All the Presidents' Bankers

Praise for

A
LL THE
P
RESIDENTS
’ B
ANKERS

“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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All rights reserved. No part of this book may be reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews. For information, address the Perseus Books Group, 250 West 57th Street, 15th Floor, New York, NY, 10107.

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.

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Typeset in 11 point Minion Pro by the Perseus Books Group

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

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CONTENTS

Cast of Main Characters

Preface

I
NTRODUCTION
: When the President Needed the Bankers

C
HAPTER
1: The Early 1910s: Post-Panic Creature and Party Posturing

C
HAPTER
2: The Mid-1910s: Bankers Go to War

C
HAPTER
3: The Late 1910s: Peace Treaties and Domestic Politics

C
HAPTER
4: The 1920s: Political Isolationism, Financial Internationalism

C
HAPTER
5: 1929: The Room at 23 Wall, Crash, and Big-Six Take

C
HAPTER
6: The Early 1930s: Tenuous Times, Tax-Evading Titans

C
HAPTER
7: The Mid- to Late 1930s: Policing Wall Street, World War II

C
HAPTER
8: The Early to Mid-1940s: World War II, Bankers, and War Bucks

C
HAPTER
9: The Late 1940s: World Reconstruction and Private Bankers

C
HAPTER
10: The 1950s: Eisenhower’s Buds, Cold War, Hot Money

C
HAPTER
11: The Early 1960s: “Go-Go” Youth, Murders, and Global Finance

C
HAPTER
12: The Mid- to Late 1960s: Progressive Policies and Bankers’ Economy

C
HAPTER
13: The Early to Mid-1970s: Corruption, Gold, Oil, and Bankruptcies

C
HAPTER
14: The Late 1970s: Inflation, Hostages, and Bankers

C
HAPTER
15: The Early to Mid-1980s: Free-Market Rules, Bankers Compete

C
HAPTER
16: The Late 1980s: Third World Staggers, S&Ls Implode

C
HAPTER
17: The Early to Mid-1990s: Killer Instinct, Bank Wars, and the Rise of Goldman Sachs

C
HAPTER
18: The Late 1990s: Currency Crises and Glass-Steagall Demise

C
HAPTER
19: The 2000s: Multiple Crises, the New Big Six, and Global Catastrophe

Glossary of Financial Terms

Acknowledgments

Notes

Index

O
N THE MORNING OF
M
ARCH
4, 1933, S
ECRETARY
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.”
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