Saturday, March 28, 2009

Lessons on the Rise of Totalitarianism

Ambrose Evans-Pritchard is a bit confused on the economic goings on during the Hoover Administration, as evidenced by a recent column. Evans-Pritchard advances the incorrect line that Hoover was a laissez faire do nothing president. It was quite the opposite. (Bob Murphy's upcoming book, The Politically Incorrect Guide to the Great Depression and the New Deal, discusses the topic in detail.)

Evans-Pritchard is much better on his European history and reminds us that:
It was the deflation of 1930-1932 – not the hyperinflation of 1923 – that killed Weimar democracy. (Communists and Nazis won half the Reichstag seats in July 1932).

However, by pointing this out, it appears that Evans-Pritchard is attempting to argue that deflation and recession are more of a danger than hyperinflation in forcing a country towards totalitarianism. Which is preposterous. While deflation and recession are no picnic and may cause the masses to move towards Daddy government, there is nothing, zero, that is more beneficial in terms of political trends or economic consequences about hyperinflation. I'll take deflation any day.

That said, the masses are very susceptible to dictatorial change even during recession. Evans-Pritchards, for example, reports in his column on the scary development that in the east German state of Thuringia, "The neo-Marxist Linke Party is already angling for 30 per cent in June's Thuringia poll."

Thuringia isn't Baden-W├╝rttemberg or Berlin, but, if say, Rhode Island suddenly went neo-Marxist here in the states, I think we would all take notice.

And, of course, this says nothing about the sneaky totalitarian type legislation that is snuck in by governments around the world during crisis periods-sneaky legislation that the Obama Administration may be at the forefront of attempting to get on the books.

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