Get the entire film at https://www.createspace.com/204551. This clip from a 1 hour PBS television documentary I made called ” How Hitler Lost the War.” The film takes a unique point of view. Rather than talking about who won the war, my colleagues and I explored what Hitler did that helped lose Germany the war. Although it happened so long ago, it is still a frightening story. Some of the interviews I conducted in this segment were fascinating to me and I hope they are to you as well.
But, of course, it is only a question of when, not if, the economic reckoning will come. Populism is not only about promises to give more to more people; but, without those promises, all of the cultural elements of populism would look merely outdated and reactionary. And even reactionaries do not like reactionary politics if it hurts them in their wallets.
.. In the United States, the midterm congressional elections in November will be decided by whether enthusiasm about the state of the economy is strong enough to compensate for the widespread disapproval of Trump’s personal style and divisive, sexist, and racist rhetoric. Yet it is precisely on this issue that the conventional wisdom breaks down.
.. Classical economic liberalism assumes that bad policies will be punished immediately by bad outcomes. Over the past 25 years, bond-market vigilantes have argued that all-seeing, forward-looking financial markets will always anticipate the future consequences of populist policies and impose risk premia.
According to this logic, as borrowing costs rise, populist governments will not be able to deliver on their rash promises, and sanity and orthodoxy will eventually return.2
Economists who study populism generally draw lessons from Latin America, where past episodes of nationalist over-promising have quickly led to massive fiscal deficits that could not be financed. In these cases, populist economics always produced cycles of inflation, currency depreciation, and instability, because global financial markets and other outsiders were skeptical from the start.
The problem is that the Latin American experience is not universal. Bond markets are not as predictable as many seem to believe; nor can they be relied on as an ultimate source of discipline. Like markets generally, bond markets can be captured by a popular narrative (or what might euphemistically be called the management of expectations) that overstates the prospects of a certain outcome.
.. The most extreme response to the Depression came from Hitler’s Germany. The Nazis did not miss an opportunity to boast about how quickly their programs had wiped out unemployment and built new infrastructure. With the German government keeping inflation in check through extensive price and wage controls, there was much talk about an economic miracle.
The Nazis’ apparent success in defying economic orthodoxy looked to many conventionally minded analysts like an illusion. Critics outside Germany saw only a deeply immoral polity pursuing a project that was doomed to fail. They were right about the immorality, of course; but they were wrong about the imminence of the project’s economic collapse.
In 1939, the Cambridge University economist Claude Guillebaud published The Economic Recovery of Germany, which argued that the German economy was quite robust and would not collapse from overstrain or overheating in the event of a military conflict. Guillebaud was widely vilified. The Economist, that bastion of classical liberalism, pilloried him in an unprecedented two-page review, concluding that not even the chief Nazi propagandist Joseph Goebbels could have improved on his interpretation. His work, the editors lamented, was emblematic of a “dangerous tendency among democratic economists to play the Nazis’ game.”1
.. Guillebaud was also excoriated by other academics who were far more famous than him, such as the British economist Dennis Robertson. And yet Guillebaud was fundamentally right: Nazi Germany was not an economy on the brink of collapse, and the Western powers would have done well to start mobilizing a proper defense.
.. today’s populists have benefited from a general recovery that began before they arrived on the scene. When the next downturn comes, they will quickly find that their own reckless policies have severely constrained their ability to respond. At that point, Orbán, Kaczyński, and other Central European populists may decide to pursue more aggressive options.1
.. If populism had an avatar, it would be the immortal cartoon character Wile E. Coyote, who, in his futile pursuit of the Road Runner, routinely sprints over cliff edges and continues to move forward, suspended by the logic of his own belief. Eventually, he realizes that there is no ground beneath his feet, and he falls. But that never happens immediately.
In the 1990s, when Russia was feeling the pinch of economic reforms, the Russian political provocateur Vladimir Zhirinovsky asked, “Why should we inflict suffering on ourselves? Let’s make others suffer.” The ultimate danger of nationalist populism always reveals itself during a setback. When things start to go wrong, the only way forward is at the expense of others.
As in the past, when the illusion of today’s painless economic expansion ends, politics will return to the fore, and trade wars may lead to troop deployments.
He lists six cautions or tests for U.S. forces to be sent into combat abroad:
- The commitment must be deemed vital to our national interest or that of our allies.
- It should be made “wholeheartedly, and with the clear intention of winning.”
- Political and military objectives and the ways to meet them must be clearly defined.
- As conditions change, whether the commitment remains in the national interest must be reassessed.
- Before a commitment is made, there must be “some reasonable assurance” of popular and congressional support.
- A commitment to arms must be a last resort.
.. Secretary Weinberger, who came of age in the 1930s, is still stirred by the failure of the democracies to respond to Hitler in a timely and forceful way. What is more on his mind now, however, is a Vietnam-type situation in which the United States may succumb to the “danger of (a) gradualist incremental approach which almost always means the use of insufficient force.”
.. In a sense Mr. Weinberger is simply distilling the post-Vietnam consensus — in a way that, strangely, relates to Gary Hart’s minority plank on “the selective, judicious use of American military power”
Although it was a high-tech conflict with newly lethal weapons, he writes, it still followed patterns established over millennia: “British, American, Italian, and German soldiers often found themselves fortifying or destroying the Mediterranean stonework of the Romans, Byzantines, Franks, Venetians, and Ottomans.” In many instances, military planners on both sides ignored the lessons of the past. Some lessons were local: it’s always been hard to “campaign northward up the narrow backbone of the Italian peninsula,” for example, which is exactly what the Allies struggled to do.
.. History shows that the only way to win a total war is to occupy your enemy’s capital with infantrymen, with whom you can force regime change. Hitler should have paused to ask how, with such a weak navy, he planned to cross the oceans and sack London and, later,Washington. At a fundamental level, it was a mistake for him to attack countries whose capitals he had no way to reach.
.. Before the war, the United States produced a little more than half of the world’s oil; Axis leaders should have known this would be a decisive factor in a mechanized conflict involving tanks, planes, and other vehicles. (The Nazis may have underestimated the importance of fuel because—even though they planned to quickly conquer vast amounts of territory through blitzkrieg—many of their supply lines remained dependent upon horses for the duration of the war.)
.. Axis leaders believed that Fascism could make up the difference by producing more fanatical soldiers with more “élan.”
For a brief time at the beginning of the war, Allied countries believed this, too. (There was widespread fear, especially, of Japanese soldiers.) They soon realized that defending one’s homeland against invaders turns pretty much everyone into a fanatic.
.. the Allies had bigger, faster factories and could produce more guns and shells. “The most significant statistic of the war is the ten-to-one advantage in aggregate artillery production (in total over a million large guns) enjoyed by the British Empire, the Soviet Union, and the United States over the three Axis powers.”
Russia, meanwhile, excelled at manufacturing cheap, easily serviceable, and quickly manufactured tanks, which, by the end of the war, were better than the tanks the Nazis fielded.
.. had Hitler chosen not to invade Russia, or not to declare war on the United States, he might have kept his Continental gains.
.. But temperance and Fascism do not mix, and the outsized ambitions of the Axis powers put them on a collision course with the massive geographical, managerial, and logistical advantages possessed by the Allies
.. The Axis powers fell prey to their own mythmaking: they were adept at creating narratives that made exceedingly unlikely victories seem not just plausible but inevitable. When the Allies perceived just how far Fascist fantasy diverged from reality, they concluded that Axis leaders had brainwashed their citizens and themselves.
.. The Axis countries lived in a fantasy world—they believed their own propaganda, which argued that, for reasons of race and ideology, they were unbeatable. The Allies, meanwhile, underestimated their own economic might in the wake of the Great Depression. They allowed themselves to be intimidated by Fascist rhetoric; justifiably horrified by the First World War, they wanted to give pacifism a chance, and so refrained from the flag-waving displays of aggression that might have revealed their true strength, while hoping, despite his proclamations to the contrary, that Hitler might be satisfied with smaller, regional conquests.
“Most wars since antiquity can be defined as the result of such flawed prewar assessments of relative military and economic strength as well as strategic objectives,”