The Shape of US Populism

Henry C.K.  Liu

Part I: Legacy of Free Market Capitalism
Part II: Long-term Effects of the Civil War

Part III: The Progressive Era

This article appeared in AToL on March 27, 2008


The United States entered the twentieth century with impressive concrete achievements in political and economic reform derived from the ideological ferment of the final two decades of the nineteenth century. Still it has failed to this day to address, much less resolve, several of the fundamental contradiction and problems that had plagued the young nation from the very beginning.

The Civil War brought about the abolition of slavery but racial discrimination has continued unabated in US society and politics, keeping the nation divided along race lines, largely into two separate economies, two segregated societies and two antagonistic political cultures. Most equal opportunity among the races has been in the form of tokenism. Among those denied equal opportunity because of their race, the common complaint about tokenism is that the mainstream only lets in people who look like us, but not those who think like us.

The Race Issue

The race issue is now threatening to torpedo the near certain nomination of Barack Obama, born in the US of an African father and a white American mother, as Democratic candidate in the 2008 presidential campaign. The controversy on the seemingly shocking rhetoric of Reverent Jeremiah Wright, long-time mentor of a young Obama, and recently retired pastor of the Trinity United Church of Christ in Chicago, shows not the pastor’s views as extremist as much as how clueless the white mainstream is about the centuries-long anger and frustration the majority of its black brethrens are still laboring under.  Wright is not anti-US nor is he against what the nation’s ideals stand for; he is condemning those policies and practices that the US government and society have regularly forced on African American citizens in violation of the moral ideals of the nation. Can any self-respecting American do less? 

The mainstream US press has focused, sensationally and out of context, on Rev. Wright “God damn America” sermon. Readers can judge for themselves what Wright actually said:

“The [US] government gives them [African Americans] the drugs, builds bigger prisons [to incarcerate African Americans], passes a three-strike law [against African Americans] and then wants us to sing ‘God Bless America.’  No, no, no, God damn America, that’s in the Bible for killing innocent people...God damn America for treating our citizens as less than human. God damn America for as long as she acts like she is God and she is supreme.”

The test is less about Obama as a viable bi-racial candidate for president for being partially a product of the black political culture as much as about whether the United States can finally fulfill the national pledge of allegiance required of every grade school children of “one nation under God, indivisible, with liberty and justice for all.” The test is whether the US can accept Obama as president without molding him as another empty token of racial harmony.

There is no need for Obama to deny reality or to reject justifiable black rage against racial injustice. Obama’s message of moving on towards a coming together of all races is right on. The issue of racial and religious harmony is of critical geopolitical importance because the president of the United States is also a world leader in a world where over 70% of the population is non-white and 65% non-Christian. 

The Economic Issue 

The Civil War also destroyed agrarianism to firmly establish Federalism with policies that support economic centralization at the expense of economic democracy. By the end of the nineteenth century, populism had been co-opted into the two-party political system as progressive factions in both major parties. The subsequent period is known in history as the Progressive Era led by Theodore Roosevelt, William Howard Taft and Woodrow Wilson in national politics, three leaders of distinctly different ideologies.
can accept Obama as president without molding him as another empty token of racial harmony.

Continuing the populist movement, early twentieth-century progressive reformers campaigned against what they viewed as two related prime evils: growth of political corruption and the disturbing trend of government on all levels to grant, in the name of the national interest, special privileges and protection to organized wealth at the expense of popular wealth. Progressives professed a populist faith in the wisdom of the common people and insisted that good government must safeguard the common interest of all in the nation and respond to the voices of the common people. They worked to eliminate the control of government by political bosses and machines that were in the employ of narrow special interests, and to re-impose high standards of integrity and honesty along with transparency and accountability to make holders of public office more responsive to the general electorate.

Specifically, progressives were alarmed by the unhampered growth of monopolies that routinely resorted to unjust exploitation of farmers and workers. They wanted government to promote the general welfare of all the people and to protect small businesses from predatory assault by big business.

Progressivism Then and Now 

A century later, progressives in 2008 stand for practically all the same reform objectives as their comrades in 1908, even as the specifics and context have changed with time. 

Progressives in 1908 were conservative reformers rather than revolutionaries. They wanted to restore to the nation the early founding ideals of democratic government, individual liberty, the rule of law, and the protection of private property rights from predatory invasion by big business and big finance.  What progressives wanted was a new set of legislative mandates and regulatory tools needed to preserve these founding national ideals that had been increasingly corrupted by arrogant big business and big finance mentality in the industrial age.  In other words, they wanted socio-political progress to keep pace with techno-economic progress.

Progressives in 1908 did not merely want a rich economy at any cost; they wanted a rich economy not exclusively benefiting the rich elite and created not by making the majority poor, but by preserving fair economic equity among all the people to share fairly the fruits of progress. They did not merely want a strong nation; they wanted a strong nation the security of which did not depend on an outsized military; but on being a “shining city upon a hill,” an early self-image increasingly receding from reality a century after the nation’s founding.

The Shining City Upon a Hill

“The shining city upon a hill” was an image first invoked decades before the birth of the United States by John Winthrop (1587-1649), who was elected 12 times as governor of the Massachusetts Bay Colony of Britain, to guide his new Pilgrim homeland as a communal, non-capitalistic society, drawing from the Sermon on the Mount in which Jesus had addressed a large crowd:

“You are the light of the world. A city set on a hill cannot be hid. Nor do men light a lamp and put it under a bushel, but on a stand, and it gives light to all in the house. Let your light so shine before men, that they may see your good works and give glory to your Father who is in heaven.” (The Sermon on the Mount, Matthew 5:14-16)

Echoing previous references by Democratic president-elect John F. Kennedy in 1961 and unsuccessful Democratic presidential candidate Walter Mondale in 1984, Republican president Ronald Reagan invoked Winthrop’s image in his farewell speech to the nation on January 11, 1989:

“The past few days when I’ve been at that window upstairs, I've thought a bit of the “shining city upon a hill.” The phrase comes from John Winthrop, who wrote it to describe the America he imagined. What he imagined was important because he was an early Pilgrim, an early freedom man. He journeyed here on what today we’d call a little wooden boat; and like the other Pilgrims, he was looking for a home that would be free.”

Continuing with his sugarcoated Disneyland version of history, Reagan continued:

“I've spoken of the shining city all my political life, but I don’t know if I ever quite communicated what I saw when I said it. But in my mind it was a tall proud city built on rocks stronger than oceans, wind-swept, God-blessed, and teeming with people of all kinds living in harmony and peace, a city with free ports that hummed with commerce and creativity, and if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That’s how I saw it and see it still.”

The open doors to the shining city on the hill Reagan had in mind were meant for Soviet dissidents in the context of the Cold War. Pathetically, the current battle cry on the war against “illegal” immigrants by Reaganites is to close all the doors of the wall of the shining city upon a hill. The doors are closed for all practical purposes even for legal immigrants who routinely have to wait several years to get naturalized because of a large bureaucratic backlog. Multinational corporations are complaining that they have to relocate high-paying jobs overseas to skirt US immigration restriction on highly skill foreign workers.

The Freedom Myth

Reagan’s “early freedom man” Winthrop, who incidentally was a British colonial and not a US citizen since he died 172 years before the founding of the United States in 1776, and who, because of his long tenure as governor of the colony, began to assume the undemocratic role of a feudal lord, did not have much good to say about democracy and much less about liberty.  Winthrop saw to the hanging of Mary Latham and James Britton in 1644, both found in adultery, notwithstanding that he also admitted to an illicit encounter with a Native American woman at an abandoned settlement not far from his home. Many volunteers searched for him all night during his unexplained disappearance fearing for the worst, only to find him the next morning not far from home with a fantastic story to excuse his awkward absence from home and family.

New York governor Eliot Spitzer, who brought about much progressive reform on Wall Street to protect small investors, and in the process created more enemies in big finance than he could handle, did not manage to command the same moralistic elasticity four and a half centuries later on a similar matter of personal transgression, even though the rest of the world have moved far beyond Puritan morality.

, like his Puritan brethren, strove to establish a Christian community that held rigid uniform doctrinal beliefs that brooked zero tolerance for dissidents, leading to his presiding in 1638 over the heresy trial and subsequent banishment of Anne Hutchinson from the colony.

On liberty Winthrop wrote: “There is a twofold liberty, natural (I mean as our nature is now corrupt) and civil or federal. The first is common to man with beasts and other creatures. By this, man, as he stands in relation to man simply, hath liberty to do what he lists; it is a liberty to evil as well as to good. This liberty is incompatible and inconsistent with authority and cannot endure the least restraint of the most just authority. The exercise and maintaining of this liberty makes men grow more evil and in time to be worse than brute beasts: omnes sumus licentia deteriores. This is that great enemy of truth and peace, that wild beast, which all of the ordinances of God are bent against, to restrain and subdue it. The other kind of liberty I call civil or federal; it may also be termed moral, in reference to the covenant between God and man, in the moral law, and the politic covenants and constitutions amongst men themselves. This liberty is the proper end and object of authority and cannot subsist without it; and it is a liberty to that only which is good, just, and honest. This liberty you are to stand for, with the hazard (not only of your goods, but) of your lives, if need be. Whatsoever crosseth this is not authority but a distemper thereof. This liberty is maintained and exercised in a way of subjection to authority; it is of the same kind of liberty wherewith Christ hath made us free.”

Under Winthrop’s moral liberty, God help those who think, let alone act, independently of authority. The term "Puritan" first began as a taunt or insult applied by traditional Anglicans to those who criticized or wished to "purify" the Church of England. “Puritan” refers to two distinct groups: “separating” Puritans, such as the Plymouth colonists, who believed that the Church of England was corrupt and that true Christians must separate themselves from it; and non-separating Puritans, such as the colonists who settled the Massachusetts Bay Colony, who believed in reform but not separation and wished to reform the established church, largely Congregationalists who believed in forming churches through voluntary compacts.  The idea of compacts or covenant was central to the Puritan conception of social, political, and religious organizations.  Belief in predestination differentiates Puritans from other Christians. Salvation is determined by God’s sovereignty, including choosing those who will be saved and those who will receive God’s irresistible grace.

As such, Winthrop also subscribed to the belief that the native peoples who lived in the hinterlands around the colony had been struck down by God, who sent disease among them because of their non-Christian beliefs:

“But for the natives in these parts, God hath so pursued them, as for 300 miles space the greatest part of them are swept away by smallpox which still continues among them. So as God hath thereby cleared our title to this place, those who remain in these parts, being in all not 50, have put themselves under our protection.”

God Clearing Our Title to this Land

Notwithstanding Winthrop’s dubious claim of “God clearing our title to this land”, which made a farce of the principle of private property rights, particularly when such clearing had been accomplished by biological terrorism, the historical fact was that smallpox was spread to Native Americans by the biological terrorism practiced by Lord Jeffrey Amherst, commanding general of British forces in North America during the final battles of the so-called French & Indian war (1754-1763).

distributed smallpox-infected blankets as instruments of germ warfare against Native Americans, as reported in Carl Waldman’s Atlas of the North American Indian. Waldman writes, in reference to a siege of Fort Pitt (Pittsburgh) by Chief Pontiac's forces during the summer of 1763:

“... Captain Simeon Ecuyer had bought time by sending smallpox-infected blankets and handkerchiefs to the Indians surrounding the fort -- an early example of biological warfare -- which started an epidemic among them. Amherst himself had encouraged this tactic in a letter to Ecuyer.” [p. 108]

As president, Reagan’s official attitude on HIV/AIDS as God’s punishment for homosexuals did much to forestall effective early prevention of a global epidemic. Political support for Reagan came primarily from the newly-organized religious right as represented by the Moral Majority, a right-wing political-action group founded by the Reverent Jerry Falwell who proclaimed with religious authority: “AIDS is the wrath of God upon homosexuals.” Reagan’s communications director Pat Buchanan echoed that AIDS is “nature’s revenge on gay men.” AIDS became the convenient weapon and gay men the easy target, for the Reagan era politics of fear, hate and discrimination that carried on the “shining city on the hill” tradition of John Winthrop. In reality, socio-medical data show that innocent African American women, not sinful gay men, are the largest AIDS-infected group. Over 57% of all infected children were black in a population in which blacks constitute only 13%.

Taxes and War

Reagan also said in his farewell speech: “Common sense told us that when you put a big tax on something, the people will produce less of it.”

By this simplistic logic, there should be a big tax on war to produce less war and more peace. Yet, instead of a big tax on war, the Reagan administration provided a big subsidy for foreign wars, producing the largest national debt in history by big spending on offensive arms. The financial statistics of war in the US economy show definitively that war has been highly profitable for big business as most war purchases are directed towards the private sector. The current concern about the two foreign wars draining funds from domestic needs is part of the revived wave of populism. War spending is a big factor in the strong corporate earnings that silly pundits continue to refer to as sign of fundamental strength in the economy in the face of a total collapse of the financial sector.

The moral imperialism of US foreign policy is based not on what Reagan believed is “a tall proud city built on rocks stronger than oceans” but on an illusionary fantasy built on the quick sand of self indulging morality. As a nation, the US is probably not better or worse morally than other nations. What makes the US dangerous as the world’s sole remaining superpower is its transformational foreign policy to “enlarge democracy” based on an unjustified self-image of self-righteous moral superiority. God may be on the side of the US, but facts are not.

Teddy Roosevelt – the First Progressive President

With the assassination of President McKinley in 1901, Theodore Roosevelt, not quite 43, became the youngest President in the Nation’s history and served two terms until 1909. Roosevelt reversed the pro-big-business polices of McKinley with progressive policies.  The official White House biography of Roosevelt read:

“He brought new excitement and power to the Presidency, as he vigorously led Congress and the American public toward progressive reforms and a strong foreign policy.  He took the view that the President as a ‘steward of the people’ should take whatever action necessary for the public good unless expressly forbidden by law or the Constitution. … As President, Roosevelt held the ideal that the Government should be the great arbiter of the conflicting economic forces in the Nation, especially between capital and labor, guaranteeing justice to each and dispensing favors to none. Roosevelt emerged spectacularly as a "trust buster" by forcing the dissolution of a great railroad combination in the Northwest. Other antitrust suits under the Sherman Act followed. Roosevelt steered the United States more actively into world politics. He liked to quote a favorite proverb, ‘Speak softly and carry a big stick.’ Aware of the strategic need for a shortcut between the Atlantic and Pacific, Roosevelt ensured the construction of the Panama Canal. His corollary to the Monroe Doctrine prevented the establishment of foreign bases in the Caribbean and arrogated the sole right of intervention in Latin America to the United States. He won the Nobel Peace Prize for mediating the Russo-Japanese War, reached a Gentleman's Agreement on immigration with Japan, and sent the Great White Fleet on a goodwill tour of the world. Some of Theodore Roosevelt’s most effective achievements were in conservation. He added enormously to the national forests in the West, reserved lands for public use, and fostered great irrigation projects.”

was followed as president by William Howard Taft. According to official White House biography:

“[Taft] was caught in the intense battles between Progressives and conservatives. … He pledged his loyalty to the Roosevelt program, popular in the West, while his brother Charles reassured eastern Republicans. William Jennings Bryan, running on the Democratic ticket for a third time, complained that he was having to oppose two candidates, a western progressive Taft and an eastern conservative Taft. Progressives were pleased with Taft’s election. ‘Roosevelt has cut enough hay,’ they said; ‘Taft is the man to put it into the barn.’ Conservatives were delighted to be rid of Roosevelt--the ‘mad messiah.’ Taft recognized that his techniques would differ from those of his predecessor. Unlike Roosevelt, Taft did not believe in the stretching of Presidential powers. He once commented that Roosevelt ‘ought more often to have admitted the legal way of reaching the same ends.’ Taft alienated many liberal Republicans who later formed the Progressive Party, by defending the Payne-Aldrich Act which unexpectedly continued high tariff rates. … In 1912, when the Republicans re-nominated Taft, Roosevel bolted the party to lead the Progressives, thus guaranteeing the election of Woodrow Wilson.”

Notwithstanding the co-optation of populism into the progressive wings of the two-party system, the presidential election of 1912 was contested by three major candidates, two of whom had previously won election to the highest office of the land.

Incumbent Republican President William Howard Taft was re-nominated with the support of the conservative wing of the party. Frustrated, former Republican President Theodore Roosevelt, supported by the populist faction, formed a new Progressive Party (nicknamed the “Bull Moose Party”, a name derived from his response to press question about his health that he was “as fit as a bull moose”.

Woodrow Wilson – Populist Democrat

Democrat Woodrow Wilson was nominated only on the 46th ballot of a contentious convention, helped finally by the support of populist William Jennings Bryan and the delegates Bryan controlled. In the election Wilson won a large majority of electoral votes with only 42% of the popular vote and became the only Democrat in the White House over a period of four decades from 1892 to 1932, and only the third Democrats to be elected President since 1856.

Progressive Party candidate Roosevelt won 27.4% of the popular vote with 88 electoral votes, drawing votes mostly from Taft, thus spoiling the conservative Republican plans to stay in the White House for another term. After Roosevelt in 1912, no other third-party candidate again came in second in the Electoral College, though several had become spoilers to derail major party plans to gain the White House. In 1916, Roosevelt won as the Republican candidate. In 1924, Robert M. La Follette ran as candidate for the Progressive Party and won 16.6% of the popular vote with 13 electoral votes. Since 1924, only three third-party candidate manage to get more than the average 5.6% of the popular vote received by third-party candidates: George Wallace in 1968 winning 13.5% of the popular vote with 46 electoral votes; John B. Anderson in 1980 winning 6.6% of the popular vote with no electoral votes; and H. Ross Perot winning 18.9% of the popular vote with no electoral votes and Perot again in 1996 winning 8.4% of the popular vote with no electoral votes.

The Populism of the 1912 Democratic Platform

The 1912 Democratic platform, heavily influenced by Southern populists, and repeating the demands of the 1908 platform, declared

“it to be a fundamental principle of the Democratic Party that the Federal government, under the Constitution, has no right or power to impose or collect tariff duties, except for the purpose of revenue, and we demand that the collection of such taxes shall be limited to the necessities of government honestly and economically administered. The high Republican tariff is the principal cause of the unequal distribution of wealth; it is a system of taxation which makes the rich richer and the poor poorer; under its operations the American farmer and laboring man are the chief sufferers; it raises the cost of the necessaries of life to them, but does not protect their product or wages. The farmer sells largely in free markets and buys almost entirely in the protected markets. In the most highly protected industries, such as cotton and wool, steel and iron, the wages of the laborers are the lowest paid in any of our industries. We denounce the Republican pretence on that subject and assert that American wages are established by competitive conditions, and not by the tariff.”

Free Trade and Populism

A century later, on the issue of free trade, US populism in 2008 takes the opposite from the anti-tariff position of populism in 1908 that crystallized in the 1912 Democratic platform. This is because US farmers in 1908 were disadvantaged by having to sell their produce in free market and to buy their needs in protected markets, as agricultural land by nature could not be moved overseas. In contrast, US workers in 2008 find domestic markets for their labor declining as corporations move their factories overseas to capture low wage advantages. As the US became a global industrial and financial superpower after the Cold War, big business no longer needs protected markets at home, but instead wants to keep the home market open in order to convince other nations to reciprocate with open markets promoted by neoliberal globalization propaganda, while US workers finally wake up to the need for protective tariffs to prevent cross-border wage arbitrage by US-based transnational corporations.

The fact remains that weak economies around the world now are not acting in their national interest by adopting US promoted globalized free trade, anymore than the US in 1908 would be if it had adopted British promoted globalized free trade. The high tariff advocates of 1908 served the US national interest in their effort to protect underdeveloped US industries, while populist opposition to high tariff was based on narrow sectional interest.
  What made high tariff a target of the populists was the unwillingness of the Northern financiers and big-business leaders to share equitably the benefits of protectionism with the agricultural South.

Populism today remains a power struggle between the financial elite and the common people, only the battle ground has shifted 180 degrees between 1908 and 2008 due to the rise of the US as the world’s sole economic superpower. Populists in 2008 do not oppose free trade as such; they oppose the unfair terms of so-called free trade that unjustly exploit the working poor of not just the US but of the whole world.

Such unfair terms of trade cannot be corrected by re-imposing high tariffs. They can only be corrected by the adoption of a new international finance architecture to eliminate dollar hegemony which forces weak economies to seek export-led growth at the expense of domestic development; and to adopt global labor standards that aim at equalizing wages to make cross-border wage arbitrage unprofitable, not by pushing down wages everywhere, but by pushing wages up in the new exporting economies. Further, free international movement of capital must be accompanied by free international movement of labor. Until then, free trade is just another name for economic imperialism that exploits working people everywhere for high corporate profits.

The 1912 Democratic platform also decried the high cost of living as a serious problem in every American home caused by the Republican protective tariff and “from trusts and commercial conspiracies fostered and encouraged by such laws” and asserted that “no substantial relief can be secured for the people until import duties on the necessaries of life are materially reduced and these criminal conspiracies broken up.”  The rise of cost of living in 2009 comes not from high tariffs, but from high corporate profits derived from low wages that failed to keep pace with inflation.

Against Monopolies

The 1912 Democratic platform asserted that “a private monopoly is indefensible and intolerable” and called for “vigorous enforcement of the criminal as well as the civil law against trusts and trust officials” and demanded “the enactment of such additional legislation as may be necessary to make it impossible for a private monopoly to exist in the United States.” Until the collapse of the debt market in August 2007, easy and low-cost credit was the force behind the mergers and acquisition mania in the corporate world that inevitably led to layoffs of thousands of workers to produce the needed profit margin to repay the leveraged buyout loans.

The 1912 Democratic platform declared its support for the declaration by anti-trust laws upon which corporations shall be permitted to engage in interstate trade, including, among others, the prevention of holding companies, of interlocking directors, of stock watering, of discrimination in price, and the control by any one corporation of so large a proportion of any industry as to make it a menace to competitive conditions.” In 2008, Anti-trust is in a sham. Every sector of the economy is now dominated by less the five, frequently only three major corporate players.

The 1912 Democratic platform condemned “the action of the Republican administration in compromising with the Standard Oil Company and the tobacco trust and its failure to invoke the criminal provisions of the anti-trust law against the officers of those corporations after the court had declared that from the undisputed facts in the record they had violated the criminal provisions of the law.” In 1980, oil companies have been re-merging into giant corporations to “improve efficiency.”

The 1912 Democratic platform expressed “regret that the Sherman anti-trust law has received a judicial construction depriving it of much of its efficiency and we favor the enactment of legislation which will restore to the statute the strength of which it has been deprived by such interpretation.” The current Supreme Court cannot be described as a liberal court by any stretch of imagination.

On the issue of anti-trust, there is little progress between 1908 and 2008. The progress made during the Progressive Era and the New Deal Era has since been erased by neoliberal market fundamentalism of the past two decades. Corporate monopolistic gigantism is now controlling the US economy to an extent comparable to the age of robber barons.

Government Protection of the People from Injustice

The 1912 Democratic platform insisted “upon the full exercise of all the powers of the Government, both State and national, to protect the people from injustice at the hands of those who seek to make the government a private asset in business.”  The populist tone of the 2008 presidential campaign seems to echo the 1812 Democratic platform.

Income Tax and Popular Election of Senators

The 1912 Democratic platform called authorizing an income tax, and the Constitution amendment providing for the popular election of senators, legislation in each State which will permit the expression of the preference of the electors for national candidates at presidential primaries, the enactment of a law prohibiting any corporation from contributing to a campaign fund and any individual from contributing any amount above a reasonable maximum. These demands have since been realized by the Wilson administration. Yet the progressivity of the income tax has been diluted by all Republican administrations since.

Railroads, Express Companies, Telegraph and Telephone Lines

The 1912 Democratic platform called for “the efficient supervision and rate regulation of railroads, express companies, telegraph and telephone lines engaged in interstate commerce. To this end we recommend the valuation of railroads, express companies, telegraph and telephone lines by the Interstate Commerce Commission, such valuation to take into consideration the physical value of the property, the original cost, the cost of reproduction, and any element of value that will render the valuation fair and just.” 

The 1912 Democratic platform called for “such legislation as will effectually prohibit the railroads, express, telegraph and telephone companies from engaging in business which brings them into competition with their shippers or patrons; also legislation preventing the overissue of stocks and bonds by interstate railroads, express companies, telegraph and telephone lines, and legislation which will assure such reduction in transportation rates as conditions will permit, care being taken to avoid reduction that would compel a reduction of wages, prevent adequate service, or do injustice to legitimate investments.”

Banking Legislation

The 1912 Democratic platform opposed “the so-called Aldrich bill or the establishment of a central bank; and we believe our country will be largely freed from panics and consequent unemployment and business depression by such a systematic revision of our banking laws as will render temporary relief in localities where such relief is needed, with protection from control of dominion by what is known as the money trust.”

The platform further stated that “Banks exist for the accommodation of the public, and not for the control of business. All legislation on the subject of banking and currency should have for its purpose the securing of these accommodations on terms of absolute security to the public and of complete protection from the misuse of the power that wealth gives to those who possess it.”

The 1912 Democratic platform condemned “the present methods of depositing government funds in a few favored banks, largely situated in or controlled by Wall Street, in return for political favors, and we pledge our party to provide by law for their deposit by competitive bidding in the banking institutions of the country, national and State, without discrimination as to locality, upon approved securities and subject to call by the Government.”

Progressive opposition to central banking has been vindicated by the recurrence of financial crises over the 85 years of Fed history. The 1912 Democratic platform was prescient in that the central banks can be counted on to fund debt bubbles but cannot be counted on to deliver price stability. The debt bubble of the 1990’s and the subsequent collapse of the debt market in 2007 can be traced directly to the door of Federal Reserve under the 19-year-long chairmanship of Alan Greenspan.
Next: A Panick-Striken Federal Reserve