"There is always tear gas to take care of that"

F. William Engdahl offers a radical view of the underlying causes behind the Great Depression (among other events) in his book entitled Gods of Money: Wall Street and the Death of the American Century . In essence his thesis is that the precipitating factors largely centred on the failed attempt by powerful interests on Wall Street to break the stranglehold enjoyed by London as the world's financial hub through its pivotal role under the gold standard. Engdahl argues that when the UK government and the Bank of England abandoned the gold standard in the early 1930's, the ensuing damage to certain Wall Street power houses, especially the bank controlled by the heirs of J.P. Morgan which had enormous credit exposure to European sovereigns and banks, created a deflationary spiral, de-leveraging and credit contraction with seriously destructive consequences for the Main Street economy. As the author suggests, this bears some remarkable resemblances to the post 2008 financial landscape.

This de-everaging , in turn, inevitably led to mass unemployment and sowed the seeds for the emergence of the uglier side of nationalism and extreme ideologies which preceded World War II. A couple of sentences in particular in this context caught my eye and I shall repeat them below. But first by way of context Engdahl discusses the enhanced role of Bernard Baruch following the demise of the influence of the house of Morgan and how he became one of the most influential policy advisors in the early 1930's

(Baruch)...told a group of Democratic Party academic economists at the time that, "business must go through the wringer, and start over again"...When one economist present protested that such a laissez faire approach by government risked riots in the streets, Baruch snapped back, "There is always tear gas to take care of that."

It would have been good to have had a reference to the source for this comment from Engdahl, but, assuming that it is authentic, it can only remind one of the adage that the more things change the more they remain the same.