| End of Page | The New British Empire | Site Map | Overview Page |
The Journal proceeds from axiomatic beliefs which have led it to defend Fed Reserve Chairman Paul Volcker's October 1979 high-interest-rate destruction of the U.S. physical economy; promote the disastrous 1981 deregulation of the U.S. banking system; and champion Anti-Defamation League/mob-linked financiers Michael Milken and Ivan Boesky and their junk-bond leveraged buy-outs, which ravaged the economy further, as the ``free spirits'' of ``free enterprise.''
The Journal presents the world from the vantage-point of a speculator. It envisages a world in which the usury-driven ``market'' rules all, and in which the sovereign nation-state is to be ``withered away,'' subordinated to the demands of the speculators. Long owned by the Boston Brahmin Bancroft family, the Journal voices the policy of the Wall Street-City of London axis, which is controlled by the British financier oligarchy. From its 1889 inception, the Journal has been deeply opposed to the American System of Economics of Gottfried Leibniz, Alexander Hamilton, and Abraham Lincoln. In this system, the state dirgistically fosters anti-usury, energy-intensive, capital-intensive, economic development. It develops the cognitive power of the sovereign mind, which is the source of all economic wealth.
But, the Journal underwent a further policy change soon after President Nixon took the dollar off the gold reserve standard in 1971. At that point, Robert L. Bartley, an asset of the Mont Pelerin Society and the so-called ``neo-cons,'' was brought in to direct editorial policy, and to call for the implementation of the post-industrial society. The Journal abandoned any sense of even traditional industrial banking, and went for straight speculation.
Today, the Journal and its parent company, Dow Jones & Company, span the globe. Its American edition of the Journal is read by 1.8 million people daily. There are European and Asian editions of the Journal. Dow Jones owns and publishes Barron's financial newsweekly and the Far East Economic Review. It owns a string of other newspapers, publishes a Dow Jones online data retrieval system, and owns and prints the Dow Jones industrial stock index.
While Baby Boomer Wall Street financiers and stock brokers swear by the Journal, and many Americans are miseducated about economics by it, the Journal has been wrong on every fundamental economic issue of the past quarter-century. On precisely these issues, economist Lyndon LaRouche has been correct. Here are the results of two different and irreconcilable methods of thought: the American System of LaRouche, and the British free-trade usury of the Journal. The success of LaRouche's methods means the elimination of the rotted-out world financial system the Journal supports. Here lies the roots of the Journal's loathing and fear of LaRouche.
In 1882, in New York City, financial reporters Charles Henry Dow and Edward Jones, both Rhode Islanders, set up Dow Jones and Company, which printed a financial bulletin. In 1885, Charles H. Dow became a member of the New York Stock Exchange, formulating what he called the Dow theory of stock market movements, and picking up trading gossip to put in the Dow Jones bulletin. In 1889, Dow formed the Wall Street Journal, which was made a subsidiary of Dow Jones & Co.
In 1902, Clarence Barron, representing Boston's powerful State Street, purchased Dow Jones & Company for $130,000. At the time of the purchase, Barron was publishing business bulletins in Boston and Philadelphia, which were merged into Dow Jones & Co. Barron also founded Barron's National Financial Weekly. In 1923, Barron had the Journal publish his credo, which made clear his paper's slavish adherence to the Wall Street financiers: ``The Wall Street Journal must stand for what is best in Wall Street....''
The higher level of the Boston Brahmins joined the Journal when, in 1907, the step-daughter of Clarence Barron, Jane Barron, married Hugh Bancroft. The Bancroft represented the high Boston Tory faction; they were among the first settler families that, in 1632, founded Lynn, Massachusetts. During the next 50 years, the family was the sole exporter for the Massachusetts Bay Colony, of sugar and tobacco, a trade that made it immensely wealthy.
By the first decade of the twentieth century, Hugh Bancroft's father, John, was chairman of the Brahmin-owned Boston Elevated Railway, and was a member of the board of overseers of Harvard University. Hugh Bancroft attended Harvard, where he was admitted to the elite Hasty Pudding Club. In 1912, Bancroft was made treasurer of Dow Jones, the holding company of the Journal. He became president in 1928, upon Clarence Barron's death. By that time, Bancroft and his family controlled the majority of Dow Jones & Company's shares.
The Bancroft family continues to be the most significant shareholder of Dow Jones and the Wall Street Journal today, through Hugh Bancroft's descendants, including Jane Bancroft Cook, a Journal board member; the Cox family (Christopher Cox sits on the Journal's board); and socialite Elizabeth Goth.
It is during the first decades of the twentieth century, that the Journal's hatred of the American System of Economics became manifest.
During the 1970s, the City of London effected a profound shift at the Journal. Since the 1963 murder of President John F. Kennedy, the British had begun to foist the ``post-industrial society'' policy upon America. Right after the 1971 delinking of the dollar from gold, this was made the policy of the Journal. This post-industrial society policy destroys technology-proud manufacturing, agriculture, and infrastructure, while building up information services and financial speculation.
Robert L. Bartley, from the circles of the oligarchy's Mont Pelerin Society, was the key person brought in to effect the change. In 1962, he joined the Journal, and by 1972, he was made editor of the editorial page. Today, he is the paper's editor.
In October 1973, Bartley published an essay entitled, ``A Pathology of Perception.'' In defining where America is heading, he cited Daniel Bells' new book, The Coming of the Post-Industrial Society: ``Mr. Bell sketches the shape of the society we are becoming. The economy will be increasingly pre-occupied with services rather than [producing] goods.'' The post-industrial society would be the fundamental outlook that Bartley, and the Boston Brahmins who owned the Journal, would preach through the editorial pages, over the next 25 years.
Bartley represented the intersection of two British-steered groups: the neo-conservatives and the Mont Pelerin Society. The neo-cons--many of them former Bukharanite communists--hate the nation-state and industrial development. A typical example is Irving Kristol, a former leftist who is close to British as well as Israeli intelligence. During the 1970s, Kristol was Professor of Social Thought at New York University, and a mentor to Bartley. In 1976, Bartley made Kristol one of the Journal's Board of Contributors, giving him regular space on the editorial page. Irving Kristol's son William, the editor of the Standard, is one of the leaders of the attacks on the U.S. Presidency.
The Mont Pelerin Society is the financier oligarchy's elite organizing center, pushing austerity and globalization of markets, and especially the illegal and drug economy. Milton Friedman, a founder of the Mont Pelerin Society in 1945, headed up the University of Chicago School of monetarist economics. In the early 1970s, one of the University of Chicago boys, economist Art Laffer, began to meet with Bartley at a restaurant in New York City, along with Columbia University economics professor Robert Mundell and economist Jude Wanniski, who then was working at the Journal.
A hero of this group, whom Bartley praises to this day, is French economist Jean-Baptiste Say (1767-1832), a radical free trader and popularizer of Adam Smith. In his Treatise on Political Economy, Say designated the nation-state as the enemy; any attempt to impede the markets is tyranny, he said. Within this context, Say emphasized supply over demand.
In December 1974, Bartley approved a Journal editorial-page exposition of the Laffer-Mundell curve, which purported to show that, as regulations and taxes are cut, growth occurs, and as a result, tax revenues rise, closing the budget deficit. This Mont Pelerinite quack nostrum came to be known as ``supply-side economics.'' It would be the vehicle for calling for cuts in the capital gains tax, and was introduced through Rep. Jack Kemp (R-N.Y.) in 1981, and became the Kemp-Roth tax bill, which passed the Congress. In the meantime, the Journal sold this program to Ronald Reagan, and it became the basis of Reagan's economic program. While speculation grew, so did the budget deficit. Contrary to the Journal's predictions, the Federal budget deficits for the eight years Reagan was President totalled $1.3 trillion, an amount larger than the outstanding debt that the U.S. government had accumulated in the 192 years of its existence, from 1789, until 1981, when Reagan took office.
Within days of Volcker's initiation of his measures in 1979, EIR published an editorial, which appeared in the Oct. 30 issue, entitled, ``Is Volcker Insane?'' It stated, accurately, ``Volcker's measures ... savagely contract employment in production of real, tangible wealth, and concentrate a much larger portion of total money flows in the economy into the hyperinflationary churning mass of high-yield, sheer nonproductive speculation.'' LaRouche predicted a depression.
But, on Oct. 8, 1979, the Journal carried a lead editorial, ``Support Mr. Volcker,'' which stated, ``The new Federal Reserve anti-inflation package is the most hopeful economic policy development in over a decade.'' Worse, the Journal supported the collapse that would now engulf the economy: ``Mr. Volcker will need plenty of support if the slide toward recession now accelerates.''
On Oct. 26, the Journal ran a front-page article, entitled, ``The Great Depression Had Its Big Winners Along with the Losers.'' This cynical piece was in effect an argument that maybe a depression in 1979 wouldn't be so bad after all.
On Oct. 29, the Journal ran an editorial, ``The Crash of '79,'' which said that ``all will be lost if fear produces political pressures forcing the Fed to abandon its efforts.''
By 1982, the economy was in a slide, but the Journal still called for more of the same medicine. In a Feb. 2, 1982 editorial, ``Paul the Navigator,'' the Journal praised Volcker, and blamed whatever misfortune may have occurred on the use of the wrong monetary measuring standards.
Also, during this time, as the Volcker measures forced Chrysler Corp. and the Rock Island Railroad to the brink of bankruptcy, the Journal called for pulling the plug on these companies.
By the end of 1982, LaRouche's forecast had been proven absolutely correct. Since 1979, machine-tool, steel, tractor, and auto production had all fallen by 25-40%. The machine-tool sector never recovered: As a result of the Volcker policy, it permanently lost more than one-half of its capacity.
While the Journal tossed around such phrases as ``supply-side economics'' and ``economic growth,'' what it really meant was the unrestricted growth of speculation. The Journal's heroes were Michael Milken of Drexel Burnham Lambert, Ivan Boesky, Meshulim Riklis, Carl Lindner, and Saul Steinberg, whose leveraged buy-outs became the dominant activity in the deregulated, high-interest atmosphere created by supply-side economics.
Recognizing that they had staked their all on Milken and his crew of crooks, Bartley and the Journal stood by Milken to the bitter end. In a June 13, 1986 article, ``The Street Fighter: Fast-Growing Drexel Irritates Many Rivals with Its Tough Tactics; But Many Clients Stay Loyal,'' the Journal did a typical puff piece on Milken, writing, ``Tales of Mr. Milken's frenetic, workaholic style, immense earnings and relentless stance against interlopers have made him a Wall Street legend at age 39. Even some Drexel critics have compared him to J.P. Morgan as an innovator.''
In 1988, Milken was charged by Federal authorities with criminal activity. The charges were shaped so as to leave the most criminal activities--the destruction of entire companies--out of the indictments. In late 1990, Milken was convicted and sentenced to ten years--a very light sentence in light of what he really did. He served less than two years in jail. Yet the Journal fanatically defended him, because it realized that its supply-side economics and the activities of Milken went hand in hand. By 1990, the 1980s was being called a decade of greed, which the Journal considered an indictment of itself. The Journal lashed out. In a Nov. 23, 1990 editorial, ``Symbol of the '90s,'' the Journal wrote:
``Michael Milken has often been depicted as the symbol of the 1980s, the Master of the Universe presiding (with Ronald Reagan) over the decade of greed.... We fear he is becoming the symbol of the 1990s, the decade of vengeful destruction.'' That is, sentencing Milken was vengeful: He should have received no sentence. The Journal continued, ``Michael Milken was a threat--to entrenched corporate managers, to Wall Street competitors, to regulators who prefer their markets neat and pretty.'' This paean to criminality tried to deny the fact that during the 1980s there were $700 billion worth of leveraged buyouts which left hundreds of thousands of workers unemployed, and many companies shells of their former selves, especially manufacturing companies.
In a Feb. 13, 1991 editorial, ``To Err Is Human'' the Journal made the case that Milken's sentence should be reduced.
The Journal played a major role in organizing for the passage of the North American Free Trade Agreement (NAFTA), which sucks manufacturing jobs out of the United States, and ships them to low-wage Auschwitz-style sweat shops south of the Rio Grande. During the Bush Presidency, the Journal called NAFTA Bush's ``most important foreign policy priority.'' In an April 29, 1997 editorial, the Journal called for NAFTA to be imposed on a hemispheric-wide scale.
The Journal has pushed for the implementation in the Third World, of the most extreme forms of debt repayment, through privatization--selling off of their national patrimony to financier sharks. In 1996, it demanded the privatization of Brazil's crown jewel, the Companhia Vale do Rio Doce (CVRD), rich in iron ore, copper, zinc, gold, and other mineral wealth. A Dec. 3, 1996 Journal article denounced Brazil's nationalist military for trying to block the sale. It denounced any attempt by the government to ``spend the Vale proceeds profligately,'' i.e., for infrastructure projects.
In the midst of the worsening Asian financial crisis, the Journal gloated that this would put a stop to the Asian nations' economic growth.
Domestically, the Journal is a lead organizer for privatization of Social Security. Under this package, the age at which a retiree qualifies for Social Security will be raised to 70; benefits will be reduced; and the current Social Security Trust Fund will be dismantled, with its more than $7 trillion to be invested in private retirement accounts, which money props up the stock market bubble. The Journal is a steadfast champion of New Gingrich's fascist ``Contract on America'' austerity measures.
The Journal leapt to Soros's defense. It ran, on the front page of its Sept. 19 Asian and European editions, an article entitled ``Malaysia's Mahathir Finds Strange Source for Soros Campaign; Asian Country's Media Tap U.S. Conspiracy theorist Lyndon LaRouche Jr.'' The Journal wrote that much of the information that the friends of Mahathir in Malaysia have used to skewer Soros, came from EIR and Lyndon LaRouche. The Journal perhaps thought that presenting the Mahathir-LaRouche relationship would be damaging to Mahathir. Indeed, what it did, was to draw the battle lines between Soros, speculator hit-man for the British Commonwealth, and LaRouche, whose record of accurate economic forecasts for 40 years is well known, and whose plan for a development-vectored new world monetary system, would destroy the financier oligarchy.
| Top of Page | The New British Empire | Site Map | Overview Page |
EIR Special Report: The Fall of the House of Windsor, special price -- $25.00.
EIR Issue: The Sun Never Sets on the New British Empire, $10.00.