 I think we'll get started. We're here at the end of the week. Friday, it means this university. It seems everyone survived through successive days of lectures, so here we are at the end. And the subject of today's talk is cronyism in America, which could pretty much be about anything, right? I could talk about any time period in American history, any policy, et cetera. And yeah, we could find some cronyism in it. But what I thought I would talk about is a case study from my book. So last year, when I spoke about cronyism, I gave an overall outline of my book, Cronyism, Liberty versus Power in Early America, 1607 to 1849. This is the first of many books that I've been, I hope to write on cronyism. I was originally supposed to write one book on cronyism but there's just so much information had to turn into multiple books, right? So this reminds me of on Twitter, someone mentioned that, hopefully, Patrick Newman, when you get to the modern era, you'll be able to talk about Nancy Pelosi in cronyism. I said, well, Nancy Pelosi in cronyism, that in itself would be a multi-volume series. So I don't know exactly how I'm going to tackle that subject. It could be a treatise in its own right. So what I want to do is, like I said, talk about a case study and why do I want to talk about the past when there's so much to discuss about the present? Well, my philosophy on this is that, well, in order to understand the present, you have to understand the past. So in order to write a history of modern cronyism, you have to see all the threads tie together, all the various narrative strands tie together. But more fundamentally, I think understanding the past allows us to better understand the present, in particular, to see various patterns of cronyism, to see how exactly, and I'll define cronyism in a little, but how exactly various special interest policies really work throughout history. So we can better understand them. And also to look at patterns of reform. When is it possible to actually reform crony policies, reform the government? Is there something we can learn from history? So the first thing we have to tackle is what exactly do I mean by cronyism? Hopefully many of you have heard of cronyism, crony capitalism, the word crony, cronies, and so on. This is a very, there are many definitions. And I've stuck with what I think is the best definition, which is policies that benefit special interests at the public's expense. So we think of a tariff that protects manufacturers at the expense of consumers and other firms, and so on. So there was a critical review of my book that came out. And one of their first criticisms was that, well, this definition of cronyism apparently is unique, because normally cronyism just refers to hiring your supporters to various government jobs. So with the definition of cronyism like this, well, then the reviewer said, well, everything's crony. And I said, well, yeah, everything is crony. This isn't a problem with the definition. This is a problem of the world we live in. Everything's special interest policies. So I think that it's a great definition. The fact that, well, it means all throughout American history there is cronyism. That's not a weakness of my definition. I think that's a strength. But it's a very important subject to study, because very rarely are policies advocated to benefit special interests. You never hear of a politician saying, well, I want to support higher tariffs because I want to protect companies that I've invested in. You don't really hear that. That's not a good election strategy. You usually hear something much more grandiose, well, to protect the public. Everything's always justified in terms of the public interest. And it's the task of the historian, the past and the present, to sort of sift through the lies and the propaganda and actually see all the real motivations for various policies. So I didn't answer my question. Your question is to what the case study is in order to build up to that somewhat momentously. We live in a world of constant cronyism, the modern era. Nothing seems to change, no matter the party or the people in power. It's just one group of elites versus another group of elites. We have to choose between two power hungry groups. As Murray Rothbard would often say before presidential elections, one of these bozos is going to be lording over us for the next four years. So that's kind of how we usually feel in the modern era. And you might ask, was it always like this? Is there any example of cronyism going away? Can we learn from it? Particularly, can we learn how to reform the government or strategies for reform? This builds into my previous comment about we want to understand the past so we can better understand the present. And I say, yes, there's a great story of cronyism that I enjoy talking about. And I think it's one of the most important case studies from my book and we can learn from it. And it's also just a very interesting topic. It's simply because the Federal Reserve and inflation is so big on all of our minds today. And this is the story of Andrew Jackson in the Jacksonians fight against the second bank of the United States. I think the Jacksonians were the most successful libertarian political party. They weren't perfect by any means, but they were better than the Jeffersonians in terms of actually getting stuff done, better than the Cleveland Democrats, better than the old right of the 1930s and 40s. They actually managed to accomplish a surprising amount in about 15 years or so. And one of their most important accomplishments was tackling the central bank. They actually got rid of a central bank. This wasn't where we can institute a new monetary rule or we're gonna appoint someone better in charge. No, we're actually just gonna get rid of it. And what I wanna emphasize is something that we can learn from the Jacksonians and why they were so successful is that they attacked cronyism. They spearheaded the reform movement through the executive branch. The Jacksonians were very prominent in transforming the executive from a position that fought cronyism to now a position that attacked cronyism because it's very, very hard to reform government through the legislative branch. You just can't do it. Even if we got Ron Paul in charge, he became president in 2008, 2012, the vast majority of his reform would have to be through the executive branch, particularly through vetoes, foreign policy, taking troops out of other countries, rotation in office, and so on. So it's this reform through the executive that I think applies to the modern era at the federal level and also at the state level where various governors over the past couple of years have been able to stop government intervention and cronyism through their executive position, okay? So in order to talk about this great bank war of the 1830s, we have to at least talk about the origins of the bank, right? So we've technically had two central banks before the second bank of the United States. We had the Bank of North America and we had the first bank of the United States for a variety of reasons. Both of those went away. We don't need to get into that. We can just start our story by saying, at the War of 1812, which started in 1812, and if we remember Tom Di Lorenzo's great talk yesterday, it was a war of aggression. We were trying to conquer Canada as well as Florida. The ruling party in power, which had originally been the Jeffersonian Republicans, but they had been thoroughly corrupted by power. These are the National Republicans. They try to establish the old federalist program. So the old Hamiltonian big government program that many Americans fought against in the 1790s. One of the central features of this crony federalist program was the central bank. So to have a bank that's privileged by the federal government, to coordinate monetary expansion across the country, to strengthen bank cartels, to nationalize the monetary system in this bank was chartered in 1816. So this is the second bank of the United States and it has various special privileges. So various crony features. One, it's got a 20-year monopoly charter. So Congress gave it a 20-year monopoly charter saying we won't charter another bank during this time. And this bank had the ability to branch across state lines. It was the only bank that could do this, at least given the power to do this by the federal government, something that's very important. So this charter was basically a license. And licenses, though they're justified in terms of the public interest, well, we need to protect safety standards or quality of the product, et cetera. It's just crony. It's a way of restricting competition and boosting prices. So on top of this monopoly charter, the Treasury also deposited the vast majority of its money at the bank and its various branches. So this was an enormous subsidy. The government at the time collected money largely through tariffs, also land sales, et cetera. So these were various taxes and it would store most of its money at the bank. And this would be in the form of gold or various state bank notes and deposits. And then the second bank of the United States could take this gold or these notes and deposits and use them as the basis for its own credit expansion. This is a fairly big subsidy. It's the equivalent of if Congress chooses some restaurant in Washington, D.C., and it says, well, every Friday, all of Congress is gonna go to this one restaurant. And they're all gonna spend money at this pizzeria and they're gonna use the taxpayer dollars at this pizzeria. That would be a pretty big crony privilege. It'd be a nice subsidy. And I'm sure these restaurants do exist in Washington, D.C. One final special privilege is that the government owned one-fifth of this corporation. It had one-fifth of the stock ownership and this again provided it with a nice subsidy. So it was close government bank alliance. This was a corporation chartered by Congress and it had very big special privileges that the public soon started to despise for various reasons that we'll get into. All right, so after this bank is chartered, the 1820s is often known as the era of good feelings. That's not really an accurate description or a title for the period. A far more accurate title, which has been given by historian Robert Romini, is the era of corruption. Everyone was corrupt. All the ruling politicians in power, at the federal and state levels, they were routinely screwing the public, dipping their hands into the taxpayers' monies, granting out various special privileges. And unsurprisingly this occurred in the monetary sphere. So the bank opened up for business in 1817 after the War of 1812 is over and the bank unsurprisingly was very corrupt. The directors of the bank, particularly the directors of the Baltimore branch, illegally they loan money to themselves without collateral. So this is against the bank's rules. How they're able to do this is while they bribe the bank president. So all right, well that takes care of that. They're able to push for the bank to increase credit expansion and they're funneling this credit expansion to themselves. It's quite fascinating. The history of the Baltimore branch, they were really able to engineer this because they were able to choose the bank president. And how they chose the bank president was they managed to get around the bylaws of the bank saying that well, each shareholder could only exercise a certain amount of votes. And what they did is they just simply, they collected all of the shareholders they basically voted through proxies. So some of these individuals who loaned themselves money controlled about 30 times as many shares as they should have been able to. So it's thoroughly crony. They're doing this to benefit themselves. And of course when there's cronyism in the monetary sphere, there's inflationism. It's very inflationary, very expansionary. The central bank during this time period in the years after the War of 1812 up to about 1819, they expanded its deposits by 57% in a couple years. That's a lot, okay? That's almost like 2022 levels or 2021 levels. It's a lot for the time period. And the total money supply rose about 25%, okay? So over a short period, this huge burst in credit expansion, okay? So as we know from the theory we learned earlier in this week, this credit expansion caused an unsustainable boom in farm improvements, right? Land speculation, buildings, turnpike construction. So various types of roads, ships, slaves and steamboats. These were the higher order capital goods that were sensitive to interest rate changes. And this is where a new investment was channeled, okay? So we started to see this big boom. People are going into the West, the West at the time referred to the Midwest, around the Mississippi River, in Alabama and Mississippi, the Southwest, et cetera. So you saw this huge expansion develop after the War and it was supported by credit expansion, okay? So this is America's first business cycle. It happened about 200 years ago. Well, the problem is the good times can't last forever. In the late 1818, the central bank suffers a gold outflow, right? Why does it suffer a gold outflow? Well, we remember earlier in the week, the adverse clearing mechanism, right? The central bank's liabilities are still redeemable in gold. So as this bank is expanding credit, its gold reserves are starting to decrease, particularly by foreigners presenting the obligations. They're not confident in the American economy, right? The state banks were working with the second bank of the United States, so they agreed to cartelize with them. But again, there's always external pressure, as I mentioned, and it starts to experience a gold outflow. So what does the central bank, what does the second bank of the United States do? Well, it contracts credit. It severely curtailes its loans, right? This leads to a sharp decrease in the money supply and this precipitates our first major business cycle. There was a downturn in the late 1790s, but this is really our first business cycle, our first recession, the panic of 1819, which hits the economy in early 1819, right? So this big downturn, and something that's very important to note is people perceived a very serious depression in the years that followed. Why? Well, because prices collapsed 31%, right? From 1819 to about 1821, 1822, prices plummeted 31%, right? So this is a very big decline, and people say that well, if prices are falling, that must mean outputs falling, right? So if prices are falling 31%, that must mean outputs falling by 31%, right? In reality, this depression is actually fairly mild. You can look at some aggregate statistics. I talk about this more in my book, but it's just important to note. From about 1819 to 1824, nominal GDP per person, so spending declined 10% during this time period, well, real GDP per person increased 8%, okay? This is a nominal illusion. The fact that we're spending 10% less doesn't mean that outputs necessarily declining by 10%, right, because falling prices do not imply a depression, right? Prices can fall, but that can be a reflection of an increased supply of goods, right? Also a reflection of the economy correcting itself, because while there were many debates about what the country should do, right? Should it practice expansionary monetary policy, expansionary fiscal policy at the federal and state levels, et cetera, many of these debates are recounted in Murray Rothbard's book, The Panic of 1819, which I spoke about yesterday. Overall, the country practiced a policy of laissez-faire, right? So the best way to recover from a boom-bust cycle is the government gets out of the way, just allows the market to reallocate resources. But what's very important about this is the people who were mad, they were very furious at this because they thought that there was a severe depression and they blamed it on the bank, right? So a famous economist, William Gaug later said, the bank was saved, but the people were ruined, right? This is a famous quote, right? And this panic of 1819, why it's important, it inspired the Jacksonians in the 1820s. Post panic, there was a huge increase in hard money thought, right? So anti-bank credit expansion, pro-gold standard, this type of thought had weakened during the War of 1812. And something that's very fascinating from an Austrian perspective is that this hard money thought in America was heavily influenced by newly translated European economists, particularly French economists, proto-Austrians, as Murray Rothbard has documented in his history of economic thought, all right? So John Baptiste say one of these newly translated economists, hopefully we've all heard of say, right? And say's law, et cetera. He was very anti-bank credit expansion, or at least he was pro-free banking, pro-100% reserves depending on he had various reforms. He was against government subsidization of the monetary sector. His book becomes a mainstream college textbook, right? So just imagine that, right? Back in the day, you're going to college, colleges at the time were not these large government-funded research universities. They were small liberal arts colleges. The professor usually taught a variety of classes. And say's book Before the Civil War was one of the leading college textbooks, right? Interesting to note, okay? Times have changed, unfortunately. And what's also important is that influenced by these theories and just the general dispensation of the post-depression era, politicians start to attack the central bank's monopoly privileges. Saying, hey, wait a second, this bank caused this huge hardship. Why did we charter this institution in the first place? This seems a very crony, very corrupt. And we've got many, many figures here that we'll be talking about for the remainder of the talk. We've got a young Andrew Jackson dashing figure, the former general in the War of 1812. He was a politician from Tennessee. He became very anti-bank during this time period. Very anti-central bank, very anti-fractional reserve banking. And we'll see how this influenced his later fight against the bank later on. You've got Martin Van Buren. This is an actual photograph of him. He's one of my favorite presidents, one of Murray Rothbard's favorite presidents. He was a New York senator at the time. So he was a senator in New York in the U.S. Congress. And he starts to become very hard money as a result of the panic. We've got James K. Polk from Tennessee, so one of Andrew Jackson's right-hand men. Andrew Jackson was known as Old Hickory. Polk was known as Young Hickory, fighting monetary privileges in Tennessee. And we've got one of my favorite characters, Thomas Hart, quote, Old Bullion Benton, who was one of Missouri's first senators. What's fascinating about Benton is that he became a staunch ally of Jackson in the 1820s. But during the War of 1812, he actually got into a duel with Jackson, him and his brother. You can read this. It was almost something that came from some sort of Wild, Wild West movie because they're in the inn. They're firing at each other. Jesse Benton's brother shoots Jackson in the arm. He shoots him in the arm. Benton gets stabbed like five times. Jackson's on this bed. He's bleeding on this mattress. He keeps the bullet in his arm for 20 years. We'll actually see how this plays into later. So just, it's a little odd, I guess I'll say that because the most important thing I want you to understand is that even if you're gonna do a fight someone, you fight someone, there's a knife or there's a gun involved, you can still be their best friend later on as long as you both hate central banks, which is exactly what happened, right? Because Benton in the 1820s and the 1830s, he kind of becomes Jackson's muscle in the Senate. It's really funny because he shot at the guy, right? Usually if someone shoots at you, you're not really good friends with them later on, but when you're trying to fight monetary cronyism, you're gonna recruit all the allies you can get. Okay, but the central bank has powerful friends, right? The central bank has the cronies. Recruited Hamiltonian intellectuals, loan the money to periodicals in return for their support, okay? This is, for example, the National Intelligence Service, the New York Times of the day, okay? They received loans from the bank and in their articles, they supported the bank. Oh, okay, I wonder where that came from. Because they earnestly believe this isn't the benefit of the public, this will benefit the public or because they're getting money from the bank, right? There's a new bank president, Nicholas Biddle. He was a very thorough Hamiltonian. He started to take charge of the second bank of the United States in the 1820s and he wants to nationalize the country's monetary system to sort of bring all the state banks under the control of the second bank of the United States. Nicholas Biddle would always argue that his policies were not inflationary. He was just trying to control the money supply, improve economic activity and so on and he started to become Jackson's worst enemy. Somebody he just really despised. So I've got a picture from Biddle here. Oh wait, no, sorry, that's not Biddle. There's Biddle, okay, there's some similarities between them but this is actually Nicholas Biddle and he was seen as like a protégé of Hamilton. He never really met him but he was sort of seen as the 1820s, 1830s version of Alexander Hamilton. They've also, the bank also has other friends, particularly politicians in Congress who will defend the bank. So why are they defending the bank? Well, because the bank loaned them money, okay? The Federal Reserve can't directly loan money to individuals but the second bank of the United States could and it loaned money to Thomas de Lorenzo's two favorite politicians, Henry Clay and Daniel Webster. We've heard him talk about Henry Clay before. Webster was extremely corrupt. He was a prominent politician from Massachusetts, a senator and he would, he would get a retainer from the bank, right? Basically saying, look, we'll keep you on our payroll. You gotta defend the bank. And we have letters from Webster writing to Nicholas Biddle and other central bank officials saying, well, I want my retainer quote, renewed or refreshed as usual. Saying, look, if you want me to defend you in Congress, gotta pay up. I want my money, right? That's, that's pretty bad. But, well, he defended it because he was getting paid from the bank. So here is Henry Clay, very prominent big government politician at the time, very pro-central banking. And this is Daniel Webster. We can just look at these pictures and we know they're bad people, right? Just look at them. Look at those eyes there, you know, they're up to no good, all right? It's just, it's just bad people, I guess, no. Okay, so a big turning point or a big catalyst moment for the Jacksonians is in the election of 1824 when Jackson defeats Secretary of State John Quincy Adams, John Adams' son. John Quincy Adams, interestingly enough, owned stock in the second bank of the United States and interestingly enough, he supported the second bank of the United States. Would you look at that? In the popular and the electoral vote. But he didn't have majorities, he had pluralities. So that meant we had to go to an overtime election where the House of Representatives decided on who would be the winner. And Adams works with Speaker of the House, Clay, to steal the election. Basically, you scratch my back and I'll scratch yours. Clay says, I'll make you president now and you make me Secretary of State. And back then, Secretary of State was the most reliable stepping stone into the White House. Basically, all of the former presidents or many of them were previously Secretary of State. And this is something that really shocked the country. This happened on the first round of balloting in the House and Jackson was absolutely furious. Like, he didn't like how all of these deals were made before the election, excuse me, before the House election. And Jackson fumed and he's got this great quote. It says, the Judas of the West has closed the contract. He's referring to Henry Clay of Kentucky and received the 30 pieces of silver. His end will be the same, right? So, again, I'm talking about a man who got into a duel with someone who's killed people in duels. You generally don't want to upset him. And what really rankled Jackson in many Westerners was Henry Clay got the House delegation of Kentucky, the Kentucky delegation to vote for Jackson, even though the official record showed that Jackson, excuse me, that Adams did not receive a single vote in Kentucky, right? There were actually some votes later, but really this was seen as a big smack in the face, right? And this upsets Jackson, which is something life tip, don't do. So, the revolution of 1828 happens and most notably Martin Van Buren creates the Libertarian Democratic Party. Yes, this is the exact same Democratic Party of today. It's the same party structure. The party structure of the Democrats created by the Jacksonians, but very different policies they supported, very small government, anti-central banking, anti-protective tariffs, anti-internal improvements, limited foreign policy, anti-national debt. This is a great party and this is Van Buren's, goes to Van Buren's credit. He literally forges this Democratic Party in a couple of years and he decides to make Jackson a charismatic standard bearer. Jackson was this general in the War of 1812. He basically won our only major victory in the War of 1812, the Battle of New Orleans. And he's just seen as this charming general and he also shares similar philosophy with Van Buren. And in particular what they decide to do is they're gonna fight congressional cronyism with the presidential veto, right? The presidential veto when it was designed by the federalists at the US Constitutional Convention, they created it to sort of defend cronyism in case Congress ever got to reform inclined. But what Jackson and Van Buren decide to do is they say, hey, we can veto various policies proposed or various policies enacted by Congress. So turning the presidential veto transforming it into this anti-crony sword, well the credit goes to Jackson and Van Buren, okay? This is executive reform. This is reform through the executive. And this has really been the only effective way that throughout history we've been able to accomplish various reforms. Of course, Congress can get stuff done but they usually need the prodding or the support of the executive. Something very crucial to keep in mind for the modern era. So triumphantly, Jackson smashes Adams in the rematch, okay? So he throws at Adams, gets kicked out of office. Jackson becomes president. The Jacksonians ride into office and the question is, well, does Jackson embark upon monetary reform? Jefferson attacked the central bank in the 1790s but when he entered office he moderated, right? The same thing happened to Jackson. Well, actually no, okay? Instead there's this huge so-called bank war. This momentous bank war where at the beginning of Jackson's first presidential term he starts attacking the central bank, right? And this is a very surprising. A lot of people didn't expect this or a lot of people thought that Jackson wouldn't actually do this but it occurs. So the opening artillery fire as it was called back in the day started at the beginning of Jackson's presidential term when various economists, William Goge and Condi Rago, Jacksonian affiliated economists, some of them were directly linked to the party. Goge was, Rago was not. They criticized the banking system as quote, the foundation of artificial inequality of wealth and thereby of artificial inequality of power. What's very important is artificial. They're not attacking the banking system. They're not anti-capitalist. They're attacking a privileged banking system. They're attacking a banking system that's artificial because it's been privileged with various policies allowing banks to suspend species payments, governments owning, partially owning the banks, so on and so forth, right? So this is the economists are getting involved, at least the good ones. And Jackson's first congressional address in December, 1829, he declares the central bank's existence, quote, well-questioned by a large portion of our fellow citizens. So he's saying, well, why do we have a central bank? Can you imagine a president today in their address to Congress, they're questioning the Federal Reserve, they're saying its existence is well-questioned by a large portion of our fellow citizens? I mean, this would cause the financial press and the establishment to go totally apoplectic. They would flip out. They would say, how could you do this? And the exact thing happened about 200 years ago, right? So Nicholas Biddle, for one, as we'll talk about, was very worried about this. He had actually voted for Jackson in 1828, partially to molify him, to sort of pacify him. He wanted to cozy up to Jackson. And in particular, why is Biddle stunned? Well, if you remember, I said the bank had a 20-year charter, right? 1816, it was chartered. It has to renew its charter in 1836, all right? So now Biddle's worried, he's saying, well, this could, if Jackson gets re-elected, this could potentially pose a problem for the central bank, all right? So Biddle is upset. And what Biddle does is he counterattacks through the time-honored method of propaganda and bribery. And so he sends his congressional allies various pro-central banking information. Sends them various pamphlets on central banking. He loans money to congressmen to defend the central bank, et cetera. Something else that I think it's very important to note is, well, he recruits his own intellectuals. And these are the various court intellectuals Rothbard would frequently criticize. He enlists the academic American Quarterly Review, so a very prominent journal at the time period. One of the fields of study was economics. And this was owned by a recipient of, well, loans from the second bank of the United States. So wow, would you look at that? It's very interesting. I wonder why it's very pro-central bank. He corrupts newspapers with money. So notably, there was the courier and inquirer, a pro-Jacksonian newspaper. And what Biddle did is, well, he gave it a $15,000 loan and then this newspaper becomes very anti-Jackson and pro-central banking. It's funny how money works like that. So it's important to note, the main thing is that, well, from 1829 to 1832, Biddle spends about $50,000 to $100,000 on pamphlets. He lends $100,000 to various owners of newspapers and he loans congressmen about $100,000 to $200,000. These might look like small numbers now, but that was actually a good chunk of change back in the day. So Biddle's not an idiot. He knows what he's gotta do and he's gotta renew and refresh some retainers, so to speak. He's gotta get Webster on his side. Webster was on his side because he got his retainer renewed. But the siege continues very notably in 1830. Jackson proposes a gold warehouse. Okay, so he says, this is the monetary reform I wanna try to embark upon. Quote, a bank without power to make loans and though issuing no paper would check the issues of the state banks by taking their notes so long as they continue to be redeemed in specie. This is the independent treasury. Jackson is saying, well, we wanna have the bank not connected with the government anymore. We want the government, the treasury, to now keep all of its money in its own vaults and in particular to keep only gold and silver in its vaults. They didn't wanna privilege any bank, any bank's notes or deposits by accepting it. It's very hard money. It's very magnificent reform, which we actually later created, which is great. And Senator Thomas Benton in the Senate, Jackson's muscle in the Senate, he blasts the bank as a privileged monopoly unbecoming of a, quote, Confederacy of states, right? And so Benton's Jackson's most favored, like a Senator, he's supporting him tremendously. And what it's great is that in early 1832, as Jackson is stepping up his attack on the bank, his arm is starting to really hurt him. I don't know, probably because there's been a bullet in there for 20 years. I'm not a doctor, I don't know. But he gets the bullet finally removed and then he says, let's go kill a central bank, right? Finally gets that bullet removed and now he's ready to go for the jugular. So then the various Henry Clay steps in, right? Cause politicians, there are always, you know, many of them, they're up to no good. And then Clay wants to defeat Jackson in the 1832 election, right? Clay still wants to be president. This is something Clay desperately wanted and he never got throughout his whole life. He went to the grave wishing he was president. He was nominee multiple times by the opposition wig party, but he never got the coveted prize. And his running mate in 1832 was a former shareholder and director of the second bank of the United States. Well, would you look at that? That's a little interesting, I guess. I don't know, I'm not gonna bring any tiny threads here, I'll leave that to the audience. And one thing Clay does is he urges Biddle to push for an early recharter before the election. So what he says is don't wait till 1836. That's what you gotta do, push for it before the presidential election in 1832, because here's how it's gonna go down. This is what Clay told Biddle. He says if Jackson actually vetoes the bank, he's gonna lose, he's gonna seem so ridiculous the public's gonna get upset. And if he doesn't veto the recharter, he's still gonna lose, cause now he's gonna look very weak. He clearly, his bark was bigger than his bite and the public is going to vote him out of office. So this is a win-win according to Henry Clay, right? And Clay's main rationale here or his main motivation is that well, if he loses, that means I win, right? Cause the 1832 election was Clay versus Jackson. So now this monetary reform is getting caught up in the politics of the time and the election cycle of the time, much like some more current monetary debates, right? Important to note. So what happens in 1832, right? This bank veto is, excuse me, the bank charter is up in front of Congress. In Congress again, they've been bribed by Biddle. Many of them had formally worked for the bank. They've gotten loans from the bank, et cetera. They passed the recharter bill in July, July 1832, right? Here we are at Mises U in 2022, right? And that was so many years ago. I can't do the math off the top of my head cause I'm an Austrian economist, but we know it was, the timing was perfect in this, right? It was, this whole thing was planned. In Biddle triumphantly appears before Congress and he hosts a party after, and I just remember reading this in a book and I'm thinking, how could he, right? You know, you think of this classic DC party. He's got this huge gala and everything. He says, look, the bank charter has been passed, but Jackson had long ago decided to veto what he called the corrupting monster, right? So he already knew he was gonna do this. He's like, no, Biddle's going down. That's what he said, all right? So Jackson, he says, I'm gonna veto this. And there's a great quote. It was right around when Congress passing the bank bill and Van Buren goes to see Jackson and Jackson, he looks very distraught. He's very distressed and he says to Van Buren, he goes, the bank, Mr. Van Buren is trying to kill me, but I will kill it, right? And it's very dramatic. I mean, apparently when he said it was less dramatic, but I'm still gonna sound dramatic because it's a great quote. And this is how I imagine him. You know, he's slamming his fist on the table. He's sort of his old general Jackson self and he's going, nope, it's going down, killing the bank. This is a great political cartoon at the time. Jackson frequently thought of the bank as this hydra, it was this multi-headed hydra. It's got all these tentacles, it's corrupting state banks, it's corrupting Congress, it's corrupting politicians, newspapers, et cetera. And there's Jackson, he's got his sword and he's fighting the bank, right? He's fighting the hydra, which I just think this is a great cartoon. It's a great political cartoon. It just shows Jackson as how I think he wants to be remembered. Or at least how I want to remember Jackson. So that's what's gonna go on. So Jackson, he vetoes the bank. He surprisingly vetoes the bank. He says, nope, not getting the recharter, you're out of luck. And he transforms the presidential veto. He technically had vetoed a very prominent internal improvements bill in 1830, but this is really a big one. Wow, he actually vetoed a bank recharter. This is now made a team that Jacksonians were, they really meant business. And as veto said, when the quote rich and powerful and quote scheme to devise quote artificial, again remember artificial, distinctions to grant titles, gratuities and exclusive privileges, special privileges, the public can complain of the injustice, right? So he's saying, well, we got monetary cronyism. Yeah, the public has a right to complain. That's very, very, very important veto. In fact, I think it's the best presidential reform against cronyism. And what's fascinating to note is that the veto was written by an economist, Amos Kendall, a very prominent Jacksonian, right? And if you've read Murray Rothbard's history of economic thought, Kendall actually makes a little bit of a showing. In the 1810s, he had written some articles for a newspaper, kind of sketching out the basics of the marginal utility doctrine. So I just think that's really cool. You've got this proto-Austrian and here he is more or less writing the veto to get rid of a central bank. Coincidence? I think not, right? And as a prominent historian has said, because sometimes people criticize the Jacksonian saying, well, Jackson was just against a bank. He was just against banking. Well, historian Donald Cole's a prominent biographer of Amos Kendall said quote, the veto is an attack on government privilege, not as some have suggested on capitalism. That's very important. The veto is an attack on government privilege, not as some have suggested on capitalism, okay? So it's a fight against cronyism. It's not just me, this is what the Jacksonians were actually doing. In Biddle's Furious, he described Jackson's decision as anarchy and to make things even worse, the president victoriously defeats Clay in the 1832 election. So now Biddle and Clay, they went for the so-called two-point conversion and they came home empty-handed. They didn't get a bank, right? They lost its recharter and they didn't even get the election, right? So they didn't get either of their goals. And after the election, Van Buren writes to Jackson, he says quote, the idea of the establishment of any bank in any of the states, referring to a central bank, is I take it entirely done away with by the veto, right? So we've, this is not just a veto against the second bank of the United States, it's a veto against central banking, right? Very important. And Jackson in subsequent years, he said quote, the hydro of corruption is only scotched, not dead, right? So Jackson literally called it a hydro, right? We've seen the picture, that's a hydro, right? Jackson called it, you know, she truly believed it was a hydro. In 1833, Jackson removes the government's deposits and the hydro officially loses its recharter in 1836. So the central bank is basically whittled away, right? And in 1840, Jackson's presidential successor supports his call to separate the government from all banks and his independent treasury, Jackson's original program, separates the government from banking by only accepting payments and species, right? It was a magnificent reform. It was probably our best system in the monetary sphere on the federal level between 1840 and 1860 when the federal government had the least involvement with banking. It's very, very important, right? So just to wrap up, say Andrew Jackson's veto dealt a deadly blow to central banking in the United States. And using executive power has its pitfalls as I talk about in cronyism, but it really seems to be the only effective way to enact reform, right? You gotta tack cronyism through the executive branch. Congress really isn't gonna do the heavy lifting, right? Legislative bodies are always gonna want the goodies. But the executive can combat with vetoes as long as you got the right person in charge, so to speak. It's a tough job, but if you got that, it's a little bit downhill from there, all right? So for the modern era, again, if we look at some successes in the United States during our own life, recently during COVID, it's really been through the executive branch, at least at the state level, through the executive branch. Okay, so to conclude, cronyism must read for the origins of special interest legislation. It's a fantastic gift for Labor Day, Halloween, Thanksgiving, Christmas, and especially Valentine's Day. So just keep it in mind. At the very least, it cures insomnia. If you have trouble sleeping at night, you can open it up. It's gonna put you to bed, just like that. It's gonna be fantastic. So it's something to keep in mind. And it's also a nice paperweight, so it serves many purposes. And stay tuned for the sequel. So thank you very much.