CAPITALISM IS NOT US: America Mugged By Mercantilism

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by Wayne Jett, Classical Capital:

America does not have a capitalist economy, nor has America been capitalist within the life spans of anyone living or their grandparents. Yet capitalism is blamed for every economic ill, and presently – yet again – the call is sounded to reform capitalism. Here is a more accurate phrasing of what our policy goals should be in 2019: End mercantilism and install a capitalist economy.

Mercantilism Defined
     To begin, “mercantilism” is the unduly respectable title given by academics to political-economic conditions imposed on multiple nations during and after the Middle Ages by powerful families, sometimes called “kingmakers.” The kingmakers’ wealth enabled them to place monarchs on thrones to rule over defined nations or geographic areas. Once enthroned, the monarch rewarded his (or her) sponsors with commercial licenses and franchises. The mercantilist web of mutual financial, political and military support developed from there throughout western civilization.
     The rules and practices by which the American economy operates are not set by private businesses – certainly not by the type of businesses commonly known as “Main Street.” The U. S. government has set rules and practices to favor those who control the government; namely, the powerful “pecuniary force” described in 1880 by Henry George as writing laws and molding thoughts in every nation.
The Global Elitist Cabal
     The “pecuniary force” George warned us about is now often described as the “global elitist cabal,” or something similar. This cabal is comprised of an alliance of very rich families and organizations exemplified in America by the “Too Big To Fail” Wall Street banks, which are majority owned and controlled by the cabalists.
     To say that the cabalists have also owned and controlled the federal government in Washington, D.C., is more understatement than exaggeration. Mercantilist influences created conditions for an especially powerful network for exerting influence in Washington, now commonly called “the Swamp.” All of this identifies America’s economy as mercantilist, not capitalist, and major mercantilist influences have been present since colonial times.
Mercantilist For How Long?
     To evidence this point, consider the private letter written in 1933 by Franklin D. Roosevelt to Edward M. House during FDR’s first year as U. S. president. House had been Wall Street’s primary handler of President Woodrow Wilson when Wilson broke campaign pledges by signing laws creating the graduated tax on earned income and placing the Federal Reserve Board in control of the nation’s money.
     FDR told House in his letter: “The real truth … is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson—and I am not wholly excepting the administration of [Woodrow Wilson].” The Fruits of Graft, p. 242. Of course, President Jackson left office in early 1837 after completing two terms, during which he battled and terminated the privately owned central bank existing when he took office in 1829.
Mercantilism’s Capstone – The Federal Reserve
 

     With that foundation, here is the capstone of mercantilism in America as it exists in 2019. A private corporation called the Federal Reserve Board – a central bank majority owned and controlled by the global elitist cabal – in 1913 was given management of America’s “money,” with each dollar being valued at $20.67/oz of gold. In 1933, FDR ended the right of Americans to exchange dollars for gold and, on January 31, 1934, devalued each dollar to $35/oz.

     On August 15, 1971, President Richard Nixon ended the right of foreigners to exchange U. S. dollars for gold. The next year Congress authorized the Federal Reserve to manage the dollar’s value as a fiat currency, “floating” in value as markets determine with respect to value of other currencies and without a guaranteed value relative to gold.
     Fiat currency is a mere paper promise to deliver ambiguously defined value. Every fiat currency in history has failed. Those who ply the scheme – the global elitist cabal – enrich themselves by exchanging the fiat currency for fixed assets within nations which enact laws making the fiat currency for all debts public and private.
Keynes Mutiny Embraces Mercantilism
     After the U. S. dollar was made the world’s international reserve currency at the Bretton Woods conference in 1944, who became the leading theoretician of American economic policy? That was John Maynard Keynes, the former professor of classical economics at Cambridge University in England, whose father held the same professorial position before him. But Keynes, the son, abruptly abandoned classical economic theory in 1936 by writing The General Theory of Employment, Interest and Money.
     The preeminent authority on mercantilism in 1946 was the Swedish economist Eli F. Heckscher, whose two-volume work on the subject remains authoritative, wrote that Keynes had devoted nearly an entire chapter of The General Theory to an attempt to rehabilitate mercantilism. Keynes’ views of economic relationships, Heckscher wrote, were “strikingly similar to those of the mercantilist,” even though Keynes professed views of “social philosophy” (favoring interests of common people) were the “very opposite” of mercantilist social views.
     Is it not clear that Keynes’ The General Theory became the cornerstone of American economic policy and the “holy grail” of American academia? Our government, economy and society are dominated by the global elitist cabal which imposes a mercantilist economy on us. Yes, indeed, it is crystal clear.
Fed Regulation of Main Street Banking
     Though proof abounds placing the American economy squarely in the camp of mercantilism – not at all capitalist – there is at least one more point deserving to be made. After the “financial terrorism” of 2008, Congress labored mightily and produced the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank, among other monstrosities, provided authority for the Federal Reserve to regulate the despised step-children of TBTF Wall Street bankers: the regional and community banks across the country who customarily lend to small businesses, farmers and other less-than-national customers.
     In case you may not recall, the Fed proceeded to reduce lending by the smaller banks so much so that – in order for those banks to survive – the Fed adopted an unprecedented practice of paying a small stipend of interest on un-invested bank reserves. This permitted some banks to survive which otherwise may not have, but still left the small business community in need of banking services during an economic depression which dragged on through the Obama presidency.
Battling the Global Elitist Cabal
     If you look for evidence….

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