[THS] Steven Jonas: Financing Fascism, II

[Peter Webster]

http://blog.buzzflash.com/jonas/187

Dr. J.’s BF Commentary No. 137: Financing Fascism, II
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Submitted by Anonymous on Tue, 03/30/2010 - 4:30pm.

    * Steven Jonas


As I noted at the beginning of my Commentary No. 136 that appeared on BuzzFlash
last week, fascism may be briefly defined as: “A politico-economic system in which
there is: total executive branch control of both the legislative and administrative
powers of government; no independent judiciary; no Constitution that embodies the
Rule of Law standing above the people who run the government; no inherent
personal rights or liberties; a single national ideology that first demonizes and then
criminalizes all political, religious, and ideological opposition to it; the massive and
regular use of hate, fear, racial and religious prejudice, the Big Lie technique, mob
psychology, mob actions and ultimately individual and collective violence to achieve
political and economic ends; and corporate domination of economic, fiscal, and
regulatory policy."

That column focused in particular on Nazi Germany and how the Nazis were able to
finance their government once they took power.  (The financing of the Nazi Party
before it took power is another story.  Principal sources of its funds were a
consortium of German companies headed by the steel baron, Fritz Thyssen, and
certain foreign contributors. Prominent among the latter were George Herbert
Walker, a George Walker Bush great-grandfather and the Brown Brothers Harriman
Bank.)  The list included, briefly: 1) the final discontinuance of World War I
reparation payments in 1932, before the Nazis took power; 2) in addition to the
foreign contributions to the Nazi Party, significant foreign investments being made in
Germany, especially by right-wing capitalists from abroad, such as George W. Bush’s
grandfather, the pro-Nazi banker Prescott Bush;  3) because of the quality of its
manufactured goods and such specialty items as machine tools, Germany maintained
a significant foreign trade, even during the Great Depression;  4) the Reichsbank was
able to devise a scheme for printing money that didn’t look like the plain old open,
flat-out printing of money that had led to the German hyper-inflation of 1923;  5) the
Nazis were able to obtain a certain amount of foreign loans, from such friendly
foreign bankers as the Bushes and the Harrimans;  6) benefitting from the availability
of at least some of these funds, they started a massive, Keynesian-like, public works
program, beginning with famed “Autobahns,” which indeed did stimulate economic
growth.

Once economic recovery was under way, over time the Nazis also used: a program to
remove women from the labor market; national military conscription, at low wages,
which further tightened the labor market; the massive, very profitable, rearmament
program; the outright theft of Jewish property; the re-militarization of the Rhineland
(1936); the “Anschluss” with Austria (1938); the conquest of Czechoslovakia
(1938-39); the access to Rumanian oil by alliance; their further conquests to the East
and the West and the capital it brought under their control; and then the increasing
use, during the War, of slave labor.

What possible parallels might there be for the United States and what limits might be
placed on fascist ambitions here (not that there are any, of course) by the current
perilous state of the US economy?  It is characterized by: a massive foreign debt, a
significant amount of which is held by China; a massive decline of domestic
manufacturing capability, a significant amount of which has gone to China; a
dependence on finance capitalism for profit-making; the development of what
Jonathan Westminster calls in his 1996 book, The 15% Solution: A Political History of
American Fascism, 2001-2022, the "Resource-Based Economy" that is petroleum,
natural gas, coal, and lumber, both for domestic consumption and export; and a
dependency on "small business" for job creation at a time when most small
businesses sell goods, services, or food, but do not for the most part pay people for
producing things, from which income would then be available to buy the goods,
services, and food that small businesses sell.

So where does potential US fascism fit into all of this?  Quite narrowly.  In fact, the
potential US fascists, that is, major sections of the "Tea Party" movement, a (sadly)
increasing fraction of the GOP, the authoritarian Christian Right like the
"Reconstructionist" movement (that has, for example, given political donations to the
former Arkansas Governor Mike Huckabee), and the so-called (right-wing) "militia"
movement, would have some serious problems with financing.

Because of their stated ideology and very limited political program characterized
mainly by "small government" (that is when it comes to participation in and
regulation of the economy, not when it comes to such personal choices as abortion,
gay marriage, religious belief or non-belief, privacy in sexual matters, end-of-life
decision-making and so forth) and "cut taxes," they would almost have to even
further reduce taxes (the US has one of the lowest overall tax rates in the capitalist
world), or at least appear to reduce taxes, and, in a polar contrast to the Nazis,
would have to end all government-run economic stimulus programs.  Further, unless
they did a volte face on this issue as well, they would have to continue to allow the
massive export of domestic capital that began under Reagan and has continued
under all succeeding Presidents.

So where would the money come from?  First, under a fascist government there
would be an explosion of the development of the Resource Based Economy.  Both
coal and natural gas would be available for export in increasing quantities as would
lumber as the National Forests would be opened up for full exploitation.  There would
be a major move to annex Western Canada, either actually or functionally, to
massively increase further access to exploitable natural resources.  Second, there
would be a massive tax increase, although it would be disguised as best as they
could to make it not look like a tax increase and it surely would be retrogressive: that
is, the imposition of (or increase in if a predecessor democratic government had
already taken a step in that direction) a national sales tax (Value Added Tax).  This
would likely be spun as an "anti-terrorism" (read 'funds for repression of all
opposition') fee.

Third, there would be foreign investment, especially from huge US multi-nationals,
bringing money home to take advantage of the further weakened labor pool.  The
chronically unemployed would be characterized as "lazy, anti-American, good-for-
nothings" but their existence would massively aid in keeping wages down and
attractive for foreign investment.  Unions, of course, would be either illegalized or
functionally rendered even more powerless than they already are.  So, as wage-levels
dropped, manufacturing might actually go up.  Fourth, the recent Supreme Court
decision legalizing any kind of corporate political contribution in any amount would
mean the pouring of money into the fascists' political coffers.  This is not direct
investment in productive resources, but the more money the fascists could receive in
foreign contributions (which could run into the billions) the less they would have to
spend from their own government sources on such matters as, say, domestic
repression. Of course, the private armies that could be used for such purposes are
already very much in existence.

Fifth, there would be a major decrease in government spending, with limits placed
on that by the needs and wants of their own "anti-government" supporters in
significant numbers -- older, white Americans dependent on Social Security and
Medicare.  Obvious candidates for major cutbacks or elimination would be: Medicaid,
private health insurance subsidies, and food stamps (all programs for the
"undeserving poor," donchaknow), mental health services, the VA health care
system, education (do-it-yourself), transportation (same), food, drug, and financial
regulation services, etc.  They would take a major look at cutting farm subsidies, but
since the food industry, to be freed of all government regulation, would likely be a
strong supporter of the fascist enterprise, farm subsidies would likely continue.

Finally (for this column, not for the overall discussion by any means) there would be
the role of China.  By far and away the US' biggest creditor, they could of course just
turn off the spigot until, let us say, there would be a return to Constitutional
democracy.  In my view, that's a pipe-dream.  First, the fascists would at some point
very likely threaten default, which they would sell to their constituents at home with a
race-based, "no more money for the s___t-eyes."  Second, facing that threat, the
Chinese would likely adopt a massive version of the "too big to fail" philosophy which
both parties used to bail out the banks in 2008-09.  And the fascists would be able to
continue the China-dependency, most likely at increased interest rates for decreased
amounts as China started to protect itself to some extent.

And so, friends, a future fascist US would most likely be able to arrange financing for
itself, at least for quite some time.  A major factor determining for how long they
would be able to keep it up would be their imperialist/foreign war policy which in turn
would determine the size of the military, both public and private, but let us leave that
one for another time.  The narrative here does give us Constitutionalists ("Connies"
for short) enough to worry about, don't you think?  Speaking especially as a specialist
in Preventive Medicine, it makes prevention of fascism here even more important
than it already is.  The first step, which certain major columnists like Christopher
Hedges and Frank Rich are beginning to take, is to talk about the prospect.

Steven Jonas, MD, MPH is a Professor of Preventive Medicine at Stony Brook
University (NY) and author/co-author/editor of 30 books. In addition to being a
columnist for BuzzFlash, Dr. Jonas is also Managing Editor and a Contributing Author
for TPJmagazine; a Featured Writer for Dandelion Salad; a Senior Columnist for The
Greanville POST; a Contributor to TheHarderStuff newsletter; a Contributor to The
Planetary Movement; and a Contributing Columnist for the Project for the Old
American Century, POAC.