History's BRUTAL WARNING to the Trump Era

The hosts and guest draw a direct parallel between the Gilded Age of the late 19th century and the present day, suggesting a 'new Gilded Age.' However, they argue that while 19th-century 'robber barons' like Carnegie and Rockefeller often engaged in philanthropy (e.g., building libraries), today's oligarchs exhibit a complete lack of civic responsibility, acting as 'kleptocrats' focused solely on personal gain without contributing to public welfare.

Host Sidney Blumenthal notes a 'new Gilded Age' [00:00:22], and guest Sean Wilentz, referencing Paul Krugman, states that 19th-century robber barons 'had a sense of civic responsibility, unlike this crew that has none whatsoever that are complete kleptocrats' [00:01:49].

The 'First Great Depression' of 1873 was triggered by a confluence of factors: a speculative boom in US railroad construction (400 new companies, 2-300 floating bonds) that turned into a mania, and a geopolitical move by Germany. After winning the Franco-Prussian War, Chancellor Otto von Bismarck, despite his admitted lack of economic understanding, decided to dump Germany's silver reserves and convert to a gold standard, extracting a massive indemnity from France. This destabilized the global bimetallic (gold and silver) monetary system, causing a 'scramble for gold' among central banks, a sharp rise in credit costs, and a massive contraction of credit, leading to a 20% collapse in commodity prices in 1873 alone.

Liaquat Ahamed details the 'three simultaneous bubbles' between 1870-73, with railroads being 'most relevant' [00:06:20], and explains Bismarck's decision to dump silver and convert to gold, leading to a 'massive cascade of central banks around the world moving into gold' and a 'sharp rise in the cost of credit' [00:15:33].

The financial crisis of 1873 had devastating political consequences in the United States. The collapse in commodity prices, particularly agricultural prices, split the dominant Republican Party and led to a massive swing in the 1874 midterm elections, with Democrats capturing the House. The contested 1876 presidential election resulted in a backroom deal: Democrats conceded the presidency to the Republicans in exchange for the withdrawal of all federal troops from the South. This effectively ended Reconstruction, cementing Democratic control of the South for decades and directly paving the way for the rise of Jim Crow laws and racial segregation.

Ahamed explains that Grant's unwillingness to act on the financial crisis led to a 'giant swing' in the 1874 midterms [00:20:47]. He details the 1876 election deal where Democrats gave Republicans the presidency 'if you withdraw all federal troops from the South,' which 'was essentially the end of reconstruction' and 'not hard to draw the line from there to the rise of Jim Crow' [00:22:29].

The economic turmoil following 1873 fostered a 'paranoid style' in American politics, with populist movements seeking scapegoats. A bogus rumor emerged that British bankers had bribed congressmen to abandon silver, which was then amplified by populists who attributed the money to the Rothschilds. This gave the conspiracy theory an anti-Semitic twist, despite the Rothschilds being largely unknown in the US prior. Similarly, in Germany, the stock market crash of 1873 led to Jews being blamed. This culminated in 1879 when Wilhelm Marr, an opportunist pamphleteer, coined the term 'anti-Semitism' to describe a new, economically-driven form of prejudice against Jews, framing it as a positive stance.

Sean Wilentz notes the 'proliferation of explanations that were pseudo explanations' [00:24:05]. Ahamed describes the 'totally bogus rumor' about British bankers bribing congressmen [00:25:05] and how populists 'added their own twist to it' by involving the Rothschilds, giving it an 'anti-Semitic twist' [00:25:55]. He then explains Marr's invention of the term 'anti-Semitism' in Germany in 1879 [00:28:40].