ADDICTED TO GREED

God... a being whose only definition is that he is beyond man's power to conceive.

Ayn Rand

I think, if you look it up, Sir Francis Bacon is credited with saying, “money is a good servant but a bad master”. Actually, it was an old French proverb, far older even than the Elizabethan politician, and Sir Francis merely quoted it – and in French, “L’argent est un bon serviteur, mais un méchant maître.” His own original observation (in English) about money said the same thing, but was as prosaic as fertilizer. “Money is like muck,” he said, “not good except it be spread.”

The alleged short-cut to knowledge, which is faith, is only a short-circuit destroying the mind

Ayn Rand

You see Sir Francis believed in the biblical warning that “The love of money is the root of all evil” (Timothy 6:10) , and that a buck in your hand is worth a buck, but a dollar spread through the economy is worth several more. You buy a loaf of bread and you employ the baker and the driver who delivers it, and the check-out clerk, etc. Amongst economists this is called the “velocity of money multiplier effect”, or the VMME, and most economists multiply each dollar spent on bread by six.. This is the material logic which – in addition to Judeo-Christian and Islamic morality - justifies food stamps and unemployment insurance.  And yet, today's devotees of Ayan Rand, like Republican budget committee chairman Paul Ryan, do not believe in the VMME. They believe wealthy Americans should act only out of self interest while the working poor, aka the middle class, should sacrifice for the good of the nation. Heads the bankers win, tails, the people who borrow, lose.

We will rebuild America’s system on the moral premise...that man is an end in himself.

Ayan Rand Atlas Shrugged

According to Wikipedia, “A bank connects customers that have capital deficits to customers with capital surpluses.” But in the post “Citizens Untied” world, where a Supreme Court majority can believe that corporations have the same rights of free speech as individuals – and enough money to reduce “Free Speech” to an oxymoron - money has become the master. Five American banks now hold – hold - more than $8.5 trillion in assets – 56% of America's $15 trillion economy, while most small businesses cannot buy a loan. These mega-bankers practice zombie capitalism, trading their cash surpluses back and forth between themselves, hedging their equity by shifting the money from this pocket to that, paying themselves a bonus every time their computers shift the funds. At some point reality must intervene in this monetary computer game world, as J.P. Morgan discovered yet again in recent weeks. And when it does, the destructive effect is suffered by the nation as a whole. Sacrifice might be required, but only for those who cannot afford to live in the fantasy world of 21^st century mega-bankers.

I will never live for the sake of another man.

Ayan Rand Atlas Shrugged

It brings to mind an observation made by a very angry young man. He wrote, “There have been gambling manias before... (but) the ruling principle of the...the present mania, is... to speculate in speculation...” The angry man was Karl Marx, and he was writing about the swindle of the moment in September of 1856, the collapse of the Royal British Bank. It was a fabulous enterprise which seemed solid as granite at one moment and in the next a cruel fraud and a fantasy. And the most interesting thing about the case, besides the moral lessons the father of Communism saw in it, is that the bankers who perpetrated it actually went to jail, briefly, without bringing down capitalism.

Until and unless you discover that money is the root of all good, you ask for your own destruction.

Ayn Rand Atlas Shrugged

The Royal British Bank, created in 1849, was innovative. Previously, banking had been a rich man's game. Those with money had banded together to lend to those who could afford to borrow it. But the fortunes created by the industrial revolution trickled were not exclusively blue bloods, and both blue blood and non-blue blooded advanced thinkers in Scotland invented the publicly owned bank, in which small investors with some extra cash could combine their money, and once they had sold L50,000 in stock, could open their doors and begin accepting accounts and lending money to make a profit. In this case the idea belonged to Londoner John Menzies, who suggested the idea to his lawyer, Edward Mullins. They printed up a prospectus, and went looking for investors. But as England was in the middle of a recession (its fourth “Panic” since 1817) they found little money around, until they approached John McGregor, a Liberal Party politician representing Glasgow, Scotland. For the price of ten shares – at L10 per share –McGregor achieved a seat on the board of the bank. He immediately suggested the board hire an old friend of his who had knowledge of the “Scottish style” of banking, fellow MP Hugh Innes Cameron.

If any civilization is to survive, it is the morality of altruism that men have to reject.

Ayn Rand Atlas Shrugged

Cameron was offered the position of Managing Director of the Royal British Bank. And with McGregor's help, Mr. Cameron obtained a seven year contract which would impress any modern equity or hedge fund manager. The first year Cameron would be paid L1250 (equivalent to $2 million today) , rising to L2,000 a year ($4.5 million today), with an annual housing allowance of L200 (about a hundred thousand dollars today). Within a few months he had squeezed out Mr. Menzies, buying out the bank's founder with L400 of investors' money. Now there was nobody looking over his shoulder.

If you ask me to name the proudest distinction of Americans...they were the people who created the phrase "to make money”.

Ayan Rand Atlas Shrugged

From that moment, the bank never stood a chance of surviving. Instead of the L50,000 the law required and appeared on it's books, at its opening the Royal British Bank actually had no more than L18,000 in its vault. Over the next six years, while the 6,000 depositors supplied the salaries, advances and loans never repaid to the officers and directors of the bank, each of those men became involved in enumerable kickbacks, scams and frauds which siphoned off even more customer's funds. It was later figured the accounts were looted to the sum of L130,000, (equivalent today to $247 million today). The whole thing collapsed in the summer of 1856, producing, yet another nation wide “Panic”.

The question isn't who is going to let me; it's who is going to stop me.

Ayn Rand Atlas Shrugged

John McGregor had left the bank two years earlier, but was still forced to escape his creditors by sailing to Boulogne, France. He died deeply in debt in April of 1857. In February of 1859 the seven surviving board members were finally tried on seven counts of fraud. The jury convicted them of six. At sentencing the judge, Lord Cameron, could have been speaking directly to Jamie Dimon, the present day CEO of J.P. Morgan whose firm recently lost between $2 billion and $7 billion in a yet another derivative gamble. “It would be a disgrace to the laws of any country” said the judge 150 years ago, “if this were not a crime to be punished. It is not a mere breach of contract with the shareholders and the customers of the bank., but it is a criminal conspiracy to do what must inevitably lead to a great public mischief, in the ruin of families and the reduction of widows and orphans from affluence to destitution; I regret to say that in mitigation of your offense it was said to be common practice. Unfortunately a laxity has been introduced into certain commercial dealings...and practices have been adopted without bringing in a consciousness of shame...”

When I die, I hope to go to Heaven, whatever the Hell that is. And I want to be able to afford the price of admission

Ayn Rand

Because it was his first conviction, Hugh Innes Cameron could only be sentenced to a year in jail. All the other board members received lesser sentences, and one was only fined a single shilling. The scandal sold a few newspapers, and produced a marvelous pamphlet, “The Curious and Remarkable History of the Royal British Bank showing how We Got it Up and How it went down.” But judging by recent history, no one learned a thing from the affair, or any of the other enumerable “Panics” which have stricken capitalist economies once or twice every decade since. I think we learn nothing because greed makes you stupid, and the mega-bankers and their political apologists are purveyors and advocates of greed and thus they are selling and buying stupidity . And we have known how that philosophy plays out since bible days. To not acknowledge this reality and yet not deal with it is to acknowledge you are a zombie, addicted to greed, and without hope of ever learning a better future.

You can avoid reality, but you cannot avoid the consequences of avoiding reality.

Ayn Rand

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History of Banking in Iowa (Google Affiliate Ad)

VIRGINS

I suggest, if you want a touch the reality of the American Civil War, you pick up a nine pound, 56 inch long, walnut stock .58 caliber model 1855 Springfield muzzle loading rifled musket, and think about what this weapon tells you about the world which built it. They made 47,000 such weapons in Massachusetts, and another 12,000 at Harper's Ferry, Virginia, before the war started. Over the five years after Fort Sumter in 1861, they built about a million more in various versions. But to the volunteers who were handed one of those older, no longer state-of-the-art weapons (costing $20 each at the time, about $500 in today's money), they were revolutionary. This was likely the first mass produced piece of high tech these people came into intimate contact with. And once they did, they were no longer virgins.

Following the manual written by Brigadier General Silas Casey, (West Point class of 1828), you began with your Springfield musket standing on its base. You removed a paper cartridge from the box on your hip. You bite or tear off the end of the cartridge, exposing 65 coarse grains of black powder, which you pour down the barrel. With your thumb you press the remains of the cartridge (with the bullet called a “minie ball” inside), into the top of the barrel. Using the rod stored beneath your musket's barrel, you ram the ball, cartridge and the powder down the barrel until it is firmly at the bottom. Replacing the ramrod, you lift the weapon to chest high. You half-cock the hammer, take a percussion cap from your cartridge box and place it atop the nipple covering the opening in the breach. Then you lift the weapon to your shoulder, pull the hammer back to full cock, aim toward the enemy and upon command, you pull the trigger, releasing the hammer.

The hammer falls, setting off the black powder in the percussion cap. The resulting explosion forces hot gases through the breach, which sets off the black powder in the barrel. This flash of heat causes the the soft lead on the bottom of the' minie' ball to expand, trapping the gases behind it. Those gases then drive the bullet out of the barrel at about a thousand feet per second. With luck you might hit a target 100 yards away. With training, a man could get off two, and maybe three, rounds every minute. But most of the soldiers, particularly in the early stage in the war, spent very little time learning to fire their weapons. Burning black powder produced enormous dense clouds of smoke, and after a few minutes you couldn't see what you are aiming at. Firing ranges were thus considered largely a waste of time. So the men spent most of their time learning to march.

Battlefield tactics were over half a century old by 1861, developed by Napoleon Bonaparte in the 1790's, when muskets were still smooth bore, and so inaccurate that to effectively injure an opponent they had to be used en mass, hundreds or thousands of muskets firing in the same direction at the same moment. Everything that occurred on the battlefield was done to create that moment, when the maximum number of men would discharge their weapons at the enemy, together. General Casey listed 84 separate and distinct steps required to move a company of 84 men from a marching column four men wide, to their firing formation, in a rank thirty-two inches between each man, three ranks deep. And that was on the flat and open parade ground. The men and the officers had to to learn to do this, across unfamiliar and broken terrain, without thinking, while people were trying to kill them. The endless drilling required to achieve proficiency at this was boring, physically exhausting, and boring. And there was no way to prepare the men for the terror of replicating it while being shot at, under the noise and horrors of combat, because nobody had ever experienced a battle with these new rifled weapons.

What was it like? Well, in 1863, after everybody had two years hard won experience with the demands, drudgery and the horrors of combat, the two sides met for three days at Gettysburg, Pennsylvania. After that battle 35,000 abandoned but usable muskets were collected on the battlefield, of which 11,000 were unloaded and 24,000 were loaded. Of the 24,000 loaded muskets, 6,000 had one charge, 12,000 had two charges still loaded, and the remaining 6,000 held anything from three to ten charges - One musket had twenty-two charges stuffed down its barrel;  powder, cartridge and bullet, one atop the other. The noise of all those muskets firing next to unprotected ears, producing all that smoke, meant that a soldier could no longer hear his own rifle going off. And if you missed the first loaded round not being fired, likely you never got a second chance. Firing a musket with anything more than one charge in the barrel often resulted in the weapon exploding. There is no record of how many of those unusable muskets were found at Gettysburg, but it raises the question of how many battlefield casualties were unconsciously self inflicted.

Officers had a few things to learn too, even the 5'2” tall Ulysses Simpson Grant who had graduated West Point in 1843. Although he had been forced to resign in 1854, the war made him a much sought after commodity, and in June of 1861 the governor of Illinois made him a colonel and he was given command of the 21^st Illinois volunteer regiment. These 1,000 men were described by their new commander as “men...who could be led astray.” And they had been. Grant said he “found it very hard work for a few days to bring all the men into anything like subordination; but the great majority favored discipline, and by the application of a little regular army punishment all were reduced to as good discipline as one could ask.”

On July 3^rd the 21^st Illinois was ordered to Quincy, Illinois, but en route the destination was changed. The 19^th Illinois regiment had been building a bridge over the Salt River west of Palmyra, Missouri - about 25 miles north west of Hannibal, on the Mississippi River. Troops of the Missouri State Guard, sympathetic to the south, had cut off the union troops. Grant was now ordered to rescue the fellow prairie state-ers. However, by the time his men had reached the Mississippi, the threatened unit had retreated back to Hannibal, with not a shot being fired by either force. Grant wrote later, “I am inclined to think both sides got frightened and ran away.” Still, Grant got his men across the big river, and marched back to scene. The 21^st Illinois spent two weeks finishing the bridge, and was then ordered to advance on a new Missouri State Guard regiment gathering to the south, at the forks of the Salt River.

The Missouri troops were commanded by a politician, Colonel (later Brigadier General) Thomas Alexander Hariss. His position was overlooked by the small community of Florida, with about 100 residents. And as Grant approached he started to get nervous. “In the twenty-five miles we had to march we did not see a person, old or young, male or female, except two horsemen who were on a road that crossed ours. As soon as they saw us they decamped as fast as their horses could carry them.” Grant now had to assume the rebels were alerted of his approach, and would be waiting for his men. The young commander camped his men that night beside the road, so they would be fully rested for the battle he knew was coming in the morning.

In the morning, Grant lead his little force up the hill. “As we approached the brow of the hill...my heart kept getting higher and higher until it felt to me as though it was in my throat. I would have given anything then to have been back in Illinois, but I had not the moral courage to halt and consider what to do; I kept right on. When we reached a point from which the valley below was in full view I halted. The place where Harris had been encamped a few days before was still there...but the troops were gone. My heart resumed its place.”

In fact, Harris and his still unprepared recruits had retreated on hearing that Grant was gathering horses and wagons for his march south. With such a head start, his Missouri State Guards were now sixty miles away, heading to join rebel forces in the southwest corner of the state, near the Arkansas border. Learning this, Grant noted it taught him something.  “It occurred to me at once that Harris had been as much afraid of me as I had been of him. This was a view of the question I had never taken before; but it was one I never forgot afterwards. From that event to the close of the war...I never forgot that he had as much reason to fear my forces as I had his”. On the march back to the bridge at Palmyra, Grant noted, “The citizens living on the line of our march....were at their front doors ready to greet us now.”

And that taught him even something more useful, something still true today - winners are always popular. Grant was no longer a virgin.

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COXEY'S ARMY Pt. Two FIRST STEPS

I am glad I was not there on that Easter Sunday, March 26th, 1894, when what the press would call “Coxey’s Army” set out from Massillon, Ohio. It would have been depressing. It was raining and it was cold, and only 86 men showed up to begin a march which was intended to change the course of American democracy. On the plus side, they were joined by 42 reporters from various newspapers, just about one reporter for every two marchers. The press corps was further augmented by four Western Union telegraphers and two line men. At any time or place they could tap into a telegraph line, and begin sending urgent dispatches about the progress of the army. William Stead, from the magazine Review of Reviews, noted that “Never in the annals of insurrection has so small a company of soldiers been accompanied by such a phalanx of recording angels.” It would quickly develop that he was one of the more sympathetic angles.

"The road to the City of Emeralds is paved with yellow brick," said the Witch, "so you cannot miss it. When you get to Oz do not be afraid of him, but tell your story and ask him to help you. "
1900  L. Frank Baum  "The Wonderful Wizard of Oz"

History records that they were singing new words (written by Carl Browne) and set to the tune sung as Sherman’s Army burned its way across Georgia. “Hurrah, Hurrah, we’ll sing the jubilee, Hurrah, Hurrah, for the flag that makes you free, So we sing the chorus now, Wherever we may be, While we go marching to Congress.” But if they did sing,it was not for long. At least they waited until after noon for it to warm up before they even began their trek.

First there came a man on foot carrying an American flag, who the press dutifully identified as a “negro”, thus mocking Coxey’s determination to treat all races in his army with equal respect. He was followed by Carl Browne, mounted on a white stallion, and bedecked in his buckskin jacket and a huge western hat. Behind him came the financial supporter and ideological inspiration for the march, Jacob Coxey, ridding in a Pheaton buggy, drawn by a matched pair of magnificent white horses. And behind him came the “army”, all 86 of them on foot or bicycle. But who were “them” really?

A Professor Hourwitch from the University of Chicago actually tried to find out. Later, when the marchers had grown in number and in fame, he polled 290 of them. Their average age was 31 years old and on average they had been unemployed for five months. Almost two thirds were skilled mechanics, but less than half of those were union members. There were 88 Democrats in the army, 39 Republicans and 10 who declared themselves to be members of the Populist party. One in four had needed charity to survive the winter just passed. The study also noted that five or six were of “questionable character”. 

"After a few hours the road began to be rough, and the walking grew so difficult...The farms were not nearly so well cared for here as they were farther back. There were fewer houses and fewer fruit trees, and the farther they went the more dismal and lonesome the country became." 
1900  L. Frank Baum  "The Wonderful Wizard of Oz"

The New York Times noted in their dispatch that by the end of the first day’s march of just eight miles, ending outside of Canton, Ohio, twenty-five men had “dropped out”. Another paper noted that of the “seventy-five stragglers” who had begun the march, several had spent the previous night in the local jail, and were released just before the march had begun. And calling the marchers “stragglers” was one of the kinder characterizations. Routinely they were identified as “bums”, or “tramps”. 

But four days before the march began the magazine “The Coming Nation” noted, “There is to be a presidential election this year; in view of which it may be well to remark-- That workingmen will not be taxed less under a Republican president than they have been under a Democrat. That there will be no more opportunities open to labor in the next four years than there have been in the past four…That there will be no more flour in the bin with a McKinley in the White House than there has been with a Cleveland….We admit that this is rather a gloomy forecast; but experience warrants it and events will justify it.” They certainly did.

What Coxey wanted from the Federal government was not charity. He wanted half a billion dollars to be spent on building and improving roads. We know today, as the beneficiaries of the interstate highway system, that the investment in infrastructure Coxey was promoting would improve the nation, would create new wealth by creating new opportunities for business and in the short run provide honest work for the unemployed. But the tired, old, plaintive ideological repetitions were heard just as loudly in 1894 as they are today - that surface roads built by the government were somehow less “moral” than the railroads, privately owned but each built and run as government endorsed monopolies, and usually funded by government backed bonds; that somehow the sweat expended building a government owned road was less moral than that produced building a privately owned railroad. One was moral, but the other was not, in the eyes of the wealthy, who, of course, owned and had invested in the current technology - the railroads.

Put in such stark black and white imperatives the argument may seem absurd to us today, and, in fact there are indications it seemed just as absurd to the citizens of 1894. But at issue was not what the average American thought, but what the bought and paid for politicians in Washington and the various state capitals were willing to publicly consider. For, much as they are today, the press and the politicians, to their mutual advantage, avoided any honest and open discussion of middle ground, preferring instead to debate positions that most people considered absurdest extremism. 

But the cause of the common man, championed by Coxey and Browne, was not helped by the men Browne had brought in to be his Marshals, the second tier leaders of the group. David McCullaum was an economic author who, under the no de plume of “One of the Dogs”, a supposed Cherokee Indian, had written a pamphlet entitled “Dogs and Fleas”. Mr. One also claimed to subsist only on oatmeal. Then there was Cyclone Kirtland, an astrologer who predicted the army would be “invisible in war, invincible in peace.” Beside him loomed Christopher Columbus Jones, who always wore a silk top hat, which merely accented his five foot tall frame. There was also the trumpeter named “Windy” Oliver. Together they all more closely resembled a circus side show than a political movement.

But the most disturbing of all them all was a man known only as “The Great Unknown”. It was not a name chosen at random, but self promoted. “The Great” was always followed about by a woman who always wore a veil and never spoke. But the catch was that Carl Browne knew who the Great Unknown was. He was an ex-circus barker and a current patent medicine “faker” named A.B.P. Bazarro. 

Before the march, The Great (and his wife) had concocted their “blood purifyer” in a makeshift lab and mass production line on the near West side of Chicago. In this earlier life, like a traveling infomercial, Bazarro had  made his living providing a show, featuring testimonials and a protracted sales pitch. And once the crowd was captured, and while they were resting their buying muscles, Browne would make his appearance and pitch his ideas of going off the gold and silver standards, and union organizing. Bazarro knew the monetary possibilities of mixing politics with a sales pitch. He was also the self elected “Great Wizardo” of the “American Patriots”, a self created political organization. But politics seems to have been, to “The Great Unknown”, much as it is to FOX News, just another marketing ploy.

Oh; and to make it easier for the newsmen, The Great Unknown let it be known that he would also answer to the name of “Smith”. So he became known as the Great Unknown Smith. The newspaper men might be forgiven then, for treating these desperate men as if they were members of a sideshow confidence game. Some of them had been, and recently.

Except. of course, that required that at the same time they belittle and dismiss the millions of their desperate fellow citizens whose plight the march was trying to publicize.The crime was that the news media of 1894, like the media of today, were perfectly willing to ignore the drama, and instead portray the march as a joke.

"Am I really wonderful?" asked the Scarecrow. 
"You are unusual," replied Glinda"
1900  L. Frank Baum "The Wonderful Wizard of Oz"

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