SC Election Commission among 10 worst prepared: but “things that apply to other states don’t apply to South Carolina”

Update 10/28/08 – Early voters are already reporting problems with the ES&S machines in at least six states according to Facing South.  The problems seem to be related to improper callibration of the touch-screen, making the machine read a vote on one candidates’s button as for another candidate.

As this Oct 21, 2008 CNN video demonstrates, poll workers manually set the sensitivity of the touch-screen buttons on each machine.   Its easy to see how inattention or malice could lead to innaccurate returns.  This is also why the poll workers, election comissioners and voting machine suppliers blame the voters: they just aren’t finding the ‘right’ area of the screen. (transcript here).  These are the same ES&S iVotronic machines used in SC.

This sensitivity to improper calibration is the achilles heel of the touch-screen machines. If they are that prone to poor preparation, then they are wrong for use in elections.

A fuller discussion of the South Carolina problem reported in the Island Packet (Hilton Head) by Nancy Roe is found here: http://www.bradblog.com/?p=6546.  The author, John Gideon of Votersunite.org, helpfully points toward Section 301 of the Help America Vote Act, which would be violated by the reported problems.

Incidentally, CNN has done 56 stories on problems reported with ES&S machines in the last few years.

—————————-

South Carolina is among the ten worst prepared states for the November 4 election.  That’s the word from the Brennan Center for Justice in their just released report “Is America Ready to Vote?“

Some states are not at all ready.  South Carolina is one of them.   

Morris Newspapers quoted a statement from the South Carolina Election Commission that:

‘the report seeks to “undermine public confidence in … our country’s election process,” the commission said.

The report may undermine public confidence in the South Carolina Colorado, Delaware, Kentucky, Louisiana, New Jersey, Tennessee, Texas, Utah and Virginia electoral systems which received the worst rankings.  But it will increase confidence in the Alaska, California, Minnesota, Missouri, North Carolina, and Oregon systems, which received the best rankings.

The SC Electoral Commission statement went on to criticize Brennan Center saying that the ‘…report reflects an “agenda” that insists elections are only fair and accurate if voter-verified paper ballots are used.’

The SCEC has a bias against verifiable voting.  When a Florida state commission’s investigation found Electronic Systems & Software’s iVotronic machines to be unreliable, SC Electoral Commission spokesperson Gary Baum reacted by saying that SC would buy the machines rejected by Florida. Baum said to the Spartanburg Herald Journal, “Other states have had problems, which have led to questions about our system,” Baum said. “But things that apply to other states don’t apply to South Carolina.“

Research conducted by Voters Unite found 51 failures of ES&S machines in recent years: http://djsilverfish.wordpress.com/2008/09/23/voting-machine-errors/

On the plus side, South Carolina is generally good in polling place contingencies, it needs improvement in ballot reconciliation and is inadequate in keeping paper records of votes and post election auditing.  You can read a summary of the report here: http://www.brennancenter.org/content/resource/is_america_ready_to_vote.  A 188 page PDF of the entire report, covering the whole U.S. is here: Is America Ready To Vote?

Since its a busy world and people have things to do, I’m going to give you the South Carolina portions of this report in whole quotes below.  The unaltered footnotes follow.

Source: ‘IS AMERICA READY TO VOTE? state preparations for voting machine problems in 2008‘. Written by Lawrence Norden and Laura Seago, Brennan Center for Justice at New York University School of Law; Susannah Goodman, Common Cause Education Fund; Sean Flaherty and Pamela Smith, Verified Voting Foundation. Published October 16, 2008.

Page 1:

In the Republican presidential primary in Horry County, South Carolina, touch screen machines in 80% of precincts temporarily failed, and a number of precincts ran out of paper ballots and sent voters to cast provisional ballots at other precincts.6

6.Domenico Montanaro, SC Voting Problems, FIRST READ, Jan. 19, 2008, available at http://firstread.msnbc.msn.com/archive/2008/01/19/592019.aspx.

Page 14:

On Jan. 19, 2008 in Horry County, S.C., during the Republican primary, the electronic iVotronic voting machines would not start up. Eighty percent of the precincts were affected in Horry County and in 15 precincts; all of the electronic voting machines were inoperable for at least part of the day. Poll workers handed out paper ballots in the affected precincts, but some of the precincts ran out of paper ballots. Voters were sent to other precincts to cast provisional ballots.15

15. Press Release, Common Cause, South Carolina Voting Machine Failure
Underscores Need for Swift Federal Action for Voting Security (Jan. 22, 2008), available at
http://www.commoncause.org/site/apps/nlnet/content2.aspx?c=dkLNK1MQIwG&b=194883&ct=4967187

Page 23:

Fourteen states require emergency paper ballots at the polls, but four (Maryland, Alaska,
Pennsylvania and South Carolina) limit deployment of emergency paper ballots until all the machines in a precinct malfunction are inoperable. This policy ties the hands of election workers.

Page 37:

South Carolina

The contingency plans in South Carolina are generally good but need improvement in specific areas.
Procedures in place for machine repair or replacement in the event of failures South Carolina has procedures for the repair or replacement of voting machines in the event of malfunction. South Carolina law provides that if a voting machine becomes inoperative, poll workers must notify “the commissioners of election or other electoral board,” who are in charge of the election at the county level.120 The commissioners must attempt to provide a substitute machine for the polling place.121 The commissioners must also attempt to repair the machine.122

Making sure emergency paper ballots are available at the polling place in the event of long lines
South Carolina requires emergency paper ballots to be kept at the polling place, but only requires deployment in the event all machines fail. State law requires that paper ballots be provided where voting machines are used, but it limits the number of pre-printed ballots to 10% of registered voters.123 However, if the 10% is not enough, election managers must provide voters with ballots “made as nearly as possible in the form of the official ballot.”124 The law states that these ballots are the same as official ballots for election purposes.125 In other words, the law allows election workers to trouble shoot — perhaps photocopying ballots in an emergency situation — and guarantees these ballots will be treated the same as official ballots. Finally, the law requires that “failsafe ballots, or ballots containing only the races for federal, statewide, countywide and municipalwide offices,” also be provided at polling places. However, the quantity is limited to 5% of registered voters.126
Emergency paper ballots may be used when “no other machine is available for use at such election and the injured one cannot be repaired in time to continue use thereof at such election.”127
Recommendation: The contingency plans in South Carolina need improvement because the law restricts the number of official paper ballots allowed at the polling place to 10% of registered voters and of failsafe ballots to 5% of registered voters. Although the law allows for trouble shooting — creating and providing ballots “nearly in the form of the official ballot” — this must occur on Election Day. In Horry County, during the Jan. 19, 2008 Republican primary, 80% of the machines could not be activated at the start of the day due to a programming error. Some of the precincts reportedly ran out of paper ballots and were sending voters to other precincts to cast provisional ballots. It is not desirable to restrict election workers to providing only a certain number of official emergency and failsafe ballots before the election. While the law allows election workers to improvise on Election Day if there is a crisis, it should not prevent them from adequate preparation before the election. South Carolina law should be changed to lift the restriction on the number of official emergency paper ballots that can be provided in the polling place on Election Day.

120 S. C. CODE ANN. § 7-13-1870 (2008).
121 Id.
122 Id.
123 S. C. CODE ANN. § 7-13-430(A) (2008).
124 S. C. CODE ANN. § 7-13-430(B) (2008).
125 Id.
126 S. C. CODE ANN. § 7-13-430(C) (2008).
127 S. C. CODE ANN. § 7-13-1870 (2008).

Pages 119-120:

South Carolina
South Carolina’s ballot reconciliation procedures need improvement.

Account for all ballots, votes, and voters
After locking machines against further voting at the close of the polls, election managers must open each machine so that it is visible to all canvassers and observers.804 They then canvass and announce vote totals for each office and the votes for every candidate or question.805 Poll managers are required to return all voting materials.806 Poll managers must endorse a certificate that includes the number on the protective counter of each machine and return this certificate to the county election officials,807 along with the poll list and a written return of the election.808 We recommend retaining all election records and returning them after the close of polls.

Reconcile vote and ballot totals and address discrepancies at the polling place. County officials reported comparing the number of signatures in the poll books with the number of votes cast in each precinct.809 If the number of votes tabulated on voting machines exceeds the number of voters on the poll list, vote totals for each candidate will be reduced proportionate to the fraction of the votes she received to reconcile the totals.810 This is essentially an electronic version of removing excess ballots from the ballot box at random, and it is an unsatisfactory method of reconciliation. We recommend investigating the cause of any discrepancies and seeking to explain them if they cannot be resolved.

Reconcile redundancies at the county level
The county board of canvassers reviews the results provided by the precincts.811 Although this process is not required by law, county election commissions are required to compare paper voting machine total tapes to electronic precinct-level totals.812 If they discover a discrepancy during this comparison, they must locate the error and correct it before certifying the results.813 If the number of votes cast exceeds the number of voters on the poll list by 10% or more, the county election officials will order a revote for voters who are identified as having voted in the original election at the polling place in question.814 The board of canvassers must make a certified statement of the results from each precinct, which it forwards to the state board of canvassers;815 results are separated by candidate and the votes received for each.816 The state board of canvassers receives these canvassed precinct returns and makes a statement of the total number of votes received by each candidate or question.817 According to the State Election Commission, this statement is broken down by precinct.818 There are no formal laws or procedures in place governing reconciliation of memory cards with tally server totals; While the secretary of state’s office asserts that safeguards exist on the county level to ensure that all the results from voting machines used in the election are accounted for,819 county officials only report that the server prompts them to enter all memory cards.820 While this is an adequate safeguard to ensure that all memory cards have been loaded, it offers no assurance that all memory cards have been read. We recommend implementing explicit, statewide requirements that totals tapes from all voting machines or tabulators be compared with tally server totals.

Make all results public
County canvassing boards are required by law to file duplicate statements of the canvass with the State Election Commission.821 The secretary of state also publishes its certified statement of the results of the election in at least one of the public newspapers in the state.822 Detailed precinct results for each county are posted on the State Election Commission website.823

Recommendation: South Carolina’s ballot reconciliation procedures are generally good, but need improvement in specific areas. While the state has good procedures in place for reconciliations at the county level and in making results public, its precinct-level reconciliations are unsatisfactory. We recommend investigating the cause of any discrepancies between the number of voters and the number of votes cast and seeking to explain them if they cannot be resolved. We also recommend implementing explicit, statewide requirements that totals tapes from all voting machines or tabulators be compared with tally server totals.

804 S.C. CODE ANN. § 7-13-1880 (2007).
805 Id.
806 Id.
807 S.C. CODE ANN. § 7-13-1890 (2007).
808 S.C. CODE ANN. § 7-13-1150 (2007).
809 E-mail Interview with Debra Bryant, Dir. of Voter Registration, Hampton County, S.C. (Oct. 10, 2008) (on file with the Brennan Center); E-mail Interview with Marilyn Bowers, Executive Dir., Bd. of Elections & Voter Registration, Charleston County, S.C. (Sept. 29, 2008) (on file with the Brennan Center).
810 S.C. CODE ANN. § 7-13-1140 (2007).
811 See S.C. CODE ANN. § 7-17-20
812 E-mail Interview with Chris Whitmire, Pub. Info. Officer, S.C. State Election Comm’n (Sept. 25, 2008) (on file with the Brennan Center) [hereinafter Chris Whitmire interview]; see also E-mail Interview with Katy Smith, Voter Registration & Elections Dir., Anderson County, S.C. (Oct. 1, 2008) (on file with the Brennan Center).
813 Chris Whitmire interview, supra note 811.
814 S.C. CODE ANN. § 7-13-1140 (2007).
815 S.C. CODE ANN. § 7-17-80 (2007).
816 S.C. CODE ANN. § 7-17-100 (2007).
817 S.C. CODE ANN. § 7-17-240 (2007).
818 Chris Whitmire interview, supra note 811.
819 Id.
820 See E-mail Interview with Joseph Debney, Dir. of Elections & Voter Registration, Dorchester County, S.C. (Oct. 2, 2008) (on file with the Brennan Center). See also E-mail Interview with Kelly Futch, Pub. Works Clerk, Hampton County, S.C. (Oct. 1, 2008) (on file with the Brennan Center); E-mail interview with Marlyn Bowers, Executive Dir., Bd. of Elections & Voter Registration, Charleston County, S.C. (Sept. 29, 2008) (on file with the Brennan Center); E-mail Interview with Katy Smith, Voter Registration & Elections Dir., Anderson County, S.C. (Oct. 1, 2008) (on file with the Brennan Center).
821 S.C. CODE ANN. § 7-17-90 (2007).
822 S.C. CODE ANN. § 7-17-320 (2007).
823 South Carolina State Election Commission, Election Returns, http://scvotes.org/statistics/election_returns (last visited Oct. 8, 2008).
824 S.D. CODIFIED LAWS § 12-17B-9 (2008).

Page 137, 139:

Voter-Verifiable Paper Records

South Carolina: Inadequate

…even where good ballot accounting and reconciliation lets us know that certain votes have one uncounted, such knowledge will not necessarily allow us to find the uncounted votes. For  instance, in November 2004 in Carteret County, N.C., a memory limitation on the county’s  touch screen machine caused 4,500 votes to be lost. Because the machines did not have a  paper trail, it was impossible to determine how those lost votes should have been counted.981

Nineteen states [including South Carolina] use voting machines without a software independent  voter-verifiable paper record. In these states, there is a risk that, as happened in Carteret  ounty in 2004, vote totals could be corrupted or lost, and there would be no way to recover  oters’ actual choices.

In response to the concern that software errors in voting machines could result in inaccurate readings of votes, or votes lost entirely, the Technical Guidelines Development Committee of the Election Assistance Commission has recommended new standards for future voting systems that would require voting systems to produce a voter-verifiable voting record that is independent of the software.982

981 “Two weeks later, no final count in N.C. race,” Nov. 16, 2004, The News and Observer, by Lynn Bonner
http://www.verifiedvotingfoundation.org/article.php?id=5289
982 U.S. Election Assistance Commission, Technical Guidelines Development Committee, TGDC Recommended
Guidelines, Part 1, Chapter 2, Section 7, available at:http://www.eac.gov/vvsg/part1/chapter02.php/

Page 145. POST-ELECTION AUDITS OF VOTER-VERIFIABLE PAPER RECORDS

South Carolina: Inadequate

…

RATING THE STATES
States were given points toward a grade of “good” or “generally good” for audits that are (1) robust (examining more than just one or two contests), (2) comprehensive (auditing all types of systems/ballots), (3) timely (selection starts after initial count is published and completed before results are finalized) and (4) transparent and random (conducting an observably random selection of units to be audited, and of the audit count). States were also given credit for having statutory provisions that trigger expansion of the audit if unexplained discrepancies are found. To achieve an “excellent” grade, a state would have to require all of the foregoing, plus use risk-limiting or statistical audits. No states currently do so.

Points were subtracted for lack of transparency, incompleteness (that the audit cannot be — or is not required to be — conducted statewide), carrying out the random selection of machines or precincts too early (prior to election night) or where there is no clear requirement to audit top-of-the-ticket contests (e.g. president, governor, etc.).

If a state had an insufficient number of positive points, or had sufficient points subtracted, it would receive a “needs improvement” grade. Where audit requirements are in place but cannot be conducted in all jurisdictions (e.g., where some counties or systems are paperless), those states were automatically given a “needs improvement” grade. Similarly, states where an audit will be conducted this November but where there is no legal requirement to do so were automatically given a “needs improvement” grade.
States given an “inadequate” ranking will have no post-election audits this November.

Page 157: Conclusion

We urge states to do what they can to improve their procedures in the remaining weeks before the election. In the longer term, states should enact laws that will allow election officials to adequately deal with a number of potential voting system failures. For states with paperless DREs, that means changing systems so that every voter can review and confirm their vote on a paper record independent of a voting machine’s software. For states that already use voter verifiable paper records, it means passing laws that require officials to audit those paper records after every election to ensure that the machine count is accurate. For states using DREs, whether or not they produce a paper record, it means mandating a minimum number of emergency paper ballots in the event that machines fail. For all states, it means strengthening voting system security and requiring ballot accounting and reconciliation procedures that will give us greater confidence that all votes have been counted.
Most states and counties will not experience major voting system failures this election. But that fact should not lull them into complacency. Every national election since 2000 has shown us the same thing: Voting systems sometimes fail. Voters in jurisdictions with poor procedures should not have to wait, as others have in the past, for a system failure to cause the loss of thousands of votes, or shake the public’s confidence in the fairness and accuracy of their elections, before lawmakers and election officials adopt the best procedures to  prevent such meltdowns.

 

What are Rasmussen subscribers paying for?

Rasmussen Reports is a large polling firm compiling data on races all around the country. It also has a bias in favor of horserace politics.

Back in 2004, Rasmussen indicated that it would not include Nader in polls unless he was on the ballot in ‘at least 35-40 states’. This year, Nader was on 45 state ballots by mid-September and opened 22 field offices across this month. Newsweek has noticed something, but Rasmussen hasn’t.

But its not just the principle of fairness that ought to ensure that independents and minor party candidates are included in polling. Restricted polling skews analysis not only of elections but of the long term political trends that drive the campaigns.

An October 16, 2008 article on the Oregon Senate race in the free portion of Rasmussen’s site makes much of the statistically insignificant difference between the Democratic and Republican candidates. Older polls had Democrat Merkley down against the Republican Smith, so obviously this could be an upset, in sports terminology.

What Rassmussen misses is that the race includes Dave Brownlow, candidate of religious-right Constitution Party, who is pulling 7% in a SurveyUSA poll and 4% in a previous Portland Tribune poll. This is significant for a few reasons: statistically it is outside the margin of error, its growing and it shows that the religious right is more inclined to vote against the GOP than in previous years.

It would be interesting to know where Brownlow is demographically strongest. Since Rasmussen won’t include minor parties in its surveys, even buying the super subscription service won’t tell you. Survey USA will tell you that Brownlow pulls 10% shares among Asians, occasional church goers, and people making less than $50,000 per year. That is an intriguing mixture, but there’s no further breakdown available.

The fact that far-right candidates like Brownlow and South Carolina’s Bob Conley are something more than marginal figures deserves analysis. There is a split in the Republican Party between the country-club set and the right-wing populists. The temporary rejection of the President’s bailout plan by a majority of the GOP congressmen in response to popular anger at the plan is indicative of that.

If the far-right is growing more assertive, going into a recession we have to consider the lessons of the Europe, where the far-right has taken advantage of “antipathy toward globalization and capitalism” to push a xenophobic and anti-Muslim agenda.

Even as the Oregon race between the two leading candidates has tightened up, and presumably pressure to deliver reliable Republican votes has increased, an anti-abortion Christian fundamentalist who is opposed to the war in Iraq and favors the abolition of the Federal Reserve has improved in the polls.

The reason for this is simple but lies outside the horserace coverage of polling firms like Rasmussen. As gas and food prices increased, lower-income republicans began looking for alternatives.

This kind of split was probably inevitable to a degree over the war, which has dragged on, alienating small government types, civil libertarians and isolationists in the process. The economic meltdown, and the subsequent government intervention in contradiction of years of pro-market rhetoric, has created a crisis in the GOP. The right-wing movement itself is split between the Glen Beck libertarians, who believe the free market should never be interfered with and the gold-standard populists, who consider metal money a form of regulation. The differences are less perceptible now, but will become more important later if the economy worsens.

McCain may be able to keep right-winger votes through the anti-government, anti-environment appeal of Sarah Palin. He may be able to keep the libertarians, through repeated claims that Obama’s plan (which is very similar to his own) is socialism. But further down the ticket, moderate Republicans are going to lose votes on the right-wing margins.

Again, if you look at the horserace between the Dem and the Rep, then you won’t even notice these trends. And in races like the Oregon Senate contest, you’ve got to question the quality of analysis that ignores not only the margin of error but also assertive xenophobic politics.

Moonshine

Moonshine is not often in the news, what with all the other legal and illegal intoxicants that have come on the market since Prohibition.  But here in Spartanburg there is moonshine.

Moonshine can be dangerous. An improperly distilled batch can blind or poison the drinker with methanol. That’s the danger. Some people would say that’s the spice.  As much as it is illegal and rightly regarded with caution, there is a popular affection for it, if only as a topic of discussion.   Moonshine is always good for a joke.  Its also probably the oldest alcoholic product.  And every culture has it: rakija, trago, pontikka, lao lao, katchasu, etc.  Its even legal someplaces, but everywhere it has the same hell-raising reputation.

Earlier this month, Earl Fletcher Kelly of Enoree, SC, a semi-retired prison guard, was arrested following a search of his property and accused of Possession of Distillery Apparatus and Possession of Non Tax Paid Liquor, punishable by six months in jail and or $600 in fines for the first offense.

I don’t know a thing about this case or the people involved other than what I’ve read in the papers.  My curiosity was sparked by the State Law Enforcement Division’s photograph of the liquor stash.

SLED image identified as Kelly's shed in Oct 4, 2008 Spartanburg Herald Journal, Page A1.

The first thing I noticed was that the liquor is of different colors, meaning it appears to have been treated late in the production process, not just poured out of a radiator.  Some may be ciders, or flavored homemade whiskeys, produced in small batches like in a boutique liquor.  The demand for a refined product is real, at least, or else all the jars would simply be clear ’shine.

The second thing I noticed is how little product there really was.

Kelly is being charged under a state statute, but of course, home distillation of alcohol is illegal under Federal law under the Internal Revenue Code of 1986 Section 5178(a)(1) (sometimes still referenced under Section 2801(e)(2) of the 1939 Internal Revenue Code):

No distilled spirits plant for the production of distilled spirits shall be located in any dwelling house, in any shed, yard, or inclosure connected with any dwelling house, or on board any vessel or boat, or on premises where beer or wine is made or produced, or liquors of any description are retailed, or on premises where any other business is carried on (except when authorized under subsection (b)).

-TITLE 26, Subtitle E, CHAPTER 51, Subchapter B, Sec. 5178. Premises of distilled spirits plants

Exceptions may be granted by the Secretary of the Treasury in the case of businesses only, not home production. Or boats.  An unbelievably detailed Congressional discussion from 1954 concerning legislative intent underlying changes to the tax code for liquor can be found here: http://bulk.resource.org/courts.gov/juris/j1346_04.sgml.    You don’t have to read the document to get the gist of the discussion.  The fact that alcohol is regulated by the tax code tells you that the interest is in the tax revenue generated by corporate production and distribution of alcohol, not in the health or moral effects of private production for consumption.

This government interest in taxing liquor goes back to the earliest days of the Republic, when tariffs and taxes on goods were the only way to supply the Treasury.  In 1791, the newly federalized government put down the Whiskey Rebellion raised by farmers of Western Massachusetts who wanted to distill at home without paying a tax on the product.  Regulation finally culminated in Prohibition, of course, which cleared out all the small market producers and centralized the surviving firms.

Although the repeal of prohibition explicitly legalized home wine-making, the home production of beer was illegal in the United States even after Prohibition until a 1978 revision in Title 26 United States Code, Subtitle E, Chapter 51, Subchapter A, Part I, Subpard D, Section 5053 (e), Exceptions created exemptions for “family use”.  You may make 100 gallons of beer per year for your personal consumption as the lone adult in a household, but only 200 gallons for two or more adults.  Of course, states may pass their own laws regulating alcohol, and apparently Alabama still disallows home brewing.   But most jurisdictions permit it.  This is obviously not the case for home distilling, which is illegal everywhere.

Representative Bart Stupak, Democrat, of Michigan’s 1st Congressional District (northern Michigan and the Upper Peninsula) submitted a bill back in the 106th Congress that would have “amend[ed] the Internal Revenue Code of 1986 to allow distilled spirits to be produced in dwelling houses, other connected structures, and certain other premises.” The bill was cosponsored by Rep. David Camp, Republican of Michigan’s 4th Congressional District, but H.R. 3602 never made it out of the House Ways and Means Committee. The following year, Stupak resubmitted the bill as H.R. 2349 in the 107th Congress, with no better results.

Strupak is still in Congress and he is not giving up. On October 23, 2007 he submitted H.R. 3949, with the same language, with the same purpose of legalizing the home distillation of alcoholic spirits. Unless the bill is attached as a rider to the $70 Billion bank bailout, it will never get through Congress. In the current anti-earmark environment, I’d consider passage unlikely.

House Ways and Means Chair Charlie Rangel should answer to the moonshine lobby for his inaction. Or maybe he heard from Stupak already and found the pressure tolerable.  Stupak has a better chance of getting  passage for his more recent bill celebrating the end of Prohibition.

There is no movement to legalize moonshine, but plenty of curious people decide to distill liquor. Chow ran an article late last year about cooking mash “White-Collar Moonshine: The urban gourmet gets into home distilling“  This is rehabilitation at the level of bourgeois foodies.  That’s a start on a new reputation, but there’s a long way to go for a product generally associated with drunken hillbillies. Probably nobody ever thought about moonshine without seeing the image of a flop-hatted man in an overall falling off a porch.

So the illegality of home distilling at the Federal level seems pretty air tight.   Although it is possible to find people on the internet selling distilling kits, the There is a lot of misinformation about home distillation on the internet, so much so that I despaired of entirely figuring out the legality of home production.   It is possible to buy moonshine kits from online retailers like Mile Hi Distilling, but something is not four square about a business where they warn you about ripoffs before showing you the merchandise.  Also the first page of Mile Hi’s website contains this sublime search bait:

For the best alcohol still and Moonshine stills, Turbo yeast, stills and turbo yeast also stills with moonshine stills and alcohol stills to go with moonshine still. Song of the day: My ‘Old Moonshine still. Moonshine stills at this turbo yeast see the still with moonshine still after the stills you get moonshine to go with still but trust the turbo yeast. If you see a still you can get moonshine stills with turbo yeast. For copper moonshine still, don’t see moonshine still Just wait for moonshine stills, if you see the moonshine still with moonshine stills run with moonshine and the stills. Still make moonshine because it turbo yeast for moonshine so making moonshine with a still is fuel alcohol so you get 95% moonshine with a still so moonshine on. And go with alcohol still turbo yeast with 48hr and 24hr turbo yeast.

That’s insane enough to make you forget that one of the purposes of distilling your own alcohol could be to produce your own ethanol fuel, just like the government.  The apparent online community in the forums of http://homedistiller.org/ seems like a better place to start for those sufficiently interested in distilling per se.

Back to the law.  Mr. Kelly appears to be charged under SC Code of Laws SECTION 61-6-4100. Distilleries. (way down the page here: www.scstatehouse.net/CODE/t61c006), which reads in part:

It is unlawful for a person in this State to manufacture, sell, give, or have in his possession a distillery, commonly called a still, or any integral part of a distillery, or an apparatus, appliance, device, or substitute therefor to be used for the purpose of manufacturing alcoholic liquors, in violation of the laws of this State.

The unexplained possession of any part of a still, apparatus or appliance, or any device or substitute therefor, commonly or generally used for or that is suitable to be used in the manufacture of prohibited alcoholic liquors is prima facie evidence of the violation of this section.

The statute is not concerned with tax revenue, but with the ownership of a still itself.  There does not appear to be a personal use exception in the statute, and it is doubtful whether the “unexplained possession” language of the statue might be satisfied by a personal use argument, since an ‘explained possession” probably refers to a legal distillery.  I think the controlling case for the “unexplained possession” language is Bollenbach v. United States, 326 U.S. 607 (1946). Bollenbach concerns stolen goods, not illegal liquor, but the basic logic that if you can’t explain something without referencing an illegality,  then you can’t explain it legally, would still apply.

The report in the Herald-Journal states that SLED “uncovered approximately 58 quarts or 14.5 gallons of the illegal liquor behind a hidden wall”.   A Spartanburg jury might find 14.5 gallons a believable “personal use” stash for a man to share with his friends.  However, the jury is not being presented with that question. According to the language of the statute, the state has only to show that the Defendant possessed a still.

And he could still be charged for tax evasion for production of any distilled spirits under the Federal code.

There is a mass of law weighing down on this small corner of human drunkenness and very little interest in addressing it.   I’m not going to take this any farther myself.   Generally speaking though, the social shame of drunkenness would be enough to control this particular product.  Enough social control has been extended through law that it would be refreshing to see how people handled the discretion.

I better lay off before develop a reputation.  But do contact Rep. Stupak and let him know that you support H.R.3949 : To amend the Internal Revenue Code of 1986 to allow distilled spirits to be produced in dwelling houses, other connected structures, and certain other premises.  Or if you oppose the bill, why not do something positive and lend some aid to the newly resurgent Prohibition Party?

Harpers: Americans Unwilling to Face Reality

Although the title of the article is by John MacArthur of Harper’s is concerned with the rude economic awakening some are experiencing, the extract below discusses the warning signs and the reports that were in the public arena in 2006 and before that.

The substance is out there to address complicated economic topics, but even now the coverage of the economic crisis is like that given a natural disaster, not a man made mistake.

If this keeps up there will be no lessons learned from the people who were in the right when it counted.

Americans Unwilling to Face Reality
By John R. MacArthur
October 16, 2008 ” Harpers Magazine
(http://www.harpers.org/archive/2008/10/hbc-90003688)

” — It’s not as though no one saw it coming. Here’s the economist Michael Hudson, writing in the May 2006 issue of Harper’s Magazine: ‘The reality is that, although home ownership may be a wise choice for many people, this particular real-estate bubble has been carefully engineered to lure home buyers into circumstances detrimental to their own best interests’. The bubble will burst, and when it does,the people who thought they would be living the easy life of a landlord will soon find that what they really signed up for was the hard servitude of debt serfdom.’

Other commentators, including Warren Buffet, said similar things about the derivatives market. He was prescient, but hardly anybody listened. Americans, perhaps even more than other people, have difficulty embracing the concept of ‘reality.’ In part, this is religious. America remains the land of infinite redemption where any crook can suddenly go straight. In part, it stems from our turbo-charged ethos of capitalism. This has always been the land of get-rich-quick and damn the consequences. We are a nation of fantasists, and things have to get really bad before a politician has the right to trade in hard truth.

I doubt that, even now, things have gotten bad enough. Even with all the frenzied commentary about the credit crisis now choking the media (while the financial geniuses assembled at the corner of Wall and K Streets scramble to save their hides), I’m struck more by what?s not being said than what is. Every day I add to a list of critical omissions from the debate. Where, for example, is the voice of organized labor? In previous generations, we could have expected to see the president of the AFL-CIO or the United Auto Workers on the sets of the major talk shows. Apart from David Brancaccio’s NOW on PBS, I couldn’t find a single TV program that featured what might be called a ‘labor leader.’Where are the alternative candidates for president like Ralph Nader and Bob Barr? I was pleased to hear that Nader, a long-time critic of the deregulated economy, was permitted to appear on CNN and The O’Reilly Factor after the second McCain-Obama debate – but the time for that appearance should have been before the House passed the bailout bill.

Why is the heavy financial support for Barack Obama and John McCain from Wall Street off-limits for discussion? It’s unlikely the candidates be asked about that subject in tonight’s debate – the two parties write the rules to discourage tough questions – but some impertinent journalist might speak up. If you can’t get the media-trained Obama to give a straight answer, why not simply present a graphic contrasting Obama’s Reno speech supporting the bailout and Nader’s argument against it?

For that matter, in its recent take-down of Alan Greenspan and Clinton Administration deregulation (including the refusal to regulate derivatives trading), why didn’t The New York Times mention that former Clinton Treasury secretaries Robert Rubin and Lawrence Summers are principal advisers to Obama on the economy? In the same vein, why isn’t Treasury Secretary Henry Paulson, the former CEO of Goldman Sachs, challenged on his slow response to the Fannie Mae and Freddie Mac failures?

The only serious critic I’ve found was interviewed in France’s Le Monde: Columbia finance Prof. Rama Cont argues that six months ago the bailout of the two mortgage agencies would have cost $100 billion instead of an eventual $400 billion to $500 billion. Who pocketed the difference, thanks to Paulson’s ‘indulgence’ of his former colleagues? According to Cont, it was short sellers at Goldman Sachs and hedge funds.

Meanwhile, where are the deep thinkers who might enlighten us in this hour of fear, including Karl Marx? Don’t laugh – Marx had much to say about the so-called ‘contradictions of capitalism’ that bears re-reading today. Nothing he wrote is perfectly applicable to subprime mortgages and the derivatives crapshoot. But Marx’s understanding that unfettered capitalism, while fantastically productive, leads to instability by concentrating wealth in too few hands – that a mass-production/mass-consumption society is fundamentally incompatible with oligarchic control of wealth – is something even Rush Limbaugh could appreciate.

If Marx is too rich for your blood, at least we might hear from _John Gray_ (http://www.newstatesman.com/writers/john_gray) , the renegade former adviser to Margaret Thatcher. Gray is today’s most intelligent critic of globalization and ‘free trade.’ He could explain to a television audience that a great deal of America’s ‘real economy’ (as opposed to an economy based on derivatives trading and shopping at Wal-Mart) has already left the country for cheap-labor locales such the Pearl River Delta, in China, and the south bank of the Rio Grande, never to return. And he could describe the destruction wreaked upon traditional societies that suddenly become host to outsourced American factories. Youngstown and Utica are hurting, to be sure, but it’s no picnic either these days for the working class in Nogales or Dongguan.

Finally, there are the great realist novelists, who often see more clearly than journalists. So far, my Google searches have not picked up any excerpts from _Zola’s novel Money being read on the nightly news. In this brilliant chronicle of a speculative stock bubble, launched by a character named Saccard in 1860s Paris, Zola cuts right to the heart of America’s boom-and-bust neurosis: ‘Wasn’t such great and rapid prosperity the result of the methods for which [Saccard] was now being blamed? All of this came together. If one accepted the success, one had to accept the risks. When you overheat a machine, it sometimes explodes.’
http://www.informationclearinghouse.info/article21035.htm.

Nader on deregulation timeline leading to crisis

Ralph Nader’s campaign blog has posted an article by the candidate detailing the history of regulatory choices which created the current financial crisis: banks and security investment firms hungry for new profits convinced the Republican controlled Congress and the Democratic White house to permit illegally aggressive lending to people who would not be able to pay off the loans at ruinous interest rates and securitizing the resulting mortages.

The villain in all this is Phil Gramm, with Bill Clinton and the leadership of both parties acting as his willing accomplices.

Nader is seeking to correct a Right-wing misinformation campaign that wants to put the blame on the regulatory practices put in place by the Community Reinvestment Act of 1977.  The CRA compells banks to offer credit when feasible to low-income families and people of color.  This was done to prevent banks from simply refusing to lend, a banking practice which reinforced informal racist ‘redlining‘ codes.  Poor people getting credit did not cause this crisis, it was the speculation based on marginal mortgages that created first the housing bubble and then the securities bubble out of the first.  For that we have to thank the two major political parties, Fannie Mae and Freddie Mac, and the regulatory agencies themselves.

Here is Nader’s pretty clear account of how it worked.

No “thank you” to former Senator Phil Gramm for pushing the repeal of the Glass-Steagall Act. This law was passed in the wake of the stock market crash of 1929 – and designed to separate banking from securities activities. In 1999, when Congress passed the Gramm-Leach-Bliley Act and in so doing repealed Glass-Steagall the banks strayed into rough waters by looking for fast money from risky investments in securities and derivatives.

As predatory lending mushroomed out of control, the regulators—key among them, the Federal Reserve and the Office of Comptroller of Currency—sat on their hands. The Federal Reserve took exactly three formal actions against subprime lenders from 2002 to 2007. Bloomberg news service found that the Office of Comptroller of the Currency, which has authority over almost 1,800 banks, took three consumer-protection enforcement actions from 2004 to 2006.

No “tip of the hat” to the Bush Administration for preempting state regulators and Attorneys General from using state consumer laws to crack down on predatory and sub-prime lending by national banks.And, let us not forget the folks at Fannie Mae and Freddie Mac. Imagine allowing these two government sponsored enterprises—that were weakly regulated by HUD—to claim they were meeting the national housing goals by counting the purchase of subprime loans. Back in May of 2000, our associate Jonathan Brown warned that it would be inappropriate and counterproductive to encourage Fannie and Freddie to meet the housing goals by purchasing subprime loans. Too bad our members of Congress and the regulators at HUD were infected with deregulatory zeal. Former Texas Senator and current UBS executive Phil Gramm—would-be President John McCain’s Treasury Secretary-in-waiting—pushed through the Commodities Futures Modernization Act of 2000, which deregulated the derivatives market. With help from his wife, Wendy, the former head of the Commodity Futures Trading Commission who went on to a post on the Enron board of directors, Gramm removed the controls on Wall Street so it could innovate all sorts of exotic financial instruments. Instruments far riskier than advertised, and now at the core of the financial meltdown.

The SEC, through its “consolidated supervised entities” program, decided that voluntary regulation would work for the investment banking sector. Not surprisingly, this was a scheme cooked up by Wall Street itself. The investment banks were permitted to double, triple and go 20 times (and more) down on their bets by using lots of borrowed money. They made minimal disclosures to the SEC about what they were doing, and the SEC didn’t bother to review those disclosures adequately. Too bad for the investment banks—and the rest of us—they made lots of bad bets. The SEC has now closed the voluntary program, though now there aren’t any major investment banks left (the two remaining ones have converted themselves into conventional banks).

Click here for the full account: “In the Public Interest: Behind the Deregulatory Curtain“. Posted by Ralph Nader on Friday, October 3, 2008 at 03:10:00 PM
URL: http://www.votenader.org/blog/2008/10/03/in-public-interest-behind-deregulatory-curtain/

References found for Nader’s article:

“Federal Reserve:Fed Says It Could Have Acted Sooner on Subprime Rout“. By James Tyson, Craig Torres and Alison Vekshin. Bloomberg News. March 22, 2007.

“Regulators Quiet as Lenders `Targeted’ Minorities“. by Craig Torres. Bloomberg News. June 13, 2007.

“The Wall Street Fix: The Long Demise of Glass-Steagall“. Frontline. PBS. May 8, 2003.

“Foreclosed: Blame Bill Clinton’s Repeal of Glass-Steagall“. The Strange Death of Liberal America, website. November 25, 2007.

Other References

The Wall Street Fix: The story of WorldCom and its investment bankers. Frontline, PBS. Broadcast, May 2003.

• Timeline: The Long Demise of Glass-Steagall.

Phyllis Mann Article: Mistreatment of Louisana prisoners after Hurricane Katrina

Update Oct. 9, 2008: Green Party Watch has posted an lengthy statement from the McKinney campaign on the sources of McKinney’s allegations here.

Cynthia McKinney has caught some flack, and gotten some national exposure from Fox news, for saying that 5,000 black prisoners of New Orleans jails were executed during Hurricane Katrina.   There is a kernel of truth here, but not a lot of evidence that people were intentionally murdered.

This is Louisiana lawyer Phyllis Mann ’s initial report on the severe physical mistreatment of prisoners following Hurricane Katrina. I’m reposting it here in HTML on account if its only being available in PDF format on the web in the archives of the Louisiana Criminal Defense Lawyer’s newsletter , The Advocate.  The article is important for its first person account of the incredible maltreatment of prisoners by New Orleans area law enforcement agencies.  The neglect that Mann describes is shocking.  The suffering is bad enough, without people being killed.

I’m more bemused by the reaction to McKinney’s statement than upset by the claim itself.  Surely the U.S. government has killed enough people to make killing prisoners plausible.  Maybe some people would dispute that.

If I can, I’ll do a post on the other resources that are available.  But I thought this was important enough to post seperately in full.  If  Ms. Mann or the Advocate would like the article removed, I will do so.

Hurricane Relief Aid
By Phyllis Mann
The Advocate: Louisiana Association of Criminal Defense Lawyers.
Volume 2, Issue 4.
Fall 2005
Page 3 – 6
http://www.lacdl.org/Newsletters/LACDLFall2005.pdf

When we woke up on Monday, August 29th, the lawyers who had evacuated to my house from New Orleans were all breathing a sigh of relief. What little word there was seemed to suggest that Katrina had veered east at the last minute, sparing New Orleans the worst of what we had expected. Boy were we wrong. By Wednesday, we began to realize just a tiny portion of what Katrina had done to New Orleans and to our criminal justice system. It was on Thursday that we learned our clients had been inside the jails of Orleans, Jefferson, St. Bernard, St. Charles, Plaquemines, St. Tammany, all through the hurricane and the levy breaks. We heard that they were being sent to facilities all over the State of Louisiana – some to parish jails, some to DOC prisons – and no one knew who was being sent where or when.

The McKinney Choice

South Carolinian and Green Party supporter Kevin Alexander Gray has written a piece in this month’s Progressive Magazine on the conundrum facing those who want to support independent politics in a place where politics itself is so stunted.

The McKinney Choice
By Kevin Alexander Gray,

The Progressive Magazine. October 2008 Issue.

http://www.progressive.org/mag/gray1008.html

MENTION TO SOMEONE that you’re thinking about voting for former Georgia Congresswoman Cynthia McKinney or Ralph Nader and they’ll respond, “So, you’re voting for McCain!” Or they’ll say, “You’re wasting your vote.” And if you’re black and not planning on voting for Obama, you may be labeled a “hater” or an “Uncle Tom.” I know. I’ve been called those names. Poet Amiri Baraka, never one to be shy, has labeled all those not supporting Obama as “rascals.”

It doesn’t matter that McKinney is herself African American or that Rosa Clemente, her running mate on the Green Party ticket, is a hip-hop activist and an Afro-Puerto Rican. What matters, for most, is that Obama represents the first realistic chance for a black American to win the White House, and that he is better than McCain.

But should those be the overriding considerations?

While Obama is cosmetically attractive, he is still a status quo politician. What’s more, he has gone out of his way to disparage members of the African American community as a way to ingratiate himself with white voters. And he sometimes defends the same rightwing positions as his Republican counterpart, as when Obama supported Bush on the FISA bill and agreed with Scalia on the D.C. gun ban.

Aside from Obama’s limitations, there’s the question of movement politics. If we believe that the two party system rigs the electoral game, if we believe that corporate money contaminates both parties, and if we believe change comes from below, then why must we get in line behind Obama?

With these thoughts in mind, I went out to explore the McKinney candidacy. McKinney, who served as a Democrat in the U.S. House of Representatives for twelve years, left the Democratic Party last year to join the Greens. In Congress, she had one of the most progressive records. And as a Presidential candidate, she offers up a coherent agenda.

In her acceptance speech at the Green Party convention in Chicago on July 12, she denounced what she called “Democratic Party complicity” in “war crimes, torture, crimes against the peace” and “crimes against the Constitution, crimes against the American people, and crimes against the global community.” She said, “Those who delivered us into this mess cannot be trusted to get us out of it.” She told her supporters, “A Green vote is a peace vote,” and “A Green vote is a justice vote.”

Whether the subject was the Iraq War, or Afghanistan, or Katrina, or veterans’ rights, or Blackwater, or civil liberties, or the environment, or universal health care, or equal pay for equal work, or free college education, or the repeal of the Bush tax cuts, McKinney hit the progressive high notes. (But she was a little off key when she indulged the “9/11 truth” people.)

“We are in this to build a movement,” she said. “We are willing to struggle for as long as it takes to have our values prevail in public policy. A vote for the Green Party is a vote for the movement that will turn this country rightside up.”

McKinney’s platform resembles that of Dennis Kucinich, the Ohio Representative who ran as the most progressive candidate in the Democratic primaries. Like Kucinich, McKinney wants an immediate end to all wars and occupations by U.S. forces, beginning in Iraq and Afghanistan; the orderly withdrawal of U.S. troops from the more than 100 countries around the world where they are stationed; Articles of Impeachment to be filed against Bush and several members of his Administration; and the creation of a Department of Peace. She would also like to see a number of other Bush initiatives repealed, like the Patriot Acts, the Secret Evidence Act, and the Military Commissions Act.

Like Obama, McKinney name-drops Martin Luther King a lot. But whereas Obama constantly utters King’s line about “the fierce urgency of now,” McKinney uses King in a different way. She says “the racial disparities that exist today are worse than at the time of the murder of King.” And she quotes King’s comment that the United States is the “greatest purveyor of violence on the planet,” saying that it is still true today.

McKinney also adopts positions that Obama won’t go near, such as: demanding reparations for African Americans, offering amnesty for all undocumented immigrants, ending “prisons for profit,” and calling off the “war on drugs.”

But having a shiny progressive platform does not guarantee progressive votes. I recall a rule of organizing in the 1988 Jesse Jackson campaign: “Define your own win.” Reason being: If it’s about who has the most money, resources, access, etc., those going against the flow or those who are resource poor will always be sold short. Especially when the powerful set the rules and call the game.
Running was Shirley Chisholm’s win in 1972.

Jackson’s win was successfully advancing a progressive, multiracial, multi-issue agenda.
So what’s McKinney’s win?

She says the Greens want to pick up “5 percent of the national vote” in the coming election with the hope it “confers major party status” on them.

“Then we will have an official third party in this country,” McKinney said in Chicago, “and public policy that truly reflects our values.”

Yet 5 percent may be a tough nut to crack, given the party’s up and down performances in the past three Presidential elections.
As a Green candidate in 1996, Nader garnered 0.7 percent of the total. Four years later, he and the party increased their support three-fold, pulling in 2.74 percent of the total vote while receiving no electoral votes. In 2004, the Greens ran Texan David Cobb under a “safe states strategy.” Cobb appeared on twenty-eight of fifty-one ballots, down from the forty-four Green lines in 2000. The strategy supposedly focused its efforts on states that were traditionally “safely” won by the Democratic candidate, or “safely” won by the Republican candidate, so as not to run in swing states. This defensiveness was in reaction to the Nader-haters of 2000, who still blame Ralph for giving the country George Bush. Cobb got an infinitesimal 0.096 percent of the vote, while Nader as an Independent picked up 0.38 percent of the total.

This election season the Greens have abandoned the discredited “safe state strategy,” says Brent McMillan, political director of the party. McKinney and Clemente are on the ballot in thirty states, according to the Green Party.
The party’s national electoral history may prevent McKinney from being taken seriously by even the angriest of voters. “It seems that there’s no in-between game,” says longtime grassroots activist Brett Bursey of South Carolina. “The Greens pop up during an election season and that’s it.” He and others argue that the election-year “top-down approach” of choosing big-name candidates like Nader and McKinney rarely lends itself to the off-year followup that is needed to build an effective national party. “It will take more time than running doomed electoral campaigns that do little more than make the candidates and their few supporters feel superior,” says Bursey.

Bursey may have a point. The Greens have a dearth of campaign offices (local folk where I live in South Carolina don’t know how to get involved), and there are precious few grassroots volunteers outside of traditional Green “strongholds.” Obviously, money matters, and McKinney and the Greens have very little.
And the Obama candidacy is tricky for the Greens. “There are some Greens who won’t support a Green at the top of our ticket today, regardless of who that person is,” says Gregg Jocoy, of the South Carolina chapter. “White Greens don’t want to hurt Obama’s chances.”

Given these difficulties, the question once again arises: “Why bother?” To which Clemente replies, “People have to make some clear choices about which side are they on.” The goal, she says, is “building the new imperative.”
One can only hope that because McKinney and Clemente are raising important issues they’re not wasting their and others’ time.
But let me put a word in for being contrary, for refusing to go with flow, and for rejecting the choices we are given when we have that opportunity. Sometimes it is necessary to stand up and say, “I’m not with that.” Defying the corrupt two-party corporate system may be one of those times.
The choice is yours. And mine. And for me, it’s not an easy one.

Kevin Alexander Gray is a writer and activist living in South Carolina. He managed the 1988 presidential campaign of Jesse Jackson in the state. His forthcoming books are “Waiting for Lightning to Strike: The Fundamentals of Black Politics” and “The Decline of Black Politics: From Malcolm X to Barack Obama.”

Panic of 1873 Revisted: the Real Great Depression

The Real Great Depression: The depression of 1929 is the wrong model for the current economic crisis
The Chronicle of Higher Education 
The Chronicle Review. From the issue dated October 17, 2008
By SCOTT REYNOLDS NELSON
http://chronicle.com/weekly/v55/i08/08b09801.htm

As a historian who works on the 19th century, I have been reading my newspaper with a considerable sense of dread. While many commentators on the recent mortgage and banking crisis have drawn parallels to the Great Depression of 1929, that comparison is not particularly apt. Two years ago, I began research on the Panic of 1873, an event of some interest to my colleagues in American business and labor history but probably unknown to everyone else. But as I turn the crank on the microfilmreader, I have been hearing weird echoes of recent events.

When commentators invoke 1929, I am dubious. According to most historians and economists, that depression had more to do with overlarge factory inventories, a stock-market crash, and Germany’s inability to pay back war debts, which then led to continuing strain on British gold reserves. None of those factors is really an issue now. Contemporary industries have very sensitive controls for trimming production as consumption declines; our current stock-market dip followed bank problems that emerged more than a year ago; and there are no serious international problems with gold reserves, simply because banks no longer peg their lending to them.

In fact, the current economic woes look a lot like what my 96-year-old grandmother still calls “the real Great Depression.” She pinched pennies in the 1930s, but she says that times were not nearly so bad as the depression her grandparents went through. That crash came in 1873 and lasted more than four years. It looks much more like our current crisis.

The problems had emerged around 1870, starting in Europe. In the Austro-Hungarian Empire, formed in 1867, in the states unified by Prussia into the German empire, and in France, the emperors supported a flowering of new lending institutions that issued mortgages for municipal and residential construction, especially in the capitals of Vienna, Berlin, and Paris. Mortgages were easier to obtain than before, and a building boom commenced. Land values seemed to climb and climb; borrowers ravenously assumed more and more credit, using unbuilt or half-built houses as collateral. The most marvelous spots for sightseers in the three cities today are the magisterial buildings erected in the so-called founder period.

But the economic fundamentals were shaky. Wheat exporters from Russia and Central Europe faced a new international competitor who drastically undersold them. The 19th-century version of containers manufactured in China and bound for Wal-Mart consisted of produce from farmers in the American Midwest. They used grain elevators, conveyer belts, and massive steam ships to export trainloads of wheat to abroad. Britain, the biggest importer of wheat, shifted to the cheap stuff quite suddenly around 1871. By 1872 kerosene and manufactured food were rocketing out of America’s heartland, undermining rapeseed, flour, and beef prices. The crash came in Central Europe in May 1873, as it became clear that the region’s assumptions about continual economic growth were too optimistic. Europeans faced what they came to call the American Commercial Invasion. A new industrial superpower had arrived, one whose low costs threatened European trade and a European way of life.

As continental banks tumbled, British banks held back their capital, unsure of which institutions were most involved in the mortgage crisis. The cost to borrow money from another bank – the interbank lending rate – reached impossibly high rates. This banking crisis hit the United States in the fall of 1873. Railroad companies tumbled first. They had crafted complex financial instruments that promised a fixed return, though few understood the underlying object that was guaranteed to investors in case of default. (Answer: nothing). The bonds had sold well at first, but they had tumbled after 1871 as investors began to doubt their value, prices weakened, and many railroads took on short-term bank loans to continue laying track. Then, as short-term lending rates skyrocketed across the Atlantic in 1873, the railroads were in trouble. When the railroad financier Jay Cooke proved unable to pay off his debts, the stock market crashed in September, closing hundreds of banks over the next three years. The panic contined for more than four years in the United States and for nearly six years in Europe.