Let The Circle Be Unbroken 2

In 1945, the entire industrialized world lay in ruins. Whatever artillery and aerial bombs could accomplish had been wreaked upon it. Gaunt, starving people stood in front of piles of rubble that had once been jobs and homes.
There was, of course, a single exception. America had won, overwhelmingly. We had all the marbles; we had all the intact factories; we had unchallenged and unchallengeable power. The one thing we did not have was buyers.
We had spent half a decade building unbelievable amounts of munitions, tanks, planes, ships, trucks, boots and uniforms. It was a matter of months before those factories would be back to producing cars, radios, refrigerators, civilian clothes and supplies for new homes.
By 1947, we had met the most urgent domestic needs (for those able to pay)—and, failing any other customers for our goods, were sliding back into recession if not depression. We needed two things—foreign buyers to generate greater demand and 2) jobs for surplus American workers who weren’t needed to meet merely domestic needs.
And the whole world lay in ruins, listening eagerly to false promises being made by Communists and other radicals. We came up with a strategy fully as brilliant and self-serving as Lend Lease had been. We would take the proceeds of World War II and hand them out as aid to the ruined economies of Europe and Japan.
This would create strong domestic demand here and hopefully lessen the appeal of Soviet propaganda. We called it the Marshall Plan. It poured money into Europe and Japan. People were fed, factories and homes rebuilt—all with materials coming out of American factories.
It also gave us an enormous measure of economic control over the countries that came to depend on it. (Stalin recognized this reality and would not accept Marshall Plan money to rebuild Russia or Eastern Europe. Read Tito’s henchman, Dilas, on this. “Conversations With Stalin.” The vicious old Georgian knew control when he saw it.)
Soon the currencies of Europe were no longer backed by reserves of precious metals but by stacks of what were then called “Eurodollars”. Our economic control was now as absolute as our military control.
What a boom we were having at home. Houses were built, cars were produced, new media like television were introduced and sold in vast quantities. The American dream had become a cornucopia of suburban delights. An incredible highway system carried goods and vacationers from coast to coast almost effortlessly.
Since the Soviets had constituted the main threat that had led us to the Marshall Plan, we continued to make good use of them. People became terrified of a completely non-existent Soviet threat to the US itself. I remember a ten year old friend of mine spending his Saturdays in a fire tower with binoculars watching for non-existent Russian bombers loaded with non-existent Russian Atom bombs (c.a.1950).
This also kept the economy singing along. Just as war production in World War II became the basis of our prosperity in the early 1940s, so war production for the Cold War became a significant basis for our prosperity in the latter 40s and the 50s.
Between the Soviet “threat” and rebuilding much of the planet, we thrived as no nation has ever thrived before. The circle seemed destined to go on forever—we give the money to Europe and Japan, they use it to buy from us, out of the prosperity this generates here, we give more money out in foreign aid.
But, like all good things, this too came to an end. The world’s factories were eventually rebuilt—with newer and more efficient ones than ours. Russia, working on her own without American aid, rebuilt herself and became a real threat. Now she had missiles and bombs.
By 1960, you could see the clouds forming. By 1968, while working in the Office of the President, I was told to expect a serious devaluation of the American dollar within months. We were wasting enormous amounts of money on a pointless war in Vietnam. I braced for the shock. We had a recession in 1968, the dollar was devalued—slowly—in 1971 and ’73.
But we didn’t collapse. 1933 or ’38 did not come again. Why? I thought about it for a couple of years, and I realized something.
The Third Circle had begun.