Bank holidays and martial law

As long as we’re thinking about 2009 predictions this week, let’s pause to explore a couple of things bouncing around the Internet as we approach the new year.

On a lark, I entered the following search terms in Google News: “Obama” and “bank holiday.” Hey, if establishment media are keen to draw the FDR parallels, we might as well go all the way. Not a moment to waste in contemplating this, either; FDR called his bank holiday the day after inauguration.

The Google News results: 10 hits. And few of them would I count as a genuine indicator of what might be in the offing: Letters to the editor in small-town newspapers, a commentary by paleoconservative Devvy Kidd laced with asides about immigrants and Obama’s birth certificate. The editorial board of the Wilmington (Delaware) News-Journal offers a sober warning that much New Deal policy, including the bank holiday, was made up on the fly, “more excited motion than deliberate thought.”

The omen, if there is one, is to be found in that most wonkish of publications, Congressional Quarterly, in a piece comparing the Hoover-Roosevelt interregnum to the Bush-Obama one:

Obama’s refusal to assume responsibility for any action before becoming president is reminiscent of Roosevelt, who refused to join Hoover during his final days in office in calling for a bank holiday to halt withdrawals of gold and currency. But one day after taking the oath of office, Roosevelt put his intentions into action by issuing an unprecedented edict that halted withdrawals for four days.

I guess it’s worth noting that in the present day, neither man is talking bank holiday. Not publicly, anyway.

Not much to go on here in terms of drawing up an action plan. You’re on your own deciding what to do “just in case.”

And speaking of “just in case,” we have an article from the Phoenix Business Journal that does a bang-up job of “localizing” a national story, only this national story hadn’t crossed my awareness till this morning. I excerpt at length:

A new report by the U.S. Army War College talks about the possibility of Pentagon resources and troops being used should the economic crisis lead to civil unrest, such as protests against businesses and government or runs on beleaguered banks.

“Widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security,” said the War College report.

The study says economic collapse, terrorism and loss of legal order are among possible domestic shocks that might require military action within the U.S.

International Monetary Fund Managing Director Dominique Strauss-Kahn warned Wednesday of economy-related riots and unrest in various global markets if the financial crisis is not addressed and lower-income households are hurt by credit constraints and rising unemployment.

U.S. Sen. James Inhofe, R-Okla., and U.S. Rep. Brad Sherman, D-Calif., both said U.S. Treasury Secretary Henry Paulson brought up a worst-case scenario as he pushed for the Wall Street bailout in September. Paulson, former Goldman Sachs CEO, said that might even require a declaration of martial law, the two noted.

State and local police in Arizona say they have broad plans to deal with social unrest, including trouble resulting from economic distress. The security and police agencies declined to give specifics, but said they would employ existing and generalized emergency responses to civil unrest that arises for any reason.

“The Phoenix Police Department is not expecting any civil unrest at this time, but we always train to prepare for any civil unrest issue. We have a Tactical Response Unit that trains continually and has deployed on many occasions for any potential civil unrest issue,” said Phoenix Police spokesman Andy Hill.

“We have well established plans in place for such civil unrest,” said Scottsdale Police spokesman Mark Clark.

Clark, Hill and other local police officials said the region did plenty of planning and emergency management training for the Super Bowl in February in Glendale.

“We’re prepared,” said Maricopa County Sheriff Deputy Chief Dave Trombi citing his office’s past dealings with immigration marches and major events.

Hats off to the reporter, who really did his homework on this story. First of all, he was among the first reporters anywhere to write about this Army War College report; the only earlier mention I can find of is from a low-budget right-wing daily in Philadelphia. Second, he knew about Hank Paulson’s threats that martial law would ensue if the bailout bill wasn’t passed (we reported both the threat and the fact it was Paulson who delivered it). And finally, he got voluminous reaction from local law enforcement, who weren’t aware of the Army War College report, but who could nonetheless speak to their own emergency plans. I don’t doubt for a minute that Maricopa County’s militaristic Sheriff Joe Arpaio is, as the spokesman says, “prepared.”

Even if martial law or a bank holiday aren’t in the offing, more conventional scenarios are scary enough — especially after everything we’ve been through since September. Are you “prepared”?

The Daily Reckoning