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Paranoia on Parade: How Goldbugs, Libertarians and Religious Extremists Brought America to the Brink

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Dave Troy writes a deeply researched and disturbing article in the Washington Spectator:

(Complete Bibliography and Endnotes for Paranoia on Parade can be found in this post following the conclusion of the article.)

“We are choked with news but starved of history.”—Will Durant

The seeds of the January 6, 2021, insurrection can be traced back to the early 1900s, when industrialists concerned with the erosion of their wealth and power attempted to control the currency and restrict government spending. Later these forces, in alignment with America Firsters, aggrieved veterans, and antisemitic splinter groups that mirrored various features of European fascism, including white supremacists, rallied to oppose Roosevelt and the New Deal.

These same elites, their derivatives, and a revolving cast of con artists, energy and tech entrepreneurs, and political extremists would repeatedly convene over the following one hundred years in a concerted attempt to undermine the authority of the U.S. government and oppose social democracy and the democratization of American life.

Roosevelt’s presidency began tumultuously and with a series of shocks that took even his supporters by surprise. Just 36 hours after taking office, at 1 a.m. on Monday, March 6, 1933, Roosevelt suspended all banking transactions, effective immediately. He issued an emergency proclamation that shut the country’s banks down for a full week, in part to prevent hoarding of gold and silver. 1 A month later, on April 5, 1933, he issued Executive Order 6102, which mandated that all gold be turned in to the federal government, outlawing private reserves. 2

These two actions shocked wealthy industrialists who had expected that Franklin Delano Roosevelt, of patrician background and “one of their own,” would address the challenges posed by the Great Depression in a way that would somehow coddle their interests. Their sense of betrayal was evident when Roosevelt sought to pay for his “New Deal” programs by taking the country off their sacred gold standard.

The gold standard, the practice of pegging the value of the dollar to a fixed amount of gold, had been the subject of political debate for decades. Advocates argued that it kept the government honest and constrained spending; a strict adherence to the gold standard kept politicians from pursuing expensive policies and wars simply by keeping them from spending money they didn’t have. 3 In 1933, dollars could be redeemed for gold at a price of $20.67 per ounce, 4 and the government was obligated to produce it upon demand. But there was not enough gold in reserve to redeem all dollars for gold, and that especially would not be the case after the Federal Reserve authorized the debt needed to finance the New Deal.

Wealthy industrialists believed the gold standard helped them keep the government under their control. Roosevelt’s abandonment of it directly attacked both their wealth and their power, and they felt they were being asked to pay for programs for the unlucky and unthrifty.

Right-wing veterans groups align with big business

Veterans of the Great War also felt betrayed. In 1932, having been promised benefits that would not be paid until 1945, and concerned about inflation (uncertain they would get paid in dollars that were worth anything), veterans organized a so-called “Bonus Army” demonstration in Washington, D.C., complete with tent encampments. Herbert Hoover eventually persuaded Gen. Douglas MacArthur to run them off, killing and injuring many participants in the process. Disgusted with Hoover’s disregard for their service, the powerful voting bloc, consisting of about one-sixth of the voting public, pledged their support to Roosevelt. 5

So their surprise was palpable when, on March 20, 1933, Roosevelt passed the Economy Act, which dramatically reduced their benefits in the name of trying to balance the federal budget. 6 Veterans groups were livid, particularly the Veterans of Foreign Wars, which came out against FDR’s actions and demanded restitution from Congress. 7

But Roosevelt settled on the New Deal and enacted it decisively and without delay. This “big bang” set into motion a spectrum of aligned anti-Roosevelt forces, coalescing around a few key groups and individuals.

The American Legion, a veterans organization, was founded in 1919 and funded in part by Grayson M.P. Murphy, a banker affiliated with J.P. Morgan. While the group was ostensibly designed to advocate for the interests of veterans, it also had a secondary role as a union-busting organization. 8 Members were reportedly issued baseball bats and encouraged to use them if they saw signs of union activity at their industrial workplaces. 9 The Legion, which, with a membership of about one million, dwarfed the much smaller, 150,000-member VFW, was more concerned with the interests of big business and had the conservative, moneyed leadership to match. 10

Maj. Gen. Smedley D. Butler, a celebrated war hero, attracted large audiences advocating for veteran bonuses at VFW events. 11 According to Butler, he was approached by Gerald MacGuire on behalf of Grayson M.P. Murphy, to speak in favor of a return to the gold standard at an American Legion convention in the fall of 1933. Butler, suspicious of the Legion’s ties to big business, declined the invitation and a substantial cash offer; incensed, he also claimed that industrialists connected to Murphy and MacGuire intended to enlist veterans in an effort to overthrow Roosevelt in the name of the restoration of the gold standard. 12

Murphy helped to seed another related organization, the American Liberty League, serving as its treasurer. 13 Made up of various wealthy industrialists, including . . .

Continue reading.

For a three-part audio version of the article, with commentary, see this post.

Written by Leisureguy

28 June 2022 at 9:52 am

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