Here are a few more photos of Hoover, mostly from the 1930s (from the National Archives):



Clowning around with two show girls.



At the Stork Club in New York City.

With actor Edward G. Robinson.

Explaining an operation with his office map.

Wearing reading glasses.

At his office desk.

Order between now and January 1, 2012 and save:

      –eBooks: all for $2.99 — whether Kindle, Nook, or iTunes. 

      –Paperbacks: Order direct and save 25%. Here’s how:

For YOUNG J. EDGAR, click here and use discount code   LXKAAXDG

For BOSS TWEED, click here and use discount code   Y8CTBF8Z

For DARK HORSE, click here are use discount code   97WX8YHY

Washington, D.C., May 10, 1924, four years after the Palmer Raids. 

    THE DOOR CLOSED and J. Edgar Hoover found himself alone with his

boss, Harlan Fiske Stone, the new Attorney General of the United

The photo shows J. Edgar Hoover, circa 1920.

States. “He told me brusquely to sit down and looked at

me intently over the desk,” Edgar recalled years later,

telling the story for the hundredth  time. He snapped to

the command. Stone cut an imposing figure. He stood

        Stone wasted no time on small talk. Edgar tried to

raise administrative odds and ends, but Stone cut him off.

“Then he said to me ‘Young man, I  want you to be

Acting Director of the Bureau of Investigation.’”

               J. Edgar Hoover still had boyish good looks in 1924: wavy dark hair, a

bright face, and flashy brown eyes. He dressed smart in the latest fashions,

double-breasted suits, vests, spats, cashmeres and tweeds, crisp white shirts,

like any other up and coming child of the Jazz Age. He spit out his words in

a confidant fast staccato, a delivery he had forced on himself as a teenager to

stop stuttering. He had to be thrilled at the offer. The new Attorney General

was paying him a stunning compliment and offering a rare career opportunity.

He looked back across the desk at Stone and studied the older man’s brown

eyes peering back over his glasses, the bushy eyebrows, the massive forehead,

the receding brown hair.

Leonardo DiCaprio as young Hoover from the film “J. Edgar”

               “I’ll take the job, Mr. Stone, but only

on certain conditions,” he answered. Harlan

Stone gave a quizzical look. It took a rare

cockiness for anyone, certainly a youngster like

J. Edgar Hoover, to play coy at a moment like

this, on being offered a top Federal post.
 
            Stone had spent weeks trying to decide

whom to pick as the new chief for the Bureau

of Investigation. Scandal engulfed Washington

in 1924, the notorious

“Teapot Dome,” named for the stretch of Wyoming desert that held

one of the United States Navy’s principal oil reserves. Interior Secretary Albert

B. Fall faced prison for leasing these lands to oil industry friends in 1922

in exchange for bribes, prompting a criminal prosecution making headlines

across the country. But the scandal went deeper. Senate hearings that spring

had uncovered a sewer of corruption at the Department of Justice and its Bureau

of Investigation: graft and kickbacks from gangsters and bootleggers,

agents with criminal records, badges being issued to private provocateurs

(called “dollar-a-year men”) who grew rich on extortion, and Bureau agents

assigned to harass members of Congress. As the details came out, insiders

tagged Justice with a new name: the Department of Easy Virtue.

Harlan Fiske Stone in 1924.

           In March 1924, a new President, Calvin Coolidge,

brought in a new Attorney General to clean up the mess, an

old-line reformer and long-time dean of New York’s

Columbia University Law School. This new man was

Harlan Fiske Stone.
      
           Reaching Washington in April 1924, Stone barely

knew where to start.  “When I became Attorney General, the

Bureau of Investigation was…in exceedingly bad odor,” he

recalled.  Reaching the Justice Department building on

Vermont Avenue, Stone found himself an outsider,

surrounded by strangers. “I don’t know whom to trust; I

don’t know any of these people,” he lamented.

              Installing a new chief at the Bureau of Investigation

would be his biggest step yet. The day before, on May 9, 1924, he had fired the Bureau’s corrupt

sitting Director, a cigar-chomping, wise-cracking former private detective namedWilliam J. Burns. Now,

to replace him—at least temporarily—he had sent for J. Edgar Hoover.

             Edgar had no social pedigree and no Ivy League diploma. He had earned

his law degree from George Washington University and his father had been

a mere government clerk, a map printer at the U.S. Coast and Geodetic Survey.

And he was so young, younger than most of the Bureau agents he’d be

expected to supervise. Would they respect him? Would he have the backbone

to stand up to older entrenched powers? Oddly, Harlan Stone thought

yes.Who could miss the hard work, the professional polish, the competence

of the young man? Stone frequently saw Edgar working long hours at the office,

staying well past dinner each night and routinely working on weekends.
 
Edgar had a command of detail, an ability to decide questions, and a willingness

to give orders. He seemed to have no social life, no girl friends and few

close office buddies. Other than belonging to a handful of men’s clubs like the

Masons, the Sigma Delta and Kappa Alpha fraternities, and the University

Club, he made his job his life.

            And now, this latest wrinkle—the fact that this young J. Edgar Hoover

had the composure and confidence to set his own conditions on the job as Bureau

Chief—only deepened Harlan Stone’s growing respect.

           “What are they?” the Attorney General asked.

           Edgar had come prepared. As Stone studied him from across his polished

desktop, Edgar proceeded to lay out an agenda of ideas that couldn’t help but

impress even the most zealous reformer. “The Bureau must be divorced from

politics and not be a catch-all for political hacks. Appointments must be

based on merit. Promotions will be made only on proven ability. And the bureau

will be responsible only to the Attorney General.”

           Despite his age, Edgar already counted himself a Justice Department veteran

by 1924, having worked there for seven years since starting in 1917 as a

22-year-old clerk. It had been Edgar’s first job after earning his law degree, and

he’d made the most of it.
 
         America had entered WorldWar I during that summer of 1917 and Edgar

should have topped any list for military service. He was smart, fit, and welltrained,

valedictorian of his high school graduating class, captain of its cadet

corps and leader of its track and debate teams. He even led the school’s cadets

marching down Pennsylvania Avenue inWoodrowWilson’s 1913 inaugural

parade. Born and raised inWashington, D.C. in a modest neighborhood near

the U.S. Capitol, a few boyhood friends still called him “Speed,” a nickname

he earned as a 10-year old when he carried grocery bags for a few nickels for

old ladies in the neighborhood. A typical high school report card gave him

good grades for English, French, History and Physics, but perfect grades,

straight E’s, for Neatness.

           His mother raised him Lutheran and he once sang soprano in the church

choir, through he switched and joined a Presbyterian church as a teenager,

drawn by a charismatic local preacher who organized baseball games and got

Edgar to teach Sunday school.

            But family duty had squelched any thought of his joining the Army in

1917. That spring, Edgar’s father had been forced by higher-ups to quit his job

as a Federal government clerk after 42 years, losing his pension and leaving
 
the family with no income. Earlier, his father had been committed to an asylum

in Laurel, Maryland, for chronic depression, what his doctors called

“melancholia,” a little-understood, debilitating condition marked by dejection,

self-loathing, disinterest in the outside word and suicidal thoughts.

Edgar, the youngest of three children, became his parents’ main financial support.

So as America went to war in 1917 and he watched school friends ship

off to face death in European trenches, Edgar stayed home and used a family

tie to win a draft-exempt desk job at the Justice Department.

             At Justice, Edgar had engineered a meteoric rise. During the War, he

went to work for the newly-formedWar Alien Enemy Bureau, responsible for

tracking German residents on U.S. soil. He earned repeated promotions and,

after the Armistice, won a spot on the Attorney General’s staff, then another

series of promotions in the Department’s Bureau of Investigation. By 1924,

Edgar had climbed the ladder to become one of Justice’s top officials.

            He had mostly kept his nose clean during Teapot Dome. As the scandals

worsened, he avoided them by burying himself in the Bureau’s routine paperwork

and a few special cases that caught his eye. By the time the new Attorney

General called him in for a talk, he had prepared himself to deliver a

perfect pitch. Harlan Stone found Edgar’s conditions very appropriate; in fact,

they were exactly what he wanted to hear. “I wouldn’t give [the job] to you

under any other conditions,” Stone told him from across the desk. Then, just

as abruptly, he ended the conversation. “That’s all. Good day.”

           Edgar followed Stone’s lead in executing a catalog of new reforms. He

fired scores of incompetents, hacks, and dollar-a-year men, raised standards

for new recruits, and directed his agents to stop the political witch hunts and

keep the Bureau’s activities “limited strictly to investigations of violations of

law,” as Stone put it.  In applying the rules, Edgar refused to be bullied by

politicians, and Stone consistently backed him. Stone was delighted with his

protégé. He praised Edgar as “a man of exceptional intelligence, alertness,

and executive ability” who gave “far greater promise than any other man I had

heard of.”

             Stone took only seven months to declare his experiment a success. In

December 1924, he named Edgar the permanent Director of the Bureau of Investigation,

later renamed the FBI.

           J. Edgar Hoover would hold the Directorship for forty-eight years, until

the day he died in 1972 as the most controversial law enforcement figure of

the Twentieth Century. He would achieve mythic status in America, building
 
the FBI into a pillar of government, with over 8,600 agents and a budget

of $336 million. His reorganization of the Bureau in the 1920s under Harlan

Fiske Stone drew wide praise. In the 1930s, he made headlines solving the

Lindbergh baby kidnapping case and capturing or killing gangsters like John

Dillinger, George “Machine Gun” Kelly, and Lester “Baby Face” Nelson. He

introduced scientific crime fighting, an FBI National Academy and Crime

Laboratory, Uniform Crime Reports, and a Fingerprint Division whose files

by 1974 held a staggering 159 million sets of prints. In the 1940s and 1950s,

boys across the country dreamed of growing up to be G-Men, portrayed on

screen by movie and television stars like James Cagney, Jimmy Stewart, and

Efrem Zimbalist, Jr.

             But all these achievements came with a cost. By the 1960s, his abusive

probes of leftists, VietnamWar protestors, and Civil Rights leaders likeMartin

Luther King, Jr. made him a figure to be feared. Stories abounded about

Hoover’s power, how he could blackmail presidents, senators, and movie stars

with voluminous, secret sex files that he kept on so many. Even after death,

his legend grew. Congressional probes would reveal decades of FBI abuses:

black bag jobs, covert wiretaps, and systematic violations of law. Later biographies

cast him in surprising roles, some doubtful, some plausible, from stories

of cross-dressing to suggestions of his being one of America’s highest ranking

gay men, or the descendant of an African-American ancestor.*
________________________
* Hoover’s homosexuality, now part of the accepted legend, has never been established and is
doubted by some biographers. The cross-dressing story, unearthed by Anthony Summers in his 1993

biography, has raised particular doubts because it seems contrary to Hoover’s extreme discretion and

self-discipline; its sourcing has been questioned by, among others, biographers Athan Theoharis

and Richard Hack. If Hoover had a gay relationship, it was probably a stable, monogamous, and

discreet one with long-time confidante and FBI associate director Clyde Tolson, but this too is unproven.

Hoover’s attraction to sex secrets and sex files, though, is well established. The possibility

of his having an African-American ancestor, explored by Millie McGhee, is not unlikely given

Hoover’s father’s family roots in Virginia and Maryland in the Antebellum South.
__________________________

              Throughout his life, Edgar never tired of telling the story of how Harlan

Stone first asked him to take the job of Director back inMay 1924. He made

it part of his legend. He required every young FBI recruit for the next fifty

years to learn it in basic training. He insisted that every authorized FBI history

feature it as an icon. No one ever questioned the story’s truth.

            But this too, like most things involving J. Edgar Hoover, had a dark side.

The story was based on a lie. In fact, it was Edgar’s favorite kind: the elegant

silence of a kept secret. The conception was not immaculate at all. In convincing
 
Harlan Stone to give him the acting job that day in 1924, bright,

fresh-faced, earnest young J. Edgar Hoover had cheated the older man.

                                                            

                Of all the abuses bothering Harlan Fiske Stone on that cool spring day in

May 1924 when he decided to choose Edgar as his instrument to reform the

tarnished Bureau of Investigation, none rankled him more than the anticommunist

crackdowns of 1919 and 1920, already known infamously as the

Palmer Raids. They were named for his predecessor, Attorney General A.

Mitchell Palmer, once a leading progressive who now lived in sad obscurity

inWashington, D.C. But back during his height of power in 1919 and 1920,

Palmer had directed Federal agents and local police to go and round up between

5,000 and 10,000 people in a three-month orgy of government bullying.

Many were held for months in cramped, filthy, makeshift prisons, beaten,

brutalized, railroaded, denied lawyers or access to family members, then released

with no explanation, never charged with a crime.

            The nation had seemed to go berserk that year, hypnotized by a Red

Scare, with Palmer and his circle fanning a paranoid fever against communists,

anarchists, radicals, socialists, or anyone not “100 percent American,”

as they called it.
           
            Only the outspoken resistance of a handful of lawyers had turned public

opinion against the crackdown and saved thousands of innocent people from

being deported. Harlan Fiske Stone had been one of these dissenters. At the

panic’s height, he had risked his job and reputation to denounce the Red

Raids. Stone had submitted public testimony to a Senate investigating committee

accusing Palmer and his Justice Department of ignoring constitutional

rights, conducting warrantless arrests and searches, and abusing Federal

power.8

             J. Edgar Hoover had been Palmer’s Special Assistant when the Raids

began on November 7, 1919, and he had his fingerprints all over them.

Palmer had assigned Edgar to run the Justice Department’s Radical Division

which planned and led the operation. Edgar publicly argued its highest profile

legal cases and sat at Palmer’s right hand on Capitol Hill when Palmer testified

about the Raids to two different Congressional investigating committees.

In internal debates, Edgar consistently argued the most strident views:

demanding more arrests, higher bail, fewer rights for detainees, and a tougher

line against anyone who stood in the way. Edgar had ordered Bureau agents
 
to compile large dossiers against many of its critics, painting them as Parlor

Bolshevists and Red sympathizers, ammunition to smear them at a moment’s

notice. His files covered 450,000 people by 1921, a remarkable feat for the

pre-computer age, and they included many of Harlan Stone’s closest personal

friends, including lawyers, professors, and even a sitting United States

Supreme Court Justice, Louis Brandeis.

            None of these facts, though, seemed to reach Harlan Stone inMay 1924.

Instead, as the new Attorney General, Stone got exactly the opposite impression:

that young J. Edgar Hoover had played at most a minor role in the

affair. It only made sense: Edgar had been just 24 years old at the time of

Palmer’s Raids, just two years out of law school. “[H]e was just a kid, and he

always insisted that he was only doing his job,” claimed Ugo Carusi, Harlan

Stone’s executive assistant, “and I wouldn’t challenge that, because I can’t

imagine policy being made by a fellow in his early twenties.”9

          Edgar himself would spend a lifetime denying any major role in the Raids.
 
His FBI publicity machine would blast as a “vicious and false…smear” that

he had led them. Edgar would tell one biographer that he “parted company”

with his Justice Department bosses “in the illegal methods and the brutality

sometimes employed in rounding up aliens [and was] appalled [by] agents who

lacked any knowledge of the rules of evidence and who made arrests which

could not stand up in court.”10 In 1924, he would tell Roger Baldwin, head of

the recently formed American Civil Liberties Union, created in response to

the Raids, that he played only an “unwilling part.”

             And Harlan Stone believed it.

             To most Americans, it didn’t seem to matter. The world had changed

quickly since the dark days of 1919. America entered the Roaring Twenties,

a happy time of Coolidge prosperity, of jazz, flappers, and speakeasies, Babe

Ruth on the diamond, Jack Dempsey in the ring, Al Jolson on Broadway, live

ballroom music on the radio,Mary Pickford and Lillian Gish on the silent silver

screen, Post Toasties on the breakfast table, F. Scott Fitzgerald on the

bookshelf, and Sigmund Freud in the bedroom. Life was good. People had little

time to care about communists or other spooks.

               But back in 1919, just four years earlier, it had all made perfect sense—

the Red Scare, the Raids, the fear. Most thinking, informed Americans

agreed:WorldWar I had ended but the country was still fighting, against anarchists

and communists at home just as surely as it had fought the Kaiser’s

Germany in Europe the year before. American soldiers still faced bullets onRussian soil in 1919 and
 
Bolshevism was sweeping the world. Anarchists had

exploded bombs in American streets and people had been killed. Radicals

had infiltrated labor unions and threatened to topple major industries. The

country demanded safety and somebody had to act.

               A.Mitchell Palmer and his team had taken responsibility. Had there been

excesses? Certainly. But that didn’t change the fact. The principal fact was the

bombs, and the danger of more bombs, and the duty to protect Americans.

Everything else took a back seat.

Here’s a first look at a great new book by Cold War historian Jim Hershberg on the Vietnam War, from Publishers Weekly.  Check it out:  



Operation Marigold is typically treated as little more than a footnote to the American war in Vietnam, but cold war historian Jim Hershberg, of George Washington University, unalterably changes that view. 

President Lyndon Johnson, who scuttled 1966 peace talks by turning loose the bombers.

This book delves into every aspect of Operation Marigold, a failed secret mission led by Polish diplomat Janusz Lewandowski, to set up peace negotiations between the U.S. and North Vietnam in the last weeks of 1966. The conventional wisdom was that the presumptive talks had little chance of success, since both sides believed they could prevail militarily and had no reason to talk, which is what President Johnson claimed to his dying day. 


Based on his reading of newly released documents and primary sources—including his own interviews with Lewandowski—Hershberg shows that Johnson’s decision to resume bombing Hanoi after a five-month pause caused the collapse of the talks before
they began. 


Hershberg also convincingly shows that the Poles (along with Italian diplomats) had authorization from the Vietnamese Communists to approach the Americans to start peace talks—something Johnson and his supporters argued was not the case. 


This is a well-written, in-depth look at the facts of a controversial and convoluted peace effort that could have significantly altered the course of the Vietnam War. Maps, photos.   —  Publisher’s Weekly, October 10, 2011.  


Jim Hershberg if also the author of James B. Conant: Harvard to Hiroshima and the Making of the Nuclear Age.

How do you get 1.5 million people to sit through a six minute film on the testy relationship between Abraham Lincoln and Frederick Douglass during the Civil War and how it shaped the elimination of slavery? Or get another 1.3 million to watch another six minute film on Nicola Tesla and his early experiments in electricity? Or get another 1.3 million to watch a five minute video about Benjamin Franklin?

Here’s an idea: How about getting the film’s narrator to first swallow down an entire bottle of brandy, or a bottle and a half of wine, and then stagger through the story in semi-coherent rants, occasionally collapsing on a sofa or babbling to themselves, while celebrity actors like Will Farrell and John C. Reilly play the key title roles? This, basically, is the concept behind Drunk History,  a wildly popular production of the Funny or Die web site.

Here’s a sample above. Try it out, or visit their web site for more.

It’s always good to find new, interesting ways to tell history, ways that get people to listen and make them passionate about it.

Here’s to a clever idea. I need a drink.

The first four titles for Viral History Press – coming October.  No kitchen should be without them.

Mark your calendars.  Something new is coming in October: Viral History Press.

Viral History Press, LLC,  is our latest business venture, a new, cutting-edge, independent small publishing house.  Like Viral History Blog, the new Press dedicates itself to keeping history alive, vital, and relevant.

History zealots — you are not alone!

New technology has changed the face of publishing.  The Internet creates freedom, puts power in the hands of individuals, and opens exciting new opportunities for direct, instant contact.  eBooks, print-on-demand, mobile applications, iPads and slates, have shaken the roots of traditional reading, and waves of change keep pounding the beach. 
  
Viral History Press is our attempt to use new tools to empower writers.  We will use new technology to reach readers directly: 

• Physical books via print-on-demand, through Amazon.com, Barnes and Noble, and other outlets;
• e-Books through Kindle, Nook, and Apple: 
• Audiobooks through iTunes and Amazon.com, and 
• Blogging to keep in touch instantly on daily issues.   

Flat Stanley loved Boss Tweed.  So too did the New York Times Book Review,  Washington Post Book World, NPR’s “On Point,”  among others. And they’ll all love the new Viral History Press edition – coming October.

To get started, I have obtained back the publishing rights for each of my own four books: Boss Tweed, Young J. Edgar, Dark Horse, and The Gold Ring, previously released by houses including Perseus, Harper Collins, Avalon Group, and Dodd Mead.   Viral History Press has partnered with terrific artists like Zaccarine Design, Inc., of Evanston, Illinois, and Studio 6 Sense of Madison, Wisconsin, to convert these titles into top-quality PoDs and eBooks.   We plan to roll them out in new editions in October and November.  


Once we’ve worked out the publishing kinks on these, we plan to expand.  Our vision is to make Viral History Press LLC a resource for readers and writers with a special love of history and politics: writers with terrific backlist books, biographers, historians, activists, historical novelists, family sleuths and genealogists.  Being small and independent, we can tailor contracts to give writers bigger upside returns, minimize cost, side-step bureaucracy, and make best use of nimble, web-based marketing.        

That’s the vision.  Now the hard work.  Keep an eye out for us in October, and in the meantime visit our new (still very rough) web page at http://www.viralhistorypress.com/.. 

I, for one, am still hung over today after imbibing way too much intoxicating drama this week over Congress’s trying to avoid global fiscal calamity by raising the debt ceiling.

Now, at last, we have an exciting conclusion:  As of today, August 2, President Obama and Congress have reached a “deal” to raise the debt ceiling by about $2.4 trillion — enough to reach early 2013 and avoid default — in exchange for similarly-large budget cuts.  The House approved it yesterday by a vote of 269-161 and the US Senate approved it this morning.   

So calamity is avoided?  The job is done?  Is this not a big success ???

You wouldn’t think so.  All I see today are sour faces.  Nobody seems happy with the deal.  The Dow Jones Average is hardly soaring through the roof.  (It’s down 166 points at this moment.)    And all I hear are complaints — 

        (a) the process was so ugly;
        (b) Obama gave away the store;
        (c) the Tea Partiers were reckless hostage takers;
        (d) Congress was totally incompetent;
        (e) nobody cared about anyone but themselves;
        (f) the country was embarrassed, and the economy still stinks;
        (g) they turned school teachers, civil servants, and sick people into villains;       
        (h) the budget cuts are either (i) heartlessly draconian or (ii) fictitious and meaningless;
        (i) that the deal is so one-sided;
        (j) so on, (k) so forth, and (l) so on. 

[My personal favorite came from Cong. Emanual Cleaver (D-Mo.): “This is a sugar-coated satan sandwich.  If you lift the bun, you will not like what you see.”]

For me, I see three big things in the outcome, one good, two bad.  Unfortunately, at least to my eye this morning, the bad seems to overshadow the good, as follows– 

First the good news:

GOOD NEWS: The basic logic actually makes sense-

Two weeks ago, I urged a Grand Bargain on the budget by pointing to some history.  The USA has run up debts as high as today’s only twice before: during the Civil War in the 1860s and during World War II in the 1940s.  Each time, we dug our way out with a combination of (a) fiscal discipline, (b) a strong tax base, (c) economic growth, and (d) patience to stay the course for at least ten years.  (See DEBT CEILING crisis: History demands a “Grand Bargain.”)

The new debt ceiling “deal” actually gives us a good start in this direction:  It says, in effect, that any new borrowing by the US government must be matched dollar-for-dollar with reductions in future deficit spending.  Over time, if we stick to it, this approach could allow the US government to stabilize its borrowing (keep the hole from getting deeper) and ultimately balance its books.  And if we hold debt steady as the economy grows, then debt, over time, shrinks as a proportion.  A pretty good deal.
BAD NEWS 1:  It is unfair and unbalanced, making it likely to fall apart.

Unfortunartely, the debt ceiling “deal” is structured in a way that is bound to unravel.  Here why:

First, it is unfair on its face.  The package achieves all its deficit reduction from spending cuts, and none (literally not one cent) from tax increases.  This just doesn’t work.  The US tax system remains decimated by Bush-era cuts aimed primarily to benefit wealthy people and riddled with loopholes for select interest groups.  Tax collections today are as low levels not seen since the 1950s.  Failure to include any contribution from these groups is unfair and makes the whole approach unstable.   

Second, the mechanism included to address both tax and entitlement issues — a special Congressional Committee assigned to draft a $1.4 trillion deficit reduction plan by Thanksgiving, subject to a single up-or-down vote in Congress, backed by the threat of broad automatic cuts if it fails — is almost certain to fail.  Any attempt to include tax revenue in its package will threaten deadlock or rejection by House Republicans.  And if the plan includes no new tax revenue at all, then deadlock will come from the other side.  It’s that simple.  

And if the Special Committee’s plan fails and automatic cuts take effect — in January of a Presidential election year — then Congress sooner or later will find ways to avoid them, especially the military cuts.    

BAD NEWS 2: The precedent promises constant future turmoil.

Finally, we now have three recent examples of conservative Republicans creating artificial crises and using them to blackmail the Obama White House into making concessions on taxes and budget cuts:

• The deal to extent the Bush tax cuts (December 2010: a 2-year extension in return for not cutting off unemployment insurance and for allowing a temporary reduction in payroll taxes);
• The Continuing Resolution (April 2011: $30 billion in spending cuts in return for not closing the government); and
• This week’s debt ceiling thriller.

This is a winning formula for budget-cutting Republicans, and the Obama White House has failed so far to figure out an effective response.  As a result, we can expect more. 

All of this means that, more likely than not, we will be back within a few months for the next crisis.  Next time, let’s plan ahead, push back, and not get saddled with a deal that gives us all a hangover.

Cartoon by Marshall Ramsey of Creators Syndicate.

Just when you think Washington can’t screw it up any worse…..  


For weeks, as the Capitol has consumed itself in its summer tragi-comic fire drill to raise the debt ceiling, expert after expert has come forward with cataclysmic predictions that if the USA actually does end up defaulting on its $14.3 trillion debt on or about August 2 — the current target — financial markets will implode.  Investors will dump American stocks and bonds and send the country careening into fiscal chaos, a depression worse than the 1930s.  Are they right? 


Unfortunately, with President Obama, Speaker Boehner, and the other Capitol Hill leaders apparently incapable either of solving the puzzle or trusting each other with a deal, it now looks increasingly like we’re going to find out. 


So while the rest of the country faces calamity, we at Viral History have decided to mark this truly historic moment with a contest.  We call it Debt Ceiling Russian Roulette. 


See if you are any smarter than the Washington politicians and TV experts. To enter Debt Ceiling Russian Roulette, just post a comment on this Blog telling us what you think will happen to the Dow Jones Industrial Average on August 2, 2011, the day of the expected default (or August 3 if the US Treasury waits until after markets close on the 2nd to announce the default – or lack thereof).  Will the Dow Jones —

• Crash as global investors dump American assets, like the experts say?  If you think so, tell how how many points you think it will lose.  Hundreds?  Thousands?   
• Soar through the ceiling as Congress and Obama reach a surprise last-minute deal?  If so, how high?
• Stay relatively flat as investors either shrug at the latest boneheaded news from Washington or wait for other shoes to drop?  or
• Rally, having collapsed in the days beforehand, staging a technical “dead cat bounce”?  

The entry closest to the actual number (points up or down on the Dow Jones for the day) wins.  If there’s a tie, victory goes to the earlier entry.  So don’t dawdle.  No entries will be accepted after midnight, August 1. 

My own guess is that Wall Street will shrug at first, and the real ugly crash will come later in the week when overseas markets panic.  So my official entry is this: Dow Jones +12.


Enter today.  And tell your friends.  It’s free (as all speech in America should be), and the winner will receive a bottle of wine from us. 
  
[In the increasingly unlikely event they agree to raise the debt limit before the weekend, ending the crisis and making this contest moot, we’ll give a tepid half cheer and call the whole thing off.] 

Meanwhile, enjoy the hot summer weather.