Signs of the Economic Apocalypse - Read all About it

David Hunt writes a weekly "Signs of the Economic Apocalypse" , here is a section of his 10/7/06 remarks which seem worth broadcasting... also go to his excellent site which Lord Patel never misses. As the world watches Israel destroy another nation state , pound it's cities, rooads, airport, into dust , destroys it's fuel dumps and it's citizens (and even visitors) into charred meat and gristle. As Halliburton erects the curious camps which no-one has a purpose for, as the oilygarchs of Russia flex their muscles, as the Shia arc is emboldened by the fire a refelection of a past period of turmoil is instructive. Cheney is personally investing in short term municipal bonds expecting short term interest rate hiles and heavy in European bonds in anticipation of a dollar decline.... does he know something we don't ?
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A new book by Newsweek journalist Jonathan Alter about Franklin Roosevelt’s first 100 days in office, The Defining Moment: FDR’s Hundred Days and the Triumph of Hope (New York: Simon and Schuster, 2006), paints a startling picture of the political climate in the United States in the dark days of early 1933. Among the political establishment, there was overwhelming support for a fascist dictatorship. Alter points out that in early 1933, the word ‘dictatorship’ had a positive connotation. It was a near miss, we almost had fascist America seventy years ago.

Here is Alter on the economic situation in March 1933:

The American economic system had gone into a state of shock, its vital organs shutting down as the weekend began. On Friday, the New York Stock Exchange suspended trading indefinitely and the Chicago Board of Trade bolted its doors for the first time since its founding in 1848. The terrifying “runs” that began the year before on more than five thousand failing banks had stripped rural areas of capital and now threatened to overwhelm American cities. At dawn on Saturday, only a few hours before FDR’s swearing in, the governors of New York, Illinois, and Pennsylvania signed orders closing the banks in those states indefinitely; which meant that thirty-four out of forty-eight American states, including the largest ones, now had no economic pulse…

As frightening as life had become since the Great Depression began, this was the bottom, though no one knew that at the time. The official national unemployment rate stood at 25 percent, but that figure was widely considered to be low. Among non-farm workers, unemployment was more than 37 percent, and in some areas, like Toledo, Ohio, it reached 80 percent. Business investment was down 90 percent from 1929. Per-capital real income was lower than three decades earlier, at the turn of the century. If you were unfortunate enough to have put your money in a bank that went bust, you were wiped out. With no idea whether any banks would reopen, millions of people hid their few remaining assets under their mattresses, where no one could steal them at night without a fight. The savings that many Americans had spent a lifetime accumulating were severely depleted or gone, along with 16 million of their jobs. When would they come back? Maybe never. The great British economist John Maynard Keynes was asked by a reporter the previous summer if there were any precedent for what had happened to the world’s economy. He replied yes, it lasted four hundred years and was called the Dark Ages.

Late in 1933, the journalist Earle Looker peered backwards several months to assess the Hobbesian states as FDR assumed office: “Capitalism itself was at the point of dissolution. Would men continue to work for profit as our forefathers understood it and as our people now understand it? This was a real question, for money was now useless. Would it be necessary soon to organize our families against the world, to fight, physically, for food, to keep shelter, to hold possessions?” (Jonathan Alter, The Defining Moment, pp. 1-3)

Most people at that time saw at only two paths out of the crisis of world capitalism: communism and fascism. A few saw social democracy as another way out. Roosevelt when he assumed the presidency was actually poised between fascism and social democracy, and, if Alter is to be believed, had enough support for either option that he was facing a free-will choice. It was a close call.

Roosevelt’s Inaugural Address had begun the process of restoring hope, but not everyone caught the new mood right away. The press coverage that morning largely downplayed or ignored FDR’s line: “the only thing we have to fear is fear itself.” The New York Times and most other newspapers relegated the line to their inside pages, while focusing instead on the vivid wartime allusions he employed five times during his speech—martial metaphors that suggested that there was, in fact, plenty to fear after all. The greatest applause line from the large crowd on the east side of the Capitol came when Roosevelt said that if his rescue program was not quickly approved: “I shall ask Congress for the one remaining instrument to meet the crisis: broad executive power to wage war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.”

The United States had not been “invaded by a foreign foe” since 1812, but this felt like it. Arthur Krock of the Times compared the mood in Washington on Inauguration Day to a ‘beleagered capital in wartime.’ For the first time since the Civil War, armed men patrolled the entrances to federal buildings, while machine gunners perched on rooftops. Editors knew that that the world war, just thirteen years in the past, had concentrated great power in the hands of Woodrow Wilson’s government. To them it looked as if FDR were proposing the same thing. And so the approving headline FOR DICTATORSHIP IF NECESSARY ran in the New York Herald-Tribune on March 5, with similar notes stuck in the Inaugural coverage of other major papers.

Exactly what was “necessary”? No one knew, including Roosevelt. Even before being sworn in, he had decided on a federal bank “holiday” (a festive term he preferred to Herbert Hoover’s “moratorium”) to give the people who now ran the country a few days to figure out what to do. Then what? Should he assume wartime authority on a temporary basis? Call out the Army to protect banks and maintain order? Mobilize veterans? Unrest was already growing in the farm belt, where mobs had broken up bankruptcy auctions. Four thousand men had occupied the Nebraska statehouse and five thousand stormed Seattle’s county building. The governor of North Carolina predicted a violent revolution, and police in Chicago clubbed teachers who had not been paid all school year. Everywhere bank runs threatened to turn violent. By the Inaugural weekend, police in nearly every American city were preparing for an onslaught of angry depositors. At least some were certain to be armed.

With so many banks involved, the U.S. Army—including National Guard and Reserve units—might not be large enough to respond. This raised the question of whether the new president should establish a makeshift force of veterans to enforce some kind of martial law. The tempation must have been strong. It hardly seems a coincidence that FDR decided that the first radio speech of his presidency would be specially addressed to a convention of the American Legion, the million-member veterans’ organization co-founded after World War I by his fifth cousin Theodore Roosevelt, Jr. (Ibid., pp. 3-4)

The American Legion occupies a special place in the history of American Fascism. Alter found a draft statement that was handed to Roosevelt before his first radio address calling for such a fascist force:

The short speech was scheduled for that Sunday evening at 11:30 p.m. EST, with all the radio networks carrying it live across the country. In preparing for the broadcast, someone in the small Roosevelt inner circle offered the new president a typewritten draft of suggested additions that contained this eye-popping sentence:

As new commander-in-chief under the oath to which you are still bound I reserve to myself the right to command you in any phase of the situation which now confronts us.

This was dictator talk—an explicit power grab. The new president was contemplating his “right” to command World War I veterans—mostly men in their late thirties—who had long since reentered civilian life. It was true that they had sworn an oath to the United States on entering military service and that the 1919 founding document of the American Legion pledged members to help “maintain law and order” and show “devotion to mutual helpfulness.” But the commander in chief had no power over them. Here Roosevelt would be poised to mobilize hundreds of thousands of unemployed and desperate men by decree, apparently to guard banks or put down rebellions or do anything else he wished during “any phase” of the crisis, with the insistence that they were dutybound to obey his concocted “command.”

That word—“dictator”—had been in the air for weeks, endorsed vaguely as a remedy for the Depression by establishment figures ranging from the owners of the New York Daily News, the nation’s largest circulation newspaper, to Walter Lippmann, the eminent columnist who spoke for the American political elite. “The situation is cricital, Franklin. You may have no alternative but to assume dictatorial powers,” Lippmann had told FDR during a visit to Warm Springs on February 1, before the crisis had escalated. Alfred E. Smith, the Democratic nominee for president in 1928, recalled with some exaggeration that “during the World War we wrapped the Constitution in paper, put it on the shelf and left it there until the war was over.” The Depression, Smith concluded, was a similar “state of war.” Even Eleanor Roosevelt, more liberal than her husband, privately suggested that a “benevolent dictator” might be what the country needed. The vague idea was not a police state but deference to a strong leader unfettered by Congress or the other inconveniences of democracy. Amid the crisis, the specifics didn’t go beyond more faith in government by fiat.

Within a few years, “dictator” would carry sinister tones, but—hard as it is to believe now—the word had a reassuring ring that season. So did “storm troopers,” used by one admiring author to describe foot soldiers of the early New Deal, and “concentration camps,” a generic term routinely applied to the work camps of the Civilian Conservation Corps that would be established by summer across the country. After all, the Italian Fascist Benito Mussolini, in power for a decade, had ginned up the Italian economy and was popular with everyone from Winston Churchill to Will Rogers to Lowell Thomas, America’s most influential broadcaster. “If ever this country needed a Mussolini, it needs one now,” said Senator David Reed of Pennsylvania, outgoing President Hoover’s closest friend on Capitol Hill. The speech draft prepared for FDR brought to mind Mussolini addressing his black-shirt followers, many of whom were demobilized veterans who joined Il Duce’s private army. (Ibid., pp. 4-6)

The propaganda machine, owned by the elite, was ready to be put into action in the defense of the property of the rich:

The most powerful American publisher, William Randolph Hearst, seemed to favor dictatorship. The Hearst empire extended to Hollywood, where Hearst that winter had personally supervised the filming of an upcoming hit movie called Gabriel Over the White House that was meant to instruct FDR and prepare the public for a dictatorship. The movie’s hero is a president played by Walter Huston who dissolves Congress, creates an army of the unemployed, and lines up his enemies before a firing squad. FDR not only saw an advance screening of the film, he offered ideas for script rewrites and wrote Hearst from the White House that he thought it would help the country. (Ibid., p. 6)

Now what would happen if the same economic conditions were faced by Bush and Cheney? In 1933, at least, the United States was lucky:

But on March 5, 1933, as astonishing thing happened—or more precisely, did not happen. The draft of that American Legion radio address was destined not for the ears of millions of veterans and other Americans, but for nothing more than the speech files of the Roosevelt Library, where it lay unexamined for more than seventy years. The five-minute speech that FDR delivered that night built on the military tone of the Inaugural. He argued for the ‘sacrifice and devotion’ of wartime and noted that it was ‘a mistake to assume that the virtues of war differ essentially from the virtues of peace.’ But there was no hint of the need for a private army.

No one knows who wrote the unused draft or why FDR discarded the suggested additions, but something inside the man kept him from moving in an extraconstitutional direction. Some combination of personal and democratic conviction set him on a different course, at once more traditional and bold. This most pragmatic of modern American presidents sensed the unworkable nature of untrammeled power, even in the hands of the only person he completely trusted—himself.

In the days ahead, FDR moved in the opposite direction, passing the word on Capitol Hill that he did not believe in a constitutional dictatorship and asking his friend Felix Frankfurter to tell Lippmann to stop hawking dictatorship and disrespect of Congress in his columns. (Ibid., p. 7)

Bush, of course, is chomping at the bit for his chance. posted by Donald Hunt