[MAGA mega-donor Peter Thiel, the leading Silicon Valley
libertarian who promoted cryptocurrency and floating tax refuges
beyond the reach of government, wrote in 2009 that democracy is no
longer compatible with freedom]
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CAPITALISM’S FASCIST TEMPTATION  
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Dave Anderson
March 30, 2023
Boulder Weekly
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_ MAGA mega-donor Peter Thiel, the leading Silicon Valley libertarian
who promoted cryptocurrency and floating tax refuges beyond the reach
of government, wrote in 2009 that democracy is no longer compatible
with freedom _

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In 1928, U.S. Treasury Secretary Andrew Mellon pushed the Federal
Reserve Board to aggressively hike interest rates to control inflation
and credit-fueled stock market speculation. They did, and, as a
result, the New York Stock Exchange suffered the worst crash in its
history in October 1929.

Mellon advised President Herbert Hoover to “liquidate labor,
liquidate stocks, liquidate farmers, liquidate real estate … It will
purge the rottenness out of the system. High costs of living and high
living will come down. People will work harder, live a more moral
life. Values will be adjusted, and enterprising people will pick up
from less competent people.” The Great Depression would follow.

Mellon was the country’s most powerful banker and a prominent
industrialist with a gigantic business empire. He was Secretary of the
Treasury from March 9, 1921 to Feb. 12, 1932 under Republican
presidents Warren Harding, Calvin Coolidge and Herbert Hoover. 

Mellon emphasized cutting taxes on the rich. The top marginal tax rate
fell from 73% in 1922 to 24% in 1929. 

The Great Depression was a result of a crisis of overproduction. The
Roaring ’20s experienced an economic boom but too many commodities
were produced than could be profitably sold. 

During the decade, income inequality exploded. Historian Becky Little
notes that “by 1928, the top 1% of families received 23.9% of all
pretax income. About 60% of families made less than $2,000 a year, the
income level the Bureau of Labor Statistics classified as the minimum
livable income for a family of five.” At the beginning of the 1920s,
rural America’s economy was already in a depression.

We are socialized to think the boom-and-bust economic cycle is somehow
natural. It is irrational, cruel and stupid. There were more than 60
banking crises in the industrialized world between 1805 and 1927.

Increasingly during a crisis, many people turn toward charismatic
authoritarian leaders.

In the final week of the 1928 election, Andrew Mellon gave a radio
address to promote Herbert Hoover.

He compared Democrats to the new regime in Russia. But in Italy, he
said, “the Bolshevik menace was met and vanquished.” Benito
Mussolini had not only saved “Italy from any possible danger of
economic and social collapse,” but had “improved the well-being of
the people of the country.” The Italian government “operated in
accordance with established economic laws.”

Many prominent American rightwingers like Mellon were enthusiastic
supporters of Mussolini and his regime with the new name of
“fascist.” 

In 2008, a global financial debacle occurred and Federal Reserve chair
Ben Bernanke didn’t intervene until two big banks had collapsed.

What happened? There was a run on a basically unregulated “shadow
banking” system.

Deregulation also created a “housing bubble” of “subprime”
mortgages by predatory lenders who targeted poorer people who hadn’t
qualified for a loan previously.

In Feb. 2009, CNBC commentator Rick Santelli delivered the “rant
heard around the world” on the Chicago Mercantile Exchange. As a
financial analyst for the business news channel, he denounced the
government for “promoting bad behavior” by “subsidiz[ing] the
losers’ mortgages” instead of rewarding “the people that could
carry the water instead of drink the water.”
He called for a “tea party.”

Santelli didn’t mention the government’s bailouts of Wall Street
bigshots. His rant was promoted by  Rush Limbaugh, Sean Hannity and
the Drudge Report. A movement was born. Implicitly and sometimes
explicitly racist, it attracted suburban, white small business and
professional types and was funded by libertarian capitalists like the
Kochs.

 In 2010, they would help the Republicans win their victories in the
elections. The Tea Party still exists. It morphed into MAGA.

The current bank troubles grew out of Trump administration
deregulation (which was supported by many Democrats). The
anti-government tech bros of Silicon Valley now are whining and
yipping for the feds to rescue them. 

There’s MAGA mega-donor Peter Thiel, the leading Silicon Valley
libertarian who promoted cryptocurrency and floating tax refuges
beyond the reach of government. His firm promoted a run on the Silicon
Valley Bank through social media. In 2009, Thiel wrote that democracy
is no longer compatible with freedom. He explained:

“The 1920s were the last decade in American history during which one
could be genuinely optimistic about politics. Since 1920, the vast
increase in welfare beneficiaries and the extension of the franchise
to women — two constituencies that are notoriously tough for
libertarians — have rendered the notion of ‘capitalist
democracy’ into an oxymoron.” 

_As Boulder County’s only independently owned newspaper, Boulder
Weekly is dedicated to illuminating truth, advancing justice and
protecting the First Amendment through ethical, no-holds-barred
journalism and thought-provoking opinion writing. Free every Thursday
since 1993, the Weekly also offers the county’s most comprehensive
arts and entertainment coverage._

* Fascism
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* capitalism
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* Economic Crisis
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* Banking system
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* Great Depression
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