December 9, 2016

Nixon and the Political Power Paradigm in America

By In Articles, History

I noticed the following paragraph while reading Roger Stone’s new book on Richard Nixon (my bold):

“Although late to see the GOP’s lurch to the right under Goldwater and the power shift in the party from the eastern establishment [to] the Sunbelt conservatives, once he comprehended it, Nixon would court and nail down the right as a prelude to his compact bid.”

I think it is pretty neat that Stone recognizes this paradigm at play.  There are different ways to analyze the development and motivations of political power.  Once commonly looks at the simplistic dichotomy of “party politics” and the “GOP vs. Democrat” divide; but actually there are much more accurate ones.  The Republican and Democratic parties each have their own inner divisions, disagreements, and competing interests.  Those senior members of each party, who have the most powerful connections with various lobbying groups across a large collection of industries are considered to be part of “the establishment.”  These top guys look for younger, rising stars in Congress that can be used to do the dirty work.  As Stone quotes Nixon: “Never hire anyone over thirty…. Get young guys who do as they are told.” The real politics takes place at the top.

I have found great interest in the study of “Power Elite” analysis– that is, the study of who is at the top and who influences which policies.  Especially, the Eastern Establishment vs. Sunbelt Conservative paradigm really fascinates me.  The overview is as follows.

What is considered to be “Old Money” in the United States is the wealth that was created toward the end of the 19th century in the banking and oil sectors.  While your run-of-the-mill history textbook will attribute this rise in wealth to the “free market,” this is hardly what happened. The well-connected were beneficiaries of government intervention into the market in the form of subsidies, economic regulation (that made it harder to compete with the top dogs), and special government grants.  The free market should be seen as a remedy for State-granted economic special privilege.

The two leading groups of politically well connected and unimaginably wealthy “families,” by the turn of the century were the Morgans and the Rockefellers.  These two groups were fiercely competitive with each other, especially in the banking and finance world.  In fact, many of the political battles can be seen as reflective of the great wars between these two economic powerhouses.  One decent example is the fall of the Old “hard money” (which means gold standard) Democrats, who were largely free-market decentralists.  The last President in this tradition was the great Grover Cleveland, whose last words were “I have tried hard to do right.”  After Cleveland, the next Democrat President was one of the most destructive proto-fascists (referring to the economic system of State and Corporate partnership) in American history: Woodrow Wilson** (See asterisks at bottom).  And it was under Wilson, a man deep in the Morgan ambit, that both the 16th amendment and the Federal Reserve Act were signed into law. Since then, the Democrat Establishment has been economically interventionist and sharply against the free market.

It was the signing of the Federal Reserve Act which caused the “House of Morgan” and the Rockefeller empire to no longer be required to compete in the world of banking.  It was a union between the two most powerful and political influential economic groups in banking and credit.  The problem with the free market, in the eyes of the bankers, is that any mistake or poor investment would give credence to the competitors.  Thus, it was difficult for both the Morgan group and the Rockefellers to expand to the extent that they may have desired. A State-granted monopoly, however, would grant them the ability to grow together and eliminate any possibility of competition both between each other, or from a third group.

While united on the banking front due to the Federal Reserve’s establishment in 1913, they still competed for dominance in other industries, including oil and manufacturing. But World War II solved this problem. It was the seal that tied them closely together.  FDR and his decision to was their connecting point.  Rothbard explains helpfully:

During the 1930s, the Rockefellers pushed hard for war against Japan, which they saw as competing with them vigorously for oil and rubber resources in Southeast Asia and as endangering the Rockefellers’ cherished dreams of a mass “China market” for petroleum products. On the other hand, the Rockefellers took a non-interventionist position in Europe, where they had close financial ties with German firms such as I. G. Farben and Co., and very few close relations with Britain and France. The Morgans, in contrast, as usual deeply committed to their financial ties with Britain and France, once again plumped early for war with Germany, while their interest in the Far East had become minimal. Indeed, U.S. Ambassador to Japan, Joseph C. Grew, former Morgan partner, was one of the few officials in the Roosevelt administration genuinely interested in peace with Japan.

World War II might therefore be considered, from one point of view, as a coalition war: the Morgans got their war in Europe, the Rockefellers theirs in Asia. Such disgruntled Morgan men as Lewis W. Douglas and Dean G. Acheson (a protégé of Henry Stimson), who had left the early Roosevelt administration in disgust at its soft money policies and economic nationalism, came happily roaring back into government service with the advent of World War II. Nelson A. Rockefeller, for his part, became head of Latin American activities during World War II, and thereby acquired his taste for government service.

After World War II, the united Rockefeller-Morgan-Kuhn, Loeb Eastern Establishment was not allowed to enjoy its financial and political supremacy unchallenged for long. “Cowboy” Sun Belt firms, maverick oil men and construction men from Texas, Florida, and southern California, began to challenge the Eastern Establishment “Yankees” for political power. While both groups favor the Cold War, the Cowboys are more nationalistic, more hawkish, and less inclined to worry about what our European allies are thinking. They are also much less inclined to bail out the now Rockefeller-controlled Chase Manhattan Bank and other Wall Street banks that loaned recklessly to Third World and Communist countries and expect the U.S. taxpayer—through outright taxes or the printing of U.S. dollars—to pick up the tab.

Rothbard, Murray N. (2011-06-06). Wall Street, Banks, and American Foreign Policy (LvMI) (Kindle Locations 827-843). Ludwig von Mises Institute. Kindle Edition.

The Eastern Establishment after this was suddenly in deep competition from the Sunbelt “conservatives,” who had CIA, construction, and American oil (as opposed to the Eastern Establishment, whose oil interested were in the middle east) connections and domination.  Remember, both the Republican and Democratic establishment before the rise of the Sunbelt Cowboys were all Eastern establishmentarians, who might also be called the “Yankees” in the “Yankee and Cowboy War,” a book written by Carl Oglesby back in the 1970’s.  It is Oglesby who first really articulated this paradigm between the Eastern Powers and the new Sunbelt (CA and TX) powers.  And even as the Sunbelt Cowboys came roaring into power, their influence too stretched across both parties; LBJ was a Democrat and Nixon was a Republican.

Now, Nixon is a pivotal man in this paradigm. For he was the first Republican President (following LBJ, a Texan, who suspiciously benefitted from Kennedy’s assassination –see Roger Stone’s previous book on LBJ) since Cleveland who was not the first choice of the Eastern Establishment, but rather came from the Sunbelt land of California. Stone points to Nixon’s resentment of JFK and the other Eastern, wealth-laden politicians as part of his motivation to get to the top, despite his massive political failure in CA politics.

In any case, it is greatly appreciated that Stone has this paradigm in mind when he writes of the deep inner politics taking place behind Nixon, leading up to the Watergate scandal and his leaving office in disgrace.  For Stone, these battles of geographical power plays help to explain the connection between JFK’s murder in Dallas and Nixon’s political fall out.  JFK’s death marked the end of the Eastern Establishment’s monopoly on the executive branch, but when Gerald Ford (who went to Yale Law School, which is a breeding ground for the Yankee influence) was sworn in 11 years later, the Yankees finally got their way until Reagan, who, in an attempt to “clear house” of the Yankee-dominated Trilateralist influence (although he only partially succeeded), actually opened up the way for the neoconservatives to crawl into power, who are the new coalition that had given the Cowboys a new breath of energy following Nixon’s fall.

The reason that Reagan only partially succeeded was his VP George H.W. Bush, whose family history and “Old Money” connections reach back to his father who was a key member of the banking world (Yankee) and yet who had done well in reaching out to the Texas oil world and thus making friends in the Cowboy empire as well. On top of this, Bush was a long time CIA man and even its director.  Bush Sr.’s influence in the Reagan administration cannot be overstated.  People like to think of George Bush Jr. as a Texas neocon. But it is more accurate to see him as an Old Money yankee, who made a fortune making friends in the Sunbelt industries, and was heavily influence by his neoconservative advisors, who ran his foreign policy because he was quite weak in that area.

Although it should be mentioned that, compared to the modern neoconservative foreign policy of internationalism and neo-Wilsonian idealism, Nixon’s foreign policy, known as “realism” was, while certainly not great, was better.  Nixon, while to be considered an outsider in relation to the Eastern Establishment, did have Establishment man Henry Kissinger, who reflected the foreign policy preferences of the eastern elite at the time.  Nixon foreign policy is categorically different than today’s neoconservative successors of Cowboy “American domination” outlook of the world.

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**For another interesting connection, it is fascinating to consider that the rise of Woodrow Wilson, who was also once the President at Princeton, took place at the same time as the rise of the “liberal” faction in the Christian world.  It was this faction that was opposed by Machen when he led the exodus away from Princeton Seminary and created Westminster Theological Seminary.  Princeton College fell first, and then the plague began to creep into the Seminary.  A great resource to consider here on the politics and back-room plays is Gary North’s Crossed Fingers: How the Liberals Captured the Presbyterian Church.  By doing a simple and quick search of the document, you’ll discover that the name “Rockefeller” is mentioned 277 times!

Written by C.Jay Engel

Editor and creator of The Reformed Libertarian. Living in Northern California with his wife, he writes on everything from politics to theology and from culture to economic theory. You can send an email to reformedlibertarian@gmail.com