Coyote Blog

I want to put a couple of caveats on this post.  1) Though there are utilitarian arguments related to slavery in this post, by no means do I think they ever come close in magnitude to the basic fact of the moral outrage of slavery. 2) Though there are utilitarian arguments about reparations in this post, by no means do I think they ever come close in magnitude to the moral outrage of penalizing people for sins of their grandfathers.

The other day, in what I thought was a quick throwaway comment on Twitter to an NBC article that seemed to be supporting slavery reparations, I wrote

Hmm, pretty sure my family in Hamburg, who were pre-occupied in the late 19th century with getting out from under Prussian rule and heading for America, did not benefit from US slavery

— Coyoteblog (@Coyoteblog) July 8, 2019

One response I got which I want to address was this one:

Yes they did. They left their home country and came to America because the abundance of opportunities. Opportunities made possible by the years of free labor take a wild guess from who?

— Zavi (@Zaviuc) July 9, 2019

This notion that slavery somehow benefited the entire economy is a surprisingly common one and I want to briefly refute it.  This is related to the ridiculously bad academic study (discussed here) that slave-harvested cotton accounted for nearly half of the US's economic activity, when in fact the number was well under 10%.  I assume that activists in support of reparations are using this argument to make the case that all Americans, not just slaveholders, benefited from slavery.  But this simply is not the case.

At the end of the day, economies grow and become wealthier as labor and capital are employed more productively.  Slavery does exactly the opposite.

Slaves are far less productive that free laborers.  They have no incentive to do any more work than the absolute minimum to avoid punishment, and have zero incentive (and a number of disincentives) to use their brain to perform tasks more intelligently.  So every slave is a potentially productive worker converted into an unproductive one.  Thus, every dollar of capital invested in a slave was a dollar invested in reducing worker productivity.

As a bit of background, the US in the early 19th century had a resource profile opposite from the old country.  In Europe, labor was over-abundant and land and resources like timber were scarce.  In the US, land and resources were plentiful but labor was scarce.  For landowners, it was really hard to get farm labor because everyone who came over here would quickly quit their job and headed out to the edge of settlement and grabbed some land to cultivate for themselves.

In this environment the market was sending pretty clear pricing signals -- that it was simply not a good use of scarce labor resources to grow low margin crops on huge plantations requiring scores or hundreds of laborers.  Slave-owners circumvented this pricing signal by finding workers they could force to work for free.  Force was used to apply high-value labor to lower-value tasks.  This does not create prosperity, it destroys it.

As a result, whereas $1000 invested in the North likely improved worker productivity, $1000 invested in the South destroyed it.  The North poured capital into future prosperity. The South poured it into supporting a dead-end feudal plantation economy.  As a result the south was impoverished for a century, really until northern companies began investing in the South after WWII.  If slavery really made for so much of an abundance of opportunities, then why did very few immigrants in the 19th century go to the South?  They went to the industrial northeast or (as did my grandparents) to the midwest.  The US in the 19th century was prosperous despite slavery in the south, not because of it.

I am not breaking any ground here but I just finished the fifth and final episode of Chernobyl last night and the entire series was excellent.  From the confusion of the first hours to the anonymous and sometimes futile heroism in the aftermath to the backroom and courtroom scenes at the end -- everything was tense and engaging and felt pitch-perfect.  If nothing else, it's a must see just for its portrayal of architecture and interiors of the Soviet Union.   I will warn you that some parts are hard to watch, particularly the dying men in episode 3 and the animal control operations in episode 4.  The whole thing has, appropriately, a real darkness to it.  Even the great acts of heroism can't offset the ugliness because the heroes tends to be anonymous and largely unrewarded and unheralded.  Spoiler alert:  there are no winners here [not so much of a spoiler as you see one of the protagonists hang himself 2 minutes into episode 1].

I know there are folks who criticize the science in the show.  Basically they can bite me.  This is a drama, and a really good one, and generally sticks pretty close to the historical material.

In addition to being about the accident itself, the show is also about life in the Soviet Union as well.  Which raises the question -- clearly the Soviet Union's political culture was at fault here, but is ours any better?  The answer is yes and no.  No, because I don't trust our government officials any more than the Soviets to not prioritize their own power over the well-being of their citizens.  But the US would likely do better because 1) our government is not nearly as monolithic, so that bad authoritarian impulses in one section can be checked by others; and 2) our government has much less scope.  What I mean by the latter is that Chernobyl was part of the Soviet government, so admitting mistakes there required criticism of the government.  In the US, with private operators of power plans, the government would have no problem calling out, say, Duke Power for its shortcomings.  Imagine for example how the response to the 737Max issues might have been different if it were built by a state corporation.

Postscript:  OK, what are those areas the science may be off?  Well, my sense is that the risk to people exposed to the victims of heavy radiation exposure (people visiting the victims in the hospital) is exaggerated in the program.  And I think most observers since the accident have been pleasantly surprised that, with the exception of an increase of thyroid cancers in young children, the long term health problems associated with lower level radiation exposures in the Chernobyl area have been far less than feared.  A UN panel wrote in 2008:

Apart from the dramatic increase in thyroid cancer incidence among those exposed at a young age, and some indication of an increased leukaemia and cataract incidence among the workers, there is no clearly demonstrated increase in the incidence of solid cancers or leukaemia due to radiation in the exposed populations. Neither is there any proof of other non-malignant disorders that are related to ionizing radiation. However, there were widespread psychological reactions to the accident, which were due to fear of the radiation, not to the actual radiation doses.

That latter part refers to a finding that the one measurable long-term effect in the population has been an increase in alcoholism that is usually attributed to people's elevated fears of cancer.

A large part of the mythology of the American Civil War is the stories of brothers who fought on opposite sides of the way.   They are a favorite part of many Civil War novels (including that series which I can't remember the name of that had a Patrick Swayze mini-series).

I am sure similar stories are part of many civil war traditions in many countries, but one of the more amazing comes from China in the 20th century.  And it involved sisters, not brothers.

Soong Ching-Ling was one of three sisters born in the Shanghai area in the late 19th century and sent by their father to America for school.  She would marry her father's friend Sun Yat-Sen (one of several wives -- Sun was only Westernized so far).  When Sun died, the left-right coalition he held together among the Chinese revolutionary forces disintegrated, with Soong Ching-Ling ending on the communist side.  She eventually rose to be vice-president of the PRC.

Her sister Soong Mei-Ling would marry Sun Yat-Sen's protege Chiang Kai-Shek, who was to lead China in the 30's and early 40's and eventually dual unsuccessfully with the communists after the war for control of China.  He would then rule the Chinese nationalist forces in Taiwan for most of the rest of his life.

Postscript:  I see there is a Hong Kong movie with a pretty nice cast on the sisters, might have to watch it.

John Hinderaker at Powerline writes about the House committee hearing on reparations the other day.  Just as a review, there is a proposal on the table by many Democrats that a large group of Americans who have never owned slaves or even condoned slavery pay reparations for slavery to a large group of Americans who have never been slaves (nor likely have their parents or their grand parents).

Forgetting the moral bankruptcy of the underlying arguments for reparations, I would have thought that if modern American blacks were somehow owed reparations for past damages, the very fact of being held in bondage was damage enough.  That crime is so bad it's hard to imagine anything else really adding more than incrementally to the damage calculation.  But apparently Ta-Nehisi Coates tetified, using a recent academic paper, that cotton grown and harvested by black labor amounted to nearly half the US economic activity at the time, and thus was somehow worse.  I am not really sure I understand this argument, but if we focus narrowly on the statement at hand it is obviously absurd, if for no other reason than the fact that the South was economically overwhelmed in the war by the North.

Apparently the "trick" in the study was to essentially double count economic activity and claim any activity that only marginally touched on cotton to be part of the tally for the size of the cotton economy.

Coates’s numbers come from Cornell University historian Ed Baptist’s 2014 book The Half Has Never Been Told. In a key passage in the book, Baptist purports to add up the total value of economic activity that derived from cotton production, which at $77 million made up about 5 percent of the estimated gross domestic product (GDP) of the United States in 1836. Baptist then committed a fundamental accounting error. He proceeded to double and even triple count intermediate transactions involved in cotton production — things like land purchases for plantations, tools used for cotton production, transportation, insurance, and credit instruments used in each. Eventually that $77 million became $600 million in Baptist’s accounting, or almost half of the entire antebellum economy of the United States.

My point is not to quibble with Coates's numbers per se -- as I said up top, a) I don't think reparations are owed for our great great grandparents actions b) I think the economic contribution of cotton is a rounding error on any damages that would be owed and c) I feel like the United States government and its people already paid this bill in blood and treasure during the Civil War.

The point I want to make is that this same error is made ALL THE TIME.  Every study you see quoted about economic impacts of .. whatever ... likely makes this same mistake, either accidentally or on purpose.  When sports teams try to get tax subsidies so their billionaire owners can build new stadiums, the economic impact "studies" they produce do this same triple counting.  When the sugar industry tries to justify the absurd tariffs that protect it, their studies use this same trick.  When climate alarmists cite economic impacts of a degree of warming, they use this technique.

By the way, I have made my own proposal on slavery reparations that targets the cost of reparations at the wealthy institution in the antebellum south, an institution that still exists today, which did the most to extend and preserve and defend slavery.

I know that for many folks today, history seems increasingly irrelevant.  Millenials will say that anything a bunch of old white guys were doing 500 years ago has no bearing on their lives.  Or perhaps more accurately, they don't want it to have any bearing on their life.

I love history in and of itself, but studying it has real value in understanding public policy choices. The problem in public policy is that we can seldom run good controlled studies (e.g. half of you will live under socialism and half capitalism and we will see who does better).  And even when we do inadvertently run A/B tests (e.g. blue state fiscal and regulatory model vs red state) we seldom pay attention to the results in part because we are just too close to them and too invested in them in one way or another.

But if you look back through enough time and across enough different civilizations, humans have already run millions of experiments and we can read the results.  I find it impossible, for example, to look at our government today without thinking of Rome and the Gracchi brothers in the 2nd century BC.  People today are trying to throw out institutional checks and balances, rules of decorum, traditions of collegiality, and limitations on power because they feel these are standing in the way of (mostly) well-meaning improvement programs ( in areas such as climate, income inequality, racism, etc).  But history teaches that such efforts always end the same way.  As in Rome in 133BC or Russian in 1917 or Cuba in 1957 or in many other historical cases, the inroads made by well-meaning idealists in weakening limits on individual power just open the door for real iron-fisted authoritarians to take the helm.

Like many commenters, the hell the soldiers faced on Omaha beach  when the ramps dropped on the landing craft is simply beyond my imagination.  Everyone talks about the bravery of the men that day, which is beyond question.  But the ultimate success at Omaha Beach, which was far from assured after the first hour, required more than bravery.

Virtually the entire plan for the Omaha Beach landing was moot from the first minutes of the battle:  the naval and air bombardment was completely ineffective, the tanks that were to support the landing never made it, and many of the landing craft landed in the wrong places.  But the carefully coordinated waves of landings were fairly robust to these sorts of problems.

In my mind the number one planning problem is that the whole invasion plan and all the training was geared to getting off the beach from a limited number of draws that led inland through the beachfront hills and cliffs.  These draws, however, were absurdly well defended by concentrations of troops and hard fortifications.  It was virtually impossible to advance through these draws as was planned.

The success at Omaha was based on a few (mostly junior) men, under murderous fire, having the brains to recognize the plan was bad and improvising a new plan on the spot.  Eventually, these men began to lead others up the steep hills to the top (most of the heavily defended draws were only taken later from the rear).

The participants in the (often unsuccessful) North Korean human wave attacks in the Korean War were undoubtedly brave.  But these men were not allowed to exercise any initiative or use their intelligence to formulate a better plan than being thrown uselessly in masses directly into the teeth of fortified positions.

So yes, its appropriate to celebrate the bravery of the troops.  But bravery alone would have led to slaughter with waves of men mindlessly trying to storm up the fortified draws.  Omaha Beach was ultimately won with intelligence and initiative of junior officers and enlisted men.

Postscript #1: If there was a failure at Omaha Beach, it again went back to the organizers and planners.  They spent so much time training men in the landing itself, they did not spend any time training or even planning well on what to do next.  As a result, instead of expanding the bridgehead, most of the troops stopped not far from the top of the beach escarpments.  In the following weeks, troops were to spend miserable days in the hedgerow (bocage) country, without any training or fighting doctrine of how to deal with this beautiful defensive terrain.  Again, it was often the initiative of the frontline troops, rather than the planners, that ultimately developed fighting doctrine to deal with the hedgerows.

Postscript #2: Tomorrow I will have my usual day-after-D-Day post on why the Normandy landings were magnificent but not necessarily what actually defeated Germany.

Postscript #3:  Americans, particularly after the movie Patton, love to dump on British General Montgomery.  But D-Day was essentially his plan, and for all that went wrong, it was a magnificent plan.  Montgomery caught a lot of flak from Americans then and now for being too slow and cautious at times when daring and speed were required.  But the flip side of this is that he was an undoubted master of the set-piece, highly planned major attack -- better at this than anyone I can think of on  the Allied side in Europe.

A while back on Columbus Day I wrote this on Twitter:

This is not just a SJW thing -- Columbus's European contemporaries thought he was a horrible person. The problem is that Italian-Americans have adopted it as Italian pride day -- let them have it, and celebrate indigenous people day another day, maybe nov 29. https://t.co/jcrFFVHxvh

— Coyoteblog (@Coyoteblog) October 8, 2018

A lot of young SJW's just lump Italians in with white European men and treat them as privileged, but Italians and Irish were ethnic punching bags in this country for decades. They had real reasons to develop a pride day, and for good or for ill this is it.

— Coyoteblog (@Coyoteblog) October 8, 2018

I am reminded of this in a WSJ article I saw today about a lynching of Italian immigrants in New Orleans in 1891

New Orleans Mayor LaToya Cantrell will officially apologize Friday for the largest mass lynching in U.S. history. On March 14, 1891, the city of New Orleans became a charnel house as a mob of as many as 20,000 wantonly slaughtered 11 Italian-Americans. Some of the victims had been charged in the murder of a police chief, but the trials all ended in acquittal or mistrial. A gang descended on the jail where the men were being held, shot them to death, and displayed their bodies for the savage rabble outside. Southern belles in search of souvenirs dipped their lace handkerchiefs in the blood of the butchered Italians.

And the press cheered. The New York Times editorialized on March 16: “These sneaking and cowardly Sicilians, the descendants of bandits and assassins, who have transported to this country the lawless passions, the cut-throat practices, and the oath-bound societies of their native country, are to us a pest without mitigations.”

The Washington Post even extolled the killers as “cool-headed men, lawyers, doctors, merchants, and political leaders, all person of influence and social standing.”

Theodore Roosevelt, then a member of the U.S. Civil Service Commission, wrote to his sister Anna Roosevelt Cowles on March 21: “Monday we dined at the Camerons; various dago diplomats were present, all much wrought up by the lynching of the Italians in New Orleans. Personally I think it rather a good thing, and said so.”

I encourage you to click through to an animated visualization of the largest cities in the world, by year.

A few surprises, but the biggest one to me was how long Naples hung around on the list.

The fall and rise of the Chinese cities is also interesting.  People seem to get freaked out by China's growing prosperity, a fear for which I have zero sympathy -- people exiting poverty in China is an unalloyed good.  But here is a thought for context.  I can't absolutely prove that it is correct but I am pretty sure it is true.  The history of the world is that, with the exception of the 200 years from about 1800-2000, China has for 4000 years been the largest economy in the world.  Chinese prosperity today is not some aberration, it is a return to normal.

Update:  OK, I think I got it to embed:

New project:

A “Bar Chart Race” animation showing the changing ranks of the 10 biggest cities in the world since 1500.

Fascinating to watch giant cities vanish after falling in conquests, and amazing that three UK cities were in the top 8 in the late 1800s. pic.twitter.com/KglMZbYobr

— John Burn-Murdoch (@jburnmurdoch) March 18, 2019

14 Cereals that Defined Our Childhood.

Hmm.  Quisp and Quake anyone?  I think as a kid I even voted in the national contest of which cereal they were going to kill.  A big bowl of Quisp and a glass of Tang.  Now that was breakfast.

Quiz: Since 1066, name an English queen consort who was not the monarch (e.g. not Mary I, Mary II, Liz 1, Liz II, Anne, Victoria) who was the biological daughter of another English Queen consort, also not the monarch.

Obviously this takes an unusual situation as in a normal succession this would require her to be married to her brother, uncle, or nephew.

I once was taking a course on the history of the Roman Empire (Garrett Fagan via the Teaching Company) in which the lecturer at the end of the course engaged the ever-popular topic of "why did the Roman Empire fall?**"  He made an interesting observation that could equally well be applied to many of the great questions of history -- that many explanations said more about the time the explanations were made in than they necessarily said about the historical period being studied.  Edward Gibbon was part of an 18th century anti-religious enlightenment movement and thus concluded the Roman Empire was brought down by Christianity, which made the Romans too docile to fight back against the barbarians.  Similarly Victorians found the Romans fell due to moral dissipation, Marxists discovered it was due to class warfare, and modern academics steeped in environmental sustainability have found that the Empire collapsed due to various man-made environmental disasters (e.g. lead drinking water pipes).

I have found that a lot of what is said about Nazi Germany follows much the same rule.  Because Nazi Germany represents for most the single greatest national embodiment of evil in history, people are always looking to associate what they don't like with Nazi German and Hitler.  I am reminded of this from Tyler Cowen's article this morning about Tim Wu attempting to draw a straight line from monopolies to Hitler.  In an era where many of our public intellectuals consider Trump the reincarnation of Hitler, it is fashionable to try to find ways to connect the dots.  It is a bit odd in this case, since the monopolies that seem to have the most political power in this country (Google, Facebook) are actually arrayed pretty strongly against Trump.  Cowen does not mention it, but if one is worried about economic concentration that is closely linked to government and has long-term stability, one should look at modern France and Germany long before they look at the US.

Cowen links to a great article by Thomas Childers exploding common myths about Nazi Germany that folks like Tim Wu are working from.  I have taken all of Childers' courses at the Teaching Company, including his 12 lecture course focused narrowly on the rise of Nazi Germany and his longer course on the history of WWII, and I recommend him highly.  I have taken 75+ courses at the Teaching company and he is one of my 3-4 favorite lecturers.

If you want to avoid the inter-mediation of historians, I have read two primary source books that really tell a FAR different story about the Nazi's than is commonly understood.  The first is Albert Speer's Inside the Third Reich.  While Speer seems to spare himself a lot, he spares no one else in the Nazi hierarchy and tells an interesting insider's story about a Nazi government that was astonishingly dysfunctional and inefficient.  The other is Gunter Reimann's The Vampire Economy about the insane regulation in the Nazi economy that makes even California look libertarian.  It was written before the war and the Holocaust, so it predates our current biases to project whatever economic system we don't like onto the Nazis.

The Vampire Economy is a study of the actual workings of business under National Socialism. Written in 1939, Günter Reimann's work discusses the effects of heavy regulation, inflation, price controls, trade interference, national economic planning, and attacks on private property, and their impact on human rights and economic development.

I would add that an entire book could be written on the seemingly simple question of "were the Nazi's socialist?"  Because the civics textbooks we had as kids included that stupid "heads I win, tails you lose" political spectrum from communism on the Left to Nazis on the Right, many folks think of the Nazis as "conservative."  And while they received some conservative support for their nationalism and militarism, the Nazis were not conservative -- they were revolutionaries and thought of themselves that way.  They were absolutely against the status quo.    The problem was figuring out what they were revolutionaries FOR.  One Nazi once answered that question as "we're for the opposite."  Which made sense to Germans who had lived through economic hell, but it is not very specific.

There were many socialists in the upper ranks of the Nazis.  It can be said that Hitler seemed less enthusiastic about socialism but in general Hitler was surprisingly indolent about being more specific or making decisions on any policy details.  He preferred that his folks just fight it out (again, see Speer's book).  Folks often assume Hitler hated socialism because he was outwardly so anti-communist.  But I get the impression that he hated socialists and communists, but maybe did not hate their policies -- a bit like a Republican voter might vehemently hate Obamacare but in a poll support most of its individual prescriptions.   To illustrate this, he did not rant against communism but something called judeo-bolshevism, which sounds more like a made up enemy than a description of a set of specific policies.

** Including arguments that it did not fall -- eg that it continued for another 1000 years as the Byzantine Empire (who called themselves Romans right to the end) or that it continued through Visigothic and Ostrogothic culture that looked a lot like Roman culture.

I was in a course this weekend on the rise and fall of the Roman Republic.  One term that was new to me was Polybius's theory of government called Anacyclosis (Polybius was a contemporary of the Roman Republic and actually lived during the time when the seeds of the Republic's downfall were being planted).  Others before and after Polybius had similar ideas but apparently Polybius gets a lot of the credit.  There are two interesting ideas in this theory that I think will have a lot of resonance to folks today.  First, he believed that governments followed a cycle from one-man rule to aristocracy to democracy and back.  Second, and perhaps more interesting, he believed that each of these three forms of government had a good and bad form, and that the good form was inherently unstable and always degenerated into the bad form.

Here is how Wikipedia summarizes the cycle:

Polybius' sequence of anacyclosis proceeds in the following order: 1. monarchy, 2. kingship, 3. tyranny, 4. aristocracy, 5. oligarchy, 6. democracy, and 7. ochlocracy.

According to Polybius' elaboration of the theory, the state begins in a form of primitive monarchy. The state will emerge from monarchy under the leadership of an influential and wise king; this represents the emergence of "kingship". Political power will pass by hereditary succession to the children of the king, who will abuse their authority for their own gain; this represents the degeneration of kingship into "tyranny".

Some of the more influential and powerful men of the state will grow weary of the abuses of tyrants, and will overthrow them; this represents the ascendancy of "aristocracy" (as well as the end of the "rule by the one" and the beginning of the "rule by the few").

Just as the descendants of kings, however, political influence will pass to the descendants of the aristocrats, and these descendants will begin to abuse their power and influence, as the tyrants before them; this represents the decline of aristocracy and the beginning of "oligarchy". As Polybius explains, the people will by this stage in the political evolution of the state decide to take political matters into their own hands.

This point of the cycle sees the emergence of "democracy", as well as the beginning of "rule by the many". In the same way that the descendants of kings and aristocrats abused their political status, so too will the descendants of democrats. Accordingly, democracy degenerates into "ochlocracy", literally, "mob-rule". In an ochlocracy, according to Polybius, the people of the state will become corrupted, and will develop a sense of entitlement and will be conditioned to accept the pandering of demagogues.

Eventually, the state will be engulfed in chaos, and the competing claims of demagogues will culminate in a single (sometimes virtuous) demagogue claiming absolute power, bringing the state full-circle back to monarchy.

He believed that the Roman Republic worked because it was a merger of all three forms of government.  If this seems like a goofy theory, like the balancing of humors for health; or if it seems wrong because we are all taught today that democracy is superior to the other two forms, consider this:  In the US, think of the Presidency as kingship, the Senate (as originally configured in the Constitution) as aristocracy, and the House of Representatives as democracy.  Our Constitution is arguably based in part on Polybius's theory.

After hammering various members of the G7 with new tariffs and threats of even more tariffs, Trump proposed that everyone eliminate all their tariff's and subsidies:

Q Mr. President, you said that this was a positive meeting, but from the outside, it seemed quite contentious. Did you get any indication from your interlocutors that they were going to make any concessions to you? And I believe that you raised the idea of a tariff-free G7. Is that —

THE PRESIDENT: I did. Oh, I did. That’s the way it should be. No tariffs, no barriers. That’s the way it should be.

Q How did it go down?

THE PRESIDENT: And no subsidies. I even said no tariffs. In other words, let’s say Canada — where we have tremendous tariffs — the United States pays tremendous tariffs on dairy. As an example, 270 percent. Nobody knows that. We pay nothing. We don’t want to pay anything. Why should we pay?

We have to — ultimately, that’s what you want. You want a tariff-free, you want no barriers, and you want no subsidies, because you have some cases where countries are subsidizing industries, and that’s not fair. So you go tariff-free, you go barrier-free, you go subsidy-free.

Awesome, sign me up. But is this serious?  I want to get to that in a minute but first let me offer two practical observations

• Trump belabored the 270 percent Canadian dairy tariffs on US products, but at the same time the US tariff rate on Canadian dairy products is effectively infinite, because we simply don't let any in.  This is the kind of complexity he is glossing over.  Forget Canada, his proposal for no tariffs or subsidies would cause a major freakout among US dairy farmers, a business absolutely chock-full of crazy quilt of progressive state regulation on prices and subsidies and quotas.  (and by the way, congrats to Trump for getting progressives like Drum into the free trade, anti-price-control camp).
• Simple statements like "no subsidies" are easy to make, but is a lower corporate tax rate a subsidy?  How about lower minimum wages?  What about really long copyright lives?  What about when a governor or mayor gives out relocation incentives and tax abatements?  What about the whole Amazon HQ2 deal that is coming?   The list of complexities are endless.  That is why long and complicated negotiations are necessary to reduce tariffs and subsidies.  Fortunately we have actually done this, in deals like NAFTA and the TPP.  Unfortunately, Trump has given both of these the boot.  So is he really serious?

I have a love for history and like to make comparisons of modern events to history, and in this case I believe there is a very parallel case we can learn from.   Here is the problem:  It involves Hitler's Germany.  Hitler is obviously the third rail of Internet discourse, but the example is so parallel I am still going to go ahead, with the following proviso:  I am not saying Trump is Hitler, or making any such analogy or statement.  I am merely attempting to learn from a very similar international negotiation that occurred in the 1930's.

If  you can put aside all the emotional baggage of Hitler being either the worst mass murderer in history or at least in the top 3, he was (at least for a while until it all blew up on him) very successful in getting wins in diplomatic face-offs of the type Trump seems to want (by this I mean gains for his own country in zero-sum or even negative-sum games made by repudiating past international settlements).  Hitler's brashness essentially won out with the reoccupation of the Rhineland, Germany's remilitarization, the annexation of Austria, and even led to the western powers basically handing the Sudetenland over to him.

But the example I have in mind is with the disarmament conferences of the the early 1930's.  Major western powers were looking for some sort of agreement to head off an expensive and destabilizing arms race of the type that occurred in the run-up to WWI (and which by the way was way too expensive for countries bogged down in the Great Depression).  As the powers discussed incremental limits or reductions, one world leader jumped into the fray and proposed that all the powers agree to total disarmament  -- no more militaries at all.  Can you guess who made this radical proposal that would be the envy of any 1960's hippie?**

Hitler had [President Roosevelt's] message before him when he prepared the final draft of his speech to the Reichstag. Contrary to expectation, his speech, when delivered, made no threat of immediate rearmament. Germany was ready at any time, Hitler said, to renounce the aggressive weapons forbidden to her by the Treaty of Versailles “if the whole world also bans them.” Without further ado, Germany would dissolve her whole military establishment “if neighboring nations unreservedly did the same.” For President Roosevelt's proposal the German government was “indebted with warm thanks.” Germany was ready to join in “any solemn non-aggression pact because she thinks not of attack but of her security.”

In making this speech, Hitler said that he above everyone else wanted peace.  He was a soldier, he had been in the trenches, and no soldier wanted war.

Given his past actions, we suspect Hitler was not a total peacenik, so what was going on here?  The Treaty of Versailles had essentially disarmed Germany, reduced its army to 100,000 men and banned it from having an air force and submarines, among other things.  Germany chaffed at these limits, considering them grossly unfair, and wanted limits at parity with those on, say, France.

Hitler always liked to turn other nations' values against them in his international statements.  Later, when he justified potential annexations in Austria, Czechoslovakia, and Poland, he would say that he was just interested in "self-determination of peoples" and that other powers were inconsistent and unfair when they refused to allow this principle they themselves had established to be applied to ethnic Germans in these countries.  Hitler clearly didn't care one bit about free self-determination of peoples, but he was happy to throw US and British and French rhetoric back in their faces.

So in this case Hitler grabbed at the other major powers' pious pronouncements about their commitment to disarmament and again threw it back in their faces.  You want disarmament?  OK, let's do it -- total disarmament.  Hitler knew that they would never do it -- France in particular did not trust Germany at all.  Hitler waited until it was clear the other countries were not going to go for this proposal and said something like, "see, those other countries were never serious, they never wanted peace.  All they want to do is keep Germany down."  He proceeded to resign from the conference,  renounce the military limits of the Versailles treaty, and started building Germany's army and air force.   Which was what he had intended to do all along.

I know from the comments that there are folks reading my blog who honestly don't seem to understand trade and the trade deficit, and I am at my limit in explaining any more clearly.  I know there are also folks who honestly think Trump is following a brinksmanship path to get to a net better set of trade rules in the future.  I wrote the other day that I doubted this, but folks have emailed me the quotes about Trump proposing full free trade as proof of his intentions.  Sorry, while I would love to believe this is true, and will happily admit my error later if needed, I don't believe it for a minute.  It just looks too much like Germany's actions at the disarmament conference.  People who truly want and understand free trade do not say things like "there are too many German cars in the United States."***

** This link is squirrelly and sometimes is gated and sometimes not.  The full citation is Boeckel, R. M. (1933). The Disarmament Conference, 1933. Editorial research reports 1933 (Vol. II). Washington, DC: CQ Press. Retrieved from http://library.cqpress.com/cqresearcher/cqresrre1933100900

*** Anyone older than about 45 can tell you how badly US cars sucked before foreign competition, and how much better they are today only because we allowed this competition.  Even if you don't own a German car (and I do), your American car is better and less expensive than it would be without German and Japanese and Korean competition.

I am reposting this from several years ago, but I am doing it on June 7 because last time when I posted it on June 6 people called me disrespectful.  I am not really sure I understand why, but this characterization is so wrong (I already have a trip lined up to be in Normandy next year around the 75th anniversary) that it is easier just to hold off for a day.

Over time, my understanding of the importance of the D-Day invasions has shifted.  Growing up, I considered these events to be the single key event in defeating the Nazis.  Listening to the radio this morning, this still seems to be the common understanding.

Over time, I have had to face the fact that the US (or at least the US Army) was not primarily responsible for defeating Germany -- the Russians defeated Germany, and what's more, would have defeated them whether the Allies had landed in France or not.  Check out the casualties by front, from Wikipedia:

The Russians defeated Germany.  Period.   And I don't think the western allies would ever have had the stomach to inflict the kind of casualties on Germany that were ultimately necessary to defeat her without Russian help.  To me, this is the great irony of WWII, that it was not ultimately a victory for democracy.  Only totalitarian Russia could defeat totalitarian Germany.  This thought often bothers me a lot.  It doesn't fit with how we want to view the war.

However, D-Day did have an important effect -- it kept Western Europe out of Soviet hands.  We did not know it at the time, but I would argue in retrospect that from mid-1944 on we were competing with Russia to see how Europe would get divided up after the war.  D-Day allowed the western allies to overrun most of Western Europe and keep it out of Soviet hands, perhaps an even more important outcome than just speeding the defeat of the Germans.  Sure, FDR gets grief for giving the farm away to Russia at Yalta, but what could he do?  The Soviet occupation of Eastern Europe at that point was a fait accompli.  What would have been FDR & Churchill's negotiation position at Yalta if their armies were not even on the continent (excepting Italy, where we might still be fighting in 2014 and getting nowhere)?

Postscript:  There is no doubt that some German troops were pinned down in the West by the invasion, but many of these troops were already pinned down by the mere threat of invasion.   Only the experienced soldiers and new equipment gathered by Hitler for the Wacht am Rhein, what we now refer to as the Battle of the Bulge, were a major diversion from the East due to the invasion, and even that was a relatively small amount of reserves compared to the immensity of the Eastern Front.  Had we overrun the industrial Ruhr earlier, that would have made a real difference but we only really achieved this a few months before Berlin was taken.

There are a lots of what-ifs about the war in the West and about how the war might have been shortened.  What if Montgomery really could have taken Cannes on D+1?  That if the Allies had taken the larger solution to trap more Germans at Falais?  What if the Allies had given limited supplies to Patton rather than Montgomery and Operation Market-Garden?  What if Eisenhower had been less timid about trapping the Germans in the Bulge?

But I think the most interesting missed opportunity was a small one with huge impact -- what if the Allies had been more aggressive in taking the Scheldt Estuary?  The Allies were desperately short of supplies in Northern France in the Fall of 1944.  They simply could not get enough supplies over the beaches at Normandy and across France to support all the armies they had in play.  They needed a real high-capacity port in the North and they actually captured one in Antwerp almost intact around September 3.  Antwerp, though, is not right on the ocean -- boats had to come down an estuary which the Germans still controlled.  Quick action in early September could have easily cleared the estuary and made the port almost immediately use-able.   The Allies took only half measures and basically dithered for a while, failing to see the opportunity, as the Germans continued to fortify their position.  In the end, it was not until nearly December before Antwerp could act as a port, long after the opportunity for a coup de grace of the Germans in the West had passed.  If you are interested, here is the Wikipedia article on the Battle of the Scheldt.

Update:  by the way, there were lots of good comments on the original post and you can see them here.

(source)

“Once, in the last century, in the Cambria Iron Works at Johnstown, Pennsylvania, after working for months to build an unorthodox new machine for steel production, the engineer in charge, John Fritz, said at last, ‘All right boys, let’s start it up and see why it doesn’t work.’

I just finished watching the PBS series on the Vietnam War and found the experience powerful and educational.  My only disappointment was that every soldier they interviewed and followed through the war ended up in the anti-war movement (or in the case of one POW, his wife did).  I agree with their perspective, and see the whole war as a giant waste, but unlike most people on campus nowadays, I like hearing from people with points of view that are different than mine.  I get nervous just having my expectations reinforced.  Surely there are veterans who thought the war was winnable and the US largely honorable -- I know some of these folks -- but we really do not get to hear their voices very often.   But with this proviso, the series was terrific.

One of the most important -- and hardest -- lessons of business is to think at the margin.  Perhaps the toughest corollary to this is: Sunk costs are sunk.  I don't care how much we have already spent on that factory -- that money is gone -- if it is going to take another $100 million to finish, are the benefits of the factory worth that $100 million? If not let's stop work on it no matter how much has already been spent.   I have worked to teach this to my wife.  I don't care how much the tickets for the show on Sunday night cost -- that money is gone -- isthe enjoyment we expect to get from the show worth the remaining costs we face (getting in the car, fighting for parking, etc)?

Transit projects thrive on the sunk cost fallacy.  Agencies explicitly try to get some money, spend it, and then claim the rest of the money has to be spent because we have already "invested so much".  Here is an example:

But what is really amazing is that Chicago embarked on building a $320 million downtown station for the project without even a plan for the rest of the line -- no design, no route, no land acquisition, no appropriation, no cost estimate, nothing.  There are currently tracks running near the station to the airport, but there are no passing sidings on these tracks, making it impossible for express and local trains to share the same track.  The express service idea would either require an extensive rebuilding of the entire current line using signaling and switching technologies that may not (according to Daley himself) even exist, or it requires an entirely new line cut through some of the densest urban environments in the country.  Even this critical decision on basic approach was not made before they started construction on the station, and in fact still has not been made.

Though the article does not mention it, this strikes me as a typical commuter rail strategy -- make some kind of toe-in-the-water investment on a less-than-critical-mass part of the system, and then use that as leverage with voters to approve funding so that the original investment will not be orphaned.

It amazes me that no politician in California has shut down the insane California high speed rail project, but I will bet you any amount of money that when they do the rail agency will be screaming that it can't be shut down because they have already spent billions of dollars and shutting them down would waste all that money.  Sorry, but that money has already been wasted, the point is to avoid all the additional money that will be wasted going forward.

The government decision-making around the Vietnam War seemed like nothing so much as a series of sunk cost fallacies.  We can't give up now, not after so many brave men have already died!  That last sentence could be the title of about half the episodes.   But sunk costs shouldn't matter in a go-forward decision -- but they do matter to ego and prestige.  Politicians talk about things like "the nation's honor" but what really matters at its heart is their own ego and perception.  Abandoning sunk costs, for the real humans making decisions (whether Presidents or CEOs) is about confessing past errors of judgment.  Its a hard thing to do, so hard a lot of extra people had to die in Vietnam before it could happen.  I can't find a transcript but Kissinger had some amazing quotes in Episode 9 that pretty baldly outline this problem.

One of my odd niche interests is that I am fascinated by the Panama Canal and its construction.  I probably have read 10 books on the topic.  My kids know never to ask anything remotely about it because they will get a 1-hour lecture.

So here is your fun fact that all but other canal aficionados will find surprising:  The Atlantic entrance to the Panama Canal is west of the Pacific entrance.  The canal actually runs largely north-south rather than east-west as we imagine.

The other thing most people have wrong in their minds when they think about the canal is that they picture ships traveling through a narrow excavation.  Pictures of boats are almost always at the locks or at the Culebra Cut.  But for most of the route the sort of median view is of a ship sailing across a peaceful lake in the middle of a rain forest.  The canal was made by damming two rivers and creating two lakes (one of them enormous) that spread out to cover most of the isthmus.  The digging was then to connect the two lakes through the spine of the country (the Culebra cut) and to build flights of locks at each end up and down from the lakes.  Thinking of the canal as a bridge over the land rather than a cut is a more accurate picture.  This design solved the twin problems of too much digging (we'd still probably be digging in the Culebra Cut if people had insisted on make the canal at sea level, a vision that was surprisingly hard to get past) and the Chagres River which could become an incredible torrent in the rainy season and flood out everything in its path.

This is really staggeringly good news.  Malaria has, through history, been one of the deadliest infectious diseases (though of late my understanding is that it has been surpassed by HIV).  One of the problems with malaria is that for every death, many more are rendered unable to work for long periods of time, a drag on productivity in economies that already have trouble producing sufficient food and other goods.

Who would have thought we would be replaying the 11th and 12th century investiture controversies a thousand years later in China:

Pope Francis has decided to accept the legitimacy of seven Catholic bishops appointed by the Chinese government, a concession that the Holy See hopes will lead Beijing to recognize the pope’s authority as head of the Catholic Church in China, according to a person familiar with the plan.

For years, the Vatican didn’t recognize their ordinations, which were done in defiance of the pope and considered illicit, part of a long-running standoff between the Catholic Church and China’s officially atheist Communist Party.

The pope will lift the excommunications of the seven bishops and recognize them as the leaders of their dioceses, according to the person familiar with the situation.

I don't have a lot to say about the whole Confederate statue thing.  Most of what I would say could probably be cut and pasted from my post on the Confederate flag.

The one thing I want to comment on is the criticism that pulling down these statues is "Stalinist", referring to Stalin's proclivity for changing history books and even airbrushing men out of photos when he turned against them.  I find this comparison ironic for the following reason:  Think back to the fall of communism in Eastern Europe in 1989.  I have two images in my mind of that time.  One is of people on top of and pulling down the Berlin Wall.  But the other is of Soviet-era statues toppling in Eastern Europe.  Pulling down the statue of Lenin or Stalin or whoever became the key public declaration that people were making a break with the past.

Public statues on public land are basically government speech.  People call it "history" but in most cases it is closer to propaganda.  I think it is totally appropriate to question it.  Now, I might have gone about the whole thing differently.  If I were a city, I would name the statues that I wanted removed, and then give private individuals and groups 6 months to pay to take it away to a private site if they wanted to keep it.  If no one cared enough to do so, we'd just demolish it.  By the way, I think this gets at the heart of why many folks like myself still have a bit of fear about the current efforts -- the folks on the Left who are doing this don't tend to differentiate between public and private.  It is very likely their perfectly reasonable criticism of public speech in public spaces will soon turn into attempts to regulate private speech in private spaces.

The Lost Cause School:   I want to provide some help for those not from the South to understand the southern side of the statue thing.  In particular, how can good people who believe themselves not to be racist support these statues?  You have to recognize that most folks of my generation in the South were raised on the lost cause school of Civil War historiography.  I went to one of the great private high schools in the South and realized later I had been steeped in Lost Cause.  All the public schools taught it.  Here is the Wikipedia summary:

The Lost Cause of the Confederacy, or simply Lost Cause, is a set of revisionist beliefs that describes the Confederate cause as a heroic one against great odds despite its defeat. The beliefs endorse the virtues of the antebellum South, viewing the American Civil War as an honorable struggle for the Southern way of life,^[1] while minimizing or denying the central role of slavery. While it was not taught in the North, aspects of it did win acceptance there and helped the process of reunifying American whites.

The Lost Cause belief system synthesized numerous ideas into a coherent package. Lost Cause supporters argue that slavery was not the main cause of the Civil War, and claim that few scholars saw it as such before the 1950s.^[2] In order to reach this conclusion, they often deny or minimize the writings and speeches of Confederate leaders of the time in favor of later-written revisionist documents.^[3] Supporters often stressed the idea of secession as a defense against a Northern threat to their way of life and say that threat violated the states' rights guaranteed by the Union. They believed any state had the right to secede, a point strongly denied by the North. The Lost Cause portrayed the South as more profoundly Christian than the greedy North. It portrayed the slavery system as more benevolent than cruel, emphasizing that it taught Christianity and civilization. In explaining Confederate defeat, the Lost Cause said the main factor was not qualitative inferiority in leadership or fighting ability but the massive quantitative superiority of the Yankee industrial machine.

Obviously this was promoted by the white supremacists after the war, but in the 20th century many well-meaning people in the South who are not racist and by no means want to see a return of slavery or Jim Crow still retain elements of this story, particularly the vision of the Confederacy as a scrappy underdog.  But everything in these two paragraphs including the downplaying of slavery in the causes of the Civil War was being taught when I grew up.  It wasn't until a civil war course in college (from James McPherson no less, boy was I a lucky dog there) that I read source material from the time and was deprogrammed.

The comparisons of the current statue removal to Protestant reformation iconoclasm seem particularly apt to me.  You see, growing up in the South, Confederate generals were our saints.  And the word "generals" is important.  No one I knew growing up would think to revere, say, Jefferson Davis.  Only the hard-core white supremacists revered Jefferson Davis.  Real lost cause non-racist southerners revered Robert E. Lee.  He was our Jesus (see: Dukes of Hazard).  Every town in the south still has a Robert E Lee High School.  Had I not gone to private school, I would have gone to Houston's Lee High (I had a friend who went to college at Lehigh in New Jersey.  Whenever he told folks in the South he went there, they would inevitably answer "yes, but where did you go to college.")  So Lee was by far and away at the top of the pantheon.  Then you had folks like Stonewall Jackson and JEB Stuart who were probably our Peter and Paul.  Then all the rest of the generals trailing off through the equivalents of St. Bartholomew or whoever.  We even had a Judas, General James Longstreet, who for a variety of reasons was reviled by the Lost Cause school and was blamed for many of Lee's, and the South's, losses.

If you want to see the Southern generals the way much of the South sees them, watch the movie Gettysburg, which I like quite a bit (based on the book Killer Angels, I believe, also a good read).  The Southern Generals are good, talented men trying to make the best of a losing cause.  Slavery is, in this movie, irrelevant to them.   They are fighting for their beloved homes in the South, not for slavery.  The movie even has Longstreet saying something like "we should have freed the slaves and then fired on Fort Sumter."

Nick Gillespie discusses the difficulty artists have had grappling with 9/11, and suggests two that did a particularly good job.  I was not familiar with the Elton John performance and it did not really move me seen today out of context from its original airing.  But I did see the documentary "Man on Wire" and think it's fabulous -- the world is made better by peaceful eccentrics and Philippe Petit's story of walking a tightrope between the twin towers is amazing.  It should be noted that he developed his overpowering vision of walking a wire between the two towers before he had ever once climbed on a tightrope.

I would like to add one more successful artistic treatment of 9/11 -- the Onion's 9/11 issue.  The issue was in its way as brave as Petit's tightrope walk, as it came out when no one was joking about the tragedy (hell, no one really attempts to address it with humor to this day).  But the Onion staff put out an amazing issue that was both funny and respectful and a spot-on tribute.

The entire archive is here, keep scrolling some of the best are at the bottom.  But even the small throwaway details are great -- who else in September of 2001 could have written the (likely spot-on) headline "Rest of Country Temporarily Feels Deep Affection for New York"?  And perhaps it is just me, but I still laugh at stuff like this, particularly in this age of virtue-signalling.

Dinty Moore Breaks Long Silence On Terrorism With Full-Page Ad

NEW YORK—Nearly two weeks after the attacks on the World Trade Center and Pentagon, the makers of Dinty Moore beef stew finally weighed in on the tragedy Monday with a full-page ad in USA Today. "We at Dinty Moore extend our deepest sympathies to all who have been affected by the terrible events of Sept. 11, 2001," read the ad, which pictured a can of Dinty Moore beef stew at the bottom of the page. "The entire Dinty Moore family is outraged by this heinous crime and stands firmly behind our leaders." Dinty Moore joins Knoche Heating & Cooling and Tri-State Jacuzzi in condemning terrorism.

Direct links to a few of the lead articles:

U.S. Vows To Defeat Whoever It Is We're At War With  (an article that highlights what is still the major problem in the supposed war on terror)

Hijackers Surprised To Find Selves In Hell

God Angrily Clarifies 'Don't Kill' Rule

American Life Turns Into Bad Jerry Bruckheimer Movie

For those who are younger and don't remember the day that well, the last article may seem a little random, but one of the odd reactions one heard everywhere on 9/11 was people saying that the jets ramming the towers and the later collapse of the towers all looked like a movie, like things we only expected to see in special effects and not in real life.

Speaking of movies, I was in Manhattan that day -- in the championship of bad timing awards, I was scheduled to make a presentation at 9am on 9/11 to a group of investors asking them to invest in our commercial aviation internet venture, making the pitch that the commercial aviation industry (which had been slumping a bit) was poised for a turnaround.  Anyway, one thing I have never seen reported much is what Manhattan was like that night.  I was stuck in the city, planning to leave the next day in the last rental car available.  I was wandering the city looking for dinner, happy I suppose to have been only lightly touched by the disaster, not knowing yet that several of my friends from business school had died that morning.  The authorities had been letting everybody leave the island through the bridges and tunnels, but no one, not even taxis or public transportation, was being allowed back in.  By the evening, the city was deserted, like a scene out of a post-apocalyptic movie.  Perhaps one car every 10 minutes came through Times Square.  The quiet was astounding, probably the quietest the city had been then or since for 200 years.

Pretty amazing footage.  Having been to the Brandenburg Gate during the height of the Cold War, it is jarring to see someone driving easily from the British to the Soviet sector (the wall ran right by the Gate, with it just in the Soviet sector).

I wanted to add something to my post on Hiroshima the other day.  The point of the post was not to argue for any comfort with atomic weapons or the killing of tens of thousands of civilians (mutual assured destruction has got to be the dumbest, scariest, craziest basis for international relations ever conceived).  The point was to argue that most arguments about Hiroshima are stripped of historical context, colored by our experience of the Cold War, and based on increasingly popular but incorrect assumptions about the rulers of Japan at the end of the war.

So as an adjunct to that post, I wanted to emphasize that I think civilian bombing (whether conventional or nuclear) to be the worst single new idea of the 20th century.  The absolute worst ideas of the 20th century were likely Marxism and genocide, but these were not new to the 2oth century.  But strategic bombing of civilian populations far to the rear of the front lines, whether convention or nuclear, by airplane or missile, was almost entirely new.  It was an awful, terrible idea that haunts us to this day.

It is in this context that I don't single out Hiroshima for particular opprobrium.  It was a change in technology in a horrendous program.  The worst of the lot in my mind was Arthur Harris.  Harris, head of the British strategic bombing effort through most of the war, did not even pretend to be targeting industries or factories.  He thought such precision bombing to be madness.  His very specific goal was to kill and "unhouse" as many civilians as possible, and he measured the British bombing effort in those terms.

Well, its that time of year again and folks on the Left are out there with their annual rants against the bombing of Hiroshima as a great crime against humanity.

All war is a crime against humanity by those who start them.  And I am certainly uncomfortable that we let the atomic genie out of the steel casing in August of 1945.  But I think much of what is written about Hiroshima strips the decision to drop the bomb from its historical context.  A few thoughts:

1. We loath the Hiroshima bombing because we in 2015 know of the nuclear proliferation that was to follow and the  resulting cloud of fear that hung over the globe for decades as most everyone was forced to think about our new ability to destroy humanity.  But all that was in the realm of science fiction in 1945.  And even if they knew something of the Cold War and fear of the Bomb, would many have had sympathy, living as they were through a real war that represented possibly the worst self-inflicted catastrophe man has ever faced?
2. Several other bombing raids, notably the fire-bombing of Tokyo, took more lives than Hiroshima.  Again, we differentiate the two because we experienced the Cold War that came after and thus developed a special fear and loathing for atomic weapons, but people in 1945 did not have that experience.
3. The ex post facto mistake many folks make on Hiroshima is similar to the mistake many of us make on Yalta.  Lots of folks, particularly on the Right, criticize FDR for being soft on Stalin and letting him get away with Eastern Europe.  But really,what were they going to do?  Realistically, Russia's armies were already in Eastern Europe and were not going to leave unless we sent armies to throw them out.  Which we were not, because folks were absolutely exhausted by the war.  This war exhaustion also plays a big part in the decision at Hiroshima.  Flip the decision around.  What would have happened if a war-weary public later found out that the government had a secret weapon that might have ended the war but refused to use it?  They would have been run out of office.
4. I once heard a government official of the time say that it was odd to hear people talking about the "decision" to bomb Hiroshima because there was not a decision to make.  We were in a long, horrible, bloody war.  We had a new weapon.  It was going to be used.
5. The Japanese were not showing a willingness to negotiate.  Yes, some members of the Japanese state department were making peaceful overtures before Hiroshima, but they had no power.  None of the military ruling clique was anywhere in the ballpark of surrendering.  Even after Hiroshima, and Nagasaki, and the Russian declaration of war, the government STILL would not have voted for surrender except for the absolutely extraordinary and unprecedented  intervention of the Emperor.  And even then, the military rulers were still trying to figure out how to suppress the Emperor or even take him hostage to stop any peace process.
6. It is argued sometimes that the Hiroshima and Nagasaki bombs were irrelevant and that the Japanese surrendered when the Russians declared war.  The Russian declaration was certainly an important part of the mix, but I find it hard to believe the Emperor would have taken his unprecedented actions without the atomic bomb attacks.  Besides, even if the Russian declaration was critical, it could be argued the bombs played a huge role in that declaration.  After all, we had tried to get the Russians to make such a declaration for years, and it suddenly came coincidentally a couple of days after the atomic bombs start dropping?  I doubt it.  A better theory is that the Russians were waiting for signs that the war was nearly won so they could jump in and grab some costless booty from defeated Japan, and the bombs were that sign.
7. It is argued that the invasion of Japan would have cost fewer lives than the bomb.  This is a crock.  Sorry.  There is absolutely no way to look at military and civilian casualty figures from Iwo Jima and Okinawa and come to any conclusion other than the fact that the invasion of Japan would have been a bloodbath.
8. It is argued that we could have blockaded Japan to death.  This is possible, but it would have 1. Taken a lot of time, for which no one had any patience; 2. exposed US ships to relentless Kamikaze attacks and 3.  likely have cost more Japanese civilian lives to continued conventional bombing and starvation than the atomic bombs did.
9. It is argued that we dropped the bombs on Japan out of some sort of racial hatred.  We can't really test this since by the time the bombs were ready, Japan was our only enemy left in the field.  Certainly, as a minimum, we had developed a deep hatred of Japanese culture that seemed so alien to us and led to atrocities that naturally generated a lot of hatred.  For the soldier, the best simple description of this culture clash I ever heard (I can't remember the source) was a guy who said something like "for us, the war was about winning and going home.  For the Japanese, the war just seemed to be about dying."   In a time where racism was much more normal and accepted, I would say that yes, this cultural hatred became real racism.  But I would add that it was not like we entered the war with some sort of deep, long hatred of Asians.  If anything, we stumbled into the Pacific War in large part because Americans felt a special friendship and sympathy with China and would not accept Japan's military interventions there.

Rocochet asks this question over the weekend:  What are your top 5 causes of the fall of the Roman Empire.  OK, I will take a shot at this from my decidedly amateur perspective:

1. Demographic collapse, caused by a series of plagues (perhaps even an Ur version of the black death) and possibly climate change (colder) that depopulated the western half of the empire
2. A variety of policies (e.g. grain dole) that shifted population from productive farms to the cities.  In the 19th century, this shift was to be growth-inducing as farm labor was moving into growing factories, but no such productivity revolution existed in Roman cities.  The combination of #2 with #1 left huge swaths of farmland abandoned, and the Romans dependent on grain ships from North Africa to feed the unproductive mouths in large Italian cities.  It also gutted the traditional Roman military model, which depended strongly on these local farmers for the backbone of the army.
3. The Romans lost their ability to be innovative in including new peoples in their Empire.  The Romans had a bewildering array of citizenship and tax statuses for different peoples who joined or were conquered by the empire.  For hundreds of years, this innovation was hugely successful.   But by the 4th and 5th centuries they seemed to have lost the trick.  The evidence for this is that they could have solved multiple problems -- the barbarians at the gates and the abandonment of farm land and the need for more soldiers -- by finding a way to settle barbarians on empty farm land.  This is in fact exactly what the barbarians wanted.  That is why I do not include the barbarian invasions as one of my five, because it did not have to be barbarian invasions, it could have been barbarian immigration.  Gibson's thesis was that Christianity killed the Roman Empire by making it "soft".  I don't buy that, but it may have been that substituting the Romans' earlier incredible tolerance for other religions in their Pagan period with a more intolerant version of Christianity contributed to this loss of flexibility.
4. Hand in hand with #3, the Roman economy became sclerotic.  This was the legacy of Diocletian and Constantine, who restructured the empire to survive several centuries more but at the cost of at least an order of magnitude more state control in every aspect of society.  Diocletian's edict of maximum prices is the best known such regulation, but in fact he fixed most every family into their then-current trades and insisted the family perform the same economic functions in all future generations.  Essentially, it was Ayn Rand's directive 10-289 for the ancient world, and the only reason these laws were not more destructive is that the information and communication technologies of the time did not allow for very careful enforcement.
5. Splits in the governance of the empire between west and east (again going back to Diocletian) reduced the ability to fund priorities on one side of the empire with resources from the other side.  More specifically, the wealthy eastern empire had always subsidized defense of the west, and that subsidy became much harder, and effectively ended, in the century after Diocletian.

I will add, as a reminder, that to some extent this is all a trick question, because the Roman Empire really did not totally fall until the capture of Constantinople in 1453.  So I should have stated at the outset that all of the above refers to the fall of the western empire in the late 5th century, which in part explains why #5 is there in the list.

And, if you were in a room of historians of this era, you could quickly get into an argument over whether the western Roman empire really fell in the late 5th century.  For example, the Visigothic Kingdom in the area of modern southern France and Spain retained a lot of Roman practices and law.  But I have gone with tradition here and dated the "fall" of the empire to 476 when the Roman Emperor was deposed and not replaced.