Sometimes it’s in our best interest to avoid the advice of economic professionals. In this case, I refer to Henry Morgenthau Jr., secretary of the Treasury under President Harry Truman, whose 1944 “Post-Surrender Program for Germany” was widely attacked as a collective punishment that might result in the death by starvation of 25 million people. One report at the time described it as “barely above the level of ‘sterilize all Germans.’”
Morgenthau’s plan to demilitarize and deindustrialize Germany was seized upon by the failing Nazi regime as a propaganda tool, and the Truman administration ultimately rejected it. Instead of the Morgenthau Plan, the U.S. went with the now-legendary Marshall Plan, which allowed for the rebuilding and reshaping of Western Europe to suit American interests, at a cost of about $150 billion in today’s dollars. That led to nearly 50 years of expanding prosperity during the period often described as Pax Americana.
