PEARL HARBOR originally aired on December 7, 2001.
by Bill Bonner
"We play with fire. We play with war. And then, fire and
war blow up on us. America, until now, enjoyed the luxury
of watching things from a distance. It offered its advice,
lavishly...its homilies...its encouragement to the 'little
people' of the world. Now, America is 'in the bath' along
with the rest of the world. Now we will see. We will see if
America is really the military, industrial, and social
power that it claims to be. We're going to see if 'America'
really exists. Because it is no longer a matter of
preaching, while taking orders and grabbing market share.
It's no longer a matter of exhorting others to acts of
heroism. Now, America must fight. And send Americans to
risk their skins. Things have changed. We're going to
see..."
- Marcel Deat, writing in the collaborationist French
newspaper "L'Oeuvre", 9 December 1941
Mr. Deat sounded skeptical.
My father wondered, too. The morning of December 7th, 60
years ago today, was a rude awakening for him. After a late
Saturday night on the town...his head must have throbbed
early Sunday morning. It was as if there were bombs going
off, he must have thought...then, his eyes must have opened
with a start; bombs really were exploding!
"All I remember is confusion," he once told me. "We didn't
know what was going on. All I knew we knew was that we were
under attack. We thought the Japs were going to land
troops, so we got our rifles and got ready to fight back.
Thank God, they didn't try to take Pearl Harbor. We were so
disorganized, it was pathetic."
Disorganized, unprepared...America put aside its confusion
and was soon fighting back. By dumb luck, perhaps, none of
America's 3 Pearl-based aircraft carriers were in the
harbor that morning. The Japanese hoped to put the U.S.
Pacific fleet out of service for 18 months. But within just
60 days, U.S. forces were back in action. My father and
thousands of other Americans had the pleasure of an
extended tour of the South Pacific, courtesy of the U.S.
Army. Maybe they were not the battle-hardened fighters of
the Third Reich - with strong military traditions, iron
discipline, and years of painful experience. But when the
chips were down in 1941, they did their duty...sometimes
well, sometimes not-so-well...
When Pearl Harbor was bombed, Americans knew the "luxury of
watching things from a distance" would no longer be
possible. Unlike the patriots of 2001, they prepared for
sacrifice, not self-indulgence. They braced themselves for
hardships and losses. Rather than buy a new Packard, they
were likely to put the old one in the garage and walk to
work. Gasoline was rationed. So was almost everything else.
Stocks fell to a level never seen before - and changed
hands for just 6 times earnings. Things had changed;
America was "in the bath" with everyone else.
Men do stupid things regularly and mad things occasionally.
And sometimes, the impulse to self-destruction is so
overwhelming it overtakes an entire nation.
It is almost always madness to buy stocks at the peak of a
bull market...or to buy a stock at 50 times earnings.
(Note: currently, [in December 2001] , tech stocks in the
U.S. are selling at an average P/E of 50 based on next
year's earnings!) Ruin may not come quickly - as stocks may
rise further. But it comes eventually.
The best a person can hope for when he goes mad is that he
runs into a brick wall quickly...before he has a chance to
build up speed. That is why success, in war and investing,
is often a greater menace than failure.
My father did not realize it at the time, but he was
witness to one of the stupidest, maddest acts in all of
history. The Japanese had embarked on a campaign of
conquest. Rampaging through China and Indochina, they found
success easy. Encouraged, they sought to extend Japanese
hegemony, by force of arms, throughout Southeast Asia.
"What was the point of the military expansion?," you may
ask.
"To secure vital resources - oil, rubber, metals," comes
the answer.
"Why did Japan need so many raw materials?"
"To supply its military expansion!"
The Japanese have little in the way of raw materials. They
could buy them on the open market. But in the politicized
world of the 20th century, markets seemed unreliable. What
if producers decided not to sell?
The idea was absurd. Why would producers not sell, when it
was in their interest to do so? In fact, the only reason
they did not sell was to try to cripple Japanese military
expansion! Thus did the Roosevelt Administration, in early
1941, cut off vital supplies - especially oil - to the
Japanese war machine.
What were the Japanese to do? For nearly 10 years, they had
been "on a roll" of military success. Were they not
entitled to believe that their stock would always rise?
"The grandiose mood of the fascist powers in which no
conquest seemed impossible, must be taken into account,"
writes Barbara Tuchman in her "March of Folly." "Japan had
mobilized a military will of terrible force, which was in
fact to accomplish extraordinary triumphs..."
But attacking Pearl Harbor was a big risk. The Japanese
knew what they were up against - a country far larger and
with far more resources than their own. Admiral Yamamoto
had attended Harvard and spent years in Washington as a
naval attaché. Even so, he was no fool...he knew that Japan
could not endure a long contest with the U.S. "I have
utterly no confidence for the second or the year," he told
Premier Konoye.
Why did they do it? Why did they take "a gamble that, in
the long run...," Tuchman asks, "was almost sure to be
lost?"
"Fundamentally, the reason Japan took the risk," Tuchman
answers her own question, "was that she had either to go
forward or content herself with the status quo, which no
one was willing or could politically afford to suggest.
Over a generation, pressure from the aggressive army in
China and from its partisans at home had fused Japan to the
goal of an impossible empire from which she could not now
retreat. She had become a prisoner of her oversize
ambitions."
How much better off the Japanese would have been if they
had been beaten in China! They could have gone back to
their island, renounced the Tripartite Treaty with Germany
and Italy...and they could have "taken the orders and
grabbed market share" - selling tanks, planes and ships to
other combatants. Instead, a long string of battlefield
successes led to one of the biggest strategic blunders of
all time...and ultimately to complete ruin for Japan and
her economy.
Before the attack on Pearl Harbor, Americans were deeply
divided on the war. Most wanted nothing to do with it.
Congress passed a one-year draft law by a single vote just
months before the attack. Japan could have conquered any
Dutch, British or French colonial territory in the Far
East...without risking war with America. Of all the things
Japan might have done, it chose the worst possible course
of action. It did the one thing - and probably the only
thing - that would bring America into the war as an active,
determined combatant.
Admiral Yamamoto recognized his error almost immediately.
"I feel that we have awakened a sleeping giant and
instilled in him a terrible resolve," he said. Churchill
was ecstatic: "To have the United States at our side was to
me the greatest joy. Now at this very moment I knew the
United States was in the war, up to the neck and in to the
death. So we had won after all! Hitler's fate was sealed.
Mussolini's fate was sealed. As for the Japanese, they
would be ground to powder."
Twelve days later - on December 17th - Germans proved that
they were at least as mad as the Japanese: Hitler declared
war on America. He could have left the Japanese to their
folly. Instead, in less than two weeks, the Tripartite
Powers had managed to turn the war against themselves, by
provoking the wrath of the world's largest economy.
America, protected by two oceans, could turn out jeeps,
tanks, planes and c-rations faster than anyone. It could
put millions of troops in the field, fully equipped, and
bring to bear more bombs against a target than any nation
ever.
But in 1941, Axis military power had been in a bull market
for nearly a decade. People don't think clearly in a bull
market. And their imaginations are dull. They can only see
ahead of them what they've just experienced. It wasn't
until the battles of Midway and Stalingrad, both in 1942,
that Axis power peaked out. Then, the thinking began and
imaginations began to work again. But by then, it was too
late.
"When we realized what had happened," said my father many
years after the fact, "all I remember thinking was that it
would be a long time before I got home...if I got home at
all."
He did get home, of course, three years later...
Your correspondent,
Bill Bonner |
