Paving the Road to Hell

We are dogged by history. Down the street from our old office in Paris was the site of the world’s first central bank, put up by John Law, before he was forced to high-tail it out of town. Around the corner from our new office, is the Crillon Hotel, where Franklin Roosevelt, then an Assistant Secretary of the Navy, dined in high style while pretending to be getting the low-down on how the doughboys were doing in the trenches. In the next war, Ernest Hemingway claimed to have liberated the bar at the Crillon from the Nazis as they left for the Rhine.

But it is back in Baltimore where the hounds bay the loudest. In our very own office, according to the local history buffs, Woodrow Wilson got together with U.S. Ambassador to Belgium, Theodore Marburg, and ginned up one of the grandest wish lists of all time — the League of Nations.

You’ll recall that two weeks ago, we wrote about some of America’s best presidents: Chester A. Arthur, Millard Fillmore, Warren Gamaliel Harding. While the clumsy giants left their deep footprints in the earth along Pennsylvania Avenue and trod upon practically everyone who got in their way, these midgets managed to make their way through the nation’s highest office leaving hardly a trace. That is, they left people alone…and left the nation as good as they found it.

This week we write about one of America’s worst presidents…Thomas Woodrow Wilson. In the crowded contest for "America’s Worst President," Wilson stands out. As a world improver, Wilson’s stature is world class. He was humorless, immodest, and self-righteous — ranking along with the great scoundrels of the 20th century…Che, Mao, Lenin, Mussolini, just to name a few. Each was full of good intentions, or so they say.

America has come to such a position of prominence in the world. It is the world’s biggest debtor. It is the world’s biggest consumer. It is the world’s most aggressive and meddling military power. No country on earth is so godforsaken as to escape America’s notice…nor too poor to lend it money. We pause a moment and wonder how we got where we are. We go to the scene of the crime and look for evidence. There, we take a few samples…over to lab. And what do we find? That the DNA samples are those of Thomas Woodrow Wilson.

We do not blame the man. Or hold him uniquely responsible. His protégé at the Navy Department, Franklin Roosevelt, was an eager accomplice. Lyndon Johnson drove the getaway car. Ronald Reagan, Alan Greenspan and George W. Bush were certainly members of the gang. But Wilson was the mastermind. It is he that gets our attention today.

"A mentally ill, pitiless, mythomaniac, …an enlightened man who believed himself in direct communication with God, guided by an intelligent power outside of himself…" thus did the father of modern psychoanalysis describe America’s 28th president. But Freud’s judgment of the man was too generous. Wilson was a self-satisfied, sanctimonious delusional bungler, who almost single-handedly turned the country into a hollow, mocking parody of what it was supposed to be.

We begin our inspection with a quotation, attributed to Wilson after his presidential election victory: "Remember that God ordained that I should be the next president of the United States. Neither you, nor any other mortal or mortals could have prevented this."

Is there any doubt that Wilson was mad? He claimed to be a Democrat. Later, he claimed to want to make the world "safe for democracy." But right here, we see he believed that divine providence decided leadership issues. He had not been elected by the people; he had been chosen by God. Why then, bother to have elections at all?

We also pause to wonder how the former college professor could have known of God’s mind. We have tried ourselves, many times. Does God intend stock prices to rise, we ask ourselves? Will God let this plane land safely, we wondered recently? Where the hell did God let me leave the car keys? But though we have given the matter a good-faith try…we have never mastered it. Each time, we merely hear a booming voice that says: Find the damn car keys yourself!

Surely, Woodrow must have supped with God. Perhaps he had God’s ear…or even His throat. For the man could look into the future as easily as you or I could look into an empty glass of beer. He knew not only that he was destined to become president, but that he could build a world even better than the one God had given him — by replacing the private plans of millions of people with plans of his own.

Where did those plans come from? How did he know that the world would be a better place if a Federal Reserve System were set up to control the nation’s money. How did he know that Mexico would be a worse country…and a worse friend to the United States — if it had General Huerta at its head, rather than Wilson’s man, Carranza…or even Pancho Villa, whom he also backed for a while. What made him think that his own judgment was better than that of the Mexicans themselves? His "democrats" in Mexico murdered priests and nuns. Wilson must have thought it a reasonable price to pay for the benefits of enlightened government — and nothing compared to the price the world paid in Wilson’s European War — but what made him think that a democracy was so superior to a constitutional monarchy?

Wilson’s judgment about nearly everything was atrocious. In his April 2nd, 1917 speech, in which he urged the nation to war, Wilson noted that the Russians had always been "democratic at heart."

"[W]onderful, and heartening things…have been happening with the last few weeks in Russia," he continued. What had been happening was the beginning of the Bolshevik Revolution. Germany feared America’s entry in the war on the enemy’s side, and she desperately needed to stabilize the Eastern Front so she could turn her attention to the renewed threat in the West. Her technique was as clever as it was calamitous. She found a revolutionary named Lenin who had been exiled from Russia many years before. He was put on a train, bankrolled and sent back into Russia with the express purpose of making trouble. It was the trouble he made that Wilson applauded…and would later regret. Lenin led the Bolshevik uprising that knocked Russia out of the war. How could Wilson be so sure that the revolutionaries in Moscow and St. Petersburg would be better than the Romanoff’s they replaced?

Readers will rush to judgment themselves. "He made a mistake." They will say. "Or, how could anyone know that the Russian Revolution would be followed by one of the most cruel and absurd episodes of bad government in the entire history of the planet?"

Of course, he could not know. But Wilson wasn’t really thinking at all; he was just pawing the ground and looking for a head to butt or a purse to steal. And he didn’t particularly care whose. Later even sent troops to Russia to try to beat back the Bolsheviks. But this was typical of Wilson. He seemed to want to intervene, not merely on one side — but sometimes both.

And now, we pause again to wonder at the woebegone majesty of it all. For it is neither love nor money that makes the world go ’round— but vanity. Wilson had no particular love…and not much money. King George V drew his measure as accurately as Freud, calling him "an entirely cold academic professor — an odious man." But vanity he had in abundance.

People flatter themselves. Animals may act on instinct and primitive urges, but we humans — albeit descended from animal species — operate in an entirely different manner. We think…and coolly adapt our own behavior to the opportunities and challenges that present themselves. And yet, a naturalist dropped down from another galaxy would have a hard time telling where thinking begins and instinct ends. Stags and bulls butt heads from time to time. So do men. Men strut and puff themselves up too — like cocks on a walk. Throughout the entire animal kingdom, fighting, bullying and bluffing are just a part of life. Males come with a desire to dominate…to show that they’re superior. They do this out of no evil motive; it is just nature’s way of allowing females to choose the best mates…like putting a rich lawyer in a Mercedes. Hardly any man thinks about it, and no female either. But then, who thinks about breathing?

Woodrow Wilson was a thinking man. But his thoughts nearly always brought him to want to boss other men around. There was no logic to it. He had no more idea than anyone else what was coming…or what might actually make the world a better place. Yet, he was eager to disturb the plans of millions so that his own plans might be pressed down on them…and his own vision of a better world might be forcibly imprinted on everyone’s landscape.

Wilson had a "self-regarding arrogance and smugness, masquerading as righteousness," says historian Paul Johnson, "which was always there and which grew with the exercise of power. Vanity got the best of him. He had no need for the polite constraints of bourgeois society, simple truth, or constitutional government. He was like so many democrats, who can wish their neighbor u2018Good day’ in the morning and vote to take his property or his life in the afternoon."

Wilson had "a passion for interpreting great events to the world," he had told his first wife. He wanted to "inspire a great movement of opinion."

So he did. On April 2nd, 1917, Thomas Woodrow Wilson stood before a joint session of Congress and dazzled the assembly a torrent of rhetorical air. He had hardly to say a word. The animals had been snorting and prancing for years. The European powers had locked horns. Now, it was America’s chance to join the battle…and Wilson’s chance to become Alpha Male of the entire world.

Every great public movement begins in deceit, develops into farce and ends in disaster, usually the exact opposite of what the "movement" was intended to accomplish. Wilson’s war was no different. The idea of making the world "safe for democracy," was pure humbug. The Europeans had been fighting for two years. If it were a fight for democracy, it came as news to them. Wilson’s intervention stretched the conflict out for another year and a half of killing, leaving millions dead — including hundreds of thousands of Americans. Was the world any safer for democracy? Not on the evidence. It was just the opposite; in the aftermath of the war, and Wilson’s inept settlement, arose democracy’s most aggressive and ruthless opponents — men who had ideas about how to improve the world themselves and few scruples about how to go about it.

But the history of WWI is well known. Let us look at a Wilson’s other interventions.

History dogs us here too. Every time we go to Nicaragua we learn more about a sordid and absurd episode in America’s history. This, too, has Wilson’s DNA on it. Marines were sent into Nicaragua in 1916. The country became almost a protectorate of the United States — despite the fact that it was a sovereign nation.

Wilson did not stop there. Soon he had U.S. soldiers all over the diarrhea belt. He sent them into Haiti and the Dominican Republic, too. In Mexico, he backed one party…then, a splinter faction…and then, when the splinter group began killing people on both sides of the border, Wilson sent a force of 6,675 Punitive Expedition down to the Rio Grande to hunt down and kill the splinter himself — Pancho Villa.

From humbug, to farce, to disaster; in the end, the effect of these interventions was just the opposite of what Wilson had hoped for. Instead of increasing America’s friends in the region, the number of her sworn enemies multiplied. For the next two generations, in many Latin American countries, "Yanqui go home" was practically the national anthem.

All Wilson’s great movements ended the same way. In disgrace, yielding the exact opposite of the improvement that had been promised. This was true of Wilson’s wars. It was also true of Wilson’s great domestic interventions. Wilson set the Federal Reserve System. Wilson imposed the income tax. Wilson took the federal budget from less than 3% of GDP to over 20%.

The Federal Reserve…the creation of excess credit and phony money …was probably Wilson’s greatest achievement. With it in place, Wilson was able to pave the way to America’s Empire of Debt…and its biggest disaster ever. More to come…

Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century.