Forging America: My Campaign Manager is Roosevelt

Chapter 298 - 149: Surpassing Keynes

"You’re stuck on this problem, Leo."

Roosevelt’s voice rang out.

"I understand what you mean. You want to find more industrial demand, you want to recreate the industrial miracle of World War II."

"But don’t be naive."

"This isn’t 1941. There isn’t a world-sweeping war waiting for you to produce tanks and airplanes, nor is there a Marshall Plan waiting for you to rebuild Europe."

"In the United States today, demand is weak."

"You’re just the Mayor of Pittsburgh."

"You’re not the President. You can’t force people in California to buy your cement."

"Expanding outward, trying to capture a share of those already shrinking markets, is next to impossible for you right now."

"Since the doors to the outside are closed, you have to look inward."

"Right now, you can only stimulate domestic demand."

"And to stimulate domestic demand, there is only one crucial element."

Roosevelt paused, then uttered the word.

"Liquidity."

"Because you’re making a fundamental mistake."

"You see money as inventory."

Leo frowned. "Isn’t money inventory? It sits in a bank account. Every cent you spend is a cent gone."

"Wrong."

Roosevelt corrected him.

"In my eyes, money is flow."

"As long as it’s flowing, one US Dollar can become ten."

Roosevelt’s voice suddenly grew deep and rich, like a sound coming from an old radio, instantly enveloping Leo’s consciousness.

The surrounding scenery began to distort and fade.

The floor-to-ceiling windows of the Mayor’s Office vanished, and Leo found himself standing on a street lashed by a bitter wind.

「It was 1933.」

In Leo’s line of sight was a bank.

Its doors were shut tight, and hundreds, even thousands, of people were crowded at the entrance.

They wore tattered suits and fedoras, clutching their passbooks tightly as they pounded frantically on the doors.

"They’re panicking," Roosevelt’s voice sounded in Leo’s ear. "They want to withdraw their money and stuff it under their mattresses because they think it’s the only safe place for it."

The camera’s perspective suddenly pulled up, passing through the bank’s walls.

Leo saw the bank vault.

It was actually piled high with cash, but the bankers sat on the money, trembling with fear.

They didn’t dare to lend the money out. They were afraid of factories going bankrupt, of farmers defaulting on their debts. They were afraid that once the money was lent out, it would never come back.

So, they chose to lock their vaults tight.

The scene shifted again, moving to a massive steel mill.

The towering smokestacks were lifeless, the giant flywheels motionless.

The machinery wasn’t broken, and raw materials were piled up in the warehouses.

The factory owner stood in his office, looking at the job seekers lined up outside his window, but could only shake his head in helplessness.

Because the banks wouldn’t give him a loan, he had no money to buy coal to start the machines, nor any money to pay his workers.

And the workers?

Leo saw the men standing in long lines on the street for soup kitchen handouts.

They were able-bodied and eager to work.

But with no wages, they couldn’t afford bread, clothes, or housing.

The bakeries closed because no one was buying bread; the textile mills shut down because no one was buying clothes.

"Do you understand now, Leo?"

Roosevelt’s voice was grim.

"This is a form of cyclical necrosis."

"This country has the most fertile land, the most advanced machines, and the most diligent workers in the world. The resources are there, and so is the demand."

"But the blood vessels connecting it all—the circulation of money—had frozen."

"Bankers clutched their purses in fear; factory owners halted production for lack of funds; workers, unemployed, couldn’t consume; and shrinking consumption caused more factories to fail, making banks even less willing to lend."

"That was the deadlock of 1933. The heart of the entire economy had stopped beating. The blood had coagulated in its veins, and you could only watch as the body slowly rotted away."

「The scene changed.」

An office building in Washington appeared before Leo’s eyes.

The atmosphere there was completely different.

Typewriters went CLACKETY-CLACK, phones rang off the hook, and a group of energetic people were stamping check after check.

"To jump-start that heart, I created an organization."

"The RFC, the Recovery Financial Company."

"It looked like a bank, but it wasn’t a bank. It was a syringe for injecting state capital."

"Wall Street was dead at the time. Private capital was hiding in its bomb shelter, refusing to come out. So I had the government become the biggest banker."

"We directly leveraged the credit of the national treasury."

In the vision, with the injection of RFC funds, the lifeless steel mills once again belched black smoke, the bank doors reopened, and workers, with wages in hand, walked into the shops.

The gears were forced to turn.

"That was the problem of that era, Leo."

The black-and-white images of the surroundings gradually dissipated. Color returned to Leo’s vision, and he was back in his Pittsburgh office.

Roosevelt summarized.

"The problem back then was systemic blood coagulation—a cardiac arrest. That’s why I needed a powerful machine like the RFC to act as an external heart-lung machine, to pump blood in place of the heart."

"But the situation in Pittsburgh today is different."

"The United States isn’t in a Great Depression now. Wall Street is still greedy and active, and global capital is still flowing."

"Pittsburgh’s problem is that, due to industrial decline and a low credit rating, the city has become a gangrenous part of the body."

"Blood flows to other parts of the body, but it just can’t flow into Pittsburgh. Wall Street’s money would rather speculate on Bitcoin in Silicon Valley than flow into the factories here."

"The external blood transfusion lines are blocked."