Causes of 1980s Recessions, Crash

 

The blue line is unemployment, grey bars recessions. We now examine 1980-1990. 

On 19 February 1980, the Commission on Narcotic Drugs decided to ask all governments to implement to the fullest extent possible sweeping countermeasures against drugs declared illegal, and recommended crackdowns: 3 (XXVIII) ...on financial assets and transactions related to illicit traffic… and subsidized equipment and technical assistance to prohibitionist countries.(link) The muckraking journalists on 60 Minutes--who stirred national panic after a TMI reactor malfunction injured no one--promptly fanned hysteria against Bolivian plant drugs neither habit-forming nor addictive.(link) The recession in 1980--like the Great Depression caused in part by League of Nations prohibitionism--is thus clearly discernible in the first quarter of 1980. Inflation went to 13%, then 15% and the San Francisco Fed presented an unconvincing theory reminiscent of Herbert Hoover's "explanation" of the German crisis of 1931.(link) (link)  On Wednesday, 10OCT1979 a market crash--the worst since the 1973 Commission on Narcotic Drugs meetup sparked drug dragnets, money-laundering confiscations.(link) These segued into market crashes and recession in 1974-5.(link)  As marijuana and cocaine replaced alcohol, traffic fatalities fell. But as addictive opiates like what alcohol prohibition brought to America in the 1920s replaced unobtainable LSD, CDC charts show deaths by drug poisoning increased steadily. 

Narcotic poisoning deaths rise as safer drugs become unobtainable(link)

Reagan as governor had banned LSD and ramped up bans on marijuana, neither of which is habit forming or has caused a single death. Addictive opiates, amphetamines and South American plant stimulants replaced relatively harmless modern drugs. Prison populations accumulated rapidly, serving 5-6 years on average, so victimless criminals incarcerated in 1981-82 accumulated through 1986-88. So by 1986 there were about 6 victimless drug convicts in prison for every person poisoned thanks to heroin having replaced LSD, mescaline, MMDA and psilocybin on black markets.

Recessions and prison-packing as Reagan replaced Carter: USDOJ (link)

The function of the Federal Reserve System is to soften and disguise the financial impact of sumptuary legislation making a crime of some production and trade. When in 1907 a spate of  state and federal legislation banning liquor, beverages and adding regulations on drugs--and even foods such as sardines--a Banking Panic crippled the nation's banks. Influential bankers improvised a network of clearinghouses for interbank payments so business could continue. Broader prohibition laws pressed forth by The Hague, as China closed its borders to such shipments, caused Opium gluts and war in Balkan States. Pressure to use these laws and the Harrison Act to take market share from Germany--leading producer of non-addictive local painkiller, cattarh treatment and refined narcotics--caused WW1. Precisely because its role is to facilitate the expansion of economy-destroying prohibitionist coercion, it wouldn't do for the Fed to advertise the fact. The Fed serves as a sort of anesthetic to lessen the pain of prohibition and wars wrecking the economy while inventing ways to dissemble the coercive causes of that wreckage. In this sense the Fed is a sort of opium to keep the masses from realizing that bans on trade create poverty. So why the recession from the second half of 1981 through most of 1982? 

Facts are the tersest indicators. One of these is that Crashes are what happen when folks who know that's going on realize that a crisis is about to happen. Picture children playing on railroad tracks. Suddenly they jump off, and lo! A train comes along. Every Crash is investors realizing a huge disaster is coming. The Depression or recession that follows the Crash is the actual cause. The Crash is merely the harbinger. In our last episode, Jimmy Carter inherited fallout from Nixon's 1969 Operation Intercept and War on Drugs and June 1971 War On Drugs. There was also the Commission on Narcotic Drugs zombie-hunt held at Geneva early in 1973.(link) Nobody ever mentions that. When was the last time you heard about the League of Nations Opium Advisory Committee meeting in Geneva from January 17th to February 2nd, 1929 to urge politicians worldwide to pay men with guns to rob, kill or cage people over opium--AND things that are neither habit-forming nor narcotics at all? Search for it! 

In 31 years of searching newspapers, the only mention of this important, altruistic, subsidized international movement in print media was the following entry in the New York World Almanac for 1930, giving the events for the preceding year, 1929, the year of the Great Stock Market Crash: 

Feb. 2  At Geneva, the League of Nations Advisory Commission on Opium, in its report, names great chemical firms which have been frequently caught in the illegal traffic, names League members which have refused to cooperate, and reveals that manufacturers have found a way to evade treaty restrictions by converting narcotics into chemical salts which can easily be changed back to their original form. It declares that there is a movement for establishment of more drug factories in Turkey, Hungary, Persia, Russia or Jugo-Slavia, where narcotics are either beyond international control or opium is easily obtainable. (NY World Almanac 1930  p.98)

Here are some more facts you have probably never seen in newspapers or on teevee. 

15JAN1963: JFK Executive Order 11076 established an Advisory Commission on Narcotics and Drug Abuse to end 31DEC1963. (link) It never ended. 

Shortly after Gerald Ford pardoned Nixon for all high crimes and misdemeanors with a $60,000 pension, $400,000 in transition expenses and $12,000 for a valet, a financial crisis developed in Belgium--and everywhere else.

14 October 1974, Gadsden Times 13/35 Unauthorized dealings in foreign currency could cost bank millions. BRUSSELS, Belgium – Belgium's second-largest bank said today it expected losses of $15 million to $37.5 million from unauthorized dealings in foreign currency. The Banque de Bruxelles and the Belgian finance ministry reported Monday that four of the bank's dealers had made "irregular, unrecorded and unauthorized foreign exchange transactions" of US dollars and German marks. The prosecutor's office said that the dealers are being charged with falsification of accounting documents. (link). 

Ten pages earlier in that same issue, a sudden, unexplained financial crisis with graphs showing crashed stock markets in the USA, Germany, France, Hongkong, London, Italy, Holland, Australia, Canada and Japan.(link) This developed eight months after wheels began turning at the Feb-March Commission on "Narcotic" drugs third session.(link) Bolivia did send observers to the dog-and-pony show. All of a sudden, revolts broke out in Bolivia and Argentina, neither of which produced or transported anything other than non-habit-forming coca products tarbrushed as "narcotics" by bureaucratic fiat. Repeats of this rally for deadly force were promised for 1976 and 1978!

Violent revolts in Bolivia and Argentina were a clue that whatever spun out of Belgium to damage the world's economy had to have something to do with cocaine. The Domestic Council Drug Abuse Task Force, chaired by Vice President Nelson Rockefeller in a White Paper concluded marijuana was a minor problem and cocaine was not a problem. “Cocaine,” the report stated, “is not physically addictive... and usually does not result in serious social consequences, such as crime, hospital emergency room admissions, or death.”(link) Republicans decided that this--not the JFK assassination coverup, Nixon pardon or Dole on the ticket--was a mistake. Just before the election, news broke that Europeans had quit taking narcotics. Europeans preferred taking LSD just as Americans in 1966-70 had switched from other drugs to LSD.(link) The Carter Administration, mired in Iran crises, desperately tried enforcing victimless crime laws, but succeeded only in causing another Crash.(link) Mohammedan fanatics in effect helped elect Reagan, so the stage was set for as dramatic a change in prison populations as that wrought by Herbert Hoover when the world population was 2 billion.(link) 

Next up: 1981 German "narcotic" law passed in a replay of 13JUL1931; recession, cyanide-laced Tylenol and Just-Say-No Reaganjugend.

Bad reading: 1931: Debt, Crisis, and the Rise of Hitler by Tobias Straumann.(link) This is the only book aside from the Herbert Hoover Presidential Papers Supplement on the Moratorium that even attempts to provide a detailed explanation of the crisis that shattered Germany's banking system in May, June and July of 1931.(link) Straumann, like Hoover and his Secretaries, elides all mention of League of Nations efforts under the Versailles Treaty to get Germany to sign a "Narcotics" Limitation Convention broader and stricter than the 1912 Hague Opium Convention or the 1925 Geneva Convention combined. Indeed, Germany was still the world leader in chemistry and pharma and relied on those wanings to pay war reparations to the European WW1 Allies. It strains credulity to imagine that Straumann or President Hoover did not understand exactly why these looming restrictions wrecked the German economy. Indeed, these looming restrictions and continuing exactions were precisely what had, since the start of September 1929, worried investors to the point of capital flight from Germany. Straumann closely repeats Hoover's story, down to the omissions and elisions memory-holing this most important overarching facet of the political, financial and diplomatic context of the occasion. A member of the Hoover Administration or the I.G. Farben conglomerate eager to keep the entire drug-limitation aspect of the crisis from public scrutiny could hardly do better than have someone like Straumann corroborate the government's carefully circumscribed tailoring of the facts. Stonewalling the facts certainly helped the National Socialist Party rise from obloquy to power inside of two years.  

Find out the juicy details behind the mother of all economic collapses. Prohibition and The Crash–Cause and Effect in 1929 is available in two languages on Amazon Kindle, as cheap as a pint of craft beer.

Brazilian Sci-fi from 1926 featuring the Hollywood-style beautiful daughter of a scientist touting prohibition and racial collectivism in America’s Black President 2228 by Monteiro Lobato, translated by J Henry Phillips (link)

Brazilian blog… Expatriotas

American blog… Libertariantranslator, with contact form

ASYLUM APPLICATION FORM i589 INSTRUCTIONS IN PORTUGUESE: INSTRUÇÕES PARA O FORMULÁRIO DE ASILO i589. What we did was make the instructions accessible to and understandable by people accustomed to thinking in Portuguese. This costs one dollar ($1) and you can read it on a cellphone with the Kindle app.(link)

Find out the juicy details behind the mother of all economic collapses. Prohibition and The Crash–Cause and Effect in 1929 is available in two languages on Amazon Kindle, as cheap as a pint of craft beer.

Brazilian Sci-fi from 1926 featuring the Hollywood-style beautiful daughter of a scientist touting prohibition and racial collectivism in America’s Black President 2228 by Monteiro Lobato, translated by J Henry Phillips (link)

Brazilian blog… Expatriotas

American blog… Libertariantranslator, with contact form

ASYLUM APPLICATION FORM i589 INSTRUCTIONS IN PORTUGUESE: INSTRUÇÕES PARA O FORMULÁRIO DE ASILO i589. What we did was make the instructions accessible to and understandable by people accustomed to thinking in Portuguese. This costs one dollar ($1) and you can read it on a cellphone with the Kindle app.(link)