Great Depressions Then and Now (Part 1) - Wayne Jett - (BWL POD #0033)

In today's episode my friend Wayne Jet and I talk about the history of money, economics and his book, the fruits of the

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, we had fun, we enjoyed it, I hope you do too, thanks for listening, welcome to the banker with my podcast. I'm your host James Nedry and I'm as excited as I can be to have guest Wayne today and I'm excited for you to have the opportunity to find out who this man is, his background and his work, and us. We'll finally get to his book The Fruits of Shit, so welcome Wayne Jet.

I appreciate you coming on the podcast with me. Thank you so much. James. Invitation and I look forward to the discussion. Perfect. Wayne is kind of said before. You know we haven't had. Many discussions before, maybe a phone call in a couple of emails when I bought your book and I bought your book The Fruits of Grass about a year and a half ago and I discovered you and was even exposed to your book on Sara Westballz. podcast and yet there's a lot of content on the internet where you've interviewed various podcasters and

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I encourage listeners to look up Wayne jet and listen to him in his interviews.

What I would like to do today is for Wayne to get about his background, I want the listeners to know who his background is and what, but the costs argued before the Supreme Court as a lawyer, that's impressive and then move on to the financial world, find out what what's going on and then knowing the genesis of their work. that's what really produced this book and then what you've done and what you're currently doing, so that's what I'd like you to do, if you don't mind, thank you. I'll be happy to do it. I'll try to be as brief as possible about my background, but I grew up in a family, my father was a farmer, basically broke during the Great Depression, became a sharecropper, married my mother who was maybe half as his age, but basically he was I was born in 1900, so you can see how old he was during the 30s and it's a very big struggle and traveling all over the country trying to find a job of any kind of upbringing and any kind of money and that small town we moved to when I was oh, probably when I was eight or nine we moved off the farm because we got repossessed because you know, I'm sure I had the prices of livestock and meat, etc., my dad grew up with some cows that the bank took.

At the time I didn't know why we moved, but we moved to the city and I ended up having one. I went to the same school in my small town for my entire primary and secondary education and when I got through those fantastic teachers that I had from first to twelfth, I was an honor student in both English and engineering and not only that, But at the University of Oklahoma, where I attended, I can't believe how well they treated me. I got busy while I was there my sophomore year, basically after selling coke and at Stan's football stadium and delivering mail around campus during my first semester, freshman year and then working in the zoology lab and that kind of stuff.

I got a job because of the influence. from my advisor and engineering, he got me a job at the University Research Institute and I became iBooks, I got trained and, yes, a good salary was detected for writing proposals, I became a technical writer for them, starting From there I was hired for one of the projects that An engineering professor started doing classified research for the De

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ment of Defense after a couple of years, so I felt like I had gained quite a bit of experience as a technical writer and I was hired to basically write e investigate that weapon.

I finished. I wrote the report for that and then they hired me at the continuing education center, a man I knew in high school because he had been our football coach for a year before he was reactivated in the military, he had played Oh, oh, football. So I was able to let them know that it's very easy to go into details here with so many details, but he hired me after I finished that research project to work in his special projects office at the continuing education center and he was a very innovative guy, there was developed an advanced government studies program, a master of arts for people who were already working, became a sensation in the country and I was his number two, basically administratively, we went back to Washington to federate and find the people to do it.

The contract work with and things like that was in 1963 or so or '64 actually, but in any case he was so successful that the program he had developed he was contracted out of the University and, as his assistant, I later became a director as soon as I got my engineering degree, which was in 1965, and I finished my law degree in 60, in January of 67, then I was director of an office that had already established an office in Washington DC, the first for any University , I think, and all of that really was a tremendous experience. I had some of the most interesting jobs I've ever done in my life while I was still in college, that Advanced Studies office that I'm the director of and hired staff for and in Europe we had classes taught there as well as at Air Command Headquarters.

Strategic we had NASA students we had all kinds of brilliant people, including a personnel director at NASA ARC Anderson at the time from the Marshall Space Flight Center was one of my students one of my friends, I mean he wasn't a professor on that show, I was the administrator, but it was a tremendously interesting time in my life. I traveled to Europe, to Britain, etc., and looked at the defunct military bases and met the people I went to. several universities around the southwest are organizing an Alliance for Latin America with a professor there at the University who specializes in that area, so I really had a very broad experience.

I can't believe how well they took care of me and everything. I was largely a student at the time and a couple of years later I decided that the last thing I wrote or did for the university in my position, other than being administrative, that advanced program was that I wrote a proposal that the university needed. I applied to get the first Postal Research Institute and it got a couple million dollars, which was a lot of money in those days for a lot of things and as soon as I did, I basically resigned from my position there because I needed to start practicing law. . and I just really wanted to practice in Oklahoma, but I couldn't find a job, so I took a position that turned out to be very valuable and in Los Angeles and for a small company that had a tremendous practice in the field.

I was interested in employment law, so I joined that firm and was with them for a couple of years. One of the things I was asked was whether I would separate from the firm and become lead counsel for a set of institutional-sized employee benefit pension trusts. a

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pension plan a great health care plan a great training program for apprentices in the trade of operating engineers the man who hired me to do that was largely the head of the union even though he had worked in a law firm administrative lawyers and I happened to later learn that his origin was that he had grown up in the Bakersfield area, surrounded by many people who had had to immigrate there from Oklahoma during the depression and that he had so much respect for the people he had grown up with that He thought I might be another honest person and overall it became a long term relationship, although unfortunately he retired only a few years later, but my relationship with those employee benefit trust funds lasted about 28 years and was a tremendous chance.

To influence the development of the law related to the application of benefits to employees, there was no law in the federal courts at the time, although it was a federal law that authorized the plans in the first place and largely my signature conducted litigation in the U.S. Court of Appeals for the Ninth Circuit that largely established jurisprudence in the country on how those contracts, those employment agreements had to be enforced so that employee benefits could be secured appropriately because they were a lot of money paid by employers and some employers took shortcuts. and I didn't pay properly and it had to be enforced and I think we did a good job on that, that's how I got to the Supreme Court, but unfortunately the bad

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of that story is that Congress betrayed employers in 1974, best of labor laws at that time had been to tell workers and employers: you make your agreement and your agreement will be enforced, the government will not impose our own requirements on you, you make your agreement and we will live well with that in '74, They reneged on that and basically to, I think, centralize more government power, as our governments tend to do, they passed a law that says, well, we're going to guarantee, suppose we're going to guarantee pensions. and therefore, instead of simply allowing the employer to agree to pay a certain amount of money and the pension plan to manage the funds and invest them in such a way as to provide the best possible pension, we are going to say that the employer has to to underwrite whatever the pension ultimately costs beyond these cents per hour or the dollars per hour that they pay for each employee who works well for them, that completely corrupted the entire legal system and the contractual system that those pension plans were based on. fencing and It really caused a lot of upset because of the tremendous growth and benefits that are obtained with those programs, by putting employers in the position of not being sure how much they would eventually have to pay when their construction projects and they live contract, but still, what was that about.

I'll try to start that discussion, but it gets directly involved and that was one of the two cases that I took to the Supreme Court, the Supreme Court of the United States, it was called Connelly v. Pension. Benefit Guaranty Corporation, which was just a boondoggle that basically collected money from all the good trust funds around the country, and the ones that were well run would take the money and put it in a pot and come back and pay out the profits that had been made. stolen from those who were in the East Coast area of ​​New York, which was the area where the author of that bill, Jacob Javits in the Senate, came from, and he knew it was going to be a boondoggle that would blow everyone up the Trust and so and that's exactly what it did, the Pension Benefit Guaranty Corporation went bankrupt and yet it also destabilized all the trust funds across the country, it made employers want to get out of this, there was a fund, a small employer in San Diego. that he actually had a lawyer who offered to represent him in the case as an intervenor and basically he was a guy who with his family had only developed a small sand and gravel company and because of this law even though he had paid all his contractual contributions he was responsible for over a million dollars in this Pension Benefit Guarantee Corporation for something he had never agreed to pay, that million million million and a half dollars, that guy was his entire net worth that he had developed, you know, in his small company of ten or twelve employees doing small construction projects that wiped out thousands of small employers like that across the country just because of the power of the federal government to intervene, undo and break the contracts that private individuals had made.

I took the case to the Supreme Court. on the basis that it was a violation of the taking clause, it was a passage of a law that took privately owned money from one private person and gave it to another, a private pension plan and that is most clearly a violation of the Fifth Amendment, the taking clause there was a precedent for holding that way. I had Ned's rights and I lost nine to zero in the Supreme Court, the so-called conservative Supreme Court and they didn't even face answering the questions of why they were doing this other than they had done it before they had allowed the government to do it. this type of thing under the due process clause that does nothing more than guarantee your hearing before you are hanged, so in that circumstance it was very demoralizing.

I had two cases. In the Supreme Court I won one of the nine to zero and it was still just as dishonest and damaging to my client even though they supposedly let us win it. It was a collective bargaining case that I won't go into, but it was a very case. It's very It was demoralizing for a lawyer to finally get to the Supreme Court and discover what determined and dishonest reasoning they were willing to use to produce a result, no matter what the right or wrong of it was and no matter what the Constitution or Constitution was. federal law would say a lot of political things like we've seen in spades, particularly in these last two years with the election of President Donald Trump and the kinds of things that our government institutions do now, and I haven't even gotten away from my law by taking I spent a lot of time talking about PBGC and that was the ERISA Act of 1974, that'sright, you know, a lot of damage was done, that's a good thing, but nevertheless, that was my background and a lot about the year 98 mm mm.

I was largely getting out of legal practice and was more interested in the financial world, getting into that and trying to study to better understand how I can protect the assets that I had earned during my legal career and he studied economics on my own and, In particular, it was I became interested in so-called supply-side economics and came to the conclusion that it was actually a classical economic theory. It just had a new name, but I discovered Jude Winooski, who had called it supply-side economics. Time Art. Laffer. Jude Wanniski had a little money management. economic forecasting advisory company called hoggonomics, it really wasn't money management.

I had to correct that it was an advisory economic analysis for the market. The participants and their clients work in large asset management companies and the like and I started communicating with him. He ended up hiring me to be a representative in the western states, so basically a commission to try to get institutions to use his work, I think. and he thought then that he was the best economic forecaster, his record was better than anyone else's for the last 25 years or so, 23 years of the 20th century and the beginning of the 21st, but his client base was also very small compared to the larger companies that had the ability to produce a large number of charts and show and tell for wealth management firm clients even though their records were not as good as his in terms of understanding what he was doing the economy.

What I'm going to do and in the process. from representing him to other clients or prospects, I also wrote some articles for him. In fact, he and I published a co-authored article in one of the Washington newspapers. I think he was the examiner, so it was the interesting time to learn more about In economics, I certainly think he was an important figure because he had written an important book called The Way the World Works and he believed that Jude Wanniski believed that there was explained the great collapse because he had been able to piece together the specific events.

At the time of the Senate floor vote on the Smoot-Hawley Tariff Act, every time there was a Senate floor vote in October 1929 in which the vote advanced the cause of the Smoot-Hawley Act, there was an immediate collapse of major proportions which was the great collapse of 1929 and he explained it that way in his book and that book was actually named one of the 100 most influential books of the 20th century about the way the world works. and that's how I knew. He was disenchanted by the fact that the leading economic spokesmen in academia and business didn't give any credit to his book, didn't really pay attention to it to explain the great crisis, there's a kind of let it happen and he got the next thing he got. but there was no praise from the economic community for a long time and I thought over a period of time, after a year or two with him, I learned pretty clearly that he couldn't handle anything that I was worried about in the investment community about fraud. financial if I mentioned that I mentioned it, it quickly calmed down and I certainly wasn't allowed to post anything, so I learned that you are indeed not allowed to say anything about financial fraud if you want to work in the financial industry and I'm Jonas, we learned of AIDS later, after the Madoff scandal in which the very famous, I mean, a very accomplished man in the Chartered Financial Analysts Society, was the president of Chardin Financial Analysts of Boston, was a quant.

So I really understand that terminology. He was very capable. The man who was trying to report it to the SEC for eight years and got no money back, left telling him it was a fraud. They basically put him out of the business after he found out he couldn't work. He became unemployed as soon as it became known that he was the one who tried to get the SEC to arrest Bernie Madoff without success until the scandal broke and there was a 50, whatever. It was, I think, 50 million dollars or something like that, so in that circumstance, while I was still working for Jude, I started doing some research on my own because I also didn't believe the stories that the financial community was putting out there.

The Great Depression was too complicated, too complex, they couldn't identify what caused it, but it seemed to be one of those things that, you know, buy the kind of comments about it, it was the failure of human beings, too greedy. either to positive or to negative or what Roosevelt was supposedly saying is that fear is what is causing this, we just have to conquer our own fears and everything will be fine, so I started searching. I had been interested for some time, but not really. I want to write a book. I wrote a small one but before and it's a lot of work and there's very little reward for what you do, but I stuck my nose in looking at a multi-volume work that was the edited personal diary published by the man who was Secretary of State, sorry, FDR's Treasury secretary virtually the entire time, except the first year, when another man preceded him.

This man was Secretary of the Treasury all the time and he kept his personal journal daily. and a Yale professor, the story of which he had edited his diary along with the help of Morgenthau Henry Morgenthau Jr. and in that circumstance I thought that maybe he would reveal some things there that he hadn't talked about or admitted to himself and then I started to look like a needle in the haystack, but he had already had enough exposure to Jude Wanniski and classical economics. I thought he knew something that would be important if he found it and so in that circumstance I started searching and it wasn't long before I found something that I thought was important enough.

I had to talk. I had to mention it to Jude. I did it. on the phone and Jude immediately says you have to write a book. I thought it was that important and I'm sure Jude, knowing how hard it is, didn't say it lightly because it's a lot of work and it was certainly the last thing I wanted to hear because, frankly, I was trying to make money, I was trying to make a living and hopefully I was trying to do it in a way that would help my family and also be successful in the work I was trying to do. but unfortunately it was no more than four or five months later that Jude Wanniski passed away from a heart attack at the age of 69 and the company that he had created and was running at the time Paul Economics essentially ended at the end of that year . and then he was alone, he and I at that time, frankly, had been planning.

He was already in the process of setting up an independent company with him to manage money according to his views because no one had fully done that yet, although he had several money managers using his company, but of course with his Death fell by the wayside and then the event is a long, drawn-out focus on my background and how I got to this, but if you still have time for this discussion. I'll be happy, James, to go ahead and start telling you what I found now that I have the time, Wayne, and I appreciate the details of your experience.

I mean, I was trained as an engineer, a lawyer, and then in the financial world, there's a reason why it exists. there's so many footnotes and documentation and in your book so much documentation in your book that no so I thank you for that and yes let's move on please that's all fine with me if I'm just a listener Wayne that sounds like That was really a whole process of discovery, you know, step by step, something like a mosaic that is put together piece by piece, very interesting. Well, I would say that after that first piece, Alma and Jude's comment almost disgusted me and I didn't do it.

I'm not going to investigate further because this is too big a thing, it's not the way I want to spend my time. I need a living being or none I ever had, but nevertheless, particularly with Jude's early death, I decided well. If there is something there, I have the responsibility to find it because at least I know what to look for and where to look, etc., and so I continued, I went back to those same Morgenthau Diaries journals as they were edited and I found a lot more and I found the things that I knew they were so important that I couldn't let him down.

I had to do my job. I had to take my responsibilities and record it because if I didn't, it was clear that no one else had done it or anyone. Otherwise, at least it hasn't happened otherwise until then and I haven't found anyone else, particularly those in the academic community. It's like what happened with Madoff. People in the academic community are apparently not allowed to talk like this. of things even after my book came out describing and defining in detail the role that FDR and the Great Depression played, another academic book came out praising him for being a traitor to his class oh yeah he's a demigod he's a demigod so I continue At this point, although my book was published in 2011 in mid-2011 and here we are in 2019, it is still in the phase where it is ignored, oh yes, rather than discussed as far as the academic community is concerned, with very few exceptions.

An academic community has ignored it, they do not buy it, they do not use it in their classes. I have had many comments from readers who should be in the classes. I think it is readable, perhaps even at the high school level, but certainly at the university level, and I believe. What economics deals with Classical economics treats economics in a much more understandable way than Keynesian economics, which is a completely misleading mechanism that attempts to divert people from understanding economics and what policymakers are doing. and what are its true objectives. The reasons are like this. I have explained that, for example, there is a chapter in that book dedicated to Keynesian analysis and what it is about and I have no doubt that not only is it completely incorrect and many of its basic premises, but they are also intentionally, from the point of view of from the point of view that it tries to make things very complex instead of simplifying them.

I say, for example, that in terms of salaries they make them so difficult to understand in terms of what they are, what they are about, that you wonder how anyone ever got a job from anyone and then you put it in a general concept, It's really a way to confuse people and obfuscate them so that they don't really know what policymakers are doing or what the effects are, and yet because there's a lot of money behind Keynesianism, what I call the cabal of the kingmakers trying to rule each country is in the driver's seat when it comes to our universities and it is a great tragedy.

I think in my lifetime there has been a shift in our universities from the teaching of classical economics that guided the country. Well, during the 19th century was when we had our greatest economic growth as far as the middle class is concerned and that is why, as I say in my book, starting in 1900 there was an express plan written in English to destroy the middle class by global level. especially in the United States, but throughout the world, that means that the middle class is not only average income, but the middle class includes everyone who is able to support themselves and their families with their work and work, even the lower middle class, they are supported with a low standard of living, but nevertheless they support themselves they are not slaves of the state they are not slaves of the king that is what the middle class is and there was an express written plan in English to destroy that middle class completely to destroy all nations that use so-called democracy so that once and for all it becomes clear and predominant that other human beings other than the ruling class do not have a say in the way they live or in their rights and obligations;

They are a slave class at the service of the rulers, that was the written plan published in 1901 that immediately earned the author of it, a British author named HG Wells, an immediate invitation to the White House of Theodore Roosevelt while they honored the guests of the arm of the woman who was the creator of Planned Parenthood, her name escapes me at the moment, but I'm sure everyone sang it Margaret Sanger, the singer, and Welles left that meeting as a guest of honor in the US Theodore Roosevelt's White House saying that calling Theodore Roosevelt the demagogue I have dreamed of was invited to the palaces of Europe was made into the stellar academic milieu for the rest of his life if I list four weeks in a row in Theodore Roosevelt's White House Roosevelt and Eleanor and listed Stalin in the Kremlin held in each of those places and of course made each of those people heroes in terms of their leadership in the world and the direction it was going, for example, he. called the kitchen cabinet that's not what it was called for Roosevelt he had this group of people who advised him and he called HG Wells he called those men the new the new man who is capable of taking absolute power that's the point of all this the written plan that had been put into practice to destroy the middle class to destroy democracy by the year 2000 to learn to poison all the people who did not need what they call the people of theabyss this is a horrible thing and yet it is the reality of our history and at this point I think it would be important to specifically address the actions taken to cause the Great Depression, the crash of 1929.

I learned that after researching it. I learned about it when I was finishing my book after I had researched what was done to cause it. I also learned about their pre-planning. I'll talk about that later, but the accident of '29 was pre-planned, but it got him going and Hoover did three things to help him. In the first, there was a widespread belief that the fall of 29 was not only premeditated but was caused by a very widespread financial fraud in the markets that is doing what they call rigging the stocks by selling counterfeit stocks that they did not own. .

Nowadays we call it short selling but many stocks were faked by selling them short when they don't exist which caused the prices to crash, that's what caused those five big days of big cracks and it made what I added to the Jude's explanation when Iski had discovered that they occurred right at the time of those votes and therefore thought that it was the meaning of the votes that caused the collapse that day. Well, I think it had been agreed that the votes were the signal to all those who were in the plan, all the big Wall Street traders, all the big banks and their cohorts and those who benefited from knowing what they were doing, all They would sell short at the time of those votes, that's what caused the collapse.

And it was cleverly chosen as a signal because it could be used as an excuse saying well, this was going to ruin world trade, that's why the market was supposedly afraid of what What was he going to do with world trade, well, but world trade was not like that. important to the US market at the time, it wouldn't have caused that big of a reaction, but it did cause it because they premeditated and planned beforehand to use that as a signal to do their naked short selling and therefore they could sell short knowing that is going to be taken to the bottom, then they could rally again at a very low price, raise it again and then do it all over again, which is exactly what they did, that was the situation and yet Hoover did nothing about it, It was his. number one wrong and the first wrong he did the second thing he did signed smoot-hawley the tariff bill which within 18 months from the date he signed it, which was in June nineteen thirty eighteen months Then, by the end of the 1930s, unemployment was twenty-five percent or more and we had lost seventy percent of our export trade and seventy percent of our import trade, all of which could have stopped the Senate that they didn't want it to pass or it certainly could have. he vetoed it it was only passed by three votes there was no chance he would have passed it if he had vetoed it and he should have known it would be harmful there was no reason to stop other people from selling here we had it it was a small part of our total economy just It wasn't that important and yet it caused this trade war all over the world.

Then, with all that, with unemployment at the end of 1931 at something like 30% or more, he will run for office in 32 again, but that is In his fourth year in office as president, Hoover has the general idea that it is going to be affirmative and will have a gigantic tax increase: income taxes quadruple the lowest rate from 1% to 4% and expand it greatly to cover many more people with income that had not even had to pay the income tax down to the floor and the top rate of 25 percent had tripled to about 75 percent, so that was going to be passed and it was passed by the Democrats in 1932 and of course Hoover was voted out. out of office from him and that would have been removed from the city on a rail if the people had the time to do it, so he deserved to be out of office for those three things.

Roosevelt Franklin Roosevelt was elected to undo those three things and he ordered as indicated in this campaign that's what he would be doing, but of course once he was elected he did exactly the opposite: he didn't repeal income taxes, in fact , every year he was in office during his four elected terms until his death, he raised taxes and/or added new taxes every year except 1939 and I'll tell you later why he didn't do it then it was because Congress didn't do it because the Democrat who then controlled the house had lost 83 seats in 38 elections, so that explains one year and he was insisting that they raised taxes for an entire year and even the Democratic House wouldn't pass a bill to do it so well, let me ask for clarity here in '32 when Hoover raised the taxes that I meant that at that time, the federal income tax deadline, the due dates were different, but at some point it wasn't, they weren't taxes made retroactively?

Well, yes, yes, very, very good point that you made, that was in the 1932 tax bill was enacted that year towards the end of the year and went into effect on January 1, '32, so of course , there was no withholding tax at that time, so all tax was due and payable on or before March 15th. 15, 1933, that puts us not March 15, 1933, yes, I mean these dates are significant because let me also say that Hoover has a complete experience. You know that you started talking in 1901 with HG Wells and now we are going to I know the great crisis of '29 and there is a lot of history that happened between 1900 and 1929 and my mentor, our Nelson Nash, I learned from him that you cannot separate the economy from the history behind every major historical event, there is some economics behind it and I digress a little, but here we are, in 1932, taxes increased dramatically and then they are retroactive to March 15, 1933.

Now let's share with us a little of what happened in 1933 and Rosa, this is just a continuation of the construction that was calculated and put into motion and continues today in my opinion, but March 15, of course, 1932 turned out to be a very propitious because just before we had a supposed bank run, why would people be running? to the banks to get their money would be to pay taxes and, therefore, in large part that so-called bank run that gave Roosevelt the invitation to close the banks and why he would want to do it right The big Wall Street banks have always hated the small banks.

They want to eliminate as many as possible and that accomplished much of that goal. At that time they could close all the banks and they closed them all. and they could simply refuse to allow the ones they didn't want to operate, they would just keep them closed. I haven't tried to document them individually, but that was a circumstance, it's been the circumstance since the smaller banks are still the adversaries of the enemies the competition of the big banks with Wall Street and the big banks on Wall Street are still, Of course, the dominant financial force in the country, there is no doubt about it and they certainly are when it comes to the Federal Reserve. owning and controlling the Federal Reserve with little influence from the smaller banks, but yes, that's exactly the kind of things that were very important around the time of the Great Depression and the things that got Roosevelt started in terms of what he could do for the big banks and eliminate their competition also in terms of hurting the middle class, but let me go ahead with some of the additional things that I'm sure he did on tariffs as well; he appointed a Secretary of State Cordell Hull, who was well known for being someone who strongly supported international trade and therefore Cordell Hull was one of those who wanted to reduce tariffs, so he chose him as Secretary of State .

Cordell Hall immediately organizes an international conference in London called nations trading with nations to come. that there could be an agreement to reduce tariffs across the board and revive international trade, so he launched it in July 1933, just three months after taking office and of all the nations there, he has a group terrible of people sent. with him by Roosevelt basically says that we are living large in Paris or London while they were there, but nevertheless he has the meeting ready to sign an agreement that reduces tariff rates and the day they are about to do so Roosevelt makes a speech on the radio from Washington declaring that he will not enter into any agreement that states that he will not devalue the US dollar he was devaluing the dollar it is like the reverse of the same coin that the tariff greatly changes the terms of trade significantly and therefore when Roosevelt did not allow anything in the agreement related to the value of the currency, that means they cannot sign an agreement, well, everyone got as angry as the Hornets in London at the international conference, they all went home angry and there was In other words, there was no OK, the newspapers even at the time said that Roosevelt had torpedoed the attempt to reduce tariff rates, which of course is exactly what he did, so I told them what he did on taxes.

I told them what he did on taxes. tariffs Lydia, next is fraud in the markets, well, fraud in the markets had continued throughout Hoover's term, so Roosevelt was giving an indication that he was going to do something to stop the fraud, so in 1933 they passed the Securities Act of 1930 Securities Act of 1933 and basically made it a crime to engage in fraud in the trading of corporate stock. The problem was that they did not define what the sanction was and they did not find what fraud was, so it was useless. The next year 34 they passed the Securities Exchange Act of 1934 and created the SEC Commission to regulate fraud and determine what fraud was and they specifically designed it as a commission with representatives from the financial community to make sure that the big guys They are never prosecuted for fraud.

Which surprises me. It surprises me. So you can't do anything worse than what FDR did to correct the three big mistakes that Hoover made, but that's not where Roosevelt stopped, it's right where he started and I started. I told you he's already raised taxes every year, but let me go over the other things. One of the things that he started doing immediately after taking office, this was even when Morgenthau was before he became Treasury Secretary. I think Morgenthau was head of They called the Reconstruction Finance Corporation, it was more or less a slush fund to spend money in ways that Roosevelt thought were beneficial to the economy and one of the things they started doing right away was buying gold. on the open market. in foreign currency and that's why they were taking money that had been collected as tax money and spending it on gold to increase the amount of gold that the US Treasury had and now it's fake, why would they do that when people die of hunger? the kind of thing that takes money out of the economy and stores it exactly the kind of thing that comics used to say Scrooge McDuck would do and it was a terrible thing for ordinary people because it meant there was no money in the economy.

Roosevelt began doing that immediately in 1933, even at a time when he had already ordered in March '33 that Americans must hand over their gold coins. Anyone who had gold coins had handed them over for what they paid for them: $20.67, take it to the bank. You'll get to 20 67 in cash and that was a criminal law that required criminal punishment if you were caught for being raped and that started immediately at the end of the year, they pretty much had all the gold that people had invested in. Remember when? The passage of Smoot-Hawley caused many factories to close because they could no longer export, many businesses failed, those that imported too, and when people liquidated their businesses they sold them for pennies on the dollar, but whatever.

They couldn't reinvest the money they had left because there was no business for anyone, so they had bought gold to try to protect the value of their purchasing power because there were rumors that Roosevelt was going to devalue the dollar and so they were protecting themselves against the devaluation while he takes all the gold and then as soon as he has it for twenty dollars and 67 cents an ounce, he gets it in the United States Treasury and then he devalues ​​the dollar to $35 an ounce of gold and takes all the so-called profits that are already in the Treasury and he takes them and transfers them to a secret organization called the Exchange Stabilization Fund, you know, a title that makes it look like they are not going to have the stock market. fraud clearly that was not going to be the case with the SEC established as a mechanism to facilitate fraud and so we have the circumstance that we have a secret organization, the Stock Market Stabilization Fund, that does whatever it wants to this day and we have no report from them on what they do and it is said that their funds are much larger than they initially wanted.

I got the call with Wayne Jet. Now it was a little long, soSo we decided to divide it in half and make two parts, so be it. Be sure and watch part two, I may even come back in the future to continue our conference, so thanks for listening. Have a great day. Thank you for joining us on the bench with a live podcast. If you're watching on YouTube, make sure to LIKE and SUBSCRIBE and click that little notification bell; Otherwise, join us on Apple Podcast and Stitcher for weekly content.