pulitzer prize winner

On The Guns of August

I recently finished reading The Guns of August, the Pulitzer Prize-Winning Classic about the Outbreak of World War I, by Barbara W. Tuchman.

Below are key excerpts from the book that I found particularly insightful:

Wilson, facing this group of “ignorant men,” as he called them, and accompanied by his fellow officer and future chief, Sir John French, “who knows nothing at all about the subject,” pinned up his great map of Belgium on the wall and lectured for two hours. He swept away many illusions when he explained how Germany, counting on Russia’s slow mobilization, would send the bulk of her forces against the French, achieving superiority of numbers over them. He correctly predicated the German plan of attack upon a right-wing envelopment but, schooled in the French theories, estimated the force that would come down west of the Meuse at no more than four divisions. He stated that, if all six British divisions were sent immediately upon the outbreak of war to the extreme left of the French line, the chances of stopping the Germans would be favorable.

Coming from Haldane this conclusion had a profound effect upon Liberal thinking and planning. The first result was a naval pact with France by which the British undertook at threat of war to safeguard the Channel and French coasts from enemy attack, leaving the French fleet free to concentrate in the Mediterranean. As this disposed the French fleet where it would not otherwise be, except by virtue of the agreement, it left a distinct obligation upon Britain…This curious document managed to satisfy everybody: the French because the whole British Cabinet Government had now officially acknowledged the existence of the joint plans, the antiwar group because it said England was not “committed,” and Grey because he had evolved a England was not “committed,” and Grey because he had evolved a formula that both saved the plans and quieted their opponents. To have substituted a definite alliance with France, as he was urged in some quarters, would “break up the Cabinet,” he said.

War pressed against every frontier. Suddenly dismayed, governments Struggled and twisted to fend it off. It was no use. Agents at frontiers were reporting every cavalry patrol as a deployment to beat the mobilization gun. General staffs, goaded by their relentless timetables, were pounding the table for the signal to move lest their opponents gain an hour’s head start. Appalled upon the brink, the chiefs of state who would be ultimately responsible for their country’s fate attempted to back away but the pull of military schedules dragged them forward.

How far reduced, how distant the end, no one yet knew. No one could realize that for numbers engaged and for rate and number of losses suffered over a comparable period of combat, the greatest battle of the war had already been fought. No one could yet foresee its consequences: how the ultimate occupation of all Belgium and northern France would put the Germans in possession of the industrial power of both countries, of the manufactures of Liege, the coal of the Borinage, the iron ore of Lorraine, the factories of Lille, the rivers and railroads and agriculture, and how this occupation, feeding German ambition and fastening upon France the fixed resolve to fight to the last drop of recovery and reparation, would block all later attempts at compromise peace or “peace without victory” and would prolong the war for four more years.

At the time of the disaster General Marquis de Laguiche, the French military attache came to express his condolences to the Commander • in Chief. ‘We are happy to have made such sacrifices for our Allies,” the Grand Duke replied gallantly. Equanimity in the face of catastrophe was his code, and Russians, in the knowledge of inexhaustible supplies of manpower, are accustomed to accepting gigantic fatalities with comparative calm. The Russian steam roller in which the Western Allies placed such hopes, which after their debacle on the Western Front was awaited even more anxiously, had fallen apart on the road as if it had been put together with pins. In its premature start and early demise it had been. Just as the Grand Duke said, a sacrifice for an ally. Whatever it cost the Russians, the sacrifice accomplished what the French wanted: withdrawal of German strength from the Western Front. The two corps that came too late for Tannenberg were to be absent from the Mame.

But Francois faced battle, whereas Kluck, thinking he faced only pursuit and mopping up, ignored the precaution. He believed the French incapable, after ten days of retreat, of the morale and energy required to turn around at the sound of the bugle and fight again. Nor was he worried about his flank. “The General fears nothing from the direction of Paris,” recorded an officer on September 4. “After we have destroyed the remains of the Franco-British Army he will return to Paris and give the IVth Reserve the honor of leading the entry into the French capital.”

In conclusion:

After the Marne the war grew and spread until it drew in the nations of both hemispheres and entangled them in a pattern of world conflict no peace treaty could dissolve. The Battle of the Mame was one of the decisive battles of the world not because it determined that Germany would ultimately lose or the Allies ultimately win the war but because it determined that the war would go on. There was no looking back, Joffre told the soldiers on the eve. Afterward there was no turning back. The nations were caught in a trap, a trap made during the first thirty days out of battles that failed to be decisive, a trap from which there was, and has been, no exit.

A recommended read in the areas of history and military conflicts.

On Den Of Thieves

I recently finished reading Den Of Thieves – by Pulitzer Price Winner, James B. Stewart.

Below are key excerpts from the book that I found to be particularly insightful:

Even now it is hard to grasp the magnitude and the scope of the crime that unfolded, beginning in the mid-1970s, in the nation’s markets and financial institutions. It dwarfs any comparable financial crime, from the Great Train Robbery to the stock-manipulation schemes that gave rise to the nation’s securities laws in the first place. The magnitude of the illegal gains was so large as to be incomprehensible to most laymen.

Nor were these isolated incidents. Only in its scale and potential impact did the Milken-led conspiracy dwarf others. Financial crime was commonplace on Wall Street in the eighties. A common refrain among nearly every defendant charged in the scandal was that it was unfair to single out one individual for prosecution when so many others were guilty of the same offenses, yet weren’t charged. The code of silence that allowed crime to take root and flourish on Wall Street, even within some of the richest and most respected institutions, continues to protect many of the guilty. To dwell on the ill-gotten gains of individuals, however, is to risk missing the big picture. During this crime wave, the ownership of entire corporations changed hands, often forcibly, at a clip never before witnessed. Household names—Carnation, Beatrice, General Foods, Diamond Shamrock—vanished in takeovers that spawned criminal activity and violations of the securities laws.

Nor should the financial implications of these crimes, massive though they are, obscure the challenge they posed to the nation’s law-enforcement capabilities, its judicial system, and ultimately, to the sense of justice and fair play that is a foundation of civilized society. If ever there were people who believed themselves to be so rich and powerful as to be above the law. They were to be found in and around Wall Street in the mid-eighties. If money could buy justice in America, Milken and Drexel were prepared to spend it, and spend it they did. They hired the most expensive, sophisticated, and powerful lawyers and public-relations advisors, and they succeeded to a frightening degree at turning the public debate into a trial of government lawyers and prosecutors rather than of those accused of crimes. But they failed, thanks to the sometimes heroic efforts of underpaid, overworked government lawyers who devoted much of their careers to uncovering the scandal, especially Charles Carberry and Bruce Baird, in the Manhattan U.S. attorney’s office, and Gary Lynch, the head of enforcement at the Securities and Exchange Lynch, the head of enforcement at the securities and exchange ness of crime on Wall Street after a decade of lax enforcement sometimes overwhelmed their resources. Not everyone who should have been prosecuted has been, and mistakes were made. Yet their overriding success in prosecuting the major culprits and reinvigorating the securities laws is a tribute to the American system of justice.

For Levine, the experience only reinforced his view that without extraordinary measures, he was never going to realize his grand ambitions. Not that he was particular surprised. As he told Wilkis constantly, he was convinced that everyone was using inside information to get ahead: the game was rigged.

The causes of the boom were probably as much psychological as financial, though many economic explanations have been offered to explain the sudden, almost frenzied effort to buy existing companies rather than create new ones. Throughout the 1970s, investors had focused on company earnings, and the corresponding price/ earnings ratios, as a measure of value. With an economy ravaged by post-Vietnam War and OPEC-induced inflation, high tax rates, and soaring interest rates, profits had been meager. So stock prices Stayed low even as inflation pushed the value of income-producing assets ever higher. Coupled with low-priced assets was the tax code’s very generous treatment of interest payments on debt. Corporate dividends paid on stock aren’t deductible; interest payments on debt are fully deductible. Buying assets with borrowed funds meant shifting much of the cost to the federal government. The election of Ronald Reagan in 1980 sent a powerful “anything goes” message to the financial markets. One of the first official acts of the Reagan Justice Department was to drop the government’s massive ten-year antitrust case against IBM. Bigness apparently wasn’t going to be a problem in the new era of unbridled capitalism. Suddenly, economies of scale could be realized in already oligopolistic industries such as oil, where mergers wouldn’t even have been considered in the Carter years.

Yet history offers little comfort. The famed English jurist Sir Edward Coke wrote as early as 1602 that “fraud and deceit abound in these days more than in former times.” Wall Street has shown itself peculiarly susceptible to the notion, refined by Milken and Boesky and their allies, that reward need not be accompanied by risk. Perhaps no one will ever again dominate the financial world like Milken with his junk bonds. But surely a pied piper will emerge in some other sector. Over time, the financial markets have shown remarkable e resilience and an ability to curb their own excesses. Yet they are surprisingly vulnerable to corruption from within. If nothing else, the scandals of the 1980s underscore the importance and wisdom of the securities laws and their vigorous enforcement. The Wall Street criminals were consummate evaluators of risk—and the equation as they saw it suggested little likelihood of getting caught.

A highly recommended read in the area of finance.