Monday, May 13, 2013

FDR’s Voodoo Economics

The academic legend of Keynesian economics is that Franklin Roosevelt was its first and premier practitioner who saved the nation’s economy through its judicious ministrations during the The Great Depression. This theory of America’s economic history is at best hagiographic and at worst malevolent voodoo.
 
David Stockman has emerged in the aftermath of the 2008 economic collapse of the US as an elder statesman of traditional economic ideas which affirm the need for market discipline of the economy, the maladies and dangers of crony capitalism, and the necessity for fiscal sobriety, all of which have been entirely absent under the kleptocracies of George Bush and Barack Obama and their bankster handlers.
 
In a remarkable chapter of his book, The Great Deformation, Stockman lays waste to the na├»ve notions that Roosevelt was a Keynesian, or that his policies had any material effect on resuscitating the American economy from its severe contraction following the excesses of the 1920s. Others have led the way in this analysis but Stockman brings a larger and more sweeping narrative to the era of the Great Depression.
 
To understand the buildup to the 1929 collapse, Stockman notes that America’s unprecedented economic growth from 1914-1929 rested upon the spoils of victory of World War 1 which started on the farms which fed Europe and other parts of the world when war ravaged Europeans were unable to produce agriculturally. After the war, American aid was marshaled to feed Europe until its farms could return to self sufficiency, thus giving American farmers a huge bonus from 1914-1921.
 
America became the great creditor not only as banker for the war, but also as an exporting dynamo whose manufacturers loaned their customers the money to buy their goods. But the easy money of Benjamin Strong gave way to parsimony starting in 1928, eventually leading to collapse of foreign markets – the source of the great economic boom - to say nothing of domestic ones, including Wall Street stock exchanges.
 
America suddenly found itself with way too much industrial capacity and mal-investment in need of liquidation as it was no longer economically viable. But to add insult to injury, Herbert Hoover signed the Smoot Hawley bill as a protectionist measure in the belief that it would protect jobs and wages.
 
The measure was brought to a head by the disappearance of gold as a means of international trade settlement, leaving huge imbalances in currency valuations, further disrupting trade. The hapless Hoover's support of the Smoot Hawley Tariffs may have befriended his industrialist cronies, but screwed the average American citizen who was left unemployed by his and his successor’s economic malfeasance.
 
Stockman does not discuss the trail Hoover blazed for Roosevelt who simply carried on where the former left off. Roosevelt’s aides readily acknowledged that the new president simply expanded on the groundwork of the statist Hoover. When Stockman notes that Hoover was a diehard fan of free enterprise, he fails to observe that Hoover was in the business of bailing out his cronies and fellow travelers. He intervened to prop up soured investments when in fact he should have let them clear.
 
In spite of Hoover’s gross malpractice and bloated government, Stockman demonstrates that the economy had decisively turned the corner in July of 1932 and had nowhere else to turn but up. Unfortunately, Americans and business owners became extremely uneasy with Roosevelt even as he swept into office in a landslide, parroting in contempt conservative ideals which he planned to jettison as soon as he entered office.
 
From November 1932 until March 1933, the economy stalled as apprehensions about Roosevelt’s inflationary policies took hold. Stockman does an excellent job in describing the true nature of the banking crisis as one which Roosevelt instigated through his willful and treacherous silence about his administration’s strategy for dealing with the mess created by the Federal Reserve in the late 1920s to 1933, and not helped by Hoover's dramatic interventions.
 
The banking failures represented a small portion of the banking system’s assets and were confined largely to rural banks which had speculated recklessly during the farm boom, and to small regional banks which also squandered capital and prudence in ill-starred schemes. Even the upstart and large Bank of the United States failed without engendering systemic collapse.
 
FDR initiated his famous bank holiday as a smoke and mirrors charade which had no net effect on the banking recovery, which started the previous year, other than to retard it and engender fear. Over 90% of the banks closed were reopened and the ones which failed would have failed any way.
 
Finally, Stockman does a great number on the FDR-as-Keynesian myth. He shows that FDR’s policies were more akin to a mish-mash of dilettantism and pure economic quackery than thoughtful policy strategy, including FDR’s lucky number selection of the price of gold which brought significant and unneeded inflation.
 
Roosevelt enlarged the federal government, but its take of GNP was still under 10% at the end of the 1930s. His first budget director recommended cuts in federal government salaries and other expenses, hardly a Keynesian notion. His grand experiments with the WPA and PWA were mostly electioneering vehicles which ended in scandal when it was reported that poor workers' meager salaries were being panhandled by FDR’s lieutenants for New Deal politicians' political campaigns in 1938.
 
Stockman fails to note the heavy taxes Roosevelt inaugurated which put the economy in a tailspin in 1937. Again, high taxes for a frail economy do not follow Keynesian prescriptions. The economy’s GNP would not match that of 1929 until around 1941 or so – a ringing damnation of FDR’s utter failure to bring about economic rejuvenation. The evidence is clear that the economy was recovering in spite of FDR’s hodge podge of voodoo economics.
 
The main implication of Stockman’s analysis is that all of the politicians claiming to channel FDR during the economic meltdown of 2007/2008 were channeling a fraud who did not even practice the Keynesianism they so worshipped.
 
Simple ideas attract simple minds. Keynesianism is a simple idea.

Reference
New Deal Myths of Recovery (Chapter 8), The Great Deformation, David Stockman, 2013

Copyright 2013 Tony Bonn. All rights reserved.

Sunday, May 12, 2013

Treason at Pearl Harbor

The knowledge that Pearl Harbor was an act of treason by American oligarchs, including Franklin Delano Roosevelt, has existed since World War 2. Americans believe lies if they believe otherwise.
 
When we last wrote about this subject a few years ago, we exonerated Franklin Roosevelt of treachery in the case of Pearl Harbor although we argued that other domestic forces manipulated America into war for less than honorable reasons. After reconsidering the evidence, we now regard Roosevelt as a mass murderer who conspired with these very forces to drag America into a war it didn’t want.
 
The Army Board of 1944 established to investigate the Pearl Harbor fiasco wrote, "...everything that the Japanese were planning to do was known to the United States..." It was common knowledge during the campaign of 1944 that Roosevelt committed the terrorist act against Americans, a knowledge which many Republican rank and file had hoped Thomas Dewey would use to his political advantage.
 
They would be sorely disappointed with the Rockefeller appointed candidate as Phyllis Schafly and Gary Allen reported many decades ago. But Schafly also noted, with some interpretation on our part, that Roosevelt was a diehard Anglophile who would do anything which the King of England ordered.
 
One of the reasons Americans resisted war was that it had learned of World War I that the powers who instigated it did so not for moral reasons but for economic ones. World War I was the machination of royal European and American plutocrats who wanted the war to enrich their personal fortunes. The DuPonts were an example of a family which profited exorbitantly from the war. The Krupps were an example from Germany who did so. And of course the Rockefellers made their usual billions from the carnage.
 
Indeed, decorated Marine Corp general Smedley Butler told Americans, after an exemplary career in the Marines, that all American wars were for the benefit of Wall Street plutocrats. Coupled with Americans’ reverence for President Washington’s sage advice to avoid European entanglements, and observing the brutality with which the Bonus Marchers were gunned down by General MacArthur, Americans wanted no part in another godless war and its mistreated veterans.
 
Thus the plutocrats had to manufacture a more clever plan to enlist America in another senseless war. After establishing Hitler in power, they proceeded to setup the bait with Japan from which point Roosevelt accepted the task of delivering the war.
 
Pulling out a page from the Spanish American War in which a mine was attached to the USS Maine by Cuban American saboteurs in order to blow it up in a false flag attack, the plutocrats replayed their treachery of 1898 on a larger scale at Pearl Harbor.
 
Roosevelt’s first step was to transfer in 1940 the Pacific fleet to Pearl Harbor in the American colony of Hawaii, against the adamant objections of commanders Admirals Richardson and Kimmel, both of whom voiced their strong concerns personally to Roosevelt. The president replaced Richardson with Kimmel after an October 1940 meeting in which he strenuously objected to the relocation on grounds of inadequate air and torpedo protection.
 
On February 11, 1941, Roosevelt told Navy Chief Admiral Stark that he was willing to lose 6 cruisers and 2 aircraft carriers in order to instigate war. This desire is a restatement of previous wishes to lose American assets as a pretext for war. This remark by Roosevelt is the smoking gun that he desired war by sacrificing American lives.
 
This sentiment was documented by Winston Churchill at the Atlantic Conference in June 1941 when he observed that Roosevelt had an intense, manic desire for war. This statement came from a man who was conspiring with Roosevelt to perpetrate the terrorist attacks.
 
Navy analyst Arthur McCollum wrote an 8 point memo in October 1940 which outlined specific steps which the American government could follow in order to provoke hostilities with Japan – advice which Roosevelt enacted with haste. One of the major points recommended cutting off American oil to Japan, an act which would force invasion of the Dutch East Indies to replace the oil. On June 23, 1941 Roosevelt did just that in addition to freezing all Japanese financial assets in the US.
 
The Japanese naval codes have been a source of much contention. The basic facts are that the United States Navy had broken by late 1940 the important JN-25B codes which relayed Japanese orders to its Pacific fleet. No later than November 1941, Roosevelt received twice daily briefings from his aide Captain John Beardell of the Japanese broadcasts which were decoded in real time.
 
At this point, the war apologists argue that the codes were not fully broken until January 1942 and that even then it was difficult to interpret the meaning of the transmissions. They argue that the decoders and analysts did not have sufficient means to make sense of the information and to separate the wheat from the chaff. This is pure nonsense as the Roosevelt briefings make clear. In addition the Japanese messages were communicated numerous times to their recipients, making the comprehension of intent and location of the fleet rather perspicuous.
 
Subsequent investigations as late as 1995 confirm that US intelligence agencies had the means of interpreting the messages and understanding them well before December 7, 1941. The most damning evidence against the treason apologists is that the US government refuses to this very day to release over 90% of the more than 26,000 transmissions intercepted between September 1 – December 4 1941.
 
And if hearing it from the horse’s mouth was not enough, numerous military, diplomatic, and commercial sources informed US government officials of Japanese military preparations for war and a surprise attack – most notably at Pearl Harbor. Even the German ambassador to the United States attempted to warn US government officials of the attack.
 
To ensure that war was not captured from the jaws of victory, Roosevelt imperiously cut off diplomatic relations with Japan when Japanese prime minister Prince Konoe attempted desperately in the fall of 1941 to meet with Roosevelt to establish grounds for truce prior to the outbreak of hostilities. Roosevelt would have none of it.
 
Only through strong delusion or willful deceit could anyone claim that the attack on Pearl Harbor was not known well in advance of its occurrence and that Franklin Roosevelt was not actively moving the chess pieces around the global chess board in order to get the war he and Churchill so desired.
 
Many historians have long reported, even during World War 2 itself, that the US government had advance notice of the attacks on Pearl Harbor, and that the US government under Roosevelt's personal orders gave commands which willfully and deliberately put US men and resources in vulnerable exposed positions in order to suffer brutal assault by the Japanese. In no uncertain terms do we declare Franklin Delano Roosevelt a war criminal, a liar, and a mass murderer, a distinction he shares with his good friend Adolf Hitler, Lyndon Johnson, and George Bush. Thank God for judgment day.
 
Reference
The Pearl Harbor Deception, apfn.org
Pearl Harbor, The Mother of All Conspiricies, whatreallyhappened.com

Copyright 2013 Tony Bonn. All rights reserved.