All the Presidents' Bankers: The Hidden Alliances that Drive American Power
a book by Nomi Prins
(our site's book review)
"I quit Wall Street and decided that it was time to talk more about what was going on inside it, as it had changed. It had become far more sinister and far more dangerous."—Nomi Prins
All the Presidents’ Bankers: The Hidden Alliances that Drive American Power is a groundbreaking narrative of how an elite group of men transformed the American economy and government, dictated foreign and domestic policy, and shaped world history. Culled from original presidential archival documents, All the Presidents’ Bankers delivers an explosive account of the hundred-year interdependence between the White House and Wall Street that transcends a simple analysis of money driving politics, or greed driving bankers, or bankers controlling governments. Bankers’ profit motive trumped heritage and allegiance to public service, while presidents lost control over the economy, as was dramatically evident in the financial crisis of 2008. The book presents the shocking genealogy of American power.
In the U.S., the 1% people get 99% and the 99% people (us) get 1%. Is it fair we get leftover scraps and they—especially big bankers—pig out?
Prins is a senior fellow at Demos, a public think tank, and her résumé includes stints in leadership positions at Goldman-Sachs, Bear Stearns, Lehman Brothers and Chase Manhattan Bank, so she knows the banking world well enough to be considered an expert—a go-to person in the area. Prins, in All the Presidents' Bankers: The Hidden Alliances that Drive American Power, shows how close ties between government and financial institutions provided opportunities for a few key players to take advantage of a unique set of circumstances, or perhaps "exploit" would be a better choice of words. Accumulating personal wealth is really all about having the right relationships.
Bush and Obama had become followers and reactors to bankers’ whims
The author says that “The Bush and Obama presidencies represented a climax in the development of relationships and codependent actions that began with Teddy Roosevelt. But whereas Roosevelt, Wilson, FDR, Eisenhower and Johnson had nursed synergies that enabled useful public-oriented legislation, Bush and Obama had become followers and reactors to bankers’ whims. By the 2000s, bankers no longer debated economic policy in thoughtful correspondences with presidents or Treasury secretaries, as they once had. Alliances abounded, but their character was more perfunctory. Top bankers visited the White House and attended government functions, but their efforts were recklessly self-serving and onesided.”
She explores the alarming global repercussions of a system lacking barriers between public office and private power in this well-researched tome. And Prins leaves us with an ominous choice: either we break the alliances, or they will break us. Robert Reich says that "The relationship between Washington and Wall Street isn't really a revolving door. It’s a merry-go-round. And, as Prins shows, the merriest of all are the bankers and financiers that get rich off the relationship . . . "
The relationship between Washington and Wall Street isn't really a revolving door . . .
. . . it’s a merry-go-round.
She tells many stories of the bank robber scoundrels who've owned the banks—and owned the White House. However, the Justice Department assessed the paying of fines and legal settlements by the big banks for their multitrillion-dollar global Ponzi scheme, fines that amounted to chump change, and which changed behavior not one iota. And what about Congress? No substantive regulatory act was passed to significantly alter their behavior—one can always count on our elected representatives to have our backs . . . NOT! If nothing changes fundamentally in the banking landscape, more and larger crises are a given, but Obama and his cabinet simply yawned at Wall Street criminality.
"President Bill Clinton gets a slap on the wrist for the 1999 repeal of Glass-Steagall, but Ms. Prins largely ignores his far more serious offense, pressing the banks to expand subprime mortgage lending to juice up the housing industry. The banks went along happily because he also arranged for them to dump their doubtful paper on two government-sponsored enterprises, Fannie Mae and Freddie Mac." (Source: Book Review: 'All the Presidents' Bankers' by Nomi Prins, George Melloan, The Wall Street Journal)
Kennedy had been sympathetic to leaders of Latin America and its people, but under Johnson, the Alliance for Progress once again served neocolonialist goals, encouraging bankers to infiltrate the region for their own private gain. Latin America had suffered many abuses at the hands of US corporate and banking interests, which would blossom in the 1970s and implode catastrophically in the 1980s. Arguably, if JFK or RFK had lived and remained concerned with the economic equality and self-sufficiency of our Latin America neighbors, then the following could have been precluded: a free-for-all profit grab accompanied by military alignments, and the third world debt crisis, which enabled bankers to use the federal government to support their own private speculation. The Alliance for Progress' aid scam was scorned by Brazil, with cynics calling it Brazilian foreign aid to America (rather than vice versa) due to the (accurate) belief that American corporations were withdrawing more money from the country than they were investing.
By acting as the middlemen—capturing oil revenues and transforming them into high-interest-rate loans, to Latin America in particular—bankers accentuated disparities in global wealth. They dumped loans into developing countries and made huge amounts of money in the process. By funneling profits into debts, they caused extreme pain in the debtor nations, which caused them not a moment of concern. If the Queen during the 18th century French Revolution said: "Let them eat cake," then in the last half of the 20th century an analogous expression from rich U.S. bankers to Latin Americans would be "Let them eat loans!"
If the Queen during the 18th century French Revolution said: "Let them eat cake," then in the last half of the 20th century an analogous expression from rich U.S. bankers to Latin Americans would be "Let them eat loans!"
Map of Latin America
Historical facts: The US also saw the rise of left-wing governments in central America as a threat, and in some cases, overthrew democratically elected governments perceived at the time as becoming left-wing or unfriendly to U.S. interests. Examples include the 1954 Guatemalan coup d'état, the 1964 Brazilian coup d'état, the 1973 Chilean coup d'état and the support of the Contra rebels in Nicaragua. (Source: Latin America–United States relations)
(Note: The precise dynamics of the shameful scam being perperated on the Latin Americans—which killed a great many people and ruined lives, economies, the environment, cultures, democracies—are detailed by those who actually participated in these fraudulent exploitations in such books as: The Secret History of the American Empire: Economic Hit Men, Jackals, and the Truth about Global Corruption, Confessions of an Economic Hit Man, Hoodwinked: An Economic Hit Man Reveals Why the Global Economy IMPLODED -- and How to Fix It, and A Game As Old As Empire: The Secret World of Economic Hit Men and the Web of Global Corruption. U.S. shadow government thugs bumped off Presidents Omar Torrijos of Panama; Jaime Roldós of Ecuador in 1981; Patrice Lumumba of the Congo in 1960; Eduardo Mondlane of Mozambique in 1969; Amilcar Cabral of Guinea-Bissau in 1973; Oscar Romero, archbishop of San Salvador, in 1980; Benigno Aquino of the Philippines in 1983; and Mehdi Ben Barka of Algeria in 1965. From this one can see why U.S., IMF and World Bank "aid" was ridiculed!)
The Vietnam War was proving great for banks, so the Presidents (sell-out Johnson and tricky Dick Nixon) were pressured into keeping it going many years after the top brass knew it was a lost cause. But rich bankers' kids were somehow avoiding the draft, so the tens of thousands of our soldiers dying and being maimed there were of little concern to Presidents and bankers.
Bankers do not care what happens to our young or to Vietnamese or Iraqi citizens—they care about their own power and wealth, and see citizens as mere cannon fodder—a means to an end; the Iraq War is a repeat of the Vietnam War errors
The connection between democracy and free markets is interesting. Democracy is predicated on the idea that every vote counts equally, and, idealistically, the government adopts policies that benefit or adhere to the majority of those votes. But that is only idealism. Now for realism: In actual fact, it's the minority of elite families and private individuals that exercise the most control over America's policies and actions. (See The Shadow Government, Shadow Elite: How the World's New Power Brokers Undermine Democracy, Government, and the Free Market, Unaccountable: How Elite Power Brokers Corrupt our Finances, Freedom, and Security, and The Deep State: The Fall of the Constitution and the Rise of a Shadow Government.)
After being risky with deregulated markets, banks caused the economy to crash in 2008, and the 99% got the shaft while the 1% got bonuses, rewards, windfalls, etc.
According to Prins, the myth of a free market is that every trader or participant is equal, but that's poppycock. In fact, the biggest players with access to the most information and technology have a disproportionate advantage over the smaller players. "What we have is a plutocracy of government and markets—hardly a democracy." The privileged few don't care, or need to care, about democracy any more than they would ever want to have truly "free" markets. (See Democracy—an American Delusion.) What they do want are markets liberated from as many regulations as possible, which leads to huge inherent risks, most of which are borne by the taxpayers—NOT the rich. Like what happened in 2007 to 2008. The 99% got the shaft; the 1% got bonuses, rewards, windfalls, etc.
In closing, Prins exclaims, “It is very easy to see how the system could unravel because it isn’t stable. We are definitely in big trouble. There is no way we are not headed for a crisis. . . . It should have happened already, but the level of support is epic and reckless from the political and financial elite.”