All the Presidents' Bankers: The Hidden Alliances that Drive American Power

572 Pages·2014·3.59 MB·English

by  Prins Nomi

Praise for
ALL THE PRESIDENTS’ BANKERS
“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, using their public offices
and access to build private wealth and power. Disturbing and important.” —Robert
B. Reich, Chancellor’s Professor of Public Policy, University of California at Berkeley
“Nomi Prins follows the money. She used to work on Wall Street, and now she
has written a seminal history of America’s bankers and their symbiotic
relationship with all the presidents from Teddy Roosevelt through Barack
Obama. It is an astonishing tale. All the Presidents’ Bankers relies on the
presidential archives to reveal how power works in this American democracy.
Prins writes in the tradition of C. Wright Mills, Richard Rovere, and William
Greider. Her book is a stunning contribution to the history of the American
Establishment.” —Kai Bird, Pulitzer Prize–winning biographer and author of The Good Spy: The Life
and Death of Robert Ames
“Nomi Prins takes us on a brisk, panoramic, and eye-opening tour of more than a
century’s interplay between America’s government and its major banks—
exposing the remarkable dominance of six major banks, and for most of the
period, the same families, over US financial policy.” —Charles R. Morris, author of The
Trillion-Dollar Meltdown
“Nomi Prins has written a big book you just wish was bigger: page after page of
killer stories of bank robbers who’ve owned the banks—and owned the White
House. Prins is a born storyteller. She turns the history of the moneyed class into
a breathless, page-turning romance—the tawdry affairs of bankers and the
presidents who love them. It’s brilliant inside stuff on unforgettable, and
unforgivable, scoundrels.” —Greg Palast, investigative reporter for BBC Television and author of
Billionaires & Ballot Bandits
“In this riveting, definitive history, Nomi Prins reveals how US policy has been
largely dominated by a circle of the same banking and political dynasties. For
more than a century, presidents often acquiesced or participated as bankers
subverted democracy, neglected the public interest, and stole power from the
American people.” —Paul Craig Roberts, former Wall Street Journal editor and assistant secretary of
the US Treasury
“Nomi Prins has done it again—this time with a must-read, a gripping, historical
story on the first corporate staters—the handful of powerful bankers and their
decisive influence over the White House and the Treasury Department from the
inside and from the outside to the detriment of the people. All the Presidents’
Bankers speaks to the raw truth today of what Louis D. Brandeis said a hundred
years ago: ‘We must break the Money Trust or the Money Trust will break us.’”
—Ralph Nader
“Money has been the common denominator in American politics for the last 115
years, as Nomi Prins admirably points out. All the Presidents’ Bankers is an
excellent survey of how money influences power and comes dangerously close
to threatening democracy.” —Charles Geisst, author of Wall Street: A History
“All the Presidents’ Bankers is gracefully written, carefully researched, and
accessible. It is a must-read for anyone concerned with politics and economics—
in other words, just about everybody.” —Thomas Ferguson, professor of political science,
University of Massachusetts, Boston, and senior fellow, Roosevelt Institute
“From Taft to Obama, Nomi Prins gives the low-down on the cozy ties between
bankers and presidents in America. And although the state has become more
powerful and the bankers less necessary, things have gotten worse, not better,
over the century she describes.” —James Galbraith, professor, The University of Texas at
Austin, and author of The Predator State
ALL THE
PRESIDENTS’
BANKERS
Also by
NOMI PRINS
Other People’s Money: The Corporate Mugging of America (2004)
Jacked: How “Conservatives” Are Picking Your Pocket (Whether You Voted for
Them or Not) (2006)
It Takes a Pillage: An Epic Tale of Power, Deceit, and Untold Trillions (2009)
Black Tuesday: A Novel (2011)

Copyright © 2014 by Nomi Prins.
Published by Nation Books, A Member of the Perseus Books Group
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Library of Congress Cataloging-in-Publication Data
Prins, Nomi.
All the presidents’ bankers : the hidden alliances that drive American power / Nomi Prins.
pages cm
Includes bibliographical references and index.
ISBN 978-1-56858-491-1 (electronic)
1. United States—Politics and government—20th century. 2. United States—Politics and government
—2001–2009. 3. United States—Politics and government—2009– 4. Bankers—Political activity—United
States—History—20th century. 5. Bankers—Political activity—United States—History—21st century. 6.
Presidents—United States—History—20th century. 7. Presidents—United States—History—21st century.
8. Power (Social sciences)—United States—History. 9. Alliances—Political aspects—United States—
History. 10. United States—Economic policy. I. Title.
E743.P74 2013
332.10973'0904—dc23
2013036297
10 9 8 7 6 5 4 3 2 1
CONTENTS
Cast of Main Characters
Preface
INTRODUCTION: When the President Needed the Bankers
CHAPTER 1: The Early 1910s: Post-Panic Creature and Party Posturing
CHAPTER 2: The Mid-1910s: Bankers Go to War
CHAPTER 3: The Late 1910s: Peace Treaties and Domestic Politics
CHAPTER 4: The 1920s: Political Isolationism, Financial Internationalism
CHAPTER 5: 1929: The Room at 23 Wall, Crash, and Big-Six Take
CHAPTER 6: The Early 1930s: Tenuous Times, Tax-Evading Titans
CHAPTER 7: The Mid-to Late 1930s: Policing Wall Street, World War II
CHAPTER 8: The Early to Mid-1940s: World War II, Bankers, and War Bucks
CHAPTER 9: The Late 1940s: World Reconstruction and Private Bankers
CHAPTER 10: The 1950s: Eisenhower’s Buds, Cold War, Hot Money
CHAPTER 11: The Early 1960s: “Go-Go” Youth, Murders, and Global Finance
CHAPTER 12: The Mid-to Late 1960s: Progressive Policies and Bankers’
Economy
CHAPTER 13: The Early to Mid-1970s: Corruption, Gold, Oil, and Bankruptcies
CHAPTER 14: The Late 1970s: Inflation, Hostages, and Bankers
CHAPTER 15: The Early to Mid-1980s: Free-Market Rules, Bankers Compete
CHAPTER 16: The Late 1980s: Third World Staggers, S&Ls Implode
CHAPTER 17: The Early to Mid-1990s: Killer Instinct, Bank Wars, and the Rise
of Goldman Sachs
CHAPTER 18: The Late 1990s: Currency Crises and Glass-Steagall Demise
CHAPTER 19: The 2000s: Multiple Crises, the New Big Six, and Global
Catastrophe
Glossary of Financial Terms
Acknowledgments
Notes
Index
ON THE MORNING OF MARCH 4, 1933, SECRETARY Hyde produced an
account of two bankers involved in the Depression. He recounted that
one of them, unshaven, hungry, his shirt gone, approached a circus
manager for a job, saying he would do anything just for something to
eat. The manager told him that he was not even able to feed his present
employees, and that he had already killed the lion to feed the tigers. Just then an
employee approached and said the gorilla had died of starvation, upon which
the manager exclaimed in desperation, “This is the finish.” Thereupon, the
unquenchable, enterprising spirit of the banker came into action, and he
proposed they skin the gorilla; he would get into the skin and perform provided
he had a square meal and a cut in on the receipts. While he was performing in
his cage, the lion in the next compartment pulled open the bars between them
and made for him ferociously. The gorilla cried desperately for help. Whereupon
the lion whispered in his ear, “Shut up, you fool, you are not the only banker out
of a job.”1