Obama Isn't Really Like Nixon... Not The Essential Richard Nixon

Obamabots have been upset with Paul Krugman lately. Yesterday's President Pushover didn't help much and last week's Obama/Nixon was probably the last straw with many of them, since it is the ultimate heresy to say aloud what is so obvious to anyone willing to open their eyes, namely that "Obama has governed as a moderate conservative, somewhat to the right of Richard Nixon." Not that it's doing Obama-- let alone the country-- any good at all.

[I]f you ask what Mitt Romney would probably be doing if he were in the White House and not trying desperately to convince his party that he shares its madness, it would look a lot like what Obama is doing.

There are, however, two crucial points to understand.

First, Obama gets no credit for his moderation, and never will. No matter how far right he moves, Republicans will move further right; and nothing he can do will keep them from denouncing him as a radical socialist.

Second, moderate conservatism isn’t working as a policy matter. As I’ve tried to tell everyone from the beginning of the Lesser Depression, a deeply depressed economy in which monetary policy is up against the zero lower bound turns the normal rules of policy upside down. We’re in a world in which conventional prudence is folly, in which playing it safe is extremely risky. And we have, alas, a conventionally prudent, play-it-safe president-- the kind of president who might have done fine in the 1990s, but not now.

Then today right-wing operative Bruce Bartlett penned a feature for the Fiscal Times, Barack Obama: The Democrats' Richard Nixon?. He posed it as a question but Barlett, a former George Bush and Ronald Reagan staffer, is convinced.

Liberals hoped that Obama would overturn conservative policies and launch a new era of government activism. Although Republicans routinely accuse him of being a socialist, an honest examination of his presidency must conclude that he has in fact been moderately conservative to exactly the same degree that Nixon was moderately liberal.

Here are a few examples of Obama's effective conservatism:

* His stimulus bill was half the size that his advisers thought necessary;

* He continued Bush’s war and national security policies without change and even retained Bush’s defense secretary;

* He put forward a health plan almost identical to those that had been supported by Republicans such as Mitt Romney in the recent past, pointedly rejecting the single-payer option favored by liberals;

* He caved to conservative demands that the Bush tax cuts be extended without getting any quid pro quo whatsoever;

*And in the past few weeks he has supported deficit reductions that go far beyond those offered by Republicans.

But when most Americans, especially Democrats, see comparisons with Nixon, "moderate conservatism" isn't what comes galloping to the fore. Disgraceful, criminal behavior is the touchstone. And that brings up something I've been meaning to share, something I've recently learned and something with no relation to Krugman or Obama. Why do these right-wingers have so much money compared to liberals? Keep in mind we're going to be talking about trillions of dollars worth of loot, not billions, TRILLIONS. I found an answer in The Nazi Hydra In America by Glen Yeadon. Have you ever heard of the Golden Lily? I hadn't, although after reading about it, I came across a series of YouTube videos on the topic, like this one:

In 1940, Prince Chichibu was appointed to head the Golden Lily. He and Takeda traveled throughout China and Southeast Asia, overseeing the looting and shipping the treasure back to Japan aboard hospital ships. By 1943, the United States submarine blockade of the home islands became effective. This forced Prince Chichibu to move his Golden Lily headquarters from Singapore to Luzon. He spent the next two and half years inventorying and hiding the treasure in a series of vaults, tunnels, and caves. The treasure was hidden in a total of 172 sites.78 The hope was Japan could arrange a cease-fire and be allowed to hang onto the Philippines as a territory and then recover the treasure at their leisure.

Besides using the Philippines to hide the treasure in the last year of the war, Japan hid gold at sea by scuttling ships. .. The Allies had made it clear that they intended to prosecute Japanese war criminals in the same manner as Nuremberg. However, unlike Germany, only a few generals and admirals were ever convicted. The archives in Japan had vanished. The United States took exclusive control over Japan, unlike the four zones in Germany. President Truman appointed MacArthur as the Supreme Commander. For six years after the surrender of Japan, MacArthur held virtually unchallenged power. As Supreme Commander he ignored the Far Eastern commission of eleven nations. MacArthur had the power to reform the country, but instead left it in the same hands that bombed Pearl Harbor. The only reform implemented was the successful land reform that went ahead before it could be blocked. Washington D.C. was at least partially responsible for the lack of reforms. The liberals in Washington wanted reform while the conservatives blocked all reform efforts. The conservative Democrats and the Republicans held Congress until the 1946 election when the Republicans regained a majority of seats, putting Congress solidly in the conservative camp.

There were great plans for reforms, such as the dissolution of the zaibatsu, conglomerates, banking reforms, and a new constitution as well as restitution payments to nations ravaged by Japan. None of these plans were ever implemented. MacArthur killed those plans and was soon backing away from punishment of war criminals. To protect the ruling elite, MacArthur soon banned all labor demonstrations and canceled the right of labor unions to strike.

Just as the denazification of Germany had been sabotaged, the democratization of Japan was sabotaged by MacArthur and his staff with additional help coming from the former ambassador to Japan, Joseph Grew, and former President Herbert Hoover. Grew had been ambassador to Japan appointed to the post by Hoover in 1932 and was acting secretary of state in 1945. His wife was a grand niece of Commodore Perry and her mother was a Cabot. Grew was from the top society of Boston and was deaf to those beneath his stature in society. Grew’s family had longtime ties to Asia. The Grews had been bankers, who underwrote the opium clipper ships of the 1800s.

Grew had started sabotaging the democratization of Japan during the war. During the war Grew held private talks with Japan’s ambassador to Switzerland and promised that the United States would not prosecute Hirohito and that he would be allowed to keep his throne. Such a promise was adamantly opposed by both the Roosevelt and the Truman administrations, which both called for unconditional surrender and prosecution of war criminals.

...Hoover’s and Grew’s plan to cleanse the emperor and the Japanese government of any war crimes had to be kept secret. There were still far too many, bitter war memories from Pearl Harbor, the Bataan death march, and Japanese forced labor camps. As late as 1945, Congress had voted that Hirohito should be tried as a war criminal. Fellers and another Grew protégé, Max Bishop, engineered the cleansing process. First, to discover the true extent of Hirohito’s guilt, they questioned Japanese officials and indicted war criminals in secret. Once all the facts had been assembled, they sanitized each incriminating bit of information by suborning witnesses. Before the trials could begin, several adverse witnesses conveniently died. American POWs on their way home were forced by US intelligence to sign documents forbidding them to talk about the harsh treatment they received at the hands of the Japanese.

While MacArthur was quietly trying to stop the trials, he received a blunt reminder from the Joint Chiefs to get serious about bringing the Emperor to trial. Despite such orders, MacArthur would not permit a trial of Hirohito. MacArthur even put Hirohito on the public relations circuit, showing him shaking hands and portraying him as a great pacifist. Behind the scenes, MacArthur and Fellers were castigating anyone not falling in line with the opinion that the war was the fault of the military.

...By 1952, when the occupation ended, all leftists had once again been purged and the conservatives were in control of Japan. The Emperor’s fortune still laid under the waters of Tokyo Bay and in other locations. The first recovery of a portion of the Golden Lily is known as the Santa Romana recovery. In the Philippines during the waning days of the war, Filipino guerillas observed the Japanese transporting heavy bronze cases and hiding them in a cave. An OSS major was with the group that observed the burial. After the treasure was hidden in the cave, the entrance was dynamited shut and concealed. The OSS agent reopened the cave and found the cases to contain gold. Following the war, between 1945 and 1948, the gold was recovered. The operation was known to Wiliam Donovan, MacArthur, Fellers, Edward Langsdale, and Herbert Hoover. Later, Allen Dulles knew of the operation. Donovan and Langsdale were assigned the recovery. No attempt was ever made to return the gold to its rightful heirs. Instead, the gold was deposited in 176 bank accounts in 42 different countries. It became the basis of the CIA off the books financing. This financing was done by issuing gold certificates to influential people, binding them to the CIA. One account in Langsdale’s name in the Geneva branch of Union Banque Suisse contained 20,000 metric tons of gold. The insiders squirreled some of the bullion away for private use. Documents confirm that one of the largest accounts was in the name of MacArthur.

Other documents indicated Herbert Hoover had an account containing $100 million in gold bullion. One can be certain that Hoover’s deep concern over Japan was based on his ability to smell a big payoff in gold from his previous experiences in China and Australia. The large holding of gold by Hoover was confirmed after his death, when his son sought out government approval to dispose of a large sum of gold bullion. The large accounts of MacArthur and Hoover suggest that the cleansing of Hirohito came at a high price.

Edwin Pauley, a rich oilman, had been dispatched to Japan to assess Japan’s ability to pay reparations. Pauly was informed of the $2 billion dollars of gold in Tokyo Bay shortly after his arrival in Japan. Yet, Pauley concluded Japan was in shambles and could not pay its fair share of expenses of the American occupation, let alone to anyone else’s rebuilding efforts. Largely due to Pauley’s assessment, Japan’s bill for reparations came to only one billion dollars. If such a sum had been distributed equally to the next of kin of the 20 million people who died as a result of Japan’s aggression, each would have received the paltry sum of $30. In the immediate post war scramble for reparations, the wealthy in Japan who had profited from the war and hid their profits submitted their own claim for reparations, totaling $5 billion. Many of these claims were paid.

...[C]onsiderable treasure has been recovered from the Golden Lily, ending up in the hands of those involved in intelligence and right wing causes. Was this gold put to private use or the use of the CIA? It’s most likely that a portion was skimmed for private use while the bulk of the remainder was used to fund clandestine CIA operations. It is interesting to note that those connected with the secret recoveries: Herbert Hoover, MacArthur, Allen Dulles, and others were the very ones that worked the hardest in derailing the reform of Japan and Nazi Germany. Their sole objective was to reestablish the cartels and get on with business as usual, and to hell with war crimes. Moreover, it seems certain that a large portion of the Nazi treasure and the Golden Lily was used in rebuilding Germany and Japan with the explicit approval of the right wing in America.

...Henry Stimson, Secretary of War, first proposed using gold recovered from the Nazis as a secret slush fund during the Roosevelt administration. The Nazis had already did the dirty work and re-smelted the gold, making it hard trace the gold's origin. Many of the owners had perished in the war and many of the pre-war governments had ceased to exist. With many of the eastern countries falling under the influence of the Soviet Union, returning any gold to these countries was out of the question with the cold warriors.

Stimson’s special assistants on this topic were John McCloy, Robert Lovett, Clark Clifford, and Robert Anderson. Both McCloy's and Lovett's backgrounds have been discussed in previous chapters. Anderson was a former Texas Republican legislator. In 1953, he was appointed Secretary of the Navy by President Eisenhower, and in 1954, Secretary of Defense. Some sources say he was appointed as Secretary of the Navy based solely on the need to move gold from the Philippines. In 1957, he was appointed Secretary of the Treasury. In 1987, he pled guilty to running an off shore bank after being caught up in the BCCI scandal. The same scandal also ensnared Clark Clifford.

The idea of the Black Eagle Trust was first discussed with the Allies in secret during July 1944, at Bretton Woods. This has been confirmed by CIA Deputy Director, Ray Cline, who as late as the 1990s has sought to control Japanese war booty sitting in the vaults of Citibank.

After briefing Truman, Stimson, Lovett, and others Lansdale returned to Tokyo with Anderson in November. From there MacArthur and Anderson accompanied Lansdale on a secret flight to Manila. Santy had by then already opened the sites and MacArthur and Anderson strolled down row after row of gold bullion stacked two meters tall. This was only the gold that had not reached Japan once the home islands were blockaded in the war.

Cline and others have confirmed that the gold recovered by Santy and Lansdale was covertly moved by ship to 176 accounts in 42 different countries. Truman had been informed that if such a large quantity of gold became public knowledge that the fixed $35 an ounce price would collapse. Other documents show large deposits of gold and platinum were made in various Swiss banks between 1945 and 1947.

Secrecy was vital to the success of the Black Eagle Trust. The United States declared Japan was broke from the very beginning. The United States elite lead by Herbert Hoover, wanted to maintain Japan as a staunch anticommunist state in the Far East. The Japanese elites were hard-core conservatives and alarmed by the communist threat. The most ardent of the anti-communist were the indicted war criminals. As noted earlier only a few Japanese war criminals were ever punished due to a large part of the interference by MacArthur in cleansing the Emperor of all crimes.

Such secrecy led to immediate abuses and the misleading of the American and Japanese people. Those most responsible for the war were left in power. The 1951, peace treaty between the Allies and Japan was greatly skewed by considerations for the Black Eagle Trust. To shield Japan from war reparations, John Foster Dulles secretly negotiated the treaty with three Japanese officials. One later became Prime Minister and served repeatedly as Minister of finance, Miyazawa Kiichi.

Article 14 of the peace treaty states as follows:

"It is recognized that Japan should pay reparations to the Allied Powers for the damage and suffering caused by it during the war. Nevertheless it is also recognized that the resources of Japan are not presently sufficient… the Allied Powers waive all reparations claims of the Allied Powers and their nationals arising out of any actions taken by Japan."

By signing the treaty, Allied countries waived all rights to any claims, including claims by their citizens and service men forced into slave labor by the Japanese warlords.

Because the Black Eagle Trust and the political actions funds that it has spawned remain off the books and invisible, the potential for abuse by falling into unscrupulous hands remain high to this day. In 1960, Vice President Nixon gave one of the largest funds, the M Fund, to the leaders of the Japanese Liberal Party in return for kickbacks to his election campaign. The fund, then valued at $35 billion and now estimated as worth over $500 billion, has served to keep the Liberal Party in power and effectively reduce politics in Japan to a one party dictator with a block on any meaningful reforms. This is readily evident in the troubled economic state of Japan. Even after sliding into an economic abyss fifteen years ago, Japan has still not addressed their economic policies in any meaningful manner. In effect, Nixon’s action has left Japan with an inept, corrupt and weak regime that has not even confronted its role in starting WWII.

Just sharin'. In fact, since I mentioned it above and it's totally awesome and you might have missed it, why don't I share that Elizabeth Drew feature from yesterday's NY Review of Book, What Were They Thinking?. You should read the whole thing; it might make you wish things were as black and white as they were in Nixon's day. But here's the first paragraph:

Someday people will look back and wonder, What were they thinking? Why, in the midst of a stalled recovery, with the economy fragile and job creation slowing to a trickle, did the nation’s leaders decide that the thing to do—in order to raise the debt limit, normally a routine matter—was to spend less money, making job creation all the more difficult? Many experts on the economy believe that the President has it backward: that focusing on growth and jobs is more urgent in the near term than cutting the deficit, even if such expenditures require borrowing. But that would go against Obama’s new self-portrait as a fiscally responsible centrist.