Every legislative move to use the prohibition and tax laws as a pretext for the confiscation of money, real estate and bank accounts inevitably has to trigger a partial economic collapse. Securities markets are the first to notice the approaching looters. Missing from the original graph is Bush Dynasty legislation offering state and local law-enforcement a piece of the prohibition confiscation action through asset forfeiture enactments. All the while the State Department was quietly using the United Nations to force foreign countries to enact money “laundering” and prohibition laws, much as in Herbert Hoover’s day.
Hungarian physician Ignaz Semmelweis noted in 1846 that five times as many women died after childbirth where doctors did not wash their hands before treating them. Nobody believed that “childbed fever” could possibly be transmitted by doctors and the man was reviled, his reputation ruined, until he was eventually committed to a madhouse where he died. Nowadays, if the doctor were to fail to wash his hands before treating a woman in labor, he could easily be charged with malpractice or even manslaughter.
In 1848 a Prussian Socialist orator wrote a political platform that called for “2. A heavy progressive or graduated income tax.” Politicians and idlers everywhere fell upon this with whoops of joy. It was promptly translated into English, favorably referenced in popular literature and was incorporated into American law for a short time at the beginning of the Civil War. Politicians were excited about the idea of using the government to take from others, and similar legislation was pushed in 1893-4–causing a panic and depression–then repealed to save the economy. Yet the drumbeat continued. Novelists Edward Bellamy and William Dean Howells conjured utopian visions of moneyless socialist societies in which everyone would have everything a person could possibly need. The doctrine of altruism, that it is your moral duty to sacrifice your values for the benefit of strangers, took root with the unquestioning fervor of revealed faith. As the welfare of strangers replaced the value of individual human life as the standard for distinguishing between good and evil, altruism acquired the compulsory force of law. Altruistic socialism became increasingly popular in United States, and with it, prohibitionism.
An income tax was levied on corporations in 1910, and their lobbyists moved swiftly to transfer the burden to the shoulders of individuals. President Woodrow Wilson on July 28th, 1914 ordered that corporate income tax returns “shall constitute public records and be open to inspection as such.” The New York Stock Exchange suffered drastic declines, and hoodwinked historians still insist that that was because Austria had invaded Serbia on the other side of the world (they never mention the income tax returns). Herbert Hoover issued an executive order with almost the exact same wording on December 13, 1932, when nobody was attacking anybody. Securities markets again fell and over the course of the next two months almost every bank in the United States shut down before FDR took office. Something similar happened in October 1987, then again in September 1988, and once more throughout 2007-8. Income tax and prohibition confiscations played an important role in every one of these collapses, yet the evidence, widely reported in newpapers, is as invisible to economists today as the necessity to wash your hands was incomprehensible to doctors in 1846.
The upshot is that even capable and well informed researchers–people like Euan Wilson–can be taken in when a blind spot covers up the sequence of causality. Coercive confiscations by unproductive hands are what stop economic growth, and the bear market is simply the messenger of the coming change.