Welcome to the blog of writer and musician Andrew Martin. Here I'll post original photographs and observations as I encounter the history and culture of the San Fernando Valley, the City of the Angels, Alta California and the far-flung Pacific Rim… but mostly the Valley.
Click above, or below, to read Eric Mann’s fascinating article
I’ve been looking for the nails in Van Nuys’s coffin as far back and away as Iroquois Schenectady; one might have looked a bit closer in time and space. This morning I found a great article on http://counterpunch.org about how the hard-working middle-class of the Valley fought for their very existence in 1982 by insisting that the common wealth of the community was the point of enterprise, and its needs are more important than any pencil-head corporation’s balance-sheet shenanigans.
GM’s Van Nuys Assembly opened in 1950 and employed thousands of United Auto Workers until 1992, when the plant closed. Management had planned to shut down a decade earlier, but the Valley community supported the union, our local politicians supported the union, and one of Studio City’s greatest union men ever, Ed Asner (RIP) was turned like a Lou Grant bulldog on GM’s shiny-balloon CEO:
Eric Mann goes on to describe what sounds like a barnburner of a bargaining session:
The decade that began with chants that “the people united can never be defeated” ended, of course, with a great sucking sound.
This past weekend when I clicked “publish” on my blog about the origin of the Gold Standard, I opened the news headlines and was amazed to read about a Golden Anniversary: it was 50 years ago, on August 15, 1971, that Pres. Nixon came on TV to announce that the Universe had changed. The dollar would no longer be backed by the Gold Standard. I unpublished, and rewrote to mark the event.
“Ooh, Archie, Wage, Price, Rent Freezes Announced?” “Stifle, Edith, he’s no El Presidente, he’s just sticking it to the You-know-who-skis”.
Nixon’s forgotten bombshell came despite the Gold Standard having been staunch Republican policy for 100 years, and in contradiction to the library of Republican economic tracts and editorials and sermons promising ruination should we leave the Gold Standard, and to boot, he announced it as an imperial fait accompli…so, wow, goodbye to all this:
Nixon is correctly regarded as small-minded, anti-intellectual, bigoted, regressive and paranoid. So it is astonishing that, though he considered them maggots, he actually seems to have read the reports sent up by the weak-kneed pink Ivy League effetes staffing his cabinet offices. He perceived that with hard money, the Main Street economy was in imminent danger of a crash, a slump, and then a slippery, never-ending deflation. [Patient Reader, take that bemused look off your face, economic troubles for the masses were really a big worry to him. Back then, under the New Deal, and having fought three wars in succession, we hadn’t known hard times for a generation. Nixon worried about bringing home an army of angry, dope-smoking veterans exposed to Godless Communism. If the country had no jobs for them, no churn, no frontier, no growth, and no future, his historical page would be a wet crumpled-up wash rag on the john floor of the Library of Congress’s remaindered book jumble sale.] Nixon’s base were Christian Main Street cloth coat conservatives, not the worldly Rockefeller wing. Bankers existed, in the world of downtown Van Nuys, to make car loans and give enough interest on the savings account so that a man of 24 had enough saved already to buy a low-mortgage bungalow for his pregnant bride. And too often, they wouldn’t do even that. Nixon didn’t go to Yale and showed it now; he thought the Old Money was betraying America by hedging their American wealth in gold, and limiting America’s future growth. Nixon looked past the aura — the mystical, Calvinistic, 17th century alchemical absolutist purity of the Gold Standard — and saw the Witch of the East. He dropped the house. William Jennings Bryan was right. The one-earner + one-shopper + two-car passbook-saving Malthusian-positive family, his base, had been crucified upon a Cross of Gold.
Four-score years before, and more, the Republicans caricatured currency reformers as heretical zealots, and equated leaving the Gold Standard with trampling on the eternal law of God. In the 19th century down to the 1970s, it was the Bank of England and the Banque Rothschild that was the vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smelled like gold. This anti-Gold Standard cartoon from the Populist Era is remarkable, for Nixon apparently came to this View.
“Prosperity without war requires action on three fronts. We must create more and better jobs. We must stop the rise in the cost of living. We must protect the dollar from the attacks of international speculators. [Slyly dog-whistling to voters: the “You-know-who-skis.”] We are going to take action. We are going to move forward to a new prosperity without war that befits a great people, all together, and along a broad front.” — From Nixon’s Saturday, August 15 1971 broadcast
Nixon became convinced a larger money supply would help achieve conditions for the marvelous velocity of money effect of full employment. This would need planning and management, and strong Federal control. But it was not socialism, if it was managed by a guy like him.
Pres. Roosevelt, in 1933 during the Depression [caused by the “Lords of Finance: The Bankers Who Broke The World,” Ahamed, Liaquat Penguin, 2009] had already faced down the gold-bugs by doubling down on gold.The New Deal aggressively moved to buy, hoard, smuggle in, and prop up the gold dollar by counter-intuitively making dollars not convertible to gold. Gold was recalled from circulation, wedding rings excepted, and citizens were given back paper currency at a set price. The U.S. Treasury buried them in Fort Knox and made it illegal for Americans to buy gold coins at all. This earned the howls and hatred of conservatives for being a class traitor. But Roosevelt intended to maximize the amount of gold available to the government to back the paper he needed to prime the pump. 40 years later, in a sense, Nixon was just making the New Deal official: not only was gold not convertible, but the amount of dollars issued into the economy would henceforth bear no relationship whatsoever with the amount, or price, of gold in the world’s vaults.
It took a Quaker Siegfried from California to finally slay the dragon of the Rhinegold. World governments were marshaled into the scheme, the Fed banks and Treasury Dept. and International Settlements systems were upgraded to IBM punch cards, and by mid 1973, the apparatus for the petrodollar was up and running. So, while the Brady Bunch went to Hawaii, Nixon’s mandarins were placing the dollar in an intricate “basket of currencies and commodities” (gold included, and oil); all balanced against each other in the new global currency market. That sounds like a Round Table of equals, but in reality, it was dollar imperialism. The keystone role of the dollar as the world’s trade coin was mortared in place with a kind of agio — an extra premium value over other currency. This was guaranteed because of the agreement that the worldoil market would be denominated only in U.S. dollars. This means that before any other country gets to fill their gas tank, even with their own oil, their money has to first stop at the U.S. Temple to visit the moneychangers. This agiopetroleo, which few American citizens even know exists, is the source of Original Sin: American Exceptionalism. It floods our economy with billions and billions of unearned dollars’ worth of purchasing power. If another country gets rich by developing, if they use more oil to fuel their growth, their rise isn’t “eating our lunch” at all! It only helps the U.S. economy rise higher still above them! It’s a neat trick, but it…set the planet on fire with burning oil, wars and greed and it has baked the Tree of Life to certain extinction right down to the roots, within my lifetime. It mightn’t have been that way.
Nixon seemed to want to harness the agio petroleo to finance universal health care, up-grade the South to modernize and equalize our racist economy, boom the starter-furniture showrooms once more, and set the clean-shaving barbers in Van Nuys abustle with jovial backslapping and clean racist jokes. There is good reason to believe Nixon would be appalled by what happened: plastic 24% credit traps and Quantitative Easing and underwater mortgages and medical bankruptcies and off-shoring and speculative ballooning of asset prices and austerity and starving the public sector and endless “Disaster Capitalism” wars and baking the Middle Class to certain extinction right down to the roots, within my lifetime.
If you don’t remember the Universe changing to a fairer economy in the early ‘70s, you’re not alone. You DO remember why you don’t remember, though — you just have never thought about why Islamic terrorism appeared out of nowhere at just this time.
1972 — OPEC Nations Oil Ministers meet in Vienna. [yech — why didn’t they book at the Sacher?]
The OPEC nations, who already saw the agio as a slap in the face, a grabby U.S. “tax” biting into their profits, had a collective conniption when the U.S. turned around and quite brazenly, considering Nixon’s audible anti-Semitic asides, shipped massive armaments to reinforce Fortress Israel. They were incensed that the petrodollars Nixon was stealing from them, he was using to kill them. [In their culture that’s wrong.] In 1972 they picked up their oil, in 1973 they took it home. The Oil Embargo caused a world-wide run for the last drops of gas. Since these fumes now had to be bought in the new petrodollars, it caused in turn a run on the U.S. dollar. That in turn caused the value of the U.S. dollar to soar 40% in the new currency markets. Instantly, every American product all over the world was 40% more expensive. Instantly, every consumer in the world, especially Americans, stopped buying American anything.
Who even remembered we had gone off the Gold Standard? Armageddon was on Main Street’s mind by 1973, not currency. Nixon, itching to try out his new shiny, whirring Modern Middle-Class Money Machine, never got his sweaty hands near the plastic-coated controls. Somebody came along and threw a bucket of Watergate on him, and he melted, melted, what a world…
Ah, what might have been. Clean water, clean air, modern jobs, local control, more people working fewer hours for more pay. Capitalism had to deliver for the little guy. Loose money, Nixon believed, would build society from the middle. Instead:
NEXT IN PART FOUR OF VAN NUYS — A VIEWING: The Van Nuys family in Old New York
“One touch of alchemy transmutes our Age to Gold Would you be rich and free, then do as you are told No man will want for food, nor ditto any wife All hail the good the pure the regimented life The Honeymoon of Time, forever I proclaim The Apex of our Clime, for burgher and for dame…”
— Maxwell Anderson, channeling the dictatorial Peter Stuyvesant, in “Knickerbocker Holiday” (1938)
Bank of Amsterdam, by Pieter Jansz. Saenredam
The Bank of Amsterdam achieved a miracle of modernity when it opened in 1609 by simply paying a salary to a dozen alchemists — Alstublieftmijnheer! We prefer ‘metallurgical assayers!’ They sat in the vault purity-proofing every coin that came over the counter, and reducing every pocketful of gold rubble handed over by a grinning cabin boy just returned from an adventure with pirates on the Spanish Main.
“Portrait Of The Assayer Hans van Hogendorp,”by Thomas de Keyser, 1636. Note the magic wand; the assayer will use it to probe your deposit’s purity.
The dwarves with pointy beards gave you a certificate, and took your strongbox away on a little cart down to their fiery realm. There they separated the gold and silver from the dross, and re-coined the precious metals with their own stamp. This defined purity put a demand on Amsterdam’s coins — and more importantly, upon the fully-backed paper that redeemed the deposit after six months’ time, dated on the certificate. You had to come back at least once with your certificate to check in; if not, your deposit was forfeit. Thus you had to stay in Mokum (wat leuk!) or come back soon.
The Jolly Toper, by Frans Hals
If your strongbox full of Polish zlotys was divined by van Hogendorp or one of his colleagues to be 35% lead and 10% tin, whoever redeemed the note you signed over got free paper or, for a fee, good gold Amsterdam premium coins — BUT, subtracting the 45% discount for the debasement, and a handling fee if the customer insisted on coins and another fee for the B. of A. agio, kind of badge clipped to currency giving an extra unit of value — one guilder plus, like the English guinea, or a baker’s dozen. In other words, your goldGod gold really was better than everyone else’s. The Bank gave everybody a reason to turn in bad coins of doubtful value for certificates of good value, simply by being honest, and it worked. For the first time, the whole world had a money standard — nobody ever had to bite an Amsterdam gold piece, or try to stretch a rubber note. However rich or poor you actually were, nowyou knew it. Oddly, that in itself had value.
If a businessman wanted to avoid cheats and swindles, counterfeiting and clipping, bad debts, forged letters of credit, and fly-by-night pawn brokers styled as bankers, he could do business in Amsterdam, or at least using Bank of A-dam paper. The bank couldn’t fail because it didn’t hold fractional reserves, and it didn’t make high-pressure loans to well-connected friends. This is why the paper deposit slips flew all over Europe as currency, achieving that elusive condition for a sudden ballooning of wealth, that can result from harnessing the velocity of money. Anyone the paper was signed to, had that money, at that date. Therefore a debt-ridden cavalier could pass it right on to his landlady and she to the butcher, etc. The mere presence of the note in the cavalier’s purse as he clomped up the stairs to his garret, allowed all his creditors in the community to relax and mark paid each others’ debts on the spot. One day, sure, one of them in the community would cash the actual note, and the money would be there, so it doesn’t need to be here now. For the most part the actual gold, in stamped bullion and coin, stayed down in the vault.
Essentially the Gold Standard was put in place to eliminate gold from circulation. While the gold was buried safely, its ancient mana, its plenipotentia, was all there in the note, a solemn pledge and Covenant, in plain black and white. Silver was systematically re-packaged for export to Batavia, since the Chinese wouldn’t trade in anything else. This in and of itself helped prop up the price of gold in the West, since it all passed through the Bank.
Merchant and Banker Josef Coymans, by Frans Hals
But gold and silver’s age-old burdens, inconveniences… sins…the emotionalism, the Medieval dragon-ish lusts, the temptation to cutthroats, the awful clink of 30 pieces in Judas’s hand, the schlepping, the buried pirates’ hoard, the confiscation by petty tyrants, the horror of refugees stuffing gold in bodily cavities while fleeing across borders, “bad money driving out good,” “mine mine mine!”— that corruption was buried with it.
In the foggy Dutch dawn of Capitalism — the mirror of Calvinism — the worldly husk of money was purged away. The dross, the base shell of money, was interred, and its value resurrected as spirit. Doubt fell to certainty and the peace that passeth understanding. Ideal potency is yours, in the future. Since money was now a thing that could be shown to be “worth it,” potentially pure and ideal, no hanky-panky, it could now be considered Godly. Nobody was being cheated by the economic order: if you played by the rules you prospered; if you didn’t you were still given some credit, which is better than you deserved. You could have been righteous, you could have controlled your circumstances, you could have been frugal, the Calvinists scolded, as they always do, with only a silent shrug in the street. You could have done business in Amsterdam. You could have coughed up to buy my insurance on that sunken ship full of beaver pelts. You could’ve opened that coffee-house on the Spui, now who can afford it? You could have gone to Leiden University, but you hated to read. Why should God give any of the pure, perfect power of the Tears of the Sun to a slip-shod like you? You could have bought the whole block on the canal at the bottom of the market, and then I would be paying you a fortune in rent for that leaky cold-water garret six floors up in the gable. Predestination: Buy you a drink? If you weren’t so lazy and profligate at the taverns, you would’ve had striving parents who knew the value of a guilder, and been a sober and worthy heir to their righteous fortune, and you wouldn’t be drinking away your misery in a tavern at all.. But you are, Blaise, you are.
Adriaen Brouwer, The Bitter Potion
This was the Rise of the Gold Standard. Next: the Fall of the Gold Standard. Then, at last Patient Reader, our Balloon Route Tour will take us back to Van Nuys. Betcha can’t wait.
The Valley Village View 