Letters to the Editor
Internationalism’s Past and Lack of Foresight
Your story “The Treaty of Versailles and the Rise of Nazism” (November 5 issue) describes one of the disasters of America’s entry into World War I, but U.S. involvement created a host of other problems. The war devastated European agriculture and manufacturing, triggering a temporary boom in American exports of food and manufactured goods to Europe. America’s leaders failed to grasp the fact that the export boom was temporary and would end as soon as Europe recovered from the war. Due to lack of foresight, American farmers and businesses went on a borrowing spree.
When President Coolidge sparked an economic boom by cutting federal spending, the temporary export boom to Europe, plus the insane easy-money policy of the Federal Reserve, during an economic expansion transformed a normal economic expansion into an economic boom on steroids. As a result people began to speculate on the stock market and could do so on margin (no money down), owing to New York’s regulations. Who was governor of New York? Franklin Roosevelt.
As the export boom to Europe fizzled, the economic bubble began to burst, and the Federal Reserve did the insane: hiking interest rates so as to dynamite the economy. The Federal Reserve, created ostensibly to prevent recessions, in less than 20 years of existence engineered the worst depression in history. Then the charlatan Franklin Roosevelt steered America on a path to socialism by implementing the New Deal, which actually deepened the depression.
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