Tag Archives: Treasury Department

Don’t be so naive: the real reason the Treasury plans to remove Hamilton from the $10 bill.

Up until two days ago, there was a growing movement to replace Andrew Jackson on the $20 bill with a woman. A bill was proposed in Congress to do this. A website was established to promote this idea. A poll was taken to choose a worthy woman to replace Jackson, which Harriet Tubman narrowly won, beating out Eleanor Roosevelt, Rosa Parks, and Wilma Mankiller.

But then the Treasury suddenly and somewhat unexpectedly announced that it would replace Hamilton on the $10 bill with a woman. Why the sudden change?

It all comes down to politics and public opinion. If the Treasury had announced it would replace Andrew Jackson with a woman, there would have been protests against it. Those who like Andrew Jackson would have argued that no woman was as important to American history as Jackson, who was a popular president and founded the Democratic Party. Those who are less favorable towards Jackson would have also opposed the move by asking why he should be replaced by a woman rather than another worthy male, such as John Adams, James Madison, or the very underrated Albert Gallatin. The public uproar against replacing Jackson with an undetermined woman may have forced the Treasury to cancel its plans.

The people at Treasury or perhaps the White House recognized this challenge. There are a lot of smart people in the White House and at Treasury and one of them realized that they could accomplish their goal by using the door-in-the-face (DITF) technique. This psychological technique, which is often used in marketing, involves “making a large request that the respondent will most likely turn down” and then making “a second, more reasonable request.”

So the Treasury Department suddenly and somewhat unexpectedly announced that it would replace Hamilton on the $10 bill with a woman. Social media went berserk. How could the Treasury Department replace one of the leading Founding Fathers, the man who made the Treasury Department, the man who did more than anyone else to establish the U.S. on a solid financial footing? Not only are they making these arguments, they are also asking why Hamilton is being replaced instead of Jackson. Many have pointed out how Hamilton established the Treasury whereas Jackson shut down the Second Bank of the United States and opposed paper money (the country suffered a severe depression as a result). Many have pointed out how Hamilton opposed slavery whereas Jackson owned many slaves. Many have pointed out how Hamilton refused to shoot his opponent (Aaron Burr) in a duel whereas Jackson had an apparent blood lust when it came to duels, fighting in upwards of 100 duels according to some and killing at least one opponent. Many also point out Jackson’s genocidal persecution of the Native Americans.

While these arguments are convincing and it is clear that Hamilton is a superior candidate to stay on the U.S. currency, we have fallen into the Treasury Department’s trap. By defending Hamilton as worthy to remain on the $10, we have given the Treasury all the ammunition it needs to remove Jackson. Instead of debating which individuals most deserve to be on our currency, we are instead arguing about who to remove from our money and which woman to put on it. We should instead be debating which individual, regardless of race, religion, or gender, deserves to be on our currency.

But I’m afraid we’ve already lost this argument. If the Treasury succeeds in replacing Hamilton on the $10, it won’t be long before Jackson is replaced on the $20 and Grant on the $50. (Washington, Lincoln, and Franklin are too popular and likable to replaced, at least for now.) If we succeed in convincing the Treasury that Hamilton should stay, they’ll instead replace Jackson with little public uproar and it won’t be long before Grant is also replaced. I would not be surprised if we see the faces on certain bills changing every 10 years or so to satisfy all the different minority groups. The decision as to which people will be featured on our money will become part of the political debate and the different political parties will attempt to buy votes of various interest groups with the promise to put a member of their group on our currency.

We must challenge the Treasury Department’s decision to remove Hamilton from our $10 bill with all the power and influence in our possession. But we must be sure to do it correctly. We must argue that our money should feature those Americans who contributed the most to our nation regardless of race, religion, or gender. If we fail, not only will Hamilton be removed from the $10 bill, Jackson will be removed from the $20, Grant will be taken off the $50, less deserving individuals will appear on our currency, and I predict that our currency will ultimately feature a rotation of individuals chosen for political reasons and our money will lose the respect that it earned thanks largely to the work of one and only Alexander Hamilton.

(As to the question of which woman most deserves to be on our money, my vote goes to Martha Washington. If George Washington was the father of our country, Martha was the mother. The soldiers in the army of the American Revolution certainly saw her in that light when she stayed with them at headquarters each winter and led the women in producing homespun clothing and blankets for the troops. Obviously, women now play a greater role in politics and public affairs than they did in the eighteenth or even nineteenth centuries, but that makes Martha Washington all the more remarkable. But again, I don’t see the achievements of Martha Washington, Abigail Adams, Harriet Tubman, Eleanor Roosevelt, Rosa Parks, or Wilma Mankiller as coming even close to what was accomplished by Hamilton, Jackson, Grant, Adams, Madison, or Gallatin.)

Worldwide backlash against quantitative easing.

Apparently, I’m not the only one concerned about the Fed’s quantitative easing.

Yesterday, I wrote a piece: Quantitative easing. What is it good for? Absolutely nothing!

Today, we get similar sentiments from around the world:

Could this move turn out to be a modern-day Smoot-Hawley? For those of you who are too young to remember, the Smoot–Hawley Tariff Act was passed in 1930, raising tariffs, and being a major contributor to the Great Depression.

Quantitative easing. What is it good for? Absolutely nothing!

The Federal Reserve “unveiled plans to purchase $600 billion of Treasurys by the end of June 2011 to revive the economy.

Maybe one of my readers can explain to me how the Federal Reserve buying Treasury bonds will “revive the economy.” I just don’t get it. The Federal Reserve will be doing nothing more than printing Dollar bills and exchanging those Treasuries. Nothing of value will be created. No new goods will appear on the market. No jobs will be created. Simply put, Treasury bonds owned by individuals or corporations will be replaced by Dollar bills.

Owners of Treasury bonds own them because they want to save/invest their money. Buying the bonds from these people won’t convince them that they need to spend what they had been saving. They will simply invest their money elsewhere: in stocks, corporate bonds, overseas, gold, or in cash. No real wealth will be created through this so-called quantitative easing and it will not encourage any wealth-creating activities. It is simply moving money from one pocket (Federal Reserve cash) to another (Treasuries bonds) from the government’s perspective and the converse from Treasuries to cash from the people’s perspective.

The argument is that buying Treasuries will help keep interest rates low. But who benefits from this? Investors/savers will earn less on their deposits/bonds, but creditors (corporations, mortgages) will pay less interest. But those two will largely offset each other. No net benefit.

In the end, there is one entity that has so much debt that it will be the largest beneficiary: the United States government. Instead of paying interest on bonds, the government is choosing to print money instead. On $600 billion of intermediate-term debt yielding between 0.33 (2-year yield) and 2.57 (10-year yield) percent, the government would “save” about $600 million a month. That’s it? With a deficit running at about $125 billion a month, that’s just 0.5% if the deficit. Again, what for?

The Federal Reserve is simply manipulating the economy for no real purpose. Oh yes, it has the purpose of enabling the government to spend with reckless abandon and run large deficits because it now has a ready market for its debt. But to do so, it must print all those Dollars, and that is driving down the value of the Dollar which is very evident by the huge rally in gold since the “Great Recession” began.

The government is destroying OUR long-term prosperity for ITS short-term gain. A good deal for the Federal Reserve and the Treasury Department, but not for you and me.