W. Michael Blumenthal

W. Michael Blumenthal
64th United States Secretary of the Treasury
In office January 23, 1977 – August 4, 1979
President	Jimmy Carter
Preceded by	William E. Simon
Succeeded by	G. William Miller
Personal details
Born	Werner Michael Blumenthal January 3, 1926 Oranienburg, Germany
Citizenship	American
Political party	Democratic
Spouse(s)	Margaret Eileen Polley (1951-1977),[1] Barbara Bennett
Alma mater	UC Berkeley (B.S.) Princeton University (M.A., Ph.D.)
Profession	Business leader, economist, political adviser
Religion	Judaism
Signature

Werner Michael Blumenthal (born January 3, 1926) is an American business leader, economist and political adviser who served as United States Secretary of the Treasury under President Jimmy Carter from 1977 to 1979.

At age thirteen, Blumenthal barely escaped Nazi Germany with his Jewish family in 1939, and was forced to spend World War II living in the ghetto of Japanese-occupied Shanghai, China, until 1947. He then made his way to San Francisco and began doing odd jobs to work his way through school. He enrolled in college, eventually graduating from U.C. Berkeley and Princeton University with degrees in international economics. During his career, he became active in both business and public service.

Before being appointed to a cabinet position with newly elected President Jimmy Carter, Blumenthal had become a successful business leader and had already held administrative positions under Presidents John F. Kennedy and Lyndon Johnson. As a member of the Carter administration, he helped guide economic policy and took part in reestablishing ties with China. After he resigned, he became chairman and CEO of Burroughs Corporation and Unisys, followed by seventeen years as director of the restored Jewish Museum in Berlin.

Early life

Blumenthal was born in Oranienburg, Germany, Weimar Republic, the son of Rose Valerie (née Markt) and Ewald Blumenthal, who owned a dress shop.^[2][3] His forebears had lived in Oranienburg since the 16th century.^[1] As a result of the Nazi party's Nuremberg Laws, which took effect in 1935, his family began to fear for their lives and realized they had to emigrate. Blumenthal was a witness to Kristallnacht, a series of coordinated attacks against Jews and their property which began throughout Germany on November 9, 1938.

I clearly remember...when they came and smashed all the Jewish stores. I remember seeing the largest synagogue in Berlin burn, and I remember being beaten up by kids in uniform."^[1]

Nazi gestapo men forced their way into his home early one morning in 1939 and arrested his father for no stated reason. His father was taken to Buchenwald concentration camp, one of the largest forced labor camps in Germany, where an estimated 56,000 people, mostly Jews, were eventually killed. His mother hastily sold all their household possessions and managed to bribe the guards to let her husband go. They had no choice but to sell their long-established dress store to their managing saleswoman for "practically nothing," says his older sister Stefanie. She recalls, "My mother wept—not so much out of the loss, but out of a sense of the unfairness of it, that someone we'd trained could turn on us, could get something we had worked so hard for, for nothing."^[4]

With their little remaining money, his mother bought tickets for the family to travel to Shanghai, China, which didn't require a visa. They went there expecting to remain only briefly, assuming they could then travel on to a safer country. However, with the outbreak of World War II, Japan had occupied Shanghai, and the Blumenthals were interned in the Shanghai Ghetto, with 20,000 other Jewish refugees, for the next eight years.^[1]

Shanghai ghetto in 1943

Blumenthal witnessed severe poverty and starvation throughout the ghetto, sometimes seeing corpses lying in the streets. "It was a cesspool," he said.^[1] He was able to find a cleaning job at a chemical factory and earned $1 a week, which he used to help feed his family.^[3] "I was confined to a faraway corner of Asia," he writes in his autobiography, "so destitute that newspapers were stuffed into my shoes to cover up the holes... I had no passport at all [and] for two and a half years I was a prisoner of the Japanese, and later not even the most junior American consular official would have given me the time of day."^[5]

His schooling was haphazard, and the stress of survival caused his parents to divorce.^[1] Nevertheless, he was able to learn English during a brief period attending a British school, and learned to speak some Chinese, Japanese, French and Portuguese during other periods there.^[6]:25

When the war in the Pacific ended in the summer of 1945, American troops entered Shanghai. He was able to find a job as a warehouse helper with the U.S. Air Force, which benefited from his linguistic skills.^[3] By 1947 he and his sister, after much effort and being refused visas to Canada, received visas to the U.S. They made their way to San Francisco, where they knew no one, and had only $60 between them.^[7] With limited education, and now a stateless refugee, he did his best to make something of himself: "I came to this country feeling that I had capabilities and talents. I read a lot. I talked to people. I wanted to do things. I found out that I can cope reasonably well."^[1]

Education

"What counts is what comes from within you, your inner resources, not your name or your family, or what you inherited."

Michael Blumenthal^[3]

Blumenthal found his first full-time job earning $40 per week as a billing clerk for the National Biscuit Company. He later enrolled at San Francisco City College and supported himself doing part-time work, including truck driver, night elevator operator, busboy and movie theater ticket-taker. He also worked as an armored guard and at a wax factory, where he filled "little paper cups with wax" from midnight until 8 a.m.^[1]

He was admitted to the University of California, Berkeley where he graduated Phi Beta Kappa in 1951 with a B.S. degree in international economics.^[3] It was also where he met and married Margaret Polley in 1951.^[1] In 1952 Blumenthal became a naturalized U.S. citizen.^[6]:25

He was offered a scholarship to attend the Woodrow Wilson School of Public and International Affairs at Princeton University, in New Jersey. From there, he earned a Master of Arts in 1953, followed by a Ph.D. in economics in 1956.^[7] For income, his wife worked as a teacher and he taught economics at Princeton from 1953 to 1957.^[3] He also worked as a labor arbitrator for the state of New Jersey from 1955 to 1957.^[6]:26

Career

Following his graduation, he joined Crown Cork International Corporation in 1957, a manufacturer of bottle caps, where he remained until 1961, and rose to become its vice president and director.^[3][1]

In 1961, having by then been a registered Democrat, he went to Washington, D.C. following President Kennedy's inauguration, where he was offered a position by diplomat, George Ball, to serve as Kennedy's deputy Assistant Secretary of State for Economic and Business Affairs.^[6]:26 He accepted the position and served in the State Department from 1961 until 1967 as an adviser on trade to Kennedy and, after Kennedy's assassination, as adviser to Lyndon B. Johnson. Johnson made him U. S. Ambassador to act as the chief U. S. negotiator at the Kennedy Round General Agreement on Tariffs and Trade talks (GATT) in Geneva, considered to be the world's most significant multilateral trade negotiation. Blumenthal was admired for being a tough negotiator.^[1][3]

In 1967 Blumenthal left government to join Bendix International, a manufacturing and engineering company specializing in auto parts, electronics and aerospace. After five years he was appointed as its chairman and CEO, and remained with the company for ten more years. When he first took over to head Bendix, the company was regarded by Wall Street as a faltering company. After five years as its chairman, the company nearly doubled its sales to just under $3 billion, and by 1976 Duns Review rated Bendix as "one of the five best-managed companies in the U.S."^[1][6]:27

President Carter (far right) meeting with (l to r) Charles Schultze, Michael Blumenthal, Hamilton Jordan and James Schlesinger in the oval office, 1978

While Blumenthal headed Bendix, newly elected President Carter nominated him to become his Secretary of the Treasury, a position he served from January 23, 1977 to August 4, 1979.^[3] Cyrus Vance had originally wanted him to be his deputy when he became Carter's Secretary of State, but Carter decided he would be better placed as Secretary of the Treasury.^[8] His nomination was unanimously confirmed.^[6]:27 That June, he traveled to the Organisation for Economic Co-operation and Development's (OECD) Paris headquarters for its annual conference, with its main agenda concerned with how Western powers would manage the sluggish recovery after the deep recession of 1974-75.^[9]

Blumenthal first met Carter in 1975 at a meeting of the Trilateral Commission in Japan.^[10] Carter subsequently invited him to his home knowing his talents as a successful business manager and negotiator, and knew Blumenthal would offer him sound economic advice.^[10] Blumenthal recalls at the time, "The list of top Democratic businessmen isn't very long."^[1] In accepting the position, his income went from $473,000 per year to $66,000.^[1] He was also amused at the irony of reading a German newspaper headline, "A Berliner is to Become Carter's New Minister of Finance."^[1]

As Secretary of the Treasury, however, he was never made a member of Carter's "inner circle," and his responsibilities were never clearly defined, writes historian Burton Ira Kaufman.^[10] Although he was made chair of Carter's Economic Policy Group (EPG), and was Carter's chief economic policy official, he was still unable to chart economic policy or be recognized as the administration's chief economic spokesman. He instead had to share the role with those closer to the president, which caused confusion among outsiders and weakened Blumenthal's effectiveness.^[1]

Blumenthal took an active role in fighting inflation, which had increased from 7 percent at the beginning of 1978 to 11 percent by the fall.^[10]:49 By the summer of 1979 inflation had reached 14 percent, with unemployment in some cities running close to 25 percent.^[10]:50 Much of the increase had to do with OPEC raising oil prices.^[10]:50 During this period, the U.S. dollar was also a target of one of the largest currency speculations in history^[9] by countries including Germany and Japan, whose currencies were rapidly appreciating against the dollar.^[10]:49

In February 1979, Blumenthal represented the U.S. in its first visit to China by an American Cabinet officer following America's official recognition of their Communist government, which China had proclaimed in 1949. Until that time, most American China scholars had never been to China, and the event was so newsworthy that twenty journalists traveled with Blumenthal and his staff.^[5] His experience living in Shanghai is considered to have been an important factor in Chinese leaders inviting him, instead of a State Department official.^[6]:28 His trip was a great success, notes biographer Bernard Katz.^[6]:28 Blumenthal also went back the following month for the opening of the U.S. Embassy. He explains:

"Our visit was an opening move in the slow, carefully managed, renewed coming together of China and the United States, haltingly begun with many fits and starts in the early seventies, and culminating nine years later with the reestablishment of full diplomatic relations (in which I would be destined to play an official role.)"^[5]

He used part of his speech, much of which he gave speaking in Chinese, to convey to Chinese leaders America's serious concern with China's invasion of Vietnam a week earlier. Henry Kissinger described the multipronged invasion which may have included up to 400,000 Chinese soldiers.^[11] Blumenthal asked them to withdraw their troops "as quickly as possible," since it carried the "risk of wider wars."^[11][12] The Chinese were particularly impressed by Blumenthal's speech, adds Katz. And although the effect of his speech is not known, the Chinese army did withdraw a few weeks after his visit.

In July 1979, Carter outlined his measures for dealing with the nation's economic and energy crisis, and at the same time asked five members of his cabinet, including Blumenthal, to resign.^[10]:51 Twenty-three other senior staff members were also let go.^[13]

After resigning he returned to the business sector and joined Burroughs Corporation in 1980 as vice chairman, then chairman of the board a year later. After merging the company with Sperry Corporation, it became Unisys Corporation in 1986, with Blumenthal its chairman and chief executive officer (CEO). He remained with Unisys until 1990 when he stepped down to become a limited partner at Lazard Freres & Company, an investment bank located in New York. Having more free time, he taught economics courses at Princeton.^[6]:29[14]

In April 2016, he was one of eight former Treasury secretaries who called on the United Kingdom to remain a member of the European Union ahead of the June 2016 Referendum. ^[15]

Personal life

From his former marriage, Blumenthal had three daughters: Ann, Jill, and Jane, and has many grandchildren.

Currently he resides in Berlin and Princeton, New Jersey, with his wife, Barbara, and his son Michael.

In 1998 Blumenthal became director in charge of restoring the Jewish Museum Berlin. It was originally the first Jewish Museum in Berlin, founded in 1933, but was closed in 1938 by the Nazi regime. Its exhibits include displays documenting 2,000 years of German-Jewish history, including The Holocaust, and is the largest Jewish museum in Europe.^[5] He remained its director from 1997 until 2014.^[16]

In 2008, he was elected as a delegate to the Democratic National Convention, and pledged to back President Barack Obama.

Awards and honors

Recipient of The International Center in New York's Award of Excellence.

In 1980, Blumenthal received the Horatio Alger Award from the Horatio Alger Association of Distinguished Americans.

In 1999, he received the Leo Baeck Medal for his humanitarian work promoting tolerance and social justice, as well as the Grand Cross of Merit of the Federal Republic of Germany.^[3]

References

1. Clare, Crawford (29 August 1977). "From Nazi Refugee to Treasury Chief: Mike Blumenthal's Next Step May Be Closer to Carter". People Magazine. United States. Retrieved 9 May 2016.
2. Current Biography Yearbook
3. Alger Association biography
4. Chesnoff, Richard Z. Pack of Thieves, Anchor Books (1999) p. 20
5. Blumenthal, Michael. From Exile to Washington, The Overlook Press (2015) ISBN 146831100X
6. Katz, Bernard S., and Vencill, Daniel. Biographical Dictionary of the United States Secretaries of the Treasury, Greenwood Publishing (1996)
7. Kaufman, Diane, and Kaufman, Scott. Historical Dictionary of the Carter Era, Scarecrow Press (2013) p. 42
8. Biven, W. Carl. Jimmy Carter's Economy: Policy in an Age of Limits, Univ. of North Carolina Press (2002) e-book
9. Moffit, Michael. World's Money, Simon and Schuster (1983) p. 133
10. Kaufman, Burton Ira. The Carter Years, Infobase Publishing (2006) p. 47
11. Kissinger, Henry. On China, Penguin (2011) e-book
12. "Peking Rules Out A Drive For Hanoi," New York Times, Feb. 26, 1979
13. Hayward, Steven. The Real Jimmy Carter, Regnery Publishing (2004) e-book
14. Biography of W. Michael Blumenthal, Jewish Museum Berlin
15. "Staying in EU 'best hope' for UK's future say ex-US Treasury secretaries". BBC News. April 20, 2016.
16. Princeton Magazine. Kingston, New Jersey http://www.princetonmagazine.com/michael-blumenthals-search-for-answers-takes-him-full-circle-back-to-berlin/. Retrieved 9 May 2016. Missing or empty |title= (help)