“The approach of a great storm was sensed everywhere. All classes were in a state of ferment and preparation. Abroad, the press of the political exiles discussed the theoretical aspects of all the fundamental problems of the revolution. Representatives of the three main classes, of the three principal political trends -- the liberal-bourgeois, the petty-bourgeois-democratic (concealed behind "social-democratic" and "social-revolutionary" labels), and the proletarian-revolutionary -- anticipated and prepared the impending open class struggle by waging a most bitter struggle on issues of programme and tactics. All the issues on which the masses waged an armed struggle in 1905-07 and 1917-20 can (and should) be studied, in their embryonic form, in the press of the period. Among these three main trends there were, of course, a host of intermediate, transitional or half-hearted forms. It would be more correct to say that those political and ideological trends which were genuinely of a class nature crystallised in the struggle of press organs, parties, factions and groups; the classes were forging the requisite political and ideological weapons for the impending battles.”
The years of preparation for revolution (1903-05)
Left-Wing Communism: an Infantile
Grand Lake Stream, ME: Had good fishing yesterday even as temperatures rose steadily as the group converged on Leens Lodge for evening activities. Dinner last night featured a brief presentation by ME Governor Paul LePage and also a discussion of Weimar Germany by Madeline Schnapp of Trim Tabs. The two discussions were good complements for the larger evening discussion. But sad to say for Persian Economists, there were no Power Point presentations.
Governor LePage started his discussion with a very frank appraisal of the state’s fiscal situation, namely that the Democrats spent and stole the state broke. Voters in ME recently gave control over the governor’s office and both houses of the state legislature to the Republican Party. Suffice to say that the main theme of Governor LePage’s comments to the audience at Leens Lodge, which included a number of advisers who own the state’s debt, is that the State of Maine is going to pay its bills and keep its promises.
One interesting part of the Governor’s remarks involved how ME is clearing up the many years of arrears of Medicare payments to hospitals around the state. He noted thatthe Democrats in the legislature wanted to “negotiate” a settlement for the arrears of 50 cents on the dollar with the state’s hospitals, which would doom many of them to failure. The consistent objective of American liberals is to destroy the free enterprise system and make the US a monolithic socialist state a la France. That battle is underway in ME right now.
Contrary to the Fabian scenario, Governor LePage has insisted on paying the hospitals in full. “Then we can spend money on other things,” he told the audience. But more to the point, LePage’s promise to pay the hospitals will thwart Democratic designs to decimate private health care institutions and drive more and more Mainiacs into the arms of the state. But don’t look for Governor Le Page or anyone in the northern part of ME to go along quietly.
The evening discussion was set up by Madeline Schnapp, who provided a brief but entirely chilling review of the financial stairway to hell of hyper-inflation in Weimar Germany. In an extraordinary and succinct discussion, Madeline talked about the timing and duration of the appearance of different denominations of paper money used in the Weimar period. Suffice to say that as the paper lost value, the printing became less and less attractive.
From the start of WWI in 1914 through until 1923, the cost of a loaf of bread went from 0.10 Deutsche marks to 1 trillion marks in December 1923. The hyperinflation in Weimar Germany, Schnapp noted, wiped out all of the accumulated wealth and savings of the German middle class and left most of the population in poverty. Attendees at the dinner received examples of Weimar money and a brief presentation showing the rate of inflation during the Weimar inflation.
The juxtaposition of Paul LePage and his battle against the downstate, apartment dwelling socialists over spending and debt, and then Schnapp’s reminder about the death of money in Weimar Germany is a powerful pairing. At the start of 1924, let us recall, Germany wiped out all existing financial assets and introduced a new currency back with real estate and other tangible assets. When Paul Krugman and his ilk talk about the need for more deficit spending, more fiscal stimuli, they are taking you down the road to Weimar America. There is nothing at the end of Paul Krugman’s road to borrow and spend save national destruction and personal disaster.
On Monday this scribe will be taking the Bat mobile to Chautauqua, NY, to give a talk on Tuesday evening regarding the morality of regulation in America -- or perhaps the lack thereof. In an age when the entire framework of left wing liberalism, “the infantile disorder” to paraphrase V.I. Lenin, lies in tatters, maybe it is time to ask why we all don’t do the right thing. Or if the future of economics is merely a free-for-all for an existing pie of resources, perhaps we should just dispense with the civilities?
Whether you are a Krugmanite progressive-socialist or a classical liberal lost in the 21st Century, in both cases we rely upon a consensus called the rule of law. But is that assumption still valid? Many conservatives believe that the left has lost its collective mind and embraced hyperinflation a la Weimar Germany, not to help people in any meaningful way but to simply preserve Democratic political power.
If the political tsunami underway in Maine is any indicator, the November 2012 election will be fascinating and unpredictable. But while there may be conservative uprisings at the local level, in Washington at the Fed a decidedly orthodox form of state socialism continues to reign supreme.
“If you consider that John Law’s main intellectual error was thinking that shares of stock were just as good as money,” AIER scholar Walker Todd noted recently. “Ben Bernanke’s error is thinking that derivatives and math models are as good as a scarce commodity in restraining the quantity and promoting the value of money.”
But the beliefs of mere Fed economists are a sublime concern compared to the naked inflationism of Paul Krugman and his fellow travelers in American liberalism. The battle now is between people like ME Governor Le Page, who want to restore fiscal sanity to American life, and those who merely wish to destroy the private economy and monetary system. By ensuring that as many people as possible are dependent upon government for their livelihoods, liberals in states like ME are treading the path blazed a century ago. by V.I. Lenin. What a shame most of them do not appreciate this irony of repeating the same mistakes over and over again.