Authored by Tim Hartnett via LewRockwell.com,

In the bad old days, before G-Men took down the mob, were urbanites getting a better deal? Does the betting man receive worse odds from state run lotteries than Vinny gave on the corner running numbers? Did businesses shaken down for “protection” have higher hopes of survival in mob clutches than in municipal ones? Was there more or less anxiety about making rent or the mortgage in 1974 than in 2024? Which is the greater fiscal peril, organized crime or uber-societal-organization? It has become a valid question.

Gangsters had fingers in a lot of pies. Credit card racketeers, waging the present battle against physical currency, demand a slice of everything out of the oven. They’d gladly have us believe that paying for anything, without their supervision and cut, equals a criminally tainted transaction. Mobsters found their pecuniary prevalence legit in its way too. Transactions that jibed with their economic codes they called “kosher.” Other trading activity inside their ambit was deemed transgressive. Parasites tend to sound tiresomely alike. The difference is that the above ground finance industry finds no place outside its ambit.

Street people’s encampments clutter cities all over the country. What pushed so many over the edge? And how many are treading that edge carefully now? We know that insanity is somewhat genetic, but scientific observation has yet to prove external factors can’t nudge innately inclined individuals into psychosis. Facts point that way.

Should we harbor suspicion of so-called improvements in the finance system? The Bush-Obama era housing crisis arrived after the government gradually amped up its influence on the mortgage market. Once mortgages became de-localized and Wall Street joined in default skyrocketed and losses went international. Isn’t the NYSE supposed to make markets safer and more efficient? Have we seen anything like that coming out of financial centralization?

The present squeeze goes on in commercial space. Businesses, particularly restaurants, are shutting down at disturbing rates. The biggest burden is rent. This goes on as city centers are awash in more empty commercial space than ever. Local government isn’t helping. While serenading us about how much they love love and hate hate, they stay busy inundating entrepreneurs with licensing fees, new taxes, permit demands and other hurdles that restrain new ventures from ever launching. If they somehow get going anyway the municipality lurks at every juncture. They’ll keep you from thriving when they can’t stop you altogether. Actions speak louder than words. What they “love,” in practice, is bleeding prey pale with revenue demands and entangling bureaucratic complications.

In 1977 the minimum wage was $2.30 an hour. You could get nearly four Big Macs for that amount then. When the minimum went up to $12 on July 1st, the same earner only got two and one third double-deckers for his money. Losing 1.3 sandwiches an hour takes a big bite out of a working class lifestyle. 10.4 Mc-grubbings per eight-hour-day to be exact.

One year after the bicentennial average rent in the US was about $160. An NYT article from 1973 said a family of four needed less than $12,000 a year to live “moderately” in NYC in 1973. The same amount must have been a somewhat comfortable living in flyover country. By 1977 average income was over $13,000. 47 years later, average rent is at least ten times higher. While only about 10% of the population earns $130,000 or more. Where did all the value go?

Clearly, production is out of sync with consumption. What is the variable? Crops still grow at the same rate. Cargo travels at the same speed. Bricks are laid at the same pace. Chickens plop their eggs with the same regularity. Is anyone in the economy getting more than their fair share?

Almost 103 billion in “official” currency was circulating in the US in 1977. As of today, that figure stands at nearly 2 trillion 340 billion. The population has increased by about 58%. The greenbacks flowing back and forth went up by over 2000%. Those figures describe a small fraction of the overall economy. Because banks can create spending power with credit, leaving out other fiscal legerdemain, hundreds of trillions are outstanding in fiscal reality. Federal tax revenue alone, will soon hit over 5 trillion so far this year. That’s over twice the official amount of currency in circulation.

The Big Mac went from 65 cents to $5.17 in that time span. That’s about 700%. Minimum wage rose by about 450%. Watching these fiscal details we know at once that sparse fractions of all that new money is getting to where it is needed most – while we have no evidence it lands in hands that have created actual value. With everyone competing for resources and finished goods, these facts equal a devastating pay cut for many making far above minimum wage.

The idea that people are taking out according to what they contribute simply doesn’t fly. We can start with where the money supply is expanded.

A century ago banks were more accountable. They could make risky loans, as they did for Fritz Heinze, but doing so could still mean hell to pay. The series of events that shook the fiscal foundations of South Manhattan in 1907 remain mysterious over a century later. By 2007, banks were getting bailed out and it was everyone else who paid. How we got there is an intriguing conundrum of modern finance.

Heinze was a mining engineer from New York who showed up in Butte, Montana in the 1890’s. The copper market was hot at the time. That rustic town was already swimming in East Coast toffs and class consciousness. Although born into wealth and circumstances, Augustus Heinze was above pretension and indifferent to “society.” He soon developed a smelting process that greatly expanded the profitability of low-grade copper ore. Rather than pocketing the plunder, his next step was cutting 2 hours off the miner’s workday. How did that go over in the part of Butte that ‘dressed for dinner’? About like The Declaration of Independence did with George III.

Fritz couldn’t have cared less. The airs put on at posh WASP tables left the man impatient and bored. He did his excess boozing in public places where a man who’d spent the day 500 feet underground was at the next stool. Guys who loaded trams rarely bought a round with Heinze in the house.

By 1895 he’d amassed the capital to purchase the Rarus copper mine. The new-coming city slicker literally hit paydirt. His holes were always filled with the best pick and shovel men Montana could provide. The swells he snubbed had to take what hired help they could get.

An officer fraternizing with the enlisted class was high treason to mine owners of the aughts. Heinze was held in a kind of hostile awe. Butte gentry were unaccustomed to a guy who dared not to care if they liked him.  What’s an enraged starched collar to do? We’ll never be entirely sure. Deadly measures were far from uncommon in late 19th century mining strife. What happened to Heinze is one of the murkier mysteries of the robber baron era.

J.D. Rockefeller’s brother, William, was a director of Anaconda Copper. That firm was run by people who’d never pop a cork with working stiffs. They were revolted by Augie’s effrontery. Their solution was one that has retained its financial force. Whether Heinze was bought out under duress, or sold out of his own volition in 1906 isn’t fully clear. What is known is that he returned to New York as a Wall Street plunger specializing in copper stocks. Using familial connections, and a personal fortune, Heinze got himself onto the boards of almost a score of NYC banks. When shares of United Copper were being shorted in a bear run, Fritz used his position to buy aggressively, borrowing heavily from the Knickerbocker Bank and other commercial lenders where he held sway.

By October of 1907 the Heinze brothers thought they had cornered the market in United Copper. They demanded the shares from traders who were contractually short – falsely believing the bears would be forced to buy from them. It soon became clear that these shares were not hard to come by. Heinze’s bullishness ended in catastrophic loss rather than profit. This meant that he would default on loans of millions from each of over 15 NYC banks.

The story, possibly apocryphal but true in effect, goes as follows. Knickerbocker was experimenting with 24 hour banking in 1907. The brainchildren of Wall Street met for dinner at an upstairs private dining room in Delmonico’s to discuss the coming cash crunch. Waiters for the event heard what was said in the meeting. They shared this knowledge with less connected patrons chowing down on the ground floor. A run on Knickerbocker began that night, by morning it had spread to every bank in town. The Panic of 1907 was instantly afoot.

Soon banks all over Gotham were out of cash to meet a seismic wave of withdrawals. In no time connected institutions from further out were tapped too. JP Morgan famously locked every player he could muster into his mansion’s library to discuss solutions. A plan was worked out and widespread depression was averted. But the financial hierarchy of south Manhattan was far from done. Their next step entailed placing the money supply and credit generally into the possession of elite governors.

This banking scandal ultimately resulted in the Federal Reserve Act that was passed December 23rd 1913. Whether it solved the problem or laid the foundation for larger ones has been debated since. Getting into the particulars of the statute became inconvenient with the legislature still in session so close to Christmas. ‘Fightin’ Bob LaFollette, gave in and failed to press for a more exacting bill he saw as necessary at the time. The ruckus over the bill’s details were mostly passed over as ‘conspiracy theory’ throughout the 20th century. That line held sway in economic academia for many decades. Scholarly reckoning always comes too late; there is little dispute the charter helped cause and make the Great Depression worse among “experts” today. We are commanded to defer to them with amps at 11. What they got wrong is reported by the same sources at about 2.5.

Left unexamined is why the Heinze brothers misunderstood who held what in United Copper in 1907. Why did they mistakenly believe they had cornered the market? These were highly educated, seasoned men in the world of finance. How far would William Avery Rockefeller Jr. go to settle a score with Fritz Heinze? Was he cleverly stashing available shares in ostensibly immobile accounts to set up an ambush? The first generation of the Rockefeller fortune was not known to take financial affronts lightly. Is it possible, or more likely probable, William Avery had the means and motive to manipulate the market into this unlikely position?

John D. Rockefeller Jr. married Abby Aldrich in 1901. Her father, Nelson Aldrich, was the driving senatorial force behind the Federal Reserve Act, although he left the Senate before its passage. The Rockefeller gang has been evangelizing the faith of centralization in everything for over a century. It started when JD Sr. practically accomplished that in the petroleum industry before the turn of the 20th century. If you think they were never capable of violent, gangland style treachery, fast your gaze on the Ludlow massacre of 1914.

Can we measure the effect of centralization in the financial sector? By 2013 it had almost doubled its share of the economic pie since 1980. When their take went from 5% to 9% in 40 years it had to come at a loss for others at the table. Did the Fed have a role in this? And what justification is offered for doubling the squeeze?  As the economy grows so does the money industry’s cut, just as any salesman’s commission rises as the sales price is higher. Is South Manhattan insatiable? What explanation, other than parasitic predation, fits here?

The idea of market liquidity and available credit is efficiency and a fluent trading place for financial wares. Theoretically, this is competitive and brings transactional costs down while driving transactional fluidity up. Have we seen any such thing? The NYSE and kin have become like those “clubs” everyone is forced to join avoiding rip-offs for groceries, lunch, medicine, movies etc. The difference is that Wall Street’s anti-rip-off club is exclusive. You are not invited.

Where are we now? Exactly in the same place as when mobsters skimmed off the top in Vegas casinos, but far worse. The difference is that you get clipped without ever placing a bet or owning a share of a betting parlor. The south Manhattan mob is, supposedly, worth nearly 10% of all the action. What other slices of the take have widened with government intrusion and centralization? The mob focused its shakedowns on high rollers. Higher Ed goes after every kid hoping to drag letters behind his name. They call themselves “non-profits.” Does the description fit the beast?Disciplines of a Godly…Hughes, R. KentBest Price: $4.97Buy New $9.41(as of 01:52 UTC – Details)

Finding university administrators at leisure is not a job for Columbo. Just head toward any resort, high-dollar fleshpot or country club where profiteers do their squandering. Educational altruists, financial “experts” and well-heeled bon vivants occupy the same weekend turf – as well as the same self-serving sphere of self-justification.

The Rockefeller family was the largest private benefactor of that ultimate centralizing scheme, the UN. The patriarch, William Avery Rockefeller Sr., was an infamous snake oil salesman and bigamist. He’s not the Rocky the family likes to advertise. They are prouder of efforts to get around the principle of one-man-one-vote and rule the world from the modern equivalent of a royal court on a planetary scale. Make a list of plans to place more bosses overhead and move them further out of reach.  The UN, CFR, WEF, Bilderberg, Trilaterals – you name it and the progeny of that greasy grifter is in on it. And who would they place in charge? The very soul-suckers with their fangs in the US neck pulsing at Wall and Broad.

We are not looking at an abstruse, undecipherable picture here. You can do differential equations, make “relative assumptions” and discuss monetary theory until you ascend to the meta-fiscal plane of Laputa. None of that supposed “understanding” leaves Joe Six-Pack with another square foot of living space or another Big Mac. Uber-economic organization, aka David Rockefeller’s so-called “more integrated world,” is a progressively feudalistic plot that – with the compliance of the un-fake-news industry – rarely experiences any setbacks.

Shrinking buying power has a very simple explanation: a prim and proper syndicate that is more ubiquitous and avaricious than any criminal mob ever.