Six Million Pigs

In September 1933, the Agriculture Adjustment Administration in an effort to raise the prices of commodities slaughtered six million young pigs. With unemployment hovering at 22.9%, the homeless numbers rising each day, in the middle of the Great Depression, Franklin Roosevelt's economic policy to drive up prices in order to help the farmer resulted in the slaughtering of six million pigs. Never mind that millions of Americans went to bed hungry each night, six million pigs were sacrificed to the economic experiment of FDR and his advisers. Not only did the poor and hungry not get to eat those pigs, but the policy had the desired effect and the price of pork soared until a single slice of bacon was prohibitively expensive.

FDR's policies were breathtakingly naive and their destructiveness, far reaching. The parallels to the policies being pursued by our current Administration are chilling though far less understandable. President Obama didn't inherit the disastrous economy FDR did, rather, he is hell-bent on creating one.

When FDR began manipulating the price of gold over breakfast in his White House bedroom in the fall of 1933, he had already vacillated so dramatically and capriciously on monetary policy, British and European financial and political leaders not to mention American businessmen were furious. His efforts failed to calm the markets instead, increased uncertainty. In the spring when he had ordered the Treasury to no longer honor its own gold clause in contracts (a political maneuver that effectively took the U.S. off the gold standard) there was no formal mechanism to set the price. FDR desired to do so and a willing Senate complied with an amendment providing the Executive with the power. Senator Elmer Thomas of Oklahoma cheered the inflationary redistribution of wealth from the creditors (wealthy) to the debtors (those without wealth) by saying: "No issue in 6,000 years save the World War begins to compare with the possibilities embraced in the power conferred" by that action (Shlaes 158).

Yet Roosevelt confided to one of his advisers that he didn't know what his own policies might be at any given time. He was on "an hourly basis and the situation changes almost momentarily" (162). As Shlaes summarizes Roosevelt's behavior, "...the president was also inconsistent because he saw no cost to being inconsistent" (162).

But Roosevelt's arbitrary gold pricing program did not have the desired result. In January of 1934, FDR submitted a bill to return to the gold standard. Almost a year was wasted on his great gold experiment while one in four Americans remained unemployed, millions lost their homes and Hitler strengthened his grip on Germany. The cost of inconsistency was great.

History will reveal the cost of Obama's inconsistency and destructive economic policies. Millions have been and will be hurt irreparably. All of us will bear the scars. The slaughter of six million pigs by FDR's Administration in the face of unprecedented unemployment and suffering during the Great Depression was unconscionable. One wonders what will tip the scales for Obama?

Will it be Mr. Obama's reckless disregard for national security demonstrated by his Administration's lawsuit against Arizona, unwillingness to protect our borders, proposal to try terrorists as common criminals in New York City, and efforts to close Guantanamo? Or will it be the profligate spending of Trillions of dollars placed on the backs of future generations? Will Health Care--not just the policy but the way it was achieved--be the final straw for historians? Or his ineffective and incompetent management of the Gulf Oil Spill? Relations with Israel? Inconsistent execution of the war in Afghanistan? Or will it simply be that while unemployment rose this president shamelessly and relentlessly worked only on lowering his golf handicap?

File this either under “What is past is prologue” or “Everything old is new again.”

This letter came to my attention many years after my grandfather went to his final reward. I am saddened that he never knew that some of us down-liners inherited his outrage gene. I am further saddened that he and I never had a chance to discuss these matters.

In the approximately once per generation economic excesses and insanity – almost always triggered by the existence of un-backed fiat paper “money” – a minority of citizens living through the madness grasp what’s going on. But only a small handful speak out about it.

I have been speaking out about it since my late friend Tupper Saussy introduced me to Roger Sherman.

I am proud that my grandfather was also one of those who spoke out.

Unfortunately, few have either the desire or capability to grasp the nexus of the problem let alone try to affect the necessary changes.

Yet we persist as the alternative is too grim to contemplate.

And if you don’t think YOU will not be impacted or – like Neal Boortz –think you can “outrun” what’s coming, that flapping sound you may hear are some very BIG buzzards coming home to roost — at YOUR house!

http://www.youtube.com/watch?v=lIo8FJJMps8

**************

Coshocton, Ohio
May 13, 1938

Mr. Uncle Sam
c/o Henry Morgenthau, Jr.
Washington, D.C.

My Dear Uncle:

I am in receipt of a letter dated May 5th, from Mr. Morgenthau, which letter he signed as your Secretary of the Treasury. According to the dictionary, a Treasury is, among other things, a place in which stores of wealth are deposited, and as there does not seem to be any wealth in your Treasury, it would seem that he should have signed the letter as your Treasurer of the Deficit, as, according to the dictionary, a Treasurer is, among other things, an officer who receives the public money and disperses it and, as he has dispersed a great deal more money than he has received, he is in charge of a Deficit, instead of being in charge of the Treasury.

In his letter, he attempts to persuade me that I should lend you some money by buying Savings Bonds and he states that more than 1,260,000 people own more than $1,600,000,000 maturity value of these bonds, in addition to which, I understand that you owe about $36,000,000,000 on various other kinds of bonds and notes, and that you have a contingent liability of additional billions. In his letter, he states that the savings bonds mature in ten years from the date of issue, and that they may be redeemed for a stated amount at any time after sixty days from the date of issue. This all sounds very impressive, but when these bonds mature, or in case an effort is made to have them redeemed previous to maturity, I am wondering what you will exchange for them. Will it be food, clothing and housing, or will it be 59 cent dollars of some other much greater reduced value, which dollars, as was the case with the German Mark, under similar conditions, may be of value mainly as waste paper?

When considering an application for a loan, the reputation of the prospective borrower is generally considered to be of first importance, and to be real frank about it, your actions during the past five years have not been such as to inspire confidence in you, as in addition to spending in countless foolish ways, a great deal more than your income, you have not been absolutely honorable, truthful and reliable. After borrowing large sums of money upon the promise to repay it in gold, you decided not to do so. In addition, you took from your nieces and nephews all of the gold which we had and buried it in the hills of Kentucky. I am wondering if you think that by planting it, you can cause it to grow in value, or if, like whiskey, you think the quality of it will improve with age. You are also forcing your nieces and nephews to turn over to you large sums of money, which you have promised to save for us and to return to us when old age overtakes us. Instead of saving this money for us as promised, however, you have been spending it as fast as it is received, in what appears to be nothing more or less than a drunken joy-ride.

Even though one of your age and experience should realize that it does no good to prime a broken pump, especially after having tried it for several years without success, you continue to prime the business pump, and to kick and cuss it and work on it with a sledgehammer.

I addition to other things, the frequent use of a hypodermic has done you no good, and probably explains why you penalize and abuse your nieces and nephews who are thrifty and industrious, and reward those who are incompetent and lazy; why you killed five or six million little pigs, even though our political friends are always hungry for pork; and why you destroyed crops of cotton, wheat, corn, etc. to the advantage of producers in other nations.

Like any incompetent spendthrift who violates all the tried and tested laws of economics, there must be a day of reckoning for you at some time in the future, at which time you will find it impossible to pay your debts, or else you will be obliged to pay them in depreciated currency. In either event, it does not appear to be safe or wise to lend you any more money to be used by you in making whoopee and playing Santa Claus. In order to save you from yourself and to prevent the dissipation of what few assets you may have left, a guardian should be appointed for you but this will take time and probably cannot be accomplished previous to 1940.

Your distressed nephew,

Karl W. Bachert

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