FT103: “If General Grant used Keynesian tactics he wouldn’t have given up the attack on Cold Harbor until all of his soldiers were dead.” Old Pithy

Posted by PITHOCRATES - February 3rd, 2012

Fundamental Truth

On the Eve of Cold Harbor Grizzled Union Veterans pinned Scraps of Paper with their Names and Home Cities Inside their Jackets

General Grant has a few reputations.  That he was a drunk.  He wasn’t.  He just couldn’t hold his liquor.  And he hated inactivity.  And being away from his family.  Two things that led him to drink.  They also called him a butcher.  That he cared little for his men.  Which wasn’t true.  The bloodiest single day of battle in the Civil War was the Battle of Antietam.  Grant wasn’t there.  The bloodiest battle was the three days at Gettysburg.  Grant wasn’t there.  One of the greatest Union defeats was at Fredericksburg.  Grant wasn’t there.  So it wasn’t Grant.  It was the tactics used in the Civil War.  Napoleonic tactics.  Massing great ranks of soldiers opposite great ranks of soldiers.  Fire a few shots.  Close in on each other.  Then finish the job with the bayonet.  And plenty of finishing was needed as those Napoleonic weapons weren’t rifled.  Or all that accurate.

The weapons were rifled, though, in the American Civil War.  And far more accurate.  So they killed a lot of soldiers as they massed and fired.  And killed even more as they closed in to finish the job.  They soon learned that massing troops in the open on the field of battle was not a good idea.  Instead they looked for good ground to defend.  At Antietam there was a sunken road in the center of the Confederate line.  One of the first trenches used in warfare.  Lee failed at Gettysburg because General Ewell failed to take the high ground on the eve of the first day of battle.  Over night the Union entrenched strong defensive positions.  That held for days 2 and 3.  At Fredericksburg there was another sunken road.  This one was behind a stone wall.  It was also on the high ground.  And that’s where the Confederates were when the Union attacked.  And lost the battle.

General Lee was a combat engineer in the Mexican War.  Some called him the King of Spades.  So fortifying defensive positions was something he was good at.  And became better at.  Building breastworks.  Which even the odds in battle when a numerically superior force attacks a smaller entrenched force.  Like at Cold Harbor.  Where the breastworks zigzagged for 5 miles.  Allowing the defenders to shoot into the front of the attacking force.  As well as into the side of the attacking force.  Which is why on the eve of battle the grizzled veterans in the Union Army pinned scraps of paper with their names and home cities inside their jackets.  An early dog tag.  So when they attacked those heavily fortified defensive positions in the morning their surviving comrades could identify their bodies and send them home to family for burial.  Which, sadly, proved very useful after the battle.

The Problem with Keynesian Economics is that it interferes with Market Prices causing Inflation and Bubbles

The attack was over in less than an hour.  Seven thousand Union soldiers fell killed or wounded.  Grant regretted his order to attack until his dying day.  And he wouldn’t give such an order again.  Because he learned the folly of attacking entrenched positions.  And began adjusting his tactics to match the technology of the battlefield.

Sometimes it’s easier to identify failed policies in war.  It may have taken some time.  But it eventually became clear.  For when the casualty rates soared people were less willing to send their sons off to war.  Making the cost of those failed policies very real.  And personal.  Not abstract numbers.  Like in economics.  Where few understand what Keynesian economics is.  Or how to identify if these policies work.  Or if they fail.  For if you listen to Keynesian economists they never fail.  And when they do it’s not because they’re wrong.  It’s because those using them weren’t bold enough.  Such as using a Keynesian economic stimulus to pull an economy out of a recession.  It didn’t work in the Seventies.  And it didn’t work in the most recent recession.  The Great Recession.  And how do Keynesians explain this failure?  The economic stimulus wasn’t big enough.

The problem with Keynesian economics is that it interferes with the market forces.  By denying reality.  The business cycle.  The cycle between good economic times and bad economic times.  From periods of expanding economic activity to periods of contracting economic activity.  It’s this second half of the business cycle that Keynesians were especially trying to deny.  Recessions.  Those things that correct prices at the end of a growth cycle.  Before inflation can set in and wreak its havoc.  And when Keynesians interfere with this market mechanism the market doesn’t correct prices before inflation sets in.  So prices keep rising.  And they create asset bubbles.  Like housing bubbles.  Like the one that led up to the Subprime Mortgage Crisis.  And because Keynesians interfered all they did was delay the inevitable.  Allowing prices to rise higher than they normally would have.  Which meant they had further to fall.  Creating a longer and more painful recession than there would have been had they not interfered.

Unlike a Keynesian, General Grant Recognized a Failed Policy and Stopped Using It

Keynesians try to reduce economics down to a set of mathematical equations.  That they accept on faith.  Blinded by their ideology.  And refuse to recognize their failure.  Which is why they continue to interfere with market forces.  And continue to make recessions longer and more painful than they need be.  While strewing a swath of economic destruction in their path.  Like all of those home owners who lost so much value in their houses that their mortgages are now greater than the market price of their house.  Many lost their retirement nest egg in the process.  Some even had to alter their retirement plans because of their losses.  Or go back to work in their retirement.

These aren’t bodies littering a battlefield.  But the Keynesian carnage has destroyed lives just the same.  Impoverishing future generations to pay for their inept policies.  For people not even born today will have a tax bill so great that it will diminish their living standard far below what we enjoy today.  As bad as that is what’s worse is that they don’t change their policies after these failures.  Believing that the only reason they’ve failed is because they didn’t try them on a grand enough scale.  Or the government quit them before they had a chance to work. 

Thankfully General Grant didn’t use such Keynesian thinking at Cold Harbor.  Had he used such reasoning he would have ordered a second assault.  And a third. And kept ordering them as long as he had living men to send in against that entrenched defense.  But he didn’t.  Why?  Because he was smarter than a Keynesian.  He recognized a failed policy.  And stopped using it.

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