69 Years ago on this date, Germany surrendered to the Allied Powers. Textbooks tell us that peace broke out all over Europe. The peaceful and wealthy continent we see today did not happen overnight. Fighting of all types persisted. From the English Channel to the Ural Mountains displaced and dispossessed people roamed the continent.
Such was the direct evil of the Nazi and Soviet experiments.
To our own peril we sugarcoat the aftermath of the war. Because it is simpler to say ‘the war ended and peace began’ unhinges us from the long and desperate recoveries of the late 1940s throughout the mid 1960’s. Economic collapse funded the fuel of the Nazi resurgence. a Nazi resurgence that never had more that 31% of the seats in the Weimar Parliament. Examining Hitler’s campaign speeches, he sounds more like a modern politician than a madman bent on worldwide conflagration.
Promises of free health care, lower taxes, government ‘investment in infrastructure’ and centralization of education and industrial planning were the main themes of his stump speeches. While blistering Industrialists and Bankers, he secretly courted them and promised sweet deal contracts if he were elected.
Hitler also talked about cutting government spending, and eliminating waste and duplicate departments.
VE-DAY did not end the economic fundamentals of the economic promises. As the Europe began to rise from the ashes of the war, they constructed a series of social democracies that developed into more socialist democracies; enshrining in economic action the very social safety structure promised by Hitler.
The reason I write this in an economic blog is because there are profound similarities tin our current economic environment to those underpinning the German transition from the prosperity of the late 1920’s to the re-introduction of the waste, poverty and despair of the early 1930’s.
I’m not comparing the US to 1929 Germany. I am simply saying that there are storm clouds on the horizon. Consider this; we have an expanding welfare state, a new intrusive and expensive health care entitlement, an underemployed younger generation, and demographics that add 10,000 people a day to the government retirement system for income and subsidized health care.
Our operating debt is equal to the national GDP.
The last time that happened was 1929. The markers are there. That’s why I encourage people I meet with to secure their retirement funds from catastrophic loss.
Let’s avoid our own catastrophe. Secure what we can’t afford to lose, and let History be our guide.