Gone are the days of the Federal Reserve hiding in the
shadows. Now it’s a woke central bank fighting for climate and racial
justice. Progressives must not fall for this but instead team up with the populist right to audit the Fed and demand transparency.
Let the healing begin! If it is going to be President Joe Biden a
couple months from now, then there will be all the more incentive for
anti-establishment Democrats to join forces with populist Republicans.
What better issue than auditing the Federal Reserve System ?
There is strong precedent for progressives and the populist right to
unite around an “Audit the Fed” movement. In early 2009, Congressman Ron
Paul introduced the Federal Reserve Transparency Act, which garnered
320 House cosponsors by the summer of 2010.
Since then, the anti-establishment factions of both parties have grown
and at least one of the 2009 House cosponsors now holds a Senate seat.
Audit the Fed has passed the House on three occasions, so it could see
as much or more success this coming session.
Another development over the last eleven years is the Fed’s evolving public image.
Before Ron Paul’s 2008 presidential run, the central bank lurked in
near-total darkness. Two thousand nine was a breakout year for its
public relations campaign, and the Fed has failed to return to its prior
obscurity.
Now the secretive power center larps as a super–social justice warrior, fighting for climate and racial justice, the top pet issues of the progressive left. Many
grassroots progressives expressed their distaste for Hillary Clinton
and Joe Biden, but even those who held their noses to vote for them
shouldn’t feel at all obliged to apologize for the Fed’s virtue
signaling.
Meanwhile, inflationary monetary policy most harms those people and communities whom the progressive left claims to champion. Saving becomes more difficult or impossible, while prices of goods rise.
All the more reason for the Fed to adopt the likeness of a woke institution.
Just as it has blamed “irrational exuberance” for boom-bust cycles, it
can now blame systemic racism or climate change for poor economic growth
that’s actually fueled by its own monetary policy.
This week, the Fed officially sought membership in the Network for Greening the Financial System,
an assemblage of central banks and other international forces that
“support the transition toward a sustainable economy” for the sake of
the climate.
This past summer, Fed chairman Jerome Powell promised to improve “diversity” within the Fed’s structure. Will
the new friendlier, kinder, and woker Federal Reserve System win the
trust of progressives or irk them for stealing their thunder and
undermining their vision?
Most Americans already don't trust the
Fed, especially Democrats, people forty-nine and under, and those
making less than $50,000 a year. Those would be natural progressive
constituencies.
Republicans in the House and Senate, especially if the president is
unable to secure a second term, will be in a strong position to take on
the Fed. Trump has long criticized the bank and its chairman, whom he
picked. Although more recent frustration expressed was over interest
rates not being low enough, Trump also supported auditing the Fed during
his 2016 campaign.
Republicans will also likely control the Senate, so any other
Fed-related bills that Democrats might propose would have more trouble
finding enough votes for passage. Take for instance the Federal Reserve
Racial and Economic Equity Act recently introduced by Senators Elizabeth
Warren and Kirsten Gillibrand and cosponsored by Bernie Sanders.
This FRREE Act seeks to
“minimize and eliminate racial disparities in employment, wages,
wealth, and access to affordable credit.” That amounts to overhauling
the Congress’s instructions for the Fed, which have focused the bank’s
duties on job creation and price stabilization since 1977.
Unfortunately, its champions Warren and Sanders have
opposed auditing the Fed in the past. It will take a groundswell of
grassroots pressure to turn them around, but it can be done.
Any hope for real political unity that actually benefits the American
people depends on the success of projects like Audit the Fed. If
populist movements from the left and right can coalesce on this one
thing, they will find their time well spent.
Even if a President Biden or Trump vetoed the legislation, it would
amount to progress in the pursuit of transparency at the Fed. Both the
left and right side of grassroots politics could claim a piece of the
same victory. That would be a nice turnaround from 2020.
Warren Buffett, Chairman and CEO, Berkshire Hathaway
According to the 13F filing that Warren Buffett’s Berkshire Hathaway
made with the Securities and Exchange Commission for the quarter ending
December 31, 2019, it held 59.5 million shares of JPMorgan Chase with a
total value at that time of $8.29 billion. By June 30 of this
year, that position had been trimmed by more than half, to 22.2 million
shares. By September 30, one day after JPMorgan Chase had just admitted
to its fourth and fifth felony count in the past six years, brought by
the U.S. Department of Justice, Berkshire Hathaway’s position in
JPMorgan Chase tallied up to just under 1 million shares, a 98 percent
reduction from the beginning of the year, according to the SEC filing
Berkshire Hathaway made on Monday.
And it’s not like Buffett is simply getting out of all big bank
stocks. According to the same 13F filing for September 30, Berkshire
Hathaway still held a whopping $24 billion in Bank of America stock;
$4.7 billion in U.S. Bancorp; $3 billion in Wells Fargo; and $2.5
billion in Bank of New York Mellon.
Jamie Dimon has served as Chairman and CEO of JPMorgan Chase during
all five felony counts as well as a much broader crime spree that has
resulted in fines and settlements of more than $37 billion. The bank has
been charged with rigging everything from electricity markets in the
U.S. to interest rate benchmarks in Europe to foreign currency, precious
metals, and even the U.S. Treasury market. (See detailed rap sheet
below.) Despite a rap sheet that rivals organized crime, the Board of
Directors of JPMorgan Chase has stuck with Dimon to sit at the helm of what is now the largest federally-insured bank in the United States.
Now the smart money seems to be saying it’s had enough. In addition
to Buffett’s Berkshire Hathaway, George Soros’ investment arm, Soros
Fund Management LLC has dumped all of its shares of JPMorgan Chase
according to its 13F filing of September 30. That compares with the
258,252 shares it owned on June 30, 2020.
JPMorgan Chase’s Rap Sheet
(This Is Not a Complete List)
April 21, 2011, JPMorgan Chase agreed to settle a civil lawsuit
and pay $56 million to settle claims that it overcharged members of the
military service on their mortgages in violation of the Service Members
Civil Relief Act and the Housing and Economic Recovery Act of 2008.
February 7, 2012, JPMorgan Chase agreed to pay $110 million to settle consumer litigation that claimed it overcharged customers for overdraft fees.
February 9, 2012, JPMorgan Chase reaches an agreement with the OCC to pay $113 million for unsafe and unsound mortgage servicing and foreclosure practices.
August 10, 2012, JPMorgan Chase agreed to pay $1.2 billion to settle claims that it, along with other banks, conspired to set the price of credit and debit card fees.
November 16, 2012, JPMorgan Chase agreed to pay $296.9 million to the SEC to settle claims that it misstated information about the delinquency status of its residential mortgage portfolio.
July 2013, a unit of JPMorgan Chase agreed to pay $410 million
to the Federal Energy Regulatory Commission to settle claims of bidding
manipulation of California and Midwest electricity markets.
September 19, 2013, JPMorgan Chase agreed to pay
$80 million in combined fines to the Consumer Financial Protection
Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) and
$309 million in refunds to customers whom the bank billed for credit
monitoring services that the bank never provided.
September 19, 2013, JPMorgan Chase agreed to pay $920 million
to U.S. and U.K. regulators for its unsafe and unsound banking
practices in using bank depositors’ money to trade in derivatives in
London. It lost at least $6.2 billion in the trades. This was known as
the “London Whale” scandal.
November 15, 2013, JPMorgan Chase announced that it had agreed to pay $4.5 billion to settle claims by private investors that it defrauded them in mortgage-backed securities.
November 19, 2013, JPMorgan agreed to pay $13 billion
to settle claims by the Department of Justice; the FDIC; the Federal
Housing Finance Agency; and various State Attorneys General over its
fraudulent practices with respect to mortgage-backed securities.
JPMorgan acknowledged it made serious misrepresentations to the public.
December 4, 2013, JPMorgan Chase agreed to pay 79.9 million Euros to settle claims of the European Commission relating to illegal rigging of benchmark interest rates.
In December 2013, JPMorgan Chase agreed to pay $22.1 million
to settle claims that the bank imposed expensive and unnecessary flood
insurance on homeowners whose mortgages the bank serviced.
May 20, 2015, JPMorgan Chase pleaded guilty to one criminal count
brought by the U.S. Department of Justice for its role with other banks
in rigging the foreign exchange market. The bank agreed to a fine of
$550 million.
December 18, 2015 the bank agreed to charges by the SEC that
it had steered its customers into in-house products where it reaped
higher profits without disclosing this conflict to the customer. It paid
$267 million to settle these charges.
On January 20, 2017 JPMorgan Chase agreed to pay $53 million to settle charges that it had discriminated against minority borrowers by charging them more for a mortgage than white customers.
October 2018 JPMorgan Chase agreed to pay $5.3 million to settle U.S.
Treasury allegations that “it violated Cuban Assets Control
Regulations, Iranian sanctions and Weapons of Mass Destruction sanctions
87 times,” according to Reuters.
December 26, 2018 JPMorgan Chase settled claims with the SEC for $135 million over charges that it had improperly handled thousands of transactions involving the shares of foreign companies.
September 16, 2019, the U.S. Department of Justice indicts
two current and one former precious metals traders at JPMorgan Chase
for turning the precious metals desk at the bank into a “racketeering”
enterprise.
September 29, 2020, the U.S. Department of Justice brings two counts of wire fraud
against JPMorgan Chase involving “tens of thousands of episodes of
unlawful trading in the markets for precious metals futures contracts,
and the second involving thousands of episodes of unlawful trading in
the markets for U.S. Treasury futures contracts and in the secondary
(cash) market for U.S. Treasury notes and bonds.” The bank admits to the
charges and agrees to pay $920 million in fines and restitution to
various regulators. It is, once again, put on a three-year probation.
ECONOMY 57 other shareholders against the decision of the European Central Bank Banca Carige, after Malacalza, other shareholders are challenging the ECB's commissioner Tuesday 17th November 2020
GENOA - In addition to Malacalza Investimenti, there are 57 other Carige shareholders who have appealed against the commissioning of the Ligurian bank by the ECB to the Court of Justice of the European Union in Luxembourg.
This is what emerges from the European Official Journal. The appeal against the European Central Bank filed on 5 October this year by small Carige shareholders is explicitly linked to the Malacalza Investimenti action filed on 4 October, to which it refers for the reasons. According to what emerged on Monday, the family finance company, Carige's first member with 27.3% prior to the commissioning, listed six reasons for the appeal, including the fact that the extraordinary administration "appears to be manifestly excessive and disproportionate" and that the appointment as commissioners of President Pietro Modiano and Ad Fabio Innocenzi of the deceased Board of Directors "appears to be disrespectful of the absence of even potential conflicts of interest".
Last Thursday, during the House Financial Services Committee hearing
with federal regulators of banks, Congresswoman Katie Porter of
California told the Vice Chairman for Supervision of the Federal
Reserve, Randal Quarles, that the Fed has a “big problem.” Porter has a
Harvard Law degree and was previously a law professor
at the University of California Irvine School of Law. If Porter
believes the Fed has a legal problem, it is highly likely it does.
Here’s how the exchange between Porter and Quarles went:
Porter: “The Fed is largely responsible for
dispensing the $500 billion Congress provided as a bailout for corporate
America – the biggest bailout in our country’s history, potentially.
Using taxpayer dollars to buy bank debt was never part of that plan. In
fact, the Federal Reserve stated explicitly in this document [holds up
document] that it would not be purchasing bank debt. What happened?”
Quarles says he doesn’t know what document Porter is holding up.
Porter says it’s the Fed’s own “Frequently Asked Questions” on the terms
of their corporate bond buying program, which specifically states that
the Fed will not be buying the bonds of any “insured depository
institution,” i.e., a bank. Here is a link to that document.
Quarles: “I understand the question. We haven’t bought bank debt in those facilities.”
Porter: “What’s an Exchange Traded Fund, Mr. Quarles?”
Quarles: “As I was getting ready to say. We have
purchased Exchange Traded Funds at the very beginning of the process in
order to jumpstart the reignition of the economy and we stopped
purchasing Exchange Traded Funds several months ago.”
Porter: “Exchange Traded Funds, for everyone who is
watching, those are just baskets of stocks [or corporate bonds] issued
by a variety of companies. And, is it not correct that the Fed bought
$1.3 billion in ETFs.”
Quarles: “That number sounds right.”
Porter: “My question for you is how much of that was bank debt – in the Exchange Traded Funds.”
Quarles: “I can get that information for you. I don’t have the numbers in front of me.”
Porter: “Well, it was a lot…these are companies like
JPMorgan Chase, their debt is in there, and it’s a big problem that you
did this. A white paper published by the Yale School of Management
showed that, in fact, 15 percent of all those ETFs purchased was for big
banks…This is a headline from Bloomberg: ‘Despite Stated Exclusion, the Fed Is Buying Bank Debt.’ Would you like to revise your earlier
statement…?”
After some back and forth, Porter asks Quarles who is the world’s
largest issuer of ETFs. Quarles hesitates and Porter says “BlackRock.”
Stating that it “seems beyond belief to me,” Porter then asks Quarles if
the Fed hired BlackRock to buy up BlackRock’s own ETF products.
When even the bankers of the ultra-rich, along with the bailiffs
working diligently on their behalf, are panicking about excessive
inequality, it becomes hard to say our world is morally defensible.
UBS recently reported that, between April and July 2020, as the
pandemic’s first wave was surging, the collective stash of the world’s
billionaires grew by 28 per cent and many millionaires joined their
ranks. Surely the Swiss megabank is happy to see them laughing all the
way to its doors, but it is also genuinely worried.
Similarly, the International Monetary Fund has expressed concern – an
institution that for decades operated in service to the global
oligarchy, forcing governments, including one I served in as finance
minister, to pursue inequality-boosting policies while eliminating
benefits for the dirt poor. The extent to which the IMF has changed its
tune amounts to an Ovidian transformation. Even before Covid-19 subdued
economies and drove the weak to hopelessness, the IMF was advocating
raising income taxes on the wealthy. Now, in its October 2020 World
Economic Outlook report, the Washington-based institution goes further,
calling for progressive taxation, capital gains, wealth and digital
taxes as well as a crackdown on the tax “minimisation” schemes by
multinationals.
It is not, of course, concern for the billions of people driven into
despair that has energised the likes of the IMF and UBS to call for
action against breathtaking inequality. Their worry is that the rich
have siphoned off so much wealth that the spending power remaining in
the hands of the many is too feeble to keep demand up and capitalism in
reasonable health. Like a lethal virus that rapidly killed off its host,
and thus is driving itself into extinction, capitalism is undermining
itself by impoverishing and disempowering the “little” people.
To see how capitalism steadily undercut itself, it helps to begin in
2008. Following the chain reaction that began with the collapse of
United States investment bank Lehman Brothers in the midst of the global
financial crisis, central banks around the world produced mountain
ranges of dirt-cheap debt-money to refloat the financial sector. At the
same time, most of the West’s population was treated to universal fiscal
austerity, which limited the ability of lower- and middle-income
earners to spend. Unable to profit from these austerity-hit consumers,
corporations and financiers stayed hooked up to the central banks’
constant drip-feed. But this drip-feed had serious side effects on
capitalism itself.
Consider the following sequence: the US Federal Reserve extends new
liquidity to, say, Bank of America, at almost zero interest; to profit
from it, Bank of America must lend this capital, although never to the
“little” people whose circumstances and ability to repay are diminished;
so it lends to, say, Apple, which is already awash with cash.
Why is Apple saving money, rather than investing it? Because that’s
how the company maximises its profits in an environment of low consumer
demand. To see this, consider that, since 2008, megafirms such as Apple
look at their potential customers and see a sea of increasingly
impecunious “little” people. Having established a virtual monopoly over
the market for their products, such as the iPhone, they understand that
to maximise their profits they must restrain their output, so as to
create the relative scarcity that boosts prices. Output constraints
require lower investment which, in turn, results in greater savings for
Apple at the expense, again, of the “little” people who are immersed
more deeply in precarious jobs.
Nevertheless, despite the fact Apple’s directors do not need the
extra cash, when the Bank of America offers them what amounts to free
money, they take it. Why? First, the small interest they pay is tax
deductible. Second, they take the new money to the sharemarket where
they use it to buy… Apple shares. The company’s share price skyrockets
and, along with it, so do the executives’ salary bonuses – because they
are linked to the company’s share value – as well as the stashes of the
ultra-rich holding most of the company’s shares.
Apple is merely one example. The same applies to all large
corporations throughout the world. Between 2009 and 2020, this process
prised stock prices away from the real economy. It was a time when the
world of money inflated while the ratio of investment to available cash
shrank to the lowest level in capitalism’s history. The ultra-wealthy
grew richer in their sleep; money and power accumulated in the hands of
the 0.1 per cent, and a majority of people were held behind. Market uber
power subsequently allowed the uber rich, and the megafirms they
control, to usurp markets, buy justice, capture regulators, pad
campaigns – in short, to poison liberal democracy.
That was the state of play before Covid-19 paid global capitalism a
devastating visit. The virus hit consumption and production massively
and at once. Central banks felt they had no alternative but to pump even
more money into the hands of the banks – hoping against hope that, this
time, it would be lent to firms that invested. But why would this trick
work during a pandemic when it had failed before?
It did not work and, as a result, the freshly minted trillions of
central bank money led to the obscene growth of stock prices at a time
when average wages, prices and profits were collapsing. This is the
reason for UBS’s finding that during the few short months of the
pandemic the world’s billionaires saw their wealth rise by an indecent
28 per cent.
Covid-19 was the last straw for what used to be known as capitalism:
the causal link between innovation, profitability, stock prices and
capital accumulation. Unbeknown to both leftists and conservatives,
post-2008 secular stagnation combined forces with the economic impact of
Covid-19 to drag us into a variety of post-capitalism.
Why post-capitalism?
Think about it: capitalism is supposed to be a decentralised system
where competition co-ordinates the decisions of profit-maximising
economic actors that are too powerless, individually, to influence the
market. Our reality, after 2008, and especially during this pandemic, is
nothing like it.
Today, three companies – BlackRock, Vanguard and State Street – own
at least 40 per cent of all American public companies and nearly 90 per
cent of those listed on the New York Stock Exchange. Tacit collusion is
rampant, because every chief executive knows the parent megafirm is
likely to be talking to the chief executives of rival companies it also
owns. The result is higher prices, less innovation and stagnant wages.
This system, in which Big Tech and the financial sector yield immense
power, and in which the ultra-rich own almost everything, cannot really
be described as capitalism. Techno-feudalism comes closer to capturing
the spirit of the present.
Under this dystopic post-capitalism, our techno-feudal lords have the
power to manipulate our behaviour at an industrial scale. Moreover,
whereas in years past extreme poverty hit mostly the unskilled, the
rural and the marginalised, now it is spreading to white-collar
professionals, to well-educated people stuck at home or in sectors fast
declining, to fading city centres, to artists, musicians and people who
used to survive well by doing creative things while doing odd jobs.
If I am right that we are already in the early phase of a
spontaneously evolved grim post-capitalism, maybe it is time to start
designing, rationally and together, a desirable post-capitalism. But
where to begin?
Here are two ideas.
First, suppose that a country’s central bank automatically granted
each person a free, digital bank account. Then, instead of lending to
commercial banks in the hope that the money would trickle down to the
“little” people, the central bank could credit a certain amount to
everyone, with the government taxing that sum at the end of the year,
depending on one’s total income. The central bank could go even further,
granting every newborn an account with, say, $100,000 to be spent as an
adult on education, setting up a business or some other creative
project – in effect, a trust fund for every baby.
Second, central banks can agree to create a digital accounting unit,
let’s call it the Kosmos, in which all international trade and
cross-border money transfers are denominated with a free-floating
exchange rate between national currencies and the Kosmos. This would
allow an international successor to the IMF to tax every trade deficit,
every trade surplus and every surge of capital out of, or into, any
country, so that Kosmos units accumulate steadily in a global sovereign
wealth fund, which could be used to finance green transition projects in
developing countries.
While these ideas are not a complete blueprint of “another now”, they
offer insights into what we can actually do, instead of merely
lamenting the rise of the new feudalism that is threatening our species.
This is the final essay of a series examining how Covid-19 will
reshape key issues facing Australia. To read the others – by Lidia
Thorpe, Richard Denniss, Natasha Stott Despoja, Wesley Enoch and Kevin
Rudd – go to thesaturdaypaper.com.au/comment/after-the-virus.
This article was first published in the print edition of The Saturday Paper on
Nov 7, 2020 as "After the virus: How to design a post-capitalist world".
Each quarter publicly traded companies file a form known as the 10-Q with the Securities and Exchange Commission. The 10-Q filed by the largest bank
in the United States, JPMorgan Chase, on November 2 carried a very
disturbing paragraph that had not appeared in the 10-Q the bank filed on
August 3. The paragraph reads as follows:
“JPMorgan Chase Bank, N.A. has been
advised by one of its U.S. regulators of a potential civil money penalty
action against the Bank related to historical deficiencies in internal
controls and internal audit over certain advisory and other activities.
The Bank already has controls in place to address the deficiencies
related to the proposed penalty. The Firm is currently engaged in
resolution discussions with the U.S. regulator. There is no assurance
that such discussions will result in resolution.”
Why is this paragraph so disturbing? First of all, the words
“deficiencies” and “audit” are not two words that one wants to read in
the same sentence pertaining to any Wall Street bank. But they are
particularly frightening when it comes to the largest bank in the United
States that has racked up an unprecedented five criminal felony counts
– to which it admitted guilt – in the past six years. That’s five more
felony counts than the bank racked up in the prior 100 years of its
existence.
Equally unprecedented, the Board of Directors of JPMorgan Chase has
kept Jamie Dimon as its Chairman and CEO, despite the fact that he has
sat at the helm of the bank during this unprecedented and relentless
crime wave.
There is also the disturbing fact that JPMorgan Chase’s three-year
probation for its role in rigging the foreign exchange market just ended
in January of this year. Nine months later, on September 29, it gets
slapped with two new felony counts by the U.S. Department of Justice for
rigging the precious metals and U.S. Treasury market and is put on another three-year probation.
And now, just a little more than a month later, we are learning that
there is yet another federal probe of this bank in the works.
This is known as a recidivist lawbreaker. A real Justice Department
doesn’t keep doling out probation periods to recidivist lawbreakers. It
throws them in the pokey and demands changes in the management and Board
of JPMorgan Chase.
But William Barr’s Justice Department did the exact opposite of what a
rational person would have expected on September 29 when it announced
JPMorgan Chase’s fourth and fifth felony count in a six-year span.
Instead of holding its typical press conference to announce such weighty
charges, the Justice Department stunned Wall Street watchers by making
the announcement on the same day that all eyes were on the presidential
debate that night and doing it with just a press release – no press conference.
That decision might have come from the fact that prosecutors were
charging the bank with “tens of thousands of instances of unlawful
trading in gold, silver, platinum, and palladium…as well as thousands of
instances of unlawful trading in U.S. Treasury futures contracts and in
U.S. Treasury notes and bonds…” but the Justice Department had decided
to condense what could have been tens of thousands of counts into just
two felony counts. If you don’t hold a press conference, reporters can’t
ask those picky questions as to why the Justice Department was letting
this serial lawbreaker off so easily.
By comparison, in 1985 the U.S. Department of Justice forced the big
Wall Street bank, E.F. Hutton, to plead guilty to all 2,000 counts of
wire and mail fraud it had engaged in.
BANKER BOSS NICHOLAS BIDDLE SCHEMES FOR EARLY RENEWAL -- BUT JACKSON VETOES BANK RE-CHARTER BILL
"I
am willing it (the Bank) should expire in peace; but if it does persist
in its war with the government, I have a measure in contemplation which
will destroy it at once, and which I am resolved to apply, be the
consequences to individuals what they may." – Andrew Jackson
Though the real owners / bosses of The Bank were based in Europe, Nicholas Biddle
of Philadelphia ran the United States end of Rothschild’s vast criminal
network. Biddle, who had graduated from the University of Pennsylvania
at the age of thirteen, was a brilliant financier and highly formidable
adversary. To paraphrase a line from the classic film, The Godfather,
Biddle “carried around politicians and newspapermen in his pocket like so many nickels and dimes.”
In January 1832, Biddle's lapdogs and dupes in Congress, chief among them being Senators Daniel Webster of Massachusetts and Henry Clay(recall the “corrupt bargain of 1824?”)
of Kentucky, introduced early Bank re-charter legislation. Although the
charter was not due to expire until 1836, Biddle and his boys figured,
correctly, that the current Congress would re-charter the Bank, and that
Jackson, in a re-election year, would not risk losing votes in
Pennsylvania and other commercial areas by vetoing it. They figured
wrong.
THE LEADERS OF THE PRO-BANK FORCES
Above: Nicholas Biddle -- Rothschild's American agent
Biddle
's Boys: “The Immortal Trio” -- disloyal Vice President and
Secessionist John C Calhoun, Senator Daniel Webster, former House
Speaker who was behind the anti-Jackson “corrupt bargain” of 1824, now a
Senator, Henry Clay
Jackson's
opposition to the Bank became his obsession. Supported by strong
attacks against the Bank by some of the pro-Jackson newspapers, Jackson
vetoed the Bank Re-charter Bill and Congress lacked the 2/3 majority
needed to override a presidential veto. Jackson then ordered the federal
government's deposits to be removed from the Bank and placed in state
banks. In his veto address to Congress (July 10, 1832) Jackson denounced
the Bank as a tool of the wealthy and well-connected to further enrich
themselves at the expense of the people.
Excerpts:
“Is
there no danger to our liberty and independence in a bank that in its
nature has so little to bind it to our country? Is there not cause to
tremble for the purity of our elections in peace and for the
independence of our country in war? Controlling our currency, receiving
our public monies, and holding thousands of our citizens in dependence,
it would be more formidable and dangerous than a naval and military
power of the enemy.”
"It
is to be regretted that the rich and powerful too often bend the acts
of government to their selfish purposes. Distinctions in society will
always exist under every just government. Equality of talents, of
education, or of wealth cannot be produced by human institutions. In the
full enjoyment of the gifts of Heaven and the fruits of superior
industry, economy, and virtue, every man is equally entitled to
protection by law; but when the laws undertake to add to these natural
and just advantages artificial distinctions, to grant titles,
gratuities, and exclusive privileges, to make the rich richer and the
potent more powerful, the humble members of society-the farmers,
mechanics, and laborers-who have neither the time nor the means of
securing like favors to themselves, have a right to complain of the
injustice of their Government. There are no necessary evils in
government. Its evils exist only in its abuses. If it would confine
itself to equal protection, and, as Heaven does its rains, shower its
favors alike on the high and the low, the rich and the poor, it would be
an unqualified blessing. In the act before me there seems to be a wide
and unnecessary departure from these just principles."
1.
“The Downfall of Mother Bank” -- President Jackson brandishes an 'Order
for the Removal of the Public Money deposited in United States Bank --
sending small figures running for cover. Biddle is depicted as the devil
with horns. 2. A satirical cartoon on the failure of Henry Clay, Daniel
Webster, John Calhoun, and Nicholas Biddle to save the Bank. The four
are blown up as Jackson enjoys a smoke.
NOVEMBER, 1832
BIDDLE BACKS CLAY FOR PRESIDENT -- JACKSON WINS RE-ELECTION IN A LANDSLIDE
Though
early re-charter was killed and Jackson was whacking away at the roots
of the Bank, Biddle and his agents still had four years left to
re-charter the Bank -- if they could get rid of Jackson. To that end,
Biddle -- who had already been funding crooked politicians and
anti-Jackson newspapers -- poured big money into the 1832 presidential
campaign of Senator Henry Clay. After the bank re-charter veto Biddle
wrote to his trusted puppet Clay:
"You ask what
is the effect of the veto. My impression is that it is working as well
as the friends of the Bank & of the country could desire. I have
always deplored making the Bank a party question, but since the
President will have it so, he must pay the penalty of his own rashness.
As
to the veto message I am delighted with it. It has all the fury of a
chained panther biting the bars of his cage. It is really a manifesto of
anarchy … and my hope is that it will contribute to relieve the country
from the dominion of these miserable people. You are destined to be the instrument of that deliverance,
and at no period of your life has the country ever had a deeper stake
in you. I wish you success most cordially because I believe the
institutions of the Union are involved in it.”(bold emphasis added)
The 1832 Democrat National Convention was the first ever convention of what was now known as the Democrat Party (which should in no way be confused with today’s corrupted Marxist Democrats!). It was held in Baltimore, Maryland in May of 1832. In addition to re-nominating Jackson, Martin Van Buren
was chosen to be his Vice Presidential “running mate” – which meant
that one of Jackson’s deadliest enemies, the southern secessionist and
pro-Bank agent John C Calhoun, would no longer be Vice President.
In
spite of attacks against Jackson by agents of the central bank and
anti-Jackson / pro Biddle newspapers, the people, of states north and
south, stood with Jackson. He was overwhelmingly elected to a second
term over Biddle’s boy.
Jackson defeats the snake Clay in a landslide!
PDF & PAPERBACK BOOKS BY M S KING (Click on image)
