The Daily Alpha: Alternative Thinking on Andrew Jackson’s Face, the Panic of 1893, Elizabeth Warren’

The Daily Alpha: Alternative Thinking on Andrew Jackson’s Face, the Panic of 1893, Elizabeth Warren’

Garrett Baldwin

April 21, 2016

“The decision to put Harriet Tubman [and replace Andrew Jackson] on the new $20 was driven by thousands of responses we received from Americans young and old.”

First off, that was Andrew Jackson on the $20 bill?

I could have sworn it was John Kerry....

So, should Harriett Tubman replace Andrew Jackson on paper money?

This debate is swirling across television… Twitter… Facebook… and national print.

We simply can’t wait for the next news cycle.

When historians look back on the debate of whether Harriett Tubman should replace Andrew Jackson on paper money, they will list this somewhere on the list of things that mattered to our national downfall next to “Why were Americans drinking so much coconut water in 2016?”

This is perhaps the most boring debate in America, but it’s being dragged down by people with perhaps too little things to do or too little understanding of the bigger things that actually need to be addressed in our world.

It doesn’t deserve this much discussion.

But it matters to one group because… Obama… and the other group because… well… Obama. 

Do people realize that Harriett Tubman is replacing Andrew Jackson on the $20 in 14 years?

By then, the national debt will have swallowed up the economy, and the $20 will be worth roughly $0.20 in today’s purchasing power if we keep doubling the national debt every eight years. Today, there are too many Americans worrying about where their next $20 bill is coming from to be yelling about whose face is on it.

It’s a symbolic gesture… fine. 

Let’s get to the point of this rant…

People should be spending much less time today wondering why Harriet Tubman is replacing Andrew Jackson… and more time wondering why Jackson had replaced the original $20 president – Grover Cleveland – in the first place.

After all – Andrew Jackson hated the idea of a central bank, and if he were alive today he’d be likely angry that he was on the $20 bill, let alone that the Federal Reserve – which controls our monetary and fiscal policies – even exists.

Grover Cleveland got short-changed, only appearing on the $20 bill for about a decade.

There was a lot to like about Cleveland… and oft-unknown man who won the popular vote three times. He was a pro-business Democrat who supported free trade, and hated inflation and massive subsidies for farmers and businesses. He made constant arguments for fiscal conservatism and classical liberalism. There is a lot of libertarianism in his lines of thinking.

In fact, he pretty much embodies everything that we need out of Democratic candidate this year, but won’t be found unless we revive his ghost. What railroaded the man was the Panic of 1893 which was rooted in – you guessed it – a commodity crash – in this case wheat.

In the strange ensuing (and reverse) bailout – the U.S. government had to rely on borrowing $65 million in gold from JPMorgan and the Rothschilds to effectively save the economy.

If there is ever a strong argument for the downside to a gold standard, it’s the Panic of 1893.

As far as financial crises go, this created one of the greatest political, economic, and social shifts in the history of the country. If people want to know how banks got so powerful in the United States, you can see firsthand what happens when a banker meets directly with the President and sets his own lending terms with a nation. If you think people are angry at the banks today, you should read what populists like William Jennings Bryant said about JP Morgan back then.

Oh, and… like always… Congress had no idea what was going on…

Bad, reactive policy through legislation would follow.

The Gold Standard Act would pass in 1900, which included a provision that Morgan and the bankers of the era wanted to explore the creation of a central bank. 

That provision set the path for the Federal Reserve in 1913, which today controls monetary policy and fiscal policy. Its name is on the front of every single piece of paper currency.


So the guy whose economy blew up in 1893 – Grover Cleveland – would require money from JPMorgan, who would press for a central bank seven years later. Overtime, a campaign was set to alter the nation’s opinions about a central bank – particularly by German-trained academics.

One year after the Federal Reserve began (in 1913), they placed Cleveland on the $20 bill.

Oddly, they would replace him 10 years later with Andrew Jackson, a man who absolutely hated the idea of a central bank and called it a “public concern for liberty.”

Fun fact: The first person ever on a $20 note of Pre-Federal Reserve money?


History… learn it… know it… love it…

Read all about the Panic of 1893 time period, right here.

“Then, with the instruction of a little known hedge fund, it began to press hard into renewable power generation." 

SunEdison is heading to bankruptcy with $16.7 billion in debt.

What will this mean for David Tepper?

“It is the latest example of an SEC action that fails to appropriately punish guilty parties, deter future wrongdoing, and protect investors.”

Elizabeth Warren really doesn’t like hedge funds. As we explain in the next issue of Modern Trader, she is co-sponsoring a toothless law that impacts disclosures of hedge funds and regularly blames them for all of America’s economic inequality problems.

But does she have a point this time?

This might actually be a debate worth having...

Warren is fuming over the fact that the SEC is allowing Steven A. Cohen back into the hedge-fund business. Although his hedge fund settled with the agency, and multiple people at his former hedge fund went away for insider trading, Cohen was never charged with any wrong doing. 

But according to new documents filed last month with the SEC, Cohen is now the head of hedge fund Stamford Harbor Capital, and the firm can begin seeking outside funds.

All Warren can do right now is just make a lot of noise and shake a finger at him.  

What’s else is she possibly going to do?

Ask the SEC to take away his giant balloon dog?

Exit question: Is Ms. Warren upset that former Obama adviser Steven Rattner also gets to go back to Wall Street as well? 

That’s all for today. Off to the BarCharts Fintech Conference.


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