NATIONALIZATION CONTINUES

The U.S. government's Anaconda Plan continues to claim victims. As the bailouts continue, the stranglehold by the government on the auto industry tightens. The latest victim is the chairman and CEO of GM, Rick Wagoner. He has been shown the door by the Obama administration as part of their twenty pounds of flesh for more bailout money. This nationalization began under the Bush administration when Secretary Henry Paulson tossed AIG CEO, Robert Willumstad under the bus and replaced him with Edward Liddy. We see where that has led us as now Liddy is under pressure to resign.

This appears to be a part of a continued plan to nationalize the largest industries of the U.S. first, I think in preparation to at least change the country to a mixed (European) economy. Once there, it would appear the Obama administration has its eye set on a full-blown command economy.

Make no mistake these CEOs losing their jobs are not sympathetic figures. The problem with this strategy is that the government is beginning to resemble the FDR Administration and its heavy-handed enforcement during the New Deal. Under the National Industrial Relations Act (NIRA) and the Agricultural Adjustment Act (AAA), both passed in 1933, the government tried to exercise control of every industrial and agricultural entity in the U.S., essentially trying make them monopolies run by the government. These two pieces of legislation fixed prices and agricultural production quotas, even going so far as to pay farmers to destroy crops and livestock to control supply and raise prices. All this while people in the country were starving.

This system was based on that put in place by Mussolini in Italy. Both these government power grabs were struck down by the Supreme Court in 1935 after the storm trooper tactics of the National Recovery Administration (NRA) had pushed the U.S. down the road towards fascism, Italian style. The most insidious part of the NRA was its enforcement arm led by former General Hugh Johnson who led thousands of code enforcers who zealously enforced hundreds of business codes. Many stories came to light of business owners, including Jack Magid, a New Jersey tailor who was arrested, fined and jailed for pressing a suit for thiry-five cents, instead of the forty cents mandated by the government code.

According to the book "How Capitalism Saved America", by Thomas J. DiLorenzo this was common throughout the U.S. I recommend reading this book as it is a great primer on capitalism and the New Deal.

This excerpt from the book "The Roosevelt Myth" (1944) by John T. Flynn gives a chilling account of excessive government power:

“ The NRA was discovering it could not enforce its rules. Black markets grew up. Only the most violent police methods could procure enforcement. In Sidney Hillman’s garment industry the code authority employed enforcement police. They roamed through the garment district like storm troopers. They could enter a man’s factory, send him out, line up his employees, subject them to minute interrogation, take over his books on the instant. Night work was forbidden. Flying squadrons of these private coat-and-suit police went through the district at night, battering down doors with axes looking for men who were committing the crime of sewing together a pair of pants at night. But without these harsh methods many code authorities said there could be no compliance because the public was not back of it. ”

After all, our president is quite fond of declaring this the greatest crisis facing the U.S. since the Great Depression, it is wise to acquaint ourselves with the government led power grab from the past to warn against the present.