Daily Reckoning compares World War I to our modern day economic war with China
This past weekend marked an important anniversary. On April
2nd, 1917, Thomas Woodrow Wilson stood before a joint
session of Congress. "We must put excited feeling away,"
said the president, and then launched into one of the
greatest mob-inciting harangues ever delivered. Wilson was urging Congress to declare war against Germany. The Huns, he said, were governed by a "selfish and autocratic power."
What they had done to justify trying to kill them was a
matter of great dispute. Robert "Fighting Bob" La Follette,
senator from Wisconsin, thought they hadn't done much of anything. They were accused of bayoneting babies and cutting off the arms of boys in Belgium. But when a group of American journalists went on a fact-finding mission to get to the truth of the matter, they could find no evidence
of it. Clarence Darrow, the lawyer who made a monkey out of
William Jennings Bryan in the Scopes Trial, said he would
offer a $1,000 reward to anyone who came forward whose arm
had been cut off by the Germans. A thousand dollars was a
lot of money back then... for this was when the Fed had
barely settled down to work... equal to about $20,000
today. Still, no one claimed the money.
The Germans had also sunk a few ships. But there was a war going on in Europe and Germany had tried to impose a blockade of English ports with the only weapon it had, submarines. You took a risk trying to sail into England, especially if your ship was carrying ammunition, and everyone knew it. The English were blockading German ports too. The difference was that the English had a bigger navy and were better at it. Try to run their blockade and you were almost certain to die; so few ships dared.
It was a long and complicated story. In retrospect, the
United States was better off minding its own business.
Robert La Follette knew it. He told anyone who would listen
that the struggle in Europe was best understood as a
political and commercial rivalry. The Germans were
challenging the English everywhere. The German economy was growing faster. While Britain seemed to be peaking out, the
Germans were building new factories and developing new
markets. In Africa, German colonialists were menacing
English territories; in Europe, German manufacturers were taking market share from their English competitors. On the high sees, the German navy was growing more competent. And so, the English and the Germans were having it out. Leave them to it, said "Fighting Bob."
But Woodrow Wilson had his own ideas. "Civilization itself"
seemed in the balance, he told the politicians. "We shall
fight for the things we have always carried in our hearts -
for democracy, for the right of those who submit to
authority to have a voice in their own governments, for the
rights and liberties of small nations, [he did not mention,
Mexico, Puerto Rico, and Nicaragua - countries to which he
had already sent troops to meddle in internal political issues], for a universal dominion of right by such a concert of free peoples as shall bring peace and safety to all nations and make the world itself at last free."
When he finished his speech, most of the yahoos rose to
their feet and cheered. Tears streamed down many jowly
faces. At last, the United States was going to war! Two
million people had already died in the war. For what
reason, no one quite knew. Wilson had to resort to bombast
and balderdash to try to explain it. But now the happy
moment had come. Now, Americans would get to die too. Hallelujah!
No one recalled the weekend's anniversary in the papers.
Too bad.
It makes us think of America's situation today. Are we not
in Britain's shoes? Are we not facing our own new rival - China?
Market cycles... and historical cycles... are like women
[and here, dear reader, you may want to write this down in order to quote us correctly]... they are all the same and yet completely different. When prices are high, we know they must get down - somehow, someway, some day. When a nation is riding high... it too must someday sit lower in the saddle. For all things age. All things change. All things go away, in the end. But how and when they get where
they are going is as varied, charming and mysterious as
every woman we have ever met.
Just something to think about, dear reader... . |
