestseller lists. For a while, industry veterans found this phenomenon fairly easy to discount. After all, most of the conservative bestsellers were products of one small house, Washington, D.C.–based Regnery, regarded in the business as a fringe right-of-center operation, and many dealt with a single (if seemingly inexhaustible) subject: the public and private transgressions of the White House’s occupants, Bill and Hillary Clinton. Surely the bizarre trend would play itself out soon. But even after the Clintons departed Pennsylvania Avenue, Regnery’s conservative hits kept coming: insider accounts like former CBS correspondent Bernard Goldberg’s Bias, historically grounded critiques of liberalism like Mona Charen’s Useful Idiots, and the scorched-earth polemics of Ann Coulter. With such books generating tens of millions of dollars in sales, mainstream publishing finally could no longer ignore the math, and plunged into the conservative market.
Conservatives had every reason to take the new imprints as validation, another vital step in an ongoing process. One by one, the media bastions were falling: first talk radio, thanks largely to Rush Limbaugh; then TV, with FOX’s dominance of cable; and, of course, the rise of the conservative blogosphere. Now mainstream publishers had at last realized, however grudgingly, that there were millions of conservative readers out there.
Yet over the past few years, some of the optimism on the right that greeted this publishing mini-revolution has faded. Outside the new imprints, the New York publishing world clearly remains a liberal stronghold, uncomprehending of, when not outright hostile to, conservative ideas—and authors. Mainstream media outlets that conventional publishers rely on to tout books have just as little enthusiasm for conservative titles. And though George W. Bush has been an incredible boon to conspiracy-mongering authors on the left, he’s done the opposite of good for sales at the new imprints, which have faced a much tougher market of late. In fact, there is much evidence suggesting that the rich vein of Coulter-style liberal-bashing polemics that drove so much of conservative publishing’s healthy sales has largely been mined. Amid all this uncertainty, will the new conservative imprints survive?
Conservative books are hardly a new phenomenon. As early as the 1920s, there was a small but steady market for conservative titles, mostly produced by houses far from Manhattan and the odd university press. Originally published by Morrow in 1935, Our Enemy, the State, Albert J. Nock’s influential brief against New Deal statism, has since enjoyed no fewer than five editions, from Caxton, Hallberg, Ayer, Laissez Faire Books, and Fox & Wilkes. Friedrich Hayek’s The Road to Serfdom eventually found an American publisher in the University of Chicago Press in 1944, and Yale University Press ran Ludwig von Mises’s Omnipotent Government five years later. The original publisher of Barry Goldwater’s The Conscience of a Conservative, in 1960, was Victor, out of Shepherdsville, Kentucky; and 1964’s A Choice, Not an Echo, by Goldwater booster Phyllis Schlafly, was produced by tiny, Alton, Illinois–based Pere Marquette. (Similarly, Ivan R. Dee, which publishes some of today’s most thoughtful books on public policy from a conservative perspective—including many by City Journal authors—is out of Chicago.)
Even mainstream houses produced the occasional conservative title. In 1988, to take the most famous example, Simon and Schuster paid little-known University of Chicago professor Allan Bloom a modest $10,000 advance and got a surprise monster bestseller, The Closing of the American Mind. “Dick Snyder was running S. and S. back then, and he really did believe in the free market of ideas,” remembers Bob Asahina, who edited the book. “I was pretty much free to acquire anyone I wanted.” Brad Miner, who would go on to work at National Review and run the conservative book club American Compass, says that Harper and Row hired him in 1984 in part because he was a conservative. “I brought them books by Bill Buckley and Charles Kessler,” he recalls, “and also Sidney Hook, who was hardly a conservative but felt like one to the lefties at Harper. But of course they were names. Every time I brought up someone they hadn’t heard of, they would say, ‘No, Brad, we want to do conservative books, just not this one.’ There really was no conception of the size of the potential market, or what the country was like. It was like the famous Steinberg drawing with New York as the center of the world, that odd liberal version of reality.”
But for conservatives of the late eighties and early nineties, the go-to house was the Free Press, run by the legendary Erwin Glikes, a Belgian-born refugee from Nazism who turned right in the wake of the 1968 student protests at Columbia. Under his auspices, the Free Press briefly constituted a one-company revolution, publishing traditional conservatives like George Will and Robert Bork as well as the provocative likes of Dinesh D’Souza, David Horowitz, Francis Fukuyama, and Charles Murray, whose collaboration with Richard Herrnstein—The Bell Curve, on the differences in intellectual capacity among individuals and groups—set off a national furor. In 1994, however, the Free Press was swallowed up by Simon and Schuster and went liberal. “You’d think the industry would have learned something from the success of so many Free Press authors and The Closing of the American Mind,” notes Adam Bellow, who was mentored by Glikes at the Free Press, later became Doubleday’s in-house conservative editor, and today works at HarperCollins, where he is still one of the few acknowledged conservatives working in a mainstream house. “But no. They resisted trying to seriously get into this market for another 15 years.”
They resisted even after the appearance in 1992 of the biggest conservative blockbuster of all, Rush Limbaugh’s The Way Things Ought to Be. Acquired for a low-six-figure advance by a maverick junior editor at Simon and Schuster named Judith Regan, the book went on to own the Number One spot on the New York Times bestseller list for 24 weeks, but liberal decision makers in the business still regarded it as an aberration. That left a gaping opening for the emerging conservative colossus, Regnery (a successor to the Henry Regnery Company, which had published such notable books as William F. Buckley’s God and Man at Yale and Russell Kirk’s The Conservative Mind)—until the New York publishing world woke up.
Crown Forum is indisputably the most successful of the new imprints. Launched in a glow of optimism by Steve Ross—that rare publishing liberal genuinely interested in books all over the ideological spectrum—it started with a sales asset precious almost beyond measure: Ann Coulter, who had been lured from Regnery. As every infuriated liberal on the planet knows, she has churned out red-meat bestsellers, the foundation of Crown Forum’s success, ever since.
According to Nielsen’s BookScan, which measures retail sales, Coulter’s most recent bestseller, last fall’s If Democrats Had Any Brains, They’d Be Republicans, has sold 126,000 hardcover copies to date, by most standards an extremely impressive figure. That pales beside the 279,000 copies BookScan recorded for her previous bestseller, 2006’s Godless: The Church of Liberalism, as well as her earlier efforts, it’s worth noting. But as Jed Donahue, her gentlemanly editor at Crown Forum, points out, BookScan fails to register sales at some of Coulter’s chief outlets, like conservative book clubs and below-retail superstores like Costco and BJ’s. Further, If Democrats Had Any Brains was not an original work but a deftly organized collection of previously published quotations—and it still debuted at Number Three on the Times bestseller list.
The reception of Coulter’s next original book this fall—the subject and title remain under wraps—will show whether she retains her status as the wicked queen of conservative publishing. In any case, over the past five years Crown Forum has built up a roster of other notable right-leaning authors, from Michael Barone and Ken Timmerman to M. Stanton Evans and Robert Novak, who have sold respectably if not spectacularly; indeed, Novak’s quirky memoir, The Prince of Darkness, was a bestseller last year. Crown Forum’s future roster includes not only Coulter and George Will but Charles Murray, Michael Medved, and Florida senator Mel Martinez, whose memoir will describe his arrival in America as an impoverished Cuban teenager.
Penguin’s Sentinel imprint, however, has had a less impressive record lately. True, it scored some major victories in the past, including Ronald Kessler’s pro-Bush A Matter of Character; Mona Charen’s Do-Gooders, on liberal good intentions gone horribly awry; and its biggest seller of all, Ed Klein’s 2005 The Truth About Hillary, which left its author such a pariah in liberal elite circles that he had to give up his home in the Hamptons. But over the past several years, Sentinel has failed to produce a similar success, and publisher Adrian Zackheim allows that it has recently “been taking on fewer books and become a lot more selective. This year we’ll publish only five or six, including Mike Huckabee’s book—down from ten a few years ago. We want to keep the imprint as robust as possible, but the way to do that is not simply to keep our output up and pretend the market is what it was three years ago.” With that in mind, Sentinel has just signed Donald Rumsfeld’s memoir, slated for 2010.
Threshold, the third entry in the mainstream-goes-conservative sweepstakes, got off to a disastrous start through overreliance on top editor Mary Matalin’s network of Washington insiders-turned-authors—its first title, Mary Cheney’s Now It’s My Turn, sold only 9,000 copies after an advance said to be in the million-dollar range. But the imprint has lately produced a pair of hits: Surrender Is Not an Option, John Bolton’s chips-fall-where-they-may memoir about his highly charged stint at the UN; and talk-show host Glenn Beck’s good-natured assault on political correctness, An Inconvenient Book, which has recorded sales of more than 300,000. Threshold looks to upcoming books by proven sellers Beck and radio talk-show host Mark Levin, as well as General Richard Myers, to continue that trend. “The lesson we’ve learned, or actually relearned, is that there are no hard-and-fast rules in this business, aside from the fact you’ve got to be smart, creative, and persistent,” observes Louise Burke, Threshold’s publisher. “There’s a conservative market out there, and it’s not going away.”
Despite the imprints’ diverse experiences, their staffers can agree on one thing: the continuing hostility of the broader publishing world, which dismisses most conservative titles as unserious screeds by mean-spirited ideologues. Don’t hold your breath waiting for even the most gifted and serious conservative writer to pick up a Pulitzer or the National Book Award. After the 2004 election, notes Bellow, “it became an anthropological question for them: ‘Who are these people?’ There followed a whole cottage industry of books and articles trying to prove that conservatives are a product of bad parenting, psychological syndromes, or genetic defects—as well as generally stupid and evil.”
Among mainstream publishers, hostility toward conservative thought is so pronounced that it can distort all semblance of commercial judgment. Bernard Goldberg’s Bias ended up with Regnery only because the book—originally titled Media Culpa, before the marketing wizards at the conservative house renamed it—was turned down by every mainstream publisher his agent sent it to. “He would call me,” recalls Goldberg, “and report, ‘So-and-so passed,’ then read me the note from the editor. It would say things like, ‘This is well written, but the premise doesn’t make any sense. Liberal bias? What’s that supposed to mean?’ ”
Still, when the agent reported that Regnery was potentially interested, Goldberg was unsure. “A conservative publisher? I felt a little funny about that.” Friends told him that going with Regnery would stigmatize the book, brand it as slanted by definition. Thinking back, he can only thank his lucky stars that he didn’t listen—and, even more so, that the mainstream houses had no interest. “This idea that a Regnery book is somehow illegitimate is just incredible BS! Why is it that we’re supposed to be concerned about Regnery being a conservative house, but nobody worries about all the publishers in Manhattan being liberal houses? It scares me even thinking about what would’ve happened if I’d gone with one of those houses. The book would’ve come and gone in a minute and sold exactly no copies!”
More to the point, the book would never have energized the crucial public debate on liberal media bias that has raged ever since. Even as it was, most of Goldberg’s former colleagues in the mainstream media—many of whom brag that they’ve never read the book—continue adamantly to deny that such bias exists.
The mainstream houses demonstrate their liberal bias even when they condescend to publish a non-PC book. Take Until Proven Innocent, Stuart Taylor and K. C. Johnson’s look at Durham D.A. Michael Nifong’s legal near-lynching of three Duke University lacrosse players accused of rape and how the university and the liberal media mob abetted it. Published by the Thomas Dunne imprint of St. Martin’s Press, the book was much anticipated in conservative circles and appeared to great critical acclaim. Yet it died quickly, victim of a publisher that utterly failed to grasp its potential appeal. “They [initially] printed only 13,000 copies and, as far as I know, gave it no advertising,” says a still-frustrated Taylor, who considers himself a liberal. “Amazon sold out the third day, and we got hundreds of e-mails from all over the country from people that couldn’t find it in the stores, which just killed it commercially. The truth is, the house just never seemed very excited about the book.” According to BookScan, the book ended up selling 17,000 copies.
Bellow reports that even Jonah Goldberg’s recent mammoth bestseller, Liberal Fascism, which he edited at Doubleday, was at first given short shrift by the house. “We printed 14,000 copies, and shipped 12,000,” he says. “But Jonah was an Internet star, and in the first week, the demand from his troops was so intense that it jumped onto the Times’s list. With 12,000 copies in print! Even then, Doubleday just eked the book out into the marketplace, reprinting in quantities of 5,000 or 10,000. If this had been a book by a major liberal journalist, they would have gone out with 30,000 copies and reprinted in increments of 20,000, and we would have been up to 150,000 in no time, with huge stacks in Barnes and Noble. Even when Jonah’s book hit Number One, it still wasn’t easily obtainable. You’d walk into a Barnes and Noble and, if they had it at all, it would be tucked away on the second floor in the back in the sociology section. Eventually, they pushed the book up to 198,000 copies. I would like to have seen 300,000 in print.”
It isn’t surprising, then, that while those who edit the new conservative imprints are in the publishing world, they are distinctly not of it—a dispiriting obstacle in a business that thrives on collegiality. “It was total culture shock,” says Bernadette Malone, until recently senior editor at Sentinel. “Everybody reads the New York Times every day and takes it as orthodoxy—signing books on that basis! It was evident very quickly how insular the whole system is. They could all name three, four, five chefs but couldn’t name a single clergyman.” Malone vividly recalls the morning after George W. Bush’s reelection in November 2004. “I’m sitting there in my office, and a young editorial assistant walks in. Without a word, she raises her eyes to the sky, turns up her palms and wrists”—Malone demonstrates, making like a martyred saint—“and starts weeping in front of my desk.” She pauses. “All I can say is, ‘I’m very sorry for your loss,’ which is what you say at a funeral, right?”
Since the new conservative imprints have far less latitude than traditional nonfiction imprints to fail, they tend to rely heavily on, and largely be defined by, a handful of proven iconic authors. “Each of these companies has its own Ann Coulter, Pat Buchanan, or Bill O’Reilly,” says Brad Miner, “and is constantly seeking the next.” But, counters Crown Forum’s Donahue, “Too many people, even in the industry, buy into the caricature that conservative publishing is all about polemics. We’ve published memoirs like Bob Novak’s The Prince of Darkness and Michael Medved’s Right Turns; serious works of history; investigative journalists like Bill Gertz and Ken Timmerman; not to mention the George Wills and Michael Barones of the world.” Malone similarly cites Sentinel titles like Mary Eberstadt’s brief against day care, Home-Alone America, and Nonie Darwish’s Now They Call Me Infidel as books that were “reasoned, thoughtful, and made an enormous contribution to the debate in the public arena.”
Even reasoned, thoughtful contributions don’t, however, yield balanced media treatment: mainstream press coverage for conservative books is almost invariably unfavorable, if it happens at all. A leftist polemic like Thomas Frank’s What’s the Matter with Kansas?—which takes as its thesis that midwesterners tend to vote Republican because they are blithely ignorant of their own self-interest—can generate reams of copy on the nation’s leading op-ed pages and in magazines from The New Yorker to Playboy. In the 20 years since The Closing of the American Mind, no book on the right has had anything like a comparable reception in the press. Denis Boyles’s recent Superior, Nebraska, a smart and witty rejoinder to Frank that stresses midwesterners’ historical industriousness and self-reliance, generated no mainstream attention at all.
Still more striking is the example of Syracuse professor Arthur C. Brooks’s Who Really Cares?, which showed that conservatives give a good deal more to charity than liberals do. With a surge of support from conservative media, including prized appearances on Rush Limbaugh’s and Bill O’Reilly’s shows, the book took off. Yet it was almost impossible to find a liberal who knew it existed, since it went unreviewed and unremarked upon by the New York Times and the Washington Post and was never covered on any network news program or NPR. “If we could have had a generalized debate in the culture—if CNN had been willing to cover the subject the way FOX did—the impact could have been so much greater,” says Brooks. “FOX was all over this like a cheap suit. But FOX is behind a firewall.” Meanwhile, Mark Steyn’s best-selling, enormously controversial America Alone similarly went unreviewed by the New York Times, the Los Angeles Times, and the Washington Post. Small wonder that Roger Kimball, publisher of right-of-center, independent Encounter Books (which also frequently publishes City Journal authors), no longer bothers sending his titles to the New York Times. Similarly likely to savage any book identified as conservative are the professional journals: Publishers Weekly and Kirkus Reviews, which are widely read by booksellers, and Library Journal, a guide for the nation’s librarians that can guarantee a long shelf life well after a book’s sales have stopped.
Bellow routinely gives liberal colleagues on the marketing side a short primer on the realities of publishing conservative books. “You have to prepare them for what’s going to happen—you’re going to get the bad review in PW, followed by the indignant column by Paul Krugman—but you have to let them know that in this case, bad is good. We need our enemies, we cherish them. We use the New York Times to energize conservative media. I send every book I publish to [Times columnist] Frank Rich, with a nice note saying, ‘I hope you hate this one.’ Unfortunately, they’ve gotten a little more savvy about being used that way, and tend not to respond. That’s why I miss Anthony Lewis—he could never restrain himself.”
No wonder the hugely successful Regnery selling machine aims its books directly at the conservative base, looking to talk radio, FOX News, and the Internet to drive sales. “Oprah is not one of the places we go for our books,” notes Sandy Schultz—who started with Regnery and now does publicity for a range of conservative imprints—of the show most mainstream publicists would give their firstborn to book. “We’re much more interested in Fox and Friends than the traditional network morning shows. The fact is, liberal producers don’t want to give conservatives a platform. When Tom Friedman or even Al Franken has a new book, you’ll never see someone on from the other side challenging them, but if they have on a conservative, they’ll set up a debate format. The School of Regnery says: ‘No media for media’s sake; media to sell books.’ ” The approach has paid off. Though Regnery produces only 20 to 25 titles annually, of the 72 conservative books that have been on the New York Times bestseller list in the past six years, 23 were from Regnery, and more than half of the rest were by authors who got their start with it.
Conservative houses and imprints deserve credit for their innovation in utilizing the new conservative media and their stubbornness in getting the word out. But their efforts don’t change the fact that mainstream press bias still distances their books from what Mortimer Adler termed “the great conversation,” the ongoing dialogue at the upper echelons of American intellectual life about the crucial moral and intellectual questions.
Bellow isn’t optimistic about the new conservative imprints’ future. “My own feeling is that these imprints are designed to fail,” he says. “Management would be happy to see them succeed for financial reasons—yet because they basically see this type of publishing as deeply distasteful, an alien organism within the publishing body, they’d be just as happy if they fail. Then they could say, ‘See, we tried, this kind of publishing is not a good business,’ and move on.” Regnery president and publisher Marji Ross concurs. “The large publishing houses have always held their noses when it comes to conservative imprints,” she says. “My guess is that if they survive at all, they’ll transition from conservative politics to just politics and current events.” And so does Encounter’s Kimball: “The truth is, there’s never been real commitment to the ideas in those books or, for that matter, to genuine intellectual pluralism. Once it’s clear the wind’s shifted and they’re less profitable, it’s a good bet they’ll be gone.”
If the imprints are to survive, perhaps it will be through what Bellow describes as persuading “mainstream publishers to stop seeing conservatives as a market to be ghettoized and exploited, but as a vital part of the American tapestry. But,” he adds, “I also think conservatives are also going to have to adjust—get smarter, argue better, and write more with an intention to persuade, rather than just mock, belittle, and demonize.” The future of conservative publishing, he says, is not in books that can be readily dismissed as “right-wing hyperbole” but in those that so manifestly grapple with important ideas that even those on the other side cannot dismiss them. The recent success of small, idea-driven Encounter—which enjoyed one of its best years ever in 2007 with books like Melanie Phillips’s Londonistan—as well as that of Delaware-based ISI Books suggests that he may be right. Similarly, Crown Forum’s Donahue asserts that the current deep divides on the right will lead to a less doctrinaire movement, creating a climate where “there will be room for a lot of different voices” and invigorating the conservative imprints.
But no matter what happens to those imprints, conservative publishing will certainly survive—and thrive. If liberals continue to ignore the power of conservative books, moreover, the losers will not be conservatives—who cannot help but be endlessly exposed to left-wing views through the networks and leading newspapers—but liberals themselves, complacent in their ignorance of the other side. “There’s always another side, that’s a classically liberal argument,” observes Bellow with a laugh. “The problem for contemporary liberals is that they really don’t understand it applies to them.”
Harry Stein, a contributing editor of City Journal, is the author of How I Accidentally Joined the Vast Right-Wing Conspiracy (and Found Inner Peace).