Sherman, Scorched Earth and Goldman Sachs
Sherman, Scorched Earth and Goldman Sachs
By J.M. Hamilton (5-30-11)
“I beg to present to you as a Christmas gift the city of Savannah…” - General William T. Sherman (aka Uncle Billy) in a telegraph to President Lincoln
On November 15th 1864 General Sherman and a Union Army began their march to the sea, and ushered in, within the modern era, the idea or concept of “total war.” That is to say, the idea of not only battling enemy combatants, but also attacking civilians, the infrastructure, food stores, and communications supporting same. In the century or two leading up to the American civil war, many wars, particularly wars in Europe, were fought by generals with minimal bloodshed simply by maneuvering armies around for strategic advantage, much like chess pieces. In this manner, a war, or a political conflict between nation states, might be concluded with minimal loss of blood and treasure (Napoleon’s martial actions being a notable exception).
Sherman’s attack on the peach state was as audacious as it was unprecedented, and his army lived off the land, behind enemy lines with limited communications. Most importantly, his actions struck out against not only the South’s economic support for its quest for liberation, or insurrection (depending upon one’s perspective); but more importantly, attacked psychologically its ability to wage war. Sherman’s march to the sea and his army’s northward turn into the Carolinas is history and a textbook example for generals and military leaders in the 20th century and beyond.
Twentieth Century examples of total war, or scorched earth, were the Nazi blitz on London, and Hitler’s blitzkrieg actions in Poland and France. (Note: Allied Forces in WWII were prone as well to taking the war to civilian populations, in the hopes of breaking the will of the Axis Powers: Dresden, Nagasaki, and Hiroshima being classical and highly effective examples.) More recently, President Nixon and Secretary of State Henry Kissinger deployed Sherman’s strategy in operations Linebacker and Linebacker II (aka the Christmas bombings) in North Vietnam, all in the furtherance of political goals and objectives. In the 21st Century, Osama bin Laden strike against the World Trade Center was perhaps textbook Sherman, albeit an excellent example where the attack did not break Americans psychologically, but actually emboldened and strengthened resolve, bringing about OBL’s downfall and greatly diminishing Al Qaeda (whether or not OBL actually achieved his goal of bankrupting America remains to be seen).
There’s a bit of the “burning the bridges behind you” quality about scorched earth policies. When an army is deep behind enemy lines with severed communications, or have acted upon orders against a civilian population, military commanders are professionally, personally, and psychologically committed. A general or political leader has gone past the point of no return, where you absolutely must win the war, or probably it is better that you die trying (Just ask Ratko Mladic). U.S. generals after the bombing of Dresden had expressed themselves to have fought doubly hard, and with greater ferocity, for fear of being tried and convicted by the Third Reich.
Victory becomes an absolute imperative because history is written by winners. Or put another way, history is written by winners because the losers are often prosecuted for war crimes.
Political leaders, and the general’s that labor under them, can often justify scorched earth through any number of rationalizations, but perhaps the most popular is lives can be saved by concluding the war early, via total war.
But how does Goldman Sachs justify or rationalize its martial operations on the United States and world economy?
Now, some of my readers may immediately object to my assertion that Goldman Sachs has committed atrocities against the civilian population, but let’s take a look at some of the recent a posteriori evidence:
Our third U.S. President had the following to say about banks:
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” - -Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802), President of US (1743 - 1826)
For additional evidence, and some very serious reading, please check out the brand new book co-authored by the Pulitzer prize winning writer, Gretchen Mortgenson, and Joshua Rosner: Reckless Endangerment, How Outsized Ambition, Greed and Corruption lead to Economic Armageddon.
So if banks are more dangerous than standing armies, and Goldman Sachs sold short that American dream, that is to say, took out extensive derivatives contracts betting against home ownership (and unloaded CDOs supporting same) for their own enrichment, which subsequently caused the near collapse of the U.S. and global economies when AIG could not foot the bill for Goldman’s bets, et al., which was only forestalled by the government creating and spending trillions in bailout money and mitigating the effects of the banking crisis, shouldn’t Goldman be treated like any other common war criminal? Quite simply, we know who committed the crimes, now why isn’t Goldman Sachs in the docket, and facing the gallows (dissolution and/or bankruptcy), like the Nazis at Nuremburg? With millions of Americans unemployed or underemployed, the U.S. and European economies moldering and smoldering, and Western democracies kept on economic life support with unsustainable fiscal and monetary policies three years later, is it not finally time to hold these malefactors accountable?
Could Jean Rostand’s famous maxim be coming into play: “Kill one man you’re a murder. Kill millions of men you’re a conqueror. Kill everyone and you’re a god.” Or is the door between Wall Street and the U.S. government now spinning so rapidly that the prosecutors (or government officials responsible for bringing justice) would be bringing charges against themselves, family members, or very close friends?
Clearly Goldman’s actions meet the definition of malem in se; and clearly banking and finance has such potential for abuse and misuse that is it is as deadly as a standing army. Perhaps Clausewitz’s famous dictum should be further amended: War, and finance, are a mere continuation of politics by other means. As such, should not banking, and shadow banking, be held accountable for practices and policies that lead to scorched earth and economic malaise? And should the Geneva Convention be amended to include the activities and transactions of banks, hedge funds and private equity?
Total war is an abomination. However, Lincoln, via Sherman, utilized total war to great effect to free the slaves; Roosevelt, via Eisenhower, deployed it to free Europe from slavery and genocide under a Nazi regime. And President Truman relied upon scorched earth, so as to not invade Japan, in order to save thousands of U.S. soldiers from certain death.
But by what justification, or rationalization, does Goldman Sachs perpetrate total war against the world? Maximizing bonuses, or “shareholder returns” for a select few, really doesn’t quite measure up.
If Goldman Sachs, who was repeatedly bailed out by the American government, gets away with short selling the American dream, and nuking the world economy, the lesson will be that history is, also, written by losers, as long as they are rich and politically well connected.
Ultimately, it is up to this administration to insure that this lesson is neither written nor learned.
P.S.
Look at the chain of events that Goldman’s actions created: banks and a crippled economy were rescued by QE1 and QE2, which lead to speculation in commodities, higher food prices, inflation, and revolution in the middle-east. The U.S. housing market still has not recovered, and most likely will not for many years to come. The derivatives contract Goldman sold Greece may actually bring down the Euro, via the spread of economic and monetary contagion.
REMEMBER: Those in power are counting on your apathy; those in power thrive on our ignorance.
And a very happy Memorial Day.
– J.M.H.
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