(from: The Planned Gutting of Industrial America: Who Did It and Why)
By John Hoefle
The heart of the Southern Strategy was the oligarchy’s plan to shift the United States from the world’s most powerful industrial economy, into a post-industrial rentier-financier empire. The industrialized cities of the North would be allowed to decay, while the relatively small cities of the South would be built up as cheap-labor service centers. As the Industrial Belt turned into the Rust Belt, the New South ascended. Houston, spurred by the oil boom, became the fourth-largest city in the country, old Atlanta became the “New Atlanta,” and sleepy Charlotte became a major international financial center. Existing cities were transformed–Dallas, San Antonio, Jacksonville, Orlando, Tampa-St. Petersburg, Miami, to name a few–while Northern cities such as Baltimore, Cleveland, and Philadelphia went into decline.
Coincident with this Southern shift, was the ascension of finance over industry. U.S. industry had largely been in the hands of the financiers since the days of J.P. Morgan’s creation of the industrial trusts, and that control was rapidly consolidated during the 1980s. Orchestrated by Bush’s masters, the speculators took over. The corporate raiders, financed by the dirty-money junk bond networks, bought up significant chunks of corporate America, and terrified the rest. The raiders’ targets, and those who feared they might become targets, turned to Wall Street’s investment banks and law firms for “protection.” As such, the leveraged buy-out/junk bond operation functioned as a giant protection racket, destroying some as a way of collecting tribute from the rest. At the same time, dirty money poured into the real estate market, notably through the giant Canadian developers Olympia & York and Cadillac Fairview. These firms built the skyscrapers which were then filled up with service workers–bankers, lawyers, accountants, clerks, and other white-collar types. Having the tallest office building became something of a fetish for the business leaders, spurring ever larger towers, which in turn were filled with ever larger numbers of white-collar workers.
The pouring of hot money into the real estate markets caused real estate prices to rise. The “wealth” created by these rising values provided more money to pump into the bubble. The rising stock market served a similar function. The cities were transformed into service centers ringed by suburbia, leaving the inner cities full of the poor and minorities, ripe for Strategic Bombing Survey decimation through drug distribution and “Negro removal.”
In the office buildings and the suburbs, the ordinary citizen was also being hooked on speculation. One of the effects of Fed Chairman Paul Volcker’s deadly interest-rate hikes in 1979-80, was that ordinary savings accounts suddenly started paying high rates of interest, giving the ordinary citizen a taste of the action. As more and more of the “little people” discovered the joys of usury, the modern “my money” era was born. That process escalated with the rise in residential real estate prices–homes were transformed from residences to “investments,” with rising equity values adding significantly to the pools of “my money.” The ordinary citizen also began making money from the rising stock market. Over time, a significant portion of the population became addicted to usury and speculation, considering it their right to make money from the manipulation of money. The speculator went from being the enemy to being the role model; the suckers now identified with the casino. The old-style productive industry became the realm of “losers,” replaced by the hot new “industries” of finance and information. Make derivatives, not steel! (read HERE)