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View Diary: A Pathological Moral Environment (83 comments)

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    SixSixSix

    The split started around the middle of the 19th century, when the Banks were private empires run by a consortium of insiders with close personal ties often bound by intermarriage.  They were threatened politically by the rise of industrialists whose fortunes arose from manufacturing, most particularly steel and railways.  The bankers had long had a near-monopoly on the top positions of wealth and power due to their physical possession of large stocks of gold and the legal right to issue both loans and paper bills backed by fractional reserves.  In America the industrialists formed a new political party, allying themselves with the growing Abolitionist movement to provide them with a Cause that inspired votes from people who couldn't care less about a tug-of-war between two sets of rich bastards.  But from the beginning the Republican Party was owned by the industrial/military/mining interests, in opposition to the Old Money banking interests who continued to control the Democratic party in alliance with the southern planters.  

    The Civil War of course destroyed the southern plantation aristocracy and allowed the temporary ascendance of the industrialists, but the bankers fought back, bankrolling several large newspapers (the origins of the "liberal press" mythology; most newspapers in the 19th century were more propaganda organs than mercantile enterprises or unbiased sources of information).   The Republicans dominated American government from 1860-1913, but at last the Democrats (and thus the banks) managed to elect Woodrow Wilson.  Who immediately served the interests of the international trans-Atlantic bankers, by enacting the Federal Reserve Act which empowered an independent consortium of private bankers to control the US currency, and then embroiling the U.S. in WWI, most particularly by bankrolling both sides with the debt financing that would later cause both the Great Depression and WWII.

    So, yeah.  The Republicans originally represented the railroad magnates, the steel industry, the automobile manufacturers, and the mining companies while the Democrats represented the Banks and international merchants.  The Republicans were originally isolationist because their sources of wealth were entirely home-grown, until the gradual depletion of Texas oil forced them to look farther afield.  But they also liked military spending as heavy industry became increasingly necessary for modern weapons manufacture.  The Banks liked peace, but with lots of international trade that they could finance and collect interest on.  They also had deep historical connections and roots in Europe, as many of the banking families had originated there before the Colonies really took off.  Republican industrialists liked tariffs to protect their domestic markets; Democratic bankers liked "free trade" which gave them more financing opportunities without having to actually produce anything (bankers and merchant companies had started as pirates and commodity traders; they found the complexities of actually PRODUCING something far too risky).

    But just as the Republican Robber Barons found it useful to campaign on the side of the angels vis-a-vis slavery, the Democratic Banksters found it useful to support civil rights and environmental protection.  Their business doesn't directly depend on ripping holes in the Earth or spewing toxins into the air and water like the miners and drillers do.  And credit cards don't have skin color, just an interest rate, the higher the better.

    Sachs is right.  Don't make the mistake of thinking that either set of One Percenters is on your side, in the long run at least.

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