Hoover's FBI thought It's A Wonderful Life was communist propaganda; Mitt Romney should have watched


More than Home Alone or Miracle on 34th Street, It's A Wonderful Life is probably the most beloved and iconic Christmas film for American audiences. Once a box-office bust, the film has received a second life as a prime-time television staple for holiday gatherings, and has now been adapted into a radio play premiering tonight at the Sherman Street Event Center.

But in 1947, J. Edgar Hoover's FBI considered the tale of George Bailey and Bedford Falls to be Communist propaganda, and 65 years later, the film's take on social welfare, real estate loans and class warfare remain poignantly relevant in the age of Occupy Wall Street and Mitt Romney's failed presidential bid.

See also:
-Spike Lee's most beautifully preachy moments
-The top five Titanic film flubs
-Five things you may not know about Casablanca
-E.J. Dionne on the Supreme Court, cable news and evangelicals

When speaking with us on his book Our Divided Political Heart last summer, MSNBC's E.J. Dionne said, "I think that Americans, at our best, find a proper balance. We're constantly in search of decent balance between liberty and community, between public and private, between the state and the market."

This, ultimately, is the crux of the It's A Wonderful Life plot. George Bailey (played beautifully by Jimmy Stewart) begins the film as a hyper, ambitious, Steve Jobs-type character who plans to "design new buildings and plan modern cities." But over the next hour of the film Bailey's lust for life slowly dwindles. With each attempt he makes to leave his home town (in order to travel the world and become an architectural visionary), Bailey is pulled right back in, primarily by his father's failing Building and Loan Association, a small-town financial institution based more on social welfare than on capitalist ideology.

"Are you running a business or a charity ward?" asks the wealthy Mr. Potter to George Bailey's father, after finding out that Bailey didn't foreclose on non-paying debtors because "times were tough." After his father dies, George Bailey is left to defend the Building and Loan Association against Potter, who wants to dissolve the operation on the basis that it gives loans to unqualified applicants. "This rabble you're talking about, Mr. Potter, they do most of the working and paying and living and dying in this community," George Bailey explains to the miserly millionaire. "Is it too much to ask to have them work and pay and live and die with a couple of decent rooms and a bath? Anyway, my Father didn't think so. People were human beings to him. But to you -- a warped, frustrated old man -- they're cattle. And in my book, he died a much wealthier man than you'll ever be."

It was the ideological anatomy of Mr. Potter (cold and calculating, void of empathy) that most concerned the FBI in 1947. "The film represented rather obvious attempts to discredit bankers by casting Lionel Barrymore [Mr. Potter] as a 'scrooge-type' so that he would be the most hated man in the picture," read an FBI memo to J. Edgar Hoover, concluding that this tactic was "a common trick used by Communists."

Though looking back on the film over six decades later, it seems weirdly short-sighted of the notoriously paranoid FBI to only look at the Potter character for an -- at least socialist -- message inside It's A Wonderful Life. Because in 2012, it feels chock full of 'em.

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This is the third of three completely unrelated takes about this film.


The fact that the FBI fingered "It's a Wonderful Life" as communist propaganda was no mistake--it's very "truthy." Level claims about "communism," or its little 900-pound gorilla brother, "socialism," and you'll soon have an army of collectivists on your back. The article to which these posts are attached can be seen as evidence. Google "It's a Wonderful Life" along with "propaganda" for more. See another comment by yours truly for more discussion of that.


Perhaps more interesting is this film's support for the same sort of behavior which led to the housing boom, and bust, from under which this economy is now attempting to dig. The story's author seems to at least pay lip service to this fact. Though the federal reserve's perpetual theft from society of "interest" based on "money" created in debt and out of thin air is an important problem we face, its enabling of government faux largesse is much more harmful. It has enabled the creation of Sallie Mae and Freddy Mac, and the unsustainable monetary policies they facilitated.


For a clue, look no closer than the similarity of the Building and Loan to Sallie Mae. Look no further than to the idea that "investing" in homes makes any sense at all. To make sense, it implies that homes create wealth, merely by sitting there, or perhaps, being "maintained" by their indebted owners. Really, to believe this is to believe that inflation, the creation of money from thin air and injected into the economy (which in reality, merely lowers the value of the money and steals from those who have it in their pockets ) creates wealth. This is, on its face, a grand lie, but let's explore further.  


Going back at least three presidents and a generation, policies of an "ownership society," that everyone may have a home mortgage (which, more cynically, could be considered a ball and chain), standards were lowered so that everyone might "invest" in his own home. We'd gotten so used to the "wealth-building" aspects of inflation, that we actually believed our homes (assets which depreciate in real life, but appreciate in an inflationary society) were investments. Thus, it became reasonable to encourage lending institutions to lend to the least solvent of potential borrowers. Only true believers in Keynesian economics were truly surprised when the bottom fell out, because the people who believe in hard money told us IN ADVANCE that these problems were coming.


Though no one put it into writing, we always believed that the mixed-market participation of Sallie Mae and Freddy Mac would be supported by bail-outs, if anything bad happened to them. What we didn't predict is that the failure would extend so far that they would become willing "chumps" in a scheme--promoted by government policy--that would see them buy junk home loans, created by the very banks being encouraged to write them.


Thus, our current situation, which could have been--and was--predicted, was accomplished. The banks were encouraged to make money off people who could not possibly pay back the loans (and how could they, given the fact that the loans were not for wealth creation, but for consumption, and the recipients had not been compelled to even demonstrate the ability, in some situations, to make the payments?) and deemed "too big to fail" when bailing out their first suckers was not enough to correct the problem.


Sadly, the government monetary theorists haven't learned their lesson, and they're doing everything they can to prop up yet another "housing boom." What will probably stop them this time is the complete failure of the dollar, and we can only hope this time it will take that tragic institution which enabled two great depressions--the federal reserve--along with it.



This is a second of multiple completely unrelated takes about this film.


The author completely misses the point when he claims that a "balance between liberty and community, between public and private, between state and market" ultimately "is the crux of the plot." In actuality, the crux of the plot is the individual's willingness to give to others, rather than to only think of one's singular desires. That individuals' love for those around them inspires almost priceless gifts in the time of need--often referred to in other contexts as "paying it forward"--makes ALL of our lives better, including that of the giver. 


Objectivists, and some libertarians, bitterly oppose such thinking, but it is the only basis on which charity becomes a moral act. We hope, by giving to charity, that the world will become a better place for all of us. Just as important as the giving, however, is the redemption of the recipient. That is why This virtue is not the same as state-mandated redirected beneficence. If we try to replace charity with government aid, we will find that the fiefdom which is created serves itself better than the recipients, and does not prompt the recipients to build for themselves--in essence, it does not teach them to fish, but creates a scheme of making them dependent on the fish.


This is why replacing charity with government poverty programs does not work. The use of force to extract wealth from those who "have it to spare" in over to those who "deserve a better life" neither takes into account what the person from whom the wealth is stolen would do with it, nor does it take into account how the person who received it unearned will spend it. Neither does it take into account that the brokers in the deal will eventually scheme to maximize their share. The collectivists have a word for this thinking: greed. Though we normally see it associated with "profiteers," it is not those who voluntarily offer a proposition of quid pro quo, but those who use the monopoly of force to redistribute according to the maxim "from each according to his ability, to each according to his need," who end up greedily absorbing the loot which was stolen by use of force. So, we can see that the violation of property can only lead to perverse consequences.


In summary, there is a place for charity, and used responsibly, it is indeed a virtue. However, attempting to use force to accomplish the same goals leads to a society in which the rich prosper, the poor go hungry, and the facilitators of "redistributive justice" receive little justice and great wealth  and power. Fortunately, American bureaucrats still have souls, or the republic under which we live would see the same fate as the Soviet Union--there's still time for it to turn either direction.



This is the first of at least two completely unrelated takes about this film.


It's often left out that what made "It's a Wonderful Life" a holiday hit was the failure of the copyright owner to renew its copyright, after which virtually ever television station made it holiday filler. The result, also overlooked by supporters of copyright, was how prolific it became. This is counter to the doctrine of copyright, which is supposed to CAUSE the creation of so-called intellectual property by encouraging supposed property (aka monopoly) holders to create more (monopolies to be licensed.)


A similar story can be told about Microsoft Basic, and Bill Gates' famous letter decrying the illicit copying by hobbyists of a paper tape--an early case of "software piracy" gone wild. MS Basic also became prolific, even the market leader, not despite of piracy, but because of it. A "free" component of every version of the Microsoft operating system provided a useful tool for paying customers. Thus we see an embarrassing fact to those who support intellectual property: that "piracy" helped make Microsoft into a software empire, along with a $50,000 purchase of DOS, which was parlayed into a licensing scheme on which Windows was financed (and that also benefitted from a "sharing" of intellectual property developed by Xerox.



In retrospect, I suppose, a couple of these takes ARE somewhat related.

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