{"id":55965,"date":"2015-03-30T12:00:43","date_gmt":"2015-03-30T11:00:43","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=55965"},"modified":"2015-05-05T21:25:54","modified_gmt":"2015-05-05T20:25:54","slug":"presidents-bankers-the-neo-cold-war-and-the-world-bank","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2015\/03\/presidents-bankers-the-neo-cold-war-and-the-world-bank\/","title":{"rendered":"Presidents, Bankers, the Neo-Cold War and the World Bank"},"content":{"rendered":"

Mar23, 2015 – <\/em>At<\/strong> first glance, the neo-Cold War between the US and its post WWII European Allies vs. Russia over the Ukraine, and the stonewalling of Greece by the Troika might appear to have little in common. Yet both are manifestations of a political-military-financial power play that began during the first Cold War. Behind the bravado of today\u2019s sanctions and austerity measures lies the decision-making alliance that private bankers enjoy in conjunction with government and multinational entries like NATO and the World Bank.<\/p>\n

It is President Obama\u2019s foreign policy to back the Ukraine against Russia; in 1958, it was the Eisenhower Doctrine that protected Lebanon from a Soviet threat. For President Truman, the Marshall Plan arose partly to guard Greece (and other US allies) from Communism, but it also had lasting economic implications. The alignment of political leaders and key bankers was more personal back then, but the implications were similar to the present day. US military might protected its major trading partners, which in turn, did business with US banks. One power reinforced the other. Today, the ECB\u2019s QE program funds swanky Frankfurt headquarters and prioritizes Germany’s super-bank, Deutschebank and its bond investors above Greece\u2019s future.<\/p>\n

These actions, then and now, have roots in the American ideology of melding military, political and financial power that flourished in the haze of World War II.\u00a0 It\u2019s not fair to pin this triple-power stance on one man, or even one bank; yet one man and one bank signified that power in all of its dimensions, including the use of political enemy creation to achieve financial goals. That man was John McCloy, \u2018Chairman of the Establishment\u2019 as his biographer, Kai Bird, characterized him. The relationship between McCloy and Truman cemented a set of public-private practices that strengthened private US banks globally at the expense of weaker, potentially Soviet (now Russian) leaning countries.<\/p>\n

John McCloy and the World Bank Twist<\/strong><\/p>\n

In 1947, President Truman selected then-partner at a Rockefeller law firm, John McCloy, to be the second president of the World Bank (or International Bank of Reconstruction and Development) that would provide financial aid to developing nations after WWII. McCloy demanded the ability to unilaterally restructure the nascent World Bank\u2014absent Congressional debate \u2013such that its bonds would be sold through Wall Street banks.<\/p>\n

That linkage altered the future of global financial relationships, by \u00a0transforming the World Bank into a securities vending machine for private banks that would profit from distributing these bonds globally, while augmenting World Bank aid with private loans.<\/p>\n

World Bank, IMF and other multinational entity decisions about aid vs. austerity or any other \u2018reform\u2019 requirements including opening border to private banks, would be controlled by the capital markets. Big private global banks arrange, underwrite and distribute World Bank bonds. Small banks in Greece did not. Financial assistance terms were established to follow a similar hierarchy.<\/p>\n

During the Cold War, the World Bank provided funds for countries that leaned toward capitalism versus communism.\u00a0 Political allies of the United States got better treatment (and still do). The Nations that private bankers coveted for speculative and lending purposes saw their debt loads increase substantially and their industries privatized. \u00a0Equally, the bankers decided which bonds they could sell to augment public aid funds, which meant they would have control over which countries the World Bank would support. \u00a0The World Bank did more to expand US banking globally than any treaty or entity that came before it.<\/strong><\/p>\n

The Marshall Plan and Eisenhower\u2019s Rise<\/strong><\/p>\n

Another pillar of global reconstructive and foreign policy efforts, the Marshall Plan, would provide further a ide to \u201cfriendly\u201d countries in the early years of the Cold War. \u00a0Truman unveiled the Marshall Plan in the spring of 1947. He presented it as a way to counter the threat of Communism, warning that Europe was disintegrating economically, and Truman feared Greece and Turkey would fall victim to Communist control. America\u2019s new enemy was not Germany nor the Nazis but Communism and its associated countries.<\/p>\n

Under the Marshall Plan, Congress approved $13 billion to aid Europe\u2019s fight against Communism, and also to bolster prime trading partners for American industries and banks. As a result, more currencies became available for conversion into US dollars. The Marshall Plan wasn\u2019t just about helping allies: but about spreading dollar domination.<\/p>\n

Chase (now JPM Chase) Chairman, Winthrop Aldrich enthusiastically supported the Marshall Plan. To big banks, lending to developing nations and fighting Communism amounted to the same thing. Plus, the Marshall Plan effectively gave each major US bank its own European country to play in. From 1948 to 1952, Chase amassed the most deals in Europe, nearly $1 billion, followed by National City Bank (now Citigroup).<\/p>\n

Eisenhower, NATO & Bankers<\/strong><\/p>\n

In 1952, General Dwight D. Eisenhower was commander of the North Atlantic Treaty Organization (NATO), the new military alliance established between the United States, Canada, and leading Western European powers to deter Soviet expansion, and promote European political integration. NATO blended military, political, and economic<\/strong> power behind the mantra, \u201can armed attack against one or more of [the allied countries] shall be considered an attack against them all.\u201d. \u00a0In practice, what held for military support, held for opening borders to dollar based trade and private banking business, too.<\/p>\n

In the spring of 1952 Aldrich traveled to Europe with an entourage of power brokers to persuade Eisenhower to run for president on the Republican ticket. Upon election victory, Ike\u2019s banker sphere of appointees included his secretary of war, Thomas Gates, who would later chair the Morgan Guaranty Bank (now JPM Chase), Aldrich who became Ike\u2019s ambassador to Great Britain, and John McCloy, who would spend the Eisenhower years as chairman of the Chase National Bank (now JPM Chase) assuming Aldrich\u2019s role.<\/p>\n

Beside the Marshall Plan, the Truman and Eisenhower doctrines extended US military and economic support to nations that adopted US ideology and that were military allies. Overseas offices of major US banks subsequently swelled to accommodate all the private loan demand that accompanied government support.<\/p>\n

In 1956, W. Randolph Burgess, former National City Bank Vice President, left his Treasury Department post to become the US ambassador to NATO. By that time, the luster of NATO was fading. By 1963, Burgess noted that \u201cthe shine of postwar NATO was getting a little dull.\u201d Stronger European countries felt less threatened by Soviet aggression and this made them less pliable to US policies. In addition, their European\u00a0 banks began spreading their wings globally again. The financial end of the cold war was preceding the diplomatic end by decades.<\/p>\n

The International Bank Race<\/strong><\/p>\n

US bankers sought to compete with strengthening European banks by opening more offices overseas and by fighting to eliminate New Deal regulatory restrictions so they could grow domestically and use their size as a broader lending springboard.<\/p>\n

Fast forward sixty years later to today , and those seeds of political-military-financial partnerships against the threat of the Soviet Union (now Russia) have sprouted to support US banks and dollar, and US monetary and fiscal policy supremacy the world over.<\/p>\n

Much has happened in between; mass deregulation of international banking, technological advancements in trading, and the use of the World Bank (and the IMF and various central banks) to subsidize bank led speculation by submitting weak countries to austerity measures or \u2018bailouts\u2019, thereby prioritizing payments to bondholder clients of mega-banks over economic stability. The Big Six banks in the US, a subset of the 30 G-SIBs (global systemically important banks) enjoy a magnitude of government, central bank and multinational entity support that would have been unimaginable back then.<\/p>\n

Whether it\u2019s a $17 billion bailout package for the Ukraine. or a $270 billion one for Greece, or Obama doing a 180 on Cuba to keep Russia out, the costs of power alignments are greater than ever for the smaller, weaker countries. Their economic coffers have been pried open by the Western super-powers still calling the political, military and financial shots and again using threats of Russian \u2018aggression\u2019 to camouflage expansionary intents.<\/p>\n

Under Obama, the US is resurrecting the Cold War and invigorating NATO by promoting the threat notion, just as Truman and Eisenhower did.\u00a0 Financial supremacy and currency dominance remain central to this strategy. But this time, there\u2019s a more dangerous difference \u2013 a level of financial opposition that could become military opposition if sufficiently provoked. The counter-movement from a currency and financial perspective is comparatively small. But it\u2019s growing. \u00a0The global position of super-powers and super-banks remains at play in this newly sanctioned financial Cold War.<\/p>\n

For more on historical foundations for present decisions, read: All the Presidents\u2019 Bankers: The Hidden Alliances that Drive American Power (out now in paperback<\/a>). Also, please\u00a0watch my interview with Max Keiser<\/a>.<\/p>\n

________________________________<\/p>\n

Nomi Prins is a journalist, author and speaker.<\/a>\u00a0Her latest book, <\/em>All the Presidents’ Bankers<\/a>, is a groundbreaking narrative about the relationships of presidents to key bankers over the past century and how they impacted domestic and foreign policy.\u00a0Her other books include a historical novel about the 1929 crash, <\/em>Black Tuesday<\/a>, and the hard-hitting expose\u00a0It Takes a Pillage: Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street (Wiley, September, 2009<\/a>\/October 2010). She is also the\u00a0author of\u00a0<\/em>Other People\u2019s Money: The Corporate Mugging of America<\/a>\u00a0which was chosen as a Best Book of 2004 by\u00a0The Economist, Barron’s and The Library Journal, and\u00a0<\/em>Jacked<\/a>. She has appeared on numerous TV programs: internationally for <\/em>BBC, RtTV, and nationally for <\/em>CNN, CNBC, MSNBC, CSPAN, Democracy Now, Fox and <\/em>PBS. Her writing has been featured in\u00a0<\/em>The New York Times, Fortune,\u00a0Newsday, Mother Jones, The Daily Beast, Newsweek, Truthdig<\/a>, The Guardian, The Nation and other publications. She is currently a Senior Fellow at the non-partisan public policy think-tank, Demos<\/a>.<\/em><\/p>\n

Go to Original \u2013 nomiprins.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Behind the bravado of today\u2019s sanctions and austerity measures lies the decision-making alliance that private bankers enjoy in conjunction with government and multinational entries like NATO and the World Bank. Today, the ECB\u2019s QE program funds swanky Frankfurt headquarters and prioritizes Germany’s super-bank, Deutschebank and its bond investors above Greece\u2019s future.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[146],"tags":[],"class_list":["post-55965","post","type-post","status-publish","format-standard","hentry","category-economics"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/55965","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=55965"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/55965\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=55965"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=55965"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=55965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}