When Franklin Roosevelt put such a scheme into effect throughout American industry in the National Industrial Recovery Act of 1933, the Supreme Court, in an unanimous opinion, denounced it, saying: “Such a delegation of legislative power is unknown to our law and is utterly inconsistent with the constitutional prerogatives and duties of Congress.” In the face of this decision, the only reasons the Federal Reserve System still exists are that: (i) it was not subsumed in the National Industrial Recovery Act in 1933, but was the product of a different statute enacted in 1913; and (ii) the Supreme Court has never heard a case challenging the System on those grounds (and probably never will).
That the Federal Reserve System has usurped a set of powers “unknown to our law and * * * utterly inconsistent with the constitutional prerogatives and duties of Congress” must have the most seriously deleterious consequences.
In general, through corporativism special-interest groups employ their political influence in order to obtain economic control over some segment of the economy. That economic control increases the power of those groups, enabling them to garner even more political influence.
In the area of money banking, in particular, corporativism leads inevitably to all-around fascism. This is because banking organized on corporative-state lines is inherently unstable, for at least three reasons:
First, fractional-reserve banking amounts to a Ponzi scheme. The banks promise to pay their depositors on demand money they do not keep in reserve. Therefore, if withdrawals exceed reserves, they must pay earlier depositors with later depositors’ money, or with proceeds from outstanding loans which themselves may or may not be fully paid.
Second, a government’s reliance on a central bank to monetize public debt will amount to a Ponzi scheme, too, at the point where new debt must be incurred simply to service old debt. Third, a currency unit based upon debt will tend seriously to depreciate in value over time, even when it starts out redeemable in gold or silver.
Faced with these problems, to keep its head above water the Federal Reserve System has been compelled constantly to expand the set of those individuals and institutions who or which use, or are forced to use, its currency and to incur debt. Having established its currency as national “legal tender” in 1933, having removed the restraints of required redemption in gold in 1933 (domestically) and 1971 (internationally), having tied the Treasury of the United States to a policy of endless monetization of public debt, having obtained the ability to manipulate and loot domestic markets in the guise of making what is euphemistically called “monetary policy”, and even having assumed the imperialistic rôle of a “world central bank” emitting a “world reserve currency” which has enabled it and its clients to loot markets across the globe—having done all this, nevertheless the Federal Reserve System now finds itself confronted with serial crises, for which only one solution appears workable: an even greater expansion of fiat currency, bank credit, and United States Treasury debt, to be dumped on a world increasingly less willing to accept it, in exchange for valuable natural resources and cheap human labor.
Such hyperbolic economic imperialism will fail, however, unless it is coupled with political imperialism. And political imperialism in service of what used to be denounced as “the Money Power” will not succeed unless it is backed up by outright military imperialism, “the iron fist in an iron glove”—because foreign nations will not sit still for long while their economies are manipulated from London, New York City, and the District of Columbia; while their natural resources are extracted at bargain-basement prices; and while their populations are hired at coolie wage-rates and then paid in ever-depreciating Federal Reserve paper currency, bank credits, and United States Treasury debt. Which resistance, far more plausibly than the so-called “war on terrorism”, explains the metastasis of American military bases throughout the world over the last several decades, and especially the doctrine of “preëmptive war”—that is, naked aggression—enunciated by the George W. Bush régime and continued by the Obama régime.
Domestically, too, the Federal Reserve System finds itself increasingly on the defensive. The Federal Reserve’s currency—both paper and electronic—is based entirely upon debt. As the level of both public and private debt becomes unsustainable, the longevity of that currency becomes problematical. Hyperinflation seems a not unlikely cause of death. So crises in banking and in public finance are proliferating at all levels of America’s federal system—setting the stage for an economic catastrophe, because apparently too many Americans who could influence events in a positive direction are too stubborn to admit that, when an unsound currency stands on the brink of self-destruction, a sound alternative currency should be introduced into the economy as soon as possible.
Average Americans, of course, may not understand why all this is happening—but they do realize that it is happening, and that their own livelihoods, standards of living, and hopes for a decent education, long-term employment, and a comfortable retirement are in jeopardy. The 99% are not blind to which the 1% are doing. They observe the big bankers and their cronies being bailed out financially, immunized from prosecution politically, and infused statutorily with even more abusive powers “unknown to our law and * * * utterly inconsistent with the constitutional prerogatives and duties of Congress”—while the common man receives nothing in the near term and in the long term will be forced pay for all the bail outs, quantitative easings, and other financial chicanery through increased taxation, inflation, and austerity.
If not stopped and punished, this naked looting of the economy and massive redistribution of wealth from the middle class to le gratin financier can only inflame the populace, leading first to social unrest, then to civil disobedience, and finally to violent resistence. But the banking cartel and its allies have no intention of attenuating their avarice. So, domestically, a nationwide para-military police-state apparatus must be—and even as I speak is being—put into place at breakneck speed, in order to clamp down on dissenters and compel the common man to accept whatever economic stringencies are necessary to save the banking system.
In the final analysis, all of this—imperialism abroad, repression at home—arises, and had to arise, out of the corporative-state nature of America’s central banking system. More than that, imperialism in search of what could be called economic Lebensraum, coupled with the imposition of a domestic police state, is the essence of full-blown fascism. So, finally, the fruit of monetary and banking corporativism, in all its bitterness, falls from the tree:
The big banks, financial houses, and dens of speculators which Americans are told are “too big to fail” have failed and will continue to fail. But the politicians will relieve them of the weight of their failures by shifting that load of moan onto the backs of ordinary citizens. That is, in the fascist lexicon, “too big to fail” really means “to big to pay”. “Too big to fail” means that someone else will be compelled to pay the price through taxes, through inflation, and through enforced austerity in living standards—someone else who cannot afford to pay, and is neither legally nor morally obligated to pay. The government can fail—as it has failed by becoming the mere puppet of the big banks, financiers, and speculators. The economy can fail—as it has failed with the Great Depression of the 1930s, with alternating recessions and “bubbles” thereafter, and now with the looming specter of depression, hyperinflation, or hyperinflation followed by depression. Even the people can fail— with untold economic suffering, political instability, and social dislocations, rather than peace and prosperity, their lot. But the big banks, financial houses, and their favored clients and political whores cannot be suffered to fail, or even allowed to suffer.
Thus America has arrived at the point of superordination of bank to state, and subordination of society to bank and state, the point at which the complex of bankers, financial speculators, and crony politicians has become so entrenched, and so puissant both economically and politically, that it can openly operate according to the principle: “It is not the State which gives orders to us, it is we who give orders to the State!” This noxious principle cannot be overemphasized, because perhaps its most famous exponent was no less than Adolf Hitler, who made precisely that statement, at the 1934 Nazi Reichsparteitag. Pay attention to that, because the ultimate significance of this parallel will be explained anon.
It is amazing, nonetheless, how the free market has managed to cope with these problems until now. Yet, for all that, the free market is not omnipotent. So heavy a burden, so great a strain have been put on it, that it is breaking down. And it must collapse entirely if the unit of currency is destroyed, because then the entire structure of prices and the possibility of rational economic calculation will go, too.
Worse yet, as a consequence of political and economic failures at the highest levels, America’s ship of state is about to embark upon the historically uncharted waters of social failure. As the political system proves impotent to cage the gigantic financial predators, but instead sets them loose to feed upon the people as upon so many tethered sheep, and aids and abets them in doing so—as the economic system melts down—as middle-class standards of living give way to ever-deepening austerity—massive civil unrest and disobedience will ensue. Some people bereft of economic hope may simply shoot themselves in despair, as that poor Greek pensioner did not so long ago. But others may descend to such a depth of hatred and a desire to take vengeance on their oppressors that they will decide to shoot someone else instead. Heaven forefend that such events might occur! Yet the prudent man must take into account the possibility that God may finally have washed His hands of this whole sordid matter, and left it to mere mortals to sort out as best they can.
The Money Power is well aware of these dire possibilities. Through its own incompetence, hubris, and greed it has rashly torn open Pandora’s Box, and released a panoply of evils, for which it knows but one remedy: in the true spirit and practice of fascism, to unleash police-state oppression aimed at every American who steps out of line. After all, protecting the perpetrators of financial fraud by repressing their victims is nothing new. In the 1930s, as a consequence of the collapse of the Federal Reserve System, Americans were forced to accept irredeemable Federal Reserve Notes as “legal tender”, were prohibited from enforcing contracts payable in gold, and were dispossessed of their gold, all for the benefits of the banks “too big to fail”.
But the likely extent and duration of the coming catastrophe is so great that mere monetary and banking repression will not suffice. This is the real, if recondite reason for the Department of Homeland Security—not to combat Muslim fanatics, hiding in squalid caves and huts in Obscuristan, who “hate our freedoms”; but instead to suppress average Americans who have had enough of a domestic political and economic system that is purposefully destroying their freedoms.
Be clear about this: America’s Reichssicherheitshauptamt is not preparing for the hard times ahead by stockpiling gold, but by stockpiling lead. From 2009 through early 2012 the Department of Homeland Security and the Federal Bureau of Investigation contracted for the delivery of some 750 million rounds of .40 Smith & Wesson caliber hollow-point ammunition.
Why do these armed agencies of the General Government expect to need to have 750 million rounds of such ammunition on hand during the next few years? As everyone the least familiar with firearms knows, .40 S&W hollow-point ammunition is not simply an anti-personnel round, but is specifically an anti-civilian round, because under the Hague Convention, and the Rome Statute of the International Criminal Court, it cannot be used in international warfare. So this ammunition can be expected to be employed only in “the homeland” and only on civilian residents of “the homeland”. Therefore, the Department of Homeland Security anticipates that a situation is likely to arise in the near future in which armed agents of the General Government will have to kill or maim Americans on a very large scale. (And this is only one major agency, stockpiling one type of cartridge, for one type of firearm.)
Worse yet, speaking at the Northwestern University School of Law on 5 March 2012, the Attorney General of the United States attempted to defend the Obama régime’s policy of “official assassinations”. In this, he was unsuccessful, from the point of view of a constitutional justification. But fascists do not worry about constitutional justifications. The point of the exercise was not to assuage Americans’ concerns (if any they have) about killing a few rogue Americans, let alone foreigners, who engage in acts of supposed “terrorism” against the United States. It was to announce that any American whom the Executive Branch, through some secret procedure, labels an “enemy combatant” or “terrorist” can simply be killed, entirely outside of and without recourse to judicial process—with no formal charges, no indictment, no trial, no conviction, no sentence, and of course no possible appeal from the far side of the River Styx. It is hard not to conclude that this provides the final proof of the the complete political and moral bankruptcy of this country’s ruling class. Because, once again, the applicable parallel runs to none other than Adolf Hitler and his address to the German Reichstag on 13 July 1934, in which he declared that, in his self-appointed capacity as “supreme judge of the German People” (“das deutschen Volkes oberster Gerichtsherr”) he could order the assassination of anyone whom he considered a threat to the state. And everyone even minimally conversant with history knows where that episode led.
So, recall Roosevelt’s State of the Union Address in 1944, and ask, “Who really won World War II?” Why,
• Benito Mussolini, economically—because America now has a fully functioning fascist economy, centered around the Federal Reserve System;
• Adolf Hitler, politically—because America now has a régime based upon das Führerprinzip which claims the power to murder anyone it chooses, at home or abroad; even
• Hideki Tojo, internationally—because the Greater East Asia Co-Prosperity Sphere is now being carved out, not by Japan, but by China, and with the assistance of turncoat American globalist corporations; and ultimately, perhaps even
• Otto von Bismarck—because the world is likely to witness the establishment of a new Dreikaiserbund, not among Imperial Germany, Russia, and Austria (as Bismarck recommended), but among Germany, Russia, and China.
And the root cause of these defeats for America? The control the big banks, financial houses, and speculators exercise over the General Government: that is, the integration of bank and state.
1. To be sure, these were not Roosevelt’s own, original ideas, but instead derived from his formative experiences in the Woodrow Wilson Administration. See Thomas Fleming, The New Dealer’s War: F.D.R. and the War within World War II (New York, New York: Basic Books, 2001), at 326 & note 39.2. The Federalist No. 10.3. U.S. Const. preamble.4. Act of 16 June 1933, ch. 90, 48 Stat. 195.5. A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 537 (1935).6. Actually, this “Bush Doctrine” is nothing new. It is merely the logical expansion of old “Brezhnev Doctrine” now embossed with the Stars and Stripes rather than the Hammer and Sickle. Under “the Brezhnev Doctrine”, the Soviet Union claimed the right to invade any country among its satellites that deviated too far from the Communist Party line as enunciated in Moscow. Under “the Bush Doctrine”, the United States claims the right to impose crippling economic sanctions upon, to ring with military bases, and if those tactics do not work then to launch ersatz “wars of national liberation”, to bomb, and even to invade, any country, without distinction, that refuses to subordinate its economy to the dictates of the Financial Axis that runs from London, through New York City, to the District of Columbia.7. Recorded on film by Leni Riefenstahl in “Triumph des Willens”.8. 2009—DHS-ICE entered into a contract for 200,000,000 rounds of .40 S&W ammunition over the ensuing five years. 2011—FBI awarded a contract for up to 100,000,000 rounds of .40 S&W ammunition over the ensuing five years. 2012—DHS awarded a contract for 450,000,000 rounds of .40 S&W ammunition over the ensuing five years.9. Declaration III (1899).10. Part 2, Article 8, § 2(b)(xix).11. This prohibition stems from the Declaration of St. Petersburg (1868).12. See my demolition of Holder’s contentions in “Where is the Outrage?”13. Quotations From Chairman Mao Tse-tung (Peking, China: Foreign Languages Press, 1966), at 72.14. Observations on the Act of Parliament, commonly called the Boston Port-Bill; with Thoughts on Civil Society and Standing Armies (London, England: Edward and Charles Dilly, 1774), at 50.
Dr. Edwin Vieira is IAI's Distinguished Senior Fellow in Jurisprudence and Constitutional and Monetary Law
Originally published on July 2, 2012, on NewsWithViews.
The opinions published here are those of the writer and are not necessarily endorsed by the Institute.