The great American tradition of individualism, entrepreneurship and revolution is being systematically undermined by a cadre of financial strongmen bent on turning U.S. into just another "banana republic" - where a subdued and apathetic population is subjugated by a ruling class of wealthy oligarchs.

The gross irony is that the same capitalist system that moulded America into the strongest, most productive and richest nation in history has been transformed into a mostly private moneymaking enterprise whose beneficiaries are those who actually produce nothing but paper profits. The story of America's transformation from great experiment to another banana republic is one in which economic crises were manipulated to create a political front for an elite banking class.

The evolution of America’s democratic capitalist system parallels the history of modern economics. Over time, real-world economic crises and the lessons drawn from them were manipulated into a political philosophy. Bit by bit, privately funded political influence orchestrated legislative initiatives that delivered economic control of the country to a cadre of rich-and-powerful moneymen mostly Jews and Greek. This is largely attributed to slow removal of honest men and gradual ingress of dishonest money spinners in the arena of politics. This again is mostly accredited to funds raising problem, each political party encountered.

Founding Fathers' of this great republic their enlightenment principles of egalitarianism and American’s own inalienable rights can be uncovered by understanding how economic lessons have been politicized. American feel, still they possess their rights, but they need to rid their economy of its financial-services masters. Wresting control of the U.S. economy and the capital markets from the grasping greed of a self-serving financial-services industry will reinvigorate our animal spirits and the American dream of opportunity. Recent marriage of Clinton girl to a Greek wealthy oligarch bespeaks the acceptance of defeat by Americans at the hands of these new conquerors of America. They took away the baby with a laugh on U.S.!

It's no surprise that Adam Smith, the father of modern economics and a moral philosopher from the Scottish Enlightenment, would befriend America's senior Founding Father and American Enlightenment stalwart, Benjamin Franklin. They had a lot in common. Adam Smith's magnum opus, "An Inquiry into the Nature and Causes of the Wealth of Nations" often abbreviated simply as "The Wealth of Nations" was published in 1776. No doubt Franklin, who met Smith in France during his long sojourn there on behalf of the fledgling American colonies, would recognize Smith's overarching principle of an "invisible hand" guiding economic actors as a platform for America's own economic principles.

That freedom in America should include equal economic opportunity was guided by Smith's concept of a fundamentally self-regulating system. Smith believed that, if left alone, a population of many individuals - each of them acting in their own interest - would combine to create an economic environment filled with opportunities for all who wanted them.

Smith's "invisible hand," while great in theory, met with reality almost immediately in the new United States of America. Two other Founding Fathers, Thomas Jefferson and Alexander Hamilton, would become bitter enemies over just how an invisible hand would pay off America's Revolutionary War debts.

Hamilton wanted a stronger federal government empowered by a national bank to combine all the states' debts into a federal obligation. Jefferson, whose own vision for America was more agrarian and rooted in Southern tradition and states' rights would eventually capitulate to Hamilton's "scheme."

Jefferson soon regretted the compromise he struck with Hamilton. But that fateful decision would serve to eventually coalesce once bitterly divided states - and actually became the glue that held the federal republic together and prevented it from splitting back into 13 separate nation states.

The states-rights focus - and the bitter philosophical divide over how the new nation should be governed that grew out of it - also set the stage for two-party political system.

Nevertheless, it's not difficult to imagine the ghost of the rural-minded Jefferson - who also warned against Northern banking interests - confronting visitors at his beloved Monticello and stating, "I told you so."

Those Not-So-Efficient, “Efficient Markets”

While Smith's invisible hand has been slapped on different occasions as it gets blamed for the mini boom-to-bust cycles that plagued our economy in its early years, it wasn't until 1900 that the path sought by overly ambitious capitalists would be cleared out and a political dimension attached to the economic philosophy.

The era of laissez-faire government was quietly ushered in by French economist Louis Bachelier. In his "Theorie de la Speculation," published in 1900, Bachlier's simple premise that, all asset prices accurately reflect, all known information and are therefore correctly priced was revolutionary.

 It became the mantra in the United States that, if left alone, asset prices and markets would always be self-correcting and fair (this philosophy would later be institutionalized by famed University of Chicago Prof. Eugene Fama's "Efficient Market Hypothesis"). By embracing academic conclusions that free markets were self-correcting, big business and more importantly, their financiers became politically protected by legislators paid to trumpet the benefits of unfettered markets. Here inadvertently, as if, notional economy moved stealthily into the system sidelining Adam Smith’s economics, based on real values.  

 In the meantime, more booms and busts, characteristic of notional economics, would ravage the U.S. economy. Asset prices weren't exactly transparent in the Panic of 1907. The manipulation of a bubble in railroad stocks burst and only the intervention of super-financier J.P. Morgan, who would force New York bankers into providing enough capital to the public to stem bank runs, would save the economy!

The lesson for bankers was that they needed government help to keep themselves from undermining each other. But, they weren't looking for more regulation. They wanted less regulation - but with a bailout backstop. Six years later, in 1913, they delivered themselves the Federal Reserve Bank System.

 But, the U.S. Federal Reserve didn't have the right solution for fixing the market crash of October 1929. That crash fed into the Great Depression. Big bankers didn't want to extend more credit in a bankrupt economy, so they conveniently used the political argument that the Federal Reserve should tighten credit, as loose credit conditions had led to too much speculation and the crash.

 Then along came John Maynard Keynes and the 1936 publication of his "The General Theory of Employment, Interest and Money," which became the guiding light that showed all how to get out of the dark tunnel we were in but in vein. however, he finally admited at the end in 1946 that his theory was not perfect!

 Keynes postulated that aggregate demand drives economic growth. And if the public couldn't facilitate demand, he said that the government should go into debt to provide the stimulus to create demand. One of Keynes' most quoted phrases states that if "the animal spirits are dimmed and spontaneous optimism falters, leaving us to depend on nothing but mathematical expectations, enterprise will fade and die." Keynes defined those animal spirits as a "spontaneous urge to action rather than inaction."

Banking on the Bankers?

Of course, when times got better, credit was given to sound banking. And when they got worse, bankers and their armies of lobbyists and paid legislators pointed to "regulation" as the culprit - the impediment to efficiently running, unfettered free markets. As the power of the banking-and-financial-services class grew due to inauspicious entry of Gamblers, replacing honest investors, down came the regulatory walls that had been erected over decades to save U.S. from the Gambling bankers themselves.

 In very short order, in fact, the Gambling bankers at the gate became the oligarchs who controlled almost every aspect of the American economy. And just like a coterie of strongmen running another banana republic, they leveraged-up the country. All the while, they knew full well that they had in place all the necessary political force to hold onto their power - even to grow it and strengthen it - if the over-harvesting of their profits would denude their money-making farms.

Then came, the so-called "Great Recession," the financial pox now upon us - and one that's threatening to betray the ideals of this once-all-powerful nation.

Of course, in the so-called Great Recession, it is the bankers and not the public who are being bailed out by their own Federal Reserve, and the government that cowers under its polished boots. The bankers have been lent cheap money, once again, courtesy of their central bank, and handed government-stimulus capital to facilitate demand and revive America's animal spirits all at the cost of honest but badly informed tax payers.

This time, however, as Keynes warned, the majority of Americans have seen their animal spirits dimmed into inaction. The causes for that lethargy of spirit are legion: There's the gross inequality Americans see when looking up, dumbfounded, from the news that Wall Street's profits are back in record territory, or from the realization that the average bonus reaped by an individual banker is 10 times what a working-class American makes in an entire year.

If you're still surprised by these repeated revelations, you've clearly forgotten the "Golden Rule," which holds that "he who has the gold makes the rules." Obviously, here Gamblers has the gold and so they rule!

It's time for a revolution in America. We need to invoke Jefferson and to remember this country's propensity fighting repression. Americans must take back the power that bankers and the financial services industry wields. The wealth this country owns is of the people of America, particularly of those great inventors and entrepreneurs, from the fruits of their labors and private enterprise; it does not belong to the moneymen, who by merely handling it, somehow end up owning it covetously. This is something like power of wife (great inventors and entrepreneurs) goes to a prostitute (Wall street Greeks).

The recent financial-regulation overhaul was a sham, a Trojan horse. There are no significant changes to the power structure that runs America for its own greed.
But the game isn't over.

It's time to take serious steps to stop this slide before America really does become just another banana republic.

Why I put it on my Blog? Yes friends, I have several readers from America and Europe, Japan and Korea and so, wish to share my thoughts with them. This thoughts of this article are broadly from some other American economists, with some my own additions, to make it mine. In other words, “Ideas and tips on any subject” has become international over the time.

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