The Blitz of London

As the citizens of London brush themselves off, and try to return to their normal lives after yesterday’s terrorist attacks, Bill Bonner reminds us that this isn’t the first time our British friends have been through this…

We have never killed anyone. But we read the obituaries with keen interest and satisfaction. First, we are pleased not to find ourselves listed among the day’s casualties. Second, because the goners always leave behind a little trace of humor or enlightenment for anyone who takes the trouble to pick it up.

That is especially the case in the London papers. Hardly a day goes by that some antique from the Great War or WWI doesn’t finally bite the dust. Many of them, we find, lived through the Blitz of London, 1940-1941, and went on to fight in romantic places – Malaya, Katmandu, El Alamein – all the distant outposts of what was then the world’s leading superpower…and its dominant empire. What happened to them next must have been a letdown. They came back dazed and glad to be alive. Then, the homeland pinned medals on their chests and sent them out to take up jobs selling insurance or elaborating plans for milk distribution.

Compared to what they had been through in the war years, it must have been boring. Maybe that is why so many people retain a fond memory for the war years – especially the "Battle of Britain," which Churchill had said was its "finest hour."

But we are more and more persuaded that it is not ideas that rule the world, but the world that rules a man’s ideas. When Britain was at war, the English believed it was their duty to fight…and die…if that is what it came to. When the war was over, they saw their duties otherwise; now was the time to put on suits and fight the good fight in boardrooms and factories. Each was satisfying its own way, we suppose.

Yesterday, in London, people remembered the "finest hour." They recalled how they steadfast and calm they had been. They remembered, too, how they had prevailed, without much help. But there is a world of difference between the Blitz and yesterday’s bombings.

We recall the Blitz episode:

Britain expected a German attack. The Brits had declared war on Germany in September, 1939; they should have expected something. In preparation, air raid systems were set up. Many children were sent out of the city, and as much as 13% of the adult population decided it was time to get out of town. The rest went about their business.

But nothing happened. Londoners started coming back into town. Then, France capitulated – Churchill had flown to Paris in a desperate move to try to get the French to keep fighting, but the frogs knew they were beaten and wisely gave up.

Then, Germany turned its attentions to England. At first, the Luftwaffe targeted the RAF, in the summer of 1940, with strikes against airfields, such as Biggin Hill in the south of England and other strategic such as aircraft factories. Britain had few experienced pilots, but it had a remarkable airplane, the Spitfire. Together they managed to hold on, inspiring Churchill’s famous remark: "Never in the field of human conflict was so much owed by so many to so few."

London Blitz: Beginning the Attack on London

Still, the RAF was losing pilots and planes faster than they could be replaced. Its air defenses were in danger of collapsing when, at the last moment, the Germans switched their attacks to London. The reason for the change was probably a combination of mistake and stupidity, the first on the part of a German pilot, the second on the part of Hitler himself. The first bombs, dropped on the City of London, on the 25th of August, 1940, were probably intended for the aircraft factories in the south of the city. But the British took it as a cue for a daring bombing raid on Germany – largely intended to lift British morale, as well as let the Germans know they were not entirely immune. The unintended consequence was to cause the Fuhrer to lose his wits and begin bombing London regularly, which gave the RAF time to recover.

The Germans began by pounding the industrial areas of London in the East End. The first major raid occurred on the 7th of September, killing 430 people. A first, the Luftwaffe came in broad daylight, but then switched to night raids after they began losing bombers to Britain’s anti-aircraft defenses. London turned off its lights to make it harder for the attackers and tried a number of techniques to bring down the bombers; none worked very well. Soon, the bombs were falling all over London, including on Buckingham Palace. A typical raid counted 100 to 200 planes, with hundreds of bombs – including incendiaries – falling on the city. The raids came almost every night, with hundreds of casualties, and billions in property damage. London’s infrastructure – roads, railways, water, sewage, power – was blown up and under constant repair.

Remarkably, the longer the raids went on, the more people took them for granted and went about their business. People stopped going into air raid shelters – only about 4% of the population ever went into them. Instead, they went to movie theatres and enjoyed the shows – even as bombs fell on the city. Finally, in November 1940, the raids tailed off.

Then, the raids became less frequent, but no less deadly. On the 29th of December, incendiary bombs started more than 1,400 fires, one of which covered more than half a square mile. A huge raid in May of the following year brought 550 German bombers over London, dropping 700 tons of bombs and thousands of incendiaries. This was probably the worst raid of the entire war, killing nearly 1500 people. In addition, the Chamber of the House of Commons (Parliament) was destroyed. The House of Lords, Westminster Abbey, Westminster Hall, St James’s Palace and Lambeth Palace were blasted. So were 14 hospitals, the British Museum and the Old Bailey. Then, the Blitz was over.

By the time it ended, more than a quarter of a million people were homeless. Thousands were dead – many thousands more were injured. And who knows how much damage had been done? But at least Britain’s island fortress was still under British management. As to whether that was a good thing or not, under subsequent Labor governments even the British had their doubts.

London Blitz: What the Wehrmacht Never Was

And now bombs are going off again. It is more than half a century later, but Brits with long teeth and poor memories…and Americans with rich imaginations…think they hear the booms of the Blitz. But Muslim terrorists are everything the Wehrmacht never was.

What the London bombings demonstrate is how easy it is to cause a lot of trouble. There are thousands of trains running over hundreds of miles all over London. We have never tried it personally, but blowing up one or two of them must be easy. And because it happens so rarely, it indicates that the terrorists are few and feeble. The Luftwaffe was neither. The first major raid on London saw 350 bombers attacking the city. In military terms, yesterday’s terrorist attack was pathetic and piddling – nothing like the Blitz.

But as times change, ideas and beliefs change to suit them.

When the Luftwaffe attacked, the Brits looked around and found themselves completely alone. Americans, still new to the empire business, watched from across the broad Atlantic and waited for by their phones for orders for more war materiel. This time, the United States is fully engaged, from the get-go, in the war against terror.

After 9/11, the United States could have treated the matter as a criminal case. It could have pursued the people responsible through the usual gumshoe means. If it had done it well, it probably could have brought more of them to justice. But by that time, America was in the advanced stage of empire – and desperately needed an enemy against whom it could offer the world protection. While two entire foreign countries have been invaded, and added to the long list of lackey states with a strong U.S. military presence, the lead suspect – Osama bin Laden – is still at large.

Beliefs arise as they were needed; and thus did Americans come to think the West was confronted by a vast army of terrorists ready to "destroy our civilization." And so the real perps walked and the bombs fell – on Baghdad, a city that had nothing to do with terrorism. Now, according to the press reports, Baghdad has become a hothouse for terrorists – where they are nurtured, trained, and propagated. Next, we will find them taking the London underground!

When bombs fell on Britain in the early ’40s, the British needed calm nerves and resolute action. The British Empire was faced with a worthy enemy it had to defeat. Now, when bombs go off, what is called for is panic – because the enemy is so hopelessly ill equipped and incompetent; now, the American empire is faced with a different sort of challenge – an enemy it needs to create.


Bill Bonner
The Daily Reckoning

July 08, 2005 — Ouzilly, France

Bill Bonner is the founder and editor of The Daily Reckoning. He is also the author, with Addison Wiggin, of The Wall Street Journal best seller Financial Reckoning Day: Surviving the Soft Depression of the 21st Century (John Wiley & Sons).

"Oh Daddy, it was horrible. Everyone was so upset. The first blast was right at the Tube stop near our school. There were police and soldiers everywhere. We didn’t know what was going on. I was upset, too. Not because I was afraid…I was just worried that I wouldn’t be able to get home…"

Your editor left London early yesterday morning. He missed the attacks completely, and was unaware of them until he arrived in Paris. The Paris metro was on a heightened state of alert. Soldiers roamed the train stations with automatic weapons.

We finally reached Maria in the late afternoon. Mobile phone networks had been closed down most of the day. The authorities were afraid terrorists were using their cell phones to detonate explosions.

"It is unbelievable," started a report from a colleague still in London. "We are not supposed to leave the office. The whole transport system has been shut down, so we can’t go anywhere anyway. The phones haven’t been working. And the entire center of London has been sealed – or so they say; I can’t imagine how they could actually do it."

Still, says the LA TIMES, "Londoners take pride in Blitz spirit." (More on the Blitz spirit…below…)

Meanwhile, we repeat our longstanding claim that even though the GDP growth figures for the U.S. are positive…and even though everyone thinks he is getting richer…and even though most of the world’s economists believe the American economy is booming – it just ain’t so. We only bring it up, for perhaps the 100th time, because we think you still don’t believe us.

So, we were happy to quote a leading economist who actually agrees with us yesterday.

"There’s good growth and bad growth," writes Stephen Roach. "The former is well supported by internal income generation and saving. The latter is driven by asset bubbles and debt. The United States, in my opinion, has been on a bad-growth binge for nearly a decade, but especially over the past five years. In a US-centric global economy, that means the rest of the world has also become overly dependent on bad growth as the sustenance of a false prosperity."

Roach believes, as we do, that you can’t expect such false prosperity to last. He sees the end coming:

"The endgame is all about the transition from bad growth back to good growth. The key question is under what conditions that transition occurs.

"With a saving-short U.S. economy now hooked on an increasingly frothy property market, risks of the ultimate post-bubble shakeout are mounting. That’s because, unlike the equity bubble of the late 1990s, the housing bubble has been built on a mountain of debt. The history of asset bubbles tells us they almost always last for longer than we think. That was true with the dot-com mania and is most assuredly the case today."

More news, from our team at The Rude Awakening:


Eric Fry, reporting from Wall Street…

"There is a very fine line between ‘creative destruction’ and creative annihilation. But morality is not our beat here at the Rude Awakening. We, too, pursue a profit motive that is morally ambiguous."


Bill Bonner, with more views:

*** If you who haven’t been following the saga of Dan Denning and the green sarong, here’s a quick update:

If Dan’s new book, The Bull Hunter, (which debuted at #13 on the NY Times Business list this week) doesn’t nudge our "favorite columnist" Thomas Friedman out of his spot on the Amazon bestseller list, Mr. Denning will don a sarong at this year’s Agora Wealth Symposium in Vancouver…and time is running out for him. He only has until next Friday, July 15 to beat up on Friedman.

Things are looking up for Dan – he’s going to appear on Your World with Neil Cavuto on the FOX News channel…too bad it’s scheduled for July 28 and not before next Friday – it could really help him in his fight against Friedman.

If you’re feeling altruistic, or just sorry for the young gent, you can help Dan nudge Friedman down a spot, by purchasing Dan’s book, The Bull Hunter. All the proceeds go to a worthy cause – saving hundreds from the sight of Mr. Denning in a skirt.

*** The euro has been surprisingly (to us) weak. Still, it only dropped to $1.19 following the "no" votes on the European constitution. We think it is just biding its time before another move up.

*** Blame the Asians for saving too much. Blame the Chinese for being too industrious. Blame the poor salary man in Beijing for being unwilling to spending his earnings. Blame the Chinese government for trying to take over U.S. resources. Blame the Chinese central bank for refusing to revalue its currency. Blame everyone but ourselves!

At the source of the Unocal affair is another affair of more significance. Asians now hold $1.1 trillion worth of U.S. Treasuries. What are they going to do with all that loot? The bid for Unocal is peanuts. Asians could buy more than 50 companies Unocal’s size – or a controlling interest in every major corporation in America. Without firing a shot, the rising Empire of the East could seize command of the industrial base of the declining Empire of the West. This is where America’s strange system of imperial finance has taken us. Where next?

The Daily Reckoning