Sunday, July 19, 2009

1939 revisited

A headline in Pravda tells us: Germany becomes Russia’s closest partner in Europe and whole world.

As it happens, I just was pondering the correlations between today and seventy years ago. In the 1930s we also a financial panic, a despised Republican replaced by an adored Democrat, high unemployment, a distressed stock market, deficit spending, an alphabet soup of new government programs, protectionist trade legislation, bureaucrats meddling in the private economy—and despite all that, deepening unemployment, leading in turn to fresh levels of government meddling, spending, und so weiter. (Definition of a zealot: having lost sight of his goals, he redoubles his efforts.) And now add to that a love affair between Berlin and Moscow!

The history books credit Franklin Roosevelt with ending the Great Depression, but in fact unemployment was still at 15 percent in 1938. No, the credit goes to Adolf Hitler. We became the ‘arsenal of democracy’, put our jobless and our empty factories to work, plus built new factories and put the women to work as well. We drafted ten million young men into uniform. And when the war ended, we owned all the money in the world. Our GIs came home, had babies, and were packed off to college for fear that otherwise double-digit unemployment would return. We lived off that bounty—the gold in Fort Knox, the favorable exchange rate, the educated workforce, and the Baby Boom—for the next half-century.

And recall that Hitler had some help from Stalin! On August 24, 1939, the German and Russian foreign ministers signed a ‘Treaty of Non-aggression between German Reich and the Union of Soviet Socialist Republics’. That’s what gave Hitler the freedom of action to invade Poland (while Stalin invaded from the east) and eventually Denmark, Holland, France, und so weiter (while Russia invaded Finland). And we were off to the races. Blue skies! -- Dan Ford

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