All the Presidents’ Bankers: The Hidden Alliances That Drive American Power

[marmar]

from truthdig:


All the Presidents’ Bankers: The Hidden Alliances That Drive American Power
Posted on May 6, 2014

The following excerpt is from Truthdig contributor Nomi Prins’ bestselling new book “All the Presidents’ Bankers: The Hidden Alliances That Drive American Power.” In this section, Prins writes about the period during the administration of Lyndon Johnson when bankers began to move away from the president as they saw their global ambitions hemmed in by the Vietnam War.

Johnson and the Bankers’ Economy

In his spirited inaugural speech on January 20, 1965, Johnson declared, “In a land of great wealth, families must not live in hopeless poverty. In a land rich in harvest, children just must not go hungry.”

He made good on his word. When Johnson began his second term, 20 percent of people in America were living in poverty. Between 1965 and 1968 he raised federal expenditures addressing the War on Poverty from $6 billion to $12 billion (Nixon would double the figure again to $24.5 billion by 1974). That spending, in conjunction with a booming economy, made a big impact. When Johnson left office in 1969, the poverty rate in America had dropped to 14 percent.

On February 18, 1965, Johnson increased his focus on his friends in finance. He invited Rockefeller, Weinberg, and other prominent bankers to an intimate White House dinner to discuss his voluntary program for an early reduction in the balance of payments deficit. His plan would require each of their firms to curtail their international transactions so as to limit dollar outflow, a request that brought the ire of Wriston when it came from Kennedy but solicited no such reprimand under Johnson.

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Regarding the Great Society, bankers were also becoming lukewarm. In truth, the success of those policies mattered less to bankers than overseas growth did. As long as bankers were making money and increasing their global influence, what happened domestically was of secondary importance; providing support to Johnson was no hardship. But now they were growing wary of backing Johnson’s efforts. In 1966 Johnson signed the Participation Sales Act, which encouraged substitution of public credit with private credit. The initiative, started by Eisenhower and extended by President Kennedy’s 1962 Committee on Federal Credit programs, was meant to be a favor to the bankers.

By replacing $3.3 billion in outstanding public debt (through government-issued bonds) with private debt (or bank-issued bonds), the government effectively converted public loans into private loans for the banks, giving them $3.3 billion of business guaranteed by the US government. Soon after the bill was signed, Johnson’s aide Robert Kintner suggested that Johnson form a confidential program to determine how “important business, financial, and industrial leaders feel toward the job being done by the President and particularly how they feel in relation to the Vietnam operation, the President’s European and Latin American policies, the character and duration of prosperity, and the President’s economic, financial and social policies.” The survey would be based on off-the-record interviews with prominent figures including David Rockefeller, Sidney Weinberg, Roger Blough, and Bobby Lehman. .................(more)

The complete piece is at: http://www.truthdig.com/arts_culture/item/all_the_presidents_bankers_the_hidden_alliances_that_drive_american_power_2

[Supersedeas]

1. the public / private conversion is amazing to witness, no?

From federal lands to taxpayer funded guarantees, the fix is in (insider baseball).