July 1, 2009

The Mortgage Meltdown and Pearl Harbor

Look, Sailer, why do you keep saying that we should keep in mind that Pearl Harbor got us into World War II? Lots of other countries got into World War II without Pearl Harbor happening to them. And even if Pearl Harbor never happened to us, we probably would have gotten into World War II eventually anyway. Therefore, you should shut up, and nobody should ever mention Pearl Harbor again.

Or:

C'mon, Sailer, why are you so evil as to mention the Wall Street Crash of 1929 when discussing the Great Depression? Lots of other countries were involved in the Great Depression. And even if there hadn't been a Wall Street Crash in 1929, the U.S. probably would have suffered in a Great Depression sooner or later anyway. Thus, logically, anybody who mentions the Wall Street Crash of 1929 should be hounded out of polite society.

41 comments:

Anonymous said...

Pearl Harbor did "get" us into the war in the pacific however the writing was on the wall long before that. FDR instituted policies that would have no other outcome but war -- he refused to negotiate with Japan or take any action which could have avoided the war. The Japanese weren't blameless but really, what was our stake in keeping Vietnam a French colony? If the Japanese had kept their hands off British colonies I suspect we wouldn't have fought them at all.

I suppose the CRA is FDR's policies and securitization was Pearl Harbor. Japan was the banks/lenders gobbling up the universe.

bjdouble said...

What about a list numbered 1-30 of the top 30 things that got us into WWII? That's rigor for you.

Anonymous said...

talk about cryptic. does that mean we are walking into world war III?

Anonymous said...

i see. cra = pearl harbor, ww2 = our crash.

the problem with this analogy is that we might not be done. eg, the crash was 1939, and we have yet to see 1940-45. and who would be Germany in this war analogy? methinks US is the loser.

Anonymous said...

bjdouble: Make sure to leave diversity, immigration, liar loans, zero down mortgages, the CRA, Deval Patrick, and Barack Obama out of that list. In fact, do your utmost to rant and rave about the financiers (who no doubt deserve a fair share of blame) in order to distract any attention from the, y'know, *financees*.

Then you'll be truly rigorous! At the level of Barry Ritholtz.

David Davenport said...

The Japanese weren't blameless but really, what was our stake in keeping Vietnam a French colony? If the Japanese had kept their hands off British colonies I suspect we wouldn't have fought them at all.

I suspect that we wouldn't have fought Japan at all if the Japanese had not attacked Pearl Harbor as well as the Philippines, Wake Island, and other American territories.

Why did Imperial Japan HAVE TO do that?

FuturePundit said...

Steve, People hate it when you try to wake them up from their dream fantasy.

America's Left has constructed a large fantasy and they get irritated when you try to wake them from it. They think if they can just get everyone to join in then the universe will become solipsistic.

Anonymous said...

"Why did Imperial Japan HAVE TO do that?"

We cut off all of Japan's access to oil and other vital resources. FDR had that kind of power, because he could tell the British and the Dutch (ie, the Dutch govt. in exile) to do likewise (since they were in hock to the USA and needed American support), and since these three governments controlled the global trade in oil (and in some other resources), they were quite capable of bringing Japan to its knees with an oil embargo.

Germany couldn't spare what little oil she had, and the USSR wasn't selling oil on the global market, let alone to the Japanese. So FDR had a de facto oil monopoly. Japan either had to go to war, or become a de facto vassal state of the USA. FDR knew Japan would have to go to war. It was that simple.

Remember FDR was already in an undeclared war with Germany, arming Germany's enemies, attacking German submarines in the Atlantic, etc. Failure to provoke a war with Germany was what caused FDR to single the Japanese out for a war instead.

Any war would do. Once at war FDR was pretty much free to do whatever he wanted; he had few if any real constitutional restrains whatsoever as commander in chief in wartime.

josh said...

why indeed

http://en.wikipedia.org/wiki/McCollum_memo

Lucius Vorenus said...

and who would be Germany in this war analogy

Medicare paying out more than it takes in
By Martin Crutsinger, AP Economics Writer
Updated 5/12/2009 5:41 PM
usatoday.com

WASHINGTON - The financial health of Social Security and Medicare, the government's two biggest benefit programs, have worsened because of the severe recession, and Medicare is now paying out more than it receives.

Trustees of the programs said Tuesday that Social Security will start paying out more in benefits than it collects in taxes in 2016, one year sooner than projected last year...

Medicare is in even worse shape. The trustees said the program for hospital expenses will pay out more in benefits than it collects this year...

Anonymous said...

I suspect that we wouldn't have fought Japan at all if the Japanese had not attacked Pearl Harbor as well as the Philippines, Wake Island, and other American territories.

Why did Imperial Japan HAVE TO do that?


Maybe, that's like asking if Shock and Awe was really necessary in Iraq. Pearl Harbor wasn't just a random attack with no history behind it, in reality it came at the tail of a lot of negotiating, negative diplomacy and an oil embargo which would have destroyed Japan's economy. With their oil cut off, the only way for them to continue efforts elsewhere was to take resources from the rest of Asia, which Europe/America had no more claim to than Japan did. So from their perspective the best strategy is to scare the US out of war and then take resources that Europeans have been exploiting for years. It's not a bad strategy except for one miscalculation...

AS said...

Since the whole subprime lending thing was just the beginning of a much larger burst of a bubble in pretty much all asset classes everywhere in the world (there are no Mexicans in Iceland)a better analogy would be "look, Sailer, why are you obsessing over the respiratory system of a canary in the coalmine."
I understand that that happens to be your niche but most people, even those who don’t subscribe to the diversity dogma, are more interested in what went wrong with the economy and why they are suddenly a lot poorer. Instead of the 9 articles you asked Ritzholtz to read I suspect they’ll be more interested in articles dealing with causes of bubbles and explanations of why financial systems are so fragile.
You once likened it to examining the wreckage of a plane for what went wrong. But the difference here is getting rid of America’s diversity dogma, while having many good effects, will not do a damn thing in preventing the next crash. Just like curing 17th Century Dutchmen of their fondness for tulips, or 18th century Frenchman of their obsession with Mississippi basin commerce would do nothing to prevent the next crash. There are important lessons to be learned but they don’t have much to do with the particular details that you examine.
It’s not so much that “mention the Wall Street Crash of 1929 when discussing the Great Depression? “ as that you talk at length about RCA stock and Americas obsession with high tech.

Anonymous said...

Why did Imperial Japan HAVE TO do that?



Remember that US pilots (the "Flying Tigers) were already shooting down Japanese planes in China at that stage. The US started the shooting war.

Anonymous said...

The CRA and diversity subprime lending are what triggered the financial meltdown. There were huge structural problems out there that in the long run were probably of greater importance, and there probably would have been a meltdown sooner or later no matter what, but knowing what the specific trigger was is certainly of some interest.

headache said...

Is it just me dreading t99 on this one? I'll need to take a day off to read his post.

headache said...

People need to look at the long term. Recently there have been a series of articles in German mainstream financial press about the declining value of paper money, including the EURO, since most paper currencies are somehow hooked to the USD via the Bretton Woods system. Prof. Hanke, one of 4 specialists to go to court in order to prevent the change from DM to EURO, summarized all of this in a book he wrote 5 years ago. He predicted the current crash. He also predicts a new world financial system in which Gold will again play a role, though it will not be exclusive.
Since Nixon dumped the Gold Standard, paper money has been losing its value. And since governments feel bound to spend their way out of problems, and can print dollars without having to worry about having enough Gold against it, the mechanism feeds on itself. Thus, built into the post-Bretton Woods system is a self-destructing mechanism which ultimately has to lead to a financial meltdown and thus a new global financial structure. Countries such as China and Russia do not want to be part of the unstable western paper money system. Apparently the incident in China where Chinese economics students openly laughed at Geithner was turning point. The press says that nobody would have laughed at a US treasury sec. before. It shows how little respect there is for Bretton Woods 1.0. Unfortunately the western nations are going to be the losers at Bretton Woods 2.0.

Anonymous said...

"The Japanese weren't blameless but really, what was our stake in keeping Vietnam a French colony?"

Talk about stating the issue in the "narrowest possible terms". Keeping Japan from conquering most of China and SE Asia seems to have been a pretty decent priority in retrospect.

Anonymous said...

"Any war would do. Once at war FDR was pretty much free to do whatever he wanted; he had few if any real constitutional restrains whatsoever as commander in chief in wartime."

Yeah, the motivation was his personal quest for power, blah, blah, blah.

Stopping Germany and Japan from overrunning a huge chunk of the world (or alternatively preventing the Soviets from counter-overrunning Europe) was not only a good idea, but a great one.

/stil

Anonymous said...

"(or alternatively preventing the Soviets from counter-overrunning Europe) was not only a good idea, but a great one. "


Sure, that's why they let Stalin have half of Western Europe.

Anonymous said...

Just a week or two prior to the attack on Pearl Harbor, someone in the US Government leaked America's contingency plans to the press. Rainbow 5 - was a break down of how America would deal with each Major power in the event of war. It was called rainbow because each country was assigned a color. The 5 were the powers with a navy and hence the countires that could project an attack on the US.

Japan - Orange
Germany - Black
Soviet Union - Red
England - Blue?
France - Pink????

It was well understood by the government but not the public that Germany was the greatest threat. Most Americans wanted to fight the "japs" but were more sanguine about fighting the "krauts". The Rosevelt administration knew this and smelt war in the air so they leaked Rainbow 5 to try and nudge the pubic into not getting into a scenerio where we went to war with Japan but not Germany.

Germany saved us from this delimma when 4 days after Pearl Harbor they declared war on the US.

David said...

Steve has been taking his vitamins, it seems.

Anonymous said...

Remember that US pilots (the Flying Tigers) were already shooting down Japanese planes in China at that stage. The US started the shooting war.

BZZZZZT, WRONG.

The Flying Tigers did not see combat until 20 December 1941, 12 days after Pearl Harbor.

And don't forget the Japanese shot up the USS Panay in China in December 1937, before the Flying Tigers were even a gleam in FDR's eye.

bg said...

where is testing99 to stop the BS in this blog??????

up to the 1920, American men were largely able to reproduce by simple division. So there were barely any women in those times. If women existed in huge numbers like today, they would have imposed peace on japan after Pearl harbour

Anonymous said...

So and oil embargoe that began in 1940 in response to Japanese atrocities in China was the proximate cause of the Japanese expansion into China in 1937?
They really are inscrutable!!

Anonymous said...

You know my great great grandparents came from Norway and settled in the Dakotas and lived in a sod hut in the early 1900's. In the depression when people were losing their farms, they bought them at low prices.

The reason for bubbles is partly the something for nothing dream.

People who worked hard and saw too little opportunity in their home country came here. They believed in themselves. They did not expect something for nothing.

The new immigrant profile is seeking the welfare state.

mmack said...

Remember that US pilots (the "Flying Tigers) were already shooting down Japanese planes in China at that stage. The US started the shooting war.

The American Volunteer Group was in China during 1941, but their first official combat mission didn't take place until December 20th, 1941. Check here and here for proof.

theDouchebad said...

Well, Japanese wanted oil. To get that oil, they needed to conquer Indonesia. To do this, they thought they needed to conquer the Philippines. And to do this required war with the US. And of course this made them come up with Pearl Harbour. This was their mistake. Yes, the US had bombers and had threatened to use them from bases in the Philippines. But as long as the Japanese were not the aggressors, I don't think Roosevelt could of built up a long term case against Japan. He could secretly launched a small number of continual air raids/attacks against Japanese shipping, but Japanese would've been easily able to either repel or withstand the losses from those attacks. And this is what they should have done. Just accept that fact the secretly some US bombers and planes may attack their oil shipments. This would've been a nuisance but something they could take.


Then with that taken care of, simply declare war on Britain, France and Netherlands. Turn Vietnam into their major Base of operations and attack indonesia from there. No need to control the philipines, no war with the US and a successful control of all British, Dutch, and French possession in SE asia.

Of course if this happened, Hitler would've never declared war on the US. Russia may never have won the eastern front(they would not have lost) but have come to a truth with Germany.

Then there would be no Cold war.

Probably No civil rights movement.

No immigration reform act.

And the US would be a whole lot whiter.

Thank God for the Japanese.

David Davenport said...

Remember that US pilots (the "Flying Tigers) were already shooting down Japanese planes in China at that stage. The US started the shooting war.

They were innocent Japanese planes, right?

What was your Imperial Japanese Army doing in China, Korea, and parts of the former USSR at that time?

Anonymous said...

The Nanking Massacre or Nanjing Massacre, also known as the Rape of Nanking, refers to a six-week period following the Japanese capture of Nanking, then capital of the Republic of China, on December 9, 1937. During this period, 20-80,000 women were raped [1] and hundreds of thousands of civilians were murdered by soldiers of the Imperial Japanese Army.[2][3] The massacre remains a contentious political issue, as various aspects of it have been disputed by some historical revisionists and Japanese nationalists,[3] who have claimed that the massacre has been either exaggerated or wholly fabricated for propaganda purposes. As a result of nationalist efforts to deny or rationalize the crimes, the massacre remains a stumbling block in Sino-Japanese relations, as well as Japanese relations with other Asia-Pacific nations such as South Korea and the Philippines.

http://en.wikipedia.org/wiki/Nanking_Massacre

Why did the Imperial Japanese Army do those things in Nanking in 1937?

Bruce Banned formerly proofreader said...

Why is it impolite to mention that both FDR and Churchill were enthralled by Hitler and Mussolini? (particularly the latter?)
And that by backing Stalin, they sold off 50 % of Europe to revolutionary Marxism. And acted against their natural political allies.
Fascism wouldn't have lasted another generation, but Marxism was harder to beat.
Under its moderate disguise, you can well say that leftism has won the day.
That's what those two gentlemen, Churchill and FDR, accomplished: letting Marxism triumph, and in so doing, destroying Western Civilization. Thank you. We could have remained neutral, or give a helping hand to those poised to destroy the beast. No, we couldn't have chose the lesser evil.
If only we'd listened to Chamberlain and Lindberg! Can't we do it today, even if it's too late?
Aren't we even allowed to discuss it here, of all places?

David Davenport said...

Why is it impolite to mention that both FDR and Churchill were enthralled by Hitler and Mussolini? (particularly the latter?)

Please furnish some proof for that assertion.


And that by backing Stalin, they sold off 50 % of Europe to revolutionary Marxism. And acted against their natural political allies.



What or which "natural political allies" do you have in mind? National Socialists Workers' Parties, perhaps? The French Action Francais Party, which wanted to restore the French monarchy?

Fascism wouldn't have lasted another generation, but Marxism was harder to beat.

How do you know that, if the Nazis had not been completely defeated in 1945?

... We could have remained neutral,

Remained objectively pro-Nazi, as George Orwell would say.


... or give a helping hand to those poised to destroy the beast. No, we couldn't have chose the lesser evil.

Who could have destroyed the Wehrmacht, aside from Anglo-American forces or the Red Army?

Ronduck said...

David Davenport said...

I suspect that we wouldn't have fought Japan at all if the Japanese had not attacked Pearl Harbor as well as the Philippines, Wake Island, and other American territories.

Why did Imperial Japan HAVE TO do that
?

The US and Japan had been on a collision course for most of the first half of the twentieth century, a course that culminated in Pearl Harbor. Homer Lea wrote a book several decades before Pearl Harbor predicting war with Japan. Remember that at the time the US ruled the Philippines and had a rather large navy patrolling the western Pacific. In addition a US gunboat patrolling a river in south China was attacked by the Japanese before Pearl Harbor, showing that we certainly were involved over there and they knew we were on a collision course.

By the late 1930's the die had already been cast, and all that was needed was a provocation by one or the other side.

Ronduck said...

It was called rainbow because each country was assigned a color.

In all of those prewar US Navy plans, the US referred to itself as Blue. England may have had another color in case it was overrun by the Germans.

Ronduck said...

AS said...

there are no Mexicans in Iceland...

No, but there are Vietnamese Refugees in Iceland - link.

The aftermath of America's decision to not win in Vietnam has had consequences across the West.

David said...

david davenport said

"Who could have destroyed the Wehrmacht, aside from Anglo-American forces or the Red Army?"

Well, since Germany had a "vampire economy" (so described by the good guys), no one would have needed to destroy the Wehrmacht. It would have collapsed in general government bankruptcy, as did the Red Army. Even Churchill said after WWII, "We killed the wrong pig."

David Davenport said...

Even Churchill said after WWII, "We killed the wrong pig."

He didn't say that until AFTER the Nazis were kaput, did he?

In short: even among right wing American armchair generals, it is very fringe-y to favor an alliance with Hitler's assassins or would-be assassins against the Reds.

But -- in short -- many deplore:

(b) the alliance with Stalin in general;

(c) Eisenhower and George. C. Marshall's decision not to take all of Berlin in April 1945 -- and not to tell the Red Army to stay out of Berlin, or else ...

David Davenport said...

FDR instituted policies that would have no other outcome but war -- he refused to negotiate with Japan or take any action which could have avoided the war.

I'm sure your B. Hussein O. would have negotiated.

Anonymous said...

"If only we'd listened to Chamberlain and Lindberg! Can't we do it today, even if it's too late?
Aren't we even allowed to discuss it here, of all places?"

It was Chamberlain who gave the Germans the ultimatum with regards to Poland and then declared war on them.

theDouchebad said...

"By the late 1930's the die had already been cast, and all that was needed was a provocation by one or the other side."

Tensions were really high but war was not cast in stone. It was the Japanese high command's dumb and willful decision to start the war. If they had some smart leaders back then, they would've realized that they didn't need Philippines.

If they had really smart leaders back then, they would've found a solution to the war with China/Manchuria and the threat of oil embargoes would've never materialized. And even if it did materialize, the needs of oil during peace time are greatly diminished and was something the Japanese could have withstood.

kerdasi amaq said...

"Why did Imperial Japan HAVE TO do that?".

Why, because FDR wanted them to.

His beloved Soviet Union was in dire danger, and he desperately wanted to go to their rescue. Provoking Japan into starting a war, was necessary for too reasons,(i)he was elected on a pledge to keep America out of the war, so he couldn't declare war himself, he needed to have America attacked first.

(ii) When Germany declared war against the US as a result of their treaty obligations to Japan, it was mission accomplished for FDR.

theDouchebad said...

"(ii) When Germany declared war against the US as a result of their treaty obligations to Japan, it was mission accomplished for FDR."

Germany was not obligated to declare war on US. Germany would be obligated only if US had attacked Japan. Hitler declared war by his own volition.