American Capitalism Is Brutal. That’s Because It’s Based on Plantation Slavery

This Week in Money August 13–19

This Week In Money helps you understand the history of economics.

AUGUST 13

1946 — BIRTH OF JANET YELLEN, FORMER CHAIR OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM • (2005, speech in San Francisco) — Yellen argued against deflating the housing bubble because — “arguments against trying to deflate a bubble outweigh those in favor of it” and predicted that the housing bubble “could be large enough to feel like a good-sized bump in the road, but the economy would likely be able to absorb the shock”. • (2010, Financial Crisis Inquiry Commission hearing) “For my own part, I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.’s — I didn’t see any of that coming until it happened.”

So, what is Ms. Yellen and her colleagues at the Fed today not seeing and won’t “until it happens?”

AUGUST 14

1989 — DEATH OF ROBERT B. ANDERSON, SECRETARY OF TREASURY UNDER PRESIDENT EISENHOWER

“When a bank makes a loan it simply adds to the borrowers’ deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposit; it was not previously paid into the bank by anyone. It’s new money, created by the bank for the use of the borrower.”

2017 — VIDEO POSTING “MONEY, SCHOOLING AND EDUCATORS: CREATING A CRITICALLY-INFORMED MOVEMENT FOR MONETARY REFORM AND ECOJUSTICE” BY LUCILLE ECKRICH AND STEVEN WALSH Presentation at the 2017 Democracy Convention, Minneapolis, MN.

2017 — VIDEO POSTING, “CLIMATE CHANGE AND MONEY: HACKING AT THE ROOT” BY HOWARD SWITZER Presentation at the 2017 Democracy Convention, Minneapolis, MN

2019 — “AMERICAN CAPITALISM IS BRUTAL. YOU CAN TRACE THAT TO THE PLANTATION” POSTED ARTICLE

“Financialization is not just as a modern problem. In the NY Times series on Slavery this bubble was financed by the banks: “The American South rashly overproduced cotton thanks to an abundance of cheap land, labor and credit, consumer demand couldn’t keep up with supply, and prices fell. The value of cotton started to drop as early as 1834 before plunging like a bird winged in midflight, setting off the Panic of 1837. Investors and creditors called in their debts, but plantation owners were underwater. Mississippi planters owed the banks in New Orleans $33 million in a year their crops yielded only $10 million in revenue. They couldn’t simply liquidate their assets to raise the money. When the price of cotton tumbled, it pulled down the value of enslaved workers and land along with it. People bought for $2,000 were now selling for $60. Today, we would say the planters’ debt was “toxic.” … Even academic historians, who from their very first graduate course are taught to shun presentism and accept history on its own terms, haven’t been able to resist drawing parallels between the Panic of 1837 and the 2008 financial crisis.”

AUGUST 15

1971 — PRESIDENT NIXON CLOSES “GOLD WINDOW” Richard Nixon issues Executive Order 11615 freezing wages and prices. Foreign-held paper dollars are no longer converted for gold, thereby nullifying in an important aspect the Bretton Woods Agreement

AUGUST 16

2009 — PUBLICATION OF “WHY STATES GOING INTO THE BANKING BUSINESS WOULD BE A DISTRACTION, NOT A SOLUTION TO THEIR FISCAL PROBLEMS”, BY JAMIE WALTON

“You don’t solve a problem with more of the problem. “This scheme for states to go into the banking business would only ‘serve to protect’ the status quo. The ‘proposal’ completely fails to confront the main problem identified by all serious monetary reforms: ‘fractional reserve’ banking. Instead, it actually endorses and sanctions this vicious and destructive process, by suggesting that State governments engage in it…”

2010 — DENNIS KUCINICH 5 MINUTES ON MONEY ON HOUSE FLOOR

“Dennis Kucinich speaks on the poor state our monetary system is in and outlines how to fix it with three simple steps of the American Monetary Act: incorporate the Federal Reserve System into the U.S. Treasury, end the fractional reserve system, then, once we have won back the money power, spend new money into circulation.”

2011 — “FIAT EMPIRE — WHY THE FEDERAL RESERVE VIOLATES THE U.S. CONSTITUTION” POSTED VIDEO

“Some feel the ‘Fed’ is a ‘bunch of organized crooks’ (as John Adams put it) and others feel some of its practices ‘are in violation of the U.S. Constitution.’ Discover why experts agree the Fed is a banking cartel that benefits mainly bankers and their clients in need of ‘easy money’ and bailouts.”

AUGUST 17

1932 — BIRTH OF GABRIEL KOLKO, HISTORIAN, AUTHOR OF THE “TRIUMPH OF CONSERVATISM: A REINTERPRETATION OF AMERICAN HISTORY”

“To precisely what was [Woodrow] Wilson committed? I am for big business and against the trusts,’ but he could not define the major difference between the two, and he never gave the matter serious thought.”

NOTE: Wilson signed the Federal Reserve Act of 1913, establishing the Federal Reserve System, the largely private/corporate central banking system in the US.

AUGUST 18

1850 — DEATH OF HONORE DE BALZAC, FRENCH NOVELIST AND PLAYWRIGHT “The final battle for Christianity will be over the money problem, and until that is solved there can be no universal application of Christianity.” 2020 — ONLINE POSTING OF “MY JOURNEY” BY RICHARD COOK

“My study of U.S. financial history showed me that the paradigm had kicked into high gear when the Money Power took over the U.S. through the establishment of the Federal Reserve in 1913. It was then that a collection of evil forces gained control of the U.S. as they already had in Great Britain through the Bank of England. Soon came World War I, a conflict among nation-states and ideologies that has been continuous through today. “The Money Power aims at one thing: to rule the world and kill anyone who stands in their way. Of course Jesus foresaw all this when he threw the money changers out of the Temple and called the powerful of his day hypocrites and murderers. I think we can fairly call the ruling class of the U.S. today the same. Jesus also spoke of, “Your father the devil.” These words are also applicable.”

AUGUST 19

2003 — DEATH OF DONALD WINN, ASSISTANT TO THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

“The Federal Reserve system pays the U.S. Treasury 020.60 per thousand notes — a little over 2 cents each — without regard to the face value of the note. Federal Reserve Notes, incidentally, are the only type of currency now produced for circulation. They are printed exclusively by the Treasury’s Bureau of Engraving and Printing, and the $20.60 per thousand price reflects the Bureau’s full cost of production. Federal Reserve Notes are printed in 01, 02, 05, 10, 20, 50, and 100 dollar denominations only; notes of 500, 1000, 5000, and 10,000 denominations were last printed in 1945.”

This Week In Money by Greg Coleridge helps you understand the history of economics. Get TWIM delivered directly to your email inbox for free.