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That 30’s Show

COMMENT: In recent months, many articles and op-ed columns have noted the parallels between the present and events in the 1930’s. In particular, commentary has underscored the causality between the economic desperation wrought by the Great Depression and the rise of fascism in Germany.

 The link between financial crisis and the ascendance fascist political sentiment echoes a central theme presented over the decades in the broadcasts and posts on this website.

Representative of these articles are a couple of stories featured in a characteristically incisive post by “Pterrafractyl.” They are worth recapitulating for emphasis. Afterward, we will supplement these stories with commentary–none of these stories note that this is not happenstance. Fascism and the Second World War were not freak occurrences. 

Rather, they were outgrowths of the most powerful and profound economic, religious and “socio-philosophical” forces in our civilization. Whether or not the horrors of “That 30’s Show” are repeated remains to be seen.

After recapping a couple of stories, we will ruminate about the present politico-journalistic landscape.

“Ghost of Nazi Past Haunts Haunts Austerity-Gripped Europe: Euro Credit” by John Glover; bloomberg.com; 6/22/2012.

EXCERPT: The specter of the 1930s finan­cial cri­sis that cul­mi­nated in the rise of Adolf Hitler’s Nazi party and the Sec­ond World War is stalk­ing Europe.

In May 1931, Cred­i­tanstalt, founded in Vienna by the Roth­schild bank­ing dynasty and the biggest lender in what remained of the Hab­s­burg Empire, suf­fered a run. Its col­lapse after a merger with an insol­vent rival sparked a cri­sis that left Ger­many and cen­tral Europe strewn with failed banks, caused defaults in Europe and Latin Amer­ica, knocked the pound off the gold stan­dard, and forced the New York Fed­eral Reserve by Octo­ber to raise its dis­count rate by 2 per­cent­age points.

“The biggest eco­nomic cat­a­stro­phe of the last cen­tury has been, of course, the big cri­sis after 1929,” Ewald Nowotny, gov­er­nor of the Aus­trian cen­tral bank, said at a con­fer­ence this week in Vienna. “I truly can say that when we had the big cri­sis of 2007 and 2008, it was in the back of the mind of every­body, all of us, every cen­tral banker, that we must avoid the mis­takes of the 1930s.”

What Harold James, pro­fes­sor of his­tory and inter­na­tional affairs at Prince­ton Uni­ver­sity, calls the “vicious cycle” of con­ta­gion between banks and sov­er­eigns is spin­ning today, just as it was 80 years ago. Spain’s 10-year bor­row­ing cost has aver­aged 6.6 per­cent this month, more than a per­cent­age point higher than a year ago, after it sought 100 bil­lion euros ($127 bil­lion) to bol­ster its banks.

Local Tax­pay­ers

The Euro­pean Union’s accord with Spain, trig­gered by the col­lapse of Bankia SA, the country’s third-biggest lender, will leave the nation with debt about equiv­a­lent to its annual gross domes­tic prod­uct. Ireland’s 63 billion-euro bailout of its banks pushed sov­er­eign debt to 108 per­cent of GDP last year from 44 per­cent in 2008.

“The crit­i­cal thing now and in the 1930s is that you can’t dis­tin­guish between bank and sov­er­eign debt,” said Brian Read­ing, an econ­o­mist at Lom­bard Street Research in Lon­don. “As long as bank­ing sys­tems remain national, it doesn’t much mat­ter how inter­na­tional the bank is, local tax­pay­ers are on the hook for it if it col­lapses.”

Under Germany’s aus­ter­ity poli­cies in the 1930s, taxes rose, ben­e­fits and wages were reduced and unem­ploy­ment soared, stok­ing the pop­u­lar ire that Hitler har­nessed. Extrem­ists are gain­ing ground now as unem­ploy­ment in Greece passes the 20 per­cent mark after five years of reces­sion. The far-right Golden Dawn won 6.9 per­cent of the vote and 18 seats in the country’s most recent elec­tions. France’s anti-immigrant, anti-euro National Front won two seats in par­lia­men­tary elec­tions June 17.

Weak Merg­ers

Cred­i­tanstalt in 1931, like Spain’s Bankia now, was cre­ated by merg­ers with lenders weak­ened by toxic loans and cap­i­tal short­falls. After Cred­i­tanstalt failed, the gov­ern­ment stepped in to prop it up, fatally hurt­ing its own credit. A run on Austria’s bonds and the schilling ensued . . . .

COMMENT: Paul Krugman has also noted the parallels between the present financial crisis and the Creditanstalt collapse, as well as warning about the dangers of implementing “austerity” here in this country, as Franklin Delano Roosevelt did in 1937, thus perpetuating the Great Depression.

“The Great Abdication” by Paul Krugman; The New York Times; 6/24/2012.

EXCERPT: Among economists who know their history, the mere mention of certain years evokes shivers. For example, three years ago Christina Romer, then the head of President Obama’s Council of Economic Advisers, warned politicians not to re-enact 1937 — the year F.D.R. shifted, far too soon, from fiscal stimulus to austerity, plunging the recovering economy back into recession. Unfortunately, this advice was ignored.

But now I’m hearing more and more about an even more fateful year. Suddenly normally calm economists are talking about 1931, the year everything fell apart.

It started with a banking crisis in a small European country (Austria). Austria tried to step in with a bank rescue — but the spiraling cost of the rescue put the government’s own solvency in doubt. Austria’s troubles shouldn’t have been big enough to have large effects on the world economy, but in practice they created a panic that spread around the world. Sound familiar?

The really crucial lesson of 1931, however, was about the dangers of policy abdication. Stronger European governments could have helped Austria manage its problems. Central banks, notably the Bank of France and the Federal Reserve, could have done much more to limit the damage. But nobody with the power to contain the crisis stepped up to the plate; everyone who could and should have acted declared that it was someone else’s responsibility.

And it’s happening again, both in Europe and in America.

Consider first how European leaders have been handling the banking crisis in Spain. (Forget about Greece, which is pretty much a lost cause; Spain is where the fate of Europe will be decided.) Like Austria in 1931, Spain has troubled banks that desperately need more capital, but the Spanish government now, like Austria’s government then, faces questions about its own solvency.

So what should European leaders — who have an overwhelming interest in containing the Spanish crisis — do? It seems obvious that European creditor nations need, one way or another, to assume some of the financial risks facing Spanish banks. No, Germany won’t like it — but with the very survival of the euro at stake, a bit of financial risk should be a small consideration.

But no. Europe’s “solution” was to lend money to the Spanish government, and tell that government to bail out its own banks. It took financial markets no time at all to figure out that this solved nothing, that it just put Spain’s government more deeply in debt. And the European crisis is now deeper than ever. . . .

COMMENT: What contemporary analysts are NOT presenting is the fact that the present state of affairs is not happenstance. Germany is holding the world economy hostage, insisting that bailouts of threatened Euro economies by Germany will only take place if those countries surrender political sovereignty, allowing Germany decisive say in those nations’ economic matters.

As we have seen so many times, this is no accident. Germany is realizing the goals of the Third Reich which, in turn, sought the actualization of the theories of Friedrich List.

Of course, neither Paul Krugman nor the other commentators observing the ominous parallels between the present and “That ’30’s Show” are free to discuss the full panorama of events. Whether writing for The New York Times nor Bloomberg News nor any other mainstream media outlet, they are not free to discuss the full panorama of events. They are not to be faulted for this.

As the brilliant political comedian Mort Sahl noted in his autobiography Heartland, “How many lies can you allow yourself to believe before you belong to the lie?” (Mort Sahl, by the way, was one of the investigators working for New Orleans DA Jim Garrison in his investigation of President Kennedy’s assassination.)

Does our world belong to the lie?



5 comments for “That 30’s Show”

  1. How Ger­many is econ­omy hostage without or avoiding usa economy.

    Posted by nashir | July 17, 2012, 10:53 pm
  2. It’s kind of fascinating how casually the concept of a “Germanic Empire” is just thrown out there in this op-ed piece:

    Toronto Star
    Rise of the German empire
    Published on Wednesday July 11, 2012
    Thomas Klassen

    It has never been easy to head an empire. Ask Angela Merkel, the German chancellor.

    The empires of the 20th century have all vanished. In the decades after World War II, the French, English and Portuguese reluctantly withdrew from their remaining colonial lands in Africa and Asia, often with great bloodshed. The handover of Hong Kong from the British to the Chinese in 1997 marked the symbolic end of the old empires.

    But empires have not gone away, rather they have mutated.

    Today, two great empires straddle the globe. The American empire is based on the power of the U.S. dollar as the world’s reserve currency and the widespread adoption of U.S.-style capitalism.

    The other empire is Germany. It dominates by its sheer size, productivity and the fiscal prudence of its government, the European Union and the common currency of most of Europe, the euro. That the European Central Bank – charged with setting monetary policy for the eurozone – has its headquarters in Frankfurt is no coincidence.

    Trouble in empires often arises at the far frontiers. This was true of the Roman Empire and is again true today.

    The crises in Ireland and Greece, at the furthest reaches of the eurozone, illustrate that the rules set down by the emperor are not always, or even usually, obeyed at the periphery. As well, emperors have always kept closer watch on their nearest dominations and let their attention wander from the distant colonies.

    As the euro crisis drifts from Greece to Portugal and Spain and possibly next to Italy, the citizens of those countries are being faced with a stark choice. Remain in the empire or forge an independent, and solitary, future.

    The empire offers protection and security (from inflation, international competition and military aggression) and opportunities (for jobs and education) but exacts its price in unwanted and often agonizing obligations. But this has always been the nature of empires.

    Chancellor Merkel, like emperors through the ages, well realizes that subjects will grumble and complain but that open revolts are few. She can remain confident that although the euro crisis has made the muscle of the German empire more visible, it is in no danger of decline.

    Yeah, that “muscle” is certainly more visible these days. Crack that whip Angela!

    Bloomberg News
    Merkel Says More Work Is Needed to Make European Project Succeed
    By Tony Czuczka on July 18, 2012

    Chancellor Angela Merkel called on fellow leaders to work harder to make Europe succeed without waiting for unconditional German help, suggesting the euro will be in jeopardy unless policy makers do more to defend it.

    “We haven’t yet shaped the European project in a way that we can be sure that everything will work, will turn out well,” Merkel said in an interview posted on her Christian Democratic Union party’s website today. “That means we have to keep working. Still, I’m optimistic that we will succeed.”

    One day before German lawmakers vote on a European bank bailout for Spain, Merkel indicated that she won’t take on additional burdens to stem the euro area’s debt crisis without stronger checks on countries’ budgets. The principle of “no liability unless we can really exercise control” is shared by “a large part” of the German population, she said.

    The economy, while showing signs of slowing, is still faring better than its counterparts. Unemployment rose in June for the fourth month this year, yet remains at a two-decade low of 6.8 percent. The International Monetary Fund on July 16 raised its forecast for German economic growth this year to 1 percent, while predicting the 17-nation euro area will contract 0.3 percent.

    Germany “only does well if our European neighbors are doing well,” Merkel said in the interview. Even so, that euro countries can’t expect “solidarity” unless they make an effort of their own in return remains one of her “basic principles,” she said.

    Speaking to reporters later after talks with Thai Prime Minister Yingluck Shinawatra, Merkel said that she was “optimistic” lower-house lawmakers will approve Spain’s rescue aid in tomorrow’s vote. The chancellor said that she saw “no indications” of any need for further special sessions of parliament this summer.

    In the interview, Merkel, who grew up in former East Germany and turned 58 yesterday, said the collapse of Communism still shapes her view of Europe and the world.

    “I’m inspired by the experience of freedom,” she said. “I lived for many years in East Germany and I know what it means when you can’t travel and when you can’t speak your mind freely. It’s great that we have overcome the Cold War and that we don’t have to fear war today in Europe.”

    You have to wonder how much the German public has really thought this though. The way this whole thing is being structured now, if a eurozone member breaks the new budget rules, it loses sovereignty and gets to go into the austerity death-spiral. So maintaining control of this empire is dependent on NEVER RUNNING INTO ECONOMIC TROUBLES EVEN FOR A FEW YEARS. At some point Germany itself is going to have to break its own budget rules. After all, it’s already happened. And southern Europe’s economies will EVENTUALLY reemerge…as the empire’s low-wag labor market. That’s the point of the “internal devaluation” Angela & Friends have been pushing for this whole time. And when all those wonderful, high-wage/high-benefits jobs leave Germany (lower wages help keep down inflation, and inflation is the biggest threat in the world, right?), we may and up seeing a weird merry-go-round of countries getting to their own turns to crack the austerity-whip. It’s not hard to imagine why amoral economic elites would LOVE this kind of set up, but it’s really baffling why the German public wants this. Imperial solidarity through shared beat downs. Sounds awesome.

    Posted by Pterrafractyl | July 18, 2012, 8:36 am
  3. This new piece on antiwar.com covers some familiar ground for FTR listeners/Spitfirelist readers: http://original.antiwar.com/justin/2012/10/28/deja-vu-fascism-on-the-rise/

    Posted by Mike J. | November 5, 2012, 5:18 am
  4. http://www.dw.de/neo-nazis-form-expanding-networks-beyond-national-borders/a-17104509

    Neo-Nazis form expanding networks beyond national borders

    The cooperation between right-wing extremists from different countries is gaining strength. Experts warn that this phenomenon could have dangerous consequences.

    The murder of Pavlos Fyssas seems to have served as a wake up call for the Greek authorities. An antifascist activist and rapper, Fyssas was stabbed to death on Wednesday (September 18) near Athens.

    The suspected offender was a member of the neo-Nazi political party Golden Dawn. The party, which gained nearly 7 percent of the votes in the Greek parliamentary elections of 2012, has denied any involvement.

    But the authorities are nevertheless determined to take a stronger stance against right-wing extremism. In several Greek cities, police officers have arrested party members who possess weapons.

    Pan-European networks

    Golden Dawn has allies all over Europe. In 2004, it joined the European National Front alliance together with other European far-right parties, including Germany’s NPD and Spain’s La Falange. In Germany, recent investigations into the murders committed by the neo-Nazi group NSU (National Socialist Underground) have revealed an extensive international network that serves the interests of right-wing extremists.

    “Neo-Nazis began to network, also on an international level, in the mid-1990s or even earlier,” said Berlin-based political scientist and right-wing extremism expert Hajo Funke.

    Andreas Speit, a Hamburg-based author of several books on right-wing extremism, says that neo-Nazi activity can be broadly divided into three different categories.

    “You have to distinguish between three types: the subculture scene, the violent neo-Nazis and the politics,” Speit said.

    He has observed that, on the cultural level, networking is being done at right-wing rock concerts. German bands with racist song lyrics tour all around Europe.

    “As a right-wing rock band, you can perform in countries like Italy or Greece,” added Speit. CDs with songs that are banned in Germany are produced abroad and then brought into the country.

    German neo-Nazis commit violence abroad

    Experts have observed a form of cross-border cooperation between violent neo-Nazis. Internationally active groups such as the Ku Klux Klan, Combat 18 and Blood and Honour can help individuals wanted for right-wing crimes go into hiding in other countries.

    “Such groups have become stronger in recent years because domestic intelligence agencies have allowed it to happen,” Funke said.

    This international networking results in violent German neo-Nazis committing crimes abroad.

    “There have been incidents of German neo-Nazis traveling to the Czech Republic and taking part in attacks on Roma and Sinti people – or going to Greece to see how the Golden Dawn operates,” explained Speit. “You could call this violence tourism.”

    However, right-wing extremists also attempt to gain influence through legal methods. The European Alliance for Freedom and the Alliance of European National Movements are two parties that plan to run for office in the next European Parliament elections.

    Ideology of ‘ethno-pluralism’

    But why do nationalists from various countries work with each other?

    “Neo-Nazis don’t think in terms of national borders,” said Speit. “They don’t hinder each other’s activities but instead they want to see the white race maintain power around the world. And as long as foreigners stay in their own countries, the neo-Nazis have nothing against them. The ideology at play here is ethno-pluralism.”

    The one thing that unites the right-wing parties from all countries is hatred of Jews. This is a reason why many neo-Nazis had great respect for former Iranian president Mahmoud Ahmadinejad, who openly spoke against Israel and threatened to destroy it. The bond between Islamists and neo-Nazis is not a new phenomenon, however.

    “Already in the 1920s there were strong alliances between the right-wing groups of Europe but also with the Arab world,” said Speit, adding that the ideology behind this was banal. “The right-wing extremists realized that the other group was also fond of upholding its old traditions, including those pertaining to dealing with women.”

    Impact of economic crisis

    According to Speit, right-wing ideology is spreading internationally. This is partly due to the effects of the economic crisis and the uncertainty felt by the middle class. The networking between neo-Nazis only exacerbates the problem.

    “We can expect that they will get more mandates during the next EU parliamentary elections,” said Speit.

    The movement is also “unbelievably active” on the music scene. Young people from small towns are easily excited by the local right-wing extremists getting the chance to travel to Italy to attend a concert. This is why it is important to take preventative measures.

    “Turning away doesn’t solve the problem,” said Speit. “If you confront right-wing extremists, you have a chance to change them.”

    Posted by Vanfield | September 24, 2013, 11:09 am
  5. http://www.ft.com/intl/cms/s/0/e5046b8c-3261-11e3-b3a7-00144feab7de.html#axzz2hdEIdrGe

    October 11, 2013 1:55 pm
    Greek police ‘infiltrated’ by Golden Dawn

    By Kerin Hope in Athens

    Greece’s neo-Nazi Golden Dawn party has penetrated the country’s police force, set up caches of heavy weapons in remote locations and trained its recruits to carry out brutal attacks against immigrants and political opponents, according to the country’s top security official.

    Nikos Dendias, minister of public order and civil protection, said in an interview with the Financial Times that Golden Dawn’s cult of extreme violence was “unique” among European far-right groups.

    He has assigned the police antiterrorism unit to probe the party’s allegedly criminal activities, after Pavlos Fyssas, a leftwing rapper, was fatally stabbed on September 15 by a Golden Dawn activist in a low-income Athens neighbourhood.

    But another reason for taking the investigation away from the regular police force is that it has been infiltrated by Golden Dawn. Some police officers in districts with sizeable immigrant populations have gone beyond colluding with local neo-Nazis to set up political cells within their units, Mr Dendias said.

    “I have brought in the internal affairs division of the force to clarify exactly what sort of structures Golden Dawn has within the police,” Mr Dendias said. “We know these cells exist, we have evidence. We will take firm measures.”

    Golden Dawn declined to comment on Mr Dendias’s allegations when contacted by the FT on Friday.

    Greece’s constitution bans the outlawing of political parties. However, a Greek supreme court prosecutor has ruled that the party acted as a criminal organisation, opening the way for a full-scale investigation of its 18 members of parliament and dozens of activist members.

    Nikos Mihaloliakos, Golden Dawn’s leader, and two other deputies are in jail awaiting trial.

    The move to crack down on Golden Dawn follows an escalation of violent incidents in recent months. Analysts say attacks became more frequent because of police foot-dragging over making arrests of Golden Dawn sympathisers and reluctance by politicians to take a strong stand against it.
    More video

    Mr Dendias rejects criticism that the coalition government under premier Antonis Samaras, leader of the centre-right New Democracy party, has shown excessive tolerance of Golden Dawn’s activities.

    “I have been concerned about them since the day I was appointed,” he said. “We were already investigating but it was the (Fyssas) murder that made clear we had solid grounds to proceed against them as a criminal organisation.”

    Information that Golden Dawn has stashed offensive weapons in strategic locations around Greece appears to be accurate even though none have so far been found, Mr Dendias said.
    “So far we have not been able to substantiate these alarming allegations. We’re looking in some unusual places  . .  and the search will continue”

    – Nikos Dendias

    “We are searching across the country but so far we have not been able to substantiate these alarming allegations. We’re looking in some unusual places, monasteries in the countryside, for example, and the search will continue.”

    Some ultraconservative priests in the Greek orthodox church have voiced support for Golden Dawn, bucking the official disapproval of church authorities.

    Prosecutors called this week for six more Golden Dawn lawmakers to be stripped of their parliamentary immunity. Among them is Eleni Zaroulia, the wife of Mr Mihaloliakos, accused of sending a 9-millimetre bullet to her husband this week concealed in a pile of underwear she took to Korydallos prison.

    Opinion polls show Golden Dawn’s popularity has plunged since the stabbing from 11-13 per cent to around 7 per cent, the percentage of the vote it won at last year’s general election when it entered parliament for the first time. Nevertheless, it is still the third most popular party behind the governing New Democracy and Panhellenic Socialist Movement.

    Yet the government has not gained from the crackdown. It is still polling at the previous 20-22 per cent level, neck-and-neck with Syriza, the radical left opposition. And some commentators have questioned whether the move against Golden Dawn might backfire if it is seen to be a politically motivated vendetta by the government.

    Analysts say Golden Dawn’s voter base is mainly among people hit hard by the country’s economic crisis, both young Greeks trying to join the labour market and the over-40s, who feel angry and frustrated at losing their jobs.

    The crackdown has sharply curtailed the party’s activities both in Athens and more than 50 regional offices that provide handouts of food and also organise regular activities including military-style training for would-be members and torchlit neo-Nazi events, according to Antonis Ellinas, a political-science professor at Cyprus University.

    “The number of party events has dropped sharply all over Greece since the stabbing but the opinion polls show that core support for Golden Dawn has not been affected,” Mr Ellinas said.” This might imply an entrenched acceptance of the use of violence in Greek political culture.”

    Members of Greece’s Pakistani community, one of the main targets of Golden Dawn’s attacks, say they do not feel any safer than before.

    “It’s too soon to say whether the racist attacks will stop,” said Mohammed Aziz, a warehouse supervisor and Greek resident for more than 15 years. “It’s good the government has finally reacted but we know the neo-Nazis won’t give up so easily.”

    Posted by Vanfield | October 13, 2013, 11:34 am

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