Wall Street's Darkest Hour, Then and Now?
By Staff News & Analysis - December 05, 2011

The Man Who Busted the 'Banksters' … The public was just beginning to get a taste for the retribution that Pecora was dishing out. In June 1933, his image appeared on the cover of Time magazine, seated at a Senate table, a cigar in his mouth. Pecora's hearings had coined a new phrase, "banksters" for the finance "gangsters" who had imperiled the nation's economy, and while the bankers and financiers complained that the theatrics of the Pecora commission would destroy confidence in the U.S. banking system, Senator Burton Wheeler of Montana said, "The best way to restore confidence in our banks is to take these crooked presidents out of the banks and treat them the same as [we] treated Al Capone." – Smithsonian

Dominant Social Theme: Get rid of the corruption! The US Fedgov needs to clean up the mess on Wall Street …

Free-Market Analysis: Here's an idea. Let's take down Wall Street. The wars aren't working very well. Too many fingers are being pointed at government and people are plain angry. Better blame Wall Street! Or failing that, the "one percent."

We've spent a great deal of time pointing out that the current demos are controlled at the top. What's going on is NOT coincidental, in our view. First, references to Pecora. Now the article itself in Smithsonian (on a blog anyway).

Even the use of the nomenclature "bankster!" Coincidence? Maybe. But follow the dominant social themes of the power elite long enough, and you may find yourself detecting certain melodies. Even the subtlest harmonies …

And one we have heard now for a number of months is the swelling symphony of indignation against "Wall Street." Of course, there is no such thing as Wall Street, not really, which is actually another sign. But that's the way these fear-based promotions work.

That's what the top elites are good at doing, outside of making war. They demonize groups and turn people against one another by applying certain labels repeated over and over in the mainstream press. Divide and conquer, it's called. Allows them to manipulate masses of people while removing enemies.

And so … yes, we see the signs, indications of what is to come. A great storm may soon sweep over the United States (and the world) and when it is done, further vestiges of capitalism will have been swept away.

Additional leveling shall be promoted. Socialism, far from finished, will be the order of the day. And the world itself shall be increasingly globalized. We've already written about this. You can see two recent articles here:

Let Paulson Go … And Free the Alternative Media, Too!

The Real Reason Bloomberg Sued to Open Up Fed Records?

It's a big story, bigger even than the apparent coming collapse of China. Why is it so big? Well … for anyone who wants to track this easily and quickly, just Google "Wall Street" and "guillotine." Here are just a few results:

Let's Fix Wall Street: Bring Back the Guillotine ~ Facebook

99% To Bankers: We've Got The Guillotine ~ Wall Street Bankers Videos

"Maybe we should just roll a fake guillotine through Wall Street and see if they get the message." ~ Democratic Underground

"Rich should be beheaded" (Roseanne Barr) ~ Silobreaker

Ruminations: How about a nice guillotine? ~

They seem to have decided to whip up the masses in order to create an extraordinarily dangerous brew of social instability and resentment. Even the brutal police crackdowns play right into this malevolent meme.

We don't believe for a minute that the "establishment" (at the very top anyway) is worried about the current demos. The current 99 percent movement is getting the kind of play in the mainstream reserved only for the most important elite themes.

In any elite promotion, there are themes and sub-themes. The main theme may be an efflorescence of a neo-French Revolution. A sub-theme, then, and an important one, is "cleaning up Wall Street."

Sure, there are crooks on Wall Street – in fact, the entire industry is corrupt, as we pointed out in a previous article. But that's not the point. The idea is going to be to demonize capitalism and Wall Street while re-emphasizing the "rule of law" and Washington's ability to police corrupt tycoons. You can see the article about Wall Street's corruption here: Everything Wall Street Does Is Illegal?

At the very top, we figure, there are a tiny group of great families that control many of the world's major central banks. The amount of wealth these people must have under their control probably reaches into the hundreds of trillions.

These people don't care about Wall Street. The bankers at Goldman Sachs WORK for them. Presidents are at their beck and call. The ONE THING they don't want people to do is to attack central banking, which provides the cash for the ongoing conspiracy to move the world toward global governance.

In order to do this, they need to create economic catastrophes from time to time. And as part of these catastrophes, they must incite class envy and even war. Otherwise, they fear, people will figure out the real problem. And so they do what they can to point people in certain directions. They're doing it now and they did it 80 years ago, too. Here's more from the article:

With unemployment hovering at nearly 25 percent in 1932, Hoover was swept out of office in a landslide, and the newly elected president, Franklin Delano Roosevelt, promised Americans relief. Roosevelt had decried "the ruthless manipulation of professional gamblers and the corporate system" that allowed "a few powerful interests to make industrial cannon fodder of the lives of half the population." He made it plain that he would go after the "economic nobles," and a bank panic on the day of his inauguration, in March 1933, gave him just the mandate he sought to attack the economic crisis in his "First 100 Days" campaign. "There must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and wrongdoing," he said.

Ferdinand Pecora was an unlikely answer to what ailed America at the time. He was a slight, soft-spoken son of Italian immigrants, and he wore a wide-brimmed fedora and often had a cigar dangling from his lips. Forced to drop out of school in his teens because his father was injured in a work-related accident, Pecora ultimately landed a job as a law clerk and attended New York Law School, passed the New York bar and became one of just a handful of first-generation Italian lawyers in the city. In 1918, he became an assistant district attorney. Over the next decade, he built a reputation as an honest and tenacious prosecutor, shutting down more than 100 "bucket shops"—illegal brokerage houses where bets were made on the rise and fall prices of stocks and commodity futures outside of the regulated market. His introduction to the world of fraudulent financial dealings would serve him well.

Just months before Hoover left office, Pecora was appointed chief counsel to the U.S. Senate's Committee on Banking and Currency. Assigned to probe the causes of the 1929 crash, he led what became known as the "Pecora commission," making front-page news when he called Charles Mitchell, the head of the largest bank in America, National City Bank (now Citibank), as his first witness. "Sunshine Charley" strode into the hearings with a good deal of contempt for both Pecora and his commission. Though shareholders had taken staggering losses on bank stocks, Mitchell admitted that he and his top officers had set aside millions of dollars from the bank in interest-free loans to themselves. Mitchell also revealed that despite making more than $1 million in bonuses in 1929, he had paid no taxes due to losses incurred from the sale of diminished National City stock—to his wife. Pecora revealed that National City had hidden bad loans by packaging them into securities and pawning them off to unwitting investors. By the time Mitchell's testimony made the newspapers, he had been disgraced, his career had been ruined, and he would soon be forced into a million-dollar settlement of civil charges of tax evasion. "Mitchell," said Senator Carter Glass of Virginia, "more than any 50 men is responsible for this stock crash."

Of course, we know now that's just a lie. It's emerged quite clearly, thanks to modern-day libertarian scholarship, that Fed bankers printed much more money than they were allowed to by law. It was this overprinting of money that caused first the Roaring Twenties and then the Great Depression.

But it was covered up. FDR, panicked by the idea that people would trade in their "notes" (dollars) for gold, panicked and shut down the banks. When that wasn't enough, he made it illegal to own gold. Finally, in order to make sure people were distracted from the real problem, he and other "insiders" created the first Wall Street corruption hearings and hired Pecora to run them. Pecora carefully mentioned nothing about the Fed or the criminals who surrounded FDR. History was sanitized. Wall Street was blamed. Here's some more:

President Roosevelt urged Pecora to keep the heat on. If banks were worried about the hearings destroying confidence, Roosevelt said, they "should have thought of that when they did the things that are being exposed now." Roosevelt even suggested that Pecora call none other than the financier J.P. Morgan Jr. to testify. When Morgan arrived at the Senate Caucus Room, surrounded by hot lights, microphones and dozens of reporters, Senator Glass described the atmosphere as a "circus, and the only things lacking now are peanuts and colored lemonade."

… Senator Glass's description of the hearings proved prophetic; the atmosphere had become truly circus-like. And although Morgan's appearance marked the height of the drama, the hearings continued for nearly another year, as public outrage over the conduct and practices of the nation's bankers smoldered. Roosevelt took advantage of the public sentiment, arousing broad support for regulation and oversight of the financial markets, as the Pecora Commission had recommended. After passing the Securities Act of 1933, Congress established the Securities and Exchange Commission to regulate the stock market and to protect the public from fraud. The Pecora commission's report also endorsed the separation of investment and commercial banking and the adoption of bank deposit insurance, as required by Glass-Steagall, which Roosevelt signed into law in 1933.

Thank goodness for the Internet. The lies, interminable as they are, have been exposed. But they are being re-circulated now. Government power is to have its day, once more. The Senators are to be unleashed to howl. Wall Street bankers are to be disgraced in front of the nation and Time magazine shall name those who run the neo-Pecora prosecutions as "Men of the Year."

We shall be watching all this closely if it unfolds as we suspect it might. Especially interesting will be the opinions of the alternative media, thus far paying very little attention to this scenario. And why should that be so?

Will the alternative media, in fact, stand by and cheer as the full force of the US government – the greatest and increasingly most oppressive empire on earth – brings the full weight of its resources to bear on certain Wall Street scapegoats? Will the crime of making too much money trump the genocidal warring and determined, entrenched corruption of Washington and the military?

After Thoughts

We have long maintained that it will be increasingly difficult to generate such manipulations in the era of the Internet – the Internet Reformation, as we call it. Time will tell.

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