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Perhaps the most alarming slice of twentieth-century U.S. political history is virtually unknown to the general public, including most scholars of American history.

In 1934 a special Congressional committee was appointed to conduct an investigation of a possible planned coup intended to topple the administration of President Franklin D. Roosevelt and replace it with a government modelled on the policies of Adolf Hitler and Benito Mussolini. The shocking results of the investigation were promptly scotched and stashed in the National Archives. While the coup attempt was reported at the time in a few newspapers, including The New York Times, the story disappeared from public memory shortly after the Congressional findings were made available to president Roosevelt. It was the recent release from the Archives of the Congressional report that prompted the BBC and Horton commentaries.

The Congressional committee had discovered that some of the foremost members of the economic elite, many of them household names at the time, had indeed hatched a meticulously detailed and massively funded plot to effect a fascist coup in America. The plotters represented prominent families – Rockefeller, Mellon, Pew, enterprises like Morgan, Dupont, Pew, Remington, Anaconda, Bethlehem and Goodyear, along with the owners of Bird’s Eye, Maxwell House and Heinz. Totaling about twenty four major businessmen and Wall Street financiers, they planned to assemble a private army of half a million men, composed largely of unemployed veterans. These troops would both constitute the armed force behind the coup and defeat any resistance this in-house revolution might generate. The economic elite would provide the material resources required to sustain the new government.

The plotters hoped that widespread working-class discouragement at the stubborn persistence of the Great Depression would have sufficiently disenchanted the masses with FDR’s policies to make the coup an easy ride. And they were appalled at Roosevelt’s willingness after 1933 to initiate economic policies that economists and businessmen considered dangerously Leftist departures from economic orthodoxy. Only a fascist-style government, they thought, could enforce the kind of economic “discipline” that would reverse the Great Depression and restore profits.

Interestingly, it was a military man, Major General Smedley D. Butler*, assigned the task of raising the 500,000-man army, who blew the whistle after uncovering the details of the operation he was asked to lead. FDR was thus able to nip the plot in the bud.

The president might have used the occasion to alert the public to the anti-democratic impulses of a major segment of the capitalist class. But this would only have bolstered the fortunes of Communist, Socialist and other anti-capitalist political tendencies here, which were already gaining some ground among artists, intellectuals and a surprising number of working people. It is well known that Hollywood screenwriting in the 1930s was replete with Communist-inspired sentiment.

And we must not forget that FDR was himself a (somewhat renegade) member of the very class that would have toppled him. While FDR was open to watered-down Keynesian policies in a way that very few of his class comrades were, his commitment (like Keynes’s) to the “free enterprise” system was unconditional. He had no interest in publicizing a plot that might constitute a public-relations victory for anti-capitalist politics. He therefore refused to out the plotters, and sought no punitive measures against them. In the end, class solidarity carried the day for Roosevelt. The Congressional committee cooperated by refusing to reveal the names of many of the key plotters.

Thus, fascist tendencies gestating deep within the culture of the U.S. ruling class were effectively left to develop unhindered by mass political mobilization.

Might this grisly episode have important implications for our understanding of the current political moment? One may be inclined to think so on the basis of the fact that one of the architects of the plot was one Prescott Bush, grandfather of George W. Bush. Bush, along with many other big businessmen, had maintained friendly relations in 1933 and 1934 with the new German government of Chancellor Adolf Hitler, and was designated to form for his class conspirators a working relationship with that government.

While I highly recommend Bush-bashing, the implications of this unsettling piece of history for contemporary politics run deeper than many –especially soi disant “oppositional” liberals- would like to think. There is the temptation to point triumphantly to George W. Bush’s commitment to the irrelevance of the Constitution, his corresponding contempt for hitherto taken-for-granted fundamental human rights, his Hobbesian notion of unbridled sovereignty, his militarized notion of political power – there is the temptation to regard these fascist elements as the most significant contemporary remnant of the 1934 conspiracy.

But no less important is the utter absence in 1934 of liberal attempts to educate the public to, and mobilize the population against, the fascist threat. FDR stood down.

Although Rooseveltian/New Deal liberalism is dead, contemporary Democrats do sustain one of FDR’s least seemly qualities, namely his refusal to encourage effective mass opposition to fascist and imperialist politics. John Kerry boasted of having contributed to the drafting of the Patriot Act. And in the first round of legislation regarding continued funding of the war in Iraq, after the 2006 elections gave the Democrats a majority in the House and the Senate, the Democrats gave Bush everything he wanted. All the major presidentail contenders of both parties support a permanent U.S. presence in Iraq. None has repudiated the conceit that Uncle Sam is the permanent global hegemon. And most importantly, no mainstream Democrat has repudiated the Neoliberal Consensus, the notion that the market should be left to operate as “freely” as the public can be persuaded to allow it to act, and, crucially, that this is a model that should be imposed globally through the power of the U.S. working in tandem with such global institutions as the IMF, the World Bank and the WTO.

To the extent that this policy has been successful, inequalities between national classes and between the global North and South have widened dramatically since the decline of the Keynesian consensus in the mid-1970s. Since the Mondale candidacy, no Democrat has had a full-employment plank in his presidential platform. The median wage has been in secular decline since 1973, and the distribution of national income between capital and labor has not been as skewed toward capital since the Great Depression. But no Democrat has made a major issue of this.

These tendencies toward ever-widening inequality and the increasing immiseration of the working population will surely be exacerbated by the deepening slow-motion recession (depression?) that is certain to follow the unfolding financial meltdown. These conditions, and the deep resentment felt by masses of working people toward the lords of Wall Street and their political henchpersons, threaten to generate social “instability” in the form of increasing crime rates and a host of direct and indirect forms of resistance to the claimed legitimacy of the political order. The emergence of what Mike Whitney has called “soup kitchen America” requires a response from our rulers. And they are prepared with (literally) fascist legislation already in place for situations just like this.

Developments over the last day or two in connection with Monday’s House rejection of the bailout package for Wall Street indicate that allegations of fascist tendencies in U.S. political culture are in these times not to be taken lightly. Influential voices in the U.S. media have lamented the susceptability of the political leadership to the will of the people. On Tuesday the Washington Post ran a piece by Michael Gerson, Bush’s former speechwriter, complaining that “It is now clear that American political elites have lost the ability to quickly respond to a national challenge by imposing their collective will.” The same day Rupert Murdoch’s Times of London headlined a column “Congress is the Best Advert For Dictatorship.” And yesterday Rep. Brad Sherman (D-California), who voted against the bailout bill, was quoted in the Los Angeles Times as saying “I’ve seen members turn to each other and say if we don’t pass this bill, we’re going to have martial law in the United States.” “going to have”? We’ve already got it, at least on the books.

On October 17, 2006, Bush signed three Acts that instantly transformed the republic into a police state. The John Warner Defense Authorization Act (DAA) effectively repeals the 1878 Posse Comitatus Act which prohibits military operations directed against the American people. The DAA declares that “the president may employ the armed forces to restore public order and enforce the laws of the United States when…[among other reasons]… the President determines that domestic violence has occurred to such an extent thet the constituted authorities of the State or possession are incapable of (or “refuse” or “fail in”) maintaining public order — in order to suppress, in any State, any insurrection, domestic violence, unlawful combination, or conspiracy.”

There is of course nothing in the legislation that specifies what precisely may count as “insurrection, domestic violence, unlawful combination, or conspiracy.” The lone Democrat to express reservations about DAA was Senator Patrick Leahy (D-Vermont), who entered into the Congressional Record that the Act “[makes] it easier for the president to declare martial law… [T]he implications of changing the [Posse Comitatus] Act are enormous…Using the military for law enforcement goes against one of the founding tenets of our democracy.” Nothing was made of Leahy’s protestations by complicit Democrats.

The Military Commissions Act permits the President, in order to “suppress public disorder”, to assign military troops anywhere in the United States in order to trump the authority of state-based National Guard units, and without the consent of the governer.

Finally, the National Defense Authorization Act allows the President to declare martial law, dispatch National Guard units around the country and authorize military action against the domestic population should His Majesty identify a “national emergency”.

Liberal Democrats, upon being apprised of these developments (of which the vast majority are ignorant) will declare themselves shocked, shocked that Bush has “declared himself dictator”. But Bush has not signed legislation which expires when he passes from office. Every future President will have these powers. Would President Obama seek to erase these abominations? Don’t bet on it. Obama has not jettisoned the entire legacy of FDR. Like Roosevelt, Obama will stand down.

· Butler underwent a major political epiphany shortly before his retirement from the Marine Corps in 1931. In that same year, he addressed an American Legion convention on his assessment of his career. His audience was stunned by his reflections: “I spent 33 years being a high-class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer for capitalism…. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912. I helped make Mexico and especially Tampico safe for American oil interests inb 1916. I brought light to the Dominican Republic for American sugar interests in 1916. I helped make Haiti and Cuba a decent place for the National City boys to collect revenue in. I helped in the rape of half a dozen Central American republics for the benefit of Wall Street.” It remains a mystery why the conspirators would approach this man. But they did.

ALAN NASSER is professor emeritus of Political Economy and Philosophy at The Evergreen State College.