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Tea Party Financiers Owe Their Fortune to Josef Stalin

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Posted on Apr 18, 2010
Joseph Stalin
Wikimedia Commons / Margaret Bourke-White

By Yasha Levine, AlterNet

This article was originally posted by AlterNet.

The Tea Party movement’s dirty little secret is that its chief financial backers owe their family fortune to the granddaddy of all their hatred: Stalin’s godless empire of the USSR. The secretive oil billionaires of the Koch family, the main supporters of the right-wing groups that orchestrated the Tea Party movement, would not have the means to bankroll their favorite causes had it not been for the pile of money the family made working for the Bolsheviks in the late 1920s and early 1930s, building refineries, training Communist engineers and laying down the foundation of Soviet oil infrastructure.

The comrades were good to the Kochs. Today Koch Industries has grown into the second-largest private company in America. With an annual revenue of $100 billion, the company was just $6.3 billion shy of first place in 2008. Ownership is kept strictly in the family, with the company being split roughly between brothers Charles and David Koch, who are worth about $20 billion apiece and are infamous as the largest sponsors of right-wing causes. They bankroll scores of free-market and libertarian think tanks, institutes and advocacy groups. Greenpeace estimates that the Koch family shelled out $25 million from 2005 to 2008 funding the "climate denial machine," which means they outspent Exxon Mobile three to one.

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I first learned about the Kochs in February 2009, when my colleague Mark Ames and I were looking into the strange origins of the then-nascent Tea Party movement. Our investigation led us again and again to a handful of right-wing advocacy groups directly tied to the Kochs. We were the first to connect the dots and debunk the Tea Party movement’s "grassroots" front, exposing it as billionaire-backed astroturf campaign run by free-market advocacy groups FreedomWorks and Americans For Prosperity, both of which are closely linked to the Koch brothers.

But the Tea Party movement—and the Koch family’s obscene wealth—go back more than half a century, all the way to grandpa Fredrick C. Koch, one of the founding members of the far-right John Birch Society which was convinced that socialism was taking over America through unions, colored people, Jews, homosexuals, the Kennedys and even Dwight D. Eisenhower.

These days, the Kochs paint themselves as true-believer Libertarians of the Austrian School. Charles Koch, the elder brother who runs the family business in Wichita, Kansas, quotes the wisdom of proto-libertarian "economist" Ludwig von Mises, but also sees himself as an economist in his own right. In 2007, Charles made his contribution to the body of free-market thought with an economic theory he calls "Market-Based Management" (a term he trademarked).

David Koch is the highbrow brother who lives in New York. He ran as the Libertarian party candidate for president in 1980 and says his dream is to "minimize the role of government, to maximize the role of private economy and to maximize personal freedoms." Apparently everyone’s a free-market enthusiast at Koch Industries, including its spokeswoman, who recently wrote a letter to the New York Times stating that "it’s a historical fact that economic freedom best fosters innovation, environmental protection and improved quality of life in a society." It might be true somewhere for someone, but not for the Kochs—they owe it all to socialism and totalitarianism.

Here is a better historical fact, one that the Kochs don’t like to repeat in public: the family’s initial wealth was not created by the harsh, creative forces of unfettered capitalism, but by the grace of the centrally planned economy of the Soviet Union. The Koch family, America’s biggest pushers of the free-market Tea Party revolution, would not be the billionaires they are today were it not for the whim of one of Stalin’s comrades.

The story of how the Koch family amassed its socialist wealth starts at the turn of the 20th century with the birth of Fredrick C. Koch. Fred was born in a tiny north Texas town to a Dutch immigrant and newspaper publisher. The historical record is not clear about the family’s wealth, but it appears that great-granddaddy Koch was not hurting for cash, because Fred Koch turned out to be a smart kid and was able to study in MIT and graduate with a degree in chemical engineering. A few years later, in 1925, Fred started up the Winkler-Koch Engineering Company with a former classmate, quickly developing and patenting a novel process to refine gasoline from crude oil that had a higher yield than anything on the market. It was shaping up to be an American success story, where anything was possible with a bit of elbow grease and good ol’ ingenuity.

The sky was the limit—until the free market rained on Fred’s parade.

See, Fred was living through the Roaring Twenties, a time of big business, heavy speculation and zero government regulation. Much like today, cartels were free to form and free to fix—and so they did. Sensing a threat to their royalty-revenue stream from Winkler-Koch’s superior refining technology, the reigning oil cartel moved in to teach the young Koch how the laissez-faire business model worked in the real world.

"[W]hen he tried to market his invention, the major oil companies sued him for patent infringement. Koch eventually won the lawsuits (after 15 years in court), but the controversy made it tough to attract many U.S. customers," according to Hoover’s Company Records service. Just like that, Winkler-Koch Engineering found itself squeezed out of the American market. They had a superior product at a cheaper price, but no one to sell it to.


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By MrK, April 2, 2012 at 9:23 am Link to this comment
(Unregistered commenter)

By Artful Dodger, April 19, 2010 at 4:52 am

” The other problem is that any mention of the Rothschilds as international bankers who had exerted an undue influence on governments is likely to paint the author as anti-Semitic. “

I’ve found that too. You can say Goldman Sachs all day long, but the second you say Rothschild, you’re ‘anti-semitic’.

Even though NM Rothschild brags about their role in the colonisation of Southern Africa, on their own website. What does that make Rothschild bank - selfhating?

I think a lot of the anti-Rothschild material on the internet is obviously anti-semitic, right from the ‘glowing eyes’ and other demonisation, or secret socities - who can prove or disprove that?

However, that doesn’t make NM Rothschild, RIT Capital Partners, etc. disappear, or make them any less influential in the globalisation process. In fact you even get branded ‘anti-semitic’ when you mention the Rockefellers and their organisations, and they’re not even Jewish.

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By dennis, October 16, 2010 at 10:12 pm Link to this comment
(Unregistered commenter)

Lies, TEA party which I am a member of is your average loving American who cares about his country.
I write to about twenty like souls who just want to
save American from socialism.

God bless America.

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Blackspeare's avatar

By Blackspeare, April 21, 2010 at 10:53 am Link to this comment

It’s not how you make money, but how you keep your money!

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By 8bithero, April 21, 2010 at 3:40 am Link to this comment
(Unregistered commenter)

No, sir!  Logic has NO place in the Tea Party movement. 
If you offer logic, you strip them of their fear and
irrationality that they are fueled by.  Logic will only
destroy this gaggle of angry, middle aged Mid Western
and Southern, Christian white people.

Like their favorite book says, fruit from the Tree of
Knowledge is forbidden.

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By bogi666, April 21, 2010 at 2:23 am Link to this comment
(Unregistered commenter)

Anarcissee, it is communism, not socialism, when the government own the means of production.Contemporary social democracies don’t own the means of production and have stock markets which means private corporations. MARCUS MEDLER, it is socialism for the wealthy and capitalism for the poor. Koch learned well from Stalin and liked it.They certainly aren’t libertarians, that’s just their ruse.

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By amunaor, April 20, 2010 at 5:21 pm Link to this comment

RE: ERIC H, April 20 at 8:41 pm

***

Not defending Koch in any way, but it seems someone might be slightly touched with the blight of McCarthy’s paranoia.

Peace, Best Wishes and Hope

WikiLeaks—Collateral Murder:
http://www.collateralmurder.com/

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By amunaor, April 20, 2010 at 4:57 pm Link to this comment

RE: G.Anderson, April 20 at 8:30 pm

***

Have you ever heard of ‘Kingdom Towing’? Its analogous to Guido; from the lending institute, coming to your home in the middle of the night, with a tow truck, to repossess the vehicle for which your payments have lapsed; but in this case the repossession process; the tow truck would be the War Machine.

The neoChinese Capitalists would look back at the nest in which they were born and shat in, as a liability and let rip.

Peace, Best Wishes and Hope


WikiLeaks—Collateral Murder:
http://www.collateralmurder.com/

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By ERIC H, April 20, 2010 at 4:41 pm Link to this comment

I had understood that George Soros (funding Obama, Moveon.org, DNC) also made his mind boggling fortune during WWII by seizing assets from fellow Jews and other dirty deeds which are outdone only by his ongoing influence and dark political agenda.

Quite ironic that the Stalinists with the deepest hatred of the founding concepts of our nation would select this misleading connection. And usually it is those whom have lived under the worst most leftist regimes that have the greatest appreciation of Jefferson’s superior ideology, so perhaps one might consider that and/or easing of conscience a more likely motive for a modern investment in the greater good.

http://www.elh1.com/jefferson/

The insight that is dismissed as Koch’s “paranoia” in this lefto-dogma article is also consistent with a better understanding of the realities of the post WWII world:

“In the months I traveled with (hardcore Communist Jerome Livshltz) he gave me a liberal education in Communist techniques and methods. He told me how the Communists were going to infiltrate the U.S.A. in the schools, universities, armed forces and to use his words, “Make you rotten to the core.” I believe that due to his American experience he was one of the original architects of the Communist plan of subversion of the U.S.A.”

Reminds me a bit of one Russian’s prediction of the Obama presidency.

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By G.Anderson, April 20, 2010 at 4:30 pm Link to this comment

Nietche, once said something like this… history is the process by which the dead bury the living…

The Soviet Union is gone, we won they lost…

and now were losing the peace…because of the Plutocracy…in the here and now…

socialism, communism…those are monsters under the bed, the ultimate fear projection of hard core plutocrats…

...who are in hock up to their eyeballs, to Communist China…which is now one of the leading capitalist state managed economies…

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By ERIC HANSON, April 20, 2010 at 4:27 pm Link to this comment
(Unregistered commenter)

I had understood that George Soros (funding Obama, Moveon.org, DNC) also made his mind boggling fortune during WWII by seizing assets from fellow Jews and other dirty deeds which are outdone only by his ongoing influence and dark political agenda.

Quite ironic that the Stalinists with the deepest hatred of the founding concepts of our nation would select this misleading connection. And usually it is those whom have lived under the worst most leftist regimes that have the greatest appreciation of Jefferson’s superior ideology, so perhaps one might consider that and/or easing of conscience a more likely motive for a modern investment in the greater good.

http://www.elh1.com/jefferson/

The insight that is dismissed as Koch’s “paranoia” in this lefto-dogma article is also consistent with a better understanding of the realities of the post WWII world:

“In the months I traveled with (hardcore Communist Jerome Livshltz) he gave me a liberal education in Communist techniques and methods. He told me how the Communists were going to infiltrate the U.S.A. in the schools, universities, armed forces and to use his words, “Make you rotten to the core.” I believe that due to his American experience he was one of the original architects of the Communist plan of subversion of the U.S.A.”

Reminds me a bit of one Russian’s prediction of the Obama presidency.

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By marcus medler, April 20, 2010 at 1:27 pm Link to this comment

How did these thugs get the rights to put in
PIPELINES that run across thousands of private
property lines?(so much for libertarian business
basics)
The greater good gave them the private right
to violate hundreds of other’s rights.  The
feared government was the muscle. The family
tradition of robbery and cozy relationship with
authority continues- that is the Koch method.

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amunaor's avatar

By amunaor, April 20, 2010 at 10:32 am Link to this comment

Madness feeds violence and violence madness.

Tea Party Protester Threatens Interviewer, U.S. Capitol March 2010, as he spits and sputters his hatred all over himself and camera:

http://www.youtube.com/watch?v=bgec9WX21ik

Peace, Best Wishes and Hope

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By amunaor, April 20, 2010 at 10:25 am Link to this comment

Anarcissie,

Any psychological ‘State’ that panders to, and feeds the base instincts within the beast; without checks and banances, results in catostophic misery to others.

Peace, Best Wishes and Hope

WikiLeaks—Collateral Murder:
http://www.collateralmurder.com/

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By Anarcissie, April 20, 2010 at 10:07 am Link to this comment

amunaor—The term “social democracy” these days is usually used to denote the Welfare state, and “socialism” historically to denote the ownership and control of the means of production by the workers.  As the workers do not seem to want to control the means of production, the latter proposal has proved somewhat problematical.

I continue to not understand why someone who make a big pile of money from Stalin might not turn into a libertarian, or how this fact would affect the politics or other interests of their beneficiaries.  Apparently it has not even kept the Tea Parties on a libertarian track.

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By amunaor, April 20, 2010 at 9:36 am Link to this comment

RE: elisalouisa, April 20 at 10:36 am
***

Also, throughout the ‘Cold War’, Avril Harriman owned a railroad empire within the confines of the former USSR.

All systems are Capitalist systems. The determining factor is who owns and controls the Capital Machinery; the means for: Production, Distribution and Allocation of Goods and Services.

In brief:

A sewing machine is a ‘Capital Machine’; the shirt it produces is a ‘Capital Good’; the Boats, Planes, Trucks and Trains are Capital Machinery for Distribution of the shirts.

Within a true Social Democracy, the workers (Labor Unions) would actually ‘own’ and ‘run’ the physical apparatus of the Capital Machinery; an upside down pyramid, where the bulk of the people, keep self-serving, power-madness in check, at the bottom.

What exists today is an Oligarchy; a runaway ponzi-scheme, without any care or scruples to what happens to anyone below the feeding frenzy at the top.

Peace, Best Wishes and Hope

WikiLeaks—Collateral Murder:
http://www.collateralmurder.com/

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By Dave Thomas, April 20, 2010 at 7:29 am Link to this comment
(Unregistered commenter)

Wow, talk about liberal fear mongering. The best thing about the tea party movement is the fear they strike in the hearts of liberal disciples of big government.

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By elisalouisa, April 20, 2010 at 6:36 am Link to this comment

Follow up articles on the Cato Institute and other think tanks which benefit the power elite would be good. Just google Charles and David Koch, keep going through the pages and one might even conclude that the Tea Baggers are playing right into the hands of the enemy.

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By bogi666, April 20, 2010 at 4:35 am Link to this comment
(Unregistered commenter)

It’s not a free market, it’s a FLEECE MARKET, the individual American taxpayers are FLEECED of their tax monies and given to the CORPORATE AND WEALTHY WELFARE KINGS.

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By bogi666, April 20, 2010 at 4:24 am Link to this comment
(Unregistered commenter)

The term FREE MARKET is a fabrication and what really exists is the FLEECE MARKET, American taxpayers are FLEECED of their tax monies and transferred to the wealthy which includes the protection of the CORPORATE and WEALTHY WELFARE KINGS investments around the world by the Pentagon which has to disguise its real purpose with the propaganda terms of freedom and democracy as its, the Pentagons, role. Anyone who believes this is an idiot. Deficit spending is how it works. The procceds of the Treasury bonds issued are doled out to the WELFARE KINGS with the interest and principle paid by individual taxpayers.

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By ofersince72, April 20, 2010 at 12:04 am Link to this comment

John K
I agree with you except Ron Paul…
Who is he kidding still hiding in the Repulican Party
casting himself as “the real republican”.

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By amunaor, April 19, 2010 at 10:19 pm Link to this comment

((RE: Ralph Kramden, April 19 at 7:37 pm

…“property is theft.” What this country needs is to pay more attention to the life ethics of the Apache and less to the robber-baron ethics of Milton Friedman…))

Ralph, the Indigenous population had not concept of ‘land ownership’, when the white European’s arrived; which is why, for a few pots and pans, they were so easily swindled ; sending out missionaries, who requested their parishioners close their eyes in prayer, and while they had their eyes closed, stole their land and water rights.

The preamble to the Constitution too implies a family structure: of, for and by the people. Consider the fact that this Instrument was written long before the term – Socialism – became horribly stigmatized by the bloody events of WWII, propagandized by the Capitalists who succeeded driving the concept into the ground.

Wall Street horse thief ethics have matured into fancy corporate banking algorithms, designed to fleece; Free-Market-Swindlers & Speculating-Bankers, or whatever other euphemistic façade a Con-Artist lurks from behind; all are predators seeking to snare the unsuspecting passerby.

Peace, Best Wishes and Hope


WikiLeaks—Collateral Murder:
http://www.collateralmurder.com/

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By Bobbi, April 19, 2010 at 6:16 pm Link to this comment
(Unregistered commenter)

Yes and the Kennedy Family got their money from bootlegging, anf they keep their money offshore in Fiji.
I don’t think that you can denigrate a hard working man, like Koch, because of his clientelle, unless he were selling some kind of illegal commodity.

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By Ralph Kramden, April 19, 2010 at 3:37 pm Link to this comment
(Unregistered commenter)

Who was it that said that “behind every great wealth lies a great crime?” Then we should pay attention to “property is theft.” What this country needs is to pay more attention to the life ethics of the Apache and less to the robber-baron ethics of Milton Friedman. It amazes me to watch so-called Christians embrace capitalism. If it weren’t for usury, there would be no accumulation of capital, and usury was forbidden in the bible. Furthermore, Christ was a socialist: Acts 2:44-45; “...and distribution was made unto every man according as he had need.” Bukarin’s: “From each according to his ability; to each according to his need,” was Christian. Amazing.

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By Anarcissie, April 19, 2010 at 10:40 am Link to this comment

The article is an interesting tale, but I don’t see how it reflects on the Tea Parties.  If the Koches are libertarians, from their point of view the Tea Parties have already been subverted.

ITW—Antisemites are tiresome subnormal cretins.  In any sort of open forum, you will find them piping up, because otherwise no one will listen to them.  Under most circumstances, the less attention paid to them, the better.

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By P. T., April 19, 2010 at 9:33 am Link to this comment

Glenn Beck should make one of his charts about this matter.

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By Mark, April 19, 2010 at 8:15 am Link to this comment
(Unregistered commenter)

It’s the quintessential capitalist tale.

Fred Koch goes to work for an employer, Joe Stalin, who couldn’t care less about Fred as a person. They both realize that if they combine forces they will mutually benefit.

The employer eagerly absorbs all Fred has to offer: time, labor, know-how, etc.

Once Uncle Joe had gotten what he needed out of Fred Koch, he cast him aside. Fred got the boot from his employer, no different than, for example, a laid-off 50 year old steelworker.

The twist here is that, whereas the steelworker has nothing to assuage his hurt feelings but nemployment comp and bitter criticism directed against his former employer while conversing with friends, Fred Koch has millions and uses them to broadcast his criticism of his former employer to America at large.

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By Artful Dodger, April 19, 2010 at 5:52 am Link to this comment
(Unregistered commenter)

Well if anyone should know about communism, it would be the Koch’s. I think that the idea of free markets exists from this example. If the mostly Rockefeller group of oil companies would not use Koch technology, then the USSR Inc. would step in. As for cultural subversion of the USA, the idea seems to make sense in that we have high divorce rates, children raising themselves, and a peer culture that excels in urban gangs. Free trade seems calculated to destroy American capitalism, and we have a banking system that has created enough debt and money to buy out this country in foreclosure many times over. We have deep capture of regulatory agencies by large corporations. We already have a state media of sorts. The CFR and the Bilderberger groups act as high soviets of sorts. It’s not high communism for sure, but it does resemble treason from on up high. Recall how American nuclear technology was secretly transferred during the 40’s or how many tech secrets ended up in Chinese hands during Clinton and GW Bush. There are the fall guys like Win Ho Lee and the Rosenbergs as well as the Hollywood communist talent, who had little to do with anything. It was quite unjust. As soon as anyone points to the Pentagon, the NSA or other intelligence agencies, they get necklaced. As to the “Jooz”, the John Birch society has not been monolithic in its antisemitism. I think a lot of this has to do with Buckley trying to confuse the pubic. Some patriots are likely to be lunatics or controlled assets of the intelligence community. It is well known that the Black Panthers and other authentic new left organizations were being infiltrated. Same was happening with the Birchers. The other problem is that any mention of the Rothschilds as international bankers who had exerted an undue influence on governments is likely to paint the author as anti-Semitic. Many Birchers had made that connection. The sad thing is that there are evil Jews as there are evil Christians. I don’t think it would make anyone anti-Semitic if he or she opined that Henry Kissinger was evil. And yes many Birchers were racist, but I don’t think they were at all wrong about the New World Order. Many intellectuals had talked about it. Just look up Bertrand Russell, H.G. Wells, and Charles Galton Darwin. Much of Lenin’s political science is well used by today’s Repub-Dem establishment. I think of the battle between Western Cartel capitalism and USSR monopoly autarchy as experiments to create an improved leviathan. It is not inconceivable to think of a corporation as Stalinist. And I find the use of ex-KGB security experts in American government very strange. (You should research this. Do not take my word for it.) I have heard the American system of oligarchic collectivism referred to as ingenious by Eastern Europeans, because for so long Americans never knew that they were swallowing propaganda as the system appears so “free”.

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By Z1, April 19, 2010 at 5:20 am Link to this comment
(Unregistered commenter)

Sounds like another family that built there fortune by collaborating with the NAZI’s instead of the Communists. Does the name Bush sound familiar?

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By ScottMc, April 19, 2010 at 5:04 am Link to this comment
(Unregistered commenter)

You say “godless” like that’s a BAD thing. Taken a look at your society recently?

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By Inherit The Wind, April 19, 2010 at 3:30 am Link to this comment

JimBob, April 19 at 3:00 am #

Hmmm… the Koch family.  Jewish, much?  How is it these guys have such a way with money?
**********************************************
ANOTHER neo-Nazi $#!thead crops up! Try READING for a change, instead of sounding like an IMBECILE!

Didn’t you see? Grand-daddy was either a DUTCH immigrant or the son of a DUTCH immigrant.

Daddy was a FOUNDER of the John Birch Society—which has ALWAYS been racist, bigoted and anti-Semitic.  That means they hate Blacks, Hispanics, Immigrants AND Jews—explicitly.

And people here at TD think I am paranoid about Jew-hatred here.

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By JimBob, April 18, 2010 at 11:00 pm Link to this comment

Hmmm… the Koch family.  Jewish, much?  How is it these guys have such a way with money?

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By ocjim, April 18, 2010 at 8:40 pm Link to this comment

The moral is that if you got your money through theft, you have no business pontificating about your own purity and trying to justify taking away the livlihood of all others, especially the poor.

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By cabdriver, April 18, 2010 at 8:37 pm Link to this comment
(Unregistered commenter)

My, that’s an enlightening history.

“Steal a little and they throw you in jail- steal a lot and they make you king.”

One correction: Koch was not the Libertarian presidential candidate in 1980. He was the vice-presidential candidate.

Ed Crane was the LP presidential candidate. I should know- I voted for him.

(Politics has proved to be quite an intellectual odyssey, for me.)

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By John K, April 18, 2010 at 7:21 pm Link to this comment

Wow - this is it. How the Koch family got their money?  Do I need to remind you of Joe Kennedy - does that make Robert Kennedy Jr a monster as well?

The tea party origins are Ron Paul, they are (or were) real grass roots folks who care deeply about America and don’t like seeing our civil liberties being taken away. They were also very committed to getting out of the war and ending our Imperial ambitions abroad - at least initially.

The shitheel Dick Army organization got in front of the parade and has “steered” it away from its anti-imperialist roots and wound people up on their themes. It’s bullshit. 

One thing has become clear to me. You can’t have a spontaneous movement without attracting some fringe people - which the media will showcase at every opportunity. This happened with the left as well in the 60s.

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By RickinSF, April 18, 2010 at 6:31 pm Link to this comment
(Unregistered commenter)

Mommy was right, when she told me: “It’s not polite to ask a wealthy person how
they made their first fortune. It’ll always be embarassing.”

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