Leithner Letter Nos. 111-113
26 March - 26 May 2009

Private ownership of savings … can be socially controlled. The social abuses connected with savings are encountered mainly in the mechanics of investment and financial management by the large banks, savings institutions, and insurance companies which handle savings. It is a relatively easy matter for the State to preserve the present de facto rights and interests of small savers while completely nationalising the financial institutions which now administer their savings.

It cannot be repeated too often that what prevents adequate public regulation is liberal norms of law and constitutional guarantees of private rights. There is no need to expropriate private ownership of … savings … in order to maintain adequate social control … The fascist State can easily convert the … large corporations into State-controlled enterprises, the present owners and creditors of which will receive income bonds … There is no real difference between being a yes-man official of a bank and being an official of a State bureaucracy.

Lawrence Dennis
The Coming American Fascism (1936)

The theory of aggregate production that is the goal of the following book can be much more easily applied to the conditions of a totalitarian state than [it can] under the conditions of free competition and a considerable degree of laissez-faire.

John Maynard Keynes
Preface to the German-language edition of
The General Theory of Employment, Interest and Money (1936)

The most serious financial problem for the Nazi tate is not the danger of a breakdown of the currency and banking system, but the growing illiquidity of banks, insurance companies, saving institutions, etc. … Germany’s financial organisations are again in a situation where their assets which should be kept liquid have become “frozen” … But the totalitarian State can tighten its control over the whole financial system and appropriate for itself all private funds which are essential for the further existence of a private economy. Yet the institutions which still exist as private enterprises are not allowed to go bankrupt. For an artificial belief in credits and financial obligations has to be maintained in open conflict with realities.

Günter Reimann
The Vampire Economy: Doing Business Under Fascism (1939)

Nearly every day brings new reports of the collapse of a large financial institution or the impending bankruptcy of a major company. Plans for bailouts and government intervention are in the air. Even those who profess devotion to free enterprise have wavered. Are we not faced with an emergency that calls for immediate action to “save” capitalism? Faced with this situation, we need to be more resolute than ever in defence of the free market, with no government restrictions whatever. If we do not defeat these measures, we face grave danger. The record of National Socialist Germany during the 1930s shows how quickly government intervention leads to full-scale socialism.

David Gordon
Nazi Economics (19 December 2008)

All Hail Recessions, Bear Markets, Bankruptcy and Failure

“The past twelve months have been humbling,” the editor of an investment newsletter wrote in the closing days of 2008. “The figures which will appear in our annual Performance Report (which we’ll rule off at 31 December) will almost certainly be frightful, unwinding several years of outperformance. Our analysts recently got together for our annual conference, and not surprisingly it turned into something of a two-day post-mortem. It was a sombre affair where we pored over our mistakes and discussed how we might be able to improve our investment process.” 

To read the entire newsletter (PDF), click here.

Chris Leithner


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