-Caveat Lector- To accomplish their restartings in all areas of the U.S.A. economic system the New Deal also set up the Works Progress Administration (to get people jobs) and the Reconstruction Finance Corporation (to get the big industries going Amongst the first of the New Deal's emergency acts of 1933 was the establishment of the Works Progress Administration, which provided jobs for approximately anyone who wanted them-artists, mathematicians, etc., as well as all white- and blue-collar workers and, of course, all day laborers and such. Then, pressed by the labor unions and the political urge to avoid the characteristics of socialism and get the heretofore unemployed millions off WPA-the New Deal's Works Progress Administration-the government financed new buildings and granted mortgages for longer and longer periods to encourage people to undertake the production of much-needed homes and other buildings. It must be noted that the rejuvenated building industry was reset in motion as a concession to the building trades and a move to Increase employment, not as a much-needed evolutionary advance in the art of human environment controlling. The unions were so strong as to be able to push the New Deal very hard in the direction of resuming only yesterday's multifoldedly inefficient "one-off" building design techniques and materials as the activity in which they could establish maximum employment. Technically ignorant bank officers became the authorities who alone judged the design validity of the structures and architectural acceptability of the building projects, funds for the building of which they authorized as mortgage-secured loans of their bank depositors' money. The New Deal went on to rationalize its strategic acts by arguing to itself, "In order to continue as a nation we must have our national defense. Since it is established that there is nowhere nearly enough life support to go around in this world, if we don't have a formidable national defense, we're going to be successfully attacked by hungry enemies. Our national defense can't carry on without steel and the generation of electricity, the production of chemicals, and other imperative industrial items." The FDR team soon concluded that the industries producing those absolute "defense" necessities were to be called our "prime contractors." The prime contractors must be kept going at any cost. "So we'll give war-production orders to the prime contractors to produce such-and-such goods. The contractors with signed government contracts can then go to the banks and borrow the money to pay their overhead and to buy the materials and power and to pay the wages to produce the goods. Then we the government will pay the producers for those finished goods and services, and they can pay off their loans from the bank. The money paid by the prime contractors as wages will give people buying power, which will allow them to start other economic production systems going." This became a monetary irrigation system (still in use today in 1980 U.S.A. affairs), which works at a rate providing about ten recirculations in a year following upon each major war order initiated by and paid for by the government. In the depths of the Depression in 1932, when you could buy a meal for five cents and the finest of shins for one dollar, the Reconstruction Finance Corporation went much further. It gave U.S. Steel $85 million worth of new rolling equipment (in 1980 U.S. currency that would be close to a billion dollars), etc., etc. The U.S.A's Reconstruction Finance Corporation had a secondary government machinery-owning outfit that loaned all these prime contracting companies new equipment with which to fill their government orders. What tha New Deal did in fact was to socialize the prime contractor corporations instead of the people. This hid the fact of socialism from the world in general. Socializing the prime contractor corporations indirectly benefited the people themselves. In this way the New Deal seemingly didn't give money to the corporations-just orders. The U.S.A.-established and -financed RFC loaned the prime contractors all the money they needed to buy all the equipment. But in the end the government rarely collected on the loans and finally just forgave the machinery borrowers altogether, selling them the equipment for very low "nominal" sums. The New Deal had also pledged itself at outset to take care of the "forgotten man." The government voted minimum-wage limits of a substantial magnitude. The economy was going again. People were getting more and more jobs-how many depended upon how many prime contracts the government gave out. World War II was clearly looming ahead. The New Deal said, "We have to be prepared" ... and their "preparedness" ordering increased. Jobs increased rapidly. Empty buildings filled. There were a number of great corporations whose businesses had practically stopped by 1933, but those businesses had now been set in healthy motion once more under the New Deal's socializing of the prime contractors. Franklin Roosevelt said to the heads of the great corporations that had not gone "bust," "Every one of you has a large surplus that you held on to, in fear, through the Depression. We want you to spend your surpluses in research and development of new equipment. Since the early clipper ship days, it has always been a function of a 'fundamental risk enterprise' that the enterprise use some of its profits to buy itself new and better equipment-a new and better ship-with the enterprise that is doing the prime risk-taking by investing in the new equipment, thereby requalifying for the privileges and rewards granted by governments for wise risking, daring execution, and good management" FDR said, "We want you enterprisers to modernize.'" But U.S.A. big corporate management said, in unison, "We won't do that. It is much too a time to use any of our surplus." They knew the oncoming World War II was forcing the government to see that their plants were modernized, so by holding out they forced the government to take over both the risk and cost of modernizing. Heretofore in the history of private enterprise research and development-of more efficient new plants and equipment-had been funded from the enterprise's "surplus" earnings-i.e., from earnings prudently withheld from distribution to stockholders to ensure the continuing strength of the enterprise. Then FDR's U.S.A. Treasury, with all FDR's lawyers' advice, ruled that the large private-enterprise corporations could make their new plant expansion and equipment improvements and charge the costs to operating expenses, which expenses were then to be deducted from new earnings before calculating income taxes. This amounted, in fact, to an indirect subsidy to cover all new-equipment acquisition. The U.S.A. Treasury next ruled that all research and development-"R and D"-was thereafter also to be considered by the U.S.A. Treasury Department as "an operating expense" and also to be deducted from income before calculating income taxes. The U.S.A. thereby eliminated almost all the "risks" of private enterprise. Next Henry Luce, representing news publishers in America-the news-papers and magazines-went to Roosevelt and said, "Your democracy needs its news. You have to have some way for the people to know what's going on." "Yes," said FDR. Luce went on, We publishers can't afford to publish the news. The prices people are willing to pay for the news won't pay for the publications. The newspapers and magazines are only paid for by advertising, and the New Deal has no allowance for advertising in its operating procedures." The New Deal then ruled that advertising was hence-forth to be classified as research and development, therefore deductible from gross income as an operating expense before calculating taxes. Thus advertising became a hidden subsidy of very great sire-about $7 billion a year at that time--hidden in tax-calculation procedures. The subsidy was so great as to cover the founding of what has come to be known as "Madison Avenue." While the government was doing all this, the Congress passed strict and comprehensive rent controls, bank-loan-interest controls, and price controls of every kind. It was pure socialism. It had to be done that way. There was no question. The Securities and Exchange Commission reforms removed J. P. Morgan's two directors from the boards of almost every one of the U.S.A's great corporations-except Henry Ford's-whose interlocking directorships had formerly given Morgan prime control over U.S.A. industry. With the termination of Morgan's control of all the major corporation boards such as those of U.S. Steel and General Motors, these great corporations' managements found that they were no longer beholden to J.P. Morgan, and only to their stockholders. "All we have to do now to hold our jobs is to make money for the stockholders" At this moment the U.S.A. had evolved into a managerial capitalism, in contradistinction to the now-defunct, invisible "finance capitalism" of which J. P. Morgan had been the master. What became noticeable at this time was the uniformity of position taken by all the great corporation managements in respect to actions taken by the New Deal-for instance, the great corporations' across-the-board refusal to expend surplus on research and development To discover how that came about it first must be realized that the industrial expansion-financing of the private banking trial-enterprise underwriting and houses of Wall Street could not have been carried on without the advice, contract-writing services, and legal planning of the world's most powerful and most widely informed legat brains. As a consequence the corporation law firms of Wall Street, New York. were peopled with the most astute thinkers and tacticians of' America-if not of the whole world. When the Great Crash of 1929 came and events of the Depression occurred, as already related (and the great poker hands were called, and the New Deal had prosecuted the guilty and housecleaned the system and socialized the prime contractors, etc.), it was the counsel of Wall Street lawyers that governed the positions taken by the new, self-perpetuating, industrial-giants' managements. It was the former 3. P. Morgan's and other financiers' lawyers who now counseled all the as-yet-solvent big-industry managements to guard their surplus and refuse to cooperate with the New Deal. Furthermore the Wall Street lawyers could see clearly what the public couldn't see-i.e., that while the New Deal was unilaterally socializing the system, it was doing so without exacting any contractual obligation on the corporations to acknowledge the government's economic recovery strategies. The corporations gave no legal acknowledgment of their socialized status. It was clear to the Wall Street lawyers that without such contractual acknowledgment the government socializing was a one-sided, voluntary commitment on the part of the political party in power. Therefore, in fact, none of the big corporations had lost their free-enterprise independence accepting the enormous government rehabilitation expenditures. Since the Wall Street lawyers and brethren in other parts of the country were called upon to fill the Supreme Court bench from which body they could determine the province of "free enterprise," the lawyers reasoned somewhat as follows: "A socialized system-as clearly manifest by the USSR cannot tolerate free enterprise's freedom of initiative. There is no lucrative law practice in socialized states-ergo, if we are to survive we lawyers an Wall Street had best figure out how to go about keeping the fundamentals of capitalism alive amongst the few great industrial corporations that as yet remain solvent despite the 1929 and 1933 Depression events." The Wall Street lawyers saw clearly that it was those surviving corporations' undistributed surplus which certified that capitalism had not gone entirely bankrupt despite its banking system's failure. Operating invisibly behind the "skirts" of the as-yet-live corporations, the Wall Street lawyers very informally, but very seriously, organized far-ahead-in-time research-and-study teams consisting of the most astute corporation lawyers to be found in America. From these teams' realistic conceptioning they formulated a grand strategy that would keep capitalism's private enterprise alive and prospering indefinitely as run invisibly but absolutely legally by the lawyers. The latter's research discovered that they would not soon be able to popularly and legally overthrow the New Deal. It was clear that not until World War II was over might they find conditions suitable for untying all the economic controls established by the New Deal. It is appropriate at this point to do some reviewing of evolutionary changes that had been transpiring in the nature of capitalism. It all starts with the land-based capitalism, a capitalism maintained by whoever seized, successfully defended, and controlled the land-ergo, owned the land. Those producing food and life support on the lands were all subservient to, and paid tribute to, the great landowners. In land capitalism whoever owned the fertile fields controlled all the wealth to be made from that land. Land capitalism dealt with nature's own metabolic productivity. Then private enterprise and finance capitalism came to discover what could be done with mass-produced metals to multiply the value of the land-produced, life-support metabolics. In the mid-nineteenth century mass production of steel, for the first time in history, suddenly gave humans the capability of producing long-span beams, whereby they were able to produce large-enough, semifireproof, and powerful structures to move more and more wealth-production work under cover. Western-world capitalism began to produce wealth under cover in addition to that produced out in the field. To make the tin cans in the factory to can the food produced in the fields, or to take the cotton produced in the fields and mass-produce cotton cloth, became known as "value-added-by-manufacture." Value-added-by-manufacturing was accomplished primarily with metals-metal buildings, metal machinery, metal tools, metal sea and land transportation systems, and, ofttimes, metal end products As already mentioned, it was the new, world-around, metals sources that brought about the name World War I. Suddenly we had a completely new form of capitalism, which required both the large-scale financing and integration of metals, mines and mine-owners, metals refining and shaping into wholesaleable forms, all to be estabhshed around the world by the world masters of the great line of supply. The world line of metals-and-alloy supply was essential in producing all the extraordinarily productive new machinery and that machinery's delivery system, as was the generation and delivery of the unprecederitedly vast amounts of inanimate energy as electricity. This new form of the world power structure's capitalism-by ownership of the mines and metals working all around the world-we call the metals and mining capitalism Whoever owned the mines had incredible power, but, never as great as those who controlled the line of their supply. Combining the two, (1) the mines and metals-producing industry and (2) the line of supply, we have the world power structure that operated as the first supranational, world-around-integrated, metals cartels. They were out of reach of the laws of any one country, in a metals cartels capitalism. Combining these two with (3) the absolute need of the large financing and credit at magnatudes rarely affordable by any one individual, we find finance capitalism integrating the world operation. At any rate we now understand why the 1914-is war was called World War 1. It was inherently a war for mastery of the world's metallic resources and their world-around physical integration, controlling, and exploitation. The amount of metal productivity of World War 1 was so great that, after the war, as the arms products became obsolete and were displaced by new design products, the metal contained iti the ever vaster amounts of obsolete products began to come back into circulation as scrap. The scrap resources swiftly increased. The. Morgan-escaped managerial capitalist's said, 'I'm going to keep my job if we pay our stockholders dividends-the rate at which we can pay dividends is directly dependent upon the rate at which our production wheels go around. To keep our wheels going around, we don't case whether we are using scrap metals or mined metals. As a matter of fact, the metals-as-scrap are usually more refined than the metals coming out of the mines. They cost less, so we're better off using the scrap-whether from obsolete buildings, machinery, armaments, railways, or ships." Formerly Morgan had insisted on all his controlled manufacturing corporations acquiring all their metal stocks only from newly mined, refined, and wholesale "shaped" stocks. The mining companies found that industry would not buy ingots of their metals, They found that they had to turn their metals into tubes, bars, sheet, plate, wire, and a great variety of sizes and shapes. Wall Street's finance cap- italism, therefore, underwrote the development of a host of metals-shaping industries who were the automatic customers of the only-ingot-producing, metals-mining corporations. The post-World War I mineowner-capitalists began gradually to be washed out of the game by virtue of the Morgan-emancipated managerial capitalists saying, "Our job is to keep the wheels going around." Wheels-going-around producing saleable goods from scrap metals became strategic. Up to the time of World War I the owners of the factories (Mr. Morgan et at) said, "We put you in as management to make a profit out of this factory." If the management said, "Oive us a new piece of machinery," the owners said, "New piece of machinery! What are you talking about? We put you in to make money out of our machinery. You are fired." Change was anathema to the J. P. Morgan-type of financier. Scientists would come to Mr. Morgan and say, "Mr. Morgan, I can show you how to make steel so that it won't rust." "Young man! The more it rusts, the more I sell. How crazy you must be! Get the doctor to look this man over, he's obviously a lunatic-take those mad papers out of his pocket and put them in my desk drawer." But change was welcomed by the late-1930s' managerial capitalism. New designs called for more whirling of their production wheels. The change came in the form of many new armament designs for the clearly approaching World War II. The new designs released as "scrap" the metals from obsolete designs. Concurrently, with the New Deal's reforms and controls, the wage-earners were now getting a fairer share of the national income, and the economy was prospering-particularly so as the New Deal began officially to remember the "forgotten man." Congress put a dollar cellar under the wages and elevated worker earnings enough to produce minor affluence and security for labor in general. Just before the U.S.A. entered World War II, the Wall Street lawyers in structed the heads of great corporations to say to Roosevelt, "We heads of the corporations of America were not elected by the American people. We were chosen by our stockholders. Our job is to make profits for our stockholders. At the time of World War I a lot of business people were called profiteers.' As we enter into World War II war production, we don't want to be called 'immoral profiteers.' If you want cooperation from us, Mr. Roosevelt, you as government are going to have to be the one to initiate our corporations' being properly rewarded for our cooperation. "Mr. Roosevelt said, "I agree. You are beholden to your stockholders, so you are going to have to pay them dividends." Coping with this dilemma, the United States Treasury Department agreed that it was legitimate for the industrial corporations to make up to 12-percent profit per each product turnover. The New Deal said, "We the people, as government, are, however, going to renegotiate with you all the time, continually inspect you, to be sure you are really earning your profits." As a consequence of all the continuous renegotiation by the government, those U.S..A. corporations earned an average of 10 percent on every turnover. This meant that in World War II for every annual war budget-running at first at $70 billion per year 10 percent, or $7 billion, was earmarked for distribution to the stockholders of the corporations. Complete socialization of the stockholders of the prime U.S.A. corporations was accomplished. Amongst the prime contractors identified by the New Deal were all the leading automobile companies. For example, Chrysler was picked out to produce the war tanks, With their powerful position established with the government, the U.S.A. automobile manufacturers, on being asked to convert all of their productivity to war armaments, agreed amongst themselves to put into storage all of their production tooling and to resume their postwar auto production with the models they were last producing at outset of war. New production tooling would cost them several billions of dollars. They had their Madison Avenue companies grind out advertisements showing the 0.1. soldiers saying, "Please keep everything the same at home until I return." Because Germany's, Italy's, and Japan's production equipment was destroyed during World War II, they were free after the war to start using the newest war-advanced technology in both the designing and the production of their automobiles. That was the beginning of the end for the U.S.A's prestige as the world's technological leader. The U.S.A. post-World War II cars were inherently seven years passé it contrast to the smaller, faster foreign cars, The "Big Three" American auto producers undertook to manufacture while keeping the foreign cars off the market and while they themselves exploited America's market need for a geographically expanding economy's transportation. In the late 1960s the "Big Three" automobile companies of America found that their distributors were disenchanted with decreasing financial returns and with frequent bankruptcy. To hold their distributors G.M., Ford and Chrysler deliberately manufactured a few of their mechanically well-designed parts with inferior materials that were guaranteed to deteriorate electrolytically or otherwise. The replacement of these parts guaranteed that all the distributors' car buyers would have to return to them for service on a high-frequency basis, at which time the distributor would replace the parts catalogue-priced so high that the distributor was guaranteed a profitable business. This continuing deceit of the customers-.we the people-was the beginning of the end of the American automobile business and the once-great world esteem for Uncle Sam. U.S.A. discreditation has been brought about without the U.S.A. people's knowledge of the money-maker-worlds invisible cheating. Throughout all pre-World War II years employers had maintained that unemployed people were unemployed because they were unqualified for survival, socially expendable. Then World War It saw young people deployed on war tasks all around the world. In view of this loss of labor vast amounts of automation were incorporated in the U.S.A.'s home-front war production. With the war over, the government found the cream of its youth all unemployed, and because of the automation there were no jobs in sight. Because they were the proven "cream of the youth," no one could say they were unemployed because they were unqualified, so the as-yet-operative New Deal created the GI Bill, which sent all those young people to prepaid college and university educations. By World War II's end labor was earning so much that, for the first time, it was feeling truly secure, affluent, and successful. Emulating the pattern of the rich, individuals of labor were becoming little capitalists, with many enjoying the realization of their own home and land, with two shiny new post-World War II cars in the garage, their kids going to college, and some savings in the bank. The workers began buying shares in IBM and other super promising private enterprise companies. The Wall Street lawyers, being astute observers of such matters, realized that this labor affluence had brought about a psychological reorientation of the body politic. People no longer remembered or felt the depression of spirit that was experienced in the Great Depression of social economics following the Great Crash. The Wall Street lawyers' grand strategists saw this as the time for breaking through the New Deal's hold on government, an event which, up to that time, seemed impossible. The lawyers said, "Whoever can get the victorious, supreme-command American general of World War.as their candidate for President will be able to get the presidency." They captured Eisenhower. Eisenhower had no political conviction, one way or the other. His vanity was excited at the idea of becoming president of his country. DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! 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