Sunday, September 23, 2012

Entitlements II


Again, a relocation.  The seasons change and we push off for St. Petersburg shortly.  A productive summer behind us in the Granite State.

A month or so ago an old friend, a veteran CIA functionary still hard at work attempting to present the Agency with a human face, responded to one of my speculations about the frightening shift of wealth in this democracy into the hands of fewer and fewer, while larger numbers every month are sliding into dependency, with her own conclusion that the deficit would kill us.  We were about to degenerate into another Greece.

I fear it could turn out a lot worse.  We could be moving into the middle years of the Weimar Republic.  Even as a high-school student I was absorbed in German language and literature, and kept it going through college, where I spent a lot of time contemplating the cultural convulsion the Nazis brought to what had become the center of European civilization.  After that I spent something over a year supported by a Fulbright grant in Freiburg im Breisgau, in the Black Forest;  one of my teachers there was the existential philosopher Martin Heidegger, the rector during the late thirties and himself a Nazi convert.  I lived with several German families, in one of which the father had been forced into the Party to save his job and fought in both World Wars.

This was in 1955-1956.  Several neighborhoods in Freiburg were still rubble.  What came through, month after month, was the extent to which the economic horrors of the twenties had effectively liquidated the middle class in a country long regarded as the most enlightened in Europe.  Allied reparations demands imposed by the Treaty of Versailles had induced Hjalmar Schacht, whose answer to the occupation of the Saarland, when payments were not paid in time, was to so inflate the currency that it was effectively destroyed.  It took a billion Marks to mail a letter.  The savings of middle-class families which had lived comfortably for hundreds of years vaporized.  In response radical parties of the left and right formed militias and terrorized the streets.  Communists occupied Berlin and Munich; alarmed onlookers from the major industrialists to the Vatican treasury subsidized the Brownshirts.  British and American bankers -- among them Prescott Bush, father and grandfather of two U.S. presidents -- made their fortunes pushing bond offerings Hitler would ultimately repudiate -- see my book The Old Boys for details.  The result by the middle of the forties was utter devastation of the German heartland and the extermination of close to an entire generation of German men, along with many tens of millions of Russians and Poles and Jews.

In our time, the equivalent of the unrealistic reparations demands may turn out to be the swelling deficit.  Like global warming, the implications of too much debt are insidious.  Technology and off-shoring and no-interest bank accounts are swiftly eroding the faltering middle class. We can deal with it, or in the end it will deal with us.  Everybody will have to give up quite a bit, from our avaricious billionaires to food stamp addicts.  If we don't face up to what is happening before long, and act, what portends for Greece may look like a vacation.

If that doesn't buck you up, wait until I get to Florida.

Burton Hersh

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