War Racket

“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.” Ernest Hemingway

Hemingway got this exactly right, inflation and war are twin evils that need each other in order to endure, and there are enough statists around to see to that. The fact is that statism needs war, and to guarantee it the state needs money. The first step to assure adequate funding for war is to introduce central banking. Without the monetary manipulations of a central bank, the state would have to rely on taxation, which would expose politicians to the wrath of the electorate. The Federal Reserve was not the first attempt of the US government to create a central bank, but the third; the charters of the two prior attempts were cancelled or allowed to expire due to mismanagement and corruption. There is also the inconvenient fact that creating a central bank is not among the enumerated and expressed powers of the federal government in the US Constitution .  

The creation of the Federal Reserve is cloaked in secretive meetings of powerful bankers and corrupt government officials (see the blog post “Remember Hyde” 09/25/20). Mayer Rothschild, perhaps the most notorious member of the 20C banking cartel, knew all too well the power that comes from controlling a nation’s currency, once said “Give me control over a nation’s currency, and I care not who makes its laws.” That was quite apparent with the Federal Reserve Act of 1913; the Fed facilitated America’s participation in the “Great War” by issuing war bonds and providing banks low-rate loans to purchase Treasury certificates, just as monarchs of the past debased currencies to finance their wars. The debt and inflation that resulted was among the reasons the Great War was extremely unpopular with Americans and gave rise to the “Isolationism” that followed.

The statists took note of the disdain that Americans had for the US involvement in the Great War; this was a major obstacle for FDR in his fervor to repeat that tragic mistake in entering what became known as WWII. Apparently, we needed a numbering system to keep track of such foolish behavior, so the “Great War’ was renamed WWI; who needed to call a war “Great” anyway. Something had to be done to finance both FDR’s “New Deal” (actually not so new as Lenin, Mussolini, Franco and Hitler, were way ahead of him) and his war aspirations as the Fed was still somewhat limited by the gold standard. Never underestimate the evil creativity of a statist as FDR fixed that problem by outlawing gold ownership; while that was unconstitutional, he got away with it.

While the Japanese attack on Pearl Harbor was the immediate cause for the US entry into WWII, the underlying causes for the war were the Versailles Treaty that ended WWI, and the growth of central banking that created the Great Depression, which in turn spawned the many trade wars that resulted. It is an economic reality that free trade benefits all nations with prosperity, and therefore a strong mutual incentive to avoid war. However, as socialism is an essential element of statism, free trade is not acceptable; as George Orwell noted, “The object of waging a war is always to be in a better position in which to wage another war.”

The “Cold War” was the inevitable aftermath of WWII, nearly resulting in a nuclear confrontation between the US and the USSR, the two principal antagonists; the former seeking to export democracy as if it were a brand name product like Coca Cola, the latter to grow exponentially the land and people for its own brand of socialism. The two did so through proxy wars and interventionist machinations for regime change. The costs to both nations were astronomical, resulting in economic chaos that nearly bankrupted the US, and eventually doing so to Russia, collapsing the USSR.

The statist idea that the US has a moral duty to police the world is pure war hawk propaganda, which not only accelerated the growth of the federal government, but increases the risk for even more wars, as does foreign aid that subsidizes a another nations military; doing so causes the US to become the enemy of that nation’s adversary and at great costs to its own people. US interests should be defined as what benefits the American people with peace and prosperity, not what benefits the state and the military-industrial complex; foreign conflicts don’t require the US to choose sides for more forever wars.

Sanctions and tariffs are acts of aggression perpetrated by those looking for a fight, and not the behavior of a free country that professes free markets. Statists need wars to survive and to get them they loot their own citizens through central bank manipulations; a free nation survives through production, creating peace and prosperity, which are the best reasons to end the Fed.

“It is no coincidence that the century of total war coincided with the century of central banking.” Ron Paul