All the Presidents' Bankers: The Hidden Alliances That Drive American Power by Nomi Prins

Author:Nomi Prins [Prins, Nomi]
Language: eng
Format: epub
Tags: Corporate & Business History, American Government, 20th Century, General, United States, Political Science, Business & Economics, History
ISBN: 9781568584911
Google: 5dK6AQAAQBAJ
Publisher: Nation Books
Published: 2014-04-08T21:23:32+00:00

Regarding the Great Society, bankers were also becoming lukewarm. In truth, the success of those policies mattered less to bankers than overseas growth did. As long as bankers were making money and increasing their global influence, what happened domestically was of secondary importance; providing support to Johnson was no hardship. But now they were growing wary of backing Johnson’s efforts.

In 1966 Johnson signed the Participation Sales Act, which encouraged substitution of public credit with private credit. The initiative, started by Eisenhower and extended by President Kennedy’s 1962 Committee on Federal Credit programs, was meant to be a favor to the bankers.68 By replacing $3.3 billion in outstanding public debt (through government-issued bonds) with private debt (or bank-issued bonds), the government effectively converted public loans into private loans for the banks, giving them $3.3 billion of business guaranteed by the US government.

Soon after the bill was signed, Johnson’s aide Robert Kintner suggested that Johnson form a confidential program to determine how “important business, financial, and industrial leaders feel toward the job being done by the President and particularly how they feel in relation to the Vietnam operation, the President’s European and Latin American policies, the character and duration of prosperity, and the President’s economic, financial and social policies.”

The survey would be based on off-the-record interviews with prominent figures including David Rockefeller, Sidney Weinberg, Roger Blough, and Bobby Lehman.69 But Johnson preferred the route of his private soirées at the White House, which increased in frequency as public opinion turned against the war. As long as the finance and business community could be swayed to support the war, he figured, funding would continue unabated.

War and Taxes

By mid-1967, war and inflation and antiwar demonstrations were escalating, and Johnson was getting increasingly nervous. In August, he held one of his regular off-the-record, no publicity luncheons with the usual crew to gain validation for his domestic and war-related strategies. The “old warrior” Sidney Weinberg came through. He submitted a statement to the House Ways and Means Committee on September 13 in which he urged Congress to give “prompt and favorable consideration” to Johnson’s request for the 10 percent surtax to protect the credit and capital market and “to help finance the war in Vietnam and to prevent an inflationary boom.” Weinberg closed his statement by stressing the importance to the health of the economy that “nothing be done in this legislation to impair the incentives offered to business in the foreign tax credit and the investment tax credit.”70

New First National City Bank president Walter Wriston also supported the war surtax bill, not because of any opinions about the war but primarily because he wanted lower rates to fund expansion. He said that the rising interest rates caused by the union of greater private and government borrowing would worsen in the absence of the surtax.

Wall Street had just undergone an inevitable power shift that placed Wriston in a more influential position in such political-financial matters. In June 1967, Time ran a story titled “Banking: The Plum

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.