At www.chalcedon.edu/articles/0309/030918terrell.php, economics professor Timothy D. Terrell agrees that Roosevelt’s overnight devaluation of the dollar was “Morally ... no different than robbery” but finds it more significant that “Roosevelt completely missed the real cause of the Great Depression. He noticed that prices were falling, and figured that falling prices meant that firms were not getting much revenue, and that firms therefore would have to cut the wages paid to employees ... and the economy would spiral downward. ... Falling prices were seen as the source of economic problems, rather than a needed correction of deeper problems. ... So, taking a few pages from Mussolini’s fascist reforms in Italy, Roosevelt began to group American industries into cartels. These cartels, called Code Authorities, operated under government supervision and had immense authority. They could set quality, prices, and output quantities for the industry. Lower-priced competition was effectively outlawed.
“This program’s failings are too many to elaborate on here, but John Flynn’s book ‘The Roosevelt Myth’ would be a good start for someone wanting more on this topic. In brief, the cartelization scheme was economic nonsense. ...
“Mercifully, this program (run as the National Recovery Administration) was ruled unconstitutional by the Supreme Court in 1935. But the monetary side of Roosevelt’s economic strategy was still in place. And, long-term, it would not be difficult to say that the abandonment of the gold standard in the 1930s was more destructive than Roosevelt’s alphabet soup of federal programs.
“When the American people were deprived of their ability to exchange currency for actual, physical gold ... a major check against the government’s propensity to steal had been lost. Less than 40 years after Roosevelt’s momentous first year in office, Nixon eliminated the last vestiges of the gold standard. ... Today the effects are still with us. ... Creating money out of thin air, as the Federal Reserve does, destroys the value of savings and transfers wealth into the hands of the state and the state’s friends. ...
“As Rousas J. Rushdoony pointed out in ‘Roots of Inflation’: ‘The rise of the modern totalitarian state has its economic origin in the abandonment of gold coinage for paper money. As the creator of fiat money, of instant money by means of legalized counterfeiting of wealth, the state is always the wealthiest and most powerful force in society.’ ”
Thus ends today’s reading from Professor Terrell.
In our continuing attempt to provide Mr. Gordon with at least a modest summary of the economic crimes launched by the tyrant Roosevelt, let us turn now to www.fee.org/vnews.php?nid=4344, where well-known historian, author and frequent Wall Street Journal contributor James Bovard (author of “The Great Gold Robbery”) explains the impact of Roosevelt’s gold seizure:
“The refusal to convert paper dollars into gold meant that the government was ‘free’ to flood the country with paper money and sabotage the currency’s value. The stability of the value of currency is one of the clearest measures of a government’s trustworthiness. Before Roosevelt took office, Americans clearly recognized the moral implications of inflation. Vice President Calvin Coolidge had bluntly declared in 1922: ‘Inflation is repudiation.’ Inflation is a tax whereby government prints extra money to finance its deficit spending. The ... government’s printing presses devalue people’s paychecks and effectively allow government to default on the value of its debt. ...
“Since Roosevelt banned citizens from owning gold in 1933 and forced people to rely on the unbacked promises of politicians for the value of their currency, the dollar has lost about 93 percent of its purchasing power. (See the Web site of the U.S. Bureau of Labor Statistics at www.bls.gov/cpihome.htm.) The collapse in the dollar’s purchasing power severely disrupted the ability of scores of millions of Americans to plan their own lives and save for retirement,” Mr. Bovard concludes.
Since Professor Terrell mentioned columnist John Flynn’s “The Roosevelt Myth” (Devin-Adair, 1948) above, let’s wrap up Mr. Gordon’s little introductory survey course by turning to page 414 of that most valuable resource on the Roosevelt regime, where Mr. Flynn explains that prior to the Roosevelt regime:
“We lived in a system which depended for its expansion upon private investment in private enterprise. Today we live in a system which depends for its expansion and vitality upon the government. This is a pre-war European importation -- imported at the moment when it had fallen into complete disintegration in Europe. In America today every fourth person depends for his livelihood upon employment either directly by the government or indirectly in some industry supported by government funds.”
(Flynn was writing in 1948, and last revised his book in 1956. Today, that percentage of government leeches should surely be “one in two” -- V.S.)
“In this substituted system the government confiscates by taxes or borrowings the savings of all the citizens and invests them in non-wealth-producing enterprises in order to create work,” Mr. Flynn continues. “Behold the picture of the American economy today: taxes which confiscate the savings of every citizen, a public debt of 250 billion dollars as against a pre-Roosevelt debt of 19 billions, a government budget of 40 billions instead of four before Roosevelt, inflation doubling the prices and reducing the lower-bracket employed workers to a state of pauperism as bad as that of the unemployed in the depression, more people on various kinds of government relief than when we had 11 million unemployed, Americans trapped in the economic disasters and the political quarrels of every nation on earth and a system of permanent militarism closely resembling what we beheld with horror in Europe for decades, bureaucrats swarming over every field of life and the President calling for more power, more price-fixing, more regulation and more billions. Does this look like the traditional American scene? Or does it not look rather like the system built by Bismarck in Germany in the last century and imitated by the lesser Bismarcks in Europe?”
What Roosevelt had created, Mr. Flynn brilliantly prophesied in 1948, was “that kind of state-supported economic system that will continue to devour a little at a time the private system until it disappears altogether.” In a word: fascism. And to think that it all started with Roosevelt seizing the people’s gold.
But should that really be such a surprise? Let us conclude, for today, by looking at what another powerful mid-20th century leader had to say about uncoupling a nation’s currency from gold:
“Gold is not necessary. I have no interest in gold. We’ll build a solid state, without an ounce of gold behind it. Anyone who sells above the set prices, let him be marched off to a concentration.” -- Adolf Hitler