Heinrich Bruning became chancellor of Germany on March 29, 1930. This was six months after the Wall Street crash. German factories were shutting down, and unemployment was rising. But, for Bruning, unemployment was not the primary problem. As far as Bruning was concerned, his government's first priority was to deal with the growing deficit. Join me as we examine the courageous decisions and hard decisions Chancellor Bruning made to get the German budget under control.
Heinrich Bruning's Catholic Center Party had been a member of the Weimar Coalition, and in conjunction with the leftist Social Democratic Party (SPD) and the left of center German Democratic Party (DDP), supported expansion of Social Security, first enacted in 1889 at the behest of Otto Von Bismarck, and the construction of modern government owned housing for nearly 1 out of 5 Germans. In 1927, with additional support of the right wing German People's Party (DVP) under the leadership of Gustav Stresemann,, the Catholic Center Party helped to enact generous unemployment benefits. When Heinrich Bruning was sworn in as chancellor, Germany faced rising unemployment, but he led a country that, at that time, probably had the most developed social welfare system of any democracy in the world.
But Bruning was convinced that the budget deficit was a greater problem than rising unemployment, which, in any event, would sooner or later right itself when left to the moderating influences of the free market. Within months of taking office, Bruning was announcing reductions in social security payments, and a complete halt to unemployment benefits. And when the great depression came he dug in his heels and became more determined then ever to abolish what he saw as communistic socialism. And unfortunately, this ideologue was successful in drastically cutting social security and unemployment benefits at the worst possible time.
Partly because of Bruning’s idiotic economic policies, the great depression struck Germany harder than any other western nation. As bad as things were in the United States, things were far worse in Germany. One in three German workers became unemployed and in industrialized areas the unemployment rate reached 50 percent. The real figures were even higher, as the figures do not include the millions of trained workers who lost their higher paying jobs but were lucky to find low paying menial work. And Bruning responded by slashing unemployment benefits and firing most of the government work force. Most banks failed, and Bruning took no action to save people's lifetime savings. Hunger became rampant. Hospitals and doctors were reporting deaths from malnutrition. Chancellor Heinrich Bruning became the most hated man in Germany – he was "the Hunger Chancellor."
In the summer of 1930 the Social Democrats, protesting Bruening’s economic policies, pulled out of the governing coalition and joined the Communists in demanding new elections. Chancellor Bruning, confident of victory, asked President Paul von Hindenburg to schedule early elections. So in September of 1930 Germans went to the polls to elect a new Reichstag. The results stunned the entire world. The Social Democrats campaigned for a massive public works program to put Germans back to work and expected to win the elections, but instead the Social Democrats lost ten seats in the Reichstag, from 153 down to 143. The shocker was that the Nazis, who had only 12 seats and was the ninth and tiniest party in the previous Reichstag, now jumped to second place with 107 seats. They had gotten 800,000 votes in the 1928 election, now they got 6.4 million votes.
And the September 1930 election meant two things. First, the Social Democrats had to give up their dreams of taking over the government and institute massive programs to put people back to work. With the Nazis the second largest party, Social Democrats could not bring down Bruning’s government without bringing down democracy. So Bruning stayed in power, and his ideological obsession with letting the Germans starve drove more and more people to the Nazis. And second, Hitler had now convinced the richest and wealthiest of Germans that his national socialism had nothing to do with socialism. In the wake of the 1930 election big time money now flowed into the Nazi party coffers.
Heinrich Bruning resigned as chancellor on May 30, 1932. Two months later, on July 31, Germans for the third time in 1932 went to the polls to elect a new Reichstag. The Nazis got 37 percent of the vote, 13.1 million in all. This was more than twice the 6.4 million they had gotten in the 1930 Reichstag elections. They now had 230 seats in the 608 seat Reichstag, the Social Democrats were a distant second at 133 seats. In third place were the Communists with 89 seats. Ominously, the Nazis 230 seats, combined with the Communists 89 seats, formed a majority of 319 seats in the 608 person Reichstag – a majority was now dedicated to the destruction of democracy. And six months later, Adolf Hitler was sworn in as chancellor.
I don't know if Heinrich Bruning was sucessful in reducing the budget deficit, but that's beside the point. What he didn't understand, and what the Republicans either are too ignorant to understand, or they do understand but are too power hungry to care - is that deficits are the inevitable product of unemployment. Cut government spending and unemployment grows. The more the ranks of the jobless grow, the more consumer spending drops, enflaming the contraction of the economy. Grow the economy, put people to work, increase the ranks of the taxpayers, and the deficit shrinks.
Please, President Obama, learn from history. Don't appease the Republicans. Don't become another Heinrich Bruning.