We greeted the President`s peace plan for the Middle East with mild enthusiasm on June 25, noting that the price of gold did the same. Gold had climbed to as high as $328 as violence in the Middle East and the subcontinent appeared to be getting completely out of hand. Its decline to $312 cannot be a reflection of good news on the fiscal front, as that news continues to worsen with increased deficits at all levels of government. For the most part, I have to conclude that the chances of increased violence in the Middle East spilling into the United States are steadily lessening as the Israelis and the Palestinians take small, significant steps back to a peace process.
The New York Times this morning reports on its front page that a very important cluster of Palestinian intellectuals and politicians have begun to openly question the use of suicide bombers in the struggle with Israel. Hanan Ashwari, a Palestinian legislator, seems to have taken the lead in getting 54 other opinion leaders to publish an appeal in the June 19 Arab newspaper, Al Qud, urging those behind the bombings targeting Israeli civilians in Israel proper to "stop pushing our youth to carry out these operations." The militants of Hamas denounced the Ashwari appeal as a sell-out, and of course there may be further suicide bombings down the line. But the appeal itself, and the relative quiet in recent days, has giving the Sharon government an opportunity to take small concessionary steps in parallel. By dismantling ten of the newest "settlements" on the West Bank and today lightening the curfews in selected communities on the West Bank, the Israelis are thus "empowering" Ashwari -- who I think would be the best replacement for Arafat if he is kicked upstairs in the January election process. I`ve watched her over the years being interviewed on our television shows for Palestinian viewpoints and have always marveled at her political skills. It would also be easier for Sharon to negotiate with a woman, I think, as he is innately combative with men.
These movements away from international violence suggest further declines in the dollar/gold price, with a bottom of perhaps $300. We`re out of the terrorist frying pan back into the deflationary fire. By our rough-and-ready rules of thumb, the Dow Jones Industrial belong under 9000 at that price. If $350 is equilibrium, we would have to decline to 8600 on that account, although a lower risk of terrorist disruptions to the economy would work in a positive direction. The market equity slide of recent days almost surely involves investors hedging in advance of the holiday weekend as there have been so many warnings of another incident. I rather doubt there will be any incidents at all in this period. The terrorists who struck at 9-11, I`ve always believed, did so to get the attention of the United States, which had been ignoring the Middle East except to plan for a war with Iraq -- which also seems more distant now. Once President Bush committed himself to a Palestinian state within three years, there is no reason for Islamic terrorists to disrupt that process, and if they had something cooking for this weekend, they would put it on hold.
The letter published June 19 by the Ashwari group did stop short of a blanket condemnation of all suicide bombings, the Times noted, but the letter did say that the attacks were not "producing any results except confirming the hatred, malice and loathing between the two peoples" and endangering "the possibility that the two peoples will live side by side in peace in two neighboring states."
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Happy 4th. If you have a moment this weekend, please read my "memo on the margin" on Abe Lincoln and what he told the Congress on July 4, 1861.
Memo To: Thomas DiLorenzo, author, The Real Lincoln
From: Jude Wanniski
Re: Defending Abraham Lincoln II
First of all, professor, when I wrote a memo defending Lincoln last week I left the impression to you and to others that I criticized your Lincoln book without having read it. What I tried to say in my memo directed at Prof. Clyde Wilson, who wrote a commentary on your book for Lew Rockwell's website, is that I did not think I had to read your book because I'd read so much about it at the Rockwell site. But when someone sent me a copy, I did at least get into it far enough -- 53 pages -- to see that in rejecting at the outset Lincoln's motive in preserving the union, you set forth an imagined hidden agenda on his part that could never have justified the death and destruction of the Civil War. I put the book aside with no plan to comment on it at all, until I read Prof. Wilson's commentary, with the Lincoln quote that "Any people anywhere, being inclined and having the power, have the right to rise up and shake off the existing government and form a new one that suits them."
Where Professor Wilson thought he cornered Lincoln with the 1848 quote, I said it is entirely consistent with Lincoln's behavior regarding the Southern rebellion. The Confederates tried and did not succeed because while they were inclined, they did not have the power. In the few days after my defense appeared at my website and on the Townhall site, I got several dozen e-mails from fans of yours and critics of Lincoln who strenuously disagreed with my approach. A number argued that I was saying that "might makes right," an idea with which I basically agree.
All of history is testimony to that axiom, which is that the stronger defeat the weaker. It was Lincoln himself who said that "right makes might," in his 1860 Cooper Union speech, which makes the argument seem circular. But both the North and the South believed they were in the right on the issue of secession, yet it was the Union that had the might. At the outset, the Confederates never imagined there would be such a struggle, but they certainly did believe they would be victorious. It's easy now to say the North had more manpower and material, but that was known at the time. Most recently, Iraq with 20 million people defeated Iran with 60 million. Our Army War College concluded that Iraq simply had better generals, for one reason or another. The South clearly had better generals than the North, but it was Lincoln's superiority as a political leader that held together the will of the free states to provide the men and material through the awful carnage on both sides.
He could never have succeeded if he was as crass as to fight for the protective tariff favored by the north, a possibility you spend an entire chapter on. Nor could he have rallied the North to end slavery in the South, as only a small fraction of Northerners believed the "inferior" Negro was worth fighting and dying for. As an economist, not a historian, you suggest Lincoln could have asked Northern taxpayers to buy the freedom of the 3.5 million slaves, which is the idea that led me to dismiss your book as "trivial and sophomoric." In my memo last week, I mentioned the 1952 Benjamin Thomas biography of Lincoln, which I've listed on my website for years as one of the most important books I have ever read, but was not in your bibliography. Here is Thomas getting to Lincoln's core, in Chapter XIII, A War for Democracy:
Lincoln did not flinch from a decision for civil war; some things in life and history are worthy of death and suffering. From his boyhood he had sought the meaning of the story of America. He found it in the political philosophy of Thomas Jefferson as it extolled the rights of man.
Lincoln often let his mind dwell on Jefferson and those other earnest patriots who met at Independence Hall and brought new hope to all mankind with the vow that "all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty and the pursuit of happiness." How noble and far-seeing those men were, he thought, as they built a national structure on such foundations that if some man, some faction, or some interest in time to come should set up the doctrine that none but rich men or none but white men, or none but Anglo-Saxons, were entitled to life, liberty and the pursuit of happiness, their posterity might find in this great human document a source of faith and courage to keep up the fight for truth, justice, and mercy among men! Lincoln believed that in this affirmation of democracy lay the great hope of the world. America must demonstrate that in these principles mankind would find the surest way to peace, prosperity and happiness.
One day when young John Hay brought some papers to Lincoln's office, the two men talked about the issues of the war. "For my part," the older man explained, "I consider the central idea pervading this struggle is the necessity that upon us of proving that popular government is not an absurdity. We must settle this question now, whether in a free government the minority have the right to break up the government whenever they choose. If we fail it will go far to prove the incapability of the people to govern themselves.
Lincoln never professed learning in world history. Yet, from the very beginning he sensed the world significance of the American crisis. From the time of the American Revolution, Europe had looked to America as the proving-ground of democracy. Inspired by the example of that Revolution, European peoples had also striven for self-government, but despotism and autocracy had been too well entrenched. The privileged classes of Europe, who looked upon democracy as little better than mob rule, sneered at American political theories as sure to fail.
"This is essentially a People's contest," Lincoln explained to Congress when it assembled on July 4, 1861. "On the side of the Union it is a struggle for maintaining in the world, that form, that substance of government, whose leading object is, to elevate the condition of men to lift artificial weights from all shoulders to clear the paths of laudable pursuit for all to afford all, an unfettered start, and a fair chance, in the race of life.
Our popular government has often been called an experiment. Two points in it, our people have already settled the successful establishing and the successful administering of it. One still remains its successful maintenance against a formidable attempt to overthrow it. It is now for them to demonstrate to the world, that those who can fairly carry an election, can also suppress a rebellion that ballots are the rightful, and peaceful, successors of bullets, and that when ballots have fairly, and constitutionality, decided, there can be no successful appeal, except to ballots themselves, at succeeding elections. Such will be a great lesson of peace: teaching men that what they cannot take by election, neither can they take it by a war teaching all, the folly of being the beginners of war.
Lincoln's primary purpose throughout the war was to save the Union. But this was incidental to a far more important objective: for as he saw the issue in its broader aspects, upon the fate of the Union hung the fate of world democracy . He must not allow the Southern people to dissever the nation or to renounce the philosophy of human freedom and equality for the false concept of a master race.
Mindful of his own pedigree of toil, Lincoln explained to the Congress how free institutions had elevated the American people beyond any others in the world. So large an army as the government now had it at its command "was never before known, without a soldier in it, but who had taken his place there of his own free choice." And there was scarcely a regiment in that army from which a president, a cabinet, a congress, and possibly a supreme court capable of administering the government could not be chosen. Whoever chose to abandon such a form of government, warned Lincoln, had best think well of what might come in its place.
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I've advised several of the people who wrote in to me on your behalf that I do think you have performed a most useful service. History never stops testing its heroes and its villains, looking for new insights about the way the world works. I really cannot quarrel with any of the facts you present in The Real Lincoln, as you seem to have everything properly foot-noted. If it had not been for your efforts, I would not have been spurred to re-read the Benjamin Thomas biography, to recommend it to you, and to recommend it to our audience. You really have to give Honest Abe credit. He did prove for all time that it is possible for ordinary people to maintain a popular democracy. Those men who fell in battle under the Confederate flag are just as much a part of that proof as those who died for the Union, and for that I honor the memory of the Gray as well as the Blue. History meant for there to be a Great War, not a simple skirmish, or the issues it resolved might still be in doubt.