To Fear or Not to Fear: Is that the Question?

The House voted No. All hell broke loose at the New York Stock Exchange. As one pundit put it, the House refused to pony up $700 billion; the market lost $1.1 trillion. This, we are told, endangers pension funds, money market funds and business in general.
It is certainly being presented as an all but unparalleled crisis. Is it? I confess I have no feeling one way or the other. Are we in a real crisis – or is this an effort to scare us enough so that we are finally willing to cover a lot of bad loans?
It’s a fair question, actually. Even if the market (the world’s largest gossip mill) tumbles again tomorrow, is it a true crisis – or are we hearing a lot of self-fulfilling prophecy? Again, I have no feeling one way or the other; I’m merely aware that there are two ways to view this mess.
All the media say this is the real thing, a real live disaster. So say the President, the candidates, the Street, Congressional leaders, and everyone who claims to speak for someone else. Can all these people be wrong? More to the point, could all these people be in collusion, wittingly or no?
Something that happened when I was a youngster working at the Newsweek Magazine editorial make-up desk keeps nibbling at my mind. At the time the John Birch Society was all over the media with its allegations that we were being sold out to the Communists.
The Society was getting all kinds of ink, all kinds of exposure. One Monday when we were putting together the magazine’s Periscope section, the editorial assistant offered the editor yet another story about the machinations of the John Birch Society. He declined it. “We’ve been told,” he said, “not to run any more stories about them.”
I assumed that was just a Newsweek policy. But over the next few months – starting from that very week, I suddenly realized there was nothing about the Society in Time Magazine, the New York Times, the television networks or any other paper I could check out. (We got them all at Newsweek.)
So whose policy was it? All those editors and news bureau chiefs met at the same club and voted unanimously? I find it hard to believe.
Then there’s the infamous or famous NSC-68. National Security Council study sixty eight. Back in early 1950. Now that World War II was past and gone, the American economy was tanking with no more war production. It almost seemed as if we were going back to 1938 and the Depression.
This top secret document – later declassified – talked at length about the need to revitalize our defense industries to counter the imminent Russian threat. (Now Joe Stalin was possibly nastier than Hitler, but his country was in ruins in the late 1940s. He had a few atomic bombs but no way to deliver them. He had kept his Yalta agreements and backed down more than once to American force.
NSC-68 was beating a nearly dead horse. But within months, a five year old Korean civil war escalated into a crusade for Democracy (after Dean Acheson, the US Secretary of State advertently or inadvertently drew the North Koreans offside by making a speech (Feb 1950) in which he told the world South Korea was not included in our defense perimeter.)
Feeling they had a free hand, the North Korean decided to end the civil war once and for all that June. This led to the Korean War – which effectively frightened Congress and the media into authorizing huge new defense expenditures. No more 1938.
You may call that all a huge Communist plot, but the paper trail simply does not lead that way. Or how about my German Jewish friend who took a job in Voice of America, broadcasting to Germany during WWII? Having grown up under Hitler, he had a suspicion of government.
He began to notice that American troops and bases were popping up all over the world, far from any theatre of war. He made a map, putting dots on it for all these new American bases. One day his supervisor saw that map. My friend was fired the next day.
Why such fear of a map of American bases? Michael Crichton wrote a novel a few years ago called A State of Fear. His whole thesis was that it has been a deliberate policy of American officials and opinion makers to keep this nation in a state of fear so that this or that policy could be implemented.
So, it isn’t entirely ridiculous to stop a moment and ask, “Okay, how real is the need for a multi-billion dollar bailout on Wall Street?” As I say, I have not real feeling on this. I do know the power of a self-fulfilling prophecy. I do feel a nagging doubt, a question or two.
I’m left wondering if Franklin Roosevelt was more right than he knew when he warned that “All we have to fear is fear itself.” He said that during a major financial crisis – the one this one is being compared to.