Send this article to a friend:

May
12
2023

A New America Needs Old Hickory
Sean Ring

In the summer of 1997, three songs were played over and over and over again on the radio. They were Building a Mystery by Sarah McLaughlin, Sunny Came Home by Shawn Colvin, and Where Have All the Cowboys Gone? by Paula Cole.

All day. Every day. On every radio station, it seemed.

And good songs, they are. Colvin’s Sunny Came Home is about renewal, while McLaughlin’s Building a Mystery is a love song. But Paula Cole’s song seemed the neediest.

I used to drive around after work – my career had just begun – and listen to these songs all the time. My goodness, America was amazing back then.

The long twilight, the windows down, the breeze blowing through what little hair I still had… it was glorious.

It’s hard to believe it was over a quarter of a century ago.

Colvin and McLaughlin would take the Grammys by storm in 1998. Cole was runner-up to them in three categories.

But here in 2023, I find myself wondering, “Where have all the cowboys gone?”

Fascism! How Dare You?

I’m convinced America just sleepwalked into it.

Everything was going so perfectly back then.

Greenspan was a cool, loose hand on the monetary spigot.

Clinton made welfare into “workfare” and controlled the fiscal spigot.

Cry foul all you like, but the simple fact is Bill Clinton’s last four budgets were surpluses.

Credit:FactCheck.org

Yes, surpluses. Forgive me. Whippersnappers out there may not know what that is.

A surplus is when government receipts from taxation exceed government spending. Yes, I know it’s nearly impossible to believe, but it can happen.

In fact, it was so true the US Treasury stopped issuing 30-year bonds in October 2001.

(Of course, the UST started to reissue them in 2006… oh well!)

In the 90s, the Clinton administration and Wall Street were so damn cozy that Secretary of the Treasury and alleged genius Larry Summers helped tear down the Glass-Steagall Act that separated commercial and investment banks.

That act alone should’ve put him in front of a firing squad.

“But Sean, you’re a libertarian, I thought?”

Sure, you can tear down that wall, if you let the banks fail. We didn’t. And we never will.

Later, Summers also threw his support behind the Commodities Futures Modernization Act of 2000. That effectively deregulated the global market in over-the-counter (OTC) derivatives and was Summers’s crowning achievement (his word, not mine).

Those two mistakes essentially caused the Great Financial Crisis of 2008.

But this isn’t about Summers. This is about the marriage of corporate interests and government. He’s merely the poster boy of a revolving door system of government and private sector workers wrecking the country.

No, we need someone in Washington who wants government and business to go to their neutral corners for a few years so we can sort out this insidious nouveau fascism.

And I know just the man for it. His name is Andrew Jackson.

Unfortunately, he’s been dead for nearly two hundred years.

Old Hickory

Andrew Jackson, the Seventh President of the United States, was nicknamed “Old Hickory” because of his strong and resilient personality.

One of the primary reasons for the nickname “Old Hickory” was Jackson’s leadership during the Battle of New Orleans in the War of 1812. He commanded American forces against the British and achieved a decisive victory. His troops described him as stern and unyielding, comparing his resoluteness to hickory wood, known for its strength and durability.

Jackson was known for his strong-willed and stubborn personality. He was steadfast and resilient. He exhibited a determined and unwavering approach to pursuing his goals and defending his beliefs.

Jackson was a tall, wiry man with a weathered face, and his robust physique further contributed to the comparison.

His nickname “Old Hickory” also influenced his populist appeal. It reflected his image as a man of the people who was relatable and represented the common folk. He seemed familiar and approachable.

Do any of the frontrunners on either side bear an even passing resemblance to this man?

The Second Bank of the United States (But Not Last, Unfortunately)

But my favorite reason for admiring Jackson is his destruction of the Hamiltonian monstrosity known as the Second Bank of the United States.

He did this for five reasons, which I’ll list below. I warn you: these may all sound eerily familiar.

Concentration of Power: Jackson disliked the concentration of economic and political power in the hands of a few wealthy elites. He believed that the Second Bank of the United States, as a central bank, was controlled by a small group of individuals who had undue influence over the nation’s financial system. He saw it as a threat to the democratic principles and equal opportunities he championed.

Lack of Accountability: Jackson viewed the Bank as an unaccountable institution. It operated with little transparency, and its decision-making processes needed to be subject to sufficient scrutiny. He rightly argued that such an institution, wielding significant power over the economy, should be subject to democratic control and oversight.

Suspicions of Corruption: Jackson thought the Bank was corrupt. He believed the bank’s president, Nicholas Biddle, and his associates used their power and influence for personal gain.

Economic Concerns: Jackson believed the Bank favored the interests of the wealthy and privileged classes and saw it as an impediment to economic growth and opportunity for ordinary citizens. He thought the bank’s policies, such as restricting credit to specific regions or industries, hindered economic development and favored the elite.

States’ Rights: Jackson was a strong proponent of states’ rights, believing states should have more control over their affairs. He saw the Bank as an extension of federal power and believed its existence encroached on the states’ rights to regulate their economies.

As Roger Daltrey once sang, “Meet the new boss/same as the old boss.”

But luckily, Jackson prevailed in the Bank War of 1832.

The Bank War of 1832

In 1832, the Bank’s president, Nicholas Biddle, sought an early recharter of the Bank, hoping to secure support from Congress and force Jackson into a politically dangerous position. The bank’s charter was not due to expire until 1836.

Jackson used his presidential veto power to reject the recharter bill. His veto message resonated with the public, and he won the 1832 presidential election with significant popular support. His victory encouraged him to go for the Bank’s jugular.

Jackson initiated the removal of federal deposits from the Bank, transferring them to state banks, which he considered more democratic and accountable. These state banks became known as Jackson’s “pet banks.”

The transfer of funds to pet banks led to a surge in lending, fueling economic growth, inflationary pressures, and speculation.

The Second Bank’s charter expired in 1836, and Jackson’s opposition effectively prevented its rechartering.

Although the Bank continued to operate as a private institution for a few more years, it lost significant influence and power over the nation’s financial system. It was finally liquidated in 1841.

And that, my friend, is today’s feel-good story!

Wrap Up

Yes, it can happen. The “Creature From Jekyll Island” can be returned from whence it came.

But who’ll do it?

RFK Jr.? Trump? De Santis? Nikki Haley? Joke Biden?

Come on! None of them got the Mott’s.

If only we could get Old Hickory back!

Or maybe we should’ve just listened to Ron Paul.

Have a great weekend!

 
My story starts in Hasbrouck Heights, New Jersey, where I grew up. My childhood was idyllic. I never thought I'd leave the Heights. Well, maybe just for college. When I was searching for colleges, I only looked within a hundred miles or so. I wound up going to Villanova. I stayed there for four years and earned — their word, not mine — a finance degree with a minor in political science. After that, I went to work on Wall Street. I had a menial job at Paine Webber to start, but then I got my first real Wall Street job at Lehman Bros. (before its collapse, of course). I worked there in Global Corporate Equity Derivatives as an accountant, believe it or not. Honestly, I hated the job back then. I didn't know how spreadsheets worked — yes, even with a finance degree. (Now I'm a Microsoft Excel nut. I think it’s one of the most extraordinary things ever invented.) After that, I moved to Credit Suisse, who sent me to London — the center of global operations for banking. I was young. Not only did I love the city for being a Candyland for alcoholics, but I also needed the international experience to cancel out my mediocre grade point average to get into a top 25 U.S. business school. Somehow, though, I stayed for a decade, until I discovered London Business School. There I earned a master’s (HA!) degree in finance. My next job was as a futures broker, which I utterly loathed. When I had enough, I took a year off — pub crawling around London and pissing away my bonus money. Then I figured out that I needed a new job. So I went to work for a company called 7city Learning, where all of the best finance trainers were working. I had no idea about any of that, but imagine walking into the 1927 Yankees locker room and being taught how to hit. I spent my time teaching all the traders exams, the graduate programs of the various big banks and then the CFA Level 1 review courses. Yes, that's the only level I've passed. I hate that exam. I never really wanted to run money anyway. In 2009, my boss asked me to move to Singapore to help build the business in Asia. Then I went to work for another financial training company where all of my friends had migrated. Around the time I was getting bored of Singapore, my old bank asked me to work at talent development for them in Hong Kong. Nearly three years later, I moved to the Philippines, where I started an EdTech startup called Finlingo. Along the way, I’ve racked up a ton of qualifications — I am a CAIA, FRM and CMT, amongst a few other things — but they don't mean anything. All that matters are my experience, my connections and my takes on things. So every day I'm going to do my snarky best to inform and entertain you.

 

dailyreckoning.com