Mises Daily Articles
The Vampire Economy: Italy, Germany, and the US
What is the link between fascism and socialism? They are stages on a continuum of economic control, one that begins in intervention in the free market, moves toward regimentation and greater rigidity, marches toward socialism as failures increase, and ends in dictatorship.
The fascist system, wrote Mises, "clung first to the same principles of economic policies which all not outright socialist governments have adopted in our day, interventionism. Then later it turned step by step toward the German system of socialism, i.e., all-round state control of economic activities."1
What distinguished the fascist variety of interventionism was its reliance on the idea of stability to justify extending state power. Big business and labor eagerly allied with the state to obtain stability against what Murray Rothbard called business fluctuations, the ups and downs of particular markets that result from shifting consumer demands. They naïvely thought that state power could supplant consumer sovereignty with their own producer sovereignty over their industries while maintaining the greater productivity of the division of labor.
At first, the fascists used state spending, mainly for war, to eliminate business fluctuations. Only after they became dependent on the state did the leaders of big business and labor realize that they had merely traded consumer sovereignty for state sovereignty. Soon after they learned which one was the more exacting taskmaster.
To extend their control, the fascists bolstered fiscal expenditures with debt and monetary inflation. Not only did they hope thereby to dominate more and more industries with their expenditures, but also to boost public support for their regimes by generating economic prosperity. Instead, their reckless spending and inflating set in motion the boom-bust cycle. They took the depression as an opportunity to extend their power further by socializing investment with regulations while claiming that such measures would stabilize the business cycle.
The fascists found a readymade theoretical justification for stabilization policies in the work of John Maynard Keynes.2 Keynes claimed that the instability of capitalism emanated from the free play the system gave to the "animal spirits" of investors. Driven by bouts of over-optimism and over-pessimism, investors alternate between bullish spending and bearish hoarding sending the economy into fits of boom and bust.
Keynes proposed to eliminate this instability with state control over both sides of the capital markets. A central bank with the power to inflate the money supply through credit expansion would determine the supply of capital funding and fiscal and regulatory policy would socialize the investment of capital.
In an open letter to President Roosevelt published in the New York Times on December 31, 1933, Keynes counseled this plan:
In a field of domestic policy, I put in the forefront, a large volume of loan expenditure under government auspices. I put in the second place the maintenance of cheap and abundant credit. . . . With these . . . I should expect a successful outcome with great confidence. How much that would mean, not only to the material prosperity of the United States and the whole world, but in comfort to men's minds through a restoration of their faith in the wisdom and the power of government.3
Keynes was even more enthusiastic for the spread of his faith in Germany. In the preface to the German edition of the General Theory, published in 1936, Keynes wrote:
The theory of aggregate production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire.4
State control of money, credit, banking, and investment became the blueprint for fascist stabilization policy. Thus, the expansion of state control under fascism followed a predictable pattern. Debt and monetary inflation paid for state spending. The resulting expansion of credit led to the boom-bust cycle. The financial collapse of the bust resulted in stricter regulation of banking and socialization of investment, which permitted more monetary inflation, credit expansion, debt and spending. The consequent decline in the purchasing power of money justified price and wage controls, which became the focal point of all-around state control. In some cases more slowly and in other cases more rapidly, fascism followed this path toward central planning.
The Italian Fascists began spending and inflating to co-opt big business soon after the March on Rome in 1922. Industrial profits and production jumped during the consequent boom which lasted until 1926. Protectionist measures were also enacted during the boom to give an added benefit to steel, iron, automobiles, and shipbuilding. Under pressure on the lire to devalue in 1926, the Bank of Italy reversed course and the boom collapsed. By 1927, prices and wages were falling but not sufficiently to prevent widespread bankruptcy and depression. Businesses failed by the thousands in the 1930s.
From 1928–1932 production was cut by one-fourth and national income by one-third, and by the end of 1934 one-third of capital capacity sat idle and over one million workers were unemployed. The state progressively intervened to stave off the ill effects of its monetary inflation and extend its control. It bailed out big businesses and banks, fostered mergers and acquisitions, cartelized the remaining, now larger enterprises, and renewed spending, mainly for war.
Annual state expenditures in the early 1930s were double their levels of the early years of Fascism. As tax revenues failed to keep pace, deficits ballooned. Banks also combined and associated more closely with big industrial concerns under the supervision of the state. To rescue the big banks, which had accumulated significant holdings of industrial securities during the boom, the state nationalized their holdings in 1931 and issued new securities, backed by the state, to provide a source of new credit for the banks.
The state also created new and invigorated old credit institutions outside the banking system to provide added channels for credit. It appointed a majority of the boards of these new credit institutions and provided them with their funds by direct subsidies and by guaranteeing their industrial investments with state bonds. Private parties would invest in the state-guaranteed bonds of these new institutions that would then invest the funds in favored businesses.
Although the domestic purchasing power of the lire was rising in the early 1930s, the Italian state still overvalued it in foreign exchange. The resulting trade deficit and gold outflows led the state to limit imports and impose foreign exchange controls. When even the highest tariff rates in the world failed to close the trade deficit the Fascists adopted an import quota system enforced by licensing importers.
The burgeoning state control of business swelled the state bureaucracy and led to widespread centralization and corruption. Small businesses were left to fail and have their assets swallowed up by big businesses and big banks. Nearly 100,000 businesses failed from 1926–1935 in Italy, almost fourfold the number that failed in the previous ten years. By 1935, Mussolini boasted that fully three-fourths of Italian businesses rested on the shoulders of the state.5
The Ethiopian war in 1935 demonstrated the extent of Fascist control.6 Annual war expenditures were fourteen times larger during the war years than previously. To meet these extraordinary expenditures, the Fascists resorted to monetary inflation and capital confiscation. Beginning in July, the gold reserve against the Bank of Italy's notes was progressively relaxed. Even as the gold reserve sagged, from 5.25 billion lire in June of 1935 to 3.93 billion lire in October, the money stock rose to 15.27 billion lire. In the next few years, monetary inflation accelerated as the Fascists monetized the national debt which stood at 1.8 trillion lire by 1938. To curb the decline in the purchasing power of the lire, the Fascists resorted to price and wage controls which paved the way for all-around planning.
Confiscation of capital began in May of 1935, when banks, businesses, and individuals were required to turn all their foreign issued stocks and bonds over to the Bank of Italy. By September, the state had compelled renters in cities and towns over a certain size to buy state bonds in amounts proportionate to their rents, all Italians to exchange their foreign credits for state bonds, businesses to invest all profits in excess of 6% in state securities, and investors holding heavily depreciated state bonds to exchange them plus liquid capital for a new issue of bonds at par value.
Carl Schmidt, in 1939, summarized Italian Fascism with these words:
Fascism rose to power as a preventive reaction, defending the pecuniary and sentimental interests of the propertied and quasi-propertied groups of towns and country from the spectre [sic] of revolution. . . . It not only sought to safeguard existing property rights, but also fostered further industrialization and concentration of business enterprise. . . . Yet, Fascism could not solve the basic difficulties of Italian capitalism. The deepening economic crisis in later years forced business enterprise to rest more and more on the support of the State. As the economic role of the State grew, a subtle shift of spirit and purposes took place. Governmental support of the going economic order called for an increasing army of intruding officials, for a bureaucratic formalization of business affairs. And the bureaucracy developed ends of its own, associated with holding and enlarging its security and power. . . . Thus, despite all formal pronouncements . . . Fascism seemed to be evolving into a tyranny over all but a very few of the Italian people.7
The Original Vampire Economy
Fascist Italy defined the fascist style of interventionism: state control of the economy by fiscal and monetary policy and regulation. Nazi Germany, in contrast, illustrates not so much the fascist style, but how the fascist episode culminates in all-around state control of the economy.
Concerning the socialization of investment under Nazi Germany, Günter Reimann wrote in 1939:
Backed by the General Staff of the army, Nazi bureaucrats have been able to embark upon schemes which compel the most powerful leaders of business and finance to undertake projects which they consider both risky and unprofitable. The building-up of the German war economy takes precedence over everything, including the opinions of private capitalists and their scientific research staffs. . . . The viewpoint of private investors and industrialists who think of the ultimate safety and soundness of investments has been disregarded.
This is particularly true of the big industrialists who earned huge profits from the armament boom and who have large amounts of capital to invest. Their liquid funds do not escape the attention of State commissars, who are searching for means to finance new State-sponsored plants.8
Lured by enormous profits in war production, big businessmen in one industry after another came under state control. Neither political connections nor social status protected industrialists from state predation. The Nazis coerced them into investing war profits to build factories for unprofitable projects such as synthetic rubber, low grade iron ore, and other ersatz production. State and Army commissars insisted on rapid expansion of plant capacity, ancillary investments related to war production, and the use of obsolete, discarded machinery.9
Along with directing investment at the point of bayonet, the Nazis confiscated the profits of industrialists and directed them to new construction. In addition to malinvesting capital, these policies retarded maintenance of existing capital capacity. The state even forbade private investment to increase or replace existing profitable capital capacity. Prohibitions against new entry were enacted as well as closing down existing plants. And in the shrinking realm of private investment, the capriciousness of state bureaucrats could throw investment plans into disarray. The myopia of state planners led to the neglect of investment to maintain and improve what would become important wartime industries like the railroads.10
Reimann summarizes the situation with these words:
The flow of capital is no longer regulated by a capital market which directs it into industries that are particularly profitable. The State has supplanted the capital market. It compels private capitalists to make investments in a future wartime economy and creates economic conditions which cause old investments to decline in value.11
Faced with the dearth of profitable opportunities in the shrinking market economy, investors turned to what they thought would be safe-havens from state power such as real estate and precious metals and gems. Thus, even the capital not consumed by the state was directed away from the capital structure.12
As part of the drive to bring capital markets under their control, the Nazis made bankers mere functionaries. Like their counterparts in industry, big bankers eagerly entangled themselves in the web of state power by accepting bailouts to avoid bankruptcy during the banking crisis in 1931. By the time the Nazis came to power, the state owned a majority of the shares of the big banks.
State power was extended to the entire economy in the form of price and wage controls. Wage controls were imposed in 1933 with the purpose of holding down labor costs to boost profits during the depression and comprehensive price controls were added in 1936 to hide the effects of monetary inflation.In 1933 the state declared its "control of all credit institutions" and began to license banks, collect information on debtors, and scrutinize banking operations. The state dictated to them what investments they were permitted to recommend to investors, namely government bonds and bonds of the enterprises subsidized by the state. Bankers were forbidden to express less than optimistic assessments of the state's financial condition. For investors who refused such advice and withdrew their capital from banks to invest on their own initiative, bankers were obligated to report their activity to the state. A large bureaucracy was formed to oversee banking, centered in the Reichsbank. By 1935, state spending had ballooned to the point that private investment decisions had been supplanted and banking was under the full sway of the state.13
Hans Sennholz reports that by 1945, the Reichsbank's note issue was sixteen times larger than it was in 1933. And bank credit increased nearly sevenfold from July of 1936 to September 1944. By 1939 state debt had risen to 16 billion marks and the deficit had come to exceed the entire funds available in the capital markets. By 1935, war expenditures were more than half the total budget and by 1939 they exceeded 75% of the total. The price and wage controls enacted in response to the decline in the purchasing power of the mark formed an integral part of the Nazi system of total command over the economy.14
When debt and monetary inflation proved insufficient to feed its spending, the state freed itself from financial limitations by decree. It refused to make payment on its debt, confiscated funds from individuals and groups, cancelled private debts and reduced interest rates on private loans and transferred the resulting funds to the state.
As financial pressures from war expenditures mounted during 1938 and investors fled from banks to invest with other financial intermediaries, the state compelled all credit intermediaries, banks, insurance companies, and savings banks as well as municipalities to buy its debt. The stock market, too, was controlled by the state through the dominant position that banks came to hold in it after its collapse during the depression. Reimann estimated that by 1938, 80–90% of new capital was absorbed by the state. Thus, the Nazis built their war economy by consuming the capital stock constructed by preceding generations of German savers and investors.15
The New Vampire Economy
The fascist form of interventionism in America was built on the rump of state corporatism that emerged during the Progressive Era and the experience of state planning during the First World War.16 The former culminated in the establishment of the Federal Reserve System to fully centralize state control of banks and monetary inflation and the latter set precedents for New Deal programs.
With the Fed in full swing, the Italian pattern during the Great Depression was seen in America, also.17 Monetary inflation and credit expansion during the 1920s led to the bust which was used to justify greater state control of investment, through fiscal expenditures and regulation. Like Mussolini, Hoover used protectionism to favor certain producers, increased funding for public works programs, and bailed out key businesses. Federal spending more than doubled from 1929 through 1934 and nearly tripled for the decade between 1929 and 1939. From a modest surplus in 1930, the federal budget was in deficit in every one of the next fifteen years. In 1932 the deficit was 142% of tax revenue and in 1933 it was 130%. In four of the five years between 1932 and 1936, the budget deficit was more than 100% of tax revenues.18
After the stock market crash in October 1929, the Fed tried unsuccessfully to re-inflate and to bolster the credit markets. When its effort failed, Hoover strong-armed big banks into establishing the National Credit Corporation to bailout banks. Capitalized with $500 million from the banks and the power to borrow up to $1 billion with Fed assistance, the NCC operated as a stopgap measure until the rebirth of the War Finance Corporation from the First World War as the Reconstruction Finance Corporation.
Born in January of 1932, the RFC was chartered to issue $1.5 billion in debt and to lend to distressed businesses. The first $1 billion was dispensed by June and 80% of it went to banks and railroads. In July the RFC was authorized by the Emergency Relief and Construction Act to extend its credit to $3.8 billion and it dispensed $2.3 billion for the year, $300 million of which was lent to the states for their relief programs.
Hoover also induced insurance companies to put off foreclosing mortgages by subsidizing them through the Federal Farm Loan Banks. Authorized by the first Glass-Steagall Act in February of 1932, the Fed stepped up its purchases of Treasury securities in what proved to be another vain attempt to re-inflate the economy. Despite a 35% rise in bank reserves during 1932, the money stock fell by $3.5 billion. In July of 1932, Hoover added the Federal Home Loan Bank with $125 million of capital for mortgage loans.19
At least Hoover did not embrace the Swope Plan, which called for the forced cartelization of the economy under the direction of the federal government; that would have to wait for his successor.20 While accelerating expansionary fiscal and monetary policy, Roosevelt conducted a regulatory blitz. The Emergency Banking Act of 1933 further cartelized banks, brought them under stricter federal regulation, and provided bailouts. The state eliminated competition among banks and from non-bank institutions by reserving to banks a uniform set of practices. The Banking Act of 1935 insulated the banking cartel by closing entry to unapproved competitors.
The Federal Deposit Insurance Corporation slowed the liquidation process of the depression and froze malinvestments in banking and the capital structure. To pave the way for more monetary inflation, Roosevelt abandoned the gold standard, abrogated gold contracts, and confiscated gold holdings. The Civilian Conservation Corps, the Emergency Relief Act, and the Works Progress Administration subsidized unemployment and misallocation of labor and distorted private charitable efforts.
The Agricultural Adjustment Acts put crop planting decisions in the hands of the state and subsidized disinvestment and malinvestment in agricultural production. The Tennessee Valley Authority malinvested capital, destroyed natural resources, and distorted energy markets. The Federal Securities Act put stock markets, the pinnacle of capital allocation in the market, under the regulatory arm of the federal government.
The National Industrial Recovery Act cartelized and bureaucratized the economy under federal control. The Home Owners Loan Act, the National Housing Act, and the Rural Electrification Administration malinvested capital in housing and electricity. The National Labor Relations Act and the Fair Labor Standards Act distorted labor costs leading to malinvestments and fostered unemployment. The Social Security Act forced people to "invest" in federal trust-fund bonds. As the Fascists had done, Roosevelt built public support for state intervention as necessary for stability and made war preparation the main outlet for the state's stabilizing expenditures.
The Office of Price Administration was charged with setting price and wage controls in the wake of the Fed's massive monetary inflation. Its General Maximum Price Regulation, issued in April of 1942, resulted in widespread shortages and rationing. Not content with the unsystematic application of controls, Roosevelt pushed through the Economic Stabilization Act in October of 1942. The Office of Economic Stabilization was charged to develop a "comprehensive national economic policy relating to control of civilian purchasing power, prices, rents, wages, profits, rationing, subsidies, and all related matters." While New Deal agencies owed much to First World War predecessors both in form and in personnel it took the Second World War to bring all-around state planning.21 The Selective Training and Service Act of 1940 empowered Roosevelt to conscript labor and confiscate goods and factors for the war effort. In mid-1940, the Reconstruction Finance Corporation was authorized to issue debt and use it to purchase and operate production facilities, invest in equipment and machinery, and buy land for war production. The First and Second War Powers Acts in 1941 vested broad powers in the President to seize production facilities, regulate industries, purchase goods and factors, stipulate terms of contracts, allocate resources and expanded Fed inflationary potential by authorizing it to purchase debt directly from the Treasury.
From 1940 to 1945 federal expenditures increased nearly tenfold and tax revenue rose nearly sevenfold. By 1942, the budget deficit was more than double all federal expenditures in 1940. In 1943, the deficit was two and a half times the deficit in 1942 and double the amount of 1943 tax revenues. The federal debt rose fivefold during the war and the Fed nearly doubled the money stock.22
State power was rolled back after the war, federal expenditures were cut in half and many of the agencies were disbanded and some of their functions ceased while others were transferred to remaining agencies, but the state assumed the role of stabilizing the economy. The Employment Act of 1946 pledged the federal government to "use all practicable means . . . to promote maximum employment, production, and purchasing power" in other words, to prevent downturns.23 To stabilize the economy, the state has been working to restore the power it exercised during the war.
Let's recount how far down the fascist path we have traveled. The Fascists used state spending and regulation to direct investment into state-approved lines of production, war being chief among them. The federal government has 165 primary agencies, 141 of which have a significant affect on investment in the economy. Sixty-six impact investment by fiscal expenditures.
The departments of agriculture, commerce, defense, education, energy, health and human services, homeland security, housing and urban development, transportation, and interior are among the major sources of such federal control.
In 2005, the federal government spent approximately $1.3 trillion in these areas. And from 1945 to 2005, the federal government has spent $9.5 trillion on defense, $6.5 trillion on health care, $1.4 trillion on education, $1.2 trillion on transportation, $0.8 trillion on energy and natural resources, $0.6 trillion on agriculture, $0.5 trillion on science, space, and technology, $0.33 trillion on community and regional development, and $0.3 trillion on commerce and housing.24 These expenditures have malinvested entire sections of the capital structure.
The other 75 federal agencies that affect investment do so by regulation. Examples here include the departments of labor, justice, and treasury, the environmental protection agency, the federal trade commission, the federal communication commission, the federal deposit insurance corporation, and the federal reserve system.
The cost of compliance with federal regulation has been estimated at $1 trillion a year without the Patriot Act and Sarbanes-Oxley.25 The impact of the federal government's fiscal and regulatory policies is $2.3 trillion this year. This is nearly 20% of Gross Domestic Product and over 40% of Private Product Remaining.
The Fascists used a central bank and cartelized the banking system under its regulation for the purpose of monetizing their debt and expanding the supply of credit. The Fed owns $736 billion of the federal debt and depository institutions own another $1.4 trillion. Together they hold 27% of the $7.9 trillion federal debt. Of the $4.6 trillion of the federal debt owned by the public, depository institutions hold 30%. The fiduciary component of checkable deposits issued by depository institutions is approximately $582 billion, which is 8% of the total credit of $7 trillion intermediated by depository institutions.26 As Joe Salerno has pointed out, monetary inflation and credit expansion cloak the capital consumption of state intervention and thus quell public outcry against it.27
The Fascists closed the windows of opportunity for investors to escape state control. As restrictions on banking mounted in the 1960s and 1970s, investors sought alternatives and entrepreneurs provided them. From 1950 to 1980, the share of total assets of all financial intermediaries held by banks fell from 52% to 36%. And the share of the short term credit market held by banks fell from 91% to 71%.28 In response to the financial services revolution, the federal government moved to consolidate its control over financial intermediaries.
The Monetary Control Act of 1980 brought all financial institutions that offer checkable deposits under the regulatory authority of the Fed and imposed on them the uniform practices of all member banks. All depository institutions in America are regulated by three federal agencies, the Fed, the FDIC, and the Comptroller of the Currency. Combined they enforce more than 150 categories of regulations.
The Fascists used banks to collect information on clients' financial activity. Since the Bank Secrecy Act of 1970, the federal government has enacted eight additional anti-money laundering laws expanding its power to collect financial information on Americans. Banks must now form financial profiles of their customers and file suspicious activities reports to the state when they deviate from these patterns.
The Fascists dictated acceptable lines of investment. The federal government compels banks to make certain types of loans, as with the Community Reinvestment Act, and businesses to make certain types of investments, as with the Americans with Disabilities Act, environmental laws, and Sarbanes-Oxley. In other cases, the federal government coercively changes incentives banks have to lend into certain lines of production, as with the Fannie Mae and Freddie Mac.
The Fascists confiscated capital when fiscal pressures mounted. The confiscatory power of the federal government has been directed at drug war and RICO cases. The Patriot Act increased asset confiscation to abate money laundering and made anti-money laundering measures uniform across financial institutions.
Faced with a fiscal crisis and price inflation from their fiscal and monetary policies, the Fascists stepped up dictatorial and confiscatory powers and resorted to price and wage controls. Extraordinary federal expenditures for the Vietnam War and Great Society programs coupled with monetary inflation led to our last imposition of price and wage controls in the early 1970s. Certainly, the federal government will resort to greater dictatorial and confiscatory powers and stricter price and wage controls in the wake of the next fiscal and monetary crisis.
A political class that is willing to throw $250 billion into rebuilding a single city in the face of massive federal deficits is oblivious to the looming fiscal danger. As always, however, war spending is the biggest threat to the fiscal integrity of the state. If these fascist trends in America are not checked, they will lead to net capital consumption and the end of economic progress in America not to mention curtailing what remains of our liberties.
From "The Economics of Fascism," presented by the Mises Institute, October 2005. Find the audio and video of this lecture here.
- 1. Ludwig von Mises, Human Action, Scholar's Edition (Auburn, Ala.: Mises Institute, 1998), p. 814.
- 2. John Maynard Keynes, The General Theory of Employment, Interest, and Money (1936); On Keynes's thought, see Joseph T. Salerno, "The Development of Keynes's Economics From Marshall to Millennialism," Review of Austrian Economics, Vol. 6, No. 1 (1992), pp. 3–64.
- 3. John Maynard Keynes, "An Open Letter to President Roosevelt," New York Times, December 31, 1933 in ed. Herman Krooss, Documentary History of Banking and Currency in the United States, Vol. 4 (New York: McGraw Hill, 1969), p. 2788.
- 4. John Maynard Keynes, "Forward," 1936 German Edition of The General Theory of Employment, Interest, and Money, translated and reprinted in James J. Martin, Revisionist Viewpoints (Colorado Springs: Ralph Myles, 1971), pp. 203–05.
- 5. Carl Schmidt, The Corporate State in Action (London: Victor Gollancz Ltd., 1939), pp. 153–76.
- 6. Gaetano Salvemini, Italian Fascism (London: Victor Gollancz Ltd., 1938), pp. 46–56.
- 7. Schmidt, Corporate State, pp. 152–53.
- 8. Günter Reimann, The Vampire Economy: Doing Business under Fascism (New York: The Vanguard Press, 1939), p. 125. Reimann, who real name was Hans Steinicke, passed away on March 8 of this year at the age of 100. After the war, he founded and operated the prestigious newsletter, International Reports on Finance and Currency.
- 9. Reimann, Vampire Economy, pp. 125–36.
- 10. Reimann, Vampire Economy, pp. 137–53.
- 11. Reimann, Vampire Economy, p. 148.
- 12. Reimann, Vampire Economy, p. 153.
- 13. Reimann, Vampire Economy, pp. 154–61
- 14. Reimann, Vampire Economy, pp. 170-173; Hans Sennholz, Age of Inflation (Belmont, Mass.: Western Islands, 1979), pp. 88–108.
- 15. Reimann, Vampire Economy, pp. 164–67.
- 16. On the Progressive Era, see Gabriel Kolko, The Triumph of Conservatism (New York: Free Press, 1963). On the First World War, see Murray Rothbard, "War Collectivism in World War I," in Ronald Radosh and Murray Rothbard, eds., A New History of Leviathan (New York: E.P. Dutton and Co., 1972), pp. 66–110.
- 17. On the Great Depression, see Murray Rothbard, America's Great Depression (Kansas City: Sheed and Ward, 1963).
- 18. Budget of the United States Government at http://www.gpoaccess.gov/usbudget/fy05/hist.html
- 19. Rothbard, America's Great Depression, pp. 227–81.
- 20. On the New Deal, see Robert Higgs, Crisis and Leviathan (New York: Oxford University Press, 1987), pp. 159-195.
- 21. On the war economy of the Second World War, see Higgs, Crisis and Leviathan, pp. 196–236.
- 22. Budget of the United States Government at http://www.gpoaccess.gov/usbudget/fy05/hist.html
- 23. Higgs, Crisis and Leviathan, p. 227.
- 24. Budget of the United States Government at http://www.gpoaccess.gov/usbudget/fy05/hist.html
- 25. Government Regulatory Cost Compliance Report at http://mwhodges.home.att.net/regulation.htm
- 26. St. Louis Fed: Economic Data at http://research.stlouisfed.org/fred2/
- 27. Joseph Salerno, "From Kennedy's 'New Economics' to Nixon's 'New Economic Policy': Monetary Inflation and the March of Economic Fascism," in John Denson, ed., Reassessing the Presidency (Auburn, Ala.: Mises Institute, 2001), pp. 594–96.
- 28. James Elliot Mason, The Transformation of Commercial Banking in the United States (New York: Garland Publishing, 1997), p. 8.