On one sunny August 16, at a time of high price inflation, government operatives announced the seizure of millions of eggs and 200,000 pounds of sugar. Raids on the larders of other suspected profiteers continued for weeks thereafter … The government was prepared to return these items to their owners once the chastened profiteers agreed to sell them at a “reasonable” price and under the watchful eye of a government officer.
The official in charge of the raids explained thusly: “I am one of those who believe that a large part of the high cost of living is due to the fact that a number of unconscionable men in the ranks of the dealers have taken advantage … If we can make a few conspicuous examples of gougers and give the widest sort of publicity to the fact that such gougers have been and will be punished, in the future there will be little inclination to profiteer in this country.”
Earlier, the President of the Republic had laid the blame for a lesser bout of price inflation squarely at the feet of gouging businessmen: “The high cost of living is arranged by private understanding” is how he put it.
By now you may have guessed that I am talking about present-day Venezuela, its Presidente, and his henchmen. You would have guessed wrong. The year was 1919, Woodrow Wilson was president, and his henchman, quoted above, was Attorney General A. Mitchell Palmer. The high cost of living was a result of Mr. Wilson’s war, which was financed partly by money printing, as well as the absorption of vast quantities of real goods and services by the government for use in fighting the war. The obvious effect of more money chasing a reduced supply of goods and services was price inflation, and that same phenomenon happened in all the warring countries, most notably France.
This episode provides one of many reasons, too numerous to elaborate here, why Woodrow Wilson is properly called a proto-fascist and why he is a serious contender for the dubious honor of worst-ever U.S. president. For more, see Jim Powell’s, “Wilson’s War: How Woodrow Wilson’s Great Blunder Led to Hitler, Lenin, Stalin, and World War II.”
The first three paragraphs above are paraphrased from p. 24 of James Grant’s new book, “The Forgotten Depression.” Though I have not finished the book, I couldn’t resist sharing this tidbit. The gist of Grant’s thesis can be seen in its subtitle, “1921: the Crash that Cured Itself.” Highly recommended, so far.