Contributors

Friday, November 23, 2018

Another Black Friday

Today is Black Friday, the biggest shopping day during the year, the point at which retailers "enter the black."

Courtesy of the Thanksgiving episode of Jeopardy, I learned that there were many other Black Fridays. The one that is of greatest interest is the 1869 Black Friday:
The Black Friday, September 24, 1869, gold panic was caused by the efforts of two speculators, Jay Gould and his partner James Fisk, also called the Gold Ring, to corner the gold market on the New York Gold Exchange. The scandal took place during the Presidency of Ulysses S. Grant, whose policy was to sell Treasury gold at weekly intervals to pay off the national debt, stabilize the dollar, and boost the economy. The country had gone through tremendous upheaval during the Civil War and was not yet fully restored. This period, known as the Gilded Age, was a time of great industrial growth which invited much investment and speculation.

Abel Corbin, a small time speculator, married Virginia Grant, the younger sister of President Grant. After the marriage, Gould and Fisk approached Corbin, taking advantage of his brother-in-law relationship with the president, and persuaded Corbin to introduce them to Grant. Gould and Fisk hoped that befriending the President would get them privy information about up and coming government gold sales—information with which they manipulated the market. It worked, resulting in a scandal that undermined the credibility of Grant's presidency and the national economy. Gould and Fisk used their personal appearances with Grant to gain clout on Wall Street in addition to using their insider information.
The parallels between this and the Trump administration are astonishing. 

It's not just the one guy married to the president's daughter. It's the president himself, and everyone of his cronies, from his son-in-law, who uses the court system to screw over people who rent apartments from his company, to the secretary of commerce, who is linked to Russian-owned banks in Cyprus, to the secretary of education, who is linked to education lenders and the sister of Erik Prince, who ran the mercenary outfit Blackwater and also solicited help from the Saudis and the UAE to manipulate social media to help the Trump campaign. Literally dozens of other Trump appointees have already been fired or resigned for various misdeeds, conflicts of interest and general incompetence.

Trump hasn't set off a gold panic yet, but the stock market has been experiencing precipitous drops regularly. Our European, Asian and North American allies have been alienated. Tariffs are really starting to hurt American farmers. Trump is defending murderous Arab princes, Russian dictators, and is "in love" with a dumpy North Korean nuclear megalomaniac who has suckered Trump into a phony denuclearization deal.

It's only a matter of time before Trump or someone trying to cash in on their relationship with him is caught with their hand in the till and causes another economic panic.

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