classical economics
for analysis,  forecasting
and policy design

Who Robs America's Young

No Jobs, No Homes, No Children, No Future
By Wayne Jett © September 25, 2011
    Familiarize yourself with the expression “man-made depression.” It refers to an economic depression resulting from actions carefully designed and taken to cause it. That is how depressions come about in the real world. They are neither delivered by a stork nor leaked into society through a flaw in the way markets work, as the myth of good intentions often applied to culpable public officials would have us believe. The Great Depression of the Thirties was man-made, as is the one Americans presently experience.
    Already, in a single paragraph, this report has violated the first rule of elite media: “Thou shalt not imply a conspiracy in the U. S. financial sector.” Alas, conspiracies exist among financiers as they do in all segments of human society. Not surprisingly, financial conspiracies ordinarily revolve around increasing the capital and power of financiers.
Man-Made Depression in 1933 Context
    In early 1933, during the four-month interregnum between Franklin D. Roosevelt’s election and his inauguration as president, a respected Wall Street economist named Norman Dodd attended a tea in the Roosevelts’ New York home. Dodd stated in Eleanor Roosevelt’s presence that the economic depression then plaguing America was “man-made” and elaborated his reasons for thinking so. Shortly after FDR took office, Mrs. Roosevelt invited Dodd to the White House to discuss his views with selected officials of the new administration over lunch.
    Those attending the luncheon in addition to Dodd and the First Lady were Secretary of Agriculture Henry Wallace and Henry Morgenthau Jr. Morgenthau was then newly appointed as head of the Reconstruction Finance Corporation, and would soon be the second and by far longest serving of FDR’s Treasury secretaries.
    The First Lady asked Norman Dodd to repeat his thesis about the man-made depression, which he did, and Morgenthau immediately launched a confrontational argument lasting about a half-hour. Then Morgenthau just as abruptly dropped his attack, saying he really knew little about the topic but was in Washington on orders and doing his best.
    During Morgenthau’s performance, Wallace silently ate his salad. When Morgenthau subsided, Wallace spoke. He said he understood Dodd’s views completely, agreed with them, and hoped Dodd would be successful in persuading influential players in the financial community to support them. Wallace said, however, that he believed Dodd would not succeed in getting financial community support and, even if he did, ending the depression would require government action. If the government were to take such action, Wallace asserted, it would mean the end of the United States. He then rose and left the room.*
Man-made Depression Unabated
    Wallace’s stunning remarks preceded years of severe depression which did not end, as Americans are told, with the onset of World War II. In the Forties, Roosevelt continued raising tax rates as he had every year from 1933 through 1938, but able-bodied men were conscripted into military service and economic production was regulated as national war effort. The war took millions of lives and destroyed prodigious amounts of capital diligently created over generations by middle classes around the world – scarcely a desirable “end” to economic depression.
    Financiers at or near the center of U. S. dominant elite never experienced economic depression in the 1930s or ‘40s. Quite to the contrary. In the ‘30s, these predatory few lived nirvana. They exploited prodigious fortunes looted in securities markets by shopping for valuable assets domestically and abroad at depressed prices often amounting to two to five cents on the dollar. Joseph P. Kennedy, for example, is reported by a friendly biographer as “sitting on top of the world” in late October, 1929, with the enormous capital his trading tactics extracted from the markets during the Great Crash.
Political Rescue for the Young
    How is this relevant today? Or, better stated, how can one argue this is not relevant today?
    Millions of Americans don’t have to look around to know its relevance – they are living in economic depression. All generations are badly impacted. Among the most tragic effects of 21st Century financial conspiracy is the relative poverty of America’s new young adults. Here is how an Associated Press reporter describes their plight:
    “Young adults are the recession's lost generation. … In record numbers, they're struggling to find work, shunning long-distance moves to live with mom and dad, delaying marriage and raising kids out of wedlock, if they're becoming parents at all. The unemployment rate for them is the highest since World War II, and they risk living in poverty more than others - nearly 1 in 5.”
    Yes, President Barack Obama is the new FDR. Into Obama’s waiting arms the American electorate flew, driven by financial improvised explosive devices planted within a Republican administration by Wall Street operatives. The same occurred when voters ran to FDR from tariff, tax and financial fraud injuries inflicted during the presidency of Herbert Hoover. Europeans suffer much the same oppression as Americans. Somehow those who impose man-made depressions must be overcome. ~

* This event and causes of the Great Depression are detailed in The Fruits of Graft – Great Depressions Then and Now, Wayne Jett (Launfal Press, Los Angeles: 2011).