I’ve written many posts about the revolving door between Wall Street and Washington, and how the U.S. government puts the interests of the financial oligarchy above the interests of the American public.
I’ve just finished reading a book that shows how far back in American history this goes.
ALL THE PRESIDENT’S BANKERS: The Hidden Alliances That Drive American Power by Nomi Prins (2014) is a narrative history showing the interdependence of the Presidents and the Wall Street banking and financial community from the early 20th century to the present day.
Nomi Prins showed how American Presidents from 1910 to 1970 had to take the interests of Wall Street banks into account in implementing their policies, and then how, from 1980 on, the banks freed themselves from governmental restrictions to engage in ever-bigger speculations, from which they had to be bailed out.
Her story begins with the Panic of 1907 with President Theodore Roosevelt standing by helplessly while J. Pierpont Morgan summons bankers to his mansion and arranges a bailout to prevent financial collapse.
The Federal Reserve System was created in 1913 in order to prevent such a situation from recurring.
This was a major turning point in American history. It gave the United States a financial stability and financial resources without which it could not have been a world power. It made possible U.S. participation in the world wars, the projection of American global power and the great expansion of federal government activity—none of which could have been paid for on a pay-as-you-go basis or with foreign loans.
At the same time, it formalized the position of the great American banks as a kind of fourth branch of government.