The dangerous advent of 'diplomacy minus dollars'

MOST of this year's US presidential candidates reject the extravagant financial diplomacy that has been the defining characteristic of US strategy for ages. They are so averse to Wall Street firms that they are unlikely to use them to promote US foreign policy goals, as in the past.

American foreign policy has always had an intimate connection with US banks and Wall Street since the days of "dollar diplomacy" in the early 1900s - when Washington and major banks collaborated to seize control of the finances of indebted countries of Latin America. This was to avoid letting them fall under the control of European bankers.

Dollar diplomacy went out of fashion in the 1930s as the US replaced it with its more benign "good neighbour policy". Washington nonetheless maintained its strategy of attaining diplomatic goals abroad by the liberal use of financial assistance to other countries, often with the help of US financial institutions.